[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                         A 2022 REVIEW OF THE FARM BILL

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

                                HEARINGS

                               BEFORE THE

               SUBCOMMITTEE ON CONSERVATION AND FORESTRY

                                AND THE

        SUBCOMMITTEE ON COMMODITY EXCHANGES, ENERGY, AND CREDIT

                                AND THE

       SUBCOMMITTEE ON BIOTECHNOLOGY, HORTICULTURE, AND RESEARCH

                                AND THE

           SUBCOMMITTEE ON LIVESTOCK AND FOREIGN AGRICULTURE

                                AND THE

    SUBCOMMITTEE ON NUTRITION, OVERSIGHT, AND DEPARTMENT OPERATIONS

                                AND THE

      SUBCOMMITTEE ON GENERAL FARM COMMODITIES AND RISK MANAGEMENT

                                AND THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               ----------                              

 FEBRUARY 2, 2022; MARCH 1, 8, 16, 29; APRIL 5, 6, 28; JUNE, 8, 9, 14, 
            22; JULY 13, 14, 20; SEPTEMBER 15, 20, 29, 2022

                               ----------                              

                           Serial No. 117-27
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


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

                     A 2022 REVIEW OF THE FARM BILL

                                 ------

                                 PART 1
                                 
                                 


                       A 2022 REVIEW OF THE FARM BILL
=======================================================================

                                HEARINGS

                               BEFORE THE

               SUBCOMMITTEE ON CONSERVATION AND FORESTRY

                                AND THE

        SUBCOMMITTEE ON COMMODITY EXCHANGES, ENERGY, AND CREDIT

                                AND THE

       SUBCOMMITTEE ON BIOTECHNOLOGY, HORTICULTURE, AND RESEARCH

                                AND THE

           SUBCOMMITTEE ON LIVESTOCK AND FOREIGN AGRICULTURE

                                AND THE

    SUBCOMMITTEE ON NUTRITION, OVERSIGHT, AND DEPARTMENT OPERATIONS

                                AND THE

      SUBCOMMITTEE ON GENERAL FARM COMMODITIES AND RISK MANAGEMENT

                                AND THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

 FEBRUARY 2, 2022; MARCH 1, 8, 16, 29; APRIL 5, 6, 28; JUNE, 8, 9, 14, 
            22; JULY 13, 14, 20; SEPTEMBER 15, 20, 29, 2022

                               __________

                           Serial No. 117-27


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                              __________
                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
49-906 PDF                 WASHINGTON : 2023                    
          
-----------------------------------------------------------------------------------                              
                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA,\1\ Texas               AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO,\5\ New York         DOUG LaMALFA, California
SHONTEL M. BROWN, Ohio               RODNEY DAVIS, Illinois
BOBBY L. RUSH, Illinois              RICK W. ALLEN, Georgia
CHELLIE PINGREE, Maine               DAVID ROUZER, North Carolina
GREGORIO KILILI CAMACHO SABLAN,      TRENT KELLY, Mississippi
Northern Mariana Islands             DON BACON, Nebraska
ANN M. KUSTER, New Hampshire         DUSTY JOHNSON, South Dakota
CHERI BUSTOS, Illinois               JAMES R. BAIRD, Indiana
SEAN PATRICK MALONEY, New York       JIM HAGEDORN,\2\ Minnesota
STACEY E. PLASKETT, Virgin Islands   CHRIS JACOBS, New York
TOM O'HALLERAN, Arizona              TROY BALDERSON, Ohio
SALUD O. CARBAJAL, California        MICHAEL CLOUD, Texas
RO KHANNA, California                TRACEY MANN, Kansas
AL LAWSON, Jr., Florida              RANDY FEENSTRA, Iowa
J. LUIS CORREA, California           MARY E. MILLER, Illinois
ANGIE CRAIG, Minnesota               BARRY MOORE, Alabama
JOSH HARDER, California              KAT CAMMACK, Florida
CYNTHIA AXNE, Iowa                   MICHELLE FISCHBACH, Minnesota
KIM SCHRIER, Washington              JULIA LETLOW,\4\ Louisiana
JIMMY PANETTA, California            BRAD FINSTAD,\7\ Minnesota
SANFORD D. BISHOP, Jr., Georgia
MARCY KAPTUR,\3\ Ohio
SHARICE DAVIDS,\6\ Kansas

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                  (ii)

                               __________
\1\ Resigned from Congress April 1, 2022.
\2\ Deceased February 18, 2022.
\3\ Elected to Committee May 11, 2022.
\4\ Resigned from Committee May 13, 2022.
\5\ Resigned from Congress May 25, 2022.
\6\ Elected to Committee June 14, 2022.
\7\ Elected to Committee September 13, 2022.
?

               Subcommittee on Conservation and Forestry

               ABIGAIL DAVIS SPANBERGER, Virginia, Chair

FILEMON VELA, Texas                  DOUG LaMALFA, California, Ranking 
CHELLIE PINGREE, Maine               Minority Member
ANN M. KUSTER, New Hampshire         SCOTT DesJARLAIS, Tennessee
TOM O'HALLERAN, Arizona              RICK W. ALLEN, Georgia
JIMMY PANETTA, California            TRENT KELLY, Mississippi
J. LUIS CORREA, California           DUSTY JOHNSON, South Dakota
KIM SCHRIER, Washington              MARY E. MILLER, Illinois
                                     BARRY MOORE, Alabama

               Paul Babbitt, Subcommittee Staff Director

                                 ______

        Subcommittee on Commodity Exchanges, Energy, and Credit

                 ANTONIO DELGADO,\8\ New York, Chairman

SEAN PATRICK MALONEY,\9\ New York    MICHELLE FISCHBACH, Minnesota, 
STACEY E. PLASKETT, Virgin Islands   Ranking Minority Member
RO KHANNA, California                AUSTIN SCOTT, Georgia
CYNTHIA AXNE, Iowa                   DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
ANGIE CRAIG, Minnesota               CHRIS JACOBS, New York
ANN M. KUSTER, New Hampshire         TROY BALDERSON, Ohio
CHERI BUSTOS, Illinois               MICHAEL CLOUD, Texas
------                               RANDY FEENSTRA, Iowa
                                     KAT CAMMACK, Florida

               Emily German, Subcommittee Staff Director

                                 ______

       Subcommittee on Biotechnology, Horticulture, and Research

               STACEY E. PLASKETT, Virgin Islands, Chair

ANTONIO DELGADO, New York            JAMES R. BAIRD, Indiana, Ranking 
SHONTEL M. BROWN, Ohio               Minority Member
KIM SCHRIER, Washington              AUSTIN SCOTT, Georgia
JIMMY PANETTA, California            ERIC A. ``RICK'' CRAWFORD, 
CHELLIE PINGREE, Maine               Arkansas
SEAN PATRICK MALONEY, New York       RODNEY DAVIS, Illinois
SALUD O. CARBAJAL, California        DON BACON, Nebraska
AL LAWSON, Jr., Florida              CHRIS JACOBS, New York
JOSH HARDER, California              TROY BALDERSON, Ohio
J. LUIS CORREA, California           MICHELLE FISCHBACH, Minnesota
                                     JULIA LETLOW, Louisiana
                                     ------

              Malikha Daniels, Subcommittee Staff Director

                                 (iii)

                               __________
\8\ Resigned from Congress April 1, 2022.
\9\ Appointed Subcommittee Chairman June 3, 2022.


           Subcommittee on Livestock and Foreign Agriculture

                    JIM COSTA, California, Chairman

ABIGAIL DAVIS SPANBERGER, Virginia   DUSTY JOHNSON, South Dakota, 
JAHANA HAYES, Connecticut            Ranking Minority Member
J. LUIS CORREA, California           SCOTT DesJARLAIS, Tennessee
JOSH HARDER, California              VICKY HARTZLER, Missouri
RO KHANNA, California                DAVID ROUZER, North Carolina
CYNTHIA AXNE, Iowa                   TRENT KELLY, Mississippi
BOBBY L. RUSH, Illinois              DON BACON, Nebraska
STACEY E. PLASKETT, Virgin Islands   JAMES R. BAIRD, Indiana
ANGIE CRAIG, Minnesota               TRACEY MANN, Kansas
SANFORD D. BISHOP, Jr., Georgia      RANDY FEENSTRA, Iowa
------                               BARRY MOORE, Alabama
                                     ------

              Daniel Feingold, Subcommittee Staff Director

                                 ______

    Subcommittee on Nutrition, Oversight, and Department Operations

                 JAHANA HAYES, Connecticut, Chairwoman

JAMES P. McGOVERN, Massachusetts     DON BACON, Nebraska,  Ranking 
ALMA S. ADAMS, North Carolina        Minority Member
SHONTEL M. BROWN, Ohio               ERIC A. ``RICK'' CRAWFORD, 
BOBBY L. RUSH, Illinois              Arkansas
GREGORIO KILILI CAMACHO SABLAN,      SCOTT DesJARLAIS, Tennessee
Northern Mariana Islands             VICKY HARTZLER, Missouri
SALUD O. CARBAJAL, California        JAMES R. BAIRD, Indiana
AL LAWSON, Jr., Florida              CHRIS JACOBS, New York
ANN M. KUSTER, New Hampshire         MICHAEL CLOUD, Texas
JIMMY PANETTA, California            KAT CAMMACK, Florida
                                     BRAD FINSTAD,\10\ Minnesota

             Katherine Stewart, Subcommittee Staff Director

                                 ______

      Subcommittee on General Farm Commodities and Risk Management

                     CHERI BUSTOS, Illinois, Chair

ANGIE CRAIG, Minnesota               AUSTIN SCOTT, Georgia, Ranking 
SALUD O. CARBAJAL, California        Minority Member
TOM O'HALLERAN, Arizona              ERIC A. ``RICK'' CRAWFORD, 
AL LAWSON, Jr., Florida              Arkansas
SANFORD D. BISHOP, Jr., Georgia      RICK W. ALLEN, Georgia
------                               DAVID ROUZER, North Carolina
                                     TRACEY MANN, Kansas
                                     MARY E. MILLER, Illinois

              Joshua Tonsager, Subcommittee Staff Director

                                  (iv)

                               __________
                               
                               
\10\ Appointed to Subcommittee September 13, 2022.


                             C O N T E N T S

                              ----------                              
                                                                   Page

 Wednesday, February 2, 2022--Subcommittee on Conservation and Forestry

LaMalfa, Hon. Doug, a Representative in Congress from California, 
  opening statement..............................................    33
Spanberger, Hon. Abigail Davis, a Representative in Congress from 
  Virginia, opening statement....................................     1
    Prepared statement...........................................     2
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     3

                               Witnesses

Ducheneaux, Zach, Administrator, Farm Service Agency, U.S. 
  Department of Agriculture, Washington, D.C.....................     5
    Prepared statement...........................................     6
    Supplementary material.......................................    43
Cosby, Terry, Chief, Natural Resources Conservation Service, U.S. 
  Department of Agriculture, Washington, D.C.....................     9
    Prepared statement...........................................    11
    Supplementary material.......................................    43
    Submitted questions..........................................    58

                           Submitted Material

Allison, Lesli, Executive Director, Western Landowners Alliance, 
  submitted statement............................................    49
O'Neil, Colin, Legislative Director; Anne Schechinger, Midwest 
  Director, Environmental Working Group, submitted statement.....    51
Obodozie, Lotanna, Climate Campaign Director, National Young 
  Farmers Coalition, submitted letter............................    47

                 Tuesday, March 1, 2022--Full Committee

Bustos, Hon. Cheri, a Representative in Congress from Illinois, 
  opening statement..............................................    64
Scott, Hon. Austin, a Representative in Congress from Georgia, 
  opening statement..............................................    64
    Submitted letter.............................................   151
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................    61
    Prepared statement...........................................    62
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................    62

                               Witnesses

Doyle, S. Brad, President, American Soybean Association, Weiner, 
  AR.............................................................    68
    Prepared statement...........................................    69
    Submitted questions..........................................   156
Johansson, Ph.D., Robert, Director of Economics and Policy 
  Analysis, American Sugar Alliance, Alexandria, VA..............    73
    Prepared statement...........................................    75
    Supplementary material.......................................   152
    Submitted questions..........................................   157
Berg, Nicole, Vice President, National Association of Wheat 
  Growers, Paterson, WA..........................................    78
    Prepared statement...........................................    80
    Supplementary material.......................................   154
    Submitted questions..........................................   160
Edgington, Chris, President, National Corn Growers Association, 
  Saint Ansgar, IA...............................................    87
    Prepared statement...........................................    89
    Submitted questions..........................................   161
Ford, Jaclyn D., Delegate, National Cotton Council, Alapaha, GA..    92
    Prepared statement...........................................    94
    Supplementary material.......................................   154
    Submitted questions..........................................   163
Ulibarri, Verity, Member, Farm Bill Advisory Committee, National 
  Sorghum Producers, Melrose, NM.................................    97
    Prepared statement...........................................    99
    Submitted questions..........................................   164
Coleman, Clark, Bismarck, ND; on Behalf of National Sunflower 
  Association, National Barley Growers Association, U.S. Canola 
  Association, and USA Dry Pea and Lentil Council................   100
    Prepared statement...........................................   102
    Submitted questions..........................................   165
James, Jennifer, Member, Board of Directors, USA Rice, Newport, 
  AR.............................................................   103
    Prepared statement...........................................   105
    Submitted questions..........................................   166
Rogers, Meredith McNair, Camilla, GA; on behalf of U.S. Peanut 
  Federation.....................................................   109
    Prepared statement...........................................   111
    Submitted questions..........................................   167

                           Submitted Material

Garcia, Marcela, President and Chief Executive Officer, U.S. Rice 
  Producers Association..........................................   155

 Tuesday, March 8, 2022--Subcommittee on Commodity Exchanges, Energy, 
                               and Credit

Craig, Hon. Angie, a Representative in Congress from Minnesota, 
  opening statement..............................................   169
Delgado, Hon. Antonio, a Representative in Congress from New 
  York, opening statement........................................   184
    Prepared statement...........................................   170
Fischbach, Hon. Michelle, a Representative in Congress from 
  Minnesota, opening statement...................................   171
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................   172
    Submitted letter.............................................   203

                                Witness

Torres Small, Hon. Xochitl, Under Secretary for Rural 
  Development, U.S. Department of Agriculture, Washington, D.C...   173
    Prepared statement...........................................   174
    Supplementary material.......................................   205
    Submitted questions..........................................   208

                           Submitted Material

Matheson, Hon. Jim, Chief Executive Officer, National Rural 
  Electric Cooperative Association, submitted letter.............   207

               Wednesday, March 16, 2022--Full Committee

Allen, Hon. Rick W., a Representative in Congress from Georgia, 
  submitted letter...............................................   329
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................   211
    Prepared statement...........................................   212
    Submitted letter.............................................   323
    Submitted letter on behalf of Sarah Gallo, Vice President, 
      Agriculture and Environment, Biotechnology Innovation 
      Organization...............................................   325
    Submitted statements on behalf of:
        Clark, Cindy, Senior Policy Manager Regenerative 
          Agriculture Policy, Ceres..............................   327
        McKinney, Ted, Chief Executive Officer, National 
          Association of State Departments of Agriculture........   328
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................   213

                               Witnesses

Conner, Hon. Charles F., President and Chief Executive Officer, 
  National Council of Farmer Cooperatives; Co-Chair, Food & 
  Agriculture Climate Alliance, Washington, D.C..................   215
    Prepared statement...........................................   217
    Submitted questions..........................................   345
Duncanson, Kristin Weeks, Owner and Partner, Duncanson Growers; 
  Member, AGree Economic and Environmental Risk Coalition, 
  Mapleton, MN...................................................   221
    Prepared statement...........................................   222
    Submitted questions..........................................   347
Heitkamp, Hon. Heidi, Co-Chair, Farm and Forest Carbon Solutions 
  Task Force, Bipartisan Policy Center, Washington, D.C..........   248
    Prepared statement...........................................   249
    Supplementary material.......................................   332
    Submitted questions..........................................   348
Raygoza, Shakera, Owner, Terra Preta Farm; CFAP2 Technical 
  Assistant, National Young Farmers Coalition, Edinburg, TX......   257
    Prepared statement...........................................   259
    Supplementary material.......................................   333
    Submitted questions..........................................   349
Humiston, Ph.D., Hon. Glenda, Vice President, Agriculture and 
  Natural Resources, University of California; Director, 
  Agricultural Experiment Station and Cooperative Extension 
  Service, Oakland, CA...........................................   261
    Prepared statement...........................................   263
    Supplementary material.......................................   334
    Submitted questions..........................................   350
Outlaw, Ph.D., Joe L., Professor, Extension Economist, and Co-
  Director, Agricultural and Food Policy Center, Department of 
  Agricultural Economics, Texas A&M University, College Station, 
  TX.............................................................   266
    Prepared statement...........................................   267
    Supplementary material.......................................   334
    Submitted questions..........................................   351

                           Submitted Material

Earthjustice, submitted letter...................................   334
Environmental Working Group, submitted statement.................   342
The Breakthrough Institute, submitted statement..................   344

 Tuesday, March 29, 2022--Subcommittee on Biotechnology, Horticulture, 
                              and Research

Baird, Hon. James R., a Representative in Congress from Indiana, 
  opening statement..............................................   355
Plaskett, Hon. Stacey E., a Delegate in Congress from Virgin 
  Islands, opening statement.....................................   353
    Prepared statement...........................................   354

                               Witnesses

Moffitt, Hon. Jennifer Lester, Under Secretary for Marketing and 
  Regulatory Programs, U.S. Department of Agriculture, 
  Washington, D.C................................................   356
    Prepared statement...........................................   358
    Submitted questions..........................................   419
Cosby, Terry, Chief, Natural Resources Conservation Service, U.S. 
  Department of Agriculture, Washington, D.C.....................   363
    Prepared statement...........................................   365
    Supplementary material.......................................   417
    Submitted questions..........................................   421
Batcha, Laura, Chief Executive Officer and Executive Director, 
  Organic Trade Association, Washington, D.C.....................   383
    Prepared statement...........................................   385
Smith, Brie Reiter, Vice President, Product Leadership, 
  Driscoll's, Inc., Watsonville, CA; on behalf of Specialty Crop 
  Farm Bill Alliance.............................................   387
    Prepared statement...........................................   389
Oshima, Marc, Co-Founder and Chief Marketing Officer, AeroFarms, 
  Newark, NJ.....................................................   391
    Prepared statement...........................................   393
Olive, Ph.D., Nathaniel ``Nate'', owner/operator, Ridge to Reef 
  Farm; Co-Founder and President, Virgin Islands Farmers 
  Alliance, Inc., Frederiksted, St. Croix, USVI..................   399
    Prepared statement...........................................   401
Kettler, Bruce, Director, Indiana State Department of 
  Agriculture; Second Vice President, National Association of 
  State Departments of Agriculture, Indianapolis, IN.............   403
    Prepared statement...........................................   404
    Submitted question...........................................   423

                           Submitted Material

International Fresh Produce Association, et al., submitted letter   418

                 Tuesday, April 5, 2022--Full Committee

Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................   425
    Prepared statement...........................................   426
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................   427

                               Witnesses

Torres Small, Hon. Xochitl, Under Secretary for Rural 
  Development, U.S. Department of Agriculture, Washington, D.C.; 
  accompanied by Karama Neal, Ph.D., Administrator, Rural 
  Business--Cooperative Service, USDA; Chris McLean, LL.M., J.D., 
  Acting Administrator, Rural Utilities Service, USDA............   429
    Prepared statement...........................................   430
    Supplementary material.......................................   527
    Submitted question...........................................   592
Olsen, Andrew ``Andy'', Senior Policy Advocate, Environmental Law 
  & Policy Center, Chicago, IL...................................   479
    Prepared statement...........................................   480
    Supplementary material.......................................   527
Cherrier, William ``Bill'', Executive Vice President and Chief 
  Executive Officer, Central Iowa Power Cooperative, Des Moines, 
  IA; on behalf of the National Rural Electric Cooperative 
  Association....................................................   483
    Prepared statement...........................................   484
Gruber, Ph.D., Patrick R., Chief Executive Officer, Gevo, Inc., 
  Englewood, CO..................................................   487
    Prepared statement...........................................   489
McKenna III, John J. ``Jay'', Chief Executive Officer, Nacero, 
  Inc., Houston, TX..............................................   499
    Prepared statement...........................................   501
    Supplementary material.......................................   593

                           Submitted Material

Gallo, Sarah, Vice President, Agriculture and Environment, 
  Biotechnology Innovation Organization, submitted letter........   530
Singh, Ph.D., Rina, Executive Vice President, Policy, Alternative 
  Fuels & Chemicals Coalition, submitted letter..................   583

    Wednesday, April 6, 2022--Subcommittee on Livestock and Foreign 
                              Agriculture

Costa, Hon. Jim, a Representative in Congress from California, 
  opening statement..............................................   595
    Prepared statement...........................................   598
    Submitted article............................................   679
    Submitted report.............................................   682
    Submitted statement on behalf of American Soybean Association   748
Johnson, Hon. Dusty, a Representative in Congress from South 
  Dakota, opening statement......................................   599
    Submitted letter.............................................   753
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................   600

                               Witnesses

Whitley, Daniel B., Administrator, Foreign Agricultural Service, 
  U.S. Department of Agriculture, Washington, D.C................   602
    Prepared statement...........................................   603
    Submitted question...........................................   754
Charles, Sarah, Assistant to the Administrator, Bureau for 
  Humanitarian Assistance, U.S. Agency for International 
  Development, Washington, D.C...................................   612
    Prepared statement...........................................   614
O'Keefe, Bill, Executive Vice President for Mission and 
  Mobilization, Catholic Relief Services, Baltimore, MD..........   634
    Prepared statement...........................................   636
Harden, Krysta, President and Chief Executive Officer, U.S. Dairy 
  Export Council, Arlington, VA..................................   643
    Prepared statement...........................................   645
Berg, Nicole, President, National Association of Wheat Growers, 
  Patterson, WA..................................................   653
    Prepared statement...........................................   655
Husain, Ph.D., Arif, Chief Economist, United Nations World Food 
  Programme, Rome, IT............................................   663
    Prepared statement...........................................   665

               Wednesday, April 28, 2022--Full Committee

Adams, Hon. Alma S., a Representative in Congress from North 
  Carolina, prepared statement...................................   764
Bacon, Hon. Don, a Representative in Congress from Nebraska, 
  opening statement..............................................   763
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................   757
    Prepared statement...........................................   759
    Submitted letter on behalf of Bill Sweeney, Senior Vice 
      President, Government Affairs, AARP........................   815
Hayes, Hon. Jahana, a Representative in Congress from 
  Connecticut, opening statement.................................   762
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................   760
    Submitted article............................................   817

                                Witness

Dean, Stacy, Deputy Under Secretary for Food, Nutrition, and 
  Consumer Services, U.S. Department of Agriculture, Washington, 
  D.C.; accompanied by Cindy Long, Administrator, Food and 
  Nutrition Service, USDA........................................   766
    Prepared statement...........................................   767
    Supplementary material.......................................   819
    Submitted questions..........................................   825

  Wednesday, June 8, 2022--Subcommittee on Nutrition, Oversight, and 
                         Department Operations

Bacon, Hon. Don, a Representative in Congress from Nebraska, 
  opening statement..............................................   859
    Submitted blog...............................................   921
Hayes, Hon. Jahana, a Representative in Congress from 
  Connecticut, opening statement.................................   857
    Prepared statement...........................................   858
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................   860

                               Witnesses

Beal, J.D., Michael J., Chief Financial Officer, Balls Food 
  Stores, Kansas City, KS; on behalf of National Grocers 
  Association....................................................   861
    Prepared statement...........................................   863
    Submitted question...........................................   927
Giacomi, Daniel R., Social Services Program Administration 
  Manager, Connecticut Department of Social Services, Hartford, 
  CT.............................................................   866
    Prepared statement...........................................   868
    Supplementary material.......................................   922
    Submitted questions..........................................   928
Cox, J.D., Ty Jones, Vice President of Food Assistance Policy, 
  Center on Budget and Policy Priorities, Washington, D.C........   876
    Prepared statement...........................................   878
    Supplementary material.......................................   924
    Submitted questions..........................................   929

                           Submitted Material

Schaeffer, Sam, Chief Executive Officer, Center for Employment 
  Opportunities, Inc., submitted letter..........................   926

 Thursday, June 9, 2022--Subcommittee on General Farm Commodities and 
                            Risk Management

Bustos, Hon. Cheri, a Representative in Congress from Illinois, 
  opening statement..............................................   931
    Prepared statement...........................................   932
Scott, Hon. Austin, a Representative in Congress from Georgia, 
  opening statement..............................................   933
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................   934
    Submitted articles...........................................   977
    Submitted report.............................................   990

                               Witnesses

Janzen, Ph.D., Joseph P., Assistant Professor, Agricultural and 
  Consumer Economics, Department of Agricultural and Consumer 
  Economics, University of Illinois at Urbana-Champaign, Urbana, 
  IL.............................................................   936
    Prepared statement...........................................   938
    Supplementary material.......................................  1013
Craven, Robert H., Associate Director and Extension Professor, 
  Center for Farm Financial Management, Department of Applied 
  Economics, University of Minnesota, St. Paul, MN...............   946
    Prepared statement...........................................   948
    Supplementary material.......................................  1014
Rainey, Ph.D., Ronald, Assistant Vice President and Professor, 
  Division of Agriculture, University of Arkansas System; 
  Director, Southern Risk Management Education Center, U of AR, 
  Fayetteville, AR...............................................   951
    Prepared statement...........................................   953
Outlaw, Ph.D., Joe L., Professor, Extension Economist, and Co-
  Director, Agricultural and Food Policy Center, Department of 
  Agricultural Economics, Texas A&M University, College Station, 
  TX.............................................................   956
    Prepared statement...........................................   958
    Supplementary material.......................................  1014

                 Tuesday, June 14, 2022--Full Committee

Adams, Hon. Alma S., a Representative in Congress from North 
  Carolina, submitted letter.....................................  1091
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................  1019
    Prepared statement...........................................  1021
Panetta, Hon. Jimmy, a Representative in Congress from 
  California, submitted letter...................................  1096
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................  1022

                               Witnesses

Waide, Kyle, President and Chief Executive Officer, Atlanta 
  Community Food Bank, Atlanta GA................................  1023
    Prepared statement...........................................  1025
    Supplementary material.......................................  1101
    Submitted question...........................................  1105
Besaw, Gary J., Director, Menominee Tribal Department of 
  Agriculture and Food Systems and Menominee Tribal Food 
  Distribution Program, Keshena, WI..............................  1029
    Prepared statement...........................................  1030
    Submitted questions..........................................  1105
Gruner, Ph.D., RDN, Jessie G., Director of Community Innovations, 
  Pinnacle Prevention, Chandler, AZ..............................  1031
    Prepared statement...........................................  1033
    Supplementary material.......................................  1103
Moss, Spencer C., Executive Director, West Virginia Food and Farm 
  Coalition, Inc., Charleston, WV................................  1035
    Prepared statement...........................................  1036
Smittcamp, William S. ``Bill'', President and Chief Executive 
  Officer, Wawona Frozen Foods, Inc., Clovis, CA; on behalf of 
  American Frozen Foods Institute................................  1050
    Prepared statement...........................................  1052

                Wednesday, June 22, 2022--Full Committee

Cammack, Hon. Kat, a Representative in Congress from Florida, 
  submitted article..............................................  1191
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................  1107
    Prepared statement...........................................  1109
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................  1110
    Submitted blog...............................................  1189

                               Witnesses

Marlow, Scott, Deputy Administrator for Farm Programs, Farm 
  Service Agency, U.S. Department of Agriculture, Washington, 
  D.C............................................................  1111
    Prepared statement...........................................  1113
    Submitted questions..........................................  1205
Coale, Dana H., Deputy Administrator, Dairy Program, Agricultural 
  Marketing Service, U.S. Department of Agriculture, Washington, 
  D.C............................................................  1116
    Prepared statement...........................................  1118
Lesher, Laura ``Lolly'', Owner/Operator, Way-Har Farms, 
  Bernville, PA; on behalf of National Milk Producers Federation, 
  Dairy Farmers of America.......................................  1142
    Prepared statement...........................................  1143
    Submitted questions..........................................  1206
Durkin, Mike, President and Chief Executive Officer, Leprino 
  Foods Company, Denver, CO; on behalf of International Dairy 
  Foods Association..............................................  1147
    Prepared statement...........................................  1148
    Submitted questions..........................................  1208
Forgues, Travis, Executive Vice President of Membership, Organic 
  Valley D CROPP Cooperative, La Farge, WI.......................  1155
    Prepared statement...........................................  1157
    Submitted questions..........................................  1211
Bozic, Ph.D., Marin, Assistant Professor, Department of Applied 
  Economics, University of Minnesota, St. Paul, MN...............  1163
    Prepared statement...........................................  1165
    Submitted questions..........................................  1215

                           Submitted Material

Etka, Steven, Coordinator, Midwest Dairy Coalition, submitted 
  statement......................................................  1201
Maltby, Ed, Executive Director, Northeast Organic Dairy Producers 
  Alliance, submitted letter.....................................  1193
Mendenhall, Kate, Director, Organic Farmers Association, 
  submitted letter...............................................  1199
ActionAid USA, et al., submitted sign-on letter..................  1203

  Wednesday, July 13, 2022--Subcommittee on Conservation and Forestry

LaMalfa, Hon. Doug, a Representative in Congress from California, 
  opening statement..............................................  1224
Spanberger, Hon. Abigail Davis, a Representative in Congress from 
  Virginia, opening statement....................................  1223
    Prepared statement...........................................  1224
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................  1227

                               Witnesses

Moore, Randy, Chief, U.S. Forest Service, U.S. Department of 
  Agriculture, Washington, D.C.; accompanied by Christopher 
  French, Deputy Chief, National Forest System; Jaelith Hall-
  Rivera, Deputy Chief, State and Private Forestry, USFS, USDA...  1228
    Prepared statement...........................................  1230
    Supplementary material.......................................  1295
    Submitted questions..........................................  1295
Hite, Rita N., President and Chief Executive Officer, American 
  Forest Foundation, Washington, D.C.............................  1253
    Prepared statement...........................................  1255
Reed, Douglas, President, Green Diamond Resource Company; Chair, 
  Board of Directors, National Alliance of Forest Owners, 
  Seattle, WA....................................................  1260
    Prepared statement...........................................  1262
Martin, Christopher, Forester, State of Connecticut; President, 
  National Association of State Foresters, Hartford, CT..........  1266
    Prepared statement...........................................  1268
Humphries, Rebecca A., Co-Chief Executive Officer, National Wild 
  Turkey Federation, Edgefield, SC...............................  1271
    Prepared statement...........................................  1272
Palmer, Sally R., Central Appalachian External Affairs Advisor, 
  The Nature Conservancy, Arlington, VA..........................  1276
    Prepared statement...........................................  1278
Schultz, Tom, Vice President of Resources and Government Affairs, 
  Idaho Forest Group; President, Federal Forest Resource 
  Coalition, Coeur d'Alene, ID...................................  1285
    Prepared statement...........................................  1287

                Thursday, July 14, 2022--Full Committee

Carbajal, Hon. Salud O. a Representative in Congress from 
  California, prepared statement.................................  1302
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................  1299
    Prepared statement...........................................  1300
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................  1301
    Submitted letter.............................................  1363

                               Witnesses

Kauffman, Ph.D., Nathan S., Assistant Vice President, Economist, 
  and Omaha Branch Executive, Federal Reserve Bank of Kansas 
  City, Omaha Branch, Omaha, NE..................................  1303
    Prepared statement...........................................  1305
    Submitted questions..........................................  1389
Davy, J.D., Dania C., Board Representative, Socially 
  Disadvantaged Farmers and Ranchers Policy Research Center, 
  Alcorn State University; Director of Land Retention and 
  Advocacy, Federation of Southern Cooperatives/Land Assistance 
  Fund, East Point, GA...........................................  1306
    Prepared statement...........................................  1308
    Submitted questions..........................................  1390
Asherman, Julia, Owner, Rag & Frass Farms, LLC, Jeffersonville, 
  GA; on behalf of National Young Farmers Coalition..............  1310
    Prepared statement...........................................  1311
    Supplementary material.......................................  1369
    Submitted questions..........................................  1392
Tillman, Willard, Member of the Board, Rural Coalition/Coalicion 
  Rural, Oklahoma City, OK.......................................  1314
    Prepared statement...........................................  1315
    Supplementary material.......................................  1379
Brown, Hon. Adam, Owner, B&B Farms, Decatur, IL; on behalf of 
  Illinois Farm Bureau...........................................  1325
    Prepared statement...........................................  1327
    Submitted question...........................................  1395

Wednesday, July 20, 2022--Subcommittee on General Farm Commodities and 
                            Risk Management

Bustos, Hon. Cheri, a Representative in Congress from Illinois, 
  opening statement..............................................  1401
    Prepared statement...........................................  1402
Scott, Hon. Austin, a Representative in Congress from Georgia, 
  opening statement..............................................  1403
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................  1459

                               Witnesses

Haney, Robert ``Bob'', Executive Chairman, AgriSompo, Chief 
  Executive Officer, AgriSompo North America, Sompo International 
  Holdings Ltd.; Member, Board of Directors, American Association 
  of Crop Insurers, West Des Moines, IA; on behalf of Crop 
  Insurance and Reinsurance Bureau, Inc..........................  1405
    Prepared statement...........................................  1407
Fowler, Kathy, Owner, Fowler Agency, LLC, Memphis, TX; on behalf 
  of Crop Insurance Professionals Association....................  1424
    Prepared statement...........................................  1426
Offerdahl, Alex, Crop Insurance Division Head, Watts and 
  Associates, Inc., Billings, MT.................................  1436
    Prepared statement...........................................  1438
Haag, Tom, First Vice President, National Corn Growers 
  Association, Eden Valley, MN...................................  1439
    Prepared statement...........................................  1441
Cromley, Lee, Georgia State Chairman, American Cotton Producers, 
  Brooklet, GA...................................................  1445
    Prepared statement...........................................  1446

              Thursday, September 15, 2022--Full Committee

Allen, Hon. Rick W., a Representative in Congress from Georgia, 
  submitted letter...............................................  1527
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................  1463
    Prepared statement...........................................  1464
Thompson, Hon. Glenn a Representative in Congress from 
  Pennsylvania, opening statement................................  1465

                               Witnesses

Torres Small, Hon. Xochitl, Under Secretary for Rural 
  Development, U.S. Department of Agriculture, Washington, D.C.; 
  accompanied by Chris McLean, LL.M., J.D., Acting Administrator, 
  Rural Utilities Service, USDA..................................  1467
    Prepared statement...........................................  1469
    Supplementary material.......................................  1528
    Submitted questions..........................................  1532
Follansbee, J.D., B. Lynn, Vice President Strategic Initiatives 
  and Partnerships, USTelecom, Washington, D.C...................  1506
    Prepared statement...........................................  1508
    Supplementary material.......................................  1531
    Submitted question...........................................  1535
Clark, Hon. Tarryl, Commissioner, First District, Stearns County, 
  Minnesota; Chair, Telecommunications and Technology Policy 
  Steering Committee, National Association of Counties, St. 
  Cloud, MN......................................................  1510
    Prepared statement...........................................  1512
    Supplementary material.......................................  1531
    Submitted question...........................................  1536
Hawkins, J. Garrett, President, Missouri Farm Bureau, Jefferson 
  City, MO; on behalf of American Farm Bureau Federation.........  1515
    Prepared statement...........................................  1516
    Supplementary material.......................................  1532
    Submitted question...........................................  1536

 Tuesday, September 20, 2022--Subcommittee on Conservation and Forestry

LaMalfa, Hon. Doug, a Representative in Congress from California, 
  opening statement..............................................  1540
Spanberger, Hon. Abigail Davis, a Representative in Congress from 
  Virginia, opening statement....................................  1539
    Prepared statement...........................................  1540
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................  1541

                               Witnesses

Crowder, Michael, President, National Association of Conservation 
  Districts, Washington, D.C.....................................  1543
    Prepared statement...........................................  1545
    Supplementary material.......................................  1583
Berg, Nicole, President, National Association of Wheat Growers, 
  Patterson, WA..................................................  1551
    Prepared statement...........................................  1552
Faeth, Lori, Senior Director of Government Relations, Land Trust 
  Alliance, Washington, D.C......................................  1557
    Prepared statement...........................................  1559
    Supplementary material.......................................  1583
    Submitted question...........................................  1588
Wiese, Shayne, Manager, Operations, Wiese & Sons: Good Doin' 
  Bulls; Member, Iowa Cattlemen's Association; Member, National 
  Cattlemen's Beef Association, Manning, IA......................  1562
    Prepared statement...........................................  1563
    Supplementary material.......................................  1585

                           Submitted Material

Environmental Defense Fund, et al., submitted statement..........  1585

Thursday, September 29, 2022--Subcommittee on Nutrition, Oversight, and 
                         Department Operations

Hayes, Hon. Jahana, a Representative in Congress from 
  Connecticut, opening statement.................................  1591
    Prepared statement...........................................  1592
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................  1593

                               Witnesses

Jacobs-Young, Ph.D., Hon. Chavonda, Under Secretary for Research, 
  Education, and Economics and Chief Scientist, U.S. Department 
  of Agriculture, Washington, D.C................................  1595
    Joint prepared statement.....................................  1596
    Submitted question...........................................  1620
Ducheneaux, Zach, Administrator, Farm Service Agency, U.S. 
  Department of Agriculture, Washington, D.C.....................  1599
    Joint prepared statement.....................................  1596
    Supplementary material.......................................  1619
    Submitted question...........................................  1621

 
                     A 2022 REVIEW OF THE FARM BILL

                        (CONSERVATION PROGRAMS)

                              ----------                              


                      WEDNESDAY, FEBRUARY 2, 2022

                  House of Representatives,
                 Subcommittee on Conservation and Forestry,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Abigail Davis Spanberger [Chair of the Subcommittee] 
presiding.
    Members present: Representatives Spanberger, Pingree, 
Kuster, O'Halleran, Panetta, Schrier, LaMalfa, DesJarlais, 
Allen, Kelly, Johnson, Miller, Moore, and Thompson (ex 
officio).
    Staff present: Paul Babbitt, Prescott Martin III, John 
Busovsky, Patricia Straughn, and Dana Sandman.

     OPENING STATEMENT OF HON. ABIGAIL DAVIS SPANBERGER, A 
            REPRESENTATIVE IN CONGRESS FROM VIRGINIA

    The Chair. This hearing of the Subcommittee on Conservation 
and Forestry entitled, A 2022 Review of the Farm Bill: 
Conservation Programs, will come to order. Welcome, and thank 
you for joining today's hearing. After brief remarks, Members 
will receive testimony from our witnesses today, and then the 
hearing will be open to questions.
    Good morning to our witnesses, and welcome to today's 
hearing to update Members on the status and operation of NRCS 
and FSA conservation programs. We are here today to examine how 
America's voluntary conservation programs are working for 
producers, how investments in USDA's conservation programs are 
addressing our resource needs, and how these programs can be 
utilized to help address the climate crisis.
    This hearing presents an opportunity for us to discuss what 
is working and what can work better as we look ahead to the 
2023 Farm Bill.
    I would like to welcome both Chief Cosby and Administrator 
Ducheneaux to the Subcommittee today. I know Subcommittee 
Members on both sides of the aisle are looking forward to 
hearing your updates as to how the programs that you oversee 
are working for farmers, ranchers, and foresters across the 
nation.
    Your agencies have been hard at work, and Administrator 
Ducheneaux, I would like to first mention the work you are 
doing to get folks enrolled in CRP through a new signup and to 
expand CREP by enabling negotiations of matching funds. And 
Chief Cosby, I know that January has been a big month for NRCS, 
and I commend all that you are doing to expand access to 
conservation across the country. Your announcement of 118 new 
Equity Conservation Cooperative Agreements shows a commitment 
to bringing the benefits of conservation to historically 
underserved communities.
    In addition, I am especially excited about the work that 
NRCS is doing to expand available resources for farmers 
embracing climate-smart agriculture. Farmers are the original 
conservationists, and there is so much we can learn from our 
growers and producers on how to combat the climate crisis.
    That is why I am proud to be the sponsor of the bipartisan 
Growing Climate Solutions Act (H.R. 2820). Our legislation is 
supported by nearly every major American farm group, as well as 
many major environmental groups and Fortune 500 companies, not 
to mention, many growers and foresters across Virginia's 7th 
District.
    In a time when bipartisanship is hard-earned, this bill 
stands as a testament to how we can work together for our 
constituents, if only we are willing to come to the table in 
good faith and set partisanship aside. This legislation passed 
the Senate last year on a vote of 92 to 8, and it is long past 
time for the House to follow suit and do right by our farmers, 
rural America, and our planet.
    Today, I am thrilled that the USDA is already taking bold 
steps to bring farmers to the table on climate-smart 
agriculture. NRCS's recent announcement that EQIP conservation 
incentive contracts will be available nationwide, and that the 
USDA will be launching a new streamlined cover crop program 
demonstrates the agency's commitment to making it easier for 
farmers to work to address climate concerns while benefitting 
their bottom lines.
    In addition to your update to CSP that allows producers to 
immediately re-enroll the following year, it is a great step 
towards making it easier for producers to participate.
    Finally, the $225 million investment in RCPP will enable 
more investments that leverage partner dollars and 
participation. All of these programs deliver on-the-ground 
resources that help us mitigate and adapt to climate change, 
and benefit our producers.
    I am eager to hear more about the changes that you all are 
making and your plans for the future.
    [The prepared statement of Ms. Spanberger follows:]

 Prepared Statement of Hon. Abigail Davis Spanberger, a Representative 
                       in Congress from Virginia
    Good morning--and welcome to today's hearing to update Members on 
the status and operation of NRCS and FSA conservation programs.
    We are here today to examine how America's voluntary conservation 
programs are working for producers, how investments in USDA's 
conservation programs are addressing our resource needs, and how these 
programs can be utilized to help address the climate crisis. This 
hearing presents an early opportunity for us to discuss what is working 
and what can work better as we look ahead to the 2023 Farm Bill.
    I would like to welcome both Chief Cosby and Administrator 
Ducheneaux to the Subcommittee today. I know Subcommittee Members on 
both sides of the aisle are looking forward to hearing your updates as 
to how the programs that you oversee are working for farmers, ranchers, 
and foresters across the nation.
    Your agencies have been hard at work. Administrator Ducheneaux, I 
would like to first mention the work you are doing to get folks 
enrolled in CRP through a new sign-up and expand CREP by enabling 
negotiation of matching funds. And Chief Cosby, I know that January has 
been a big month for NRCS, and I commend all that you are doing to 
expand access to conservation across the country. Your announcement of 
118 new Equity Conservation Cooperative Agreements shows a commitment 
to bringing the benefits of conservation to historically underserved 
communities.
    In addition, I am especially excited about the work NRCS is doing 
to expand available resources for farmers embracing climate-smart 
agriculture. Farmers are the original conservationists, and there is so 
much we can learn from our growers and producers on how to combat the 
climate crisis. This is why I am the proud sponsor of the bipartisan 
Growing Climate Solutions Act. Our legislation is supported by nearly 
every major American farm group, as well as many major environmental 
groups and Fortune 500 companies. In a time when bipartisanship is 
hard-earned, this bill stands as a testament to how we can work 
together for our constituents, if only we are willing to come to the 
table in good faith and set partisanship aside. This legislation passed 
the Senate last year on a vote of 92-8, and it is long past time that 
the House follow suit and do the right thing for our farmers, rural 
America, and our planet.
    Today, I am thrilled that USDA is already taking bold steps to 
bring farmers to the table on climate-smart agriculture. NRCS' recent 
announcement that EQIP Conservation Incentive Contracts will be 
available nationwide and that the USDA will be launching a new, 
streamlined EQIP cover crop program, demonstrates the agency's 
commitment to making it easier for farmers to work to address climate 
concerns while benefiting their bottom-lines. In addition, your update 
to CSP that allows producers to immediately re-enroll the following 
year is a great step toward making it easier for producers to 
participate. Finally, the $225 million investment in RCPP will enable 
more investments that leverage partner dollars and participation.
    All of these programs deliver on the ground resources that help us 
mitigate and adapt to climate change.
    I am eager to hear more about these changes and your plans for the 
future.
    With that, I look to the Ranking Member, Mr. LaMalfa of California, 
for his comments.

    The Chair. And with that, I look to the Ranking Member of 
the full Committee for his opening comments.

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

    Mr. Thompson. Well, thank you, Chair Spanberger, and I 
think hopefully Ranking Member LaMalfa is going to be able to 
join us here virtually momentarily. Thank you both for holding 
today's hearing.
    It is hard to believe that it has already been just over 3 
years since the 2018 Farm Bill, when the bill was signed into 
law. Today begins the process of reviewing the implementation 
of the farm bill, allowing Members the opportunity to hear how 
program changes are working, and ensuring these changes are 
being administered as Congress intended. This is an immensely 
important responsibility of this Committee, oversight, and 
review of each title must be completed before we can even begin 
to contemplate the next farm bill reauthorization.
    As a former Chairman of this Subcommittee, I am excited to 
kick off this process by reviewing conservation programs. I 
have long appreciated great benefits that locally led, 
incentive-based voluntary conservation provides for both the 
environment, agriculture producers, the economy as an effective 
tool for de-listing endangered species, and climate. All great 
outcomes as a result of these great conservation programs that 
we have codified over the years.
    Now, during the writing of the 2014 Farm Bill when I 
chaired this Subcommittee, there was a concerted effort to 
strengthen, simplify, and streamline our conservation programs, 
and since then, including the 2018 Farm Bill, this Committee 
provided further reforms to increase the financial support and 
improve the delivery of these programs to producers.
    Now, I would have to say that it must remain the 
conservation title and not be repurposed as the climate title. 
I think sequestering greenhouse gases is an obvious outcome of 
our conservation programs. That is why American farmers, 
ranchers, and foresters are climate heroes. They really lead 
the way in the world on the issue of climate and sequestering 
over 6.1 gigatons of carbon annually, far more than what is 
emitted in that vast land space of what is considered all under 
the title of natural land solutions. But it must be the 
conservation title.
    While a number of conservation programs can clearly provide 
climate benefits, as I have discussed, the broad emphasis of 
Title II and its programs must remain on the proven 
conservation practices that will directly benefit the producer 
and support the sustainability of American agriculture.
    With that in mind, I remain concerned over a rush to 
implement some of the climate-related proposals through farm 
bill programs, or administratively by USDA before being fully 
vetted by this Committee. The agriculture portion of the Build 
Back Better (Pub. L. 117-169) is just one example of pursuing 
questionable policies with significant funding through the 
Agriculture Committee without any vetting to any degree or 
considering long-term impacts of such action. Our conservation 
programs are critical for the sustainability of our farms and 
ranches, and as such, long-term changes should be made through 
thoughtful consideration by this Committee.
    With all this in mind, I am really pleased that we are 
holding today's hearing, and that we are finally beginning the 
oversight process of the 2018 Farm Bill, ensuring programs are 
implemented as Congress intended.
    Chief Cosby and Administrator Ducheneaux, thank you both 
for participating today and being here. Your leadership is much 
appreciated and we look forward to your testimony.
    And with that, Madam Chair, I yield back.
    The Chair. Thank you, Mr. Ranking Member, and I want to 
just express my appreciation that you so consistently come to 
our Subcommittee hearings. I think that speaks to the 
importance that you put on this issue, so I appreciate you 
being here.
    I am looking now to confirm that we are going to move 
forward with the witnesses testimony, and I will invite the 
Ranking Member of the Subcommittee to give his opening remarks 
when he is able to join us. Again, there were some travel 
challenges and I greatly recognize sometime the challenges 
facing our West Coast Members. So, he will join us when he is 
able.
    And with that, I would also request that other Members 
submit their opening statements for the record so that 
witnesses may begin their testimony and ensure that there is 
ample time for questions.
    So, I am pleased to welcome two distinguished witnesses to 
the Committee today. Our first witness is Mr. Zach Ducheneaux, 
the Administrator of the Farm Service Agency, and our second 
witness is Mr. Terry Cosby, the Chief of the Natural Resources 
Conservation Service. You will have 5 minutes to deliver your 
testimony. There is a timer that is visible before you. It will 
count down to 0, at which point your time has expired.
    So, Mr. Ducheneaux, I welcome you to begin first. Please 
begin when you are ready.

   STATEMENT OF ZACH DUCHENEAUX, ADMINISTRATOR, FARM SERVICE 
    AGENCY, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

    Mr. Ducheneaux. Good morning. Chair Spanberger, Ranking 
Member LaMalfa, and distinguished Members of the Subcommittee. 
It is an honor and privilege to appear before you, today. To 
those I have not yet had the pleasure of meeting, my name is 
Zach Ducheneaux and I am the Administrator of the Farm Service 
Agency. Prior to joining the Farm Service Agency, I was a 
third-generation rancher on my family's operation on the 
Cheyenne River Sioux Indian Reservation.
    While folks don't always think of the Farm Service Agency, 
as a conservation-focused agency, our Conservation Division 
oversees several programs that protect our drinking water, 
improve soil health, reduce erosion, preserve wildlife habitat, 
and restore forests and wetlands for future generations. Our 
emergency conservation programs also support producers whose 
operations are damaged by natural disasters.
    I have always appreciated FSA's commitment to voluntary, 
producer-focused, working lands conservation, and I am 
committed to maintaining those key pillars in our conservation 
programs. At the same time, we have a unique opportunity to 
expand, and in some cases, reimagine these programs to bring in 
new and diverse partners, better address the climate crisis, 
and invest in the long-term health of our land and the 
producers who care for it.
    In my written testimony, I have highlighted FSA's key 
conservation programs, and today I would like to share some of 
the changes and updates we have implemented, since I have 
become Administrator.
    The Conservation Reserve Program is FSA's flagship 
conservation program and is one of the largest private lands 
conservation programs in the United States. Through CRP, FSA 
provides program participants with an annual rental payment in 
exchange for removing environmentally sensitive land from 
customary agricultural production and planting long-term 
resource conserving species. Last year, we made several 
improvements to increase producer interest and enrollment in 
CRP, while strengthening the climate benefits of this program. 
Specifically, we adjusted soil rental rates, where data 
supported such an adjustment, increased payments for practice 
incentives, and increased payments for water quality practices. 
We also added the climate-smart practice incentive for CRP 
general and continuous signups to better leverage this program 
towards climate outcomes, including carbon sequestration.
    Our changes to CRP have already begun to pay off. Last 
year, producers and landowners enrolled 5.3 million acres 
through signups, turning the tide of declining enrollment from 
the previous 4 years. The total signup of 5.3 million acres 
surpassed USDA's 4 million acre goal, and reversed the trend of 
decreasing enrollment, and we are especially happy with our 
signup for the Grasslands Program, 2.6 million acres.
    Also in my written testimony, I provided information on 
several key conservation programs under the CRP umbrella, but 
given the limited time today, I want to focus on the 
Conservation Reserve Enhancement Program and the changes we 
made there that will further inspire public-private partnership 
and also work more with our underserved communities, including 
Tribal Governments.
    I want to take a moment or two to discuss two of our 
disaster assistance programs that are housed within FSA's 
Conservation Division. First, the Emergency Conservation 
Program provides assistance to farmers to repair damage caused 
during natural disasters. In response to the drought, we 
expanded our policies to allow producers of livestock to use 
portable pumps to better distribute grazing in their overtaxed 
property because of the drought. Second, the Emergency Forest 
Restoration Program provides payments to owners of non-
industrial private forests to carry out emergency measures and 
to restore land damaged by natural disasters. In Fiscal Year 
2021, we allocated $56.9 million to critical EFRP assistance, 
as well as $140 million to the Emergency Conservation Program.
    In closing, I want to take this opportunity to express my 
gratitude and admiration for the entire USDA workforce, 
especially the team that I get to work with at the Farm Service 
Agency. There isn't a farmer or rancher in the country that 
would be disappointed at the caliber and quality of work of 
those I get to surround myself with every day, and I make sure 
that I give them the proper credit they deserve. In the last 2 
years, we have delivered nearly double our normal program 
allocations, and done so oftentimes home-schooling our children 
in the background. So, we really want to take our hats off to 
that staff, let them know we appreciate the good work, and 
also, thank the Committee and the Congress for the opportunity 
that we get to deliver the programs that you authorize and fund 
for us to carry out to improve outcomes for our producers all 
across the country.
    Thank you.
    [The prepared statement of Mr. Ducheneaux follows:]

  Prepared Statement of Zach Ducheneaux, Administrator, Farm Service 
        Agency, U.S. Department of Agriculture, Washington, D.C.
    Chair Spanberger, Ranking Member LaMalfa, and distinguished Members 
of the Subcommittee, it is an honor and privilege to appear before you 
today. To those who I have not yet had the pleasure of meeting, my name 
is Zach Ducheneaux, and I am the Administrator of the U.S. Department 
of Agriculture's Farm Service Agency. Prior to coming on board at the 
Farm Service Agency, I was a third-generation rancher on our family 
ranch on the Cheyenne River Sioux Reservation.
    While this is my first formal appearance before your Subcommittee, 
over the past year since I was sworn in, I have enjoyed the opportunity 
to speak with many of you and your staff, along with farmers and 
ranchers in your districts across the country. I am grateful to have 
the opportunity to visit with you today and share our vision at the FSA 
to expand upon our conservation programs.
    While folks don't always think of the Farm Service Agency as a 
conservation-focused agency, our Conservation Division oversees several 
programs that protect our drinking water, reduce soil erosion, preserve 
wildlife habitat, restore forests and wetlands, and improve soil health 
for future generations. Our emergency conservation programs also 
support producers whose operations are damaged by natural disasters.
    I have always appreciated FSA's commitment to voluntary, producer-
oriented, working lands conservation. I am committed to maintaining 
those key pillars of our conservation programs. At the same time, we 
have a unique opportunity to expand, and in some cases, reimagine these 
programs to bring in new and diverse partners, better address the 
climate crisis, build resilience for our agricultural producers, and 
invest in the long-term health of our land and the producers who care 
for it.
    In my testimony today, I'd like to highlight some of our key 
conservation programs, along with some of the changes and updates we 
have implemented since I've become Administrator.
Farm Bill Program Implementation of FSA Conservation Programs
    The Conservation Reserve Program (CRP) is one of the largest 
voluntary private lands conservation programs in the United States. 
Through CRP, FSA pays producers a yearly rental payment in exchange for 
removing environmentally sensitive land from agricultural production 
and planting species that will improve environmental quality and 
address issues raised by state, regional, and national conservation 
initiatives. The long-term goal of the program is to reward producers 
who re-establish valuable land cover, which in turn helps conserve and 
improve soil and water quality, prevent soil erosion, and reduce the 
loss of wildlife habitat. Contracts for land enrolled in CRP are 
generally from 10 to 15 years in length.
    There are several ways for producers to participate in CRP, 
including through our grassland enrollments, our general signup, and 
our continuous signup. Last year, producers and landowners enrolled 5.3 
million acres through CRP signups, including nearly 2.6 million in the 
grassland signup, nearly 1.9 million acres for the general signup, and 
902,000 acres for the continuous signup (as of September 10, 2021). 
This year's signup surpassed USDA's 4 million acre goal.
    In accordance with the 2018 Farm Bill, in Fiscal Year 2021, CRP was 
capped at 25 million acres, and in Fiscal Year 2022, CRP is capped at 
25.5 million acres. In Fiscal Year 2023 the maximum acreage enrollment 
will increase to 27 million acres. Now, despite Congress raising the 
CRP enrollment targets in the 2018 Farm Bill, there was a decrease in 
enrollment for the past 2 years. As a priority last spring, we took a 
hard look at CRP and made changes to put us on a path to reverse this 
trend. In order to increase producer interest and enrollment, FSA 
adjusted soil rental rates where data supported such an adjustment, 
increased payments for practice incentives, and increased payments for 
water quality practices. We also added a Climate-Smart Practice 
Incentive for CRP general and continuous signups to better leverage 
this program toward climate outcomes, including carbon sequestration. 
Climate-Smart CRP practices include the establishment of trees and 
permanent grasses, the development of wildlife habitat, and wetland 
restoration. The Climate-Smart Practice Incentive is annual, and its 
amount is based on the benefits of each practice type.
    Additionally, we established a grassland CRP minimum rental rate. 
The grassland CRP program helps landowners and operators protect 
grassland, including rangeland and pastureland, and certain other 
lands, while managing these lands under an NRCS-approved grazing 
management plan that are designed to ensure these working lands provide 
biodiversity of plant and animal populations and improve environmental 
quality, while positively contributing to the economy of the region. 
FSA updated the grassland CRP signup in Fiscal Year 2021 to establish a 
minimum rental rate of $15 per acre that increased rental rates in 
1,300 counties across the nation. FSA also established National 
Grassland Priority Zones that aim to increase enrollment of grasslands 
in migratory corridors and environmentally sensitive areas.
    Haying and grazing of CRP acres is authorized under certain 
conditions to, among other things, improve the quality and performance 
of the CRP cover, or to provide emergency relief to livestock producers 
due to certain natural disasters. There are two types of haying and 
grazing authorizations: emergency and non-emergency. Emergency haying 
and grazing of CRP acres may be authorized to provide relief to 
livestock producers in areas affected by severe drought or other 
natural disasters. During the 2021 program year, 1,181 counties in 23 
states became eligible for CRP emergency haying and grazing.
    Through CRP, producers can also enroll land in FSA's Farmable 
Wetlands Program (FWP). FWP is designed to restore previously farmed 
wetlands and wetland buffers to improve both vegetation and water flow. 
FWP is a voluntary program to restore up to 750,000 acres of farmable 
wetlands and associated buffers. Participants must agree to restore the 
wetlands, establish plant cover, and to not use enrolled land for 
commercial purposes. Plant cover may include plants that are partially 
submerged or specific types of trees. FSA runs the program with 
assistance from other government agencies and local conservation 
groups.
    Additionally, FSA announced efforts to enhance natural resource 
benefits through CRP by moving the highly popular State Acres for 
Wildlife Enhancement (SAFE) practices from general signup to the 
continuous CRP signup. Unlike the general signup, producers can sign up 
year-round for the continuous signup and be eligible for additional 
incentives. FSA also made Highly Erodible Land Initiative (HELI) 
practices available in both the general and continuous signups.
    Notably, we also expanded both the CRP's Soil Health and Income 
Protection Program (SHIPP) and the Clean Lakes, Estuaries and Rivers 
(CLEAR30) 30 year contracts, in addition to investing $10 million in 
the CRP Monitoring, Assessment and Evaluation (MAE) program, that will 
enlist partners and establish an ambitious effort to measure and 
monitor the soil carbon and climate resilience impacts of conservation 
practices through soil sampling and testing on land enrolled in over 
the life of CRP contracts.
    The last component of CRP that I'll highlight is the Conservation 
Reserve Enhancement Program (CREP). CREP targets specific locally-
driven conservation concerns, and Federal funds are supplemented with 
non-Federal funds. We currently have CREP Agreements in 26 states, and 
these partner-led efforts are driving important environmental outcomes. 
In exchange for removing environmentally sensitive land from production 
and establishing permanent resource-conserving plant species, farmers 
and ranchers are paid an annual rental payment along with other Federal 
and non-Federal incentives as applicable per each CREP agreement. 
Participation is voluntary, and the contract period is typically 10-15 
years.
    In a rule published December 13, 2021, FSA updated two 
discretionary requirements found to be adversely affecting 
participation in CRP. The first change amended a requirement that CREP 
partners provide at least half of their matching funds in the form of 
direct payments to participants. As a result of this change, partners 
may now provide matching funds in any combination of cash, in-kind 
contributions, or technical assistance. In the second change, FSA 
eliminated a 25 percent payment reduction for land required to be in 
compliance with resource conservation measures or practices required by 
Tribal, state, or other local laws, ordinances, or regulations. We made 
this change to increase enrollment of acres under CRP not only through 
the enrollment of acres subject to existing state regulations, but also 
contiguous acres eligible for complimentary practices.
    FSA has added three regional staff serving the eastern, central, 
and western regions to improve the efficiency and effectiveness of 
engagement with potential CREP partners to promote conservation 
initiatives. FSA continues to expand outreach efforts to encourage 
participation across the board in all components of CRP.
    Next, I would like to discuss FSA's Emergency Conservation Program 
(ECP), which helps farmers and ranchers to repair conservation 
structures and damage to farmlands caused by natural disasters, and to 
help put in place methods for water conservation during severe drought. 
The ECP does this by giving ranchers and farmers funding and technical 
assistance to repair conservation structures and damaged farmland or to 
install methods for water conservation.
    In response to the 2021 drought, FSA expanded its policies to allow 
financial assistance to livestock producers for portable pumps used to 
temporarily pump water from available sources. This allowed producers 
to continue grazing activities when water sources were not safely 
accessible by the livestock. In Fiscal Year 2021, FSA allocated a total 
of $140.4 million in ECP funds to assist producers in response to 
weather-related disasters. I will note that unlike CRP, which receives 
mandatory funding through the farm bill, ECP is funded by Congress 
through discretionary and supplemental appropriations.
    FSA also administers the Emergency Forest Restoration Program. The 
EFRP helps the owners of non-industrial private forests restore forest 
health damaged by natural disasters. The EFRP does this by authorizing 
payments to owners of private forests to restore disaster-damaged 
forests. In Fiscal Year 2021, FSA allocated a total of $56.9 million in 
EFRP funds to assist producers in response to weather-related 
disasters. EFRP is also funded by Congress through supplemental and 
discretionary funding through the appropriations process.
    FSA's compliance with the National Environmental Policy Act (NEPA) 
ensures the agency diligently considers the effect of ECP's and EFRP's 
restoration activities on the environment. Following widespread damage 
occurring due to disasters, FSA has streamlined reviews to the maximum 
extent allowable by law for practices and restoration activities that 
will not result in ground disturbance, or ``above the plow-line.'' This 
creates efficiencies in the environmental compliance process for farm 
and forest land restoration and reduces the time necessary for FSA to 
approve applications for assistance.
Heirs' Property Relending Program
    In addition to programs authorized by Congress that are 
specifically targeted for conservation purposes, FSA is providing $67 
million to community-based lenders to make competitive loans through 
the new Heirs' Property Relending Program (HPRP). These loans aim to 
help agricultural producers and landowners resolve land ownership and 
succession issues among heirs to enhance their ability to participate 
in farm programs and the ag economy. Intermediary lenders--
cooperatives, credit unions, and nonprofit organizations--can apply for 
loans up to $5 million at 1% interest. The first application period 
closed on October 29, 2021. Selection of successful eligible 
intermediary lenders is expected to be announced in early 2022.
    Through participating community-based lenders, heirs can not only 
apply for loans, but can also receive critical assistance not typically 
offered through commercial lenders. Heirs' property issues have long 
been a barrier for many producers and landowners to access USDA 
programs and services, and this relending program provides access to 
capital to help producers find a resolution to these issues. Heirs may 
use the loans to resolve title issues by financing the purchase or 
consolidation of property interests and financing costs associated with 
a succession plan. This may also include costs and fees associated with 
buying out fractional interests of other heirs in jointly-owned 
property to clear the title, as well as closing costs, appraisals, 
title searches, surveys, preparing documents, mediation, and legal 
services.
    Our efforts to assist heirs in addressing unresolved title issues 
is vital in removing barriers to historically underserved populations 
in our farming and ranching community. This in turn makes the programs 
discussed earlier in my testimony, as well as the other standing and ad 
hoc Farm Programs, more accessible, bringing in more participants, and 
yielding more conservation practitioners across the country.
COVID-19 Challenges and Solutions
    As the FSA Administrator, I also want to take this opportunity to 
express my gratitude and admiration for the entire FSA workforce. These 
are challenging times, and since the pandemic gripped our nation nearly 
2 years ago, and the nearly 1 year since I came on board, the FSA 
workforce adapted and overcame many challenges. Not only did FSA 
administer all of our conventional farm programs and farm loan 
programs, but we also administered many new pandemic relief and 
disaster programs authorized by Congress that have provided billions of 
dollars in support to our farmers and ranchers.
    The work we do at FSA is vital, and with the support of our 
partners in the Farm Production and Conservation Business Center, we 
developed and executed a plan that allowed our Service Centers to be 
staffed safely and reliably during the height of the pandemic. To me, 
the safety and well-being of our employees, along with their families 
and communities, comes first. So when localized COVID numbers require 
it, we reduce our in-office workforce, while continuing to ensure all 
of the needs of our producers are met through innovative solutions, 
including telework and new technology. I am proud of the FSA workforce, 
and of what they have accomplished at home, at the office, and in the 
fields of agriculture.
    Conservation is an integral part of the work we do at FSA. We want 
to weave the tools and practices of conservation into the DNA of all of 
our programs so that producers, communities, and our natural resources 
continue to thrive. Congress is a vital partner in this effort. We 
value the tools and authorities this Subcommittee provides, and in the 
coming months I look forward to not only reviewing our conservation 
programs as they are currently administered, but also working together 
to shape them into the future, as we look forward to the next farm 
bill. Thank you.

    The Chair. Mr. Ducheneaux, thank you for your testimony, 
and certainly, thank you for putting in perspective the 
tremendous work of the employees of the FSA, particularly given 
the unique challenges we have faced over the past year and a 
half, 2 years with the pandemic.
    Mr. Cosby, please begin your testimony when you are ready.

STATEMENT OF TERRY COSBY, CHIEF, NATURAL RESOURCES CONSERVATION 
                  SERVICE, U.S. DEPARTMENT OF 
                 AGRICULTURE, WASHINGTON, D.C.

    Mr. Cosby. Chair Spanberger, Ranking Member LaMalfa, and 
also Representative Thompson and Members of the Subcommittee, 
thank you for the opportunity to appear before you today to 
provide an update on the USDA's Natural Resources Conservation 
Service farm bill programs. My name is Terry Cosby, and I am 
honored to serve as the 17th Chief of NRCS. I have been with 
the agency for more than 40 years, beginning my career as an 
NRCS intern in Iowa in 1979. I appreciate the ongoing support 
this Subcommittee has provided for voluntary private lands 
conservation, and I look forward to the conversation today.
    The last 2 years of the COVID-19 pandemic has been 
extremely challenging, with unprecedented pressures on our 
staff and customers, directly influencing the way we operate at 
the field level. Our staff and agriculture producers have also 
faced devastating extreme weather events, including tornadoes, 
droughts, wildfires, and flooding.
    In the face of these challenges, NRCS staff continues to 
successfully implement conservation programs, as well as 
offering innovative improvements that respond to the needs and 
challenges of our customers across the country.
    As we will discuss today, addressing the climate crisis and 
advancing equity are core components of our work. I would note 
a few highlights from the past year that illustrates the impact 
of our conservation programs.
    Our two core working lands conservation programs are the 
Environmental Quality Incentive Program, EQIP, and the 
Conservation Stewardship Program, CSP. In Fiscal Year 2021, we 
enrolled 34,054 EQIP contracts, totaling nearly $1.26 billion. 
We also enrolled 4,495 CSP contracts on 5.8 million acres, and 
2,709 CSP renewals on 3.8 million acres.
    Our easement program, the Agricultural Conservation 
Easement Program, ACEP, supports landowners in protecting, 
restoring, and enhancing wetlands and working farms and 
ranches. During Fiscal Year 2021, we enrolled nearly 200,000 
acres in ACEP.
    I also highlight the Regional Conservation Partnership 
Program, which leverages partner investments to deliver 
conservation solutions. In Fiscal Year 2021, NRCS announced 
$330 million for 85 RCPP Classic projects and $75 million for 
15 alternative funding awards. We also work with partners 
through the Conservation Innovative Grant Program, which 
supports the adoption and evaluation of innovative conservation 
approaches.
    Administrator Ducheneaux will discuss FSA conservation 
programs, but I will note that NRCS provides the conservation 
planning and the technical assistance. In Fiscal Year 2021, 
NRCS provided conservation planning and technical assistance on 
4.8 million acres for a total of 58,800 RCPP contracts.
    As we deliver on our conservation programs, we are 
expanding and furthering targeting our investments for climate-
smart agriculture and forestry. This includes announcements 
within EQIP, CSP, and RCPP, as well as an updated list of 
climate-smart conservation activities. That being said, our 
programs remain oversubscribed with demand for climate-smart 
practices and programs well exceeding available funding. The 
Build Back Better Act will make an historic investment in our 
voluntary conservation programs that support farmers, ranchers, 
and forestland owners in addressing the climate crisis.
    Additional investment will target the most effective 
conservation activities to address the climate crisis, and NRCS 
is well positioned to quickly deliver these programs to 
producers across the country. As we expand our investment in 
climate-smart agriculture, we recognize the importance of 
quantifying conservation outcomes, which include carbon 
sequestration and greenhouse gas reductions. This work will 
contribute to solar monitoring efforts across the department.
    Implementation of our conservation programs in need of 
important updates is, of course, dependent on our staff and 
capacity across the country. In Fiscal Year 2021, we used 
direct hire authorities to bring on 1,141 new employees, and an 
aggressive hiring strategy will continue to support our overall 
staffing goals, as we implement our key priorities. Currently, 
we have 10,361 staff directly employed by the agency, and 2,465 
staff employed through partners.
    Across program implementation, as well as hiring, the value 
of equity and inclusion are valuable components of our work. We 
recently announced $50 million in cooperative agreements to 
expand access to conservation assistance. These agreements will 
expand the delivery of conservation assistance to farmers, who 
are new to farming, low-income, socially disadvantaged, or 
military veterans. Expanding access to programs and services 
also included ensuring support is available for urban 
producers. NRCS houses the Offices of Urban Agriculture and 
Innovative Production, which was established by the 2018 Farm 
Bill. While the office is located within NRCS, it is 
coordinated as a department-wide effort to leverage tools and 
services that support urban agriculture. To date, approximately 
$11 million in grants and cooperative agreements have been 
awarded for projects that support food access, community 
gardens, urban farms, and food waste reduction.
    In conclusion, thank you for the opportunity to come before 
this Subcommittee to provide an update on NRCS farm bill 
programs. I appreciate Congress' commitment and continued 
support for NRCS and voluntary conservation on working lands.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Cosby follows:]

      Prepared Statement of Terry Cosby, Chief, Natural Resources 
 Conservation Service, U.S. Department of Agriculture, Washington, D.C.
    Chair Spanberger, Ranking Member LaMalfa, and Members of the 
Subcommittee, thank you for the opportunity to appear before you today 
to provide an update on USDA Natural Resources Conservation Service's 
(NRCS) farm bill conservation programs. I appreciate the ongoing 
support and leadership this Subcommittee has provided for voluntary, 
private lands conservation and the improvement of our soil, water, air, 
and other natural resources as authorized under the 2018 Farm Bill and 
under our other authorities. The last 2 years of the pandemic have been 
extremely challenging with unprecedented pressures on our staff and 
customers, directly influencing the way we operate at the field level. 
At the same time, our staff and agricultural producers across the 
country have needed to respond to devastating extreme weather events, 
including tornados, drought, wildfires, and flooding. Producers are on 
the frontlines of the climate crisis, and we know that our farm bill 
programs and the technical assistance that our staff provides can play 
a critical role in supporting farmers and ranchers in their efforts to 
not only build more resilient operations but also to sequester carbon 
and reduce greenhouse gas emissions. In the face of these challenges, 
the entire NRCS team, from field staff to our National leadership team, 
has demonstrated innovation and dedication to ensure conservation 
services are delivered to our customers. Our team has continued to 
provide financial and technical assistance, working closely with our 
partners across the country to get conservation on the ground and 
implement innovative solutions to address natural resource concerns. As 
we will discuss today, addressing the climate crisis and advancing 
equity are both core components of how NRCS is delivering conservation 
assistance and serving our customers.
COVID Challenges and Solutions
    COVID-19 continues to have an impact on our operations, as we work 
to prioritize the safety of our staff and customers. We make changes to 
field office staffing levels based on local COVID-19 caseload numbers, 
which are monitored daily, and we are working closely with our pandemic 
coordinator to follow Centers for Disease Control and Prevention 
guidance and adjust Service Center staffing levels when a county is 
above our safety threshold of ten cases per 10,000 residents per day.
    Our operations at USDA Service Centers must be conducted in a safe 
manner, and therefore we focus heavily on protecting both employees and 
customers through proper physical distancing, mask wearing, and 
cleaning. Critically important is the fact that we have not stopped 
providing services to our producers--we have continued to serve 
producers, through phone, email, and online tools, such as Teams, Box 
and OneSpan to enable collaboration and sharing/signing of documents. 
We value highly the in-person work that we do with our customers, and 
we look forward to when we can resume at 100% capacity. In the 
meantime, our staff continue to step up to the challenge to ensure we 
can rely on a combination of in-person support and virtual engagements 
to meet our customers' needs.
Farm Bill Program Implementation
    In the face of pandemic challenges, NRCS staff continue to 
successfully implement the programs and authorities provided under the 
2018 Farm Bill, as well as offer innovative administrative improvements 
that respond to the needs and challenges of our customers across the 
country. Program delivery in 2021 demonstrates the continued delivery 
of our core farm bill conservation programs:

   Environmental Quality Incentives Program (EQIP): In Fiscal 
        Year (FY) 2021, we enrolled 34,054 EQIP contracts, providing 
        nearly $1.26 billion on 343 million acres. Additionally, 
        through newly offered EQIP Conservation Incentive Contracts 
        option, piloted in FY 2021 in four states, we enrolled 528 
        contracts providing $48 million in conservation assistance.

   Conservation Stewardship Program (CSP): In FY 2021, through 
        CSP Classic, we enrolled 4,495 CSP contracts providing over 
        $311 million on 5.8 million acres. Additionally, we renewed 
        2,709 CSP contracts on 3.8 million acres. Also under CSP, in FY 
        2021, we enrolled 1,428 contracts on 104,140 acres in the CSP 
        Grassland Conservation Initiative.

   Regional Conservation Partnership Program (RCPP): In FY 
        2021, NRCS announced new partnership projects under the RCPP 
        Classic and Alternative Funding Arrangement (AFA) components. 
        This included $330 million for 85 RCPP Classic awards, and $75 
        million for 15 AFA projects. There are currently 336 active 
        RCPP projects that have more than 2,000 partners delivering 
        conservation in all 50 states, Puerto Rico, and the U.S. Virgin 
        Islands.

   Agricultural Conservation Easement Program (ACEP): During FY 
        2021, $230,490,000 was obligated to enroll 361 new ACEP 
        easements totaling 197,734 acres that will help landowners 
        protect, restore, and enhance wetlands or protect working farms 
        and ranches. This includes $102,903,110 in Agricultural Land 
        Easements (ALE) and $127,586,890 in Wetlands Reserve Easements 
        (WRE). In FY 2021, we closed on 396 ACEP easements totaling 
        over 145,000 acres. Additionally, we invested $11 million in 
        five Wetland Reserve Enhancement Partnership projects to enable 
        conservation partners to assist NRCS with acquiring and 
        restoring private wetlands.

   Conservation Innovation Grants (CIG): In FY 2021, we awarded 
        $40 million to conservation partners for 37 new projects under 
        the CIG program. These projects support widespread adoption and 
        evaluation of innovative conservation approaches in partnership 
        with producers. The Soil Health Demonstration Trial component 
        of CIG focuses exclusively on conservation practices 
        implementation and systems that improve soil health.

   Conservation Reserve Program (CRP): In FY 2021, NRCS 
        provided conservation planning and technical assistance on 
        approximately 4.8 million acres for a total of 58,800 new CRP 
        contracts across the nation. Technical assistance includes, but 
        is not limited to, field visits to verify practice eligibility 
        on the landscape, conservation planning, CRP practice survey 
        and design, practice installation, operation and maintenance of 
        practices and practice management. NRCS provides technical 
        assistance for emergency use of CRP acres, such as haying and 
        grazing. NRCS is also working with the Farm Service Agency and 
        selected partners to support CRP Monitoring, Assessment and 
        Evaluation projects.

   Conservation Compliance: In FY 2021, NRCS completed over 
        39,000 highly erodible land determinations and over 21,000 
        certified wetland determinations. NRCS also completed 
        approximately 22,000 compliance status reviews in 2021.

In addition to these overall program enrollments and project awards 
from the past year, we have made several recent announcements regarding 
improvements to our existing conservation programs, and there are 
several further opportunities that we plan to roll out in FY 2022:
Funding Allocations and Opportunities
    We made several improvements to ensure the timely allocation of 
farm bill funds to the states and to provide added transparency 
regarding the sign-up and enrollment process. States received FY 2022 
advisory allocations on October 1st, well before what has been provided 
in years past. This ensured states have the time they need to set sign-
up dates and work with their customers on accessing the financial or 
technical assistance that is right for them. Additionally, in order to 
provide added transparency for producers and partners across the 
country, we launched a new webpage that houses all of the program sign-
up dates. While producers can apply year-round for NRCS conservation 
programs, the new Program Application Ranking Dates webpage allows 
partners and producers to stay up-to-date on timelines relevant for 
their state or region, all the while maintaining the locally-led 
conservation process.
Targeted Climate EQIP Investments
    USDA is engaged in a whole-of-government effort to combat the 
climate crisis, and over the past year NRCS has announced several 
targeted initiatives through EQIP to advance this priority. These 
opportunities include targeted EQIP funds for climate-smart practices 
in FY 2021, an 11 state EQIP cover crop pilot in FY 2022, and 
deployment of a nationwide EQIP Conservation Incentive Contracts 
program in FY 2022. The cover crop pilot, the sign up for which is 
still ongoing, will provide nearly $40 million in funding for targeted 
cover crop adoption, in addition to funding available through our other 
conservation programs, enabling states to offer a streamlined 
enrollment process and bring new producers in the door. These targeted 
efforts enable us to deploy streamlined implementation approaches and 
address high priority resource concerns and climate-smart agriculture 
and forestry objectives. We will continue to build on this commitment 
within EQIP and across all of our programs and services.
Response to High Material Costs
    Based on feedback from producers and our staff across the country, 
we were able to adjust payment rates for higher costs for certain 
materials since the prices for materials such as lumber, steel, PVC, 
and concrete have increased dramatically as a result of supply chain 
disruptions. These Coronavirus Agricultural Relief Payments (CARPs) 
were made available for participants with EQIP contracts who had 
implemented practices affected by these higher materials prices. In 
particular, we conducted an economic analysis and identified those 
practices most likely to be affected by these price increases. This 
increased financial assistance was made available for practices 
completed in calendar year 2021, and we have extended CARP availability 
for practices completed by March 31, 2022, recognizing continued supply 
chain disruptions.
New CSP Flexibilities to Support Streamlined Renewals
    We also looked to improve access to CSP, based on feedback from 
producers and field staff. To support continued conservation efforts, 
we waived the CSP provision that had previously imposed a 2 year 
ineligibility for participants to reapply, following an unsuccessful 
renewal application. States are currently unable to fund all of the 
renewal requests that they receive given a limited availability of 
funds. Producers who are unable to renew at the end of their initial 
contract period, due to the limited availability of funds but no fault 
of their own, are now able to immediately reapply, rather than waiting 
a 2 year ineligibility period. The CSP regulation provides the Chief 
with the flexibility to waive this provision, and so we made the change 
to respond to the feedback from states and from producers across the 
country. This streamlines our conservation delivery process and also 
supports producers who wish to continue to build upon their existing 
conservation efforts.
Conservation Practice Standard Updates
    We continue to update our conservation practice standards to 
reflect the latest science to protect and enhance resource concerns. 
Since January 2021, we released 28 conservation practice standard 
updates; 12 standards were updated and are being prepared for release; 
24 standards have been reviewed and are ready for public review with a 
Federal Register posting; and seven are still under internal review. As 
part of the continued review of the development and implementation of 
our conservation practice standards, we are working to modify standards 
and data collection to capture climate-smart agriculture and forestry 
benefits.
Regional Conservation Partnership Program (RCPP) FY 2022 Funding 
        Opportunities
    In mid-January we released the National Funding Opportunities 
(NFOs) for RCPP Classic and RCPP Alternative Funding Arrangements for 
FY 2022. These NFOs reflected feedback from partners as well as State 
Conservationists to improve flexibility and accessibility of the 
program. We also released the two NFOs simultaneously to ensure that 
partners were able to assess the RCPP option best suited for their 
potential project. We will continue to improve implementation, 
including updates to the online portal and working to streamline 
reporting requirements.
Joint Chiefs' Landscape Restoration Partnership
    In another demonstration of critical partnership across the 
Department and with communities across the country, NRCS and the Forest 
Service recently announced the investment of more than $48 million 
through the Joint Chiefs' Landscape Restoration Partnership. These 
projects mitigate wildfire risk, improve water quality, and restore 
healthy forest ecosystems on public and private lands. Last month 
funding was announced for 41 projects, including $15.3 million for 17 
new projects and $33 million to complete work on 24 projects previously 
selected in 2020 and 2021. Through the Joint Chiefs projects, the 
Forest Service and NRCS are working hand-in-hand with agricultural 
producers, forest landowners, and National Forest System lands to 
improve forest health using available farm bill conservation programs 
and other authorities. We're thankful to Congress for formally 
authorizing the Joint Chiefs program in the Bipartisan Infrastructure 
Law, ensuring its longevity into the future.
Evaluating Conservation Outcomes
    We have made significant progress developing the tools and 
processes to measure and evaluate conservation outcomes associated with 
farm bill program implementation. This is especially important as it 
relates to soil carbon sequestration and greenhouse gas emissions 
reduction. We are moving forward with a new Conservation Evaluation and 
Monitoring Activities (CEMA) Program for Soil Carbon Stock Monitoring, 
allowing this measurement activity to be fully implemented within our 
planning process. The CEMA-Soil Carbon Stock Monitoring will collect 
empirical data using standardized protocols and will filter into a 
broader soil health monitoring effort, coordinated across USDA. 
Empirical data will increase science-based planning by helping 
calibrate estimated site conditions across the country when using 
COMET-Planner as part of the NRCS planning process. Further, NRCS 
quantifies the ongoing benefits of Nitrogen Management, Livestock and 
Manure Management, Rice Water Management, and many other voluntary 
conservation practices. NRCS scientists quantify the annual climate 
benefits of conservation practice delivery, working to integrate these 
quantified benefits into USDA reporting and the National Inventory of 
Greenhouse Gas Emissions and Sinks.
Staffing Updates
    Expanding our staffing capacity remains a top priority as we work 
to support the delivery of conservation assistance through our farm 
bill conservation programs. In FY 2021 we used Direct Hire Authority 
(DHA) to bring on 1,141 new employees and have made significant 
progress in on-boarding these positions. Throughout this process we are 
implementing a hiring strategy to continue to improve the diversity of 
employees within the agency, with nearly half of the positions filled 
contributing to improving our overall diversity, while maintaining our 
level of scientific excellence. This hiring effort included increasing 
American Indian/Alaska Native females by 5%, Black or African American 
females by 12.5%, and Hispanic or Latino females by 5%. We are again 
pursuing DHA for FY 2022 and FY 2023, which will continue to support 
our overarching staffing goals as well as implementation of key 
priorities and initiatives. We are working closely with our states to 
identify the positions that are most critical for DHA and moving 
forward with robust training for both staff and partners. Currently we 
are at 10,361 staff directly employed by the Agency and 2,465 staff 
employed through partners to support the implementation of our 
conservation work.
Equity and Outreach
    The values of equity and inclusion continue to be vital components 
in all we do in providing conservation assistance at NRCS. We are 
working to ensure that the programs we support and the investments we 
make are available to everyone, including producers and communities 
that have previously been unable to access assistance and faced 
discrimination. We have taken several recent steps to expand our 
capacity to do this work--through partnerships, staffing, and program 
improvements. First, on January 10th we announced awarding $50 million 
in conservation cooperative agreements to expand access to conservation 
assistance among underserved producers to increase the adoption of 
climate-smart agriculture and forestry practices, address local natural 
resource concerns, and build and strengthen local food systems. These 
118 Equity Conservation Cooperative Agreements will fund 2 year 
projects to expand the delivery of conservation assistance to farmers 
who are new to farming, low income, socially disadvantaged or military 
veterans. These agreements will support USDA's broader effort to 
address climate change and equitable access to programs. Additionally, 
I have directed all of our states to ensure that they have an Outreach 
Coordinator position in place. These positions will play a critical 
role in coordinating and supporting the dissemination of our equity and 
outreach strategy in the field. We are also working across the 
Department to advance Justice40--a whole-of-government approach to 
ensure 40 percent of the overall benefits of certain Federal 
investments support disadvantaged communities. Part of this work is 
closely evaluating and improving our farm bill conservation programs to 
address barriers to access for historically underserved producers.
Urban Agriculture
    As we work to expand access to NRCS programs and services, that 
effort includes ensuring support is available for producers in urban 
areas as well. NRCS houses the Office of Urban Agriculture and 
Innovative Production (OUAIP), which was established through the 2018 
Farm Bill. While the office is located within NRCS, it is coordinated 
as a Department-wide effort to leverage tools and services that support 
agriculture in urban communities. The office received $5 million in 
funding in the FY 2020 Further Consolidated Appropriations Act and $7 
million in the FY 2021 Omnibus and COVID Relief and Response Act. The 
President's FY 2022 Budget Request includes $9.5 million for OUAIP and 
$1.6 million for the Farm Service Agency to administer an Urban 
Agriculture County Committees Pilot. To date, approximately $11 million 
in grants and cooperative agreements have been awarded through the 
OUAIP to strengthen existing programs and create new projects in the 
focus areas of food access, community gardens, urban farms and 
controlled environmental agriculture, and food waste reduction. NRCS 
will continue to work with our partner agencies across the Department 
as well as staff and partners across the country to further invest in 
urban agriculture.
Build Back Better
    As illustrated through these updates, the Agency continues to 
utilize our existing programs and funding to ensure that farmers across 
the country have the tools they need to respond to the climate crisis. 
That being said, our programs remain oversubscribed, with demand for 
climate-smart agriculture practices and programs well exceeding 
available funding. The Build Back Better Act would make a historic 
investment in our voluntary conservation programs that support farmers, 
ranchers, and forestland owners to continue leading the way in 
addressing the climate crisis. Farmers have long demonstrated 
leadership in environmental stewardship with strategies that provide 
benefits for the farm, the environment, and the public. The critical 
investments proposed in the bill would help meet the demand from the 
farming community for conservation support and enable producers to 
realize the full potential of climate benefits from agriculture. The 
additional investments in EQIP, CSP, RCPP, ACEP, Conservation Technical 
Assistance (CTA), and measurement and evaluation would target 
investments to the most effective conservation activities to address 
the climate crisis, and NRCS is well positioned to quickly deliver 
these programs to producers across the country, including outreach to 
historically underserved producers and those who have previously been 
unable to access our programs and support. We look forward to working 
with Congress as the work on Build Back Better legislation continues.
Disaster Relief and Prevention
    Finally, NRCS continues to play an important role in responding to 
emergencies, including wildfires, hurricane, tornadoes, flooding, and 
other disasters. In FY 2021, we entered into 170 agreements with local 
sponsors to implement Emergency Watershed Protection (EWP) measures, 
and $237 million of EWP funds were obligated. Responses to 63 watershed 
emergencies were initiated in FY 2021, including: Hurricanes Zeta, 
Elsa, and Ida; western wildfires in Arizona, Utah, and California; and 
major winter and spring flooding events across the Southeast. NRCS also 
plays an important role in disaster prevention. In FY 2021, we 
obligated $166M in Watershed Protection and Flood Prevention Operations 
(WFPO) Program funding to 65 projects in 23 states to address new and 
backlog projects that help restore and protect watersheds. NRCS also 
allocated $31.5M in Watershed Rehab funding to help local sponsors in 
the assessment, planning, design, and construction of 152 projects (42 
assessments; 56 planning; 20 designs; and 34 construction) in 22 
states. Recognizing the significant role that these programs play in 
preventing disasters, I appreciate the further investment that Congress 
made through the Infrastructure Investments Jobs Act (IIJA) for our 
watershed programs. These additional investments, on top of the 
mandatory and discretionary funds previously provided, will deliver 
much needed assistance for communities across the country. We are 
working with our states and local sponsors to identify project 
requests, ensuring targeting assistance for underserved communities and 
climate related disasters.
    I appreciate the opportunity to come before the Subcommittee today 
to provide an update on NRCS's farm bill conservation programs. We have 
made significant progress implementing and improving these programs 
under the authorities provided to USDA. NRCS will continue to utilize 
these programs to protect and enhance natural resources, support 
producers across the country, and advance key priorities related to 
climate change and equity. We know that farmers, ranchers, foresters, 
and landowners are on the frontlines of the climate crisis and NRCS 
stands ready to continue to support the implementation of conservation 
solutions that respond to the severity of the crisis. As we continue to 
build on current investments, I also look forward to working with 
Congress to continue to advance these shared priorities and will 
continue to work with you as you begin the process of crafting the 2023 
Farm Bill. I appreciate Congress's continued support for NRCS and our 
work to invest in voluntary conservation on working lands. Thank you 
for the opportunity to submit written testimony.

    The Chair. Thank you both for your testimony today.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. You will be recognized for 5 minutes each in order to 
get in as many questions as possible. Please keep your 
microphones muted until you are recognized in order to minimize 
background noise.
    I will begin by recognizing myself for 5 minutes.
    Chief Cosby, I would like to ask you a question about the 
Regional Conservation Partnership Program, RCPP. It has brought 
diverse groups together to address natural resource concerns in 
a really focused manner that leverages USDA investment with 
private-sector dollars, and this program has worked very well 
since it was first authorized with the 2014 Farm Bill.
    However, recently partners have expressed concerns about 
some of the bureaucratic hurdles and challenges. Have you heard 
about any of these concerns, and are you taking any steps to 
address them?
    Mr. Cosby. Chair Spanberger, thank you for the question.
    I have had an opportunity to work with this program, since 
it came in, in 2014, as a State Conservationist, and bringing 
partners together to leverage the Federal investment. It has 
worked really well. It is a great program. It continues to 
flourish.
    We have heard concerns, and I will tell you that we are 
addressing those. We need our partners to really continue to 
bring those forward to us, as we talk about this. We recently 
announced RCPP and the new investment that we are going to 
make, and we think we have streamlined the process. We are 
working to train our field staff on how to deliver it more 
effectively and efficiently, and so we have heard those 
concerns, and we are addressing those.
    The Chair. Thank you, Chief Cosby. That certainly is music 
to my ears, and I would love to follow up and determine if 
there is any way that we can ensure that any challenges that 
might be brought to our Congressional offices are something 
that we can relay as you continue to make those improvements.
    Moving on with my questions. On January 10, 2022, USDA 
announced the use of EQIP and CSP to promote select climate 
change-related goals, including a partnership with the Farmers 
for Soil Health Initiative, and targeted EQIP funding for cover 
crop adoption. How are these changes to farm bill programs 
expected to increase adoption of climate-smart practices?
    Mr. Cosby. These types of partnerships are really 
important, because it gives us an opportunity to work with the 
folks, the boots on the ground. My staff, along with farmers 
that belong to a lot of these organizations we are working 
alongside of, provide some great opportunities for us to hear 
exactly what is happening on the landscape, and also partner 
with some organizations to get more conservation on the ground.
    This is really important. We know that we can't do it all 
on our own and by ourselves, and so, the more partnerships that 
we have and the more investments from private organizations, I 
think we have a better chance of looking at how do we help with 
climate, drought, and all of the things that happen when we 
have this adverse weather going on around the country.
    The Chair. So, one more question to follow up on that.
    Last month, Secretary Vilsack identified several climate 
change-related achievements by NRCS and other agencies, 
including the investment of $10 million to support climate-
smart agriculture and forestry through voluntary conservation 
in EQIP, and funding for EQIP was authorized at $1.8 billion in 
Fiscal Year 2021. Does NRCS plan to increase the amount of 
funding for EQIP directed to climate-smart agricultural 
practices, looking at Fiscal Year 2022? If so, by how much and 
frankly, how does that funding level for Fiscal Year 2021 
compare with other USDA announcements citing EQIP or other 
voluntary practices?
    Mr. Cosby. Well, not only EQIP. We are looking at how do we 
incorporate climate-smart solutions into all the programs that 
we administer through NRCS, and we are working very closely 
with our State Conservationists out across the country as we, 
for the first time ever, that I can remember, we gave states 
their budget in October. It gives them 12 months to plan, and 
also, it helps us to look at what are the resource concerns, 
what are the things that we really need to be keen on, and EQIP 
is that program that we need to really work through. It gives 
our folks an opportunity to work with the state technical 
committees out there across the country to set those priorities 
when we look at those resource concerns. And so, EQIP is an 
opportunity for us to keep adjusting and look at how efficient 
it is, and how effective it is.
    And also, when we talk about the climate crisis that we are 
having, EQIP is one of those solutions that we have.
    The Chair. Administrator Ducheneaux, I am short on time, 
but looking at how the 2018 Farm Bill reauthorized and amended 
CRP, what challenges has your agency had in enrolling acres in 
CRP, and how could that program be amended to address those 
challenges?
    Mr. Ducheneaux. As far as amending, ma'am, whatever 
Congress decides to do, we will work our best to implement it. 
But we have made some changes to soil rental rates that have 
really helped drive enrollment up. We made an increase in the 
grassland CRP, which significantly drove interest up.
    And it is important to remember that every additional acre 
we enroll in CRP is another choice that a producer has to be an 
economic player in the global climate change mitigation effort.
    The Chair. Thank you, and there is certainly financial 
impact for them.
    Thank you very much to our witnesses, and I now recognize 
Ranking Member Thompson for 5 minutes.
    Mr. Thompson. Well, thank you, Madam Chair. Gentlemen, 
Administrator, Chief, thank you both once again for being here.
    In the stalled Build Back Better Act, there is $28 billion 
in funding for climate practices. That money is almost equal to 
a doubling of funding for the current farm bill conservation 
programs. A significant portion of the funding is backloaded in 
the last 2 years of the bill. For example, the Regional 
Conservation Partnership Program, RCPP, receives over $3 
billion in Fiscal Year 2026, ten times the amount of funding it 
receives in the farm bill.
    Chief Cosby, did the House or Senate, I mean, this was 
really done with little to no transparency. I would border on 
no transparency, as it through this legislative process and 
House. Did the House or Senate Democrats consult with the 
Department on this funding?
    Mr. Cosby. Sir, what I would say to that is that we work 
very closely with all the Members, and we have a very capable 
staff out there. Whatever the dollar amount that Congress 
appropriates to these, we will be able to implement.
    Mr. Thompson. Well, that will----
    Mr. Cosby. We will be very happy.
    Mr. Thompson. And we will get to that part. That is my next 
question, so thanks for anticipating it.
    But this is about direct consultation. Did the House, I can 
tell you, the House Republicans were not consulted, and as 
Ranking Member, we were not consulted. So, was there direct 
consultation by the Department with House Democrats, well, 
let's just start with that, I guess.
    Mr. Cosby. The way I would answer that is we provide 
technical assistance when asked by Members of Congress, and I 
am sure that there were some conversations that were had.
    But we provide technical assistance when we are asked.
    Mr. Thompson. So, you are not sure?
    Mr. Cosby. I am not sure of that.
    Mr. Thompson. Not sure.
    Mr. Cosby. But I can take that question back and get you 
the answer.
    [The information referred is located on p. 43.]
    Mr. Thompson. I appreciate that. That would be great.
    Do you believe that the department has the ability, and 
this was kind of what you were getting to, to get that money 
out the door, and if so, what would that plan look like?
    Mr. Cosby. Sir, we have an aggressive hiring strategy. We 
had direct hiring authority last year. We were able to bring on 
a lot of employees. We also have a lot of partners across the 
country that really help us with this, and we do agreements and 
we have a lot of boots on the ground to help do this work.
    We believe, no matter what Congress appropriates, we can 
deliver, and we have the right skill sets, we have the right 
men and women across the country just to do that.
    Mr. Thompson. Well, trust me. I am obviously a big fan of 
USDA. We talked about that before we started, and I appreciate 
your leadership, and I appreciate the men and women who work at 
USDA. But what would you have me say to the farmers as I 
interact with them, whether it is here in Washington or 
crisscrossing the country as I have done and continue to do, 
because I want them to bring their voices to the 2023 Farm Bill 
process. How would you have me respond when they express their 
concerns with this, because they have concerns with just the 
current programs we have, getting that money out the door? And 
we are talking about, as I was referencing, an incredible 
increasing amount of funds, and we have frustrations now with 
the current programs. What should I tell them when I hear that, 
because I expect that is going to continue to be a common 
theme?
    Mr. Cosby. What I would say is my agency, NRCS and also 
FSA, we are a trusted partner with the American producers 
across the country, and we deliver. And no matter what the 
program is, we have seen no letdown from anything. Our staff is 
able to deliver. As I described earlier, most of our programs 
are oversubscribed, so any dollars that are invested in 
conservation is going to be a great day, and our staff is there 
ready to deliver that. So, we are a trusted partner with the 
voluntary land users out there that do voluntary conservation.
    Mr. Thompson. Yes, and I would agree with that, but there 
are serious concerns especially with the amount of money that 
the $28 billion exponentially increased without really any farm 
bill hearings.
    Well, many of the private companies have made major climate 
commitments. They oftentimes are struggling to find ways to 
achieve their goals, despite having significant financial 
resources. Simultaneously, the USDA conservation programs are 
oversubscribed, and agricultural producers have difficulty 
accessing these vital programs. And for this reason, I 
introduced the SUSTAINS Act (H.R. 2606, Sponsoring USDA 
Sustainability Targets in Agriculture to Incentivize Natural 
Solutions Act of 2021), which would allow USDA to accept and 
match donated private funds to stretch the Federal dollar. The 
idea is that third parties could directly partner with USDA to 
fund conservation programs, which we know are tremendously 
effective in dealing with climate, climate change. And that 
investment through the existing programs--do you support this 
legislation or do you support that concept of a public-private 
approach where we are able to create something that the 
private-sector would be able to support USDA and the work that 
you do with conservation programs?
    Mr. Cosby. Many of our programs support private and public 
partnerships, and so we are working through a lot of those like 
RCPP, and it is working. And so, we support that through the 
conservation programs that we have right now. I have not had an 
opportunity to study at length the bill that you are talking 
about, but I will do so, sir.
    Mr. Thompson. I appreciate it. Thank you.
    Thank you, Madam Chair.
    The Chair. Absolutely. The chair now recognizes 
Congresswoman Pingree from Maine for 5 minutes.
    Ms. Pingree. Thank you very much, Madam Chair. Thank you 
for having this hearing, and thank you to both of our 
witnesses. I really appreciate the work that you are doing, and 
I am grateful to have you here with us today.
    I wanted to talk first to Mr. Cosby, Chief Cosby. Thank you 
for being with us today. I want to talk first a little bit 
about CSP, and frankly, the important role it can play as a 
climate solution. It is the Conservation Stewardship Program, 
such a valuable tool.
    Now, the Ranking Member just brought up this issue about 
the funding in the Build Back Better Act, and the increase in 
funding, but sort of contrary to what he was saying, I found in 
Maine we have only been able to fund about \1/4\ of the 
applications. So, the added resources in the Build Back Better 
Act would be extremely important to my state, and I am sure 
that is true in Pennsylvania as well, that there is not 
sufficient funding. So, I hope we are able to get increases in 
funding and make that money available to our farmers who are 
anxious to use this already.
    But could you talk to me a little bit more about how we use 
CSP as a tool in combating climate change, and why that is a 
particularly helpful program?
    Mr. Cosby. As a State Conservationist, I had an opportunity 
to administer CSP and now as Chief, and it is the biggest 
working lands conservation program that we have, and it is very 
successful. And you know, we have a lot of producers out there 
that transitioned from EQIP to CSP, which like I said, has been 
very successful.
    One of the things we have seen is that in the fifth year, 
producers have an opportunity to re-enroll, and there is 
something in that that was in our policy that said that if you 
didn't re-enroll in that fifth year, you had to sit out 2 years 
and wait. So, we were able to waive that and make sure that 
producers have an opportunity to re-enroll right after that 
fifth year.
    It is a very successful program. We have identified 81 
enhancements in the CSP that we think have the best chance to 
help us with the climate crisis, and we have also identified 
some practices also in our EQIP program. But we have identified 
81 enhancements that we know will help with soil sequestration 
and also greenhouse gas emissions.
    Ms. Pingree. That is great. Well, thank you. I really 
appreciate it: 81 is a big number. But, I know that is going to 
cover some of the things that I put in my bill, as you 
mentioned, soil health, carbon sequestration, a variety of 
other things.
    I want to take a different tact here, and again, thank you, 
Chief Cosby, for talking to me about this question. That is 
about PFAS. Maine has been a little bit ahead of the curve on 
testing for PFAS (perfluoroalkyl and polyfluoroalkyl 
substances) contamination, which means that we have identified, 
unfortunately, a handful of farms that are affected by these 
forever chemicals. But we know there are many more in Maine, as 
we increase our testing and we know it is not just a Maine 
problem. Last week, the State of Michigan issued a consumption 
advisory about beef from one farm that was found to have high 
levels of PFAS.
    I know that NRCS could assist farms if they make the 
difficult decision to dispose of contaminated animals, but I 
would like to hear more about what NRCS could be doing to 
support farmers in this devastating situation.
    Mr. Cosby. And thank you for the question, and yes, we have 
been working on this. We identified some areas where we can be 
helpful, as we are out on those farms and working with those 
landowners. We can talk about what are some of the things that 
can help mitigate PFAS, and get those herds back to producing 
the high quality of milk that is needed.
    Also on the disposal side, we are working very closely with 
our staff to identify how we can help with that. Now, our 
agency, while we may be able to provide some financial 
assistance to dispose of that herd, we have to make sure that 
we are following all state rules and regulations as far as 
disposing, where those animals can be buried. We do not make 
that decision on where those animals can be buried. So, we work 
with the state authorities to make sure that happens.
    But we are working to look at our standard inspection, how 
we can help those landowners make decisions on getting those 
herds healthy and then if they can't get them healthy, then we 
have an opportunity to help them if they have to dispose of the 
animals.
    Ms. Pingree. Well, thank you for that, and I know you share 
my concerns that farmers in this situation not only face the 
devastating possibility of losing their animals and the 
challenges that faces with herds that you been cultivating your 
whole life, and also the economic loss it can have. This is a 
devastating problem, and we have to support it much more.
    I just want to add one quick thing. In the 2018 Farm Bill, 
soil testing was added to the EQIP program, so I hope that NRCS 
could help defray some of the very significant costs of soil 
testing for PFAS that farmers in our state are currently taking 
on.
    I am out of time, but I can connect with you about that. 
But I do want to reiterate that soil testing is extremely 
important, and we need some assistance with that.
    So, I will yield back. Thank you, Madam Chair.
    The Chair. The chair now recognizes Mr. Allen from Georgia 
for 5 minutes.
    Mr. Allen. Thank you very much, Madam Chair, Administrator 
Ducheneaux, and Chief Cosby, thank you both for coming before 
this Committee today.
    This is an important hearing, and obviously to write a new 
farm bill, we need to know how the existing farm bill is doing, 
and what improvements we can make to it. I am very glad that 
this Committee is taking up these issues, and of course, we 
have talked primarily about climate change. And I got to be 
honest with you. When I am in my district, I don't hear anybody 
talking about climate change. I hear them talking about, like, 
the cost of gasoline and finding gasoline, and the cost of 
everything. Obviously, there is a war on fossil fuel. I don't 
know what that is doing to agriculture. Obviously, it is 
increasing the price of food at the grocery stores.
    There is also very much a concern about grocery store 
shelves being empty, and in fact, I got a question the other 
day about, ``Hey, are we looking at a major food shortage in 
this country?'' And so, obviously, we should have our eye on 
the ball here, but we may be so fixated on one issue that all 
of a sudden, we lose the whole intent of why we are here, and 
the reason for the farm bill is to ensure that we have an 
adequate food supply for this country, and that it be efficient 
and safe.
    Going to my first question is how much, you talk about what 
you are dealing with here. The Ranking Member talked about the 
Build Back Better and the money involved in that. We are 
talking legislation this week, $8 billion going to the U.N. for 
climate. What are we spending at USDA in dealing with climate, 
and how much is that raising the price of food? Have we looked 
at that at the grocery store? I mean, how much is that 
impacting the American people right now?
    Mr. Ducheneaux. Thank you, Congressman Allen. I will jump 
in there.
    We see our role at the Farm Service Agency and the USDA 
more broadly to provide support for producers to have economic 
opportunity, and to the extent that that means funding some of 
the initiatives that will benefit them in the long-term like 
promoting soil health, which also has the added benefit of 
sequestering carbon and improving our climate outcomes, that is 
going to improve production over the long haul, and it is going 
to help producers have more economic freedom in order to be 
partners in whatever initiatives the Federal Government decides 
to roll out.
    As to whether or not our efforts are directly impacting the 
price of inputs, I think there are other supply chain issues 
that are impacting that, and the work at the broader USDA is 
trying to address some of those challenges. At the----
    Mr. Allen. If I----
    Mr. Ducheneaux.--Farm Service Agency--I am sorry, sir. Go 
ahead.
    Mr. Allen. Well, what we need to do is we need to figure 
out one, all of a sudden in this new Administration it is all 
about climate, and we are seeing food prices skyrocket. And so, 
I just need to know what this is going to cost, and because the 
people out there are asking me, and they are saying what the 
heck is going on in this country? And so, it is a real problem.
    But I would like to specifically ask a question about the 
CRP program. Right now the biggest problem in that program is 
flexibility. Every request that my office has made, say, for 
example, if you want to exchange this property for another 
piece of property and stay in the program, it has been denied. 
There is absolutely no flexibility, and of course, as you know, 
things change, property values change and that sort of thing. 
And you are in this program 10 to 15 years, why don't we have 
flexibility in that program?
    Mr. Ducheneaux. Well, sir, I would offer that I haven't 
heard a producer ask me about exchanging properties. We will 
look into that. I know the Secretary has charged us with 
finding as much flexibility that we can within our existing 
authorities to benefit producers. So, I will definitely check 
on that.
    [The information referred to is located on p. 43.]
    Mr. Allen. Well, I have a constituent that has offered to 
put twice as much property in CRP, which obviously helps with 
carbon sequestration, which is obviously, trees need carbon to 
live, and in each case, they have taken it to the state board 
and they have denied their request.
    So, yes. If you could get with our office and let's address 
this problem and see if something can be done, that would be 
most appreciated.
    As far as the other thing that I was going to address is 
the Swine Eradication and Control Pilot Program, but I am out 
of time, and hopefully somebody else will ask about that.
    But thank you very much.
    The Chair. Thank you, Mr. Allen, and Mr. Ducheneaux, thank 
you for your questions. I think as follow up, the full 
Committee would be interested in follow up to Mr. Allen's 
question in the event that we may represent constituents with 
similar concerns.
    The chair now recognizes Ms. Kuster from New Hampshire for 
5 minutes.
    Ms. Kuster. Great. Thank you so much, Madam Chair, and I 
want to thank Chief Cosby and Administrator Ducheneaux for 
joining us today.
    This is an excellent opportunity to take stock of where we 
are with the conservation programs in the farm bill, and I was 
so pleased to hear President Biden and Secretary Vilsack talk 
this week about the potential for agriculture to be the first 
sector of the American economy to reach net-zero greenhouse gas 
emissions. I believe we can realize that goal by recognizing 
and supporting farmers and foresters for the climate-smart 
steps they are already taking, while also being proactive in 
setting long-term goals for emissions reduction in agriculture 
and incentivizing further progress toward these goals.
    To achieve net-zero agriculture emissions, the farm bill 
conservation programs run by NRCS and FSA are essential, and I 
want to thank the excellent staff on the ground in New 
Hampshire. Over 55,000 acres in the Granite State were enrolled 
in USDA conservation programs in 2020 alone, but there remains 
even more we can do. Just as Federal farm conservation efforts 
were born in the 1930s as response to the Dust Bowl and the 
Great Depression, we must continue to grow and enhance these 
programs in order to confront the greatest challenge facing our 
planet, and that is climate change, as we have heard in a 
bipartisan basis today.
    To do that, we must ensure these programs are as accessible 
as possible to small family-owned farms and forestlands, and 
that means reducing unnecessary or duplicative regulations and 
reporting requirements, while still maintaining integrity in 
the programs.
    In 2018, in advance of the last farm bill, I secured 
passage of bipartisan legislation to exempt farmers from the 
confusing SAM/DUNS registration process for NRCS. That process 
was mired with bureaucratic red tape and designed for billion-
dollar government contractors, not small family farmers who 
want to utilize conservation programs to improve the 
environmental integrity of their farms.
    Chief Cosby, as we approach the next farm bill, I am eager 
to continue efforts to streamline efforts to help small farmers 
and foresters, and as we look at what can be done 
legislatively, would you comment on anything you are already 
doing or considering within USDA to improve accessibility to 
NRCS programs?
    Mr. Cosby. Representative Kuster, thank you, and I want to 
let you know that I had an opportunity to work in your great 
State of New Hampshire back a few years ago, so thank you for 
the question.
    One of the things we are doing is that we talk about equity 
and everything that we do at NRCS and USDA, and also for 
administration, and equity is really important. I am a son of a 
farmer from Mississippi, and in the 1970s my dad had to give up 
farming operations because of being denied services that he 
needed to keep the operation flowing, and it was a sad day for 
my family to give up their farming operation. I will tell you 
that is something I get up every morning and I work hard on, 
not only conservation, but making sure that every person in 
this country that wants to benefit from USDA programs has that 
opportunity, and we are looking at what are the barriers that 
exist. We are getting rid of those, and my staff knows that 
this is something that we need to make sure is happening in 
every program that we administer, whether it is at NRCS, FSA. 
The Secretary has made it very clear, and also the President 
made it very clear that we want to make sure that folks have an 
opportunity, no matter where they live and no matter where they 
are, to participate in farm bill programs.
    Ms. Kuster. Great, thank you.
    Shifting gears a bit, I wanted to ask about the Clean 
Lakes, Estuaries, and Rivers, also known as CLEAR Program, 
within the Conservation Reserve Program. Conservation groups in 
my district have found CLEAR to be beneficial and hope to see 
the program expanded further, especially by making the CLEAR30 
Pilot Program permanent. Through this pilot contract supported 
by FSA, receive a water quality incentive and a climate-smart 
practice incentive.
    Administrator Ducheneaux, could you explain the success of 
the program and its current operations?
    Mr. Ducheneaux. Yes, ma'am, and thank you for the question, 
and thank you for the support of the CLEAR30 initiative.
    As you are aware, it was initially composed of a pilot 
program that was in the Great Lakes and Chesapeake Bay area, 
and we took steps in June to expand that because of the 
popularity of the program, and that lets folks take that 
expiring CRP land and do something meaningful for it for a 30 
year period. And I think that is a critical part of this, 
because it gives the producers some certainty on some of their 
acreage what assistance they are going to have, what income 
they are going to be able to generate while contributing to 
improving the waterways of the country.
    Ms. Kuster. Thank you, and with that, I will yield back.
    The Chair. Thank you very much.
    The chair now recognizes Mr. Johnson from South Dakota for 
5 minutes. Mr. Johnson?
    Mr. Johnson. Sorry. Thank you very much, Madam Chair. I 
appreciate it.
    I have some comments for Mr. Ducheneaux, and first off, I 
would say, sir, we are lucky to have you in your role because 
you really do understand grazing, coming from your part of the 
world. When I think about some of these working lands CRP 
programs, you are going to understand the importance of them 
better than just about anybody. And I should have started by 
thanking you all, because during the drought, the emergency 
haying and grazing is just so incredibly important, and your 
team has shown a lot of flexibility and I think a lot of 
understanding of how that can be a lifeline for people when 
times get tough.
    But I want to talk a little bit about kind of a failure to 
launch with some of these grasslands CRP. The program has not 
gone like we wanted it to after the last farm bill. So, 
initially, sir, just give me a sense of any suggestions you 
would have for how we can make that program more effective?
    Mr. Ducheneaux. Thank you, Congressman Johnson.
    We think we demonstrated great success with the changes we 
made to the CRP Grasslands Program this last year. We had 2 
million acres subscribe to that. A lot of those acres were in 
some areas of emphasis, including the Dust Bowl Country and the 
Elk Migratory Corridor in Wyoming and Montana. So, I think give 
us a little time to see how that plays out in future years. We 
have some ideas about how we get out to our underserved 
populations with that program. As you are aware, some of the 
territory in South Dakota is operated on by Indian Country, and 
they haven't really been partners in CRP before. CRP Grasslands 
is a great opportunity to get meaningful watershed level 
enrollment into the programs that can help benefit producers in 
some of the most economically distressed areas in the country.
    Mr. Johnson. And so, just give me an idea of what that 
outreach might look like.
    Mr. Ducheneaux. We are conducting outreach right now to 
talk about CREP, as an alternative to enroll in some of these. 
The flexibility that we have been offered in the Conservation 
Reserve Enhancement Program to work directly with Tribal 
Governments and state governments and other nongovernmental 
partners is going to be critical to building that public-
private partnership that can really help producers have 
something to plan on.
    Mr. Johnson. Sure, and let's talk a little bit more about 
working lands, because I do think some of the best stewardship, 
some of the best sustainability, some of the best habitat, I 
just think so many really good things can come from working 
lands.
    So, talk to me more about how your agency views working 
lands conservation.
    Mr. Ducheneaux. At the Farm Service Agency, we are really 
trying to message that all of this land is working lands 
conservation. Take, for instance, CRP. During the last drought 
disaster we had in South Dakota, a lot of that land was opened 
up for emergency hay and grazing to help capitalize on the 
reserve portion of the Conservation Reserve Program. Now, there 
were some challenges with the primary nesting season and the 
haying of the land, but what we really want to emphasize in 
coming years is that producers can stockpile some of that 
forage hayed after that primary nesting season. As my dad 
always told me, hay in the stack is like money in the bank, and 
if we can stockpile that through non-emergency use, or make 
better use of it through non-emergency use, our producers are 
going to be better positioned to use their other non-enrolled 
acreages during times of drought and other disaster.
    Mr. Johnson. So, Mr. Ducheneaux, I have some folks back 
home who talked to me about concerns that we may be headed 
toward what we saw maybe 10 years ago where there was a sense 
that some of the incentive payments and some of the land rates 
were really competing against young producers who were 
interested in getting into farming. Help me understand a little 
bit. Do you think that that is a legitimate concern? What 
should I tell those folks?
    Mr. Ducheneaux. Sir, I think there are some limits built 
into it. One of the major limiting factors in having this be 
real competition is that there is a 25 percent acreage limit on 
a county-by-county basis. So, that leaves 75 percent of the 
other land in that county to adjust to the market. But you 
won't find a bigger champion in the department for young and 
beginning farmers than myself. I still identify as one, even 
though when I walk up those stairs, I don't feel like one. So, 
we are really going to focus on how do we build those 
connections? We have the Transition Incentives Program within 
CRP that really never gained any traction, so we are looking at 
how we can improve that program to make that connection with 
that next generation, sir.
    Mr. Johnson. So, well said. Thanks for your service.
    Madam Chair, I yield back.
    Mr. Ducheneaux. Thank you, sir.
    The Chair. Thank you very much.
    The chair now recognizes Mr. O'Halleran from Arizona for 5 
minutes.
    Mr. O'Halleran. Thank you, Madam Chair, Ranking Member, and 
the panelists. I really appreciate your presentations.
    I am pleased we are conducting a review of the conservation 
programs. These programs are critical to rural Arizona and 
rural America, particularly programs that help protect and 
restore land and water. As wildfire season has become longer, 
wildfires have become more dangerous and unfortunately, more 
deadly. The Natural Resources Conservation Service plays an 
important role in replanting and improving the land following 
wildfire burn scars. In 2019, the Museum Fire forced 
neighborhoods to evacuate, and cost more than $9 million to 
control. It was only a little less than 2,000 acre fire. It has 
also left a burn scar in its wake. Now, several neighborhoods 
in Flagstaff face severe flooding. These are not neighborhoods 
that had been at risk for localized flooding before the fire, 
and it will be several years, it appears, before they are fully 
restored.
    Post-Museum Fire flooding highlights the need for NRCS to 
have the ability to work on Forest Service lands. These are 
improvements that are supported by local governments in my 
district with no other resources and expertise provided by NRCS 
will help reduce flooding, replant trees, and restore the burn 
scars. And Chief, I know that you are in the process of working 
on that right now, and I appreciate it very much.
    So, Chief, thank you for being here and for your testimony 
today. Can you discuss how NRCS resources are currently used to 
address fire burn scars in the aftermath of wildfire? I 
understand there are several examples, and are there potential 
ways to improve interagency collaboration with agencies like 
the Forest Service or BLM to better improve the resilience to 
wildfires?
    Mr. Cosby. Thank you for the question, sir. A mixture of 
the land across this country is in private ownership, and we 
know that when there are fires, it doesn't stop at the fence, 
and we know that we have problems on public land also.
    I have a very good working relationship with the Chief of 
the Forest Service, and we have been having meetings and 
talking about how can the NRCS help with not only private land, 
but on the public side of the fence also? And that is where we 
have something called the Joint Chiefs Initiative that the 
Chief of the Forest Service and the Chief of NRCS look at how 
we can work together. NRCS works on the private side of the 
fence, and the Forest Service works on the public side of the 
fence. We are also looking at how we can look in some of these 
watersheds to see how we can work together to restore that. We 
also have plant material centers around this country, where we 
are developing new species of plants, and we know that we have 
tools in our toolbox to help with a lot of those areas that 
need to be reforested, or even planted back to grass. So, we 
are consulting very closely with the Forest Service, and Chief 
Moore and I have a very good positive working relationship. And 
we are going to continue to do that, because we understand that 
public-private plays, it plays a very important part, and we 
have to look at how we can make sure there are not resource 
concerns not only on private land, but we need to be looking at 
the resource concerns on public land also.
    Mr. O'Halleran. Thank you, Chief.
    I highlighted that one fire, but I have had several in the 
district just in the past year, I appreciate all the work that 
you are doing towards that process.
    Mr. Ducheneaux, Administrator, thank you for your testimony 
today. I commend you on your being the first Native American 
FSA Administrator, and thank you for all your work so far, and 
your work in the past. Under your leadership, what action is 
being taken to ensure that FSA resources are being used to 
improve conservation outcomes in underserved communities, 
particularly in Indian Country?
    Mr. Ducheneaux. Thank you, Congressman O'Halleran.
    I do have to give a little praise to the NRCS in this 
regard, because they have been leading in delivery of 
conservation programs in Indian Country. The CSP program was 
one of the most valuable tools that many of the producers in 
our communities have ever seen. But what the FSA is doing now 
with regard to the Conservation Reserve Enhancement Program, 
having someone that knows intimately the issues that are facing 
Tribal producers, as they try to enroll in these conservation 
programs at the head of the agency with partnerships across in 
the Department of the Interior to try to be able to work out 
more meaningful and implementable solutions is going to be 
critical in delivering services to those communities.
    Mr. O'Halleran. Thank you very much, and I yield back, 
Madam Chair.
    The Chair. The chair now recognizes Mr. DesJarlais for 5 
minutes.
    Mr. DesJarlais. Thank you, and thanks to our witnesses 
today.
    Our farmers and ranchers have been unfairly labeled as 
climate criminals by some, and that cannot be further from the 
truth. What is the USDA doing today to recognize and promote 
awareness among the general public that our American farmers, 
ranchers, and foresters are already effectively doing to be 
climate heroes in increasing sequestration of greenhouse gases 
through their everyday agricultural practices?
    Mr. Cosby. I will start for NRCS, and then I will turn it 
over to Administrator Ducheneaux.
    I will tell you that as we work with landowners across the 
country, we know that private landowners are the best for 
conservation. These farmers out there, they have a lot of 
challenges. They work the land. They know the challenges that 
they are facing, and they are the best advocate for themselves 
also. As our staff works with them, we advocate for that also.
    When we are out writing conservation plans for producers 
across the country, we look at resource needs and resource 
issues, and producers have a pretty good idea of how to fix a 
lot of these resource problems, and we are able to offer some 
financial assistance to help them through that. And so, as we 
administer these farm bill programs, we will continue to talk 
about producers and farmers and forestland owners as being 
champions, and USDA wants to be a champion right alongside of 
them.
    Mr. DesJarlais. Okay, thank you. Let me ask another 
question.
    We want to make sure that in this farm bill, the 
conservation title does not become the climate title. Farm bill 
conservation programs have garnered bipartisan support in 
Congress and are popular with farmers and ranchers. That 
popularity stems from farmers and ranchers having the ability 
to address natural resource concerns that are specific to their 
individual farms. I also believe these programs work because of 
the locally-led component where local work groups and state 
technical committees prioritize the practices that are 
important to their region or state.
    What I have concern with is turning the conservation title 
into the climate title. For example, post-harvest flooding rice 
fields provides enumerable benefits to wildlife, but might not 
score high in climate dominated ranking systems. I also worry 
about some crops like wheat that can't always take advantage of 
cover crop incentives.
    To both witnesses, will you pledge to support this long-
held model of locally-led incentive-based conservation system 
rather than refocusing Title II as a climate title?
    Mr. Cosby. Sir, I will start with that, and I will tell you 
that the local-led process is something that we wholeheartedly 
support. From my time in the field, as a soil conservationist 
and also as a district conservationist, and then as a State 
Conservationist that locally-led process really works. We had 
meetings in all the counties out there to talk about what the 
local resource issues were, and then they filtered it up to 
factor into how a lot of these programs work at the state 
level. And then working alongside the state technical 
committee, which is a very important group of folks from all 
segments of society, and they sit along with myself when I was 
a State Conservationist, and also the FSA Director, and talk 
about, from a statewide perspective, how should these programs 
work? So, it worked building it up from the local, and then 
marrying it at the state and then also looking at what are the 
national priorities.
    So, when we look at this, we talk about local priorities, 
we talk about state priorities, and then we talk about national 
priorities, and that has worked.
    Mr. DesJarlais. Okay. My district is home to the famous 
Jack Daniels distillery and several other hardworking 
distilleries. White oak trees are crucial to the industry for 
making their world-famous barrels, and unfortunately, the 
industry is in worsening shortage. The last thing they need, 
and so many others in agriculture, is more regulations. There 
is a lot of fear about tax revisions such as the Stepped-Up 
Basis Program, which is critical to ensuring that generational 
family farms remain intact, could be going away. Can you talk 
about what the Department is doing to ensure these producers 
are supported?
    Mr. Ducheneaux. Thank you, Congressman DesJarlais.
    We at the Department, and specifically in the Farm Service 
Agency, we see our role, as I have stated, to support producers 
and ensure that they have enough of their production income 
left at the end of the year so that they can make choices. We 
see the 3.4 million ag producers out there in the country as 
champions of the initiatives that the Administration is touting 
more and better markets, climate-smart solutions, recovery from 
the pandemic, and improving access for the next generation. If 
we don't have producers that have production income in their 
pocket at the end of the production year, that next generation 
isn't going to be interested anyway.
    Mr. DesJarlais. Thank you. That is pretty much all the time 
I have. Thank you both, and I yield back.
    The Chair. The chair now recognizes Mr. Panetta for 5 
minutes.
    Mr. Panetta. Thank you, Madam Chair, and Chief Cosby as 
well as Administrator Ducheneaux, thank you very much for being 
here. Thank you for your testimony, and of course, thank you 
for your work on the Federal conservation programs.
    As you have testified, obviously these types of programs 
have played a vital role throughout our nation's agricultural 
history, and let me tell you, they helped a lot in my district 
on the Central Coast of California, in which they have 
protected farmland, and obviously helped develop effective 
conservation practices that have benefitted not just our farms, 
but our farmworkers and our food for sure.
    Now, on the Central Coast of California, we have a lot of 
diversity when it comes to what type of crops we grow, over 100 
specialty crops, as I am sure both of you know, and therefore, 
some of the challenges are when it comes to conservation 
practices, because one size doesn't fit all, unfortunately, in 
my district, but fortunately for its diversity, which helps 
them out.
    Now, that being said, obviously I do believe that is why it 
is so important to ensure that, and Chief, especially what you 
just said, that especially crop producers and people at the 
local level are at the table in this conversation, especially 
when it comes to conservation.
    And Administrator Ducheneaux, you obviously understand 
this, and I say that based on, and Chief, but especially the 
Administrator, and I say that personally because you have 
someone working for you, Riya Mehta, who understands how 
important it is to have everybody at the table. As you know, 
she was a former employee of mine and a damn good one, and good 
on you for having her work for you, but also good for our 
agriculture and good for our specialty crops on the Central 
Coast, knowing that she is still working on programs like this. 
So, thank you. Thank you very much.
    Now, let me talk about specialty crops, or at least let me 
ask you a question about them, especially when it comes to the 
Climate-Smart Commodities Initiative. Obviously, you know that 
that is funded by the Commodity Credit Corporation, and can you 
explain how specialty crops are included in the Climate-Smart 
Commodities Initiative, and Administrator, I will go ahead and 
put that first one to you.
    Mr. Ducheneaux. Thank you, Congressman, and thank you for 
not taking me too hard for stealing your good staff. I agree, 
she is top notch.
    Since I have been at the agency--and this maybe was going 
on long before--we have engaged with very diverse stakeholder 
groups. We have had several groups from the specialty crop 
arena giving us input on program construction, instead of us 
going out there and saying here is the programs we are doing, 
figure out how to fit in. We are bringing them in at the front 
of these conversations. So, by definition, whatever we do with 
regard to the CCC funding that we are going to have an 
opportunity to deploy is going to have taken into account the 
needs of those specialty crops producers.
    One of the other aspects of the work that we do that really 
isn't tailored to fit specialty or organic crops is our farm 
loan programs, and we are working very diligently with those 
groups to try to find a way to craft those tools to better suit 
their needs, so they are not so reliant on the small segmented 
parts of the work that we get to do to suit their industry.
    Mr. Panetta. Great, thank you.
    Chief, do you have anything to add to that?
    Mr. Cosby. Just a little bit on the locally-led. It is very 
important, especially when we have local conditions. It is very 
important that we have local folks at the table to talk about 
what those resource issues are and what those resource needs 
are, and then our folks are able to look at it and say, ``Hey, 
let's sit down, let's write this conservation plan, let's walk 
the land, let's talk about the crops that you are growing. How 
can we solve the resource issues, and also make sure it is 
beneficial to your bottom line?'' And so, that is what is so 
great about the NRCS team. We are able to look at whatever is 
grown there and take that into consideration when we are 
writing that conservation plan.
    Mr. Panetta. Great. Thank you, Chief.
    Now, in regards to cover crops. Obviously, specialty crops 
kind of have a little bit more difficult time applying these 
types of cover crops for some conservation practices. Now, I 
know there is a proposal and you know there is a proposal for a 
nationwide pandemic cover crop incentive, the Pandemic Cover 
Crop Program that is out there. Mr. Administrator, how will the 
FSA work with the RMA to administer this?
    Mr. Ducheneaux. We work very closely with Administrator 
Bunger on that, and we were partners in delivering that program 
last year. We were expecting 2 million acres, and we enrolled 
nearly 14 million acres in that Pandemic Cover Crop Program, so 
I think the need is there, and you have the commitment of 
myself and Administrator Bunger to work together. She brings 
the added benefit of having been a county executive director 
for us in the past.
    Mr. Panetta. Outstanding, thank you.
    My time is up. I yield back, Madam Chair.
    The Chair. Thank you very much.
    The chair now recognizes Mr. Moore for 5 minutes. Mr. 
Moore, you might be muted.
    Mr. Moore. I apologize, Madam Chair. I thought I hit the 
button. I guess it didn't go through.
    The Chair. We can hear you now. Thank you.
    Mr. Moore. Okay, very good.
    Chief Cosby, what is the staffing capacity level that you 
need to effectively implement the farm bill conservation 
programs and to provide needed technical assistance, and where 
are you currently compared to that number? And last, will the 
Administration request a level, you think, in the near future 
to meet the needs?
    Mr. Cosby. Representative Moore, thank you for the 
question.
    We have a very aggressive hiring strategy. Last year also, 
we had direct hire authority where we were able to take resumes 
and bring on a very capable staff to NRCS. Over the last 2 
years, we have hired about 3,000 employees, and over the next 2 
years, hopefully we will be able to bring on the same.
    We are well above our attrition rate as people leave the 
agency for retirement. We have been able to maintain our 
numbers. We are at 10,300 right now. Our number is a little 
over 11,000 that we can staff up to, and we are going to make 
that number this year. But we are working very closely with our 
State Conservationists and our folks across the country to 
figure out what is the talent that we need, what is the 
skillset that we need, and we are looking at hiring those 
individuals with those types of skillsets that are so vastly 
needed across the country out in those field offices across the 
nation.
    Mr. Moore. Thank you, Mr. Cosby, and with that, Madam 
Chair, I will yield back.
    The Chair. Thank you very much. The chair now recognizes 
Ms. Schrier for 5 minutes.
    Ms. Schrier. Thank you, Madam Chair, and welcome, Chief 
Cosby and Administrator Ducheneaux.
    I would like to touch on a few challenges with conservation 
programs that farmers and growers in Washington State have been 
experiencing, and I hope USDA can help with these.
    The first is simply the lack of staffing at local USDA 
offices, which is impacting USDA's ability to meet the demand 
of farmers who want to participate in farm bill conservation 
programs. And I should just mention, the desire is there. I 
heard from some of my colleagues about not hearing about this. 
I am talking specifically, for example right now, about DeGoede 
Farms that has a hydroponic facility. This is all an EQIP 
supported endeavor that has solar panels and rainwater catch 
basins that is saving a ton of money and increasing yield. But 
it turns out that the local offices that help farmers on the 
ground are simply not staffed, and so, this puts undue burden 
on local conservation districts to fill in the gaps, and they 
are already strained by demand. So, for example, this last year 
in Pierce County, Washington, the conservation did 90 percent 
of the work to get farmers enrolled in EQIP. And I know things 
are improving, but I just wanted to emphasize that need for 
local staffing.
    The second challenge is that while the EQIP program 
generally works well once it is implemented, boy, the paperwork 
and the bureaucracy is really overly burdensome, and the 
timelines from application to implementation is frustratingly 
long. And so, I would ask you to please work on streamlining 
the process to make it more accessible. And of course, I know 
some of that depends on meeting that first request of just more 
staffing.
    And then the third has to do with funding, and there is 
just simply not enough funding for these programs. Only 30 
percent of the farmers who applied for EQIP contracts in my 
district were awarded them, and reimbursement rates are also a 
problem. They are insufficient, particularly in places like 
King County and Pierce County in my district where land is so 
expensive that compensation for sacrificing working farmland 
needs to be much higher to incentivize conservation. So, I will 
work on increasing overall funding to meet the need, both the 
need of farmers for financial liability and access to these 
programs, and the need for more conservation programs in 
general. But I would ask you to consider land value in 
determining how to compensate farmers for opting in to 
conservation programs, because if that doesn't happen, farmland 
is going to turn into housing, which is in high demand and can 
bring huge financial reward to farmers who sell to developers, 
rather than conserving the land. And in addition, I would say 
there shouldn't be restrictions that block farmers from selling 
any of their land for development. For example, we should still 
incentivize conserving part of the land, even if they sell the 
rest.
    So, Chief Cosby, I just was wondering if you could comment 
about what we could do here and what your plans are to ensure 
that farmers who want to participate in USDA programs are able 
to do so and are incentivized to do so?
    Mr. Cosby. Thank you for the question, and I will try to 
hit on a couple of those that you mentioned.
    And staffing, as I mentioned before, that we do have a very 
aggressive staffing model that we are implementing. We are 
hiring staff across the country. We have a very capable State 
Conservationist in Washington State, and we will be working 
with her to make sure that she has the right staffing for her 
state.
    Also, on EQIP, one of the things that we are working on is 
making these programs a little more transparent, and also, we 
are working very hard in each of the states to have outreach 
coordinators that will be working and reaching out to producers 
to help them better understand how these programs work, how do 
you apply, how do you go through the whole process.
    One of the things that we did this year is we gave states 
their budget in October, and so, they have 12 months this year 
to make sure they get folks in the door and also work through 
the process. And we also have a website on USDA.gov that talks 
about all of the signup areas across the country. It is one 
website, and so, producers that farm regionally or farm across 
state lines are able to go in and look at what those dates are.
    And I just want to remind everyone that for most of our 
program, it is a year-round signup period, 365 days, and if you 
don't make it then, we will defer that application until the 
next year. So, it is 365 days, and we encourage folks to come 
in and sign up. If there are any misconceptions there, just 
reach out to that local staff.
    Also on the funding side, your state is no different than 
the rest of the country. We are only able to fund about \1/3\ 
of the applications that walk through the door, and it is a 
very competitive process. We want to make sure that folks 
understand what that process is, and how to apply. And we are 
making it so that it is not by farm size or anything like that. 
When we look at our ranking system, we are trying to make it 
more flexible so that anyone that wants to participate, and 
they are going to do some great conservation work, has that 
opportunity.
    Ms. Schrier. Thank you. I yield back.
    The Chair. Thank you very much, Ms. Schrier, and to 
conclude our first round, and if the witnesses are able, we 
would enjoy doing a second round. To conclude our first round 
is Ranking Member LaMalfa. Mr. LaMalfa, you are recognized for 
5 minutes.

  OPENING STATEMENT OF HON. DOUG LaMALFA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. LaMalfa. Thank you, Madam Chair. I am phoning in from 
home here today, so thank you for letting me work around 
things. I am under the weather a little bit, but as you see, 
the Pomeranian just woke up here this morning at the house.
    That all said, thank you for this hearing, and G.T., thanks 
for sitting in, in the number two chair there.
    I just have a couple questions for Mr. Cosby here quick. Up 
here in northern California, obviously we have been victim of 
an incredible amount of wildfire the last several years, but 
you know, more years than that, really. They are just getting 
bigger and bigger. So, one of the common concerns we are 
hearing from landowners up here is that to reduce wildfire 
risk, is we have a lack of forester capacity, boots on the 
ground, so to speak, right? So, some states have very few 
foresters on hand to do the work. So, Chief, what is NRCS doing 
to try and boost that number and help address this very 
important problem that we are seeing because of just flat 
staffing numbers? We are seeing a lot of frustration with COVID 
closures as well, and what will you be doing or what are you 
strategizing that we can do to implement more of these 
practices to protect our communities and other barriers that 
are standing in the way of forest management?
    Mr. Cosby. Congressman, last year the State Conservationist 
of California identified a great forestry need of foresters, 
and one of the things that he did was a percent of his staff 
that he brought on out there were foresters, and we have 
identified that need across the country. And so last year, we 
were able to bring on numerous foresters. And as we look at how 
do we move through this next round of hiring, we are also 
looking at that need.
    Also, we do have men and women from other agencies, like 
state agencies and other groups that have helped us with this 
over the years, but we saw that internally we need to have more 
foresters on staff. So, we are in the process of doing that, 
but we were able to bring on several last year, and we will be 
bringing on several this next year.
    Mr. LaMalfa. Thank you, and I think you kind of touched on 
my next thought here on regional flexibility. Different regions 
have different concerns and unique needs, so are the programs 
flexible enough to allow that kind of practice [inaudible] 
regions and for needs? [inaudible] resources around to meet 
each region's unique needs? Is there something we need to be 
doing to help give that flexibility to move personnel or have 
the programs work from one region to the next where you have 
unique landscapes, et cetera?
    Mr. Cosby. And I think we built that flexibility into most 
of our programs. As we talked before, we talk about the 
locally-led process where folks on the local level get 
together, talk about what the resource needs are, and also, 
then we look at statewide what are those resource needs, and 
then nationally what are the resource needs? And we try to 
marry those and make sure we have a balanced approach when we 
are implementing these programs. So, that is already baked into 
the pie, and so, we are happy about that. And the folks on the 
local level and at the state level have a lot of flexibility 
when it comes to these programs, working through and with the 
state technical committee, and all the groups out there that 
make up that state technical committee.
    Mr. LaMalfa. Okay, and last, and I will yield back, but the 
COVID closures, again, are really making it difficult to get 
timely assistance through the conservation programs in certain 
areas. Some of the offices in my district are just having a 
devil of a time, folks getting in there and getting things 
signed up, et cetera. So, I hope we can release more people and 
have more flexible hours under the COVID closures, and so I 
will leave it at that.
    Thank you, Madam Chair, and I will yield back.
    The Chair. Thank you very much to the Ranking Member, and 
to the witnesses, thank you for your efficiency in answering 
questions. I think we have made great time and answered a wide 
array of questions.
    So, with that, I would like to move forward with a second 
round, and I will recognize myself first for 5 minutes.
    I wanted to begin by just commenting on the comments from 
my colleague, Mr. DesJarlais, who talked about our producers 
being climate heroes, and I could not agree with him more. And 
certainly, I have heard from producers in my district the 
challenge that they sometimes feel like they are positioned to 
seem like, to use Mr. DesJarlais' term, climate criminals. And 
so, I am really excited about the work that this Subcommittee 
does, and certainly the work of your agencies, because I think 
that it does affirm what my colleague from Tennessee said, 
which is our farmers and producers are the original 
conservationists, and they are the climate heroes.
    And so, in being really forward leaning and hearing some of 
the comments from my colleagues on the other side of the aisle, 
there is the discussion of making sure that the conservation 
title stays the conservation title and not the climate title. 
And I think I would just note that there is real great value in 
seeing all of the benefits of these incredible programs. As 
Chair of the Conservation and Forestry Subcommittee, and as the 
only Virginian on the Agriculture Committee, and as someone who 
has been daydreaming of working on a farm bill since I first 
arrived in Congress, I do look forward to continuing to 
strengthen the conservation title, but recognizing that it has 
real benefits and value to our climate, but also to our farmers 
and producers.
    So, to that end, I would like to begin with you, Mr. 
Ducheneaux, to follow up a little bit on the line of answers 
that you were giving earlier where, some of us have really been 
talking a lot about the climate benefits of these different 
programs, right, that is an exciting element of these programs. 
But I was wondering if you could explain a bit more--and Mr. 
Cosby, I welcome you to follow suit. Can you explain a little 
bit more why farmers and producers want to be a part of this 
program? And so, while we call them conservation programs, they 
have climate value, they also have economic value to our rural 
communities and our producers.
    So, could you maybe walk me through, what is the financial 
gain or the benefit to our nation's producers of these 
programs?
    Mr. Ducheneaux. Thank you, Madam Chair.
    Conservation equals soil health. Soil health equals 
improved production, and the fact of the matter is that 
according to the last time the ERS tabulated the data, only 7 
to 14 of the food dollar are getting back to the producers. 
So, we have to find a way to improve income streams for 
producers so that they have the capability to join us in the 
fight to sequester carbon and mitigate climate change. And I 
think it is important that we include them in the conversations 
very early on, as to what is climate-smart, what are climate 
change mitigation strategies, and we have done that through a 
couple of different requests for input, getting hundreds of 
comments from diverse stakeholders, big ag companies, and the 
like, so that we know what we are going forward into is going 
to be beneficial all the way across the ag industry.
    The Chair. To just dig into that a little bit more, and I 
open this up to either one of you. Your experiences on the 
ground, what are the financial benefits? What are the cost 
savings? What does it mean for a farmer producer to actually 
participate in this program from an economic standpoint of 
their day-to-day operation?
    Mr. Ducheneaux. I will go ahead.
    Take our CRP Grasslands Program, for instance. That lets 
the producer get into an NRCS-approved plan, continue to have 
the same level of production, but also be able to quantify the 
amount of increased production that they are generating. So, 
then in addition to getting a rental payment, they are also 
getting added production out of their existing resources.
    The Chair. So, in layman's terms, rental payment equals 
income incoming. Increased production is they are producing 
more that they can sell.
    Mr. Ducheneaux. Exactly, yes.
    The Chair. Mr. Cosby?
    Mr. Cosby. Ma'am, we could talk all day about this topic, 
and I would love to have this conversation because it is 
exciting to be part of the conversation. When we work with 
producers out in the land, it is just great to see the 
enthusiasm they have for conservation, and they want to do the 
right thing. And they will do the right thing, if they have the 
right information, and my agency is a science-based agency, and 
everything we do is science-based. And just the benefits of 
soil health, having that healthy soil and being able to raise 
that crop and looking at the profitability from that. The 
resiliency of these farms out there, it is outstanding.
    When you look at most of the programs that we administer, 
you look at the co-benefits of all the things that we do, from 
water quality to quantity and quality, also for wildlife 
habitat and some of the great things that are happening around 
this country on working lands, when we have that wildlife 
benefit. It is exciting to see farmers react to that and want 
to do the right things. And, we can do all of those things in a 
way that sustains farms. Sustainability is big for a lot of 
farmers, and I just wish my dad was here today to see some of 
these things that are happening, and be a part of the 
excitement around agriculture. It is very exciting to work in 
agriculture, right now.
    The Chair. Thank you very much.
    So, to the colleagues on this Subcommittee, whether we get 
to the table because we are super excited about conservation-
related climate-smart benefits or climate benefits, or that we 
get to the table because it is so exciting to see that we can 
help ensure that farmers stay on their land, or whether or not 
we get to the table to put extra dollars in the pockets of our 
farmers and producers. As the current and future chair of this 
Subcommittee, that title is going to continue to be the 
conservation title. And so, I am glad that all of the reasons 
that bring us to the table have us here working on behalf of 
our producers.
    With that, I now recognize Mr. LaMalfa for an additional 5 
minutes. All right. Mr. LaMalfa, we will come back to you in 
the future.
    Mr. Thompson, would you like an additional 5 minutes?
    Mr. Thompson. Yes, absolutely. Thank you so much.
    Gentlemen, thank you to both of you, and this question 
actually is for both of you. I will give you an opportunity to 
weigh in as we really begin to build out the framework for the 
2023 Farm Bill.
    I will start with Administrator Ducheneaux. It will be the 
same question for both of you. Can you explain about your 
individual agency perspectives on the 2018 Farm Bill program 
implementation strengths, and opportunities for improvement?
    Mr. Ducheneaux. Yes, sir, and thank you for the question.
    When I came on board in February, there were several things 
that had their origins in the 2018 Farm Bill that hadn't quite 
made it across the finish line, so we are really interested in 
making sure that those get out there and make a meaningful 
impact, so that we have something to evaluate as we have our 
future conversations, sir.
    One of them is Heirs Properties Relending Program. That 
hadn't really moved anywhere yet, and we are happy to announce 
that we have that out, and we have some prospects in the 
pipeline to help deal with the heirs properties issues all 
across the South and all across Indian Country.
    Another aspect of that 2018 implementation is, for example, 
the CLEAR expansion and the CREP expansion. Finding that 
flexibility and then deploying that flexibility, so that we 
have meaningful information to make future decisions on is 
really critical, sir.
    Mr. Thompson. Very good.
    Chief Cosby, kind of the same question.
    Mr. Cosby. Yes, from the NRCS side, I have talked about it 
a little bit that we were able to make sure our states had 
their budget in early October, and that provided 12 months out 
of the year for them to do planning. And I think that extends 
the season that we have to work for producers.
    Also, when we look at our programs, we talk about CSP, we 
have been able to modify that to talk about in that fifth year 
if a producer doesn't have an opportunity to re-enroll, they 
do--can come right back and not have to sit out for the 2 year 
period. And when we talk about EQIP, we are looking at how do 
we make it more flexible? How do we make sure that anyone that 
wants to benefit from the programs--and that is where the 
money, the $50 million that we put out across the country comes 
in really strong is that we are able to make sure that anyone 
that wants to walk through the door benefits from USDA programs 
to have that knowledge and experience, and we are able to work 
with community-based organizations and universities and a lot 
of folks across the country to make sure folks understand how 
these programs work, because they do get a little complicated 
at times, and we want to make sure they have that opportunity 
to participate.
    And so, we have been looking at the flexibilities of all of 
our programs, and we have been working through those, RCPP, the 
flexibility we built there. So, that is something from day 1 
that we have been doing, because we want producers to be able 
to participate without barriers.
    Mr. Thompson. Very good. Thank you, both of you, and Madam 
Chair, I yield back.
    The Chair. The chair now recognizes Ms. Pingree for 5 
minutes.
    Ms. Pingree. Thank you very much, Madam Chair, and again, 
thank you to our witnesses for being here and all of your very 
helpful answers to our questions.
    Mr. Cosby, I am coming back to you again. I just want to 
ask a little bit about composting as a conservation practice.
    So, I have been interested in this for a long time, and 
pushing NRCS to adopt composting as a conservation practice for 
several years. But I was encouraged to hear the interim soil 
carbon amendment process, which includes compost and biochar, 
was beginning to be rolled out last year. So, could you give me 
an update on the soil carbon amendment practice, and where and 
how it has been used so far?
    Mr. Cosby. I will tell you, it is something we are pretty 
excited about, especially when you talk about the standard and 
also as it applies to our urban folks when you talk about food 
waste and composting. That standard is working its way through 
the process, and we are hoping to be able to release it real 
soon. It is pretty important when you start talking about soil 
amendments and some of those type things; but we are working 
through the process and hopefully we will be able to have that 
out the door really soon.
    Ms. Pingree. And are there some places that it is being 
used?
    Mr. Cosby. We put in interim standards when we do this, and 
so we are able to use those interim standards until they are 
fully vetted and finalized, so there are some places that are 
using it, and we are also doing studies on that to make sure 
that we hit the mark when we do release it finally. But we do 
develop interim standards for everything that goes through this 
process.
    Ms. Pingree. Great. Well, I am glad that is coming out 
soon, and I look forward to seeing that.
    I ran out of time in my last question, so I just want to 
reinforce the issue I was bringing up about PFAS, and encourage 
you, and I am happy to follow up with this, to have NRCS doing 
more, supporting more of the soil testing. I know that you help 
with soil testing to a certain extent, but the original 
language was really to have EQIP be used to identify and deal 
with contaminants. And again, because PFAS is a growing problem 
because costs of testing are challenging for farmers, it seems 
to me we could use this more as a tool.
    I don't know if you want to comment on that, but I 
certainly will follow up to encourage that is a possibility 
that it could be used.
    Mr. Cosby. And I would like to visit more with you about 
this, and hopefully we can follow up after this hearing and we 
can work through it, and we can look at what the 
recommendations are and work with your staff to get to a place 
where we can support our farmers in your state.
    Ms. Pingree. Great. Well, thank you for that, and again, 
thank you for being with us today and we will be chatting with 
you in the future. So, thanks so much.
    Mr. Cosby. Thank you.
    The Chair. I see we have two remaining Members. We are 
going to go to Mr. LaMalfa and then Mr. Allen.
    Mr. LaMalfa, you are recognized for 5 minutes.
    Mr. LaMalfa. Thanks again, Madam Chair.
    To both of our witnesses, I was wondering how something 
that Mr. O'Halleran had touched upon on the post-fire projects, 
and how are these watershed protections and such coming along 
as we had an incredible amount of rain and snowfall in northern 
California here immediately after the end of the fire season, 
and we had a giant washout that took out one of our state 
highways for weeks. But also, the great concern is about what 
is that going to do for our waterways, as basically my district 
is the well for a lot of the rest of the state. And so, we need 
to be sure that we are advancing this watershed protection and 
conservation, et cetera.
    So, how is it? How are they coming along in your view at 
this point here? Do you have what you need? Are people moving 
at a swift pace to try and get ahead of over 1 million acres 
worth of damage?
    Mr. Cosby. I will start for NRCS. I will let you know that 
the watershed program is one of our oldest programs that we 
administer, and we have had great success. One of the things I 
am planning--and on some of these watersheds, we do have a 
2,025 acre limitation unless written by you folks to say that 
we can waive that. Under our flood prevention, we do have our 
Emergency Watershed Program. It does work very well. We have 
had a number of requests for things like debris removal and log 
jams and some of those types of things. So, the staff is 
receiving those requests. When we receive those in the field, 
we go out and do a disaster survey to look at what the impacts 
are on the land, and then those come in for funding as we have 
the funding. Funding is limited, and so, the staff does work 
through that to make sure that happens.
    And then on the rehab side, we do have some dams out there 
that have lived past their life expectancy, and we have pipes 
that are rusting. And so, we are looking at those and seeing 
how we can go in and rehab those dams.
    And so, the process is working very well. It is a sponsor-
led program where the sponsors contact us and they do a lot of 
the work, and then we come in with financial assistance to help 
with that. So, the program is working well, and so we hopefully 
can continue that.
    Mr. LaMalfa. Thank you.
    Also, you mentioned what is called the Joint Chiefs 
Landscape Restoration Partnership that NRCS works with Forest 
Service on. We have several of those projects underway in my 
own district, and one called the Big Valley South Landscape 
Restoration. Can you talk a little bit more about the work on 
these projects and the benefits you are seeing with the 
collaboration, with the partnership? What does that do to 
enhance what we haven't had before?
    Mr. Cosby. It is a great partnership, and as a State 
Conservationist, I had an opportunity to work with the Forest 
Service on the Wayne National Forest in southern Ohio. And, we 
have private land interspersed in and around public land, and a 
lot of times, there was work being done on public land that 
should have been done on private land also. And so, it works 
very well when we are able to partner with the Forest Service 
to look and ask them where they are going to be working, and 
then we are able to contact those landowners in and around that 
area that they are going to be working in, and we can offer 
conservation planning assistance, we can offer financial 
assistance so that once the work on public land is done, we can 
also achieve the same benefits on private land, especially when 
you get into things like timber stand improvements or like 
grape vine removal and some of these things that encroach on 
other areas. And so, it has been a great collaboration between 
the two agencies, the Forest Service, and we hope that 
continues. We know it will continue. We don't hope it 
continues; we know it will continue. Like I said, we have a 
great working relationship with the Chief at the Forest 
Service.
    Mr. LaMalfa. Thank you, Chief Cosby, and Madam Chair, thank 
you. I will yield back to you.
    The Chair. The chair now recognizes Mr. Allen for 5 
minutes.
    Mr. Allen. Okay, thank you, Madam Chair.
    Chief Cosby, let's go back to the announcement of funding 
of projects for the Feral Swine Eradication and Control Pilot 
Program. Can you update the Committee on the status of these 
projects?
    Mr. Cosby. Yes, and thank you, sir, for the question.
    We have been involved. It is a program where the money is 
embedded to other agencies to carry out. We help with things 
like trapping, but we do not provide money to actually 
exterminate those animals. It has been really popular in the 
southern part of the country. I know as the feral hogs move 
further, we will be probably getting into more of that. But it 
has been very popular. It has worked very well for us to work 
with those agencies, like APHIS and some of the rest of them, 
to transfer those dollars to help with this, and we know it is 
a problem.
    Mr. Allen. And obviously, it continues to be a problem. 
Will there be additional projects, amounts, and funding in the 
coming year?
    Mr. Cosby. We hope so. We will take that back and take a 
look at it, and as we look at programs and how they are funded, 
we will take that under consideration.
    Mr. Allen. Okay, and Administrator, going back to the 
climate thing. Of course, you mentioned that the farmers are 
only getting like 7 to 10 of the value of that. Have we 
looked at, from the standpoint of this carbon initiative, how 
much production land have we taken out of the equation, and 
could that be a possibility of the shortages we are seeing or 
the increase in food prices?
    Mr. Ducheneaux. Thank you for the question, sir.
    I don't necessarily think that is a factor, because it is a 
voluntary incentive-based program, and we are really 
emphasizing the working lands aspect of our Conservation 
Reserve Program. We hope producers take a look at that, as an 
opportunity to stockpile feed or foodstuff for the future use, 
and capitalize on that as an asset. There is a growing movement 
in the climate industry that is talking about soil wealth, as 
opposed to soil health, and how do you start to quantify the 
improved value of your real estate when you are engaging in 
these practices.
    Mr. Allen. Exactly.
    Mr. Ducheneaux. And do that. Yes, sir.
    Mr. Allen. Well, here is what we need to get to the bottom 
one. One is obviously to do some of these initiatives, we are 
using taxpayers' money to do that, correct?
    Mr. Ducheneaux. Yes, sir.
    Mr. Allen. Yes, okay. So, we are using the taxpayers' 
dollars to do that, but then the result of that is we have 
these empty grocery shelves and we have inflation as far as the 
food source is concerned. Input costs have gone out the roof. 
What efforts is USDA doing to get to research and get to the 
bottom of what the heck is going on in this economic situation, 
and really, it is a crisis that we have to deal with. Where are 
you on that, and what are you trying to do to explain what the 
heck is going on?
    Mr. Ducheneaux. Sir, I have not done any research on that, 
but I will visit with our folks at the Economic Research 
Service, and see if there is anything that they have, and get 
in touch with your office on that. But I don't think that it is 
necessarily a cause-and-effect relationship. The assistance 
that we provide with taxpayer resources allocated to us through 
Congressional action is the driver of higher food prices, 
because it sure isn't getting back to the producers.
    Mr. Allen. No, and see, that is what my point is. Where is 
the money going?
    Mr. Ducheneaux. We will do some research and get back to 
you.
    [The information referred to is located on p. 43.]
    Mr. Allen. Okay. Yes, I think that would be very helpful to 
our Committee, particularly when we are looking at the new farm 
bill, because that is, that whole farm bill is an economic 
project to ensure that Americans have a safe and efficient food 
source, and in fact, that is what this Committee needs to be 
laser focused on.
    Thank you so much for being with us today, and Madam Chair, 
I yield back.
    Mr. Ducheneaux. Thank you, sir.
    The Chair. Thank you very much.
    Before we adjourn today, I invite the Ranking Member of the 
full Agriculture Committee to share any closing comments he may 
have.
    Mr. Thompson. Well, thank you, Madam Chair. Thanks for this 
hearing. Chief and Administrator, thank you both for being with 
us here today.
    As we work towards the 2023 Farm Bill, we know that we have 
a lot of responsibility and that means doing great oversight 
and learning the lessons of what we were able to put into what 
looks like a very successful 2018 Farm Bill. And so, as we work 
towards restoring a robust rural economy and really creating 
the conditions in rural America where we begin to rebuild our 
population, this was a great start of the conversation today, 
specifically within the jurisdiction of your two agencies. And 
so, thank you for that.
    This is a great start. We look forward to continuing this 
conversation so that we are in a position to, at the end of the 
day when we get that 2023 Farm Bill across the finish line, it 
is something that we can be very proud of, but more 
importantly, will be very effective of serving all American 
families.
    So, thank you so much, and I yield back.
    The Chair. Thank you very much.
    I want to thank you both so much for being here today. 
Thank you for your testimony. The conversation has been very 
informative. All of the Members who asked questions, I think 
that all of our notes are pretty substantial. And this is 
incredibly helpful as we look towards 2023 and the farm bill, 
as we work to ensure that we can expand access to conservation 
programs by really bringing the programs that you all run to 
new communities, making it easier for producers to participate 
in programs that they know and that they benefit from.
    So, my gratitude to the Ranking Member. We missed having 
him in person. My appreciation to the Ranking Member of the 
full subcommittee--excuse me, for the Committee, and just as we 
close out, Mr. Cosby, I thought that the comments that you made 
about the 81 new enhancements to CSP, I will be following up 
because I would love to get an itemized list of those. I am 
really appreciative of some of the comments and answers that 
you gentlemen brought to this discussion, and certainly as we 
close out today, again, Mr. Cosby, I want to say that the 
legacy that you discussed from your family's experience losing 
their farmland in Mississippi to the fact that you are now at 
the helm of programs that allow farmers across the country to 
make a bit more money and have a bit more stability and income 
and certainty on their lands is quite a trajectory. So, I am 
really appreciative that you have brought your perspective and 
your work here today. Thank you again to both you, Mr. Cosby, 
and you, Mr. Ducheneaux.
    And with that, under the Rules of the Committee, the record 
of today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from the witnesses to any question posed by a Member.
    This hearing of the Subcommittee on Conservation and 
Forestry is adjourned.
    [Whereupon, at 11:55 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
                Supplementary Material Submitted by USDA
Insert 1
          Mr. Thompson. . . .
    But this is about direct consultation. Did the House, I can tell 
you, the House Republicans were not consulted, and as Ranking Member, 
we were not consulted. So, was there direct consultation by the 
Department with House Democrats, well, let's just start with that, I 
guess.
          Mr. Cosby. The way I would answer that is we provide 
        technical assistance when asked by Members of Congress, and I 
        am sure that there were some conversations that were had.
          But we provide technical assistance when we are asked.
          Mr. Thompson. So, you are not sure?
          Mr. Cosby. I am not sure of that.
          Mr. Thompson. Not sure.
          Mr. Cosby. But I can take that question back and get you the 
        answer.

    Consistent with the expectation of Congressional offices, USDA 
generally does not distribute technical assistance beyond the 
requesting office to ensure we maintain the trust of requesting 
Congressional offices. Congressional offices may share any technical 
assistance generated by the Department with fellow Congressional 
offices and/or other entities.
Insert 2
          Mr. Allen. . . .
          But I would like to specifically ask a question about the CRP 
        program. Right now the biggest problem in that program is 
        flexibility. Every request that my office has made, say, for 
        example, if you want to exchange this property for another 
        piece of property and stay in the program, it has been denied. 
        There is absolutely no flexibility, and of course, as you know, 
        things change, property values change and that sort of thing. 
        And you are in this program 10 to 15 years, why don't we have 
        flexibility in that program?
          Mr. Ducheneaux. Well, sir, I would offer that I haven't heard 
        a producer ask me about exchanging properties. We will look 
        into that. I know the Secretary has charged us with finding as 
        much flexibility that we can within our existing authorities to 
        benefit producers. So, I will definitely check on that.

    Land offered for enrollment in the Conservation Reserve Program 
(CRP) is evaluated, ranked, and accepted based on how CRP will benefit 
and restore the land and the related resource concerns associated with 
that parcel of land. Land is accepted into CRP on a competitive basis 
where producers offer land during an enrollment period, which is then 
ranked using an Environmental Benefit Index (EBI) in addition to costs 
associated with addressing the resource concerns.
    To suggest flexibilities to ``trade land'' would not serve the 
purpose for what CRP is currently designed to accomplish, nor would it 
comply with the statute and clear Congressional intent.
Insert 3
          Mr. Allen. Yes, okay. So, we are using the taxpayers' dollars 
        to do that, but then the result of that is we have these empty 
        grocery shelves and we have inflation as far as the food source 
        is concerned. Input costs have gone out the roof. What efforts 
        is USDA doing to get to research and get to the bottom of what 
        the heck is going on in this economic situation, and really, it 
        is a crisis that we have to deal with. Where are you on that, 
        and what are you trying to do to explain what the heck is going 
        on?
          Mr. Ducheneaux. Sir, I have not done any research on that, 
        but I will visit with our folks at the Economic Research 
        Service, and see if there is anything that they have, and get 
        in touch with your office on that. But I don't think that it is 
        necessarily a cause-and-effect relationship. The assistance 
        that we provide with taxpayer resources allocated to us through 
        Congressional action is the driver of higher food prices, 
        because it sure isn't getting back to the producers.
          Mr. Allen. No, and see, that is what my point is. Where is 
        the money going?
          Mr. Ducheneaux. We will do some research and get back to you.

    The Coronavirus (COVID-19) pandemic and related disease mitigation 
measures introduced numerous, interwoven challenges along food supply 
chains and caused a rapid, dramatic shift in consumers' food purchasing 
behaviors. As the pandemic changed and evolved and new issues emerged 
such as rising energy, agricultural commodity, and labor prices, 
producers and consumers have continued to adapt. FSA is working 
collaboratively across the Department to address concerns related to 
the costs of inputs. The USDA Economic Research Service (ERS), which 
anticipates trends and emerging issues in agriculture, food, the 
environment, and rural America, assisted with providing research on 
this issue. ERS research and data products provide information related 
to the food supply chain from the farm to the consumer, including 
fertilizer prices, price spreads from farm to consumer, food 
expenditures, food price forecasts, and the distribution of the food 
dollar. These products can provide insight into the current economic 
conditions facing consumers and food producers.
    Fertilizer Prices: ERS released the latest farm income forecast \1\ 
on February 4, 2022. Farm sector production expenses--including 
expenses associated with operator dwellings--are forecast to increase 
by five percent ($20.1 billion) in 2022 from 2021. Nearly all expense 
categories are forecast to rise during the year, largely due to 
expectations of higher prices paid by farmers for production inputs. In 
particular, fertilizer-lime-soil conditioner expenses are forecast to 
increase 12.0 percent ($3.4 billion). Based on data from USDA's 
National Agricultural Statistics Service (NASS), prices paid by farmers 
for fertilizers increased 15 percent in 2021 and ERS is forecasting 
that prices will continue to increase in 2022. The next farm income 
forecast will be released on September 1, 2022.
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    \1\ https://www.ers.usda.gov/topics/farm-economy/farm-sector-
income-finances/.
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    Price Spreads from Farm to Consumer: ERS estimates farm to consumer 
price spreads--the difference between a food's retail price and the 
value of the farm commodities used in the food--for a select group of 
food products. Payments to farmers represent about half of what 
consumers spend for whole milk, \1/3\ of what they spend for head 
lettuce, and 20 percent of what they spend for white, all-purpose 
flour. These estimates can be used to project how changes in a food's 
farm value might affect retail food prices, if that change were fully 
passed on to consumers without changes in costs for processing, 
transportation, packaging, and other marketing services. The All-Milk 
price, a broad measure of prices received by farmers for milk, 
increased from $17.50 per one hundred pounds (cwt) in January 2021 to 
$24.20 cwt in January 2022 (a 38 percent increase). Hard red winter 
wheat meanwhile rose from $5.41 per bushel to $7.47 per bushel over the 
same time period (also a 38 percent increase). However, ERS research 
shows that increases in farm prices have a less than proportional 
effect on retail prices.\2\ * If white all-purpose flour sold at retail 
stores for $0.50 per pound with a farm value of $0.10 per pound, for 
example, then an increase in the product's farm value to $0.14 (a 40 
percent increase) could raise the retail price to $0.54 (an eight 
percent rise). Of course, if costs for milling, transportation, or 
another marketing services were also rising, the cumulative impact on 
retail prices will likely be much greater.
---------------------------------------------------------------------------
    \2\ https://www.ers.usda.gov/amber-waves/2016/august/processing-
and-marketing-blunt-the-impact-of-volatile-farm-prices-on-retail-dairy-
prices/.
    * Editor's note: footnotes annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    Share of income spent on food in U.S. dropped ten percent in 2020 
to historic low: The share of U.S. consumers' disposable personal 
income [1] (DPI) spent on food in the United States was 
relatively steady over the last 20 years, decreasing from 9.95 percent 
in 2000 to 9.58 percent in 2019. However, during the COVID-19 pandemic 
and economic recession in 2020, the share of DPI spent on food 
decreased 10.1 percent from the previous year to 8.62 percent, the 
lowest share in the past 60 years. Consumers spent 1.4 percent more of 
their incomes on food at supermarkets, convenience stores, warehouse 
club stores, supercenters, and other retailers (food at home) from 2019 
to 2020, while they spent 22.2 percent less of their incomes on food at 
restaurants, fast-food places, schools, and other places offering food 
away from home over the same period. Changes in the shares of income 
spent on food in 2020 resulted, in part, from pandemic-related closures 
and restrictions at food-away-from-home establishments, as well as from 
the largest annual DPI increase in 20 years. The increase in DPI was 
driven by additional government assistance to individuals in 2020, 
including stimulus payments to households and increased unemployment 
insurance benefits.
---------------------------------------------------------------------------
    \[1]\ DPI is the amount of money that U.S. consumers have left to 
spend or save after paying taxes.
---------------------------------------------------------------------------
Share of income spent on food in U.S. dropped ten percent in 2020 to 
        historic low
Percent of disposable income spent on food


          Note: The percentages in the chart are rounded to the nearest 
        hundredths place. The percent for total on food in 2019 does 
        not equal the sum of the percentages for food at home and food 
        away from home due to rounding.
          Source: USDA, Economic Research Service, using data from the 
        Food Expenditure Series.

          During the Coronavirus (COVID-19) pandemic and economic 
        recession in 2020, the share of U.S. consumers' disposable 
        personal income (DPI) spent on food decreased 10.1 percent from 
        the previous year to 8.62 percent, the lowest share in the past 
        60 years. DPI is the amount of money that U.S. consumers have 
        left to spend or save after paying taxes. The share of DPI 
        spent on food in the United States was relatively steady over 
        the last 20 years, decreasing from 9.95 percent in 2000 to 9.58 
        percent in 2019. Consumers spent 1.4 percent more of their 
        incomes on food at supermarkets, convenience stores, warehouse 
        club stores, supercenters, and other retailers (food at home) 
        from 2019 to 2020, while they spent 22.2 percent less of their 
        incomes on food at restaurants, fast-food places, schools, and 
        other places offering food away from home over the same period. 
        Changes in the shares of income spent on food in 2020 resulted, 
        in part, from pandemic-related closures and restrictions at 
        food-away-from-home establishments, as well as from the largest 
        annual DPI increase in 20 years. The increase in DPI was driven 
        by additional government assistance to individuals in 2020, 
        including stimulus payments to households and increased 
        unemployment insurance benefits. The data for this chart come 
        from the Economic Research Service's Food Expenditure Series 
        data product. See also the Amber Waves article Average Share of 
        Income Spent on Food in the United States Remained Relatively 
        Steady from 2000 to 2019,\3\ published in November 2020.
---------------------------------------------------------------------------
    \3\ https://www.ers.usda.gov/amber-waves/2020/november/average-
share-of-income-spent-on-food-in-the-united-states-remained-relatively-
steady-from-2000-to-2019/.

          Last updated: Friday, July 02, 2021
          For more information, contact: Eliana Zeballos \4\ and Wilson 
        Sinclair \5\
---------------------------------------------------------------------------
    \4\ https://www.ers.usda.gov/authors/ers-staff-directory/eliana-
zeballos/.
    \5\ https://www.ers.usda.gov/authors/ers-staff-directory/wilson-
sinclair/.
---------------------------------------------------------------------------
Average share of income spent on food at home in the U.S. has fallen 
        over time, but less sharply over the last 2 decades
Percent


          Source: USDA, Economic Research Service (ERS) using data from 
        the ERS Food Expenditure Series.

          In 1960, U.S. consumers spent an average of 17.0 percent of 
        disposable personal income (DPI) on food. By 2019, this share 
        had shrunk to 9.5 percent. This decrease was driven by a 
        decline in the share of income people spent on food at home. 
        The share of DPI spent on food purchased at supermarkets, 
        supercenters, convenience stores, and other retailers fell from 
        13.7 percent in 1960 to 5.7 percent in 2000. Over the same 
        period, the share of DPI spent on food purchased from 
        restaurants, fast-food places, schools, and other away-from-
        home eating places rose from 3.3 percent to 4.2 percent. The 
        declining share of income spent on food at home reflects, in 
        part, efficiencies in the U.S. food system (which kept 
        inflation for food-at-home prices generally low) and rising 
        disposable incomes. A slower decline in share of income spent 
        on food at home after 2000 could reflect U.S. consumers opting 
        to prepare more meals at home and purchasing more expensive 
        grocery store options than they did in earlier decades. This 
        chart appears in ``Average Share of Income Spent on Food in the 
        United States Remained Relatively Steady From 2000 to 2019,'' 
        \6\ in the Economic Research Service's Amber Waves magazine, 
        November 2020.
---------------------------------------------------------------------------
    \6\ https://www.ers.usda.gov/data-products/chart-gallery/gallery/
chart-detail/?chartId=100
002.

          Last updated: Friday, December 11, 2020For more information, 
        contact: Eliana Zeballos \7\ and Wilson Sinclair \8\
---------------------------------------------------------------------------
    \7\ https://www.ers.usda.gov/authors/ers-staff-directory/eliana-
zeballos/.
    \8\ https://www.ers.usda.gov/authors/ers-staff-directory/wilson-
sinclair/.

    Food Spending During the Pandemic (2020-2021): Analyzing data from 
the ERS Food Expenditure Series \9\ found expenditures at restaurants, 
school cafeterias, sports venues, and other eating-out establishments 
(i.e., food away from home or FAFH) dropped 48 percent from February 
2020 to April 2020, the beginning of the COVID-19 pandemic. Inflation-
adjusted spending on FAFH in April 2020 was 51 percent lower than April 
2019--but by May 2021 spending recovered to exceed the pre-pandemic 
record set in May 2019. FAFH spending remained strong in December 2021 
at 4.4 percent higher compared with pre-pandemic December 2019. FAFH 
spending surpassed food-at-home (or FAH) expenditures by April 2021 and 
remained higher than FAH spending for much of 2021. FAH expenditures 
rose sharply starting in March 2020 and remained higher than 2019 
levels, setting a new record of $90 billion in December 2021. Total 
inflation-adjusted expenditures on food were 6.5 percent higher in 
December 2021 compared with December 2019. In March 2020, efforts to 
limit the spread of COVID-19 included stay-at-home orders that led to 
significant changes in U.S. consumers' food-spending patterns. Food 
spending patterns in 2021 reflect the effects of the increased 
reopening of restaurants and increases in household income with 
economic recovery.
---------------------------------------------------------------------------
    \9\ https://www.ers.usda.gov/data-products/food-expenditure-series/
 
---------------------------------------------------------------------------
    Food Prices: The Food Price Outlook tracks recent trends and 
provides forecasts on farm-, wholesale-, and retail-level food prices 
as measured by the Producer Price Index (PPI) and Consumer Price Index 
(CPI) published by the Bureau of Labor Statistics. The all-food CPI 
increased by 3.4 percent in 2020 and 3.5 percent in 2021, well above 
the 20 year average of 2.4 percent. In January and February 2022, the 
all-food CPI increased by 1.0 percent, and increased by 7.0 percent and 
7.9 percent from a year earlier, respectively. The most recent food 
price forecasts were released February 25th, at the very beginning of 
the most recent conflicts in Ukraine. At the time of this forecast, 
food prices were predicted to increase between 2.5 and 3.5 percent in 
2022, faster than the historical average. Food-away-from-home prices 
are predicted to increase between 4.0 and 5.0 percent; food-at-home 
prices are predicted to increase between 2.0 and 3.0 percent.
    The Food Dollar: The ERS Food Dollar \10\ `Food at Home: Industry 
Group' (FAH-IG) series tells us what the distribution of value 
accumulation (or costs) are along the sequence of activities between 
farm production, food processing, transportation, marketing, and other 
supporting activities, culminating in grocery store and related retail 
food purchases. According to the FAH-IG, 15.2 percent of spending for 
all grocery store and related retail food purchases covered 
agribusiness (farm inputs) and farm production cost contributions, with 
another 63.5 percent of cost contributions coming from food processing 
(24.5%), wholesalers (16.6%) and food retailers (22.4%). The remaining 
21.3 percent of costs come from various other supporting industries. 
Spending of this type totaled $876.8 billion in 2020 (see Food 
Expenditures \11\).
---------------------------------------------------------------------------
    \10\ https://www.ers.usda.gov/data-products/food-dollar-series/.
    \11\ https://www.ers.usda.gov/data-products/food-expenditure-
series/.
---------------------------------------------------------------------------
    Although food price inflation in 2019 was not nearly as pronounced 
as in 2020, 2021, or to date in 2022, the 2020 FAH-IG series does show 
how price pressures were in play between 2019 and 2020. For example, 
primary factor value added (labor and overhead) costs per unit of 
output increased most among agribusiness (4%) and farm production (6%) 
establishments serving the domestic food retail market. More modest 
per-unit cost increases are shown in other supply chain industry 
groups, whereas per-unit costs among energy commodities used in 
domestic food production declined ten percent in 2020--a trend that has 
clearly reversed in 2021-22. For example, according to the Bureau of 
Labor Statistics, the year-over-year change in the producer price index 
(PPI) for electric power rose by over 21 percent in 2021, and the 
February 2022 monthly PPI is 5.9 percent above the December 2021.
    On March 11, 2022, USDA also announced plans to support additional 
fertilizer production for American farmers to address rising costs and 
spur competition. USDA will make available $250 million through a new 
grant program this summer to support independent, innovative and 
sustainable American fertilizer production to supply American farmers.
                                 ______
                                 
   Submitted Letter by Lotanna Obodozie, Climate Campaign Director, 
                    National Young Farmers Coalition

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.;
 
Hon. Abigail Davis Spanberger,       Hon. Doug LaMalfa,
Chair,                               Ranking Minority Member,
Subcommittee on Conservation and     Subcommittee on Conservation and
 Forestry,                            Forestry,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

  Re: In Regards to the Farm Bill Conservation Programs Hearing before 
            the U.S. House of Representatives Committee on Agriculture, 
            Subcommittee on Conservation and Forestry

Date: February 2, 2022

    The National Young Farmers Coalition (Young Farmers) thanks the 
U.S. House of Representatives Committee on Agriculture for holding this 
hearing on farm bill conservation programs. Climate change is an 
increasing and persistent threat to agriculture, disrupting food 
production across the country and the rest of the world. The 
agricultural sector, however, is uniquely poised to be able to directly 
mitigate the disastrous effects of climate change through practices 
that sequester carbon in the soil and provide other ecosystem services 
to build on-farm climate resilience. Farm bill conservation programs 
are critical elements in combating climate change as well as improving 
access to land for the next generation. We thank the Honorable David 
Scott, Glenn `GT' Thompson, Abigail Spanberger, and Doug LaMalfa for 
holding this hearing to discuss impacts of and opportunities for 
improving farm bill conservation programs.
    The National Young Farmers Coalition works closely with young 
farmers across the country to assist them in building resilience to 
climate change through training, building farmer networks across the 
U.S., and advocating for policy change at the state and Federal level. 
Our campaigns focus on key issues, identified by our members, to 
address the major obstacles young farmers face.
    In a 2017 national survey of our coalition, 66% of respondents 
reported experiencing unpredictable weather and 53% attributed those 
changes to climate change.\1\ Furthermore, in a 2020 survey of policy 
issues, our members across the country identified addressing climate 
change as their number one priority.\2\ Young farmers, particularly 
Black, Indigenous and other people of color (BIPOC) farmers are on the 
frontlines of experiencing and responding to this crisis. Our farmers 
have experienced increased pest pressure, uncertainty and severe 
fluctuations in water supply, and increased rates of disease, with 
seemingly no end in sight. Young farmers have lost crops and sustained 
damage to their farms due to extreme weather events, have had disrupted 
growing seasons, suffered severe economic losses, and have shut down 
operations due to droughts and unsafe conditions from uncontrolled 
wildfires.
---------------------------------------------------------------------------
    \1\ Sophie Ackoff, Andrew Bahrenburg, and Lindsey Lusher Shute, 
Building a Future with Farmers II, NationalYoung Farmers Coalition, 
November 2017, www.youngfarmers.org/wp-content/uploads/2017/11/NYFC-
Report-2017.pdf.
    Editor's note: footnotes annotated with  are retained in Committee 
file. Further note: the above hyperlink is no longer active: https://
www.youngfarmers.org/wp-content/uploads/2019/03/NYFC-Report-
2017_LoRes_Revised.pdf
    \2\ National Young Farmers Coalition, ``2021 Climate Policy 
Recommendations,''  May 2021, https://www.youngfarmers.org/2021/05/
2021-climate-recommendations/.
---------------------------------------------------------------------------
    Further compounding this issue is the lack of access to affordable, 
quality land, as farmland, agriculture, and the climate crisis are 
deeply intertwined. Land is the foundation of nourishment and 
resiliency and is the number one tool available to farmers in the fight 
against climate change. Land that is stewarded plays a critical role in 
climate change mitigation and resilience, yet accelerating trends of 
farmland loss are occurring disproportionately on soils rated highest 
for productivity, versatility, and resiliency.\3\ Additionally, the 
dispossession of land from BIPOC individuals and the ongoing 
consolidation of land into the hands of fewer and fewer owners makes 
this issue all the more difficult for BIPOC farmers. Secure land tenure 
is critical to farmers' ability to remain in the field long-term and to 
making deep-rooted and long lasting climate interventions. Despite 
being heavily affected by climate change, farmers have the 
transformative power to sequester carbon by using climate-smart methods 
including planting cover crops, using no- and reduced-till methods, and 
managed grazing. By incorporating these methods and others like them, 
farmers can simultaneously provide healthy food to their local 
communities--but they can only do so with access to land.\4\
---------------------------------------------------------------------------
    \3\ Julia Freedgood, Mitch Hunter, Jennifer Dempsey, and Ann 
Sorensen, Farms Under Threat: The State of the States, American 
Farmland Trust, 2020.
    \4\ Holly Rippon-Butler, Land Policy: Toward a More Equitable 
Farming Future, National Young Farmers Coalition, 2020, https://
www.youngfarmers.org/land/wp-content/uploads/2020/11/
LandPolicyReport.pdf.
---------------------------------------------------------------------------
    Farm bill conservation programs, such as the Environmental Quality 
Incentives Program (EQIP), the Agricultural Conservation Easement 
Program (ACEP), the Regional Conservation Partnership Program (RCPP), 
the Rural Energy for America Program (REAP), and the Conservation 
Stewardship Program (CSP) are all tools that can assist farmers in 
achieving climate resiliency, however, many of our farmers are not 
using these programs. Only 46% of our national survey respondents 
reported using Federal programs, and first-generation farm owners in 
particular were less likely to have used Federal programs.\5\ The 
number one reason cited by our farmers is that they're not using these 
programs because they do not know about them--a sentiment that has been 
echoed over and over again. The USDA must expand accessibility by 
prioritizing the design and modification of new and existing programs 
that resource farmers and encourage a new generation of farmers to 
fight climate change. Intentional outreach must also take place, and 
this outreach will require resources and trust-building.\6\
---------------------------------------------------------------------------
    \5\ Sophie Ackoff, et al., ``Building a Future with Farmers II,''  
November 2017, https://www.youngfarmers.org/resource/building-a-future-
with-farmers-ii/.
    \6\ National Young Farmers Coalition, ``2021 Climate Policy 
Recommendations,''  May 2021, https://www.youngfarmers.org/2021/05/
2021-climate-recommendations/.
---------------------------------------------------------------------------
    Time and administrative burdens were also reported to be a 
significant barrier to accessing these programs.\7\ In addition to farm 
work, many of our farmers have other concurrent responsibilities--
supplemental jobs, caretaking, education, etc.--and do not have the 
time or bandwidth to spend on laborious application processes. There is 
also the perception among young farmers that these programs were not 
made for them, and therefore are not appropriate for their operations. 
Young farmers are operating small, diversified farms, and many have 
stated that they do not feel as if these farm bill programs will work 
for them. USDA officials and technical assistance providers often lack 
the cultural competency to advise young farmers because of the type of 
operations they run. To support the next generation of young farmers 
and ranchers, transition productive farmland, and revitalize our 
nation's rural communities, considerable progress must be made in the 
way that USDA serves young farmers.
---------------------------------------------------------------------------
    \7\ Sophie Ackoff, et al., ``Building a Future with Farmers II,''  
November 2017, https://www.youngfarmers.org/resource/building-a-future-
with-farmers-ii/.
---------------------------------------------------------------------------
    Recent efforts to improve EQIP and the Conservation Stewardship 
Program (CSP) will increase accessibility for young, marginalized 
farmers and are a step in the right direction,\8\ however more work 
needs to be done to fully enable farmers to invest in on-farm 
conservation. By increasing the transparency of programs that help 
historically underserved farmers and ranchers gain access to land and 
other government services, we can begin the important work of 
addressing the climate crisis and investing in a sustainable and 
resilient future with farmers leading the way.
---------------------------------------------------------------------------
    \8\ National Sustainable Agriculture Coalition, ``Release: NRCS 
Announces Improvements to CSP and EQIP,''  January 2022, https://
sustainableagriculture.net/blog/release-nrcs-announces-improvements-to-
csp-and-eqip/.
---------------------------------------------------------------------------
    Young Farmers would like to thank the Honorable David Scott, Glenn 
`GT' Thompson, Abigail Spanberger, and Doug LaMalfa for convening this 
hearing to discuss farm bill conservation programs. These programs are 
critical for combating climate change and improving access to land. We 
look forward to working with you to find ways to make these programs 
work for young, beginning, and BIPOC farmers.
            Sincerely,

Lotanna Obodozie,
Climate Campaign Director,
National Young Farmers Coalition.
                                 ______
                                 
   Submitted Statement by Lesli Allison, Executive Director, Western 
                          Landowners Alliance
    Chair Spanberger, Ranking Member LaMalfa, and Members of the 
Subcommittee, the Western Landowners Alliance (WLA) appreciates the 
opportunity to submit this statement on Farm Bill Conservation 
Programs. The Western Landowners Alliance is a landowner-founded, 
landowner-led nonpartisan organization that advances policies and 
practices that sustain working lands, connected landscapes and native 
species. Our members represent millions of acres of leased and deeded 
land across the West.
Background
    Every year we lose more farms and ranches to development. Those 
that remain are under increased pressure to provide not just food and 
fiber but a range of other public benefits such as wildlife habitat 
which can increase the cost of production. Farm bill programs represent 
an important public-private partnership that enables producers to 
provide these public benefits while remaining economically viable.
    WLA appreciates the efforts of Members of the Subcommittee in 
developing and passing the 2018 Farm Bill. Certain changes made to 
programs improved the availability of programs for farmers and ranchers 
throughout the West. For example, improvements to the Grasslands 
Conservation Reserve Program (GCRP), including expanded ranking 
criteria and adjusted payment rates, resulted in record-breaking 
signups, a win-win for producers and native grasslands.
    At the same time, this and other farm bill programs could be 
further refined and better implemented to support both agriculture and 
natural resource conservation in the region. Following GCRP signup 203, 
we surveyed our membership on their interest in the program and their 
experience enrolling. Based on the feedback we received, along with 
other first-hand experience with other USDA conservation programs, we 
offer the following general comments on farm bill conservation 
programs.
WLA Comments
Agency Capacity
    Landowners reported that internal communication challenges and 
capacity issues within the USDA hinder program delivery. Any discussion 
on successes and challenges of conservation programs must include a 
focus on increasing capacity of the agencies charged with implementing 
them. Providing the Natural Resources Conservation Service (NRCS) and 
the Farm Service Agency (FSA) with sufficient staffing and resources is 
key to effective implementation of conservation programs. Without 
adequate staffing, these agencies are unable to provide sufficient 
technical assistance, expertise and process enrollment applications. 
Beyond staff capacity, the issue of staff turnover and relocation was 
also cited as a considerable barrier to more effective implementation 
of farm bill programs in rural communities.
Program Complexity and Delivery
    Complexity of the enrollment and agreement processing also limits 
the efficacy of staff and serves as a barrier to entry for interested 
landowners. The amount of paperwork required to carry out programs 
should not be so cumbersome that staff do not have time to learn 
conservation programs or assist landowners in the field. Landowners 
reported being overwhelmed by the number of steps required to enroll, 
additional uncommunicated requirements after enrolling, and felt a lack 
of transparency around the process. Some of this likely stems from USDA 
capacity issues again, but it is clear that moving forward, program 
delivery and improved outreach to landowners is an essential component 
of improving farm bill conservation programs.
Resource Coordination
    Increased funding for Federal conservation programs will only do so 
much without a dedicated focus on simplifying the process for producers 
and exploring how to better leverage the capacity of trusted, local 
leaders to conduct community outreach and assist producers in 
navigating the suite of conservation programs offered. To improve 
program delivery, and increase outcomes for producers and the resource, 
USDA should explore placing jointly-funded, dedicated ``resource 
coordinator'' staff positions within community-based organizations. 
Coordinators would be trained experts, providing capacity for outreach 
as well as an informative, time-saving point of contact for landowners. 
They would be knowledgeable on a wide range of USDA programs, but also 
familiar and able to work across state and Federal departments and 
jurisdictions to help align interagency expertise, priorities and 
funding. This approach would provide for greater coordination, 
efficiency, cost-savings and more effective utilization of Federal 
funding while also increasing local capacity for collaborative 
conservation.
Rewarding Biodiversity Stewardship
    The cost of at-risk species conservation and listed species 
recovery efforts is often disproportionately placed on farmers and 
ranchers. Species displaced by land development, resource extraction or 
other activities often find safe harbor on private lands. Recent 
improvements to GCRP are a powerful step in the right direction toward 
the farm bill better recognizing this, particularly with refinement in 
the areas above. The Working Lands for Wildlife program also 
effectively advances proactive, collaborative conservation on private 
land and warrants additional funding as threats to biodiversity mount.
Conclusion
    WLA appreciates the opportunity to submit this statement. The 2018 
Farm Bill took significant strides forward in advancing WLA priorities 
addressed above. We look forward to working with you to continue to 
improve conservation program accessibility and practicality for western 
working lands. This work is imperative if we are to combat threats such 
as climate change, habitat fragmentation and biodiversity loss while 
ensuring economic viability of producers and rural communities.
                                 ______
                                 
    Submitted Statement by Colin O'Neil, Legislative Director; Anne 
       Schechinger, Midwest Director, Environmental Working Group
    To avoid the worst effects of climate change, we must swiftly 
reduce greenhouse gas emissions from agriculture. But a small fraction 
of Department of Agriculture conservation spending flows to practices 
that reduce greenhouse gas emissions, and the reforms included in the 
2018 Farm Bill have done little to make these practices a priority.
    To address the climate crisis, Congress must quickly enact the 
Build Back Better Act, which includes $27 billion for conservation 
practices that reduce greenhouse gas emissions, and must fundamentally 
reform the Environmental Quality Incentives Program (EQIP), 
Conservation Stewardship Program (CSP), Conservation Reserve Program 
(CRP), and other voluntary conservation programs to make the reduction 
of emissions as well as long-term and permanent storage of carbon the 
focus of these programs.
    Structural practices designed to boost farm income--such as 
irrigation pipelines, manure lagoons, roofs and roads--should not be 
financed through conservation programs.
    Agriculture is not only one of the biggest sources of water 
pollution in the United States, impairing drinking water \1\ for 
millions of Americans and contributing to toxic algae blooms and 
hypoxic dead zones. Agriculture is also a significant and growing 
source \2\ of greenhouse gas emissions that, if left unaddressed, will 
jeopardize our efforts to avoid a climate crisis. In particular, 
nitrous oxide \3\ emissions from fertilizing crops and animal feed, and 
the methane \4\ emissions from livestock and their manure, are growing 
sources of greenhouse gas emissions. Carbon dioxide from tilling fields 
is also important to agriculture's emissions footprint. Unless we 
reduce nitrous oxide, carbon dioxide and methane emissions from 
agriculture, we will fail to make the greenhouse gas reductions needed 
\5\ to avoid the worst impacts of climate change.
---------------------------------------------------------------------------
    \1\ https://www.ewg.org/news-insights/news/midwest-farm-states-
nitrate-pollution-tap-water-more-likely-lower-income.
    Editor's note: footnotes annotated with  are retained in Committee 
file.
    \2\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/#agriculture/
entiresector/allgas/category/all.
    \3\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/#iallsectors/
allsectors/nitrousoxide/invent
sect/all.
    \4\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/#iallsectors/
allsectors/methane/invent
sect/all.
    \5\ https://www.science.org/doi/10.1126/
science.aba7357?url_ver=Z39.88-
2003𝔯_id=ori:rid:crossref.org𝔯_dat=cr_pub%20%200pubmed.
---------------------------------------------------------------------------
    Voluntary conservation programs administered by the USDA could play 
a significant role in reducing the impacts of farm pollution, reducing 
greenhouse gas emissions, and mitigating the effects of climate change.
    But many farmers are turned away by USDA \6\ when they apply to 
participate in voluntary conservation programs, because the department 
lacks the resources to accommodate them. Last year, more than 100,000 
farmers were turned away \7\ by USDA from participating in its two 
flagship working lands conservation programs. What's more, most 
conservation funding flows to practices that fail to reduce emissions 
and actually increase emissions, in some cases.
---------------------------------------------------------------------------
    \6\ https://www.ewg.org/news-insights/news/2021/08/growing-farm-
conservation-backlog-shows-need-congress-spend-smarter.
    \7\ https://www.ewg.org/news-insights/news/2021/08/growing-farm-
conservation-backlog-shows-need-congress-spend-smarter.
---------------------------------------------------------------------------
    Congress must provide more resources for USDA's voluntary 
conservation programs and must ensure that conservation funds get 
directed toward the conservation practices that will reduce greenhouse 
gas emissions. The same practices that reduce nitrous oxide and methane 
emissions also improve air and water quality and make our farms better 
able to withstand the extreme weather caused by climate change.
    To address the climate crisis, the Committee should:
    (1) Make climate change the primary focus of conservation 
practices. Congress must significantly increase USDA resources targeted 
at reducing agricultural greenhouse gas emissions and increasing 
climate resiliency. The historic investments proposed in the Build Back 
Better Act would provide a once-in-a-generation opportunity to increase 
funding and target conservation investments in practices that reduce 
greenhouse gas emissions. Congress should look to the policy reforms in 
the Climate Stewardship Act introduced by Sen. Cory Booker (D-N.J.) and 
Rep. Abigail Spanberger (D-Va.) for additional guidance on climate 
investments and reform ideas.
    In the past year, USDA has taken steps to incorporate climate goals 
in its conservation programs, including, among other things, 
establishing a pilot program \8\ within EQIP for ``climate-smart'' 
agriculture and forestry practices in FY 2021; announcing a new 
initiative \9\ to finance the deployment of climate-smart agriculture 
and forestry practices; creating \10\ a new Climate-Smart Practice 
Incentive for general and continuous signups within CRP; and most 
recently releasing \11\ an updated list of climate-smart agriculture 
and forestry practices for CSP and EQIP for FY 2022 enrollment.
---------------------------------------------------------------------------
    \8\ https://directives.sc.egov.usda.gov/viewerFS.aspx?hid=46894.
    \9\ https://www.usda.gov/media/press-releases/2021/09/29/usda-
announces-3-billion-investment-agriculture-animal-health-and.
    \10\ https://www.fsa.usda.gov/news-room/news-releases/2021/usda-
announces-new-initiative-to-quantify-climate-benefits-of-conservation-
reserve-program.
    \11\ https://www.usda.gov/media/press-releases/2022/01/10/usda-
offers-expanded-conservation-program-opportunities-support.
---------------------------------------------------------------------------
    Although that is an important first step, much more must be done to 
ensure that existing conservation programs focus on climate goals and 
do not fund practices that exacerbate the climate crisis.
    For example:

   Many of the practices identified as ``priority practices'' 
        by states to be eligible for higher 90 percent cost share under 
        EQIP don't reduce greenhouse gas emissions, or they actually 
        increase emissions. (e.g., Agrichemical Handling Facility, 
        Livestock Pipeline and Well Decommissioning; see Appendix).

   Several practices eligible for enrollment in EQIP's 
        Conservation Incentive Contracts (CIC) [i] either do 
        not address greenhouse emissions or actually increase 
        emissions, as is the case with Surface Roughening and Short 
        Term Storage of Animal Waste and Byproducts (see 
        Appendix).[ii]
---------------------------------------------------------------------------
    \[i]\ The Conservation Incentive Contracts subprogram of EQIP was 
established by the 2018 Farm Bill. It provides NRCS with unique tools 
to address the most pressing resource challenges across the country, 
including addressing climate change through reducing agricultural 
greenhouse gas emissions and increasing carbon sequestration efforts. 
However, EWG analysis finds that in its current form, EQIP CIC does not 
meet the clear intent of Congress. When Congress passed the 2018 Farm 
Bill, the managers included clear guidance about how such a program 
should be implemented. Report language states that the managers 
anticipate incentive practices with ``broad resource benefits 
(including, but not limited to, cover crops, transition to resource-
conserving crop rotations, and incorporation of precision agriculture 
technologies into agriculture operations) will be available to 
producers within the program.''
    \[ii]\ Section 2304(b)(2) of the Agriculture Improvement Act of 
2018 allows states to identify ten highly effective conservation 
practices to be eligible for higher 90 percent cost-share payments 
through EQIP. Under current law, states are only allowed to offer 
higher 90 percent cost-sharing for new and beginning, veteran or 
socially disadvantaged farmers. All other producers are eligible for 
only up to 75 percent cost-sharing. Among other things, the 2018 Farm 
Bill Conference Report notes that the managers intend for the increased 
incentives to promote further adoption of these highly beneficial 
practices by producers in high priority watersheds.

   The list of climate-smart agriculture and forestry practices 
        identified within CSP fails to include bundles of enhancements 
        (e.g., Buffer Bundle, Crop Bundle #1--Precision Ag-No Till), 
        which consistently rank among the most effective conservation 
---------------------------------------------------------------------------
        activities eligible for CSP payments.

   Agricultural land easements do not require that producers 
        adopt any of the climate-smart agriculture and forestry 
        identified within EQIP or CSP as a condition of enrollment.

    (2) End or reduce support for practices that do not reduce 
pollution. USDA should fund only practices that provide clear public 
health benefits or are highly effective at addressing the most pressing 
resource concerns, such as reducing agricultural greenhouse gas 
emissions and protecting sources of drinking water from farm runoff.
    A number of conservation practices (e.g., Land Clearing and Deep 
Tillage) financed through EQIP actually contribute to the climate 
crisis, according to the government's own data (see Table 9 in 
Appendix).[iii] Meanwhile, other practices financed through 
EQIP and CSP provide little to no benefit to the environment or public 
health.
---------------------------------------------------------------------------
    \[iii]\ To assess the environmental benefits of EQIP practices, EWG 
used the Conservation Practice Physical Effects (https://
www.nrcs.usda.gov/wps/portal/nrcs/detail/national/technical/econ/tools/
?cid=nrcs143_009740) (CPPE) matrix--a tool NRCS uses in combination 
with other proprietary software to evaluate and rank the effectiveness 
of conservation activities in addressing specific causes of impairment 
(e.g., nutrients in surface water) within resource concerns (e.g., 
water quality). The CPPE scores how effective a practice is for 
addressing an impairment with ^5 meaning it makes it demonstrably 
worse, and +5 meaning it's highly effective. EWG added the scores each 
practice received across all 47 specific causes of impairment and 
created a total score. The highest EQIP practice, riparian forest 
buffer, received a 98. The lowest practice, land clearing, received a 
^22. EWG then gave each practice a rank from 1 to 166 for how well each 
practice scored.
---------------------------------------------------------------------------
    Many capital-intensive infrastructure improvements currently funded 
by conservation programs should instead be financed through an expanded 
conservation loan program. According to EWG analysis,\12\ historically, 
payments for high-cost structures, equipment or facilities appeared in 
38 percent of contracts but received 62 percent of EQIP payments.
---------------------------------------------------------------------------
    \12\ https://conservation.ewg.org/.
---------------------------------------------------------------------------
    Congress sought to incentivize the adoption of highly effective 
conservation practices through EQIP and CSP in 2018 Farm Bill. Although 
the Natural Resources Conservation Service (NRCS) has improved its 
implementation in the past year, EWG analysis finds that the practices 
eligible for higher cost-sharing or priority under EQIP often do not 
align with Congressional intent.
    In 2021, few states chose to include the highest ranking EQIP 
practices when choosing which ten practices would be eligible for 
higher 90 percent cost sharing. NRCS must provide clearer guidance or 
limits on the types of conservation practices that states can elect as 
being high priority practices for purposes of higher cost sharing (see 
Appendix).
    (3) Focus investments on long-term and permanent benefits. USDA 
must swiftly prioritize and expand the number of acres enrolled in 
long-term CRP contracts and permanent easements to reduce nitrous oxide 
emissions from fertilizer applications, protect drinking water supplies 
and ensure long-term storage of carbon in soils and biomass while 
reducing support for short-term land retirement contracts where 
benefits are fleeting.
    The 2018 Farm Bill included a number of reforms [iv] to 
prioritize long-term contracts within CRP, but much more needs to be 
done to prioritize longer-term contracts or permanent easements for 
environmentally sensitive lands and end the enrollment of prime 
farmland in short-term contracts. For instance, EWG analysis\13\ has 
found that millions of acres of land enrolled through 10 year general 
CRP contracts go back into production when the contracts expire or crop 
prices rise. When contracts expire and land is returned to farming, 
soil carbon is released into the atmosphere.
---------------------------------------------------------------------------
    \13\ https://www.ewg.org/research/retired-sensitive-cropland-here-
today-gone-tomorrow.
    \[iv]\ The 2018 Farm Bill established for the first time a minimum 
number of acres to be enrolled through the continuous categories of 
CRP, like CREP and new CLEAR Initiative. It also established a CLEAR30 
Pilot Program where producers could enroll eligible land for 30 year 
contracts. Unlike general CRP contracts, which pay farmers to convert 
large tracts of land to grass for 10 years and then return them to 
production, CLEAR30 will result in longer-lasting climate, 
environmental and public health benefits in watersheds that are 
significantly impacted by farm pollution, like the Western Lake Erie 
Basin and Chesapeake Bay.
---------------------------------------------------------------------------
    Although USDA has increased incentive payments for continuous CRP 
and water quality practices, the number of acres enrolled through high 
priority categories like Conservation Reserve Enhancement Program 
(CREP) stand \14\ roughly 500,000 acres less than they were a decade 
ago,\15\ and CLEAR30 enrollment accounts for less than one percent of 
total acres enrolled in Clean Lakes, Estuaries and Rivers (CLEAR). It 
is critical that we shift priorities within CRP from short-term 
contracts to temporarily restore farmland in favor of long-term or 
permanent restoration projects that will produce long-lasting benefits.
---------------------------------------------------------------------------
    \14\ https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/
Conservation/PDF/One
Pager%20December%202021%20CRP.pdf.
    \15\ https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/
Conservation/PDF/septone
pager0912.pdf.
---------------------------------------------------------------------------
    Finally, long-term contracts for working lands practices must focus 
on highly effective conservation activities with broad resource 
benefits. When Congress established EQIP CIC in the last farm bill, it 
anticipated that USDA would focus this longer-term, 5 to 10 year 
contract period on incentive practices with ``broad resource 
benefits.'' However, EWG analysis finds that too many practices 
eligible for incentive payments are one-time practices that do not 
deserve long-term contracts (e.g., Emergency Animal Mortality 
Management) or are more akin to on-farm projects a farmer would 
presumably fund themselves (e.g., Surface Roughening; see Appendix). 
Focusing on highly effective management and vegetative practices would 
be the most cost-effective way for NRCS to focus limited resources and 
meet Congressional expectations.
    EWG thanks the Subcommittee on Conservation and Forestry of the 
House Agriculture Committee for holding today's hearing reviewing the 
conservation programs authorized by the farm bill.
            Respectfully submitted on behalf of the Environmental 
            Working Group,

Colin O'Neil,
Legislative Director;

Anne Schechinger,
Midwest Director.
                                appendix

                                  Table 1. 20 Most Common HPP Offered by States
----------------------------------------------------------------------------------------------------------------
                                                                         Total CPPE   CPPE Rank
                                             Practice    No. of States   Score (98    (1 = best,      Address
                 Practice                      Code        Offering       highest,      166 =      Emissions of
                                                        Particular HPP  ^22 lowest)     worst)      GHGs (CPPE)
----------------------------------------------------------------------------------------------------------------
Riparian Forest Buffer                             391              21           98            1               3
Residue and Tillage Management, No-Till            329              19           57           17               4
Cover Crop                                         340              19           61           14               3
Nutrient Management                                590              16           57           18               4
Filter Strip                                       393              14           62           12               1
Riparian Herbaceous Cover                          390              13           75            9               2
Field Border                                       386              12           46           24               1
Prescribed Grating                                 528              12           78            7               2
Waste Storage Facility                             313              10           14          107              ^1
Conservation Crop Rotation                         328              10           54           20               1
Residue and Tillage Management, Reduced-           345               9           46           22               3
 Till
Conservation Cover                                 327               9           79            6               4
Upland Wildlife Habitat Management                 645               8           39           30               2
Pasture and Hay Planting                           512               8           41           28               4
Irrigation Water Management                        449               8           46           23               1
Forest Stand Improvement                           666               8           58           16               3
Tree/Shrub Establishment                           612               8           97            2               4
Wildlife Habitat Planting                          420               7           24           63               3
Streambank and Shoreline Protection                580               7           32           43               1
Prescribed Burning                                 338               7           38           33               2
----------------------------------------------------------------------------------------------------------------


                 Table 2. 20 Lowest Overal[l] Ranked HPP Offered by States According to the CPPE
----------------------------------------------------------------------------------------------------------------
                                                                         Total CPPE   CPPE Rank
                                             Practice    No. of States   Score (98    (1 = best,      Address
                 Practice                      Code        Offering       highest,      166 =      Emissions of
                                                        Particular HPP  ^22 lowest)     worst)      GHGs (CPPE)
----------------------------------------------------------------------------------------------------------------
Groundwater Testing                                355               1            0          160               0
Denitrifying Bioreactor                            605               5            2          157              ^1
Firebreak                                          394               3            2          156               1
Agrichemical Handling Facility                     309               5            3          155               0
Saturated Buffer                                   604               5            3          152               0
Structures for Wildlife                            649               2            7          145               0
Tree/Shrub Site Preparation                        490               1            8          142               0
Livestock Pipeline                                 516               2            9          137               0
Stream Crossing                                    578               4            9          134               0
Aquatic Organism Passage                           396               5           10          133               0
Salinity and Sodic Soil Management                 610               1           10          128               1
Water and Sediment Control Basin                   638               3           10          127               0
Well Decommissioning                               351               5           10          126               0
Animal Mortality Facility                          316               6           11          125               1
Energy Efficient Agricultural Operation            374               2           11          124               2
Waste Facility Closure                             360               1           11          122               1
Open Channel                                       582               1           12          120               0
Short-Term Storage of Animal Waste and             318               1           12          119              ^1
 Byproducts
Underground Outlet                                 620               4           13          115               0
Fence                                              382               6           14          112               1
----------------------------------------------------------------------------------------------------------------


                 Table 3. 20 Highest Overall Ranked HPP Offered by States According to the CPPE
----------------------------------------------------------------------------------------------------------------
                                                                         Total CPPE   CPPE Rank
                                             Practice    No. of States   Score (98    (1 = best,      Address
                 Practice                      Code        Offering       highest,      166 =      Emissions of
                                                        Particular HPP  ^22 lowest)     worst)      GHGs (CPPE)
----------------------------------------------------------------------------------------------------------------
Riparian Forest Buffer                             391              21           98            1               3
Tree/Shrub Establishment                           612               8           97            2               4
Windbreak/Shelterbelt Establishment and            380               2           87            4               4
 Renovation
Range Planting                                     550               3           80            5               3
Conservation Cover                                 327               9           79            6               4
Prescribed Grazing                                 528              12           78            7               2
Silvopasture                                       381               2           77            8               2
Riparian Herbaceous Cover                          390              13           75            9               2
Access Control                                     472               4           72           10               1
Filter Strip                                       393              14           62           12               1
Critical Area Planting                             342               7           62           13               1
Cover Crop                                         340              19           61           14               3
Forest Stand Improvement                           666               8           58           16               3
Residue and Tillage Management, No-Till            329              19           57           17               4
Nutrient Management                                590              16           57           18               4
Conservation Crop Rotation                         328              10           54           20               1
Residue and Tillage Management, Reduced-           345               9           46           22               3
 Till
Irrigation Water Management                        449               8           46           23               1
Field Border                                       386              12           46           24               1
Pest Management Conservation System                595               5           45           25               0
----------------------------------------------------------------------------------------------------------------


                    Table 4. EQIP Conservation Incentive Contracts List of Eligible Practices
----------------------------------------------------------------------------------------------------------------
                                                                                                   Emissions of
           FY 2022 EQIP Practice               Practice     EQIP CIC     Total CPPE   CPPE Rank     Greenhouse
                                                 Code       Practice       Score       (1-166)      Gases--GHGs
----------------------------------------------------------------------------------------------------------------
Amending Soil Properties with Gypsum                 333          Yes             9          141               0
 Products
Amendments for Treatment of Agricultural             591          Yes            33           42               1
 Waste
Anioic Polyacrylamide (PAM) Erosion Control          450          Yes            22           82               0
Bivalve Aquaculture Gear and Biofouling              400          Yes             7          146               0
 Control
Carbon Sequestration and Greenhouse Gas              218    Yes (New)
 Mitigation Assessment
Conservation Crop Rotation                           328          Yes            54           20               1
Cover Crop                                           340          Yes            61           14               3
Drainage Control Management                          554          Yes            23           79               1
Dust Control on Unpaved Roads and Surfaces           373          Yes             4          151               0
Early Successional Habitat Development Mgt.          647          Yes            16          101               0
Emergency Animal Mortality Management                368          Yes            10          130               1
Feed Management                                      592          Yes            30           47               4
Field Operations Emissions Reduction                 376          Yes            16          100               1
Fishpond Management                                  399          Yes            19           91               1
Forage Harvest Management                            511          Yes            23           78               0
Grazing Land Mechanical Treatment                    548          Yes            24           71               2
Irrigation Water Management                          449          Yes            46           23               1
Mulching                                             484          Yes            28           55               0
Nutrient Management                                  590          Yes            57           18               4
On-Farm Recharge                                     817    Yes (New)
Pest Management Conservation System (IPM)            595          Yes            45           25               0
Prescribed Burning                                   338          Yes            38           33               2
Prescribed Grazing                                   528          Yes            78            7               2
Residue and Tillage Management, No-Till              329          Yes            57           17               4
Residue and Tillage Management, Reduced-             345          Yes            46           22               3
 Till
Salinity and Sodic Soil Management                   610          Yes            10          128               1
Site Assessment for Soil Testing for                 207    Yes (New)
 Contaminants Activity
Soil Carbon Amendment                                808    Yes (New)
Soil Health Testing                                  216    Yes (New)
Surface Roughening                                   609          Yes            ^3          164              ^1
Upland Wildlife Habitat Management                   645          Yes            39           30               2
Waste Recycling                                      633          Yes            23           73               1
Wetland Wildlife Habitat Management                  644          Yes            25           61               1
----------------------------------------------------------------------------------------------------------------


                   Table 5. EQIP CIC Practices Ranked Lowest to Highest According to the CPPE
----------------------------------------------------------------------------------------------------------------
                                                                                                   Emissions of
           FY 2022 EQIP Practice               Practice     EQIP CIC     Total CPPE   CPPE Rank     Greenhouse
                                                 Code       Practice       Score       (1-166)      Gases--GHGs
----------------------------------------------------------------------------------------------------------------
Surface Roughening                                   609          Yes            ^3          164              ^1
Dust Control on Unpaved Roads and Surfaces           373          Yes             4          151               0
Bivalve Aquaculture Gear and Biofouling              400          Yes             7          146               0
 Control
Amending Soil Properties with Gypsum                 333          Yes             9          141               0
 Products
Emergency Animal Mortality Management                368          Yes            10          130               1
Salinity and Sodic Soil Management                   610          Yes            10          128               1
Early Successional Habitat Development/Mgt.          647          Yes            16          101               0
Field Operations Emissions Reduction                 376          Yes            16          100               1
Fishpond Management                                  399          Yes            19           91               1
Anionic Polyarcylamide (PAM) Erosion                 450          Yes            22           82               0
 Control
Drainage Water Management                            554          Yes            23           79               1
Forage Harvest Management                            511          Yes            23           78               0
Waste Recycling                                      633          Yes            23           73               1
Grazing Land Mechanical Treatment                    548          Yes            24           71               2
Wetland Wildlife Habitat Management                  644          Yes            25           61               1
Mulching                                             484          Yes            28           55               0
Feed Management                                      592          Yes            30           47               4
Amendments for Treatment of Agricultural             591          Yes            33           42               1
 Waste
Prescribed Burning                                   338          Yes            38           33               2
Upland Wildlife Habitat Management                   645          Yes            39           30               2
Pest Management Conservation System (IPM)            686          Yes            45           25               0
Irrigation Water Management                          449          Yes            46           23               1
Residue and Tillage Management, Reduced-             345          Yes            46           22               3
 Till
Conservation Crop Rotation                           328          Yes            54           20               1
Nutrient Management                                  590          Yes            57           18               4
Residue and Tillage Management, No-Till              329          Yes            57           17               4
Cover Crop                                           340          Yes            61           14               3
Prescribed Grazing                                   528          Yes            78            7               2
Carbon Sequestration and Greenhouse Gas              218    Yes (New)
 Mitigation Assessment
On-Farm Recharge                                     817    Yes (New)
Site Assessment for Soil Testing for                 207    Yes (New)
 Contaminants Activity
Soil Carbon Amendment                                808    Yes (New)
Soil Health Testing                                  216    Yes (New)
----------------------------------------------------------------------------------------------------------------


 Table 6. EQIP CIC Practices in Order of Most Effective to Least Effective for Addressing GHG Emissions in CPPE
----------------------------------------------------------------------------------------------------------------
                                                                                                   Emissions of
           FY 2022 EQIP Practice               Practice     EQIP CIC     Total CPPE   CPPE Rank     Greenhouse
                                                 Code       Practice       Score       (1-166)      Gases--GHGs
----------------------------------------------------------------------------------------------------------------
Feed Management                                      592          Yes            30           47               4
Nutrient Management                                  590          Yes            57           18               4
Residue and Tillage Management, No-Till              329          Yes            57           17               4
Residue and Tillage Management, Reduced-             345          Yes            46           22               3
 Till
Cover Crop                                           340          Yes            61           14               3
Grazing Land Mechanical Treatment                    548          Yes            24           71               2
Prescribed Burning                                   338          Yes            38           33               2
Upland Wildlife Habitat Management                   645          Yes            39           30               2
Prescribed Grazing                                   528          Yes            78            7               2
Emergency Animal Mortality Management                368          Yes            10          130               1
Salinity and Sodic Soil Management                   610          Yes            10          128               1
Field Operations Emissions Reduction                 376          Yes            16          100               1
Fishpond Management                                  399          Yes            19           91               1
Drainage Water Management                            554          Yes            23           79               1
Waste Recycling                                      633          Yes            23           73               1
Wetland Wildlife Habitat Management                  644          Yes            25           61               1
Amendments for Treatment of Agricultural             591          Yes            33           42               1
 Waste
Irrigation Water Management                          449          Yes            46           23               1
Conservation Crop Rotation                           328          Yes            54           20               1
Dust Control on Unpaved Roads and Surfaces           373          Yes             4          151               0
Bivalve Aquaculture Gear and Biofouling              400          Yes             7          146               0
 Control
Amending Soil Properties with Gypsum                 333          Yes             9          141               0
 Products
Early Successional Habitat Development/Mgt.          647          Yes            16          101               0
Anionic Polyacrylamide (PAM) Erosion                 450          Yes            22           82               0
 Control
Forage Harvest Management                            511          Yes            23           78               0
Mulching                                             484          Yes            28           55               0
Pest Management Conservation System (IPM)            595          Yes            45           25               0
Surface Roughening                                   609          Yes            ^3          164              ^1
Carbon Sequestration and Greenhouse Gas              218    Yes (New)
 Mitigation Assessment
On-Farm Recharge                                     817    Yes (New)
Site Assessment for Soil Testing for                 207    Yes (New)
 Contaminants Activity
Soil Carbon Amendment                                808    Yes (New)
Soil Health Testing                                  216    Yes (New)
----------------------------------------------------------------------------------------------------------------


Table 7. EQIP Climate-Smart Agriculture and Forestry Practices in Order of Most Effective to Least Effective for
                                 Addressing GHG Emissions According to the CPPE
----------------------------------------------------------------------------------------------------------------
                                                          USDA Climate-
                                               Practice    Smart Ag &    Total CPPE   CPPE Rank    Emissions of
           FY 2022 EQIP Practice                 Code       Forestry       Score       (1-166)      Greenhouse
                                                            Practice                                Gases--GHGs
----------------------------------------------------------------------------------------------------------------
Anaerobic Digester                                   366          Yes            13          118               4
Conservation Cover                                   327          Yes            79            6               4
Nutrient Management                                  590          Yes            57           18               4
Residue and Tillage Management, No-Till              329          Yes            57           17               4
Tree/Shrub Establishment                             612          Yes            97            2               4
Windbreak/Shelterbelt Establishment and              380          Yes            87            4               4
 Renovation
Cover Crop                                           340          Yes            61           14               3
Range Planning                                       550          Yes            80            5               3
Residue and Tillage Management, Reduced-             345          Yes            46           22               3
 Till
Riparian Forest Buffer                               391          Yes            98            1               3
Alley Cropping                                       311          Yes            94            3               2
Herbaceous Wind Barriers                             603          Yes            29           52               2
Prescribed Grazing                                   528          Yes            78            7               2
Riparian Herbaceous Cover                            390          Yes            75            9               2
Silvopasture                                         381          Yes            77            8               2
Upland Wildlife Habitat Management                   645          Yes            39           30               2
Conservation Crop Rotation                           328          Yes            54           20               1
Contour Buffer Strips                                332          Yes            20           86               1
Field Border                                         386          Yes            46           24               1
Filter Strip                                         393          Yes            62           12               1
Grassed Waterway                                     412          Yes            44           26               1
Hedgerow Planting                                    422          Yes            31           45               1
Irrigation Water Management                          449          Yes            46           23               1
Land Reclamation, Abandoned Mined Land               543          Yes            54           19               1
Land Reclamation, Currently Mined Land               544          Yes            53           21               1
Multi-Story Cropping                                 379          Yes            64           11               1
Waste Separation Facility (no)                       632          Yes            28           54               1
Land Reclamation, Landslide Treatment                453          Yes            36           35               0
Mulching                                             484          Yes            28           55               0
Stripcropping                                        585          Yes            25           62               0
----------------------------------------------------------------------------------------------------------------


                             Table 8. EQIP Practices with Negative Scores for Addressing GHG Emissions According to the CPPE
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            USDA Climate-                   High
                                                 Practice    Smart Ag &     EQIP CIC      Priority      EWG-CSAF      Total    CPPE Rank   Emissions of
            FY 2022 EQIP Practice                  Code       Forestry        Code        Practices     Proposed       CPPE      (1-166)    Greenhouse
                                                              Practice                    (Top 10)        List        Score                 Gases--GHGs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Waste Treatment Lagoon                                 359                                                                 19         87              ^3
land Clearing                                          460                                                                ^21        166              ^1
Surface Rougening                                      609                        Yes                                      ^3        164              ^1
Denitrifying Bioreactor                                605                                      Yes                         2        157              ^1
Deep-Tillage                                           324                                                                  8        143              ^1
Recreation Land Improvement Protection                 566                                                                  9        136              ^1
Short-Term Storage of Animal Waste and                 318                                                    Yes          12        119              ^1
 Byproducts
Waste Storage Facility                                 313                                                    Yes          14        107              ^1
Precision Land Forming and Smoothing                   462                                                                 29         51              ^1
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                         Table 9. 10 Overall Lowest Ranked EQIP Practices According to the CPPE
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            USDA Climate-                   High
                                                 Practice    Smart Ag &     EQIP CIC      Priority      EWG-CSAF      Total    CPPE Rank   Emissions of
            FY 2022 EQIP Practice                  Code       Forestry        Code        Practices     Proposed       CPPE      (1-166)    Greenhouse
                                                              Practice                    (Top 10)        List        Score                 Gases--GHGs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Land Clearing                                          460                                                                ^21        166              ^1
Fuel Break                                             383                                                                 ^3        165               1
Surface Rougening                                      609                        Yes                                      ^3        164              ^1
High Tunnel System                                     325                                                                 ^2        163               0
Aquaculture Ponds                                      397                                                                 ^1        162               0
Vertical Drain                                         630                                                                 ^1        161               0
Groundwater Testing                                    355                                      Yes                         0        160               0
Irrigation Canal or Lateral                            320                                                                  0        159               0
Monitoring Well                                        353                                                                  0        158               0
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                 ______
                                 
                          Submitted Questions
Questions Submitted by Hon. Chellie Pingree, a Representative in 
        Congress from Maine
Response from Terry Cosby, Chief, Natural Resources Conservation 
        Service, U.S. Department of Agriculture
    Question 1. Following up on our discussion at the hearing, can you 
provide an update on the interim soil carbon amendment practice (808)? 
Where has it been authorized for use to date? Where has it been 
implemented so far?
    Answer. NRCS is in the process of revising the Soil Carbon 
Amendment Conservation Practice Standard for publication in the 
National Handbook of Conservation Practices. The practice has been an 
interim practice under code 808 since FY20. When it becomes a national 
practice standard, it will be given a new practice code number. A final 
national practice standard is expected to be available to all states in 
FY23.
    All states currently have the option to make available the interim 
practice, and 22 states have adopted the interim practice (808) in 
FY22. From FY20-22 the practice has been installed on 2,150 acres 
primarily in CA and UT. For FY22-25 the interim is planned on 34,000 
acres across AR, CA, CO, CT, DE, ID, IN, MA, MT, NE, NH, NJ, NY, OR, 
PIA, UT, WY, and VT.

    Question 2. There has been a lot of discussion about the need for 
additional technical assistance to help farmers adopt climate-smart 
practices. One specific area where I've heard a need is additional 
technical assistance and support for organic production systems. What 
can NRCS do to expand technical assistance for organic operations and 
farms transitioning to organic production? How can NRCS increase 
organic literacy for NRCS staff on the ground?
    Answer. Conservation financial and technical assistance plays a 
critical role in supporting certified organic producers and producers 
transitioning to organic production.
    Organic Technical Assistance: NRCS provides technical assistance 
(TA) through the Conservation Technical Assistance (CTA) program prior 
to providing financial assistance funding (FA) for conservation program 
funding. NRCS follows a nine-step conservation planning process that 
identifies the producer's conservation objectives and assesses and 
analyzes the natural resources issues on the land related to soil, 
water, animals, plants, air, energy, and human interaction while 
considering the resources the producer has available. The plan offers 
alternatives, documents decisions, records progress and tracks 
successful completion of conservation practices and systems, and 
provides guidance and direction for continued maintenance once 
established. NRCS is continuing to explore and expand innovative 
opportunities to provide technical assistance to farmers transitioning 
to organic.
    EQIP and CSP Organic Initiative: Producers who are exempt, in 
transition, or organic may apply for funds through the Environmental 
Quality Incentives Program (EQIP) National Organic Initiative (NOI) and 
compete in separate NOI funding pools. Exempt, in-transition, or 
organic producers may also apply for assistance through any of the EQIP 
funding pools that they are eligible for and are not limited to EQIP 
NOI. The benefit of other EQIP funding pools is the increased payment 
limitation of $450K versus the $140K for the NOI.
    The Conservation Stewardship Program (CSP) has specific statutory 
language requiring NRCS to provide funding to states to support organic 
production and transition to organic production based on the number of 
certified and transitioning organic operations, and the number of acres 
of certified and transitioning organic production, within a state. In 
FY 2022, NRCS set aside $13.7M for CSP assistance for organic 
production and transition.
    Training: NRCS developed a new training course ``Working 
Effectively with Organic Producers'' and had a very effective virtual 
rollout in FY 2021. Delivered 16 sessions to 650 participants. For 
organic producers, NRCS has an organic team to provides direction, 
training and tools for states to help with outreach and delivery at the 
local level. NRCS also has a team of organic champions available to 
help NRCS staff help producers who are interested in transitioning, or 
are in transition, or are already organic, to learn about NRCS programs 
and the types of assistance that are available.
    There are several actions that NRCS has taken and will continue to 
do to increase organic literacy for our field staff, including:

   Provide leadership communications on the importance of 
        assisting organic producers

   Encourage staff to complete the new Working Effectively with 
        Organic Producers course

   Set performance goals for assisting organic/transitioning 
        producers

   Reward employees for outstanding delivery of services

   Encourage attendance at organic agricultural events

   Encourage mentorship relationships with organic farmers

   Encourage establishing working relationships with organic 
        certifiers

   Require each State Organic Champion to be an official co-
        lateral duty

   Provide more permanent staff for direct support to organic 
        producers

    In addition, other USDA agencies, such as the Agricultural 
Marketing Service (AMS), are also working to develop new opportunities 
to better support U.S. producers interested in transitioning to organic 
production. As you have heard firsthand from producers in your state, 
our data from the National Agricultural Statistics Service backs it up 
that the number of non-certified organic farms actively transitioning 
to organic production has dropped by nearly 71 percent since 2008.


 
                     A 2022 REVIEW OF THE FARM BILL

               (COMMODITY GROUP PERSPECTIVES ON TITLE I)

                              ----------                              


                         TUESDAY, MARCH 1, 2022

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: Representatives David Scott of Georgia, 
Costa, Adams, Spanberger, Hayes, Delgado, Brown, Rush, Pingree, 
Sablan, Kuster, Bustos, O'Halleran, Carbajal, Khanna, Lawson, 
Correa, Craig, Harder, Axne, Schrier, Panetta, Bishop, 
Thompson, Austin Scott of Georgia, Crawford, DesJarlais, 
LaMalfa, Davis, Allen, Rouzer, Kelly, Bacon, Johnson, Baird, 
Jacobs, Balderson, Cloud, Mann, Feenstra, Miller, Moore, 
Cammack, Fischbach, and Letlow.
    Staff present: Lyron Blum-Evitts, Carlton Bridgeforth, 
Prescott Martin III, Ashley Smith, Joshua Tonsager, Patricia 
Straughn, Trevor White, Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. The hearing will come to order. Ladies and 
gentlemen, I would like to start our hearing with a prayer for 
one of our distinguished Members who passed away, Jim Hagedorn. 
Won't you join me in standing?
    Dear Heavenly Father, we come before your throne of grace 
to say thank you. We thank you for sending our friend, Jim 
Hagedorn of Minnesota, our way, and Dear Heavenly Father, we 
respectfully ask and humbly ask that you put your arms and your 
hands of your loving comfort around his family, his wife, 
Jennifer, and also, Dear God, around the wonderful people from 
Minnesota who sent Jim to Congress. We are so grateful. Jim 
Hagedorn fought a good fight. He finished his course, and Dear 
God, Jim Hagedorn kept the faith. And I know now that you have 
put that crown of righteousness on his head. Dear Heavenly 
Father, Jim Hagedorn played a pivotal role and did great work 
for agriculture, which he loved dearly. And so, Dear Heavenly 
Father, we thank you for sending Jim Hagedorn our way. Amen.
    Okay. Thank you all, and I welcome you for joining us 
today. Today's hearing is entitled, A 2022 Review of the Farm 
Bill: Commodity Group Perspectives on Title I. After brief 
opening remarks, Members will receive testimony from our 
witnesses today, and then the hearing will be open to 
questions. I will start with my opening statement.
    I want to, again, say good morning to everyone, and thank 
you for joining us. We have some very distinguished panelists 
who will give us great perspectives from our commodity groups, 
on the commodity title programs in our 2018 Farm Bill. And I am 
pleased to have this distinguished panel of nine 
representatives from a variety of national commodity 
associations. In particular, I am also proud to say that we 
have two farmers from my home State of Georgia testifying this 
morning who are representing our important cotton and peanut 
industries. Georgia is number one in the country for peanut 
production and number two for cotton production.
    I know several of the organizations our witnesses represent 
will be convening at Commodity Classic next week, which is an 
important venue for our policy discussions. And I know that you 
all will be working hard throughout this year, developing 
recommendations for the next farm bill.
    Today's hearing is an important opportunity for us to, 
first of all, reflect on our commodity programs in our 2018 
Farm Bill and gather input from key stakeholders on what is 
working and what is not working for our wonderful farmers 
across our nation. And to all of our witnesses, I appreciate 
you taking the time to join us today for what I am sure will be 
a very informative hearing. Thank you all again for coming.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning and thank you to everyone for joining us today as we 
gather perspectives from commodity groups on the Commodity Title 
programs in the 2018 Farm Bill.
    I am pleased to have this distinguished panel of nine 
representatives from a variety of national commodity associations.
    In particular, I am proud to say that we have two farmers from my 
home state of Georgia testifying this morning who are representing our 
important cotton and peanut industries. Georgia is number one in the 
country for peanut production and number two for cotton production.
    I know several of the organizations our witnesses represent will be 
convening at Commodity Classic next week, which is an important venue 
for policy discussions. And I know that you all will be working hard 
throughout this year developing recommendations for the next farm bill.
    Today's hearing is an important opportunity for us to reflect on 
commodity programs in the 2018 Farm Bill and gather input from key 
stakeholders on what is working and is not working for farmers across 
the country.
    To all of our witnesses, I appreciate you taking the time to join 
us today for what I am sure will be an informative hearing. Thank you 
all again.
    With that, I now yield to the distinguished Ranking Member, the 
gentleman from Pennsylvania, Mr. Thompson, for any opening remarks he 
would like to give.

    The Chairman. And with that, I now would like to welcome 
our distinguished Ranking Member, the gentleman from 
Pennsylvania, Mr. Thompson, for his opening remarks.

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

    Mr. Thompson. Well, Mr. Chairman, thank you very much.
    Before we begin, I would like to take a brief moment to 
echo Chairman Scott and send my thoughts and prayers to the 
family and staff of our late friend and colleague, 
Representative Jim Hagedorn. Jim was a tireless advocate on 
behalf of our nation's farmers, ranchers, producers, and 
foresters, and his love for this Committee and rural America 
will not soon be forgotten. I consider myself blessed to call 
Jim a dear friend, and I am honored to have known him and 
worked alongside him. I send my heartfelt condolences and 
prayers to his entire family and staff during this time of 
significant loss. Our hearts are with you.
    Chairman Scott, thank you for convening this hearing today, 
and giving the Members of this Committee the opportunity to 
hear directly from these representatives of the commodity 
organizations regarding Title I of the farm bill. We have 19 
months before the 2018 Farm Bill expires, but before we can 
begin thinking about the 2023 reauthorization, we must first 
have a thorough understanding of how current policy is 
performing, and we kick that audit process off here today.
    I want to thank the witnesses who agreed to participate in 
this hearing, as well as the organizations they represent. 
Unfortunately, in the past, we have seen what can happen to the 
farm bill when there is divisiveness and a lack of consensus 
among key stakeholders, such as during the process leading up 
to the 2014 Farm Bill, which ultimately took over 3 years and a 
lot of ups and downs before it was enacted. Compare that to the 
2018 Farm Bill, which may have been tumultuous at times, but it 
marked the first time in almost 30 years that a farm bill was 
introduced in both chambers and enacted into law within 1 
calendar year. Plus, the conference report was passed by a 
record margin in both the House and the Senate.
    From my perspective, the key difference that led to the 
success in the 2018 Farm Bill was that the commodity 
organizations were all rowing in the same direction. During the 
development of the 2023 Farm Bill, there may be some 
differences of opinion along the way, but I am hopeful and I 
challenge all of our key stakeholders to make sure that they 
are unified as we fight back against the critics of farm 
policy. Our farmers are the lifeblood of the rural economy, and 
having a reliable domestic source for food is a matter of 
national security. Yet those who are not involved in 
agriculture likely don't comprehend the enormous risks that our 
farmers and ranchers take on year in and year out to ensure 
that there is food on the shelves. The disruptions from the 
COVID-19 pandemic opened many Americans' eyes to the importance 
of reliable food production, and while for the average consumer 
things may have somewhat returned to normal, for our farmers, 
it is anything but. They are facing unprecedented disruptions 
in the supply chain for critical inputs, skyrocketing energy 
costs, and difficulty transporting their commodities. Though 
there is no silver bullet, the safety net is intended to help 
absorb some of the risks our farmers face.
    I look forward to an honest conversation about how Title I 
is performing in that regard. I hope the Members of this 
Committee walk away from this hearing with a thorough 
understanding of what is working and what needs improving. The 
path to success in any farm bill reauthorization begins on the 
front end with hearings like this. The primary responsibility 
of the organizations represented here is to provide the key 
input Congress needs to get the policy right. Each farm bill is 
different and each one comes with its own unique challenges. It 
is critical at this stage of the game for stakeholders to give 
us an honest assessment of where we stand, and moving forward 
to focus on developing the safety net our producers need, 
rather than trying to dictate the process.
    So, I would like to, again, thank our witnesses here today, 
and I look forward to working with each of you and the 
organizations you represent. Thank you, Mr. Chairman, and I 
yield back.
    The Chairman. Thank you, Ranking Member.
    And now, I am very pleased to recognize the Chair of our 
General Farm Commodities and Risk Management Subcommittee, the 
gentlewoman from Illinois, Mrs. Bustos, for any opening remarks 
she would like to make.

  OPENING STATEMENT OF HON. CHERI BUSTOS, A REPRESENTATIVE IN 
                     CONGRESS FROM ILLINOIS

    Mrs. Bustos. All right. Thank you very much, Mr. Chairman, 
and I also want to thank the Ranking Member for allowing me to 
offer some very short opening remarks about this important 
hearing.
    As the Chair of the Subcommittee with jurisdiction over 
Title I programs, I think this hearing is an important 
component for the work that our full Committee is undertaking 
so that we understand what is working and what is not working 
with our commodity programs so Congress is able to make 
informed decisions as we head into the next farm bill 
reauthorization process.
    Last month, our Subcommittee had the opportunity to hear 
from, and then engage with, Under Secretary Robert Bonnie on 
the state of farm policy, and we were able to hear his 
perspectives on USDA's implementation of farm bill programs, 
and on other very important work that the Department has done 
so it can continue to support farmers over the past year and 
into the future. The input combined with the testimony that we 
will hear this morning from our national commodity associations 
really is key to our oversight work, and I am looking forward 
to the input from our witnesses this morning, and also having a 
continued dialogue with each of our witnesses as we move 
forward.
    Thank you very much to our witnesses for your testimony 
today, and I look forward to your input about how our existing 
commodity programs are working.
    Thank you, Mr. Chairman, and I will yield back.
    The Chairman. Thank you, Chair Bustos.
    And now, I am also pleased to recognize the Ranking Member 
of our General Farm Commodities and Risk Management 
Subcommittee, my friend from Georgia, Mr. Austin Scott, for any 
opening remarks he may have.

  OPENING STATEMENT OF HON. AUSTIN SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    Mr. Austin Scott of Georgia. Thank you, Chairman Scott, and 
thank you to the witnesses that are here before us today. 
Before I go into my opening statement, I want to point out that 
I dug deep into my closet to find the closest colors I had in 
support of the Ukraine today. I see Chair Bustos did as well, 
and certainly, our thoughts and prayers go out to President 
Zelenskyy and the Ukrainian people who are doing a tremendous 
job of fighting the Russians and the arcane person who is in 
charge of that country, Vladimir Putin. I think one of the 
things that the world is about to realize, unfortunately, is 
just how important the food supply is around the world. I think 
that over the next several weeks, we will probably see a 
tremendous number of human beings that will be starving because 
of the actions of one sick individual.
    As Ranking Member of the General Farm Commodities and Risk 
Management Subcommittee, I am particularly looking forward to 
taking a deep dive into the policies within Title I of the farm 
bill. I am looking forward to working with Chair Bustos and the 
full Committee leadership for the remainder of this Congress. I 
am hopeful that the work we do this year will set us up for 
success in delivering an on-time reauthorization in 2023. Many 
of us are fortunate enough to represent rural districts. We get 
the opportunity to interact with farmers back home, and yet, 
even still the producers and the risks that they take each year 
are hard to fathom. It takes a special individual to be willing 
to borrow more money than the average American will borrow in 
their lifetime just to plant seed in the ground and hope to 
make a crop and pay it off. For them, farming isn't just an 
occupation. It is their heritage, their livelihood, and a way 
of life.
    Title I is meant to provide a base level of assistance when 
times are tough and prices fall so that farmers can survive to 
the next year. Yet, as we look back over the past several 
years, I am concerned with how much we have had to rely on 
assistance outside of the farm bill to help our farmers. 
Natural disasters, retaliatory tariffs, and the coronavirus 
pandemic are a few of the things that come to mind. These 
events, we weren't able to see them coming, but I hope we can 
have a conversation here today, going forward, about what 
improvements we can make to the safety net to provide farmers 
more certainty in the face of these kinds of events.
    If you dig into the Census of Agriculture, there is a 
statistic that underscores the importance of getting these 
policies right. There are only 239,000 operations in this 
country that generate over $250,000 or more in sales. That is 
sales, Mr. Chairman, not income. In my district, it would 
probably take about 300 acres of cotton to hit that number. Of 
those 239,000 farm operations, just 12 percent produce about 90 
percent of all of our food supply. I am going to say that 
again: 239,000 operations in this country, 12 percent of the 
farms generate 90 percent of the food supply for our country 
and what we export. Those are still by and large family farm 
operations that have had to expand to offset reducing margins. 
That underscores just how important a working farm safety net 
is. If things go south, some of those farm operations start to 
get out of the business of agriculture, we could see 
significant impacts on our food and fiber production.
    Today's hearing is a vital examination of where we stand 
today, and the start of a conversation about where farm policy 
needs to be in the future. Mr. Chairman, before I thank you one 
last time for this hearing, I want to also mention the impact 
of bad tax policy on our family farms. Eliminating stepped-up 
basis and increases in the estate tax will be devastating to 
America's farm families and America's food supply.
    Mr. Chairman, thank you again. Thank you to the witnesses 
here today. I look forward to hearing from each of you and 
working with each of you in the groups, and I hope that you 
will all pray for President Zelenskyy, the Ukrainian people, 
and those who are out there fighting for freedom hour by hour.
    The Chairman. Thank you, Ranking Member Scott.
    And now, the chair would request that other Members submit 
their opening statements for the record so witnesses may begin 
their testimony, and to ensure that we have ample time to make 
sure we answer all questions.
    And now, it is my deep pleasure to introduce our panelists 
and witnesses for today, and to introduce our first witness, I 
would like to yield to our colleague from Arkansas, Mr. 
Crawford.
    Mr. Crawford. Thank you, Mr. Chairman. Full disclosure, our 
first witness is a constituent of mine who I have been friends 
with for some 20 years. Brad Doyle is a farmer from Poinsett 
County, Arkansas, and serves as President of the American 
Soybean Association. He has been a member of the ASA Board of 
Directors since 2017. In 2017, Brad received the Arkansas Farm 
Bureau's Stanley E. Reed leadership award. The Doyle family has 
been recognized as ASA conservation champions. They have 
implemented two tailwater recovery and canal systems on their 
own farm to conserve rain water, soil, and nutrients. I 
appreciate the great work they are doing and I am proud to 
represent them.
    Brad, thank you for being here today, and I appreciate you 
and all that you do, and Mr. Chairman, thank you for the 
opportunity to introduce my constituent.
    The Chairman. Thank you.
    And our second witness today is Dr. Robert Johansson, the 
Director of Economics and Policy Analysis for the American 
Sugar Alliance. He was previously the Chief Economist at the 
U.S. Department of Agriculture.
    Our next witness is Ms. Nicole Berg, a farmer from 
Paterson, Washington, who is here today testifying on behalf of 
the National Association of Wheat Growers.
    Our fourth witness today is Mr. Chris Edgington, a farmer 
from Saint Ansgar, Iowa, who is here today testifying on behalf 
of our National Corn Growers Association.
    And to introduce our fifth witness today, I would like to 
yield once again to my colleague from Georgia, Mr. Austin 
Scott.
    Mr. Austin Scott of Georgia. Thank you, Chairman Scott.
    I would like to welcome our next witness, Ms. Jaclyn Dixon 
Ford, from Alapaha, Georgia. In addition to working her family 
farm, she manages Dixon Gin Company and is here today 
testifying on behalf of the National Cotton Council. She is a 
graduate of the University of Georgia, home of the national 
champion Georgia Bulldogs, and has been working in the cotton 
industry for over 25 years. She serves on the ABAC Foundation 
Board with my wife, Vivian, and Jaclyn, we are glad to have you 
here.
    The Chairman. Thank you. Our sixth witness is Ms. Verity 
Ulibarri, a farmer from Melrose, New Mexico, who is testifying 
today on behalf of the National Sorghum Producers.
    Our seventh witness today is Mr. Clark Coleman, a farmer 
from Bismarck, North Dakota, who is testifying today on behalf 
of the National Sunflower Association, the National Barley 
Growers Association, the U.S. Canola Association, and the USA 
Dry Pea and Lentil Council.
    And to introduce our eighth witness today, I would like to 
yield once again to our colleague from Arkansas, Mr. Crawford.
    Voice. I hope you are doing well, and I will talk to you a 
little bit later----
    The Chairman. Let me remind all Members, please make sure 
your microphones are muted when you are not recognized. Thank 
you.
    Mr. Scott--I am sorry, Mr. Crawford.
    Mr. Crawford. Thank you, Mr. Chairman. I am doubly honored 
today to introduce another constituent, Jennifer James, who is 
a fourth-generation rice farmer from Newport, Arkansas. She is 
part owner of H and J Land Company, a diversified family 
farming operation, growing rice, corn, and soybeans. Jennifer 
and her husband, Greg, farm with Jennifer's father, Marvin 
Hare. The family takes great pride in their operations' 
commitment to providing over-winter habitat for water fowl and 
instituting practices that conserve natural resources. She 
serves on the USA Rice Federation and U.S. Rice Farmers Board 
of Directors. I appreciate the great work Jennifer and her 
family are doing, and I am proud to represent them. Jennifer, 
thank you for being here today.
    The Chairman. Thank you, and I would like to introduce now 
our ninth and final witness today, and I would like to yield to 
our colleague from Georgia, Mr. Bishop.
    Mr. Bishop. Thank you very much, Mr. Chairman.
    The Chairman. Mr. Bishop----
    Mr. Bishop. It is truly--can you not hear me?
    The Chairman. We are having a little bit difficulty. You 
may want to get a little bit closer to the microphone, Mr. 
Bishop.
    Mr. Bishop. I apologize.
    Again, is this better?
    The Chairman. Yes, it is. You may continue.
    Mr. Bishop. Thank you very much, Mr. Chairman and Ranking 
Member Thompson, for having this very important hearing today. 
It is my pleasure and a distinct honor to introduce the witness 
from Georgia's second Congressional district, Meredith McNair 
Rogers. Ms. Rogers hails from Camilla, Georgia, in Mitchell 
County, which is one of the top ten agriculture producing 
counties in the State of Georgia. She comes from a long line of 
row crop and [inaudible] farmers, and she is the third 
generation. And her family is [inaudible]----
    The Chairman. We are having some technical difficulties----
    Mr. Bishop.--[inaudible]. Meredith was the first 
[inaudible]----
    The Chairman. Mr. Bishop, I hate to cut you there but you 
are having a little difficulty----
    Mr. Bishop.--leadership academy, which is a program for 
young leaders involved in the peanut industry, and she has a 
unique perspective as one of the [inaudible].
    The Chairman. Thank you, Mr. Bishop.
    Mr. Bishop. Thank you.
    The Chairman. And I thank Mr. Bishop for his comments, and 
apologize for the little difficulty we had technically on that.
    I am so pleased to have such a very distinguished panel of 
witnesses before us today. Your commentary, your insight is 
very valuable to us to share with us what works, what doesn't 
work, so we can improve where we need to improve and make sure 
the American people have a farm bill that we all can be very 
proud of.
    And so, now, witnesses, you will each have 5 minutes. The 
timer will be visible to you, and will count down to 0, at 
which point, your time has expired.
    So, Mr. Doyle, let us begin with you when you are ready.

    STATEMENT OF S. BRAD DOYLE, PRESIDENT, AMERICAN SOYBEAN 
                    ASSOCIATION, WEINER, AR

    Mr. Doyle. Good morning, Chairman Scott, Ranking Member 
Thompson, and distinguished Members of the Committee. Thank you 
for the opportunity to provide testimony on Title I of the 2018 
Farm Bill. My name is Brad Doyle. I am a soybean farmer from 
Arkansas, and I serve as the President of the American Soybean 
Association.
    Soybean growers need a supportive farm safety net when 
markets fail or when significant economic disruptions occur. 
Based on farmer feedback we have received, it is clear that 
improvements are needed to make the Title I safety net 
effective for soybean farmers.
    Since early 2022, ASA has held 12 virtual farm bill 
listening sessions, both by region and by topic, with 
interested soybean farmers across soy's 30 primary growing 
states. An in-depth farm bill survey was also administered to 
soybean growers in late 2021. Through these listening sessions 
and the survey, soybean farmers consistently share that the 
soybean reference price is insufficient. If there were ever a 
time that the farm safety net was designed for, it was during 
the China trade war in 2018 and 2019. China is a significant 
importer of soybeans, importing almost one in three rows of 
soybeans produced in the U.S. During the height of the China 
trade war in 2018, U.S. soy stopped flowing into the market 
during the peak export period that fall. Soybean prices fell 
about 20 percent. The soybean producers received no PLC 
payments, and little from ARC under the Title I safety net.
    The reference price for determining Title I benefits was 
set at such a low level that PLC payments never were triggered. 
In fact, 2005 is the last time that PLC or CCP payment, the 
predecessor program, was triggered for soybeans. If soybeans, 
the second-largest crop planted by area in the U.S., did not 
get help from Title I during this critical situation, it is 
hard to imagine a scenario where the Title I safety net could 
provide meaningful help with the current reference price.
    Through ASA's listening sessions and survey, soybean 
farmers also consistently shared the concern that soybean 
farmers have a low level of base acres compared to planted 
acres. ARC and PLC payments are provided on base acres, not on 
planted acres. In 2021, soybeans were planted on over 87 
million acres in the U.S. By comparison, soybean base total 
acres are 52\1/2\ million acres. So, 34\1/2\ million acres of 
soybean acres were not protected by the soybean provisions of 
ARC and PLC in 2021.
    Farmers shared these scenarios throughout our listening 
sessions to describe these concerns: (1) a young, beginning 
farmer who is only ten percent base on his or her farm provided 
little access to the ARC and PLC farm safety net; (2) greater 
adoption of no-till conservation practices has enabled farmers 
to cultivate crops in new areas that have no base; (3) small 
farmers who have transitioned out of tobacco production and 
have no crop base; (4) farmers have exited the dairy business 
and have moved into production of other crops with no base 
acres; and (5), farmers have lost cropland to residential and 
industrial development, and sought other areas to cultivate.
    When our survey respondents were provided options to 
improve the Title I farm safety net for soybeans, the leading 
two selections were to increase the soybean reference price for 
calculating ARC and PLC, and to provide an option to update 
base acres. Importantly, farmer feedback also suggests that a 
combination of remedies to address these deficiencies are 
needed. For example, if an option to update base acres is 
allowed, it may not be exercised if the reference price of 
soybeans remains where it is currently set.
    In addition to these two specific areas of concern 
regarding the Title I farm safety net, my written statement 
provides highlights of a number of other interests.
    Thank you again for this opportunity to share ASA's 
perspectives on Title I of the 2018 Farm Bill.
    [The prepared statement of Mr. Doyle follows:]

   Prepared Statement of S. Brad Doyle, President, American Soybean 
                        Association, Weiner, AR
    Good morning, Chairman Scott, Ranking Member Thompson, and 
distinguished Members of the Committee. Thank you for the opportunity 
to provide testimony on Title I of the 2018 Farm Bill.
    I am a soybean farmer from Arkansas and serve as President of the 
American Soybean Association (ASA).
    Founded in 1920, ASA represents more than 500,000 U.S. soybean 
farmers on domestic and international policy issues important to the 
soybean industry and has 26 affiliated state associations representing 
the 30 primary soybean-producing states.
Soybean Economic Impacts
    The U.S. soybean industry has a positive impact on the U.S. 
economy.
    In 2021, over 87 million acres were planted to soybeans in the 
United States with a record-high production total of 4.44 billion 
bushels according to USDA.
    Soybean production alone accounts for close to 150,000 jobs (full-
time soy equivalent), more than $6 billion in wages and $86.5 billion 
in revenues, according to a 2019 study by the United Soybean Board and 
National Oilseeds Processors Association. This does not include 
secondary soybean markets and supporting industries like biodiesel, 
grain elevators, feed mills, ports, rail, refining, barge and more, 
which brings soybean's national revenue impacts to a significant $115.8 
billion. New markets and new uses for soy continue to develop thanks to 
farmer investments in research and promotion by the soybean check-off 
and Federal investment in market development programs.
    Soybeans have long been U.S. agriculture's top export crop. Foreign 
markets were destinations for more than 50% of U.S. soy production in 
the last marketing year. Even with ongoing efforts to diversify and 
open new markets, our commercial export relationship with China is 
critically important, as it is the largest importer of soybeans in the 
world. Almost a third of all soybeans grown in the United States are 
destined for China under normal trade conditions.
    In addition to a steady supply of production inputs and predictable 
regulatory environment, we rely on domestic and global markets for the 
success of soybean farmers.
    When those markets fail or when significant economic disruptions 
occur, we rely on policymakers to ensure that a supportive farm safety 
net is in place.
Farmer Feedback--Gathering Process
    Each year, ASA sets the annual policy priorities of the 
organization through a thorough resolutions review and adoption 
process. This process is currently underway and will culminate in a 
session of voting delegates at our annual meeting during the Commodity 
Classic farm trade show next week. Feedback regarding Title I has been 
received through this process.
    In addition, ASA has recently taken greater steps to gather farmer 
feedback in preparation for development of the next farm bill.
    Since early 2022, ASA has held 12 virtual farm bill listening 
sessions--both by region and by topic--with interested soybean farmers 
and state soy affiliates across soy's 30-state growing region. An in-
depth farm bill survey was administered to soybean growers in late 
2021. And, ASA has a farm bill-specific email address set up for those 
interested in sharing additional written feedback.
    Farm bill feedback gathered from these steps will be developed into 
a set of farm bill principles and shared this spring with the 
Committee.
Title I Feedback From Farmers: Improvements Are Needed
    While crop insurance is not a part of Title I, ASA must share for 
the record the high importance of crop insurance to soybean farmers. 
Soybean farmers consistently communicate that this is the most 
effective component of the farm safety net when viewed more broadly. 
This risk management tool allows farmers to elect coverage annually 
based on their own risk tolerance and responds accordingly when losses 
are triggered. Crop insurance must remain affordable for producers.
    While crop insurance provides a safety net for risk within a 
growing season, it does not protect against longer-term structural 
risks. Title I is intended to do this, but the Agriculture Risk 
Coverage (ARC) and Price Loss Coverage (PLC) programs, specifically, 
need improvements to provide the intended protection. An effective 
soybean safety net does not exist today.
    As noted earlier, China is a significant importer of soybeans, 
importing almost one in three rows of soybeans produced in the United 
States. During the height of the China trade war in 2018, U.S. soy 
stopped flowing to the market during the peak export period that fall. 
Soybean prices fell by about 20%, but the producers of the crop 
received no PLC payments and little from ARC under the Title I safety 
net. USDA stepped in with ad hoc, temporary support to farmers through 
the Market Facilitation Program (MFP).
    The example above provides context to what we are hearing from 
farmers. They have consistently shared two deficiencies regarding the 
Title I farm safety net programs of ARC and PLC:

  (1)  Soybeans have an insufficient reference price, on which ARC and 
            PLC benefits are calculated.

  (2)  Soybeans have a low level of base acres, the historical acreage 
            on which ARC and PLC benefits are provided, relative to 
            planted acres.

    When survey respondents were provided options to improve the Title 
I farm safety net for soybeans, the leading two selections were related 
to those concerns; specifically, (1) increase the soybean reference 
price for calculating ARC and PLC, and (2) provide the option to update 
base acres.
    Importantly, farmer feedback also suggests that a combination of 
remedies to address these deficiencies is needed. For example, if an 
option to update base acres is allowed, it may not be exercised if the 
reference price for soybeans remains where it is currently set.
Soybean Reference Price: Increase Is Needed
    Farm safety nets are not created for the good times, but instead 
the bad times. Currently, we are experiencing strong soybean market 
prices, but agriculture is cyclical. An effective safety net is needed 
for the times when prices decline. During the trade war, soybean 
farmers experienced negative margins for their crop. USDA's Economic 
Research Service estimated it cost soybean farmers $37 more per acre in 
2018 to produce than was received from the sale of the crop and $74 
more in 2019.
Soybean value of production less total costs


          Source: USDA ERS.

    If there were ever a time that the farm safety net was designed 
for, it was the trade war in 2018 and 2019. Factors well outside 
farmers' control structurally shifted, collapsing much of the demand 
for U.S. soybeans. Despite a large drop in the price producers were 
receiving which resulted in negative margins, the reference price for 
determining Title I benefits was set at such a low point that PLC 
payments never triggered. In fact, 2005 is the last time a PLC or CCP 
payment--the predecessor program--was triggered for soybeans.
Soybean prices


          Sources: USDA NASS and FAPRI-MU.

    Support prices were increased starting with the 2014 Farm Bill, but 
this price increase did not fully reflect the increased operating 
costs. While prices during the trade war remained above those from the 
early 2000s, a higher price is necessary to offset the higher cost of 
inputs. According to data from the Food and Agricultural Policy 
Research Institute at the University of Missouri (FAPRI-MU), operating 
costs have approximately doubled during this time. As a result, farmers 
experienced significant losses and received few ARC payments and no PLC 
payments. If soybeans, the second-largest crop by area in the U.S., did 
not receive help through Title I during this critical situation, it is 
hard to imagine a scenario where the Title I safety net could provide 
meaningful help with the current reference price.
Soybean Base Acres: Option to Update Base Acres Is Needed
    The data clearly demonstrates the disparity in soybean planted 
acres compared to base acres, the historical acreage on which ARC and 
PLC benefits are provided.
    In 2021, soybeans were planted on over 87 million acres in the 
United States. By comparison, soybean base totals 52.5 million acres. 
34.5 million acres of planted soybean acres were not protected by the 
soybean provisions of ARC and PLC in 2021. While some of these 34.5 
million soybean acres may have been corn or wheat base, for example, 
farmers' concerns are very real and important to share with you. These 
other crops may not correlate well with the losses being experienced on 
the farm.
    ASA's farm bill survey results showed that 84% of respondents would 
like the option to update base acres, and less than 5% oppose the 
option. Commentary shared throughout our listening sessions includes 
these scenarios:

   A young, beginning farmer who has only 10% base acres on his 
        or her farm, providing little access to the ARC/PLC farm safety 
        net.

   Greater adoption of no-till conservation practices has 
        enabled farmers to cultivate row crops in new areas that have 
        no base.

   Small farmers have transitioned out of tobacco production 
        and have no crop base.

   Farmers have exited the dairy business and moved into 
        production of other crops.

   Farmers have lost cropland to residential or industrial 
        development and sought other areas to cultivate.

    To be clear, ASA supports maintaining planting flexibility and the 
approach of decoupling acreage to ensure compliance with trade 
commitments. Providing farmers an option to update base acres in a 
trade-compliant manner can be achieved.
Additional Title I Farmer Feedback
    Although our testimony has focused on two specific areas of concern 
regarding the Title I farm safety net, we share with the Committee 
additional feedback on needs:

   Clear direction that if a standing disaster assistance 
        program is created, the financial protection provided by Title 
        I programs and crop insurance should not be reduced to fund the 
        disaster program.

   Support for review of Farm Service Agency staffing and 
        information technology (IT) capabilities in advance of eventual 
        farm bill implementation. Of note, this applies to USDA more 
        broadly as well to ensure implementation readiness.

   Support for modernizing IT systems to better allow farmers 
        to share data and access programs.

   Support for the option to update program yields.

   Support for allowing ARC payments to trigger more easily.

   Support for the ARC cap on payments from the current 10% of 
        the benchmark.

   Support for reviewing marketing loan rates.

   Support for increasing payment limits.

   Opposition to eligibility restrictions based on farmer size.
Conclusion
    Thank you again for this opportunity to share the American Soybean 
Association, and in turn our farmers', views on Title I farm programs.
    The soybean industry stands ready to work with the Committee in 
crafting a farm safety net that is effective for soybean farmers.

    The Chairman. Thank you, Mr. Doyle.
    And now, Dr. Johansson, please begin when you are ready.

       STATEMENT OF ROBERT JOHANSSON, Ph.D., DIRECTOR OF 
         ECONOMICS AND POLICY ANALYSIS, AMERICAN SUGAR 
                    ALLIANCE, ALEXANDRIA, VA

    Dr. Johansson. Good morning, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee. Thank you for this 
opportunity to testify before you today concerning the 
commodity title of the 2018 Farm Bill. My name is Robert 
Johansson. I am the Director of Economics and Policy Analysis 
at the American Sugar Alliance, the national coalition of 
sugarbeet and sugarcane growers, processors, and refiners.
    U.S. sugar industry generates more than 140,000 jobs across 
21 states, and contributes $20 billion annually to the U.S. 
economy. American consumers benefit from a safe, high-quality, 
reliable, sustainably produced, and affordable source of sugar, 
an essential ingredient in the nation's food supply. Our 
product is stored and distributed from multiple facilities 
strategically located throughout the nation, ready for delivery 
when and where needed, according to the specifications required 
by our customers. Unlike some other food items, there were no 
bare spots on grocery store shelves throughout the pandemic. 
That success is attributable to U.S. sugar policy.
    I will make four main points today. First, efficient U.S. 
sugar producers are threatened by less efficient foreign, 
subsidized, and dumped sugar that usually sells well below the 
exporter's cost of production. There are no signs of that 
changing in the foreseeable future. We must not become overly 
dependent on foreign suppliers for essential goods. That is why 
an effective sugar policy that maintains a strong domestic 
industry is essential to the food security of our nation.
    Second, U.S. sugar policy comes at no cost to the U.S. 
Treasury. U.S. sugar policy has operated at zero cost to 
taxpayers 17 of the past 18 years, and is expected to do so 
again this year. The USDA projects zero costs over the next 10 
years as well. The one time it did not operate at zero cost was 
due to Mexico's dumping of sugar onto the U.S. market at below 
Mexico's production cost, which the International Trade 
Commission unanimously held violated U.S. trade law.
    However, the loan rate for raw sugarcane and refined beet 
sugar has not kept up with inflation nor the rising costs of 
production. It no longer provides a realistic safety net for 
our producers. Since the early 1980s, we have closed 68 
processing facilities, and most outside investors have exited 
the remainder of the industry due to the high risk and low 
returns. It was our family farmers who stepped up to rescue the 
industry from further closures of their factories, mills, and 
refineries.
    Now, many of those are struggling. Operating margins are 
being squeezed each year due to rising labor, fuel, seed, 
fertilizer, equipment, and interest rate costs. They hit our 
producers in the field as well as in the factories they own.
    We would support examining how the farm bill safety net 
could be updated in the next farm bill for all Title I 
commodities to better match actual operating costs for 
producers.
    Third, sugarcane and sugarbeets, like most crops, are grown 
in areas that experience weather disruptions. Crops are 
resilient, yet risk protection is needed. Sugarcane and 
sugarbeet farmers do have some insurance products available to 
them, but those crop insurance tools are not as well developed 
nor affordable as for some other commodities. Sugarbeet farmers 
have participated in WHIP+ previously, and cane farmers are 
considering how their losses in 2021 might be eligible for the 
most recent WHIP+ program. Note that WHIP+ is not currently 
authorized for recent 2022 disasters, such as the January 
freeze in Florida.
    For those reasons, and because this Committee has signaled 
an interest in developing additional risk management programs 
in Title I to complement crop insurance, we are certainly 
receptive to new efforts to provide standing disaster coverage 
in ways that do not undermine crop insurance, and possibly even 
encourage greater participation and coverage levels.
    And last, the current Title I sugar policy can provide an 
adequate economic safety net for American sugarcane and 
sugarbeet farmers so long as there remains in place effective 
responses to foreign sugar-producing countries' subsidizing and 
dumping. Without those responses, we would effectively 
outsource our sugar supply to heavily subsidized and unreliable 
foreign sugar suppliers whose environmental and labor standards 
simply do not measure up to our own. That would be the opposite 
of strengthening supply chains, and contrary to providing a 
safety net to American producers.
    We encourage and welcome the Members and staff of the 
Committee to visit our farms and factories. We look forward to 
working with you as this Committee continues to hear from 
producers as you weigh options for improving the farm bill.
    Thank you for your consideration, and for your support to 
the American sugarcane and sugarbeet family farmers. I look 
forward to any questions you might have.
    [The prepared statement of Dr. Johansson follows:]

 Prepared Statement of Robert Johansson, Ph.D., Director of Economics 
      and Policy Analysis, American Sugar Alliance, Alexandria, VA
    Good morning, Chairman Scott, Ranking Member Thompson, and Members 
of the Committee. Thank you for this opportunity to testify before you 
today concerning the Commodity Title of the 2018 Farm Bill.
    My name is Rob Johansson, and I am the Director of Economics and 
Policy Analysis at the American Sugar Alliance (ASA), the national 
coalition of sugarbeet and sugarcane growers, processors, and refiners.
    The U.S. sugar industry generates more than 140,000 jobs in 21 
states and $20 billion in annual economic activity (see figure 1. Map 
of the U.S. sugar industry).\1\
---------------------------------------------------------------------------
    \1\ LMC International, ``The Economic Importance of the Sugar 
Industry to the U.S. Economy--Jobs and Revenues,'' Oxford, England, 
August 2011.
---------------------------------------------------------------------------
    American consumers benefit from a safe, high-quality, reliable, 
sustainably produced,\2\ and affordable source of an essential 
ingredient in the nation's food supply. Sugar is used as a natural 
sweetener, preservative, and bulking agent in 70 percent of U.S. food 
manufacturing. Our farmers, millers, processors, and refiners have 
built a strong and resilient supply chain for American sugar.\3\ 
Proudly, our product is stored and distributed from 90 strategically 
located facilities throughout the nation ready for delivery when and 
where needed according to the specifications required by our customers. 
Unlike some other food items, there were no bare spots on grocery store 
sugar shelves throughout the pandemic. That success is attributable to 
U.S. sugar policy.
---------------------------------------------------------------------------
    \2\ See https://sugaralliance.org/producing-sugar-sustainably/
sugar-sustainably-sweet-stories.
    \3\ We documented that supply chain resilience for American sugar 
supplies at our submission to USDA this past spring (https://
www.regulations.gov/comment/AMS-TM-21-0034-0437).
---------------------------------------------------------------------------
    Our industry proudly meets some of the highest labor and 
environmental standards in the world, unlike many other large sugar 
producing countries. Moreover, using best practices and continuous 
improvement, our sector has made huge strides in sustainability, mainly 
through productivity gains in soil fertility, mechanization, improved 
seed genetics, and refining efficiencies. In fact, over the past 20 
years, we have increased production by 16 percent on 11 percent fewer 
acres, through improved sugarcane and sugarbeet yields.
    Many of the jobs and businesses generated and supported by the U.S. 
sugar industry are in highly vulnerable and economically distressed 
rural areas.
    This hearing is timely and important for sugarcane and sugarbeet 
farmers because Title I of the Farm Bill--the Commodity Title--
represents a critical safety net for our farm families and the many 
employees of sugar mills, processors, and refineries throughout the 
country.
    I will make four main points today.
    First, efficient U.S. sugar producers are threatened by less 
efficient foreign subsidized and dumped sugar that usually sells well 
below the exporters cost of production. This makes the world sugar 
market the most distorted and volatile commodity market in the world 
(see figure 2. World's largest sugar exporters). There are no signs of 
that changing in the foreseeable future. The U.S. is also the third 
largest importer in the world of this essential commodity to meet 30 
percent of our needs. This is because our trade commitments require 
these imports. Over the past 2 years it is clear that we must not 
become overly dependent on foreign suppliers for essential goods 
particularly for food, energy, computer chips, and the like. This is 
why an effective sugar policy, which maintains a strong domestic 
industry, is essential to the food security of our nation.
    Second, U.S. sugar policy is structured to serve American farmers, 
consumers, food manufacturers, and taxpayers as it comes at no cost to 
the U.S. Treasury. U.S. sugar policy has operated at zero cost to 
taxpayers 17 of the past 18 years and is expected to do so again this 
year. USDA projects zero cost over the next 10 years, as well. The one 
time it did not operate at zero cost was due to Mexico's dumping of 
sugar onto the U.S. market at below Mexico's production costs which the 
International Trade Commission unanimously held violated U.S. trade 
law. That problem has been resolved.
    However, the loan rate for raw cane sugar and refined beet sugar 
has not kept up with inflation nor the rising costs of production (see 
figure 3. Rising input costs). It no longer provides a realistic safety 
net for our producers. Since the early 1980's we have closed 68 
processing facilities and most outside investors have exited the 
remainder of the industry due to the high risk and low returns. It was 
our family farmers who stepped up to rescue the industry from further 
closures of their factories, mills, and refineries (see figure 4. 
Facility closures). Now many of those are struggling. Operating margins 
are being squeezed each year, due to rising labor, fuel, seed, 
fertilizer, equipment and interest rate costs that hit our producers in 
the field and at the factories they own.
    Having a loan rate that is closer to actual costs of production 
would provide a more effective safety net to our producers. As such, we 
would support examining how the farm safety net could be updated in the 
next farm bill for all Title I commodities to better match actual 
operating costs for producers.
    Third, sugarcane and sugarbeets, like most crops, are grown in 
areas that experience weather disruptions. Crops are resilient, yet 
risk protection is needed given the continued exposure to strong 
hurricanes, freezes, and frequent and more intense droughts. Sugarcane 
and sugarbeet farmers do have some insurance products available to 
them, but those crop insurance tools are not as well developed or 
affordable as for some other commodities. For sugarbeets, polices are 
limited to yield-based coverage and do not benefit from a revenue-based 
product like other commodities. For sugarcane, the Hurricane Insurance 
Program (HIP) has been an invaluable addition, but a prevented planting 
provision is needed. Participation and coverage levels for sugarcane 
lag significantly behind other crops so better addressing sugarcane's 
unique perils would be helpful. Price election methods should also be 
updated to better reflect market prices.
    Sugarbeet farmers have participated in WHIP+ previously and cane 
farmers are considering how their losses in 2021 might be eligible for 
the most recent WHIP+ program (note that WHIP+ is not currently 
authorized for recent 2022 disasters such as the January freeze in 
Florida). For those reasons and because this Committee has signaled an 
interest in developing additional risk management programs in Title I 
to complement crop insurance, we are certainly receptive to new efforts 
to provide standing disaster coverage in ways that do not undermine 
crop insurance and possibly even encourage greater participation and 
coverage levels. Under any standing disaster program, we would 
certainly encourage the Committee to provide particular help to crops 
that might not have access to more successful crop insurance coverage 
options or for which the program has just not operated optimally.
    Last, the current Title I sugar policy can provide an adequate 
economic safety net for American sugarcane and sugarbeet farmers, 
provided it is kept up to date and so long as there remains in place 
effective responses to foreign sugar-producing countries' subsidizing 
and dumping. Without those responses, we would effectively outsource 
our sugar supply to heavily-subsidized and unreliable foreign sugar 
suppliers whose environmental and labor standards simply do not measure 
up to our own--the opposite of strengthening supply chains and contrary 
to providing a safety net to American producers. Under that scenario, 
farmers, consumers, and taxpayers would all lose.
    On behalf of the more than 11,000 sugarcane and sugarbeet farmers 
in the United States as well as the employees in our mills, processors, 
and refineries, I thank you for supporting sound U.S. sugar policy and 
strongly opposing harmful proposals that would undermine the success of 
this policy.
    We encourage and welcome the Members and staff of the Committee to 
visit our farms and factories. We look forward to working with you as 
this Committee continues to hear from producers as you weigh options 
for improving the farm bill.
    Thank you for your consideration and your support for American 
sugarcane and sugarbeet family farmers. I look forward to any questions 
you might have.

Rob Johansson,
Director of Economics and Policy Analysis,
American Sugar Alliance.
Figure 1. Map of the U.S. sugar industry


Figure 2. World's largest sugar exporters
Shares of Global Exports, 5 Year Olympic Average (2015/16-2021/22)
          
        
        
          Data: Export data--USDA/FAS, Nov. 2021. 2021/22 forecast.
          Prices--International Sugar Organization, Domestic Sugar 
        Prices--a Survey, May 2019.
          Subsidies--USDA/FAS attache reports, press reports, country 
        studies. May not add due to rounding.
Figure 3. Rising input costs outpacing sugar price
Average Compared with 1980s Average 2021


          1980s average compared with 2021 average to-date.
          Sugar price data source: USDA, Table 5; Wholesale refined 
        price (Midwest markets). Input cost and inflation data source: 
        Bureau of Labor Statistics.
Figure 4. Facility closures since 1980


          Source: American Sugar Alliance, 2022.

    The Chairman. Thank you.
    Ms. Berg, please begin when you are ready.

STATEMENT OF NICOLE BERG, VICE PRESIDENT, NATIONAL ASSOCIATION 
                 OF WHEAT GROWERS, PATERSON, WA

    Ms. Berg. Chairman Scott, Ranking Member Thompson, and 
Members of the Committee, thank you for the opportunity to 
testify before the House Agriculture Committee. My name is 
Nicole Berg, a fourth-generation farmer where I work alongside 
my dad and two brothers on our family farm in Paterson, 
Washington. We grow dryland and irrigated wheat on a 
diversified farm. Currently, I serve as Vice President of the 
National Association of Wheat Growers.
    NAWG is a federation of 20 state associations and other 
industry partners. Our members feel it is important to provide 
testimony before the Committee today as we reflect on the 
programs authorized under Title I of the farm bill. Today's 
hearing is timely, as NAWG is also evaluating the effectiveness 
of the farm safety net. These programs and how the U.S. 
Department of Agriculture administers them can be improved 
going into the next farm bill.
    NAWG intends to outline our farm bill priorities in the 
coming months as Congress begins debating farm bill 
reauthorization. Wheat is one of the principle food grains 
produced in the United States and consumed around the world. 
Nationwide, there are six different classes of wheat grown in 
different climates and for different uses. In my State of 
Washington, there are roughly 2,500 wheat growers. The eastern 
part of the state is known for the home of soft white wheat.
    Wheat farmers across the country have experienced multiple 
challenges over the past couple years, from trade disputes, 
impacts from COVID-19, current supply chain issues, difficulty 
in procuring inputs, and extreme drought and several other 
weather events. Supply chain issues and availability of inputs 
continue to present challenges for us farmers. These challenges 
include rising prices and availability of fuel, parts, vital 
equipment, and other crop protection tools that allow farmers 
to continue using climate-smart ag practices like no-till.
    The current agriculture enonomy is strong with near record 
high prices, improving working capital, farmland value, farm 
income, and revenue. However, this is not without concern. The 
USDA projects net farm income to decrease by 7.9 percent when 
adjusted for inflation in 2022, thanks to rising input costs, 
supply chain crunches, and significant droughts through wheat 
country that negate the high wheat prices.
    The high prices of these last 2 years will not last 
forever. It is important that Congress maintains a strong 
safety net for the farm economy, given its difficult nature. As 
part of the 2018 Farm Bill, wheat growers supported 
improvements in the crop insurance title, marketing assistance 
loans, and the ARC and PLC, and all these programs are 
necessary to maintain an effective safety net.
    One such improvement for ARC and PLC was the ability for 
farmers to make annual elections between the two programs. This 
has provided a valuable option for farmers to better manage 
their risk. According to data from the USDA, since the 2018 
Farm Bill, we have seen a major shift in wheat farmers' choices 
from ARC to PLC. Regarding service, the ability to reelect, and 
the application process is straightforward and has been easy to 
use.
    On farmer education, the USDA and university extension 
agencies have done a good job providing tools to help farmers 
make an educated choice on the program election. Investment in 
these models is essential. One common complaint among farmers 
is the difficulty of using and interpreting models, and the 
lack of awareness of their existence. In my situation, we find 
it challenging to interpret the models--what it is telling us 
to do, so we have accountants that run models for us.
    While wheat farmers almost universally enroll in PLC, there 
are still issues that persist with the program that the 
Committee should consider in the next farm bill. Wheat farmers 
consistently lose money producing wheat, according to USDA cost 
production data when factoring in total costs. Keeping this in 
mind, the Committee should consider how to make ARC more 
effective for the wheat farmers, and how to improve PLC to be 
more reflective of the current cost of production.
    As the Committee continues to have these hearings and 
reflect on programs authorized under the 2018 Farm Bill, I look 
forward to working with the Members of the Committee, their 
staff, and other witnesses here today to help craft the next 
farm bill that works for wheat farmers and all of agriculture. 
Thank you again for the opportunity to testify before the 
Committee today.
    [The prepared statement of Ms. Berg follows:]

Prepared Statement of Nicole Berg, Vice President, National Association 
                     of Wheat Growers, Paterson, WA
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee thank you for the opportunity to testify before the House 
Agriculture Committee. My name is Nicole Berg, a fourth-generation 
farmer where I work alongside my dad and two brothers on our family 
farm in Paterson, Washington. Currently, I also serve as the Vice 
President of the National Association of Wheat Growers (NAWG). We grow 
dryland and irrigated wheat; Blue Grass Seed; Field Corn; Sweet Corn, 
Sweet Peas, Green Beans, and Alfalfa. Thank you for holding this 
hearing today to discuss Title [I]--the commodity title--of the 2018 
Farm Bill. The Title [I] programs established under the 2014 Farm Bill 
and reauthorized in the 2018 Farm Bill deliver important risk 
management tools for farmers and help protect producers from declines 
in either crop revenue or prices.
    NAWG is a federation of 20 state wheat grower associations that 
work to represent the needs and interests of wheat producers before 
Congress and Federal agencies. Based in Washington, D.C., NAWG is 
grower-governed and grower-funded and works in areas as diverse as 
Federal farm policy, environmental regulation, the future 
commercialization of emerging technologies in wheat, and uniting the 
wheat industry around common goals. Our members feel it is important to 
provide testimony before the House Agriculture Committee today as we 
reflect on the programs authorized under Title [I] of the farm bill. 
Today's hearing is particularly timely as NAWG is also evaluating the 
effectiveness of the farm safety net programs, how those programs can 
be improved going into the next farm bill, and how the U.S. Department 
of Agriculture (USDA) administers these programs. Many of us at this 
hearing today will be at Commodity Classic next week, where our 
organization will continue to review the authorized farm bill program. 
NAWG intends to outline our farm bill priorities for lawmakers in the 
coming months as Congress begins debating farm bill reauthorization.
    According to the USDA's Crop Production Summary released last 
month, wheat growers planted 46.7 million acres of wheat in 2021, up 
2.3 million acres from the year prior. However, production was down 
from 1.83 billion bushels of wheat in 2020, to 1.65 billion bushels in 
2021. The decrease in production--from 49.7 bushels per acre to 44.3 
bushels per acre--was largely due to the severe drought, which is 
discussed later in my testimony. Wheat is the principal food grain 
produced in the United States and consumed around the world. In the 
last decade it ranked third among U.S. field crops in both planted 
acreage and gross farm receipts, behind corn and soybeans.
    Nationwide, there are six different classes of wheat, each of which 
is grown for different uses. In my home state of Washington where there 
are roughly 2,500 growers, the eastern part of the state in known as 
the home of soft white and club wheat production. These varieties are 
known for their use in cookies, crackers, and cakes as well as flat 
breads. Washington farmers also raise superb hard red winter and spring 
wheats for bread.
Economic Conditions in Wheat Country
    The agricultural economy can be described as nothing short of a 
roller coaster ride for most producers. Wheat growers across the 
country have experienced a multitude of challenges the past couple of 
years, from trade disputes, impacts of COVID-19, extreme drought and 
other severe weather events, current supply chain issues and difficulty 
in procuring key inputs. As a result, wheat prices are generally the 
item most pointed to when looking at the agricultural economy. The 
graph below, made using USDA Economic Research Service (ERS) data, 
demonstrates the Marketing Year Average Price for wheat over the past 
decade.
Wheat Marketing Year Average Price


    Wheat farmers caught a break these last 2 years in terms of price. 
These increased prices since the marketing year 2019/2020 have been 
primarily due to three factors, each of which will be discussed further 
in my testimony.

   The pandemic and inflation

   Droughts across the country

   International disruptions

    These increases in price have been reflected in net cash income for 
farm businesses. Net cash income is the cash available to farmers to 
draw down debt, pay taxes, cover family living expenses, and invest. 
Thanks to the high prices, farmers have seen the highest net cash 
income since 2013. These prices have been a much-needed break from 
record low levels that preceded the 2018 Farm Bill. These recent 
developments have led to a decrease in farm debt, improved credit 
conditions, and increased farmland values. Prospects for farm income 
moving into the new year remain high. This can be seen when looking at 
the percent change from the 10 year average of net cash income in the 
graph below, which also uses ERS data.
Percent Change from 10 year Average of Farm Business Net Cash Income


    After sustaining massive financial losses from 2014-2018, the last 
2 years have been crucial in keeping the American wheat farmer in 
business. Many farmers were facing bankruptcy, and indeed many lost 
their farm. However, USDA programs such as the Market Facilitation 
Program (MFP) and Coronavirus Food Assistance Program (CFAP), coupled 
with recent high crop prices, have helped the agriculture economy stay 
whole and begin to recover after years of economic turmoil.
    Unfortunately, the three factors mentioned earlier that have helped 
increase prices and rebound the economy could ultimately threaten the 
viability of farmers once again.
    The pandemic has created reverberations across the entire economy. 
The agricultural economy was not immune to this. While prices have 
improved thanks to the increased demand for at-home food products, 
especially flour, it has also created inflation that threatens to 
eliminate the gains from price increases. As supply chains have been 
disrupted or halted, farmers have faced many different challenges. 
These challenges include rising fuel costs, increasing prices for 
parts--if they can get them at all--and vital equipment, such as 
tractors, combines, and implements. Some of these items have been on 
backorder for over a year. For example, it's tough to manage the 2022 
wheat harvest when you have been waiting on a part for over a year or 
the combine you need will not be available until April 2023.
    The supply chain challenges, and availability of inputs has also 
been felt in the case of fertilizer and other crop protection tools 
that are required to deploy climate-smart agricultural practices like 
no-till. One analysis that a wheat farmer in southwest Kansas made on 
his own 308 acres of no-till fallowed wheat showed that the price per 
acre of crop protection tools more than tripled between 2021 and 2022, 
an increase of $27,981.80. This increased cost does not tell the whole 
story of increased input costs either as labor, and equipment parts and 
repairs. This is only a small fraction of the entire increases in costs 
that wheat farmers are now facing.
    Droughts across the country were also a driving factor in the 
increase in prices starting in 2020 that continue to push prices today. 
Unfortunately, as drought worsens, the chances for a strong wheat crop 
also worsen. This drought map taken from February 24, 2022, shows that 
the vast majority of the wheat producing areas in the United States is 
in at least a severe drought.


    Spring wheat country like my own state of Washington has been hit 
particularly hard by this drought. The drought map below shows the 
devastating reach of one of the worst droughts in recent history for 
growers in the Pacific Northwest and across the northern tier. This map 
is from August of last year as farmers were planning to plant winter 
wheat or wrapping up harvest.


    According to the USDA 2021 Small Grains Report, spring wheat saw a 
44 percent reduction in total bushels despite only a seven percent 
decrease in planted acres. In my home State of Washington, we only 
produced 87.1 million bushels of wheat, where in 2020 we produce 166.2 
million bushels. No matter how high the price for wheat gets, if a 
farmer can't produce a crop thanks to drought, they can't turn a 
profit.
    Last, the international disruptions in the market have led to 
massive volatility in recent weeks. As the world watched in horror as 
Russia invaded Ukraine, grain markets soared and then retreated some on 
Friday. The February World Agricultural Supply and Demand Estimates 
from the USDA projected both Russia and Ukraine to be a large exporter 
of wheat, which is largely transported through the Black Sea. The 
current high prices caused by not only this conflict, but previous 
international disruptions in trade may not last long, and the unknown 
outcomes of that conflict will undoubtedly create market volatility.
    Overall, the current agriculture economy is strong with near-
historically high prices improving working capital, farm income and 
revenue, and farmland value. However, it is not without concern. The 
USDA projects net farm income to decrease by 7.9 percent when adjusted 
for inflation in 2022 thanks to rising input costs, supply chain 
crunches, and significant droughts throughout wheat country that make 
high wheat prices irrelevant to many farmers. The important thing to 
remember is that good times in the farming economy rarely last. 
Removing essential pieces of the farming safety net can have disastrous 
consequences when the economy inevitably takes a downturn. Frequently 
throughout history, an improving farming economy is followed by changes 
to agriculture policy, only to see a farming economic recession. 
Therefore, the high prices brought on these last 2 years will not last 
forever, and it is important that Congress maintain a strong safety net 
in place given the cyclical nature of the farm economy.
2018 Farm Bill Safety Net and Risk Management Programs
    NAWG supported the passage and enactment of the bipartisan 2018 
Farm Bill, which provided certainty during a difficult time and 
improved upon the revolutionary 2014 Farm Bill, which established the 
Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. 
As mentioned earlier, farmers experience significant risk from market 
volatility to mother nature. As part of the 2018 Farm Bill, wheat 
growers strongly supported maintaining a strong crop insurance title, 
which, along with ARC and PLC, serve as key pillars to the risk 
management strategy kick in for losses not covered by crop insurance. 
These additional tools are necessary to support American agriculture 
and our rural communities.
    Since the revolutionary changes of the 2014 Farm Bill that did away 
with direct payments, the producer choice between revenue protection 
and price protection has continued to function as was intended. With 
the reauthorization in 2018, ARC and PLC, there were improvements made 
to both programs. One such improvement was the ability for producers to 
re-elect programs beginning with the 2019 crop year and then with the 
ability for annual elections since the 2021 crop year. The ability to 
elect annually has provided a valuable option for producers to help 
them better manage their risk. Additionally, as part of the 2018 Farm 
Bill, the Agriculture Committees recognized the importance of using 
consistent data in determining farm program payments, while making USDA 
Risk Management Agency (RMA) data its primary source, and for making 
key improvements to both ARC and PLC.
    While there are still improvements to be made moving into the next 
farm bill, Title [I] Programs remain a popular and valuable tool in 
managing farmer's risk.
Agriculture Risk Coverage (ARC) program
    As part of their farm program election choice, farmers are able to 
choose between county level or individual level coverage. County level 
coverage will continue to pay on 85 percent of base acres, while 
individual level coverage will continue to pay on 65 percent of base 
acres. Additionally, counties that are larger than 1,400\2\ miles and 
contain more than 190,000 base acres had the opportunity to split into 
two administrative units for the purposes of ARC-County (up to 25 
counties nationwide). Administrative improvements to ARC included a 
requirement that RMA yield data be used if it's available in a county 
and that the physical location of a farm be used to determine which 
county payment rate applies to that specific farm.
    In terms of programmatic improvements, the bill increased the plug 
yield from 70 percent to 80 percent of the transitional yield, required 
USDA to calculate and use a trend-adjusted yield factor to adjust 
yields (similar to the crop insurance trend-adjusted yield 
endorsement), requires the use of an effective reference price (similar 
to the PLC change where reference prices can increase if certain market 
improvements happen over time), and it requires the publishing of 
separate irrigated and non-irrigated yields in each county. USDA is 
also required to publish payment rate information within 30 days of the 
end of the marketing year for each commodity publish the data source 
that was used.
Price Loss Coverage (PLC) program
    The 2018 Farm Bill maintained the current statutory reference 
prices but requires the use of an ``effective reference price.'' In any 
given year, the 5 year Olympic average market year average price will 
be multiplied by 85 percent; if that level is higher than the statutory 
reference price, then the effective reference price is that level up to 
115 percent of the statutory reference price. The maximum level for 
wheat would be $6.33 per bushel, and it cannot drop below the statutory 
reference price of $5.50.
    Current law also allows for all producers nationwide the option of 
updating their yields for PLC in the 2020 crop year. The yield update 
would be 90 percent of the average farm yield of the 2013-2017 crop 
years (with a plug of 75 percent for any year that a yield was lower 
than that), and that level is multiplied by a ratio obtained by 
dividing the 2008-2012 national average yield by the 2013-2017 national 
average yield, with the ratio limited to between 90-100 percent.
Marketing Assistance Loans
    The Marketing Assistance Loan (MAL) program and Loan Deficiency 
Payments (LDP) were maintained in the 2018 Farm Bill. Loan rates used 
in the program were increased for several commodities during 
reauthorization, including a 15 percent increase for wheat from the 
current level of $2.94 to $3.38 per bushel. As the Wheat Marketing Year 
Average Price on page 2 illustrates, 2016 was a particularly bad year 
for wheat growers and was also the last time when the LDPs have been 
made available. Prior to 2016, it had been 16 years since wheat farmers 
were able to collect LDPs. While we are fortunate prices have not been 
at the level for these programs to kick in, as mentioned earlier, there 
were significant periods of depressed prices, and the loan rates may 
need further consideration and analysis to serve as effective programs. 
NAWG is currently reviewing the efficacy of these programs going into 
the farm bill reauthorization.
Accessibility of USDA Programs
    The application process is straightforward and has been easy to use 
for growers. While some Federal programs have large amounts of 
paperwork that must be combed through by lawyers, the application for 
ARC and PLC is just a signature form. This is one of the attributes 
that has led to the large amount of adoption.
    In some instances, what has made this difficult is the staffing 
levels in county offices. The USDA currently has full hiring authority 
and is working to fill vacated positions at the county level. The USDA 
also maintains that they continue to provide pre-pandemic levels of 
service. However, some areas of the country were understaffed before 
the pandemic and continue to be so understaffed that farmers are 
receiving poor service, at no fault of the employees. Farmers have 
voiced these concerns within our organization. Some farmer's counties 
have no or significantly reduced FSA staff, and they are forced to 
travel to other counties to receive service. In some rural counties, 
this can amount to drives of 2 or more hours one way, which can be very 
onerous during planting or harvest season. Some counties are authorized 
to have multiple employees but are only staffed with one or fewer 
employees. This causes serious issues and frustrations to farmers. It 
is important that the House Agriculture Committee works with the USDA, 
other administrative agencies, and other Congressional committees to 
find ways to address these issues that impact other farm bill programs 
as well.
    The USDA and university extension agencies have done a good job of 
informing farmers about Title [I] programs and providing tools that 
help them forecast the upcoming year to make an educated choice on 
program election. Investment in these models is essential as, without 
them, farmers are left to guess about what they think might happen and 
which program might protect them. However, one common complaint amongst 
farmers is the difficulty in using and interpreting the models and the 
lack of awareness that these modeling tools exist. In my situation, we 
find it challenging to interpret what the model is telling us to do, so 
we have accountants that run the models for other clients and us. These 
modeling tools, while extremely important, need accompanying technical 
support and training through FSA to help farmers utilize these tools 
more effectively.
Implementation of Programs
    NAWG is currently working through our priorities for the next farm 
bill and will make sure to share them with you once they are finalized. 
Looking back at the 2018 Farm Bill, however, there are certainly 
programs that excelled and other that could be refined to better serve 
grower needs.
    One popular change from 2014 to 2018 was the ability to make yearly 
elections between ARC and PLC. In 2014, farmers were forced to forecast 
out the next 5+ years to determine which program they thought would 
best protect them. In many cases, farmers were wholly uninformed, 
unprepared, and made a choice based on the limited information that 
land-grant extension agencies were able to provide them with. They were 
then forced to remain in these programs even though they were not being 
adequately protected. The ability to choose between the programs allows 
farmers a much tighter safety net that varies year on year.
    According to data from the USDA, prior to the 2018 Farm Bill, wheat 
farmers chose ARC more frequently than PLC. Since the 2018 Farm Bill 
however, wheat farmers choose PLC 78 percent of the time on average, 
with highs of 93 percent in 2019 and 2020. The percentage of acres 
enrolled in ARC and PLC can be shown in the graph below.
Percent of Enrollment by Program


    While wheat farmers almost universally enroll in PLC, there are 
still issues that persist with the program that the Committee should 
consider going into the next farm bill. As established in my 
introduction, wheat is the staple food grain produced in the United 
States. Meanwhile, wheat farmers consistently lose money producing 
wheat according to USDA cost of production data when factoring in total 
costs listed by the USDA. In 2020, wheat farmers lost $76.62 an acre, 
an increase from the lows of 2015 when wheat farmers were losing $96.60 
per acre. In fact, it has not been profitable for wheat farmers to grow 
wheat since 2012, when farmers made $40.70 an acre. Enrolling in PLC 
has helped with this issue, but it does not prevent losses. In 2020, 
the value of production with PLC less total costs, according to USDA, 
was a negative $36.05. This data can be found in the graph below. 
Without farm bill programs like those contained in Title I, these 
sustained losses and missed opportunities are what ultimately push 
farmers to bankruptcy and out of the industry.
Value of Production Less Total Costs


    Keeping this in mind, the Committee should consider how to make ARC 
more effective for wheat farmers and how to improve PLC to be more 
effective at preventing these types of total losses. Both loan rates 
and PLC reference prices should undergo thorough investigation 
throughout this review process, especially given recent inflation and 
increases in input prices, not to mention land costs.
    The 2018 Farm Bill attempted to remedy this issue with the 
effective reference price mentioned earlier in my testimony. This 
change to the reference price will help if the current high prices are 
sustained over multiple years. Overall, having an adjustment that takes 
years to occur is too slow with the current volatility of commodity 
markets and ever-increasing cost of production.
    Another issue the Committee needs to think about is the timing of 
these payments. For wheat, payments come almost a year and a half after 
the crop is harvested. Farmers often need help more immediately. When 
major disruptions occur in the agriculture economy or in weather 
patterns that effect yield, waiting eighteen months to hit the safety 
net can prove disastrous. By that time, some farmers may be forced into 
bankruptcy.
    At the end of the day, farmers prefer producing a crop and selling 
it for a profit over government payments. However, Title [I] farm bill 
programs help provide certainty whereby growers can make long-term 
investments in land and equipment where it would otherwise be 
incredibly difficult if not prohibitive for growers. This is even more 
apparent when looking at farmers who don't have equity built up or 
enough working capital to withstand difficult years as established 
farmers can, which is a particular challenge with new or beginning 
farmers or socially disadvantaged growers. That is why Congress should 
evaluate program effectiveness and work to improve upon them in a 
timely manner.
Conclusion
    NAWG's policy committees and board of directors will be meeting in 
the coming weeks to continue evaluating the effectiveness of these 
programs and work to finalize our key policy priorities over the coming 
months. These priorities will be shared with you and your staff upon 
being finalized. As the House Agriculture Committee continues to have 
these hearings and reflects on programs authorized under the 2018 Farm 
Bill, I look forward to working with the Members of this Committee, 
their staff, and the other witnesses here today to help craft the next 
farm bill that works for wheat growers and all of American agriculture. 
Farmers play a key role in helping sustain our rural communities and 
feeding the world. As the farm bill process continues, I would urge 
judicious and expeditious review of authorized programs and work to 
ensure a full reauthorization of farm bill programs prior to the 
expiration of the current farm bill on September 30, 2023, so that 
producers have certainty about the structure of the safety net moving 
forward.
    We look forward to continuing to work with you to ensure a strong 
U.S. farm economy. Thank you again for this opportunity.
            Sincerely,

Nicole Berg,
Vice President,
NAWG.

    The Chairman. Thank you, Ms. Berg.
    Mr. Edgington, please begin when you are ready.

STATEMENT OF CHRIS EDGINGTON, PRESIDENT, NATIONAL CORN GROWERS 
                 ASSOCIATION, SAINT ANSGAR, IA

    Mr. Edgington. Chairman Scott, Ranking Member Thompson, and 
Members of the House Agriculture Committee, thank you for the 
invitation and opportunity to testify today. My name is Chris 
Edgington. I live and farm in Saint Ansgar, Iowa, where 
multiple generations of my family raise primarily corn and 
soybeans. I currently serve as President of the National Corn 
Growers Association, and we are a farmer-led trade association 
that works with our affiliated state associations to help 
protect and advance corn grower interests. On behalf of my 
fellow corn growers, thank you for you and your public service, 
dedication to agriculture, rural America, and the farm economy.
    Since the passage of the 2018 Farm Bill, corn growers have 
faced volatility in the marketplace with periods of low prices 
and higher prices. Today's futures and cash prices appear 
strong; however, there are no assurances that commodity prices 
will continue to trend upwards or if they will even stay where 
they are at. Rising input costs are a major concern, 
specifically fertilizer. Prices have soared to record levels 
and several companies have unfortunately made a bad situation 
worse for growers by applying for tariffs to be applied to 
imports of phosphate and nitrogen fertilizers respectfully. 
NCGA and our state affiliates continue to focus on addressing 
high input costs, including direct requests to those companies 
to voluntarily withdraw their tariff petitions.
    Widespread drought and intense heat impacted much of the 
corn belt last year, and unfortunately, drought conditions have 
continued into 2022. In 2020, corn growers suffered major 
losses due to the devastating derecho that hit millions of 
highly productive cropland. In 2019, crop production was 
heavily impacted with flooding and excess moisture throughout 
the Missouri River basin. Federal crop insurance plays a 
significant role in the wake of natural disasters. Producers 
also appreciate your efforts to extend and improve disaster 
programs for 2020 and 2021 for uncovered risks and losses.
    NCGA has long advocated for market-oriented farm policies. 
Our focus continues on tools geared toward revenue, which 
factors in both yield and price risk that growers face. We 
support the continued ability for producers to chose between 
Agriculture Risk Coverage, ARC-County, ARC-Individual, and 
Price Loss Coverage, or PLC programs. We appreciate the 
commodity program signup period are now similarly tied to crop 
insurance decisions. NCGA supported the development of the ARC 
county and ARC individual programs. In the 2018 Farm Bill, we 
supported shifting the primary focus away from using NASS yield 
data to RMA to help minimize county by county payment 
differences. We also supported additional improvements to yield 
calculations and transparency to payment components. The PLC 
program has historically provided limited support for corn 
growers. Given the trend of increased corn yields year after 
year, though, the growers appreciated the opportunity to 
increase their PLC yield in 2020. And while use of the 
marketing assistance loans is small among our members, the 
program remains an accessible tool for corn growers without 
base acres.
    Implementation of the current farm bill has been fairly 
smooth, helped by the familiarity of the program, lengthy 
signup periods, and increased transparency of the program 
components. We commend the Committee for the continued support 
of web-based decision tools that help facilitate grower 
education and evaluation of the commodity programs and options. 
While COVID-19 has been difficult for face-to-face interaction 
with growers, we appreciate efforts at FSA to provide 
flexibility with producer signup. Opportunities exist to build 
upon those lessons, and to further reduce the reporting burden 
on producers.
    NCGA and our state affiliates are gearing up to provide 
additional input and farm bill recommendations. NCGA has 
already commissioned and conducted a nationwide survey of 
growers on the usage and views of risk management tools and 
conservation programs. Next week, we will gather in New Orleans 
at the annual Commodity Classic, where growers will propose, 
debate, and vote on updates to our policies.
    We look forward to working with the Committee as NCGA 
develops a more formal policy priority. Thank you to 
Representatives Cheri Bustos and Austin Scott for including 
corn growers in the previous Subcommittee roundtable discussion 
on farm safety net programs. As the Committee continues 
oversight of USDA and evaluates the structure of safety net 
programs, please do not hesitate to reach out to growers for 
perspectives at future hearings, listening sessions, 
roundtables, or farm tours.
    In closing, NCGA recognizes the difficult task ahead to 
develop the next farm bill. We appreciate your consideration of 
our views regarding commodity programs, and the need for 
producers to have access to effective risk management tools.
    [The prepared statement of Mr. Edgington follows:]

Prepared Statement of Chris Edgington, President, National Corn Growers 
                     Association, Saint Ansgar, IA
    Chairman Scott, Ranking Member Thompson, and Members of the House 
Agriculture Committee, thank you for the invitation and opportunity to 
testify today.
    My name is Chris Edgington. I live and farm in St. Ansgar, Iowa, 
where multiple generations of my family raise primarily corn and 
soybeans. I graduated with a Bachelor of Science degree in animal 
science from Iowa State University.
    I currently serve as the President of the National Corn Growers 
Association (NCGA). Founded in 1957, we are a farmer-led trade 
association that works with our affiliated state associations to help 
protect and advance corn growers' interests. The NCGA mission is to 
create and increase opportunities for corn growers and our vision is to 
sustainability feed and fuel a growing world.
    On behalf of the nearly 40,000 dues-paying corn farmers nationwide 
and more than 300,000 corn growers who contribute to corn promotion 
programs in their states, thank you for your public service and 
dedication to agriculture, rural America, and the farm economy.
    This morning, I will summarize key challenges corn growers face, 
our reflections on commodity programs, and thoughts on development of 
the next farm bill.
Farm Economy and Challenges Facing Corn Growers
    Corn and corn products remain critically important to the U.S. 
agriculture economy, serving to supply rising domestic needs for food, 
feed, and energy. In 2021, U.S. growers planted over 93.4 million acres 
of corn, which produced over 15.1 billion bushels with a value 
projected at $82.3 billion. Nearly 40% of the corn grown in the U.S. is 
used for livestock feed and another roughly 40% is used for food and 
industrial purposes, including ethanol production.
    Since the passage of the 2018 Farm Bill, agriculture has faced 
volatility in the marketplace with periods of low prices and higher 
prices. In 2020, corn prices fell below $3 during the peak of COVID-19, 
where we saw significant demand destruction for corn, livestock, and 
ethanol products. Today's futures and cash prices appear strong, 
however there are no assurances that commodity prices will continue to 
trend upwards or stay at their current level. In fact, during the 
recent U.S. Department of Agriculture (USDA) Outlook Forum, USDA 
projected that corn prices would decline in 2022 to an average of $5 
per bushel. This would represent an 8.3% decline from the average price 
of $5.45 per bushel in 2021.
    While farmers are fairly optimistic regarding potential returns 
with current market prices, rising input costs are a major concern. 
Early in February, USDA's Economic Research Service (ERS) forecasted 
that net farm income for all of agriculture will be $113.7 billion in 
2022. These estimates represent a decrease in net farm income of $5.4 
billion (4.5 percent) compared to 2021. While income from cash receipts 
is expected to be strong, ERS highlighted that higher production 
expenses are expected to counteract their net effects, along with lower 
direct government payments.
    The Purdue University/CME Group Ag Economy Barometer for February 
2022 captures the squeeze that producers are feeling on their farms. 
Last month's results had the second-lowest sentiment reading since July 
of 2020, which was during the height of the early stages of the 
pandemic. According to the report, ``concerns about rising input costs 
and ongoing supply chain disruptions contributed to weakness in the 
current conditions index.''
    Specifically, fertilizer prices have soared to record levels, and 
several companies have unfortunately made a bad situation worse for 
growers by applying for tariffs to be applied to imports of phosphate 
and nitrogen fertilizers, respectively. NCGA and our state affiliates 
continue to focus on addressing high input costs, including direct 
requests that the companies voluntarily withdraw their tariff 
petitions.
Biofuels
    Ethanol production and demand for low carbon fuel provides an 
important market for corn growers. For the 2021 corn crop, 5.3 billion 
bushels are expected to be used for ethanol production. This includes 
more than 1.1 billion bushels of distillers grains co-products returned 
from ethanol production to animal feeds. Between 2016 and 2021, U.S. 
corn ending stocks have averaged more than 1.5 billion bushels 
annually, illustrating availability of additional feedstock to increase 
renewable fuel production, while continuing to meet and exceed current 
demands for food, feed, and exports.
    Since Congress expanded the Renewable Fuel Standard (RFS) in 2007, 
farmers have increased corn production, not by bringing additional land 
into production, but through higher yields that have resulted in more 
production on less land and with fewer resources. Planted corn acres in 
2021, at 93.36 million acres, were just less than planted acres in 
2007, the year the RFS was expanded, at 93.5 million acres, yet 
production is forecast to increase by 15.9 percent for 2021 compared to 
2007. Corn production has increased because crop yields have increased 
from an average of 150.7 bushels per acre in 2007 to 177 bushels per 
acres in 2021. With the average yield in 1980 at 91 bushels per acre, 
productivity growth is a long-term trend; domestic corn production has 
grown steadily at a 25 year average rate of around two percent, or 250 
million bushels per year.
    These yield increases are due to corn farmers adopting conservation 
and best management practices, along with technology advances. These 
improvements reduce the carbon intensity of both the corn feedstock and 
renewable ethanol, while also protecting and enhancing soil and water 
quality.
Weather Related Disasters
    Widespread drought and intense heat impacted much of the corn belt 
during the 2021 growing season. Unfortunately, those conditions have 
continued into 2022 for many producers across the country. According to 
the U.S. Drought Monitor, as of February 22, 2022, approximately 31% of 
corn production is located in areas experiencing drought. Growers 
across the plains states and the Southeast are still facing severe and 
extreme D2 and D3 drought conditions, right as planting season kicks 
off.
    In 2020, growers across Nebraska, Iowa, Illinois, and Indiana 
suffered major losses due to the devastating derecho. The storm and 
accompanying damaging winds hit millions of acres of highly productive 
cropland in August before corn harvest could begin.
    Corn production was also heavily impacted in 2019 by wet weather 
conditions during planting season with flooding and excess moisture 
across the high plains and throughout the Missouri River Basin. The 
unusually wet spring prevented many farmers from accessing flooded 
fields. Nationwide, 2019 set a record with over 19 million acres of 
cropland reported as prevented from being planted. This included over 
11 million acres of corn that were reported as prevented from being 
planted.
    Federal crop insurance plays a significant role in resilience in 
the wake of natural disasters. According to the Risk Management Agency 
(RMA) Summary of Business, in 2021, corn growers purchased coverage on 
over 83 million acres and companion and endorsement policies on an 
additional 10 million acres nationwide. These risk management policies 
represent liabilities over $52 billion.
    Producers appreciate efforts by the Committee to extend and improve 
disaster programs for 2020 and 2021 for risks and losses that are 
uncovered by Federal crop insurance. We look forward to USDA's 
implementation of this assistance this year.
Farm Bill Commodity Programs
    NCGA has a long history of advocating for market-orientated farm 
policies, including commodity and crop insurance programs that help 
growers manage their risks. Our focus continues to be on accessible and 
defensible tools geared towards revenue, which factors in both yield 
and price risks that growers may face throughout the growing and market 
seasons.
    During the 2018 Farm Bill, we supported increasing the 
opportunities for producers to choose between the commodity programs. 
In 2019, producers were able to elect between the Agriculture Risk 
Coverage County (ARC-County), ARC-Individual, and Price Loss Coverage 
(PLC) programs for the 2019 and 2020 crop years. Producers now have an 
annual opportunity to change their elections, which started in 2021. 
Growers are currently working with their Farm Service Agency (FSA) 
offices ahead of the March 15, 2022, deadline for program elections for 
the upcoming crop year.
    Corn producers have already used this new opportunity to change 
their elections based on market conditions. According to FSA data, for 
the 2019 and 2020 crop years, around 75% base acres nationwide for corn 
were enrolled in PLC, 19% were in ARC-County, and 6% in ARC-Individual. 
For the 2021 crop year, 51% of corn base acres were enrolled in PLC, 
47% in ARC-County, and less than 2% in ARC-Individual.
    We support the continued ability for producers to choose between 
programs, instead of being locked into a 5 year irreversible decision. 
We appreciate that commodity program sign-up periods are now similarly 
timed with crop insurance decisions.
    For the 2020 crop year, the ARC and PLC programs issued a combined 
$41.3 million in payments to corn growers, including $27.3 million 
through the ARC-County and $14 million through ARC-Individual. The PLC 
program did not trigger for corn farmers in 2020. For the 2019 crop 
year, the programs issued a combined $1.56 billion in assistance for 
corn growers, including $1.1 billion through PLC, $280 million through 
ARC-County and $183 million through ARC-Individual.
    The design of the programs, combined with the delay in payments 
until October following the marketing year, results in only 2 years of 
payment data to evaluate. However, NCGA appreciates the Committee and 
USDA's work to provide more transparency to payment components. FSA now 
regularly publishes key information regarding benchmark prices, yields, 
revenues, and market average prices for both programs.
    While neither commodity program is expected to trigger for many 
corn producers in 2022, this reflects the counter-cyclic design of the 
commodity programs. However, if conditions were to change through the 
growing and marketing seasons and result in a sharp decline in 
commodity prices along with major yield losses, the commodity programs 
could provide some level of assistance.
ARC-County and ARC-Individual
    NCGA supported the development of the ARC-County and ARC-Individual 
programs and their continuation. During implementation of the 2014 Farm 
Bill, producers experienced large differences between payments in 
similarly situated counties. To minimize future county-by-county 
differences, in the 2018 Farm Bill we strongly supported shifting the 
primary source of yield data for the ARC-County program from the 
National Agricultural Statistical Service (NASS) to aggregated data 
from RMA. NCGA also supported requiring assistance be determined by 
physical location of the farm, not administrative counties.
    We are thankful for multiple improvements to the ARC-County program 
including provisions incorporating trend adjusted yields and increasing 
the transitional yield, i.e., yield plug. Given the nature of a county-
based program, growers continue to experience some disparities in 
payments to producers in different counties, but there is now more 
confidence in the structure and data that supports the program.
PLC and MALs
    The 2018 Farm Bill kept the statutory reference prices for the PLC 
program and raised loan rates across most commodities. For corn, the 
PLC reference price is set at $3.70 and the loan rate under the 
Marketing Assistance Loan (MAL) program was raised from $1.95 to $2.20. 
The PLC program has historically provided more limited support for our 
growers than the ARC-County program. However, for the first 2 years of 
the 2018 Farm Bill more corn base acres were elected to PLC, reflecting 
the low-price environment for those years and producers' ability to 
change elections more frequently.
    Given the continued trend of increased corn yields year after year, 
growers appreciated the option to update PLC yields on a farm and crop 
basis in 2020. The new effective reference price provision has not yet 
triggered for corn.
    While use of MALs is small among our members, the program remains 
an accessible commodity program tool for corn growers without base 
acres. According to FSA, in 2019, there were 13,777 MAL loans issued 
for 782.8 million bushels of farm stored corn and in 2021 there were 
only 5,675 loans on 435 million bushels.
Farm Bill Implementation
    FSA continues to be a great partner with producers and commodity 
organizations. Implementation of the current farm bill has been fairly 
smooth, helped by familiarity of the programs, lengthy sign-up periods, 
and increased transparency of the program components, as well as USDA 
fact sheets and additional resources on farmers.gov. We commend the 
Committee for continued support of web-based decision tools that help 
facilitate growers' education and evaluation of commodity programs and 
options.
    Overall, the quality of customer service at the county offices can 
depend on whether there is adequate and experienced staffing. NCGA is 
supportive of providing resources for implementation and staff 
training, which makes a positive impact on the roll out of changes to 
commodity programs. While the COVID-19 pandemic has been difficult for 
face-to-face interactions with growers, we appreciate agency efforts to 
provide flexibility with producer sign-ups. USDA deserves credit for 
continuing to implement and administer commodity and disaster programs.
    NCGA encourages the continuation of the Acreage and Crop Reporting 
Streamlining Initiative (ACRSI) and similar efforts to improve the 
farmer customer experience and create greater efficiency for multiple 
USDA agencies. The agencies are already working closer to together and 
should continue to share common data and best practices.
    Opportunities exist to build upon the lessons of the pandemic and 
to further reduce the reporting burden on producers. USDA can continue 
to find more ways to use data already submitted to the department or 
for farmers to submit additional information electronically, which may 
reduce the number and length of in-person visits to county offices.
NCGA Farm Bill Process
    NCGA and our state affiliates are gearing up to provide additional 
input and farm bill recommendations. Throughout our homework phase and 
policy development process, we are grounded in our grassroots process. 
The listening phase with our members has already begun with several 
state associations holding or planning listening sessions and 
collecting direct feedback from growers.
    We will be data driven in our efforts. NCGA has already 
commissioned and conducted a nationwide survey of grower members and 
non-members on the usage and views of risk management tools and 
conservation programs. Grower led Action Teams continue to hold 
discussions on programs and have sought out additional analysis that 
will be helpful in developing future priorities. We look forward to 
sharing with the Committee the results, lessons, and key findings of 
this work in the months ahead.
    Next week, corn growers will gather in New Orleans at the annual 
Commodity Classic where growers will propose, debate, and vote on 
updates to our policies. Later this summer will we gather for a second 
``Corn Congress'' session. We look forward to working with the 
Committee as NCGA develops more formal policy priorities throughout the 
year.
Program Evaluation
    We understand that complexity of the farm economy and commodity 
programs require constant education of Members of Congress on the 
importance and structure of the safety net. There will also be 
important conversations and considerations regarding the ability to 
accurately explain and defend farm programs to growers, taxpayers, and 
other interests. NCGA will continue to highlight lessons we have 
learned from the past, including when some have the mistaken belief 
that commodity prices will always stay high.
    Thank you to Representatives Cheri Bustos and Austin Scott for 
including corn growers in previous General Farm Commodities and Risk 
Management Subcommittee round table discussions on farm safety net 
programs. As the Committee continues oversight of USDA and evaluates 
the structure of safety net programs, we appreciate additional 
opportunities to provide feedback. Please do not hesitate to reach out 
for growers' perspectives at future hearings, listening sessions, 
roundtables, and farm tours.
    In closing, NCGA recognizes the difficult task ahead for the 
Committee to develop the next farm bill. We understand that there will 
be continued budget challenges and varied approaches to confronting 
current issues impacting agriculture. We appreciate your consideration 
of our views regarding commodity programs and the need for producers to 
have access to effective risk management tools.

    The Chairman. Thank you.
    Ms. Ford, you may begin when you are ready.

STATEMENT OF JACLYN D. FORD, DELEGATE, NATIONAL COTTON COUNCIL, 
                          ALAPAHA, GA

    Ms. Ford. Good morning. I am Jaclyn Dixon Ford, a cotton 
producer and ginner from Alapaha, Georgia. My family and I grow 
cotton, peanuts, corn, pecans, and raise cattle. I am also Vice 
President and Manager of my family's ginning operation. I am 
testifying today on behalf of the National Cotton Council, the 
central organization of the United States cotton industry, 
representing all seven segments.
    U.S. cotton acres are expected to increase this year due to 
higher prices. Although cotton prices are stronger than in 
recent years, higher input prices and supply chain disruptions 
have resulted in significant increases in production costs. 
Most producers are expecting a 25 to 40 percent increase in 
costs, largely due to higher fertilizer and pesticide prices.
    While demand for U.S. exports has been very strong in the 
2021 marketing year, transportation and logistics issues 
continue to impact U.S. cotton shipments. An effective safety 
net for producers must consist of two key components. First, an 
effective commodity policy that provides either price or 
revenue protection for prolonged periods of low prices and 
depressed market conditions; second, a strong and fully 
accessible suite of crop insurance products that producers can 
purchase and tailor to their risk management needs.
    The yearly election of either ARC or PLC in the 2018 Farm 
Bill has worked well for growers and should continue in future 
farm bills. In this farm bill, producers have overwhelmingly 
enrolled seed cotton base acres in the PLC program at over 90 
percent annually. We know that ag markets are cyclical, and an 
effective safety net is imperative for the inevitable times of 
low prices. The Non-Recourse Marketing Assistance Loan Program 
for upland cotton remains a cornerstone of farm policy for our 
industry during times of both low and high prices. It is 
necessary for multiple industry segments to effectively market 
cotton and provide cash flow for producers. In periods of low 
prices, if growers choose to forego the marketing loan, they 
may receive a Loan Deficiency Payment representing the 
difference in the market price and the loan rate. This 
important component of the program should be retained.
    Our industry is opposed to any further tightening of 
payment limits and program eligibility requirements. We believe 
these policies are already too restrictive, given the size and 
scale of production agriculture necessary to be competitive in 
today's global market. Artificially limiting benefits is a 
disincentive to economic efficiency and undermines the ability 
to compete with heavily subsidized foreign ag products.
    The 2018 Farm Bill continued the ELS Program, Cotton Loan 
Program, as well as a provision to ensure U.S. Pima cotton 
remains competitive in international markets. The balance 
between the upland and Pima program is important to ensure that 
acreage is planted in response to market signals.
    The stability of the U.S. textile industry in recent years 
and their expected future growth can be attributed to the 
continued benefits of the Economic Adjustment Assistance for 
Textile Mills. Considering the need to re-shore or near-shore 
manufacturing of critical goods and materials, a strong and 
robust U.S. textile industry is key. This industry is vital to 
produce many products for our defense industry and personal 
protection equipment, as highlighted during the COVID pandemic.
    In recent years, Congress authorized several rounds of ad 
hoc disaster assistance. While we recognize the budgetary 
constraints, we believe the Committee should review options to 
include either a permanent disaster program in the upcoming 
farm bill, or seek policy options to increase insurance 
coverage levels that are cost effective for producers.
    Since the passage of the 2018 Farm Bill, there have been 
several forms of ad hoc assistance provided outside of the farm 
bill. As Congress begins to plan the path forward for the next 
farm bill, I urge the Committee to seek additional funding for 
this important legislation.
    In closing, I encourage the Committee to write a farm bill 
that provides long-term stability for the future. There will be 
price declines from where we are today. There will be disasters 
that are larger than the essential assistance commodity 
programs and crop insurance provide. There will be trade 
disputes that wreak havoc on our export markets. The NCC looks 
forward to working with the Committee, ag organizations, and 
other stakeholders to develop and pass a new farm bill that 
will effectively address the needs of all commodities and all 
producers in all regions of the country.
    Thank you for this opportunity, and I would be pleased to 
respond to any questions.
    [The prepared statement of Ms. Ford follows:]

    Prepared Statement of Jaclyn D. Ford, Delegate, National Cotton 
                          Council, Alapaha, GA
Introduction
    Good morning, I am Jaclyn Ford, a cotton producer and ginner from 
Alapaha, Georgia and serve as a delegate for the National Cotton 
Council. My family and I grow cotton, peanuts, corn, pecans and raise 
cattle in Berrien County. I am also Vice President and Chief Operating 
Officer of Dixon Gin Co., Inc. and serve as the company director of 
Commodities Marketing. Currently, I serve on the Georgia Economic 
Development Board and the Georgia Farm Bureau Commodities Committee for 
Cotton. I formerly served on the Georgia Farm Service Agency State 
Committee. In addition, I am serving as Vice Chair on the Board of 
Trustees for Abraham Baldwin Agricultural College, and on the Georgia 
Agribusiness Council Board, and the South Georgia Medical Center--
Berrien Campus Authority.
    The National Cotton Council (NCC) is the central organization of 
the United States cotton industry. Its members include producers, 
ginners, cottonseed processors and merchandizers, merchants, 
cooperatives, warehousers, and textile manufacturers. A majority of the 
industry is concentrated in 17 cotton-producing states stretching from 
California to Virginia. U.S. cotton producers cultivate between 10 and 
14 million acres of cotton with production averaging 12 to 20 million 
480 lb bales annually. The downstream manufacturers of cotton apparel 
and home furnishings are in virtually every state. Farms and businesses 
directly involved in the production, distribution and processing of 
cotton employ more than 115,000 workers and produce direct business 
revenue of more than $22 billion. Annual cotton production is valued at 
more than $5.5 billion at the farm gate, the point at which the 
producer markets the crop. Accounting for the ripple effect of cotton 
through the broader economy, direct and indirect employment surpasses 
265,000 workers with economic activity of almost $75 billion. In 
addition to the cotton fiber, cottonseed products are used for 
livestock feed and cottonseed oil is used as an ingredient in food 
products as well as being a premium cooking oil.
Economic Overview
    U.S. cotton acreage is expected to increase in 2022 due to higher 
prices. Recent estimates suggest that 2022 acreage could range from 
12.0 to 12.7 million as compared to 11.2 million acres in 2021. 
Although planted acreage is expected to be higher than last year, 
unharvested acreage is also expected to be higher due to dry conditions 
in the Southwest. Acreage continues to decline in the West due to 
prolonged drought conditions and water availability issues.
    Although cotton prices are higher than in recent years, higher 
input prices and supply chain disruptions have resulted in significant 
increases in production costs for 2022. Most producers are expecting a 
25 to 40% increase in input costs in 2022, largely due to higher 
fertilizer and pesticide costs. As compared to a year ago, fertilizer 
prices have increased by 55-120% (Figure 1).
Figure 1. Fertilizer Prices


          Source: USDA AMS.

    World cotton demand remains strong and is projected to increase to 
almost 126.0 million bales for the 2022 marketing year, which 
represents an all-time high for cotton demand. While demand for U.S. 
exports has been very strong thus far in the 2021 marketing year, 
transportation and logistics issues continue to impact U.S. cotton 
shipments. The latest NCC estimate of U.S. exports for the 2021 
marketing year is 13.8 million bales, which is 950 thousand bales below 
the February 2022 USDA estimate. The current supply chain challenges 
are adding economic stress to our merchandising segments that were 
still feeling the impacts of the sharp slowdown in demand when COVID 
shutdowns were at their peak. We continue to look for opportunities to 
assist these critical segments of the industry.
Safety Net Programs
    While we are here today to talk about farm bill Title I programs, 
an effective safety net for producers must consist of two key 
components: (1) an effective commodity policy that provides either 
price or revenue protection to address prolonged periods of low prices 
and depressed market conditions that span multiple years; and (2) a 
strong and fully accessible suite of crop insurance products that 
producers can purchase to tailor their risk management to their 
specific needs to address yield and price volatility within the growing 
season.
    The yearly producer election of either Agriculture Risk Coverage 
(ARC) or Price Loss Coverage (PLC) included in the 2018 Farm Bill has 
worked well for growers and should continue in future farm bills. Under 
the 2018 Farm Bill, producers have overwhelmingly enrolled seed cotton 
base acres in the PLC program, at over 90% annually. We know that 
agriculture markets are cyclical, and an effective safety net is 
imperative for the inevitable times of low prices. The combination of 
commodity program options and crop insurance gives farmers as well as 
their lenders the confidence entering planting season knowing that 
downside risk is mitigated in periods of steep price decline or a 
significant loss of production.
Upland Cotton Marketing Loan and Seed Cotton Loan
    The non-recourse marketing loan program for upland cotton remains a 
cornerstone of farm policy for the U.S. cotton industry. While current 
prices are well above the loan rate, we know that will not always be 
the case. During times of low prices for U.S. cotton, the marketing 
loan program is an especially crucial tool for multiple segments of the 
cotton industry to effectively market cotton and provide cash flow for 
producers to meet financial obligations. Even in times of higher market 
prices, the marketing loan is utilized by the cotton industry to 
provide cash flow for producers and flexibility in marketing. One of 
the hallmarks of the marketing loan program is its function to ensure 
cotton flows through the marketing channels and encourages orderly 
marketing of the crop throughout the year. In recent years, over 50% of 
the upland cotton crop enters the loan and use of the loan approaches 
80% when market prices drop. Also, in periods of low prices, if growers 
choose to forgo the marketing loan, they may receive a Loan Deficiency 
Payment (LDP) representing the difference in the market price and the 
loan rate. This is an important component of the marketing loan program 
that should be retained.
    Complete automation of the marketing loan program should be 
addressed in the next farm bill. During the December 2018 lapse in 
government funding, these programs were severely impacted due to the 
need for direct personnel involvement in portions of processing the 
entry and redemption of cotton in the marketing loan program. During 
this period, some growers were not able to enter cotton into the loan 
and access those funds, while others could not sell their cotton 
because they could not redeem the loan. We urge this Committee to work 
with USDA to provide the necessary support to ensure that any future 
lapse in government funding does not negatively impact the marketing 
loan program.
    Another loan program that has been more utilized in recent years is 
the Seed Cotton Recourse Loan. Seed cotton recourse loans help upland 
and Extra Long Staple (ELS) cotton producers meet cash flow needs while 
waiting for their harvested cotton to be ginned so it is then 
marketable. Recourse loans also allow producers to store production at 
harvest and provide for a more orderly marketing of cotton throughout 
the year. Several factors such as the speed and efficiency of harvest 
operations and longer cotton ginning seasons have contributed to the 
increased use of this program.
Payment Limits and Program Eligibility
    Our industry is opposed to any further tightening of payment limits 
and program eligibility requirements, as we believe these policies are 
already too burdensome and restrictive in light of the size and scale 
of production agriculture necessary to be competitive and viable in 
today's global market. The NCC has always maintained that effective 
farm policy must maximize participation without regard to farm size or 
income. Artificially limiting benefits is a disincentive to economic 
efficiency and undermines the ability to compete with heavily 
subsidized foreign agricultural products. Artificially limited benefits 
are also incompatible with a market-oriented farm policy. In fact, the 
current program limits are incompatible with the cost structure and 
capital investments necessary for today's family farms. We are 
encouraged that Congress has recognized this reality in recent disaster 
assistance that included increased payment limit levels to help account 
for more of the losses incurred. This same consideration should be 
given to Title I program limits when the next farm bill is being 
developed. Other proposed arbitrary restrictions regarding the 
contribution of management and labor through changes to the definition 
of `actively engaged' are out of touch with today's reality on most 
farming operations and would only contribute to inefficiencies.
Extra Long Staple Cotton Policies
    There are important policies in place for Extra Long Staple (ELS) 
or Pima cotton as well. The 2018 Farm Bill continued the ELS cotton 
loan program as well as a competitiveness provision to ensure U.S. Pima 
cotton remains competitive in international markets. The balance 
between the upland and Pima programs is important to ensure that 
acreage is planted in response to market signals.
Economic Adjustment Assistance for Textile Mills
    After a decade of experiencing a precipitous decline in the amount 
of cotton used by U.S. textile mills, U.S. mill consumption has 
stabilized since 2008 due to ongoing assistance provided in the farm 
bill.
    The recent years of stability and expected future growth can be 
attributed to the continued benefits of the Economic Adjustment 
Assistance for Textile Mills (EAATM), originally authorized in the 2008 
Farm Bill. Recipients must agree to invest the proceeds in equipment 
and manufacturing plants, including construction of new facilities as 
well as modernization and expansion of existing facilities. EAATM funds 
have allowed investments in new equipment and technology, thus allowing 
companies to reduce costs, increase efficiency and become more 
competitive. By allowing U.S. textile mills to make the new investments 
necessary to remain competitive, the program supports a manufacturing 
base that brings jobs to U.S. workers. Furthermore, in the current 
global environment and the need to re-shore or near-shore manufacturing 
of critical goods and materials, having a strong and robust U.S. 
textile manufacturing sector is key to produce many products for our 
defense industry and personal protection equipment (PPE) as highlighted 
during the COVID pandemic.
Disaster Programs
    In recent years, Congress authorized several rounds of ad hoc 
disaster assistance in response to hurricanes, wildfires, wind events, 
drought, and other natural disasters. While ad hoc disaster assistance 
has been extremely helpful to farmers and allowed many of them to 
remain in business, they are never timely. The most recent disaster 
assistance was passed by Congress in September of last year and 
unfortunately USDA has yet to unveil most details of the program so 
crop producers can begin to apply for the assistance for disaster 
losses in 2020 and/or 2021. While it is helpful to know that assistance 
is coming, it makes planning for the next crop year extremely difficult 
for growers and lenders alike. While we recognize the budgetary 
constraints, we believe the Committee should review options to include 
either a permanent disaster assistance program in the upcoming farm 
bill or seek policy options to help further minimize the deductible 
producers are left to cover with most existing, affordable crop 
insurance products.
Farm Bill Resources
    Since the passage of the 2018 Farm Bill there have been several 
forms of other ad hoc assistance provided to the agriculture industry 
outside of the farm bill construct. Whether it is disaster assistance 
with WHIP/WHIP+, the Market Facilitation Program (MFP) or COVID 
pandemic relief (CFAP), two things are certain: they all were necessary 
for various regions and commodities and they were separate from the 
farm bill because the existing policies and programs were not fully 
meeting the extraordinary and unpredictable need. As Congress begins to 
plan the path forward for the 2023 Farm Bill, I urge you to seek 
additional funding for this important legislation. The dynamics faced 
by the agriculture industry continue to change, evolve, and become more 
volatile. With those changes, America's farmers need a farm bill that 
has the resources to ensure that the American people and the world have 
a safe and affordable supply of food and fiber.
Conclusion
    In closing, I encourage the Committee to write a farm bill that 
provides long-term stability for the future. There will be price 
declines from where they are today, there will be natural disasters 
with losses more severe than the essential assistance that commodity 
programs and crop insurance can respond to, and there will be trade 
disputes that can wreak havoc on our export markets.
    The NCC looks forward to working with the Committee and all 
commodity and farm organizations and other stakeholders to develop and 
pass a new farm bill that effectively addresses the needs of all 
commodities and all producers in all regions of the country.
    Thank you for this opportunity, and I would be pleased to respond 
to any questions.

    The Chairman. Thank you, Ms. Ford.
    And now, Ms. Ulibarri, please begin when you are ready.

        STATEMENT OF VERITY ULIBARRI, MEMBER, FARM BILL 
  ADVISORY COMMITTEE, NATIONAL SORGHUM PRODUCERS, MELROSE, NM

    Ms. Ulibarri. Good morning. Thank you, Chairman Scott, 
Ranking Member Thompson, and Members of the Committee for the 
opportunity to speak to the Committee today. My name is Verity 
Ulibarri. I am a fifth-generation diversified farmer from 
Melrose, New Mexico, on the east central side of the state. I 
have been a member of the National Sorghum Producers for more 
than 10 years.
    The climate in my region necessitates being very 
conscientious about the crops we grow, as we are very limited 
in the amount of rainfall we receive each year. The 20 year 
average for rainfall in my county is just under 16", and in 
2020, we saw a record low of only 6.7" of rain in an entire 
year. The innate drought tolerance of sorghum as a resource-
conserving crop makes it an excellent fit for my operation.
    Just as the harsh climate in eastern New Mexico requires me 
to carefully consider the optimal crops to plant each year, it 
also requires me to take steps to mitigate my risk. This is 
where Title I becomes incredibly important, not just to me, but 
all farmers and ranchers across the country, as we are seeing 
increasingly erratic weather patterns: longer and more extreme 
droughts in some regions, and more frequent flooding in other 
areas. The farm safety net and robust crop insurance that helps 
farmers adequately mitigate risk and volatility becomes vital 
to the sustainability and continuation of family farms.
    We are thankful for the support provided by crop insurance. 
It continues to be the cornerstone of the modern safety net, 
and we appreciate all the work that has been done to defend and 
strengthen it. From a sorghum standpoint, there is still much 
work to be done in this area. Due to the nature of the program, 
drought tolerant, resource conserving crops like sorghum are 
not rewarded, but instead penalized, rated such that insurance 
for competing crops is more affordable. We worked closely with 
the Committee in the last farm bill to address this issue, and 
continue to work closely with RMA.
    Due to the leadership of this Committee during the 2018 
Farm Bill, we have had the opportunity to collaborate with RMA 
on a study paving the way for an irrigated insurance product 
that enables sorghum farmers to insure sorghum at higher yield 
levels and for less premium. Many irrigated farmers on the 
Western Plains are facing significant declines in ground water 
availability, and transitioning some or all of their irrigated 
acres to sorghum enables them to use water much more 
efficiently. However, under current yield and rating 
structures, most existing and perspective sorghum farmers 
actually face a penalty. Given the collaboration with RMA, we 
are optimistic that new options will be available for the 2023 
crop year.
    On Title I specifically, the changes to the ARC and PLC 
programs have been positive overall. Farmers in the sorghum 
belt use PLC more extensively than ARC, but for those that do 
use ARC, the new formula has been helpful. The change to the 
way in which the reference price is calculated was also a very 
positive development, as it makes reference prices more 
reflective of price and cost realities. However, given the 
level to which prices and costs have increased, and the speed 
with which this has occurred, PLC reference prices are now too 
low. The same situation is true in marketing loans, which 
remain an important cash flow tool for our farmers, but are now 
much too low relative to current risk.
    We believe reference prices and marketing loan rates must 
be adjusted upward to remain relevant, and would urge the 
Committee to consider an index or inflator tied to fuel and 
fertilizer prices, as U.S. farmers need to maintain their 
productivity through such turbulent times.
    Allowing an annual choice between ARC and PLC has also been 
a welcome change, and our farmers greatly appreciated the 
opportunity to update base acres. However, these now routine 
activities combined with existing program and the growing 
complexity of these programs sheds new light on the importance 
of staffing at FSA. Delivering these programs well requires 
resources, staff members that can actually go into the office 
and work with farmers. FSA programs will continue to be a key 
component of the farm safety net, so we encourage additional 
resources for FSA to deliver these programs.
    Thank you for the opportunity to offer a firsthand account 
of how the existing farm bill Title I programs are functioning 
in the sorghum industry. I look forward to answering any 
questions you may for me today.
    [The prepared statement of Ms. Ulibarri follows:]

   Prepared Statement of Verity Ulibarri, Member, Farm Bill Advisory 
           Committee, National Sorghum Producers, Melrose, NM
    Thank you, Chairman Scott and Ranking Member Thompson, for the 
opportunity to speak to the Committee today. My name is Verity 
Ulibarri, and I am a fifth-generation diversified farmer from Melrose, 
New Mexico, on the eastern central side of the state and have been a 
member of National Sorghum Producers for more than 10 years. The 
climate in my region necessitates being very conscientious about the 
crops we grow, as we are very limited on the amount of rainfall we 
receive each year. The 20 year average for rainfall in my county is 
just under 16", and in 2020 we saw a record-low of only 6.7" of rain 
for the entire year. The innate drought-tolerance of sorghum as The 
Resource-Conserving CropTM make it an excellent fit for my 
operation.
    Just as the harsh climate in eastern New Mexico requires me to 
carefully consider the optimal crops to plant each year, it also 
requires me to take steps to mitigate my risk. This is where Title [I] 
becomes incredibly important not just to me but all farmers and 
ranchers across the country. As we are seeing continuous erratic 
weather patterns--longer and more extreme droughts in some regions and 
more frequent flooding in other areas--the farm safety net and robust 
crop insurance program that helps farmers adequately mitigate risk and 
volatility becomes vital to the sustainability and continuation of 
family farms. Similarly, the disaster funding provided at various times 
over the past few years has been instrumental to this end, and if 
funding is available, sorghum farmers would like to see a disaster-type 
program become permanent law.
    We are thankful for the support provided by crop insurance. I know 
it is not ``Title [I],'' but it continues to be the cornerstone of the 
modern safety net, and we appreciate all the work that has been done to 
defend and strengthen it. From a sorghum standpoint, there is still 
much work to be done in this area. Due to the nature of the program, 
drought-tolerant, resource-conserving crops like sorghum are not 
rewarded but instead punished--rated such that insurance for competing 
crops is more affordable. We worked closely with the Committee in the 
last farm bill to address this issue, and continue to work closely with 
RMA. However, we still have a long way to go in providing real 
solutions to farmers.
    Due to the leadership of this Committee during the 2018 Farm Bill, 
we have had the opportunity to collaborate with RMA on a study paving 
the way for an irrigated insurance product that enables sorghum farmers 
to insure sorghum at higher yield levels and for less premium. Many 
irrigated farmers on the western plains are facing significant declines 
in groundwater availability, and transitioning some or all of their 
irrigated acres to sorghum enables them to use water much more 
efficiently. However, under current yield and rating structures, most 
existing and prospective sorghum farmers actually face a penalty. 
Collaborating with RMA, we are optimistic a new option will be 
available for the 2023 crop year.
    On Title [I] specifically, the changes to the ARC and PLC programs 
have been positive overall. Farmers in the Sorghum Belt use PLC more 
extensively than ARC, but for those that do use ARC, the new formula 
has been helpful. The change to the way in which the reference price is 
calculated was also a very positive development as it makes reference 
prices more reflective of price and cost realities. However, given the 
level to which prices and costs have increased and the speed with which 
this has occurred, PLC reference prices are now too low. The same 
situation is true of marketing loans, which remain an important cash 
flow tool for our farmers but are now much too low relative to current 
risk. We believe reference prices and marketing loan rates must be 
adjusted upward to remain relevant, and would urge the Committee to 
consider an index or more aggressive inflator tied to fuel and 
fertilizer prices as U.S. farmers need to maintain their productivity 
through such turbulent times.

    The Chairman. Thank you very much.
    And now, Mr. Coleman, please begin when you are ready.

STATEMENT OF CLARK COLEMAN, BISMARCK, ND; ON BEHALF OF NATIONAL 
                SUNFLOWER ASSOCIATION, NATIONAL 
            BARLEY GROWERS ASSOCIATION, U.S. CANOLA 
        ASSOCIATION, AND USA DRY PEA AND LENTIL COUNCIL

    Mr. Coleman. Good morning, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee. My name is Clark 
Coleman and I am a fourth-generation farmer from Bismarck, 
North Dakota. This year, I will plant ten different crops, 
including confection oil sunflowers, malting barley, canola, 
yellow peas, soybeans, grain and silage corn, spring wheat, 
Durum, and we calve out 600 head of cows. This crop diversity 
is not uncommon in the northern tier, where many farmers 
typically grow at least four or five different crops every 
year. I am past President and Chairman of the National 
Sunflower Association, and still serve on the National 
Sunflower Board. I will also speak today on behalf of the 
National Barley Growers Association, the U.S. Canola 
Association, the U.S. Dry Pea and Lentil Council. I will share 
perspectives on Title I program elections and dynamics for 
crops and the relationship of the reference prices to their 
market prices.
    Overall, the Title I programs along with the crop insurance 
programs are the backbone of most important factors in the 
stability of our operation. Without them, it would be difficult 
or impossible to get financing from a credible lender for my 
seed, fertilizer, and other production input costs, which are 
experiencing significant increases this year.
    The Title I programs are largely working as they were 
intended for my farm and for my crops that I produce. The 
options and flexibility provided under the 2018 Farm Bill 
allows producers to choose between ARC and PLC program options 
on a farm-by-farm and crop-by-crop basis. This has given the 
farmers the latitude to develop protection plans that best fit 
their operations.
    The policy decoupling farm program payments from planting 
continues to work well, providing planting flexibility by tying 
income or revenue protection to recent historical base acres, 
rather than current year crop plantings has allowed farmers to 
respond to market signals rather than the prospect of receiving 
government payments.
    As a producer of multiple crops, it is fundamentally 
important that my decisions are based on market signals. The 
Title I programs are serving as a safety net, not a market 
driver. The reference prices established in the 2018 Farm Bill 
for crops that I grow were reflective of the market for the 
first few years; however, the dynamic may be changing as we are 
experiencing a surge in prices of fertilizers and other inputs 
that significantly increase the production costs and risks.
    I would like to take this opportunity to note that the 
current issues with input supplies and prices highlights the 
need to promote domestic fertilizer and chemical manufacturing. 
This should be considered a food security and national security 
issue and should be a focus of any efforts to make our supply 
chains more resilient.
    For sunflowers, PLC program has been primarily used by 
producers, but ARC also has been used. Oil-type sunflowers are 
currently at $33, and confections over $40 per hundredweight. 
Last year at this time, oil-type sunflowers were $21.60 and 
confections were $26.80 per hundredweight. The reference prices 
for the other oilseed categories under the current farm bill is 
$20.15 per hundredweight. This reference price level, like 
others, has been unchanged since 2014. At this price, the other 
oilseed marketing loan rate at $10.19 per hundredweight is not 
used very often, unless it is for cash flow. The same is true 
for loan rates for all the crops that I grow. If market prices 
move to the loan rates for these crops, it would be difficult 
to recover costs.
    For barley, PLC has been the primary program election with 
a small amount of ARC payments. The barley reference price is 
$4.95 per bushel, and production contracts for malting barley 
were in the $6 range in 2020 and 2021, and barley prices are 
currently at the $7 to $8 range.
    For canola, PLC has been the choice with very little under 
ARC. Canola prices this year have been in the range from 30 to 
38 per hundredweight, while the reference price for other 
oilseeds is $20.15 per hundredweight.
    The pulse crops, dry peas, lentils, and chickpeas, have 
been primarily covered by PLC. Over the past several years, 
prices of pulses have experienced significant swings from low 
levels due to tariffs and disruptions in key markets to upward 
spikes in 2020. Unfortunately, the supply chain disruptions 
have prevented the pulse product producers from capitalizing on 
current high prices.
    The reference prices for dry peas is 11 per pound, lentils 
and small chickpeas are 19 per pound, and large chickpeas is 
21 per pound. The reference price for large chickpeas 
established in the 2018 Farm Bill did not reflect the average 
market price for Olympic and average market prices at the time, 
and it does not reflect the current average price. The 
inadequate reference prices combined with the current historic 
highs for input expenses is a primary farm bill concern for us 
pulse producers.
    I want to take this opportunity to offer my perspective on 
the FSA offices and staff that administer and implement the 
farm programs. Staff vacancies and shortages in FSA offices is 
a significant and growing concern for producers. Retirements 
and workloads have resulted in lots of experience leaving the 
organization. The larger counties of western states require 
separate county offices for ease of access, personal service, 
and best execution of programs. We need more FSA resources, not 
consolidated offices.
    In closing, I would reiterate the existing farm program 
structure that provides growers with the farm-by-farm, crop-by-
crop options, and planting flexibility through de-coupling are 
working well. The ARC and PLC programs and reference prices 
have been working as intended, but adjustments may be needed to 
adjust to emerging dynamics. I hope the stability and certainty 
of the farm safety net that the Title I and crop insurance 
program represent remain the top priority and driving force in 
the timely reauthorization of the bipartisan farm bill of 2023. 
Farmers as well as consumers that rely on the food we produce 
are facing lots of challenges and uncertainty. Additional 
instability and uncertainty in the farm safety net and our food 
production system is the last thing we need.
    Thank you again for the opportunity to participate.
    [The prepared statement of Mr. Coleman follows:]

    Prepared Statement of Clark Coleman, Bismarck, ND; on Behalf of 
 National Sunflower Association, National Barley Growers Association, 
      U.S. Canola Association, and USA Dry Pea and Lentil Council
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee,

    My name is Clark Coleman and I am a farmer from Bismarck, North 
Dakota. This year I will plant ten different crops, including 
confection and oil sunflowers, malting barley, canola, yellow peas, 
soybeans, grain and silage corn, spring wheat and Durum wheat. This 
crop diversity is not uncommon in the northern tier, where many farms 
typically grow at least four or five different crops every year.
    I am a past President and Chairman of the National Sunflower 
Association and still serve on the National Sunflower board. I will 
also speak today on behalf of the National Barley Growers Association, 
U.S. Canola Association, and USA Dry Pea & Lentil Council.
    I will share perspectives on the Title I farm program elections and 
dynamics for the crops that I grow and the relationship of their 
reference prices to their market prices.
    Overall, the Title I programs, along with the crop insurance 
program, are the backbone and most important factors in the stability 
of my operation. Without them it would be difficult or impossible to 
get financing from a credible lender for my seed, fertilizer and other 
production input costs--which are experiencing significant increases 
this year.
    The Title I programs are largely working as they were intended for 
my farm and for the crops that I produce. The options and flexibility 
provided under the 2018 Farm Bill allows producers to choose between 
the ARC and PLC program options on a farm-by-farm and crop-by-crop 
basis. This has given farmers the latitude to develop protection plans 
that best fit their operations.
    The policy of decoupling farm program payments from plantings 
continues to work well. Providing planting flexibility by tying income 
or revenue protection to recent historical base acres rather than 
current-year crop plantings has allowed farmers to respond to market 
signals rather than the prospect of receiving government payments. As a 
producer of multiple crops, it is fundamentally important that my 
decisions are based on market signals. The Title I programs are serving 
as a safety net, not a market driver.
    The reference prices established in the 2018 Farm Bill for the 
crops that I grow were reflective of the market for the first few 
years. However, that dynamic may be changing as we are experiencing a 
surge in the prices of fertilizer and other inputs that will 
significantly increase production costs and risks.
    I would like to take this opportunity to note that the current 
issues with input supplies and prices highlights the need to promote 
domestic fertilizer and chemical manufacturing. This should be 
considered a food security and national security issue and should be a 
focus of any efforts to make our supply chains more resilient.
    For sunflowers, the PLC program has been primarily utilized by 
producers, but ARC has also been used.
    Oil type sunflowers are currently over $33, and confections over 
$40 per cwt. Note: Oil sunflowers provide sunflower oil for the food 
ingredient market, while confection sunflowers are what you eat as a 
snack, especially baseball players and fans at sporting events! Last 
year at this time, oil type sunflowers were at $21.60, and confections 
were $26.80 per cwt. The reference price for the other oilseeds 
category under the current farm bill is $20.15 per cwt. This reference 
price level, like others, has been unchanged since the 2014 Farm Bill.
    At these prices, the other oilseed marketing loan rate of $10.19 
per cwt is not used very often, unless it is for cash flow. The same is 
true of the loan rates for all of the crops that I grow. If market 
prices moved to the loan rates for these crops, it would be difficult 
to recover costs.
    For barley, PLC has been the primary program election, with a small 
amount of ARC payments
    The barley reference price is $4.95/bushel and production contracts 
for malting barley were in the $6 range in 2020 & 2021 and barley 
prices are currently in the $7-$8 range.
    For canola, PLC has been the choice, with very little under ARC
    Canola prices this year have been in the range of $30 to $38 per 
cwt while the reference price for canola/other oilseeds is $20.15 per 
cwt.
    The pulse crops--dry peas, lentils, and chickpeas--have all been 
primarily covered by PLC.
    Over the past several years, prices for pulses have experienced 
significant swings from low levels due to tariffs and disruptions in 
key markets to upward spikes since 2020. Unfortunately, the supply 
chain disruptions have prevented pulse producers from capitalizing on 
the current high prices.
    The Reference price for Dry peas is $0.11 per pound, Lentils and 
Small Chickpeas is $0.19 per pound and Large Chickpeas is $0.21 per 
pound. The reference price for Large Chickpeas established in the 2018 
Farm Bill did not reflect the average market price or the Olympic 
Average market price at that time and it does not reflect the current 
average price. The inadequate reference prices combined with the 
current historic highs for input expenses is a primary farm bill 
concern for pulse producers.
    I want to take this opportunity to offer my perspectives on the FSA 
offices and staff that administer and implement the farm programs. 
Staff vacancies and shortages in FSA offices is a significant and 
growing concern for producers. Retirements and workloads have resulted 
in lots of experience leaving the organization. The larger counties of 
western states require separate county offices for ease of access, 
personal service and the best execution of programs. We need more FSA 
resources, not consolidation of offices.
    In closing, I would reiterate that the existing farm program 
structure that provides growers with farm-by-farm and crop-by-crop 
options and planting flexibility through decoupling are working well. 
The ARC and PLC programs and the reference prices have been working as 
intended, but adjustments may be needed to address emerging dynamics.
    I hope that the stability and certainty of the farm safety net that 
the Title I and crop insurance programs represent will remain the top 
priority and driving force in the timely reauthorization of a 
bipartisan Farm Bill in 2023. Farmers, as well as consumers that rely 
on the food we produce, are facing a lot of challenges and uncertainty. 
Additional instability and uncertainty in the farm safety net and our 
food production system is the last thing we need.
    Thank you again for the opportunity to participate in this hearing.

    The Chairman. Thank you.
    Ms. James, you are now recognized for 5 minutes.

 STATEMENT OF JENNIFER JAMES, MEMBER, BOARD OF DIRECTORS, USA 
                       RICE, NEWPORT, AR

    Ms. James. Good morning, and thank you.
    As a fourth-generation rice farmer from Newport, Arkansas, 
I am honored to provide my testimony on behalf of the USA Rice 
Federation, the only farmer-led rice organization that 
advocates in the best interest of every farmer in the country, 
along with our meal merchant and allied members.
    While I am a rice farmer first, my family farm is 
diversified, growing rice as well as corn and soybeans, while 
providing many acres of over winter habitat for migrating 
waterfowl every year.
    U.S. rice farmers harvest 20 billion pounds of rice grown 
on 3 million acres of sustainably managed farmland, creating 
tens of thousands of jobs and billions of dollars in economic 
activity. Half of our production is consumed domestically, 
while the other half is exported to more than 120 countries 
around the globe.
    U.S. rice farmers have long been committed to environmental 
stewardship, reducing greenhouse gas emissions by 41 percent, 
cutting our water usage in half, and decreasing energy usage by 
34 percent, all while increasing yields dramatically over the 
last few decades. We will always strive to be more efficient 
and explore new ways to reduce emissions.
    But here is the key point for today's farm bill hearing. 
Farm families must be profitable to have the wherewithal to 
pursue these important environmental dividends. This Committee 
on a bipartisan basis has a long history of recognizing this, 
and working with farm families like mine to ensure our 
profitability and capacity can serve our natural resources. 
This hearing is timely and important because Title I of the 
farm bill, the commodity title, is the cornerstone of the 
safety net for rice farm families. Other commodities might 
regard crop insurance as their primary safety net. We have 
worked hard to make crop insurance a more effective tool but 
have historically lagged behind other crops in terms of 
participation and coverage levels. Title I is our true safety 
net. It helps us compete in a global marketplace that is highly 
distorted with high and rising foreign subsidies, tariffs, and 
non-tariff barriers.
    As you know, China was found to illegally have over-
subsidized three crops, including rice, by $100 billion in a 
year. It would take 10 years for farm bill spending on all U.S. 
commodities to reach that level. U.S. rice farmers simply can't 
compete without U.S. farm policy to help level the playing 
field. The fact is, Title I rice policy helps to ensure that 
more of the world's rice is produced sustainably in the U.S., 
following the highest environmental safety and labor standards 
in the world.
    Price Loss Coverage has been the most effective option for 
rice, with 99 percent of long and medium grain rice producers 
electing it over ARC. Despite the success of PLC since 2014, it 
does not look sufficient given current economic conditions. 
Rice simply has not enjoyed the rallying prices that other 
crops are experiencing. According to USDA, the current market 
prices for corn, cotton, soybeans, and wheat are 50 percent, 84 
percent, 77 percent, and 73 percent higher than in 2020, but 
rice prices are only up eight percent. Unfortunately, our 
prices have risen only to reduce the modest benefits provided 
by PLC. To illustrate, the PLC benefit to rice is down 75 
percent from where it stood in 2019. The payment rate per pound 
for 2021 is projected to be about \1/3\ the rate it was last 
year.
    Current PLC reference prices were established based on 2012 
cost of production. They were still relevant when the 2014 Farm 
Bill was enacted. The Market Assistance Loan rate for rice has 
not been relevant for many years now. While production costs 
have risen since 2012, notwithstanding low prices, the 
increases pale in comparison to what we are seeing this year. 
The Ag and Food Policy Center at Texas A&M found that 
fertilizer prices on average are higher per acre for rice than 
feedgrains, cotton, and wheat. Everyone testifying here today 
and all the farmers we represent are paying too much for 
inputs, but rice is taking a disproportionate hit on this front 
while our crop prices continue to lag.
    A recent rice-specific AFPC study of all variable input 
costs estimates rice farmers will lose over $500 million this 
year due to these increases. Because of the combined conditions 
of low rice prices and accelerating input costs, rice farmers 
are in trouble.
    Important steps can and should be taken to shore up the 
nation's rice farm families in the near-term, even before the 
next farm bill. That is why we sent a letter to Secretary 
Vilsack last week seeking relief and I would ask for your 
support of this request. We remain committed to working with 
you to strengthen the safety net in the next farm bill. 
Establishing and maintaining the safety net levels relevant to 
the economic times ought to be our primary consideration. This 
includes payment limitations and actively engaged rules that 
simply have not kept pace with the fast-changing times in ag. 
They are outdated, as evidenced by the hundreds of Members of 
Congress on both sides of the aisle who wrote USDA expressing 
concerns that the limitations for CFAP didn't cover the 
enormous losses suffered. This Committee took steps, important 
steps in the right direction in the 2018 Farm Bill. We look 
forward to working with you to build on those achievements. 
Thank you.
    [The prepared statement of Ms. James follows:]

 Prepared Statement of Jennifer James, Member, Board of Directors, USA 
                           Rice, Newport, AR
    Good morning, Chairman Scott, Ranking Member Thompson, and Members 
of the Committee. Thank you for the opportunity to testify before you 
today concerning the Commodity Title of the 2018 Farm Bill.
    My name is Jennifer James, and I am a fourth-generation rice farmer 
from Newport, Arkansas.
    While I consider myself a rice farmer first, our family farm is 
very diversified. I farm with my father and my husband, and we 
primarily grow rice and soybeans and corn as well as provide many acres 
of over-winter habitat for migrating waterfowl every year. As we have 
built the habitat in and around our fields my family enjoys watching 
the ducks, geese, bald and golden eagles, swans, deer and a variety of 
wildlife coexist with production agriculture.
    I am proud to serve as the Chair of the USA Rice Federation's 
Sustainability Committee and as a member of the USA Rice Federation 
Board of Directors, USA Rice Farmers Board of Directors, the USA Rice 
Domestic Promotion Committee, the USA Rice Communications Committee, 
and the USA Rice Asia, Turkey Promotion Subcommittee.
    I'm very proud to be the first woman ever elected to serve on the 
Board of Directors of Riceland Foods, Inc.--the largest miller and 
marketer of rice in the United States. I'm also active on the state 
level and serve as vice chair of the Arkansas Rice Farmers Board of 
Directors, the Arkansas Ag Council Board of Directors, the Jackson 
County Farm Bureau Board of Directors, and the St. Louis Federal 
Reserve Bank Agribusiness Industry Council.
    I'm truly grateful for having the opportunity to grow up and now 
help lead our family farm and to help guide the U.S. rice industry in a 
way where farm families can continue doing what they love to do--feed 
the country and much of the world--while also excelling at being good 
stewards of the land and natural resources.
    Rice farmers in the United States harvest roughly 20 billion pounds 
of rice grown on 3 million acres of sustainably managed farmland. About 
half is consumed here at home while the other half is exported to more 
than 120 countries around the globe.
    Family farmers primarily in six major rice producing states, 
including Arkansas, California, Louisiana, Mississippi, Missouri, and 
Texas, produce about 85 percent of all the rice consumed domestically.
    In addition to putting rice on grocery shelves, in restaurants, and 
on the dinner table and in creating tens of thousands of jobs and 
billions of dollars in economic activity, U.S. rice farmers have also 
long been committed to environmental stewardship which dates back 
generations, long before sustainability became a buzzword.
    Our conservation goals have long been and continue to be to produce 
more rice while using less water, energy, and other inputs, improving 
water quality, air quality, and soil conservation, while enhancing 
wildlife habitat and supporting biodiversity.
    In addition to sustaining $3.5 billion in migratory waterfowl 
habitat, rice fields in the U.S. also support crawfish and yellow rails 
along the gulf coast and even salmon nurseries in California.
    Moreover, within the last 4 decades, rice producers are proud to 
have reduced greenhouse gas emissions by 41 percent, cut our water 
usage in half, and decreased our energy usage by 34 percent.
    Although U.S. agriculture contributes less than ten percent to U.S. 
greenhouse gas emissions and, on a net basis eliminates more greenhouse 
gasses than it produces, with farmers, ranchers, and foresters removing 
some 72 million metric tons of CO2 equivalent in 2017 alone, 
we are eager to partner with the Department of Agriculture to do even 
more.
    One critical point to stress, however, is that farm families must 
be profitable in order to have the wherewithal to continue contributing 
these important conservation dividends.
    And, it goes without saying that this Committee--on a bipartisan 
basis--has a long history of recognizing this fact and working 
alongside farm families just like mine to ensure their profitability 
and their capacity to protect and improve our land and natural 
resources.
    This hearing is timely and important for rice farmers because title 
I of the farm bill--the Commodity Title--is the cornerstone of the 
safety net for rice farm families.
    Rice farmers recognize and appreciate the fact that other commodity 
producers represented on this panel might regard crop insurance as 
their primary safety net, followed by the safety net provided under 
title I of the farm bill.
    As rice farmers, we are certainly working to make crop insurance a 
more effective tool for our producers, but we have historically lagged 
well behind producers of other crops in terms of participation in crop 
insurance, coverage levels, and the like. This is because our growing 
conditions and perils are unique and the traditional policy that works 
so well for other crops does not work as well for us.
    Title I of the farm bill is really our true safety net. It is what 
allows us to compete on a global playing field that is the most 
distorted of any sector due to high and rising foreign subsidies, 
tariffs, and non-tariff trade barriers.
    Just to put things in perspective, China was found to have 
illegally over-subsidized just three crops--including rice--by $100 
billion in a single year. In comparison, it would take 10 years for 
farm bill spending on all U.S. commodities to reach that level.
    In short, U.S. farm families cannot compete on such a distorted 
playing field without U.S. farm policy to help level the playing field. 
This policy not only helps U.S. farm families compete, but it also 
helps to ensure that more of the world's rice is produced in the United 
States, sustainably and under some of the highest environmental and 
labor standards anywhere.
    In any case, the primary safety net that underpins U.S. rice farm 
families is Price Loss Coverage (PLC), with about 99 percent of all 
long grain and medium grain rice and anywhere from 68 percent to 76 
percent of all Temperate Japonica rice enrolled under the PLC program.
    This is in no way an indictment of the Agriculture Risk Coverage 
(ARC) program that may work better for producers of some other crops. 
We support what works best for each producer, crop, and region of the 
country.
    But, for rice, the tool that has generally worked best is PLC, 
though there has also been at least some ARC participation by some of 
our producers.
    Yet, despite the success of PLC in the years since its inception 
under the 2014 Farm Bill, this year's economic conditions are 
nullifying the effectiveness of this safety net.
    How is this?
    Well, first, rice simply is not experiencing the rally in prices 
that other crops are experiencing.
    For example, according to the Economic Research Service, the 
current market prices for corn, cotton, soybeans, and wheat are 
respectively 53 percent, 86 percent, 54 percent, and 83 percent higher 
than in 2020 but rice prices are fairly static, up just eight percent.
    As rice producers, we are thankful that our fellow producers are 
experiencing a rebound after 8 years of depressed prices, along with 
economic jolts due to trade wars and the pandemic.
    We just wish rice prices were also rebounding right now. But 
unfortunately, our prices have risen only enough to reduce the benefits 
provided by PLC. To illustrate, the PLC benefit to rice is down 75 
percent from where it stood in 2019. The payment rate per pound is 
projected to be about \1/3\ the rate it was just last year.
    Exacerbating the economic problem facing rice producers is that the 
trade and pandemic relief provided to producers short-changed rice 
producers relative to the adverse economic impacts and losses we 
sustained.
    These factors alone present significant hurdles for U.S. rice farm 
families.
    But this year's skyrocketing input costs have compounded the rough 
economic picture for rice producers.
    Again, to illustrate, PLC reference prices were established based 
on 2012 costs of production. They were still very relevant at the time 
of the enactment of the 2014 Farm Bill, although the Market Assistance 
Loan (MAL) rate for rice has not been relevant for many years now 
because it is set so low.
    But, while production costs have risen since 2012 notwithstanding 
low prices, the increases pale by comparison to what we are seeing this 
year.
    And, while these costs hit every farmer and rancher in the country, 
they are hitting rice disproportionately hard.
    The Agricultural and Food Policy Center at Texas A&M found that 
fertilizer prices, on average, are up $62.04 per acre for rice while 
fertilizer prices are up $39.55 for feed grains, $29.72 for cotton, and 
$19.64 for wheat. These numbers have only worsened from the time the 
analysis was conducted earlier in the year. Every farmer on this panel 
today is paying too much for and all of the farmers that our 
organizations represent are paying too much for inputs, especially 
fertilizer, but rice is taking a disproportionate hit on this front 
even as our crop prices continue to lag.
    Because of the combined conditions of low rice prices and 
accelerating input costs, rice farmers are in trouble.
    As evidence of this, the value of rice production fell from $3.2 
billion in 2020 to $2.9 billion in 2021, according to the Congressional 
Budget Office, although we expect that this is just the beginning 
unless conditions turn around soon.
    We believe that important steps can be taken to shore up the 
nation's rice farm families in the near term. That's why USA Rice sent 
a letter to Secretary Vilsack last week seeking relief for rice 
farmers. I would ask for your support of our request in this time of 
real need.
    However, we certainly believe that strengthening the farm safety 
net for rice in the context of the next farm bill will be imperative 
and we look forward to working with you to that end.
    We believe that establishing and maintaining the safety net at 
levels relevant to the economic times ought to be a primary 
consideration in the next farm bill authorization.
    Ninety-eight percent of farms in this country are family owned and 
operated. And, of the small percentage that are not considered a family 
farm by USDA, a large portion are still run by extended families, 
neighbors, and friends who decide they can cut costs and be more 
efficient if they team up to share equipment and divide up 
responsibilities on the farm.
    Whatever their composition, these farms are all experiencing an 
astronomical rise in the stakes of what it takes to succeed in keeping 
a farm afloat.
    Just as lenders have had to adjust how much they are willing to 
lend and what they will require as collateral in order to keep up with 
current conditions, so, too, must the farm bill's safety net adjust to 
the times, including relative to payment limitations and actively 
engaged rules that simply have not kept pace with fast changing times 
in agriculture.
    They are outdated, as evidenced by the hundreds of Members of 
Congress on both sides of the political aisle who wrote to the 
Department of Agriculture expressing concerns that the limitations 
applied to pandemic and trade war relief simply do not cover the 
enormous losses suffered.
    This reality led Members of Congress to pass more realistic program 
parameters in the context of the Wildfire Hurricane Indemnity Program 
Plus (WHIP+) for 2020 and 2021. I hope that Congress will take similar 
steps in the context of the next farm bill. For full time farm 
families, this is a remedy that is long overdue.
    Farm policy rules can no more hold back market realities than auto 
or home mortgage lenders can expect to lend at loan levels set decades 
ago. It simply doesn't work.
    The antidote to avoiding consolidation in agriculture and thus 
keeping farmers and ranchers independent and family owned is to ensure 
that the safety net works for regular full time farm families. If it 
doesn't, consolidation is absolutely inevitable.
    On a bipartisan basis, you took some steps in the right direction 
in the 2018 Farm Bill and we are grateful to you for this. We look 
forward to working with you to build on these achievements.
    Planting flexibility is extremely important to farmers, both 
economically and agronomically. Thankfully farmers have that planting 
flexibility now. We need to protect and preserve this feature of the 
farm bill.
    However, even this simple principle has important wrinkles or 
details to be mindful of.
    For instance, in the case of rice, it is absolutely vital to keep 
our infrastructure in place.
    In the Commodity Title, we have a blend of coupled policies, such 
as the marketing loan, and decoupled policies, including PLC and ARC, 
with these latter programs tied to historical base acres.
    Striking the right balance in this regard is essential not only 
with respect to these Commodity Title programs but also with other 
policies as well, including conservation programs tied to farming 
practices and crop insurance which attaches to planted acres. This 
issue comes into play even under the climate initiatives being 
announced by the Department.
    From a rice perspective, if we were to lose so much acreage that 
the infrastructure could not be maintained, we would lose the U.S. rice 
industry--and once lost it would not come back. This is undoubtedly a 
concern for producers of other crops where infrastructure is unique to 
their crop industry.
    The work you will do in this Committee to help achieve this balance 
is extremely important and I am grateful to have this chance to testify 
before you.
    I am very appreciative of all the work that you have done in the 
past and are doing now to help farm families like mine carry on the 
important work we do for the country and for people around the world. 
Farming has been an honor of a lifetime for me and it means a lot that 
you would place such a value on the work that I love.
    Again, thank you for the opportunity to visit with you about these 
issues of huge importance to farm families like mine.

Jennifer James.
                               Attachment
February 25, 2022

  Hon. Thomas J. Vilsack,
  Secretary,
  U.S. Department of Agriculture,
  Washington, D.C.

    Dear Secretary Vilsack:

    Thank you for your work on behalf of America's farmers and 
ranchers. As you continue to develop and implement programs to provide 
assistance to the agriculture community, USA Rice can be counted on for 
open and direct dialogue with you and your staff about the needs of the 
rice farmers we represent.
    As the Chairman of USA Rice Farmers, representing rice farmers in 
all major rice producing states, I am writing to respectfully request 
that you use the available authorities of the U.S. Department of 
Agriculture (USDA) to provide assistance to the nation's rice farmers 
who are facing both low commodity prices and disproportionately higher 
input costs, creating a severe financial squeeze that threatens the 
continued viability of U.S. rice farms and the rural communities they 
support.
    Unlike other major crops, rice has not seen a recovery in prices 
and while all in agriculture are experiencing volatile input costs, the 
increase of input costs for rice vastly exceeds that of other crops. 
These twin conditions are threatening U.S. rice farmers' potential for 
profitability and puts rice at a significant competitive disadvantage 
when farmers are faced with financial decisions. This poses a very real 
danger to rice's unique infrastructure that is needed to maintain the 
domestic industry. Once this infrastructure is lost, it would be 
extremely difficult to re-establish. Producers of all crops are feeling 
the pressure of escalating input costs, but I believe it is important 
that I highlight the unique impacts on rice.
    Commodity prices for rice have simply not kept pace with other 
major crops whose prices are much higher than they were in 2020. 
Compared to 2020 prices recorded by the Economic Research Service 
(ERS), the current market price for corn is 53 percent higher, the 
price of cotton is 86 percent higher, the price of soybeans is 54 
percent higher, and the price of wheat is 83 percent higher, but 
current rice prices are relatively static since 2020, up just eight 
percent.
    Similarly, the rise in input costs have hit rice farmers 
disproportionately hard. The Agricultural and Food Policy Center (AFPC) 
at Texas A&M University recently conducted a broad study to analyze the 
impact the increase in input costs is having on its representative 
farms. AFPC's study looked specifically at the increase in fertilizer 
prices and found rice farms would suffer most--a $62.04 average per 
acre increase compared to $39.55 for feedgrain, $29.72 for cotton, and 
$19.64 for wheat farms. More recently, AFPC conducted a more specific 
rice study looking at all variable input costs and found a weighted 
average per acre increase of $174.20 for the 2022 crop year when 
compared to 2021. If rice planted acres in 2022 are on average with the 
past 5 years, these increases for inputs coupled with flat prices would 
result in a $504.9 million loss to rice farmers.
    The slight increase in rice prices that have been seen will be more 
than offset by lower Agricultural Risk Coverage (ARC) or Price Loss 
Coverage (PLC) program assistance. The PLC payment rate for long grain 
rice was $0.014/lb. in 2020. In 2021, the PLC payment rate for long 
grain rice is expected to be $0.005, roughly \1/3\ of the previous 
year's payment rate. The Congressional Budget Office (CBO) estimates 
that total rice PLC payments declined from $604 million in FY 2020 to 
$382 million in FY 2021. This downward trend is expected to continue 
with current projections for FY 2022 at $272 million and expected 
support for the 2022 crop year falling to $93 million. PLC has provided 
some assistance to our producers competing with heavily subsidized and 
protected foreign producers of rice but, unfortunately the support has 
not kept pace with the level of support that foreign rice producers 
enjoy, and it isn't equipped to respond to a rapid increase in input 
costs. In the recent past, rice producers have also received less 
support under the Market Facilitation Program (MFP), the Coronavirus 
Food Assistance Program (CFAP), and the Pandemic Assistance for 
Producers (PAP) initiative. Rice producers received less than 0.5 
percent of the total payments made by MFP, CFAP, and PAP.
    Given the current economic condition of U.S. rice farms, it is easy 
to see why the value of rice production fell from $3.2 billion in 2020 
to $2.9 billion in 2021, according to the July 2021 CBO report. Even if 
rice acres hold in 2022, the small increase in value of the crop will 
not come close to making up the losses felt by farm families from 
increased input costs and the erosion of PLC assistance.
    As a whole, the U.S. rice sector contributes $34 billion annually 
to the U.S. economy, stretching far beyond the farm gate and creating 
jobs and economic activity on main street. Rice-dependent rural 
communities throughout the country are being adversely impacted by the 
ongoing recession within the industry. This could ultimately have a 
devastating impact on elevators, mills, trucking companies, and other 
businesses dependent on rice production, which once lost, will not 
return, further exacerbating economic consequences on these communities 
and their citizens.
    Last September, you announced that USDA was preparing to invest $3 
billion to address urgent challenges such as market disruptions that 
are impacting America's agricultural producers--rice farmers are facing 
these challenges. Whether through the funding for market disruptions or 
by utilizing residual funds available under ad hoc programs, relief is 
necessary to ensure rice farmers survive the combination of stagnant 
prices and high input costs.
    In the past, you have taken bold steps to address particular, 
unique hardships faced by commodity and specialty crop producers, as 
well as many others. We very respectfully urge you to consider similar 
relief in the current case of rice.
    Thank you for your consideration of this important request, as well 
as your commitment to U.S. agriculture and support for the health of 
rural America. We hope to have further discussions with you and your 
staff at your convenience. In the meantime, please direct any follow up 
to our request to Ben Mosely at [email protected] or 571-217-2848.
            Sincerely,
            
            
Kirk Satterfield,
Chairman,
USA Rice Farmers.

    The Chairman. Thank you.
    And now, Ms. Rogers, please begin when you are ready.

STATEMENT OF MEREDITH McNAIR ROGERS, CAMILLA, GA; ON BEHALF OF 
                     U.S. PEANUT FEDERATION

    Ms. Rogers. Chairman Scott, Ranking Member Thompson, and 
Members of the Committee, thank you for the opportunity to 
appear before you today as you review Title I of the 2018 Farm 
Bill. Today, I am representing the United States Peanut 
Federation, USPF.
    USPF is comprised of the Southern Peanut Farmers 
Federation, the American Peanut Shellers Association, and the 
National Peanut Buying Points Association. I have been farming 
with my family in southwest Georgia for over 25 years. I 
currently farm in a family partnership with my husband, my 
parents, and my siblings. We primarily farm row crops, cotton, 
corn, peanuts, and some fresh sweet corn.
    When I met with the General Farm Commodities and Risk 
Management Subcommittee early last fall, I spoke of increased 
input costs such as fertilizer and equipment. Since the 
Subcommittee's roundtable last year, the Center for Rural 
Prosperity and Innovation at Abraham Baldwin Agricultural 
College in Tifton, Georgia, has completed its review of U.S. 
representative peanut farm data, covering all the peanut 
production regions. What we have learned from this most recent 
comprehensive data is that peanut growers are struggling to 
cover their cost of production. The representative farms 
demonstrate that a significant number of farmers are using the 
equity in their land and their 401(k). The 2021 representative 
farm update revealed the average expected peanut yield to be 
4,760 pounds per acre. In a cash flow analysis, the 2021 cash 
flow was $545.97 per ton. The projected 2022 peanut total cash 
flow cost to produce a ton of peanuts is estimated to be 
$666.94. That is a 22 percent increase over the 2021 cost of 
production. We are in the process of working on our farm budget 
for our farm this year, and we have found that our expected 
increase to be very high. The fertilizer costs alone are over 
double what they were a year ago, and availability is becoming 
a problem.
    In the 2002 Farm Bill, this Committee eliminated the peanut 
supply management program and established a new marketing loan 
program. Since the 2002 Farm Bill, peanut planted acres have 
increased by less than two percent, when compared to recent 
plantings. Yet in a review of this same time period, production 
has increased approximately 59 percent. Our industry's increase 
in production is due to an increase in peanut yields, which was 
approximately 52 percent when compared with the same time 
period.
    Peanut butter drives demand for peanuts due to its 
inexpensive source of plant-based protein. Domestically, 
according to the National Peanut Board, demand reached 7.9 
pounds per capita in 2021. This is a 37.6 percent increase when 
compared to demand in 2002, according to the Center for Rural 
Prosperity and Innovation.
    Peanut growers, shellers, buying points support the Price 
Loss Coverage Program, the PLC, in the 2018 Farm Bill. Clearly, 
peanut growers are facing economic challenges as discussed 
previously. These challenges are not a result of the PLC 
structure, but it is important that the Committee periodically 
evaluate, as you are today, the cost of production that growers 
are facing and determine if the specifics of these programs are 
keeping pace with the changing economics growers are 
experiencing.
    We do have a number of growers in specific regions that 
have produced peanuts for years but do not have access to the 
PLC program because they lack base acres. We know that the 
issue is not specific to peanuts, but we hope the Committee 
will work with commodity organizations to assist these 
producers.
    In conclusion, the Federation believes the 2018 Farm Bill 
PLC program for peanuts has been effective for our farm 
families and the peanut industry. We do believe that the 
Committee should review the specifics of the 2018 Farm Bill in 
light of the unprecedented cost that the production farmers are 
facing in the future. While some may argue that the costs will 
recede to their previous levels once these recent events have 
subsided, it is my experience that these increased costs do not 
return to the original level.
    Thank you so much for allowing me to participate today.
    [The prepared statement of Ms. Rogers follows:]

Prepared Statement of Meredith McNair Rogers, Camilla, GA; on Behalf of 
                         U.S. Peanut Federation
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the opportunity to appear before you today as 
you review Title I of the 2018 Farm Bill. I appreciate the Committee's 
seeking producers' input on commodity programs and their impact on 
farms across the U.S. Today, I am representing the United States Peanut 
Federation (USPF). USPF is comprised of the Southern Peanut Farmers 
Federation, the American Peanut Shellers Association and the National 
Peanut Buying Points Association. The Southern Peanut Farmers 
Federation includes the peanut grower organizations in Georgia, 
Alabama, Florida and Mississippi.
    I have been farming with my family in southwest Georgia for over 25 
years. I graduated from the University of Georgia in 1991 with a 
Bachelor of Business Administration, and later received my Masters of 
Accountancy from the University of Georgia. I currently farm in a 
family partnership with my husband, parents, and siblings. Our 
partnership primarily farms row crops including peanuts, fresh sweet 
corn, cotton, and corn. We also have a herd of about 200 head of brood 
cattle. I grew up on this farm and am very pleased that I have had the 
opportunity to work and raise my children on the farm.
    The COVID-19 pandemic and subsequent supply chain issues have 
impacted peanut growers. When I met with the General Farm Commodities 
and Risk Management Subcommittee early last fall, I spoke of increased 
input costs such as fertilizer and equipment. In addition, I shared 
with you the delays in equipment parts and repair. Since the 
Subcommittee's Roundtable last year, the Center for Rural Prosperity 
and Innovation at Abraham Baldwin Agricultural College in Tifton, 
Georgia has completed its review of U.S. Representative Peanut Farm 
data covering all the peanut production regions. These 22 peanut farms, 
from Virginia to New Mexico, have been reviewed for 21 years (2001-
2022). What we have learned from this most recent, comprehensive data 
is that peanut growers have struggled to cover their cost of 
production. Farmers typically have three types of loans to cover their 
operation:

   Traditional operating loan

   Equipment loan

   Mortgage on the farm's land

Farmers who were not able to cover their loans during a crop season 
rolled those payments into their mortgage note. The representative 
farms demonstrate that a significant number of farmers are using their 
equity in the land and [401(k)].
    The 2021 representative farm update revealed the average expected 
peanut yield to be 4,760 lbs. per acre. In a cash flow analysis, the 
2021 total cash flow was $545.97 per ton. The projected 2022 peanut 
total cash flow cost to produce a ton of peanuts is estimated to be 
$666.94. This is approximately a 22% increase over the 2021 cost of 
production.
    We are in the process of working on the farm budget for this year 
and have found our expected cost increases to be very high. The 
fertilizer costs are well over double as compared to last year and 
availability is a problem.
    To fully understand peanut policy, we have to compare production 
prior to the 2002 Farm Bill to today. In the 2002 Farm Bill, this 
Committee eliminated the peanut supply/management program and 
established a new marketing loan program. Since the 2002 Farm Bill, 
peanut planted acres have increased by less than 2% when compared to 
recent plantings. Yet in a review of this same time period, production 
has increased approximately 59%. Our industry's increase in production 
is due to an increase in peanut yields which was approximately 52% when 
comparing the same time periods.
    Peanut butter drives demand for peanuts due to it being an 
inexpensive source of plant based protein. Domestically, according to 
the National Peanut Board, demand reached 7.9 lbs. per capita in 2021. 
This is a 37.6% increase when compared to demand in 2002 according to 
the Center for Rural Prosperity and Innovation.
    Peanut growers, shellers, and buying points support the Price Loss 
Coverage program (PLC) as provided in the 2018 Farm Bill. Our state 
grower organizations have conducted county and regional meetings in 
Georgia, Alabama, Florida and Mississippi, and growers support the PLC 
program. The structure of the program, a marketing assistance loan, 
reference price, and the current payment limit structure, allow not 
just growers, but also the industry to provide jobs and some level of 
economic stability to rural communities. Clearly, peanut growers are 
facing economic challenges as discussed previously. These challenges 
are not a result of the PLC structure, but it is important that the 
Committee periodically evaluate, as you are today, the costs of 
production that growers are facing and determine if the specifics of 
these programs are keeping pace with the changing economics growers are 
experiencing.
    Our industry partners, shellers and buying points, agree that the 
PLC program works for peanuts. Since the 2002 Farm Bill, the forfeiture 
rate for peanuts has been very low. In 2020, the rate was, for example, 
0.166%.
    We do have a number of growers, in specific regions, that have 
produced peanuts for years but do not have access to the PLC program 
because of a lack of base acres. We know that this issue is not 
specific to peanuts. We hope the Committee will work with commodity 
organizations to assist these producers.
    The USPF supports maintaining crop insurance, but peanut growers 
have not seen the benefits, when compared to costs, as many other 
crops. Our state grower organizations have asked researchers to review 
the role of crop insurance for peanut producers. While crop insurance 
is considered the primary risk management tool for producers to recover 
from natural disasters and volatile market fluctuations, preliminary 
research indicates that the reliability of crop insurance as a safety 
net varies for many peanut producers when total operating costs for the 
farm are considered. In addition, peanut farmers do not have access to 
a futures market as other commodities. For our farm, we do not utilize 
crop insurance at a high level. The costs are too high for the coverage 
you receive on irrigated peanuts.
    With regard to accessibility of U.S. Department of Agriculture 
programs, we support the continued web based program availability. As 
USDA offices are consolidated and staffing needs are an issue, it is 
important that farmers have access to programs online and that this 
accessibility is as straightforward as possible.
    In conclusion, the Federation believes the 2018 Farm Bill PLC 
program for peanuts has been effective for farm families and the peanut 
industry. We do believe that the Committee should review the specifics 
of the 2018 Farm Bill in light of the unprecedented costs of production 
farmers are facing in the future. While some may argue that costs will 
recede to their previous levels once these recent events have subsided, 
my experience is that these increased costs do not return to their 
original level.
    Thank you for allowing me to participate today.

    The Chairman. Thank you, and thank all of you for your very 
outstanding testimonies.
    And at this time, Members will be recognized for questions 
in order of seniority, alternating between Majority and 
Minority Members. You will be recognized for 5 minutes each in 
order to allow us to get as many questions in as possible. 
Again, please keep your microphones muted until you are 
recognized in order to minimize background noise.
    And now, I recognize myself for 5 minutes.
    Ladies and gentlemen, my first question is asked because of 
this very disturbing and terrible, and quite honestly, evil 
activity that Russia is conducting in Ukraine, and the impact 
that it is having or could have on our agriculture industry. 
Our nation has the leading agriculture industry in the world, 
often referred to as the Bread Basket of the World. The Good 
Lord has blessed us in this country to be that leader.
    But my concern is this. Rising inflation has had a 
substantial impact on both the prices of our commodities, as 
well as the input costs that farmers are facing. Things like 
fertilizer, several of you have mentioned that, and I believe 
that the Russia/Ukraine conflict will definitely exacerbate 
these conditions because Ukraine is a major exporter of raw 
materials, and a disruption in these exports will surely raise 
prices globally. And when input prices rise and support program 
prices remain the same, it is our farmers who will have to 
carry that cost.
    And so, with that said, let me ask and start with you, Ms. 
James, and maybe others of you who may want to jump in here. Do 
you think that our commodity support programs like the Price 
Loss Coverage Program which sets reference prices for 
commodities should be more responsive to economic conditions?
    Ms. James. Well, yes, sir, I do. I believe that your 
statement about inflation is a very important one, especially 
at this time. I believe that the inflation rate has grown about 
two percent a year for the past 10 years, but then we are at 
seven percent in this one last year. So, that is a considerable 
increase, although our reference prices have remained the same 
as you have stated.
    The Chairman. We will come back to that, but I also want to 
call on Ms. Jaclyn Ford with the National Cotton Council.
    Ms. Ford, thank you for your enlightening testimony. Can 
you talk about decisions that you expect cotton producers to 
make this year in terms of participation in ARC and PLC, as 
well as STAX and supplemental crop insurance products that are 
available for producers? There are some crop insurance products 
that are available only if they do not participate in ARC, and 
so, I realize that the dynamic effects that producer decision, 
it has a dynamic effect on their decisions. Can you shed some 
light on how these decisions are made?
    Ms. Ford. Yes, sir. Our family this year will be 
participating in STAX rather than PLC, and we will be doing 
that at a lower level. It will be at a cost of about $10 per 
acre. We just got sign-ups done this week, but cost is a 
determinant. Our input costs are so much more, so your cost per 
acre participating in the crop insurance programs will 
determine participation costs. So, if we can make that more 
affordable for the producers as far as participating, I think 
that would be a good thing.
    But our cost per acre this year has gone up for cotton 
probably around 30 or 40 percent, so we are looking at an input 
cost of somewhere between probably $900 to $1,100 per acre 
right now since the Ukraine war, and right now cotton is 
trading at $1.10, $1.20. I haven't looked at it this morning. 
It was up a little bit, so right now we are at about a break 
even point at a 2 bale average. So yes, we certainly need some 
more support.
    The Chairman. Well thank you for that, and Committee 
Members, we can all do without a lot of things, but we 
definitely cannot do without food, and it is our nation that 
provides that supply.
    With that, Ranking Member, I will turn to you.
    Mr. Thompson. Mr. Chairman, thank you very much, and thanks 
to each and every one of our witnesses today and your 
organizations that you are affiliated with for what you do for 
agriculture. Mr. Chairman, I appreciate your line of 
questioning and the responses. It is not so much, at this 
point, we can have record high commodity prices we are getting, 
but with inflation, it is the margin that matters. That is 
something we need to take into consideration.
    Lately, there has been a lot of conversation surrounding 
agriculture and climate change, and these are conversations 
that I welcome as American agriculture has a great story to 
tell. And we got to get better at telling our story. But often, 
I hear questions about climate framed in a manner that asks how 
can we change the safety net or crop insurance to be more 
climate friendly? And I think that is looking at the problem 
completely the wrong way. Rather, we should be asking ourselves 
what can we do to make climate policy farmer friendly? American 
producers are the most efficient in the world. And if the goal 
is to reduce global greenhouse gas emissions, then the smartest 
thing we can do from a climate standpoint is, quite frankly, to 
have American farmers, ranchers, and foresters produce more and 
export it overseas. And the farm safety net is critical to 
helping our farmers manage risk year after year.
    Now, for anyone who wants to jump in, can you talk about 
the importance of the safety net and maintaining domestic food 
production, and for your commodity, what other countries are 
major producers, and how do they stack up from a conservation 
and a climate standpoint? I welcome anyone that wants to jump 
on that.
    Dr. Johansson. Well, thank you for that question, Ranking 
Member Thompson.
    I had the privilege of chairing the Federal Crop Insurance 
Corporation Board of Directors previously when I was at USDA, 
and I do think that crop insurance needs to focus on providing 
risk management to farmers. The program obviously needs to be 
actuarially-sound based on principles of insurance. USDA can 
certainly work to incentivize producers to reduce or sequester 
greenhouse gases, but that is best addressed through 
conservation programs. And at least, that is by and large how 
USDA has proceeded thus far, with one exception maybe, the crop 
insurance discounts for planting cover crops.
    But generally when it comes to the commodity title or crop 
insurance programs, USDA has properly stuck to the mission of 
those programs, and we certainly know that the increase in 
productivity in U.S. agriculture across all of our crops and 
the levels of efficiency seen on our farms have significantly 
reduced emissions per unit of output over time.
    As I mentioned earlier, obviously the sugar program is 
critical to keeping U.S. sugar production viable for our 
growers. We have seen excessive subsidies provided by other 
countries to their sugar sector, which effectively guarantees 
surpluses are dumped on the global market. Moreover, the 
production in most of those countries does not meet the labor 
and environmental standards we have in the U.S.
    So, weakening sugar policy and outsourcing more of our 
sugar production to heavily subsidized global sugar markets 
would undercut our supply chains, weaken national security, 
hurt the environment, and cost us family farms here in the U.S.
    Thanks.
    Mr. Thompson. Thank you.
    Mr. Edgington, I saw you were going for your microphone.
    Mr. Edgington. Yes. So, from the National Corn Growers 
perspective, I listened to your question and I think about it 
in a couple different ways.
    We have been this way for quite a while, the crop insurance 
is number one. It is our number one best risk management tool, 
and we need to continue with that. It is a vital piece. We are 
rolling out another--we have worked with RMA to do another one 
coming this year called PACE, which looks at split-nitrogen 
application, and if you can't get it on, is there a crop 
insurance piece to that? And there will be.
    But we have also got--and we rolled it out last summer--our 
corn sustainability policies where we know by 2030 that we can 
improve things on land use efficiency, water quality, all of 
these over--there are four or five products up to 10, 15 
percent, and maybe some of them beyond that. But that is a 
piece about conservation that we are working on, and it is 
about efficiencies and quality, and all of the dynamics that we 
do on a day-to-day basis.
    We have corn all over the United States, and to talk about 
climate and risk management tools in the same package and has 
to be done this way, does not fit well with corn. It is tough 
to do the same thing in southern Texas as it is in northern 
Minnesota or in the State of Washington versus Maine, let alone 
central Iowa. And so, it is an area that we want to keep 
separate from the fact that risk management is risk management, 
conservation is conservation, and we are working very hard in 
both areas to improve and become more efficient as crop 
producers.
    Mr. Thompson. Very good. I don't have much time left. Just 
an invitation. I would love to have future communications if 
you have thoughts that you could respond and provide those on 
that particular question, I think that would be very, very 
helpful as we work towards this next farm bill. Also, together 
we can tell the great story of American agriculture.
    So, thank you so much, Mr. Chairman.
    The Chairman. Thank you.
    The gentleman from California, Mr. Costa, who is also the 
Chairman of the Subcommittee on Livestock and Foreign 
Agriculture, is recognized now for 5 minutes.
    Mr. Costa. Well, thank you very much, Mr. Chairman, for 
holding this important hearing as we begin to set this table 
for the reauthorization of next year's farm bill. I think it 
will be the fourth farm bill reauthorization that I have had 
the privilege to work on. And let me also commend you for your 
opening comments remembering and reflecting upon a life well 
lived in his service to our country, our colleague, Jim 
Hagedorn, a Member of my Subcommittee that we worked on 
together. Our thoughts and prayers are certainly with his 
family.
    I say this time and time again as a farmer, a third 
generation. Food is a national security issue, and I think 
everyone on this Committee agrees that our responsibility is to 
ensure that American agriculture remains strong and vibrant, 
that Americans realize that incredible productive, nutritious 
food that they consume every night at their dinner table is a 
result of hard work by farmers, ranchers, dairymen and -women, 
and farmworkers. It is a partnership, and so we are very 
interested in your comments today about how we reset the stage. 
Obviously, the focus is Title I today. Obviously, there are 
other titles in the reauthorization of the farm bill that we 
are going to be clearly listening carefully to your 
recommendations in terms of modifications and changes.
    Let me ask a specific question with our witness, Ms. Ford, 
on the National Cotton Council, and then I want to have a 
general question that you folks might want to think about with 
relationship to the lessons that we have learned in the last 2 
years as a result of this pandemic, horrific pandemic in which 
over 900,000 Americans have lost their lives, in terms of the 
supply chain, and how we have turned our very delicate and 
complicated food supply chain with four percent of the nation 
upside down, and how we address that as we move forward.
    Ms. Ford, when we talk about cotton was added on Title I 
farm programs, you talked about the ARC, the Agriculture Risk 
Coverage and the Price Loss Programs that have worked for 
producers of seed cotton as compared to how upland was 
previously treated in Title I programs. Do you care to 
elaborate any further?
    Ms. Ford. Well, this year with the prices being higher, I 
don't think a payment would not kick in, but it has worked in 
the past and it is more dependent on price than yield. And we 
use crop insurance for yield protection, but the PLCs work very 
well in the past for price protection.
    Mr. Costa. Well, and that is a good segue. I mean, I have 
crop insurance and farming, as we all know, is risky enough 
given the challenges we face. And as I told a previous 
President one time, I said, ``Farmers are risk takers,'' and 
so, what lessons do you think we should be focused on? Crop 
insurance obviously is a vital part of our safety net, but what 
we ought to be thinking about in reauthorization next year's 
farm bill?
    Ms. Ford. I think we need to be thinking about margins as 
well with the input costs. I think we have to look at margins 
and what the crops are costing us to produce, and not----
    Mr. Costa. The comment that I made previously, I said 
farmers are price takers, not price makers. Now, I have been 
involved in California for years, the leading agriculture state 
in the nation. You all nod your heads when I say farmers are 
price takers, not price makers, because you know what that 
means.
    But how do we look forward in terms of not just the safety 
net of the insurance program and how we might improve it, but 
what other--I mean, we have the inflationary impacts that we 
are all dealing with, of course, and I am working very heavily 
on a bipartisan basis on this supply chain issue that we hope 
will relieve some of those inflationary pressures. But the fact 
is, is that American agriculture is challenged. Anyone care to 
opine?
    Mr. Doyle. I think it is important for us as farmers. We 
invest in creating demand for our crop, whatever it is. Farmer 
investment, we have check-offs that help do that. But, as a 
governing body, you give us the tools that we need to make us 
less risky. Our lenders that a lot of times young, new farmers 
don't have opportunities, don't have backing or assets, PLC, 
ARC, those give those lenders some type of assurance that, 
``Hey, we can finance this young grower and he could be less 
risky.''
    Mr. Costa. My time has expired, but thank you, Mr. 
Chairman, and we will continue this conversation.
    The Chairman. The gentleman from Georgia, Mr. Austin Scott.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman.
    Mr. Edgington, I am going to come to you in just a second, 
but I want to go to what Ms. Ford and Ms. Rogers put in their 
testimony, because I want to talk to you about the letter that 
the National Corn Growers Association wrote to a company called 
Mosaic.
    Ms. Ford and Ms. Rogers, in your testimonies that we have 
heard today here, you both mentioned increases in the cost of 
production. Ms. Ford, you referenced that most producers are 
expecting 25 to 40 percent increases in inputs due to higher 
fertilizer and other costs. Fertilizer is the number one issue 
I hear back home.
    Ms. Rogers, you note in your annual study on the peanut 
cost of production from the Center for Rural Prosperity and 
Innovation at Abraham Baldwin Agricultural College a 
significant spike in the cost of production for peanuts, a 22 
percent increase in the cost to produce a ton of peanuts.
    Now, Mr. Edgington, when we want to get down to the heart 
of things back home, sometimes we say it is time to shuck the 
corn. Your association wrote a letter to Mosaic because Mosaic 
had requested additional tariffs be placed on products that 
would compete with them. Is that correct?
    Mr. Edgington. That is correct. We have been in 
correspondence with Mosaic about their tariff application with 
the International Trade Commission. That is correct.
    Mr. Austin Scott of Georgia. I want to read you something. 
This is from this company's annual report to shareholders, and 
if I am not mistaken, they control about 80 percent of some of 
the markets, is that correct, inside of the United States?
    Mr. Edgington. They are currently at about that level on 
the finished product, yes.
    Mr. Austin Scott of Georgia. A monopoly. Full year revenues 
up 42 percent. Stronger pricing more than offset volumes. Gross 
margin up 200 percent. Adjusted earnings before income tax, a 
fiscal year record, up 129 percent. And I think that what 
Americans need to realize is the monopolization of the inputs 
in our food supply to our farmers is what is leading to the 
majority of the discussion right here. The input costs are 
going up faster than the markets can absorb them, and it is 
leading to a tremendous amount of food price increases.
    Now, they requested the tariffs be put in place in February 
of 2021. Do those record profits sound to you like they would 
be coming from a company that actually needed protections from 
competition?
    Mr. Edgington. You mind if I don't answer that part of your 
question, but I would like to address part of the whole issue.
    Mr. Austin Scott of Georgia. Yes, sir.
    Mr. Edgington. Because we have been--I have been more 
involved in fertilizer than I thought I would maybe have to be, 
other than on my farm in this process. And one of the things we 
have learned in the process is they do not look at this table 
as their customer. They are selling to the CHS's and Growmark's 
of the world. That is their distributing network, and so, our 
pushback on Mosaic or CF Industries on nitrogen fertilizer has 
been a surprise to them, because we have never pushed back 
before because of the process and the engagements we have had.
    Mosaic has had tremendous profits. Now, they have reasons 
that they tell us as to why they were competing against foreign 
countries subsidizing their fertilizer, and that is what they 
did. They represent about 55 percent of the phosphate rock 
inside of the United States, but they represent 80 percent of 
the DAP that we are applying to our fields. And so, when you 
have that type of control over the majority of the market, 
there becomes lots of discussion around the profits that they 
are making.
    Mr. Austin Scott of Georgia. If I may, this control is not 
limited to fertilizer, though. We are seeing increased 
monopolization, whether it be seed or any other type of input 
cost, and then what you see in some cases is like communist 
China where they stepped in and they bought Syngenta. And so, 
Mr. Chairman, we have a lot of work to do in making sure not 
only that foreign countries don't own our ag input supply, but 
that not any individual company inside America controls too 
much of our ag inputs. And if we could get that right, we would 
have significant competition in the input market and we would 
have more fair pricing to our farmers.
    I am down to 8 seconds. With that, Mr. Chairman, I will 
yield.
    The Chairman. Thank you.
    And now, the gentlewoman from Ohio, Ms. Brown, is 
recognized for 5 minutes. Ms. Brown, you may be muted. Un-mute 
yourself.
    Ms. Brown. Thank you for that. I apologize. Chairman Scott, 
can you hear me now?
    The Chairman. Yes, I can.
    Ms. Brown. Okay, good.
    The Chairman. Go right ahead.
    Ms. Brown. All right, thank you and Ranking Member Thompson 
for holding this hearing today, and thank you all to the 
panelists for being here and offering your feedback on these 
important farm bill programs.
    The business of farming is risky, and it is important to 
have smart safety net programs in place for when the 
unthinkable happens. It is also important for us to ensure that 
these programs are accessible to all farmers.
    So, my question is the USDA has made several modernization 
efforts to make information and applying for these Title I 
programs more efficient. Mr. Coleman, can you talk about your 
producers' experience with using USDA's online tools and 
program application systems?
    Mr. Coleman. Sure, I would be happy to talk a little bit 
about that.
    The FSA offices have implemented programs where you can get 
a lot of the information and do it online, but it does get real 
complicated. These programs kind of overlap. I am very involved 
with EQIP and NAP and a lot of the programs there, and so 
sometimes it gets kind of confusing. That is probably the 
reason why I made the statement about being able to go into the 
office and talk to these people in person, and the staffing--
have the staff in the building for them to work personally with 
a person, especially with me doing as many different crops as I 
do. It gets very complicated.
    But the tools are there. The tools are there, and they are 
working. It is pretty complicated.
    Ms. Brown. Thank you for that.
    USDA data has shown time and time again that Black farmers 
receive only a fraction of the farm subsidies that White 
farmers do. So, my question is most recently they released data 
showing that nearly all the funds provided to the farmers to 
offset impacts of COVID-19 went to White farmers.
    Mr. Doyle and Ms. Berg, what are your organizations doing 
to support Black farmers and producers when it comes to Title I 
programs, and what could Congress do to address these 
disparities?
    Mr. Doyle. Thank you for the question. From our 
organization's standpoint, we have a new strategic plan in 
place. We reevaluated our policy and we have included diversity 
within our membership, encouraging membership as we are a 
membership and election type of board. We have brought in 
speakers on diversity, educating our membership just to let 
them know to be aware of that. We encourage youth. That is one 
way, minority colleges with the MANRRS program. We recently had 
them come in and speak to our board, and opportunities exist 
there. I am in the Mississippi River Delta and it is--farmers, 
we are--there are few of us. It is challenging sometimes just 
to get volunteers on our own board, regardless of their 
ethnicity.
    So, just continue education including diversity. And Mr. 
Bridgeforth here is in the room, and I have actually been in an 
educational communication team with his brother, a farmer from 
northern Alabama, and Kyle and his family have done great 
things and we continue to reach out to families like his and 
others in Arkansas to make us aware of what we need to be doing 
in improving our association, representing all farmers within 
the United States.
    Ms. Berg. At the National Association of Wheat Growers, I 
will be the second woman President ever in the Association's 
history. So, we have definitely been moving forward trying to 
get more minorities or anybody--we embrace them in our industry 
and for our association. So, we do look forward to working with 
anybody who would like to walk through the door with regard to 
minorities or anybody at all. We embrace it.
    Ms. Brown. Okay. Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you.
    The gentleman from Arkansas, Mr. Crawford, is recognized 
for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman. I appreciate that. 
Thank you so much.
    Ms. James, I want to ask you a quick question first.
    In your testimony, you noted that rice's current $14 per 
hundredweight reference price was built off costs of 
production, but that was back in 2012. So, that is 10 years 
ago. I don't want to try and lock you in on what you think an 
appropriate number is today, given the fact that things are 
changing so fast in the ag economy, but I do want to ask you, 
quite straightforwardly, does $14 per hundredweight reference 
price represent an adequate safety net for rice producers 
today, based on recent costs of production that you are seeing?
    Ms. James. Well, the easy answer is no, and unfortunately, 
our market prices are just above there, so we are kind of in a 
really tenuous situation right in rice. And as you know, there 
are only about 3 million acres of rice in our country. So, if 
rice farmers are not planting rice and producing rice, we stand 
to start seeing our infrastructure begin to erode and our mills 
and dryers not be profitable. Our American end-users who are 
buyers of domestic rice will then have to turn elsewhere. Food 
security is definitely an issue. So, keeping our rice farmers 
in business is very important, not only to the rice industry, 
but to American consumers.
    Mr. Crawford. Thank you. I appreciate that.
    I appreciate the perspective of all of our producer 
representatives here today, because I think from the outside 
looking in, I have had this conversation with many of your 
colleagues and many farmers: historic prices. Prices and 
margins are two different things, so for people who don't play 
a role in ag policy but ultimately benefit from it, I think we 
need to get a little bit of perspective here because inflation 
hits everybody, it is certainly hitting production costs on the 
farm, and that is hitting you and your bottom line.
    So, I think it is important that the American people 
recognize that if you are just looking at prices, you are not 
getting the full picture of what it takes to put food on the 
shelves, and that is exacerbated by supply chain issues that we 
are seeing, and then of course, as has been mentioned numerous 
times throughout this hearing thus far, what is taking place in 
Ukraine right in front of our eyes in real time and how that is 
impacting particularly, I would think, wheat is maybe the most 
volatile and vulnerable in this scenario. But I think all of 
you and your producers that you represent are vulnerable to 
what is taking place around the world, and I think one of the 
things that we can do to be more proactive in this equation is 
to turn back on our domestic energy production, and make us 
energy independent. Not only can we address our own needs, this 
addresses potentially the fertilizer issue that has come up--
and I would like to associate myself with the comments of Mr. 
Austin Scott. But this also addresses our ability to be a net 
exporter, and actually help Europe and Ukraine in a more 
material way.
    So, I hope that your producer groups are conveying that 
message as well. We certainly are here.
    Let me shift gears and direct a question to Mr. Doyle. The 
Soy Belt, if you will, I guess, is largely associated with 
states like Iowa, Illinois, Missouri, Nebraska, and others. But 
Arkansas is actually home to considerable soybean production, 
and of course, that is where you live and where I live. I just 
kind of wanted to get you to provide a little bit of 
perspective on the soy growing region throughout the United 
States and kind of where some of the most active areas are.
    Mr. Doyle. So, yes, we are--if you could picture North 
Dakota down to Texas, over to Florida, and up to New York and 
back again, with the exception of West Virginia, that is where 
the 30 primary soybean growing areas are. Within that, you have 
about 65 percent that is shipped through the Gulf of Mexico 
down the Mississippi River. You have about 20, 25 percent that 
travels by rail from the northern states to the Pacific 
Northwest and are offloaded on the West Coast. And then you 
have some in Virginia nearby, and the Saint Lawrence Seaway is 
now being looked at as an alternative route for shipping due to 
the container shortage. So, it is about 3.1 million acres in 
Arkansas. I believe we are number nine.
    Mr. Crawford. It is interesting, and on the FFA seal, corn 
is represented there as universal, and that may be true, and 
all respect to our corn growers, but I would think soybeans are 
probably almost universal as well. Wouldn't you?
    Mr. Doyle. So, yes. We are shipping soybeans all over the 
world. It was primarily feedstock. Now the oil market is 
driving the price, and it is a great thing.
    Mr. Crawford. Excellent. I appreciate you being here.
    Thank you, and I yield back.
    The Chairman. The gentlewoman from New Hampshire, Ms. 
Kuster, is recognized for 5 minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman, and thank you 
so much to our panel. I am excited to continue these 
discussions tracking the implementation of significant 
bipartisan wins in the 2018 Farm Bill, and also looking for 
ways to continue to sustain our farmers and foresters as we 
look ahead to the farm bill of 2023.
    As we look at the commodity title, I did want to note how 
important dairy production programs are to my district. In 
2018, I was proud to work with colleagues on both sides of the 
aisle to retool what is now the Dairy Margin Coverage Program. 
Dairy farmers had long been struggling with high feed costs and 
low milk prices that threatened the profit margins and survival 
of the many small family-run dairy farms in my district and 
across New England. That is especially true in our region where 
uniquely high transport costs for feeds were not factored into 
the Dairy Margin Coverage Program at that time. The DMC Program 
has made a tremendous difference in ensuring farmers can access 
reliable margin coverage and choose between options to ensure 
that they are securing the best coverage to fit their needs.
    Despite this win, New England dairies continue to face 
significant challenges to their long-term viability. Producers 
are still struggling with the dramatic shift in the cheese 
market that have thrown off the Federal Milk Marketing Orders 
and undermined the price of other dairy products. Once again, 
the New England region is uniquely strained by this situation, 
and as the USDA continues to work on administrative upgrades to 
the DMC Program, small New England dairies remain under 
pressure to compete against large scale dairy operations in 
other parts of the country.
    I believe there is much more we can do in the next farm 
bill to shore up our family dairy operations, and I hope future 
hearings in the commodity space will cover this topic.
    But to shift gears, I am also interested in ensuring that 
all our producers, particularly small operations with limited 
time and resources can easily access USDA online tools and 
program applications. USDA grant and loan programs and 
insurance and price support programs are absolutely critical, 
but we in Congress need to enact policy that ensures that all 
producers have a realistically fair chance to participate.
    Mr. Doyle, you briefly touched upon this point in your 
testimony. Could you talk about your producers' experience 
using USDA online tools and application systems, and what other 
steps would you urge Congress to take in the farm bill to 
ensure that small producers have as much easy access as 
possible?
    Mr. Doyle. So, thank you.
    I guess COVID really put a lot of us back in our homes and 
our computers. That is where we work best from. Anything that 
we can do over the internet through the website on a calculator 
or sign up for a program without having to go to town to an 
office with the restrictions in place, I think that is going to 
make us more efficient.
    We also are concerned about cybersecurity. We know any time 
we put our information over the web that it is susceptible, so 
we want to make sure that all of the information is protected, 
but streamlining applications or data insertion, I think that 
is a great thing. Modernization of the system, FSA offices have 
often complained that they don't communicate well at the state 
level, county level, Federal level, so just making them all on 
the same system would make it easier, make it more efficient 
with less redundancy.
    Ms. Kuster. Great, thank you.
    I have a little bit of time left if any of the other 
witnesses have any comment on the online applications and 
tools?
    Ms. James. I might just add that training and education 
back down to the county offices that can be administered with 
these farmers would be something good that we need to be sure 
and contribute, and rural internet is obviously an issue in 
most of our areas, so access is very important and having all 
of that in place. It takes time and training also, so that 
would be what I might add to the conversation.
    Ms. Kuster. Great, thank you so much. And we do understand 
the challenges of rural internet. That is a big issue in my 
district, and we are working on that. We have significant 
funding in the bipartisan infrastructure bill that has already 
gone through, and signed into law, and more to come.
    Thank you, Mr. Chairman, and I yield back.
    The Chairman. Thank you.
    The gentlelady from Minnesota, Mrs. Fischbach, is 
recognized for 5 minutes.
    Mrs. Fischbach. Well, thank you very much, Mr. Chairman. 
Usually I don't get to go this quickly so I am very happy 
today.
    I just wanted to ask Dr. Johansson. You mentioned in your 
testimony the foreign market distortions as they relate to 
sugar production around the world, and as you know, I have 
large sugar production in my district. And when I talk to 
critics of the sugar program, they seem to fail to realize that 
weakening the program will put producers in my district and 
across the country at a competitive disadvantage around the 
world, simply because of the government distortions. Would the 
sugar program be needed if it weren't for these government 
distortions around the world?
    Dr. Johansson. First of all, that is a great question. 
Thanks so much for asking it, and yes, I had an opportunity 
just to get up to your district and see some sugarbeet farms 
this past summer. Of course, they were under a lot of duress 
from the drought that was happening up there. I think it 
underscores the importance of the sugar program. As you 
mentioned, there is a great deal of foreign market 
subsidization of their sugar sectors. Unfortunately, that often 
results in overproduction in those countries, and that surplus 
sugar is then just dumped on the world market, driving down 
those prices.
    So, our producers are extremely efficient here in the 
United States. We produce nearly 70 percent of the sugar 
domestically that we consume here. We do that while meeting 
very high labor and environmental standards. It is just not the 
case that other foreign countries are doing the same in all 
cases, and certainly on a level playing field. I know some of 
your colleagues have, and you have, supported legislation that 
effectively says if other countries are willing to discontinue 
their over-subsidization of their sugar sectors, that we would 
also take a look at our programs.
    So, with that, I would just say yes, our producers from 
both the cane side and the beet side are extremely efficient, 
but as I pointed out in my testimony, our program effectively 
is administered at zero cost. But we just can't compete with 
foreign governments subsidizing their producers to such a 
degree that is going on. We just saw a recent case come out of 
the WTO noting the extreme support that India is providing its 
sugar sector and we have seen the results of that with all that 
sugar effectively dumped on the world market. Thanks a lot.
    Mrs. Fischbach. Well, thank you, and just building on that, 
you mentioned you were able to come to my district and see some 
of the disasters that they were facing, that the beet farmers 
were facing last year. And, you were the Chief Economist at the 
USDA when the WHIP+ program was put together that rescued 
growers in my state as well as other states when natural 
disasters threatened to drive many out of business. Can you 
expand a little bit and talk about the WHIP+, why it is so 
essential for our growers and how the producers took care of 
the consumers then?
    Dr. Johansson. Yes, of course. We would say producers would 
prefer to have a good harvest and market their product as 
opposed to relying on government programs. But in cases such as 
we saw with the WHIP+ Program back in 2018 and 2019, we had 
just such a severe hit to the sugarbeet industry with the 
freeze that went on up there, that untimely freeze that froze a 
lot of those beets in the ground. And we saw recently just this 
year Hurricane Ida slamming into Louisiana.
    So, I would just say that the WHIP+ Program has been 
effective. Our producers have utilized that program when it has 
been there, and they have been eligible for those loses. Of 
course, as I noted, the 2022 freeze down in Florida is not 
authorized for WHIP+ at this time, but ultimately, that program 
or if the Committee looks towards WHIP--working on the WHIP 
Program to make it maybe a standing disaster program or 
something like it in the next farm bill, in a way that doesn't 
interfere with crop insurance. Of course, that--as everybody 
here on the panel has noted--is really underlying the safety 
net for a lot of their operations. So, we would certainly be 
receptive to working with the Committee on that. And again, I 
thank you for all your support, certainly, in getting that 
program up this year, and certainly for future disasters that 
just fall outside of the regular crop insurance safety net sort 
of regime. Having something like WHIP+ has been very effective 
for our producers.
    Mrs. Fischbach. Well, I thank you very much and I 
appreciate your answers. I would just like to thank the 
Chairman for holding this hearing today, and with that, I yield 
back.
    The Chairman. Thank you.
    And now the gentleman from Illinois, Mr. Rush, is 
recognized for 5 minutes. Mr. Rush.
    Mr. Rush. Thank you, Mr. Chairman for this extraordinary 
hearing, and I want to thank all the witnesses for their 
participation.
    Mr. Chairman, I have spoken before in this Committee about 
how my grandfather, who was a farmer in southwest Georgia, and 
indeed, I was born on his farm. And my grandfather, like too 
many Black farmers over the last 100 years or so, ultimately 
lost our farm. And I am concerned that not much has changed, 
Mr. Chairman, for Black farmers over the last decades. 
According to a review of USDA data, nearly all of the funds 
provided to farmers to offset the current impacts of the 
pandemic COVID-19 went to White farmers.
    To any of these extraordinary witnesses, what policy would 
you recommend to the Committee to rectify both the historic and 
also the current discrimination that is too often faced by 
farmers of color, and specifically, would you include increased 
transparency of the very subsidies that are so vital to 
America's farmers and to Black farmers in your recommendation? 
Any witness?
    The Chairman. Mr. Rush is asking any witness to respond to 
the discrepancy in the receiving of financial assistance for 
our Black farmers. Would any of you care to respond to that?
    Well, let me comment on that, if I may.
    Mr. Rush. Mr. Chairman?
    The Chairman. Yes.
    Mr. Rush. I need some response from the witnesses. Are they 
prepared to respond, or are they not prepared to respond?
    Dr. Johansson, are you prepared to respond or are you not 
prepared to respond?
    Mr. Doyle, are you prepared to respond?
    Mr. Doyle. Okay, absolutely.
    I think it is about opportunity and communication. We have 
an open door if--I have spoken with--we have reached out to 
Black Farmers Association. We were invited to come to Georgia 
and speak at an event this past summer. I think COVID 
disallowed that. But no, we would welcome any comment or input 
from minority grower associations, absolutely. We only speak to 
the issues that our farmers bring to us, the most important 
things, and absolutely, I would put minority--Arkansas had----
    Mr. Rush. I only have a few minutes.
    Ms. Berg, would you respond or are you prepared to respond 
to my question, or are you unprepared? Yes or no?
    The Chairman. I think, Ms. Berg, he is referring to you.
    Ms. Berg. Could you clarify the question for me, please?
    Mr. Rush. Okay. Let me just----
    Ms. Berg. I can't hear him very well.
    The Chairman. I think that what he is asking, Ms. Berg, if 
you could share with us what efforts you all are making in 
order to assist in the efforts to lift up our Black farmers 
more emphatically, because our Black farmers, by every 
financial economic indicator, are way behind because of past 
and present racial discrimination.
    And so, what Mr. Rush is asking is what are you 
specifically, and other panelists, doing to address this? Are 
there any plans or any activities that any of you have to 
assist us in this situation to rectify the situation 
financially that is impacting our Black farmers?
    Ms. Berg. So, one of the things that we do in our wheat 
industry, we represent 20 states across the country. We are 
always looking for new states to come on board to be part of 
our membership and be part of the decision-making process that 
we do for the wheat industry.
    The other one is we reach out to USDA and they have quite a 
few programs out there that, whether it is beginning farmers, 
minority farmers, and so hopefully we support those programs to 
help improve grower education.
    The Chairman. Right.
    Mr. Rush. Ms. Berg----
    The Chairman. Mr.----
    Mr. Rush. Ms. Berg, being Black is not a state, all right, 
so this is not a state-by-state issue. Being Black is not a 
state. It is a condition, it is a reality, it is racial 
description. But it is certainly not a state.
    The Chairman. Mr. Rush, what we are going to do, each 
panelist can be able to provide a written statement to you on 
this----
    Mr. Rush. Please.
    The Chairman.--and I appreciate your inquiry on a very 
important issue, and all of our witnesses may respond in 
writing if you have specific things to address Mr. Rush's 
concern.
    And now, I recognize the gentleman from California, Mr. 
LaMalfa, for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman.
    First up front, I want to thank you for your moving tribute 
and prayer for our good friend, Mr. Hagedorn. He was a really 
good man and his loss hurts around here a lot. Good man from 
the first time I met him in our building there, so I appreciate 
everybody's kindness towards his memory and for his wife 
Jennifer and family.
    The Chairman. Yes.
    Mr. LaMalfa. So, with that, I want to just launch right in 
here. I have been a lot of places today, so I want to get with 
Jennifer James here from USA Rice. She had earlier testimony 
about PLC, the price loss coverage, and also to the other 
program, Agriculture Risk Coverage, can actually be a little 
better, a little more flexible when worked with other 
commodities.
    And so, would you like a little more time to expand on how 
the flexibility to switch between the two programs is helpful?
    Ms. James. Well, in Arkansas, I have elected the PLC during 
the entire farm bill, and I am not as familiar with the 
California rice growing and their choices in the farm bill, but 
I can speak to the PLC and its importance definitely in the 
mid-South rice growing region. It has allowed many rice farmers 
to stay in business during this time, as our prices have been 
very depressed, and we are going into an area where the input 
costs are extremely high. My friends in California are probably 
experiencing some of the highest in the rice industry at this 
time, so we really cannot stress enough that the safety net and 
these reference prices, this is our safety net. The crop 
insurance program is important to us in certain instances, but 
the safety net, the PLC Program is vital.
    Mr. LaMalfa. So, as we are seeing incredibly higher input 
costs, I mean, it looks like fertilizer for my co-op at home is 
up at least 80 percent, and we try to get our fuel tanks topped 
off at the tune of at least 50 percent more in cost from a year 
ago.
    So, what you are saying is increasing the reference price 
is going to be extremely helpful towards getting through this 
next phase for rice, and I imagine the other commodities, too, 
right?
    Ms. James. Yes, sir, that would be correct. And we are 
working to try and figure out the data behind all that.
    Mr. LaMalfa. Okay. So, is that something that will be 
pretty forthcoming, the data on that, so it can be implemented 
in our discussions?
    Ms. James. I am sure the rice industry will be working on 
that going forward, yes.
    Mr. LaMalfa. Okay, thank you.
    Jaclyn Ford with cotton. An issue for rising input costs 
affecting cotton as well, I guess that is somewhere across the 
whole range, some were reaching 25 to 40 percent when you blend 
fertilizer, fuel, and other inputs in there for--and cotton as 
well. And maybe that is low. You can direct me on that, too. 
What do you think this Agriculture Committee can be thinking 
about and incorporating into these farm bill discussions in 
just input costs, and what kind of reality are we going to have 
to have in the farm bill to better reflect, going forward, the 
issues we face?
    Ms. Ford. I think just taking margins into consideration, 
increased reference prices are good, but also with the 
increase, we just never know what war and what the COVID 
pandemic brought our input costs up. So, I think considering 
margins when you are making those decisions for us.
    Mr. LaMalfa. One of the things we are driving for 
immediately is we feel our energy costs can be brought back 
into line somewhat if the United States is producing its own 
energy and not relying on Middle East or high-cost energy, 
high-cost electricity, and all that.
    Ms. Ford. Yes.
    Mr. LaMalfa. My home State of California, electricity is 
going to continue to go through the roof as generation is taken 
offline. We had two nuclear power plants not that many years 
ago. We are going to have zero soon. Hydroelectric dams are 
under threat of being taken out. I am not sure where these 
input costs on energy are going to be able to come into line 
with that kind of policy. So, I appreciate that.
    Now, Nicole Berg from wheat growers. I think this doesn't 
just apply to wheat payments, in your experience, it sounds 
like it has taken a year and a half after a crop is harvested 
for wheat payments to make it to the grower. So, that lag can 
obviously be really tough for cash flow and making payments. 
And even farmers on the edge might see that they might be going 
out of business waiting for that payment. Please, what do you 
have to say about that, to fix it?
    Ms. Berg. Yes, during the WHIP+ appropriations, it is in 
the appropriations and we are now working on the disaster for 
2020 and 2021, and we are now in 2022. And USDA hasn't really 
even finished rulemaking yet. So, we are hoping that with more 
expedience in rolling out these programs through USDA, it would 
help us farmers, help us in that time of need during that 
disaster and not just 2 years later and people are going out of 
business.
    Mr. LaMalfa. Yes, unbelievable. Well, hopefully with most 
of this COVID nonsense behind us, we will be sharpening these 
issues up a little.
    The Chairman. Thank----
    Mr. LaMalfa. Mr. Chairman, I thank you.
    The Chairman. Yes, thank you.
    The gentlewoman from Illinois, Mrs. Bustos, who is Chair of 
the Subcommittee on General Farm Commodities and Risk 
Management, is recognized now for 5 minutes.
    Mrs. Bustos. Thank you very much, Mr. Chairman.
    Let me jump right into this. The 2018 Farm Bill requires 
the use of crop insurance yield data as the first source of 
data in the ARC Program. So, my questions are to Mr. Doyle and 
to Mr. Edgington. And if there is anybody else who wants to 
chime in, please feel free. But for the two of you 
specifically, has the use of crop insurance yield data improved 
how ARC has functioned? Mr. Doyle, we can start with you.
    Mr. Doyle. Yes, absolutely I think it has. It is more 
accurate data. I believe averages, as you know, farm yields 
from high to low across all types and fertility levels, so that 
crop insurance tied back to an FSA number is definitely more 
accurate, in my opinion.
    Mrs. Bustos. Thank you, Mr. Doyle.
    Mr. Edgington, if you could answer?
    Mr. Edgington. Yes, I totally agree with Mr. Doyle and we 
have made a lot of strides in the crop insurance world talking 
to the Farm Service Agency offices and how this all works for 
the farmers as they produce yields and provide the information 
to the various resources that need it. And so, we are 
definitely making strides. I think it is an area that we can 
continue to improve, though, because technology is helping us 
in that area in a lot of ways.
    Mrs. Bustos. Okay, very good. Anybody else want to chime in 
on that question?
    All right, if not, let me move on to my next question. 
Again, this will be for Mr. Doyle and Mr. Edgington for 
starters, anyway.
    USDA has undertaken efforts to streamline the acreage 
reporting process for producers who participate in the Title I 
commodity programs and Federal crop insurance. Has this 
streamlining initiative worked, and has the reporting process 
been simplified for producers? Mr. Doyle, you first, please.
    Mr. Doyle. So, I think COVID has put us in a challenging 
year for the last couple of years, so we haven't had a lot of 
face-to-face conversations in the FSA office. Anything that 
makes reporting easier, more accurate, less redundancy I think 
will help us enter the programs that we so need, more 
efficiently and effectively, so I would say the verdict is 
still out for us, but I applaud the improvements to reporting.
    Mr. Edgington. Yes, and I agree with him on that. One of 
the areas that I think we have been challenged on--and COVID 
has been trying to maybe show us some things to work on--is the 
age grouping that we have with farmers and how they are 
comfortable in reporting. There is a generation just a little 
bit older than Brad and I that--I mean, there are days that I 
am not very comfortable with the computer, but I certainly do 
better than the generation that is thinking about retiring. And 
so, they are struggling, whether it is with their crop 
insurance agent or with the FSA office. Them not being able to 
go into the offices has been a real hindrance. They have worked 
their way through it. Our offices, at least in my area, have 
been very flexible in trying to help people, whether we have 
done things online or other ways.
    But we are making strides, and it is--we love technology 
right up until we have to use it to give reports, it seems 
like. And so, we will get there and we are getting better, but 
I think there is always room for a little bit of improvement.
    Mrs. Bustos. Okay. I am going to try to squeeze in one more 
question, and this will be for the panel, so whoever wants to 
jump in. It is a broad question.
    I know the perspectives on ARC and PLC over the past couple 
of years have varied depending on the commodity. So, as this 
Committee continues our oversight work and looks ahead to the 
next farm bill, what are the metrics that we all should use 
when we evaluate the effectiveness of our existing programs? 
And maybe we will have one of the other people start first, and 
then anybody else who would like to chime in?
    Mr. Doyle. I think we definitely need to address reference 
price, because it has been mentioned several times here, but it 
is also important to remember that we don't want reference 
price to dictate the planted acres. We want to use it as the 
safety net, but we don't want it to drive or change our 
decisions from year to year. We want to use it as a tool.
    Mrs. Bustos. Thank you.
    Dr. Johansson. Yes, that is a great question, Congresswoman 
Bustos. I would say, at least from the sugar perspective, 
certainly looking at loan rates and how closely aligned they 
are with our costs of production would be another metric to 
look at.
    Mrs. Bustos. Thank you.
    Ms. Berg. Madam Congresswoman, I think one of the things in 
the wheat industry we would like to do, we work on such thin 
margins, and we don't necessarily want to make a bunch of 
money, but we want to at least try to break even on these 
safety net programs and try to keep our family farms in 
business. So, I guess I would look at definitely the bottom 
line of how much do we make or how much don't we make, and how 
we plan for our risk management process. In my area, we have 6" 
of rainfall a year. Last year, I didn't harvest \1/3\ of my 
farm, and so, I had to utilize the safety net of crop insurance 
and it was there, and I would have to say it has kept the 
family farm in business.
    The Chairman. Thank you. The gentleman from Indiana, Mr. 
Baird, is recognized for 5 minutes.
    Mrs. Bustos. My time has expired.
    Mr. Baird. Thank you, Mr. Chairman, and I too would like to 
start off by expressing my loss for my friend Mr. Hagedorn from 
Minnesota. His insight and his wisdom really contributed to 
this Committee in his home State of Minnesota, so I just want 
you to know I do miss him. Aside from that, Mr. Chairman and 
Ranking Member, I really appreciate having this hearing. I 
appreciate us getting started on the farm bill, and I 
appreciate all the witnesses sharing your insight with us here 
today.
    Well, the one thing I want to start off with is--and maybe 
all of you can respond to this, but, Mr. Doyle, I keep hearing 
in my area, Indiana, that they feel the safety nets almost have 
to fall too low before they actually kick in and really give 
any kind of a safety net. And so, as we look at ARC, and the 
PLC, and otherwise relatively successful programs, do you feel 
that the reference prices have adequately kept up with the 
market trends, and the input costs, and your overall break even 
cost for production? And, if not, how do you feel we, as a 
Committee, should look at those reference prices, and how 
should they be evaluated?
    Mr. Doyle. Thank you for the question. I think Purdue 
University has a break even cost around $11.07 for soybeans per 
bushel, and the current reference price is $8.40. As has been 
mentioned here several times today about the input costs, we, 
as farmers, make most of our decisions the fall prior to 
planning. We make a budget, as we need to, but a lot has 
changed since then, so our profitability is at risk now, and 
raising that reference price to a certain level, absolutely we 
need to do that. What that level is, I believe we are not ready 
to quite agree on yet. We have a lot of economists and experts 
who will work on that, and we would be glad to present that at 
a later date.
    Mr. Baird. Super. I really appreciate you mentioning my 
alma mater too, Purdue.
    Mr. Doyle. American Soybean Association was founded 101 
years ago on the Fouts Farm in Indiana.
    Mr. Baird. Super. Thank you. Anyone else care to comment 
about the reference prices?
    Mr. Edgington. So, the corn growers are just kind of 
getting started in their whole process, and we are really 
grassroots. I mean, we start down at the county level, and it 
goes to state, and next week, at Commodity Classic, there will 
be a lot of discussion around a lot of this, but we have also 
done surveys and questions, because there are regional 
differences, even with--in corn production.
    Mr. Baird. Yes.
    Mr. Edgington. It is an area that is still under study for 
us, because you ask a really tough question of what should the 
price be. If we had a stable market every year that it is--
whatever this is, that is an easier discussion than the 
volatility that we live in, both on the input side and on the 
products. So it is a very challenging discussion, and we will 
definitely be taking some time to analyze where we should be 
at.
    Mr. Baird. I appreciate that very much. I have a minute and 
51 seconds, so I have three more. If any one of you three want 
to comment, I would appreciate it.
    Ms. James. I would be happy to chime in. For the rice 
industry, I think I have mentioned it several times that the 
reference price is not working for us. And I know we are 
looking forward, but currently, the 2021 PLC is going to be 
about \1/3\ of the 2020, and for the 2022 crop we are about to 
plant, it appears we will have no PLC, but the market is just 
slightly above there, so we are in a very tenuous area, trying 
to make those planting decisions going forward, and so it is 
very important to the rice industry.
    Mr. Baird. Thank you. We have a minute and 8 seconds.
    Ms. Ford. On behalf of the cotton industry, I can tell you 
that we are very similar to Mr. Edgington. We have people 
meeting regionally, because cotton is huge too, and cotton in 
Texas is different than cotton in Georgia, and cotton in 
California is different than cotton in Georgia, so we are 
listening to all of our different sectors, and getting 
everybody's input in all of that. It will be the end of the 
year, probably, before we have all of those ideas, and interest 
organizations combined to get our recommendations.
    Mr. Baird. Thank you. Any others?
    Dr. Johansson. Congressman, we are also--both from the cane 
side and the beet side, we are also looking towards talking to 
all of our members, and finding out what are the most salient 
recommendations to provide to the Committee, so we are also at 
the same process at this point in time. But certainly 
everybody, as has mentioned today, and certainly as you have 
highlighted, are watching these cost productions, and 
inflationary trends towards our input costs with a great deal 
of concern.
    The Chairman. Thank you. The gentlewoman from Washington, 
Ms. Schrier, is recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and welcome to all of 
our witnesses. First, I want to thank Ms. Berg for testifying 
today from my home State of Washington. It is wonderful to see 
you again, and I so appreciate you sharing your expertise with 
all of us. I was going to focus on the wheat industry today, 
and so I have a couple questions for you. Let me just set the 
stage by saying that Washington State produces close to half of 
the nation's soft white wheat, which is very special, and 
approximately 90 percent of that is exported.
    In your testimony, you noted that the wheat market has been 
like a roller coaster lately over the last few years, with 
severe weather events, trade disagreements, the pandemic, 
supply chain issues disrupting normal operations, even having 
China decide that they are going to grow their own wheat, and 
not have any imports some years. I have been hearing from 
growers in my district about the challenges of getting their 
crops overseas due to supply chain disruptions, mostly caused 
by exploitative practices of foreign-owned shipping companies, 
and that mainly affects hay and wheat. In recent months, I have 
been hearing the opposite side of this, about supply chain 
disruptions in the other direction raising the costs of inputs 
as a result of similar processes.
    So, Ms. Berg, I just thought I would ask in a general 
sense, in light of the ongoing drought in the Pacific 
Northwest, higher input costs, the supply chain issues, I 
wanted to just ask generally how Title I farm bill programs are 
working, and if they are not working well, what are you hearing 
most from the farmers in your area?
    Ms. Berg. Well, thank you, Congresswoman, and I want to 
thank you for all your hard work with regard to containers and 
shipping issues, because I know you have been a champion for 
our state, working on these issues for us farmers. I guess what 
I am hearing in the state is--with regard to USDA programs is 
we are definitely in a change of staffing at USDA, with regard 
to people are retiring. We have new people coming on board, and 
so, with these retirements, I think that there needs to be--
definitely training for quality assurances in administering 
these programs.
    And then I do look forward to the day we can go back into 
the offices and actually meet with folks. Over--the online has 
worked. Some farmers are grumbling because they--I mean, they 
are farmers. We don't want to be behind a computer. We want to 
go into the office and have somebody help facilitate us signing 
up for programs. And so that is kind of what I hear on the 
country side.
    You addressed my volatility issue that the wheat industry 
has. I think it needs to be brought out that \1/3\ of the wheat 
production comes from--in the whole world comes from Ukraine 
and Russia, so we look like we are going to have definite 
volatility. Last week we were up limit, and then we are down 
limit, so I definitely see this as a huge volatility issue for 
our industry, with regard to price.
    Ms. Schrier. Thank you for commenting on both of those 
issues. First, I will tell you that it feels like we are really 
close to being able to do things in person. We are here in this 
Committee room, not in masks, in this hopefully long period of 
being able to feel safe, and we feel that same angst. None of 
us like to be behind computers all the time. I was going to 
ask, since you touched on Ukraine and Russia, you are looking 
at this as uncertainty and volatility. Is there any benefit for 
exporters from the United States to be able to help alleviate--
and fill these gaps, alleviate hunger around the world?
    Ms. Berg. I hope there is. I hope this becomes an 
opportunity for American farmers, and American wheat farmers, 
with regard to a little bit of disruption with regard to supply 
and demand kind of concepts as we move forward. But the wheat 
industry also--we don't want to see people in war and so we 
don't necessarily want them to have a hardship either for their 
country and their region.
    Ms. Schrier. Right. And this would be specifically filling 
temporary gaps.
    Ms. Berg. Yes.
    Ms. Schrier. Thank you, and thank you for those comments. 
We agree. As we look ahead to the farm bill, are there some 
ways specifically that we can sustain some necessary changes 
for you? In addition to that gap, you talked about a year and a 
half to 2 years of getting funding reimbursed. Are there other 
ways that we can help?
    Ms. Berg. I think streamlining. I know that it was 
discussed earlier today. Streamlining the process would help 
farmers. Also in education and outreach to farmers of when is 
the signup. I think we could do better in promoting and working 
with--maybe it is the wheat growers--helping promote the 
message of get in and sign up. I think that that would be an 
important----
    The Chairman. The witness could continue with a written 
response to her. Thank you very much. And now the gentleman 
from Iowa, Mr. Feenstra, is recognized for 5 minutes.
    [The information referred to is located on p. 154.]
    Mr. Feenstra. Well, thank you, Chairman Scott and Ranking 
Member Thompson. My district is the top ethanol producing 
district in the entire nation. Biofuels are a low-cost, low-
carbon complement for other fuel sources, and it can be net 
carbon negative in the next several years. Biofuels are good 
for the environment, they are good for our farmers, and they 
are good for our consumers. We have all seen how Russia chose 
to needlessly attack Ukraine, and the consequences of this will 
be significant to our agriculture community, and even the farm 
bill. Today the U.S. imports 206,000 barrels of crude oil from 
Russia every single day. This must stop. We must become energy 
independent, and biofuels are ready to fill that gap both 
domestically and overseas.
    Mr. Edgington, thank you for being here from our great 
State of Iowa. It is a great pleasure to see you. I appreciate 
your testimony. You mention in your written remarks that 5.3 
billion bushels of corn was used for ethanol in 2021, and there 
is more capacity to increase fuel production beyond that. To 
what extent can the ethanol energy increase energy 
independence, and how can the farm bill partner with the 
industry's goal to provide this opportunity where we can be 
energy independent through biofuels?
    Mr. Edgington. Representative Feenstra, thank you for that 
question. Ethanol is a fantastic product, and it does two 
things, it provides energy, and it cleans the environment. 
Greenhouse gas reductions are, the latest studies are coming 
out, over 50 percent reduction compared to traditional fuels, 
and we just keep getting better. And so it kind of covers two 
things. Energy independence, we immediately have more ethanol 
that is available, sitting in tanks that could go into cars and 
vehicles today and tomorrow. E15, we lost that on a year-round 
basis on what is a very interesting wording situation. We could 
get that back, at least on a temporary basis. That would 
definitely put more fuel into the supply that is domestic, that 
is here already.
    We, along with our friends on the diesel side of 
renewables, have a great product, and we have more capacity. 
More plants are being built. Plants are able to expand. And we 
currently use a little over 5 billion bushels of corn for 
ethanol production, but we are putting almost $1\1/2\ billion 
back into the livestock feed as actually a higher quality 
product. So it is really a great situation that we have with 
corn, and the ability, with ethanol, to simply help let the 
United States be more energy independent on its own.
    Mr. Feenstra. I agree 100 percent. Mr. Doyle, sort of the 
same question with biodiesel, right? I mean, we have this great 
opportunity, and do you see anything that we need to look at to 
be proactive in the farm bill to address this, that we can be 
energy independent?
    Mr. Doyle. So soybean oil, as you mentioned, biofuel--
actually 66 percent reduction in greenhouse gases. What once 
was a byproduct is now driving the price of soybeans. So any 
support to our refineries within the U.S. to encourage any kind 
of tax credits would be very beneficial.
    Mr. Feenstra. Yes. I agree. I mean, I just think this is 
something the farm bill needs to look at to get us not reliant 
on 206,000 barrels a day of Russian oil. Got another question. 
I used to be a crop agent, and I know I had a lot of anxiety 
when the last farm bill came around, when it came to crop 
insurance. It seemed like it worked out okay. I know there are 
a lot of bumps in the road yet. Mr. Edgington and Mr. Doyle, we 
talked about a lot of the protections that are out there 
already, but do you see any nuances that we need to make crop 
insurance better, to make it easier for the farmer, whether it 
be at the FSA office, or in general, the policies that are 
currently out there?
    Mr. Edgington. So, one of the things I think that we have 
the opportunity is simply to expand what we can work with under 
the side of crop insurance, and that is what the PACE Program 
is about that has come out, and it is all about supplemental 
nitrogen, or split-apply nitrogen, which is kind of a two-win 
situation, because you are doing--be more efficient with your 
nitrogen as you apply it. The challenge you have--and I do this 
100 percent on our farm, we split-apply all of our nitrogen--
is--if the month of June in Iowa is really, really wet, you 
could be caught short, and corn is very nitrogen dependent. So 
the idea of the insurance, and it is being rolled out in 11 
states, test counties, is that--if a weather event causes 
economic harm because you couldn't finish nitrogen, this could 
be covered through that. So that is one of the pieces.
    Mr. Feenstra. Yes. I assume the same for soybeans.
    Mr. Doyle. Yes, 90 percent coverage for soybeans.
    Mr. Feenstra. Yes.
    Mr. Doyle. Very important.
    Mr. Feenstra. Yes. Sounds good. Thank you so much, and I 
yield back.
    The Chairman. Thank you. The gentleman from Georgia, Mr. 
Bishop, is recognized for 5 minutes.
    Mr. Bishop. Thank you very much, Mr. Chairman and Ranking 
Member, for holding this hearing, and thank you to our 
witnesses for attending. And let me offer my apologies to Ms. 
Rogers for the technical difficulties in my introduction, but I 
certainly want to welcome you and Ms. Ford to this Committee.
    Ms. Rogers, in your testimony you mentioned that there are 
a number of growers in specific regions that have produced 
peanuts for years, but don't have access to the PLC Program 
because of a lack of base acres. We know that base acres will 
help young and beginning farmers of covered crop commodities. 
How important is base acre enrollment to the industry, 
particularly to young and beginning farmers, and how can our 
Committee be helpful in addressing this issue? And what are 
your thoughts on the voluntary update of base acres?
    Ms. Rogers. We are looking into that matter, definitely. We 
have a number of growers that would benefit from an update of 
base acres, but there are some other options--that as well, and 
we have our economists looking into that, looking into the 
different options, and the cost of those options in the ways 
that we can help those growers, but not be detrimental to the 
growers, because this affects all growers, and lots of 
commodities in lots of the U.S., as you know. So we are hoping 
that in the future we can work with the Committee to come up 
with a solution to address this base issue.
    Mr. Bishop. Thank you. Mr. LaMalfa touched on this issue, 
but one of my priorities on the Committee of Appropriations is 
options for a permanent solution to disaster relief. Thought it 
continues to be elusive, there are improvements that really can 
be made, and, of course, the stopgap measures, like ad hoc 
legislation, as has been indicated creates delays, so we have 
to find a way to expedite the process.
    You talked about the need for either a permanent disaster 
program, or other policy options to address disaster 
conditions, Ms. Ford. Can you talk about what disaster aid 
could look like, and how Congress could be helpful in 
expediting, in the processing of that relief? And, Mr. Coleman, 
could you weigh in also on what permanent disaster relief would 
look like for specialty crop producers? Ms. Ford?
    Ms. Ford. Yes. I am not really prepared to answer that 
specifically but I will get with the Council and get you an 
answer to that.
    [The information referred to is located on p. 154.]
    Mr. Bishop. Okay. Mr. Coleman?
    Mr. Coleman. I am not really prepared either. The one thing 
that I will say about the crop insurance is what we are finding 
with these specialty crops is our proven yields, if you have a 
real marginal year, the assistance, or the packages from the 
FSA and the crop insurance don't match up, and you end up with 
no insurance at all. And so that is a concern for our growers 
with these specialty crops. We need to find a way to make those 
numbers work better so if we do have just right below--or just 
borderline a disaster, we can still qualify for payments.
    Mr. Bishop. Okay. Thank you. You guys have come, and we 
depend upon you, because you are where the rubber meets the 
road. And, as we move into the new farm bill, we want to help 
forge solutions to these problems. And if you could really, 
really give some thought to it, and talk with others in your 
industries to help us so that we can craft in the new farm bill 
possibly some policy solutions that will address these 
concerns, because they are very serious, and I know that you 
probably don't have fully reasoned solutions at this point.
    But as we move forward, help us so we can try to work it 
out, because we want to have policies in place that work for 
everybody--specialty crops, and for all of our farmers that 
will really continue to help us to produce the highest quality, 
and the safest, and most abundant, and economic agriculture 
anywhere. So thank you all for your testimony, but help us as 
we go forward with the farm bill in crafting a solution. So 
thank you so much for your coming, and sharing with us, and we 
look forward to hearing from you going forward.
    Mr. Coleman. Thank you.
    The Chairman. The gentleman from Georgia, Mr. Allen, is 
recognized for 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman, I thank you for holding 
this important hearing. Obviously the commodity industry is 
very complex, and I have had a competing hearing today, but I 
have tried to check in, and--trying to learn more about, is 
there any way to make this process simpler? I mean, we talk 
about people who don't qualify because they don't have the 
acreage, or something like that. I mean, I don't quite 
understand those things.
    But one thing that I am hearing back home a lot is that 
commodity prices are up, corn, cotton, soybeans, wheat, but 
input costs are rising as well, which is a real problem. For 
commodities that have not seen price increases, there is not 
additional revenue to offset the higher input costs, then 
barring a significant increase in yield, net farm income could 
be lower in 2022. Will this lead to calls for Congress to 
design some sort of a program that responds to these production 
cost increases? And I would ask each of you to respond to that 
question, staring with Ms. James.
    Ms. James. Certainly, and crafting what that might look 
like, I certainly don't know today, but I can tell you that 
with these higher input costs, and the price of rice that has 
not elevated, the rice industry--the rice farmers look at 
losing about $500 million in this next crop year, so it is a 
very disturbing and important issue that we must continue to 
discuss.
    Mr. Allen. How are you going to overcome that?
    Ms. James. Well, from a farmer standpoint, the unfortunate 
answer would be not to plant rice, and plant another crop, and 
that is not good long-term for our industry.
    Mr. Allen. Yes. Ms. Ford?
    Ms. Ford. Yes, the PLC Program has worked well for us in 
the past. This year people are going to be utilizing STAX more, 
but we are concerned with input costs rising, and even with 
cotton at over $1 today, we are at a break-even point, which is 
really sad, because normally we are really, really excited 
about a dollar cotton. So input costs now--fertilizer is 120 
percent from what it was last year. Some chemicals are double. 
Fuel is up 40 percent, so our input costs are up significantly, 
so definitely we need to re-evaluate the reference price, and 
what we need to do.
    Mr. Edgington. As I said earlier, that is a tough question. 
When you do these farm bills about every 5 years, and you try 
to look at averages and lengths, and have we moved into a 
different price parameter on input costs long-term. That is 
really tough to forecast like that, and we have to use the USDA 
and other economists to help us with that, and we are going to 
be looking into all of that as we think about this.
    It is probably against the nature of most farmers to want 
to say that they are going to use some USDA program to help 
them out every single year. That is not their style. Most of 
the time it is leave me alone. Let me produce what I am doing, 
and leave me alone. So that always comes into the discussions 
we have, but we are a ways away from having that----
    Mr. Allen. Well, see, yes, we want to leave you alone, but 
the problem is this war on fossil fuels has caused the input 
prices to do this. And this Administration's war on fossil fuel 
is the problem, and that is an event outside of your control. 
And that is why I asked this question. Yes, Ms. Berg.
    Ms. Berg. Thank you, Mr. Congressman. Input costs--just to 
give you an example, glyphosate, Roundup, you used to be able 
to purchase it for $15, and now we are hearing prices quoted as 
$82. So that kind of gives you a perspective of increases in 
these input costs. Farmers are survivors. We will try to 
survive through this dark time. A lot of us did some pre-
purchasing, did fertilizer spreading last fall, and hopefully 
it doesn't catch up to us too much with these rising costs, and 
putting family farms out of business.
    Mr. Allen. I know, but it is so unnecessary, because if we 
would return to the previous Administration's energy policy, we 
wouldn't be seeing the cost of a barrel of oil doing this. I 
mean--go ahead, sir.
    Mr. Doyle. So, yes, not only would the price--has the price 
increased, a lot of it is uncertainty for the supply. We might 
not even have the crop protection products to finish this crop 
out. If we could bring manufacturing back to the U.S., that 
would be critical for our longevity in this industry.
    Mr. Allen. Yes, and we have to bring all essential 
manufacturing back to this country. Mr. Chairman, I am out of 
time, and I yield back. Thank you, sir.
    The Chairman. The gentleman from California, Mr. Carbajal, 
is now recognized for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chairman. Santa Barbara 
County, in my district, was historically home to sugarbeet 
production, and California continues to be a sugar producing 
state. I am a strong supporter of our current sugar policy, and 
I am looking forward to discussion on how to maintain and 
strengthen it in the upcoming farm bill. Dr. Johansson, U.S. 
sugar policy has allowed American sugar producers to invest in 
on-farm and factory improvement to become even more efficient 
and more sustainable. Per acre yields for sugarbeet and 
sugarcane have both sharply increased over the past 20 years. 
Can you explain how the current U.S. sugar program has helped 
producers invest in their operation?
    Dr. Johansson. Congressman, that is a great question, 
thanks for asking. Sugar program, as you have mentioned, has 
been effective in helping our producers improve efficiencies, 
increase in productivity on their fields as well. As you have 
mentioned, over the past 20 years or so, we have seen 
production increase by about 16 percent for both sugarcane and 
sugarbeet production in the U.S., all while farming 11 percent 
fewer acres, and that is just a testament to the general 
ingenuity on the part of our producers. We have heard about a 
lot of that today here on the Committee. The American farmer is 
the most productive, and most efficient at responding to 
challenges, and we are seeing that play out on our sugarbeet 
and sugarcane farms across the country.
    The current policy, as I mentioned earlier, is extremely 
important, even though it comes at no cost to the taxpayer, and 
it has operated a zero cost for the last--for 17 of the last 18 
years, and, of course, forecast to cost zero dollars going 
forward for the next 10 years by USDA. It is extremely 
important because of the issue that we see in the global sugar 
market being so distorted by foreign country over-subsidization 
of their sectors, and the dumping of that sugar on the global 
market, which drives down costs--the price of the global 
sugar--global sugar prices to below the cost of producing that 
sugar.
    And, of course that is something that would effectively 
drive our producers out of production, if that program wasn't 
supported by the Committee, and we look forward to, certainly, 
your continued support on the Committee, and looking at 
strengthening that safety net as part of the other commodities 
as well, looking at trying to align our supports, whether that 
be loan rate, or the other programs that have been talked about 
today better with cost of production and input costs.
    Mr. Carbajal. Thank you, Dr. Johnson--Johansson. Sorry for 
screwing up your name there, I apologize. With the COVID-19 
pandemic impacting our supply chain, and disrupting so many 
sectors of our economy and agriculture industry, can you share 
with me how these challenges have impacted the domestic sugar 
industry?
    Dr. Johansson. That is another great question, thanks for 
asking. Of course, COVID-19 has--the pandemic has affected all 
producers in all their markets, both here in the United States, 
and certainly we have seen abroad, and, of course, the conflict 
that we are seeing between Russia and Ukraine is obviously 
going to be putting a lot of energy markets, fertilizer 
markets, and commodity markets in turmoil. Over the past couple 
years, certainly, our sugarcane and sugarbeet producers have 
been cognizant of this issue, and have put in place safety 
measures at all of our mills, refineries, processing 
facilities, to safeguard all of our employees, and we have done 
a very good job of that.
    Certainly we have been concerned with labor in general. It 
is a big issue for us, as it is for a lot of other commodities 
that are represented here, and we are continually trying to 
both provide safe working conditions for all of our employees, 
but also secure labor, whether that is through the guestworker 
programs, or other labor sources here in the United States. Of 
course, the labor market is extremely tight right now.
    We certainly would support, and look towards Congress to 
working on the issue of improving labor supply. But ultimately, 
with the pandemic, yes, hopefully, as has been mentioned, we 
are coming out of that, returning to more normal conditions, 
would look forward to hopefully joining you next time in 
person, and would be able to provide additional responses in 
writing later.
    [The information referred to is located on p. 152.]
    Mr. Carbajal. Thank you, Dr. Johansson. I am out of time. I 
yield back.
    The Chairman. Thank you.
    The gentleman from South Dakota, Mr. Johnson, is recognized 
for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman. I want to dive a 
little deeper into the line of questioning that Mr. Bishop had. 
And I know, as we talk about ad hoc disaster relief, or maybe 
moving toward a more permanent program, we think about the 
interplay with crop insurance. That is obviously most clear. 
But I guess I want to start with Mr. Doyle. Some of the other 
witnesses didn't have strongly held opinions on Mr. Bishop's 
question, but I want to give you an opportunity, sir. As we 
think about disaster relief, are there Title I interactions 
that we should be thinking about vis-a-vis the next farm bill? 
Your thoughts?
    Mr. Doyle. So I think we need to see how it is designed. It 
would depend on how it is designed, and what its purpose is. 
We, as soybean farmers, rely heavily on crop insurance. Ninety 
percent of soybean producers partake in crop insurance, so that 
is the number one vital tool. As I mentioned earlier, ARC and 
PLC have been used very little over the last few years, but I 
think we are always open to some sort of protection beyond what 
is the norm, so we would be in support of a program. When 
disaster comes up, we appreciate the ability of this House 
Agriculture Committee, and our government, to come in, step in, 
and support us when needed, because many of those disasters are 
out of our control. We never plan for them, and they can 
devastate the family farm operation in one single crop year.
    Mr. Johnson. So, Mr. Doyle, does American Soybean have a 
policy on whether you prefer ad hoc disaster relief, or maybe a 
new permanent program? A new standing program, rather?
    Mr. Doyle. Not really. I mean, we go to the farm bill. That 
is our go-to. We would--as conditions or instances would come 
up, we would--yes, we would definitely seek support. But, as of 
right now, we are pretty happy with what the farm bill 
produces, other than the ask for change in reference price, as 
we requested. Things like that protect us enough, along with 
crop insurance.
    Mr. Johnson. Mr. Edgington, how about for corn? Do you all 
have a strongly held opinion on ad hoc versus standing disaster 
relief as we look toward the next farm bill? And are there 
interactions between Title I programs we should keep in mind if 
we were going to make any change to disaster relief?
    Mr. Edgington. So, the history has been that we have been 
more in the ad hoc camp, and--partially because there has 
been--and I have been farming for close to 40 years, and there 
were long stretches that we didn't much need disaster programs. 
And then Mother Nature runs a cycle, and it is like, well, we 
have to have something almost every year somewhere in the 
county. But, the ad hoc seems to kind of work for that. 
Obviously there are relationships between ARC, PLC, crop 
insurance, and WHIP, and then you can move over into some of 
the other programs.
    But we have a pretty solid safety net program for most 
commodities in the current farm bill, and Mother Nature is 
still our biggest wildcard, will probably always be our biggest 
wildcard. So, to write a program that is permanent, based on 
what Mother Nature is going to do is really a challenge when we 
don't know what she is going to do.
    Mr. Johnson. So for both Mr. Doyle, Mr. Edgington, we have 
talked reference price, reference price today, and I get it, 
clearly that is going to have to be a serious focus of the 
Committee's work here over the course of the next year or so. 
Are there other things with regard to ARC and PLC that we need 
to be mindful of as we roll into the farm bill?
    Mr. Doyle. I think, just to mention base acres, a lot of 
the young producers only have 10 or 20 percent of their farm 
base acres, so the opportunity for them is almost non-existent. 
So any----
    Mr. Johnson. And I am sorry, Mr. Doyle, I should have 
included base acres in a topic that we have pretty well----
    Mr. Doyle. Yes, sir.
    Mr. Johnson.--fleshed out, or are in the process of 
fleshing out. So, other than those two things, is there are a 
third--and maybe those--one and two are so big we don't need a 
third target, but I wanted to give you an opportunity.
    Mr. Edgington. Well, you might have the opportunity to deal 
with yields, and what things are based off of on that, because 
our yields, and I think everybody up here has mentioned it, we 
continue to improve with genetics, and opportunities that we 
get, and our costs go up because of that, and usually there is 
an association. And so, as we look at maybe increasing the base 
yield to go with the base acres that are there, or back and 
forth, it becomes an area that also maybe should be looked at.
    The Chairman. Thank you very much. The gentleman's time has 
expired. The gentlewoman from Minnesota, Ms. Craig, is 
recognized for 5 minutes.
    Ms. Craig. Thank you so much, Mr. Chairman and Ranking 
Member, for having this hearing, first and foremost, today on 
Title I programs. Corn and soybean farmers in Minnesota's 2nd 
Congressional District rely on these programs for stability, 
and I am really grateful to the witnesses today for sharing 
their input in how the tweaks made in the 2018 Farm Bill have 
played out. As the conversations for the next farm bill ramp 
up, I am curious to learn more about how Title I programs like 
ARC and PLC have worked for family farmers during the 
instability of the past few years. I recognize that some of 
that was covered by my colleague Dusty Johnson, but maybe we 
will go into just a little bit more here.
    With that in mind, I will turn to President Edgington for 
my first question. Mr. President, as you know, corn growers on 
family farms in Minnesota's 2nd District provide food for 
people across the country and the world. They also provide the 
key input for ethanol, which grows markets in Minnesota, and 
helps to de-carbonize our transportation sector. That is why I 
am pushing every opportunity to ensure that the year-round 
sales of E15, whether it is through my Year-Round Fuel Choice 
Act (H.R. 4410), or another legislative route. That is less of 
a farm bill conversation, of course, but I mention it here 
because biofuels are such a critical part of our collective 
effort to support renewable fuels.
    When it comes to the upcoming farm bill, I am hoping you 
can provide a little bit more perspective on any additional 
flexibilities that NCGA thinks might be impactful for family 
farmers moving forward. Are there any additional tweaks, like 
the ARC and PLC election flexibility change in the 2018 Farm 
Bill, that might make a difference?
    Mr. Edgington. Representative Craig, thank you for that, 
and thank you for your support of ethanol, and all the things 
that you have done for us on that. As I mentioned earlier, we 
conducted a study, it is over 900 people that responded, and we 
are working through that data. We will answer some of those 
questions that you have asked, and we will have more of that 
information this summer as we move forward, and how to maybe 
fine-tune, or how to adjust some of the current farm bill 
programs as they reflect on corn growers. I think we will have 
a really interesting discussion next week in New Orleans around 
some tweaks. We always do at our policy sessions. And then we 
meet again in July right here in Washington, D.C. So we will be 
bringing some of those things that you are asking for, but at 
this point, we are still working through the process.
    Ms. Craig. Well, thank you. We look forward to getting an 
update, and, obviously, are very interested in your 
suggestions. I want to turn to President Doyle next. President 
Doyle, thank you so much for your comments and focus on the 
role that the ARC and PLC reference price for soybeans is 
playing in decision-making for bean growers. The fact that the 
last time a PLC payment was triggered for soybeans was 2005 
indicates a lack of responsiveness in the program, especially 
when some soybean farmers experienced negative margins for 
their crops during the 2018 and 2019 trade wars. With that in 
mind, can you speak to what ASA thinks might make sense for a 
reasonable reference price?
    Mr. Doyle. It is, soybean prices are driven by supply and 
demand, and right now the prices are good, driven by demand. 
The safety net, PLC or ARC, it is a safety net. It is what we 
go to when times are bad, and I would have to say times are 
pretty decent right now, and good for soybeans. We have high 
demand. But to give you an exact reference price, I believe I 
am not qualified for that, but we will deep dive into that this 
year.
    As I mentioned earlier, Purdue set a break even price 
around $11. Somewhere near that may be where we need to be. We 
have sufficient data coming. We will continue to have talks 
with our state affiliates, and we need all of that data to come 
in, along with buyers, and see what long-term demand and supply 
will be, and hopefully we can shed some light on what would be 
a more fair and safe reference price for soybeans.
    Ms. Craig. Thank you so much, Mr. Doyle. Let me just ask 
real quick, any other farm bill updates you would like the 
Committee to consider?
    Mr. Doyle. I think for soybeans Minnesota's one of the 
strongest on crush. Any support of oil and Renewable Fuel 
Standard would be beneficial to our industry.
    Ms. Craig. Awesome. With that, Mr. Chairman, I yield back.
    The Chairman. Thank you. The gentlelady from Louisiana, Ms. 
Letlow, is now recognized for 5 minutes.
    Ms. Letlow. Thank you, Chairman Scott and Ranking Member 
Thompson, for holding this very important hearing to review the 
key commodity support programs authorized by the farm bill. And 
I just have to say, I love seeing so many women in agriculture 
witnesses. And, as many of you know, agriculture is the 
backbone of my district, and is one of the largest economic 
forces for the area. From rice, to cotton, to soybeans, to 
sugar, all of which are represented here today, my district has 
been blessed with the fertile soil to grow just about anything. 
In fact, according to the USDA Census of Agriculture, my 
district alone accounts for 49 percent of total agriculture 
sales in the state. It is the hardworking farmers, ranchers, 
and forestland owners throughout my district that I am proud to 
represent on this Committee, and drafting the next farm bill 
needs to remain at the forefront of our vital work, going 
forward.
    Ms. James, in your testimony you mentioned a study I 
requested of Texas A&M University's Agricultural and Food 
Policy Center to determine the economic impact of higher 
fertilizer prices on its representative farms. I am truly 
appreciative on AFPC's hard work to complete this analysis, but 
I am concerned by the findings which show steeply increasing 
input costs across the board for commodities, and particularly 
rice, farms experiencing the highest fertilizer cost increase 
per acre.
    Ms. James, could you please speak to how this tremendous 
increase in input costs are affecting you, and are you 
struggling to find certain inputs to be able to successfully 
plant a crop this year? And then, second, while we all 
understand that traditional farm bill programs discussed today 
aren't designed to react to these unprecedented input economic 
challenges, how could we look to the next farm bill to help 
alleviate these unpredictable production challenges in the 
future?
    Ms. James. Well, thank you, and thank you for your 
question. Of course, the study that you referenced, actually, 
the average per acre increase in the rice industry was $174.20, 
and I will stress that that is the average, so there are many 
producers who are going to experience a much higher cost per 
acre this season. This equals over $500 million increase in the 
rice industry would be spent to produce this crop, so, yes, we 
are struggling. We are trying to make planting decisions.
    On my particular farm, I will be planting less rice acres 
this year than we normally do. We have gone through our 
budgets, and have made adjustments in line items that we can. 
We are trying to choose less expensive rice varieties that will 
still yield as well. We are modifying our pre-plant fertilizer 
applications, and just trying to make good decisions so that we 
can still grow rice and support our industry. We are concerned 
about the inputs. One input in particular is the nitrogen. 
Nitrogen fertilizer timing for rice is extremely important for 
the yield benefits, and so we are concerned that we may not 
have that availability at the proper time for the plant to do 
its best job.
    Looking forward to the next farm bill, as I have mentioned, 
the crop insurance products that we have in rice are not as 
effective for us. We are able to grow rice in a controlled 
environment, and, therefore, most years have a good yield. 
Therefore, something in the revenue department is always 
important for us to be sure and protect our revenue. As we 
referenced earlier in the Committee, the PLC for rice is 
extremely important, and the fact that the market is just above 
that is very disappointing right now.
    Ms. Letlow. Well, thank you so much for your testimony and 
this insight. Mr. Chairman, I yield back.
    The Chairman. All right. Thank you very much. Members, 
before we move to our next questioner, I have just a brief 
announcement. One of our witnesses, Ms. Ulibarri, has a family 
emergency, and has to leave. Any questions for her can be asked 
for the record to receive a response in writing. Thank you for 
that. And now the gentlewoman from Iowa, Mrs. Axne, is 
recognized for 5 minutes.
    Mrs. Axne. Thank you, Chairman Scott, and thank you to our 
witnesses for being here today. I appreciate your testimony, 
and look forward to continuing to work with you all as we 
review the 2018 Farm Bill, and look ahead to 2023, something I 
have been very much looking forward to in my role. I especially 
want to welcome Mr. Edgington. Chris, it is always good to have 
an Iowan testifying on this Committee, so welcome, and thank 
you for the hard work that you do for our community, and Iowa, 
and on behalf of Iowa farmers. I am very appreciative.
    As you know, last year prices and production were strong in 
Iowa, and they look positive for the future, but farmers have 
experienced significant volatility and uncertainty over the 
last few years due to the demand destruction caused by the 
trade war, and, of course, by the pandemic. So farmers were 
able to survive those challenges due to strong farm safety 
provided through crop insurance, Title I programs, and recent 
ad hoc programs, so it is imperative that we look at all these, 
and support these farm safety net programs, and improve them 
where necessary, so I have a couple questions along this line.
    Mr. Edgington, as you noted in your testimony, farmers now 
have the opportunity to decide between ARC and PLC each year, 
rather than making a multi-year decision. Do you believe that 
that change to annually, as opposed to multi-year, has helped 
benefit our farmers?
    Mr. Edgington. I do think that is a good choice, because of 
the volatility, and I am a case in point. I have actually 
played in all of them. I have done ARC-County, ARC-Individual, 
and PLC, and there are definitely people that have gone back--
from PLC back to ARC-County this year. And part of the reason 
we were doing some of the back and forth was dependent upon 
what you wanted to do with crop insurance, if you wanted to 
look at the supplemental programs of ECO or SCO, which there 
was about 10 million acres in last year's crop that people 
signed up for. So I do believe in that flexibility.
    Mrs. Axne. Okay. Well, thank you for that. And next 
question along these lines is what do you and other producers 
consider when deciding between ARC and PLC, and do you believe 
that there is enough information out there, and easily 
available, for you to make a good decision, an informed one? I 
am trying to get at--it sounds like you have taken different 
opportunities, dependent on what your needs are. How easy is it 
for our other farmers to get this information so that they can 
do the same?
    Mr. Edgington. Well, there is probably always room for 
improvement on ease of availability, but it is a challenge. The 
programs are big, and familiarity helps, and that is why, 
actually, I really hope that we continue with that in the next 
farm bill, because people are finally getting comfortable about 
exactly what these programs are, and how they work for them 
individually. There are online tools that help. The university 
extension officers were very useful when these programs were 
originally rolled out. They, along with the FSA offices, worked 
together, especially in Iowa, I assume the other states were 
similar, as people tried to work through those programs. But 
there are big decisions, and the challenge oftentimes is you 
are forecasting the future, when you do those, and so you take 
your best experienced decision, and move forward with that.
    Mrs. Axne. Okay. So is there anything that you think we 
should be looking at adding? Any push marketing out to farmers? 
Anything that we can be in front of them with this on a regular 
basis? You mentioned that the ISU extension was really helpful 
at the beginning of the program. Is there anything that you 
think we should be doing ongoing to make sure farmers are 
aware?
    Mr. Edgington. One of the things, I think it was mentioned 
earlier, is maybe a reminder. Farmers are busy. They are doing 
their day jobs. And, yes, signing up for government programs is 
part of our day job, but it is something that slides through 
the cracks quite often. I have seen that happen in our 
operation, where you have to make a decision, and it is like, 
wait a minute, it is already that time? How did we get here? 
And, you really haven't had time to think about it.
    So maybe we need to go back--and it doesn't--I wouldn't say 
it is an every year thing, but maybe it is an every other year, 
during the winter have a discussion about the programs on a 
more open forum, coming from either extension or FSA, to say, 
``Hey, guys, let us sit down and go through these again, run 
the formulas, because everybody has talked about these are 
pretty complex, and farming is not getting smaller.''
    Mrs. Axne. Well, thank you for that. I very much appreciate 
that, and hopefully we will reach out to you and maybe get some 
thoughts on that from my team so we can put that into place. I 
couldn't agree with you more. I really appreciate your time 
today. I have other questions, but my time is coming near to an 
end here, so I will thank you so much, and I yield back.
    The Chairman. Thank you. The gentlelady from Florida, Mrs. 
Cammack, is now recognized for 5 minutes.
    Mrs. Cammack. Well, thank you, Mr. Chairman, and thank you 
to all of our witnesses for appearing before the Committee 
today. Going into farm bill season, this is extraordinarily 
exciting, even though I know it doesn't seem like that after 3 
hours, but very important nonetheless, so I will jump right in. 
Dr. Johansson, I know that Florida farmers, including our 
sugarcane farmers, are assessing the damage from the January 
freeze, and they will share details of the damage as the 
harvest continues for the next few months. Please let us know, 
when possible, what disaster aid language might be necessary 
for Florida farmers to recover from the unexpected losses.
    Now, today I want to focus on a bill that I sponsored that 
pledges to end our sugar policy only when other countries end 
their sugar policies. You all may know it as Zero For Zero (H. 
Con. Res. 43). The sugar industry supports this Zero For Zero 
legislation, and I would like you to briefly explain to my 
colleagues why, as an industry expert.
    Dr. Johansson. Well, thank you for that question, 
Congresswoman Cammack. As you point out, over 100 countries 
produce sugar, and their governments are deeply involved in 
these industries, providing either high subsidies, tariffs, or 
non-tariff trade barriers to protect them. Billions of dollars 
go into their industries each year, which allows them to dump 
their surpluses below their own cost of production on the world 
market, which directly threatens U.S. farm families.
    There is nothing fair about global sugar markets. I will 
just point out, as an example, the WTO recently found India 
guilty for subsidizing sugar production by more than $14 
billion a year, paying export subsidies to dump their surpluses 
on the world market. The U.S. sugar policy is a response to 
that high and rising foreign subsidies, which are a core cause 
of predatory trade practices in the global market. The vast 
majority of these producers are higher cost and less 
sustainable than U.S. producers. Our sugar policy is a 
comprehensive response to these unfair trade practices, and if 
they stop these practices, as you point out, and let our 
farmers compete in a fair, competitive marketplace, we would 
not need a program.
    We applaud you, Congresswoman, for leading the charge 
through your Zero For Zero legislation to expose those 
subsidies and trade practices that threaten our sugar industry, 
and actually press to have those problems addressed on a multi-
lateral basis in the appropriate venue. Thank you for the 
questions.
    Mrs. Cammack. Thank you. And when you put it like that, I 
just don't know how any of my colleagues would argue against 
the Zero For Zero legislation, so thank you for that. And, just 
so we are very clear, have you seen any evidence of foreign 
nations cutting back on their sugar subsidy programs, yes or 
no?
    Dr. Johansson. That would be no, and, in fact, the other 
direction.
    Mrs. Cammack. Perfect. Thank you. I am going to now move to 
another issue that is near and dear to some of my producers' 
hearts, and that is the issue of peanuts and base acreage. So, 
Ms. Rogers, I appreciate your testimony, particularly your 
highlighting of the fact that not all producers of peanuts have 
access to the PLC Program due to lack of base acres. My 
district, my state, has a particularly unique situation in this 
regard.
    As you know, many peanut producers in Florida have faced 
challenges with the current base acreage arrangements. Given 
the changing economics growers are experiencing, particularly 
the rising costs of inputs, do you think that taking a look at 
a potential voluntary update to base acres across commodities 
could have a positive impact on the bottom line for producers, 
including those peanut producers currently without access to 
the PLC?
    Ms. Rogers. Thank you, Congresswoman. We are definitely 
looking at that. Our peanut leaders, they have been meeting 
with many growers in Florida to talk with them about the 
issues, and how it could be addressed, and definitely updating 
base is an option. We are looking at that, plus many other 
options as well. We have our economists looking at it, and 
coming up with a cost that would be to update the base, and the 
cost of other options as well. And we sure hope that we can 
work with your team, and this Committee, to come up with an 
option that would work for those growers, as well as the rest 
of the growers.
    Mrs. Cammack. Thank you. And do you believe that, if we 
were to move forward with a base update, that would incentivize 
and encourage young farmers to enter the industry?
    Ms. Rogers. I think that is possible. We definitely need to 
do what we can to help farmers, and whatever we come up with, 
whatever option we come up with, to be able to help the ones 
without base, will definitely help the young farmers.
    Mrs. Cammack. Excellent. Well, I appreciate your 
commentary, and thank you again to all our witnesses before the 
Committee today. With that, Mr. Chairman, I yield back the 
remainder of my time.
    The Chairman. Thank you. The gentlewoman from Connecticut, 
Mrs. Hayes, who is also the Chairwoman of the Subcommittee on 
Nutrition, Oversight, and Department Operations, is now 
recognized for 5 minutes.
    Mrs. Hayes. Thank you, Mr. Chairman, and thank you for 
having this very important hearing. Title I subsidies, along 
with non-farm bill assistance programs, are a critical economic 
safety net for the farmers in my district that can access them. 
Between 1995 and 2020, three farms in my district received 
commodity payments totaling $4.1 million. Compared with some of 
the other regions represented on this Committee, that is 
pennies. And while these programs are based on acreage, it is 
still concerning to me that our smallest farms, those that have 
the tightest profit margins and least assets to fall back on, 
may be benefitting less than large corporate farms, and the 
largest family farms. That disparity is even more concerning 
when you consider the increased input process we have seen over 
the past year. Many of your testimonies mentioned these 
concerns, and the negative impact they are having across the 
agricultural sector. That strain is multiplied tenfold for a 
small family farm.
    The largest Title I payments to farms in my district were 
Agricultural Risk Coverage payments for corn. So, Mr. 
Edgington, as President of the National Corn Growers' 
Association, can you provide some insight on how those payments 
function for the smallest farmers?
    Mr. Edgington. So, it is a function of the process, and 
acres, and yield, so you have a formula that is designed, and 
it is based off of acres and yield. And, yes, there are 
fluctuations, there is no question, from large farms to small 
farms. And, unfortunately, I don't know a real good way around 
that. If you speak with Secretary Vilsack, he will talk about 
what percentage of us farmers actually get a living based off 
of only crop production, and it is not very many.
    And while people say that large family farms are a 
challenge, I live in part of a large family farm, and when you 
break it out on an individual basis, we are not that many acres 
per producer inside of our operation. And so it is always 
something to be looked at, but it is--currently it is a 
function of base--of acres and yield.
    Mrs. Hayes. Do you think that it is equitable between small 
family farmers, like those in my district, and some of the 
larger corn producers?
    Mr. Edgington. So, in your question about equitable, are 
you saying on a per acre basis, or in the total dollars going 
to the operation? Because, if you take two operations, and one 
has 150 acres of corn, and one has 1,000 acres of corn, but 
their base acres and their yield are the same, on a per acre 
basis, they will be very equivalent. On an overall operation, 
there will be a difference. So it is a challenge as to how you 
look at it, and what area you are after.
    Mrs. Hayes. Got it. Thank you. In your testimony you talked 
about how the USDA should continue to find more ways to reduce 
the reporting burden on producers. Can you elaborate on the 
burden felt by producers being required to visit the FSA 
office, and how might that burden be decreased?
    Mr. Edgington. Well, one of the ways we talked about was 
how you handle crop insurance, and reporting to the RMA, as 
well as reporting to the FSA. In a lot of cases it is a dual 
process, and there should be a way to streamline that. Now, 
personally, I am fully in favor of using the USDA acres, 
because they are the most accurate out there. If you use farmer 
technology numbers, there is some variance. RMA, in my area, at 
least, uses FSA numbers, because they know that is the most 
accurate. But there should be a way that it could be a one 
stop--either I am going to go visit the FSA office, and RMA 
gets those numbers, or I am going to go visit my RMA agent, if 
he is closer, and FSA gets those numbers. I think there is an 
area we could get some efficiency improvements.
    Mrs. Hayes. Thank you. I think we have heard the same thing 
across multiple programs. And last, for whomever on the panel 
would like to weigh in, I have heard a lot from people in my 
district regarding input prices and the increased cost of 
fertilizer. While this is very concerning in the immediate 
term, there may be other conservation practices that could 
mitigate the need for fertilizer long-term. Specifically, 
planting cover crops may also improve the nutrients in soils 
that are available for crop production, potentially reducing 
farmers' dependence on chemical fertilizers. From your 
perspective, did higher fertilizer prices lead farmers to plant 
more acres with cover crops over this last winter?
    Mr. Doyle. Absolutely, I believe so. It was a driving 
force, especially for soybean farmers. Very beneficial to plant 
cover crops, and we certainly encourage that.
    Mrs. Hayes. Thank you. Thank you for your time, and your 
thoughtful answers. Mr. Chairman, that is all I have. I yield 
back.
    The Chairman. Thank you. And now the gentlewoman from North 
Carolina, Ms. Adams, who is also the Vice Chair of the 
Committee on Agriculture, is recognized for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman. Thank you to the 
Ranking Member as well for hosting the hearing today, and to 
all the witnesses, thank you for being here. The commodity 
support programs discussed today primarily assist basic 
commodities, such as corn, rice, and cotton. However, socially 
disadvantaged and minority farmers tend to produce fruits, 
vegetables, and raise livestock. Therefore, socially 
disadvantaged and minority farmers are not able to take 
advantage of the bulk of funding and support programs. 
Improving access for all agriculture stakeholders to the 
assistance programs that fall under commodity support programs 
is a priority for me, and I look forward to working with my 
colleagues on this issue as we move forward on the farm bill.
    So, Ms. Ford, in your testimony you mentioned the need for 
market loan programs to be automated. So have any of your 
members, especially socially disadvantaged farmers and ranchers 
expressed challenges in accessing the technology, or navigating 
the application process, for commodity support programs?
    Ms. Ford. We are advocating that everybody use more 
technology, and right now we are working with the National 
Black Growers' Council currently on just more involvement, and 
more minority--and involvement overall.
    Ms. Adams. So have you had any one of those express the 
concerns that I have just mentioned? Ms. Ford?
    Ms. Ford. Yes, ma'am. The program automation has been a 
problem because of government shutdowns due to COVID.
    Ms. Adams. Okay. So what have you asked USDA to do to 
better support the socially disadvantaged and minority growers? 
Have you had a conversation with them about it?
    Ms. Ford. I have not personally, but that is something that 
the National Cotton Council is working on, is more outreach and 
more communication.
    Ms. Adams. Okay. All right. Mr. Edgington, a condition for 
eligibility for Marketing Assistance Loans rests on the ability 
to store commodities, a current problem due to supply chain 
issues caused by the COVID-19 pandemic. So have your members 
expressed any concerns regarding the eligibility or capacity to 
store their product?
    Mr. Edgington. Storing corn is maybe a little different 
than others because we work in such a large volume, and our 
infrastructure for corn has been pretty solid. You have a local 
co-op network system, you have a regional delivery system, or 
you have on-farm storage. There always can be challenges, and, 
obviously, the supply challenge that I hear about is maybe not 
from the loan side, and the USDA, but from the supply side, is 
can I get the materials to build a new storage bin to hold the 
crop?
    And so we definitely have supply chain challenges inside 
the corn industry, as I think everybody at the table would say, 
and so we are hoping that we can get back to a new normal on 
supply chain, but nobody knows what that is.
    Ms. Adams. Okay. Mr. Johansson--I mean Dr. Johansson, 
according to a review of USDA data, the top ten percent of farm 
subsidy recipients receive almost 80 percent of all farm 
subsidies. While the largest ten percent have received, on 
average, more than $560,000, the bottom 80 percent received an 
average of about $8,000. So, considering these economic 
disparities, do you support reasonable payment limits and means 
testing for farm subsidies?
    Dr. Johansson. Congresswoman, that is a great question. I 
think I had pointed out here earlier, between 10 to 15 percent 
of farms produce about 90 percent of the food marketed here in 
the U.S. That means there are a lot of other operations out 
there that are also engaging in crop production and livestock 
production. They are just at a smaller scale. So that explains 
one component of that distribution of payments that you just 
mentioned.
    Obviously, means testing and payment limits are firmly in 
control of the Committee you are on there. I know that Congress 
has looked at this issue many times over the past, and has 
convened various committees, some of which include, for 
example, the office I used to work in. At the Office of the 
Chief Economist, I think we have seen some reports coming out 
from those efforts. I would imagine that this would be 
something that you all look at with the new farm bill upcoming.
    Ms. Adams. Thank you, sir. Mr. Chairman, I am out of time. 
I yield back.
    The Chairman. Thank you. Thank you very much. And now the 
gentleman from Florida, Mr. Lawson, you are recognized for 5 
minutes.
    Mr. Lawson. Thank you, Chairman Scott and Ranking Member 
Thompson, for holding this hearing. It is a very important 
hearing, as we deal with a new farm bill. And I want to 
welcome, as most of them have welcomed, all the participants 
that we have in the hearing today. My statement, which I want 
some clarity on, is the 2018 Farm Bill, included increased loan 
rates for most covered commodities, including sugar loan rates 
at around one percent a pound. Dr. Johansson, you mentioned in 
your testimony that the increase did not keep up with inflation 
or the rising cost of production of sugar. What should be done 
to the sugar loan rate to make them more effective to sugar 
producers, and why should this be a priority?
    Dr. Johansson. Congressman, that is a great question. I 
think, as everybody on this panel has talked about, cost of 
production, input costs are rising quite a bit, certainly since 
this--I guess since last April, since last May, when we saw 
inflation really taking off, and that is been affecting all 
commodity production. Sugarcane and sugarbeet certainly have 
been feeling that as well, and, of course, in the 2 months we 
have seen this conflict in Ukraine also pushing up prices for a 
lot of our inputs. Same time, I just want to point out that we 
have lost a lot of crop protection tools and inputs as well for 
managing pests on our operations.
    So I guess I would say that, yes, we did see in the last 
farm bill some fairly modest changes to the raw cane loan rate, 
as well as the refined beet rate. Certainly, I know our 
producers and our members are looking at providing 
recommendations to the Committee as we go forward, and we are 
still in the process of pulling those lists together, and 
certainly we will be providing that as we get closer into this 
year. As you have continued discussions, we would be happy to 
follow up with those.
    But I think what I had mentioned in my testimony was that 
it is clear that the loan rate is not matching current cost 
production. Current input costs have been going up. I think 
that would be something that folks would echo here. Of course, 
sugar doesn't participate in ARC/PLC, so we have had a lot of 
discussion about that as well, talking about reference prices. 
It is much the same with respect to reference prices in current 
costs in the operation. So, again, thanks for the question, and 
certainly we will be looking forward to putting forward our 
recommendations a little bit further into the summer here as we 
continue to meet and develop what those might be.
    Mr. Lawson. Thank you very much, Dr. Johansson. As a 
Congressional Member of Florida, I know how important it is for 
disaster assistance to quickly and effectively be distributed 
to farmers and producers. The question here for all witnesses, 
for your commodities, what would a permanent disaster 
assistance program look like, and how should it work in 
conjunction with the current authorized Title I program?
    Dr. Johansson. Well, let me just say real fast, and I will 
let my other panelists from other commodities chime in, this is 
a question that we have talked a little bit about today, and 
certainly one thing that everybody is interested in seeing is 
if there are additional standing disaster program developments 
in the next farm bill, that they be ones that are consistent 
with crop insurance that maybe also encourage additional 
coverage potentially, as well as looking at some commodities 
that may not be as well served by the current crop insurance 
products. Some commodities, maybe specialty crops, certainly 
sugarcane and sugarbeet, would like to see some additional 
improvements in some of those products available to us at a 
more reasonable price. But I will see if other panelists want 
to add to that.
    The Chairman. Anyone?
    Mr. Lawson. Mr. Chairman, I guess no one else wants to 
respond, and with that, my time is running out. I yield back.
    The Chairman. Thank you, Mr. Lawson. And, ladies and 
gentlemen, this brings our hearing to a close, and I can't 
thank you enough, our Committee can't thank you enough. Your 
wisdom, your guidance, your testimonies, have been just 
extraordinary, and very helpful to us. The input you have 
shared with us today is so critical to our Committee's effort 
to oversee this farm bill. We are in the 2018, and as we 
prepare for the next farm bill, 2023, and we want to thank you 
for that.
    Farmers across our nation now are experiencing--they have 
experienced so much, and we must respond, and make sure that 
our farmers, our producers, have all of the means necessary to 
do the critical job that we are calling upon them to do. Our 
food supply is critical not only to us, but the entire world. 
And as we look at, and as we examine the impact that this 
Russian evil business is doing in Ukraine, it impacts us 
drastically, and we have to resolve our nation, our leadership, 
the leadership of the European Union, and all over this world 
we have to raise a loud voice and stop Russia from doing, and 
continuing, this evil work, killing women and children 
indiscriminately. It is enough to break our hearts. But we have 
to understand the role that we have in providing the food 
supply most critical. There is no nation on Earth that has this 
weight on the shoulders of their farmers as we do, because we 
have the world's greatest and most impactful agriculture 
system.
    And so we want to thank you so very much again, and over 
the coming weeks and months I look forward to continuing to 
engage with you, and all of our stakeholders, on the options we 
should look at for our next farm bill. But you have shared with 
us what works and what does not work. We are on a journey here, 
and it is an exciting one, but it is also one where the world 
is indeed depending upon our agriculture system to be strong. 
And we are committed to doing that, and you all have helped us 
greatly today. And from the bottom of my heart, and the hearts 
of those of us on this Committee, we thank you for taking time 
out of your busy schedules to share with us your valuable 
testimony.
    And now, under the Rules of the Committee, the record of 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from the witnesses to any questions posed by a Member. And now 
this hearing of the Committee on Agriculture is adjourned.
    [Whereupon, at 1:30 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Submitted Letter by Hon. Austin Scott, a Representative in Congress 
                              from Georgia
December 16, 2021

    Dear Mosaic Company,

    We write to express our concern with your company's trade 
practices. As the second-largest phosphate fertilizer producer in the 
world, Mosaic has almost single-handedly erected an insurmountable 
tariff barrier to keep its top competitors in Morocco and Russia out of 
the U.S. phosphate market.
    Mosaic's corporate affairs spokesperson recently told Brownfield Ag 
News that the company is trying to keep prices rational. Saying, 
``Prices are set essentially by the global supply and demand picture . 
. . we don't dictate prices.''
    Yet, thanks to Mosaic's petition, only 15% of phosphorous imports 
now come into the U.S. without tariffs. And experts say that using 
Commerce and ITC to manipulate the supply curve does indeed dictate 
price to farmers.
    According to farm economist Bob Young's estimate, ``the economic 
impact of applying countervailing duties of between 30% and 70% on 
phosphate imports would equate to roughly $480 to $640 million in added 
fertilizer bills on U.S. farmers.''
    You'll agree that Mosaic now has a much healthier balance sheet 
than it did in 2017-18, when you and J.R. Simplot began pursuing the 
CVD case. You'll also concede that you did not anticipate China's 
phosphate export ban, the COVID-19 black swan event, rising natural gas 
prices, a historic supply chain disaster and Hurricane Ida.
    Mosaic's posture to date has been a masterpiece of irresponsible 
corporate social responsibility. But it now has an elegant way to 
reverse course given these exceptional circumstances.
    We ask that you voluntarily withdraw your countervailing duties and 
allow critical supply back into the U.S. at a time of inadequate 
supplies and soaring phosphate prices.
    Precedent exists for reaching a voluntary settlement. For instance, 
in August 2019 the U.S. tomato industry resolved its anti-dumping 
dispute with Mexico voluntarily rather than escalate tensions and 
further disadvantage producers on both sides of the border.
    We look forward to your swift action to withdraw the CVDs. In the 
meantime, please be advised that we will relentlessly pursue a 
resolution on this issue.
            Sincerely,
            
            

 
 
 
Charles Ring, President,             Jay Schutte, Board President,
Texas Corn Producers Association     Missouri Corn Growers Association
 

                                     
                                     

 
 
 
Robert Gordon, Chairman,             Wayne Kirby, President,
Texas Corn Producers Board           Virginia Grain Producers
                                      Association
 

                                      
                                      

 
 
 
Rob Hanson, President,               Andy Jobman, President,
North Dakota Corn Growers            Nebraska Corn Growers Association
 Association
 

                                     
                                     

 
 
 
Mark Hoffman,                        Randy Poll, President,
Wisconsin Corn Growers Association   Michigan Corn Growers Association
 

                                     
                                     

 
 
 
Bryan Biegler, President,            Rodney Harrell, President,
Minnesota Corn Growers Association   Georgia Corn Growers Association
 

                                     
                                     

 
 
 
Brent Rogers, President,             Seth Pritchard, President,
Kansas Corn Growers Association      New York Corn and Soybean
                                      Association
 

                                      
                                      

 
 
 
Lance Lillibridge, President,
Iowa Corn Growers Association
 




 
 
 
Rodney Hahn, Vice President,         Melvin Baile, President,
Colorado Corn Administrative         Maryland Grain Producers
 Committee
 

                                     
                                     

 
 
 
Martin Marr, President,              Jeremy Wilson, President,
Illinois Corn Growers Association    Alabama Soybean and Corn
                                      Association
 

                                      
                                      

 
 
 
Justin Rivers, President,            Heath Herring, President,
South Carolina Corn Growers          Louisiana Corn Growers Association
 Association
 

                                     
                                     

 
 
 
Ben Klick,                           Mike Beard, President,
Ohio Corn and Wheat Growers          Indiana Corn Growers Association
 

                                     
                                     

 
 
 
Scott Stahl, President,              Richard Preston, President,
South Dakota Corn Growers            Kentucky Corn Growers Association
 Association
 

                                 ______
                                 
 Supplementary Material Submitted by Robert Johansson, Ph.D., Director 
       of Economics and Policy Analysis, American Sugar Alliance
Insert
          Mr. Carbajal. Thank you, Dr. Johnson--Johansson. Sorry for 
        screwing up your name there, I apologize. With the COVID-19 
        pandemic impacting our supply chain, and disrupting so many 
        sectors of our economy and agriculture industry, can you share 
        with me how these challenges have impacted the domestic sugar 
        industry?
          Dr. Johansson. That is another great question, thanks for 
        asking. Of course, COVID-19 has--the pandemic has affected all 
        producers in all their markets, both here in the United States, 
        and certainly we have seen abroad, and, of course, the conflict 
        that we are seeing between Russia and Ukraine is obviously 
        going to be putting a lot of energy markets, fertilizer 
        markets, and commodity markets in turmoil. Over the past couple 
        years, certainly, our sugarcane and sugarbeet producers have 
        been cognizant of this issue, and have put in place safety 
        measures at all of our mills, refineries, processing 
        facilities, to safeguard all of our employees, and we have done 
        a very good job of that.
          Certainly we have been concerned with labor in general. It is 
        a big issue for us, as it is for a lot of other commodities 
        that are represented here, and we are continually trying to 
        both provide safe working conditions for all of our employees, 
        but also secure labor, whether that is through the guestworker 
        programs, or other labor sources here in the United States. Of 
        course, the labor market is extremely tight right now.
          We certainly would support, and look towards Congress to 
        working on the issue of improving labor supply. But ultimately, 
        with the pandemic, yes, hopefully, as has been mentioned, we 
        are coming out of that, returning to more normal conditions, 
        would look forward to hopefully joining you next time in 
        person, and would be able to provide additional responses in 
        writing later.

    Thank you for your excellent question, Congressman Carbajal. I will 
add to my response from the hearing.
    As we noted in our June 2021 response to USDA's request for 
information (https://www.regulations.gov/comment/AMS-TM-21-0034-0437): 
* ``. . . The structure of the domestic sugar industry in the United 
States was resilient in meeting the joint challenges of adverse weather 
in 2019, which lowered domestic sugar stocks, and the COVID-19 pandemic 
in 2020, which shocked consumer demands in multiple ways. The U.S. 
sugar supply chain is deliberately configured to withstand such shocks, 
which are all too common for agricultural commodities . . .'' In that 
request, Secretary Vilsack highlighted that food and agricultural 
commodities, such as sugar, are `critical and essential goods for 
national and economic security.' Sugar is an essential ingredient in 
food manufacturing.\1\ Without reliable supplies of sugar, it is likely 
that several food manufacturers would have had to idle operations in 
2020, resulting in lost jobs and shortages of staple goods at grocery 
stores at a time when consumers needed those more than ever, due to the 
closure of most food service establishments. In short, U.S. sugar 
policy helped ensure a resilient U.S. food supply chain during the 
pandemic.
---------------------------------------------------------------------------
    * Editor's note: the referenced comment letter is retained in 
Committee file.
    \1\ A reported 74 percent of consumer-packaged foods contain 
caloric sweeteners (Ng, S.W., M.M. Sliming, and B.M. Popkin. 2013. 
``Use of Caloric and non-caloric sweeteners in U.S. consumer packaged 
foods,'' Journal of the Academy of Nutrition and Dietetics, Vol. 
112(11): 1828-1834.
    Editor's note: the referenced article is retained in Committee 
file.
---------------------------------------------------------------------------
    By way of background, beet sugar is produced in 11 states, 
primarily in the north, because cold winter temperatures permit beets 
to be stored outside with minimal loss of their sucrose content. Beet 
sugar primarily serves the interior of the country. This source of 
sugar is located near major food manufacturers, who have facilities 
close to other agriculture raw materials. Sugarbeet production in 
California is in the Imperial Valley and they harvest just enough each 
day in the spring and summer to feed the factory. That factory is 
incredibly important to California because it is a reliable local 
supplier to meet the needs of millions of people throughout California 
as well as the Southwestern U.S. Sugarcane is grown in three states, 
processed into raw sugar, and then refined at eight coastal refineries 
like C&H in Crockett in the Bay Area. Cane sugar primarily serves the 
heavily populated coastal regions of the country.
    We also experienced disruptions in demand during the COVID-19 
pandemic that are now beginning to return to pre-pandemic consumption 
patterns. During the 2020 pandemic, consumer hoarding behavior was 
observed at the retail grocery stores and supermarkets as essential 
food and consumer goods supplies were overwhelmed by spiking demands. 
Ingredients for baking and cooking (sugar, flour, oils, etc.) were top 
food items in demand as retail food service shuttered overnight. To 
meet those challenges and to provide sufficient supplies to food 
manufacturers, during March-May 2020 the domestic sugar industry put an 
equivalent of an additional 50 million 4 lb bags on grocery shelves in 
record time to meet consumer needs and provide a calming effect of a 
resilient supply chain.
    As the economic disruption from the pandemic begins to dissipate, 
there remain significant bottlenecks in the supply chain for inputs as 
well as for deliveries. Those bottlenecks are raising prices not just 
for sugar imports, but also for inputs needed to grow our crops, and 
are adding to the costs of our just-in-time delivery system for 
providing adequate supplies of sugar to our customers throughout the 
marketing year.
                                 ______
                                 
   Supplementary Material Submitted by Nicole Berg, Vice President, 
                 National Association of Wheat Growers
Insert
          Ms. Schrier. Thank you, and thank you for those comments. We 
        agree. As we look ahead to the farm bill, are there some ways 
        specifically that we can sustain some necessary changes for 
        you? In addition to that gap, you talked about a year and a 
        half to 2 years of getting funding reimbursed. Are there other 
        ways that we can help?
          Ms. Berg. I think streamlining. I know that it was discussed 
        earlier today. Streamlining the process would help farmers. 
        Also in education and outreach to farmers of when is the 
        signup. I think we could do better in promoting and working 
        with--maybe it is the wheat growers--helping promote the 
        message of get in and sign up. I think that that would be an 
        important----
          The Chairman. The witness could continue with a written 
        response to her. . . .

    Thank you for allowing me the opportunity to further discuss this 
topic. Streamlining the process would definitely help farmers. Staffing 
levels in USDA offices throughout the country have been understaffed 
dating back to pre-pandemic times. We applaud the USDA for working 
diligently to fill these positions and understand they are working as 
hard as possible under hiring authority to fill them. However, we 
believe that Congress should take a serious look at the incentives that 
USDA can provide and the process through which potential employees must 
go through to fill the positions. Further, promotion and messaging on 
sign-up dates and deadlines is extremely important. Farmers have some 
of the busiest schedules and many deadlines unfortunately come and go 
with some farmers not remembering or being unable to take the time to 
make the trip to the USDA office to complete paperwork. The Committee 
and USDA should seriously consider how to be more innovative in their 
messaging and customer service in delivery and sign-up of programs. 
Last, these programs can sometimes be confusing and time-consuming to 
figure out what decisions and programs are the best for their 
operations. We encourage the investment into models and technical 
assistance to help farmers make the best decisions. Land Grant 
institutions and their extension services are extremely important in 
this aspect. We encourage greater collaboration between Federal 
agencies and these extension services to provide as much support and 
technical services as possible to help farmers utilize the valuable 
safety net tools that this Committee has already provided.
                                 ______
                                 
Supplementary Material Submitted by Jaclyn D. Ford, Delegate, National 
                             Cotton Council
Insert
          Mr. Bishop. . . .
          You talked about the need for either a permanent disaster 
        program, or other policy options to address disaster 
        conditions, Ms. Ford. Can you talk about what disaster aid 
        could look like, and how Congress could be helpful in 
        expediting, in the processing of that relief? And, Mr. Coleman, 
        could you weigh in also on what permanent disaster relief would 
        look like for specialty crop producers? Ms. Ford?
          Ms. Ford. Yes. I am not really prepared to answer that 
        specifically but I will get with the Council and get you an 
        answer to that.

    The need for ad hoc disaster assistance for crop and livestock 
producers has become apparent in recent years due to significant 
natural disasters and major weather events ranging from hurricanes to 
massive, long-term drought. These events create crop losses on a scale 
and magnitude that crop insurance in its current form is not solely 
equipped to manage. Therefore, we believe there is a need for the 
Committee, in the upcoming farm bill development, to evaluate either 
including a permanent or standing assistance program and/or fund that 
would allow USDA to quickly and efficiently respond when major natural 
disasters cause crop and livestock losses in the future. One of the 
major drawbacks with the recent ad hoc assistance is the significant 
delay from the time loss to the time of producers receiving assistance. 
In some cases, this timeframe has approached 2 years, which is 
extremely difficult for a producer and their lender to withstand 
financially. We recognize there are a lot of unanswered questions about 
how to structure and fund such a program for USDA to utilize and there 
is the issue of finding necessary budget resources for this purpose. 
Related to this topic of disaster assistance, we also believe the 
Committee should evaluate existing crop insurance policies and options 
and consider if additional resources could be invested in existing or 
new policies and/or endorsements that would allow producers to 
affordably protect a greater share of their risk with insurance, 
thereby minimizing their exposure to loss in times of a major natural 
disaster.
                                 ______
                                 
 Submitted Statement by Marcela Garcia, President and Chief Executive 
                Officer, U.S. Rice Producers Association
    The U.S. Rice Producers Association represents rice producers in 
Arkansas, California, Louisiana, Mississippi, Missouri, and Texas. It 
is the only national rice producers' organization comprised by 
producers, elected by producers, and representing producers in all six 
rice-producing states.
    Title I has been essential for our rice producers. Eighty-five 
percent of rice consumed in the United States is grown in our six 
member states. Recent market conditions have not favored our farmers 
and the Title I programs, particularly the Price Loss Coverage (PLC) 
program, provide security to our producers to ensure they can continue 
to operate. Around 99% of short and long grain rice and close to \3/4\ 
of Temperate Japonica are enrolled in the PLC program. This program is 
essential to our producers, but we urge the Committee to modernize/
update it to reflect current conditions and protect the American rice 
industry going forward.
    While other agricultural commodity producers have seen recent 
surges in price, rice producers have not been so fortunate. Of all the 
PLC programs, rice is the only one of the major grains that is 
receiving a PLC payment for the 2021 crop indicating it is the one not 
enjoying higher prices. Rice prices have only increased by 8% since 
2020, whereas others have seen increases of over 50%. This slight 
increase in price has resulted in a decrease in the amount of PLC 
benefits available to our producers relative to previous years, with 
the payment rate per pound for rice expected to be \1/3\ lower than 
last year. The value of American rice production has fallen from $3.2 
billion to $2.9 billion from 2020 to 2021 and as the challenges our 
farmers face will only continue to grow, strengthening the safety net 
provided by the PLC program will be essential to preserving American 
rice production.
    Rice producers have also been impacted by the surge in production 
costs, both for inputs and labor. Our rice producers have seen a 
sharper increase in the cost of fertilizer than other commodity 
producers and this gap is widening. As prices for rice are only 
increasing at a moderate rate, our producers will need additional 
support to remain in operation.
    Title I allows our producers to compete in an often-unfair global 
market. Of all the major rice exporting countries, only the U.S. does 
not enjoy developing country status and we are subject to lower prices 
because of the farm subsidies that developing countries are using to 
subsidize their farmers while keeping prices depressed. As other 
countries over-subsidize their rice production, American rice producers 
are disadvantaged. We cannot control what these other countries do, so 
we must continue providing stability to our farmers so they can compete 
in the international market. The safety net provided through Title I 
gives assurance to our producers that they can compete and ensures the 
United States remains relevant in the international market.
    As the Committee considers the 2023 Farm Bill, we urge Members to 
update these safety net programs to better reflect the economic 
conditions our rice farmers face. These programs are critical to our 
producers' operations and much has changed in the past year, let alone 
5 years. As the challenges and uncertainty facing our producers rise, 
it is critical our farmers know they have sufficient support to 
continue operations. We thank you for considering our testimony.
                                 ______
                                 
                          Submitted Questions
Response from S. Brad Doyle, President, American Soybean Association
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. We appreciate the Administration and Congress' ongoing 
efforts to better understand needs and improve accessibility of 
programs across USDA. We are fully supportive of and respect the self-
examination process in which USDA is readily participating. Members of 
USDA's Equity Commission and Subcommittee on Agriculture are 
undertaking a thorough and thoughtful review as they develop 
recommendations on policies, programs, and actions needed to address 
racial equity issues and broader systemic equity issues at USDA.
    Encouraging diversity and eliminating systemic issues that 
facilitate discrimination are important tenets of ASA's new strategic 
plan, and our organizational policy and procedures. We all have a 
responsibility and a role to play in eliminating racial injustice. 
These changes start from within, and examples of how ASA is effecting 
positive change are:

   ASA has introduced interactive curriculum to its programs--
        both board of director and staff training, and our leadership 
        tracks--on, for example, the topics of unconscious bias, 
        privilege, and having thoughtful, impactful conversations on 
        race, inclusion and diversity.

   ASA's new 5 year Strategic Plan implemented this fiscal year 
        includes measurable objectives and action items to guide us as 
        we aim to be more inclusive.

   Our leadership programs and communicators programs provide 
        avenues for training and reaching diverse audiences in 
        agriculture in a positive way.

    Perpetuating environments that do not support all people is not 
what modern agriculture represents. We are cutting edge in 
biotechnology, production practices, and so much more. We have 
demonstrated that we can be on the front end of change, and we strive 
to be better at understanding what issues exist in agriculture so that 
we can be forward thinking and consider the best potential solutions. 
We look forward to working with Congress and the Administration to 
improve equity and accessibility.
Question Submitted by Hon. Cheri Bustos, a Representative in Congress 
        from Illinois
    Question. Mr. Doyle and Mr. Edgington--In both of your testimonies, 
you mention the importance of base acres for growers who would like to 
participate in commodity programs. I have personally heard stories of 
farmers who have purchased land that was not previously enrolled in 
USDA programs. Thus, they were not permitted to enroll that new land in 
Title I commodity programs. What suggestions do you have on how we can 
look to potentially expand base acres in situations like these in a 
responsible and efficient manner?
    Answer. As my testimony highlighted, there is a significant 
disparity in soybean planted acres compared to base acres. The 
inability to access a meaningful safety net by soybean producers is a 
serious concern. Our farm bill survey results showed that 84% of 
respondents would like the option to update base acres.
    In addition to the scenario you have shared, others are outlined in 
my testimony. This includes a young, beginning farmer who has only 10% 
of base acres on his or her farm; a farmer who has implemented 
conservation practices which enable cultivation of acreage without 
base; small farmers who have transitioned out of tobacco production and 
into new crops eligible for base acres; farmers who have exited the 
dairy business and moved into production of other crops eligible for 
base; and farmers who have lost cropland to residential or industrial 
development and have sought other areas to cultivate. There likely are 
more scenarios that exist in farm country that justify a producer 
option to update base acres, on which Agriculture Risk Coverage (ARC) 
and Price Loss Coverage (PLC) benefits are made.
    Our organization looks forward to working with you to develop a 
solution, both to the base acre disparity and the current insufficient 
reference price for soybeans, that can be adopted in the next farm bill 
and implemented by USDA to strengthen the safety net for soybean 
farmers.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. The farm safety net is critically important. Without the 
farm safety net provided by crop insurance and Title I, lenders would 
not have the confidence to extend credit to farmers each year--and 
farmers would not have the resources to produce food, fuel, feed, and 
fiber. Such a scenario would impact domestic food production, as well 
as have a ripple effect throughout rural economies. We are 
unfortunately witnessing the challenges to food production and food 
security unfold in Eastern Europe.
    In addition to the United States, the leading producers of soybeans 
are Brazil, Argentina, India, and China. The U.S. Soybean Export 
Council (USSEC), which is the export arm of the U.S. soybean industry, 
has shared that over the last decade many export partners show 
preference to U.S. soy because of our sustainable production practices, 
environmental protections, and regulatory approaches relative to other 
suppliers. Many of these production practices were initiated in the 
U.S. during the Dust Bowl. The subsequent support provided for 
conserving sensitive areas and technical and financial support for 
transitioning to a variety of conservation practices through Title II 
and private investment have helped put the U.S. in this position. We 
continue to strive for improvement.
Response from Robert Johansson, Ph.D., Director of Economics and Policy 
        Analysis, American Sugar Alliance
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. On behalf of America's sugar producers, I would like to 
thank Congressman Rush for raising the important issue of racial 
diversity in agriculture and the disparity experienced by farmers and 
ranchers of color. All of America's farmers and ranchers, including 
historically underserved farmers and ranchers, are critical to a 
diverse and robust food supply. The American Sugar Alliance is 
dedicated to serving all of America's sugar farmers, including 
producers of color. As an industry, and through our partnerships with 
organizations such as the Food and Agriculture Climate Alliance (FACA), 
we support initiatives to engage and enroll historically underserved 
farmers, ranchers, and forest owners in USDA programs.
    On our farms here in America, we are grateful for the many multi-
generational farm families growing sugar crops. Those include Black, 
Indigenous and Hispanic farmers. America's strong farm and trade 
policies support those sugar farmers and ensure that they can stay in 
business to pass along the family farm to the next generation, 
continuing their farming legacy.\1\ *
---------------------------------------------------------------------------
    \1\ See for example, https://agclimatealliance.com/2021/11/01/
comments-on-usdas-csaf-partnership-initiative/.
    * Footnotes annotated with  are retained in Committee file.
---------------------------------------------------------------------------
    At our processing facilities, investing in our people is a priority 
and a key part of our mission to produce sugar sustainably. America's 
sugar companies have invested in training and scholarship programs to 
encourage a skilled and diverse workforce. Even then, we still need 
more workers on the farm, in the factories and transporting our crops 
to the mills andfactories and sugar to our customers.
    We continue to look for and implement outreach programs to attract 
a diverse workforce for these unfilled needs. Companies have also 
sought to use their reach and influence to make a difference in our 
communities and neighborhoods. Many of our companies serve their 
neighbors through charitable food donations, support for community 
organizations and schools, and volunteer opportunities. Those efforts 
not only help our neighbors but allows the community an opportunity to 
learn what we do, and hopefully attract applicants that would not have 
previously considered a career in agriculture.
    America's sugar industry welcomes and celebrates farmers and 
workers from diverse backgrounds. Across the country, from very rural 
areas to some of the largest cities, our industry provides good jobs 
with good wages and benefits, and real opportunities for growth. Many 
of our farms and processing facilities are in areas where jobs and 
economic growth are very limited. Weakening sugar policy would 
outsource good-paying jobs as well as sugar farms overseas to foreign 
countries who often exploit their workers and farmers.
    As Congress deliberates the next farm bill, we encourage Congress 
to maintain a strong U.S. sugar policy to provide farmers and workers 
with necessary stability and allow our industry to continue investing 
in initiatives that yield a more diverse workforce. We also encourage 
Congress to work alongside the U.S. Department of Agriculture to ensure 
that all farm bill programs are available and accessible to all 
farmers.
Questions Submitted by Hon. Ann M. Kuster, a Representative in Congress 
        from New Hampshire
    Question 1. Dr. Johansson, are there any short-term steps your 
industry would find agreeable to alleviate the tightness in the current 
sugar market? More specifically, would you oppose measures such as:

  a.  Relaxing artificial calendar restrictions to permit routine late 
            and early entry of sugar under quota;

  b.  Eliminating the requirement for the October 1st TRQ to be set at 
            minimum; or

  c.  Directing USDA to work with USTR to regularize the reallocation 
            of import quota shares among countries, recognizing that 
            many countries with U.S. quotas no longer even produce 
            sugar

    Is it the position of the American Sugar Alliance that these 
measures would jeopardize the American sugar industry?
    Answer. Thank you for your questions, Congresswoman Kuster.
    First, we would not characterize the current market as ``tight,'' 
the current projection of stocks-to-use for the 2021/22 crop year is 
13.6 percent, which is due to the requirements built into the 
Antidumping and Countervailing Duty Suspension Agreements with Mexico 
that were necessary to prevent illegal dumping of sugar on America's 
sugar market. And while we all have seen first-hand the impacts of 
rising inflation on our farms, companies, and households, it should be 
pointed out that the cost of sugar has barely risen over the past year.
    Second, we would oppose those three measures for several reasons: 
they would reintroduce uncertainty in program management; possibly 
depress market prices, making it harder for our industry to invest in 
maintaining a just-in-time delivery supply chain; and potentially 
threaten the ability of some farmers to remain in business.
    For background purposes, recall that all outside investors have 
exited the sugar industry. Beet farmers mortgaged their farms to buy 
sugar companies to avoid further closures. Half of the revenue from 
sugar sales go to investing in and maintaining a resilient supply chain 
for sugar, such as building processing and storage facilities to hold 
inventory for our customers. The farmer gets whatever is left to invest 
in his or her farm operation and to purchase inputs for the next 
season. Given the inflated cost of inputs in 2021 and 2022, increasing 
interest rates, and flat sugar prices, some of our growers are 
struggling to cover their costs.
    In conclusion, the current sugar program provides safe, reliable, 
and sustainably produced sugar to corporate customers as well as to the 
American consumer directly in the grocery store. Consumers prefer 
American-made sugar and the price on the store shelf has remained 
relatively constant in nominal terms over the past 10 years at about 
70 per pound (and is actually falling in real terms). And USDA has 
been administering the sugar program, as directed by Congress, at zero-
cost to taxpayers for 17 of the past 18 years and is expected to do so 
for the next 10 years, according to USDA. The one exception is when 
Mexico was found to have illegally dumped sugar onto the U.S. market at 
below Mexico's cost of production.
    Given the global supply chain uncertainties we have and are 
experiencing as a result of [COVID], international conflicts, shipping 
disruptions and climate change, Congress should be looking to 
strengthen the safety net for our American farmers, not weaken it.

    Question 2. Dr. Johansson, the American Sugar Alliance states that 
it supports removing sugar subsidies entirely (or ``zeroing them out'') 
only once every single country with sugar subsidies does the same. We 
all know that's unlikely to happen any time soon. In the meantime, are 
there any changes your organization could support to make Federal sugar 
policy more transparent, fair and equitable for all stakeholders 
involved? Can you point to any area where you think they may be room 
for good-faith compromise?
    Answer. Thank you for your question, Congresswoman Kuster.
    I would argue that Federal sugar policy is as transparent and, in 
many cases, more transparent than it is for other commodities in the 
farm bill. And I would also argue that it is fair and equitable for all 
stakeholders involved. Indeed, many in our industry who are struggling 
to afford current crop inputs or even find them at a reasonable cost, 
or the many farmers and factory workers who used to produce sugar in 
Hawaii, would argue that current policy is not fair and equitable for 
sugarcane and sugarbeet family farmers.
    Your question about compromises related to the Zero-for-Zero 
concept for global sugar subsidies and distortionary practices 
indicates skepticism that other countries will ever stop utilizing 
self-sufficiency schemes that rely on government treasuries to 
subsidize production and dump excess production onto the world market. 
I believe that other countries are less likely to stop over-
subsidization and dumping behavior if the United States first 
unilaterally removes protections.
    We tried to partially dismantle U.S. sugar policy earlier and it 
was a disastrous failure and cost our farmers billions of dollars. 
Under the original NAFTA, Mexico methodically increased subsidies to 
boost its production acres to take advantage of growing access to the 
U.S. market. In 2013 Mexico had a bumper crop and illegally dumped that 
surplus sugar on the U.S. market at prices below its cost of 
production, a clear violation of U.S. trade laws. As a result, prices 
in the U.S. crashed and producers forfeited sugar because they were 
unable to repay their loans with interest, despite being among the most 
efficient and sustainable sugar producers in the world. The lost 
revenue devastated our farmers and was key in driving Hawaiian 
production out of business only to benefit Mexico. That illegal trade 
practice was resolved through the Antidumping and Countervailing Duty 
process administered by the Department of Commerce. However, the 
example remains as a stark reminder of what happens when we allow 
surplus, dump market sugar to flood the U.S. market at predatory, anti-
competitive prices.
    As another example, I would point to the recent finding by the WTO 
that the Government of India has been over-subsidizing its sugar sector 
and then subsidizing the export of its surplus sugar. Of course, the 
Government of India claims that the WTO findings were erroneous and 
unacceptable. It is clear from this example that governments around the 
world will continue to utilize subsidies or other supports to benefit 
their sugar sectors, furthering sugar being the most volatile and 
distorted commodity market in the world. U.S. sugar farmers are among 
the most efficient and sustainable sugar producers in the world and can 
compete on a level playing field, but not against billions in subsidies 
and other hidden supports supplied by foreign governments.
    Therefore, to complement the bipartisan Zero-for-Zero approach to 
eliminating sugar subsidies globally, the American Sugar Alliance 
recently released a policy statement outlining four recommendations to 
improve the effectiveness of the WTO. WTO reforms will make dismantling 
unfair trade practices and subsidies an attainable goal, laying the 
foundation for a less distorted and more predictable global market. We 
would also encourage other countries to improve their labor and 
environmental practices so that their sugar sectors can meet similar 
standards as those in the United States, Australia, and the European 
Union.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. On behalf of America's sugarcane and sugarbeet family 
farmers, I would like to thank Ranking Member Thompson for highlighting 
the importance of the safety net for farmers in general and how 
critical that safety net is for maintaining domestic food production 
and supporting national security. The main safety net for sugar 
producers is the Title I sugar program.
    A key component of the sugar program is access to sugar loans. The 
Department of Agriculture provides processors of domestically grown 
sugarcane and domestic processors of sugarbeets interim financing 
through access to loans to at statutory loan-rate levels. The seasonal 
nature of sugarbeet and sugarcane crops requires sugar producers to 
store massive amounts of sugar until the market demands it. As our 
farmers produce and harvest their cane and beet, and as our processors 
and refineries use that feedstock to produce sugar for sale, those 
sugar loans are necessary to ensure farm and factory operations can 
continue even though the sugar is marketed throughout the year. This 
allows sugar to be stored after harvest when market prices are 
typically low and sold later for just-in-time delivery to food 
manufacturers and retail consumers, when market prices are generally 
more favorable.
    Loans are taken for a maximum term of 9 months and must be 
liquidated along with interest charges by the end of the fiscal year in 
which the loan was made. Unlike most other commodity programs, the 
sugar program makes loans to processors and not directly to producers. 
The reason is that sugarcane and sugarbeets, being bulky and very 
perishable, must be processed into sugar before they can be traded and 
stored.\2\
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    \2\ See https://www.ers.usda.gov/topics/crops/sugar-sweeteners/
policy/.
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    The loans are non-recourse, meaning that when a loan matures, USDA 
must accept sugar pledged as collateral as payment in full including 
interest, in lieu of a cash repayment of the loan, at the discretion of 
the processor. However, that has only happened in 1 year over the past 
18 years, and because loans are repaid with interest, the sugar program 
cost to taxpayers was zero dollars for the other 17 years.
    The one year we did see costs was when Mexico illegally dumped 
surplus sugar on the U.S. market at below its cost of production 
causing an artificially depressed price and forfeiture of sugar to the 
government. That cost our farmers billions of dollars in revenue and 
contributed to the loss of our Hawaiian sugar farmers, mills, and 
refineries. The subsidy/dumping problem was resolved in 2017 when the 
industry brought and won trade cases.
    While vitally important to our industry, the loan rates for raw 
cane sugar and refined beet sugar have not kept up with inflation. As 
we see costs of production rising for all categories of inputs 
according to the USDA, the level of protection provided by those loans 
has declined in real terms.
    Over that same time period, we have seen American sugar farmers 
increase production in the United States by 16 percent while land used 
for sugar production has fallen by 11 percent. Improvements in seed 
genetics, field machinery, and efficiencies in sugar processing 
facilities and refineries have all contributed to those improvements, 
which have helped our family farmers meet some of the strictest 
environmental and labor standards in the world. We know that many 
countries not only overly subsidize their sugar sectors, but they also 
do not adhere to the same standards that our producers do here in the 
United States.
Response from Nicole Berg, Vice President, National Association of 
        Wheat Growers
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. Thank you, Congressman Rush, for allowing the National 
Association of Wheat Growers (NAWG) to continue this dialogue. NAWG's 
mission is to unite wheat farmers to promote policy efforts that create 
an environment that is conducive to the success of wheat farming in the 
United States. Our grower-led organization works to achieve that 
through advancing wheat through advocacy, alliances, and innovation. 
Since assuming the role of NAWG President on March 10, 2022, NAWG 
passed a resolution where we will be engaged and work collaboratively 
with organizations that seek to guarantee all farmers and ranchers are 
treated fairly and equally in farm programs and by Federal agencies 
regardless of race, color, gender, sexual orientation, age, national 
origin or ancestry, physical or mental disability, or veteran status. 
It is incumbent upon legislators and the executive branch to advance 
and implement public policies are accessible to all farmers. As we look 
towards reauthorizing the farm bill in 2023, I have begun outreach to 
other trade associations across the industry, including organizations 
that work to encourage the participation of historically disadvantaged 
farmers. It is important we as an industry work hand in hand to 
eliminate racial injustice and discrimination in our institutions. We 
also look forward to working with Congressman Rush and other Members of 
the House Agriculture Committee to ensure more transparency and 
equality in farm programs and the Federal agencies that implement them.
    NAWG applauds the USDA and the work of this Committee for their 
work in establishing the Equity Commission and Subcommittee on 
Agriculture and appreciates the work USDA is conducting through 
thorough reviews of their policies and programs. We look forward to 
working with the partners in this Commission to advance the equity of 
all our farmers.
    Further, NAWG advocates for farm programs that will help all wheat 
farmers. U.S. wheat farmers produce the best, highest quality wheat in 
the entire world, and our minority farmers play a massive role in 
accomplishing that. We feel that tightening the farm safety net to 
allow fewer farms to fall through is the best way to ensure that our 
minority farmers are able to pass their farms into posterity. Policies 
that allow farms to be passed onto next generations of farmers 
affordably, allow our farmers to remain in business through down 
economic years and natural disasters, and help mitigate risk in one of 
the riskiest businesses in the economy, will help keep minority farmers 
on their land. We are committed to ensuring these programs are 
equitably implemented and leave no farmer behind and look forward to 
working with Members of this Committee to make that happen.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. Thank you, Ranking Member Thompson, for allowing the 
National Association of Wheat Growers (NAWG) the opportunity to discuss 
this vitally important topic. The farming safety net is vital in not 
only keeping farmers employed on their farms that have often times been 
in the family for multiple generations, but in ensuring that the United 
States has the most secure, safe, and affordable food supply. Never 
before have humans been able to produce this much food, using these few 
resources, on this little land. The safety net allows our farmers to 
engage their entrepreneurial spirit, take risks, try different 
practices, and ultimately create the best, most innovative food. This 
safe, secure, and affordable food supply comes with a significant 
amount of risk and cost. Input costs have risen dramatically since the 
start of COVID-19, while world events and drought over the last twelve 
months have created unprecedented market volatility. Without the safety 
net provided by the farm bill, many farmers would have been forced to 
exit the industry, putting the food supply at risk.
    Russia and China are currently the two largest single country wheat 
producers in the world, according to the most recent World Agricultural 
Supply and Demand Estimates (WASDE) report from the USDA. These 
countries are not beholden to the same conservation or climate 
standards as U.S. farmers are, nor do they produce the high-quality 
wheat that U.S. farmers do. As this Committee discusses conservation 
and climate programs, it is important to understand that hindering the 
U.S. wheat farmer's ability to produce their products, which have long 
been grown under climate-smart practices that leave the ground in 
better condition to ensure their posterity are able to continue to 
produce, will allow our competitors to capitalize on our decreases in 
production. This will only hurt the environment and climate.
Response from Chris Edgington, President, National Corn Growers 
        Association
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. Thank you for the question and opportunity to continue the 
conversation on this important topic. The National Corn Growers 
Association (NCGA) has adopted the mission to ``sustainably feed and 
fuel a growing world'' with the vision ``to create and increase 
opportunities for corn growers.''
    NCGA understands and recognizes that minority producers, including 
farmers of color, have faced discrimination, injustices, and barriers 
that other corn growers have not and do not encounter. Unfortunately, 
we understand these challenges continue today throughout agriculture 
and within the U.S. Department of Agriculture (USDA) programs and 
policies.
    We are supportive of USDA's establishment of the Equity Commission 
and Subcommittee on Agriculture and recognize that the Commission was 
first authorized and funded by Congress. We appreciate the leadership 
of Dr. Jewel Bronaugh, Deputy Secretary of Agriculture, and the 
external stakeholders who are conducting a thorough review of USDA 
policies and programs.
    We look forward to the results and recommendations from this 
diverse group of agriculture leaders on how USDA and the programs the 
Department administers can advance equity and remove barriers to 
underserved communities.
    As a grassroots membership organization, NCGA is committed to 
cultivating a diverse membership, workforce, and a culture of 
inclusivity and belonging. NCGA and our affiliated state associations 
and check-off organizations work together to help protect and advance 
corn growers' interests. Membership is to open all individuals without 
regard to race, color, religion, sex, national origin, age, disability, 
veteran status, marital status, sexual orientation, or gender identity.
    Our focus is on creating competitive market demand, promoting 
increased sustainable production, and strengthening customer and 
consumer trust. These efforts are intended to advance the profitability 
and prosperity of all corn growers across the country. However, we 
acknowledge that we have a responsibility and a role to play in 
eliminating racial injustice in our industry. We look forward to 
working with the Committee and Congress so that agriculture programs 
better represent and address the needs of all farmers and communities.
Question Submitted by Hon. Cheri Bustos, a Representative in Congress 
        from Illinois
    Question. Mr. Doyle and Mr. Edgington--In both of your testimonies, 
you mention the importance of base acres for growers who would like to 
participate in commodity programs. I have personally heard stories of 
farmers who have purchased land that was not previously enrolled in 
USDA programs. Thus, they were not permitted to enroll that new land in 
Title I commodity programs. What suggestions do you have on how we can 
look to potentially expand base acres in situations like these in a 
responsible and efficient manner?
    Answer. Ahead of the 2018 Farm Bill, delegates for the National 
Corn Growers Association (NCGA) adopted broad policy that supports the 
update of base acres and yields for commodity programs when applicable. 
While NCGA does not currently have national policy that provides 
specific recommendations for changes to base acres, we also hear from 
growers who are in similar circumstances without access to the 
commodity Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) 
programs due to a lack of base acres.
    NCGA grower led action teams and state associations, are continuing 
to study the issue, explore potential changes, and evaluate the pros 
and cons of changes, as part of our policy development process. Policy 
options under review and consideration range from a voluntary base acre 
update, base acre reallocation, to a mandatory base acre update. Each 
policy would have highly individualized impacts on producers at a farm-
to-farm level as well as national budgetary scoring and baseline 
implications for program crops. We look forward to working with the 
Committee as NCGA develops more formal policy priorities ahead of the 
next farm bill.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. The National Corn Growers Association (NCGA) and our 
members are very mindful of the need to balance a dependable domestic 
food and energy supply, long-term farmer profitability, and 
environmental stewardship. We appreciate the Committee's consideration 
of our views regarding USDA commodity programs and the need for 
producers to have access to effective risk management tools, including 
Federal crop insurance.
    The producer safety net programs, authorized and updated through 
farm bills, help growers proactively manage their risks and respond to 
multiple challenges impacting farmers and the agriculture industry. 
NCGA continues to focus on accessible and defensible tools geared 
towards revenue, which factors in both yield and price risks that 
growers may face throughout the growing and market seasons.
    NCGA formed a Corn Sustainability Advisory Group in 2019 to 
proactively drive the U.S. corn sustainability story and ensure 
continued demand for the crop. In June 2021, NCGA solidified corn 
farmers' commitment to environmental, economic, and social 
sustainability with the release of U.S. Corn Sustainability Goals and 
the first U.S. Corn Sustainability Report. The report documents a long 
history of continuous improvement by U.S. corn farmers and the goals 
set targets for further progress over the next decade.
    The United States is the largest producer of corn globally, 
followed by China, Brazil, Argentina, and Ukraine. In terms of 
exporting markets, the U.S. remains competitive with other corn 
exporting countries and will continue innovate and implement technology 
and practices that make U.S. corn production efficient and 
environmentally and economically sustainable.
Response from Jaclyn D. Ford, Delegate, National Cotton Council
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. Thank you for this question and for the opportunity to 
provide some input on this important issue. The National Cotton Council 
(NCC) recognizes that minority producers have and continue to face 
discrimination and barriers in agriculture and in working with USDA to 
access programs.
    Membership in the National Cotton Council is open to all U.S. 
cotton producers and individuals operating across the other six 
segments of industry we represent. We are a grassroots membership 
organization, with a diverse workforce, and a culture of inclusivity. 
NCC and our state producer interest organizations along with other 
national industry interest organizations work together for the benefit 
of all the individuals in the U.S. cotton industry without regard to 
race, color, religion, sex, national origin, age, disability, veteran 
status, marital status, sexual orientation, or gender identity.
    More recently, NCC has been communicating with the National Black 
Growers Council and has participated in a number of their regional 
field days and their most recent annual meeting last fall. As part of 
the industry's commitment to sustainability, through the U.S. Cotton 
Trust Protocol, we are planning and conducting specific outreach to the 
minority producer community to assist them in enrollment to the 
Protocol, which is intended to help cotton producers better market and 
promote their cotton to our customers and consumers.
    We plan to continue our outreach and engagement with the National 
Black Growers Council as their membership includes a number of cotton 
producers, some of whom are also members of NCC. And we have been 
exploring what other projects and activities with our agribusiness 
partners we can initiate and undertake to do more outreach and 
engagement with the underserved community. In addition, we look forward 
to working with the Committee going forward to help ensure that 
agriculture programs and policies are available and effective for all 
farmers.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. For cotton, the farm bill safety net that includes strong 
price protection in Title I along with crop insurance, and the 
marketing loan program are the key components critical to our industry, 
the financial viability of our producers, and the basis for marketing 
the U.S. cotton crop. U.S. cotton must compete in a highly competitive 
global market with a majority of U.S. cotton exported to textile 
producing countries. The U.S. is the third largest producer of cotton 
behind India and China, and the U.S. is the largest exporter of cotton, 
followed by Brazil.
    In terms of conservation practices adopted by cotton producers and 
actions to address climate change, the U.S. cotton producer is leading 
the world in terms of a shrinking environmental footprint. This success 
is being highlighted and validated by the industry's sustainability 
platform, the U.S. Cotton Trust Protocol. While other countries such as 
Brazil are trying to position their producers and cotton production as 
meeting strong sustainability standards and metrics, their progress 
does not match the position of the U.S. where our growers are 
continuing to implement practices to make continued improvements in 
water efficiency, soil health, energy efficiency, and greenhouse gas 
emissions.
Response from Verity Ulibarri, Member, Farm Bill Advisory Committee, 
        National Sorghum Producers
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. Representative Rush, I thank you for this important 
question. I would like to note that during the hearing, because I was 
participating remotely, I was unable to clearly hear the question as it 
was asked at the time, but I am happy to provide a response to you now 
understanding its full context.
    As a female farmer and rancher of Hispanic descent, I have seen 
behavior that is at the root of your concern. However, I can also say I 
have not allowed it to diminish my hopes, and I also would say it has 
not, in fact, diminished my prospects for success. I believe through 
hard work, honest dealings and ``sticktoitivity'', there are no 
cultural constraints that cannot be overcome. This is among the great 
blessings of living and working in the United States of America. With 
that said, agriculture is a tough business with no guarantee of 
success.
    While I believe there are a number of programs and policies that 
exist to help address some of the systemic issues expressed, and I 
personally know historically underserved individuals who have 
benefitted from those programs, I also believe examination of how we 
can continue to improve and create a more inclusive industry that 
supports all people who want to be a part of modern agriculture is 
necessary.
    National Sorghum Producers has worked hard to ensure our leadership 
represents all sorghum farmers. We support our sister organization with 
the Leadership Sorghum program, established almost 10 years ago, and it 
has served as a tool to identify and recruit leaders who represent 
diverse ethnicities, races, genders, ages, growing regions and 
practices.
    We are also proud of the level of diversity represented in STEM 
careers in the sorghum industry. We invest in students as up-and-coming 
researchers, farmers and young professionals through efforts conducted 
by National Sorghum Producers and the Sorghum Foundation, and we remain 
engaged with these research professionals at private and public 
entities as they are critical contributors to the success of sorghum 
farmers and the agriculture industry.
    On behalf of the National Sorghum Producers, I thank you for your 
passion and leadership, and we look forward to working with Congress 
further to examine and update future policies that ensure working in 
agriculture is a meaningful and fulfilling way to live, for all people 
who want to be a part of it.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. As we look at the situation in Ukraine and Russia right 
now, I think we are all reminded of the importance of a strong domestic 
safety net and maintaining our U.S. food supply. This is a key priority 
for my farm and for National Sorghum Producers as we evaluate the farm 
bill and components under Title I, in addition to crop insurance. It's 
imperative we safeguard both these program titles for our national 
security and the economic viability of U.S. farmers and ranchers.
    The U.S. leads the world in sorghum production and exports. From an 
export standpoint, Brazil is the fastest growing competitor, but as we 
look at acres in our country side-by-side to those in Brazil, U.S. 
sorghum farmers employ conservation tillage methods on 74 percent of 
all sorghum acres, whereas Brazil is destroying one of the world's 
largest carbon sinks. Nigeria, Ethiopia, Sudan, and Mexico follow the 
U.S. in total acres, but production and efficiency to that of the U.S. 
sorghum farmer is unmatched. Sorghum's natural characteristics help it 
protect and build soil health by retaining moisture and nutrients. It's 
a water-smart, climate resilient crop, and it conserves our precious 
natural resources, adapting to both heat and drought, making it a 
reliable and responsible option for U.S. farmers and consumers alike.
Response from Clark Coleman; on Behalf of National Sunflower 
        Association, National Barley Growers Association, U.S. Canola 
        Association, and USA Dry Pea and Lentil Council
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. I do not have the answer to combating historic 
discrimination faced by black and brown farmers. This is an issue that 
goes beyond any specific crop or organization. There are significant 
barriers to entry for farming and those are certainly greater for 
minorities. The organizations that represent the crops that I grow need 
more participation and resources and do not have the luxury of 
excluding anyone.
    Discrimination and prejudice absolutely should not be tolerated in 
any government program, any organization, or any individual. USDA 
employees at all levels, from the county offices to the top leadership, 
must ensure that programs are inclusive, accessible to all, and 
administered equally for all. USDA recently launched its equity action 
plan that seeks to increase access to Federal programs and improve 
relationships with minority groups and Tribal nations. I look forward 
to the recommendations expected later this year and next year and 
welcome suggestions for ways that I and the organizations that 
represent me can be proactive in promoting and supporting greater 
diversity and inclusiveness in agriculture.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. The experiences of the past few years certainly demonstrate 
the importance of the farm safety net and maintaining domestic food 
production. The COVID pandemic and supply chain disruptions, and now 
the war in Ukraine, reinforce how vital domestic food production is to 
our national and economic security. I would add that part of 
maintaining domestic food production is ensuring that we have reliable 
sources of fuel, fertilizer, chemicals and inputs necessary to produce 
our food.
    On top of the pandemic and supply chain disruptions, in 2021 much 
of the country experienced significant natural disasters, including 
hurricanes in the Southeast, wildfires in the West and historic drought 
in the northern tier and Northwest. Without the safety net provided by 
Title I farm programs and crop insurance, many farms would simply not 
be able to survive. Conservation programs also play an important role 
as we must conserve our natural resources and ensure healthy soils and 
clean water in order to maintain abundant domestic food production.
    For sunflowers, the major global producers are Ukraine and Russia. 
The Russian invasion and war in Ukraine has significantly impacted 
supply and prices. Sunflower production in the U.S. has been declining 
for the past 2 decades and the private-sector breeding research and 
investment has migrated to Europe and South America where sunflower 
production is increasing. Only one private company develops and tests a 
full product line in North America. The hybrid choices available to 
farmers this year and into the future will be hybrids adapted to other 
continents. Even prior to the war in Ukraine the National Sunflower 
Association was developing a request to establish a domestic research 
initiative with the USDA Agricultural Research Service (ARS) in the 
2023 Farm Bill. We urge your consideration and support for this 
proposal.
    For the other crops I grow, the global leaders in barley production 
include Australia, France, Ukraine, and Russia. Canola and rapeseed are 
produced largely in Canada, Europe, Russia, and Ukraine. While I do not 
know how each of those countries stack up from a climate and 
conservation standpoint, I believe U.S. farmers must continue to strive 
for improved efficiencies that will enable us to produce more on the 
same amount of land and with greater fuel and fertilizer efficiency. 
This will be necessary to feed the growing global population as well as 
conserving natural resources and mitigating environmental impacts.
    Thank you again for the opportunity to participate in this hearing.

Clark Coleman.
Response from Jennifer James, Member, Board of Directors, USA Rice
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
    Answer. We appreciate and recognize the importance of this topic 
and thank you for the question. USA Rice supports diversity and 
inclusion in our industry.
    The organization staff have all participated in diversity and 
inclusion training.
    As a partner with the U.S. Department of Agriculture on a number of 
programs, USA Rice adheres to and takes seriously its equal opportunity 
and non-discriminatory statement: ``USA Rice is an equal opportunity 
provider and employer. USA Rice does not discriminate based on race, 
color, national origin, religion, sex, gender identity, sexual 
orientation, disability, age, marital/family status or political 
beliefs.''
    USA Rice did not oppose U.S. Department of Agriculture loan relief 
and flexibilities for historically underserved producers.
    USA Rice supports the efforts of the U.S. Department of 
Agriculture's Equity Commission, which was authorized and funded by 
Congress, and looks forward to the recommendations offered to break 
down the barriers experienced by minority farmers, including farmers of 
color.
    We recognize that discrimination has occurred with various programs 
offered by the U.S. Department of Agriculture, and it is our hope that 
the commission provides insights and actionable items to ensure that 
discrimination does not occur.
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?
    Answer. Thank you for this very important question.
    The U.S. rice industry contributes more than $34 billion to the 
U.S. economy annually and provides jobs for more than 125,000 
individuals. There are over 5,500 rice farmers that grow rice across an 
average 2.8 million acres, and the industry produces 20 billion pounds 
of rice annually. Half of the rice produced in the U.S. is exported 
overseas to more than 120 countries. Approximately 80 percent of rice 
consumed in the U.S. is produced and processed domestically.
    The Price Loss Coverage (PLC) program has been a simple and 
predictable safety net for rice farmers, and it functions as intended 
by providing assistance during times of declined prices that are beyond 
the control of a farmer.
    PLC has supported rice producers in low price environments in the 
past, but the program has recently only provided some assistance to 
U.S. rice farmers as we compete with heavily subsidized and protected 
foreign producers of rice, such as China, India, and Thailand. These 
bad trade actors continue to distort markets around the world, dumping 
rice which results in many disadvantages for U.S. rice farmers. 
Unfortunately, the support from PLC has not kept pace with the level of 
support that foreign rice producers enjoy, and it isn't equipped to 
respond to a rapid increase in input costs or rising inflation.
    PLC reference prices were developed using cost of production data 
from 2012. Rice farmers are facing input costs that are much higher 
than they were in 2012. The current PLC price for 2021 is projected to 
be around $14/cwt, which is the current reference price. This means 
rice producers are at break-even prices according to 2012 cost of 
production.
    Rice farmers are facing both stagnant commodity prices and 
disproportionately higher input costs. This combination is creating a 
severe financial squeeze that threatens the continued viability of U.S. 
rice farms. Rice prices have not kept pace with other major crops whose 
prices are much higher than they were in 2020. Similarly, the rise in 
input costs hit rice farmers disproportionately harder than other 
commodities.
    A February 2022 study from Texas A&M University's Agricultural and 
Food Policy Center (AFPC) indicates rice farmers will realize more than 
$500 million in losses this year. As a result, rice producers are in a 
worst-case scenario when looking at likely no support from PLC and the 
current cost of production.
    China, India, and others are blatantly ignoring their World Trade 
Organization commitments and admit to highly subsidizing their 
producers while dumping rice on the global market. This further 
undercuts U.S. producers and threatens the viability of our industry.
    India, the world's largest rice exporter, controls nearly \1/2\ of 
the global rice trade. In 2020 and 2021, rice was the only staple food 
to not see significant world price increases because of India's record 
production and dumping of stocks on the world market. In 2021, India 
made up 40 percent of world rice trade. In 2010, India made up eight 
percent.
    Additionally, Thailand and Vietnam, the second and third largest 
exporters, are also in excess of their commitments. According to the 
U.S. International Trade Commission, rice is the most protected and 
subsidized commodity traded globally. Last month, India announced it 
would subsidize fertilizer for its producers of rice, wheat, and sugar 
in excess of $20 billion. This is in addition to agricultural subsidies 
already in place in India where rice producers' production costs are 
subsidized at upwards of 80 percent.
    Without improvements to the PLC program in the next farm bill and 
needed action against India and others by our government at the WTO, 
rice farmers stand to lose. Current forecast production is an 
indicator. U.S. rice acres will decline to the lowest levels since 2017 
according to USDA's March 2022 Prospective Plantings Report, however, 
as an industry, we feel this forecast was a high estimate and our 
acreage will be lower. As a result, production will be lower. Even 
though the 2021 crop was small and 2022 is forecast down again, prices 
have remained steady. Fundamentally, our market isn't reacting as it 
should be due to the actions of these bad trade actors.
    U.S. rice farmers have been smart about the climate for decades and 
blazed a trail in conservation and sustainability initiatives. USA Rice 
is an effective collaborator when it comes to sustainability efforts 
given our history with the Rice Stewardship Partnership, a long-term 
partnership with Ducks Unlimited and the Natural Resources Conservation 
Service, established in 2013.
    USA Rice strongly supports voluntary, incentive-based and cost 
share conservation programs, such as EQIP, CSP, and RCPP. Working lands 
programs not only address resource concerns, but they also increase 
productivity and sustainability by making cropland more diverse and 
efficient.
    All segments of the U.S. rice industry are invested in sustainable 
production and milling practices because it is personal--rice farmers 
often live on the land they work, and rice mills are important economic 
drivers in their communities. Together they provide tens of thousands 
of jobs and inject billions of dollars into the economy--all while 
standing on a strong record of environmental stewardship.
    Every day the U.S. rice industry strives to meet the demands of 
growing populations while increasing resource efficiencies at every 
level of the supply chain. The rice community is invested in using 
sustainable production and processing practices because it is personal. 
We provide for our families, serve our communities, protect wildlife 
habitats, and create jobs. Our stewardship is deliberate, ensuring a 
healthy, safe food supply, while improving the environment, and 
contributing to the local economy.
    The climate advancements and environmental stewardship by rice 
farmers here in the United States is second to none. The U.S. rice 
industry has decreased greenhouse gas emissions by 41 percent since 
1980, while also decreasing energy and water use and soil loss, and 
increasing land use efficiency.
Response from Meredith McNair Rogers; on Behalf of U.S. Peanut 
        Federation *
---------------------------------------------------------------------------
    * There was no response from the witness by the time this hearing 
was published.
---------------------------------------------------------------------------
Question Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question. During the hearing, I asked what I thought was a 
straightforward question: what policies would our expert panel made up 
of commodity group witnesses recommend to rectify both the historic and 
current discrimination too often faced by farmers of color? And yet, I 
was faced by defending silence.
    So I would like to ask again for the record, for all witnesses, 
what specific policies would you recommend to combat the historic and 
current discrimination too often faced by Black and Brown farmers in 
your respective industries?
Question Submitted by Hon. Glenn Thompson, a Representative in Congress 
        from Pennsylvania
    Question. Can you talk about the importance of the safety net and 
maintaining domestic food production, and for your commodity, what 
other countries are major producers, and how do they stack up from a 
conservation and a climate standpoint?


 
                     A 2022 REVIEW OF THE FARM BILL

                          (RURAL DEVELOPMENT)

                              ----------                              


                         TUESDAY, MARCH 8, 2022

                  House of Representatives,
   Subcommittee on Commodity Exchanges, Energy, and Credit,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Antonio Delgado [Chairman of the Subcommittee] presiding.
    Members present: Representatives Delgado, Plaskett, Axne, 
Craig, Kuster, Spanberger, Pingree, Schrier, Fischbach, Austin 
Scott of Georgia, LaMalfa, Balderson, Cloud, Feenstra, Cammack, 
Thompson (ex officio), and Mann.
    Staff present: Lyron Blum-Evitts, Emily German, Chu-Yuan 
Hwang, Paul Balzano, Caleb Crosswhite, Patricia Straughn, Erin 
Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. ANGIE CRAIG, A REPRESENTATIVE IN 
                    CONGRESS FROM MINNESOTA

    Ms. Craig [presiding.] This hearing of the Subcommittee on 
Commodity Exchanges, Energy, and Credit entitled, A 2022 Review 
of the Farm Bill: Rural Development, will come to order.
    Welcome, and thank you for joining today's hearing. In 
consultation with the Ranking Member and pursuant to Rule 
XI(e), I want to make Members of the Subcommittee aware that 
other Members of the full Committee may join us today. After 
brief opening remarks, Members will receive testimony from our 
witness today, and then the hearing will be open to questions.
    Today's hearing with USDA's Under Secretary for Rural 
Development, Xochitl Torres Small, is an important opportunity 
for Members of this Subcommittee to evaluate the effectiveness 
of Rural Development programs and the implementation of the 
2018 Farm Bill.
    First of all, I would like to welcome Under Secretary 
Torres Small back to the Agriculture Committee. I think I speak 
for all of my colleagues when I say your presence on this 
Committee is missed, but we are grateful for your continued 
public service in your new role.
    One of my goals for today's hearing is to highlight the 
strength of rural communities across America, and to dig deeper 
in rural communities like those in Minnesota's 2nd 
Congressional District, so that we can take advantage of 
opportunities that Congress has provided in the 2018 Farm Bill, 
and subsequent legislation.
    One aspect of today's discussion and an integral part of 
the work of the Rural Development team at USDA is that 
Americans should be able to choose where they want to live 
without having to make concessions on access to fast and 
reliable broadband internet, clean water, and affordable 
healthcare. Additionally, we must work to ensure that those 
diverse communities have the tools to thrive in a 21st century 
economy.
    Part of achieving that goal is to strengthen the reliance 
of local supply chains so that they can better support the 
distribution of commodities in a diverse economy where 
residents have access to tools that will support their learning 
and success. Another part of that goal is continuing to invest 
in renewable energy found across rural America.
    Ultimately, rural America knows best how to invest in their 
communities.
    In this Subcommittee, over the past year we have heard from 
rural stakeholders and residents about the problems they 
encounter and the resources they need most. Under Secretary 
Torres Small, thank you for accepting our invitation to speak 
before us today as we conduct important oversight work in 
preparation for the 2023 Farm Bill. I value that experience and 
insight you bring, and I look forward to hearing your 
testimony.
    [The prepared statement of Mr. Delgado follows:]

    Prepared Statement of Hon. Antonio Delgado, a Representative in 
                         Congress from New York
    Today's hearing with USDA's Under Secretary for Rural Development, 
Xochitl Torres Small, is an important opportunity for Members of this 
Subcommittee to evaluate the effectiveness of Rural Development 
programs and the implementation of the 2018 Farm Bill.
    First of all, I'd like to welcome Under Secretary Torres Small back 
to the Agriculture Committee. I think I speak for all of my colleagues 
when I say your presence on the Committee is missed, but we are 
grateful for your continued public service in your new role.
    My district is the eighth most rural district in the country and my 
constituents know first-hand just how much resilience and ingenuity 
there is in rural communities. One of my goals for today's hearing is 
to bring some of those strengths to light and dig deeper on how rural 
communities like the ones I and many others on this Committee 
represent.
    One aspect of today's discussion, and an integral part of the work 
of the Rural Development team at USDA, is that Americans should be able 
to choose where they want to live without having to make concessions on 
access to clean water, affordable health care, or fast and affordable 
broadband internet.
    Additionally, it is important that our rural communities have the 
tools to thrive in a 21st century economy. We must work together to 
help strengthen local supply chains and ensure efficient distribution 
of commodities.
    Ultimately, rural America knows best how to invest in their 
communities. In this Subcommittee over the past year, we have heard 
from rural stakeholders and residents about the problems they face and 
the resources they need most.
    Under Secretary Torres Small, thank you for accepting our 
invitation to speak before us today as we conduct important oversight 
work in preparation for the 2023 Farm Bill. I value the experience and 
insight you bring, and I look forward to hearing your testimony.
    I would now like to welcome the distinguished Ranking Member from 
Minnesota, Ms. Fischbach, for any opening remarks she would like to 
give.

    Ms. Craig. I now would now like to welcome the 
distinguished Ranking Member, the gentlewoman from Minnesota, 
Mrs. Fischbach, for any opening remarks that she would like to 
give.

OPENING STATEMENT OF HON. MICHELLE FISCHBACH, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mrs. Fischbach. Thank you, Madam Chair. I appreciate the 
opportunity, and thank you, Under Secretary, for being here 
today. We appreciate it, and I would like just to begin by 
remembering Jim Hagedorn. Jim was passionate about his work on 
the Agriculture Committee and serving the people of southern 
Minnesota. Our districts are very similar, and so, I was 
fortunate to work with him on issues critical to our 
constituents, like promoting ethanol, expanding broadband 
access, improving livestock supply chains.
    I also want to thank the Majority for starting these 
hearings for the next farm bill. I am very excited to start 
this process. Each of us want to make this bill as strong as we 
can to serve our constituents, and as Ranking Member Thompson 
has said, collaboration at the committee level is necessary to 
make that happen.
    Holding hearings like this one will help us all better 
understand what worked and what didn't work from the last farm 
bill, so the reauthorization accurately addresses the needs of 
our rural communities.
    Through the 2018 Farm Bill, this Committee made important 
improvements to USDA Rural Development programs to meet the 
health, communications, infrastructure, and economic 
development needs of rural Minnesota. We provided new and 
expanded authorities to help address the opioid crisis and the 
loss of rural health facilities, expand access to clean water 
and high-speed internet service, rebuild essential community 
facilities, strengthen rural employers and employees, and 
promote regional economic development. These pieces are 
critical components for building what I call strong rural 
communities.
    I am anxious to hear about the Department's work 
implementing these programs and what additional resources or 
authorities are needed to enhance the Rural Development 
toolkit. I am particularly interested in hearing how deployment 
of rural broadband is going, and the role the USDA plays.
    Last summer, we worked together to craft a bipartisan 
broadband bill, blending ideas from Ranking Member Thompson's 
Broadband for Rural America Act (H.R. 3369) with proposals from 
Chairman Scott and Chairman Delgado to develop the Broadband 
Internet Connections for Rural America Act (H.R. 4374). This 
legislation passed our Committee unanimously in a clear display 
of just how important robust broadband connectivity is to our 
Committee and the Americans we represent. This Committee 
believes that USDA should have the outsized role in the 
development of broadband infrastructure in rural Minnesota--
excuse me. That was a Freudian slip, I think--in rural America. 
I hope to hear more from the Under Secretary about how we can 
strengthen USDA's role in this important mission area.
    And again, thank you so much for being here. I really 
appreciate it, and I am looking forward to the hearing.
    Thank you.
    Ms. Craig. Thank you so much.
    I would now like to recognize Ranking Member Thompson for 
any opening comments he would like to make.

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

    Mr. Thompson. Madam Chair, thank you very much. Thank you 
to you and the Ranking Member for this hearing.
    Let me first echo Mrs. Fischbach's statements, one 
regarding Jim Hagedorn, and some of us will be attending the 
funeral, a celebration of his life later today. His presence 
certainly is going to be missed in these halls and on this 
Committee.
    I would also echo the Ranking Member's statements and thank 
the chair for calling this hearing on the rural development 
title of the farm bill. I am honored to welcome Under Secretary 
Torres Small back to the Committee, I am thrilled to see her. 
What a blessing to see an Agriculture Committee alumni in the 
Rural Development Office, someone who truly understands rural 
America and the challenges our constituents face. It is great 
to see you back in the Committee room, Under Secretary.
    I recently read a very staggering statistic that I would 
like to share with you all. According to the Federal 
Communication Commission's 2021 broadband report, more than 
500,000 Pennsylvanians are without access to broadband 
connectivity. In fact, Pennsylvanians living in rural areas are 
11 percent less likely than their urban and suburban 
counterparts to have internet service at home.
    Now, this very statement is proof for the ongoing digital 
divide. In the 2018 Farm Bill, we as a Committee enacted 
provisions tackling rural and regional broadband development 
and deployment issues across the nation, while prioritizing 
resources to the most remote and least connected residents who 
are also often the most expensive to connect. Now we must 
continue to look for ways to bring rural America into the 21st 
century, and I know this is an issue that you are passionate 
about, Under Secretary.
    Agriculture Committee Republicans are ready and eager to 
work with you on improvements to the Rural Development mission 
area, but we cannot do that without willing partnership and 
proactive engagement from you and the rest of the Department of 
Agriculture. Our partnership falters when the Department acts 
unilaterally and ignores the concerns of Members of this 
Committee, or fails just to engage the Committee in the 
development of the work that they are doing, and only seeks our 
counsel or input when new authority or funding is needed. Now, 
we share the responsibility for governing and addressing the 
needs of rural America, and we can only meet that obligation if 
we work together.
    Historically, I am very proud of the fact that the House 
Agriculture Committee is one of the most--I would say the 
most--bipartisan committees in Congress. Our dais is reigned 
with an impressive dedicated group of Members who are committed 
to rural America, just like everyone at USDA is. I hold out 
hope that we can develop a fruitful, consistent partnership 
with USDA that best serves our rural communities. You might be 
surprised about what we can accomplish when we work together.
    I thank you for doing this, and I look forward to today's 
oversight conversation.
    Thank you, Madam Chair, and I yield back.
    Ms. Craig. Thank you so much, Ranking Member.
    The chair would request that other Members submit their 
opening statements for the record so our witness may begin her 
testimony, and to ensure that there is ample time for 
questions.
    I would like to again welcome our witness today, USDA's 
Under Secretary for Rural Development, Xochitl Torres Small. We 
will now proceed to hearing your testimony. You will have 5 
minutes. The timer should be visible to you and will count down 
to 0, at which point, your time has expired.
    Under Secretary Torres Small, please begin when you are 
ready.

         STATEMENT OF HON. XOCHITL TORRES SMALL, UNDER 
      SECRETARY FOR RURAL DEVELOPMENT, U.S. DEPARTMENT OF 
                 AGRICULTURE, WASHINGTON, D.C.

    Ms. Torres Small. Thank you, Chair Craig, thank you, 
Ranking Member Fischbach, thank you Ranking Member Thompson, 
thank you all Members of the Subcommittee for the chance to 
come before you today and discuss the state of the United 
States Department of Agriculture's Rural Development mission 
area. I also deeply appreciate your comments about Congressman 
Hagedorn, a former colleague of mine.
    Last week, I was in the Black Belt, and I saw firsthand the 
wastewater crisis that Americans there have been experiencing 
for decades. When you don't have good wastewater, you may also 
be drinking dirty water, because of contaminated wells. Rural 
Development has been working on this for some time, and 
specifically trying to get folks to sign up for drinking water 
systems so that we can continue the operations and maintenance 
necessary to do that work.
    So, that means getting people to sign up for these systems, 
getting them to trust a government that has, all too often, let 
them down. And so, one Rural Development employee decided to go 
door-to-door in rural Alabama talking with constituents, trying 
to get them to sign up for this program. And one woman almost 
threw him out. She said, ``I have been drinking this water from 
this well my entire life. The government hasn't helped me yet. 
Why should I think that they will help me now?'' He he sat down 
with her and convinced her to let him test her water, and when 
the test results came back, the person testing asked if the 
sample had come from a septic tank because there was that much 
bacteria in the water. She now has clean water. She signed up 
for the service and that is a success story. But it also shows 
how much time it can take with just one person to rebuild that 
trust.
    And so, I want to thank you for the time that you put in to 
listening to and representing your constituents, to the 
thoughtful investments that you make in Rural Development so 
that we can continue to do this work together. I recognize that 
call to service, and I am deeply grateful to get to work with 
you.
    I am also proud that President Biden and Secretary Vilsack 
have laid out a clear vision for agriculture and rural America. 
Building Back Better from COVID-19, expanding options for more 
and better markets for farmers and ranchers, helping us all 
survive extreme weather, and build resiliency through climate-
smart tools, and reaching people in places that have been 
historically underserved, advancing racial justice, equity, and 
opportunity. Because rural America has incredible potential, 
but it cannot be fully realized without reliable infrastructure 
that looks like broadband, but it also looks like hospitals, 
schools, community centers, water and wastewater services, 
housing, sustainable energy, all of which are critical for 
quality of life, as well as for growth and resiliency.
    Your work as Representatives means you are clear-eyed on 
the challenges that we will face in turning these investments 
into infrastructure on the ground. I know I am in a rural 
community when I am in a room full of people who care deeply 
about their home, but not one of them is a grant writer. Which 
means that we are going to have to take a hard look at how we 
deliver our programs equitably. We are going to have to 
recognize that we haven't always done a good job of giving 
people a fair chance at success, and it means we are going to 
be working hard to reduce barriers into the future.
    We are the only agency in the Federal Government with a 
specifically rural mission, and one of the keys to our success 
is the staff's commitment to that mission. Our team lives and 
breathes it. That is why when offices are understaffed or 
decades-old technology systems take extra time that could allow 
them to instead otherwise be used to reach people in rural 
places, it can take a toll on them. It can wear down staff 
morale, reduce quality of customer service, and could erode 
hard-won relationships with rural partners.
    We are going to need to keep those relationships strong to 
take on the challenges of the future, like supporting 
innovations in our food system and partnering with farmers and 
ranchers, investing in energy efficiency, renewable energy 
systems, and higher blend biofuels infrastructure, and being 
there to help people across rural America turn their vision for 
their home and their kids into a reality in the places that 
they love.
    Amidst the tremendous challenges of our time, I see hope 
and opportunity in rural America. I see businesses eager to 
build new markets, farmers forging climate-smart solutions, and 
people who have been left behind open to building new 
relationships. If we take our cue from them, I am confident we 
will do our job right.
    Thank you, and I look forward to answering your questions 
today.
    [The prepared statement of Ms. Torres Small follows:]

 Prepared Statement of Hon. Xochitl Torres Small, Under Secretary for 
  Rural Development, U.S. Department of Agriculture, Washington, D.C.
    Mr. Chairman, Ranking Member, and Members of the Committee, thank 
you for the opportunity to come before you today to discuss the state 
of the United States Department of Agriculture's Rural Development (RD) 
mission area. As each of you know well, rural America is exceptional. 
It contains remarkable economic potential, constant ingenuity, and 
impressive diversity. The Biden-Harris Administration and the U.S. 
Department of Agriculture are making once-in-a-generation investments 
in rural America and specifically rural infrastructure that have the 
potential to transform communities and lives. However, rural and Tribal 
areas also face complex challenges that require a different kind of 
investment--an investment in deep and trusted partnerships. This is 
where the Federal Government has so much opportunity before it. From 
experience, we have seen the tools that can best support rural 
communities: from flexible programs, technical assistance that make our 
programs easier to access, and customer-centered technology and 
staffing. Today I am excited to share both where I am proud of Rural 
Development's work to be a partner on the ground, and some of the 
opportunities for improvement where USDA is eager to work with Congress 
to address. Together, I believe we can--and we must--modernize Rural 
Development so it can effectively deliver on its mission of building 
inclusive rural prosperity.
    Rural America puts food on our tables, powers the nation, and 
includes the rich values, traditions, and diversity that make our 
country what it is today. In 2021 the United States set a new record in 
agricultural exports and production levels with an 18 percent increase 
over the previous year.\1\ This growth bolsters the economy as a whole 
and also sustains many rural communities with jobs both on and off the 
farm. Today, 30% of rural counties have diversified economies and are 
not reliant on any one industry for a large portion of its employment. 
This incredible diversity across local rural economies showcases the 
uniqueness of every rural community. And while many rural communities 
are thriving, many others are still struggling to keep people in the 
places they call home. Between 2010 and 2020, urban areas grew by 8.8 
percent, while rural populations declined by 0.6 percent. That decline 
grew by nearly tenfold in areas of persistent poverty, where 
populations dropped by almost six percent.\2\ Across the country we 
know that water systems are degrading, housing units are crumbling, and 
unreliable or nonexistent broadband service severely undercuts the 
ability to participate in a global economy. These challenges are only 
exacerbated in areas where there are deep economic, geographic, and 
racial disparities.
---------------------------------------------------------------------------
    \1\ https://www.usda.gov/media/press-releases/2022/02/08/american-
agricultural-exports-shattered-records-2021.
    \2\ https://www.ers.usda.gov/webdocs/publications/102576/eib-
230.pdf?v=2961.8.
---------------------------------------------------------------------------
    Often rural assets--from food to energy to natural resources--are 
taken from their place of origin and moved elsewhere to create jobs or 
opportunities away from the rural communities where they were 
originally produced. Urban areas may rely on rural ones for raw input 
and commodities, but rural communities are not seeing enough of these 
benefits in a meaningful way. Something must change or we risk losing 
rural life as we know it. The costs of failing rural America are high 
for all of us. Just a few of the top sectors in rural America--
agriculture, energy production, and natural resource extraction--
account for more than $440 billion in exports annually.\3\ The United 
States will be less competitive on a global scale if we fail to 
leverage the economic power of rural America.
---------------------------------------------------------------------------
    \3\ https://www.usitc.gov/research_and_analysis/tradeshifts/2020/
trade_by_industry_sec
tors.htm.
---------------------------------------------------------------------------
    Despite the challenges, the solutions are there in the experiences, 
stories, ideas, and dreams of rural people if you listen carefully. 
Farmers, rural business, local government officials, schools, 
hospitals, and community leaders--often time volunteers--find creative 
solutions to old problems through partnerships, regional expertise, and 
savvy every day. Amidst the tremendous challenges of our time, I see 
hope and opportunity in rural America. I see businesses eager to access 
new markets, farmers seeking climate-smart solutions to extreme 
weather, and underserved communities with a firm understanding of their 
assets who are seeking trusted partners to tackle systemic issues. I 
see the opportunity for Rural Development to work with each rural 
community to support their vision to make their home a place with good 
jobs, safe homes, and thriving opportunity for generations to come. If 
we take our cues from the communities and people who are our customers, 
I am confident we will do our jobs right.
Creating More and Better Markets
    USDA is adapting America's food system with a greater focus on more 
resilient local and regional food production, building new markets and 
streams of income for producers and businesses, and supporting the 
infrastructure that underpins rural communities. The infrastructure 
investments Congress and the Biden-Harris Administration are providing 
to rural communities via the American Rescue Plan and the Bipartisan 
Infrastructure Law as well as annual appropriations measures can be 
transformational for rural America if complemented by new market 
opportunities and capacity building efforts to help communities best 
leverage these programs to forge their own future.
    In December, Rural Development launched a program to make more than 
$1 billion in loan guarantees available to help businesses in the food 
supply chain process their products and get them to market. The new 
Food Supply Chain Guaranteed Loan Program will help meat and poultry 
processors and other food businesses that are active in the middle of 
the food supply chain: manufacturing, storage, transportation, and 
distribution. Rural Development announced new investments to 
significantly increase the sales and use of higher blends of bioethanol 
and biodiesel through expansion of the infrastructure for renewable 
fuels derived from U.S. agricultural products and will complement 
existing funding with an additional $100 million in grants in the 
coming months. Additionally, Rural Development has made $700 million 
available through the Biofuel Producer Program to provide support to 
producers who experienced market losses due to the COVID-19 pandemic. 
These investments will give consumers more options for clean energy at 
the pump, while also creating new market opportunities.
    Rural Development is also working to expand access to new markets 
by expanding access to broadband across rural America. Broadband is 
make or break for rural America, impacting small towns, communities and 
Tribal nations alike--linking rural hospitals to critical telehealth 
care, connecting businesses to international markets, and giving our 
students the tools, they need to learn remotely.
    Rural Development, in close coordination with other Federal 
partners, is working to close the digital divide in rural America, to 
meet the goal of Biden-Harris Administration to connect all Americans 
to reliable, affordable high-speed internet, and to ensure that the 
opportunities provided by high-speed internet services are available to 
all. In the first two rounds of funding, Rural Development's ReConnect 
program has provided more than $1.5 billion to 181 projects to increase 
broadband service. These projects will serve nearly 300,000 households 
nationwide. Part of the success of ReConnect can be attributed to its 
deep investment in technical assistance and administrative support for 
technology and staffing, which broadens the reach of the program to 
include the least connected communities.
    In addition, tomorrow Rural Development will close its largest ever 
application window for the third round of ReConnect program funding, 
which will provide more than $1 billion in broadband funding to rural 
communities. In the next few months, we will open the fourth ReConnect 
program application window as part of distributing an historic $2 
billion in broadband funding provided by the bipartisan Infrastructure 
Investment and Jobs Act for broadband programs operated by Rural 
Development. These investments are momentous and make significant 
strides toward closing the digital divide and ensuring that all rural 
Americans can participate in the global economy.
    As we support investment in more and better markets, we are also 
working to help communities recover from COVID-19. We have expanded 
access to COVID-19 vaccines, testing, and supplies, while strengthening 
rural health care providers, including through the $500 million that 
the American Rescue Plan provided for USDA's Community Facilities to 
create the Emergency Rural Health Care Grant Program. Thriving markets 
require a safe place to live, and Rural Development looks forward to 
supporting this objective.
Climate Resiliency
    At Rural Development, we know rural communities are on the 
frontlines of severe weather and drought that threatens their safety, 
health, and livelihoods. Utilities, small businesses, and cooperatives 
all play critical roles in rural communities and will be best 
positioned to help increase rural energy efficiency and transitions to 
clean power. By investing in climate-smart and resilient 
infrastructure, rural leaders are taking charge with the appropriate 
Federal support and flexibility to foster their success.
    Since January 2021, Rural Development invested $687 million through 
the Rural Energy for America Program (REAP) to help rural businesses 
purchase and install energy efficiency upgrades and renewable energy 
systems and has the flexibility to fund a variety of projects from 
constructing greenhouses to large-scale solar panel projects, all which 
play a significant role in tackling the climate crisis. In that same 
period, Rural Development projects greenhouse gas emission savings of 
1.4 million metric tons of Carbon Dioxide annually for the life of 
these projects. Rural Development invested more than $47 million in 
grants across 31 states to add almost a billion gallons of higher 
blends fuels to the market through the Higher Blends Infrastructure 
Investment Program. The Rural Utilities Service invested $241 million 
in renewable and energy storage loans, including 13 solar projects 
totaling $199.8 million. Rural Development is also celebrating the 10th 
Anniversary of the BioPreferred certification and labeling program by 
adding more than 270 new companies to bring the total to 3,200 
companies from 47 different countries. The biobased products energy 
supports 4.6 million American jobs, contributed $470 billion value 
added to the U.S. economy, and generates 2.79 jobs in other sectors of 
the economy for every biobased job.
    These programs demonstrate remarkable success in the fight against 
climate change while also helping cut energy costs and increase 
efficiency for producers and rural businesses. Rural residents know 
what works for them, and they know what tools they need to adapt to 
changing circumstances and build a more resilient future.
Advancing Racial Equity
    At Rural Development, we acknowledge we have not done enough to 
provide all producers, small businesses, families, and communities an 
equal chance of success and prosperity. Rural counties make up 86 
percent of persistent poverty counties and roughly half of Black and 
Native American rural residents live in economically distressed 
areas.\4\ These divides are systemic, and RD is committed to working 
intentionally to reduce disparities between rural and urban communities 
and within rural communities by reducing barriers to accessing RD 
programs and services for underserved rural communities.
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    \4\ https://www.aspeninstitute.org/wp-content/uploads/2021/12/TR-
FP-3-Rural-Capital-singles-FINAL.pdf.
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    USDA recently announced and held the first meeting of an Equity 
Commission, which is charged with evaluating USDA programs and services 
and recommending how we can reduce hurdles to accessing them. Rural 
Development is eager to support the work of the Equity Commission and 
looking forward to the Department's plans to launch an additional 
Subcommittee focused on rural community and economic development. This 
Subcommittee will directly inform Rural Development's work and help us 
aim to achieve more equitable outcomes.
    In the meantime, Rural Development is looking for creative ways to 
provide capital to communities that historically have not had these 
resources and knows that investments in our boots-on-the-ground staff 
to help communities navigate not only Rural Development resources but 
those across the Federal family that can help meet their needs is 
crucial to reducing barriers. Additionally, other ways to make programs 
easier to access like the current round of ReConnect funding which is 
currently allows Tribes and Socially Vulnerable Communities to apply 
for grant funds that do not require matching funds. Access to 
information, the ability to participate in a global economy, and 
digital learning opportunities are vital to helping dismantle barriers 
for these rural communities.
Opportunities for Improvement
    Rural Development provides community infrastructure, builds rural 
housing, and supports small businesses and entrepreneurship across 
rural America. One of the strengths of Rural Development is that unlike 
many other Federal agencies, we have a presence in the communities we 
serve through our state and area offices. With over 4,600 ``boots-on-
the-ground,'' Rural Development identifies and provides rural 
assistance that reflects the needs of local communities. Congress 
recognizes this special relationship and has entrusted Rural 
Development to invest in rural communities by increasing program levels 
each year. We are grateful to Congress for its trust in our highly 
effective stewardship of the funding and authorities they have 
entrusted to us.
    Rural Development has a wide range of tools and authorities, but 
there are ways that these programs and authorities are dated, 
cumbersome and can make it so that working with Rural Development is 
harder for communities than it should be. From providing technical 
assistance to helping communities employ proven development strategies 
and finance methods, Rural Development could be an even better partner 
to rural and Tribal communities. To that end, I am eager to work with 
Congress to ensure that Rural Development is a modern, customer-
oriented organization with the programs, tools, flexibility and skills 
that ensures Rural Development can meet communities where they are and 
offer the full scope of expertise and support rural communities' need 
today.
    Rural Development's core programs and authorities are incredible 
and impactful. But our programs are rooted in the title V of the Rural 
Housing Act of 1949, the Rural Electrification Act of 1936, and the 
Consolidated Farm and Rural Development Act. While Rural Development 
programs are often adjusted or updated, rarely are they considered 
holistically and with a comprehensive view of what it will take to keep 
wealth created in rural places in rural and Tribal communities and what 
these communities need to thrive and prosper. The 2023 Farm Bill 
presents an opportunity to take that wider view and ensure Rural 
Development is the transformational partner rural and Tribal 
communities need today.
Conclusion
    In my time leading this agency, I have had the opportunity to 
travel across the country and meet with many of the people we serve. I 
have visited states in every region of the country--in many of your 
districts meeting with the people you represent. I have been able to 
hear their concerns and their optimism about the future. I too am 
optimistic about the future and look ahead to continuing to fight for 
rural communities, and the farmers, ranchers, businesses, and families 
who sustain them.
    Rural Development is poised to meet and expand our commitment rural 
America, and with some additional tools in our toolbox that empower our 
staff to work hand-in-hand with rural communities to better access more 
flexible programs Rural Development could truly deliver best-in-class 
service and seize this moment to reimagine and rebuild an economy that 
invests in the people who make this country run. I look forward to 
working with this Committee to support this mission.

    Ms. Craig. Thank you so much.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between the Majority and 
Minority Members. You will be recognized for 5 minutes in order 
to allow us to get to as many questions as possible. Please 
keep your microphones muted until you are recognized in order 
to minimize background noise.
    I would like to start by recognizing myself for 5 minutes.
    First, on strengthening local and regional supply chains, I 
would love to address local and regional meat processing as a 
key part of resilient rural economies. Madam Under Secretary, 
you mentioned the $1 billion investment that USDA is making, 
via a Food Supply Chain Guaranteed Loan Program, made possible 
by the American Rescue Plan (Pub. L. 117-2) funds. That is in 
addition to $500 million for meat and poultry processing 
announced in July of 2021.
    How will USDA ensure that these programs help existing 
processing facilities scale up their operations via staffing 
and infrastructure investments, and how does USDA see these 
programs as complementary and not overlapping?
    Ms. Torres Small. Thank you so much, Chair Craig.
    This is a crucial issue. Of course, for farmers and 
ranchers who, in the midst of COVID-19, were trying to find 
some place to process their product and had no options. They 
had people who wanted their beef, but were going to have wait a 
year before there was a chance, there was room in the 
slaughterhouse. So, we are trying to address this on the ground 
by expanding options and building out the middle to make that 
investment.
    So, right now we have the Food Supply Chain Guaranteed Loan 
Program that has helped identify potential projects as well as 
lenders who might be eager to work with us on this issue. We 
have also announced MPPEP (Meat and Poultry Processing 
Expansion Program), which is really building that out, 
identifying middle market projects that are very close to 
completion, how can we support that last step of investment to 
get them online and operating, expanding the number of hooks 
available. And we are also eager to take on new projects, 
identifying where there are others that are more in the 
formation piece and how we can work with local lenders to 
potentially support additional projects in the future.
    So, I look forward to working with you on that, and 
certainly I want to recognize that what we are looking at now 
is how we expand the existing services so that people have 
options, so that farmers have options as do people in the 
supermarket.
    Ms. Craig. Perfect.
    Well, listen, let's turn to rural healthcare. We could talk 
about this for hours, but the Emergency Rural Healthcare Grants 
in the American Rescue Plan provided the Rural Housing Service 
Community Facilities Program up to $500 million to eligible 
applicants to expand access to COVID-19 testing and vaccines, 
telehealth services, food assistance, and the long-term 
sustainability of rural healthcare.
    Has the program been successful? Did any of the changes 
made to the existing CF Program prove successful enough to 
potentially warrant incorporation into permanently authorized 
CF programs?
    Ms. Torres Small. Chair Craig, it is crucial that we 
respond to the challenges both experienced in the midst of 
COVID-19 when it comes to healthcare, but also that rural 
America is facing as a whole when it comes to healthcare. When 
we see increasing numbers of rural hospitals closing, when we 
see challenges in workforce, and also, just people being able 
to get care close to home. We were able to, with Community 
Facilities, set up two programs to those ARPA funds, $300 
million on tract 1 and then $150 million in tract 2. Tract 1 
was immediately responding to COVID. Tract 2 is looking into 
the future and building resiliency. And we were impressed with 
applications on both fronts. In tract 2, there certainly was 
more demand than we expected. So, we are eager to continue to 
get out those awards, and certainly willing to provide 
technical assistance if it is a program you continue to be 
interested in.
    Ms. Craig. I want to end my questioning here on rural 
broadband. Can you share background on USDA's approach to the 
next round of ReConnect funding? What will the Department 
prioritize? How will it ensure that all entities, including 
local providers, have access to those funds?
    Ms. Torres Small. I was in Lewis, Iowa, the other day and 
the Mayor there remembers the exact spot on the hill that he 
used to have to go to make a cell phone call. A few months 
later, Rural Development brought in some fiber. The cell phone 
company put up a tower right next to it, and now he can call 
from his phone anywhere in Lewis. He also can operate his 
business from home. Those are the kinds of impacts we want to 
make. Our ReConnect round 3 is targeted at reaching those 
places that no one has dared to go before. It is going to take 
ingenuity. It is going to take working with new communities, 
whether it is laying ground on the sea floor to reach an island 
off the coast, or whether it is reaching Alaskan Native 
villages that you can't reach even by road.
    So, we have a lot of work to do, but we are seeing a lot of 
interest. And we want to thank this Committee for their 
foresight in investing in broadband for so long, for decades, 
that is allowing us to take advantage of this moment.
    Ms. Craig. Thank you so much, Under Secretary Torres Small. 
It is an honor to have you here.
    That concludes my 5 minutes, so I know recognize the 
gentlewoman from Minnesota, Ranking Member Fischbach, for 5 
minutes.
    Mrs. Fischbach. Thank you very much, the Chair from 
Minnesota. It is a Minnesota morning.
    Thank you again, Under Secretary for being here. I just 
want to maybe expand a little bit on the broadband issue. I 
mentioned the bipartisan bill that we passed in my opening 
remarks, and that provided a drastic increase for resources 
available to USDA Rural Development for broadband deployment in 
contrast to the just three percent of broadband funds allocated 
under the American Rescue Plan Act of 2021, Infrastructure 
Investment and Jobs Act (Pub. L. 117-58), and the proposed 
Build Back Better was for broadband programs under the USDA's 
purview.
    And so, I am just kind of wondering, the 2018 Farm Bill 
authorized a very similar program named Middle Mile 
Infrastructure Program to finance these types of projects, but 
this program has yet to be appropriated for funding. Do you 
believe that Rural Development would be better prepared to 
finance these projects and handle these projects for rural 
areas?
    Ms. Torres Small. Well, I just thank you so much for your 
focus on broadband, and in your remarks as well as Ranking 
Member Thompson's remarks, the focus on partnerships that are 
crucial to get broadband done, whether it is on a local 
community scale, whether it is in Congress, whether it is 
between agencies. And because of the Agriculture Committee's 
investment in broadband for a long time, we have the skills 
that have allowed us to stand up the programs that have been 
established for us very quickly.
    Now, in terms of what the program looks like, we will 
certainly follow Congress's lead and do what you instruct us to 
do, and we are really eager to provide technical assistance on 
any questions you might have as you do that. But thank you for 
having such a bipartisan approach to it.
    Mrs. Fischbach. Thank you very much, and maybe switching a 
little bit, switching gears.
    You mentioned funding availability for biofuels 
infrastructure and assistance related to pandemic losses, and I 
am grateful for that. Minnesota's 7th Congressional District is 
one of the top producers of biofuels in the country, and it is 
in many cases the main employer or source of economic activity 
in the town in which they operate.
    What are your thoughts regarding biofuels, not just as a 
source of low-carbon fuels, but as an economic generator in 
these rural communities, especially as we consider USDA's 
authorities and programs in the farm bill?
    Ms. Torres Small. I was in Minnesota this past winter, and 
I was just struck by the pride of the farmers and the community 
for being part of this solution when it comes to taking on 
climate change. Also, the pride of the local market that it has 
created. I talked to someone who was both a local elected 
official and a banker who saw the impact it was having on their 
town. He is also a father who was hopeful that his daughter 
will be able to stay in their hometown because of the new job 
opportunities that are available.
    I think that really speaks to exactly what you are talking 
about. I am proud that USDA has invested $700 million in terms 
of providing support for those farmers and the experiences they 
had in the midst of COVID-19, and then another $100 million to 
build up that infrastructure that is crucial to delivering that 
climate-smart fuel close to home.
    Mrs. Fischbach. Thank you very much, Under Secretary, and I 
yield back.
    Ms. Craig. The Ranking Member yields back.
    I now recognize the gentlewoman from Iowa, Mrs. Axne, for 5 
minutes.
    Mrs. Axne. Thank you, Madam Chair, and thank you, Under 
Secretary Torres Small, for joining us today. I very much 
appreciate seeing you, as usual.
    Listen, I just want to touch base on a few things, but 
first, thank you so much for your visit last November to my 
district where we announced a significant Rural Energy for 
America Program to help Elite Octane's ethanol plant in 
Atlantic, Iowa, be even more energy efficient. So, thank you so 
much for your approach to energy efficiency in looking at our 
states for that.
    After touring the plant, we had a great roundtable 
discussion with farmers and stakeholders on the benefits of 
biofuels, and how it provides a cleaner alternative to fossil 
fuels and is a significant driver of economic opportunity in 
Iowa. At the end of the day, supporting rural communities is 
one of my top priorities in Congress, and so, I have been laser 
focused on making sure that these issues, including rural 
broadband, which, of course, USDA plays a key role in, is where 
I would like to direct my first question.
    So, I appreciate the efforts of the USDA to ensure forward 
looking speed standards in the latest round of ReConnect 
funding. Given the record $65 billion investment in broadband 
in the bipartisan infrastructure bill, as well as funds from 
the American Rescue Plan invested in broadband deployment 
across the country, which includes $200 million in Iowa, and 
then, of course, I am very familiar with a lot of funding we 
have in Iowa at the state level as well. I am wondering, how is 
the USDA working to coordinate broadband efforts across 
multiple levels of government to make sure that these best 
practices are shared and we use the money effectively and 
efficiently. As something we have been talking about in Iowa, 
quite honestly, for a long, long time, I am glad we are going 
to get this done, but I want to make sure that we get the 
biggest bang for our buck, and I am hoping you can shed a light 
on how that coordination will work.
    Ms. Torres Small. That is such an important question, 
Congresswoman Axne, and what we are seeing in our conversations 
so far is just the importance of making sure that there are 
partnerships when it comes to broadband. It is about 
coordination, but even more importantly, it is about truly 
partnering with our Federal agencies on the ground.
    And Rural Development has a lot to bring to that 
partnership. We have the long tenured experience in broadband 
because of the foresight of this Committee. We have the new 
option to include grants in those applications, as well as to 
waive some of the matching requirements that we are able to do 
in this most recent round. We also have expertise working in 
some communities that we can really bring to the table, whether 
it is working with NTIA on some of the assistance when it comes 
to Indian Country, whether it is getting that on the ground 
detail, the granularity that we require for our projects, which 
is house-by-house, to then supply information as we work 
towards better maps.
    So, Rural Development has a lot to bring to the table when 
it comes to coordination, and we are doing that robustly. 
Whether it is weekly meetings at the White House, whether it is 
staff level communication about the timing of announcements, or 
making sure that we are keeping an eye on places where 
announcements have been made, for example, in RDOF and FCC, 
making sure that we will be then communicating with the states 
as they receive their money from NTIA.
    So, there is a lot of work to be done. There are a lot of 
people who have different expertise that they are bringing to 
the table, and Rural Development is very proud to be part of 
that.
    Mrs. Axne. Thank you so much for that, and listen, if there 
is anything that you want to communicate to us Members as you 
move this forward, I very much appreciate it because to me, 
getting this done is so important. Iowa falls bottom of the 
barrel when it comes to connectivity, so thank you for that.
    Now, I want to move on to housing. Of course, USDA supports 
housing in rural areas. While in the future, I hope to see more 
investment in these programs to alleviate housing shortages 
that are, quite honestly, holding back rural communities over 
the long-term, I am just curious right now about the process 
and support for residents who are already there in existing 
housing supported by USDA. In Iowa, unfortunately, I have heard 
of reports of mismanagement, lack of maintenance, and some 
other illegal actions by Truverse, which is a property 
management company that receives USDA support.
    So, can you describe the rights renters in USDA properties 
have as far as in terms of upkeep of the property, as well as 
oversight that the USDA does, and if the USDA needs additional 
resources or abilities to fulfill and support the protection 
that those renters need?
    Ms. Torres Small. Congresswoman Axne, thank you for your 
focus on this. It is a crucial issue. Rural Development 
operates a large number of housing. So, you often think of HUD 
when you think of housing. We have about \1/3\ of the same 
stock in rural communities specifically, which is crucial.
    To get to your point, we are committed to making sure that 
tenants living in places that have received USDA loans do have 
the support that they need. We have been responsive in terms of 
making sure that there are new ways to issue a complaint, for 
example, and we have been working with Iowa Finance Authority 
to address some of those concerns. I really appreciate your 
role in raising these issues, and look forward to continuing to 
work with you and your team to make sure that we are addressing 
these concerns, because it is crucially important as we think 
about housing in rural America. It is one of the key building 
blocks to make sure that people have a good life, and we work 
hard to make sure that people living in those facilities only 
pay 30 percent of their income for housing through some of the 
subsidized assistance that is available through Congress. So, 
we will work to continue to do that.
    Mrs. Axne. Thank you. I yield back.
    The Chairman [presiding.] Thank you. I also want to thank 
Congresswoman Craig for filling in, I appreciate that. And I 
now will recognize Ranking Member Thompson for 5 minutes.
    Mr. Thompson. Thank you, Mr. Chairman. Madam Under 
Secretary, I want to thank you for your recent response to our 
letter regarding the substantial changes to the ReConnect 
Program. And one of the questions I had was how you decided to 
advantage nonprofit applicants over for-profit applicants, 
since that so clearly broke with the long-standing operation 
and precedence of the program. And unfortunately, I was puzzled 
and somewhat unsatisfied with your response, as it seemed to 
point to a priority within an unrelated and much older 
provision in the Rural Electrification Act to justify the 
Department's current actions in implementing ReConnect. I think 
if you had talked with us before making this drastic change, we 
would have been happy to clarify that Congress has always 
wanted to encourage as many options for rural residents as 
possible, and doesn't believe that any type of broadband 
provider was more deserving of assistance than another.
    I think, actually, that is why USDA--we are always very 
proud--has been more effective at bridging the digital divide, 
than--quite frankly, some of the other agencies within the 
Federal Government. So, I hope we are not falling into some of 
the bad habits that have made some of these other agencies less 
than effective at bridging the digital divide.
    In my opening statement, I noted that we want to work with 
you to address the needs of rural communities, but are 
frustrated at the many times that we have been excluded--this 
was one issue in Rural Development, but there have been others 
in other parts of USDA recently, from major policy changes 
until the--really excluded until the very last moment. 
ReConnect round 3 is just one of those examples. I would just 
ask that, just request that you please talk with us. We want to 
work with you before you embark on major policy changes. These 
changes have consequences, and in the future, and particularly 
as you undertake ReConnect round 4, can you assure me that you 
will talk to us about any major programmatic and policy 
changes, before they get set in stone?
    Ms. Torres Small. Ranking Member Thompson, I deeply 
appreciate your focus on broadband and how we can deliver it as 
appropriately as possible. Thank you for your very detailed 
letter addressing some of your concerns, and we look forward to 
continuing to work with you.
    It is certainly, as we take on this next step, which are 
going to be some of the hardest projects, we are looking to 
bring in as many potential partners as possible, and to that 
point of coordination, one of the pieces that we see as one of 
our strengths is relationships with rural electric co-ops that 
potentially we can help bring to the table.
    And so, in setting up this small percentage of voluntary 
points as a way to try to get more people to be at the table 
solving problems, we are hopeful that this will just create 
more options for communities that may not necessarily otherwise 
have folks who are looking to serve their area.
    Mr. Thompson. On the broadband area, obviously there was 
discussions previously about the great bipartisan work that 
this Committee did. Last summer with Chairman Scott, we worked 
on a bipartisan bill, passed unanimously. It really bridged, if 
not all, most of the digital divide, would have created a 
circuit rider program like we see with rural water. We have 
done that for broadband. It would have provided a competitive 
grant program for mapping. And unfortunately, we cannot get the 
Democratic leadership--and this is a frustration I share with 
Chairman Scott. We have worked on this hand-in-hand, actually, 
to try to get Democratic leadership in the House to bring it to 
the table.
    So, I would just ask--and I know Chairman Scott would 
appreciate this as well--any help that you and USDA could do to 
influence the Democratic leadership in the House to bring this 
very strong bipartisan bill to the table would be greatly 
appreciated. I know rural America would benefit from it. What 
was passed in the infrastructure bill, $2 billion to USDA. With 
inflationary costs, it is not going to go very far. We need to 
bridge the digital divide in rural America to give rural 
Americans access to what they need to have today. If we would 
have taken the same disjointed approach back in the 1930s to 
electricity, I think some of our communities--probably the 
community I live in--would still be in the dark. But, I would 
appreciate that.
    I would also, just real quickly on the meat processing 
assistance, I support the notion of diversifying and enhancing 
processing capacity. I think that is an approach I certainly 
appreciate.
    Any brief comments on the level of interest that you have 
seen in the Food Supply Chain Guaranteed Loan Program, and the 
projected timing of awards, or the types of projects that may 
be coming forward?
    Ms. Torres Small. It has been a great opportunity to extend 
conversations with new lenders who might be interested in 
supporting expanding the food supply chain, and specifically in 
meat marketing. And so, we are working on that, recognizing 
that with a guaranteed program, our partners are the lenders, 
who are then working to build those projects. So, as we work to 
educate about that program, we are also working to make sure 
that they are aware of the additional opportunities that will 
be out there in the future, and it has provided a chance for us 
to work more in an area that allows farmers and ranchers to 
build local markets, and diversify their work.
    Mr. Thompson. Very good. Thank you. Thank you, Mr. 
Chairman.

OPENING STATEMENT OF HON. ANTONIO DELGADO, A REPRESENTATIVE IN 
                     CONGRESS FROM NEW YORK

    The Chairman Thank you. I will now recognize myself for 5 
minutes.
    First, let me just say it is good to see you, Under 
Secretary. I appreciate you taking the time to be here today 
before the Committee, and I am looking forward to being able to 
talk a bit more here about rural economic development and the 
program initiatives that we think we can build upon moving 
forward.
    Let me say, it is important to understand as someone that 
represents the eighth most rural Congressional district in the 
country that figuring out how to have robust regional rural 
economic development resources is of utmost priority for me. As 
we recover from COVID-19, rural communities need access to 
targeted resources. That is why I introduced the Rebuild Rural 
America Act of 2021 (H.R. 2361), which delivers resources 
directly to counties, towns, and villages to address issues 
like food insecurity, high unemployment, or a lack of rural 
broadband. The key components of the program being that it 
provides non-competitive, multi-year and flexible funding to 
support the growth of our local rural economies. It would 
remove, also, bureaucratic hurdles and ensure the USDA staff 
are available for technical assistance, capacity building, and 
oversight.
    Could you please talk to me about existing rural economic 
development programs, specifically the Stronger Economies 
Together, and the Strategic Economic Community Development 
Program? What are some characteristics of these two programs 
that have been effective, and how can we build upon the 
resources that have been provided by these programs to ensure 
Rural Development staff and rural communities are working 
together to develop plans for rural economic growth and can 
access funding to support these plans?
    Ms. Torres Small. I so appreciate--Chairman Delgado--thank 
you so much for the chance to be here, and I deeply appreciate 
your comment about how we can make sure that Rural Development 
staff is on the ground and working together with the 
communities, because those really are the two sides of the same 
coin in terms of the partnerships that we have to forge to 
address this.
    And so, as we look at your legislation and recognizing 
there were similar related proposals in the Build Back Better 
legislation, that focus was on building that community 
capacity. One of the great ironies of the approach that we have 
seen is that so often, money goes to cities through CDBG 
grants, that goes directly there. But for rural communities, 
they have to compete for those funds. And so, certainly 
recognizing your effort to address that and to support 
community capacity.
    The other side of the work is making sure that we have 
Rural Development folks on the ground, like the person I spoke 
about in my opening statement, making sure that there are 
experts in the community. So, not just in the projects and the 
programs and the loans and the grants and all of the 
requirements for the application, but also in knowing the 
people on the ground, and that is the other side of the coin. 
We need both of those in order to reach places that we haven't 
been able to reach before.
    The Chairman. And just to make sure I understand, those two 
pieces that you have highlighted in terms of community capacity 
and folks on the ground, when you think about the two programs 
I mentioned, the Stronger Economies Together and the Strategic 
Economic Community Development Program, are those key 
components of those two programs, or are there other types of 
aspects? Could you speak specifically to those two programs?
    Ms. Torres Small. Sure. So, something we are continuing to 
work with your office on, identifying what are the benefits and 
how do we take them into the future? And as we look at the farm 
bill, as we provide technical assistance for you, I think it 
will be about pulling out what works in those programs and how 
we take that into the future.
    The Chairman. Yes. Just one little follow-up here. Can you 
commit to working with us to identify opportunities to support 
comprehensive regional development planning efforts, and ensure 
we are providing rural communities with technical assistance 
and access to flexible use funding?
    Ms. Torres Small. I can.
    The Chairman. Excellent. Well, we will certainly continue 
to work with you on that as you move forward, and again, thank 
you very much for your time and testimony today.
    And with that, I will now recognize Representative LaMalfa 
for 5 minutes.
    Mr. LaMalfa. Hi. Am I on?
    Ms. Torres Small. Hi.
    The Chairman. Yes, you are on.
    Mr. LaMalfa. Okay, good. Thank you. It is hard to hear 
here. Thank you. I appreciate it, Mr. Chairman, and Under 
Secretary, good to see you--or should I just say, Xochitl, it 
is great to see you, ma'am. It is awesome. It is great to have 
you in this position here, so I appreciate you.
    Let me launch into a couple things here. The issue that GT, 
I mean, Ranking Member Thompson touched upon it a minute ago, 
but I want to take it a little further.
    ReConnect round 3, what we are finding is that the groups 
that are availing themselves to the funding--I am not doing 
very good right now. Anyway. They are trying to access this 
program, right, generally has been with municipal or nonprofit, 
but we are finding is that--I have some very small companies up 
in my district as well that do happen to be private companies. 
They don't fit the other categories, so I guess with the points 
system, the preference points is they are left out because they 
don't score as many points on the scale. But the policy of USDA 
is supposed to not really discriminate against them in that 
sense because they are the only game in town in these very 
rural areas too that we are talking about. So, can we take a 
further look at that and see that the points system--that that 
scale does not harm them just because they might happen to be 
privately held companies?
    Ms. Torres Small. Congressman LaMalfa, I really appreciate 
your efforts to make sure that we are reaching every community, 
and communities that have been unserved or underserved, making 
sure that we have the right partners at the table.
    Mr. LaMalfa. Thank you.
    Ms. Torres Small. When it comes to the voluntary points 
system, we were thinking very intentionally about how we bring 
new partners to the table, but also recognizing that there are 
a lot of different ways we want people to distinguish their 
projects. So, whether that is making sure that you are reaching 
vulnerable communities, socially vulnerable communities, the 
most rural, least dense places, that is another way to receive 
priority points. The places with the lowest connection, under 
25/3, for example, is another way to get everyone at the table 
and to distinguish your application.
    So, the cooperative or local government piece is 15 points 
out of a total 150 points that allow you to distinguish your 
applications. There are lots of ways to build a great 
application, and we are eager to work with folks on the ground 
in California to make sure that they are finding those ways to 
do that.
    Mr. LaMalfa. Is it possible, then, to have it looked at as 
if they are the game in town, we are talking extremely rural 
areas between mountain ranges and such. The points scale, there 
isn't a way for these barely connected areas to have any other 
way to do it. So, I guess, is it possible to put aside that 
part, because that is it. It is either they are in or they are 
out. You know what I am saying?
    Ms. Torres Small. So, there is $1.15 billion available in 
this round. There will be another $2 billion available, a 
little bit less than that, thanks to the bipartisan 
infrastructure law, and so, we expect that we will be working 
with different partners depending on who is, like you said, on 
the ground in those areas and we are eager to work with them as 
we continue to distribute these funds.
    Mr. LaMalfa. Sorry, I'm [inaudible].
    On one other point here, too, is that the opioid crisis in 
rural areas has been a tremendous issue, but it has been kind 
of put aside by COVID. And so, what we are looking at is that 
in these rural areas, it still needs to be addressed, as 
always, and we realize that. But what can you tell me about the 
focus of USDA in rural issues with the opioid, picking that 
back up after the tremendous issues with COVID waning here, but 
still the opioid problem we have? What are we looking at there? 
How can we emphasize more of that work?
    Ms. Torres Small. Congressman LaMalfa, thank you so much 
for asking that question. It is absolutely true that we have to 
continue to take on the challenges of the opioid crisis, and 
you are right to put it in the context of COVID-19. In the 
midst of COVID-19, we saw deaths related to opioid overdoses 
increase in a way even beyond what we had seen before. And so, 
as we are coming out of this crisis as CF, the Community 
Facilities Grant Program and Loan and Guaranteed Loan Program 
has shifted from standing up these new programs to address 
COVID-19. We are also eager to work to continue to identify 
projects and opportunities to deal with the opioid crisis.
    Mr. LaMalfa. Thank you, I appreciate it. Good to see you.
    I will yield back my time.
    The Chairman. Thank you.
    I now recognize Representative Kuster for 5 minutes.
    Ms. Kuster. Thank you so much, Chairman Delgado, and I have 
to say, I could not ask for a better bipartisan transition, Mr. 
LaMalfa. As the chair of our bipartisan Addiction and Mental 
Health Taskforce, I very much look forward to working with you 
to transition from the post-COVID era to renew our attention to 
addiction in rural America.
    I want to give a warm welcome to our good friend Under 
Secretary Torres Small. Welcome back to the Agriculture 
Committee. It was such a treat to have you in New Hampshire 
last December and to show you the key role that USDA Rural 
Utilities Service loan programs play in the growth of the solar 
energy infrastructure in the Granite State.
    And as you saw during your visit, USDA Rural Development 
programs across the board have a tremendous impact in my state 
with broadband, water, energy, housing, and beyond. We look 
forward to the reauthorization of the farm bill in 2023. It is 
a great opportunity to take stock of how we continue to 
strengthen our farms and our rural communities.
    And with that in mind, I want to begin by asking about the 
Value-Added Producer Grants. In 2020, I led bipartisan 
legislation to temporarily waive the matching fund requirement 
for participation in this program in light of financial 
challenges related to COVID-19. Ultimately, we were able to 
secure a significant reduction for the matching requirement. I 
believe this value-added program will only grow in demand as 
small family farmers and producers seek to diversify their 
products and make connections with local consumers. This is a 
win/win for both ends of the food supply chain.
    Madam Under Secretary, could you comment on the impact you 
have seen this program have as we emerge from the pandemic, and 
are there steps that we can take to ensure that small farmers 
can continue to participate in this program?
    Ms. Torres Small. Congresswoman Kuster, thank you so much 
for your work on the Value-Added Producer Grant. It is one of 
the most popular things that we do, which is helping farmers 
and ranchers take a product and find ways to infuse more value 
into that product. Often, it also means opening up more and 
better markets, which as we have seen in the midst of COVID, is 
exceptionally crucial for our food supply chain resiliency.
    I have seen on the ground how farmers are working to get 
more greens to local grocery stores because of Value-Added 
Producer Grants. I have seen that that connection that I think 
we can talk about more in terms of connecting rural communities 
to urban communities, and how we are truly feeding America. So, 
I think there is this great opportunity for Value-Added 
Producer Grants. I have also heard them talked about in the 
context of meat processing, whether it is cold storage, whether 
it is making sure we are using all of the byproducts available, 
to create value out of that. So, I think it is one of the most 
popular programs, and I certainly appreciate your interest in 
it, and I am happy to provide technical assistance as you look 
at that further.
    Ms. Kuster. Well, it is so important to boost the rural 
economy and particularly with the rising energy costs, it just 
seems a complete waste of consumer dollars to be trucking our 
food halfway across the country, when it could be grown in the 
community right where people live.
    Switching gears, I want to return to the topic of the day, 
rural broadband. As you know, we are excited that several 
communities in New Hampshire received a loan for broadband 
build-out through the ReConnect pilot program last year, but as 
millions of Americans still don't have reliable broadband 
access, including 13 percent of New Hampshire farmers, I am 
concerned to hear that broadband funding has sometimes been 
used to overbuild existing broadband networks instead of 
bringing the benefits of broadband to areas with no service. 
Would you agree that the priority for broadband funding in 
programs at the USDA should be on areas currently without any 
broadband, and if so, what steps are you taking to make sure 
that the ReConnect funds prioritize those communities with no 
broadband?
    Ms. Torres Small. So, one of the steps that we have taken 
when it comes to making sure that we are reaching places that 
are unserved right now is included in that priority system, 
priority points. The largest number of priority points 
available for serving unserved areas, which is defined as less 
than 25/3. So, we see an incredible opportunity to reach those 
places, and frankly, Rural Development has been one of the most 
successful in terms of reaching those places because of our 
experience working in rural communities.
    I am also really glad that you brought up farmers and 
access on farms as one of the challenges. I was in Virginia 
earlier--actually, late last year, and a farmer came up to me 
and he said thank you so much for increasing the required 
build-out speed to 100 up, 100 down. I want to expand my work 
in precision ag. I want to be a contributor when it comes to 
using climate-smart technology, and it is going to take having 
that connectivity to make that happen. So, that is another way 
that we are working to both reach the unserved places now in 
terms of those priority points, and then also to make sure that 
rural communities aren't stuck in a slow lane, because this 
isn't just about now. It is about how do we make sure that 
these are great, thriving rural communities into the future.
    Ms. Kuster. Excellent. Well, my time is up. I am going to 
submit for the record my final question on the Healthy Food 
Financing Initiative, which has been really helpful for 
immigrant and refugee farmers in New Hampshire.
    But I yield back, Mr. Chairman, and thank you again for 
having the Under Secretary. I think she is an outstanding 
member of the new Administration. Thanks so much.
    The Chairman. Thank you.
    Now I would like to recognize Representative Cammack for 5 
minutes.
    Mrs. Cammack. Thank you to the Under Secretary for your 
presence here today. I appreciate your testimony, as well as my 
colleagues and your questions. This is an incredibly important 
issue. I think COVID highlighted precisely the need for high-
speed reliable affordable internet across America, and 
certainly in rural America, be it for telehealth, for commerce, 
or for education.
    I represent a largely rural district in north central, 
northeast Florida, and we have children who do their homework 
in a Hardee's parking lot. We have government entities that 
cannot open their doors because of restrictions from the 
Federal Government and can only serve via telehealth or a 
telework model. But because of the lack of internet 
connectivity, we are not able to take advantage of those 
resources. So, my constituents are in kind of a Catch-22.
    So, I know that I am not alone in this. Constituents across 
America are in this. But I have a real concern about 
overbuilding, and the relationship between USDA and FCC. So, if 
you look at the FCC's current definition of unserved, that is 
an area that is lacking speeds of 25/3 megabits per second. 
Now, the definition also describes communities throughout my 
own district where even minimal broadband service is 
unavailable, leaving entire communities behind.
    Secretary Vilsack recently announced that USDA would fund 
projects capable of serving 100/20 megabits, including areas 
that were already receiving funds from the FCC's Rural Digital 
Opportunity Fund, the RDOF auction, to serve areas at speeds of 
25/3.
    Now, I am concerned that we have multiple providers in the 
same area that are going to use federally subsidized 
overbuilding to deploy broadband, which really doesn't make 
economic sense. It is not good use of taxpayer funds. So, how 
are we going to prevent overbuilding in these areas while still 
leaving areas that aren't touched by the RDOF auctions and by 
the ReConnect Program? How are we going to address this?
    Ms. Torres Small. Congresswoman, thank you so much for your 
advocacy for the rural communities and the people that you 
serve, especially when it comes to people who do not have good 
reliable internet right now. It is a priority of USDA Rural 
Development to make sure that we are reaching those unserved 
communities. We have the same definition of 25 up, 3 down as 
unserved, making sure that we are reaching your constituents. 
And that is why the--in the priority points we have identified 
50 points out of 150 are specifically for that unserved 
population of 25 up, 3 down. Additionally, if they are a very 
sparse population, if they are really rural, that is another 
set of priority points.
    So, we know how crucial it is to be able to prioritize 
those projects, and we know how crucial it is to make sure that 
rural communities aren't stuck in the slow lane for the rest of 
time, right? This is an investment not just for now, but also 
into the future. So, making sure that we have a backbone that 
will be able to compete on the speeds that we see is crucial, 
because we certainly saw in the midst of COVID with your kids 
who are sitting in the Hardee's parking lot that 25 up, 3 down 
isn't enough for them to be able to listen to their teacher and 
learn from home. And so, we want to make sure we are building 
out to where it is enough for them to compete on the global 
marketplace.
    Mrs. Cammack. So, in the time I have remaining, I just want 
to do a quick follow-up on that.
    So, under the RDOF--and I know this is more the FCC side--
it prohibits these entities, these Census tracts, these 
municipalities, once they have been auctioned off to 
participate in other programs, but so many of these areas would 
fall or qualify for USDA. Are there conversations ongoing with 
FCC and your office about how we can navigate this? Because 
under that FCC guidance, there is 10 years to deploy the 
service. We can't afford to wait 10 years.
    Ms. Torres Small. So, there absolutely are conversations 
ongoing about how we coordinate between RDOF and ReConnect 
Programs. We are considering projects at a very granular level. 
What does this look like on the ground? And that is something 
that in this round, we started to do. So, we are looking very 
specifically at how an application would impact current RDOF 
places, and making sure that we recognize building out is going 
to take construction time and beyond, and making sure that 
whatever decisions we make, they are in coordination across the 
Federal Government.
    Mrs. Cammack. Excellent.
    Thank you, and I yield back.
    The Chairman. Thank you.
    I now recognize Representative Feenstra for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Delgado and Ranking 
Member Fischbach.
    Under Secretary Torres Small, my district is extremely 
rural and the lack of broadband connectivity is a huge issue 
for my constituents, like we have heard a lot of others talking 
about. Rural Development oversees the ReConnect Program, which 
most recently received $2 billion through the Infrastructure 
Investments and Jobs Act. This money is in addition to the over 
$1 billion the ReConnect Program has already been appropriated 
in 2019.
    I am wondering, are you coordinating with the FCC, and do 
you intend to utilize their maps when distributing these new 
broadband funds? If not, why not?
    Ms. Torres Small. Thank you so much, Congressman, and 
really for your focus when it comes to good reliable internet, 
it is crucial and it is crucial that, a theme of this 
conversation is about partnerships. It is about what can we all 
bring to the table to solve this problem? And what I have seen 
is that that takes partnerships on the ground, and it takes 
partnerships in the Federal Government.
    And so, we have been working hard to make sure that we are 
bringing our best to the table, and that is our long-tenured 
experience working in rural communities, working with different 
kinds of potential providers. Our experience in Indian Country 
that we have been able to use with NTIA, for example, as they 
do some of that outreach, and also, our experience of very 
granular applications.
    Mr. Feenstra. So, are you planning to use the maps? Will 
you be using the maps or not?
    Ms. Torres Small. So, we are supporting better maps through 
our granular assessment of applications. So, we are legally 
required to look further than the maps currently look when it 
comes to identifying places served. We have a robust process 
where you--if there is a question about whether or not there is 
service, the person who is claiming that they are providing 
that service will have to respond and demonstrate that service, 
and then that information goes back to NTIA and FCC as they 
continue to build out their maps.
    So it is, certainly, one aspect of an application that we 
look at, but we go deeper and then we communicate that 
information back to the FCC and NTIA.
    Mr. Feenstra. Okay. So, my question is I have a lot of 
rural telcos in Iowa, and obviously, they want to participate. 
They want to be part of the ReConnect Program, and obviously, 
they rely on the maps and the maps are very important, simply 
because if somebody horns in on their area, all of a sudden the 
local telcos are X'ed out. They don't have a chance. So, how do 
we move forward with this concern?
    Ms. Torres Small. That is a really good point, that there 
are telecom providers that are relying on the maps that are out 
there. I would say there are also people who are in those areas 
where it says they are covered and they are not, and we want to 
make sure that they have access to good reliable internet. So, 
the maps give us a chance to look at an area, and then identify 
what truly is served and not, and identify projects based on 
that. That is a legal requirement from the Rural Development 
side, but I am happy to coordinate with you and your team 
further as you identify potential challenges.
    Mr. Feenstra. Yes, this is, to me, a really big topic 
because what we have seen in Iowa is you have a big national 
company or somebody that says, ``Hey, we are going to come in 
and provide you with broadband,'' and it really doesn't happen 
or it doesn't have the upload/download speeds. Whereas our 
rural telecommunications that have invested a lot of dollars 
into rural areas are not getting a chance, and this really 
concerns me. All I want is the best broadband possible for all 
these districts, and I sometimes think that we are down this 
path of one size fits all, and I am here to say, can we work 
together on this?
    Ms. Torres Small. I think we can absolutely work together. 
Rural Development lives and breathes the motto one size doesn't 
fit all. That is why we have regional folks who are reviewing 
the applications who know the partners on the ground. That is 
why we do look beyond the maps and look at the specific people 
and whether or not they actually have service, and that is why 
we have built this set of priority points so the people can 
cobble together different types of projects that answer the 
specific challenge on the ground, like the constituents in Iowa 
that you represent.
    Mr. Feenstra. Well, thank you so much.
    I got just a little bit of time left. Under Secretary, the 
USDA's BioPreferred Program has proven to spur economic growth 
and job creation. Through its creation in the 2002 Farm Bill, 
and the expansion in the 2014 Farm Bill, how has this program 
achieved its mission to develop and expand biobased products? 
Again, this is very big for Iowa and I would like to know, what 
recommendations do you have for the BioPreferred Program?
    Ms. Torres Small. Yes. Biobased products are definitely 
exciting. It is where you take what could have otherwise been a 
byproduct and turn it into a product itself. Just a small fact, 
we used biobased utensils at my wedding, so we certainly know 
that it is an opportunity for the future.
    The biobased BioPreferred Program that you are talking 
about helps identify to the Federal Government and to 
purchasers that there are these products out there. It can also 
support those markets, and we look forward to working with you 
more to make sure that we are giving you the information you 
need to get this done.
    [The information referred to is located on p. 205.]
    Mr. Feenstra. Thank you so much for your comments, and I 
yield back.
    The Chairman. Thank you.
    I now recognize Representative Balderson for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman.
    Madam Under Secretary, thank you for being here today. It 
is good to see you.
    One of my concerns with these Federal dollars, and 
specifically, with the ReConnect Program, is overbuilding. As 
you are probably aware, the IIJA redefined eligible service 
areas for the ReConnect Program from 90 percent of households 
underserved to 50 percent. Other IIJA broadband programs, such 
as those administered by the NTIA, have an 80 percent 
underserved threshold.
    My first question has two parts. Would you support raising 
the unserved threshold from 50 percent to at least 80 percent 
in order to be in line with the IIJA programs?
    Ms. Torres Small. Thank you so much, Congressman Balderson. 
It is wonderful to see you, too. We will certainly do what 
Congress tells us to do, and we have shown our ability to do 
that with the different instructions based on the different 
amounts that have been allocated to ReConnect through CARES and 
then through other Acts, and then we will continue to adapt to 
that.
    One of the things that we have seen is that often, 
companies are trying to cobble together projects that will 
pencil out, and so, that means reaching unserved people, but 
sometimes in places that are also surrounded by a little bit 
more coverage. And so, it will be interesting to see with the 
bipartisan infrastructure law how that impacts the type of 
projects that are presented. And we are happy to work with you 
to provide information in the future about that.
    Mr. Balderson. All right, thank you very much.
    And how does the USDA plan to avoid overbuilding the other 
federally qualified projects when the USDA is operating under 
different standards than the NTIA?
    Ms. Torres Small. I mentioned earlier just the impact that 
building to 100 up, 100 down can have for farmers when they 
want to be part of the solution when it comes to precision ag, 
especially with increased droughts that we are seeing, for 
example. And so, recognizing that we want to make sure we are 
building to the needs of the future, not the past, and with 
COVID-19, we certainly saw that 25 up, 3 down is the past.
    And so, we are committed to prioritizing those places that 
don't have that service now, but also recognizing we need to 
look at what it is going to take to have a vibrant rural 
community in the future.
    Mr. Balderson. Okay, thank you very much.
    My next question is, and I agree with your statement that 
broadband is a make-or-break issue for rural America. To that 
end, when USDA makes an award under its ReConnect Program or 
issues some other funding support to expand broadband, what 
steps does the Department take after the fact to measure that 
the promised service is being delivered?
    Ms. Torres Small. That is a really great question, and we 
will follow up with more details on it as we continue to make 
new awards when it comes to ReConnect and the current 
investments now. But part of the Rural Development's special 
sauce and its expertise is people on the ground, it is the GFRs 
who know those providers, and so, we are available when there 
are concerns. People who are expressing, ``Hey, they say we are 
being served but we are not really,'' and being able to verify 
whether or not that claimed service is truly existing.
    [The information referred to is located on p. 206.]
    Mr. Balderson. Okay, thank you. I look forward to that.
    My last question is: broadband availability is critical in 
rural America, not just at home and in school, but also in the 
field as our farmers adapt precision agriculture solutions. 
Unfortunately, most broadband performance data is focused 
either on buildings that have fixed connections, or on roads 
where wireless connectivity can be mapped through drive 
testing. But with this enhanced focus on precision agriculture, 
we are missing a key element. Would you consider partnering 
with broadband measurement companies to collect better data 
about wireless broadband availability over arable lands?
    Ms. Torres Small. We absolutely need to use tools to find 
out--have more precise identification of where broadband exists 
and where it doesn't, and that is especially true when it comes 
to Rural Development that has to have more specific information 
for its awards. So, we would certainly love to follow up with 
your team about the research that you are talking about, and 
recognize that we also have a pretty--a catch-all system in 
terms of identifying what places are claimed to be covered, 
then verifying that they are covered, requiring the company 
that is claiming that to show that, and then if necessary, 
testing on the ground. But we would love to see if there are 
other ways to address that.
    The Chairman. Thank you, and I recognize Representative 
Schrier for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and welcome, Under 
Secretary Torres Small. It is wonderful to see you, and I want 
to thank you for taking the time to visit my district a few 
weeks ago. We loved having you there.
    Today, I would like to focus on how USDA Rural Development 
programs can help the development of a strong wood products 
industry, and specifically, I would like to focus on one 
pending application to the Business & Industry Loan Guarantees 
Program that is crucial to my home State of Washington. So, I 
would love for you to give full consideration to the X-Caliber 
Rural lending applications to the USDA's B&I Program for the 
construction and development of projects to create the 
Darrington Wood Innovation Center, which will actually house 
three separate entities. Together, they will enable the 
Darrington Wood Innovation Center to develop a mass timber 
production facility and serve as a truly one-of-a-kind hub for 
innovation in wood product manufacturing. So, this will bring 
high quality jobs back to a rural area in need of investment 
and economic revitalization. The center represents a new model, 
really, for the future of the nation's wood product industry by 
focusing on cross-laminated timber, which encourages long-term 
forest management, that improves forest health, reduced 
wildfire risk, all while sequestering carbon, creating family-
wage jobs, and providing materials that will lower the cost of 
housing.
    And for the past 5 years, the Town of Darrington in 
collaboration with private industry and nonprofits and other 
community stakeholders has really pioneered the development of 
this new rural industrial manufacturing complex. This effort 
has already attracted $6 million in grants from the Economic 
Development Administration, and $2 million in grants and loans 
from Washington State, with more state funding likely on the 
way.
    So, it has broad support and this first phase involves the 
construction of a cross-laminated timber plant, modular 
fabrication facility, and remanufacturing sawmill and kiln 
facility. These projects are seeking bids now, and they are 
ready to go as soon as possible. So, this is a priority in 
Washington State, and is fully in line with the purpose of the 
B&I Program, and I strongly support the application and hope 
you to give it strong consideration.
    As you know, Madam Under Secretary, communities in my 
district and throughout Washington State are at extreme 
wildfire risk, and approximately 3 million acres of forestland 
is in need of restoration and resiliency. So, developing this 
strong wood products industry represents a unique opportunity 
to create wages, revitalize a community, make our forests 
healthier and resilient, reduce housing prices, and increase 
carbon sequestration long-term.
    I was wondering, Under Secretary Torres Small, just how you 
think about USDA's Rural Development programs and how they 
might be able to support the development of the wood products 
industry in Washington State and around the country?
    Ms. Torres Small. Congresswoman Schrier, thank you so much 
for your work for Washington State, for your support in finding 
innovative solutions like when it comes to wood products. We 
certainly are aware of just how much support this one project 
has across the board, and I know that my team has been in close 
communication with your team about that. We certainly recognize 
that level of support and appreciate your passion for your 
community.
    We do have some statutory requirements that we have to 
evaluate when it comes to the B&I Program. When it is one 
project, if there are co-borrowers, you can't borrow more 
than--I think it is $20 million. So, certainly we will continue 
to keep in close contact with you and your team about how this 
may or may not impact this project.
    Ms. Schrier. Thank you very much. I really appreciate your 
attention to it, and calling that to my attention so I can 
address it on our end.
    I want to thank you for being here, congratulate you on 
your position, and I yield back.
    The Chairman. Thank you.
    I now recognize Congresswoman Plaskett for 5 minutes.
    Ms. Plaskett. Thank you very much, Mr. Chairman. Thank you 
for this hearing. I am especially glad to see Under Secretary 
Torres Small with us. We know the tremendous work that she did 
as one of our colleagues, and we know that she is going to 
bring that same energy and dedication to the role that she has 
now.
    Under Secretary, one of the areas, of course, as you can 
imagine, that is important to me is disaster aid, living in an 
area that is tremendously impacted by climate change. Are there 
any Rural Development components to disaster aid after a rural 
area has experienced disaster, and is there anything Congress 
should consider in this regard?
    Ms. Torres Small. Congresswoman Plaskett, thank you so much 
for your work in the Virgin Islands and for the country, 
especially when it comes to disasters and extreme weather, 
which we are seeing increasingly.
    So, since I have been on the job since October, any time 
there is a disaster, I get an email late that night identifying 
what the issue is, identifying how extensive the damage is, and 
what the region is. And then every morning, there is an update 
in terms of what is happening to our offices on the ground, 
because that is often--we have over 450 offices across the 
country, and so, identifying that our employees on the ground--
the properties, so that the loans that we have given for both 
single-family and the people living in apartments, multi-
family, and any impact on those properties, and then the area 
in general, because there are resources that can be brought to 
bear for folks even if they are not currently borrowing within 
Rural Development.
    We are coordinating closely with FEMA to make sure that 
they have the information about available units, either single-
family or multi-family housing near the area if they need 
access to places to live within that, and then we are also 
communicating with our borrowers, because if they have a loan 
payment, they are going to be, on top of everything else that 
they are worried about at that moment, they want to know what 
is going to happen in terms of the expectations for those loan 
payments.
    So, those are some--we also, I will just say, work closely 
with FEMA to make sure FEMA is taking the lead. It is important 
to have that lead agency, but also coordinate carefully with 
them in terms of the resources we have to bear.
    Ms. Plaskett. And is there anything that you believe that 
we as Congress should do to support you, particularly when it 
comes to speeding up and making sure that coordination takes 
place immediately after a disaster so that that aid can get 
right to individuals where they need it?
    Ms. Torres Small. I really appreciate your focus on this 
issue, and I am happy to provide any technical assistance in 
terms of specific challenges that you are seeing on the ground. 
I think that is maybe the way we can be best responsive to 
finding the best solution to support your constituents.
    Ms. Plaskett. Thank you.
    The USDA has provided a variety of assistance and grant 
programs to U.S. Territories, almost all of which are 
considered rural areas. But my colleagues and I believe that 
there can be improvement in the area of energy assistance, 
renewable energy adoption, energy efficiency, and energy grid 
resiliency. The viability and sustainability of energy in the 
Virgin Islands and Puerto Rico is of the utmost importance for 
the well-being of our rural communities. Energy costs on our 
islands are higher than anywhere else in the country, and our 
geographic location leaves us vulnerable to climate change, but 
also provides opportunities for adoption of innovative energy 
resources.
    Congressman Ted Lieu and I introduced the Renewable Energy 
for Puerto Rico and the U.S. Virgin Islands Act, H.R. 2791, to 
create a small, new assistance program within the Agriculture 
Department which grants may be awarded to nonprofits to 
facilitate renewable energy development, energy efficiency, 
smart grids, micro grids, et cetera. Can you provide any 
perspective on the soundness of a small new funding stream for 
USDA to support renewable energy development and energy 
efficiency and resiliency in U.S. Territories with our unique 
energy needs?
    Ms. Torres Small. First, it just warms my hear that your 
Virgin Islands, as they address the challenges of climate 
change, also want to be part of the solution. We are eager to 
provide technical assistance on your specific legislation, and 
recognize that it is crucial to be providing support on the 
ground for developing those solutions and climate-smart tools.
    Ms. Plaskett. Thank you very much for your support, and I 
yield back.
    The Chairman. Thank you.
    I now recognize Representative Scott from Georgia for 5 
minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and 
Madam Under Secretary, it is nice to see you. I am sorry that I 
am seeing you through Zoom, but I was in 2118, which is a 
committee room that I know you spent a lot of time in as a 
Member of the Armed Services Committee. So, I hope you are 
well, and look forward to seeing you in person.
    I have a couple quick questions that deal with the middle 
mile with regard to broadband access. The 2018 Farm Bill 
provided the Department with the authority to finance the 
middle mile infrastructure projects. To date, my understanding 
is that no funds have been appropriated for middle mile 
projects. Could you speak to the importance of middle mile 
connectivity for rural communities, and what is the Department 
doing to advocate within the Administration to put these 
resources in the middle mile to support rural America?
    Ms. Torres Small. Congressman Scott, it is wonderful to see 
you even virtually, and I deeply appreciate your question about 
how do we get the backbone of infrastructure across rural 
America so that we are certainly reaching that last mile, the 
last homes, but also recognizing that as part of that, building 
that middle mile connectivity is crucial. And it is certainly 
something that through the Agriculture Committee, Rural 
Development has been working on for decades to address.
    I am happy to provide any technical assistance in terms of 
specific questions you might have in terms of the impact of the 
previous investments that we have made as you evaluate and work 
with your colleagues in Congress about future investments.
    Mr. Austin Scott of Georgia. Thank you, Madam, and I think 
kind of the frustration for everybody is how slow it has been 
to actually get the resources to the people to implement the 
technology that is needed in rural America.
    We also have a request for the Department to provide a 
comprehensive report on all of the broadband related activities 
financed by the Department in the preceding fiscal year. The 
Fiscal Year 2020 report was released at the end of January of 
2022, is my understanding. That is about a year and a half 
after the close, and certainly you, being a Member of Congress, 
you understand the frustration with not having the facts that 
we need to make the decisions that we make. So, any help going 
forward with making sure that those reports are done in a more 
timely manner would be appreciated. And any idea when we can 
actually see the 2021 report come out?
    Ms. Torres Small. I want to make sure we get you the best 
information possible, so I will make sure our team follows up 
with you in terms of that.
    [The information referred to is located on p. 206.]
    Mr. Austin Scott of Georgia. Okay. Well, we very much look 
forward to working with you. We want to see our rural utility 
services have the ability to put broadband in and deliver 
broadband, and obviously, what technology is right in one part 
of the county might not be right in another part of the county. 
So, I certainly look forward to working with you on the 
flexibility with our service providers, and how they can best 
deliver that.
    But I appreciate your work, I appreciate you personally, 
and I look forward to seeing you and working with you to 
resolve these issues for rural America. Thank you, Madam Under 
Secretary.
    Ms. Torres Small. Thank you, Congressman Scott.
    The Chairman. Thank you.
    I now recognize Congresswoman Pingree for 5 minutes.
    Ms. Pingree. Thank you very much, Mr. Chairman. Thank you 
for having this hearing. I am pleased to be here, and welcome, 
Madam Under Secretary. We are so happy to have you in that 
position, and it is just wonderful to hear your knowledge and 
enthusiasm. It all comes through in answering everyone's 
questions. We look forward to having you come visit us in Maine 
sometime, and I have a few questions for you today.
    So, I will just jump right in. I really appreciate that so 
many people have asked broadband questions, so you clearly know 
how important it is to everyone on this Committee. We have some 
issues in Maine related to ReConnect, and I feel like I have 
been bringing this up for a while, but we are the model of the 
communities that you are talking about when you mention the 
town in Iowa where you have to go to a separate, you have to go 
up a hill somewhere to get cell phone service. That is pretty 
much everywhere in Maine. So, we are a very rural state and we 
have had a lot of issues in getting connected, and we know how 
critically important it is.
    But a lot of them are struggling, the very small projects. 
These are projects of $1 million or less, but the program 
requirements are so burdensome they are still struggling to 
move forward 2 years later. We compare that to the broadband 
projects funded by the state-allocated CARES Act funding. They 
are completing their builds in 8 to 12 months. So, can you talk 
to me a little bit about any flexibility you can provide to 
existing ReConnect awardees who are struggling? Is there 
support that Rural Development could provide to existing 
ReConnect awardees to help them navigate the program 
requirements? We really want to see them up and running.
    Ms. Torres Small. Thank you so much, Congresswoman Pingree, 
for working with your constituents and applicants as we try to 
address this challenge. We certainly want to be responsive to 
their needs and look forward to following up with you 
specifically on the challenges you are facing. Because when it 
comes to Rural Development, one of our strengths, and frankly, 
one of the biggest needs in serving rural communities is 
something I mentioned in my opening statement. You don't 
necessarily have a grant writer. That lack of capacity to be 
able to do the follow up on this work, you don't have someone 
who is paid specifically to make sure that this million dollar 
project is--you are crossing all the T's and dotting all the 
I's. And thankfully with the bipartisan infrastructure law, 
when it comes to ReConnect, there was a specific amount of 
money that was set aside for technical assistance, and I look 
forward to working with you as that program gets developed to 
identify potential ways to be that resource for communities as 
they are going through this.
    We also have the GFR's in regions across the country that 
have experience both from the application stage with these 
specific projects, and certainly will bring that as an 
opportunity for support, and then where we have seen some time 
that it is taking to get these projects off the ground, 
sometimes with environmental review, for example, we have 
implemented a focused tiger team to try to address some of 
those challenges and speed along the process with some of the 
consultations that were necessary that, frankly, slowed down a 
little bit in the midst of COVID.
    So, we are eager to work with you specifically on the 
project, because it is often a very specific issue that is 
being faced, but that is why that technical assistance is so 
crucial so that we can respond to those specific needs.
    Ms. Pingree. Great. Well, we will definitely follow up with 
those grantees that are still dealing with difficult 
situations.
    Another quick question on the Value-Added Producer Grant 
and the food safety implementation. In the 2018 Farm Bill, I 
worked to include dedicated funding to help producers upgrade 
their practices and equipment to improve food safety through 
this program. So, we are already talking about the 2023 Farm 
Bill, but this change has still not been implemented. I know 
USDA held a listening session about this in the fall, but I 
want to just get an update about when implementation of this 
food safety financial assistance through the Value-Added 
Producers Grant might be available?
    Ms. Torres Small. Thank you so much, Congresswoman. I will 
make sure that my team is following up with you on that. We 
certainly have been implementing a lot of new programs in the 
midst of COVID to respond to some of the most urgent needs. 
That has created a capacity challenge, and I want to make sure 
we are giving you the best information about the promulgation 
timing for the Value-Added Producer Grant and the food safety 
piece that you worked so hard on.
    Ms. Pingree. Great. That is such a burdensome cost for many 
small- to medium-sized farmers. It would be great to make sure 
they get that assistance.
    Last, I just have 30 seconds so I will be quick about this. 
I am a little concerned about in the Meat and Poultry 
Processing Expansion Program, $150 million investment for 
projects up to $25 million. This is probably just going to be a 
statement to you, but I am worried about that being used for 
larger scale projects, and we all know it has been brought up 
by other Members how important it is to expand our existing 
capacity with small- to medium-sized processors. So, I am going 
to have to take your answer, get it later, but I am just 
emphasizing that point. We want to make sure that $150 million 
doesn't get eaten up in a few big projects. We really want it 
spread out.
    Ms. Torres Small. Thank you. We look forward to following 
up on the record.
    Ms. Pingree. Great. I yield back. Thank you very much. Good 
to see you.
    The Chairman. Thank you.
    I now recognize Congresswoman Spanberger for 5 minutes.
    Ms. Spanberger. Thank you, Chairman Delgado, for holding 
this important hearing. It is so exciting to be here today with 
our friend and former colleague and Under Secretary for Rural 
Development, especially as we are starting to plan for the 2023 
Farm Bill.
    Certainly, over the last couple years, we have seen 
significant challenges facing our communities at large, but in 
particular our rural communities with the unprecedented and 
unique challenges that we faced because of COVID and the 
associated economic hurdles. So, these challenges in rural 
communities, as you well know, have ranged from broadband 
infrastructure challenges to supply chain bottlenecks that 
really have ravaged critical industries like meat and poultry. 
And in response to these challenges, USDA's Office of Rural 
Development and Congress have collaborated to offer really 
critical assistance and solutions through funds from the 
American Rescue Plan, we have seen new programs that have been 
launched to address food supply chain concerns, improve access 
to broadband and telehealth, and to make our critical 
industries whole.
    So, to follow up slightly on Congresswoman Pingree's 
question as well, I was so proud to host you in my district 
with Under Secretary Moffitt to discuss USDA's announcement of 
the Food Supply Chain Guaranteed Loan Program to help expand 
meat and poultry processing capacities using funds from the 
American Rescue Plan. I am very excited that that program is, 
in part, based on the Butcher Block Act (H.R. 4140), which I 
co-led alongside Dusty Johnson. And as you saw during that 
visit to my district, there are so many small processors in 
communities like mine who are ready to answer the call and help 
reduce bottlenecks in our meat supply chain, but need that bit 
of support.
    So, could you give an update on this program, how it 
pertains to the funds that have been directed for meat and 
poultry processing, and how many awards have gone out so far?
    Ms. Torres Small. Congresswoman Spanberger, thank you so 
much for that question and for your advocacy for meat 
processors and for agriculture across the board. I really 
appreciated the change to get to Gordonsville, Virginia, and to 
meet ranchers and meat processors who were trying to answer 
that call in the midst of COVID. People were wanting meat, and 
they couldn't get it processed in time. So, they were trying to 
find all sorts of creative ways to make that work, and 
everything down to the county zoning made it hard. And so, all 
of those things they have to navigate is something we are 
certainly looking at.
    So, you mentioned the Food Supply Guaranteed Loan Program, 
which I think is a crucial opportunity to work with local 
lenders on projects, but sometimes for the smaller ones, they 
may need more technical assistance. And that is why Under 
Secretary Moffitt was there. They had a program that awarded 
$32 million for 167 meat and poultry slaughter and processing 
facilities to invest in that interstate commerce, and there 
will be another round with $22 million. So, we are certainly 
looking at some of that assistance, technical assistance as 
well.
    And then when it comes to MPPEP and making sure that we are 
building out the middle when it comes to meat processing. The 
first focus is kind of that last mile, that last little piece 
to get a project over the edge to expand options, but as we 
move into the future, also trying to identify other projects 
that are kind of more at the beginning of their work, and how 
they can work with local lenders to receive support at the 
beginning stages of their work to take it to fruition. And that 
certainly could include independent processors and the smaller 
scale processors as well.
    Ms. Spanberger. And certainly, as we work towards the 2023 
Farm Bill, I think we will want to work in concert with your 
office to determine how it is that we should consider extending 
some of the funding especially for these new loans, what we can 
learn from the implementation thus far, and working together 
with you and Under Secretary Moffitt certainly how we can 
ensure that we are doing right by our small producers and in so 
many cases, would-be meat processors.
    In your written testimony, you mentioned investments made 
through the Rural Energy for America Program, the REAP Program. 
I have been a very strong supporter of REAP, and have multiple 
pieces of legislation kind of focused on this program. Notably, 
this program and the bill that I sponsored would dramatically 
increase funding for the REAP Program, expand eligibility, and 
create a fund for underutilized technologies, including 
biodigesters or biofuel-related infrastructures.
    And so, as we are seeing insecurity and instability related 
to Putin's horrific invasion of Ukraine and we are seeing the 
increase of cost of natural gas and gasoline, I think this 
speaks now more than ever that funding to support REAP is 
vital. It gives producers a bit of independence and certainly 
reduces their dependence on foreign energy and allows them to 
lower energy costs.
    My time is up, but I will follow up with questions for the 
record to see what your thoughts may be on how this incredibly 
important program really can give some independence to our 
rural communities and our farmers.
    Thank you for being here. Mr. Chairman, I yield back.
    The Chairman. Thank you, and that concludes the question-
and-answer period today.
    The work of Rural Development is vital to ensure that our 
rural communities have the resources they need to become 
resilient and to serve the members of their communities. As a 
former Member of the House Agriculture Committee, Under 
Secretary Torres Small understands the importance of the policy 
decisions made by this Committee, and it was certainly great to 
hear directly from you today about Rural Development's work and 
relevant policies in the 2018 Farm Bill. I want to thank you, 
Under Secretary, and with that, we will adjourn.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witness to any question posed by a Member. This hearing on 
the Subcommittee on Commodity Exchanges, Energy, and Credit is 
adjourned.
    [Whereupon, at 11:31 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letter by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
December 22, 2021

 
 
 
Hon. Thomas J. ``Tom'' Vilsack,      Hon. Xochitl Torres Small,
Secretary,                           Under Secretary of Agriculture for
U.S. Department of Agriculture,       Rural Development,
Washington, D.C.;                    U.S. Department of Agriculture,
                                     Washington, D.C.
 

    Secretary Vilsack and Under Secretary Torres Small:

    Throughout the COVID-19 pandemic, Americans have relied on their 
high-speed broadband connections more than ever to work, educate their 
children, access health care, and connect with loved ones. 
Unfortunately, these benefits remain out of reach for millions of 
Americans, particularly those living in rural and remote areas, who 
continue to lack access to broadband connections.
    Through the Coronavirus Aid, Relief, and Economic Security (CARES) 
Act,\1\ the Consolidated Appropriations Act of 2021 (the Act),\2\ the 
American Rescue Plan Act (ARPA),\3\ and the Infrastructure Investment 
and Jobs Act,\4\ Congress provided billions of dollars for programs 
across Federal agencies to bridge broadband connectivity gaps.
---------------------------------------------------------------------------
    \1\ P.L. 116-136 at 138 Stat. 281 et seq.
    \2\ P.L. 116-260.
    \3\ P.L. 117-2.
    \4\ P.L. 117-58.
---------------------------------------------------------------------------
    The U.S. Department of Agriculture (USDA) is one of the agencies 
charged by Congress with administering broadband funding under the 
COVID-19 recovery packages. USDA's ReConnect Program received over $2.6 
billion to fund grants and loans for broadband deployment in rural 
areas.
    We are concerned that key policy decisions on how to distribute the 
$1.15 billion in the third round of the ReConnect Program will result 
in duplicative and inefficient use of taxpayer dollars. Unfortunately, 
USDA is planning to provide funding for communities that are served 
with internet speeds of greater than 25/3 Mbps, which could leave those 
in rural America still lacking such service further behind and 
exacerbate the digital divide. We urge you to focus funding for 
unserved communities that lack access to any broadband connection 
rather than toward duplicative or upgraded service for those 
communities which already have internet service of 25/3 Mbps.
    Meeting the needs of these unserved communities first before 
addressing the needs of better served communities is essential to 
closing the digital divide. To help identify these communities, the 
Federal Communications Commission (FCC) is in the process of 
implementing the Broadband DATA Act, which will provide granular data 
on broadband service across the United States. We encourage USDA and 
every Federal agency to utilize this data as it becomes available to 
assist in identifying unserved communities and streamlining the 
application process.
    We also believe that forward-looking broadband service standards 
must be balanced by a technologically neutral approach. USDA must 
ensure that unserved communities gain broadband access as expeditiously 
and cost effectively as possible, while securing investments in 
broadband systems that will provide sufficient service far into the 
future.
    As Republican leaders of the Committees on Agriculture, 
Appropriations, Energy and Commerce, and Oversight and Government 
Reform, we are focused on ensuring that the enormous Federal 
investments in broadband are spent as efficiently as possible and 
targeted to those unserved communities that need it most. It is our 
responsibility to ensure that USDA's rural broadband activities are 
effectively managed and coordinated across the Federal Government.
    To gain a better understanding of how the substantial changes made 
to the ReConnect Round 3 application were developed, we request 
responses to the following questions, no later than January 14, 2022:

  1.  Rounds 1 and 2 of ReConnect defined sufficient access to 
            broadband as internet speeds of greater than 10/1 Mbps. 
            Similarly, the 2018 Farm Bill established 25/3 Mbps as the 
            minimum broadband speed threshold. Yet, in Round 3 of 
            ReConnect sufficient access to broadband is redefined as 
            internet speeds of greater than 100/20 Mbps, a significant 
            increase over both the previous ReConnect rounds and recent 
            legislative history.

        What specific data and analysis did you and your staff rely on 
            to determine that sufficient access to broadband should be 
            defined as internet speeds of greater than 100/20 Mbps?

  2.  The radical shift in the definition of sufficient access to 
            broadband shift will have the effect of significantly 
            expanding the areas of eligibility under the program, 
            including encompassing potentially any area with service 
            speeds of less than 100/20 Mbps.

        Please provide a map of what new areas have been made eligible 
            under ReConnect Round 3 as compared to the areas eligible 
            under ReConnect Round 1 and 2, and areas eligible under the 
            requirements in the 2018 Farm Bill.
        Under each map, how many additional communities will be 
            competing for USDA's limited program resources compared to 
            the previously eligible communities?

  3.  ReConnect Round 3 requires that funded projects be technically 
            capable of provide symmetrical internet speeds of 100/100 
            Mbps. Please describe what currently available technologies 
            are capable of meeting these requirements in rural 
            communities. How could this requirement exclude common 
            broadband technologies utilized in rural communities?

        What specific data and analysis did you and your staff rely on 
            to determine that symmetrical broadband speeds were a 
            necessary requirement to meet the needs of rural Americans?

  4.  Historically, USDA broadband programs have treated all potential 
            broadband providers equally, and not advantaged or 
            disadvantaged any type of provider. Yet, the rules for 
            ReConnect Round 3 provide a clear preference for certain 
            types of providers.

        What specific data and analysis did you and your staff consider 
            to justify this break from longstanding historical 
            practice?

    To gain a better understanding of your efforts to administer these 
funds, we request your response to the following questions no later 
than January 14, 2022:

  1.  What steps are you taking to coordinate USDA's broadband funding 
            investments, including the recently announced third round 
            of ReConnect funding, with those led by other Federal 
            agencies, including the FCC, the Department of the 
            Treasury, the Department of Commerce, and the Department of 
            Education?

  2.  How will you ensure that USDA does not invest in broadband 
            projects that will compete with or undermine broadband 
            projects funded by other agencies?

  3.  What is the Department's justification for not prioritizing 
            funding for unserved areas before upgrading networks in 
            areas that already have service?

  4.  What steps are you taking to avoid subsidized overbuilding of 
            privately-owned networks, which has been shown to 
            discourage broadband investment and exacerbate the digital 
            divide?

  5.  How are you working to ensure that different technologies and 
            types of providers are leveraged, so that the most remote 
            areas get served expeditiously and cost-effectively?

  6.  What specific steps are you taking to track and report to the FCC 
            and the National Telecommunications and Information 
            Administration the locations where USDA is funding 
            broadband projects, pursuant to section 904(b)(2) of 
            Division FF of the Consolidated Appropriations Act of 2021? 
            \5\
---------------------------------------------------------------------------
    \5\ Pub. L No. 116-260, 134 Stat. 1182 (December 27, 2020).

    In addition, we request that you provide a detailed accounting of 
any CARES Act and Consolidated Appropriations Act of 2021 funds that 
you have awarded or allocated to support broadband connectivity. 
Specifically, we request the following information no later than 
---------------------------------------------------------------------------
January 14, 2022:

  7.  A list of all funding awards that have been awarded or allocated 
            to support broadband connectivity and the amount of each 
            award.

  8.  For each award that will be used to fund broadband deployment or 
            build-out:

      a.  The geographic area and/or location(s) that the project will 
            cover and the 
                level of service (bandwidth and latency, if available) 
            that will be provided 
                to the covered area and/or location(s);

      b.  Whether an existing provider already offers broadband service 
            in the cov-
                ered geographic area and/or location(s); and

      c.  Whether funds have been awarded through other Federal 
            programs (such 
                as the FCC's Universal Service Fund, Emergency 
            Connectivity Fund, or 
                COVID-19 Telehealth Program; the Department of the 
            Treasury's 
                Coronavirus Relief Fund, Coronavirus State and Local 
            Fiscal Recovery 
                Fund, or Capital Projects Fund; the Department of 
            Education's Education 
                Stabilization Fund; and the Department of Commerce's 
            Broadband Infra-
                structure Program, Tribal Broadband Connectivity 
            Program, or Con-
                necting Minority Communities Pilot Program) to provide 
            broadband serv-
                ice to the covered geographic area and/or location(s).

    Thank you for your attention, and we look forward to your timely 
responses. If you have any questions, please contact Kate O'Connor at 
(202) 225-3641, Lamar Echols at (202) 225-5074, or Paul Balzano at 
(202) 225-0317.
            Sincerely,
            
            

 
 
 
Hon. Cathy McMorris Rodgers          Hon. James Comer
Ranking Member                       Ranking Member
Committee on Energy and Commerce     Committee on Oversight and Reform
 

                                     
                                     

 
 
 
Hon. Kay Granger                     Hon. Glenn ``GT'' Thompson
Ranking Member                       Ranking Member
Committee on Appropriations          Committee on Agriculture
 

Cc:

The Honorable Frank Pallone, Jr.
Chairman, Committee on Energy and Commerce

The Honorable David Scott
Chairman, Committee on Agriculture

The Honorable Shalanda Young
Acting Director, Office of Management and Budget
                                 ______
                                 
 Supplementary Material Submitted by Hon. Xochitl Torres Small, Under 
    Secretary for Rural Development, U.S. Department of Agriculture
Insert 1
          Mr. Feenstra. . . .
          I got just a little bit of time left. Under Secretary, the 
        USDA's BioPreferred Program has proven to spur economic growth 
        and job creation. Through its creation in the 2002 Farm Bill, 
        and the expansion in the 2014 Farm Bill, how has this program 
        achieved its mission to develop and expand biobased products? 
        Again, this is very big for Iowa and I would like to know, what 
        recommendations do you have for the BioPreferred Program?
          Ms. Torres Small. Yes. Biobased products are definitely 
        exciting. It is where you take what could have otherwise been a 
        byproduct and turn it into a product itself. Just a small fact, 
        we used biobased utensils at my wedding, so we certainly know 
        that it is an opportunity for the future.
          The biobased BioPreferred Program that you are talking about 
        helps identify to the Federal Government and to purchasers that 
        there are these products out there. It can also support those 
        markets, and we look forward to working with you more to make 
        sure that we are giving you the information you need to get 
        this done.

    I concur that the BioPreferred' Program offers an 
opportunity to de-carbonize the nation's everyday consumer biobased 
products, drive the nation's biobased economic growth, create jobs, 
promote sustainable production of consumer biobased products, and 
create opportunities for climate-smart practices.
    The 2018 Farm Bill has reassigned delivery of this program to Rural 
Development and specifically to the Rural Business--Cooperative 
Service. Rural Development reports that the program currently has over 
20,000 products registered in the BioPreferred' Program 
Catalog, supports over 6,000 USDA Certified Biobased Products, has 
participating businesses from 49 countries, and has 3,342 companies 
participating overall. This year we will celebrate the 20 year 
anniversary of the Biobased Markets Program which follows our 
recognition of the 10 year anniversary of the BioPreferred' 
label in 2021. In calendar year 2021, 976 applications were certified 
which represents the greatest number of labels awarded in a single 
year.
    At present, there are no requirements for Federal agencies to 
report their biobased product purchasing data, so year-to-year biobased 
product spending results are unknown. As examples, there are no 
requirements to report spending related to supply contracts or direct 
purchasing via purchase cards, fleet cards, or catalog purchases. 
However, there are requirements for Federal service and construction 
contractors to report their biobased product purchasing via the System 
for Award Management. In FY 2021, Federal service and construction 
contractors reported in excess of 76 million dollars in biobased 
product purchasing.
    Rural Development would like to see increased reporting of biobased 
product procurement across the Federal Government and our team has been 
proactive in affecting change since taking over this program. Despite 
challenges with documenting and reporting biobased product procurement, 
we continue working toward solutions.

   The USDA BioPreferred Program has taken steps to meet its 
        goal of increasing biobased product purchasing. These steps 
        include:

   Reviewing current service and construction solicitations to 
        ensure biobased product purchasing and reporting requirements 
        are included. If the solicitation is non-compliant, the 
        Contracting Officer receives a communication requesting an 
        amendment to correct the error.

   Posting a new web-based training program for Contracting 
        Officers which will be available on the USDA 
        BioPreferred' Program website.

   Conducting outreach with events such as GSA SmartPay for 
        purchase card managers, the Federal Environmental Symposium, 
        and the Agricultural Outlook Forum.

   Launching a newsletter directed to Federal Government 
        employees called BioBuzzGov which focuses on information for 
        procurement and sustainability professionals in the Federal 
        Government.
Insert 2
          Mr. Balderson. . . .
          My next question is, and I agree with your statement that 
        broadband is a make-or-break issue for rural America. To that 
        end, when USDA makes an award under its ReConnect Program or 
        issues some other funding support to expand broadband, what 
        steps does the Department take after the fact to measure that 
        the promised service is being delivered?
          Ms. Torres Small. That is a really great question, and we 
        will follow up with more details on it as we continue to make 
        new awards when it comes to ReConnect and the current 
        investments now. But part of the Rural Development's special 
        sauce and its expertise is people on the ground, it is the GFRs 
        who know those providers, and so, we are available when there 
        are concerns. People who are expressing, ``Hey, they say we are 
        being served but we are not really,'' and being able to verify 
        whether or not that claimed service is truly existing.

    Once an award is approved, USDA takes a multifaceted approach to 
monitor the progress of the construction. Award funds are only advanced 
for specific projects that have been approved for funding. Our national 
office staff monitors the progress of the advances and ensures that the 
construction is in conformance with the approved application. In 
addition, USDA has general field representative (GFR) located in each 
region throughout the country that visits the project and inspects 
construction that is being completed. Awardees are also required to 
submit reports that proved the geo-coded locations of all premises 
served and submit a final report when all construction has been 
completed. The GFR will then conduct field visits to make sure that the 
premises are getting served.
Insert 3
          Mr. Austin Scott of Georgia. . . .
          We also have a request for the Department to provide a 
        comprehensive report on all of the broadband related activities 
        financed by the Department in the preceding fiscal year. The 
        Fiscal Year 2020 report was released at the end of January of 
        2022, is my understanding. That is about a year and a half 
        after the close, and certainly you, being a Member of Congress, 
        you understand the frustration with not having the facts that 
        we need to make the decisions that we make. So, any help going 
        forward with making sure that those reports are done in a more 
        timely manner would be appreciated. And any idea when we can 
        actually see the 2021 report come out?
          Ms. Torres Small. I want to make sure we get you the best 
        information possible, so I will make sure our team follows up 
        with you in terms of that.

    This report will be finalized in coming months, and we are happy to 
share it with it you.
                                 ______
                                 
    Submitted Letter by Hon. Jim Matheson, Chief Executive Officer, 
            National Rural Electric Cooperative Association
March 7, 2022

 
 
 
Hon. Antonio Delgado,                Hon. Michelle Fischbach,
Chairman,                            Ranking Minority Member,
Subcommittee on Commodity            Subcommittee on Commodity
 Exchanges, Energy, and Credit,       Exchanges, Energy, and Credit,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Delgado and Ranking Member Fischbach,

    On behalf of National Rural Electric Cooperative Association's over 
900 members, I write to express our interest in and appreciation for 
your upcoming hearing to review United States Department of Agriculture 
(USDA) Rural Development programs authorized in the 2018 Farm Bill. We 
applaud your leadership and look forward to working with you as you 
write the next farm bill.
    As key stakeholders and participants in USDA Rural Development 
programs, member-owned, not-for-profit electric cooperatives utilize 
many of these programs to serve the poorest, most rural parts of our 
country. We see ourselves as electric utilities that are more than just 
poles and wires companies. USDA Rural Development programs below are 
just a few of the tools our members use to serve rural communities and 
help elevate rural America.

   RUS Electric Loan Program--Low-cost loans from the RUS 
        electric loan program are essential to helping co-ops meet the 
        challenge of building high-cost electric infrastructure in hard 
        to serve, rural areas.

   Broadband--Electric co-ops are making important strides to 
        bridge the digital divide through broadband deployment. In 
        fact, more than 200 electric cooperatives are now, in some 
        shape or form, in the broadband business. We pride ourselves in 
        being good stewards of the financing Congress has made 
        available and see ourselves particularly well-positioned to 
        provide broadband services to consumers in unserved areas of 
        the country.

   Rural Energy Savings Program (RESP)--RESP offers low-cost 
        financing to electric cooperatives for cost-effective, energy-
        efficiency retrofit projects at customers' homes.

   Rural Energy for America Program (REAP)--REAP provides 
        grants and loans to develop renewable energy systems and 
        implement energy efficiency measures.

   Rural Economic Development Loan and Grant (REDLG)--Under the 
        REDLG program, proceeds to the Federal Government from Rural 
        Utilities Service (RUS) loans are used to finance economic 
        development projects in rural communities. Electric 
        cooperatives partner with community stakeholders on REDLG 
        projects to construct essential infrastructure, renovate 
        hospitals, build libraries, and expand businesses, among other 
        things.

    Thank you again for your consideration of these critical programs 
and your service on behalf of the communities that they serve. Please 
feel free to reach out to me or anyone on my staff if we can be of 
assistance.
            Sincerely,
            
            
CEO, NRECA.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Xochitl Torres Small, Under Secretary for Rural 
        Development, U.S. Department of Agriculture
Question Submitted by Hon. Ann M. Kuster, a Representative in Congress 
        from New Hampshire
    Question. Madame Under Secretary, I wanted to ask you about The 
Healthy Food Financing Initiative, which provides grants to increase 
the availability of affordable, healthy food in underserved 
communities, including in rural America.
    In 2019 and 2020, over $4 million in small, targeted grants were 
awarded nationwide through HFFI--including to the Fresh Start Farms 
Food Hub, a collective of immigrant and refugee farmers in New 
Hampshire.
    Can you talk more about the impact this program has on the rural 
economy and food access? Also, the statute also allows HFFI to provide 
loans to increase the affordable, healthy food in underserved 
communities. Can you explain why there have not been any loans made 
under this program?
    Answer. Thank you for your question. During the first 2 years of 
the Targeted Small Grants Program (TSGP), HFFI funding provided $4.4 
million in grants to 30 recipients in 23 states. As a result of this 
assistance, we saw the following impacts:

   Over 460 Permanent jobs were created or saved;

   Approximately 182,750 square feet of space was created or 
        renovated to sell, store or distribute food;

   Fifty percent of the funding served very low income areas;

   Ten percent of the recipients were owned or controlled by 
        Native people; and

   Fifty-three percent of the recipients were owned or 
        controlled by People of Color.

    We expect these impacts to increase as HFFI is near awarding funds 
through a third round of funding for the TSGP.
    In addition to the TSGP, we recently expanded the types of 
assistance that can be utilized through HFFI. Our National Fund Manager 
is currently finalizing two new programs that are expected to be 
offered in 2022. The first is a capacity-building grant program that 
will provide financial assistance to Partnerships to develop their own 
versions of HFFI in their local areas. Partnerships are regional, 
state, or local public-private partnerships that are organized to 
improve access to fresh, healthy foods and provide financial and 
technical assistance to eligible projects. Examples of activities we 
expect to fund include hiring a project coordinator, surveying local 
communities, providing one-on-one guidance to local retailers and food 
enterprises, assessing data to develop financial products like loans, 
grants, and tax credits, and identifying a local lender to set up a 
revolving fund.
    The second program is a credit enhancement program. This program 
will again award grants to Partnerships via a qualified lender. These 
grants must be used for credit enhancement activities, such as 
establishing a revolving loan fund, implementing flexible credit 
requirements for lending eligible projects, and establishing a loan 
loss reserve.
    Both of these new programs will continue to support priorities that 
were established through the TSGP. That is, priority will be given to 
projects that meet one or more of the following:

   Create or retain quality jobs for low-income residents in 
        the community.

   Support regional food systems and locally-grown food;

   Are accessible by public transit;

   Involve women- or minority-owned businesses;

   Receive funding from other sources:

   Are located in or serve a rural area;

   Are located in very-low-income communities.

    2018 Farm Bill authorized HFFI at $125 million over 5 years and to 
date, the highest annual appropriation that the program has received is 
$5 million.
Question Submitted by Hon. Angie Craig, a Representative in Congress 
        from Minnesota
    Question. Under Secretary Torres Small, thank you for considering 
the following question, which I was not able to ask during the hearing 
on March 8, 2022, but which I hope you may still be able to address.
    We continue to see a decline in the health of rural communities. 
There is a tremendous need for investment in healthcare, childcare, 
fire and police stations as well as other essential community 
facilities across rural America. In my district, Compeer Farm Credit 
has joined with local banks, credit unions and USDA to finance these 
projects. However, the Farm Credit Administration process presents 
challenges for Farm Credit institutions to provide investment financing 
to rural hospitals, clinics, childcare and nursing care facilities.
    Can you discuss programs or specific topics like rural health care 
where adequate access to financing has posed a barrier to rural areas? 
What can USDA do to work with FCA to create more opportunities for Farm 
Credit to work collaboratively with other lenders to finance these 
essential facilities?
    Answer. USDA Rural Development (RD) serves an important role in 
providing direct access to capital for rural communities in every 
sector. In the healthcare sector, rural areas face challenges accessing 
care for many reasons including hospital and healthcare facility 
closures, workforce shortages, and limited telehealth opportunities due 
to lack of broadband. Over the last 10 years, RD has invested 
approximately 10% of its commercial dollars, almost $9 billion, in the 
care section. RD also supports care services by supporting workforce 
development through planning, infrastructure and equipment financing, 
employer engagement, and education training. Additionally, RD's 
investment in rural healthcare projects and their associated 
infrastructure like broadband or public safety, can pave the way for 
further investment from other entities such as private lenders or local 
governments. As in the example described in the question, Farm Credit 
institutions can be a valuable partner for banks or credit unions as 
they seek to finance important rural health related projects. Farm 
Credit institutions can also serve as a holder for all or part of RD 
guaranteed loans for health-related projects under the OneRD Guaranteed 
Program. RD works with lenders across the country under the OneRD 
program and can connect interested parties or project proponents to 
approved lenders as requested.


 
                     A 2022 REVIEW OF THE FARM BILL

        (THE ROLE OF USDA PROGRAMS IN ADDRESSING CLIMATE CHANGE)

                              ----------                              


                       WEDNESDAY, MARCH 16, 2022

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: Representatives David Scott of Georgia, 
Costa, McGovern, Adams, Spanberger, Hayes, Delgado, Brown, 
Rush, Pingree, Kuster, Bustos, Plaskett, O'Halleran, Carbajal, 
Lawson, Craig, Axne, Schrier, Panetta, Bishop, Thompson, Austin 
Scott of Georgia, Crawford, DesJarlais, LaMalfa, Davis, Allen, 
Kelly, Bacon, Johnson, Baird, Jacobs, Balderson, Cloud, Mann, 
Feenstra, Miller, Moore, Cammack, Fischbach, and Letlow.
    Staff present: Paul Babbitt, Lyron Blum-Evitts, Chu-Yuan 
Hwang, Kelcy Schanuman, Ashley Smith, Josh Maxwell, Patricia 
Straughn, Jennifer Tiller, and Dana Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. The Committee will now come to order. I want 
to welcome everyone, and thank you for joining today's hearing 
entitled, A 2022 Review of the Farm Bill: The Role of USDA 
Programs in Addressing Climate Change. After brief opening 
remarks, Members will receive testimony from our very 
distinguished witnesses today, and then the hearing will be 
open for questions.
    I want to welcome everyone to a very important hearing 
today. As many of you may recall, at our first hearing in my 
tenure as Chairman of this Committee, we discussed the role 
that farmers, ranchers, and foresters have in addressing 
climate change, as well as the impacts that climate change will 
have on them and their local communities in rural areas. 
Today's hearing will focus on how our 2018 Farm Bill supports 
voluntary USDA programs that can help improve the profitability 
of our agriculture operations, and mitigate climate change at 
the same time. This is very important.
    And ladies and gentlemen, there is no industry, there is no 
entity that relies on their existence from climate and weather 
than agriculture. So, that is why we and agriculture must be at 
the front of the point of the spear when it comes to addressing 
climate change. And our rural communities are already facing 
inadequate infrastructure and natural disasters. Just look at 
the fires in the western part of our nation that will grow in 
frequency and impact which further affects their ability to 
provide reliable, affordable, electric service and clean 
drinking water, things that other sections of the country take 
for granted. Our rural communities are in the crosshairs of 
this.
    I am also for allowing farming to remain a viable way of 
life. That is important here. Family farming is the ``hardbed'' 
of our agriculture system, and I am pleased that we have a 
young farmer here today who can speak to her experience 
utilizing such programs through USDA.
    Our aim is to also provide rural small businesses and towns 
with the tools to undertake efforts to address climate change 
impacts or increase their own energy efficiency, which helps 
their bottom lines and their budgets, and increase their farm's 
profitability.
    And as we are all seeing right now, increasing energy 
efficiency and producing more renewable energy right here at 
home should continue to be a goal to ensure that we do not have 
to rely on other countries for our own energy needs. We are 
blessed in our own country to have the necessary energy sources 
without depending on other nations.
    Today's panel of witnesses brings a wide breadth of 
experience from the role of the Federal Government in program 
development and funding, all the way to how farmers are 
utilizing and implementing these programs. I have said time and 
time again that we want agriculture to be at the tip of the 
spear. That is what we want to accomplish today. It is 
agriculture that must lead this nation's efforts in climate 
change.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Welcome to another important hearing in our ongoing work to review 
the 2018 Farm Bill.
    As many of you will recall, our first hearing in my tenure as 
Chairman of this Committee discussed the role that farmers, ranchers, 
and foresters have in addressing climate change, as well as the impacts 
climate change will have on them and their local communities.
    Today's hearing will focus on how the 2018 Farm Bill supports 
voluntary USDA programs that can help improve the profitability of our 
agriculture operations and mitigate climate change at the same time.
    Agriculture occupies a unique position in this conversation with 
the potential to have a great impact through innovation on both 
reducing emissions and sequestering greenhouse gases.
    Our rural communities are already facing inadequate infrastructure, 
and natural disasters that will grow in frequency and impact will 
further affect their ability to provide affordable, reliable electric 
service and clean drinking water.
    In 2021, the annual global surface temperature was 1.51 Fahrenheit 
above the average in the last century. Additionally, 61 percent of the 
landmass of the contiguous 48 states experienced moderate or worse 
drought.
    Make no mistake, climate change poses a threat to our rural 
communities, and to the production of food, fuel, and fiber. We must 
support our producers and rural communities in addressing this growing 
challenge.
    I want to ensure that our farm bill programs support producers, 
particularly historically underserved and beginning farmers, who want 
to innovate and adopt practices that conserve resources and address 
climate change, while also allowing farming to remain a viable way of 
life. I am pleased that we have a young farmer here today who can speak 
to her experiences utilizing such programs through USDA.
    Our aim is to also provide rural small businesses and towns with 
the tools to undertake efforts to address climate change impacts or 
increase their energy efficiency--which helps their bottom lines and 
budgets.
    And as we're all seeing right now, increasing energy efficiency, 
and producing more renewable energy here at home should continue to be 
a goal to ensure that we don't have to rely on other countries for our 
energy needs.
    Today's panel of witnesses brings a wide breadth of experience, 
from the role of the Federal Government in program development and 
funding, all the way to how farmers are utilizing and implementing 
those programs.
    I have said time and time again that we want agriculture to be at 
the tip of the spear in our efforts to address climate change, and 
today's hearing is going to further sharpen that point as we continue 
our work on the farm bill.
    I now recognize my friend and the Ranking Member of the Full 
Committee, `GT' Thompson, for any opening remarks he may have.

    The Chairman. With that, I will now turn it over to our 
Ranking Member for his opening statement.

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

    Mr. Thompson. Well, thank you, Chairman Scott, and thank 
you to our panelists for testifying today, it's greatly 
appreciated. I am excited about the panel that sits before us.
    Recently, The New York Times wrote a series of stories and 
produced several videos denigrating rural Americans for 
providing this country with the safest, most abundant, and most 
affordable food supply in the history of the world. Let's set 
the record straight. U.S. agriculture accounts for less than 
ten percent of greenhouse gas emissions according the 
Environmental Protection Agency. Over the last 70 years, U.S. 
agriculture has tripled food and fiber production, while usage 
of land, energy, fertilizer, and other inputs have remained 
steady.
    Now, I believe farmers are climate champions, but there is 
more to be done. In fact, nearly a year ago, several of my 
Republican colleagues on this Committee introduced a suite of 
climate friendly and farmer-focused bills. So, if you have 
commonsense solutions, I am here to work with you. But I will 
not fundamentally upend our commodity, conservation, and crop 
insurance programs to appease Washington think tanks. I will 
reject complicating our programs and making climate the focus 
of every title of the upcoming farm bill reauthorization.
    Now, we must ensure agriculture production remains viable 
in rural America to keep production from increasing in areas of 
the world with lower environmental standards, worse labor 
conditions, and fewer food safety considerations. And that is 
why a robust safety net is critical to keeping farms and 
production here, while lowering overall global greenhouse gas 
emissions.
    Now, I would be remiss not to mention the tone deafness of 
this hearing, as our country and our farmers face enormous and 
immediate challenges, including higher food prices, record 
inflation, input costs, the tax on our energy independence, 
which, by the way, could lead us to a greater supply of 
domestic produced fertilizer, and dependable labor, which has 
been a theme long before COVID.
    Now, these are the issues I hear about as I travel the 
country, and these are the issues we should be addressing. Our 
producers need action, not half-baked pilots and arbitrary 
mandates. Now, I hope at the end of the day we recognize that 
our voluntary, locally-led, incentive-based conservation system 
is working as intended, and that we must not undermine its 
continued success in supporting the environment and producers.
    Agriculture is science. It is technology. Let me back up 
and say American agriculture is science. It is technology. It 
is innovation. The demands of a 21st century farm economy and 
the economically viable climate solutions depend on tools and 
policies that continue to unleash and increase U.S. 
productivity.
    Once again, thank you to our panelists that are here. I am 
looking forward to your testimony and the opportunity to be 
able to hear the exchange between our Members and yourselves.
    Mr. Chairman, I yield back my time.
    The Chairman. Thank you, Ranking Member.
    The chair would request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony, and to ensure that there is ample time for 
questions.
    Our first witness today is the Honorable Charles Conner, 
who is the President and CEO of the National Council of Farmer 
Cooperatives, on behalf of the Food and Agriculture Climate 
Alliance.
    Our next witness today is Ms. Kristin Weeks Duncanson, who 
is the owner and partner of Duncanson Growers, and she is 
testifying today on behalf of the AGree Economic and 
Environmental Risk Coalition.
    Our third witness is our former Senate colleague, Senator 
Heidi Heitkamp from the great State of North Dakota. She is the 
Co-Chair of the Bipartisan Policy Center's Farm and Forest 
Carbon Solutions Task Force.
    Our fourth witness today is Ms. Shakera Raygoza. Let me 
repeat that, please. Ms. Shakera Raygoza, who is an owner and 
operator of Terra Preta Farm, and she is testifying today on 
behalf of the National Young Farmers Coalition.
    To introduce our fifth witness today, I am pleased now to 
yield to our colleague from California, Mr. Panetta.
    Mr. Panetta. Thank you, Mr. Chairman. It is my absolute 
honor to introduce Dr. Glenda Humiston as a witness in today's 
hearing on the role of USDA programs in addressing climate 
change.
    Now, as a representative for the Central Coast of 
California, I am well aware not only of the benefits of our 
agriculture to our community and our country, but also the 
many, many challenges faced by that number one industry in the 
number one agricultural state in the nation, California. 
Unfortunately, as we will hear today, one of the growing 
challenges, especially in my state, is the everchanging 
landscape due to the climate crisis.
    Fortunately, we have people like Dr. Humiston, who has 
dedicated her career to supporting agricultural sustainability 
by working to ensure that people thrive, our planet is healthy, 
and there is prosperity for all. As the current Vice President, 
Agriculture and Natural Resources for the University of 
California, Dr. Humiston advances those goals with innovative 
answers to local issues by leading a staff of over 1,500 people 
at 11 institutes and nine research and extension centers in 
California. She came into that position in 2015 with more than 
25 years of experience working on public policy development and 
program implementation to support sustainability. That includes 
her service as President Clinton's Deputy Under Secretary for 
Natural Resources and Environment at the USDA, and being 
appointed by President Obama as the California State Director 
at the USDA Rural Development Division.
    Dr. Humiston is California born and Colorado raised where 
she grew up on a cattle ranch and was an active member of 4-H, 
so I have no doubt that her experience working with cows to 
U.S. Congress Members and for mechanization to the 
sequestration of carbon, and everything in between has allowed 
Dr. Humiston to be able to provide this Committee with 
insightful information for us to use as we provide solutions in 
the 2023 Farm Bill for the effects of climate change on 
agriculture.
    Mr. Chairman, I thank you for this important hearing, and I 
thank you, Dr. Humiston, not just for your invaluable testimony 
today, but also for your interminable work to ensure a fruitful 
future for our agriculture not just in California, but all 
across our country.
    I yield back, Mr. Chairman.
    The Chairman. Thank you, Mr. Panetta.
    And now, our sixth and final witness today is Dr. Joe 
Outlaw, who is the Co-Director of the Agriculture and Food 
Policy Center, Department of Agricultural Economics at Texas 
A&M University.
    I am so pleased to have such a distinguished panel of 
witnesses before us today. Thank you so much for being with us. 
You will each have 5 minutes, and the timer should be visible 
to you and will count down to 0, at which time, your time will 
be expired.
    And now, let us begin with you, Mr. Conner. Please begin 
when you are ready.

   STATEMENT OF HON. CHARLES F. CONNER, PRESIDENT AND CHIEF 
                  EXECUTIVE OFFICER, NATIONAL 
 COUNCIL OF FARMER COOPERATIVES; CO-CHAIR, FOOD & AGRICULTURE 
               CLIMATE ALLIANCE, WASHINGTON, D.C.

    Mr. Conner. Thank you, Chairman Scott.
    Chairman Scott, Ranking Member Thompson, and Members of 
Committee, thank you for holding today's hearing and inviting 
me to testify on the role of the USDA programs in addressing 
climate change in the next farm bill. I am Chuck Conner, 
President and CEO of the National Council of Farmer 
Cooperatives, and a founding Co-Chair of the Food and 
Agriculture Climate Alliance, which I am testifying on behalf 
of today.
    Formed 2 years ago, FACA breaks down the barriers that have 
existed between farm organizations and environmental groups on 
the issue of climate and gives producers a seat at the table in 
climate discussions. Today, with a steering committee of 24 
groups and a broader membership of over 80 organizations, FACA 
truly represents the food, agriculture, and forestry value 
chain from field to fork.
    As the Committee begins work on the next farm bill, we 
recommend that the process align with FACA's guiding 
principles. We believe that policies should be voluntary, and 
market- and incentive-based. That they should advance science-
based solutions and outcomes, and that they should promote 
resiliency and help rural economies better adapt to climate 
change.
    With these principles in mind, FACA has developed a robust 
set of policy recommendations that should be considered while 
writing the next farm bill. I would like to highlight just a 
few key examples. For a more comprehensive list, I refer the 
Committee Members to my written testimony.
    First, we believe that USDA's Natural Resources 
Conservation Service must be bolstered to effectively meet and 
address climate change. FACA recommends a 10 to 20 percent 
increase in funding for NRCS programs to be dedicated for new 
and existing greenhouse gas reductions, adaptation, and soil 
health efforts. We also support setting aside one percent of 
total mandatory funding from the new baseline for technical 
assistance to ensure producers receive critical on the ground 
support.
    Second, FACA recognizes that climate-smart agriculture 
requires reliable broadband. Without such a connection, many of 
the tools required to implement and measure best practices are 
simply out of reach of producers. We applaud Congress's efforts 
on broadband thus far; however, the need is great across the 
countryside, and many, many gaps remain. FACA hopes that this 
continues to be an area of focus in the farm bill process.
    Third, FACA has several recommendations on energy 
efficiency that could be included in the next farm bill. For 
example, the Rural Energy for America Program, or REAP, helps 
producers and rural small businesses install renewable energy 
systems and improve energy efficiency. Since this program is 
oversubscribed, we urge the Committee to increase funding to 
meet demand. In addition, expanding REAP's eligible entities to 
include farmer co-ops would facilitate wider adoption of 
renewable energy technology, such as anaerobic digesters.
    FACA also supports programs already underway at USDA to 
address climate change. I would like to give special mention to 
USDA's newly launched Partnerships for Climate-Smart 
Commodities. FACA is especially pleased to see the program 
structured consistent with our recommendations for climate 
pilot projects.
    FACA's original policy recommendations were developed in 
2020. They were not written with a farm bill in mind. In 
addition, the membership of FACA has grown considerably, both 
in numbers and diversity since that time. Because of this, FACA 
will soon start a process to update our own priorities for the 
upcoming farm bill to build upon the scope of our original 
recommendations. We look forward to working very, very closely 
with this Committee in this process.
    Finally, as the farm bill process begins, I believe it is 
critical that any efforts to address climate must provide 
access for all producers and rural communities, and address the 
historic inequalities that have been seen in many Federal farm 
programs.
    In conclusion, FACA believes that the next farm bill must 
be written to address climate policy. Responding to consumer 
demands, private-sector commitments to reduce emissions and 
grow green energy will only continue in the years ahead. The 
potential for added costs to be pushed down to producers makes 
it imperative that the next farm bill provide the tools to help 
producers remain profitable. With the right public policy, what 
could be an unsustainable cost we believe can be turned into 
something that will boost farm income and help rural 
communities.
    Mr. Chairman, again, thank you for holding this hearing 
today, and I look forward to responding to questions at the 
appropriate time.
    [The prepared statement of Mr. Conner follows:]

   Prepared Statement of Hon. Charles F. Conner, President and Chief 
 Executive Officer, National Council of Farmer Cooperatives; Co-Chair, 
         Food & Agriculture Climate Alliance, Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for holding today's hearing and inviting me to 
testify on the role of U.S. Department of Agriculture (USDA) programs 
in addressing climate change in the next farm bill. I am Chuck Conner, 
President and CEO of the National Council of Farmer Cooperatives 
(NCFC), and a founding co-chair of the Food and Agriculture Climate 
Alliance (FACA), which I am testifying on behalf of today.
    The nation's food, agriculture, and forestry industries are 
uniquely positioned and ready to contribute to our country's broader 
effort of reducing industry impacts on the climate. Farmer-owned 
cooperatives, which represent a wide spectrum of agricultural 
production, are already leaning into voluntary climate initiatives that 
are pro-producer and pro-environment. We are actively seeking ways to 
engage while ensuring producers can generate revenue from adopting 
climate-smart practices rather than have costs pushed down on them. 
That is why NCFC has come together with an array of industry groups 
that may not always reach consensus when it comes to agriculture policy 
but agree that we must have a seat at the table to inform the 
development of policies to help producers do their part.
    As we examine the many ways our industry can positively impact a 
changing climate, it is important to keep in mind that one size does 
not fit all when it comes to public policies and effective practices on 
the ground. What works for a dairy producer in the Northeast likely 
will not work for grain farmers in the Midwest, specialty crop growers 
out West or forest owners in the South. Climate policy as it relates to 
agriculture and forestry production must be voluntary, incentive-based 
and enable producers to remain profitable. The next farm bill provides 
the opportunity for this Committee to climatize existing programs to 
generate revenue for farmers while mitigating climate risk.
About FACA
    Over 2 years ago, NCFC, along with the American Farm Bureau 
Federation, Environmental Defense Fund and National Farmers Union, came 
together to collaborate and establish a set of principles for 
developing climate policy priorities that the food and agriculture 
sector could broadly support. These principles include supporting 
voluntary, market- and incentive-based policies; advancing science-
based outcomes; and promoting resiliency and helping rural economies 
better adapt to climate change. These policies were created with an 
overarching goal to do no harm, meaning FACA policies would be 
thoughtfully crafted, informed by broader potential consequences and 
tradeoffs, and account for inequities.
    FACA is committed to working with the Federal Government, and 
within our own memberships and networks, to support current and future 
farmers, ranchers, and forest owners of all genders, races, creeds, 
religions, sexual orientations, and backgrounds. When it comes to 
implementing farm bill and other agency programs, USDA should commit to 
having a broad, diverse and inclusive stakeholder group actively 
participate in the policy decision making process. USDA programs and 
incentives should be structured inclusively and designed to equitably 
distribute benefits and burdens of climate and agriculture policies.
    Paramount to success, the Alliance also has an underlying focus on 
the critical need for broadband access in rural America. Without a 
strong, reliable internet connection, farmers cannot obtain current 
information, utilize precision agricultural practices, record, track 
and analyze real-time data or meaningfully document progress on their 
farms. These capabilities are necessary to validate, verify and account 
for the outcomes of climate-smart practices.
    With this foundation, FACA welcomed four additional founding 
members including, The Nature Conservancy, National Alliance of Forest 
Owners, National Association of State Departments of Agriculture, and 
FMI--The Food Industry Association. The group went on to develop more 
than 40 policy recommendations in six areas of focus: soil health; 
livestock and dairy; forests and wood products; energy; research; and 
food loss, food waste and consumer engagement. There are several 
proposals highlighted below and included within FACA's recommendations 
that, if adopted, would provide opportunities for the food and 
agriculture sector to build stronger partnerships around climate-smart 
production strategies.
    Since the release of FACA's foundational policy recommendations in 
November 2020, the Alliance has worked diligently to grow support for 
the Alliance. Today, FACA consists of 24 steering committee members and 
a growing list of more than 80 supporting state and national NGOs and 
trade associations that guide our efforts to advocate and implement our 
policy priorities.
    A full list of FACA's policy recommendations and supporting members 
can be found at www.agclimatealliance.com.
FACA's Ongoing Outreach
    Since November 2020, our outreach and collaborative efforts have 
taken a whole of government approach. FACA representatives have met 
with various Administration officials ranging from the U.S. Department 
of Agriculture's (USDA) Secretary of Agriculture Tom Vilsack, the 
Undersecretary for Farm Production and Conservation (FPAC), and the 
senior climate teams from the Office of the Secretary (OSEC), the 
Natural Resources Conservation Service (NRCS), and the Office of the 
Chief Economist (OCE), as well as the Senior Advisor for Agriculture at 
the Environmental Protection Agency (EPA), and the Program Associate 
Director (PAD) for Climate, Energy, Environment and Science at Office 
of Management and Budget (OMB). We appreciate this Administration's 
willingness to work with our alliance and take a voluntary, market- and 
incentive-based approach to new initiatives that have been introduced 
to promote climate-smart agriculture and forestry practices.
    USDA has already taken innovative approaches toward supporting 
producers in adopting and maintaining climate-smart practices. For 
example, allowing feed additives to be eligible for Conservation 
Innovation Grants (CIG) to help producers and their partners better 
understand the impact various feed additives have on an animal's 
overall nutrition and on the environment. FACA identifies feed 
additives as a promising tool to address enteric emissions in ruminant 
livestock to reduce methane emissions resulting from enteric 
fermentation. However, regulatory roadblocks have added years onto the 
process of making these additives widely available to producers. This 
lag in approval is also impacting research and development investments 
in emissions reducing feed additives in the United States. Streamlining 
the approval process and facilitating more research and development in 
this field is just one important way USDA can help producers contribute 
to reduced GHG emissions and climate resiliency on the farm.
    Earlier this year, NRCS launched a new Cover Crop Initiative 
through the Environmental Quality Incentives Program (EQIP) to deliver 
$38 million to 11 states to help agricultural producers plant cover 
crops. Additionally, USDA's Risk Management Agency (RMA) introduced the 
Pandemic Cover Crop Program (PCCP) to help reduce producers' crop 
insurance premiums while maintaining cover crop systems.
    Members of FACA weighed-in multiple times with Administration 
officials during the development of USDA's newly launched Partnerships 
for Climate-Smart Commodities (PCSC), urging the Department to first 
take an analytical approach through pilot project funding to better 
understand barriers to adopting climate-smart practices and reliable 
methods for measurement and verification. FACA strongly supports USDA's 
newly launched PCSC program and we are pleased to see the program 
structured in a manner consistent with FACA's recommendations. USDA's 
Notice of Funding Opportunity will allow participants to form 
partnerships to help producers overcome barriers and be competitive in 
private markets.
    Members of FACA's steering committee also met with countless 
Members of Congress and their staff on both sides of the aisle to offer 
briefings on the group's principles and policy recommendations and 
discuss specific priorities such as appropriations requests and support 
for legislation. For example, FACA supports the Agriculture 
Environmental Stewardship Act, a bill that provides an important tool 
to incentivize investments in climate-smart technologies such as 
nutrient recovery and biogas systems that have multiple benefits to the 
environment and rural communities.
    Additionally, the Growing Climate Solutions Act, introduced in the 
House by Representatives Abigail Spanberger (D-VA) and Don Bacon (R-NE) 
and supported by a growing bipartisan list of more than 70 cosponsors, 
would serve as a foundation for setting standards and certification 
criteria to help foster the growth of private-sector carbon markets. 
The companion bill was led by Senators Debbie Stabenow (D-MI) and Mike 
Braun (R-IN) and passed by the Senate last year with an unprecedented 
show of bipartisan support in a vote of 92-8. If farmers are to be part 
of solving climate challenges, they need to rely on proven science, 
accurate data, and standardization to help get there--this bill does 
not offer the entire solution, but an important step in that direction. 
We appreciate Members of this Committee engaging with each other on 
this momentous piece of legislation.
    These are just two examples of legislation that embody FACA's core 
principles of supporting bipartisan, voluntary, and incentive-based 
policies that promote resilience to help rural economies better adapt 
to climate change.
FACA Recommendations for USDA
    Although FACA has not yet fully outlined a set of farm bill 
priorities, there are several areas within FACA's original policy 
recommendations worth examining as you prepare for the next farm bill.
    For example, FACA encourages USDA to make a stronger commitment to 
agricultural and forestry research to help provide farmers, ranchers, 
and forest owners with the tools they need to adapt, mitigate, and 
become more resilient to climate change. These recommendations include 
directing USDA's ARS to develop protocols for climate research trials 
to establish consistent standards for measurement and verification and 
provide more in GHG emission outcomes. NRCS also requires adequate 
funding to expand the number of soil sampling reference sites and 
formally codify USDA's Climate Hubs. In order for farmers to play an 
active role to meaningfully move the needle on climate mitigation, 
producers will first require reliable data that is field and practice--
generated over time.
    Additionally, climate advantageous inputs will continue to be an 
important tool for producers to enable conservation practices like 
tillage management and use of cover crops. FACA supports continued 
innovation and maximizing climate benefits through a strong, science-
based risk/benefit regulatory system. Access to safe and effective risk 
management tools is critical for growers to participate in these 
conservation practices and meet climate and sustainability goals.
    FACA highlights in its policy priorities how improved pasture and 
grazing management has the potential to play a substantial role in 
terrestrial carbon sequestration. More needs to be done to develop 
protocols and to deploy prescribed pasture and grazing practices to 
reduce emissions. NRCS should identify regions and practices with the 
greatest potential for carbon sequestration and methane emissions 
reduction, and should support research, development, and widespread use 
of decision-support tools for climate and land stewardship outcomes.
    There are several areas within FACA's recommendations related to 
energy efficiency that could be addressed by USDA. For example, the 
Rural Energy for America Program (REAP) is an important funding source 
for producers and rural small businesses needing assistance to install 
renewable energy systems or make energy efficiency improvements on 
their operations. However, REAP is an oversubscribed program and in 
critical need of additional funding to meet demand. Expanding REAP's 
eligible entities to include farmer co-ops would also facilitate wider 
adoption of renewable energy technology such as anaerobic digesters 
which are highly effective tools in reducing, destroying and converting 
methane and nitrous oxide emissions from livestock manure and other 
waste. FACA also recommends USDA conduct a study of on-farm energy 
initiatives to examine the status of on-farm efficiency adoption, rural 
renewable energy production and biofuels deployment. The study should 
also identify barriers and opportunities to increase on-farm energy 
initiatives and scale renewable fuels production.
    In recent years, this Committee has held hearings on food waste. As 
you may recall, food waste accounts for eight percent of all global 
greenhouse gas emissions and is an important factor when examining how 
the food and agriculture sector can reduce its climate impact. More can 
be done to provide education through USDA's Food and Nutrition Services 
initiative, Team Nutrition, to highlight food waste prevention and 
reduction in information geared toward teachers and students. The 
National School Lunch Program operates in nearly 100,000 public and 
nonprofit schools and residential childcare institutions, providing 
lunches to nearly 30 million children every day. Opportunities to 
educate through Team Nutrition more fully could result in behavioral 
changes that lead to less food waste. Furthermore, more information 
about preventing food waste in USDA's Foods in Schools product 
information sheets is a low-cost way to ensure participants in USDA 
nutrition programs receive storage information that could prevent food 
loss and waste and increase the effectiveness of these nutrition 
programs. We have been successful in achieving this priority through 
the FY22 appropriations process but look forward to identifying other 
meaningful ways for USDA to partner with FDA and EPA on food loss 
mitigation and food waste strategies to prevent wasted inputs, energy, 
and methane emissions in landfills.
    These are just a handful of FACA recommendations directed toward 
USDA that could be considered as part of the upcoming farm bill 
deliberations.
2023 Farm Bill Outlook
    Members of FACA will begin in earnest later this month to examine 
and develop priorities for the upcoming 2023 Farm Bill and will likely 
start by exploring ways to improve and/or expand current programs. With 
16 new members joining the steering committee since FACA's original 
policy priorities were released in 2020, it is reasonable to assume 
that the scope of the Alliance's policy priorities for the farm bill 
will expand. However, FACA's founding principles and original policy 
recommendations will guide any new policy priorities agreed upon by the 
Alliance and those priorities will continue to be adopted through the 
process of unanimous consent.
    Regardless of the specific farm bill priorities FACA ultimately 
agrees to, we believe that the next farm bill must address climate 
policy as it impacts American agriculture and forestry. Private sector 
commitments to reduce greenhouse gas emissions and grow green supply 
chains will continue to increase in the years ahead. The potential for 
added costs to be pushed down to producers makes it imperative that the 
next farm bill provide the necessary tools to help producers remain 
profitable for years to come. With the right public policy, what could 
be an unsustainable cost can be turned into something that will boost 
farm income and rural economies. This is even more crucial given the 
rising costs of inputs caused by inflation and growing geopolitical 
uncertainty. Necessary for success and wide-spread adoption will be 
support from both sides of the aisle.
    As the Administration and Congress take these steps, FACA believes 
it is critical that these programs provide equitable access for all 
producers and rural communities and address the historic inequalities 
that we have seen in many Federal farm programs. Further, as USDA 
begins efforts to receive input from producers and landowners on their 
work to reduce climate impacts, the Department should be proactive in 
promoting a diversity of representation on advisory committees and 
similar bodies to ensure programs work for all of agriculture.
    The timing is right for all industries, including agriculture, to 
come together and find solutions that will sustain production 
agriculture and forestry practices in our country, while preserving the 
ability for producers to be profitable and to pass along their way of 
life for generations to come. State Departments of Agriculture, 
environmental NGOs, agricultural lenders, and producer groups are well-
positioned to be trusted resources and partners for farmers, ranchers, 
and forest owners in what is often referred to as the ``Wild West'' of 
carbon markets and ecosystem services. We believe Congress and the USDA 
have important roles to play to provide a foundation for private market 
participation and to support the viability of our nation's agriculture 
and forestry producers through voluntary, market- and incentive-based 
policies and the passage of the 2023 Farm Bill.
    FACA looks forward to working with Members of this Committee and 
other policy makers as we finalize our priorities for the 2023 Farm 
Bill and work together to support America's farmers, ranchers, and 
forest owners in a future focused on climate.
About the National Council of Farmer Cooperatives
    Since 1929, NCFC has been the voice of America's farmer 
cooperatives. NCFC values farmer ownership and control in the 
production and distribution chain, the economic viability of farmers 
and the businesses they own, and vibrant rural communities. We have an 
extremely diverse membership, which we view as one of our sources of 
strength--our members span the country, supply nearly every 
agricultural input imaginable, provide credit and related financial 
services (including export financing), and market a wide range of 
commodities and value-added products.
    American agriculture is a modern-day success story. America's 
farmers produce the world's safest, most abundant food supply for 
consumers at prices far lower than the world average. Cooperatives 
differ from other businesses because they are member-owned and are 
operated for the shared benefit of their members.
    Farmer cooperatives enhance competition in the agricultural 
marketplace by acting as bargaining agents for their members' products, 
providing market intelligence and pricing information, providing 
competitively priced farming supplies and vertically integrating their 
members' production and processing. There are nearly 2,000 farmer 
cooperatives across the U.S. and earnings from their activities (known 
as patronage) are returned to their farmer-members, helping improve 
their members' income from the marketplace.

    The Chairman. And thank you, Mr. Conner, for your excellent 
remarks and testimony.
    And now, Ms. Duncanson, please begin when you are ready.

   STATEMENT OF KRISTIN WEEKS DUNCANSON, OWNER AND PARTNER, 
               DUNCANSON GROWERS; MEMBER, AGree 
    ECONOMIC AND ENVIRONMENTAL RISK COALITION, MAPLETON, MN

    Ms. Duncanson. Thank you very much. Good morning to 
everyone. I am Kristin Weeks Duncanson, representing the AGree 
Coalition. I would like to thank Chairman Scott, Ranking Member 
Thompson, and all the Members of the Committee for an 
opportunity to testify today. As part of my testimony, I will 
also be submitting some documents from the coalition with my 
official statement.
    My husband, Pat, and I own Highland Family Farms in 
Mapleton, Minnesota. We grow soybeans, corn, small grains, and 
raise hogs. We practice conservation on our acres. We are 
transitioning some acres to organic production, and are even 
considering how we can grow saplings on some marginal lands to 
help supply reforestation efforts in the northern part of our 
state.
    I am also a member of the AGree Coalition, a group that 
builds consensus around ideas that will make agriculture more 
resilient, profitable, and sustainable. As a businessowner and 
farmer, better information is the foundation of how I manage 
risk from disruptions to our operation due to pandemics, wars, 
or climate change.
    This Committee has repeatedly asked how do we convince 
farmers to adopt conservation practices? The answer is simple. 
It is better data--data that is up-to-date, accessible, and can 
be analyzed to show the costs and benefits of conservation 
practices. USDA and private-sector companies both collect an 
enormous amount of data from farmers. USDA has the opportunity 
to use our data to advance widespread adoption of conservation. 
AGree's farmer-centric approach is grounded in the 
understanding that farmers must see how conservation practices 
benefit farm profitability in order to bring adoption up to 
scale.
    USDA must link and analyze data across mission areas and 
make this data available to qualified, trusted, academic 
institutions and researchers so that they can show that it 
works. It is easy to get bogged down in the concerns about data 
privacy or who gets access. I answered those criticisms by 
pointing out that USDA for years has shared confidential data 
with land-grant universities under strict guidelines. Processes 
to protect privacy, including requirements that all the 
published reports only use aggregated non-identifiable data 
already exist. Researchers who break a contract and reveal 
personal data face jail time.
    I recently jotted down all the data that we report to USDA 
for farm programs, conservation programs, and for crop 
insurance, plus the data I report to my insurance agent and the 
data report to my lender, and to the Minnesota Pollution 
Control Agency. All that data or most of it is integrated on 
our John Deere platform. It is helpful to us, certainly, and it 
is also helpful to them. They are going to use that data to 
sell me more products and services.
    However, not all farmers participate in this private-sector 
data revolution. It is the role of USDA and Congress to make 
sure that the new insights coming from analyzing big data are 
available to all farmers.
    One example of how USDA could better use the data is to 
improve the connections between conservation and crop 
insurance. Cover crops, crop rotation, and rotational grazing 
make crop and rangeland more resilient to drought, bring more 
water holding capacity from deluges we are increasingly seeing, 
and save money for farmers through reduced pesticides.
    Yet these practices are peripheral to crop insurance and 
are recognized after many years of adoption, as we change our 
APH. This can be 10, 20, or 30 years, depending upon how many 
crops you are growing.
    You see the problem. Farmers use conservation and they 
become less risky and more resilient. That probability of loss 
decreases as their conservation increases, but that is only 
recognized through crop insurance as an APH that takes decades 
to establish.
    Let me be abundantly clear. We support the Federal Crop 
Insurance Program and the reliability it offers to farmers. We 
also support that crop insurance could recognize or perhaps 
even incentivize farmers to adopt conservation to reduce risk 
to an uncertain future. Agriculture is going to change 
dramatically over the next span of the next farm bill. Let's 
plan for that future.
    Thank you again for this opportunity. I only wish I could 
be there in person, but it is a beautiful day here in 
Minnesota, and we are getting ready to plant.
    [The prepared statement of Ms. Duncanson follows:]

   Prepared Statement of Kristin Weeks Duncanson, Owner and Partner, 
   Duncanson Growers; Member, AGree Economic and Environmental Risk 
                        Coalition, Mapleton, MN
Framing the Conversation
    Good morning. I am Kristin Weeks Duncanson, representing the AGree 
Coalition. I'd like to thank Chairman Scott, Ranking Member Thompson, 
and all the Members of this Committee for the opportunity to testify 
today.
    As part of my statement, I will be submitting several documents 
from the work of the AGree Coalition for the record (see Appendix).
    I was 19 years old and an intern for a Senator from Minnesota when 
I worked on my first farm bill. Since then, I have been engaged in farm 
bills as a Senate staffer, commodity group leader, but most 
importantly, as a farmer from southern Minnesota.
    My husband Pat and I own Highland Family Farms in Mapleton, 
Minnesota. We grow soybeans, corn, small grains, and raise hogs. On our 
farm, we are trying to become more resilient, and we are always 
planning for the future. Practicing conservation is how we manage the 
increasing risks to our farm from extreme weather.
    We practice conservation on all our acres, we are transitioning 
some acres to organic production, and we are thinking about how we can 
grow saplings on marginal lands to supply reforestation efforts. We 
work towards economic, environmental, and community sustainability with 
every decision we make in our operation.
    I am also a member of the AGree Coalition, a group housed at 
Meridian Institute, that builds consensus around ideas that will make 
agriculture more resilient, profitable, and sustainable. Today's 
hearing is timely as the Committee turns to how the next farm bill will 
help farmers--and our whole food system--reduce risk and address a 
changing climate.
    As a business owner and farmer, better information is the 
foundation of how I manage risks from disruptions to my operation due 
to pandemics, wars, or climate change. I am always thinking about how I 
can get more information about the things I can't control, but that 
affect my farm.
    This Committee has repeatedly asked, ``How do we convince more 
farmers to adopt conservation practices?'' The simple answer is better 
data. Data that is up to date, accessible, and can be analyzed to show 
the costs and benefits of conservation practices.
    The AGree Coalition sees agricultural data as central to programs 
throughout the farm bill. USDA and private-sector companies both 
collect an enormous amount of data from farmers. USDA has an 
opportunity to use our data to advance widespread adoption of 
conservation. AGree's farmer-centric approach is grounded in the 
understanding that farmers must see how conservation practices benefit 
farm profitability in order to bring adoption to scale.
    As programs are developed by both government and the private-sector 
to incentivize new adoption of climate-smart practices, many farmers 
and policymakers are also asking how the contributions of ``early 
adopters,'' the early innovators of these practices, will be recognized 
and rewarded. The most sustainable way to both maintain and expand 
climate-smart agricultural practices is to build the business case for 
conservation adoption through new data collection and research by USDA. 
Building the evidence base for the connection between conservation 
practices and risk can help us embed incentives for the adoption and 
maintenance of climate-smart agricultural practices throughout markets, 
finance systems, regulatory processes, and crop insurance programs.
    USDA must link and analyze data across mission areas; create 
incentives for farmers to submit additional data they want to report 
about their farming practices; and make this data available to 
qualified, trusted academic institutions and researchers so they can 
show us what works.
    It's easy to get bogged down in concerns about data privacy or who 
gets access. I answer those criticisms by pointing out that USDA has, 
for years, shared confidential data with land-grant universities. 
Processes to protect privacy--including requirements that all published 
reports use only aggregated, non-identifiable data--already exist. 
Researchers who break a contract and reveal personal data face jail 
time.
    When you ask farmers, ``Should your data be combined with other 
farm data to help you understand what conservation practices will work 
on your farm, helping you to reduce your risk and become more 
profitable?'', the answer is yes. Most farmers are just fine with 
sharing most data that they already are reporting. But USDA is woefully 
behind when it comes to managing data or having the ability to analyze 
what they do collect from farmers about the outcomes of conservation.
    I recently jotted down all the data I report to USDA--for the farm 
program, for conservation programs, for crop insurance, plus data I 
report to my crop insurance agent, the data I report to my lender and 
to the Minnesota Pollution Control Agency. All that data is already 
integrated on the John Deere platform. It's helpful to me, certainly. 
And it's also helpful to them. They're going to use it to sell me more 
stuff.
    However, not all farmers are participating in this private-sector 
data revolution. It is the role of USDA and Congress to make sure that 
the new insights coming from analyzing big data are available to all 
kinds of farmers.
    The promise of big data is only fulfilled if we use it for the 
benefit of farmers. It does none of us any good to be siloed at USDA 
like it is now, with the private-sector investing and marketing for 
only a few crops, to only the most tech savvy farmers they select.
    One example of how USDA can use data to improve tools for farmers 
is by using data to improve the connections between conservation and 
Federal crop insurance. Cover crops, no-till, crop rotations, 
rotational grazing, and other conservation practices make crop and 
rangeland more resilient to drought, bring more water-holding capacity 
for the deluges we increasingly see, and save farmers money through 
reduced pesticide applications. Yet these practices are peripheral to 
the crop insurance program, and only recognized many years after 
adoption when a 10 year APH (Actual Production History, the 10 year 
average of a farmer's yields) fully incorporates that less-risky 
system. Or after 20 years, for a farmer growing two crops. Or 30, for 
the farmers growing three.
    You see the problem: farmers that use conservation become less 
risky and more resilient. Their probability of loss decreases. But that 
is only recognized in crop insurance through an APH that takes decades 
to establish. Hence, many farmers are talking about improvements.
    Let me be clear--we support the Federal Crop Insurance Program and 
the reliability it offers to farmers. We also support that crop 
insurance should recognize and even incentivize farmers to adopt 
conservation to reduce risk and resilience on the way to an uncertain 
future.
    Agriculture is going to change dramatically over the span of the 
next farm bill. By the time we get to 2028--when the bill you are about 
to write will expire--this country and farmers like me who grow our 
food are going to be different. Those who purchase our products will be 
different. Let's plan for the future, rather than addressing the needs 
of the past. Thank you for this chance to share my vision for the next 
5 years.
                                Appendix
Table of Contents
Agricultural Data and Risk Management

    The Case for Next Generation Crop Insurance

CFAD Papers

    Recognizing Early Innovators: Recommendations for Maintaining and 
Expanding Climate-Smart Agriculture
    Recommendations for Investing in Working Lands Conservation
    Recommendations to Strengthen USDA's Support of Research & Science 
for Climate-Smart Agriculture
The Case for Next Generation Crop Insurance
June 2021
Foreword
    Federal crop insurance is a key risk management strategy for the 
majority of commodity crop producers. Since 2015, the AGree Economic 
and Environmental Risk (E2) Coalition has sought to better understand 
the risk reduction benefits of agricultural conservation practices and 
how these benefits are accounted for in the Federal Crop Insurance 
Program (FCIP). This paper summarizes important insights from the 
Coalition's work on Federal crop insurance and conservation.
    In sharing what we have learned, AGree hopes to inform current 
policy debates in a way that drives broader adoption of agricultural 
conservation practices and strengthens the FCIP by improving 
understanding of how conservation practices reduce risk and improve 
farmers' economic outcomes, enhance environmental performance, 
sequester carbon and support working lands resilience.
    Farmers' investments in practices that improve soil health have the 
potential to increase resilience to severe weather events, reduce 
environmental impacts, and increase productivity over time. Yet, while 
conservation practices have the potential to impact both producer 
profitability and the environment, more work must be done to fully 
understand how conservation practices reduce risk and how to best 
reflect those risk-reduction benefits in crop insurance and 
conservation policy, data innovation efforts and rating models.
    AGree's work is intended to support and inform the work of the Risk 
Management Agency--as well as other USDA agencies such as the Farm 
Services Administration (FSA) and Natural Resources Conservation 
Service (NRCS)--to promote climate-smart agriculture through Federal 
crop insurance and other programs.
    We hope you find this paper to be a useful resource.
    
    
Deborah Atwood,
Executive Director, AGree.
Contents
Executive Summary
Introduction
The Risk Management Case for Conservation Practices
Policy Impediments to Conservation Practice Adoption
Assess the FCIP Rating Model
Harness the Power of Agriculture Data
The Road Ahead
References Cited
Executive Summary
    Federal crop insurance, a major component of the Federal farm 
``safety net,'' is a central component of risk management for the vast 
majority of commodity crop producers. Since 2015, the AGree Economic 
and Environmental Risk Coalition \1\ (AGree E2 Coalition) has sought to 
better understand the risk reduction benefits of agricultural 
conservation practices and how these benefits are accounted for in the 
Federal Crop Insurance Program (FCIP). The AGree E2 Coalition grew from 
the foundational work of AGree, an initiative designed to elevate food 
and agriculture as a national priority. We are housed within Meridian 
Institute,\2\ a mission-driven nonprofit consultancy that builds 
understanding, guides collaboration and drives action to address our 
world's complex challenges.
---------------------------------------------------------------------------
    \1\ https://foodandagpolicy.org/.
    \2\ https://merid.org/.
---------------------------------------------------------------------------
    This paper summarizes important takeaways to date from the E2 
Coalition's work on Federal crop insurance and conservation. In sharing 
what we have learned, AGree hopes to inform current policy debates in a 
way that drives broader adoption of agricultural conservation practices 
and strengthens the FCIP by better understanding how conservation 
practices reduce risk and improve farmers' economic outcomes, enhance 
environmental performance, sequester carbon, and support working lands 
resilience.
    The agriculture sector is uniquely impacted by weather. Building 
landscape resilience is vital to protecting agricultural yield and 
farmers' livelihoods today and into the future. At the same time, 
agriculture is a significant contributor to greenhouse gas emissions, 
while having the capacity to serve as a carbon sink.
    A growing body of evidence--including work supported by AGree--
shows that farmers who use conservation practices, such as cover 
cropping, conservation tillage, diversified crop rotation, and 
management-intensive rotational grazing, reduce yield risk, which, in 
turn, could result in fewer insurance claims. Research shows that 
conservation practices can improve water quality and soil health by 
increasing soil organic matter, and, relatedly, healthier soils reduce 
risk, especially in very dry or wet conditions, as well as sequester 
carbon.
    The Risk Management Agency (RMA), an agency within the United 
States Department of Agriculture (USDA), implements the FCIP and has 
begun to look at how conservation practice implementation can reduce 
risk. AGree's work is intended to support and inform the work the 
Agency has begun to understand the effects of conservation practice 
adoption on yield variability, which is a measure of risk used by RMA. 
This effort will require using robust data analysis to determine the 
impact of weather, conservation practices, soil type and other 
variables on yield risk. Further, policy alignment between agencies--
including RMA, Farm Services Administration (FSA), and Natural 
Resources Conservation Service (NRCS)--that serve producers is needed 
to ensure that program design and implementation work together to 
facilitate climate-smart agriculture while reducing administrative 
barriers and challenges for farmers seeking to adopt and expand the use 
of agricultural conservation practices.
    Through our work over the last several years, we have identified 
the following key areas where policy improvements can support RMA and 
drive next generation crop insurance for the benefit of farmers, the 
environment and taxpayers now and into the future.

   Data Innovation: Modernize data collection, 
        interoperability, storage and sharing while protecting producer 
        privacy.

   Crop Insurance and Conservation Policy: Improve crop 
        insurance and conservation policies so that they work better 
        for farmers and reduce risk while adopting new policies that 
        encourage adoption of conservation practices that reduce risk.

   FCIP Rating Model: Enable research that helps strengthen the 
        FCIP risk rating model by addressing knowledge gaps, and 
        utilize data to assess and improve on-the-ground outcomes.
Introduction
    Federal crop insurance is a key risk management strategy for the 
majority of commodity crop producers. The three largest commodity 
crops--corn, soy and wheat--are overwhelmingly insured under the 
Federal Crop Insurance Program (FCIP), with over 90% of corn and soy 
acres and over 85% wheat acres enrolled (Congressional Research 
Service,\3\ 2021). These insured acres equate to an enormous landmass 
of over 195 million acres (Farm Bureau, 2018). Crop insurance is one of 
the largest expenditures under the farm bill, representing about 37% of 
the total farm portion of the farm bill [i] or around $10 
billion per year (Congressional Budget Office,\4\ 2018).
---------------------------------------------------------------------------
    \3\ https://fas.org/sgp/crs/misc/R46686.pdf.
    \[i]\ The ``farm'' (or producer-focused) portion of the farm bill 
excludes the Supplemental Nutrition and Assistance Program.
    \4\ https://www.cbo.gov/publication/54880.
---------------------------------------------------------------------------
    Every year, farmers have weather-related losses, but in some years, 
such as in 2012 or 2019, years that saw substantial drought and 
flooding respectively, the safety net is relied on expansively, with 
billions paid in insurance claims (Rippey, 2015; Schnepf,\5\ 2020). For 
example, 2019 saw record ``prevent plant indemnities'' with $4.2 
billion paid to farmers who were not able to plant because of very wet 
conditions (Schnepf, 2020). Given the high enrollment and significant 
Federal subsidization,[ii] crop insurance has the potential 
to drive broader adoption of agricultural conservation practices that 
reduce risk and provide a host of economic and ecological co-benefits 
including, for example, sequestering carbon and improving water 
quality.
---------------------------------------------------------------------------
    \5\ https://www.everycrsreport.com/files/
20200115_R46180_8949d2d76b218af49578ca613a2b14
8cf8f06ddc.pdf.
    \[ii]\ The average Federal premium subsidy between 2008-2017 was 
62% (Congressional Research Service, 2018) (https://fas.org/sgp/crs/
misc/IF10980.pdf).
---------------------------------------------------------------------------
    Reducing agricultural risk and building landscape resilience are 
essential as the impact of climate change accelerates (SARE,\6\ 2018). 
As the atmosphere warms, severe weather events are increasing in 
frequency and climate changes are occurring. The Midwest, where the 
majority of commodity crops are produced, is generally becoming wetter 
in the spring, while the summers are becoming drier and hotter, as is 
much of the Western Plains. The Fourth National Climate Assessment \7\ 
(2018) has summarized climate-related challenges in the Midwest as 
follows:
---------------------------------------------------------------------------
    \6\ https://www.sare.org/wp-content/uploads/Cultivating-Climate-
Resilience-on-Farms-and-Ranches.pdf.
    \7\ https://nca2018.globalchange.gov/chapter/21/.

          Increases in warm-season absolute humidity and precipitation 
        have eroded soils, created favorable conditions for pests and 
        pathogens and degraded the quality of stored grain. Projected 
        changes in precipitation, coupled with a rise in extreme 
        temperatures before mid-century, will reduce Midwest 
        agricultural productivity to 1980 levels without major 
---------------------------------------------------------------------------
        technological advances.

    Mounting scientific evidence shows that conservation practice 
implementation reduces crop yield risk during times of drought, heavy 
precipitation and flooding. Additionally, conservation practices 
provide multiple environmental benefits, including improved water 
quality and soil moisture management, carbon sequestration, and habitat 
(U.S. Farmers and Ranchers Alliance Ecosystem Services Science Advisory 
Council,\8\ 2019). These co-benefits may also create new funding 
streams for farmers as carbon and water quality markets come online.
---------------------------------------------------------------------------
    \8\ https://www.aspeninstitute.org/wp-content/uploads/2019/05/
Harvest-Science-Paper-FI
NAL.pdf.

    To help inform work under way by U.S. Department of Agriculture 
(USDA), as well as, broader policy efforts to improve farm policy, this 
---------------------------------------------------------------------------
paper provides AGree's synthesis on the following issues:

   The risk-reducing effect of conservation practices;

   Barriers to conservation practice adoption by producers in 
        the FCIP; and

   Critical need for improved agriculture data collection, 
        utilization and policy alignment among USDA agencies that serve 
        farmers.
The Risk Management Case for Conservation Practices
    A growing body of research shows that conservation practices are an 
effective risk reduction strategy. As noted above, the 2019 planting 
spring season was the wettest on record in many areas (USDA,\9\ 2019). 
As a result, farmers submitted over $4 billion in insurance claims for 
nearly 20 million acres where wet conditions prevented farmers from 
planting a cash crop within the time required by insurance, a 
circumstance known as prevent plant or prevented planting 
(Congressional Research Service,\10\ 2020).
---------------------------------------------------------------------------
    \9\ https://www.usda.gov/media/blog/2019/06/14/nations-wettest-12-
month-period-record-slows-down-2019-planting-season.
    \10\ https://www.everycrsreport.com/files/
20200115_R46180_8949d2d76b218af49578ca613a2b148cf8f06ddc.pdf.
---------------------------------------------------------------------------
    A recent National Cover Crop Survey (Survey) found that 78.6% of 
the respondents reported wet planting conditions that delayed planting, 
but that 78% of farmers who planted cover crops did not have prevent 
plant claims (2019-2020 National Cover Crop Survey \11\). In addition, 
the Survey found promising results for ``planting green,'' the practice 
of seeding a cash crop directly into a living cover crop and allowing 
both to grow for a period. Despite saturating spring rains, 54.3% of 
respondents reported they were able to plant cash crops sooner in 
green-planted fields than in fields where cover crops were terminated 
early or were not present (2019-2020 National Cover Crop Survey). Many 
producers also reported other benefits, with 70.5% respondents 
reporting that the planting green improved weed control when compared 
with their other fields (2019-2020 National Cover Crop Survey).
---------------------------------------------------------------------------
    \11\ https://www.sare.org/wp-content/uploads/2019-2020-National-
Cover-Crop-Survey.pdf.
---------------------------------------------------------------------------
    The Conservation and Crop Insurance Research Pilot,\12\ a 
collaboration between AGree, researchers at the University of Illinois, 
and USDA, will shed further light on the impact of cover crops on risk 
management during wet years. Under the pilot project, researchers are 
looking at USDA data and other information for six states--Indiana, 
Illinois, Iowa, Missouri, Minnesota, and South Dakota--to better 
understand how the use of cover crops and no-till affected corn and 
soybean planting dates in the extremely wet spring of 2019, whether 
planting occurred at all (prevent plant crop insurance claim declared), 
and what impact the conservation practice(s) had on 2019 yields. 
Results of this data analysis effort should be available by early 2022.
---------------------------------------------------------------------------
    \12\ https://s31207.pcdn.co/wp-content/uploads/sites/4/2020/12/
Frequently-Asked-Questions.pdf.
---------------------------------------------------------------------------
    At the other end of the weather spectrum, soil organic material 
(SOM), of which soil organic carbon is the main component (Lal, 2016), 
has been found to protect yields during drought conditions. Higher 
levels of SOM improves water retention, thereby mitigating against the 
impact of drought. Further, SOM is important to overall soil health and 
carbon sequestration, which is key to the growth of terrestrial carbon 
sequestration markets (reThink Soil: A Roadmap for U.S. Soil Health, 
The Nature Conservancy,\13\ 2016). Cover cropping, no-till, and 
conservation tillage increase soil organic matter (Chambers, et al., 
2016; Poeplau and Don, 2015; Yu,\14\ et al., 2020).
---------------------------------------------------------------------------
    \13\ https://www.nature.org/content/dam/tnc/nature/en/documents/
rethink-soil-external-paper-103116.pdf.
    \14\ https://iopscience.iop.org/article/10.1088/1748-9326/ab6393.
---------------------------------------------------------------------------
    Consistent with the benefits associated with SOM and its 
relationship with cover cropping and tillage, a recent U.S. study on 
maize (corn), concluded that soil organic matter protects yields and 
lowers crop insurance payouts (Kane, et al., 2021). Further, using long 
term evidence, Bowles, et al., found that using crop rotation 
diversification across North America increased maize yield in all 
weather conditions, including drought (Bowles, 2020). Introducing 
advanced grazing management systems, such as management intensive 
grazing, into cropping systems has also been shown to improve soil 
health and, relatedly, increase soil organic material (Wallace 
Center,\15\ 2018).
---------------------------------------------------------------------------
    \15\ https://pastureproject.org/wp-content/uploads/2020/02/CIG-
Full-Trial-Report.pdf.
---------------------------------------------------------------------------
Policy Impediments to Conservation Practice Adoption
    Although the use of cover crops has increased over the last decade, 
only a small percentage of cropland acres--about 3.9% of all U.S. 
cropland--is planted in cover crops (2017 Agriculture Census \16\). 
While important changes were made in the 2018 Farm Bill related to 
cover crops and crop insurance eligibility, policy impediments--both 
actual and perceived--hinder conservation practice adoption by farmers 
who participate in the FCIP. These challenges persist \17\ despite 
RMA's recent changes to cover cropping guidelines intended to make it 
easier for producers to adopt the practice. Policy barriers fall into 
three main categories:
---------------------------------------------------------------------------
    \16\ https://farmdocdaily.illinois.edu/2019/07/cover-crops-2017-us-
census-of-agriculture.html.
    \17\ https://foodandagpolicy.org/research-insights-how-does-crop-
insurance-impact-on-farm-conservation-practices/.

  1.  Policies that prevent or make adoption of conservation practices 
---------------------------------------------------------------------------
            challenging;

  2.  Lack of information regarding the compatibility of conservation 
            practices with FCIP; and

  3.  Lack of incentives to implement conservation practices in the 
            first place.

    For historical context and as an illustrative example, prior to the 
2018 Farm Bill, farmers faced the danger that an indemnity claim would 
be denied if they did not either adhere to USDA guidelines regarding 
cover crop termination or receive advanced approval for deviations. 
This policy discouraged many producers from planting cover crops. To 
address this barrier, the 2018 Farm Bill included language that 
provided cover crops were to be considered good farming practices (GFP) 
so that termination deviations would be treated similarly to other farm 
management decisions.[iii] In response, RMA removed the 
advanced approval requirement, re-issued slightly modified termination 
``guidelines'' to clarify termination options for cover crops, and 
provided that cover cropping, including termination issues, could also 
use the good farming practices process if necessary. This shift in 
policy is important for reducing impediments to adoption. The guidance 
document, however, requires ongoing refinement and expansion by the 
Natural Resources Conservation Service (NRCS) so that the termination 
guidance can be used by innovative farmers without the need to go 
through the GFP process.
---------------------------------------------------------------------------
    \[iii]\ Section 11107, The Agriculture Improvement Act of 2018 
(2018 Farm Bill), P.L. No. 115-334.

    Despite this change, however, over a quarter of farmers in a recent 
survey expressed the belief that crop insurance is a barrier to cover 
crops, and 34.7% did not know whether or not crop insurance is a 
---------------------------------------------------------------------------
barrier (Fleckenstein, et al., 2020).

    This lack of knowledge indicates the need for RMA and NRCS to take 
an affirmative and coordinated outreach and education role to enhance 
awareness and understanding of the multiple benefits of cover crops.
    Moreover, crop insurance coverage concerns continue for other 
conservation practices that are endorsed by NRCS, but where RMA must 
determine that implementation does not impact historic yield or 
maturation. This challenge of FCIP keeping up with conservation 
innovations that reduce risk is an impediment to broader adoption of 
conservation practices, as well as improved economic and environmental 
outcomes for producers. Fortunately, the secretary of the USDA has the 
authority to address this misalignment by improving the coordination 
between agriculture agencies in policy development and program 
delivery, strategies that are also necessary to attain the 
Administration's ambitious climate goals.
    The third challenge is the lack of incentives to adopt risk-
reducing conservation practices. The reasons why farmers choose not to 
implement conservation practices are multifactorial, but economic 
concerns are often an important factor in their decision-making (2019-
2020 National Cover Crop Survey). To partly address this concern, 
recently Illinois,\18\ Iowa \19\ and Indiana \20\ partnered with RMA to 
provide a $5 per acre crop insurance premium discount for eligible 
farmers enrolled in FCIP who implement cover crops. Farmer demand for 
this modest incentive out-paced available funding.
---------------------------------------------------------------------------
    \18\ https://www2.illinois.gov/sites/agr/Plants/CoverCrops/Pages/
default.aspx.
    \19\ https://www.cleanwateriowa.org/cropinsurancediscount.
    \20\ https://www.in.gov/isda/divisions/soil-conservation/cover-
crop-premium-discount-program/.
---------------------------------------------------------------------------
    Recently, RMA built on the overwhelming success of these state 
programs through the Pandemic Cover Crop Program (PCCP), a new 
initiative which offers a $5 per acre premium discount for the 2021 
crop year. To be truly effective, any incentive needs to be ongoing and 
available on an annual basis so that it encourages greater adoption and 
not only rewards past practice. The incentive should be extended to 
farmers enrolled in Whole Farm Revenue Protection, so the program is 
inclusive of diversified operations, including specialty crops. 
Additional funding for RMA to incorporate cover crop reporting into the 
Acreage Crop Reporting Streamlining Initiative (ACRSI) would also make 
cover crop reporting easier in the future. Finally, as the PCCP is 
implemented, we encourage USDA to capture and publish the results of 
this incentive to further demonstrate our understanding about the risk-
reduction benefits of cover crops and ensure that Federal crop 
insurance policies acknowledge the connection between conservation, 
soil health and agricultural risk.
    RMA's initiative to support cover crops in the current crop year is 
a positive step, but more must be done to accelerate the adoption of 
cover crops and other conservation practices. As we discuss further 
below, despite growing evidence that conservation practices reduce 
risks, the risk rating model used by RMA may not adequately recognize 
the risk reduction benefits of soil type, conservation practice 
adoption and other variables.
Assess the FCIP Rating Model
    In order to more accurately and fairly assess risk, research is 
needed to help assess and, as needed, strengthen the FCIP risk rating 
model by addressing knowledge gaps and utilizing data to improve on-
the-ground outcomes. In particular, the FCIP rating model should 
evolve--as supported by research--to consider the risk reduction 
benefits of conservation practices in the context of increased climate 
risk. Currently, RMA relies primarily on average historical yields 
(Actual Production History or APH) and loss costs to determine baseline 
insurable yield levels and risk rates but does not consider soil health 
improvements from conservation practice use. In particular, there is a 
lag between when soil health improvements will affect yield variability 
and performance in reality versus when they will be reflected in the 
RMA risk assessment (actuarial data). In the case of APH, it could take 
years for the soil health improvements to be fully reflected. In the 
case of rates, since loss experience--the amount of loss an insured 
farm experiences--of producers using conservation practices are pooled 
with loss experience in fields not using conservation practices, rates 
may be biased against conservation practice use relative to 
conventional practices.
    A watershed 2017 study published in the American Journal of 
Agricultural Economics by Woodard and Verteramo-Chiu \21\ explored the 
feasibility of using soil data when determining crop insurance 
guarantees and rates. The researchers used high-resolution data sets 
for soil type, one indicator of soil quality and carbon sequestration 
potential, and overlaid other data regarding soil health attributes 
such as available water storage and soil organic carbon. The study 
found that estimating risk using available soil data sets is feasible. 
Further, the researchers found statistically and economically 
significant differences in premium pricing between RMA's risk ratings 
and the risk ratings calculated when incorporating soil data. In 
particular, RMA's ratings generally underpriced insurance premiums for 
low quality fields and overpriced high-quality fields, an artifact of 
pooling dissimilar risks in RMA's rating.
---------------------------------------------------------------------------
    \21\ https://onlinelibrary.wiley.com/doi/abs/10.1093/ajae/aaw099.
---------------------------------------------------------------------------
    Other contemporary research confirms the risk reduction benefits of 
healthy soils. Following Woodard and Verteramo-Chiu (2017), Kane, et 
al. (2021) analyzed county data from 2000 to 2016 related to corn 
yield, drought and crop insurance claims. The data analysis showed that 
``counties with higher soil organic matter are associated with greater 
yields, lower yield losses, and lower rates of crop insurance payouts 
under drought,'' corroborating earlier work. Another recent study 
analyzed long term yield data sets for maize in the United States and 
Canada and found that diverse crop rotations increased yield across all 
growing conditions by 28% (Bowles, et al., 2020). As severe weather 
becomes more commonplace and temperatures rise, the information from 
such studies likewise becomes increasingly more important to gather and 
apply.

    Ongoing research will further enhance our understanding about the 
role of soil health and conservation practices in risk reduction.

    In addition to the Conservation and Crop Insurance Research Pilot 
discussed above, research is underway through RMA's 508(h) process, 
which provides an avenue for third parties to propose new insurance 
products that could be beneficial to producers to determine how and in 
what combination (``stacked'') conservation practices reduce risk. 
These 508(h) projects, if approved by the Federal Crop Insurance 
Corporation (FCIC) Board, could provide information for new insurance 
rating methodologies that explicitly consider conservation practices. 
The Conservation and Crop Insurance Research Pilot is an example of why 
the ability of third parties, such as companies, NGOs and others, to 
develop plans of insurance through the 508(h) process must be 
maintained and protected.
Harness the Power of Agriculture Data
    Essential to improving the farm safety net to meet today's 
challenges is agriculture data.

    Agribusiness has long understood the value of data in driving 
improved outcomes on the farm. For years now, companies like John Deere 
and The Climate Corporation have been collecting and using big data 
sets to analyze and improve productivity at the field level. USDA has a 
growing awareness of the need to modernize its approach to data 
collection and is taking affirmative steps to address multiple data 
silos, data gaps and a lack of data interoperability in order to 
improve its program implementation and to support extramural research. 
Consequently, supporting these efforts across agencies by addressing 
legal and policy gaps is essential to fully modernize USDA's approach 
to data collection and utilization.
    AGree has been working with diverse stakeholders to help address 
USDA's data collection and utilization issues.\22\ For example, the 
2018 Farm Bill included language at section 12618 that required the 
USDA to assess and report to Congress its current conservation 
datasets, and the effects of conservation practices on farm and ranch 
productivity. USDA's report to Congress inventoried major data sets but 
also described the limited authority to facilitate extramural research 
into the impacts of conservation practices on 
productivity.[iv]
---------------------------------------------------------------------------
    \22\ https://foodandagpolicy.org/wp-content/uploads/sites/4/2019/
09/2018-July-Ag-Data_Im
proving-Productivity-while-Protecting-Privacy.pdf.
    \[iv]\ Report on file with Meridian Institute.
---------------------------------------------------------------------------
    Since the passage of the 2018 Farm Bill, USDA has made inroads in 
addressing agriculture data shortcomings, but administrative barriers 
and legal gaps remain that stand in the way of harnessing the power of 
modern data analysis to improve programmatic outcomes. The good news is 
that these issues are solvable. For example, Senators Klobuchar and 
Thune supported the aforementioned agricultural data language in the 
2018 Farm Bill that helped provide the impetus to USDA's current data 
efforts, including the Crop Insurance and Conservation Practice 
Research Pilot.\23\ Currently, climate and other bills being considered 
by Congress, as well as a commitment at the USDA to optimize its 
programs and authorities to provide climate solutions and better serve 
farmers, provide a rare opportunity to address these administrative and 
legal issues. Adopting industry standard data infrastructure, security 
protocols and user permissions to protect security and confidentiality 
of producer data while automating and standardizing data collection, 
storage and sharing are key to moving the USDA's programs forward in a 
way that better serves farmers and accelerates climate-smart 
agriculture.
---------------------------------------------------------------------------
    \23\ https://foodandagpolicy.org/agricultural-data/.
---------------------------------------------------------------------------
The Road Ahead
    Given the challenges of climate change and other pressures on 
farmers, there is an urgent need to innovate our approach to the farm 
safety net.

    A convergence of diverse, bipartisan stakeholders around the 
interrelationship between crop insurance, conservation and climate is 
providing a unique opening to do so. From these efforts, we have 
identified three, interrelated components for creating, implementing 
and continuously improving next generation risk management.

   Data Innovation: Modernize data collection, 
        interoperability, storage, and sharing while protecting 
        producer privacy.

   Crop Insurance and Conservation Policy: Improve crop 
        insurance and conservation policy so that they work better for 
        farmers and reduce risk while adopting new policies that 
        encourage adoption of conservation practices that reduce risk.

   FCIP Rating Model: Enable research that helps strengthen the 
        FCIP risk rating model by addressing knowledge gaps, and 
        utilize data to assess and improve on-the-ground outcomes.

    By harnessing the power of agricultural data, growing our knowledge 
about what conservation practices work and where and applying this 
knowledge to USDA programs, we can improve risk management, generate a 
host of co-benefits and provide a better value for farmers and 
taxpayers.

 
 
 
                            References Cited
 
    Bowles, T.M., et al. (2020). Long-Term Evidence Shows that Crop-
 Rotation Diversification Increases Agricultural Resilience to Adverse
 Growing Conditions in North America. One Earth. 2 (3) 284-293.
    Chambers, A., Lal, R., and Paustian, K. (2016). Soil carbon
 sequestration potential of US croplands and grasslands: Implementing
 the 4 per Thousand Initiative. Journal of Soil and Water Conservation.
 71(3) 68A-74A.
    Congressional Budget Office. (2018). Direct Spending and Revenue
 Effects of the Conference Agreement for H.R. 2, the Agriculture
 Improvement Act of 2018.
    Congressional Research Service. Federal Crop Insurance: A Primer.
 (2021).
    Congressional Research Service. In Focus, Farm Bill Primer: Federal
 Crop Insurance. (2018).
    Conservation Technology Information Center. (2020). Report of the
 2019-2020 National Cover Crop Survey. Joint publication of the CTIC,
 the North Central Region Sustainable Agriculture Research and Education
 Program and the American Seed Trade Association.
    Farm Bureau. Majority of Crop Acres Covered by Crop Insurance.
 (2019). https://www.fb.org/market-intel/majority-of-crop-acres-covered-
 by-crop-insurance.
    Fleckenstein, M. Lythgoe, A., Lu, J., Thompson, N., Doering, O.,
 Harden, S., Getson, J.M., and Prokopy, L. (2020). Crop insurance: A
 barrier to conservation adoption? Journal of Environmental Management,
 (276) 111223.
    Kane, D.A., Bradford, M.A., Fuller, E., Oldfield, E.E., and Wood,
 S.A. (2021). Soil organic matter protects U.S. maize yields and lowers
 crop insurance payouts under drought. Environmental Research Letters
 (16) 044018.
    Lal, R. (2016). Soil Health and carbon management. Food and Energy
 Security. 5(4) 212-222.
    Poeplau, C., and Don, A. (2015). Carbon sequestration in
 agricultural soils via cultivation of cover crops--A meta-analysis.
 Agriculture, Ecosystems & Environment (200) 33-41.
    Rippey, B. (2015). The U.S. Drought of 2012. Weather and Climate
 Extremes. 10 (2015) 57-64.
    Schnepf, R. (2020). Federal crop insurance: Record prevent plant
 acres and payments 2019. Congressional Research Service.
    Sustainable Agriculture Research and Education (SARE). 2018.
 Cultivating Climate Resilience on Farms and Ranches.
    The Nature Conservancy. (2016). reThink Soil: A Roadmap for Soil
 Health.
    U.S. Global Change Research Program. (2018). The Fourth National
 Climate Assessment, Chapter 21.
    U.S. Farmers and Ranchers Alliance. (2019). The Power of Resiliency
 in Agriculture's Ecosystem Services.
    Wallace Center Pasture Project. (2018). Full Trial Report: Benefits
 of Planting and Grazing Diverse Cover Crops.
    Woodard, J.D. and Verteramo-Chiu, L.J. (2017). Efficiency impacts of
 utilizing soil data in the pricing of the federal crop insurance
 program. American Journal of Agricultural Economics 99(3) 757-772.
    Zulauf, C. and Brown, B. (2019). Cover Crops, 2017 US Census of
 Agriculture Census. University of Illinois farmdoc Daily.
    Yu, Z., Lu, C., Hennessy, D., Feng, H., and Hanqin, T. (2020).
 Impacts of tillage practices on soil carbon stocks in the US corn-
 soybean cropping system during 1998 to 2016. Environmental Research
 Letters. 15 014008.
 

Recognizing Early Innovators
Recommendations for Maintaining and Expanding Climate-Smart 
        Agricultural Practices
March 2022
Table of Contents
Foreword
Introduction
Issue Assessment
Recommendations
Conclusion

          Although all the individuals formally affiliated with CFAD 
        may not agree completely with every statement noted, they are 
        committed to working together to find solutions to the 
        challenges facing food and agriculture. CFAD members 
        participated as individuals, not as official representatives of 
        their organization.
Foreword
    The Climate, Food, and Agriculture Dialogue (CFAD) is a group of 
climate, food, and agriculture interests advocating for ambitious and 
durable Federal policy solutions on food systems and climate change. 
The Dialogue's long-term goal is to enact Federal climate policy in 
line with our guiding principles.[i]
---------------------------------------------------------------------------
    \[i]\ https://climatefoodag.org/guiding-principles/.
---------------------------------------------------------------------------
    This paper provides insight and recommendations on the challenges 
facing ``early innovators.'' Early innovators are our leaders in 
conservation agriculture. They have tested and developed climate-smart 
practices, demonstrated the benefits, and paved the way for others to 
follow. Unfortunately, early innovators can be excluded from public and 
private conservation programs, which target incentives toward farmers 
who are new to the conservation space.
    As public and private investments in climate-smart agriculture 
increase, we risk excluding the very leaders who blazed the trail for 
the expansion of climate-smart agriculture. Our goal should be to 
develop an agricultural system that encourages maintenance of existing 
climate-smart practices, continued innovation, and broader adoption of 
climate-smart practices by producers who have not yet been persuaded to 
adopt them. The recommendations within this paper were developed with 
that goal in mind.
    We hope you find it to be a useful resource.

The AGree Climate, Food, and Agriculture Dialogue (CFAD)
Introduction
    Expanding climate-smart agriculture is a central tenet of the Biden 
Administration's whole-of-government approach to address climate 
change, stimulate economic growth, and support agricultural 
productivity.\1\
---------------------------------------------------------------------------
    \1\ USDA is in the process of developing an official definition of 
``climate-smart agriculture.'' In this paper, we use the term to refer 
to integrated agricultural practices that maintain or increase 
productivity, enhance resilience, and reduce emissions (avoiding 
emissions or potentially removing them from the atmosphere) on U.S. 
working lands.

    At the 26th United Nations Climate Change Conference of the Parties 
(COP 26), President Biden launched the Agriculture Innovation Mission 
for Climate [ii] in partnership with the United Arab 
Emirates, 31 other countries, and 48 NGOs, to mobilize $8 billion in 
investments in climate-smart agriculture over the next year.
---------------------------------------------------------------------------
    \[ii]\ https://www.usda.gov/media/press-releases/2021/11/02/
launching-agriculture-innovation-mission-climate.
---------------------------------------------------------------------------
    Pursuant to that goal, U.S. Secretary of Agriculture Tom Vilsack 
highlighted USDA's Climate-Smart Agriculture and Forestry Partnership 
Initiative as a key strategy for advancing climate-smart agriculture, 
saying:

          ``We're positioning U.S. farmers, ranchers, and forest 
        landowners as leaders in addressing climate change, while at 
        the same time creating new market opportunities for them 
        through pilot projects that invest in science, monitoring, and 
        verification to measure the benefits of climate-smart 
        production practices. Unlocking these markets will be key to 
        tapping into the incentives needed to adopt climate-smart 
        practices on the ground.'' \2\
---------------------------------------------------------------------------
    \2\ United States Department of Agriculture. [Press Release 
0239.21]. (2021, November). USDA Underscores Commitment to Climate 
Action at COP26 D USDA (https://www.usda.gov/media/press-releases/2021/
11/05/usda-underscores-commitment-climate-action-cop26).

    As programs are developed by both government and the private-sector 
to address climate change by incentivizing adoption of climate-smart 
practices, many farmers and policymakers are asking how the 
contributions of the ``early innovators'' of these practices will be 
recognized and rewarded.
    Early innovators are our leaders in conservation agriculture--they 
have tested and developed new climate-smart practices, proved their 
efficacy and long-term profitability, and paved the way for others to 
follow. Although early innovators shouldered the risk and, in many 
cases, the cost of establishing climate-smart agricultural practices, 
newcomers to climate-smart agriculture are now better positioned to 
participate in programs looking for new carbon sequestration and 
emissions reductions (``additionality''). This puts the early 
innovators at a financial disadvantage to other producers, who have 
more room for improvement and will be able to stack greater income from 
ecosystem service payments. Early innovators should not be financially 
penalized going forward because they chose to take action sooner than 
others.
    There is also concern that the challenge early innovators face in 
generating additional emissions reductions could create a moral 
hazard--the financial incentive to revert to conventional management to 
become eligible for private carbon markets. These concerns beg the 
question: How do we create a system that ensures farmers who have 
transitioned to climate-smart agricultural practices will maintain 
practices over the long-term, while continuing to improve and innovate?
    The purpose of this paper is to outline a framework for 
understanding the early innovator issue and share CFAD's consensus 
recommendations.
Issue Assessment
    Over the fall of 2021, CFAD convened panel discussions composed of 
private-sector, government, and NGO experts to better understand the 
issue and develop a set of consensus policy recommendations. Based on 
these discussions, our assessment of the early innovator issue is as 
follows:

   There is no single, agreed-upon definition of what makes 
        producers ``early innovators,'' which complicates discussions 
        about how their contributions should be considered and 
        recognized. ``Early innovators'' are generally referred to as 
        producers who have implemented some number of conservation 
        practices, and it is inferred that these practices likely have 
        been in place for a significant amount of time (i.e., longer 
        than just a few years). The reality is that the early innovator 
        community is not a monolith--it includes crop and livestock 
        producers who have implemented climate-smart practices on the 
        entirety of their farm for decades, as well as those who have 
        periodically implemented selected practices on just a portion 
        of their operation for shorter durations. Furthermore, many 
        producers who have adopted one or more conservation practice 
        will still be eligible for carbon market programs if they agree 
        to expand or add new practices. Policy discussions should 
        recognize that early innovators face varying degrees of 
        difficulty in benefiting from carbon market programs--including 
        small- and medium-sized, diversified, and BIPOC producers--
        depending on the breadth and duration of their conservation 
        actions, the size of their operations, and geography and soil 
        type.

   We do not have a comprehensive assessment of how many early 
        innovators exist and consequently do not understand the 
        magnitude of the risk of losing their established conservation 
        progress. Estimates point to a relatively low number of farmers 
        who would be entirely excluded from carbon markets. Data from 
        the National Agricultural Statistics Service's (NASS) 2017 
        Agricultural Census estimates that conversion to no-tillage 
        systems has slowed in recent years, only expanding from 96.5 
        million acres to 104.5 million acres between 2012 and 2017. 
        Increase in cover crop acreage has been more significant over 
        that period; however, the total extent of cover crop adoption 
        remained relatively low at only about 15 million acres in 
        2017.\3\ NASS also reports that there are 5.5 million acres in 
        organic production as of 2019.\4\ These numbers can be 
        interpreted either as a minor issue in the grand scheme of the 
        climate crisis or as millions of acres of U.S. farmland 
        potentially at risk of losing conservation practices due to 
        perverse incentives.
---------------------------------------------------------------------------
    \3\ National Agricultural Statistics Service. 2017. Census of 
Agriculture Vol. 1, Chapter 1: U.S. National Level Data (Table 47: Land 
Use Practices by Size of Farm: 2012 and 2017). Retrieved from 
st99_1_0047_0047.pdf (usda.gov) (https://www.nass.usda.gov/
Publications/AgCensus/2017/Full_Report/Volume_1,_Chapter_1_US/
st99_1_0047_0047.pdf).
    \4\ National Agricultural Statistics Service. 2020. 2017 Census of 
Agriculture Vol. 3, Special Studies, Part 4: 2019 Organic Survey. 
Retrieved from https://www.nass.usda.gov/Publications/AgCensus/2017/
Online_Resources/Organics/index.php.

   Early innovators are an important group of producers--they 
        represent conservation innovation, leadership, hard work, and 
        risk-taking. They have created conservation benefits that need 
        to be recognized and maintained. Moreover, agricultural 
        communities look to early innovators before investing in 
        climate-smart and other conservation practices. Seeing unequal 
        compensation for the same practices could alienate conservation 
        leaders and disincentivize the teaching, promotion, and 
        adoption of innovative, new climate-smart agricultural 
        practices. Our goal should be to develop an agricultural system 
        that encourages maintenance of existing climate-smart 
        practices, continued innovation by conservation leaders, and 
        the adoption of climate-smart practices by producers who have 
        not yet been persuaded to adopt them.
Recommendations
    A range of incentives have been proposed to reward early innovators 
for past actions, including one-off, lump-sum payments and amending 
USDA conservation programs to reward conservation maintenance. However, 
CFAD proposes that the most sustainable and influential way to maintain 
and expand climate-smart agricultural practices is to build the 
business case for conservation adoption. This can be done by embedding 
incentives for the adoption and maintenance of climate-smart 
agricultural practices throughout agricultural markets, finance 
systems, regulatory processes, and insurance programs. These strategies 
will benefit both early innovators and those new to climate-smart 
agricultural practices.
    Our recommendations for creating this system include the following:

  1.  The USDA Economic Research Service should conduct a literature 
            review of existing research to understand the economics 
            around producer motivations for implementing and 
            maintaining climate-smart practices. Research should answer 
            the following questions, which can offer important lessons 
            for current USDA efforts to promote conservation adoption:

       How many early adopters exist and how many acres of U.S. 
            farmland are 
              currently in conservation practices? How many of them are 
            unlikely to 
              qualify for private carbon market contracts?

       What are early innovators' motivations for implementing 
            conservation prac-
              tices and the current business case for practice 
            maintenance? Many early 
              innovators have been supported in their efforts by USDA 
            conservation pro-
              gram funding and technical assistance. Once those 
            programs have run their 
              course, what is the bottom-line benefit to the producers 
            to maintain their 
              efforts?

       How likely are early innovators to ``undo'' their 
            current soil health practices 
              to qualify for carbon market payments? Does the promise 
            of a carbon mar-
              ket payment outweigh the soil health and other financial 
            benefits of contin-
              ued conservation?

       How many early innovators have already received 
            government payments 
              for implementing climate-smart practices? Potential 
            compensation of early 
              innovators should take into account if they already 
            received some sort of 
              incentive based on other ecosystem benefits--e.g., soil 
            erosion, water qual-
              ity, habitat, etc.

       In emerging markets where producers are able to stack 
            payments for prod-
              uct with payments for ecosystem services, what is the 
            extent of the finan-
              cial disadvantage this creates for early innovators?

       What has caused the stagnation of climate-smart practice 
            adoption nation-
              ally?

  2.  The Federal Crop Insurance Program (FCIP) should recognize the 
            risk-reducing benefits of conservation practices. Expanding 
            the good farming practices accepted by the FCIP to include 
            NRCS-approved ``good farming practices'' that are proven to 
            reduce risk is one cost-effective approach. Lowering the 
            cost of crop insurance premiums for producers with a record 
            of using climate-smart practices that reduce agricultural 
            risk is another. There is actuarial evidence that certain 
            conservation practices such as cover crops, reduced 
            tillage, and crop rotation are effective risk-reducing 
            strategies that include substantial climate benefits; these 
            benefits should be recognized through crop insurance 
            premiums.\5\ For example, a new crop insurance endorsement 
            for corn farmers called the Post-Application Coverage 
            Endorsement (PACE) [iii] provides supplemental 
            coverage for farmers who split-apply nitrogen, a practice 
            that supports the nitrogen needs of corn at specific times 
            in the crop's growth cycle. This endorsement incentivizes 
            the efficient use of fertilizer and promotes cost savings 
            for producers and has important environmental benefits by 
            reducing nitrogen release into water and air. Private-
            sector opportunities to capture environmental and risk-
            reducing benefits by paying for insurance products such as 
            PACE should also be explored.
---------------------------------------------------------------------------
    \5\ The Case for Next Generation Crop Insurance (https://
foodandagpolicy.org/wp-content/uploads/sites/4/2021/06/
AGree_SynthesisCropInsurancePaper.pdf), a white paper published by the 
AGree Economic and Environmental Risk (E2) Coalition, summarizes 
important takeaways to date from work done by the E2 Coalition's work 
on Federal crop insurance and conservation.
    \[iii]\ https://pacecropinsurance.com/.

  3.  Agricultural lenders should recognize the economic benefits of 
            conservation practice adoption, including improved soil 
            health and reduced agricultural risk, when offering loan 
            terms to producers. A growing body of evidence is 
            demonstrating that, over the long term, conservation 
            practices can reduce farmer costs and risk, increase asset 
            value of farming operations, increase yield resilience, and 
            diversify farm income streams--producing benefits for both 
            farmers and their financial partners. These benefits should 
            be quantified and incorporated into financial products 
            offered to farmers who adopt climate-smart agricultural 
            practices.\6\
---------------------------------------------------------------------------
    \6\ The Environmental Defense Fund has released numerous studies 
and reports identifying how farmers and financial partners can quantify 
the financial benefits of conservation practices and incorporate that 
value into policies, products, and decision-making. These resources can 
be found here (https://www.edf.org/ecosystems/how-conservation-
delivers-value-farm-and-beyond).

  4.  USDA should continue to explore the development of climate-smart 
            commodity markets that reward early innovators through new 
            market mechanisms. Supporting markets that preference 
            agricultural commodities produced using practices that 
            reduce greenhouse gas emissions or sequester carbon would 
            strengthen the business case for climate-smart agriculture. 
            This is a place where early innovators have a significant 
            head start given their years of experience and can 
            capitalize on their technical expertise. In addition, USDA 
            should use existing authorities to develop infrastructure 
            (e.g., drying technologies, composting systems, seeds 
            stocks, etc.) that supports the implementation of new 
---------------------------------------------------------------------------
            practices, commodities, and livestock and cropping systems.

  5.  Ecosystem markets that allow producers to generate both carbon 
            credits and other ecosystem services credits from the same 
            project should be explored to create stacked incentives to 
            expand and maintain existing conservation practices. When 
            it comes to ecosystem services, the whole is greater than 
            its parts--stacking payments is a way to recognize the 
            greater value that more intact ecosystems provide. Such 
            markets may allow early innovators to generate income from 
            the full range of ecosystem services they create as well as 
            increase the market incentives for conservation overall by 
            providing multiple income streams. As ecosystem services 
            markets take shape, it is critical they are inclusive of 
            small- and medium-scale, diversified, and BIPOC producers.

  6.  Food and beverage companies should consider how early innovators 
            can be included in supply chain sustainability programs to 
            reduce scope 3 emissions.\7\ As companies work to reduce 
            emissions and meet climate commitments, they should ensure 
            early innovators are eligible for any incentives and 
            programs to expand adoption of climate-smart practices.
---------------------------------------------------------------------------
    \7\ Companies can assess and report their greenhouse gas emissions 
across three different ``scopes'' using the Greenhouse Gas Protocol. 
Scope 1 refers to greenhouse gas emissions from an organization's 
directly owned and controlled resources. Scope 2 refers to indirect 
emissions from the energy an organization purchases from a utility 
provider. Scope 3 includes indirect emissions from a company's supply 
chain--for example, the production of wheat or the transport of corn 
purchased by a food company. Carbon offsets can be applied to mitigate 
an organization's scope 1 and 2 emissions, while carbon insets can be 
applied to mitigate scope 3 activities. While protocols for measuring 
scope 1 and scope 2 are outlined in the Greenhouse Gas Protocol, 
protocols for measuring scope 3 emissions have not yet been finalized.

  7.  USDA and Congress should systematically work to expand and 
            improve existing conservation programs, drawing on CFAD's 
            recommendations for investing in working lands 
            conservation. [iv] This includes making changes 
            to expand enrollment, strengthen our network of technical 
            assistance providers, and increase the accessibility of 
            NRCS offices and resources to all producers. Adjusting 
            programs to be more outcomes-based and reward producers 
            based on the conservation benefits they have generated can 
            also help maximize program impact. However, USDA should 
            continue to build on recent investments to develop 
            measuring, reporting, and verification tools that 
            accurately quantify the ecosystem services of more 
            diversified systems. This is critical to ensure that highly 
            diversified systems are accurately rewarded for the complex 
            ecosystem services they provide.
---------------------------------------------------------------------------
    \[iv]\ https://climatefoodag.org/investing-in-working-lands-
conservation/.

  8.  USDA should offer technical assistance to states that wish to 
            create programs that give producers who adopt or have 
            adopted climate-smart agricultural practices regulatory 
            certainty on compliance with environmental safeguard 
            policies (e.g., Clean Water Act requirements, Endangered 
            Species Act).\8\ Such programs benefit early innovators by 
            providing regulatory certainty in exchange for the adoption 
            and maintenance of climate-smart practices.
---------------------------------------------------------------------------
    \8\ For example, the Minnesota Agricultural Water Quality 
Certification Program (MAWQCP) is a statewide program in Minnesota 
designed to recognize and reward agricultural stewards of water 
quality. Farmers and landowners who treat risks to water quality are 
certified under the program and deemed in compliance with any new water 
quality laws or rules for 10 years. Certification gives farmers greater 
certainty about regulatory standards and assures the public that 
Minnesota's farmers are doing their part to protect and improve water 
quality.
---------------------------------------------------------------------------
Conclusion
    The primary goals of our national agriculture-climate policy should 
be to maintain the progress that early innovators have achieved by 
using climate-smart agricultural practices while actively engaging new 
growers in adopting and expanding use of these practices.
    While carbon markets offer one pathway to reward innovators of 
climate-smart practices, there are many other tools, even in the face 
of limited resources, that can be utilized to recognize and reward the 
work of agriculture's conservation leaders. The added value and 
profitability of climate-smart operations should be systemically 
rewarded through reduced crop insurance rates, increased land values, 
climate-smart commodity markets, ecosystem service markets, as well as 
preferential treatment from USDA programs and regulatory agencies.\9\
---------------------------------------------------------------------------
    \9\ We want to see climate action across U.S. working lands and 
would note a caution that USDA could inadvertently create additionality 
issues by paying for practices without producers being enrolled in 
markets. Past practices aren't eligible for credit generation so if 
producers take on new practices that could generate credits, they need 
to be enrolled to get market credit for those outcomes.
---------------------------------------------------------------------------
    We need to use a variety of tools and applications to reward 
climate-smart agriculture--no single tool will work for all producers 
and production systems. Only by constructing an agricultural system 
that consistently rewards conservation adoption will we be successful 
in expanding climate-smart agriculture at the magnitude required to 
help mitigate climate change.
Recommendations for Investing in Working Lands Conservation

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                               About CFAD
 
    AGree's Climate, Food, and Agriculture Dialogue [i] brings together
 a diverse group of farmers, ranchers, and foresters; environmental
 NGOs; supply chain companies; and former government officials. CFAD
 members have divergent views of the issues and opportunities facing
 U.S. agriculture, but we share a common view that climate change
 demands ambitious and durable Federal policy solutions that are
 commensurate with the urgency and scale of the problem. We see U.S.
 food and agriculture system as a crucial source of solutions to address
 climate change and the degradation of nature, which includes our land
 and water resources. These solutions must provide transparency and
 promote affordability while distributing costs and benefits in such a
 way that promotes equity and value to land managers. The scientific
 consensus that the climate is changing at an increasingly rapid pace is
 incontrovertible. The timeframe for taking meaningful action to avoid
 catastrophic impacts is running short. Our guiding principles for
 Federal policy on climate change and food systems can be viewed here
 [ii].
[i] http://www.climatefoodag.org/.
[ii] https://climatefoodag.org/guiding-principles/.
------------------------------------------------------------------------

    Exponentially increasing regenerative farming practices on American 
agricultural land represents an incredible opportunity to generate 
benefits for the environment, agricultural producers, and society at 
large. America's working lands represent 40% of the nation's 
acreage.\1\ Responsible, increased investments in working lands 
conservation and regenerative agriculture are critical to help the 
Biden Administration reach its goal of negative emission farming and 
engaging 30% of the nation's land and water in conservation,\2\ as well 
as to reaching a growing number of climate commitments made by farm 
groups and food companies. A responsible balance between working and 
idle land conservation is the common-sense approach to reduce 
greenhouse gas emissions, improve soil health and water quality and 
quantity, and increase agricultural productivity. We can do this in a 
way that makes economic sense for producers and advances equitable 
access to Federal conservation programs. We need to expand the network 
of technical assistance providers and expertise available to farmers 
and ranchers. To accomplish these goals, we need to exponentially 
increase funding for existing conservation programs. Ultimately, these 
recommendations will help USDA expand and streamline existing 
conservation programs for maximum impact.
---------------------------------------------------------------------------
    \1\ https://www.nass.usda.gov/Publications/Todays_Reports/reports/
fnlo0220.pdf.
    \2\ Outlined in President Biden's Executive Order on Tackling the 
Climate Crisis at Home and Abroad (https://www.whitehouse.gov/briefing-
room/presidential-actions/2021/01/27/executive-order-on-tackling-the-
climate-crisis-at-home-and-abroad/).
---------------------------------------------------------------------------
    CFAD has released two additional resources: USDA Research and 
Science Recommendations and a concept note for the development and 
operation of a USDA National ``Climate Bank.'' Sustainable, climate-
smart agriculture requires a suite of policies and a systems approach 
to bring lasting management changes. CFAD is committed to working with 
USDA and Congress as they develop policy and programs that work for 
producers, the environment, and society.
Introduction
    Policies to expand conservation practices must be grounded in the 
perspective of farmers and ranchers, with an understanding of the 
barriers that a range of producers face to joining new Federal 
programs. We know that many farmers and ranchers make farm management 
decisions on an annual basis, informed by current crop and livestock 
prices and their years of experience, in order to maximize their farm's 
production and profitability. Barriers to joining new programs include 
a backlog of applications and long waiting lists; a lack of clear, 
concise communication on the costs and benefits of conservation 
practices and programs; the complexity and paperwork involved in 
program enrollment; and, in some places, a technical assistance network 
that is stretched too thin or lacks the relevant expertise in nutrient 
management, irrigation management, feed management, soil health, 
organic transition, and new conservation technologies that producers 
need to make the best management decisions for their operation. The 
following policy recommendations are targeted to address these 
challenges and expand the Federal conservation incentive and support 
system to effectively educate and enroll the greatest number and 
diversity of farmers.
    The U.S. Department of Agriculture (USDA) and Congress have several 
immediate opportunities to promote climate-smart agriculture throughout 
the United States. This set of policy recommendations outlines how USDA 
and Congress can:

  I.  Exponentially increase conservation program funding,

  II.  Elevate a focus on conservation and climate solutions at USDA,

  III.  Tailor existing conservation programs to maximize effectiveness 
            and promote whole-farm conservation planning,

  IV.  Expand and improve technical assistance for conservation 
            adoption, and

  V.  Align financial incentives to recognize the financial and risk-
            reduction benefits of conservation.

    As USDA considers how to best align farm programs and financial 
mechanisms towards promoting conservation, the following guideposts 
should be kept in mind:

  1.  Ensure farmer profitability is at the forefront of efforts to 
            expand conservation practice adoption. Creating new 
            economic opportunities for farmers is critical to expanding 
            voluntary adoption of conservation practices and creating a 
            successful and resilient agricultural system.

  2.  Ensure that the full diversity of American agricultural producers 
            can participate in incentive programs, with a particular 
            focus on including Black and Indigenous farmers, young and 
            beginning farmers, small and midsize farmers, and farmers 
            who grow a diversity of crops and/or integrated crop-
            livestock systems.

  3.  Create ecosystem services, maintain or increase biodiversity, and 
            reduce the overall footprint of farming, while considering 
            environmental impacts beyond just sequestering carbon to 
            include other greenhouse gas emissions reductions, soil 
            health improvements, water quality and quantity 
            enhancements, and wildlife and pollinator habitat 
            protection.

  4.  Start with incentivizing practices that we know are effective 
            based on best science and evidence (e.g., cover cropping, 
            crop rotations, rotational grazing, nutrient management, 
            manure management, irrigation management, etc.) in order to 
            start making progress while research continues on other 
            critical practices.

  5.  Invest in systems to monitor and measure the outcomes of 
            practices and programs. This is critical to ensure that the 
            benefits of conservation programs are being realized. 
            Landscape-level monitoring is essential to build consensus 
            that USDA programs are effective tools for reducing 
            greenhouse gas emissions. In addition to further developing 
            USDA tools such as COMET Planner,[iii] there is 
            a need for more regional and industry-specific modeling 
            tools to effectively measure practice outcomes across 
            diverse geographies, climates, soil types, and production 
            systems.
---------------------------------------------------------------------------
    \[iii]\ http://comet-planner.com/.

  6.  Consider the long-term adoption of conservation practices, 
            permanence of ecosystem services, and the advantages of 
            early action by farmers. Congress and USDA should continue 
            to incentivize early adopters to maintain the benefits of 
            their practices and encourage further innovation that can 
---------------------------------------------------------------------------
            lay the groundwork for scalable adoption of more practices.

  7.  Strive to incentivize continuous improvements. Programs such as 
            the Conservation Stewardship Program (CSP) help support 
            lasting change, continual improvement, and measurable 
            impact through long-term, renewable contracts.

  8.  Avoid sending mixed signals or creating perverse incentives. 
            There is a need to create shared, understood objectives for 
            agriculture policy to ensure different policies do not work 
            at cross-purposes.

    The policy recommendations outlined herein advance these principles 
by centering the advice and guidance from producers to design programs 
that will work for them, by suggesting ways to expand and improve our 
current conservation delivery system to advance whole-farm ecosystem 
planning and by providing thought leadership about the challenge of 
incentivizing early adopters to maintain their historic practices and 
progress. If implemented, the policy recommendations outlined in the 
following pages will advance these ideals and support our transition 
towards more climate-resilient and profitable agricultural and forestry 
systems.
I. Exponentially Increase New Funding for Existing Conservation 
        Programs
    Congress should provide USDA a three- to five-fold increase in new 
funding for conservation programs in order to expand adoption of 
conservation practices as quickly as possible on working lands. The 
2021 Fiscal Year budget for NRCS conservation programs is $3.9 
billion,\3\ therefore we suggest increasing funding to between $11.7-
$19.5 billion to accomplish our climate goals. Increasing conservation 
program funding is critical to expanding conservation adoption, 
especially because the last increase in program funding occurred in the 
2008 Farm Bill, and program dollars have leveled off or decreased since 
then.\4\ A significant increase in conservation funding is the quickest 
strategy to immediately increase conservation adoption, directly 
benefit farmers and ranchers, and begin delivering immediate increases 
in carbon sequestration, emissions reductions, and other environmental 
benefits that working lands provide. Furthermore, a growing number of 
policymakers and agricultural groups support this idea.\5\
---------------------------------------------------------------------------
    \3\ https://www.usda.gov/sites/default/files/documents/usda-fy2021-
budget-summary.pdf.
    \4\ https://www.ers.usda.gov/topics/natural-resources-environment/
conservation-programs/.
    \5\ A growing number of policymakers and agricultural groups 
support an increase in conservation program funding. A recent letter 
(https://www.nwf.org/-/media/Documents/PDFs/Press-Releases/2021/04-27-
21-American-Jobs-Plan-Ag-sign-on-letter) signed by 133 leading farm 
groups recently suggested a doubling of conservation program funding. 
The Food and Agriculture Climate Alliance (FACA), consisting of almost 
70 agriculture, food, forestry, and environmental organizations, has 
suggested a 20% increase in program funding. Senator Cory Booker and 
Congresswoman Abigail Spanberger introduced the Climate Stewardship Act 
(https://www.booker.senate.gov/news/press/with-fdrs-new-deal-as-
blueprint-sen-booker-and-rep-spanberger-re-introduce-climate-change-
bill-focused-on-investing-in-farm-conservation-programs-reforestation-
and-wetlands-restoration), which calls for nearly doubling the 
Conservation Reserve Program to 40 million acres a year and increasing 
funding for both the Conservation Stewardship Program and the 
Environmental Quality Incentives Program to $7 billion a year. The 
Agriculture Resilience Act introduced by Congresswoman Pingree and 
Senator Heinrich also calls for robust investments in Federal 
conservation programs. In addition, Senate Agriculture Chairwoman 
Debbie Stabenow has made public remarks (https://www.agri-pulse.com/
articles/15764-stabenow-pushing-for-big-boost-in-conservation-says-
biden-plan-falls-short) pushing for a major increase in conservation 
program funding.
---------------------------------------------------------------------------
    The Environmental Quality Incentives Program (EQIP), Conservation 
Stewardship Program (CSP), and Regional Conservation Partnership 
Program (RCPP) are three voluntary, incentive-based conservation 
programs that we know are effective in expanding conservation on the 
ground. In 2020, EQIP contracts enrolled 3.8 million acres of farmland 
in at least one cropland soil quality practice,\6\ and the CSP program 
had 6.4 million acres enrolled in active, comprehensive, whole-farm 
conservation contracts.\7\ A review of 26 research trials conducted by 
Sustainable Agriculture Research and Education program (SARE) suggests 
that cover crops have the potential to sequester 3 metric tons of 
CO2-equivalents (CO2e) per acre per year.\8\ 
Using this metric, increasing cover crop adoption by 30 million acres 
through increased conservation program funding could sequester an 
additional 90 million tons of CO2e annually.
---------------------------------------------------------------------------
    \6\ https://www.nrcs.usda.gov/Internet/NRCS_RCA/reports/
fb08_cp_eqip.html.
    \7\ https://www.nrcs.usda.gov/Internet/NRCS_RCA/reports/
fb08_cp_cstp.html.
    \8\ https://www.sare.org/publications/cover-crops/ecosystem-
services/cover-crops-and-carbon-sequestration/.
---------------------------------------------------------------------------
    The Regional Conservation Partnership Program (RCPP) is unique in 
that it allows NRCS to partner with local organizations and communities 
to address natural resource goals at the regional level. Since 2014, 
RCPP has funded over 375 high-impact projects across the U.S., bringing 
in an estimated $2 billion in matching funding from partners.\9\ RCPP 
is a model for leveraging partnerships and partner funding to achieve 
maximum impact from Federal conservation dollars and could be expanded, 
particularly through the program's Alternative Funding Arrangements 
(ARA), with a focus on targeting climate-smart agricultural practices.
---------------------------------------------------------------------------
    \9\ https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/
programs/financial/rcpp/.
---------------------------------------------------------------------------
    Despite the success of NRCS conservation programs, they have long 
waiting lists and low acceptance rates due to lack of funds. 
Historically, USDA has only been able to accept \1/4\ of applications 
received for conservation programs. Exponentially increasing 
conservation program funding will allow NRCS to fund and execute more 
contracts, hire additional technical assistance personnel, and 
ultimately leverage NRCS's existing infrastructure to expand 
conservation, carbon sequestration, and environmental benefits as 
quickly as possible.

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
               Ensuring Equitable Access to USDA Resources
 
    In addition to exponentially increasing conservation program
 funding, measures should be taken to ensure these resources are
 accessible to small, beginning, Black, Indigenous, and People of Color
 (BIPOC), and socially or economically disadvantaged farmers and
 ranchers. USDA's history of discrimination against BIPOC farmers in
 allocating loans and conservation payments has led to a lack of trust
 with producers of color, which USDA must take steps to address. In
 addition, producers with less time and fewer resources to learn about
 and navigate USDA programs are often left out of funding and cost-share
 opportunities. However, we know that engaging the full diversity of
 U.S. agriculture in climate-smart practices is critical to addressing
 climate change and ensuring the benefits of new funding are equitably
 distributed.
    In order to reduce barriers for small, beginning, and BIPOC farmers
 and ranchers to engaging in USDA programs, we suggest USDA place a high
 priority on expanding funding for non-traditional technical assistance
 providers that already work with these producers. For example, the
 Intertribal Agriculture Council plays a key role in assisting Indian
 producers in accessing and using USDA programs and services. In
 addition, streamlining existing conservation programs, fast-tracking
 approval and funding for conservation plans that propose to implement
 well-understood practices, and offering producers assistance with
 creating whole-farm conservation plans can help reduce barriers to
 engaging in USDA programs and support conservation planning for
 producers with fewer resources. These policy ideas are further explored
 later in this document.
------------------------------------------------------------------------

II. Elevate a Focus on Conservation and Climate Solutions at USDA
    To ensure that climate efforts at USDA are effective, strategic, 
and widely supported, USDA should revise the mission statement and 
goals for each USDA agency to create a clear and prominent focus on 
climate-smart agricultural practices. Agencies should be directed to 
prioritize conservation practices that not only sequester carbon but 
include co-benefits for nature including improved soil health, water 
quality, and wildlife habitat. Articulating a department-wide vision 
for on-farm outcomes (both economic and environmental) and conservation 
outcomes at the landscape and watershed levels would help to drive 
strategic decision making by individual agencies and programs.
    Taking steps to improve data collection, analysis, and sharing 
between agencies will help USDA achieve these conservation and climate 
goals. Increased integration and analysis of this agricultural data is 
key to understanding how the food and agriculture sector can develop 
and implement solutions to climate change (read CFAD's Research 
Recommendations[iv]  for more detailed recommendations about 
USDA research and science on climate-smart agriculture). Existing tools 
such as COMET-planner [v] can be used to provide guidance 
for the most impactful practices by farming systems to prioritize, as 
well as create proxies for measuring practice outcomes while more 
comprehensive monitoring and measurement systems are developed.
---------------------------------------------------------------------------
    \[iv]\ https://climatefoodag.org/research/.
    \[v]\ http://comet-planner.com/.
---------------------------------------------------------------------------
    As USDA works to advance its data infrastructure and analysis, the 
agency should ensure that data architecture for USDA conservation 
planning and programs provides value back to producers. Producers 
should be able to electronically access the data they provide to [USDA] 
and all available USDA planning tools and incentives available to them. 
USDA data systems should be aligned with the tools and technologies 
producers need to use to participate in ecosystem services markets. 
USDA should expand efforts toward data interoperability to enable 
producers to enter data once and use it many times. This is critical to 
building the value proposition for producers to share their data.
III. Tailor Existing Conservation Programs to Maximize Effectiveness 
        and Promote Whole-Farm Conservation Planning
    USDA should adjust existing conservation programs to streamline 
program enrollment and administration, reduce barriers to enrolling in 
conservation programs, better communicate the benefits of climate-smart 
farming practices, and provide assistance for farms to optimize 
conservation benefits. While current conservation programs are 
generally effective, adjusting contract structures can reduce the 
significant administrative burden currently facing NRCS staff, freeing 
up more time to work directly with farmers on conservation planning and 
implementation. In addition, a stronger focus on conservation and 
climate planning can support farmers and ranchers in understanding how 
their farm management can most effectively contribute to climate 
mitigation efforts. Improving USDA program accessibility and ensuring 
support for conservation planning is widely available can help small, 
beginning, and BIPOC producers access program benefits.
    CFAD policy recommendations to achieve this goal include:

   Offer assistance for farms to develop conservation plans 
        specifically tailored to optimize environmental benefits and 
        increase production resilience to climate change impacts while 
        considering the economic realities of each farm. USDA should 
        move immediately to implement a provision included in the 2018 
        Farm Bill to provide producers a one-time payment for 
        comprehensive conservation planning. Current programs such as 
        EQIP and CSP can also promote a holistic understanding of 
        climate mitigation and encourage the adoption of practices with 
        environmental benefits beyond carbon sequestration, such as 
        nutrient and irrigation management. This can also be advanced 
        by creating bundles of climate practices and enhancements that, 
        when combined, will decrease emissions, increase carbon 
        sequestration, and provide long-term farm resiliency for 
        participating farmers and ranchers. This could include bundles 
        for feed management for livestock to reduce emissions, rice 
        system management to reduce methane emissions, crop rotations 
        to improve soil health, and/or a nutrient management program to 
        increase nitrogen use efficiency.

   Fast-track conservation plans and contracts for conservation 
        practices that are well-understood, easy to implement, and 
        scalable, such as cover cropping, conservation tillage, and 
        irrigation management. This must be done in combination with a 
        significant increase in conservation program funding, so 
        farmers who have been waiting to have contracts processed are 
        not disadvantaged. Whole-farm conservation plans should not be 
        a prerequisite for producers interested in adopting specific 
        conservation practices, since these can present a roadblock to 
        conservation adoption and discourage participation.

   Prioritize the implementation of a narrower range of 
        individual practices with scientifically supported impact 
        values (e.g., climate, water, and biodiversity) among certain 
        farming systems in specific regions. A shorter list of 
        ``climate practices'' will help various and diverse producers 
        choose the most impactful practices to assist in building their 
        own distinct agricultural management systems. States and 
        regions can choose the practices that are most practical for 
        the farm-systems that operate in specific areas.

   Create multi-year EQIP contracts with declining payments 
        over time, whereby a producer receives a smaller cost-share 
        payment each year as transaction costs decline. Implementing 
        some conservation practices can have a high up-front cost, but 
        as practices become established, they begin to produce greater 
        benefits over time. A declining payment structure provides a 
        greater incentive up-front, when it is needed by producers, and 
        then declines to reflect the reduced cost and increasing 
        benefits to the farm. Farmers who are starting their 
        conservation journeys could apply for an EQIP contract, and 
        after one or two contracts, farmers could then be eligible to 
        ``graduate'' to CSP to maintain and expand their conservation 
        practices.

   Prioritize multi-practice, multi-year incentive contracts. 
        For example, EQIP and CSP contracts focusing on climate impacts 
        and/or soil health should prioritize producers who desire to 
        adopt multiple practices for multiple years, therefore 
        increasing the odds of measurable impact and lasting behavior 
        change. Prioritizing multi-practice, multi-year contracts 
        reduce the need for additional transactions in the future, 
        thereby streamlining program administration. The CSP program 
        provides multi-year, renewable contracts to support lasting 
        change, continual improvement, and measurable impact.
IV. Expand and Improve Technical Assistance for Conservation Adoption
    USDA and Congress should increase funding for technical assistance, 
invest in training and technology dissemination, and expand the use of 
partnerships to bolster and improve technical assistance. Technical 
assistance is critical to providing the information and guidance needed 
for producers to feel confident in adopting new practices and to 
supporting new, beginning, and BIPOC farmers in enrolling in USDA 
programs. Producers need clear, streamlined communications from USDA 
about what programs are available and what support they can access. 
Creating additional flexibility and resources for NRCS field office 
personnel to partner with agricultural extension offices, local 
conservation districts, and nontraditional technical service providers 
can help expand capacity and address gaps in NRCS expertise. In 
addition, there may be creative opportunities for cross-training and 
expertise sharing within programs at USDA. For example, a partnership 
between NRCS and the USDA National Organic Program could enlist 
accredited organic certifying agents to deliver technical assistance to 
conservation during the production off-season.
    Many NRCS field offices have limited expertise in several areas 
critical for climate planning, including livestock feed management, 
improved nutrient management for crops, irrigation management, pasture 
and advanced grazing management, soil fertility, cover crops, perennial 
agriculture, diverse cropping systems, new technologies that can help 
mitigate the environmental impacts of farming, and the economic return 
on investment for regenerative farming practices. Immediately 
addressing these expertise gaps is essential to providing farmers and 
ranchers the best available information for improving the profitability 
and climate resilience of their operations.
    CFAD recommendations to improve and expand technical assistance 
include:

   Increase funding for technical assistance. Increase 
        technical assistance funding and support for NRCS field 
        offices, conservation districts, and technical assistance 
        cooperators. Additional funding is needed to expand overall 
        capacity and ensure additional technical assistance support 
        does not affect conservation incentives provided through EQIP 
        and CSP.

   Invest in training and technology dissemination for NGOs, 
        conservation community, extension, and NRCS personnel. There is 
        an immediate and urgent need to train NRCS field staff and 
        technical assistance cooperators on climate issues, programs, 
        policies, and emerging technologies (e.g., manure management) 
        that can help drive adoption of climate solutions on working 
        lands.

   Invest in programs such as 4-H, Future Farmers of America 
        (FFA), and the National Conservation Foundation Envirothon that 
        create a pipeline for young people to become interested in 
        agricultural extension. In order to expand interest in and 
        continue the legacy of a strong U.S. agricultural industry, we 
        need to build and train a generation of smart, motivated young 
        people who are excited to work as farmers, technical assistance 
        providers, and extension agents.

   Expand technical assistance partnerships through:

     Increasing the use of cooperative agreements to 
            provide non-Federal partners more flexibility and avoiding 
            the complexity and underutilization of the current 
            Technical Service Provider certification process. These 
            cooperative relationships should be designed to expand 
            NRCS's capacity to provide climate resilience and carbon 
            management expertise.

     Utilizing Conservation Stewardship Program (CSP) 
            enhancements or Crop Assistance Program (CAP) payments to 
            pay for the use of third-party advisors for climate 
            management.

   Support and promote peer-to-peer farmer networks. Farmers 
        sharing their experiences and knowledge with one another is a 
        powerful strategy to build momentum and support for climate-
        smart agriculture.

     One model for creating these opportunities through 
            USDA programs is the NRCS Grazing Lands Conservation 
            Initiative,[v] which enlists state committees 
            and grassroots coalitions that find opportunities to 
            increase technical assistance and create public awareness 
            of activities that maintain or enhance grazing land 
            resources. This model could be replicated to leverage the 
            knowledge and experiences of early adopters to build trust 
            and expand climate-smart agricultural practices.
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    \[v]\ https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/
people/partners/glci/.

     The Climate Adaptation Fellowship[vi]  is 
            another peer-to-peer model that provides farmers, 
            foresters, and advisor the information they need to adapt 
            to climate change. This curriculum was developed through a 
            partnership between several universities, the USDA 
            Northeast Climate, NRCS, and other partners, and is another 
            model for collaborative extension efforts.
---------------------------------------------------------------------------
    \[vi]\ https://www.adaptationfellows.net/mission.
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V. Align Financial Incentives for Conservation
    The purpose of Federal conservation programs is to incentivize and 
support farmers and ranchers in adopting new conservation practices 
that provide societal and environmental benefits. Producers who receive 
this support should then be enabled to monetize the environmental 
benefits through enrolling in private ecosystem service markets. The 
role of the government is to provide support where there is a failure 
of private markets to reward public goods. This includes creating 
financial incentives for producers who are transitioning to new 
conservation practice adoption and for early adopters. It is also 
important to note that any policy that USDA develops must allow for and 
recognize existing private markets and not adversely impact, interfere 
or duplicate private-sector efforts. To align incentives for 
conservation, CFAD recommends:

   Transition payments for producers adopting new conservation 
        practices. Producers transitioning to new conservation 
        practices may experience temporary declines in farm 
        profitability (e.g., no-till has a 5-7 year transition period), 
        during which the ecosystem benefits of practices are also not 
        fully realized and cannot be monetized. USDA's organic 
        transition payment program could be expanded to include a 
        conservation transition payment to support producers as they 
        make this transition. The recommendations above to streamline 
        conservation programs, reduce barriers to entry, and lower 
        transaction costs will also help increase the number of 
        producers transitioning to conservation practice adoption.

   Create crop insurance discounts or premium reductions that 
        recognize the increased soil health and reduced agricultural 
        risk of farms implementing conservation practices to provide 
        financial incentives for early adopters to continue their 
        practices. Similar incentives for the Noninsured Crop Disaster 
        Assistance Program (NAP), Whole Farm Revenue Program (WFRP), 
        and Agricultural Management Assistance (AMA) Program should 
        also be developed to ensure that non-row crop and diversified 
        farmers can access these benefits. Designing incentives for 
        early adopters of conservation practices to maintain the 
        environmental benefits they have already created is critical to 
        reward these public goods and prevent backsliding as producers 
        adopting new practices are rewarded through private ecosystem 
        service markets. However, not all farmers utilize crop 
        insurance, so this strategy is not a silver bullet and must be 
        combined with other strategies to reward early adopters for the 
        ecosystem services they provide.

   Clarify that all NRCS conservation practices and standards 
        are Good Farming Practices (GFP). Farmers who implement 
        conservation practices and enhancements in line with NRCS 
        standards should not find themselves in conflict with RMA rules 
        as a result. Conservation is a key element of risk management, 
        and RMA rules and policies should reflect this understanding. 
        RMA and NRCS, two Farm Production and Conservation (FPAC) 
        agencies, should coordinate so that neither issues a 
        contradictory rule or recommendation that impacts farmers.

    Two unresolved challenges are how to ensure that tenant farmers can 
access conservation programs and incentives, and how to design robust 
incentives for early adopters of conservation practices to maintain the 
environmental benefits they have already created. Benefits already 
generated by early adoption of conservation will be difficult, if not 
impossible, to reward through private markets. CFAD has outlined a 
suite of policy options for USDA and Congress to consider, including 
rewarding early adopters through crop insurance discounts and/or 
through a USDA National Climate Bank [vii] (see CFAD's 
Climate Bank Concept Note for more information about how this could be 
done). As policy conversations continue, we will stay abreast of these 
challenges and provide more robust recommendations and thought 
leadership in the future.
---------------------------------------------------------------------------
    \[vii]\ https://climatefoodag.org/usda-national-climate-bank/.
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Conclusion
    Climate change solutions must be grounded in the perspective of 
agricultural producers who are key to driving conservation on working 
lands. An exponential increase in funding for existing conservation 
programs is required to drive the conservation practice adoption needed 
in a timely, voluntary, and incentive-based way. An integrated, USDA-
wide focus on climate-smart conservation practices, improved 
agriculture data systems, expanded technical assistance for 
conservation adoption, and aligned financial incentives to recognize 
the financial and risk-reduction benefits of conservation can help 
reach these goals. Furthermore, investments in measuring and monitoring 
the outcomes of conservation programs and practices will build the 
confidence that programs are delivering the public benefits they 
promise. Ultimately, expanding, improving, and targeting existing 
conservation programs can build the business case for climate-smart 
agricultural practices and drive the management changes needed across 
millions of acres of U.S. working lands.
Recommendations to Strengthen USDA's Support of Research and Science 
        for Climate-Smart Agriculture

------------------------------------------------------------------------
 
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                               About CFAD
 
    AGree's Climate, Food, and Agriculture Dialogue \1\ includes
 farmers, ranchers, and foresters; environmental NGOs; supply chain
 companies; and former government officials. We share a common view that
 climate change demands ambitious and durable Federal policy solutions
 that are commensurate with the urgency and scale of the problem. We see
 U.S. food and agriculture system as a crucial source of solutions to
 climate change. These solutions must provide transparency and promote
 affordability while distributing costs and benefits in such a way that
 promotes equity and value to land managers. The scientific consensus
 that the climate is changing at an increasingly rapid pace is
 incontrovertible. The timeframe for taking meaningful action to avoid
 catastrophic impacts is running short. Our guiding principles for
 Federal policy on climate change and food systems can be viewed
 here.\2\
\1\ http://www.climatefoodag.org/.
\2\ https://climatefoodag.org/guiding-principles/.
------------------------------------------------------------------------

    Robust and targeted research and science are fundamental to U.S. 
food and agriculture's response to climate change and our ability to 
leverage the sector to provide natural climate solutions. Our food 
system is vulnerable to a changing climate but also has the potential 
to mitigate greenhouse gases through innovative natural climate 
solutions that build soil health, farm resilience, and deliver 
ecosystem services to rural and urban communities alike. We need a 
research enterprise that is laser focused on the challenges before us. 
We need a national effort on improving soil health; soil carbon 
sequestration research, measurement, and verification techniques; 
animal feeds that reduce enteric emissions; and new seed varieties 
including cover crops that help us sequester more carbon or are 
otherwise adapted to climate change. We need a strong evidence-base to 
underpin public and private investment. We also need economic research 
and behavioral studies about new practice adoption, along with 
continuously improving models and predictive capacity. Strong USDA 
investment in research will enable U.S. agriculture to harness 
mitigation and market opportunities and meet the challenge of a 
changing climate head on.
    CFAD is also releasing two additional resources: a set of 
recommendations for investing in Federal programs to expand on-farm 
conservation adoption and a concept note for the development and 
operation of a USDA ``Climate Bank,'' creating financial incentives for 
land management innovation on hundreds of millions of acres of working 
lands to curb the effects of climate change. These actions will promote 
broader adoption of agricultural conservation practices on working 
lands and improve farm profitability, increase resilience, reduce risk, 
enhance environmental performance, and sequester carbon. USDA has the 
opportunity to send a strong signal to farmers, ranchers, and 
foresters; the supply chain; and the American public that our food 
system is committing to climate-smart agriculture and forging a path 
toward net zero emissions. CFAD looks forward to working with USDA and 
Congress as they develop policy and programs that work for producers, 
the environment, and society.
Introduction
    USDA is the leading funder of basic and applied agricultural 
research, through both intramural and competitive mechanisms. In this 
document, we outline priorities to enable USDA to bring climate change 
mitigation solutions within a broader scope of Federal and private 
investment in agricultural research. Research to support producers' 
ability to adapt to the variable conditions caused by climate change is 
important but is not the subject of this paper.
    Federal climate change mitigation research spans multiple USDA 
research and extension agencies and programs, as well as other Federal 
agencies. Much is already known about agricultural practices and 
technologies that can reduce emissions or sequester carbon while 
contributing to soil health or other agronomic goals. Collectively, we 
refer to systems that use these practices and technologies as 
``climate-smart agriculture.''
    Research can improve the evidence base around climate-smart 
agriculture where there are still gaps, identify and inform strategies 
to overcome barriers to adoption at scale, monitor trends in GHG 
emissions and sequestration on agricultural and forest lands, and align 
goals at the farm scale with those of ecosystems and society at larger 
scales. Our recommendations focus on USDA and its Federal partners as 
these provide the largest levers to achieve scale of mitigation. At the 
same time, these recommended actions will support and expand upon 
important work being conducted by land-grant institutions, other 
universities and institutes, the Foundation for Food and Agriculture 
Research (FFAR), commodity and grower groups, and the private-sector.
Goals and Objectives
    For USDA to achieve its goal of advancing climate-smart 
agriculture, it must strategically align its vast research expertise 
and resources. A climate-smart agriculture research enterprise should 
be developed that coordinates economic, social, and environmental 
sustainability research across USDA mission areas, the U.S. Government, 
and non-Federal research partners and builds the research 
infrastructure needed to facilitate this important work.

    USDA research needs to be precompetitive, scalable, and benefit all 
farmers, ranchers, and foresters in order to achieve near term impacts 
and position the diversity of U.S. agricultural systems to make 
ambitious and durable contributions to climate change mitigation. We 
recommend that USDA's research and science programs focus on a limited 
number of specific objectives to achieve this goal:

  I.  Coordinate science and research to maximize the effectiveness and 
            impact of public investments.

  II.  Build the business case for climate-smart agricultural 
            practices, including the case for public benefits and 
            public investments in farmer incentive programs.

  III.  Improve USDA data sharing policies and infrastructure to 
            facilitate research conducted by trusted partners.

  IV.  Support equitable engagement by diverse producers and 
            agricultural systems.

  V.  Improve the rigor of climate models and measurements to support 
            the U.S. Greenhouse Gas Inventory and reduce risk in 
            private environmental markets.

  VI.  Create new tools and practices to expand the climate-smart 
            agriculture toolkit.
I. Coordinate Science and Research
    Coordinating USDA's climate research investments is critical to 
ensure that USDA funding has the greatest impact and best complements 
and leverages private-sector research investments.
    USDA's immediate, highest priority should be to create a ``Climate 
Research Coordinator'' position to develop a coherent ``all of USDA'' 
climate research strategy across its agencies, coordinate climate 
research with other Federal agencies, and engage with external research 
stakeholders. This position could be created in the Office of Chief 
Scientist to work with the Secretary's USDA Climate Advisor and other 
climate research leads within USDA.
    A Climate Research Coordinator should be tasked with preparing an 
inventory of USDA climate mitigation and adaptation research to better 
leverage existing efforts, identify gaps for future research, and avoid 
duplication in efforts. This inventory should include research 
conducted by the Office of Research, Education and Economics (ARS, ERS, 
NIFA, AFRI, NASS), plus the Office of Farm Production and Conservation 
(NRCS, RMA, FSA) and the Office for Trade and Foreign Agriculture 
Affairs (FAS), as well as other Federal agencies engaging in climate 
research including the Environmental Protection Agency, National 
Science Foundation, U.S. Geologic Service, Department of the Interior, 
Department of Energy, and USAID.
    USDA should publicly release an annual report of the inventory's 
findings and host ``state of the science'' meetings to engage the 
research community and other stakeholders. External research 
stakeholders that should be engaged include historically black colleges 
and universities, land-grant institutions, food and agriculture 
technology companies, foundations, think tanks, forestry and 
agricultural groups, non-governmental organizations, and leading 
public- and private-sector researchers from the international 
community.
    In addition to coordinating research moving forward, USDA should 
analyze existing research archives to mine datasets that can provide 
useful insights moving forward. Historic information can be used to 
build the evidence base for climate-smart practices and support efforts 
to set industry baselines for carbon sequestration. Understanding the 
body of agricultural research to date will support the Climate Research 
Coordinator in developing a cohesive and informed research agenda 
moving forward.
II. Build the Business Case for Climate-Smart Practices
    Farmers, ranchers, and foresters will only adopt climate-smart 
practices at the rate needed to substantially reduce agricultural 
emissions once they understand the clear economic benefits of doing so. 
USDA-supported intramural and extramural research can play a critical 
role in building this business case for co-investments in climate-smart 
agriculture practices by individual producers while articulating the 
return on investment to society from public investment and supporting 
development of the private marketplace.

    USDA should direct research assets to conduct precompetitive 
analysis and modeling that demonstrates the economic value associated 
with climate-smart agriculture practices, including by:

   Estimate the cost of implementation and return on investment 
        for individual growers that adopt individual or stacked 
        climate-smart practices.

   Quantify the public benefits derived from climate-smart 
        practices, including landscape-level impacts. These could 
        include linked benefits between working lands and built 
        environments for flood risk reduction, water quality 
        improvements or fire risk reduction (e.g., Iowa Watershed 
        Approach \3\ funded by HUD), as well efforts to quantify 
        multiple benefits from existing farm programs like the 
        Conservation Reserve Program.
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    \3\ https://iowawatershedapproach.org/.

   Research the longevity and durability of environmental 
        benefits from climate-smart practices, including dynamics such 
        as the relationship between the length of practice 
        implementation and accrual of soil carbon, the effects of 
        practice reversion/termination and variability across 
---------------------------------------------------------------------------
        geographies and production systems.

   Study potential positive and negative impacts of current 
        Federal policy incentives on conservation practice adoption and 
        crop and livestock diversification, including how adjustments 
        to the Federal crop insurance could promote conservation. This 
        work could also consider the use of Marketing Assistance Loans 
        for diversification of farming operations.

    This research should consider impacts of climate-smart practices on 
the diversity of agricultural operations, including dynamics such as 
size, region, commodity, and level of capital that can influence 
profitability. Building the business case for conservation is a 
keystone for increasing adoption of practices and should be a priority 
that is expressed in research projects across the board, not segmented 
into siloed research projects. Most importantly, the findings must be 
shared with producers and other agriculture stakeholders. Technical 
assistance providers, particularly NRCS field offices and land-grant 
university extension offices, can help with disseminating information 
to producers that is specific to their geographic area.
III. Improve USDA Data Sharing Policies and Infrastructure
    Connecting the extensive agricultural research community to USDA's 
vast agricultural datasets is a critical strategy to quickly and 
efficiently answer key research questions about the multiple benefits 
of climate-smart agricultural practices while building trust across the 
agricultural research community.
    USDA should engage trusted research partners in advancing USDA 
research priorities by developing data sharing and research 
infrastructure that allows farmers and university researchers to access 
anonymized USDA datasets. The scale and scope of the agriculture 
research investments needed to meet the climate crisis can be 
accomplished through developing partnerships with land-grant 
universities, commodity groups, and others. USDA has several datasets 
that can be used by external researchers to relate conservation 
practices to farm profitability, helping to build the business case for 
climate-smart agriculture.
    USDA data infrastructure should be modernized in a way that 
respects farmer data privacy and autonomy, reduces reporting burden, 
and communicates useful research conclusions back to producers to 
inform decision-making. By investing in improvements to data collection 
systems and streamlining data management processes, USDA can simplify 
the data reporting process, which is overly burdensome for many farmers 
and ranchers. Creating channels to clearly communicate how producer 
data is being used, allowing producers to opt in or out of research 
projects, and allowing producers that opt in to easily access their 
data and research results can build trust in the farmer and rancher 
community that their data is being used responsibly and effectively to 
generate knowledge that will ultimately benefit their operations.
IV. Support Equitable Engagement by Diverse Farmers, Ranchers, and 
        Farming Systems
    For the entire agricultural sector to succeed in reducing its 
emissions, all types of producers must be engaged. USDA should 
therefore ensure that diverse farmers, ranchers, and farming systems 
can participate in Federal conservation programs and adopt climate-
smart agricultural practices. This is key to reaching scale of adoption 
in an equitable way. Strategies for supporting equitable producer 
engagement include:

   Partner with state Departments of Agriculture, land-grant 
        cooperative extension offices, and NGOs to expand extension and 
        outreach, particularly to small and disadvantaged farmers and 
        non-operating landowners.

   Conduct engagement and extension to historically 
        disadvantaged farmers and ranchers, drawing from examples in 
        the Sustainable Agriculture Research and Education (SARE) 
        program.

   Conduct social science research to identify barriers to 
        adoption of climate-smart agriculture practices. In particular, 
        study barriers to participation in USDA conservation incentive 
        programs by diverse agricultural producers and producers who 
        rent farmland. Use these findings to identify ways to adjust 
        programs to encourage robust participation.

   Consider the impacts of climate-smart practices on the 
        diversity of agricultural operations, including dynamics such 
        as size, region, commodity, and level of capital that can 
        influence profitability.

   Expand the Specialty Crop Block Grant program to include 
        more emphasis on mitigation practices across the diversity of 
        regional farming systems in coordination with state Departments 
        of Agriculture.
V. Improve the Rigor of Climate Models and Measurements
    USDA should improve the rigor and transparency of climate models 
and measurements to support the efforts of the U.S. Greenhouse Gas 
Inventory and private ecosystem service markets. Research and science 
can help ensure that Federal investments in climate-smart agriculture 
and forestry are backed by strong science, using both intramural and 
extramural research to build the evidence base around the contribution 
of agricultural practices to greenhouse gas emissions and carbon 
sequestration. A national monitoring system that addresses both field-
scale and landscape-level climate impacts in particular could enhance 
the rigor of the measurements and models that underlie public 
investments and private markets. There is an opportunity to scale up 
soil monitoring systems now, while developing new technologies that 
will drive down costs in the future. The following measures will help 
USDA build the foundational knowledge necessary to measure the climate 
impacts of agricultural systems and practices with greater rigor than 
current efforts can achieve:

   Improve the modeling of greenhouse gas emissions and carbon 
        sequestration in agricultural soils by funding and conducting 
        research to improve baselines and account for regional 
        variability, greater differentiation of crops and livestock, 
        forestry systems, increased spatial resolution and sources of 
        uncertainty.

   Establish a national soil carbon and nitrous oxide emissions 
        monitoring network, leveraging Agricultural Research Service 
        and Natural Resource Conservation Service research sites 
        together with land-grant universities. Research the durability 
        of carbon sequestration, including dynamics such as the 
        relationship between the length of practice implementation and 
        accrual of soil carbon, effects of practice reversion and 
        termination.

   Integrate remote sensing tools (e.g., LIDAR, satellite 
        imagery) with Forest Inventory and Analysis (FIA) and other 
        field plots to improve accuracy and resolution of estimates of 
        greenhouse gas emissions and sequestration in woody biomass 
        (including forests, trees in croplands and grasslands, and 
        urban trees).

   Increase the frequency of the Conservation Effects 
        Assessment Project (CEAP) and add specific climate research 
        objectives to enhance understanding of the relationship between 
        conservation practices, greenhouse gas emissions, and carbon 
        sequestration.

   Develop and pilot more precise and cost-effective carbon 
        measurement tools for agricultural soils.

   Assess and coordinate USDA, DOE and ARPA-E SMARTFARM 
        programs to research and quantify the net greenhouse gas 
        footprint from different biofuel feedstocks, including land use 
        impacts and opportunities for expanded use of agricultural 
        biomass and processing food loss and waste.

   Link the National Soil Web Survey and the National Resources 
        Inventory to better leverage these tools for monitoring changes 
        in soil carbon storage.
VI. Expand the Climate-Smart Ag Toolkit
    USDA should expand knowledge of climate-smart agricultural 
practices and develop new practices to accelerate climate change 
mitigation progress across the full diversity of U.S. production 
systems. There is a strong body of existing knowledge about the 
benefits of common conservation practices in major row cropping systems 
(e.g., cover cropping and no-till) that can be leveraged to expand 
adoption of some practices today, recognizing variations in efficacy 
across different geographies and production systems. However, there is 
also a need to develop new strategies and practices, particularly for 
other crops; new crop varieties that are both more resilient to climate 
change and have a smaller GHG footprint; more tools for the major 
sources of emissions from livestock and nitrogen application; bioenergy 
from crop, food processing and livestock waste management; and on-farm 
energy use. Tools that work with the constraints and economics of 
smaller operations should be considered.
    Some research initiatives to expand the climate-smart agriculture 
toolkit may fit within existing intramural and extramural research 
initiatives, such as within the Agricultural Research Service (ARS), 
NIFA's Agriculture Food Research Initiative (AFRI), or through 
partnership with the Foundation for Food and Ag Research (FFAR). 
Options that carry too much risk or lack sufficient commercial 
applications for existing research initiatives to take on may be 
prioritized by the Agriculture Advanced Research and Development 
Authority (AGARDA), as soon as that new authority receives 
Congressional appropriations and has a leader nominated by the 
Administration. All of these Federal research initiatives should 
coordinate with ongoing private-sector efforts to develop innovative 
agriculture technologies so as to complement rather than duplicate 
those efforts.
    The following recommendations are designed to help USDA fill 
existing practice and knowledge gaps to facilitate broader practice 
adoption among U.S. producers.

   Invest in research and development in crop breeding for 
        deep-rooted or perennialized analogues to current commodity 
        crops that would sequester more carbon in root systems.

   Research, validate, and pilot commercial technologies, such 
        as nitrogen inhibitors, soil carbon measurement tools and 
        livestock feed additives, to inform food and ag sector 
        decision-making.

   Conduct research into new ways to reduce emissions from 
        nitrogen fertilizers, enteric fermentation, and manure 
        management.

   Invest in improving tools and practices for diverse farming 
        operations, such as farms that grow multiple crops and 
        integrated crop-livestock systems.

   Research embedded energy in irrigation and other farm 
        management as a basis for considering expansion of incentives 
        for on-farm energy use, including replacement of less energy 
        efficient farming equipment.

   Review opportunities for utilization of agricultural biomass 
        and food processing waste streams, including bioenergy 
        production and pyrolysis to create biochar.

   Audit the state of the science on climate impacts of various 
        livestock and grazing practices and determine which are most 
        likely to reduce risks and contribute to climate change 
        mitigation.

   Advance options for carbon sequestration and emission 
        reductions through aquaculture, including emerging 
        opportunities such as kelp farming.

   Research plant genomics to identify varietals or specific 
        genes that could be enhanced to provide benefits for climate 
        change mitigation or resilience.
Conclusion
    Climate change solutions must be supported by research and science. 
The solutions must be inclusive of the diverse interests that make up 
our food and agriculture system, which can be both a contributor and a 
solution to climate change. Coordinating the science and research to 
maximize effectiveness and the impact of public investments is 
imperative. If we can use our research enterprise to build a data-
driven business case for climate-smart agricultural practices, we can 
create appropriate incentives and adoption to drive the management 
changes we need to see across U.S. working lands.

          The AGree platform includes the AGree Economic and 
        Environmental Risk Coalition (AGree E2 Coalition) and the AGree 
        Climate, Food, and Ag Dialogue (CFAD).

                  The AGree Economic and Environmental Risk Coalition 
                advocates for Federal policy improvements to bridge the 
                gap between the adoption of on-farm conservation 
                practices and improved profitability for farmers and 
                ranchers. Through collaboration and frank discussion, 
                our work on crop insurance, agriculture data access, 
                cover crops, and banking and finance is advancing the 
                agricultural sector's movement toward a more resilient, 
                profitable, and sustainable American agricultural 
                system. Visit FoodandAgPolicy.org to learn more and 
                join our effort to transform Federal food and 
                agriculture policy to meet the challenges of the 
                future.
                  The AGree Climate, Food, and Ag Dialogue (CFAD) is a 
                diverse and pragmatic group of climate, food, former 
                government officials, and agriculture leaders working 
                to promote Federal action on climate that is inclusive 
                of food and agriculture. CFAD includes producers, food 
                and agriculture companies, former government officials, 
                and civil society organizations working together to 
                promote Federal action on climate change that is 
                commensurate with the urgency and scale of the climate 
                crisis. Visit ClimateFoodAg.org to learn more about our 
                work and read our guiding principles for Federal 
                climate policy solutions.

    The Chairman. Thank you, Ms. Duncanson.
    And now, Senator Heitkamp, welcome. Please begin when you 
are ready.

  STATEMENT OF HON. HEIDI HEITKAMP, CO-CHAIR, FARM AND FOREST 
    CARBON SOLUTIONS TASK FORCE, BIPARTISAN POLICY CENTER, 
                        WASHINGTON, D.C.

    Ms. Heitkamp. Thank you so much, Chairman Scott, and thank 
you to the Ranking Member Thompson for letting me speak on 
behalf of the great work of the Bipartisan Policy Center, and 
my great friend and co-chair for this effort, Senator Saxby 
Chambliss, who I know will share my comments and urge you all 
to become familiar with the work that we have done.
    I want to maybe just start out by adding to some of the 
comments that you have already heard from the Ranking Member 
and from the Chairman as we move into this next couple months. 
We have been spending a lot of time talking about how energy 
security is now national security, but we will be now talking 
about how food security is national security and global 
security for our democracy. And so, this is going to challenge 
not only our energy supply chain, but also our food supply 
chain. And that is why a discussion like this on how we can 
increase productivity, how we can reduce the costs of inputs is 
so critical. And I think a lot of the work that is being done 
right now by all the groups that you are hearing from is really 
geared towards making farmers more profitable, more able to 
sell into the global market.
    I want to just talk a little bit about our process. We 
started out, Saxby and I did, by saying boy, have things 
changed. When we were in the Senate, if you had talked about 
climate and farmers and rural America in the same sentence, you 
might have been drug out of the room. The attitudes of rural 
America and farmers have really changed as they have seen the 
consequences of climate, but also as they see the opportunity 
of growing for, and selling to, a global market and what that 
means. And so, we were very convinced that the time was right 
for us to begin this process.
    I want to just report what a soybean farmer said to me in 
North Dakota when I asked him about climate. He said, ``I 
expect that we are going to have to be able to prove 
sustainability and climate sensitivity for the commodities that 
we sell into the global market in the future. Let's get 
going.''
    The next step that we took was evaluating where we are, and 
I really have to give a shoutout to the great staff at BPC. 
They did a great job in evaluating what that looks like. 
Second, I want to reiterate kind of the goals. Do no harm. 
Let's keep the programs that are working, working for us. Make 
it economically important and viable to adapt some of these 
challenges, and let's make sure that we don't leave behind 
something that hasn't been said here. The early adopters--I am 
always sensitive to people who, I have been doing this for a 
long time, where is my benefit? You are trying to promote 
change in others. Do I get a benefit from change? And so, we 
basically came up with a list of when you look at it, six 
themes.
    I want to focus on two because I don't have a lot of time 
left. The first one is workforce. You have all the data in the 
world, but if you don't have somebody ready to engage with 
farmers and ranchers on the ground, in the field telling them 
look what your neighbor did over here. How are we going to help 
you understand how these programs work? And so, you can design 
all these programs. You can have all the pilot programs in the 
world, but if you don't have an implementation strategy for 
those programs, this won't work. And so, that is why it is so 
important that we educate that next generation of farmers.
    The second thing I want to highlight is carbon markets. And 
I know that hasn't always been a subject of consensus on your 
Committee, but I want to just relay some of the things that we 
heard. People who are going to buy into carbon markets, they 
want certainty. They want to know that they are not buying 
something that just simply is--I wouldn't say junk, but they 
aren't--they are buying something that actually has a climate 
impact. They have reputational risks if they don't, and as they 
talk about their own kind of carbon sensitivity, they want to 
make sure that they are getting the bang for the buck and the 
environment is getting the bang for the buck. And so, that is 
why a lot of the research and a lot of the work that is being 
done by the Committee to kind of evaluate how do we give it the 
Good Housekeeping Seal of Approval, if I can use those words, 
and I know that Secretary of Agriculture is very engaged, and 
certainly the Growing Climate Solutions Act would task the 
Secretary with that. I think it is important that that work is 
started as soon as possible, because that is where we are going 
to see a huge benefit, economic benefit for our ag producers.
    Thank you, Mr. Chairman. I look forward to the questions 
and answers.
    [The prepared statement of Ms. Heitkamp follows:]

 Prepared Statement of Hon. Heidi Heitkamp, Co-Chair, Farm and Forest 
Carbon Solutions Task Force, Bipartisan Policy Center, Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for convening this hearing: A 2022 Review of the 
Farm Bill: The Role of USDA Programs in Addressing Climate Change. I am 
joining you today in my capacity as co-chair, alongside former Senator 
Saxby Chambliss, of the Bipartisan Policy Center's Farm & Forest Carbon 
Solutions Task Force. I appreciate the opportunity to share the views 
of the Task Force on the important linkages between conservation, 
climate solutions, and rural economic development. My testimony today 
focuses on the roadmap we developed for scaling public and private 
investments in land-based climate solutions, ensuring a high level of 
integrity for these solutions, and reducing barriers to voluntary 
stewardship practices.
    For this hearing, I'd like to emphasize four key points:

  1.  Natural climate solutions have untapped potential in the United 
            States. Congress and the Administration can help us tap 
            this potential by catalyzing new carbon-based revenue 
            opportunities for farmers, ranchers, and forest landowners.

  2.  Priority should be given to expanding incentives and cost-share 
            programs for natural climate solutions, promoting new 
            investments in workforce training and education, delivering 
            climate-focused technical assistance, improving data and 
            risk management, and spurring technology innovation to make 
            natural climate solutions cheaper and easier to implement.

  3.  Both government and the private-sector need to step up their 
            efforts and partner together to achieve large-scale 
            transformation.

  4.  If enacted, our proposed policies will speed the deployment of 
            natural climate solutions, deliver significant 
            environmental co-benefits (improved air and water quality, 
            wildlife habitat, etc.), and boost the economy of rural 
            communities.

    In sum, we believe American farmers, ranchers, and forest 
landowners have a unique opportunity, with your help, to build on a 
long and bipartisan history of environmental stewardship to further 
support--and be rewarded for--broader climate mitigation efforts.
1. Introduction
    America's farmers, ranchers, and forest landowners are key partners 
in the effort to combat climate change--both as business operators who 
are uniquely exposed to the damaging effects of extreme weather and as 
stewards of lands that play an important role in the carbon cycle. 
Studies show that boosting the amount of carbon stored in plants, 
trees, and soils can make an important contribution to slowing the 
buildup of carbon dioxide in the atmosphere, and will be needed, along 
with emission reductions and other strategies, to meet national and 
international climate goals. In fact, climate-friendly land management 
practices--often called ``natural climate solutions''--are especially 
attractive, because many of them deliver valuable co-benefits in terms 
of wildlife habitat, recreation amenities, and air and water quality. 
Such practices can also make farms, forests, and rangelands more 
resilient to the damaging effects of climate change.
    In this context, emerging markets for carbon credits, new corporate 
sustainability initiatives, and government incentives for conservation 
and greenhouse gas reductions present a substantial economic and 
environmental opportunity--one with the potential to generate billions 
of dollars of investment in working farm and forest lands. To fully 
realize this opportunity, however, substantial hurdles will have to be 
overcome. Markets for carbon credits and government incentive programs 
are still not fully mature, and few farmers, ranchers, and forest 
landowners are accustomed to viewing carbon sequestration and avoided 
emissions as a business opportunity. Even those who do may lack the 
time, expertise, and financial resources to assess their options for 
carbon markets or incentive programs and then implement changes in 
their land management practices, particularly if those changes require 
large up-front investments in expectation of uncertain long-term 
returns.
    BPC's Farm and Forest Carbon Solutions Task Force came together in 
early 2021 to explore practical ideas for tackling these challenges. 
Task force members represent a wide range of interests and 
perspectives, but we share the view that constructive engagement with 
the agriculture and forestry sectors is crucial to the success of 
broader U.S. climate policy.
    My testimony today begins by discussing our broad coalition to 
scale natural climate solutions and our unique, bipartisan approach to 
developing consensus policy recommendations. I'll then summarize key 
Task Force recommendations for new investments and strategic changes at 
USDA that would enable more farmers and forest landowners to engage in 
climate solutions without replacing core farm bill programs.
2. Task Force Background and Focus Areas
    Co-chair Chambliss and I worked with 18 fellow Task Force 
members,[i] including leaders from agriculture and forestry 
industries; environmental and conservation nonprofits; trade 
associations; and former government officials. Together our group 
combined wide-ranging expertise on key policy issues and included the 
perspectives of small and large agricultural operations; small and 
large landowners, timber companies, forest products groups, urban 
forestry, and public lands; center-left and center-right environmental, 
conservation, and hunting and fishing organizations; rural communities; 
and historically underserved groups--Native American Tribes, African 
Americans, and women producers. Task Force members also command deep 
knowledge about how government programs are effectively funded, 
overseen, and implemented, and leverage strong relationships across 
stakeholder communities.
---------------------------------------------------------------------------
    \[i]\ https://bipartisanpolicy.org/carbon-solutions-task-force/.
---------------------------------------------------------------------------
    In developing recommendations, we were guided by four principles 
that we believe are critical to the effectiveness of farm- and forest-
based climate strategies and that build on our nation's track record of 
effective public-private cooperation in the forestry and agricultural 
sectors. These principles include:

   Emphasizing voluntary and incentive-based approaches,

   Finding solutions that are supportive of the needs of farm 
        and forest producers and landowners,

   Promoting partnership and collaboration as the best way to 
        address diverse constraints and priorities, and

   Providing for accountability and transparency in the methods 
        used to track and quantify benefits from natural climate 
        solutions.

    With the benefit of insights and ideas generated over the course of 
multiple workshops and meetings and input from a panel of scientific 
and technical experts, our group reached agreement on 24 policy 
recommendations that were published in a report last month.\1\ The 
breadth of our recommendations reflects the range of actions we believe 
are necessary to realize the full potential of farm- and forest-based 
climate solutions. Several broad themes provide a framework for 
organizing our recommendations and implementing a comprehensive policy 
approach:
---------------------------------------------------------------------------
    \1\ Available at: https://bipartisanpolicy.org/report/federal-
policies-to-advance-natural-climate-solutions.

  1.  Increase investment in natural climate solutions through existing 
            farm bill programs and offer pathways to new market 
---------------------------------------------------------------------------
            opportunities for farmers, ranchers, and forest landowners.

  2.  Expand technical assistance for implementing natural climate 
            solutions and address related workforce needs.

  3.  Strengthen the integrity of voluntary carbon markets and increase 
            access to these markets.

  4.  Develop new public and private financial and insurance 
            instruments that address barriers to the broad adoption of 
            natural climate solutions.

  5.  Enhance resilience to wildfire, drought, insects and disease, and 
            invasive species on a landscape scale.

  6.  Foster technology innovation in the agriculture and forestry 
            sectors to make natural carbon solutions cheaper and easier 
            to implement and to address measurement and monitoring 
            challenges.

    The next section of this testimony summarizes key task force 
recommendations that relate to USDA programs and authorities under the 
jurisdiction of this Committee.
3. Build on the Foundation of Existing Farm Bill Programs
    The Task Force acknowledged the value of existing farm bill 
programs by designing many of our recommendations to build from, 
address gaps in, or complement these programs. There is a strong 
bipartisan history of including provisions in the farm bill that 
support conservation, and many of these programs have become very 
popular with producers. Moreover, there are efficiencies to be gained 
in using existing programmatic infrastructure and resources. We see the 
upcoming 2023 Farm Bill as a key opportunity to authorize and implement 
strategic changes at USDA that enable more farmers and forest 
landowners to engage in climate solutions without replacing core farm 
bill programs. Our subset of recommendations for improving USDA 
programs primarily relate to opportunities within the following farm 
bill titles:

   Title [II]: Conservation.

   Title [VII]: Research, Extension, and Related Matters.

   Title [VIII]: Forestry.

   Title [XII]: Miscellaneous (Support for beginning, socially 
        disadvantaged, and veteran farmers and ranchers).

    In addition, we offer a number of recommendations that could be 
enacted through legislative vehicles other than the farm bill-- 
including, for example, through the Growing Climate Solutions Act, 
Rural Forest Markets Act, Trillion Trees Act, and the annual 
appropriations process. For a comprehensive look at all Task Force 
recommendations, please refer to our full report available at: https://
bipartisanpolicy.org/report/federal-policies-to-advance-natural-
climate-solutions. I have included the executive summary as an appendix 
to this testimony.
A. Conservation Incentives
    We recommend that Congress substantially increase USDA funding for 
key conservation cost-share and incentive programs under Title [II] of 
the farm bill, dedicating these funds specifically for greenhouse gas 
reductions and carbon sequestration purposes (Task Force report 
recommendation 1A). The Task Force is aligned with more than 200 
agriculture and conservation organizations that expressed support last 
summer for doubling farm bill conservation program funding \2\--so that 
private working lands can both take advantage of new carbon-based 
revenue opportunities and help lead the fight against climate change. 
The Bipartisan Policy Center assessed the employment and economic 
effects of investing in farm- and forest-based climate solutions on 
America's public and working lands, finding that new Federal funding 
could support up to 22,000 jobs per year and contribute up to $2.2 
billion per year to U.S. gross domestic product.\3\
---------------------------------------------------------------------------
    \2\ Letter: 216 Groups Call for Double Agriculture Conservation 
Funding. Available at: https://www.nwf.org/-/media/Documents/PDFs/
Press-Releases/2021/08-04-21--Letter-216-Groups-Call-for-Double-Ag-
Cons-Funding.
    \3\ Investments modeled include wildland firefighting, Federal 
forest thinning and replanting, tree planting on marginal lands, cover 
cropping, grassland restoration, and anaerobic digesters. For more 
information go to: https://bipartisanpolicy.org/ncs-resources.
---------------------------------------------------------------------------
    USDA programs with the greatest potential to achieve positive 
climate and economic outcomes in the land sector include but are not 
limited to the Environment Quality Incentives Program (EQIP), the 
Conservation Stewardship Program (CSP), the Regional Conservation 
Partnership Program (RCPP), the Landscape Scale Restoration (LSR) 
program, the Farming Systems Project (FSP), and the Conservation 
Technical Assistance (CTA) program. We recommend establishing climate-
focused program metrics and benchmarks to evaluate program 
effectiveness (Task Force report recommendation 1B).
    Many of these programs are implemented by USDA's Natural Resources 
Conservation Service (NRCS). Other task force recommendations aimed 
specifically at NRCS include streamlining the NRCS process for adopting 
new conservation practice standards (Task Force report recommendation 
1D), expanding existing measurement networks like the National 
Resources Inventory to better integrate climate and carbon-related data 
(recommendation 1E), and expanding the NRCS network of technical 
service providers through more innovative partnerships (recommendation 
2C). Congress could also authorize the NRCS to be a lead agency in 
establishing a process for farmers, ranchers, and forest landowners to 
receive a one-time payment for early adoption of climate-smart 
practices (recommendation 4D), and in establishing a new, interagency 
cross-boundary rangeland health initiative (recommendation 5C).
B. Technical Assistance and Workforce Development
    Our recommendations call for expanding Federal technical assistance 
to achieve greater and more effective uptake of climate-friendly 
practices and to promote more informed decision making that maximizes 
economic and environmental co-benefits and ensures long-term 
sustainability. Investments in workforce development are also vital to 
support the next generation of farmers, ranchers, and foresters. 
Although some relevant workforce development programs and many core 
technical assistance programs that support Title [II] implementation 
are authorized in legislation other than the farm bill, our 
recommendations identify several opportunities related to Titles [VII] 
and [XII].
    These include expanding private-sector partnerships with the 
Cooperative Extension program for climate-targeted technical assistance 
(Task Force report recommendation 2A) and providing tailored technical 
assistance (similar to the Farming Opportunities Training and Outreach 
Program authorized in the 2018 Farm Bill) to encourage Tribes and 
historically underrepresented producers and landowners to adopt 
climate-friendly practices (recommendation 2B). We also recommend new 
investments in education and workforce development through extension, 
national service corps programs like AmeriCorps, Tribal colleges and 
universities, and historically Black land-grant universities 
(recommendation 2D).
C. Land Access
    Just as a strong workforce is necessary to scale natural climate 
solutions, preventing the conversion of productive working lands and 
increasing access to land is a critical and underappreciated climate 
strategy. Therefore, we urge Congress to assess and develop new 
incentives--such as cost-shares, state block grants, and tax reform--to 
improve land access, tenure, and leasing, especially for new, small, 
and historically underserved landowners and producers, and owners of 
heirs' property and fractioned Tribal lands (Task Force report 
recommendation 4C). New Federal incentives could help address the major 
financial, social, and legal obstacles that limit secure access to 
affordable farmland.
D. Improving Data Tools and Strengthening Emerging Carbon Markets
    We recommend that USDA strengthen its data, modeling, and 
technical/decision support tools to provide farmers, ranchers, and 
forest landowners with accurate estimates of the impacts of climate-
smart practices (Task Force report recommendation 2F). These tools 
include, but are not limited to, COMET-Farm, COMET-Planner, LandPKS, 
DairyGEM, GRACEnet, APEX, Rangeland Analysis Platform, CART, and the 
Forest Inventory and Analysis program. More reliable models and 
improvements in other predictive tools are needed to improve integrity 
and transparency in voluntary carbon markets and to reduce the 
administrative and technical burdens faced by potential participants in 
Federal conservation programs, supply chain sustainability programs, 
and voluntary carbon markets.
    The costs of monitoring, reporting, and verifying climate benefits 
can be prohibitive for small producers and forest landowners seeking to 
participate in voluntary carbon markets. Similarly, a lack of clarity, 
transparency, and standardization among credit buyers, project 
developers, and landowners can be a barrier to quality assurance for 
farm- and forest-based carbon credits. Currently, however, there are no 
government programs that seek to address these issues. Task Force 
members believe the private-sector must step up, in concert with 
targeted public investments, to address problems with transparency and 
liquidity, incomplete risk management mechanisms, and inadequate 
financing that are making it difficult for supply to respond to market 
demand. We therefore recommend that Congress authorize new efforts to 
improve market integrity and new funding to reduce barriers to entry to 
emerging carbon markets (Task Force report recommendation 3A). We also 
call on USDA, in collaboration with other Federal agencies, to advance 
public-private partnerships for enhancing trading infrastructure and 
developing insurance and structured finance products for voluntary 
carbon markets (recommendation 3C).
E. Forestry
    The Infrastructure Investment and Jobs Act of 2021 allocates 
historic levels of funding--over $6 billion--for forest restoration, 
hazardous fuels management, and wood products innovation, among other 
provisions that support natural climate solutions. Accordingly, our 
recommendations include a strong focus on policy implementation, 
including through Title [VIII] Forestry programs, so that this and 
other recommended funding can be deployed quickly and effectively.
    Task Force members believe the time is now to build on these 
critical investments to enhance the resilience of our natural and 
working lands in the face of increasing threats from wildfires, 
droughts, floods, and other extreme weather, as well as threats from 
pests and invasive species. This includes providing needed resources to 
the USDA Forest Service and Department of Interior, not only for 
wildland firefighting, but for prevention strategies like thinning, 
prescribed burns, training, fire detection via remote sensing, and 
prediction using high performance computing. An all-of-government 
approach to wildfire resilience is essential (Task Force report 
recommendation 5B).
    We also recommend pursuing a comprehensive strategy to modernize, 
expand, and fund the network of public and private seed collections and 
tree nurseries (recommendation 5A). Current estimates suggest that 
rapidly expanding reforestation demand, partly due to wildfire trends, 
will require more than doubling tree nurseries' current output, from 
roughly 1.3 billion seedlings per year to 3 billion.
F. Research
    Innovation in agriculture and forestry is critical to meet the 
evolving economic and environmental demands on these sectors. Thus, we 
enthusiastically support R&D investments that will make natural climate 
solutions less expensive and easier to implement (Task Force report 
recommendation 6A). Innovation is also required to improve the tools 
available to monitor, quantify, and verify environmental and climate 
benefits and reduce related costs.
    To meet these needs, we believe USDA must emulate the more 
integrated research, development and commercialization approach that 
exists in the DOE National Labs. Consistent with Title [VII], the Task 
Force strongly supports increased funding across the USDA enterprise, 
including for the Foundation for Food and Agriculture Research. We also 
call for increased cooperation to promote innovation in natural climate 
solutions--across Federal agencies (especially DOE/ARPA-E, NIST, USGS, 
and NSF), universities, and the private-sector. Enhancing the 
innovation pipeline, from research and development to broad 
commercialization of new technologies, is critical to scaling farm- and 
forest-based climate solutions.
4. Conclusion
    The bipartisan infrastructure bill will provide critical resources 
for implementing natural climate solutions, particularly in the 
forestry sector. But the levels of funding authorized in that 
legislation, while historic, represent just a down-payment on the 
investments that will be needed to meet the diverse needs of producers 
and land managers in the decades ahead. Looking toward the next farm 
bill, we see a strong opportunity and widespread support for a suite of 
policies to increase access to Federal Government programs and private 
market opportunities for producers and landowners of all types and 
sizes, and across the whole natural climate solutions supply chain. We 
strongly believe this can be accomplished without taking away from core 
farm bill programs and instead drawing on policymakers' decades of 
experience supporting and implementing voluntary and incentive-driven 
conservation solutions for America's farmers, ranchers, and forest 
landowners.
    The 24 recommendations put forth in our full Task Force report 
reflect confidence that the Federal Government--and USDA in 
particular--can be effective in catalyzing the rapid scale-up of farm- 
and forest-based carbon solutions. Beyond helping us meet climate 
goals, these solutions will stimulate investment in rural communities 
and bolster the long-term resilience and productivity of America's 
public and working lands. With the bipartisan support that exists for 
all these objectives, progress is not only possible, but very much 
within reach. Co-chair Chambliss, members of the Task Force, and I look 
forward to a productive dialogue and partnership with Congress to 
inform your work positioning America's farmers, ranchers, and forest 
landowners to continue to deliver climate solutions.
    Appendix A: Executive Summary of the BPC Farm and Forest Carbon 
              Solutions Task Force Policy Recommendations
BPC Farm and Forest Carbon Solutions Task Force Policy Recommendations
Executive Summary
    America's farmers, ranchers, and forest landowners are key partners 
in the effort to combat climate change--both as business operators who 
are uniquely exposed to the damaging effects of extreme weather and as 
stewards of lands that play an important role in the carbon cycle. 
Studies show that boosting the amount of carbon stored in plants, 
trees, and soils can make an important contribution to slowing the 
buildup of carbon dioxide in the atmosphere, and will be needed, along 
with emission reductions and other strategies, to meet national and 
international climate goals. In fact, climate-friendly land management 
practices--often called ``natural climate solutions''--are especially 
attractive, because many of them deliver valuable co-benefits in terms 
of wildlife habitat, recreation amenities, and air and water quality. 
Such practices can also make farms, forests, and rangelands more 
resilient to the damaging effects of climate change.
    In this context, emerging markets for carbon credits, new corporate 
sustainability initiatives, and government incentives for conservation 
and greenhouse gas reductions present a substantial economic and 
environmental opportunity--one with the potential to generate billions 
of dollars of investment in working farm and forest lands. To fully 
realize this opportunity, however, formidable hurdles will have to be 
overcome. Markets for carbon credits are still not fully mature, and 
few farmers, ranchers, and forest landowners are accustomed to viewing 
carbon sequestration and avoided emissions as a business opportunity. 
Even those who do may lack the time, expertise, and financial resources 
to assess their options for carbon markets or incentive programs and 
then implement changes in their land management practices, particularly 
if those changes require large up-front investments in expectation of 
uncertain long-term returns.


    BPC's Farm and Forest Carbon Solutions Task Force came together in 
early 2021 to explore practical ideas for tackling these challenges. 
Task force members represent a wide range of interests and 
perspectives, but we share the view that constructive engagement with 
the agriculture and forestry sectors is crucial to the success of 
broader U.S. climate policy. Over the course of multiple workshops and 
meetings, and with input from a panel of scientific and technical 
experts, we sought to develop proposals that reflect four guiding 
principles, including the importance of:

   Emphasizing voluntary and incentive-based approaches,

   Finding solutions that are supportive of the needs of farm 
        and forest producers and landowners,

   Promoting partnership and collaboration as the best way to 
        address diverse constraints and priorities, and

   Providing for accountability and transparency in the methods 
        used to track and quantify benefits from natural climate 
        solutions.

    To organize our recommendations and ensure that our approach to 
farm- and forest-based climate solutions is comprehensive, we also 
identified six distinct policy objectives, or ``themes'':

  1.  Expand existing farm bill programs that deliver climate benefits 
            and offer pathways to new market opportunities for farmers, 
            ranchers, and forest landowners.

  2.  Expand technical assistance for implementing natural climate 
            solutions and address related workforce needs.

  3.  Strengthen the integrity of voluntary carbon markets and increase 
            access to these markets.

  4.  Develop new public and private finance and insurance instruments 
            to help overcome barriers to the broad adoption of natural 
            climate solutions.

  5.  Enhance resilience to wildfire, drought, insects and disease, and 
            invasive species on a landscape scale.

  6.  Foster technology innovation in the agriculture and forestry 
            sectors to make natural climate solutions cheaper and 
            easier to implement and to address measurement and 
            monitoring challenges.

    Our recommendations in each of these areas are summarized below and 
detailed in our full report. Many of these ideas build on legislation 
already passed by the 117th Congress, including the Infrastructure 
Investment and Jobs Act, and on policy debates that are informing the 
development of the 2023 Farm Bill. Together, these 24 recommendations 
reinforce our view that the Federal Government has a tremendous 
opportunity over the next several years to put in place policies and 
programs that will jump-start the rapid scale-up of farm- and forest-
based carbon solutions. Given growing bipartisan support for such 
solutions--not only as another tool for achieving climate goals, but as 
a means for spurring investment in rural communities and in the long-
term resilience and productivity of America's farms, rangelands, and 
forests--we are confident that progress is not only possible, but very 
much within reach.
Theme 1: Expand existing conservation programs


                          Increase funding for key USDA conservation 
                        programs.
                        
                        
                          Set benchmarks and goals for tracking the 
                        adoption of climate-friendly practices and 
                        quantifying their benefits.
                        
                        
                          Issue guidance on how existing USDA programs 
                        can assist landowners who are interested in 
                        accessing carbon markets.
                        
                        
                          Streamline the process of setting new 
                        standards for conservation practices.
                        
                        
                          Expand USDA's measurement networks to better 
                        integrate climate-related data.
Theme 2: Address technical support and workforce needs


                          Recruit private-sector partners to work with 
                        USDA and Extension offices to provide training 
                        and information on climate-smart practices.
                        
                        
                          Set goals and benchmarks for helping 
                        historically underrepresented landowners 
                        implement natural climate solutions.
                        
                        
                          Expand technical assistance on climate issues 
                        and opportunities to socially disadvantaged and 
                        Tribal producers and landowners.
                        
                        
                          Invest in education and workforce 
                        development, including through extension and 
                        scholarship programs.
                        
                        
                          Enhance the collection, sharing, and 
                        interoperability of climate-related data by 
                        USDA and other agencies.
                        
                        
                          Strengthen USDA's technical capacities by 
                        investing in state-of-the-art datasets, models, 
                        and analytical tools.
Theme 3: Strengthen voluntary carbon markets


                          Improve the integrity of voluntary carbon 
                        markets and reduce barriers to entry through 
                        targeted legislation.
                        
                        
                          Use the Commodity Credit Corporation to 
                        support climate-smart practices, leveraging 
                        carbon markets and supply chain initiatives.
                        
                        
                          Support public-private efforts to develop 
                        infrastructure, insurance, and structured 
                        finance products for carbon trading.
Theme 4: Develop new finance and insurance instruments


                          Adopt a tax credit to incentivize 
                        ecologically appropriate agriculture- and 
                        forest-based sequestration.
                        
                        
                          Assess impact of conservation practices on 
                        crop yields and insurance payouts, and create 
                        incentives for reducing climate risk.
                        
                        
                          Develop new strategies for overcoming 
                        barriers related to landownership and 
                        succession.
                        
                        
                          Provide a one-time payment to early adopters 
                        of climate-smart agriculture and forestry 
                        practices.
Theme 5: Enhance carbon storage and climate resilience of farm and 
        forest lands
        
        
                          Modernize and expand public and private seed 
                        collections and tree nurseries to meet 
                        reforestation demand and support scale-up of 
                        natural climate solutions.
                        
                        
                          Implement an all-of-government approach to 
                        increase wildfire resilience.
                        
                        
                          Create a new cross-boundary initiative to 
                        improve the health and carbon sequestration 
                        potential of rangelands.
Theme 6: Foster farm- and forest-based climate innovation


                          Increase funding for USDA research and expand 
                        R&D collaboration across Federal agencies, 
                        universities, and the private-sector.
                        
                        
                          Expedite FDA approval of safe feed additives 
                        that reduce greenhouse gas emissions from 
                        livestock operations.
                        
                        
                          Support emerging markets for innovative wood 
                        products through better integration of USDA 
                        programs, Federal procurement, and manufacturer 
                        incentives.
                        
                        

 
 
 
              BPC Farm & Forest Carbon Solutions Task Force
 
Saxby Chambliss (Co-Chair), Former   Leonard Jordan, LJ Conservation
 Senator, Georgia                     Matters, LLC, CEO; Compatible
Heidi Heitkamp (Co-Chair), Former     Lands Foundation, Board Member;
 Senator, North Dakota                USDA NRCS, Former Acting Chief
Cornelius Blanding, Federation of    A.G. Kawamura, Solutions from the
 Southern Cooperatives, Executive     Land, Founding Chair; Former
 Director                             California Secretary of
                                      Agriculture
Jad Daley, American Forests,         Tom Martin/Rita Hite, American
 President & CEO                      Forest Foundation, President & CEO
Callie Eideberg, Environmental        (former and successor)
 Defense Fund, Director of           Ben Mosely, USA Rice, Vice
 Government Relations                 President, Government Affairs
Ara Erickson, Weyerhaeuser, Vice     Collin O'Mara, National Wildlife
 President, Corporate                 Federation, President & CEO
 Sustainability
Whit Fosburgh, Theodore Roosevelt
 Conservation Partnership,
 President & CEO
Dan Glickman, Former U.S. Secretary  Laura Wood Peterson, LWP
 of Agriculture; BPC Senior Fellow    Consulting, President; Ranch
                                      Operator; Indigo Ag, Advisor
Krysta Harden, U.S. Dairy Export     Tom Schultz, Idaho Forest Group,
 Council, President & CEO             Director of Resource & Government
                                      Affairs
Nate Hill, Amazon, Head of Energy    Brian Thalmann, Grower; Minnesota/
 Policy, North America                National Corn Growers Association,
                                      Board Member
Bob Izlar, University of Georgia     Bryan Van Stippen, National Indian
 Center for Forest Business,          Carbon Coalition, Program Director
 Founding Director
 

          Read the report at bipartisanpolicy.org/energy

    The Chairman. Thank you very much, Senator Heitkamp.
    And now, Ms. Raygoza, please begin when you are ready.

 STATEMENT OF SHAKERA RAYGOZA, OWNER, TERRA PRETA FARM; CFAP2 
    TECHNICAL ASSISTANT, NATIONAL YOUNG FARMERS COALITION, 
                          EDINBURG, TX

    Ms. Raygoza. Thank you to the Honorable David Scott and 
Glenn ``G.T.'' Thompson for holding this important hearing. I 
appreciate the opportunity to share my story.
    My name is Shakera Raygoza, and I, alongside my husband, am 
the owner and operator of Terra Preta Farm in Edinburg, Texas. 
We grow certified organic vegetables with 15 acres in wholesale 
production, and 1 acre in production for local farmers' markets 
and community-supported agriculture. I work as the farm sales 
manager and with the National Young Farmers Coalition, 
providing technical assistance to young Black, indigenous, and 
people of color farmers applying for USDA Farm Service Agency 
loans. Because I have benefitted so much from USDA programs, I 
want to help other farmers to gain access to those programs.
    When we first started farming in 2009, my husband had a 
bachelor's degree in agriculture, and I was a certified nurse 
with no farming experience. We began farming by borrowing a 
small tract of land from our neighbor. Growing our farm 
business was challenging because we had to relocate 3 years in 
a row due to our leases being terminated because the owners 
were expanding into the land for development, or they were 
offered more by other growers.
    Farm Service Agency ownership loans helped us purchase our 
own land, and we directly benefitted from FSA operating 
microloans. We have also benefitted from the Natural Resources 
Conservation Service Environmental Quality Incentives Program, 
funding for high tunnels, cover cropping, land leveling, and 
irrigation systems.
    Throughout our time farming, I have noticed how climate 
change has affected and changed our work. Living in the Rio 
Grande Valley, hurricanes and heavy flooding have hit our area 
three times in a row from 2018 to 2020. The most recent, 
Hurricane Hannah, hit in July of 2020, dumping more than 9" of 
rain in the area in just 2 days. The floods damaged our cover 
crops, causing $4,000 in losses. And even though we usually 
have mild winters, we have had many extreme cold days recently. 
Last winter during Winter Storm Uri, we experienced a hard 
freeze and lost \1/3\ of our crops. These losses totaled 
$60,000, more than \1/2\ of our annual revenue. I am currently 
still trying to navigate the Non-Insured Crop Disaster 
Assistance Program to get help for those losses. Fortunately--
or unfortunately, communication between the local office has 
been painfully slow, and the USDA staff are not sure how to 
help a small-scale diversified farmer like myself.
    To support the future of agriculture, USDA must improve 
staff training and increase the number of USDA staff 
specifically dedicated to small and beginning farmers and 
outreach. Crop insurance is too expensive, and disaster relief 
programs are not accessible to small and diversified farms.
    We want to do more to mitigate climate change on our farm, 
including on-farm renewable energy, drip tape for water 
conservation, and biochar for sequestering carbon. We would 
benefit from programs that will provide funding up-front for 
conservation, without placing the burden of financing onto the 
farmers who may not have access to credit.
    When I have applied for the programs with USDA, I found the 
process is long and requires a lot of paperwork. We almost lost 
out on purchasing our farmland due to a lengthy process. Loans 
are designed for commodity farmers who grow one or two crops. 
Figuring out how to convert our production of over 40 crops to 
yields per acre and present proof of our market prices requires 
a lot of time that we just don't have as owner-operators with 
off-farm jobs.
    Many farmers I talk with about CFAP2 appreciated the 
streamlined process and broad range of eligible crops. Young 
farmers would benefit from streamlined applications for 
diversified farms.
    When I first started farming, there were many local 
producers who sold at my farmers' market. Ten years later, only 
one or two of those original farmers are still farming. Young 
farmers are the future of agriculture, but we need the support 
from USDA in order to continue sustainably growing food for our 
communities while dealing with the changing climate. We as 
farmers have the unique ability to sequester carbon in the soil 
by using climate-smart methods but lack the capital, access to 
credit, and land to expand our climate action. USDA must focus 
on expanding programs and supporting farmers like me who build 
our businesses for resilience and are already invested in this 
work. Investments like this are critical for the future of our 
rural communities, feeding our families, and helping the next 
generation of farmers to be at the forefront of climate action.
    Thank you.
    [The prepared statement of Ms. Raygoza follows:]

 Prepared Statement of Shakera Raygoza, Owner, Terra Preta Farm; CFAP2 
  Technical Assistant, National Young Farmers Coalition, Edinburg, TX
    Thank you to the Honorable David Scott and Glenn `GT' Thompson for 
holding this important hearing. I appreciate the opportunity to share 
my story. My name is Shakera Raygoza, and I, alongside my husband, am 
the owner-operator of Terra Preta Farm in Edinburg, Texas. I am also 
the local market manager and the wholesale sales manager on the farm, 
overseeing processing and packing, bookkeeping, and marketing. We are 
currently farming on 15 acres in wholesale production, with 1 acre in 
small-scale production for local farmers markets, and a community 
supported agriculture (CSA) program. I work with the National Young 
Farmers Coalition (Young Farmers) providing technical assistance to 
young Black, Indigenous, and People of Color (BIPOC) farmers applying 
for USDA Farm Service Agency loans and previously the Coronavirus Food 
Assistance Program 2 (CFAP2). Because I have benefited so much from 
USDA programs, I want to help other farmers gain access to those 
programs.
    When we first started farming in 2009, my husband had a bachelor's 
degree in agriculture and I was a registered nurse with no farming 
experience. We began farming by borrowing a small tract of land from 
our neighbor to grow food for our young family, and then started 
selling the surplus produce at local farmers markets. It was a 
challenge to grow our farm business because we had to relocate 3 years 
in a row due to our leases being terminated because the owners were 
expanding into the land for development or they were being offered more 
from other growers to rent. In each location, we would invest in the 
soil by adding compost and organic matter to the soil but we were 
hesitant to implement more climate-smart practices without secure land 
access. By 2012, we had a steady stream of customers at the farmers 
markets and 15 CSA members, so we decided to purchase our own land with 
an FSA Farm Ownership Loan. For the past 8 years we have been growing 
Certified Organic vegetables for our local community through farmers 
markets and a CSA veggie box program, and for the past 3 years we have 
added wholesale accounts in the regional wholesale market, including a 
major grocery chain in Texas. We've directly benefited from FSA Farm 
Ownership Loans and Farm Operating Microloans, and the Natural 
Resources Conservation Service (NRCS) Environmental Quality Incentives 
Program (EQIP) funding for high tunnels, cover cropping, land leveling, 
and irrigation systems with ponds. We also were recipients of the State 
of Texas Young Farmer Grants and CFAP1 and CFAP2.
    Throughout our time farming, I've noticed how climate change has 
affected and changed our work. Living in the Rio Grande Valley, we've 
been hit hard by hurricanes that are becoming stronger and more 
frequent in the past 5 years. Hurricanes and heavy flooding have hit 
our area 3 years in a row from 2018 to 2020. The most recent hurricane, 
Hurricane Hanna, hit in July 2020, dumping more than 9" of rain in the 
area in just 2 days. The floods damaged our cover crops, causing $4,000 
in losses. And even though we usually have very mild winters, we've had 
a lot of freezes recently, which are very uncommon in this area. Last 
winter, during Winter Storm Uri--the record-breaking storm that left 
millions without power, dozens dead, and caused $24 billion in overall 
damages--we experienced a hard freeze, resulting in us losing \1/3\ of 
our crops. These losses totaled $60,000--more than \1/2\ of our annual 
revenue. I'm currently still trying to navigate the Noninsured Crop 
Disaster Assistance Program (NAP) to get help for those losses. 
Unfortunately, communication between the local office has been 
painfully slow and USDA staff and technical assistance providers aren't 
sure how to help a small-scale farmer like myself. Crop insurance is 
not affordable to farmers like me, and disaster relief programs are not 
accessible to small and diversified farms. To support the future of 
agriculture, USDA needs to change the way it serves young farmers. We 
would have benefited from having access to outreach programs, easily 
accessible online resources and tools, and technical assistance to help 
us apply for USDA programs. We also would have benefited from well-
trained staff in county offices who were aware of our needs and could 
have guided us toward programs tailored for our small-scale farm. I 
would like to see more programs that provide up-front funding without 
placing the burden of financing projects onto the farmers who may not 
have access to credit.
    Since winters are also getting warmer and temperatures are 
fluctuating more, we have faced an increasing amount of pest pressure. 
Over the past 2 to 3 years, we are seeing more and more cucumber 
beetles and aphids, which are challenging to manage and cause damage to 
our crops. Climate change is also affecting how our crops grow--as 
temperatures fluctuate, we have been trying to account for those 
changes by buying heat, cold, and drought resistant varieties. We are 
also adding organic matter to our soils to increase moisture retention 
and soil fertility. On the farm, we try to incorporate climate-smart 
agricultural practices and minimize tillage to allow the natural soil 
ecosystem to thrive. Small farmers are already doing many things to 
sequester carbon and preserve natural resources on a limited budget, 
but we need more help. We want to do so much more and increased access 
to cost-share dollars would make it economically feasible for us to 
invest in climate resilience.
    To do my part in fighting climate change, I am interested in on-
farm renewable energy and integrating more sustainable practices into 
my operation. For example, I would like to use a solar powered tractor 
and install wind turbines to harness the strong coastal winds we have 
here to provide energy for my farm. I'm also interested in conserving 
water by collecting rainwater from my farm buildings. We are currently 
using drip irrigation to conserve water, but the rise in prices on drip 
tape is prohibitive. We are also experimenting with biochar to 
sequester more carbon and add biomass to our soils, but the equipment 
needed to produce biochar is expensive and not accessible to small 
farmers. I need support to continue this project and others, like 
building a biodigester to convert food waste to fertilizers and 
renewable biogas. We need more support and increased funding for 
programs like Sustainable Agriculture Research and Education (SARE) 
grants to develop new technologies. SARE provides money for farmer-led 
research and outreach, and is critical for farmers like me who are 
committed to sustainable agriculture.
    In my 10 years of farming, I've been fortunate enough to have 
access to several USDA programs, but I know that this experience is not 
the case for all young, beginning, small, and BIPOC farmers. Because 
I've been working in South Texas for so long, my husband and I have 
developed relationships with our local USDA offices. Despite this, I've 
experienced challenges that make it difficult to use these programs. 
One significant barrier is the reimbursement model for EQIP. We didn't 
have any capital to buy materials and cover labor costs for the 
installation of irrigation pipes and a high tunnel, so we had to take 
out a microloan through FSA to fund the project. EQIP programs have 
contract terms and farmers do not have the time to wait to go through a 
3-4 month loan application process. For our most recent EQIP project we 
had to take out a personal loan from a commercial lender at a higher 
interest rate. We were fortunate to be approved for the loan in time to 
complete the project within the contract period, but I believe that was 
due to having off-farm income, great credit, and farm sales data to 
strengthen our application. The reimbursement model is a major 
challenge for beginning farmers short on capital, unaware of microloan 
programs, and those who have bad credit or no access to traditional 
forms of credit, have student loan debt, and don't have off-farm income 
to fall back on.
    Additionally, when I have applied for programs with USDA, I've 
found that the process is long and requires a lot of paperwork. My 
husband and I were both working off-farm jobs to provide for our 
family, so it took us a long time to gather all the required 
documentation and place it in the required format. Having to explain 
our work using rigid terms and units was also difficult. Figuring out 
how to convert our production of over 40 crops to yields per acre and 
present proof of our market prices to justify our business plan 
required a lot of time that we just don't have. The applications are 
designed for large commodity farmers who grow one or two crops. We were 
on our own for this process and eventually had to send in several 
revisions, which took even more time. We could have benefited from 
technical assistance and staff more knowledgeable about small-scale, 
diversified farming, as well as streamlined applications for 
diversified farms.
    Through my work with the National Young Farmers Coalition, I have 
the privilege of providing young BIPOC farmers technical assistance 
with accessing USDA programs like CFAP2 and FSA loan programs. I have 
found that many were unaware of the programs and very appreciative of 
the outreach. Young farmers that requested technical assistance didn't 
feel comfortable working with their local offices because of 
discrim[in]ation, didn't understand how to complete the forms or where 
to access online resources, and had language barriers. Many had 
misinformation and assumed that they weren't eligible because they were 
a small diversified farm. Others were interested in applying, but 
didn't have time to complete the forms and would have prefer[r]ed a 
streamlined online application process. I was able to provide one-on-
one bilingual support for the farmers, making connections between 
farmers and local offices.
    When I first started farming, there were a lot of local producers 
who sold at my farmers market. Ten years later, only one or two of 
those original farmers are still farming. Young farmers are the future 
of agriculture, but we need the support from USDA in order to continue 
sustainably growing food for our communities while dealing with a 
changing climate. Despite being directly affected by climate change, we 
as farmers have the unique ability to sequester carbon in the soil by 
using climate-smart methods like planting cover crops, using no- and 
reduced-tilling, and managed grazing. We often don't have the startup 
capital needed to get off the ground quickly, often don't have access 
to traditional forms of credit, and are not eligible for many of the 
programs that are out there and tailored to larger farms, like crop 
insurance and disaster relief. Young farmers and farmers of color are 
already more likely to use climate-smart agricultural practices, and 
USDA must focus on expanding programs and supporting farmers who are 
already doing this work. By incorporating these methods into our 
farming practices, we can continue providing healthy food to our local 
communities, but we can only do this with secure access to land. I 
would like to see USDA and Congress focus on land security for young 
and BIPOC farmers.
    Passage of bills like the Agricultural Resilience Act (ARA) will be 
instrumental in supporting young farmers on the frontlines of the 
climate crisis. The policy changes outlined in the ARA should be used 
to reimagine conservation in the farm bill and how these programs can 
support young and BIPOC farmers to act on climate.
    Thank you for listening and holding this important hearing. I 
appreciate the opportunity to share my story and the story of so many 
farmers like myself.

    The Chairman. Thank you very much, Ms. Raygoza. Thank you.
    And now, Dr. Humiston, please begin when you are ready.

     STATEMENT OF GLENDA HUMISTON, Ph.D., VICE PRESIDENT, 
 AGRICULTURE AND NATURAL RESOURCES, UNIVERSITY OF CALIFORNIA; 
               DIRECTOR, AGRICULTURAL EXPERIMENT 
          STATION AND COOPERATIVE EXTENSION SERVICE, 
                          OAKLAND, CA

    Dr. Humiston. Chairman Scott, Ranking Member Thompson, and 
Members of the Committee, thank you for the opportunity to 
speak on this subject and the next farm bill.
    For more than a century, California's $50 billion 
agricultural sector has depended on the land-grant university 
for new technologies and research breakthroughs needed to stay 
competitive and be responsible stewards of the land. Beyond on-
farm production, California's working landscapes include 
forests, wetlands, mines, and water bodies that are valuable 
sources of ecosystem services. Those services provide 
biological necessities such as clean water, nutritious food, 
and livable climate, as well as economic benefits such as jobs 
and revenue.
    Extreme climate events are changing California's 
ecosystems. Fires, floods, drought, and more invasive pests are 
already affecting agriculture. For example, unseasonably warm 
weather now causes many fruit and nut trees to bloom before the 
last frost, causing great economic losses. Changing climate 
decreases water supplies, increases wildfires, and threatens 
agricultural productivity.
    To combat this, we must enable working landscapes to adapt 
and become a solution to climate change. According to the 
National Academy of Sciences, U.S. soils and forests have the 
potential to sequester 500 million metric tons of carbon 
dioxide annually. Markets for carbon credits are one solution 
to move us there.
    Such climate-smart practices require we fully utilize USDA 
programs and leverage collaborations between government, 
academia, and the private-sector. We need voluntary market- and 
incentive-based programs, and a focus on science-based 
outcomes. New science and technologies will allow farmers to 
remain economically viable while generating co-benefits, such 
as improved water holding capacity of soils, pollinator 
habitat, and carbon sequestration. We are moving to expand 
relations between the life sciences and engineering and other 
technology specialists to develop those complex solutions to 
these challenges. Some examples are placing solar panels over 
irrigation canals to reduce evaporation of precious irrigation 
water, while also producing electricity--something Congressman 
Costa has long supported--implementing healthy soil practices 
to improve groundwater recharge, and dairy digesters to create 
biofuels rather than harmful greenhouse gases.
    Other opportunities exist in forest health efforts that 
convert excessive fuel loads, biomass, into valuable 
bioproducts. Expanding the capacity to manufacture advanced 
wood products can support economic development in rural 
communities. Examples of this work include converting that 
biomass into hydrogen and liquid biofuels to reduce diesel in 
trucks.
    In California, we are excited to work with the Governor and 
the state legislature to secure $185 million investment in UC 
to expand climate-focused research innovation and workforce 
development. This funding will establish regional workforce 
hubs to provide on-the-job training opportunities for students 
and leverage career certification programs for college prep and 
non-degree seeking individuals.
    USDA's Climate Hub should be expanded to engage in more 
stakeholders, as should the Forest Service's work on wood 
products and ability to enter into long-term stewardship 
agreements with state and local partners. Rural Development, 
the Agricultural Marketing Service, and many other USDA 
programs help build climate solutions through more efficient 
regional food systems, workforce training, certification of 
BioPreferred products, and risk management.
    To help rural economies better adapt to climate change, we 
need senior USDA leadership coordinating climate issues across 
programs and pushing interagency cooperation. USDA must also 
collaborate with Federal entities to support improvements to 
broadband access, and with programs like the Economic 
Development Administration, to ensure that access to capital, 
effective economic development, and infrastructure investments 
are effectively delivered. Such distribution of program dollars 
also requires that the current definition of rural be updated. 
Far too many communities are improperly denied USDA resources 
due to the antiquated definitions of rural versus metropolitan.
    Federal capacity funds are leveraged many-fold by 
competitive and private industry partnerships. Competitive 
grants stimulate new ideas and speed up some research; however, 
they can also--shift toward short-term project research. It can 
take several years to develop a new crop variety, longer for 
tree crops, and even longer to fine-tune new technologies.
    When UC Davis designed a machine to automate harvesting 
tomatoes in the 1960s, it required agronomists to breed a less 
delicate variety of tomato that could be machine harvested. 
There is a critical need to invest in a well-balanced mix of 
capacity and competitive funds for research, as well as 
significant investments in ag research facilities. Such 
investments will help ensure farmers and ranchers have access 
to the sound science, technologies, and information they need 
to build climate resilience and mitigate environmental impacts.
    I thank you for the opportunity and look forward to 
questions.
    [The prepared statement of Dr. Humiston follows:]

     Prepared Statement of Glenda Humiston, Ph.D., Vice President, 
Agriculture and Natural Resources, University of California; Director, 
  Agricultural Experiment Station and Cooperative Extension Service, 
                              Oakland, CA
    Good morning, Chairman Scott, Ranking Member Thompson, and Members 
of the Committee, my name is Glenda Humiston, and I serve as the Vice 
President of Agriculture and Natural Resources (ANR) for the University 
of California (UC) system. I am honored to have this opportunity to 
discuss the importance of agricultural research, and other USDA 
programs, as you begin work on the next farm bill.
    With UC ANR serving as a vital partner, California continues to be 
the nation's top agricultural state. For more than a century, 
California's $50 billion agricultural sector has depended on UC ANR, in 
partnership with our UC campuses, for the stream of new technologies 
and research breakthroughs needed to stay competitive and be 
responsible stewards of the land. We are proud to be part of the Land-
Grant partnership that was developed between states and the Federal 
Government with the 1862 Morrill Act, 1887 Hatch Act and the 1914 
Smith-Lever Act. That enterprise has, for over 130 years, advanced 
scientific knowledge in all aspects of food production, and improved 
production capacity, profitability, and safety of the nation's food 
system.
    With over 71,000 farms producing 400 different commodities, 
California is an agricultural behemoth and the sole provider of many 
high-demand farm products while also exporting roughly \1/3\ of its 
agricultural production each year. Beyond on-farm production, 
California's working landscapes include farmland, ranches, forests, 
wetlands, mines, water bodies and other natural resource lands, both 
private and public, that are vital sources of ecosystem services. These 
services are ways that the natural world provides biological 
necessities, such as clean water, nutritious food, and a livable 
climate, as well as indirect economic benefits, such as jobs and 
revenue created along food value chains. More broadly, they encompass 
intangible goods that contribute to human well-being, such as 
recreation, aesthetic inspiration, and cultural connection.
    Ensuring that those ecosystem services are functioning and remain 
available to utilize is an ever-growing challenge. There can be no 
doubt that extreme climate events are changing California's landscape--
fires, floods, drought, more invasive pests are already affecting 
agriculture. For example, unseasonably warm weather now causes many 
fruit and nut trees to bloom before the last frost, causing great 
economic losses. In the coming decades, the changing climate is likely 
to further decrease the supply of water, increase the risk of 
wildfires, and threaten coastal development and ecosystems.
    To combat such future perils, we must harness the ability of our 
agricultural and other working landscapes to adapt, to mitigate and 
where possible, to become a solution to climate change. According to 
the National Academy of Sciences, U.S. soils and forests have the 
potential to sequester about 500 million metric tons of carbon dioxide 
annually. Emerging markets for carbon credits and government incentive 
programs could generate tens of billions of dollars per year in new 
investment for working farm and forest lands within the next several 
years.
    Within this framework, USDA programs are critical to our efforts to 
support carbon sequestration, improved water management, healthy soils, 
forest restoration, hazardous fuels management, and wood products 
innovation, among other provisions that support natural climate 
solutions. USDA's new Partnerships for Climate-Smart Commodities is a 
great example of how targeted funding for pilot projects can create 
market opportunities for commodities produced using climate-smart 
practices.
    As we pursue those climate-smart practices, it is critical that we 
make full use of existing programs and leverage collaborations among 
them wherever possible. Supporting partnerships between government 
agencies with academia and the private-sector will enable production of 
multiple benefits from various actions. As part of this we need to 
utilize voluntary, market and incentive-based programs to the greatest 
extent possible and maintain a focus on science-based outcomes. In many 
situations, transformative innovation is needed--moving beyond just 
improving existing methods and processes to totally re-thinking how our 
systems are designed to deliver policy and programs.
    UC ANR supports California farmers and ranchers to be resilient to 
extreme weather events with data-driven tools, methods, and 
technologies. For example, we are developing drought, heat, and pest-
tolerant crop varieties that allow farmers to remain economically 
viable while also being resilient to extreme weather. Finding new crops 
suitable for California soils and ecosystems not only improves the 
productivity of the farm but can have co-benefits such as improving 
water-holding capacity of the soil, increasing native pollinator 
habitat, and boosting local economies by increasing value-added 
products.
    We are also pushing our research system to expand collaborative 
efforts between experts in soil sciences, plant pathology, 
biochemistry, and other sciences with technology experts in robotics, 
sensors, artificial intelligence, materials, supply chain logistics, 
and energy systems to solve today's complex problems in agriculture. 
Much like the biomedical revolution, it is the integration of multiple 
disciplines into a single project that can lead to transformative 
innovation that improves productivity, food safety, and ecosystem 
services while also giving rise to new businesses. Great examples of 
such transdisciplinary research and development include:

   An initiative to place solar panels over irrigation canals 
        to reduce evaporation of precious irrigation water supplies for 
        farmers while also producing electricity.

   Implementing healthy soil practices, like cover crops and 
        no-till, to enhance capture of rain and improve groundwater 
        recharge.

   Programs for farmers to install dairy digesters to convert 
        potentially harmful greenhouse gases into valuable biofuels.

    To develop the science, new technologies and better farming 
practices that are desperately needed, increased funding for 
agriculture and food-related research and extension is necessary as are 
new investment in agricultural research facilities. Public funding for 
agricultural research in the U.S. has declined in real dollars over the 
past few decades while deferred maintenance of research facilities 
greatly hampers scientists' work. Greater investments will help ensure 
farmers and ranchers have access to the scientifically rigorous tools 
and information they need to build climate resilience, mitigate 
environmental impacts, and increase the productivity of their land.
    Other exciting opportunities can be found in forest health efforts 
that convert excessive fuel loads--biomass--into valuable bioproducts 
while reducing risk from catastrophic wildfires. California's wildfire 
crisis continued its destructive march in 2020, each year worse than 
the one before. Working closely with regional economic development 
organizations and our California Economic Summit partners, UC ANR is a 
key partner in developing and implementing recommendations to improve 
forest health, reduce wildfire risk, incentivize innovation in new and 
innovative wood products industries and build capacity for 
manufacturing to enhance forest and environmental health and resilient 
rural communities. Examples of this work include:

   Organizing controlled burn associations with local 
        communities and other forest treatment practices such as a 
        software program, Match.Graze, that improves use of grazing.

   Partnering with the Inland Empire Economic Partnership and 
        the southern California commercial ports to convert biomass 
        into Hydrogen and other liquid biofuels to replace diesel in 
        trucks--the largest source of air pollution in that region.

   Educating homeowners on landscaping, defensible space, and 
        fire-wise plants to improve home-hardening, reduce risk from 
        fire and conserve water.

   UC Engineering research on materials science is developing 
        new advanced wood products and data to demonstrate the multiple 
        values of construction with such products.

   Teaming up with community colleges to provide workforce 
        training in forest professions.

    The U.S. needs robust funding for wildfire prevention, research, 
recovery, and extension. Cooperative Extension academics are lead 
experts in forestry and wildfire research and they provide critical 
resources to inform strategic fuels management, enhance community 
wildfire planning, and build community fire adaptation and resiliency. 
USDA's Climate Hubs should be expanded so that they can regularly 
engage stakeholders and prioritize vital research amongst more 
partners. The U.S. Forest Service's work on bioproducts is extremely 
valuable as is their willingness to enter into long-term stewardship 
agreements with state and local partners.
    In California, we are very excited to be working with the Governor 
and the state legislature to secure a $185 million investment in UC to 
build new capacity in climate-focused research, innovation, and 
workforce development. For example, with this funding we would 
establish Regional Workforce Hubs that will provide on-the-job training 
opportunities for university and community college students as well as 
well as leverage the professional learning and career certification 
infrastructure of the UC Extension programs to offer a portfolio of 
training opportunities, tools, and resources for college-prep and non-
degree seeking individuals.
    Just as these programs allow us to implement climate smart 
agriculture and healthy forests' initiatives, they also support 
regional economic development and job creation. Rural Development, the 
Agricultural Marketing Service and many other USDA programs are 
important partners as we build climate solutions through more efficient 
regional food systems, improved supply chains, workforce training, 
manufacturing of BioPreferred products, and food security initiatives.
    If we are to promote resilience and help rural economies better 
adapt to climate change, we need to harness all programs throughout the 
U.S. Department of Agriculture. That means having senior USDA 
leadership coordinating climate issues across the entire agency and 
robustly serving as USDA's climate representative at all interagency 
climate-related meetings. For example, USDA must collaborate with 
Federal entities like the Federal Communications Commission to support 
improvements to broadband access, which is critical for climate-smart 
precision technologies and rural economies. Similarly, just as USDA has 
partnered with the National Science Foundation on research initiatives 
and jointly funding competitive grants, it needs to build closer 
partnerships with programs like Commerce's Economic Development Agency 
and Treasury's Community Financial Development Institutions to ensure 
that access to capital, effective economic development planning and 
infrastructure investments are targeted appropriately and delivered 
well.
    One important way to help ensure wise distribution of program 
dollars to give the current definition of ``rural'' serious examination 
and re-engineering; as it stands now, far too many communities are 
improperly denied USDA resources due to the antiquated definitions of 
rural and metropolitan. Strongly encouraging more cross-agency 
proposals throughout USDA and enhanced support for public-private 
partnerships would remove barriers and hurdles for industry and 
communities alike.
    The current mix of Federal and state capacity funds is generally 
leveraged many-fold by Federal competitive grants, grants from private 
industry, and other types of unrestricted gifts and awards to faculty 
conducting research at the nation's land-grant universities. 
Competitive funding processes can elicit new ideas and speed up certain 
research projects; however, they also encourage a shift from 
programmatic research towards shorter-term project research. Failure to 
invest in a well-balanced mix of capacity and competitive funds for 
food and agriculture research could have very negative consequences for 
decades to come--consequences that would take significant time to 
reverse.
    It takes at least 7 to 15 years of research and development to 
develop a new crop variety--longer for trees/vines. Deploying and/or 
adapting new agricultural technologies can be even longer. For example, 
when UC Davis engineer, Coby Lorenzen, designed a machine to automate 
the harvest of tomatoes in the 1960's, it also required agronomist, 
Jack Hanna, to develop a less-delicate variety of tomato that ripened 
uniformly and could be easily plucked from the plant, essential 
qualities that made machine harvesting feasible. Federal funding that 
recognizes these realities as well as improvements in technology 
transfer and support for commercialization is vital.
    Faculty and staff at land-grant universities across the nation 
recognize that their work takes place on behalf of a greater good, a 
broader goal, and a common vision that is much bigger than their 
individual achievements. Members of this House Committee on Agriculture 
can be confident that every dollar of Federal investment authorized by 
the farm bill and expended at land-grant universities is guaranteed to 
be leveraged further, and to spawn innovation and discovery that will 
be translated into solutions to improve the lives of U.S. citizens. I 
thank you for this opportunity to provide testimony.

    The Chairman. Thank you, Dr. Humiston.
    And now, Dr. Outlaw, you may begin.

         STATEMENT OF JOE L. OUTLAW, Ph.D., PROFESSOR, 
             EXTENSION ECONOMIST, AND CO-DIRECTOR, 
AGRICULTURAL AND FOOD POLICY CENTER, DEPARTMENT OF AGRICULTURAL 
      ECONOMICS, TEXAS A&M UNIVERSITY, COLLEGE STATION, TX

    Dr. Outlaw. Chairman Scott, Ranking Member Thompson, and 
Members of the Committee, thank you for the opportunity to 
testify on behalf of the Agriculture and Food Policy Center at 
Texas A&M University as you focus on the opportunities that 
producers have to positively impact climate change.
    As many of you know, the primary focus of AFPC has been to 
analyze the likely consequences of policy changes at the farm 
level with our one-of-a-kind dataset of information that we 
collect from commercial farmers and ranchers located across the 
United States. Working closely with the commercial producers 
has provided our group with a unique perspective on 
agricultural policy. While we normally provide the results of 
policy analysis to you or your staff without recommendation, 
today I am carrying the message from the 675 producers we work 
with across the United States.
    The set of conservation programs in Title II have a strong 
track record of incentivizing producers to retire some of the 
country's most fragile land, or implementing environmentally 
beneficial projects or practices on working lands. The 
producers we work with have very strong positive views about 
these programs, with the only drawbacks being they have more 
projects they are willing to do than there is money to do them.
    In preparation for this testimony, we emailed our 
representative farm members the following points that I planned 
on making, and asked them to let us know if they agreed or 
disagreed with each of the five points. They agreed.
    Number one, having a strong safety net from Title I 
programs ARC, PLC, and the marketing loan in Title XI crop 
insurance remains critical even with new carbon market 
opportunities. In the words of a wheat farm panel member from 
Washington State, ``It is the peace of mind we get from knowing 
the bottom can't completely fall out from under us that keeps 
us going.'' Most felt that crop insurance was going to be the 
key safety net program this year with high prices and 
reiterated do no harm. This leads me to the point that might 
not be shared by others on this panel. In my opinion, tying 
climate-smart practices to the crop insurance program should 
not be done, not to premiums, not to participation, nor to 
indemnities. The farmers we work with are worried about the 
long run implications for crop insurance of tying climate-smart 
provisions to the policy, and that it will lead to regional 
winners and losers depending upon practices that are available.
    Number two, USDA conservation programs CRP, CSP, and EQIP 
that have incentivized a broad array of conservation practices 
have worked well in the past. They have just been underfunded. 
These programs have a strong history of helping producers 
undertake practices that scientific studies have found provide 
proven environmental benefits. Producers much prefer this type 
of approach to the current carbon program situation.
    Number three, Congress should strongly consider providing 
financial incentives to early adopters who are not eligible to 
participate in current carbon programs due to the additionality 
requirement. If it is good to sequester carbon, it should also 
be good to keep carbon sequestered. Many of the producers who 
responded to my request had indicated that they are disgusted 
with the system that only rewards late adopters. I believe that 
the government and this Committee has a role in ensuring that 
producers with carbon already stored are incentivized to keep 
the carbon sequestered. Potential programs should avoid the 
incentive to reverse production systems so that carbon already 
stored is released in order to capture program benefits.
    Number four, all producers, regardless of size, region, or 
crops planted should have opportunities in any new USDA climate 
programs. This statement appears fairly benign, but let me 
assure you it is not. If all producers in the U.S. do not have 
some USDA NRCS identified practice they can undertake in the 
name of sequestering carbon, then there will be regional 
winners and losers as carbon programs are created.
    Number five, Congress should consider providing USDA the 
authority to safeguard producers from being taken advantage of 
in current carbon markets dealing with private entities. For 
example, signing a carbon contract with at least one current 
company would require a producer to forego commodity and 
conservation program benefits on that land.
    The agriculture industry is in need of guidelines that take 
the mystery out of the current carbon market opportunities. If 
private carbon markets are ever going to matter, they have to 
be more transparent than they are currently. The current 
benefits are weighted too low to lock into a multi-year 
agreement with a lack of structure and transparency in this 
market.
    Mr. Chairman, that completes my statement.
    [The prepared statement of Dr. Outlaw follows:]

   Prepared Statement of Joe L. Outlaw, Ph.D., Professor, Extension 
   Economist, and Co-Director, Agricultural and Food Policy Center, 
  Department of Agricultural Economics, Texas A&M University, College 
                              Station, TX
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the opportunity to testify on behalf of the 
Agricultural and Food Policy Center at Texas A&M University as you 
focus on the opportunities that producers have to positively impact 
climate change. As many of you know, the primary focus of AFPC has been 
to analyze the likely consequences of policy changes at the farm level 
with our one-of-a-kind dataset of information that we collect from 
commercial farmers and ranchers located across the United States.
    Our Center was formed at Texas A&M University more than 30 years 
ago at the request of Congressman Charlie Stenholm to provide Congress 
with objective research regarding the financial health of agricultural 
operations across the United States. Since that time, we have worked 
with the Agricultural Committees in both the U.S. Senate and House of 
Representatives, providing Members and Committee staff objective 
research regarding the potential farm-level effects of agricultural 
policy changes.
    Working closely with commercial producers has provided our group 
with a unique perspective on agricultural policy. While we normally 
provide the results of policy analyses to you or your staff without 
recommendation, today I am carrying the message from the nearly 675 
producers we work with across the United States.
    In 1983, we began collecting information from panels of four to six 
farmers or ranchers that make up what we call representative farms, 
located in the primary production regions of the United States for most 
of the major agricultural commodities (feedgrain, oilseed, wheat, 
cotton, rice, cow-calf and dairy). Often, two farms are developed in 
each region using separate panels of producers: one is representative 
of moderate-size, full-time farm operations, and the second panel 
usually represents farms two to three times larger.
    Currently we maintain the information to describe and simulate 94 
representative crop and livestock operations in 29 states. We have 
several panels that continue to have the original farmer members we 
started with back in 1983. We update the data to describe each 
representative farm relying on a face-to-face meeting with the panels 
every 2 years. We partner with the Food & Agricultural Policy Research 
Institute (FAPRI) at the University of Missouri who provides projected 
prices, policy variables, and input inflation rates. The producer 
panels are provided pro forma financial statements for their 
representative farm and are asked to verify the accuracy of our 
simulated results for the past year and the reasonableness of a 6 year 
projection. Each panel must approve the model's ability to reasonably 
reflect the economic activity on their representative farm prior to 
using the farm for policy analysis.
    The set of conservation programs in Title II have a strong track 
record of incentivizing producers to retire some of this country's most 
fragile lands through the conservation reserve program (CRP) and the 
agricultural conservation easement program (ACEP) or implement 
environmentally beneficial projects or practices on working lands 
through the conservation stewardship program (CSP), the environmental 
quality incentives program (EQIP) and the regional conservation 
partnership program (RCPP). The producers we work with have very 
strong, positive views about these programs with the only drawbacks 
being they have more projects they are willing do to than there is 
money to do them, and they question how priority areas are determined 
regionally. For example, in FY 2019, 41,471 EQIP applications were 
funded of the 149,574 received or only 27.7%. Of the roughly 108,000 
remaining applications, 46% were determined valid, but unfunded.
    USDA is already using existing programs to incentivize climate-
smart practices through, for example:

   Targeted ``Climate-Smart Agriculture and Forestry EQIP'' in 
        select sates.

   Providing $300 million in RCPP funding for 85 projects 
        focused on climate-smart agriculture.

   Expanding CRP enrollment by 4 million acres by raising 
        rental rates and expanding the number of voluntary incentivized 
        environmental practices allowed. NRCS is also establishing a 
        ``climate-smart practice incentive'' and pays for the 
        establishment of trees and permanent grasses, developing 
        wildlife habitat, and wetland restoration.

In addition, the 2018 Farm Bill established EQIP Incentive Contracts 
which blend EQIP and CSP to provide financial assistance to producers 
for adopting conservation activities. It was first available in FY 2021 
in four pilot states and is now available nationwide. Contracts are for 
5 to 10 years in length with a $200,000 payment limit over the life of 
the 2018 Farm Bill (expires 2023).
    In preparation for the testimony today, we emailed our 
representative farm members the following points that I planned on 
making and asked them to let us know if they agreed or disagreed with 
each of the five points. They were also asked if there was anything 
that they thought I was missing; I will point out the areas that were 
suggested below. The panel members were emailed Saturday afternoon with 
the request to reply by midday Monday. At the time of submitting this 
written statement, we had received 105 responses.

  1.  Having a strong safety net from Title I programs (ARC/PLC and the 
            marketing loan) and Title XI (crop insurance) remains 
            critical even with new carbon market opportunities. They 
            unanimously agreed with this statement in spite of the fact 
            they expect very little benefit from Title I programs this 
            year. In the words of a wheat farm panel member from 
            Washington State . . . ``it's the peace of mind we get from 
            knowing the bottom can't completely fall out from under us 
            that keeps us going.'' Most felt that crop insurance was 
            going to be the key safety net program this year with high 
            prices and several reiterated ``do no harm.'' This leads me 
            to the point that might not be shared by others on this 
            panel: in my opinion, tying climate-smart practices to the 
            crop insurance program should not be done--not to premiums, 
            not to participation, nor to indemnities. The farmers we 
            work with are worried about (1) the long-run implications 
            for crop insurance of tying climate-smart provisions to the 
            policy and/or (2) that it will lead to regional winners and 
            losers, depending upon practices that are available.

  2.  USDA conservation programs (CRP, CSP and EQIP) that have 
            incentivized a broad array of conservation practices have 
            worked well in the past. They have just been under-funded. 
            These programs have a strong history of helping producers 
            undertake practices that scientific studies have found 
            provide proven environmental benefits. Producers much 
            prefer this type of approach to the current carbon program 
            situation where the significant record keeping 
            requirements, additionality requirements, uncertain soil 
            tests, and very low financial benefits have the majority of 
            our representative farm panel members not interested in 
            participating.

  3.  Congress should strongly consider providing financial incentives 
            to early adopters who are not eligible to participate in 
            current carbon programs due to the additionality 
            requirement. If it is good to sequester carbon it should 
            also be good to keep carbon sequestered. Many of the 
            producers who responded to my request indicated that they 
            are disgusted with a system that only rewards late 
            adopters. In their words ``they chose to no-till or 
            implement cover crops for economic and environmental 
            reasons many years ago, but a carbon market should reflect 
            the value of both stored and in the process of being stored 
            carbon.'' I can understand in the current carbon market 
            that companies are wanting to make a difference by paying 
            to remove carbon from the atmosphere. That is why I believe 
            that the government and this Committee has a role in 
            ensuring producers with carbon already stored are 
            incentivized to keep the carbon sequestered. Potential 
            programs should avoid the incentive to reverse production 
            systems so that carbon already stored is released in order 
            to capture program payments. Further, what happens when 
            producers who have adopted no-till practices can't get 
            herbicides (which replace cultivating) to control weeds?

  4.  All producers regardless of size, region, or crops planted should 
            have opportunities in any new USDA climate programs. This 
            statement appears fairly benign, but let me assure you it 
            is not. If all producers in the U.S. do not have some USDA 
            NRCS identified practice they can undertake in the name of 
            sequestering carbon, then there will regional winners and 
            losers--including by both crop and by size--as carbon 
            programs are created. In addition, several of the producers 
            responded that carbon payments should not be payment 
            limited as doing so would likely reduce the effectiveness 
            of the program.

  2.  Congress should consider providing USDA the authority to 
            safeguard producers from being taken advantage of in 
            current carbon markets dealing with private entities. For 
            example, signing a carbon contract with at least one 
            current company would require a producer to forgo commodity 
            and conservation program benefits on that land. The 
            agricultural industry is in need of guidelines that take 
            the mystery out of the current carbon market opportunities. 
            For example, many of the different companies utilize their 
            own proprietary test for soil carbon. Why? Also, why would 
            a company require the field under contract with them to be 
            ineligible for other nonrelated USDA benefits? If private 
            carbon markets are ever going to matter, there has to be 
            more transparency than there is currently. The current 
            benefits are way too low to lock into a multi-year 
            agreement with the lack of structure and transparency in 
            the market. Having said this, several producers we work 
            with have said they would rather not have the government 
            get involved in the carbon market at all and asked me to 
            point out that while they see a problem--it could be made 
            worse.

    Mr. Chairman, that completes my statement.
Figure 1. Representative Farm and Ranch States With Those Responding to 
        Questions 
        
        

    The Chairman. Thank you, Dr. Outlaw, and I thank all of you 
for your excellent testimony.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. You will be recognized for 5 minutes each in order to 
allow us the necessary time to get to as many questions as 
possible. And also, please, please, please keep your 
microphones muted until you are recognized in order to minimize 
background noise.
    And now, I recognize myself for 5 minutes.
    Ms. Raygoza, let me--you gave--you brought out some 
interesting points, and one of our Committee's concerns is that 
we recognize the many challenges that our beginning farmers are 
having. You all are our future, the beginning farmers. You 
mentioned a couple of things I would like you to address. You 
mentioned a problem with up-front money. You also mentioned a 
lengthy process, lack of capital, access to land. You brought a 
lot of very important points out that I would like for you to 
address in order of importance in order that we may make the 
necessary recommendations to address these issues that you and 
our beginning farmers are facing. Could you start with what you 
mean by up-front money?
    Ms. Raygoza?
    Ms. Raygoza. Yes. Thank you for the question. Up-front 
money I am referring to is the money we had to gain up-front to 
implement the EQIP practices. For example, on my farm we were 
approved for land leveling and we had to take out a personal 
loan to cover the cost of implementing that practice. And we 
also had to get financing through a line of credit in order to 
implement some irrigation systems on our farm.
    And so, those are the up-front costs I am speaking of. 
Fortunately for us, we have good credit, but many young 
farmers, they might not have good credit to access those 
financing options. So, I think that is key for making those 
programs accessible to farmers is to have those funds available 
up-front so we don't have to look for other financing options.
    The Chairman. Well, very good, and I am sure all of us will 
be addressing that concern, and certainly the USDA are very 
mindful of your testimony on those points.
    Senator Heitkamp, in your testimony you mentioned the 
importance of expanding technical assistance for natural 
climate solutions and addressing workforce needs. Could you 
address those? How will this benefit some of our historically 
underserved producers, Senator Heitkamp?
    Ms. Heitkamp. I think clearly anyone who knows anything 
about agriculture knows that we have left some farmers behind, 
and a lot of that isn't just about access to capital. It isn't 
just about land challenges that you all have. But it also is 
about access to information and access to the expertise. And it 
seems to me that we need--if we are going to recognize--let's 
take North Dakota. 91 percent of all of North Dakota is engaged 
in production agriculture, and even if you are not recognized 
as an ag state, you still have a lot of land and you still have 
a lot of ag producers. Every state in the Union, including 
states like Massachusetts, have a baseline in agriculture. And 
so, we can't leave anyone behind if we are going to do it.
    But the problem that you have with workforce is we train 
workforce, but do we deploy them appropriately? And, I know 
from my experience--well, take the EQIP Program. During a 
horrible drought in western North Dakota, an early adopter of 
the EQIP Program actually was able to grow grass and did not 
have to buy hay. All of a sudden, his neighbors were looking 
across the fence. What a great moment that would have been to 
deploy a team of people to say, ``Hey, this is how you do the 
EQIP Program,'' and not rely on just that producer to producer 
discussion. And so, I think deploying a workforce, this is 
really true in forestry as well, and we had a lot of 
discussions about workforce in forestry. We know we have a 
workforce crisis. We have a lot of Americans who would love to 
do climate work, would love to work in rural America. We just 
need to get them trained and deployed. And that is not just in 
states, it is not just in Cask County, which is where Fargo is. 
It has to be in every county where we have an ag producer.
    The Chairman. Thank you, Senator.
    And now, Ranking Member, I recognize you for 5 minutes.
    Mr. Thompson. All right, Mr. Chairman, thank you very much, 
and thanks to all the members of the panel for your testimony.
    As you know, USDA has announced its $1 billion Climate-
Smart Commodity Partnership Initiative Pilot. Many of you have 
heard me question the Department's authority to unilaterally 
create this pilot, and I am also concerned about the precedent 
this pilot sets and its impact on farmers and ranchers. It is 
my understanding that the CCC dollars will flow to a wide range 
of partners, and it is very unclear how much the funding will 
make it into the hands of producers, farmers.
    Now, I do not believe that USDA or the taxpayers should be 
subsidizing corporations' arbitrary climate goals, nor do I 
believe we should be funding a climate cottage industry. I do 
believe in the role that agriculture plays and the leading role 
that our farmers, ranchers, and foresters play when it comes to 
the climate.
    That said, more concerning, however, is USDA moving forward 
creating climate-smart commodities when we have not examined 
the impact on farmers and ranchers.
    Dr. Outlaw, first of all, thank you for continuous 
leadership serving the agriculture industry. As an economist, 
do you have thoughts on the Climate-Smart Commodity Initiative 
and its impacts on farmers and ranchers?
    Dr. Outlaw. I certainly do. Obviously, I think that the 
effort is positive, but as someone who worries about markets 
and what is going to happen to producers, when you start 
developing climate-smart commodities, unless you have the 
ability for every area of the country to participate, then you 
are going to segment and you could potentially have segmented 
markets. Those that are done with climate-smart practices 
might--the only reason you do this is to try to get a better 
price for those commodities. So, one of the things--and just 
point blank, if you are going to do this, you have to be very, 
very careful, which I am not sure we have ever been careful 
enough to do this. Because you could absolutely create winners 
and losers in the same commodity, and much less the same region 
or different regions of the United States.
    Mr. Thompson. Yes, I mean, isn't it true that within 
agriculture, you have different climates, soil types, how much 
moisture? I mean, how much nutrition is in the soil? There is a 
lot of variability of American agriculture, what our farmers 
and ranchers face.
    And so, what happens to a cotton farmer who can't grow 
climate-smart cotton? What do you see as the impact on that 
market?
    Dr. Outlaw. Well, if this works and end-users pay more 
because of those practices, then they would be getting lower 
prices for their cotton without the benefit of getting those 
higher prices. It really is differentiating the market, and 
that is the one thing that I think has got to be protected on 
these practices and this effort.
    Mr. Thompson. Yes, and the unilateral use of $1 billion out 
of the CCC by the Secretary and the Department at a time when 
commodity prices--not all of them, but some are at a record 
high, we have commodities that are not there but inflationary 
costs are at record high, and the CCC is how we deal with those 
types of crises.
    With this $1 billion that has been committed unilaterally, 
I believe without authority, are we using government funding to 
put some growers at a disadvantage?
    Dr. Outlaw. Potentially, certainly.
    Mr. Thompson. Last year, I introduced with the support of 
colleagues the SUSTAINS Act (H.R. 2606), which would allow for 
third parties, including corporations and businesses of all 
sizes--that was the beauty of it. It wasn't just the Googles, 
the Microsofts, the mega folks we talk about, but the mom-and-
pop hardware store, the tractor supply place. Those who want to 
achieve their climate credentials would be able to invest in 
NRCS conservation programs, and in doing so would allow the 
private-sector to partner with farmers and ranchers and 
landowners in support of agriculture conservation.
    Do you believe that this concept of public-private 
partnership where we would be able to fund more of these 
conservation programs, perhaps other programs within the farm 
bill, is something that you and others would support?
    Dr. Outlaw. Obviously without having all the details, but 
on its surface, we have a number of public-private partnerships 
that have worked in agriculture for quite some time. As long as 
both parties felt like the goals and objectives of the program 
were going to be achieved, I would say that would be a 
positive.
    Mr. Thompson. Thank you. I am just about out of time. I 
will let my time expire, but I would ask that any of the other 
witnesses, if you have comments on that I would love to receive 
them in some written form of the SUSTAINS Act. The text is out 
there, so you can really take a fair read and a look at it.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    The gentlewoman from Connecticut, Mrs. Hayes, who is also 
the Chairwoman of the Subcommittee on Nutrition, Oversight, and 
Department Operations, is now recognized for 5 minutes.
    Mrs. Hayes. Thank you, Mr. Chairman, and thank you for 
holding this important hearing.
    My district is a leader in climate-smart agriculture. Our 
producers run small, diversified farms and often use 
ecofriendly practices. Our farmers are passionate about the 
expansion of USDA conservation programs, and increasing access 
for small and beginning farmers.
    Ms. Raygoza, in your testimony you described how you built 
your farm from 1 to 15 acres over time, and that you now 
produce 40 different crops on your land. That is very 
impressive growth. But you also described that when applying to 
USDA programs to help aid your expansion, you found that 
applications are designed for large commodity farmers who grow 
one or two crops.
    My question for you today is what are some of your 
recommendations for making these application processes easier 
for small, diversified farms like yours?
    Ms. Raygoza. Thank you, Mrs. Hayes. I would recommend that 
the application process is simplified, or that we can input our 
data in units that make sense for us. For example, we had to 
convert our 100 beds of spinach into yield per acre units, and 
we sold in bunches or bundles, and converting that to pounds. 
That is just one example of the work that we had to do, and we 
work off-farm jobs as well. And so, that is a burden for 
applicants. So, I would recommend having those applications 
more flexible so that we can input the data in terms that we 
use. Also, I would recommend having market prices available, 
just gathering more data on organic pricing. I know we had to 
present a lot of the information ourselves, and so, just more 
information available for officers that are helping for loans, 
for example, and other programs.
    Mrs. Hayes. Thank you. That is very helpful, and in line 
with what I am hearing from farmers in my own district.
    In your testimony, you described how you provided technical 
assistance to other farmers in your area, particularly those 
who had misconceptions about eligibility and had small farms 
much like yours. What are some ways that you think we can 
strengthen outreach and education for young and beginning 
farmers, and where do you think the misconceptions about 
eligibility come from?
    Ms. Raygoza. What I found is that many of the small-scale 
farmers assumed that these programs were for large farmers, and 
that they wouldn't be eligible because their revenue was very 
small compared to large farms. Also, they didn't know or 
consider the application process to be worth the time, because 
sometimes those applications are lengthy and because of the 
return, they felt like it wasn't something they could invest 
time into. And I would recommend just having those cooperative 
agreements with organizations like National Young Farmers that 
can relate better with young farmers that already have 
established relationships can improve outreach, and also having 
resources available online for farmers to research. I mean, a 
lot of our farmers are online right now, the young farmers, so 
just having those resources online, the application available 
online, would also increase participation.
    Mrs. Hayes. Well, thank you so much for all of the work you 
have done here in this area, especially to educate young 
farmers. That is near and dear and so important to me.
    My last question is farmers in my district--thank you, Ms. 
Raygoza.
    But farmers in my district are passionate about expanding 
conservation programs in the next farm bill. Many have 
supported a double-funding of programs and are most interested 
in increasing funding for the Environmental Quality Incentives 
Program, Conservation Stewardship Program, and Agriculture 
Conservation Easement Program.
    Senator Heitkamp, can you describe the impact that doubling 
conservation programs in the next farm bill would have, 
specifically for small farmers and new and beginning farmers, 
quickly?
    Ms. Heitkamp. I mean, it would be huge. One thing that we 
should be looking at is how many of these programs are 
oversubscribed, which means there are so many more people who 
want to access them. And so, we have to get more adopters. We 
better not leave, as the last speaker said, the early adopters 
behind like the people in your state who are already engaged in 
these kinds of practices.
    But basically, we have long discussions at the task force. 
My personal position was whoever wants in these conservation 
programs should get in these conservation programs and up the 
ante and create greater incentives. Now we recognize that there 
are budget constraints and so, the task force didn't make that 
bold of a recommendation. But I totally agree with you. It is 
critical that we get more adopters in and that we do more 
encouragement for the great programs we already have. Let's use 
the tools we have. Let's fund them appropriately.
    Mrs. Hayes. Thank you, Senator.
    Mr. Chairman, I apologize. My time has expired. I yield 
back. Thank you.
    The Chairman. Thank you.
    The gentleman from Georgia, Mr. Austin Scott, is now 
recognized for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and I 
will try to be significantly briefer than that.
    I want to point out a couple of things briefly. One is that 
approximately 12 percent of the U.S. farms--these are farms 
that have more than $250,000 in revenue--account for somewhere 
around 90 percent of the food supply in the United States. I 
think as we push forward with these things, while we need to 
provide additional support for beginning, young, and small 
farmers, we need to make sure that that is not being done at 
the expense of the U.S., and candidly, the global food supply.
    I also want to point out to my colleagues something that I 
think is very important. President Zelenskyy met with Congress 
this morning. He showed tremendous leadership. One of the 
things that I do not think is being discussed enough is the 
fact that Ukrainian farmers put 50 million metric tons of corn 
and wheat into the global food supply. Trade in the Black Sea 
is closed. Russia and Belarus are responsible for--they are the 
number two and the number three producer of potash in the 
world. If our crops inside the United States do not have access 
to fertilizer, then the yields inside the United States and 
other major food producers will go down.
    Mr. Chairman, my ask is that over the next couple of weeks 
that we, as the Agriculture Committee, would have a hearing on 
the potential reduction in the global food supply and the 
impact of hunger and the geopolitical stability around the 
world as we push forward over the next couple of weeks.
    And so, I don't have a specific question for the panel. I 
have a couple of generals in my office that I intend to speak 
to right now about that same issue. But I do think all of us 
need to be aware of the unrest that comes from widespread 
hunger in the world, and recognize that Ukraine puts 50 million 
metric tons of food into the global food supply. And that is 
how much they export, and it is not going to be there this 
coming year. The Russian exports are not going to be there this 
coming year, and it is just something I think we as the 
Agriculture Committee should have a hearing on.
    And with that, Mr. Chairman, thank you for allowing me the 
time to make that statement, and I look forward to continue 
discussions with the Committee on this.
    The Chairman. And let me just say, Mr. Scott, that we as a 
Committee are moving forward. We know that the farmers in 
Ukraine may not be able to plant this spring because of the 
fighting. We also know that some parts of Ukraine will not be 
capable of being planted because of the damage of this terrible 
and wrong Russian invasion. And also, I will be asking you and 
my other colleagues to join me in sending a letter to Secretary 
Vilsack to bring some additional tools to help address this 
humanitarian crisis that is now taking place as a result of 
this terrible, awful Russian invasion.
    So, I look forward to working with you on that, and your 
points are well-spoken and well taken. We on the Agriculture 
Committee will be out front and doing all we can to make sure 
that we do not have a hunger crisis. You point out well the 
position of Ukraine and Russia in terms of wheat, in terms of 
fertilizer. 66 percent of all that fertilizer is produced right 
in that area, and so, we are mindful of it. Thank you for your 
comments.
    And now, the gentleman from California, Mr. Costa, who is 
also the Chairman of our Subcommittee on Livestock and Foreign 
Agriculture, is now recognized for 5 minutes.
    Mr. Costa. Well, thank you very much, Mr. Chairman, for 
holding this important hearing today as it relates to America's 
contribution and efforts as it relates to climate change. And 
I, too, want to commend not only Mr. Scott's comments as it 
relates to the disruption of food products, wheat production, 
and fertilizer products that come from Ukraine, but your 
sensitivity and acknowledgement of it as well that we on the 
Agriculture Committee and the impacts on foreign agriculture 
need to be conscious of as we plan ahead. The pariah Putin has 
invaded Ukraine, and in my view, he is a war criminal and we 
have to support Ukraine. But that aside, we also need to know 
the impacts not just to people who need to eat in that part of 
the world, but its impact on American agriculture as well.
    I want to get back to the specific testimony of our 
witnesses here, and Dr. Humiston, you and I have worked 
together. Your testimony, I thought, was very important in a 
couple of areas that I would like you to quickly comment on.
    I think agricultural production in America has done a lot 
to deal with the impacts of its carbon footprint and climate 
change. Ag energy is continuing to expand exponentially as we 
make changes, and whether we call it green energy, our use of 
methane or a whole host of sources, it really results in best 
management practices, in my view.
    You and I have a lot of experience in, as you noted, in 
over the last 10, 15 years of looking in California how we do 
our part. I am wondering if you would like to talk about some 
other examples. You talked about the solar efforts of covering 
some of our water conveyance facilities. Under the category of 
not reinventing the wheel, what best management practice would 
you say we can build upon for next year's farm bill as we look 
at expanding American agriculture's ability to deal with our 
part? And I, too, push back as Representative Thompson 
indicated on some inaccurate reporting, and I would really 
invite The New York Times and others to come out to California 
and see what we have been doing, because I think they need to 
cover all of the aspects of what American agriculture is doing.
    Do you care to comment?
    Dr. Humiston. Yes, thank you, Congressman Costa. I 
appreciate that question.
    Here in the U.S., we have a powerful track record that is 
world-renowned in converting science into actionable best 
management practices. We have nations from all over the world 
approaching us on how do we do that? How does our land-grant 
system, our cooperative extension, our NRCS, all of our various 
programs, how do they do it? Because we do a great job, and we 
have. And I think that is important. You have heard from all 
the speakers today about the importance of the voluntary, 
incentive-based programs----
    Mr. Costa. So, how do we build upon that with next year's 
farm bill and with the bipartisan infrastructure package that 
we passed?
    Dr. Humiston. Well, two things. I mean, we have heard some 
folks concerned about investments that USDA is currently making 
in these. Personally, I think we have to make these 
investments. If we want our farmers to be able to deal with 
extreme weather and avoid additional regulations, we have to 
create incentive programs that really have some meat on the 
bones, which includes the kind of funding that USDA is 
attempting to put out there.
    I would also say that we have to leverage our existing 
programs to the degree possible, and particularly cross 
pollinate them. For example, in California, we are really 
working hard to create a biomass manufacturing sector. We are 
working closely with our forests because there is a lot of 
volume there. What we are missing is the infrastructure, supply 
chains, and capability to do something with that biomass. If we 
can get that in place, our farmers are going to be able to 
utilize that same infrastructure and manufacturing for 
agricultural biomass and start turning a waste product into a 
profit center.
    Mr. Costa. I have limited time left here. I would suggest 
you put together a list of these various proposals and 
prioritize them on how we might, with the examples that you 
cited, how we combine these best risk management practices as 
we look at next year's farm bill.
    You touched upon the definition of rural, and this has been 
a problem that you and I have both dealt with. We have a lot of 
rural America that doesn't qualify under the Federal 
definitions of rural. What would you suggest on how we deal 
with that?
    Dr. Humiston. We have to start raising the limits on 
eligibility for a lot of these programs on population, and we 
have also got to stop using this antiquated rural versus 
metropolitan. The way it is currently used right now, if you 
have one community in a county that has a population of 50,000, 
the entire county is labeled metropolitan. You look at many of 
our counties that are huge agricultural counties. It is 
ludicrous to have them considered metropolitan, especially when 
you consider the amount of agricultural product from them.
    Mr. Costa. I concur. Thank you.
    The Chairman. Thank you.
    The gentleman from Arkansas, Mr. Crawford, is recognized 
for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman, and I would also 
like to associate myself with the comments that Mr. Austin 
Scott made earlier with regard to the situation in Ukraine and 
the impact that that can have here in the United States with 
regard to ag production. And that brings up a question I want 
to direct to Dr. Outlaw, and it has to do with fertilizer 
exports to the west. Russia just announced a suspension in 
fertilizer exports to the west. We know that that is driving 
input costs, and meanwhile, India, the world's second biggest 
producer of rice, wheat, and sugar, is set to spend $20 billion 
this year, $20 billion, to provide free fertilizer to their 
farmers. So, everyone here is aware of the staggering increase 
for inputs on the farm. Fuel is one of them, as I mentioned, 
fertilizer, pest control, seed, machinery. I want to say that 
for most field crops, there has been a corresponding or an even 
greater increase in the commodity prices.
    But as you know, this is not the case for rice. Prices are 
only slightly up, not nearly enough to cover rising input 
costs. India is spending billions of dollars, as I mentioned, 
to flood the world with cheap and dirty rice, while taking the 
lead on emissions and storing the world rice market. I hear 
U.S. rice farmers are even starting to decline, maybe even go 
out of business.
    Can you comment on the situation for rice, and then I have 
another question I will ask about getting our priorities in 
order with so much focus on things like cover crops.
    Dr. Outlaw. Sure. As most of the Committee knows, we do 
work with all types of producers and among all the different 
types of production systems we work with, rice is the one that 
is actually not doing very well and not projected to do very 
well over the next few years, mainly because they don't benefit 
from the higher prices to offset all these high costs that you 
mentioned.
    All I can say is that the safety net that we have that was 
constructed with reference prices that were put in place in the 
2014 Farm Bill that were using costs, because our group helped 
a lot with that, from basically the 2012 time period is well 
out of date. So, we need to start thinking about ways that the 
reference price could be ratcheted up to take some of the 
pressure off producers.
    Mr. Crawford. Let me ask you this. Would you support 
indexing reference prices? I mean, the current farm bill, I 
think reference price as a baseline is 2012, obviously not 
adequate to meet the demands of input costs today and 
production costs. Would indexing be a good option in this 
scenario?
    Dr. Outlaw. We have actually looked at indexing over the 
last 10 years many different times for different Members of 
this Committee, and there are approaches that will work. You 
have to be really careful which indices you tie these movements 
to, but it certainly would work and offset some of the cost, 
although be realistic that the indices kind of--they are 
delayed. But it would still be better than nothing.
    Mr. Crawford. Right. So, I mean, I understand that you 
can't index something based on a future projection. It would 
have to be based on probably a 3 year history or something like 
that, rolling average, and I get that. But the fact that we can 
have a conversation about the potential for indexing to address 
this shortfall I think is worth mentioning.
    On the topic of climate change, I think it is important in 
the context of agriculture when we start talking about climate 
change that we kind of establish this, I guess, baseline, if 
you will, and the difference between environmental activism and 
active environmentalism.
    So, for folks on the outside that have an agenda that don't 
really understand agriculture, let me just be clear. Farmers 
produce on land that they derive their income from. It is in 
their interest to achieve a degree of sustainability so that 
they can produce next year and the year after and the year 
after, and also to hand that land down to their families so 
they can continue to produce. So, any attempt to malign 
producers is grossly misguided when we rely on our American ag 
producers to be the mainstay of our food source globally. And 
think about what is going in Europe right now and Ukraine, and 
the impact that is having. Historically, the United States has 
been the bread basket of the world, but we have engaged in 
policy that now encumbers U.S. producers to the degree that we 
can no longer be the bread basket of the world. And when we see 
the calamity that is taking place in Ukraine and the potential 
there for them to not be able to provide for themselves and the 
impact it is having on their economy as the bulk of their 
production goes to the Middle East and Africa. As Mr. Austin 
Scott suggested, there is the potential for global hunger that 
we don't need to exacerbate that problem by engaging in 
misguided environmental policy.
    I appreciate you guys being here today. Thank you.
    The Chairman. Thank you.
    And now, the gentlewoman from North Carolina, Ms. Adams, 
who is also the Vice Chair of the Committee on Agriculture, is 
now recognized for 5 minutes.
    Ms. Adams. Thank you, Chairman Scott and Ranking Member 
Thompson, for hosting the hearing today. Thank you to the 
witnesses for being here.
    Senator Heitkamp, welcome back to Congress. Black, Tribal, 
family, and rural farmers and ranchers need structural reforms 
that ensure fair market prices and infrastructure supporting 
transitions to reformative farming. So, what types of 
initiatives does the USDA plan on designing to incentivize 
better formative practices for socially and economically 
disadvantaged and rural communities?
    Ms. Heitkamp. I think you know, Congresswoman, that USDA 
has made this a new priority where it hasn't been a priority in 
the past, and that is a tragedy. I can't speak for the 
Bipartisan Policy Center who I am representing, but I think 
people need to be educated on the land restrictions that 
families face in traditional communities where there was way 
too much paternalism. That is true for Native American 
families; that is true for some traditional African American 
farmers.
    And so, as we look at USDA practices and how we can reach 
out and make sure that farming is an equal opportunity for 
everyone to be successful, and historic, as you know, both in 
Native communities and in African American communities, 
certainly the court system has ruled that there have been past 
inequities. Let's not just try and think about those past 
inequities and how we fixed those problems. Let's think about 
how we can move forward to make farming opportunities available 
to everyone.
    But one of the things that I think is critical is this 
workforce, is this ability to get access to information, and as 
the Chairman has said, what role can traditional Tribal 
colleges--our Tribal colleges in North Dakota do a great job in 
reaching out to local ranchers and farmers. They have 
collaborations which can make such a difference for Native 
American, in our case, usually ranchers.
    Ms. Adams. Good.
    Ms. Heitkamp. But let's look at what the traditional 
colleges and campuses could do to provide that assistance.
    Ms. Adams. Great. Thank you so much.
    Dr. Humiston, unless there is a real systemic change, we 
now know that emissions from agriculture will make it 
impossible to achieve the Paris Agreement of limiting global 
warming to no more than 2 Celsius. We currently fall short of 
the target 1.5 Celsius at this current rate. Global food 
systems are reliant on us to meet this goal.
    So, if the climate crisis continues to proceed in the 
manner predicted, how will it impact the nutritional value of 
food?
    Dr. Humiston. Thank you for the question.
    That is a great question because we are still doing 
analysis on exactly what that does mean. Obviously, as crops 
start moving because of changes in ecosystems due to extreme 
weather and climate, it is going to make it tougher for farmers 
to be able to produce some of those crops that are needed. We 
are also finding that the nutritional quality of some food, for 
example, if certain crops like stone fruit don't have a 
freezing point so that they can be produced, we start losing 
those kind of crops that are so important to our diet.
    So, we are still working on that issue, but I think what is 
really important is that we make available to farmers the 
ability to see that transition and move towards being able to 
continue to produce those crops.
    Ms. Adams. Great, thank you.
    So, Mr. Conner, in your testimony you mentioned that food 
waste accounts for eight percent of all global greenhouse gas 
emissions. Your team nutrition program provides education about 
food waste loss prevention. So, would you please explain what 
the climate impact the food waste loss prevention education 
has? What does it have on that?
    Mr. Conner. I appreciate the question. I would just say, it 
is one of our recommendations that are part of the Food and Ag 
Climate Alliance. It makes some sense, if you think about it. 
If you produce food, you have the inputs, the labor, everything 
that goes into the production of that food and it simply gets 
discarded. The waste there alone is intolerable in that 
circumstance, but then you add the disposal, and the creation 
of greenhouse gas emissions that comes with having that product 
in landfills and other areas. It is something that needs to be 
addressed and we are proposing a pretty extensive education and 
training program that begins with USDA feeding efforts to 
attempt to do all that we can to minimize that, because we 
think there are gains that can be made in greenhouse gas 
emissions by simply better utilizing the very food that our 
farmers are putting on the table for you.
    Ms. Adams. Thank you, sir.
    Mr. Chairman, I am out of time. I yield back.
    The Chairman. Thank you.
    The gentleman from Tennessee, Mr. DesJarlais, is recognized 
for 5 minutes.
    Mr. DesJarlais. Thank you, Mr. Chairman, and I appreciate 
our witnesses being here today.
    As we struggle with the trucking shortage and supply chain 
issues, we are experiencing 40 year high inflation, record fuel 
prices, fertilizer shortages, crippling and overburdensome EPA 
regulations that creates even more uncertainty. We are sitting 
here today having a second climate change hearing, and I guess 
it is a little frustrating, considering our farmers are climate 
champions.
    But Mr.--Dr. Outlaw, I am sorry, some of the environmental 
community have continued to villainize farmers and ranchers 
even though modern American agriculture is the most sustainable 
in the world, and clearly provides climate benefits. Our 
producers are great stewards of their land, as modern 
agriculture delivers benefits including reduced inputs, 
healthier soil and water, and increased carbon sequestration.
    Do you believe that farmers and ranchers are currently 
being given the credit or recognition that they deserve for 
practices that generate climate benefits?
    Dr. Outlaw. No, I do not. As you said perfectly, our 
producers spend their livelihood in keeping the land in the 
most productive manner they can, and over my 30+ year career 
doing policy, I have witnessed a lot of different groups take 
aim at commodity producers because they would either want the 
money or they want to try to bust everything up so that things 
are different. In my mind, just like you said, I believe that 
our producers are the most productive in the world, and they do 
have a spot where they absolutely care about the environment, 
absolutely care about productivity, and keeping the land in 
production for their children to take over.
    Mr. DesJarlais. Let me stay with you.
    We know producers are facing a lot of uncertainty this 
year, particularly in light of the situation in eastern 
Ukraine--eastern Europe, rather, and while some of the 
headwinds farmers are facing may be outside of our control, 
there are commonsense decisions we make here at home that could 
help our farmers, such as producing more domestic energy or 
ensuring that producers have access to the chemistries they 
need, rather than letting EPA pull labels based on unsound 
science. Despite high commodity prices, the farmers I talked to 
are concerned about the margin they will make in light of 
soaring costs.
    Speaking from your experience with the 94 representative 
farms when farmers are facing narrow or negative margins, what 
are some of the areas that they cut back on, and how does this 
affect production and potential climate impacts?
    Dr. Outlaw. That has been the one thing that I didn't 
understand about the environmental community attacking 
production agriculture, because if they are not successful or 
not making money, one of the places they do tend to cut corners 
on is some of the conservation practices that they would do 
otherwise.
    So, that is one of the areas where obviously practice-wise, 
they tend to cut back on doing the tiling for their land, or 
they are doing terracing, other practices that would make the 
land more productive in the future. But they also cut back on 
the family living withdrawals that they take from their 
operation, just trying to make ends meet.
    Mr. DesJarlais. I appreciate that.
    To our other witnesses, broadband is an issue that was 
touched upon in today's testimonies. When this Committee speaks 
on broadband connectivity, it is normally a Rural Development 
issue. I believe this needs to be part of the climate solutions 
discussion. Can either of you comment on how increased 
broadband connectivity could increase innovation and 
productivity for farmers at the field level, and wouldn't this 
be a huge step forward as it relates to precision agriculture 
technology?
    Dr. Humiston. Yes, thank you.
    We have some exciting new technologies coming online, but a 
great many of those do require bandwidth, and that is a huge 
missing piece in much of rural America. We are working closely 
with a variety of public and private partners to try to get 
repeaters and boosters and increase that bandwidth out there. 
But we are also trying to work with entities like our National 
Labs and some of our very strong engineering programs to really 
reduce the need for the bandwidth in some of this technology, 
too.
    But at the end of the day, it all comes down to funding and 
having the infrastructure out there.
    Mr. DesJarlais. Thirty seconds, if you would care to 
comment?
    Mr. Conner. Congressman, certainly you have identified a 
key problem here. Broadband is absolutely necessary for modern 
agriculture, for precision technologies that are a necessary 
part of any climate debate. Without it we have one hand tied 
behind our back.
    Mr. DesJarlais. Thank you all, and Mr. Chairman, I yield 
back.
    Ms. Heitkamp. If I could just comment. I think we talk 
about broadband, but let's not leave wireless behind, because 
having the ability to go out into the farm and use your cell 
phone is critical, too.
    Mr. DesJarlais. Thank you.
    The Chairman. Thank you very much.
    The gentlewoman from Virginia, Ms. Spanberger, who is also 
the Chair of the Subcommittee on Conservation and Forestry, is 
now recognized for 5 minutes.
    Ms. Spanberger. Thank you so very much, Mr. Chairman, and 
to our witnesses, thank you for being here. And certainly as 
the Chair of the Conservation and Forestry Subcommittee, every 
hearing we have we are highlighting the role and the important 
role that our farmers and producers have, not just in feeding 
America, feeding the world, but also in nurturing our planet. 
Certainly as Ranking Member Thompson said, farmers are climate 
champions, and so, I am a little bit surprised to hear so many 
comments about unnamed groups that are challenging farmers 
because in this Committee and in our Subcommittee and with the 
witnesses we have today, and the farms I visit across my 
district, what we talk about every single time is how farmers 
are leading the way in practices that are so important not just 
to their bottom line, not just to their community, not just to 
the health of their land, but to our country and the world. And 
in fact, there are documentaries talking about how important 
and how vital and integral and transformative our farmers and 
producers are. They are leading the way not just in the United 
States, but throughout the world. And so, I want to thank them 
for that.
    But I do want to talk about the issues that they face and 
the challenges that they face. Certainly--and I will turn to 
you first, Senator Heitkamp. When we are talking about some of 
the incredible conservation practices, regenerative farming 
practices, rotational grazing practices, so many of these 
practices can be trial and error. There is so much important 
research going on, but yet, there is attrition on the ground 
for trained technical assistance providers who really can 
provide site specific, soil specific solutions to implement 
conservation practices effectively. We know between Fiscal Year 
2004 and Fiscal Year 2018 staffing levels at the NRCS have 
declined 19 percent, and unlike other Federal agencies, as I 
know you are aware, Senator, 98 percent of NRCS staff are 
located outside of Washington, D.C. They are located by our 
farmers and producers. They are located in our rural 
communities across America. And as such, when we have attrition 
at NRCS, it is felt disproportionately by those who are seeking 
support and help as they implement conservation practices on 
their land.
    So, certainly, Senator, as part of your testimony you 
focused on the need to expand technical assistance through 
workforce development. I am personally an advocate for 
increased funding to provide higher paid NRCS employees, but I 
am concerned that increased salaries alone certainly won't 
contend with the challenge.
    What steps should we be considering taking as we are 
looking towards the 2023 Farm Bill so that we can better 
develop a pipeline of staff, and how could we potentially 
leverage federally funded resources, such as land-grant 
universities, to this end? And I will start with the Senator.
    Ms. Heitkamp. Well, I am such a believer that we have to 
keep the people who understand rural America in rural America, 
and in order to do that, we have to make sure that they can 
earn a living. But Congresswoman, I am just urging you all not 
to reduce local staff. If you want to get this done, if you 
want to expand American agricultural productivity, do what we 
have always done so well. Our land-grant colleges, getting our 
extension agents out there. Let's build a pipeline from FFA. 
One of the growing youth groups is really Future Farmers of 
America. They are our future leaders. They care, and so let's 
make the commitment today to keeping people helping rural 
America and rural farmers.
    Ms. Spanberger. Thank you so much, Senator.
    Dr. Humiston, if you care to comment on that question at 
all from your perspective as well?
    Dr. Humiston. Well, the Senator did a great job on that. I 
would add to it that that pipeline is really critical, and we 
have to start young.
    One of the challenges we have is we actually have a lot of 
great jobs in the agriculture and natural resources sectors, 
but too much of the public think the only jobs are farmer or 
farmworker. There are literally thousands of other jobs, and we 
have to get people to understand that and start looking to 
those. So, we are partnering up with our community colleges. We 
are starting in grade school with 4-H. I am a 4-H as well as a 
Future Farmer of America alumni, and it really does make a 
difference even to get urban and suburban kids interested in 
looking at the agricultural sciences and opportunities 
throughout the supply chain. Things like regional food systems 
gets people interested. Look how many cooking shows are on TV 
now.
    Ms. Spanberger. Thank you so much.
    Certainly in one of the counties I represent--well, many of 
the counties I represent have tremendous programs in the high 
school, but one of the counties has just implemented a 
specialty center that will begin next year focused on 
environmental science, focused on soil health, and hopefully 
will create a pipeline for folks going out into the field, 
either continuing to work their own lands or support others.
    My time has expired. I have so many more questions. I am 
grateful to the witnesses for being here, and Mr. Chairman, I 
yield back.
    The Chairman. The gentleman from California, Mr. LaMalfa, 
is recognized for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman.
    Let me go right to Dr. Humiston. You were talking about 
fuel loads and forestry, et cetera, obviously a very, very big 
concern in my district in California, western states, as you 
know, just one fire burned approximately 1 million acres last 
year, the Dixie Fire, and many others in the six-digit range. 
So, your comments are very timely and very appreciated in that 
regard.
    So, how do we further the utilization of these products? 
You mentioned it is the end-use that is the problem, really 
turning it into something--I mean, we can harvest it, we can 
haul it, we can stack it somewhere, we can put it on a deck 
somewhere, but there doesn't seem to be a home for utilizing 
it. So, does that really boil down to investment in biomass 
plants to make electricity, or what is on your mind on that?
    Dr. Humiston. Well, I am not a fan of biomass plants to 
produce electricity, only because it costs several times more 
than producing electricity in other ways. But we have a lot of 
bioproducts that could be profitable centers for both forestry 
and agriculture, bioplastics, cellulosic nanofibers, biofuels, 
great many programs, and advanced wood products.
    The challenge is the lack of infrastructure to get it from 
the forest or the farm into that final product. And I am 
thrilled to say in California, we have done some really 
exciting things recently. I have been co-chairing an effort 
with the Rural County Representatives of California, RCRC, 
which is a statewide group of the 39 rural county supervisors 
in our state who have actually themselves stood up a financial 
entity and created a supply chain from forest through 
manufacturing to markets in Asia for wood pellets. And now 
because of that example, we are able to get other folks to look 
at these same kind of supply chains and link them up in 
frameworks that allow us to do more of that both for forest and 
ag biomass.
    Mr. LaMalfa. What is the foreign use of those wood pellets?
    Dr. Humiston. It is basically Japan and South Korea trying 
to wean themselves off nuclear, and it is a short-term 
solution. Wood pellets are not a long-term fix, but they are a 
great solution in the next 5 or 10 years.
    Longer-term, we really have to be looking at the use of 
biomass for, as I said, bioplastics and other uses, 
particularly the advanced wood products which sequester carbon 
for decades in our buildings.
    Mr. LaMalfa. Why can't we be looking at for generating 
electricity in our own country more over having to, we are 
having a situation with natural gas right now and with coal and 
things like that. Why wouldn't this be--and indeed, the bugaboo 
you ran into with the other--green with solar and wind. Those 
are not 24/7 sources of power. They are, at best, a portion of 
the day.
    Dr. Humiston. There is a role for biomass being burned to 
produce electricity to be part of that power 24/7 where wind 
and solar sometimes are not available. There is definitely a 
role for that, and there is a real role for co-gen where you 
have biomass being utilized for electricity that has been used 
within a very close arena, which often can pencil out. But in 
the past, we have done work for several years now where it has 
been very clear that producing electricity from biomass, even 
from established plants, does cost several times more than that 
same electricity from other sources. It is just not the most 
economically efficient use. And frankly, as we try to clean up 
the huge amount of biomass in our forests, I believe we have to 
find profitable ways to do that or we won't get the job done.
    Mr. LaMalfa. Well, certainly as far behind as we are on our 
forest management, fire suppression is costing us billions and 
billions more each year. The costs we are seeing in air 
quality, water quality, loss of wildlife, loss of the asset 
itself, I think it would be not out of line for the Federal 
Government to pay to remove this material and turn it into 
something that could be used.
    Just talking about it from a point of forest health.
    Dr. Humiston. Actually, you are right on. If we could get 
our forests back to a healthier state--which actually means 
considerably less tree density and biomass than we currently 
have in most of our forests in the western states, we would 
have not only less risk of fire, we could produce more water. 
We have studies showing that the Sierra could produce 15 
percent or more water than it currently does because of 
unhealthy forests.
    And then, of course, there is wildlife habitat, there is 
recreational opportunities, which is a huge economic sector in 
many of our western states, all of which would benefit from 
healthier forests.
    Mr. LaMalfa. Music to my ears on that water side there, 
because obviously we are very dire--we ought to be talking 
about more of that in this Committee. I would suggest, Mr. 
Chairman, is that California is not going to be producing many 
crops with acres being zeroed out this year. We have hundreds 
of thousands of acres being zeroed out. It is the second year 
in a row that number is increasing. We are not going to have 
these products that all of our country relies on from 
California, so that is big.
    So, thank you for your testimony.
    Dr. Humiston. Thank you.
    The Chairman. Thank you.
    The gentlewoman from Ohio, Ms. Brown, is recognized for 5 
minutes.
    Ms. Brown. Thank you, Chairman Scott and Ranking Member 
Thompson, for holding this hearing, and thank you to the 
witnesses for joining us today to review the role of the USDA 
programs in addressing the urgent climate crisis.
    Congress considered and passed the 2018 Farm Bill on a 
bipartisan basis, and it provided significant investments to 
incentivize sound farming practices that not only reduce 
pollution, but also make our farms more resilient to the 
changing climate. We must recognize that climate change is a 
clear and imminent threat to our planet.
    As stewards of this planet, we have the moral 
responsibility to protect the air we breathe, the water we 
drink, and the world we leave behind. To stay ahead and 
competitive, we must be smart about how we use and manage our 
farmlands, and American farmers and ranchers can be an active 
partner in this endeavor. I look forward to working with all of 
you as we look for climate solutions that work for everyone.
    Mr. Conner, what do you believe are some of the most 
helpful tools from the 2018 Farm Bill to help producers address 
climate concerns while also supporting their operations, and 
how can they be built upon to better work for producers?
    Mr. Conner. I will answer that two ways, Congresswoman.
    First, I think the 2018 Farm Bill provided an excellent 
foundation in terms of the Title II programs. This is technical 
assistance; this is financial assistance for farmers to do good 
things on their farms that may be just on the edge of viability 
in terms of economics, and the bill provided great assistance. 
Many of our FACA recommendations that we put forth today and 
talked about today follow the model from those programs in the 
2018 and past farm bills. We believe producers are very 
comfortable with those. We believe they are programs that help 
a variety of farmers, and we would, for that reason are 
encouraging additional resources be added in the next farm bill 
to Title II and a number of those efforts that have been 
identified today.
    Ms. Brown. Thank you very much.
    While we continue to fight climate crisis together, we must 
ensure that resources are available to everyone, particularly 
underserved farmers.
    So, Ms. Raygoza, you have used a number of programs within 
the USDA and you have touched on some of the barriers that you 
faced while using these programs. As it relates to the programs 
that you have used, what programs do you think work well and 
which do you believe need improvement to better help 
historically underserved farmers?
    Ms. Raygoza. Yes. The programs that worked really well for 
our farm was the EQIP Program. So, for example, for 
conservation, for cover cropping, we participated in the 
organic program but what worked well for us was that we were 
able to apply those programs to all of our acreage, and I think 
what we can do to improve is to make them--like I mentioned, 
the cost available or the funding available up-front. Also, for 
many of these programs, an issue for many farmers is land 
access so we can implement these programs, allowing the farmer 
to have a short-term lease and be able to access these 
opportunities as well. Because many young farmers have short-
term leases, we need to be able to have that as an option to 
implement these programs.
    Ms. Duncanson. Can I just chime in on that also very 
quickly? On our farm, we utilize EQIP as well as a CSP 
contract, and I would like to just echo what has been mentioned 
here before about the fact that those who have helped us try 
some practices here on the ground that have been beneficial to 
our resiliency, but the application process itself is tedious 
and very time consuming, and you definitely need to have 
technical assistance to go through there. We are very lucky in 
the county that we live in that we do have expertise to help 
us, but I don't see those folks staying around in this area. 
They will move around to other areas, which is fine. But I do 
worry about their replacements, so I would like to just say 
that Senator Heitkamp's issues about using all the different 
programs and colleges at all different levels throughout the 
country to get people involved in technical assistance to 
provide it on the land from a food point of view as well as 
from a production point of view.
    Thank you.
    Ms. Brown. Thank you, and my time has expired, so thank you 
so much, and I yield back.
    The Chairman. Thank you.
    The gentleman from Illinois, Mr. Davis, is recognized for 5 
minutes.
    Mr. Davis. Thank you, Mr. Chairman. I appreciate this 
hearing happening, but my farmers and producers are not talking 
to me about climate change issues. They are talking to me about 
the ever-soaring input costs, how is this Administration, how 
are we in Congress addressing those high costs and inflationary 
pressures? What is the Biden Administration doing to tone down 
the rampant spending? And reports just this week show average 
gas prices in the U.S. have risen 22 percent, and that is just 
in 2 weeks. And yet, the Biden Administration refuses to uphold 
the Renewable Fuel Standard, an immediate solution to lower 
emissions and reduce costs at the pump. Inflation is now at 
over eight percent. Ag input costs are rising, as I mentioned, 
and showing no signs of slowing.
    And it is not just that. This Administration has abandoned 
our farmers in so many ways, be it through pushing a new 
regulatory scheme with their WOTUS rewrite, abandoning 
President Trump's Navigable Waters Protection Rule, creating 
new obstacles for pesticide use, and failing to follow through 
on existing trade deals.
    The ag economy is hurting across the board. They are 
concerned about whether or not they are going to be able to 
afford to plant a crop this year. And look, we can always talk 
about addressing climate change issues. I mean, America 
deserves credit and our farmers deserve a lot more credit for 
what they have done to reduce greenhouse emissions.
    Can any of the witnesses please tell me and speak to the 
way inflation, these input costs, and maybe even these reckless 
policies make it impossible to predict what a market looks like 
months from now, yet alone a year from now when we start 
talking about this farm bill? Our farmers want to know if they 
are going to be able to survive before we get to the next farm 
bill.
    Mr. Conner, would you like to respond?
    Mr. Conner. Congressman Davis, thanks for that opportunity.
    I do not disagree with you that the coffee shop talk today 
is not climate change. It is world events. It is fertilizer 
prices. It is a number of things that are literally sort of in 
your face, and I concur with that.
    I will say, though, that we find great interest to--from 
our producers when we start talking about climate in the 
context of incentive-based, in the context of additional 
resources and revenues in your pocket. And you know, that is in 
desperate need out there in rural America, given the challenges 
that we face. Farmers need a better shake, and we are doing 
this right now to try and give them that, and we wouldn't be 
sitting here addressing these concerns if it didn't have that 
strong, strong potential associated with it.
    On the biofuels front, I am well aware of what you are 
saying. The number of facilities out there that are offering 
the higher-octane blends is dismal out there in rural America, 
and you know, we are missing a great opportunity there. We need 
that infrastructure, and some of those investments we are 
talking about in this climate debate, to raise those numbers, 
because right now, we cannot have much of a market impact when 
I believe the figure is like 3,000 retail outlets out of tens 
of thousands of outlets actually offer these higher blends. And 
that is totally inadequate. We have to change it.
    Mr. Davis. It is. Retail outlets are not going to invest in 
offering new choices if they don't know if the Administration 
is going to follow the existing law into the Renewable Fuel 
Standard. There is no certainty. How in the world can you 
expect somebody in the private-sector to make a business 
decision when they don't know if decisions here in Washington 
are going to actually follow the law? And that is what is 
frustrating to us. I mean, we have heard promises from 
Administrations in the past and the current Administration 
about what they are going to do to help our ethanol producers, 
what they are going to do to help our farms. They are not doing 
it, and that is what is frustrating. We are in a kind of spin 
cycle of whether or not to be able to get these products out 
into the marketplace.
    Dr. Outlaw, did you want to make a comment on the input 
costs or any of the other issues that our farmers are facing?
    Dr. Outlaw. Well, obviously we have done a couple of 
studies, one from Congresswoman Letlow on the impact of 
fertilizer prices on all of the farms, and it has been huge. We 
did an analysis just looking at nitrogen as well, and it was 
big.
    The honest answer is that I hope that the prices that the 
futures market is reflecting come true, because if not, we are 
going to have a big disaster because the costs have gone up, in 
some cases 28 to 40 percent across the board for different 
types of commodities, and that will put a lot of people in very 
dire straits.
    Mr. Davis. It is going to put them in dire straits. Imagine 
if we had to compete against our global competitor where we see 
war ravaging in Europe, and imagine if there weren't any issues 
with the Brazilian soybean crop. But that cannot be permanent, 
and we cannot allow these costs to be permanent.
    I yield back, Mr. Chairman.
    The Chairman. Thank you. Thank you very much, Mr. Davis, 
and I do want to assure you that President Biden has not 
abandoned our farmers. And as you recall, Secretary Vilsack was 
in here and spoke very pointedly about the things that this 
Administration is doing.
    The gentlewoman from New Hampshire, Ms. Kuster, is now 
recognized for 5 minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman, and thank you 
for holding this important hearing, the very first hearing 
dedicated specifically to addressing climate change in our 
Committee. I am excited to continue this discussion as we look 
to how we can continue to utilize the farm bill to reduce 
emissions in the agriculture sector and maximize how our farms 
and forestlands store carbon.
    I always like to begin these conversations by recognizing 
the incredible work that farmers and foresters in New Hampshire 
and across the country are already doing to mitigate climate 
change, and as we look ahead to the reauthorization of the farm 
bill next year, this is an excellent opportunity to take stock 
of what is working in the current farm bill and what we can do 
to improve and better serve our farmers and producers.
    So, in that vein, I believe one of the most important 
things we can do to address climate change is to keep farmland 
as farms and forestland as forest. That is no easy task in 
states like mine where land values are rising and development 
demands are significant. These factors can box out young and 
beginning farmers in particular.
    Thankfully in New Hampshire, we have a wonderful 
organization like Land for Good that do an incredible job 
providing technical assistance to beginning farmers and helping 
them connect with available agricultural land. But the fact 
remains we need to do more to focus our nationwide effort 
around farm transitions and ensuring that the next generation 
of farmers get off to the right start.
    Ms. Raygoza, your testimony perfectly exemplifies this 
need. It would have been easy for you to get discouraged and 
find another line of work when land access presented so many 
hurdles, but I am glad you hung in there. You mentioned you 
were able to make use of FSA farm ownership loans, but could 
you comment on other ways that we can grow the farm bill to 
help with these land access challenges, and what is the 
National Young Farmers Coalition's vision for making access 
easier for new farmers?
    Ms. Raygoza. Yes. So, for me and my farm, it was very 
important for us to be able to have access to land. We did 
struggle to apply, and so, the application process could be 
streamlined. We appreciate the microloan program that is 
helping many farmers get started, so we would like to see a 
continuation in those programs for microloans with the 
streamlined application process for farmers to access those 
programs.
    Also, equitable land transition so that farmers can be able 
to transfer into land and have access to those as well.
    Ms. Kuster. Great.
    Ms. Raygoza. Yes, thank you.
    Ms. Kuster. Go ahead. I also--sorry, our time is short, so 
I am going to cover the role of family forest operations as 
well in addressing climate change.
    New Hampshire is the second most forested state in the 
nation, and we know very well that working forests already play 
an important role as carbon sinks.
    Recently, the Bipartisan Policy Center's Farm and Forest 
Carbon Solutions Task Force released their policy 
recommendations in the thorough report that we have heard about 
today. I was pleased to see excellent recommendations for 
better utilizing forests as natural climate solutions.
    One recommendation that stood out to me was the need to 
modernize and expand our seed collection and tree nurseries. 
Doing so would not only help reforestation efforts in the 
aftermath of fires, but could also help prepare for adapting 
our existing forestlands to climate and weather patterns.
    Senator Heitkamp, I appreciate your leadership on this 
report and wondered if you could expand on how BPC would urge 
Congress to strengthen seed and nursery collections through the 
farm bill?
    Ms. Heitkamp. I think that it is the single most important 
part of our recommendations in forestry that we make sure that 
we have the seedstock, we make sure that we are building 
resiliency. And so, I would say that in the whole--I mean, we 
have to take care of our forests. We have to stop the forest 
fires. We have to look at what we are going to do to reforest 
our communities, especially for the private landowners who are 
doing the job so adequately.
    I teased Saxby. I said, we joke in North Dakota that our 
tree is a telephone pole, and so he really--I led the way in 
terms of forestry, making sure that we were--that you all were 
well-represented. But I think that you have to really take a 
look at the whole span, whether it is what is happening right 
now with forest fires and the impact of climate, but also how 
do we build back our forests and our industry in a way that is 
going to be sustainable into the future? And so, this seedstock 
is so critical and important, and that is what we heard, and 
that is why we built the recommendation.
    Ms. Kuster. Great. Thank you so much.
    With that, Mr. Chairman, I yield back.
    The Chairman. Thank you.
    The gentleman from Georgia, Mr. Allen, is recognized for 5 
minutes.
    Mr. Allen. Thank you, Mr. Chairman, and I don't want to 
sound like a broken record, but as has been stated here 
earlier, my folks back home are not tuned into this hearing. In 
fact, I have very few questions, but I can tell you what they 
are saying back home. I will tell you what I see is the biggest 
threat to this nation.
    Right now the world is on the edge of global upheaval, and 
today's hearing focuses on none of our farmer's critical 
issues, not one. Two of the world's leading suppliers of wheat, 
corn, and fertilizers are at war. Commercial activity in 
Ukraine ports has not resumed since Russia's invasion, which 
could leave to an inability to export their commodities.
    Folks, my farmers are trying to figure out whether to 
plant. I am begging them to plant. It is planting season, and 
they don't even know what fertilizer is going to cost because 
it is going up every single day. It is time for this 
Administration to engage and this Committee to engage. The 
Administration continues their short-sighted war on fossil 
fuel, which has increased our dependence on foreign energy. 
What is amazing to me is we are sending $75 million a day to 
Russia, not counting what Europe is sending. We are financing 
the dadgum war. I mean, folks, you can't make this stuff up.
    These attacks on production of fossil fuels here in America 
and our domestic greenhouse gas emissions are, in part, 
responsible for, first, the global reliance on fossil fuels in 
Russia, and the Russian war effort, and second, when it come to 
the reduction of American greenhouse gas emissions, all that 
does is cause a net increase in global greenhouse gas 
emissions.
    I have tried to be patient with the Administration. I 
recognize that they have their priorities, but folks, this body 
and this Congress and this Administration better get our 
priorities in order. Certainly, one is a $30 trillion debt. We 
are talking about spending more money, more money. Where is it 
going to come from? In order to have that, you got to have 
national security. How about jobs and the economy? Where do you 
think the money comes from? Education, healthcare, we got a lot 
of issues to address here, and most of it is dealing with 
nutrition and the farm.
    Right now--well, I had asked the President--40 Members 
signed on to a letter to ask the President to restore the 
previous fossil fuel regulatory environment and production 
incentives that we had in this country that made this country 
energy independent and the most powerful country in the world 
just 18 months ago. We had an oil war between Russia and Saudi 
Arabia at $7 a barrel and going lower, and look at today. 
Folks, it is out of control and we have let this happen because 
we got our eye on the wrong ball.
    Dr. Outlaw, when we [inaudible] in the U.S., it sends a 
market signal to U.S. competitors to increase their production, 
which usually leads to more negative environmental 
consequences. We had the situation in Brazil that plowed up 
half of the [inaudible] for carbon dioxide. Do Federal 
regulators, USDA, are they taking into account the impact 
globally of this regulatory situation?
    Dr. Outlaw. I can't speak to all of that. I don't believe 
that we are focusing more on our producers, and I don't think 
that what is happening in other countries is something that has 
been looked at very closely.
    I do know that some of our biggest competitors like Brazil 
have their own environmental issues that if commodities start 
being traded, looking at their footprint, they would be in a 
little bit different situation competitive-wise than they are 
currently.
    But no, I don't believe--to answer your question, I don't 
believe so.
    Mr. Allen. All right. Well, I am sorry. I am out of time. I 
yield back, Mr. Chairman.
    The Chairman. The gentlewoman from Maine, Ms. Pingree, is 
now recognized for 5 minutes.
    Ms. Pingree. Thank you very much, Mr. Chairman, and thank 
you for holding this important hearing.
    While I know we are all focused on the activities that are 
going on in Ukraine and our hearts go out to those people and 
hope that we can continue to do more, we also understand that 
could have a huge impact on energy, on commodity prices, on 
availability of food around the world, it doesn't mean that we 
shouldn't be holding this hearing today. These are also very 
important issues, and I really appreciate that you are doing 
that.
    So, my questions. Senator Heitkamp, so nice to see you 
again. Thank you for the work that you have been doing. One of 
the recommendations in the Bipartisan Policy Center's report 
was to streamline NRCS process for adopting new conservation 
practice standards. Currently, the practice requires 
stakeholders to petition for an interim practice, and then NRCS 
studies that interim practice for 3 years or more. This is 
something I have been interested in, as I have been pushing for 
NRCS to support compost, which is finally on its way as an 
interim practice. But could you talk a little bit about why 
streamlining the process is important as we think about climate 
change, and how do you think NRCS should approach developing 
new conservation practice standards in a way that supports 
innovation without undermining their scientific credibility?
    Ms. Heitkamp. Well, you have already heard from the 
producers here that the application process is way overbearing 
and yes, they are grateful for the help, but why--I mean, 
farmers don't want to be paperwork people. They want to get out 
and farm. And so, the first thing I would look at is even on 
those proven programs, making sure that the application process 
is streamlined and available.
    But if we really believe that we have an emerging crisis in 
climate, why is [inaudible]? Why shouldn't we basically be 
early adopters and get out there and get it done? And so, we 
really believe that USDA has done a great job in designing 
programs, in implementing and researching programs, but they 
need to have an implementation date that is much quicker and 
they need to have an implementation plan that deals with, as I 
have been a broken record here, workforce on the ground, 
technical assistance on the ground, making sure, and then 
evaluate. Get as many adopters out there, evaluate, and you can 
always walk back and say that didn't work the way we thought it 
was going to work. Let's try something else.
    And so, let's not study something to death to the point 
where we don't get the job done.
    Ms. Pingree. Yes, thank you so much. I really do appreciate 
the work you are doing.
    Ms. Duncanson, I want to ask you a question, and just want 
to say I am a Minnesotan by birth myself, yah, sure, you bet 
ya. My family--my mother was born on a farm in Kenyon. My 
grandfather came from Norway, like so many Minnesotans, and my 
uncle farmed it for years. Also, I know you are not that far 
away from St. Peter, so my brother and sister went to Gustavus. 
So, we got southern Minnesota covered there.
    But I want to ask you a question. We are making a lot of 
progress on aligning good conservation practices and crop 
insurance, but I think there is still a lot of work to do. The 
report included in your testimony noted that there is research 
on this currently underway through the 508(h) process, which 
allows third parties to propose new crop insurance products 
with the goal of eventually opening the door to new insurance 
rating methodologies that explicitly consider a farmer's 
conservation practices. So, could you talk a little bit more 
about the effort and what you hope will come out of the 
process?
    Ms. Duncanson. Yes, thank you very much, and I appreciate 
your pointing out the great State of Minnesota and your 
connections to it.
    Yes, that process has been part of what we have worked 
towards and are hopeful about that will get out on the 
landscape and try to see what really is resilient and working 
and could be incentivized or recognized as a way to make crop 
insurance continue to be part of our resiliency plan. Keep in 
mind that for so many of us, crop insurance is the way to make 
sure we can farm another day.
    We also need to make sure that crop insurance kind of 
platform is available to all farmers, regardless of what they 
grow and where they grow it and how they grow it. So, we are 
looking forward to using some of the pilot that we are finding 
out about right now and also with the PACE Program, which is a 
split-application of nitrogen opportunity, a brainchild of 
Ellen Eichhorn, and just see where we can go with that.
    Ms. Pingree. Great. Well, thank you so much. I appreciate 
the work you have been doing, and your representation of 
farmers.
    I think I only have 20 seconds left, so I will yield back 
my time and submit my other questions for the record. But thank 
you to all the panelists. You have been very helpful, and we 
really appreciate you all presenting your side today. Thanks so 
much. I yield back.
    The Chairman. Thank you, Ms. Pingree.
    The gentleman from South Dakota, Mr. Johnson, is recognized 
for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman, and I want to pick up 
or add on to the conversations that Ms. Kuster had started on 
forest products and good forests.
    I will start with Senator Heitkamp and then maybe if we 
have time left over, I might have some questions for Dr. 
Humiston.
    But Senator, you talked in your testimony a lot about the 
power of production agriculture to help with some of these 
things, but I noticed your organization title also has forest 
in its name. And so, talk to us about the role that forests, 
and particularly forest products, can play in gathering up this 
carbon, sinking it, holding on to it for a long time.
    Ms. Heitkamp. What better way to sink carbon than to keep 
it in the wood, right? I mean, we recognize that forests can be 
such a big part of this.
    I want to just talk a little bit about what concerned our 
Committee and our bipartisan effort. Number one, forest fires, 
and there was a lot of discussion about USDA programs building 
greater resiliency so that we don't basically lose the carbon 
sink in a forest fire. And so, we want to modernize seed 
collection and tree nurseries. We want to implement an all of 
government approach. I think that was one of the concerns, and 
also, working with state governments. You heard New Hampshire, 
Maine is a huge forestry state, Georgia. Our states, not so 
much, as you know, although you have the Black Hills. You know, 
and I think the cross-boned re-initiatives to improve health 
and carbon sequestration potential of rangelands, and so, there 
is a whole ecosystem that we talked about.
    One of the things that we did, pretty effectively, was sit 
down and say if we are going to--and we haven't talked a lot 
about it here today--but if we are going to sell carbon 
credits, how do we guarantee that those are real? And 
certainly, the forestry industry today is on the leading edge 
of carbon credits and making sure that we are doing the 
research and giving the certainty on carbon credits that can be 
bought on the market where we actually see a climate result. 
And people--I mean, we heard from very large folks who would 
buy a lot of credits if they were sure that these credits would 
be, in fact, legitimate in terms of carbon capture. We think 
that the early adopters are going to be in forestry, and so, 
there are a lot of real opportunities out there to have those 
conversations. And the American forestry industry, whether it 
is people who provide basically work on public lands or those 
who have their own private lands, stand ready to do this, and 
that is the exciting part is everybody is in on it.
    Mr. Johnson. You are right about so much of that, Senator, 
as well as the point that the Black Hills has so many trees. 
But don't sell North Dakota short. I have seen the trees in 
Medora and they are both beautiful.
    So, you talk about the--I think you talk about the health 
of the forest. I think that is good, but talk to me 
specifically about forest products, because we are losing so 
much of that forest products industry in this country, and I 
think that can be the real value add, because not only do you 
take the long life of these trees, but you extend the ability 
of that wood to hold carbon when you have them in telephone 
poles, as you mentioned, and chairs and tables.
    I mean, what role does the forest products industry play?
    Ms. Heitkamp. Huge, and you have already heard it from the 
California perspective. The important part of it as we were 
talking about biomass as an energy producer, but how about 
advanced manufacturing and making sure that those forest 
products are actually being utilized and used to produce 
furniture or used to produce building materials right here in 
this country. I think I would defer this question to our great 
colleague from California. They are doing some amazing research 
there, and I think her testimony really spoke to this already, 
Congressman.
    Mr. Johnson. Yes, great. Let's do that, Senator. I have 45 
seconds left, Doc. Talk to me about any research that is being 
done at the University of California on innovation in the wood 
products and forest products industry.
    Dr. Humiston. So, many of the engineering schools have 
departments of material science that are doing a great deal of 
work finding all kinds of new uses for biomass of all sorts.
    I have to say, basically anything that is made from fossil 
fuel can be made from renewable biomass, and as we start moving 
towards that bioeconomy, we are going to create new profit 
centers for our farmers, our foresters, and even more 
importantly, perhaps, our rural communities, most of which have 
not really recovered from the 2008 Great Recession. And this is 
a huge opportunity we would be foolish to ignore and not 
pursue.
    Mr. Johnson. I wish we could go deeper, but I am out of 
time. Thank you very much, and I yield back, sir.
    The Chairman. Thank you.
    The gentleman from Arizona, Mr. O'Halleran, is recognized 
for 5 minutes.
    Mr. O'Halleran. Thank you, Mr. Chairman and Ranking Member, 
for organizing this important hearing.
    Arizona has been hit particularly hard by climate change. 
We are in the midst of an extreme drought that has been worse 
since 1,200 years ago, according to a lot of scientists. On top 
of this, the decades of outdated wildfire practices have led to 
a concentrated, dense forest that have left much of northern 
Arizona. I have all or parts of the six National Forests in 
Arizona, along with the Grand Canyon, so I have watched as 
Arizona's wildfire season has started earlier and earlier each 
year.
    I am happy to see an increased focus on fire prevention, 
but our current mitigation efforts can only go so far. The 
Infrastructure Investment and Jobs Act (Pub. L. 117-58) 
accounted for $6 billion for forestry programs, and I am 
encouraged by Secretary Vilsack's recent announcement in 
Arizona to use some of the funds to implement a 10 year 
strategy to confront the wildfire crisis.
    Dr. Humiston, thank you for your testimony. Fire and 
drought are major concerns of many Arizonans and Americans, 
particularly those in northern and eastern Arizona. More fire 
severe and drought severe conditions are clearly linked to 
climate change. Can you speak to how the farm bill can support 
a collaborative, economically sustainable approach to 
addressing these concerns?
    Dr. Humiston. Thank you for the question.
    There are several ways the farm bill can assist with this. 
One is to just make sure that our U.S. Forest Service has the 
ability and expanded ability to enter into long-term master 
stewardship agreements with local government and economic 
development organizations to make use of that biomass, and that 
we keep pursuing the technologies to enable us to both get that 
biomass out of forests without causing environmental 
degradation--and we can do that. We are finding the tools; we 
are finding the methodologies. But then also look to entities 
like our Rural Development and their ability to finance some of 
that supply chain and infrastructure and manufacturing base 
that we need to make good use of that biomass. That is just a 
few examples, but there are many, many more.
    Mr. O'Halleran. Thank you.
    During the last farm bill, we did try to address the 
extension of contracts and also some of the other partnerships. 
We have to go further this time.
    Senator----
    Dr. Humiston. Could I add one more thing? I am sorry.
    Mr. O'Halleran. Sure, you can.
    Dr. Humiston. I am so sorry.
    I forgot to mention that one of the things we are doing 
that I think is going to be of critical importance moving 
forward is we are making use of our cooperative extension 
advisors in new and different ways to help facilitate that 
organizational need to build those supply chains and help stand 
up that manufacturing base and work with our local communities. 
All too often, our small rural communities don't have the 
capacity or the people to try to undertake such big projects, 
such construction and development projects, and that is what 
rural cooperative extension is perfect for. We are placing new 
advisors throughout California to do exactly that right now.
    Mr. O'Halleran. Thank you, and I agree with that thought 
process.
    Senator, the USDA's Natural Resources Conservation Service 
programs have a record of success in advancing conservation, 
forestry, and renewable energy efforts to achieve positive 
climate and economic outcomes. However, as we work towards an 
effective farm bill, we must take a critical approach to these 
programs and adapt them to effectively address present day 
issues.
    How can we improve USDA's NRCS programs, and do you believe 
that these are changes that would make the NRCS programs easier 
for historically underserved producers to use, and what about 
the Native American producers in particular? Thank you, 
Senator.
    Ms. Heitkamp. I know that I keep coming back to this, but 
it is about workforce. And when I was in the Senate, I was 
Ranking Member on a committee that looked at the retiring 
workforce. We have to build workforce. We have to deploy 
workforce, and we have to deploy workforce where we haven't 
before.
    We have the technologies. We had a whole committee of soil 
scientists talking about do soils actually embed carbon, and 
yes, we can do all of this. But, if we don't get people to 
adopt the practices that are being recommended through NRCS, 
and how we do that is we get workforce on the ground. And so, I 
would say find a collaboration with Tribal colleges. I know you 
have some great Tribal colleges in Arizona. They are reaching 
out to your land-grant colleges. Make those collaborations, 
incentivize outreach to traditional African American schools, 
and get the workforce on the ground. People will do it if they 
know how to do it.
    The Chairman. The gentleman from Indiana, Mr. Baird, is now 
recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman and Ranking Member 
Thompson, for having this important hearing. I really always 
appreciate you having such knowledgeable witnesses on our 
panel.
    But, I think we are all concerned about the Ukraine. We 
also have tremendous respect for their extraordinary courage to 
defend their homeland. And having said that, our hearts go out 
to what is taking place in that country.
    I think we are also concerned, as many of my colleagues 
have mentioned, about the impact that the current economic 
situation is having on our agricultural industry, and we need 
to recognize that as we move forward with our farm bill.
    I have also appreciated hearing many of the witnesses 
indicate today that agriculture can play a major role in this 
climate mitigation kind of work, and I think that is exciting 
for agriculture. Cover crops, no-till, forestry management, all 
of those are tools that the farmers and ranchers have been 
using and can use in the future.
    Another area of interest to me is in the livestock area 
whereby you can use feed ingredients to reduce enteric 
emissions from cattle, for example, methane, the gas release 
and so on. So, I think we need a pathway through the system to 
approve products like that, maybe through USDA rather than FDA 
so that it is not considered an antibiotic or something like 
that, but rather a feed ingredient.
    But having said all of that, I really see biotechnology as 
a major factor in what happens in agriculture as we try to 
produce the food and fiber for our ever-increasingly hungry 
world. So, I am just going to throw out one example when I am 
trying to talk about biotechnology. Genetically engineered 
nitrogen-fixing bacteria can be used as a biofertilizer, and it 
really enhances a plant's ability to take up nutrients and so 
on.
    So, my questions are going to be to Mr. Conner and to Ms. 
Duncanson. So, Mr. Conner, would you care to elaborate on the 
importance of biotechnology and research and so on as we move 
forward in agriculture?
    Mr. Conner. Congressman, thank you for the question, and I 
will say I think it is fundamental. We focused a lot on this 
hearing on Title II provisions in the farm bill, which are the 
conservation provisions, and they are very, very important. But 
one of the things that the Food and Ag Climate Alliance will 
also be focusing on is many of our recommendations are in the 
research and development area. We do believe that if we are 
going to meet the challenges that we have in front of us with 
the criteria that we have laid out in terms of helping 
producers, that technology and research are going to be key to 
that, and we do look forward to working with this Committee in 
the research title of the farm bill, as well, in making sure 
that we are on the right path to meet our objectives, which is 
at the end of the day, do good by the American farmer and do 
good by the food security that we enjoy in this country.
    Mr. Baird. Thank you.
    Ms. Duncanson?
    Ms. Duncanson. Yes, thank you very much for that question, 
and just to echo upon what Mr. Conner said earlier, we are very 
pro-biotechnology, especially when we look at some of these 
opportunities with new microbiomes and products on our 
landscape here at our farm, Highland Family Farms. We have run 
many pilots and many tests. Some of those products we have 
adopted. Some of them are not within our budget, but they will 
get better over time.
    Research is an important component of moving American 
agriculture forward, and forestry. I mentioned in my testimony 
that we are also converting some acres to organic production. 
There is research to be done in that realm, too, as we look at 
the resiliency and eliminating and reducing risk on all facets 
of what we do here.
    So, we look forward to all the new programs that are 
available to us, but we also are very dependent on our land-
grants to do some research at their facilities with scientists 
and move science forward too at the same time.
    I appreciate the comments, and I would just like to end by 
saying I have appreciated everything that everyone has brought 
up here today. It is overwhelming right now for American 
agriculture as we look at the challenges that face us. We are a 
resilient bunch. No matter what we do on the landscape, we will 
continue to look for good partners, look for good advice, 
technical assistance, government programs, private industry 
ideas to continue to move forward, and will hope to adopt those 
into the new farm bill.
    Mr. Baird. We are an optimistic group. We always have been, 
so thank you for those answers. Thank you very much, 
witnesses.----
    Ms. Duncanson. That is----
    Mr. Baird. I am not sure, Mr. Chairman, how much time I 
have left, but if any of the other witnesses would like to 
comment----
    The Chairman. Your time has expired, unfortunately.*
---------------------------------------------------------------------------
    * Editor's note: the responses to the information referred to are 
located: for Ms. Heitkamp, on p. 332; Ms. Raygoza, on p. 333; Dr. 
Humiston, on p. 334; and Dr. Outlaw, on p. 334.
---------------------------------------------------------------------------
    The gentleman from California, Mr. Carbajal, is now 
recognized for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chairman, and thank you to all 
the witnesses for taking time to testify before our Committee 
today on these important issues.
    Like many areas of California, my district produces 
wonderful agriculture products, including the best, bar none, 
strawberries in the country, wine grapes, broccoli, avocados, 
and much, much more. I am proud of the contributions 
California's 24th District makes to our nation's food supply 
and the economy. Like many areas of California, my district 
also knows the consequences of climate change all too well, as 
we have experienced devastating fires and prolonged drought. 
California has long been the country's top agricultural state. 
Let me repeat that: top agricultural state, and leading the 
fight against climate change. This is in part because of the 
research funded by the farm bill programs, and by our terrific 
universities like Cal Poly San Luis Obispo, and the University 
of California system, who has an institution in my district.
    Dr. Humiston, can you elaborate on some of the ways that UC 
cooperative extension can help with wildfire prevention and 
research? I know you touched on this a little bit, but if you 
could elaborate a little bit more it would be great. And as we 
look towards drafting a farm bill in 2023, what are some of the 
USDA's programs Congress can improve to better assist with 
wildfire prevention and recovery?
    Dr. Humiston. Thank you for the question.
    Cooperative extension is deeply engaged in several 
different activities around wildfire risk reduction and also 
forest health. For example, we have coordinated local 
communities and homeowner's associations to create controlled 
burn associations where we provide training and actually 
organize controlled burns that help remove that excessive fuel 
load and keep the forest healthy.
    We also have our master gardeners program increasingly 
working with homeowners on how to make their house fire-wise, 
improving their landscaping plants to be less prone to fire, 
giving defensible space, hardening where necessary, and really 
reducing that risk, which is huge. And as you know in 
California, and many of the western states and elsewhere, where 
winds can blow embers from a fire \1/2\ mile to a mile ahead, 
you have really got to do that defensible home hardening to 
protect our homes.
    There are several other farm bill programs that are 
critical to helping us with this. I mentioned earlier the 
biobased products, so I won't do that again. But there are many 
programs there, and I will say one other item that hasn't been 
mentioned yet, not specific to fire, but drought which you 
brought up is the need to make sure we have adequate water 
resources for irrigation for our farmers to grow those crops 
that you named.
    One thing that I personally would love to see would be some 
loosening of the language around Rural Development's ability to 
do piping from wastewater treatment facilities out to 
irrigation water sources. That is such an obvious win/win 
between urban and rural and our farmers, and yet right now, the 
language doesn't really allow that itself, as well as the 
population limits make it impossible to do that kind of 
infrastructure, even though it would serve our communities and 
our farmers very much.
    Mr. Carbajal. Thank you.
    Dr. Humiston, in your testimony you mentioned that drought 
and heat tolerant crop varieties are being developed. Can you 
speak to the impact this could have on water conservation 
efforts in California, and the role farm bill programs played 
in this research?
    Dr. Humiston. Yes, absolutely. I mentioned the need to 
develop new crop varieties, and this is critical. We are seeing 
our ecosystems actually move around. Obviously a little bit to 
the north as different sectors of the state warm up, and again, 
this isn't just California. But finding those crop varieties 
that maybe have a shorter growing season, are able to grow with 
less water, and the ability to perhaps use saltier soils are 
all critical to be able to keep productivity up.
    The other item that is really exciting is the ability to 
really use data to help us with managing this type of 
productivity. We have created a software system called Crop 
Manage, some of our cooperative extension folks over on the 
coast, that actually allows farmers who utilize it to reduce 
their need for water and nitrogen fertilizer as much as 40 
percent and still maintain the same levels of productivity on 
many specialty crops. We are working to expand that to 
additional crops as we speak.
    Mr. Carbajal. Thank you.
    Ms. Raygoza, I don't know if I have enough time, but I 
agree with you that young farmers are the future. I want to 
help support these young, aspiring farmers succeed and produce 
food for our country. Do you think some type of workforce 
development partnership between USDA and community colleges 
would be useful to teach young farmers how to navigate USDA 
resources and learn about climate practices?
    The Chairman. The gentleman's time has expired, but you may 
respond in writing to him. Thank you.
    [The information referred to is located on p. 333.]
    Mr. Carbajal. Thank you.
    The Chairman. The gentleman from Ohio, Mr. Balderson, is 
now recognized for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman, for the time. Thank 
you to the panel for being here.
    Senator, it is nice to actually get to ask you a question. 
I enjoy your time on Squawk Box, so it is actually good to see 
you here. So, thank you.
    Ohio runs a soil and water management program called H2Ohio 
that is showing some promise in lessening runoff from farm 
fields into rivers and streams, and provides farmers with 
financial incentives. It is interesting to me that farmers are 
being paid different prices for these programs. For example, if 
a farmer has a nutrient management plan, they receive $2 per 
acre. If a farmer uses variable rate fertilization, they 
receive $8 per acre. Combining practices can pay farmers up to 
$30 per acre. I am curious if any of our panelists today know 
about what type of price discovery is occurring in these new 
carbon markets, and how these prices paid to farmers are 
determined? To follow up with that, perhaps we can start with 
you, Dr. Outlaw, which is a great name, since you have a 
background in agricultural economics.
    Dr. Outlaw. Right. At this point, there isn't very much 
transparency in how those prices have been determined. I 
wouldn't consider there to be a working market right now for 
carbon. Maybe--you don't really have a market when you don't 
know how the prices are being determined, plain and simple.
    Mr. Conner. I would just say, Congressman, I think we are 
all in total agreement on that, including our own Secretary of 
Agriculture, and that is part of the reason the programs that 
he has put forward and recently announced is really sort of a 
discovery, if you will, type of program designed to create the 
data and the information that are going to be necessary to 
overcome some of these carbon market issues, including 
transparency that we have talked about. And we do commend the 
Secretary for recognizing that this is not just full speed 
ahead, that we do need to collect a lot of information here in 
the process before jumping into this thing with both feet, and 
in our view, he has done that with his announcement last week.
    Mr. Balderson. Okay, thank you. Would anybody else like to 
add? Okay.
    Ms. Duncanson. I just would like to add, if I could, 
please, that sometimes you have to go slow to go fast. So, if 
we have some programs out there that will figure out some ways 
to pay producers on any size or scale for doing a practice and 
get them into the groove of doing that, that is helpful. But we 
have to have good data to make sure what we are doing is being 
impactful. So, the data here again, data collection and 
analysis becomes really important to how we move forward.
    Dr. Humiston. If I could add to that, too. All the comments 
thus far are right on. I would say that we are doing a lot of 
work not only around the idea of carbon markets, but ecosystem 
services which I mentioned in my testimony.
    Our farmers and foresters and natural resource managers 
produce a lot of ecosystem services that the general public 
enjoys and doesn't pay a dime for. And if we can start finding 
the framework to start compensating for some of those ecosystem 
services, many of which are climate-smart practices, that too 
will help us move all of these issues forward in a more 
positive direction.
    Mr. Balderson. Okay, thank you.
    My next question, while the Biden Administration and 
Beltway think tanks continue to push a climate agenda based 
around new and untested programs, I am interested in working on 
climate solutions that will work for our farmers. When I hear 
from farmers about climate solutions, they talk about the need 
for more research, more boots on the ground support, access to 
precision agriculture technology, and the need for broadband 
connectivity to support this technology. To me, this all sounds 
like assistance that is available within current farm bill 
programs. Is the solution as simple as doubling down on these 
proven programs? And anyone from the panel can answer.
    Mr. Conner. I would just respond to that by saying I think 
part of the solution certainly is the existing framework that 
we have in place. That framework has corrected a lot of 
environmental problems for American agriculture through the 
years, whether it is erosion, water quality, wetlands, those 
kinds of things, and so, we are building off of that to move 
forward with what we are calling climate-smart agriculture. It 
is not 100 percent of the solution, but it is a big part of it, 
and we believe that the mechanisms are in place to really go 
down that pathway aggressively.
    Dr. Humiston. I would add, we need to not reinvent the 
wheel. We have some great programs, many of which need 
increased funding because the needs have grown. But I would 
also say that we need to really pursue interagency 
collaborations and making sure we are leveraging those programs 
amongst the different agencies far more than we currently do.
    Mr. Balderson. Thank you all very much. My time has 
expired. Mr. Chairman, thank you.
    The Chairman. The gentlewoman from Iowa, Mrs. Axne, is now 
recognized for 5 minutes.
    Mrs. Axne. Thank you, Chairman Scott, and thank you to all 
the witnesses for being here. It is very much appreciated. 
Hello, Senator Heitkamp, very nice to see you again, and all 
the other folks that are here.
    This is a great topic, one of extreme interest to me. As 
this Committee continues its work on reviewing the 2018 Farm 
Bill in preparation for next year, it is clear to me that we 
need strong investment in conservation and renewable energy in 
order to meet the ever-increasing challenge of climate change. 
We know that our family farmers are on the front-lines of 
climate change and have seen firsthand the devastating impact 
that volatile and devastating weather. Boy, I know that in 
Iowa. We just had another tornado unfortunately go through our 
state.
    But our family farmers are also a key part of the solution, 
and they have been champions of conservation and stewards of 
their land for generations. And as we learn more about climate 
change, it is critical that we equip our farmers with all the 
tools and resources and voluntary incentives that we can do to 
make sure that they meet those challenges.
    The success of the biofuels industry is a great example of 
this, and from 2008 to 2020, the Renewable Fuel Standard 
resulted in the reduction of nearly 1 billion metric tons of 
greenhouse gas emissions from our transportation sector through 
the use of biofuels blends. In fact, biofuel production is on 
track to hit net-zero carbon emissions in the coming decades, 
all while being significantly cheaper at the pump than fossil 
fuels.
    So, over this last year, I have been focused on expanding 
access to higher blends of ethanol as a way to reduce our 
emissions and to provide a more affordable option for our 
consumers. The legislation I have would build upon USDA's 
successful Higher Blends Infrastructure Incentive Program and 
ensure more fuel retailers can provide E15 at higher blends of 
ethanol, giving consumers access to, of course, more 
affordable, cleaner, and domestic source of fuel. And so, while 
my legislation passed the House last year, I was disappointed 
to see it stall in the Senate.
    So, to you, Senator Heitkamp, I know you were heavily 
involved in biofuels policy when you served your great State of 
North Dakota. What role do you see biofuels playing in 
combating the climate crisis, and what suggestions do you have 
for Congress and for the Senate and for the Administration as a 
whole when looking at biofuels policy?
    I think you are still muted.
    Ms. Heitkamp. My first suggestion is follow the law, and a 
previous speaker talked about this Administration. We had this 
problem in the Obama Administration with blend walls. We had 
this problem in the past Administration with waivers, and now 
we are still experiencing this problem. We have to give the 
industry certainty. But in addition to the work that you are 
doing, I am proud of the role that I played in passing section 
45Q, which is a tax credit which the ethanol industry is going 
to use, not only to continue their great work in terms of 
climate, but to also sequester the CO2 from their 
processes.
    And so, we know that this is an industry that will adapt 
when given the certainty of market, and so the single most 
important thing that you can do, follow the law. Give them 
certainty to market. Set some goals that I know they can 
achieve, whether it is by doing the practices they are doing 
right now, or carbon capture. And so, I am really excited about 
the future of this industry, but [inaudible].
    Mrs. Axne. Thank you. I--you cut out a bit here, but I 
think you completed your answer. Thank you, Senator Heitkamp. I 
appreciate that.
    I want to turn to cover crops real quickly here. Last 
summer, the USDA announced the availability of the Pandemic 
Cover Crop Program, obviously to help our producers offset the 
costs associated with cover crops and providing a discount on 
their crop insurance premiums.
    Ms. Duncanson, thanks again for joining us here today and 
sharing your expertise. Can you tell me what level of interest 
you have seen from producers regarding cover cropping, or 
specifically the Pandemic Cover Crop Program, and what 
suggestions you have to improve it or other ways to incentivize 
more cover crops?
    Ms. Duncanson. Thank you for that question. Yes, I 
appreciate being asked it.
    There aren't as many people involved in cover crops as I 
wish, but that is coming along. As I mentioned earlier, 
sometimes you have to go slow to go fast, which means giving 
those incentives and making it easy to apply. Just yesterday, 
our family finished applying through FSA for the Cover Crop 
Program and we will utilize that as we pay for seed to expand 
cover crops throughout our operation. When I inquired at our 
FSA office, they said that about 30 percent of the folks that 
are serviced had applied for cover crops, and I see them as I 
travel the country. I see different cover crops becoming used 
more rapidly around the country, but here again, we are talking 
about technical assistance to get information and good data 
about----
    The Chairman. The gentlelady's time has expired, 
unfortunately.
    The gentleman from Kansas, Mr. Mann, is recognized for 5 
minutes.
    Mr. Mann. Thank you, Mr. Chairman, and thank you all for 
being here this morning and participating in today's hearing.
    Farm bill conservation programs, as we all know, have 
generally generated wide bipartisan support in Congress, and 
wide adoption amongst farmers and ranchers. The extensive 
participation in conservation programs, I believe, comes from 
the flexibility for individualized operations, incentives for 
locally-led and voluntary efforts, and coordination with state 
technical committees.
    In regards to climate specifically, I think it is important 
and my priorities would be to make sure that whatever you do is 
producer-focused, voluntary, not at the expense of other 
programs, and also make sure that we don't penalize our early 
adopters and things that are already happening.
    To that effect, I guess my first question would be to you, 
Mr. Conner. For decades producers across the big 1st District, 
my district in Kansas, and the country have taken advantage of 
incentive-based programs by voluntarily making changes on their 
farms and ranches to be efficient stewards of their resources. 
Recently, I am starting to hear a lot from producers that have 
been implementing no-till practices for decades, but they would 
not qualify to participate in carbon market programs because 
their practice is not considered new. In some cases, these 
producers were told that they would need to farm conventionally 
for two growing seasons just to qualify for carbon market 
programs.
    Can you expand on the importance of voluntary conservation 
efforts and discuss why it is important for Congress to make 
sure that we don't hinder or penalize early adopters?
    Mr. Conner. It is a great question, Congressman, and let me 
just say that the importance of these programs is really top 
line, and not only because they have been effective in the 
past, and as I noted earlier, these programs have solved many 
of the challenges that we have faced in American agriculture 
before, and done so in a way that, again, has been income 
enhancing. And that is the bottom line in terms of our 
recommendations, and we believe that that can be done here.
    For the early adopters, this is something the Food and Ag 
Climate Alliance struggled with. I will just tell you that we 
ended up with a recommendation that simply suggested that there 
be a one-time payment in addition to what other subsequent 
payments may be coming down the pike, a one-time payment to 
those early adopters to compensate them for the work that they 
have done on their farms, and certainly not to penalize. And I 
would even add a worst-case scenario where they might tear up 
conservation practices only to be able to collect for the new 
ones. And obviously, that is just borderline stupidity to have 
that kind of policy in place.
    So, we struggled with it. We came up with a recommendation, 
but it is certainly an area in the farm bill where we want to 
work with this Committee to develop what is the appropriate 
compensation for those early adopters, because they need it and 
should get it.
    Mr. Mann. No, I appreciate that and appreciate how 
producer-focused your organization and group is on these 
issues. I wholeheartedly agree.
    One last question will be for Dr. Outlaw. One of my top 
priorities in my role on this Committee is protecting crop 
insurance. It is absolutely vital to our ag producers all over 
my district, all over the country. We want to make sure that we 
protect crop insurance so that producers can sustain their 
operations year after year, even in the face of uncertain 
weather.
    My question is what do you consider the role of crop 
insurance to be when dealing with uncertain or extreme weather 
events, and how should crop insurance enter into the overall 
conversation we are having about climate practices?
    Dr. Outlaw. Well, I think it is very involved. The local 
weather patterns have helped define a farmer's APH, which helps 
define their coverage, and so, crop insurance and conservation 
programs go hand in hand.
    The issue I have, and what I testified to was that trying 
to link those together, in my opinion, is not a good idea 
primarily because you can always create winners and losers with 
programs, as an example, if producers in your state are not 
able to take advantage of some of these programs, then they 
wouldn't get the premium discounts that some other folks are 
suggesting would be out there. So, I suggested in my testimony 
that people need to pay really close attention to try to link 
these programs together.
    There are many programs and many outlets through USDA to 
get money to producers to do climate friendly practices, 
climate-smart practices. It doesn't have to be tied to crop 
insurance.
    Mr. Mann. Very good. Thank you all. My time is expiring, 
and with that, I yield back.
    Thanks, Mr. Chairman.
    The Chairman. Thank you.
    The gentleman from Illinois, Mr. Rush, is now recognized 
for 5 minutes.
    Mr. Rush. I certainly want to thank you, Mr. Chairman, and 
this has been quite a hearing, and I really want to thank the 
witnesses for appearing before us today.
    I don't see Senator Heitkamp on.
    Ms. Heitkamp. I think--I am here. You have lost my video, 
but I can hear you and I can answer.
    Mr. Rush. Okay.
    Well, thank you so much, Senator.
    Senator, I have a question for you. In your testimony, you 
discuss ensuring land access, especially for new and small and 
historically underserved landowners and producers. This is an 
issue that I have been working on for quite a while now, and it 
is an issue that really connects with me personally. My 
grandfather owned a farm in Norton County, Georgia, southwest 
Georgia, and it was my family farm. And my father, to his dying 
day, always wanted to try to figure out what happened to the 
farm and how we could reclaim the farm.
    That is the plight that is shared with a number of African 
American descendants of farmers to our land. And so, can you 
expound, if you will, on what new Federal incentives could 
address the financial, legal, and social obstacles that 
currently limit access to affordable farmland, specifically? 
And in general, is there any ideas or suggestions you may have 
that could give some relief, some advice, some help to 
individuals who may want to question the loss of their family 
farmland, and some of the impediments that heirs property 
rights have caused for African American farmers specifically, 
and other farmers in general?
    The next part of my question is how can urban farming play 
a role in increasing access to land and/or enacting good 
climate policy? So, that is a lot, Senator, but you are 
capable. Please.
    Ms. Heitkamp. Yes, that might be beyond my pay grade, but I 
am going to suggest to all of you that one of the looming 
crises in America is land ownership and absentee land 
ownership. Even in a state like North Dakota, over only 25 
percent of the land that large farmers farm is actually owned 
by the farmer themselves, and so, we have a situation where we 
have land ownership by people who are not actually producing, 
who are not--I mean, they are making money obviously from 
rents. And so, once that land becomes available, it is 
incredibly difficult for small family farmers or for people who 
want to reestablish or expand their farm to actually be able to 
afford it. If we want to keep a culture of family farming in 
this country, we have to look at land ownership. And if we want 
to rectify past wrongs that have been done, we have to look at 
that chain of title. We have to look at kind of this from the 
standpoint of people who, quite honestly, lost their land 
inappropriately, who had it taken from them, or who now have it 
tied up in land trusts and they are unable to access the asset.
    And so, this land ownership goes beyond what you, 
Congressman Rush, what you have identified, but it is 
absolutely one of those heads-up to what is coming at us in the 
future. We have to fix past wrongs, but we also have to look at 
the challenges that land ownership will present to making sure 
that we are producing enough food to feed our country and feed 
the world, because it will restrict us in terms of access to 
that asset for agricultural production.
    Mr. Rush. Thank you, Senator.
    The Chairman. You are absolutely right, Senator.
    Thank you, Congressman Rush.
    Mr. Rush. Thank you.
    The Chairman. The gentleman from Iowa, Mr. Feenstra, is now 
recognized for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Scott and Ranking Member 
Thompson.
    I am proud of our farmers and producers in my district who 
are leading the way in farming practices that result in 
productive harvests and clean environment. For years, the 
agriculture industry has implemented practices that reduce 
emissions, enrich the soil, and protect our natural resources. 
These practices have improved our quality of life by allowing 
farmers to produce more food, fiber, and fuel for all of us.
    Iowa's 4th District leads the nation in ethanol and 
biofuels production. In addition to great economic benefits, 
USDA reports that the greenhouse gas emissions associated with 
corn ethanol are 43 percent lower than gasoline. Similarly, 
biodiesel and renewable diesel are 74 percent less carbon 
intensive than petroleum fuels. Programs under Title IX of the 
2018 Farm Bill have bolstered renewable energy production in 
the United States. For example, the Biofuels Education Program 
has stimulated both consumption and investment in biodiesel 
through education efforts. Funding offered through these 
programs have been leveraged to promote biodiesel 
sustainability benefits, provide technical assistance to 
equipment manufacturers, and develop fuel quality assurance 
programs.
    Another program of Title IX, the Advanced Biofuel Payment 
Program, has provided mandatory funding through the 2018 Farm 
Bill. The program provides assistance to small fuel producers 
looking to create long-term increases in biofuel production.
    Senator Heitkamp, how has the Title IX of the farm bill 
advanced cleaner burning domestic energy production that 
benefits farmers and the environment?
    Ms. Heitkamp. I would like to just repeat back to you, 
Congressman, what you just said. When you look at the actual 
reductions, you look at the opportunity, and I want to--I don't 
know if you guys could hear me when I was responding, but when 
we look at what the Iowa ethanol industry is doing and what 
South Dakota is doing and North Dakota is doing, they are 
looking at carbon capture to actually even expand on those 
numbers. Carbon capture behind the process which can even 
reduce their greenhouse impact greater. And so, I think that 
when [inaudible] access to the market by limiting 
infrastructure, or people who just don't like corn ethanol. 
[inaudible].
    The Chairman. Senator, we are having a little more 
difficulty, but you can respond to that in writing.
    [The information referred to is located on p. 332.]
    Mr. Feenstra. And I will resume. I just appreciate what 
Senator Heitkamp is saying, and it is just amazing to hear the 
positive reinforcement that is being talked about in this 
Committee hearing when it come to biofuels, ethanol, biodiesel, 
and so forth.
    And yet, what is shocking to me is never once have we heard 
from the Administration, and this is so concerning right now 
when we are at such a precipice with our country that we are 
desperately trying to find energy and fuel. And yet, not one 
word, crickets. And I am so disappointed in that, just really 
disappointed.
    The 2018 Farm Bill authorized the Soil Health and Income 
Protection Pilot Program, called SHIPP, a voluntary program 
that allowed short-term contracts for producers to target 
marginal acres in the field. This is a really great program. 
Dr. Humiston, how has this program empowered producers to adopt 
conservation practices, and do you agree with locally-led 
programs like SHIPP to target these certain areas?
    Dr. Humiston. Thank you for the question.
    Yes, I absolutely agree with locally-led programs. I served 
as a director on a soil and water conservation district myself 
in California for many years, and it is that locally-led 
program that lets us make sure that practices are specific to 
the soil, the climate, the ecosystems that our farmers are 
operating in.
    As to the short-term program you mentioned, it is a 
critical opportunity to allow farmers to implement practices 
that they might not otherwise be able to afford. As we all 
know, agriculture is challenging to pencil out under the best 
of circumstances, let alone some of the circumstances we have 
now, so that type of program is exactly what we need, 
particularly for some of our small and beginning farmers, too.
    Mr. Feenstra. Absolutely. Thanks for your comments, and I 
yield back.
    The Chairman. The gentlewoman from Illinois, Mrs. Bustos, 
who is also Chair of the Subcommittee on General Farm 
Commodities and Risk Management, is now recognized for 5 
minutes.
    Mrs. Bustos. Thank you so much, Mr. Chairman, and really, I 
want to say thank you for holding this hearing. It is really 
important that we hear from all the witnesses who are with us.
    And I know we have heard a lot today--I had another hearing 
going on. My staff briefed me on the highlights of this. But I 
know we have heard a lot about the importance of crop 
insurance, and the USDA has rolled out some new products in 
recent years that addressed these challenges that we have.
    I want to start out by asking Ms. Duncanson a question. 
Would you please talk about what other new crop insurance 
products or risk management tools might be necessary in order 
to help our producers mitigate the impacts of the climate 
change that we are all experiencing?
    Ms. Duncanson. Thank you very much for that question, and I 
appreciate that.
    Let's keep in mind that we have said time and time again 
here today about the vital importance of crop insurance, and 
with every new project or every new product that comes out of 
that system, it needs to be actuarially sound. And so, anything 
that we introduce, we always want to make sure that test is 
done. All these products are about resiliency and eliminating 
risk, so as we look at good farming practices that are 
established through USDA and new things that are happening out 
on the landscape, we look forward to using the sound advice of 
this Committee, of USDA, of others in private industry, as well 
as the system about how we introduce a program.
    As you may know, the PACE product, which is about split-
application of nitrogen rates, is in its pilot stage throughout 
your state and the University of Illinois is managing part of 
that data collection and analysis for us, and that really looks 
at the opportunity for farmers to split-apply nitrogen when it 
is needed, but it gives the opportunity for an insurance 
program, should you not be able to get the product on in a 
timely fashion. So, we look forward to seeing about the 
adoption of the PACE, and are pleased that we were able to 
provide research for its creation.
    Mrs. Bustos. Thank you, Ms. Duncanson.
    All right. I am going to try to ask Senator Heitkamp a 
question, and we will see if this will work.
    In the most recent report of your Farm and Forest Climate 
Solutions Task Force noted the importance of expanding programs 
that deliver climate benefits and offer pathways to new market 
opportunities for farmers, ranchers, and forestland owners. So, 
just last month, the USDA announced the Partnerships for 
Climate-Smart Commodities, which probably everyone in this room 
knows, is a $1 billion program for pilot projects that create 
new opportunities for climate-smart commodities across the 
value chain.
    So, Senator, hopefully you can hear me and hopefully we can 
hear your answer, but can you expand on what sorts of projects 
that you envision through these partnerships, and how you see 
them impacting rural America?
    Ms. Heitkamp. Well, I am very excited about them, 
Congresswoman. I think that when you look at it, it is going to 
be a community collaboration, so let's look at a corn farmer in 
North Dakota that is growing cover crops that is saying, ``I am 
sequestering CO2. I am doing everything right, but I 
need to have verification.'' And so, they can work with the 
land-grant colleges. They will be able to work with local 
entrepreneurs, tech companies to try and do that verification. 
Because we know without that verification, the new carbon 
markets won't work because people aren't going to buy carbon 
credits that aren't real.
    And so, I really applaud the Secretary. I think--to think 
that you sit in Washington, you can design a program here is 
absolutely [inaudible] to throw out an opportunity, and let us 
in rural America develop the programs, that is where we are 
going to find the solutions. And I think it is a great idea. I 
think it is a great use of resources, and I think you are going 
to see great results.
    Mrs. Bustos. Hear, hear. Great answer. Thank you, Senator. 
It is great to see you.
    I will pass on my next question because I know I can't get 
it answered within the next 40 seconds, so with that, I will 
yield back, and again, Mr. Chairman, thank you so much for 
holding this hearing and thank you to our witnesses.
    The Chairman. And thank you.
    The gentleman from Alabama, Mr. Moore, is now recognized 
for 5 minutes.
    Mr. Moore. Thank you, Mr. Chairman.
    This is a question to all the panelists, and so, anyone can 
feel free to answer this.
    The EPA estimates that the agricultural global greenhouse 
gas contribution was 24 percent for all emissions, over double 
that of the agriculture share in U.S. emissions, which is less 
than ten percent. Why do you all think this is, and also, what 
do you think other nations should be doing to follow the 
leadership of the U.S. agricultural industry? Thank you.
    Mr. Conner. Congressman, there is no question in our mind 
that American agriculture is at the very, very top of its game 
in food production internationally, and we are the cleanest, 
the most advanced, least footprint, and we take great pride in 
that. And I know this Committee takes great pride in that 
designation, and that is so important to us as we talk about 
food is a national security issue, going forward. We are going 
to need to produce a lot of food in this country, and it has to 
be produced obviously in the most sustainable, cleanest way 
possible. And we understand that, and that is why these 
recommendations that everyone is talking about at great length 
are so important, because they are programs designed to come 
along beside farmers and landowners across the country to 
really encourage them to be able to produce. This is all about 
producing food. It is not about holding people back; it is 
about really adding to a growth industry and doing so in a way 
that is responsible. And we are proud of who we represent in 
this industry, and again, I know this Committee is as well.
    Dr. Humiston. I would add to that that it is critically 
important that we ensure our data, our analysis of that data, 
and the results we get from it is accurate. It is based on 
science and real numbers.
    A lot of the numbers that we see on greenhouse emissions 
from agriculture are based on very different formulas of how to 
even calculate that. That is one of the huge issues out there. 
Some of them are based on data that was released by the United 
Nations Food and Ag Organization a decade or so ago that they 
themselves since debunked, and yet, academics and scientists 
and advocates still utilize that false data. I don't pretend to 
have the actual answer because frankly, academics are still 
working on figuring that out, but I do know that if we are 
going to make smart investments in good solutions and keep our 
agriculture going, we have to understand that yes, agriculture 
produces some greenhouse gases. It does. But it also sequesters 
and can be a solution to that, and we have to look at both 
sides of that equation. It is not just one. Frankly, if we were 
to do that type of calculation for every industry sector in 
every aspect of our lives, none of them are going to come out 
well.
    So, we have just got to really think about the data, that 
it is analyzed properly, the science is good, and then use that 
to make the kind of investments that will give us the most bang 
for the buck.
    Mr. Moore. Those are some very good points, and thank you.
    Any idea on how we can bring other nations along? I mean, I 
am always concerned about us penalizing our producers and then 
letting the rest of the world run wild. Do you have suggestions 
on how to bring other people along to join us in this effort?
    Mr. Conner. Again, Congressman, I don't think we are 
talking about penalizing here. The Food and Ag Climate 
Alliance's fundamental principles talk about enhancing farm 
income, enhancing opportunities in rural America, and I think 
this is what we can do for the world. We can be the trailblazer 
here in terms of putting forth policies that help farmers and 
help them to do it the best that they possibly can. I don't 
know of any nation that wants to stomp on the people that are 
producing the food and feeding them. That just runs pretty 
counter to anything good and right in this world. And so, to 
the extent that we can model this, I believe others will 
follow.
    Dr. Humiston. And I would add to that, that it is 
critically important our scientists from every country on the 
planet be able to interact with each other. And yes, I will say 
we need to provide appropriate cybersecurity and secure 
information as needed, but nevertheless, we find solutions here 
that may work for another country. Another country may find a 
solution that is wonderful for us here, and the less we try to 
reinvent the wheel or duplicate something already done, the 
more resources we have to move towards implementing solutions.
    Mr. Moore. Thank you for the answers.
    Mr. Chairman, I am going to yield back my time. Thank you.
    The Chairman. Thank you.
    The gentlewoman from Washington, Ms. Schrier, is now 
recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and welcome to all of 
our witnesses.
    I would just like to touch on a few issues today. First one 
is that I would like to discuss the measuring, monitoring, and 
verification of success of sustainable farming practices and 
forestry practices. And I know that measuring climate benefits 
accurately and cost effectively as a result of changing land 
management practices still remains a challenge. Our ability to 
measure soil carbon sequestration precisely, for example, is 
crucial to set realistic policy goals and design effective 
incentives, but it can also present us with a situation if we 
can't measure it well, finding ourselves in this situation 
where suddenly everything is referred to as climate-friendly or 
clean when we don't have a way to measure, and suddenly the 
designation of clean and climate-friendly just becomes 
meaningless.
    And so, this first question is for Deputy Secretary Conner 
and Senator Heitkamp, for both of you. And my first question is 
kind of part A and part B. (A) is how would you work with 
definitions and measurements to ensure meaningfulness as we 
give these designations; and (B), which USDA programs do you 
suggest Congress expand upon to advance measurement tools and 
technologies of climate benefits for agriculture?
    Senator Heitkamp, we will start with you.
    Ms. Heitkamp. Thanks so much.
    I think it has been pretty clear that I think that we don't 
yet have good measurement tools, and that is why it is 
important that we, number one, continue the research, continue 
the education, because the last thing that we should be doing 
in agriculture is making a claim about climate that is not 
valid. It will set us back in terms of our goal, which is 
really to commoditize that carbon credit and make it an income 
stream for the people who own the land who are producing on the 
land.
    And so, I think there have been a number of carbon markets. 
They have had their difficulties for exactly this reason, and I 
think we are going to have to present solid science.
    Now, with that said, we can't delay this process too long, 
making perfect the enemy of good. We are going to learn as we 
adapt, and so, to me, I think that Secretary Vilsack is trying 
to build out the expertise, but at the end of the day, we need 
authorization from Congress to undergo this work. I think that 
the bill that is crossing over from the Senate was one that I 
would have been proud to advance to all of you. I hope you 
consider it and then advance it, because it will get the 
resources that Secretary Vilsack needs to do this work.
    Ms. Schrier. Thank you.
    Deputy Secretary Conner, do you have about a 30 second 
answer before I go to another----
    Mr. Conner. Yes, I will be very brief. I will just say that 
it is our view that Secretary Vilsack's Partnership for 
Climate-Smart Commodities that was announced really is a 
massive pilot project designed to gather the kind of 
information that you are seeking. I think we are in 100 percent 
agreement with the panel on that. It is a big pilot project 
from all regions. We look forward to the results of that and 
analyzing that information, and I think it will be informative 
in terms of a long-term climate policy then for this country.
    In terms of which USDA programs, I will tell you I think 
this is a collaborative effort across many agencies. We 
acknowledge a role for ARS in terms of data analysis here, 
Agricultural Research Service. But certainly, the technical 
service providers that will be coming online here through NRCS 
are going to be the people with the boots on the ground that 
producers will be interacting with. They will be walking the 
fields, analyzing what works and what doesn't and reporting 
that back, and they are going to be a critical part of that.
    We have to make sure we have the people on the ground.
    Ms. Schrier. I have one more part that I just want to touch 
on really quickly, because we don't always have measurements. 
But I want to highlight a program we have here in Washington 
State called the Sustainable Farms and Fields Program. It is a 
bipartisan voluntary program that supports farmers who are 
implementing practices that we already know work, and it leaves 
out some types of farmers, but it is a way to do this without 
the measurements, and it gives farmers different options for 
participation, like they can use funds for very site-specific 
consultations. They could purchase a seed drill with it, or 
seeds for cover cropping, or even payments for contracted 
carbon storage. And so, I just want to highlight that there are 
programs even in advance of having those perfect measurements 
that can advance these climate goals in addition to the ones 
that you just mentioned.
    Thank you, and I yield back.
    The Chairman. The gentlelady from Florida, Mrs. Cammack, is 
recognized for 5 minutes.
    Mrs. Cammack. Well, thank you, Mr. Chairman. I appreciate 
it. Can you all hear me okay?
    The Chairman. Yes, we can.
    Mrs. Cammack. Excellent, thank you, Mr. Chairman.
    I have to be honest. I am incredibly frustrated. It has 
been about 14, 15 months now since the beginning of the 117th 
Congress, and to date, we have had six, six hearings about 
climate change, and one about production agriculture, one. Like 
I said, I am very frustrated. I represent an area that is home 
to producers, and as the lone Republican for the State of 
Florida on the House Agriculture Committee, this issue is 
incredibly vital to my state. We are a top ten producer of 
agriculture products in the country, and to say that this 
hearing is redundant is putting it nicely. It really does 
betray the really serious, dire needs of our producers that 
they are facing right now with fuel, input costs through the 
roof, labor concerns, taxes, regulations, red tape. You can't 
even begin to understand the frustration of our producers, 
because we haven't brought them before the Committee. We 
haven't had these conversations. And if you ask any of my 
producers in Florida whether the pressing concern for them is 
covering irrigation canals with solar panels or figuring out 
how they are going to afford fertilizer in the coming months, I 
think it is pretty obvious what they are going to choose as the 
issue of concern for them. And the fact that this hearing isn't 
even a review of the farm bill program, as the Majority would 
have us believe, it is instead a wish list of climate change 
priorities. It is a wish list of things that lack practicality. 
And so, I am really, really frustrated.
    And I echo the frustrations of producers not just in 
Florida, but across this country that feel that they are 
screaming at the top of their lungs and it is falling on deaf 
ears in Washington and in the halls of Congress. Again, the 
cost of fuel. Has that been addressed? No. There is no feasible 
plan from this Administration or this Committee to address 
that. The best that has come out is we are going to work to 
make electric vehicles and charging stations happen in rural 
America. Folks, we don't even have broadband. That is a pie in 
the sky idea. While well-intentioned, it misses the mark by a 
mile.
    And I just can't even begin to tell you about the labor 
concerns. Just even 2 weeks ago, having to work to process 
applications for H-2A workers because we had blueberries--it is 
blueberry season in my district--and they have no help in order 
to pick the blueberries. This is a continual issue that we are 
seeing.
    The cost of fertilizer, Mr. Chairman. Alarm bells have been 
ringing. We now have Russia invading Ukraine, and many people 
know that Russia and Belarus are the major supplier of potash. 
And when I speak with our producers, they are facing issues of 
regulatory hurdles here in the country, and then you look to 
our Canadian friends who, when you look at the Canadian Pacific 
Rail Line, they are looking at a strike. What are our producers 
supposed to do in the face of input costs that make doing 
business unreasonable?
    I feel extraordinarily frustrated for our producers because 
this Committee has had opportunity after opportunity to talk 
about these issues that are on the minds and being discussed at 
kitchen tables around this country, and instead, it is being 
neglected for political agenda.
    You talk about the important role of forestry and timber 
and how that plays into carbon capture, but what happens when 
the privately owned and workforce in my district in Florida are 
sold because the cost of labor and fuel and inputs are so high 
it is unsustainable? One forester in my district let me know 
just last week, he has seen $10,000 in increased fuel costs, 
just in fuel costs. He told me that if prices stay this high, 
which, of course, this Administration has indicated that it 
will and they will continue to stay this high, he is going to 
sell his land. Do you really want the next crop to be a 
foundation slab, because it won't be production agriculture. 
And I think there needs to be a come to Jesus discussion in 
this Committee about the future of agriculture, and I am not 
talking about climate change. I am talking about production 
agriculture, and if any person on this call has eaten today, 
you should be concerned about production agriculture in our 
country, which is a national security concern.
    I cannot believe that we are picking and choosing the 
issues that are a national security concern for every American 
regardless of where you live in the country and what box you 
check.
    Mr. Chairman, I apologize. I respect you, but----
    The Chairman. The gentlelady's time has expired.
    The gentleman from California, Mr. Panetta, is now 
recognized for 5 minutes.
    Mr. Panetta. Thank you, Mr. Chairman. I appreciate this 
hearing, and thanks for all of the witnesses and your 
testimony, and of course, all of your work to highlight what I 
do believe is an important issue.
    Also, of course, I want to thank Dr. Humiston for 
everything that she has done for my district on the Central 
Coast of California and for the State of California, the number 
one agricultural producing state.
    Look, I think we can all sympathize and empathize with the 
concerns and frustrations that my colleague from Florida just 
expressed; however, I would disagree with her in the sense that 
this isn't about politics. This really is about policy, 
policies that we are talking about to deal with a very pressing 
issue amongst many that our people in agriculture have to deal 
with. We get that, but this is a time that we can talk about 
what type of policies we can put in place, going forward, into 
the 2023 Farm Bill dealing with climate change and how it 
affects our agricultural producers. Not just in Florida, not 
just in California, but throughout the entire country.
    Now, look, in my district on the Central Coast of 
California, as I always say, we have a lot of bounty, and we 
have a lot of beauty. And with our bounty, we have a number of 
specialty crops. You name it, we grow it. I cannot stress that 
enough, especially in the Salinas, the Pajaro, and the San Juan 
Valleys. When it comes to our beauty, we have a National Park, 
we have a national monument, we got a National Forest, we got a 
national marine sanctuary, for Pete's sake. But that leads to 
my third B, and what that B is, is having a balance. What is 
the type of balance that we need to have to be concerned with 
our environment, but continue to produce the fresh fruits and 
vegetables that my agricultural producers do. It takes a lot of 
work together. It takes a lot of work coming to the table and 
making sure our producers are at the table to talk about the 
protections for agriculture, for ag workers, and yes, even for 
our environment. Because trust me, what I like to remind 
people, if anybody wants fresh air, clean water, and healthy 
soil, it is those that work in agriculture.
    Now, Dr. Humiston, I was lucky to have time with you 
yesterday in my office to have a good conversation. I want to 
focus on something in regards to what you mentioned in your 
introduction about rural designation. Basically talking about 
how that has severely impeded the ability of our communities 
and our farmers and ranchers to benefit from many Federal 
programs, even those programs aimed at strengthening our rural 
communities.
    Briefly, can you discuss further the need to revisit the 
definition of rural and elaborate a little bit on how the 
current definition limits climate-smart investments in rural 
economies that unfortunately don't meet the unrealistic 
criteria that can be imposed on them to meet the designation of 
rural?
    Dr. Humiston. Thank you, Congressman. I appreciate the 
question.
    If you will indulge me for 30 seconds before I answer that, 
I just want to say that I, too, understand the frustration that 
many people have expressed today. My father currently manages 
our family's cattle ranch in southwest Colorado, a family farm 
that could only support he and my mother as an economic 
institution. Because of that, I chose to go on a path of policy 
and planning related to the farm bill, farm practices, 
everything I do now and have for 30 years, to make sure my 
father can keep farming and people like him can keep farming. 
And one issue that hasn't come up today that I think is 
critical is that we are talking about a farm bill that is not 
just for today and the next 5 years. My father, my siblings, 
and I are trying to make sure that my grandson and my great 
nieces and nephews are able to keep on farming, and we have not 
discussed that today, and a lot of these climate-smart 
agriculture programs are what are going to enable those farms 
to be functioning in 10 and 20 years, particularly in states 
where we are already seeing devastating effects from extreme 
weather.
    To your question, I have already mentioned several examples 
previously. The biggest one I just mentioned a second ago that 
is worth repeating is examples from Rural Development. That is 
the one where we have probably got some of the worst 
constrictions concerning population. Things like the water 
programs that cannot operate in a community over 10,000.
    If you look up and down California and other states, we 
have drought. We have water shortages for irrigation. We need 
to utilize every source of water we can. A healthier forest 
will produce more water. We are exploring things like--excuse 
me, I forgot my English there for a second. Getting water from 
the sea, et cetera. But recycled water from our urban areas is 
a huge opportunity to provide irrigation water, and the reality 
is communities that are small are not going to have the volume 
that can pencil out putting the infrastructure in place to get 
that highly treated wastewater--in most cases, treated to 
drinking water standards--out into the agricultural areas where 
it can help our farmers that need irrigation water. That is 
just one example. There are many, many others around other USDA 
programs, and how even our research dollars are allocated. 
California gets far less of allocation for capacity funds than 
almost 20 other states simply because of the size of our 
counties, and that ridiculous definition about metropolitan.
    The Chairman. Thank you. Your comments are well taken.
    The gentlelady from Louisiana, Ms. Letlow, is now 
recognized for 5 minutes.
    Ms. Letlow. Thank you, Chairman Scott, and thank you to all 
the witnesses for your testimonies and valuable insight.
    While there are big questions contributing to the 
conversation here today, and most of my questions have already 
been addressed, I would like to direct my comments to Dr. 
Outlaw.
    Dr. Outlaw, first, I want to personally thank you and your 
team for the great work in conducting a study to analyze the 
economic impact on higher fertilizer prices on the Agriculture 
and Food Policy Center's 64 representative farms, including the 
grain farm located in my district. And as you know, we are now 
2 months out from the publication and findings of that report. 
Yet, the situation in our countryside continues to be 
exacerbated. I continue to hear the concerns of our farmers, 
particularly our rice farmers, about the unpredictable 
challenges they face with increased cost of production, many of 
who are considering whether to plant this year. This is a 
troublesome trend.
    Dr. Outlaw, with additional challenges we are now facing 
globally, the situation has only gotten worse, particularly on 
fuel and fertilizer. Your study concluded that rice farms 
experience the highest fertilizer cost increase, averaging 
$62.04 per acre, which accounts for an astronomical impact in 
overall input costs. What might that look like today, and do 
you agree it is getting worse, and could we quantify that?
    Dr. Outlaw. Yes, I do agree it is worse. We are currently 
updating the study. I don't think it is a secret, but the 
Senate Agriculture, Nutrition, and Forestry Committee has asked 
for an updated study. If it is a secret, it is not anymore.
    But the reality is, is that when we did that study, we had 
pulled numbers as of the end of the year, and the first couple 
of months of this year conditions have deteriorated even more, 
so I would suggest that the estimates we gave you are probably 
20 to 30 percent or maybe even lower than they will be next 
time.
    Ms. Letlow. Wow. Well, thank you again for your dedication 
and expertise in evaluating farm policies and applying them to 
our hardworking farmers and ranchers on the ground.
    Mr. Chairman, I yield back the remainder of my time.
    The Chairman. Thank you.
    The gentleman from Georgia, Mr. Bishop, is now recognized 
for 5 minutes.
    Mr. Bishop. Thank you very much, Mr. Chairman. Thank you, 
Ranking Member Thompson. Thank you both for holding this 
hearing, and I want to thank our witnesses for coming and the 
great information that they are bringing, and I extend a 
special welcome to Senator Heitkamp.
    I want to put on my hat as an appropriator. Through the 
Fiscal Year 2022 agriculture appropriations bill, USDA is going 
to receive significant investments to research sustainable 
agriculture systems and to identify solutions to help the 
agriculture industry as it constantly evolves to mitigate and 
adapt to climate change. The examples include the NRCS's COMET 
Farm, the Forest Service's Forest Inventory and Analysis 
Program, the ARS Research Labs, the USDA Climate Hubs, NIFA's 
extramural research initiatives and extension activities, ERS 
research reports, and statistical and spatial data from the 
National Agricultural Statistics Service. These USDA agencies, 
along with the Offices of the Chief Economist and the Chief 
Scientist, conduct research for producers to have better data 
for better decisions.
    I will start with Mr. Conner. Can you tell me--and I would 
like for the other witnesses to answer this as well--is 
additional research needed to better understand how climate 
change will impact farmers, ranchers, and forest owners, and 
are there additional needs for improvements for existing 
research tools? And how can USDA help close these knowledge 
gaps?
    Mr. Conner. Congressman, I appreciate the question. I 
believe there is a substantial role here that you have 
identified on a number of these programs.
    Let me just say that we encourage USDA to focus--and I 
believe they are--on this path of measurement and better data 
collection, and this has been a bit of a theme through this 
hearing of the need for this. It really is sort of holding us 
back in terms of proper representation of farmers out there, 
because we just don't have that good measuring consistency of 
data, how it is collected. I would also say something 
significant from our standpoint is the number of soil sampling 
reference sites out there, which are critical, again, for 
gathering data to determine carbon uptake and these sorts of 
things, additional dollars to expand those number of sites, 
again, to make sure that these programs are not just 
benefitting one area or one group of farmers, but very, very 
broadly dispersed. I think that is a critical element of that 
as well.
    And finally, I will just say generally speaking, we really 
encourage you as appropriators to recognize the role of the 
Agricultural Research Service and the role that they play in 
here in terms of that research that ultimately USDA puts on the 
ground and puts in the hands of farmers.
    So, thank you for all your work, Congressman, on the 
Appropriations Committee. I know this has been a tough slough, 
but there will be a great outcome from this, we believe.
    Mr. Bishop. Thank you, Mr. Conner.
    Dr. Humiston. I would add to that----
    Mr. Bishop. Any other witnesses?
    Dr. Humiston. I would add to that, that there are some very 
exciting developments in new technologies. We have mentioned 
robotics and drones, but one example that I would highlight is 
a recent grant we received that is joint between University of 
California, University of Illinois, Cornell, and the 
Agricultural Research Service looking at how artificial 
intelligence can help us improve every aspect of our food 
systems, from production to workforce, distribution, 
processing, et cetera. And that is just one example of how, 
again, we can find these ways to utilize the different agencies 
and find new technologies that will help us achieve our goals.
    Ms. Duncanson. If I can just chime in here, too.
    I agree with the other two witnesses and appreciate the 
question from the Congressman. USDA does have a lot of data. We 
would hope that the mission areas can share that data in common 
units, aggregate it, analyze it, and make sure it is 
anonymized.
    Mr. Bishop. Thank you very kindly.
    With that, Mr. Chairman, I will yield back the balance of 
my time.
    The Chairman. Thank you.
    The gentleman from Texas, Mr. Cloud, is recognized for 5 
minutes.
    Mr. Cloud. Thank you, Mr. Chairman. I appreciate the time 
and this discussion today.
    On one hand, I am very excited that we are having a hearing 
on the farm bill. We have had many hearings not related to the 
farm bill in this term, and I also wanted to thank our future 
Chairman for his comments at the beginning of this hearing, and 
certainly appreciate his level-headed approach to the 
discussion.
    In this term we have had hearings on a retroactive 
blueberry bill. We have had hearings on electric tractors when 
no one I am talking to in the ag industry is asking for 
electric tractors right now. I did talk to a farmer last week 
whose tire went out on his tractor and he can't seem to find a 
tire to continue the good work that he is trying to do on his 
farm.
    It was just said that if anyone wants clean air, clean 
water, understands the need for us to be good stewards of our 
environment, it is the ag community, and I think indeed we have 
seen that. Historically, what we have seen is we have seen 
yields of the American ag worker go up. We have seen inputs go 
dramatically down, and yet, the approach right now is to bring 
the heavy hand of government into that equation as if we can 
somehow be the savior to a problem that is already being solved 
by the ag community. And so, I have very strong concerns about 
that. Historically, what we have seen in the past is whenever 
government steps in, even to lock in what might be the current 
great innovation, we lock it in at today's innovation and we 
actually stifle future innovations. And so, I think it is very 
important that we approach this conversation with all the due 
diligence it deserves, and especially how we have seen the 
policies. It has been said a number of times, but it is worth 
saying again. What we are seeing today, going on right now, the 
American experience for the family right now as you go to the 
grocery stores, you are wondering about food prices, you are 
wondering about lack of supplies on the shelves. You go to the 
American farmer, and you are seeing shortage of supplies. We 
are wondering about high fertilizer prices. We are wondering 
about pesticides that are not available and what our yields are 
going to look like a year from now. Couple that with the 
geopolitical events going on and the disruption that that will 
cause, we should be talking in this Committee about what we can 
do and what that is going to look like a year from now for the 
American family and for our food supply.
    But today, we are talking again about the Green New Deal 
and what we can do about that. And so, Dr. Outlaw, could you 
speak to--you mentioned in your written testimony that many 
farmers have concerns over government involvement in carbon 
markets. Can you elaborate on these concerns?
    Dr. Outlaw. Yes. I have been doing this about 30-some odd 
years, and over time, even with well-based intentions, 
sometimes the results out of Washington are not as people 
thought they were going to be.
    But, I think I will answer another question real quickly. 
The one thing that I would like for this Committee to move 
forward on is farmers are out there questioning all the 
different companies have their own soil carbon test, and no one 
has really mentioned that today that if you really wanted to 
have one good thing come out of this hearing--which many will--
getting to the bottom of trying to establish one test that even 
the International Panel on Climate Change has met six times and 
hasn't come up with one test. So, that is an area that needs to 
be addressed.
    But frankly----
    Mr. Cloud. Yes, that was going to be my next question, 
actually. If there was one way to measure carbon, but you are 
saying there is not a uniform way? Lots of people are doing it 
different ways so it is hard to have real valid data?
    Dr. Outlaw. It leads to a tremendous amount of confusion, 
why each company has their proprietary methods currently, and 
it seemed like this was a really good function of the Federal 
Government to kind of come up with this is a measure, and we 
are going to suggest people use this measure.
    Mr. Cloud. It would seem to me and what we have seen in the 
past, of course, when government intervenes into things like 
this, and indeed in carbon markets in the past, with the 
promises to the American ag worker is, ``Hey, you will get some 
sort of financial benefit out of this.'' What typically seems 
to have happened is that we take $10 out of an industry, and 
about $9 of that ends up in a bureaucratic regulatory 
investigator bundle, and about $1 of that might go back to the 
ag worker. And so, what the ag worker ends up trading for their 
small pittance, in a sense, is a heavy-handed regulatory effort 
that, throughout history, would seem to be not worth--it is a 
dance with the devil, so to speak.
    Would you give your thoughts on that?
    Dr. Outlaw. Just to be clear, everything is voluntary so 
far so producers have a choice, but you are right. They are not 
acquiring very much money for this.
    The Chairman. The gentleman's time has expired.
    The gentlewoman from the U.S. Virgin Islands, Ms. Plaskett, 
who is also Chair of the Subcommittee on Biotechnology, 
Horticulture, and Research, is now recognized for 5 minutes.
    Ms. Plaskett. Thank you so much, Mr. Chairman, and I want 
to thank you for this hearing and all the hearing that you have 
held which are important to the American people, and along with 
the subcommittees which you are the ex officio chair of, really 
provide the support and the underpinnings for the farm bill 
that we are going to be working on.
    Ms. Duncanson, I wanted to ask you a question. In the 
appendix of your testimony, you suggest that soil health 
improvement should be built into the Federal Crop Insurance 
Program into their rating model. Would this change be intended 
to replace the current rating model, or would it just be an 
alternative that farmers could choose?
    Ms. Duncanson. At this juncture, my level of expertise 
regarding that isn't quite up to snuff as it should be for 
today. It has been a long morning. But, at this point, I think 
that we are open to looking at and including that if it is 
actuarially sound and can be helpful, and look towards advice 
on all different levels on if this would work throughout the 
country.
    Ms. Plaskett. Thank you.
    As we all know, farmers over 65 years of age outnumber 
farmers under 35 by more than six to one, and many U.S. farmers 
are set to retire in this coming decade. To support the next 
generation of farmers and ranchers, transition productive 
farmland, revitalize our nation's rural communities, all while 
tackling the climate crisis, considerable progress must still 
be made in how Federal agencies, including the USDA, serve 
young farmers and farmers of color.
    Ms. Raygoza, what are the primary changes that you would 
like to see to improve accessibility to the farm bill 
conservation programs?
    Ms. Raygoza. I would like to see more trained staff that 
are trained for working with small, diversified farmers and 
farmers of color that are able to provide that technical 
assistance that they need to access the programs. Also, I know 
that for our farm, we have participated in a lot of different 
programs, but that is because we have been working for a long 
time, and I think if we had relationships set up with, like, 
the Young Farmers Coalition, working with those different 
groups that already have the ties with the communities would 
also increase participation.
    Ms. Plaskett. Thank you. Thank you for that. I agree 
wholeheartedly with you. I know in my district in the Virgin 
Islands, the concern is the amount, not that the individuals 
who are there at USDA are not competent or helpful, but they 
are overwhelmed and can't really provide the support that is 
necessary for the amount of individuals that want to go into 
farming or the amount of technical assistance that they need, 
from bookkeeping to precision farming across the line. So, I 
think that that work, along with work with our cooperatives, is 
really important.
    Mr. Conner, in your testimony you mentioned expanding Rural 
Energy for America Program, REAP, eligibility to include 
cooperatives. Can you explain how this would better enable 
investments that address climate change, and are those 
investments limited to one technology?
    Mr. Conner. Congresswoman, I don't think they are limited 
to one technology. The REAP Program is a very valuable program 
and it has provided a variety of different types of assistance 
to date. It is a highly underfunded program, and so, one way to 
have an immediate impact is to adequately fund that program, 
and again, that money could be distributed and the benefits 
received in very, very short order.
    For us as cooperatives, as you know, we are, particularly 
in the livestock and dairy sector, we are a big presence, 
processing as much as 70 to 80 percent of the milk produced in 
this country. We are on farms and ranches every single day, and 
we believe there could be a role, going forward, in terms of 
managing the manure and circumstances that are creating 
greenhouse gas circumstances for co-ops. We would like to see 
them eligible for the REAP Program, again, as the group that is 
working directly with our farmer-owners, we just feel like 
there could be a benefit by expanding that eligibility, given 
the role that we play, particularly, again, in the anaerobic 
digester and manure management kinds of issues. But that is 
just one example.
    Ms. Plaskett. Thank you so much, and Mr. Chairman, thank 
you for the opportunity to question the witnesses, and I yield 
back.
    The Chairman. Thank you, Ms. Plaskett.
    The gentleman from Florida, Mr. Lawson, is now recognized 
for 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman, for having this 
hearing. It is a great hearing. It is very educational, and it 
is something that we really needed to have, and all the other 
hearings have been very good. I want to thank the witnesses for 
being here today to answer a lot of questions and give us some 
insight of what is going on with climate change.
    Now, according to the Federal Communications Commission, 
only 78.6 percent of Florida rural areas have access to high-
speed broadband services, and this will be to the former 
Senator. How can the Rural Utilities Service best help 
communities get broadband and take advantage of the associated 
benefits?
    Ms. Heitkamp. Well, I think that when you look at a state 
like North Dakota, we have the best rural broadband in the 
country. In fact, my mother-in-law who lived out on the family 
farm had better broadband in a rural community than they did in 
Fargo, North Dakota. I will tell you how that happened. It 
happened by a commitment from our rural telecoms who really 
stepped up and basically said we are going to make this 
investment. We need to not only look at having the money, but 
who is going to deploy that money, and obviously coming from a 
state like North Dakota and my background, I believe co-ops are 
hugely beneficial. I think that what you have to really watch 
for in implementing a lot of the broadband dollars that you are 
is that you don't have companies chasing after and using those 
dollars to compete in areas where you already have rural 
broadband. We know it is always the last mile. As we used to 
say in the electric business, it is always the last mile 
deploying that is going to cost the most. And so, USDA has to 
be very strategic in how they deploy these dollars. They have 
to identify where these dollars need to be--are most acute.
    One thing I will tell you, and I know we talk a lot about 
broadband, but I think we have not done enough on wireless. 
Many of your communities in Florida and across the country do 
not have cell tower access. They can't actually make a phone 
call when they are stranded on the road. I have people in 
Native American communities, students who drive around looking 
for a signal, holding their hand out of their car so that they 
can advance their work product to their teachers. And so, we 
have to not just focus on broadband, but the entire 
connectivity that includes wireless, because I think that is 
going to be where you are going to get the AI, the data 
information, the data transfers from the fields.
    So, thank you, Congressman, for all the work that you guys 
are doing, and good luck in Florida doing what we did in North 
Dakota.
    Mr. Lawson. Thank you very much, and I am glad you 
mentioned about sticking an arm out the window to try to get a 
signal, because sometimes going through the district, I had to 
do that or wait until I go up a hill. I lose it when I go down 
a hill, and so it is great that you mentioned that. It is 
really great.
    Now, I know firsthand that the current Federal definition 
of rural classification limits many counties, especially 
several in my district, because of their proximity close to an 
urban center. And these are rural areas, but I have had 
situations where when funding has been available, I have areas 
that don't quality--and this goes to Dr. Humiston. Can you 
speak to how the current definition limits investment in rural 
economics, and how changes in the definition drives investment 
in climate-smart technology? I mean, this is very, very 
important because I can give you an example. When I speak about 
Jacksonville, before you get into the City of Jacksonville, it 
might be 40 or 50 miles in the city. It affects counties like 
Baker that is right outside, because they are in that urban 
municipal service area. What can we do to change that?
    Dr. Humiston. So, several years ago we did create new 
language about the Rural Development's business programs that 
would allow construction of food manufacturing processing 
facilities in larger cities. In essence, we took the population 
limits off, because those facilities were directly serving 
farmers. To the degree we can start being smarter about all of 
the Rural Development programs to make sure they are serving 
rural needs--Rural Development, that is the name--we need to 
quit thinking about population as the only criteria for 
eligibility to these, and it is across all the Rural 
Development programs. It is just a matter of being smarter 
about how we serve rural and what rural is.
    The Chairman. Thank you very much. The gentleman's time has 
expired.
    Mr. Lawson. I yield back, Mr. Chairman.
    The Chairman. Thank you.
    Ladies and gentlemen, this comes to a conclusion of our 
hearing, and I want to thank you on behalf of our House 
Agriculture Committee. I want to thank all of our witnesses. 
Your testimony has been very helpful on this very, very 
important issue, and all of the issues that we have covered 
this morning in terms of perspectives on how our farm bill 
programs are meeting their missions, while helping to develop 
and implement solutions to the climate crisis and supporting 
our agriculture producers and our rural communities. It is very 
important to me that we look at all the ways that farmers are 
using our farm bill programs to mitigate climate change, among 
all the other issues that we have been faced with.
    In Georgia, we have seen more frequent natural disasters. 
Hurricane Matthew in 2016, Hurricane Irma in 2017, and 
Hurricane Michael in 2018, back-to-back. We see them lined up 
coming off the African coast into the islands, and then 
devastating our most fertile agriculture territory, which is 
the southeastern United States. And these extreme weather 
patterns throughout our country is certainly getting worse, and 
it is very important that we have heard from you today in terms 
of your thoughts on how we can address these as we move through 
and develop our next farm bill so that we can reverse this 
trend through farming practices that many of our farmers are 
doing here. Regardless of what it is, we now have things like 
carbon credits. We have different ways of assisting and 
partnering with our farmers. Some in this want to do it by 
carbon credits. They want to do it by how much soil--carbon our 
farmers can sequester. Others by cover crops. We are having 
difficulty in how we label and define all these areas. It is 
new for us, and that is why it is important for us not to run 
from this, but to solve it. We can solve these fires. They are 
burning up so much. Many of our livestock and animals are 
burned up in those fires.
    And so, I want to thank each of you. We have had a great 
hearing, and in terms of our farm bill so that we can serve the 
needs of our great farmers and our great nation.
    And so, under the Rules of the Committee, the record of 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from our witnesses to any questions posed by a Member. And so, 
this hearing is now adjourned. Thank you.
    [Whereupon, at 1:50 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
Submitted Letter by Hon. David Scott, a Representative in Congress from 
                                Georgia
March 24, 2022

 
 
 
Hon. Thomas J. Vilsack,              Hon. Samantha Power,
Secretary,                           Administrator,
U.S. Department of Agriculture,      U.S. Agency for International
Washington, D.C.;                     Development,
                                     Washington, D.C.
 

    Dear Secretary Vilsack and Administrator Power,

    We write to urge you to leverage the resources available in the 
Bill Emerson Humanitarian Trust (BEHT), an emergency international food 
aid program administered by the United States Department of Agriculture 
(USDA) and the United States Administration for International 
Development (USAID), to help address ongoing humanitarian food crises. 
The deteriorating state of global food security and the ongoing 
pressures on availability of commodity food assistance resources 
warrant the dispersion of those funds.
    Over the past year we have seen the emergency food and nutrition 
needs of hungry citizens around the world intensify, resulting from 
events such as the COVID-19 Pandemic, conflicts, and natural disasters. 
The USDA estimates that around 1.2 billion people were food-insecure in 
2021, a 32 percent increase from 2020, and recent trends indicate that 
the number is on the rise. In countries such as Afghanistan, the 
Democratic Republic of the Congo, Ethiopia, Haiti, South Sudan, Syria, 
and Yemen, we have seen a dire need for food assistance.
    The immediate need for aid, particularly commodities, will likely 
increase in light of Russia's unprovoked invasion of Ukraine. Ukraine 
is a large producer of wheat and grain, and if production levels drop 
it is likely that we will see corresponding pressure in the global 
grain markets. This may be compounded by further shocks to global 
grain, energy, and fertilizer supply, as Russia is rightfully 
sanctioned for its actions. Together, Russia and Ukraine supply 26 
percent of global wheat exports and Ukraine supplies 13 percent of the 
world's corn. Supply shortages or increased prices will 
disproportionately impact developing and middle-income countries that 
rely heavily on imports of food.
    In light of these complex and disturbing circumstances, we request 
that you use the BEHT to bolster American assistance to hungry people 
around the world. The trust was created for use during times of 
exceptional need, and the acute hunger crises that too many people are 
experiencing justifies the use of these funds.
            Sincerely,
            
            

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman                             Ranking Member
 

                                     
                                     

 
 
 
Hon. Alma S. Adams,                  Hon. Rick W. Allen,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Cynthia Axne,                   Hon. James R. Baird,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Troy Balderson,                 Hon. Sanford D. Bishop, Jr.,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Cheri Bustos,                   Hon. Jim Costa,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Angie Craig,                    Hon. Eric A. ``Rick'' Crawford,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Randy Feenstra,                 Hon. Michelle Fischbach,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Josh Harder,                    Hon. Jahana Hayes,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Dusty Johnson,                  Hon. Trent Kelly,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Ro Khanna,                      Hon. Ann M. Kuster,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Doug LaMalfa,                   Hon. Al Lawson, Jr.,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Julia Letlow,                   Hon. Sean Patrick Maloney,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Tracey Mann,                    Hon. James P. McGovern,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Barry Moore,                    Hon. Tom O'Halleran,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jimmy Panetta,                  Hon. Chellie Pingree,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. David Rouzer,                   Hon. Bobby L. Rush,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Kim Schrier,                    Hon. Austin Scott,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Abigail Davis Spanberger,       Hon. Filemon Vela,
Member of Congress                   Member of Congress
 

                                 ______
                                 
Submitted Letter by Hon. David Scott, a Representative in Congress from 
  Georgia; on Behalf of Sarah Gallo, Vice President, Agriculture and 
           Environment, Biotechnology Innovation Organization
March 16, 2022

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
U.S. House of Representatives,       U.S. House of Representatives,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Scott, Ranking Member Thompson, and Members of the 
Committee:

    The Biotechnology Innovation Organization (BIO) is pleased to 
submit a statement for the record the United States House of 
Representatives Committee on Agriculture hearing entitled, ``A 2022 
Review of the Farm Bill: The Role of USDA Programs in Addressing 
Climate Change.''
Introduction
    BIO \1\ represents 1,000 members in a biotech ecosystem with a 
central mission--to advance public policy that supports a wide range of 
companies and academic research centers that are working to apply 
biology and technology in the energy, agriculture, manufacturing, and 
health sectors to improve the lives of people and the health of the 
planet. BIO is committed to speaking up for the millions of families 
around the globe who depend upon our success. We will drive a 
revolution that aims to cure patients, protect our climate, and nourish 
humanity.
---------------------------------------------------------------------------
    \1\ https://www.bio.org/.
---------------------------------------------------------------------------
    BIO supports testimony delivered at the hearing on behalf of the 
Food and Agriculture Climate Alliance (FACA). As a member of FACA, BIO 
believes that the Coalition's shared climate policy priorities, 
developed by organizations representing farmers, ranchers, forest 
owners, the food sector, state governments and environmental advocates, 
can greatly inform the work of the Committee.
Addressing Climate Change with Innovation
    As Congress begins the process of authorizing the next farm bill, 
BIO applauds the Committee for exploring how climate change can be 
addressed through the U.S. Department of Agriculture (USDA) and the 
farm bill.
    Last year, when the Committee held its hearing, ``Climate Change 
and the U.S. Agriculture and Forestry Sectors,'' BIO noted in its 
statement for the record \2\ that to meet the challenge of climate 
change, it is crucial to lead with science and innovation.
---------------------------------------------------------------------------
    \2\ https://www.bio.org/letters-testimony-comments/bio-submits-
testimony-first-climate-hearing-new-house-agriculture.* 
    * Editor's note: excerpt of hearing entitled, Climate Change and 
the U.S. Agriculture and Forestry Sectors  is retained in Committee 
file.
---------------------------------------------------------------------------
    A farm bill centered on innovation stands to incentivize the 
adoption of cutting-edge technologies and practices, resulting in 
benefits to the environment and rural economies. Farmers, ranchers, 
sustainable fuels producers and manufacturers need comprehensive 
legislation, like the farm bill, to deliver a strong message; namely, 
biotechnology offers immediate and long-term answers to combat climate 
change. And to maintain U.S. leadership, programs must be supported by 
streamlined and expedited regulatory pathways for breakthrough 
technology solutions.
    At its core, the farm bill promotes durability. The next farm bill 
offers a timely opportunity to examine innovation's influence on the 
resiliency of our economy in the face of global climate challenges. It 
also provides an unparalleled platform to grow trust in the innovation 
ecosystem, so more communities and consumers can embrace deployment of 
biotechnology with confidence and enthusiasm.
USDA Farm Bill and Climate Programs
    BIO believes the government can and should play a catalytic role in 
providing guidelines for carbon markets. As the Committee examines how 
USDA programs can address climate change and interact with existing 
ecosystem markets, it should support government-established 
infrastructure to measure and verify carbon sequestrations at the local 
farm level. This will ensure both USDA programs and private markets 
will be successful and operate with credibility. It also will enable 
producers to invest in and adopt innovative technologies to reduce 
emissions and be properly rewarded.
    Agriculture continues to play a positive role in tackling climate 
challenges--precision plant breeding, biostimulants, microbial 
inoculants, enhanced animal feed with enzymes--each of these cutting-
edge innovations is reducing emissions and helping domestic producers 
adapt to a changing environment and bolster productivity. Carbon 
markets and other USDA programs must keep pace and continue to foster 
acceptance for new technologies, thereby protecting the stability of 
the agricultural supply chain.
    However, without clear direction from USDA on its role, it is 
difficult for innovators to model the environmental benefits and 
leverage the financial resources needed to bring critical technologies 
to market. Additionally, it is virtually impossible for individual 
farmers, ranchers, or foresters to comprehend the myriad programs in 
the marketplace and readily assess the impacts to their own operations. 
If we want to realize the benefits of sequestering carbon dioxide in 
the soil, improving soil health, and protecting waterways, we must 
clearly define roles and responsibilities for both government and the 
private-sector.
Conclusion
    The agricultural innovations that BIO's member companies are 
developing will allow producers to sustainably provide the food, feed, 
fuel, and fiber needed for a growing world. The development and 
deployment of these technologies will be crucial to helping farmers and 
ranchers be a part of the solution to climate change and provide them 
with the tools to be self-sustaining and resilient to a volatile 
climate.
    BIO is committed to working with the Committee toward the 
development of the next farm bill that will address the climate crisis 
and support innovation in agriculture.
            Sincerely,
            
            
Sarah Gallo,
Vice President, Agriculture and Environment,
Biotechnology Innovation Organization.
                                 ______
                                 
Submitted Statements by Hon. David Scott, a Representative in Congress 
                              from Georgia
                              Statement 1
     on behalf of cindy clark, senior policy manager regenerative 
                       agriculture policy, ceres
Ceres Climate-Smart Agriculture and Healthy Soil Working Group 
        Statement
    The Ceres Climate-Smart Agriculture and Healthy Soil Working Group, 
a part of the Ceres Policy Network,\1\ * is a coalition of major food 
and fiber companies that are committed to addressing climate change 
through joint action on agriculture. These companies are increasingly 
involved in working directly with farmers, in ways that benefit both 
parties, and with the U.S. Department of Agriculture (USDA).
---------------------------------------------------------------------------
    \1\ https://www.ceres.org/networks/ceres-policy-network.
    * Editor's note: references annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    These companies share is a recognition that expanding nature-based 
climate solutions, including forests, grasslands, and other natural 
ecology, while adopting climate-smart agriculture practices, is 
critical to limiting global warming to 1.5 Celsius, which scientists 
say is necessary to avoid further catastrophic impacts of the climate 
crisis. Already, the climate crisis is getting worse--it has become 
brutally clear is that without urgent and robust action, climate change 
will remain a tremendous threat to our economic, financial, and human 
well-being.
    We commend the House Agriculture Committee for holding this hearing 
to review the role of USDA programs in addressing climate change. With 
American agriculture contributing about 10% of U.S. greenhouse gas 
emissions, this important discussion comes as we increasingly focus on 
the threat from climate change to our food supply and our national 
security. To do its part meet the goal of limiting warming to 1.5 
Celsius, the U.S. has set a target to cut emissions in half by 2030 and 
achieve a net zero emissions economy by 2050. This means we have only 8 
years to meet our 2030 goals and get on track to limit the climate 
threats that only grow more ominous.
    There are many ways that farm bill policies can accelerate the 
drive to net-zero. We see programs that exist throughout all 12 titles 
of the farm bill that should be focused through a climate lens.

   As our member companies partner with farmers to address 
        climate change, the farmers often rely on farm bill voluntary 
        conservation programs:

     Funding for technical assistance is an enormous hurdle 
            and we have encouraged USDA to re-imagine all aspects of 
            technical assistance as we try to help scale up on-farm 
            conservation.

     The land-grant and cooperative extension network is 
            also a valuable resource for farmers and could be better 
            incorporated into the provision of technical assistance, 
            helping farmers to evaluate and incorporate climate smart 
            agricultural practices.

     ``Train the trainer'' programs, particularly at our 
            historically black colleges, Tribal colleges, and Hispanic-
            serving institutions, can also significantly expand 
            capacity and ensure that the profit opportunities from new 
            ecosystems markets are available to all farmers.

   The demand for better practice outcome data and data 
        interoperability is a key theme that runs throughout farm bill 
        programs, from commodity subsidies to forestry programs to crop 
        insurance. Private companies are collecting data from farm 
        customers, in addition to the reporting farmers are required to 
        provide to USDA in return for program payments. Through the 
        farm bill, USDA should develop a system where aggregated farm-
        level data can be shared with companies, and aggregated 
        company-collected data can be shared with USDA.

   Within the horticulture title, the National Organic Program 
        (NOP) has long been the model for farms incorporating 
        regenerative ag practices. Our working group has recommended to 
        USDA that organic system plans could be streamlined with 
        greenhouse gas protocols, including electronic record keeping 
        to meet both NOP planning and ecosystem market needs.

    This farm bill must resist the temptation to solve past problems. 
It must plan for the future, because the future is here already. The 
climate crisis is a trade issue, a nutrition issue, a rural development 
issue--it affects every title of the farm bill, just as the farm bill 
affects every single American. Congratulations to the House Agriculture 
Committee for recognizing this.

Cindy Clark,
Senior Policy Manager Regenerative Agriculture Policy,
Ceres.
Ceres' Climate-Smart Agriculture and Healthy Soil Working Group \2\
---------------------------------------------------------------------------
    \2\ https://www.ceres.org/networks/ceres-policy-network/climate-
smart-agriculture-and-healthy-soil-working-group.
---------------------------------------------------------------------------
          For more than 30 years, Ceres \3\ has brought together the 
        most influential capital market leaders to solve the world's 
        greatest sustainability challenges. Ceres' Climate Smart 
        Agriculture and Healthy Soil Working Group is made up of 
        businesses from the Ceres policy network \4\ that are committed 
        to advancing Federal regulation and legislation at the state 
        and Federal levels that de-risk the efforts of farmers and 
        ranchers to reduce greenhouse gas emissions, build climate 
        resilience, and increase soil health. For information, please 
        reach out to Cindy Clark ([Redacted]).
---------------------------------------------------------------------------
    \3\ https://www.ceres.org/homepage.
    \4\ https://www.ceres.org/networks/ceres-policy-network.
---------------------------------------------------------------------------
                              Statement 2
     on behalf of ted mc kinney, chief executive officer, national 
            association of state departments of agriculture
    On behalf of the National Association of State Departments of 
Agriculture (NASDA), we appreciate the opportunity to submit this 
statement outlining the priorities of state departments of agriculture 
on policies related to the roles of USDA programs in addressing climate 
change. We request that this statement be included in the record.
    NASDA represents the commissioners, secretaries, and directors of 
the state departments of agriculture in all 50 states and four U.S. 
Territories. State departments of agriculture serve as advocates for 
the productive use of America's farmland while also being a trusted 
resource to our nation's farmers and ranchers who want to participate 
in USDA's conservation programs. In fact, many producers are the direct 
beneficiaries of the successes of innovative state conservation 
programs in addition to USDA's programs.
    In this role, NASDA encourages the Committee to ensure Congress and 
USDA work in partnership with state departments of agriculture to make 
the next farm bill the most impactful yet. NASDA members recognize the 
achievements of current conservation programs but also recognize many 
of these programs have become oversubscribed. As the Committee begins 
hearings on the 2023 Farm Bill, NASDA has recommendations to improve 
USDA's conservation programs.
    NASDA recommends the Committee include the following policies as it 
begins consideration of the 2023 Farm Bill:

   Protect the voluntary status of the current conservation 
        programs, while creating voluntary, incentive-based climate 
        smart agricultural programs that are practical and provide 
        benefits for farmers and ranchers.

   Invest in the successful conservation programs such as EQIP, 
        ACEP, CSP, and RCPP.

   Streamline the process, reduce barriers to access, and 
        increase flexibility for conservation programs, which will 
        allow state partners to achieve the best outcomes.

   Enact policies that credit ongoing efforts of many farmers 
        and ranchers that have previously adapted climate smart 
        strategies to reduce emissions, sequester carbon, and improve 
        resiliency.

   Implement climate policies that focus on advancing science-
        based outcomes.

   Promote fairness and equity within the agriculture community 
        through climate solutions.

    Since 2020, NASDA has been a founding member of the Food and 
Agriculture Climate Alliance. This alliance is dedicated to working 
together to promote voluntary, incentive-based, science-based, and 
bipartisan solutions to climate change. NASDA supports the 
recommendations from the Food and Agriculture Climate Alliance.
    NASDA stands ready to assist this Committee as it begins 
consideration of the 2023 Farm Bill.
    Please contact Zachary Gihorski ([Redacted]) if you have any 
questions or would like any additional information.
                                 ______
                                 
 Submitted Letter by Hon. Rick W. Allen, a Representative in Congress 
                              from Georgia
February 28, 2022

  Hon. Joseph R. Biden,
  President of the United States,
  White House,
  Washington, D.C.

    Dear President Biden:

    Over the last few days, we have seen Russia launch an unjustified 
war against a sovereign nation and our strategic partner, Ukraine. We 
unequivocally condemn Russian President Vladimir Putin and his attacks, 
which have put the lives of millions and security of Europe in grave 
danger. However, rather than take concrete steps to deter President 
Putin, your Administration's energy policies have only emboldened his 
actions. Specifically, your gift of the Nord Stream 2 Pipeline granted 
Putin more control over energy in the region while at the same time, 
your policies weakened America's energy independence.
    Energy independence is critical to national security, as our 
adversaries like Russia understand the world is now more dependent on 
foreign oil and natural gas. That's why we are demanding that your 
Administration immediately restore the oil production policies that 
were established in 2017 under the Trump Administration. Under these 
policies, America was energy independent. The past Administration 
lifted the ban on Federal leasing for coal production and lifted 
restrictions put in place during the Obama Administration that killed 
the production of oil, natural gas and shale energy through the Clean 
Power Plan.\1\ Furthermore, President Trump signed a memorandum 
restoring construction of the Keystone XL Pipeline, providing a safe 
and reliable way to transport energy resources between the United 
States and Canada to strengthen America's energy security and 
generating billions in revenue to boost economic growth.\2\
---------------------------------------------------------------------------
    \1\ https://trumpwhitehouse.archives.gov/briefings-statements/
president-trumps-energy-independence-policy/.
    \2\ https://2017-2021.state.gov/wp-content/uploads/2019/02/Federal-
Register-Memorandum-for-Construction-of-the-Keystone-XL-Pipeline.pdf.
---------------------------------------------------------------------------
    In contrast, one of your first actions as President was to kill 
American energy independence by issuing an Executive Order revoking the 
permits for the Keystone XL Pipeline, a first signal to adversaries 
like Russia that America would be dependent on foreign oil.\3\ And yet, 
even in the midst of the impending military invasion, on February 17, 
2022, the Federal Energy Regulatory Commission (FERC) released updated 
guidance to delay and deny natural gas pipeline projects.\4\
---------------------------------------------------------------------------
    \3\ https://www.whitehouse.gov/briefing-room/presidential-actions/
2021/01/20/executive-order-protecting-public-health-and-environment-
and-restoring-science-to-tackle-climate-crisis/.
    \4\ https://www.ferc.gov/news-events/news/ferc-updates-policies-
guide-natural-gas-project-certifications.
---------------------------------------------------------------------------
    These misguided policies have left the American people paying 
skyrocketing prices at the gas pump and empowered Russia to invade 
Ukraine, which will only result in gas prices continuing to surge for 
Americans and our European allies.
    Failed policies by your Administration have devastating impacts, 
both at home and abroad. As you come before Congress and our country to 
deliver the State of the Union, we urge you to include in your speech a 
strong commitment to the American people that you will end this war on 
American energy, restore the Trump Administration policies to spur 
domestic oil production, and restore the Keystone XL pipeline. America 
must once again be energy independent so the world less reliant on 
malign actors.
            Sincerely,
            
            

 
 
 
Hon. Rick W. Allen,
Member of Congress
 




 
 
 
Hon. Scott Perry,                    Hon. David B. McKinley,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Louie Gohmert,                  Hon. Mary E. Miller,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jody B. Hice,                   Hon. Diana Harshbarger,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Tom McClintock,                 Hon. Vicky Hartzler,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Bob Gibbs,                      Hon. Lisa C. McClain,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Bob Good,                       Hon. Clay Higgins,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Austin Scott,                   Hon. Rodney Davis,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. David G. Valadao,               Hon. W. Gregory Steube,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. A. Drew Ferguson IV,            Hon. Earl L. ``Buddy'' Carter,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jim Banks,                      Hon. Billy Long,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Alexander X. Mooney,            Hon. Claudia Tenney,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Troy Balderson,                 Hon. Dan Bishop,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mike Rogers,                    Hon. Ralph Norman,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Brian Babin,                    Hon. Ben Cline,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Bill Huizenga,                  Hon. Virginia Foxx,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Blaine Luetkemeyer,             Hon. Marjorie Taylor Greene,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Bill Johnson,                   Hon. Tom Emmer,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mariannette Miller-Meeks,       Hon. John H. Rutherford,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Victoria Spartz,                Hon. Steve Womack,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mark E. Green,                  Hon. Tom Rice,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Joe Wilson,
Member of Congress
 

                                 ______
                                 
Supplementary Material Submitted by Hon. Heidi Heitkamp, Co-Chair, Farm 
    and Forest Carbon Solutions Task Force, Bipartisan Policy Center
Insert 1
          Mr. Baird. . . .
          * * * * *
           . . . would you care to elaborate on the importance of 
        biotechnology and research and so on as we move forward in 
        agriculture?
          * * * * *
          Mr. Baird. I am not sure, Mr. Chairman, how much time I have 
        left, but if any of the other witnesses would like to comment--
        --
          The Chairman. Your time has expired, unfortunately.

    Agricultural biotechnology involves an array of tools and 
approaches that can involve conventional breeding techniques and 
genetic engineering that are implemented to improve the health and 
sustainability of plants, animals, and microbes. Advances in 
biotechnology can enable scientists to introduce or suppress traits in 
organisms used for food, fiber, industry, and even pharmaceutics.\1\ * 
Designed carefully, biotechnology and research present tremendous 
opportunities to improve agricultural sustainability, profitability, 
crop yields, soil health, and reduced need for water and chemical 
inputs. In short, research and innovation in this space and innovation 
can reduce risk and enhance resilience.
---------------------------------------------------------------------------
    \1\ Congressional Research Service, 2021: Agricultural 
Biotechnology: Overview, Regulation, and Selected Policy Issues  
(https://sgp.fas.org/crs/misc/R46737.pdf).
    * Editor's note: footnotes annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    It is worth noting that the U.S. currently leads in the production 
of engineered crops, cultivating nearly 40% (185 million acres) of 
total genetically engineered crop acres planted worldwide. Our nation 
also leads globally the development of advanced genetic technologies 
and applying them to crops and livestock to enhance nutritional 
qualities, reduce allergenicity, enhance growth rates, reduce 
susceptibility to pests and diseases and reduce the dangers of animal 
rearing.
    There are also unique opportunities in forestry biotechnology and 
research. According to the most recent national insect and disease risk 
assessment carried out in 2012 by the U.S. Forest Service, some 81.3 
million acres--nearly seven percent of all U.S. forested land--are at 
risk of losing at least 25 percent of tree vegetation between 2013 and 
2027 due to insects and diseases.\2\ The severity of impact of these 
threats can be mitigated through land management practices and by 
biotechnology approaches to confer resistance to the vegetation at risk 
to enhance forest health. In fact, a recent National Academies report 
recommended further research on the mechanisms that govern trees' 
resistance to pests and adaptation to a changing climate. There is 
significant potential for both agricultural and forest biotechnology to 
enhance resilience and reduce risk.
---------------------------------------------------------------------------
    \2\ National Academies of Sciences, Engineering, and Medicine, 
2019: Forest Health and Biotechnology: Possibilities and Considerations 
 (https://nap.nationalacademies.org/download/25221).
---------------------------------------------------------------------------
Insert 2
          Mr. Feenstra. . . .
          * * * * *
          Senator Heitkamp, how has the Title IX of the farm bill 
        advanced cleaner burning domestic energy production that 
        benefits farmers and the environment?
          Ms. Heitkamp. I would like to just repeat back to you, 
        Congressman, what you just said. When you look at the actual 
        reductions, you look at the opportunity, and I want to--I don't 
        know if you guys could hear me when I was responding, but when 
        we look at what the Iowa ethanol industry is doing and what 
        South Dakota is doing and North Dakota is doing, they are 
        looking at carbon capture to actually even expand on those 
        numbers. Carbon capture behind the process which can even 
        reduce their greenhouse impact greater. And so, I think that 
        when [inaudible] access to the market by limiting 
        infrastructure, or people who just don't like corn ethanol. 
        [inaudible].
          The Chairman. Senator, we are having a little more 
        difficulty, but you can respond to that in writing.

    Title IX of the farm bill has been critical in supporting research 
and development of agricultural and forestry feedstocks used to produce 
bioenergy, as well as financing commercial scale production facilities. 
As such, it helps the industry meet the demand for low-carbon biofuels 
created by the Renewable Fuel Standard and for wood-based bioenergy, 
while also supporting thousands of jobs throughout rural America. Today 
there is greater pressure on the biofuels industry to reduce its carbon 
footprint to better compete with other transportation fuels like 
electricity. It is my hope that Congress will reauthorize Title IX in 
the 2023 Farm Bill, and through that title, provide the financial 
resources necessary to enable research into ways that bioenergy 
industries can further decarbonize, including through reduced emissions 
from the on-farm supply chain to the collection and sequestration of 
carbon dioxide from biofuels production plants across the country.
                                 ______
                                 
Supplementary Material Submitted by Shakera Raygoza, Owner, Terra Preta 
   Farm; CFAP2 Technical Assistant, National Young Farmers Coalition
Insert 1
          Mr. Baird. . . .
          * * * * *
           . . . would you care to elaborate on the importance of 
        biotechnology and research and so on as we move forward in 
        agriculture?
          * * * * *
          Mr. Baird. I am not sure, Mr. Chairman, how much time I have 
        left, but if any of the other witnesses would like to comment--
        --
          The Chairman. Your time has expired, unfortunately.

    Biotechnology and research is key to identifying new climate smart 
practices that are effective. We would support more producer guided 
programs and grants such as the Sustainable Agriculture Research & 
Education (SARE) program, a U.S. Department of Agriculture National 
Institute of Food and Agriculture (NIFA) grants and outreach program. 
SARE is the only farmer-led research program and a critical tool in 
helping farmers fight climate change. In addition to providing grant 
funding for farmers to lead research on sustainable agriculture, the 
program is also critical in peer-to-peer learning by sharing the 
research findings with other farmers across the country. Research from 
SARE helps small-scale, diversified farmers implement conservation 
practices and measure their climate mitigation impacts.
Insert 2
          Mr. Carbajal. Thank you.
          Ms. Raygoza, I don't know if I have enough time, but I agree 
        with you that young farmers are the future. I want to help 
        support these young, aspiring farmers succeed and produce food 
        for our country. Do you think some type of workforce 
        development partnership between USDA and community colleges 
        would be useful to teach young farmers how to navigate USDA 
        resources and learn about climate practices?
          The Chairman. The gentleman's time has expired, but you may 
        respond in writing to him. Thank you.

    Yes, I support the development of partnerships between USDA and 
community colleges. USDA Beginning Farmers and Rancher Development 
programs in my region provided me with the technical support that my 
farm needed to begin. As the average age of farmers increases, more 
programs and partnerships are needed to encourage young people to 
become farmers and to learn about the programs available to them at 
USDA.
    Other ways to support young farmers include passage of the Civilian 
Climate Corps Act, making college more affordable, and canceling 
student debt, as student debt is one of the top issues preventing 
aspiring farmers from entering the field.
                                 ______
                                 
 Supplementary Material Submitted by Hon. Glenda Humiston, Ph.D., Vice 
President, Agriculture and Natural Resources, University of California; 
  Director, Agricultural Experiment Station and Cooperative Extension 
                                Service
Insert
          Mr. Baird. . . .
          * * * * *
           . . . would you care to elaborate on the importance of 
        biotechnology and research and so on as we move forward in 
        agriculture?
          * * * * *
          Mr. Baird. I am not sure, Mr. Chairman, how much time I have 
        left, but if any of the other witnesses would like to comment--
        --
          The Chairman. Your time has expired, unfortunately.

    Biotechnology allows farmers to grow more food on less land using 
farming practices that can be more environmentally sustainable. For 
example, seeds yielding more per acre, plants naturally resisting 
specific insect pests and diseases, and farming techniques designed to 
improve soil health and conservation. Biotechnology can also develop 
crops that are engineered to tolerate specific herbicides, which make 
weed control simpler and more efficient. Other examples include 
developing biofuels, improving plant growth, and enhancing animal 
health and breeding.
    The positive aspects of biotechnology include nutritional quality 
improvement, transfer of the desired traits of plants and animals, and 
the minimization of pesticide use. However, some concerns have also 
been raised over biotechnology's potential to cause a decrease in 
biodiversity and a negative impact on health and the environment. Given 
the huge potential for positives, significant investment is needed in 
research to ensure that preferred outcomes are achieved.
                                 ______
                                 
 Supplementary Material Submitted by Joe L. Outlaw, Ph.D., Professor, 
   Extension Economist, and Co-Director, Department of Agricultural 
  Economics, Agricultural and Food Policy Center, Texas A&M University
Insert
          Mr. Baird. . . .
          * * * * *
           . . . would you care to elaborate on the importance of 
        biotechnology and research and so on as we move forward in 
        agriculture?
          * * * * *
          Mr. Baird. I am not sure, Mr. Chairman, how much time I have 
        left, but if any of the other witnesses would like to comment--
        --
          The Chairman. Your time has expired, unfortunately.

    Biotechnology research and research in general is incredibly 
important in increasing the productive capacity of the existing fixed 
land base and reducing the costs of production. While this is not my 
area of expertise, I understand that the U.S. is generally being 
outspent on agricultural research by many of our major competitors. 
Over time, this would be expected to erode any competitive advantage 
U.S. producers have over producers from other countries. Especially in 
those situations where governments control the development, production 
and availability of new technologies.
                                 ______
                                 
                    Submitted Letter by Earthjustice
March 25, 202[2]

    Hon. David Scott,
    Chairman,
    House Committee on Agriculture ,
    Washington, D.C.

    Thank you for the opportunity to testify on the role of climate 
change in the agriculture sector, and how to take advantage of this 
sector's tremendous prospects to both reduce greenhouse gas (GHG) 
emissions and restore the amount of carbon lost from soil. This 
testimony highlights the need to prioritize agriculture's climate 
impact in the 2023 Farm Bill and offers recommendations on holistic, 
scalable approaches to agriculture and land management that should be 
incorporated into this critical legislation.
    Agriculture must be part of any solution to the climate crisis. 
Agriculture is highly vulnerable to the more extreme and variable 
weather that climate change is bringing, and our food and economic 
security depend upon both stabilizing our climate and increasing the 
resilience of our food system. Agriculture is also a major contributor 
to climate change, and we cannot reach our climate goals without more 
aggressively and effectively addressing this contribution.\1\ *
---------------------------------------------------------------------------
    \1\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 
1990-2019  (2021), https://www.epa.gov/sites/production/files/2021-04/
documents/us-ghg-inventory-2021-main-text.pdf. EPA concludes that 
agriculture's GHG emissions are about 10% of total U.S. GHG emissions; 
as explained below, this approach significantly understates the correct 
figure.
    * Editor's note: references annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    The urgency of the climate crisis must be met with effective 
answers. The 2023 Farm Bill provides a powerful tool to address 
agriculture's contributions to climate change. We offer this testimony 
to address key impacts of climate change in agriculture and explore the 
following points:

  1.  The 2023 Farm Bill must consider and account for the true climate 
            impact of agriculture, which should include the large 
            climate impact of agricultural land use and accurately 
            reflect the potent impact of methane and nitrous oxide 
            emissions. The 2023 Farm Bill should incentivize the many 
            agroecological practices that provide proven ways to reduce 
            GHG emissions and sequester and store carbon. Scaling up 
            these efforts and funding additional research into them 
            offer effective mitigation tools to address the climate 
            crisis.

  2.  The 2023 Farm Bill must center proven GHG reducing climate 
            solutions while identifying and rejecting false solutions 
            to address the climate crisis.

  3.  The 2023 Farm Bill must promulgate policies that meet the needs 
            of all those who are a part of our food system, including 
            workers and small-scale producers, and that enhance food 
            justice, environmental justice, and economic justice.

    Fortunately, agriculture can play a pivotal role in tackling the 
climate crisis. Implementation of well-documented climate-friendly 
agricultural practices can increase the amount of carbon removed from 
the atmosphere, increase the amount of carbon stored in soil, and/or 
reduce agricultural emissions of carbon dioxide, nitrous oxide, and 
methane. These practices will also often increase resilience to extreme 
weather, reduce environmental and public health harms, and, in most 
cases, over time, improve producer productivity or profitability. While 
proven, these practices are used on only small portions of U.S. 
farmland; policy changes are needed to dramatically accelerate their 
adoption. Crafting that policy is the task of this Committee, which has 
an important opportunity to make a huge impact and secure a resilient 
future through the 2023 Farm Bill.
I. The 2023 Farm Bill Should Consider and Address Agriculture's True 
        Climate Impact
    Given the tremendous impact climate change has on the agriculture 
sector, agriculture's significant contributions to the warming planet, 
and the very real threat posed by the climate crisis, this Committee 
must consider climate in the 2023 Farm Bill. As part of this 
undertaking, it is imperative the Committee understands the true 
climate footprint of the agricultural sector.
Figure 1. Climate impacts of from the agriculture sector extend far 
        beyond direct emissions on the farm.
        
        
    Though the Environmental Protection Agency (EPA) estimates that 
agriculture is responsible for about 10% of U.S. GHG emissions (see 
Figure 1, Bar 1),\2\ this figure excludes many factors that contribute 
additional emissions from the sector. This figure does not account for 
emissions from on-farm fuel and electricity use (see Figure 1, Bar 2) 
or the significant emissions associated with the manufacture of 
agricultural inputs like fertilizer (see Figure 1, Bar 3).
---------------------------------------------------------------------------
    \2\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 
1990-2019  (2021), https://www.epa.gov/sites/production/files/2021-04/
documents/us-ghg-inventory-2021-main-text.pdf.
---------------------------------------------------------------------------
    Additionally, these estimates do not account for the impacts of 
methane on policy-relevant timescales, as EPA utilizes 100 year 
timeframes rather than a more relevant 20 year timeframe (GWP20) 
accurately reflecting methane's concentrated warming impacts (see 
Figure 1, Bar 4).\3\ While the 100 year timeframe is common in 
scientific analysis, the U.S. is now debating policies to reduce 
emissions far sooner so the 20 year timeframe is more relevant for such 
discussions. The IPCC has consistently noted the need to appropriately 
tailor GWP choices to their appropriate policy contexts.\4\ The 20 year 
timeframe has also been adopted in policy contexts at the state-level, 
including for example, New York state's greenhouse gas inventory and in 
its climate planning.\5\ This revised framework will help policy makers 
recognize the tremendous importance of methane abatement, showing that 
agricultural methane emissions alone are about 10% of all U.S. GHG 
emissions on a policy relevant timescale. (See Figures 2 and 3).
---------------------------------------------------------------------------
    \3\ Intergovernmental Panel on Climate Change, Climate Change 2013: 
The Physical Science Basis  Ch. 8, at 714 tbl. 8-7 (2014) at 720.
    \4\ Priyadarshi R. Shukla, et al., Intergovernmental Panel on 
Climate Change, Climate Change and Land: An IPCC Special Report on 
Climate Change, Desertification, Land Degradation, Sustainable Land 
Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial 
Ecosystems.
    \5\ N.Y.S. Dep't Env't Conservation, 2021 Statewide Greenhouse Gas 
Emissions Report  (2021), https://www.dec.ny.gov/docs/
administration_pdf/ghgsumrpt21.pdf. See also, Robert W. Howarth. 
Methane emissions from fossil fuels: exploring recent changes in 
greenhouse-gas reporting requirements for the State of New York, 17 J. 
Integrative Env't Sci. 69-81 (2020), https://doi.org/10.1080/
1943815X.2020.1789666.
---------------------------------------------------------------------------
Figure 2. Greenhouse gas emissions calculated according to 100 year and 
        20 year global warming potentials (GWP), showing the 
        significant impact of timescale on estimating methane 
        emissions.
        
        
Figure 3. Anthropogenic methane emissions by source. EPA 2019. 
        Inventory of Greenhouse gas emissions and sinks.
        
        
    A major omission in this account of agriculture's climate footprint 
is related to land use. Each year, the conversion of grassland or 
forest to cropland and grazing land results in enormous losses of 
stored carbon. This is included in EPA's GHG Inventory but in another 
section attributed to another sector, while it is really a function of 
agriculture. See Figure 1, Bar 5.
    In addition, the true climate impact of clearing land for 
agriculture extends well beyond immediate losses from land 
conversion.\6\ The use of land for growing crops or raising livestock--
62% of the contiguous United States--precludes this land from 
continuing to sequester carbon at the rates it would have had that land 
been left undisturbed as native vegetation. full climate impact would 
include the ``quantity of carbon that could be sequestered annually if 
[that land] were instead devoted to regenerating forest [or 
grassland].'' See Figure 1, Bar 6. Adding this continuing yearly impact 
of prior land conversion to the annual agricultural system emissions 
significantly increases agriculture's true climate change footprint.\7\
---------------------------------------------------------------------------
    \6\ Matthew Hayek, et al., The Carbon Opportunity Cost of Animal-
Sourced Food Production on Land, 4 Nature Sustainability 21 (Jan. 
2021)
    \7\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 
1990-2019  (2021) at 2-3, Table 2-1, https://www.epa.gov/sites/
production/files/2021-04/documents/us-ghg-inventory-2021-main-text.pdf.
---------------------------------------------------------------------------
    Thus, when correctly calculated to include all agriculture related 
climate change impacts, it is clear that the overall impact of 
agriculture to climate change is equivalent to far more than only 10% 
of U.S. GHG emissions. A more complete accounting of these 
contributions including each of the factors laid out above raises this 
estimate closer in magnitude to total emissions from the transportation 
sector--and thus Congress must treat abatement of these emissions with 
equal importance. This estimate is in line with numerous recent 
estimates at the global scale, which place food and agricultural 
emissions at \1/3\ or more of anthropogenic greenhouse gas 
emissions.\8\
---------------------------------------------------------------------------
    \8\ Id. See Crippa, M., Solazzo, E., Guizzardi, D., et al. Food 
systems are responsible for a third of global anthropogenic GHG 
emissions. Nat. Food 2, 198-209 (2021). https://doi.org/10.1038/s43016-
021-00225-9; See also, Sonja J. Vermeulen, et al., Climate Change and 
Food Systems. Annual Review of Environment and Resources, 37 Ann. Rev. 
Env't & Resources 195 (2012).
---------------------------------------------------------------------------
    In addition to recognizing the broad climate impact of agriculture 
and the many ways in which this accounting is often underestimated by a 
failure to consider the factors above, it is also important to note 
that estimates of methane emissions from animal agriculture and soil 
nitrous oxide emissions are among the most uncertain \9\ and likely 
underestimated emission sources in EPA's GHG inventory. Improved 
measurement, monitoring and reporting is critical to establishing a 
valid baseline to guide efforts for emission reductions from 
agriculture. In particular, several recent studies indicate that 
estimates of methane emissions from animal agriculture substantially 
underestimate actual emissions.\10\
---------------------------------------------------------------------------
    \9\ See Peter H. Lehner & Nathan A. Rosenberg, Farming For Our 
Future: The Science, Law, and Policy of Climate-Neutral Agriculture 54-
57 (Environmental Law Inst. 2021).
    \10\ See Matthew N. Hayek & Scot M. Miller, Underestimates of 
methane from intensively raised animals could undermine goals of 
sustainable development, 16 Env't Rsch. Letters 63006 (2021), https://
doi.org/10.1088/1748-9326/ac02ef (and studies reviewed therein).
---------------------------------------------------------------------------
    Any solution to the climate crisis must focus not only on 
agriculture's potential to store more carbon in the soil, but also on 
the need to reduce agriculture's GHG emissions. The 2023 Farm Bill 
presents a powerful tool to address each of these sources of emissions 
in a way that not only ameliorates the threat of climate change, but 
also has the potential to increase agricultural productivity and farmer 
and rancher profitability.
II. The 2023 Farm Bill Should Incentivize Agroecological Practices that 
        Provide Proven Ways to Reduce GHG Emissions and Sequester and 
        Store Carbon in Soil.
    Several climate-friendly practices with demonstrated benefits are 
available to reduce agriculture's GHG footprint. A large body of 
scientific literature, in addition to traditional knowledge and 
experience, support the environmental benefits of these practices, 
making them excellent candidates for effectively and efficiently 
increasing carbon sequestration, reducing GHG emissions, and building 
climate resiliency. However, due to financial and technical barriers, 
adoption of some of the most effective climate-friendly practices 
remains low. This Committee should include in the 2023 Farm Bill 
incentives for the adoption of practices with the greatest climate 
benefits, while also supporting continued research on how to most 
effectively adopt these practices at scale across the nation, as these 
practices offer a true climate solution while also leading to higher 
yields, fewer inputs, and thus greater profitability.
    Agroforestry has a strong potential for restoring carbon stocks 
lost due to land conversion and increasing carbon sequestration 
relative to conventional farming--with realistic rates of adoption 
leading to carbon sequestration rates equal in magnitude to over a 
third of fossil fuel emissions in the U.S.\11\ Agroforestry practices, 
including alley cropping, silvopasture, and riparian forest buffers, 
integrate or re-introduce woody vegetation into crop and animal farming 
systems where the landscape would naturally support such vegetation. 
Alley cropping systems integrate trees and shrubs into crop production, 
while silvopasture refers to the integration of trees and shrubs with 
livestock activities.\12\
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    \11\ See Ranjith P. Udawatta & Shibu Jose, Agroforestry Strategies 
to Sequester Carbon in Temperate North America, 86 Agroforestry Sys. 
225 (2012).
    \12\ See, e.g., Shibu Jose & Sougata Bardhan, Agroforestry for 
Biomass Production and Carbon Sequestration: An Overview, 86 
Agroforestry Sys. 105 (2012); see also Ranjith P. Udawatta & Shibu 
Jose, Agroforestry Strategies to Sequester Carbon in Temperate North 
America, 86 Agroforestry Sys. 225 (2012).
---------------------------------------------------------------------------
    Improved nutrient management is another practice with enormous 
climate benefits. Synthetic nitrogen fertilizer application and other 
agricultural soil management practices account for about half 
(depending on timeframe of analysis) of GHG emissions from agriculture. 
In addition to representing a large proportion of the environmental 
footprint of agriculture, these emissions are responsible for over \3/
4\ of all nitrous oxide emissions across sectors in the U.S.\13\ 
Reducing nitrous oxide emissions from agriculture is particularly 
urgent as the warming potential of nitrous oxide is 265-298 times 
greater than carbon dioxide.\14\ Improving nutrient management 
practices, including precision application, cover crops and longer and 
more varied crop rotations (which naturally provide nutrients and thus 
reduce fertilizer needs), using natural rather than synthetic 
fertilizer (thus also avoiding the significant GHG emissions of 
fertilizer manufacturing), riparian buffers, and soil amendments, can 
greatly reduce the climate footprint of agriculture by reducing nitrous 
oxide and other emissions.\15\
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    \13\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 
1990-2018, 2-4 (2020), https://www.epa.gov/sites/production/files/
2020-04/documents/us-ghg-inventory-2020-main-text.pdf.
    \14\ Id. at 1-10, Table 1-3.
    \15\ See Nat. Res. Conservation Serv., Conservation Practice 
Standard Conservation, Nutrient Management Code 590  (2012), https://
www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1046433.pdf.
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    Many of these practices will also help increase soil carbon 
sequestration, thus further reducing net GHG emissions. These practices 
build organic matter by introducing a wider range of inputs into soil, 
maintaining soil cover throughout the year, and minimizing soil 
disturbance and erosion.\16\ Moreover, these practices prevent nutrient 
runoff and improve water quality, increase water retention and thus 
reduce the need for water inputs, and even avoid air pollution. In 
addition, these practices can reduce the vulnerability of crops to 
pests and pathogens, thereby reducing the need for pesticides that are 
harmful to pollinators and water quality,\17\ and further help protect 
biodiversity and thriving rural communities.
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    \16\ See, e.g., Christopher Poeplauab & Axel Dona, Carbon 
Sequestration in Agricultural Soils via Cultivation of Cover crops--A 
Meta-analysis, 33 Agric., Ecosystems & Env't 200 (2015); Jinshi Jian, 
et al., A Meta-analysis of Global Cropland Soil Carbon Changes Due to 
Cover Cropping, 143 Soil Biology & Biochemistry 107, 735 (2020); see 
also R. Lal, Soil Carbon Sequestration and Aggregation By Cover 
Cropping, 70 J. Soil & Water Conservation 329 (2015); C. Tonitto, et 
al., Replacing Bare Fallows With Cover Crops in Fertilizer-Intensive 
Cropping Systems: A Meta-analysis of Crop Yield and N Dynamics, 112 
Agric., Ecosystems & Env't 58 (2006); Meagan E. Schipanski, A Framework 
for Evaluating Ecosystem Services Provided By Cover Crops in 
Agroecosystems, 125 Agric. Sys. 12 (2014); Jason P. Kaye & Miguel 
Quemada, Using Cover Crops to Mitigate and Adapt to Climate Change. A 
Review, 37 Agronomy Sustainable Dev. 4 (2017).
    \17\ See Giovanni Tamburini, et al., Agricultural Diversification 
Promotes Multiple Ecosystem Services Without Compromising Yield, 6 
Sci. Advances 2020 eaba1715 (2020).
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    Accelerating adoption of these practices through technical and 
financial support and incentives, as well as through the conservation 
compliance program, and protecting land in long-term conservation 
programs are among the most effective strategies to reduce the climate 
footprint of agriculture. At the same time, avoiding the further 
conversion of grasslands is one of the most impactful agricultural 
activities to mitigate climate change.\18\
---------------------------------------------------------------------------
    \18\ See Joseph E. Fargione, et al., Natural Climate Solutions for 
the United States, 4 Sci. Advances eaat1869 (2018).
---------------------------------------------------------------------------
    In addition to cropland practices that can help mitigate climate 
change and build resilience to it, there are proven practices for 
grazing and raising livestock that can help achieve these goals and it 
is critical for the Committee to explore ways the 2023 Farm Bill can 
accelerate the adoption of these practices as well. Grazing is now 
conducted on about 800 million acres of the U.S.--the most widespread 
land use in the country. Managed rotational grazing systems have been 
shown \19\ to reduce soil loss and increase soil and plant carbon 
storage, helping to reduce net GHG emissions. Dry manure management 
produces a small fraction of the methane of the more typical wet 
management now used at most dairies and swine operations.\20\ Feed 
optimization, methane destruction, and other measures can all reduce 
the GHG impact of livestock.
---------------------------------------------------------------------------
    \19\ See Peter H. Lehner & Nathan A. Rosenberg, Farming For Our 
Future: The Science, Law, and Policy of Climate-Neutral Agriculture, 
84-88 (Environmental Law Inst. 2021).
    \20\ See IPCC, 2019 Refinement to the 2006 IPCC Guidelines for 
National Greenhouse Gas Inventories. Chapter 10: Emissions from 
Livestock and Manure Management  (2019). https://
www.ipccnggip.iges.or.jp/public/2019rf/pdf/4_Volume4/
19R_V4_Ch10_Livestock.pdf.
---------------------------------------------------------------------------
    With most livestock and poultry raised in a relatively few 
facilities (see Figure 4), changed practices at a relatively few 
facilities can make a big climate difference. Currently, animals are 
raised in heavily concentrated conditions at a small proportion of 
operations: over 50% of dairy cows in the United States are in the 4% 
of operations that stock 1,000 or more dairy cows. More than 90% of 
hogs in the United States are in the 12% of facilities that stock 2,000 
or more hogs, and more than \3/4\ of all cattle on feed in the United 
States are in the 5% of facilities that stock 1,000 or more cattle.\21\ 
Given that greenhouse gas emissions from enteric fermentation and 
manure are largely dependent on the number of animals raised in 
facilities, reducing emissions from these largest facilities has the 
potential to cut back total emissions significantly.
---------------------------------------------------------------------------
    \21\ See USDA National Agriculture Statistics Service state level 
data: https://sustainablefoodfarming.shinyapps.io/CAFOINVENTORY/.
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Figure 4. Concentration of U.S. Livestock by Facility Size. Data from 
        USDA Census of Agriculture.
        
        
    Each of these practices has proven climate benefits. They can 
increase the amount of carbon removed from the atmosphere, help restore 
the amount of carbon stored in soil, and/or reduce agricultural 
emissions of carbon dioxide, nitrous oxide, and methane. These 
practices will also often increase resilience to extreme weather, 
reduce environmental and public health harms, and, in most cases, over 
time, improve producer productivity or profitability. However, they are 
now used on only a small portion of U.S. grazing and crop land or 
animal operations. This Committee should focus on ways to greatly 
accelerate adoption of these practices, as well as increasing 
investment in research into their benefits and technical assistance to 
help with their adoption, when crafting the 2023 Farm Bill. Research, 
outreach and technical support, and financial assistance to increase 
adoption of these practices together would go a long way towards 
ameliorating agriculture's overall climate impact.
III. The 2023 Farm Bill Should Center Climate Solutions and Equitable 
        Access To USDA Programs
    In the 2023 Farm Bill, Congress has both an opportunity and 
obligation to invest in agricultural solutions to the climate crisis 
and empower farmers and ranchers to play key roles in addressing the 
warming climate. We urge Congress to consider policy solutions and 
programs that incentivize adoption of climate-friendly practices that 
are proven to sequester carbon and reduce GHG emissions. These 
practices not only effectively reduce agriculture's climate footprint, 
but they also help build resilience, improve water and air quality, and 
protect biodiversity. The 2023 Farm Bill provides a powerful ready-made 
tool that can provide funding for these practices, and for more 
research and technical assistance related to them, in an effort to 
provide a true solution to the growing climate crisis.
    This Committee should not only center agroecological practices in 
the 2023 Farm Bill, but it should also ensure that the policies and 
programs it funds in this legislation uplift the values of equity, 
inclusion, and dignity and that funding opportunities are equitably 
accessible to all producers. Congress and the USDA should recognize the 
traditional ecological knowledge from Black and Indigenous communities 
that have contributed to advancing environmental sustainability and 
responsible stewardship of natural resources. Many agroecological 
practices supported in USDA programs are rooted in traditional and 
ancestral knowledge from these communities. The farm bill should 
recognize these communities for their expertise and contribution, and 
Congress should advocate for Black, Indigenous People of Color (BIPOC) 
producers to benefit justly and fairly from USDA programs.
    Due to a long, enduring history of discriminatory and exploitative 
practices--including systemic denial of farm loans and other assistance 
to BIPOC producers by the U.S. Department of Agriculture--most of the 
country's farm, crop and range land is owned by white farmers and 
ranchers.\22\ Discriminatory practices and policies continue to plague 
the agricultural sector. With this problematic history in mind, the 
2023 Farm Bill must do more to remedy USDA's legacy of civil rights 
violations and racism that persists to this day by reforming current 
programs and funding schemes to address discriminatory practices. 
Congress should provide funding for technical assistance and outreach 
by diverse service providers with linguistic and cultural competency, 
partnering with community-based organizations and local community 
leaders who have earned trust of farmers and producers, employing BIPOC 
experts to lead trainings on issues unique and salient to local 
communities, and where possible, and make trainings and technical 
assistance opportunities credit-bearing in partnership with land grant 
universities. The farm bill should expand existing programs and offices 
that offer support and outreach to disadvantaged farmers and 
communities and should incorporate climate mitigation goals into these 
programs.
---------------------------------------------------------------------------
    \22\ See USDA National Agricultural Statistics Service Census of 
Agriculture 2017.
---------------------------------------------------------------------------
    At the same time this Committee considers ways to incentivize the 
suite of proven agroecological climate-friendly practices in the 2023 
Farm Bill, so too should it be wary of false climate solutions that 
have received recent attention, for example, biofuels, wood-based 
bioenergy (especially from whole trees), and biodigesters for livestock 
waste. Not only do many of these practices fail to reduce GHG emissions 
(when all factors are correctly analyzed), but they may in fact 
exacerbate them, while at the same time causing environmental and 
public health harms and worsening inequities in the agricultural 
system.
    A large proportion of farm bill programs support animal 
agriculture, including financing many practices that entrench polluting 
systems rather than facilitating transitions towards a climate-friendly 
food system. In particular, anaerobic biodigesters are very costly and 
largely ineffective with limited overall climate mitigation potential, 
especially when compared to alternative [manure] management methods. 
Because anaerobic biodigesters rely on the production of methane to be 
profitable, they incentivize increasing methane production and promote 
waste generation without impacting the much larger share of methane 
emissions from enteric fermentation produced at these operations. They 
are also usually [deployed] on only the largest animal operations, so 
any public support for them effectively worsens the consolidation of 
the industry and inequities of the system. Digesters also continue to 
pose or exacerbate hazards through groundwater and surface water 
contamination, do not address and can increase nitrous oxide emissions, 
and do not address the runoff of nitrogen into waterways. Moreover, 
methane leakage from these facilities can be substantial, causing them 
to be net sources of methane rather than lowering methane 
emissions.\23\ Furthermore, biodigesters release additional pollutants 
such as nitrogen oxides (NOX), sulfur dioxide, and 
particulate matter.\24\
---------------------------------------------------------------------------
    \23\ Montes, et al. 2013. American Society of Animal Science. 91: 
5070-5094. Mitigation of methane and nitrous oxide emissions from 
animal operations: a review of manure management mitigation options.;  
See also Dumont, et al. (2013). Methane emissions in biogas production. 
https://www.sciencedirect.com/science/article/pii/B9780857094988500117; 
See also Thomas Flesch, Raymond Desjardins and Devon Worth. (2011). 
Fugitive methane emissions from an agricultural biodigester.
    \24\ See Nicole Di Camillo (2011). Methane Digesters and Biogas 
Recovery--Masking the Environmental Consequences of Industrial 
Concentrated Livestock Production. https://escholarship.org/content/
qt52g318rv/qt52g318rv.pdf?t=mv6dpv.
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    In addition, Congress should consider the demand side of the food 
and agricultural systems and the role it can play in contributing to 
and addressing the climate crisis. Demand for production of certain 
agricultural goods--including, for example, ``renewable'' biomass for 
biofuels (corn, soy) and foods with a higher climate footprint (beef, 
dairy)--drives sustained or increasing GHG emissions. Reducing demand 
for such products while incentivizing a shift to those with lower 
climate change impacts provides powerful opportunities for addressing 
the warming planet. Among other tools, the government's procurement 
practices and marketing incentives should be closely considered.
    Thus, as this Committee determines what practices to include in its 
toolbox for tackling the climate crisis through the farm bill, it 
should consider not just methods of reducing GHG emissions, but also 
the broader environmental and social effects of greater adoption of 
such practices, both positive and negative.
          * * * * *
    In sum, we urge the Committee to include a climate focus in the 
2023 Farm Bill, given the role agriculture plays in the climate crisis 
and the tremendous opportunity it has to address it. The farm bill 
provides a ready-made tool that has powerful potential to reduce GHG 
emissions while improving productivity to feed the growing population, 
as well as increased profitability for our farmers and ranchers.
            Respectfully submitted,

Earthjustice
Washington, D.C.

CC:

Ranjani Prabhakar ([Redacted])
Carrie Apfel
Peter Lehner
Mustafa Saifuddin
                                 ______
                                 
           Submitted Statement by Environmental Working Group
    To avoid the worst effects of climate change, we must reduce 
greenhouse gas emissions from agriculture.
    Agriculture is a significant and growing source \1\ of greenhouse 
gas emissions that, if left unaddressed, will jeopardize our efforts to 
avoid a climate crisis. In particular, nitrous oxide \2\ emissions from 
fertilizing crops and animal feed, and the methane \3\ emissions from 
livestock and their manure, are growing sources of greenhouse gas 
emissions. Unless we reduce nitrous oxide, carbon dioxide and methane 
emissions from agriculture, we will fail to make the greenhouse gas 
reductions needed \4\ to avoid the worst impacts of climate change.
---------------------------------------------------------------------------
    \1\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/#agriculture/
entiresector/allgas/category/all.
    \2\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/#iallsectors/
allsectors/nitrousoxide/invent
sect/all.
    \3\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/#iallsectors/
allsectors/methane/invent
sect/all.
    \4\ https://www.science.org/doi/10.1126/science.aba7357.
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    Voluntary conservation programs administered by the Department of 
Agriculture (USDA) could play a significant role in reducing the 
impacts of farm pollution, reducing greenhouse gas emissions, and 
mitigating the effects of climate change.
    Unfortunately, many farmers are turned away by USDA \5\ * when they 
apply to participate in voluntary conservation programs because the 
agency lacks the resources to accommodate them. Last year alone, more 
than 100,000 farmers were turned away \6\ from USDA's two flagship 
working lands conservation programs. What's more, most USDA 
conservation funding flows to practices that fail to reduce emissions.
---------------------------------------------------------------------------
    \5\ https://www.ewg.org/news-insights/news/2021/08/growing-farm-
conservation-backlog-shows-need-congress-spend-smarter.
    * Editor's note: references annotated with  are retained in 
Committee file.
    \6\ https://www.ewg.org/news-insights/news/2021/08/growing-farm-
conservation-backlog-shows-need-congress-spend-smarter.
---------------------------------------------------------------------------
    To meet the climate challenge, Congress must increase funding for 
conservation programs and must ensure that practices that reduce 
greenhouse gas emissions are prioritized. Fortunately, the same 
practices that reduce nitrous oxide and methane emissions also improve 
air and water quality and make our farms better able to withstand the 
extreme weather caused by climate change.
    To address the climate crisis, the Committee should:

   Quickly enact the Build Back Better Act, which includes $27 
        billion for conservation practices that reduce greenhouse gas 
        emissions

   Make climate change the primary focus of working lands 
        conservation programs.

   Make long-term and permanent easements the primary focus of 
        land retirement and restoration programs.

   Support job creation in the plant-based \7\ and alternative 
        protein sectors.
---------------------------------------------------------------------------
    \7\ https://www.ewg.org/sites/default/files/2022-02/EWG 
Testimony_House Agriculture Committee - Sustainability in the Livestock 
Sector - 2-3-22.pdf.

   Reduce support for conservation practices that do not reduce 
---------------------------------------------------------------------------
        emissions.

   End support for ``climate-dumb'' conservation practices that 
        increase emissions.

    In the past year, USDA has taken steps to incorporate climate goals 
into conservation programs, including the establishment of a pilot 
program \8\ within EQIP, announcing a new initiative \9\ to finance the 
deployment of farming and forestry practices that reduce emissions, 
creating \10\ a new Climate-Smart Practice Incentive for general and 
continuous signups within the Conservation Reserve Program (CRP), and 
releasing \11\ an updated list of agriculture and forestry practices 
that reduce emissions for the Conservation Stewardship Program (CSP) 
and EQIP.
---------------------------------------------------------------------------
    \8\ https://directives.sc.egov.usda.gov/viewerFS.aspx?hid=46894.
    \9\ https://www.usda.gov/media/press-releases/2021/09/29/usda-
announces-3-billion-investment-agriculture-animal-health-and.
    \10\ https://www.fsa.usda.gov/news-room/news-releases/2021/usda-
announces-new-initiative-to-quantify-climate-benefits-of-conservation-
reserve-program.
    \11\ https://www.usda.gov/media/press-releases/2022/01/10/usda-
offers-expanded-conservation-program-opportunities-support.
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    Much more must be done to ensure that existing conservation 
programs are helping to meet our climate goals and to support job 
creation in the plant-based and alternative protein sectors.
    For example,

   Most of the practices identified by states as ``priority 
        practices'' to be eligible for 90 percent cost-share under EQIP 
        do not reduce greenhouse gas emissions or, in some cases, 
        actually increase emissions.

   Several practices eligible for enrollment in EQIP's 
        Conservation Incentive Contracts (CIC) either do not address 
        greenhouse emissions or actually increase emissions.

   The list of CSP ``climate-smart'' agriculture and forestry 
        practices does not include bundles of enhancements.

   Most Conservation Reserve Program acres are returned to 
        production after contracts expire, releasing soil carbon into 
        the atmosphere.

   Acres enrolled in the Conservation Reserve Enhancement 
        Program have fallen.

   Agricultural land easements do not require that producers 
        adopt any practices that reduce emissions as a condition of 
        enrollment.

   While USDA has provided nearly $50 billion \12\ in subsidies 
        to livestock operators since 1995, USDA has provided just $30 
        million to support jobs in the plant-based protein industry.
---------------------------------------------------------------------------
    \12\ https://www.ewg.org/news-insights/news/2022/02/usda-livestock-
subsidies-near-50-billion-ewg-analysis-finds.

    Some ``climate dumb'' conservation practices actually increase 
emissions.\13\ Other practices and enhancements financed through EQIP 
and CSP provide little to no benefit to the environment or public 
health. According to EWG analysis,\14\ payments for these structures, 
equipment or facilities appeared in \1/3\ of EQIP contracts but 
received nearly \2/3\ of EQIP payments, diverting badly needed 
resources from proven practices.
---------------------------------------------------------------------------
    \13\ https://www.ewg.org/sites/default/files/2022-02/EWG 
Conservation Testimony - Conservation Programs - 2-2-22.pdf.
    \14\ https://conservation.ewg.org/.
---------------------------------------------------------------------------
    Even if we stopped burning fossil fuels today, greenhouse gas 
emissions from food and farming could make a climate catastrophe 
unavoidable. Farmers are already bearing the brunt of the extreme 
weather caused by climate change. But, the devastating economic impacts 
of the climate crisis are not the only reason for farmers to act: as 
emissions from energy and transportation continue to fall, and 
emissions from fertilizer and animals grow due to rising protein 
demand, agriculture's contribution to the climate crisis will steadily 
increase. By 2050, greenhouse gas emissions from animals and the 
production of their feed could easily account for \1/3\ of U.S. 
emissions
    Thank you for the opportunity to submit testimony for the record.
                                 ______
                                 
           Submitted Statement by The Breakthrough Institute
    Despite being frequently overlooked in conversations about climate 
change, supporting public-agricultural research programs is a powerful, 
bipartisan climate mitigation strategy with clear economic co-benefits. 
Agricultural research benefits the climate by:

   Boosting agricultural productivity, enabling farmers to 
        produce more food on less land, with fewer inputs and 
        greenhouse gas emissions

   Advancing specific research areas--such as fertilizer 
        innovation and methane-inhibiting cattle feed additives--with 
        especially potential to reduce greenhouse gas emissions

    Since the 1960s, innovation-driven productivity advances have 
enabled farmers to reduce land use by nine percent and cut the carbon 
footprint per pound of milk and chicken by over 50 percent.\1\ 
Unfortunately, spending on agricultural research has stagnated, and 
much of our nation's agricultural research infrastructure is in 
disrepair. For example:
---------------------------------------------------------------------------
    \1\ FAOSTAT. https://www.fao.org/faostat/en/#home.

   Total public spending on agricultural research and 
        development fell by nearly 30 percent between 2002 and 2015 \2\ 
        *
---------------------------------------------------------------------------
    \2\ USDA ERS. ``Agricultural Research Funding in the Public and 
Private Sectors''  https://www.ers.usda.gov/data-products/
agricultural-research-funding-in-the-public-and-private-sectors/.
    * Editor's note: references annotated with  are retained in 
Committee file.

   Agricultural Research Service (ARS) facilities have about $1 
        billion in deferred maintenance \3\
---------------------------------------------------------------------------
    \3\ Press Release. 2018. ``King Announces Support for Legislation 
to Clear Maintenance Backlog, Improve Agricultural Research 
Facilities''  https://www.king.senate.gov/newsroom/press-releases/
king-announces-support-for-legislation-to-clear-maintenance-backlog-
improve-agricultural-research-facilities.

   Nearly 70 percent of agricultural research facilities at 
        colleges and universities, for example, are near the end of 
        their useful life \4\
---------------------------------------------------------------------------
    \4\ APLU. 2021. ``New Study Sounds Alarm about Agriculture School 
Infrastructure.''  https://www.aplu.org/news-and-media/News/new-study-
sounds-alarm-about-agriculture-school-infrastructure.

    The Federal Government cannot rely on the private-sector to make up 
---------------------------------------------------------------------------
for insufficient public funding, for a few reasons:

   Public and private agricultural research are complements, 
        not substitutes. The private-sector invests more in food and 
        feed manufacturing and farm machinery engineering, while the 
        public-sector conducts nearly all research related to the 
        environment and natural resources, human nutrition, and food 
        safety.\5\ In addition, public agricultural research tends to 
        spur additional private-sector investments in research.\6\
---------------------------------------------------------------------------
    \5\ Matthew Clancy, Keith Fuglie, and Paul Heisey. 2016. ``U.S. 
Agricultural R&D in an Era of Falling Public Funding''  Amber Waves. 
https://www.ers.usda.gov/amber-waves/2016/november/us-agricultural-r-d-
in-an-era-of-falling-public-funding/.
    \6\ John King, Andrew Toole, and Keith Fuglie. 2012. ``The 
Complementary Roles of the Public and Private Sectors in U.S. 
Agricultural Research and Development.''  Economic Brief. Vol. 19. 
https://www.ers.usda.gov/webdocs/publications/42858/
32186_eb19.pdf?v=0.: 2.

   Environmentally and socially beneficial research often has a 
        long payback period or is unlikely to result in 
        commercializable products, making it unattractive for private-
---------------------------------------------------------------------------
        sector investments.

    Increasing agricultural research funding in the 2023 Farm Bill--by 
boosting authorization levels for existing Title [VII] programs, 
authorizing new research programs, and providing some mandatory 
research funding--would yield huge climate and economic benefits. For 
example, relative to a business-as-usual scenario, doubling public 
agricultural research spending over 10 years would:

   Increase global crop production by 3.4 percentage points

   Reduce global crop prices by around 8.4 percentage points

   Reduce international agricultural land use by about 63,000 
        square miles (about the size of Iowa)

   Reduce global greenhouse gas emissions by at least 109 
        million metric tons carbon-dioxide equivalent per year (\1/6\ 
        of U.S. agricultural emissions) \7\
---------------------------------------------------------------------------
    \7\ Uris Baldos and Dan Blaustein-Rejto. 2021. ``Investing in 
Public R&D for a Competitive and Sustainable US Agriculture.''  
https://thebreakthrough.org/issues/food/investing-in-r-d-for-us-ag.

    Additional funding would allow USDA programs to accelerate research 
---------------------------------------------------------------------------
in high-impact areas, such as:

   Beef production--The U.S. could reduce emissions from beef 
        production by 48% if existing and emerging mitigation 
        technologies--such as methane-inhibiting feed additives for 
        grazing cattle and low-carbon cattle breeding--were improved 
        and fully adopted by 2030 \8\
---------------------------------------------------------------------------
    \8\ Dan Blaustein-Rejto, Alex Smith, and Emma Kovak. 2021. ``The 
Clean Cow: Cutting the Carbon Footprint of US Beef Production.''  
https://thebreakthrough.org/articles/the-clean-cow-web-version.

   Soil management--If applied on half of U.S. cropland, 
        enhanced rock weathering, an innovative practice that entails 
        spreading crushed silicate rocks on the soil, could remove 
        around 0.4 billion tonnes of carbon dioxide from the atmosphere 
        each year \9\
---------------------------------------------------------------------------
    \9\ Beerling, D.J., et al. 2020. ``Potential for large-scale 
CO2 removal via enhanced rock weathering with croplands.''  
Nature, 583 (7815). pp. 242-248 https://eprints.whiterose.ac.uk/163117/
1/Beerling%20et%20al%20%282020%29%20CO2%20removal%20via%20ERW%20with
%20croplands%20Nature.pdf.

    In order to adequately address the climate challenge, all USDA 
research programs and agencies will need sufficient funding so the 
Department can fund a diverse portfolio of agricultural research 
---------------------------------------------------------------------------
projects.

    For More Information:

Caroline Grunewald, Government Affairs Manager of Food & Agriculture.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Charles F. Conner, President and Chief Executive 
        Officer, National Council of Farmer Cooperatives; Co-Chair, 
        Food & Agriculture Climate Alliance
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. For the past couple years now, you've all heard me talk 
about the opportunity we have for climate to be a boon for agriculture 
rather than a boondoggle. One specific example I've spoken of many 
times, is the capability we already have for animal feed ingredients 
that improve the sustainability and enteric emissions of livestock, if 
only our regulatory system allowed for a pathway to approve these 
products. I'm proud that just last week we were able to secure 
additional funding to FDA's Center for Veterinary Medicine to continue 
working in this direction, but I fear this is still not keeping up with 
the innovation and technology that will be crucial to American 
agriculture's ability to sustainably feed the world ahead.
    Can you touch on the importance of clear, science-based, and timely 
regulations from Federal agencies, so America's farmers can 
sustainability increase production and resilience in the face of 
climate change with less regulatory burden?
    Answer. Congressman, you are exactly correct about increasing feed 
use efficiency or feed digestibility as an important means to further 
reduce the livestock and poultry sector's already small share of total 
U.S. greenhouse gas emissions. Quality research in these areas will 
help agriculture and the climate. We need that research and an 
expedited regulatory approval process to support farmers' and ranchers' 
access to such technological innovations. These include improved 
genetics developed using a range of breeding methods, such as gene 
editing, genomic enabled predictive breeding, and genetic engineering.
    You indicated a prime example of this when noting the lengthy 
regulatory approval process for feed additives and the significant 
impact these products can have on reducing emissions from livestock. It 
is important for FDA and other regulatory bodies to find an appropriate 
risk-based level of regulation of products such as feed additives or 
those utilizing biotechnology, without stalling innovation. We urge 
this Committee to take a closer look at the regulatory process for 
these innovative products such as feed additives which promote public 
health and animal well-being while reducing environmental impacts.
    Additionally, we encourage all agencies that regulate the food and 
agriculture sector to take a look at modernizing and streamlining 
approaches toward regulating products of biotechnology, especially as 
they have the potential to mitigate climate impacts, in order to keep 
pace with science and allow agriculture to have a positive role in 
reducing our nation's collective impact on the climate.

    Question 2. On a very similar note, I firmly believe the 
extraordinary achievements in biotechnology over the past several 
decades have given our farmers and ranchers innovative tools to produce 
higher yields with less inputs as well.
    For example, genetically engineered Nitrogen-fixing bacteria is 
used as a biofertilizer to enhance the plants' nutrients all while 
reducing soil runoff. I feel these cutting-edge technologies are also 
crucial for the Administration's goal to achieve additional, 
measurable, and verifiable carbon reductions and sequestration in 
agriculture.
    As the agriculture industry continues striving to play the role of 
a solution to climate change, what are ways to ensure farmers have 
access to and the interest in deploying new tools for climate impact 
such as biofertilizers and other biological products?
    Answer. As you note Congressman, we are in the midst of 
tremendously exciting advancements in agriculture developed through the 
use of biotechnology that can help the farmers' and ranchers' bottom 
lines while making significant contributions to our country's climate 
change objectives. These innovative technologies allow new plant 
varieties and animal breeds to continue to produce more with less--less 
water, less land, fewer inputs, and lower emissions. With the 
publication of USDA's final SECURE Rule in August of 2020, the 
regulatory framework for USDA is set. However, we believe that there 
are other areas where USDA can assist with furthering the adoption of 
biotechnology and its corresponding benefits. For example, as part of 
its responsibility under the Coordinated Framework, USDA should 
continue to be proactive in encouraging the Environmental Protection 
Agency (EPA) and the Food and Drug Administration (FDA) to publish 
risk- and science-based biotechnology regulations and guidance that 
foster innovation and increase the overall adoption of new 
biotechnologies.

    Question 3. Another area I feel strongly that our farmers and 
ranchers stand the opportunity to find benefit for their bottom line as 
well as their sustainability efforts are through bioenergy technologies 
that the 2018 Farm Bill helped pave the way for. One such technology 
that comes to mind is the use of anaerobic digesters to turn farm waste 
into valuable energy. While digesters have tremendous potential for 
producers and our greater national climate mitigation efforts, I often 
hear how hindered their adoption can be.
    Would any of you care to touch on the barriers your organizations 
have seen to a more widespread adoption of digesters, and ways we could 
help foster increased access to this technology?
    Answer. We also believe methane digesters have the potential to 
play a major role in helping dairy and livestock operations reduce 
emissions, but as you said, producers experience various barriers to 
installing this technology on their operations. The biggest impediments 
we hear about from producers are the extraordinary up-front 
installation costs as well as the human and financial resources needed 
to maintain the functionality of the digester long-term. Furthermore, 
identifying and maintaining profitable outlets for energy produced by 
the digester, such as through natural gas pipelines or creating 
electricity for the grid that returns a fair price to the producer, are 
significant challenges. Farmers already have full-time jobs and often 
don't have the time, expertise or financial resources to maintain a 
digester in a way that increases their bottom line. This is especially 
true for smaller producers where the economics of having a digester do 
not pan out for their operation size. However, we believe farmer co-ops 
could play a major role in mitigating these costs and risks, especially 
with the help of USDA programs such as the Rural Energy for America 
Program (REAP).
    REAP is an oversubscribed program and is in critical need of 
additional funding to meet demand. Expanding REAP's eligible entities 
to include farmer co-ops, regardless of the co-op's size, would help 
facilitate the wider adoption of renewable energy technologies such as 
anaerobic digesters. Co-ops are already trusted partners for farmers 
and could therefore play a major role in assisting with the adoption of 
this technology on behalf of their members to take the burden off of 
their producer-owners. As you noted, these are highly effective climate 
mitigation tools for reducing, destroying and converting methane and 
nitrous oxide emissions from livestock manure and other waste. We just 
need to break down the significant barriers to adoption facing 
producers and make digesters a more viable tool in the agriculture 
industry's climate mitigation strategy.

    Question 4. Last May, USDA announced a $10 million initiative to 
quantify the climate benefits of CRP contracts. When we idle land in 
the U.S., it sends a market signal to U.S. competitors to plant more 
which can result in negative environmental outcomes. For example, in 
2018, Reuters reported that as the world's largest soybean exporter, 
Brazil had plowed under more than \1/2\ of the Cerrado, a vital 
storehouse for carbon dioxide.
    Would this panel recommend that USDA take into consideration 
increased carbon emissions in competitor countries when policymakers 
idle productive land here at home?
    Answer. The supply and demand effects of a CRP signup domestically 
and internationally can vary from being very great to quite small, 
depending on the type of land involved or being targeted in the signup, 
the number of acres involved, and the other major highly variable 
forces at work that drive supply and demand. Such effects can have 
implications for greenhouse gas emissions. So yes, in general, USDA 
should take the effects on carbon emissions into account when making a 
CRP signup decision but must do so along with multiple other 
considerations that are relevant to that decision. Given that these 
considerations do not all lead to the same conclusion, USDA's task is 
to find the correct balance.
Response from Kristin Weeks Duncanson, Owner and Partner, Duncanson 
        Growers; Member, AGree Economic and Environmental Risk 
        Coalition *
---------------------------------------------------------------------------
    * Editor's note: Ms. Duncanson did not have a response for 
Questions 2-3.
---------------------------------------------------------------------------
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. On a very similar note, I firmly believe the 
extraordinary achievements in biotechnology over the past several 
decades have given our farmers and ranchers innovative tools to produce 
higher yields with less inputs as well.
    For example, genetically engineered Nitrogen-fixing bacteria is 
used as a biofertilizer to enhance the plants' nutrients all while 
reducing soil runoff. I feel these cutting-edge technologies are also 
crucial for the Administration's goal to achieve additional, 
measurable, and verifiable carbon reductions and sequestration in 
agriculture.
    As the agriculture industry continues striving to play the role of 
a solution to climate change, what are ways to ensure farmers have 
access to and the interest in deploying new tools for climate impact 
such as biofertilizers and other biological products?
    Answer. Innovation is critical in helping farmers address the 
threats from climate change. We try new things on our farm every year. 
This year we are again modifying our cover crop seed mix, growing rye 
as a cover to sell for seed, and transitioning 100 acres from 
conventional to organic corn.
    Biologics are piquing the interest of farmers partly as a result of 
consumer demands for sustainability and partly because of widening weed 
resistance to traditional crop protection products. Farmers are usually 
quick to adapt biotechnology in many forms. The opportunity to reduce N 
use for cost and environmental reasons are good motivators for adapting 
to biologics but, like anything, you have to balance the use.
    The trusted advisors that we consult will play the biggest role in 
deploying these technologies: our crop consultant, research from our 
land-grant universities, and our local co-op. And we all know that 
farmers watch either closely and farmer networks are key. When safer, 
more environmentally-friendly products work on one farmer's crop, her 
neighbors will take note.

    Question 2. Another area I feel strongly that our farmers and 
ranchers stand the opportunity to find benefit for their bottom line as 
well as their sustainability efforts are through bioenergy technologies 
that the 2018 Farm Bill helped pave the way for. One such technology 
that comes to mind is the use of anaerobic digesters to turn farm waste 
into valuable energy. While digesters have tremendous potential for 
producers and our greater national climate mitigation efforts, I often 
hear how hindered their adoption can be.
    Would any of you care to touch on the barriers your organizations 
have seen to a more widespread adoption of digesters, and ways we could 
help foster increased access to this technology?
    Question 3. Last May, USDA announced a $10 million initiative to 
quantify the climate benefits of CRP contracts. When we idle land in 
the U.S., it sends a market signal to U.S. competitors to plant more 
which can result in negative environmental outcomes. For example, in 
2018, Reuters reported that as the world's largest soybean exporter, 
Brazil had plowed under more than half of the Cerrado, a vital 
storehouse for carbon dioxide.
    Would this panel recommend that USDA take into consideration 
increased carbon emissions in competitor countries when policymakers 
idle productive land here at home?
Response from Hon. Heidi Heitkamp, Co-Chair, Farm and Forest Carbon 
        Solutions Task Force, Bipartisan Policy Center
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. Another area I feel strongly that our farmers and 
ranchers stand the opportunity to find benefit for their bottom line as 
well as their sustainability efforts are through bioenergy technologies 
that the 2018 Farm Bill helped pave the way for. One such technology 
that comes to mind is the use of anaerobic digesters to turn farm waste 
into valuable energy. While digesters have tremendous potential for 
producers and our greater national climate mitigation efforts, I often 
hear how hindered their adoption can be.
    Would any of you care to touch on the barriers your organizations 
have seen to a more widespread adoption of digesters, and ways we could 
help foster increased access to this technology?
    Answer. Anaerobic digesters work best at farms that collect large 
amounts of manure as a liquid or slurry each day. An anaerobic digester 
is a closed system that harnesses the natural process of anaerobic 
digestion to produce biogas and other useful coproducts. The U.S. 
Environmental Protection Agency (EPA) AgSTAR Program estimates that 
biogas recovery systems are technically feasible at over 8,000 large 
dairy and hog operations alone.\1\ Overall, 317 [1] 
anaerobic digesters are operating at livestock farms in the United 
States. Policy opportunities to address barriers and increase access to 
digester technology include:
---------------------------------------------------------------------------
    \1\ AgSTAR: Biogas Recovery in the Agriculture Sector D U.S. EPA 
(https://www.epa.gov/agstar).
    \[1]\ https://www.epa.gov/agstar/livestock-anaerobic-digester-
database.

   Providing Financial Assistance: One of the biggest obstacles 
        to the widespread adoption of on-farm anaerobic digestion has 
        been cost. To help pay for up-front capital costs, anaerobic 
        digester operators may use several funding 
        sources,[2] * including grants, cash reimbursements, 
        loan guarantees, industrial bonds, private funding, and other 
        cost-sharing agreements. USDA programs that fund anaerobic 
        digesters include the Rural Energy for America Program (REAP) 
        and the Natural Resources Conservation Service (NRCS) 
        Environmental Quality Incentives Program (EQIP).
---------------------------------------------------------------------------
    \[2]\ https://www.epa.gov/sites/default/files/2014-12/documents/
funding_digestion.pdf.

    * Editor's note: footnotes annotated with  are retained in 
Committee file.

   Facilitating Connection to Markets: In addition, up-front 
        capital and operating costs may be offset by revenue generated 
        from the digester system's operation. These include the sale of 
        electricity, fuel, and other co-products--like soil amendments, 
        compost, and fertilizer--that are generated by the system. 
        Examples include innovative American-made fertilizer, seed and 
        agriculture inputs, and retail, including access to retail 
        through wholesale and distribution markets.\2\
---------------------------------------------------------------------------
    \2\ USDA Announces Plans for $250 Million Investment to Support 
Innovative American-made Fertilizer to give USFarmers more choices in 
the Marketplace D USDA  (https://www.usda.gov/media/press-releases/
2022/03/11/usda-announces-plans-250-million-investment-support-
innovative).

   Assisting with Project Planning and Development: It can be 
        complicated to ensure that enough funding will be available to 
        make an individual anaerobic digester project pencil out in 
        terms of both up-front capital costs and ongoing operating and 
        maintenance costs. Technical assistance is critical to break 
        down information barriers, especially for medium and small 
        farms. Anaerobic digesters can be worth the investment at a 
        small farm depending on the rate obtained for the sale of 
        electricity back to the local utility, from carbon credits, or 
        from potential sales of system-related coproducts (e.g., 
        composts and fertilizers). Thermal applications for the biogas 
        may be an excellent option in place of electricity generation. 
        Also, smaller farms may benefit from co-digestion of other 
        biomass feedstocks (e.g., food scraps) to boost biogas 
        production and increase the financial viability of the project. 
        Examples include the aforementioned USDA REAP and the EPA 
---------------------------------------------------------------------------
        AgStar programs.

   Research & Development: Use of anaerobic digestion at 
        poultry and beef operations is also growing as new technologies 
        enter the market. Although projects at poultry and beef farms 
        are technically feasible, their economic feasibility can vary.

    Question 2. Last May, USDA announced a $10 million initiative to 
quantify the climate benefits of CRP contracts. When we idle land in 
the U.S., it sends a market signal to U.S. competitors to plant more 
which can result in negative environmental outcomes. For example, in 
2018, Reuters reported that as the world's largest soybean exporter, 
Brazil had plowed under more than half of the Cerrado, a vital 
storehouse for carbon dioxide.
    Would this panel recommend that USDA take into consideration 
increased carbon emissions in competitor countries when policymakers 
idle productive land here at home?
    Answer. Many factors influence producer decisions to bring new 
lands into production or to enroll or re-enroll in programs like the 
USDA Conservation Reserve Program (CRP), including the overall 
availability of prime agricultural lands, costs of converting lands 
from rangeland or forests to cropland, expected soil moisture 
conditions and input costs. According to recent USDA analysis from the 
Natural Resources Inventory (NRI), only 1.3% of prime farmland is 
enrolled in the CRP, while 25 times this amount of prime farm acreage 
(or over 100 million acres) exists outside the program that is 
presently not in crop production and is managed as rangeland, 
pastureland, and forestland.\3\
---------------------------------------------------------------------------
    \3\ March 2022 Letter to Grain and Field Association from Secretary 
Vilsack regarding the Conservation Reserve Program and the Ukraine 
Crisis:  https://www.politico.com/f/?id=0000017f-efb9-d0cd-a3ff-
ffb9e0830000.
---------------------------------------------------------------------------
    With this additional supply of high-quality potential cropland 
already available and the relatively marginal production potential 
within CRP acreage, it is unlikely that a drastic change to farm CRP 
acres intensively would have significant impacts on overall production 
yields and thus influence global supply trends and equally complex 
planting and land-use decisions in foreign markets. While CRP likely 
has no measurable impact on deforestation rates in Brazil and 
associated emissions, USDA no doubt must maintain a vested interest in 
combating tropical deforestation and land conversion that results in 
harmful impacts to wildlife, water supplies and global greenhouse gas 
emissions.
    USDA analysis also shows that CRP is no longer dominated by whole 
farm and whole field enrollment, but instead is comprised of grassland 
that is regularly hayed and grazed (especially under flexibility 
afforded under drought conditions), a series of small buffers, filter 
strips, and wetlands at the edges of fields (predominantly installed to 
provide targeted water quality benefits) and some lands in forests or 
shelterbelts. Accordingly, CRP is a vital part of producers' working 
lands operations, useful in adapting to changing climate conditions and 
integral to their commitments to stewardship and sustainability.
    The capacity to quantify these conservation benefits remains 
critical to enhancing the value proposition of U.S. agriculture broadly 
and more specifically in ensuring that producers are acknowledged and 
accounted for through their commitments to combat climate change 
through voluntary and incentive-based programs. In response to 
corporate sustainability initiatives, emerging trade dynamics and other 
factors incorporating climate considerations in the marketplace, CRP is 
likely to continue to be an asset for U.S. producers.
Response from Shakera Raygoza, Owner, Terra Preta Farm; CFAP2 Technical 
        Assistant, National Young Farmers Coalition
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. Another area I feel strongly that our farmers and 
ranchers stand the opportunity to find benefit for their bottom line as 
well as their sustainability efforts are through bioenergy technologies 
that the 2018 Farm Bill helped pave the way for. One such technology 
that comes to mind is the use of anaerobic digesters to turn farm waste 
into valuable energy. While digesters have tremendous potential for 
producers and our greater national climate mitigation efforts, I often 
hear how hindered their adoption can be.
    Would any of you care to touch on the barriers your organizations 
have seen to a more widespread adoption of digesters, and ways we could 
help foster increased access to this technology?
    Answer. Lack of awareness on anaerobic digesters, costs, and city 
regulations are the barriers we face. Young farmers also largely prefer 
other mechanisms for climate mitigation, such as compost management.

    Question 2. Last May, USDA announced a $10 million initiative to 
quantify the climate benefits of CRP contracts. When we idle land in 
the U.S., it sends a market signal to U.S. competitors to plant more 
which can result in negative environmental outcomes. For example, in 
2018, Reuters reported that as the world's largest soybean exporter, 
Brazil had plowed under more than half of the Cerrado, a vital 
storehouse for carbon dioxide.
    Would this panel recommend that USDA take into consideration 
increased carbon emissions in competitor countries when policymakers 
idle productive land here at home?
    Answer. My recommendation is that USDA should focus on offsets 
domestically, as well as climate-smart agriculture, so that we can be 
leaders internationally on this front.
Response from Hon. Glenda Humiston, Ph.D., Vice President, Agriculture 
        and Natural Resources, University of California; Director, 
        Agricultural Experiment Station and Cooperative Extension 
        Service
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. Another area I feel strongly that our farmers and 
ranchers stand the opportunity to find benefit for their bottom line as 
well as their sustainability efforts are through bioenergy technologies 
that the 2018 Farm Bill helped pave the way for. One such technology 
that comes to mind is the use of anaerobic digesters to turn farm waste 
into valuable energy. While digesters have tremendous potential for 
producers and our greater national climate mitigation efforts, I often 
hear how hindered their adoption can be.
    Would any of you care to touch on the barriers your organizations 
have seen to a more widespread adoption of digesters, and ways we could 
help foster increased access to this technology?
    Answer. Funding is needed for both support dairy farms installing 
equipment, such as CDFA's Dairy Digester Research and Development 
Program (DDRDP), and infrastructure to facilitate distribution of the 
renewable natural gas (RNG). This takes both investment and 
opportunities to scale up projects. Below is a great example:
    Aemetis Biogas Central Dairy Digester Project's dairy renewable 
natural gas (RNG) cleanup and compression unit and interconnection with 
PG&E's gas pipeline in Keyes, California. This project involves a 
cluster that, when complete, will include 60 dairy farms. It currently 
counts eight dairy operations, funded partly by CDFA's Dairy Digester 
Research and Development Program (DDRDP) with more than $11 million in 
2018 and 2020. In addition to the CDFA funding, award recipients 
provided another $14 million in matching funds for the total cost of 
over $25 million in funding. The projects generate RNG which is sent to 
the newly inaugurated centralized conditioning facility for processing 
and injection into the utility common carrier natural gas pipeline. The 
methane greenhouse gas reductions achieved through these projects are 
estimated to be equivalent to removing 18,000 passenger vehicles from 
the roads each year for 10 years or providing electricity to 17,000 
homes each year for 10 years.

    Question 2. Last May, USDA announced a $10 million initiative to 
quantify the climate benefits of CRP contracts. When we idle land in 
the U.S., it sends a market signal to U.S. competitors to plant more 
which can result in negative environmental outcomes. For example, in 
2018, Reuters reported that as the world's largest soybean exporter, 
Brazil had plowed under more than half of the Cerrado, a vital 
storehouse for carbon dioxide.
    Would this panel recommend that USDA take into consideration 
increased carbon emissions in competitor countries when policymakers 
idle productive land here at home?
    Answer. USDA should take many factors into account when creating 
policy to reduce carbon emissions in agriculture, such as effective 
practices, cost/benefit analyses, and ecosystem responses.
Response from Joe L. Outlaw, Ph.D., Professor, Extension Economist, and 
        Co-Director, Department of Agricultural Economics, Agricultural 
        and Food Policy Center, Texas A&M University
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. Another area I feel strongly that our farmers and 
ranchers stand the opportunity to find benefit for their bottom line as 
well as their sustainability efforts are through bioenergy technologies 
that the 2018 Farm Bill helped pave the way for. One such technology 
that comes to mind is the use of anaerobic digesters to turn farm waste 
into valuable energy. While digesters have tremendous potential for 
producers and our greater national climate mitigation efforts, I often 
hear how hindered their adoption can be.
    Would any of you care to touch on the barriers your organizations 
have seen to a more widespread adoption of digesters, and ways we could 
help foster increased access to this technology?
    Answer. Anaerobic digester technology has been available for 
decades without widespread adoption. Roughly 25 years ago I conducted 
research over this topic and found two primary reasons for slow 
adoption. First, the initial cost of installing the digester is 
substantial and in the early years of digesters, the only way to recoup 
and this cost was to generate electricity and sell excess electricity 
back into the grid to reduce farm energy costs. At that time, there 
were states that did not allow net metering (allowing the meter to turn 
backward reducing farm energy costs) so truly many early digesters were 
just an additional cost with limited ability to have it pay for itself. 
While there have always been environmental benefits to methane capture, 
many producers did not see that as enough of an incentive to pay the 
cost when the majority in the industry were not doing it.
    Over time, digester technology has evolved and programs such as 
those administered by the State of California have paid for the 
installation of the digester (even outside of California) with 
stipulations the resulting energy is shipped to California. Currently 
there are companies who will pay the installation costs for the farmer 
in exchange for control over the energy produced. Currently I have a 
masters student who is doing an economic analysis of the new approaches 
which should be completed early next year.

    Question 2. Last May, USDA announced a $10 million initiative to 
quantify the climate benefits of CRP contracts. When we idle land in 
the U.S., it sends a market signal to U.S. competitors to plant more 
which can result in negative environmental outcomes. For example, in 
2018, Reuters reported that as the world's largest soybean exporter, 
Brazil had plowed under more than half of the Cerrado, a vital 
storehouse for carbon dioxide.
    Would this panel recommend that USDA take into consideration 
increased carbon emissions in competitor countries when policymakers 
idle productive land here at home?
    Answer. I think first I would ask USDA to determine exactly where 
U.S. producers rank relative to our primary competitors in terms of 
emissions from agricultural production. Brazil has been using no-till 
technologies on a widespread basis for many years and could be 
considered by some to superior to the U.S. (if you ignore the initial 
burning of forests) when comparing emissions.


 
                     A 2022 REVIEW OF THE FARM BILL

                  (HORTICULTURE AND URBAN AGRICULTURE)

                              ----------                              


                        TUESDAY, MARCH 29, 2022

                  House of Representatives,
 Subcommittee on Biotechnology, Horticulture, and Research,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Stacey E. Plaskett [Chair of the Subcommittee] presiding.
    Members present: Representatives Plaskett, Delgado, Brown, 
Schrier, Panetta, Pingree, Carbajal, Rush, Baird, Davis, Bacon, 
Jacobs, Balderson, and Letlow.
    Staff present: Lyron Blum-Evitts, Malikha Daniels, Martin 
Prescott III, Emily Pliscott, Ricki Schroeder, Patricia 
Straughn, Jennifer Tiller, Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. STACEY E. PLASKETT, A DELEGATE IN 
                  CONGRESS FROM VIRGIN ISLANDS

    The Chair. This hearing of the Subcommittee on 
Biotechnology, Horticulture, and Research entitled, A 2022 
Review of the Farm Bill: Horticulture and Urban Agriculture, 
will come to order.
    Welcome, and thank you for joining us for today's hearing. 
After brief opening remarks, Members will receive testimony 
from our witnesses today, and then the hearing will be open to 
questions. In consultation with the Ranking Member and pursuant 
to Rule XI(e), I want to make Members of the Subcommittee aware 
that other Members of the full Committee may join us today. And 
this is my opening statement.
    Good morning, and thank you to my colleagues and our 
witnesses for joining me today as we review the 2018 Farm Bill, 
Horticulture Title, and urban agriculture. This will be a two-
panel hearing where we will hear from the USDA Under Secretary 
Moffitt and Natural Resources Conservation Service Chief Cosby 
on our first panel, followed by a second panel with industry 
stakeholders and producers.
    The Horticulture Title of the farm bill covers programs 
that support the specialty crop industry, USDA-certified 
organic products--both crops and animals--hemp, local 
agricultural markets, and more. In my district of the U.S. 
Virgin Islands, farmers are mostly small and local producers. 
Many of these producers participate in programs such as the 
USDA's local agriculture programs, among others, so today's 
topics are very important to me.
    While other farm bill titles can benefit these sectors, 
today's conversation will focus on the Horticulture Title 
provisions and the specific provisions related to urban 
agriculture in the 2018 Farm Bill. Some of these provisions 
include the creation of the Local Agricultural Market Program 
to support the development, coordination, and expansion of 
domestic direct-to-consumer marketing, local and regional food 
markets, and value-added agricultural products and the 
establishment of an Office of Urban Agriculture and Innovative 
Production at USDA to provide urban ag producers resources to 
take advantage of USDA programs and initiatives and to promote 
urban, indoor, and other agricultural practices.
    Other provisions in the 2018 Farm Bill also enhanced 
enforcement of organic products, limited programmatic fraud, 
developed new technologies, strengthened USDA organic 
certifications, and provided organic producers with accurate 
data collection to ensure that organic agriculture is part of 
the climate-smart agriculture solutions. Producers in these 
sectors have been able to leverage programs in the Horticulture 
Title to face the challenges posed by the COVID-19 pandemic.
    As we move toward a greater sense of normalcy, we are 
invested in making sure producers in the industry have the 
necessary resources in this space and particularly when it 
comes to addressing the unprecedented supply chain disruption 
and challenges to market access many producers experienced 
during the pandemic. Today's hearing presents an important 
opportunity to conduct oversight into the programs from the 
2018 Farm Bill and consider how we best support producers and 
stakeholders.
    [The prepared statement of Ms. Plaskett follows:]

 Prepared Statement of Hon. Stacey E. Plaskett, a Delegate in Congress 
                          from Virgin Islands
    Good morning, and thank you to my colleagues and our witnesses for 
joining me today as we review the 2018 Farm Bill Horticulture Title and 
Urban Agriculture. This will be a two-panel hearing where we will hear 
from USDA Under Secretary Moffitt and Natural Resources Conservation 
Service (NRCS) Chief Cosby on our first panel, followed by a second 
panel with industry stakeholders and producers.
    The Horticulture Title of the farm bill covers programs that 
support the specialty crop industry, USDA-certified organic products 
(crops and animals), hemp, local agricultural markets, and more. In my 
district of the U.S. Virgin Islands, farmers are mostly small and local 
producers. Many of these producers participate in programs such as 
USDA's local agriculture programs, among others, so today's topics are 
very important to me.
    While other farm bill titles can benefit these sectors, today's 
conversation will focus on the Horticulture Title provisions and the 
specific provisions related to urban agriculture in the 2018 Farm Bill.
    Some of those provisions include the creation of the Local 
Agriculture Market Program to support the development, coordination, 
and expansion of domestic direct-to-consumer marketing, local and 
regional food markets, and value-added agricultural products and the 
establishment of an Office of Urban Agriculture and Innovative 
Production at USDA to provide urban ag producers resources to take 
advantage of USDA programs and initiatives and to promote urban, 
indoor, and other agriculture practices.
    Other provisions in the 2018 Farm Bill also enhanced enforcement of 
organic products, limited programmatic fraud, developed new 
technologies, strengthened USDA organic certifications, and provided 
organic producers with accurate data collection to ensure that organic 
agriculture is part of climate-smart agriculture solutions.
    Producers in these sectors have also been able to leverage programs 
in the Horticulture Title to face the challenges posed by the COVID-19 
pandemic. As we move toward a greater sense of normalcy, we are 
invested in making sure producers and the industry have the necessary 
resources in this space, particularly when it comes to addressing the 
unprecedented supply-chain disruptions and challenges to market access 
many producers experienced during the pandemic.
    Today's hearing presents an important opportunity to conduct 
oversight into programs from the 2018 Farm Bill and consider how we 
should best support producers and stakeholders.

    The Chair. I would now like to welcome the distinguished 
Ranking Member, the gentleman from Indiana, Mr. Baird, for any 
opening remarks he would like to give.

 OPENING STATEMENT OF HON. JAMES R. BAIRD, A REPRESENTATIVE IN 
                     CONGRESS FROM INDIANA

    Mr. Baird. Thank you, Madam Chair. I appreciate everyone 
being here and appreciate all the Committee having the 
opportunity to have this kind of hearing.
    I think this hearing marks an important step as this is our 
first hearing to review the Horticulture Title of the 2018 Farm 
Bill. So as we prepare for the next farm bill, it is important 
to hear from both USDA and stakeholders to learn what is 
working and what is not. The Horticulture Title is broad and it 
covers a variety of issues, including specialty crop, invasive 
species, plant health, crop protection tools, local agriculture 
markets, food safety, and hemp.
    While today's hearing lends itself to provisions in title 
X, it is important to note there are provisions in other titles 
of the farm bill that impact the horticultural industry. I look 
forward to future oversight of these other provisions.
    The specialty crop industry is very diverse and includes 
fruits and vegetables, tree nuts, dried fruits, and 
horticulture and nursery crops. The sheer diversity and unique 
set of challenges for this industry can make the development of 
specialty crop policies difficult. However, one program that 
has proven to be effective is the Specialty Crop Block Grant 
Program. This program was first funded in 2006 and provides 
State Departments of Agriculture funds to award promotion and 
marketing grants aimed at improving the competitiveness of 
specialty crops in the United States. I believe that one reason 
this program is so successful is because it allows states to 
fund projects that are unique to their specialty crop 
industries.
    Another important program authorized in the Horticulture 
Title is the Plant Pest and Disease Management and Disaster 
Prevention Program, which works to strengthen, prevent, detect, 
and mitigate invasive species. As we all know too well, 
invasive species can have a significant impact on the 
agricultural industry. Both USDA and State Departments of 
Agriculture play a critical role in controlling the spread and 
eventually eradicating these invasive species. I am pleased 
that my colleagues found it necessary to maintain the 
significant advances made in 2014 for this program, and I look 
forward to learning how we can further improve this program to 
prevent the spread of invasive species.
    Another important provision I am excited to hear more about 
today is the creation of the FIFRA Interagency Working Group in 
the 2018 Farm Bill. This working group, consisting of USDA, 
EPA, Department of the Interior, the Department of Commerce, 
and the Council of Environmental Quality is designed to help 
improve the consultation process required under the Endangered 
Species Act for pesticide registration and registration review. 
I am all too familiar with just how cumbersome this interagency 
cooperation can be, especially in regard to the ESA. It is 
important that producers have continued access to these 
critical tools to protect their crops from damaging insects and 
weeds.
    The past three farm bills have shown significant progress 
in the Horticulture Title. However, as much has changed in the 
world since 2018, I am eager to hear more about the impacts and 
challenges of these programs and suggested ways we can improve 
the delivery. I thank Under Secretary Moffitt and Chief Cosby 
and all the other witnesses for taking the time to be here with 
us today. Your insight and expertise and service to agriculture 
are greatly appreciated, and I am looking forward to having a 
robust conversation about programs within the Horticulture 
Title today.
    And with that, Madam Chair, I yield back.
    The Chair. Thank you to my Ranking Member.
    I want to thank our witnesses who are with us today. We 
have two panels. Our first panel I am pleased to welcome two 
distinguished individuals. Our first witness is Ms. Jenny 
Lester Moffitt, who serves as the Under Secretary of Marketing 
and Regulatory Programs at the United States Department of 
Agriculture.
    Our second witness for the first panel is Mr. Terry Cosby, 
who is the Chief of the Natural Resources Conservation Service. 
Welcome you both today. We will now proceed to hearing your 
testimony. All other Members are requested to submit their 
opening statements for the record so that the witnesses may 
begin their testimony and to ensure there is ample time for 
questions. Each of our witnesses will have 5 minutes. The timer 
should be visible to you, and that timer will count down to 
zero, at which point your time will have expired.
    Under Secretary Moffitt, thank you so much for joining us 
and please begin when you are ready.

STATEMENT OF HON. JENNIFER LESTER MOFFITT, UNDER SECRETARY FOR 
                   MARKETING AND REGULATORY 
           PROGRAMS, U.S. DEPARTMENT OF AGRICULTURE, 
                        WASHINGTON, D.C.

    Ms. Moffitt. Thank you, Chair Plaskett, Ranking Member 
Baird, and Members of the Committee. Thank you so much for the 
opportunity to be before you today to share the work of the 
United States Department of Agriculture's efforts to build more 
and better markets for American agriculture.
    In my role at USDA, I have had the honor of meeting people 
around the nation who are building innovative partnerships to 
solve problems in their communities. Earlier this month, I 
visited Atlanta. Seven years ago, the public transit authority 
there, MARTA, partnered with farmers and organizations to open 
fresh markets at transit stations located in neighborhoods with 
limited food access. In 2018, the program received funding 
through the Local Food Promotion Program funded through the 
farm bill to expand their reach. When I visited, I saw the 
impact firsthand of people having access to fresh, healthy 
produce. The program shows just how important partnerships are 
to addressing local and regional food needs. And it 
demonstrates one of the core values of our goals at USDA, to 
create more and better markets for farmers and consumers, not 
from the top down, but from the bottom up and the middle out. 
This is the power of the farm bill. And the authorities in 
funding provided in it by Congress are helping us strengthen 
and build a more resilient food system in communities across 
the country in a variety of ways because there is no one-size-
fits-all solution to approaching the challenges faced by 
producers and consumers.
    As I travel the country, I hear repeatedly how important 
the Local Agriculture Marketing Program is to farmers and to 
communities. That is why we dedicated $130 million from the 
American Rescue Plan Act (Pub. L. 117-2) to expand and 
strengthen opportunities for farmers to sell to institutions 
such as universities, hospitals, and settings operated by 
local, Tribal, and state governments through the LAMP Program. 
And that is why we have also dedicated $600 million to creating 
new programs to build partnerships that improve local food 
procurement opportunities and marketing channels while 
providing nutritious food to food banks, pantries, and schools.
    Partnerships are critical to building more and better 
markets. Just look at organic agriculture. The public-private 
partnership that drives the Certified Organic Program is 
thriving. Between 2019 and 2020 organic retail sales increased 
13 percent. We will continue to protect the organic seal, 
supporting aspiring farmers, and strengthen the organic 
program.
    So that is why I am pleased today to announce that the 
review of the Origin of Livestock final rule is complete, and 
details will be made later today. I know many Members of this 
Committee have worked for a long time on this rule, and we are 
thankful for your leadership. This rule will give organic 
producers more opportunities to compete fairly in the market by 
establishing clear standards that ensure more consistent 
production and certification practices. At the same time, we 
need to support farmers transitioning to organic to provide 
increased opportunities for mentorship. With partnership in 
mind, we are developing this initiative as Secretary Vilsack 
announced last summer to invest at least $200 million to 
support farmers transitioning to organic.
    Partnership also drives us as we look forward into the 
future. In partnership with State Departments of Agriculture, 
we awarded $170 million last year in the Specialty Crop Block 
Grants to fund the growing need for critical research, 
marketing, and education programs for specialty crops. And this 
year we have another $73 million available to support more of 
this work. We have also partnered with 45 states and 48 
separate Tribes to approve plants for hemp production, creating 
new income streams and supporting broader rural prosperity.
    And, as we enhance markets to build new ones, we will 
continue to create partnerships with technical assistance 
providers so that farmers and ranchers, especially those who 
have been historically underserved, have support navigating our 
programs because having the programs is not enough. We must 
also ensure access.
    In addition, we continue the relationships with trade 
partners around the world as we grow international markets for 
American agriculture. Trade is an essential economic driver in 
many rural communities and supports more than 1.3 million 
American jobs.
    I would be remiss if I did not recognize the dedicated 
staff at USDA, at the Agricultural Marketing Service, and at 
the Animal and Plant Health Inspection Service who work hard to 
strengthen American agriculture. In fact, APHIS is celebrating 
its 50th anniversary this weekend, and their work ensuring 
animal and plant health has helped build better markets for 
both domestic and international trade partners abroad.
    Thank you again for the opportunity to be here today and 
for your leadership. I look forward to working collaboratively 
with Members of this Committee and Congress as you work to 
draft the 2023 Farm Bill and continue to champion American 
agriculture. I am happy to address any questions you have. 
Thank you.
    [The prepared statement of Ms. Moffitt follows:]

Prepared Statement of Hon. Jennifer Lester Moffitt, Under Secretary for 
  Marketing and Regulatory Programs, U.S. Department of Agriculture, 
                            Washington, D.C.
    [Chair] Plaskett, Ranking Member Baird, and Members of the 
Subcommittee, thank you for the opportunity to appear before you today 
to share the U.S. Department of Agriculture's (USDA) efforts to build 
more and better markets for producers and consumers, including through 
the implementation of the Horticulture Title of the Agriculture 
Improvement Act of 2018 (2018 Farm Bill).
    It is an honor to serve the American people as the Under Secretary 
for Marketing and Regulatory Programs and to be with you here today. My 
mission in this job is simple. It's to be the best advocate I can be 
for the farmers, ranchers, producers, consumers, and communities we 
serve.
    My roots are in agriculture. I grew up on a farm in a rural area 
where I saw firsthand how important farmers, ranchers, and producers 
are to their communities and to our country. I know, and you know, how 
hard they work and the challenges they face every single day to provide 
the food, fiber, and fauna that shape so many aspects of our economy 
and way of life.
    During the pandemic, we saw just how hard individuals in roles 
across all links in the food supply chain worked to feed Americans and 
just how many challenges they faced. We saw the last few years 
highlight long-term systemic challenges, even as we also saw the food 
system adapt, innovate, and persevere.
    Now we as a country have a unique chance to learn from the lessons 
of the last few years and move beyond them to build upon that 
adaptation and innovation to support a food system that's stronger, 
more resilient, and more equitable than before. Our ability to feed 
ourselves is a matter of national security, nutrition security, and 
economic security. As President Biden has said, we have the opportunity 
to build the economy not from the top down, but from the bottom up and 
the middle out. This work provides a direct opportunity to invest in 
rural communities in ways that will support prosperity for generations 
to come.
    That's why USDA is committed to addressing those challenges by 
building more and better local, regional, national, and international 
markets for producers and consumers while ensuring animal and plant 
health. I'm excited to share more details on that work with you today, 
and to work with the Committee and Congress as you draft the next farm 
bill.
Local Agriculture Market Program
    There is no one size fits all to fix to these challenges. Success 
is going to take new partnerships, new innovations, and new ways of 
thinking and a recognition that solutions are likely to vary place to 
place. Thanks to Congress, we already have some strong tools in our 
toolbox, including the Local Agriculture Market Program (LAMP) that I 
would like to highlight first today.
    Just last month, I visited an innovative collaboration in Georgia. 
Now, Georgia is a state with a lot of fruit and vegetable production, 
but in bustling Atlanta, access to these local healthy fruits and 
vegetables has been limited in certain communities. The Metropolitan 
Atlanta Rapid Transit Authority (MARTA) came together with 
organizations including Community Farmers Markets, Atlanta Community 
Food Bank, Open Hand, and Wholesome Wave Georgia to start fresh markets 
at five transit stations. These markets accept cash, credit, debit, and 
Supplemental Nutrition Assistance Program (SNAP) Electronic Benefit 
Transfer cards. SNAP benefits are doubled at the market through the 
Double Up Food Bucks program. This work, now in its seventh year, was 
boosted with a USDA Local Food Promotion Program grant funded by the 
2018 Farm Bill, which is a part of the larger LAMP authorization. I 
truly loved seeing how this innovative partnership transformed food and 
nutrition insecure communities into opportunities both for the people 
living there and the farmers who grow produce in the state.
    The Local Food Promotion Program that supported the MARTA project 
is part of LAMP, which was established in the 2018 Farm Bill, with 
Congress providing $50 million a Fiscal Year in mandatory funding 
starting in FY19. Congress has also provided discretionary 
appropriations for some of the programs that are a part of LAMP and in 
2021 a supplemental appropriation of $100 million was provided for LAMP 
through the Consolidated Appropriations Act of 2021. USDA's LAMP grant 
programs also consist of the Farmers Market Promotion Program and the 
Regional Food Systems Partnerships at Agricultural Marketing Services 
(AMS) and the Value-Added Producer Grants run through USDA's Rural 
Development.
    As I have traveled the country, I have heard repeatedly how AMS's 
LAMP grants have been a catalyst to support and energize local and 
regional food systems. It's timely that we highlight these programs 
today since March is National Nutrition Month. So many of the 
recipients I've met with are making a real difference when it comes to 
nutrition security of their communities while also building more and 
better markets for producers.
    In Massachusetts, for example, I visited a farm that had received 
funding resulting from a Farmers['] Market Promotion Program grant to 
the Southeastern Massachusetts Agricultural Partnership. With these 
funds, the farm is constructing a new farmstand to help build and 
expand their local markets, particularly focused on growing their 
customer base to include those using SNAP benefits to ensure that 
everyone, regardless of income level has access to healthy, fresh food 
and are able to support their local farmers.
    In California, I had the opportunity to meet with Maria, a farmer 
from just outside Salinas, and hear her story and her struggles as a 
farmer who hasn't had the same access to programs and markets due to 
language barriers, size barriers, and production barriers. Thanks to a 
Farmers['] Market Promotion Program grant and a Local Food Promotion 
Program grant received by a local organization, the Community Alliance 
with Family Farmers, she was able to access in-language support and 
build market connections including with institutional, food bank, and 
pantry partners.
    Supporting farm to institution growth is a real under tapped 
opportunity for many local food systems. That is why we have dedicated 
$130 million in supplemental American Rescue Plan (ARP) Act funding to 
promote competition and create more and better markets for local and 
regional food producers by expanding and strengthening opportunities to 
sell to institutions, such as universities, hospitals, and settings 
operated by local, tribal, and state governments. The supplemental ARP 
funding USDA has dedicated to this farm to institution work is divided 
into $65 million for Fiscal Years 2022 and 2023 each.
Local Food Purchase Assistance Cooperative Agreement Program and the 
        Local Food for Schools Cooperative Agreement Program
    I'd be remiss if I didn't mention that we are also currently 
seeking applications from states, Territories, and Tribes for the Local 
Food Purchase Assistance Cooperative Agreement Program and the Local 
Food for Schools Cooperative Agreement Program. As the LAMP programs 
work to build capacity for producers to access new markets, these two 
programs are designed to build and engage local procurement marketing 
channels while providing nutritious food for food banks, pantries, and 
schools.
    Through both of these programs, we are working with states, 
Territories, and Tribes to assist them in building their own unique and 
flexible plans to purchase and distribute domestic foods from local, 
regional, small, and underserved farmers and ranchers for use in 
nutrition programs, building the necessary infrastructure for local and 
regional procurement along the way.
    These programs demonstrate the incredible power and opportunity of 
partnerships and how they strengthen American agriculture by building 
new markets and enhancing existing markets for producers of all 
backgrounds, scale, and scope, as well as how they can work to build a 
more resilient local and regional food system.
    These efforts put rural prosperity front and center, supporting a 
circular economy where the value added to food happens and stays 
locally. With these programs both the investment in the food purchased, 
as well as the food delivered, stays in the broader community, 
supporting longer term economic growth.
Organic Production
    Our work at USDA building more and better market opportunities for 
producers is also evident in our work on organic markets. Organic 
agriculture provides a climate-smart option, and ever-changing consumer 
tastes call for a variety of products and production methods. Nowhere 
else is that clearer than in certified organic production where 
consumer demand continues to climb.
    At the start of 2022, there were 28,403 certified organic 
businesses in the United States. U.S. organic retail sales totaled a 
record $61.9 billion in 2020, up approximately 13 percent from 2019. 
Since being confirmed, I've met with current and aspiring organic 
farmers where I heard about the importance of consistent national 
standards as well as the need to keep supporting and educating 
certifiers, and the need to provide wraparound support for 
transitioning farmers. As someone who grew up on and later managed an 
organic farm myself, I understand how important this is.
    When my dad decided to convert to organic production in the 1980's, 
I watched him reach out to fellow growers to seek mentorship, guidance, 
and to get their hands-on expertise on issues like production practices 
and certification. He was fortunate because we had folks he knew, but 
not everyone who wants to get into organic agriculture has that same 
access and support. Those connections are crucial to new and beginning 
farmer success.
    Of course after farmers have transitioned to certified organic 
production, there also must be a supply chain and markets ready to 
support organic production. I know many Members of this Committee paid 
close attention to market disruptions in organic dairy production last 
year, particularly in the Northeast. This has underscored the broader 
need to build long-term resilience of regional dairy supply chains and 
is why USDA announced that we are investing $80 million in American 
Rescue Plan Act funding, split between the four existing Dairy Business 
Innovation Initiatives, to further support processing capacity 
expansion, on-farm improvements, and technical assistance to dairy 
producers, including those focused on organic markets.
    The Organic brand, supported by robust national standards, is well-
recognized and trusted by many consumers. To protect this important 
brand and ensure consistent standards for our producers, we are working 
on several rules.
    First, we are moving forward with the Origin of Livestock and 
Organic Livestock and Poultry Practices rules to set how dairy cattle 
can be transitioned into organic production and clarify the USDA 
organic standards for these industries, including around production, 
transport, and slaughter. Both rules are currently under review and I 
know U.S. organic producers are eager to see them enacted soon.
    We are also working to finalize the Strengthening Organic 
Enforcement rulemaking, which will implement the farm bill's Title X 
provisions to significantly update organic standards to respond to 
industry growth and the growing complexity of organic supply chains. 
The rule will also incorporate many recommendations from the National 
Organic Standards Board to strengthen the integrity of the USDA organic 
seal. The final rule will be submitted to the White House Office of 
Management and Budget in the coming months.
    Enforcement is a critical component of our organic standards so 
that consumers have confidence in the brand. Our work to establish the 
``Organic Agricultural Product Imports Interagency Working Group,'' as 
set forth in the 2018 Farm Bill enables USDA and Customs and Border 
Protection (CBP) to advance joint work on organic import oversight, 
organic enforcement, and data sharing. This working group meets 
regularly, with the following key successes:

   facilitating trademark protection of the USDA organic seal;

   facilitating data access to CBP systems;

   enabling AMS staff positioning in the CBP Commercial 
        Targeting and Analysis Center (CTAC);

   supporting inter-agency collaborative efforts to build the 
        NOP electronic organic import certificate; and

   providing essential feedback for the Strengthening Organic 
        Enforcement rule.

    This collaboration with CBP also extends to our electronic organic 
import certificate in CBP's import system (called the Automated 
Commercial Environment--ACE). This system is designed to modernize 
existing international organic trade tracking and data collection 
systems. The organic import certificate was launched in Spring 2020 and 
is now being used on an optional basis by organic importers. 
Certifiers, who generate the import certificate, do not have access to 
the CBP system, so next, AMS conducted a pilot test and desktop 
exercises to identify requirements for a fully electronic workflow that 
will generate and validate certificates outside the CBP system. This 
technology, which will expand the existing Organic Integrity Database, 
is now being developed and will be launched concurrently with the 
implementation of the Strengthening Organic Final Rule. The outcome 
will be effective oversight of organic imports without slowing 
legitimate and vital trade.
Hemp
    Part of building new markets includes opening the door to new crops 
to create income streams in support of broader rural prosperity. The 
2018 Farm Bill directed USDA to establish a national regulatory 
framework for hemp production in the United States. USDA published a 
final rule on January 19, 2021, that provided regulations for the 
production of hemp in the United States, which became effective on 
March 22, 2021.
    To foster public awareness and input during the regulation-drafting 
stage, USDA conducted a webinar that hosted more than 4,100 registrants 
from around the country, engaged with Native American Tribal 
representatives on multiple occasions, maintained ongoing interaction 
with multiple internal and external government agencies with related 
responsibilities, and engaged with global companies with interest in 
U.S. hemp production. USDA had held hundreds of meetings with industry 
stakeholders and other Federal partners.
    USDA worked diligently to quickly review and approve state hemp 
plans before the December 31, 2021, statutory deadline. Forty-five 
states are now operating under USDA approved plans. USDA administers 
the hemp programs in New Hampshire, Mississippi, Hawaii, North 
Carolina, and Wisconsin. We continue to work very closely with Tribes 
to develop their hemp programs and have approved programs for 48 
separate Tribes.
    Throughout 2020 and 2021, the hemp program developed the Hemp 
Electronic Management Platform (HeMP) which collects licensing, 
mapping, testing, disposal, and remediation data from all U.S. hemp 
producers for sharing with law enforcement as required under the 2018 
Farm Bill. The program continues to conduct extensive and critical 
stakeholder outreach for USDA producers, states, Tribes, laboratories, 
and law enforcement.
Specialty Crop Block Grants
    As we work to enhance markets into the future, the need for 
research, innovation, education, and marketing only grows. In my 
previous role at the California Department of Food and Agriculture, I 
know first-hand how important the Specialty Crop Block Grant Program 
(SCBGP)--authorized and funded through the farm bill--is to the states 
as they partner with the specialty crop industries to fund critical 
research, marketing, and education programs that best meet the needs in 
their states. In California, we funded pest and production research 
which included key climate-smart agriculture priorities as well as non-
research projects, such as, education programs for beginning farmers 
and marketing programs.
    Section 101 of the Specialty Crops Competitiveness Act of 2004 (7 
U.S.C. 1621) authorized USDA to provide state assistance for specialty 
crops, and the 2018 Farm Bill funded the SCBGP through 2023. USDA 
administers this program by awarding grants to State Departments of 
Agriculture to enhance the competitiveness of fruits and vegetables, 
tree nuts, nursery crops.
    Last year, USDA announced $170 million in grants, which was made 
possible thanks to $73 million from the 2018 Farm Bill and an 
additional $97 million that Congress provided through the Consolidated 
Appropriations Act of 2021. Then on January 25, 2022, USDA announced 
$72.9 million in available funding for 2022.
    This past January, I was able to travel to Washington State to see 
these grants in action as they support important production research 
and innovation, as well as market development for apple, pear, and 
cherry growers in the Pacific Northwest. From research to education to 
marketing, the program is supporting specialty crops to be more 
competitive and resilient.
    In an effort to further quantify and demonstrate the impact of this 
program, AMS established standardized national outcome measures to 
demonstrate the program's performance toward fulfilling its statutory 
purpose; review annual performance reports, final reports, audit 
results, and final financial statements; posts final performance 
reports on the SCBGP website; and disseminate project findings at 
appropriate meetings and conferences. These updated performance 
measures for the Specialty Crop Block Grant Program, the Farmers['] 
Market and Local Food Promotion Program, the Acer Access and 
Development Program, and the Dairy Business Innovation Initiatives will 
not only lead to greater transparency but allow us to disseminate 
valuable information about the programs. Specifically, for the SCBGP 
the new standardized national outcome measures will allow for a 
complete evaluation of the increases in consumption and consumer 
purchasing of specialty crops, access to specialty crops, food safety 
knowledge, pest and disease control processes, development of new seed 
varieties, expanded research, and improved environmental 
sustainability. The updates, which were announced last July,\1\ will 
apply to the Fiscal Year 2022 grant cycle and beyond.
---------------------------------------------------------------------------
    \1\ https://www.ams.usda.gov/services/grants/performance-measures.
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International Markets and Other Activities
    As part of our push for more and better markets, we are also 
looking to increase the markets outside of the country for American 
growers. As many farmers and ranchers will tell you, and as many of you 
know well, trade is essential and is an important economic driver in 
many rural communities. The United States exported a record $172.2 
billion in farm and food products in FY21, up 23 percent from FY20. 
Producers, processors, exporters, and rural communities have all 
benefited, with each $1 billion in U.S. agricultural exports 
stimulating another $1.14 billion in domestic economic activity and 
supporting more than 7,700 full-time civilian jobs. That means exports 
support more than 1.3 million American jobs, not just on the farm but 
also in related industries such as food processing and transportation.
    Part of enabling this trade success is by ensuring animal and plant 
health for products coming into the U.S. and those that we are sending 
to other countries. This means doing all we can to keep foreign pests 
and diseases out of the country so that our producers can ship their 
products all around the U.S. and to overseas trading partners who can 
trust that our products meet their standards. Our Animal and Plant 
Health Inspection Service (APHIS)--and its valuable employees--strives 
every day to protect the health and value of American agriculture. In 
just a few days, on April 2, APHIS will be celebrating its 50th 
anniversary.
    These unsung heroes at APHIS have, for fifty years, kept harmful 
pests and diseases out and helped to maintain and expand access for 
healthy agricultural products.
    Most of America might not see their work on a day-to-day basis, but 
they benefit from their impact constantly. I know that I did when I 
worked on my family's organic farm and when I served at the California 
Department of Food and Agriculture. As we approach this important 
anniversary, we should all take a moment to appreciate what the agency 
has accomplished and how critical its people have been to its success. 
APHIS, through the hard work of its employees, has provided 
incalculable value to American agriculture and will continue to ensure 
that U.S. farmers and ranchers have access to more markets for their 
healthy products for the next fifty years. I would also like to thank 
this Committee and Congress for the additional support that was 
provided to APHIS through the American Rescue Plan to conduct much 
needed monitoring and surveillance of susceptible animals for SARS-CoV-
2 that is supported by our One Health collaboration. Although not the 
subject of today's hearing, it is another critical part of APHIS' work 
to prevent, detect, report, and respond to all potential emerging 
threats to American agriculture, be it plants or animals, and human 
health.
Outreach and Equity
    I want to note, that even as we roll out these incredibly impactful 
programs, we are doing a disservice if they are not accessible to all. 
From running my family farm, I experienced firsthand how difficult it 
can be to maneuver through all the pieces needed to apply for a grant 
or loan from USDA. Farmers and ranchers don't have extra hours in their 
day to navigate all the layers of application processes on their own. 
Having readily available technical assistance to help our farmers and 
ranchers access all of these programs is just as important as having 
these programs in place.
    For communities that have been historically underserved by the 
Department, the need for wraparound technical assistance is even 
greater. That's part of why I'm so proud of the technical assistance 
work USDA is doing, like the newly announced effort for meat and 
poultry processors that includes partnerships with the Flower Hill 
Institute and Intertribal Agriculture Council. These efforts are only 
the start and I look forward to building on this work in the months and 
years to come.
Conclusion
    Thank you again for the opportunity to be here today and for your 
leadership in support of American agriculture and your trust in USDA. 
USDA is committed to working on behalf of the American people to foster 
more and better markets while we also support climate smart agriculture 
and forestry, address nutrition and food insecurity, build rural 
prosperity with a more circular economy, and ensure equity and 
inclusion in all that we do. I look forward to working with each of you 
to advance these shared goals through the 2023 Farm Bill.
    Working with Congress, I believe we can--and must--continue to 
support and strengthen markets for American agriculture. Together, we 
have an opportunity to enhance existing markets, build new markets, and 
ensure fair markets to enhance rural prosperity, reduce nutrition 
insecurity, and combat climate change so that American agriculture is 
even stronger than it is today.
    I look forward to working collaboratively with Members of the 
Committee and Congress as you work to draft the 2023 Farm Bill and 
continue to champion American agriculture. I would be happy to address 
any questions you may have.

    The Chair. Thank you very much, Under Secretary.
    Chief Cosby, please begin when you are ready. Thank you, 
Madam Under Secretary, for your testimony.

STATEMENT OF TERRY COSBY, CHIEF, NATURAL RESOURCES CONSERVATION 
                  SERVICE, U.S. DEPARTMENT OF 
                 AGRICULTURE, WASHINGTON, D.C.

    Mr. Cosby. Thank you. Chair Plaskett, Ranking Member Baird, 
and Members of the Subcommittee, thank you for the opportunity 
to appear before you today to discuss USDA support for urban 
agriculture. My name is Terry Cosby. I am the Chief of the 
Natural Resources Conservation Service. Prior to becoming 
Chief, I was a State Conservationist in Ohio during the launch 
of the Cleveland High Tunnel Initiative; I have seen firsthand 
the many benefits of urban agriculture for the communities. I 
have seen youth inspired to agriculture careers when they are 
otherwise drifting. I have seen people develop businesses that 
either supplement other jobs or provide a primary source of 
income. I have seen people's health improve and communities 
come together.
    I greatly appreciate the Subcommittee's invitation, and I 
look forward to the conversation today.
    The USDA Office of Urban Agriculture and Innovative 
Production, which I will refer to today as the Office, is 
housed within the NRCS, but our work is supported by and 
coordinated across the Department. The Office works 
collaboratively with other USDA agencies to support urban 
producers. We established an internal advisory committee with 
members from over 20 USDA agencies to guide and contribute to 
USDA urban agriculture efforts. The 2018 Farm Bill authorized 
$25 million a year----
    The Chair. Excuse me, Chief Cosby. I am so sorry to 
interrupt you, but to the Committee staff, the timer is not 
visible, thank you.
    Chief Cosby, you got some extra time there if you would 
like to start again.
    Mr. Cosby. Thank you for that. The 2018 Farm Bill 
authorized $25 million a year for the Office. In Fiscal Year 
2020 Congress provided $5 million; in Fiscal Year 2021 $7 
million; and in Fiscal Year 2022, $8.5 million.
    Feedback and engagement from urban producers and 
stakeholders across the country will be critical for USDA work 
to support urban agriculture in communities. The inaugural 
meeting of the Federal Advisory Committee for Urban Agriculture 
and Innovative Production was held virtually on March 23rd and 
24th. Fourteen hundred and thirty people registered to attend, 
and 184 registered to provide comments during the public forum. 
I am happy to provide further details about what we learned 
during the Q&A. The Committee and the public feedback will 
guide future priorities for the Office. As a public meeting, it 
was recorded and will be made available through our Farmers.gov 
urban website.
    USDA offers several targeted opportunities for urban 
communities and projects. Our Urban Agriculture and Innovative 
Production Competitive Grant Program supports projects that 
promote community gardens and nonprofit farms, provide job 
training and education, and develop business plans and zoning 
for urban agriculture with priorities given to communities 
lacking access to fresh and healthy foods. Since the Office 
started, this program has funded 31 awards totaling just over 
$7.9 million. Additionally, our Cooperative Agreement Pilot 
Program funds local government projects to develop and test 
strategies to increase compost and reduce food waste. Since the 
Office started, this program has funded 37 awards totaling just 
over $3 million. This spring we will announce the opening of 
two funding opportunities.
    The Office has collaborated with the Farm Service Agency to 
establish 11 pilot urban county committees, which will provide 
feedback on how USDA can support urban agriculture in our local 
areas. To demonstrate USDA's commitment to urban agriculture, 
FSA and NRCS are establishing brick-and-mortar urban service 
centers, as well as mobile presence in each city selected for 
the urban county committees. These service centers will connect 
urban producers to USDA programs and services developed in 
urban areas, including the local and regional market initiative 
that Under Secretary Moffitt discussed earlier. USDA will 
engage trusted community-based organizations in each city to 
build trust and to raise awareness of USDA services available 
and support urban producers through the sign-up process.
    Importantly, our efforts are not limited to these cities. 
NRCS and FSA are ensuring that in all states field offices are 
trained to support urban producers. The Office is updating an 
urban agriculture toolkit to help producers and employees 
easily find all USDA programs supporting urban agriculture. We 
are also preparing training on how to work with urban customers 
for employees across USDA. At NRCS, we are reviewing guidance 
and technical documents, practice standards, and payment rates 
to remove barriers to serving urban producers and ensure 
payment rates are reflective of costs of producing food in 
urban locations.
    High and low tunnel standards have been adjusted so health, 
stormwater runoff, water conservation and pollinator habitats 
are currently under review. We are working to support urban 
producers in transition through the environmental EQIP Program 
and our Conservation Stewardship Program.
    In conclusion, USDA is committed to supporting urban 
agriculture and believe it plays an important role in 
addressing food insecurities, climate change, and inequity. 
However, we note that there is more work to be done. I want to 
thank you again for the opportunity to appear before the 
Subcommittee to provide an update on USDA's urban agriculture 
efforts, and I look forward to the questions.
    [The prepared statement of Mr. Cosby follows:]

      Prepared Statement of Terry Cosby, Chief, Natural Resources 
 Conservation Service, U.S. Department of Agriculture, Washington, D.C.
Introduction
    [Chair] Plaskett, Ranking Member Baird, and Members of the 
Subcommittee, thank you for the opportunity to appear before you today 
to discuss USDA's work to advance and expand support for urban 
agriculture. USDA's Office of Urban Agriculture and Innovative 
Production (the Office or OUAIP) is housed within the Natural Resources 
Conservation Services (NRCS), but NRCS works collaboratively across the 
Department to implement our responsibilities as a collaborative effort 
with the many USDA agencies and offices that have missions and programs 
that support urban producers and innovative production.
    The overview of the Office's accomplishments and plans that I will 
share with you today provides only a high-level lens into the actions 
we are taking. The benefits are realized by the individuals who receive 
service, perhaps for the first time, that enable them to begin, expand, 
or enhance food production in their local community. Through the work 
of this Office and of urban agriculture efforts across the Department, 
USDA strives to uplift communities that have been previously overlooked 
and lacked access to many USDA resources. I know first-hand from my 
experiences in Cleveland, Ohio, that promoting urban agriculture can 
inspire youth to go to college to specialize in agricultural fields; 
create opportunities for entrepreneurs to start up small businesses and 
create jobs; provide fresh, healthy foods to communities in need; and 
improve the quality of life for all residents by reclaiming abandoned 
open spaces.
    The Office coordinates urban agriculture efforts across USDA 
through an internal advisory committee. The internal advisory committee 
allows employees from all USDA agencies to engage directly on matters 
important to urban agriculture and innovative production and to guide 
the work of the Office. Members work collaboratively on outreach 
products, training efforts, funding announcements, project selections, 
metrics to measure success, and supported the selection of the new 
director for the Office of Urban Agriculture and Innovative Production. 
The Office also holds regular discussion with other Federal agencies, 
like Housing and Urban Development and the Environmental Protection 
Agency, to discuss opportunities for collaboration.
Funding
    The 2018 Farm Bill included an authorization of an appropriations 
for each of Fiscal Years (FY) 2019 through 2023 of $25 million a year 
to carry out the responsibilities of the Office and the Urban 
Agriculture and Innovative Production Advisory Committee. In FY20 
Congress provided an appropriation of $5 million for this work, then $7 
million in FY21, and $8.5 million in FY22. Last year, approximately 90% 
of the Office's appropriated funding went directly to the public via 
the Office's two funding opportunities: Urban Agriculture and 
Innovative Production (UAIP) competitive grants, which expand 
opportunities for urban and innovative production in areas lacking 
access to fresh healthy food, and Composting and Food Waste Reduction 
(CFWR) cooperative agreements, which funds local governments pilot 
projects to promote composting and food waste reduction.
    USDA has also used appropriated funds to support the establishment 
of the Urban Agriculture and Innovative Production Federal Advisory 
Committee and the pilot Urban County Committees that are being 
established through the Farm Service Agency's County Committee 
authorities. In addition, the Office is developing outreach materials 
to help local producers and local staff better understand USDA programs 
that can assist urban and innovative producers, and we are also 
developing internal training for USDA staff to prepare them to work 
with these new producers.
Federal Advisory Committee
    The inaugural meeting of the Federal Advisory Committee recently 
took place with a virtual meeting on March 23rd and 24th. We introduced 
the new committee members to the public and provided the public an 
opportunity to provide feedback to the committee. This public feedback 
will be instrumental in shaping USDA's continued investment and support 
for urban agriculture. In all we had 1,240 persons register to attend 
the session and 132 registered to provide feedback to the committee 
during the public forum. This public feedback, in addition to the 
experiences of the committee members, will help form USDA's future 
priorities for the Office.
Urban County Committees
    For nearly 100 years, county committees have provided a direct link 
between the farm community and USDA, allowing grassroots input and 
local administration of USDA programs. Each year, the Farm Service 
Agency (FSA) holds elections where local farmers can run for, or vote 
for, county committee membership. County committee members have a say 
in what kinds of FSA programs their county will offer, ensuring local 
FSA agricultural programs serve the unique needs of local producers. As 
of March 7th, the Office and FSA have established 11 Urban County 
Committees (UCOC) in Albuquerque, NM; Atlanta, GA; Cleveland, OH; 
Dallas, TX; Minneapolis-St. Paul, MN: New Orleans, LA; Philadelphia, 
PA; Phoenix, AZ; Portland, OR; Richmond, VA; and St. Louis, MO.
    These UCOCs will focus exclusively on urban production and will 
provide feedback on how USDA programs can encourage and promote urban, 
indoor, and other emerging agricultural production practices in the 
local area. Additionally, UCOCs may address issues such as food access, 
community engagement, support of local activities to promote and 
encourage community compost and food waste reduction.
    The UCOC locations were selected based on a number of factors, 
including levels of economic distress, diversity, proximity to Tribal 
nations, the number of students receiving free or reduced-price school 
lunch, as well the number of farm-to-table projects, urban farms, 
community and residential gardens, and green infrastructure projects 
within metropolitan and suburban areas.
Urban Service Centers
    To demonstrate USDA's commitment to serving urban and innovative 
producers, FSA and NRCS have jointly committed to opening brick and 
mortar urban service centers and having a mobile presence in each city 
selected for the pilot program. FSA and NRCS are working with local 
stakeholders and local USDA staff to identify locations for service 
centers within each city that will be accessible and welcoming to local 
urban and innovative producers. These urban service centers will offer 
urban and innovative producers the full suite of applicable USDA 
programs and services, including farm loans and conservation program 
assistance, as well as serving as a way to connect urban and innovate 
producers to the local and regional market initiatives that Under 
Secretary Moffitt discussed earlier. FSA and NRCS anticipate having 
staff on the ground in all locations serving urban and innovative 
producers in the fall of 2022.
    While our teams will be working to build out physical urban service 
centers in the identified cities, we are working with all of our states 
to ensure that field staff are trained and committed to reaching out to 
and serving urban producers and communities and connecting them to 
local and regional market opportunities. This continued effort will 
include training and additional resources to ensure that urban outreach 
and service is available and expanded in every state across the 
country.
Community-Based Organizations
    To support the launch of these urban service centers, FSA and NRCS 
are developing a strategy to engage trusted community-based 
organizations (CBOs) in each location to conduct outreach and raise 
awareness of USDA services available to urban producers. CBOs will be 
critical for building trust to ensure that local urban and innovative 
producers feel comfortable providing the personal information required 
to enroll in USDA programs. The arrangements with CBOs in each city 
will be modeled on the role of the Federation of Southern Cooperatives 
in the Cleveland High Tunnel Initiative. In Cleveland, the Federation 
of Southern Cooperatives encouraged local youth to become trained to 
install NRCS hoop houses, leading to a group of local high school 
students forming a business installing hoop houses. This provided 
enough income to allow some of these young people to attend college, 
which they otherwise could not afford. Similar community engagement and 
job training opportunities will be a priority for CBOs engaged to work 
in each city getting an urban service center.
Competitive Grants--Implementation and Planning Projects
    The Urban Agriculture and Innovative Production (UAIP) competitive 
grants program supports a wide range of activities through two types of 
grant types--Planning and Implementation. Eligible activities include 
operating community gardens and nonprofit farms, increasing food 
production and access in economically distressed communities, providing 
job training and education, and developing business plans and zoning. 
Priority was given to projects with positive impact in areas with 
limited access to [healthy] affordable food as listed in the USDA Food 
Access Research Atlas. In FY20 and FY21, NRCS made 31 awards totaling 
just over $7.9 million to recipients across the country.
Cooperative Agreements--Community Compost and Food Waste Reduction 
        (CFWR) Pilot
    In FY20 and FY21, NRCS made 37 awards totaling just over $3 million 
to local governments to develop and test strategies for planning and 
implementing municipal compost plans and food waste reduction efforts. 
Priority was given to projects that anticipate or demonstrate economic 
benefits, incorporate plans to make compost easily accessible to 
farmers, including community gardeners, integrate other food waste 
strategies, including food recovery efforts, and collaborate with 
multiple partners.
    We will continue to build on these investments and hope to soon 
announce the availability of UAIP competitive grants and CFWR 
cooperative agreements for FY22, totaling approximately $6 million in 
available funds.
Outreach Activities
    Although each individual USDA agency is working to conduct outreach 
for their programs that are available to urban producers, the Office is 
collaborating with our USDA agencies to create an outreach toolkit, 
which will be an efficient mechanism for customers and stakeholders to 
identify resources and services available across USDA. We anticipate it 
will be released later this year after we ensure it is well-vetted. Our 
goals is for this to be a product that builds over time as we learn 
more of what the urban and innovative customers need. In addition, we 
are working to expand our presence on social media to ensure we reach 
communities that are not connected to our traditional outreach efforts. 
The UCOC, described above, will also be helpful in amplifying services 
available to their communities. This Office is working to provide 
training across USDA as well as within each of our agencies to improve 
our employee's knowledge about the needs of urban customer.
Organic
    We are also working to ensure the support available through USDA 
programs and services for organic production and organic transition, 
including conservation assistance, is available for urban producers. 
NRCS offers support for organic and transitioning producers through the 
Environmental Quality Incentives Program (EQIP) and the Conservation 
Stewardship Program (CSP). NRCS has continued to invest in targeted 
improvements to financial and technical assistance to better serve 
organic producers, including actively recruiting more Technical Service 
providers (TSPs), improving outreach efforts, and updating our 
conservation practice standards and payments to better serve organic 
producers. The demand for conservation assistance to support organic 
and transitioning producers exists in both rural and urban communities 
and we are continuing to tailor these tools and programs to expand 
investments in organic conservation. We are also expanding training and 
support for NRCS field staff, and this will include within urban 
communities, to support organic and transitioning producers.
Removing Barriers and Other Efforts to Improve Services
    Within NRCS, we are undergoing a thorough review of all our 
guidance and technical documents, practice standards, and payment rates 
to ensure they do not present barriers to participation for urban and 
small-scale producers. We also want to ensure the payment rates are 
reflective of the costs of producing food in urban locations. For 
example, we are looking at the units of measurement within our practice 
scenarios, features of conservation practices when working on smaller 
scales, and labor and transport issues that appropriately represent 
producer costs. We have already undertaken adjustments to high and low 
tunnel standards and are looking now at practices needed to improve 
soil health, address storm water runoff, water conservation, and 
pollinator habitat in urban communities.
Conclusion
    USDA is committed to advancing urban agriculture in communities 
across the country and the [OUAIP] will continue to play a critical 
role in working across USDA to provide financial assistance to 
individual producers, invest in community projects, support 
agricultural education, spur innovation, and give urban producers a 
voice in USDA at both the local and national levels.
    We will ensure that the continued growth of the Office and urban 
agriculture investments at USDA is driven by community and public 
input, including through the feedback received at the inaugural Federal 
Advisory Committee meeting and the future work of the Committee.
    These actions are a significant step forward, however we know there 
is more work to be done to ensure we can build trust and provide 
quality service in the urban communities we are working to serve. USDA 
is committed to providing tangible results for urban and innovation 
agriculture through partnerships with communities, stakeholders, and 
individuals that are made possible through the authorities provided to 
the Office of Urban Agriculture and Innovative Production and through a 
variety of other farm bill programs.

    The Chair. Thank you very much for both of the testimonies. 
At this time, Members will be recognized for questions in order 
of seniority, alternating between Majority and Minority 
Members. You will be recognized for 5 minutes each in order to 
allow us to get as many questions as possible. Please keep your 
microphones muted until you are recognized in order to minimize 
background noise. I recognize myself for 5 minutes.
    Honorable Jennifer Lester Moffitt, may I ask you, what 
steps are USDA taking to reduce supply chain challenges to 
further support orderly marketing of fruits, vegetables, and 
other specialty crops?
    Ms. Moffitt. Chair Plaskett, thank you for that question. 
We are taking several steps because we know the challenges are 
many and so the solutions also must be many. So, one of the key 
things that we are doing of course is working on many of the 
port issues and the supply chain issues with ports, so just a 
couple weeks ago I was able to join Senator--yes, I was able to 
join, sorry, Senator Cantwell in Portland at the Port of 
Portland to open a new pop-up site there so ag shippers can get 
their products to international markets and also domestic 
markets.
    I think a key thing is the work that we are doing on more 
and better markets generally the work we are doing on local and 
regional markets, the things that we are doing to create 
thriving local and regional food systems. So the work I talked 
about with the LAMP Program is very important because it is 
building more community capacity for producers to be able to 
supply local and regional markets. It is building the community 
networks. It is building the infrastructure. So we are working 
on relieving pressure points along the food supply chain by 
adding and enhancing existing local and regional markets 
throughout the supply chain.
    We currently are also, of course, working in partnership 
with the specialty crop industry. As we know, the Specialty 
Crop Block Grants are really important as far as enhancing 
competitiveness. So again, more and better markets for 
specialty crops are really key and crucial.
    I talked about the work that I saw in Georgia. There are so 
many different communities. I visited Massachusetts earlier 
this year as well where there are producers who are also 
accessing new local and regional markets. They are selling to 
universities, they are selling to hospitals. These are ways 
that we are bringing more access for especially fresh fruits 
and vegetables and produce into new markets and enhancing and 
really diversifying the supply chain.
    The Chair. Well, can I ask as a follow-up to that, you talk 
about specialty crops and competitive grants. There is always 
an issue in all agencies at all levels in ensuring that 
underserved or small communities, rural areas, that those 
smaller farmers have access to be able to compete in these 
areas. Is there any special thought or what are you all doing 
to ensure that that takes place?
    Ms. Moffitt. Absolutely. And ensuring access to our 
programs is essential. It is something that is a priority for 
us in this Administration, and it is a priority for me 
personally, as someone who was a producer myself and I know how 
challenging it can be to access grants, to apply for grants. So 
things like technical assistance are really key pieces that we 
are doing really to be able to provide that.
    So just on Friday for our Meat and Poultry Processing 
Expansion Grant Program that we have at USDA, we announced new 
technical assistance providers. These are people that we have 
partnered with who we are contracted with and who are skilled 
and have the technical expertise to work with small and midsize 
producers to be able to do all of the work, the pre-application 
work as well as the application work to be able to apply for 
and access USDA funding. So technical assistance is key, and 
then also of course just making sure we are doing the outreach 
in an appropriate way and really building relationships with 
trusted partners, partners in the communities who know and have 
that same access that we are looking for so that people are 
aware of the program and also are able to participate.
    The Chair. Thank you. I may not have time, Chief Cosby, for 
you to be able to answer this, but any written response that 
you could give would be appreciated. As you are aware, the 2018 
Farm Bill established the Federal Advisory Committee for Urban 
Agriculture and Innovative Production to, ``advise the 
Secretary on the development of policies and outreach relating 
to urban indoor and other emerging agricultural practices.'' I 
understand that the Federal Advisory Committee held its first 
public meeting last week and was hoping if you could share with 
the Committee in written format or at different points if you 
may have this during the questioning the details of that first 
meeting. So thank you very much for that.*
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    * Editor's note: the information referred to is located on p. 417.
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    At this time I would ask the Ranking Member, Mr. Baird, if 
you have any questions, your 5 minutes are next.
    Mr. Baird. Thank you, Madam Chair. I appreciate that.
    Under Secretary Moffitt, in your written testimony you say 
farmers and ranchers don't have extra hours in their day to 
navigate all the layers of application processes on their own. 
Does Congress need to update any of the programs in the 
Horticulture Title to streamline the application process making 
it easier for producers to apply?
    Ms. Moffitt. Yes, so certainly that is, as someone who, 
again, was a farmer and ran my family's farm for 10 years, I 
know firsthand the many hats that farmers and ranchers are 
wearing. And so the access to programming is really important, 
and technical assistance is important.
    You also highlighted the need for more streamlined 
applications as well. That is something that we have been 
working on as well at USDA so that we are not just certainly 
providing technical assistance through trusted local partners 
but also working on streamlining our applications. We are 
constantly listening, and every grant that we do we are taking 
an iterative approach, bringing feedback in that we hear from 
producers, from applicants to make sure that we are best 
serving the people that we are needing to serve, and so that 
means making sure we are serving farmers and ranchers, making 
sure that we are serving communities especially as well. And 
so, we are taking that in and we are working on that through 
all of the process. Technical assistance support is a key part 
of that as well, so ease of application, as well as the 
technical assistance is a key part of what we do.
    Mr. Baird. Well, thank you. I have another question for 
you. Your testimony also states that we should continue to 
support and strengthen markets for American agriculture, so I 
am kind of changing the game a little here. It is important to 
talk about the role both USDA Under Secretary for Trade and 
Foreign Agricultural Affairs and the USTR Chief Agricultural 
Negotiator play in developing new markets for U.S. exports. I 
am disappointed that neither position currently has a nominee 
and I hope that the Biden Administration will work 
expeditiously to fill these vacancies.
    With that being said, are the current programs in the 
Horticulture Title enough to support markets for specialty 
crops in the United States or should we be looking at a new 
authority to carry out this mission? Go ahead.
    Ms. Moffitt. Yes, absolutely, thank you for that very 
important question. And since I have started at USDA, we have 
worked very closely between the Marketing and Regulatory 
Programs mission area and the Trade and Foreign Agricultural 
Affairs mission area. The work that we do collaboratively and 
in partnership is important to support trade, so I certainly 
want to recognize that, certainly, we are working ahead and 
charging ahead in that.
    There are many programs that we have through APHIS really 
taking a science-based approach, looking at the science, 
working with our trade partners, addressing those different 
trade barriers, having that dialogue with our trade partners so 
that we can open up markets.
    A really key part of that--and you mentioned in your 
opening statements, the PPQ section 7721, the funding that we 
have for plant and pest disease management, surveillance, 
working especially in partnership with State Departments of 
Agriculture and other local governments so that we know what 
pests are out there, we can eradicate, we can control again so 
that we are constantly able to address the trade issues that 
might arise. So we have, certainly, those important programs in 
place right now.
    Mr. Baird. I really appreciate hearing about the 
interagency cooperation, I think that is so important that we 
all head in the same direction. So I want to change to the 
Chief. In your written testimony that the Office of Urban 
Agriculture and Innovative Production talks regularly with the 
Federal agencies like HUD and the EPA to discuss opportunities 
for collaboration. Can you describe this effort in more detail 
and what collaboration will those agencies look at?
    Mr. Cosby. Thank you, sir, for that question. And I will 
tell you that early on we have been working alongside Secretary 
Vilsack and Secretary Fudge, met, and we had a lot of 
conversations about how the agencies can work together on urban 
agriculture. When you start talking about that and looking at 
the basic needs when you talk about housing, when you talk 
about food, just the basic needs, these two agencies working 
collaboratively together----
    The Chair. Sorry, could you please turn your microphone on?
    Mr. Cosby. It keeps going off.
    The Chair. Thank you.
    Mr. Baird. And, Madam Chair, I am about out of time. I have 
gone over time. Can we allow the witness to finish this 
question?
    The Chair. Of course.
    Mr. Baird. Thank you.
    Mr. Cosby. As the agencies are working together 
collaboratively, as I said before, it is great that we can do 
that because if you can service the basic needs of individuals 
from the housing, which HUD helps with, and when we start 
talking about healthy and safe foods, which NRCS, the Office of 
Urban Ag is helping with, we are accomplishing a lot. But we 
have had a lot of conversations with our HUD partners, and we 
are having conversations from all the Federal family about how 
we can all work together to support urban agriculture and what 
happens in a lot of these areas.
    There is a lot of help needed in our urban sector from 
access to land to understanding how to grow fresh fruits and 
vegetables, also for looking at the type of soils that these 
fruits and vegetables will be grown in, and so we have a lot of 
help that we can offer, but it has been great, the 
collaboration between not only all the agencies within USDA but 
the Federal family to pull together to support urban 
agriculture.
    Mr. Baird. Thank you very much, and I appreciate the 
witnesses' comments. And with that, Madam Chair, I yield back.
    The Chair. Thank you. I now recognize the gentlewoman from 
Ohio, Ms. Brown, for 5 minutes.
    Ms. Brown. Thank you, Chair Plaskett and Ranking Member 
Baird, for holding this hearing, and thank you, everyone, for 
joining us today to review horticulture and urban agriculture 
programs in the farm bill. I would first like to take a moment 
to recognize and congratulate Mr. Cosby on his appointment as 
Chief of USDA's Natural Resources Conservation Service. Prior 
to his current post, Mr. Cosby served as the State 
Conservationist in Ohio for 16 years. During his time as State 
Conservationist, Mr. Cosby worked to transform northeast Ohio 
into a national leader in the urban agriculture movement. So, 
Chief Cosby, you have left quite a legacy, and I look forward 
to working with you, building upon the success you helped 
jumpstart back home.
    In your written testimony, you referenced your firsthand 
experience in promoting urban agriculture in Cleveland, so can 
you speak to the specific projects that were developed there?
    Mr. Cosby. Thank you for the question, Representative 
Brown. It is great to see you.
    Ms. Brown. Thank you.
    Mr. Cosby. And, as State Conservationist in Ohio for 16 
years, it was great just working on urban agriculture along 
with all the rural things that we did. But I was approached 
back in 2011, 2012 then at the time by Congresswoman Marcia 
Fudge, who was the Congresswoman there, now is the HUD 
Director, Secretary. We worked and talked a lot about the 
Congressional district there in Cleveland and how we could 
help, from food insecurity and all of the health issues that 
were going on in the inner city from diabetes to high blood 
pressure and all the health risks.
    Something that we talk about a lot is that--and I use this 
term all the time is that your ZIP Code should not dictate your 
life expectancy because in the inner city there in Cleveland 
and if you drove down the road 10 miles, your life expectancy 
went up by almost 15 years because of what was happening in the 
inner city.
    And so we looked at how we could help, and we brought in 
our Farm Service Agency director and we sat down and started 
talking about how can we help this Congressional district? And 
so from that we started talking about food and food 
insecurities and raising vegetables. One of the things that was 
happening in Cleveland is there was a lot of abandoned homes 
and homes being torn down, and so we had these abandoned lots 
that we talked about. There is a lot of green space we talked 
about.
    One of the things is Cleveland is also a refugee city, 
folks that are coming from other countries that didn't have 
access to land, to grow fruits and vegetables from their native 
land, and so it was a great thing. We worked very closely with 
community-based organizations to identify the need and also to 
build trust in the community. A lot of times there is not trust 
in these communities, and so we were able to build a lot of 
trust there. And from that I know that in the city I know there 
are now close to 2,000 houses built there.
    Something else that happened there when you start talking 
about neighborhoods, folks were able to come out in the 
evenings. They were there working in their gardens, and it 
became a social event. We had individuals that were producing 
vegetables and paying their way through college, 
entrepreneurships. You can do a lot of things from urban 
agriculture, and it benefits the communities so greatly.
    Ms. Brown. Thank you. That kind of led into my second 
question, which was the benefits you witnessed from the 
projects like the Cleveland High Tunnel and the High Tunnel 
Initiative and I was just curious if that model could be 
successfully replicated and scaled to other cities.
    Mr. Cosby. We are already doing that. I think what we 
started there in Cleveland has been a model that we are trying 
to use across the country, all over the country with 11 offices 
that have been announced so far. We are working with those 
State Conservationists on FSAs. We are looking at how we can do 
that. We are establishing urban county committees out there to 
help with this. And so it is all hands on deck, and it is a 
project that is near and dear to my heart and is something that 
we are really going to work hard on.
    But, it doesn't have to have one of these established 
offices. Urban agriculture can happen anywhere in this country, 
and so we are working with all of our State Conservationists 
across the country to make sure that happens.
    Ms. Brown. Well, thank you very much. I know I am nearing 
the end of my time, but I do have one other question. And that 
is that we know in 2018 the farm bill directed USDA to 
establish the Office of Urban Agriculture, which is currently 
housed in NRCS. How are you working internally within the 
agency and externally across agencies like the Department of 
HUD to grow urban agriculture? And with that, I would yield 
back. Thank you.
    The Chair. Thank you. I would ask the witness if he could 
respond to that in writing as time has expired at this time.**
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    ** Editor's note: the information referred to is located on p. 417.
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    With that, I would now recognize the gentleman from 
Illinois, Mr. Davis, for 5 minutes.
    Mr. Davis. Thank you, Madam Chair. It is great to be with 
you, my friend, and also my good friend Mr. Baird, the Ranking 
Member. And I appreciate you holding this Subcommittee hearing.
    As the former chair of this Subcommittee, I actually have 
been enjoying the discussion on how we can improve the 
Horticulture Title to actually adapt to this post-pandemic 
reality where high inflation persists, ag input costs are 
rising, and the supply chain crisis really continues to strain 
our local communities. These are the issues that affect our 
farmers and our producers most right now, and they are not 
being taken very seriously in my opinion by President Biden, 
and I believe it is something that we are going to have to take 
into consideration as we look toward the next farm bill if this 
Administration's status quo continues.
    The 2018 Farm Bill sought to bolster our ag economy by 
enhancing and creating new programs to ensure our farmers and 
producers can stay competitive. For example, the Local 
Agricultural Marketing Program, the hemp program, increased 
technical assistance and marketing programs for producers were 
always envisioned to give our domestic producers more 
opportunities to be successful and strengthen our national 
security via domestic food security.
    So my question for you, Under Secretary Moffitt, it is 
great to see you and I appreciate you being here. Also Chief 
Cosby, thank you for our conversation before the hearing. I 
look forward to working with both of you throughout the next 
few years. Under Secretary Moffitt, how do you see our USDA 
marketing programs needing to evolve and adapt to ensure that 
our farmers and producers who have been at the forefront of 
what is looking to turn into a financial crisis for many of 
them, how can they keep their heads above water?
    Ms. Moffitt. Yes, thank you for that question. And, as you 
mentioned, many of those programs that you outlined are 
essentially, exactly doing that. The Local Agricultural 
Marketing Program is building more community capacity and 
connections to really strengthen the ties between farmers and 
consumers, close those linkages, and really strengthen the 
ties, so we are bringing more of that food dollar back to 
producers, which is an important way to strengthen our rural 
economy, our agricultural economy, and our food system. It also 
creates a really strong thriving food system.
    You talked about equity and access and technical assistance 
to our programs, and that is very important, especially for 
producers. We talk a lot about building our capacity from the 
ground up and the middle out, really strengthening, again, the 
ability that farmers and ranchers can continue doing.
    Certainly, we are working on and we are very well aware of 
many of the supply chain issues and working very intently on 
addressing those through the myriad of things I talked about, 
the pop-up sites at the ports, talked about a lot of the work 
that we are doing really to keep a finger on the pulse on what 
is happening, as well as pivot and address issues that we are 
hearing from producers, farmers, and ranchers.
    I know firsthand from my own family's experience how tight 
things can be, and we hear that day in and day out, and that is 
our primary position is to really be there and to support 
farmers and ranchers and consumers across the country.
    Mr. Davis. So under the marketing programs you mentioned, 
those are the programs that you feel are helping our producers 
the most to address the high inflation and rising input costs?
    Ms. Moffitt. It is very important that we are really 
building a thriving food economy. As we address all of the 
different things, we are really making sure that we are 
addressing it, again, from the bottom up and the middle out. 
That is a key thing. I see, as I have traveled around the 
country visiting with different consumers, for example, and 
producers, I was in Iowa last week meeting with a pork 
producer, and she talked about how they are working and 
procuring and buying and building community access with 1,700 
different local suppliers. And so that is really about 
addressing all of the different supply chains because as we are 
looking at important work on meat and poultry supply chain, it 
also is about all of the producers, whether it is equipment 
manufacturers, seed dealers, electricians, all of the people in 
rural America who are part of our ag economy really keeping 
that pulse on and making sure that we are doing what we can to 
address those.
    Mr. Davis. Well, thank you, and thank you for your 
responses. I look forward to working with you over the next few 
months and into the next Congress as we debate this next farm 
bill to see the real results.
    And, Chief Cosby, one last comment. I would really love to 
work with you as we go to the next farm bill on creating some 
flexibility within the programs that your agency oversees.
    Thank you. I yield back.
    The Chair. Thank you very much for your questions.
    At this time I recognize the good doctor from Washington 
State, Congresswoman Schrier, please, for your 5 minutes.
    Ms. Schrier. Well, thank you very much, Chairwoman 
Plaskett, for holding this important hearing, and welcome to 
our witnesses.
    Under Secretary Moffitt, it is a pleasure to see you again, 
and I want to thank you again for coming out to Washington 
State a few months back so that you could see the great work 
happening and how important specialty crops are to Washington 
State. When you were in town, we were able to highlight the 
importance of the Specialty Crop Block Grant Program, and I 
just want to take a moment to emphasize just how important this 
is. It falls under the Horticulture Title of the farm bill, and 
the Block Grant Program and its partner, the Specialty Crop 
Research Initiative, fund research to address the critical 
needs of specialty crops in our state, around the country, and 
frankly, around the world because of applicability. They 
support more than 300 crops in Washington State, and past 
funding for projects in Washington has supported efforts to 
combat fungicide resistance in wine grapes, precision 
irrigation for fruit growers, pest prevention, and we also 
talked about little cherry disease.
    Under Secretary Moffitt, I would love to hear a little bit 
from you about these vital programs and how you evaluate them. 
So, for example, could you tell us about the work that USDA has 
done to establish standards to measure the performance of the 
Specialty Crop Block Grant Program and the Farmers' Market and 
Local Food Promotion Programs and what those measures tell us 
about how these programs are meeting their goals?
    Ms. Moffitt. Yes, thank you so much, Representative 
Schrier. It was a pleasure to be out there in Washington State 
to meet with producers and to see the impact of the Specialty 
Crop Block Grant Program. Coming from the California Department 
of Agriculture, I know how important that program is in 
partnership and administration with State Departments of 
Agriculture to see what was going on and the research that is 
being funded in the programs that are being funded in 
Washington State was really just a wonderful, wonderful day, so 
thank you for having me in your district.
    And, yes, performance measures are so important, and we 
actually did a lot of work in the past couple years, and I am 
really pleased that this round of the Specialty Crop Block 
Grants, as well as our other programs, have new performance 
measures, new objectives that we have created, and we did this 
in very strong partnership with grantees. We wanted to make 
sure that as we were adjusting our performance measures we were 
getting the data that we need to really provide the input but 
also that we are not being an overburden on the people who we 
are trying to, supporting and are partnering with in that 
research. So we did update our performance measures last year, 
and the new round of Specialty Crop Block Grants now includes 
those new performance measures.
    We see the impact. As you mentioned, of course, the number 
of grants in Washington State through the life of the program, 
we have funded over $880 million in programming in, again, 
partnership with states as well as on over 11,000 different 
crops. And so gathering that data so that we have the feedback 
that we need to better understand the impact of the program 
while also not being a burden too much on our grant applicants 
is a key part of that. So I am excited that we were able to 
update our performance measures and our metrics there and look 
forward to getting new data from producers and from our 
applicants as well.
    Ms. Schrier. Thank you. And thank you for striking that 
balance. I think that will be a big relief for our farmers and 
researchers.
    I wanted to mention two more things. First is really short. 
I just wanted to thank you for finalizing the rule for the 
Origin of Livestock. My organic dairy farmers will be just 
thrilled to hear this.
    And then last, I wanted to touch on SCRI, the Specialty 
Crop Research Initiative funding. There is supposed to be a 
matching element. There was a waiver that was available for 
SCRI that allowed our farmers to participate. That was left out 
in the last farm bill. We have had a fix every year to make 
sure that our farmers and our researchers could participate 
because a matching fund would make that prohibitively expensive 
and would block this. And so I would just like to call 
attention to that to make sure that we keep that waiver in this 
next farm bill.
    And thank you very much, and I yield back.
    The Chair. Thank you for your questions.
    And at this time I will recognize Representative Balderson 
for your questions for the witnesses in this first panel. And 
thank you for participating in the hearing.
    Mr. Balderson. Thank you very much, Madam Chair. And I 
thank everyone for coming to the Committee today. Perfect 
timing for myself I guess.
    My first question is for Under Secretary Moffitt. Good 
morning. You mentioned in your testimony that the USDA is 
allocating $130 million in ARPA funds to promote competition 
and create more and better markets for local and regional food 
producers by expanding opportunities to sell to various 
institutions. Can you elaborate on what exactly USDA will be 
spending these funds on and what current or new programs within 
the Horticulture Title will be required for USDA to properly 
expand these opportunities to farmers?
    Ms. Moffitt. Yes, sir, and thank you for that question. The 
$130 million is included in the Local Agricultural Marketing 
Programs Grant, the Local Food Promotion Program, as well as 
the Regional Food Systems Partnership Program, two grant 
programs that are part of that family of four grants. And what 
we have seen in the past couple years is a very strong trend 
upward of applications, so we have seen almost a doubling of 
the applications from 2020 to 2021 in the demand for the 
program, and so hence the need to supplement that with ARPA 
funds. We are really focused on and encouraged to see 
applications that are focused on local and regional food 
systems for institutional markets, so that is hospitals, 
schools, universities, because we see the value in really 
strengthening those markets. There is a ton going on around the 
country, and so for us at USDA to invest in that is something 
that we see as very important.
    Mr. Balderson. Okay. Thank you. My next question for you. 
You discussed at length the importance of the Specialty Crop 
Block Grant Program and how AMS has implemented and 
standardized national outcome measures to demonstrate the 
program's performance. Are there any changes that you think 
need to be made to the program in order to enhance the 
competitiveness of specialty crops in the United States?
    Ms. Moffitt. Yes, sir. As I was just mentioning to 
Representative Schrier, the Specialty Crop Block Grant, since 
its inception in 2006, has funded over $880 million, 11,000 
projects. A key part of that program is our partnerships with 
states, and so the money is actually allocated to the states 
and the states implement the program. And that is really 
important because the states can design the program to best 
suit the needs of their state specialty crop industry, so 
research, promotion, education, all of those things are already 
included and are key parts of that program. So, we see the 
value in that partnership continuing to strengthen our 
partnership.
    We just made some updates, as I was also mentioning, on our 
performance metrics as well, so we are getting really good data 
back on how well the program is performing. And so those are 
new metrics in this current round of funding as well. So it is 
an important program, and we very much value that partnership 
with the State Departments of Agriculture in administering it.
    Mr. Balderson. Thank you very much. And, Madam Chair, I 
yield back. Thank you.
    The Chair. Thank you for your questions. At this time I 
recognize my good friend Congressman Carbajal for his line of 
questioning.
    Mr. Carbajal. Thank you, Madam Chair, and thank you to all 
the witnesses for being here today and providing us with your 
testimony on these very important programs.
    My district grows a variety of specialty crops, including 
strawberries, broccoli, cauliflower, avocados, cut flowers, and 
more. The success of these crops is in large part because of 
the hard work by our farmers and our farmworkers, but also 
because of the important research and innovative programs 
funded by the farm bill. It is important that programs under 
the Horticulture Title help bolster the production and 
competitiveness of specialty crops.
    Under Secretary Moffitt, the fresh markets created at metro 
stations in Atlanta are the type of innovative programs we need 
to ensure all people, regardless [inaudible] have access to 
fresh fruits and vegetables. Can you walk me through what has 
made these markets successful and what support USDA would need 
[inaudible]?
    Ms. Moffitt. Yes, sir, so I don't think I caught the last 
part of your question, but I can talk a little bit about MARTA 
and what I saw as----
    Mr. Carbajal. Let me repeat it for you.
    Ms. Moffitt. Thank you.
    Mr. Carbajal. Can you walk through what has made these 
markets successful and what support USDA would need to 
implement similar programs in other states?
    Ms. Moffitt. Absolutely, yes, so what I saw in MARTA 
(Metropolitan Atlanta Rapid Transit Authority) was the 
community coming together to solve a problem and to look for 
solutions within their existing infrastructure that just needed 
more connections, so fostering that connection. So with MARTA's 
leadership but in very strong partnership with the Atlanta Food 
Bank and many, many other local organizations, as well as 
producers, I saw them coming together to identify local farmers 
who had product who were interested in selling it at those 
markets. I saw the opportunity as well, they utilized the space 
at their transit stations. They have carts there. And then of 
course in partnership with, and looking at the EBT Program, and 
many of the people who are purchasing fresh fruits and 
vegetables through the carts are using the EBT Program and the 
SNAP Program.
    And so looking at all of those linkages, connecting the 
dots is really important, and that is where things like the 
Regional Food Systems Partnership Program and the Local Food 
Promotion Program, as well as the Farmers' Market Promotion 
Programs are really important because they build the capacity 
within the community to connect all of the dots together so 
that the producers who have the food are able to have access to 
new markets, as well as of course the people who are really in 
many communities that are nutrition-insecure have access to 
fresh fruits and vegetables. But it doesn't come naturally, and 
oftentimes I know as a former farmer, we are busy farming our 
fields, and so, we don't know who is out there, so building the 
connections I think is very important.
    The Specialty Crop Block Grant also does a very good job of 
helping foster those connections, as well as, as you talked 
about, research as well. And coming from the California 
Department of Agriculture, I saw firsthand through so many of 
the projects we funded the importance of research, as well as 
education and technical assistance and then promotion of 
getting products to market through that program as well.
    Mr. Carbajal. Thank you. Moving on, another question for 
you, are cut flowers available at these markets? If not, do you 
think it is feasible to include them to improve the 
competitiveness of this specialty crop?
    Ms. Moffitt. Yes, the cut-flower industry is such an 
important industry I know in your district and in many areas 
around the country. I was there in February, so there weren't 
too many cut flowers there, but I do know that they are always 
looking at who are the local producers, what do they have, and 
the opportunities. So, I did see things like honey there and 
other products, and so, certainly, hopefully there are cut 
flowers available because it is such an important industry to 
our economy.
    Mr. Carbajal. Thank you. It is incredibly important that we 
reduce food waste and find ways to support food recovery 
efforts, especially when we consider that one in ten Americans 
are food-insecure. Mr. Cosby, can you elaborate on some of the 
lessons learned from the Community Compost and Food Waste 
Reduction Pilot and what the compost is used for? Is data on 
waste diverted from landfills being collected?
    Mr. Cosby. And thank you for that question. And, we are 
working very closely with a lot of these folks that have 
applied and received these grants. And from what we are 
learning is that there is a big need out there for compost, 
especially when you are getting into some of the situations 
where some of the areas have been abandoned or the buildings 
have been abandoned or we have some soils issues. And so folks 
need good, healthy compost to go ahead and help them raise 
these fruits and vegetables, so it has been great to watch that 
happen.
    And, when we start talking about food waste reduction, we 
are working very closely with a lot of those grant recipients, 
especially like schools where food waste could be tremendous. 
And so we are trying to look for ways, how do we create an 
atmosphere where you are not wasting that food? And then if you 
do have that surplus, how do we make sure it gets to some of 
these facilities so it can be composted and turned back into 
productive soils? So we think those two opportunities are 
great, and it is working very well.
    Mr. Carbajal. Thank you.
    The Chair. Thank you very much.
    Mr. Carbajal. I am out of time.
    I yield back.
    The Chair. The gentleman's time has expired.
    The chair recognizes the gentlewoman from Louisiana, Ms. 
Letlow. Thank you very much for joining us for the hearing.
    Ms. Letlow. Thank you so much, Chair Plaskett, Ranking 
Member Baird, and to our USDA officials with us today. Thank 
you for the opportunity to discuss and review horticulture and 
urban agriculture programs authorized by the farm bill.
    As we all well know, agriculturalists are the cornerstone 
of food and fiber production in America. In my home district, 
many of the rural communities are fueled by the perseverance of 
our local agricultural producers, large, and small. Like many 
sectors of agriculture, niche and specialty crop farmers 
throughout Louisiana continue to face challenges, whether that 
be labor shortages, increased input costs, availability of risk 
management tools, or access to new market opportunities. That 
is why it is essential we are spearheading this conversation 
today.
    Under Secretary Moffitt, as you know, the Plant Pest and 
Disease Management and Disaster Prevention Program and the 
National Clean Plant Network were originally established 
through the farm bill and have since been made permanent law 
and incorporated into APHIS Plant Protection and Quarantine's 
base budget. As we continue to hear, these programs provide 
critical funding to pest prevention, mitigation, and addressing 
emerging challenges for specialty crop producers. A hallmark of 
these programs has been the robust involvement of stakeholders 
in the affected specialty crop industries, particularly in 
deciding which activities to fund. Can you talk more about 
these programs, and what is this Administration's commitment to 
stakeholder engagement for these programs? And how do you plan 
to incorporate their input into project funding decisions?
    Ms. Moffitt. Yes, thank you so much, Congresswoman Letlow. 
And it is a pleasure to meet you and to be here today. Those 
programs that you described are really key and important 
programs to the work that the team at APHIS does. Just a few 
weeks ago when I was down in Georgia I also visited the dog 
training center there, and it is an important part. We see them 
when we are at airports, but they are also working behind the 
scenes at baggage facilities around the country and parcel 
facilities really to make sure that they are sniffing out and 
detecting any sort of fruits or vegetables that might be coming 
into the country that could have pest and disease. So those are 
things that are funded in part through those programs, very 
important and critical programs as well.
    You asked about stakeholder engagement. Stakeholder 
engagement is essential to the work that we do. We do our best 
work when we are listening and learning and hearing from the 
people out in the field, the people with the expertise, and 
really adapting and serving those folks. And so stakeholder 
engagement is something that I am committed to. I know the team 
at APHIS also has a strong commitment too, and we look forward 
to the advisory committees and all of the work that we do to 
get feedback to make sure that our programs best serve the 
needs of the community that we are serving.
    Ms. Letlow. Thank you so much. I look forward to working 
with both you and Chief Cosby as we work towards the next farm 
bill. I yield back the remainder of my time.
    The Chair. Thank you very much for your line of 
questioning. And I would like to ask the esteemed Congresswoman 
Pingree of Maine for her questions.
    Ms. Pingree. Thank you very much, Chair Plaskett. Thank you 
so much for holding this hearing. And I am not sure about the 
esteemed part, but I appreciate your confidence in me. So, 
Under Secretary Moffitt, we are so pleased to have you with our 
Committee today and to have you in the position that you have, 
so thank you so much for being with us.
    And I just can't tell you how pleased I am that you made 
the announcement about the Origin of Livestock rule. I don't 
know that I have had a Committee hearing that I haven't had to 
bring that up and ask the USDA when something is going to 
happen, so the fact that we get to tell our constituents now 
that we are moving forward on this is going to make a huge 
difference, particularly right now when the dairy farmers, 
organic dairy farmers have been so challenged throughout the 
Northeast with losing a contract, so this is a really important 
time. I can't thank you enough.
    And I am also glad to hear so many questions related to 
LAMP. I was really pleased to have a chance to work on that in 
the 2018 Farm Bill, so I appreciate some of the conversations 
people have been having about streamlining the process, making 
sure it is accessible. I hope we can continue going in that 
direction.
    So one kind of quick question about this whole idea of how 
we support more resilient local and regional supply chains. I 
often hear about the need for affordable and accessible capital 
to develop infrastructure, and I am talking about things like 
food safety equipment, packing equipment, cold storage, similar 
infrastructure that are on farms and food hubs which are just 
so important in that domain. But a lot of times I have also 
heard that AMS rules around grantmaking prohibits AMS grants 
from investing in such badly needed food systems 
infrastructure. Do you think there is something we should be 
looking at when it comes to the 2018 Farm Bill and LAMP to make 
sure that this is a possibility and it is covered?
    Ms. Moffitt. Yes, thank you, Representative Pingree, and 
certainly it is an exciting day to be able to announce the 
Origin of Livestock final rule, as well as I look forward to 
working on implementing that. And I just want to thank you and 
other Members of Congress, as well as the Northeast dairy 
industry as a whole and the State Departments of Agriculture 
for engagement over the past 6 months on Northeast organic 
dairy issues. We announced the Dairy Business Innovation Center 
funding, and hopefully that is a big part of the solution, but 
we also know that Origin of Livestock is another piece of it, 
again, multiple solutions for a very large, beastly problem.
    You asked about the LAMP Program being able to purchase 
equipment, and some of the much-needed things that we see, of 
course as producers are coming together to be able to 
aggregate, to do food hubs, those sorts of things are very, 
very important. We have been working with the team at AMS on 
the opportunities of what the grant funding can fund, and we 
continue to have those conversations about capacity is really 
important and what does that look like. So, we are happy to 
talk further with you guys, provide technical assistance, 
provide answers that you have about what we can and cannot fund 
and where are the opportunities there, so we look forward to 
further engagement on that.
    Ms. Pingree. Great, thank you. One of the things that was 
in your testimony--and I don't mean to spring this on you 
because I don't know that you are going to have a complete 
answer--but was around hemp production and the opportunities we 
created in the 2018 Farm Bill but then some of the challenges 
that our producers have faced. I have a bill called the Hemp 
Advancement Act of 2022 (H.R. 6645) that really deals with some 
of the statutory changes, the issues people have had around the 
THC threshold, use of DEA labs, 10 year ban on felons working 
in the field and getting licensed. So I know those are sort of 
specific, but what I often hear from the hemp producers when we 
are talking about those obstacles is just the need for more 
comprehensive support on marketing, on processing development. 
It just sort of breaks my heart that we opened up this 
opportunity, yet still most of the hemp that is used for 
clothing or for a whole variety of uses that could be an 
expansion area for us, not just the CBD part, but it is going 
to require a lot of support and engagement. And I don't expect 
you to have a thorough answer, but is that something we can 
sort of talk about and maybe look at in the next farm bill, or 
do you see some opportunities there for the USDA?
    Ms. Moffitt. Yes, absolutely. And, this is such an 
important and growing industry. I wouldn't say it is a new 
industry, but it is a newly, revived industry from a long time 
ago. And we do have an interagency working group at USDA 
looking at how hemp producers can access all of the funding and 
the funding that we do have at USDA and the programming that 
USDA has as well. I am happy to talk with you further about the 
questions that you have. And, certainly I know our team has 
been, we are aware of your bill and providing technical 
assistance and please do know our door is always open for that.
    Ms. Pingree. Great. Well, you are exactly out of time, I am 
exactly out of time, so thank you. I yield back, and I really 
appreciate your being with us today.
    Ms. Moffitt. Oh, thank you.
    The Chair. Thank you very much for your questions as well.
    And I want to thank the witnesses on our first panel for 
being with us today. Under Secretary Moffitt and Chief Cosby, 
thank you for your testimony and for responding to the 
questions that Members had. The Committee will take a brief 5 
minute recess to allow our witnesses to depart and for our 
second panel of witnesses to take their seats or to come onto 
the Zoom screen. Thank you.
    [Recess.]
    The Chair. Okay. We are ready to begin on the second panel. 
And I want to thank you all very much for your patience. It had 
been my hope to be in the committee room. Personal reasons have 
me still in the district attending to family matters, so I am 
grateful for the ability that we have virtually to still 
conduct meetings and still engage in the people's business 
while also attending to the life eventualities that happen.
    I want to call the Committee to order, and I am pleased to 
welcome our second panel of witnesses to the hearing. Our first 
witness for this panel is Ms. Laura Batcha, who is the Chief 
Executive Officer for the Organic Trade Association, which is 
critical to the discussion that we are having here this 
morning.
    And to introduce our second witness, I am pleased to yield 
to our colleague from California, Mr. Panetta.
    Mr. Panetta. Thank you, Madam Chair. I appreciate this 
opportunity. But also it is a true honor this morning that I 
get to introduce our next witness for today's hearing, Brie 
Reiter Smith. I am proud to introduce Ms. Smith not only 
because she is from my district and she is actually a neighbor 
of mine, but I do believe that Ms. Smith knows exactly what it 
takes to grow, to harvest, to pack, to transport, and to sell a 
berry. Yes, based on her background, she understands the many 
challenges that go along with producing not just berries but 
all specialty crops and the difficulties from Mother Nature to 
our mandates to our markets to labor.
    Now, look, with most people in agriculture, Brie will be 
the first to tell us about those challenges. But what makes her 
and her family very unique is that they also talk about, and 
more importantly they act about, coming up with solutions. Now, 
Brie is a fifth-generation berry farmer who, with her husband 
Brian, have a blueberry farm in Chile and a blackberry ranch in 
California.
    Brie also serves as a Vice President of Product Leadership 
for the world's largest berry company, Driscoll's, where she is 
responsible for looking into the future of berry production and 
developing strategies to build the business that her family 
started in the late 1800s. It is a company that has a one-
family philosophy and has got to a point where they work with 
thousands of families, thousands of berry growers across the 
world, so she deals with all types of farmers and farmworkers 
and deals with all types of problems but, more importantly, she 
also works hard to find all types of solutions.
    As a California native, she received a degree from Cal Poly 
University and an MBA from Thunderbird School of Global 
Management. She brings with her a legacy of service in the 
agriculture industry and a wealth of knowledge that I know will 
benefit this Committee hearing today. She understands legacy 
but, more importantly, she understands and accepts the 
responsibility to not just uphold but also to further the 
legacy of not just her family but other families in 
agriculture.
    For that, it is my honor to introduce to you Ms. Brie 
Reiter Smith, and I yield back.
    The Chair. Thank you very much to my distinguished 
colleague from, as he deems it, the Salad Bowl district in 
California.
    And it is my honor to also introduce our third witness for 
the panel, Mr. Marc Oshima, who is the Chief Marketing Officer 
and co-founder of AeroFarms. We are really glad to have you 
with us.
    And our fourth witness is a dear friend of mine and an 
important person in the agriculture of the U.S. Virgin Islands, 
Nate Olive, who is the owner and operator of Ridge to Reef 
Farm. Ridge to Reef Farm is a 100 acre organic certified farm 
on the Island of St. Croix. Dr. Olive, Nate Olive has a Ph.D., 
is also the President, duly elected of the Virgin Islands 
Farmers Alliance, which strives to be a unified voice for 
farmers in the Virgin Islands. He is on the Island of St. 
Croix, which is my home island in the Virgin Islands of the 
United States, and I want to thank him for offering his time, 
his tireless dedication to farming and to the agricultural 
growth of the Territory, as well as to the young people and 
ensuring that we in the Virgin Islands at least attempt to make 
a strive and effort to reverse the complete reliance on outside 
food production to sustain us.
    To introduce our fifth and final witness for this panel, I 
am pleased to yield to the Ranking Member, Mr. Baird.
    Mr. Baird. Thank you, Madam Chair. And it is my distinct 
pleasure to introduce Director Kettler to testify before us 
today. And Bruce is the Director of the Indiana State 
Department of Agriculture, and he currently serves as the 
Second Vice President of the National Association of State 
Departments of Agriculture. With over 30 years of experience 
across numerous sectors of the agricultural industry, Bruce has 
a deep understanding of the diverse needs of the industry and 
the important programs authorized in the farm bill.
    At ISDA, Bruce is a tireless advocate for agriculture, 
working to promote environmental stewardship, enhance economic 
opportunities for Hoosier farmers, and grow the next generation 
of leaders.
    In addition to his roles with the Indiana State Department 
of Agriculture and NASDA, Bruce is the Director of the 
Agribusiness Development for the Indiana Economic Development 
Corporation and serves on the Ohio State University President's 
Alumni Advisory Council and on the Dean's Advisory Council for 
the Purdue College of Agriculture.
    Bruce, I am really honored to have you with us here today, 
and I look forward to hearing from you and share your testimony 
with the Committee. So thanks for being here, Bruce. I yield 
back.
    The Chair. I thank the gentleman. I welcome you all today. 
We will now proceed to hearing your testimonies. You will each 
have 5 minutes. The timer should be visible to you, and it will 
count down to zero, at which point your time has expired.
    Ms. Batcha, please begin when you are ready.

    STATEMENT OF LAURA BATCHA, CHIEF EXECUTIVE OFFICER AND 
EXECUTIVE DIRECTOR, ORGANIC TRADE ASSOCIATION, WASHINGTON, D.C.

    Ms. Batcha. Chair Plaskett, Ranking Member Baird, and 
Members of the Committee, thank you for holding this hearing 
and inviting me to testify on behalf of the organic sector. I 
am Laura Batcha, CEO of the Organic Trade Association. Our 
members represent the entire organic supply chain, including 
growers, shippers, processors, certifiers, regional farmers 
associations, brands, and retailers in all 50 states.
    Last year, organic sales in the U.S. grew by more than 12 
percent, reaching a record high of $62 billion. Today, more 
than 15 percent of produce sold, nearly ten percent of dairy 
and eggs, and more than seven percent of packaged food sold in 
the United States are certified organic, demonstrating the 
importance that consumers place on this sector.
    Today, we released the results of a study by the firm 
Edelman that is an organic follow-on to their widely cited 
consumer trust barometer. What we found was that 89 percent of 
consumers say that the USDA should update the organic standards 
periodically, and 87 percent of consumers expect these updates 
to reflect evolving understandings about soil, climate, health, 
animal welfare, and more. Yet, less than 45 percent of the 
general population gives USDA high marks today for the 
stewardship of the National Organic Program.
    Organics is at a critical juncture and inflection point. We 
know that consumers have fueled the strong growth of the 
industry for over 20 years, but the marketplace is becoming 
more crowded with new certifications and label claims. What 
sets USDA organic apart from other private certification and 
marketing claims is that the standards are developed and 
enforced by Federal law and regulations. It is a voluntary 
regulatory program where the market rewards businesses and 
farmers who choose to opt-in and meet these strict standards. 
And participation in the program is an important opportunity to 
diversify farms, create sustainable practices and livelihoods.
    For the last 20 years, organic standards have remained 
largely static. In fact, when it comes to organic practice 
standards, only one major rule has been implemented by USDA in 
the last 12 years--well, two. We have heard one announced this 
morning, so we appreciate that. Nearly two dozen other 
recommendations to improve the standards have been submitted to 
USDA by the National Organic Standards Board, the Federal 
Advisory Committee established in the Organic Foods Production 
Act of 1990 (Pub. L. 101-624). They all remain unimplemented. 
The very purpose of the Organic Act is to create uniform, 
robust standards for marketing organic products nationwide. 
Many of these recommendations address inconsistencies and lack 
of clarity in the existing regulations that have led to 
competitive harm and market failure. Others improve 
sustainability outcomes in organic production systems.
    That is why OTA supports H.R. 2918, the Continuous 
Improvement and Accountability in Organic Standards Act, a 
bipartisan piece of legislation introduced by Representatives 
Peter DeFazio, Rodney Davis, Chellie Pingree, Ron Kind, Dan 
Newhouse, and Jimmy Panetta. The bill updates the way USDA 
would administer these standards and sets forth a future 
process by which the National Organic Program can adapt in a 
more timely and transparent fashion.
    We applaud the announcement this morning by Under Secretary 
Moffitt that USDA is publishing the Origin of Livestock rule, 
19 years in the making since that recommendation was handed off 
to USDA. While we are encouraged that USDA has started the 
process of moving forward on the regulatory backlog, in the 
next farm bill we would like to see this legislation be 
reintroduced with a focus on institutionalizing a more stable 
future for organic by restructuring the public-private 
partnership, investing in oversight and enforcement, and 
prioritizing continuous improvement.
    Organic provides economic opportunities for farmers and 
businesses, creates jobs, and lifts rural economies while also 
utilizing sustainable farming practices that are proven to help 
mitigate the threat of climate change. There is an important 
opportunity to invest in conservation, technical assistance, as 
well as focused market development and infrastructure to 
address supply-chain constraints and increased domestic 
production of organic.
    We look forward to working with Congress and Members of 
this Committee to advance organic in the 2023 Farm Bill. Thank 
you for the opportunity to provide my testimony this morning to 
inform Federal policy, and I am happy to address any of your 
questions.
    [The prepared statement of Ms. Batcha follows:]

    Prepared Statement of Laura Batcha, Chief Executive Officer and 
    Executive Director, Organic Trade Association, Washington, D.C.
    [Chair] Plaskett, Ranking Member Baird, and Members of the 
Committee, thank you for holding this hearing and inviting me to 
testify on behalf of the organic sector on the upcoming farm bill. I am 
Laura Batcha, CEO and Executive Director of the Organic Trade 
Association (OTA), the membership-based business association for 
organic agriculture and products in North America. OTA is the leading 
voice for the organic trade in the United States, representing over 
9,500 organic businesses across 50 states. Our members represent the 
entire supply chain including growers, shippers, processors, 
certifiers, farmers' associations, distributors, importers, exporters, 
consultants, retailers, and others.
    Organic is an increasingly important part of American agriculture 
and represents one of the fastest-growing food and farming sectors in 
the U.S. and global marketplace. In 2020, U.S. organic sales grew by 
more than 12%, reaching a record high of $62 billion. Today more than 
15% of all produce sold in the U.S. is certified organic, nearly 10% of 
dairy and eggs are organic and more than 7% of packaged foods as well 
as grains are organic, demonstrating the importance consumers place on 
this sector.\1\ Consumers are also driving demand globally, where the 
USDA organic label remains the gold standard. U.S. organic exports 
increased 8% in 2021.\2\
---------------------------------------------------------------------------
    \1\ Organic Trade Association's 2021 Organic Industry Survey.
    \2\ FAS Global Agricultural Trade System.
---------------------------------------------------------------------------
Organic in the Farm Bill
    The farm bill provides critical support for the growing organic 
sector with many programs authorized to assist organic including the 
Organic Data Initiative, the Organic Research and Extension Initiative, 
the Organic Certification Cost-Share Program, the Environmental Quality 
Incentives Program Organic Initiative and more. Most importantly, every 
farm bill the Organic Foods Production Act (OFPA) the law that 
authorized Federal organic standards, is amended and updated to reflect 
the latest policy and oversight measures that are needed to ensure a 
strong and healthy U.S. organic sector.
    The 2018 Farm Bill included the Organic Farmer and Consumer 
Protection Act, legislation that was championed by Members of this 
Committee that gave the USDA National Organic Program (NOP) more 
resources and authority to combat global fraud in the organic trade. 
This spring we anticipate implementation of these provisions when USDA 
releases a final rule on Strengthening Organic Enforcement.
    The rule should close gaps and eliminate major fraud risks in the 
organic supply chain by requiring all entities that handle organic 
products including brokers, traders, importers, and exporters to obtain 
organic certification. For the first time, all imports of certified 
organic product coming into the U.S. will be accompanied by an 
electronic import certificate that will be uploaded to the U.S. Customs 
and Border Protection's Automated Commercial Environment System. I will 
note that the release of this final rule is past the Congressional 
deadline set for implementation which is going to further delay the 
electronic import certificate tracking system. The rule will also 
require certifiers to conduct mass-balance and trace back audits as 
well as increase unannounced inspections of organic operations. Moving 
forward all certified operations will have to develop an organic fraud 
prevention plan.
The Organic Foods Production Act and the Next Farm Bill
    Looking ahead to the 2023 Farm Bill, OTA has engaged in an 
extensive outreach process to collect feedback from our members and 
other stakeholders on priorities. We hosted a series of in-depth 
workshops on the future of organic. Additionally, OTA's Farmers 
Advisory Council, a coalition that represents more than 8,500 organic 
farmers, held numerous working sessions to delve into the efficacy of 
current farm bill programs and outlined the most critical needs and 
recommendations of organic farmers. We will release our full farm bill 
policy platform early this summer. Today I will provide a preview of 
our top priorities.
    Organic is at a critical juncture and inflection point. We know 
that consumers recognize and trust the USDA organic label, fueling the 
strong growth of the industry over the last 20 years. But the 
marketplace is becoming more crowded with new certifications and label 
claims and consumer preferences on how their food is produced are 
evolving and shifting rapidly. What sets USDA organic apart from other 
private certification and marketing claims is that the standards are 
developed and enforced by Federal law and regulations. It's a voluntary 
regulatory program that rewards businesses and farmers who choose to 
opt-in and meet strict standards through market premiums.
    However, organic's greatest challenge and our biggest opportunity 
for the next farm bill lies in living up to the expectations that 
consumers and businesses have of the organic seal to continuously 
improve and advance the standards. When the Federal organic regulations 
were implemented in 2002, it was known that additional modifications 
and updates would need to be made later down the road. There was still 
a lot that needed to be worked out and as the industry sky-rocketed in 
popularity, emerging sectors also wanted the opportunity to become 
certified organic. Unfortunately, advancing and updating the standards 
regularly is not what has happened in practice and improving this 
process should be the major focus to support organic in the 2023 Farm 
Bill.
    For the last 20 years the organic standards have remained static. 
In fact, when it comes to organic practices only one major update has 
been implemented by the USDA NOP, a final rule on livestock grazing and 
access to pasture. That was twelve years ago. It hasn't been for a lack 
of will on the private-sector's part. Industry and stakeholders have 
come together and agreed upon recommendations to improve the standards 
nearly two dozen times at the National Organic Standards Board, a 
Federal advisory board to the USDA that must be consulted on updates to 
the organic regulations. Some of those recommendations have been 
sitting on a shelf or in various stages of rulemaking limbo for more 
than fifteen years and they span everything from mushroom production, 
aquaculture, animal welfare, pet food, personal care, greenhouse 
standards and more.
    In some cases, the recommendations are to create clear, enforceable 
standards for emerging sectors and in other cases some of the updates 
are sorely needed to address inconsistencies and lack of clarity of the 
existing regulations that have led to competitive harm and market 
failure. The very purpose of the Organic Foods Production Act is to 
create uniform, robust standards for the marketing of organic products. 
The failure of the government to keep pace with these expectations has 
stifled industry innovation, put organic businesses and farmers at a 
competitive disadvantage, resulted in varying interpretations and 
inconsistent application of the standards by certifiers, and led to 
declining consumer trust in the seal.
    OTA supports H.R. 2918, the Continuous Improvement and 
Accountability in Organic Standards Act, bipartisan legislation 
introduced by Representatives Peter DeFazio, Rodney Davis, Chellie 
Pingree, Ron Kind, Dan Newhouse and Jimmy Panetta. The bill requires 
the USDA NOP to clear the backlog of stalled recommendations to update 
the standards, sets forth a future process by which the NOP must 
respond to industry recommendations in a more timely and transparent 
fashion, and requires the NOP to audit certifiers and ensure that new 
regulations and updates to the standards are being applied 
consistently. Regularly updating the standards was Congress' intent 
when the OFPA was included in the 1990 Farm Bill but that has not been 
fulfilled due to the administrative challenges at USDA. It is the role 
of Congress to amend the Act to make it very clear that standards 
development is a core requirement that must be followed through by 
USDA.
    We are encouraged that USDA has started the process of moving 
forward on the regulatory backlog by taking public comment from 
stakeholders on priorities for implementation. However, in the next 
farm bill we would like to see this legislation be reintroduced with a 
focus on institutionalizing a more stable future for organic. The next 
farm bill should restructure the public-private partnership, invest in 
oversight and enforcement, and prioritize continuous improvement.
    We believe the structure of the NOP should be updated to allow for 
prioritizing standards and market development along with maintaining 
strong compliance and enforcement. Specific funding and resources must 
be allocated for standards development and implementation at the NOP. 
There should be a clear statutory requirement for USDA to review and 
update organic practice standards beyond just the National List of 
allowed and prohibited substances used in organic.
    Although progress has been made in recent farm bills to provide NOP 
with more resources, authority, and tools to increase enforcement and 
prevent fraud in the marketplace, there are still loopholes that 
remain. USDA's scope of authority must be expanded to combat the 
improper use of the term organic on uncertified products such as 
personal care, textiles, dietary supplements and businesses such as 
grocery stores, dry cleaners and restaurants. The fraudulent use of the 
term organic misleads consumers and hurts the USDA organic label and 
brand. The NOP's accreditation function should also be updated to align 
with best practices in third-party certification systems and auditing.
    Continuous improvement is the bedrock of organic but it is not 
expressly required by the law or regulations. USDA must collaborate 
with accredited certifiers to advance the outcomes on farms, ranches, 
and facilities certified to the organic standards.
    We know that this is critical to maintain consumer trust. OTA 
recently commissioned the firm Edelman to conduct a study on consumer 
perception of organic, an organic follow-on study to their widely cited 
consumer trust barometer. What they found was that 89% of consumers say 
that the USDA should review and update the organic standards 
periodically. 87% of consumers expect that the organic standards should 
be updated to reflect evolving understandings about soil, climate, 
health, animal welfare and more.
    We look forward to working with this Committee to ensure that 
organic continues to have a bright, successful future by creating 
oversight and tools for continuous improvement in the next farm bill. 
This is essential for USDA organic to remain the gold standard in 
certification and marketing.
Other Core Priorities To Advance in Organic in the 2023 Farm Bill
    In addition to making updates to the Organic Foods Production Act, 
there are also several other priorities that could advance organic in 
the next farm bill. The Committee can support growth and market 
development in the U.S. organic sector by providing funding and 
incentives for those seeking to transition to organic, increase 
processing and infrastructure capacity, and stabilize supply chains by 
facilitating more domestic production of targeted organic crops where 
market demand exceeds supply.
    The next farm bill is an opportunity to increase conservation and 
technical assistance for organic and transitioning farmers. Organic 
agriculture is a regenerative system requiring practices that advance 
sustainability in agriculture like crop rotation, cover cropping, 
building soil health, increasing biodiversity, and reducing nutrient 
pollution. However, many agronomists, extension agents, NRCS staff, and 
farm consultants lack in the knowledge and understanding of organic 
systems making them ill-equipped to support organic farmers and those 
interesting in adopting organic practices.
    There are also core farm bill programs that support organic such as 
the Organic Research and Education Initiative (OREI) and the Organic 
Certification Cost-Share Program. Robust funding for both of these 
programs is necessary to keep pace with the growth of the industry. 
Increased funding for the Market Access Program, Foreign Market 
Development Program and Technical Assistance for Specialty Crops will 
provide U.S. organic businesses with export opportunities and reduce 
trade barriers.
    Last, not every problem requires more spending. There are several 
programmatic changes that can be made to existing farm bill programs to 
streamline access and reduce barriers for organic farmers. Improvements 
to organic certification cost-share, crop insurance, conservation, risk 
management and other farm bill programs are always ripe for 
consideration.
    In conclusion, organic provides economic opportunities for farmers 
and businesses, creating jobs and lifting rural economies, while also 
utilizing sustainable farming practices that are proven to help 
mitigate the threat of climate change. Organic provides a safe, healthy 
choice to consumers, who are increasingly seeking out the trusted USDA 
organic seal on the food and products they purchase for their families.
    We look forward to working with Congress and Members of this 
Committee to advance organic in the 2023 Farm Bill. Thank you for the 
opportunity to provide feedback to inform Federal farm policy. I'm 
happy to address any of your questions.

    The Chair. Thank you very much for that.
    Ms. Smith, please begin when you are ready.

        STATEMENT OF BRIE REITER SMITH, VICE PRESIDENT, 
   PRODUCT LEADERSHIP, DRISCOLL'S, INC., WATSONVILLE, CA; ON 
          BEHALF OF SPECIALTY CROP FARM BILL ALLIANCE

    Ms. Smith. Can you hear me?
    The Chair. Yes, we can.
    Ms. Smith. Perfect. Okay, thank you for the opportunity to 
appear before you on behalf of Driscoll's and the Specialty 
Crop Farm Bill Alliance. Mr. Panetta covered some of this, but 
I am going to stick to the script because I am a bit nervous. 
So at Driscoll's I am the Vice President of Product Leadership. 
My team authors the 5 year strategic plans for each berry type, 
conventional and organic. These plans are allocated to hundreds 
of independent farmers who grow, pick, and pack our proprietary 
varieties of strawberries, raspberries, blackberries, and 
blueberries.
    Driscoll's generally cools, handles, markets and sells the 
fruit, and then we split the proceeds with our growers. In 
addition to our farm in Chile, my husband and I also grow 
blackberries in Watsonville, California, where my family has 
been growing berries for over 125 years. My grandfather was one 
of the founders of Driscoll's. In addition to our home State of 
California, Driscoll's berries grow in Florida, Georgia, North 
Carolina, New Jersey, Oregon, and Washington.
    Specialty crop production in the United States accounts for 
$66 billion in farmgate value, about \1/3\ of all farm crop 
cash receipts. The specialty crop industry has changed 
tremendously to satisfy consumer demands, adapt to new 
technology, and compete in an increasingly global marketplace. 
We want to raise the importance of specialty crops today not 
simply as one more sector of the ag economy but as an important 
source of food to every American.
    The specialty crop industry is united to advocate for a 
common set of priorities as Congress prepares to reauthorize 
the farm bill. A broad coalition of more than 120 specialty 
crop organizations known as the Specialty Crop Farm Bill 
Alliance represents the whole of the fruit, vegetable, and tree 
nut industry. The alliance has formed working groups covering 
each title of the farm bill, along with additional working 
groups to evaluate cross-title policy recommendations. Over the 
coming weeks, these working groups will evaluate existing farm 
bill programs and consider new policy proposals. The alliance 
will then form a single set of recommendations representing the 
collective views of the specialty crop industry.
    I would like to highlight some of the programs our industry 
is currently using, as well as preview some areas of interest 
that are likely to come forward during the policy development 
process.
    Research: The farm bill provides our industry with vital 
tools to address our substantial research needs. Our industry 
includes hundreds of crops, each with unique challenges, and 
the demand for funding under these programs consistently 
outstrips available dollars.
    Trade: Farm bill programs both promote the export of 
America's specialty crops and help prevent unwanted plant pests 
from accompanying imported specialty crops. In an increasingly 
competitive global marketplace, these programs are more 
important than ever.
    Nutrition: The farm bill authorizes the government to 
purchase and then donate a variety of non-price-supported 
commodities, including fruit, vegetable, and tree nut products, 
through USDA's domestic nutrition and food assistance programs. 
These donations help vulnerable Americans to eat a healthy diet 
and avoid hunger while also helping to balance supply and 
demand for various commodities in our sector. The importance of 
these programs was definitely magnified during COVID.
    Natural resource management: The specialty crop industry 
strongly supports USDA's working lands conservation programs. 
However, payment limits and eligibility requirements constrain 
the fruit and vegetable sectors' ability to access important 
benefits of these programs. As the produce industry moves 
forward with our farm bill recommendations, we want to work 
with the Committee to develop creative solutions that preserve 
policy objectives of these limitations while allowing us to 
participate fully in USDA's conservation programs. Addressing 
these impediments will only become more important as we work 
together to address climate change.
    Disaster and crop insurance: The specialty crop industry 
has increasingly been impacted by natural disasters across the 
United States. The West has experienced the longest and deepest 
drought in some places in all recorded history. Producers 
across the South have been hammered by extreme weather events. 
Additionally, COVID severely disrupted our supply chains for 
retail and food service customers. These recent experiences 
have prompted our industry to re-examine risk management and 
commodity support programs.
    And a final thought regarding labor. While I know this 
issue is not directly in the jurisdiction of this Committee or 
within the traditional parameters of the farm bill, I need to 
mention the ongoing and increasingly urgent need to address 
labor issues. While agriculture plays the critical role in 
maintaining a safe and secure food supply vital to our national 
security, a flourishing agricultural industry is crucial to the 
strength of rural America. Agricultural producers across the 
country need a legal and stable workforce to continue feeding 
American families.
    Thank you for this opportunity to speak to you about the 
specialty crop industry, and I welcome any questions you may 
have.
    [The prepared statement of Ms. Smith follows:]

   Prepared Statement of Brie Reiter Smith, Vice President, Product 
 Leadership, Driscoll's, Inc., Watsonville, CA; on Behalf of Specialty 
                        Crop Farm Bill Alliance
    Thank you for the opportunity to appear before you today on behalf 
of Driscoll's and the Specialty Crop Farm Bill Alliance.
    At Driscoll's, I am the Vice President of Product Leadership. My 
team and I are responsible for the 5 year strategic plans for each 
berry type (strawberries, raspberries, blackberries, and blueberries) 
and each field type, meaning conventional and organic, in the Americas. 
Essentially, this is building supply (acres, varieties, growing 
practices, regions) to meet projected demand. The central plan for each 
berry is ultimately divided and allocated to hundreds of independent 
growers in our network who grow, pick, and pack our proprietary 
varieties. Driscoll's generally cools, handles, markets, and sells the 
fruit and then we split the proceeds with our growers. My husband, 
Brian, and I also grow blackberries in Watsonville, California, where 
my family has been growing berries for more than 125 years. My 
grandfather was a founder of Driscoll's. In addition to our home state 
of California, Driscoll's berries grow in Florida, Georgia, North 
Carolina, New Jersey, Oregon, and Washington. We have winter production 
in the U.S., Mexico, and South America for U.S. consumers, and farmers 
grow Driscoll's berries in Europe, Africa, Australia, New Zealand, and 
China to supply fresh fruit to consumers in those markets as well.
    Specialty crop production in the United States accounts for $66 
billion in farmgate value which translates into about 33% of all farm 
crop cash receipts. The specialty crop industry has gone through 
tremendous change to satisfy consumer demand, adapt to new technology, 
and compete in an increasingly global marketplace. This is why we raise 
the importance of specialty crops today--not simply as one more sector 
of the agricultural economy, but as an important source of food to 
every American. We hope specialty crops garner fair consideration and 
prioritization in each Congressional district as you develop the 2023 
Farm Bill.
    The specialty crop industry is united to advocate for a common set 
of priorities as Congress prepares to reauthorize the farm bill before 
it expires in 2023. A broad coalition of more than 120 specialty crop 
organizations, known as the Specialty Crop Farm Bill Alliance, 
represents the whole of the fruit, vegetable, and tree nut industry in 
the United States. The Alliance works to form common objectives that 
transcend different regions, commodities, and other interests, to 
support this vital source of food for American families. Driscoll's is 
a member of several specialty crop associations which in turn are 
members of this Alliance. I can assure you that the produce industry 
stands ready to work closely and collaboratively with Congress on the 
next farm bill.
    Toward that end, the Alliance has formed working groups covering 
each title of the farm bill along with some additional working groups 
to evaluate cross-title policy recommendations. Over the coming weeks, 
these working groups will evaluate existing farm bill programs and 
consider new policy proposals on a wide range of topics throughout the 
farm bill. The Alliance will use this work product to form a single set 
of recommendations representing the collective views of the specialty 
crop industry.
    I would like to highlight some of the programs our industry is 
currently using as well as preview some areas of interest that are 
likely to come forward during the policy development process.
Research
    The farm bill provides our industry with vital tools to satisfy our 
diverse and expansive research needs. Through a combination of specific 
programs like the Specialty Crop Block Grant Program, the IR-4 program 
for pest management, and the Specialty Crop Research Initiative, along 
with other USDA resources, our industry is able to address research 
concerns of all shapes and sizes.
    The produce industry is using Federal research dollars today to 
address pests and diseases and better prevent and respond to multiple 
types of food safety hazards across dozens of crops in multiple farming 
regions. We are also increasingly looking to Federal research programs 
to identify and develop technology for automation and mechanization. We 
access research funding to improve organic production, plant breeding, 
and enhance crop characteristics to improve yield under increasingly 
challenging climatic conditions.
    Our industry includes hundreds of crops each with unique 
challenges.
    As you can imagine, the demand for funding under these programs 
consistently outstrips available dollars.
Trade
    Farm bill programs both promote the export of America's specialty 
crops and help prevent unwanted plant pests from accompanying specialty 
crops imported into the United States.
    While the fruit and vegetable industry is not the primary user of 
the Market Access Program, many of our crops successfully use this 
program to gain access to foreign markets. In addition, our industry 
has used the Technical Assistance for Specialty Crops program to help 
American producers overcome technical barriers to trade imposed by 
foreign countries to exclude American made products from their markets.
Nutrition
    The farm bill authorizes the government to purchase and then donate 
a variety of non-price supported commodities, including fruit, 
vegetable, and tree nut products, through USDA's domestic nutrition and 
food assistance programs. These donations help vulnerable Americans to 
eat a healthy diet and avoid hunger, while also helping to balance 
supply and demand for various commodities in our sector. During the 
COVID crisis those programs were used to help remove excess product 
from the system and provide a vital source of food to those in need.
Natural Resource Management
    The specialty crop industry strongly supports USDA's conservation 
programs. They help producers across the country to better and more 
efficiently use our nation's natural resources, and for our industry's 
growers, these voluntary conservation programs help address a myriad of 
obstacles. For example, in my home state of California programs like 
the Environmental Quality Incentives Program (EQIP) provide critical 
assistance to upgrade irrigation systems and improve the efficiency of 
on-farm water usage, which is critical in the arid West.
    Although we support these working lands conservation programs, 
payment limits and adjusted gross income eligibility requirements have 
a disproportionate impact upon the fruit and vegetable sector and our 
ability to access the important benefits of these programs. Our crops 
typically have a much higher cost of production, and hence return on 
investment, than other agricultural sectors. As the produce industry 
moves forward with our farm bill recommendations, we want to work with 
the Committee to develop creative solutions that preserve the policy 
objectives of these limitations while allowing this vital sector of the 
agricultural economy to participate fully in USDA's conservation 
programs. Addressing these impediments will only become more important 
as we work together to address climate change.
Disaster and Crop Insurance
    And speaking of climate change, the specialty crop industry has 
increasingly been impacted by natural disasters across the United 
States. In my home region in the Western United States, we have seen 
the impacts of the longest and deepest drought, in some places, in all 
of recorded history. The West has not been alone in facing natural 
disasters over the last few years with producers across the South also 
being hit. In addition to natural disasters, our industry was impacted 
when COVID severely disrupted our supply chains for retail and food 
service customers.
    These experiences, along with USDA grower assistance programs for 
trade and COVID initiated since the last farm bill, have prompted our 
industry to examine risk management and commodity support programs in a 
new light.
    One aspect of the farm bill that the specialty crop industry looks 
to in times of disaster is the crop insurance program. Although many in 
the perennial crop industry growing trees and vines participate in 
Federal crop insurance, these risk management tools have not been 
embraced by the field produce sector. With few products available and 
even fewer that can be deemed ``modern'' in design, we will want to 
work with the Committee and USDA on ways to improve crop insurance to 
attract a larger percentage of the field produce industry--which 
represents the majority of specialty crop acres.
A Final Thought Regarding Labor
    While I know this issue is not directly in the jurisdiction of this 
Committee or within the traditional parameters of the farm bill, I 
would be remiss if I did not mention the ongoing and increasingly 
urgent need to address labor issues. Agricultural producers across the 
country need a legal and stable workforce. Not only is agriculture's 
role in maintaining a safe and secure food supply vital to our national 
security, it is critical to the strength of rural America.
    Without immigration reform, growers across the country will 
eventually face the predicament of closing operations or moving them 
abroad. These are not theoretical discussions. Growers struggle to 
secure the labor they need which means they gamble every year on 
getting enough labor to harvest crops or they make the choice to plow 
under the food they have grown for lack of labor.
    The House passed a bipartisan immigration reform bill recently and 
I urge you to reach out to your colleagues in the Senate to take 
action. Closer to home I suspect that the specialty crop farm bill 
alliance will approach this Committee looking to see how the farm bill 
could be used to address labor needs in whatever ways this Committee 
can.
    Thank you for this opportunity to speak to you about the specialty 
crop industry. I welcome any questions you may have.

    The Chair. Thank you very much for your testimony, and I am 
sure we will have questions for you and the other witnesses.
    Mr. Oshima, please begin when you are ready.

   STATEMENT OF MARC OSHIMA, CO-FOUNDER AND CHIEF MARKETING 
                 OFFICER, AeroFarms, NEWARK, NJ

    Mr. Oshima. Chair Plaskett and Ranking Member Baird, thank 
you for the opportunity to speak about the significant role of 
both urban agriculture and controlled environment agriculture, 
also known as CEA, for the upcoming 2023 Farm Bill. I am Marc 
Oshima, Co-Founder and Chief Marketing Officer for AeroFarms, 
the leader in indoor vertical farming. I am also the Board 
Chair for the CEA Food Safety Coalition and a member of the FDA 
Romaine Advisory Task Force and the International Fresh Produce 
Association's Grower-Shipper Council.
    The U.S. imports \1/3\ of its vegetables and nearly \2/3\ 
of its fruit, and COVID-19 and now the war in Ukraine have put 
an even bigger spotlight on how fragile our food system is. We 
need new paradigms to help us build even greater food 
resiliency and security. CEA is one of these new paradigms and 
includes high-tech greenhouses and indoor vertical farms 
growing nutritious crops like leafy greens, tomatoes, 
cucumbers, peppers, and berries. CEA farms can be placed where 
the consumers are, helping cut out a complex supply chain and 
nourishing local communities all year round with fewer 
resources.
    Since 2004, AeroFarms has been leading the way for indoor 
vertical farming with a mission to grow the best plants 
possible for the betterment of humanity. We can grow with up to 
95 percent less water and 99 percent less land compared to 
traditional farms while using zero pesticides ever. We unlock 
plant science even further through having a totally controlled 
environment independent of sun, season, and weather. We use our 
knowledge of plants to be great farmers and then apply these 
capabilities to solve water challenges in agriculture. Our 
global headquarters are in Newark, New Jersey, with additional 
farms underway in Danville, Virginia, the St. Louis region, and 
overseas in Abu Dhabi, UAE. Our award-winning produce is found 
throughout the U.S. at top retailers and food service 
companies, and we are scaling rapidly to meet demand.
    While leading with technology, we are also leading with a 
strong commitment to our communities. AeroFarms is a certified 
B Corporation with a transparent scorecard in environmental and 
societal factors by creating year-round jobs with fair wages 
and benefits. We have partnered with the New Jersey Reentry 
Program providing jobs to those previously incarcerated and 
offer second-chance opportunities. And to date, we have 
probably hired over 100 team members through this program.
    We also create impact through our community farms where we 
install small indoor vertical farms in community centers, 
municipal buildings, and schools like Phillips Academy Charter 
School in downtown Newark, New Jersey, where we have had a 
working farm for over 10 years right in their dining hall, 
changing the students' eating habits.
    AeroFarms has also helped to lead the broader industry by 
partnering closely with USDA. We are one of the founding 
companies for the Foundation for Food & Agriculture Research 
Precision Indoor Plants Consortium where we are working on 
next-generation crops. We also are one of the founding 
companies for the CEA Food Safety Coalition that has worked 
closely with FDA and CDC on the safety benefits of growing 
indoors.
    The U.S. is leading agriculture innovation around the 
world, but we can do even more. We encourage you to promote 
competitive R&D programs so we can maintain a technological 
edge that favors innovation and partnership here rather than 
abroad. The upcoming 2023 Farm Bill offers a big opportunity to 
ensure that the entire agriculture industry, both rural and 
urban, is represented and provide innovative pathways for the 
future of farming. We believe there are opportunities to do 
this in nearly every title, including nutrition, credit, rural 
development, and energy.
    For today, we will focus on two key areas. First, within 
the Horticulture Title, we see an opportunity to expand the 
Local Agriculture Market Program and the Farmers' Market 
Promotion Program to include urban, CEA, and indoor vertical 
farming practices. Second, within the Research Title, we 
support increasing overall funding for the Urban, Indoor and 
Emerging Agriculture Production Research, Education, and 
Extension Initiative.
    The 2023 Farm Bill is also an opportunity to incentivize 
innovation and create a level playing field. We can no longer 
afford to think of agriculture as exclusively rural or business 
as usual, but we need to create the fair market conditions that 
enable true progress and innovation. We should factor these 
considerations into our true cost of food and use policy to 
drive positive behavior establishing incentives for things like 
water conservation and land protection, and creating taxes to 
disincentivize the overuse of pesticides and fertilizers that 
create runoff and land degradation.
    Fair competition also extends to labor and enforcing 
Federal minimum wage and benefits. We have the opportunity to 
raise performance standards and incentivize the right behavior 
that will be good for the industry, the environment, society, 
and the economy.
    In closing, at AeroFarms we are proud to be leading through 
innovation to help elevate agriculture. Urban farming, CEA, and 
indoor vertical farming are about creating local jobs and 
increasing access to healthy produce all year round, but the 
impact that we can have on the broader agriculture industry is 
even greater. We are grateful for American leadership here and 
know how much more we can achieve if the 2023 Farm Bill is made 
to work for the entire industry.
    Thank you for your time and consideration, and we look 
forward to addressing any questions. Thank you.
    [The prepared statement of Mr. Oshima follows:]

   Prepared Statement of Marc Oshima, Co-Founder and Chief Marketing 
                     Officer, AeroFarms, Newark, NJ
Introduction
    Chair Plaskett and Ranking Member Baird, thank you for the 
opportunity to speak to you today about the significant role of both 
Urban Agriculture and Controlled Environment Agriculture also known as 
CEA in the upcoming 2023 Farm Bill.
Biography
    I am Marc Oshima, Co-Founder and Chief Marketing Officer for 
AeroFarms, the leader in indoor vertical farming. During my career, I 
have headed marketing for leading food retailers like The Food Emporium 
and Citarella Gourmet Markets and am passionate about improving our 
food systems and making them more sustainable and equitable. I am also 
the Board Chair for the CEA Food Safety Coalition and a member of the 
FDA Romaine Advisory Task Force and the International Fresh Produce 
Association's Grower/Shipper Council. I am honored to be here today.
Controlled Environment Agriculture
    The macro pressures of a growing population, drought, loss of 
arable land, food safety and recalls, overuse of pesticides, farmer 
welfare, and food waste are challenging traditional agriculture more 
than ever. The United States imports \1/3\ of its vegetables and nearly 
\2/3\ of its fruit,\1\ and COVID-19 and now the War in Ukraine have put 
an even bigger spotlight on how interdependent and fragile our food 
system is. We need new paradigms to help us build a more resilient and 
secure food ecosystem here at home and around the world.
---------------------------------------------------------------------------
    \1\ https://www.ers.usda.gov/data-products/foreign-agricultural-
trade-of-the-united-states-fatus/u-s-agricultural-trade-data-update/.
---------------------------------------------------------------------------
    CEA is one of these new paradigms and includes high-tech 
greenhouses and indoor vertical farms like AeroFarms, growing key 
nutritious crops like leafy greens, herbs, microgreens, tomatoes, 
cucumbers, peppers, and berries. CEA farms can be placed where the 
consumers are, helping cut out a complex supply chain and ensuring a 
steady source of produce all year round. Other key positive advantages 
can include better quality, use of less water and land, no pesticides, 
year-round local job creation, addressing food deserts, and minimizing 
food waste. For indoor vertical farming specifically, we unlock plant 
science even further through having a totally controlled environment.
AeroFarms--Technology and Innovation
    Since 2004, AeroFarms has been leading the way for indoor vertical 
farming with a mission to grow the best plants possible for the 
betterment of humanity. Our proprietary technology and innovation 
platform allows us to grow plants layer upon layer indoors, without sun 
or soil, and without any seasonal climate restriction. We can grow with 
up to 95% less water and 99% less land compared to traditional farms, 
while using zero pesticides, fungicides, herbicides, or insecticides 
ever. As a result, we are able to set higher standards for 
environmental stewardship and food safety. We also decrease the 
distance between food production and consumption, by building farms 
right where the people are in both urban and rural environments. We do 
all this by integrating a deep understanding of plant biology, 
mechanical design, environment controls, data analytics, operations, 
and plant genetics. We use our knowledge of plants to be great farmers 
and then apply these capabilities to solve broader challenges in 
agriculture.
    Our global headquarters are proudly in Newark, New Jersey, with 
additional farms underway in Danville, Virginia, the St. Louis region, 
and overseas in Abu Dhabi, UAE. We have an extensive pipeline of farm 
development nationally and globally, and we are scaling to meet demand. 
Today, our award-winning produce is found throughout the country at top 
retailers and food service companies, and shoppers prize our high 
quality because it is more nutritious and flavorful. Our breakthrough 
work has been recognized with over sixty awards since 2011, including 
TIME Best Inventions and Fast Company's World's Most Innovative 
Companies. AeroFarms was also the inaugural winner of the Global 
Sustainable Development Goals Awards in the category of Zero Hunger.
AeroFarms--Social Impact
    While leading with technology, we are also leading with a strong 
commitment to our communities. AeroFarms is a Certified B Corporation 
with a transparent scorecard on environmental and societal factors like 
creating year-round jobs with fair wages and benefits. We have 
partnered with the New Jersey Reentry Program where we were recognized 
in 2020 for our work providing jobs to those previously incarcerated 
and offering second chance opportunities for not just a job, but for 
dignity and well-being. We are extremely proud of this program and have 
hired over one hundred team members over the years.
    We also create impact through our Community Farms program where we 
install small indoor vertical farms in schools and community centers. 
We have had one of our first Community Farms for over 10 years at the 
Philip's Academy Charter School in downtown Newark, NJ, where we 
collaborated with teachers to educate students about food literacy and 
agriculture and were able to actually change behavior to eat more 
healthy greens. Building on this success, we also launched the first 
ever municipal indoor vertical farming program with the City of Jersey 
City and the World Economic Forum's Healthy Cities and Communities 
initiative where we are placing ten farms throughout the community to 
provide access to healthy produce and help alleviate the stresses of 
food deserts.
Industry Leadership
    AeroFarms has also helped lead the broader industry by partnering 
closely with USDA, including with the National Institute of Food and 
Agriculture (NIFA), the Agriculture Research Services (ARS), and the 
Small Business Innovation Research (SBIR) program where we have been 
the recipient of both Phase 1 and Phase 2, grants given our positive 
results. Over the last 6 years, we have had the opportunity to speak at 
three USDA Annual Outlook Forums, including the last two, to share what 
is next in AgTech technology and innovation. We have worked closely 
with the Foundation for Food and Agriculture (FFAR) specifically on our 
ability to optimize leafy greens for nutrition and flavor. We were also 
one of the founding companies for their Precision Indoor Plants (PIP) 
Consortium where we work on next-generation crops and are the Principal 
Investigator for optimizing lettuces for indoor growing. AeroFarms was 
also one of the founding members of the CEA Food Safety Coalition that 
has developed a third-party certification standard and worked closely 
with the FDA and CDC to educate how indoor growing can provide a safer 
environment for growing food, with fewer food safety issues, compared 
to the field.
Urban Agriculture and Federal Farm Programs
    The United States is at the forefront of leadership in agriculture 
innovation around the world. We encourage our lawmakers to promote 
competitive research and development programs domestically, so we can 
maintain a technological edge that favors innovation and partnership 
here, rather than abroad. Given the tremendous growth and need for CEA, 
support would include providing greater attention to these modern 
methods like CEA in Federal agriculture programs.
    Federal policy and regulation have historically placed an emphasis 
on ``rural'' requirements for beneficiaries, for example, discounting 
the benefits that CEA can have in both rural and urban areas. Current 
guidelines also generally appear to support family ownership 
structures, carrying provisions such as personal guaranties of owners. 
We are supportive of more forward-looking provisions that can benefit 
modern approaches to agriculture with further potential for investment 
and job creation in our local communities.
Recommendations for the 2023 Farm Bill
    The upcoming 2023 Farm Bill reauthorization offers an enormous 
opportunity to ensure that the entire agriculture industry is 
represented and provide innovative pathways for the future of farming 
in this country. We have studied the farm bill and believe there are 
opportunities to do this in nearly every title, including the sections 
on nutrition, credit, rural development, and energy. For today's 
hearing, we will focus on the following suggestions to two specific 
areas.

   First, within the Horticulture Title, we see opportunity to 
        expand the Local Agriculture Market Program (LAMP) and 
        Farmers['] Market Promotion Program (FMPP) to include Urban, 
        Controlled Environment Agriculture and Indoor Vertical Farming 
        practices

   Second, within the Research Title, we support increasing 
        overall funding for the Urban, Indoor, and Emerging 
        Agricultural Production, Research, Education, and Extension 
        Initiative.

    These expansions would help encourage competition, while promoting 
the technology and innovation that forms the bedrock of our national 
ethos and is necessary to feed the growing population.
Other Opportunity Areas
    The 2023 Farm Bill is an opportunity to incentivize innovation and 
create a level playing field. We can no longer afford to think of 
agriculture as exclusively rural or business as usual, but we need to 
create the fair market conditions that enable true progress and 
innovation. We live in a time with fewer available resources. We should 
factor these considerations into our true cost of food and use policy 
to drive positive behavior, establishing incentives for things like 
water conservation and land protection and creating taxes to 
disincentivize the overuse of pesticides and fertilizers that create 
runoff and land degradation. Fair competition also extends to labor and 
enforcing Federal minimum wage and benefits so that workers can earn a 
fair income and agricultural employers are no longer put at a 
disadvantage because of farmers who may pay below the minimum wage. A 
final area of reform concerns consumer welfare. We support all food 
producers, including small hyperlocal growers, to be held to the same 
food safety standards as larger scale growers with no exemptions, to 
help protect the health of American consumers and ensure a level 
playing field. The farm bill has the opportunity to raise performance 
standards and incentivize the right behavior that will be good for the 
industry, the environment, society, and the economy.
Closing
    At AeroFarms, we are proud to be leading through innovation to help 
elevate agriculture in the United States and around the world. Urban 
farming, CEA, and vertical farming are about creating local jobs and 
increasing access to healthy produce all year round, but the impact 
that we can have on the broader agriculture industry is so much more. 
We are grateful for American leadership here and know how much more we 
can achieve if the 2023 Farm Bill is made to work for the entire 
industry. We owe it to ourselves and the generations to come.
    Thank you for your time and consideration.
Additional Content for Written Submission
    AeroFarms is led by Co-Founder and CEO David Rosenberg, a clean-
tech champion, who won the 2021 3BL Responsible CEO of the Year Award. 
As a member of the World Economic Forum, David co-founded and co-
chaired the Young Global Leaders Circular Economy Taskforce and was a 
member of the World Economic Forum Global IoT Council. David was also a 
member of the U.S. delegation to the B20 Sustainable Food System 
Taskforce, which advises the G20. David was also honored to co-chair 
New Jersey Governor Phil Murphy's Agriculture Transition Committee.
                                Exhibits
AeroFarms Indoor Vertical Farming Global Headquarters, Newark New 
        Jersey
        
        
AeroFarms Commercial Indoor Vertical Farm, Danville Virginia


AeroFarms Vertically Integrated Across All Disciplines of Controlled 
        Environment Agriculture
        
        
AeroFarms Leading with Latest in Machine Vision and Machine Learning


AeroFarms Community Farm at Philips Academy Charter School in Newark, 
        NJ
        
        
AeroFarms Community Farms in Jersey City New Jersey



    The Chair. Thank you. The next witness will be Dr. Olive. 
Dr. Olive, you are recognized for 5 minutes.

      STATEMENT OF NATHANIEL ``NATE'' OLIVE, Ph.D., OWNER/
OPERATOR, RIDGE TO REEF FARM; CO-FOUNDER AND PRESIDENT, VIRGIN 
 ISLANDS FARMERS ALLIANCE, INC., FREDERIKSTED, ST. CROIX, USVI

    Dr. Olive. Thank you. Good morning, Members of Congress, 
supportive staff, fellow testifiers, and the listening public. 
It is an honor to be here, truly. I am Nate Olive, and I am 
owner/operator of Ridge to Reef Farm, certified organic on St. 
Croix, and the President of the Virgin Islands Farmers 
Alliance. I am here today to share my own experience as well as 
that of other farmers from my area, as best as I can, in 
navigating Federal support in farming in the U.S. Virgin 
Islands. I sincerely hope that my input can help make a 
difference in improving the quality of life for farmers in the 
territory.
    So I will start by telling you a little bit about the farm, 
although Delegate Plaskett did such a wonderful job that I 
don't have to say much about the Virgin Islands Farmers 
Alliance. Our mission as a farm is to help reverse the trend of 
food import dependency, which is greater than 98 percent for 
our Territory, through ecologically regenerative and culturally 
appropriate agricultural practices. We grow over 100 varieties 
of organic fruits and vegetables, and we also have pastured 
sheep and hogs that are not certified organic due to the lack 
of available, cost-effective, organic-certified feed sources.
    The Virgin Islands Farmers Alliance is a grassroots 
domestic nonprofit with the purpose of providing a unified 
voice for farmers in the Territory. We have over 100 members 
across the Islands of St. John, St. Croix, and St. Thomas. And 
together, we coordinate farm-to-school activities, along with 
other co-marketing activities, conduct production research 
under a USDA Sustainable Agriculture Research Education Grant, 
and will be establishing a food hub storage facility for 
alliance members with the support of World Central Kitchen 
soon. We are very excited about that.
    So as we meet today, there is a soaring demand and a broad 
base of support for agriculture in the Virgin Islands to rejoin 
the economic development of the Territory, but there are many 
challenges here that remain, largely due to our small 
population and land area, our distance from the mainland, and 
relatively large local government. Our insular geography 
greatly creates higher farm input costs in every way in 
comparison to our import market competition. Nearly all farms 
here are considered small farm operations, and the economic 
rules of efficiency and scale continue to work against us. So 
today, we are trying to find our footing, and like other rural 
areas, we can't reach our optimal potential without special 
considerations and support through the farm bill.
    So now I am going to tell you about a few of the programs 
under the farm bill that we at Ridge to Reef Farm are engaged 
in. First of all, I say that we are not taking part in the 
Specialty Crop Block Grant Program because it is geared toward 
beginning farmers here in the Territory in this round, but we 
look forward to future rounds. And one of the most effective 
programs here has been the in NRCS EQIP conservation program. 
We have used this to dig wells, erect livestock fencing, 
establish rainwater catchments for irrigation, construct a high 
tunnel for tomato and cucumber production. Many other farms 
have utilized this important program for similar purposes.
    Some problems with the program are the reimbursement nature 
that makes it out of reach for a lot of small farms here 
without the capital to put up the money, the multiyear time 
frame that it takes from application to execution and 
reimbursement, and the cost-share. Costs here are higher than 
some of the cost-share figures that are anticipated. We end up, 
it is supposed to be 90 percent for some of the things. We only 
get 60 percent of the cost covered here in our special 
situation in the Virgin Islands.
    Second, the USDA disaster recovery assistance program such 
as debris removal, the tree replacement program, those are 
instrumental--the fencing program, those are instrumental for 
many farmers, including Ridge to Reef Farm, after the 
disastrous effects of Hurricanes Irma and Maria in 2017, so 
thank you so much for that support. I would not be here talking 
with you without that. So that has been huge.
    And another program that we are involved in is the Value-
Added Producer Grant. We were the first in the Territory to 
receive that some years ago for a planning grant for 
agroforestry for our fruit share program.
    Fifth, as I mentioned above, we participate in the 
federally funded Farm-to-School Program since it started in 
2014 here in the Territory. And so we serve as an aggregation 
hub for the other farms. We send crops every week that are 
gathered by over 15 farms to the central school warehouse, and 
we would like to see a greater oversight in the award of the 
contracts so that they go to local farmers and not to import 
farmers to protect our market here, and that is why we formed 
the Virgin Islands Farmers Alliance to speak up mainly for that 
need, among others.
    Other programs that we are participating in here is the 
NAP, the Non-insured Crop Disaster Assistance Program, after 
the hurricanes, the Livestock Forage Disaster Program, which we 
have had a lot of droughts in the past years. That has been 
important. The geographic disadvantaged farmer program, which 
helps cover some of the import extra costs but is not enough. 
And the USDA Rural Energy for America Program where we upgraded 
our solar. And there is more that I could list. But there is a 
complete list in my testimony that is submitted.
    So a few suggestions that I have are to increase funding to 
farms directly instead of channeling through larger 
distributive local government programs; and two, to increase 
capacity of our local USDA offices to offer more on-farm 
support and grant writing help. As mentioned before by Ms. 
Moffitt, a lot of producers have difficulties with all the 
paperwork, and it is very preventative to engage in these 
programs, so we need more help from our office on that, and we 
would like them to get more support.
    To raise the expected cost for EQIP conservation practices 
so that they are covering the actual cost of what it takes to 
get it here and install in the Virgin Islands. To remove 
barriers of program participation by removing the reimbursement 
nature of many programs like the EQIP and the Hurricane 
Disaster Programs, which we couldn't complete the fencing and 
other things because after the hurricanes we had no income to 
put up the----
    [The prepared statement of Dr. Olive follows:]

Prepared Statement of Nathaniel ``Nate'' Olive, Ph.D., Owner/Operator, 
 Ridge to Reef Farm; Co-Founder and President, Virgin Islands Farmers 
             Alliance, Inc., Frederiksted, St. Croix, USVI
    Good day, Members of Congress, supportive staff, fellow testifiers, 
and the listening public. My name is Nate Olive and I am an owner/
operator farmer at the USDA certified organic Ridge to Reef Farm on the 
island of St. Croix. I am also the elected President of the Virgin 
Islands Farmers Alliance (VIFA). I am here today to share my own 
experience as well as that of other farmers from my area in navigating 
Federal support of farming in the United States Virgin Islands. Where 
appropriate I will also attempt to elucidate a little of the relevant 
experience of my other fellow farmers to the best of my ability and 
knowledge. I sincerely hope that my input can help make a difference in 
improving the quality of life for farmers in the U.S. Virgin Islands 
and beyond. I share the belief that a strong focus on building capacity 
of small and medium sized farms in our territory is ultimately the only 
way in the long run to strengthen and sustain a viable, secure, and 
sovereign local food system.
    I will start by telling you a bit about Ridge to Reef Farm, our VI 
Farmers Alliance, and the general state of agriculture in the Virgin 
Islands from the farmers' perspective. Next, I will share some relevant 
experiences with Federal programs that fall under the USDA farm bill. 
Finally, would like to share a few suggestions that may help improve 
the Federal support of farmers in small insular rural areas like the 
Virgin Islands.
    First, Ridge to Reef Farm is the only USDA certified organic farm 
on over 100 acres in the Virgin Islands and is among the most 
productive. Our mission is to help reverse the trend of food import 
dependency, which is greater than 98%, for our insular territory, 
through ecologically regenerative and culturally appropriate 
agricultural practices in the region. For 12 years we have maintained a 
diverse planting regime of over 100 varieties of organic fruits and 
vegetables. We also raise pasture-raised sheep and hogs that are not 
certified organic due to the lack of available cost-effective organic 
certified feed sources. Like all farms currently in the territory we 
grow for our local markets. Our primary markets include market stands, 
supermarkets, a Community Supported Agriculture membership program, and 
the territory's Farm to School program for which we serve as a multi-
farm aggregation hub under contract with the VI Department of 
Education. In addition to crop sales we participate in agritourism 
activities such as tours, farm to table dinners, and the hosting of 
volunteer groups for farm stays, which are significant value-added part 
of our educational outreach and financial sustainability.
    Next, the Virgin Islands Farmers Alliance (VIFA) is a grassroots 
domestic nonprofit founded in 2018 and incorporated in 2019 to provide 
a unified voice for farmers in the territory. We started off as a 
collective of five professional farmers who regularly work together for 
the federally funded Farm to School program. After losing contracts 
created for our local market to foreign producers, we realized we had 
to band together to protect, advocate, and educate for our common local 
agricultural interests. Today we have over 100 members including 
farmers, farm family members, rising farmers, and farm supporters 
across the three major Virgin Islands of St. Croix, St. Thomas, and St. 
John. Together we coordinate Farm to School deliveries among other co-
marketing activities, test various vegetable seed varieties under a 
Sustainable Agriculture Research and Education (SARE) grant, and will 
soon be establishing a food hub storage facility for Alliance members 
with the support of World Central Kitchen's Food Producer Network.
    As we meet today, the state of agriculture in the U.S. Virgin 
Islands is again in its toddler phase. Agriculture was recently reborn 
here decades after the island shifted away in the 1960s in a top-down 
effort from an agrarian society towards heavy industry. At that time 
sugar cane was the central crop produced among many other speciality 
crops and grass-fed Senepol beef grown for local consumption and for 
export. After that period of time, small local farms could no longer 
compete with increasing low cost imports and most farms closed for 
good. Yet in the past 20 years, demand for locally produced fresh foods 
has steadily risen. Now, demand is soaring as price points and consumer 
demand have leveled out. There is a broad base of support for 
agriculture to rejoin the economic development of the Virgin Islands. 
Yet many challenges remain, largely due to our small population and 
land area, a relatively large local government that lends to a favor-
driven political environment, and our insular geography that greatly 
increases farm input costs in every way in comparison to our import 
market competition. Nearly all farms here are considered small farm 
operations and the economic rules of efficiency and scale continue to 
work against us. So today, local agriculture in the VI is energetically 
trying to find its footing so that it may mature into the grown-up 
industry that our people require. But like other insular rural areas, 
it cannot reach its optimal potential without special considerations of 
support through the farm bill.
    Now, I will address our experience with USDA Farm Bill related 
programs:
    First, one of the most effective programs has been the NRCS' EQIP 
conservation program. At Ridge to Reef Farm, we have used this program 
to dig wells, erect livestock fencing, establish rainwater catchments 
for irrigation, and construct a high tunnel for tomato and cucumber 
production. Many other farms have utilized this important program for 
similar purposes. The problems with the program are (1) the 
reimbursement nature of the program which is out of reach for most VI 
farmers. Even though there is a chance to get some of that money up 
front, it requires a short project completion deadline which is not 
feasible for projects that require significant input imports such as 
construction materials, (2) the multi-year timeframe from project 
application to approval for implementation, and (3) the anticipated 
cost-share ends up being a much lower percent because our costs are 
exponentially higher. For example, our high tunnel was supposed to be 
90% but it ended up being around 60% of the Federal anticipated 
implementation value from higher shipping and construction costs common 
in the continental U.S.
    Second, USDA disaster recovery programs such as debris removal were 
absolutely farm-saving after the impacts of hurricanes Irma and Maria 
in 2017--Thank you! I would not be speaking to you today without this 
program. Unfortunately, however, our farm was unable to complete the 
fencing recovery and fruit tree replacement programs that we were 
approved for. This is because we were unable to front the cost after 
being economically devastated by the disasters and did not have the 
means to pay up front for an unknown period of processing and eventual 
Federal reimbursement. The other complicating aspect was that producers 
were largely kept in the dark by the USDA about what disaster recovery 
costs would be reimbursed and at what rate. Without knowing complete 
program details including cost details, farmers were exposed to the 
risk of acquiring debt that we may not have reimbursed. Therefore, much 
of the funds made available for disaster recovery for us were left 
under utilized.
    Third, while Ridge to Reef Farm is USDA certified organic, we 
remain the one and only in the territory. While it seems like a strong 
niche position, we would rather have more company for partnerships. The 
costs of establishing and maintaining organic certification is 
drastically higher on island territories and needs greater support in 
cost-share programs than what currently is offered. We simply would not 
be certified today without the Federal cost-share program which saves 
us $750 a year on program related costs, which total approximately 
$2,000 annually plus the unvalued administrative hours on our small 
farm. The primary reason for low participation in organic is 
geographic, since inspectors must travel by air and receive 
accommodations, meals, ground transportation, and other related costs.
    Fourth, we were the first farm in the USVI to be awarded a Value-
Added Producer Grant. This grant was to create expand our agroforestry 
plan into fruit shares on our CSA program. We received the grant to 
write a planning grant. After completing that project we were later 
denied the implementation grant and but we plan to reapply.
    Fifth, as mentioned above, we participate in the federally funded 
Farm to School Special nutrition program since it started in 2014. We 
send crops every week that are gathered from local farms to the central 
school warehouse. We see a need for greater oversight on the award of 
these contracts to ensure that locally grown crops are given preference 
and contracts are executed with integrity.
    Some other relevant programs that we have participated in are:

   Non-insured Crop Disaster Assistance Program (after 2017 
        hurricanes)

   Livestock Forage Disaster Program (usually drought related)

   Geographically Disadvantaged Farmer program (needs a boost, 
        helpful but inadequate)

   USDA Rural Energy Program

    Finally, I would like to share a few humble suggestions to 
strengthen the farm bill for farmers in insular areas:

  (1)  Increase funding directly to farms instead of channeling through 
            the local government. Be careful of funding that creates 
            completion with the existing farming community with our 
            small population.

  (2)  Increase capacity of our local USDA offices to provide more on-
            farm support and grant writing/program application 
            assistance. Also, reduce the amount of paperwork required 
            from farms to participate.

  (3)  Raise the expected costs for EQIP conservation practices so that 
            cost-share percentages are on par with the rest of the 
            country

  (4)  Remove barriers of program participation by removing the 
            reimbursement nature of many programs such as EQIP and 
            hurricane disaster programs.

  (5)  Establish a means for farmers to get individual health insurance 
            policies, which are currently unavailable.

    Thank you for your attention and support in promoting better food 
production in the USVI and other insular areas faced with the same 
challenges. I am happy to answer any questions you may have.
            Sincerely,

Nathaniel ``Nate'' Olive, Ph.D.

    The Chair. Dr. Olive?
    Dr. Olive. Yes.
    The Chair. You have gone way over your time.
    Dr. Olive. Okay, great.
    The Chair. If you want to close out, and we will ask 
questions.
    Dr. Olive. Yes, that is it. Thank you for your attention, 
and I appreciate it. I will yield back.
    The Chair. Thank you. The last witness, Mr. Kettler, you 
are recognized for 5 minutes.

STATEMENT OF BRUCE KETTLER, DIRECTOR, INDIANA STATE DEPARTMENT 
OF AGRICULTURE; SECOND VICE PRESIDENT, NATIONAL ASSOCIATION OF 
                     STATE DEPARTMENTS OF 
                 AGRICULTURE, INDIANAPOLIS, IN

    Mr. Kettler. Good morning, and thank you, Chair Plaskett 
and Ranking Member Baird, for the opportunity to speak today. I 
really appreciate it.
    My name is Bruce Kettler, and I serve as the Director of 
the Indiana State Department of Agriculture. I have over 30 
years of leadership experience in the agriculture industry with 
knowledge of production agriculture, sales, and the agriculture 
supply businesses. Prior to joining ISDA, I spent 11 years at 
Beck's Hybrids and 17 years at Dow AgroSciences where I worked 
in a variety of roles, including sales, marketing, and public 
and industry relations.
    In addition to my role as Director at ISDA, as 
Representative Baird mentioned, I also serve as the Second Vice 
President for the National Association of State Departments of 
Agriculture or NASDA. NASDA is a nonpartisan, nonprofit 
association that represents the elected and appointed 
commissioners, secretaries, and directors of the Departments of 
Agriculture in all 50 states and four U.S. Territories, 
including the U.S. Virgin Islands, Madam Chair. NASDA grows and 
enhances American agriculture through policy, partnerships, and 
public engagement.
    I would first like to recognize the importance of the 
Agriculture Improvement Act of 2018. The 2018 Farm Bill was a 
unified bipartisan bill that secured a commitment to American 
farmers and ranchers while protecting the critical food and 
nutritional assistance programs for those who need it most. As 
I interact with farmers, our agricultural supply businesses, 
and industry leaders in Indiana, the word uncertainty keeps 
coming up time and time again. It has replaced the word 
resiliency that was so often used during the pandemic.
    Uncertainty sends chills down the spines of farmers as they 
attempt to make critical business decisions. Uncertainty 
impacts families in need of assistance with putting food on the 
table. And uncertainty disrupts the food supply chain, as we 
witnessed throughout the pandemic.
    As the House Committee on Agriculture begins these hearings 
for the 2023 Farm Bill, it is vital that Congress provide 
certainty by delivering a forward-looking, fully funded farm 
bill and on time. If the pandemic and the recent events 
unfolding in Ukraine have taught us anything, it is that this 
farm bill and all future farm bills are an issue of national 
security.
    State Departments of Agriculture play a critical role in 
food and agriculture policy in the United States. As regulators 
and advocates for the agricultural industry, NASDA's voice is 
unique between the nexus of the states and the Federal 
Government. NASDA members lead in areas ranging from food 
safety to resource conservation and promote agriculture locally 
and abroad.
    As the state regulators and co-regulators with Federal 
agencies, NASDA members are actively involved in ensuring the 
safety of an abundant food supply, protecting animal and plant 
health, implementing conservation programs, and promoting the 
vitality of rural communities. In a time of increased risk and 
challenges for the agriculture industry, Federal legislation 
and regulations should work to promote economic stability while 
guaranteeing a safe and accessible food supply. This work must 
be a joint venture between the states and Federal Government. 
Looking forward, NASDA calls for a renewed commitment to 
cooperative federalism. It is critical that this partnership 
between states and the Federal Government recognizes and 
enhances the role of states in Federal policymaking.
    In my written testimony submitted to the Committee, there 
are additional comments about Specialty Crop Block Grants, 
invasive species, the Food Safety Modernization Act (Pub. L. 
111-353) and food safety education, the FIFRA Interagency 
Working Group, hemp, urban agriculture, and the Local 
Agriculture Marketing Program.
    Agriculture producers, the rural economy, and communities 
of every size rely upon a forward-looking and fully funded farm 
bill. The farm bill must provide farmers and ranchers with a 
reliable safety net. The farm bill must provide consumers 
access to the safest and most affordable food supply. The next 
farm bill must remain unified, securing a commitment to 
American agriculture and critical food and nutrition assistance 
programs for those who need it most. In short, the next farm 
bill is an issue of national security.
    Thank you for the invitation to address the Subcommittee 
today, and I look forward to answering your questions.
    [The prepared statement of Mr. Kettler follows:]

Prepared Statement of Bruce Kettler, Director, Indiana State Department 
 of Agriculture; Second Vice President, National Association of State 
              Departments of Agriculture, Indianapolis, IN
    Good morning and thank you, [Chair] Plaskett and Ranking Member 
Baird, for the opportunity to speak today. My name is Bruce Kettler and 
I serve as the Director of the Indiana State Department of Agriculture 
(ISDA). I have over 30 years of agricultural leadership experience and 
knowledge of production agriculture, sales and agriculture supply 
businesses. Prior to joining ISDA, I spent 11 years at Beck's Hybrids 
and 17 years at Dow AgroSciences where I worked in a variety of roles 
including sales, marketing and public and industry relations.
    Indiana is the tenth largest farming state in the nation, and we 
have more than 56,000 farms. While our top commodities are corn, 
soybeans, livestock and dairy, we grow many specialty crops as well. We 
are #2 in popcorn, #3 in tomatoes, #4 in pumpkins and peppermint and #5 
in watermelon.
    In addition to my role as Director at ISDA, I also serve as the 
Second Vice President for the National Association of State Departments 
of Agriculture (NASDA). NASDA is a nonpartisan, nonprofit association 
that represents the elected and appointed commissioners, secretaries, 
and directors of the departments of agriculture in all fifty states and 
four U.S. Territories. NASDA grows and enhances American agriculture 
through policy, partnerships and public engagement.
    As the state regulators and co-regulators with Federal agencies, 
NASDA members are actively involved in ensuring the safety of an 
abundant food supply; protecting animal and plant health, implementing 
conservation programs; and promoting the vitality of rural communities.
I. Introduction
    As we begin today's hearing, it is important to first recognize the 
importance of the Agriculture Improvement Act of 2018 (2018 Farm Bill). 
The 2018 Farm Bill was a unified, bipartisan bill that secured a 
commitment to American farmers and ranchers, while protecting the 
critical food and nutritional assistance programs for those who need it 
most.
    ``Uncertainty'' sends chills down the spine of farmers as they 
attempt to make critical business decisions. ``Uncertainty'' impacts 
families in need of assistance with putting food on the table. 
``Uncertainty'' disrupts the food supply chain as we witnessed 
throughout the pandemic.
    As the House Committee on Agriculture begins hearings for the 2023 
Farm Bill, it is vital Congress provides ``Certainty'' by delivering a 
forward-looking, fully funded farm bill, on time. If the pandemic and 
the recent events unfolding in Ukraine have taught us anything, it is 
that this farm bill, and all future farm bills are an issue of national 
security.
II. Cooperative Federalism
    State Departments of Agriculture play a critical role in food and 
agriculture policy in the United States. As regulators and advocates 
for the agriculture industry, NASDA's voice is unique in the nexus 
between the states and the Federal Government. NASDA members lead in 
areas ranging from food safety to resource conservation and promote 
agriculture locally and abroad.
    In a time of increased risk and challenges for the agriculture 
industry, Federal legislation and regulations should work to promote 
economic stability while guaranteeing a safe and accessible food 
supply.
    This work must be a joint venture between the states and Federal 
Government. Looking forward, NASDA calls for a renewed commitment to 
Cooperative Federalism. It is critical this partnership between states 
and the Federal Government recognizes and enhances the role of states 
in Federal policymaking. Due to the importance of Cooperative 
Federalism in advancing agriculture, we promote the following 
principles:

  1.  Advancing the role of states--as co-regulators and not simply 
            stakeholders--in the Federal regulatory process

  2.  Ensuring Federal legislation reflects the unique role states 
            serve in implementing Federal legislation

  3.  Increasing flexibility for state program delivery

  4.  Enhancing resources for states and no unfunded mandates

  5.  Supporting the roles and respecting the authorities of states.
III. Specialty Crop Block Grants
    We at the Indiana State Department of Agriculture have administered 
the Specialty Crop Block Grant Program (SCBGP) since its inception in 
2006 and we appreciate that the law gives this role to the states. Some 
of the program's greatest successes have been research focused in 
partnership with our land-grant university, Purdue. One such example is 
Dr. Krishna Nemali's 2017 project ``Research-Based Extension Education 
Program for Increased Year-Round-Profitability in Hydroponic Lettuce 
Production'' that was funded through the Specialty Crop Block Grant 
Program. Hydroponics are a specialized, expanding and capital-intense 
cropping system and many Indiana growers lack access to training and 
updated research on this production method. This project conducted 
research on varietal trials, developed nutrient management strategies, 
and helped understand the effects of root-zone heating and supplemental 
lighting on profitability. In addition, the extension element of the 
program supported an annual Hydroponics Workshop and supported the 
development of educational materials for growers.
    While the Specialty Crop Block Grant Program is effective in 
enhancing specialty crops throughout the state and nation, it is not 
without its challenges. One difficulty our team faces every year is 
answering the question, ``What is a specialty crop?'' The current 
definition is broad and creates confusion on which crops make the cut. 
Sunflowers are one example. As an oil crop they are deemed ineligible, 
but there is no guidance on if they are eligible within the category of 
cut flower products. The USDA list is helpful but not all-inclusive and 
sometimes it creates more questions than answers.
    Another challenge of the program is finding proposals that meet the 
parameters laid out by USDA concerning increasing market access and 
promoting increased sales. Sometimes the goal is to simply sustain 
markets that might otherwise be declining. Often the best applications 
for funding are those from large universities who have grant writing 
resources, and these proposals are almost all tailored towards research 
or education. While this is important work, we see a need for both 
maintaining and enhancing market access for our specialty crop 
industry. Smaller groups and businesses are often the ones proposing 
market access projects but due to a lack of staff or experience with 
grants, they either don't apply or struggle to pull together a quality 
application. These organizations have the knowledge and ideas that 
would benefit their local specialty crop industry, but they don't have 
the same access to the program. We ask that the Committee consider 
allowing USDA to direct funds to be used for technical assistance for 
the grant application process, and that the grant parameters be 
expanded to address the current and future needs of the industry.
    NASDA recommends increasing funding for the SCBGP while ensuring a 
flexible, locally responsive and state-led program.
IV. Invasive Species
    Invasive species concerns vary from state to state and every year, 
new outbreaks of invasive species are found in the U.S. They threaten 
all types of crops as well as forestry, livestock, human health, and 
the environment. It's estimated that invasive species cost the U.S. 
economy $21 billion per year, with agriculture being the sector hit 
hardest. In Indiana for example, the spotted lanternfly was recently 
discovered in Switzerland county. Our state has expended numerous 
resources to ensure it doesn't continue to spread and wreak havoc on 
our vineyards, orchards and hardwoods industry.
    While many Federal and state programs are in place, the level of 
resources needed to combat the problem is nowhere close to being able 
to adequately deal with the issues at hand. NASDA has a long history of 
supporting and advocating for the Federal Government's role in 
preventing, eradicating or controlling invasive species and diseases. 
They also promote Federal-state cooperation leading towards the 
expansion of states efforts to identify, respond to, eradicate and 
control invasive pests and diseases. These collaborative efforts come 
through access to mandatory funding through the CCC, as well as 
pursuing discretionary appropriations for Federal and state early 
detection and rapid response programs, risk-based programs, emergency 
management, support for research and survey advancements and funding 
for management and control options.
    NASDA supports an increase in baseline funding for the highly 
successful Plant Pest and Disease Management & Disaster Prevention 
Program and the National Clean Plant Network to provide additional 
tools for domestic invasive species issues. Bold action is needed to 
mitigate and prevent invasive species' catastrophic impact to farmers 
and ranchers.
V. FSMA and Food Safety Education
    Our current food safety regulatory system is the shared 
responsibility and partnership between local, state, and Federal 
Governments. The Food and Drug Administration (FDA) is responsible for 
ensuring that domestic and imported food products are safe, sanitary, 
nutritious, wholesome and properly labeled. While FDA has primary 
authority in the food safety network, there is an entire system of 
complementary state and local laws working in harmony to protect our 
national food supply. Because all problems exist locally first, states 
often act as a lookout for emerging issues and can rapidly respond, 
often before such issues rise to the level of national concern, and 
before FDA takes action.
    State Departments of Agriculture are the front line of protection 
for consumers when it comes to food safety. To support FDA's mission, 
the statute recognizes the necessity for Federal-state cooperation 
allowing state agencies to assume primary responsibility for the actual 
inspections, enforcement, training, and carrying out a wide range of 
other food safety regulatory activities. For example, FDA contracts 
with states to monitor medicated animal feeds and to investigate 
incidents of pesticide or drug residues in foods. Approximately 80 
percent of domestic food safety inspections in the United States are 
completed at the state and local level.
    Currently, 46 states, including Indiana, and one Territory have 
entered into cooperative agreements with the FDA to educate and/or 
regulate farms subject to the law based on a framework NASDA developed 
through its agreement with FDA. This model of ``educate before and 
while you regulate'' has been extremely effective in Indiana in 
bringing farms into compliance with the Food Safety Modernization Act 
(FSMA). NASDA also developed an OFRR program to foster a dialogue 
between the farmer and the regulator and/or educator about the 
requirements of the Produce Safety Rule. The program develops a 
cooperative relationship between the grower, educator and regulator and 
is helpful not only in implementing the Produce Safety Rule but also 
beneficial with responding to a food safety outbreak.
    I encourage the Committee to continue prioritizing outreach and 
education. In order to meet the prevention goal of FSMA, funding for 
this program and continuing education (such as for educating farmers on 
the recently proposed water rule) will be vital.
    NASDA recommends the Committee provide resources to assist 
producers in complying with the Food Safety Modernization Act. There 
are several other priority areas that would advance food safety on the 
farm that state programs are involved in that we think should be 
funded. We are in the process of developing specific recommendations 
and will provide more details to the Committee once we finalize our 
recommendations.
VI. FIFRA Interagency Working Group
    As agriculture continues to grow and change, it is more important 
than ever for farmers to have adequate tools in their toolbox. 
Therefore, we supported efforts in the 2018 Farm Bill to establish a 
Federal Interagency Working Group to address the interrelation between 
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the 
Endangered Species Act (ESA). The working group provides a formalized 
opportunity for the five designated member agencies to come together to 
identify needed improvements to the ESA, with considerations in place 
for pesticide regulation. Ultimately, this collaboration provides a 
unique opportunity for EPA to implement FIFRA more effectively and 
efficiently, with science-based research and collaborative input. As we 
hear from farmers, growers and industry members every day, this type of 
collaboration and opportunity for improvement is needed in a world of 
ever-changing technologies and supply chain disruptions.
    As the Committee considers additional oversight and legislation to 
further these goals, the Indiana State Department of Agriculture along 
with NASDA believes it is important to emphasize to the Committee that 
most of the individual state departments of agriculture serve as co-
regulators with Federal agencies on numerous Federal environmental 
statutes, including FIFRA and the ESA. Consistent with the objectives 
of cooperative federalism, states must be involved early and thoroughly 
in all listing, determination and other ESA regulatory procedures, as 
they are valuable resources for data and have a greater understanding 
of local landscapes. As regulatory partners, Federal agencies should 
seek state agency involvement and consultation as the National Marine 
Fisheries Service and the U.S. Fish and Wildlife Services work toward 
the ultimate goal of de-listing species.
    As guidance to the Committee, NASDA has established a comprehensive 
policy on ESA modernization efforts outlined below:

   NASDA supports the goal of conserving threatened and 
        endangered species. Any program must also preserve private 
        property rights and allow for a balance between agricultural 
        production and species conservation;

   NASDA believes listing and de-listing decisions must be 
        based on reasonable scientific criteria and sound science. 
        Further, any decision-making in the petitioning, determination 
        and listing processes should acknowledge and analyze the 
        economic impact to landowners and the surrounding community;

   NASDA supports a greater role for states in implementing and 
        enforcing the Act. NASDA also supports greater partnership 
        between the states and the Services on gathering species and 
        habitat data, the petition and determination processes, 
        preparation of recovery plans, identification of recovery 
        areas, and subsequent de-listing;

   NASDA supports voluntary incentive-based agreements with 
        landowners for captive propagation, species population support 
        programs, and alternatives to listings. Landowners should 
        receive certainty from the Services that their cooperation in 
        endangered species protection will not result in increasing 
        demands and regulatory prohibitions on their farming or 
        ranching operation;

   NASDA believes that implementation of the ESA should 
        consider overall watershed and landscape health as a primary 
        goal in the context of threatened and endangered species;

   The listing, designation of critical habitat, and 
        implementation of recovery plans must utilize and solicit 
        landowner feedback and public comment. NASDA supports 
        transparency and extensive public input on the ESA listing, de-
        listing, exemption and recovery processes. Also, NASDA believes 
        the ESA must work towards de-listing species while working with 
        landowners. NASDA also supports ESA reform that includes the 
        above tenets;

   NASDA believes EPA and the Services must establish a 
        collaborative, transparent and streamlined consultation process 
        for pesticide registrations. The process should include clearly 
        communicated criteria between EPA and the Services, be based on 
        best available science and eliminate any duplicative steps. Any 
        decisions made between EPA and the Services should not place 
        unreasonable requirements on registrants and producers; and

   EPA and the Services must include adequate time and robust 
        opportunities for input from state departments of agriculture, 
        who regulate pesticides in most states, and other impacted 
        stakeholders. Regulatory decisions should be made in a timely 
        manner that allows affected parties meaningful participation 
        while addressing regulatory certainty.
VII. Hemp
    Hemp continues to be a growing industry in agriculture, and since 
its inclusion in the 2014 Farm Bill, we have seen continued market 
development and interest at the state and national levels. According to 
the USDA National Hemp Report released in February of 2022, there were 
33,480 acres of hemp harvested in the United States last year, with an 
estimated value of $824 million. But there are areas of opportunity to 
improve our nation's hemp policy to ensure the longer economic 
viability of hemp.
    NASDA supports the growth of the hemp industry, and this includes 
advocating for hemp to be considered both a specialty crop and an 
agronomic commodity in the 2023 Farm Bill. Adding hemp to the list of 
eligible crops within the Specialty Crop Block Grant Program would 
encourage more research and market development and help lay a strong 
foundation for the industry to build on. Also, amending the definition 
of hemp to allow up to one percent (1.0%) THC would provide needed 
flexibility and ensure more product gets off the farm and into the 
hands of a processor.
VIII. Urban Agriculture
    Urban agriculture plays a valuable role in many states, including 
Indiana. It is often an opportunity for producers in urban areas to be 
entrepreneurs while gaining experience and contributing to the local 
food system. NASDA supports increased opportunities for urban 
agriculture through a big tent approach where all forms of food and 
agricultural production are essential. While there exist challenges in 
developing urban agriculture, including access to land and capital, 
this type of food production can diversify individuals' income sources, 
mitigate food deserts, and support community as well as economic 
development. NASDA supports the Office of Urban Agriculture and 
Innovative Production at the U.S. Department of Agriculture as 
authorized by the 2018 Farm Bill.
IX. Local Agriculture Market Program
    The NASDA Foundation \1\ is part of a Community of Practice 
Coordinating Organization that works with the USDA Agricultural 
Marketing Service (AMS) in providing technical assistance support on 
Local Agriculture Market Program (LAMP) grant opportunities for black, 
indigenous people of color (BIPOC), rural and other underserved 
communities. NASDA Foundation hosted webinars to provide resources and 
information on how to apply to the Farmers Market Promotion Program 
(FMPP) and Local Food Promotion Program (LFPP) grants. It is through 
this work that the NASDA Foundation discovered that many black, 
indigenous people of color individuals and organizations are 
intimidated by the USDA application process for grant funding. Due to 
the time, it takes the individuals to learn and apply for grants; 
black, indigenous people of color businesses, indicated that they do 
not have the organizational capacity to go through the grant cycle 
process. A post-technical assistance survey found that more than 77 
percent of BIPOC businesses did not apply for a LAMP grant despite 
receiving technical assistance, with a majority citing the application 
processing was both too daunting and time-consuming.
---------------------------------------------------------------------------
    \1\ NASDA Foundation is the only educational and research 
organization that directly serves state departments of agriculture in 
all 50 states and four U.S. territories. NASDA Foundation is a 
501(c)(3) nonprofit organization that focuses on education, outreach 
and research that galvanizes the agricultural industry.
---------------------------------------------------------------------------
X. Conclusion
    Agricultural producers, the rural economy, and communities of every 
size rely upon a forward-looking, and fully funded farm bill. The farm 
bill must provide farmers and ranchers with a reliable safety net. The 
farm bill must provide consumers access to the safest and most 
affordable food supply. The next farm bill must remain unified--
securing a commitment to American agriculture and the critical food and 
nutritional assistance programs for those who need it most. The farm 
bill is an issue of national security.

    The Chair. Thank you very much to all of our witnesses for 
your questions. We will now take witness questions from the 
Members in order of seniority, as we did with the first panel. 
And I will start with my questions first.
    Dr. Olive, I wanted to ask if you would share with us which 
USDA local farm system programs and other USDA programs have 
been beneficial to your farm or to farms like yours in the 
Virgin Islands?
    Dr. Olive. Yes, thank you. Well, like I mentioned in my 
testimony, I mean, one of the biggest things has been the NRCS 
EQIP Program, which is the Environmental Quality Incentives and 
conservation program. So that has been, it really helped build 
capacity in a sustainable way for our farm and a lot of other 
farms. As we know, water is a huge issue in the Virgin Islands 
for all the farms, especially on St. Thomas and other areas in 
St. Croix and St. John, so these ways to establish with the 
expertise of the USDA and to help fund some of that have been 
really instrumental in our success. And after the hurricanes, 
the support that we received in the disaster programs, we would 
have lost a lot of farms without those. So, I would say that 
EQIP is a regular thing, and then the disaster recovery was 
huge as well.
    The Chair. We have talked in this Committee quite a bit 
about supply chain issues and how that has been magnified 
during the pandemic. In the Virgin Islands, that is really a 
fundamental issue that has affected us for many, many years. 
Can you speak to how we on this Committee might support insular 
areas or isolated areas that have real issues not only in terms 
of having the correct amount of supplies coming in but also the 
cost of that and what that means to farmers as well?
    Dr. Olive. Thank you for asking. In these times with 
supply-chain shortages, the feeling that people have in the 
states about getting things and costs rising is our everyday 
reality in the Virgin Islands. That is how it has always been 
in the Virgin Islands. And now we even have an additional cost 
on all the inputs that go into our farm from fertilizers to 
irrigation equipment, seeds, tractor parts. You wouldn't 
believe what I paid to get a tractor tire shipped here 
recently.
    So I think what could happen is there is the geographic 
disadvantaged program through the FSA that helps cover a 
portion of receipts that we submit every year, and that pool is 
divided between all the applicant farmers. I have stopped doing 
it because the pool seems too small, and honestly, it is not 
worth my paperwork to do that, so we need a larger pool of 
money for that disadvantaged program.
    And we also need help with some up-front stockpiling of 
things in some way so that they can be made available to 
farmers in a quick way because the thing with farming is a lot 
of things are very time-sensitive, and when you need something, 
you need it now and it takes so long to get here. That is 
another cost that is not overtly financial but it ends up being 
that way. So more dedicated funding to insular areas in the 
Virgin Islands and all the other insular areas around.
    The Chair. Thank you. Ms. Batcha, the USDA is reportedly 
finalizing three key and much-anticipated organic industry 
regulations under the National Organic Program addressing: one, 
transitioning dairy cows; two, livestock handling and poultry 
living conditions; and oversight and enforcement of NOP-
certified products. Some of these proposals date back to the 
mid-2000s. We are really excited that that is actually 
happening. What is the importance of USDA finally finalizing 
these National Organic Program regulations to the U.S. organic 
industry?
    Ms. Batcha. Thank you for that. I can't underscore how 
important it is that these three rules are finalized. The first 
we heard of this morning in terms of Origin of Livestock being 
finalized, and then the other two rules you mentioned. But 
additionally, there are almost two dozen additional rules still 
in the pipeline. I think the thing that is important to 
remember is oftentimes these rules, as of the case of the two 
livestock rules and the import oversight rule that was 
authorized in the last farm bill, these regulations level the 
playing field for producers, so they are all playing by the 
same rules. If you are entering the marketplace, you know that 
other farmers, regardless of where they are in the country or 
on the globe, are following the same set of standards, so you 
can understand what the marketplace is expecting from you, and 
it is a fair, level playing field.
    I think the other important thing is that as these 
standards have languished at USDA, it has driven private 
certification into the market and required producers and 
handlers to seek additional certification on top of their 
organic certification, which complicates their production 
systems, adds costs, and confuses the value of the seal in the 
marketplace. And they are having to do that to compensate for 
the standards not having been finalized. It also stalls 
opportunities in innovation. So if the playing field is not 
level globally, it disincentives U.S. producers to enter the 
market and produce some of these important crops domestically 
in the case of livestock feeds and other grains. So it impacts 
farmers at a very granular level in terms of cost and the 
playing field globally and across the country, as well as 
innovation in the marketplace and advancing organics, so I 
appreciate your question. Thank you.
    The Chair. Thank you. Thank you very much.
    I now ask my Ranking Member, my colleague Mr. Baird, for 
his 5 minutes of questioning.
    Mr. Baird. Thank you, Madam Chair.
    Director Kettler, your testimony calls attention to NASDA's 
support for the growing hemp industry through additional 
support like including hemp in the Specialty Crop Block Grant 
Program. So in your time as Indiana's Director of Agriculture, 
I have known you to be a formidable force in bringing hemp to 
Hoosier farms as a means of crop diversification. As you have 
traveled the State of Indiana and talked to Indiana farmers, 
what do you find to be the most needed to address the policy 
troubles of hemp production?
    Mr. Kettler. Thank you, Representative Baird. I think first 
and foremost I hear a lot of people say they want to be 
included as a specialty crop and have available things like 
Specialty Crop Block Grants. They feel that it is new. They 
need some help to be able to get it off the ground and, 
frankly, to try to find the new markets that those grants 
oftentimes help people with as well.
    One of the things in my written testimony we talk about 
including it in the farm bill more generally from a crop 
insurance standpoint, obviously not the jurisdiction of this 
Subcommittee, but I think the Specialty Crop Block Grants and 
allowing it to become a specialty crop is pretty critical. And 
in Indiana we consider that part of the economic development 
opportunity, so trying to bring in processors and people that 
can add value to the crop is important as well.
    Mr. Baird. Well, thank you. And continuing on, support for 
the land-grant universities is included in the Research Title 
of the farm bill, and I would be remiss if I did not mention 
the important role that these institutions play in conducting 
cutting-edge research and educating our next generation of 
agriculturalists. So can you talk more about the land-grant 
system and how you work with it?
    Mr. Kettler. Yes, I would be glad to. Probably one of the 
biggest ways is through that Specialty Crop Block Grant 
Program. There is typically four or five applications made for 
that program into ours, so they do a lot of work there. We also 
work with leadership, and within the extension service to do a 
lot of programs and help. A good example, farmers' stress, 
mental health, we are working with Purdue Extension Service on 
that. There is also a lot of cooperation within, in that case, 
the College of Agriculture at Purdue, but we are also looking 
for ways as a department to work with other schools within the 
State of Indiana that may have other specialties. I am thinking 
particularly in the conservation area where we can rely upon 
the works that Notre Dame is doing or IU is doing or other 
schools within the state and finding ways for them to all 
cooperate together, and I think that is pretty important 
because very often they have areas of specialization that allow 
them to be able to work together and deliver a better product 
in the end.
    Mr. Baird. That always helps in the implementation when you 
have cooperation across that, and I am glad you mentioned the 
economic development aspect of that.
    So, Ms. Batcha, would you care to elaborate about that same 
thing, about your working with the land-grant universities and 
how you see that?
    Ms. Batcha. Thank you. One of the important programs that 
supports organic production systems is the Organic Research and 
Extension Initiative Program, so those are important research 
dollars. We administer a nonprofit organization called the 
Organic Center that covers science and does invest directly in 
science at universities, increasingly at land-grant 
universities, and we also play a role in helping connect 
organic agriculture researchers across universities to 
coordinate and discuss and share research priorities with each 
other.
    We are really fortunate that this year for the first time 
we have been able to work with the Foundation for Food and 
Agriculture to provide some matching grants for industry 
investment in organic research focusing on land-grant 
universities, so thank you.
    Mr. Baird. So we have about 20 seconds left if any other 
witness would like to address that in 20 seconds.
    Mr. Oshima. I would be happy to talk about the work 
AeroFarms is actually doing with traditional land-grant 
universities. It is part of our bigger collaboration that we do 
with industry. We think it is critical as we are writing this 
new playbook in agriculture that we work closely and thinking 
about what is needed from a curriculum standpoint, a training 
standpoint, and thinking about this new science, machine 
vision, machine learning, a new way of farming, and so we work 
closely with the universities both in terms of that training 
and development but also on dedicated research and 
collaboration.
    Mr. Baird. Thank you. I am out of time. I could spend the 
rest of the afternoon with all of you, but I guess the Chair 
probably wants me to yield back.
    The Chair. Thank you. At this time I would ask Ms. Pingree 
for her 5 minutes.
    Ms. Pingree. Thank you very much, Madam Chair. I appreciate 
your holding this hearing. And I really appreciate all of the 
witnesses' testimony today. Thank you so much for spending your 
time with us and really helping us to think forward about the 
farm bill.
    I won't have a chance to dialogue with all of you, but I 
just want you to know we really will take in everything that 
you have had to say today and it is very useful to all of us.
    So for Laura Batcha, I am glad to be here with you today to 
celebrate finally that rule moving forward, and I know how 
important it is to organic dairy, so thanks for the work that 
the Organic Trade Association has done to also push on that.
    We are talking so much about the convergence between 
climate change and agriculture, and that will certainly be an 
important component of the farm bill, but I would love to hear 
from your perspective, from organic growers how we make sure 
that people understand the connection between what organic 
growers really have already done in terms of climate change, 
the critical practices that are so foundational to organic 
certification, and also what else do you think the USDA could 
be doing to make sure we make that connection and really 
ensuring that organic farmers are rewarded for what they are 
doing as we go forward thinking about our programs?
    Ms. Batcha. First, I want to thank you for all your strong 
leadership and support on helping get that Origin of Livestock 
rule across the finish line, so we really appreciate your 
leadership.
    The climate-smart agriculture discussion is interesting 
because now climate-smart agriculture has become such a buzz. 
And I think when you think about organic agriculture and the 
requirements of the production standard to include fostering 
soil, biodiversity, cover cropping, hedgerows, green manures, 
these are many of the same practices that are being looked at 
as the key tools to advance climate-smart agriculture. And they 
are embedded in the standards, and they always have been.
    We have a group of members in town this week, 150 folks 
from across the country, and one of our farmer members from 
Montana said yesterday to USDA that climate-smart is the new 
buzz but organic has always been soil-smart, and that is built 
into what the production practices are all about.
    I think it is also important that as we look at, for 
example, the pilot program that USDA is launching right now, we 
also have a built-in market reward and claim in the marketplace 
that can be leveraged in terms of helping the public understand 
the choice that you make with organic and how that ties to 
climate-smart agriculture. I think the things we are hearing 
from producers about any programs related to climate-smart 
agriculture and making sure, number one, that the early 
adopters are also rewarded in the system, the folks who have 
been doing this all along. Our research shows that on whole, 
organically managed soils have about 17 percent higher levels 
of sequestered carbon than soils as a whole in farms across the 
country, so they need to be included in the program and 
rewarded for their efforts over the last number of decades.
    I also think there needs to be really good crosswalks with 
oversight in the paperwork and the certification in the farm 
plans that are required in organic so that there can be 
streamlined qualification for programs that USDA may roll out 
so the farmers don't have to start over again and re-
demonstrate their climate-smart status.
    I think we also have some creative ideas that may require 
some support from the Committee in the next farm bill that 
could bring the USDA seal more into the future and allow that 
seal to communicate directly some of these values of organic 
production related to climate.
    Ms. Pingree. Great. Well, thank you for all of that. I look 
forward to working with you and certainly with organic farmers 
in general and making sure that all of the things that you 
mentioned are included.
    I don't have a lot of time, but, Ms. Smith, I really 
appreciate that you brought up one of the biggest challenges 
that we hear about, and that is labor and farmworker shortages. 
In the 30 seconds that I have left, do you want to just address 
a little bit more about what a challenge you see that as and 
how we should be doing more to address it?
    Ms. Smith. Sure. I mean, every year we kind of plant a crop 
that we assume the American population will want to buy from 
us, and every year we don't have enough people to harvest the 
right fruit that we have spent all this money investing in to 
grow. And so what we ultimately end up doing is leaving behind 
fruit from the end of an application or the end of the variety 
and just moving onto the next one. So, we have been feeling the 
labor shortage for years, but the demand is there, and so it is 
something we wrestle with and would really appreciate some 
support on creating a legal and stable workforce.
    Ms. Pingree. Well, thank you for that. We look forward to 
really working with you in addressing that. And the very idea 
that you are leaving fruit behind in the field is horrific from 
a food waste perspective and feeding hungry people, and then 
also for so many farms just balancing the budget and making 
sure it all works. So I need to yield back, but thank you 
again, everyone, for your testimony. I really appreciate it.
    The Chair. Thank you. At this time, I would like to invite 
Congressman Panetta for 5 minutes of questioning.
    Mr. Panetta. Great, thank you, Madam Chair, and thank you 
for having this hearing, and thanks to all of our witnesses, 
those who are here in the room, those who are here virtually. I 
appreciate your testimony and information. That will definitely 
be used as we head into the Farm Bill 2023.
    Laura, Ms. Batcha, good to see you again, as always. Based 
on the question that you just answered, you talked a lot about 
streamlining the regulations, but also in your testimony you 
talked about infrastructure capacity improvements. Can you 
elaborate a little bit more on the supply chain improvements, 
what they would do, what they might look like, and how they 
would bolster the organic industry.
    Ms. Batcha. Thank you for that. Nice to see you as well. 
When a farm transitions to organic, they have to transition 
their whole farm 3 years or the portion of their farm that they 
are bringing into organic, but they also have to develop new 
markets for their products. And the organic product off the 
farm has to be handled in a certified organic facility all the 
way through to the finished product, so if they grow their 
product on the farm, they have to be able to move that through 
the processing infrastructure that the commodities touch.
    One of the challenges with increasing the amount of organic 
production at the farm level in the U.S. is access to those 
markets, whether or not it be livestock processing, grain 
milling, handling facilities, and especially for the small- and 
medium-sized operations to have those facilities close enough 
to the farm that it makes the transportation and the management 
of that process reasonable. So we are really looking at a 
regional approach that is commodity-specific that really looks 
at some of the bottlenecks in the supply chain and invests 
there. But it is just a requirement of taking the product all 
the way through to the marketplace.
    Mr. Panetta. Great. Thank you for explaining that.
    Moving on to Ms. Smith, in your testimony you spoke about 
crop insurance. Now, obviously we on the Central Coast, based 
on the amount of natural disasters that we have been dealing 
with, especially in the last few years and what we will 
probably have to continue to deal with from wildfires to the 
lack of water with our drought, what we have seen is the desire 
to use Federal Crop Insurance Program. However, we don't see 
them as prolific as I think many of our producers here on the 
Central Coast would like them to be. Can you elaborate on how 
we could improve the crop insurance program and better 
incorporate our producers on the Central Coast in those types 
of programs to be able to use those type of programs?
    Ms. Smith. Thanks for that question, Mr. Panetta. So, I am 
unclear on what qualifies or doesn't qualify for crop 
insurance, but what I can describe are a few events that have 
happened in recent history in the Central Coast where no one 
secured any funding from the Federal Government. So one of 
those things would be we had this massive hailstorm last year, 
tore down millions of dollars' worth of tunnel infrastructure 
intended to protect crops. The crops were severely impacted, 
and the crop insurance didn't help with that in any substantial 
way, so that has been a really big one. We have had some heat 
events that are really unprecedented in the late summer months 
here on the coast, and again, millions of dollars----
    Mr. Panetta. Let me interrupt you if I may and basically 
ask what has been your understanding as to why producers on the 
Central Coast don't engage in the crop insurance programs as 
much as they should?
    Ms. Smith. So I think we all are on the Central Coast 
because of how temperate the climate usually is, so it might be 
just a lack of understanding of what they qualify for. It might 
be that it is perceived as arduous to secure funding. I really 
don't know. But what I am trying to say is this is kind of new 
that we would even need crop insurance or have these regular 
issues substantially impacting our crop, Mr. Panetta, so I 
don't know if it is just education or if it is that somehow we 
are not all qualifying or what, but I am happy to explore it 
and get back to you.
    Mr. Panetta. No, that is great. Thank you. And briefly, 
obviously I understand that Driscoll's entered into a new 
agreement with the private company up in south San Francisco in 
regards to indoor farming. You want to elaborate on that and 
maybe Mr. Oshima might want to talk about that as well.
    Ms. Smith. Yes, I think a lot of what Mr. Oshima described 
is the reasons why controlled environment agriculture is 
exciting to Driscoll's as well. We are very excited about our 
partnership. I was there yesterday, and there are ripe 
strawberries in there, so it is exciting. I think it really 
hits the mark on accessibility, reduces the vulnerability to 
supply chain issues, so we are excited, invested, and looking 
forward to what is there. But we are really learning right now.
    Mr. Panetta. We all are. Thank you, Madam Chair. I yield 
back.
    The Chair. Thank you. And I want to thank all of the 
witnesses that were with us both in the first and the second 
panel, and particularly I thank my colleagues who participated 
in the hearing, as well as the staff.
    Before we adjourn today, I invite the Ranking Member to 
share any closing comments he may have.
    Mr. Baird. Thank you, Madam Chair. The things that we have 
heard here today I think are very important to the farm bill in 
2023. I am thinking about specialty crops from the standpoint 
of fruits and vegetables being located closer to the 
population. We heard about labor. We heard about how the farm 
programs might tie into these specialty crops. And so in my 
closing thoughts I would just like to say that I really 
appreciate Mr. Bruce Kettler being here today and having the 
opportunity to be with him, and I yield back.
    The Chair. Thank you to the Ranking Member.
    As we close, it is important to emphasize that the 
provisions included within the Horticulture Title were critical 
to supporting American producers through challenging times. The 
ability for producers in these sectors to leverage programs in 
the title to face the challenges posed by the COVID-19 pandemic 
proved essential. It is clear that, as a Committee, we must 
build on these successes in order to continue to support our 
agriculture community.
    To our producer and stakeholder witnesses, USDA Under 
Secretary Moffitt, NRCS Chief Cosby, thank you so much for your 
testimony.
    I want to particularly thank those individuals on the 
second panel who provided their own on-the-ground expertise 
doing the work every day to support farmers, support producers, 
and support Americans who are eating the produce that they 
bring to the table.
    As we look ahead to the next farm bill, I look forward to 
taking this feedback in order to better address the needs of 
our producers and stakeholders. And it is my hope that the 
Members of this Committee can work collaboratively to be able 
to support and advance the interests of American agriculture.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplemental written responses from the 
witnesses to any question posed by a Member.
    This hearing of the Subcommittee on Biotechnology, 
Horticulture, and Research is adjourned.
    [Whereupon, at 12:08 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    Supplementary Material Submitted by Terry Cosby, Chief, Natural 
     Resources Conservation Service, U.S. Department of Agriculture
Insert 1
          The Chair. Thank you. I may not have time, Chief Cosby, for 
        you to be able to answer this, but any written response that 
        you could give would be appreciated. As you are aware, the 2018 
        Farm Bill established the Federal Advisory Committee for Urban 
        Agriculture and Innovative Production to, ``advise the 
        Secretary on the development of policies and outreach relating 
        to urban indoor and other emerging agricultural practices.'' I 
        understand that the Federal Advisory Committee held its first 
        public meeting last week and was hoping if you could share with 
        the Committee in written format or at different points if you 
        may have this during the questioning the details of that first 
        meeting. So thank you very much for that.

    The Urban Agriculture and Innovative Production Federal Advisory 
Committee (FAC) was established with 12 members selected by the 
Secretary representing the breadth of the stakeholder community as 
spelled out in the farm bill. The inaugural meeting of the FAC took 
place March 23 and 24, 2022. The meeting forum had 1,430 people 
registered to attend, and 184 people registered to provide comments 
during the public forum. Secretary Vilsack, Farm Production and 
Conservation leadership, and National Institute of Food and Agriculture 
(NIFA) officials participated in the first meeting, which was recorded 
and is available at https://www.usda.gov/partnerships/federal-advisory-
committee-urban-ag.
    During the 2 day meeting, the Committee consulted on NIFA's $10 
million Urban, Indoor, and Emerging Agriculture funding opportunity. 
The Committee also gave feedback on a draft of the updated Urban 
Agriculture Toolkit prepared by the Office of Urban Agriculture and 
Innovative Production. Members were also briefed by Farm Service Agency 
(FSA) and Natural Resources Conservation Service (NRCS) on the plans to 
establish USDA urban service centers to facilitate providing USDA 
services to urban producers.
    During the public forum, members of the public weighed in about 
urban areas needing access to clean soil and climate smart agriculture 
practices; urban producers needing access to land and supply channels 
to boost their income and establish sources of local food access; the 
need to modify the services available to rural producers to suit 
smaller farms with higher costs of production; and how the process of 
signing up to receive services from USDA could be improved to make it 
less burdensome so it is not a barrier to urban producers receiving 
USDA services.
Insert 2
          Ms. Brown. Well, thank you very much. I know I am nearing the 
        end of my time, but I do have one other question. And that is 
        that we know in 2018 the farm bill directed USDA to establish 
        the Office of Urban Agriculture, which is currently housed in 
        NRCS. How are you working internally within the agency and 
        externally across agencies like the Department of HUD to grow 
        urban agriculture? And with that, I would yield back. Thank 
        you.
          The Chair. Thank you. I would ask the witness if he could 
        respond to that in writing as time has expired at this time.

    Within the Natural Resources Conservation Service (NRCS), we are 
working to grow urban agriculture by updating practice standards and 
payment scenarios to be better suited to urban and small farms. NRCS 
has encouraged state leaders to create urban subcommittees in state 
technical committees and allows State Conservationists to create an 
Environmental Quality Incentives Program (EQIP) set aside for urban 
agriculture. NRCS has also been working with the Office of Urban 
Agriculture and Innovative Production (OUAIP) to prepare trainings for 
NRCS field staff on how to better serve urban and small farms.
    OUAIP's Interagency Advisory Committee (IAC) has over 60 members 
representing 15 USDA agencies and meets approximately every other month 
to collaboration and coordination of urban agriculture work across USDA 
agencies. The group shares best practices for updating programs and 
services to suit urban producers, seeks input from other USDA agencies 
on OUAIP priorities, and updates members on urban agriculture relevant 
work across the Department.
    OUAIP regularly collaborates with the Office of the Chief Scientist 
and the USDA Food Loss and Waste Liaison to include its Composting and 
Food Waste Reduction cooperative agreement accomplishments into the 
national United Nation sustainable development goals to reduce food 
waste at retail and consumer levels by 50 percent by 2030.
    OUAIP also has revived the USDA-wide People's Garden Initiative 
(PGI) to promote food producing gardens with an educational component 
and is collaborating with the Office of Tribal Relations on amplifying 
and supporting their Sovereignty Garden Initiative, which educates 
youth about traditional indigenous planting practices.
    OUAIP also holds regular meetings with other Federal agencies like 
the Housing and Urban Development (HUD) and the Environmental 
Protection Agency (EPA) and to share information and leverage existing 
Federal initiatives as it sets up urban service centers across the 
country. OUAIP is engaging with HUD at the Federal and regional level 
to identify networks of local stakeholders that can help spread the 
word about USDA services that will be offered from urban service 
centers, discuss how HUD's Community Development Block Grant Program 
can be leveraged to support urban agriculture initiatives, how urban 
agriculture can fit into community revitalization initiatives, and how 
HUD can help USDA establish relationships with local and city officials 
in communities USDA does not have a history of working. OUAIP holds 
regular discussions with EPA about how their Brownfields Program can 
facilitate urban soil testing and remediation as well as how state-
level EPA offices can assist the urban service centers being stood up 
by connecting local producers to soil testing services.
                                 ______
                                 
  Submitted Letter by International Fresh Produce Association, Et Al.
April 7, 2022

 
 
 
Hon. Stacey E. Plaskett,             Hon. James R. Baird,
Chair,                               Ranking Minority Member,
Subcommittee on Biotechnology,       Subcommittee on Biotechnology,
 Horticulture, and Research,          Horticulture, and Research,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

  Re: H.R. 2981, the Continuous Improvement and Accountability in 
            Organic Standards Act

    Dear Chair Plaskett and Ranking Member Baird,

    The ability to continue to provide quality, affordable organic 
fresh produce is a priority for our organizations and the U.S. growers, 
packers, and shippers we represent. Today, we are alerting you to our 
strong concerns regarding the Continuous Improvement and Accountability 
in Organic Standards Act (H.R. 2918) in its current form.
    Collectively, our organizations represent the majority of the fresh 
organic produce grown, harvested, packed, and distributed in the United 
States. We are strong supporters of the organic label, U.S. Department 
of Agriculture (USDA) National Organic Program (NOP) and actively 
participate in the National Organic Standards Board (NOSB) advisory 
committee process.
    At the outset we want to acknowledge that the process by which 
organic standards are established can and should be improved upon. 
However, H.R. 2918 in its current form would make the process worse, 
not better. Specifically, this bill would further elevate the authority 
of the NOSB, a 15-person volunteer Federal advisory board, in 
establishing regulatory policy for a multi-billion-dollar industry--
affecting tens of thousands of growers and millions of consumers. It is 
unrealistic to expect 15 volunteers to possess the expertise necessary 
to make informed public policy decisions regarding every production and 
handling method for every fresh fruit and vegetable grown across the 
country. Therefore, it is not surprising that throughout the history of 
the NOSB, appointees have largely not been representative of the 
broader organic fresh produce community. To illustrate our concern, in 
2017, the grower appointees serving on the NOSB collectively 
represented less than 200 acres of organic production.
    Congress recognized this when passing the Organic Food Production 
Act (OFPA) by making the NOSB an advisory committee and providing USDA 
with exclusive authority--following consultation with the U.S. 
Environmental Protection and/or U.S. Food and Drug Administration where 
appropriate--to set organic policy. If this bill were to become law in 
its current form, USDA would be required to justify--via rulemaking and 
in an expedited timeframe--agency's decisions regarding every 
recommendation of this voluntary advisory council, which the has 
limited scientific or production expertise and often a significant 
degree of advocacy bias.
    USDA should not be forced to rush into regulatory action by, or be 
required to justify a decision to not act upon a recommendation from, 
an advisory panel. Government agencies are answerable to the public. 
Advisory panels like the NOSB are not.
    We recognize that Federal advisory committees play an important 
role in shaping Federal policy. However, alarmingly, this bill would 
give the NOSB a role that goes far beyond advising USDA on policy, 
violates the spirit--if not the letter--of the Federal Advisory 
Committee Act (FACA). Title 6518 of OFPA states that the NOSB is 
subject to FACA, which is adamant that ``the function of advisory 
committees should be advisory only, and that all matters under their 
consideration should be determined, in accordance with law, by the 
official, agency, or officer involved.''
    FACA also emphasizes the importance of uniformity in the operation 
of advisory committees across both individual agencies and the 
government as a whole. This bill would place the NOSB in its own 
category among FACA's serving Federal agencies--something we believe to 
be unwarranted and would result in unsound public policy.
    The undersigned organizations do not oppose efforts to improve the 
process by which organic standards are established. We seek 
improvements to H.R. 2918, and are committed to working collaboratively 
with you and others to do so.
            Sincerely,

International Fresh Produce Association
Fresh Produce Association of the Americas
Northwest Horticultural Council
Western Growers Association
U.S. Apple Association

CC:

H.R. 2918 Cosponsors.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Jennifer Lester Moffitt, Under Secretary for 
        Marketing and Regulatory Programs, U.S. Department of 
        Agriculture
Questions Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question 1. Under Secretary Moffitt and Chief Cosby, can you 
discuss the current nexus between horticulture and urban agriculture?
    Answer. See Chief Cosby's response below.
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. As you know, Section 32 bonus buys are one of the most 
important tools in the toolbox to help specialty growers suffering from 
market imbalances. The goal of the program is to first help farmers and 
second support Federal feeding programs including school lunch and 
breakfast as well as food banks. We have heard from some commodity 
organizations that the timeline from when the request is made to AMS to 
when the product is purchased from the growers can in some cases take 
months if not close to a year. We are concerned that the program has 
grown unnecessarily bureaucratic in recent years as the Agricultural 
Marketing Service (AMS) negotiates with other agencies across the 
Department to quickly approve these requests. Can you provide the 
following information about the Section 32 Bonus Buy Program?
    Answer. USDA utilizes Section 32 funds to assist industries 
impacted by market disruptions and other factors that create an 
oversupply situation and to encourage the consumption of these products 
among persons in low-income groups, largely through The Emergency Food 
Assistance Program (TEFAP).
    The Section 32 approval process is as follows:

  1.  Industry representatives request a purchase under Section 32 
            authority or AMS economists identify possible oversupply 
            situations and initiate contact with industry 
            representatives.

  2.  AMS economists conduct an economic analysis of the specific 
            commodity's market to independently verify the existence of 
            a market problem. AMS' assessment is also verified by 
            USDA's Office of the Chief Economist.

  3.  If the economic determination justifies a need (i.e., a surplus 
            of product), AMS works with the Food and Nutrition Service 
            (FNS) to determine pack sizes and timeframes in which 
            product can realistically be distributed.

  4.  AMS submits a request package through the clearance process for 
            final approval by the Secretary.

  5.  If approved, AMS announces the program and works with FNS to 
            implement.

    During the Section 32 request approval process, AMS works closely 
with industry, FNS, and the Agency's technical experts to design a 
purchase program which will accomplish the goals of the program to 
remove product from the market in a timely manner and to feed hungry 
Americans.

    Question 1a. Average timeline from when the bonus buy request is 
submitted to when the commodities are purchased? In the event where 
this timeline is over 6 months, please provide justification for such a 
delay.
    Answer. There are many factors that affect the timeline from when 
the bonus buy request is submitted to when the commodities are 
purchased. First, data must be available to conduct the economic 
analysis, and there are situations where obtaining this data from 
industry has taken some time. Second, if the product requested is a new 
product, specifications must be developed that meet the industry need 
and ensure competition among producers, as well as provide a product 
that TEFAP recipients can effectively distribute and utilize. Finally, 
the approval process can be made complicated when two or more industry 
representatives make requests that are inconsistent, and AMS must 
reconcile the differences before the approval process can begin. Delays 
in Section 32 purchase decisions can occur for a variety of reasons, 
however, AMS generally strives to process a Section 32 request from 
receipt of the request to announcement of a purchase within a 1 to 2 
month period. We are not aware of a timeline that exceeded 6 months.

    Question 1b. Steps the Agency is taking to ensure over-supply 
challenges in specialty crop markets are being addressed in a timely 
fashion.
    Answer. AMS economists maintain good working relationships with 
many suppliers and industry groups for the purpose of understanding and 
monitoring market conditions throughout the year. These relationships 
have resulted in a more proactive process by which the economists 
identify possible oversupply situations and initiate contact with 
industry representatives. Additionally, AMS consistently communicates 
to industry representatives the critical need to connect early and 
often if an oversupply situation is anticipated, so the process can 
begin in a timely fashion to meet their needs.

    Question 1c. How decision-making authority is granted between AMS 
and FNS on when and where to purchase specialty crops through the 
Section 32 Bonus Buy Program.
    Answer. AMS has the authority to initiate and execute a Section 32 
bonus purchase upon approval from the Secretary. AMS works closely with 
FNS to determine the pack sizes and timeframes in which product can 
realistically be distributed to TEFAP recipients. Once approved, FNS 
collects orders from TEFAP state agencies, and AMS conducts all 
procurement activity.

    Question 1d. How the Department factors in demand for bonus buy 
purchases and what weight is given to demand factors versus farmer/
grower support.
    Answer. Farmer/grower support is a critical factor in the Section 
32 purchase program. However, TEFAP recipients must be able to 
distribute and utilize the product effectively, and decisions regarding 
pack sizes (smaller pack sizes preferred) and delivery timeframes are 
based on demand from those TEFAP recipients.

    Question 2. As domestic specialty crop producers are growing 
increasingly vulnerable to cheaper foreign imports, what is the 
Department doing to harness the resources of the Federal Government to 
support them? How is AMS working both with other agencies and Mission 
Areas within USDA and outside the Department, such as through USTR, to 
ensure specialty crop producers have the full support of the Federal 
Government to reverse this trend? What gaps do you see in existing 
Federal programs that should be addressed in the upcoming farm bill 
that would better utilize existing resources?
    Answer. One of the ways that USDA is supporting domestic specialty 
crop producers is the Local Agriculture Marketing Program (LAMP), which 
is authorized under the Agricultural Improvement Act of 2018 (Farm 
Bill) (Pub. L. No. 115-334). The Agricultural Marketing Service (AMS) 
administers three of the four programs authorized under LAMP: The 
Farmers Market and Local Food Promotion Programs (FMLFPP) and the 
Regional Food System Partnerships (RFSP) program. In 2021, USDA 
invested $90.2 million through 203 grant projects to help local and 
regional food entities strengthen and explore new market opportunities 
for U.S. food and agricultural products, including but not limited to 
specialty crops. The Rural--Business Cooperative Service, under Rural 
Development, implements Value-Added Producer Grants, which helps 
agricultural producers enter value-added activities to generate new 
products, create and expand marketing opportunities, and increase 
producer income.
    AMS also administers the Specialty Crop Block Grant Program (SCBGP) 
to enhance the competitiveness of specialty crops. The below links 
provide additional information on the Fiscal Year 2021 SCBGP awards: *
---------------------------------------------------------------------------
    * Editor's note: the linked documents are retained in Committee 
file.

          Specialty Crop Block Grant Program Fiscal Year 2021 
        Description of Funded Projects--Farm Bill (usda.gov) \1\
---------------------------------------------------------------------------
    \1\ https://www.ams.usda.gov/sites/default/files/media/
SCBGPDescriptionofFunds2021.pdf.
---------------------------------------------------------------------------
          Specialty Crop Block Grant Program FY21 Grants to the States 
        (usda.gov) \2\
---------------------------------------------------------------------------
    \2\ https://www.ams.usda.gov/sites/default/files/media/
2021_SCBGP_GrantstotheStates.pdf.

    The Fiscal Year 2022 Request for SCBGP applications closed on May 
3, 2022. AMS expects to announce awards by the end of September 2022.
    In addition, AMS announced the approval of nearly 20 specialty crop 
Section 32 requests, including for fresh grapes, fresh and frozen 
peaches, fresh nectarines, fresh plums, raisins, dried sweet cherries, 
almonds, and great northern beans for Fiscal Year 2022. From Fiscal 
Year 2018 to Fiscal Year 2021, AMS supported domestic specialty crop 
producers through purchases of over 6.4 billion pounds of specialty 
crops valued at $5.9 billion. All AMS purchases for domestic and 
international nutrition assistance and food aid programs must be 100% 
grown and processed within the United States or its territories.
    AMS works closely with the Food and Nutrition Service (FNS) on all 
of these purchases. For example, AMS partnered with FNS to introduce a 
mixed fresh produce product for food banks in The Emergency Food 
Assistance Program in Fiscal Year 2021, purchasing nearly 20.0 million 
pounds of various fresh specialty crops valued at $13.0 million.
    USDA stands ready to work with the Committee on identifying the 
best utilization of resources for the specialty crop sector as you 
deliberate the 2023 Farm Bill.
Response from Terry Cosby, Chief, Natural Resources Conservation 
        Service, U.S. Department of Agriculture
Questions Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question 1. Chief Cosby, could you provide me a detailed 
orientation on the phenomenon of urban agriculture in our country, 
including what the USDA is doing to optimize urban agriculture?
    Answer. First, I will start by sharing that this is not a recent 
phenomenon. In fact, the first organized urban agriculture effort 
supported by the United States Government occurred during the Panic of 
1893, a serious economic depression that caused high unemployment and 
distress on farms. As a relief measure the Mayor of Detroit, Hazen 
Pingree, formed an Agricultural Committee and tasked them with finding 
vacant lots for citizens in need of food assistance to grow their own 
food. In 1894, 975 families grew potatoes, beans, squash, cucumbers and 
more on 430 acres of 'Pingree's Potato Patches'. The produce they grew 
that year was valued at $14,000 which is equal to $438,225 today. By 
the 1900s, economic conditions in the country improved and the program 
tapered off.
    Throughout the following years Americans have turned to urban 
agriculture during times of war and economic stress to feed themselves 
and their communities. In recent years, urban agriculture has been 
revived by communities facing food related illness and food insecurity. 
Today urban agriculture is influenced by many considerations, including 
sustainability, environmental stewardship, food security and 
accessibility, community empowerment, and cultural diversity. The 
current urban agriculture movement is still using vacant lots for food 
production, but it has also expanded to hydroponics, aquaponics, 
container gardening, rooftops, and commercial food production.
    No two urban production systems are the same, but urban agriculture 
operations are often characterized by intensive management strategies 
(many different fruits and vegetables produced each season), less 
automation with more labor performed by hand, and controlled 
environments (e.g., high tunnels, low tunnels, hydroponics, shipping 
containers, nurseries, container gardens, etc.), highly diversified 
cropping rotations, and small footprints (.05-.25 acres).
    Many urban production systems are also social enterprises. They 
support the triple bottom line: people, profit, and the planet--they 
are striving to produce food to feed their communities. Food 
sovereignty and food justice are frequently at the heart of these 
operations.
    Over the years, NRCS has taken steps to improve conservationist's 
ability to serve urban and small acreage clients. NRCS had its first 
urban conservation district in Washington, D.C. in 1962. Other efforts 
were also made through programs like Resource Conservation and 
Development (RC&D) and urban conservation action plans in the 1990s and 
early 2000s. In 2010 the agency adopted high tunnels as a conservation 
practice standard to address issues with excessive wind and sun and 
provide season extension options.
    The Conservation Stewardship Program offers a $1,500 annual minimum 
payment, facilitating small and urban producers' participation in 
programs.
    USDA is working to support urban agriculture through the Office of 
Urban Agriculture and Innovative Production (OUAIP). OUAIP's 
Interagency Advisory Committee (IAC) has over 60 members representing 
15 USDA agencies and meets approximately bimonthly to collaborate and 
coordinate the urban agriculture work across USDA agencies. OUAIP also 
recently stood up a Federal Advisory Committee to give the Director of 
OUAIP and Secretary Vilsack advice on better serving urban producers.
    To demonstrate USDA's commitment to serving urban producers, NRCS 
and the Farm Service Agency (FSA) are working together on plans to open 
new brick and mortar urban service centers in several locations 
selected for pilot Urban County Committees (UCOCs). FSA and NRCS have 
been working with local stakeholders and local USDA staff to identify 
locations for service centers within each city that will be accessible 
and welcoming to local urban and innovative producers. These urban 
service centers will offer local urban producers a suite of USDA 
programs and services available to urban agricultural and areas (i.e., 
programs where eligibility is not restricted to rural areas) and will 
be tied into various relevant USDA regional efforts with overarching 
goal of created strong local food systems.
    OUAIP is working across USDA to produce an updated and improved 
version of the Urban Agriculture Toolkit. The new Toolkit will be 
comprised of several quick-reference guides, an at-a-glance publication 
highlighting key resources, and website enhancements to both 
Farmers.gov and USDA.gov. OUAIP also developing training materials to 
educate and prepare USDA staff to serve new types of customers in urban 
areas. OUAIP has also been working on developing outreach materials to 
explain to new urban customers how to access USDA services.
    USDA also has several funding opportunities available to support 
urban producers and projects. OUAIP offers an Urban Agriculture and 
Innovative Production (UAIP) competitive grants program to support 
projects that promote community gardens and nonprofit farms, provide 
job training and education, and develop business plans and zoning for 
urban agriculture, with priority given to communities lacking access to 
fresh and healthy food. Since OUAIP started, this program has funded 31 
awards totaling just over $7.9 million. Additionally, OUAIP's 
Composting and Food Waste Reduction cooperative agreement pilot program 
funds local government projects to develop and test strategies to 
increase compost and reduce food waste. Since the Office started, this 
program has funded 37 awards totaling just over $3 million. This 
spring, OUAIP will announce the opening of these two funding 
opportunities (competitive grants and cooperative agreements) for FY 
2022. The National Institute of Food and Agriculture (NIFA) is 
preparing to open a $10 million Urban, Indoor and Emerging Agriculture 
competitive grant program.
    Organizations working on urban agriculture are also eligible to 
apply for NRCS Equity Conservation Cooperative Agreements and there is 
a priority set aside for urban producers in the Conservation Innovation 
Grant (CIG) program. The Office of Community Food Systems (OCFS) 
awarded four grants to urban agriculture projects worth over $300,000 
through its Farm to School Program. These grants served seven public 
schools and over 50,000 students. Funds also supported other activities 
such as weekly experiential learning opportunity, multiple community 
urban farms, and community partners (Los Angeles Leadership Academy; 
Kid's Food Basket Grand Rapids, Michigan; Common Threads, Chicago, 
Illinois; and Urban Ventures, Minneapolis, MN).

    Question 2. Under Secretary Moffitt and Chief Cosby, can you 
discuss the current nexus between horticulture and urban agriculture?
    Answer. Horticulture is at the heart of urban agriculture. The 
major difference between agriculture and horticulture is that 
agriculture is inclusive of plant cultivation and animal husbandry 
while horticulture only includes plant cultivation. As animal husbandry 
may be incompatible with urban zoning, many urban farms focus more on 
plant cultivation.
    As part of a Food System Transformation effort, USDA is working to 
build stronger and more resilient local food systems, and that includes 
supporting the breadth of agricultural practices used across the 
county, including horticulture.
    Urban farms and community gardens, which are supported by OUAIP's 
USDA-wide People's Garden Initiative (PGI), play an important role in 
transforming our food system by addressing food and nutrition access 
and creating more robust local food systems. Many low-income urban 
areas lack grocery stores and access to nutritious food, such as fresh 
fruits and vegetables. Research shows that people who have access to 
fruits and vegetables eat more of them, and that children who garden 
are more likely to eat fruits and vegetables and have greater knowledge 
about nutrition and healthy eating habits. Eating a diet high in fruits 
and vegetables is associated with a decreased risk of many chronic 
diseases, including heart disease, stroke, high blood pressure, 
diabetes, and obesity. USDA's MyPlate recommends that everyone fill 
half their plate with fruits and vegetables.
    OUAIP has also supported horticulture by providing funding for the 
Forest Service to complete work on three Urban Agroforestry Outreach 
Projects which included tree and ornamental shrub planting.
Response from Bruce Kettler, Director, Indiana State Department of 
        Agriculture; Second Vice President, National Association of 
        State 
        Departments of Agriculture
Question Submitted by Hon. James R. Baird, a Representative in Congress 
        from Indiana
    Question. Director Kettler--In your opening statement, you 
mentioned a philosophy you called ``Cooperative Federalism'' in 
conjunction with your written testimony, I can think of several of 
these policy areas, where cooperation between government agencies or 
state, local, and Federal Governments is likely lacking and compounding 
issues. Could you speak further about your thoughts on Cooperative 
Federalism and its impact on Hoosier farmers and Indiana agriculture?
    Answer. June 14, 2022

    Congressman James R. Baird,

    As mentioned in my testimony, cooperative federalism is the idea 
that each level of government partners in the policy-making process. As 
the tenth-largest farming state in the nation, the Indiana State 
Department of Agriculture (ISDA) partners with many groups at all 
levels of government. These partnerships are integral to delivering 
good government service to Hoosier farmers and taking Indiana 
agriculture to the Next Level.
    For example, in 2018 ISDA collaborated with the Indiana Department 
of Health (IDOH) and Purdue Extension to create Safe Produce Indiana, a 
unique partnership designed to bring enforcement, education and 
outreach on the Produce Safety Rule of the Food Safety Modernization 
Act (FSMA) at the state level. By working together, ISDA, IDOH and 
Purdue Extension leverage strengths to ``educate before and while we 
regulate''. We provide training opportunities and outreach on the 
requirements of FSMA and through the National Association of State 
Departments of Agriculture's (NASDA) programming, we offer On Farm 
Readiness Reviews (OFFRs) which serve as a mock inspection for growers 
who are preparing for their first inspection. Without this cooperative 
approach, I firmly believe that Hoosier produce growers would be at a 
severe disadvantage.
    Additionally, ISDA's Division of Soil Conservation (ISDA-DSC) is a 
prime example of cooperating across local, state, and Federal agencies, 
as well as private and nonprofit organizations to extend resources to 
Hoosier landowners and farm operators. Many of ISDA-DSC's staff work in 
USDA Service centers or local soil and water conservation offices. This 
approach gives Indiana Conservation Partners the ability to extend 
equipment, data, software, personnel, funding, and programs to private 
lands conservation efforts. Indiana is a leader in the nation when it 
comes to working lands conservation and therefore is a competitive 
space for new programs and funding opportunities.
    I can attest, both in my professional experience in the private-
sector and now in my role in the public-sector, that cooperative 
federalism ensures that government works for the people. States have a 
valuable role to play in the policy making process and by working 
together with the Federal Government, we can ensure effective, 
efficient and quality programs and service.


Bruce Kettler,
Director,
Indiana State Department of Agriculture.


 
                     A 2022 REVIEW OF THE FARM BILL

       (ENERGY--RENEWABLE ENERGY OPPORTUNITIES IN RURAL AMERICA)

                              ----------                              


                         TUESDAY, APRIL 5, 2022

                  House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: David Scott of Georgia, Costa, Adams, 
Spanberger, Hayes, Delgado, Brown, Rush, Sablan, Kuster, 
Bustos, Plaskett, O'Halleran, Carbajal, Lawson, Craig, Axne, 
Schrier, Panetta, Thompson, Austin Scott of Georgia, Crawford, 
LaMalfa, Davis, Allen, Rouzer, Bacon, Johnson, Baird, Jacobs, 
Balderson, Cloud, Mann, Feenstra, Miller, Moore, Cammack, 
Fischbach, and Letlow.
    Staff present: Lyron Blum-Evitts, Emily German, Chu-Yuan 
Hwang, Ashley Smith, Paul Balzano, Patricia Straughn, Erin 
Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. The Committee will come to order. Welcome, I 
want to thank everyone for joining us today at this important 
hearing entitled, A 2022 Review of the Farm Bill: Energy--
Renewable Energy Opportunities in Rural America. So after brief 
opening remarks, Members will receive testimony from our 
witnesses today, and then the hearing will be open for 
questions.
    And I want to say right off the top, such a welcome to my 
dear friend, the Under Secretary for Rural Development, the 
Honorable Xochitl Torres Small. Welcome, a great friend and a 
great Member, and you are doing a great, great job.
    After brief opening remarks, Members will receive testimony 
from our witnesses, and then we will be open for questions. So 
let me begin with my opening statement.
    I want to say again how important this hearing is and all 
of the ones that we have had as we review our present 2018 Farm 
Bill and as we prepare for the 2023 Farm Bill. We have these 
hearings so we on this Committee can hear from our participants 
so we can find out what is working and what is not working as 
we prepare our 2023 Farm Bill.
    And today's hearing will cover the various farm bill 
provisions that cover energy production and energy efficiency, 
and I am looking forward to the discussion on how renewable 
energy production can provide new revenue streams for our 
agriculture producers and our rural economies and also how 
energy efficiencies can help lower input costs, which is so 
important.
    And I want to start by highlighting a troubling trend to me 
and some of the Members on our Committee that I want to mention 
to you. Following the creation of the Energy Title in the 2002 
Farm Bill, each farm bill after that has cut mandatory spending 
available for the title. Only 20 percent of the funding for 
Energy Title programs were mandatory in our most recent farm 
bill.
    And let me just be clear maybe for some of the folks at 
home that may not know the difference here, mandatory money in 
the farm bill is money you can count on, money that is 
guaranteed to go into the program. And discretionary money is 
what it says. It is discretionary. You may get it and you may 
not. And so that is very important. And this is a significant 
problem since many of our Energy Title programs ultimately have 
not received any discretionary appropriations.
    And I want to be clear. For the upcoming 2023 Farm Bill we 
need to consider what the needs are for our agriculture and 
forestry sectors, as well as our rural small businesses in 
terms of their potential role in producing renewable energy.
    We also know that there is a tremendous interest from rural 
areas in undertaking energy efficiency efforts to help their 
bottom lines. And that is what we want to do. Our farmers like 
these programs, and they deserve greater certainty. Time and 
again, we have heard the positive developments that have come 
from work on renewable energy production and how much value is 
added to rural communities from these advancements.
    We also need to review the needs for upgrading and 
investing in long outdated infrastructure in our rural 
communities. Our rural communities need our help, and we are 
determined to get the help that is needed for our rural 
communities. That would be resulting in lower energy costs and 
improvements to resiliency, security, and efficiency of our 
rural electric co-ops and their systems in the face of new 
cybersecurity threats and these terrible, awesome, dramatic 
weather events.
    I am looking forward to hearing from our panel of 
distinguished witnesses today about all these opportunities and 
more, so fasten your seatbelts. We are in for a great hearing.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning, and welcome to another important hearing in our work 
to review the 2018 Farm Bill and prepare for the 2023 Farm Bill.
    Today's hearing will cover the various farm bill provisions that 
cover energy production, and I'm looking forward to looking deeply into 
how renewable energy production can provide new revenue streams for 
agricultural producers and the economies of their communities.
    I want to start by highlighting a troubling trend--following the 
creation of the Energy Title in the 2002 Farm Bill, each farm bill 
after that has cut mandatory spending available for the title. Only 20 
percent of the funding for Energy Title programs was mandatory in our 
most recent farm bill.
    Let me clarify for the folks at home that mandatory money in the 
farm bill is money you can count on, money that is guaranteed to go 
into a program, but discretionary money needs to be included in an 
appropriations bill.
    This is a significant problem since many energy title programs 
ultimately have not received any discretionary appropriations. I want 
to be clear: for the upcoming 2023 Farm Bill, we need to consider what 
the needs are for our ag and forestry sectors as well as our rural 
small businesses in terms of their potential role in producing 
renewable energy. We also know that there is a tremendous interest from 
rural areas in undertaking energy efficiency efforts to help their 
bottom lines.
    Our farmers like these programs, and they deserve more certainty. 
We have heard time and again the positive developments that have come 
from work on renewable energy production and how much value is added to 
rural communities from these advancements.
    We also need to review the needs for upgrading and investing in 
long outdated infrastructure in rural America, resulting in lower 
energy costs and improvements to the resiliency, security, and 
efficiency of our rural electric co-ops and their systems in the face 
of new cybersecurity threats or dramatic weather events.
    I'm looking forward to hearing from our panel of distinguished 
witnesses today, about all these opportunities and more. I now 
recognize the Ranking Member for any opening remarks he may have.

    The Chairman. And with that, Ranking Member, I turn it over 
to you.

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

    Mr. Thompson. Well, thank you, Mr. Chairman. And I am going 
to echo you in you welcoming our witnesses to today's hearing. 
I look forward to hearing your thoughts and your perspectives 
as we look at the Energy Title. This was a title that I was 
proud to serve on the subcommittee that had the responsibility 
for that when I first came on this Committee. This is a title 
that really never had a baseline but had incredible importance.
    I am always excited to talk about energy. Pennsylvania's 
15th Congressional District is really the original energy 
district, and I know I don't see any of my friends from Texas 
in here, so they will take exception to that later, but it 
really is. We are steeped in a diverse history of energy 
production. Pennsylvania 15's coal fueled the Industrial 
Revolution for democracy to be able to win World War I and 
World War II. We are home to the nation's first-ever commercial 
oil well, the Commonwealth's only ethanol plant, and the oldest 
continually operating oil refinery in the United States.
    More recently, America has become the world's largest 
producer and exporter of natural gas while at the same time 
reducing U.S. emissions. The Appalachian Basin alone, which 
includes the Marcellus and Utica Shale, represents the third-
largest producing region in the world behind Russia and the 
rest of the United States, and we are incredibly proud of our 
role in powering not only the Commonwealth's economy but also 
the nation, our allies abroad, and the globe.
    And I want to start this hearing with a proposition that I 
think should underpin our discussion today: access to 
affordable energy is access to freedom, both political and 
economic. One need look no further than the nations of Europe 
who are shackled to Russian energy and Putin's pipelines. 
Without sufficient energy resources of their own, they have 
lost the freedom to dictate their own foreign policy. Despite 
our common democratic values, they are forced to pour money 
into Russia to protect their citizens from the devastating 
costs of losing access to affordable, reliable energy. This is 
what an all-of-the-above energy plan is about. It is about 
making sure everyone in America who needs energy has access to 
reliable energy when they need it.
    Rural communities are no different. Rural electrification 
in the 1930s, 1940s brought new jobs, new technology, and new 
opportunities to millions of people. And today, as we continue 
to build and improve our nation's electric grid, expand access 
to energy, and deploy smart, renewable resources on farms and 
in communities, the USDA energy programs continue to bring new 
opportunities and economic growth to rural America.
    But the expansion of new sources of renewable energy--
ethanol, solar, wind, biogas, and more--cannot be done at the 
cost of every traditional source of power. We simply do not 
have the capacity to replace the energy from fossil fuels 
overnight. When expanding our production of renewable energy, 
we must ensure sufficient energy resources exist and remain to 
power the baseload needs of our nation and our economy.
    But we don't need to look to Europe to see the damage 
insufficient energy resources can cause. We have seen it 
firsthand right here in our own country. At best, limited 
access to energy resources means increased energy prices, 
increased prices for those with too little to sacrifice their 
other needs so they can devote an ever-larger share of their 
income to procuring the electricity and the fuel that powers 
modern life. At worst, limited access to energy resources means 
arbitrary and indiscriminate energy rationing like the gas 
lines of the 1970s or the rolling blackouts of a California 
summer.
    These are arbitrary, manmade crises and the predictable 
outcome of policies grounded in wishful thinking and naivete. 
These are experiences we should carefully consider before we 
commit the United States to a policy of slow energy 
asphyxiation. Our farmers need access to diesel fuel, propane, 
fertilizer. These are all products of American-produced energy. 
Failure to provide sufficient, accessible, affordable, and 
reliable energy for the needs of our citizens will rob them of 
opportunities and options and the freedom to choose among them.
    Fortunately, that doesn't need to be our fate. We can 
promote renewable energy in smart and sensible ways so economic 
growth and emission reductions complement one another. In 
particular, many of the projects funded through USDA's energy 
programs, including the Electric Loan Program, REAP, RESP are 
all tools to help communities and businesses diversify and 
expand their energy options, promote energy efficiency, and 
strengthen our energy resiliency. And I look forward to 
learning about the growing opportunities for renewable energy 
in rural America and how expanding our nation's energy 
portfolio can bring dividends to us all.
    And with that, thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you, Ranking Member.
    The chair will request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony and to ensure that we have enough time for all of our 
questions.
    Our first witness is our former colleague here in Congress 
and our former Member of our Committee, who made such great 
contributions in her service on the Agriculture Committee, the 
Honorable Xochitl Torres Small, the Under Secretary for Rural 
Development at the United States Department of Agriculture. 
Under Secretary Torres Small, we are so happy to see you. And, 
as I said at the outset, your service on the Committee was just 
tremendous and, as I also said to you, I am hopeful that 
perhaps one day you might decide to come back and join us 
again. I really appreciate you.
    She is accompanied today by the Administrator of USDA's 
Rural Business--Cooperative Service, Dr. Karama Neal, and the 
acting Administrator of the USDA's Rural Utilities Service, Mr. 
Chris McLean. Welcome to the both of you as well.
    So now, Under Secretary Torres Small, we want you to begin 
when you are ready.

         STATEMENT OF HON. XOCHITL TORRES SMALL, UNDER 
      SECRETARY FOR RURAL DEVELOPMENT, U.S. DEPARTMENT OF 
  AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY KARAMA NEAL, 
  Ph.D., ADMINISTRATOR, RURAL BUSINESS--COOPERATIVE SERVICE, 
 USDA; CHRIS McLEAN, LL.M., J.D., ACTING ADMINISTRATOR, RURAL 
                    UTILITIES SERVICE, USDA

    Ms. Torres Small. Chairman Scott, Ranking Member Thompson, 
and Members of the Committee, thank you for the opportunity to 
discuss the state of energy and the bioeconomy in rural America 
and the United States Department of Agriculture Rural 
Development's role in supporting both.
    As we discuss this topic, it is essential to recognize that 
we are talking about people and communities in transition. It 
is not lost on me that I am speaking to you today as a New 
Mexican whose public education was funded by the energy 
production that continues to fuel our state. I am honored to 
know parents who put their kids through college from the money 
they earned working in the Permian Basin and continue to be 
inspired by the hard work and innovation that occurs across New 
Mexico's energy sector.
    In this room today we can talk about transition, but across 
rural America, people are living it. And in many places they 
are driving it. A young person working in energy today could be 
working in solar or wind while their grandparents were experts 
in fossil fuels because this transition has been happening for 
at least a decade.
    Like all transitions, this one has bumps. There is 
disagreement, and there is pain. There is also consensus and 
innovation and increased efficiency and job creation. And I 
want to talk about all of these things. In particular, I hope 
to highlight what rural co-ops are doing in this space. But 
before we dive into that, I hope we can begin with an 
agreement, that the hard work and ingenuity that came out of 
rural America before renewables should be honored and valued. 
It powered this country for over a century, contributed 
significantly to American prosperity as a whole, and continues 
to be an important part of America's energy portfolio today. I 
am grateful for that contribution, and I know all of you are as 
well.
    At Rural Development, our goals for energy are 
straightforward: reliable, affordable, and clean. When 
communities lean into clean energy, as so many are already 
doing and have been doing for years, the resulting economic 
prosperity is clear. It is powerful. Jobs are created. 
Consumers save on their energy bills, and new markets are 
formed. I am emphasizing rural electric co-ops today not only 
because they are a great partner but because I think they are 
ahead of most of us in the way they think about clean energy.
    For example, we recently awarded a $6 million loan to 
Roanoke Electric Cooperative in North Carolina. Roanoke is 
going to use this loan to help their members pay for energy 
efficiency improvements from insulation to electric water 
heaters, as well as electric charging systems. This builds on 
the work of a program that the co-op started as a pilot in 
2015.
    So far, about 650 co-op members have received retrofits and 
are enjoying an annual savings of $600 per year. In other 
words, co-ops got this energy efficiency ball rolling 7 years 
ago, and now USDA is helping to keep it moving and helping 
these co-op members to continue and increase their savings. We 
are also hoping to help pass these lessons on to other 
communities.
    Now, that example was in the millions of dollars, but 
innovation and energy use is often best showcased by its 
smallest projects. I am thinking of 3 Porch Farm in Comer, 
Georgia, a sustainably grown flower and fruit farm owned by 
Steve and Mandy O'Shea. Steve and Mandy's business is known for 
its presence at farmers' markets in Atlanta, Marietta, and 
Athens. They are also known for their flower arrangements in 
weddings and other events. They keep their flower arrangements 
cool in a solar-powered design studio, and the farm runs its 
vehicles on recycled vegetable oil. These energy choices are a 
key part of Steve and Mandy's vision and philosophy for their 
business. When I think about Steve and Mandy, I am again 
grateful for the innovation, hard work, and leadership of the 
people in rural communities when it comes to energy.
    I look forward to working with all of you to incentivize 
more innovation and support the rural people who power our 
country, who create good jobs in their communities, and who 
increase the security and resiliency of our energy economy.
    Thank you, and I look forward to your questions.
    [The prepared statement of Ms. Torres Small follows:]

 Prepared Statement of Hon. Xochitl Torres Small, Under Secretary for 
  Rural Development, U.S. Department of Agriculture, Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the opportunity to come before you today to 
discuss the state of energy and the bioeconomy in rural America, and 
the United States Department of Agriculture Rural Development's role in 
supporting both. Energy production has long been a backbone of rural 
jobs, economies, and livelihoods. It is deeply rooted in the social and 
fiscal fabrics of rural communities and has contributed significantly 
to American prosperity as a whole.
    But, as the future of our human health and economic output 
increasingly require a robust response to climate change, market 
demands are shifting from fossil fuels to cleaner sources of energy. 
The burning of fossil fuels is the primary cause of climate change,\1\ 
and consumers are looking for cleaner options to power their 
businesses, homes, and schools--with forty percent of consumers 
preferring renewable energy in 2019 compared to twenty-five percent in 
2018.\2\ By 2026, global renewable energy capacity is set to rise more 
than sixty percent above 2020 levels, accounting for nearly ninety-five 
percent of total global power capacity increases.\3\
---------------------------------------------------------------------------
    \1\ https://ugc.berkeley.edu/background-content/burning-of-fossil-
fuels/.
    \2\ https://www.businesswire.com/news/home/20190422005350/en/
Consumer-Demand-for-Clean-Energy-Significantly-Increases.
    \3\ https://www.iea.org/news/renewable-electricity-growth-is-
accelerating-faster-than-ever-worldwide-supporting-the-emergence-of-
the-new-global-energy-economy.
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    Rural communities are pivoting energy production models to respond 
to these market shifts, but not without challenges. Fossil fuel assets 
are deep, and continued financing and operation of historic investments 
by energy producers contribute toward general community reluctance to 
shift to new sources of energy. I believe this shift is not only 
possible but will be catalyzed by ensuring that rural America is at the 
table. Rural communities are resilient and incredibly innovative. Their 
expertise, skillsets, and decades of experience in energy industries 
will be invaluable in the transition to clean energy.
    Rural Development is poised to be a dependable partner in this 
transition. Rural Development does not regulate U.S. energy entities 
but rather can provide incentives and expertise by way of deep ties in 
rural communities, and long, trusted relationships with rural electric 
cooperatives and producers. The transition to clean energy can be 
beneficial for utilities, customers, producers and rural communities 
alike. It can contribute to energy grid security, the fight against 
climate change and extreme weather in rural areas and provide savings 
for customers and producers. I look forward to working with Congress to 
support clean energy and the bioeconomy in rural America.
Energy Security
    Consumers across the United States depend on uninterrupted and 
affordable availability of energy sources every day. This means energy 
systems that are secure against cyberattacks, resilient enough to 
withstand extreme weather, and insulated against global conflict. Yet, 
just as we have seen across the global supply chain, the United States' 
energy system is rigid, fragile, and susceptible to disruption that has 
an immediate and sharp impact on families' budgets.
    Putin's war on Ukraine is removing millions of barrels of oil from 
the global supply, one of many factors driving the highest price that 
consumers have ever paid at the pump.\4\ Economists expect retail fuels 
prices to rise to $4.50 per gallon by April \5\--underscoring that the 
energy supply chain is consolidated, inflexible, and highly susceptible 
to shocks that have a direct impact on consumers.
---------------------------------------------------------------------------
    \4\ https://www.eia.gov/dnav/pet/hist/
LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&
f=m.
    \5\ https://www.nytimes.com/2022/03/10/business/russia-ukraine-war-
gas-prices.html.
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    Cyber security risks are on the rise in the energy sector, with bad 
actors increasingly targeting U.S. energy assets. In 2021, a Russian 
ransomware attack on the Colonial Pipeline caused the company to shut 
down the pipeline for the first time in history. The shutdown of the 
pipeline, which provides forty-five percent of fuel across the East 
Coast, had immediate, far-reaching impacts. In Washington, D.C., 
eighty-seven percent of gas stations went dry.\6\
---------------------------------------------------------------------------
    \6\ https://www.atlanticcouncil.org/blogs/energysource/
cyberattacks-on-our-energy-infrastructure/.
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    Millions of Americans feel the effects of climate change each year 
when their power goes out, like in Texas, when uncharacteristically 
severe winter storms swept the state in early 2021. Almost seventy 
percent of customers served by the Texas state power grid experienced 
an outage.\7\ Those who lost power were without electricity for an 
average of forty-two hours in subzero temperatures. As these power 
outages demonstrated, our aging electric grid needs urgent 
modernization, including more smart grid technology and more 
transmission lines.
---------------------------------------------------------------------------
    \7\ https://www.texastribune.org/2021/03/29/texas-power-outage-
ERCOT/.
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    Rural Development is taking steps to address energy security 
internally but is also working to partner across the energy sector to 
address resiliency broadly. USDA and the Department of Energy (DOE) 
have a memorandum of understanding between the two Departments as 
required by the 2018 Farm Bill, which has spurred enhanced coordination 
and cooperation on energy and electric issues. USDA and DOE have 
engaged in productive consultations on cybersecurity and continue to 
work to leverage each's funding to support grid reliability. It should 
also be noted that many rural communities rely on energy services 
purchased by their rural municipal or cooperatively owned utility 
through agreements with the Power Marketing Administrations. This cost-
based clean energy, largely generated at Federally owned hydropower 
facilities, is an important contributor to rural energy security and 
stability, both economically and operationally.
    As part of the Biden-Harris Administration's work to prevent 
electric system failures from weather events like last winter's power 
outages throughout Texas and to protect the grid from ransomware and 
other cyber-threats, USDA created a new division to help increase the 
security of the nation's electric grid. The Grid Security Division, in 
Rural Development's Electric Program, aims to increase Federal 
collaboration to protect the nation's electric grid from service 
disruptions and outside attacks and is keenly focused on electric grid 
security. It informs rural-serving electric utilities of USDA's ability 
to finance utility investments in cybersecurity, grid security, fire 
prevention, reliability and resilience. It also works closely with 
industry groups and other stakeholders on critical infrastructure 
security policy.
    Rural Development also finances investments that will help 
utilities manage loads to ensure system reliability and security 
through the Electric Loan Program. In Fiscal Year 2021, Rural 
Development financed $5.1 billion for ninety-two projects under the 
Electric Loan Program, including $102 million in Smart Grid projects. 
These projects range from building solar farms in rural areas to 
financing cooperatives as they lay fiber backbones and power lines. 
These projects will help improve quality of life and support good-
paying jobs, transition to a clean energy economy, and keep the United 
States poised to lead the global economy. Rural Development will 
continue to work to make rural electric infrastructure stronger, more 
sustainable, and more resilient than before.
New Markets & Climate Resilience
    Clean energy can also be a catalyst for economic development in 
rural America. Cleaner power options--like wind, solar, and biofuels--
provide new market opportunities for producers and small businesses, 
reducing energy costs for consumers and supporting skill-based jobs in 
rural communities.
    When rural communities lean into clean energy transition, the 
resulting economic prosperity is evident. Rural Development recently 
financed a $95 million guaranteed loan to Prairie State Solar in Perry 
County, Illinois. The loan supported a 600 acre solar photovoltaic farm 
to deliver and sell its electrical output to a service area that meets 
rural eligibility requirements. The output of the project is sold to 
Wabash Valley Power Association, an electric generation and 
transmission cooperative that provides wholesale power to twenty-three 
distribution cooperatives in Illinois, Indiana, and Missouri. The 
project created roughly 200 local construction jobs, powers 
approximately 15,000 rural households, and provides permanent 
employment for between three to five people. At the time, the project 
doubled the statewide solar capacity in Illinois and contributes 
millions in tax revenue for the state without requiring additional 
public infrastructure or services.\8\ This kind of opportunity 
stimulates real economic development--good paying jobs, lower costs for 
consumers, and revenue for other public services--all while harnessing 
rural innovation to tackle the climate crisis.
---------------------------------------------------------------------------
    \8\ https://www.kfvs12.com/story/37669426/perry-county-solar-
project-to-bring-jobs-boost-solar-capacity-in-il.
---------------------------------------------------------------------------
    The Biden-Harris Administration has been clear about its commitment 
to addressing climate change, and the Rural Utilities Service Electric 
Program has made great strides in reducing the carbon intensity of its 
loan portfolio. This has been accomplished by eliminating new coal-
fired generation projects and increasing investment in renewable energy 
projects providing clean, sustainable electricity to rural communities, 
particularly solar energy. From 2010 to 2020, the carbon intensity of 
this portfolio measured in pounds of carbon dioxide emitted per 
megawatt hour of electricity generation decreased by twenty-five 
percent. This represents a reduction of seventy-six million tons of 
carbon dioxide.
    Biofuels and BioPreferred' also present an opportunity 
for blenders, manufacturers, and businesses to participate in climate-
smart initiatives while creating new markets for producers and rural 
businesses. Under the CARES Act, Rural Development will make available 
up to $700 million in payments for eligible biofuel producers for 
unexpected market losses resulting from COVID-19. This funding will 
restore renewable fuel markets affected by the pandemic, maintain a 
significant biofuels marketplace, and help agricultural producers 
maintain and create more viable markets for products that supply 
biofuel production, such as corn or soybeans. Rural Development will 
also soon make $100 million available to increase the sale and use of 
higher blends of bioethanol and biodiesel by expanding the 
infrastructure for renewable fuels derived from U.S. agricultural 
products. Grants will be available for refueling and distribution 
facilities covering the cost of installing, retrofitting, or otherwise 
upgrading infrastructure required at a location to ensure the 
environmentally safe availability of fuel containing bioethanol blends 
of E15 and greater or fuel containing biodiesel blends of B20 and 
greater. Biofuels--which can be a carbon-neutral product--absorb carbon 
dioxide as inputs grow, offsetting emissions and creating a cleaner 
fuel option. In 2020 biofuels supported 62,000 direct jobs across the 
country, $35 billion in economic output and $19 billion in household 
income.\9\ Ethanol also displaced more than 500 million barrels of 
cruel oil in 2021, contributing to efforts to protect America's energy 
independence.\10\ Advanced biofuels have the potential to de-carbonize 
the hard to electrify modes of transportation such as aviation, marine 
and rail. USDA is a lead agency, along with Department of Energy and 
Department of Transportation, supporting the government wide Grand 
Challenge to produce 3 billion gallons/year of Sustainable Aviation 
Fuel reducing aviation GHG emissions by 20% by 2030. Additionally, 
Rural Development provides significant support for biobased products 
industry, which accounts for a value-added contribution to the U.S. 
[e]conomy of $470 billion and employs more than four million 
people.\11\ Biobased products are derived from plants and other 
renewable agricultural, marine, and forestry materials and provide an 
alternative to conventional petroleum-derived products while providing 
new markets to producers. The 2002 Farm Bill created the 
BioPreferred' Program, which identifies and seeks new 
markets for biobased products, spurs economic development, creates new 
jobs, increases the use of renewable agricultural resources through a 
voluntary labeling program and a Federal procurement preference. In 
2018 Farm Bill Congress deepened its commitment to biobased markets by 
requiring the Department of Agriculture and the Department of Commerce 
to jointly develop NAICS codes for renewable chemical and biobased 
product manufacturers. Rural Development is coordinating with Federal 
partners to implement this provision. Biobased products have the 
potential to reduce greenhouse gas emissions by an estimated twelve 
million metric tons of carbon dioxide equivalents per year.\12\
---------------------------------------------------------------------------
    \9\ https://ethanolrfa.org/ethanol-101/why-is-ethanol-important.
    \10\ https://ethanolrfa.org/ethanol-101/why-is-ethanol-important
    \11\ https://www.usda.gov/media/press-releases/2021/07/29/usda-
releases-economic-impact-analysis-us-biobased-products.
    \12\ https://www.usda.gov/media/press-releases/2021/07/29/usda-
releases-economic-impact-analysis-us-biobased-products.
---------------------------------------------------------------------------
    The biofuels and biobased products sectors are success stories--
demonstrating that efforts to combat climate change go hand in hand 
with strong economic development, particularly in rural communities.
Rural Energy Efficiency
    Rural Development also plays a role in increasing energy efficiency 
in rural communities--initiatives that reduce the carbon footprint of 
construction, processing, and production, as well as slashing costs for 
consumers. These costs are particularly important for low-income 
communities, where households often pay as much as thirty percent of 
their income on energy costs.\13\ In many cases, energy efficiency is 
not just a climate issue but an equity issue.
---------------------------------------------------------------------------
    \13\ https://www.aspeninstitute.org/blog-posts/rural-clean-energy-
innovation/.
---------------------------------------------------------------------------
    The Rural Energy Savings Program, a relending program, provides 
zero interest loans to utilities to relend to residential, commercial, 
and industrial consumers for energy efficiency investments. The Rural 
Energy for America Program--which also serves biofuels and clean energy 
production--gives producers and businesses a hands-on way to 
participate in climate-smart practices while also cutting energy costs. 
Among other uses, REAP can provide grant and loan funding directly to 
producers and businesses to make energy efficiency improvements. In 
some cases, applicants have used funding to purchase new, more energy-
efficient equipment on the farm--like the first new grain dryer 
purchased since 1980--which reduces overall energy usage and cuts input 
costs for producers. In other cases, applicants used funding to replace 
doors and windows in a facility to better insulate their business and 
reduce heating bills. Since January 2021, Rural Development invested 
$687 million in REAP projects like these, all which play a significant 
role in tackling the climate crisis. In that same period, Rural 
Development projects resulted in greenhouse gas emission savings of 1.4 
million metric tons of carbon dioxide annually for the life of these 
projects.
    These programs demonstrate strong successes in the fight against 
climate change while also helping cut energy costs and increase 
efficiency for producers and rural businesses. Yet, there is still work 
to do. Often, these programs are cumbersome and difficult to apply for, 
particularly for underserved communities who are grappling with 
structural barriers like lack of access to capital, technical 
assistance, or capacity to navigate Rural Development's resources.
    To more equitably serve customers and deliver programs, USDA 
recently announced and held the first meeting of an Equity Commission, 
which is charged with evaluating USDA programs and services and 
recommending how we can reduce hurdles to accessing them. Rural 
Development is also looking for creative ways to provide capital and 
technical assistance to communities that historically have not had 
resources like REAP. We know that investments in our boots-on-the-
ground staff help communities navigate not only Rural Development 
resources but those across the Federal family. Rural Development can 
provide resources to both help tackle the climate crisis and cut costs 
for families, businesses, and consumers--these benefits should be felt 
by all and underscore the importance of delivering programs equitably.
Conclusion
    These programs demonstrate remarkable success in the fight against 
climate change while also helping cut energy costs and increase 
efficiency for producers and rural businesses. Rural residents know 
what works for them, and they know what tools they need to adapt to 
changing circumstances and build a more resilient future.
    Rural Development is poised to meet and expand our commitment to 
energy and the bioeconomy in rural America. I look forward to working 
with this Committee to support this mission.

    The Chairman. Thank you, Under Secretary Torres Small, for 
your very, very nice testimony.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. Each of you will be recognized for 5 minutes each in 
order to allow us to get to all the questions, as many as 
possible. And again, please keep your microphones muted until 
you are recognized in order to minimize background noise. And I 
want to start off by recognizing myself for 5 minutes.
    Under Secretary Torres Small, in the submitted testimony of 
Mr. Cherrier, who we will also hear from on the next panel, 
recent backlogs in the RUS loan approval process were noted due 
to declines in staffing at RUS and effects of the COVID-19 
pandemic that led to a drop-off in volume of projects needing 
loan approval review. Can you discuss the status of those 
backlogs and any progress that has been made, and how has this 
backlog affected electric cooperatives' abilities to secure 
financing necessary for these local rural projects?
    Ms. Torres Small. Thank you, Mr. Chairman, for that 
question. And it is crucial that we identify really what our 
greatest resource at Rural Development is, and that is its 
people. And I have been working hard to make sure they have the 
support that they need to get the job done, and in the midst of 
COVID-19 there were a lot of challenges to make that happen, 
whether it was the coordination that has to happen during 
environmental reviews and reaching out to other areas during 
that time and other agencies, and as well as Native American 
sovereign governments, also, as we do some of the additional 
work when it comes to responding quickly to energy needs. To 
speak more about some of the work that has been done internally 
to make sure that we are targeting our staffing resources more 
specifically, I will defer to Administrator McLean.
    Mr. McLean. Well, thank you very much. At the Rural 
Utilities Service during the COVID period there were delays in 
part due to emergency procedures adopted in the environmental 
review process. But in June of last year I repealed those 
emergency procedures. We have also been dealing with a 
rebuilding of our staff. Amidst the pandemic and immediately 
before, we had a number of senior employees retire and other 
employees take other jobs, and the budgetary constrictions 
limited our hiring ability during that time. But we are in very 
strong rebuilding mode right now in terms of rebuilding our 
staff. We are hiring some excellent talent, particularly in the 
environmental review area, hiring new archaeologists to be able 
to fill in and lining up some surge capacity with contract 
support.
    All that being said, we also redeployed our staff in 
matters to be able to deal with projects that we had in the 
pipeline. And I am very pleased to report that, despite the 
challenges we faced over the last fiscal year with capacity 
constraints of staffing, the Electric Program turned in its 
third consecutive year of investments exceeding $5 billion. So 
it was a very, very strong year for the Electric Program. And 
as we move forward and as times return to more normal 
operations, hopefully with the pandemic in the rearview mirror, 
we look forward to being able to find further areas of 
streamlining and continuous process improvements to make the 
customer experience that much better.
    The Chairman. And now tell me about your ability to secure 
the necessary financial help that you need and also how we here 
in Congress can be helpful to you in securing this financial 
help?
    Ms. Torres Small. Chairman Scott, thank you so much for 
that question. And as you know, the President's budget was 
recently released where they identified opportunities for 
increased staffing investments. We certainly know that 
resources are limited but are grateful for your support for 
Rural Development and are eager to continue that dialogue.
    The Chairman. Thank you very much. And with that, I will 
now yield to you, Ranking Member, for your questions.
    Mr. Thompson. Well, thank you, Mr. Chairman. Madam Under 
Secretary, thanks again for you and your team being here, it is 
much appreciated. Always good to see you. And first of all, I 
just want to say I appreciate your opening comments reflecting 
on growing up in New Mexico, another great energy-producing 
state, and the impact that that had on helping to fund public 
education and just raise the economy for folks.
    And I wholeheartedly agree with your written testimony that 
Putin's war in Ukraine is removing millions of barrels of oil 
from the global supply, which is impacting the prices that 
consumers are paying at the pump and driving up inflation. That 
is just impacting every community and every family. 
Unfortunately, there is little we can do about Putin's reckless 
criminal adventurism, his genocide that he is conducting on a 
peaceful country. But, when it comes to energy prices which 
impacts agriculture in all communities obviously, urban, 
suburban, and rural, the Biden Administration has willfully 
chosen to take millions of barrels of oil from the global 
supply. And this Administration has blocked key pipelines, 
withdrawn land from production in Alaska, your home State of 
New Mexico based on Federal lands, Federal waters, and imposed 
costly new rules and regulations to hamstring domestic energy 
production.
    And if the loss of millions of barrels of oil from the 
global oil supply from Putin's war, which I think we all agree 
is wrong and driving up prices for consumers, then the question 
I have to ask is why is the loss of millions of barrels of oil 
from global oil supply by President Biden's reckless policy not 
also driving up costs for consumers? And how can it be that 
supply constraints caused by Putin are bad, but the supply 
constraints caused by President Biden and Vice President 
Harris' Administration are harmless? I don't know if you want 
to respond to that or not. I will give you the opportunity.
    Ms. Torres Small. Thank you so much, Ranking Member 
Thompson. And I deeply appreciate you bringing up Putin's war 
against Ukraine. I know that all of us are inspired by the 
bravery of Ukrainians, and I certainly keep them in my prayers.
    It also has informed both our immediate challenges and our 
long-term challenges when it comes to the need for energy 
independence. Recently, I was in Alaska and I saw what energy 
dependence can look like. And some of the islands off the shore 
in Alaska, 100 percent of their energy production comes from 
diesel. And they are looking at potentially quadrupling their 
energy bills or kilowatt hour expense because of their reliance 
on diesel.
    So as Rural Development, our key opportunity here is to 
invest in some of the solutions that local communities are 
looking at to build that energy resiliency both in terms of a 
local supply in the short-term and in terms of more resilient 
cleaner supply in the future.
    Mr. Thompson. I appreciate that for the long-term. We 
always should be looking over the horizon of what is next, but 
we have a crisis right now, and it is a crisis that is driving 
up food prices to the point where we are going to be faced with 
increased--certainly around the world, hopefully not in our 
country, but we will have inflation here that is going to make 
it difficult for people to get access to the food that they 
need. But around the world we are going to have by this fall 
increased hunger, starvation, and death through famine. And so 
one of the things--so there is an immediate need here.
    I would hope, in terms of your role with rural economic 
development and looking at the big picture--and quite frankly I 
am really proud of RUS and what we have for USDA in the energy 
space, that we could be a voice with the rest of this 
Administration. It is time to open up American resources. That 
is a solution for the fertilizer issue with natural gas 
development. And so that is something that could be done with 
the stroke of a pen. That doesn't take anything more than a 
second for the President to be able to do.
    And Madam Secretary, I appreciate your focus on the 
importance of ethanol to the rural community as well, but I am 
troubled by the Administration's insistence on massive 
subsidies to spur the adoption of electric vehicles. That is a 
whole additional issue I am not going to have any time to get 
into, so we need to look at the total footprint of these 
electric vehicles and are they really a solution for climate. 
But once again, thank you for your leadership, and I hope you 
will use your influence to communicate. We have an immediate 
crisis here, and our farmers and American families could 
benefit from reversing some really detrimental policies that 
have helped to escalate these fuel prices. So thank you. Thank 
you, Mr. Chairman.
    The Chairman. And thank you, Ranking Member. Your points 
are right on target.
    The gentlewoman from North Carolina, Ms. Adams, who is also 
the Vice Chair of the Committee on Agriculture, is now 
recognized for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman, and thank you for 
hosting today's hearing. And to our witnesses, thank you very 
much for being here. Ranking Member Thompson, thank you as 
well.
    You all bring a wealth of knowledge to an issue critical to 
curbing climate change and maintaining our energy independence. 
The pandemic has shown us that our rural communities 
desperately need investments in broadband infrastructure and 
small utility authorities. The farm bill has much to offer 
rural America. Although I represent an overwhelmingly urban and 
suburban district, I acknowledge the essential role the Members 
of this Committee must play.
    As the chair of the bipartisan HBCU Caucus, last week we 
celebrated the conclusion of a fifth successful HBCU STEAM Day 
of Action where, over the course of 5 days, hundreds of 
private-sector, nonprofit, and university participants engaged 
with a bipartisan, bicameral group of legislators who advocate 
for HBCUs. And as you may know, all of our 1890 land-grant 
institutions are based in rural America, priming these HBCUs as 
the best potential partners for the Department. So can you 
discuss the Department's plans for 1890 institutions on climate 
resiliency and climate-smart initiatives?
    Ms. Torres Small. Thank you so much, Congresswoman Adams. 
It is wonderful to get to see you. And I deeply appreciate your 
comments about how we both share roles in this challenge and 
recognizing the rural and urban connection that is crucial to 
addressing some of these challenges.
    When it comes to 1890s institutions, one of my immediate 
thoughts is the conversation we were just having about staffing 
and the future of the Rural Development workforce. I think the 
increased partnerships we can have with these institutions, the 
more we can diversify our staff and invest in the next 
generation. And I certainly see, as we continue to expand our 
long-standing work in these institutions, it also provides an 
opportunity for a future pipeline.
    To talk a little bit more about some of our work with these 
institutions, I will defer to my colleague, Administrator Neal.
    Dr. Neal. Thank you so much for that question and for your 
interest in 1890s institutions. I think there are two things I 
think we can highlight here. One, we heard Under Secretary 
Small talk about staffing. We have been pleased to host 1890s 
fellows within our ranks and to make sure that they get the 
training and that they can contribute to the work that we are 
doing throughout rural America and through RBCS and Rural 
Development more broadly. So we have been excited about that 
and look forward to opportunities to extend our engagement in 
1890s fellows programs.
    In addition, we work throughout the Department to look for 
opportunities for cooperative agreements, and we have seen that 
particularly in the food sector and some of the work we have 
done there with some of our colleagues across the Department, 
and we look for additional opportunities to partner with HBCUs 
because of the talent and the opportunities that they can 
provide in the work that we are doing. Thank you.
    Ms. Adams. Great. Well, thank you. So, Madam Under 
Secretary, what can the agency do to leverage dollars available 
in the IIJA for rural America to ensure that 1890s can play a 
role in this sector? Because, the Infrastructure Investment and 
Jobs Act (Pub. L. 117-58) allocated close to $2 billion for 
schools and institutions in rural areas.
    Ms. Torres Small. Thank you so----
    Ms. Adams. Go right ahead.
    Ms. Torres Small. Thank you for the question, and I am 
excited to follow up with your team as well to make sure that 
the specifics of some of the work that can be done with HBCUs 
we can follow up because so often it is about looking at 
specific HBCUs and where their strengths are and how we can 
best align those efforts. I see HBCUs as a clear opportunity 
for capacity in rural communities, so making sure that there is 
an institution that is focused on the work that is happening in 
their area and how we can better connect them. So I think there 
is a great potential when we look at the bipartisan 
infrastructure law to continue to invest in those partnerships.
    Ms. Adams. Okay. Well, great. And thank you so much for 
that. I have just a few seconds. So any options for small- and 
medium-sized farmers to help produce renewable energy in their 
operations?
    Ms. Torres Small. Oh, that is such an exciting question, 
and I think it is a crucial part of how Rural Development shows 
up in this space, having those relationships with rural 
communities to invest in Rural Energy for America Program 
investments, for example, is a key place where we can support 
rural producers and their work to make their operations more 
energy-efficient.
    Ms. Adams. Great. Well, thank you. Mr. Chairman, I am going 
to yield back.
    The Chairman. Thank you. And now the gentleman from 
Georgia, Mr. Austin Scott, is now recognized for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. And, 
Madam Under Secretary, I appreciate your time. I am sorry that 
I am not there in-person. Like many, I am juggling multiple 
hearings this morning.
    I want to go back to what the Ranking Member said about 
part of your testimony and blaming the increases in prices in 
the U.S. on Putin's war in Ukraine. And I want to make this 
clear. The price of fertilizer, the price of diesel, the input 
prices for agriculture had gone up well in excess of 50 percent 
before Putin ever invaded Ukraine. And it is a little--in fact, 
I will tell you it is very disingenuous for President Biden and 
the Biden-Harris Administration to continue to use the war in 
Ukraine as an excuse for why the input costs are so high when 
he took more oil off of the markets with his policies than has 
come off because of the Russian sanctions. And so I want to 
just make that clear. I mean, the input cost for the farmer had 
gone up well in excess of 50 percent before Russia invaded 
Ukraine, and that is because of the bad policies of the Biden-
Harris Administration.
    And with that said, Madam Under Secretary, you mentioned 
that these new sources of energy are reliable, they are 
affordable, but the fact of the matter is every morning in 
America farmers wake up and they are going to fire up a couple 
hundred horsepower diesel tractor in most cases to farm, and I 
am just extremely concerned about the increasing number of 
factors that are impeding the ability of our farmers, input 
costs especially, to produce the food and fiber that we all 
depend on. Now, knowing that the increased cost of fuel 
increases the cost of food, what is your agency doing to help 
reduce the cost of inputs in agriculture?
    Ms. Torres Small. Thank you so much, Congressman, for your 
question and your recognition of the complexity of the impacts 
currently that folks are facing both when it comes to at the 
supermarket or at the gas pump, the challenges that we face 
from COVID, from war, and other challenges that we face, 
especially relating to the supply chain.
    When we look at Rural Development, our opportunity really 
is to support farmers and rural communities who are grappling 
with these challenges, whether it is working to provide more 
offerings within a market like expanding investments in the 
food supply chain or whether it is working to also create more 
energy independence from a REAP side and more energy 
efficiency.
    To talk a little more about the work that we have been 
doing in the food supply chain, I will defer to my colleague, 
Administrator Neal.
    Dr. Neal. Thank you for the opportunity to speak about 
that. I think one of the things that is really important is to 
recognize, we in the United States are a net exporter of food, 
and so we are in a good position to feed ourselves. We 
recognize there have been price increases and there have been 
some challenges there, so we are supportive of and helping 
implement the Administration's action plan around creating a 
fairer, more resilient, more competitive meat and poultry 
supply chain. We have seen that work both in terms of meat and 
poultry but then also in terms of the broader food supply 
chain. Under Secretary Torres Small mentioned our food supply 
chain work. We have a Food Supply Chain Guaranteed Loan 
Program, which is already receiving applications to support 
activities throughout the middle of the food supply chain so 
that folks have access to capital to build their businesses, to 
help to support the aggregation, the distribution, the 
wholesaling, the various kinds of activities that are important 
to get food and food products from the farm to the table so 
that people can eat and have the food that they need at an 
affordable rate.
    And so those are just a couple of the kinds of things we 
are doing. There is a significant amount of work that is 
happening throughout the Department. Rural Development, RBCS 
has some of those activities but not all of them, and we are 
excited to work in partnership with our colleagues throughout 
the Department to make sure that those programs are effective, 
are doing the kinds of things that we want them to do, and are 
making a difference both for the producers who are growing 
those foods, growing those food products, and also for the 
consumers who are all of us who need those food products.
    Mr. Austin Scott of Georgia. Well, I think there is a very 
serious disconnect between what the Biden-Harris Administration 
believes is good policy and what is happening at the grocery 
store. I don't see how anybody who shops for groceries could 
believe in any way, shape, form, or fashion that what Biden and 
Harris have done through their Administration is helping the 
American consumer with regard to their grocery bill. So I look 
forward to the continued discussion, but I am someone who is 
worn out with the Biden-Harris Administration using the war in 
Ukraine as an excuse for inflation inside the United States. I 
yield back.
    The Chairman. Thank you, Mr. Scott. And now the gentlewoman 
from Virginia, Ms. Spanberger, who is also the Chair of the 
Subcommittee on Conservation and Forestry, is now recognized 
for 5 minutes.
    Ms. Spanberger. Thank you so very much, Mr. Chairman. Thank 
you for holding this important hearing on our Energy Title 
programs in the farm bill. And certainly it is unfortunate that 
the Secretary of Energy isn't here because I am sure she would 
have great responses and comments to make about the more than 
9,000 oil leases that are currently out there that industry is 
choosing not to tap into for the prior gentleman's comment. And 
certainly we know that in the month since the Russian invasion 
of Ukraine, fertilizer prices are 40 percent higher than they 
were before the invasion, clearly making a strong and obvious 
connection when you have one of the largest producers of not 
only fertilizer but necessary components of fertilizer engaging 
in an aggressive war against a neighbor. Certainly, that has 
made major disruptions to the supply chains, not to mention 
truck driver shortages and other challenges.
    But what we are here today to talk about are not all of 
these other contributing issues. We are here to talk about the 
real importance of programs that allow for us the security, 
affordability, and production of energy at home. Certainly in 
the context of global instability and supply chain bottlenecks, 
we can see that there are positive programs that can be so 
vital to rural America, to our farmers and producers, and that 
is why, while I have advocated for measures that provide 
immediate relief to the price at the pump such as multiple 
releases of crude oil from the Strategic Petroleum Reserve, 
these USDA programs that we are here to talk about are what can 
provide long-term solutions to increase energy independence, 
reduce pollution, and increase efficiency, all while saving 
money for our rural communities.
    So, Secretary Torres Small, I would like to begin with you 
because in your testimony you talked about the Rural Energy for 
America Program, the REAP program. I have been a strong 
supporter of the REAP program, and I was very proud when 
provisions from my REAP Improvement Act (H.R. 4162, Rural 
Energy for America Program (REAP) Improvement Act of 2021) were 
included in legislation that recently passed--well, last year 
passed out of the House. But this bipartisan legislation would 
not only--the REAP Improvement Act would not only dramatically 
increase annual funding for the program to $250 million but 
also would take steps to improve accessibility for rural 
communities and create additional flexibility for applicants. 
For example, the bill would expand eligibility for farmer co-
ops, reduce burdensome cost-shares for farmers and 
agribusinesses, and create a fund for underutilized 
technologies, including biodigesters or biofuel-related 
infrastructure.
    So when we are talking about REAP, Under Secretary, it is 
consistently oversubscribed and under-funded, leaving many 
producers and agribusinesses to be pretty frustrated with the 
backlogs in the program. This is despite an impressive record. 
In the last 6 years, REAP has leveraged more than $300 million 
in public investments to stimulate more than ten times that 
amount in private investments, right? So $300 million public 
investment, ten times that amount private investment, 
delivering more than $4 billion in energy efficiency and 
renewable energy projects for rural America.
    So I know I don't have to convince you of the value of this 
program, but I was hoping that you might be able to expand for 
the Committee on how we might be able to improve this program 
in the 2023 Farm Bill, what sort of resources would be needed 
to meet the actual current demand for REAP assistance, and what 
would you have us know as we head towards the farm bill?
    Ms. Torres Small. Thank you so much, Congresswoman 
Spanberger, for your investment in rural communities. You 
truly, with your focus on REAP, have the farmers' back. And I 
am grateful to continue this dialogue about how we can better 
support those farmers as they implement energy efficiency 
opportunities in the way rural folks know best, whether that is 
updating a grain dryer that hasn't been updated since the 1980s 
to make it more efficient or whether that is investing in 
making biodiesel more energy efficient in their production. So 
there are great opportunities here, and I really appreciate 
your focus on ways to make it more accessible, streamlining the 
application process, for example, and ways to include other 
partners. You are absolutely right it is oversubscribed. And 
when we look at grants, it was about $40.5 million in grants 
that were allocated and then another $30 million in the wings 
waiting to be funded, which we didn't have the money for.
    So to speak a little bit more about this program, I will 
defer to Administrator Neal.
    Dr. Neal. Yes, I am always happy to talk about our REAP 
program. And it provides both grants and guaranteed loans for a 
variety of purposes, for renewable energy systems, for energy 
efficiency projects, just for a variety of those kinds of 
things. And so we look forward to sort of figuring out how to 
make this program more modernized as we think about our 
staffing, making sure that there is support for the kinds of 
environmental reviews and other kinds of support that are 
required for the effective administration of this program.
    And of course, as we heard, we have had a record year. Not 
only are our grant funds expended, we also had a record year 
for our guaranteed loan programs previously. And so we know 
that there is significant interest in this program, and we 
welcome your interest and continued support of the work.
    The Chairman. Thank you.
    Ms. Spanberger. Thank you, Mr. Chairman.
    The Chairman. And now the gentleman from Arkansas, Mr. 
Crawford, is recognized for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman. I want to associate 
myself with the comments of Mr. Austin Scott and our Ranking 
Member as well just to reiterate this problem with issues like 
fertilizer and so on. I was getting calls about this, this time 
last year. So this problem with inputs and supply chain issues 
didn't just materialize as a result of Vladimir Putin.
    But that said, Madam Secretary, I am wondering if you can 
talk about what your plans are. I know that rural America can 
play a pretty important role in developing renewable energy, 
but I wonder if you can explain how rural Americans are 
supposed to deal with how they might power, for example, a 300 
horsepower tractor in the production of food and fiber to feed 
and clothe our population, as well as being important in the 
global marketplace?
    Ms. Torres Small. Thank you, Congressman Crawford. And I 
certainly recognize the importance that we have to work 
together on these challenges, knowing that there is no one 
simple silver bullet that fixes everything but rather that we 
have to invest in the places where we are seeing innovation 
happen on the local scale. And that is where Rural Development 
really shines. We are not in the regulation space but we are in 
the investment space, in the incentivizing space. So when a 
farmer or a rural community has an idea about how to expand 
their energy independence, we are there to support, whether it 
is through the Rural Energy for America Program or whether it 
is through investments when it comes to our utilities and 
utility-scale investments. So there is a lot of work that has 
to be done in this space, and Rural Development is really 
pleased to be there to support the local vision for their 
community and how to best diversify the energy economy.
    Mr. Crawford. Well, I appreciate your comments, but you 
really didn't answer my question. I am wondering what does a 
farmer do today when we are seeing policy developed that is so 
focused on renewable energies? Are they to put solar panels on 
top of their 300 horsepower tractor? Or how exactly does that 
work? Or are they going to use electric tractors that are 
powered by wind turbines? We have large-scale ag operations 
across the country that our people rely on for food and fiber. 
And I just don't think it is realistic to think that you are 
going to focus almost exclusively on renewables and at the same 
time expect farmers to be able to produce at the scale that we 
need them to with regard to how we actually produce our food 
and fiber. So let's try it again. What are your plans for our 
current farmers who produce on large-scale operations to feed 
and clothe 350 million people in this country and overseas as 
well?
    Ms. Torres Small. Congressman Crawford, I deeply appreciate 
your focus on farmers and how to best support them and also 
recognize--I think it was Ranking Member Thompson who said 
although we need to invest in renewable energy, that transition 
will not happen overnight. I, in my opening comments, talked 
about New Mexico and recognizing the diverse energy industry 
that is there and the work that happens right now when it comes 
to tractors or beyond that rely on a diversity of fuels.
    But as we look to the future, there is a key opportunity 
here to support biodiesel, to support opportunities to make 
that production or that use of energy more efficient. And that 
is the way Rural Development can help incentivize those 
investments and to make them accessible to people across rural 
America.
    Mr. Crawford. Thank you. Can you talk more about your Grid 
Security Division? What outreach has been conducted with 
stakeholders? And I would also like to hear about the types of 
critical infrastructure security policies that you have 
developed.
    Ms. Torres Small. Thank you, Congressman Crawford. I think 
this is another great place where we can work together. When I 
served in Congress, I was on the Homeland Security Committee 
and certainly recognize the importance of cybersecurity. We 
also recognize the need to invest in grid security across the 
board whether it is extreme weather, as well as other 
challenges to make sure that our energy is resilient.
    To speak a little bit more about the creation of the Grid 
Security Division, I will defer to my colleague, Administrator 
McLean.
    Mr. McLean. Thank you very much. And thank you for that 
question. The Rural Utilities Service took to heart this 
Committee's endorsement of the 2018 Farm Bill of the provisions 
that highlighted the importance of cybersecurity, in particular 
in grid security. And you are correct we did create a Grid 
Security Division. And we have also just last week reminded our 
borrowers that the RUS is ready, willing, and able to be able 
to finance cybersecurity investments, grid security, physical 
security investments, as well as fire prevention investments, 
including emergency and response vehicles, security vehicles, 
drones, software, even though traditionally those types of 
investments would have been categorized as operational expenses 
rather than capital expenses. But we determined that it was 
critically important that finances be made available for those 
purposes, and we continued our long-standing process of having 
every borrower who comes to RUS for a new loan or an additional 
loan to be able to give us a risk assessment and emergency 
response plan. So we take cybersecurity very seriously. We are 
working closely with our colleagues in the Department of Energy 
and trying to make funds available to rural electric service 
providers to be able to strengthen and harden the grid.
    The Chairman. Thank you. And now the gentlewoman from 
Connecticut, Mrs. Hayes, who is also the Chairwoman of the 
Subcommittee on Nutrition, Oversight, and Department Operations 
is now recognized for 5 minutes.
    Mrs. Hayes. Thank you, Mr. Chairman, and thank you to Under 
Secretary Torres Small for being here today, we are thrilled to 
have you back in the Congress.
    Last year, USDA announced that it would be investing $464 
million into projects to build and improve renewable energy 
infrastructure and to help rural communities, agricultural 
producers, and businesses lower energy costs: $115,000 went to 
Connecticut through the Rural Energy for America Program, 
including four projects in my district worth over $43,000. 
These funds were awarded for solar power installation and 
technology improvements that will result in cost saving of over 
$15,000 each year.
    This program is critical to small farms and agricultural 
businesses in my district. Their profit margins are exceedingly 
tight and only getting tighter with inflation and input costs. 
While the producers and operators in my district are ahead of 
the curve in climate-smart and energy-smart policies, the REAP 
program helps them to get the funding they need to install 
energy efficient technology.
    While small- and midsize farms in my district are doing 
much better on these energy-smart practices, historically, 
midsize and small farmers are hesitant to undertake 
conservation practices because of the negative economic impact 
it can have on their operations. Can you tell us today, how is 
REAP able to deal with this, and is there a need to adjust 
title II programs to allow smaller producers some up-front 
assistance on these types of projects?
    Ms. Torres Small. Congresswoman Hayes, thank you so much 
for that question and for really looking out for farmers and 
their ability to both make investments in renewable energy work 
immediately for their bottom line and invest into the future. 
That is certainly our goal at Rural Development. And one of the 
keys to that is making sure that REAP is accessible both in 
terms of the application process and trying to find ways to 
simplify that process but also recognizing the large backlog of 
applications that are certainly out there.
    I think you are absolutely right that we can find ways to 
make the application process easier, and part of that is the 
technical assistance. Rural Development is unique in a lot of 
ways, but one of it is its presence on the ground. We have 47 
state offices, over 450 offices throughout the United States, 
and so being able to provide that technical assistance is one 
component of that.
    To speak more on this, I will defer to Administrator Neal.
    Dr. Neal. Yes, thank you so much for the opportunity to 
talk about this. I mean, one thing that is important is, 
obviously with REAP, we have both guaranteed loans and grant 
programs as well. Two-thirds of the grants are for less than 
$20,000, so that is really the bulk. So when we are thinking 
about small operators or small projects at least, much of that 
need--or the program is more sensitive to that need given that 
\2/3\ of the grants are for those projects under $20,000. So 
that is something we are thoughtful about. Of course, we 
recognize that there are certainly unfunded projects, 
applications that are submitted that might be high quality but 
that are not able to be funded, given the amount of funds that 
are available. So we look forward to additional support for 
that program so that additional need can be met.
    Mrs. Hayes. Thank you so much for that. I spend much of my 
time on this Committee advocating for small- and medium-size 
farmers because those are the people in my district, and I want 
to make sure that the work that we are doing on this 
Agriculture Committee includes all farmers and the entire 
agricultural community.
    In my district, UConn Extension does an amazing job to 
educate farmers on renewable energy options for their farms. 
What role can the extension services play in educating farmers 
on the benefits of energy efficiency options in their 
operations, and what are some of those options for small- and 
medium-size farmers?
    Ms. Torres Small. Congresswoman Hayes, that is such a great 
question. One of my favorite visits so far was in Florida where 
I got to meet with the extension service and talk about how our 
programs could support the people, the farmers that they were 
talking to every single day, making sure that we are working 
throughout USDA to be able to better assist and be there for 
farmers in the spaces they need most. We are certainly 
interested in continuing to work to get information out through 
extension services and also get feedback through extension 
services in order to find ways to make our programs more 
accessible.
    Mrs. Hayes. Thank you, Under Secretary Torres Small, and I 
have to tell you, you have to get to Connecticut to visit our 
extension programs. It is amazing to see the investment that 
they have in young people and building up the next generation 
of our agricultural producers.
    Mr. Chairman, that is all I have. I yield back.
    The Chairman. Thank you. And now the gentleman from 
California, Mr. LaMalfa, is recognized for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate it. 
Under Secretary Torres Small, good to see you again. Thanks for 
being here. Of course the topic of renewable energy in the ag 
sector is extremely important, and there are a lot of facets we 
need to continue to look at here. So I think I would like to 
first lead off, when we leave out on the overall grid, the 
overall renewable portfolio, we have to recognize that 
hydroelectric power that is so abundant in many parts of our 
country has to be recognized as truly renewable. And if it 
rains, it renews. And we are looking for the concern being 
carbon dioxide, and we also have to recall that nuclear power 
is a carbon-free source of generating electricity.
    But shifting gears here to things a little more centric 
towards the farm bill and agriculture in general, as you know, 
my area of my district and a lot of the western states have a 
massive amount of biomass available, sort of forested areas, as 
well as ag waste from orchard prunings and other waste products 
that are a byproduct of agricultural operations. So putting 
biomass at the top of the heap here would be very important as 
a means of producing electricity and other forms of power that 
can be, other forms of energy that can be derived from them as 
well.
    So looking at the landscape since the 2018 Farm Bill where 
the extension was made in the community, what energy and what 
innovation program which provides financial assistance for the 
installation of wood energy systems, how are we doing as far as 
new facilities coming in place or being in plants that will be 
coming online soon as a result of this farm bill, Energy Title 
back from 2018? Are we seeing much happening on that in order 
to use some of this wood product that, again, we are so 
overabundant in western states and my district to put that 
waste product to work for us instead of being the next million-
acre fire in our forests?
    Ms. Torres Small. Congressman LaMalfa, it is always 
wonderful to see you, and I really appreciate your thoughtful 
question about the different types of renewable energy and how 
we can diversify that portfolio. When it comes to woody 
biomass, there is a program within the Forest Service which 
isn't within Rural Development's direct purview, but we will be 
happy to connect you on some of the opportunities there related 
to the Forest Service and their woody biomass program. In 
addition, the B&I Guaranteed Loan Program may be accessible in 
terms of a loan, a guaranteed loan for some of those 
investments, as well as REAP if the program qualifies.
    To speak a little bit more about the way Business and 
Industry Guaranteed Loan Program works, as well as REAP, I will 
defer to my colleague, Administrator Neal.
    Dr. Neal. Thank you. I really appreciate that question. I 
think one of the things that we do is we try to look for the 
ways of which we can make the dollars go farther, and 
guaranteed loans are a way of doing that. And so the Business 
and Industry Guaranteed Loan Program provides up to 80 percent 
guarantees on loans of up to $25 million typically and can be 
used for a variety of rural small business purposes, including 
things like what you may be suggesting there.
    In addition, the REAP program supports a variety of 
technologies. The solar work is predominant, but that does not 
mean these other projects are not competitive. They certainly 
are. And so we welcome those applications as well through both 
the REAP Grant Program and the REAP Guaranteed Loan Program. So 
I think there are a number of opportunities there to be 
thoughtful about this work to help advance the kinds of 
technology there.
    The other piece I would mention, too, is what is typically 
often called the section 9003 Program, the Biorefinery, 
Renewable Chemical, and Biobased Product Manufacturing 
Assistance Program.
    Mr. LaMalfa. Well, let me reclaim my time. I am sorry. The 
existence of the programs is positive, is good, but how will 
they be implemented into actually getting facilities built or 
at least on the way to being built to utilize these materials 
and turn them into energy? How well are we doing since the 2018 
Farm Bill has extended that initial program in other areas?
    Ms. Torres Small. Thank you so much, Congressman LaMalfa. 
And I think that this is a good fit for the section 9003 
Program in terms of the large-scale investments that may be 
necessary, so I will defer to Dr. Neal on that.
    Dr. Neal. Yes, I would appreciate, and we certainly would 
welcome the opportunity to share more and to research and get 
back to you about any particular projects that are specific in 
terms of woody biomass that have been used in section 9003. I 
don't have that data on me right now.
    Mr. LaMalfa. I guess my bottom line when you get back to me 
is what is actually being built or what is far along in the 
planning stage that we can count on then coming online? That is 
what I am looking at. So thank you. I will yield back.
    [The information referred to is located on p. 527.]
    The Chairman. Thank you. And now the gentlewoman from Ohio, 
Ms. Brown, is now recognized for 5 minutes.
    Ms. Brown. Thank you, Chairman Scott and Ranking Member 
Thompson, for holding this hearing today. Under Secretary 
Torres Small, it is great to see you again so soon after your 
visit to Cleveland last month, and thank you to your colleagues 
Dr. Neal and Mr. McLean for being here as well.
    It is no longer a luxury to have access to fast and 
reliable broadband internet service; it is a necessity. From 
virtual classrooms to telehealth doctor visits, being able to 
utilize high-speed internet is needed by everyone, regardless 
of where they choose to live. In the 2018 Farm Bill, there was 
a specific set-aside in the Smart Utility Authority for 
construction of broadband infrastructure for underserved non-
rural areas like much of northeast Ohio. As we look to the next 
farm bill, how widespread has the Smart Utility Authority been 
utilized, and what changes might be needed, going forward?
    Ms. Torres Small. Congresswoman Brown, thank you so much 
for your focus on broadband. And certainly within the context 
of energy there is a clear nexus there in terms of 
opportunities for utilities to utilize that broadband as well 
to make sure their energy is most efficiently used, as well as 
to provide it across the country through, for example, rural 
electric co-ops.
    To speak more specifically about the program, I will defer 
to my colleague Administrator McLean.
    Mr. McLean. Well, thank you very much, and thank you for 
that question about Smart Utility Authority. It is one of the 
great innovations of the 2018 Farm Bill, and I am delighted to 
report that in the RUS Electric Program we have utilized that 
authority about ten times since its creation to be able to 
devote up to ten percent of a project cost for retail provision 
on broadband. And we are seeing electric service providers 
leveraging their smart grid investments and to use the Smart 
Utility Authority to kick it up a notch and increase that 
investment to be able to provide the retail provision of 
broadband. This is in addition to the wonderful support that 
Congress has given RUS in the ReConnect Program and our 
Broadband and Telecommunications Loan and Grant Programs. And 
we have just a tremendous response to our last funding round, 
which we are now evaluating. So we are grateful for Smart 
Utility Authority. It has been very useful, and we look forward 
to its further availability.
    Ms. Brown. Thank you for that. One further question on 
this. How do you think the USDA Office of Rural Development can 
work with other agencies to bridge the urban-rural digital 
divide so that no one is left behind?
    Ms. Torres Small. Congresswoman Brown, that is such an 
important question as we see the multiple ways that Congress 
has chosen to invest in closing the broadband gap. We see Rural 
Development as a key partner in that work, recognizing that we 
will only achieve this through true collaboration. And what 
Rural Development brings to the table really is an expertise in 
rural areas, a connection to some of the most likely providers 
like rural electric co-ops, for example, or our local telecoms, 
also finding opportunities to be able to assist when it comes 
to working in Indian Country, for example, and our long-
standing relationships in areas that don't always get the 
service that they need.
    To speak a little bit more to that coordination, I will 
defer to Administrator McLean.
    Mr. McLean. Yes, well, thank you very much. And there is 
extremely strong coordination between the Federal agencies that 
were entrusted with broadband responsibilities, both in the 
Rescue Act, as well as the bipartisan infrastructure bill. So 
the NTIA, National Telecommunications and Information 
Administration, part of the Department of Commerce, the Federal 
Communications Commission, and the Rural Utilities Service have 
a long-standing memorandum of understanding where we 
collaborate with each other, share data, try to make sure that 
our programs feather in with each other. And we work closely as 
well with the Department of the Treasury, who had American 
Rescue Plan Act of 2021 (Pub. L. 117-2) authority to be able to 
support broadband and are working across the Federal agencies 
and look forward to working even more with states as our sister 
agencies are releasing broadband funds for state investment.
    Ms. Brown. Thank you. Mr. Chairman, with that, I yield 
back.
    The Chairman. Thank you very much. And now the gentleman 
from Illinois, Mr. Davis, is recognized for his 5 minutes.
    Mr. Davis. Well, thank you, Chairman Scott, Ranking Member 
Thompson. Xochitl, great to see you again. Congratulations, 
Madam Under Secretary. I look forward to working with you.
    I am glad we are here talking about this issue. However, I 
do think a timelier and more appropriate title for this hearing 
would be the energy crisis every family in America is 
experiencing because of the Biden Administration's misguided 
inflationary energy policies. I appreciate the opportunity, 
though, to discuss energy policies with all of you.
    Gas 2 years ago was $1.97 on average. Now, it is $4.17. 
That is an increase of over 100 percent. This is proof that our 
USDA energy programs are more important now than ever but also 
proof that this Administration, I don't believe, is utilizing 
them well enough. As ag input costs continue to rise, prices at 
the pump continue to rise, and inflation continues to decimate 
rural America, I am disappointed that once again we aren't 
discussing the issues that matter most right now to our 
producers and our families right here in this Committee. We 
need to do better.
    This Administration promised our ethanol and biofuels 
producers the world during the campaign and has failed on every 
single point. And, in turn, gas prices continue to soar and our 
farmers are left behind. Last week, I sent a letter with 
several of my colleagues on this Committee asking the Biden 
Administration to prioritize domestic energy production, 
including making permanent year-round E15. And again we asked 
the President to simply uphold the law and reverse its course 
on the proposed cuts to the RVOs, renewable volume obligations. 
To make matters worse, funding from the CARES Act (Pub. L. 116-
136, Coronavirus Aid, Relief, and Economic Security Act), which 
was enacted over 2 years ago, included funds to provide 
pandemic-related economic relief to ag producers of all types.
    In December 2020, the omnibus extended explicit authority 
to the Department to provide this relief to biofuels producers. 
In December of 2021, a year into the Biden Administration, the 
Department finally announced a $700 million biofuel producer 
program to provide economic relief to our producers to restore 
renewable fuel markets affected by the pandemic. And yet, amid 
what I would consider a fuel crisis on top of an inflation 
crisis, the producers who can help decrease our fuel costs 
immediately are still being left behind and have yet to see any 
of these funds as we in Congress have directed.
    I don't understand why this Administration has such an 
aversion to rural America, especially given the rising gas 
prices related to the ongoing conflict in Russia and the ban on 
oil imports on top of existing and misaligned ban on drilling 
in the United States. But regardless, Madam Under Secretary, my 
question is why have our biofuels producers still not seen any 
of these funds?
    Ms. Torres Small. Congressman Davis, I deeply appreciate 
your focus on rural America and your shared belief that USDA 
has a vital role in making sure that we are addressing these 
challenges from the increased cost at the pump to supporting 
local markets and biofuels. I am eager to make sure that we are 
delivering those $700 million, recognizing that the application 
closed in February, and so we will be focused on getting them 
out late spring or early summer. I look forward to keeping in 
touch with your office to make sure that you receive up-to-date 
information on that.
    In addition, as we look at what the investments are to take 
on the challenges recovering from COVID-19, it is also about 
making sure that, as you mentioned, that fuel is more 
accessible across the country. And Rural Development's 
opportunity there really is the HBIIP (Higher Blends 
Infrastructure Incentive Program) program, making sure that we 
have the technology on the ground to get out that higher blend 
of biofuels. And so we are also proud to have invested $100 
million in the HBIIP program, and that will be happening in the 
spring, the applications for that.
    To speak a little bit more about the biofuels program and 
the emphasis there, I defer to Administrator Neal.
    Dr. Neal. Yes, this is an important issue, so I really 
appreciate the question and your interest in this important 
work. We are excited about the opportunity and really welcome 
the opportunity to help people have choices at the pump, to 
help supplement the current fuel with all kinds of things, 
additional kinds of activities like biodiesel, like ethanol 
through the programs that we just heard the Under Secretary 
talk about, the Biofuel Producer Program, the HBIIP program, 
which is going to provide the infrastructure that is necessary. 
These are the kinds of things that help make sure that our 
energy stream is reliable, that it is affordable, that it is 
clean, that it is accessible to people. And so that is really 
the work that we are doing through these programs. We look 
forward to opening this program to making the announcements 
very soon for the Biofuel Producer Program and to opening the 
Infrastructure Incentive Program as well.
    Mr. Davis. Well, I certainly look forward to those 
announcements. You can sense my frustration, the frustration of 
a lot of rural Americans. But I do support Rural Development, 
and I really look forward to working with both of you and 
seeing those announcements soon. Thank you. I yield back.
    The Chairman. Thank you. And now the distinguished 
gentleman from Illinois, Mr. Rush, is now recognized for 5 
minutes.
    Mr. Rush. I certainly want to thank you, Mr. Chairman, for 
this outstanding hearing this morning. Madam Under Secretary, 
it is such a delight to have you back in the Congress before 
this Committee, and you have really made us all very proud of 
you in terms of your work for the Biden Administration and for 
the American people.
    As chair of the Energy Subcommittee of the Energy and 
Commerce Committee, I am continually concerned about the impact 
of any new costs on our nation's farmers and, specifically, the 
energy costs as it relates to minority farmers and consumers. I 
think that they have been too often overlooked. In your 
testimony, you mentioned that energy efficiency in rural 
communities can explicitly be an equity issue in addition to a 
cost issue. Explain what you mean by that.
    Ms. Torres Small. Congressman Rush, would you mind just 
restating the last part of your question? I just want to make 
sure I answer it correctly.
    Mr. Rush. Okay. Can you talk about how energy costs 
disproportionately burden certain rural communities more than 
others and how investments in energy efficiency will help to 
reduce those inequities?
    Ms. Torres Small. Thank you so much, Congressman Rush. And 
it is such an honor and joy to get to see you on this 
Committee. I really appreciate your question about how the cost 
of energy can disproportionately impact rural communities and 
how investment in renewable energy can also greater impact the 
work that is done across rural America. So when you are looking 
at travel to rural areas, if you are driving hours to get 
somewhere or if you are trying to, for example, construct homes 
and so having to lug large amounts of equipment to rural areas, 
the impact of energy can be incredibly high. And so it can 
impact rural areas in a way that is even greater than perhaps 
the impact in urban areas. Likewise, when we can create and 
support local markets that are supporting diverse energy 
sources, it gives us an opportunity to impact rural areas in a 
similar way.
    Mr. Rush. Thank you so much.
    Ms. Torres Small. Did I answer your question?
    Mr. Rush. Yes. Thank you. Let me ask you another question, 
Dr. Neal, this question. First of all, I am so delighted that 
one of the missions of the USDA's Rural Business--Cooperative 
Service is to include the effectiveness of programs serving 
cooperatives. Can you discuss these programs, whether the 
programs are only open to rural communities, and what best 
practices have you developed to [inaudible] millions to 
cooperatives under your jurisdiction? And additionally, is 
there severe need for more cooperative arrangements in rural 
and minority farming communities?
    Ms. Torres Small. Thank you so much, Congressman Rush. I 
will defer to Administrator Neal to speak to the work that is 
done specifically to cooperatives and how Rural Development is 
working to invest in that.
    Dr. Neal. Thank you. We are really proud of our heritage of 
supporting cooperatives for I think over 100 years at this 
point, and so we continue that and are excited to continue to 
have the Rural Cooperative Development Grant Program, the 
Socially Disadvantaged Groups Grant Program that specifically 
support cooperatives, in addition to the technical assistance 
that we provide through our cooperative services branch. I 
think it is important to note that many of our programs are 
also open to cooperatives, very intentionally open to 
cooperatives. We designed, as an example, we mentioned earlier 
today the Food Supply Chain Guaranteed Loan Program that was 
specifically designed to include and be inclusive of 
cooperatives in that program. And so we want to make sure that 
cooperatives have access to all the kinds of programs, although 
there certainly are some specific activities that are specific 
to cooperatives.
    I would like to say, if I may, just one other thing, too. 
The Rural Energy for America Program was the pilot program at 
USDA for the environmental Justice40 project, and so I think 
that is one of the ways when we think about our REAP program is 
now serving as a model throughout USDA and to some extent 
throughout the Federal family of how to measure those kinds of 
impacts. And we are pleased to sort of understand how that 
disproportionate impact of energy cost can be remedied through 
programs like REAP and other kinds of things that are out 
there.
    Mr. Rush. Thank you very much, Mr. Chairman. I yield back.
    The Chairman. Thank you very much. And now we recognize the 
other distinguished gentleman from Georgia, Mr. Allen, for 5 
minutes.
    Mr. Allen. Thank you, Mr. Chairman. And, Under Secretary, I 
have to be honest with you because I feel the frustration and 
the pain and suffering of the American people. I don't know how 
this Administration sleeps at night with what is going on in 
this country. You had two of the top CEOs of both BlackRock and 
J.P. Morgan, and they have stated that this economy, that we 
currently have unprecedented risk dealing with the current 
economy. I don't have a crystal ball, but I do come from the 
business world. And the dashboard looks very bleak in this 
country right now. And of course that is probably one of the 
reasons that Putin took the risk he did, because we are very, 
very vulnerable. And it is sad. It is very sad for this 
country.
    And do you know that right now there is a diesel shortage 
in Europe, and the Ukrainians aren't even going to be able to 
plant because they can't get diesel fuel, and we can't even 
help them because we are going to have a shortage in this 
country? I mean, folks, we have to wake up and realize what is 
at stake here. I mean, our very survival as a nation could be 
at stake here. There are adversaries out there that want to 
take our way of life away from us. And you are helping them. I 
don't understand it.
    But let me just ask you this. Two years ago we were energy-
independent. We were helping Europe with LNG. We weren't 
sending $75 million a day to Russia for oil to finance their 
war against the poor Ukrainians. Would you be in favor of 
releasing the energy economy in this country to avert the 
possible devastation of our economy? Would you be in favor of 
that, or are you still going to hang with, well, the government 
is going to keep spending money to explore alternative energy, 
and in the meantime we have no country left. I mean, where are 
you on that?
    Ms. Torres Small. Congressman Allen, I recognize that you 
disagree with the Administration in many places, but I hope 
that we can share----
    Mr. Allen. I don't disagree with the Administration. I am 
telling you what every corporate executive, every business in 
this country is talking about. This Administration is going to 
destroy the country.
    Ms. Torres Small. I wake up every single morning thinking 
about how I can better serve rural America, and I think that is 
something that we share. And so when it comes to addressing the 
challenges that are immediate, making sure that we are 
supporting farmers, that we are supporting local, rural 
economies in the ways they best know how, Rural Development is 
there to help incentivize that, to provide some of the 
financing that is crucial to do that work. And when it comes to 
taking on the long-term risks for our society, when it comes to 
taking on the long-term risks for our energy resiliency, Rural 
Development is also there to invest in the opportunities and 
the innovation that we see across rural America.
    Mr. Allen. So like what are we going to do about energy?
    Ms. Torres Small. So we are investing both in the immediate 
needs when it comes to supporting biofuels, when it comes to 
supporting local markets for renewable energy. Also, the long-
term----
    Mr. Allen. The only thing that is going to save this 
country is to unleash our energy economy. That is the only 
thing that is going to save us. Are you for or against that?
    Ms. Torres Small. Now, sir, when it comes to Rural 
Development----
    Mr. Allen. I am not talking about Rural Development. I am 
talking about everywhere. Yes, it is going to affect rural 
America for sure, but I need a yes or no from someone who 
represents this Administration. Are you going to let this 
country absolutely fall apart, destroy the country when we have 
the opportunity to remove all the pain and suffering just by 
unleashing our energy economy like the previous Administration 
did?
    Ms. Torres Small. Congressman----
    Mr. Allen. Yes or no.
    Ms. Torres Small. Congressman, I am not clear on what the 
question is.
    Mr. Allen. You are not clear? Okay. Say, for instance, if 
we don't unleash our energy economy, it is going to destroy our 
nation. That is the crystal ball I see. That is what these 
executives are saying. So would you be for unleashing--would 
you advise the President to unleash our energy economy, 
everything we have, to fight Putin and the rest of the world 
and to survive as a nation?
    Ms. Torres Small. So, Congressman, from my standpoint in 
Rural Development, we are working to unleash every opportunity 
we have in energy resiliency both to address the short-term and 
the long-term risks that we face.
    Mr. Allen. Okay. Well----
    The Chairman. Thank you very much. Thank you, Mr. Allen. 
And I can assure you I have spoken with the President on his 
priority for rural America, and I assure you they are moving 
very aggressively.
    And now, the gentleman from Arizona, Mr. O'Halleran, is now 
recognized for 5 minutes.
    Mr. O'Halleran. Thank you, Mr. Chairman and Ranking Member, 
for organizing this important meeting today. I also want to 
thank the witnesses for their participation today, for helping 
this Committee prepare for the upcoming farm bill.
    So, first of all, I would like to get a couple of issues 
out of the way. Liquefied natural gas, we are the largest 
exporter in the world starting the end of this year. There are 
only two other countries that are even close. We have 11 
million acres right now of oil and gas leases available, and in 
the time that those leases have been available out there, the 
industry itself since 2014 has contributed or invested $650 
billion in 2014. They are down to investing between $300 and 
$250 billion a year now. They have to invest money on the 
leases that they have to produce the oil and gas that are 
necessary for us today. And corporations throughout this 
country are not.
    We are undergoing tremendous inflation right now, but it is 
because of a pandemic for 2 years. It is because of a war that 
is going on now. It is because the rest of the corporations in 
America are investing in America. And that is what we have to 
do, work together to invest in the future of America.
    And with that, I will go to the other part of my testimony.
    Under Secretary Torres Small, welcome, great seeing you, 
and I look forward to seeing you in my district in a couple 
weeks. I know you have deep expertise working with rural 
southwestern communities and understand the impact a single 
plant closure can have on our economies. Coal plants across the 
West are scheduled to shut down within the next 5 to 10 years 
across America, and most of those are in rural America. Within 
the transition, we must not forget about the hardworking rural 
communities that currently depend on coal plants for good-
paying jobs.
    Over the last few years, northern Arizona has been coping 
with the Navajo Generation Station closure, NGS, as one of the 
largest plants in the West. It generated 65 percent of the Hopi 
Tribe's budget and a large portion of the Navajo Tribe. We are 
expecting several more coal plant closures like this in 
northern Arizona over the next decade. There needs to be an 
acknowledgement in America that rural and urban depend on one 
another. It is not just one or the other, and that is 
important.
    Why in rural? Well, that closure is a regional closure. It 
is not a town or city closure. It is a closure for the school 
districts, the fire districts, the community colleges, the 
healthcare industry, and cities and towns throughout that 
region. It is imperative that we help these regions out in a 
larger context.
    And so I just hope that we start to acknowledge that here 
in the Committee. I know we care, all of us, about rural 
America, but we also have to show that we care. And so far, we 
have taken baby steps in that.
    Under Secretary Torres Small, how can we ensure we are 
adequately supporting rural communities as fossil fuel 
employers shut down and they seek to attract new employers, 
often in the renewable energy space? Are there specific farm 
bill programs that should be strengthened? Thank you.
    Ms. Torres Small. Thank you so much, Congressman 
O'Halleran, and for your question about the impact--well, for 
your question but also for your focus on communities. As 
markets transition and change, specifically with coal, we have 
seen Rural Development have a key role in this place both in 
terms of investing in new projects and electricity generation 
in nearby areas. But also one of the key factors for Rural 
Development is recognizing there are multiple facets of an 
economy, so focusing both in terms of creating jobs from an 
energy space but also what other local markets are out there 
that Rural Development can help invest in.
    To speak to the energy piece and how we can work to make 
sure we are investing in renewable energies in rural 
communities that have had a history of energy production, I 
will defer to Administrator McLean.
    Mr. McLean. Well, thank you very much. And thank you for 
mentioning the Navajo Tribal Utility. It is one of the longest-
serving relationships that the Rural Utilities Service and our 
predecessor Rural Electrification Administration has had and a 
relationship in water and telecommunications, as well as 
energy. And one of the projects we are very pleased to approve 
was a very major investment in Navajo Tribal Utility last year, 
a $235 million loan. And Navajo Tribal Utility is also one of 
those ten projects I referenced that utilizes Smart Utility 
Authority to be able to leverage their investments on electric 
smart grid investments to be able to extend broadband to the 
Tribal community. And they are also a good example of seizing 
the future because we have also made major investments in their 
solar operations, and they are looking for ways to export power 
to urban areas so that urban-rural mix and linkage is really 
evident there. And so we are grateful to this Committee for 
section 317 of the Rural Electrification Act, which allows us 
to invest in renewable energy projects that serve rural and 
non-rural customers, as well as hydro projects.
    So the Navajo Tribal Utility is managing a very difficult 
adjustment, but it is doing so, optimistically, with a view 
towards the future.
    Mr. O'Halleran. The Chairman's eyes are on me. I am going 
to have to yield back. Thank you very much.
    The Chairman. And thank you. And now the gentleman from 
Nebraska, Mr. Bacon, is now recognized for 5 minutes.
    Mr. Bacon. Thank you, Mr. Chairman.
    During the Presidential campaign, this President multiple 
times said he was going to be hostile to the fossil fuel 
industry of our country. He said he was going to cut fracking, 
he was going to reduce natural gas production, he was going to 
stop new leases on Federal lands, and he did this on the first 
day. So I have to respond to some of the comments made here on 
this.
    Two-thirds of the gas prices have gone up before the 
Ukraine invasion. Now, we have to be candid. The Ukraine 
invasion exacerbated what is going on here, but \2/3\ of this 
had already occurred. I can tell you the fossil fuel industry 
in our country knows they have a hostile Administration, and 
they have responded accordingly because they can't trust that 
their investments can be protected. And so I think that is as 
much of the backdrop here.
    With that said, I want to recognize the Under Secretary. 
Thank you for being here. Congratulations on your position. 
And, as you know, we have typically multiple hearings at once, 
so I have had to step in and out, so if I repeat any of this, I 
apologize. But it is good to see you. Thank you for your 
leadership.
    I will tell you, the numbers, I think the second most 
popular position or issue right now in our district is American 
energy independence. I would say inflation is probably the 
number one issue, but they are related obviously when you talk 
to--most folks in our district want energy independence. We 
want an all-of-the-above approach. They are not hostile to 
solar or wind, but they also know they need natural gas. They 
are looking for all of the above. They also want American 
innovation to contribute to that.
    With that said, I have met with the biofuels industry 
today, whether it is the corn producers, the soybean producers, 
or many of the folks who are in it, and they said that the 
Administration has not been keen on their industry in the 
biofuels or ethanol, that they feel like they are last place on 
this whole pecking order. What is your take on this? Because 
that is their impression. I heard it straight from them. They 
feel like they have no voice in this Administration, and they 
feel like they are last in the pecking order. How would you 
respond?
    Ms. Torres Small. Congressman Bacon, I know that Secretary 
Vilsack, as well as President Biden, are focused on the diverse 
portfolio that we need to be energy-independent and resilient. 
And biofuels is a key part of that. And I hope that the 
biofuels industry feels like they have a strong voice in Rural 
Development because we have been focusing a lot of energy to 
making sure--pun intended--to making sure that we are investing 
in that exact type of local market that really creates 
resiliency both when it comes to energy but also on the ground.
    When I was in Iowa getting to see Elite Octane, for 
example, and the work they were doing, their use, their 
reliance on a REAP grant to make their production more 
effective and efficient, I was really impressed by the work 
that they were doing and the impact that that was having on the 
community where I spoke with young engineers who were able to 
stay in their hometown because of that local economy.
    To speak a little bit more about some of the programs that 
we have to support biofuels, I will yield to Administrator 
Neal.
    Dr. Neal. Thank you. I appreciate the opportunity to speak 
more about this.
    Mr. Bacon. Thank you.
    Dr. Neal. We have a real commitment to homegrown biofuels 
in large part because they provide an opportunity to diversify 
our sources of fuel but also because they help support the 
producers in exactly the kinds of ways that we heard from the 
Under Secretary. So we see there are a number of opportunities 
there. We want to be able to support those through our variety 
of programs both for our producers but also for the technology 
and also for getting it to market as we think about the 
infrastructure necessary, for example, for higher blends to be 
available----
    Mr. Bacon. If I may just do a follow-up. I appreciate the 
words you are saying. I have just talked to like ten of these 
leaders from different, whether it is producers, corn, 
soybeans, and that is not the feedback I am getting, at least 
as of this morning. So I can't remember the date, I think it is 
June where the E15 mandate goes away. What are we doing? What 
is our response to that? Because I think that is really looming 
large on this industry, what is going to happen.
    Ms. Torres Small. Congressman Bacon, that is a really good 
question. And so when it comes to the science of the 
determinations about RFS, EPA is in charge of that. Rural 
Development has a key opportunity to make sure that we are 
supporting the business side of biofuels. And so as we look to 
this spring both where we look at the disbursement of that $700 
million in terms of impact from COVID-19 and then also opening 
the applications for the $100 million for the HBIIP program, I 
hope that we will be able to work hard to be there on the 
business side for biofuels.
    Mr. Bacon. I will just close with my last few seconds. 
Forty percent of our corn goes to ethanol, so this is huge, so 
this is such an important part of the Midwest economy. So I 
appreciate your commitment to that, thank you. I yield back, 
Mr. Chairman.
    The Chairman. Thank you. And now the gentleman from 
California, Mr. Carbajal, is now recognized for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chairman. And thank you to my 
friend and former colleague, Under Secretary Torres Small, for 
your testimony and to Dr. Neal and Mr. McLean for being here 
today. It is great to hear about USDA's commitment to fighting 
climate change and the steps already being taken. My district 
has already felt the devastating effects of climate change from 
severe droughts to intense wildfires. Investing in renewable 
energies and transitioning away from fossil fuels is crucial in 
mitigating the effects of climate change. I represent the rural 
communities, and you are right that rural communities need a 
seat at the table.
    Under Secretary Torres Small, can you walk me through Rural 
Development's process in identifying rural communities with the 
potential to lean into clean energy transition? What kind of 
outreach does Rural Development do, and how can Congress help 
ensure every rural community knows about these programs?
    Ms. Torres Small. Congressman Carbajal, it is so wonderful 
to see you. And I deeply appreciate your question about how we 
make sure that the programs within Rural Development, the 
opportunity within Rural Development, are truly reaching rural 
communities across the country. It is one of our special assets 
that we have 47 state offices and over 450 offices with people 
on the ground committed to that program delivery. And we talked 
a little bit today about the reinvestments that we have made in 
terms of staffing, which we certainly see as our greatest 
resource on the ground.
    And there is still work to do in terms of increasing that 
outreach. We are identifying places that we haven't reached out 
to in the past or communities that haven't received any type of 
Rural Development investment for the last 5 years. How do we 
now expand to make sure that no matter how small your community 
is or if you don't have a grant writer, which is the vast 
majority of the places where we work, that we are still 
reaching those communities and supporting their work through 
technical assistance?
    To speak about the outreach that is done on the energy 
side, I would love to actually tap in Administrator McLean to 
talk about that.
    Mr. McLean. Great. Well, yes, thank you very much. And we 
are very, very excited about the growth we have seen at the 
Rural Utilities Service in renewable projects, more between 
Fiscal Year 2020 and 2021. We more than doubled our level of 
dollar investments from just over $100 million to nearly $200 
million, a 50 percent increase in megawatts in the portfolio. 
And so renewable energy is taking off really across the 
country, and we are seeing that, as you say, Congressman, 
leaning into that, that communities are doing that.
    Also energy efficiency is another great inflation-fighter 
and very friendly to the environment because it takes 
traditional fuels 3 units of energy to produce 1 unit of 
electricity. If we could save 1 unit of electricity, we are 
saving 3 units of energy. And we are seeing programs like the 
Rural Energy Savings Program working with rural electric 
cooperatives and other utilities to be able to encourage 
relending for energy efficiency as being a real positive.
    The last fiscal year we were able to finance 16 individual 
solar projects at RUS, a microgrid project and a hydroelectric 
project, all growing the portfolio for renewables. And we are 
seeing interest grow. Our pipeline is filling with additional 
projects in that arena as well.
    Mr. Carbajal. Thank you. Under Secretary Torres Small, the 
need to invest in renewable energies is becoming more important 
than ever as it will allow the United States to be more energy-
independent, and we have seen global oil costs skyrocket 
because of the Russian attack on Ukraine. Can you expand on how 
biofuels can play a role in our national energy independence? 
How should we be weighing investments in different renewables 
through USDA programs, and how can we continue supporting the 
deployment of renewable energy sources in rural communities?
    Ms. Torres Small. I really appreciate this question because 
it shows how complex our energy portfolio is and will need to 
continue to be. There are all sorts of different energy uses, 
whether it is transportation or whether it is electricity, 
whether it is manufacturing. And the way that we invest in that 
is going to require different answers. And so a vital part of 
that is investment in biofuels, especially as we look at 
transportation, and that is why Rural Development has worked so 
hard to invest in those programs.
    And because we are out of time, I will just say HBIIP and 
$700 million for COVID-19 impacts are certainly a big place 
where we are doing that work.
    Mr. Carbajal. Thank you. I am out of time, Mr. Chairman. I 
yield back.
    The Chairman. Thank you. And now the gentleman from 
Indiana, Mr. Baird, is now recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman. I appreciate the 
opportunity to be here. I appreciate all the Under Secretary 
and the staff being here.
    As we are all feeling the pain when we fuel up at the pump, 
we see the increasing prices, and it just seems to me that now 
would be a bad time to remove some of the choices in our fuel 
supply chain. And by that I mean what is going to happen or 
what has happened when we do not correct for the Reid Vapor 
Pressure and provide for year-round use of E15 ahead of the 
June 1st deadline and sales cut off. So what is USDA and the 
broader Administration feel about doing or correcting this 
situation?
    Ms. Torres Small. We are focused on making sure we are 
delivering for the biofuels industry in the way Rural 
Development best knows how. So although we are not the 
decision-maker on some of the decisions you recently noted, we 
have a key opportunity to be there for biofuels producers in a 
few different ways. So we have talked a little bit about the 
$700 million, applications closed in February, payments should 
be coming online in late spring or early summer, as well as the 
investments in the technology that brings those higher blends 
to communities, so having the right gas pumps, for example. And 
the HBIIP program is the one that best can be there for 
communities in doing that work, so the investment of $100 
million there.
    In addition, the first biofuels production that I visited 
were recipients of REAP. And I think there is a really unique 
opportunity to align there where we are making the production 
of biofuels more energy-efficient and more economical in and of 
itself, whether it is a high-tech grain producer dryer to 
process for a biofuels plant or whether it is a low-tech but a 
replacement for a really old grain dryer on the farm that is 
making that work more energy-efficient and affordable for the 
farmer.
    To add some additional comments on the work for biofuels, I 
will defer to Administrator Neal.
    Dr. Neal. Thank you. I appreciate that question. I think 
one of the things I will just sort of highlight in addition to 
some of the comments that have been previously made is thinking 
about the variety of feedstocks that is available to go into 
biofuels. And I think what is one of the places where when we 
look at our work in REAP, when we look at our work in the 
section 9003 program, I think about biorefineries, what are the 
variety of feedstocks that are available that producers, 
frankly sometimes it may be even waste that can be used to turn 
waste or other kinds of feedstocks into fuel, into energy for 
the kinds of needs that we have.
    And so I think as we--in addition to thinking about 
supporting businesses through difficult times like we are doing 
with the Biofuel Producer Program, supporting producers as they 
grow the kinds of feedstocks that we need intentionally for the 
development of biofuels, as we think about the support of 
various technologies through REAP or through the section 9003 
program, I think it is also important to consider how a variety 
of different feedstocks from a variety of sources can be 
commercialized into production of biofuels, again, diversify 
the types of fuels that are out there and provide for more 
choices for people as they get where they need to go.
    Mr. Baird. Well, thank you for that. I really appreciate 
being able to look at different opportunities and make sure we 
bring all of those along at the same time.
    I do want to switch gears and look at another opportunity 
just to get a feel for how you and the Administration feel 
about it. But I am talking about methane digesters. They can 
really be used to turn a problem into an asset. And so I just 
want to know how the Administration feels about using methane 
digesters attached to livestock industry. A lot of those are 
terribly expensive. And so is there anything that you feel we 
could put in the farm bill that would help move that process 
forward?
    Ms. Torres Small. Congressman Baird, thank you so much for 
that question. It is something we haven't had a chance to talk 
about today but I think it is a really exciting investment. 
Both the Administration as well as of course Secretary Vilsack 
have expressed significant interest when it comes to methane 
digesters. And recognizing that there is a large gamut, whether 
it is a smaller digester or some of the bigger-scale ones that 
we are starting to see interest in now, there is key 
opportunities for them.
    And to speak a little bit more about that, I will defer to 
Administrator Neal.
    Dr. Neal. Yes, thank you. We are excited about the work 
that so many are doing with anaerobic digesters. Part of what 
we see is this can be funded through our REAP program but also 
through the section 9003 program, so, again, to accommodate the 
variety of sizes of different projects that are out there, I 
think that is important to have a variety of different choices 
of programs out there to support that work.
    One of the things that has also been interesting to track 
and to note is how the products from those digesters are being 
used. So in addition to seeing projects that might sell methane 
to produce electricity, we are also seeing things where they 
are selling gas directly to the pipeline, and then we are also 
beginning to see, particularly with some of our section 9003 
projects, places where there are digesters that are being used 
to make renewable chemicals. That is where we see a lot of 
opportunity in the renewable chemical sector.
    Mr. Baird. Thank you.
    The Chairman. And thank you so much. We are trying to get 
to everyone. I appreciate that.
    And now the gentlewoman from Washington, Ms. Schrier, is 
now recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman. And hello, Under 
Secretary Torres Small. It is wonderful to see again, and thank 
you again for taking the time to come out to Washington State 
in February to meet with my constituents and farmers.
    And I want to talk with you today about the Rural Energy 
for America or REAP program. REAP is an incredibly important 
program for farmers and businesses in Washington State and my 
district. And for the most part the program works well, but I 
would like to flag a few key issues and ask how we can make 
this program more effective.
    First, I know the program is significantly oversubscribed 
throughout the country. In Fiscal Year 2021, there was $1.1 
million in grant requests from Washington but only $752,000 or 
65 percent of those, was allocated.
    Second, I have heard concerns about REAP providing only 
reimbursements and covering only 25 percent of project costs, 
and that is an outlier. This can be a real equity barrier for 
smaller producers who may not be able to put up 100 percent of 
the project costs up-front or get a loan to be able to cover 
those up-front costs. And compared with similar programs, 25 
percent of the cost-share seems low. I know some of this may 
fall to Congress, but in order to serve more applicants and 
accelerate the adoption of renewable energy projects, I think 
we should look to increase this cost-share rate and increase 
the total funding available in the REAP program.
    Finally, I am concerned about farms and businesses in peri-
urban and ex-urban areas. Case in point would be the farm that 
you and I visited together. Folks in Pierce County in my 
district are geographically not far from cities like Seattle 
and Tacoma, and thus may be excluded from participation. But 
the areas we live in, as you saw, practically speaking, are 
quite rural. And this will continue to be an issue as kind of 
urbanization encroaches on rural areas.
    So a question, Under Secretary Torres Small, I just want to 
ask how we can make REAP easier for folks to use, and is there 
a way that we can incorporate these peri-urban and ex-urban 
farmers and businesses in the program?
    Ms. Torres Small. Thank you so much for your careful 
attention to farmers and their needs and how we can best serve 
them through REAP. It certainly is something we are eager to 
provide technical assistance on as you look at the farm bill, 
recognizing that REAP is one of the most popular programs, and 
so that oversubscription that you mentioned, certainly we see 
it on the ground when folks are interested in the program. 
Also, when it comes to the cost-share piece, which really 
depends on the demographics of the application, and for that I 
will defer to Administrator Neal. And then also the access 
piece both when it comes to where something is located but also 
in terms of how do we just make it easier with the application 
process, which is something we are focusing a lot of attention 
on.
    So to speak more specifically to that, I will defer to 
Administrator Neal.
    Dr. Neal. Thank you again for the opportunity to speak 
about this. Just a couple things I would share. I think, one, 
in addition to providing technical assistance to make sure that 
folks are able to submit the applications, they feel comparable 
with that and they can submit ideally a competitive and high-
quality application, as we heard from Under Secretary Torres 
Small, I think we are looking at ways we can streamline the 
application process, make it more modernized. I think there are 
some ways that that can be done so that that not only makes it 
easier for the applicants but also frankly makes it faster, 
more efficient for us, for our team at RBCS to review those 
applications and score those applications. So we are looking at 
opportunities for that.
    We certainly welcome the opportunity to talk with you all, 
provide technical assistance around how the program could be 
structured in terms of cost-share and those kinds of things. 
And, as we think about the definitions of urban and really of 
rural and what that includes, we try to be very intentional 
around that to stay in the lines of where our authority is and 
so, again, we welcome the opportunity to follow up with you if 
you have particular questions about that.
    Ms. Schrier. I would love to follow up about that just 
because if our goals are to support family farms and to support 
renewable energy sources, reducing geographic limitations would 
be fantastic.
    I have 22 seconds remaining. I just want to mention the 
importance of including hydropower in USDA energy programs. The 
Pacific Northwest produces some of the cleanest, most 
affordable energy in the country, and as a Northwesterner, I 
would like to see that included.
    So thank you, and I yield back.
    The Chairman. Thank you, Ms. Schrier. And now, the 
gentleman from Ohio, Mr. Balderson, is now recognized for 5 
minutes.
    Mr. Balderson. Mr. Chairman, thank you very much. And, 
Madam Under Secretary, thank you again for being here.
    My first question is, as you mentioned briefly in your 
testimony, the 2018 Farm Bill mandated coordination between 
USDA and the Department of Energy on energy security issues. 
Could you expand on this coordination and what are some of the 
results that this has yielded?
    Ms. Torres Small. Thank you so much, Congressman, for that 
question. And it is certainly something that we are focused on. 
We entered into in MOU with the Department of Energy in 2019 
and actually have an upcoming meeting to further flesh out the 
opportunities there. But there are some key opportunities, 
whether it is looking at electric vehicles, for example, and 
the opportunities of joint investments and work there. 
Identifying priorities when it comes to cybersecurity is 
another potential that we have been looking into.
    And to speak to some of that additional work, I will defer 
to Administrator McLean.
    Mr. McLean. Yes, thank you very much. And, yes, thank you. 
The 2018 Farm Bill provision on the Memorandum of Understanding 
between USDA and DOE have been very productive. We have had 
numerous conversations, coordinations in particular areas about 
cybersecurity, renewable energy, de-carbonization, 
quantification of de-carbonization, going forward, and in terms 
of also the agenda to be able to finance charging stations in 
rural areas where we think that we can leverage our loan 
programs against the grant programs that the Department of 
Energy has.
    We notice, too, that the Department of Energy had a number 
of grant programs that will be eligible for applications among 
rural electric cooperatives, in particular out of the 
infrastructure bill, and we look forward to working with the 
Department of Energy to help leverage those resources with our 
borrower constituency and our stakeholders as well.
    Mr. Balderson. Okay. Thank you both very much. Under 
Secretary, my next question is I have met with several energy 
producers in Ohio that operate some renewable energy programs. 
While they say that renewables such as solar are great 
supplements, they go on to say that a complete transition to 
renewables would be unattainable and will make it impossible to 
serve all their customers. I think everyone on this Committee 
on both sides of the aisle knows that it is unrealistic to 
fully transition rural America to renewables as quickly as this 
Administration would like to. Can you discuss the specific 
challenges that such a transition will have on rural America 
and America's farmers?
    Ms. Torres Small. Yes, I think Rural Development has a 
unique perspective of this in a few ways, one of course working 
with farmers and recognizing the impacts of energy dependence 
in rural America, as well as some of the opportunities when it 
comes to energy diversification in rural America, but also when 
it comes to our long-standing work in electricity and working 
with rural electric co-ops and some of the efforts that they 
have made to diversify their energy portfolio.
    And so to speak a little bit more about that work and our 
unique perspective there, I will defer to Administrator McLean.
    Mr. McLean. Yes, thank you very much. And of course Rural 
Utilities Service's predecessor Rural Electrification 
Administration has a long-standing relationship with 
cooperatives and rural service providers in the State of Ohio. 
And one of the more exciting things that is happening in the 
industry is in the area of beneficial electrification where we 
are almost considering it as rural electrification 2.0 where we 
are able to see the transformation of carbon-dependent 
machinery, transportation, industrial uses, switching over to 
electricity. And so the application of time and of technology, 
investment, and incentives I think will be able to get us to 
that transition, but we are also seeing a lot of dedication 
from the good people who do provide that energy in the State of 
Ohio and elsewhere, again, many of them longtime customers of 
our agency.
    The Chairman. Does the gentleman yield back?
    Mr. Balderson. Yes, Mr. Chairman, I thank them, and I yield 
back my remaining time. Thank you.
    The Chairman. All right, thank you. And now the gentleman 
from California, Mr. Panetta, is now recognized for 5 minutes.
    Mr. Panetta. Great, thank you, Mr. Chairman. I appreciate 
this opportunity, and thank you for holding this important 
hearing.
    Dr. Neal, Mr. McLean, thank you very much for being here. 
You have to understand, though, it is going to be a lot of 
sentiment directed at Under Secretary Xochitl Torres Small 
because of how beloved she was as a Member of Congress and how 
good it is always to see her on Capitol Hill. So, Madam Under 
Secretary, welcome back. You are always welcome on Capitol 
Hill. Thank you for being here.
    I just want to talk to you about your testimony and what 
you addressed as energy security. You talked about a 
relationship between the USDA and the Department of Energy 
specifically dealing with funding on grid reliability. Let's 
focus on that right now and the partnership that you mentioned 
in your testimony. How is that going? Has it proven successful? 
And is there anything that we in Congress can do to support you 
and to support that relationship for grid security?
    Ms. Torres Small. Congressman Panetta, it is a joy, as 
always, to see you, and thank you so much for your kind remarks 
and for your focus on this partnership, which I think is really 
important and exciting. The first thing that you did, which the 
Congress did which I think was very helpful is requiring it in 
the 2018 Farm Bill. It got us to work in terms of that MOU. It 
got us to work in identifying the places where we can work 
together.
    And the focus on reliability, certainly, from your 
experience in California, is crucial as we look to make sure 
that we have good ways to monitor electricity delivery, for 
example, under threats of extreme weather, also as we look at 
that reliability when it comes to cybersecurity, and that is 
why also our investments in the Grid Security Division has been 
crucial in Rural Development.
    To speak a little bit more about that MOU, I will defer to 
Administrator McLean.
    Mr. McLean. Thank you very much. And yes, thank you for 
mentioning the relationship with the Department of Energy under 
the MOU. It has been a very productive and worthwhile 
engagement. We look to the Department of Energy for their 
scientific leadership, their innovation, and their 
demonstration projects. What we do at the Rural Utilities 
Service is we deploy the proven technologies. So those of you 
who know, Washington, D.C., we share 12th Street. The 
Department of Agriculture and the Department of Energy are 
next-door neighbors, and we look at that MOU as to being the 
bridge across 12th street to be able to take the innovation 
that the Department of Energy is working on, the technology 
advancements that they are working on and bringing to the 
marketplace, and bringing it across into implementation in 
rural America through the financing that we can provide at the 
Rural Utilities Service.
    Mr. Panetta. Okay.
    Mr. McLean. And with relationship to those grant programs 
the Department of Energy has, we would be delighted to be able 
to leverage our loan programs to be able to stretch them out to 
get further activities financed in rural areas.
    Mr. Panetta. Okay. Thank you. And let me move on to my next 
topic if I could, Madam Under Secretary. Look, obviously, 
administrating Rural Development programs, especially in 
California and in my district, we struggle because the 
designation of rural based on population density. And it 
impedes our ability for our communities and our farmers and 
ranchers to benefit from many of these programs. Madam Under 
Secretary, can you discuss the further need to revisit the 
definition of rural if you can and elaborate on how the current 
definition limits investment in rural economies?
    Ms. Torres Small. Congressman Panetta, thank you so much 
for your advocacy for your constituents. And I recognize the 
challenge that often the specifics of each program can have on 
the delivery and how each of your communities can access them. 
So Congresswoman Schrier also recently recognized this in terms 
of REAP. We stand poised to do what Congress tells us to do in 
this area and to provide all the technical assistance you might 
need as you address any challenges when it comes to 
accessibility to our programs.
    Mr. Panetta. Great. I look forward to working with you on 
that and many other issues as we approach the 2023 Farm Bill as 
well. Thank you for being here. Mr. Chairman, I yield back.
    The Chairman. Thank you. And now the gentleman from Kansas, 
Mr. Mann, is recognized for 5 minutes.
    Mr. Mann. Great. Thank you, Mr. Chairman. And, Madam Under 
Secretary and our other panelists, thank you for joining us 
here this morning.
    I represent the big 1st of Kansas, which is one of the 
largest ag-producing districts in the country. Last year, we 
did over about $10 billion in ag products, something that those 
of us in the district are very, very proud of. In Kansas we 
have around a dozen ethanol plants and biodiesel plants 
combined. The majority of those are in my district. And I think 
everyone would agree that these investments have been huge for 
rural economic development over the last few decades. It has 
been jobs. It means increased demand for corn and sorghum, 
which improves the base, which dramatically, immediately 
impacts main street and all of our rural communities. It also 
provides wet and dry distillers grain that are then fed in 
feedyards all over the district.
    Two weeks ago, I took Ranking Member Thompson, welcomed him 
to the district, we toured a feedyard, toured an ethanol plant, 
the largest ethanol producer in the district. And frankly, I 
would say that people in my district and the ethanol industry 
are baffled and frustrated by this war that they feel is being 
waged. And I agree with them on liquid fuels. We have seen the 
price of fuel increase, and that is the big part in my view on 
what is driving inflation, not the only thing but it is the 
biggest thing that is driving inflation and increasing the 
overall cost of things. The answer is right under our feet here 
in America and it is also growing in our fields all over the 
country today.
    A specific thing I think we could do right away would be 
year-round E15, which would increase demand, would provide some 
certainty for the market. So I guess my first question is: what 
is the Administration's position on year-round E15? Is that 
something that you support?
    Ms. Torres Small. Congressman Mann, thank you so much for 
that question and for your interest in the wide gamut of 
biofuels and ethanol and the opportunities across the board 
that they present. When it comes to E15, the decision-maker 
really is the EPA, and so Rural Development doesn't work in 
that space. We are focused, like you are, on the business side 
of the work that can be done there, and so we have talked about 
the programs that might support some of the production that is 
happening in your district. The piece that we haven't talked 
very much about is the BioPreferred Program, and I would love 
to discuss that with you as well as some point.
    Mr. Mann. I would love to do that as well.
    There seems to be this movement towards more electric 
vehicles. A term we say in our district is you can't plow with 
a Prius. I mean, the bottom line is we need diesel fuel, we 
need it today, and that is not going to change anytime soon. I 
guess a specific question is what can we do to make the cost of 
diesel fuel less so that operating this equipment that exists 
on our farms all over Kansas and around the country, we have to 
figure out how we can decrease the price of diesel fuel to make 
these operations more economic. Any thoughts on that?
    Ms. Torres Small. When it comes to Rural Development, I 
think the opportunities are investing in biodiesel, like you 
said, and how do we make sure that we are investing in new 
technologies to expand the impact that ethanol and biodiesel 
can have.
    Dr. Neal spoke briefly about the section 9003 program, 
which is about the innovations that are available within 
biofuels and how we can continue to support that so that, as we 
face continuing challenges when it comes to our energy supply, 
we will have those technologies to respond to.
    Mr. Mann. Great. And my last question, in what ways do you 
see how bioenergy can help the U.S. regain our energy 
independence? We were energy-independent. We are not anymore. 
That is absolutely in my view an immediately fixable problem. 
And what do you think is bioenergy's role to play in that?
    Ms. Torres Small. When COVID-19 hit, I think we recognized 
that energy independence can mean a lot of things. It certainly 
means how do we produce energy locally that we have access to, 
but it also recognizes a global impact when we look at pricing 
and the markets globally. And so when I think about energy 
independence or energy dependence in communities like Alaska 
where they are reliant on diesel fuels for 100 percent of their 
energy, electricity production, the way that we can respond to 
that is creating a more diverse energy portfolio, and biofuels 
are key part of that. I think that is how we work together to 
invest in that.
    Mr. Mann. Yes, I agree. Well, thank you for being here. And 
in my view, America is the freest country in the history of the 
world in large part because we have never had to rely on 
another country for our food. We also can be in a situation 
where we do not have to rely on another country for our energy, 
and we need to quickly return to that. It is right below our 
feet, growing right in our fields today, and I think our 
policies should reflect that. So thank you for being here. With 
that, I yield back. Thank you.
    The Chairman. Thank you, Mr. Mann. And now the gentlewoman 
from New Hampshire, Ms. Kuster, is now recognized for 5 
minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman, and thank you, 
Under Secretary Torres Small, for returning to our Committee to 
talk about the Energy Title of the farm bill and how rural 
America is transitioning to clean energy.
    And I want to thank you again for your trip to New 
Hampshire, broadband and clean energy, that was such a great 
success. We so appreciated you coming to visit the solar array 
in Franklin, New Hampshire, that is being developed with low-
interest loans from the Rural Utilities Service. And as you 
know well, this kind of strategic investment from USDA in clean 
energy supports our rural communities and the economy around 
us.
    As our nation transitions toward a clean-energy future, 
there is no question that rural America has a critical role to 
play in leading this charge. And I might say we will be less 
dependent on foreign sources of energy and less dependent on 
fossil fuels overall. This energy evolution of course includes 
wind, solar, hydropower near and dear to my heart--I think it 
is a dam good idea--but also wood energy as well. And it is 
especially key for New Hampshire as we are the second-most 
forested state in the country. Many Granite Staters, including 
my husband and myself have turned to woodstoves and wood pellet 
stoves and heaters to keep our homes and businesses warm during 
the winter. Wood heat is not only cleaner than fossil fuel 
alternatives, but it is energy that is grown locally in New 
England where we tend to be at the very end of the pipeline. 
Wood heat creates demand for low-grade wood, and keeping that 
market viable helps our family foresters stay in business.
    And to that end, last year, I joined Congresswoman Pingree 
to introduce legislation to double funding for the Community 
Wood Energy and Wood Innovation Grant Program and the Biomass 
Program in Rural Development's portfolio are critical as well.
    Madam Under Secretary, can you elaborate on how wood energy 
fits within USDA's Rural Development energy portfolio and how 
your programs enhance wood energy projects?
    Ms. Torres Small. Thank you so much, Congresswoman Kuster. 
It is lovely to see you again. And I really appreciate your 
question for a few reasons. One is that it shows how much 
looking at the local opportunities on the ground can also help 
us address our energy opportunities and challenges. And so when 
it comes to woody biomass, you certainly mentioned some of the 
programs within NRE (USDA Natural Resources and Environment) 
that can help provide support. And Rural Development stands 
poised to contribute to how we can stack those opportunities. 
So if there is a woody biomass funding coming from the Forest 
Service, we might be able to also support those efforts through 
a B&I guaranteed loan, for example, or some other support.
    And so to speak a little bit more to that, I will defer to 
Administrator Neal.
    Dr. Neal. Sure, thank you. So there are a couple things I 
would say. One, as we heard, there are opportunities sort of 
within our larger space for businesses just for business 
development. So we think about the Business and Industry 
Guaranteed Loan Program and other kinds of places that are not 
specific to the energy sector but can certainly contribute 
there and be supportive of the businesses in that sector.
    In addition of course there are programs that we have that 
are specific to the energy sector, specific to fuels. And we 
think about opportunities in REAP, opportunities in section 
9003. In these places, I mentioned earlier that REAP has 70 
percent of the applications and the awards there for grants are 
in solar, but there are other categories of technology that are 
absolutely competitive, and we welcome those applications. And 
in fact in some cases, depending on what the pool of projects 
is, there may even be discretionary points or other kinds of 
things awarded for underrepresented technologies so that those 
kinds of technologies that are often very competitive can make 
sure that they can get access to that funding as well.
    Ms. Kuster. Great. I am going to try to get one more quick 
one in. You talked in your testimony that there is more that we 
can do to improve USDA's rural energy programs by making 
applications more accessible and expanding technical 
assistance. Is USDA looking at steps to address this 
internally? And is there potential action that we in Congress 
need to take in the next farm bill to help streamline?
    Ms. Torres Small. Oh, Congresswoman Kuster, thank you so 
much for asking that question. It is one of the things that I 
am most interested in when it comes to Rural Development. I 
know I am in a rural community when I am talking to a group of 
people who care deeply about their home but none of them are 
grant writers. So we are working hard to identify the 
regulatory challenges that make applications more difficult, 
also just some of our standard practices that sometimes can 
make applications more difficult and also want to work with you 
if there are legislative barriers as well if you have technical 
questions on that.
    Ms. Kuster. Great. Nice job with the clock. Thank you so 
much. Again, we are so proud of you. And with that, I yield 
back.
    The Chairman. Yes, thank you very much. And now the 
gentlelady from Louisiana, Ms. Letlow, is now recognized for 5 
minutes.
    I think we are in the process of getting back in touch with 
Ms. Letlow. Mr. Feenstra, would you mind carrying on? You are 
recognized for 5 minutes.
    Mr. Feenstra. Thank you so much, Chairman Scott and Ranking 
Member Thompson. And, Madam Under Secretary, it is nice to see 
you again.
    In your testimony you speak to the importance and the 
effectiveness of E15. I really appreciate that. I really do. In 
fact, you say that ethanol displaced more than 500 million 
barrels of crude oil in 2021, which contributed efforts to 
protect America's energy independence, and that is amazing. And 
in Iowa, one out of every two rows of corn go to ethanol. And 
sometimes we forget about this, but we also have distillers 
grain that comes out of ethanol. Some people say we are using 
energy instead of food. That is very incorrect.
    But I want to get back to you. We have talked about year-
round E15, and I am just wondering, what can Rural Development 
do to help this E15 process to go year-round, and is there 
anything that you can do for the Administration or with the 
Administration to make this happen?
    Ms. Torres Small. Congressman, thank you so much for your 
question and just for your attentiveness throughout the 
hearing. I have seen you here and present and engaged the whole 
time, and that means--I know how valuable your time is. And I 
also appreciate your focus on biofuels. When I was in Iowa, I 
actually visited a biofuels producer that had an agreement to 
send their distillery grain to New Mexican cattle companies, so 
I recognize the impacts there across the board.
    And your question about E15 is really important. When it 
comes to the work that Rural Development does, we focus on that 
business side of things, so we are not the scientists 
determining when. We are not the courts determining when, if 
E15 can be used, but we want to make sure there is the 
technology on the ground to do that. And so the HBIIP program 
is crucial to get those gas pumps that can handle that fuel all 
across rural America to make it more accessible.
    Mr. Feenstra. Well, thank you. Thank you so much that. And 
you mentioned the $700 million program for biofuels that was 
authorized through the CARES Act over the last 2 years. Can you 
sort of in generalities provide an update on the program, sort 
of on the accounting side, how much money has been spent 
already and in essence how much is left if you somewhat know 
that?
    Ms. Torres Small. Yes, no, I appreciate the question 
because we have been working to get the money out the door, and 
we took some time to get it right. We issued a notice, 
identified some challenges with how we were measuring the 
impact that COVID-19 had on corn growers and other producers of 
biofuels, and so we shifted. We pivoted based on feedback that 
we got. And so applications closed in February, and we are 
expecting payments to go out in late spring or early summer.
    And to speak a little bit more specifically about those 
pivots, I will defer to Administrator Neal.
    Dr. Neal. Yes, thank you so much for mentioning that. I 
appreciate your mention of dried distillers grains in your 
question. That was in fact one of the pivots that we 
recognized. Initially, the program was specifically for those 
who had experienced losses due to ethanol production. We 
recognize that many of those firms had multiple streams of 
income, right? They were selling the distillers dried grains, 
they were selling CO2, they were doing other things 
as well, and they had contracts to do that, and they wanted to 
make sure that they were able to meet those obligations. And so 
we recognize that even though those companies were operating at 
a loss, they were still producing, but they were operating at a 
loss so that they can meet these other contracts. We wanted to 
make those pivots in place, put those pivots in place so that 
those kinds of firms could be in general eligible for this. And 
so on January 28th we published an amendment to the NOFA in 
response to that kind of feedback to open up that program and, 
again, make it responsive to what we are hearing from folks who 
are in this sector.
    Mr. Feenstra. Well, thank you so much. And as you both 
know, it is so important for the Midwest to have biofuels. And 
I get really concerned, obviously. I want year-round E15, and 
if you could pass that along to the Administration.
    But I was in a budget hearing on Monday, last Monday, and 
there is not one word about biofuels in the Administration's 
budget, and I get really concerned about that, as how serious 
is the Administration. And I know you can't answer that. But I 
will say thank you for all the Rural Development's help. I have 
seen it so much in my rural communities, and I greatly 
appreciate all the efforts. Thanks again. I yield back.
    The Chairman. Thank you. And now the gentleman from 
Florida, Mr. Lawson, is now recognized for his 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman and Ranking Member, for 
this hearing. And, Madam Under Secretary, I don't want to sound 
redundant, and this was something you answered a little bit 
earlier on. And I am saying it has been well-documented that 
many of the USDA conservation programs have applications that 
are sometimes very technical, very time-consuming. Because of 
this, an unequal number of large operators are benefitting from 
these programs while small and socially disadvantaged farmers 
and producers struggle to apply. How is the Rural Energy for 
America Program able to deal with this? Should we allow smaller 
producers some up-front assistance to work on these projects?
    Ms. Torres Small. Congressman Lawson, that is such a 
helpful question. And what I really appreciate about it is that 
you recognize that accessibility of our programs really is 
about equity, making sure that no matter who you are in rural 
America, you have access to these programs. If you don't have a 
grant writer, you still have access to these programs. And also 
Congress has done a really interesting job acknowledging that 
in recent funding as well, so if you look at the ReConnect 
Programs, additional component for technical assistance and 
administrative fees, that has been helpful. It was also 
available in some of the ARPA programs, as well as in proposed 
legislation with BBB, recognizing that a key part of the 
programs are the people that help deliver it and making sure 
that we are able and poised well to do that in a way that is 
accessible to everyone. So as we look at the farm bill and the 
ways to make REAP more accessible, recognizing that it is 
already oversubscribed, but we want to make sure it is equally 
accessible to folks really eager to provide technical 
assistance on that.
    Mr. Lawson. Okay, thank you. And, Madam Under Secretary, I 
have been on the Agriculture Committee almost 6 years now and 
because I have a lot of rural areas and I have always believed 
that agriculture is the springboard for everything that we have 
in society. As you know, there are several renewable energy 
programs that have been included in the farm bill and that 
receive little or no appropriation over the last couple years 
that I have been on. From your perspective, is Congress missing 
any key opportunity for funding these special programs? We talk 
about them all the time, but we don't fund them, and I just 
wanted to know your perspective on it.
    The Chairman. Good question.
    Ms. Torres Small. That is a great question, and we 
certainly--it is our job to fulfill what Congress asks us to 
fulfill, so I do want to make sure and communicate that. But as 
we recognize ways that we are reaching communities, we 
certainly see places where communities are asking for more, 
right, where we are tapped out and are happy to communicate 
that to Congress as you make your decisions in terms of 
funding.
    The other piece there, it is not just about funding but it 
is also about flexibility. So how do we take a bigger program 
and make sure that it speaks to a lot of different potential 
local ideas so we can respond and support that?
    To speak a little bit more to that, I will defer to 
Administrator Neal.
    Dr. Neal. Sure. I appreciate that question. It is an 
important topic. And I will maybe address that by thinking 
about maybe one program in particular, the Rural Energy Pilot 
Program, which is a pilot program that offers grants and 
financial assistance for rural communities as they develop 
their role to further develop renewable energy in their 
communities. One of the things I think that is really important 
about this program is it is driven by community partnerships, 
so it is really about what that community recognizes in terms 
of their assets and how they want to proceed in terms of their 
renewable energy future.
    And so that program, the letters of intent are actually 
coming up due on April 19th, and so we look forward to 
receiving those, and then there will be a second round. And 
part of what we think is good about having that two-step 
process is that that allows opportunity for feedback on that 
first letter of intent. You need to see sort of what is the 
thought, are there ways to strengthen this, how to make this 
align better with what the program priorities are and so that 
we would be able to get that feedback back and then, if they 
choose, submit a full completed application by the July 18th 
deadline.
    So as an example of how these kinds of programs can 
operate, I think REPP provides that, and we are, again, very 
pleased to see how that program--we have already had 
significant interest and look forward to seeing more of that.
    Mr. Lawson. Okay, thank you. This is great information. Mr. 
Chairman, I yield back.
    The Chairman. Thank you. And now the gentleman from South 
Dakota, Mr. Johnson, is recognized for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman. I would just note, 
having watched the Under Secretary today, it is a reminder of 
why so many of us enjoyed working with her, just a great 
passion for service, and our country is lucky to have your 
continued service, ma'am.
    I watched with interest Mr. Carbajal's discussions of 
energy security. And as we look toward the next farm bill, are 
there particular aspects that this Committee should keep in 
mind that together we can do to try to further energy security 
for this country?
    Ms. Torres Small. Thank you so much, Congressman Johnson, 
for your hard work and the opportunity to collaborate on this 
because I think there are some great places where obviously we 
will follow Congress's lead and investment in this. But when we 
look at resiliency, I think it really breaks down into a few 
things, right? It is being able to deliver electricity even in 
the face of extreme weather, right, and how do we make sure 
that both our energy generation, as well as our energy delivery 
is resilient in that manner. It is also resilient to 
cybersecurity, so recognizing that electricity is one of the 
only utilities that requires certain investments in cyber 
utility, and Rural Development has responded to that by 
allowing that to be included in the loan portfolio to prepare 
for some of that cybersecurity that is necessary. And then it 
is also about making sure that we are ready for the challenges 
of the future when it comes to diversifying our energy 
portfolio.
    I do want to make sure there are a few more specifics for 
you, and so I will defer to Administrator McLean.
    Mr. McLean. I think that, again, we have been very grateful 
for the strong support the Committee has shown the Rural 
Utilities Service and----
    The Chairman. Excuse me, Mr. McLean, we are having a little 
difficulty. Turn your microphone on.
    Mr. McLean. My apologies.
    The Chairman. Thank you.
    Mr. McLean. Any investment in infrastructure, whether it is 
water, telecommunications, broadband, electricity, is 
investments in reliability because that investment in 
infrastructure is more reliable, more efficient, safer, 
cleaner, more reliable than what it is replacing. And that is 
why there is a continuing need for the programs that this 
Committee has so valiantly provided for over the years and we 
hope will provide for into the future.
    And as we move towards this transition, we are all about 
adding to the capacity of energy production, whether it is 
through new and renewable sources with the addition of 
technology and innovation and addition of transmission capacity 
in order to move power from where it is generated, often in 
rural areas, to where it is needed sometimes in the suburban 
and urban areas as well.
    Mr. Johnson. So then maybe to shift gears a fair amount, I 
am just curious if any of you are hearing much from Members of 
Congress or other stakeholders about the new Carbon Utilization 
and Biogas Education Program, and what are you hearing?
    Ms. Torres Small. I love the curiosity. I think that is 
absolutely crucial because we have a lot of work that we are 
doing in the BioPreferred space, and I want to make sure that 
we are coordinating on that effort. So to speak a little bit 
more to that, I will defer to Administrator Neal.
    Dr. Neal. Yes, thank you for that question. I specifically 
want to talk to you just a little bit about the interagency 
working group on biogas, which we are working on along with 
Department of Energy and various others across the Federal 
family. There is significant opportunity there. That group has 
identified several priorities, things like standardizing 
digestive composition as a commodity that is recognized across 
the country, enhancing the ability to forecast emission 
reductions from anaerobic digestion, and reduction of 
regulatory barriers that might exist in that space. So thinking 
about that interagency working group and how all of these 
agencies within the Federal family can collaborate 
intentionally around the future for digesters and what the 
opportunities that technology presents I think is a real 
opportunity, and we are excited to be engaged very practically 
in that working group.
    Mr. Johnson. And I know it is early yet, so I wouldn't 
imagine that you have fully fleshed-out themes you are hearing, 
but are there certain things that are percolating up that 
people are particularly interested in and excited about, 
concerned about?
    Ms. Torres Small. Administrator Neal?
    Dr. Neal. Sure, yes, I think really it is some of those key 
priorities that we have identified that I just shared, things 
like standardization, understanding what the impact of 
digesters are, sort of recognizing--I think there is a very 
significant opportunity in recognizing the broad role of 
digesters, so sometimes we think a lot about gas products, but 
there are other kinds of products, things like renewable 
chemicals and those kinds of things that I think are going to 
be very important in the biobased sector as well. So there is a 
broad range of things, and that working group is well-
positioned to make progress in all of them.
    Mr. Johnson. Thank you. Mr. Chairman, I yield back.
    The Chairman. Thank you. And now the gentlewoman from 
Minnesota, Ms. Craig, is now recognized for 5 minutes.
    Ms. Craig. Thank you so much, Chairman Scott, and thank you 
to the Ranking Member. I want to also say thank you to the 
Under Secretary for coming back in front of us to talk about 
your important work at USDA and for your colleagues being here 
as well.
    Given rising fuel prices and energy prices, we know this is 
impacting the budgets of working families across our nation. It 
is my view that we need to be focused on immediate and 
impactful solutions that decrease energy prices, as well as 
increase U.S. energy independence. That is why I have been so 
focused on increasing the availability of U.S.-produced 
renewable biofuels, and it is why I support the Renewable 
Energy for America Program.
    First on biofuels, E15 back in Minnesota is selling 
anywhere from 15 to 45 cheaper per gallon than traditional 
gasoline right now. Multiple studies have shown that it reduces 
GHG emissions by more than 40 percent compared to traditional 
gasoline. We could replace every barrel of Russian oil with 
biofuels. But Minnesotans and Americans across the country are 
at risk of losing access, and this is so important in the 
Midwest, to this renewable fuel this summer if no action is 
taken soon to permit year-round sales of E15. That is why I led 
a bipartisan letter to the President last week with six 
bipartisan co-chairs of the Congressional Biofuels Caucus 
urging him to permit year-round sales using authority outlined 
in the Clean Air Act.
    Madam Under Secretary, I know you and Secretary Vilsack 
have been strong proponents of renewable biofuels within the 
Administration, so thank you for your leadership on that. Two 
questions for you on the topic. Can you give us any update here 
today on the perspective that you and the USDA leadership team 
are sharing with your counterparts within the Administration 
when it comes to allowing summer sales of E15?
    Ms. Torres Small. Thank you so much, Congresswoman Craig, 
for your advocacy for the biofuels industry and for your home. 
And certainly it was evident when I visited your district 
recently just to see how committed the entire community was to 
being part of a solution when it comes to energy resiliency. 
And so it was very inspiring for me to see that on the ground.
    And when it comes to the work that Rural Development does 
for biofuels, recognizing that it is and this time has 
reinforced that, a crucial component of our energy 
independence. And so the way we can support that is through the 
support of getting the technology on the ground to best deliver 
those biofuels and those higher blends of biofuels, as well as 
addressing some of the impacts that biofuels producers 
experienced in the midst of COVID-19.
    Ms. Craig. Well, we certainly hope you will pass it along 
within the full Administration, as well as the EPA, that 
Minnesotans are about to see fuel costs go up if the 
Administration doesn't act now, and we have an opportunity to 
act now.
    Along the infrastructure lines, can you give us a little 
bit of an update on the status of the $100 million 
infrastructure grant program that USDA announced in December of 
2021? And can you share an update on the $700 million for 
biofuels producers in particular?
    Ms. Torres Small. We have been working hard on this, and I 
really appreciate you bird-dogging it to make sure that it is 
delivered to the people who are working hard to fuel our 
country. So when it comes to the $100 million, that we expect 
to see before the end of spring, getting the application 
process open. And when it comes to the $700 million, as you 
know, the application closed at the end of February or within 
February, and so now we are working to get those payments out 
late spring or early summer.
    Ms. Craig. Great. And so thank you so much for your work on 
that important issue. As you all know, rural America plays a 
role in increasing rural energy and energy independence via the 
REAP program. So quickly, Madam Under Secretary, as you know, 
REAP supports producers through a bunch of different funding 
pools. With year-over-year changes in renewable energy system 
installment costs and recent inflationary pressure, does USDA 
believe it makes sense to increase that minimum funding pool 
threshold?
    Ms. Torres Small. It has been clear throughout this hearing 
just how interested folks are in REAP, and we see that on the 
ground, too. One of the things we have talked about is how it 
is oversubscribed, so any changes in terms of who can access 
and how much money can be used would certainly impact the broad 
pool of applicants. But I think there are a lot of ways we can 
work and follow Congress' discretion in terms of how they want 
to allocate those funds.
    Ms. Craig. Well, thank you so much. That answer will 
certainly help this Committee address possible changes ahead in 
the next farm bill. And with that, Madam Under Secretary, thank 
you for being with us. And, Mr. Chairman, I yield back.
    The Chairman. Thank you, Ms. Craig. And now the gentlelady 
from Minnesota, Mrs. Fischbach, is now recognized for her 5 
minutes.
    Mrs. Fischbach. Thank you, Mr. Chairman. And just building 
a little bit, Ms. Craig was talking about some of the biofuels 
and the ethanol from Minnesota. But, obviously gas prices are 
high, and I think it has been touched on a bit. I think maybe 
even maybe Mr. Davis had touched on it a little bit. But, what 
I am really interested is how to solve those high gas prices. 
And I think that biofuels is really a no-brainer in terms of 
providing domestically produced fuel, easing the price shocks 
at the pump, and I think even Congresswoman Craig had mentioned 
the difference in the price and reducing greenhouse gas 
emissions. And ethanol does provide, it reduces emissions, the 
infrastructure is there, and it really does need to be--just as 
a side note, really does need to be part of that discussion as 
we talk about renewable fuels. And sometimes I think it is 
forgotten, so I always like to mention that a little bit.
    But, Madam Under Secretary, what do you think is biofuels' 
role in reducing the price of gas?
    Ms. Torres Small. Congresswoman Fischbach, thank you so 
much for that question. And I deeply appreciate your comment 
that you are focused on how to best solve these challenges. I 
think Rural Development is a crucial partner in that and 
specifically in supporting biofuels. When it comes to 
decreasing the cost at the pump, having access to that energy 
independence is crucial, and certainly we see that when it 
comes to the production of biofuels, but also in terms of those 
long-term risks that we were talking about earlier and that you 
mentioned in terms of reducing emissions.
    To speak more about how biofuels can contribute both to the 
affordable component of energy as well as the resiliency, I 
will defer to my colleague, Administrator Neal.
    Dr. Neal. Thank you. I appreciate the opportunity to speak 
on this. I think one of the things that is important is for us 
to think--and Under Secretary Torres Small mentioned this as 
well, to think on the short-term basis and the long-term basis. 
And so we are thoughtful about programs like the Biofuel 
Producer Program, which is going to make sure that businesses 
that have been involved in this sector can continue to be 
productive, can continue to operate and function in the very 
near-term through those payments that will be coming in the 
early summer.
    In addition, we are investing in those kinds of 
technologies that make those fuels accessible to consumers and 
to businesses through programs like the HBIIP program, the 
Higher Blends Infrastructure Incentive Program, making sure 
that those infrastructure investments are in place, and then, 
again, thinking a little bit even more long-term is thinking 
about those technologies and what are the kinds of places where 
we can have a variety of technologies that, for instance, take 
advantage of a variety of feedstocks to make sure that those 
fuels, that we have options for fuels, going forward. So that 
could include the program like the REAP program or the 9003 
Program where, again, we are looking at technologies that are 
commercial technologies but may benefit from some additional 
support to make sure that those projects get off the ground and 
are successful.
    Mrs. Fischbach. And, Dr. Neal, maybe just you mentioned the 
payments, and I know that you had an exchange with Congressman 
Davis about the timing of the payments, if they are coming out. 
I think you said late spring and then maybe even in your 
response to me you said summer. And I guess maybe if you could 
explain to me just a little bit about what is the holdup? What 
is taking so long?
    Ms. Torres Small. Thank you so much. Just to emphasize that 
a lot of it has been being responsive to the industry, 
recognizing that there were pieces of the industry that we 
needed to learn a little bit more about in order to best 
support folks who were impacted by COVID-19 and really 
appreciate that feedback and that dialogue.
    And go ahead, Administrator Neal, in terms of additional--
--
    Dr. Neal. Yes, no, I appreciate that. That is exactly why, 
as you mentioned earlier, we had submitted an amendment to the 
notice in January to address exactly that kind of feedback, so 
recognizing, for example, that there were firms that operated, 
produced ethanol, they produced it at a loss so that they could 
meet contracts that they had for other kinds of products like 
dried distillers grains, like carbon dioxide, those kinds of 
things. And we wanted to make sure that those kinds of firms 
were also eligible for this program, so we made those changes 
in response to the comments that we got, that kind of feedback. 
It does take a bit of time to make sure that we go through and 
evaluate those applications. And I don't really want to call it 
a holdup. We just want to be diligent and want to make sure 
that we are responsive and responsible in the administration of 
this program.
    Mrs. Fischbach. All right, thank you. And, Mr. Chairman, I 
yield back.
    The Chairman. Thank you very much. And now the gentlelady 
from Illinois, Mrs. Bustos, who is also the Chair of the 
Subcommittee on General Farm Commodities and Risk Management, 
you are recognized for 5 minutes.
    Mrs. Bustos. Thank you very much, Mr. Chairman. And I also 
want to say thank you to our Under Secretary Torres Small, 
great to see you. Also thank you to Dr. Neal and Mr. McLean for 
getting together with all of us. Also, I want to say thank you 
for highlighting the fantastic renewable energy work that is 
going on in my home State of Illinois.
    I know you have gotten a lot of comments about E15. I will 
just join in real quickly, I don't have a question about it, 
but I want to promote year-round E15, very, very important to 
rural America. It is very, very important for a lot of reasons. 
I know Congressman Feenstra addressed it, Congresswoman Craig 
addressed it, so I just want to add on to show my support for 
that as well.
    So let me get into a couple questions here. The President's 
budget request for 2023 that was just released last week 
included $300 million for rural electric co-ops so they can 
transition from their infrastructure of fossil fuels to more 
renewables. And I will start with our Under Secretary and of 
course if Mr. McLean has anything to add, please do. But can 
you speak to the economic impact that this transition could 
have on rural America and also what sorts of new opportunities 
would this sort of robust, sustained investment bring about?
    Ms. Torres Small. Congresswoman Bustos, thank you so much 
for that question. It is something we have been talking a lot 
about and are very eager to continue to do this work. As you 
know, there was a larger proposal in Build Back Better that 
also has to do with our work with rural electric co-ops and how 
we can best support them in their work to advance renewable 
energy. When it comes to this investment, it is really an 
opportunity to showcase the impact that we can have when it 
comes to debt restructuring and loan modifications, and so we 
are excited to dive into that.
    And to speak a little bit more to that, I will defer to 
Administrator McLean.
    Mr. McLean. Yes, thank you very much. And thank you as 
well. I want to highlight we are very, very proud of the work 
that we are doing in Illinois, major renewable projects in 
Prairie State and Dresser, very big solar projects. And I think 
it is an exciting glimpse of what the future is and what the 
transition can lead to.
    But for rural electric cooperatives, as consumer-owned 
businesses, there aren't shareholders or investors to be able 
to absorb the cost of transition, so the resources proposed in 
the President's budget and proposed in the reconciliation bill 
are going to be very valuable, and we are going to put them to 
work as best we can to be able to facilitate that transition to 
be able to address those stranded investment costs that rural 
electric cooperatives uniquely face precisely because it is the 
consumers that are the owners of those business units.
    Mrs. Bustos. Very good. So let me get back onto this 
popular topic that you are hearing from the Midwestern Members 
of Congress here on about. So, Under Secretary Torres Small, in 
recent years, the USDA has stood up and implemented the Higher 
Blends Infrastructure Incentive Program. If you could, can you 
give us a bit of an overview of how this program was used by 
applicants and how that compares to USDA's goals for the 
program? And second, in retrospect, are there any changes to 
the program that the USDA would suggest should the program be 
continued through the farm bill?
    Ms. Torres Small. Thank you very much, Congresswoman 
Bustos. And to speak to that, not coming from the Midwest, I 
had to really learn what this infrastructure needed to look 
like to deliver the higher blends. But it truly is making those 
higher blends accessible across the United States through the 
technology, if it is the gas pump that is necessary to deliver 
it or beyond.
    So we have learned a lot from previous iterations of HBIIP, 
and we are applying some of those tools in this next phase, 
which will come online in the late spring. The applications 
will open. And to speak a little bit more about what we have 
learned, I will defer to Administrator Neal.
    Dr. Neal. Thank you for the opportunity to speak on that. 
And I think part of what we have learned is through--this is 
now the third iteration of this program that we have had. And 
one of the things is thinking about how it is administered. It 
has been administered sort of through the states and it has 
been administered nationally, and we have learned what the 
administrative costs are frankly for this program as well, 
making sure if there are environmental reviews, other kinds of 
support that are needed, to make sure that the funds are 
deployed effectively and appropriately, and we want to make 
sure that we are able to do that. And we have seen from the 
other iterations of the program what is necessary, and we are 
preparing to do that with this version of the program 
currently.
    Mrs. Bustos. Okay, thank you. Since I have a minute left, I 
am going to try to squeeze this in. Congresswoman Craig talked 
a little bit about the Renewable Energy for America Program 
that we call REAP. I want to drill down a little bit deeper. We 
have seen that it can be successful in serving different kinds 
of agricultural operations in different regions in the country. 
Mr. McLean, I am going to address this to you. Are there any 
changes that you would recommend be made to ensure that the 
program is accessible and useful for farmers, rural utilities, 
and small businesses?
    Ms. Torres Small. Congresswoman, if you don't mind, I am 
going to pass that over to Administrator Neal.
    Mrs. Bustos. Okay, sounds good. Thank you.
    Dr. Neal. No, I appreciate the opportunity to talk about 
that. I think REAP has been a popular and a long-standing 
program, and we definitely see opportunity for improvements. I 
think some of the kinds of things we would love to have, again, 
obviously more financial support because it is a very popular 
program. We have unfunded grants applications, some of which 
are very high quality we would love to be able to fund and we 
are not able to do so. We had a record year for the guaranteed 
loan program so, again, there is opportunity there. We also 
want to make sure that the program is administered well and 
modernized with increased flexibility and modernize our 
programs. And so we think there is opportunity in terms of the 
application process, providing technical support and assistance 
through our staffing. That, again, I think would make a real 
difference in the availability and accessibility of this 
program.
    Mrs. Bustos. Thank you, Dr. Neal. My time has expired, and 
I will yield back.
    The Chairman. Thank you. And now the gentlelady from 
Florida, Mrs. Cammack, you are now recognized for your 5 
minutes.
    Mrs. Cammack. I appreciate that. Thank you, Mr. Chairman, 
and thank you to our guests and witnesses for appearing here 
today.
    I echo the sentiments of several of my colleagues. Quite 
frankly, this is a very frustrating exercise because the real 
issues that are impacting rural America today are not being 
addressed here in this hearing. And so I have to voice that on 
behalf of my constituency and my producers, who many are 
suspending their operations because the cost of fuel has 
skyrocketed, and it is just no longer a viable option under 
these current circumstances when the price of diesel is over $5 
a gallon, $5 a gallon. In fact, it was $5.19 yesterday in my 
district. When it is that and we are now having a conversation 
of renewable energy opportunities in rural America, I think 
that screams how out of touch Washington, D.C., and this 
Administration is when it comes to the needs and wishes of the 
constituents that we represent.
    But I digress. I am going to just jump right into a supply 
chain question, Madam Under Secretary. This isn't our first 
rodeo with the enormous potential that we are talking about as 
it relates to renewable energy. But the future that this 
Administration seems intent on foisting on rural America, one 
that is really dependent on raw materials like copper, nickel, 
cobalt, lithium, all of which will require increases in 
production if this Administration's version of low-carbon 
future is to come to fruition.
    So at this time, the lion's share of lithium refining 
occurs in China, and a significant portion of the world's 
polysilicon, which is used to make the solar panels. This comes 
from the region which is under fire for gross human rights 
violations. Now, China is committing genocide, and this is 
something that is indisputable. There are numerous reports 
tying the companies extracting the polysilicon to power this 
Administration's bright, beautiful future to slave labor.
    Madam Under Secretary, what is your plan to protect rural 
communities and businesses from being exposed to these risks 
and evils in what they deem a future energy supply chain? And 
more broadly, what is the Administration's plan to increase 
extraction and refining of these raw materials domestically?
    Ms. Torres Small. Congresswoman, thank you for your 
question and for your focus on rural communities because when 
it comes to Rural Development, the work that we do is not the 
regulation side in terms of mining or in terms of production 
but more in terms of incentives, incentives for communities so 
they can identify what their opportunities are for energy 
resilience, what their opportunities are when it comes to 
affordable energy, as well as their opportunities when it comes 
to a clean energy future.
    And so Rural Development works hand-in-hand, whether it is 
with a rural electric co-op on the electricity side or whether 
it is a farmer when it comes to REAP or a Value-Added Producer 
Grant, for example. We are focused on responding to those local 
insights and how we can best support them in those efforts.
    So to speak a little bit more about the electricity 
diversification, I will defer to Administrator McLean.
    The Chairman. Mr. McLean, again, would you turn on your 
microphone?
    Mr. McLean. Apologies, Mr. Chairman.
    The Chairman. We all want to hear you. Thank you.
    Mr. McLean. Apologies. It is critical about building those 
very industries in the United States and not only looking for 
sources of those critical materials but finding ways to recover 
them from recyclable materials. And it is an across-government 
initiative, not highly focused at Rural Development, but we are 
aware of supply chain issues and are dealing with them as we 
roll out investments in rural electric infrastructure.
    Mrs. Cammack. So I only have 35 seconds, so I would love to 
do a follow-up on that, but I have to get to this second 
question because, quite frankly, the title of this hearing 
today is about rural America and renewable energy opportunities 
in rural America, keywords to me being rural America, which, 
again, I feel this Administration is woefully out of touch 
with. These are folks that their energy sources come from 
diesel primarily when you are talking about equipment. What are 
we doing to make sure that the cost of diesel and biodiesel is 
a viable option for these operations today?
    Ms. Torres Small. When it comes to diesel, I just left 
Alaska where 100 percent of some places' reliance on energy is 
produced through diesel generation. And so the importance that 
we have in terms of making diesel more affordable but also 
making other energy opportunities available is crucial. And so 
we will continue to work whether it is through HBIIP, whether 
it is through the 9003 Program to advance biodiesel 
opportunities, or whether it is through the CCC payments and 
the $700 million, we will continue to look to partner with you 
to make those more accessible.
    Mrs. Cammack. I appreciate that and yield back. Thank you.
    The Chairman. Thank you. And, clerk, may I check with you 
to make sure? I think we are all clear. There are no more 
questions from Members. And so thank you.
    I want to just thank you, Under Secretary Torres Small. 
What an informative, articulate, knowledgeable, and very 
helpful testimony that each of you have given. And I want to 
thank you. I want to thank also your Administrator Neal, 
excellent. Thank you for your testimony. And Administrator 
McLean, thank you for your testimony.
    And I want to thank my wonderful Members. As you can see, 
the depth of the questions that they have asked of you and your 
help let you know that is number one on this Committee, one of 
our major objectives is to make sure we take care of rural 
America. I am so proud that our Committee has launched now. We 
have taken a bold step in getting I think now it is $68 billion 
in total to finally bring rural broadband to America. I am 
proud of our Committee's work.
    And, as we move forward with our farm bill, your 
information has been so helpful in helping us to make sure we 
put together a great farm bill and that the interests and the 
challenges that we face with rural America are inclusive in our 
2023 Farm Bill.
    And so, Under Secretary, again, thank you. And now that you 
have concluded all of our questions in such an excellent way, 
we want to excuse you. But please, we have another panel. Don't 
go far. We will bring our second panel on in 5 minutes. And in 
order to allow you all to exit and have our other panel come 
in, we are going to take a 5 minute recess. And we will be 
right back with our second panel. Thank you, everyone.
    [Recess.]
    The Chairman. This Committee will now come to order.
    Our first witness for our second panel today is Mr. Andy 
Olsen, who is a Senior Policy Advocate for the Environmental 
Law & Policy Center.
    Our second witness today is Mr. Bill Cherrier, who is the 
Executive Vice President and Chief Executive Officer of the 
Central Iowa Power Cooperative, testifying on behalf of the 
National Rural Electric Cooperative Association.
    And our third witness today is Dr. Patrick Gruber, who is 
the Chief Executive Officer of Gevo, Incorporated.
    And our fourth and final witness today is Mr. Jay McKenna, 
who is the Chief Executive Officer of Nacero. And I hope I got 
everything reasonably correct and pronounced appropriately.
    So let us begin, Mr. Olsen, when you are ready. You can 
begin your testimony.

       STATEMENT OF ANDREW ``ANDY'' OLSEN, SENIOR POLICY 
         ADVOCATE, ENVIRONMENTAL LAW & POLICY CENTER, 
                          CHICAGO, IL

    Mr. Olsen. Thank you. Good afternoon, Chairman Scott, 
Ranking Member Thompson, and Members of the Committee. I am 
Andy Olsen, a Senior Policy Advocate with the Environmental Law 
& Policy Center, or ELPC. Thank you for inviting me to testify 
today.
    The ELPC has been involved in the Rural Energy for America 
Program since 2002, working with farm and energy groups around 
the country. The ELPC is a member of the Ag Energy Coalition, 
which leads with us in supporting REAP and other Energy Title 
programs. We have learned a few lessons along the way.
    REAP has always enjoyed bipartisan support perhaps because 
it serves every agricultural sector and has reached every 
state. REAP helps lower costs and generate new farm income. And 
REAP is popular. Demand for grants and loan guarantees exceeded 
funding by an average 4.5 times over the past 10 years. Over 
20,000 REAP awards have been made on a competitive basis since 
2003. Since 2014, REAP leveraged over $7 billion in private 
investment. REAP benefits the nation with more clean energy, 
stronger rural economies, and a healthier environment. Farmers 
and ranchers and rural small businesses of all types use REAP 
to harvest the wind and the sun to power their operations. They 
use energy efficiency to cut energy costs and waste. Biomass 
energy is also included in REAP, as well as hydropower. Rural 
electric cooperatives use REAP in their own facilities, as well 
as their members' facilities. Rural grocers use REAP to stay in 
business with better refrigeration, lighting, and other 
technologies that serves the whole community.
    However, significant changes are needed to update REAP to 
help the country face challenges, which we call REAP 3.0. The 
2023 Farm Bill should strengthen REAP to help de-carbonize 
energy sources and electrify energy usage. Reducing climate 
risks and increasing climate resilience increases our national 
security, especially among food producers. Climate risks are 
grave, but we can confront this clear and present danger.
    American farm groups recognize the threat of climate change 
and the need to act. Climate change is already a market factor 
as commodity buyers seek a lower carbon footprint, and REAP 
helps farmers deliver. REAP provides U.S. agriculture with the 
means to respond to climate disruption, while also taking part 
in the clean energy economy.
    To build on success, we recommend strengthening the Energy 
Audit and Renewable Energy Development Assistance Program 
within REAP. We have seen over and over that outreach and 
education efforts result in more projects. For example, the 
Mississippi and Iowa Farm Bureaus led effective REAP education 
and assistance programs that helped poultry growers, corn and 
bean growers, and many others to cut energy waste and costs. In 
Nebraska, outreach efforts resulted in hundreds of irrigation 
efficiency improvements that replaced diesel motors with 
efficient electric motors and often improve water efficiency to 
boot. REAP can contribute to the Congressional goals of 
retaining and recruiting young people in farming, as well as 
doing right by historically underserved producers. REAP 3.0 
proposes adding 25 percent to the cost-share for these 
agricultural producers.
    To improve access, REAP should be further simplified and 
include a streamlined rebate option for pre-approved 
technologies such as energy efficiency and smaller-scale 
renewables. Raising the threshold of the lowest tier in the 
three-tier application system would include more producers. To 
build on REAP's success, significantly increased funding is 
needed because now existing funds are spread thinly across the 
country. With additional funding, REAP can help agriculture in 
rural communities to adopt more climate solutions.
    We encourage Congress to substantially increase REAP 
mandatory funding to accelerate clean energy and energy 
efficiency investments across rural America. Consumers, 
including farmers, need reliable energy information on 
equipment to make informed choices. A farm ENERGY STAR program 
based on the EPA's ENERGY STAR would provide performance data 
and standards and drive technology improvements by product 
manufacturers. We recommend creating a reserve fund for 
underutilized renewable energy technologies in REAP to support 
a full range of clean energy options. The ELPC appreciates the 
bills that would strengthen and update REAP led by 
Representatives Pingree and Spanberger.
    With the adjustments described above and others, Congress 
can provide a major upgrade to REAP 3.0 to serve many national 
purposes with one program. My written testimony provides more 
detail and also mentions opportunities to improve other Energy 
Title programs.
    Importantly, America has the talent and the resources to 
overcome the many daunting challenges we now face. Now more 
than ever we need the American can-do spirit and to work 
together for the future of our country and people and ensure 
that rural America can play a leading role. We can do this. 
Thank you.
    [The prepared statement of Mr. Olsen follows:]

 Prepared Statement of Andrew ``Andy'' Olsen, Senior Policy Advocate, 
             Environmental Law & Policy Center, Chicago, IL
In support of the Rural Energy for America Program
    Good morning, Chairman Scott, Ranking Member Thompson, and Members 
of the Committee. I am Andy Olsen, a Senior Policy Advocate with the 
Environmental Law & Policy Center (ELPC), the Midwest's leading 
environmental legal advocacy and sustainability innovation 
organization. Thank you for inviting me to testify this morning.
    ELPC has been involved in the creation and continuation of the 
Rural Energy Program for America Program (REAP) since 2002. I have 
worked on rural energy since 2004 when I traveled the country talking 
about REAP with farm groups, REAP recipients and others. ELPC is also a 
member of the Ag Energy Coalition which leads with us in supporting 
REAP and other Farm Bill Energy Title Programs. We've learned a few 
lessons along the way.
    The Rural Energy for America Program (REAP) has always enjoyed 
bipartisan support. It serves America in many ways and can help the 
country cope with rising energy costs, climate risk, and rural economic 
growth. REAP is broadly beneficial; it serves every agricultural sector 
and has reached every state in the union. And with smaller farms 
struggling under dire conditions, REAP helps to lower costs and 
generate new farm income.
    REAP is a popular program with demand for grants and loan 
guarantees exceeding funding by an average 4.5 times over the past 10 
years. Over 20,000 awards for grants and loan guarantees have been made 
on a competitive basis since 2003. Since 2014 REAP leveraged over $7 
billion in private investment in rural America.
    Some examples of how REAP serves the country:

   Farmers and ranchers of all types have used REAP to harvest 
        the wind and the sun to power their operations and have used 
        energy efficiency to cut energy costs. In the process, 
        agriculture becomes more resilient to energy disruptions.

   Corn growers have used REAP extensively to modernize and 
        reduce energy waste.

   With REAP many syrup makers now use low energy molecular 
        sieves to reduce costs of heating sap.

   Rural electric cooperatives benefit from REAP in their own 
        and their members' facilities with an emphasis on efficient 
        energy use.

   Greenhouse growers have found REAP valuable for cutting 
        energy waste and costs.

   Local grocers have embraced REAP to better compete and to 
        stay in business with better refrigeration, lighting and other 
        technologies. Keeping doors open for local grocers and other 
        locally owned small businesses helps the entire community.

    By providing grants and loan guarantees to agricultural producers 
and rural small businesses for energy efficiency and renewable energy, 
REAP invests in rural America's future. Energy efficiency helps 
producers protect profitability by providing a hedge against rising 
energy costs. Renewable energy stabilizes energy costs over the long 
term. Many producers have used REAP to implement farmer-owned energy 
systems in rural areas. We can do more to substantially accelerate and 
broaden clean technology deployment.
    REAP benefits the nation with more clean energy, stronger rural 
economies and a healthier environment. Modernizing energy technologies 
also helps retain and recruit young people to farming.
    Significant changes are needed to update REAP to help the country 
face present challenges, which we call ``REAP 3.0.''
    The 2023 Farm Bill is an opportunity to expand and strengthen REAP 
to help de-carbonize energy sources and electrify energy usage. This 
has already happened for years under REAP and we can do more with 
program enhancements and increased funding. Reducing climate risks and 
increasing climate resilience increases national security--especially 
among food producers. The risks are grave but we can overcome them, 
pulling together to confront this clear and present danger.
    American farm groups recognize the threat of climate change to our 
future and the need to act. Climate change is already a competitive 
factor in commodity markets as buyers increasingly seek goods with a 
lower carbon footprint. REAP helps farmers lower their carbon footprint 
and meet market demand. REAP and other Energy Title programs provide 
U.S. agriculture a seat at the table to help confront and adapt to 
climate disruption while taking part in the clean energy economy. It's 
why the USDA identifies REAP as a top program for confronting climate 
change.
    We've seen over and over that outreach and education efforts result 
in more projects. For this reason, we recommend strengthening the 
Energy Audit and Renewable Energy Development Assistance program (EA/
REDA). EA/REDA provides grants to institutions such as universities, 
states, and rural electric cooperatives to provide these services and 
can serve more people better if funds were made available to nonprofits 
such as Energy Districts. To operate on the scale needed the EA/REDA 
set aside should be raised and program funds should be available year-
round. Applications addressing both energy efficiency and renewable 
energy in one project should be eligible to implement more projects. To 
bring more projects to fruition, technical assistance should be 
explicitly added as a function.
    Some examples from the states of effective education and outreach:

   From the early days groups such as the Mississippi Farm 
        Bureau promoted REAP to help poultry growers to increase their 
        profit margins with energy efficiency. Poultry groups use and 
        strongly support REAP to this day.

   The Iowa Farm Bureau led a very effective education and 
        outreach program that helped farmers use REAP for wind power, 
        energy efficiency and solar.

   In Nebraska outreach efforts have resulted in hundreds of 
        irrigation efficiency project improvements that replace diesel 
        motors with efficient electric motors and often improve water 
        efficiency.

    REAP can contribute to the Congressional goals of retaining and 
recruiting young people in farming as well as doing right by 
historically underserved producers. REAP 3.0 proposes adding 25% to the 
cost-share for these agricultural producers to advance on these goals 
and better serve the nation.
    REAP can reach more producers if we continue to simplify the 
application process. To further expand the reach of REAP, a streamlined 
rebate option would aid smaller operators and reduce the application 
burden. A REAP rebate would only be used for pre-approved technologies 
such as energy efficiency and smaller scale renewables. The rebate 
program would serve more qualified parties due to a simplified 
application and reduced application costs.
    The Committee can also simplify REAP applications by a simple 
adjustment in the three-tier application system added in the 2014 Farm 
Bill. Under the three-tier application system small projects, defined 
as grants of $20,000 and lower, have less complex application 
requirements. Given the time that's passed, experience gained and 
improvements in energy technologies, we recommend raising the threshold 
for the lower tier to $50,000. This will reduce application complexity 
for more farmers, ranchers and rural small businesses.
    To build on REAP's success, increased funding is needed to reach 
more agricultural producers and rural small businesses. REAP is popular 
and demand regularly exceeds funding. Existing funds are spread thin 
across the country and additional funding will help build more rural 
projects. With additional funding, REAP can provide more climate 
solutions while helping agriculture and rural communities to adapt to, 
and prosper in, a low carbon future.
    We encourage Congress to substantially increase REAP mandatory 
funding from $50 million to, at least, $500 million per year, via 
budget reconciliation. Funding should include an up-front investment of 
$1 billion to accelerate clean energy and energy efficiency investments 
across rural America. With higher funding the cost-share for grants 
should be 50% for all projects, commensurate with other USDA programs. 
Such funding levels are supported by a broad range of nearly 200 
stakeholders. If this is not accomplished via reconciliation, the Ag 
Committees and appropriators should expand REAP funding via the annual 
appropriations process and the upcoming farm bill.
    Consumers, including farmers, need reliable information on energy 
equipment to make informed choices. A ``Farm ENERGY STAR'' program 
based on the EPA's ENERGY STAR program would accelerate development and 
deployment of energy efficient technology. The program would provide 
performance data and standards, baseline energy use by sector, 
technology, product, etc. This focus will also help to drive technology 
improvements by product manufacturers.
    We, along with the Ag Energy Coalition, recommend creating a 
reserve fund for underutilized renewable energy technologies in REAP to 
support a full range of clean energy options for farmers and rural 
small businesses. Done right, the fund would grow markets that drive 
energy-saving innovation and lower costs for key technologies.
    ELPC appreciates the bills that would strengthen and update REAP 
submitted by Rep. Pingree and Rep. Spanberger. Rep. Spanberger's 
bipartisan REAP Improvement Act strengthens REAP resources and advances 
key concepts we need now for a significant REAP upgrade. Rep. Pingree's 
Agriculture Resilience Act provides important program innovations and 
funding vision
    Other Energy Title programs provide similar benefits. The Ag Energy 
Coalition recommends changes to the Biorefinery Assistance and Bio-
Preferred programs as follow:

   The Ag Energy Coalition recommends the Biobased Markets 
        Program would be more effective with additional funding, 
        directed outreach to small biobased businesses, options for 
        cost-share grants, creation of a minimum requirement for agency 
        biobased contracts, and lower minimum purchase price 
        thresholds.

   The Ag Energy Coalition recommends the Biorefinery 
        Assistance Program be strengthened by making explicit that USDA 
        must award loan guarantees to proven commercial enterprises 
        with strong applications, with fewer constraints for first of 
        their kind technology ventures and by making the program 
        feedstock neutral with a minimum greenhouse gas performance 
        measure and consideration for making sustainable aviation fuel 
        a higher priority.

    REAP is the ``Rural Energy for America Program.'' An important part 
of that is the ``for America'' part and REAP does serve the nation in 
many ways. With the adjustments described above, and others, Congress 
can provide to the American people a major upgrade to REAP 3.0 to serve 
many national purposes with one program.
    America has the talent and resources to overcome the many daunting 
challenges we now face. One resource we need to tap used to be called 
the ``American can-do spirit.'' Now, more than ever, we need that 
spirit and to work together for the future of our country and people 
and ensure that rural America can play a leading role. We can do this!

    The Chairman. Thank you. And now our second witness today 
is Mr. Bill Cherrier, who is the Executive Vice President and 
Chief Executive Officer of the Central Iowa Power Cooperative, 
testifying on behalf of the National Rural Electric Cooperative 
Association. Mr. Cherrier, please begin when you are ready.

    STATEMENT OF WILLIAM ``BILL'' CHERRIER, EXECUTIVE VICE 
   PRESIDENT AND CHIEF EXECUTIVE OFFICER, CENTRAL IOWA POWER 
   COOPERATIVE, DES MOINES, IA; ON BEHALF OF NATIONAL RURAL 
                     ELECTRIC COOPERATIVE 
                          ASSOCIATION

    Mr. Cherrier. Chairman Scott, Ranking Member Thompson, and 
Members of the Committee, thank you for the opportunity to 
testify today. On behalf of Central Iowa Power Cooperative, we 
sincerely appreciative the Committee's interest in rural energy 
issues.
    CIPCO is a generation and transmission electric cooperative 
in its 76th year of service providing electricity to member 
cooperative systems across Iowa. As a not-for-profit electric 
provider, CIPCO is committed to maintaining a system that 
provides safe, reliable, and affordable energy.
    I have three main themes in my testimony today. First, 
Rural Utilities Service loans are critical for affordable, 
reliable power to rural America and will be an important 
financing tool to help us maintain in these changing demands.
    The ongoing energy transition must be inclusive of all 
energy sources, both clean renewable technologies and 
traditional baseload power sources that provide reliability. 
Incentives to support this transition should be accessible to 
all electric utilities.
    Third, the USDA is a key partner for our not-for-profit 
electric cooperatives to serve our communities and provide 
benefits well beyond electrification.
    Going back to the RUS, CIPCO and electric cooperatives rely 
on RUS for loans and capital. They fund our major system 
investments, generation, and technology. While we have all 
refinanced and mortgaged loans at some point in our lives, RUS 
loans cannot be refinanced. Significantly higher interest rates 
make it challenging for co-ops to reinvest in the system and 
keep rates affordable.
    Only Congress can change this situation, and there is a 
bipartisan support for passage of H.R. 2244, the Flexible 
Financing for Rural America Act. This allows RUS electric loans 
to be refinanced without penalty. This essential step allows 
co-ops to focus on long-term stability, rates, and reinvestment 
in their communities.
    Second, CIPCO's diverse generation portfolio consists of 
wind, solar, hydro, landfill gas, natural gas, coal, and market 
purchases. Our portfolio has evolved significantly with wind 
energy growing from four percent in 2010 to 30 percent in 2021 
and coal dropping from 58 percent to 29 percent during that 
same period.
    CIPCO is also investing in solar energy. Just recently, we 
had the Wapello solar site for 100 megawatts commissioned, 
which supplies energy to 18,000 homes and businesses. And 
Independence Wind for 54 megawatts was also commissioned. Those 
were both done in 2021.
    Intermittent resources such as wind and solar must continue 
to be complemented and supported by always-available resources 
like coal and natural gas. System reliability depends on the 
ability to blend intermittent resources like wind and solar 
with firm, flexible, and dispatchable electric capacity.
    Unfortunately, the Federal tax credit structure prevents 
not-for-profit electric cooperatives like CIPCO from taking 
advantage of the tax benefit to directly build and own wind and 
solar generation assets. The direct pay incentives would level 
the playing field for all the electric providers, allowing 
equal access to a diverse power supply mix. We would have much 
more reliable participation among electric cooperatives with 
direct pay incentives.
    Finally, electric cooperatives were built by and belong to 
the communities that they serve. Through USDA's Rural 
Development and Loan and Grant Program, CIPCO works with local 
businesses and community groups to create jobs in rural areas. 
In 2020, CIPCO secured $8.7 million in ten loans and grants to 
support the development and expansion of local Iowa businesses 
and services, including small businesses in industrial, 
professional services, and healthcare fields. CIPCO is 
dedicated to delivering 24/7 energy that is affordable and 
reliable to our Iowa households, businesses, farms, and 
communities, there are nearly 900 electric cooperatives across 
the country with similar community-focused missions for the 
areas that they serve.
    As this Committee considers reauthorizing the farm bill, we 
look forward to continuing to work with you toward a shared 
goal of improving life in rural America. Thank you.
    [The prepared statement of Mr. Cherrier follows:]

    Prepared Statement of William ``Bill'' Cherrier, Executive Vice 
President and Chief Executive Officer, Central Iowa Power Cooperative, 
   Des Moines, IA; on Behalf of National Rural Electric Cooperative 
                              Association
Introduction
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the opportunity to testify. On behalf of 
Central Iowa Power Cooperative's (CIPCO) member-owners, we sincerely 
appreciate the Committee's interest in rural energy issues.
    My name is Bill Cherrier, and I am the Executive Vice President and 
CEO of Central Iowa Power Cooperative (CIPCO). CIPCO is a generation 
and transmission (G&T) electric cooperative in its 76th year of 
operation providing electricity to member cooperative systems across 
Iowa. CIPCO serves nearly 300,000 rural and urban residents and more 
than 13,000 small and large commercial and industrial accounts.
    Electric cooperatives return excess revenues to our consumer-
members. CIPCO is dedicated to efficient, cost-effective operations and 
has returned more than $120 million to our member distribution systems 
since its inception. This commitment to cost-effective measures has 
created steady, affordable electric rates at a time of great change in 
the energy industry.
    As a not-for-profit electric provider, CIPCO is committed to 
judiciously maintaining and growing a system that supplies safe, 
reliable, and affordable electricity around the clock. I offer the 
Committee a few key points based on CIPCO's experience and that of many 
other electric cooperatives:

   Rural Utilities Service (RUS) loans are critical to 
        providing affordable, reliable power to rural America.

   The ongoing energy transition must be inclusive of all 
        energy sources and incentives to support this transition should 
        be accessible to all electric utilities.

   USDA is a key partner with not-for-profit electric 
        cooperatives to serve our communities and provide benefits well 
        beyond electrification.
Access to Capital Through USDA Rural Utilities Service
    As urban areas began to electrify in the early 1900s, rural areas 
were being left behind. Rural community members recognized that the 
economics of the electric business were not working in their favor, so 
communities banded together to form electric cooperatives with the goal 
of powering rural homes, farms, and businesses. Using low-cost Rural 
Electrification Administration (REA) loans, cooperatives successfully 
electrified rural America and continue to provide reliable, affordable 
power to 42 million consumer-members in 48 states.
Rural Utilities Service (RUS)
    Today, Rural Utilities Service (RUS) loans are as critical as they 
were in the early days of electric cooperatives. Cooperatives rely on 
RUS loans for basic investments in poles and wires, but also to invest 
in new technology to make their systems smarter and more efficient. As 
not-for-profit, consumer-driven entities, access to capital is one of 
our greatest challenges. Our obligation to provide our members safe, 
reliable, affordable electricity is only achievable if we have access 
to the resources to build necessary infrastructure. RUS loans meet this 
critical need.
    The RUS Electric Loan Program relies on an annual appropriation 
from the agriculture appropriations bill. We are grateful for this 
Committee's support for robust funding and believe this strong support 
is recognition of the value of this financing to rural America and the 
reliability of electric cooperatives as borrowers. In fact, the RUS 
electric loan program generates revenue for the Federal Government--
approximately $214 million in FY 2021.
Loan Repricing
    Roughly 500 electric co-ops hold approximately $43 billion in RUS 
Electric Loans. Unlike a typical home mortgage, most of these RUS loans 
cannot be refinanced to take advantage of lower interest rates without 
penalty. As a result, many electric cooperatives still hold RUS debt 
with significantly higher interest rates than today's low rates, with 
few options for relief.
    Only Congress can change this situation and there is bipartisan 
support for passage of the H.R. 2244, the Flexible Financing for Rural 
America Act, to allow RUS electric loans to be refinanced without 
penalty. This essential step will give co-ops the flexibility to best 
manage their financial circumstances while focusing on cooperatives' 
long-term stability and that of the communities they serve. Refinancing 
to today's rates could return billions in interest savings back to 
rural communities in the coming decades. An electric cooperative with 
typical RUS debt could save $2 million per year in interest payments if 
it was to take advantage of current rates. Giving electric co-ops the 
flexibility to refinance existing RUS loans will enable them to meet 
the evolving needs of their consumer-members and continue their work as 
partners in the community's long-term economic future.
Loan Approval Backlog
    Electric cooperatives have experienced a significant slowdown in 
the processing of work order approvals for recent projects. There are 
two primary reasons for these delays: (1) RUS lost experienced 
environmental staff to retirement in 2020 and a significant amount of 
institutional knowledge was lost, and (2) little work was done by 
electric cooperatives in 2020 due to COVID. Subsequently, RUS has faced 
a significant increase in the number of projects that need 
environmental reviews. Some electric cooperatives were under 
contractual deadlines for their projects that forced them to abandon 
RUS financing even though it was more costly to do so. RUS has made 
progress in training new staff and the backlog of approvals has been 
reduced. We are hopeful that RUS can continue to reduce this queue and 
expedite the loan approval process going forward.
Maintaining Reliability While Reducing Emissions
    As a generation and transmission cooperative, CIPCO provides 
electricity to member distribution systems through owned assets and 
long-term power purchase agreements (PPAs)--contracts with third-party 
companies that own and operate the generation. CIPCO's diverse 
portfolio consists of wind, solar, hydro, landfill gas, natural gas, 
coal, and market purchases.
    CIPCO's generation portfolio has evolved significantly with wind 
energy growing from 4.1% in 2010 to 29.9% in 2021 and coal dropping 
from 58.4% to 29.3% during that same time period. CIPCO is also 
investing in solar energy, including the 100 megawatt (MW) Wapello 
Solar LLC PPA and the 100 MW Coggon Solar LLC PPA scheduled for 
completion next year. Additionally, the 54 MW Independence Winds PPA 
came online in 2021. At this time, CIPCO sells the Renewable Energy 
Certificates (RECs) associated with wind and solar purchases to further 
offset wholesale costs for member systems.
    As we look to the future, intermittent resources such as wind and 
solar must continue to be complemented and supported by always-
available baseload resources like coal and natural gas. System 
reliability depends on the ability to blend intermittent sources like 
wind and solar with firm, flexible, and dispatchable electric capacity. 
For this reason, CIPCO recently invested $85 million in our existing 
Summit Lake generation plant, adding efficient reciprocating-natural 
gas engines that serve peak electric demand. This investment 
complements our intermittent wind and solar resources while ensuring 
the baseload generation necessary to meet the 24/7 power needs of 
Iowans and businesses in CIPCO's service territory.
Parity for Financial Incentives
    As electric cooperatives across the country diversify their 
generation portfolios, it is critical that policymakers work 
constructively with industry to achieve these objectives while 
maintaining the exceptional reliability and affordability that American 
families and businesses expect and deserve. The Federal tax-credit 
structure prevents not-for-profit electric cooperatives like CIPCO from 
taking advantage of the tax benefit to directly build and own wind and 
solar generation assets. For cooperatives to reap any benefit from this 
transition, they must work with third parties that develop and own 
these assets. Direct-pay tax incentives would level the playing field 
for all electric providers, allowing co-op member systems and member-
owners down the line to have equal access to a diverse power supply 
mix.
Rural Energy Savings Program (RESP) and Rural Energy for America 
        Program (REAP)
    Through additional partnerships with USDA, electric cooperatives 
are able to bring energy efficiency measures to their members, many of 
whom would not be able to afford these improvements. The Rural Energy 
Savings Program (RESP) offers low-cost financing to electric 
cooperatives for the purpose of implementing energy efficiency projects 
at their members' homes. We support continued growth of this program. 
However, we have found that the administrative burden at small electric 
cooperatives with limited staff can sometimes hinder opportunities to 
expand home energy efficiency programs. As a result, we also support a 
proposal to allow a small portion of a RESP loan to be used for 
administrative costs.
    Additionally, the Rural Energy for America Program provides loans 
and grants to develop renewable energy systems and implement energy 
efficiency measures. Electric cooperatives have used REAP grants to 
partially finance community solar projects.
Consumer Benefits Beyond Electrification
    Rural electric cooperatives were built by and belong to the 
communities they serve. Given this legacy of putting people before 
profits, they are much more than electric utilities in these 
communities. With USDA as a key partner, CIPCO and other electric 
cooperatives across the country are investing in their communities, 
including closing the digital divide, supporting business growth and 
expansion, and developing smarter community infrastructure.
Rural Economic Development Loan & Grant Program (REDL&G)
    Through USDA's Rural Development Loan and Grant Program (REDL&G), 
CIPCO works with local businesses and other community groups to create 
jobs in rural areas. The program represents a mutually beneficial 
partnership between USDA, rural electric cooperatives, and local 
communities. In 2020, CIPCO secured $8.7 million in ten loans and 
grants to support the development and expansion of local Iowa 
businesses and services, including small businesses in the industrial, 
professional services, and healthcare fields.
Broadband and Smart Grid Connectivity
    USDA's Broadband Programs are essential to the rural communities we 
serve. More than 200 electric cooperatives are engaged in providing or 
deploying broadband to their consumers and up to 200 more are exploring 
the feasibility of providing broadband service independently or in 
partnerships. Affordable and reliable high-speed internet is critical 
for the health and growth of rural communities, providing connections 
for healthcare, telework, education, economic development, and so much 
more. Beyond connecting our students, families and businesses, fiber 
optic capabilities increasingly support enhancements to the electric 
grid. Smart grid technologies, often financed through the RUS electric 
program, provide electric cooperatives the ability to increase energy 
efficiency, reduce consumer bills and labor costs, and improve the 
overall electric system performance. Federal investment will continue 
to be important in our efforts to close the digital divide. We urge 
Congress to provide the oversight needed to ensure that federally 
funded broadband projects are built to the highest quality standards 
and will stand the test of time.
Preparing for Electric Vehicle Growth
    The market for electric vehicles is expanding rapidly and electric 
cooperatives across the country are working with the communities they 
serve to address electric vehicle charging needs. While electric 
cooperatives see opportunities for load growth, off-peak charging to 
flatten electric demand peaks, and increased engagement with their 
communities, there are also potential hurdles that we must navigate to 
ensure a smooth transition that retains the affordability and 
reliability of electricity.
    As detailed in a letter submitted by CIPCO's national trade 
organization, the National Rural Electric Cooperative Association 
(NRECA), to the Committee in advance of your recent electric vehicle 
hearing, planning for nationwide access to charging is complicated and 
charging solutions may look different in rural areas than urban 
centers. Consumer behavior, for example, will vary. Many urban drivers 
will commute to and from work and charge their vehicles at home. While 
commuters exist in rural areas, we will also see vehicles driving 
through our communities, including delivery and freight vehicles, 
drivers traveling long distances for work or vacation, and fleet 
warehouses. Co-ops will need to shape and manage the electric demand 
and supply for EVs around system needs and capacity, whether that 
includes upgrading grid infrastructure, securing additional capacity, 
or implementing price signals to balance the demand for electricity.
    The Federal Government can help facilitate this transition by 
providing financial support and technical expertise for EV charging 
infrastructure, including grid infrastructure. Access to data 
projecting EV penetration, particularly in rural areas, to help plan 
grid investments to match the growth will also be essential.
Conclusion
    CIPCO is dedicated to delivering 24/7 energy that is affordable and 
reliable to Iowa households, businesses, farms, and communities. Nearly 
900 electric cooperatives across the country have similar community-
focused missions for the areas that they serve. As this Committee 
considers reauthorizing the farm bill, we look forward to continuing to 
work with you toward our shared goal of improving life in rural 
America.

    The Chairman. Thank you, Mr. Cherrier. And now our third 
witness today is Dr. Patrick Gruber, who is the Chief Executive 
Officer of Gevo, Incorporated. Dr. Gruber, will you begin when 
you are ready?

STATEMENT OF PATRICK R. GRUBER, Ph.D., CHIEF EXECUTIVE OFFICER, 
                   GEVO, INC., ENGLEWOOD, CO

    Dr. Gruber. Thank you, Chairman Scott, Ranking Member 
Thompson, and all the Members of this Committee for the 
opportunity to provide testimony about renewable energy.
    Gevo is in the midst of commercializing drop-in hydrocarbon 
fuels. It is the next-generation jet-fueled gasoline and diesel 
fuel. Net-zero hydrocarbon drop-in fuels are what the 
marketplace is interested in, and so that is what we are all 
about.
    Now, in order to achieve net-zero fuels and chemicals, you 
need to do two things. One is replace the carbon by which that 
fuel is made and then replace the fossil-based energy that is 
used in the production process. Now, here is a concrete 
example. We are in the midst of designing our first world-scale 
net-zero fuel plant up in Lake Preston, South Dakota. We call 
it Net-Zero 1. It is expected to be operational in 2025. The 
total projected financed installed cost is expected to be about 
$900 million. It will take in about 35 million bushels per year 
of climate-smart corn. This is low-till/no-till corn. It will 
produce about 430 million pounds of protein and feed products. 
It is a very large amount, 30 million pounds of oil, and 50 
million gallons of net-zero jet fuel, 10 million gallons of 
gasoline and diesel fuel will all be products from this plant.
    Now, we are doing something unusual up there. We want a 
net-zero footprint. We don't want to use the grid electricity 
and natural gas if we can avoid it. Consequently, we are 
designing Net-Zero 1 to be off the grid. We are planning on 
building a 60 megawatt wind farm and an onsite water treatment 
anaerobic digestion plant that produces enough biogas to offset 
the need for fossil-based natural gas. We will also make green 
hydrogen. Lake Preston's future is going to be that it is a 
green energy hub.
    The lessons we are learning up in our net-zero designs 
apply to other existing ethanol plants. If we can de-carbonize 
their energy, we can add jet fuel and hydrocarbon production to 
those facilities as well. It is fundamentally about renewable 
energy and displacing fossil-based energy and natural gas.
    We believe that we can achieve a net-zero footprint because 
we use the Argonne GREET model to measure lifecycle emissions. 
Now, GREET is special because it takes into account the whole 
of the lifecycle all the way from capturing the CO2 
through growing practices and land use and energy used in 
production and the burning of fuels. We can get to a net-zero 
or even negative carbon footprint for these fuels, and that is 
measured at the tailpipe of a jet engine, which is amazing.
    We could drive the CI score down further if we use carbon 
capture and geological sequestration techniques or, get this, 
simply by using no-till corn, it would drive the footprint to 
be minus 30 across the whole of the lifecycle even after the 
fuel is burned if we had used renewable energy production along 
the way.
    Now, climate-smart agriculture, it makes a lot of sense. At 
Gevo, we intend to set up a business system that financially 
rewards farmers for using more sustainable ag practices. We 
think farmers should be paid for their corn and then be 
rewarded for the benefit of providing all of us in capturing 
carbon or improving sustainability through production 
processes. We had a press release about that today working with 
Farmers Edge, talking about how to use that data. It is 
available. We are going to figure out a way to monetize it and 
pay farmers for doing a good job.
    Because we get paid by lowering carbon scores, improving 
the carbon emissions, eliminating fossil-based carbon, there 
are lots of carbon-accounting models used around the world. We 
need to use the best. That is the Argonne GREET model. It is 
the gold standard. It is the foundation for others. It has the 
most current scientific data. It is the most complete model. 
There is a model in Europe called the EU REDII. It is the 
standard model. It follows the GREET model closely. So does 
Canada's model. The California model uses GREET, but they 
simplify the agricultural inputs with averages for crops. Now, 
the RFS model follows GREET kind of the way California does, 
but it hasn't been updated in roughly 15 years or so.
    There is a new model on the horizon called CORSIA (Carbon 
Offsetting and Reduction Scheme for International Aviation). It 
is partially developed in a national model, but it is an 
outlier. It doesn't allow for sequestration, nor does it take 
into account better land management practices or better 
agriculture practices.
    Now, since Argonne GREET is the foundational model for all 
the other models used around the world, we would like to see it 
used in policy here in the U.S. We would like to see 
improvements in the data for it, and USDA has a large role to 
play in making that happen down to the field level.
    The USDA and farmers have done a terrific job of helping to 
improve agriculture and rural economies over the last 30 years. 
As I go around the world and talk about biofuels, I wish the 
rest of the world understood this. They don't. It is not food 
versus fuel.
    The Chairman. You are right.
    Dr. Gruber. We can do both if we do this correctly and pay 
attention to it----
    The Chairman. Correct.
    Dr. Gruber.--and count things accurately and just be 
transparent in the data. That is what we want to do. Thank you 
very much.
    [The prepared statement of Dr. Gruber follows:]

    Prepared Statement of Patrick R. Gruber, Ph.D., Chief Executive 
                   Officer, Gevo, Inc., Englewood, CO
    Thank you, Chairman Scott, Ranking Member Thompson, and all the 
Members of this Committee for the opportunity to provide testimony 
about renewable energy. I am honored to share Gevo's perspective.
    I am here to talk about renewable resource-based fuels, chemicals 
and plastics made possible in part by climate-smart agricultural 
practices and access to renewable electricity and gas. Gevo's primary 
emphasis is sustainable aviation fuel because of the market demand. We 
have the ability and technology to produce net-zero footprint fuels, 
that are expected to help lower greenhouse gas emissions. Technologies 
have advanced: from renewable carbon, it is now possible to make drop-
in gasoline, diesel, and jet fuels, as well as many plastics and 
synthetic fibers. If the fossil raw materials are replaced with 
renewable carbon, and the energy used for production is renewable, then 
it is possible to eliminate the fossil-based footprint from the 
products even accounting for the whole life cycle from carbon capture, 
through production, and ultimate burning.
    Whenever we are trying to solve problems, it is always good to 
start with fundamental data. This chart from the U.S. EPA 
(Environmental Protection Agency) shows U.S. greenhouse gas emissions.
Burning of Fossil Energy Creates the Vast Majority of GHG Emissions in 
        U.S.
We can catalyze improvements in agriculture and food production, 
        renewable energy infrastructure and production
U.S. Greenhouse Gas Emissions by Economic Sector, 1990-2019


          Source: U.S. EPA's Inventory of U.S. Greenhouse Gas Emissions 
        and Sinks, 1990-2019; https://www.epa.gov/ghgemissions/
        inventory-us-greenhouse-gas-emissions-and-sinks.
          Source: https://cfpub.epa.gov/ghgdata/inventoryexplorer/.

    In the U.S., roughly 75% of greenhouse gas emissions come from 
fossil fuels used in transportation, electricity production, and 
industry. Roughly 10% comes from agriculture, which includes land use 
changes, energy used in production of crops, and emissions from 
animals. The big problem is fossil-based energy in all its forms. We 
need to replace it. Since we need renewable carbon for making 
Sustainable Aviation Fuel (SAF), chemicals, plastics, and other 
hydrocarbon fuels and photosynthesis is the most cost-effective way to 
capture renewable carbon. We must pay close attention to what is done 
in agriculture. There is a fundamental belief that we have: when using 
agricultural land, priority must always be on food first. Always. When 
talking about food, it is nutrition that is most important. Nutrition 
is about protein. Land should be used to produce protein. Using corn as 
a feedstock, large quantities of protein and carbohydrates are produced 
as well as some oil. Protein and oil need to go to the food chain, 
carbohydrates, that have little to no nutritional value, make sense to 
use as feedstocks for fuels, chemicals, and plastics.
How To Achieve Net-Zero SAF: Eliminate Fossil Based Energy and Capture 
        Renewable Carbon
        
        
          As calculated by Argonne GREET model.

    To drive SAF to a net-zero carbon footprint we need two things: 
sustainably produced renewable carbon, and renewable energy for the 
production processes. We believe the entire lifecycle must be accounted 
for, audited, and reported--from field to combustion. This means 
capturing data at the field level, being specific about the 
agricultural practices used in production of crops, being specific 
about land use changes, about changes to soil carbon, about the sources 
of energy used in manufacturing. Collecting and reporting factual data 
is what enables proper decision making. In the industry we talk about 
fossil-based GHG reductions as Carbon Intensity Score reductions or 
simple CI for short.
    A real example can make this all more concrete: We've been 
developing the concept of a Net-Zero manufacturing plant for SAF. A 
Net-Zero plant is one that can produce net-zero GHG footprint products. 
We call the first plant Net-Zero 1 or NZ1. NZ1 is planned to be built 
in Lake Preston South Dakota, a town of 700 or so people. We've already 
proven that the technologies work; we are in the middle of engineering 
it. We expect it to be operational in 2025. The total installed, 
financed cost is currently projected to be about $900 million dollars. 
(I suspect we are about to dramatically improve the lives of the people 
in and around Lake Preston). NZ1 currently is planned to take in 35 
million bushels of climate-smart corn (produced with low till or no 
till technologies), separate the protein and oil sending it to the food 
chain, and using the carbohydrate to feed a fermentation to produce an 
intermediate ethanol feed which then goes into the hydrocarbon chemical 
plant to make the fuel. We expect to produce about 430 million pounds 
of protein products for animal feed and the food industry, about 30 
million pounds of corn oil, and 60 million gallons per year of 
hydrocarbon fuels products, with the vast majority being SAF. NZ1 is 
being designed to be ``off the grid''. We don't want to use grid 
electricity, it's too dirty, nor do we want to use natural gas for the 
same reason. NZ1 will have what we call an ``energy complex'' as part 
of the project. This would include a 60 megawatt wind farm, and our own 
water treatment plant, that produces enough biogas to offset the need 
for fossil-based natural gas. We also plan to produce green hydrogen 
with excess wind capacity. The investment in renewable energy is in the 
range of another couple hundred million dollars, and currently is 
planned to be deployed by partners. It's the integration of the energy 
complex into the production processes, optimizing the entire system for 
driving the CI score down that enables a net-zero end product.
Net-Zero 1 *: Being Engineered Now--Expected To Be Operating in 2025
One site, Multiple ``Off-the-Grid'' ** integrated plants: Mill, 
        Protein, Oil, Chemical, and Hydrocarbon Plant
Projected Net-Zero 1 Project EBITDA: $150-$200M/yr (Based on current 
        assumptions) ***, $900M Total Capex (financed and installed)
Site: Lake Preston, SD


          * Currently planned for Lake Preston, SD volumes of inputs 
        and products to change.
          ** The plant would be connected to the grid to supply energy 
        to the grids, and also to take energy from the grids if needed. 
        The plant is being designed to be self sufficient for its 
        energy between what can be generated on-site and from the 
        planned off-site wind farm. Gevo may also bring RNG to the 
        plant from its RNG project. The financial projections on this 
        slide are based on certain assumptions such as corn price, oil 
        price, protein price, carbon value, and others that can change. 
        The financial projections are also based on current engineering 
        and design work completed to date which work has approximately 
        a plus/minus 50% error bar.
          *** Estimated based on current assumptions, including those 
        around future commodity pricing and future environmental 
        benefit credit values, and preliminary engineering work.

    So how do we measure GHG's and improvements? We use the Argonne 
GREET model. It is the most scientific and vetted model. It is the 
basis for all models used around the world today to count carbon 
through the full lifecycle. Using this GREET model, this is what the 
greenhouse gas emissions look like for our products produced at an NZ 
plant.
Net-Zero Project GHG Sources (Base Case)


          Note: Gevo is actively working with Argonne to publish GHG 
        values for Net-Zero 1 and future plants.

            (1)  Better management defined by Argonne on average as low 
        farming 
                CI, and sustainable farming practices like cover 
        crops.*
---------------------------------------------------------------------------
    * Editor's note: there is no reference (1) in the chart, it has 
been reproduced herein as submitted.

            (2)  Depending on corn portfolio Gevo has, 
        ^31gCO2[e]/MJ value 
                shown here will vary between 0 and ^62. On average Gevo 
        is as-
                suming a conservative portfolio that mainly sources 
        low-tillage 
---------------------------------------------------------------------------
                corn.

    [The] calculation includes land use, climate-smart ag practices for 
growing corn, and renewable resource-based energy inputs allowing our 
NZ1 total carbon intensity score to be reduced to approximately 
negative 5. It is possible to drive the footprint even lower: our 
business system could capture more carbon in the soil, or we could 
capture the CO2 emissions from the plant and geologically 
sequester them. If we were to use geological sequestration, then the CI 
score would drop further, potentially to negative 40. Keep in mind this 
is after it's been burned as jet fuel. The SAF in a tank at our plant 
would be negative 90 or more CI score. It is literally renewable energy 
in a tank and can readily be transported with existing infrastructure. 
The renewable energy can be used for engines as discussed so far, or 
even be used to feed generators to produce low GHG electricity. We also 
plan to make chemicals that go into plastics and durable goods. Using a 
NZ business system, the CI score of chemicals we could supply would be 
expected to be strongly carbon negative, so long as they aren't burned 
at their end of their life. We plan to sell primarily jet fuel, some 
gasoline and diesel fuel because these products have clear value in the 
marketplace. Chemical products and materials markets generally aren't 
valued for CI score reductions yet.
Which of These Fields Has a Better Sustainability Footprint?


            (1)  Assumes renewable energy is used in manufacturing and 
        cal-
                culated using Argonne GREET.

            (2)  Thompson, N., et al. (2021) ``Opportunities and 
        Challenges Asso-
                ciated with `Carbon Farming' for U.S. Row-Crop 
        Producers'', Pur-
                due University Center for Commercial Agriculture. 
        Accessed on 
                August 12, 2021 at https://ag.purdue.edu/commercialag/
        home/re
                source/2021/06/opportunities-and-challenges-associated-
        with-car
                bon-farming-for-u-s-row-crop-producers/. Image 
        available on same 
                site, powered by Bing, GeoNames, Microsoft, and TomTom.

    For the sake of our land, food production, and carbon reduction: 
Agricultural practices are incredibly important to get right. Right 
now, only 50% of the cropland uses no till or low till practices. 
According to Purdue University, if everyone used low till or no till, 
we'd could save about 2% of the total greenhouse gas emissions of the 
United States--just through agricultural alone. With more advanced 
techniques, it could be possible to capture even more carbon in the 
soil. We intend to set up a system that rewards farmers for using 
climate-smart agricultural practices. Low till and no till allow the 
root systems of crops to remain intact and that means nutrients stay in 
the soil, water is retained, and it takes less chemicals per unit of 
product produced. It's a win all the way around for farmers who can 
make more money by producing and selling products that provide food, 
fiber, and sequester carbon simultaneously. Programs should be designed 
to recognize and reward these practices through the value chain.
    Given the yield improvements in corn we don't see a need to 
increase the amount of land used for farming. Consider that with the 
projected yield improvements in corn by 2040, approximately 5 billion 
gallons of SAF could be produced, along with about 35 billion lbs of 
protein for the food chain with no land use change. If we de-carbonized 
existing ethanol plants with renewable energy and our NZ concepts, then 
that ethanol capacity could at least in part be converted to SAF 
production, giving a market to ethanol amid a long run shrinking 
gasoline market.
    Because carbon accounting is critical to success, we must have 
accurate, fact-based measurements of carbon throughout the whole life 
cycle. The GREET model is the go-to standard. It has the most current 
scientific data, it's the most complete with the most up to data. I 
congratulate the USDA and the DOE for collaborating effectively in 
putting the agriculture data into GREET.
Argonne GREET Model Is the Go To Standard for Continuing Carbon
How Regulations/Programs Are Compared to GREET LCA


          This graphic reflects current regulations as of March 2022.

    On this chart you see a variety of models for counting carbon. All 
of these are based on the GREET model as a starting point. EU REDII is 
the standard European model for measuring carbon and it follows the 
GREET model through the full lifecycle. Canada does as well. The 
California model uses GREET, but they simplify the agricultural segment 
by using averages for corn and soybeans, not considering climate-smart 
ag practices, at this point. They would need to see specific data to 
make a change, I think. CORSIA is interesting in that it's a newer 
international model that doesn't allow for sequestration nor does it 
incentivize or account for better land management practices or better 
agricultural practices. It appears to be a biased model in my opinion, 
at least in these areas. As policy is developed, we would like to see 
the GREET model be the standard for domestic carbon accounting. Updated 
facts and science are what the GREET model uses and is the reason so 
many rely on it.
    The USDA has done a terrific job of helping to improve agriculture 
and rural economies over the last 30 years of my career, I wish that 
people could better understand this. The USDA is right on track with 
programs that promote climate-smart agricultural practices, counting 
carbon, and re-powering our rural communities, especially enabling 
access to renewable energy.
    To facilitate wider adoption of these practices, farmers need to 
have access to advanced equipment to help them lower their footprint, 
in addition re-instating the Rural Re-Powering Program is critical to 
producing net-zero hydrocarbons and in making carbon negative chemicals 
and materials for durable goods. Continued research at universities 
focused on soil science, how to improve agriculture, and measure more 
accurately what is happening at the field level, will help farmers 
adopt practices to improve their footprint. New net-zero products 
require the deployment of new capital and any programs that help defray 
the cost of that capital are welcome, so long as they are feedstock 
neutral, technology neutral and stand on merit.
    We appreciate the work that the USDA and the DOE have done on 
GREET. Going forward we think it is important for additional 
harmonization of models and data for counting carbon. We'd like to see 
program funding for measuring carbon to build out a National CI 
calculator, and more comprehensive systems for field to fuel tank 
accounting. These programs will harness the might of the U.S. 
agricultural system to positively impact climate change, sustainability 
of agriculture, energy security, and our food supply.
    Additional Resources:

          NET-ZERO 1 (1:52): https://vimeo.com/540736374
          Gevo--Solving Energy (2:00): https://vimeo.com/531083659
          Working Toward Zero Carbon Footprint (2:46): https://
        vimeo.com/440219829
          Food and Fuel (1:19): https://vimeo.com/440220247
          Where we are so far (1:21): https://vimeo.com/416215170 
          Our Process (1:01): https://vimeo.com/416215010
          Replacing Fossil-Based Carbon (2:07): https://vimeo.com/
        396232536
          Farming Carbon & Soil Conservation (1:54): https://vimeo.com/
        379773448
          Sustainable Jet Fuel (1:59): https://vimeo.com/379896308
          Partners with Mother Nature (1:49): https://vimeo.com/
        416215170
          Going After the Whole Gallon (0:50): https://vimeo.com/
        451342705
          We are Recycling Carbon (0:45): https://vimeo.com/451341985
          Our Circular Economy (0:48): https://vimeo.com/451341499
          www.gevo.com
                              [Attachment]





















    The Chairman. And thank you, Dr. Gruber. And now our fourth 
and final witness today is Mr. Jay McKenna, who is the Chief 
Executive Officer of Nacero. Mr. McKenna, please begin when you 
are ready.

   STATEMENT OF JOHN J. ``JAY'' McKENNA III, CHIEF EXECUTIVE 
               OFFICER, NACERO, INC., HOUSTON, TX

    Mr. McKenna. Thank you, Chairman Scott. There we go. Thank 
you, Chairman Scott, Ranking Member Thompson, and Members of 
the Committee, for holding this important hearing. My name is 
Jay McKenna, and I am the cofounder, CEO, and President of 
Nacero, a Houston-based company that is developing large-scale 
facilities to make affordable, low, and net-zero lifecycle 
carbon footprint gasoline from 100 percent domestic natural gas 
and renewable natural gas.
    Nacero will be the affordable climate solution for everyday 
drivers. Our gasoline will be retail-ready, ethanol-blend 
compliant, and usable in today's cars and trucks without 
modification. We will make it possible for everyday American 
drivers to economically reduce greenhouse gas emissions and 
strengthen American energy independence without having to 
change their behavior, buy a new car or truck, or pay more at 
the pump. Now, I want to emphasize this point. Nacero's fuels 
will drop directly into America's pipes, pumps, cars, and 
trucks without any modification.
    For a little bit of context, Americans drive about 3.2 
trillion miles per year, 3.2 trillion miles a year. This is 
equivalent to 500 roundtrips between the Earth and Pluto, the 
Earth and Pluto. That represents \1/2\ of an entire lightyear 
that we Americans drive annually. Now, we do it in vehicles 
that stay on the road for an average of 12 years or more, 
likely longer now, given our path to a longer economic recovery 
post-COVID and a lot of the problems facing everyday Americans 
today. As long as these vehicles stay on the road, we need to 
do everything we can to make a better fuel with a lower 
lifecycle carbon footprint.
    We at Nacero are building multiple large-scale modern 
manufacturing facilities that will use proven technology that 
incorporate carbon capture and run on 100 percent renewable-
sourced power. Our gasoline made from natural gas will have \1/
2\ the lifecycle scope 1, 2, 3 footprint versus traditional 
crude oil refining to make everyday gasoline. By incorporating 
renewable natural gas into our process, we can take that 
lifecycle carbon footprint all the way down to net-zero because 
capturing fugitive emissions is 80 times more potent from a 
greenhouse gas perspective over 20 years than normal combustion 
activities that produce CO2.
    The first of these facilities, a shovel-ready plant located 
outside of Odessa, Texas, will have the capacity to produce 1.4 
billion gallons per year of this low- and net-zero carbon 
footprint gasoline, which is about the amount able to serve 4.5 
million everyday Americans. It will support thousands of 
construction and operating jobs and generate $25 billion for 
the local, regional, and state community. This plant alone will 
displace the need for us to import around 200,000 barrels a day 
of crude oil, interestingly equivalent to the amount that the 
U.S., prior to the invasion of Ukraine, imported from Russia. 
This plant in west Texas alone will displace the need for that 
amount of imports. We plan to break ground later this year and 
look forward to building additional facilities across Texas, 
Pennsylvania, and the rest of the United States.
    America's farming community has much to gain with Nacero. 
We plan to be a major new consumer of renewable natural gas 
from dairy, swine, poultry, food waste, and landfill gas 
projects, materially growing demand for these critical 
resources. We forecast that each of our manufacturing plants 
would enable 100 new RNG anaerobic digester projects to be 
built, stimulating billions of dollars of additional new 
capital investment, creating thousands of jobs in rural 
America, but most importantly, generating substantial and 
recurring new income streams for the farming community. This is 
not pie-in-the-sky. The technology is proven, the market is 
there, and consumers are interested in low-carbon solutions.
    With Nacero, everyday drivers, especially those in farming 
communities and rural America, can play a critical role in 
making real climate progress while in parallel ushering a new 
era of domestic energy security. Now more than ever we need 
large-scale solutions that can help reduce prices at the pump 
while in parallel allowing us to achieve our climate goals.
    I appreciate the opportunity to speak to the Committee 
today and look forward to answering your questions.
    [The prepared statement of Mr. McKenna follows:]

  Prepared Statement of John J. ``Jay'' McKenna III, Chief Executive 
                   Officer, Nacero, Inc., Houston, TX
    Thank you, Chairman Scott, Ranking Member Thompson, and Members of 
the Committee for holding this important hearing. My name is Jay 
McKenna, and I am the co-founder and CEO of Nacero Inc., a Houston 
based company that is developing large-scale facilities that will make 
affordable, lower and net-zero lifecycle carbon footprint gasoline from 
100% domestic natural gas and renewable natural gas.
    Nacero will be the affordable climate solution for everyday 
drivers. Our gasoline will be ethanol blend-compliant and useable in 
today's cars and trucks without modification, thereby making it 
possible for everyday American drivers to economically reduce 
greenhouse gas emissions and strengthen American energy independence 
without having to change their habits, buy a new car, or pay more at 
the pump.
    I want to emphasize this point. Nacero's fuels drop directly into 
America's pipes, pumps, cars, and trucks without modification.
    Americans drive 3.2 trillion miles per year, the equivalent of 500 
round trips from Earth to Pluto, using vehicles that stay on the road 
for an average of 12 years, and potentially longer now given our longer 
road to economic recovery. As long as these vehicles are on the road, 
we need to do everything we can to make a better fuel with a lower 
lifecycle carbon footprint.
    We are building multiple large-scale manufacturing facilities that 
will use proven technology and incorporate carbon capture and 100% 
locally sourced renewable power. Our gasoline made from natural gas 
will have \1/2\ the lifecycle Scope 1, 2, and 3 carbon footprint of 
gasoline made from traditional crude oil refining. Incorporating 
renewable natural gas will bring lifecycle carbon footprint of our 
gasoline to net-zero.
    The first of these facilities, located outside of Odessa, TX will 
have the ability to serve 4.5 million everyday drivers, support 
thousands of construction and operating jobs, and generate $25 billion 
for the local and regional community. We plan to break ground later 
this year and are looking to build additional such facilities across 
Texas and the United States.
    America's farming community has much to gain. We plan to be a major 
new consumer of renewable natural gas from dairy, swine, poultry, food 
waste, and landfill gas projects, materially growing demand for these 
critical resources. We forecast that each of our facilities could 
support RNG demand from 75-100 new digester units, stimulating billions 
of dollars of new capital investment, creating thousands of new skilled 
jobs in rural America, and generating substantial new income streams 
for the farming community.
    This isn't pie in the sky. The technology is proven, the market is 
there, and consumers are interested now more than ever. With Nacero, 
everyday drivers, especially those in farming communities and rural 
America, can play a critical role in making real climate progress 
while, in parallel, ushering a new era of domestic energy security and 
economic prosperity.
    I greatly appreciate the opportunity speak to the Committee today 
and look forward to answering your questions.
                              [Attachment]
Lower and Net-Zero Lifecycle Carbon Footprint Gasoline from 100% 
        Domestic Natural Gas and Renewable Natural Gas
    It takes two barrels of crude oil, much of which is imported,\1\ to 
make one barrel of gasoline.\2\ The other barrel becomes byproducts, 
some of which have renewable alternatives, others of which have no 
market in the U.S. Using domestic natural gas to make gasoline avoids 
the production of crude oil refinery byproducts as well as the carbon 
drag associated with importing crude oil to make gasoline and exporting 
byproducts that cannot be sold here. Together they cut Scope 1-3 
emissions for the production of gasoline by half.\3\ Integrating carbon 
capture and renewable power and substituting renewable natural gas 
(RNG) from farms and landfills for conventional natural gas can take 
the Scope 1-3 lifecycle carbon footprint of gasoline made from natural 
gas to net-zero.\4\
---------------------------------------------------------------------------
    \1\ https://www.eia.gov/tools/faqs/faq.php?id=727&t=6.
    \2\ https://www.eia.gov/tools/faqs/faq.php?id=327&t=9.
    \3\ See report by Trinity Consultants dated March 2, 2021, 
commissioned by Nacero, Inc., the developer of the Penwell project, 
which found that the Scope 1-3 emissions of a natural gas to gasoline 
facility with a 93,000 bpd gasoline production capacity would have a 
25mm metric ton per year lifecycle carbon footprint and that a crude 
oil refinery of equivalent gasoline production capacity would have a 
lifecycle carbon footprint of 56M metric ton per year. https://
www.datocms-assets.com/41690/1617418475-carbon-savings-report.pdf.
    \4\ Nacero estimates that a 23/77 RNG/NG feedstock mix will bring 
the Penwell facility to net-zero.
---------------------------------------------------------------------------
    Compressed natural gas (CNG) has demonstrated the potential to put 
biomethane to beneficial use, to the benefit of both farmers and the 
environment. Gasoline has the potential to greatly increase its use 
because gasoline can be used in all cars and trucks without 
modification of the vehicle or the distribution network. Opening access 
to everyday drivers will increase demand for RNG while continuing to 
include ethanol and biofuels in our energy mix.
    Nacero's first facility, a shovel ready, 93,000 barrel per day 
natural gas and renewable natural gas to gasoline manufacturing 
facility in Penwell, Texas, 8 miles east of Odessa, could double demand 
for agricultural biogas and support billions of dollars of investment 
in 75 to 100 new digesters and the additional farm income they would 
produce.
    This scalable approach to lower and net-zero lifecycle carbon 
footprint gasoline also holds great promise for American energy 
independence and greenhouse gas reduction. Nacero's Penwell facility 
alone could reduce crude oil import demand by 200,000 barrels a day 
(the amount the U.S. imported from Russia prior to the embargo),\5\ and 
avoid up to 50 million tons per year of lifecycle CO2e 
emissions.\6\
---------------------------------------------------------------------------
    \5\ https://www.reuters.com/business/energy/us-imports-russian-oil-
refined-products-2022-03-08/. A 93,000 bpd gasoline refiner would 
consume 208,000 bpd of crude oil, as noted in the Trinity report and 
supported by EIA's crude-to-gasoline ratio (footnote 2).
    \6\ https://www.motortrend.com/news/gasoline-so-clean-its-like-
swapping-to-11-million-evs/.
---------------------------------------------------------------------------
    The technology is proven,\7\ the pipelines are in place, and 
construction and operation will create thousands of jobs and add 
billions to local economies.\8\
---------------------------------------------------------------------------
    \7\ https://www.topsoe.com/processes/synthetic-fuels/methane-rich-
gas-to-gasoline.
    \8\ The Bureau of Business Research, IC2 Institute, The University 
of Texas at Austin, ``Economic Assessment of Nacero's Planned 
Investment: State of Texas, Permian Basin, and Ector County Impacts, 
2022-2077,'' (2021). The Bureau of Business Research estimated $27.8Bn 
GDP impact to the regional economy through all construction and 
operational activities. EPCs bidding the project are currently 
estimating 1500 concurrent construction jobs and 350 operating jobs.

    The Chairman. I thank each of you very much. I tell you, we 
are certainly fortunate to have the wealth of knowledge that 
you all have expressed just in your opening statements here.
    And our Members, several of whom are online, they will be 
coming and going, but we are all very thankful that you all are 
here. And just from your opening statements, you all have 
certainly exposed how magnificently great this issue is. And we 
welcome you.
    And we will recognize Members in order of seniority and 
alternating between Democrats and Republicans and each will be 
recognized for 5 minutes in order for us to get all of our 
questions in. And your lights will light up with a yellow light 
when you have 60 seconds to go. And I can't thank you enough. 
And just from what you have just shared with us lets us know 
how opportunistic this is but also how challenging and complex 
this issue is.
    And we on this House Agriculture Committee are quite 
capable of rising to the occasion to make sure that the 
information that you are bringing to us is incorporated into 
our 2023 Farm Bill. This is an historic time because we are 
crossing so many divides and moving into so many new frontiers, 
none more so than in our energy and how we are going to protect 
our planet.
    So, Members, please, take care, keep your microphones muted 
so we can expedite our time and minimize any of the noise.
    I now recognize myself for the first 5 minutes.
    And I tell you, I don't know where to start. But I think I 
will start with you, Dr. Gruber, because I represent in my area 
the world's busiest airport. And I want to just ask you a 
couple of questions in terms of the investment in sustainable 
aviation fuel manufacturing that your company Gevo is 
developing. Can you tell me about that, and the nation wants to 
know and certainly my airport, which is the world's busiest, 
would like to just hear from you to discuss the novelty of this 
project and what factors have been of primary consideration in 
developing the plans for this project and what has to happen to 
make sure that this project is in operation as planned by 2025. 
I think that is your deadline. So can you share with us this 
extraordinary opportunity?
    Dr. Gruber. Sure.
    Thank you for the question. We love Delta Airlines.
    The Chairman. Yes, I do, too. I do, too.
    Dr. Gruber. And they are one of the leading companies. They 
actually walk the talk. And I am really proud to work with 
them. We have an off-take contract for them for 75 million 
gallons per year of sustainable aviation fuel. It is a take-or-
pay kind of contract. That means that they are helping us with 
financing indirectly in that they are promising to buy the 
product if we make it. That allows us to go get commercial 
financing and that we have to turn up with the equity, which I 
think we already have on our balance sheet. So that is a great 
case. And I think that others in that alliance will also sign 
up. We have many other deals with other airlines as well.
    We love the forward thinking of that airline, and aviation 
fuel is one of these things that I think everybody understands 
that when you are doing it with jet fuel, it has got to work in 
every--it is drop-in, works with every engine, every plane, no 
mistakes. It is super certified and all the rest.
    The way that we make these fuels and what we think about is 
that we want it to be scalable. How do you make something large 
soon? We like carbohydrates as a feedstock. Now, carbohydrates 
obviously can be--they are the part when we grow stuff, it is 
the part that adds to calories. It is not nutrition. So corn is 
nice because you can separate the protein from the 
carbohydrates. The protein is all about nutrition, and oil. 
That goes to the food market. You take the things that will 
make us fat, we use them instead to make jet fuel.
    There are other technologies that the USDA has funded and 
worked on which allow additional feedstocks, carbohydrate-based 
feedstocks in the future. And the technique is to take the 
carbohydrates, making an alcohol out of them, take the alcohol, 
and turn it into jet fuel. That means that every ethanol plant 
in theory could go ahead and make jet fuel if we added on that 
unit of operations. The trick is--and this is where it is 
really important--you have to de-carbonize the energy and lower 
the footprint. All of us in industry have the same problem 
fundamentally in that we have to take grid electricity, grid 
natural gas. We need more biogas, we need renewable electricity 
for everybody, and that drives the footprint down and makes 
things more scalable.
    The Chairman. Now, you are saying this will come on in 2 
years, just 2 years from now. Are you on track to do that?
    Dr. Gruber. Yes. We are on track to do that. So by 2025 we 
should be producing, and then it is a question of how we scale 
up further and who we work with. We have oversold multiple 
plants already, and so it is all about getting them all 
financed and built. And the thing is, it is like every time you 
see us appear with somebody, you know there is going to be 
either renewable energy around us being deployed in rural 
America and/or sequestration. And so it is pretty darn 
interesting for what it means because, think about it, we are 
putting up a big wind farm, big biogas plants, we have an RNG 
facility we built, and we are going to make green hydrogen. The 
Mayor of Lake Preston said to me, ``Pat, would you guys 
consider putting up EV stations because then people can drive 
those Teslas up here and we could have a hotel business.'' He 
is right. We can do things like.
    The Chairman. Well, that is phenomenal. Mr. Cherrier, you 
may have heard Under Secretary--I don't know if you were here 
when Under Secretary Torres Small commented on electric 
vehicles. And our House Agriculture Committee had a hearing on 
that recently where we heard from energy providers and car 
dealers, convenience stores, and renewable fuel providers, 
among others, to get their take on the EV infrastructure needs 
in rural America. And I would like to know if your cooperative 
has considered making investments in electric vehicles in the 
infrastructure? And has there been interest in making these 
investments from rural communities in your area, state 
officials or otherwise?
    Mr. Cherrier. So we do make investments in the electric 
infrastructure and have promoted electric vehicles [inaudible] 
electric vehicles--excuse me.
    The Chairman. Is your microphone on?
    Mr. Cherrier. I had my microphone off. I apologize.
    The Chairman. All right, good.
    Mr. Cherrier. We do support and promote electric vehicle 
infrastructure. We do own electric vehicles ourselves to really 
understand them and how they operate. We have supported quite a 
few electric vehicle charging stations. Our members have 
programs so that their consumer members can actually install 
them at home. Our understanding is roughly 90 percent of 
charging will be done at the home, and we have programs that 
directly influence that. But we also have commercial chargers 
that are available for fast charging, so it is extremely 
important to allow electric vehicle use.
    The Chairman. And you know that is so important right 
outside next to my district in Georgia we have a new electric 
vehicle plant going into operation. I think it is Rivian. 
Rivian, right. And so that is one of the reasons why I wanted 
to have this electric vehicle hearing, because it is going to 
make a profound impact.
    And now just before I go to Mr. Scott--and I know I am over 
time a bit--but may I ask, Mr. McKenna, you raised a very 
important point there. You said, I believe, 3.2 trillion miles 
a year. What does that say about--what are the pros and the 
cons? What is the negative or positive impact? I mean, 3.2 
trillion miles per year of automobiles just in our country.
    Mr. McKenna. Correct. Correct, Mr. Chairman. Yes, just in 
America. At Nacero the way that we really internalize that is 
that we have to be thinking about all-of-the-above solutions. 
That is such an enormous amount of challenge but also 
opportunity. Electric vehicles, biofuels, many different types 
of low-carbon solutions all have to happen in parallel.
    One of the things that is really critical to us in thinking 
about addressing such a large challenge is affordability. And I 
think today in this hearing obviously this topic will come up. 
I think we are all seeing and feeling the pain at the pump 
right now. But affordability, affordability, affordability is 
critical to making a large-scale impact. And so in order to 
tackle the 3.2 trillion and de-carbonize that entire sector, 
industry, lifestyle, it really has to be all-of-the-above 
solutions.
    The Chairman. Wow, this is very profound. The gentleman 
from Georgia, Mr. Austin Scott, I apologize for taking a little 
more time, but as you can see, this is some very profound 
information coming to us. And as we are developing our energy 
policies for this farm bill, this is one of the most 
challenging areas that we have to make sure we get it right.
    The gentleman from Georgia, Mr. Austin Scott, is now 
recognized for his 5 minutes. Thank you.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. And, 
Mr. Cherrier, I have a couple of quick questions for you. You 
mention your frustration with the loan approval backlog at 
USDA. Could you talk about that issue a little bit and what are 
the consequences of delays in loan approvals for electric 
cooperatives?
    Mr. Cherrier. So, as I understand your question, you want 
to know about the USDA REDL&G program?
    Mr. Austin Scott of Georgia. The backlog, yes.
    Mr. Cherrier. Oh, okay. So the RUS backlog that we have 
been experiencing. I can tell you last year it was an issue. We 
were working hard to get some very large loans approved through 
the RUS. We did work closely with the RUS, and I can tell you 
that with the additional staff that they have hired, they have 
greatly expedited and reduced their backlog quite a bit. I can 
also tell you we just recently received $70 million from the 
RUS just last month and completing the large loan that we were 
trying to get accomplished. So we appreciate the efforts and 
applaud the efforts of RUS. And we also encourage them to 
continue to work on that to facilitate the new loans coming up 
and requests that they have.
    Mr. Austin Scott of Georgia. Okay. One of the other things 
that you mentioned on the loans is the ability to refinance 
legacy higher interest rate loans without penalty and the 
flexibility to do this. What are the reasons that they are 
giving you for not allowing you to refinance and any additional 
thoughts on that?
    Mr. Cherrier. I guess I have not heard an abundance of 
reasons why that is not allowed, but I can tell you that 
investor-owned utilities in the corporate world have the 
ability to consistently do that. Public power utilities with 
their public debt have the ability to consistently refinance 
and have been able to reduce their cost of service as a result. 
We appreciate the ability to work with the RUS, but that has 
been a barrier. But it also requires an act of Congress to get 
that changed. So I have not heard anything specifically that it 
shouldn't happen, and we have received a lot of support for 
implementing that.
    Mr. Austin Scott of Georgia. All right. Thank you. Mr. 
Olsen, the Environmental Law & Policy Center, I know that you 
advocate for renewable energy projects. One of the issues that 
we are facing--and we had this discussion earlier this 
morning--is the technology that we need, the raw materials that 
we need to manufacture the batteries and other things that are 
necessary for a shift require a tremendous number of rare-earth 
minerals. And one of our concerns is the dependency on foreign 
suppliers of rare-earth and critical minerals. It is my 
understanding that you all are partnered in some cases with 
organizations that are working to restrict mining of copper and 
other rare-earth minerals, and I would just like to give you 
the opportunity to speak about that. And we need these 
minerals, and we don't want to be dependent on China or other 
countries that are our adversaries for these minerals. So how 
do we obtain these minerals if we are not able to mine for them 
inside the United States?
    Mr. Olsen. Thank you, Congressman Scott, for raising that 
question. First, I want to clarify that to my awareness I am 
trying to think ELPC, Environmental Law & Policy Center, has 
not opposed mining projects in my memory. I have been there 
about 19 years now. So there is that. But you do raise a point. 
The transition to clean renewable energy will require a lot of 
different resources that we will have to find on the 
marketplace. And there is a lot of concern about some of the 
providers in China and some of the working conditions there 
that people face. And I am very happy to hear that many of the 
solar and battery companies, when they learn that their 
providers engage in unfair or exploitative labor practices, 
that they back out of those arrangements and find better ones, 
so that is great.
    And also, it is important for us all to keep in mind that 
one of the best resources that we have is our technological 
know-how in this country. And we do have the current battery 
technology that is in the market today is lithium-ion 
batteries, but there is a lot of development underway, 
concerted effort to come up with other different batteries, 
technologies as well that would have less need for some of 
these rare-earth minerals that you speak to.
    Mr. Austin Scott of Georgia. So my time has expired. I was 
told--and I apologize if I am not correct--that you all were 
objecting to some mining that was going on in Michigan. I again 
just want to say when we talk about the environment, we are 
talking about the environment as a whole. I do not believe that 
cutting down forest lands to put up solar panels is a good 
return on investment for the environment.
    With that said, Mr. Chairman, I appreciate the witnesses 
and I yield back.
    The Chairman. Was there someone who wanted to comment to 
that? Dr. Olsen, was that you?
    Mr. Olsen. Oh, yes, I just want to say in his last point 
about cutting down forests to put up solar farms, that he makes 
a good point, that especially in terms of the carbon balance in 
the atmosphere, that that is a very problematic approach to 
siting solar farms. And, we ask developers not to do that. And, 
our forests are great mechanisms for trapping carbon and 
storing it, especially the older trees and stands, and we need 
to protect those. Thank you, Mr. Chairman.
    The Chairman. Thank you, very good point there. I agree 
with you.
    And now the gentlewoman from Virginia, Ms. Spanberger, who 
is also the Chair of the Subcommittee on Conservation and 
Forestry, is now recognized for 5 minutes.
    Technical adjustment for Ms. Spanberger. We will get back 
to her.
    Let us go then to the gentlewoman from Washington, Ms. 
Schrier, is recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman. And thank you to our 
witnesses as well.
    Earlier this morning, I asked and talked a little bit about 
the Rural Energy for America Program, the REAP program. And I 
would like to continue the discussion around improving access 
to that program. As this Committee started its review of the 
2018 Farm Bill with an eye toward improvements that could be 
made next year, one of the topics that I have heard about is 
the complexity of applications and the need to improve access 
to USDA programs by streamlining these processes and these 
applications. And I hear that from farmers. I also hear that 
from conservation districts who often are charged with helping 
with these applications.
    Mr. Olsen, regarding the fundamental importance of 
involving agriculture and rural communities in addressing the 
climate crisis, I co-chair the SEEC (Sustainable Energy & 
Environment Coalition) Climate and Agriculture Task Force, 
along with my friend and colleague Representative Chellie 
Pingree. I am also a cosponsor of Representative Pingree's 
Agriculture Resilience Act (H.R. 2803), which creates 
opportunities to directly enable agriculture to reduce 
greenhouse gas emissions and sequester and prepare for 
increasingly challenging weather conditions. And one of the 
provisions in that bill is focused on improving and expanding 
the REAP program through streamlining and increased funding. It 
specifically authorizes and directs USDA to develop pre-
approval techniques for technologies and products that have 
already been demonstrated to work and then could be pre-
approved. And I am curious what you think about this pre-
approval or pre-approved products list and streamlined 
application idea.
    Mr. Olsen. Thank you, Representative Schrier. Those are 
great points. And thank you for your work on the Agricultural 
Resilience Act and the SEEC coalition that you mentioned.
    You make great points that we need to continue to 
streamline the REAP program. The USDA has made progress in this 
over the years, but there is more progress yet to do. They need 
to strike a balance between the sound stewardship of public 
funds, as well as making the program simple to access for 
farmers and rural small businesses. And by having a pre-
approved list of technologies, as you described, that allows 
simplification in a lot of ways.
    So what we have seen in the states for some of the clean 
energy programs is that they have a rebate program for certain 
technologies that they have already vetted and that they 
qualify and they are sound technologies. And then they are able 
to do a rebate form that dramatically reduces the complexity of 
the program. We think that there is a role for that in REAP, 
and that would be a really good way to go.
    In the 2014 Farm Bill, the REAP program was given a three-
tier application system with the lowest tier being for the 
smaller dollar amount grants, and those would have the least 
complexity, and then the second tier and then the third tier. 
It is now 2022, and we suggest moving the threshold up for the 
lowest tier so that more producers can fit into that lower 
complexity application system.
    Ms. Schrier. I think that is a great idea, and it opens us 
up to more of the small family farms that we are looking to 
support and bring into these programs. And I love the idea of 
having pre-approved techniques, technologies. We have a program 
called Sustainable Farms and Fields in Washington State that 
essentially compensates farmers for practices that are known to 
sequester carbon. And this seems like the same kind of thing 
where you reward or support or prove the technology and could 
streamline the process. So thank you for your attention to 
this. I appreciate your input, and I yield back.
    The Chairman. Thank you. And now the gentleman from Iowa, 
Mr. Feenstra, is recognized for 5 minutes.
    Mr. Feenstra. Thank you, Mr. Chairman. It is great to have 
you all here today. And I heard your testimony. My district 
happens to be the home to more ethanol biodiesel plants than 
anywhere in the country. I have the largest Congressional 
district with the most ethanol and biodiesel plants, which is 
really exciting. So we are looking at a lot of different things 
to go zero-carbon emissions. And the development of carbon 
sequestration is one of those projects that is on the radar for 
us in several pipelines coming through Iowa.
    Dr. Gruber, what does carbon capture and storage mean for 
the broader bioeconomy and the competitiveness of our nation's 
farmers and biorefineries under this new carbon-focused 
marketplace that we are living in?
    Dr. Gruber. Thank you for the question. Carbon 
sequestration has tremendous potential. The idea of it is you 
capture CO2 and you geologically sequester it. That 
is one way of doing it. In Decatur, Illinois, where ADM is, 
they have been operating a site for over 10 years. And the 
technique works really well. And so it is worth about, in 
carbon score terms, 30 to 35 carbon points, so that means if an 
ethanol plant was in the 70s, now they are in the 40s for their 
overall footprint. It is a big deal for them. And so it is a 
worthy thing. It needs to be developed over time. We believe it 
has potential. We want to see it available to as many people as 
possible because this greenhouse gas problem is really big. All 
solutions are required. This is a practical one, and it is 
valuable in the marketplace. People want the lower carbon 
fuels, so it has tremendous potential. It does require 
pipelines. It does require really good work around the 
geological sequestration and all the rest.
    Mr. Feenstra. Yes, I really look forward to that for our ag 
producers because I really think they can directly benefit from 
this. It just gives them another added value to that output.
    Mr. Cherrier, thank you for being here today. It is so nice 
and always good to see an Iowan here. It is great that you 
could come. You mentioned in your testimony that electric 
cooperatives have experienced longer wait times for RUS 
workorder approvals for recent projects. Can you walk us 
through what kind of impact this has on cooperatives' ability 
to plan for the future? Also, how does it impact your member-
owners at the end of the line?
    Mr. Cherrier. So the financing delays that we experienced 
in the last year through the RUS caused us to borrow from other 
sources at a higher rate in the meantime. By having that delay, 
it increases our project costs. It could actually potentially 
delay project costs or projects if there are no other sources 
other than the RUS to borrow from. So those delays can be very 
costly. But again, we have seen RUS working towards improving 
that, and we have seen some improvement in that process in the 
last year, but I think more work needs to be done yet.
    Mr. Feenstra. Yes. And then the same with that, given that 
cooperatives are not able to benefit from renewable energy tax 
credits, I have talked to you about this earlier, how would 
CIPCO benefit from direct pay incentives, and what results 
would Congress expect to see if we would create such incentives 
for electric cooperatives?
    Mr. Cherrier. Well, currently, the only effective way to do 
renewable projects is to actually monetize the tax credits. So 
we have to do that through a third-party developer, so we can't 
own the wind farm or solar directly. It has to be done through 
a development group that would own and operate the plant. By 
having these direct credits, we can actually invest in them 
ourselves. We can better plan for it, we can own it, we can 
reduce the cost of it, and we can lower the risk of the project 
itself. So, as a result of that, we will see not just lower 
costs for the cooperatives but we will see a lot more 
development among the cooperatives with renewables.
    Mr. Feenstra. Yes, I just think it is a no-brainer. I mean, 
just thinking about the co-ops and we have quite a few in Iowa, 
I mean, this gives them great incentive to go down these paths.
    So, Mr. Olsen, your testimony discussed the benefits of 
REAP program. However, it is my understanding that the blender 
pumps do not currently qualify for this program. Can you please 
share your insights on why this is?
    Mr. Olsen. Sure. Okay. I would be happy to. Thank you. Yes, 
blender pumps were included for a time in the REAP program 
about 10 years ago, and they weren't actually explicitly 
included in the legislation because they actually convey the 
renewable energy. They don't produce it. And REAP is for 
renewable energy systems that produce renewable energy. And so 
as a result of that effort by the USDA, they have now developed 
other blender pump programs I understand. I took my eye off 
that ball when it got out of REAP. And I understand that they 
are moving forward with that. So, what also happened as a 
result of that was fuel dispensing of all types was taken out 
of REAP, including for RNG, and for EVs as well.
    Mr. Feenstra. Yes, yes. Well, I thank you for those 
comments. And each one of you, thank you so much for being 
here. It is very important that we get to hear this 
information, and I am very grateful. I just look out to the 
future, especially in the Midwest and Iowa. We have a lot of 
great things to offer, energy independence in our area. Thanks 
again. I yield back.
    The Chairman. Yes, you are absolutely right, Mr. Feenstra. 
This is a vitally important hearing. And now the gentlewoman 
from Virginia, Ms. Spanberger, who is also the Chair of the 
Subcommittee on Conservation and Forestry, is recognized now 
for 5 minutes.
    Ms. Spanberger. Thank you very much, Mr. Chairman. I 
appreciate this hearing, and I apologize that I had some 
technical difficulties when you first called on me.
    Mr. Olsen and Mr. Cherrier, thank you so much for being 
here today. And I ideally have questions for both of you, but I 
would like to start with Mr. Cherrier. Sir, in your testimony 
you mentioned the need for Federal financial support and 
technical expertise for EV charging infrastructure in rural 
communities. Can you further elaborate on why we must ensure 
the USDA and the Federal Government are specifically focused on 
rural deployment of EV charging infrastructure? And what risks 
do you see that we might encounter if the grids in our rural 
communities don't receive the Federal investment that would 
make those rural EV charging stations fully deployed or 
accessible?
    Mr. Cherrier. Well, first of all, what is going to be seen, 
what we believe we will see in rural America is it lagging 
behind the urban areas in electric vehicle deployment. So 
anything we can work and do through Rural Development is 
absolutely critical. The electric vehicle infrastructure is 
going to be very important. We are going to want to encourage 
electric vehicles as they are available, but being able to have 
homes, farms pre-wired for it in advance of that, making it 
simpler and easier to do is actually critical to the deployment 
of electric vehicles because when somebody purchases a vehicle, 
the first thing they are doing is looking for a charging 
station. They don't know where to turn or what to do, and it 
dramatically increases the expense of the vehicle to put that 
kind of infrastructure in there. And then the type of charger, 
how fast they need it to charge is going to be critical.
    Ms. Spanberger. And you talked about the fact that this is 
overall, just really important, but, I introduced the Electric 
Vehicle Charging Infrastructure for Farmers Act (H.R. 6390) 
alongside my colleague Republican Member Congressman Rice from 
South Carolina. And the bill would expand REAP to include 
electric vehicle charging infrastructure as an eligible expense 
under the program. Now, certainly, I am an advocate for 
additional funding to REAP overall, but I do think that a 
failure to address these basic infrastructure needs for 
charging in rural communities really will lead towards a future 
where communities will be left behind when we talk about sort 
of any level of infrastructure, be it broadband connectivity, 
previously electricity, previously running water. Could you 
just comment a little bit about sort of what this means 
economically if we put ourselves on a path towards this 
potential divide, assuming you agree with the pretense that we 
are looking at creating a divide if we don't make these 
investments?
    Mr. Cherrier. Well, anything we can do to accelerate the 
adoption of electric vehicles like that to encourage the 
chargers out there I think is absolutely critical. The charger 
programs have worked effectively. We have been rebating on 
those programs for quite a few years now and have some uptake 
but not a lot of uptake yet. It is still----
    Ms. Spanberger. And what is the benefit if there is one to 
a rural community to having this sort of uptake into the 
future?
    Mr. Cherrier. I am sorry, could you repeat that question?
    Ms. Spanberger. Sure. And what would be the potential 
benefit to a rural community of having this uptake in the 
future of this technology?
    Mr. Cherrier. I think you are going to see a lot more from 
changing out the transportation infrastructure in the rural 
communities to economic development of the rural communities. 
You are going to have a lot more growth in rural areas when you 
have that kind of infrastructure available and being encouraged 
by Congress.
    Ms. Spanberger. Thank you. And, Mr. Olsen, in the time I 
have left, I certainly want to thank you and the Environmental 
Law & Policy Center for your support of the REAP Improvement 
Act, another piece of legislation focused on the REAP that I 
have worked on. As you noted, REAP is a program focused on 
making our rural communities more energy-independent, 
resilient, efficient, all while reducing the cost to consumers. 
And you called for dramatically increasing the size of REAP's 
budget moving forward and reducing some of the cost-shares for 
applicants. Could you just elaborate on how expanding funding 
for REAP would benefit rural communities and farmers?
    Mr. Olsen. Yes, thank you very much, Representative 
Spanberger. The answer to your question is multifaceted. REAP 
currently, as administered by the USDA, they do an allocation 
every year of the funds, and they make sure every state has an 
allocation of funding. And that is a very fair approach and it 
kind of grew out of the history of some states grabbing the 
lion's share of the program in the past. But the result of that 
is that the funds wind up getting spread very thinly across the 
country and so some of the larger projects cannot be 
accommodated within REAP anymore as they used to be. And so 
that is a concern. And also there are many other uses, as you 
have brought up potentially for REAP and many others have 
brought up where it can help with the energy transition our 
country needs to undertake.
    And REAP, as it serves every state--and it can serve every 
agricultural sector, just has tremendous potential right now to 
help agriculture and rural America to be at the table in this 
clean energy transmission and to have a role in the clean 
energy economy. But, it is like the line from The Right Stuff, 
``No bucks, no Buck Rogers,'' and what goes into the program 
goes out in terms of education and outreach and also funding. 
And we need that funding. We need that commitment of very 
significant funding to help the country deal with the 
challenges we face.
    Ms. Spanberger. Thank you. Mr. Chairman, thank you for the 
extra time. I yield back.
    The Chairman. Thank you, Ms. Spanberger. And now the 
gentleman from California, Mr. LaMalfa, is recognized for 5 
minutes.
    Mr. LaMalfa. All right. Thank you, Mr. Chairman. I 
appreciate the time once again here.
    Let me pose questions to Mr. Cherrier. You mentioned the 
importance of preserving baseload generation capacity, which I 
wholeheartedly agree with. Baseload reliable 24/7 power is 
pretty much invaluable. In California we have a lot of 
hydroelectric dams that have been a very long-time reliable 
source of 24/7 baseload power. Now, even with the situation, as 
good as they are, when we have a drought situation, we can have 
not the water available to turn the turbine. We had that happen 
on one large dam last year, the Oroville dam finally for the 
first time ever. So that is a factor.
    But how is baseload electricity capacity different when you 
look at renewable resources in general here, when you look at 
baseload being able to be pretty much reliable 24/7 versus a 
lot of other so-called renewables.
    Mr. Cherrier. Well, I would say the baseload or fossil 
resource is absolutely critical to our operations. We have 
experienced times where renewables have not been available. We 
just recently in 2020 had the winter storm Uri, the polar 
vortex, where we were hitting temperatures below 20 at which 
the wind turbines will no longer operate, so we had no wind 
available. We had very little solar available, and we relied 
very heavily on our coal and natural gas plant during that 
period of time. And that is really what kept the lights on for 
us at that time. So it is critical for system reliability, 
especially through a very long transition period that we are 
going to be experiencing.
    Mr. LaMalfa. Yes, it makes sense to me. How would biomass 
as another fuel that is controllable by human activity versus 
wind or sunlight, how would that play in as a possible part of 
the portfolio using forest products or ag trimmings, or things 
like that? How would you look at that as a baseload?
    Mr. Cherrier. Well, biomass is part of the all-of-the-above 
strategy. As I mentioned earlier, CIPCO has landfill gas, which 
is very similar to what you are doing with biomass fuels. I 
think the biomass fuels can be a productive part of the 
portfolio. It is reducing the slag in fuels that are probably 
eventually turning into methane and can be used to put on the 
system and actually reduce greenhouse gases.
    Mr. LaMalfa. Or turned into the next forest fire fuel, too, 
yes. Okay. Thank you. Look, one more thought is talk to me 
about the difficulty of exchanging 1 megawatt of baseload for a 
megawatt of renewable power? What are the challenges there of 
basically converting a baseload 24/7 power to one that is 
considered part of the renewable?
    Mr. Cherrier. Yes, well, the real issue is we don't get one 
for one, so if it is a wind farm, you are lucky to get 20 
percent of that counted as capacity. So if you have a 100 
megawatt wind farm, you might get a capacity credit of maybe 20 
megawatts. And it isn't necessarily reliable. So that runs into 
an issue. We have a little more opportunity with solar because 
it is available during the day during our peak loads, but when 
those aren't available, it doesn't get counted. So we have to 
have a certain amount of baseload or total capacity available 
to the utility, whether the renewables are available or not. 
And there is no reliable alternative to these other backups 
right now of fossil fuels. It is just the way the world is 
today, and new technology may change that in 10 or 20 years, 
but that is where we are today.
    Mr. LaMalfa. All right, thank you for those answers. Mr. 
McKenna, Nacero's mission is to prove that cleaner doesn't have 
to cost more I think is what was said earlier, so really, how 
is that looking when you have consumers facing their really 
high at-the-pump prices? What are the barriers to expanding 
this marketplace in order to have it maybe need not cost more? 
How is that going?
    Mr. McKenna. Thank you, Congressman. So, in short, when we 
say clean doesn't have to cost more, really what that means is 
to be able to take low-cost, low-carbon feedstocks and convert 
those into everyday fuels. The ability for us to do that while 
integrating----
    Mr. LaMalfa. What kind of stocks would that be? What are 
those stocks?
    Mr. McKenna. Excuse me?
    Mr. LaMalfa. What are those stocks?
    Mr. McKenna. The feedstocks are natural gas, captured flare 
gas, renewable natural gas. So widely available 100 percent 
domestic feedstocks that we would be converting into drop-in 
fuels. The thing that is unique about Nacero is that we can do 
it at scale, which is really what drives down the cost of 
production for us. As we see it, the way that you actually 
modulate and manage price at the pump is by adding new sources 
of supply, diverse sources of supply into the system. And we 
think that with our business we will be able to hopefully help 
moderate longer-term some of reliance on foreign crude oil and 
traditional refining to improve the prospects for consumers.
    Mr. LaMalfa. Good answer. I better yield back. Thank you 
for that, Mr. McKenna.
    The Chairman. Thank you very much. And now the gentleman 
from Florida, Mr. Lawson, is recognized now for 5 minutes. Mr. 
Lawson, you may be on mute.
    We will come back to Mr. Lawson.
    The gentleman from Indiana, Mr. Baird, is recognized for 5 
minutes. Mr. Baird?
    Mr. Baird. Thank you, Mr. Chairman. I am here.
    The Chairman. Good. Good to have you here.
    Mr. Baird. Thank you. I appreciate that. I appreciative the 
hearing, and I appreciate you putting this together.
    I have had other commitments here during this panel, so I 
didn't get to hear everything, so please correct me if it has 
already been covered. But, Mr. Cherrier, the one I asked the 
Under Secretary that was on earlier in the hearing with regard 
to livestock producers and leverage the methane digesters, and 
we have some of those in my district back in Indiana. I have 
been interested in that kind of production or process for a 
long time. So producers have an opportunity to use that kind of 
technology, but it is often almost prohibitive because of the 
cost trying to get in. So I guess I am just asking you your 
perspective about the use of methane gas in the livestock 
industry to generate methane fuel.
    Mr. Cherrier. Well, natural gas is a form of methane gas. I 
think it is a great fuel that can be used and depends on where, 
I guess, the source comes from depending on its carbon impact, 
but we use natural gas very much as a reliability fuel and to 
be used when the other lower-cost renewables are not available. 
So I think it is absolutely critical. And the more we have 
available, the more it can be utilized, the more that can be 
captured and used to burn and used for power, the better.
    Mr. Baird. Well, thank you. And I assume that you, by 
saying you are interested in natural gas, if we can do it 
through the use of livestock and food waste and all that sort 
of thing, you really don't care because it is natural gas 
anyway, and that has the same properties as that that comes out 
of the ground.
    So, Mr. McKenna, changing gears here little, you seem to be 
doing a lot of--your company seems to be doing a lot of 
valuable work in low-carbon fuel, and that is a turnkey in its 
ability to reduce the carbon footprint, and every effort seems 
to be very similar to the improvements that biofuels offer. So 
how does your company perceive the lack of parity in government 
programs and incentives used with the electric vehicle industry 
compared to that of the turnkey low-carbon liquid fuels?
    Mr. McKenna. Thank you, Congressman, great question. So 
when we are looking at the opportunity ahead of us, one of the 
things that we see with our business is the ability to utilize 
a huge amount of existing infrastructure, pipelines, storage 
terminals, pumps, and then existing vehicles to be able to help 
drive the energy transition and accelerate low-carbon 
solutions. I think when we are looking at the electric vehicle 
sector, we really see the investments that are being made in 
battery technology and charging and actual vehicle 
manufacturing themselves as purely complementary to what we are 
looking to do.
    One of the unique aspects of our business which we really 
think is a total gamechanger here for the country is the 
ability to offer our products to consumers at really cost-
competitive prices. So whereby certain consumers have the 
income or the faculty to go move into electric today, many 
folks across the country don't. What we have found is that many 
folks across the country, however, do want to do something 
better for the planet. So what we are looking to do is offer 
these low-carbon solutions to everyday drivers at cost-
competitive prices. Scale is one piece that helps drive that. 
We don't have to invest in new pumps or new pipelines. The 
other piece of this is the ability to leverage and utilize 
existing vehicles on the road today.
    Mr. Baird. Well, thank you very much, and I see I am down 
to about 45 seconds, so I yield back, Mr. Chairman.
    The Chairman. All right, thank you. And now we will reach 
back for Mr. Lawson of Florida. You are recognized now for 5 
minutes.
    Mr. Lawson. Thank you, Mr. Chairman. And I welcome all the 
witnesses to the Committee.
    And in Florida we have about 130 active dairy farms ranking 
us number one in the whole Southeast in dairy products. As you 
know, Mr. McKenna, digesters are quite expensive to install and 
implement on a dairy farm. Do you envision smaller regional 
collaborations, cooperative dairies to afford and achieve 
economy-of-scales to produce biogas? Does your company have any 
effort underway to assist dairy farmers so that you can have 
access to biogas?
    Mr. McKenna. Thank you, Congressman. That is a great 
question. So where we really see the big gap in the market 
right now is for a new business or a new sector to come in to 
create substantial new demand so that new demand can drive and 
enable the construction of new anaerobic digester projects.
    A couple of the things that we think the government can do 
to help support this effort is to be able to offer support 
during the construction phase. So simplifying and lowering the 
barrier for entry for folks that are looking to invest and 
build and operate these anaerobic digesters have access to 
capital.
    The second piece that we really support as a business is 
longer-term incentives once these facilities come into 
operation that are all performance-based. Many of the programs 
that are offered by USDA and also other agencies support 
construction but also long-term operations. Ultimately, at the 
end of the day what you need is a business like ours which is 
the ultimate buyer of renewable natural gas. So all three of 
those things really have to work in concert for substantial 
growth to really happen.
    Mr. Lawson. Thank you very much. Mr. Olsen, in your 
testimony you mentioned the importance of simplifying the Rural 
Energy for America Program application process to include pre-
approved technology. Can you explain in more detail what 
current technologies, programs could be pre-approved at this 
time?
    Mr. Olsen. That would be great. Thank you for that good 
question. The pre-approval process would allow the USDA to test 
and vet technologies before they are included in REAP under the 
pre-approved list. The kind of technologies that would be 
involved would be the smaller scale technologies which can be 
used by smaller farmers as well, small operations. And those 
would include a range of energy efficiency technologies. And 
pretty much anytime we use energy, if you look around in the 
room you are in, there is a way to use that energy more 
efficiently, to cut the energy waste that is built into the 
products, and that, frankly, has been built into a lot of the 
buildings and the infrastructure that we have today.
    And so we envision that this could be put together in a 
package by USDA that would be available. So, we have a problem 
right now with small farms struggling and many failing these 
days in the country, but they would be able to cut their cost 
with energy efficiency and then also to use renewable energy as 
well. So the poultry growers across the South have used REAP 
for these purposes, and it has allowed them one of the rare 
opportunities they have as contract growers to increase their 
profit margins.
    Mr. Lawson. Okay, thank you very much. And, Mr. Chairman, 
with that, I yield back.
    The Chairman. All right, thank you, Mr. Lawson. And now I 
would like to recognize our distinguished hard-working Ranking 
Member, the gentleman from Pennsylvania, Mr. Thompson, for his 
5 minutes.
    Mr. Thompson. Thank you, Mr. Chairman. You forgot to 
mention good-looking.
    The Chairman. Good-looking all the way.
    Mr. Thompson. No, Mr. Chairman, I appreciate you, and I 
really appreciate all of our witnesses on this important panel, 
this important hearing where we look at energy.
    Energy is a significant cost, right? I look at energy as a 
cost and an opportunity for American farmers, and so I really 
appreciate the perspective that you all bring.
    I want to kind of touch on the importance of drop-in fuels. 
And, Mr. McKenna, your company is producing drop-in renewable 
fuels. What does this mean for the consumers of the fuels that 
you are producing?
    Mr. McKenna. Thank you, Ranking Member Thompson. So what 
this means is that at the end of the day you will be able to 
drive your 10 year old pickup down the road and make a 
consumer-based choice of whether to purchase a lower-carbon 
version of gasoline or the traditional old-school style of 
gasoline. What we think is a really important piece of 
unlocking not only American energy independence but really the 
horsepower of the American consumer is to be able to offer 
these products at cost-competitive prices so that anyone, 
regardless of their income level or how much money they have in 
their bank account, can participate in the clean energy 
transition.
    When we say drop-in, the reason why that is really, really 
important is it does not matter what type of vehicle you own, 
how old it is. It is now flipping it technically from a carbon 
liability into a carbon asset. And so we think that is the 
ticket to broadening participation across the clean energy 
transition regardless of who you are.
    Mr. Thompson. Well, it sounds like one big advantage for 
you and consumers and quite frankly the Federal Government is 
that the existing system of fuel distribution from pipelines to 
service stations can continue to be utilized with low-carbon 
and carbon-neutral fuels that you will be producing. What is 
the impact of not having to rebuild energy distribution systems 
from the top down or for everyone to have to buy a new car to 
facilitate lowering emissions?
    Mr. McKenna. Well, the benefit is that you can really use 
$5-$6 trillion worth of investment that Americans have made 
over the years in vehicles and the underlying infrastructure to 
distribute fuels to everyday drivers. I think when we are 
thinking about what that means to the farming community 
specifically, that means that capturing renewable natural gas 
from agricultural facilities and landfills and food waste 
processing can tap into that multiple trillions of dollars' 
worth of sunk investment. What we really see at Nacero is being 
one of the lenses through which the farming community can tap 
into frankly the $400+ billion a year liquid fuels industry. 
And, to be able to pair those two is what we think really is 
going to drive new demand for renewable natural gas. So we 
think it is a very system-connected solution.
    Mr. Thompson. Good. Well, Dr. Gruber, you are working on 
similar technology, I believe. Anything to add?
    Dr. Gruber. Yes, I agree with the comments that Jay had 
about the drop-ins and the benefit of the infrastructure and 
all the rest. And we are all about making the drop-ins. That is 
the focus. And when you make them, they really do need to be 
cost-competitive at the marketplace, and that is the game 
afoot. And the thing that people don't realize, these 
technologies exist already. We have just got to go deploy them. 
So when you think about it like this. Cash cost of production, 
it is on par with petrochemical stuff already. We have to pay 
for new capital to go build new capacity to build plants. That 
is the issue. And so now there is green value in the 
marketplace because of the variety of programs or from 
customers' perspectives, and that helps then to make it cost-
competitive and we can go build things.
    Mr. Thompson. Well, thank you. Mr. McKenna, part of your 
plan is to produce green gasoline relying on capturing methane 
from the anaerobic digesters. Can you talk, with a little bit 
of time left here, a little more about the impact that 
expanding the deployment and use of digesters will have in 
rural communities? And specifically, any thoughts on how do we 
do this, looking at--well, Pennsylvania, the average dairy size 
herd must be maybe 85 cows now. I am not sure where it is at 
today compared to California where you are measuring in 
thousands and tens of thousands. There is economy-of-scale. How 
does that work?
    Mr. McKenna. Well, you hit the nail on the head, Ranking 
Member, is it comes down to economy-of-scale and overall 
footprint. I mean, one of the most important things about 
really completely changing the game on how much of these 
effectively free resources is captured comes down to 
partnerships with local natural gas distribution companies, 
companies like ours that are actually purchasing that captured 
renewable natural gas, but doing so in a manner that be albeit 
a little bit blunt. So thinking about this on a much more mass 
scale approach to facilitate a reduction in cost of capital, 
cost of borrowing, USDA programs help facilitate much of this.
    But being able to be programmatic about how these anaerobic 
digesters are rolled out, I think one of the challenges right 
now that we hear when we talk to developers and farmers across 
our business is installing and developing each of these 
facilities is not only costly but it is also very manual 
because each contract has to be structured, and there is a lot 
of different moving pieces. So if there are ways that broad-
based, performance-based programs that the Federal Government 
can use to be able to facilitate a much more blunt approach to 
growing the industry, we think over the long haul that is going 
to make it much easier for farmers to participate in some of 
these programs and, frankly, at the end of the day earn more 
income off of these projects so it is not just third-party 
developers that are taking the lion's share of the 
profitability.
    Mr. Thompson. So obviously--and I have visited a lot of 
these digesters actually in different parts of the country even 
in my role as Ranking Member in my rural American agriculture 
visits. And obviously they work really well where you have 
larger farms, you have the herd size to be able to provide that 
feedstock. It is a wonderful technology actually. But it seems 
to me this also works if you have a central digester someplace, 
whether it is with a company providing it or a cooperative or 
whatever fashion, and that digester serves perhaps--well, the 
size of our farms in Pennsylvania can be 30 or 40 farms who 
provide that daily feedstock. And what a blessing that is when 
the storage of that manure on the farm has always been a 
liability to either a small or large degree. It now becomes an 
asset. Whoever thought we would see a revenue stream off the 
manure, which is great for American farmers, but it is great 
for energy production as well. And so it is exciting, and this 
Energy Title is a really important part of the farm bill.
    I do want to just for the bigger picture, I would just ask 
President Biden, his Administration, we are so desperately in 
need of affordable diesel fuel, we need propane, and we 
desperately need fertilizer right now. With the stroke of a 
pen, he could increase and open up more of our domestic 
American production today and do it in the name of an emergency 
because we are in a crisis. It is not COVID, but it is a food 
security crisis because of inflation. Inflation has sort of 
been self-imposed by the Administration with some of the 
actions, but it has been compounded by Vladimir Putin. And we 
have people around the world by this fall that are probably 
going to be experiencing--will certainly be experiencing 
hunger, starvation, and death by famine. And if we can provide 
the tools that our American farmers need, we can increase our 
yield. And I like to think of it this way. For every bushel an 
American farmer can provide above and beyond what they normally 
do, that may be a life saved somewhere else in the world.
    So with that, Mr. Chairman, I yield back.
    The Chairman. Well, thank you. And I want all the Members 
to know votes are coming up, but if there are others that want 
to bring in additional questions while we have the panel here, 
this is an important panel. And, Ranking Member, I want to make 
sure that we have time for your remarks, closing remarks before 
you have to go to the floor and then we have to adjourn.
    This has been very profound. One of the real issues we 
certainly have to deal with here is our rural communities. 
Every time there has been a real serious movement of 
infrastructure in the history of our nation, the rural 
communities have been left behind. When we had electricity--
see, I grew up--I was born in the country on a farm over in 
Aynor, South Carolina. If anybody knows about South Carolina, 
you know that is rural. And that convenience store, that one 
little store, there wasn't any grocery stores. The furthest we 
had to go was to Conway or Myrtle Beach to try to get to a 
grocery store.
    The point I am making is that we do not and must not make 
that same mistake that we made with water, no running water 
until a while, no plumbing. And then we come with no 
electricity. We had to do candlelight. It is always left 
behind. And I am very worried about this when it comes to this 
revolution in electric vehicles. And that is why I had a 
hearing on this to open this up. And it is a good thing I did 
because here you have electric vehicles. Where are they going 
to get fuel? The culture of our country here is the convenience 
store. That is the gas station. And even on the byways, you 
have a culture of where to go and how to get your vehicle 
moving.
    And so when we had this hearing, I thought everything would 
go well, but I find out that the convenience stores don't make 
the electricity. It is the power companies. And so the electric 
power companies, I had my good friends from Southern Company, 
Georgia Power here, and now there is a conflict as to where 
these folks are going to get the electricity, the electrical 
charging stations when the electric companies now are 
objecting. They want their own facility. They don't want to 
cooperate with the convenience stores. It is things like this 
that we are going to have to deal with.
    The other one--and I would love for your comments on that 
because here we are dealing with this at a time where we are 
fashioning this new farm bill that will go into place and last 
4, 5 years, 5 years. So what we put into place and we are at 
this revolutionary period where we are supposed to be moving 
electric vehicles where nobody has given thought to the 
infrastructure that needs to go in there. No one is giving 
thought to what are we going to do with the power companies 
that don't want to have these charging stations at convenience 
stores. They want their own. What do we here in Congress do? 
What kind of legislation do we put in place to deal with it?
    And then we go to the whole climate change issue, and there 
are two ways in which we get into this carbon sequestration. 
You have some companies that want to bring the farmers in and 
compensate them on the amount of carbon they sequester when 
they don't even have the technology in the rural areas 
connected to the internet because of a lack of rural broadband 
to compensate that. And one company Bayer does the one thing 
that seems to be successful, and they do it with covered crops 
and no-till farming and compensate the farmers on that.
    So what I am saying is before we end this, can you all give 
us some instructions, some of the things we need to do that we 
can incorporate in this farm bill to make sure that these rural 
communities who produce our food, our fiber, shelter from 
forestry are connected properly? And even right now we push so 
hard to get internet, and finally we got the money with a great 
bipartisan bill, but the money is sitting over there with the 
FCC. And then you have conflicts within the local Governments 
down there that they don't want to handle this themselves and 
don't want the USDA, which is in the best position because if 
it wasn't for the USDA, we wouldn't have been able to get the 
electricity down to them.
    So I don't want to end this, but you all are at the apex of 
helping us to be able to design and deal with these issues 
because we need to address them in a way that we secure our 
rural communities to be connected. It is one thing to say we 
are going to have these electric cars. Where are they going to 
get them? We in the urban areas, we don't have to worry about 
that, just like we didn't have to worry about the electricity 
or running water.
    So I just wanted to get that out. We are going to have to 
deal with it. What can you share with us in these next few 
moments? And, as I said, if there are any other Members that 
want to chime in here, we have a few minutes before we go to 
vote that could help us with these challenges. Yes, Dr. Gruber.
    Dr. Gruber. Well, you are on much of the right track. 
Increased investment in the rural infrastructure for energy is 
crucially important. We just built an RNG plant. We had 20,000 
cows. And you know what, we had to finance it ourselves. It 
just simply would have taken too long and too complicated to 
use any other money. We would love to work with more dairies 
and we think all manure should be turned into RNG. That is what 
should happen. We also need electricity, the work that you all 
are doing with all the wind farms you are telling me about and 
all the rest. It is a real--we are going to generate real 
energy in the center part of the country in the rural economy. 
We are not going to generate renewable electricity in cities. 
It is going to be out in the other places. So how do we get it 
from one place to another? How? How will that happen really?
    We all can make renewable resource-based fuels, 
hydrocarbon, diesel fuel. Earlier, the conversation was about 
what we do about diesel fuel for tractors? We can solve that 
problem, no problem, it's cost-effective as well. That is 
straightforward. But we need the rest of the infrastructure 
developed to pull that off.
    We see that there is a very important thing that has to be 
done around the carbon in the soil. Why doesn't every farmer 
who wants to do no-till have access to no-till equipment? 
Because that is the barrier. Where do they get the money? I 
have this poor guy named Jordan. We had him do the farming on 
some of our land near one of our plants, and Jordan said--I 
asked him, well, how come you are not doing no-till? He has got 
beautiful corn but--well, I inherited the farm from my father, 
and I can't afford the equipment. Well, I want to help Jordan. 
I think we should be helping people because that matters for 
cash and carbon in the soil. It allows them to make more money 
on their fields.
    So you are on the right track. You have to count carbon, 
too, and document, and the USDA should be publishing data that 
is real fundamental around the benefits of agriculture because 
it is not well-understood across the world. And that creates 
complications in food policy.
    Mr. Olsen. I will just----
    The Chairman. Thank you. Yes, sir.
    Mr. Olsen. Thank you, Mr. Chairman. Those are some very 
important thoughts and questions. A couple thoughts for you. 
You mentioned that the monopoly utilities insist that any power 
going through a charger has got to come from them. And, we 
wound up with monopoly utilities in this country because, 
historically, the bigger they got, the cheaper the cost was and 
they were natural monopolies. Well, a lot of that has changed 
now, and we really need to think twice before we extend those 
monopolies into new areas of our economy, to new energy 
systems.
    We see also in Wisconsin an attempt by the monopoly 
utilities to monopolize EV charging as well, and there they say 
that you can't even put up your own panels, solar panels or 
wind turbines or what have you and use that for the EV 
charging. So they are really trying to control energy policies 
through exerting that monopoly, and we need to challenge that 
monopoly. And I hope our Representatives in Congress will do 
that.
    Certainly, the financing for the charging systems is very 
important, and there are many programs in place through USDA 
which could be adopted for that. It might be REAP, it might be 
a part of the RUS or something similar to that. But that would 
help more people get into the market.
    And throughout this hearing I have been thinking about the 
history of the cooperatives and with broadband and we needed 
cooperatives in the first place because the monopoly utilities 
did not want to extend lines into the country where there was a 
low number of customers per mile of line, distribution line, 
and so that is why, to raise the standard of living, we needed 
to create the Rural Electrification Administration, which was 
done.
    Also another point raised earlier was what are some of the 
benefits to rural communities from electric vehicles? And just 
one that leaps to my mind is that it costs a lot less to fuel 
and operate an electric vehicle than an internal combustion 
engine. And so the people who would be able to take advantage 
of electric vehicles then would see lower cost for operation 
and so forth.
    And may I address a point that came up earlier this 
morning?
    The Chairman. Yes, please.
    Mr. Olsen. Thank you. A couple Representatives mentioned 
that their constituents are encountering problems with non-
rural agriculture producers not being able to qualify for REAP. 
And back in 2009 that issue was resolved. That was a problem 
back then, but Secretary Vilsack--and I have a letter from him 
I would be happy to share--but Secretary Vilsack took action to 
make sure that all agriculture producers, regardless of 
location, qualify for REAP. So we need to make sure that the 
word gets out to all the Rural Development offices across the 
country and that any agriculture producer qualifies. Thank you, 
sir.
    The Chairman. Yes, thank you. I think, Mr. McKenna, you 
had----
    Mr. McKenna. Yes, I think one of the things, Mr. Chairman, 
that you hit on was an interesting challenge within I will say 
the broader clean economy, which is being able to connect the 
activity in farm communities around renewable natural gas 
capture with improving the resilience of those communities over 
the long haul with the fuels generated from the capture 
activity themselves. So rather than taking renewable natural 
gas and moving it all across the country that exposes those 
farming communities to higher energy prices, programs that may 
be of interest are--could be designed to be able to say for 
those communities that are undergoing that anaerobic digester 
activity are companies that are bringing those fuels back to 
those communities in a very circular local economy fashion.
    Things like that that are performance-based incentives to 
help businesses and cooperatives and other folks do those low-
carbon clean economy activities but also not just for the 
benefit of the global planet but for those local communities by 
increasing fuel production and sales locally, that helps create 
the right level of self-sufficiency and resilience I think that 
is going to help those communities over the long-term. So it is 
not just about capturing the value of those low-carbon products 
but just making sure that those products end up being sold in 
the gas stations down the road from the farm or the cooperative 
in the communities where the underlying activity is taking 
place. It is a little bit of a novelty.
    The Chairman. Yes, absolutely. And was there anyone--yes, 
Mr. Cherrier.
    Mr. Cherrier. Chairman Scott, you made some really good 
points about rural Iowa--or rural America. I think in terms of 
rural Iowa, but it is really about rural America.
    The Chairman. Yes.
    Mr. Cherrier. And rural America was left behind with the 
energy transition 100 years ago where we were using kerosene 
lamps on the farms, where we did not have electricity until the 
rural co-ops came along.
    The Chairman. And the national Rural Electric Act (Pub. L. 
74-605) which put USDA in charge of that.
    Mr. Cherrier. Yes. REA changed it all for rural America.
    The Chairman. Yes.
    Mr. Cherrier. We are seeing the same thing, opportunities 
with broadband today and the ability to invest. And there is a 
rural-urban divide yet on broadband access, and it affects the 
economic development of every single small community and farm 
in the U.S. when they don't have that access.
    The Chairman. Yes.
    Mr. Cherrier. I would also tell you, you have the 
opportunity right in front of you today with the direct pay tax 
credits to make a huge difference for rural America on 
renewables. I can tell you CIPCO has kept our prices very low 
by adding renewables, by having on a larger scale access to 
those credits and using economies-of-scale for our solar farms. 
Our solar costs about a fraction of what it costs to put on 
rooftop solar and other ones and implement it at a very, very 
low cost, and our members have had low and declining prices as 
a result of that, so that is one thing we can do there.
    The Chairman. And you called it direct payment credits?
    Mr. Cherrier. It is the direct pay credit. I believe it is 
under H.R. 2244--no, I am sorry, that is the other one. But, 
yes, there is direct pay tax credits where, today, co-ops 
cannot take advantage of those. The only way we can do it is 
through a third-party. So the investor-owned utilities, the 
urban areas have a distinct advantage on that over the rural 
co-ops today.
    The Chairman. Yes, and----
    Mr. Cherrier. What a difference that would make.
    The Chairman. Yes, one of the first challenges is how do we 
deal with these power companies who control the electricity 
with foregoing being able to partner with the convenience 
stores, which provide not just the gas but the groceries for 
our rural areas. Our rural areas don't have these big 
supermarkets that we have in the urban areas. I mean, it is 
just that simple thing.
    Mr. Cherrier. Mr. Chairman, we work with our small stores 
to have charging stations there. I also can tell you 90+ 
percent of the charging in rural America for electric vehicles 
is done at home or on the farm, so enabling that, because they 
are not going to be running out to a store to charge, they are 
going to be doing it where they park their vehicle 99 percent 
of the time, which is----
    The Chairman. So how do they do that on the farm? I mean, 
they can put a charging station, but how do they hook up with 
the power company who provides the juice?
    Mr. Cherrier. It is very simple. The electric cooperative 
already has power to the farm. It is simply adding a level 1 or 
level 2 charger to the farm. And all they do is whenever they 
are on the farm is, anytime they can, have it plugged in. The 
utility then is directly connected to the vehicle, and it can 
either be charged or it can be discharged to help out the 
cooperative, too. That is how this market is going to evolve.
    The Chairman. Well, tell me, let's look at the Southern 
Company. The Southern Company is the largest power source 
covering most of where we produce our food in the southeastern 
United States, Alabama, Florida, Georgia. It is all connected 
there, even going into Louisiana. And so they have said to me 
in our hearing that they don't want this relationship. They 
want to be in control of all the charging stations. So what 
must we do here in Congress? I mean, we can hash these out. We 
have time to do it, but you see the unique challenges that we 
have.
    Ranking Member, I know you have to say something, and they 
are about to call votes, right?
    Mr. Thompson. All right. All right.
    The Chairman. I am sorry.
    Mr. Thompson. Mr. Chairman, well, first of all, thank you 
for this hearing, and thank you to all the witnesses for your 
testimony once again. I just wanted to follow up with--I agree 
with you. The no-till, Dr. Gruber, you were talking about no-
till and how important it is to have access to that new 
technology. Two things: Number one, we need the bill that this 
Committee passed unanimously on rural broadband to be on the 
House floor because it is a bill that addressed the digital 
divide.
    The Chairman. Yes.
    Mr. Thompson. And that connectivity is such an important 
part of precision agriculture, which is energy-efficient 
agriculture. It ties right back into what we are talking here.
    I also wanted to point out if you are not familiar with it, 
check it out. Mr. Cherrier, it is actually one of your Members 
of Congress, Dr. Ashley Hinson--or Dr.--Congresswoman Ashley 
Hinson----
    The Chairman. Yes.
    Mr. Thompson. I just made her a doctor I guess. But 
Representative Hinson has the PRECISE Act (H.R. 2518, Producing 
Responsible Energy and Conservation Incentives and Solutions 
for the Environment Act). That is a part of a number of pieces 
of legislation that are conservative climate solutions, and it 
supports access to that precision agriculture equipment. I also 
point out the SUSTAINS Act (H.R. 2606, Sponsoring USDA 
Sustainability Targets in Agriculture to Incentivize Natural 
Solutions Act of 2021), which helps to generate more resources 
for programs like that. It creates a public-private 
partnership. That is a bill that I am leading, but it is a 
broadly supported bill that I am looking forward to getting 
both of those before the Committee here because I think it 
speaks to what we do.
    And finally, when it comes to the energy sector, I want to 
celebrate what agriculture does for a healthier environment and 
a healthier economy in terms of--and that is a marriage. It has 
always been kind of a rocky marriage between the ethanol 
industry and the petroleum industry. And I have both. I have 
Pennsylvania's only ethanol plant, but I also have the oldest 
commercial oil well drilled anywhere in the world in 1859. And 
that is a marriage that needs a little marriage counseling. 
Those two come together because the solution to climate is not 
electric vehicles. We heard that in the hearing that the 
Chairman put together.
    The Chairman. Yes, we did.
    Mr. Thompson. And electric vehicles are actually an attack 
on rural America. What it would do if they would actually take 
off and get anywhere close to the number of electric vehicles 
that President Biden would like to see, it would wreck the 
rural economy when you look at the ethanol industry and the oil 
industry actually. That is all rural America.
    Whereas what we are doing--but I am very proud of what 
those two branches of the energy family tree are doing together 
to reduce emissions today. They have made for a healthier 
environment. It is a big part of why the American farmer, 
rancher, and forester are the number one champions for a 
cleaner environment, for reducing emissions of greenhouse gases 
and sequestering greenhouse gases. And those two branches of 
the energy family really contribute to a very healthy rural 
economy. And without a healthy rural economy, every American is 
going to wake up in the cold, dark, and hungry.
    So thank you for this hearing, Mr. Chairman. I appreciate 
it.
    The Chairman. Well, thank you, Ranking Member, and I thank 
our distinguished panel. You guys have really opened us up with 
some valuable information. We want to stay in contact with you 
because, as you see, we have to address these unique challenges 
dealing with energy and climate change and the impact that 
these two intersect with our most important industry, which is 
food. You can do without a lot of things, but you cannot do 
without food. And where is that food produced? In the rural 
areas. And we have to do better with making sure we bring rural 
America along with us as we are moving with all these new 
technological changes.
    And so thank you all very much. We appreciate it, and it 
has been very helpful, and I am sure we will be calling on you 
a little bit more as we get into fine-tuning our farm bill 
because we have to--I think this is the most dynamic area of 
it. The future of our food security is at stake. And we have 
the capacity with drawing up this 5 year farm bill to put the 
kind of resources, the kind of money in to make sure rural 
America is dealt with at the front point of the spear, going 
forward.
    So we thank you very much, and I want to thank our staff 
with Anne Simmons and Ashley Smith and all the fine ladies and 
of course my chief of staff, thank you all very much, and God 
bless you.
    I have to say this. Under the Rules of the Committee, the 
record of today's hearing will remain open for 10 calendar days 
to receive additional material and supplementary written 
responses from the witnesses to any questions posed by a 
Member.
    This hearing of the Committee on Agriculture is now 
adjourned.
    [Whereupon, at 2:55 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Supplementary Material Submitted by Hon. Xochitl Torres Small, Under 
    Secretary for Rural Development, U.S. Department of Agriculture
Insert
          Mr. LaMalfa. Well, let me reclaim my time. I am sorry. The 
        existence of the programs is positive, is good, but how will 
        they be implemented into actually getting facilities built or 
        at least on the way to being built to utilize these materials 
        and turn them into energy? How well are we doing since the 2018 
        Farm Bill has extended that initial program in other areas?
          Ms. Torres Small. Thank you so much, Congressman LaMalfa. And 
        I think that this is a good fit for the section 9003 Program in 
        terms of the large-scale investments that may be necessary, so 
        I will defer to Dr. Neal on that.
          Dr. Neal. Yes, I would appreciate, and we certainly would 
        welcome the opportunity to share more and to research and get 
        back to you about any particular projects that are specific in 
        terms of woody biomass that have been used in section 9003. I 
        don't have that data on me right now.
          Mr. LaMalfa. I guess my bottom line when you get back to me 
        is what is actually being built or what is far along in the 
        planning stage that we can count on then coming online? That is 
        what I am looking at. So thank you. I will yield back.

    There are two projects pending utilizing Section 9003:
Aemetis Advanced Products Keyes, Inc.
    Status: USDA issued a guaranteed loan conditional commitment. The 
project team is working to complete the final plant engineering, 
finalize their equity drive and prepare for loan closing.
    Description: The project will use renewable biomass (woody biomass) 
as a feedstock in a pre-gasification stage as a precursor to plasma arc 
gasification stage where a thermal residence chamber will capture 
hydrocarbons. The gas stream is then exposed to microbes to produce 
ethanol. This technology is combined using established entities; 
InEnTec, who is supplying the gasification and gas clean-up technology 
and LanzaTech, who is supplying the microbe and gas fermentation 
process that converts syngas to valuable products.
    The integrated technology has a theoretical advantage in that it 
produces low ash content, however synthetic gasification and biological 
conversion of gasified biomass into ethanol is still an emerging 
technology.
Red Rock Biofuels, LLC
    Status: Application is pending. Previous application withdrawn--
Lakeview project was down-sized to a demonstration scale facility. 
Lakeview, Oregon plant is under construction. Once constructed, this 
plant will be used as the Integrated Demonstration Unit for the purpose 
of building a new plant, or expansion of the Lakeview facility.
    Description: The project will produce drop-in renewable fuels from 
waste woody biomass using gasification and Fischer-Tropsch conversion 
technology.
                                 ______
                                 
   Supplementary Material Submitted by Andrew ``Andy'' Olsen, Senior 
           Policy Advocate, Environmental Law & Policy Center
April 6, 2022

    Thank you all for the opportunity to testify yesterday. It was a 
highlight of my career and made for a great adventure. Of course, my 
mom is also very proud.
    A question came up from a couple Reps. regarding the eligibility of 
non-rural farmers. Apparently their constituents have been told they 
are ineligible.
    This is not true. One can see this in the rule, at 4280.112 where 
it says ``agricultural producers and rural small businesses.'' It does 
not say ``rural agricultural producers.'' Also, please find attached a 
letter to me from Secretary Vilsack, circa 2009, agreeing with that 
position as well as some of the materials from that effort. (It seems 
the name ``Rural Energy for America'' may have contributed to this 
misunderstanding.)
    I hope you can let the Members know and also share this with USDA, 
as will I. Perhaps this needs to be made explicit in the next farm 
bill.
            Thanks!

Andy Olsen
Excerpt from USDA RD Instructions for Part 4280: Loans and Grants, 
        4280-B Rural Energy for America Program *
---------------------------------------------------------------------------
    * Editor's note: the instructions, Parts A, B, D, and E are 
retained in Committee file and are available at https://
www.rd.usda.gov/resources/directives/instructions.
---------------------------------------------------------------------------
[https://www.rd.usda.gov/files/4280b.pdf]
Renewable Energy System and Energy Efficiency Improvement Grants
 4280.112  Applicant eligibility.
    To receive a RES or EEI grant under this subpart, an applicant must 
meet the requirements specified in paragraphs (a) through (e) of this 
section.

          (a) Type of applicant. The applicant must be an agricultural 
        producer or rural small business at the time of application. 
        For-profit Rural Small Businesses that provide long-term care 
        services that benefit residents, such as nursing homes and 
        assisted living facilities, are eligible. For-profit Rural 
        Small Businesses that provide short-term housing, such as 
        hotels, are also eligible. Newly formed special purpose 
        entities or equivalents that are clearly created solely for the 
        circumvention of REAP regulatory provisions (see examples in 
        (c) below) are not eligible.
                              attachment 1
March 23, 2009

  Hon. Tom Vilsack,
  Secretary,
  U.S. Department of Agriculture,
  Washington, D.C.

    Dear Secretary Vilsack:

    We, the undersigned organizations, encourage the USDA to adopt 
rules for the Rural Energy for America that do not discriminate against 
agricultural producers based on their location, in time for the 2009 
program.
    The Food, Conservation, and Energy Act of 2008 (``Farm Bill'') 
describes eligible recipients as ``agricultural producers and rural 
small businesses.'' Currently, the USDA denies eligibility where an 
agricultural producer's project is located in a non-rural area. The 
``rural small businesses'' language does signal a clear statutory 
intent to limit eligibility for small businesses to those located in 
rural areas.
    We offer these other reasons in support of a non-exclusionary 
implementation of the Rural Energy for America (REAP) program:

   By excluding non-rural agricultural producers, USDA is 
        limiting the potential success of the REAP program. Non-rural 
        producers include greenhouse and nursery operations as well as 
        specialty crop producers. These producers tend to have greater 
        energy needs and niche opportunities for clean energy, which 
        are too often lost opportunities under current rules.

   We understand the mission of the United States Department of 
        Agriculture to be to serve all U.S. agricultural producers, not 
        just those located in rural areas.

   The rural/non-rural dividing lines for implementation of 
        this program result in unfair eligibility. For example, in Ohio 
        one grower is excluded only for being on the wrong side of the 
        street. Another grower is ineligible by \1/2\ mile.

   This exclusion serves no useful public purpose that we can 
        determine, or, at least, that the USDA has enunciated. If the 
        USDA continues this restriction we hope you will explain the 
        reasons for it.

   With the increasing interest in ``local food'' in America, 
        food is increasingly grown near urban (non-rural) areas.

   With the growth of America's urban areas, many formerly 
        rural agricultural producers are now non-rural under the USDA 
        definition through no fault of their own. Withholding program 
        support intended for agricultural producers can hasten 
        conversion of these lands to urban uses.

   In other programs the USDA has a different set of rules. For 
        example, under the Value-Added Grant Program, projects can be 
        located in non-rural areas. USDA should also explain why two 
        criteria would exist for similar programs.

    We believe, given the new statutory provision and USDA definitions 
of ``agricultural producer,'' the Department should recognize that any 
agricultural producers, including greenhouse or nursery operations, are 
eligible for the REAP program. We call on the USDA to recognize this 
fact and implement the REAP program, starting in 2009, to serve all 
agricultural producers regardless of location.
            Best regards,

 
 
 
Alabama Nursery & Landscape          Michigan Green Industry Association
 Association
American Nursery & Landscape         Minnesota Nursery & Landscape
 Association                          Association
Arizona Nursery & Landscape          Mississippi Nursery & Landscape
 Association                          Association
California Association of Nurseries  Montana Nursery & Landscape
 & Garden Centers                     Association
Center for Innovative Food           National Christmas Tree Association
 Technology
Climate Solution's Harvesting Clean  New England Nursery Association
 Energy
Colorado Nursery & Greenhouse        New Jersey Nursery & Landscape
 Association                          Association
Connecticut Green Industries         North Carolina Nursery & Landscape
 Council                              Association
Connecticut Greenhouse Grower's      OFA an Association of Floriculture
 Association                          Professionals
Connecticut Nursery and Landscape    Ohio Landscape Association
 Association
Environmental Law & Policy Center    Ohio Nursery & Landscape
                                      Association
Florida Nursery, Growers &           Oregon Association of Nurseries
 Landscape Association
Georgia Fruit and Vegetable Growers  Pennsylvania Landscape & Nursery
 Association                          Association
Georgia Green Industry Association   Perennial Plant Association
Idaho Nursery & Landscape            Society of American Florists
 Association
Illinois Green Industry Association  South Carolina Nursery & Landscape
                                      Association
Indiana Nursery & Landscape          South Dakota Nursery & Landscape
 Association                          Association
Irrigation Association               Southern Alliance for Clean Energy
Kentucky Nursery & Landscape         Tennessee Nursery & Landscape
 Association                          Association
Louisiana Nursery & Landscape        Texas Nursery & Landscape
 Association                          Association
Maine Landscape & Nursery            Utah Nursery & Landscape
 Association                          Association
Maryland Nursery & Landscape         Virginia Christmas Tree Association
 Association
Massachusetts Nursery & Landscape    Virginia Green Industry Council
 Assn.
Maumee Valley Growers                Virginia Nursery & Landscape
                                      Association
Michigan Floriculture Growers        Wisconsin Landscape Contractors
 Council                              Association
 

                              attachment 2
July 29, 2009

  Andy Olsen,
  Senior Policy Advocate,
  Environmental Law & Policy Center,
  Madison, WI

    Dear Mr. Olsen:

    Thank you for your letter dated March 23, 2009, to the Department 
of Agriculture (USDA) detailing your concerns applicable to 
agricultural producers and the definition of rural areas pertaining to 
the Food, Conservation, and Energy Act of 2008. We understand your 
concern that the Rural Energy for America (REAP) program does not 
support all agricultural producers, specifically, those located in non-
rural areas.
    Please be advised that USDA plans to implement a regulatory change 
that will allow agricultural producers located in non-rural areas to 
apply for assistance under the REAP program. We anticipate implementing 
this change in Fiscal Year 2010. If you or the representatives of the 
other organizations that signed your letter have any questions 
regarding this matter, please contact Bill Smith with the USDA Rural 
Development Business Program Energy Division at (202) 720-1400.
    Thank you for voicing your concerns and bringing this important 
issue to our attention. Please share this response with the other 
organizations that also signed the letter.
            Sincerely,
            
            
Thomas J. Vilsack,
Secretary.
                              attachment 3
ELPC Farm Energy Backgrounder
REAP Was Intended To Be Available To All Agricultural Producers
    Conceived in 2003, the Section 9006 clean energy program, now the 
Rural Energy for America Program (REAP), provides agricultural 
producers and rural small businesses financial assistance to produce 
clean power and improve their energy efficiency. With annual funding of 
$55 million or more, it is a cornerstone of the Farm Bill's Energy 
Title.
The Problem
    Since 2003, USDA has prohibited farmers and other agricultural 
producers in non-rural areas from applying for REAP funding, even 
though the statute (as amended in the 2008 Farm Bill) states clearly 
that all agricultural producers are eligible for the program: ``the 
Secretary shall provide loan guarantees and grants to agricultural 
producers and rural small businesses.''
    Due to USDA's restriction, many agricultural producers cannot use 
REAP because they are not in rural areas (in general, areas with less 
than 50,000 people). This restriction is especially unfair for 
greenhouse growers, specialty crop producers and others who operate in 
formerly rural, now-expanding urban/suburban areas. And, with the 
growing interest in locally grown food, more agricultural producers are 
farming in areas closer to larger towns and cities.
USDA Should Remove the Rural Restriction for Agricultural Producers
    USDA has correctly followed statutory intent on the ``rural'' issue 
for other programs, so it can do the same for REAP. For example, the 
statutory language for the Value-Added Producer Grant program and 
Agricultural Innovation Center Grant programs do not limit their 
applicability to rural areas. USDA, in responding to public comments 
expressing concern that those programs might only apply in rural areas, 
explained that those sections in the farm bill--unlike another program 
which explicitly specified only rural areas--contained no such 
restriction and so the programs applied anywhere:

          The legislation authorizing the Rural Cooperative Grant 
        program specifies that the grants are to be used to facilitate 
        the creation of jobs in rural areas. The Value-Added Producer 
        Grant and Agricultural Innovation Center Grant programs do not 
        have the restriction of facilitating the creation or retention 
        of jobs in rural areas. Therefore Rural Cooperative Development 
        Grant facilities must be located in rural areas, but Value-
        Added Producer Grant and Agricultural Innovation Centers do 
        not.
                                      69 Federal Register 23421 (2004).

    USDA should apply REAP's rural restriction only to rural small 
businesses, since that's what the statute says. REAP contains no 
similar restriction for agricultural producers, so USDA should make 
REAP available to all producers, including those in non-rural areas.
                                 ______
                                 
   Submitted Letter by Sarah Gallo, Vice President, Agriculture and 
           Environment, Biotechnology Innovation Organization
April 5, 2022

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Scott, Ranking Member Thompson, and Members of the 
Committee:

    The Biotechnology Innovation Organization (BIO) is pleased to 
submit a statement for the record to the United States House of 
Representatives Committee on Agriculture hearing entitled, ``A 2022 
Review of the Farm Bill: Energy--Renewable Energy Opportunities in 
Rural America.''
Introduction
    BIO \1\ represents 1,000 members in a biotech ecosystem with a 
central mission--to advance public policy that supports a wide range of 
companies and academic research centers that are working to apply 
biology and technology in the energy, agriculture, manufacturing, and 
health sectors to improve the lives of people and the health of the 
planet. BIO is committed to speaking up for the millions of families 
around the globe who depend upon our success. We will drive a 
revolution that aims to cure patients, protect our climate, and nourish 
humanity.
---------------------------------------------------------------------------
    \1\ https://www.bio.org/.
---------------------------------------------------------------------------
    As Congress begins the process of authorizing the next farm bill, 
BIO applauds the Committee for examining renewable energy opportunities 
in rural America and for inviting Pat Gruber from our member company 
Gevo to serve as a witness.
    A farm bill centered on innovation stands to incentivize the 
adoption of cutting-edge technologies and practices, resulting in 
benefits to the environment and rural economies. Further, supporting 
biobased technologies, such as sustainable fuels, renewable chemicals 
and biobased manufacturing is crucial to agriculture being part of the 
solution to the climate crisis and fostering energy security.
The Benefits of Innovation
    Biotechnology is enabling a dramatic paradigm shift in the 
production of fuels and chemicals. Modern biorefineries are converting 
domestic sources of renewable biomass, wastes, and residues into 
sustainable low carbon fuels, chemicals, and products. In turn, the 
sector creates high paying jobs, particularly in rural parts of the 
country where renewable biomass is grown and in manufacturing 
communities where carbon can be captured and utilized. Developing and 
employing domestic feedstocks will help reduce the United States' 
dependence on foreign energy and create an energy sector that reduces 
greenhouse gas emissions and enhances human health through improved air 
quality.
    Sustainable fuels producers and renewable chemical manufacturers 
need comprehensive legislation, like the farm bill, to maintain U.S. 
leadership in the biobased economy. Programs must be supported with 
robust funding and streamlined and expedited regulatory pathways for 
breakthrough technology solutions.
    At its core, the farm bill promotes durability. The next farm bill 
offers a timely opportunity to examine innovation's influence on the 
resiliency of our economy in the face of global challenges. It also 
provides an unparalleled platform to grow awareness and trust in the 
innovation ecosystem, so more communities and consumers can embrace 
deployment of biobased products with confidence and enthusiasm.
    To aid the Committee in its work and provide more background on 
these technologies and the innovative breakthroughs that can reduce 
greenhouse gas emissions throughout agricultural supply chains, 
attached is BIO' Biotech Solutions for Climate Report,\2\ which 
examines biotechnology's contributions to addressing the climate crisis 
and provides case studies on several BIO member companies including 
Gevo. This report highlights how biotechnology can achieve at least 3 
billion tons of CO2 equivalent mitigation annually by 2030, 
by delivering vital climate solutions in four key areas:
---------------------------------------------------------------------------
    \2\ https://www.bio.org/sites/default/files/2021-04/
Climate%20Report_FINAL.pdf.

---------------------------------------------------------------------------
   Producing sustainable biomass feedstock

   Empowering sustainable production

   Developing lower carbon products

   Enhancing carbon sequestration
Supporting Innovation
    Federal programs supporting the biobased economy, like the farm 
bill energy title, can foster research, development, demonstration-
scale activities, and deployment of renewable, low-carbon energy 
technologies and send positive signals to the investment community. 
Private sector funding is critical to accelerate innovation, create a 
more resilient economy, and grow jobs for years to come.
Biobased Markets Program
    The Biobased Markets Program, or the BioPreferred' 
Program, directs Federal agencies to increase their purchase and use of 
renewable chemicals and other biobased products. This program makes it 
easier for consumers to identify biobased products with the U.S. 
Department of Agriculture (USDA) Certified Biobased Product label. 
According to USDA's An Economic Impact Analysis of the U.S. Biobased 
Products Industry,\3\ the biobased products industry contributed $393 
billion and 4.2 million jobs to America's economy.
---------------------------------------------------------------------------
    \3\ https://www.biopreferred.gov/BPResources/files/
BiobasedProductsEconomicAnalysis2018.
pdf. *
    Editor's note: footnotes annotated with  are retained in Committee 
file.
---------------------------------------------------------------------------
    BIO recommends the next farm bill strengthen the 
BioPreferred' program with significant mandatory funding and 
enforceable procurement requirements. USDA and the Office of Management 
and Budget (OMB) should educate procurement officers on the benefits of 
BioPreferred' to ensure procurement targets are achieved.
    Finally, 2018 Farm Bill called for USDA to work with the Department 
of Commerce to develop North American Industry Classification System 
(NAICS) codes for renewable chemical manufacturers and producers of 
biobased products. However, to date, OMB declined to do so. Without 
dedicated NAICS codes, Federal agencies cannot accurately classify, 
collect data, or report on the rapidly growing bioeconomy. BIO urges 
the Committee to work with USDA and OMB to update NAICS to establish a 
measurement for biobased products.
Biorefinery Assistance Program
    USDA has been a critical partner in promoting and providing 
financial support for the development of sustainable biofuels and 
renewable chemicals.
    The Biorefinery Assistance Program loan guarantee program provides 
manufacturers access to capital for large-scale projects in rural 
communities. Without the loan guarantee program, new innovative 
companies might never be able to pool sufficient capital to commence 
development of a project in rural communities with a small population. 
These biorefineries are proven drivers of job and economic growth for 
rural communities.
    The 2018 Farm Bill expanded access to this program to renewable 
chemical and biobased product manufacturers. BIO urges the Committee to 
use its authority to build on report language in the 2018 Farm Bill to 
ensure that all biobutanol manufacturers can qualify for the 
biorefinery assistance program as an advanced biofuel, regardless of 
feedstock. The 2018 Farm Bill also only provided mandatory funding to 
the program through Fiscal Year 2020. To spur growth of additional 
biorefineries in rural communities, it will be critical for the next 
farm bill to provide mandatory funding for the full length of the farm 
bill.
Improved Modeling
    As BIO noted in its statement for the record to the Committee's 
hearing ``A 2022 Review of the Farm Bill: The Role of USDA Programs in 
Addressing Climate Change,'' \4\ just like carbon markets, supporting 
the development of renewable energy will require infrastructure to 
measure and verify reductions in emissions and carbon sequestrations at 
the local farm level. This will ensure both government and industry can 
invest in and properly award innovative technologies that reduce 
emissions.
---------------------------------------------------------------------------
    \4\ https://www.bio.org/letters-testimony-comments/bio-statement-
house-agriculture-committee-2022-farm-bill-and-climate.
---------------------------------------------------------------------------
    This will also require both modeling and regulatory requirements 
for greenhouse gas emissions analysis for sustainable fuels and 
renewable chemicals to reflect the newest science and technology. As 
BIO recently noted in comments \5\ in response to the U.S. 
Environmental Protection Agency's (EPA's) workshop on biofuel 
greenhouse gas modeling, relying on a single, stagnant version of a 
model jeopardizes the integrity of EPA processes and long-term decision 
making. Enabling the use of up-to-date modeling tools and data will 
permit the agency to capture improvements in agricultural efficiency 
and deployment of innovative technologies.
---------------------------------------------------------------------------
    \5\ https://www.bio.org/letters-testimony-comments/bio-comments-
epa-ghg-modeling.
---------------------------------------------------------------------------
    As such, BIO recommends the Committee and Congress urge EPA to work 
with U.S. Department of Energy (DOE) to incorporate the DOE's Argonne 
National Lab Greenhouse gases, Regulated Emissions, and Energy use in 
Transportation (GREET) model for measuring lifecycle emissions of 
transportation fuels. BIO also recommends EPA coordinate with USDA and 
utilize its practical knowledge and expertise on biofuels and 
innovative farming techniques.
Conclusion
    BIO believes the government can and should play a catalytic role in 
growing a renewable, biobased economy. This will require Congress to 
incentivize the adoption of innovative, sustainable technologies and 
practices. BIO is committed to working with Congress in a forward-
looking manner to foster pioneering technology breakthroughs and 
science. Doing so will bolster our economic and energy independence and 
set us on a path to better health and prosperity.
            Sincerely,
            
            
Sarah Gallo,
Vice President, Agriculture and Environment,
Biotechnology Innovation Organization.
                              attachment 1
Biotech Solutions for Climate Report
Executive Summary
Examining biotechnology's contributions to addressing the climate 
        crisis
          ``Climate change is one of the greatest public policy 
        challenges facing this generation.''

    New approaches are required at almost every level of the economy. 
Biotechnology has the potential to be a transformative asset in this 
struggle, offering vital contributions to near-term greenhouse gas 
(GHG) reductions and revolutionary tools to avert catastrophic climate 
change in the longer term. New biotech tools, including gene editing 
and synthetic biology, can be transformative climate solutions in key 
emerging industry sectors. Policies supporting the development and 
deployment of biotech climate solutions should be part of any 
government effort to address climate change.
    Biotechnology can achieve at least 3 billion tons of CO2 
equivalent mitigation annually by 2030, using existing technologies, 
and emerging biotechnologies could have transformative GHG benefits in 
a range of industrial sectors. Biotechnology can deliver vital climate 
solutions in four key areas:

   Producing sustainable biomass feedstock

   Empowering sustainable production

   Developing lower carbon products

   Enhancing carbon sequestration
Producing Sustainable Biomass Feedstock
    Substituting sustainably produced biomass feedstocks for fossil 
feedstocks is a critical component of de-carbonizing the U.S. economy 
because it leverages the capacity of photosynthesis to remove carbon 
from the atmosphere. Biomass substitution has provided vital near-term 
reductions in the carbon intensity of transportation fuels and a 
rapidly growing array of consumer products. In several key markets, 
such as aviation fuels, biobased alternatives offer the only viable 
path to GHG reductions. Biotechnology is being deployed to develop and 
utilize a range of next-generation sustainable biomass feedstocks to 
expand the availability and further reduce the carbon intensity of 
biofuels and biobased products. Future climate gains from biomass will 
depend critically on the carbon footprint of biomass feedstock 
production.
    Biotech innovations in sustainable biomass production are also 
transforming the broader agriculture sector. Agriculture accounts for 
roughly 10% of total U.S. GHG emissions.\1\ The vast majority of these 
emissions are nitrogen emissions from fertilizer and soils and methane 
emissions from livestock. Biotech is being deployed to tackle both 
issues.
---------------------------------------------------------------------------
    \1\ http://cfpub.epa.gov/ghgdata/inventoryexplorer/.
---------------------------------------------------------------------------
    Key Findings:

   Biofuels from agricultural or municipal waste and dedicated 
        energy crops such as algae, switchgrass, hybrid poplar and 
        Miscanthus have achieved GHG reductions of up to 80% versus 
        petroleum with current technology.\2\
---------------------------------------------------------------------------
    \2\ htts://www.epa.gov/fuels-registration-reporting-and-compliance-
help/lifecycle-greenhouse-gas-results.

   Continued improvements in feedstock production, conversion 
        efficiency, and co-products are expected to yield pathways with 
        negative carbon scores.\3\
---------------------------------------------------------------------------
    \3\ Kim S., Zhang X., Reddy A.D., Dale B.E., Thelen K.D., Jones 
C.D., Izaurralde R.C., Runge T., Maravelias C. Carbon-Negative Biofuel 
Production. Environ. Sci. Technol. 2020 Sep. 1; 54(17): 10797-10807. 
doi: 10.1021/acs.est.0c01097. Epub 2020 Aug. 19. PMID: 32786588. http:/
/pubmed.ncbi.nlm.nih.gov/32786588/.

   Biotechnology is being deployed to radically reduce 
        agricultural nitrogen emissions: first, by introducing 
        nitrogen-fixing microorganisms, known as agricultural (ag) 
        biologicals, to the soil; and second, by using plant 
        biotechnology to engineer plants to better utilize soil 
        nitrogen. Biotech solutions could reduce nitrous oxide 
        emissions from agriculture by more than 150 million metric tons 
---------------------------------------------------------------------------
        of carbon equivalent.

   Ag biologicals and plant biotechnology are being similarly 
        leveraged to enhance soil carbon sequestration through 
        introduction of carbon-fixing soil microbes and larger plant 
        root systems. Ag biologicals and plant biotechnology could 
        enhance soil carbon sequestration by up to 600 million metric 
        tons per year if widely deployed.

   Biotechnology is reducing methane emissions from livestock 
        through new animal feeds and feed ingredients, more efficient 
        animals, and solutions for processing and reusing animal waste.

   Plant biotechnology will be critical to continued 
        agriculture sustainability gains, including improvements in 
        crop yields, photosynthetic efficiency, and climate resiliency.

   Together, biotech solutions have the potential to reduce 
        agriculture sector GHG emissions by nearly 1 billion metric 
        tons (1 gigaton) annually--or the equivalent of GHG emissions 
        from more than 100 million U.S. homes.
Empowering Sustainable Production
    Manufacturing of everyday products, like apparel, plastics, 
packaging, carpet and cosmetics, is a major greenhouse gas emitter, 
responsible for 22% of total GHG emissions.\4\ Biotechnology can 
dramatically reduce these emissions by making their building blocks 
from renewable feedstocks rather than fossil fuels; in many cases, 
biology allows drop-in replacements of existing building blocks, 
enabling faster adoption throughout our economy with homegrown 
solutions. New biotech tools, including gene editing and synthetic 
biology, offer the potential for transformative climate solutions in 
key emerging industry sectors. Biotech offers a sustainable model for 
manufacturing in the 21st century.
---------------------------------------------------------------------------
    \4\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/.
---------------------------------------------------------------------------
    Key Findings:

   Biomanufacturing--the use of enzymes and microorganisms in 
        manufacturing--can reduce GHG emissions 80% or more relative to 
        traditional chemical routes for a variety of chemicals and 
        consumer products.\5\
---------------------------------------------------------------------------
    \5\ Erickson, B. ``New Biotech Tools for a Cleaner Environment.'' 
Washington, D.C.: Biotechnology Industry Organization, 2005. http://
www.bio.org/sites/default/files/legacy/bioorg/docs/files/
CleanerExecSumm.pdf.

   CRISPR and other gene editing tools have dramatically 
        increased the speed and reduced the cost of genetic engineering 
        and are being deployed to tackle a range of global challenges, 
---------------------------------------------------------------------------
        including climate change.

   Biology-based parallel computing and DNA data storage have 
        the potential to cut the energy and carbon footprints of 
        computing and data storage--sectors expected to account for 14% 
        or more of global GHG emissions by 2040 \6\--by 99% or more 
        versus current technology.\7\
---------------------------------------------------------------------------
    \6\ http://www.sciencedirect.com/science/article/abs/pii/
S095965261733233X?via%3Dihub.
    \7\ http://www.pnas.org/content/113/10/2591.abstract.

   Biological sensors, coatings and ingredients can 
        substantially reduce food and feed waste, which is responsible 
        for roughly seven percent of total global GHG emissions.\8\
---------------------------------------------------------------------------
    \8\ Food Wastage Footprint: Impacts on natural resources. Summary 
Report. France: Food and Agriculture Organization of the United 
Nations, 2013. http://www.fao.org/3/i3347e/i3347e.pdf.
---------------------------------------------------------------------------
Devloping Lower-Carbon Products
    As awareness of the climate crisis expands, consumers are 
increasingly demanding lower-carbon options and more sustainable 
replacements for existing products. This means finding low-emission 
alternatives that provide the same level of performance, durability and 
cost-effectiveness as mature fossil-based systems. Biotechnology allows 
for the production of low-carbon consumer products through the 
substitution of biomass or other recycled carbon feedstocks and by 
enabling more efficient, biologically-based production, satisfying an 
increasingly important market segment while reducing emissions.
    Key Findings:

   First-generation biofuels have reduced U.S. transportation 
        sector GHG emissions by 980 million tons over the past thirteen 
        years,\9\ equivalent to taking roughly 16 million vehicles off 
        the road, or 19 coal-fired power plants offline, for that 
        period.\10\ Biotech innovations in feedstocks, processing, co-
        products, and carbon recycling continue to lower their carbon 
        intensity.
---------------------------------------------------------------------------
    \9\ Unnasch. S. and D. Parida (2021) GHG Reductions from the RFS2--
A 2020 Update. Life Cycle Associates Report LCA. LCA.6145.213.2021 
Prepared for Renewable Fuels Association. http://ethanolrfa.org/wp-
content/uploads/2021/02/LCA_-_RFS-2-GHG-Update_2020.pdf.
    \10\ U.S. Environmental Protection Agency. Greenhouse Gas 
Equivalencies Calculator. http://www.epa.gov/energy/greenhouse-gas-
equivalencies-calculator. Accessed April 3, 2021.

   With lifecycle GHG reductions of 80% or more versus 
        petroleum, next-generation feedstocks will more than double the 
        transportation GHG emissions reductions achieved by first-
        generation biofuels and are poised to deliver carbon-negative 
---------------------------------------------------------------------------
        transportation solutions.

   Biobased products produced from biomass or biologically 
        recycled waste gases added $459 billion to the U.S. economy in 
        2016 \11\ and are built from carbon that would otherwise reside 
        in the atmosphere, creating a pivotal pathway for atmospheric 
        carbon removal.
---------------------------------------------------------------------------
    \11\ Daystar, J., Handfield, R.B., Golden, J.S., and, T.E. 
McConnell (2018). An Economic Impact Analysis of the U.S. Biobased 
Products Industry: 2018 Update. Volume IV. A Joint Publication of the 
Supply Chain Resource Cooperative at North Carolina State University 
and the College of Engineering and Technology at East Carolina 
University. 2018. http://www.biopreferred.gov/BPResources/files/
BiobasedProductsEconomicAnalysis2018.pdf.

   Biobased plastics and polymers, such as PLA, PHA, and BDO 
        have achieved lifecycle GHG reductions of up to 80% versus 
        their petroleum-based counterparts.\12\ A rapidly growing list 
        of new biobased chemical building blocks is now in development.
---------------------------------------------------------------------------
    \12\ Yu, J. and Chen, L. The Greenhouse Gas Emissions and Fossil 
Energy Requirements of Bioplastics from Cradle to Gate of a Biomass 
Refinery. Environ. Sci. Technol. 2008, 42, 18, 6961-6966. http://
pubs.acs.org/doi/abs/10.1021/es7032235.

   Biotechnology is lowering the carbon footprint of animal 
        products and making possible a growing array of sustainable, 
---------------------------------------------------------------------------
        low-carbon options for meat and animal products through:

     Plant-based and cultured meats with up to 89% lower 
            lifecycle GHG emission.\13\
---------------------------------------------------------------------------
    \13\ Khan, S. Comparative environmental LCA of the Impossible 
Burger' with conventional ground beef burger, Quantis 
International, Feb. 27, 2019. http://impossiblefoods.com/mission/lca-
update-2019/,

     Algae and microbial feed ingredients that reduce 
            enteric methane emissions from ruminant animals by 68% or 
            more,14-15  avoiding the equivalent of up to 140 
            million metric tons of carbon annually.
---------------------------------------------------------------------------
    \14\ Roque, B.M., et al. Red seaweed (Asparagopsis taxiformis) 
supplementation reduces enteric methane by over 80 percent in beef 
steers. bioRxiv 2020.07.15.204958; doi: https://doi.org/10.1101/
2020.07.15.204958. https://www.biorxiv.org/content/10.1101/
2020.07.15.204958v1.ab
stract. Roque B.M., Venegas M., Kinley R.D., de Nys R., Duarte T.L., 
Yang X., et al. (2021) Red seaweed (Asparagopsis taxiformis) 
supplementation reduces enteric methane by over 80 percent in beef 
steers. PLoS ONE 16(3): e0247820. https://doi.org/10.1371/
journal.pone.0247820. http://journals.plos.org/plosone/
article?id=10.1371/journal.pone.0247820.
    \15\ Press Release: Leading California University Finds 78 Percent 
Reduction in Livestock Methane Emissions with Direct-fed Microbials 
from Locus Fermentation Solutions. March 26, 2020. http://locusfs.com/
leading-california-university-finds-78-percent-reduction-in-livestock-
methane-emissions-with-direct-fed-microbials-from-locus-fermentation-
solutions/.

     Other biotech ingredient options for fish feed that 
            reduce its carbon footprint by up to 30%.\16\
---------------------------------------------------------------------------
    \16\ Cumberledge, T. Assessment of environmental impact of 
FeedkindTM protein. Carbon Trust, April 2016. http://
www.carbontrust.com/resources/assessment-of-environmental-footprint-of-
feedkind-protein.

     Anaerobic digestion of animal waste, with the 
            potential to reduce U.S. GHG emissions by 151 
            MTCO2 eq. annually by 2050 using current 
            technology.\17\
---------------------------------------------------------------------------
    \17\ Zaks, David P.M., et al. ``Contribution of anaerobic digesters 
to emissions mitigation and electricity generation under U.S. climate 
policy.'' Environmental Science & Technology vol. 45,16 (2011): 6735-
42. doi:10.1021/es104227y. http://www.ncbi.nlm.nih.gov/pmc/articles/
PMC3155279/.
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Enhancing Carbon Sequestration
    A broad scientific consensus exists that reducing carbon emission 
alone will be insufficient to avert catastrophic climate change. Almost 
every model of a successful stabilization of global temperatures 
includes a substantial component of carbon dioxide removal from the 
atmosphere as well.\18\ Biotechnology has multiple critical roles in 
achieving the needed carbon removal.
---------------------------------------------------------------------------
    \18\ http://www.ipcc.ch/site/assets/uploads/sites/2/2019/02/
SR15_Chapter2_Low_Res.pdf.
---------------------------------------------------------------------------
    Key Findings:

   Biological carbon capture is the most feasible near-term 
        pathway to meaningful atmospheric carbon removal. Development 
        of thermochemical systems for point-source and direct-air 
        capture remains an important technology pursuit, but 
        photosynthesis and other biological pathways remain the only 
        established mechanisms for carbon capture on a scale sufficient 
        for carbon removal.

   Bioenergy with Carbon Capture and Sequestration (BECCS) 
        could cost-effectively remove over 700 million metric tons of 
        carbon per year by 2040, or more than half the emissions from 
        all U.S. coal power plants.\19\
---------------------------------------------------------------------------
    \19\ Langholtz M., Busch I., Kasturi A., Hilliard M.R., McFarlane 
J., Tsouris C., Mukherjee S., Omitaomu O.A., Kotikot S.M., Allen-Dumas 
M.R., DeRolph C.R., Davis M.R., Parish E.S. The Economic Accessibility 
of CO2 Sequestration through Bioenergy with Carbon Capture 
and Storage (BECCS) in the US. Land. 2020; 9(9): 299. http://doi.org/
10.3390/land9090299. http://www.ornl.gov/news/bioenergy-carbon-capture-
combo-could-cost-effectively-mitigate-carbon-dioxide.

   Algae and other microbial carbon capture systems applied to 
        biomass energy or other biorefinery systems offer one of the 
---------------------------------------------------------------------------
        most carbon-negative climate solutions available.

   Suitable land and other infrastructure exists to deploy 
        algae-based carbon capture systems at more than 500 power 
        plants and ethanol facilities in the U.S. These systems would 
        have a potential to capture more than 200 million tons of 
        CO2 annually.\20\
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    \20\ Algae Biomass Organization. DOE 2016 Billion-Ton Report: Ample 
Resources for Algae Production in the U.S. July 13, 2016 http://
algaebiomass.org/blog/9541/doe-2016-billion-ton-report-ample-resources-
for-algae-production-in-the-u-s/.
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Conclusion
    Biotechnology is a crucial enabling technology to combat climate 
change. It offers gigaton solutions from existing technologies and 
potentially transformative solutions in multiple sectors of the 
economy. Current and future biotechnology innovations will be needed to 
achieve a zero-carbon economy and play a key role in carbon capture and 
sequestration to take us beyond zero. Policies supporting the 
development and deployment of biotech climate solutions should be part 
of any government effort to address climate change.
                              attachment 2


Biotech Solutions for Climate Report
Examining biotechnology's contributions to addressing the climate 
        crisis
Matt Carr, Green Capitol, LLC

Tristan Brown, State University of New York, College of Environmental 
Sciences and Forestry

Colin Murphy, University of California, Davis, Policy Institute for 
Energy, Environment, and the Economy
Table of Contents
Introduction
Technologies

    Products

          Advanced Biofuels
          Renewable Chemicals and Biobased Products/Materials
          Food and Feed Ingredients

    Agriculture Inputs and Climate Services

          Agricultural Biologicals
          Biological Carbon Capture, Use and Storage

    New Biotech Tools and Bio-[Industrial] Manufacturing

          New Biotech Tools
          Applications of Bio-Manufacturing in Traditional Industries
          New Markets and Novel Applications

    Plant and Animal Biotechnologies

          Plant Biotechnology and Gene Editing
          Animal Biotechnology
          Renewable Chemicals and Biobased Products/Materials
          Food and Feed Ingredients

Climate Analysis

    Issues in LCA for Biotechnology
    GHG Mitigation [Potential] on National Scale

          Feedstock
          Empowering Sustainable Production
          Developing Lower-Carbon Products
          Enhancing Carbon Sequestration

Barriers to Adoption and Policy Proposals

    Financing Barriers
    Regulatory Barriers
    Policy Proposals

          De-carbonizing Transportation
          De-carbonizing Industry
          De-carbonizing Agriculture
          Negative-Carbon Tech
          Economy-Wide Climate Programs
  Introduction
          ``Climate change is one of the greatest public policy 
        challenges facing this generation.''

    The rapid accumulation of anthropogenic carbon dioxide in the 
atmosphere is already altering natural climate \1\ and biological 
systems, resulting in abnormally destructive wildfires, storms, 
rainfall patterns and the spread of infectious disease. It is 
increasingly clear that the historical, fossil fuel-based models of 
carbon, energy and material cycling through the economy are 
incompatible with maintaining a hospitable environment. Humanity will 
need to bring every tool it has to bear on this critical challenge. New 
approaches are required at almost every level of the economy. 
Biotechnology has the potential to be a transformative asset in this 
struggle.
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    \1\ http://www.ipcc.ch/site/assets/uploads/2018/02/TAR-03.pdf.
---------------------------------------------------------------------------
    Biotechnology is technology based on biology. Biotechnology 
applications touch most aspects of modern life, from agriculture to 
manufacturing to medicine. In the context of climate change, 
biotechnology offers solutions in four key categories:

   Producing sustainable biomass feedstock

   Empowering sustainable production

   Developing lower carbon products

   Enhancing carbon sequestration

    Biotechnology offers vital contributions to near-term greenhouse 
gas (GHG) reductions and revolutionary tools to combat climate change 
in the longer term. Policies supporting the development and deployment 
of biotech climate solutions should be part of any government effort to 
address climate change. This report reviews the current contributions 
of biotechnology to greenhouse gas (GHG) reductions and identifies the 
emerging biotech solutions with the greatest potential to avert, and 
reverse, catastrophic climate change. We focus on four main areas:
    Producing Sustainable Biomass Feedstock. For most of human 
existence, our lives were based on the products of renewable biomass--
plants and other living material. In the past 150 years, much of our 
economy has come to depend on petroleum and other non-renewable 
resources. The environmental consequences of this transition from 
renewable resources to non-renewable resources are well documented.\2\ 
Biotechnology has developed more sustainable, biobased alternatives for 
many products, including fuels, polymers, and other chemicals. The U.S. 
consumed over 7.5 billion barrels of petroleum in 2019,\3\ some of 
which was turned into plastic; as much as 35 million tons of plastic 
ended up in waste streams annually in recent years.3-4 More 
sustainable options have been developed over recent decades, but 
ultimately they still require a material input. Biobased alternatives 
offer the potential for significantly reduced carbon footprints and 
environmental benefits compared to the traditional systems they 
displace, and these alternatives depend on broad availability of 
sustainable biomass feedstock. At present, there are concerns that not 
enough biomass will be sustainably available to meet growing demand. 
Biotechnology is rapidly reducing the carbon footprint of feedstock 
production by enabling new, sustainable ways to produce usable biomass, 
improving yields on existing crops, developing scalable, low-input 
production systems, and finding new ways to utilize biomass that would 
otherwise be waste.
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    \2\ http://www.pnas.org/content/116/15/7192.
    \3\ http://www.eia.gov/dnav/pet/hist/
LeafHandler.ashx?n=PET&s=MTTUPUS1&f=A.
    \4\ https://www.statista.com/statistics/1097290/us-plastic-waste-
generation/.
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    Empowering Sustainable Production. Manufacturing is a major 
greenhouse gas emitter, from industrial boilers, chemical production, 
and the release of high-warming-potential gases like methane or 
fluorinated hydrocarbons. Biotech empowers a variety of options to 
reduce emissions from these processes, by reducing the need for energy 
inputs, facilitating more efficient material processing, or replacing 
high-warming-potential gases. Biotechnology has also enabled renewable 
natural gas systems that can displace the fossil-based methane today, 
simply by switching the source of the gas. The U.S. manufacturing 
sector is responsible for 22% of total GHG emissions,\5\ and while no 
single technology or solution can single-handedly solve the problem, 
biotech enables opportunities for lower-emission production across many 
sectors.
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    \5\ http://cfpub.epa.gov/ghgdata/inventoryexplorer/.
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    Developing Lower-Carbon Products. As awareness of the climate 
crisis expands, consumers are increasingly demanding lower-carbon 
options and more sustainable replacements for existing products.\6\ 
This means finding low-emission alternatives that provide the same 
level of performance, durability and cost-effectiveness as mature 
fossil-based systems. Biotechnology allows for the production of low-
carbon consumer products through the substitution of biomass or other 
recycled carbon feedstocks and by enabling more efficient, biologically 
based production, satisfying an increasingly important market segment 
while reducing emissions at the same time.
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    \6\ http://www.carbontrust.com/news-and-events/news/research-
reveals-consumer-demand-for-climate-change-labelling.
---------------------------------------------------------------------------
    Enhancing Carbon Sequestration. While there is a lot of uncertainty 
about what a sustainable future may look like, several features are 
common across all likely scenarios. One of these is the deployment of 
massive amounts of carbon capture and sequestration (CCS), which 
converts carbon to a form that does not contribute to climate change or 
stores it underground. CCS cannot be the sole or even the primary 
solution to climate change, but it will make a critical contribution. 
Biotechnology has a key role in advancing CCS techniques, making it 
more scalable, reliable and cost-effective.
2  Technologies
    In this section, we review biotechnology applications to climate 
mitigation in four broad categories: products; agricultural inputs and 
climate services; new biotech tools and bio-industrial manufacturing; 
and plant and animal biotechnologies.
2.1  Products
2.1.1  Advanced Biofuels
    Liquid biofuels were one of the earliest biotechnology products to 
be deployed at scale in the U.S. for the purpose of achieving 
greenhouse gas (GHG) emission reductions. In the early 21st century, 
production mostly took the form of the first-generation biofuels 
ethanol and biodiesel, derived from feedstocks such as corn and 
vegetable oils. Concerns about competition for these feedstocks with 
the food and animal feed sectors prompted the development of second-
generation liquid biofuels that are produced from low-carbon-intensity 
(CI) feedstocks, such as lignocellulosic biomass.
    Existing first-generation biofuels pathways rely heavily on the 
fermentation of starch-rich feedstocks to ethanol and, to a lesser but 
still substantial extent, the transesterification or hydrotreating of 
vegetable oils to biodiesel or renewable diesel, respectively. 
Fermentation is one of the oldest examples of biotechnology, having 
been mastered by humans thousands of years ago for the purpose of 
producing alcoholic beverages. Glucose is easily fermented by the 
microorganism Saccharomyces cerevisiae to yield a diluted form of 
ethanol known in the industry as ``beer''. Distillation of this 
intermediate produces a high-proof ethanol that is then blended with 
gasoline for use in motor vehicles. Most gasoline in the U.S. today 
contains 10% ethanol, with 15% blends increasingly available.\7\
---------------------------------------------------------------------------
    \7\ https://www.eia.gov/todayinenergy/detail.php?id=40095.
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    Advances in biotechnology have enabled U.S. ethanol producers to 
achieve substantial efficiency improvements in recent decades that have 
enabled the volume of first-generation ethanol obtained from a bushel 
of corn to increase by more than 10% between 1982 and 2014.\8\ Milling 
improvements based on improved knowledge of corn kernel composition 
increased conversion efficiency, reducing the amount of corn 
required.\9\ Likewise, a better understanding of yeast biology led to 
ethanol yield optimization via temperature-controlled fermentation.\10\ 
And advanced fractionation techniques have allowed for greater yield of 
co-products, such as distillers dry grains (DDGS), a key animal feed 
ingredient. Together these advances have improved the process economics 
and sustainability of the pathway by reducing costs and waste. The EPA 
estimates them to have resulted in reductions to ethanol's carbon 
intensity in excess of 10%.\11\ A shift to more sustainable growing 
practices, driven by a desire to capture the compliance value of low-
carbon programs such as the California Low Carbon Fuel Standard (LCFS), 
is further reducing the carbon intensity of first-generation fuels. And 
the prospect of deploying carbon capture technology at ethanol plants, 
detailed in section 2.2.2, could reduce the carbon footprint of first-
generation ethanol by an additional 40%.\12\
---------------------------------------------------------------------------
    \8\ https://www.eia.gov/todayinenergy/detail.php?id=21212.
    \9\ https://agresearchmag.ars.usda.gov/ar/archive/2004/jul/
corn0704.pdf.
    \10\ http://www.sciencedirect.com/topics/engineering/fermentation-
temperature.
    \11\ http://www.tandfonline.com/doi/full/10.1080/
17597269.2018.1546488.
    \12\ http://www.pnas.org/content/pnas/early/2018/04/18/
1719695115.full.pdf.
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    Biotechnology has also made a wide range of low-carbon intensity 
feedstocks available for utilization by biofuel producers. Glucose is a 
fundamental building block of plants, and plants possess multiple 
defense mechanisms to protect themselves from yeast and other 
microorganisms that consume glucose. Plants' glucose content takes the 
form of the polysaccharide cellulose that is not digestible by most 
living things (one notable exception being termites). Other simple 
sugars such as arabinose and xylose comprise a second type of major 
polysaccharide that plants contain, hemicellulose. Plants are further 
protected by a third compound with antimicrobial properties, lignin, 
that is cross-linked with cellulose and hemicellulose to protect them 
against attack by microorganisms. These traits allow plants to thrive 
in the wild but have also posed a major hurdle to their use as a 
second-generation biofuel feedstock by inhibiting their conversion to 
ethanol via fermentation.
    Recent progress in the development of biocatalysts and engineered 
microorganisms has made possible the production of ethanol from second-
generation feedstocks such as grasses, shrubs, and other dedicated 
energy crops. The enzymatic hydrolysis pathway employs biocatalysts to 
break cellulose and hemicellulose down to glucose and other constituent 
sugars. The glucose is converted to fuel ethanol in the same manner as 
corn glucose. Microorganisms that are naturally able to ferment glucose 
have been engineered to make them capable of also fermenting simple 
sugars derived from hemicellulose to ethanol, improving both yields and 
efficiencies of lignocellulosic biofuel production.
    An early commercial application of this pathway utilizes the 
lignocellulose that is found in small quantities in corn kernels to 
produce ethanol. Biotech companies POET, Syngenta, and Enogen, among 
others, have begun adding corn kernel fiber conversion units to first-
generation ethanol plants, potentially increasing ethanol yield per 
bushel of corn by nearly 10%.\13\
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    \13\ http://illinoisrfa.org/wp-content/uploads/2019/02/Short-
Version-CKF-EthanolTechnolo
gies-final-1.pdf.
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    The full potential of cellulosic biofuel to mitigate climate change 
will depend on broad deployment of cellulosic technology to 
agricultural residues, municipal solid waste (MSW), and dedicated 
energy crops. An initial wave of cellulosic ethanol biorefinery 
construction occurred following the 2009 implementation of the Federal 
Renewable Fuel Standard (RFS) program. Leading first-generation ethanol 
producers such as POET, LLC, have partnered with leading biotech 
innovators to build first-of-a-kind cellulosic biofuel plants in the 
U.S., Europe, and South America, but low oil prices, policy obstacles, 
and technology challenges have limited global production volumes.
    Advances in biotechnology have expanded the supply of feedstocks 
available to biodiesel and renewable diesel, two of the major success 
stories in sustainable transportation. Biodiesel (BD) is produced via 
the transesterification process in which lipid feedstocks are reacted 
with methanol to yield a fatty acid methyl ester (FAME) that can be 
blended into conventional diesel, without needing any modification to 
the engine. Renewable diesel (RD) is made by hydrotreating the same 
kind of lipid feedstocks, in a process very similar to parts of 
conventional oil refining; it has performance characteristics like 
those of diesel fuel, passes the same product specifications and can be 
used in any diesel engine at any concentration. Historically most U.S. 
BD and RD have been produced from soybean oil.\14\ The need for new 
feedstocks has grown over the last decade, however, as production has 
expanded and policies such as California's Low Carbon Fuel Standard 
(LCFS) have incentivized the use of second-generation low-carbon 
intensity feedstocks. Some of these newer feedstocks are waste products 
that are not as easily converted to biodiesel as first-generation 
feedstocks. Biocatalysts have been developed that improve the 
conversion efficiencies and performance characteristics of biodiesel 
that is yielded from waste feedstocks,\15\ allowing for more of them to 
be converted to low-carbon transportation fuel.
---------------------------------------------------------------------------
    \14\ Unnasch. S. and D. Parida (2021) GHG Reductions from the 
RFS2--A 2020 Update. Life Cycle Associates Report LCA. 
LCA.6145.213.2021 Prepared for Renewable Fuels Association. https://
ethanolrfa.org/wp-content/uploads/2021/02/LCA_-_RFS2-GHG-
Update_2020.pdf.
    \15\ http://www.biodieselmagazine.com/articles/9481/
commercializing-enzymatic-biodiesel-production.
---------------------------------------------------------------------------
    Biotechnology has also enabled the production of novel low-carbon 
fuels that complement existing ethanol and biodiesel production. First-
generation biofuels have a limited ability to widely displace existing 
fossil fuels due to infrastructure compatibility hurdles. The U.S. only 
allows ethanol blends of up to 15% by volume with gasoline in non-flex 
fuel vehicles\16\ and most diesel engine warranties only cover 
biodiesel blends of up to 20% by volume.\17\ Moreover, neither is 
capable of displacing specialized fossil fuels such as aviation fuel. 
Technological advances have yielded a new category of ``drop-in 
biofuels''--so named for their ability to utilize the existing refined 
fuels infrastructure--that have an even greater de-carbonization 
potential.
---------------------------------------------------------------------------
    \16\ http://www.epa.gov/renewable-fuel-standard-program/final-
rulemaking-modifications-fuel-regulations-provide-flexibility.
    \17\ http://www.biodiesel.org/using-biodiesel/oem-information.
---------------------------------------------------------------------------
    Biobutanol (butanol derived from biomass) was one of the first 
biofuels to gain attention for its drop-in properties, as it chemically 
behaves more like a hydrocarbon than ethanol does. While actually an 
intermediate to renewable hydrocarbons (see below), biobutanol's high 
energy equivalence ratio compared to ethanol and ability to be blended 
with gasoline at rates of up to 16% by volume allow it to displace 
correspondingly larger volumes of gasoline.\18\ Biobutanol is produced 
via fermentation from the same simple sugars as in ethanol production. 
Some biofuel producers have genetically modified ethanol yeast to 
instead produce isobutanol. There are also pathways that utilize 
bacteria for the conversion rather than yeast. Biobutanol can also be 
produced via engineered microorganisms from the carbohydrates in some 
microalgae strains that remain after lipids have been extracted, 
allowing for microalgae to serve as a simultaneous feedstock for both 
biobutanol and biomass-based diesel.\19\
---------------------------------------------------------------------------
    \18\ http://afdc.energy.gov/fuels/emerging_biobutanol.html.
    \19\ Sabarathinam S.. et al., Recent developments and strategies in 
genome engineering and integrated fermentation approaches for 
biobutanol production from microalgae. Fuel, 285, 2021, 119052, ISSN 
0016-2361, https://doi.org/10.1016/j.fuel.2020.119052. https://www.sci
encedirect.com/science/article/pii/S0016236120320482.
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    More recently, biobutanol has attracted interest as a key step 
towards production of the renewable hydrocarbon fuels isooctane and 
sustainable aviation fuel SAF). Unlike biobutanol, which is an alcohol, 
biobased isooctane and SAF are hydrocarbons with performance 
characteristics that are very similar to their fossil counterparts 
(isooctane is an important blending component in gasoline). They are 
true drop-in biofuels in that they can be used in the same quantities 
as the fossil fuels that they displace before encountering 
infrastructure constraints.
    Biotechnology has also enabled the production of SAF directly from 
biomass via fermentation. Historically the conversion of biomass to 
hydrocarbons via fermentation has been limited by the presence of 
oxygen in biomass that has caused microorganisms to favor oxygen-
containing products (e.g., ethanol, butanol). Metabolic engineering has 
been employed to improve the yield of the specific hydrocarbon, 
kerosene, that comprises a common form of aviation fuel by increasing 
the selectivity of fermenting microorganisms.\20\ The microorganisms 
are able to convert sugars derived from a variety of feedstock types to 
SAF.\21\ Hydrocarbons have hydrophilic properties, allowing those 
produced in this manner to avoid the need for the energy-intensive 
distillation step that is required when producing fuel alcohols.
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    \20\ Straathof A.J.J., Cuellar M.C. Microbial Hydrocarbon Formation 
from Biomass. Adv. Biochem. Eng. Biotechnol. 2019; 166: 411-425. doi: 
10.1007/10_2016_62. PMID: 28707104. http://pubmed.ncbi.nlm.nih.gov/
28707104/.
    \21\ http://www.etipbioenergy.eu/images/
ETIP_Bioenergy_Factsheet_Aviation_Biofuels.pdf.
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    Biofuels currently supply approximately 12% of U.S. on-road 
transportation fuel.\22\ Ethanol and biodiesel currently comprise the 
large majority of U.S. biofuels consumption. Production of second-
generation biofuels is expected to increase rapidly during the early 
2020s, however, as the new feedstocks and pathways made possible by 
biotechnology breakthroughs are commercialized (see Figure 1).\23\ A 
combination of factors is responsible for this development. First, the 
COVID-19 pandemic has seriously disrupted demand for fossil fuels in 
the U.S. transportation sector, in turn limiting demand for biofuels 
such as ethanol that have restrictive blend limits. Second, policies 
such as the Federal revised Renewable Fuel Standard (RFS2), the 
California Low Carbon Fuel Standard (LCFS) and the Oregon Clean Fuels 
Program incentivize second-generation biofuels, with their lower carbon 
intensities, over first-generation biofuels (and both over fossil 
fuels). Third, whereas the last decade's rapid growth in first-
generation biofuels production has slowed due to supply constraints, 
second-generation feedstocks remain underutilized.\24\
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    \22\ http://www.govinfo.gov/content/pkg/FR-2020-02-06/pdf/2020-
00431.pdf.
    \23\ http://www.eia.gov/todayinenergy/detail.php?id=43096.
    \24\ http://www.energy.gov/eere/bioenergy/2016-billion-ton-report.
---------------------------------------------------------------------------
Figure 1: Estimated U.S. biofuel production volumes by type of fuel, 
        2010-2050.
U.S. Production of Selected Biofuels in AEO2020 Reference Case (2010-
        2050)
(million barrels per day (MMb/d))


          Source: U.S. Energy Information Administration.[\25\]
---------------------------------------------------------------------------
    \25\ http://www.eia.gov/todayinenergy/detail.php?id=43096.

    The carbon intensities of biofuels vary widely depending on 
feedstock(s), conversion processes, and the geographic length of the 
supply chain. California publishes detailed carbon intensities of the 
biofuels that participate in its LCFS for both broad biofuel categories 
as well as individual producers. Ethanol, which has historically been 
the primary source of biofuels under the LCFS by volume, has achieved 
average GHG emission reductions compared to gasoline of between 32% and 
41% in recent years.\26\ Ethanol from waste, or dedicated energy crop 
feedstocks, have achieved GHG reductions of up to 80% with current 
technology.\27\ Continued improvements in feedstock production, 
conversion efficiency, and co-products are expected to yield pathways 
with negative carbon scores.\28\
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    \26\ http://ww3.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm.
    \27\ http://ww3.arb.ca.gov/fuels/lcfs/dashboard/dashboard.htm.
    \28\ Kim S., Zhang X., Reddy A.D., Dale B.E., Thelen K.D., Jones 
C.D., Izaurralde R.C., Runge T., Maravelias C. Carbon-Negative Biofuel 
Production. Environ. Sci. Technol. 2020 Sep. 1; 54(17): 10797-10807. 
doi: 10.1021/acs.est.0c01097. Epub 2020 Aug. 19. PMID: 32786588. http:/
/pubmed.ncbi.nlm.nih.gov/32786588/.
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    Similarly, biodiesel has achieved average GHG emission reductions 
compared to diesel fuel of between 69% and 74% over the same period, 
although individual reduction values range from as low as 50% to over 
90% depending on the feedstock used.\29\ In both cases, California 
reports the lowest carbon intensities for those biofuels that are 
produced from waste feedstocks, illustrating the value that 
biotechnology has provided by helping to make such feedstocks usable by 
biofuels producers.
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    \29\ http://ww3.arb.ca.gov/fuels/lcfs/dashboard/dashboard.htm.
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    Biobutanol from lignocellulosic biomass has yet to achieve 
commercial-scale production volumes and does not have published LCFS 
carbon intensity values as a result. Independent life cycle assessments 
estimate a GHG emission reduction for the biofuel compared to gasoline 
of approximately 66%, which is comparable to ethanol from 
lignocellulosic biomass.\30\ Likewise, SAF from biobutanol is estimated 
to achieve GHG emission reductions compared to petroleum aviation fuel 
of between 60% and 75% depending on the choice of feedstock and 
conversion inputs.\31\
---------------------------------------------------------------------------
    \30\ Tao, L., Tan, E.C.D., McCormick, R., Zhang, M., Aden, A., He, 
X. and Zigler, B.T. (2014), Techno-economic analysis and life-cycle 
assessment of cellulosic isobutanol and comparison with cellulosic 
ethanol and n-butanol. Biofuels, Bioprod. Bioref., 8: 30-48. http://
doi.org/10.1002/bbb.1431 https://onlinelibrary.wiley.com/doi/full/
10.1002/bbb.1431.
    \31\ de Jong, S., Antonissen, K., Hoefnagels, R., et al. Life-cycle 
analysis of greenhouse gas emissions from renewable jet fuel 
production. Biotechnol Biofuels 10, 64 (2017). https://doi.org/10.1186/
s13068-017-0739-7. http://link.springer.com/article/10.1186/s13068-017-
0739-7.
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    GHG emissions are not the only form of air pollution that the use 
of biofuels reduces. Emissions of criteria pollutants such as carbon 
monoxide, particulate matter, and sulfur dioxide have a direct impact 
on human health, causing air pollution to be one of the main risk 
factors causing non-communicable diseases globally.\32\ The combustion 
of commonly used biofuels in both blended and unblended forms has been 
found to reduce many, if not all, of the criteria pollutants that are 
emitted by the combustion of petroleum fuels.33-34 
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    \32\ Pruss-Ustun A., van Deventer E., Mudu P., Campbell-Lendrum D., 
Vickers C., Ivanov I., et al. Environmental risks and non-communicable 
diseases. BMJ 2019; 364: 1265 doi: 10.1136/bmj.l265. http://
www.bmj.com/content/364/bmj.l265.
    \33\ Sakai, S. and Rothamer, D. Impact of ethanol blending on 
particulate emissions from a spark-ignition direct-injection engine, 
Fuel, 236, 2019, 1548-1558, ISSN 0016-2361, https://doi.org/10.1016/
j.fuel.2018.09.037. http://www.sciencedirect.com/science/article/pii/
S00
16236118315746.
    \34\ Miller, C.A. Characterizing Emissions from the Combustion of 
Biofuels. U.S. Environmental Protection Agency, Washington, D.C., EPA/
600/R-08/069, 2008. http://cfpub.epa.gov/si/
si_public_record_report.cfm?Lab=NRMRL&dirEntryId=191572.


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      Gevo Case Study

          Gevo is an advanced renewable fuel producer that converts 
        renewable energy to energy-dense liquid hydrocarbons by 
        transforming renewable energy into low-carbon transportation 
        fuels. This next generation of renewable premium gasoline, jet 
        fuel and diesel fuel has the potential to achieve net-zero 
        carbon emissions, addressing the market need of reducing GHG 
        emissions with sustainable alternatives while continuing to 
        utilize current infrastructure and vehicles.
          The company originally converted an existing dry-mill corn 
        ethanol facility to a commercial-sized scaled up facility in 
        Luverne, Minnesota. The converted facility utilizes corn starch 
        as feedstock. While corn-based biofuels have not historically 
        been credited with large reductions to carbon intensity 
        relative to gasoline, Gevo employs an integrated approach to 
        carbon intensity reductions that maximizes the environmental 
        and sustainability potentials from agricultural systems, while 
        creating innovative solutions to convert the feedstocks into 
        energy-dense hydrocarbons.
          In January 2021, Gevo announced a new project, planned for 
        construction at Lake Preston, South Dakota, to be named ``Net-
        Zero 1.'' Gevo expects that Net-Zero 1 would have the 
        capability to produce liquid hydrocarbons that when burned have 
        a net-zero greenhouse gas footprint.\35\ Net-Zero 1 is expected 
        to have a capacity of 45 million gallons per year of 
        hydrocarbons for gasoline and jet fuel and will produce more 
        than 350 million pounds per year of high-protein feed products 
        for use in the food chain. In addition to feed and fuel, the 
        facility will produce enough renewable natural gas to be self-
        sufficient for production process needs. The facility will also 
        generate renewable electricity with a combined heat and power 
        system and integrate additional renewable power production 
        utilizing wind energy.
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    \35\ http://investors.gevo.com/news/net-zero-1-project.
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          Gevo's integrated approach utilizes de-carbonization 
        practices across the entire supply chain. It begins by working 
        with the farmers who employ best farming practices that 
        maximize soil carbon sequestration and minimize GHG emissions 
        during the planting, growing, and harvesting stages.\36\ The 
        partnership with farmers involves the active tracking and 
        monitoring of the feedstock suppliers to ensure that best 
        practices are encouraged and in the future can be incentivized 
        for the purpose of consistently minimizing feedstock carbon 
        intensity.
---------------------------------------------------------------------------
    \36\ http://www.iscc-system.org/wp-content/uploads/2017/02/
Sustainable-Aviation-Fuel.pdf.
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          Gevo also conducts experimental trials to identify additional 
        feedstock de-carbonization routes such as the use of manure in 
        place of nitrogen fertilizer application, enhanced soil carbon 
        sequestration via reduced soil tillage practices, and improved 
        crop yields via microbial soil solutions. The company estimates 
        that its corn feedstock has a carbon intensity that is at least 
        50% lower than the U.S. average.\37\
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    \37\ http://www.iscc-system.org/wp-content/uploads/2017/02/
Sustainable-Aviation-Fuel.pdf.
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          Because of the low-carbon-footprint feedstocks, the 
        sustainable agricultural practices used to produce feedstock, 
        and the use of renewable energy for the production processes--
        much of which is expected to be generated on site--the 
        hydrocarbon fuel products produced at Net-Zero 1 have the 
        potential to achieve net-zero greenhouse gas emissions, as 
        measured across the whole of the life cycle, based on Argonne 
        National Laboratory's GREET model. The GREET model takes into 
        account emissions and impacts ``cradle to cradle'' for 
        renewable resource based fuels, including inputs and generation 
        of raw materials, agriculture practices, chemicals used in 
        production processes of both feedstocks and products, energy 
        sources used in production and transportation, and end fate of 
        products.
          Gevo's Luverne facility also makes extensive use of other 
        sources of renewable energy to reduce the carbon intensity of 
        its production process. The production of biofuels such as 
        isobutanol from corn uses process heat and electricity that 
        have historically been obtained from fossil fuels, such as coal 
        and natural gas. And Gevo has installed wind turbines to 
        generate renewable electricity. Minnesota has abundant access 
        to low-cost wind power and Gevo pays ``about the same'' price 
        for electricity as it did prior to the installation of the wind 
        capacity.\38\ In 2019, Gevo announced its intention to utilize 
        renewable natural gas that is produced from dairy manure in 
        place of the fossil natural gas it used to produce process heat 
        in the past.\39\ In both cases, Gevo has been able to take 
        advantage of local renewable energy resources that are supplied 
        directly to the Luverne facility via transmission line and 
        natural gas pipeline.
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    \38\ http://gevo.com/about-gevo/our-plants/wind-project/.
    \39\ http://biomassmagazine.com/articles/16395/gevo-discusses-
plans-for-hydrocarbon-rng-production
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2.1.2  Renewable Chemicals and Biobased Products/Materials
    Fossil-derived chemicals and products are a key future driver of 
petroleum consumption.\40\ The chemicals sector (known as 
petrochemicals when derived from fossil feedstocks) accounts for a wide 
variety of common products, including plastics, synthetic rubber, 
solvents, fertilizers, pharmaceuticals, additives, explosives, and 
adhesives.\41\ They differ from fossil fuels in that their consumption 
does not normally cause GHG emissions via combustion. They are still 
produced from fossil fuels, though, especially petroleum and natural 
gas, and their production incurs both direct and indirect emissions. By 
one estimate the petrochemicals sector generates 18% of direct 
industrial GHG emissions, and its production capacity is growing 
rapidly.\42\ The sector is also, due to its reliance on fossil fuels, 
an important source of other forms of pollution that have a detrimental 
impact on human health, especially in disadvantaged communities.\43\ 
Moreover, many fossil-derived products such as plastics are resistant 
to degradation and end their useful lives either in landfills or in 
natural environments as litter.
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    \40\ http://www.nytimes.com/2018/10/04/climate/climate-change-
plastics.html.
    \41\ http://www.sciencedirect.com/book/9780128001585/project-
finance-for-the-international-petroleum-industry.
    \42\ Tayeb, B. GHG emissions from new petrochemical plants: 
background information paper for the elaboration of technical notes and 
guidelines for IDB projects. IDB Technical Note; Inter-American 
Development Bank, 2013. http://publications.iadb.org/publications/
english/document/Greenhouse-Gas-Emissions-from-New-Petrochemical-
Plants-Background-Information-Paper-for-the-Elaboration-of-Technical-
Notes-and-Guidelines-for-IDB-Projects.pdf.
    \43\ http://www.businessinsider.com/louisiana-cancer-alley-photos-
oil-refineries-chemicals-pollution-2019-11.
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    Biotechnology's contributions to efforts to mitigate the damage 
caused by fossil chemicals and products generally fall into one of two 
broad categories: (1) the replacement of these fossil-derived products 
by non-fossil products, and (2) the replacement of degradation-
resistant materials with biodegradable materials. A substantial amount 
of overlap exists between the two categories due to the novel 
production pathways and product types that have been developed by the 
biotechnology industry. The ability of biomass to replace a wide 
variety of fossil products has greatly benefited from recent 
biotechnology advances that have enabled the manufacture of products 
from both categories.\44\
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    \44\ Isikgor, F.H., Becer, C.R. Lignocellulosic biomass: a 
sustainable platform for the production of biobased chemicals and 
polymers. DOI: 10.1039/C5PY00263J (Review Article) Polym. Chem., 2015, 
6, 4497-4559. http://pubs.rsc.org/ko/content/articlehtml/2015/py/
c5py00263j.
---------------------------------------------------------------------------
    The petrochemical industry is expected to become a primary driver 
of demand for fossil fuels by 2030.\45\ Many advances have been made in 
the production of the same chemicals and products from biomass or 
recycled feedstocks rather than fossil feedstocks. One early biobased 
chemical was developed as an extension of biofuels production, allowing 
it to utilize existing production capacity. Ethanol obtained from corn 
and sugarcane, but potentially from lignocellulosic biomass in the 
future, is easily dehydrated to yield a biobased version of the 
plastics precursor ethylene.\46\ Plastics comprise most of the fossil 
chemicals market,\47\ giving biobased plastics an important role to 
play in its de-carbonization.
---------------------------------------------------------------------------
    \45\ IEA (2018), The Future of Petrochemicals, IEA, Paris. http://
www.iea.org/reports/the-future-of-petrochemicals.
    \46\ http://www.icis.com/explore/resources/news/2019/11/08/
10441869/brazil-braskem-mulls-new-renewable-ethylene-pe-capacity.
    \47\ http://www.usitc.gov/publications/332/working_papers/
using_waste_carbon_feedstocks_to_
produce_chemicals_0.pdf.
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    Biotechnology companies have also developed biobased versions of 
synthetic fibers that are used by the textile industry. Polyester, 
which is widely employed in the manufacture of textiles and bottles, is 
usually produced from natural gas and/or petroleum feedstocks. Its 
building blocks can instead be obtained either from ethanol, as in the 
production of biobased plastics, or from hydrocarbons that are directly 
converted from biomass feedstocks.48-49  In both pathways 
the resulting fibers are the same as those that are currently produced 
from fossil feedstocks, making them drop-in biobased products.
---------------------------------------------------------------------------
    \48\ http://www.ncfap.org/documents/biofuels_aviation/
Huber%20George%20Biofuels%20Re
view.pdf.
    \49\ Masuo, S., Zhou, S., Kaneko, T., et al. Bacterial fermentation 
platform for producing artificial aromatic amines. Sci. Rep. 6, 25764 
(2016). http://doi.org/10.1038/srep25764. http://www.nature.com/
articles/srep25764.
---------------------------------------------------------------------------
    Growing concerns over the longevity of plastic waste in the 
environment have also prompted the development of biodegradable 
plastics that are capable of decomposing over short timeframes compared 
to those of traditional plastics. The most common of these are 
polylactic acid (PLA) and polyhydroxyalkanoates (PHA). PLA is derived 
from plant sugars that are naturally fermented by bacteria to yield 
lactic acid. This lactic acid is then chemically converted to PLA for 
use as a biobased plastic.\50\ PHA is produced via the fermentation of 
plant sugars (although vegetable oils and even wastewater can also be 
used) by a different type of bacteria under very specific conditions 
that promote PHA synthesis.\51\ Biobased plastics made from both PLA 
and PHA are biodegradable under higher-temperature conditions such as 
those found in industrial composters.
---------------------------------------------------------------------------
    \50\ Rajeev Mehta, Vineet Kumar, Haripada Bhunia & S.N. Upadhyay 
(2005) Synthesis of Poly(Lactic Acid): A Review, Journal of 
Macromolecular Science, Part C, 45:4, 325-349, DOI: 10.1080/
15321790500304148. http://www.tandfonline.com/doi/abs/10.1080/153217905
00304148.
    \51\ Jingnan Lu, Ryan C. Tappel & Christopher T. Nomura (2009) 
Mini-Review: Biosynthesis of Poly(hydroxyalkanoates), Polymer Reviews, 
49: 3, 226-248, DOI: 10.1080/15583720903048243. http://
www.tandfonline.com/doi/abs/10.1080/
15583720903048243?journalCode=lmsc20.
---------------------------------------------------------------------------
    Biotechnology breakthroughs have also been made in the replacement 
of lesser known but equally important fossil products. Lubricants made 
from petroleum are in common use throughout the industrial and 
transportation sectors and, while they represent a small share of a 
typical refinery's product mix, they are a critical input for many 
applications (e.g., engine oil). Plant sugars can be fermented by 
bacteria to yield a chemical that is capable of conversion to biobased 
versions of the synthetic lubricants that are normally obtained from 
petroleum.\52\ In a similar application biodiesel, which has a high 
lubricity, is blended with petroleum-derived ultra-low sulfur diesel 
fuel to improve the latter's low lubricity.\53\ Finally, novel 
medicines and medical treatments are being developed through 
biotechnology, including those that are personalized to individual 
patients.\54\
---------------------------------------------------------------------------
    \52\ Balakrishnan, M., et al. Pathways for fuels and lubricants 
from biomass. Proceedings of the National Academy of Sciences. Jun. 
2015, 112 (25) 7645-7649; DOI: 10.1073/pnas.1508274112. http://
www.pnas.org/content/112/25/7645.short.
    \53\ hM.A. Hazrat, M.G. Rasul, M.M.K. Khan, Lubricity Improvement 
of the Ultra-low Sulfur Diesel Fuel with the Biodiesel, Energy 
Procedia, Volume 75, 2015, Pages 111-117, ISSN 1876-6102, http://
doi.org/10.1016/j.egypro.2015.07.619. http://www.sciencedirect.com/
science/article/pii/S1876610215013879.
    \54\ http://www.mckinsey.com/industries/pharmaceuticals-and-
medical-products/our-insights/the-bio-revolution-innovations-
transforming-economies-societies-and-our-lives.
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    Renewable chemicals and materials provide climate benefits through 
twin advantages. First, by leveraging biological production platforms, 
biobased products are frequently less energy-intensive to produce than 
their petrochemical counterparts. For example, BASF Corporation has 
developed a biobased home insulation product that results in 66% fewer 
GHG emissions than its fossil-based alternative.\55\ But, perhaps most 
significantly, whether produced from biomass or waste gases, biobased 
products are built from carbon that would otherwise reside in the 
atmosphere, and thus serve as a vital pathway for atmospheric carbon 
removal.
---------------------------------------------------------------------------
    \55\ http://www.basf.com/ca/en/who-we-are/sustainability/we-
produce-safely-and-efficiently/energy-and-climate-protection/our-
climate-protection-solutions.html (See Neoporr BMB).
---------------------------------------------------------------------------
    The direct recycling of GHG emissions, both biogenic and fossil in 
origin, to create chemicals and fuels has emerged as a notable pathway 
over the last decade. Landfills and animal waste lagoons are sources of 
biogenic emissions of the potent GHG methane. Methane is the primary 
component of natural gas, however, making biogenic methane when 
captured a potential biobased chemicals feedstock. Biogas captured from 
landfills and agricultural anaerobic digesters is also directly 
utilized as fuel for natural gas-powered vehicles.\56\ The use of 
biogas in both applications has especially large climate benefits 
because it eliminates a source of methane emissions while 
simultaneously displacing demand for a fossil feedstock (biogas 
combustion converts methane to the comparatively weaker GHG carbon 
dioxide).
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    \56\ http://www.greencarcongress.com/2019/12/20191229-lcfs.html.
---------------------------------------------------------------------------
    Finally, biotechnology advances have also enabled fossil GHG 
emissions to be captured and recycled via a pathway known as carbon 
capture and utilization (CCU), thereby reducing demand for fossil fuels 
and the resulting emissions without requiring biomass (see Section 
2.2.2). One novel process developed by carbon recycling pioneer 
LanzaTech utilizes engineered microorganisms to ferment emissions 
captured from industrial facilities such as steel mills to either fuels 
or chemicals, depending on the choice of microorganism.\57\ While the 
resulting products are not of biological origin, their climate benefits 
are substantial and comparable to those of biobased products in that 
both partially eliminate the need for fossil fuel extraction and serve 
as sinks for carbon that would otherwise be emitted to the atmosphere.
---------------------------------------------------------------------------
    \57\ http://www.usitc.gov/publications/332/working_papers/
using_waste_carbon_feedstocks_to_
produce_chemicals_0.pdf.
---------------------------------------------------------------------------
    Like biofuels, the market for biobased chemicals has been 
constrained by persistent low natural gas and petroleum prices for much 
of the last decade. The lack of mandates or other policy mechanisms in 
the U.S. that internalize biotechnology products' climate benefits have 
made it still more difficult for biobased pathways to compete with 
fossil pathways. That said, a growing interest by many manufacturers 
and their consumers in reducing their climate impacts in service of ESG 
goals has supported an expansion of the U.S. biobased products industry 
despite these hurdles. One recent analysis estimated the industry's 
size to be $459 billion in terms of valued added to the U.S. economy in 
2016, up from $393 billion in 2014 and $353 billion in 2012.\58\ These 
bioproducts were estimated to displace 9.4 million barrels of petroleum 
equivalents in 2016. While still smaller than the fossil products 
sector--the U.S. chemicals industry alone achieved $765 billion in 
sales in 2017 \59\--the U.S. biobased products industry is expected to 
grow rapidly as state governments and corporations increasingly act to 
minimize plastic waste, methane emissions, and other forms of 
pollution.\60\
---------------------------------------------------------------------------
    \58\ http://www.biopreferred.gov/BPResources/files/
BiobasedProductsEconomicAnalysis20
18.pdf.
    \59\ http://www.selectusa.gov/chemical-industry-united-states.
    \60\ http://www.usda.gov/sites/default/files/documents/usda-
bioindicators-jan-2020.pdf.
---------------------------------------------------------------------------
    Biodegradable biobased products have the potential to substantially 
contribute to climate change mitigation efforts due to their ability to 
achieve net carbon sequestration under certain production conditions. A 
life cycle analysis of the biodegradable bioplastic PHB calculated 
negative GHG emissions for the product when produced from either corn 
or biogas, with the greatest amount of carbon sequestration occurring 
when the PHB is produced from existing PHB that has degraded to 
biogas.\61\ A separate analysis of PHA production determined that the 
bioplastic has a carbon intensity that is 80% lower than that of 
fossil-derived plastics even before taking into account the PHA's 
ability to be recycled following biodegradation.\62\ Biobased PLA for 
use in water bottles has likewise been found to have a substantially 
lower carbon intensity than fossil-derived plastic.\63\ Finally, a 
comparison of multiple chemicals and fuels pathways determined that 
products derived from recycled carbon dioxide achieved carbon intensity 
reductions compared to conventional fossil products despite ultimately 
being derived from fossil feedstocks.\64\
---------------------------------------------------------------------------
    \61\ Environ. Sci. Technol. 2012, 46, 18, 9822-9829, July 9, 2012. 
http://pubs.acs.org/doi/full/10.1021/es204541w.
    \62\ Environ. Sci. Technol. 2008, 42, 18, 6961-6966. August 16, 
2008. http://pubs.acs.org/doi/abs/10.1021/es7032235.
    \63\ Papong, S., et al. Comparative assessment of the environmental 
profile of PLA and PET drinking water bottles from a life cycle 
perspective, Journal of Cleaner Production, 65, 2014, 539-550, ISSN 
0959-6526, http://www.sciencedirect.com/science/article/abs/pii/
S0959652613
006331.
    \64\ http://www.iea.org/reports/putting-co2-to-use.
---------------------------------------------------------------------------
    Biobased products such as renewable chemicals historically have not 
received as much attention from policymakers as biofuels, due to the 
lack of direct emissions resulting from their use. That is changing, 
however, as policymakers in states such as California and New York have 
implemented economy-wide restrictions on GHG emissions. In addition to 
disincentivizing the use of fossil feedstocks in energy-intensive 
manufacturing processes, such policies also encourage entities such as 
steel mills and refineries to develop new revenue streams via the 
implementation of CCU technologies.\65\ Biotechnology provides a wide 
range of options for reducing the carbon intensities of many of the 
biobased chemicals and products upon which the U.S. economy relies.
---------------------------------------------------------------------------
    \65\ http://www.cdp.net/en/articles/media/steel-sector-faces-
significant-losses-from-future-climate-regulation.


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      Danimer Scientific Case Study

          Biobased PHA is Danimer Scientific's primary bioplastics 
        product. The company manufactures the polyester at a commercial 
        facility in Winchester, Kentucky, by feeding a bacterium with 
        inexpensive vegetable oil feedstock derived from agricultural 
        oilseed crops such as canola, and soy. In addition to directly 
        displacing the fossil fuels used in the manufacture of 
        conventional plastics, Danimer Scientific's production pathway 
        also provides indirect environmental benefits.
          Danimer Scientific obtains vegetable oils via the crushing of 
        oilseeds. The crushing process yields protein-rich byproducts 
        that are employed as a natural fertilizer and livestock feed. 
        The vegetable oils are consumed by soil bacteria that 
        biosynthesize the PHA in a bioreactor. The PHA is then 
        separated from the bioreactor medium, purified, and dried in 
        preparation for conversion to various plastic resins, blending 
        with other biopolymers such as PLA, or bonding with materials 
        such as paper.\66\
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    \66\ http://danimerscientific.com/pha-beginning-of-life/.
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          Danimer Scientific's biobased PHA possesses performance 
        parameters that are comparable to those of many fossil plastics 
        and are capable of use in many of the same applications, 
        including food preservation and storage and conversion to 
        multiple types of finished resins. Unlike fossil plastics, 
        however, PHA utilizes only renewable feedstocks and is 
        biodegradable. This latter characteristic is an important 
        advantage over fossil plastics at a time of growing concern 
        over land-filling and the widespread presence of non-
        biodegradable plastic waste in many ecosystems.
        
        
      Genomatica Case Study

          Genomatica has commercialized a more sustainable, biobased 
        technology to make a key ingredient used in apparel, spandex, 
        footwear, and plastics used in electronics and automotive 
        parts. Millions of tons per year of this ingredient, 1,4-
        butanediol (BDO), are currently produced from fossil-derived 
        feedstocks, resulting in many millions of tons per year of 
        greenhouse gas emissions. By contrast, Genomatica's GENO 
        BDOTM process uses renewable feedstocks--the sugars 
        that come from locally-grown crops such as corn and sugarcane--
        along with engineered microorganisms and fermentation. The 
        products made with Genomatica's ingredient have 56% lower 
        carbon intensity,\67\ and their renewable content is 
        traceable--meaning customers know that the carbon actually came 
        from plants. Genomatica's technology also avoids the use of 
        toxic compounds like formaldehyde, common to fossil processes.
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    \67\ http://www.brontidebg.com/wp-content/uploads/2020/10/
Genomatica-Sustainability-and-Social-Responsibility-2019.pdf.
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          Genomatica's technology has been proven at industrial scale 
        since 2012. Italy-based plastics manufacturer Novamont started 
        production of biobased BDO at a 30,000 ton per year capacity 
        plant in 2016, built with Genomatica's licensed technology. 
        Novamont's BDO has been used in compostable produce bags, mulch 
        film and coffee capsules. BASF has also licensed Genomatica's 
        BDO technology. The Novamont plant is the world's first 
        commercial scale plant to make a widely-used intermediate 
        chemical biologically. Genomatica has received repeated 
        recognition for its innovations, including three EPA Green 
        Chemistry awards, the Kirkpatrick award and ICIS Innovation 
        awards.
2.1.3  Food and Feed Ingredients
    According to the 2019 U.N. IPCC Special Report on Climate Change 
and Land, the global food system--including the land and resources to 
raise animals and grow crops, plus processing, packaging, and 
transportation--is responsible for up to 19.1 GtCO2eq 
annually, or 37% of total net GHG emissions.\68\ The report finds that 
changes in both production and consumption are needed to meet global 
emissions reduction objectives. Biotechnology offers the potential for 
substantial emissions reductions at every stage of the food system, 
including potentially transformative solutions in food and feed 
ingredients.
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    \68\ http://www.ipcc.ch/srccl/chapter/summary-for-policymakers/.
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    Animal products account for the largest segment of food sector 
emissions. According to the FAO, livestock production accounts for 
approximately 7.1 GtCO2eq annually, or 15% of global GHG 
emissions, and consumes roughly \1/4\ of available land worldwide, with 
meat production expected to increase 19%, and dairy production 33%, 
from 2017 levels by 2030.\69\ Solutions that reduce dependence on 
animals offer the greatest potential for emissions reductions from the 
food sector. But, given the growing global demand for meat and other 
animal products, sustainable near-term solutions are also needed for 
animal agriculture. Biotechnology is playing a leading role in the 
development of both new low-carbon product choices and technologies to 
reduce the carbon footprint of animal agriculture.
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    \69\ http://www.fao.org/ag/againfo/resources/en/publications/
tackling_climate_change/in
dex.htm.

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    Plant-Based Proteins and Food Products

    A recent analysis found that if Americans opted for nutritionally 
equivalent plant-based products for their meat (beef, chicken and pork) 
consumption choices, U.S. GHG emissions would be reduced by 280 million 
metric tons annually--roughly equivalent to the total emissions of the 
state of Ohio.\70\ Consumer concerns with the carbon footprint of 
animal agriculture--along with health and animal welfare 
considerations--are driving strong growth in plant-based proteins and 
food product choices. Many of the leading options leverage 
biotechnology.
---------------------------------------------------------------------------
    \70\ Eshel, G., Stainier, P., Shepon, A., et al. Environmentally 
Optimal, Nutritionally Sound, Protein and Energy Conserving Plant Based 
Alternatives to U.S. Meat. Sci. Rep. 9, 10345 (2019). http://doi.org/
10.1038/s41598-019-46590-1. https://www.nature.com/articles/s41598-019-
46590-1.
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    Impossible Foods, the fourth fastest growing brand in the U.S. in 
2019,\71\ uses engineered yeast to add heme, an iron-containing 
molecule found in blood, to its plant-based products to produce a meaty 
flavor. As of September 2020, Impossible Foods burgers were in 11,000 
supermarkets and on the menu of a growing list of national and regional 
restaurant chains.\72\ A 2019 lifecycle analysis of Impossible Foods' 
burger found a 89% reduction in carbon footprint and 96% reduction in 
land use versus traditional beef burgers.\73\
---------------------------------------------------------------------------
    \71\ http://morningconsult.com/wp-content/uploads/2019/12/Morning-
Consult_Fastest-Growing-Brands-2019-Report_FINAL.pdf.
    \72\ http://impossiblefoods.com/media/news-releases/2020/09/
impossible-foods-quickly-expands-to-canadas-favorite-restaurant-chains.
    \73\ http://impossiblefoods.com/mission/lca-update-2019/.
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    Perfect Day Foods is bringing a similar approach to milk, cheese 
and ice cream, using genetically engineered microbes to produce animal-
free dairy products.\74\ Given the high carbon intensity of dairy 
products (nearly 12 kilograms of carbon dioxide are produced for every 
kilogram of butter, for example) \75\ plant-based dairy has the 
potential to have an outsized impact.
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    \74\ http://www.perfectdayfoods.com/.
    \75\ http://www.nrdc.org/sites/default/files/10-common-climate-
damaging-foods-info
graphic.pdf.
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    Motif FoodWorks, a spinoff of biotech leader Ginkgo Bioworks, is 
employing synthetic biology to develop fermentation-based ingredients 
to enhance the taste and texture of plant-based meat and dairy options. 
Motif is expected to launch its first commercial product--an ingredient 
to improve the flavor of beef substitutes--in 2021.\76\
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    \76\ http://techcrunch.com/2020/10/01/motif-foodworks-preps-
commercial-production-for-its-first-ingredient-improving-the-flavor-of-
beef-substitutes/.
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    One of the more novel applications of biotechnology is cultured 
meat products. New Age Meats is one of several companies working to 
produce cultured meat, an engineered tissue produced in laboratories by 
microorganisms that induce and feed the growth of animal muscle cells 
in a bioreactor. Unlike plant-based approaches, cultured meat is a 
drop-in option for applications in which specific meat attributes are 
desired. Cultured meat production is an energy-intensive process that 
requires more energy than poultry production and almost as much energy 
as pork production (albeit less than sheep or cattle production). But 
cultured meat's lack of methane production and ability to utilize low-
carbon energy sources is projected to reduce GHG emissions up to 96% 
compared to traditional meat products.\77\ Cultured meat production 
also utilizes a small fraction of the land required by livestock 
production, potentially resulting in lower indirect GHG emissions from 
land-use change. Cultured meat's consumer acceptance is currently 
limited by its high production costs and novelty, although this is 
expected to change as the product moves toward commercialization.\78\
---------------------------------------------------------------------------
    \77\ Environ. Sci. Technol. 2011, 45, 14, 6117-6123, June 17, 2011. 
http://pubs.acs.org/doi/full/10.1021/es200130u.
    \78\ Christopher Bryant, Julie Barnett, Consumer acceptance of 
cultured meat: A systematic review, Meat Science, 143,2018, Pages 8-17, 
ISSN 0309-1740, https://doi.org/10.1016/j.meatsci.2018.04.008. http://
www.sciencedirect.com/science/article/abs/pii/S0309174017314
602.

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    Feed and Feed Ingredients

    Roughly half of animal agriculture emissions result from land use, 
production and processing of animal feed.\79\ Biotechnology is being 
harnessed to address feed-related emissions from multiple angles, from 
development of new, low-carbon feed options and lower-carbon approaches 
to feed production to ingredients that reduce feed waste.
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    \79\ http://www.fao.org/ag/againfo/resources/en/publications/
tackling_climate_change/in
dex.htm.
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    In addition to developing biotech options for animal products, 
biotech innovation is also being deployed to develop new, low-carbon 
animal feeds. NouriTech, a joint venture between biotech start-up 
Calysta and Cargill, is among a growing list of companies using 
microorganisms to convert methane and other heat-trapping waste gases 
into single-cell proteins or other ingredients for animal feed. In 
addition to recycling GHGs that would otherwise be emitted directly to 
the atmosphere, this process, known as gas fermentation, does not 
require the use of arable land, avoiding the largest source of GHG 
emissions associated with feed production. A lifecycle analysis of 
NouriTech's FeedKind fish feed protein found GHG emissions up to 30 
percent lower than conventional fish meal, depending on the source of 
methane used.\80\ Several biotech businesses are also developing feed 
ingredients using algae. Similar benefits are anticipated.
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    \80\ http://www.carbontrust.com/resources/assessment-of-
environmental-footprint-of-feedkind-protein.

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    Reducing Emissions from Animals

    Another leading source of GHGs from agriculture are emissions from 
the animals themselves. Roughly 40% of all animal agriculture emissions 
is attributable to methane from enteric fermentation in the digestive 
system of ruminant animals, for example.\81\ Biotech solutions are 
being developed to address emissions from cattle, swine, poultry, and 
other animals.
---------------------------------------------------------------------------
    \81\ http://www.fao.org/ag/againfo/resources/en/publications/
tackling_climate_change/in
dex.htm.
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    Cattle are the leading source of animal emissions, due to the large 
numbers of cattle grown globally and their high levels of enteric 
methane production. Microbial feed additives have the potential to 
dramatically reduce enteric methane emissions from ruminant livestock 
by disrupting the methane production process. One ester additive 
suppresses the enzyme that causes methane production in the digestive 
tracts of cattle, reducing methane emissions by 30% or more.\82\ A 
study in peer review of microbial feed additives developed by biotech 
start-up Locus Fermentation Solutions found reduction in methane levels 
of up to 78%.\83\ And recent studies have found methane reductions of 
up to 99% using certain species of algae.84-85  Feed 
additives based on extracts of garlic and citrus have also produced 
strong results.\86\ All three additives are being developed for the 
market. Finally, two other feed additives that are already on the 
market, one a yeast culture \87\ and the other a blend of essential 
oils,\88\ reduce dairy cow methane emissions indirectly by increasing 
the efficiency of milk production, thereby reducing the number of 
methane-emitting dairy cows needed to produce a certain volume of milk.
---------------------------------------------------------------------------
    \82\ Proceedings of the National Academy of Sciences. Aug. 2015, 
112 (34) 10663-10668; DOI: 10.1073/pnas.1504124112. http://
www.pnas.org/content/112/34/10663.
    \83\ http://locusfs.com/leading-california-university-finds-78-
percent-reduction-in-livestock-methane-emissions-with-direct-fed-
microbials-from-locus-fermentation-solutions/.
    \84\ http://www.biorxiv.org/content/10.1101/
2020.07.15.204958v1.abstract.
    \85\ http://www.sciencedirect.com/science/article/abs/pii/
S0959652619321559.
    \86\ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC7200514/.
    \87\ http://www.sciencedirect.com/science/article/abs/pii/
S108074461530139X.
    \88\ http://www.mdpi.com/2076-2615/10/4/620.
---------------------------------------------------------------------------
    Biotech enzymes from Novozymes and others have also been introduced 
into pig and chicken feed to improve nutrient uptake, reduce waste, and 
substantially reduce carbon footprint.\89\
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    \89\ http://biosolutions.novozymes.com/animal-health-nutrition/en/
insights/whitepaper/making-feed-more-sustainable.
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    Emissions of methane and nitrous oxide from manure is another 
significant source of GHGs, accounting for ten percent of emissions 
from animal agriculture.\90\ As mentioned previously, biotechnology has 
a key role in reducing these emissions as well. The use of anaerobic 
digestion in animal agriculture has the potential to reduce U.S. GHG 
emissions by 151 MTCO2eq. annually by 2050 using current 
technology.\91\ Considerable research and development is also underway 
to utilize biotechnology to improve the efficiency of anaerobic 
digestion through optimization of the microbes and microbial 
communities used.\92\
---------------------------------------------------------------------------
    \90\ http://www.fao.org/ag/againfo/resources/en/publications/
tackling_climate_change/in
dex.htm.
    \91\ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3155279/.
    \92\ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC7198183/.
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    Open manure lagoons are capable of both reducing existing methane 
emissions and displacing fossil fuels when converted to enclosed 
anaerobic digesters. These systems capture the lagoons' methane 
emissions in the form of biogas that can be used to displace fossil 
fuels such as natural gas as a source of heat and/or electricity. The 
combustion of the biogas converts the methane into the less-potent GHG 
carbon dioxide. (One ton of methane has 84 times the global warming 
potential over 20 years of a ton of carbon dioxide.) \93\ This 
capability, when combined with fossil fuel displacement, can result in 
carbon intensity values for biogas that are very negative despite not 
involving net carbon sequestration. Biogas that is produced from dairy 
manure and injected into natural gas pipelines for use as 
transportation fuel in compressed natural gas vehicles under 
California's LCFS has received certified carbon intensities that are 
almost four times lower than that of gasoline, for example.\94\ One 
estimate calculated that up to 3% of total U.S. electricity consumption 
could be met by biogas produced in manure lagoons and captured for use 
with microturbines.\95\
---------------------------------------------------------------------------
    \93\ http://www.epa.gov/ghgemissions/understanding-global-warming-
potentials.
    \94\ http://ww2.arb.ca.gov/resources/documents/lcfs-pathway-
certified-carbon-intensities.
    \95\ http://iopscience.iop.org/article/10.1088/1748-9326/3/3/
034002/meta.
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    Increased demand for animal protein will cause the livestock 
sector's contribution to global GHG emissions to increase in the years 
ahead. The use of biotechnology to limit the climate change impacts of 
livestock production is at a comparatively early stage of development 
due to a lack of low-carbon incentivizes, such as those that have 
existed in the U.S. power and transportation sectors since the turn of 
the century. Biotechnology has the potential to drive both near-term 
and long-term GHG emission reductions in the livestock sector, however. 
Feed additives and the use of enclosed anaerobic digesters can reduce 
near-term emissions.

    Food and Feed Waste

    Waste from food and feed production and delivery is also a 
significant source of GHG emissions. Nearly \1/3\ of all food produced 
is wasted annually. This food waste had a carbon footprint of 3.3 
GtCO2eq in 2007, representing seven percent of total global 
GHG emissions, according to the FAO.\96\ Biotech solutions are 
available or under development to reduce food waste at multiple stages 
of the food and feed system.
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    \96\ http://www.fao.org/3/i3347e/i3347e.pdf.
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    The use of enzymes in bread and other baked goods has significantly 
enhanced product shelf life and reduced waste.\97\ Organic acids and 
other products of industrial biotechnology have been developed by BASF 
and others to reduce spoilage of animal feeds.\98\ Other biotech 
innovators are developing biobased antimicrobial coatings to reduce 
spoilage and inhibit pathogens in fruits and vegetables.\99\ Others 
still are focusing on the use of biosensors to optimize produce 
ripeness to minimize spoilage.100-101 
---------------------------------------------------------------------------
    \97\ http://wwfeu.awsassets.panda.org/downloads/
wwf_biotech_technical_report.pdf.
    \98\ http://www.basf.com/us/en/who-we-are/sustainability/we-drive-
sustainable-solutions/sustainable-solution-steering/examples/organic-
acids-luprosil-amasil.html.
    \99\ https://www.foodnavigator.com/Article/2019/10/21/A-new-tool-
in-the-fight-against-food-waste-Milekons-is-highly-effective-
environmentally-friendly-and-versatile.
    \100\ Neethirajan S., Ragavan V., Weng X., Chand R. Biosensors for 
Sustainable Food Engineering: Challenges and Perspectives. Biosensors. 
2018; 8(1): 23. https://doi.org/10.3390/bios8010023.
    \101\ https://penntoday.upenn.edu/news/strella-biotechnologys-
biosensors-minimize-food-waste-one-apple-time.

---------------------------------------------------------------------------
    Food Ingredients

    Biotechnology is also reducing the carbon footprint of a variety of 
food ingredients. The plant-based sweetener, stevia, for example has 
shown an 82% reduction in carbon footprint compared with beet sugar and 
a 64% reduction compared with cane sugar.\102\ But the most desirable 
compounds of the stevia leaf are present in very low concentrations, 
limiting its market. Biotech leaders Evolva and DSM have developed 
pathways to produce those key stevia compounds through fermentation. 
Both have formed partnerships with Cargill and began production of 
fermentation-based stevia at commercial scale in 2019. Cargill's 
initial lifecycle assessment suggests the fermentation-based stevia has 
an even lower carbon footprint than the plant-based extract.\103\ 
Nearly 200 million tons of sugar are produced globally each year.\104\ 
With a carbon footprint of 241 kg CO2e per ton of 
sugar,\105\ the sugar sector accounts for roughly 48 MTCO2 
annually.
---------------------------------------------------------------------------
    \102\ https://journals.lww.com/nutritiontodayonline/Fulltext/2015/
05000/Stevia,_Nature_s_
Zero_Calorie_Sustainable.7.aspx.
    \103\ https://www.cargill.com/food-beverage/na/eversweet-faqs.
    \104\ https://apps.fas.usda.gov/psdonline/circulars/sugar.pdf.
    \105\ https://cbmjournal.biomedcentral.com/articles/10.1186/1750-
0680-5-3#::text=According
%20to%20our%20calculations%2C%20241,a%20ton%20of%20sugarcane%20processed
).

------------------------------------------------------------------------
                                         Applications in Food and Feed
            Biotechnology                            Waste
------------------------------------------------------------------------
Organic Acids                         Reduce Spoilage In Animal Feeds
Biobased Coatings                     Reduce Spoilage and Inhibit
                                       Pathogens in Fruits and
                                       Vegetables
Biosensors                            Optimize Ripeness to Minimize
                                       Spoilage
Plant Genetic Engineering             Develop Food Varieties With Less
                                       Spoilage
Animal Genetic Engineering            Develop Farmed Animals That
                                       Require Less Food
------------------------------------------------------------------------

    As another example, vanillin, one of the most widely used synthetic 
food ingredients, was traditionally produced through a carbon- and 
energy-intensive process using coal tar. New biotech routes now allow 
for purer production without reliance on extraction or processing of 
fossil fuels.\106\
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    \106\ https://www.forbes.com/sites/johncumbers/2019/10/30/better-
than-nature-fermenting-vanilla/#2e35b85636c3.

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    Food Processing

    Biotech enzymes are also being used to dramatically lower the 
carbon footprint of food processing. The most significant example is 
the use of enzymes in meat processing. By eliminating energy-intensive 
traditional processing steps, industry-wide integration of enzymatic 
processes for meat processing would result in over 100 
MTCO2e annually, according to the World Wildlife Fund. 
Smaller, but significant, reductions would result from adoption of 
enzymatic processing in fish and dairy processing, and beer and wine 
production. WWF estimated the total potential reductions from enzyme 
applications in the food sector at 114 to 166 MTCO2e 
annually.\107\
---------------------------------------------------------------------------
    \107\ https://wwfeu.awsassets.panda.org/downloads/
ww_biotech_technical_report.pdf.
---------------------------------------------------------------------------
Figure 2. Potential GHG reductions from applications of biotechnology 
        in the food industry. 
        
        
          Source: Figure 5, https://wwfeu.awsassets.panda.org/
        downloads/wwf_biotech_technical_report.pdf.
        
        
      Veramaris Case Study

          Fish are among the lowest carbon intensity sources of 
        meat.\108\ As global demand for animal products continues to 
        grow, and with most of the world's wild fish stocks at, or 
        beyond, sustainable harvest levels,\109\ aquaculture--farmed 
        fish and other seafood--will play a key role in mitigating the 
        impact of meat consumption on the climate.
---------------------------------------------------------------------------
    \108\ http://www.nature.com/articles/s41598-020-68231-8.
    \109\ http://www.veramaris.com/why-we-do-it-
detail.html#sustainable-growth.
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          Salmon aquaculture is the fastest-growing food production 
        system in the world.\110\ Salmon's popularity and relatively 
        low carbon intensity make it an attractive option to displace 
        some of the projected growth in the consumption of beef and 
        other higher carbon intensity meats. The growth of salmon 
        aquaculture is currently limited by the availability of the 
        marine omega-3 oils EPA and DHA, key components of salmon 
        diets. Marine omega-3 oils have, until recently, been derived 
        almost exclusively from wild-caught oily fish, such as anchovy 
        and menhaden, whose wild stocks are limited and increasingly 
        threatened by climate change.\111\
---------------------------------------------------------------------------
    \110\ http://www.worldwildlife.org/industries/farmed-salmon.
    \111\ http://insideclimatenews.org/news/27092019/ocean-fish-diet-
climate-change-impact-food-ipcc-report-cryosphere.
---------------------------------------------------------------------------
          Veramaris, a joint venture between biotech leaders DSM and 
        Evonik Industries, has eliminated this supply chain and 
        sustainability barrier by developing a biotech approach to 
        marine omega-3 oil production. Veramaris identified marine 
        algae that produce EPA and DHA naturally, and recently began 
        commercial production of algae-based omega-3 oils at a $200 
        million facility in Blair, Nebraska.\112\ The facility can 
        produce omega-3 oils equivalent to 1.2 million tons of wild-
        caught fish, enough to supply 15 percent of salmon farming 
        industry demand,\113\ and has brought jobs and economic 
        development to a region hit hard by low commodity prices and 
        recent trade disputes.
---------------------------------------------------------------------------
    \112\ http://www.feednavigator.com/Article/2019/07/15/New-
Veramaris-facility-will-help-it-expand-into-new-markets.
    \113\ http://www.veramaris.com/press-releases-detail/veramaris-
opens-us200m-facility-for-epa-dha-omega-3-algal-oil-to-support-
sustainable-growth-in-aquaculture.html.
---------------------------------------------------------------------------
          By sourcing omega-3 oils from locally grown algae, Veramaris 
        also dramatically shortens the feed supply chain, reducing 
        emissions associated with the harvesting, processing, and 
        transport of fish oil.
2.2  Agriculture Inputs and Climate Services
2.2.1  Agricultural Biological
    Modern agriculture is an energy-intensive process. In addition to 
the need to fuel heavy machinery, many farming practices release carbon 
dioxide from both biogenic and fossil sources that would otherwise 
remain stably sequestered. Intensive tilling practices expose soil 
carbon to the atmosphere, allowing it to react with oxygen to form 
carbon dioxide. Nitrogen fertilizers increase the sequestration 
potential and minimize the land footprint of crops, but they are 
derived from fossil fuels such as natural gas and generate the potent 
GHG nitrous oxide. Advances in crop science and technology can mitigate 
some of these unwanted environmental effects. No-till agriculture using 
herbicide-resistant crops limits soil disruption and reduces the amount 
of soil carbon that is released to the atmosphere as carbon dioxide. 
The development of crop varieties with added or improved nitrogen-
fixing capabilities allows for more efficient use of nitrogen 
fertilizer when combined with crop rotation practices.\114\ And the 
engineering of commonly used crops to give them resistance to 
environmental threats such as drought and pests enhances their carbon 
sequestration potential while minimizing indirect GHG emissions from 
deforestation.
---------------------------------------------------------------------------
    \114\ http://news.wisc.edu/corn-that-acquires-its-own-nitrogen-
identified-reducing-need-for-fertilizer/.
---------------------------------------------------------------------------
    One of the fastest growing, and most promising, applications of 
biotechnology is in agricultural biologicals. Soil microorganisms play 
a key role in plant growth, enabling efficient access to nutrients and 
protecting against pests and diseases. Ag biologicals leverages 
biotechnology to improve soil microbes and enhance these natural 
processes. A major area of focus for ag biologicals companies is 
increasing plant uptake of nitrogen to allow for more efficient use of 
synthetic nitrogen fertilizer. Synthetic nitrogen fertilizer is a 
significant source of climate-warming gases. It is energy intensive to 
produce, and a substantial fraction of the nitrogen in fertilizer 
becomes nitrous oxide (N2O) a greenhouse gas 298 times more 
potent than carbon dioxide. Joyn Bio, a joint venture between the 
synthetic biology company, Ginkgo Bioworks, and Bayer, is engineering 
microbes to enable cereal crops like corn, wheat, and rice to convert 
nitrogen from the air into a form they can use to grow, allowing for 
more efficient use of synthetic fertilizers for many of the world's 
leading crops.
    Other biotech researchers and businesses are developing nitrogen- 
and carbon-fixing bacteria or algae to build soil carbon and enhance 
the absorption of atmospheric nitrogen by soils.115-116  And 
biotech innovators such as Vestaron are developing safer, more 
sustainable crop protection tools, such as biological peptides, to 
provide crops with greater resiliency to plant stress induced by 
climate change.\117\
---------------------------------------------------------------------------
    \115\ http://www.frontiersin.org/articles/10.3389/fmicb.2019.01146/
full.
    \116\ http://usea.org/sites/default/files/event-/
USEA%20Tech%20Briefing_Matt%20Carr_Algae
%20for%20Carbon%20Capture%20&%20Use_March_2018.pdf.
    \117\ Iriti M., Vitalini S. Sustainable Crop Protection, Global 
Climate Change, Food Security and Safety-Plant Immunity at the 
Crossroads. Vaccines. 2020; 8(1): 42. http://doi.org/10.3390/
vaccines8010042. https://www.mdpi.com/2076-393X/8/1/42.


---------------------------------------------------------------------------
      Joyn Bio Case Study

          Nitrogen is an essential nutrient for plant growth, but the 
        abundant nitrogen in the atmosphere is not in a form that 
        plants can use. Soybeans, peanuts, and other legumes have 
        developed a symbiotic relationship with nitrogen-fixing 
        microorganisms in the soil that convert nitrogen from the air 
        into a form they can absorb through their roots. But cereal 
        crops like corn, wheat, and rice don't have this ability, and 
        require the addition of fertilizers to maximize growth.
          Synthetic nitrogen fertilizers have revolutionized farming, 
        but are a potent source of agricultural greenhouse gas 
        emissions. They are energy intensive to produce, and a 
        substantial fraction of the nitrogen in fertilizer becomes 
        nitrous oxide (N2O) a greenhouse gas up to 298 times 
        more potent than carbon dioxide.\118\ Joyn Bio, a joint venture 
        between the synthetic biology company, Ginkgo Bioworks, and 
        Bayer, is using biotechnology to reduce agricultural GHG 
        emissions by designing nitrogen-fixing soil microbes that work 
        with corn and other cereal crops, allowing for more efficient 
        use of synthetic fertilizers for many of the world's leading 
        crops.
---------------------------------------------------------------------------
    \118\ http://www.epa.gov/ghgemissions/understanding-global-warming-
potentials.
---------------------------------------------------------------------------
2.2.2  Biological Carbon Capture, Use and Storage
    Biomass is one of America's major, albeit transitory, carbon sinks. 
All forms of biomass that employ photosynthesis capture atmospheric 
carbon dioxide and convert it to carbon-based compounds such as sugars, 
starch, and lignocellulose. The carbon content of this biomass remains 
sequestered until the biomass is either consumed or decomposes, at 
which time much of it is oxidized and released back to the atmosphere 
as carbon dioxide. Some of the carbon content, such as that contained 
in a plant's roots, is sequestered for much longer time periods in the 
form of below-ground biomass. It is for this reason that the 
afforestation/reforestation of marginal land can result in the 
formation of new carbon sinks and the long-term removal of carbon 
dioxide from the atmosphere.
    Carbon that is sequestered as below-ground biomass can remain in 
that state so long as the surrounding soil is not disrupted. The length 
of time that biomass's aboveground carbon content remains sequestered 
depends on how the biomass is utilized. The combustion of biomass, 
whether in its natural form or following conversion to biofuel, results 
in the oxidation and release of its carbon content as carbon dioxide. 
While carbon-neutral in the sense that the released biogenic carbon had 
been captured from the atmosphere during the growing season, 
traditional combustion prevents the carbon from being either 
sequestered or reused prior to the completion of another growing 
season.
    A variety of biotechnologies have been developed that either 
capture and sequester or recycle atmospheric carbon dioxide. Many of 
these processes are closely related to the biobased products covered in 
Section 2.1 because of the ability of biomass to capture atmospheric 
carbon dioxide before being converted to different fuels and products. 
The technologies in question impact every stage of the biomass supply 
chain, from growth/production to conversion and ultimately end-of-life 
disposal.
    Carbon capture and storage (CCS) technologies enable carbon dioxide 
emissions from fossil power plants or industrial facilities, such as 
cement or steel, to be captured at the facility and stored underground. 
A variety of approaches have been developed to absorb carbon dioxide 
from flue gases, or to remove carbon prior to combustion.\119\ CCS can 
also be deployed at facilities utilizing biomass as feedstock. The 
process is largely the same as that employed at some fossil fuel 
facilities but, whereas fossil energy carbon capture and sequestration 
(FECCS) processes reduce the GHG emissions of fossil fuels, biomass 
energy carbon capture and sequestration (BECCS) processes actually 
reverse past emissions. The biomass captures atmospheric carbon dioxide 
during its growth phase and is then combusted, yielding both energy and 
carbon dioxide. The bioenergy displaces fossil energy and the carbon 
dioxide is either sequestered in underground caverns as a gas or 
converted to a degradation-resistant solid such as biochar. BECCS is 
therefore a carbon-negative process in that it results in more carbon 
dioxide being sequestered than emitted. Biotechnology advances that 
increase the growth rate, growth potential, and harvest efficiency of 
biomass that is used as BECCS feedstock all enhance the process's 
carbon sequestration capability.
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    \119\ http://www.c2es.org/content/carbon-capture/.
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    BECCS technology can also be deployed to achieve negative carbon 
results at any industrial facility using biomass as a feedstock. 
Perhaps the most intriguing application of BECCS is its potential use 
at ethanol plants and other biorefineries. One third of the carbon in 
the biomass feedstock used to produce ethanol is released in the form 
of carbon dioxide during the fermentation process. Using BECCS to 
capture this CO2 reduces the carbon intensity of ethanol by 
40%.\120\ Biorefineries represent an extremely attractive option for 
deploying BECCS because the product of fermentation is a nearly pure 
(99%) stream of CO2, requiring little or no separation from 
other gases. As a result, biorefinery BECCS is among the lowest-cost 
carbon capture opportunities available, at an estimated cost of under 
$30 per ton of CO2 compared to $60-$120 per ton at fossil 
power plants or traditional industrial facilities.\121\ The world's 
first ethanol BECCS project is now in operation in Decatur, Illinois, 
capturing and storing 1 MTCO2eq per year that would 
otherwise have been emitted to the atmosphere.\122\
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    \120\ http://www.pnas.org/content/pnas/early/2018/04/18/
1719695115.full.pdf.
    \121\ http://www.pnas.org/content/pnas/early/2018/04/18/
1719695115.full.pdf.
    \122\ http://www.energy.gov/fe/articles/doe-announces-major-
milestone-reached-illinois-industrial-ccs-project.
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    In addition to its role in providing biomass feedstocks for BECCS, 
biotechnology is increasingly seen as a key enabling technology for 
carbon capture itself. The U.S. Department of Energy (DOE) has invested 
over $150 million since 2015 in the development of algae and other 
microbial systems for carbon capture as an alternative--or 
complimentary--approach to chemistry-based approaches to CO2 
extraction from flue gases.\123\ Microbial systems have several 
significant advantage over thermochemical approaches to carbon capture. 
Typical thermochemical CCS systems are highly energy intensive. Roughly 
30% of captured carbon is offset by the additional fossil fuel 
combustion required to separate, compress, and transport the captured 
carbon.\124\ Microbial systems can dramatically reduce this ``parasitic 
load.'' Algae and other microbes extract CO2 or other target 
gases biologically, via photosynthesis or other natural energy 
pathways, eliminating the energy inputs required for separation. 
Microbial systems can even operate efficiently at the relatively low 
CO2 concentrations found in flue gases from natural gas or 
coal-fired power plants, and can be deployed economically at relatively 
small scale to address emissions from smaller power plants and 
industrial facilities that cannot support traditional CCS systems. 
Microbial systems also convert the captured carbon into a usable solid 
or liquid form directly, eliminating the substantial energy inputs 
required to compress captured CO2 for transport, or for use 
in enhanced oil recovery. As such, microbial carbon capture systems 
applied to biomass energy or other biorefinery systems offer one of the 
most carbon-negative climate solutions available.
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    \123\ http://algaebiomass.org/blog/10655/2020-will-see-record-
federal-funding-algae-rd/.
    \124\ http://www.reuters.com/article/us-carboncapture-economics-
kemp/carbon-captures-energy-penalty-problem-kemp-idUSKCN0HW0TZ20141007.
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    DOE in its 2016 Billion Ton Report found that suitable land and 
other infrastructure exists to deploy algae-based carbon capture 
systems at more than 500 power plants and ethanol facilities in the 
U.S. These systems would have a potential to capture more than 200 MT 
CO2 annually.\125\
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    \125\ http://algaebiomass.org/blog/9541/doe-2016-billion-ton-
report-ample-resources-for-algae-production-in-the-u-s/.
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    Biomass and carbon capture can then be combined with the carbon 
dioxide recycling technologies discussed in Section 2.1 to produce 
negative-carbon products from captured biogenic carbon. The biomass 
energy carbon capture and utilization (BECCU) process displaces both 
fossil energy consumption and fossil fuel emissions. As with BECCS, 
BECCU uses biogenic carbon to generate energy via combustion, 
displacing fossil fuels in the process. The resulting carbon dioxide is 
captured but, instead of being sequestered, is converted into yet 
another fuel or product that displaces additional fossil fuels. BECCU 
can still be carbon-negative, either because it displaces more carbon 
dioxide emissions from fossil fuels than it emits when the utilization 
takes the form of conversion to biofuels or biodegradable products, or 
because the utilization takes the form of conversion to non-
biodegradable products.\126\ In the latter case, carbon sequestration 
still occurs, but in a long-lifetime product, rather than geologic 
storage.
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    \126\ http://www.slideshare.net/UKCCSRC/richard-murphy-
cardiffbasep14.
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    BECCS and BECCU are not widely employed in the U.S. at present due 
to a relative lack of economic or policy incentives for the capture of 
carbon dioxide. Those CCS projects that do exist in North America 
involve fossil rather than biogenic sources of carbon.\127\ That said, 
climate scientists increasingly believe that the two technologies will 
need to be widely utilized if catastrophic climate change is to be 
avoided. The UN's Intergovernmental Panel on Climate Change (IPCC) has 
concluded that keeping the atmospheric carbon dioxide level below 450 
ppm by 2100, as is necessary if catastrophic climate change is to be 
avoided, will require the ``availability and widespread deployment of 
BECCS and afforestation.'' \128\ The primary hurdle facing BECCS/BECCU 
commercialization is one of economics rather than technology: carbon 
capture is economically unattractive at a time when the cost of 
emissions is lower than the cost of capture.\129\ The technical 
feasibility of capture and sequestration is especially well-established 
for those technologies that rely upon natural processes such as the 
building of soil carbon via afforestation/reforestation or the planting 
of certain dedicated energy crops. BECCU also offers an advantage over 
BECCS in the absence of a high emissions cost due to its production of 
higher-value products such as fuels or chemicals; BECCS, by contrast, 
produces lower-value products such as heat and electricity.\130\
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    \127\ http://fas.org/sgp/crs/misc/R44902.pdf.
    \128\ http://www.ipcc.ch/site/assets/uploads/2018/02/
ipcc_wg3_ar5_summary-for-policymakers.pdf.
    \129\ http://www.sciencedirect.com/science/article/abs/pii/
S0959652614009536.
    \130\ http://www.sciencedirect.com/science/article/abs/pii/
S136403211730014X.
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    The ability of BECCS to achieve net-negative carbon emissions and 
their magnitude depend on several different factors involving the 
different stages of the supply chain. A comparison of multiple biomass 
feedstocks combusted in a power plant equipped with CCS technology 
determined that while growth of the three feedstocks considered 
(Miscanthus, switchgrass, and willow) all have the potential to achieve 
net sequestration, the actual amount of sequestration that occurs is 
determined by biomass transportation distances, carbon capture rates, 
and especially land-use change (e.g., what type of land that the 
biomass feedstock is grown on).\131\ The analysis calculated that the 
amount of carbon dioxide ultimately sequestered on average while 
generating 1 megawatt hour of electricity via BECCS with Miscanthus and 
switchgrass is equal to the average amount emitted by U.S. power plants 
to generate an equal amount of electricity.
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    \131\ http://pubs.rsc.org/en/content/articlelanding/ee/2017/
c7ee00465f.
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    BECCU has also been found to achieve low-to-negative carbon 
intensities. A life cycle assessment that compared the carbon 
intensities of ethanol produced from steel mill waste gases found its 
carbon footprint to be at least 60% lower than that of gasoline.\132\ 
Dedicated energy crops such as Miscanthus and willow grown for the 
purpose of electricity generation have been found to achieve net-
negative emissions of carbon dioxide due to the combined effects of 
soil carbon sequestration and the displacement of fossil fuels.\133\ A 
different analysis found emissions via afforestation/reforestation to 
also be negative even if the forest is harvested and utilized as wood 
products such as sawtimber, as these constitute a different form of 
BECCU.\134\
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    \132\ http://pubs.acs.org/doi/abs/10.1021/acs.iecr.5b03215.
    \133\ http://www.sciencedirect.com/science/article/pii/
S0961953409002402.
    \134\ http://link.springer.com/article/10.1007/s11367-013-0629-6.
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    The carbon dioxide reduction and sequestration potential of BECCS/
BECCU technologies is very sensitive to land-use change. For example, 
the largest amount of sequestration occurs when dedicated energy crop 
growth or afforestation/reforestation occurs on abandoned or marginal 
croplands that have previously had their soil carbon depleted. On the 
other hand, the conversion of grassland to these uses results in a 
reduced sequestration potential, while the conversion of productive 
cropland can have the lowest sequestration potential of all if the 
resulting decrease in the supply of the crop causes the conversion of 
land such as forest to cropland somewhere else. Biotechnology provides 
several methods for mitigating these unintended consequences through 
advances in plant and crop science that are described in more detail in 
Section 2.4.1.


      LanzaTech Case Study

          LanzaTech is unique for its ability to make low carbon fuels 
        and chemicals from a variety of waste-based feedstocks, 
        including industrial emissions, unsorted, unrecyclable 
        municipal solid waste, and agricultural or forestry wastes and 
        residues. The company utilizes a naturally occurring bacteria 
        originally isolated from rabbit droppings. As part of its 
        natural biology, the bacteria ferments gases containing carbon 
        dioxide, carbon monoxide, and/or hydrogen into ethanol. This 
        ethanol can be used directly as a fuel to displace gasoline or 
        as a chemical in consumer products.\135\ Additionally, ethanol 
        can be upgraded to make consumer goods from polyethylene \136\ 
        or PET, and to make sustainable aviation fuel (SAF) via the 
        LanzaJet Alcohol-to-Jet pathway,[i] to displace 
        fossil fuel demand in the aviation sector. The opportunities 
        for LanzaTech's technologies to utilize waste carbon to produce 
        multiple low carbon fuels and chemicals has expanded over the 
        last decade as its technology has been licensed worldwide.
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    \135\ http://www.cnbc.com/2018/07/27/lanzatech-turns-carbon-waste-
into-ethanol-to-one-day-power-planes-cars.html.
    \136\ http://www.lanzatech.com/2018/10/04/virgin-atlantic-
lanzatech-celebrate-revolutionary-sustainable-fuel-project-takes-
flight/.
    \[i]\ http://www.lanzatech.com/2019/11/22/lanzatech-moves-forward-
on-sustainable-aviation-scale-up-in-the-usa-and-japan/.
    Editor's note: there appears to be a discrepancy in the numbering 
of the footnotes. Footnotes 137-139 were used in the LanzaTech Case 
Study and were duplicated in the following section. To avoid confusion 
the LanzaTech Case Study footnotes are renumbered [i]-[iii].
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          The LanzaTech pathway differs from conventional ethanol 
        production in that it feeds its microorganisms with a gas 
        stream rather than a liquid sugar substrate. While carbon is 
        the most important ingredient in this gas stream, the 
        microorganisms are capable of fermenting gases produced from a 
        variety of industrial processes and feedstocks. The gases are 
        captured and compressed before being delivered to a bioreactor 
        where fermentation to ethanol occurs. The ethanol is then 
        recovered from the bioreactor and stored for future use either 
        in that form or following subsequent upgrading to a hydrocarbon 
        fuel.
          The first commercial-scale facility to utilize LanzaTech's 
        pathway is a steel mill located near Beijing, China. Waste 
        gases produced at the mill are captured and fermented to 
        ethanol at a rate of 16 million gallons per year. The company 
        estimates that the recycling of the mill's GHG emissions in 
        this manner is the equivalent of removing 80,000 cars from the 
        road annually.[ii] The success of the technology at 
        such a large scale has resulted in plans to apply it to other 
        types of industrial facilities, including a petroleum refinery 
        in India that will achieve an annual ethanol yield of 11 
        million gallons, a steel mill in Belgium that will achieve an 
        annual ethanol yield of 21 million gallons, and a smelter in 
        South Africa that will achieve an annual ethanol yield of 17 
        million gallons.
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    \[ii]\ http://www.cnbc.com/2018/07/27/lanzatech-turns-carbon-waste-
into-ethanol-to-one-day-power-planes-cars.html.
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          Beyond recycled carbon fuels, LanzaTech's platform can make 
        second generation biofuels through gasification of biomass 
        wastes and residues. LanzaTech is developing a project to 
        convert locally available agricultural residues to 
        approximately 5.3 million gallons per year of fuel grade 
        ethanol in India, using commercially proven gasification 
        technology and LanzaTech's commercially proven gas fermentation 
        platform. The integrated technology will have the flexibility 
        to process a wide range of biomass feedstocks enabling rapid 
        replication at other locations.
          A byproduct of the project will be a nutrient rich biochar. 
        Biochar can be a useful soil supplement to enrich soil organic 
        carbon and other nutrients. In 2018, LanzaTech launched a new 
        company, LanzaJet to accelerate the commercialization of SAF 
        production. The LanzaJet process can use any source of 
        sustainable ethanol for jet fuel production, including, but not 
        limited to, ethanol made from recycled pollution, the core 
        application of LanzaTech's carbon recycling platform.
          Commercialization of this process, called Alcohol-to-Jet 
        (AtJ) has been years in the making, starting with the 
        partnership between LanzaTech and the U.S. Energy Department's 
        Pacific Northwest National Laboratory (PNNL). PNNL developed a 
        unique catalytic process to upgrade ethanol to alcohol-to-jet 
        synthetic paraffinic kerosene (ATJ-SPK) which LanzaTech took 
        from the laboratory to pilot scale. SAF produced via the 
        company's pathway has already been employed in two commercial 
        flights to demonstrate its ability to displace fossil aviation 
        fuel.[iii] LanzaTech estimates that SAF produced 
        using its technology achieves a 70% reduction to carbon 
        intensity compared to fossil aviation fuel.
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    \[iii]\ http://www.lanzatech.com/2018/10/04/virgin-atlantic-
lanzatech-celebrate-revolutionary-sustainable-fuel-project-takes-
flight/.
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2.3  New Biotech Tools and Bioindustrial Manufacturing
2.3.1  New Biotech Tools
    Rapid advances in the fundamental tools of biotechnology 
increasingly are enabling biotech solutions in manufacturing sectors 
beyond food, fuels and chemicals. These developments offer the 
potential for transformative climate solutions in applications beyond 
manufacturing as well.
    Biotech tools for manipulating DNA have been in use for decades. 
Many of the most important contributions of biotechnology--vaccines and 
therapies, biotech crops, and modern industrial biotechnology--were 
made possible by this first generation of genetic engineering tools. 
But the past decade has seen a wave of new biotech tool innovation with 
transformative potential. In synthetic biology, scientists insert 
synthesized pieces of DNA into an organism's genome to alter the 
characteristics or function of the organism. In genome editing, 
scientists use tools to make more precise changes to the organism's own 
DNA to achieve the same outcome.\137\ These and other new biotech tools 
have dramatically increased the speed and reduced the cost of genetic 
engineering applications and are being deployed to tackle a range of 
global challenges, including climate change.\138\
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    \137\ http://www.genome.gov/about-genomics/policy-issues/Synthetic-
Biology.
    \138\ http://www.genome.gov/about-genomics/fact-sheets/Sequencing-
Human-Genome-cost.
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2.3.2  Applications of Bio-Manufacturing in Traditional Industries
    Some of industrial biotechnology's earliest uses were in the 
application of enzymes to improve efficiency and reduce energy use in 
traditional industries. The introduction of enzymes for pulp and paper 
bleaching, for example, reduced energy consumption 40% versus 
traditional bleaching, and a shift to fermentation-based production of 
riboflavin (vitamin B2) in the early 2000's reduced 
associated CO2 emissions 80% compared to the traditional 
chemical manufacturing route.\139\ Applications of enzymes in textile 
processing, such as pretreatment, bleaching and desizing, save 
approximately 10 MTCO2e annually today. Full adoption of 
these technologies would triple these reductions. The widespread use of 
enzymes in laundry and dishwasher detergent could save an additional 30 
MTCO2e annually by 2040 by allowing for cold-water washing 
of laundry and more efficient dishwashing. Full market penetration of 
biotech applications in these traditional industries is estimated to 
save 65 MTCO2e annually by 2030.\140\ While these GHG are 
incremental relative to the global challenge of climate change, they 
represent near-term opportunities that will be essential to reducing 
near-term emissions.
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    \139\ http://www.bio.org/sites/default/files/legacy/bioorg/docs/
files/CleanerExecSumm.pdf.
    \140\ http://wwfeu.awsassets.panda.org/downloads/
wwf_biotech_technical_report.pdf.
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GHG reduction potential from applications of biotechnology to 
        traditional industries. 
        
        
          Source: Figure 7, https://wwfeu.awsassets.panda.org/
        downloads/wwf_biotech_technical_report.pdf.
2.3.3  New Markets and Novel Applications
    With the emergence of synthetic biology and the ability to tailor 
microbes to specific industrial tasks, industrial biotechnology 
solutions are moving into an ever-expanding range of applications. A 
rapidly growing number of companies, such as Gingko Bioworks, Arzeda, 
and Twist Biosciences, are providing organism design and DNA synthesis 
services, using synthetic-biology and other modern biotechnology tools 
to optimize manufacturing pathways. SynBio companies raised over $1 
billion in investment in the second quarter of 2019 alone.\141\
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    \141\ http://synbiobeta.com/these-37-synthetic-biology-companies-
raised-1-2b-this-quarter/.
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    One intriguing potential application of these new biotech tools is 
in biological data storage, the storage of data on strands of DNA 
instead of semiconductors or magnetic devices. DNA is roughly a million 
times denser than conventional hard-disk storage. Testing is now 
underway with computers that store data by synthesizing strands of DNA. 
A shift to biological data storage would eliminate the need for mining 
and production of silicon or precious metals. More significantly, it 
could dramatically reduce the need for massive data storage 
facilities.\142\ Energy consumption by data storage facilities already 
accounts for 2% of global GHG emissions, and is projected to surge to 
14% of global emissions by 2040.\143\ DARPA, the Defense Department's 
Advanced Research Projects Agency, is investing $15 million in work by 
Microsoft, Twist Bioscience, and others to develop DNA storage.\144\ A 
collaboration between the University of Washington and Microsoft 
successfully demonstrated their fully-automated end-to-end DNA storage 
process in 2019.\145\
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    \142\ http://www.scientificamerican.com/article/dna-data-storage-
is-closer-than-you-think/.
    \143\ http://www.sciencedirect.com/science/article/abs/pii/
S095965261733233X?via%3Dihub.
    \144\ http://www.wired.com/story/darpa-wants-to-build-an-image-
search-engine-out-of-dna/.
    \145\ http://news.microsoft.com/innovation-stories/hello-data-dna-
storage/.
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    Biology-based parallel computing--in which biomolecules are used to 
test a large number of solutions to a problem simultaneously--is also 
being evaluated as another potential application of biotechnology. A 
proof of concept experiment at McGill University yielded a solution to 
a complex mathematical problem with less than 0.1% of the energy 
required to solve the problem with traditional computing.\146\
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    \146\ Nicolau, D.V., et al. Parallel computing with molecular 
motors. Proceedings of the National Academy of Sciences. Mar. 2016, 
113(10) 2591-2596; DOI: 10.1073/pnas.1510825113. https://www.pnas.org/
content/113/10/2591.abstract.
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    Synthetic biology is also being deployed to accelerate the 
development of solutions to the COVID-19 pandemic.
    In addition to applications in manufacturing, synthetic biology has 
the potential to provide transformative solutions for carbon dioxide 
removal from the atmosphere and oceans.\147\
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    \147\ http://www.wsj.com/articles/companies-rush-to-shore-up-covid-
19-testing-ahead-of-flu-season-11598788800.
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    Synthetic biology could be applied to enhance photosynthetic 
efficiency of trees, or reduce respiration from soil microbes, to shift 
natural carbon cycles towards carbon removal. Even small improvements 
in these natural carbon cycles could have profound impacts, given that 
120 GTCO2e is removed from the atmosphere by terrestrial 
photosynthesis.\148\ As discussed in section 2.2.2, deployment of 
microbial systems for carbon capture has the potential to further draw 
down atmospheric carbon concentrations.*
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    \148\ DeLisi, C. The role of synthetic biology in climate change 
mitigation. Biol. Direct. 14, 14 (2019). https://doi.org/10.1186/
s13062-019-0247-8. http://biologydirect.biomedcentral.com/articles/
10.1186/s13062-019-0247-8.
    * Editor's note: there is no corresponding footnote reference for 
footnote 149. The reference as been incorporated herein as follows:
    \149\ Hu, G., et al. Engineering Microorganisms for Enhanced 
CO2 Sequestration. Trends in Biotechnology 37(5), 532-547, 
May 2019. https://doi.org/10.1016/j.tibtech.2018.10.008. http://
www.cell.com/trends/biotechnology/fulltext/S0167-7799(18)30304-4.


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      Inscripta Case Study

          The power of synthetic biology lies in its ability to make 
        possible microbes to perform any task. SynBio innovators are 
        applying the tools of their trade to design microbes to make 
        plastics from plants, optimize fertilizer, capture carbon and 
        even combat COVID-19. But unlocking the full potential of 
        synthetic biology to take on the world's greatest challenges--
        including climate change--will require synbio tools to be 
        available to every scientist or biotech start-up.
          Jennifer Doudna at the University of California, Berkeley, 
        and Emmanuelle Charpentier at the Max Planck Institute in 
        Berlin were awarded the 2020 Nobel Prize in Chemistry for their 
        work in developing the CRISPR gene editing technique, an 
        approach that has revolutionized genetic engineering. But, 
        until recently, CRISPR technology was prohibitively complex and 
        expensive for most researchers.
          In 2019, Boulder, Colorado-based Inscripta flipped the 
        script, launching an affordable system that can perform 
        thousands of gene edits at the push of a button.\150\ This 
        innovation has attracted hundreds of millions of dollars in 
        venture capital investments and a growing list of global 
        customers, many of whom will surely apply the technology to 
        addressing global climate change.
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    \150\ http://www.inscripta.com/news/press-release-inscripta-
launches-the-worlds-first-benchtop-platform-for-digital-genome-
engineering.
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2.4  Plant and Animal Biotechnology
2.4.1  Plant Biotechnology and Gene Editing
    Biomass has a critical role to play in efforts to mitigate climate 
change. As described in Sections 2.1 and 2.2, biomass can replace a 
wide variety of fossil fuels and products, reducing or even 
sequestering carbon dioxide emissions in the process. At the same time, 
though, biomass can contribute to climate change if it is used 
unsustainably, and it will need to adapt to unprecedented growing 
conditions as the planet continues to warm. Biotechnology is providing 
important advantages on both counts, enhancing the amount of biomass 
that can be sustainably harvested while also improving the climate 
resiliency of many important crops and other plants.
    Genetically modified organisms (GMO) have been used since the 1990s 
to make important crops such as grains and oilseeds resistant to common 
threats including drought and pests. These past breakthroughs mitigated 
climate change by reducing the amount of land required by the 
agriculture sector. Yields of corn per acre in the U.S. increased by 
approximately 60% between 1991 and 2019 \151\ while those of soybeans 
increased by almost 50% over the same period.\152\ There were fewer 
acres of cropland in production in the U.S. in 2012 than there were in 
1945,\153\ despite the large increases to the U.S. and world 
populations that occurred over that time, due to this improved 
productivity.
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    \151\ http://www.nass.usda.gov/Charts_and_Maps/Field_Crops/
cornyld.php.
    \152\ http://www.nass.usda.gov/Charts_and_Maps/Field_Crops/
soyyld.php.
    \153\ http://www.ers.usda.gov/webdocs/DataFiles/52096/
Cropland_19452012_by_state.xls
?v=26.3.
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    It is important that these productivity increases continue to be 
made in the coming decades if agriculture's contributions to climate 
change are to be limited. The continued growth of the global population 
will create additional demand for crops at a time when growing seasons 
and conditions are expected to become more uncertain due to climate 
change.\154\ Future food crop shortages, whether due to increased 
demand from population growth or crop failures caused by extreme 
weather, would potentially contribute to climate change by encouraging 
the conversion of carbon sinks such as grassland and forests to 
cropland, thereby releasing carbon dioxide sequestered in the biomass 
and soil to the atmosphere. Likewise, improvements to the resiliency of 
dedicated energy crops during extreme weather events will improve both 
climate and energy security by enabling their utilization as low-carbon 
bioenergy and bioproduct feedstocks to increase.
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    \154\ http://www.fao.org/3/I9553EN/i9553en.pdf.
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    Biotechnology is also enabling the expansion of existing bioenergy 
pathways. The U.S. is currently undergoing a rapid increase to its 
renewable diesel production capacity that will result in additional 
demand for lipid feedstocks.\155\ Work is underway to utilize fast-
growing and/or resilient undomesticated biomass such as Jatropha and 
microalgae as biofuels feedstocks. Both forms of biomass can grow on 
marginal lands while limiting the disturbance of existing carbon sinks. 
However, their utilization as bioenergy has historically been 
constrained by poor crop yields outside of the laboratory. Cell 
engineering has enabled the necessary yields for commercial production 
to be achieved in microalgae,\156\ and research is actively underway to 
improve Jatropha as a feedstock.\157\ Biotechnology is also being 
utilized to expand the supply of lipid feedstocks by enabling the 
conversion of waste products, as is described in Section 1.1.1.
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    \155\ http://www.fuelsinstitute.org/getattachment/Research/Biomass-
Based-Diesel-A-Market-and-Performance-Anal/Biomass-Based-
Diesel_Executive-Summary.pdf?lang=en-US.
    \156\ Ajjawi, I., Verruto, J., Aqui, M., et al. Lipid production in 
Nannochloropsis gaditana is doubled by decreasing expression of a 
single transcriptional regulator. Nat. Biotechnol. 35, 647-652 (2017). 
http://doi.org/10.1038/nbt.3865. http://www.nature.com/articles/
nbt.3865.
    \157\ S.A. Ceasar, S. Ignacimuthu, Applications of biotechnology 
and biochemical engineering for the improvement of Jatropha and 
Biodiesel: A review, Renewable and Sustainable Energy Reviews, 15(9), 
2011, 5176-5185, ISSN 1364-0321, http://doi.org/10.1016/
j.rser.2011.07.039. http://www.sciencedirect.com/science/article/abs/
pii/S1364032111002796.
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    The development of the CRISPR gene editing technique over the last 
decade has already led to notable breakthroughs in the effort to 
mitigate climate change. In addition to microalgae,\158\ multiple 
strains of bacteria, yeast, and filamentous fungi have been modified 
via the CRISPR technique to increase the yields and types of products 
produced via fermentation.\159\ The CRISPR technique has also been 
employed with dedicated energy crops such as Miscanthus, poplar, 
switchgrass, and willow to refine specific traits that improve both 
resiliency and yields, although the higher complexity of these forms of 
biomass and regulatory uncertainty about their possible status as 
genetically modified organisms have slowed progress.\160\ Finally, 
CRISPR gene editing has also been employed to improve the resiliency 
and carbon efficiency of first-generation bioenergy feedstocks such as 
corn \161\ and soybeans under the types of extreme weather conditions 
that are expected to occur with growing frequency as a result of 
climate change.\162\
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    \158\ Shin, S.E., Lim, J.M., Koh, H., et al. CRISPR/Cas9-induced 
knockout and knock-in mutations in Chlamydomonas reinhardtii. Sci. Rep. 
6, 27810 (2016). http://doi.org/10.1038/srep27810. https://
www.nature.com/articles/srep27810.
    \159\ Paul D. Donohoue, Rodolphe Barrangou, Andrew P. May, Advances 
in Industrial Biotechnology Using CRISPR-Cas Systems, Trends in 
Biotechnology, 36(2), 2018, 134-146, ISSN 0167-7799, https://doi.org/
10.1016/j.tibtech.2017.07.007. http://www.sciencedirect.com/science/
article/abs/pii/S0167779917301877.
    \160\ http://onlinelibrary.wiley.com/doi/full/10.1111/gcbb.12566.
    \161\ http://onlinelibrary.wiley.com/doi/full/10.1111/pbi.12603.
    \162\ Doane Chilcoat, Zhan-Bin Liu, Jeffry Sander, Chapter Two--Use 
of CRISPR/Cas9 for Crop Improvement in Maize and Soybean, Editor(s): 
Donald P. Weeks, Bing Yang, Progress in Molecular Biology and 
Translational Science, Academic Press, Volume 149, 2017, 27-46, ISSN 
1877-1173, ISBN 9780128117439, https://doi.org/10.1016/
bs.pmbts.2017.04.005. http://www.sciencedirect.com/science/article/pii/
S1877117317300650.
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    Biotechnology is also being used to develop plant varieties, 
including apples and potatoes, that extend shelf life and avoid 
cosmetic issues, such as browning or spotting, that cause consumers to 
throw away food.\163\
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    \163\ http://www.forbes.com/sites/gmoanswers/2016/11/18/gmos-help-
reduce-food-waste/#710a513943bc.
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    Biotechnology has enabled major improvements to the yields, land-
use efficiency, and resiliency of important U.S. bioenergy feedstocks 
in recent decades. Continued biotechnology advances will need to occur 
in the near future if these improvements are to be maintained, let 
alone expanded upon. Climate change is expected to result in extreme 
weather events that are greater in frequency, magnitude, and duration, 
and these will threaten production of both the feedstocks that have 
contributed heavily to U.S. bioenergy and bioproducts to date as well 
as the plant biomass that slows the rate of atmospheric GHG 
concentration increase. The development of the CRISPR gene editing 
technique, along with continued advances in more traditional genetic 
engineering processes, will do much to enhance the ability of biomass 
to mitigate fossil fuel consumption and GHG emissions.
2.4.2  Animal Biotechnology
    In addition to the on-farm applications addressed in previous 
sections, biotechnology is also being leveraged to improve the carbon 
efficiency of animal agriculture through genetic engineering of the 
animals themselves. The biotech AquaBounty salmon, for example, 
requires 25% less feed than traditional Atlantic salmon. The 
combination of lower inputs and a closed-loop, land-based production 
system that can be deployed much closer to U.S. customers is estimated 
to result in a carbon footprint that is 96% lower than traditional 
farmed salmon.\164\
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    \164\ http://aquabounty.com/sustainable/.
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    Biotech tools are also being used to improve fertility, increase 
production efficiency, and reduce disease in cattle, swine and other 
animals, further reducing waste in animal production. Scientists in the 
U.S. are employing genomic tools to improve the ability of cattle to 
tolerate higher temperatures while maintaining their growth.\165\ Heat 
stress, which is an increasing problem in the livestock sector due to 
climate change, limits the production of animal protein, and heat-
tolerant cattle will be better able to maintain their production 
efficiency as temperatures increase. The genetic sequencing of dairy 
cattle has likewise led to efforts to improve the efficiency of milk 
production via genetic engineering.\166\ Livestock are a major source 
of the potent greenhouse gas methane, causing improvements to the 
efficiency of protein and milk production to have an outsized impact on 
GHG emissions.
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    \165\ http://www.digitaltrends.com/cool-tech/genetic-engineer-heat-
resistant-cows/.
    \166\ http://www.wpr.org/how-we-produce-more-milk-fewer-cows.
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3  Climate Impact Analysis
3.1  Issues in LCA for Biotechnology
    Successfully mitigating the impacts of climate change will involve 
simultaneous transformational shifts across technology, policy and 
business. Effectively planning, managing and evaluating these shifts 
will require an equally profound shift in how we track and account for 
carbon. Life Cycle Analysis (LCA) is widely regarded as the most 
appropriate and effective way of evaluating the carbon impacts of 
products and processes in the complex, modern economy. LCA is an 
analytical technique in which all inputs, outputs and impacts of a 
product or process are tracked and accounted for through its full life 
cycle. This includes the materials used to make things, the energy and 
associated emissions from transporting and processing them, and what 
happens at the end of a product's useful life. LCA is especially 
important and complex when biological systems are involved, since they 
introduce a significant degree of uncertainty; external conditions, 
pathogens, or changes in surrounding ecosystems can all impact the 
productivity of any organism.
    There are three main approaches to LCA: attributional LCA, 
consequential LCA and economic input-output (EIO) LCA. Attributional 
LCA focuses on the direct actions taken by a producer in order to make 
a product; all of the energy or materials consumed during production 
would be captured by an attributional LCA, for example. Consequential 
LCA, in contrast, focuses on comparing the world with the product in 
question to a hypothetical world without it; it not only captures all 
the materials used in production, but also how the product and its 
supply chains affect markets or other products. EIO LCA uses the flow 
of money through systems to estimate environmental impacts. For 
example, an EIO-LCA may use the average carbon emissions per dollar of 
revenue in the petrochemical industry to estimate the impacts of 
petrochemical inputs to other products. The accuracy of EIO LCA suffers 
because its impact-per-dollar estimates are, by necessity, industry 
averages or abstract estimates. It is best used for high level, market-
wide estimates rather than evaluating individual products or services. 
Attributional LCA is simpler than consequential, especially for most 
manufacturing processes, but consequential LCA is widely viewed as a 
more accurate technique because it can account for indirect effects, 
such as those that occur because of changes in commodity prices or 
disrupted supply chains. Attributional LCA would overlook the impact of 
new strains of crop on agricultural markets, for example, whereas 
consequential approaches may be able to account for these.
    The science of LCA has rapidly evolved over recent decades; 
however, a number of critical challenges remain pertaining to LCA in 
biotech:
    Lack of Data on Critical Inputs or Processes--Like most modeling 
techniques, the results of an LCA are only as good as the input data. 
In many cases, critical elements needed to understand the impacts of a 
product or process are unavailable, due to insufficient fundamental 
research, protections on proprietary information, or changes in 
technology. One common example is that many biotechnological 
manufacturing systems use enzymes or catalysts. Data on the energy or 
materials used to make these inputs is typically considered proprietary 
business information, which renders many LCAs on biotech products 
uncertain, at best. In other instances, the only source of data on an 
industrial practice is extrapolated from textbooks or older research on 
the subject, often overlooking recent technological developments in the 
field.
    Inadequate tracking of existing markets or systems--Consequential 
LCA's value derives largely from its ability to assess indirect 
effects. A common example of an indirect effect is Indirect Land Use 
Change (ILUC), which occurs when a system uses an agricultural product 
as its input, such as a biofuel made from soybean oil. While the 
biofuel itself may release little carbon during its production or use, 
the gallons of soybean oil which went into the biofuel would have 
otherwise been consumed elsewhere, such as in food products, animal 
feed or cosmetics. Those previous consumers must now find alternative 
sources of vegetable oil on the open market, driving up prices, which 
may result in clearing land to grow more oilseed crops. This land 
clearance is ILUC, the acres being cleared may not be used to produce 
biofuel, but they are cleared because of biofuel. Consequential LCA 
often requires tracking markets, land use, or behavior over a long 
period of time in order to establish ``normal'' behavior in that 
system; at present these data are often not collected, or are 
proprietary.
    Multiple LCA Methods--LCA is at its heart a scientific exercise, 
but parts of it require subjective judgment, like decisions about how 
to define system boundaries or allocate impacts between multiple 
products. There may be multiple valid answers to these judgment 
questions. For example, in the U.S. almost all ethanol production takes 
in corn and produces ethanol as well as the solids left behind after 
processing, which are typically sold as a high-protein animal feed 
known as ``distiller's grains''. The question for LCA practitioners is 
how much of the energy used in the process is assigned to the ethanol 
product vs. the distiller's grains. There are several methods for doing 
this, such as assigning based on the relative mass, energy content or 
monetary value of each product, but there is no objectively right or 
wrong answer about which method should be selected; it's a judgment 
call. When true objectivity may be impossible to attain, consensus can 
be a reasonable substitute. Government, industry and academic 
stakeholders can mutually agree on answers to questions like this to 
ensure that at the very least, LCAs can be made on the basis of similar 
assumptions, so that they can be effectively compared against each 
other.
    Ultimately, the analytical tools which support LCA will need to 
evolve in parallel with the biotech industry as it rises to meet the 
challenge of climate change. Industry groups can help support the 
continued development of LCA data by supporting basic research, 
agreeing to make more data on inputs and outputs from manufacturing 
available to researchers, and continuing to support and publish LCA 
studies of their products. Luckily, LCA shares a common characteristic 
of many sciences: as knowledge accumulates, future studies become 
easier and more powerful. Groups of companies that use similar 
processes to make a common product can aggregate their data together to 
publish industry averages for energy or materials use, thereby 
protecting their proprietary business information while improving 
analysts' ability to research. LCA data developed for one study is 
often used in subsequent ones; students who study real-world examples 
emerge better prepared to contribute in real-world work; and as more 
studies are published and critiqued, consensus emerges. While 
successfully mitigating climate change will require significant new 
investments in cleaner technologies and production systems, 
complementary investments must occur in evaluation and analysis of 
these systems to ensure that the LCA tools necessary to inform the next 
decades' decisions evolve as well.

    Keys to Maximizing Biotech's Potential to Reduce GHG Emissions

   GHG accounting needs to be based on life cycle analysis, and 
        include indirect effects such as ILUC. Industry groups can help 
        by making data available to regulators and researchers; IP can 
        be protected by aggregating or anonymizing the data.

   Most biotech solutions will require massive amounts of 
        feedstock, finding ways to produce this more efficiently will 
        always be useful.

   Using waste biomass to produce energy can make a real 
        difference, but keeping organic carbon in solid form as long as 
        possible maximizes GHG benefits.

   Biofuels may not be zero-carbon, but they can be very low 
        carbon and the scale of transportation means making them 
        sustainable and scalable is critically important.

   Carbon capture and sequestration will be necessary for 
        success, but as a complement to reducing emissions, not a 
        replacement.
3.2  GHG Mitigation Potential on National (U.S.) Scale
3.2.1  Producing Sustainable Biomass Feedstock
    Biomass is one key to de-carbonizing the U.S. economy because it 
leverages the capacity of photosynthesis to remove carbon from the 
atmosphere and convert it to carbohydrates, which can be utilized for 
their embodied energy, carbon, or both. In theory, biomass can be a 
carbon-neutral resource, but in practice the situation is much more 
complex. Growing biomass, especially at commercial scales, typically 
requires fertilizer and other inputs which have associated emissions. 
Depending on how the land being used for biomass is treated, there may 
be additional sources, or sinks, of carbon in the soil. Understanding 
the emissions impacts of biomass across its full life cycle requires 
understanding the ecosystems, carbon and nutrient cycles at play where 
it's grown. Given the potential for biomass production to result in 
significant and unexpected emissions of carbon, a risk-averse approach 
is prudent, but the immense potential of biofuels, bioenergy and 
bioproducts argues in favor of utilizing these resources where 
available. While there is significant uncertainty around the emissions 
associated with any source of biomass, there are a few useful rules of 
thumb:

  1.  Biomass can be low-carbon but is almost never zero-carbon. While 
            the carbon embodied in plant matter was taken from the 
            atmosphere, and therefore has a minimal on climate change, 
            there are numerous sources of climate-forcing emissions 
            from fertilizer, irrigation, transport, processing and 
            changes in the soil.

  2.  Biobased products can reduce GHG emissions when substituted for 
            high-carbon ones, especially those relying on fossil fuels. 
            GHG reductions are realized when low-carbon biobased 
            products displace higher-carbon ones. Without that 
            displacement, there is minimal environmental benefit. 
            Substitution, by itself, is no guarantee of benefit, a few 
            biobased products are more carbon-intensive than their 
            fossil equivalents.

  3.  Alternative uses and indirect effects must be considered. 
            Accurately assessing biomass carbon emissions typically 
            requires considering indirect effects like ILUC, as well as 
            what would have happened in absence of the biomass 
            production. A cultivation system may increase soil carbon, 
            but should only be credited for these increases if this 
            increase is greater than what would have happened 
            otherwise.

  4.  The labels ``waste'' and ``residue'' can be misleading. In 
            theory, wastes or residues have no value, and cause 
            emissions from their use. In truth, many of these materials 
            are used in some fashion, sometimes by sustainable bio-
            product systems, sometimes more traditionally, as animal 
            bedding or returned to the soil; these uses must be 
            considered.

    Climate policy has largely overlooked emissions from agriculture to 
date, in part because of the complexity of the system and concern about 
financial impacts on farmers and rural communities. With new focus on 
sustainable and regenerative agriculture, however, a window of 
opportunity is opening to achieve a win-win scenario for agricultural 
producers: utilize the latest science to find opportunities to use 
agriculture as a tool to reduce emissions, and reward farmers for the 
carbon benefits they provide.
    Agriculture in the U.S. emitted GHGs equivalent to about 658.6 
million metric tons of carbon dioxide in 2018, roughly 10% of the U.S. 
total.\170\ About 94% of this was emitted from agricultural soils or 
livestock (direct or ``enteric'' emissions from animals as well as 
manure management). Additional emissions come from the production of 
ammonia, which is a primary input for most fertilizers. With continued 
population growth as well as the emergence of the bioeconomy, the 
agricultural sector will be called upon to produce even more food, 
fodder, fiber and feedstock. Meeting this challenge while reducing 
emissions will require the rapid deployment of advanced biotechnology 
in several critical areas including:
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    \170\ http://www.epa.gov/sites/production/files/2020-04/documents/
us-ghg-inventory-2020-main-text.pdf.

    Optimizing fertilizer use through new crop strains or increased 
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nitrogen fixation

    Nitrogen is often a limiting factor in agricultural yields. The 
``Green Revolution,'' which massively increased agricultural production 
and allowed rapid population growth during the 20th Century, was 
largely facilitated by the development of the Haber Process for 
producing ammonia from natural gas. Ammonia production supports 50-75% 
of global fertilizer production and is responsible for more than 1% of 
global GHG emissions.\171\ Removing biomass from fields, whether it's 
crops for consumption or residues for bioenergy, takes some of that 
nitrogen along with it, which must be replaced. Biotech can improve 
plants' efficiency at utilizing nitrogen, or adding genes from 
nitrogen-fixing organisms to allow them to produce their own. Using 
modern biotechnological tools to optimize the use of synthetic 
fertilizers allows growers to consume less of them, which could help 
U.S. farmers cut back on 15-20 million metric tons of carbon associated 
with its production, about as much as fueling 3-4 million cars for a 
year.\172\
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    \171\ Green Chem., 2020, 22, 5751-5761. https://doi.org/10.1039/
D0GC02301A. http://pubs.rsc.org/en/content/articlelanding/2020/gc/
d0gc02301a#!divAbstract.
    \172\ Estimate based on EPA GHG emission inventory. Quantification 
is imprecise because emissions from energy consumption during ammonia 
production are aggregated with multiple other uses.

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    Reducing nitrous oxide emissions from soil

    Nitrogen fertilizers enhance plant growth, but many soil microbes 
convert fertilizer nitrogen to nitrous oxide (N2O), a 
greenhouse gas up to 298 times more potent than carbon dioxide. In 
2017, nitrous oxide emissions from agricultural soil accounted for 266 
million metric tons of carbon dioxide equivalent in the U.S. Relatively 
low-tech interventions, such as using less volatile fertilizers and 
applying them more efficiently could reduce nitrous oxide emissions by 
30-100 million metric tons annually.\173\ Analyses of chemical 
inhibitors indicate a potential to cut nitrous oxide emissions by over 
40%, and there are promising lines of research which would integrate 
production of these inhibitors into a plant's root system.\174\ By 
combining all of these approaches, nitrous oxide emissions could be 
reduced, by well over 150 million metric tons of carbon equivalent, or 
as much as shutting down 32 U.S. coal power plants for a year.
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    \173\ http://ec.europa.eu/environment/enveco/climate_change/pdf/
nitrous_oxide_emissions.pdf.
    \174\ Norton Jeanette, Ouyang Yang, Controls and Adaptive 
Management of Nitrification in Agricultural Soils, Frontiers in 
Microbiology, 10, 2019, DOI.10.3389/fmicb.2019.01931, ISSN = 1664-302X. 
http://www.frontiersin.org/articles/10.3389/fmicb.2019.01931/full.

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    Enhancing soil carbon retention through expanded root growth

    Despite its mundane appearance, soil is a complex and dynamic 
environment, in which carbon and nutrients enter and leave through 
multiple avenues and cycle through plants, animals, microbes and fungi. 
There are several promising approaches by which the soil carbon system 
could be encouraged to retain more carbon in solid form, rather than 
being decomposed and released to the atmosphere. Root growth is a major 
pathway for soil carbon accumulation, as plants take carbon from the 
atmosphere and convert it to solid plant matter, moving it underground 
as roots grow. Engineering crops to have larger and deeper root systems 
expands this pathway and could sequester carbon by 200 to 600 million 
metric tons per year if widely deployed, though this number is highly 
uncertain due to the relative immaturity of this technology.\175\
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    \175\ http://arpa-e.energy.gov/sites/default/files/documents/files/
Revised_Final_Report_to_
ARPA_Bounding_Analysis.pdf.

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    Reducing methane emissions from livestock

    As population and incomes increase globally, so does the 
consumption of meat and dairy products. This leads to an increase in 
livestock numbers and the associated emissions. Livestock, especially 
cattle, are a major source of methane, from enteric sources (i.e., 
burps) as well as from decomposing manure. Several novel feed additives 
have been proposed which may be able to reduce the amount of methane 
emitted without negatively affecting animal health or reducing yields. 
DSM has announced a cattle feed supplement that claims to reduce 
methane emissions by 30%,\176\ while other compounds under 
investigation--often derived from red seaweed--may be able to provide 
80% reductions or greater in methane emissions.177-178  
While numerous technological and policy hurdles remain, widespread 
deployment of feed technologies like these could reduce emissions from 
livestock production by 50-140 million metric tons, or roughly one to 
three times the annual emissions from the state of Oregon.
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    \176\ http://www.dsm.com/corporate/markets/animal-feed/minimizing-
methane-from-cattle.html.
    \177\ Roque B.M., Venegas M., Kinley R.D., de Nys R., Duarte T.L., 
Yang X., et al. (2021) Red seaweed (Asparagopsis taxiformis) 
supplementation reduces enteric methane by over 80 percent in beef 
steers. PLoS ONE 16(3): e0247820. https://doi.org/10.1371/
journal.pone.0247820. http://www.biorxiv.org/content/10.1101/
2020.07.15.204958v1.abstract.
    \178\ Breanna M. Roque, Joan K. Salwen, Rob Kinley, Ermias Kebreab, 
Inclusion of Asparagopsis armata in lactating dairy cows' diet reduces 
enteric methane emission by over 50 percent, Journal of Cleaner 
Production, 234, 2019, 132-138, ISSN 0959-6526 https://doi.org/10.1016/
j.jclepro.2019.06.193 http://www.sciencedirect.com/science/article/abs/
pii/S0959652619321559.
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3.2.2 Empowering Sustainable Production
    Empowering Sustainable Production

    Modern economies produce a staggering amount of things. From 
millions of printed silicon microcircuits in electronics to billions of 
tons of concrete and steel, production of physical objects is a 
hallmark of human society. As we seek to limit the damage caused by 
climate change, a new focus on sustainability must enter the 
conversation about how we make things. Luckily, advances in technology 
have presented a number of opportunities to do just this, by developing 
more efficient and lower-emission alternatives to traditional 
industrial techniques. Biotechnology can continue this process by 
leveraging the affinity biological processes have for working within a 
circular economy.

    Green is the New Black
Elements of a circular economy. 


          Source: PBL Netherlands.\179\
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    \179\ http://themasites.pbl.nl/o/circular-economy/.

    Traditionally, once materials were extracted, their life was a one-
way trip that ended in a landfill. As industries become more aware of 
the need to reduce emissions, it is becoming clear that reuse and 
recycling of materials and energy is an essential tool for 
sustainability. Biotechnology is well-positioned to succeed in a 
sustainable circular economy because it is built on a foundation of 
biological carbon cycling. Working with natural systems which have 
evolved to capture and re-use carbon and nutrients, biotechnology firms 
can expand these processes to commercial scale, replacing energy- and 
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emission-intensive extractive industries with low-impact circular ones.

    Turning Carbon into Products

    U.S. industry emits over 800 million metric tons of carbon per year 
from the combustion of fossil fuels; at present almost all of this goes 
into the atmosphere, representing over \1/8\ of national emissions. 
Numerous projects have already sought to demonstrate the feasibility of 
capturing this carbon and sequestering it underground, or using it for 
enhanced oil production, but a number of innovative processes are 
emerging to use the carbon as a raw material for other products, 
including polymers, carbon fiber, chemicals, nanomaterials or fuels 
using a variety of methods. Conventional carbon capture systems can 
typically pull 80-90% of the carbon dioxide out of exhaust from 
combustion systems,\180\ which means that there is a potential resource 
of hundreds of millions of tons of carbon dioxide which could 
potentially be used to make new products. The limiting factor will 
probably be the availability of processes to utilize the carbon and 
markets for the resulting products.
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    \180\ http://doi.org/10.1155/2014/828131. https://www.hindawi.com/
journals/tswj/2014/828131/.
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    Bioplastics have been one of the first large-scale applications of 
biotechnology for the purpose of improving industrial sustainability. 
Dozens of alternative biobased polymers have entered the market, 
demonstrating the capacity to replace fossil carbon in a variety of 
applications and, in many cases, offering more sustainable recycling or 
reuse options than traditional equivalents. Around 1% of U.S. GHG 
emissions come from producing plastics. Switching from fossil-based 
plastics to corn-based biopolymers could reduce emissions by 0.6kg-
1.4kg of CO2 per kilogram of plastic.\181\ * Widely applied, 
this could reduce emissions from plastic production by about 25%, 
totaling 16 million metric tons of CO2 per year. Switching 
from corn to cellulosic feedstocks, like switchgrass, Miscanthus, or 
corn stover could double the emission benefits.\183\
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    \181\ Environ. Sci. Technol. 2016, 50, 6, 2846-2858. https://
doi.org/10.1021/acs.est.5b05589. http://pubs.acs.org/doi/10.1021/
acs.est.5b05589.
    * Editor's note: there is no corresponding footnote reference for 
footnote 182. The reference as been incorporated herein as follows:
    Daniel Posen, et al. 2017 Environ. Res. Lett. 12 034024. http://
iopscience.iop.org/article/10.1088/1748-9326/aa60a7. It should be noted 
that this study found greater GHG benefits from plastic production 
using renewable energy than feedstock conversion, however these are not 
mutually exclusive.
    \183\ http://ww2.arb.ca.gov/resources/documents/lcfs-pathway-
certified-carbon-intensities.

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    Organic Waste Utilization

    Researchers and policy makers are becoming increasingly aware of 
the need to more efficiently use materials in industry. This is 
particularly true of organic waste, like food scraps, agricultural 
residue and un-recyclable wood products, because they not only require 
fertilizer and other inputs to make those materials, but as they 
decompose, also emit carbon dioxide or, worse, methane. Anaerobic 
digestion (AD) is a well-understood technology for converting organic 
waste into energy, while recovering nutrients that can be returned to 
the soil. When decomposition happens in the absence of oxygen, microbes 
convert organic waste into biogas--a mixture of methane, carbon 
dioxide, water vapor and other trace components. This can be cleaned up 
to yield Renewable Natural Gas (RNG), which is mostly methane and 
functionally equivalent to fossil natural gas. AD produces not only 
this valuable product, but also solid digestate, which is very similar 
to compost and can be used as a beneficial soil amendment. By capturing 
the methane which would otherwise have been released into the 
atmosphere, AD further reduces the GHG footprint of organic waste 
disposal; in some cases the effect of preventing uncontrolled releases 
of methane can be so great that the resulting RNG is effectively 
carbon-negative, when evaluated by LCA.\180\ Widespread deployment of 
RNG systems at landfills, wastewater treatment plants, livestock yards 
and other organic waste hotspots could displace enough fossil natural 
gas to offset 40-75 million metric tons of carbon dioxide emissions. 
Using agricultural residue or wood waste could add another 12-40 
million metric tons, though these resources may have other competing 
uses in a low-carbon economy.\184\
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    \184\ http://gasfoundation.org/2019/12/18/renewable-sources-of-
natural-gas/.

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    Cleaner Buildings

    There are opportunities to build sustainable, circular material 
cycles into more than just consumer products. Carbon can be pulled out 
of the atmosphere and used to make the very buildings, roads, and 
cities we live in. Wood, long thought of as a traditional building 
material, is enjoying new attention as a low-carbon solution for future 
construction. Since wood pulls carbon from the air as it grows, it 
represents a very stable and durable removal mechanism for atmospheric 
carbon, which will remain sequestered as long as the wood remains 
solid. Engineered wood products, including cross-laminated timber, 
fiber or polymer reinforced products, or wood composites can provide 
strength and durability previously thought possible only from metal. A 
recent study of engineered wood products found that they can reduce GHG 
emissions by 20% when substituted for fabricated metal, 25% for 
concrete and 50% for iron or steel. Engineered wood has been used to 
build several multistory demonstration buildings to show that high-rise 
construction is possible without conventional materials. A five-story 
wood building stores about 26 lb of carbon per square foot.\185\ With 
over 350 million square feet of multifamily housing constructed in the 
U.S. in 2019, the potential carbon savings could be substantial.\186\
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    \185\ http://www.pik-potsdam.de/en/news/latest-news/buildings-can-
become-a-global-co2-sink-if-made-out-of-wood-instead-of-cement-and-
steel.
    \186\ http://www.census.gov/construction/chars/highlights.html.
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    Another opportunity to find uses for carbon dioxide is in cement, 
which is currently one of the largest sources of greenhouse gas 
emissions in the world and was responsible for over 40 million tons of 
emissions in the U.S.\187\ Researchers have been investigating 
alternative formulations of cement, which utilize carbon dioxide during 
production or absorb it from the air as it cures. By integrating these 
techniques with renewable energy to power the process, it is possible 
to end up with carbon-neutral concrete turning some infrastructure 
projects into net carbon sinks.
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    \187\ http://www3.epa.gov/ttnchie1/conference/ei13/ghg/hanle.pdf.
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3.2.3  Developing Lower-Carbon Products
    If humanity is to successfully avoid the worst impacts of climate 
change, it will have to find lower-carbon substitutes for many of its 
most important products. No product exemplifies this challenge better 
than transportation fuel. The ready availability of reliable, high-
speed transportation is a foundational element of life in the U.S.; it 
is the lifeblood of modern supply chains and personal lifestyle. The 
U.S. is by far the biggest consumer of oil in the world, consuming 
almost 20 million barrels of crude oil per day, and processing it 
through more than 130 refineries into a wide range of fuels and 
petrochemical products, most importantly gasoline and diesel.\188\ The 
emissions from vehicle tailpipes, plus the production and refining of 
petroleum total over 1,900 million metric tons of carbon dioxide 
equivalent each year, almost 30% of the U.S. total or about as much as 
Germany and Japan, combined.\189\
---------------------------------------------------------------------------
    \188\ http://www.eia.gov/petroleum/refinerycapacity/.
    \189\ https://www.epa.gov/sites/production/files/2020-04/documents/
us-ghg-invntory-2020-main-text.pdf.
---------------------------------------------------------------------------
    Neither the U.S. nor any other nation can halt climate change while 
depending on petroleum to fuel its transportation system. There is no 
single solution to this problem, a full portfolio of tools is needed. 
Light-duty vehicles, like cars, trucks, and SUVs consume the majority 
of petroleum in the U.S.; there is consensus within the transportation 
research community that replacing these with battery electric vehicles, 
charged on a grid dominated by renewables or other carbon-free sources, 
will by the primary way of reducing these emissions, with mass transit 
and other measures also playing a role. Many of the medium and heavy 
duty vehicles, like box trucks, delivery vans and some tractor-trailers 
will also be powered by electricity from batteries, or possibly 
hydrogen fuel cells.\190\ There are some types of transportation, 
however, for which energy-dense liquid fuels will be much harder to 
replace. Aviation is the biggest of these; the U.S. consumed over 18 
billion gallons of jet fuel in 2019,\191\ and while the industry will 
take some time to recover from the ravages of COVID-19, commercial air 
travel will continue to factor in global transportation. Some marine 
applications, long-haul trucking, military operations, backup and 
emergency power, and specialized vehicles may also need liquid fuels. 
The U.S. currently consumes around 15 billion gallons of ethanol per 
year, and around 2.5 billion gallons of biomass-based diesel 
substitutes including biodiesel and renewable diesel. The vast majority 
of ethanol is made from corn, while around [] of U.S. biomass-based 
diesel is made from soybean or canola oil, with the rest coming from 
waste oil or byproducts.\192\
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    \190\ http://www.caletc.com/assets/files/ICF-Truck-
Report_Final_December-2019.pdf.
    \191\ http://www.transtats.bts.gov/fuel.asp?pn=1.
    \192\ http://www.eia.gov/biofuels/update/.
---------------------------------------------------------------------------
    Most of the biofuels currently used in the U.S. reduce carbon 
emissions when they displace petroleum fuels. Typical corn ethanol 
emits about 30% less carbon than gasoline, when the full life cycle of 
both products are considered, and typical biodiesel or renewable diesel 
from soybean oil reduces carbon by 40-50% over the full life 
cycle.\193\ With domestic consumption of these fuels measured in the 
billions of gallons each year, these emission reductions represent 
millions of tons of avoided carbon. The use of biofuels is estimated to 
have reduced U.S. transportation sector GHG emissions by 980 MMT 
CO2 from 2009-2020.\194\ This is equivalent to taking 
roughly 16 million vehicles off the road, or 19 coal-fired power plants 
offline, forthat 13 year period.\195\
---------------------------------------------------------------------------
    \193\ Based on CARB default values under the LCFS. It should be 
noted that the GHG reductions from current biofuels are uncertain and 
the subject of considerable debate, the values presented here are 
conservative estimates. http://ww2.arb.ca.gov/resources/documents/
substitute-pathways-and-default-blend-levels-lcfs-reporting-specific-
fuel.
    \194\ Unnasch. S. and D. Parida (2021) GHG Reductions from the 
RFS2--A 2020 Update. Life Cycle Associates Report LCA. 
LCA.6145.213.2021 Prepared for Renewable Fuels Association. http://
ethanolrfa.org/wp-content/uploads/2021/02/LCA_-_RFS2-GHG-
Update_2020.pdf.
    \195\ http://www.epa.gov/energy/greenhouse-gas-equivalencies-
calculator.
---------------------------------------------------------------------------
    First-generation biofuels alone cannot meet the challenge of near-
complete de-carbonization by mid-century, but have achieved critical 
near-term reductions as other low-carbon transportation solutions are 
being developed; and they form an important technological foundation 
for the next generation of low-carbon fuels. The biotech industry can 
leverage its capacity to innovate to help advance biofuels in two main 
ways, reducing emissions from current production and developing zero, 
or near-zero carbon fuels.

    Reducing Emissions From Existing Fuels

    The U.S. fuel ethanol industry operates around 200 production 
facilities spread across the U.S., representing tens of billions of 
dollars in capital investment and thousands of jobs.\196\ While corn-
based ethanol may struggle to achieve the very low carbon levels needed 
in the long-term future, it has a critical role to play over the next 
few decades. As long as there is petroleum-based gasoline being 
consumed in the world, there will be value in producing a substitute 
that is 30% less carbon intensive; and the evidence suggests that the 
industry can reduce emissions even further. Driven in large part by the 
adoption of carbon intensity standards like California's LCFS, the 
ethanol industry has improved the efficiency of its facilities and 
found new ways to recover valuable co-products. Doubling down on these 
processes can continue to reduce emissions.
---------------------------------------------------------------------------
    \196\ http://www.eia.gov/petroleum/ethanolcapacity/.
---------------------------------------------------------------------------
    Improved efficiency of ethanol production facilities has reduced 
the energy inputs needed per gallon of output by a few percent per 
year,\197\ and the industry has begun to utilize cellulosic processing 
technology to convert the previously indigestible corn kernel fiber 
into ethanol, increasing the yield from each bushel of corn by 3-4%. 
Improved crop yields and strains optimized for fuel production also 
help reduce the emissions associated with each unit of fuel. 
Incremental improvements like these seldom grab headlines, but on the 
scale of U.S. ethanol production, they add up. Each 1% improvement in 
average carbon intensity, across the entire U.S. ethanol industry 
results in around 800,000 metric tons of avoided carbon dioxide 
emissions each year.\198\ Similarly, there are opportunities to improve 
the efficiency of biodiesel and renewable diesel production, the latter 
of which anticipates almost a six-fold increase in U.S. production 
capacity over the next 5 years.\199\ More efficient catalysts and 
purification systems can reduce the need for energy or reagent inputs, 
driving GHG emissions down even further. If the U.S. renewable diesel 
industry grows as anticipated, each 1% improvement in efficiency yields 
around 170,000 metric tons of avoided emissions each year.\200\
---------------------------------------------------------------------------
    \197\ Flugge, M.; Lewandrowski, J.; Rosenfeld, J.; Boland, C.; 
Hendrickson, T.; Jaglo, K.; Kolansky, S.; Moffroid, K.; Riley-Gilbert, 
M.; and Pape, D., ``A Life-Cycle Analysis of the Greenhouse Gas 
Emissions of Corn-Based Ethanol'' (2017). Publications from USDA-ARS/
UNL Faculty. 1617. http://digitalcommons.unl.edu/usdaarsfacpub/1617. 
https://www.researchgate.net/profile/Marybeth_Riley-Gilbert2/
publication/312621455_A_Life-Cycle_Analysis_of_the_Green
house_Gas_Emissions_of_Corn-Based_Ethanol/links/
5894ba9e4585158bf6e95397/A-Life-Cycle-Analysis-of-the-Greenhouse-Gas-
Emissions-of-Corn-Based-Ethanol.pdf
    \198\ Based on an assumed 15 billion gallon ethanol industry and 68 
g CO2e/MJ average carbon intensity for finished ethanol, a 
value representative of typical Midwest corn ethanol production.
    \199\ http://adi-analytics.com/2020/02/10/regulations-to-drive-u-s-
renewable-diesel-capacity-growth-through-2025/.
    \200\ Based on an assumed 2.5 billion gallon per year renewable 
diesel industry and 54 g/MJ carbon intensity for finished renewable 
diesel, a value representative of current soybean oil based production.
---------------------------------------------------------------------------
Figure 2: Each 100 million gallons of advanced, low carbon biofuel has 
        the potential to displace as much as 1 million tonnes of 
        carbon, if it displaces petroleum fuels, or over 200,000 tonnes 
        if it displaces current-generation biofuels.
Potential Emissions Reductions From 100 Million Gal. of Advanced 
        Biofuel 
        
        
          Source: California Air Resources Board.

    Developing Zero or Near-Zero Carbon Fuels

    De-carbonizing transportation will require a new generation of 
fuels. Cellulosic biofuels, which use inedible plant matter as their 
feedstock, offer the potential for much deeper reductions in carbon 
emissions.\201\ Cellulosic biofuels have been on the horizon for many 
years, but technological and supply chain challenges sank several early 
projects. A new wave of cellulosic production facilities, promising 60-
80% lower emissions than conventional fuels are under development and 
if early projects are successful, could be the start of a new, multi-
billion gallon per year industry. One key difference between the first 
wave of cellulosic production facilities and this one is that rather 
than breaking down cellulose into sugars and fermenting them into 
ethanol like you would with starch, these facilities use heat to 
convert biomass into a gas, or light oils, then process those into 
finished fuels. There are numerous opportunities to further refine the 
process, however, by making more selective and durable catalysts, or 
providing feedstock which improves yields, is more easily handled or 
requires less pre-treatment.
---------------------------------------------------------------------------
    \201\ Murphy, Colin W., and Alissa Kendall. ``Life Cycle Analysis 
of Biochemical Cellulosic Ethanol under Multiple Scenarios.'' GCB 
Bioenergy, vol. 7, no. 5, May 2015, pp. 1019-1033, doi:10.1111/
gcbb.12204. http://onlinelibrary.wiley.com/doi/abs/10.1111/gcbb.12204.
---------------------------------------------------------------------------
    Algae or other microbes may offer the greatest potential to deliver 
fuels that approach or achieve carbon neutrality. Algae can be grown 
using wastewater or even exhaust gas as their primary source of 
nutrients and can be tailored to produce highly desirable oils or 
carbohydrates at extremely high theoretical yields. Attempts to scale 
these systems up have run into problems with pathogens, competition 
from wild microbes and finding efficient methods to separate desired 
products from water and cell mass. If algal fuels, or other advanced 
synthetic fuels could be commercialized, they offer the potential for 
billions of gallons of a product that is compatible with existing 
vehicles and infrastructure. Figure 2, shows the potential emissions 
reductions from 100 million gallons of a hypothetical advanced fuel, at 
various carbon intensities.\202\ Depending on what it displaces, the 
emissions benefits could be a few hundred thousand to over 1 million 
metric tons each year
---------------------------------------------------------------------------
    \202\ Based on typical carbon intensities of fuels under the LCFS 
as reported in: http://ww2.arb.ca.gov/sites/default/files/classic/
fuels/lcfs/fuel-pathways/current-pathways_all.xlsx.
---------------------------------------------------------------------------
3.2.4 Enhancing Carbon Sequestration
    Enhancing Carbon Sequestration

    Drastically reducing carbon emissions is necessary if humanity is 
to avoid the worst effects of climate change, but more will be needed. 
Almost every model of a successful stabilization of temperatures 
includes a large amount of carbon dioxide removal from the atmosphere, 
through enhanced plant growth and CCS. Figure 3 shows results from the 
IPCC 5th assessment report regarding global carbon emissions 
trajectories that preserve a hospitable climate. Each line represents 
one simulation of the future in which average temperature increase is 
kept below 1.5 C (the graph for a 2 C outcome looks quite similar). 
In every case, net emissions must not only be reduced to zero, but the 
world will need to rapidly remove carbon from the atmosphere over the 
second half of this century.\203\ Biotech can provide crucial tools to 
help this effort.
---------------------------------------------------------------------------
    \203\ Source: IPCC Mitigation Pathways Compatible with 1.5C in the 
Context of Sustainable Development, Figure 2.5. http://www.ipcc.ch/
site/assets/uploads/sites/2/2019/02/SR15_Chapter2_Low_Res.pdf.
---------------------------------------------------------------------------
    It is difficult to estimate how much of an impact carbon capture 
might have on the climate system of the future; in some ways the sky is 
really the limit since there is certainly no shortage of carbon dioxide 
in the atmosphere to remove. Accelerated R&D and rapid deployment of 
demonstration projects will be necessary to identify and prove the 
capabilities of the many technological options which could contribute.
Figure 3


          Source: IPCC 5th Assessment Report.

    Bioenergy with Carbon Capture and Sequestration (BECCS)

    Many of the most promising concepts for scalable carbon 
sequestration rely on photosynthesis to do the actual capturing of 
carbon dioxide, which can then be used or stored. One of the most 
promising is BECCS, which uses the biomass from plants to produce fuels 
or energy, storing carbon along the way. There are many proposed models 
for BECCS, from burning biomass in conventional power plants and 
capturing carbon from the exhaust, to gasification systems which leave 
behind carbon-dense biochar that can be used as a carbon-sequestering 
soil amendment. The energy or fuels produced by these systems would 
also help displace fossil fuels, providing a double climate benefit. A 
recent analysis estimated that, by 2040, BECCS could cost effectively 
remove over 700 million metric tons of carbon per year,\204\ or more 
than half the emissions from all U.S. coal power plants, though doing 
so would require a massive amount of sustainable biomass feedstock to 
be produced.
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    \204\ http://www.ornl.gov/news/bioenergy-carbon-capture-combo-
could-cost-effectively-mitigate-carbon-dioxide.

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    Sequestration in Natural and Working Lands

    Natural ecosystems have been sequestering carbon for millennia 
without human assistance and should not be overlooked as a method of 
removing carbon from the atmosphere. The main mechanism of 
sequestration is through the growth of roots in the soil, accumulation 
of fallen organic matter, or the accumulation of organic matter at the 
bottom of oxygen-poor bodies of water. Most biomass decomposes or is 
consumed by animals but some, especially the hard-to-digest fibrous 
parts of plants composed of lignin and cellulose, remains in solid form 
for decades or more and is integrated into soil. Human encroachment on 
natural lands and climate change are affecting most natural ecosystems, 
often disrupting this process; but careful intervention, through things 
like managed replanting, selective breeding for sequestration 
potential, soil amendments such as compost or biochar, selective 
harvest and prescribed fire can increase the rate of carbon 
sequestration and build healthy, resilient ecosystems. The National 
Academies concluded that enhanced management of forests could sequester 
anywhere from a few hundred pounds to over a ton of carbon per hectare 
annually; \205\ widely deployed this could result in sequestration of 
100 million metric tons of carbon per year, with an additional 150 
million metric tons possible through expanding forested areas, this 
would be like taking 20 to 50 million cars off the road.
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    \205\ http://www.nap.edu/catalog/25259/negative-emissions-
technologies-and-reliable-sequestration-a-research-agenda.

---------------------------------------------------------------------------
    Enhanced Weathering

    While the majority of carbon removal from the atmosphere is done by 
plants, it is not the only mechanism. Certain types of mineral like 
olivine, serpentine and basalt will react with carbon dioxide to form 
stable carbonate minerals in a process known as ``weathering''. This 
mechanism has been largely responsible for mitigation of high 
atmospheric CO2 concentrations in prehistoric times. 
Unfortunately, it is naturally quite slow, suited for geological rather 
than human time scales; but there are ways that it might be accelerated 
and scaled to help address the climate crisis. Olivine and serpentine 
are often found in discarded mine tailings or asbestos formations; 
basalt can often be found in geologically active areas, where 
geothermal power plants may be active. By managing air flow, moisture 
and pH levels in these sites, the rate of carbon uptake could be 
substantially increased. Adding catalysts, or microbial agents could 
increase the potential even further.

    Direct Air Capture

    Most carbon capture systems rely on natural processes to remove 
carbon from the atmosphere, but new innovative approaches may offer the 
opportunity to cut out the intermediate step. Several processes are 
being tested that use chemical solvents, such as amine or carbonate 
solutions, to absorb CO2 from the atmosphere, and release it 
into a containment system, resulting in pure CO2 that can 
then be sequestered underground or used to make products. Since 
CO2 is only a few hundred parts per million in the 
atmosphere, this process requires a lot of surface area and usually 
uses heat to regenerate the solvent solution. This can make these 
systems bulky and energy-intensive. By developing more effective and 
durable solvents, or lower-energy regeneration processes, these systems 
could be made cheaper and more scalable. The upper limit of potential 
for these systems depends on how optimistic one is about the rate at 
which they will improve their energy and cost efficiency. Studies have 
projected the impact of direct air capture at anywhere from a few 
hundred million tons to more than half of today's global CO2 
emissions.\206\
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    \206\ Realmonte, G., Drouet, L., Gambhir, A., et al. An inter-model 
assessment of the role of direct air capture in deep mitigation 
pathways. Nat. Commun. 10, 3277 (2019). http://doi.org/10.1038/s41467-
019-10842-5. https://www.nature.com/articles/s41467-019-10842-5.
---------------------------------------------------------------------------
4  Barriers to Adoption and Policy Proposals
4.1  Financing Barriers
    Biofuels and bioproducts have historically faced a major 
commercialization hurdle in the form of access to financing. 
Biotechnology products that are intended to reduce GHG emissions must 
necessarily compete with fossil fuels that supply a well-established 
refining and petrochemicals production infrastructure. Whereas this 
fossil infrastructure is often decades old and has often been fully 
paid off by its owners, biotechnology products require investment in 
either new infrastructure or large-scale retrofits of existing 
infrastructure. These investments can be very expensive, with one 
review of announced commercial-scale cellulosic biofuel projects 
finding capital costs to be approximately $11/gallon of installed 
production capacity.\207\ With the exception of large, established 
companies, few new producers have ready access to this amount of 
capital, necessitating that they access the capital markets through 
lenders and/or investors.
---------------------------------------------------------------------------
    \207\ Brown, T.R. and Brown, R.C. (2013), A review of cellulosic 
biofuel commercial-scale projects in the United States. Biofuels, 
Bioprod. Bio--ref., 7: 235-245. http://doi.org/10.1002/bbb.1387. 
https://onlinelibrary.wiley.com/doi/full/10.1002/bbb.1387.
---------------------------------------------------------------------------
    Private sources of capital generally require a demonstration that a 
biotechnology project can achieve certain levels of profitability in 
the form of a ``hurdle rate'' before providing access to financing. 
Biobased fuels and products compete with fossil fuels and products for 
market share, and the market value of the former operates as a function 
of the latter as a result. On occasion this has been advantageous for 
biotechnology products, such as when fossil fuel prices rose sharply in 
2007-08. The steady decline of fossil fuel prices that has occurred 
over the last decade in response to increased unconventional production 
of natural gas and petroleum in the U.S. has made it more difficult for 
biotechnology products to obtain the necessary hurdle rates for 
financing, however, even as climate change has become an important 
concern for American consumers.\208\ Likewise, the immediate financial 
incentive to make investments in energy efficiency and other marginal 
reductions to GHG emissions is limited when energy costs are low.
---------------------------------------------------------------------------
    \208\ http://www.pewresearch.org/science/2019/11/25/u-s-public-
views-on-climate-and-energy/.
---------------------------------------------------------------------------
    A challenge faced by biofuels and bioproducts is that many of the 
advantages that they offer over fossil fuels are not reflected in their 
market value. For example, in addition to the GHG emissions reductions 
discussed above, many biotechnology products achieve low levels of 
other types of pollution such as particulate matter emissions, sulfur 
emissions, water contamination, and toxic waste production compared to 
fossil fuels. These reduced impacts on human health and the environment 
have a clear monetary benefit in the form of reduced spending on 
medical services, environmental remediation, recovery from extreme 
weather events, etc.\209\ Moreover, biotechnology provides the ability 
to reduce GHG emissions and other forms of pollution across a variety 
of economic sectors, including agriculture, manufacturing, and 
transportation. Such benefits are not reflected in the market value of 
the biotechnology products, however, placing them at a competitive 
price disadvantage to fossil fuels.
---------------------------------------------------------------------------
    \209\ Deryugina, Tatyana, Garth Heutel, Nolan H. Miller, David 
Molitor, and Julian Reif. 2019. ``The Mortality and Medical Costs of 
Air Pollution: Evidence from Changes in Wind Direction.'' American 
Economic Review, 109 (12): 4178-4219. DOI: 10.1257/aer.20180279. http:/
/www.aeaweb.org/articles?id=10.1257/aer.20180279.
---------------------------------------------------------------------------
    Governments have sometimes enacted policies that cause the benefits 
of biofuels and bioproducts to be reflected on the marketplace, either 
by subsidizing those biotechnology products that have reduced impacts 
on human health and the environment or by increasing the cost of fossil 
fuels (see Section 4.3). Some, such as California's LCFS, have prompted 
rapid growth in the use of biofuels by subsidizing biofuels, especially 
those from second-generation feedstocks, based on the degree to which 
they reduce transportation GHG emissions.\210\ The LCFS recently 
expanded to provide support for CCS; when combined with Federal 45Q tax 
credits, this can offer over $150/tonne of total incentive for project 
developers.211-212  Government incentives in the U.S. have 
not always been sufficient to make biotechnology products competitive 
with inexpensive fossil fuels, though: one recent analysis calculated 
that new cellulosic biorefineries would struggle to be financially 
viable despite the presence of supporting Federal policies because of 
the low fossil fuel prices that have prevailed since 2014.\213\ 
Producers of biotechnology non-fuel products, for which government 
support mechanisms are fewer, have also faced high hurdles to private 
financing.
---------------------------------------------------------------------------
    \210\ http://ww3.arb.ca.gov/fuels/lcfs/dashboard/dashboard.htm.
    \211\ http://www.energy.gov/sites/prod/files/2019/10/f67/
Internal%20Revenue%20Code%20
Tax%20Fact%20Sheet.pdf.
    \212\ http://ww3.arb.ca.gov/regact/2018/lcfs18/15dayattb2.pdf.
    \213\ Brown, T.R. (2019), Why the cellulosic biofuels mandate fell 
short: a markets and policy perspective. Biofuels, Bioprod. Bioref., 
13: 889-898. https://doi.org/10.1002/bbb.1987. http://
onlinelibrary.wiley.com/doi/full/10.1002/bbb.1987.
---------------------------------------------------------------------------
    Some producers of U.S. biofuels and bioproducts have been able to 
obtain public financing in the form of loans, loan guarantees, and 
grants from the Federal and state governments. The U.S. Department of 
Agriculture offers loan guarantees of up to $250 million for the 
building of capacity for the production of specific biotechnology 
products including advanced biofuels and biobased chemicals.\214\ The 
loan guarantee program was started in 2008 to enable financing of 
advanced biofuels and was expanded in 2014 to cover other bioproducts 
as well. The loan guarantee reduces the barriers to obtaining private 
financing by having the U.S. Government backstop qualifying loans to 
producers. While this backstop does not guarantee private financing for 
the facility, it substantially reduces the producer's financing hurdle 
rate by reducing the risk of default on any loan covered by the 
guarantee. Several states operate their own direct loan and loan 
guarantee programs for biorefineries, albeit on a smaller scale.\215\
---------------------------------------------------------------------------
    \214\ https://www.rd.usda.gov/programs-services/biorefinery-
renewable-chemical-and-biobased-product-manufacturing-assistance.
    \215\ https://www.usda.gov/sites/default/files/documents/usda-
bioindicators-jan-2020.pdf.
---------------------------------------------------------------------------
    Grants are another public finance mechanism that has supported the 
commercialization of biotechnology. Unlike direct loans and loan 
guarantees, grants are one-time awards of financing that are not 
repaid. The awards generally involve smaller amounts of financing than 
are provided via direct loans and loan guarantees, and they have often 
been used to support R&D or make improvements to existing facilities 
rather than to build a new commercial-scale facility. One example is 
the Value-Added Producer Grants program administered by the U.S. 
Department of Agriculture, which ``helps agricultural producers enter 
into value-added activities related to the processing and marketing of 
new products.'' \216\ Other grants indirectly support the establishment 
and commercialization of biofuels by being directed toward the 
upgrading of infrastructure that is downstream of production facilities 
and improving consumer access.
---------------------------------------------------------------------------
    \216\ https://www.rd.usda.gov/programs-services/value-added-
producer-grants.
---------------------------------------------------------------------------
    The private and public capital that has been invested into biobased 
fuels and products has spurred the commercialization of low-carbon 
technologies since the turn of the century. Investments have fallen far 
short of what is necessary to avert catastrophic climate change, 
however, reflecting the major hurdles to financing that still exist 
within the biotechnology industry. The IPCC estimates that $2.4 
trillion in annual investment is needed globally in the energy sector 
alone until 2035 to limit temperatures to no more than 1.5 C above 
pre-industrial levels.\217\ This number is larger still if the de-
carbonization of non-energy sectors such as agriculture and materials 
are accounted for. Actual global low-carbon energy investment in 2019 
was only $0.6 trillion, or 25% of what is needed.\218\ Additional 
policy mechanisms will be required to rapidly reduce existing hurdles 
to the financing of biobased projects. Governments will also need to 
reduce the regulatory barriers that these projects face, as unfavorable 
regulatory environments increase the financial risks that they bear and 
their hurdles to financing.
---------------------------------------------------------------------------
    \217\ https://report.ipcc.ch/sr15/pdf/sr15_spm_final.pdf.
    \218\ https://www.iea.org/reports/world-energy-investment-2020/key-
findings.
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4.2  Regulatory Barriers
    The biotechnology industry plays an important role in developing 
and commercializing novel products that are not always directly 
compatible with the existing infrastructure in the sectors into which 
they are introduced. Moreover, many of these products are manufactured 
using technologies such as gene editing that are closely regulated by 
national governments. These factors have resulted in the formation of 
multiple regulatory barriers that hinder the adoption of low-carbon 
biofuels and bioproducts and constrain the biotechnology industry's 
ability to reduce emissions of GHGs and other pollutants.

    Biotechnology Regulation

    GMOs have had a long and contentious regulatory history in the U.S. 
Since 1986, biotech products in the U.S. have been regulated under the 
Coordinated Framework for the Regulation of Biotechnology (Coordinated 
Framework).\219\ The framework has been updated several times since its 
introduction, including a comprehensive revision in May 2020, known as 
the Sustainable, Ecological, Consistent, Uniform, Responsible, 
Efficient (SECURE) rule, or Part 340 rule, which significantly 
streamlined and modernized the regulatory framework.\220\ While U.S. 
regulators and consumers are relatively accepting of GMO products, 
societal opposition to the use of GMOs in the agriculture sector in 
particular has, on occasion, prompted a cautious response to new GMO 
products by regulators that has slowed the introduction of biotech 
products to the market.
---------------------------------------------------------------------------
    \219\ https://usbiotechnologyregulation.mrp.usda.gov/
biotechnologygov/about/about.
    \220\ https://www.aphis.usda.gov/aphis/ourfocus/biotechnology/
biotech-rule-revision/secure-rule/secure-about/
340_2017_perdue_biotechreg
---------------------------------------------------------------------------
    Regulations in other regions, such as Europe, are more 
hostile,\221\ hampering the ability of the U.S. biotechnology market's 
products to make an outsized contribution to global GHG emission 
reductions. For example, as discussed in Section 1.4, GMO food crops 
have enhanced resiliency under the types of extreme weather conditions 
that are becoming more common as the climate changes, thereby reducing 
the amount of land required by agriculture and reducing the incentive 
to increase GHG emissions via land-use change.
---------------------------------------------------------------------------
    \221\ Shahla Wunderlich, Kelsey A. Gatto, Consumer Perception of 
Genetically Modified Organisms and Sources of Information, Advances in 
Nutrition, Volume 6, Issue 6, November 2015, Pages 842-851, https://
doi.org/10.3945/an.115.008870. http://academic.oup.com/advances/
article/6/6/842/4555145.
---------------------------------------------------------------------------
    Studies have found that Americans, including those residing in 
states with large agricultural sectors, have concerns about the 
production of bioenergy from GMO feedstocks as well.\222\ Some second-
generation bioenergy feedstocks have attracted opposition due to their 
use of fast-growing and potentially invasive forms of biomass. These 
feedstocks, especially those that have been genetically engineered to 
expand rapidly, have prompted concerns that they could expand into and 
damage the surrounding ecosystem.\223\ Notably, though, biotechnology 
has also provided a means of potentially overcoming this barrier. In 
one recent research breakthrough, microalgae grown as a biofuels 
feedstock has been genetically engineered to be unable to survive 
outside of the production facility, thereby preventing its uncontrolled 
growth.\224\
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    \222\ Ashlie B. Delshad, Leigh Raymond, Vanessa Sawicki, Duane T. 
Wegener, Public attitudes toward political and technological options 
for biofuels, Energy Policy, 38(7), 2010, 3414-3425, ISSN 0301-4215, 
https://doi.org/10.1016/j.enpol.2010.02.015. http://
www.sciencedirect.com/science/article/pii/S0301421510000960.
    \223\ http://www.wsj.com/articles/BL-EB-6592.
    \224\ http://phys.org/news/2018-11-biocontainment-strategy-
gmos.html.
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    Genetically engineering microorganisms used in the production of 
fuels, chemicals and other products are also subject to Federal 
regulation, but their place in the Coordinated Framework has long been 
unclear, and GE microbes were not clearly addressed in the SECURE rule. 
This regulatory uncertainty is likely to present a significant barrier 
to the development and commercialization of biotech climate innovation.

    Regulation of Fuels and Products

    A second major regulatory barrier is posed by conflicting state 
policies on certain biotechnology products. While the U.S. has a 
comparatively more integrated common market than the European Union, 
individual state governments sometimes have policies in place that 
discourage the introduction of biotechnology products into entire 
regions, let alone individual markets. This situation can prevent the 
adoption of products that have interstate supply chains. One example 
that is already occurring involves the transport of renewable diesel 
through existing refined fuels pipelines. Renewable diesel is a drop-in 
biofuel that can utilize cost-effective distribution infrastructure 
such as the refined fuels pipelines that connect refineries to multiple 
states' markets (e.g., the Colonial Pipeline in the Southeastern U.S.). 
Many states require that the biofuels content of fuels retailed within 
their borders be stated on a fuel pump label, but this is not easily 
known if the renewable diesel is being pipelined in a blended form with 
diesel fuel. The result is that having even a single state on an 
interstate pipeline with strict pump labeling requirements can 
discourage the movement of a drop-in biofuel such as renewable diesel 
through it. The biofuel must instead be transported by rail, ship, or 
truck, all of which are more expensive and polluting options than 
pipeline.\225\
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    \225\ http://www.fuelsinstitute.org/Research/Reports/Biomass-Based-
Diesel-A-Market-and-Performance-Anal.
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    Biotechnology products that are not compatible with unmodified 
existing infrastructure often face a heightened regulatory barrier. 
U.S. ethanol consumption has historically been constrained by the so-
called ``ethanol blend wall'', which refers to the maximum blend that 
can be used in existing infrastructure. Ethanol is a hydrophilic fuel 
that is miscible with water, and this trait prevents its movement 
through pipelines at any blend rate and use in unmodified engines above 
specific blend rates due to the potential for water contamination. 
Ethanol blends for use in unmodified engines were limited to 10% by 
volume (E10) until 2011, when the U.S. Government began to allow blends 
of up to 15% by volume (E15) during certain seasons of the year.\226\ 
The unrestricted sale of E15 was not permitted until 2019.\227\ The 
blend limits apply to ethanol whether produced from corn or 
lignocellulosic biomass, and the blend wall sharply constrained fuel 
ethanol demand from all feedstocks beginning in 2013 as a result.\228\
---------------------------------------------------------------------------
    \226\ http://afdc.energy.gov/fuels/ethanol_e15.html.
    \227\ http://www.reuters.com/article/us-usa-biofuels-ethanol/trump-
lifts-curbs-on-e15-gasoline-to-help-farmers-angering-big-oil-
idUSKCN1T11BN.
    \228\ http://www.usda.gov/sites/default/files/documents/
MARKET_EFFECTS_AND_WEL
FARE_IMPACTS_OF_THE_RENEWABLE_FUEL_STANDARD.pdf.
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    The U.S. Government has also used regulatory changes to restrain 
demand for all biofuels since 2017. National biofuels demand over the 
last decade has been driven by the revised Renewable Fuel Standard 
(RFS2), which mandates the annual consumption of specific volumes of 
different types of biofuels. Petroleum refiners are tasked with 
ensuring that sufficient quantities of biofuels are blended with 
refined fuels to comply with the mandate, and a refiner's individual 
blending quota is determined by its market share. Between 2017 and 2019 
the Federal Government greatly increased the number of hardship waivers 
that it awarded to refiners, reducing their blending quotas and overall 
demand for biofuels under the mandate.\229\ One analysis calculates 
that the increased number of hardship waivers awarded caused demand for 
advanced biofuels under the mandate to be up to 1 billion gallons lower 
per year, and that the amount of the annual reduction has equaled as 
much as 50% of U.S. production.\230\
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    \229\ http://www.epa.gov/fuels-registration-reporting-and-
compliance-help/rfs-small-refinery-exemptions.
    \230\ Irwin, S. ``Small Refinery Exemptions and Biomass-Based 
Diesel Demand Destruction.'' farmdoc daily (9): 45, Department of 
Agricultural and Consumer Economics, University of Illinois at Urbana-
Champaign, March 14, 2019. http://farmdocdaily.illinois.edu/2019/03/
small-refinery-exemptions-and-biomass-based-diesel-demand-
destruction.html.
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    Regulatory barriers can be particularly high for truly novel 
biotechnology products due to a lack of suitable regulatory frameworks. 
Cultured meat, for example, has been identified as one product for 
which existing U.S. regulations are inadequate due to the existence of 
myriad production techniques and the potential for genetic modification 
as part of the production process.\231\ Regulatory uncertainty is as 
much of a barrier as adverse regulation is, inasmuch as both discourage 
financiers from providing the capital necessary for commercialization. 
The lack of an adequate regulatory framework also raises the 
possibility that adverse regulation could result from a regulatory 
rulemaking process.
---------------------------------------------------------------------------
    \231\ Neil Stephens, Lucy Di Silvio, Illtud Dunsford, Marianne 
Ellis, Abigail Glencross, Alexandra Sexton, Bringing cultured meat to 
market: Technical, socio-political, and regulatory challenges in 
cellular agriculture, Trends in Food Science & Technology, 78, 2018, 
155-166, ISSN 0924-2244, http://doi.org/10.1016/j.tifs.2018.04.010. 
https://www.sciencedirect.com/science/article/pii/
S0924224417303400#sec5.
---------------------------------------------------------------------------
    The future growth of the U.S. biotechnology industry will be 
heavily affected by existing and potential regulatory barriers. One 
recent analysis estimated that 50% of the total economic impact of 
biotechnology over the next decade ``could hinge on consumer, societal, 
and regulatory acceptance'' of the industry's products.\232\ The 
analysis further calculated that this amount increases to 70% over the 
next 2 decades. This has important implications for the ability of 
biotechnology to provide climate solutions given that early emissions 
reductions are more valuable than later reductions. The continued 
presence of regulatory hurdles is an especially pressing issue given 
the major shortfall of de-carbonization investments (see Section 4.1).
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    \232\ http://www.mckinsey.com/industries/pharmaceuticals-and-
medical-products/our-insights/the-bio-revolution-innovations-
transforming-economies-societies-and-our-lives#.
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4.3  Policy Proposals
    The growing recognition by many U.S. policymakers that existing 
efforts to de-carbonize the country's economy are falling short of its 
commitments under the 2015 Paris Climate Agreement has led to the 
unveiling of a variety of climate policy proposals at the Federal, 
state, and local levels of government. These proposals fall into two 
broad categories: the first category focuses on the de-carbonization of 
individual sectors while the second category instead takes an economy-
wide approach. The sector-based proposals are similar to policies 
already in place in states such as California, whereas the economy-wide 
proposals are more novel and less well established. An aggressive 
combination of sector-based and economy-wide policies is needed to 
rapidly realize the full potential of biotechnology to combat climate 
change.
4.3.1  De-carbonizing Transportation
    The first 2 decades of the 21st century saw the introduction of 
several policies to reduce the carbon intensity and GHG emissions of 
the transportation sector. Some, such as Federal RFS2 and California 
LCFS, were successfully implemented and have resulted in the partial 
de-carbonization of the on-road transportation sectors in their 
respective jurisdictions through the increased use of biofuels. But 
regulatory implementation of these policies has, particularly in the 
case of RFS2, limited their impact. Barriers to the full implementation 
of existing Federal renewable fuels policies should be removed and 
aggressive follow-on transportation sector climate policies adopted to 
achieve the maximum near-term and longer-term GHG reductions.

    Renewable Fuel Standard

    The continued presence of the RFS2 as the centerpiece of U.S. 
transportation sector de-carbonization efforts has had an important 
impact on the development of intermediate-term GHG emission reduction 
strategies, with cumulative reductions of 980 MMT CO2 since 
RFS2 was enacted.\233\ But a series of EPA regulatory actions has 
substantially limited the program's climate gains. The agency has 
repeatedly reduced RFS volume obligations and has issued a growing 
number of small refinery waivers, further reducing the market for 
biofuels in the U.S.\234\
---------------------------------------------------------------------------
    \233\ http://ethanolrfa.org/wp-content/uploads/2021/02/LCA_-_RFS2-
GHG-Update_2020.pdf
    \234\ http://www.bio.org/press-release/ending-unjustified-rfs-
waivers-will-put-america-more-sustainable-path.
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    EPA has taken some steps to expand U.S. biofuels markets. The 
ongoing effort to expand the volume of ethanol permitted by the ethanol 
blend wall is one example of this trend (see Section 3.2). Following on 
earlier efforts to ease restrictions on E15 consumption, in 2020 the 
Trump Administration announced that the Federal Government would not 
block the use of E15 in fuel pumps that were compatible with E10 
(although state governments are still able to do so).\235\ The complete 
replacement of E10 consumption by E15 would increase the amount of fuel 
ethanol consumed in the U.S. by 50%. While the magnitude of the 
associated transportation sector emissions reduction would depend on 
the feedstocks being used, any increase to E15 consumption would 
contribute to the sector's de-carbonization. Additional actions to 
expand U.S. biofuel markets and establish greater RFS program certainty 
are needed to maximize near-term climate gains.
---------------------------------------------------------------------------
    \235\ http://www.dtnpf.com/agriculture/web/ag/blogs/ag-policy-blog/
blog-post/2020/09/12/trump-announces-e15-fuel-can-go-e10.

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    Low Carbon Fuel Standard

    The success of California's LCFS and a lack of Federal action on 
climate policy after 2016 has prompted similar policies to be proposed 
in other states. Oregon adopted a LCFS under its Oregon Clean Fuels 
Program that mandates a 10% reduction to the carbon intensity of its 
transportation sector from 2015 levels by 2025.\236\ Efforts to 
implement a statewide LCFS in neighboring Washington are ongoing 
despite the failure of an earlier attempt.\237\ Similar regional 
initiatives have been proposed in the Midwest \238\ and East 
Coast,\239\ although legislative action on these proposals has yet to 
occur.
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    \236\ http://www.oregon.gov/deq/ghgp/cfp/Pages/default.aspx.
    \237\ http://www.seattletimes.com/seattle-news/gov-jay-inslees-low-
carbon-fuel-standard-faces-tough-road-ahead-in-washington-state/.
    \238\ http://www.governorsbiofuelscoalition.org/groups-exploring-
potential-midwest-lcfs-collaborative/.
    \239\ http://www.transportationandclimate.org/content/tci-
declaration-intent.
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    Efforts to implement a national LCFS date to 2007, when then-U.S. 
senator Barack Obama introduced a bill to require future reductions to 
the carbon intensity of the U.S. transportation sector.\240\ While that 
proposal was ultimately discarded in favor of legislation that created 
the RFS2, the U.S. House Select Committee on the Climate Crisis 
recently recommended that the RFS2 be transformed into a national 
LCFS.\241\ That recommendation also included a provision to expand the 
remit of the RFS2 to include shipping and aviation fuels, in addition 
to on-road transportation fuels, as part of the transformation. The 
success of California's LCFS and steps by other states to adopt similar 
programs suggests the time has come for a Federal low-carbon fuel 
standard.
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    \240\ http://www.congress.gov/bill/110th-congress/senate-bill/1324.
    \241\ http://climatecrisis.house.gov/sites/climatecrisis.house.gov/
files/Climate%20Crisis%20
Action%20Plan.pdf.

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    Other Fuel Policies

    In addition to market-driving programs such as the RFS and LCFS, 
ongoing Federal and state investments in the improvement of existing 
biofuels and the development of next-generation biofuels are 
recommended to achieve the greatest near-term climate benefit. Robust 
Federal investment in biofuel research and development at the U.S. 
Department of Energy and USDA and long-term tax credits or other 
incentives for private-sector biofuel research and development and 
facility construction are recommended to help drive additional private-
sector investment in low-carbon fuels.
    The development of a long-term sustainable aviation fuel specific 
blender's tax credit will attract significant investment to the sector, 
address existing structural and policy disincentives, and ramp up 
domestic SAF production to meaningful levels.. Further continuation of 
the Second Generation Biofuel Producer Tax Credit is incredibly 
important to companies that are making significant investments to 
create new agricultural supply chains, build infrastructure for liquid 
biofuels, and develop innovative new technologies.
4.3.2  De-carbonizing Industry
    Policy has historically favored the production of biofuels over 
other forms of biobased products. Renewable chemicals and other non-
fuel biobased products that achieve GHG emission reductions, such as 
those described in Section 2, will need to be supported if sectors 
outside of transportation are also to be successfully Dearborn. Several 
potential mechanisms exist for achieving this result, some of which 
build upon existing policy frameworks and others that employ more novel 
approaches.

    Renewable Chemical and Biobased Product Programs

    The U.S. Government operates two important farm bill energy title 
programs, the BioPreferred Program and the Biorefinery, Renewable 
Chemical, and Biobased Product Manufacturing Assistance Program, that 
support the commercial development of renewable chemical and biobased 
product manufacturers. These producers continue to face substantial 
hurdles to commercialization due to the lack of an even playing field 
with producers of competing products from fossil fuels.
    The BioPreferred Program, originally authorized under the 2002 Farm 
Bill and reauthorized and expanded under the 2018 Farm Bill, includes a 
Federal biobased product procurement preference program and a voluntary 
USDA labeling program for biobased products.\242\ These programs have 
significantly increased both consumer awareness and market demand for 
biobased products. The 2018 Farm Bill provided increased funding for 
BioPreferred and, among other provisions, directed USDA and the 
Department of Commerce to develop North American Industry 
Classification System (NAICS) codes for renewable chemicals and 
biobased products.\243\ The 2020 National Academies of Science report 
on ``Safeguarding the Bioeconomy'' cites the lack of an industry 
classification system for biotech products as a significant roadblock 
to investment and broader adoption, and recommends a series of actions 
to fill this gap.\244\
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    \242\ http://www.biopreferred.gov/BioPreferred/faces/pages/
AboutBio-Preferred.xhtml.
    \243\ http://www.soybiobased.org/update-of-usda-biopreferred-
program/.
    \244\ http://www.nap.edu/resource/25525/interactive/.
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    The Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Program (BAP) provides loan guarantees for the 
development, construction, and retrofitting of commercial-scale 
biorefineries.\245\ The 2018 farm significantly expanded and 
streamlined the BAP loan program.
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    \245\ http://www.rd.usda.gov/sites/default/files/fact-sheet/
508_RD_FS_RBS_Biorefinery.pdf.
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    The Commerce Department and USDA should move swiftly to implement 
biobased product classification systems, and Congress should fully fund 
BioPreferred and the BAP loan program.

    Tax Policy

    Tax policy has been a vital early driver of biofuel and other 
renewable energy development. Several recent policy proposals seek to 
provide a similar push to non-fuel biobased products. A proposed change 
to Federal tax law would enable producers of biobased products to 
utilize the Master Limited Partnership pass-through tax structure that 
is widely employed by fossil fuel producers to improve access to 
capital and reduce tax burdens.\246\ Such an expansion has been 
employed in the past in the U.S. to support the development of 
renewable electricity and biofuels logistics infrastructure, making its 
absence in the biobased products sector particularly notable. Federal 
legislation to expand existing business-related and investment tax 
credits to include renewable chemicals production has also attracted 
bipartisan support in Congress,\247\ although it has yet to become law.
---------------------------------------------------------------------------
    \246\ http://www.bio.org/sites/default/files/2020-01/Final-
BIO%20Comments-House%20Com
mittee%20on%20Climate%20Crisis%20RFI-12-20-19.pdf.
    \247\ http://pascrell.house.gov/news/
documentsingle.aspx?DocumentID=4548.
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    U.S. tax policy should be updated to extend renewable energy tax 
incentives to renewable chemicals and biobased products.
4.3.3  De-carbonizing Agriculture
    One of the most important mechanisms available to leverage 
biotechnology for climate mitigation is agriculture policy. As 
discussed in section 2, the carbon intensity of industrial products is 
highly dependent on the carbon intensity of feedstocks. Substitution of 
biobased feedstocks for fossil feedstocks is an essential step, but the 
greatest gains are achieved when climate objectives are integrated into 
the production of the feedstocks themselves, internalizing the 
environmental benefits that are provided by producers of biobased 
products, especially those that operate within the agricultural sector.
    One such proposal would expand farm bill programs such as the 
Conservation Stewardship Program, which encourages producers to 
undertake conservation activities on working lands,\248\ to include 
practices that decrease the carbon intensity of agricultural production 
while increasing crop yields. Likewise, the existing section 45Q tax 
credit for certain CC&S technologies could be expanded to encompass the 
building of soil carbon in the U.S. agriculture sector.
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    \248\ http://www.federalregister.gov/documents/2019/11/12/2019-
24367/conservation-stewardship-program-csp-interim-rule.
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    The agriculture sector faces high barriers of entry to voluntary 
carbon credit programs that prevent their full carbon sequestration 
potential from being recognized. Federal legislation such as the 
Growing Climate Solutions Act of 2021 has been introduced as a means of 
enabling the private-sector to overcome these hurdles,\249\ but Federal 
agencies could also provide additional support by expanding existing 
agricultural conservation programs and creating agricultural 
sequestration certification programs.
---------------------------------------------------------------------------
    \249\ https://www.congress.gov/bill/117th-congress/senate-bill/
1251.
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    Congress and the White House should move swiftly to implement 
programs to reward farmers for reducing the carbon footprint of 
feedstock production and for capturing and sequestering carbon.
4.3.4  Negative-Carbon Technologies
    To achieve agreed upon climate mitigation objectives, a major focus 
of climate policy must be investment in negative-carbon technologies. 
This will require policies that drive carbon capture, use and storage 
throughout the economy, including in agriculture and manufacturing. 
This should include sector-specific programs in each of these areas. 
Climate policy should drive investment in agricultural biologicals, 
plant biotechnology and other biotechnologies to increase soil carbon 
sequestration and should reward microbial carbon capture and other 
biotechnologies for carbon removal and recycling. Provisions for 
biological carbon capture and use in the section 45Q tax credit provide 
a template for inclusion of these technologies in future climate 
policy.
4.3.5  Economy-Wide Climate Programs
    The U.S. transportation and power sectors have been the primary 
focus of policymakers due to their large share of total U.S. GHG 
emissions (28% and 27%, respectively, in 2018).\250\ Several states 
have adopted more ambitious long-term policies that require the full 
de-carbonization of their economies by 2050, however, and the remaining 
sectors (industry, commercial/residential, and agriculture) will need 
to achieve future carbon intensity reductions greater than those that 
have been achieved by the power and transportation sectors to date if 
these policies are to be successful.
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    \250\ http://www.epa.gov/ghgemissions/sources-greenhouse-gas-
emissions.
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    The first such state policy to be implemented was California's 
Global Warming Solutions Act of 2006, which mandated an economy-wide 
emission reduction of 80% by 2050.\251\ In 2018 California's governor 
issued an Executive Order that changed this target to 100% on a net 
basis by 2045.\252\ Equally ambitious is the New York Climate 
Leadership and Community Protection Act (CLCPA). Passed in 2019, the 
CLCPA requires that the state's economy-wide emissions by reduced by 
100% by 2050,\253\ although up to 15% of the reduction can take the 
form of offsets such as those described in Section 2.2. Colorado, 
Connecticut, Maine, Massachusetts, Minnesota, Nevada, Rhode Island, and 
Washington also all have statutory targets requiring statewide GHG 
emission reductions of at least 80% by 2050.\254\
---------------------------------------------------------------------------
    \251\ http://ww2.arb.ca.gov/resources/fact-sheets/ab-32-global-
warming-solutions-act-2006.
    \252\ http://www.ca.gov/archive/gov39/wp-content/uploads/2018/09/
9.10.18-Executive-Order.pdf.
    \253\ http://climate.ny.gov/-/media/CLCPA/Files/CLCPA-Fact-
Sheet.pdf.
    \254\ http://www.c2es.org/document/greenhouse-gas-emissions-
targets/.
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    A notable aspect of the deep economy-wide de-carbonization targets 
is that they will likely require the widespread deployment of carbon-
negative technologies and non-fuel bioproducts in order to be 
successful. Policy language referring to ``net-zero'' emissions targets 
or, in the case of New York, explicit carbon offset thresholds reflects 
the recognition of this probable outcome by policymakers. Existing 
state de-carbonization requirements also identify varying degrees of 
de-carbonization difficulty for different economic sectors. New York's 
statutory target, for example, imposes an absolute zero-emission target 
on its power sector by 2040 through language that explicitly excludes 
the use of carbon offsets by that sector. The reason for this 
distinction is the expectation that zero-emission technologies such as 
solar PV and wind will enable an absolute zero requirement to be 
achieved. Those sectors such as transportation and manufacturing that 
utilize more energy-intensive systems, by contrast, will need to rely 
upon biomass and biotechnology to achieve net-zero emissions, sometimes 
via carbon-negative technologies, while supplying close substitutes for 
the fossil fuels and products that modern economies rely upon.
    Existing government efforts in the U.S. to incentivize de-
carbonization have largely been limited to the transportation sector, 
whereas the implementation of performance-based de-carbonization 
standards in manufacturing would enable the broad scope of 
biotechnology's benefits to be recognized by the market. Such standards 
include, but are not limited to, financing R&D, promoting alternatives 
to non-fuel fossil products, supporting and expanding sustainable 
procurement policies, and incentivizing the development of green 
manufacturing and sustainable agriculture practices.
    Recent years have seen only limited action at the Federal level to 
encourage the utilization of biotechnology's de-carbonization 
potential. Several states have adopted more ambitious long-term 
economy-wide de-carbonization targets, however. While the policy 
mechanisms to achieve these targets have yet to be established, their 
success will likely depend on the extent to which the policies properly 
value the de-carbonization, including net carbon sequestration, 
abilities of both fuel *
---------------------------------------------------------------------------
    * Editor's note: the paragraph is not completed in the submitted 
report. It has been reproduced herein as submitted.
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Summary and Conclusion
          ``Climate change will affect every person, nation, industry, 
        and culture on Earth.''

    Avoiding its worst effects will require an equally universal 
response. The biotechnology industry is uniquely positioned to play a 
leading role in the effort to reduce emissions, adapt to new climate 
conditions, and address the needs of the 21st century and beyond. In 
this report, three key themes have emerged. These themes should guide 
policymakers--and the biotech industry itself--if we are to achieve the 
full potential of biotechnology to address climate change.
    Biotechnology is an essential climate mitigation tool. Biotech has 
already delivered vital climate solutions and holds the potential to 
provide transformative climate technologies across a broad spectrum of 
industrial sectors.
    Biotech can achieve at least 3 billion tons of CO2 
equivalent mitigation annually by 2030 using existing technologies. The 
biotechnologies with the greatest potential impact include:

   Biotech solutions have the potential to reduce agriculture 
        sector GHG emissions by nearly 1 billion metric tons (1 
        gigaton) annually--or the equivalent of GHG emissions from more 
        than 100 million U.S. homes. This includes reducing nitrous 
        oxide emissions from agriculture by over 150 million metric 
        tons of carbon equivalent and enhancing soil carbon 
        sequestration by up to 600 million metric tons per year through 
        a combination of agriculture biotechnology and agricultural 
        biologicals.

   The transition to next-generation biofuels enabled by 
        biotechnology will double the per-gallon emissions reductions 
        of biofuels versus petroleum. Doubling biofuel use through 
        broad adoption of next-generation biofuels in aviation and 
        other transportation sectors would increase the contribution of 
        biofuels to U.S. transportation sector GHG emissions reductions 
        from 980 million tons over the past thirteen years to over 1.8 
        billion tons for the decade 2020-2030, a reduction equivalent 
        to taking more than 45 coal-fired power plants offline.

   Broad adoption of algal and microbial feed ingredients that 
        reduce enteric methane emissions from ruminant animals can 
        avoid the equivalent of up to 140 million metric tons of carbon 
        annually.

   Broad adoption of anaerobic digestion for animal waste would 
        reduce U.S. GHG emissions by over 150 million metric tons 
        annually using current technology.

   Bioenergy with Carbon Capture and Sequestration (BECCS) 
        could cost-effectively remove over 700 million metric tons of 
        carbon per year, or more than half the emissions from all U.S. 
        coal power plants.

   Suitable land and other infrastructure exists to deploy 
        algae-based carbon capture systems at more than 500 power 
        plants and ethanol facilities in the U.S. These systems would 
        have a potential to capture more than 200 million tons of 
        CO2 annually.

    Emerging biotechnologies could have transformative GHG benefits in 
a range of industrial sectors. Among the most promising applications 
are:

   Biobased plastics and polymers, such as PLA, PHA, and BDO 
        have achieved lifecycle GHG reductions of up to 80% versus 
        their petroleum-based counterparts. A rapidly growing list of 
        new biobased chemical building blocks is now in development.

   Plant-based and cultured meats are providing new consumer 
        choices and up to 89% lower lifecycle emissions for a global 
        food sector responsible for more than \1/3\ of total GHG 
        emissions.

   Biology-based parallel computing and DNA data storage have 
        the potential to cut the energy and carbon footprints of 
        computing and data storage--sectors expected to account for 14% 
        or more of global GHG emissions by 2040--by 99% or more versus 
        current technology.

    Biotechnology offers vital contributions to near-term GHG 
reductions and revolutionary tools to combat climate change in the 
longer term. To successfully address the challenge of climate change, 
humanity will need to predominantly de-carbonize the global economy by 
mid-century and begin significantly drawing down concentrations of 
atmospheric carbon shortly thereafter. The struggle against climate 
change must be viewed as a multi-decade process, which needs to begin 
immediately. A ton of carbon emissions avoided now matters more than a 
ton avoided next year, but every step needs to be evaluated from the 
perspective of maintaining a trajectory towards success.
    An aggressive combination of sector-based and economy-wide policies 
is needed to rapidly realize the full potential of biotechnology to 
combat climate change. The future growth of the U.S. biotechnology 
industry will be heavily affected by both existing and potential 
regulatory barriers, and by the degree to which governments invest in 
the development and deployment of biotech solutions. Biotechnology is a 
vital component of the national and global infrastructure needed to 
combat catastrophic climate change. The economy-wide scope of this 
challenge will require the adoption of policies that reflect the 
ability of biotechnology products to achieve de-carbonization across 
all major sectors of the U.S. economy. Biotechnology companies will 
need to speak up not only to ensure that new policy provides 
opportunities for success, but to make it clear that prosperity is not 
threatened by sustainability. There is ample evidence that reducing 
emissions is, in fact, essential in supporting a thriving economy.
    The biotechnology industry has a tremendous opportunity to build 
upon decades of success, and provide critical tools and expertise for 
the decades to come. Like every other industry, change will be profound 
and lasting, but if any industry can demonstrate that change can be an 
opportunity for growth, it is this one.
                                 ______
                                 
   Submitted Letter by Rina Singh, Ph.D., Executive Vice President, 
            Policy, Alternative Fuels & Chemicals Coalition
April 15, 2022

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Scott, Ranking Member Thompson, and Members of the 
Committee:

    Alternative Fuels and Chemicals Coalition (AFCC) appreciates the 
opportunity to submit a statement for the record to the United States 
House of Representatives Committee on Agriculture hearing, ``A 2022 
Review of the Farm Bill: Energy--Renewable Energy Opportunities in 
Rural America.''
    AFCC and its member companies applaud the House Committee for 
closely looking at the renewable energy opportunities in rural America 
and for having two of AFCC's member companies, Dr. Pat Gruber, CEO, 
Gevo, and Mr. Jay McKenna, CEO, Nacero, participate in the second panel 
of the hearing as witnesses.
Introduction
    AFCC is a collaborative government affairs effort organized by the 
Kilpatrick Townsend & Stockton law firm and American Diversified 
Energy. AFCC was created to address policy and advocacy gaps at the 
Federal and state levels in renewable chemicals, bioplastics/
biomaterials, cell-cultured food ingredients, single cell protein for 
food and feed, enzymes, alternative fuels, biobased products and 
sustainable aviation fuels (SAF) sectors. AFCC member companies work on 
feedstocks, renewable chemicals, food, feed, fiber, bioplastics and 
biomaterials, and biofuels impacting the biobased economy.
    The farm bill focusing on innovation aimed at boosting renewable 
energy in rural areas, including incentives for manure digesters for 
renewable natural gas producers, renewable fuels for ground 
transportation and sustainable aviation fuels, and renewable chemicals 
and biobased products. Making these programs cost effective for farmers 
who are responsible for generating the raw materials is key to all of 
our downstream successes in industrial biotechnology. Especially now, 
with high oil prices that suddenly make alternative energy sources more 
attractive and critical, and renewable energy production is also a 
driver of economic equality for farmers of racial backgrounds, as well 
as a cost-saver and a tool to mitigate climate change.
Importance of the Farm Bill Programs in Energy Title IX
    Energy Title IX programs has been integral for fostering innovation 
and facilitation research and development of agricultural and forestry 
feedstocks for biofuels, renewable chemicals, and biobased products. 
The establishment of one new program in the 2018 Farm Bill--Carbon 
Utilization and Biogas Education Program brought the importance of 
climate change and a closer look at sources of feedstocks deployed for 
bioenergy and renewable chemicals and biobased products. Federal 
programs supporting the biobased economy provides de-carbonization and 
new sustainable products produced at scale in fewer steps than 
conventional fossil fuel processes, lowers greenhouse gasses, increases 
jobs, and provides a stable economy.
    With the current national economy in a heightened state of 
uncertainty, the next farm bill and Energy Title IX programs become 
even more important to fuel the nation with a stable biobased economy. 
Companies look to deploy capital in the aftermath of COVID-19 and 
during increased supply chain project costs resulting from spiraling 
inflation and the Russia-Ukraine war, economic and regulatory certainty 
will be provided from the programs in the Energy Title IX programs in 
the re-authorization of the fifth farm bill. The programs are 
paramount, with investors stressing the importance of disciplined 
allocation. The Federal programs will take a positive step in providing 
the certainty, as government support is pivotal for renewable projects 
and the deployment of capital for lower carbon technologies for 
biofuels, renewable chemicals and biobased products. In turn, the 
nation will have sustainable biobased products.
The Fifth Farm Bill--Energy Title IX Programs Promoting Innovation
Section 9002 Biobased Markets Program
    The 2018 Farm Bill directs the Secretary of Agriculture and the 
Secretary of Commerce to jointly develop NAICS codes for renewable 
chemicals and biobased products manufacturers. The next farm bill needs 
to have the NAICS codes directive with a timeline for its 
implementation by OMB.
    NAICS codes would greatly enhance the ability to track and report 
on the renewable chemicals and biobased products industry, determine 
the funding requirements from Federal and state governments, track 
innovative activities in the sector, mitigate climate change, and 
capture the jobs created. Currently, production of renewable chemicals 
and biobased products have no tracking system and the industrial 
biotechnology sector has no knowledge of its growth potential.
    There are changes requested in the implementation of the 
BioPreferred' Program, while encouraging the purchasing 
program of sustainable products, it is not operating the way Congress 
intended. Without sound sales numbers and procurement officers 
identified for the program the supply chain for renewable chemicals and 
biobased products will continue to be broken. If the program were 
operating properly, it would be very successful. AFCC requests 
quarterly updates from USDA to Congress for the procurement of 
renewable chemicals and biobased products in the fifth farm bill.
    The BioPreferred' Program needs the label or 
certification to be modernized, showing that the renewable chemicals 
and biobased products are indeed sustainably sourced. Currently, the 
label shows a carbon content which is based on beginning of life, there 
is no end of life--the sustainability piece is missing on the label. 
Therefore, at a time of increased pressures on retailers, brands and 
manufacturers to reduce the carbon footprint of their consumer 
products, the label needs to show a carbon intensity (CI) score which 
will be determined by an international American Standard Test Method 
(ASTM). Today, the biobased products are being denied shelf space in 
large retailers shelves, because the products are not considered 
sustainable. AFCC is working with ASTM on developing the CI score for 
biobased consumer products based on sound science and regenerative 
agriculture practices.
    AFCC is requesting increased funding for the 
BioPreferred' Program to support procurement officers and 
the development of modernizing the label which will give consumers 
confidence the products are sustainably sourced.
Section 9003 Biorefinery Assistance Program for Renewable Chemicals and 
        Biofuels
    AFCC is requesting a grants program be created for the Biorefinery 
Assistance Program which will encourage innovation and generate jobs.
    AFCC in its Agriculture FY 2023 Appropriations request, which is 
attached, requests Congress expand its authority to 5 years funding for 
the biorefinery program instead of only 2 years as is in the 2018 Farm 
Bill. The 2018 Farm Bill expanded access to stand alone renewable 
chemicals manufacturing facilities, but without a full 5 years of 
funding the program, new innovative technologies and companies are 
prevented in capital in rural areas, which prevent job growth and 
economic growth in rural America.
Soil Carbon and Regenerative Agriculture Practices
    Creating an ASTM standard based on good science practices that 
utilizes baseline soil carbon storage will give farmers and growers 
Section 45Q tax incentive for carbon capture in soil. AFCC supports the 
Growing Climate Solutions Act, since it would create a voluntary, 
producer-led carbon sequestration certification program at the 
Department of Agriculture (USDA) and provide farmers with technical 
resources to participate in voluntary carbon markets. AFCC is 
requesting an interagency be created to work with the Department of 
Treasury in the development of a tax incentive for farmers in Section 
45Q of the Tax Code.
New Grant Program: The Bioeconomy Development Opportunity (BDO) Zone 
        Program
BDO Zone Supports Energy Infrastructure in Rural & Distressed 
        Communities
    The Bioeconomy Development Opportunity Zone Program is a 
certification and regional designation grant program that enables 
economic development agencies and communities to more effectively and 
credibly disclose feedstock-related risks and promote biobased 
development opportunities to developers and investors around the world. 
The program would support development of manufacturing sites and jobs 
in underserved communities. A marker bill is attached which AFCC is 
promoting for the next farm bill.
Compostable Bioplastics
    Under the carbon capture utilization education program. AFCC is 
requesting that bioplastics and biobased packaging will provide key 
opportunities to fight against climate change. The next farm bill, 
Energy Title IX should have research programs showing that compostable 
bioplastics and packaging can be tested and have proven to safely break 
down without any harm to the environment and can dramatically reduce 
the amount of food waste going into landfills. Composting that food 
waste instead of landfilling it is one the best strategies for 
addressing climate crisis. Sending food waste to landfills generates 
methane, which is 20 times worse than carbon dioxide as greenhouse gas 
emission. We urge USDA and DOE to create programs funding composting of 
bioplastics and food waste. Finished compost is critical for improving 
soil health, which is also an emerging solution to protect the climate 
and restoring the Earth's topsoil for better draw down of carbon 
dioxide in soil, thereby reducing emission in the atmosphere, and the 
soil is the carbon sink for smart climate practices for U.S. farmers.
Improving Modeling Technologies in Assessing Life Cycle Analysis
    AFCC is requesting USDA, DOE, and EPA consider using greenhouse gas 
assessment of renewable fuel and renewable chemical pathways and using 
modernized methods such as the Argonne GREET model. A thoughtful, 
scientific, and holistic approach to establishing low-carbon or clean 
fuel standards and related policies that will reflect all relevant 
aspects of feedstock processing and recognize its value for renewable 
chemicals, biofuels, and biobased products to accelerate the growth of 
value-added agriculture and the de-carbonization of he U.S. biobased 
economy.
Conclusion
    Thank you for the opportunity to provide statement for the record. 
AFCC recommends Congress should promote innovative technologies, which 
are sustainable, safe for the environment, and encourage greater 
investments in lowering the carbon footprint which would protect the 
national security interests. This would build the biobased economy, 
build the rural and underserved areas, and create more jobs.
            Sincerely,
            
            
Rina Singh, Ph.D.,
Executive Vice President, Policy,
Alternative Fuels & Chemicals Coalition.

 
                                                           AFCC's 2023 Appropriations Requests
                                                 Key Program Summaries: Agriculture & Rural Development
                                                          AFCC's Priorities Are [8Highlighted]
                                                      Subcommittee: Agriculture & Rural Development
                                                      Agency: U.S. Department of Agriculture (USDA)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          FY 2019            FY 2020            FY 2021            FY 2022         President's FY     AFCC's FY 2023
 Account/Program:      Appropriation      Appropriation      Appropriation      Appropriation       2023 Budget          Request             Notes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                         Please Note: The budget amounts below include both Program Level (PL) and Budget Authority (BA) amounts
--------------------------------------------------------------------------------------------------------------------------------------------------------
 USDA: Rural Business--Cooperative Service; Rural Business Program Account, Business & Industry (B&I) Loan Guarantees (Section 310B of the Consolidated
                                                         Farm and Rural Development Act of 1961)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary       PL: $950 million    PL: $1 billion +   PL: $1 billion     PL: $1.5 billion   PL: $1.5 billion   PL: $1.5 billion
                    BA: $33.25 million   $951 million      BA: $10 million     (USDA FY 2022     BA: $32 million    BA: $32 million
                                         supplemental                          request)
                                        BA: $21 million                       BA: $73.125
                                                                               million
Mandatory           $0                  $0                 $0                 $0                 $0                 $0
--------------------------------------------------------------------------------------------------------------------------------------------------------
   USDA: Rural Business--Cooperative Service; Rural Business Program Account, 8Section 9002: Biobased Products Procurement Program (USDA BioPreferred
                                                                      Program) (1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary       $0                  $0                 $0                 $0                 Per 2018 Farm      8$3,000,000
                                                                                                  Bill               discretionary
                                                                                                                     funding
[M]andatory         $3,000,000 per      $3,000,000 per     $3,000,000 per     $3,000,000 per     $3,000,000         8Increase to
                     2018 Farm Bill      2018 Farm Bill     2018 Farm Bill     2018 Farm Bill                        $5,000,000
                                                                                                                     funding level
--------------------------------------------------------------------------------------------------------------------------------------------------------
             8See Endnote (1) for current issues with the BioPreferred Program and AFCC's recommendations to address and fix these issues.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    8USDA: 2018 Farm Bill; Title IX. Section 9003: Biorefinery, Renewable Chemical & Bioproducts Manufacturing Assistance Loan Guarantee Program (2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary       Discretionary       Discretionary      Discretionary      Discretionary      $0                 8$25 million
                     Funding             Funding            Funding            Funding                               discretionary
                     authorized per      authorized per     authorized per     authorized per                        funding per 2018
                     2018 Farm Bill:     2018 Farm Bill:    2018 Farm Bill:    2018 Farm Bill:                       Farm Bill (2)
                     $25,000,000         $25,000,000        $25,000,000        $25,000,000
                    No discretionary    No discretionary   No discretionary   No discretionary
                     funding was         funding was        funding was        funding was
                     appropriated        appropriated       appropriated       appropriated
Mandatory           PL: $127 million    PL: $158 million   $0                 $0                 $0                 8See
                    BA: $50 million     BA: $25 million                                                              Discretionary
                                                                                                                     Funding Above
                                                                                                                    8FY 2020 was the
                                                                                                                     final year of
                                                                                                                     mandatory
                                                                                                                     funding for this
                                                                                                                     program
--------------------------------------------------------------------------------------------------------------------------------------------------------
                USDA: 2018 Farm Bill; Title IX, Section 9005: Bioenergy Program for Advanced Biofuels (Advanced Biofuel Payment Program)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary       Discretionary       Discretionary      Discretionary      Discretionary      $0                 $20 million
                     Funding             Funding            Funding            Funding                               discretionary
                     authorized per      authorized per     authorized per     authorized per                        funding per
                     2018 Farm Bill:     2018 Farm Bill:    2018 Farm Bill:    2018 Farm Bill:                       Title IX, Sec.
                     $20,000,000         $20,000,000        $20,000,000        $20,000,000                           9005,
                    No discretionary    No discretionary   No discretionary   No discretionary                       Agriculture
                     funding was         funding was        funding was        funding was                           Improvement Act
                     appropriated        appropriated       appropriated       appropriated                          of 2018
Mandatory           2019-2023           2019-2023          2019-2023          2019-2023          PL: $7 million     PL: $7 million
                     mandatory           mandatory          mandatory          mandatory         BA: $7 million     BA: $7 million
                    PL: $7 million      PL: $7 million     PL: $7 million     PL: $7 million                         per 2018 Farm
                    BA: $7 million      BA: $7 million     BA: $7 million     BA: $7 million                         Bill
--------------------------------------------------------------------------------------------------------------------------------------------------------
    USDA: Rural Business--Cooperative Service; Rural Business Program Account. Section 9007: Rural Energy for America Program (REAP) Loan Guarantees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary       $334,000            $706,000           $392,000           $0                 $0                 $20 million
                                                                                                                     discretionary
                                                                                                                     funding per
                                                                                                                     Title IX,
                                                                                                                     Section 9007(4),
                                                                                                                     Agriculture
                                                                                                                     Improvement Act
                                                                                                                     of 2018
Mandatory           PL: $524 million    PL: $183 million   PL: $530 million   PL: $1.123         PL: $635 million   PL: $635 million
                    BA: $20 million     BA: $7 million     BA: $10 million     billion (USDA FY  BA: $1 million     BA: $1 million
                                                                               2022 request)
                                                                              BA: $12.92
                                                                               million
--------------------------------------------------------------------------------------------------------------------------------------------------------
  USDA: Rural Business--Cooperative Service; Rural Business Program Account, Section 9007: Rural Energy for America Program (REAP) Grants 8(see above)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary       $0                  $0                 $0                 $0                 $0                 Included in 9007
                                                                                                                     loan guarantee
                                                                                                                     appropriation
                                                                                                                     above
Mandatory           $26 million PL &    $41 million PL &   $40 million PL &   PL: $38 million    PL: $49 million    PL: $49 million
                     BA                  BA                 BA                 (USDA FY 2022     BA: $49 million    BA: $49 million
                                                                               request)
                                                                              BA: included in
                                                                               loan program
                                                                               above
--------------------------------------------------------------------------------------------------------------------------------------------------------
 8USDA: Forest Service, National Forest System, State and Private Forestry, Creating Incentives for Increased Use of Biomass from National Forest System
                                                                        Lands (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary       N/A                 N/A                N/A                $20,000,000        $39 billion along  8(3) Please        This
                                                                                                  with               approve the        appropriation,
                                                                                                  authorization      President's        for the first
                                                                                                  for an             request            time, addresses
                                                                                                  additional $2.6                       the mandate in
                                                                                                  billion                               ``Policies
                                                                                                                                        Relating to
                                                                                                                                        Biomass Energy''
                                                                                                                                        (per page 371 of
                                                                                                                                        H.R. 2471)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       [Endnotes]
 
Please note:
 
      8(1) This program has neither met its potential nor its promise. USDA is the Federal agency where the BioPreferred Program sits. Yet USDA has yet
   to make a significant effort to purchase biobased products and encourage other agencies to do so.
 
     The USDA BioPreferred Program enacted in the 2002 Farm Bill (Section 9002, Biomarkets Program, Energy Title IX), has been reauthorized
     every 5 years in each subsequent farm bill. It began in 2002 with a mandated appropriation of $1 million which, with advocacy, has been increased
     to $3 million annually. AFCC's request to increase the funding level to $5 million annually would solve the implementation for the program.
 
     The program has two parts:
 
        Certification (a USDA label on product packaging shows how much carbon came from crops or is new carbon), and
        Procurement: a biobased product is available as an alternative to a fossil-based product, by law, USDA and all Federal agencies and their
       contractors must buy the biobased product in lieu of fossil-based products.
 
     Certification is working; Procurement has not worked for just about any producer.
 
     Therefore, in the 2018 Farm Bill, AFCC's Executive Vice President advocated to move the program to a new home in USDA.
 
     However, after 2 years, no changes have occurred on the procurement side with the new management; the law still is not being carried out,
     implementation of the program is still not occurring, there is no accountability, and the program is not functioning as Congress intended.
 
     If USDA is not purchasing biobased products, which is the Federal agency where the program sits, why would the other Federal agencies
     consider buying it?
 
     Biobased product companies would like to expand their business in sustainability and a climate-smart platform, but if they can't get the
     current biobased products sold, it is very difficult for them to justify to their board of directors to expand or even be in this space. We need a
     solution to this issue.
 
     USDA currently is purchasing petroleum-based office supplies from distributors such as Office Max, Amazon, others, biobased products are
     not being purchased. Office supplies are everyday products which USDA and other Federal agencies should be purchasing routinely from their
     distributors.
 
     The BioPreferred Program has not been operating as Congress intended, and now that Secretary Vilsack has been confirmed and we know that he
     has been supportive of the program, we would like Congress to add statuary language in the appropriations bill, the following information:
 
      3 Quarterly, provide Congress a report, the procurement of biobased products from the catalogue on their website, BioPreferredDCatalog (https://
       www.biopreferred.gov/BioPreferred/faces/catalog/Catalog.xhtml) which has all of the biobased products listed. What are the sales number and the
       actual biobased products sold? There is no transparency.
 
      3 Provide purchases of low-hanging fruits, such as USDA certified office supplies (bioplastic binders, notepads, paper) and biobased cleaning
       products which USDA currently is purchasing from distributors like Office Max, Amazon, which are not biobased--this needs to occur within 90 days
       of receiving the letter from Congress. USDA will provide proof of purchase to Congress for these biobased products (how many and at what price)
       every quarter. The quarterly report should include all procurement of biobased products.
 
      3 Modernizing the BioPreferred label with sustainability parameters such as carbon intensity score. The label has a beginning of life parameter on
       its label which is not based on sustainability.
 
     Biobased product companies would like to expand their business in sustainability and a climate-smart platform, but if they can't get the
     current biobased products sold, it is very difficult for them to justify to their board of directors to expand or even be in this space. Some
     companies have been waiting almost 10 years. We need a solution to this issue.
 
      8(2) Unlike previous farm bills, which provided mandated funding for the Section 9003 loan guarantee program for each year of the 5 year term of
   the farm bill, the 2018 Farm Bill provided only 2 years of mandated funding, with discretionary funding of up to $50 million per year authorized for
   each of the remaining years covered by the 2018 Farm Bill AFCC strongly recommends that the Section 9003 Loan Guarantee Program receive its full
   discretionary authorization of $25 million for FY 2023.
 
      This is a critical program: It is one of only two Federal loan guarantee programs that are available to bridge the ``valley of death'' between the
   final validation and demonstrated workability of a promising new concept, technology, or product and the ability to bring it to commercial
   realization.
      Every project brought to fruition through this program creates jobs and economic development for its first commercial facility, as well as many
   additional jobs and economic development for local communities throughout the U.S. as the success of the first commercial facility leads to private-
   sector financing of multiple follow-on projects.
 
      Only after the concept, technology, or product has been proven at commercial scale, will private-sector investors and lenders find the project
   risks acceptable to further replicate and deploy the concept, technology, or product.
 
      8(3) The appropriation of $20 million under the Forest Service's National Forest System, State and Private Forestry account, to create incentives
   for increased use of biomass from National Forest Lands has far reaching significance:
 
      First, because it will remove dead and diseased wood and slash piles from logging operations from the National Forests which exacerbate and can
   lead to extreme fire hazards,
      Second, because it begins to carry out, for the first time, the mandate in the ``Policies Relating to Biomass Energy'' (page 371 of H.R. 2471),
   which has been incorporated into every Consolidated Appropriations Act since FY 2018,
      Third, because it helps facilitate responsible forest management, and
      Fourth, because it recognizes biomass as a renewable energy source which:
 
        Using a liability that contributes to forest fires, increased carbon emissions that contribute to climate change, loss of wildlife habitats,
     loss of property, and ballooning firefighting budgets,
        As an asset to produce value-added products which can:
 
         create jobs,
 
         generate revenues and improve the economies of rural communities,
 
         replace fossil-based products, and
 
         mitigate the impacts of climate change.
 
      Fifth, because the USDA Forest Service has launched a robust, 10 year strategy to squarely address this wildfire crisis in the places where it
   poses the most immediate threats to communities, which was announced on January 18, 2022 by Agriculture Secretary Vilsack and Forest Service Chief
   Randy Moore.
 
        See: https://www.fs.usda.gov/news/releases/secretary-vilsack-announces-new-10-year-strategy-confront-wildfire-crisis
 
          The strategy:
 
           Estimates that funding to remove hazardous fuels will range from $1,000 to $2,500 per acre
 
           the strategy calls for the Forest Service to treat up to an additional 20 million acres on national forests and grasslands and
           support treatment of up to an additional 30 million acres of other Federal, state, Tribal, private, and family lands
 
           The President's FY 2023 budget (see page 27) requests $3.9 billion for Forest Service Wildland Fire Management, as well as an
           additional $2.6 billion authorized by the suppression cap adjustment to carry out this initiative.
 
      AFCC requests that the President's request of $3.9 billion be appropriated along with an authorization of an additional $2.6 billion.
--------------------------------------------------------------------------------------------------------------------------------------------------------

                             [attachment 2]
117th CONGRESS
1st Session

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                          H. R. ____ / S. ____
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------------------------------------------------------------------------
 
-------------------------------------------------------------------------
To provide grants for eligible entities to create Bioeconomy Development
 Opportunity Zone designations that enable local communities to utilize
               biomass for biofuel and energy development.
------------------------------------------------------------------------
                   IN THE HOUSE OF REPRESENTATIVES or
                   IN THE SENATE OF THE UNITED STATES
                            ________ __, 2021
 
  Mr./Ms. [Sponsor (for him/herself, and [List of Initial Cosponsors])
  introduced the following bill; which was referred to the Committee on
                           __________________
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                                 A BILL
------------------------------------------------------------------------

To provide grants for eligible entities to create Bioeconomy 
Development Opportunity Zones to utilize local biomass resources and 
create jobs by de-risking investment and accelerating development of 
new renewable energy production facilities in distressed communities.

      Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
    This Act may be cited as the ``BDO Zone Grant Program Act of 2021''
SECTION 2. BIOECONOMY DEVELOPMENT OPPORTUNITY ZONE GRANTS
      (a) Findings.--Congress finds the following:

            (1) Fifty-two million Americans live in economically 
        distressed communities.
            (2) Many of these communities have substantial biomass 
        assets--agricultural residues, wood fiber, food and farm waste 
        that can be used to produce ground and aviation biofuel, 
        renewable chemicals, biomass to power, biogas, biochar and 
        other biobased products.
            (3) Ground and aviation biofuel is an immediately available 
        path toward de-carbonizing the transportation sector while 
        driving rural economic development and growth, stabilizing 
        feedstock prices, and providing additional markets for 
        agricultural products.
            (4) United States farmers and forests are producing record 
        amounts of feedstock for renewable fuels, but market 
        disruptions and fluctuations due to the COVID-19 pandemic have 
        created uncertainty and reduced markets for United States 
        feedstock producers.
            (5) Biofuels, renewable chemicals, biomass to power, 
        biogas, biochar and other biobased products which contribute to 
        energy security, reduce air pollution, and support rural 
        economic development, are an important market for United States 
        feedstock producers.

      (b) Establishment.--

            (1) [In] general.--Not more than 180 days after enactment, 
        the Secretary of Agriculture, working through the Administrator 
        for Rural Business--Cooperative Service, shall, subject to 
        appropriations, establish the ``BDO Zone Grant Program.''

      (c) Eligible Applicants.--The Secretary may make a grant under 
this subsection to a partnership that--

            (1) is composed of;

                    (A) entities representing a region composed of 1 or 
                more rural areas, including--

                            (aa) except as provided in subparagraph 
                        (B), 1 or more of--

                                    (i) a unit of local government;
                                    (ii) a Tribal government; or
                                    (iii) an authority, agency, or 
                                instrumentality of an entity described 
                                in item (i) or (ii); and

                    (B) a nonprofit or for-profit organization, 
                including a public benefit corporation, an economic 
                development organization, a community or labor 
                organization, an institution of higher education, a 
                community development financial institution, a 
                philanthropic organization, an instrumentality of a 
                state agency relevant to community and rural 
                development, a cooperative extension, an institution in 
                the Farm Credit System, and a local food policy 
                council; and
                    (C) such other entities as the Secretary or the 
                partnership may determine to be appropriate;

            (2) does not include a member described in subparagraph 
        (1)(A)(aa) but demonstrates significant community support 
        sufficient to support a likelihood of success on the proposed 
        projects, as determined by the Secretary; and
            (3) demonstrates, as determined by the Secretary, 
        cooperation among the members of the partnership necessary to 
        complete comprehensive, asset-based rural development to align 
        Federal, state, regional, and Tribal investment, while 
        leveraging nongovernmental resources, to build economic 
        resilience and aid economic recovery, including in communities 
        impacted by economic transitions and climate change.

      (d) Use of Grant Funds.--The use of grant funds provided under 
this section may be used for the following purposes;

            (1) The creation of Bioeconomy Development Opportunity 
        (BDO) Zone designations to support the development of new 
        markets that will stimulate local and regional biobased 
        economic development. This includes quantifying, scoring and 
        issuance of ratings that reflect regional feedstock and 
        infrastructure risk for use by bio-project development 
        companies and capital markets.

            (2) Supporting organizational operating expenses and 
        planned BDO Zone economic development related to BDO Zone 
        designation activities for which the grant was provided.

      (e) Amount of Grants.--The Secretary will make grant awards to 
eligible entities, as described in subsection (d), of not more than 
$200,000 per eligible applicant.
      (f) Matching Requirement.--

            (1) In general.--Subject to paragraph (2), the recipient of 
        a grant under this section shall contribute a non-Federal match 
        of 25 percent of the amount of the grant, which may be 
        satisfied through an in-kind contribution.

            (2) Waiver.--The Secretary may waive any portion of the 
        matching requirement described in paragraph (1) on a finding 
        that the recipient of the applicable grant is economically 
        distressed.

      (g) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary $20,000,000 for each of fiscal years 2023 
through 2030 to carry out this section.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Xochitl Torres Small, Under Secretary for Rural 
        Development, U.S. Department of Agriculture
Question Submitted by Hon. Gregorio Kilili Camacho Sablan, a Delegate 
        in Congress from Northern Mariana Islands
    Question. Secretary Torres Small, you mention in your testimony 
that USDA Rural Development is looking for creative ways to provide 
capital and technical assistance to communities that historically have 
not had resources like the Rural Energy Savings Program. I respectfully 
request you consider the Northern Mariana Islands and other U.S. 
Territories, which all could benefit from additional support from Rural 
Development to promote clean energy, tackle the climate crisis, and cut 
costs for families and businesses.
    Answer. The agency would welcome an opportunity to work with you, 
along with our colleagues in the CNMI and other Pacific communities to 
finance energy efficiency and renewable energy projects. RUS programs 
are fully open to Compact of Free Association States and the 
Commonwealth of Northern Mariana Islands (CNMI), Puerto Rico, Virgin 
Islands and American Samoa. The Rural Energy Savings Program (RESP) 
will lend funds to a utility at zero percent interest rates and the 
utility will then re-lend those funds to rate payers for energy 
efficiency measures with the utility paying RUS back over 20 years and 
consumers paying back the utility via an on-bill financing mechanism 
over 10 years at interest rates no higher than 5%. In addition to RESP, 
communities in the Pacific have also successfully applied for grant 
funding for renewable and other energy projects under the High Energy 
Cost Grant (HECG) program which statutorily targets communities with 
energy costs 275% above the national average. The challenge when it 
comes to serving some Pacific communities in need is that even at zero 
percent interest, utilities may not have sufficient resources to repay 
those loans. The HECG program can help but is typically funded at a 
modest level which in recent years has been at or near $10 million.
    USDA's Rural Development State office in Hawaii oversees many of 
our programs with Compact States and the CNMI and we are united in the 
field and at headquarters in our desire to support people in CNMI and 
throughout Pacific communities.
Response from John J. ``Jay'' McKenna III, Chief Executive Officer, 
        Nacero, Inc.
Questions Submitted by Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. Mr. McKenna, you mentioned that the Russian invasion of 
Ukraine accelerates the need for the United States to reduce our 
reliance on foreign oil. How would making gasoline from natural gas and 
renewable natural gas/biomethane help achieve this objective, 
especially when you stated that construction of each Nacero facility 
can take 4 years?
    Answer. It takes two barrels of crude oil, \1/3\ of which is 
imported, to make one barrel of gasoline. The natural gas and renewable 
natural gas used to make Nacero gasoline is one hundred percent 
domestic. Nacero's Penwell plant will reduce demand for foreign crude 
oil by 208,000 per day, the same amount we were importing from Russia 
before the embargo. Facilities of this scale can't be built overnight 
but given the size of the reduction in foreign dependence, 4 years is a 
remarkably short time.

    Question 2. Mr. McKenna, you stated that making gasoline from 
natural gas and renewable natural gas would result in lower greenhouse 
gas emissions. Can you please detail the sources of these savings and 
indicate how the substitution of fuel made in this manner could impact 
the U.S. and global greenhouse gas emissions?
    Answer. Making gasoline from natural gas instead of crude oil cuts 
the lifecycle carbon footprint of the gasoline manufacturing process in 
half by avoiding the production of crude oil refinery byproducts, many 
of which are not needed in this country. Using renewable natural gas 
(``RNG'') from farms, feedlots and landfills to make Renewable Gasoline 
prevents the raw release into the atmosphere of biomethane, which is 80 
times more harmful over 20 years than carbon dioxide. A Nacero plant 
the size of Penwell that uses a feedstock mix of 75% conventional 
natural gas and 25% RNG could offset fifty million ton per year of 
carbon emissions. Four Nacero plants of this size with this feedstock 
mixture would offset the carbon emissions of Los Angeles.\1\ *
---------------------------------------------------------------------------
    \1\ https://www.wired.com/story/la-emissions-block-by-block/. CARB 
shows statewide emissions dropping about 1% per year (https://
ww2.arb.ca.gov/ghg-inventory-data), which would put the LA total at 
about 167M tons (down from 176M tons in the 2017 study).
    * Editor's note: items annotated with  are retained in Committee 
file.

    Question 3. Mr. McKenna, in your testimony, you wrote that the 
technology you intend to use has been proven. Can you please tell us 
where and when this technology has been used?
    Answer. Nacero has exclusive rights in the lower 48 states to the 
Topsoe TIGASTM natural gas to gasoline technology. A 
TIGASTM system of identical size to the one Nacero is using 
has been in successful operation in Turkmenistan since 2019. The 
Turkmenistan Government, which owns the plant, is planning to add 
additional units.

    Question 4. Mr. McKenna, you made some bold predictions about the 
economic impact of a Nacero plant on a local and regional economy. Can 
you please break down how the construction of a projects like the ones 
planned for west Texas and northeast Pennsylvania will generate a $25 
billion impact?
    Answer. See the Bureau of Business Research, IC2 Institute, The 
University of Texas at Austin, ``Economic Assessment of Nacero's 
Planned Investment: State of Texas, Permian Basin, and Ector County 
Impacts, 2022-2077,'' (2021), which estimates $27.8Bn GDP impact to the 
regional economy through construction and operation. Similar results 
are expected elsewhere.

    Question 5. Mr. McKenna, you stated that Nacero facilities will 
create enough renewable natural gas demand for up to 75-100 additional 
digesters. What is the environmental benefit from using renewable 
natural gas? What is the cost to develop this additional renewable 
natural gas capacity and how much income might the farmers receive from 
selling their biomethane?
    Answer. The capture and use of biomethane prevents its raw release 
into the atmosphere, where, as indicated above, it is 80 times more 
harmful over 20 years than CO2. A single Nacero facility 
that consumes 250,000 MMBtu/d per day of RNG would double the current 
250,000 MMBtu/d U.S. demand for RNG and in turn create demand for 75 to 
100 new digesters. Each digester costs $35-$50 million and generates 
about $1.1 million of additional annual farm income.

    Question 6. Mr. McKenna, you stated that construction of a Nacero 
plant would require thousands of jobs during the construction phase and 
hundreds of permanent jobs thereafter. What would you expect these jobs 
to look like and how would you support the development of these 
potential employees?
    Answer. It will take an estimated 3,500 construction workers 4+ 
years to build a Nacero facility the size of Penwell and 450 operators 
to run it thereafter. This does not count the workers needed to capture 
and convert biomethane into renewable natural gas, or the workers 
needed for annual maintenance. Construction and operation will be 
accompanied by broad based training programs.

    Question 7. Mr. McKenna, you talked about the importance of 
engaging the ``everyday driver'' in battling greenhouse gas emissions 
and said that you expect that Nacero gasoline with half the lifecycle 
carbon footprint will be sold at a competitive price. Can you please 
explain the importance of this strategy and how Nacero is able to help 
everyday drivers reduce global greenhouse gas emissions?
    Answer. Global warming is a problem for everyone. The 
transportation sector is the largest contributor of greenhouse gas 
emissions in the United States and gasoline is the majority contributor 
to transportation sector emissions.\2\ Nacero's affordable, 
environmentally superior gasoline will be useable in today's cars and 
trucks without modification and will make it possible for everyone, 
regardless of income, to fight climate change without having to buy a 
new car or pay more at the pump.
---------------------------------------------------------------------------
    \2\ https://www.epa.gov/greenvehicles/fast-facts-transportation-
greenhouse-gas-emissions.


 
                     A 2022 REVIEW OF THE FARM BILL

           (INTERNATIONAL TRADE AND FOOD ASSISTANCE PROGRAMS)

                              ----------                              


                        WEDNESDAY, APRIL 6, 2022

                  House of Representatives,
         Subcommittee on Livestock and Foreign Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Jim Costa [Chairman of the Subcommittee] presiding.
    Members present: Representatives Costa, Spanberger, Hayes, 
Axne, Craig, Bishop, Johnson, DesJarlais, Rouzer, Kelly, Baird, 
Mann, Feenstra, Moore, and Thompson (ex officio).
    Staff present: Lyron Blum-Evitts, Daniel Feingold, Josh 
Lobert, Lesly Weber McNitt, Ashley Smith, Caleb Crosswhite, 
Jennifer Tiller, Erin Wilson, and Dana Sandman.

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

    The Chairman. Good morning, everyone. I say good morning. 
The Subcommittee on Livestock and Foreign Agriculture will now 
come to order, and we are doing a hybrid Subcommittee hearing 
this morning, which is not unusual these days. We are, 
unfortunately, still not out of the woods of this horrific 
COVID pandemic that has impacted every fabric and region of 
American lives, over 900,000 lost around the world. So, we hope 
that we are going to pass some additional funding to protect 
American people, but that is not the subject of this morning's 
hearing.
    The subject of this morning's hearing is a review of the 
farm bill as we set the table for next year's reauthorization, 
focusing today on international trade and food assistance 
programs. And it could not be more timely for a number of 
reasons, but the fact is the efforts to ensure that American 
agriculture, which it has traditionally done, provides a sort 
of support, not only to feed all of our people, but to also 
help in places of the world where there is hunger and food 
insecurity has been a tradition of previous farm bills. So, we 
are going to look at that.
    The Subcommittee will receive testimony from the witnesses 
today. We have two panels of very good witnesses, and with 
consultation of the Ranking Member, pursuant to Rule XI(e), I 
want to make Members of the Subcommittee aware that other 
Members of the full Committee may join us today. They are 
always welcome, and we appreciate their participation.
    With that said, I will begin with my opening statement, and 
I want to thank Ranking Member Johnson and Members of the 
Subcommittee, and those that are participating on Zoom for your 
focus on international food assistance and trade programs 
within the farm bill. These programs are important for multiple 
reasons. They open and grow new markets for high-quality 
American food and agriculture; they save lives; they build 
local agriculture and food systems in developing economies; and 
they strengthen our foreign relations to advance shared values. 
As the oldest democracy in the world and still a beacon of 
light, these shared values that we have that begin with human 
rights, and the democratic institution that protects those 
human rights, our freedoms that we hold most dearly.
    So, I think all of you know, I like to say as a third-
generation farmer, still my primary source of income, that 
food, the food that we grow in America, is a national security 
issue. May not always look at it that way, but I think maybe at 
the beginning of the pandemic with the closure of restaurants 
and schools, people began to realize in seeing some scarcities 
on grocery shelves that, in fact, we can't take it for granted 
that the hardworking American farmers, ranchers, dairymen and -
women, the farmworkers, every day do so much with less than 
four percent of the nation's population to put that food on 
America's dinner table every night. Let us never, ever take it 
for granted. And not only can we feed America with the highest 
quality of products, the most nutritious products, and every 
day we work hard to make it better at the most cost-effective 
level, although we know this inflationary spiral we are in 
right now is impacting the cost of those groceries. The fact is 
nobody, nobody, as that song goes, does it better than the 
American farmer, and stewards of our environment as well.
    Obviously, I am very passionate about that from my own 
experience, but the fact is that we have problems. I wanted to 
send a copy of a story that I thought was very good. I bring it 
to your attention, and I would urge you to look at it. The 
title this morning is, Russia's War on Ukraine: We See the 
Storm Coming: U.S. Struggles to Contain a Deepening Global Food 
Crisis. And that is, in part, why we want to have this 
Subcommittee hearing here this morning. Putin's war on the 
Ukraine has been horrific, and I think we all have our very 
personal feelings about what we have seen and the courageous 
Ukrainian people fighting for their independence and their 
sovereignty. And he is a pariah, and I think he is a war 
criminal. But the fact is that the devastation that he has 
placed upon the people of Ukraine is a wake-up call for all of 
us, and I think he has, in a strange sort of way, brought us 
together. We needed to be together before this, but I think we 
will see continuing things from the testimony of our witnesses 
and the questions we ask about what this means. We have already 
seen the disruption of global grain and fertilizer markets. We 
have seen a significant downstream effect on countries reliant 
on Black Sea trade, and for this reason, I have signed on to a 
letter with many of my agricultural colleagues requesting that 
the USDA and the USAID use resources available in Bill 
Emerson's Humanitarian Trust to help address food insecurity. 
The Trust is one of many vital farm programs that we look 
forward to hearing about today from our witnesses, but I 
believe that--and I have had conversations and I suspect many 
of my colleagues have with the Secretary of Agriculture and 
folks in the USDA that we are going to have to look at other 
resources with the Commodity Credit Corporation and others to 
provide funding to optimize American farmers and ranchers to 
use their land and resources that allows for surplus production 
in various commodities, especially in our grain and wheat areas 
that many countries don't have.
    Though the international food assistance programs only make 
up a fraction, a fraction of one percent of our Federal budget, 
Americans still lead global donations and share a bounty 
through the farm bill programs, like Food for Peace, the 
McGovern-Dole, and Food for Progress. And so, I think a 
concomitant view, I believe, that we share is a moral 
obligation to provide in leading nations, to provide assistance 
to countries in need, and there are certainly many people who 
need our help.
    According to the USDA's International Food Security 
Assessment from last summer, before the invasion of Ukraine, 
the number of food-insecure people in 2021 was estimated to be 
at 1.2 billion people: 1.2 billion people. There are seven 
billion people plus on the planet, so think about that. That is 
almost 20 percent, and that increase was due to a lot of 
factors, including COVID-19 and climate-related disasters, and 
conflict. And the conflict, of course, is bearing on us now.
    The past 2 years have made it clear that our global 
integrated food system has some cracks, and I want to hear 
ideas from our two panels and from Members of the Committee on 
how we can deal with some of those cracks. The vulnerabilities 
as climate change continues to impact our production systems, 
exchanging technical knowledge with partnering countries, such 
as the Farmer-to-Farmer Program, Cochran fellowships can be 
helpful in food-insecure nations, make them more food 
efficient.
    But food is just one assistance that agriculture connects 
us globally, and I think the farm bill trade promotion programs 
are something else that we need to think about in terms of next 
year's farm bill reauthorization. Market Access Program has had 
a tremendous benefit in every region of the country. I know it 
has in California. We are very strong advocates for the Market 
Access Program. Foreign Market Development Program, FMD, is 
also helpful for U.S. producers to develop commercial 
relationships and facilitate agricultural trade.
    In addition, we are going to have to deal with the supply 
chain issue. I mean, it is still a problem and these empty 
containers are not good. We have two bipartisan pieces of 
legislation that many of us are supporting. Congressman 
Garamendi has that piece of legislation that we hope to get it 
worked out here that will deal with the demurrage issue and the 
delay issues on the empty containers, and I have legislation on 
anti-trust provisions.
    So, it is kind of an all of the above approach. These 
programs when they work and to the degree we make them work 
more efficiently, they contribute to local growth and to 
agricultural support. Maintaining and deepening relationships 
is a vital part of engendering economic development and shared 
values, and building future markets for American agriculture.
    So, the two objectives that are advanced by the farm bill's 
Title III programs are not mutually exclusive in my mind. I 
think they are complementary, and I would like to hear our 
witnesses give their thoughts on that. So, we look forward to 
hearing from them on the full spectrum of Title III programs 
and delivering on their mission.
    The witnesses on our two panels have an impressive amount 
of knowledge on how Title III farm bill programs impact their 
efforts in the world. I am excited to hear from them, and I 
know we will have a productive discussion about what is working 
and what is not working so well, and how we can improve it.
    [The prepared statement of Mr. Costa follows:]

Prepared Statement of Hon. Jim Costa, a Representative in Congress from 
                               California
    Good morning. Thank you to our witnesses, Ranking Member Johnson, 
and the Members of the Subcommittee for convening today to discuss the 
international food assistance and trade programs within the farm bill. 
These programs are important for multiple reasons: they open and grow 
new markets for high quality, American food and agriculture products, 
they save lives, they build local agriculture and food systems in 
developing economies, and they strengthen foreign relations to advance 
shared values and security. I've been known to say that food security 
is national security and that linkage has never seemed stronger that it 
is today.
    Unfortunately, we may be called on to do even more in the coming 
months as we grapple with the fallout from Putin's war in Ukraine. We 
have already seen disruption of global grain and fertilizer markets, 
which will have significant downstream effects on countries that are 
reliant upon Black Sea trade. For this reason, I signed onto a letter 
with many of my Agriculture Committee colleagues requesting that USDA 
and USAID use the resources available in the Bill Emerson Humanitarian 
Trust to help address food insecurity. The Trust is one of many vital 
farm bill programs that I look forward to hearing about and discussing 
today.
    American farmers and ranchers are experts at optimizing their use 
of land and resources. Their efficiency allows for surplus production 
of commodities--a benefit that many countries do not have. Though 
international food assistance programs only make up a fraction of one 
percent of our Federal budget, Americans still lead global donations, 
sharing our bounty through farm bill programs like Food for Peace, 
McGovern-Dole, and Food for Progress.
    I believe it is a moral obligation of leading nations to provide 
assistance to countries in need, and there are certainly many people 
who need help. According to USDA's International Food Security 
Assessment from last summer, the number of food-insecure people in 2021 
was estimated at 1.2 billion, an increase of almost 32% (291 million 
people) from the 2020 estimate. They estimated that much of this 
increase was due to persistent effects of COVID-19, along with climate-
related disasters, and conflict.
    The past 2 years have made clear that our globally integrated food 
system has some cracks. And many of these vulnerabilities may worsen as 
climate change continues to wreak havoc on our agricultural production 
systems. Exchanging technical knowledge with partner countries, through 
initiatives such as the Farmer-to-Farmer program and the Borlaug and 
Cochran Fellowships, will be critical in helping food-insecure nations 
become more efficient.
    Food assistance is just one way that agriculture connects us 
globally. Farm bill trade promotion programs such as the Market Access 
Program (MAP) and the Foreign Market Development Program (FMD) help 
U.S. producers establish commercial relationships and facilitate 
agricultural trade. These programs and the work they support are vital 
to opening new markets, but they also contribute to local growth of 
food and agriculture supply chains. Maintaining and deepening good 
relationships is a vital part of engendering economic development and 
shared values and building future export markets for American 
agriculture. These two objectives, which are advanced by the farm 
bill's Title III programs, are not mutually exclusive--they are 
complementary. I look forward to hearing from our witnesses about how 
the full spectrum of Title III programs are delivering on their 
mission.
    The witnesses on our two panels today have an impressive amount of 
knowledge on how Title III farm bill programs impact the world. I am 
excited to hear from them and have a productive discussion about what 
is working and how we can improve these programs.
    Before the introduction of our witnesses, I'd like to recognize the 
Ranking Member, Mr. Johnson of South Dakota, for any remarks he'd like 
to make.

    The Chairman. So, before the introduction of the witnesses, 
I would like to introduce my friend and the Ranking Member of 
the Subcommittee, the gentleman from South Dakota, Mr. Johnson, 
for any remarks he would like to make.

 OPENING STATEMENT OF HON. DUSTY JOHNSON, A REPRESENTATIVE IN 
                   CONGRESS FROM SOUTH DAKOTA

    Mr. Johnson. Well, thank you, Mr. Chairman, and I start by 
associating myself with so much of what you said, sir. I think 
as I watched the development of the 2018 Farm Bill from afar, 
it was clear to me how focused people on both sides of the 
aisle were on putting together the right Title III approach. 
And I think we all understand the value proposition, right? 
Clearly, it is needed for communities in need. Clearly, it can 
be helpful to producers, providing them an avenue for their 
hard-earned yields. But also, sir, you are right when you talk 
about shared values. Clearly, these Title III programs can help 
to advance shared values.
    And Title III is not perfect, and I think as we understand 
amid pandemic, ongoing conflict, and weather-related disasters, 
it is good for us to have hearings like this so that we can 
look forward to what does Title III need to look like, not just 
today, but in the next farm bill as well.
    As we talked, sir, before the hearing, you had noted that 
POLITICO article, and I, too, thought it was prescient. I 
thought it was on target for today. We see the storm coming. We 
see the storm coming, and we know that the war on Ukraine is 
adding shocks to an already fragile supply chain, and is 
exacerbating inflationary pressure.
    I think we do see a storm coming. I think we see a global 
food crisis that could be every bit as dangerous as those we 
saw in 2007 and 2008, and I think we are looking forward to 
hearing from our witnesses about are there things that we can 
do to be more resilient, to be more prepared to try to shave 
off the most jagged edges of that storm that we see coming.
    And of course, I am pleased to hear USAID will trigger the 
Bill Emerson Humanitarian Trust, and I do have concerns, and I 
know a number of my colleagues do, about how long it takes 
those commodities to enter the pipeline. And so, can the 
communities in crisis, can they wait until the fall, and 
hopefully, Ms. Charles can educate us more on what that 
pipeline will look like, and when that relief can actually be 
delivered.
    And before I close, I just wouldn't feel right if I don't 
mention, again, how important it is for this Administration to 
prioritize trade: our trading programs, trading relationships, 
and as the Chairman mentioned, trade promotion programs. And 
one thing we need to do, our country, is make sure we get swift 
nominations of a Chief Ag Negotiator, and of course, also a 
USDA Under Secretary for Trade and Foreign Agriculture. Both of 
those positions are needed. They are uniquely positioned to be 
able to help in this whole suite of conversations we are going 
to be having today. And frankly, it is hard to imagine a 
healthy American agricultural sector without new markets, 
expanded markets, stable markets, and those positions will help 
with that.
    So, with that, I welcome our witnesses. I am excited about 
it, too, and Mr. Chairman, I yield back.
    The Chairman. Well, I thank the gentleman from South Dakota 
for his statement and good words. I concur.
    Chairman Scott wanted to be here, but is not able to, and I 
appreciate all the good work that he does in providing 
leadership for our Committee, and as common courtesy, we want 
to provide the Ranking Member an opportunity to weigh in as 
well for any opening statement he might like to make.

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

    Mr. Thompson. Sure. Chairman Costa, Ranking Member Johnson, 
thank you so much for this Subcommittee hearing, and for your 
leadership. It is much appreciated. Thank you to our witnesses 
here. I had a chance to talk with each of you briefly here that 
are testifying on the first panel. Thank you for your 
leadership. The times that we are in are difficult times, and I 
think only going to get worse here, unfortunately, as we reach 
into the fall.
    But good morning, everybody. My thanks to our witnesses for 
spending time with us this morning. This is a timely 
conversation. I look forward to learning from you and thinking 
more comprehensively about how we can best move forward.
    We are at a crossroads. The geopolitical strife, weather-
related disasters, pandemic-related impacts, and supply chain 
and inflationary crisis are wreaking havoc on the world, and 
especially affecting those in vulnerable countries and 
communities. And there are so many simultaneous emergencies at 
the moment, so I do want to take this opportunity to extend my 
appreciation to USDA and USAID, and all their partners for 
their tireless work to feed our world's hungry. You are truly 
doing God's work, and we thank you for that. And please pass 
that thanks along to your colleagues that work with you.
    However, there is much more to do, and that is why this 
hearing is so important. The review of Title III will allow us 
to learn what is working, what isn't, and to provide direction 
as we head into deliberation of the 2023 Farm Bill. And this 
conversation will also be informed by the crisis in Ukraine. As 
almost everybody knows, Ukraine is a large producer of grain, 
and together, Russia and Ukraine supply 26 percent of global 
wheat exports, and Ukraine supplies 13 percent of the world's 
corn. Ukraine is also the largest global supplier of sunflower 
oil. Russia is a major global supplier of fertilizer 
ingredients, and oil and gas products. I think we have been 
meeting with some of the best thought leaders, trying to really 
map what we will see occur here into the fall. I am looking 
forward to hearing your analyses and assessments of this. But 
everything we have heard and really leads to a pretty grim 
conclusion that by this fall, we are going to see significant 
increase in hunger, starvation, and death by famine. And with 
that, a destabilization that is going to result in violence and 
probably an increase in terrorism.
    When you think about the Middle East, it gets almost \1/2\ 
of its food from the Ukraine and these farmers are now on the 
frontlines defending their nation, and the lack of supply of 
diesel fuel, we don't know when that winter wheat is going to 
get harvested, and we certainly don't anticipate where if this 
continues, where the spring planting will occur.
    So, as a result of the disruption to exports, global 
commodity markets have spiked and will continue to experience 
volatility, and this volatility leads to higher commodity 
prices, but there remain very real concerns over fertilizer and 
pesticide availability, and their skyrocketing costs.
    So, I echo my colleagues in hoping this hearing reveals 
more immediate solutions to these problems. Anything, 
obviously, I believe that we can do to provide tools to 
American farmers that they can increase their production at 
this point in time, which is challenging with inflation costs 
and availability of fertilizer and those things, but anything 
that we can do and that the President can do--and I think there 
are some things that he can do immediately--to help increase 
that production by American farmers of just additional bushels. 
Because I believe with every additional bushel above and beyond 
what we normally would produce is lives saved somewhere around 
the world at this point in time.
    I also hope USDA and USAID can shed some light on any near-
term executive actions this Administration is aiming to take, 
including the drawdown of the Bill Emerson Humanitarian Trust.
    With that, Mr. Chairman, Mr. Ranking Member, thank you so 
much. I yield back.
    The Chairman. All right. I thank the gentleman from 
Pennsylvania, and let me just underline a number of comments 
you made. I really believe that we are, as you noted, in a 
seminal moment in world history. You can look back at the 20th 
century and you can look at World War I and the Spanish Flu, 
you can look at the Depression and World War II, Vietnam War, 
and civil rights movement, but clearly, this time period that 
we are living in today, the last 4 and the next 4 years, 
historians will look back 25 years from now and they will make 
determinations. Did we make more good decisions than poor 
decisions? We are going to make both. Hopefully we will make 
more good decisions, and therein lies our challenge.
    So, the chair would request that other Members who wish to 
submit their opening statements for the record will do so and 
will be accepted, and let us begin with our witnesses and their 
testimony to ensure that we have ample time for questions.
    I am pleased to welcome two distinguished panels of our 
witnesses for our hearing today. Our witnesses bring a wide 
range of experience and expertise, and we want to thank you for 
joining us.
    Our first witness on our first panel today is Mr. Daniel 
Whitley who serves as the Administrator of Foreign Agricultural 
Service at the United States Department of Agriculture, and we 
thank you for taking the time this morning. I think you 
understand, as all the witnesses do here, the regular order. We 
have 5 minutes, although your testimony I think, is much more 
detailed and we appreciate that. You got the green light, then 
you got the yellow light, and then the red light. Nothing bad 
will happen, but we would like you to conclude.
    So, Mr. Whitley, thank you. Please begin your testimony.

        STATEMENT OF DANIEL B. WHITLEY, ADMINISTRATOR, 
 FOREIGN AGRICULTURAL SERVICE, U.S. DEPARTMENT OF AGRICULTURE, 
                        WASHINGTON, D.C.

    Mr. Whitley. Thank you, Mr. Chairman, Ranking Member 
Johnson, and Members of the Committee. I am pleased to appear 
before you today with my colleague from the U.S. Agency for 
International Development, Sarah Charles. I appreciate the 
opportunity to discuss the trade, market development, 
international food assistance, and capacity building programs 
and activities administered by USDA as authorized by the farm 
bill.
    As Administrator of the Foreign Agricultural Service, I 
want to thank the Subcommittee for your continued support for 
the work of the agency and the Department. As the farm bill 
process moves ahead, I look forward to working with you and 
offer the assistance of our staff and to help and support your 
efforts.
    Our prayers are with Ukrainian people as they deal with 
this unprovoked and unjustified attack, and we stand with the 
people of Ukraine during this tragic moment. Recently, 
Secretary Vilsack implored farmers to never take freedom for 
granted and highlighted the key role of farmers and ranchers in 
helping America prosper. Never have those words rung more true 
than today.
    FAS is USDA's lead international agency linking U.S. 
agriculture to the world to enhance export opportunities and 
global food security. FAS supports producers with a network of 
agricultural economists, marketing experts, negotiators, and 
trade specialists in Washington, D.C. and nearly 100 
international offices covering 180 countries. We are proud that 
our role in opening and maintaining markets has resulted in 
billions of dollars of additional U.S. agricultural exports for 
the benefit of American producers, and that the international 
food assistance programs and capacity-building activities 
administered by the FAS provide assistance that has helped 
millions of people worldwide.
    In addition to our farm bill authorized programs, FAS also 
expands and maintains access to foreign markets for U.S. 
agriculture products by removing trade barriers, helping to 
enforce U.S. rights under existing trade agreements, and 
negotiating new agreements that benefit agriculture.
    FAS works with foreign governments, international 
organizations, and the Office of the U.S. Trade Representative 
to establish international standards and rules to improve 
accountability and predictability for agricultural trade. We 
will continue to focus on maintaining and expanding access for 
U.S. agriculture exports through rebuilding trust with our 
partners and holding them accountable.
    Exports of U.S. farm and food products to the world totaled 
$177 billion in 2021, topping the 2020 total by 18 percent, and 
shattering the record set in 2014 of 14\1/2\ percent. For many 
agricultural products, foreign markets now represent more than 
\1/2\ of total sales. U.S. ag exports support more than one 
million jobs here at home, and contribute more than $154 
billion in additional economic activity.
    To continue these impressive gains, we cannot rest. We must 
not rest. We must continue to refine and improve our 
longstanding farm bill authorized programs to ensure that they 
operate efficiently, effectively, equitably, and sustainably. 
Over numerous farm bills Congress authorized and refined an 
effective combination of ag market development and export 
credit guarantee programs. These programs are designed to 
develop markets, facilitate financing of overseas sales, and 
resolve market access barriers, all of which are goals central 
to the FAS mission.
    The FAS partners with more than 70 cooperative groups 
representing a cross section of the U.S. food and agriculture 
industry, and manages a toolkit of farm bill authorized trade 
promotion programs to help U.S. exporters develop and maintain 
markets for all of our products.
    Included under the umbrella of the farm bill programs are 
the MAP Program, the TASC Program, the EMP Program, along with 
several others. A newly independent study prepared by some of 
our independent research organizations concluded the 
effectiveness and the benefits of these programs. The largest 
market development program operated by FAS is the Market Access 
Program. Through MAP, FAS partners with nonprofit U.S. 
agriculture trade organizations, U.S. agricultural 
cooperatives, nonprofit state and regional trade groups, and 
state agencies to share the cost of overseas marketing 
activities, such as consumer promotion, market research, and 
trade show participation.
    The 2018 Farm Bill makes available $200 million of CCC 
funds annually for MAP. Funding levels for MAP have showed the 
impressive gains that can be made for U.S. agriculture by using 
these programs.
    As I conclude, as Administrator of USDA's Foreign 
Agricultural Service, I am proud of our efforts to improve 
foreign market access to U.S. products, build new markets, 
improve the competitive position of U.S. ag in the global 
marketplace, and provide food aid and technical assistance to 
foreign countries. We have the opportunity to refine our 
programs when reauthorizing the farm bill Trade Title so that 
they make U.S. farm policy more efficient, equitable, and 
sustainable, while providing greater export opportunities to a 
vast range of markets for the benefit of U.S. farmers, 
ranchers, and other stakeholders.
    This concludes my statement. I look forward to answering 
any questions you may have, and working with you to reauthorize 
farm bill programs that will facilitate U.S. agriculture 
exports and maintain our commitment to providing technical and 
food assistance to those around the world in need.
    Thank you very much.
    [The prepared statement of Mr. Whitley follows:]

    Prepared Statement of Daniel B. Whitley, Administrator, Foreign 
 Agricultural Service, U.S. Department of Agriculture, Washington, D.C.
    Chairman Costa, Ranking Member Johnson, Members of the 
Subcommittee, I am pleased to appear before you with my colleague, 
Sarah Charles, Assistant to the Administrator, USAID Bureau of 
Humanitarian Assistance, U.S. Agency for International Development 
(USAID). I appreciate the opportunity to discuss the trade, market 
development, international food assistance, and capacity building 
programs and activities administered by the United States Department of 
Agriculture (USDA) as authorized by the Agriculture Improvement Act of 
2018 (2018 Farm Bill), the Food for Peace Act, the Agricultural Trade 
Act of 1978, and a host of other agricultural trade laws. As 
Administrator of the Foreign Agricultural Service (FAS), I want to 
thank the Subcommittee for your continued support for the work of the 
Agency and the Department. As the farm bill process moves ahead, I look 
forward to working with you and offer the assistance of our staff to 
help support your efforts.
    As Secretary Vilsack noted before this Committee in January, the 
COVID-19 pandemic has been incredibly difficult on Americans in urban, 
rural, suburban, and tribal communities. Despite this unprecedented 
adversity, the Biden-Harris Administration is working to better 
position our agriculture and rural communities to compete in the global 
economy. For our part, we are working every day to meet this challenge 
by creating more and better export market opportunities for our 
farmers, ranchers, and producers.
    Before I discuss our work to support trade and international food 
aid, I would like to start by sharing that our prayers are with the 
Ukrainian people as they deal with this latest unprovoked and 
unjustified attack by Russia. We stand with the people of Ukraine 
during this tragic moment for the world. For our part, USDA stands 
ready to step up. The Secretary is fully engaged on this issue 
alongside his G7 agriculture minister counterparts. He has empowered 
all of USDA to review the tools at our disposal to assist Ukraine. At 
the recent Commodity Classic, the Secretary implored farmers to never 
take freedom for granted and highlighted the fact that it is farmers 
and ranchers that helped America prosper. Never have those words rung 
true more than today.
Introduction
    The Foreign Agricultural Service (FAS) is USDA's lead international 
agency, linking U.S. agriculture to the world to enhance export 
opportunities and global food security. FAS supports producers through 
a network of agricultural economists, marketing experts, negotiators, 
and trade specialists in Washington, D.C. and nearly 100 international 
offices covering 180 countries. We are proud that our role in opening 
and maintaining markets has resulted in billions of dollars of 
additional U.S. agricultural exports for the benefit of American 
producers and that the international food assistance programs and 
capacity building activities administered by FAS provide assistance 
that has helped millions of people worldwide.
    The efforts of FAS employees, both in Washington and around the 
globe, combined with 2018 Farm Bill authorized market promotion 
programs, and in collaboration with the U.S. agricultural community, 
have contributed to some of the strongest agricultural export numbers 
on record. Exports of U.S. farm and food products to the world totaled 
$177 billion in 2021, topping the 2020 total by 18 percent and 
eclipsing the previous record, set in 2014, by 14.6 percent. For many 
American agricultural products, foreign markets now represent more than 
half of total sales. U.S. agricultural exports support more than one 
million jobs here at home and contribute more than $154 billion in 
additional economic activity. Nonetheless, in order to continue these 
impressive gains, we cannot rest. We must continue to refine and 
improve our longstanding farm bill authorized programs to ensure that 
they operate efficiently, effectively, equitably, and sustainably.
Trade Policy \1\
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    FAS expands and maintains access to foreign markets for U.S. 
agricultural products by removing trade barriers and enforcing U.S. 
rights under existing trade agreements. FAS works with foreign 
governments, international organizations, and the Office of the U.S. 
Trade Representative (USTR) to improve accountability and 
predictability for agricultural trade. We will continue to focus on 
maintaining and expanding access to export markets for American 
producers through rebuilding trust with our partners and also holding 
them accountable.
    The People's Republic of China (PRC), Mexico, and Canada continue 
leading as the top importers of U.S. agricultural products with record 
high values at $33 billion, $25.5 billion, and $25.0 billion in 
calendar year 2021 respectively (up 25 percent, 39 percent, and 12 
percent from 2020).
    With a population of 1.4 billion and a middle class the size of the 
entire United States, the PRC is the largest market for U.S. 
agricultural exports. Following the 2018-2019 trade war with China, the 
Phase One Agreement provided some relief, allowing American agriculture 
to prove once again how effectively it could compete with a more level 
playing field. As a result of the Agreement and growing import demand, 
the United States continues to have strong, record high exports to the 
PRC of corn, wheat, beef, and poultry. The Phase One Agreement 
addressed a number of non-tariff measures affecting U.S. agricultural 
exports. However, we still face a number of barriers in that market, 
and the U.S. Government is engaging the PRC on next steps. While it is 
incredibly difficult to manage all the complexities of our relationship 
with the PRC, we recognize the importance of this market and will 
continue to represent and advocate for U.S. agriculture. At the same 
time, we are aggressively diversifying our global portfolio of export 
markets for U.S. agricultural products to other promising markets.
    Canada and Mexico are two of the top three largest export markets 
for U.S. agricultural exports, accounting for a combined $51 billion in 
2021, up $10 billion from 2020. While our closest neighbors are among 
our largest trading partners and benefit nearly every segment of 
American agriculture, these relationships are not without challenges. 
USDA is working diligently with our Mexican counterparts to ensure 
expanded market access for U.S. fresh potatoes. USDA, in close 
coordination with USTR and industry, is pressing Mexico at every level 
to ensure they live up to commitments made by their regulator to USDA 
and this longstanding issue is soon resolved. We are also monitoring 
Mexico's treatment of biotechnology products very closely and pressing 
Mexico to maintain a transparent, science- and risk-based regulatory 
approval process. With respect to our northern neighbor, the recent 
decision by the USMCA dispute settlement panel on Canada's allocation 
of dairy tariff rate quotas is an important step for the U.S. dairy 
sector to realize the full benefits of the USMCA. We will continue to 
press for the full, fair, and timely access for U.S. dairy exports to 
Canada that the United States secured in the USMCA negotiations and 
hold Canada accountable to the commitments made in the USMCA.
    In addition to mature and traditional markets, USDA is also paying 
attention to opportunities in the Indo-Pacific region. President Biden 
announced in October 2021 that the U.S. is developing an Indo-Pacific 
Economic Framework with regional allies to deepen economic 
relationships in the region and coordinate approaches on addressing 
global economic challenges such as ensuring fair and resilient trade, 
insufficient or deteriorating infrastructure, and supporting clean 
energy. Although it's not a traditional trade agreement, the Framework 
is the beginning of a process that could bring increased opportunities 
for U.S. agriculture. We have been interested in this region for some 
time so we welcome the opportunities an enhanced focus on this region 
could bring for U.S. agriculture and market diversification efforts. In 
2021, 16 of the 25 largest U.S. agricultural export markets were in the 
Asia-Pacific region, including fast growing markets in Southeast Asia. 
USDA is turning senior level attention to this region and will continue 
to consult with USTR on what agricultural trade barriers, other than 
tariffs, we could seek to address in the Framework and how we can 
advance U.S. exports to this important region.
    Africa remains a continent of untapped potential for U.S. 
agricultural exports. In 2021, only one African country (Egypt) was in 
the United States' top 25 agricultural export markets, and only two 
additional countries (Nigeria and Morocco) were in the United States' 
top 50 agricultural export markets--but we expect this to change 
significantly in the future. U.S. agricultural exports to Africa 
totaled close to $5.6 billion in 2021, with soybeans, wheat, and 
poultry meat and products as the top three products. A key development 
for trade across Africa is the 2019 ratification of the African 
Continental Free Trade Area (AfCFTA) that aims to create a continental 
market for goods and services with a harmonized trade facilitation 
regime. AfCFTA will be one of the largest trading blocs in the world 
once trade negotiations conclude over the next couple of years and the 
AfCFTA is fully implemented. USDA shares many of AfCFTA's objectives, 
including lowering barriers and diversifying trade. In these ways, the 
AfCFTA presents a long-term positive opportunity for U.S. exporters 
seeking to gain market access in Africa.
Market Development and Export Assistance
    Over numerous farm bills, Congress authorized and refined an 
effective combination of agricultural market development and export 
credit guarantee programs. These programs are designed to develop 
markets, facilitate financing of overseas sales, and resolve market 
access barriers--all of which are goals central to the FAS mission. We 
must open, expand, and maintain access to foreign markets, given 95 
percent of the world's consumers live outside the United States. FAS 
partners with more than 70 cooperator groups representing a cross-
section of the U.S. food and agricultural industry and manages a 
toolkit of farm bill-authorized trade promotion programs to help U.S. 
exporters develop and maintain markets for hundreds of agricultural 
products. FAS also supports U.S. agricultural exporters through export 
credit guarantee programs and other types of assistance. Included under 
the umbrella of the Agricultural Trade Promotion and Facilitation 
Program as provided in the 2018 Farm Bill are the Market Access Program 
(MAP), Foreign Market Development Cooperator Program (FMD), Technical 
Assistance for Specialty Crops (TASC), and the Emerging Markets Program 
(EMP). These programs, in conjunction with participation at USDA-
sponsored international trade shows and Agribusiness Trade Missions, 
not only assist U.S. agricultural producers market commodities 
overseas, but bolster their overseas in-country presence, helping make 
sales and build demand for U.S. products. Applicants to the FAS market 
development programs submit their applications through the Unified 
Export Strategy database system (UES). The UES allows applicants to 
submit and manage holistic marketing plans that outline their proposed 
foreign market development strategies and request funding under each of 
the FAS market development programs, facilitating input of strategic 
and tactical planning and financial information into a single, 
coordinated system.
Market Access Program (MAP)
    The largest market development program operated by FAS is the 
Market Access Program (MAP). Through MAP, FAS partners with nonprofit 
U.S. agricultural trade organizations, U.S. agricultural cooperatives, 
nonprofit State Regional Trade Groups, and state agencies to share the 
costs of overseas marketing activities, such as consumer promotion, 
market research, and trade show participation. The 2018 Farm Bill 
maintained the available $200 million of Commodity Credit Corporation 
(CCC) funds annually for MAP. Funding levels for MAP have not increased 
in over a decade. That amount is more than matched with industry 
contributions to aid in the creation, expansion, and maintenance of 
foreign markets for hundreds of U.S. agricultural products. A range of 
U.S. commodities, from California prunes and almonds to South Dakota 
beef and soybeans, to Georgia poultry and cotton, dairy and timber from 
the Northeast, and apples and pears from the Pacific Northwest, all 
benefit from MAP. In FY 2022 MAP provided funding to 73 U.S. 
agricultural trade associations, State Regional Trade Groups, state 
agencies, and agricultural cooperatives. For perspective, the EU 
Central Fund, Common Market Organization investment, and individual 
investments of the Governments of Italy, France, Germany, and Spain, 
combined are estimated to be more than double the combined funding of 
MAP and FMD. A 2017 competitor study, led by the Wine Institute and MAP 
funding, determined the EU increased its investment in agricultural 
export promotion to $443 million and forecasted its investment would 
increase to $555 million in 2019. This study is currently being updated 
by the USA Poultry and Egg Export Council using MAP funds and is 
expected to be completed later in 2022.
    A few MAP examples I would like to highlight for you today include 
the California Table Grape Commission, which has used MAP to support 
in-store sampling, point-of-purchase materials, themed promotions, 
mascots, and retail promotional displays in Mexico that drew in 
customers and helped California table grape exports reach a record 
$116.5 million in Mexico in 2020. In addition, the California Walnut 
Commission used MAP funds to support an online consumer campaign in 
Germany demonstrating how walnuts are the ideal ingredient in home 
bread-making, and we saw a nearly 70,000 MT of exports to Germany 
(valued at nearly $224 million) in September 2019 through August 2020, 
up 46 percent from the previous year.
Foreign Market Development Cooperator Program (FMD)
    The Foreign Market Development Cooperator Program (FMD) is another 
FAS-administered market development program reauthorized by Congress in 
the 2018 Farm Bill. FMD is a cost-share program that aids in the 
creation, expansion, and maintenance of long-term export markets for 
U.S. agricultural products. The 2018 Farm Bill maintained the annual 
funding level for FMD at $34.5 million in CCC funds. The program 
fosters a market development partnership between FAS and U.S. 
agricultural producers and processors who are represented by nonprofit 
commodity or trade associations known as cooperators. Under this 
partnership, FAS and each cooperator pool their technical and financial 
resources to conduct overseas market development activities. FMD-funded 
projects generally address long-term opportunities to reduce foreign 
import barriers or expand export growth opportunities. For example, FMD 
supported projects might include efforts to reduce infrastructure or 
historical market impediments, improve processing capabilities, modify 
codes and standards, or identify new markets or new uses for the 
agricultural commodity or product. In FY 2022 FMD provided funding to 
25 U.S. agricultural trade associations.
    As a particular example, thanks to FMD funding, U.S. Wheat 
Associates can maintain experienced technical staff to serve customers 
in Indonesia and around the world. Technical assistance and trade 
servicing are critical to U.S. Wheat's marketing strategy, 
demonstrating how customers can meet their product needs economically 
by blending various U.S. wheat varieties. This technical support also 
helps to resolve potential market disruptions like mitigating a 
potential trade disruption in Indonesia due to fungal spores. Technical 
support provided the mill with confidence to manage the situation and 
prevented disruption in U.S. wheat exports that reach over 1 MMT 
annually.
Technical Assistance for Specialty Crops (TASC) Program
    U.S. exports of specialty crops reached $22.5 billion in fiscal 
year (FY) 2020, accounting for 15 percent of total U.S. agricultural 
exports. Tree nuts represented more than \1/3\ of FY 2020 specialty 
crop exports. Other specialty crops like fruits, vegetables, dried 
fruits, horticultural crops, wine, and nursery crops are increasing in 
export value. Despite these increases, trade barriers such as 
burdensome requirements related to pre-export plant health inspections, 
low or missing pesticide maximum residue levels, labeling, or quality 
certification may discourage some U.S. specialty crop producers from 
shipping products overseas.
    Utilizing the Technical Assistance for Specialty Crops (TASC) 
program, USDA is committed to assisting U.S. agricultural stakeholders 
to overcome trade barriers that deter U.S. specialty crop exporters and 
help them compete in the global marketplace. First authorized in the 
2002 Farm Bill, FAS administers the current TASC program to fund 
projects that address existing and potential SPS and technical barriers 
to trade that may affect U.S. specialty crop exports. TASC activities 
must benefit the industry at large rather than a specific company, and 
applicants must provide a clear strategy for overcoming trade barriers 
and market access issues. In line with the changes to the program made 
in the 2018 Farm Bill, TASC awards are generally granted for a project 
period not exceeding 5 years, with the opportunity for an extension 
based on a determination of the effectiveness of continued funding.
    For example, a TASC grant for the Almond Alliance of California 
(AAC) is helping establish new export markets for whole almond hulls in 
Asia, including China and Korea. Almond hulls are a commercially 
established feed ingredient in California, with growing supply and hold 
potential for feed use in Asia's dairy sector, increasing feedstuff 
options and reducing feeding costs. In another project, TASC funding 
helped the California Table Grape Commission monitor and report on non-
precleared product shipments to Australia. Without this funding, 
California table grape shippers would have had to gather information on 
an individual basis which would have been difficult for small- to mid-
size shippers. This reporting, funded by TASC, helped improve the on-
arrival process, minimize problems during the shipping season, and 
allowed for broad distribution of actionable information to California 
table grape shippers exporting to the Australian market.
Emerging Markets Program (EMP)
    EMP provides grants to eligible U.S. private or government entities 
to conduct assessments of the food and rural business system needs of 
emerging markets, make recommendations on how to enhance the 
effectiveness of such systems, including potential reductions in trade 
barriers, and conduct technical assistance to enhance the effectiveness 
of such systems. For this program, emerging markets are defined as any 
country, foreign territory, customs union or other economic market that 
``is taking steps toward a market-oriented economy through the food, 
agriculture, or rural business sectors of its economy,'' and ``has the 
potential to provide a viable and significant market for United States 
agricultural commodities.'' Private, Federal, and state organizations 
are eligible to participate in EMP. For Fiscal Year 2021, the EMP 
program supported 26 agricultural export promotion projects with 
funding totaling $3.74 million.
    A great example of EMP work is a 2021 Cranberry Marketing Committee 
project that implemented a multifaceted culinary training program for 
more than 900 students across India to familiarize these young culinary 
professionals with U.S. cranberries. The training sessions concluded 
with a competition in which the students were asked to prepare their 
own unique dish using U.S. cranberries, and the dishes were judged by 
an expert panel of chefs. In a post-training survey, 97 percent of the 
participating students indicated that the training heightened their 
awareness of U.S. cranberries, with nearly 88 percent stating that they 
would use U.S. cranberries in future recipes. Moreover, three of the 
five participating institutes plan to continue U.S. cranberry education 
in the years to come, helping to establish U.S. cranberries' presence 
within India's expansive and growing foodservice sector and leading to 
increased export opportunities for the entire U.S. cranberry industry.
Export Credit Guarantee Program (GSM-102)
    The GSM-102 program increases sales of U.S. agricultural 
commodities to international markets by facilitating the extension of 
needed trade financing. Over 130 countries--mainly developing countries 
and emerging markets in Latin America, Asia, and Africa and the Middle 
East--are targeted destinations under the program. In 2021, the GSM-102 
program supported $2.1 billion in U.S. agricultural commodity exports, 
including exports of corn, soybeans, soybean meal, wheat, rice, cotton, 
and other commodities. Significant export markets included Mexico, 
Colombia, Honduras, Guatemala, South Korea, and Egypt.
    Accomplishments for 2021 include bringing Bangladesh in as a new 
entrant to the program, which resulted in the export of more than $6 
million in sales of U.S. cotton and $22 million in sales of U.S. 
soybeans to that market. USDA now has five Bangladeshi banks 
participating in the GSM-102 program.
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    FAS's network of global contacts and long-standing relationships 
with international groups contribute to the Agency's unique market 
intelligence capacity. FAS analysts provide objective intelligence on 
foreign market conditions, prepare production forecasts, assess export 
opportunities, and track changes in policies affecting U.S. 
agricultural exports and imports and support U.S. foreign policy around 
the globe. The Agency is trusted by U.S. decision-makers and entities 
worldwide to provide relevant, sound, and reliable information related 
to foreign agricultural markets, international trade barriers, crop 
conditions, and related policy developments. Through market analysis in 
Washington and reporting from FAS overseas offices on foreign 
production and demand, FAS contributes to the USDA economic information 
system establishing official estimates of world agricultural supply and 
demand that drives trading on commodity markets worldwide. FAS 
maintains key public-facing databases to provide convenient access and 
up-to-date international market information to inform strategy and 
business decisions. Collecting and communicating market information is 
invaluable for U.S. exporters, as it provides a level playing field for 
U.S. organizations working abroad and supports these organizations in 
identifying new market opportunities. Through our Global Ag Information 
Network (GAIN) this type of information is gathered and reported by our 
70 posts overseas and published on the FAS website. In 2021, we 
published over 3,000 reports that were viewed 2.6 million times.
    FAS information helps producers and others make informed decisions 
during fluid and challenging situations by providing data and analysis 
to make sense of complex global commodity fluctuations, such as those 
we are currently seeing in the wake of the Russian invasion of Ukraine.
Food Security and Capacity Building \3\
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    In addition to the important work FAS does to promote U.S. exports 
and build trade capacity for American agriculture, FAS also leads 
USDA's efforts to help developing countries improve their agricultural 
systems and build their trade capacity to receive our exports or send 
us products the U.S. needs to meet consumer demand. From selecting 
countries and priorities to reviewing proposals, monitoring agreements, 
evaluating project performance, and reporting progress, USDA's food 
assistance staff coordinate with colleagues across the Department and 
the U.S. Government, particularly USAID, as well as with donors, 
stakeholders, and recipients to enhance global food security. 
Collaboration with our interagency partners does not occur just in 
Washington--our programs benefit from collaborating with FAS Attaches 
in our embassies around the world and with foreign officials and 
stakeholders.
    USDA administers three international food assistance programs 
authorized by the farm bill. These include the McGovern-Dole 
International Food for Education and Child Nutrition Program (McGovern-
Dole); the Food for Progress Program (FFPr); and the USDA Local and 
Regional Food Aid Procurement Program (USDA LRP). USDA also manages the 
Bill Emerson Humanitarian Trust (BEHT), which serves as a backstop 
reserve of funds for the USAID-administered Food for Peace Title II 
program if the USAID Administrator determines that funds available for 
emergency needs under Title II for a fiscal year are insufficient to 
meet emergency needs during the fiscal year. These programs support 
international assistance and development activities that alleviate 
hunger and improve nutrition, education, and agriculture in some of the 
world's poorest countries. FAS's non-emergency food assistance programs 
help meet recipients' nutritional needs and support agricultural 
development and education.
McGovern-Dole
    This year the McGovern-Dole Program will celebrate its 20th 
anniversary, which is a significant achievement and a testament to the 
value of the program. USDA is proud to administer the McGovern-Dole 
Program and continue the legacy of its two great champions of U.S. 
agriculture and international food assistance--the late George McGovern 
and Robert Dole. Since its inception in the 2002 Farm Bill, the 
McGovern-Dole Program has helped feed and educate more than 31.1 
million children in more than 48 countries. Over the past 20 years, the 
McGovern-Dole Program has grown in size and scope to support quality 
school meals around the world. Through the McGovern-Dole Program, USDA 
has worked to build the capacity of host governments and communities to 
transition McGovern-Dole supported schools to their national school 
meals programs. For example, USDA had been supporting school feeding in 
Kenya through McGovern-Dole since 2004, and, in June 2018, the 
remaining balance of McGovern-Dole commodities was completely handed 
over to the Government of Kenya's National School Meals Program, thus 
formalizing the graduation of school feeding activities entirely to the 
Government of Kenya. In November 2021, despite the challenges of the 
COVID-19 pandemic, USDA celebrated the handover of school feeding 
activities in 915 primary schools in Laos that had been supported by 
McGovern-Dole since 2008 to the Government of Laos' National School 
Meals Program.
    McGovern-Dole uses commodities grown by American farmers to enhance 
food security; improve literacy (especially for girls); and strengthen 
the nutrition, health, and dietary practices of school-aged children, 
mothers, and families. McGovern-Dole awards to fund projects are made 
annually to implementing partners--private voluntary organizations 
(PVOs) and international organizations like the World Food Programme. 
Following an objective proposal review process, USDA selects and funds 
the strongest proposals based on rigorous criteria, including 
demonstrated experience, ambitious goals and outcomes, established 
capacity to coordinate with U.S. Government agencies and local 
governments, detailed commodity distribution plans, and thorough 
graduation and sustainability plans. School meals are made possible 
through a combination of U.S. donated food commodities, some food 
commodities procured locally or regionally, and technical assistance 
provided by qualified entities to help each project achieve success. In 
countries where McGovern-Dole projects are implemented, USDA works to 
assure that host country governments contribute to school feeding in 
many ways and from a variety of levels, from local to national. 
Frequent contributions include internal transportation of commodities, 
provision of land for project infrastructure, construction materials, 
in-kind labor, food accompaniments, and more.
    In FY 2021, USDA funded ten McGovern-Dole proposals for new 
projects valued at $248 million in Benin, Burkina Faso, Guatemala, 
Kyrgyzstan, Laos, Liberia, Madagascar, Republic of Congo, Senegal, and 
Sierra Leone. A total of 46,770 metric tons (MT) of donated U.S. 
commodities will be provided over the term of these 4 to 5 year 
projects. In addition, USDA awarded $20 million in prior year McGovern-
Dole funding to strengthen and expand three active agreements in 
Guatemala and Honduras in alignment with Administration priorities on 
addressing the root causes of out-migration in Central America. 
Including the ten new projects funded in FY 2021, McGovern-Dole now has 
a total of 55 active projects in 31 countries valued at close to $1 
billion across the life of the projects.
    In FY 2021 alone, McGovern-Dole projects:

   directly benefited more than 4.5 million children and 
        community members;

   fed nutritious school meals to over 2.1 million food-
        insecure children;

   distributed take home rations to over 2.1 million children 
        and community members during the global COVID-19 pandemic;

   trained over 11,200 Parent Teacher Associations in how to 
        champion education in their communities;

   educated over 10,800 teachers, helping them to work to 
        improve instruction and literacy;

   rehabilitated or constructed more than 5,100 facilities, 
        including latrines, kitchens, handwashing stations, storerooms, 
        and classrooms; and

   worked in over 14,400 schools to enhance the quality of 
        education that children receive.

    The 2018 Farm Bill provided that USDA shall use not more than ten 
percent of the funds made available for McGovern-Dole for the 
procurement of local and regional agricultural commodities. The FY 2021 
agricultural appropriations act provided that not less than $23,000,000 
will remain available until expended for the local and regional 
procurement of agricultural commodities under McGovern-Dole. For FY 
2021, each of the ten awards includes a local and regional commodity 
procurement component. The integration of the local and regional 
procurement component into McGovern-Dole is a welcome addition that 
allows project implementers to improve the dietary diversity of school-
age children through including more fresh fruits, vegetables and animal 
protein into the daily school meal, and strengthens the capacity of 
local and regional farmers, cooperatives, processors, and 
agribusinesses to provide high-quality commodities in support of 
sustainable school meal programs.
Food for Progress
    The Food for Progress Program (FFPr) was authorized by the U.S. 
Congress in the Food Security Act of 1985. FFPr has two principal 
objectives: to improve agricultural productivity in developing 
countries and emerging democracies and to expand trade in agricultural 
products. It may receive funding through either Food for Peace Title I 
appropriations or CCC financing. The FFPr statute provides that no more 
than $40 million of CCC funds may be used annually for non-commodity 
costs such as freight costs, which limits the amount of shipped 
commodities, particularly in years with high shipping costs. Donated 
U.S. agricultural commodities are shipped to recipient countries and 
sold on the local market in a process referred to as monetization. USDA 
enters into cooperative agreements with eligible organizations to use 
the proceeds to implement field-based projects generally to support 
agricultural, economic, or infrastructure development projects and 
programs can also be targeted at hunger and malnutrition. FFPr projects 
have trained farmers in animal and plant health, improved farming 
methods, developed road and utility systems, established producer 
cooperatives, provided microcredit, and developed agricultural value 
chains. FFPr project implementers have included PVOs, foreign 
governments, universities, and intergovernmental organizations.
    In FY 2021, a total of 22 sales of donated U.S. commodities, 
organized into 19 shipments, were made by project implementers to 
buyers in 18 countries. The commodities included crude degummed soybean 
oil, milled rice, soybean meal, yellow soybeans, hard red winter wheat, 
and dark northern spring wheat. A total of 440,890 MT of U.S. 
commodities with a commercial value of nearly $210.52 million was 
donated in FY 2021, representing the highest totals for tonnage and 
value in more than a decade. During FY 2021, activities conducted by 
active projects reached more than 370,000 direct participants. As a 
result of FFPr project activities, more than 199,000 individuals 
applied improved agricultural management practices or technologies to 
over 569,000 hectares of land. Access to working capital and credit are 
other significant components in expanding participation in agricultural 
sectors in emerging markets, and last year FFPr project activities 
resulted in access to more than $84 million of financing for farmers 
and cooperatives.
    For example, the Food for Progress Malawi project completed in 
2021, implemented by Land O'Lakes Venture37 and valued at $15 million, 
assisted over 39,000 farmers. Under this project, small-holder 
producers received assistance in organizing cooperative farmer-based 
organizations to assist them in selling their produce. The project's 
interventions have helped horticultural producers and processors be 
more competitive in both local and regional markets, leading to over 
$18.4 million in sales and trade of over 63,000 metric tons of 
horticultural produce. Additionally, during the life of the project, 
10,377 loans valued at $699,879 were disbursed.
Local and Regional Food Aid Procurement Program (USDA LRP)
    First authorized as a permanent program in the 2014 Farm Bill, USDA 
LRP was designed to provide a complementary mechanism for delivering 
international food assistance. In accordance with Congressional intent, 
preference for funding under USDA LRP has been given to entities 
implementing active projects under McGovern-Dole. As part of the 2018 
Farm Bill, Congress authorized a new local and regional procurement 
component within McGovern-Dole. Thus, USDA LRP has not received 
appropriated funds since FY19 and local and regional procurement is now 
conducted directly through McGovern-Dole authority. The objectives of 
local and regional procurement include strengthening the ability of 
local and regional farmers, community farmer groups, farmer 
cooperatives and associations, processors, and agribusinesses to 
provide high-quality commodities. Local and regional procurement can 
enhance organizations' abilities to procure such commodities in support 
of school feeding programs, provide technical and management expertise, 
and, in coordination with USAID, help expedite provision of safe and 
quality foods to populations affected by food crises and disasters. 
Last funded in FY 2019 before the local and regional procurement 
component was folded into McGovern-Dole, the USDA LRP Program funded 
three projects to support McGovern-Dole activities in Burkina-Faso, 
Cambodia, and Nicaragua. USDA LRP was used to purchase local 
commodities such as fruits and vegetables, increase the acceptability 
and palatability of nutritious meals, strengthen supply chains, and 
boost local support for sustainability, as well as strengthen the 
ability of local host governments to take ownership of McGovern-Dole 
projects. During FY 2021, USDA had seven continuing USDA LRP agreements 
with project implementers in seven countries, including two agreements 
in which all project activities were concluded. The total number of 
beneficiaries reached by all seven active USDA LRP projects in FY 2021 
was 139,431.
Fellowship Programs and Capacity Building
    USDA invests in the future of developing countries by helping them 
strengthen their agricultural institutions and regulatory systems, 
encouraging compliance with international norms and fostering an 
environment conducive to agricultural growth. Before developing 
countries can become customers for U.S. agricultural products, they 
must first become politically, economically, and socially stable. The 
lack of economic development, particularly in fragile and strategic 
countries and regions, results in economic and political instability 
which can pose a national security threat to the United States. FAS-
sponsored fellowship programs and exchanges enable international 
researchers, policymakers, and agricultural specialists to work 
alongside their U.S. counterparts, acquiring knowledge and skills to 
help build their countries' agricultural sectors. FAS administers three 
Congressionally authorized fellowship programs: the Borlaug 
International Agricultural Science and Technology Fellowship Program 
(Borlaug); the Cochran Fellowship Program (Cochran); and the 
International Agricultural Education Fellowship Program (IAEFP).
    The namesake of Nobel Laureate Dr. Norman E. Borlaug, the Borlaug 
program promotes agricultural productivity, food security, trade, and 
economic growth by providing training and collaborative research 
opportunities to early and mid-career scientists, researchers, or 
policymakers from developing and middle-income countries. Since the 
program's inception in the 2008 Farm Bill, USDA has supported more than 
920 Borlaug Fellows from 69 countries. Cochran operates in middle-
income and emerging market countries, providing training opportunities 
in the U.S. for senior and mid-level specialists and administrators 
working in agricultural trade and policy; agribusiness development; 
management; animal, plant, and food sciences; extension services; 
agricultural marketing; and many other areas representing the public- 
and private-sectors of interest to agriculture. Since 1984, Cochran has 
provided training for over 19,000 international Fellows from 127 
countries worldwide. Opportunities to host Cochran Fellows are 
circulated through the U.S. Land-Grant University System, USDA, other 
Federal Government agencies, the U.S. Agricultural Export Development 
Council, U.S. private agribusinesses, and agricultural consultants. The 
IAEFP was authorized under the 2018 Farm Bill to provide fellowships to 
eligible U.S. citizens to assist developing countries in establishing 
school-based agricultural education and youth extension programs. The 
program was created to (1) develop globally minded United States 
agriculturists with experience living abroad; (2) help meet the food 
and fiber needs of the domestic population of eligible countries; and 
(3) strengthen and enhance trade linkages between eligible countries 
and the United States agricultural industry. Congress appropriated $1 
million in FY20 for the inaugural IAEFP program and an additional $1 
million in FY21 and FY22. FAS awarded FY20 funds to Texas A&M 
University and Catholic Relief Services for programming in Ghana and 
Uganda, respectively. Due to the ongoing global pandemic, selected 
fellows were restricted from traveling, thus their fellowships were 
delayed. However, in early fall 2021, nine fellows arrived in Ghana and 
have been busy in their host communities providing technical advice on 
improving agricultural production, increasing knowledge of the 
importance of robust agricultural extension programs, and sharing their 
experiences with youth-based agricultural organizations, such as 4-H. 
Later this spring, an additional nine fellows are expected to arrive in 
Uganda to begin their fellowships.
Conclusion
    As Administrator of USDA's Foreign Agricultural Service, I am proud 
of our efforts to improve foreign market access for U.S. products, 
build new markets, improve the competitive position of U.S. agriculture 
in the global marketplace, and provide food aid and technical 
assistance to foreign countries. I believe Congress has an important 
opportunity to refine these trade programs when reauthorizing the next 
farm bill so that they make U.S. farm policy more efficient, effective, 
equitable, and sustainable while providing greater export opportunities 
to a vaster range of markets for the benefit of U.S. farmers, ranchers, 
and other stakeholders.
    As the situation continues to unfold in Eastern Europe, it is clear 
that maintaining trading relationships globally will help benefit all 
nations at a time that food security is in question for many. Trading 
means sharing. And sharing will help all countries and all regions of 
the globe get through these difficult times successfully. We stand with 
the people of Ukraine during this tragic moment for the world. For our 
part, USDA stands ready to step up and assist and to help facilitate 
the global relationships and the partnerships that will be absolutely 
vital going forward.
    This concludes my statement. I look forward to answering any 
questions you may have and working with you to reauthorize farm bill 
programs that will facilitate U.S. agricultural exports and maintain 
our commitment to providing technical and food assistance to those 
around the world in need. Thank you.

    The Chairman. Thank you, Administrator Whitley, for those 
good words and your testimony. I will make sure to put in some 
good points to the Secretary on your behalf. Thank you.
    Our next witness on the panel is Sarah Charles. Sarah 
Charles serves as the Assistant to the Administrator at the 
Bureau of Humanitarian Assistance at the United States Agency 
of International Development, and it directly relates to the 
comments that we have already heard this morning by a number of 
us as to the potential challenges that we are facing this year, 
and I believe into next year, as it relates to the potential 
humanitarian crisis for food that many of us fear is going to 
only heighten as a result of the factors that we are dealing 
with.
    So, Ms. Charles, please begin your testimony.

         STATEMENT OF SARAH CHARLES, ASSISTANT TO THE 
            ADMINISTRATOR, BUREAU FOR HUMANITARIAN 
           ASSISTANCE, U.S. AGENCY FOR INTERNATIONAL 
                 DEVELOPMENT, WASHINGTON, D.C.

    Ms. Charles. Thank you. Chairman Costa, Ranking Member 
Johnson, distinguished Members of the Subcommittee, thank you 
for the opportunity to discuss the U.S. Agency for 
International Development's food assistance programs, and thank 
you to Administrator Whitley for being with me here today.
    Most importantly, thank you for your collective commitment 
to help alleviate hunger and improve food security throughout 
the world. Your support has helped us reach the most vulnerable 
in times of need, and helped communities around the world build 
resilience in the face of multiple shocks. And as you both 
alluded to, it is also a strong demonstration of U.S. 
leadership and shared values throughout the world.
    USAID's food assistance programs are more important than 
ever. Global food insecurity levels continue to break records 
due to the confluence of conflict, climate impacts, and the 
economic impacts of the ongoing COVID-19 pandemic. At the 
beginning of 2022, the United Nations estimated there were 274 
million people in need of assistance, a 60 percent increase 
over 2020, and this was before Russia's unprovoked invasion of 
Ukraine.
    Russia's invasion has caused intense suffering and 
displacement in Ukraine and in the region, and it is already 
impacting food security around the world. As a result of the 
war, we could face another 10 to 20 percent rise in commodity 
prices due to supply chain disruptions and export restrictions.
    In the Yemeni city of Aden, the price of a piece of bread 
increased by 62 percent in less than 1 week after the start of 
the war. In Lebanon, domestic food price inflation has now 
climbed to a record 483 percent. We are extremely grateful to 
Congress for the generous funding provided to USAID through the 
omnibus, including the supplemental funding to address rising 
needs caused by Russia's war. We are already using those funds 
to provide relief to those both inside and outside of Ukraine 
impacted by the war.
    And in response to the rising global food insecurity, 
exacerbated by the war on Ukraine, and its impact on global 
food supplies, USAID and USDA are in very active dialogue to 
determine the specifics that would go into drawing down funding 
from the Bill Emerson Humanitarian Trust. We are considering 
all factors, including commodities and countries that could 
benefit from these U.S. food commodities, with the intent to 
bolster existing emergency food operations in countries acutely 
impacted by this crisis.
    I am also pleased to announce today that USAID is providing 
an additional $114 million to the people of Ethiopia, Kenya, 
and Somalia, who are grappling with the worst drought the 
region has seen in 4 decades. The funding will be used to 
provide food and specialized nutrition assistance for 
malnourished children and mothers, medical supplies, and clean 
water to those in need.
    Unfortunately, the reality is that while the number of 
people in need is growing, the number of people we can reach 
with the same amount of funding is decreasing. Rising 
transportation and food prices have cut USAID's purchasing 
power. Even prior to Russia's war on Ukraine, our purchasing 
power for food commodities had already dropped 11.4 percent in 
just 1 year. This equates to feeding ten million fewer people 
in the coming year with the same amount of funding. We must 
look for efficiencies to help save as many lives as possible.
    Given the scale of global food insecurity and the dynamic 
nature of its causes, it is imperative that we are able to 
fully optimize our programs to be able to employ best 
approaches for each context in the future. The reauthorization 
of the farm bill at this time of global crisis provides a 
critical opportunity for Congress to ensure that the U.S. 
Government has the most effective tools at its disposal to meet 
the humanitarian challenges of the day. Technical fixes in the 
2018 Farm Bill, like the elimination of monetization 
requirements, allowing community development funds to count 
towards the $365 million annual non-emergency floor, and 
adjusting cost categories to provide more flexibility have had 
a positive impact on USAID's food assistance programs over the 
last 4 years. But more could be done to ensure that Title II 
assistance remains fit for purpose in the face of global food 
insecurity and increased costs.
    To help keep this program viable in the years ahead, there 
are three technical fixes that could be pursued as part of the 
2023 Farm Bill. First would be increasing the cap on section 
202(e) resources to provide USAID with the flexibility to 
support both increasingly expensive emergency logistics, and 
quality non-emergency program design at the same time. Second, 
we could expand the Food for Peace Act to allow IDA in Title II 
funding and the same award to cut down on paperwork and improve 
efficiency of taxpayer dollars. And third, we could establish a 
single associated cost category to eliminate some of the 
barriers to entry for new small or local organizations.
    U.S. leadership has never been more critical in the face of 
staggering levels of food insecurity. Optimizing our food 
assistance programs saves lives. We look forward to working 
with the Committee ahead of the upcoming farm bill 
reauthorization to assure we can effectively respond to crises, 
built resilience among communities, and ensure that taxpayer 
dollars alleviate hunger and improve food security around the 
world.
    I look forward to your questions.
    [The prepared statement of Ms. Charles follows:]

 Prepared Statement of Sarah Charles, Assistant to the Administrator, 
   Bureau for Humanitarian Assistance, U.S. Agency for International 
                     Development, Washington, D.C.
Introduction
    Chairman Costa, Ranking Member Johnson, distinguished Members of 
the Subcommittee, thank you for the opportunity to discuss the U.S. 
Agency for International Development's (USAID) food assistance 
programming with you today. I also want to thank the Committee for its 
commitment to maintaining U.S. global leadership in international food 
assistance. Your support for establishing more flexibility within 
international food assistance programs has helped USAID to reach the 
most vulnerable in times of need and build resilience in communities 
around the world.
    USAID's food assistance programs are more important now than ever, 
as global food insecurity continues to break record after record due to 
a confluence of conflict, climate change, the second order economic 
impacts of the ongoing COVID-19 pandemic, and now the war in Ukraine. 
Russia's invasion of Ukraine has not only elevated humanitarian needs 
and displacement in the region, but threatens to further jeopardize 
food security around the world due to its impact on global food supply 
chains. According to the International Monetary Fund, Ukraine and 
Russia account for nearly 30 percent of wheat exports and 18 percent of 
corn exports in the world, most of which are shipped through Black Sea 
ports that are now closed. USAID is particularly concerned about the 
impact on geographic areas characterized by already high levels of 
acute food insecurity, significant vulnerability to price increases, 
and/or reliance on food imports from Russia or Ukraine--and 
Afghanistan, the Horn of Africa, Lebanon, the Sahel, the Maghreb, South 
Sudan, Sudan, Syria, and Yemen are at the top of the list. The impacts 
of the current crisis on poverty, hunger, and malnutrition could be 
even more significant than those seen in the global food price crisis 
of 2007-2008 and the subsequent civil unrest, as the last crisis 
followed a period of strong global economic growth, whereas the years 
since the onset of the COVID-19 pandemic have been characterized by an 
increasingly worse global economic downturn. For example, in the Yemeni 
city of Aden, the price of a piece of bread increased by 62 percent 
between February 25 and March 3. In Lebanon, domestic food price 
inflation has reached 483 percent. In West Africa, wheat prices 
increased by 58 percent per ton in just 5 days.
    As you know, USAID uses resources authorized under Title II of the 
Food for Peace Act and appropriated under the annual Agriculture 
appropriations for both emergency and non-emergency food assistance 
programs. In Fiscal Year 2021, USAID provided nearly $2.3 billion in 
Title II Food for Peace Act assistance, funding the procurement of 
nearly 1.7 million metric tons of food from the United States to serve 
a total of almost 28 million beneficiaries in 35 countries. Nearly 86 
percent of Title II assistance was for emergency responses and 
approximately 14 percent was for non-emergency programming.
    USAID provides emergency food assistance to vulnerable populations 
affected by natural disasters, such as droughts and floods, and complex 
emergencies, such as conflict. U.S. in-kind food assistance is often 
used to respond to an emergency where local markets are not 
functioning; there is not enough food in local markets to meet needs; 
or beneficiaries do not have physical access to markets. The food 
baskets provided at food distributions can vary based on dietary 
preferences and nutritional needs of beneficiary populations. Because 
U.S. in-kind food assistance takes an average of 4 to 6 months to reach 
beneficiaries, USAID prepositions commodities in warehouses that are 
strategically located across the globe to reduce delivery times.
    In addition to emergency programs, USAID works beyond the immediate 
response phase to improve and sustain the food and nutrition security 
of vulnerable populations through non-emergency assistance authorized 
in Section 202(b), what USAID now refers to as Resilience Food Security 
Activities (RFSAs). These unique programs build on USAID's humanitarian 
interventions to strengthen the ability of people, communities, 
countries, and systems to adapt to and recover from shocks and 
stresses, in a way that reduces chronic vulnerability and facilitates 
inclusive growth.
    USAID merged the Office of Food for Peace (FFP) and the Office of 
U.S. Foreign Disaster Assistance (OFDA) to form the Bureau for 
Humanitarian Assistance (BHA) in 2020 to streamline the Agency's 
humanitarian programming and optimize the use of U.S. taxpayer 
resources. However, the efficiency envisioned by the creation of BHA 
could be further enhanced by legislative adjustments to truly maximize 
the impact of humanitarian programs. USAID welcomes the Committee's 
regard for this topic and interest in strengthening USAID's ability to 
more effectively respond to crises, build resilience within 
communities, and improve stewardship of taxpayer dollars.
Positive Impact of 2018 Farm Bill Reforms
    Incremental technical fixes to authorizing language in the 
Agriculture Improvement Act of 2018 (the 2018 Farm Bill) have 
positively impacted USAID's food assistance programs over the past 4 
years. For example, the 2018 Farm Bill eliminated the monetization 
requirement for food assistance, which has both ensured that taxpayer 
dollars do not go to waste and improved the impact of USAID programs by 
allowing increased investment in the resilience of vulnerable 
communities. Previously, USAID was required to monetize 15 percent of 
all U.S. in-kind commodities shipped overseas under RFSAs (based on 
tonnage) which, according to a Government Accountability Office report, 
resulted in a financial loss of approximately 24 on the dollar.\1\
---------------------------------------------------------------------------
    \1\ International Food Assistance: Funding Development Projects 
through the Purchase, Shipment, and Sale of U.S. Commodities Is 
Inefficient and Can Cause Adverse Market Impacts; https://www.gao.gov/
assets/gao-11-636.pdf.
---------------------------------------------------------------------------
    The 2018 Farm Bill also allowed Community Development Funds (CDF) 
from the Development Assistance account in the State, Foreign 
Operations, and Other Programs appropriation to count towards the $365 
million Title II floor for non-emergency programs included in the Food 
for Peace Act. This change allows USAID to increase its commitment to 
building resilience, provides additional flexibility in non-emergency 
programming, and frees up $80 million in Title II funding each year for 
use in humanitarian emergencies. USAID's non-emergency food assistance 
programming under Title II primarily consists of RFSAs, which have 
proven instrumental to furthering the Agency's broader efforts to 
decrease global chronic food insecurity and contributed significantly 
to results under the Feed the Future initiative. RFSAs are intended to 
reduce humanitarian caseloads by strengthening resilience in 
populations that are vulnerable to acute or chronic hunger and 
recurrent shocks and stresses through multi-year, multi-sectoral 
interventions. The current RFSA portfolio includes programming in 
Bangladesh, Burkina Faso, Democratic Republic of the Congo, Ethiopia, 
Haiti, Kenya, Madagascar, Malawi, Mali, Niger, Uganda, and Zimbabwe.
    The RFSA program in Kenya, for example, is a partnership with the 
local government and focuses on four counties in the Arid and Semi-Arid 
Lands that are impacted by recurrent drought cycles and persistent 
acute malnutrition at or above emergency levels. The program's goal is 
to break this cycle of acute malnutrition through localized 
interventions that are sustainable so that communities and county 
administrations can successfully implement them on their own. The 
program focuses on building resilience so that the impacts of the 
drought cycles are lessened through activities like teaching families 
how to identify malnutrition and prevent or treat it at home, and long-
term asset creation such as water pans, shallow wells, and irrigation 
for people and their livestock. The RFSA program is also able to pivot 
to respond to shocks like the current drought, deploying rapid response 
activities already built into the program which help protect the 
families' and communities' assets during shocks.
    The 2018 Farm Bill also clarified the use of associated cost 
categories, resulting in significant cost savings for Title II 
programs. USAID has four associated cost categories that support the 
transportation, programming, implementation, and distribution of Title 
II food assistance under the Food for Peace Act: Section 202(e), 
Internal Transportation Storage and Handling (ITSH), ocean freight, and 
inland freight. Section 202(e) funds support the administrative costs 
of programming U.S. food assistance and are limited to 20 percent of 
Title II funding. ITSH funding supports in-country costs directly 
associated with the movement, storage, distribution and implementation 
of U.S. food assistance. Ocean freight supports the cost of shipping 
the commodities on U.S.- or foreign-flag ships. Inland freight supports 
the cost of moving commodities from a port to land-locked countries. By 
adding ``implementation costs'' (such as milling) to the ITSH 
definition, the 2018 Farm Bill allowed USAID to more effectively use 
its limited 202(e) funding. For example, flour is a staple in Yemen, 
but shipping U.S. flour to Yemen is not appropriate due to its limited 
shelf life. The ability to use the ITSH cost category for milling costs 
allows USAID to provide bulk wheat, sourced in the United States, for 
milling in Yemen. This change saves USAID approximately $40-$80 million 
in 202(e) costs each year that can be used to support and enhance other 
programs.
    As humanitarian needs continue to outpace available resources, 
BHA's programming must be routinely evaluated so that programs can be 
adapted to changing contexts and successes can be replicated. Changes 
in the 2018 Farm Bill allowed USAID to expand its program design, 
learning, adaptive management, and evaluation activities by adjusting 
funding under Section 207(f) to be a percentage of annual 
appropriations, rather than a static dollar amount. These funds support 
critical oversight, monitoring and evaluation activities including the 
Famine Early Warning Systems Network (FEWS NET), the Food Aid Quality 
Review (FAQR), program impact evaluations, third party monitoring, and 
the maintenance of BHA's information technology systems. The expansion 
of these activities has been critical over the past 5 years to ensure 
the quality and effectiveness of Title II programs.
    Again, USAID thanks the Committee for its support in addressing the 
challenges that the Agency faced ahead of the 2018 Farm Bill. Our 
collaboration on the technical fixes outlined above have led to more 
effective and efficient food assistance programs and improved use of 
taxpayer dollars.
Opportunities Presented by the Reauthorization of the Farm Bill
    Given the scale of global food insecurity and the dynamic nature of 
its causes, it is imperative that BHA fully optimize its programs and 
be able to employ the best food assistance modalities for each context 
in the future. The reauthorization of the farm bill, at this time of 
global crisis, provides an unparalleled opportunity for Congress and 
USAID to work together to ensure the U.S. Government has the best tools 
at its disposal to meet the humanitarian challenges of the day, while 
upholding U.S. international commitments.
    USAID's goal has always been to optimize humanitarian assistance 
programming and maximize taxpayer dollars within the confines of 
authorizing legislation in innovative ways. For example, in our non-
emergency RFSA programming, USAID piloted the ``Refine and Implement'' 
approach to co-creation which is based on adaptive management 
principles. The method allows partners to work closely with USAID and 
target communities to refine activity design in a way that is 
considerate of local context and community priorities while addressing 
the underlying causes of food insecurity. Our partners use evidence and 
pilot studies gathered during the first year of the award to refine the 
design of the program. Partners continue to review the assumptions and 
monitoring data annually to adjust the program as needed. Using this 
co-creation approach ensures that RFSAs are effective, efficient, and 
responsive to the needs of beneficiary communities over time. RFSAs are 
strategically designed to improve the sustainability of outcomes beyond 
the life of the programs. These programs also build the capacity of 
local actors to own the delivery of necessary inputs and services using 
a market-based approach, which is in line with USAID's localization 
agenda.
    In fact, even more optimization and efficiencies could be gained by 
adjusting some of the approaches to implementing Title II resources. 
For example, USAID most commonly utilizes Title II and International 
Disaster Assistance (IDA) resources to fund humanitarian assistance 
programs. The number of countries where sustained, large volumes of 
U.S. in-kind food assistance are the most effective modality is 
limited, and it can be difficult to redirect commodities if the needs 
or the context change. Increasing flexibility between Title II and IDA 
accounts to allow USAID to quickly pivot programming in response to 
changing contexts would help ensure that the Agency utilizes the most 
appropriate funding tool in each response. Additionally, expanding the 
Food for Peace Act to allow IDA and Title II funding in the same award, 
would obviate the need for multiple awards to a single partner 
implementing both IDA and Title II resources in the same response. 
Humanitarian crises are rarely limited to one sector-robust wrap-around 
services (including health, nutrition, and water, sanitation, and 
hygiene) are often needed to support vulnerable people receiving food 
assistance. Expanding USAID's ability to co-program accounts would 
increase USAID's flexibility to respond to complex emergencies and its 
ability to implement multi-sectoral programs efficiently. Amending the 
Food for Peace Act to allow the co-programming of accounts could help 
BHA implement robust, multi-sectoral programs, as it was designed to do 
through the Bureau's creation.
    USAID is also committed to improving localization in humanitarian 
responses. On November 4, 2021, USAID Administrator Samantha Power laid 
out her vision for the future of USAID in a speech at Georgetown 
University, which included an increased focus on localization, as local 
actors are best positioned to drive their country's development. 
Administrator Power set two ambitious goals for localization during 
this speech: 25 percent of USAID assistance must go to local partners 
within the course of the next 4 years, and 50 percent of USAID 
programming must place local communities in the lead to either co-
design a project, set priorities, drive implementation, or evaluate the 
impact of our programs by the end of the decade. USAID's localization 
agenda has strong bipartisan support: it was also a priority under 
former USAID Administrator Mark Green's New Partnerships Initiative and 
procurement reform efforts. In an effort to attract new, small, or 
local organizations to apply for these resources, establishing a single 
associated cost category would help streamline budgets and lessen the 
administrative burden of implementing Title II programs. This change 
would result in the elimination of barriers to entry for smaller 
organizations while retaining the necessary financial oversight to 
ensure compliance with the strict authorized uses of cost categories, 
such as Section 202(e) and ITSH.
    The combination of CDF authorizations in the 2018 Farm Bill and the 
increased 20 percent 202(e) cap from the 2014 Farm Bill allowed USAID 
to eliminate the monetization requirement. Further increasing the cap 
on 202(e) resources would give BHA the flexibility to support emergency 
programming while also using the most appropriate modality for each 
non-emergency program based on local context and beneficiary needs. The 
20 percent cap on 202(e) limits our ability to support both quality 
non-emergency program design and increasingly expensive emergency 
logistics needs at the same time. Because of this, USAID must still 
program commodities in RFSAs, where market-based modalities can be 
better suited to building long-term resilience. For example, the 2021 
Haiti RFSA solicitation required a minimum of 50 percent of each annual 
budget be used to program U.S. in-kind commodities. During the question 
and answer period, many partners, including local Haitian non-
governmental organizations, expressed logistical concerns about the 
need to program commodities due to inadequate warehouse and storage 
facilities, supply chain challenges, and security concerns. Some 
partners also did not believe that RFSAs with a commodity requirement 
could be sustainable after the end of the award or make lasting 
improvements to the resilience of vulnerable populations. As such, 
increasing the cap on 202(e) resources would give our partners 
increased flexibility to program RFSAs effectively.
Conclusion
    Addressing the staggering level of food insecurity around the world 
will be one of the greatest challenges of our time. Optimizing USAID's 
food assistance programs will be critical to saving the most lives when 
confronted with growing humanitarian needs and limited resources. As 
demonstrated by 2018 Farm Bill changes I outlined above, incremental 
technical fixes to authorizing language in the farm bill have had 
significant positive impacts on USAID's food assistance programs over 
the past 4 years. Similar solutions exist for each of the current 
challenges USAID is experiencing as well. We look forward to working 
with the Committee ahead of the upcoming farm bill reauthorization to 
maximize the ability of the legislation to support USAID to more 
effectively respond to crises, build resilience among communities, and 
improve stewardship of taxpayer dollars. Thank you again for the 
opportunity to testify today; I look forward to your questions.

    The Chairman. Thank you very much for your testimony, and I 
want to thank both witnesses this morning. We will now 
recognize Members of the Committee--excuse me--for 5 minutes 
each, alternating between the Majority and Minority Members of 
the Committee, and I shall begin by recognizing myself for 5 
minutes.
    Ms. Charles, in your testimony you noted that, as we all 
stated, Ukraine and Russia account for nearly 30 percent of 
wheat exports and 18 percent of corn exports in the world. 
Obviously, that is a staggering number. As I spoke with 
Secretary Vilsack last week, we don't know how much seed is 
going to get in the ground as a result of this war.
    Have you begun to do an analysis on how we will work 
together in terms of the non-emergency food aid programs to 
build more resilience, but also the emergency aid food 
programs? I think we have to deal with both.
    Ms. Charles. Maybe I can start specifically by talking 
about efforts inside of Ukraine to ensure that even under these 
incredibly difficult conditions, they are able to export as 
much as possible. So, our development programming in Ukraine is 
working very closely with Ukrainian [Ministry of Agrarian 
Policy and Food]. Their estimates right now are that Ukraine 
may be able to plant for the spring season and yield something 
in the range of 50 percent of what a normal harvest might be 
from that spring crop. The challenge, of course, remains 
critical inputs to that, including diesel, as I think it was 
alluded to before. The Government of Poland has actually made 
the decision to draw down on their strategic reserve in order 
to supply the Ukrainians with diesel from Poland, and then the 
Ukrainians are working with Exxon-Mobile to backfill.
    But like you said, this has ongoing impacts around the 
world, so we are working through the Feed the Future Program to 
look at ways to expand our efforts to increase yields 
worldwide, but also to look for greater efficiency in our 
emergency programs as well.
    The Chairman. I had a meeting earlier this week with the 
French ambassador, and he indicates that his country, with his 
President and others, are leading a European effort to deal 
with this issue of hunger and humanitarian assistance. Are we 
working together with our friends with the European Union? 
Because it seems to me we are working together on a whole host 
of efforts as it relates to this crisis, and this seems to be 
one of those that I think we really need to be coordinating 
hand in glove.
    Ms. Charles. We absolutely are. I actually just came back 
from Europe about 10 days ago where I was meeting with our 
European counterparts, both on the response in Ukraine, but 
more critically or as critically, the global response to the 
food security crisis. Administrator Power actually chairs a 
weekly meeting with our European Union counterparts on the 
crisis in Ukraine, but the focus of these discussions in the 
last couple of weeks have been as much about response to the 
global impact of Ukraine's war on global food security as well. 
So, the French, the European Union, the Germans, the United 
Kingdom, these are critical partners in our response.
    The Chairman. Well, they have to be, and obviously, working 
together we can consolidate resources and do a better job in 
addressing it and avoid duplication and be more cost effective. 
We might want to suggest Administrator Powers come here to 
brief us on this.
    Mr. Whitley, I am very concerned about how climate change 
is impacting global food systems, and what role the farm bill 
programs have in improving uptake in sustainable practices with 
our partner countries. Would you care to comment?
    Mr. Whitley. Yes, sir. Thank you, Mr. Chairman.
    I think that one of our programs we can certainly 
prioritize and target countries that are interested and have 
shown a willingness to embrace climate-smart agriculture in the 
manner in which American agriculture views sustainability. Food 
for Progress is a program where we can highlight and emphasize 
and share our technology, our expertise, our innovation on 
global ag production in a sustainable manner. And this year's 
priority country lists three countries that we think we can 
partner with and educate them on, and they can be partners in 
the international conversation on what does----
    The Chairman. Well, I think we would like to have more 
detail on that. I think many of us are watching what Europeans 
are doing with this Farm to Fork policy and wondering 
ultimately how that is going to work. But, there is more to be 
learned about that.
    Let me close before my time runs out. I mentioned earlier 
in my statement about the supply chain issues, and I know the 
Europeans are having similar supply chain issues. What 
emergency procedures or efforts is the Administration 
contemplating? I mean, if we are having empty containers going 
back on the West Coast up to 80 percent, that is a problem and 
we are in a crisis, and even if we can consolidate our 
commodities that we can use to ship for support, if we don't 
have the capacity to move those products, then this is 
different than some of the other support we are providing into 
Poland or Romania. When we are talking about food grains and 
other such, you need ships.
    Mr. Whitley. Absolutely, and the Administration does have a 
Supply Chain Task Force. Secretary Vilsack is a member of that 
task force, and----
    The Chairman. With Porcari?
    Mr. Whitley. Yes.
    The Chairman. Yes, we have had conversations, but have you 
looked at how this pertains to this effort with this potential 
humanitarian food crisis?
    Mr. Whitley. Yes, absolutely. It certainly is a problem in 
terms of trying to get product around the world, but we are 
providing assistance and information. We are hearing from our 
stakeholders every day about the challenges they face with 
getting products to market, and the two pop-up ports we 
announced in Seattle and Oakland hopefully will relieve some of 
the bottlenecks at the ports so we can get those cars loaded.
    The Chairman. Well, let the Secretary know--my time has run 
out, but we are going to want more information on this 
container issue, because not only is it depressing current 
markets of American exports, California exports 44 percent of 
its agriculture.
    Mr. Whitley. Correct.
    The Chairman. It is a real challenge. But now you add to 
this crisis. We need to look at what emergency procedures could 
be implemented.
    My time has really expired, and I will defer to my 
colleague and good friend, the gentleman from South Dakota, Mr. 
Johnson.
    Mr. Johnson. It is good to be the king, right? You get that 
extra minute when you need it. It is great.
    Administrator Whitley, I will start with you. Recently, in 
fact, yesterday, my colleagues and I sent a letter to Secretary 
Vilsack and Ambassador Tai about Canada's proposal for their 
tariff rate quotas on dairy products, and I will just be very 
up front. I thought Canada's proposal fell woefully short, and 
I wanted to give you an opportunity to share any of your 
thoughts on both their proposal and where do we go from here?
    Mr. Whitley. Yes, sir, and I think USDA agrees that 
Canada's proposal has fallen woefully short. I think the ruling 
by the dispute settlement panel under the USMCA was clear that 
more needs to be done, and Canada has not met what we think the 
ruling has indicated. We are in talks and conversations with 
USTR on a regular basis. This is a top priority for the 
Secretary and USDA, and we are working on both what we can do 
to continue our conversation with our Canadian counterparts, 
but also, what are the tools at our disposal, given the USMCA 
agreement.
    Mr. Johnson. Well, thank you for that, and I want to 
reiterate both to the Administration and probably more 
importantly, to Canada, that I think a vast swath of bipartisan 
Members here in the United States House believe that Canada is 
not living up to its commitments under USMCA, as you alluded 
to, sir, and we certainly want to support bold efforts on 
behalf of the Administration to close that gap, because I do 
think American dairy producers deserve fair opportunity for 
market access. So, thank you very much for that.
    Ms. Charles, you in your testimony noted the purchasing 
power of your budget has gone down. I think you said 11.4 
percent, which is obviously substantial. The Chairman had noted 
that John Garamendi and I have a bill, the Ocean Shipping 
Reform Act (H.R. 4996), that would address some of the supply 
chain crunches. He noted that he and I have a bill that would 
address the anti-trust exemptions that the foreign-flag ocean 
carriers have. That would help a little bit.
    But give us some sense to what extent have food aid 
recipients been impacted by the supply chain crunch, by 
shipping delays generally?
    Ms. Charles. So, thank you for highlighting that. We 
certainly feel the impact of supply chain disruptions. That 
11.4 percent was even before the war in Ukraine, so I think we 
can anticipate that our purchasing power unfortunately will go 
even lower. Just to give you some flavor, it now costs 
something in the range of $164 per metric ton to ship food 
overseas, so where we are really feeling this is in the cost, 
the cost to move food around the world. And we already see 
ration cuts in places like Yemen. I think David Beasley was up 
on the Hill, the leader of the World Food Programme, sharing 
some of this a couple of weeks ago where we have seen a country 
where 13 million people are dependent on food aid, 50 percent 
ration cuts, again, even before the impact of those----
    Mr. Johnson. So, Ms. Charles, I mean, clearly it is a 
budgetary problem. I mean, also is it a logistical problem? I 
mean, even if you have the budget, are you able to get the food 
where it needs to go when it needs to get there?
    Ms. Charles. So, we have supply chain experts who work very 
hard with our partners to ensure that we can plan as far in 
advance as possible, but that planning does take 3, 6 months in 
advance to get food where it needs to go in the face of these 
kinds of supply chain disruptions. It makes it particularly 
difficult to use U.S.-sourced commodities for something like a 
sudden onset crisis. I mean, this really is most appropriate in 
context where we are facing more chronic hunger in part because 
of that lag time.
    Mr. Johnson. And what about our international partners, 
other developed countries that have a tradition--I mean, almost 
nobody has a tradition like we do of international food aid, 
but is their ability to respond to these pop-up crises also 
reduced, I would think?
    Ms. Charles. So, most of our peer donors provide cash as 
opposed to in-kind assistance, so our assistance really does 
complement those efforts in places where we have acute food 
insecurity and local markets can't support local procurements. 
That is one of the kind of niche roles that our assistance 
provides. But we certainly are seeing these supply chain 
disruptions everywhere that we work.
    Mr. Johnson. Yes, and I would just close by putting an even 
finer point on what you note, and that is that the United 
States plays an almost unique role in international food 
security. While others are able to provide cash, and that is 
clearly needed and helpful, we are the bread basket of the 
world. We are growing and raising the kind of food and protein 
that people need during times of duress, and I just want to 
thank you for your efforts.
    With that, Mr. Chairman, I yield back.
    The Chairman. I thank the gentleman for his focus and his 
questions.
    The chair will now recognize the gentleman from Georgia, 
our good friend Representative Sanford Bishop, who we are very 
fortunate not only does a terrific job on the policy committee, 
but also does a good job for us on Appropriations, representing 
the jurisdiction on the appropriate funding measures that will 
have to do a lot of what we are trying to do here, as we 
implement Title III and other related programs.
    The gentleman from Georgia, Sanford Bishop.
    Mr. Bishop. Thank you, Mr. Chairman, and let me thank our 
witnesses, Administrator Whitley and Ms. Charles, for appearing 
this morning.
    Let me ask you a couple of questions. The first has to do 
with the current situation in Ukraine. It has only compounded 
the global food crisis by intensifying the need for 
humanitarian assistance, and by reducing global supplies of 
wheat, cooking oil, and fertilizer. To bolster the American 
response to these crises, 36 bipartisan Members of the House 
Agriculture Committee, myself included, recently sent 
Administrator Power and Secretary Vilsack a letter encouraging 
them to tap the Bill Emerson Humanitarian Trust to make 
additional commodity donations available. Is this something 
that your agency is considering? If so, can you share your 
current plans to obligate available Food for Peace funds, and 
what steps need to be taken to access the trust?
    Second, how are the Bill Emerson Humanitarian Trust funds 
replenished once they have gone down, and how long would it 
take to replenish those funds?
    Ms. Charles. Thank you for that question, Congressman.
    I can assure you that we are in very active conversations 
with the U.S. Department of Agriculture about determining the 
specifics about drawing down that Bill Emerson Humanitarian 
Trust, and we are in the process right now of looking at 
commodities in countries that could benefit from U.S.-sourced 
food commodities. And again, in terms of replenishment, I do 
think the statute has a specific cap on how much is replenished 
each year. I believe it is $20 million each year, and we will 
be very eager to share with the Committee as soon as those 
specifics have been decided between USDA and USAID about 
specific plans, including what that would mean in terms of 
replenishment.
    Mr. Bishop. Thank you.
    Next question. In past farm bill debates, there have been 
efforts to reform the Food for Peace to shift more resources 
away from commodity food aid to cash assistance. What do you 
believe is the appropriate balance of commodities and cash 
assistance in Food for Peace, and what are the tradeoffs of 
proposals to shift more resources into cash or vouchers? And 
are there other ways that we should consider adding flexibility 
into the program implementation?
    Ms. Charles. Thank you again for that question.
    As I think Ranking Member Johnson mentioned, we do see a 
critical role for U.S.-sourced food commodities with our 
humanitarian assistance and our resilience-focused programs, 
particularly where local markets can't support the acute food 
needs of those that are most in need of assistance. We are 
seeking, in part because of what we talked about in terms of 
the reduced purchasing power of our Title II resources, greater 
flexibility in the 2023 Farm Bill, including, for example, when 
we look at some of our resilience programs, we may, in the 
first, second, third year of a program focused on increasing 
the resilience of local communities, want a bigger basket of 
U.S.-sourced food commodities, but over time as we invest in 
agricultural inputs, small-hold farmer yields, want to 
transition to more cash and voucher assistance to support local 
markets and hopefully markets that will become import markets 
as well for U.S. farmers.
    Mr. Bishop. Thank you very much. I will yield back the 
balance of my time. I thank you very much.
    The Chairman. Will the gentleman yield?
    Mr. Bishop. Yes, I will.
    The Chairman. Since you have a little more time.
    It dawned on me as the gentleman from Georgia was asking 
you, it just seems to me that we have some commodities in this 
country in which we have surpluses, and some of those surpluses 
are, in part, caused by the supply chain issue with regards to 
empty containers. Have you looked at whether or not there is--
as that is a source of protein that can be used in terms of 
your program, focusing on possibly purchasing some of those 
commodities in which there are surpluses and product just 
sitting, if not at ports, sitting in warehouses that could be 
shipped?
    Ms. Charles. So, we start from the place of looking in the 
areas where we are seeing acute food insecurity, looking at the 
specific needs of those communities, what is appropriate for 
their local diet, what is familiar to those communities, and 
then we work very closely with colleagues at USDA to source the 
appropriate commodities in response to that. And often, that 
does include certain protein sources.
    The Chairman. Well, let me give you an example and then get 
back to us on this. But wheat shortages, as we noted with 
Ukraine produces the flour to produce a lot of the bread 
products that certain diets in certain parts of the world--
almonds, as you make almond flour, and that works as a good 
substitute, and--in terms of a protein substitute. So, those 
are the kinds of things I think we need to be looking at in 
terms of thinking out of the box.
    Our next Member is the Ranking Member, the gentleman from 
Pennsylvania, Congressman GT Thompson from the 15th 
Congressional District of Pennsylvania.
    Mr. Thompson. Well, Mr. Chairman, thank you. Once again, 
thank you to the witnesses and your written testimony has been 
very helpful.
    I wanted to follow up on some things. Ms. Charles, your 
testimony mentions the benefits of the flexibilities provided 
in the 2018 Farm Bill, and thank you for those kind comments, 
remarks. Yet, it seems USAID has continued to push to make Food 
for Peace Program a really important program, a cash giveaway 
program with virtually no requirements for the use of U.S.-
grown food. Do you worry that a continued push in that 
direction will erode domestic support for this longstanding 
program, and quite frankly, I worry about the effectiveness of 
this pivot when the fact is, it is really about having enough 
food commodities with what we are experiencing--what we are 
seeing over the horizon come this fall. I don't--it seems to be 
the better push would be to, obviously, to help our farmers 
increase yield and production so that we actually have food. I 
am not sure where that money is going to be used to purchase 
commodities, given what is happening in Europe right now and 
will spread into the Middle East.
    Ms. Charles. Thank you, Congressman Thompson.
    I can assure you that the Food for Peace Program, both as 
authorized and as implemented, at its core is using U.S.-
sourced food commodities. We do, at times, depending on the 
market conditions, the particular needs and environment, have 
wraparounds in terms of cash and voucher assistance. So, for 
example, in a place like Somalia or like Yemen, we may be 
pairing U.S.-sourced wheat, lentils, soy, or vegetable oil with 
that cash and vouchers that allow people to purchase things 
like vegetables to supplement those U.S.-sourced commodities or 
iodized salt, which is more appropriate to purchase on the 
local market.
    Mr. Thompson. Okay, thank you.
    Administrator Whitley, with the agriculture trade promotion 
programs winding down over the next year and a half, how do you 
foresee promotion of American agricultural products abroad 
being impacted?
    Mr. Whitley. Thank you, Congressman, and we do have the MAP 
Program, which is the farm bill authorized program to promote 
U.S. agricultural products, and we have seen tremendous 
success. Obviously, we set a record amount of exports in 2021 
at $177\1/2\ billion, and many of our cooperators and companies 
tout the fact that they have been able to use MAP and FMD and 
some of these other programs to reach those successes.
    So, as Congress authorizes these programs, we are certainly 
capable of implementing them and benefitting American 
agriculture to achieve exports, and as we get these 
authorizations and the requests from the farm bill, we will 
implement them to the best of our abilities.
    Mr. Thompson. And thank you for that. Obviously, I am a big 
fan of both agencies, and the MAP Program and FMD, those two 
tools that we provide through the farm bill are extremely 
important for our farmers, right, and our ranchers to be able 
to kind of navigate what can be pretty confusing and 
challenging in terms of trade. And so, I look forward to 
working with you to make sure that all the tools are there as 
we prepare for the next farm bill to continue to be effective.
    One of the many lessons of this terrible genocide in the 
Ukraine is looking at how vulnerable food security can be, and 
so this is a win-win, because economically, this is a great 
market for our farmers and ranchers. I know the Great Recession 
of 2009 when many industries were just struggling desperately, 
agriculture actually held its own and we were resilient, but 
that was because of our trade that we have. So, we can never 
forget that it is important to serve the needs of people around 
the globe, but quite frankly, economically it helps those 
hardworking folks that work so hard every day.
    And my time has just about expired, so I will yield back.
    The Chairman. Well, we thank the gentleman from 
Pennsylvania always for your contributions, and we will 
continue to work together on all of the above.
    Our next Member who is on queue is Representative Scott 
DesJarlais from the wonderful State of Tennessee, the 4th 
Congressional District. Mr. DesJarlais?
    Mr. DesJarlais. Thank you, Chairman Costa, and thanks to 
our panelists today for being here.
    Ms. Charles, I will start with you. USAID has historically 
pushed Members of this Committee to advocate for more 
flexibility to use cash to procure foreign commodities over in-
kind donations of U.S. commodities. For example, instead of 
buying U.S. rice or U.S. wheat, USAID and its implementing 
partners could theoretically use U.S. taxpayer dollars to buy 
Russian wheat or Vietnamese rice to support feeding and 
development projects. Do you know, does USAID have controls in 
place to prevent U.S. dollars from supporting Russian 
businesses or others that directly compete with U.S. farmers?
    Ms. Charles. So, all of our U.S. foreign assistance 
programs certainly have controls in place to make sure that our 
assistance is used consistent with the law and consistent with, 
certainly right now our partners are looking very closely at 
new sanctions that have been imposed. We do not restrict our 
partners, though, from procuring with our International 
Disaster Assistance, our IDA funding, from procuring what is on 
the local market.
    Mr. DesJarlais. Okay. Administrator Whitley, Ranking Member 
Thompson touched a little bit on this, but when you talk about 
the MAP or FMD funds, how are they awarded to cooperator 
groups. Is there a formula, and is it based on the domestic 
production value of the commodity?
    Mr. Whitley. No, the funds for MAP and FMD are awarded 
based off of export strategies called the Unified Export 
Strategy that they submit annually, and we have experts that 
assess these strategies for their capabilities to increase 
trade and increase exports. So, we work with the cooperators in 
the companies who submit these strategies. We add a little of 
our own analysis to those strategies and have a conversation 
with the companies, and determine the appropriate awards that 
we think those activities will lead to exports.
    Mr. DesJarlais. Okay, and do you have concerns with how 
current transportation costs may limit the reach of the Food 
for Progress Program, and if so, has FAS been looking at 
creative ways to be more flexible with the $40 million 
transportation cap?
    Mr. Whitley. Yes, sir. We are limited by the cap, so we can 
only ship the amount of commodities that $40 million will 
support in terms of transportation. So, we look forward to 
working with Congress and this Committee as we think about the 
next farm bill and what are some of the options and some ways 
that it can possibly be adjusted or more flexibility can be 
given so we can ship more commodities.
    The Chairman. Would the gentleman yield?
    Mr. DesJarlais. Yes, sir.
    The Chairman. I am wondering either what could be done 
under emergency authority to lift the cap, and what we could do 
to help if this is anticipation of this year?
    Mr. Whitley. We would welcome that conversation with 
Congress, Mr. Chairman, and certainly, this is a limitation of 
the program, the $40 million cap.
    The Chairman. We ought to look at that.
    I defer back to my colleague, and I will give you the 
balance of the time that I used of yours.
    Mr. DesJarlais. Okay. I guess we have time for one more 
question.
    Administrator Whitley, Food for Progress is an excellent 
long-term industrial development market development program 
administered by USDA; however, I am hearing concerns with the 
narrow scope of Food for Progress's most recent key priority 
areas, and how they may preclude work on other worthwhile 
projects. Can you speak to how Food for Progress develops its 
priorities, and how these priorities can be expanded and 
improved upon in advance of the Fiscal Year 2024 funding 
opportunity to allow more U.S. cooperators to participate?
    Mr. Whitley. Yes, sir. We work closely with USAID and other 
partners in carrying out a scoping mission on which countries 
and which parts of the world the program can be most effective. 
We evaluate those countries, those regions, those markets. We 
go through a process internally at USDA to determine where we 
think it is appropriate to go ahead and announce its priority 
countries, and once those countries are announced, we have a 
conversation with our implementing partners and we ask them to 
submit proposals and think about those options. And those 
proposals come in and again, we formulate an expert committee 
to evaluate those proposals and make those awards.
    Mr. DesJarlais. Okay. That about uses all my time. Thanks 
again to both of you for appearing today, and Chairman Costa, I 
yield back.
    The Chairman. Well, I want to thank the gentleman, and the 
chair was more than willing to provide additional time for 
allowing me to--your willingness to yield, because I think this 
cap issue may be something we are going to have to look at. 
Thank you for your good questions and your comments.
    The next Member that I think is in queue at this point in 
time is Representative Jim Baird from the 4th District in 
Indiana. Mr. Baird, I believe you are on Zoom.
    Mr. Baird. Thank you, Mr. Chairman, and I really appreciate 
this opportunity to discuss international trade and food 
assistance, and I really appreciate the witnesses being here.
    My question goes to Administrator Whitley, and in your 
testimony, you stated that the Biden-Harris Administration is 
working to better position our agricultural and rural 
communities to compete in the global economy. Your testimony 
goes on to say USDA is working every day to meet this challenge 
by creating more and better export market opportunities for 
farmers, ranchers, and producers.
    Some of my colleagues and I are concerned about the 
commitment this Administration is making to prioritize trade, 
to craft an ambitious agenda, as well as swiftly nominating 
individuals to fill the position of Chief Agriculture 
Negotiator and the Under Secretary for Trade and Foreign 
Agricultural Affairs. So, I really appreciate all the work that 
you do and the work that USDA FAS is doing, but I want to know 
what you are doing in this area of trying to fill these 
positions and enhance foreign trade?
    Mr. Whitley. Thank you, Congressman Baird. I know the 
Administration is eager to complete the process to fill all of 
these positions that you mentioned. I will also add that we 
recently had our first in-person trade mission in the 2 years 
since the pandemic began. We took over 40 companies to Dubai on 
a trade mission and trade shows, and we received a very 
enthusiastic welcome from all of our trading partners and 
importers and distributors that we met in Dubai. Many of our 
companies walked away with enormous success moving forward. We 
had our first projections from that trade mission come out last 
year, and many of the companies in total reported that first 
year sales will exceed $200 million. So, we are excited to take 
along American agribusinesses to new companies and new markets, 
introduce them to importers and buyers, and continue the 
process of creating these market access opportunities. We have 
four more trade missions on tap later this year, and we are 
looking forward to additional successes.
    Mr. Baird. In that vein, the commodities that we are able 
to produce and incorporate into our trading programs, what are 
the comments for some of those on these trade missions, the 
recipients of our products, in your opinion?
    Mr. Whitley. Well, the biggest comments I think we heard in 
Dubai is that American agriculture is the most reliable in the 
world. We received a lot of feedback that many countries and 
many buyers want to strengthen their ties with American 
agriculture because of our ability to provide safe, nutritious, 
timely commodities and be reliable year in and year out.
    It is no accident that American agriculture set record 
exports in 2021 despite the supply chain logistics, despite the 
COVID pandemic. It is because of the resilience of American 
agriculture to perform in all times, and I think that is being 
shown, given the situations around the world, that we are a 
reliable supplier and many of our trading partners are looking 
forward to strengthening their relationship with us.
    Mr. Baird. In that same vein, I am going to switch a little 
bit. Do you have concerns about our current transportation 
costs and how that may limit the reach of our Food for Progress 
Program? And if so, has FAS been looking to create ways to be 
more flexible with the $40 million transportation cap?
    Mr. Whitley. Yes, sir, we do have concerns about the $40 
million cap and we are certainly open to a conversation with 
Congress and the appropriate committees as they formulate the 
next farm bill to discuss what could be done or how it could be 
more helpful to have any flexibility with that cap to ship more 
products.
    Mr. Baird. Thank you very much. I appreciate those remarks, 
and I yield back, Mr. Chairman.
    Mr. Whitley. Thank you, sir.
    The Chairman. Thank you. I thank the gentleman for his 
questions and his focus.
    I now believe that Representative Hayes wishes to be 
recognized. I believe Mrs. Hayes is on Zoom. I don't see you.
    Mrs. Hayes. I am here.
    The Chairman. Oh, terrific.
    Mrs. Hayes. Thank you, Mr. Chairman.
    The Chairman. You are welcome. Glad to have you, and you 
are recognized for 5 minutes.
    Mrs. Hayes. Thank you. Thank you, Mr. Chairman, and thank 
you for hosting this very important hearing.
    During my time as the National Teacher of the Year, I 
traveled the world as an ambassador for education, and while I 
was abroad, I learned the degree to which many communities look 
to Americans to lead the way on food security. When I would 
visit towns, many students assumed I was there to bring food, 
as other Americans had done before me. Our international food 
programs are not just an exercise of goodwill; they are 
absolutely critical to communities that are impacted by the 
devastation of food insecurity.
    I am thinking about now the crisis in Ukraine and what is 
happening as the world is watching many pregnant and nursing 
women flee their country, and I am particularly concerned about 
the health and well-being of these women.
    Ms. Charles, how is USAID addressing the nutritional needs 
of pregnant and nursing mothers in Ukraine and their newborn 
babies?
    Ms. Charles. Thank you. It is such a good question. This 
obviously has been a crisis that has even more so than normal 
disproportionately impacted women and children. We see this all 
over the world when war strikes. Women and children are most 
vulnerable, but we are seeing it in full force in Ukraine. I 
actually think it is a good example to come back to Mr. 
Thompson's question about how are U.S.-sourced commodities 
combined with greater flexibility around cash can be helpful in 
addressing the acute needs of lactating women and children. The 
flexibility we are pursuing in terms of wraparound services for 
the U.S. commodities allows, for example, for us to use U.S.-
sourced specialized products to treat malnutrition, both in 
young children, but also pregnant and lactating women, but also 
have the cash to provide the kind of wraparound nutrition 
services, the training of community health workers, the 
assessment of nutrition, the follow up services that are 
provided to ensure that those programs can be most effective 
and use our U.S.-sourced food commodities most effectively.
    Mrs. Hayes. Thank you. I appreciate that.
    Additionally, the McGovern-Dole International Food for 
Education and Child Nutrition Program is a critical 
international program which is aimed to provide at least one 
nutritious meal per day to vulnerable children in schools 
across the world.
    Mr. Whitley, how has the McGovern-Dole program been adapted 
to the COVID-19 pandemic, and do you have any recommendations 
for Congress to ensure the program can adequately respond to 
crises of this magnitude in the future?
    I can't hear in the room. I am sorry.
    The Chairman. You need to activate your microphone there.
    Mr. Whitley. Okay, thank you. Thank you, Congresswoman.
    Yes, the McGovern-Dole program has continued to operate 
during the COVID pandemic, and we have seen enormous success. 
Coincidentally, this is the 20 year anniversary of the program, 
and since the program's inception, we have fed over 31 million 
children around the world in 48 different countries, purchasing 
more than 1.3 million tons of American food. So, it has been a 
huge success, the overall program. So, every year we look 
forward to carrying out and implementing this program, 
identifying the places around the world where it can be must 
useful, and of course, as the farm bill authorizes this 
program, we are excited about the opportunities to continue.
    Mrs. Hayes. Thank you. I appreciate your commitment to this 
work, and just the appreciation that we have to prioritize 
making sure that we get healthy meals to children, not just in 
our country, but all over the world.
    Mr. Chairman, that is all I have. I yield back. Thank you.
    The Chairman. We thank the gentlelady for her questioning, 
and the chair will now recognize the next Member of the 
Subcommittee, Representative Tracey Mann from Kansas's 1st 
District.
    Mr. Mann. Thank you, Chairman Costa and Ranking Member 
Johnson.
    The Chairman. You are welcome.
    Mr. Mann. I appreciate it.
    Today's hearing represents much of Kansas's legacy. I get 
to represent the big 1st District of Kansas, and former Senator 
Bob Dole used to be in this seat, and he paved the way, of 
course, for the McGovern-Dole International Food for Education 
and Child Nutrition Program, which as you all know, helps fight 
hunger by providing nutritious meals to children in schools and 
developing countries. The origins of Food for Peace Program 
actually came out of the district as well at a county farm 
bureau meeting in southwest Kansas years ago, and so, the list 
of reasons why international trade and food assistance programs 
like these are important to my district and important to 
Kansas, and that list goes on and on.
    Ms. Charles, first off a question for you. Kansas is the 
Wheat State. Wheat is the number one commodity used in U.S. 
donations. If you add up all of the aid destinations, they 
would represent a top ten market for U.S. wheat. In that same 
vein, the last two farm bills have granted USAID flexibility in 
implementing aid programs; however, more than \1/2\ of that 
funding is for market-based assistance, meaning non-U.S. food. 
How can USAID prioritize in-kind donations of U.S. commodities 
like wheat?
    Ms. Charles. Kansas certainly has a very proud legacy when 
it comes to food assistance overseas.
    I will say, as you noted, wheat is the biggest commodity 
that we source here in the United States. When we look at 
assistance, we really are looking at how to deliver the most 
effective assistance, including how to make sure that that 
wheat is accompanied by the kind of wraparound services to 
ensure that it is actually addressing the most critical food 
security needs, that it is targeted at the most vulnerable, and 
that they are provided the kind of wraparound nutrition and 
health services that ensure that that can be effective.
    Mr. Mann. Great, thank you.
    My next question is for you, Administrator Whitley.
    As you mentioned, the 2018 Farm Bill created International 
Agriculture Education Fellowship Program, or IAEFP. I applaud 
USDA's successful of IAEFP in Africa, but I am concerned with 
USDA's recent decision to relocate IAEFP after only 1 year in a 
country. While I recognize the need for this type of program in 
many geographic regions, such a move in the program's second 
year would undermine or could undermine the intent, 
sustainability, and overall success of the entire program.
    What do you need from Congress to ensure multi-year 
sustainability in a particular country so that we don't risk 
exiting a country prematurely before progress is made and 
accounted for?
    Mr. Whitley. Thank you, Congressman Mann.
    The recent decision to offer ag program and under IAEFP to 
another country we do think is within the legislative authority 
of how the program was written. The funding is available on an 
annual basis, and we award on an annual basis; however, the 
programs do have a 3 year component to it. So, we will monitor 
and assess the program over a 3 year period for its overall 
effectiveness. But we can only allocate the money on that 
annual basis.
    Mr. Mann. Great, thank you.
    I believe that for IAEFP to be successful, the Department 
must find ways to extend its presence in awarded countries or 
regions. We can't expect to monitor any program with only a 
years' worth of results. I just think, once these programs are 
stood up, we have to do it for a few years to really know if we 
are having results, and there has to be a sense of longevity 
and sustainability to see effectiveness and really effective 
use of tax dollars.
    So, thank you both for being here and what you do, and with 
that, I yield back.
    The Chairman. The gentleman yields back and we thank him 
for his questions and comments.
    The chair will now recognize the representative from 
Virginia's 7th District, my friend, the very able 
Representative Abigail Davis Spanberger.
    Ms. Spanberger. Thank you so much, Mr. Chairman and Ranking 
Member Johnson, thank you for organizing this hearing, and 
thank you to the witnesses for being here today.
    I also serve on the House Foreign Affairs Committee, so I 
am very excited to have the opportunity to discuss the role of 
American agriculture abroad in the ways that we can both 
support our farmers and producers here domestically, and also 
affirm our global leadership in assisting in humanitarian 
crises and economic development priorities across the world.
    So, Administrator Whitley and Ms. Charles, thank you for 
being here today and more importantly, thank you for the work 
that you do at USDA and USAID respectively. As my colleagues 
have mentioned, certainly there is significant concern about 
what the Russian invasion will have in terms of impact on the 
global food supply, the potential for an increase in food 
insecurity in lower- to middle-income countries, in particular, 
not to mention cost of food prices associated with rising costs 
of fertilizer, some of the secondary and significant impacts of 
this invasion.
    We saw that just this week the reporting is that farmers in 
Ukraine are expected to plant 8.6 million fewer acres compared 
to 2021, and in addition to challenges with planting, of 
course, we see the Russian invasion destroying agricultural 
equipment and other essential elements of production, harvest, 
and ultimately storage.
    So, looking into the future, I am curious kind of in a 
broader scale if you could speak to some of the role of USDA or 
USAID in helping Ukraine rebuild its agricultural capacity, and 
related to that, as we are looking at the 2023 Farm Bill, are 
there any additional flexibilities that we should be 
considering in this frame of how we assist countries that might 
need to not only feed their hungry citizens, but also rebuilt 
their agricultural capacity? And I will open that up to both of 
you.
    Ms. Charles. Maybe I can take that question about Ukraine 
and their recovery.
    I would just say we are not waiting for the end of the war 
to work with the Government of Ukraine on resilience in their 
agriculture industry. Already, there is very close 
collaboration between existing USAID agricultural programs to 
help farmers with access to credit to purchase seeds, 
fertilizer, and other core inputs. We really are working very 
closely with the [Ministry of Agrarian Policy and Food] in 
Ukraine to ensure that they are able to, even in the midst of 
the war, plant and hopefully export as much as possible, as 
well as supporting small-hold farmers on local production for 
the local market.
    I would also say we do think there are a couple of 
flexibilities that could be pursued as part of the farm bill to 
give us greater flexibility to respond to what we know is going 
to be acute food insecurity throughout the world as a result of 
this crisis really for the next several years, we anticipate, 
including flexibility on the 202(e) cap to allow us to use a 
greater percentage of Title II funds to help build capacity of 
local partners and provide wraparound services to--along with 
U.S.-sourced commodities, as well as, again, greater 
flexibility to co-program IDA funds and Title II funds for 
similar types of reasons.
    Ms. Spanberger. One really quick follow-up question. Are 
you also engaging directly with our European Union partners as 
well?
    Ms. Charles. Yes. I am on the phone almost daily with my 
European Union partners. We are working very closely with them 
in the region. As well, Administrator Power does a weekly sync 
with our European partners, including on the responses out of 
Ukraine, but also how to support Ukraine in exporting as much 
as possible, even under the circumstances, to address that 
global food security crisis, and coordinating on humanitarian 
efforts overseas. We are pressing on our European partners to 
not divert humanitarian resources from other parts of the world 
to Ukraine, but to seek new resources for that humanitarian 
response in Ukraine, and I think that will be critically 
important next year in particular as we see the impacts of this 
food price spike.
    Ms. Spanberger. I know we are low on time. Hopefully the 
Chairman will be a little more generous.
    Mr. Whitley. Thank you, Congresswoman.
    Yes, so I think one of the things that USDA has provided 
early on to the crisis is an overall economic assessment and 
analysis of the situation. We have an economic reporting 
mandate from Congress and we report out monthly through our 
World Agricultural Supply and Demand Estimates the overall S&D 
situation, production/consumption, imports/exports, as well as 
stocks around the world. The next report comes out on April 8, 
so we have a lot more information in this month's report than 
we had in the previous month's report, and we work with our 
Office of the Chief Economist. The Chief Economist, Seth Meyer, 
briefed several of your staff a couple of weeks ago on this 
situation. So, that is the official USDA estimates and 
projections of the overall global supply and demand situation. 
So, we look forward to sharing that information publicly and 
with the world, because it certainly advises and gives insight 
as to how we see the overall situation and outlook of global 
commodities.
    Ms. Spanberger. Fantastic. To both of our witnesses, thank 
you so much, and I really appreciate your time.
    The Chairman. And we thank the gentlewoman from Virginia.
    The chair will now recognize Representative Barry Moore 
from the wonderful State of Alabama, the 2nd Congressional 
District.
    Mr. Moore. Thank you, Chairman Costa, and I want to thank 
all the witnesses for being in attendance today.
    Ms. Charles, this is a question I have. Can you explain why 
the International Disaster Assistance account which is being 
used for support does impact Ukraine, which we have been 
talking a good deal about today, but it generally precludes the 
use of U.S.-grown food. I am just curious what your thoughts 
are on that, and why?
    I can't hear her.
    Ms. Charles. Sorry. Our International Disaster Assistance 
account has maximum flexibility, including the ability to 
source food in-kind from the United States, if that is the most 
appropriate modality to respond in the context in which we are 
responding.
    Mr. Moore. Okay, and so, does that make sense to you? I 
know in situations where we try to support American 
agriculture, is it just a logistics issue most of the time with 
shipping costs, or could you maybe go in specifics on why you 
see that as--we don't use the U.S. food as often as we should 
maybe?
    Ms. Charles. We tend to--we start from a place of analyzing 
both the local needs and the local markets, and from that, 
determine the most appropriate modality, which at times is 
U.S.-sourced in-kind commodities. Often, that comes from the 
Title II account that we are discussing here today, but that 
could come from IDA-based assistance as well.
    Mr. Moore. Okay. Well, thank you, and thank you for your 
time.
    With that, Mr. Chairman, I yield back.
    The Chairman. All right, the gentleman yields back, and we 
thank him for his participation.
    The chair will now recognize Representative Randy Feenstra 
from the good State of Iowa, the 4th Congressional District.
    Mr. Feenstra. Thank you, Chairman Costa, and thank you, 
Ranking Member Johnson.
    Administrator Whitley, in your testimony you speak of how 
the Biden-Harris Administration is working to position our 
agriculture and rural communities to compete in the global 
economy. This morning, I was with our pork producers. I have 
also been talking with our soybean association and corn 
growers, and there is this passion, probably their number one 
issue, is trade, and especially advancing trade in the Pacific 
Rim, the second phase of the Chinese trade deal, and then USMCA 
issues with the GMO corn in Mexico.
    And I know you have talked about this already. I was 
listening earlier on, and you noted that the Administration has 
yet to fill the Under Secretary of Trade and Foreign 
Agriculture Affairs position, and the Chief Agriculture 
Negotiator has not been filled. I am really concerned about 
this. I want you to elaborate why. Why are we a year and 3 
months down the path and these are critical, critical to our 
agriculture community, and yet, these things haven't been 
filled? I just see a tremendous void here.
    Mr. Whitley. Thank you, Congressman Feenstra, for your 
question. So, at USDA, we do have a White House liaison office 
who manages the political appointments for the Department, so I 
would have to have the staff there get back to your staff on 
the particulars as to why the positions haven't been filled. 
But we do have an office that manages that.
    Now, I know there is--they are working very hard in trying 
to get those positions filled, but that is outside the normal 
responsibilities of FAS.
    Mr. Feenstra. Thank you, Administrator. Can you just bring 
back my comments to them, because these big organizations--I 
mean, for me, I am number one in hog production in the country 
in my district, and also close to the top in cattle, corn, 
soybeans, eggs, and they all need export markets. And so, this 
is so critical.
    Another question. As you mentioned in your testimony, U.S. 
farmers export billions of dollars of corn products to Mexico 
each year. Unfortunately, Mexico is taking a non-science-based 
regulatory approach to agricultural products, including a 
December 2020 Presidential decree promising to phase out all 
genetically modified corn imports by 2024. Already, we have 
seen the Mexican Government take steps to begin enforcing this 
decree. What steps is USDA currently taking to ensure that 
Mexico upholds these commitments that they made under the 
USMCA, and ensure that U.S. farmers have access to the latest 
agricultural technology based on sound science?
    I saw yesterday the USDA's press release that noted the 
Secretary's visit to Mexico, but unfortunately, did not mention 
at all any progress on the corn biotech approvals. Can you 
broach that subject at all, or tell us where we are at?
    Mr. Whitley. Yes. I can assure you that the Secretary's 
visit to Mexico, which was yesterday, that he met with the 
[Secretariat of Agriculture and Rural Development], Mr. 
Villalobos, as well as the President of Mexico to make the case 
on the importance of following sound science and international 
standards for many of these inputs and products that we 
cultivate here in the United States of America. That is a high 
priority for Secretary Vilsack as well as the Department, and 
we have made the case at all levels with Mexico that the 
direction they are headed is quite troublesome. We have heard 
from many industries here at home and they, too, are extremely 
troubled by this, and this will continue to be a major focus 
and prioritization at USDA.
    Mr. Feenstra. I am glad to hear that. I mean, it is so 
important that we keep Mexico as a trading partner. And 
frankly, I look at it and say the USMCA hasn't been agreed to, 
and there are parameters in there on how we move forward with 
this. So, that is great to hear.
    One more thing, and I know you have talked about this again 
already; but, we have a lot of vulnerabilities in our country 
when it comes to drought, when it comes to flooding, obviously 
with the war going on now we have these issues with fertilizer 
and drought-resistant seeds. So, I am just wondering, is there 
anything that you can add to our farmers? I mean, we are ready 
to plant. My family, in-laws, are ready to plant. Is there 
anything that we can do in this upcoming season yet that is 
right around the corner to help out our farmers to get the 
seeds or to get fertilizer to where it needs to be and we can 
get it taken care of?
    Mr. Whitley. Yes, Congressman. Recently USDA announced 
support for American farmers and offered up a program to 
encourage innovation, independent assessments, and to be 
resilient in terms of what we can to do to produce fertilizer 
here at home. So, hopefully that program spurs and generates 
some creative thought on behalf of American agriculture, and we 
can bring down those costs with resources right here at home.
    Mr. Feenstra. Thank you, and just one little note on that. 
Hog producers use natural fertilizer, so that is a way to do 
it.
    I yield back. Thank you.
    The Chairman. Well, the gentleman yields his time, although 
it has expired. But there is all sorts of good fertilizer out 
there that we can use.
    I want to thank our two witnesses for your testimony here 
this morning. I think it really gave us an opportunity to focus 
on the challenges we are facing today, and as we all noted, the 
current crisis that we are dealing with, and really get in 
front of it. And so, we are going to continue to work with both 
of you and the Department of Agriculture and the Secretary, 
because it is so important for all the reasons we are aware of.
    We are going to recess briefly for 5 minutes so that we can 
allow these two panel members to get back and do other 
important things, and we will have our second panel start 
shortly thereafter. So, we have a little break here that we are 
going to recess for, and then we will begin with our second 
panel just in a few minutes, okay?
    So, if you want to take a little break, and the chair will 
recall the Committee shortly.
    [Recess.]
    The Chairman. All right. The Committee will now come back 
to order, and I want to recognize our second panel. We had a 
good first part of our hearing, and we want to thank our two 
witnesses for joining us. Our first witness is Ms. Krysta 
Harden, who is the President and Chief Executive Officer of the 
U.S. Dairy Export Council, and our next witness is Mr. Bill 
O'Keefe, and we are appreciative of his participation as well. 
I think both of you are old hands here, appearing before 
Congress, and you understand that you have 5 minutes 
appropriately, and we appreciate very much your being here.
    As I said on the outset this morning, we have a crisis that 
we are dealing with as a result of world events, and the 
situation in Ukraine, the horrific invasion of Ukraine by 
Russia is having a ripple effect across the world. And the 
markets that are being impacted in terms of food availability 
is something that this Subcommittee is very concerned on, and 
we are very interested in how we anticipate this storm that is 
coming, and address it in every best way that we possibly can.
    So, Mr. O'Keefe, your previous background is with 
mobilization of Catholic Relief Services and in your current 
role as Executive Vice President, we are looking forward to 
hearing your testimony as well. So, I want to thank you folks 
for both being here, and let us begin with Mr. O'Keefe, and we 
will go from there. Thank you very much. Please proceed.

STATEMENT OF BILL O'KEEFE, EXECUTIVE VICE PRESIDENT FOR MISSION 
               AND MOBILIZATION, CATHOLIC RELIEF 
                    SERVICES, BALTIMORE, MD

    Mr. O'Keefe. Thank you so much, Chairman Costa, Ranking 
Member Johnson, and Members of the Subcommittee for the 
opportunity to testify today on the implementation of 
international food assistance programs authorized under Title 
III of the farm bill.
    CRS was founded in 1943 due to an outpouring of concern 
from Catholics across the United States to help refugees from 
World War II. I have served CRS, starting in Africa, for over 
40 percent of that time, implementing, supervising, visiting, 
and supporting USDA and USAID food assistance programs.
    The arc of how Congress, USAID, and USDA have gradually 
shaped these programs bends towards sustainability, resilience, 
and flexibility. Marginal change, though, will no longer meet 
the challenges we as a country and the poor of the world face.
    After decades of progress, global hunger has steadily risen 
for 7 consecutive years. The three C's, conflict, climate 
change, and COVID-19, are exacerbating chronic and severe food 
insecurity for people living in highly vulnerable and fragile 
contexts. This hearing has already brought out how Putin's war 
in Ukraine further threatens catastrophic global food 
insecurity. CRS Madagascar has already reported a 200 to 300 
percent price hike in staple crops like wheat and vegetable 
oil, which dramatically cuts the number of vulnerable people 
our Title III supported program can reach.
    As others have already mentioned, we are going to need 
significant supplemental food assistance and other 
international disaster assistance to prevent famine, death, and 
suffering in numerable places. We at CRS are not the hyperbolic 
types, but we are extremely concerned.
    This farm bill, though, provides an opportunity to get in 
front of the storm that is coming. The non-emergency 
international food assistance programs are critical mechanisms 
for helping communities prepare for, adapt to, and even thrive 
in the world of the three C's. We need to scale and maximize 
investments in multi-year development efforts aimed at 
sustainably reducing poverty and putting marginalized 
communities on a path towards resilience.
    People are multi-sectoral beings, and their families and 
communities have varied and complex multi-sectoral needs. Food 
for Peace Title II programs uniquely respond to those needs 
according to local contexts. In Haiti, Ethiopia, Kenya, 
Madagascar, Uganda, the DRC, and Niger are Title III supported 
resilience food security activities, support families to 
recover from crises and transition from subsistence farming 
into greater market engagement. These critical activities 
depend on a locally determined and flexible mix of cash and in-
kind agricultural commodities, and the ability to design 
programs based on present on the ground needs.
    That is why CRS recommends that the next farm bill 
authorize full flexibility of funding for Title II non-
emergency resources, and the removal of the cap in 202(e) 
funding that Assistant to the Administrator Charles mentioned 
earlier. Implementing partners must be able to mix cash and 
commodities and multi-sector activities in direct response to 
local context, experience of local partners, and changing 
realities on the ground. In-kind commodities are critical in 
food deficit context, such as Madagascar and Ethiopia right 
now. Market-based analyses frequently point, though, to a 
balance of food sourced from the United States, food sourced 
locally, mobile money, vouchers, cash, alongside a mix of 
supporting activities. Furthermore, COVID-19 disruptions in 
adaptations along with global food supply shortages and price 
inflation exacerbated again by the war on Ukraine are limiting 
the impact and sustainability of programs, given the 
inflexibility of current Title II resources. Without a 
legislative fix that makes the non-emergency resources fully 
flexible, program design may undermine some of the best 
practices to fight hunger.
    Recently in designing RFSA in Haiti, these restrictions 
required too much commodity in the final year or 2 of the 
award, which limited our ability to transition to full self-
reliance of the communities that we are serving.
    I urge Congress to consider building this greater 
flexibility for non-emergency programs in the upcoming farm 
bill, and to adopt the other recommendations my written 
statement elucidates, including improving the Bill Emerson 
Humanitarian Trust and school feeding through the McGovern-Dole 
Food for Education Program, and reauthorizing the other notable 
trade title programs such as agricultural value chain support 
provided through Food for Progress. Emergency and long-term 
assistance, and eventually Feed the Future play dynamic roles 
as layered and sequenced responses that are a lifeline for 
hungry people, and build the foundation for more resilient and 
prosperous communities.
    We look forward to continuing our partnership with 
Congress, this Committee, this Subcommittee, USDA, and USAID to 
strengthen farm bill Title III international food assistance, 
and we thank you for the opportunity to share our work, and I 
welcome any questions that you might have.
    Thank you.
    [The prepared statement of Mr. O'Keefe follows:]

   Prepared Statement of Bill O'Keefe, Executive Vice President for 
   Mission and Mobilization, Catholic Relief Services, Baltimore, MD
    Thank you, Chairman Costa, Ranking Member Johnson, and Members of 
the Subcommittee, for the opportunity to provide testimony today on the 
implementation of international food aid programs authorized under 
Title III of the farm bill. My name is Bill O'Keefe, and I am the 
Executive Vice President of Mission and Mobilization for Catholic 
Relief Services (CRS), the humanitarian relief and development agency 
of the Catholic community and Church in the United States.
    CRS was founded in 1943 due to an outpouring of concern from 
Catholics across the United States to help thousands of survivors and 
refugees of World War II with emergency food, water, and shelter 
assistance. It was from this initial response that CRS realized the 
overwhelming needs that existed not only in mid-war Europe, but across 
the globe for people impacted by poverty and facing crises, leading CRS 
to establish its mission of serving the world's most vulnerable. Today, 
we partner with over 2,000 local, national, and international Catholic 
institutions and structures, faith-based and secular organizations, and 
the U.S. Government to assist people on the basis of need, not creed, 
race, or nationality. Motivated by the desire to preserve and uphold 
the sacredness and dignity of all human life, CRS serves more than 150 
million people in over 100 countries globally. Through life-saving 
assistance for those impacted by unanticipated socioeconomic, 
political, and climate-related shocks and long-term, holistic 
development projects, CRS is working to sustainably reduce poverty, 
build resilience, and promote peace and prosperity for all God's 
children.
    After 2\1/2\ decades of historic and landmark progress that reduced 
the number of hungry and malnourished people in the world by half, 
global hunger is steadily on the rise for the seventh year in a row. 
The interconnected and compounding drivers of hunger that are a 
consequence of what we refer to as the ``three Cs''--climate change, 
conflict, and now COVID-19--are exacerbating chronic and severe food 
insecurity for people living in highly vulnerable and fragile contexts. 
This has contributed to a significant backslide in once-achieved, 
record-breaking progress, pushing our world entirely off-track to 
achieving zero hunger and malnutrition by 2030.
    As a leading U.S. Government implementing partner responding to 
emergencies around the globe, it is abundantly clear that U.S. 
international food aid programs have and continue to fulfill a dynamic 
role as mainstays of the American international response to the global 
hunger crisis and reflect the generosity of the American people. 
Through the combined work of farm bill-authorized international food 
aid programs like Title II Food for Peace, McGovern-Dole Food for 
Education, Food for Progress, the Farmer-to-Farmer program, the Bill 
Emerson Humanitarian Trust, and the International Agricultural 
Education Fellowship that effectively deliver a hand-up to people in 
need, the U.S. Government in partnership with organizations like CRS 
continue to inspire hope for those who are often left-behind.
    As work begins to reauthorize the 2023 Farm Bill, CRS requests the 
following reforms to enhance international food aid programs:

   We request full flexibility for non-emergency Title II Food 
        for Peace development programming, eliminating constraints 
        around associated costs, such as 202(e) and the commodity 
        requirement.

   We request that the Community Development Fund is 
        reauthorized at an appropriated funding level to ensure 
        continued and long-term flexible funding to support activities 
        that holistically address hunger needs and build resilience.

   We request additional funding, at the discretion of the U.S. 
        Department of Agriculture, for expanded local and regional 
        procurement activities in the McGovern-Dole Food for Education 
        program to enhance sustainability.

   We request that funding for commodities provided in the Bill 
        Emerson Humanitarian Trust be made accessible to respond to 
        unanticipated food crises; authorize a replenishment mechanism 
        to respond to recurrent food security needs arising globally; 
        allow for the prepositioning of emergency food aid so that food 
        can arrive as quickly as possible in the face of an emergency; 
        and permit the trust to cover associated costs, like ocean 
        freight and warehousing, when Commodity Credit Corporation 
        funding is not available.
The Food for Peace Program
    For more than 65 years, the Food for Peace program has provided 
food assistance to over four billion people in need around the world. 
Today, the program provides funding for both emergency and development 
food security responses. In an emergency, Food for Peace delivers U.S.-
sourced agricultural commodities to people facing crises. This 
emergency aid allows people to receive enough food to survive and 
prevents them from either having to migrate in search of better 
opportunities or sell off critical assets like seeds or livestock.
    Food for Peace also authorizes a minimum of $365 million a year--of 
which $15 million supports the Farmer-to-Farmer program--for non-
emergency, development programming that works with the most vulnerable 
communities in the late-recovery stage to build back better and create 
a pathway towards resiliency so that communities can once again provide 
for themselves and thrive. These multi-sectoral, multi-year programs 
address a number of sectors simultaneously--agriculture, nutrition, 
land regeneration, water management, infrastructure improvements, and 
market engagement--in order to holistically meet the needs of 
communities. The root causes of hunger, malnutrition and poverty are 
many and often interrelated; therefore, multi-sectoral programming 
effectively breaks down those silos that occur too often in foreign 
assistance, allowing implementers to tackle challenges from a systems-
based approach.
    CRS is currently utilizing Food for Peace Title II funding to 
respond to emergencies in Ethiopia, Sudan, South Sudan, and Madagascar, 
in addition to non-emergency funding for multi-year Resilience Food 
Security Activities (RFSAs) in Kenya, Uganda, Ethiopia, the Democratic 
Republic of Congo, Haiti, Niger, and Madagascar.
Food for Peace in Southern Madagascar
    The effects of an increasing global temperature, resulting in more 
frequent and extreme climate-related disasters, environmental 
degradation, increased resistance of agricultural pests and diseases, 
and decreased nutritional quality of staple crops, is posing a severe 
threat to the global food and agriculture system. Unfortunately, those 
who have contributed the least to the climate crisis will suffer the 
greatest consequences due to the impact on their livelihoods from 
lessening crop yields at best, or total crop failure at the very worst. 
CRS is already witnessing the devastating impacts of climate change on 
the lives of the communities we serve.
    In Southern Madagascar, Catholic Relief Services, using emergency 
Title II Food for Peace resources, is responding to one of the worst 
multi-year droughts in the country's history. Poor rainfall, in 
addition to the economic impacts of the COVID-19 pandemic, sandstorms, 
and pest infestations, have driven nearly two million people into 
crisis-level hunger, with approximately 30,000 experiencing famine-like 
conditions. Through funding provided by the U.S. Agency for 
International Development (USAID) that totals $40 million over 2 years, 
CRS is distributing emergency food aid to over 220,000 people and 
providing nutrition counseling and monitoring to over 25,000 children 
who are vulnerable to wasting, the most acute form of malnutrition. 
Additionally, CRS is repairing water points to provide much-needed 
water in this extremely arid environment, while simultaneously training 
program participants on how to maintain and manage their water supply. 
As a part of this emergency response, CRS is also building the 
foundation for resilience by integrating long-term solutions to drought 
and poverty. We are working with communities to strengthen local 
governance structures and are encouraging climate-smart agricultural 
practices. Additionally, the program supports youth and gender-
sensitive approaches to agricultural development and community 
decision-making, while fostering financial literacy to help 
participants learn how to save and manage their money. For Madagascar's 
poorest people, Food for Peace is a lifeline that is staving off hunger 
and alleviating human suffering.
    Nearby to this response, CRS is implementing a 5 year Resilience 
Food Security and Nutrition Program that works with the most vulnerable 
people, households, and communities to prevent and reduce acute food 
insecurity in Madagascar's Deep South. The project pursues a multi-
sectoral approach to support families by improving their health; 
livelihoods through agriculture, fisheries, and livestock; and social 
services and safety nets. Through this response, CRS--with the support 
of the U.S. Government--is addressing the root causes of hunger and 
poverty by building the foundations for sustainable agriculture-led 
growth that will prevent previously vulnerable populations from falling 
back into poverty.
Title II Food for Peace Recommendations
    We thank Congress for continuing to support the Food for Peace 
Title II program and honor the good work it does in places like 
Madagascar. Additionally, CRS supports the reauthorization of Title II 
Food for Peace in the 2023 Farm Bill, acknowledging its role in 
providing both emergency food assistance and implementing risk-reducing 
and resilience-building activities that reduce poverty among the most 
vulnerable, thereby decreasing the need for future humanitarian 
assistance. However, as unprecedented crises continue to arise 
globally, and with funding and resources failing to keep up with the 
pace of the global need, we recommend improvements to the program to 
ensure that CRS and other implementers are utilizing the best and most 
appropriate tools in our toolbox, reaching as many families in need as 
possible.
    A core focus of CRS' implementation of Food for Peace development 
programs is on improving the livelihoods of small-holder farm families 
as a means to achieving food security and optimal nutrition. This 
requires transitioning families from subsistence farming into greater 
engagement with markets with the goal of sustainability. We do this by: 
(1) building sustainable sources of income through savings groups, 
diversified livelihoods, new small-scale business opportunities, and 
links to sources of loans and other financial instruments; (2) 
improving capacity within local governments and civil society actors to 
carry forward new skills and practices introduced in programs, but also 
to continually learn and adapt practices to new challenges long after a 
program ends; and (3) by building lasting linkages between 
beneficiaries, service providers, and other market actors so that once 
the program is over, the network remains in place.
    These activities require the use of cash-based resources, rather 
than in-kind commodities, and the ability to design programs based on 
present, on-the-ground needs, as opposed to legislative policy 
directives.
    That is why CRS is requesting full flexibility of funding for Title 
II non-emergency resources, so that implementing partners have the 
agency to utilize the best and most appropriate modality choice to make 
responses and interventions context-specific and poverty-reducing. The 
statutory 20% cap on 202(e) funding, which provides fully flexible cash 
to support multi-sectoral development interventions (like the above) 
that are essential to graduating communities out of poverty, is not 
sufficient to meet the needs and objectives of Title II development 
programming. This is even more true today, as programming costs are 
increasing due to COVID-19 and global food supply shortages and price 
inflation as a result of the war in Ukraine. While we recognize the 
need for some in-kind aid in contexts like Madagascar or Ethiopia, we 
need the flexibility to pursue context-specific approaches using 
market-based analyses that address the needs of the people we are 
serving on the ground, which requires a more proportionate balance of 
food and cash.
    CRS also supports the reauthorization of the Community Development 
Fund (CDF), Development Assistance funding provided through State, 
Foreign Operations appropriations, that is transferred to the Bureau 
for Humanitarian Assistance to directly fund or supplement Food for 
Peace development programming. The funding provided in CDF allows for 
fully flexible direct assistance, much like 202(e), to support 
sustainability activities that improve livelihoods, the nutritional 
status of communities, and enhance long-term economic productivity. We 
request that Congress maintain the mechanism for CDF in the next farm 
bill, reauthorizing it at an appropriated funding level to ensure 
continued and long-term flexible funding to support activities that 
holistically address hunger needs and build resilience.
    Last, we emphasize the need for continued integration of climate 
adaptation interventions into Title II non-emergency, development 
responses to ensure that communities hardest hit by the impacts of a 
changing climate are not further pushed into poverty and food 
insecurity. Universally mainstreaming climate-smart and agroecological 
approaches into long-term food security activities enables rural 
farmers to strengthen their climate resilience, sustainably improve 
their incomes and livelihoods, incorporate locally led approaches for 
community capacity building, and strengthen the global food system. 
These activities include restoring degraded landscapes, developing 
better water management systems, planting drought-resistant crops, 
repairing soil health, and preserving biodiversity.
COVID-19's Impacts on Food Security
    In the early days of the COVID-19 pandemic, when widespread 
movement restrictions were in place and schools across the world were 
closed, children who participate in the McGovern-Dole Food for 
Education program were impacted by unanticipated disruptions to their 
daily meals and education. For many of the children, who overwhelmingly 
come from chronically food-insecure households, a school meal is the 
only reliable source of food they are guaranteed to receive on a daily 
basis. Furthermore, the pandemic's stress on the global food and 
agriculture system resulted in inflated prices and widespread food 
shortages, making nutritious food less affordable and accessible to 
marginalized households and communities.
    Thanks to the flexibility of USDA to help the McGovern-Dole program 
quickly pivot projects across the world--such as CRS's Learning for 
Life project in Guatemala--were able to adapt and pivot to the 
challenges posed by the pandemic by administering take-home rations at 
socially distanced food aid distribution sites. This allowed caregivers 
to collect food to feed themselves and their children, in addition to 
receiving learning materials so young children can continue their 
education at home.
McGovern-Dole Food for Education Recommendations
    CRS recognizes the tremendous work of the McGovern-Dole program in 
serving millions of primary school children, infants, and new mothers 
across 40 countries in the 2 decades since its inception in 2002. 
Additionally, we express our utmost gratitude to Congress for 
continuing to fund and support the program's existence. Currently, CRS 
leads implementation in nine McGovern-Dole funded projects in: 
Guatemala, Honduras, Burkina Faso, Sierra Leone, Mali, Guinea-Bissau, 
Benin, Togo, and Laos. Each of these programs focus on improving 
childhood nutrition, promoting literacy, and supporting optimal 
maternal health outcomes for pregnant and lactating women. CRS also 
believes that continued support and robust investments in the McGovern-
Dole Food for Education program aligns well with the U.S. Government's 
commitment to improving the nutrition, health, and education of 
vulnerable children worldwide as a member of Global School Meals 
Coalition. The coalition aims to make nutritious meals available for 
all children around the world by 2030. We stand with USDA in their 
commitment to graduation and a transition to public ownership, 
supporting efforts to build the capacity of host country governments to 
sustainably maintain their own independent school meal programs.
    In the 2018 Farm Bill, a change to the McGovern-Dole program was 
incorporated that required USDA to allocate 10% of total McGovern-Dole 
funding to support local and regional procurement (LRP) activities. 
Previously, the agency had the discretion to choose which McGovern-Dole 
projects would receive funding for LRP. The United States Department of 
Agriculture (USDA) interpreted this change by universally applying LRP 
to all McGovern-Dole programs across the board. CRS welcomes the 
universal application of LRP activities into all active McGovern-Dole 
programs, enabling McGovern-Dole implementers the ability to supplement 
U.S. in-kind aid with culturally appropriate and locally sourced 
commodities, with the additional benefit of stimulating the local 
market by supporting livelihoods within the community.

    In the upcoming farm bill, CRS requests that Congress allow for 
increased LRP activities to be determined on a yearly basis at the 
discretion of USDA, within a Congressionally directed authorizing 
window, to promote long-term sustainability and transition schools to a 
self-sustaining home-grown school feeding system. Furthermore, we 
request that the current status quo of 10% serves as a floor for 
McGovern-Dole LRP funding going forward, and that increases to LRP do 
not come at the expense of McGovern-Dole programs that improve food 
security; reduce the incidence of hunger; improve literacy and primary 
education--particularly with respect to girls; and maternal, infant, 
and child nutrition programs for pregnant women, nursing mothers, 
infants, and children who are 5 years of age and younger.

    In places like Sierra Leone, where CRS is implementing McGovern-
Dole projects in two districts, the host government has shown 
increasing interest in a home-grown school feeding model for schools 
across the country, acknowledging its role in serving as a vital safety 
net system for hungry children who rely on daily school meals. An 
increase in LRP commodities will allow McGovern-Dole programs the 
opportunity to work with local farmers to become a reliable market for 
schools in the community. Purchasing staple foods locally helps create 
a bridge that supports rural economies and livelihoods, diversifies 
school meals with locally appropriate foods to increase nutritional 
outcomes in young children, and strengthens local infrastructure and 
capacity.
    Additionally, investments in LRP support USAID's Locally Led 
Development Initiative by engaging local actors in a holistic and 
meaningful way as co-equal partners working to strengthen local 
capacity, enable local actors to facilitate decision-making and develop 
their own solutions, and mobilize local resources to catalyze 
sustainable and transformative development outcomes.
CRS in South Sudan
    Conflict is the primary driver of hunger globally with more than 
half of the world's hungry people living in areas of extreme violent 
conflict. Protracted crises, like conflict, combined with poor 
governance and corruption pose the most significant and grave threat to 
global food security, beyond--though exacerbated--by other drivers like 
climate change and COVID-19. South Sudan provides one of the clearest 
examples of the inexplicable linkage between hunger and conflict and 
the vicious cycle it creates. Since South Sudan's founding in 2011, the 
nation has been mired by extreme violent conflict, resulting in high 
levels of displacement, both internally and externally. Furthermore, 
the ongoing conflict has severely impacted food production in the 
country, with a record 5.8 million people currently facing a severe 
hunger crisis. Some areas are dealing with fighting. Others struggle 
with the influx of 1.6 million displaced people. This is in addition to 
a persistent El Nino-driven climate pattern which has caused the most 
severe drought in decades, with nearly half of the country's population 
unsure of where their next meal will come from.
    Since January 2015, CRS continues to implement emergency relief and 
long-term development programs within South Sudan to provide 
agriculture, nutrition, and water and sanitation assistance, as well as 
promote peace-building and social cohesion to thousands of program 
participants. In 7 years, CRS has distributed food and nutritional 
supplements to over \1/2\ million people; provided bags of grain and 
training on post-harvest storage to roughly 4,000 farmers; repaired 80 
water sources; and trained communities on how to keep their water 
supply safe and flowing. We do this work in partnership with USAID 
through two programs: The Livelihoods Recovery and Resilience Program 
and the Resilience Food Security Program both funded by the USAID's 
Bureau for Humanitarian Assistance. Together, CRS is having an impact 
in over 1.3 million lives through integrated and multi-sectoral 
programming. A major component of the Livelihoods Recovery and 
Resilience Program is distributing in-kind food aid from the U.S. to 
families in need in exchange for work on community projects that 
rebuild roads and irrigation systems.
The Bill Emerson Humanitarian Trust
    While Title II Food for Peace provides significant emergency 
resources to many countries around the world, hunger needs have 
ballooned significantly in recent years. The Bill Emerson Humanitarian 
Trust (BEHT) was created with the intent that U.S. Government emergency 
resources could be scarce in any given year, therefore resources 
provided in the trust can supplement emergency food needs when Food for 
Peace resources have been fully utilized.
    The trust was originally established in 1980 to hold up to 4 
million metric tons of wheat. It was later expanded to include a number 
of other commodities and was renamed the Bill Emerson Humanitarian 
Trust in 1988. Today, the BEHT has morphed into an all-cash reserve for 
the purchase of U.S. commodities for when unforeseen food needs arise. 
USDA and USAID jointly administer the BEHT, and the Commodity Credit 
Corporation (CCC) holds all BEHT funds. Equivalent to a rainy-day fund, 
the BEHT allows USDA and USAID the option to provide additional food 
assistance quickly, without having to rely on supplemental 
appropriations from Congress.
    Unfortunately, despite increasing hunger needs and funding 
shortfalls, the resources in the trust have been mostly untapped, even 
though there is significant mobilization capacity and thousands, if not 
millions, of additional people who could benefit from this lifesaving 
assistance. Most recently, the trust was last accessed in 2014 to 
supplement a Food for Peace emergency response in South Sudan. The 
response required a $50 million drawdown from the trust and $130 
million in associated costs from the CCC. At the time, very remote 
regions of South Sudan, where millions of people were on the brink of 
starvation, were impossible to reach by land and required more costly 
airdrops of food to urgently arrive to these areas. The funding in the 
BEHT made this effort possible; otherwise, hundreds of thousands of 
South Sudanese would have potentially faced death due to catastrophic 
levels of hunger as a result of ongoing war.
The Bill Emerson Humanitarian Trust Recommendations
    Due to persistent global food insecurity, and looming famines 
around the world, CRS requests that Congress make reforms to the BEHT 
that: (1) eliminate the barriers for accessing funding, (2) provide a 
replenishment mechanism to ensure long-term use of the trust in the 
face of growing global food insecurity, (3) allow for prepositioning of 
food in advance of anticipated crises, and (4) cover all associated 
costs, such as ocean freight and warehousing, when CCC funding is no 
longer available. According to the President's Fiscal Year 2023 budget 
request, the trust currently holds approximately $282 million in 
funding.
Additional Farm Bill Recommendations
    CRS thanks Congress for continuing to support Farmer-to-Farmer 
(F2F), Food for Progress (FFPr), and the International Agricultural 
Education Fellowship. Each of these programs, in combination with Title 
II Food for Peace, McGovern-Dole Food for Education, and the Bill 
Emerson Humanitarian Trust, provide a holistic package of interventions 
that are layered and sequenced as communities transition from crises 
and recovery to long-term development interventions that connect small-
holder farmers to markets, build connections with private-sector 
enterprises, and foster a legacy of food security in communities that 
were once dependent on U.S. Government assistance. In the upcoming farm 
bill, CRS supports:

   The reauthorization of the FFPr program, acknowledging its 
        achievements in places like Uganda, where CRS has helped local 
        vanilla farmers improve their livelihoods. Additionally, we 
        support the reauthorization of pilot programs funded by FFPr 
        for direct technical assistance of $10 million annually to 
        support agriculture extension projects, rather than through 
        monetization, as authorized in the 2018 Farm Bill for Fiscal 
        Years 2019-2023.

   The reauthorization of the International Agricultural 
        Education Fellowship, established in the 2018 Farm Bill, to 
        allow U.S. citizens--in partnership with implementing 
        organizations like CRS--the opportunity to establish school-
        based agricultural education and youth extension programs in 
        communities ripe for capacity building and scaling.

   The reauthorization of the F2F program, which partners 
        American farmer volunteers with local small-holder farmers, 
        producer groups, and rural businesses to develop their local 
        capacity with the goal of increasing food production and rural 
        incomes, expanding economic growth, and addressing 
        environmental and natural resource management challenges. We 
        hope F2F's reauthorization will build off lessons learned from 
        COVID-19 by continuing to pair U.S. volunteers with local 
        experts to encourage sustainable knowledge and skills transfer.
The War in Ukraine's Impacts on Food Security
    The ongoing conflict in Ukraine is having an undeniable impact on 
the state of global food security within Ukraine and around the world. 
As a top exporter of wheat and sunflower oil, accounting for 40% and 
60% of the global supply, respectively--many countries throughout North 
and East Africa and the Middle East are already feeling the effects of 
food price spikes and global supply shortages. Furthermore, 
agricultural inputs like fertilizer--which are vital for strong crop 
yields--have also taken a massive hit to its global supply due to 
sanctions imposed on Russia, who is the lead global supplier of potash, 
ammonia, and other soil nutrients. Countries on the brink of famine, 
like South Sudan, Yemen and in the Horn of Africa, are particularly 
vulnerable to the worsening impacts of the ongoing war in Ukraine, with 
an unfortunate likelihood of new hotspots arising in places like 
Lebanon, Egypt, and Jordan. In fact, global projections predict a food 
price crisis worse than 2008 and 2009, when widespread food scarcity 
led to civil unrest throughout the Middle East.
    While there is great uncertainty as to how significantly food 
prices and availability will be impacted over the next 4 to 6 months, 
it is clear that the worst is yet to come. Staple crops like wheat, 
maize (predominantly for livestock), and sunflower oil, in addition to 
fertilizers and crude oil--a necessary input for food use, production, 
and distribution--have already seen price increases as high as 200-300% 
from pre-conflict levels. In anticipation of what is yet to come, the 
U.S., in partnership with implementing organizations like CRS, need to 
be prepared to mobilize rapidly in advance of a potentially 
deteriorating global food security situation. As with any evolving 
humanitarian crisis, funding needs to be applied in a flexible and 
adaptive manner to avoid programming delays and ensure that the most 
appropriate modality is utilized to efficiently meet the needs of 
impacted populations and local market conditions. Additionally, 
interventions--even in a response setting--need to prioritize long-term 
resilience building, disaster preparedness, and strengthening of local 
structures to have the greatest possible impact.
Conclusion
    As Pope Francis urgently reminds us, ``There needs to be a constant 
acknowledgement that the right of every person to be free of poverty 
and hunger depends on the duty of the entire human family to provide 
practical assistance to those in need.'' This is why CRS thanks 
Congress for continuing its moral leadership in support of 
international food assistance programs like Food for Peace, McGovern-
Dole Food for Education, Farmer-to-Farmer, the Bill Emerson 
Humanitarian Trust, the International Agriculture Education Fellowship, 
and Food for Progress.
    In light of climate change, conflict, and COVID-19 aggravating 
severe hunger needs globally--and most recently, the conflict in 
Ukraine causing extreme price volatility and food supply shortages--we 
urge Congress to implement vital reforms to improve international food 
aid programs, such as:

   Allowing for full flexibility in non-emergency Title II Food 
        for Peace development programming, eliminating constraints 
        around associated costs, such as 202(e) and the commodity 
        requirement.

   Authorizing the Community Development Fund at an 
        appropriated funding level to ensure continued and long-term 
        flexible funding to support activities that holistically 
        address hunger needs and build resilience.

   Expanding local and regional procurement activities in the 
        McGovern-Dole Food for Education program to enhance 
        sustainability.

   Allowing resources in the Bill Emerson Humanitarian Trust to 
        be made more accessible to respond to unanticipated food 
        crises; authorizing a replenishment mechanism to respond to 
        recurrent food security needs arising globally; allowing for 
        the prepositioning of emergency resources so that food can 
        arrive as quickly as possible in the face of an emergency; and 
        permitting the trust to cover associated costs, like ocean 
        freight and warehousing, when Commodity Credit Corporation 
        funding is not available.

    These changes will allow us to nuance our responses to the numerous 
emergencies around the world, thus enhancing program impact and 
ensuring that CRS and our partners are reaching those in need with the 
most appropriate and context-specific responses to reduce vulnerability 
and address the root causes of hunger and malnutrition. Furthermore, 
CRS will supplement our farm bill outreach and requests by working with 
appropriators on the Agriculture Appropriations Subcommittee to 
increase U.S. investments to key accounts in the upcoming fiscal year 
and beyond. While policy-related improvements to Title III food aid 
programs through the farm bill reauthorization process are critical for 
catalytic community-level change, commensurate increases to baseline 
funding through Congressional appropriations is equally crucial for 
programs to keep up with rapidly increasing global needs.
    As a leading implementer of U.S. international food aid programs, 
we can attest to the very real and lifesaving impact that these 
programs are having on countless lives around the world. Our proposed 
reforms reflect our experiences working with marginalized communities 
on the ground and a sincere understanding of how to make these great 
programs even better. We are grateful for your consideration of our 
recommendations and look forward to continuing our partnership with 
Congress, especially with Members of this Subcommittee, and the 
Administration to strengthen farm bill Title III international food aid 
programs, protecting their core focus of alleviating hunger and human 
suffering to save lives.
    Thank you for this opportunity.

    The Chairman. Well, thank you, Mr. O'Keefe, and your 
testimony is timely. Your suggestions on modifications with 
regards to Title III and implementation of various programs, 
given the current circumstances and the crisis that we are in, 
I fear only to grow worse, are very important and I am sure 
other Members will revisit this in the time of questioning.
    In this time of--and you noted this pandemic, we have tried 
to learn to continue to work as efficiently as we can through 
Zoom and hybrid hearings, but we don't always get it right. I 
certainly don't always get it right, and I was focused on those 
that were physically here on the panel, but we have two other 
members that are on the panel that I failed to properly 
introduce, and I want to do that now.
    Our next witness on this second panel today is Ms. Krysta 
Harden, who is the President and Chief Executive Officer of the 
U.S. Dairy Export Council, and then, of course, I noted earlier 
that we have Ms. Nicole Berg who will be testifying on behalf 
of the National Association of Wheat Growers, and then our 
fourth witness of this panel, Dr. Arif Husain, who is the Chief 
Economist of the World Food Programme. Dr. Husain is also 
joining us today from a long ways away. He is at the Democratic 
Republic of Congo, and we thank him for making the 
extraordinary effort to be testifying today before the second 
panel.
    So, let us begin with Ms. Krysta Harden, who is the 
President and Chief Executive Officer of the U.S. Dairy Export 
Panel--Council, excuse me. Ms. Krysta Harden.

        STATEMENT OF KRYSTA HARDEN, PRESIDENT AND CHIEF 
         EXECUTIVE OFFICER, U.S. DAIRY EXPORT COUNCIL, 
                         ARLINGTON, VA

    Ms. Harden. Thank you, Mr. Chairman, Ranking Member 
Johnson, and other Members of the Committee for inviting me 
today.
    I am not in the Congo, but I have to tell you on my family 
farm in southwest Georgia, Congressman Bishop's district, there 
are a lot of people in the world I would disappoint and leave 
early and come to be in person in this hearing, but my parents 
are just not one of them. So, I had to be with them this week 
and I really regret not being with all of you in person.
    The Chairman. We will give you a raincheck.
    Ms. Harden. My name is Krysta Harden. I am testifying on 
behalf of the U.S. Dairy Export Council. I serve as President 
and CEO.
    USDEC represents the global trade interest of U.S. dairy 
farmers, processors, cooperatives, dairy ingredient suppliers, 
and export trading companies, and USDEC works closely with our 
partner, the National Milk Producers Federation, on trade-
related issues.
    Since USDEC was founded 27 years ago, dairy exports have 
grown ten-fold, reaching a record $7.75 billion last year. All 
told, dairy exports accounted for about 17 percent of milk 
production. Our impressive export results, made possible in 
part by U.S. programs and policies that support exports, many 
overseen by this Committee. Today, I will discuss how existing 
farm bill programs, potential new farm bill provisions, and 
other trade policies can help drive the global demand and 
growth our dairy farmers and manufacturers need in order to 
create jobs in both rural and urban America.
    The farm bill promotes American produced products through 
the Market Access Program and the Foreign Market Development 
Program, both of them instrumental to USDEC's efforts to 
support dairy exporters and build a market share against 
entrenched competitors. My written testimony includes a few 
specific examples and the many ways in which USDEC has used 
these programs in markets around the world.
    An important part of MAP is its cross sector global-based 
initiative program--now, that is a mouthful, including one that 
USDEC leads that is noted to preserving export access for U.S. 
foods and beverages using common names. This GBI has been 
extremely important to American agriculture's work to combat 
EU's abuse of geographic indicators by imposing new trade 
barriers in various international markets. MAP and FMD offer 
excellent returns. For every dollar invested in the export 
market development programs, over $20 is returned in export 
revenue. Yet, while our exports have expanded in whole, MAP and 
FMD resources have remained stagnant over the years. Given 
their critical missions and their impressive results, USDEC 
urges Congress to double MAP and FMD funding in the next farm 
bill.
    Another major component of the farm bill are U.S. food aid 
programs--we have talked a lot about those today--which play an 
important role in helping support the world's nutrition needs. 
However, U.S. dairy products are not typically a sizable piece 
of our food aid purchasing. This is despite of the robust 
scientific evidence on dairy's unique nutritional benefits.
    To make better use of these programs, Congress should seek 
opportunities in the farm bill to increase the use of U.S. 
dairy ingredients in food aid, including by scaling up 
purchases of ready-to-use therapeutic foods.
    We also ask this Committee to consider a new provision. 
First, we recommend language to combat the EU's abuse of 
geographic indications. Legislation that can ensure USTR and 
USDA more proactively can defend common use names using a 
variety of tools. We also recommend establishing specific 
timeframes for the Administration to put forward critical 
nominees, specifically the USTR Agricultural Ambassador, and 
the USDA Under Secretary for Trade and Foreign Ag Affairs.
    While the farm bill's related provisions are vital to 
American exports, Congress should also consider and work to 
promote additional policies that are key in advancing market 
access for farmers and food manufacturers. I just speak on two. 
I know I am running out of time, but our largest competitors 
have been exceptionally active in free trade agreements. The 
U.S. needs to get back in the game as well and craft an 
approach to pursuing comprehensive trade agreements that allow 
this country to advance its values and priorities on global 
trade. In the meantime, we need to fulfill the use of available 
tools, like the Indo-Pacific Economic Framework and the Trade 
Investment Framework Agreements. We also need to ensure our 
trading partners faithfully uphold current trade deals, and we 
talked about that today. We greatly appreciate the 
Administration securing a successful verdict in the USMCA's 
first ever dispute panel, yet more work remains and we 
discussed that today. We just need robust enforcement in this 
and in other markets, such as Mexico, as it has to be a key 
part of ensuring our exporters can meet the full rewards of 
U.S. trade agreements.
    In closing, I would like to emphasize again how important 
Title III of the farm bill is to the American dairy industry 
and its workers. USDEC looks forward to working with our 
industry colleagues to provide further input on these programs, 
as work on the next farm bill advances.
    Thank you for this opportunity. I look forward to 
questions.
    [The prepared statement of Ms. Harden follows:]

  Prepared Statement of Krysta Harden, President and Chief Executive 
           Officer, U.S. Dairy Export Council, Arlington, VA
    Good morning, Chairman Costa, Ranking Member Johnson, and 
distinguished Members of the Subcommittee. Thank you for inviting me to 
testify as part of your 2022 Review of the Farm Bill's International 
Trade and Food Assistance Programs.
    My name is Krysta Harden. I am testifying today on behalf of the 
U.S. Dairy Export Council (USDEC) where I serve as the President and 
Chief Executive Officer.
    USDEC is a nonprofit, independent membership organization 
representing the global trade interests of U.S. dairy farmers, dairy 
processors and cooperatives, dairy ingredient suppliers and export 
trading companies. Our mission is to enhance U.S. global 
competitiveness and assist the U.S. industry to increase its global 
dairy ingredient sales and exports of U.S. dairy products. USDEC and 
its 100+ member companies are supported by staff in the United States 
and overseas in Mexico, South America, Asia, the Middle East and 
Europe. Dairy Management Inc. founded USDEC in 1995 and, through the 
dairy check-off program, is the organization's largest funder, however 
none of those funds are utilized in advocacy efforts. USDEC works with 
the National Milk Producers Federation to promote and advance the trade 
interests of the dairy community. USDEC's advocacy with Congress and 
the Administration related to trade policy issues is solely funded by 
membership dues.
    USDEC is the dairy industry's cooperator, executing programs to 
increase U.S. dairy exports with the support of the MAP and FMD 
programs since its founding 27 years ago. As part of that work, USDEC 
has also been an active participant in multiple Global Based 
Initiatives. Over that time period, dairy exports have grown from $764 
million in 1995 to a record $7.75 billion last year. Farm bill Title 
III programs' support has been instrumental to that growth and will 
continue to be critical in sustaining and growing U.S. dairy exports in 
the years to come.
    The robust environmental stewardship of U.S. dairy farmers bolsters 
our capacity to meet global demand and provides an additional 
opportunity to be competitive. No other country is as greenhouse gas 
efficient in milk production as the United States, where producers 
reduced the greenhouse gas emissions of producing a gallon of milk by 
almost 20 percent from 2007 to 2017. We make highly sustainable 
products and continue to improve on that through our 2050 goals to 
become greenhouse gas-neutral or better, improve water quality, and 
optimize water usage.
    Our history of stewardship and strong commitment to building upon 
our progress further in the coming years makes the U.S. dairy industry 
extremely well poised to responsibly meet the growing global demand for 
sustainably produced, high-quality dairy nutrition. We're eager to rise 
to that challenge and appreciate this opportunity to outline how 
Congress and the U.S. Government can best support dairy farmers and 
manufacturers in this critical endeavor.
    Strong Title III funding of export promotion programs in the farm 
bill lays the bedrock necessary for our success; coupling that with 
additional trade policy measures enabling the U.S. to better compete 
against the world's largest global suppliers of dairy will help our 
dairy farmers and manufacturers thrive and support the millions of 
American jobs that are reliant on a healthy U.S. dairy industry.
Economics of Dairy Sector and Trade
    U.S. dairy is an essential component of American communities across 
the country, employing more than one million workers and adding $750 
billion to the U.S. economy.\1\ For the U.S. dairy industry to be 
successful and continue to support farmers, workers, and consumers, 
international trade and exports are of utmost importance. Exports 
underpin U.S. dairy's success in the present and will support the 
industry's growth in the future.
---------------------------------------------------------------------------
    \1\ https://www.idfa.org/dairydelivers.
---------------------------------------------------------------------------
    To best understand the impact of exports, it's important to 
understand how milk is produced and priced. Milk contains three 
essential components: milkfat, protein and lactose. The domestic versus 
international uses of these different components vary. In essence, U.S. 
cows naturally produce more of these essential dairy components than 
the United States consumes, making export markets critical to fully and 
efficiently using all the valuable components in the milk produced by 
dairy farmers.\2\
---------------------------------------------------------------------------
    \2\ According to USDA, on average, out every 100 pounds of milk, 4 
pounds were milkfat and 9 pounds were protein, lactose and other skim 
solids. The rest is water.
---------------------------------------------------------------------------
    Over the past 20 years, satisfying international consumers' growing 
demand for dairy, particularly dairy protein, has allowed the industry 
to grow. Today, exports account for 17% of U.S. milk production. That 
figure is expected to continue to climb in the years ahead as global 
dairy demand continues to grow.
Percent of U.S. Milk Production Exported
(Rolling 12 Months)


    Since 2001 U.S. milk production has increased by 37% while exports 
have more than quintupled. Impressive as that export growth has been, 
the value of exports has increased even faster than the volume of 
exports over that time, jumping by 537%. This highlights the fact that 
international markets can be a high value proposition for U.S. dairy. 
And those sales are critical to our customers abroad as well--the U.S. 
is the third largest exporter in the world. The well-being of the U.S. 
dairy industry is inextricably tied to international trade and the 
global dairy demand is strongly reliant on the U.S. remaining a 
consistent and reliable supplier.
Total Exports to World
(Rolling 12 Months, Value)
Million USD


    As important as exports are today to America's dairy industry, 
they're essential to our future. International dairy trade is growing 
faster than the U.S. domestic market. As shown in the chart below, 
since 2010, the amount of dairy traded internationally has grown by 
more than twice the rate (+4% per year on average) of U.S. domestic 
dairy consumption (+1.5%).
Incremental Growth of Global Dairy Trade & Domestic Consumption since 
        2010
(Rolling 12 Months, Milk Solids Equivalent)
`000 MT MSE


    The U.S. dairy industry's strongest future growth opportunities 
will come from international trade with 96% of the world's population 
living outside of the United States and rising populations and incomes 
in dairy importing markets. In some ways that future is already here. 
Perhaps the most telling statistic of all is that U.S. dairy exports 
have grown by more than domestic sales in 4 out of the past 5 years, 
including 2021, which set records for volume, value and percent of 
production exported. And this is despite what U.S. exporters face in 
key markets with recent export supply chain headwinds and competition 
disadvantages.
    Ultimately, if the United States wants to continue to help fulfill 
the growing demand for high-quality nutrition around the world--and 
reap the benefits that those sales create for U.S. dairy farmers and 
workers through the production of Made-in-America products, we will 
need to continue to expand export sales. That takes broad-based 
support--including from the farm bill as well as the complementary 
matching funds the U.S. dairy industry provides--and additional policy 
tools to set our farmers and dairy manufacturers up for continued 
global success.
    The growing global market is a highly competitive environment with 
experienced competitors entrenched in key markets. The European Union 
and New Zealand, the world's two largest dairy exporters, have been 
active in international markets far longer than the U.S., which has 
provided them with powerful historical advantages. They've built upon 
those advantages through a much more robust trade policy strategy--
between the EU and New Zealand, one or both have free trade agreements 
(FTA) in 15 out of the 17 largest dairy markets by value.\3\ The U.S., 
by contrast, only has FTAs with five.\4\
---------------------------------------------------------------------------
    \3\ Excluding the U.S. and European Union, the seventeen largest 
dairy import markets by value are China, United Kingdom, Russia, Saudi 
Arabia, Mexico, Japan, Indonesia, South Korea, Malaysia, Philippines, 
Australia, Singapore, Canada, Thailand, Taiwan, Switzerland, and Egypt. 
Only Russia and Saudi Arabia don't have FTAs with either the EU or New 
Zealand.
    \4\ The U.S. has FTAs with Australia, Canada, Mexico, Singapore, 
and South Korea. Although the U.S.-Japan Phase One Agreement expanded 
U.S. access to that market, work to complete it and create a permanent, 
comprehensive FTA has not been concluded.
---------------------------------------------------------------------------
    With the combined investment of U.S. dairy farmers, processors, 
policymakers and associations, the U.S. is asserting itself as the 
primary dairy supplier to the growing global market. In 2021, the 
United States grew dairy exports by more than any other country in the 
world. However, sustaining that success is not guaranteed.
    Maintaining trade relationships is vital to the strength of the 
domestic dairy industry and the economic health of rural America. 
Congress and the U.S. Government must work together to preserve 
equitable trade relationships with key dairy trading partners and 
prioritize creating greater market access for the high quality, 
sustainably produced milk and dairy ingredients manufactured by the 
U.S. dairy industry.
    Expanding trade opportunities for dairy and reducing tariffs and 
non-tariff barriers to trade is crucial. The case for free trade 
agreements is more important than ever. With the international market 
growing at a faster rate than the domestic market, well negotiated FTAs 
support jobs in the United States. Over the past 10 years, global dairy 
trade grew on average by 3.8% per year on a milk solids equivalent 
basis. Customers around the world continue to demand more high-quality, 
nutritious, and sustainable dairy products every year, a need that U.S. 
dairy farmers and their cooperatives are well positioned to meet. 
Greater access to key dairy markets where the U.S. exports currently 
face competitive disadvantages will mean continued opportunity and 
growth for U.S. dairy farmers.
Title III and U.S. Dairy
MAP & FMD Funding
    The Market Access Program (MAP) and the Foreign Market Development 
(FMD) program promote American-grown and produced food and ag products 
that are in competition with heavily subsidized foreign products. 
According to preliminary data from a forthcoming econometric study, the 
benefit-cost ratio of these programs is exceptional. For every $1 
invested in export market development programs, well over $20 is 
returned in export revenue. Additionally, these programs increased net 
farm cash income by an average of nearly $3 billion per year over the 
last 2 decades. These programs have significant direct impacts for 
farmers and ranchers, while also generating indirect effects in jobs 
and wages created at the state and local level.
    Over the past 5 years, USDEC has received an average of $5.3 
million annually in MAP funding \5\ and an average of $697,000 annually 
in FMD funding.\6\
---------------------------------------------------------------------------
    \5\ 2022--$5.790M; 2021--$5.318M; 2020--$5.221M; 2019--$5.292M; 
2018--$4.998M.
    \6\ 2022--$694K; 2021--$789K; 2020--$632K; 2019--$712K; 2018--
$657K.

   USDEC MAP funds are largely used for investments in our 
        international office network of ``boots on the ground'' in key 
        markets around the world; global cheese communication and 
        education work conducted through USDEC's USA Cheese Guild; 
        retail cheese promotions; strategic market research, 
        participation in the Middle East's flagship trade show, 
        Gulfood; and market servicing work on one of our largest export 
---------------------------------------------------------------------------
        destinations: Southeast Asia.

   USDEC FMD funds are largely used for investments in 
        strategic research; communications, seminars, shows and 
        workshops focused on driving international use of U.S. dairy 
        ingredients.

    The following are just a few examples of the ways in which USDEC 
has used these programs:

   USDEC trade servicing and promotions have effectively 
        introduced new cheese varieties and supported new menu items 
        containing U.S. cheese in Japan. As a result, Japan has been a 
        consistently growing market for U.S. cheese, with U.S. exports 
        more than doubling in the past 10 years, reaching nearly 
        $163,000,000 in value in CY 2020, compared to $73,000,000 in CY 
        2010; Jan.-Jun. 2021 exports are at about $97,000,000, 11 
        percent ahead of last year.

   Southeast Asia has become one of the most significant 
        regions for U.S. milk powder exports as well as other dairy 
        ingredients. A key impetus for our milk powder export gains was 
        the USDA MAP-funded Milk Powder Summit held by USDEC in 
        Singapore a few years ago. In addition, in 2021, USDEC launched 
        the virtual Dairy Protein Snack Studio to give Southeast Asian 
        food manufacturers ideas for incorporating U.S. dairy protein 
        into new snack products targeted to regional tastes. This MAP-
        funded online tool has an interactive interface to spark R&D 
        imaginations, with the ability to experiment virtually with 
        different product shapes, U.S. dairy protein type, flavor, 
        complimentary ingredients and coatings.

    MAP is currently funded at $200,000,000 annually, while FMD is at 
$34,500,000. Based on various factors, including inflation, 
sequestration, and administrative expenses taken out of the program, 
the value of the MAP program has been reduced to approximately 
$129,000,000 as illustrated in the chart below, decreasing the program 
by $70,000,000. This trend will continue to decrease the program's 
value every year. Similarly, over $3,000,000 is stripped from FMD.
Impacts on MAP Funding 2001-2023


    Recent reports from the U.S. Grains Council and the U.S. 
Agriculture Export Development Council show that doubling MAP and FMD 
would add $44,100,000,000, or 3.6 percent, to agricultural export 
revenues. These programs undeniably add tremendous value to not only 
U.S. dairy exports, but the ability of all U.S. producers to market 
their goods internationally.
    As Congress looks toward the next farm bill, USDEC urges doubling 
funding for MAP and FMD to better promote America's food and ag 
products across the globe. Based on our experience with the 
Agricultural Trade Promotion (ATP) Program, short term funding imposes 
significant constraints on the effectiveness of U.S. cooperators' 
ability to build sustainable market development activities. USDEC was 
awarded approximately $7,800,000 in ATP funds in 2019--funds which must 
be spent by the end of 2023.\7\ The ATP program has been helpful, and 
we value these additional resources, yet their time-limited nature 
greatly limits our ability to develop the type of programs we would see 
as most effective long-term.
---------------------------------------------------------------------------
    \7\ In 2021 ATP funds were primarily used for the following: market 
and consumer research; retail cheese promotions in Mexico and South 
America; dairy ingredient activities in Mexico; dairy ingredient 
promotions and communications in SE Asia; trademark registrations for 
USDEC promotion efforts.
---------------------------------------------------------------------------
Common Food Names and the Farm Bill
    In addition to our traditional promotion and research-oriented 
activities under the MAP program, USDEC has also been an active 
participant in various Global Based Initiatives (GBI), cross sector 
projects that benefit from a small portion of the total MAP funding. We 
are particularly active through the Consortium for Common Food Names in 
leading the charge to defend the use of common food and beverage names 
against aggressive global efforts by the EU to impose geographical 
indications (GIs) trade barriers in markets around the world. In 
principle, GI protections are used to describe specialized products 
made in a specific region of a country to protect the unique nature of 
that product. However, the EU has used GIs to restrict the use of 
generic terms by which millions of consumers recognize some of their 
favorite foods and beverages. The use of GIs to restrict consumer 
access to generic named foods must be firmly rejected as the 
protectionist and anti-trade policy that it is.
    To complement the industry-led activities executed through the GBI 
program, we have urged the U.S. Government to secure firm and explicit 
trade commitments assuring the future use of specific generic food and 
beverage names targeted by EU monopolization efforts and rejecting the 
use of GIs as barriers to trade in products relying on common names. 
USMCA's common food name side letter provisions established a new 
precedent affirming market access rights for a non-exhaustive list of 
commonly used product terms. However, to effectively combat the EU's 
trade-distorting and WTO-illegal actions, the U.S. Government must 
proactively and consistently expand beyond this precedent to rectify 
these trade barriers with other trading partners. Accomplishing this 
will ensure that market access protections for American-made common 
food name products are strengthened and these cloaked barriers to trade 
are rejected.
    This Committee also holds a responsibility to address non-tariff 
barriers like GIs. Language in the 2023 Farm Bill would help combat the 
challenge of GIs restricting trade of U.S. exports of common food names 
products. This would ensure that USTR and USDA negotiate proactively to 
defend the ability to use common names through bilateral agreements, 
MOUs and exchanges of letters. We look forward to working with our 
dairy industry partners to further elaborate on potential 
recommendations for this Committee as the writing of the next farm bill 
progresses.
Food Aid
    Dairy provides high quality nutrition, which is particularly 
important for food-insecure populations.\8\ Milk and dairy products are 
nutrient-dense foods, supplying energy and high-quality protein with a 
range of essential micronutrients (especially calcium, magnesium, 
potassium, zinc, and phosphorus) in an easily absorbed form. Milk 
minerals are crucial for human health and development as well as in 
dairy processes as cheese-making and for all traits involving salt-
protein interactions. Dairy products are rich in nutrients that are 
essential for good bone health, including calcium, protein, vitamin D, 
potassium, and phosphorus. Adequate calcium intake influences skeletal 
calcium retention during growth and thus affects peak bone mass 
achieved in early adulthood. The high levels of calcium play an 
important role in the development, strength, and density of bones for 
children and in the prevention of bone loss and osteoporotic fractures 
in elderly people.
---------------------------------------------------------------------------
    \8\ Dairy facts in this paragraph sourced from: https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC6723869/.
---------------------------------------------------------------------------
    With respect to protein quality, dairy outperforms alternatives and 
has important advantages for consumers over other (typically lower 
priced) protein sources. Despite the robust scientific evidence that 
demonstrates the nutritional benefits provided by dairy, dairy products 
are not widely used in U.S. food aid programs. USDEC encourages 
Congress to examine opportunities to increase the use of U.S. dairy 
ingredients in a targeted manner in U.S. food programs in order to draw 
more heavily on the high-quality nutrition that dairy can offer, 
particularly for vulnerable groups such as children who are 
experiencing the devastating consequences of malnutrition. 
    One area that is particularly ripe for greater near-term focus 
worldwide is the use of dairy ingredients in the treatment of 
malnutrition and wasting. For example, powdered milk is one of the 
primary ingredients used in ready-to-use therapeutic food (RUTF), an 
energy-dense, fortified medical food paste used to treat severe acute 
malnutrition the deadliest form of malnutrition, known as wasting. Just 
three RUTF packets every day can bring a child back from the brink of 
death in a matter of weeks. Despite being ranked as one of the most 
effective child survival interventions, RUTF is vastly under-funded. 
Less than one in four children suffering from wasting have access to 
this life-saving treatment.
    American dairy farmers have the capacity to meet more of this 
emergency global need, but current investment in RUTF production is not 
enough. USDEC encourages Congress to examine opportunities in the 
upcoming farm bill to scale up purchases of U.S. RUTF products that are 
compliant with World Health Organization (WHO) guidelines.
Additional Trade Priorities
    As vital as the farm bill's Trade Title is to supporting U.S. dairy 
exports, to maximize success America's dairy farmers and manufacturers 
need to see additional policy steps taken to advance U.S. agricultural 
export opportunities. A few top priority policies are outlined below:
Swift Appointment and Approval of Key U.S. Agricultural Export Nominees
    To achieve full implementation of our existing trade agreements, 
and to broker new trade deals, it is imperative that we have the 
correct people at the helm of these negotiations. We are extremely 
worried that over a year into this Administration, we still do not have 
a confirmed USTR Agricultural Ambassador or a USDA Under Secretary for 
Trade and Foreign Agricultural Affairs. We believe the next farm bill 
trade title should provide specific timeframes for the Administration 
to put forward nominees for these two positions for Congress to 
consider. In the meantime, we urge Congress to push the Administration 
to fill these positions swiftly given how critical they are to 
defending the interests of U.S. farmers and food manufacturers working 
hard to sell their American-made products around the world.
Strong Support for Comprehensive Trade Agreements
    As noted earlier, U.S. dairy exporters operate in a highly 
competitive global marketplace where our largest competitors--the EU 
and New Zealand--have been much more active than the U.S. over the past 
decade in negotiating and implementing trade agreements. This is 
already putting U.S. dairy exporters at a disadvantage in certain 
markets and the gaps will continue to grow the longer the U.S. delays 
reengaging in the global trade policy sphere in earnest. For this 
reason, USDEC strongly urges a resumption of the pursuit of 
comprehensive trade agreements with key dairy importing markets.
    For example, we should restart U.S.-United Kingdom (UK) FTA 
negotiations. In 2021, the U.S. exported only $30,000,000 in dairy 
products to the UK despite the fact that the UK is a major dairy 
importer. Our exports were significantly constrained due to existing 
tariff and non-tariff barriers. A resumption of FTA negotiations, and 
an eventual agreement, would substantially increase trading 
opportunities for this region.
    Moreover, we urge the pursuit of comprehensive trade negotiations 
with key Asian markets such as Japan, Vietnam, Malaysia, Thailand, 
Indonesia and the Philippines. This is particularly important given 
that our major dairy competitors in many of these markets already have 
FTAs in place, putting U.S. dairy producers at a competitive 
disadvantage. USDEC does not consider FTAs to be an outdated 20th 
century tool; rather, FTAs remain the primary tool by which the U.S. 
can level the playing field for the sale of American-made goods around 
the world. The contents of FTAs can and should evolve over time to best 
advance U.S. priorities; yet abandoning this tool entirely due to 
concerns about some of our FTAs' past provisions risks losing market 
share to our competitors.
    As FTAs are unfortunately not advancing, it's key that we maximize 
use of the tools USTR has announced to date. The Indo-Pacific Economic 
Framework provides an opportunity to address tariff and non-tariff 
trade barriers to U.S. dairy exports throughout the region. It is 
imperative that agriculture is a core component of these conversations 
given our industry's position as a reliable net-exporting producer of 
products supporting U.S. workers. The U.S. should maximize use of the 
Indo-Pacific Economic Framework to benefit U.S. agricultural exporters 
while continuing to work toward resumption of comprehensive trade 
agreement negotiations.
    At the same time, USTR has also touted the value of Trade and 
Investment Framework Agreements (TIFAs) to advance U.S. export 
interests. We are hopeful that TIFAs can indeed be leveraged to make a 
degree of progress on expanding markets; doing so will require a 
greater prioritization of U.S. agricultural export interests than has 
traditionally been the case in TIFA discussions, however.
Implementation and Enforcement of Existing Trade Agreements
    As important as it is to forge new agreements to continue to reduce 
barriers to U.S. dairy exports, it is critical that the U.S. ensure 
that our trading partners are held accountable of the provisions in our 
current deals.
    In this respect, USDEC emphasizes the importance of fulsome 
implementation and robust enforcement of the U.S.-Mexico-Canada 
Agreement (USMCA) in order to preserve and fully deliver on the market 
access opportunities the U.S. procured for U.S. dairy exports.
    We greatly appreciate the work of the Administration to initiate 
and secure a successful verdict in the first dispute settlement panel 
proceeding ever brought under USMCA, focusing on Canada's breach of its 
USMCA dairy tariff-rate quota (TRQ) commitments.
    I would like to thank the numerous Members of this Subcommittee for 
their strong support on this issue.
    Unfortunately, Canada's proposal to alter its USMCA dairy TRQ 
system falls far short of the genuine reforms needed to comply with all 
of its USMCA commitments. The U.S. must insist that Canada's proposal 
is unacceptable and that full compliance with the agreement is the only 
acceptable outcome in this case. The future of U.S. dairy exports to 
Canada depends on this, as does the outlook for the ability of USMCA's 
dispute settlement case to deliver real change when our trading 
partners shirk their obligations.
    Other issues must be monitored and focused on by the Administration 
to ensure USMCA works for the dairy industry:

   Canadian exports of milk protein isolates (MPI) and certain 
        skim milk blends manufactured under the new Class IVa have been 
        increasing in a manner that appears designed to intentionally 
        circumvent USMCA's dairy protein export disciplines. Curbing 
        Canada's use of global markets to dispose of the excess dairy 
        protein generated by its government-controlled supply 
        management system was a core USMCA objective and must remain a 
        focus area of the Administration.

   Vigilant monitoring and aggressive enforcement will also be 
        necessary with our other USMCA partner, Mexico. Mexico is the 
        largest export market for U.S. dairy products, and the U.S. 
        trade relationship with Mexico is of the utmost importance. 
        Unfortunately, Mexico has seen a proliferation of poorly 
        designed regulations that threaten to disrupt trade and erode 
        the U.S. role as a reliable supplier. These overly burdensome 
        regulatory proposals pose a particular threat to U.S. milk 
        powder and cheese exports to Mexico. Close attention must also 
        be paid to Mexico's implementation of USMCA side letter 
        provisions on geographical indications (GIs) and common food 
        names.

      The U.S. should ensure discussions with Mexico treat its surge in 
        regulatory and customs enforcement issues as a collective 
        concern, and not simply as one-off issues. We need to restore 
        smooth and predictable trading conditions with Mexico to ensure 
        that the U.S. and Mexico remain an integrated market fulfilling 
        the promise of USMCA.

    Another area where implementation and enforcement are crucial is 
the China Phase One agreement. The Phase One trade agreement with China 
achieved important progress on several non-tariff-barrier (NTB) issues 
such as dairy facility registrations and access for high-value products 
such as extended shelf-life milk. However, retaliatory tariffs continue 
to impose a significant burden on U.S. dairy exports. The U.S. should 
secure long-term relief from these tariffs and work to ultimately 
achieve removal of them so that the U.S. dairy industry can reap the 
full benefit of the Phase One agreement and grow its market share and 
export volumes.
    Over the past decade, China has become a critically important 
market for U.S. dairy exports. Sales last year alone totaled over 
$700,000,000, ranking China the third largest export market for U.S. 
dairy products, despite the harmful impact of China's retaliatory 
tariffs in response to USTR Section 301 duties. While this progress is 
appreciated, it should also be noted that the Chinese have fallen short 
of their Phase One commitments to the tune of over $17,000,000. The 
impact of this shortcoming did not escape the dairy industry--China 
continues to primarily source key dairy commodities such as milk powder 
and cheese from non-U.S. sources.
    While there remains tremendous potential in this market as demand 
for dairy products continues to expand, China has not prioritized 
purchasing significantly larger shares of its dairy needs from the U.S. 
to date, despite its Phase One agricultural purchase commitments. We 
urge this Committee, and all of Congress, to work with the 
Administration to hold China accountable for their purchase 
commitments, press for removal of all retaliatory tariffs on dairy, and 
in the interim secure year-long retaliatory tariff exemptions for dairy 
products.
U.S. Leadership on Global Sustainability Efforts
    We believe that the U.S. is uniquely positioned to promote 
sustainability on the global stage by leading a science-based, 
productivity-oriented approach that will be critical to supporting 
global competitiveness of U.S. agriculture exports, particularly dairy. 
We expect to see increasing pressure from our export competitors 
focused on advancing their agriculture, sustainability and trade 
objectives through ongoing work in the United Nations and international 
standard setting bodies. To balance the discussion and ensure global 
recommendations and standards are science-based, facilitate trade, and 
deliver more sustainable food systems, it is essential that the U.S. 
Government take a leadership role and work with like-minded countries 
around the world to deliver priority outcomes.
    The U.S. dairy industry demonstrated that it is a strong partner in 
this charge at this past year's United Nations Food System Summit. As a 
proud member of the Coalition of Action for Sustainable Productivity 
Growth for Food Security and Resource Conservation, we stand ready to 
do the work needed to advance the pragmatic, forward looking approach 
that the U.S. Government has identified in their fight against climate 
change. This wide-ranging effort includes encouraging other countries 
and sectors to embrace the benefits of a sustainable productivity model 
and support innovation through initiatives such as our Net-Zero 
Initiative, which is a voluntary on-farm effort to advance our 2050 
goals of achieving GHG neutrality and improving water and land use.
    As dialogue around the world and within the UN itself often focuses 
on an anti-trade, anti-dairy, and anti-agriculture narrative, the U.S. 
dairy industry looks to U.S. leadership to inform the debate about the 
benefits of innovation and technology while advocating an approach that 
respects the legitimate role of all agricultural sectors in the future 
of the global food system. Given current and anticipated challenges 
combined with the solutions U.S. agriculture has to offer, the United 
States must remain uniquely focused on charting a more workable, trade-
friendly and science driven pathway forward on sustainability and 
climate issues. Agricultural producers across the board are stewards of 
the land, and the U.S. dairy industry provides a prime example of that.
Closing
    In closing, I would like to reiterate how important Title III of 
the farm bill is--the trade title supports U.S. dairy producers and 
processors in accessing profitable and successful global trading 
routes, while maintaining capacity at home. This importance cannot be 
understated, yet it is critical that we see more policies and actions 
by Congress and the Administration to best support American-made ag 
exports.
    Again, Chairman Costa and Ranking Member Johnson, I truly 
appreciate the opportunity to testify before this Committee and serve 
as a voice for the U.S. dairy industry to highlight the importance of 
global trade to American dairy farmers across the nation.

    The Chairman. Thank you very much, Ms. Harden, and with 
your previous experience both working with USDA in other past 
years. We look forward to your thoughts in terms of the 
question period.
    Our next witness on today's panel is Ms. Nicole Berg, who 
is the President of the National Association of Wheat Growers, 
and in a conversation I had with her earlier, she has some 
familiarity with her family in the San Joaquin Valley where I 
grew up and was raised, and have the honor to represent. And we 
welcome you here, and your thoughts as it relates to the 
challenges we are facing, not only in Title III, but as we set 
the table for next year's farm bill reauthorization and the 
challenges we face, and what insight you might be able to 
provide us.
    Ms. Berg?

 STATEMENT OF NICOLE BERG, PRESIDENT, NATIONAL ASSOCIATION OF 
                  WHEAT GROWERS, PATTERSON, WA

    Ms. Berg. Chairman Costa, Ranking Member Johnson, and 
Members of Congress, thank you for the opportunity to testify 
before the Subcommittee on Livestock and Foreign Agriculture. 
My name is Nicole Berg. I am a fourth-generation farmer where I 
work alongside my dad and two brothers on our family farm in 
Patterson, Washington. We grow dryland and irrigated wheat on a 
diversified farm. Currently, I serve as President of the 
National Association of Wheat Growers.
    NAWG is a federation of 20 state organizations and industry 
partners. We believe the farm bill Title III programs and how 
our Federal partners administer them can be improved going into 
the next farm bill. NAWG intends to outline our priorities in 
the coming months as Congress begins debating reauthorization.
    Title III consists of two major elements that play a 
critical role in agricultural trade: international food aid and 
agricultural trade promotion. The international food aid 
programs have been successful in stabilizing economies and 
populations impacted by climate change, famine, and war. Trade 
promotion programs have helped U.S. agricultural products 
remain competitive on world markets and open access to new 
markets, which has boosted the agricultural economy and kept 
farmers in business.
    Nationwide, there are six different classes of wheat grown 
in different climates for different uses. In my home State of 
Washington, there are roughly 2,500 wheat farmers, and eastern 
part of the state is known as the home of the soft white wheat. 
This variety is grown primarily for their use for cookies, 
crackers, cakes, as well as flatbreads. Washington farmers also 
raise superb hard red winter and spring wheats for bread. So 
far, marketing this year soft wheat makes up 34 percent of the 
food aid donations and has several success stories resulting in 
the Title III trade promotion programs.
    The programs in Title III play a significant role in the 
agricultural community. According to a study on MAP and FMD, 
these programs contribute an average of $8.2 billion more in ag 
export revenue per year. However, MAP and FMD funding levels 
have remained stagnant for 15 years. During that time, 
cooperators like U.S. Wheat have reduced staff and offices 
while they work to prioritize and maintain programming. NAWG 
has historically sought to preserve and enhance funding levels 
for export promotion programs, given their significant return 
on investment and support for American agriculture and rural 
communities. The study also concluded that by doubling annual 
MAP and FMD funding, cooperators would increase their 
investment by 50 percent, creating yearly increases in 
agricultural exports by $4.5 billion.
    As an example, this return on investment can be seen in the 
Philippines where using Title III funds has increased our 
market share over 97 percent for U.S. wheat over the last 60 
years. The Title III programs are essential to build trust with 
buyers and end-users who also look to U.S. Wheat for advice.
    While there is still uncertainty about how Russia's 
invasion of Ukraine will impact world markets, we know that the 
invasion will exacerbate global food insecurity. Title III food 
aid programs are the best suited for the U.S. wheat to help 
support the humanitarian needs of those involved. Markets that 
typically purchase wheat from Russia and Ukraine, including 
bread heavy diets in the Middle East and Africa historically 
cannot afford high quality, high premium U.S. wheat. Using 
these programs will be the best way for the United States to 
help fill the unmet needs of a potential food crisis.
    I was fortunate enough to witness the effects of these 
life-changing programs firsthand when I joined members of U.S. 
Wheat Associates and other ag groups on a 2 week journey to 
Kenya and Tanzania in 2019. The trip was funded by export 
market development programs, toured the Kakuma refugee camp in 
Kenya, where the World Food Programme is feeding more than 
200,000 residents from nine countries, with over \1/2\ of their 
food supply coming from the United States. A man I met there 
named Nelson expressed they are always happy to see the high 
quality of U.S. food they received. We also visited the World 
Food Programme's office in Mombasa, Kenya, where one of the 
largest ports in Africa is located. Through this port, the 
World Food Programme supports feeding programs in multiple 
African countries, all of which receive regular U.S. food 
shipments. This is just one example of life-changing impact 
these programs have made, and certainly changed my life.
    As the Committee continues to have these hearings and 
reflects on programs authorized under the 2018 Farm Bill, I 
look forward to working with Members of the Committee, their 
staff, and other witnesses here today to help craft a farm bill 
that enhances trade and helps deliver American commodities to 
populations in need.
    Thank you again for the opportunity to testify before the 
Committee today.
    [The prepared statement of Ms. Berg follows:]

 Prepared Statement of Nicole Berg, President, National Association of 
                      Wheat Growers, Patterson, WA
    Chairman Costa, Ranking Member Johnson, and Members of the 
Subcommittee thank you for the opportunity to testify before the House 
Agriculture Subcommittee on Livestock and Foreign Agriculture (LFA). My 
name is Nicole Berg, and I am a fourth-generation farmer where I work 
alongside my dad and two brothers on our family farm in Paterson, 
Washington. We grow dryland and irrigated wheat on a diversified farm. 
I currently serve as the President of the National Association of Wheat 
Growers (NAWG). Thank you for holding this hearing today to discuss 
Title III--the trade title--of the 2018 Farm Bill. The Title III 
programs, originating in the farm programs following World War II, are 
vital programs that work to open new markets for agricultural 
production and help stabilize food-insecure countries and regions to 
preserve peace.
    NAWG is a federation of 20 state wheat grower associations and 
other industry partners. We work collaboratively to represent the needs 
and interests of wheat producers before Congress and Federal agencies. 
Based in Washington, D.C., NAWG is grower-governed and works in areas 
as diverse as Federal farm policy, trade policy, environmental 
regulation, the future commercialization of emerging technologies in 
wheat, and uniting the wheat industry around common goals. Our members 
feel it is important to provide testimony before the LFA Subcommittee 
today as we reflect on the programs authorized under Title III of the 
farm bill. Today's hearing is particularly timely as NAWG is also 
evaluating the effectiveness of the farm safety net programs, how those 
programs can be improved going into the next farm bill, and how the 
U.S. Department of Agriculture (USDA) administers these programs. NAWG 
intends to outline our specific farm bill priorities for lawmakers in 
the coming months as Congress begins debating farm bill 
reauthorization. However, we are prepared to speak to how the programs 
have been functioning from the wheat perspective since enactment of the 
2018 Farm Bill.
    Title III of the farm bill consists of two major elements that play 
a crucial role in agricultural trade: international food aid and 
agricultural trade promotion. The international food aid programs have 
been successful in stabilizing economies and populations hurt by 
climate change, famine, and war and have helped promote peace by 
reducing terrorism and food emigration. Trade promotion programs have 
helped U.S. agricultural products remain competitive on world markets 
and opened access to new markets, which has boosted the agriculture 
economy and kept farmers in business. While making up less than one 
percent of total farm bill funding, Title III plays a crucial role in 
the farm safety net.
    According to the United States Department of Agriculture's (USDA) 
World Agriculture Supply and Demand Estimates from March 9, the United 
States (U.S.) exported over an estimated 26 million metric tons (MMT) 
(990 million bushels) of wheat in 2020/21 and projects the U.S. to 
export 21.77 MMT (800 million bushels) in 2021/22, representing 54 
percent and 49 percent of total U.S. wheat production respectively, 
with such a large percentage of our production exported, U.S. wheat 
growers' profitability is intricately connected to our export markets. 
The U.S. is the largest donor of food assistance worldwide, with over 1 
MMT in food aid tenders in marketing year 2021/22 so far, making up 
around five percent of commercial sales, plus substantial additional 
cash and non-U.S. purchased food. Wheat is one of the principal food 
grains produced in the United States and consumed around the world, 
constituting roughly one in five calories consumed worldwide. Food aid 
donations have made significant impacts in markets like Ethiopia and 
Yemen that are facing food shortages.
    Nationwide, there are six different classes of wheat grown in 
different climates and for different uses. In my home State of 
Washington, there are roughly 2,500 wheat farmers. The eastern part of 
the state is known as the home of soft white wheat. These varieties are 
grown primarily for their use in cookies, crackers, and cakes as well 
as flat breads. Washington farmers also raise superb hard red winter 
and spring wheats for bread. So far, this marking year soft wheat (SW) 
has made up 34 percent of food aid donations and has seen several 
success stories resulting from Title III's trade promotion programs.
World Wheat Markets
    With over 50 percent of U.S. wheat heading to overseas markets, 
trade is a major priority for wheat farmers. The United States is the 
world's fourth largest exporter of wheat, behind Russia, while being 
the largest contributor to food aid, providing around half of the 
world's food aid. On average, Mexico, the Philippines, Japan, South 
Korea, and Nigeria make up the top five destinations for U.S. wheat. 
Following the United States's success at the World Trade Organization 
(WTO) and through efforts to negotiate the China Phase 1 deal, China 
went from being the world's 16th largest importer to the 4th largest in 
a single year. In addition, top recipients of food aid most recently 
include Yemen, Ethiopia, and Sudan.
    The world wheat market is an ever-changing one that provides unique 
opportunities for U.S. wheat farmers. But wheat is also the world's 
most widely planted and traded commodity. That means global competition 
among exporters is fierce. It highlights the continuous need for new 
market access to keep U.S. growers on a level playing field with other 
countries--especially as our primary competitors in quality wheat 
markets--Canada and Australia continue to sign and pursue new free 
trade agreements around the world. Two free trade agreements that are 
currently being evaluated by the administrations are with the United 
Kingdom and Kenya. Both would be prime examples where U.S. wheat faces 
tariff and non-tariff barriers that we would hope to resolve through 
trade negotiations. In addition, the Asia Pacific is a region ripe for 
U.S. attention on trade, given several competitor agreements in place 
and the continuing growth in their wheat consumption. Whatever form 
those future discussions take, agricultural market access must be a 
priority.
    Recently, the global wheat market has drawn a great deal of 
attention with Russia's invasion of Ukraine and the subsequent impacts 
on wheat trade and markets. Together the two countries represent around 
30 percent of global wheat exports, and 14 percent of global wheat 
production. In the aftermath of the invasion wheat markets skyrocketed, 
and farmers witnessed unprecedented market volatility. Market prices 
have decreased since then but remain elevated and the volatility 
continues in the market.
    While there is a great deal of unknown how the international 
sanctions will impact Russian exports of food grains and how the 
conflict will impact Ukrainian exports, we know that these increased 
prices are exacerbating global food insecurity. Russia and Ukraine are 
large wheat exporters, but even more so to some of the world's most 
price-sensitive markets. The White House has put together a conference 
on hunger and has stressed the dangers of world food shortages. Markets 
historically served by Black Sea wheat are scrambling to figure out how 
they are going to fill their demand and feed their people. As these 
events unfold, Title III will become more critical. The U.S. food aid 
programs will be needed to curb the effects of hunger in a humanitarian 
crisis that is unprecedented in recent history. The trade promotion 
programs will be vital diplomatic tools to build relationships with 
countries that have historically sourced wheat from Russia. Congress 
needs to take the opportunity to strengthen these programs in the new 
world.
Food Aid Background and the 2018 Farm Bill
    Title III international food aid and trade promotion programs have 
their roots in post-World War II European reconstruction efforts. 
President Dwight Eisenhower signed the Agricultural Trade Development 
and Assistance Act of 1954, Public Law 480, creating the program now 
known as Food for Peace which is Subtitle A of Title III of the farm 
bill. Food for Peace worked to decrease the surplus of domestic 
agricultural commodities, improve domestic markets, and stimulate new 
international markets. The 1985 Farm Bill saw the marriage of 
international food aid programs to the farm bill by authorizing the 
donation of USDA commodities by the Secretary of Agriculture to provide 
food aid to countries in need. Since 1985, farm bills have sought to 
allow the agencies that implement these programs, the United States 
Agency for International Development (USAID) and USDA's Foreign 
Agriculture Service (FAS), the flexibility to address humanitarian and 
food security crises adequately and efficiently.
    Today, USDA and USAID partner with organizations to implement the 
food aid programs. Each program serves a separate purpose and provides 
assistance through either in-kind assistance or market-based 
assistance. In-kind assistance includes commodities produced in the 
U.S. and shipped to a target region and includes monetization where a 
partner organization sells commodities on local markets in developing 
countries and uses the proceeds to fund development projects. Market-
based assistance provides direct cash transfers, food vouchers, or 
locally and regionally procured food to populations in need.
    Jurisdiction of international food assistance programs, not all of 
which are in the farm bill, is demonstrated in the chart below from the 
Congressional Research Service.
Figure 1. U.S. International Food Assistance Jurisdiction


          Source: CRS.
          Notes: Feed the Future Development refers to agricultural 
        development assistance provided under the Feed the Future 
        initiative. The Feed the Future initiative is a government-wide 
        initiative that includes all programs in this matrix, as well 
        as other assistance provided outside USDA and USAID. Thus, this 
        matrix does not include all programs that comprise the Feed the 
        Future initiative. The programs highlighted in this graphic are 
        the programs discussed in this report. SFOPS = Department of 
        State, Foreign Operations, and Related Programs; USDA = U.S. 
        Department of Agriculture; USAID = U.S. Agency for 
        International Development.

    International food aid programs are subject to annual 
appropriations and are included with funding originating outside of the 
farm bill. Food for Peace Title II programs are authorized at $2.5 
billion. The chart below shows total U.S. food assistance outlays for 
all food aid programs, not just ones inside the farm bill.
Figure 2. U.S. International Food Assistance Outlays, FY 201O-FY 2020
$ in billions (current year)


          Source: figure created by CRS using data from USAID, U.S. 
        International Food Assistance Report, various years.
          Notes: FFP = Food for Peace; EFSP = Emergency Food Security 
        Program; The ``Other'' category includes the Farmer-to-Farmer 
        Program Local and Regional Food Aid Procurement Program, Bill 
        Emerson Humanitarian Trust, and Community Development Fund.

    The 2018 Farm Bill continued prioritizing Title III and its role in 
international food aid while making key changes to provide maximum 
flexibility in how agencies and NGO's implement these important 
programs. The new farm bill eliminated the 15 percent monetization 
requirement in Food for Peace, which allowed additional flexibility in 
program implementation. It also permitted ten percent of McGovern-Dole 
program funds to be used for local and regional procurement, 
established a pilot agreement allowing supplemental appropriated Food 
for Progress funds to be used for direct development activities, and 
made technical changes to several fellowship programs.
International Food Aid Programs
    This section provides a brief overview of each of the international 
food aid programs.

   The Food for Peace (FFP) Title II is aid provided by the 
        U.S. to recipients in foreign countries. All FFP assistance is 
        required to be labeled as from the American people. Assistance 
        must not interfere with the local agricultural economy, whether 
        assistance be commodity, locally procured food, vouchers, or 
        cash.

   The Farmer-to-Farmer Program (FFP Title V) coordinates 
        short-term placements for U.S. volunteers to services to 
        provide technical assistance to farmers in developing 
        countries.

   The McGovern-Dole International Food for Education and Child 
        Nutrition Program provides U.S. commodities to developing 
        countries for school feeding programs and for pregnant and 
        nursing mothers.

   The Food for Progress Program (FPPr) monetizes U.S. 
        commodities in recipient countries to fund humanitarian or 
        development projects.

   The Bill Emerson Humanitarian Trust (BEHT) is a mandatory 
        reserve of funds held by the USDA that can supplement FFP 
        assistance when FFP alone cannot meet emergency food needs. 
        There have recently been a number of calls to release BEHT 
        funds, which we fully support and believe is necessary.

   The Local and Regional Food Aid Procurement Program (LRP) 
        finances the provision of local and regionally procured foods 
        in non-emergency situations.
Agricultural Promotion Background and the 2018 Farm Bill
    The agricultural promotion programs in the farm bill date back to 
1978, when Congress passed the Agricultural Trade Act to increase the 
profitability of farming by increasing opportunities for U.S. 
commodities by expanding markets and improving their competitiveness in 
world markets. The 1981 Farm Bill was the first to include a trade 
promotion title.
    Today, USDA FAS works with cooperator organizations to create, 
expand, and maintain foreign agricultural markets using the Market 
Access Program (MAP) and the Foreign Market Development (FMD) program. 
Title III also provides essential financing to encourage exports 
through the Export Credit Guarantee Program (GSM-102).
    The 2018 Farm Bill continued promoting trade by consolidating 
several programs into the Agricultural Trade Promotion and Facilitation 
section, which maintains the unique functions of each program while 
establishing permanent, mandatory funding for export promotion 
activities. It also created a Priority Trade Fund that allows the 
Secretary of Agriculture to allocate additional funds to any export 
promotion program. MAP and FMD funding was also made available for 
activities in Cuba.
Agricultural Promotion Programs
    The 2018 Farm Bill provides $255 million in annual mandatory 
funding for export programs from the Commodity Credit Corporation, 
while GSM-102 was given over $3.5 billion for allocation in the Fiscal 
Year 2022.

   The Export Credit Guarantee Programs provide credit 
        guarantees to encourage the financing of commercial exports. 
        This program helps lenders balance financial risk, especially 
        in developing countries.

   The Market Access Program partners FAS with U.S. 
        agricultural trade association and other groups to share the 
        costs of overseas marketing and promotional activities in order 
        to build export markets for agricultural products. The farm 
        bill provides $200 million for MAP.

   The Foreign Market Development Program partners FAS with 
        nonprofit agricultural trade associations to address long-term 
        opportunities to reduce foreign import constraints or expand 
        export growth opportunities. The farm bill provides $34.5 
        million for FMD.

   The Emerging Markets Program (EMP) provides cost-share 
        founding for technical assistance activities that support 
        exports of U.S. commodities. The farm bill provides $8 million 
        for EMP.

   The Technical Assistance for Specialty Crops (TASC) program 
        provides funding organizations to address non-tariff barriers 
        of U.S. specialty crops. The farm bill provides $9 million for 
        TASC.

    In the wheat industry, U.S. Wheat Associates is the USDA cooperator 
organization. They participate in MAP, FMD, and occasionally EMP in 
their efforts to expand markets for U.S. wheat producers. Those USDA 
grants are required to be matched, in the case of wheat, though farmer 
dollars are collected by individual state check-offs. Combined, those 
monies support a global network of 13 overseas offices and around 75 
technical, marketing, and support staff, all working on behalf of U.S. 
wheat farmers.
Implementation of 2018 Programs
    The programs in Title III play a significant role in the 
agricultural economy. According to an econometric study of MAP and FMD, 
conducted by Informa Economics IEG (now IHS Markit), these programs 
contributed an average of $8.2 billion more farm export revenue per 
year between 1977 and 2014. These programs also boost export volume, 
and farm cash income. The study also concluded that doubling annual MAP 
and FMD funding would encourage cooperators to increase their 
investments by 50 percent, and the total investment would create yearly 
increases in agricultural exports by $4.5 billion, increase the farm 
economy through cash receipts and income and farm assets by $4.0 
billion, increase domestic GDP by $6.0 billion, while creating 84,600 
new full and part time jobs. The graph below from USDA's Economic 
Research Service shows just how big an impact these programs have had 
over the past 3 decades.
Figure 2
Increases in U.S. agricultural export value by region, 1995 to 2017
Value ($ billion)


          Source: USDA, Economic Research Service, U.S. Agricultural 
        Trade topic page.

    It can be an uphill battle to convince milling wheat buyers to opt 
for premium-priced, but better performing, U.S. wheat. However, there 
are many examples of how MAP and FMD funding have had an impact. Within 
the class of wheat that I produce, soft white, The Philippines contains 
many such success stories, where through a combination of marketing and 
technical assistance over the last 60 years, the U.S. has built better 
than a 90 percent milling wheat market share and helped increase 
Filipino wheat consumption. U.S. wheat enjoys this level of market 
dominance because the program investments have helped U.S. Wheat 
Associates (USW), a MAP and FMD cooperator organization, stay ``on the 
ground'' in the Philippines and other Asian markets for decades, making 
trade and technical service calls and conducting wheat food production 
training. The Title III programs are essential to building trust with 
buyers and end-users who also look to USW for advice.
    To increase wheat foods consumption in the Philippines, USW has 
helped flour millers, and commercial food companies build and maintain 
a multi-year campaign. As a result, over the past 5 years, the annual 
per capita consumption of wheat in the island nation has increased from 
23 to 29 kilograms. That is an annual demand increase of 600,000 metric 
tons of wheat, with an estimated 97 percent of that wheat coming from 
the United States.
    The funds also allow U.S. cooperators to work directly with 
companies to highlight the advantages of using U.S. commodities. Flour 
milling courses at international facilities highlighting the superior 
end-use attributes of U.S. grown wheat have led to Filipino millers 
adopting ``Guaranteed 100% U.S. Wheat'' labels on flour bags. This 
effectively locked mills into annual wheat purchases from U.S. origin 
supplies.
    Providing technical services for emerging technologies is another 
area that can lead to increased loyalty to U.S. commodities. Through 
USW education and technical services, more than half of the 
Philippines' mills have installed Solvent Retention Capacity (SRC) 
testing--a method for measuring protein functionality that most 
accurately conveys the end-use product attributes for soft white wheat. 
USW technical milling specialists have pioneered the use and adoption 
of the technology. As a result of these SRC-related efforts, millers 
and their customers can use objective, repeatable statistical data to 
communicate quality information while providing a clear advantage for 
U.S. wheat classes to the industry. That technology is especially 
critical for SW producers as each years' crop's functional attributes 
depend not only on genetics or management but also on the weather--
which is clearly outside of our control. SRC has helped ensure millers 
and bakers receive the functional quality wheat they need regardless of 
what mother natures throws at us as farmers.
    In another example of how cooperators use MAP programs to support 
customers' purchase of U.S. grown wheat, USW has provided multiple 
layers of trade and technical support to a specific Philippine milling 
company, including custom training at the Wheat Marketing Center in 
Portland, Oregon, in 2020 to analyze the optimal blend of U.S. western 
white (WW) wheat flour in Philippine sponge and chiffon cakes as well 
as on layer cakes and Japanese sponge cakes. As a result, after follow-
up technical servicing with USW technicians in 2021, the company 
launched their new unchlorinated cake flour utilizing 48,486 MT of WW 
valued at $14 million, which was the first WW commercial shipment to 
the Philippines since MY2012/13.
    The impacts of international food aid on the lives of millions of 
people are indescribable. I was fortunate enough to witness the effects 
of these life-changing programs firsthand when I joined members of U.S. 
Wheat Associates, U.S. Grains Council, and USA Rice for a 14 day 
journey to Kenya and Tanzania in 2019. The trip, funded by USDA FAS 
using export market development program funds, toured the Kakuma 
Refugee Camp in Kenya, where the World Food Programme (WFP) is feeding 
98 percent of the more than 200,000 residents from nine countries, with 
over \1/2\ of their food supplies coming from the United States. A man 
that I met there named Nelson emphasized that they were always so happy 
with the high quality of the U.S. food they received, especially 
because of the quality of wheat flour. We also visited the WFP office 
in Mombasa, Kenya, where one of the largest ports in Africa is located. 
Through this port, WFP supports feeding programs in Sudan, South Sudan, 
Mozambique, Rwanda, and Uganda, all of which receive regular U.S. food 
shipments. This is just one example of the life-changing impact that 
these programs have. It certainly changed my life, and this is just one 
example of the many stories that can be told that have originated out 
of Title III programs.
Critiques of Title III
    Food aid and trade promotion programs remain a critical part of the 
overall export economy of U.S. wheat. The 2018 Farm Bill provided 
mandatory funding of $255 million annually for trade promotion 
activities. Unfortunately, these funding levels become less effective 
as costs and the numbers of grant applicants increase, as indicated in 
the graph from USDA below. It has been more than 15 years since 
Congress increased funding for MAP and 20 years for FMD. During that 
time, cooperators like U.S. Wheat Associates have reduced staff and 
offices while they work to prioritize and maintain programming. The 
non-farm bill authorized Agricultural Trade Promotion Program (ATP) has 
temporarily staved off further reductions and allowed a much-needed 
increase in programming, but those funds run out in 2024. Significant 
increases to the MAP and FMD baseline funding levels will be critical 
as ATP funding is exhausted. Throughout the appropriations process and 
in past farm bill reauthorizations, NAWG has sought to preserve and 
enhance funding levels for export promotion programs given their 
significant return on investment and support for American agriculture 
and rural communities. Currently. NAWG is formalizing our farm bill 
priorities, however, important groundwork has been laid through the 
MAP/FMD Coalition seeking to double the funding level for these 
critical programs, given the decade and a half of level funding. It is 
important the Subcommittee consider these requests going into the 2023 
Farm Bill debate.
Available MAP Funding
2001-2023


    Similarly, as the price of shipping and fuel increases, the amount 
of commodities donated through food aid, given the authorized funding 
levels, continually decreases. Therefore, it is important that this 
Subcommittee give serious consideration to addressing the increased 
costs of providing food aid and expanding markets while looking at the 
funding levels of each of the programs contained in Title III. One such 
area the Subcommittee should examine is the cost it takes to ship 
commodities. According to a Congressional Research Service Report, 
procurement of commodities for in-kind food aid made up approximately 
40 percent of funding in FY 2020. These commodities are subject to 
U.S.-flag shipping requirements in the Cargo Preference Act of 1954, 
which requires at least 50 percent of the gross tonnage of U.S. 
Government-financed cargoes must ship on U.S.-flag vessels. Shipping on 
U.S.-flag vessels typically costs more than foreign-flag vessels, which 
raises the cost of providing in-kind food aid. This reduces the volume 
of food aid that can be provided. Congress should evaluate the required 
threshold for food aid programs, consider an increase to the Food for 
Progress Transportation Cap, and work with the maritime industry to 
find a creative solution that maximizes food aid while keeping the 
maritime industry strong.
    The last two farm bills have granted USAID flexibility in 
implementing programs. Unfortunately, this flexibility has gone almost 
solely toward cash donations or vouchers. As seen in the graph below, 
market-based assistance makes up close to 60 percent of food aid 
funding. While NAWG supports flexibility in food aid assistance, 
including monetization when absolutely necessary, the Subcommittee 
should consider prioritizing in-kind donations of U.S. commodities.
FY 2020 Funding by Modality *


          * All data included in this presentation is preliminary and 
        will be shared, when final, in the FY 2020 International Food 
        Assistance Report.

    Another area of concern is the FAS staffing levels in overseas 
offices. FAS staff play a key role and work in nearly 100 offices 
across approximately 180 countries. These staffers play a crucial role 
in increasing trade opportunities across these countries, which helps 
support and create jobs here at home. Additionally, financial support 
is needed to support administrative costs at FAS, which would allow 
full MAP and FMD funding to be used for export promotion and market 
development. Without long-term sustained investments and support for 
FAS staffing in overseas offices, our trade missions will be at a 
competitive disadvantage compared to our main competitors in finding 
new opportunities and executing the great work they already carry out.
    It is important that USAID and USDA continue to work together on 
all U.S. foreign aid programs, and NAWG encourages greater cooperation 
moving forward. Each agency brings unique skillsets to the operation 
and provides value in different ways. NAWG believes that implementation 
and funding of LRP should go through USAID, while the USDA should 
retain administration of Food for Progress programs.
Conclusion
    NAWG's policy committees and board of directors are evaluating 
these programs' effectiveness. We are working to finalize our policy 
priorities over the coming weeks. These farm bill priorities will be 
shared with you and your staff upon being finalized. As the House 
Agriculture Committee and the various subcommittees continues to have 
these hearings and reflects on programs authorized under the 2018 Farm 
Bill, I look forward to working with the Members of the committee and 
their staff to help craft the next farm bill that works for wheat 
growers and all American agriculture. Farmers play a key role in 
helping sustain our rural communities and feeding the world. As the 
farm bill process continues, I would urge judicious and expeditious 
review of authorized programs and work to ensure a full reauthorization 
of farm bill programs prior to the expiration of the current farm bill 
on September 30, 2023.
    We look forward to continuing to work with you to ensure a strong 
U.S. farm economy. Thank you again for this opportunity.
            Sincerely,

Nicole Berg,
President,
NAWG.

    The Chairman. Well, we thank you, Ms. Berg, for your 
testimony and your background and experience. That is eastern 
Washington State that you farm in?
    Ms. Berg. It is.
    The Chairman. Terrific.
    Our last witness on this panel wins whatever prize we can 
award this individual for testifying from the longest distance. 
Dr. Arif Husain is the Chief Economist of the World Food 
Programme, and he is joining us today from the Democratic 
Republic of Congo. So, Dr. Husain, I don't know what time of 
the day or night it is there, but we really very much 
appreciate your taking this opportunity to inform us on the 
challenges that we are facing with world hunger in the areas 
that we are very familiar with, and the new crisis that we have 
spoken about this morning with regards to Russia's invasion of 
Ukraine and the additional impact it is having on food 
supplies.
    So, your thoughts and comments will be very much 
appreciated this morning. What time is it there, Dr. Husain?
    Dr. Husain. Sir--good afternoon, sir. I am just on my way. 
I was so concerned about the connection that I postponed my 
leaving until tonight. So, I am in still in Rome.
    The Chairman. Oh, Rome? That is still the longest distance 
for today's witnesses in terms of testifying, but what time is 
it in Rome?
    Dr. Husain. Sir, it is just after 6:00 p.m.
    The Chairman. Well, we thank you. Please begin your 
testimony. It is 5 minutes, so I think you are familiar with 
this process and we look forward to hearing from you.

   STATEMENT OF ARIF HUSAIN, Ph.D., CHIEF ECONOMIST, UNITED 
             NATIONS WORLD FOOD PROGRAMME, ROME, IT

    Dr. Husain. Thank you, sir. Chairman Costa, Ranking Member 
Johnson, and distinguished Members of the House Agriculture 
Subcommittee, thank you. I greatly appreciate the opportunity 
to brief this Subcommittee on the United Nations World Food 
Programme's efforts to assist ever-increasing numbers of people 
with food assistance.
    Today, our world is not moving towards, but away from zero 
hunger, and the costs of humanitarian response is soaring while 
resources are more constrained.
    But first, I want to thank Members of Congress from both 
sides of the aisle and both chambers for their continued 
support of the World Food Programme. The United States is our 
largest partner, and we share an important history that dates 
back to the organization's very founding in 1961. The United 
States is our largest donor, and we deeply appreciate our 
partnership with the American farmers and agribusinesses.
    The quantity and quality of U.S. commodities is invaluable 
to our operations, and it is critical to our efforts to save 
lives, but also change lives around the world. Last year, the 
United States provided a record $3.86 billion to our World Food 
Programme, and a significant portion came through programs 
under the jurisdiction of this Committee. As a share of value 
United States in-kind donations constituted 17 percent of WFP's 
total food procurement in 2021. We are very grateful for the 
commodity support we receive through Title II emergency 
programs and the McGovern-Dole school feeding program.
    While WFP has increased its cash-based assistance portfolio 
in recent years, that does not mean that food transfers have 
become any less important. In fact, WFP benefits from having a 
balanced toolbox of food assistance modalities. We offer cash-
based assistance where supplies are ample, markets are 
functioning, and inflation is under check, and we provide in-
kind food assistance where markets are disrupted, food 
availability is limited, and inflation is a concern.
    The war in Ukraine has underlined the importance of in-kind 
assistance as well, which has a critical role in responding to 
domestic supply shortages which may soon be triggered in 
countries reliant on grain imports from the Black Sea region. 
Indeed, we cannot adequately speak to the current global hunger 
crisis and the importance of American food aid programs without 
addressing the conflict in Ukraine, which has global 
repercussions for food insecurity. It has caused deep upheaval 
in global food and energy markets, steep rises in international 
prices for basic staples, fertilizers, and energy, equal to 
those last seen in the high food and fuel crisis of 2008 or 
2011. But today's price hikes are perhaps even worse, because 
previously, we did not also have to deal with COVID-19 or wars 
in Ethiopia, Yemen, Syria, and northeast Nigeria.
    Sir, in 81 countries where WFP operates, up to 276 million 
people were already facing severe hunger crises or worse 
conditions. Now, the Ukraine war would easily push another 47 
million people worldwide into acute hunger. This means that up 
to 323 million people would become acutely food-insecure just 
this year. They will need urgent food, nutrition, and 
livelihood assistance. Refugees, returnees, asylum seekers, and 
internally displaced persons are particularly vulnerable.
    WFP therefore plans to assist about 145 million people in 
2022. This is an even higher number than in the past 2 years 
when WFP assisted a record-breaking 115 million beneficiaries 
in 2020, and a record 128 million beneficiaries in 2021. This 
year, WFP's assistance will cost approximately $20 billion. 
Unfortunately, however, our funding requirements are growing 
much faster than our contributions, and today, we face a 
funding gap of about 50 percent.
    While WFP has always faced funding gaps, they have 
previously not been this wide or in such a difficult 
environment, as other UN agencies are being forced to cut out 
assistance at the same time. This makes cuts to WFP assistance, 
which offers a lifeline to millions of people, much more 
painful than they would have been in the previous years. The 
Ukraine crisis only adds to the funding gap by increasing 
commodity and transportation costs. Buying from further afield 
implies higher transport costs and delivery times. This means 
that WFP's monthly costs are expected to be $71 million above 
their 2019 average. This is a 44 percent increase and enough to 
cover one lifesaving daily meal for 3.8 million people for a 
month. WFP is increasingly confronted with decisions of who to 
support and among those in need, and who not to support. Which 
child lives, which child dies? The costs of humanitarian 
inaction are tremendous, especially for people on the edge of 
starvation who, in worst cases, will pay with their lives. 
Failing to mobilize sufficient and timely funds for 
humanitarian assistance also means that donors bear the cost of 
inaction.
    As soon as refugees arrive at donor countries doors, the 
new host governments start literally paying the price for not 
acting earlier. For every U.S. dollar spent on forcibly 
displaced persons in the developing world, $70 U.S. dollars 
goes to an asylum seeker in a donor country. WFP is extremely 
grateful for the sustained commitment of the American people to 
addressing global hunger and responding to urgent humanitarian 
crises around the world. We thank you for your continued 
support, partnership, and collaboration.
    Thank you, Mr. Chairman, and I am ready for any questions. 
Thank you very much.
    [The prepared statement of Dr. Husain follows:]

   Prepared Statement of Arif Husain, Ph.D., Chief Economist, United 
                 Nations World Food Programme, Rome, IT
          This brief is being provided on a voluntary basis and should 
        not be understood to be a waiver, express or implied, of the 
        privileges and immunities of the United Nations and its 
        officials under the 1946 Convention on the Privileges and 
        Immunities of the United Nations.
Introduction
    Chairman Costa, Ranking Member Johnson, Members of the House 
Agriculture Subcommittee on Livestock and Foreign Agriculture, thank 
you for convening this hearing on ``International Trade and Food 
Assistance Programs'' as they relate to the farm bill.
    Today, I will provide a briefing on the United Nations World Food 
Programme's efforts to assist increasing numbers of people in a world 
that is not moving towards, but away from zero hunger, and where the 
humanitarian response is becoming more expensive with constrained 
resources.
    Before I do that, I want to thank Members of Congress--from both 
sides of the aisle and both chambers--for your continued support of the 
United Nations World Food Programme. The United States is WFP's largest 
partner, and we share an important history that dates back to the 
organization's very founding. Last year, the United States provided 
$3.86 billion in support to WFP, and a considerable amount was provided 
through programs under this Committee's jurisdiction.
    We also deeply appreciate the partnership we have with the American 
farmer. The United States is the largest contributor of commodities to 
international food aid programs and is critical to our efforts to 
alleviate hunger around the world. The quantity and quality of U.S. 
commodities is invaluable to our operations, and we could not do the 
work we do without the support and engagement of American farmers and 
agribusinesses.
U.S. Food Aid Programs
    The United Nations World Food Programme has been a U.S. partner for 
the P.L. 83-480 (Title II) and McGovern-Dole International Food for 
Education and Child Nutrition programs since their inception and 
remains today the largest recipient of American-grown commodities 
provided through those programs. As a share of value, United States in-
kind donations constituted 17 percent of WFP's food procurement in 
2021. WFP is encouraged by the proposed increase of ten percent in 
Title II funding for FY 2023, as reflected in the White House FY 2023 
Presidential Budget Request released last week.
    While WFP has increased the amount of assistance it provides 
through cash-based assistance in recent years--from US$210 million in 
2011 to US$2.3 billion in 2021--that does not imply that food transfers 
have become any less important. WFP values a balanced ``toolbox'' of 
food assistance modalities. The use of commodities in WFP programming 
has remained relatively constant over the last decade, increasing 
slightly from 3.6 million metric tons (mt) in 2011 to 4.4 million mt in 
2021.
    Cash-based assistance needs functioning markets. If markets are not 
working properly and responding to an increase in demand with rising 
supply, cash-based transfers can fuel inflation. Moreover, the current 
high food inflation rates in many poor economies pose a challenge for 
cash-based assistance. When money rapidly loses value, a set transfer 
value won't go as far anymore as it used to, making it difficult to 
ensure that beneficiaries are able to cover their food and other 
essential needs.
    In-kind food assistance, on the contrary, can put downward pressure 
on food prices. What is more, especially, in the scenario of a 
prolonged war in Ukraine, in-kind assistance can help respond to local 
supply chain breaks that the conflict could trigger in countries 
dependent on Black Sea grain imports.
    In short, the United Nations World Food Programme is grateful for 
the commodity support provided through the Title II emergency program 
and the McGovern-Dole School Feeding program. These resources are 
especially important today given volatile market and currency 
conditions faced in many countries and prolonged humanitarian 
emergencies driven by conflict that destroy markets and reduce domestic 
production of food.
State of Global Hunger
    The world is not on track in its efforts to achieve Zero Hunger. 
Progress on SDG2 was waning even before the COVID-19 pandemic began 
causing economic turmoil and eroding food security. In 81 countries 
where WFP operates, up to 276 million people are acutely food-insecure 
in 2022 and in need of urgent food, nutrition, and livelihoods 
assistance. This is a record high, and an increase of 126 million 
people compared to before the pandemic. Refugees, returnees, asylum-
seekers, and internally displaced persons are particularly vulnerable.
    There are more than \1/2\ million people (670,000 people) facing 
famine-like conditions (IPC/CH Phase 5, Catastrophe/Famine). Some 
400,000 of these people are in parts of Ethiopia affected by the Tigray 
crisis--the highest number recorded since the 2011 famine in Somalia--
while the remaining people are in South Sudan and Yemen. 44 million 
people living across 38 countries currently face severe hunger 
emergencies (IPC/CH Phase 4) and are one step from falling into famine. 
This number has risen from 27 million in 2019.
Ukraine Crisis
    We cannot adequately speak to the current global hunger crisis and 
the importance of American food aid programs authorized through the 
farm bill without addressing the conflict in Ukraine and the ripple 
effects it has produced. The conflict happens at a time when global 
hunger is already at record levels. This is a conflict that has global 
repercussions. I commend the bipartisan efforts already taken by the 
U.S. Congress to address the way the war is impacting global food and 
fuel prices, putting millions of people at risk of food insecurity in 
2022 and beyond.
    In recent years Ukraine and Russia have become ``major engines'' 
for feeding the world. With these countries critical suppliers to 
global markets for wheat, maize, and other food commodities as well as 
energy and fertilizer, the Ukraine conflict has caused an upheaval in 
global food and energy markets. Steep rises in international prices for 
basic staples--notably wheat and maize--in recent weeks reflect this, 
resulting in a food price environment that resembles the 2008 or 2011 
crises. Given heavy reliance on world commodity markets by numerous 
countries, prices are rising even in places that do not source their 
wheat, maize, or other commodities directly from Ukraine or Russia.
    This is especially important for countries that rely on global 
trade for their food supplies. The war in Ukraine does not immediately 
mean that there will a shortage of wheat production in the world. Much 
of the world's wheat is still consumed where it is grown; exports 
represent only a fraction of the global wheat supply (of the total 
global wheat production of 775 million tonnes in 2021-22, only 194 
million tonnes are traded internationally).
    Still, Ukraine and Russia account for a large portion of the 
world's wheat exports and countries that rely heavily on grain imports 
from the Black Sea like Lebanon, Yemen or Egypt will be greatly 
affected. Medium- and long-term global food security implications of 
the Ukraine crisis will depend on the duration of the conflict. If the 
conflict is resolved on the ground within the next 5 to 6 weeks, there 
could be a quick return to pre-conflict realities. However, if the 
conflict continues beyond 2 months, we face a completely different 
situation.
    In the case of a prolonged conflict, the absence of farmers or fuel 
shortages during critical periods for tending new crops could imply 
massive cuts to Ukraine's upcoming grain harvests. This includes 
planting for corn, barley, and sunflower seeds, which should begin this 
month, and the next major wheat harvest, which should take place this 
summer. Meanwhile, a lack of fertilizer supplies from Russia and 
continuously high energy costs could constrain yields in many countries 
around the world. Some 25 countries depend on Russia for 30 percent or 
more of their fertilizers.
    In this worst-case scenario, across the 81 countries with WFP 
operations, we estimate that acute hunger could rise by 47 million 
people (sub-Saharan Africa is most affected) from a pre-war baseline of 
276 million people who were already in the grip of acute hunger. This 
means that up to 323 million people could become acutely food-insecure 
in 2022.
COVID-19
    The current price hikes unfold in a much more difficult global 
context than previous price crises. There are two reasons for this: 
First, the world was more stable in 2008 than it is today. Several 
major conflicts have erupted since. The civil war in Ethiopia began in 
2020, the Yemeni civil war in 2014, the Syrian civil war in 2011 and 
the conflict in Northeast Nigeria in 2009. Second, the world has still 
not fully recovered from the fallout of the COVID-19 pandemic, leaving 
it in a difficult place to cope with yet another crisis.
    Global food prices have been on the rise since mid-2020. The Food 
and Agriculture Organization of the United Nations Food Price Index, a 
measure of the monthly change in international prices of a basket of 
food commodities, reached a new all-time high in February 2022. 
Similarly, crude oil prices, which have an enormous impact on food 
prices, have steadily increased since the spring of 2020, recovering 
from a pandemic-driven plunge and then surpassing their levels of 
previous years. When the price of gas goes up, everything else follows.
    Domestically, food prices have risen by at least 15 percent in 31 
countries over the past year, rendering essential purchases 
unaffordable for many. Three countries--Lebanon, Venezuela and Sudan--
have been drastically affected, with triple-digit food inflation rates. 
An additional 29 countries have experienced food price rises between 10 
and 15 percent over the past year and 55 countries between five and ten 
percent.
    Skyrocketing inflation is often associated with depreciating 
currencies. The currencies of these three countries--Lebanon, 
Venezuela, and Sudan--are highest in terms of year-on-year food 
inflation, and each lost more than 50 percent of their value over the 
past year. WFP currently flags 22 currencies as hotspots or in alert 
status, indicating annual value losses that are unusually high, rapidly 
accelerating or both.
    At the same time, incomes are still depressed from COVID-19. Labour 
markets are struggling to recover and, after staggering losses in 
working hours in 2020 and 2021 (equivalent to 258 million and 125 
million full-time jobs), the International Labour Organization projects 
a working hour deficit equivalent to 52 million full-time jobs for 
2022. This implies sustained losses in income and purchasing power, on 
top of inflation.
    The world has taken extraordinary measures to safeguard lives and 
livelihoods during the COVID-19 crisis--at an unprecedented cost. 
Fiscal support and monetary measures that governments put in place 
during the first 18 months of the pandemic to stave off economic 
collapse amount to US$26 trillion, nearly 30 percent of global gross 
domestic product. Debt is at record levels. About 60 percent of low-
income countries are at high risk or already in debt distress, compared 
with 30 percent in 2015. Governments are less economically resilient 
after 2 years of dipping into their coffers to soften COVID's economic 
blow on their citizens. This means that governments are tapped out too.
Funding Shortfalls
    WFP aims to assist increasing numbers of people, however, faces a 
significant funding gap. The Ukraine crisis not only unfolds in the 
aftermath of COVID-19 but with other drivers of hunger like conflict 
and climate change unabating, other crises--such as climate-related 
crises in Eastern and Southern Africa--are still there.
    WFP, therefore, plans to step up and assist increasing numbers of 
people: 145 million beneficiaries in 2022. This is an even higher 
number than in the past 2 years, when WFP assisted a record-breaking 
115.5 million beneficiaries in 2020 and a record 128 million in 2021. 
This year WFP's assistance will cost approximately US$20 billion.
    Funding requirements have unfortunately increased faster than 
contributions and today WFP faces a funding gap of 50 percent. While 
WFP has always faced funding gaps, they have previously not been to 
this extent or in this environment. As other UN agency and government 
budgets are similarly under strain, everyone is forced to cut 
assistance at the same time. This makes cuts in the lifeline of WFP 
assistance much more painful for people than they would have been in 
previous years.
    The Ukraine conflict only adds to the funding gap, by increasing 
WFP's operational costs and constraining its response at a time when it 
is needed the most. While other exporters of staple food commodities 
should--at least partially--be able to make up for the shortfall in 
supplies to global markets from the Black Sea region, these commodities 
are not only higher priced, but have added operational costs. Buying 
from farther afield implies higher transport costs and delivery times--
for WFP and everyone else dependent on purchases in international 
markets.
    In view of the recent hikes in container costs, this is an 
important consideration. The cost per container reached US$4,000 in 
2021, four times as much as its cost in 2019 (US$1,000). With rising 
prices in international markets for food commodities, WFP's food 
procurement costs were already up by US$42 million per month at the end 
of 2021 compared with their 2019 average. Together with an estimated 
US$29 million increase in WFP's monthly costs for food and fuel due to 
the price increases related to the Ukraine conflict, this means that 
WFP's monthly costs are expected to be US$71 million above their 2019 
average. This is an increase by 44 percent and enough to cover one 
daily ration for 3.8 million beneficiaries for a month.
Conclusion
    Unless the Ukraine crisis is resolved soon and stops pushing up 
needs while simultaneously making the humanitarian response more 
expensive, the global repercussions of the conflict could become much 
worse. As needs rise and the economic environment undermines 
assistance, WFP is increasingly confronted with the decision of who to 
support out of those in need--and who not to support.
    The costs of humanitarian inaction are tremendous, especially for 
people in need, who in the worst case pay with their lives. Failing to 
mobilize sufficient and timely funds for humanitarian assistance also 
means that donors bear the costs of inaction. As soon as refugees 
arrive at donor countries' borders, the new host governments start--
literally--paying for not having acted earlier.
    Looking back at the Syrian refugee crisis, Germany's total refugee-
related costs from 2016 to 2020 amount to a shocking US$125 billion at 
the Federal level. While this includes funds designated to fighting the 
root causes of forced displacement, more than US$80 billion went into 
domestic social transfers, transfers to states and municipalities, 
integration, as well as arrival, registration, and asylum procedures. 
For every U.S. dollar spent on a forcibly displaced person in the 
developing world, US$70 goes to an asylum seeker in a donor country.
    Not even a decade after the Syrian refugee crisis, the world risks 
repeating it. With the Ukraine conflict contributing to a deterioration 
of existing crises, such as in Afghanistan, regional destabilization 
and a massive influx of refugees to western countries could soon become 
a reality. The war has food security implications not only in Ukraine 
but risks causing collateral damage all over the world, putting up to 
an estimated 323 million people in a situation of food insecurity in 
2022. The world does not need another crisis in the current context 
that is already beset by extreme difficulties.
    Despite the very bleak situation, WFP is encouraged about USG's 
efforts to leverage the resources available under the Bill Emerson 
Humanitarian Trust and the sustained commitment from the American 
people to respond to some of these urgent crises around the world.

    The Chairman. Well, thank you, Dr. Husain for your time and 
also the comparative analysis that you provided us with regards 
to the challenges the World Food Programme has had in the past 
compared to the challenges today and the resources available.
    The Members at this time will be recognized in the order of 
seniority, alternating between the Majority and the Minority 
Members. We have heard our four witnesses who have done a 
terrific job, and every Member will be recognized for 5 minutes 
to ask questions, and for those of you who are operating 
remotely, please keep your microphones muted until you are 
recognized so that we can minimize background noise.
    Ms. Harden, you talked about the sustainability, which is 
very important to me. How does the sustainability factor into 
USDEC's work to market and promote dairy products globally?
    Ms. Harden. Thank you, Mr. Chairman. I will tell you, I am 
so proud of the dairy farmers and our dairy industry for their 
commitment to sustainability. I believe that we have the most 
sustainable dairy in the world. Our farmers and processors have 
set goals. This is a journey. We don't have all the answers 
today, but I do believe it is a big part of who we are and who 
we are going to be as a trading partner.
    And sir, we are asked all the time. Our customers ask us 
about sustainability, and they understand we are good for 
people, but we also have to be good for the planet and we are 
committed to that.
    The Chairman. Right, and we have challenges and I am very 
familiar with them, three-generation dairy family in 
California.
    We have kind of a bit of humor that we use oftentimes, and 
this relates to the famine and the shortage of food products 
that we are anticipating, that what a dairyman does when prices 
are up, they produce more milk. What do dairy folks do when 
prices are down, they produce more milk. I am not sure that 
model works anymore, but I know there is a lot of production in 
powder, and I am wondering as I said earlier, you may have 
heard, commodities that we have surpluses of, I am wondering 
what your thoughts might be on how this dry powder can be used, 
it is has a long life and it can be used for protein in areas 
where we are having hunger and food shortages.
    Ms. Harden. Most definitely, sir, and I love your anecdote, 
and that is one I have heard my whole career in dairy.
    I believe we can be a part of helping with malnutrition and 
hunger. Dr. Husain can verify this, but I was told that some of 
the biscuits that are going to Ukraine do include skim milk 
powder in them, and I believe there is more opportunity for the 
U.S. RUTF products that have such high protein, high energy. I 
believe dairy can play a bigger part in----
    The Chairman. Well, let's take a look at that.
    Mr. O'Keefe and Ms. Berg, CRS is requesting full 
flexibility for non-emergency in Title III Food for Peace 
programming. This would mean that all of the non-emergency 
Title III funds could be used in cash vouchers instead of 
commodities. Can you walk us through CRS's rationale behind 
this recommendation, and would that flexibility in use of 
commodity food aid for non-emergency programming together make 
sense? I am just--there were--not all the funds were spent on 
those commodities in the last year. Go ahead.
    Mr. O'Keefe. Thank you so much. Great question. Let me--we 
fully support the use of commodities in Title III programs 
where it is appropriate, and what we are recommending is that 
decisions about the mix of cash and commodities be made at the 
local level based on the very different contexts in each 
country.
    The way the program is now with 20 percent cap on 202(e), 
which was mentioned by Assistant to the Administrator Charles, 
USDA and USAID are forced to make decisions country-by-country 
based on these aggregate----
    The Chairman. Do you think we should lift that cap?
    Mr. O'Keefe. I do think we should lift that cap, and I 
think it would allow better, more effective programs in many 
situations that are more responsive.
    Whether it would result in more or less total U.S. 
commodities would remain to be seen, but it would result in 
more efficient and effective programs country-by-country.
    The Chairman. Ms. Berg?
    Ms. Berg. So yes, I know that they did have some 
flexibility in the last farm bill. Having been to Africa and 
witnessed a refugee camp, we definitely support in-kind 
commodities. We promote it. It was great to see that big bag of 
U.S. wheat sitting there and everybody embracing the fact that 
we are there.
    We do want a balance between the two. We did see the need 
for cash in how they create their camps and how they create the 
self-worth for the refugees as well, and it helps out with 
hospitals and different things.
    The Chairman. Well, we have a lot of refugees from Ukraine, 
over four million now in Europe.
    Dr. Husain, do you care to comment?
    Dr. Husain. Sir, I agree with both. I mean, essentially it 
is about having the in-kind assistance, in-kind commodities. 
There is space for that, but also, you would need the cash-
based on--the additional cash because what it does is it helps 
for people to keep the food, because sometimes people will have 
to sell their food on discount to get to other basic 
necessities, maybe health stuff, maybe school stuff, maybe 
something else.
    So, as long as these decisions are made where food aid also 
goes together with cash assistance and it is well thought out, 
it is in benefit of everybody, including the American farmer.
    The Chairman. Yes, I don't know if you--my time has 
expired, but quickly comment. The previous panel talked about 
our efforts to cooperate with the European Union and the 
initiatives that are going on as a result of this invasion of 
Ukraine and the impacts. Was the World Food Programme also with 
the UN and others a part of this collaborative effort?
    Dr. Husain. Yes, sir, they are listening to us. We are in 
an advisory role, basically, and what we are seeing is that it 
is maybe a production problem, but it is also economic access 
and physical access problem.
    Right now, there may be food in different parts of the 
world, but to get that food to the places where it is needed is 
really expensive, both in terms of cost, but also in terms of 
time.
    The Chairman. Good point.
    My time has expired. I want to recognize my friend, the 
gentleman from South Dakota, who is always focused, 
Representative Dusty Johnson.
    Mr. Johnson. Thank you, Mr. Chairman. Now, that is a lot of 
pressure. My line of questioning has to be focused or I make us 
both look silly.
    My questions will be for Ms. Harden. I noted with some 
disappointment that last week Ambassador Tai had noted that the 
Indo-Pacific Economic Framework was not going to have any 
reduction in tariffs, and this is coming with a backdrop where 
I think American producers are increasingly facing some uneven 
playing fields. Of course, competitiveness is really a relative 
measure, right, so the extent other countries are entering into 
quality trade deals, that can disadvantage American producers 
if we are not also out there trying to make sure that we are 
opening up new markets and reducing barriers.
    So, Ms. Harden, I have a two-part question for you. Number 
one, give us some sense of the barriers that American dairy 
producers and processors face in the Indo-Pacific region, 
number one, and then number two, give us sort of the state of 
play as you understand it, and do you think that Ambassador Tai 
and others will aggressively pursue the reduction and 
elimination of non-tariff trade barriers, and any other 
thoughts on that topic?
    Ms. Harden. Thank you, sir, and thank you for your support 
in continuing to make sure that agriculture is a focus of the 
framework.
    There are certain things that I hope are on top of their 
list and want to streamline really overly burdensome regulatory 
requirements on our dairy facilities and plants, trying to get 
product in there. We believe that is something that can be 
addressed and should be addressed.
    I talked about it in my comments briefly about really 
protecting our common food names, so the Europeans have really 
made it very hard for us to have an even playing field with 
products like parmesan and feta, so that is another area we 
really hope the Administration will focus on. And we just--we 
really do. We are going to continue to keep pressuring on to 
lower this most favored nation tariffs to really ensure we have 
a level playing field, because we do not in so many of those 
cases, sir.
    Mr. Johnson. So, in the Indo-Pacific region, are there 
particular markets that your members are most excited about, 
interested in, and that this Committee should focus on most 
attentively?
    Ms. Harden. Certainly. Indonesia, as I mentioned, Malaysia, 
the Philippines, Vietnam, all of those we believe have great 
potential. The customers there, the consumers there love our 
products. They want our products. We want to be able to get 
them to them.
    Mr. Johnson. So, do you have--I mean, what is your sense of 
where we--I mean, are we making progress on this front, and 
where do you--what do you see the developments looking like 
here in the weeks and months to come?
    Ms. Harden. Well, progress--we certainly are continuing. If 
you look globally, I would say we do have progress. We continue 
to be very aggressive in key markets, certainly in Indonesia, 
Pacific, and Southeast Asia, Mexico, Latin America, the Middle 
East, Northern Africa, but we are at a disadvantage in many of 
those places. So, keeping the pressure on to make sure there is 
a level playing field. We have great products. There is demand. 
It is a tight market right now, as you probably know, with 
product because of production from the EU and New Zealand, as 
well as the U.S. being very tight, but we are excited about 
exports. If you look at even our numbers that just came out 
this week, dairy farmers--U.S. dairy farmers and manufacturers 
are stepping up and trying to meet the demand globally.
    Mr. Johnson. Now, my friend, the Chairman, he and I have 
been working together on a number of supply chain issues, and 
so, my last question, Ms. Harden. I mean, any reactions or 
things you can share with us? I mean, I know the dairy industry 
has been hit hard by the supply chain disruptions. In fact, I 
think the number for the first half of last year was $1.3 
billion. What else can you tell us?
    Ms. Harden. It was a little better right after Christmas 
and some of the efforts led by you, frankly, and other Members 
of this Committee have been tremendously helpful. The 
legislation that is passed, introduction of additional 
legislation by you and Chairman Costa are sending a message to 
customers around the world that the U.S. is taking this issue 
very, very seriously.
    But we don't--we are not out of the woods. It is still very 
[inaudible].
    Mr. Johnson. We lost you for a minute there, Ms. Harden, 
but you know, amen.
    Ms. Harden. I am sorry. We have suggested other locations 
as well.
    Mr. Johnson. Very good. Thanks, Ms. Harden. That is well 
said.
    Mr. Chairman, I yield back.
    Ms. Harden. Thank you.
    The Chairman. Good points, Mr. Johnson, and we will 
continue to work on the supply chain issue. It is so important.
    The chair will now recognize the gentleman from 
Pennsylvania, Mr. GT Thompson, for his continued attention to 
this important hearing today. We thank you.
    Mr. Thompson. Mr. Chairman and Ranking Member, thank you so 
much. This has been great, and thank you to the panel. I really 
appreciate the experience that you all bring.
    Ms. Berg, your testimony mentions concerns with staffing in 
overseas FAS offices. I mean, we can do all kinds of great 
programs but if we don't have the people on the ground in 
different places, whether it is in the fields here at home or 
overseas, it is all for naught. Can you expand upon this 
concern, including what you have seen and heard, and your 
suggestions to USDA FAS to rectify these shortages?
    Ms. Berg. So, one of the things we are looking for is to 
double MAP and FMD funding to help with resources overseas. One 
of the things that we have noticed with MAP and FMD funding is 
that 15 years ago, you had certain cooperators and now through 
specialty crops it is just kind of growing and growing. And so, 
pieces of the pie are kind of getting smaller and smaller to 
each commodity. So, that is why we definitely need more funding 
for these programs to get boots on the ground and have a 
presence in these countries. So, we definitely want to have 
some sort of funding mechanism to help with staffing levels.
    Mr. Thompson. So, we have actually been a victim of our own 
accomplishments of expanding innovation and science with--and I 
think that is a great point.
    Dr. Husain, thank you for your service. Please give my best 
to Mr. Beasley when you see him, a dear friend.
    I appreciate your recognition of the role of American 
farmers in making your work of feeding those in need around the 
world possible. Likewise, you acknowledged the importance of a 
``balanced toolbox of food assistance modalities.'' Can you 
elaborate on what you mean by that, and do you worry that it is 
kind of shortsighted of your colleagues to continue to chip 
away at the in-kind donations required under Food for Peace?
    Dr. Husain. Sir, what I mean by that is that if you go back 
about 10 years, the cash-based programs were very, very small 
part of the World Food Programme, which was about $210 million. 
Today, that is $2.3 billion, so there has been a substantial 
growth on that side.
    But that growth has not meant that the food aid--in-kind 
food aid went down. In-kind food aid also went up from about 
3.6 million tons to about 4.3-4.4 million tons right now over 
the same time period. So, what we are seeing is that there is--
because of these rising needs, it is the base of what is 
required is becoming bigger and bigger. And the way I see this 
is that because we are sitting at a 50 percent gap in terms of 
what we expect to get versus what is needed, there is 
opportunity for growth both on the in-kind side, as well as on 
the cash side. Because again, I would say is that what we don't 
want to do is have people sell their food because they needed 
to meet some other essential need. So, provision of both of 
them hand in hand goes very far.
    Thank you.
    Mr. Thompson. Thank you.
    Mr. O'Keefe, thank you for your service with Catholic 
Relief Services. You are a force for good around the world.
    Your testimony alludes to the idea of resiliency and 
resilience building. Can you tell us how these efforts are 
unfolding in CRS's work, and how each of the CRS farm bill 
recommendations build resiliency?
    Mr. O'Keefe. Sure. So, thank you so much, Congressman, and 
thanks for the kind compliment.
    So, I am going to talk about our program--McGovern-Dole 
program in Sierra Leone. The President of Sierra Leone, who I 
had the opportunity to meet a year and a half ago at the 
Department of Agriculture here, thanked CRS because he is 
trying to build a nationwide local school feeding program on 
the foundation and the spine of the USDA-supported McGovern-
Dole program. And that is a key ingredient to how he sees 
resilience of government services, and particularly food 
support for the most vulnerable people in his country. We are 
using U.S. commodities mixed with cash to build the capacity to 
link schools with farmers to buy local produce so that at the 
end of the 5 year program, the country of Sierra Leone will be 
self-sufficient in its school feeding program. That is going to 
make that country more resilient, make those schools more 
resilient, and we think it is a huge contribution to the 
development of that society.
    Mr. Thompson. Okay. My time has expired, but I don't want 
to miss the opportunity just to say thank you to Ms. Harden for 
your leadership and your service with USDA formerly, and now 
with the U.S. Dairy Export Council. As someone who comes from a 
long line of dairy farmers, some days I think there is milk 
flowing through my veins. I am just really appreciative of your 
leadership and your service there. So, I look forward to 
continuing to work with you.
    Ms. Harden. Thank you.
    Mr. Thompson. Mr. Chairman, my time has expired.
    The Chairman. Well, thank you very much, Representative 
Thompson. We really appreciate all of your contributions, and 
we all thank the witnesses and the efforts on mission for 
mobilization on Catholic Relief Services. We really appreciate 
the good work you folks do as well.
    Our next Member is Representative Barry Moore from Alabama, 
and then I believe we have one other Member who is in queue, 
and if that is the extent of it, then we will close the 
hearing.
    Mr. Moore from Alabama's 2nd District.
    Mr. Moore. Thank you, Mr. Chairman. I appreciate it.
    Dr. Husain, each day reveals more dire news from Ukraine. 
Your testimony spent some time addressing the conflict and its 
current and potential implications. Can you please expound on 
that testimony a little, and also include any updates that you 
might have from yesterday or maybe this morning?
    Dr. Husain. Yes, sir. In Ukraine, sir, it is one of the 
worse crises which I have seen, and I have seen many. What is 
happening there is unacceptable, and being right in the middle 
of that at World Food Programme, we are assisting about one 
million people already inside the country. Our goal is to get 
to at least three million people very, very soon, within weeks, 
and up to six million people by June.
    Sir, in our supply chains, we already have 40,000 metric 
tons of commodities which we are trying to move. It is not only 
about when you are displaced, and over ten million people are 
internally displaced. It is not about giving wheat or flour; it 
is about giving commodities which they can eat right away. So, 
prepared commodities and doing that supply chain is a big task, 
but we are up to it. We have over 176 people inside and in the 
six neighboring countries doing this job.
    And I would like to say that, sir, what is happening in 
Ukraine has huge ramifications for the rest of the world. Where 
in country after country, 44 million people are one step away 
from famine, 44 million people one step away from famine. We 
are cutting their rations by half. Why? Because we don't have 
enough resources. And sir, this is not going to go away until 
we sort out the root causes, and what is the biggest root 
cause? It is conflict. Conflict everywhere. In Ukraine, that is 
the latest. But Yemen is still there. Syria is still there. 
Northeast Nigeria is still there. Ethiopia is still there.
    And sir, the other last thing that I want to say is that 
because of Ukraine, it doesn't mean that other conflicts stop. 
We have climate shocks. I am seeing things out of Ethiopia in 
the Somalia region which remind me of 2011 Somalia where 
260,000 people died before a famine was declared according to 
Johns Hopkins University. So, we are looking at some very nasty 
things, and I don't think it is going to improve, because if 
this war doesn't get resolved in the next couple of months, 
fall is going to be worse than what we are seeing right now. I 
am sorry to be saying all of these things, but that is what is 
out there.
    Mr. Moore. Well, we appreciate it, obviously, and I was in 
Ukraine in August, and I know that us as a Committee and as a 
nation, we appreciate your efforts, and we will continue to 
keep you in our prayers. But thank you for the work you do.
    Dr. Husain. Thank you.
    The Chairman. The Chairman still has time on your clock, 
unless you yield the balance of your time.
    Mr. Moore. Yes, Mr. Chairman, with that I will yield back. 
Thank you.
    The Chairman. All right, thank you. That was good 
questions, good focus, good response, Dr. Husain.
    The next Member that I have on my queue line is 
Representative Baird from Indiana's 4th.
    Mr. Baird. Thank you, Mr. Chairman. I really appreciate you 
holding the second part of this panel and this hearing.
    My first question really goes to Ms. Harden, and it deals 
with the fact that Ambassador Tai recently stated that free 
trade agreements are a 20th century tool, and that our 
competitors, notably the European Union, are forging ahead and 
securing preferential market access for their agricultural 
producers through comprehensive trade agreements.
    So, Ms. Harden, are you concerned about where we are in 
making those kinds of trade agreements, and how that impacts 
American produced products?
    Ms. Harden. Yes, sir. To be perfectly honest, I believe we 
have to use every tool available. We do feel like we are 
falling behind. Our largest competitors, as I mentioned 
earlier, with the EU and New Zealand, they take full advantage 
of all of the tools and I believe we just have to as well. We 
know we have good products. We know we can be competitive, but 
it has to be a level playing field. So, everything that can be 
available, we actually need to be using, sir.
    Mr. Baird. I really agree with you. One of the things that 
we have in our favor in addition to being able to really get 
products to other countries is we really have high quality 
products. We have the ability to produce and our farmers and 
ranchers can really be proud of that, and we can be proud of 
our products moving overseas.
    I guess I might change direction just a little bit, and Dr. 
Husain, the World Food Programme is a critical partner for U.S. 
and getting food into the disaster zones, and delivering 
longer-term assistance through USDA's McGovern-Dole Food for 
Education Program. Can you tell us a little bit about your 
success in using these nutritionally dense U.S. grown food in 
your McGovern-Dole projects, like fortified rice, corn-soy 
blend, and dry beans? Give us some idea how successful those 
programs are.
    Dr. Husain. Sir, we are, in fact, McGovern-Dole, we are 
proud partners of that. Of the 40 or so countries where it is 
helping school children, we are in ten countries, so about \1/
4\ of all countries we are working with McGovern-Dole. And that 
itself says we do that because we believe in it. We are--we 
see--like Mr. O'Keefe was saying, we see the value of the child 
providing that nourished meal, not only as something which is 
for the child, but really is for the community. And that--
bringing in the community support on that side. Essentially, 
putting the seeds for that is critical, because then 
communities can take over. They can build. And I think this is 
the real value of the McGovern-Dole initiative, and the more we 
can do, the better it is.
    And the other thing, sir, I would suggest is that we are 
present in 80 countries. We know these people. We know these 
markets, and sometimes, we can offer advice on which countries 
to prioritize, where to prioritize, and I think that would also 
be quite helpful in terms of taking these really trusted and 
proven programs to another level.
    Thank you, sir.
    Mr. Baird. Well, I think it is really--I am glad to hear 
because I think one way that we can advance civilizations to 
help themselves is through the children and give them exposure 
to how to produce food and that sort of thing, and I think that 
is a real asset.
    Dr. Husain. That is true, sir.
    Mr. Baird. Yes. Well, I thank you very much and appreciate 
the opportunity to be with you, and I yield back, Mr. Chairman.
    The Chairman. The gentleman yields back, and we thank him 
for his focus and his participation.
    I will now, for closing comments, recognize my colleague, 
the gentleman from South Dakota, and then I will follow and 
again, we want to thank our witnesses.
    Mr. Johnson. There have been a number of references made 
today, Mr. Chairman, to McGovern-Dole initiatives, and in fact, 
our colleague from the big 1st of Kansas noted that Bob Dole 
had held that seat prior to Tracey Mann. I would just note that 
George McGovern held my seat in Congress. He was not my 
immediate predecessor, but in the final years of his life, he 
and I struck up quite a relationship. I think we got to know 
each other relatively well, and clearly, George McGovern's 
politics were not my politics. But there were a number of areas 
upon which we agreed, and three of them were, first off, 
recognition of the unbelievable efficiency and effectiveness of 
the American farmer and rancher. Number two, the incredible 
importance of access to markets, giving those producers an 
opportunity to help feed the world; and then number three, the 
incredible power of food, of sustenance, to help link together 
people with shared values that you spoke about earlier, Mr. 
Chairman, and about how that humanitarian aid can be a 
tremendous soft power that makes the world more secure, safer, 
and freer. And it is not just George McGovern and I that shared 
those values, Mr. Chairman, they are values that you and I 
share as well, and shared values of a huge swath of bipartisan 
Members on this Committee.
    So, I just want to close by thanking the panelists on both 
halves of the panel for so clearly articulating the key issues 
that are impacting those shared values, and what we can do 
together in the weeks and months to come to make sure that 
American producers have avenues for their yields, that 
communities in crisis receive the help they need, and that 
shared values are advanced.
    The Chairman. I thank the gentleman for his comments, and I 
concur on all of the above. And I think this has been a very 
good hearing. It has been a very good hearing not only because 
of participation of the Members this morning, but also because 
of the witnesses. We have had a tremendous level of experience 
and expertise from this second panel as well as from the first 
panel, and it certainly resonates on the complex issues that we 
are dealing with.
    And of course, we have discussed this morning how the 
catastrophic events that have taken place as a result of 
Russia's invasion of Ukraine without reason, and the effects it 
is having not only for the courageous, valiant people in 
Ukraine, but the ripple effect is it having elsewhere and the 
added refugee problems that we are dealing with.
    Obviously, we are going to continue to find ways to support 
Ukraine and find ways to, as Dr. Husain pointed out and others, 
prop up the global food supply chain. I think, while we have 
not discussed it too much this morning, tapping into the Bill 
Emerson Humanitarian Trust is one step that could have an 
immediate impact. But we talked about lifting caps. We talked 
about a host of other ideas and thoughts dealing with 
commodities in which we have surpluses here in the United 
States, and I am heightened to hear how as we look at next 
year's effort for the reauthorization of the farm bill, the 
suggestions that our witnesses have made on how we can improve 
Title III and Title II, and how we can improve the way these 
programs work.
    I am reminded of the fact that the iteration of our 
flagship international food aid programs was Food for Peace, 
conceived by another significant American statesman, Hubert 
Humphrey. Senator Humphrey signed that law in by President 
Dwight Eisenhower. That takes us back a ways, but it is an 
indication--and I want to close on this note--on what we can do 
in this incredible country of ours when we work together on a 
bipartisan basis. Over the years, our success, I believe, has 
best been demonstrated when we work together on a bipartisan 
basis, and certainly, as a colleague of ours once said--I 
believe he is the ambassador to Japan right now--never let a 
crisis go to waste. As horrific as this crisis is, it gives us 
an opportunity to restore the notion that we put our politics--
we leave it behind at the water's edge, and these global 
challenges we are facing not only in Ukraine, but as Dr. Husain 
mentioned in Yemen and elsewhere around the world, conflict is 
the source of this and therefore, we as America are stronger 
and better and more able to work with our allies if we together 
here in Washington are united and we put our politics aside. 
And that is part of our challenge. But we have an opportunity 
here. We know that the storm is in front of us, and we can 
anticipate because of that what we need to do to address the 
challenges that we are facing.
    As I said earlier this morning, historians will look back 
20 years, 25 years from now and they will make determinations 
on whether or not we made more good decisions than poor 
decisions. I believe we have an opportunity to work together to 
make good decisions as it relates to the programs not only in 
Title III, but the other titles within the farm bill 
authorization. And we can find ways to use emergency 
initiatives to address the current crisis that we are facing.
    So, with that said, I want to thank the Members of the 
Committee. I want to thank our witnesses for the good work that 
you have done, and we will keep all of these thoughts in mind 
not only today, tomorrow, but as we write the next farm bill 
next year.
    So, with that, under the Rules of the Committee, the record 
of today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from any witness or any question posed by a Member.
    So, with that understood, I thank the witnesses for the 
terrific job you have done, and this hearing of the 
Subcommittee on Livestock and Foreign Agriculture is now 
adjourned.
    [Whereupon, at 12:52 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
Submitted Article by Hon. Jim Costa, a Representative in Congress from 
                               California


[https://www.politico.com/news/2022/04/05/deepening-global-food-crisis-
ukraine-russia-00023124]
Russia's War On Ukraine \1\
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war-on-ukraine-2022-2022
03/.
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`We see the storm coming': U.S. struggles to contain a deepening global 
        food crisis
          Biden officials are scrambling to limit the damage from fast-
        spreading food shortages sparked by Russia's war in Ukraine, 
        but they face complex political and logistical challenges.
        
        
          Alem Ande bakes bread at the Shagarab camp on Aug. 15, 2021, 
        in Shagarab, Sudan. D Abdulmonam Eassa/Getty Images.

By Meredith Lee \2\
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    \2\ https://www.politico.com/staff/meredith-lee.

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04/05/2022 03:24 p.m. EDT

    As Russian forces refocus the brunt of their military assault on 
Ukraine's food-producing southeast, U.S. officials and lawmakers are 
struggling to help ward off a deepening crisis both inside Ukraine and 
for fragile economies around the world already reeling from climate 
disasters and [COVID]-19.
    Russia's military is pushing further into Ukraine's wheat fields, 
which could jeopardize millions of tons of grain set to be harvested in 
July--threatening sustained shortages in countries across Africa and 
the Middle East that rely on Ukraine as a major source of their grain 
and sunflower oil to feed millions of people. The crisis has also 
contributed to sky-rocketing grain prices, which has made it harder for 
humanitarian organizations like the United Nations' World Food Program, 
to respond; the agency says it needs an additional $16 billion to feed 
a record 137 million people for the rest of the year.
    Ukrainian President Volodymyr Zelenskyy told the U.N. Security 
Council Tuesday that Moscow has provoked ``a global food crisis that 
could lead to famine in Africa, Asia and other [regions] and large 
scale political chaos in many countries.''
    White House and State Department officials are working with USAID 
and WFP to counteract the shortages, and President Joe Biden has 
pledged $1 billion in humanitarian assistance ``for those affected by 
Russia's war in Ukraine and its severe impacts around the world.'' But 
after Congress approved $4 billion in humanitarian assistance for 
Ukraine and refugees in nearby countries in the omnibus spending 
package last month, many GOP lawmakers have little political appetite 
for further global food aid funding. And while the Administration has 
some resources it can tap without Congress to send American-grown food 
to regions in need, agricultural realities, including widespread 
drought last year, the timing of the planting season and the rising 
cost of inputs such as fertilizer and fuel, limit how much U.S. crops 
can help fill the gap created by the crisis in Ukraine.
    According to two people familiar with the plans, the Administration 
plans to unlock additional international food aid in the coming days, 
including the Bill Emerson Humanitarian Trust--a Federal cash reserve 
of $260 million the government keeps to buy U.S. grain and other 
commodities to send to foreign countries in crisis. Lawmakers are 
pressing Agriculture Secretary Tom Vilsack to approve a withdrawal of 
the funds for USAID, which first needs to formally request it. But 
Congressional aides acknowledge the available funding is a drop in the 
bucket compared to the total aid that's needed.
    Meanwhile, a push for Congress to provide additional foreign aid 
fell apart this past weekend. A small group of senators were trying to 
revive efforts to squeeze $1 to $2 billion in international funding 
into a [COVID]-19 package, including some $200 million in global food 
aid. But the plan crumbled after Republicans rejected Democrats' 
suggested methods to pay for the aid and several Republicans demanded 
the Biden Administration reverse a move to lift a Trump-era deportation 
policy for migrants, the Title 42 public health order being enforced at 
the southern border, according to three Congressional aides.


          Sen. Chris Coons speaks during a Senate Judiciary Committee 
        confirmation hearing on Capitol Hill in Washington, Wednesday, 
        March 23, 2022. D Alex Brandon/AP Photo.

    Chris Coons (D-Del.), one of the senators pushing for the 
additional food aid, lamented the move as ``a serious mistake'' and 
argued that ``mass starvation is a real, impending threat.'' On top of 
that, Coons, Republican Lindsey Graham of South Carolina and other 
like-minded senators are warning that such widespread food shortages 
could trigger mass migration and political destabilization across North 
Africa and the Middle East, which could in turn threaten U.S. national 
security. Coons said he will push for a stand-alone bill with global 
vaccine and food aid funding.

          ``We see the storm coming and we feel under-prepared to deal 
        with this,'' said a senior Senate aide.

    Sens. Bob Menendez (D-N.J.) and Jim Risch (R-Idaho), the top 
lawmakers on the Foreign Relations Committee, sent a letter \3\ Tuesday 
asking the Biden Administration to develop a strategy to address the 
global food insecurity fallout, including ``fully leveraging'' the [] 
Bill Emerson Humanitarian Trust and other programs. But they stopped 
short of calling for additional funding from Congress.
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    \3\ https://www.foreign.senate.gov/download/04-05-22-rm-and-risch-
letter-to-president-biden-re-ukraine-global-food.
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    Officials at the State Department's Bureau of Economic and Business 
Affairs are tracking the global food insecurity fallout from Russian 
President Vladimir Putin's invasion of Ukraine.
    ``Vulnerable groups, particularly in the Middle East and Africa, 
are at higher risk because of Russia's war,'' said Ramin Toloui, who 
heads the bureau.
    Toloui said U.S. diplomatic posts are in close contact with 
countries whose people are at risk of increased food insecurity and 
American officials are working with allies, multilateral agencies and 
international financial institutions to address food insecurity.

          We see the storm coming and we feel under-prepared to deal 
        with this.
                                                     Senior Senate aide

    U.S. officials are particularly concerned about countries such as 
Afghanistan and Yemen, which are already suffering severe hunger 
crises, as well as Lebanon, where \3/4\ of the population lives in 
poverty. The latter country, already in an economic free fall, received 
about 80 percent of its grain from Russia and Ukraine before the war. 
In another blow, Lebanon can only store about one month's worth of 
wheat after the 2020 Beirut blast that destroyed its major grain silos.
    With shortages stacking up, the U.S. is pressing India, Argentina, 
China and other countries with significant grain reserves to donate 
some of their supply to the World Food Program or at least release it 
into global markets. Biden, after meeting with G7 leaders late last 
month, warned of ``real'' food global shortages. Biden added that the 
U.S. and Canada, two major grain exporters, discussed how the two 
countries could send more grain abroad to help fill supply gaps.
    But as U.S. officials are working to alleviate shortages, they're 
running into other challenges: namely that global wheat reserves, 
including in the U.S., are running lower than normal after record 
drought last year. Governments with grain surpluses have been reluctant 
to release too much of their supply, including Canada.
    The higher demand for wheat, corn and other food supplies are also 
hitting at a time when farmers across the world are under immense 
financial pressure from high costs for fuel, fertilizer, seed and other 
agricultural inputs.


          Cecilia Rouse, chair of the Council of Economic Advisers, 
        speaks during a press briefing at the White House, Monday, 
        March 28, 2022, in Washington. D Patrick Semansky/AP Photo.

    In the U.S., Cecilia Rouse, chair of Biden's Council of Economic 
Advisers, indicated to reporters last week that the White House 
expected U.S. farmers to increase production in order to benefit from 
higher commodity prices, which shot up after Russia invaded Ukraine.
    ``With the price of food rising, they will be responding by making 
additional plantings and trying to take advantage of the increased 
price signals,'' Rouse said. ``So the market will work as the market 
will work.''
    Rouse added that the U.S. Government, including USAID, was working 
with partners and other international organizations ``to get the food 
and ease the price pressures'' for countries in need.
    But U.S. farmers, who generally make plans and order supplies in 
the winter for the spring planting season, are already in the fields in 
some states. The Agriculture Department released a report just days 
after Rouse's remarks indicating U.S. farmers planned to plant roughly 
the same number of acres as the year before, but with less corn--adding 
to concerns about grain reserves.
    G.T. Thompson of Pennsylvania, the top Republican on the House 
Agriculture Committee, said it was ``completely naive'' of the White 
House to say that farmers would be able to ramp up production amid high 
fuel and other production costs.
    ``We're not talking about just producing what we've always done,'' 
Thompson said. ``With the hunger, and the starvation, and the death 
that's going to occur, we would need to give [U.S. farmers] the tools 
to increase their yield.''
    Thompson, other Republican lawmakers and some farm groups say they 
want Vilsack to allow farmers to plant crops on land currently in 
Federal conservation programs in an effort to meet the global demand. 
Vilsack recently rejected the request, arguing the impact of such a 
move would be limited since a ``considerable proportion'' of the land 
is in regions suffering drought. The land is also, by design, often 
located in hard to reach places to help mitigate soil erosion and 
capture carbon. Environmental groups have been pressing Vilsack to seek 
alternatives.\4\
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    \4\ https://www.iatp.org/sites/default/files/202.

          With the price of food rising, they will be responding by 
        making additional plantings and trying to take advantage of the 
        increased price signals. So the market will work as the market 
        will work.
                                                         Cecilia Rouse.

    If the U.S. fails to respond to the food crisis abroad, some 
lawmakers worry China or other rival countries could use their grain 
reserves to gain additional political influence across Africa and Asia.
    ``They are predators. They are extorters,'' Sen. Kevin Cramer (R-
N.D.) said of China, noting Beijing's previous efforts to use 
commodities and their own assets as a sort of ``predatory lending'' 
tool.
    China isn't likely to be in a position to export significant 
amounts of grain anytime soon, according to economists tracking the 
situation. But it's possible Russia could try to fill a small segment 
of the food supply gaps left behind by Ukraine. U.S. officials worry 
that Russia's recent threat to export its agricultural products only to 
``friendly'' nations will lead some vulnerable countries to remain 
silent about the Russian invasion.
    ``This is why we--as a peace loving, freedom loving, generous 
nation--cannot abandon our post in these fragile areas,'' said Cramer, 
adding he would be inclined to support a stand-alone funding bill. 
``The leadership voids will be met by others that will exploit it for 
much less noble purposes.''
    For now, Cramer is in the minority of his GOP colleagues, many of 
whom note the U.S. is already a top provider of global food aid and 
that the Administration still has money it can spend from current aid 
programs--including Cramer's own home-state colleague, John Hoeven.
    Hoeven, asked if the U.S. should increase funding for programs that 
purchase and send U.S. commodities abroad, replied, ``We should use the 
existing programs.''
                                 ______
                                 
 Submitted Report by Hon. Jim Costa, a Representative in Congress from 
                               California


International Food Security Assessment, 2021-31
Economic Research Service

GFA-32

July 2021


          [Cover image, showing Indian farm worker cutting sugarcane 
        using machete on the field.]
          Cover photo image from Getty Images.

www.ers.usda.gov

    Recommended citation format for this publication:

          Baquedano, Felix, Yacob Abrehe Zereyesus, Constanza Valdes, 
        and Kayode Ajewole. July 2021. International Food Security 
        Assessment, 2021-31, GFA-32, U.S. Department of Agriculture, 
        Economic Research Service.
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Abstract
    This report presents results from the United States Department of 
Agriculture (USDA), Economic Research Service's (ERS) International 
Food Security Assessment (IFSA) analysis, which uses a demand-driven 
framework that evaluates consumer responsiveness to changes in prices 
and incomes for 76 low- and middle-income countries. Reflecting 2021's 
anticipated lower income levels, despite anticipated growth for most 
countries, the number of food-insecure people is estimated at 1.2 
billion, almost 291 million higher than in 2020. A sharp increase in 
global food insecurity was experienced in 2020, as compared to 2019, 
due to the COVID-19 pandemic. Most of the additional food-insecure 
people in 2021 are located in the Central and South Asia (64.1 percent 
or 186.8 million) sub-region--including India, which drives food 
security trends in the Asia region. While the Sub-Saharan Africa region 
is projected to account for 20.6 percent (60 million) of the additional 
food-insecure population. The remaining additional 15.3 percent (44.7 
million) food-insecure people in 2021 are located in other Asian sub-
regions, Latin America and the Caribbean, and North Africa. The 
prevalence of food insecurity in 2021 for the countries in the 
assessment is estimated at 30.8 percent of the overall population in 
the countries, an increase of 6.8 percentage points relative to the 
2020 estimate. In 2031, the number of food-insecure people is projected 
to decline from the 2021 estimate by 47.4 percent (637.7 million 
people), which is 14.0 percent of the projected population of the 
countries included in this assessment. Given the evolving nature of the 
impacts from the COVID-19 pandemic and the long-term effects on 
individual country economies, the estimation results presented in this 
report contain a high degree of uncertainty. It is important to note 
the projections do not consider the impacts of unknown future events--
such as climate change, armed conflict, and political and economic 
instability.
    Keywords: Calories, Coronavirus, COVID-19, food demand, food 
insecurity, food prices, food security, income, nutritional target, 
pandemic, Asia, Latin America and the Caribbean, North Africa, Sub-
Saharan Africa, U.S. Department of Agriculture, USDA, Economic Research 
Service, ERS.
Acknowledgments
    Appreciation is extended to Shida Henneberry and Utpal Vasavada, 
USDA, Economic Research Service, for their guidance in the drafting of 
this report. We would also like to thank the reviewers for their 
feedback and helpful comments, especially Johanna Trevino and Clara 
Cohen, U.S. Agency for International Development; David Boussios and 
Sharon Sydow, USDA's Office of the Chief Economist; Hui Jiang and Pace 
Lubinsky, USDA's Foreign Agricultural Service; Keith Wiebe, 
International Food Policy Research Institute; and Sonja Perakis and 
Peter Thomas, Famine Early Warning Systems Network. We also thank 
Christine Williams, Christopher Whitney, and Casey Keel for editorial 
assistance, David Marquardt and Rodney Odom for map design, and Chris 
Sanguinett for layout and cover design.
Preface
    This report continues the series of Global Food Assessments (GFA) 
in developing countries that begun in the late 1970s by USDA's Economic 
Research Service (ERS). In 1993, the title of the series was changed to 
Food Aid Needs Assessment (FANA) to reflect the reports' contents more 
accurately, which assess selected developing countries with recent or 
ongoing food deficits. However, not all countries experiencing 
significant food deficits are included due to lack of data on key 
metrics such as average caloric consumption, prices, or macroeconomic 
figures. In 1997, ERS widened the analysis beyond the assessment of 
aggregate food availability to include more dimensions of food security 
and the title was revised again to Food Security Assessment (FSA). 
Starting with the report published in July 2011, ERS changed the name 
to International Food Security Assessment (IFSA) to clarify the 
geographic scope of the analysis.
Contents
Summary
Introduction
Country coverage and observed food security trends
Gross Domestic Product and international food price trends
Grain demand, production trends, and the Implied Additional Supply 
Required (IASR)
Regional Overview
Sub-Saharan Africa

    Central Africa (CAF)
    East Africa (EAF)
    Southern Africa (SAF)
    West Africa (WAF)

North Africa
Latin America and the Caribbean

    Central America and the Caribbean (CAC)
    South America (SA)

Asia

    Commonwealth of Independent States (CIS)
    Central and Southern Asia (CSA)
    Other Asia (OA)
    Southeast Asia (SEA)

Appendix I: Food Security Assessment Model: Definitions and methodology

    Structural framework for estimating and projecting food demand in 
the aggregate Demand system definition and calibration
    Modeling Staple Cereal Production
    Yield
    Modeling Area
    Modeling IASR

Appendix II: Food Security Measures for International Food Security 
Assessment Countries, 2021-2031
Appendix III: Macroeconomic measures for the International Food 
Security Assessment Countries, 2021-2031

          Errata:

                  On August 3, 2021, the abstract and introduction 
                section was updated to correct typographical errors. No 
                other components of the report were affected by the 
                error.
                  On August 11, 2021, the abstract and introduction 
                sections were updated to correct errors. No other 
                components of the report were affected by the errors.

    A report summary from the Economic Research Service
What Is the issue?
    Millions of people around the world are food-insecure and do not 
consume sufficient calories to sustain an active and healthy life. What 
factors affect the present and future prevalence of international food 
security? Agricultural production and market conditions affect the 
supply of food available in a given country. And, income, food prices, 
and economic inequality are major factors determining the ability of 
people to access food. Widespread food availability, rising income, and 
low food prices improve a country's food security by increasing access, 
although the extent of these gains are dependent on the distribution of 
income within countries. On the other hand, adverse income, prices, or 
food supply shocks can increase food insecurity, as these factors 
collectively impact low- and middle-income consumers' access to food. 
Measuring the shifts in consumer demand in response to these factors 
can help measure progress in food security. Even if demand may be fully 
met, a person could remain food-insecure--as they might not be able to 
purchase enough calories to sustain an active and healthy life for 
their level of income. This report uses a demand-driven model that 
integrates income, price, and food supply shocks to assess current-year 
levels of food security and projected changes over the next decade for 
76 low- and middle-income countries in Sub-Saharan Africa, North 
Africa, Latin America, the Caribbean, and Asia. The report helps USDA 
and its stakeholders estimate medium-term projections of food security 
in the selected countries. The 2021 report also analyzes the combined 
impact of lower incomes and price shocks associated with the lingering 
effects of the Coronavirus (COVID-19) pandemic on present and future 
food security.
What did the study find?
    The report's results reflect the country and global level estimates 
of economic shocks from the COVID-19 pandemic at the time of 
estimation. The results are based on macroeconomic trends up to August 
2020, consumption and production data up to January 2021, and price 
trends from January 2018 to December 2020. The report's projections do 
not consider the impacts of certain types of possible unknown events in 
the future, such as climate change, armed conflict, and political and 
economic instability.
    The main findings for the 76 countries covered by this report are:

   Despite the anticipated overall rebound in per capita gross 
        domestic product (GDP) growth in 2021, income is projected to 
        remain below pre-pandemic levels for most countries in the 
        assessment. This projected lower per capita GDP level in 2021 
        is the main underlying factor for the continued decline in food 
        security.

   Due to the persistent effects of COVID-19 on income levels, 
        the number of food-insecure people in 2021 is estimated at 1.2 
        billion, an increase of almost 32 percent (291 million people) 
        from the 2020 estimate. This suggests 30.8 percent of the 
        estimated population of the 76 countries is unable to consume 
        2,100 kilocalories (kcal) a day, an average caloric level 
        necessary to sustain a healthy and active lifestyle.

   Most of the additional 291 million people estimated to be 
        food-insecure are in Asia (72 percent of the total)--
        particularly in Bangladesh, India, Pakistan, and Indonesia--and 
        in Sub-Saharan Africa (21 percent of the total).

   Despite the COVID-19-induced income shocks, food security is 
        projected to improve in all 76 countries over the next 10 
        years. By 2031, the share of the population that is food-
        insecure in the 76 countries studied is projected to fall to 14 
        percent (637.7 million people), a 47.4 percent drop in the 
        number of food-insecure people from 2021.

   The anticipated improvement in food security over the coming 
        decade is driven by a projected steady income growth, 
        relatively stable prices for major grains, and lower population 
        growth, particularly in Asia, Latin America, and the Caribbean.
How was the study conducted?
    The USDA, Economic Research Service (ERS) demand-oriented 
International Food Security Assessment (IFSA) model (described in the 
appendix) projects food demand and food gaps in 76 low- and middle-
income countries through 2031. Food security is evaluated for each 
country by estimating the share of the population unable to reach a 
caloric target of 2,100 kilocalories per person per day. The intensity 
of food insecurity is measured by determining the gap between projected 
food demand for those falling below the threshold and the caloric 
target. Food demand is expressed in grain equivalents, based on caloric 
content to allow aggregation across four separate food groups: the 
major grain consumed in the country, other grains, roots and tubers, 
and all other food. Average per capita food consumption data are from 
the United Nations' Food and Agriculture Organization (FAO) Food 
Balance Sheets and FAO's Global Information Early Warning System's 
(GIEWS) Country Cereal Balance Sheet. Observed domestic prices are from 
FAO-GIEWS Food Price Monitoring and Analysis Tool. Tariff data are from 
the World Bank's World Integrated Trade Solution (WITS). Incomes, 
exchange rates, and Consumer Price Indexes (CPI) are from the ERS 
International Macroeconomic Dataset. World prices are from USDA's 
Agricultural Projections to 2030.

          ERS is a primary source of economic research and analysis 
        from the U.S. Department of Agriculture, providing timely 
        information on economic and policy issues related to 
        agriculture, food, the environment, and rural America.
Introduction
    The U.S. Department of Agriculture's Economic Research Service's 
(ERS) International Food Security Assessment (IFSA) analysis \1\ 
estimates per capita food demand and compares the estimations against a 
global nutritional target of 2,100 kilocalories \2\ (kcal) per person 
per day. The nutritional target, set by the United Nations,\3\ is an 
average Calorie level necessary to sustain a healthy and active 
lifestyle. The aim of the IFSA is to help USDA and its stakeholders 
estimate long-term projections of food insecurity in 76 low- and 
middle-income countries using income projections from ERS's 
International Macroeconomic Data Set, international and domestic food 
prices over the medium term,\4\ and international food insecurity 
projections through 2031.
---------------------------------------------------------------------------
    \1\ The results from the IFSA model are not directly comparable 
with other analyses such as FAO's modeling work for its report on the 
State of Food Insecurity (SOFI), which has a broader country coverage 
and different methodology. Because the IFSA also uses aggregate data, 
IFSA cannot be compared directly with evaluations using household-level 
surveys. It is also difficult to extrapolate our results to Food 
Security Information Network's (FSIN) report on global crises, which 
uses the five-phase food insecurity measure--a consensus approach 
across international organizations and development practitioners 
directly responding to major crises. For a more in-depth discussion and 
comparison of USDA's IFSA model with other modeling approaches, see 
Tandon, et al. (2017).
    \2\ A kilocalorie is the same as one Calorie. A kilocalorie is the 
amount of heat required to raise the temperature of one kilogram of 
water 1 Celsius.
    \3\ The 2,100 Kcal per capita per day threshold was an 
internationally agreed upon level set by United Nations as the 
recommended level of dietary energy intake for a healthy, well-
nourished individual (FAO, 2004).
    \4\ Medium-term price projections are taken from USDA Agricultural 
Projections to 2030, long-term projections report OCE-2021-1. These 
projections are then used to project medium-term domestic price trends, 
using data from the Global Information and Early Warning System (GIEWS) 
of the United Nations Food and Agriculture Organization.
---------------------------------------------------------------------------
    The current report incorporates current assumptions for key 
macroeconomic variables (e.g., income growth, inflation, and exchange 
rates) and population, reflecting the economic consequences of the 
global COVID-19 pandemic. The economies of the countries included in 
the assessment sharply contracted in 2020 due to the widespread 
pandemic, resulting lockdowns, and other control measures impacting 
business activity,\5\ employment, and incomes. Although growth is 
projected to return to positive rates in 2021, real Gross Domestic 
Product (GDP) levels are anticipated to remain below levels seen before 
the global pandemic in 2021 and in years to follow.\6\ The medium- to 
long-term path to economic recovery cannot be known with certainty, and 
the pace of economic recovery will vary across countries. Therefore, 
the report's results assume that the macro-economic trends--determined 
using the 2018-2020 period as a baseline--will not significantly vary 
from the anticipated trend over the 10 year projection period. In 
addition, this report's projections do not consider the impacts of 
possible unknown events in the future. These events could include: 
catastrophic weather, armed conflict, political and economic 
instability, as well as the potential for protracted effects from the 
COVID-19 pandemic.
---------------------------------------------------------------------------
    \5\ Some of the control measures that impacted business included, 
but not limited to, curfews, closures of large venues, restrictions on 
operations of hotels and restaurants, closures of borders.
    \6\ See the macroeconomics assumptions box at the end of this 
section for more details.
---------------------------------------------------------------------------
    Reflecting the continued effects of the COVID-19 pandemic on 
economic growth, food insecurity in 2021 is anticipated to further 
decline from last year for the population in the 76 countries included 
in the IFSA. However, over the next decade, the food security status is 
projected to improve for most countries covered by the assessment. 
Principal findings for the countries covered by this report are:

   GDP per capita growth is anticipated to rebound in 2021. 
        However, income is projected to remain mostly below levels 
        achieved during the pre-pandemic period of 2017-2019. Moreover 
        in 2021, GDP per capita is projected to be lower than in 2020 
        in 23 countries covered by the assessment--including India and 
        Indonesia--which account for 40.8 percent of the population 
        covered in the assessment. The projection for lower GDP per 
        capita levels is the main underlying factor for the continued 
        decline in food security in 2021.

   For the 76 countries included in IFSA, the prevalence of 
        food insecurity in 2021 is estimated at 30.8 percent--or 6.8 
        percentage points higher than the estimate for 2020. The 
        prevalence of food insecurity is estimated to be higher in 2021 
        than in 2020 in 56 of the 76 countries.

   The high prevalence of food insecurity in 2021 translates to 
        more than 1.2 billion people potentially not having consistent 
        access to the daily caloric target of 2,100 kcal.\7\ The number 
        of food-insecure people in 2021 is estimated to be almost 291 
        million higher\8\ than the 2020 \9\ estimate, an increase of 
        32.0 percent (figure 1).
---------------------------------------------------------------------------
    \7\ The caloric target considered in the assessment is an average 
across men and women, age groups, regions, and activity levels.
    \8\ The United Nations Office for the Coordination of Humanitarian 
Affairs (2021), estimates a similar trend to the assessment and 
anticipate that acute food insecurity in 2021 will increase by 235 
million people. For more details see: United Nations Office for the 
Coordination of Humanitarian Affairs (OCHA), 2021. Global Humanitarian 
Overview 2021. Geneva, Switzerland.
    \9\ For more on the ERS results of the impact of COVID-19 on food 
insecurity in 2020 see: Baquedano, F., Zereyesus, Y.A., Christensen, 
C., and Valdes, C., 2021. COVID-19 Working Paper: International Food 
Security Assessment, 2020-2030: COVID-19 Update and Impacts on Food 
Insecurity. COVID-19 Working Paper #AP-087, January 2021. U.S. 
Department of Agriculture, Economic Research Service.

   Central and South Asia sub-region (186.8 million people)--
        and in particular India--and Sub-Saharan Africa (60 million 
        people) are estimated to account for almost 85 percent of the 
        additional 291 million people estimated to be food-insecure in 
        2021.
Figure 1
In 2021, as the impacts of the COVID-19 pandemic on income levels 
        linger, the number of food-insecure people increases for some 
        countries
Change in number of food-insecure population


          Notes: COVID-19 = Coronavirus disease of 2019; IFSA = 
        International Food Security Assessment.
          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

   By 2031, the share of the population that is food-insecure 
        in the 76 countries studied is projected to fall to 14.1 
        percent, a 54.4 percent drop from its 2021 estimate. The number 
        of people considered food-insecure is projected to decline by 
        47.4 percent from 2021 to 637.7 million people.

   The food gap-defined as the amount of food needed for all 
        food-insecure to reach the caloric target of 2,100 kcal/day--
        indicates the intensity of food insecurity. The gap can be 
        expressed in calories per capita per day or in grain-equivalent 
        quantities. In addition, the food gap is used to measure the 
        annual national food shortfall. For the 76 countries examined--
        on average--the daily caloric food gap is projected to decline 
        by 19 percent, from 380 kcal (18.1 percent of the caloric 
        target) in 2021 to 308 kcal (14.7 percent of the caloric 
        target) in 2031.
Country coverage and observed food security trends
    The 76 countries in this study are sub-divided across 4 major 
regions: 39 countries and 4 sub-regions in Sub-Saharan Africa (SSA), 22 
countries and 4 sub-regions in Asia, 11 countries and 2 sub-regions in 
Latin America and the Caribbean (LAC), and 4 countries in North Africa 
(NAF). Estimated levels of food insecurity for 2021 vary greatly across 
these regions. Asia (647 million people) and SSA (491 million people) 
account for 94 percent of the total number of food-insecure people in 
2021 (figure 2). However, in 2021, SSA has the highest share of the 
population that is food-insecure of any region at 44.9 percent (figure 
3a). By contrast, 26.2 percent of the population in Asia is considered 
food-insecure in 2021--with the prevalence of food insecurity being the 
highest in Mongolia, North Korea, and Yemen--averaging 72 percent 
across the 3 countries. The LAC region (with 44.7 million people) and 
NAF region (with 28.6 million people) account for the remaining 6 
percent of food-insecure people identified in the 2021 assessment 
(figures 2 and 3b). The prevalence of food insecurity in the LAC region 
averaged almost 26 percent in 2021--whereas in the NAF region, the same 
metric averaged 14.5 percent--making the latter region the most food-
secure in the study sample (figure 3a).
Figure 2
Asia accounts for 63.0 percent of the population of the 76 countries 
        studied and 53.0 percent of the food-insecure people in 2021

 
 
 
          Total population                 Food-insecure population
 

                                     
                                     
          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

    Despite the projected lower income levels in 2021 (resulting from 
the COVID-19 pandemic), food security is projected to improve across 
all 76 countries over the next 10 years as GDP growth continues to 
recover. The share of the population that is food-insecure is projected 
to fall to 14.0 percent (637.7 million people) by 2031, a 54.6 percent 
drop from the 2021 share of the food-insecure population (figures 3a 
and 3b). By 2031, food security in Asia is projected to improve the 
most of all regions. The prevalence of food insecurity (6.4 percent of 
the population) and the number of food-insecure people (175.7 million) 
are projected to decline by 72.9 percent and 75.4 percent, 
respectively, over 10 years. This projected improvement mainly reflects 
an estimated strong economic recovery from the COVID-19-induced 
recessions after 2021 for most of the region, particularly in India. By 
contrast, over the next decade, SSA is anticipated to make the least 
progress at improving its food security metrics. While robust economic 
growth is projected after 2021 for SSA, population growth \10\ is 
anticipated to outpace income growth over the coming 10 year period. 
The higher growth in population over income will likely result in lower 
real purchasing power of the average person in SSA. As a result, the 
decline in the prevalence of food insecurity in SSA is projected to be 
moderate. By 2031, in SSA the prevalence of food insecurity is 
projected to be 29.7 percent--\1/3\ lower than in 2021 (figure 3a). 
Despite the moderate decline in the prevalence of food insecurity by 
2031, SSA is projected to reduce the number of food-insecure people by 
71 million from 2021 (figure 3a). In LAC, the prevalence of food 
insecurity is projected to decline by more than half to 12.3 percent, 
and the number of food-insecure people will decline by almost half to 
23.5 million by 2031. In NAF, food security is projected to improve 
over the next 10 years, with the prevalence of food insecurity falling 
below 8.0 percent and the number of food-insecure people falling to 
less than 18 million in 2031 (figures 3a and 3b).
---------------------------------------------------------------------------
    \10\ Population growth projections for Sub-Saharan Africa, and all 
regions in the assessment, are obtained from the International Data 
Base (IDB) of the U.S. Department of Commerce, Bureau of the Census.
---------------------------------------------------------------------------
Figure 3a
By 2031, the percent of people food-insecure is projected to decrease 
        the most in the Asia region [1]
---------------------------------------------------------------------------
    \[1]\ Regions only include countries that are a focus of the 
International Food Security Assessment.
---------------------------------------------------------------------------
Percent food-insecure


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.
Figure 3b
The number of food-insecure people by 2031 is projected to sharply 
        decline for most IFSA regions,[1] as Asia is 
        projected to make the most progress
Number of food-insecure people, millions


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.
Figure 3c
Food gap projected to decline by 2031 in IFSA regions[2]
---------------------------------------------------------------------------
    \[2]\ Regions only include countries that are a focus of the 
International Food Security Assessment. A kilocalorie is the same as 
one Calorie (uppercase C). A kilocalorie is the amount of heat required 
to raise the temperature of one kilogram of water 1 Celsius.
---------------------------------------------------------------------------
AfricaPer capita Kcal/day


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.
Gross Domestic Product and international food price trends
    The macroeconomic assumptions underlying the 2021-2031 IFSA reflect 
the economic impact from the global spread of the COVID-19 pandemic, 
that began during the last quarter of 2019. Nearly all 76 IFSA 
countries were affected by decreased economic growth in 2020. Although, 
growth is projected to return to positive rates in 2021 for most IFSA 
countries, real per capita Gross Domestic Product (GDP) is expected to 
remain below levels seen before the global pandemic in 2021 and in 
years to follow. GDP per capita in 2021 is estimated to sharply 
increase \11\ from 2020 in Asia and estimated to moderately improve in 
LAC (table 1). By contrast, in NAF, GDP per capita is estimated to 
decline from 2020. GDP is projected to remain relatively unchanged in 
SSA for 2021. For all regions, however, GDP per capita in 2021 remains 
below its pre-pandemic level of 2019 (table 1). Between 2021 and 2031, 
strong to moderate annual growth in GDP per capita is projected for 
Asia and LAC. Conversely, between 2021 and 2031, NAF and SSA are 
anticipated to have moderate income growth. By 2031, SSA is projected 
to lag the other IFSA regions in terms of GDP per capita, as GDP growth 
is outpaced by population growth.
---------------------------------------------------------------------------
    \11\ Macroeconomic projections come from the USDA, ERS 
International Macroeconomic Data Set, which uses data from the World 
Bank Development Indicators, International Monetary Fund's 
International Financial Statistics, IHS Global Insight, and Oxford 
Economic Forecasting, as well as estimated and projected values 
developed by USDA, ERS. Appendix III provides the country, subregional, 
and regional macroeconomic projections that are used to model food 
insecurity in this year's assessment.

                                                     Table 1
            Inflation-adjusted per capita Gross Domestic Product (GDP) in IFSA regions, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
                                                                                                    Per capita
                                    2019 (pre-                                     Change 2021/    GDP:  Annual
                                     COVID-19)         2021            2031            2020         growth rate
                                                                                                     (2021-31)
----------------------------------------------------------------------------------------------------------------
                                                   U.S. Dollars
                                              Percent
----------------------------------------------------------------------------------------------------------------
                         Asia             2,279           2,221           3,400             3.7             4.3
                             Latin America5,395Caribbean  4,936           6,222             1.8             2.3
                 North Africa             3,864           3,537           4,240            ^4.6             1.8
           Sub-Saharan Africa             1,378           1,311           1,505             0.7             1.4
----------------------------------------------------------------------------------------------------------------
Notes: Value in 2015 U.S. dollars to adjust for inflation. Regions only include countries that are a focus of
  the International Food Security Assessment.
Source: USDA, Economic Research Service based on results from the USDA, ERS International Macroeconomic Data
  Set.

    International food commodity prices are expected to remain 
relatively stable in inflation-adjusted terms over the coming 
decade\12\ (figure 4). The price for sorghum is the only commodity 
price projected to decline over the coming 10 year period. In contrast, 
the projected prices for rice from 2021 to 2026 are anticipated to 
increase before stabilizing towards the end of the 10 year period. The 
relative price stability mainly reflects ample food supplies in world 
markets that will outweigh global demand (USDA, OCE, 2021). In some 
markets, world and domestic food prices are integrated through trade. 
In other cases, barriers to trade can cause domestic prices to move 
independently of world prices. Twenty-six of the 76 countries\13\ 
covered in IFSA are projected to have rising real domestic prices of 
their major grain between 2021 and 2031. Fifteen of these countries are 
in SSA.
---------------------------------------------------------------------------
    \12\ Price projections come from USDA's long-term agricultural 
projections to 2030, (USDA, OCE, 2021) and are converted to prices in 
2015 to adjust for inflation.
    \13\ The full set of projections at the country, subregional, and 
regional level of anticipated price changes of their major grain are 
presented in Appendix III.
---------------------------------------------------------------------------
Figure 4
Inflation-adjusted international prices of major grains, 2021-31
2015 U.S. dollars/ton


          Note: Value in 2015 U.S. dollars to adjust for inflation.
          Source: USDA Agricultural Projections to 2030, Long-term 
        Projections report OCE-2021-1.
Grain demand, production trends, and the Implied Additional Supply 
        Required (IASR)
    In 2021, total grain demand for IFSA countries is estimated at 1 
billion tons. The demand for grains is projected to grow to 1.3 billion 
tons by 2031 (table 2). Food demand is the largest component of total 
grain demand. Asia accounts for most of the food demand in 2021, as 
Asia has the largest share of the population of the 4 major regions 
defined in IFSA. From 2021 to 2031, grain demand is projected to 
increase by 2.7 percent per year across all 76 countries. Demand for 
grains is expected to increase the most in SSA (3.5 percent per year) 
and Asia (2.5 percent per year). Food demand is also projected to grow 
faster than grain demand for other uses (including feed) over the 10 
year period. Across the 76 countries in the study, food demand is 
projected to grow at an annual rate of 2.8 percent over the coming 
decade. Grain demand for other uses is projected to grow at a pace of 
2.5 percent per year from 2021 to 2031. But at the regional level, the 
SSA region's demand for food (3.8 percent per year) is projected to 
grow faster than demand for other grains (3.2 percent per year). 
However, in LAC and NAF, demand for grains for other uses are projected 
to grow faster on an annual basis than food demand between 2021 and 
2031. In Asia, demand for food and grains for other uses is projected 
to grow evenly year-to-year over the next decade.
    From 2021 to 2031, grain production is expected to increase by 2.5 
percent per year (table 2). This projected increase is slightly below 
the growth rate for total grain demand and the demand for food grains. 
The annual rate of growth for grain demand for other uses is on par 
with the growth in production. Over the decade, the LAC region is 
projected to see the highest annual growth-rate of grain production 
relative to all other IFSA regions. Moreover, the annual rate of growth 
of grain production in LAC is projected to surpass both the rate of 
annual growth for food grains and grains for other uses. By contrast 
Asia is projected to see the lowest rate of growth in grain production 
(2 percent a year) of any region. Asia's anticipated annual grain-
production growth will fall below the growth of demand for grains for 
food and other uses (table 2). The NAF region's grain production is 
projected to grow 2.5 percent year, a rate that is almost 10 percent 
higher than the rate of growth for total grain demand and grain demand 
for other uses. The SSA region is projected to see grain production 
grow 3.6 percent a year from 2021 to 2031, mostly on par with the 
growth-rate of demand for grains for food and other uses.
    Despite the projected robust growth in production--in absolute 
terms--the gap between domestic grain production and demand for grain 
is anticipated to widen for the 76 countries in the assessment over the 
coming decade (table 2). The Implied Additional Supply Required 
(IASR)--which provides an estimate of the gap between demand and supply 
for grains--is projected to increase by 3.3 percent per year between 
2021 and 2031. Through the upcoming decade, IASR will annually grow the 
fastest in the Asia (4.9 percent) and Sub-Saharan Africa (3.4 percent) 
regions. By 2031, these same two regions are also projected to have the 
highest IASR of any other regions included in IFSA.

                                                                                             Table 2
                     Demand for grains is projected to outpace grain production over the 2021-2031 period, driven mainly by demand from Asia and Sub-Saharan Africa regions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Region                                   Food demand
                                       Other demand *
                                     Total grain demand
                                      Grain production
                                  Implied additional supply
                                         required **
                             -------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                    2021             2031             2021             2031            2021            2031            2021            2031            2021            2031
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       millions of tons
                             -------------------------------------------------------------------------------------------------------------------------------------------------------------------
     Total IFSA Countries             695              911              332              424           1,027           1,336             770             982             257             354
                     Asia             481              618              163              209             644             827             547             669              98             158
                         Latin America 24d the          29               22               29              46              58              20              29              26              29
                 Caribbean
             North Africa              48               60               44               55              92             115              36              46              56              69
       Sub-Saharan Africa             141              204               97              133             239             337             167             238              71              99
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and domestic grain production.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

  How food security is assessed: Method and definitions (for more 
        detailed information on the model, see Appendix I)
          Food demand is projected for 76 low- and middle-income 
        countries--39 in Sub-Saharan Africa, 4 in North Africa, 11 in 
        Latin America and the Caribbean, and 22 in Asia. Food is 
        divided into four groups: (1) the major grain consumed in the 
        country, (2) other grains, (3) root crops, and (4) all other 
        food. The IFSA model's projections of food demand are expressed 
        in grain equivalent, based on the caloric content of food items 
        to allow for aggregation across food groups; this grain 
        equivalent may be expressed in either kilograms or 
        kilocalories. For example, grains have roughly 3.5 Kcal per 
        gram, and tubers have about 1 calorie per gram. One ton of 
        tubers is therefore equivalent to 0.29 tons of grain.
          The IFSA model analyzes the gap between projected food 
        demand, which is a function of per capita income and food 
        prices, and a nutritional target of 2,100 Kcal per capita per 
        day. This report uses three indicators of food insecurity. The 
        food gap measures the food needed to raise consumption at every 
        income level to the nutritional target. In many countries, per 
        capita consumption in the lower income deciles is significantly 
        less than per capita consumption for the country. In these 
        countries, the distribution gap provides a measure of the 
        intensity of hunger--the extent to which the food security of 
        already hungry people deteriorates as a result of income 
        declines or other negative economic conditions. This measure 
        can be expressed on a per capita basis (in Kcal per day), or as 
        an aggregate measure (the total tons of food needed to fill the 
        gap in each country).
          The second indicator is the share of the population that is 
        food-insecure. Food demand is assumed to be met and equal to 
        consumption. We no longer assess consumption by income decile, 
        but instead in a continuous manner across all income levels.
          Finally, the number of food-insecure people--those who cannot 
        meet the nutritional target--is based on total population and 
        the population share that consumes less than the nutritional 
        target. Terms commonly used in this report include:
          Food consumption--equal to food demand if we assume that the 
        demand is met.
          Food access--depends on a consumer's purchasing power. Food 
        access is estimated based on income level and food prices 
        within each country according to an income-consumption 
        relationship.
          Food insecurity--occurs when estimated per capita food 
        consumption for a consumer at a certain income level falls 
        short of the nutritional target of 2,100 Kcal per person per 
        day.
  In 2021 the continued impacts on income from the COVID-19 pandemic 
        are anticipated to increase food insecurity at a higher rate in 
        low-income countries
          The Prevalence of Food Insecurity (PFI) for 2021 across the 
        76 countries included in the assessment is estimated at 30.8 
        percent, 6.8 percentage points higher than the 2020 estimate. 
        The distributions of the PFI relative to GDP per capita for the 
        2021 and 2020 estimates is shown in the graph below. The 2021 
        and 2020 trend lines are indicated by the solid and broken 
        lines, respectively. Two points are clear, based on the 
        information contained in the graph. First, the PFI has on 
        average increased in 2021 for all income levels relative to 
        2020. Second, the combined effect of the per capita income and 
        price shocks due to the pandemic is not uniform across the 
        countries in the assessment. More specifically, the increase in 
        food insecurity is more prevalent in low-income countries 
        compared to high-income countries. The trends for 2020 and 2021 
        reveal that the gap between the two trendlines for high-income 
        countries is significantly smaller, relative to low-income 
        countries.
Percent food-insecure
Per capita Gross Domestic Product (2015 Dollars)


          Note: A linear-logarithmic (Log.) regression curve is fitted 
        to show the relationship between the estimated GDP per capita 
        and prevalence of food insecurity.
          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.
  Macroeconomic assumptions for the International Food Security 
        Assessment, 2021-2031
          The macroeconomic assumptions underlying the 2021-2031 
        International Food Security Assessment (IFSA) reflect the 
        economic consequences from the global spread of the COVID-19 
        pandemic, that began in 2019. Nearly all 76 IFSA countries were 
        affected by decreased economic growth in 2020. Although, growth 
        is projected to return to positive rates in 2021, real gross 
        domestic product (GDP) is expected to remain below levels seen 
        before the global pandemic in 2021 and in years to follow.
          The macroeconomic assumptions are taken from multiple 
        forecast services, U.S. Government projections, international 
        agency projections, and ERS regional and country experts. The 
        projections assume no policy changes and no additional shocks 
        (e.g., political crises, conflicts, disease outbreaks, weather 
        events). The macroeconomic projections were completed in August 
        2020 and were based on expectations at that time.
          Worsening fiscal and external accounts brought on by the 
        pandemic have impacted government and private consumption, 
        resulting in weaker economic growth. Pandemic-related 
        restrictions have exacerbated unemployment, food supply 
        shortages, and increased inflation. Most countries are showing 
        real depreciation against the U.S. dollar (in the near term) 
        but weak agricultural sectors, market, and port lockdowns 
        restrict exports in the longer term. In addition, the collapse 
        in global oil demand has reduced oil production and revenue for 
        oil-dependent IFSA countries. Continued uncertainty in a few 
        IFSA countries in 2021 could generate future economic 
        recessions.
          The economic projections suggest the recovery will be gradual 
        and uneven, with economic growth across all 76 countries 
        projected at 2.3 percent over the 2021-31 period. On a regional 
        basis, Asian countries are projected to average 3 percent per 
        capita income growth annually during the 2021-31 period, 
        followed by Latin American and Caribbean (LAC) countries at 2.3 
        percent. In North Africa, per capita income is projected to 
        grow at an average rate of 2.2 percent, whereas in Sub-Saharan 
        Africa per capita income growth is projected to average 1.7 
        percent per year. Despite the slower economic growth, the share 
        of global real GDP by IFSA countries is projected to increase 
        from 12 percent to 14 percent between 2021 and 2031.
          Asia is projected to have the most rapid long-term growth 
        than any other IFSA region. Based on continued investment in 
        infrastructure, India is expected to recover after 2021. 
        Economic recovery in Georgia is less encouraging due to the 
        weakened outlook for export demand, whereas in Kyrgyzstan's and 
        Turkmenistan' loss of labor remittance inflows impacts GDP 
        growth.
          In contrast, in LAC, North Africa, and Sub-Saharan Africa 
        growth rates are projected to remain below what is needed to 
        restore 2020 pandemic losses. In Sub-Saharan Africa, lower 
        external donor support and internal trade are factors behind 
        the GDP contraction and Congo and Sudan (oil-dependent 
        economies) are adversely impacted by decreasing global oil 
        prices. Landlocked Mali's economy is severely hit by being 
        denied access to ports in neighboring countries.
          The LAC region was severely affected by the COVID-19 
        pandemic, on account of strict lockdowns and limited government 
        support to counter reduced incomes. Both Bolivia and Colombia 
        face a challenging recovery, given the slowdown in the 
        hydrocarbons sector. Slow recovery reflects the halt in tourism 
        in Jamaica. In El Salvador, Guatemala, Honduras, and Nicaragua 
        the drop in family remittances reduced private-sector domestic 
        consumption. Within the LAC region, the major exception is Peru 
        where projections indicate a modestly fast recovery in the near 
        term based on export revenues.
Regional Overview
    The food security indicators and model projections presented here 
(for 2021 to 2031) are based on historical macroeconomic data and 
projections from the ERS International Macroeconomic data set. The 
macroeconomic assumptions underlying the 2021-2031 IFSA reflect the 
economic consequences of the COVID-19 pandemic throughout the world. 
All 76 countries were affected by significantly lower economic growth 
in 2020, but growth is projected to return to positive rates in 2021. 
However, real GDP growth is expected to remain below pre-pandemic 
levels in nearly all countries covered by the assessment in 2021 and in 
years to follow. The production and consumption data are from January 
2021. This means events since January 2021--including droughts, 
flooding, and any shocks to supply or demand--are not reflected in 
these data or the following analysis.
    Changes in food security vary across regions. In Sub-Saharan Africa 
(SSA), food security is projected to slowly improve due to rapid 
population growth and relatively low per capita income growth. 
Nonetheless by 2031, SSA is anticipated to remain the most food-
insecure region in the assessment, as SSA is projected to have the 
highest prevalence of food insecurity of any region. Reflecting the 
impact of the COVID-19 pandemic on the economies of Asia, the region is 
estimated to have the highest number of food-insecure people in IFSA 
for 2021. However, the estimated prevalence of food insecurity in Asia 
is only slightly more than half the same metric for SSA. By 2031, the 
22 countries in Central Asia, East Asia, Other Asia and Southeast Asia 
included in this assessment--collectively referred to in this report as 
Asia--are projected to experience the fastest food security 
improvement, as the region's largest economies continue to benefit from 
rapid income growth. The 4 North African countries assessed are also 
projected to experience improvements in food security, though levels of 
food insecurity there are relatively low to begin with. In the 11 
countries in the Latin America and the Caribbean (LAC) region--8 in 
Central America and the Caribbean and 3 in South America--the share of 
population experiencing food insecurity is projected to fall by more 
than half by 2031.
Sub-Saharan Africa
    The population of Sub-Saharan Africa (SSA) in 2021--currently 
estimated at one billion--is projected to reach 1.4 billion by 2031. 
The anticipated increase in the region's population (2.6 percent a 
year) over the next decade makes it the fastest growing region in the 
assessment. Countries in SSA continue to face significant food security 
challenges. Since the outbreak of the COVID-19 pandemic--conflict, 
reduced agricultural output (due to weather events and pest 
infestations) and lower per-capita income--continue to generate high 
levels of severe food insecurity in SSA (Food and Agriculture 
Organization of the United Nations (FAO), 2020).
    The COVID-19 pandemic has further aggravated food insecurity in the 
SSA region by limiting income generating activities and restricting 
access to agricultural inputs. In 2021, GDP in the SSA region is 
estimated to grow 3.4 percent to $1.4 trillion USD, a 0.4 percent 
increase from its 2019 level (table 3). The anticipated slow economic 
recovery of the SSA region has a significant effect on the estimates of 
its food security metrics. For 2021, SSA is estimated to have the 
highest share (44.9 percent) of its population considered food-insecure 
among the 4 regions covered by the assessment (table 4). The SSA region 
has the second highest number of food-insecure people (491.5 million). 
The 2021 estimate of the number food-insecure people is 62 million 
higher than the 2020 estimate, highlighting the lingering effects of 
the COVID-19 pandemic on local economies (figure 5). However, the 
change in the number of food-insecure people in 2021, relative to 2020, 
varies across countries in SSA. Compared to the 2020 assessment, 
several countries are estimated to see an increase in the number of 
food-insecure people. For example, in Uganda, the Democratic Republic 
of the Congo, and Kenya, the number of food-insecure people is 
estimated to increase by more than 10 million in 2021 in each country 
compared to 2020. By contrast, countries--such as the Sudan, Nigeria, 
Angola, and Burundi--will experience a moderate reduction in their 
estimated food-insecure people in 2021, relative to 2020.

                                                     Table 3
                Inflation adjusted per capita income for Sub-Saharan Africa region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Region/subregion                                2019 (pre-COVID-19)           2021                  2031
                                              ------------------------------------------------------------------
                                                                      Dollars (2015 U.S.)
----------------------------------------------------------------------------------------------------------------
                     Sub-Saharan Africa                   1,378                  1,311                 1,505
  Central Africa.............................               666                    630                   710
  East Africa................................             1,042                  1,025                 1,267
  Southern Africa............................             1,462                  1,367                 1,479
  West Africa................................             1,905                  1,794                 2,024
----------------------------------------------------------------------------------------------------------------
Source: USDA, Economic Research Service International Macroeconomic Dataset.

Figure 5
Sub-Saharan Africa: Change in the number of food-insecure people in 
        2021, from 2020
Change in the number of food-insecure population


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

    Despite the economic contraction from the COVID-19 pandemic, GDP 
per capita over the next decade is projected to annually grow by 1.4 
percent in the SSA region (an improvement from ^1.1 percent during the 
2015-2020 period from $1,311 in 2021 to $1,505 in 2031 (table 3). By 
2031, West Africa is projected to have the highest GDP per capita in 
SSA at $2,024, surpassing the SSA regional average. However, despite 
the anticipated growth in SSA's GDP per capita over the next decade 
(both in absolute and relative terms), the region will still have the 
lowest estimated income of the four regions included in IFSA. Moreover, 
SSA is projected to have the highest population growth of any region, 
countering the impact of income gains on food security. As a result, by 
2031, the SSA region is expected to make the least progress in its food 
insecurity metrics (table 4). From 2021 to 2031, the share of food-
insecure people is projected to decline from 44.9 percent to 29.7 
percent (or by 420.8 million people). Driven by trends in Nigeria, the 
West African sub-region is projected to make the most gains in its food 
security metrics by 2031. However, the Central Africa sub-region is 
projected to make the least progress. Over the next decade, the share 
of the population that is food-insecure is projected to decline in 
Central Africa. However, because of an anticipated high population 
growth, there will be more food-insecure people in Central Africa in 
2031 than in 2021 (table 4). Over the next decade, the daily caloric 
food gap--the difference between estimated consumption and the daily 
consumption target--is projected to decline by 17.8 percent from 444 
kcal in 2021 to 365 kcal in 2031.

                                                     Table 4
                         Food security indicators for Sub-Saharan Africa, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                 141                 97                239                167                 71
          2031                 204                133                337                238                 99
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Sub-Saharan Africa indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
               Sub-Saharan Africa        1,094.7         1,415.6          491.5           420.8            44.9            29.7             444             365          31,158         25,653
  Central Africa...................        145.1           194.5           99.9           114.2            68.8            58.7             538             437           9,633         10,084
  East Africa......................        382.4           489.7          177.2           134.9            46.3            27.6             487             407           9,493          6,988
  Southern Africa..................        152.6           199.1           89.7            88.2            58.8            44.3             471             391           6,006          5,163
  West Africa......................        414.7           532.3          124.7            83.5            30.1            15.7             379             306           6,025          3,417
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    Grain demand in SSA for both food and other uses (including feed) 
is projected to increase by 45.0 percent in the next decade, from 141.2 
million tons to 204.1 million tons, which is the highest of the four 
regions (table 4). This increase in demand is driven mainly by the 
anticipated growth in population and improved per capita income (tables 
3 and 4). From 2021 to 2031, grain demand is projected to increase 41.0 
percent and reach 337 million tons. Demand for food grain is projected 
to grow at a higher rate (3.8 percent a year) relative to the demand 
for grain for other uses (3.2 percent a year). Moreover, the share of 
food demand (60.0 percent) of total grain demand is anticipated to 
remain relatively unchanged over the 10 year period. From 2021 to 2031, 
grain production is projected to grow (3.6 percent a year), on par with 
total grain demand (3.5 percent a year). However, driven by population 
growth, in absolute terms total grain demand will outpace production by 
99.4 million tons by 2031, a projected increase of 39.0 percent in the 
gap between production and demand from 2021.

 
 
 
                               References
 
    United Nations, Food and Agriculture Organization. 2020. Crop
 Prospects and Food Situation #4, December 2020, Rome, Italy.
    Tandon, S., M. Landes, C. Christensen, S. Legrand, N. Broussard, K.
 Farrin, and K. Thome. 2017. Progress and Challenges in Global Food
 Security. U.S. Department of Agriculture, Economic Research Service.
 Economic Information Bulletin No. (EIB-175) 90 pp.
    United Nations' Food and Agriculture Organization. 2004. United
 Nations Office for the Coordination of Humanitarian Affairs (2021).
    Baquedano, F., Zereyesus, Y.A., Christensen, C., and Valdes, C.
 2021. COVID-19 Working Paper: International Food Security Assessment,
 2020-2030: COVID-19 Update and Impacts on Food Insecurity. COVID-19
 Working Paper #AP-087, U.S. Department of Agriculture, Economic
 Research Service.
 

Central Africa (CAF)
    In 2021, the Central Africa (CAF) sub-region is estimated to have 
the highest prevalence of food insecurity in Sub-Sahara Africa region 
(SSA). Ninety-nine million people (i.e., 69.0 percent of the 
population) in CAF are estimated to be food-insecure in 2021 (table 5). 
These substantial levels of food insecurity for 2021 in CAF are 
underpinned by continued armed conflicts, the COVID-19 pandemic, and 
incomes that are still below their pre-pandemic levels. The Democratic 
Republic of the Congo (DRC) accounts for 86.4 percent of the food-
insecure population in the CAF sub-region. However, Cameroon is 
estimated to have the lowest prevalence of food insecurity of any 
country in the CAF sub-region at 21.1 percent of the population. The 
estimated number of food-insecure people in CAF for 2021 is 11.8 
million higher than last year's calculation. The 2021 increase in food 
insecurity in the sub-region is largely driven by the anticipated rise 
in the number food-insecure people in the DRC. In 2021, GDP per capita 
in the sub-region is estimated to remain stagnant (^0.1 percent growth) 
and 3.4 percent lower than the average for the 2018-2020 period. The 
CAF sub-region is also estimated to have the lowest GDP per capita of 
the 4 regions in the assessment, $630 annually, compared to the SSA 
average of $1,311 (table 3).

                                                     Table 5
                 Food security indicators for Central Africa (Sub-Saharan Africa), 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                 7.8                7.7               15.5                7.0                8.5
          2031                11.3                9.3               20.6                8.5               12.1
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Central Africa indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                   Central Africa         145.1           194.5            99.9           114.2            68.8            58.7             538             437          9,633         10,084
  Cameroon.........................        28.5            37.2             6.0             4.3            21.1            11.7             303             264            238            150
  Central African Republic.........         6.1             7.5             4.5             2.3            73.9            31.2             555             351            283             92
  Congo............................         5.4             6.8             3.1             2.7            56.7            39.6             402             337            162            120
  Congo, DR........................       105.1           143.0            86.3           104.8            82.1            73.3             892             798          8,949          9,722
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    By 2031, GDP per capita is anticipated to grow 1.2 percent a year, 
reversing the negative trend during the 2015-2020 period, possibly 
reaching $710 in the CAF sub-region (table 3). However, at the 
projected level, CAF will continue to have the lowest GDP per capita of 
any sub-region in IFSA. As a result of the projected slow growth in GDP 
per capita, the CAF sub-region is projected to see small improvements 
in its food security metrics by 2031. By 2031, the prevalence of food 
insecurity is anticipated to decline by 14.7 percent to 58.7 percent of 
the population, the highest of any sub-region (table 5). Excluding the 
DRC--the most food-insecure and largest country in CAF--the prevalence 
of food insecurity by 2031 is projected to decline by 46.4 percent to 
18.2 percent of the population of the sub-region. The Central African 
Republic (CAR) is expected to reduce the prevalence of food insecurity 
the most, declining by 58.0 percent over the decade. But Cameroon is 
projected to have the lowest share (11.7 percent) of its population 
experiencing food insecurity by 2031.
    By 2031, the number of food-insecure people in the sub-region is 
projected to be 114 million, about 14.3 million higher than in 2021. 
The anticipated increase in the number of food-insecure people in CAF 
is mainly driven by trends in DRC, where population growth is projected 
to outpace GDP per capita growth. Excluding DRC, CAF is expected to see 
a decline in the number of food-insecure people by 45.1 percent to 9.4 
million by 2031. Over the next decade, the daily caloric food gap--the 
difference between observed consumption and the daily consumption 
target--is projected to decline by 18.6 percent from 538 kcal in 2021 
to 437 kcal in 2031. However, there is significant variation in the 
sub-regional projections. By 2031, DRC is anticipated to see a 10 
percent decline in the daily caloric food gap. By contrast, CAR is 
projected to see a 36.8 percent decline in its daily food Calorie gap, 
the highest in the sub-region by 2031.
    Total grain demand in Central Africa--mainly driven by population 
growth--is projected to increase by 45.0 percent in the next 10 years, 
from 7.8 million tons in 2021 to 11.3 million tons in 2031. During the 
same period, the demand for feed and other uses will increase by 21.0 
percent and the demand for food grain production will increase by 22.0 
percent. Given the projected growth trends for grain demand and 
production for both food and other uses, the gap between supply and 
demand is anticipated to grow throughout the decade. The additional 
supply required to meet sub-regional demand, either from imports or 
stocks, is projected to increase by 42.0 percent, reaching 12.1 million 
tons in 2031.
    Cameroon is the most food-secure country in the CAF sub-region. 
However, the country's food security environment continues to be 
challenged by ongoing conflict and the COVID-19 pandemic (Global 
Network Against Food Crises (GNAFC), 2020). Cameroon's ability to 
respond to the pandemic has been limited by decreased oil prices--the 
country's main export--and continued internal conflict (GNAFC, 2020; 
FAO, 2020; World Food Programme (WFP), 2020). In 2021, Cameroon's GDP 
per capita is estimated to remain stagnant and 2.5 percent below the 
average for the 2018-2020 period. In 2021, the share of the population 
estimated to be food-insecure is 21.1 percent (6 million people). From 
2021 to 2031, GDP per capita is projected to grow by 1.2 percent a 
year, lower than the anticipated growth for population (2.7 percent a 
year). However, real domestic prices of major grains are expected to 
steadily decline by an annual rate of 0.8 percent over the decade. By 
2031, the share of food-insecure people is projected to decline 44.7 
percent to 11.7 percent, and the number of food-insecure people is 
projected to be 4.3 million. Over the next decade, the daily caloric 
per capita food gap is expected to decline from 303 kcal in 2021 to 264 
kcal in 2031.
    The Central Africa Republic's (CAR) increasing insecurity due to 
armed conflict and economic impacts of the COVID-19-related 
restrictions are likely drivers of acute food insecurity (FAO and WFP, 
2020). The CAR has the lowest GDP per capita in the CAF sub-region, 
making the population less resilient to income shocks. The CAR's GDP 
per capita is estimated to grow 1.1 percent to $335.50 in 2021. 
However, GDP per capita is estimated to remain unchanged from the 2018-
2020 period average of $335.20. Reflecting the low-income levels in 
CAR, the country has the second highest estimated prevalence of food 
insecurity in the CAF sub-region. In 2021, the prevalence of food 
insecurity is estimated at 73.9 percent of the population. The number 
of food-insecure people in 2021 is estimated at 4.5 million. From 2021 
to 2031, GDP per capita is projected to grow 2.4 percent a year, 
slightly higher than the anticipated population growth (2.0 percent a 
year) during the same period. By 2031, CAR's prevalence of food 
insecurity is projected to decline by 58.0 percent to 31.0 percent. The 
number of food-insecure people is anticipated to decline by 48.0 
percent to 2.3 million. By 2031, the daily caloric food gap is expected 
to decline by 37.0 percent from 555 kcal in 2021.
    The Democratic Republic of the Congo (DRC) is the largest country 
in Sub-Saharan Africa in terms of area and is the largest economy in 
the CAF sub-region. The Global Food Network Against Food Crises (GNAFC; 
2020) estimates classify the DRC as the country that has the largest 
food crisis in absolute terms of any country globally. The DRC's food 
security situation continues to be affected by conflict and large 
numbers of internally displaced people. The COVID-19 restrictions have 
compounded the negative effects of the protracted economy and armed 
conflicts. Urban and peri-urban \14\ areas--which are areas more 
dependent on labor markets for their livelihood--were the most affected 
by the pandemic (GNAFC, 2020). In 2021, GDP per capita is estimated to 
marginally decline 0.2 percent from 2020 and remain 3.6 percent below 
the 2018-2020 period average. In 2021, it is estimated that the DRC has 
the highest prevalence of food insecurity (82.0 percent of the 
population) and the most food-insecure people (86.3 million) of any 
country in the CAF sub-region.
---------------------------------------------------------------------------
    \14\ Relating to an area immediately surrounding a city or town.
---------------------------------------------------------------------------
    From 2021 to 2031, GDP per capita is projected to grow 1.5 percent 
a year, less than half the anticipated population growth rate (3.1 
percent) over the same period. Given the anticipated slow growth of 
income, the DRC is not expected to see a significant improvement of its 
food security metrics by 2031. In 2031, the share of the population 
considered food-insecure is projected to decline by 10.8 percent to 
73.3 percent of the population. However, the number of food-insecure 
people is anticipated to increase by 18.5 million in 2031. The 
projected increase in the absolute number of food-insecure people is 
mainly supported by the anticipated high population growth rate that 
outpaces income growth. Over the next decade, the daily per capita 
caloric food gap is expected to decline by 10.6 percent from 892 kcal 
in 2021 to 798 kcal in 2031--the highest projected daily per capita 
caloric food gap of any country in IFSA.
    The Republic of the Congo (COG) has the smallest economy and 
population of any country in the CAF sub-region. The Republic of the 
Congo's food security situation is continually affected by the 
conflicts in neighboring DRC and CAR, as COG is a major recipient of 
large refugee populations. Moreover, COG's small economy was 
particularly impacted by the pandemic, as the country's GDP was 
estimated to have declined by 4.5 percent in 2020 (Baquedano, et al., 
2021). In 2021, GDP per capita is estimated to marginally decline from 
2020 (^0.2 percent) and remain 5.8 percent below the 2018-2020 period 
average. The prevalence of food insecurity for 2021 is estimated at 
56.7 percent of the population. In 2021, the number of food-insecure 
people is estimated at 3.1 million in COG.
    From 2021 to 2031, GDP per capita in COG is projected to grow at a 
rate of 0.2 percent a year, below the anticipated rate of growth of 
population (2.3 percent a year). As a result of the projected slow 
income growth, only moderate improvement in the country's food security 
metrics is anticipated over the next decade. By 2031, the share of the 
population considered food-insecure is expected to decline by 30.2 
percent and reach almost 40 percent. The number of food-insecure people 
is projected to decline by 11.9 percent from its 2021 level and reach 
2.7 million. Over the next decade, the daily caloric food gap is 
projected to decline by 16.2 percent from 402 kcal in 2021 to 337 kcal 
in 2031.

 
 
 
                               References
 
    Baquedano, F., Zereyesus, Y.A., Christensen, C., and Valdes, C.
 2021. COVID-19 Working Paper: International Food Security Assessment,
 2020-2030: COVID-19 Update and Impacts on Food Insecurity. COVID-19
 Working Paper #AP-087, U.S. Department of Agriculture, Economic
 Research Service.
    Food and Agricultural Organization of the United Nations and the
 World Food Programme, 2020. FAO-WFP early warning analysis of acute
 food insecurity hotspots: October 2020. Rome.
    Global Network Against Food Crises, 2020. Food crises and COVID-19:
 Emerging evidence and implications. An analysis of acute food
 insecurity and agri-food systems during COVID-19 pandemic. Technical
 Note, September 2020.
    Ministere des Affaires Sociales et de l'Action Humanitaire et le
 Programme Alimentaire Mondial, 2020. Resume de l'enquete sur les
 impacts du COVID-19 sur la securite alimentaire a Brazzaville.
 

East Africa (EAF)
    In East Africa (EAF) the overlap of shocks has exacerbated food 
insecurity and poverty conditions in the EAF sub-region (FAO and WFP, 
2020). These shocks include reduced agricultural output, protracted 
conflicts in some countries, the socioeconomic effects of the COVID-19 
pandemic and the effects of pandemic containment efforts. In 2020, 
EAF's GDP per capita declined by 2.9 percent from 2019. In 2021, it is 
estimated that EAF's GDP will grow by 4.0 percent and be 5.3 percent 
above the 2018-2020 period average. There is some variation from this 
trend as GDP growth in Burundi, Chad, and Eritrea is estimated to grow 
marginally in 2021 and remain below the 2018-2020 period average. In 
Sudan, GDP is estimated to grow 5.1 percent in 2021, but growth is 
anticipated to remain below the 2018-2020 average. As a result of the 
variation of GDP growth across countries in the EAF sub-region and 
continued population growth, GDP per capita in 2021 is estimated to be 
1.6 percent below its 2019 level.
    In 2021, because of the estimated GDP per capita levels for EAF, 
46.3 percent of the population in the sub-region is anticipated to be 
food-insecure (table 6). The number of food-insecure people in EAF is 
estimated at 177.2 million people in 2021. Ethiopia, with a population 
of 111 million people, is estimated to have 37.7 million of its 
population considered food-insecure. Uganda is estimated to have the 
second highest number of food-insecure people in EAF, with 26.5 million 
food-insecure people.

                                                     Table 6
                  Food security indicators for East Africa (Sub-Saharan Africa), 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                50.6               23.3               73.9               61.3               12.7
          2031                73.4               30.0              103.4               84.2               19.2
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

East Africa indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                      East Africa         382.4           489.7           177.2           134.9            46.3            27.6             487             407          9,493          6,988
  Burundi..........................        12.3            16.5             9.7            13.0            79.3            78.9             580             577            657            874
  Chad.............................        17.4            23.4            11.7            13.7            67.0            58.4             607             554            895            958
  Eritrea..........................         6.1             6.9             3.8             1.3            62.5            19.0             442             276            211             45
  Ethiopia.........................       110.9           139.6            37.7            16.0            34.0            11.4             318             239          1,093            304
  Kenya............................        54.7            66.9            25.2             9.9            46.0            14.7             372             260          1,166            319
  Rwanda...........................        12.9            15.2             5.4             2.7            41.8            18.0             413             317            264            102
  Somalia..........................        16.4            21.8            13.7            16.8            84.0            77.2             727             659          1,146          1,271
  Sudan............................        46.8            60.5            17.9            12.5            38.3            20.6             390             320            822            469
  Tanzania.........................        60.2            78.0            25.5            27.6            42.4            35.3             495             461          1,574          1,587
  Uganda...........................        44.7            60.9            26.5            21.5            59.2            35.2             522             410          1,665          1,060
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    Over the next decade, the population of EAF will increase from 
382.4 million to 489.7 million people, a projected growth rate of 2.5 
percent a year (table 6). By contrast, GDP is anticipated to grow by 
4.7 percent a year from 2021 to 2031 and reach $620 billion. Reflecting 
the anticipated trends in population and GDP growth, GDP per capita is 
projected to grow at a rate 2.1 percent a year and increase from $1,025 
in 2021 to $1,267 in 2031 (table 3). East Africa's projected GDP per 
capita growth rate is the fastest in the SSA region. Due to the 
anticipated income growth, the prevalence of food insecurity is 
projected to decline by 40.5 percent by 2031. In addition, the number 
of food-insecure people is projected to decline by almost 24.0 percent 
to 134.9 million (table 6). In absolute terms, Tanzania and Uganda are 
anticipated to have the highest numbers of food-insecure people in the 
EAF sub-region for 2031. Over the next decade all countries in the sub-
region are expected to see an improvement in their daily per capita 
caloric food gap--defined as the difference between the estimated level 
of consumption and the recommended target of 2,100 kcal per day. In 
2031, the daily Calorie food gap for the sub-region is projected at 407 
kcal, a 16.3 percent decline from 2021.
    Food grain demand in EAF--mainly driven by population growth--is 
projected to increase from 50.6 million tons in 2021 to 73.4 million 
tons in 2031 (table 6). Grain demand for feed and other uses is 
projected to increase moderately from 23.3 million tons in 2021 to 30 
million tons in 2031. Although projected growth for total grain demand 
and production are both anticipated to average 3.3 percent over the 
next decade, demand is expected to outpace production in absolute 
terms. By 2031 an additional 19.2 million tons, either from imports 
and/or stocks, are projected to be required to meet the sub-regions 
consumption needs (table 6).
    For 2021, Burundi is estimated to have the second-lowest GDP per 
capita in EAF, after Somalia. From 2021 to 2031, Burundi's population 
is projected to grow at a rate of 3.0 percent a year, an increase from 
the 2.3 percent annual rate of growth over the 2015-2020 period. By 
contrast, GDP is anticipated to grow at a rate of 2.0 percent a year 
over the next decade. Given population and GDP growth trends, GDP per 
capita is projected to decline in the coming decade, by an annual rate 
of 1.0 percent from $250 to $226. As a result of the projected 
macroeconomic and population trends, the prevalence of food insecurity 
in Burundi is expected to remain high at 78.9 percent of the population 
by 2031. Over the coming decade, the country is anticipated to make 
little progress in reducing the per capita food gap in kcal, which is 
projected to decline by less than 1.0 percent from 580 kcal in 2021 to 
577 kcal in 2031.
    In Chad, an expected decline in population growth, increase in per 
capita GDP, and downward trend in real domestic prices of major grains 
are expected to contribute to the country's improved food security 
metrics. However, the improvement in the country's food security 
situation over the next decade is projected to be moderate. Over the 
next decade, the share of the population projected to be food-insecure 
is expected to decline from 67.0 percent 2021 to 58.4 percent in 2031. 
Moreover, the projected prevalence of food insecurity for 2031 is 
anticipated to be more than double the projected sub-regional average 
for the same year. The per capita Calorie per day food gap is projected 
to decline by 8.7 percent from 607 kcal in 2021 to 554 kcal in 2031.
    Eritrea's population is expected to grow annually by 1.2 percent in 
the next 10 years, an increase from 0.9 percent a year during the 2015-
2020 period. Eritrea is among the countries with higher prevalence of 
food insecurity in the EAF sub-region. In 2021, 3.8 million people 
(62.5 percent) of the country are estimated to be food-insecure. The 
per capita daily Calorie food gap is projected to decline from 442 kcal 
in 2021 to 276 kcal in 2031.
    In Ethiopia, the impacts of the Tigray conflict and heightened 
insecurity in other regions are expected to continually hamper access 
to key income and food sources, such as labor migration and livestock 
sales in 2021 (FAO, 2020 and Famine Early Warning Systems Network (FEWS 
NET), 2020). Moreover, according to the African Center for Diseases 
Control and Prevention (2021), Ethiopia is the country with the highest 
number of reported COVID-19 cases in the sub-region. The country is 
also estimated to see only moderate growth in its economy in 2021. With 
an annual growth rate of 2.4 percent, Ethiopia's population is 
projected to reach 140 million by the end of 2031. However, Ethiopia's 
GDP is projected to grow at a faster pace of 6.1 percent a year, among 
the highest in the sub-region and on par with Uganda. As a result of 
income and population trends, per capita GDP is anticipated to grow by 
3.7 percent during the 2021-2031 period. The real domestic price for 
major grains is projected to follow a declining trend, decreasing at a 
rate of 1.4 percent a year. By 2031, Ethiopia is expected to have the 
lowest prevalence of food insecurity (11.0 percent) in the EAF sub-
region. The number of food-insecure people is projected to decline by 
almost 60.0 percent over the next decade. However, given that Ethiopia 
has the largest population in EAF, the country will still account for 
the largest number of food-insecure people (16 million) by 2031.
    In Kenya, GDP per capita is anticipated to increase 1.8 percent in 
2021 from its sharply reduced 2020 level, but income is expected to 
remain below its pre-pandemic level. It is estimated that 46.0 percent 
of the country's population could be food-insecure in 2021. However, by 
2031, the prevalence of food insecurity is projected to decline by 68.0 
percent because of a decline in real domestic prices for major grains 
and annual GDP per capita growth of 2.5 percent. The daily caloric food 
gap is projected to decline from 372 Kcal in 2021 to 260 Kcal by 2031.
    Rwanda is among the fastest growing economies in the sub-region and 
is expected to maintain its pace of sustained GDP growth (4.4 percent, 
annually) in the coming decade. Moreover, in 2021, GDP per capita is 
estimated to be above the period average of 2018-2020. The prevalence 
of food insecurity in 2021 is estimated at 41.8 percent and is 
projected to decline by 56.8 percent to 18.0 percent by 2031. The 
estimated daily Calorie food gap in 2021 is projected to decline by 
23.3 percent over the next decade and remain below the EAF sub-regional 
average.
    Somalia is estimated to have the lowest GDP per capita of all 
countries included in the assessment, at $101 in 2021. This figure is 
projected to slightly increase, at a rate of 0.4 percent a year during 
the next 10 years and reach $105 in 2031. With real domestic price of 
major grain commodities expected to remain unchanged, Somalia's 
prevalence of food insecurity is projected to fall by 8.1 percent to 
77.2 percent of the population by 2031. The estimated daily Calorie 
food gap in the country for 2021 is among the highest in the sub-
region. By 2031, the daily Calorie food gap is projected to decline by 
9.4 percent from 727 kcal in 2021 to 659 kcal in 2031.
    In Sudan, food and transport prices have followed an upward trend 
since the last quarter of 2020, and grain prices (e.g., sorghum and 
millet) were approximately seven times higher than the 5 year average 
at the end of the year 2020 (FEWS NET, 2020). In addition, persistently 
low foreign currency reserves and high-import demand for essential food 
and non-food items led to a sharp depreciation of the Sudanese pound 
relative to the U.S. dollar (FEWS NET, 2020). The current projection 
for Sudan estimates a 4.6 percent decline in GDP per capita from 2021 
to 2031, and prices for major grains are expected to increase at an 
annual rate of 1.2 percent. However, the anticipated rate of decline in 
GDP per capita (^0.5 percent a year) over the period of 2021-2031 is an 
improvement over the rate (^3.5 percent a year) observed during the 
2015-2020 period. The population growth rate is projected to decline 
from 2.9 percent in 2021 to 2.6 percent in 2031. As a result of an 
anticipated slowed growth rate and a less rapid decline in per capita 
income, some improvement is expected for Sudan's food security metrics 
over the next decade. The prevalence of food insecurity is projected to 
decline by 46.0 percent from its 2021 estimate to 20.6 percent of the 
population. By 2031, the number of food-insecure people is anticipated 
to decline by 30.0 percent from the 2021 estimate to 12.5 million.
    The United Republic of Tanzania has the second-highest population 
in EAF, after Ethiopia, with an estimated 60 million people in 2021. At 
a projected annual rate of growth of 2.6 percent year, the country's 
population is expected to reach to 78 million by 2031. The rate of 
growth of GDP per capita is expected to slow to 1.0 percent a year 
during the 2021-2031 period from 2.5 percent for the 2015-2020 period. 
The prevalence of food insecurity is projected to decline by 16.6 
percent from its 2021 estimate, to 35.3 percent of the population. This 
projected decline reflects an anticipated higher population growth and 
lower income growth over the next decade. However, the number of food-
insecure people is projected to grow by 8.0 percent from 2021 to 2031. 
The daily Calorie food gap is anticipated to decline by 6.8 percent 
from 495 kcal in 2021 to 461 kcal in 2031.
    Uganda's GDP is projected to grow at an annual rate of 6.1 percent 
in the coming decade, on par with Ethiopia, and the highest in the sub-
region. Uganda's population is expected to grow by 3.1 percent a year 
from 2021 to 2031, lower than the rate of growth (3.7 percent) for the 
2015-2020 period. The share of the food-insecure population in Uganda 
is projected to decline by 23.9 percentage points, from 59.2 percent in 
2021 to 35.2 percent in 2031, the second-highest decline in the EAF 
sub-region. The number of food-insecure people is expected to decline 
by 19 percent from its 2021 estimate, to 21.5 million in 2031. Over the 
next decade the daily per capita Calorie food gap is projected to 
decline by 21.5 percent from 522 kcal in 2021 to 410 kcal.

 
 
 
                               References
 
    Food and Agricultural Organization of the United Nations. 2020. Crop
 Prospects and Food Situation #4, Rome, Italy
    Food and Agricultural Organization of the United Nations and the
 World Food Programme (WFP). 2020. FAO-WFP early warning analysis of
 acute food insecurity hotspots: October 2020. Rome, Italy
    Famine Early Warning Systems Network. 2020. Emergency (IPC Phase 4)
 expected in parts of Tigray in 2021 if access constraints persist. 2020-
 2021, Washington, D.C.
 

Southern Africa (SAF)
    In 2021 the food security environment in the Southern Africa (SAF) 
sub-region continues to be affected by a number of factors including 
but not limited to natural hazards, pest infestations such as locust, 
and the slowdown in economic activities due to COVID-19-related 
restrictions (FAO and WFP, 2020). Although food-supply chains have 
remained functional, COVID-19-related border closures and movement 
restrictions, combined with reduced harvests in some countries, have 
led to above-average food prices and hindered food access (FAO and WFP, 
2020).
    Notwithstanding the difficult food security environment, in 2021, 
SAF's economy is estimated to grow 2.8 percent, but GDP is anticipated 
to remain below the 2018-2020 period average. Moreover, GDP per capita 
in 2021 is estimated to remain unchanged from 2020 and below the 2018-
2020 period average. However, there is some variation in the estimates 
of economic growth across the SAF sub-region. For example, the 
estimates for GDP per capita growth in 2021 for Madagascar, Malawi, and 
Mozambique are anticipated to be above the 2020 values and the 2018-
2020 period average. But only in Madagascar is the GDP per capita 
estimated to follow the same trend as GDP in 2021. By contrast, Zambia 
and Zimbabwe are anticipated to see moderate growth of GDP, but a 
contraction of GDP per capita in 2021.
    The SAF sub-region is estimated to have the second-highest 
prevalence of food insecurity in SSA after CAF. In 2021, 58.8 percent 
of the population (89.7 million people) of the SAF sub-region is 
estimated to be food-insecure (table 7). The most food-insecure country 
in the SAF sub-region is estimated to be Zimbabwe (83.2 percent of the 
population) and the most food-secure country is estimated to be 
Eswatini, formerly known as Swaziland (31.1 percent of the population).

                                                     Table 7
                     Food security indicators for Southern Africa sub-region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                19.1               21.7               40.8               24.3               16.5
          2031                27.1               29.8               57.0               34.1               22.9
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Southern Africa indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                  Southern Africa         152.6           199.1            89.7            88.2            58.8            44.3             471             391          6,006          5,163
  Angola...........................        33.6            46.9            17.1            23.6            50.9            50.4             443             440            965          1,323
  Lesotho..........................         2.0             1.9             0.8             0.2            40.7            12.5             364             259             34              7
  Madagascar.......................        27.6            34.1            18.3            17.4            66.5            51.0             493             418          1,295          1,039
  Malawi...........................        21.9            30.2             8.6             5.7            39.5            18.8             405             322            408            213
  Mozambique.......................        30.9            39.9            18.1            14.8            58.7            37.0             519             417          1,214            795
  Namibia..........................         2.7             3.2             1.1             0.8            42.9            26.2             323             270             46             28
  Eswatini.........................         1.1             1.2             0.3             0.2            31.1            17.2             308             260             12              6
  Zambia...........................        17.9            23.8            12.9            15.4            71.7            64.9             697             646          1,065          1,186
  Zimbabwe.........................        14.8            18.0            12.3            10.1            83.2            55.9             685             492            967            565
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    From 2021 to 2031, the SAF's GDP is projected to expand 3.5 percent 
a year, a reversal of the previous trend of a contraction of 0.6 a year 
during the 2015-2020 period. With a projected annual population growth 
rate of 2.7 percent--a slight decline from 2.8 percent a year during 
the 2015-2020 period--the population in Southern Africa will increase 
from 153 million in 2021 to 199 million people in 2031. The anticipated 
population and GDP growth trends imply that, over the same period, 
annual GDP per capita is anticipated to slightly expand by 0.8 percent 
a year, which is an improvement from ^3.3 percent a year during the 
2015-2020 period. GDP per capita in SAF is estimated to grow from 
$1,367 in 2021 to $1,479 in 2031. Reflecting the projected income 
growth by 2031, the prevalence of food insecurity is expected to 
decline by 25.0 percent from its 2021 level to 44.3 percent (table 7).
    By 2031, Lesotho and Malawi are projected to make the most progress 
at reducing the prevalence of food insecurity, reducing food insecurity 
by 69.4 percent and 52.3 percent, respectively. By contrast, Zambia is 
projected to make the least progress over the decade, reducing its 
share of its population considered food-insecure by 9.0 percent. Both 
Zambia (65.0 percent) and Zimbabwe (56.0 percent) are projected to have 
the highest share of their population considered food-insecure in 2031. 
The number of food-insecure people in the SAF sub-region is expected to 
marginally decline, going from 89.7 million people in 2021 to 88.2 
million people in 2031. The projection of a small decline in the number 
of food-insecure people mainly reflects the anticipated slight decline 
in the population growth rate. Angola and Zambia are anticipated to 
follow an opposite trend from the sub-regional trend and see an 
increase in the number of food-insecure people between 2021 and 2031. 
All countries in the SAF are projected to see an improvement in their 
daily per capita Calorie food gap in the next decade. The daily per 
capita Calorie food gap--which represents the difference between 
estimated consumption and the daily requirement of 2,100 kcal--is 
projected to decline 16.8 percent, from 471 kcal in 2021 to 391kcal in 
2031 (table 7).
    Over the next decade, grain demand in SAF is projected to increase 
by 36.6 percent, from 40.8 million tons in 2021 to 57 million tons in 
2031 (table 7). From 2021 to 2031, demand for food is projected to grow 
(3.6 percent a year) at a faster pace than demand for grain for other 
uses (3.2 percent a year). In absolute terms demand for grain for other 
uses in 2031 is projected to be 2.7 million tons higher than the demand 
for food grains. Over the decade production is projected to increase 
almost 40.0 percent, growing 3.4 percent a year on par with the 
projected annual growth of grain demand. In absolute terms demand is 
anticipated to exceed production by almost 23 million tons (table 7).
    Angola has the third largest economy in Sub-Saharan Africa, with an 
estimated GDP of $108 billion in 2021. With a projected annual growth 
rate of 3.2 percent, GDP is expected to reach $149 billion by 2031. 
Angola is also among the countries with the highest projected 
population growth rates in the sub-region. Although lower than the 
2015-2020 period average (3.6 percent), the annual population growth 
rate between 2021 and 2031 is expected to be 3.4 percent. Reflecting 
projected population growth trends over the decade GDP per capita is 
anticipated to experience a net decline (^0.2 percent a year). GDP per 
capita is projected to decline from its 2021 estimate of $3,233 in 2021 
to $3,177 in 2031. The real domestic price of major grains in the 
country is also projected to increase by an annual rate of 4.0 percent, 
reversing the annual downward trend of the 2015-2020 period (^0.2 
percent). More than half of Angola's population (51.0 percent) in 2021 
is estimated to be food-insecure. By 2031, this metric is projected to 
remain relatively unchanged. Half of Angola's population (23.6 million) 
is projected to fall short of the daily Calorie requirement by 2031, 
the highest number in the SAF sub-region. The daily per capita Calorie 
food gap is also anticipated to remain relatively unchanged, from 442 
kcal in 2021 to 440 kcal in 2031.
    Lesotho has the second smallest population in the SAF sub-region, 
and it is the only country in SSA whose population is anticipated to 
decline over the next decade. Lesotho's population is projected to 
hover around 2 million between 2021 and 2031, declining annually by 0.1 
percent. The country's GDP is projected to expand annually by 2.9 
percent, resulting in an expected increase in GDP per capita from 
$1,209 in 2021 to $1,629 in 2031. The real domestic price of major 
grains is projected to decline between 2021 and 2031, at a rate of ^0.9 
percent a year. The combined effects of the projected population, 
income, and price trends over the next decade are anticipated to reduce 
the prevalence of food insecurity by 69.4 percent. The number of food-
insecure people is projected to also decline sharply, from about 
800,000 people in 2021 to 200,000 in 2031. By 2031, Lesotho is 
projected to be the least food-insecure country in SAF.
    The Republic of Madagascar--an island country in the Indian Ocean--
is projected to grow in population from 28 million in 2021 to 34 
million in 2031, at an annual growth rate of 2.1 percent. Surpassing 
the anticipated population growth rate, Madagascar's GDP is anticipated 
to grow by 3.5 percent a year and reach $20.1 billion by 2031. Although 
GDP per capita is projected to grow by 1.5 percent a year by 2031, the 
expected growth in income is dampened by an anticipated trend of 
increasing real domestic prices for major grains (0.5 percent a year). 
These macroeconomic trends are expected to lead to a moderate decline 
in the prevalence of food insecurity over the next decade. The share of 
the population considered food-insecure is projected to decline from 
its estimate of 66.5 percent in 2021 to 51.0 percent in 2031. After 
Angola, the Republic of Madagascar is projected to have the second 
highest number of food-insecure people (17.4 million) in SAF by 2031. 
The daily per capita Calorie food gap is expected to decline 15.0 
percent, from 493 kcal in 2021 to 418 kcal in 2031.
    Malawi--a landlocked country--has the lowest estimated GDP per 
capita in SAF for 2021. Driven by projections of annual population and 
GDP growth rates of 3.3 percent and 4.1 percent, respectively, Malawi's 
GDP per capita is anticipated to increase from $338 in 2021 to $366 in 
2031. The increasing income trend is complemented by an anticipated 
declining trend in real domestic price of major grains (^2.6 percent 
annually) between 2021 and 2031. The anticipated income and price 
trends are expected to sharply reduce food insecurity in the country 
over the coming decade. The prevalence of food insecurity is projected 
to decline from 39.5 percent to 18.8 percent in the next 10 years, the 
third lowest after Eswatini and Lesotho.
    Over the coming decade, Mozambique's GDP is projected to grow at 
the fastest rate of any country in SAF, growing by 5.2 percent 
annually. However, Mozambique's population is projected to grow at half 
that rate. As a result of these trends, GDP per capita in the country 
is projected to increase significantly, from $599 in 2021 to $774 in 
2031. Reflecting the projected income trend, the share of the 
population considered food-insecure is expected to decline by 36.9 
percent to 37.0 percent in 2031. The number of food-insecure people is 
projected to decline by 18.5 percent to 14.8 million people. By 2031, 
the daily per capita Calorie food gap is expected to decline by 19.6 
percent, from 519 kcal in 2021 to 417 kcal in 2031.
    Namibia's population over the next decade is projected to hover 
around 3 million, growing at 1.8 percent a year. Accounting for 
population and GDP growth rates of 1.8 percent and 2.7 percent, 
respectively, the country's GDP per capita is projected to increase by 
0.9 percent from $3,914 in 2021 to $4,288 in 2031. The real domestic 
price of major grains in Namibia is projected to decline annually by 
0.6 percent. As a result of the anticipated income and price trends, 
the prevalence of food insecurity in Namibia's population is expected 
to decline from 42.9 percent to 26.2 percent, i.e., from 1.2 million to 
800,000 people by 2031.
    Eswatini--formerly known as Swaziland until 2018--has the lowest 
population in SAF, estimated at one million in 2021. Over the next 
decade, Eswatini's economy is projected to expand (GDP growth of 2.0 
percent a year) at more than 3 times the pace of population growth (0.6 
percent a year). As a result, the country is expected to make 
significant income gains, with GDP per capita anticipated to grow at a 
pace of 1.4 percent a year between 2021 to 2031. Eswatini's GDP per 
capita is projected to be the highest in Southern Africa at $4,396 in 
2031. The anticipated macroeconomic trends, coupled with declining real 
domestic prices of major grains (^0.5 percent a year between 2021 to 
2031), are expected to support Eswatini's improved food security 
conditions. By 2031, the prevalence of food insecurity is projected to 
decline by 44.7 percent to 17.2 percent of the population. By 2031, the 
country is projected to have the second lowest per capita per day 
Calorie food gap in Southern Africa after Lesotho. The per capita daily 
Calorie food gap is projected to decline 16.0 percent over the decade, 
going from 308 kcal in 2021 to 260 kcal in 2031.
    Zambia is estimated to have the second-highest share of its 
population, after Zimbabwe, considered food-insecure in the SAF sub-
region. In 2021, 71.7 percent of Zambia's population is considered 
food-insecure. The estimated high prevalence of food insecurity for 
2021 is driven by an expectation of GDP per capita to remain about 7.5 
percent below its 2019 levels. By 2031, the prevalence of food 
insecurity is projected to remain high at 64.9 percent. The anticipated 
high level of food insecurity at the end of the decade mainly reflects 
slower projected per capita GDP growth (0.7 percent a year from 2021 to 
2031) and an increasing price trend for major grains (one percent a 
year). The number of food-insecure people is projected to increase by 
2.6 million from 2021 to 2031.
    Zimbabwe is Southern Africa's most food-insecure country in 2021, 
with an estimated 83.2 percent of its population unable to meet the 
daily caloric requirement. Continued macroeconomic crises, coupled with 
the socioeconomic impacts of the COVID-19 pandemic, will drive the 
acute food insecurity situation in the country in 2021 (FAO and WFP, 
2020). Over the next decade, GDP per capita growth is projected to 
recover from a declining trend of 2.8 percent a year during the 2015-
2020 period to growth of 1.9 percent a year. As a result of the 
anticipated improvements in income, the prevalence of food insecurity 
by 2031 is projected to decline a third to 55.9 percent of the 
population. Over the next decade the daily per capita food gap is 
anticipated to decline 28.2 percent, from 685 kcal in 2021 to 492 kcal 
in 2031.

 
 
 
                               References
 
    Food and Agricultural Organization of the United Nations and the
 World Food Programme. 2020. FAO-WFP early warning analysis of acute
 food insecurity hotspots: October 2020. Rome.
    Global Network Against Food Crises. 2020. Food crises and COVID-19:
 Emerging evidence and implications. An analysis of acute food
 insecurity and agri-food systems during COVID-19 pandemic. Technical
 Note, September 2020.
    World Bank. 2019. Lesotho Poverty Assessment. World Bank,
 Washington, D.C.
 

West Africa (WAF)
    Food insecurity across West Africa (WAF) and the Sahel has risen 
dramatically, due to increasing conflict and the impact of COVID-19-
related restrictions (FAO and WFP, 2020). COVID-19 decreased income, 
increased poverty, disrupted regional trade, supply chains, and cross-
border pastoralist activities, and inflated food prices in the Sahel 
(e.g., Burkina Faso, Niger, and Nigeria) and some coastal countries 
(e.g., Sierra Leone and Liberia) (FSIN and GNFAC, 2020). In high-
conflict zones (such as the Central Sahel and northern Nigeria) 
civilians are increasingly affected by violence and conflict, with 
rising levels of displacement (FAO and WFP, 2020).
    In 2020, the GDP of the WAF sub-region declined by 4 percent 
(Baquedano, et al., 2021). In 2021, GDP is estimated to grow by 3.3 
percent and be 1.6 percent above the SSA average for the period 2018-
2020. However, GDP per capita in 2021 is estimated to remain 5.8 
percent below its pre-pandemic level of $1,905 in 2019 (table 3). The 
number of food-insecure people in 2021 is estimated at 124.7 million, 
an increase of 8.6 million from last year's estimate (table 8). The 
largest estimated increase in the number of food-insecure people are in 
Cote d'Ivoire (2.1 million people) and Niger (2.9 million people). By 
contrast, Gambia (^0.2 million people) and Nigeria (^4.1 million 
people) are estimated to experience a decline in the number of food-
insecure people from 2020's values. Despite the anticipated high 
numbers of food-insecure people, in 2021, the WAF sub-region is 
estimated to have the lowest prevalence of food insecurity in SSA. The 
share of the population considered food-insecure is estimated at 30.1 
percent, 1.2 percentage points higher than last year's estimate. Guinea 
is estimated to be the most food-secure country in the sub-region--with 
a prevalence of food insecurity of 8.6 percent--and Liberia the least 
food-secure (table 8).

                                                     Table 8
                       Food security indicators for West Africa sub-region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                63.7               45.8              109.5               74.7               34.8
          2031                92.3               65.8              158.1              111.3               46.8
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

West Africa indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                      West Africa         414.7           532.3           124.7            83.5            30.1            15.7             379             306          6,025          3,417
  Benin............................        13.3            18.4             2.7             1.1            20.3             6.1             319             250            116             38
  Guinea-Bissau....................         2.0             2.5             1.0             0.7            52.1            26.5             422             323             57             29
  Burkina Faso.....................        21.4            26.9             6.4             4.3            30.1            15.9             456             385            364            205
  Cabo Verde.......................         0.6             0.7             0.2             0.1            36.6             9.6             338             238             10              2
  Cote d'Ivoire....................        28.1            34.6             6.9             5.9            24.5            16.9             420             382            414            321
  Gambia...........................         2.2             2.6             0.5             0.1            22.5             4.4             298             216             17              3
  Ghana............................        30.0            36.8             2.6             0.7             8.6             1.9             249             201             82             18
  Guinea...........................        12.9            16.9             2.9             2.0            22.6            11.8             356             306            162             95
  Liberia..........................         5.2             6.8             3.1             2.2            59.0            32.0             619             475            213            116
  Mali.............................        20.1            26.8             4.1             4.0            20.5            14.9             329             305            172            154
  Mauritania.......................         4.1             4.9             0.8             0.3            19.6             5.6             316             246             32              9
  Niger............................        23.6            34.0             9.1             5.6            38.5            16.5             456             355            582            280
  Nigeria..........................       219.5           280.5            74.5            51.0            33.9            18.2             351             291          3,287          1,870
  Senegal..........................        16.1            19.9             3.6             1.3            22.5             6.7             278             215            143             41
  Sierra Leone.....................         6.8             8.7             3.1             2.7            45.0            31.3             497             433            235            183
  Togo.............................         8.8            11.2             3.1             1.6            35.5            14.2             356             275            139             55
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    By 2031, the population of WAF is projected to increase by 118 
million from its 2021 estimate, growing annually at a rate of 2.5 
percent. From 2021 to 2031, GDP is expected to expand at a rate of 3.8 
percent a year and reach close to $1.1 trillion. Given the anticipated 
fast pace of expansion in WAF's economy, relative to population growth, 
GDP per capita is projected to increase from $1,794 in 2021 to $2,024 
in 2031 (table 3). The WAF sub-region is projected to see a 47.8 
percent decline in its prevalence of food insecurity, with the share of 
the population considered food-insecure dropping to 15.7 percent by 
2031 (table 8). By 2031, Benin, Ghana, Guinea, Mauritania, and Senegal 
are projected to be among the least food-insecure countries in the WAF 
sub-region. By contrast, Sierra Leone is projected to be the most food-
insecure country in the sub-region, with 31.3 percent of the country's 
population projected to be food-insecure by 2031. Over the next decade, 
the number of food-insecure people in WAF is projected to decline by 
41.2 million people, with Nigeria accounting for more than half of this 
estimated decline. Mali is projected to make the least progress over 
the next decade, with the country's number of food-insecure people 
remaining relatively unchanged at around 4 million. All WAF countries 
included in IFSA are anticipated to see an improvement in their daily 
per capita Calorie food gap in the next decade (table 8). By the end of 
the decade, the per capita daily Calorie food gap is projected to 
decline 19.2 percent, from 379 kcal in 2021 to 306 kcal in 2031.
    Total grain demand in the WAF sub-region is projected to increase 
by an additional 48.6 million tons over the next 10 years, from an 
estimate of 109.5 million tons in 2021, to 158.1 million tons in 2031 
(table 8). Demand for food grain is anticipated to account for 59.0 
percent of the growth in grain demand and increase by 28.6 million tons 
by 2031. By contrast, over the next decade, the demand for grain for 
other uses (including feed) is projected to increase by a lower amount, 
20 million tons. Grain production is projected to increase less than 
total grain demand, increasing by 36.6 million tons by 2031. To cover 
the estimated growth in the gap between grain demand and production by 
2031, the WAF sub-region is projected to need an additional supply of 
12 million tons of grain.
    Nigeria is the largest economy and the most populous country in the 
WAF sub-region. The country is highly susceptible to global economic 
shocks, as it is highly dependent on export revenues from crude oil 
sales. In addition to the widespread socioeconomic effects from the 
COVID-19 pandemic, conflict in the north-eastern and north-central 
parts of the country continue to impact food security (FSIN and GNFAC, 
2020). Over the next decade, Nigeria's economy is expected to expand at 
an annual rate 3.4 percent, a reversal of the declining trend in GDP 
growth rate of ^0.5 percent a year during the 2015-2020 period. Over 
the next decade, Nigeria's population is projected to grow at a rate of 
2.5 percent a year, to add 61 million people. Given that the growth 
rate of the Nigerian economy is anticipated to outpace population 
growth rate by 2031, GDP per capita is expected to increase from an 
estimated $2,259 in 2021 to $2,475 in 2031. Driven by anticipated 
income growth over the coming decade, the prevalence of food insecurity 
is projected to decline, from 33.9 percent of the population in 2021 to 
18.2 percent in 2031. The number of food-insecure people by 2031 is 
expected to decline by roughly 30 percent, to 51 million.
    Ghana and Cote d' Ivoire have the second- and third-largest 
economies, respectively, and together account for 14 percent of the WAF 
sub-region's population. While the economies of both countries were 
estimated to have shrunk by less than 2.0 percent in 2020, their GDP is 
expected to grow by more than 5.0 percent in 2021, and, in absolute 
terms, remain above the 2018-2020 period average. Moreover, GDP per 
capita in 2021 is estimated to be marginally below their pre-COVID-19 
pandemic levels. Both countries are anticipated to see real income 
gains over the next decade, as GDP growth is projected to outpace 
population growth. By 2031, Ghana is projected to make the most gains 
in its food-security metrics, with both the prevalence of food 
insecurity in the population and the number of food-insecure people 
projected to decline by more than 70.0 percent. Over the next decade, 
Cote d' Ivoire's progress is anticipated to be more moderate, with the 
share of the population considered food-insecure projected to decline 
by almost \1/3\ and the number of food-insecure people declining by 
15.0 percent.
    The food security environment of the Central Sahelian countries of 
the WAF sub-region--including Burkina Faso, Mali, and Niger--continues 
to be impacted by protracted armed conflicts, as well as the 
socioeconomic effects from the COVID-19 pandemic. Burkina Faso and Mali 
were also impacted by decreased cotton prices in 2020, a major source 
of export revenues for both economies. In the conflict areas of the 
Central Sahelian countries, displaced populations face limited access 
to food (FSIN and GNFAC, 2020). Moreover, severe disruptions to 
marketing chains have also been reported because of the pandemic, 
affecting price levels of the general populations of Central Sahelian 
countries. Despite the challenging macroeconomic and food security 
environment in 2021, all countries are projected to see a moderate 
rebound in their economic growth prospects over the next decade. By 
2031, the prevalence of food insecurity across the 3 countries is 
projected to decline by 47.5 percent to less than 16.0 percent, with 
the sharpest declines projected in Burkina Faso and Niger. The number 
of food-insecure people in these 3 countries in 2031 is projected at 
13.9 million, 29.3 percent lower than in 2021.
    In Liberia and Sierra Leone, the COVID-19 pandemic put further 
pressure on their already declining economic environment. The economies 
of the two countries continue to be impacted by high inflation and a 
strong depreciation of the local currency (Food Security Information 
Network (FSIN) and GNFAC, 2020). Moreover, shortages of inputs in 
2020--particularly fertilizers--depressed crop outputs (FAO and WFP, 
2020). In 2021, Liberia and Sierra Leone are estimated to have a large 
share of their population considered food-insecure. However, by 2031, 
the prevalence of food insecurity is projected to decline by at least 
30.0 percent in both countries, which would likely be driven by an 
anticipated recovery in the economic prospects of both countries. By 
2031, the number of food-insecure people across both countries is 
expected to decline by 38.0 percent, to less than 5 million.
    Gambia and Guinea-Bissau have the smallest economies in the WAF 
sub-region and account for 1.0 percent of the sub-region's population. 
Before the COVID-19 pandemic, the two countries faced an already 
challenging macroeconomic and food security environment. Decreased oil 
prices in 2020--Gambia's main export--and an anticipated decline in 
remittances for Gambia and Guinea-Bissau, both limited their responses 
to the COVID-19 pandemic and may have increased poverty levels (FSIN 
and GNFAC, 2020). By 2031, GDP per capita in Gambia is projected to 
make a strong recovery and grow at a rate of 3 percent a year. Guinea-
Bissau's income growth is anticipated to be more moderate than 
Gambia's, with GDP per capita growth projected at 1.1 percent per year 
from 2021 to 2031. Given the expected robust income gains in Gambia, 
the prevalence of food insecurity is projected to decline by 81.0 
percent and the number of food-insecure people by 77.0 percent. By 
contrast, Guinea-Bissau is anticipated to make less progress over the 
same period. The share of the country's population considered food-
insecure, and the number of food-insecure people, are projected to 
decline by 49.0 percent and 34.0 percent, respectively.

 
 
 
                               References
 
    Baquedano, F., Zereyesus, Y.A., Christensen, C., and Valdes, C.
 2021. COVID-19 Working Paper: International Food Security Assessment,
 2020-2030: COVID-19 Update and Impacts on Food Insecurity. COVID-19
 Working Paper #AP-087, U.S. Department of Agriculture, Economic
 Research Service.
    Food and Agriculture Organization (FAO). 2021. Crop Prospects and
 Food Situation--Quarterly Global Report No. 1, March 2021, Rome
    Food and Agricultural Organization of the United Nations and the
 World Food Programme. 2020. FAO-WFP early warning analysis of acute
 food insecurity hotspots: October 2020. Rome.
    Food Security Information Network and Global Network Against Food
 Crises. 2020. Global Report on Food Crises 2020 September update: in
 times of COVID 19. Rome.
 

North Africa
    North Africa (NAF) is the most food-secure region in the IFSA 
analysis, with only 14 percent of its regional population estimated to 
be food-insecure in 2021. However, the countries of the region continue 
to be affected by the economic slowdown due to the COVID-19 pandemic. 
The impact on the energy and tourism sectors of North Africa--both main 
sources of government revenues and employment for low-income workers--
continues to affect the purchasing power of households, especially in 
urban areas (Food and Agriculture Organization of the United Nations 
(FAO), 2021). Continued subsidies for basic food commodities have 
mitigated income decline, while also buffering consumers from recent 
international food price increases (FAO, 2021). Driven by an estimate 
of incomes that are still lower than 2019 (table 9), the prevalence of 
food insecurity is anticipated to increase sharply for 2021. The share 
of the population estimated to be food-insecure in the NAF region (for 
2021) increased by 5.5 percent from its 2020 value (table 10 and figure 
6). Egypt is estimated to have both the highest prevalence of food 
insecurity (18.9 percent) and the highest number of food-insecure 
people (20.1 million) in the region (table 10). By contrast, Tunisia is 
estimated to have the lowest levels of food insecurity in both relative 
(6.0 percent of the population) and absolute terms (less than one 
million people).

                                                     Table 9
                 Inflation adjusted per capita income for the North Africa region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                2019 (pre-COVID-19)           2021                  2031
                                              ------------------------------------------------------------------
                                                                      Dollars (2015 U.S.)
----------------------------------------------------------------------------------------------------------------
                           North Africa                   3,864                  3,537                 4,240
  Algeria....................................             4,190                  3,838                 4,367
  Egypt......................................             3,950                  3,551                 4,194
  Morocco....................................             3,188                  3,068                 3,945
  Tunisia....................................             3,973                  3,732                 5,144
----------------------------------------------------------------------------------------------------------------
Source: USDA, Economic Research Service International Macroeconomic Dataset.


                                                    Table 10
                         Food security indicators for North Africa region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                47.9               44.3               92.1               36.1               56.1
          2031                59.5               55.4              114.9               46.0               68.9
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

North Africa indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                     North Africa         197.8           228.0            28.6            17.7            14.5             7.8             280             245          1,116            613
  Algeria..........................        43.6            48.6             5.2             2.3            11.8             4.8             282             241            189             73
  Egypt............................       106.5           128.3            20.1            13.7            18.9            10.7             331             292            811            490
  Morocco..........................        35.9            38.8             2.7             1.4             7.4             3.5             266             238             93             43
  Tunisia..........................        11.8            12.4             0.7             0.3             6.0             2.3             242             211             22              7
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

Figure 6
North Africa: Change in the number of food-insecure people in 2021, 
        from 2020
Change in the number of food-insecure population


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

    The NAF region's GDP is projected to annually expand by 3.3 percent 
(an improvement from 2.3 percent during the 2015-20 period), from 
$699.5 billion in 2021 to $966.8 billion in 2031. With an anticipated 
annual growth rate of 1.4 percent--a decline from 1.9 percent during 
the 2015-20 period--the population in the NAF region is projected to 
increase from 198 million to 228 million people over the next decade. 
During the same period, GDP per capita is anticipated to expand by 1.8 
percent (an improvement from 0.4 percent from the 2015-2020 period) 
annually from $3,537 to $4,240 (table 9). By 2031, reflecting income 
and population trends over the decade, 17.7 million people are 
projected to be food-insecure in the NAF region, a 38 percent decline 
from 2021 (table 10). Egypt is expected to account for most of the 
region's food-insecure population in 2031. The per capita daily Calorie 
food gap, defined as the difference between estimated consumption and 
the daily nutrional target of 2,100 kcal, in the NAF region is 
projected to decline from 280 kcal in 2021 to 245 kcal in 2031 (table 
10).
    Total grain demand in the NAF region is projected to increase, from 
92.1 million tons in 2021 to 114.9 million tons in 2031, driven mainly 
by Egypt's growing demand for grains (table 10). Over the next decade, 
the annual growth rate of grain production (2.5 percent a year) is 
projected to outpace the growth rate in total grain demand (2.2 percent 
a year). In absolute terms, total grain demand is expected to be 2.5 
times higher than production by 2031, resulting in an anticipated 23.0 
percent increase in the implied additional supply requirement.
    In 2021, Algeria is NAF's second most food-insecure country, with 
estimated food insecurity rate at 12 percent and this figure is 
projected to decline to 5 percent by 2031. The number of Algerian food-
insecure people is projected to decline by more than half from its 2021 
estimate, from 5.2 million to 2.3 million.
    Considering the economic fallout from the COVID-19 pandemic, and as 
a country that is dependent on petroleum and natural gas exports for 
export earnings, Algeria's GDP contracted by an average of 0.9 percent 
during the 2015-20 period. Over the next decade the country's economy 
is projected to grow by 2.4 percent a year, the lowest anticipated GDP 
growth among the NAF countries. The food gap expressed as a percentage 
of the daily per capita nutritional target of 2,100 kcal is projected 
to decline from 13.4 percent (281.5 kcal) in 2021 to 11.5 percent 
(240.3 kcal) to 2031.
    Egypt in 2021, is estimated to have the highest share and the 
greatest number of food-insecure people in the NAF region. The Egyptian 
GDP per capita in 2021 is estimated at $3,551 and projected to grow at 
an annual rate of 1.7 percent during the next decade. The real domestic 
price of major grains is projected to decline at annual rate of 0.9 
percent over the decade, the smallest decline in the NAF region. 
Reflecting income and price trends over the next decade, the number of 
food-insecure people is projected to decline by \1/3\, to 13.7 million 
by 2031. The prevalence of food insecurity is projected to decline from 
an estimated 18.9 percent of the population in 2021 to 10.7 percent in 
2031. The depth of food insecurity in the country in 2021 is also 
estimated to be the highest in the region, with an average food gap of 
331 kcal per capita per day. By 2031, the daily Calorie food gap is 
projected to decline to 292 kcal but remain the highest in the NAF 
region.
    Morocco is the second most food-secure country in the NAF region, 
with the estimated prevalence of food insecurity estimated at 7.4 
percent of the population in 2021, and it is projected to decline to 
3.5 percent by 2031. Some 2.7 million people are estimated to be food-
insecure in 2021, and over the next decade, this number is anticipated 
to decline by 48 percent. The daily per capita Calorie food gap is 
estimated at 266 kcal in 2021, the second lowest in the NAF region. By 
2031, the per capita per day Calorie food gap is projected to decline 
10.6 percent to 238 kcal.
    Tunisia, a lower middle-income country, is the least food-insecure 
country in the NAF region with an estimated 6 percent of its population 
food-insecure in 2021. By 2031, the prevalence of food insecurity is 
projected to decline to 2.3 percent of the population. The anticipated 
improvement in the country's food security status over the next decade 
is supported by anticipated sustained growth in income and lower food 
prices. Tunisia's GDP per capita is projected to grow from $3,732 to 
$5,144 in the coming decade. The real domestic price of major grains is 
expected to steadily decline at a rate of 2.0 percent a year.

 
 
 
                               References
 
    Food and Agriculture Organization of the United Nations (FAO),
 Global Information and Early Warning System (GIEWS). 2020. GIEWS
 Country Brief--Algeria. June 2013, 2013-2014.
    _______. 2021. Crop Prospects and Food Situation #1, March 2021.
 Rome, Italy.
    _______. 2020. Crop Prospects and Food Situation #4, December 2020.
 Rome
    Food and Agriculture Organization of the United Nations (FAO) and
 World Food Program (WFP). 2020. FAO-WFP early warning analysis of acute
 food insecurity hotspots. FAO-WFP Early Warning Analysis of Acute Food
 Insecurity Hotspots, October.
    Famine Early Warning Systems Network (FEWS NET). 2020. Emergency
 (IPC Phase 4) expected in parts of Tigray in 2021 if access constraints
 persist. 2020-2021. Washington, D.C.
    World Food Programme of the United Nations (WFP). 2018. Draft
 Tunisia country strategic plan (2018-2022). February 2018, 26-28.
    World Bank. 2019. Lesotho Poverty Assessment. Lesotho Poverty
 Assessment. Washington, D.C.
 

Latin America and the Caribbean
    The COVID-19 pandemic's effect on the economies of Latin America 
and the Caribbean (LAC) \15\ region was unprecedented in 2020. The real 
gross domestic product (GDP) contracted by 9.1 percent, making it the 
``worst recession in the region in a century'' (Food and Agriculture 
Organization of the United Nations (FAO) and World Food Programme 
(WFP), 2020). A rebound in economic activity is anticipated to sustain 
2.9 percent growth in real GDP in 2021 and 3.2 percent growth by 2031 
(table 11). However, economic growth for LAC will remain below the 
projections made prior to the global COVID-19 pandemic (USDA, ERS, 
2021). The speed of the economic recovery remains uneven across 
countries--as Bolivia, Dominican Republic, Guatemala, and Honduras 
experienced less pronounced collapses at the height of the crisis in 
2020 than other LAC countries. By contrast, Colombia, Ecuador, El 
Salvador, Haiti, Jamaica, Nicaragua, and Peru suffered large 
contractions--and estimated long-term recovery remains limited through 
2031.
---------------------------------------------------------------------------
    \15\ The countries studied include four Central American countries: 
El Salvador, Guatemala, Honduras, and Nicaragua; three Caribbean 
countries: the Dominican Republic, Haiti, and Jamaica; and four South 
American countries: Bolivia, Colombia, Ecuador, and Peru.

                                                    Table 11
       Inflation adjusted per capita income for the Latin America and the Caribbean region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                2019 (pre-COVID-19)           2021                  2031
                                              ------------------------------------------------------------------
                                                                      Dollars (2015 U.S.)
----------------------------------------------------------------------------------------------------------------
                                       Latin America and t5,395ribbean           4,936                 6,222
  Central America and the Caribbean..........             3,935                  3,789                 4,831
  South America..............................             5,395                  5,602                 7,041
----------------------------------------------------------------------------------------------------------------
Source: USDA, Economic Research Service International Macroeconomic Dataset.

    To counter the effects of COVID-related restrictions, all countries 
in LAC--as was the case for various other countries around the globe--
implemented several comprehensive policy responses to support 
households' and businesses' incomes. These fiscal support expenditures 
have included subsidies, grants, loans, guarantees, and forgone tax 
revenue. In 2020, the emergency fiscal support granted by all 11 LAC 
countries amounted to about 5.0 percent of GDP, on average 
(International Monetary Fund (IMF), 2021). Although these fiscal 
measures have successfully mitigated some of the COVID-19 impacts on 
the most vulnerable, the pandemic has exacerbated the structural 
problems the LAC region has historically suffered from, including 
narrow fiscal space, high inequality, limited social protection, a high 
degree of labor informality, and high prevalence of food insecurity.
    The current food-security assessment estimates 25.6 percent of the 
LAC population is food-insecure in 2021, 4.5 percentage points higher 
than in 2020 (table 12 and figure 7). The estimated prevalence of food 
insecurity during 2021 ranged from 11.2 percent in the Dominican 
Republic to 65.2 percent in Haiti. Food-insecurity levels and rates 
differ across countries in the LAC region due to their populations, 
economic conditions, and policies. The population of the LAC region in 
2021 is estimated at nearly 175 million and is projected to reach to 
191 million by 2031. The average population growth rate for LAC 
countries is projected to decline from 1.1 percent during 2015-2020, to 
0.9 percent from 2021 to 2031. Slowing population growth is associated 
with rising incomes, literacy rates, and life expectancy--all of which 
tend to lower birth rates.

                                                    Table 12
                   Food security indicators for Latin America and the Caribbean, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                24.4               37.0               61.4               20.1               41.3
          2031                11.7               23.6               35.3               27.1                8.2
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Latin America and the Caribbean indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Latin Ame174.8and the Car191.0n           44.7            23.5            25.6            12.3             345             284          2,236          1,152
  Central America and the Caribbean        64.2            70.8            20.5            13.6            32.0            19.2             376             315          1,261            833
  South America....................       110.6           120.2            24.2             9.9            21.8             8.3             290             229            975            320
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

Figure 7
Latin America and the Caribbean: Change in the number of food-insecure 
        people in 2021, from 2020
Change in the number of food-insecure population


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

    Across LAC countries, population growth rates vary inversely with 
per capita income. Colombia, Dominican Republic, and Peru all have 
relatively higher incomes and are projected to have an annual 
population growth rate near 0.7 during 2021-2031 (table 12). Lower 
income countries, including Guatemala (1.4 percent), Bolivia (1.3 
percent), Ecuador (one percent), and Nicaragua (0.8 percent) have 
higher projected annual population growth rates. Population growth 
rates in Haiti and Honduras, two countries with the lowest income in 
the LAC region, are projected to average 1.1 percent of growth per year 
during 2021-2031. In El Salvador, population growth for 2021-2031 is at 
its lowest level (0.23 percent) because of the country's continued 
emigration rates. In most all cases, population growth is projected to 
slow during 2021-2031, compared to previous decades. The exception is 
Jamaica, where population is projected to continue to decline.
    The COVID-19 pandemic has resulted in an erosion in income levels. 
LAC's real income per capita growth for the 2021-2031 period is 
projected to reach 2.3 percent per year, an improvement over the 0.9 
decline in per capita GDP experienced in 2015-2020. Colombia, Dominican 
Republic, and Peru are all expected to drive much of the aggregate per 
capita GDP growth in the LAC region. Growth in Colombia and Peru is 
supported by fiscal spending and exports. On the aggregate for the 
region, per capita income increases from $4,936 in 2021 to $6,222 in 
2031 (table 11). Despite the positive impact from fiscal packages and 
other measures implemented to boost economic activity, LAC's income per 
capita will remain below pre-COVID-19 levels until 2025, returning to 
its long-term trend levels through 2031.
    The pandemic has dramatically increased food insecurity in the LAC 
region in 2021, compared to 2020. This situation is reflected in the 
region's increased share of the food-insecure people among all four 
regions in 2021 and the region's increase in its food-insecure 
population. In 2021, the LAC region accounts for more than \1/4\ (25.6 
percent) of global food-insecure people, slightly below Asia's global 
share (26.2 percent), but nearly double that of North Africa's (14.5 
percent).
    In 2021, the number of people in the LAC region estimated to have 
consumed less than the per capita daily recommended caloric target of 
2,100 kcal is 44.7 million (table 12). Stricter lockdowns and high 
levels of informal employment impact economic activity and per-capita 
incomes. This situation--compounded by the resurgence of inflation--
changes the sustained food security gains of past years. As a result of 
the pandemic, an additional 2.4 million LAC people are estimated to be 
food-insecure in 2021--which represents about a 6.0 percent increase 
from the 2020 estimate. Food insecurity in the LAC region is also 
aggravated by the almost 9.6 million Venezuelans who emigrated within 
the region--principally to neighboring Colombia (3.3 million), Ecuador 
(2 million), and Peru (4.3 million)--and are disproportionally affected 
by unemployment and the lack of access to food safety nets (FAO and 
WFP, 2020).
    Looking ahead, as the LAC economies recover from the COVID-19 
induced economic recession, all 11 countries in the region improve 
their food availability during the next decade. Rising per capita 
demand for diversified diets and protein support increases in LAC's 
food grain demand, which rises from 24.4 million tons in 2021 to 29.4 
million tons in 2031 (table 12). Demand for grain for other uses 
(including feed use and seed use) is projected to increase from 21.9 
million tons in 2021 to 29 million tons by 2031. The combined grain 
demand (food and other uses) is projected to increase from 46.3 million 
tons in 2021 to 58.3 million tons in 2031. As a result of the strong 
demand growth, the production of grains is expected to increase from an 
estimate of 20.1 million tons in 2021, to 29.4 million tons in 2031. 
The projected difference between overall demand and domestic production 
is anticipated to grow by 2.8 million tons to 29 million tons by 2031.
    Under this scenario, on a regional basis, the food gap--the 
difference between estimated consumption and the nutritional target of 
2,100 kcal--is estimated at 345 kcal per capita, per day in 2021.But 
this figure is projected to decrease to 284 kcal per capita, per day by 
2031 (table 12).

 
 
 
                               References
 
    Food and Agriculture Organization and World Food Programme. 2020.
 FAO and WFP early warning analysis of acute food insecurity hotspots,
 October 2020. Rome, Italy.
    International Monetary Fund. 2021. International Financial
 Statistics, Washington, D.C.
    U.S. Department of Agriculture, Economic Research Service (USDA,
 ERS).2021. International Macroeconomic Data Set, Washington, D.C.
 

Central America and the Caribbean (CAC)
    The Dominican Republic has a population of 10.6 million in 2021, 
which is projected to rise to 11.5 million by 2031 (table 13). Results 
from the food security assessment model indicate that, in 2021, 11.2 
percent of the country's population is estimated to be food-insecure, 
or less than half the LAC's regional average of 25.6 percent of food-
insecure people. The Dominican Republic is estimated to have 1.2 
million food-insecure people in 2021, a number projected to fall to 
just 0.3 million food-insecure people in 2031. Results in this study 
indicate that the Dominican Republic has the lowest estimated food gap 
in the LAC region, with 227 kcal per capita, per day. The daily per 
capita calorie gap is projected to decline to 179 kcal by 2031.

                                                    Table 13
                   Food security indicators for Latin America and the Caribbean, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                 8.4               13.1               21.5                5.8               15.6
          2031                10.1               18.1               28.3                8.0               20.3
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Central America and the Caribbean indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Central America and the Caribbean          64.2            70.8            20.5            13.6            32.0            19.2             376             315          1,261            833
  Dominican Republic...............        10.6            11.5             1.2             0.3            11.2             2.4             227             179             39              7
  El Salvador......................         6.5             6.7             1.5             0.8            22.9            11.4             290             246             49             21
  Guatemala........................        17.4            20.1             5.2             3.0            29.8            15.1             356             297            211            103
  Haiti............................        11.2            12.5             7.3             6.7            65.2            53.7             753             673            722            593
  Honduras.........................         9.4            10.4             2.4             1.1            25.9            10.4             341             274             93             33
  Jamaica..........................         2.8             2.7             0.4             0.1            15.6             2.8             235             175             13              2
  Nicaragua........................         6.3             6.8             2.5             1.6            39.6            23.6             428             361            134             73
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    The economy of the Dominican Republic is largely reliant on the 
service and tourism sectors and, as a result, its economy was severely 
impacted by the COVID-19 pandemic in 2020. After contracting 4.7 
percent in 2020, economic activity is projected to recover to 3.3 
percent growth in 2021. Annual GDP growth is projected to average 4.2 
percent in the next decade, the highest anticipated economic growth in 
the region. GDP per capita income in the Dominican Republic is also the 
highest in the region, estimated at $8,295 in 2021 and is projected to 
grow to $11,571 in 2031. Unfavorable weather conditions in the 
Dominican Republic in 2020 led to a reduction in the area of planted 
rice--a key component of the Dominican diet--and lower yields, which 
aggravated the food security situation. However, with improved weather 
and yields in 2021, rice production and consumption are projected to 
resume their normal growth rate (FAO, 2020; USDA, FAS, 2021a).
    El Salvador, with a total population of 6.5 million, is the only 
country in the region where the population growth rate is projected to 
decline between 2021 and 2031 (which reflects emigration rates). In 
2021, 22.9 percent of the population is estimated to be food-insecure 
(table 13). However, this number is anticipated to decline by 50.1 
percent, to 11.4 percent by 2031. Food consumption levels in El 
Salvador have worsened since the pandemic, with the number of food-
insecure people estimated at 1.5 million in 2021, a seven percent 
increase from the 2020 estimate. The number of food-insecure people, 
however, is projected to fall to about 800,000 by 2031. The daily per 
capita Calorie food gap in El Salvador is projected to fall from 290 
kcal in 2021 to 246 kcal by 2031.
    Annual GDP per capita growth through the next 10 years is projected 
to be 1.5 percent, which is an improvement over the 2015-2020 period, 
when per capita income declined 0.5 percent. GDP per capita in El 
Salvador in 2021 is estimated at $3,758 in 2021 and projected to 
increase to $4,354 by 2031.
    During the COVID-19 pandemic, El Salvador's economy experienced a 
decline in export and tourism revenues. However, this decline was 
compensated with larger flows of family remittances. Moreover, the El 
Salvadorian Government provided fiscal support to low-income 
households. Family remittances contributed the most to support incomes 
and totaled $4.8 billion in 2020. The torrential rains from hurricanes 
Eta and Iota affected cereal and bean crops in El Salvador. However, 
the adverse effects in El Salvador were not as severe as the effects 
experienced in Nicaragua, Honduras, and Guatemala, where food and 
commercial crops and livestock productions suffered devastating losses. 
The reduction in agricultural production--further hindered by the lack 
of operational credit--led to high food inflation, further aggravating 
food insecurity (Economic Commission for Latin America and the 
Caribbean (ECLAC), 2020).
    Guatemala is the largest economy and most populous country in the 
CAC region. With 17.4 million people in 2021, Guatemala's population is 
projected to increase by 2.7 million by 2031 (table 13). The country's 
annual population growth rate is estimated at 1.4 percent between 2021 
and 2031, compared to 1.8 percent annual growth during 2015 and 2020. 
Indigenous people make up more than half of Guatemala's population and 
are disproportionally affected by persistent income inequality and 
poverty (World Bank, 2021). In 2021, 29.8 percent of Guatemala's 
population is considered food-insecure, but the prevalence of food 
insecurity is projected to fall to 15.1 percent by 2031. The number of 
food-insecure people in Guatemala is estimated to have increased by 2.0 
percent from 2020, to 5.2 million people in 2021. The number of food-
insecure people, however, is projected to fall to 3 million people by 
2031. The daily per capita Calorie food gap in Guatemala is anticipated 
to decline moderately over the decade, from 356 kcal in 2021 to 297 
kcal by 2031.
    Although Guatemala is the largest economy in Central America, it is 
also the fifth poorest economy in the LAC region. Guatemala's GDP per 
capita is estimated at $4,104 in 2021 and projected to increase to 
$4,987 by 2031--equivalent to a 2.0 percent annual growth in per capita 
income over the next decade, compared to the 0.3 percent annual growth 
in income during the 2015-2020 period. The COVID-19 pandemic impacted 
the Guatemalan economy considerably, contracting 2.4 percent in 2020. 
In 2021, Guatemala is projected to experience a 4 percent increase in 
economic recovery and the county's longer-term growth is projected at 
3.5 percent in 2031 (USDA, ERS, 2021). Prior to the pandemic, Guatemala 
experienced economic stability and relatively higher real GDP growth 
rates, compared to neighboring economies. This economic stability was 
anchored by conservative fiscal management, inflation targeting, and a 
managed floating exchange rate (World Bank, 2021). The COVID-19 
lockdown measures resulted in falling demand, disruptions to supply 
chains, and lower fiscal revenues. The government has been able to 
provide fiscal support, to expand social programs for families, and to 
supplement family remittances.
    Agriculture is one of Guatemala's largest economic sectors, and the 
participation of multinational companies in the sector ensured less 
disruption to supply chains during the pandemic. The impact of 
Hurricanes Eta and Iota, which made landfall in neighboring Nicaragua 
and caused heavy rainfall, damaged bean and cereal crops, as well as 
coffee and sugarcane plantations. Although the damage was less 
extensive than in Nicaragua and Honduras, substantial crop losses 
aggravated the food insecurity situation, particularly in rural areas 
of the country (FAO, 2020).
    Haiti is estimated to have the highest share of food-insecure 
people in the LAC region (table 13). Since 2019, Haiti has been named 
among the 10 countries experiencing acute food crises in the world (FAO 
and WFP, 2020). Of the 11.2 million people in Haiti, 65.2 percent are 
estimated to be food-insecure in 2021. The prevalence of food 
insecurity in Haiti is 39.6 percentage points higher than the regional 
average of 25.6 percent. Over the next 10 years, Haiti is projected to 
make the least progress in terms of its food security metrics, despite 
an anticipated drop in the prevalence of food insecurity to 53.7 
percent by 2031.
    About 7.3 million people in Haiti are estimated to be food-insecure 
in 2021 and this figure is projected to decline to 6.7 million by 2031. 
Haiti also has the highest estimated per capita Calorie food gap in the 
LAC region, estimated at 753 kcal per capita per day. By 2031, Haiti's 
food gap is projected to fall 10.6 percent to 673 kcal per capita, per 
day.
    Haiti's GDP per capita in 2021 is estimated at $761 in 2021 and is 
projected to increase to $832 by 2031, equivalent to a 0.9 percent 
annual growth in per capita income, reversing the 1.8 percent annual 
decline in income in the 2015-2020 period. Although Haiti produces 
small quantities of food for domestic consumption, the combination of 
irregular rains and low agricultural productivity constrain the 
country's ability to supply a greater share of its own food.
    Haiti has been facing challenging macroeconomic conditions since 
2019, as real GDP contracted 0.9 percent. The economic recession was 
further complicated by the COVID-19 pandemic and--in 2020--GDP 
contracted for a second year in a row, by more than 4.4 percent. Since 
2020, the economy has been sustained by an increase in the flow of 
family remittances (FAO, 2020). Despite dire fiscal conditions, the 
government was able to provide cash transfers and food assistance to 
some of the most vulnerable, which partly helped alleviate the food 
insecurity condition in Haiti.
    Honduras--with more than 9.4 million people--is Central America's 
second most populous country, after Guatemala (table 13). In 2021, 
Honduras is estimated to have 26 percent of its population experiencing 
food insecurity, which is similar to the LAC regional average. The 
prevalence of food insecurity in 2031 is projected to fall by 60.0 
percent to 10.4 percent, surpassing the regional average reduction of 
51.8 percent. About 2.4 million people are estimated to be food-
insecure in 2021, which is projected to decline to 1.1 million by 2031. 
Honduras also has the third highest daily per-capita Calorie food gap 
in the region, estimated at 341 kcal per capita per day in 2021. By 
2031, the food gap in Honduras is projected to fall by 19.6 percent to 
274 kcal per capita, per day.
    Honduras was the only country among the four Central American 
countries included in IFSA to register the highest sustained economic 
growth for the past decade and be above the LAC regional average. The 
economy of Honduras is projected to sustain an annual 3.7 percent GDP 
growth in the 2021-2031 period, well above the LAC average of 3.3 
percent growth for the region. However, Honduras faces high levels of 
poverty and inequality, and the COVID-19 pandemic aggravated the 
situation of the most vulnerable. As a result of the pandemic-related 
declines in trade, investment, and consumption--further aggravated by a 
fall in family remittances--real GDP fell 3.7 percent in 2020. In 2021, 
the economy in Honduras is projected to rebound to 2.5 percent annual 
GDP growth.
    GDP per capita is projected to grow annually by 2.5 percent in the 
2021-2031 period, a much higher rate than the 0.9 percent annual growth 
in GDP per capita in the 2015-2020 period. Honduras was able to 
authorize new borrowing from the World Bank for $2.5 billion, 
equivalent to ten percent of the country's GDP (World Development 
Indicators (WDI), 2021), to support households and businesses in order 
to counteract the pandemic's impact. The economy of Honduras is based 
mostly on agriculture, accounting for about 15.0 percent of the 
country's GDP (World Bank, 2021). Honduras is a leading exporter of 
coffee and bananas. In recent years, agricultural diversification has 
led to increased plantings of sugarcane, horticultural crops, 
pineapples, palm oil, and aviculture production. In late 2020, 
Hurricanes Eta and Iota severely affected agricultural production in 
Honduras, causing substantial crop losses, particularly bean crops, 
coffee and palm oil plantations, as well as horticulture crops, further 
aggravating the food security situation in the country.
    Jamaica, with 2.8 million people, is the Caribbean and Central 
America's tenth most populous country. In 2021, Jamaica is estimated to 
have 15.6 percent of its population experiencing food insecurity, to 
represent the third least food-insecure country in the LAC region 
(after Colombia and the Dominican Republic) (table 13). The important 
tourism sector--which contributes about 35.0 percent to GDP income--was 
significantly impacted by pandemic-related border closures. Economic 
activity contracted 7.2 percent. However, the contraction was less than 
what would have been expected, had it not been for Jamaica's strong 
fiscal position at the beginning of the pandemic, which allowed the 
economy to provide an additional fiscal stimulus in 2020 (equivalent to 
1.2 percent of GDP). As the economy reopens and tourism restarts, the 
economy is expected to recover in 2021-22 and maintain sustained growth 
of 2.5 percent through 2031.
    Jamaica is expected to make the most progress in its food security 
status over the next decade. From the estimated 15.6 percent in 2021, 
the prevalence of food insecurity is projected to decline by 81.9 
percent--the highest decline in the region--to 2.8 percent by 2031. The 
daily per capita Calorie food gap in Jamaica is among the lowest in the 
world and the second lowest in the LAC region, after the Dominican 
Republic, estimated at 235 kcal for 2021. By 2031, the food gap is 
projected to drop by nearly 26 percent to 175 kcal per capita per day, 
the highest reduction in the LAC region.
    Nicaragua--with 6.3 million people--is Central America's smallest 
economy and 40 percent of Nicaragua's population is estimated to be 
food-insecure in 2021 (table 13). The prevalence of food insecurity in 
2031 is projected to decline 40.4 percent, to 24 percent. About 2.5 
million people are estimated to be food-insecure in 2021, which is 
projected to decline to 1.6 million people by 2031. In addition, 
Nicaragua has the highest daily Calorie per capita food gap in the 
region. With the Calorie food deficit of 428 kcal per capita per day in 
2021. By 2031, Nicaragua's food gap is projected to fall 15.7 percent 
to 361 kcal per capita per day.
    The COVID-19 pandemic crisis impacted both GDP per capita and 
remittance inflows, significantly reduced trade and tourism, and 
disrupted food distribution. Nicaragua's economy, which has been 
experiencing a recession since 2018, registered an 8.2 percent decline 
in 2020. Nicaragua's economy is projected to recover in 2021, with GDP 
growth of 3.9 percent. GDP per capita is projected to grow annually by 
2.2 percent in the 2021-2031 period, a recovery from the 2.5 percent 
decline in per-capita income in the 2015-2020 period.
    Nicaragua's economy is primarily driven by the agricultural sector. 
The landfall of Hurricanes Eta and Iota in late 2020, resulted in 
flooding and landslides that were responsible for severe damage to an 
estimated 80.0 percent of standing crops and Nicaragua's agricultural 
infrastructure. Farmers reported significant losses of food grains and 
legumes, coffee, sugarcane, fruits, vegetables, and grazing areas for 
livestock. These loses threaten the country's food security situation 
and the prospects for exports. Both hurricanes also destroyed homes, 
roads, bridges, and communications infrastructure.

 
 
 
                               References
 
    Economic Commission for Latin America and the Caribbean (ECLAC).
 2020. Preliminary Overview of the Economies of Latin America and the
 Caribbean, (LC/PUB.2020/17-P), Santiago, Chile
    Food and Agriculture Organization of the United Nations and World
 Food Programme (WFP). 2020. FAO and WFP early warning analysis of acute
 food insecurity hotspots, October. Rome, Italy.
    Food and Agriculture Organization of the United Nations (FAO),
 Global Information Early Warning Systems (GIEWS). 2020. Crop Prospects
 and Food Situation, Quarterly Global Report No. 4, December 2020. Rome,
 Italy.
    International Macroeconomic Data Set, Washington, D.C., U.S.
 Department of Agriculture, Economic Research Service (USDA, ERS). 2021.
    Attache Report, U.S. Department of Agriculture, Foreign Agriculture
 Service (USDA, FAS, 2021a), GAIN DR2021-0005.
    World Bank. 2021. World Development Indicators, Washington, D.C.
 

South America (SA)
    Bolivia is the second highest food-insecure country in the LAC 
region--after Haiti--and the most food-insecure among the South 
American countries considered in this assessment (table 14). Bolivia 
was also the country in the LAC region most affected by the pandemic as 
measured by the high prevalence of food insecurity in 2021, which was 
estimated at 45.0 percent. The South American countries saw an increase 
of 1.2 million food-insecure people in 2021, compared to a year 
earlier. The prevalence of food insecurity in Bolivia is projected to 
decline to 19.7 percent by 2031, 25.3 percentage points lower than in 
2021, the sharpest decline in the South American sub-region. The daily 
per capita Calorie food gap is projected to fall from 343 kcal in 2021 
to 259 kcal by 2031.

                                                    Table 14
                    Food security indicators for the South America sub-region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                16.0               22.0               38.0               14.3               23.7
          2031                19.2               29.7               48.9               21.3               27.5
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

South America indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                    South America         110.6           120.2            24.2             9.9            21.8             8.3             290             229            975            320
  Bolivia..........................        11.8            13.4             5.3             2.6            45.0            19.7             343             259            239             90
  Colombia.........................        49.5            53.3             6.3             1.6            12.6             3.0             260             205            235             47
  Ecuador..........................        17.1            18.9             4.7             2.4            27.7            12.8             264             216            175             73
  Peru.............................        32.2            34.6             7.8             3.3            24.4             9.5             295             237            326            110
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    The COVID-19 pandemic affected both GDP per capita and remittances. 
However, with an anticipated economic recovery GDP per capita is 
projected to grow annually by 1.9 percent during the 2021-2031 period, 
a much higher rate than the 0.2 percent annual growth in GDP per capita 
in the 2015-2020 period. Bolivia is one of the few countries in the 
region able to sharply increase its fiscal expenditures to counteract 
the effects of the pandemic, which supported sustained economic 
activity. While food prices remained stable during most of 2020, 
emerging food supply problems in 2021 are projected to lead to rising 
food prices in the longer term. As a result, food prices are projected 
to increase rapidly (5.5 percent annually) over the 2021-2031 period.
    Colombia is the most populous country of the LAC countries covered 
in IFSA, with 49.5 million people in 2021 (table 14). By 2031, the 
country is projected to gain an additional 3.7 million people to reach 
a population of 53.3 million people. A large share of the projected 
population increase is driven by more than 3 million migrants from 
Venezuela who were granted residence status in 2021. In 2021, Colombia 
accounts for the third highest number of food-insecure people (6.3 
million) in the region, and the prevalence of food insecurity is 
estimated at 12.6 percent, significantly below the regional average for 
LAC of 25.6 percent. By 2031, Colombia is projected to have 3.0 percent 
of its population considered food-insecure. The daily per capita 
Calorie food gap is projected to fall from 260 kcal in 2021 to 205 kcal 
by 2031.
    Although Colombia has experienced many economic crises and the 
country's history is punctuated by economic volatility, the recession 
arising from the COVID-19 pandemic and subsequent lockdowns has been 
labeled the country's worst in decades. As a result, in 2020, the 
pandemic-related recession shrank Colombia's GDP by 9.5 percent. Ample 
fiscal measures (geared to support the most vulnerable households and 
businesses) were successful in softening the impact of the drastic 
reduction in economic activity. The Colombian economy is projected to 
recover in 2021, with GDP growth anticipated to reach 2.8 percent. This 
growth rate is projected to be generated from an expansion in public 
spending, a faster pace of economic activity, and reduced unemployment. 
Although oil prices are projected to remain below pre-pandemic levels, 
after 2021, export revenues are anticipated to be boosted by a recovery 
in external markets, higher projected oil prices, and a heightened 
import demand from major trading partners. Colombia's economy is 
estimated to sustain 3.2 percent real GDP annual growth over the next 
decade (USDA, ERS, 2021).
    Colombia is a significant agricultural producer and exporter. 
Unlike other sectors, the agricultural sector was less impacted by the 
pandemic and had recorded positive growth for 2020. Although food 
production faced fewer operational restrictions, the marketing and 
distribution of food was significantly impaired by extended lockdowns 
to contain the pandemic. A large depreciation of Colombia's currency 
and the increased price of coffee--the country's principal export--
boosted export revenues. Colombia's daily per capita Calorie food gap 
is projected to substantially shrink from 260 kcal in 2021 to 205 kcal 
in 2031, as the country continues to improve food production and 
distribution.
    Ecuador is the third most populous country among the South American 
countries included in IFSA, with 28 percent of its population (17 
million people) estimated to be food-insecure in 2021 (table 14). By 
2031, Ecuador is expected to see a reduction of 53.7 percent in food 
insecurity prevalence, to nearly 12.8 percent of the population--which 
is projected to be driven by anticipated increases in GDP per capita, 
higher export revenues, and increased food production. Agriculture has 
traditionally employed a large proportion of the population in the 
production of subsistence food crops--including food grains, potatoes, 
beans, and cassava. Commercial production of tropical crops (such as 
coffee, cacao, and bananas) provide Ecuador with foreign exchange to 
buy rice and wheat imports. Ecuador has a daily per capita Calorie food 
gap of 264 kcal, which is projected to see a moderate decline to 216 
kcal by 2031.
    Ecuador derives an important share of its GDP from crude oil 
exports. The recent slump in oil and energy prices have considerably 
affected Ecuador's economy--as was the case for other countries like 
Colombia and Bolivia--who also depend on energy exports. In all three 
countries, negative terms-of-trade for energy products hampered 
economic growth in 2020. Ecuador (which was facing economic challenges 
before the pandemic and with less room to increase fiscal 
expenditures), suffered large contractions in economic activity 
compared to other countries in the South American region. Over the next 
10 years (2021-31), per capita GDP is projected to grow 1.4 percent a 
year, the second slowest growth rate in the LAC region and comparable 
to Haiti.
    Peru is classified by the World Bank as a middle-income country. 
Agricultural production in Peru has been hindered in the near term by 
low market prices, which has resulted in reduced 2021 plantings (FAO, 
2021). However, with an anticipated increase in production over the 
medium term, food insecurity is estimated to drop significantly--also 
reducing the number of food-insecure people from 7.8 million in 2021 to 
just over 3.3 million in 2031 (table 14). With a total population of 32 
million in 2021, Peru is estimated to have 24 percent of its population 
considered food-insecure in 2021. By 2031, the prevalence of food 
insecurity will drop by 60.9 percent to 9.5 percent. The daily per 
capita Calorie food gap is projected to fall from 295 kcal in 2021 to 
237 kcal by 2031.
    In the LAC region, Peru experienced the largest economic decline by 
the COVID-19 induced recession. After contracting more than 14.0 
percent during 2020, GDP growth is projected to recover to 3.5 percent 
in 2021, with a sustained annual growth of 3.1 percent through 2031. As 
a result, GDP per capita is projected to annually increase 2.5 percent 
during the 2021-2031 period, compared to a 1.6 percent decline in the 
2015-2020 period. Peru had better economic fundamentals than all other 
countries in the LAC region, which allowed for an unprecedented 
expansion of fiscal and monetary transfers to counter the effects of 
strict lockdowns, which lasted for several months and resulted in 
massive job losses. The depreciation of the currency also helped 
increase foreign exchange revenues from agricultural exports.

 
 
 
                               References
 
    Food and Agriculture Organization of the United Nations (FAO) and
 World Food Programme (WFP). 2020. FAO and WFP early warning analysis of
 acute food insecurity hotspots, October. Rome, Italy.
    Food and Agriculture Organization of the United Nations (FAO). 2020.
 Crop Prospects and Food Situation, Quarterly Global Report No. 4,
 December 2020. Rome, Italy.
    International Macroeconomic Data Set, U.S. Department of
 Agriculture, Economic Research Service (USDA, ERS). 2021, Washington,
 D.C.
    World Bank. 2021. World Development Indicators, Washington, D.C.
 

Asia
    In 2021, food security of the Asian countries covered by the 
assessment is anticipated to deteriorate further from 2020. In the Asia 
region, the main driver for the estimated increase in food insecurity 
is incomes that remain below their pre-pandemic levels (table 15). The 
COVID-19 pandemic caused significant income losses and reduced 
remittances, resulting in the deterioration of food-security for a 
large segment of the population (Food and Agriculture Organization of 
the United Nations (FAO), 2020). In 2020, GDP in Asia declined by more 
than 5.0 percent and the decline in per capita income was more than 
double at 10.6 percent (Baquedano, et al., 2021). While robust growth 
for GDP per capita (4.0 percent) in 2021 is anticipated for most 
countries in the region, in absolute terms income will be 2.5 percent 
lower than in 2019 for most countries.

                                                    Table 15
                     Inflation adjusted per capita income for the Asia region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                2019 (pre-COVID-19)           2021                  2031
                                              ------------------------------------------------------------------
                                                                      Dollars (2015 U.S.)
----------------------------------------------------------------------------------------------------------------
                                   Asia                   2,279                  2,221                 3,400
  Commonwealth of Independent States.........             3,591                  3,502                 4,584
  Central and Southern Asia..................             1,923                  1,861                 2,914
  Other Asia.................................             1,092                  1,068                 1,233
  South East Asia............................             3,516                  3,484                 5,304
----------------------------------------------------------------------------------------------------------------
Source: USDA, Economic Research Service International Macroeconomic Dataset.

    In 2021, the Asia region is estimated to have 647 million people 
(26.4 percent of its population) considered food-insecure, the most of 
any region (table 16). The Central and South Asia (CSA) sub-region, 
which includes India, accounts for 78.6 percent of the food-insecure 
population in the Asia region. In 2021, the number of food-insecure 
people within the Asia region is estimated to have increased by 48.0 
percent from 2020,16 a year that also saw a sharp increase in the 
region's food-insecurity metrics after the onset of the COVID-19 
pandemic (figure 8).

                                                    Table 16
                             Food security indicators for Asia region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021               481.0              163.4              644.4              546.5               97.9
          2031               618.2              208.8              827.0              668.6              158.4
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Asia indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             Asia        2,470.8         2,731.4          647.3           175.7            26.2             6.4             304             231          28,285         6,992
  Commonwealth of Independent......         73.0            77.3           10.1             4.7            13.8             6.1             244             187             414           202
    States.........................
  Central and Southern Asia........      1,834.1         2,039.9          508.9           107.3            27.7             5.3             315             229          20,889         3,505
  Other Asia.......................         59.6            66.3           42.8            39.0            71.9            58.7             457             375           3,109         2,372
  South East Asia..................        504.1           547.7           85.5            24.7            17.0             4.5             296             220           3,873           912
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

Figure 8
Asia, change in the number of food-insecure people from 2020 to 2021
Change in the number of food-insecure population


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

    By 2031--driven by an expectation for sustained economic growth 
(5.4 percent annually) coupled with low population growth rates (1.0 
percent annually)--the Asia region is projected to see a 75.4 percent 
reduction in its prevalence of food insecurity to 6.4 percent, and the 
number of food-insecure people is anticipated to decline to less than 
176 million (table 16). Moreover, the per capita daily Calorie food 
gap--the difference between estimated consumption and a nutritional 
target of 2,100 kcal--is projected to decline by 23.9 percent, from 304 
kcal in 2021 to 231 kcal in 2031. Most of the food security 
improvements over the next decade are driven by trends in the CSA sub-
region, where the number of food-insecure people is projected to 
decline by 78.9 percent over the next decade, to less than 108 million. 
Moreover, the CSA's prevalence of food insecurity is anticipated to 
decline by 81.0 percent to 5.3 percent. By contrast, Other Asia (OA), 
which includes North Korea and Yemen, is projected to make little 
progress in its food insecurity metrics over the next decade. By 2031, 
OA is anticipated to reduce the prevalence of food insecurity by 18.3 
percent (to 58.7 percent of the total population) and the number of 
food-insecure people by 9.0 percent (to less than 43 million people).
    Because of productivity gains for most countries, Asia has 
experienced strong growth in grain output. In 2020, Asia recorded a 1.6 
percent growth in grain production, and early prospects are favorable 
for 2021 (FAO, 2020). Grain production over the next decade is 
projected to annually grow by 2.0 percent (table 16). By contrast, the 
total demand for grains--both for food and other uses, including feed--
will grow at a rate of 2.5 percent a year. The anticipated stronger 
growth in total grain demand will increase the region's implied 
additional supply requirements (accounting for both the need of stocks 
and imports) by almost 62.0 percent over the next decade.

 
 
 
                               References
 
    Baquedano, F., Zereyesus, Y.A., Christensen, C., and Valdes, C.
 2021. COVID-19 Working Paper: International Food Security Assessment,
 2020-2030: COVID-19 Update and Impacts on Food Insecurity. COVID-19
 Working Paper #AP-087, U.S. Department of Agriculture, Economic
 Research Service.
    Food and Agriculture Organization of the United Nations (FAO). 2020.
 Crop Prospects and Food Situation #4, December 2020. Rome, Italy.
 

Commonwealth of Independent States (CIS)
    In 2021, the CIS is estimated to be the most food-secure sub-region 
in Asia. The number of food-insecure people is estimated at 10.1 
million, or 13.8 percent of the CIS population (table 17). Relative to 
2020, it is estimated that the CIS sub-region may see an increase of 
27.6 percent in the number of food-insecure people. The increase (in 
the estimated number of food-insecure people) mainly reflects incomes 
that are 2.5 percent lower than their 2019 levels. Tajikistan accounts 
for close to half of the population estimated to be food-insecure in 
the CIS sub-region. Tajikistan is also estimated to have the highest 
rate of food insecurity (53.6 percent of the population) in the sub-
region. The pandemic-related global economic slowdown resulted in a 
strong decline in prices for the sub-region's main commodity exports--
particularly energy products--and resulted in a decline of 4.0 percent 
in GDP in 2020. Although economic activity is expected to recover in 
2021, the effects of the COVID-19 pandemic will linger, with both GDP 
and GDP per capita anticipated to remain below the 2019 levels.

                                                    Table 17
          Food security indicators for the Commonwealth of Independent States sub-region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                13.5               23.8               37.3               21.0               16.3
          2031                16.2               31.8               48.1               33.0               15.1
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Commonwealth of Independent States indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Population
                                           Population food-insecure
                                           Share of population food-
                                                   insecure
                                             Food gap (per capita)
                                              Food gap (total) *
                                       ---------------------------------------------------------------------------------------------------------------------------------------------------------
                                             2021            2031            2021            2031            2021           2031           2021           2031           2021           2031
                                       ---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Millions
                                                   Millions
                                                    Percent
                                               Kilo-calories/day
                                               1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Commonwealth of Independent States          73.0            77.3            10.1             4.7            13.8            6.1            244            187            414            202
  Armenia.............................         3.0             2.9             0.1             0.0             4.8            0.2            189            137              3              0
  Azerbaijan..........................        10.3            10.8             0.4             0.1             4.3            0.6            170            135              9              1
  Georgia.............................         4.9             4.9             0.5             0.1            10.8            1.7            234            178             16              2
  Kyrgyzstan..........................         6.0             6.5             1.1             0.4            18.3            5.6            263            209             37             10
  Moldova.............................         3.3             2.9             0.8            0.04            24.3            1.2            243            146             26              1
  Tajikistan..........................         9.0            10.2             4.8             3.9            53.6           38.2            442            378            265            183
  Turkmenistan........................         5.6             6.1             0.4             0.1             7.6            1.0            212            162             12              1
  Uzbekistan..........................        30.8            33.0             1.8             0.2             5.9            0.7            195            150             46              4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    By 2031, the prevalence of food insecurity (6.1 percent of the 
population) and the number of food-insecure people (4.7 million) in the 
CIS sub-region is projected to decline by more than half (table 17). 
The anticipated improvement in the sub-region's food security metrics 
over the decade are linked to a projected acceleration in income 
growth. During the 2021-2031 period, GDP per capita is projected to 
grow at an annual rate of 4.6 percent, almost double the rate of the 
2015-2020 period. By 2031, the per capita daily Calorie food gap is 
projected to decline by 23.3 percent, from 244 kcal in 2021 to 187 kcal 
in 2031. However, relative to the sub-regional food security trends 
over the coming decade, Tajikistan is anticipated to make the least 
progress in absolute terms (i.e., number of food-insecure people) and 
relative terms (i.e., prevalence of food insecurity). Over the coming 
decade, Tajikistan's population growth rate (1.3 percent a year) is 
projected to be more than double the CIS average (0.6 percent a year), 
resulting in GDP per capita growth that is less than half the regional 
average--1.2 percent a year for Tajikistan, versus 2.7 percent a year 
for the CIS sub-region).
    The CIS sub-region is a large producer and exporter of grains, 
particularly wheat. By 2031, the sub-region is projected to make 
productivity gains, with grain output growing 4.6 percent a year (table 
17). Although most of the CIS sub-region's future demand growth for 
grains is projected to come from other uses (including feed), the 
anticipated growth in output far exceeds the annual growth of 2.6 
percent in total grain demand. And while the sub-region is not 
anticipated to be self-sufficient in grain production by 2031, the 
implied additional supply requirement--which includes stocks and 
imports--will be lower than in 2021.
Central and Southern Asia (CSA)
    The CSA sub-region accounts for 47 percent of the total population 
of the Asia region in IFSA, as it includes India. Because of its 
population size, India tends to distinctly influence food-insecurity 
trends in the Asia region. In 2021, it is estimated that the CSA will 
have a larger population of food-insecure people than the Sub-Saharan 
Africa (SSA) region, with the current estimate for 2021 reaching almost 
509 million people who are food-insecure (table 18). India is estimated 
to account for 68 percent of the food-insecure population in 2021 in 
the sub-region. By contrast, Afghanistan has the highest estimated 
prevalence of food insecurity in 2021 in CSA. Almost 59 percent of 
Afghanistan's population is estimated to be unable to meet the daily 
Calorie requirement of 2,100 kcal. Sri Lanka is estimated to be the 
most food-secure country in the CSA sub-region in 2021. Because of the 
lingering effects of the COVID-19 pandemic on income levels and 
economic activity, the CSA sub-region is estimated to have 58 percent 
more people considered food-insecure in 2021 than in 2020. Like the 
rest of the world, the CSA saw a sharp decline in GDP as a result of 
the global COVID-19 pandemic, with economic growth declining by an 
average 5.9 percent at a sub-regional level and by 6.9 percent in India 
(Baquedano, et al., 2021). While strong economic growth is estimated in 
2021 for the CSA sub-region (5.4 percent), in absolute terms both GDP 
and GDP per capita will remain below the 2018-2020 trend for most 
countries in the sub-region.

                                                    Table 18
              Food security indicators for the Central and Southern Asia sub-region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021               334.6               79.1              413.7              394.8               18.9
          2031               440.4              109.3              549.7              468.5               81.2
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Central and Southern Asia indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Central and Southern Asia        1,834.1         2,039.9          508.9           107.3            27.7             5.3             315             229          20,889         3,505
  Afghanistan......................         37.5            46.6           22.1            18.1            58.9            38.8             397             322           1,044           692
  Bangladesh.......................        164.2           178.3           42.1            10.5            25.7             5.9             300             218           1,856           336
  India............................      1,340.5         1,473.0          345.4            32.1            25.8             2.2             289             183          13,400           789
  Nepal............................         30.6            32.6            4.2             0.1            13.6             0.3             255             157             150             2
  Pakistan.........................        238.3           285.2           90.7            45.6            38.1            16.0             389             301           4,268         1,659
  Sri Lanka........................         23.0            24.2            4.5             1.0            19.4             4.0             258             191             171            28
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    By 2031, the prevalence of food insecurity in the CSA sub-region is 
projected to decline by about 81 percent from 2021 to 5.3 percent 
(table 18). The improvement in food security is largely driven by an 
anticipated stronger recovery in GPD per capita growth after 2021, 
slower population growth, and stability in food prices. In the CSA sub-
region, Bangladesh, India, and Pakistan are projected to account for 
most of the improvement in the food security metrics by 2031. By 
contrast Afghanistan--relative to its CSA peers--is anticipated to make 
the least progress over the next decade. By 2031, CSA's food-insecure 
population is projected to decline by 78.9 percent to just over 107 
million people. Pakistan, India, and Afghanistan are projected to 
account for most of the food-insecure people in 2031 in the region. 
However, Afghanistan is projected to have the highest prevalence of 
food insecurity in the coming decade. The daily per capita Calorie food 
gap in CSA--defined as the difference between estimated consumption and 
the nutritional target of 2,100 kcal--is projected to decline by 27.3 
percent, from 315 kcal in 2021 to 229 kcal in 2031.
    Grain demand over the next decade in CSA is projected to grow at a 
faster pace (2.9 percent a year) than production (1.7 percent a year) 
(table 18). Between 2021 and 2031, most of the growth in grain demand 
is projected to come from demand for other grain use, including feed. 
The demand for other grain use is projected to grow at a rate of 3.3 
percent a year, 0.5 percentage points higher than the growth for food 
grain demand over the same period. In absolute terms, the demand for 
food (440 million tons) will be 4 times greater in 2031 than the demand 
for other grain use (109 million tons). This increased demand will 
require a significant growth in the sub-region's implied additional 
supply requirements.
    India, as the largest country in the CSA sub-region of all 
countries included in IFSA, plays a major role in shaping the Asia's 
food-security indicators. The COVID-19 pandemic led to the worst 
economic slump in 4 decades for India (World Food Programme (WFP), 
2020). The pandemic is expected to revert poverty levels in India to 
their 2016 estimate, with the poverty rate reaching 10.4 percent (World 
Bank, 2020). Per capita GDP for 2021 is estimated at $2,009, roughly 
3.0 percent below its 2019 level. As a result of the estimated 
macroeconomic trends, 25.8 percent of the population (345.4 million) is 
estimated to be food-insecure in 2021.
    Despite the pandemic-induced decline in India's GDP growth in 2020 
(^6.9 percent), the country's GDP per capita is projected to grow at an 
annual rate of 4.9 percent between 2021 and 2031. The anticipated 
higher income prospects are projected to result in a marked improvement 
in the country's food-security metrics. The number of food-insecure 
people in India is projected to decrease to 32.1 million by the year 
2031, or 2.2 percent of India's population. The per capita daily 
Calorie food gap is projected to decline by 36.6 percent, from 289 kcal 
in 2021 to 183 kcal in 2031.
    Afghanistan continues to be one of the most food-insecure countries 
in IFSA. The COVID-19 pandemic, coupled with an intensification of the 
armed conflict that began in 2001, has resulted in at least 3.4 million 
people being considered in an emergency acute food insecurity \17\ 
situation (Global Network Against Food Crises (GNAFC), 2020). 
Protracted armed conflict and generally deteriorating macroeconomic 
conditions, coupled with increasing food prices, will continue to drive 
food insecurity in Afghanistan in 2021 (FAO, 2020; GNAFC, 2020). In 
2021, more than 22 million people are estimated to be considered food-
insecure, representing 58.9 percent of the Afghan population (table 
14). Afghanistan is projected to make the least progress in its food 
security metrics in the CSA sub-region. By 2031, the prevalence of food 
insecurity is projected to decline by 34 percent to 38.8 percent of 
Afghanistan's population (table 18). By 2031, the total number of food-
insecure people in Afghanistan is expected to decline by 18.2 percent 
to 18.1 million, the lowest decline of any CSA country. The ability of 
the food-insecure population to meet its daily per capita Calorie 
requirement is projected to improve by 2031, as the per capita food gap 
declines from 397 kcal in 2021 to 322 kcal in 2031.
---------------------------------------------------------------------------
    \17\ According to IPC Global Partners (2019) an acute food 
insecurity situation identifies areas or populations with food 
deprivation that threatens livelihoods, regardless of the causes, 
context, or duration.
---------------------------------------------------------------------------
    Bangladesh has the third largest population in the CSA sub-region. 
Bangladesh's economy has been significantly impacted by the COVID-19 
pandemic, as the economy is highly dependent on remittances from 
migrants residing abroad and a main exporter of garments. According to 
estimates compiled by GNAFC (2020), remittances are estimated to have 
declined some 27.8 percent in 2020, as migrants returned to Bangladesh 
or the economies that hosted them also saw pandemic-induced economic 
downturns. Of more concern to the country is the garment industry--
which is both a source of export revenue and of employment for low-
skilled workers. Some early estimates indicate a loss in revenue of at 
least $3 billion for the garment industry (GNAFC, 2020). Bangladesh was 
estimated to experience a GDP growth of less than one percent in 2020 
(Baquedano, et al., 2021). Its GDP is predicted to decline almost 2.7 
percent in 2021 and GDP per capita will likely remain 3.6 percent below 
its 2019 level. The weakened macroeconomic environment is anticipated 
to further affect the country's food-security metrics. In 2021, the 
prevalence of food insecurity is estimated to be 25.7 percent and the 
total food-insecure population is estimated to reach 42 million people. 
Driven by an improvement of economic growth and incomes by 2031, the 
prevalence of food insecurity is projected to decline by 77.1 percent 
to 5.9 percent of the population. By 2031, the number of food-insecure 
people in Bangladesh is projected to be 10.5 million, which is 75.1 
percent lower than at the beginning of the decade. The intensity of 
food insecurity, indicated by the daily per capita Calorie food gap, is 
projected to decline by 27.1 percent, from 300 kcal in 2021 to 218 kcal 
in 2031.
    Pakistan is projected to be the second most food-insecure country 
in the CSA sub-region. Pakistan--like the other countries in the CSA 
sub-region--has been severely impacted by the COVID-19 pandemic. In 
addition, even though floods in 2020 did not cause significant food 
shortages, they did put upward pressure on local food prices (FAO, 
2020). Moreover, an estimated sharp decline in remittances (26.8 
percent) has severely affected incomes of vulnerable populations 
(GNAFC, 2020). Baquedano, et al. (2021) reported that Pakistan's 
economy shrank by almost 2.4 percent in 2020. Even though GDP is 
anticipated to grow almost by 2.1 percent in 2021, GDP per capita is 
anticipated to remain 4.3 percent below its 2019 level. The prevalence 
of food insecurity in the country is estimated at 38.1 percent of the 
population in 2021, whereas the food-insecure population in Pakistan is 
estimated to be 90.7 million (table 18). From 2021 to 2031, GDP per 
capita is projected to grow faster (2.5 percent a year) than population 
numbers (1.8 percent a year). The projected steady income growth, 
coupled with anticipated price stability over the next decade, is 
expected to result in a sharp decline in the prevalence of food 
insecurity. In 2031, the share of the population considered food-
insecure is anticipated to be 16.0 percent, a decline of 58.0 percent 
from 2021 (table 18). The number of food-insecure people in 2031 is 
projected at 45.6 million, a 49.7 percent decline from the 2021 
estimate. The intensity of food insecurity, indicated by the daily per 
capita Calorie food-gap, is projected to decline by 22.7 percent, as 
the food gap changes from 389 kcal in 2021 to 301 kcal in 2031.

 
 
 
                               References
 
    Baquedano, F., Zereyesus, Y.A., Christensen, C., and Valdes, C.
 2021. COVID-19 Working Paper: International Food Security Assessment,
 2020-2030: COVID-19 Update and Impacts on Food Insecurity. COVID-19
 Working Paper #AP-087, U.S. Department of Agriculture, Economic
 Research Service.
    Global Network Against Food Crises (GNAFC). 2020. Food Crises and
 COVID-19 : Emerging Evidence and Implications. Rome, Italy.
    IPC Global Partners. 2019. Integrated Food Security Phase
 Classification Technical Manual Version 3.0: Evidence and Standards for
 Better Food Security and Nutrition Decisions. Rome, Italy.
    World Food Programme (WFP). 2020. ``WFP India COVID Situation
 Report.'' Rome, Italy.
    World Bank. 2020. Poverty and Shared Prosperity 2020: Reversals of
 Fortune. Washington, D.C.: World Bank.
 

Other Asia (OA)
    The Other Asia sub-region is estimated to be the most food-insecure 
of any sub-region in the assessment, as it includes both Yemen and 
North Korea. In 2021, it is estimated that almost 72 percent of the 
almost 60 million people in OA are food-insecure (table 19). Yemen is 
estimated to account for 60.2 percent of the food-insecure population 
in OA in 2021. Continued conflict--coupled with the effects of the 
COVID-19 pandemic on Yemen's economy--are expected to further 
deteriorate per capita income in 2021, putting pressure on Yemen's food 
security. The Democratic People's Republic of Korea (DPRK) is estimated 
to account for 38.2 percent of the food-insecure population in the OA 
sub-region.

                                                    Table 19
                      Food security indicators for the Other Asia sub-region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021                 9.6               14.9               24.5               16.5                7.9
          2031                11.7               23.6               35.3               27.1                8.2
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

Other Asia indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Population
                                           Population food-insecure
                                           Share of population food-
                                                   insecure
                                             Food gap (per capita)
                                              Food gap (total) *
                                       ---------------------------------------------------------------------------------------------------------------------------------------------------------
                                             2021            2031            2021            2031            2021           2031           2021           2031           2021           2031
                                       ---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Millions
                                                   Millions
                                                    Percent
                                               Kilo-calories/day
                                               1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                          Other Asia          59.6            66.3            42.8            39.0            71.9           58.7            457            375          3,109          2,372
  Korea, Democratic People's Rep. of..        25.9            26.7            16.3            14.0            63.1           52.3            446            397          1,041            792
  Mongolia............................         3.2             3.4             0.7             0.2            21.6            5.4            295            223             25              5
  Yemen...............................        30.5            36.2            25.8            24.8            84.6           68.5            631            505          2,043          1,575
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    By 2031, the sub-region is projected to see moderate income growth, 
helping improve the OA's food security metrics. The prevalence of food 
insecurity in OA is projected to decrease by 18.3 percent by 2031 
(table 19). However, the prevalence of food insecurity is projected to 
remain high at the end of the decade at 58.7 percent. These results 
largely reflect trends in Yemen, as a greater improvement is 
anticipated in DPRK and Mongolia. The number of food-insecure people in 
the OA sub-region is projected to decline by 9.0 percent in 2031 to 39 
million. The anticipated moderate decline in the number of food-
insecure people over the next decade mainly reflects trends in DPRK. 
However, by 2031, the number of food-insecure people in both DPRK and 
Yemen is projected to remain close to their 2021 levels. By 2031, the 
daily per capita Calorie food gap for OA is projected to decline by 
almost 18.0 percent, from 457 kcal in 2021 to 375 kcal in 2031.
    Yemen--with an estimated 25.8 million food-insecure people and a 
prevalence of food insecurity of 84.6 percent in 2021--is the most 
food-insecure country in the OA sub-region (table 19). Continued and 
intensified civil conflict has only compounded the effects of the 
COVID-19 pandemic and increased humanitarian assistance needs within 
the country (GNAFC, 2020). According to GNAFC (2020), at least 3.2 
million people in Yemen are in acute food insecurity crisis.\18\ In 
2020, the dual shock from the COVID-19 pandemic and the ongoing armed 
conflict reduced Yemen's GDP by an estimated 12.3 percent at the macro 
level (Baquedano, et al., 2021). A marginal increase in GDP growth (1.5 
percent) is anticipated for 2021. However, in absolute terms, GDP is 
estimated to be 24.0 percent below the 2018-2020 average. Over the next 
decade, if current trends continue, modest progress is expected in the 
country's food-security metrics. By 2031, the prevalence of food 
insecurity is projected to decline by 19.0 percent to 68.5 percent. In 
absolute terms, the number of food-insecure people is anticipated to 
decline by 3.7 percent to 24.8 million. By 2031, the daily per capita 
Calorie food gap is projected to improve by 19.9 percent, declining 
from 631 kcal in 2021 to 505 kcal in 2031.
---------------------------------------------------------------------------
    \18\ According to IPC Global Partners (2019) an acute food 
insecurity situation identifies areas and populations with food 
deprivation that threatens livelihoods, regardless of the causes, 
context or duration.
---------------------------------------------------------------------------
    In the Democratic People's Republic of Korea (DPRK), large numbers 
of people have low levels of food consumption and poor dietary 
diversity (FAO, 2020). The economic constraints, exacerbated by the 
impact of the COVID-19 pandemic, have increased the vulnerability to 
food insecurity of the local population (FAO, 2020). North Korean 
economic growth estimates for 2021 point to a modest 3.7 percent 
recovery of GDP. However, DPRK's food insecurity indicators are 
estimated to be high for 2021. The prevalence of food insecurity for 
2021 is estimated at 63.1 percent of the population and the estimate 
for the number of food-insecure people is projected to reach 16.3 
million. By 2031, projections for DPRK point to modest improvements in 
the country's food-security metrics. The improvements in the DPRK's 
food-security prospects over the next decade are mainly driven by an 
expectation that GDP growth per capita (1.4 percent) exceeds population 
growth (1.1 percent). By 2031, the prevalence of food insecurity is 
projected to decline by 17.2 percent, but more than half of the 
population will continue to be considered food-insecure. In absolute 
terms, the number of food-insecure people is projected to decline by 
14.5 percent to 14 million. The daily per capita Calorie food gap is 
projected to decline by 10.9 percent, from 446 kcal in 2021 to 397 kcal 
in 2031.

 
 
 
                               References
 
    Baquedano, F., Zereyesus, Y.A., Christensen, C., and Valdes, C.
 2021. COVID-19 Working Paper: International Food Security Assessment,
 2020-2030: COVID-19 Update and Impacts on Food Insecurity. COVID-19
 Working Paper #AP-087, U.S. Department of Agriculture, Economic
 Research Service.
    Food and Agriculture Organization of the United Nations (FAO). 2020.
 Crop Prospects and Food Situation #4, December. Rome, Italy.
    Global Network Against Food Crises (GNAFC). 2020. Food Crises and
 COVID-19 : Emerging Evidence and Implications. Rome, Italy.
    IPC Global Partners. 2019. Integrated Food Security Phase
 Classification Technical Manual Version 3.0: Evidence and Standards for
 Better Food Security and Nutrition Decisions. Rome, Italy.
 

Southeast Asia (SEA)
    South East Asia (SEA) is estimated to be the second most food-
secure sub-region in Asia, with an average prevalence of food 
insecurity of 17.0 percent and less than 86 million people considered 
food-insecure in 2021 (table 20). Almost half of the food-insecure 
population in SEA is located in Indonesia (42 million), which 
represents 53.4 percent of the sub-region's population. However, the 
most food-insecure country in the sub-region is Laos, which has the 
highest estimated prevalence of food insecurity in 2021. GDP per capita 
in the sub-region is expected to recover in 2021, growing 3.6 percent 
from 2020 and almost on par with 2019 levels. However, Indonesia and 
the Philippines are the only two countries where incomes in 2021 are 
estimated to remain below their 2019 levels.

                                                    Table 20
                   Food security indicators for the South East Asia sub-region, 2021 and 2031
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year                Food grain demand     Other grain        Total grain      Grain production       Implied
                                            demand *            demand                             additional
                                                                                                 supply required
                                                                                                       **
                   ---------------------------------------------------------------------------------------------
                                                            Million tons
----------------------------------------------------------------------------------------------------------------
          2021               123.2               53.5              176.7              114.2               62.5
          2031               149.8               62.5              212.3              140.1               72.3
----------------------------------------------------------------------------------------------------------------
Notes: * Other grain demand includes seed, feed, waste, and processing. ** The gap between grain demand and
  domestic grain production.
Source: USDA, Economic Research Service, based on results from the International Food Security Assessment model.

South East Asia indicators of food insecurity


          Source: USDA, Economic Research Service based on results from 
        the International Food Security Assessment model.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population
                                        Population food-insecure
                                        Share of population food-
                                                insecure
                                          Food gap (per capita)
                                           Food gap (total) *
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021            2031            2021            2031            2021            2031            2021            2031           2021           2031
                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                  South East Asia         504.1           547.7            85.5            24.7            17.0             4.5             296             220          3,873            912
  Cambodia.........................        17.2            19.2             3.6             0.6            20.8             3.0             292             205            159             18
  Indonesia........................       269.1           286.6            42.2            10.6            15.7             3.7             281             218          1,765            341
  Laos.............................         7.6             8.6             2.3             0.6            30.5             6.7             294             207            110             19
  Philippines......................       110.8           127.3            27.7            12.1            25.0             9.5             347             278          1,454            506
  Viet Nam.........................        99.5           106.0             9.7             0.9             9.7             0.9             263             190            384             27
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Measured in grain equivalents.
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.

    For the SEA sub-region's growth rate of GDP per capita over the 
next decade is projected to be 4.3 percent a year. By contrast, 
population growth is anticipated to be much lower, averaging less than 
1.0 percent a year from 2021 to 2031. As a result of the anticipated 
robust income growth in SEA, the prevalence of food insecurity is 
projected to decline by 73.4 percent to 4.5 percent of the population 
(table 20). The number of food-insecure people is also projected to 
decline sharply (by 71.1 percent) to less than 25 million. By 2031, the 
daily per capita Calorie food gap is projected to decline by 25.7 
percent, from 296 kcal in 2021 to 220 kcal in 2031.
    In the Laos People's Democratic Republic (LAO), a reduction in 
remittances in 2020 from migrants returning from Thailand--due to the 
COVID-19 pandemic--is likely to severely affect incomes and livelihoods 
of the most vulnerable populations (GNAFC, 2020). Moreover, in northern 
parts of the country, cereal production shortfalls (for the second 
consecutive year) have limited the availability of food for households' 
own consumption and have reduced income from crop sales, further 
constraining access to food (Food and Agriculture Organization of the 
United Nations Global Information Early Warning Systems (FAO GIEWS), 
2020). It is estimated that almost 31 percent of the LAO population 
(2.3 million) is considered food-insecure in 2021 (table 20). By 2031, 
LAO's GDP per capita is projected to grow (3.6 percent a year) at a 
greater pace than population growth (1.3 percent a year). As a result, 
the prevalence of food insecurity is projected to decline by 77.9 
percent and reach 6.7 percent by 2031. The number of food-insecure 
people over the next decade is also projected to decline by almost \3/
4\ to less than 600,000. By 2031, the daily per capita Calorie food gap 
is anticipated to decline by 29.6, from 294 kcal in 2021 to 207 kcal in 
2031.
    Indonesia experienced a sharp decline of its economy in 2020, due 
to the COVID-19 pandemic, with GDP shrinking by 3.0 percent (Baquedano, 
et al., 2021). In 2021, GDP is estimated to grow by 3.3 percent and may 
reach $1.05 trillion, 2.9 percent higher than the 2018-2020 average. 
However, GDP per capita in 2021 is estimated to be 1.3 percent below 
its 2019 level. The prevalence of food insecurity for 2021 is estimated 
at 15.7 percent and about 42 million people are estimated to be food-
insecure (table 20). From 2021 to 2031, Indonesian GDP per capita is 
projected to grow 4.3 percent a year. By contrast, over the same 
period, Indonesia population growth is anticipated to be 0.6 percent a 
year. As a result of the anticipated robust income growth over the next 
decade, the prevalence of food insecurity is projected to decline by 
76.5 percent to 3.7 percent, with the food-insecure population to 
decline to below 11 million. By 2031, the daily per capita Calorie food 
gap is expected to decline by 22.6 percent, from 281 kcal in 2021 to 
218 kcal in 2031.
    In the Philippines, the COVID-19 pandemic severely affected 
livelihoods and the ability of households to purchase food (FAO, 2021). 
The food-security environment improved towards the end of 2020--as the 
Government of the Philippines refined its COVID-19 containment 
approach, maximized the operation of local food systems, and provided 
cash transfers to the most vulnerable populations (FAO, 2021). However, 
Baquedano, et al. (2021) reported that in 2020, the Philippines economy 
shrank by 8.3 percent. For 2021, GDP is estimated to grow by 7.7 
percent, to $391 billion, 3.7 percent higher than the average for the 
period 2018-2020. But GDP per capita in 2021 is estimated to remain 
some 4.2 percent below its 2019 level. As a result of the anticipated 
lower incomes levels for 2021, the prevalence of food insecurity is 
estimated at 25.0 percent and the number of food-insecure people is 
estimated to reach 27.7 million (table 20). From 2021 to 2031, the 
country's GDP per capita growth (3.6 percent a year) is projected to 
outpace population growth (1.4 percent a year). The expected strong 
economic growth over the next decade is projected to lead to a 62.1 
percent decline in the prevalence of food insecurity to 9.5 percent. 
The number of food-insecure people is projected to decline by 56.5 
percent from a decade earlier and reach 12.1 million. By 2031, the 
daily per capita Calorie food gap is expected to decline by 20.0 
percent, from 347 kcal in 2021 to 278 kcal in 2031.
    In Vietnam--early preparedness, contact tracing, isolation and 
testing, coupled with timely border closures, physical distancing and 
community adherence--have been key in controlling and mitigating the 
effects on the economy and health of the population of the COVID-19 
pandemic (Tan, 2021). Despite early and proactive action by the 
country, Vietnam's economy was significantly impacted by the COVID-19 
pandemic. GDP growth in 2020 was reported at just above 1.0 percent, 
but this is down from the 2018-2020 average of 5.1 percent (Baquedano, 
et al. 2021). The decline in economic growth mainly reflects the early 
impacts of closures of business and mobility restrictions.
    Economic growth in 2021 is estimated at 5.5 percent and in absolute 
terms GDP is expected to reach almost $268 billion, well above the 
average of $247 billion for the period of 2018-2020. Despite the 
setbacks from the COVID-19 pandemic, Vietnam remains the most food-
secure country in the SEA sub-region. In addition, in 2021, it is 
estimated that the prevalence of food insecurity will be less than 9.7 
percent and 9.7 million people will be food-insecure (table 20). From 
2021 to 2031, GDP per capita growth (5.9 percent a year) is projected 
to outpace population growth (0.6 percent a year). Moreover, the price 
of the main staple food, rice, is anticipated to remain relatively 
stable over the next decade. As a result, by 2031, the prevalence of 
food insecurity is projected to decline by 90.9 percent to 0.9 percent. 
The number of food-insecure people is expected to decline by 90.3 
percent by 2031 to less than one million people. By 2031, the daily per 
capita Calorie food gap is projected to decline by 27.6 percent, from 
263 kcal in 2021 to 190 kcal in 2031.

 
 
 
                               References
 
    Baquedano, F., Zereyesus, Y.A., Christensen, C., and Valdes, C.
 2021. COVID-19 Working Paper: International Food Security Assessment,
 2020-2030: COVID-19 Update and Impacts on Food Insecurity. COVID-19
 Working Paper #AP-087, U.S. Department of Agriculture, Economic
 Research Service.
    Food and Agriculture Organization of the United Nations (FAO). 2020.
 Crop Prospects and Food Situation #4, December 2020. Rome, Italy.
    _______. 2021. ``Rapid Assessment of the Impact of COVID-19 on Food
 Supply Chains in the Philippines.''
    _______. 2020. ``Country Brief: The Lao People's Democratic
 Republic.'': 2020-21. Rome, Italy.
    Global Network Against Food Crises (GNAFC). 2020. Food Crises and
 COVID-19 : Emerging Evidence and Implications. Rome, Italy.
    Morrisset, Jacques, and Dorsati Madani. 2020. Taking Stock: From
 Covid-19 to Climate Change--How Vietnam Can Become the Champion of
 Green Recovery. Washington, D.C.: World Bank Group.
    Tan, Le Van. 2021. ``COVID-19 Control in Vietnam.'' Nature
 Immunology 22(March): 256-61.
    World Bank. 2020a. Indonesia Economic Prospects The Long Road to
 Recovery. Washington, D.C.: World Bank.
    _______. 2020b. Poverty and Shared Prosperity 2020: Reversals of
 Fortune. Washington, D.C.: World Bank.
 

Appendix I: Food Security Assessment Model: Definitions and methodology
    The IFSA model \19\ used in this report projects food consumption 
(food demand), food access, and food gaps in 76 low- and middle-income 
countries. Each country's food security metrics are estimated for the 
2021 and projected to 2031. Food is divided into four groups, covering 
100 percent of food consumption: the major grain (determined by calorie 
share), other grains, root crops, and all other food.
---------------------------------------------------------------------------
    \19\ The methodology to estimate the IFSA model indicators was 
replaced in 2016. To understand the changes to the model and impact on 
our food security estimates, see Rosen, et al., (2016).
---------------------------------------------------------------------------
    The food security of a country is evaluated based on the gap 
between estimated domestic food consumption (food demand) and a caloric 
target, which is set at 2,100 kcal per capita per day--a caloric level 
necessary to sustain life at a moderate level of activity. The modeling 
projections of food demand are expressed in grain equivalent, based on 
each food group's caloric content to allow aggregation across food 
groups, allowing this grain equivalent to be easily expressed in either 
kilograms or kcal.
    Three food security indicators are provided: (1) the share of food-
insecure, which is the share of the total population unable to reach 
the nutritional target; (2) the number of food-insecure people; and (3) 
the food-gap, which is the amount of food needed to allow each 
individual consuming below the threshold level to reach the caloric 
target. This caloric target indicates relative well-being and helps to 
quantify unequal food access within a country. Projection results 
provide a baseline for the food-security situation in each country, and 
the results depend on the model's specification and underlying 
assumptions. The simulation framework used to project food demand is 
based on partial-equilibrium models for each country in the assessment. 
Beghin, et al. (2015) introduce the methodology, and Beghin, et al. 
(2017) provide more detail on price transmission and food security 
projections.
    Each country model comprises a price-independent generalized log-
linear (PIGLOG) demand system for each of the four food groups (Deaton 
& Muellbauer, 1980; Muellbauer, 1975). The demand system is calibrated 
on a 3 year average of prices and incomes (2018-20), observed 
consumption levels, a measure of inequality, and income and price 
elasticities. Demand projections are based on projected prices and 
incomes; the model implicitly assumes that both the preferences 
represented by the demand system and the income distributions embedded 
in the calibration and projections are constant over time.
    The distribution of consumption used to calculate food security 
measures is described by a constant coefficient of variation, which 
implies an increasing standard deviation of consumption, as consumption 
rises over the projection period. But this does not account for 
potential structural changes in an economy. The implied price and 
income elasticities evolve over the projection period, as prices and 
incomes change; generally, food groups become more income-inelastic 
because incomes rise.
Structural framework for estimating and projecting food demand in the 
        aggregate Demand system definition and calibration
    The demand qhi for a given food group i, for 
income-decile h is specified as:


where pi is the price (expressed in real local currency), 
and xh is the decile-level income.

          And: Ai(pi) = ai0 + 
        ai1pi and Bi (pi) = 
        bi0 + bi1pi.

    The PIGLOG demand formulation allows for aggregation of income 
decile-level demands in (1) into average per capita market demand for 
each food group i as shown in (2).


    The latter in equation (2) is a function of average per capita 
income x and Theil's entropy measure of income inequality z.
    The average expenditure share for good category i is also defined 
as:


    The elasticity of average demand for good i with respect to average 
income (or total expenditure) is:


    The own-price elasticity of the average demand is:
    
    
    In each country, consumers at different income levels have similar 
underlying preferences over good i as embodied in parameters 
ai0, aii1, 
bi0, bi1, but their 
respective consumptions vary because their respective incomes vary.
    With a system of three linear equations (equations 3, 4, and 5), 
with four unknown variables, one parameter remains free. The free 
parameter (chosen to be bi0) is used to ensure 
that decile demands behave consistently with stylized facts of food 
security as follows: price sensitivity and income responsiveness 
decline with income levels; own-price elasticities must be negative; 
and food expenditure shares tend to fall with increasing income. A 
range of values of the free parameters allows ensuring these stylized 
facts are satisfied by the calibrated demand system. Here 
bi0 is pinned down such that the ratio of price 
elasticities for the bottom and top deciles is equal to the ratio of 
the natural logarithm of their national income shares.
    For any given free parameter value, the system of equations is 
solved for parameters bi1, 
ai1, and ai0 as a function 
of the free parameter. Once these three parameters are recovered, 
parameters ai0, ai1, 
bi0, and bi1, along with 
income xh and price pi, are used to generate the 
consumption level of good i for each decile specified in equation (1). 
In this initial calibration, the quality of any good i is assumed to be 
constant across the income distribution.
    For each country, a demand system is calibrated for each of the 
four food groups--based on income, consumption levels, and prices from 
the 3 years preceding the projection period (2018-20).The major grain 
(which varies across countries) is determined, based on caloric share 
in the diet. The other grains food group contains all other grains; the 
prices for this food group are weighted by its components' caloric 
shares.
    At the calibration stage, domestic food prices are either observed 
(including the components of a price index for other grains that is 
weighted by caloric share) or synthetic prices are created.
    For the food prices not observed in the calibration stage, a 
synthetic domestic price, pids, that is linked to 
the world price, piw, is created and expressed in 
local currency. The parameter u is the price transmission slope,which 
is assumed 0.7. The parameter trcint represents 
international transportation and market costs [e.g., cost, insurance 
and freight (CIF) and free on board (FOB)], which are assumed 10 
percent, and trcdom are domestic trade costs, which are 
assumed $20 per ton in real terms:


    At this stage, the calibration also includes a price transmission 
equation that links the domestic price pidom 
(either observed or synthetic) to the world price. The generic price 
transmission equation is:


    During the calibration stage, the intercept, I, is solved in real 
terms, and is held constant during the projection period.
Projection of food demand calculation and food security indicators
    The IFSA food security indicators (share of food-insecure 
population, number of food-insecure people, and food-gap) are derived 
from the levels of food demand projected, using the calibrated demand 
system.
    For each country, the demand parameters and projected income, 
xt, and prices, pit, are used to project food 
demand, qit, for each of the four food groups i in each year 
t so that qit = Ai(xt/
Pit)((Pit) + 
Bi(Pit)ln(xt)). The demand for the 
four food groups is aggregated into total food demand expressed in 
Calories, so that Sqit = Qt, which is also 
referred as food or calorie consumption. This measure of total demand 
is used to calculate food security indicators.
    The FAO (2019) is followed to estimate the distribution of calorie 
consumption--beginning with a coefficient of variation (CV) of food 
availability--which characterizes consumption distributed with a mean m 
and variance v, so that CV = (v/m).\20\ Given the CV and the 
projected mean caloric consumption (Qt), the variance, v, of 
the empirical distribution for a given year t can be recovered.
---------------------------------------------------------------------------
    \20\ See the appendix of Beghin, et al. (2015b) for more detail.
---------------------------------------------------------------------------
    Assuming food consumption Qt is distributed lognormal, 
then ln(Qt) is distributed


the proportion of the population that falls below the calorie target 
(2,100 Kcal per 


Here, Finsecure indicates the share of the population that 
is food-insecure.Using this share and total population in the 
respective country, the total number of food-insecure people in this 
country is calculated.


be recovered, using the partial mean of the calorie availability below 
the target (2,100), which is calculated as qfoodcal 
= eu-s/
F>f((ln(2100)-
m)/s], where f is the standard normal density 
function.
    The food gap is the difference between the caloric target of 2,100 
and the average calorie availability for food-insecure people. This 
provides a measure of the food gap in kcal per day per food-insecure 
person. The latter, multiplied by the number of food-insecure people 
and converted into grain equivalent per year, yields a food-gap measure 
based on annual grain volume.
Data
    The model is calibrated for each of the four food groups, based on 
average prices and income from 2018-20. Prices are expressed in real 
local currency units. Quantities are expressed in grain-equivalent 
units.
Calibrated parameters and variables
    Demand parameters (ai0, ai1, bi0, 
and bi1), price intercepts, domestic prices (synthetic) 
projections are based on data from the ERS International Macroeconomic 
Data Set and the USDA Agricultural Projections to 2030. They utilize 
the calibrated demand parameters and price transmission between world 
and domestic prices.
Endogenous projection variables
    Food Demand, Domestic Prices.
Exogenous variables used in Calibration and Projection
    Average Consumption per capita--Food and Agriculture Organization 
(FAO) of the United Nations Food Balance Sheet (most recent 
available).\21\
---------------------------------------------------------------------------
    \21\ Food Balance Sheets (FBS) are for 2018. There are no current 
FBS for Somalia, Eritrea, Burundi, and Democratic Republic of the 
Congo. Grain consumption levels share of grains are used in total 
Calories, as reported in the FAO-GIEWS Cereal Supply and Demand Balance 
for Sub-Saharan African Countries: situation as of November 2020 
report, to generate per capita consumption for each food group. We use 
grain consumption levels and share of grains in total Calories, as 
reported in the Food Agriculture Organization of the United Nations-
Global Information Early Warning Systems Cereal Supply and Demand 
Balance for Sub-Saharan African Countries: situation as of November 
2020 report, to generate per capita consumption for each food group. We 
bring forward the reported consumption of all food groups, using 
information from FAO's grain supply data and changes in caloric intake.
---------------------------------------------------------------------------
    Grain Shares--FAO Food Balance Sheet.\22\
---------------------------------------------------------------------------
    \22\ For Somalia, we use an FBS from the original Food and 
Agriculture Organization Statistical Database, which is no longer 
maintained. The FBS of neighboring countries used (Burundi--Rwanda; DR 
Congo--Congo; Eritrea--Ethiopia) to approximate the shares of grains 
and roots and tubers in total Calories for the other countries.
---------------------------------------------------------------------------
    Elasticities of Price and Income--unpublished calculations by Jim 
Seale, using 2011 International Comparison Program (ICP) data, 
following the methodology in Muhammad, et al. (2011).\23\
---------------------------------------------------------------------------
    \23\ Elasticities are not available for all countries. Estimates 
used from neighboring countries (Somalia--Ethiopia; Eritrea--Ethiopia; 
Algeria--average Tunisia and Morocco; Afghanistan--average Tajikistan 
and Pakistan; Turkmenistan--average Tajikistan, Kyrgyzstan, Kazakhstan; 
Uzbekistan--average Tajikistan, Kyrgyzstan, Kazakhstan). We use less 
elastic values for major grain in: Vietnam, Philippines, Indonesia, 
India, Pakistan, and Bangladesh--and for other grain in India.
---------------------------------------------------------------------------
    Domestic Prices (Observed)--FAO Global Information and Early 
Warning System (GIEWS), annual average; market depends on reporting.
    Tariffs--World Bank's World Integrated Trade Solution (WITS).\24\
---------------------------------------------------------------------------
    \24\ Tariff rates are available through 2018. Tariff rates for 
Somalia, Turkmenistan, Eritrea, and North Korea are not available. For 
Eritrea, we use the Common Market for Eastern and Southern Africa 
(COMESA) average. Somalia has imposed a 12.3 percent tariff on 
commercial imports (LCU Logistics). Turkmenistan has no tariff, but 
imposes excise taxes that have historically been 10 percent. North 
Korea does not import on the open market, so we assume there are zero 
tariffs and do not quantify other trade frictions.
---------------------------------------------------------------------------
    Exchange Rates and Consumer Price Indices (CPIs)--ERS International 
Macroeconomic Data Set.\25\
---------------------------------------------------------------------------
    \25\ Ecuador and El Salvador are modelled in the currency of U.S. 
dollars (instead of local currency) as in the ERS International 
Macroeconomic Dataset, based on data from the International Monetary 
Fund (IMF), and Oxford Economics. Projections constructed for: Somalia, 
North Korea, and Zimbabwe--using data from International Monetary Fund 
(IMF), IHS Markit, and Oxford Economics.
---------------------------------------------------------------------------
    Population--U.S. Census Bureau.
    World Prices--USDA Agricultural Projections to 2027.\26\
---------------------------------------------------------------------------
    \26\ The world price series are maize (U.S. gulf #2 yellow); rice 
(Thai, B, fob Bangkok); sorghum (U.S. Gulf, #2 yellow); wheat (gulf, #2 
Hard Red Wheat); barley (E.C., French, Rouen); Oats (U.S. Farm); roots 
and tubers (cassava; tapioca, hard pellets, Rotterdam, fob); other food 
(represented by soybean oil, Dutch fob, ex-mill). World price 
projections are not available for all cereals represented in the Food 
and Agriculture Organization of the United Nations (FAO) Food Balance 
Sheets and the FAO Global Information Early Warning System price 
database. We use the world price of wheat to represent rye; and sorghum 
to represent all other cereals (e.g., millet, teff, fonio).
---------------------------------------------------------------------------
    Per Capita Income--generated using GDP and population from ERS 
International Macroeconomic Data Set.\27\
---------------------------------------------------------------------------
    \27\ Projections were constructed using information from IMF, 
Oxford Economics, and IHS Markit for Zimbabwe, Somalia, and North 
Korea.
---------------------------------------------------------------------------
    Income Distribution--World Bank Data Bank.\28\ Assumed constant 
during the projection period.
---------------------------------------------------------------------------
    \28\ Income distributions are not available for all countries. We 
use Eritrea--Ethiopia; Somalia--Ethiopia; Zimbabwe--Zambia; North 
Korea--Mongolia; and Afghanistan--average Uzbekistan, Pakistan, 
Tajikistan.
---------------------------------------------------------------------------
    Coefficient of Variation (CV) of Food Consumption--FAO State of 
Food Insecurity (FAO, 2019). Assumed constant during the projection 
period.
Modeling Staple Cereal Production
    The current production module of the IFSA model aggregates a panel 
of agricultural production data for all 76 countries in the assessment 
to provide a model-based estimation for the current year and a 
projection 10 years out for yield and area dynamics.
    Agricultural production is decomposed into yield (production per 
hectare) and area for grains. Production (PR) for a given country c in 
year t is obtained by multiplying projected yield (YL) and area (AR).

          PRct = ARct * YLct

    The projections cover the period 2021-2031, based on producer 
price projections in local currency units and world price projections 
from the USDA Agricultural Projections.
Yield
    Yield parameters are estimated econometrically, using panel data 
consisting of observations for each country and are calibrated to 
observed yields for the immediate past 3 years (e.g., 2017-2019). 
Yields). The calibration procedure involves in-sample prediction using 
observed yield data and consensus estimates for expected return ratio--
an indicator of the relative profitability of fertilizer use. Yields 
respond to expected relative return ratios per hectare (RR), autonomous 
technical change over time (T), and include a country-specific effect.

          YLct =  (RRct,Tt)

    The return ratios are the ratio of the return per hectare-revenue 
from yield divided by the price of fertilizer, RRct = 
((ypct * Yct) / pct) where 
yp and p are yield and fertilizer prices, respectively. The 
expected return ratios include a current-year component and a long-term 
expectation component, expressed in real local currency unit (rlcu). 
USDA Agricultural Projection (to 2030) prices for superphosphate and 
the major grain by production volume (for grain) are used.
    The domestic price for each grain is linked to its world reference 
price, expressed in real local currency unit, through the following 
price transmission equation:

          Pdomestic = 0.7  pworld + 0.3  I
    The expected domestic price is a weighted average of 70 percent of 
the current-year world price (pworld) and 30 percent of the mean 
domestic price (I) over the analysis time period. The grain production 
data used in the estimation come from USDA's Production Supply and 
Demand (PSD) database and from the Food and Agriculture Organization of 
the United Nations (FAO).The intercept, I, is the mean of the price 
over the regression time period (1985-2020).
Modeling Area
    Crop area, ARct, is modeled with the widely used 
Nerlovian specification--in which lagged area, expected crop and 
fertilizer prices, and a time trend--enter into the equation as 
follows:

          ARct =  (ypct, 
        pct, ARct-1, T)

    The expected prices are averages of contemporaneous and lagged 
relative prices. A time trend is included in the area equation to 
capture non-price factors in area, and a country fixed effect. The area 
equation is numerically calibrated to the base year average of the 
preceding 3 years of the report (e.g., 2018-20), using consensus 
estimates for price and lagged acreage responses. Regional and sub-
regional models are fitted to allow for heterogeneity among diverse 
countries included in the IFSA model. The regional specification 
disaggregates the estimation of area and yield by the four regional 
classifications of the IFSA countries: Sub-Saharan Africa (SSA), Asia, 
Latin America and the Caribbean (LAC), and North Africa (NAF). The sub-
regional specification disaggregates the model to 10 sub-regions of the 
IFSA countries: Central Africa (CAF), East Africa (EAF), Southern 
Africa (SAF), West Africa (WAF), North Africa (NAF), Latin America and 
Caribbean (LAC), Commonwealth of Independent States (CIS), Central and 
South Asia (CSA), Southeast Asia (SEA), and Other Asia (OA).
    Model-based projection performance is assessed in terms of how well 
the specified model can be expected to perform on an independent (out-
of-sample) data set, often assessed by the actual estimate of the out-
of-sample Mean Squared Error (MSE). When an independent out-of-sample 
dataset is not available, a Cross-Validation (CV)approach (used in this 
report) can be used to choose the best model--by estimating the out-of-
sample MSE, using an in-sample data set. The out-of-sample error (often 
referred to as the test-error) is the average error that results from 
using the regression method to predict the response on a new 
observation that wasnot used in regression estimation. Given an in-
sample dataset, the choice of a particular specification (in this 
report, the regional and sub-regional model specifications) is 
warranted if the model results in a low test error(James, et al., 
2017). The models are assessed with a ``leave-one-out-cross-
validation'' (LOOCV) to simulate their out-of-sample prediction 
performance (James, et al., 2017).
    The performances of regional and sub-regional model specifications 
are assessed using the overall out-of-sample MSE scores. The model with 
the smallest out-of-sample MSE is selected for estimation.
Modeling IASR
    The Implied Additional Supply Required (IASR) quantifies the total 
grain demand in each country that is not projected to be met through 
domestic production. Total grain demand (TD) is comprised of food 
demand (FD), generated by our demand-driven model and nonfood use 
(NFD)--which is comprised of seed, feed, processing, and other uses. 
The IASR for grains thus can be expressed as: IASR=TD-PR.
    The demand for grain for processing, seed, and other uses, is 
assumed to grow at the same rate as production. The demand for grain 
feed grows at the average rate observed during 2006-20.

 
 
 
                               References
 
    Beghin, J., Meade, B., & Rosen, S. 2015. A Consistent Food Demand
 Framework for International Food Security Assessment. TB-1941, U.S.
 Department of Agriculture, Economic Research Service, June.
    Beghin, J., Meade, B., & Rosen, S. 2017. ``A food demand framework
 for International Food Security Assessment''. Journal of Policy
 Modeling, 39(5), 827-842.
    Deaton, A., & Muellbauer, J. 1980. Economics and consumer behavior.
 Cambridge university press.
    FAO. 2019. The State of Food Insecurity in the World. FAO,Rome,
 Italy.
    James, G., Witten, D., Hastie, T., & Tibshirani, R. 2017. An
 Introduction to Statistical Learning: with Applications in R. In
 Springer.
    Muellbauer, J. 1975. Aggregation, income distribution and consumer
 demand. The Review of Economic Studies 42(4):, 42(4), 525-543.
    Muhammad, A., Seale, J., Meade, B., & Regmi, A. 2011. International
 Evidence on Food Consumption Patterns: An Update Using 2005
 International Comparison Program Data. TB-1929, U.S. Department of
 Agriculture, Economic Research Service.
    Rosen, Stacey, Karen Thome, and B.M. 2016. International Food
 Security Assessment, 2016-2026. U.S. Department of Agriculture,
 Economic Research Service, GFA-27 (June).
 

Appendix II: Food Security Measures for International Food Security 
        Assessment Countries, 2021-2031

                                                                   Appendix table 1-1
                             Summary food security indicators for 76 countries in the International Food Security Assessment
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Population            Population food-          Share of          Food gap (per      Food gap (total) *
                                       --------------------------        insecure          population food-         capita)      -----------------------
                                                                 ------------------------      insecure      --------------------
                                            2021         2031                            --------------------                        2021        2031
                                                                      2021        2031      2021      2031      2021      2031
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Millions
                                                Millions
                                                 Percent
                                            Kilo-calories/day
                                            1,000 Metric tons
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Total for IFSA countries       3,938.1      4,566.1      1,212.0      637.7      30.8      14.0       380       308      62,794      34,410
  Asia................................     2,470.8      2,731.4        647.3      175.7      26.2       6.4       304       231      28,285       6,992
    Commonwealth of Independent.......        73.0         77.3         10.1        4.7      13.8       6.1       244       187         414         202
      States..........................
      Armenia.........................         3.0          2.9          0.1        0.0       4.8       0.2       189       137           3           0
      Azerbaijan......................        10.3         10.8          0.4        0.1       4.3       0.6       170       135           9           1
      Georgia.........................         4.9          4.9          0.5        0.1      10.8       1.7       234       178          16           2
      Kyrgyzstan......................         6.0          6.5          1.1        0.4      18.3       5.6       263       209          37          10
      Moldova.........................         3.3          2.9          0.8        0.0      24.3       1.2       243       146          26           1
      Tajikistan......................         9.0         10.2          4.8        3.9      53.6      38.2       442       378         265         183
      Turkmenistan....................         5.6          6.1          0.4        0.1       7.6       1.0       212       162          12           1
      Uzbekistan......................        30.8         33.0          1.8        0.2       5.9       0.7       195       150          46           4
    Central and Southern Asia.........     1,834.1      2,039.9        508.9      107.3      27.7       5.3       315       229      20,889       3,505
      Afghanistan.....................        37.5         46.6         22.1       18.1      58.9      38.8       397       322       1,044         692
      Bangladesh......................       164.2        178.3         42.1       10.5      25.7       5.9       300       218       1,856         336
      India...........................     1,340.5      1,473.0        345.4       32.1      25.8       2.2       289       183      13,400         789
      Nepal...........................        30.6         32.6          4.2        0.1      13.6       0.3       255       157         150           2
      Pakistan........................       238.3        285.2         90.7       45.6      38.1      16.0       389       301       4,268       1,659
      Sri Lanka.......................        23.0         24.2          4.5        1.0      19.4       4.0       258       191         171          28
    Other Asia........................        59.6         66.3         42.8       39.0      71.9      58.7       457       375       3,109       2,372
      Korea, Democratic People's......        25.9         26.7         16.3       14.0      63.1      52.3       446       397       1,041         792
        Republic of...................
      Mongolia........................         3.2          3.4          0.7        0.2      21.6       5.4       295       223          25           5
      Yemen...........................        30.5         36.2         25.8       24.8      84.6      68.5       631       505       2,043       1,575
    South East Asia...................       504.1        547.7         85.5       24.7      17.0       4.5       296       220       3,873         912
      Cambodia........................        17.2         19.2          3.6        0.6      20.8       3.0       292       205         159          18
      Indonesia.......................       269.1        286.6         42.2       10.6      15.7       3.7       281       218       1,765         341
      Laos............................         7.6          8.6          2.3        0.6      30.5       6.7       294       207         110          19
      Philippines.....................       110.8        127.3         27.7       12.1      25.0       9.5       347       278       1,454         506
      Viet Nam........................        99.5        106.0          9.7        0.9       9.7       0.9       263       190         384          27
  Latin America and the Carib-........       174.8        191.0         44.7       23.5      25.6      12.3       345       284       2,236       1,152
    bean..............................
    South America.....................       110.6        120.2         24.2        9.9      21.8       8.3       290       229         975         320
      Bolivia.........................        11.8         13.4          5.3        2.6      45.0      19.7       343       259         239          90
      Colombia........................        49.5         53.3          6.3        1.6      12.6       3.0       260       205         235          47
      Ecuador.........................        17.1         18.9          4.7        2.4      27.7      12.8       264       216         175          73
      Peru............................        32.2         34.6          7.8        3.3      24.4       9.5       295       237         326         110
    Central America and the Carib-....        64.2         70.8         20.5       13.6      32.0      19.2       376       315       1,261         833
      bean............................
      Dominican Republic..............        10.6         11.5          1.2        0.3      11.2       2.4       227       179          39           7
      El Salvador.....................         6.5          6.7          1.5        0.8      22.9      11.4       290       246          49          21
      Guatemala.......................        17.4         20.1          5.2        3.0      29.8      15.1       356       297         211         103
      Haiti...........................        11.2         12.5          7.3        6.7      65.2      53.7       753       673         722         593
      Honduras........................         9.4         10.4          2.4        1.1      25.9      10.4       341       274          93          33
      Jamaica.........................         2.8          2.7          0.4        0.1      15.6       2.8       235       175          13           2
      Nicaragua.......................         6.3          6.8          2.5        1.6      39.6      23.6       428       361         134          73
  North Africa........................       197.8        228.0         28.6       17.7      14.5       7.8       280       245       1,116         613
      Algeria.........................        43.6         48.6          5.2        2.3      11.8       4.8       282       241         189          73
      Egypt...........................       106.5        128.3         20.1       13.7      18.9      10.7       331       292         811         490
      Morocco.........................        35.9         38.8          2.7        1.4       7.4       3.5       266       238          93          43
      Tunisia.........................        11.8         12.4          0.7        0.3       6.0       2.3       242       211          22           7
  Sub-Saharan Africa..................     1,094.7      1,415.6        491.5      420.8      44.9      29.7       444       365      31,158      25,653
      Central Africa..................       145.1        194.5         99.9      114.2      68.8      58.7       538       437       9,633      10,084
      Cameroon........................        28.5         37.2          6.0        4.3      21.1      11.7       303       264         238         150
      Central African Republic........         6.1          7.5          4.5        2.3      73.9      31.2       555       351         283          92
      Congo, Republic of the..........         5.4          6.8          3.1        2.7      56.7      39.6       402       337         162         120
      Congo, Democratic Republic of...       105.1        143.0         86.3      104.8      82.1      73.3       892       798       8,949       9,722
        the...........................
    East Africa.......................       382.4        489.7        177.2      134.9      46.3      27.6       487       407       9,493       6,988
      Burundi.........................        12.3         16.5          9.7       13.0      79.3      78.9       580       577         657         874
      Chad............................        17.4         23.4         11.7       13.7      67.0      58.4       607       554         895         958
      Eritrea.........................         6.1          6.9          3.8        1.3      62.5      19.0       442       276         211          45
      Ethiopia........................       110.9        139.6         37.7       16.0      34.0      11.4       318       239       1,093         304
      Kenya...........................        54.7         66.9         25.2        9.9      46.0      14.7       372       260       1,166         319
      Rwanda..........................        12.9         15.2          5.4        2.7      41.8      18.0       413       317         264         102
      Somalia.........................        16.4         21.8         13.7       16.8      84.0      77.2       727       659       1,146       1,271
      Sudan...........................        46.8         60.5         17.9       12.5      38.3      20.6       390       320         822         469
      Tanzania........................        60.2         78.0         25.5       27.6      42.4      35.3       495       461       1,574       1,587
      Uganda..........................        44.7         60.9         26.5       21.5      59.2      35.2       522       410       1,665       1,060
    Southern Africa...................       152.6        199.1         89.7       88.2      58.8      44.3       471       391       6,006       5,163
      Angola..........................        33.6         46.9         17.1       23.6      50.9      50.4       443       440         965       1,323
      Lesotho.........................         2.0          1.9          0.8        0.2      40.7      12.5       364       259          34           7
      Madagascar......................        27.6         34.1         18.3       17.4      66.5      51.0       493       418       1,295       1,039
      Malawi..........................        21.9         30.2          8.6        5.7      39.5      18.8       405       322         408         213
      Mozambique......................        30.9         39.9         18.1       14.8      58.7      37.0       519       417       1,214         795
      Namibia.........................         2.7          3.2          1.1        0.8      42.9      26.2       323       270          46          28
      Eswatini........................         1.1          1.2          0.3        0.2      31.1      17.2       308       260          12           6
      Zambia..........................        17.9         23.8         12.9       15.4      71.7      64.9       697       646       1,065       1,186
      Zimbabwe........................        14.8         18.0         12.3       10.1      83.2      55.9       685       492         967         565
    West Africa.......................       414.7        532.3          125       83.5      30.1      15.7       379       306       6,025       3,417
      Benin...........................        13.3         18.4          2.7        1.1      20.3       6.1       319       250         116          38
      Guinea-Bissau...................         2.0          2.5          1.0        0.7      52.1      26.5       422       323          57          29
      Burkina Faso....................        21.4         26.9          6.4        4.3      30.1      15.9       456       385         364         205
      Cabo Verde......................         0.6          0.7          0.2        0.1      36.6       9.6       338       238          10           2
      Cote d'Ivoire...................        28.1         34.6          6.9        5.9      24.5      16.9       420       382         414         321
      Gambia..........................         2.2          2.6          0.5        0.1      22.5       4.4       298       216          17           3
      Ghana...........................        30.0         36.8          2.6        0.7       8.6       1.9       249       201          82          18
      Guinea..........................        12.9         16.9          2.9        2.0      22.6      11.8       356       306         162          95
      Liberia.........................         5.2          6.8          3.1        2.2      59.0      32.0       619       475         213         116
      Mali............................        20.1         26.8          4.1        4.0      20.5      14.9       329       305         172         154
      Mauritania......................         4.1          4.9          0.8        0.3      19.6       5.6       316       246          32           9
      Niger...........................        23.6         34.0          9.1        5.6      38.5      16.5       456       355         582         280
      Nigeria.........................       219.5        280.5         74.5       51.0      33.9      18.2       351       291       3,287       1,870
      Senegal.........................        16.1         19.9          3.6        1.3      22.5       6.7       278       215         143          41
      Sierra Leone....................         6.8          8.7          3.1        2.7      45.0      31.3       497       433         235         183
      Togo............................         8.8         11.2          3.1        1.6      35.5      14.2       356       275         139          55
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USDA, Economic Research Service based on results from the International Food Security Assessment model.


                        Appendix III: Macroeconomic measures for the International Food Security Assessment Countries, 2021-2031
 
 
 
 
 


                                                                                                                               Appendix table 2-1
                                                                                        Summary: Macroeconomic information for 76 countries in the International Food Security Assessment
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                           Population (million)          Population:  Annual        Gross Domestic Product (GDP,      GDP: Annual growth rate     Per capita GDP (2015 USD)      Per capita GDP:  Annual    CPI: Annual growth      RER: Annual growth    Real domestic price of
                    --------------------------------- growth rate (percentage)           million 2015 USD)                 (percentage)       --------------------------------- growth rate (percentage)    rate  (percentage)      rate  (percentage)    major grain:    Annual
                                                     -----------------------------------------------------------------------------------------                                 --------------------------------------------------------------------------       growth rate
      Country                                                                                                                                                                                                                                                  (percentage)
                      2018-2020     2021      2031                                                                                              2018-2020     2021      2031
                                                       2015-2020    2021-2031    2018-2020      2021        2031      2015-2020    2021-2031                                     2015-2020    2021-2031    2015-2020   2021-2031   2015-2020   2021-2031 -----------------------
                                                                                                                                                                                                                                                           2015-2020   2021-2031
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       Total IFSA        3,814      3,938     4,566         1.7          1.5     8,341,232   8,486,164   13,572,641        2.8          4.8        2,187      2,155     2,973         1.1          3.3         N/A         N/A         N/A         N/A         N/A         N/A
         Countries
  Asia.............      2,414      2,471     2,731         1.2          1.0     5,328,449   5,488,042   9,286,748         3.6          5.4        2,207      2,221     3,400         2.4          4.3         N/A         N/A         N/A         N/A         N/A         N/A
    Commonwealth of         72       73.0      77.3         0.8          0.6       250,517     255,647     354,404         2.5          3.3        3,484      3,502     4,584         1.7          2.7         N/A         N/A         N/A         N/A         N/A         N/A
      Independent
     States........
      Armenia......          3        3.0       2.9        ^0.2         ^0.5        12,419      12,918      19,318         3.3          4.1        4,099      4,290     6,739         3.6          4.6         0.9         2.5         1.7        ^1.2        ^0.6        ^1.1
      Azerbaijan...         10       10.3      10.8         0.9          0.5        52,105      51,174      63,641        ^1.0          2.2        5,145      4,978     5,880        ^1.8          1.7         6.6         3.7         5.7        ^3.4        ^0.9        ^0.1
      Georgia......          5        4.9       4.9         0.0         ^0.1        17,191      17,484      24,736         2.4          3.5        3,489      3,545     5,050         2.4          3.6         4.5         3.5         0.8        ^0.8        ^0.4        ^1.1
      Kyrgyzstan...          6        6.0       6.5         1.0          0.7         7,654       7,676      10,544         2.3          3.2        1,296      1,275     1,630         1.2          2.5         2.6         4.6         2.3         0.8        ^0.2        ^1.3
      Moldova......          3        3.3       2.9        ^1.1         ^1.2         8,916       9,062      12,696         2.5          3.4        2,622      2,723     4,309         3.6          4.7         5.1         4.3        ^3.7        ^2.2        ^2.2        ^4.0
      Tajikistan...          9        9.0      10.2         1.6          1.3         9,923       9,923      12,714         4.3          2.5        1,135      1,102     1,244         2.7          1.2         7.0         4.3         5.2         0.5        ^0.3        ^0.3
      Turkmenistan.          5        5.6       6.1         1.1          0.8        44,721      47,577      70,580         4.9          4.0        8,176      8,517    11,635         3.7          3.2         9.2         5.3        ^6.9         0.0        ^0.6        ^6.6
      Uzbekistan...         30       30.8      33.0         0.9          0.7        97,588      99,832     140,175         3.3          3.5        3,221      3,238     4,244         2.3          2.7        13.8         7.1        17.6         0.0        ^0.8         6.2
    Central and          1,790      1,834     2,040         1.3          1.1     3,323,526   3,412,580   5,945,202         3.8          5.7        1,857      1,861   2,914.4         2.5          4.6         N/A         N/A         N/A         N/A         N/A         N/A
     South-........
      ern Asia.....
      Afghanistan..         36         38        47         2.4          2.2        21,944      23,551      35,310         2.6          4.1          613        628       758         0.2          1.9         3.3         5.6         4.3         0.6        ^0.3        ^0.8
      Bangladesh...        161        164       178         1.0          0.8       255,803     257,065     446,858         6.2          5.7        1,588      1,565     2,506         5.2          4.8         5.6         6.2        ^1.9         0.2        ^1.1        ^1.2
      India........      1,311      1,340     1,473         1.2          0.9     2,611,040   2,693,426   4,784,872         3.8          5.9        1,991      2,009     3,248         2.6          4.9         5.2         5.2        ^0.3        ^3.5        ^3.5        ^0.2
      Nepal........         30         31        33         1.1          0.6        26,180      28,620      54,985         4.8          6.7          872        935     1,685         3.6          6.1         5.4         5.3        ^0.5        ^3.5        ^3.4        ^0.3
      Pakistan.....        229        238       285         2.1          1.8       318,511     320,957     491,860         3.1          4.4        1,393      1,347     1,725         0.9          2.5         6.6         5.6         4.9        ^1.3        ^1.5        ^0.7
      Sri Lanka....         23         23        24         0.7          0.5        90,047      88,961     131,317         1.7          4.0        3,961      3,862     5,422         1.0          3.5         4.3         4.7         4.0        ^0.8        ^1.6         2.3
    Other Asia.....         58         60        66         1.4          1.1        66,536      63,614      81,820        ^5.0          2.5        1,146      1,068     1,233        ^6.3          1.4         N/A         N/A         N/A         N/A         N/A         N/A
      Korea, Demo-.         26         26        27         0.5          0.3        29,986      31,698      36,769         0.3          1.5        1,168      1,224     1,377        ^0.2          1.2         3.8         4.7         1.2         1.7        ^0.3         0.9
        cratic
       People's....
        Republic of
      Mongolia.....          3          3         3         1.1          0.7        13,718      14,634      21,902         3.0          4.1        4,374      4,577     6,403         1.8          3.4         4.6         5.5         4.5        ^0.1        ^0.5        ^0.6
      Yemen........         29         30        36         2.3          1.7        22,831      17,281      23,148       ^14.4          3.0          780        567       639       ^16.3          1.2        28.6         8.3        ^3.3        ^2.8        ^1.1        ^3.4
    South East Asia        494        504       548         1.0          0.8     1,687,870   1,756,202   2,905,323         3.8          5.2        3,414      3,484     5,304         2.7          4.3         N/A         N/A         N/A         N/A         N/A         N/A
      Cambodia.....         17         17        19         1.5          1.1        23,429      25,750      46,640         6.2          6.1        1,404      1,501     2,427         4.6          4.9         2.5         3.0        ^0.7        ^0.6        ^1.8        ^0.5
      Indonesia....        265        269       287         0.8          0.6     1,022,108   1,051,848   1,712,723         3.4          5.0        3,858      3,909     5,975         2.5          4.3         3.1         4.4         0.4        ^1.5        ^1.0         0.1
      Laos.........          7          8         9         1.5          1.3        18,211      19,818      31,618         5.5          4.8        2,481      2,624     3,690         4.0          3.5         2.1         4.1         1.0        ^1.1        ^0.9         0.3
      Philippines..        108        111       127         1.6          1.4       377,487     390,948     637,547         3.5          5.0        3,510      3,527     5,008         1.9          3.6         2.9         3.0         0.8        ^0.8        ^1.0         0.3
      Vietnam......         98        100       106         0.9          0.6       246,635     267,837     476,796         5.6          5.9        2,520      2,691     4,498         4.7          5.3         3.2         3.7         0.0        ^0.2        ^1.7         0.0
  Latin America and        171        175       191         1.1          0.9       887,251     862,972   1,188,685         0.2          3.3        5,185      4,936     6,222        ^0.9          2.3         N/A         N/A         N/A         N/A         N/A         N/A
    the Caribbean..
    Central America         63         64        71         1.3          1.0       240,441     243,190     342,013         2.0          3.5        3,835      3,789     4,831         0.7          2.5         N/A         N/A         N/A         N/A         N/A         N/A
      and the Carib-
     ..............
      bean.........
      Dominican Re-         10         11        11         1.0          0.8        86,468      87,907     132,994         3.6          4.2        8,315      8,295    11,571         2.6          3.4         2.7         3.5         3.7         1.1        ^0.3         1.2
        public.....
      El Salvador..          6          7         7        0.87         0.23        24,956      24,533      29,074         0.4          1.7        3,884      3,758     4,354        ^0.5          1.5         0.5         2.5          --          --        ^0.4        ^0.7
      Guatemala....         17         17        20         1.8          1.4        69,074      71,568     100,371         2.0          3.4        4,095      4,104     4,987         0.3          2.0         3.6         3.7        ^1.7        ^0.6        ^0.7        ^1.5
      Haiti........         11         11        13         1.5          1.1         8,899       8,525      10,426        ^0.3          2.0          814        761       832        ^1.8          0.9        14.6         5.6         2.3        ^1.0        ^0.6         0.5
      Honduras.....          9          9        10         1.3          1.1        23,816      24,020      34,410         2.2          3.7        2,612      2,569     3,299        0.93         2.53         3.9         4.9         0.5         0.5        ^0.5        ^0.9
      Jamaica......          3          3         3        ^0.1         ^0.2        14,522      14,346      18,114        ^0.5          2.4        5,167      5,112     6,606        ^0.4          2.6         3.7         4.8         2.2        ^1.4        ^2.0        ^2.9
      Nicaragua....          6          6         7         1.0          0.8        12,706      12,291      16,626        ^1.5          3.1        2,068      1,963     2,445        ^2.5          2.2         3.9         6.2         2.5         1.0        ^0.4         0.9
    South America..        108        111       120         1.1          0.8       646,809     619,782     846,672        ^0.4          3.2        5,965      5,602     7,041        ^1.5          2.3         N/A         N/A         N/A         N/A         N/A         N/A
      Bolivia......         11         12        13         1.5          1.3        37,153      36,799      50,423         1.7          3.2        3,238      3,117     3,758         0.2          1.9         2.5         5.5        ^0.5        ^1.0        ^0.4        ^1.3
      Colombia.....         49         50        53         1.0          0.7       308,028     299,255     415,860        ^0.2          3.3        6,334      6,042     7,806        ^1.1          2.6         4.2         3.1         3.6        ^0.8        ^1.0         1.3
      Ecuador......         17         17        19         1.3          1.0        98,674      93,606     119,346        ^1.4          2.5        5,908      5,473     6,313        ^2.6          1.4         0.4         2.3          --          --        ^0.7        ^3.3
      Peru.........         32         32        35         0.9          0.7       202,954     190,122     261,044        ^0.7          3.2        6,418      5,904     7,534        ^1.6          2.5         2.3         2.0         1.2         0.3        ^0.6         0.4
  North Africa.....        191        198       228         1.9          1.4       723,720     699,519     966,847         2.3          3.3        3,791      3,537     4,240         0.4          1.8         N/A         N/A         N/A         N/A         N/A         N/A
      Algeria......         42         44        49         1.7          1.1       170,751     167,336     212,083        ^0.9          2.4        4,035      3,838     4,367        ^2.5          1.3         4.4         4.5         2.2        ^0.8        ^1.5        ^2.7
      Egypt........        102        106       128         2.4          1.9       398,453     377,987     538,178         4.4          3.6        3,915      3,551     4,194         1.9          1.7        14.5         4.4         3.4        ^1.3        ^0.8        ^0.9
      Morocco......         35         36        39         1.0          0.8       109,550     110,109     152,858         1.0          3.3        3,111      3,068     3,945         0.0          2.5         1.0         2.1         0.1         2.1         0.4        ^2.8
      Tunisia......         12         12        12         1.0          0.5        44,967      44,087      63,728        ^0.1          3.8        3,870      3,732     5,144        ^1.0          3.3         5.8         3.6         3.3         3.0         1.3        ^2.0
  Sub-Saharan            1,038      1,095     1,416         2.8          2.6     1,401,812   1,435,631   2,130,361         1.6          4.0        1,351      1,311     1,505        ^1.1          1.4         N/A         N/A         N/A         N/A         N/A         N/A
   Africa..........
    Central Africa.        137        145       194         3.1          3.0        89,157      91,445     138,004         2.3          4.2          652        630       710        ^0.8          1.2         N/A         N/A         N/A         N/A         N/A         N/A
      Cameroon.....         27         29        37         2.8          2.7        35,557      36,652      53,631         2.8          3.9        1,317      1,285     1,441         0.0          1.2         1.5         2.9        ^0.5         0.2        ^0.3        ^0.8
      Central                6          6         7         2.1          2.0         1,967       2,052       3,176         3.2          4.5          335        335       425         1.1          2.4         4.8         6.8        ^2.7        ^5.1        ^1.0        ^1.3
       African.....
        Republic...
      Congo,                 5          5         7         2.2          2.3         8,125       8,018      10,344        ^1.7          2.6        1,570      1,480     1,515        ^3.8          0.2         1.8         2.2         0.3        ^0.7        ^1.4        ^4.1
       Republic....
        of the.....
      Congo,                99        105       143         3.3          3.1        43,509      44,723      70,853         2.7          4.7          441        426       496        ^0.6          1.5        22.9         2.9        ^4.5         1.5        ^0.3        ^2.9
       Democratic..
        Republic of
       the.........
    East Africa....        363        382       490         2.8          2.5       372,194     391,882     620,517         3.9          4.7        1,026      1,025     1,267         1.1          2.1         N/A         N/A         N/A         N/A         N/A         N/A
      Burundi......         12         12        17         2.3          3.0         3,142       3,065       3,728        ^0.3          2.0          272        250       226        ^2.5         ^1.0         3.7         5.2         2.3         0.2        ^0.5        ^0.2
      Chad.........         16         17        23         3.3          3.0        10,258      10,153      13,830        ^1.7          3.1          627        583       590        ^4.8          0.1         0.5         2.3         1.6        ^0.9        ^1.7        ^2.3
      Eritrea......          6          6         7         0.9          1.2         5,010       4,976       6,186         2.3          2.2          831        810       892         1.4          1.0        ^5.3         7.7         7.0        ^5.1        ^3.8         0.6
      Ethiopia.....        105      110.9       140         2.7          2.3        88,214      96,042     173,112         7.4          6.1          837        866     1,240         4.6          3.7        13.1         9.6        ^0.2         2.1         0.0        ^1.4
      Kenya........         52         55        67         2.3          2.0        78,145      82,550     142,214         4.4          5.6        1,492      1,509     2,126         2.1          3.5         5.9         4.0        ^2.4         0.5        ^0.6        ^2.1
      Rwanda.......         12         13        15         2.2          1.6        10,988      11,812      18,123         6.0          4.4          882        912     1,192         3.6          2.7         5.5         5.6         1.7         0.9        ^0.5        ^0.6
      Somalia......         15         16        22         2.9          2.9         1,629       1,647       2,289         2.2          3.3          105        101       105        ^0.6          0.4         3.6         4.5         2.7         0.1         0.0         0.0
      Sudan........         44         47        60         2.9          2.6        76,080      75,480      93,117        ^0.7          2.1        1,716      1,614     1,539        ^3.5         ^0.5        46.8        15.1        11.7        ^7.6        ^2.2         1.2
      Tanzania.....         57         60        78         2.8          2.6        59,597      63,678      90,782         5.3          3.6        1,046      1,059     1,164         2.5          1.0         4.2         2.8         0.6         1.9        ^0.1        ^1.0
      Uganda.......         42         45        61         3.7          3.1        39,131      42,479      77,135         4.9          6.1          934        950     1,267         1.1          2.9         4.1         4.4         0.4         2.0        ^0.1        ^1.4
    Southern Africa        144        153       199         2.8          2.7       208,742     208,528     294,587        ^0.6          3.5        1,445      1,367     1,479        ^3.3          0.8         N/A         N/A         N/A         N/A         N/A         N/A
      Angola.......         31         34        47         3.6          3.4       108,655     108,761     148,953        ^1.9          3.2        3,456      3,233     3,177        ^5.3         ^0.2        24.5         7.2        10.9        ^0.8        ^0.2         0.4
      Lesotho......          2          2         2         0.2         ^0.1         2,421       2,385       3,172        ^0.4          2.9        1,232      1,209     1,629        ^0.6          3.0         5.0         4.4         2.1        ^0.2        ^1.7        ^0.9
      Madagascar...         26         28        34         2.5          2.1        13,251      14,019      20,148         3.6          3.7          503        508       592         1.1          1.5         7.2         5.8         0.7         1.3        ^0.6         0.5
      Malawi.......         21         22        30         3.4          3.3         7,205       7,402      11,040         2.7          4.1          351        338       366        ^0.6          0.8        12.8         5.4        ^2.3        ^2.9        ^1.9        ^2.6
      Mozambique...         29         31        40         2.7          2.6        17,912      18,513      30,873         2.2          5.2          611        599       774        ^0.4          2.6         8.3         4.7         4.2         1.3        ^0.3         0.3
      Namibia......          3          3         3         1.9          1.8        10,944      10,484      13,684        ^1.6          2.7        4,239      3,914     4,288        ^3.5          0.9         4.6         4.5         2.5        ^0.3        ^0.2        ^0.6
      Swaziland....          1          1         1         0.8          0.6         4,282       4,265       5,189         0.5          2.0        3,907      3,833     4,396        ^0.3          1.4         5.0         4.7         1.0        ^0.4        ^0.5        ^0.5
      Zambia.......         17         18        24         3.0          2.9        23,687      23,666      33,572         1.8          3.6        1,399      1,319     1,411        ^1.2          0.7        11.0         5.2         5.3         1.0        ^0.7         1.0
      Zimbabwe.....         14         15        18         1.6          1.9        20,385      19,032      27,956        ^1.2          3.9        1,427      1,283     1,554        ^2.8          1.9        59.6         6.3          13         (3)        ^1.4         2.3
    West Africa....        394        415       532         2.6          2.5       731,720     743,776   1,077,252         1.0          3.8        1,858      1,794     2,024        ^1.5          1.2         N/A         N/A         N/A         N/A         N/A         N/A
      Benin........         12         13        18         3.5          3.3        14,013      15,248      27,024         5.1          5.9        1,127      1,146     1,467         1.5          2.5         0.8         2.6        1.29       ^1.12        ^1.0         0.4
      Guinea-Bissau          2          2         3         2.5          2.6         1,253       1,291       1,863         3.7          3.7          666        653       731         1.1          1.1         1.7         2.8        0.34       ^1.30        ^2.4         0.2
      Burkina Faso.         20         21        27         2.8          2.3        14,856      15,924      22,767         5.3          3.6          732        745       846         2.4          1.3         0.7         2.3        1.03       ^1.18        ^2.2        ^1.6
      Cabo Verde...          1          1         1         1.3          1.1         1,809       1,798       2,950         1.3          5.1        3,142      3,044     4,484        ^0.1          4.0         0.7         1.5        1.33       ^0.08        ^0.7         0.5
      Cote d'Ivoire         27         28        35         2.4          2.1        58,530      62,150      90,278         5.2          3.8        2,178      2,212     2,611         2.8          1.7         0.8         1.1        0.26        1.99        ^0.1         0.1
      Gambia.......          2          2         3         2.0          1.6         1,587       1,644       2,590         3.2          4.6          744        743     1,000         1.1          3.0         7.0         5.5       ^0.73        0.02        ^1.7        ^0.6
      Ghana........         29         30        37         2.2          2.1        59,920      64,106      99,262         4.5          4.5        2,086      2,139     2,694         2.3          2.3        11.0        10.0       ^0.53       ^0.51        ^0.8        ^0.2
      Guinea.......         12         13        17         2.8          2.8        11,822      12,498      19,132         6.4          4.3          970        970     1,131         3.5          1.5         9.0         6.6       ^1.99       ^0.01        ^0.7        ^0.8
      Liberia......          5          5         7         2.6          2.7         3,155       3,143       4,212        ^0.8          3.0          639        603       619        ^3.3         0.27        17.5        17.1        3.40       ^5.57        ^3.3         1.8
      Mali.........         19         20        27         3.0          2.9        15,703      16,213      23,382         3.8          3.7          827        805       874         0.7          0.8        ^0.2         1.1        1.26        2.01        ^0.1         0.6
      Mauritania...          4          4         5         2.2          1.9         6,815       7,073      11,400         2.1          4.9        1,737      1,730     2,310         0.0          2.9         2.4         2.5        2.24       ^0.06        ^0.4        ^1.2
      Niger........         22         24        34         3.8          3.7        11,966      12,908      24,109         4.9          6.4          545        546       709         1.0          2.6         1.2         1.4        0.86        0.05        ^1.0        ^2.0
      Nigeria......        209        219       281         2.5          2.5       498,102     495,955     694,450        ^0.5          3.4        2,386      2,259     2,475        ^2.9          0.9        13.7         7.2        1.60       ^1.37        ^0.8         0.4
      Senegal......         15         16        20         2.4          2.1        22,223      23,424      38,049         4.7          5.0        1,445      1,455     1,915         2.2          2.8         1.3         2.1       ^0.26        1.02        ^0.5        ^0.1
      Sierra Leone.          6          7         9         2.4          2.5         4,943       5,088       7,524         3.1          4.0          764        749       864         0.7          1.4        14.9        10.4        1.91        0.10        ^0.8         0.8
      Togo.........          8          9        11         2.7          2.4         5,023       5,314       8,259         4.3          4.5          599        602       737         1.6          2.0         0.3         2.3        1.76       ^0.89        ^1.1        ^0.6
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USDA, Economic Research Service, International Macroeconomic Dataset.

                                 ______
                                 
  Submitted Statement by Hon. Jim Costa, a Representative in Congress 
       from California; on Behalf of American Soybean Association
    The American Soybean Association thanks the House Agriculture 
Committee's Livestock and Foreign Agriculture Subcommittee for the 
opportunity to provide written testimony to the hearing record for ``A 
2022 Review of the Farm Bill: International Trade and Food Assistance 
Programs.'' ASA, founded in 1920, represents U.S. soybean farmers on 
domestic and international policy issues important to the soybean 
industry. ASA has 26 affiliated state associations representing more 
than 500,000 farmers in 30 soybean-producing states.
    International trade is one of the pillars of the U.S. soybean 
industry. Exports to foreign markets were more than 50% of U.S. soy 
production this last marketing year. Continued access to those existing 
markets, new markets, and international food aid markets are critical 
to sustaining U.S. soybean growers' success. To that end, ASA works to 
promote U.S. soy's quality and uses overseas through both its World 
Initiative for Soy in Human Health (WISHH)--ASA's long-term market 
development program--and partner organization, the U.S. Soybean Export 
Council (USSEC). Support from the Administration and Congress is vital 
to assure the free and fair trade needed to keep U.S. soybean growers 
competitive and bolster ASA's efforts with both WISHH and USSEC.
    USSEC serves the U.S. soy family as our boots on the ground in soy 
markets overseas. Through a global network of international offices and 
strong support in the U.S., USSEC helps build a preference for U.S. 
soybeans and soybean products, advocates for the use of soy in feed, 
aquaculture and human consumption, promotes the benefits of soy use 
through education, and connects industry leaders. The activities of 
USSEC to expand international markets for U.S. soybeans and products 
are made possible through ASA's investment of cost-share funding 
provided by USDA's Foreign Agricultural Service, support from 
cooperating industries, and by producer check-off dollars invested by 
the United Soybean Board and various state soybean councils.
    ASA participates in the farm bill's international food aid programs 
through WISHH. Knowing the essential role that access to protein plays 
in human nutrition, U.S. soybean growers founded WISHH in the year 2000 
to serve as a catalyst in developing and emerging markets. WISHH brings 
the power of strategic partnerships to our unique market-systems 
approach. Local business leaders, governmental and non-governmental 
organizations as well as academic institutions join us in increasing 
demand and fueling economic growth for the sustained availability of 
nutritious and affordable human foods and livestock feeds. Over the 
past twenty years, WISHH has worked on the ground in developing and 
emerging markets, using dollars from farm bill programs such as Food 
for Progress and Food for Peace to deliver high-quality, nutritional 
soy protein to feed a global population.
    The vital programs authorized in Title III of the farm bill, from 
the Agricultural Trade Promotion and Facilitation Program (ATPFP) to 
international food aid programs, are critical for the long-term success 
of U.S. soybean growers. We thank the Committee for the opportunity to 
share ASA's role in these programs, provide insight on perceived 
strengths and weaknesses, and offer recommendations in advance of the 
2023 Farm Bill. We would also like to share ASA's written testimony as 
presented to a hearing of this Subcommittee November 17, 2021, ``Trade 
Policy and Priorities.'' \1\, which further outlines our overall trade 
policy and priorities.
---------------------------------------------------------------------------
    \1\ https://soygrowers.com/wp-content/uploads/2021/11/ASA-
Testimony-to-House-Ag-trade-hearing-11-17-21.pdf.
    Editor's note: footnotes annotated with  are retained in Committee 
file.
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Agricultural Trade Promotion and Facilitation Program
    The long-term success of U.S. soy abroad would not be possible 
without the foresight of Congress to create public-private partnership 
programs at USDA to assist trade associations in promoting our products 
on a global stage. ASA is a longtime cooperator of these programs, 
particularly the Market Access Program (MAP) and the Foreign Market 
Development Program (FMD). Utilizing MAP and FMD funds, ASA--through 
WISHH and USSEC--has leveraged those dollars to increase market access, 
address technical barriers to entry, and create on-the-ground capacity 
and demand for U.S. soy.
    Looking at our export numbers, the U.S. soybean industry is an 
excellent example of the success of these programs. Soybeans and soy 
products are America's leading agricultural export, with an export 
value of $27.5 billion in 2021. A 2016 study commissioned by USSEC 
shows that international marketing activities conducted on behalf of 
U.S. soybean growers increased soybean exports each year by an average 
of 993,600 metric tons (MT), or nearly 5%. For soybean meal and soybean 
oil, the average annual growth over that period was estimated to be 
somewhat larger at 15% (808,600 MT) for meal and 24% (149,600 MT) for 
oil.
    These numbers translate to an additional $29.60 in export revenue 
per $1 spent on international promotion. At the producer level, that 
additional export revenue translates into a cost benefit ratio of 
$10.10 additional grower profit per $1 spent on international 
promotion. While this research was undertaken in advance of the 2018 
Farm Bill, the results remain unchanged: International marketing 
activities contribute directly to increased exports and grower 
profitability.
    U.S. soy has invested these dollars in a variety of projects across 
the globe. Recognizing the global demand for sustainably produced and 
verified soybeans, our industry used MAP dollars to create the U.S. Soy 
Sustainability Assurance Protocol (SSAP). SSAP is a benchmarking system 
that helps industry customers ensure U.S. soy is produced following a 
strong set of conservation regulations and best management practices. 
For Marketing Year (MY) 2021, the U.S. sold 28,432,763 MT of SSAP-
verified soy. Every year, the number of SSAP-certified shipments to our 
export markets is only expected to increase. Eighty percent of U.S. soy 
shipments to the European Union are SSAP certified, and SSAP has 
recently passed independent benchmarking to confirm compliance with the 
European Feed Manufacturers' Federation (FEFAC) Soy Sourcing Guidelines 
2021.
    SSAP was also recognized for meeting the Olympic and Paralympic 
Games Tokyo 2020 Organizing Committee's sustainable sourcing code for 
agricultural products, the Global Seafood Alliance's Best Aquaculture 
Practices and the Consumer Goods Forum's Sustainable Soy Sourcing 
Guidelines.
    U.S. soy has also used these funds to work in new and emerging 
export markets to grow the demand for U.S. soybeans, and we have seen 
great success. While we have carefully cultivated our largest export 
market, China, the past 5 years have also shown how important market 
diversification is for U.S. soy's long-term success. Using MAP and FMD 
dollars, our industry has invested in growing demand in export markets 
outside China.
    A great example is Egypt. Over the past 5 years, the demand for 
U.S. soy has increased 178%. In MY 2016/2017, we exported 0.7 million 
metric tons (MMT). By MY 2020/2021, that demand had increased to 2.67 
MMT. USSEC has used MAP and FMD dollars on the ground in Egypt to 
facilitate trade missions with Egyptian buyers, engage in-country with 
the local poultry and aquaculture industries, and build an 
understanding of the quality of U.S. soy with Egyptian customers.
    As demand in Egypt for chickens has increased, so too has the 
soybean crush capacity in-country. As its crush and feed sectors have 
evolved in recent years--especially since 2016--Egypt has moved from 
primarily being a soybean meal importer to importing whole soybeans, 
which has led to growth in its domestic crush industry. As its crush 
industry has grown, preference for U.S. soybeans has grown alongside 
it. During the same timeframe, aquaculture in Egypt grew more than 
700%, and aquafeed demand has approached 2 MMT, with soy demand of 
750,000 metric tons.
    Due to these critical investments made possible by MAP and FMD, 
Egypt now sources more than 80% of its soybean imports from the United 
States.
    These programs, however, are in desperate need of an increase in 
funding allocations. The MAP program was officially created in 1996, 
but authorization can be traced back to 1978, while FMD was created in 
1955. Available data about total export market development funding and 
partner contributions ends in 2019. However, MAP and FMD funding has 
not changed since Fiscal Years 2006 and 1997, respectively. Over that 
same time, partner funding continually grew to be about twice the level 
of Federal dollars.
MAP and FMD Funding


          Source: USDA FAS.

    For FY 2021, 67 organizations received MAP funding and 21 received 
FMD funding. With the increase in the number of cooperators and 
adjustments for inflation, a steady budget of $200 million annually for 
MAP means the full pool of funding available to cooperators is more 
akin to $129 million.
Impacts on MAP Funding 2001-2023


    Additional funding provided to these programs will offer real 
benefits to U.S. agriculture. ASA was awarded funding through the 2018 
Agricultural Trade Promotion program, which was created to help U.S. 
agricultural exporters develop new markets and mitigate the adverse 
effects of other countries' tariff and non-tariff barriers. While not a 
farm bill program, these dollars were utilized by USSEC to complement 
ongoing investments initially made by MAP and FMD in global markets. 
Nearly half of the resources allocated to U.S. soy was earmarked for 
the creation of long-term legacy institutions called Soy Excellence 
Centers (SECs). U.S. soy has now opened five SECs across the emerging 
market space where protein deficits continue to be a major regional 
concern for food security--and therefore national and international 
security.
    One of those SECs was opened in Egypt and will celebrate its second 
anniversary October 2022. In those 2 years (Sept. 2019-Sept. 2021), 46 
programs with 4,680 participants have been implemented. SEC programs 
include poultry and aquaculture related webinars, in-pond raceway 
system (IPRS) aquaculture demonstrations, and strong coordination with 
local industry.
    This is one example of what could be done with additional funding, 
but there are many more projects waiting in the wings. U.S. soy has 
multiple projects that are shovel-ready and awaiting more resources.
    In addition, it is clear that our international competitors are 
outspending us in the trade promotion arena. A recent study released by 
Texas A&M University shows that, under the European Union's Common 
Agricultural Policy (CAP), the EU allocated $1.28 billion from 2014 to 
2018 on wine promotion alone. That amounts to an average of $256.4 
million per year for one product, while the entirety of ATPF 
allocations is $255 million annually.\2\
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    \2\ Ribera, Luis A., and Bart Fischer. 2022. ``Analysis of 
agricultural trade promotion and facilitation in the 2018 Farm Bill.'' 
Applied Economic Perspectives and Policy 1-9. https://doi.org/10.1002/
aepp.13255.
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    It is critical for the continued success of U.S. agriculture that 
Congress invest additional dollars in the Agricultural Trade Promotion 
and Facilitation Program in the 2023 Farm Bill. ASA strongly recommends 
doubling the minimum annual mandatory funding for the Market Access 
Program to $400 million and the Foreign Market Development Program to 
$69 million.
Export Credit Guarantee Programs
    International trade is impossible without financing. In 2018, 
Congress extended authorization for USDA's export credit guarantee 
program (GSM-102) and the Facility Credit Guarantee Program (FGP). Both 
programs were created to promote the export of U.S. agricultural 
products by reducing the financing risks when selling to emerging and 
developing markets. GSM-102 facilitates the financing of agricultural 
product sales, while the FGP is aimed at the financing of agricultural-
related facilities in countries where there is demand for U.S. 
agricultural products but limited infrastructure to meet that demand.
    Investments by Congress in these programs help ensure the U.S. 
remains a leader in reliability as a top exporter.
    U.S. soy has been a strong supporter of these programs since their 
inception, and to this day, we continue to support their full 
utilization. By investing in our export markets and increasing their 
capacity for financing and infrastructure investments, U.S. agriculture 
would win on two fronts: (1). Increased infrastructure developments in 
emerging markets would lead to increased demand and capacity for U.S. 
soy, and (2) Increased utilization of GSM-102 would lead to a higher 
volume of U.S. agricultural sales--including soy--in developing 
countries. ASA supports continued authorization of GSM-102 and FGP in 
the 2023 Farm Bill.
Food for Peace Title II
    The U.S. Government has mandated the use of U.S. commodities in the 
historic P.L. 83-480 program since its creation after World War II. 
With ongoing humanitarian crises in Ukraine, Yemen, Syria, Afghanistan, 
and Ethiopia, among others, programs like Food for Peace Title II's 
distribution of food aid are an act of U.S. diplomacy. U.S. farmers 
play an important role in growing crops that meet the high quality 
requirements for these foods to remain safe for people to eat months 
after they are shipped from the U.S.
    WISHH has recently partnered with companies like Edesia Nutrition 
that produce ready-to-use therapeutic foods (RUTFs) and ready-to-use 
supplements (RTUSs) with U.S.-grown soy flour for more than 60 
countries around the world. Edesia forecasts it will use 7.5 million 
pounds of soy flour this year, requiring the equivalent of 170,000 
bushels of soybeans. Another WISHH partner, SEMO Milling/Tiger Soy, 
built a new processing plant in Mexico, Missouri, to meet the demand 
for soy flour in U.S. global food security programs.
    ASA supports continued funding of the Food for Peace Title II 
program to allow U.S. soy to provide direct humanitarian assistance and 
valuable nutrition in new markets.
Food for Progress
    USDA's Food for Progress (FFPr) funding has been an essential 
component of WISHH's mission to connect development and trade and thus 
create long-term demand and markets for U.S. soy. In 2015, WISHH kicked 
off a $14.8 million FFPr poultry value chain project in Ghana to 
increase consumption of improved poultry feed. The Assisting the 
Management of Poultry and Layer Industries with Feed Improvements and 
Efficiency Strategies (AMPLIFIES) project worked along the value chain, 
starting with post-harvest loss to ensure locally produced grain was 
dried and stored properly to reduce aflatoxin and mycotoxin levels. The 
project worked with local feed mills and Ghanaian universities to 
increase feed testing capabilities that resulted in higher quality 
feeds available on the market. While working with poultry producers, 
the project held feeding demonstrations for layer and broiler 
production, focusing on proper feeding rations, biosecurity measures, 
best management practices and the inclusion of soy as the preferred 
protein in the feed ration. To round out the value chain, AMPLIFIES 
developed a consumer education campaign to increase the consumption of 
eggs. During the life of the project, per capita egg consumption 
increased from 172 in 2016 to 235 in 2020.
    However, because commodity prices dropped after 2015, the project 
was not able to meet its full approved budget through monetization, 
reducing the operational budget by approximately $2.5 million, and 
therefore was forced to end project activities early. Due to Ghanaian 
import policies and duties, as well as production and processing 
capabilities, monetization sales of soybeans and soybean meal only 
accounted for 11,200 MT of the total 34,700 MT sold for project 
proceeds.
    In 2018, WISHH launched the FFPr-funded Commercialization of 
Aquaculture for Sustainable Trade (CAST) project in Cambodia at $17.1 
million. The CAST project strengthens the use of high-quality feed in 
fish production, thereby helping build a profitable market system for 
Cambodian aquaculture products. Through CAST, Cambodia's private-sector 
and universities work closely with U.S. soybean growers and businesses, 
as well as American academic institutions and non-governmental 
organizations. CAST's activities and project outcomes align with 
Cambodia's strategy to increase productivity and profitability through 
Good Aquaculture Practices and maintaining the quality and safety of 
fish raised in Cambodia. CAST works along the value chain to train fish 
producers on improved management and production practices, sanitary and 
phytosanitary standards, and promote the utilization of high-quality 
feed in the industry. The project was instrumental in creating the 
Cambodia Aquaculturist Association, a new national industry group whose 
600+ members represent fish producers, feed mills, processors, and 
government and private-sector entities. The U.S. soy meal monetized to 
fund the project was the first sold bulk in barges in Cambodia, with 
41,800 MT of U.S. soybean meal sold to Cambodian companies.
    However, there remains an issue with the complexity of monetization 
requirements in international food aid programs. While monetization can 
provide new trade opportunities, the monetization process to support 
large operating budgets is complicated and subjects projects to the 
whim of world markets and prices that can negatively impact the 
project's ability to be planned effectively and produce desirable 
outcomes. ASA recommends the next farm bill look at additional 
opportunities for flexibility in monetization requirements.
    While WISHH has a strong desire to continue to utilize FFPr in its 
market development and expansion strategy, the program's recent 
revisions to its strategic plan raise concerns for U.S. soybean 
growers. Starting in 2019, the FFPr priorities shifted away from 
projects supporting the export and market development of U.S. 
commodities and moved to the support and expansion of nuts, spices and 
coffee grown abroad to be imported to the U.S. This move has left many 
cooperators unable to engage in FFPr projects and use these projects to 
build trade demand for U.S. commodities. Furthermore, the 2021 FFPr was 
awarded to a sole entity, and the sale of wheat to the Government of 
Sudan was an unprecedented--and concerning--step in this program, which 
is designed to focus on strengthening agricultural productivity and 
expanding trade of agricultural products.\3\
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    \3\ https://soygrowers.com/wp-content/uploads/2021/02/2-3-2021-
Food-for-Progress-letter-FINAL.pdf.
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    Language in the Fiscal Year 2022 omnibus appropriations report 
addressed Congress' concern regarding this award and the precedent it 
could set by allocating an entire year's worth of funding to a single 
entity. We respectfully request the Committee's attention to this issue 
in the next farm bill to ensure the approach is not repeated in the 
future.
McGovern-Dole Food for Education
    WISHH has worked in institutional and school feeding throughout 
Sub-Saharan Africa and Latin America through a variety of USDA funding 
sources, in addition to leveraging outside funding. McGovern-Dole 
projects allow WISHH to reach new markets for U.S. soy while helping 
close the protein gap and addressing nutrition challenges in developing 
markets. In 2015, WISHH joined Plant Aid in a McGovern-Dole Food for 
Education project in Mozambique. The project included a comprehensive 
school feeding project, complemented by a major literacy component, as 
well as child health, nutrition education, teacher training, water, and 
sanitation components. The daily school feeding meal included a 
porridge made from a corn-soy blend to 74,000 students across 270 
schools. WISHH led a comprehensive nutrition education campaign in the 
beneficiary districts that allowed the community to learn about the 
importance of protein. WISHH also trained 3,228 food preparers from the 
264 target schools in hand washing, safe food preparation and storage 
practices, surpassing its goal of 1,320 food preparers. Of the 3,228 
participants, 3,144 were females, a target audience of the program.
    Available commodities for FY22 food aid solicitations (Appendix H 
of the Notice of Funding Opportunity) include corn-soy blend, corn-soy 
blend plus, soybean meal, soybean oil, soyfortified bulgur, and soy-
fortified cornmeal, but soy flour and textured soy protein (TSP) are 
omitted. This is concerning, as soy flour and TSP can easily be added 
to existing culturally appropriate school meals to provide additional 
protein. USDA has offered no explanation as to why these two products 
are excluded from McGovern-Dole. Adding these two additional soy 
products to the commodities basket would allow for additional protein 
consumption and help build preference for including soy in school 
meals. ASA recommends adding soy flour and TSP to the list of eligible 
commodities available for donation under McGovern-Dole.
Conclusion
    Over the past year, ASA has worked intensively with grower leaders 
and other soybean farmers across the U.S. to deeply analyze the 
efficacy of 2018 Farm Bill programs, including the Trade Title. While 
that work is not yet finalized, the recommendations in this written 
statement are consistent with grower feedback and with ASA's policy 
resolutions.
    As this Committee deliberates the next farm bill, ASA encourages 
you to remember the importance of international trade to the U.S. 
agricultural community. U.S. soybean growers are proud to provide a 
sustainable source of high-quality protein, which is vital to feeding 
millions around the world, and we thank the Committee for its prior 
investments in USDA's trade programs and again, for the opportunity to 
comment on these programs in the upcoming 2023 Farm Bill. ASA looks 
forward to working with you on these important issues.
                                 ______
                                 
 Submitted Letter by Hon. Dusty Johnson, a Representative in Congress 
                           from South Dakota
April 5, 2022

 
 
 
Hon. Katherine Tai,                  Hon. Thomas J. Vilsack,
United States Trade Representative,  Secretary of Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Ambassador Tai and Secretary Vilsack,

    Thank you for prioritizing robust implementation and enforcement of 
the United States-Mexico-Canada Agreement (USMCA), particularly its 
dairy provisions. Harnessing the full use of USMCA's expanded access 
for U.S. dairy exports remains a key priority for dairy farmers and 
manufacturers employing thousands of Americans in our districts and 
across the country. We appreciate the strong action taken by the 
Administration in moving forward with USMCA's first dispute settlement 
case, which found that Canada is improperly limiting access to its 
dairy market in contravention of USMCA. Translating this win into an 
outcome that delivers the full benefit of the agreement is vital for 
America's dairy industry.
    We noted with interest Canada's recently proposed allocation and 
administration policy changes for dairy tariff-rate quotas (TRQs). We 
believe this proposal would continue to fall short of what USMCA 
requires. Accordingly, we urge you to insist on much deeper reforms to 
bring Canada's dairy TRQ allocation system into compliance with its 
USMCA commitments. For instance, Canada's proposal continues to exclude 
major swaths of its food and agricultural sector from the TRQ by 
blocking access of retailers and food service companies. Additionally, 
its proposed approach to allocating shares of access would continue to 
deliver the bulk of the TRQ volumes to U.S. dairy manufacturers' 
Canadian competitors. In short, Canada's proposal amounts to little 
more than window dressing as it appears designed to effectively 
preserve the status quo of who can bring in the vast majority of U.S. 
dairy products under USMCA's dairy TRQ.
    As the first dispute resolution case under the USMCA, we know you 
understand well that this dispute will set a powerful precedent. The 
decisions the United States Government makes next will send a clear 
signal to our trading partners regarding future dispute panels and the 
degree of compliance we will require. A deal's a deal; it's not too 
much to ask that our trading partners live up to their end of the 
bargain. That is why it is critical that this compliance stage of the 
USMCA dairy case demonstrate that the USMCA enforcement process works--
not just to deliver the right finding, as it did in January--but to 
ensure faithful implementation of the overall agreement and drive real, 
tangible reforms that are seen on store shelves, to the benefit of 
American dairy producers and manufacturers, as intended.
    We appreciate your continued commitment to robust USMCA 
enforcement, and we look forward to the day where American farmers, 
manufacturers, workers, and others benefit fully from this trade 
agreement that our nation has so painstakingly negotiated.
            Sincerely,
            
            

 
 
 
Hon. Ron Kind,                       Hon. Tom Reed,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Antonio Delgado,                Hon. Glenn Thompson,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Suzan K. DelBene,               Hon. Dusty Johnson,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jim Costa,                      Hon. David G. Valadao,
Member of Congress                   Member of Congress
 

                                 ______
                                 
                           Submitted Question
Question Submitted by Hon. David Rouzer, a Representative in Congress 
        from North Carolina
Response from Daniel B. Whitley, Administrator, Foreign Agricultural 
        Service, U.S. Department of Agriculture
    Question. Food for Progress is an excellent long-term international 
development and market development program administered by USDA. 
However, I am concerned with Food for Progress's recent strategic plan, 
which has emphasized key priority areas around cacao, coffee, spices, 
Sanitary and Phytosanitary Standards (SPS), Trade Facilitation 
Agreement (TFA), and Climate Smart Agriculture (CSA).
    I am concerned that focusing on commodities such as cacao, coffee, 
and spices--commodities that we do not produce domestically--will 
exclude the majority of U.S. cooperators from fully utilizing Food for 
Progress in their international development projects.
    Can you speak to how Food for Progress developed this narrow set of 
priorities, and how these priorities can be expanded and improved upon 
in advance of the FY 2024 funding opportunity to allow more U.S. 
cooperators to participate?
    Answer. Using Commodity Credit Corporation (CCC) funds, Food for 
Progress (FFPr) projects sell donated U.S. agricultural commodities 
overseas in target markets and use the proceeds of these sales to fund 
agricultural development projects. It is through these monetization 
sales that U.S. agricultural commodities are utilized to generate 
proceeds. USDA communicates with cooperators regularly, while also 
maintaining a transparent and clear competitive bidding process of the 
commodities. Soy, rice, and wheat comprise the bulk of FFPr projects' 
commodity utilization. Cooperators often ask for updates and 
periodically engage USDA program administration staff to ask questions 
and provide feedback. In FY21, FFPr utilized 440,890 MT of U.S. grown 
wheat,162,050 MT of U.S. grown oilseeds and 78,640 MT of U.S. grown 
rice. Over the preceding 5 years, FFPr monetized an average of 242,056 
MT in U.S. agricultural commodities annually.
    In alignment with the FFPr statute, the two highest level program 
objectives are increased agricultural productivity and expanded trade 
of agricultural products in developing countries and emerging 
democracies. Starting in 2019 FFPr, developed a slate of thematic areas 
for interventions, which amplified the impact of our investments by 
focusing more thoroughly and strategically on a select group of project 
themes rather than implementing a series of one-time projects. The 
overarching themes included interventions in sanitary and phytosanitary 
systems (SPS), trade facilitation and in high value crops that are not 
grown in the United States and don't compete with U.S. agriculture, but 
are important products for the American consumer. These crops are 
largely grown and produced in developing countries, but also have 
reflected a disparity in which local farmers earn an inequitable part 
of that value chain. Thus, FFPr activities seek to address the value 
chain limitations and inequities, to increase household income and 
reduce food insecurity. In FY22, FFPr added climate-smart agriculture 
as a thematic area.
    Each year, with a focus on both strategic decisions (e.g., thematic 
areas) and that year's project cycle, USDA coordinates with 
stakeholders, researches and analyzes global development data, conducts 
Requests for Information (RFIs), and holds public meetings that are 
open to the private-sector, cooperators, and the private-voluntary 
organization (PVO) community. It is through these engagements and 
meetings that cooperators provided feedback or suggestions on the 
current and future thematic areas. In addition, information is provided 
regarding the application process for current awardees and new 
applicants to facilitate and encourage eligible organizations to apply. 
As USDA seeks to develop its slate of thematic areas for FY23 and 
beyond, we will continue our outreach to collect input from the 
stakeholder community. Further, we will continue our current practice 
of welcoming proposals for projects that are not specifically included 
in predetermined thematic areas through the Notice of Funding 
Opportunity to expand upon thematic areas as appropriate.


 
                     A 2022 REVIEW OF THE FARM BILL

            (THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM)

                              ----------                              


                        THURSDAY, APRIL 28, 2022

                  House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: Representatives David Scott of Georgia, 
Costa, McGovern, Spanberger, Hayes, Delgado, Sablan, Kuster, 
Plaskett, O'Halleran, Carbajal, Lawson, Craig, Harder, Axne, 
Schrier, Panetta, Thompson, Austin Scott of Georgia, Crawford, 
DesJarlais, LaMalfa, Davis, Allen, Kelly, Bacon, Johnson, 
Baird, Cloud, Mann, Feenstra, Miller, Cammack, and Letlow.
    Staff present: Lyron Blum-Evitts, Chu-Yuan Hwang, Ashley 
Smith, Caleb Crosswhite, Jennifer Tiller, John Konya, and Dana 
Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. Welcome. This hearing will now come to order. 
Welcome, and thank you for joining us at today's hearing 
entitled, A 2022 Review of the Farm Bill: The Supplemental 
Nutrition Assistance Program. After brief opening remarks, 
Members will receive testimony from our distinguished witness 
today, and then the hearing will be open to questions. And I 
will start first with my opening statement.
    Good morning, everyone, and welcome to another important 
hearing, which is the continuation of our work to review the 
2018 Farm Bill and prepare for the 2023 Farm Bill. Today's 
hearing will review the 2018 Farm Bill provisions related to a 
very important USDA program, the Supplemental Nutrition 
Assistance Program, also known as SNAP.
    SNAP is one of the most impactful programs that we work on 
in this Committee. It is the nation's largest anti-hunger 
program. It addresses the food insecurity of those most in need 
in our country. In 2020, 10.5 percent of U.S. households or 
13.8 million Americans were food-insecure. And the COVID-19 
pandemic made it very difficult for many families to even 
afford the basic necessities, especially including food.
    But thankfully, throughout the pandemic, SNAP has worked as 
it should, serving as an economic stabilizer for our nation. In 
2020, SNAP is estimated to have lifted 2.9 million Americans 
out of poverty and ensured that millions of our friends, 
families, and neighbors could put food on their tables for 
their families, despite the difficult times we were facing. And 
as we grapple with the ongoing impact of this pandemic and new 
challenges to our food system, including from the Russian--
terrible, criminal--invasion of Ukraine, I know SNAP will 
continue to be a critical lifeline for low-income Americans, 
ensuring they are able to purchase a nutritionally adequate 
diet.
    In 2018, our farm bill passed with a strong bipartisan 
support, including many SNAP-related provisions. One of the 
most impactful has been the mandate that USDA reevaluate the 
Thrifty Food Plan. The resulting 2021 Thrifty Food Plan was the 
first in 5 decades to not be held cost-neutral, allowing it to 
truly reflect the cost of an adequate diet. And thanks to the 
2018 Farm Bill, low-income Americans receiving SNAP benefits on 
average received $36.24 more per person per month or about 
$1.19 more per person per day. And in my own district, 
Georgia's 13th District, the latest data shows that more than 
35,000 households participated in SNAP, or 13 percent of all 
households in my district, and each of them are seeing an 
increase in their SNAP benefits thanks to the Thrifty Food Plan 
reevaluation.
    And it is not just Georgia. The impact these increases in 
benefits are being felt across every community in our nation, 
including rural communities, which participate in SNAP at a 
higher rate and experiences a larger economic impact from SNAP 
benefits spending than even in our urban areas.
    Additionally, the 2018 Farm Bill included important 
provisions impacting SNAP employment and training, the quality 
control system, nutrition education, and much more. I look 
forward to hearing from our distinguished panel today about 
these provisions, as well as future opportunities to maintain 
and improve this critical program.
    One particular area of interest for me looking forward is 
veteran hunger. Research has found that veterans have a 7.4 
percent greater risk for food insecurity than non-veterans, and 
rates are even higher among our veterans with disabilities, 
33.6 percent of whom face food insecurity. And that is why I am 
working closely with our Subcommittee Chairwoman on this, the 
gentlelady from Connecticut, who is spearheading excellent 
legislation to address this, and we will hear more from her on 
this later.
    Representative Hayes is the Chairwoman of our Subcommittee 
on Nutrition, Oversight, and Department Operations, and she is 
doing an excellent job. She has introduced bipartisan 
legislation to make it easier for veterans with disabilities to 
access SNAP, the Feed Hungry Veterans Act of 2022 (H.R. 7272), 
of which I am a proud cosponsor, co-leading with that bill. 
And, as I said, we will hear more from the Chairwoman on this 
later.
    I look forward to working with all the Members of our 
Committee on this important legislation, and I hope this 
hearing will provide us all an excellent opportunity to 
evaluate ways that we can work together to improve SNAP by 
making it more accessible for Americans facing food insecurity. 
Thank you again. We look forward to our panelists.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning and welcome to another important hearing, which is a 
continuation of our work to review the 2018 Farm Bill and prepare for 
the 2023 Farm Bill.
    Today's hearing will review the 2018 Farm Bill provisions related 
to a very important USDA program: the Supplemental Nutrition Assistance 
Program, also known as SNAP.
    I believe that SNAP is one of the most impactful programs that we 
work on in this Committee. I look forward to discussing how SNAP--as 
the nation's largest anti-hunger program--addresses the food insecurity 
of those most in need in this country.
    In 2020, about 10.5 percent of U.S. households, or 13.8 million 
Americans, were food-insecure. As we know, the COVID-19 pandemic made 
it difficult for many families to afford basic necessities, and in many 
cases, this included food.
    Thankfully, throughout the pandemic, SNAP has worked as it should, 
serving as an economic stabilizer for our nation. In 2020, SNAP is 
estimated to have lifted 2.9 million Americans out of poverty and 
ensured that millions of our friends, family, and neighbors could put 
food on their tables, despite the difficult times we were facing.
    As we grapple with the ongoing impact of the pandemic and new 
challenges to our food system resulting from the Russian invasion of 
Ukraine, I know SNAP will continue to be a critical lifeline for low-
income Americans, ensuring they are able to purchase a nutritionally 
adequate diet.
    The 2018 Farm Bill, which passed with strong bipartisan support, 
included many important SNAP-related provisions.
    One of the most impactful has been the mandate that USDA reevaluate 
the Thrifty Food Plan. The resulting 2021 Thrifty Food Plan was the 
first in 5 decades to not be held cost neutral, allowing it to truly 
reflect the cost of an adequate diet.
    Thanks to the 2018 Farm Bill, low-income Americans receiving SNAP 
benefits, on average, receive $36.24 more per person per month--or 
about $1.19 more per person per day.
    In my District--Georgia's 13th--the latest data shows that more 
than 35,000 households participated in SNAP, or 13 percent of all 
households in my District, and each them are seeing an increase in 
their SNAP benefits thanks to the Thrifty Food Plan reevaluation.
    And it's not just in Georgia, the impact of that increase in 
benefits is being felt across every community in the U.S., including 
rural communities, which participate in SNAP at higher rates and 
experience a larger economic impact from SNAP benefit spending than 
urban areas.
    Additionally, the 2018 Farm Bill included important provisions 
impacting SNAP employment and training, the quality control system, 
nutrition education, and more.
    I look forward to hearing from our distinguished panel today about 
these provisions, as well as future opportunities to maintain and 
improve this critical program.
    One particular area of interest for me, looking forward, is veteran 
hunger. Research has found that veterans have a 7.4 percent greater 
risk for food insecurity than non-veterans. And rates are even higher 
among veterans with disabilities, 33.6 percent of whom face food 
insecurity.
    Representative Hayes--the Chairwoman of our Subcommittee on 
Nutrition, Oversight, and Department Operations--has introduced 
bipartisan legislation to make it easier for veterans with disabilities 
to access SNAP--the Feed Hungry Veterans Act--and I am proud to be a 
co-lead of that bill.
    I look forward to working with all the Members of our Committee on 
this important legislation, and I hope this hearing provides us all an 
opportunity to evaluate ways we can work together to improve SNAP by 
making it more accessible for Americans facing food insecurity.
    Thank you again to the Members and witnesses for being here today.
    With that, I'd now like to welcome the distinguished Ranking 
Member, the gentleman from Pennsylvania, Mr. Thompson, for any opening 
remarks he would like to give.

    The Chairman. And with that, I would like to now welcome my 
good friend, our distinguished Ranking Member from 
Pennsylvania, Ranking Member Thompson.

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

    Mr. Thompson. Mr. Chairman, thank you so much. Good 
morning, everybody. Welcome, Deputy Under Secretary Dean and 
Administrator Long. Administrator, I hear this is your first 
appearance at a Congressional hearing, and so we are glad to 
have you here and welcome to the historic Agriculture Committee 
hearing room. And I see Associate Administrator Shahin has 
accompanied you both. Ms. Shahin, please accept my heartfelt 
gratitude for your work at the Department, and I understand you 
are going to be retiring. And both your presence and your 
performance are going to be sadly missed. Thank you for 
everything you have done, and I wish you a peaceful, easy 
retirement.
    Moving on to say this hearing is long overdue is an 
understatement, so I am so glad we are all here today. The 
agency which occupies more than 80 percent of this Committee's 
spending has gone unchecked for nearly 4 years. Each section of 
title IV of the 2018 Farm Bill has made nominal changes to a 
program that has since exploded to serve more than 40 million 
individuals at a current cost of roughly $9 billion per month.
    And what frustrates me most at this moment--and the 
Nutrition Title is important to me as a former Chairman of the 
Nutrition Subcommittee in the 2018 Farm Bill. I am very 
frustrated at this moment that my Democratic colleagues have 
already drawn a line in the sand that this program will not be 
touched in the next reauthorization of the farm bill. That is 
why we have reauthorizations, to make sure that we are getting 
it right and that we are making adjustments where needed. How 
can we be so certain everything in title IV is perfect or 
untouchable?
    Now, I disagree, and I am sure that we will hear today that 
there are things we can improve and things that we can change. 
And quite frankly, on the Agriculture Committee being open-
minded and preparing for the next farm bill, any farm bill is a 
really good state of mind. Being shortsighted on policy 
improvements shortchanges the millions of households who depend 
on SNAP when their lives take a turn, when they find themselves 
in financial distress, often for short periods of time.
    So, despite my colleagues' narrow outlook, I think we need 
to contemplate SNAP through four principles, particularly as we 
shift from emergency spending and administration to more 
targeted informed programming. First, we need to further 
explore how do we serve recipients through innovation and 
flexibility? If the pandemic has taught us one thing, it is 
there is no one way to serve families in need.
    The second principle, we must think about the best ways to 
guide recipients to independence through employment, education, 
and training, while providing for their nutritional support. 
Now, waivers related to work under the former Administration 
were logical. They are now clearly keeping employable 
individuals idle and disengaged, and it is time to talk about 
reemployment with a specific focus on those who have left the 
labor force.
    Third principle, we can't deny program integrity has been 
compromised. I want to work with the Department to return to 
and maintain the virtues of SNAP. That includes normal modes of 
data collection and normal modes of analysis and dissemination 
of information to ensure the responsible use of program funds.
    And a final principle I would offer up that should guide 
our work, guides my work, and last and perhaps most 
importantly, we must come together to improve access and 
promote healthy foods and improve nutrition. Employment, 
healthcare costs, and general longevity are highly dependent on 
the foods that we consume. Together with modernized nutrition 
education initiatives, the nutrition research funding secured 
in the Consolidated Appropriations Act of 2021 (Pub. L. 116-
260), and the existing library of research on healthy eating, 
USDA is uniquely positioned to improve the nutrition of 
millions of households, not just those deemed healthy.
    I think my colleagues across the aisle can agree with each 
of these principles. Where we diverge is how to preserve the 
program for those in actual need without regulatory loopholes 
and fuzzy interpretations of the law, both of which exploit the 
very intent of the program.
    Now, where we diverge is the reality that this one title 
will cost taxpayers nearly $1 trillion over the next 10 years. 
With this exorbitant spending increase, namely because of the 
less than transparent and questionable Thrifty Food Plan 
update, the Biden Administration and the current Majority 
consciously put a colossal financial and political target on 
any future farm bill, compromising not only Nutrition Title but 
the 11 other titles which support and protect every farmer, 
rancher, forester, and rural community, the very people that 
actually provide the food that we try to deliver for nutrition 
support.
    Adding insult to injury, many of us learned of the Thrifty 
Food Plan scheme through a choreographed effort by pro-poverty 
advocates and their media allies. Beginning on January 22, 
2021, more than three dozen outlets, including the Washington 
Post, NBC News, Bloomberg, CNN, and CBS News uniformly touted 
the Department's work to rapidly proceed with the egregious TFP 
update.
    And while we will continue to debate this attempt at 
executive overreach, I do want to ask one thing of you, Madam 
Deputy Under Secretary, just to be more forthcoming. As the 
Ranking Member of this Committee, I prefer to learn directly 
from the Administration, not lobbyists or reporters or the 
internet.
    And last, I do hope today allows for some conversation on 
pandemic-related policies and spending. Mr. Chairman, I ask 
unanimous consent to submit for the record an April 15th timely 
article by The Wall Street Journal Editorial Board entitled, 
The Eternal COVID Emergency.
    [The article referred to is located on p. 817.]
    The Chairman. Without objection.
    Mr. Thompson. Thank you, Mr. Chairman. I remain concerned 
pandemic aid is set to become endemic aid and that various 
issues caused by this Administration's own actions and, at 
times inaction, have caused my colleagues and their mouthpieces 
within the media to think emergency allotments or SNAP-related 
waivers should be carried on in perpetuity, and I beg to 
differ.
    With that in mind, I also look forward to an implementation 
update on each of the relevant sections of the 2018 Farm Bill 
and the agency's timeline to implement any outstanding 
provisions. I hope we can have an honest conversation about 
what is working and what is not working and how can we move 
forward.
    Thank you again, Ms. Dean and Ms. Long. And with that, Mr. 
Chairman, I yield back.
    The Chairman. Thank you, Ranking Member. And now, I would 
like to welcome the distinguished Nutrition, Oversight, and 
Department Operations Subcommittee Chairwoman, the gentlewoman 
from Connecticut, Mrs. Hayes, for your opening statement.

  OPENING STATEMENT OF HON. JAHANA HAYES, A REPRESENTATIVE IN 
                   CONGRESS FROM CONNECTICUT

    Mrs. Hayes. Thank you, Mr. Chairman, Ranking Member 
Thompson, and this Committee, for hosting this very important 
hearing, and thank you to our guests from the USDA, Deputy 
Under Secretary Dean and Administrator Long, for joining us 
today. We really appreciate your time and expertise.
    I want to first take the opportunity to frame this 
conversation. The 2023 Farm Bill will not be like any other 
farm bill. It will be a seminal historic piece of legislation. 
Over the past 2 years, we have seen our communities struggle 
with food insecurity caused by an unprecedented global crisis. 
We have also seen communities come together to implement 
creative solutions from expanding the capacity of food banks to 
partnering with local farms to ensuring that children can 
access school meals through electronic benefits in non-
congregate settings. This farm bill is our first opportunity to 
recognize the unique challenges that many people face and our 
commitment to our communities to have permanent solutions. It 
is our first chance to respond to the glaring gaps in nutrition 
policy highlighted so clearly through the past 3 years with 
long-term improvements and solutions. Of course, the 
Supplemental Nutrition Assistance Program, or SNAP, will be 
central to that effort.
    The vital importance of SNAP is not theoretical. I have 
experienced firsthand how the program gives people stability 
when they are facing life's challenges and have brought 
recipients before my Subcommittee to share their stories before 
Congress. I believe wholeheartedly in the mission of SNAP, the 
life-changing impact it has on recipients, and the incredible 
support it provides our national economy and food systems.
    SNAP is a highly responsive program which serves as a 
stabilizer in times of economic downturn, something we saw 
clearly during the pandemic. It provides economic stimulus to 
households in every community. SNAP is a targeted program which 
serves the lowest-income Americans, incentivizes work, and 
provides long- and short-term health benefits to those who 
participate.
    As a result of the 2021 Thrifty Food Plan reevaluation, 
mandated by the last farm bill, the impact of SNAP is growing 
as recipients receive more adequate benefits. Specifically, an 
average of $1.19 more per person per day. This is modest, but 
the impact increases in our communities and has made tangible 
improvements to the everyday lives of my neighbors.
    However, we know that there are still people who are 
falling through the cracks. USDA research has found that 
veterans in particular face a greater risk for food insecurity 
than non-veterans. On our Subcommittee, Rep. Bacon and I had a 
hearing last year on the levels of veteran hunger that permeate 
our communities. I heard directly from veterans on how the lack 
of access to the SNAP program negatively impacts their lives, 
their ability to look for work, their mental health, and their 
nutrition needs. Their stories echoed the research which shows 
that an unacceptable 33.6 percent of disabled veterans are 
food-insecure. That is not a statistic that any of us should be 
proud of.
    After the hearing, I began working on a legislative fix to 
address the issue, and I introduced the bipartisan Feed Hungry 
Veterans Act of 2022 with the support of Chairman Scott and 
Delegate Aumua Amata Coleman Radewagen. My bipartisan bill will 
address veteran hunger by making it easier for veterans with 
disabilities to access SNAP benefits.
    In addition to exploring this issue further, I look forward 
to hearing more today from Deputy Under Secretary Dean and 
Administrator Long about the provisions in the 2018 Farm Bill, 
the status of implementation, and recommendations for the 
upcoming farm bill. As the Chairwoman of the Subcommittee on 
Nutrition, Oversight, and Department Operations, it is critical 
for me to hear from USDA about how we stabilize and sustain 
nutrition programs and how we can improve them in the upcoming 
farm bill.
    We spend a lot of money on a lot of programs in Congress. 
Programs that feed people have to be included in those numbers. 
I don't know about schemes or media plots, but what I do know 
is that I have hungry people in my district, and as their 
Representative, I am going to make sure that I can do 
everything that I can to close those gaps because most of those 
people are children.
    I thank you again, Mr. Chairman, for holding this Committee 
hearing today and I look forward to hearing from the panel who 
has joined us. And with that, I yield back.
    The Chairman. Thank you, Chairwoman Hayes.
    And now I would like to welcome the distinguished 
Nutrition, Oversight, and Department Operations Subcommittee 
Ranking Member, the gentleman from Nebraska, Mr. Bacon.
    Mr. Bacon. Thank you.
    The Chairman. Please give your opening statement.

   OPENING STATEMENT OF HON. DON BACON, A REPRESENTATIVE IN 
                     CONGRESS FROM NEBRASKA

    Mr. Bacon. Thank you, Mr. Chairman. I appreciate it.
    I appreciate the opportunity to share some thoughts today. 
I also want to thank the Deputy Under Secretary Dean and 
Administrator Long for being here.
    I would like to just start by saying we are so blessed to 
live in this great country. We are the greatest of nations. Our 
free market system and our freedoms have produced more 
prosperity than any nation ever has had. We have elevated more 
people out of poverty than any other country, and so we should 
keep that in mind. And we, as a great nation, we want to live 
up to our values and our morals and provide a good safety net 
to protect our citizens.
    Our SNAP is a part of that safety net, and it is intended 
to be a supplement, but not 100 percent subsidy to offset 
costs. I feel like we have to stress that periodically because 
some folks want to treat it as more than just a personal 
payment of the costs.
    So, as we think of the next farm bill and really the future 
of SNAP, I echo the Ranking Member's comments in that we need 
to have real conversations about how to make this program 
better. We look to our taxpayers, to those who use the program, 
to make it more efficient, to make it more effective, and we 
want to ensure that it is providing a hand up, and not just a 
handout. We want to help people get out of poverty. And as the 
Ranking Member said, too, we just can't draw a line in the sand 
to say this program is untouchable. That is not how good policy 
comes about. So as the agency walks through the implementation 
updates, I hope my colleagues think through areas for 
improvement and how to use this magnificent amount of money 
that we have and to do so more efficiently and better.
    The anecdotes I hear about some of these non-government 
organizations that serve as the intermediary, having outlandish 
administrative expenses, must be stopped. We should review 
that. I think our taxpayers expect us to take a look at that 
and reduce those costs.
    And last, for the sake of our country, our military 
readiness, and the healthcare of our system and for our young 
adults, we need to do a better job and focus on how to target 
and make healthy eating habits better. We need to stress the 
education here. Seventy-two percent of our young adults today 
do not qualify to join the military, mainly for fitness, and so 
I bring this up not because of the military point but it is for 
the health and the future of these young adults and we want 
them to have a better future. So, this is a problem our country 
needs to look at and tackle.
    So, I hope the conversation today lends to this focus and 
does better. And I would also like to just echo Chairwoman 
Hayes, who I work with on the Nutrition Subcommittee about the 
veterans and SNAP. I am on the Armed Services Committee as 
well, and we want to look at enlisted pay and adjust it. There 
is no reason why our junior enlisted should qualify for SNAP. 
We have to do better there.
    So, with that, I yield back, Mr. Chairman, and I appreciate 
the time.
    The Chairman. Thank you, Congressman Bacon.
    And now the chair would request that other Members submit 
their opening statements for the record so the witness may 
begin her testimony and to ensure that there is ample time for 
questions.
    [The prepared statement of Ms. Adams follows:]

Prepared Statement of Hon. Alma S. Adams, a Representative in Congress 
                          from North Carolina
    The United States Supplemental Nutrition Assistance Program (SNAP) 
is the nation's most extensive Federal food aid program. Administered 
by the Department of Agriculture, SNAP provides food assistance to 
those who need it most, including working families, veterans, active-
duty military members, seniors, college students, and refugees. SNAP's 
positive impact is felt by recipients and the American economy alike: 
according to the Center on Budget and Policy Priorities, SNAP 
assistance immediately benefits families by bridging temporary periods 
of unemployment, family crises or recessions.\1\ * Today, SNAP serves 
as a cornerstone of our country's social safety net.
---------------------------------------------------------------------------
    \1\ ``SNAP Has Responded to the Economy As Designed,''  Center on 
Budget and Policy Priorities, accessed May 10, 2022, https://
www.cbpp.org/snap-has-responded-to-the-economy-as-designed.
    * Editor's note: footnotes annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    The 2023 Farm Bill offers a chance to strengthen the SNAP program 
and provide the support needed to meet the needs of hard-working 
Americans. The devastating ramifications of the COVID-19 pandemic have 
proven that current SNAP allotments do not meet the life-sustaining 
needs of its recipients.
    To meet those needs, I introduced the Closing the Meal Gap Act of 
2022, building upon a 5 year process with stakeholders, agencies, and 
fellow Members of Congress.\2\ I am proud to sponsor this legislation 
with Nutrition Subcommittee Chair Jahana Hayes.
---------------------------------------------------------------------------
    \2\ Tara Michel, ``Closing the Meal Gap Act of 2020 Will Strengthen 
the SNAP Program.''  Amsterdam News, last modified April 28, 2020, 
accessed May 10, 2022, https://amsterdamnews.com/news/2020/04/28/
closing-meal-gap-act-2020-will-strengthen-snap-pro/.
---------------------------------------------------------------------------
    No one should have to wonder where their next meal will come from. 
And yet, the latest Census Household Pulse Survey shows that more than 
20 million Americans struggle with food insecurity in the richest 
country in the world.\3\ Despite the Biden Administration renewing its 
Federal public health emergency declaration regarding the coronavirus 
pandemic, emergency allotments for SNAP and other supplemental 
nutrition programs have expired in nearly a dozen states.\4\
---------------------------------------------------------------------------
    \3\ ``Household Pulse Survey,'' United States Census Bureau, last 
modified February 7, 2022, accessed May 12, 2022, https://
www.census.gov/data-tools/demo/hhp/#/.
    \4\ United States Department of Agriculture. ``SNAP COVID-19 
Emergency Allotments Guidance.'' Food and Nutrition Service. Accessed 
May 10, 2022. https://www.fns.usda.gov/snap/covid-19-emergency-
allotments-guidance.
---------------------------------------------------------------------------
    To add insult to injury, high levels of inflation has severely 
impacted SNAP benefits. Updated yearly, the next adjustment will not 
take effect until the next fiscal year. As a result, SNAP recipients 
continue to receive benefits based on the cost of food from June 2021. 
According to the Food Research and Action Center, SNAP households are 
under immense pressure to figure out how to cope with what equates to 
losses amidst current and future food prices this year.\5\
---------------------------------------------------------------------------
    \5\ Allison Lacko and Geraldine Henchy, ``Hunger, Poverty, and 
Health Disparities During COVID-19 and the Federal Nutrition Programs' 
Role in an Equitable Recovery,''  Food Research and Action Center, 
last modified September 2021, accessed May 12, 2022, https://frac.org/
wp-content/uploads/COVIDResearchReport-2021.pdf.
---------------------------------------------------------------------------
    The Closing the Meal Gap Act will help to address these issues by 
raising the baseline benefit for all SNAP households and allocating 
more funds to those with large medical and housing expenses. The 
Closing the Meal Gap Act will increase benefits by incorporating the 
Low-Cost Food Plan into the SNAP formula instead of the Thrifty Food 
Plan to better consider how much working Americans spend on food. 
Furthermore, the Act will eliminate eligibility limits and unrealistic 
barriers by permanently authorizing the standard medical deduction in 
every state for seniors and disabled individuals applying for SNAP 
benefits at a minimum of $140.\6\ Individuals with high expenses could 
continue to apply for a higher, itemized medical deduction under the 
plan.
---------------------------------------------------------------------------
    \6\ ``Adams, Gillibrand, Hayes, Lee, and Velazquez Announce 
Introduction of the Closing the Meal Gap Act of 2021,''  Congresswoman 
Alma Adams, last modified June 24, 2021, accessed May 10, 2022, https:/
/adams.house.gov/media-center/press-releases/adams-gillibrand-hayes-
lee-and-vel-zquez-announce-introduction-closing.
---------------------------------------------------------------------------
    Other barriers the Closing the Meal Gap Act would eliminate include 
a cap on the Excess Shelter Deduction in the SNAP formula for all 
households to consider the cost of living for SNAP recipients in areas 
with high rent and utilities and the elimination of time-limits on 
benefits for all Americans.\7\ By passing this Act, Congress can ensure 
that the USDA works within their own motto: ``do right and feed 
everyone.''
---------------------------------------------------------------------------
    \7\ Congresswoman Alma S. Adams, Ph.D., and Senator Kirsten 
Gillibrand, ``The Closing the Meal Gap Act of 2021,''  Congresswoman 
Alma Adams, last modified June 17, 2021, accessed May 10, 2022, https:/
/adams.house.gov/sites/adams.house.gov/files/Closing%20the%20Meal
%20Gap%20Act%20-%20One%20Pager%206.17.2021.pdf.
---------------------------------------------------------------------------
    Food security and equity are and should not be partisan issues. 
Leaders across the country are urging Congress to pass the Closing the 
Meal Gap Act and continue the fight against hunger.

    Let me introduce our distinguished panel. Our witnesses 
today is Ms. Stacy Dean, who is the Deputy Under Secretary for 
Food, Nutrition, and Consumer Services, at the United States 
Department of Agriculture. She is accompanied today by Ms. 
Cindy Long, the Administrator of USDA's Food and Nutrition 
Services.
    Deputy Under Secretary Dean, please begin when you are 
ready.

   STATEMENT OF STACY DEAN, DEPUTY UNDER SECRETARY FOR FOOD, 
            NUTRITION, AND CONSUMER SERVICES, U.S. 
         DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; 
 ACCOMPANIED BY CINDY LONG, ADMINISTRATOR, FOOD AND NUTRITION 
                         SERVICE, USDA

    Ms. Dean. Thank you, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee, for inviting me to talk 
about the Supplemental Nutrition Assistance Program, or SNAP. 
As you noted, I am Stacy Dean, Deputy Under Secretary for Food, 
Nutrition, and Consumer Services at USDA, and I am joined by 
Administrator Cindy Long.
    Today, I will talk about the impact and importance of SNAP, 
its response to the pandemic, and the work underway to build 
back better to an even stronger program. SNAP is the most far-
reaching powerful tool available to ensure that all Americans 
can afford healthy food. It is a lifeline for tens of millions 
of Americans. It reduces poverty and food hardship. And SNAP 
participation during early childhood is linked to better long-
term health, education, and employment outcomes. About 70 
percent of SNAP participants are children, older Americans, or 
adults with disabilities. The program supports households from 
major cities to rural America alike, helping low-income 
workers, seniors with fixed incomes, and parents struggling to 
make ends meet to put food on the table. Households use SNAP 
benefits to purchase food at local businesses, benefiting the 
store where they shop, the truck driver who delivered it, and 
the farmers who produced it.
    As intended, SNAP expanded early in the pandemic in 
response to sudden increased need, but SNAP's powerful response 
to the pandemic has been a team effort. Congress took swift 
action to strengthen the program in recognition of 
unprecedented hardship, temporarily increasing SNAP benefit 
amounts, protecting eligibility for select groups, and 
providing USDA with special authority to allow states to adopt 
program operations to serve struggling households safely.
    USDA worked with retailers and states to expand an online 
purchasing option to meet households' needs during the 
pandemic, and today, more than 97 percent of households can use 
their benefits to buy groceries online. And states did the 
extraordinary work to process a dramatic uptick in applications 
and deliver benefits to struggling households, all while 
radically shifting their operations to respond to public health 
considerations.
    The bold action that we have taken together to help 
Americans during a time of crisis and get back on their feet 
has made a meaningful difference. Looking ahead, I want to 
touch on a few efforts we are undertaking to strengthen SNAP in 
the long-term, so let us start with the Thrifty Food Plan 
evaluation.
    As directed by Congress, last year, USDA reevaluated the 
Thrifty Food Plan, the basis for calculating SNAP benefits, to 
reflect the cost of a cost-conscious, practical, nutritious 
diet. The reevaluation concluded that the cost is 21 percent 
higher than the previous plan, which translates to about $1.19 
per person per day or 40 per person per meal. This resulted in 
the first increase in real purchasing power of SNAP benefits 
since the Thrifty Food Plan was introduced some 45 years ago.
    We are also working to support opportunities through SNAP's 
employment and training program, or E&T. In 2018 Congress acted 
to improve the quality of E&T programs, emphasizing evidence-
based practices, ensuring that we match participants with the 
right services and partner with state workforce systems. The 
farm bill signaled that E&T programs should not just be bigger, 
they should be better. We view strengthening E&T as an ongoing 
effort and welcome your continued partnership.
    And finally, we are elevating FNS's long-standing work to 
improve nutrition security, which means having consistent and 
equitable access to healthy, safe, affordable food. USDA is 
prioritizing nutrition security for all Americans by ensuring 
our programs provide meaningful support, connecting all 
Americans with healthy, safe, affordable food sources; 
developing, translating, and enacting nutrition science through 
partnership; and prioritizing equity every step of the way.
    Our goal is to come out of the pandemic in a better place 
than where we started. We are seeking to build on the 
effectiveness of SNAP and ensure it works for those it is 
intended to serve. And let me just tick off a few more areas 
that we are exploring: parity for the Territories that don't 
have access to SNAP, food sovereignty and self-governance for 
Tribal Nations, reducing barriers for vulnerable groups like 
veterans, bolstering program integrity by strengthening 
oversight and data collection, minimizing errors and enhancing 
fraud detection, and modernizing SNAP payment and shopping 
options, all while ensuring our programs are accessible to 
those who are eligible.
    The farm bill represents an important opportunity to build 
on the remarkable success of SNAP, and we stand ready to 
partner with you. And before I finish, let me just thank the 
Ranking Member for acknowledging Associate Administrator 
Jessica Shahin and her decades of service to this incredible 
program. We are going to miss her after she retires, but she 
leaves an incredible legacy.
    Thank you, and we look forward to answering your questions.
    [The prepared statement of Ms. Dean follows:]

  Prepared Statement of Stacy Dean, Deputy Under Secretary for Food, 
   Nutrition, and Consumer Services, U.S. Department of Agriculture, 
                            Washington, D.C.
    Thank you, Chairman Scott, Ranking Member Thompson, and Members of 
the Committee for the invitation to join you today to talk about the 
Supplemental Nutrition Assistance Program (SNAP) and the farm bill. I 
am Stacy Dean, the Deputy Under Secretary for Food, Nutrition, and 
Consumer Services at USDA; and I am joined today by our Food and 
Nutrition Service Administrator Cindy Long.
    As the nation's largest anti-hunger program, SNAP is critical in 
advancing USDA's goal of providing all Americans safe and nutritious 
food. It is also foundational in our efforts to tackle food and 
nutrition insecurity as well as advance equity.
    My testimony will touch on where we have been and where we are 
heading--the impact and importance of SNAP, the pandemic response, the 
work we have done and have underway to build back better to an even 
stronger program, including the Thrifty Food Plan update, supporting 
opportunity through SNAP Employment and Training, and a focus on 
nutrition security, to name a few.
    As you prepare for the next farm bill, it is worth stepping back to 
reflect on the impact and power of SNAP. SNAP is the most far-reaching, 
powerful tool available to ensure that all Americans can afford healthy 
food--it's a lifeline for tens of millions of Americans in every part 
of the country. It reduces poverty and food hardship, and participation 
by young children has been linked to better long-term health, 
education, and employment outcomes.
    Unlike most other Federal nutrition and anti-poverty programs, 
which focus on specific groups like seniors or children, SNAP serves a 
very diverse range of people. About 70 percent of SNAP participants are 
children, elderly, or adults with disabilities. The program supports 
households in major cities and across rural America. While all 
households must demonstrate that their income is low enough to qualify 
for a benefit, their circumstances differ. And SNAP is responsive to 
their differing circumstances, for example by supplementing the wages 
of low-income workers, supporting seniors struggling to make ends meet 
on fixed income, and helping parents afford healthy food for their 
children.
    One of SNAP's core strengths is its entitlement structure, which 
enables it to adapt as economic conditions change. By design, SNAP 
expands to meet increased need and contracts when the need abates, 
providing food to people and communities where and when it is needed 
most. SNAP cushions the blow for families when a parent loses a job, 
sees their hours cut, or is temporarily unable to work due to illness 
or natural disaster.
    SNAP benefits are used at local grocers, injecting demand into the 
economy. When a household uses SNAP benefits to put food on the table, 
it also benefits the store and the employees where they bought the 
food, the truck driver who delivered the food, the plant that processed 
it, and the farmers who produced it. A 2019 USDA study found that in a 
slow economy, every dollar in additional SNAP benefits leads to an 
increase of $1.54 in the overall economy.
Pandemic Response
    As it's designed to do, SNAP responded to the sudden increased need 
caused by the economic fallout in the early days of the pandemic, 
including rising unemployment and increased need for food. SNAP 
participation increased from 37 million to 43 million people in just 3 
months, underscoring the program's power in its ability to expand to 
meet families' needs during times of great hardship.
    Congress recognized that the scope of the hardship caused by the 
pandemic was unprecedented and took steps to further strengthen SNAP by 
temporarily increasing SNAP benefits as well as ensure that eligible 
households could access the program while states were transforming 
service delivery to respond to public health concerns. In fact, 
Congress went to great lengths to ensure that SNAP could be as 
responsive as it has been by adapting and bolstering the program to 
respond to pandemic conditions at least four times. One of the most 
significant enhancements that Congress provided was the option for 
states to provide eligible households with temporary SNAP Emergency 
Allotments (EAs), which are additional benefits to help households 
weather the pandemic-related economic shocks. Congress also temporarily 
increased SNAP benefits by 15 percent for all households and expanded 
SNAP eligibility for low-income college students. Through your support, 
USDA has also had authority to adapt programs to serve struggling 
families safely and additional resources to address unmet needs. 
Congress also provided other significant aid during the pandemic, 
include expanded unemployment insurance and housing supports. The 
official measure of food security, collected through a partnership 
between the Census Bureau and USDA, showed that the food security rate 
held steady between 2019 and 2020. While we have not had the chance to 
study this, many are suggesting that a strong safety net was critical 
to protecting people from increased hunger and hardship during a time 
we would have otherwise expected to see a substantial increase.
    USDA also worked to expand the SNAP Online Purchasing Pilot, which 
allows SNAP participants to shop and pay for their food online, 
expanding the same shopping options available to all consumers to those 
paying with EBT cards. This enhancement has opened up significant new 
food shopping opportunities for individuals living in food deserts and 
had a particularly positive impact on those living in rural areas. Now 
more than 97 percent of SNAP households have access to online 
purchasing across 49 states and Washington, D.C.
    Together, we have taken bold action to help Americans get back on 
their feet--these efforts have made a huge difference and underscore 
how powerful the Federal nutrition programs can be in responding to 
hunger and hardship. A strong safety-net works and we have a lot to 
learn from the experience of the past few years.
    In addition to ensuring that SNAP is adapting and responding as 
needed to the pandemic, USDA has been working on many fronts to 
strengthen SNAP for the future. I want to share some of the major 
efforts we have undertaken to strengthen SNAP in the long-term.
Looking Beyond the Pandemic
Thrifty Food Plan
    As directed by Congress in the 2018 Farm Bill, USDA conducted a 
data-driven re-evaluation of the Thrifty Food Plan which serves as the 
basis for calculating SNAP benefits. The resulting update is the first 
time the purchasing power of the plan has changed since it was 
introduced in 1975, reflecting notable shifts in the food marketplace 
and consumers' circumstances over the past 45 years. The reevaluation 
concluded that the cost of a nutritious, practical, cost effective diet 
is 21 percent higher than the previous Thrifty Food Plan. That 
translates to a modest increase of $1.19 per person per day, or 40 per 
person per meal--helping to put healthy food within reach for millions 
of Americans.
    When the Public Health Emergency (PHE) and pandemic-related benefit 
supplements end, most participants will see their benefits decrease. 
But the benefit levels participants will return to, will be at a level 
that affords them access to a healthy diet, thanks to the modernized 
TFP, which is an investment in our nation's health, economy, and 
security.
Supporting Opportunity through SNAP Employment & Training
    SNAP is an important work support and is designed to provide an 
incentive for participants to seek employment and increase their 
earnings. The overwhelming majority of SNAP participants who can work 
do so, and those who need assistance in entering the workforce can 
receive training and support services through state SNAP Employment & 
Training--or E&T--programs.
    In the 2018 Farm Bill, Congress took important steps to improve the 
quality of SNAP E&T programs, emphasizing the use of evidence-based 
practices, like case management and work-based learning. The farm bill 
also underscored the importance of matching participants with the right 
services and partnering with state workforce systems to align programs 
with the needs of participants and employers. Congress gave us clear 
direction that E&T programs should not just be bigger; they should be 
better.
    The final rule implementing these bipartisan changes became 
effective in March 2021. The final rule strengthened E&T by ensuring 
that states use evidence-based strategies to help participants get the 
skills employers need, increased the use of case management services 
for E&T participants, and allowed E&T funds to be used for subsidized 
employment and apprenticeships. The rule also encourages states to 
build high quality programs and holds states accountable for 
participant success in E&T programs.
    We are working with states to strengthen E&T through the lens of 
continuous improvement. By learning what works, we are integrating 
promising and evidence-based practices that will better the program for 
all participants. We still have a lot of work to do, and we welcome 
your continued partnership along the way as we seek to strengthen and 
improve these opportunities.
Transitioning Out of Pandemic Operations
    As I've noted, Congress acted quickly to provide USDA with 
important temporary authority during the pandemic. This allowed SNAP to 
adapt to help states respond to the sudden increased need while 
minimizing public health risks. Those operational flexibilities, along 
with extra benefits through Emergency Allotments, will end when the 
Federal Public Health Emergency (PHE) ends. We are working with states 
now to assess and build their readiness and capacity to return to 
traditional program rules and we continue to review the full array of 
existing flexibilities that states may utilize in order to streamline 
program operations.
    We will also work with states to ensure that all households that 
count on both the core program and temporary benefits understand how 
their benefits will change as authorities expire, so that they can 
manage the transitions with knowledge and confidence.
Nutrition Security--Supporting Nutrition for the Nation
    At USDA, we are committed to tackling both food and nutrition 
insecurity. Nutrition security means having consistent and equitable 
access to healthy, safe, and affordable food. It builds on and 
complements USDA's long-standing efforts to address food security. 
However, it is different in two distinct ways. It recognizes that we 
are not all maintaining an active, healthy life, and it emphasizes 
taking an equity lens to our efforts. USDA is prioritizing nutrition 
security in four ways by:

   Providing meaningful nutrition support from pregnancy to 
        birth and beyond;

   Connecting all Americans with healthy, safe, affordable food 
        sources;

   Developing, translating, and enacting nutrition science 
        through partnership; and

   Prioritizing equity every step of the way.

    I have already talked about USDA's reevaluation of the Thrifty Food 
Plan to ensure that it reflects the realistic cost of a basic, healthy 
diet, which is fundamental to ensuring that SNAP provides meaningful 
support. This has strengthened SNAP and its role as one of our most 
powerful tools to promote nutrition security, since families simply 
cannot achieve a nutritious diet, even a cost-conscious diet, without 
sufficient resources. In fact, previous research found that nearly nine 
out of ten SNAP participants struggled to achieve a healthy diet, with 
the cost of healthy food cited as the most common roadblock.
    SNAP Nutrition Education--or SNAP-Ed--also plays a key role in 
helping people lead healthier lives on a limited budget. SNAP-Ed 
teaches people how to make their SNAP dollars stretch, shop for, and 
cook healthy meals, and stay physically active. Evidence shows positive 
impact of SNAP-Ed nutrition education. For example, according to a 2019 
study among 56 land-grant universities implementing SNAP-Ed, results 
showed that 40 percent of participants ate more fruits and vegetables 
and drank fewer sugar-sweetened beverages, and 35 percent of 
participants moved more and sat less.
Building Back Better
    The public health crisis has placed unprecedented stress on 
American households, leaving in its wake millions of families 
struggling to make ends meet. This has been, and continues to be, an 
uncertain time, with impacts that will last for years to come.
    Still, our goal couldn't be clearer: to come out of the other end 
of this pandemic in a better place than where we began. SNAP is a 
powerful and effective tool to address hunger and hardship. Yet, we 
must continue to look for ways to strengthen the program and ensure it 
is working for those it is intended to serve. I have already touched on 
a number of priority areas and want to share a few more that we are 
already exploring at FNS:

   Working towards parity for the people of the Commonwealth of 
        the Northern Mariana Islands, Puerto Rico, and American Samoa;

   Working to reduce barriers for vulnerable groups including 
        seniors, individuals with disabilities and low-income college 
        students;

   Bolstering program integrity by strengthening USDA oversight 
        and data collection, minimizing improper payments and 
        administrative errors, and enhancing fraud detection;

   Supporting food sovereignty and self-governance for Tribal 
        Nations;

   Modernizing SNAP payment and shopping options, building on 
        the successful expansion of SNAP online purchasing with a focus 
        on smaller, independent grocery stores;

   Exploring avenues to reduce burdens on families, streamline 
        enrollment, and improve the participant experience to ensure 
        our programs are open and accessible to all who are eligible; 
        and

   Assessing how well SNAP addresses equity and disparities in 
        who experience food insecurity and addressing any shortcomings.

    The upcoming farm bill will be an important opportunity for 
Congress to build on the remarkable success of SNAP to date. I know 
that Members of the Committee are already considering areas for 
improvement and we look forward to working together with you on this 
effort.
    While nutrition assistance is critical, it is simply not enough to 
address the needs of struggling individuals, families, and communities. 
The pandemic has laid bare critical gaps in our safety net, 
highlighting the opportunity and urgency to lay the foundation for a 
recovery that is more equitable and just for all Americans. That is why 
the Biden Administration is calling for a comprehensive approach for 
investing in the American family to ensure that our recovery is 
inclusive and expansive by proposing, for example, expanding the Earned 
Income Tax Credit (EITC) and Child Tax Credit, and expanding access to 
affordable, high-quality childcare. These investments will strengthen 
the economy and our society from the bottom up and the middle out by 
building systems that lift up working families.
    Thank you, Chairman Scott, Ranking Member Thompson, and every 
Member of the Committee for your leadership and commitment to helping 
Americans put food on the table for their families and for your 
partnership as we continue this critical work. This Committee has a 
long history of bipartisan support for USDA's Federal nutrition 
programs and I look forward to working with you to advance our shared 
goals. Thank you again for the opportunity to join you today.

    The Chairman. Deputy Secretary Dean, thank you so much for 
your very important testimony.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. And you will be recognized for 5 minutes each in order 
to allow us to get as many questions in as we can. And again, 
as I always tell you, please keep your microphones muted until 
you are recognized so that we can minimize background noise.
    And I will start the questions. I recognize myself for 5 
minutes.
    And, Ms. Dean, I have an important question I want to ask 
you. Several of my labor union friends in Georgia have brought 
up the issue of SNAP privatization to me. And, as you know, 
SNAP law requires that states use merit system personnel to 
conduct SNAP certification, interviews, and eligibility 
determinations. However, I understand that states do have the 
flexibility to use non-merit staff, or contractors, for work 
that does not involve SNAP participant contact. And states are 
also permitted to use contractors for specific purposes that 
include SNAP participation contact with FNS approval.
    However, there has been talk about expanding the use of 
non-merit staff during the pandemic to address increased 
caseload and staffing shortages. However, I am very concerned 
that expanding the use of contractors could reduce the quality 
of service that SNAP recipients receive.
    So, my question to you is: do you believe that additional 
non-merit employee flexibilities are needed for states to 
manage their current SNAP caseloads? And if non-merit staffing 
flexibility were expanded, what impacts would you anticipate it 
having, if any, on our beneficiaries?
    Ms. Dean. Thank you, Mr. Chairman, for the question. Let me 
just start with FNS is absolutely committed to working with 
states to, basically, continuously improve program operations. 
We and they are constantly assessing new technology, new ways 
of organizing the business, new platforms to deliver services, 
and that can re-frame the question around, ``What is the role 
of state versus contract staff.'' We are constantly answering 
new questions about that.
    I think our general guiding principle through all of this 
is where the statute lies, which is that the merit system's 
personnel role--meaning state or local government workers 
really need to hold the most critical functions, which is that 
eligibility determination--and for us that includes the 
interview with clients, and of course access to highly private 
personal information. So, I don't believe that we would be 
looking for an expansion in that.
    But let me just say that the guidance that the previous 
Administration put out in 2020 that outlined areas where states 
could use contract staff I very much support, and we are in 
constant dialogue with states about where their options are. I 
think many of them don't appreciate how much flexibility they 
have in the current system. It may mean that they have to 
reorganize their business model a little bit, but there are 
lots of places for them to bring in non-merit staff.
    And you asked me what would happen if it were expanded. 
Look, we had some experience with privatization experiments in 
the past for those core eligibility functions, and it didn't go 
well. Now, granted, it was quite a while ago, but it was 
somewhat disastrous and ended up making service worse and 
states had to pull back from it. So experience would suggest it 
is a pretty risky endeavor to shift the roles as we have 
experienced them for the past 4 decades.
    The Chairman. Ms. Dean, now, I am informed that the latest 
data available shows that in 2018, my district, Georgia's 13th, 
had more than 35,000 households participating in SNAP, 60 
percent, or nearly \2/3\ of which, had children in their homes. 
Now, research shows that children receiving SNAP have better 
health outcomes than their counterparts who are not receiving 
the benefits, including reduced likelihood of obesity, high 
blood pressure, heart disease, and diabetes in adulthood--it 
grows to that extent--and improved economic outcomes. So, tell 
us, how does the 2021 Thrifty Food Plan reevaluation make it 
possible for families with children to provide their young ones 
with adequately nutritious meals that would make it easier for 
them to succeed in both the long- and the short-term?
    Ms. Dean. Well, thank you, Mr. Chairman, for acknowledging 
SNAP's strength both in terms of its ability to make sure 
households can purchase food today but also children who are 
well-nourished particularly early in life do far better later 
in life. And we have fairly conclusive evidence on SNAP's role 
there. I think what we found when we did the reevaluation was 
that--we have to always separate the Thrifty Food Plan from 
SNAP--but, we found that the basis for the benefit was not 
sufficient to purchase an adequate diet, low-cost, practical 
diet, so basically healthy food wasn't within reach. And with 
this adjustment, we certainly hope that with healthy food in 
reach, we will only strengthen SNAP's impressive impacts on 
families and children.
    The Chairman. Well, thank you very much for your answers. 
They were thorough, very informative. This issue is important 
to all of us in this country and certainly important to me and 
my district, so I look forward to working with you as we make 
forward progress on this issue.
    And now I recognize the gentleman from Pennsylvania, our 
Ranking Member, Mr. Thompson. You are now recognized for your 
questions.
    Mr. Thompson. Well, I thank the gentleman from Georgia for 
the recognition.
    Deputy Under Secretary Dean, once again, welcome. There are 
coalitions who vehemently support restrictions, particularly of 
sugar-sweetened beverages because they have been found to lead 
to an array of diet-related diseases. While I don't want to 
visit the merits of these proposals, I do want to better 
understand what the agency and the Department are doing to 
focus on nutrition. What is over the horizon to ensure better 
use of nutrition education dollars to support healthy eating 
initiatives?
    Ms. Dean. Well, thank you, Ranking Member. I think this 
issue couldn't be of more paramount importance to the Secretary 
and to myself as well. Americans' overall eating habits and its 
impact on their diet health is alarming, and we really need a 
whole-of-government response to make sure that all Americans 
are aware of the need to eat better in order to support better 
diet health.
    With respect to SNAP, and all of our programs honestly, we 
have a four-pillared approach. First is to ensure that our 
programs are providing meaningful support so that the benefits 
are adequate and are informed by nutrition science. You have 
heard about the Thrifty Food Plan adjustment. We are going to 
be proposing changes to WIC and the school food program to 
reflect the 2020 Dietary Guidelines. We are required to do that 
by law. Those are forthcoming changes.
    We also believe promoting healthy foods is important, so 
programs like GusNIP (Gus Schumacher Nutrition Incentive 
Program) or incentives programs that you all included in the 
2018 Farm Bill offer a terrific opportunity. And, honestly, the 
Retail Incentives Program is just underutilized, and I hope 
that we can work with our grocers to take advantage of that and 
offer incentives for healthy food for our SNAP participants.
    And I would say, speaking to the notion of public-private 
partnerships and agreeing with Ranking Member Bacon, there is 
so much more we can do to leverage our tools to promote healthy 
eating. We have MyPlate at USDA. We need to crank it up on that 
and just make that a tool that tens of millions of Americans 
are using and are aware of.
    And we work with tens of thousands of nutritionists, 
healthcare providers, educators across the country. It is 
important, I think--USDA feels it is very important--that we 
start singing all from the same song sheet and really 
leveraging up the importance of diet, healthy food, and its 
profound consequences on long-term health.
    Mr. Thompson. Well, I wouldn't be true to form if I didn't 
say as you are looking at beverages--and you kind of opened it 
up across outside even the jurisdiction of this Committee with 
child nutrition stuff, I have always appreciated Secretary 
Vilsack's support for milk-fat and anything that we can do to 
move from 1 percent to 3\1/2\ percent milk-fat, which would be 
whole milk, would be best for our kids. Nobody is force-feeding 
anybody to drink or consume anything, but they should have the 
healthiest options out there, so I am really looking forward to 
seeing what you put forward because that fits with trying to 
maximize nutrition, as you talked about.
    A follow-up, or another question, not a follow-up--but what 
role does the Department's Office of Chief Economist play in 
helping FNS make decisions related to policy and spending? I 
was made privy to a USDA Office of Information Affairs response 
to a FOIA request that states, quote, ``The OCE relayed they 
were not asked to review any information related to the 2021 
Thrifty Food Plan,'' end quote. And I think we can all agree 
that this update has a major economic impact obviously, and if 
this response is indeed true, can you tell me why the Office of 
Chief Economist would not be consulted? I can only wonder if 
there was concern OCE would disagree with your approach from an 
unbiased economic standpoint, especially when I perceive OCE as 
falling victim to calculated attempts at blocking economic 
analysis across a variety of policy issues. And if this 
response is not true, can you walk me through those 
consultations with the Office of Chief Economist?
    Ms. Dean. Sure. Thank you, Ranking Member, for the 
question. Let me just reassure you there were no shortage of 
economists involved with the Thrifty Food Plan reevaluation, 
but let me refer that to Administrator Long in terms of the 
process.
    Ms. Long. Sure, I would be happy to share a little bit more 
about the process. So, we essentially--in the reevaluation of 
the Thrifty Food Plan--we essentially used the same technical 
approach that has been used in prior years. It is a 
mathematical optimization model with a number of data inputs 
and constraints, and I will be happy to speak more about that. 
But in terms of the other entities that were consulted, as the 
Deputy Under Secretary mentioned, internal to FNS, we certainly 
had a team that included economists, data scientists, and 
nutritionists. We had formal input and review from experts at 
the Economic Research Service and the Agricultural Research 
Service throughout the process, both as the work was being done 
and they also conducted a review of the report itself. So, 
again, we certainly had an extensive opportunity to bring the 
expertise of not only the Food and Nutrition Service but USDA-
wide to bear on this process.
    Mr. Thompson. And that is fine, but, I mean, this decision 
tipped the Nutrition Title over $1 trillion over 10 years. I 
would think that would warrant being elevated to consulting 
with the Office of Chief Economist for USDA. And if so, I mean, 
why within these internal communications that were discovered 
under FOIA, I mean, I just question why they were excluded. It 
seemed that something was missed in the process. I appreciate 
all the things that were done, but my question is what was not 
done given the significant impact of the changes to the Thrifty 
Food Plan.
    Ms. Long. Certainly. And, Congressman, we would be happy to 
get back to you on a more detailed description of the clearance 
process, because at this point we would need to double-check to 
see whether OCE did have the opportunity--
    [The information referred to is located on p. 820.]
    Mr. Thompson. Understood, and I appreciate that. Thank you, 
Mr. Chairman.
    The Chairman. Sure. And now the gentleman from California, 
Mr. Costa, who is also the Chairman of the Subcommittee on 
Livestock and Foreign Agriculture, you are now recognized for 5 
minutes.
    Mr. Costa. Thank you very much, Mr. Chairman, for your 
leadership and the timeliness of the oversight necessary to set 
the table for literally and figuratively the reauthorization of 
the farm bill next year.
    I want to thank the Department for following through with 
the bipartisan directive in the 2018 Farm Bill to review and 
update the Thrifty Food Plan. My gosh, it has been 45 years 
since it has been updated, long overdue, and I suspect that 
will be the subject of our Subcommittee chair of jurisdiction 
on how we update it and review it.
    I have always said food is a national security issue, and 
from the onset of the COVID-19, we certainly learned when we 
turned our food supply chain upside down how dramatic it was in 
terms of impacting people's availability for food. It is, after 
all, America's safety net, right? I mean, you really think 
about it, it is so critical. And so SNAP and the access to food 
is critical for lives in America but also to change lives.
    And, we all look at it locally. The Chairman noted in 
Georgia. Let me tell you from the California 16th Congressional 
District, we have the irony of having one of the richest, 
largest agricultural areas in the entire country, but, yet 
significant hunger from young and old alike to working poor. 
SNAP in my district contributed to the local economy last year, 
benefitting 174,000 participants. Twenty-three percent of my 
Congressional district received SNAP, second highest in 
California. And its impact for food benefits are significant, 
$446 million in food benefits, $804 million in economic 
activity, and over 10,000 jobs.
    I want to put a question to you, Ms. Long, and again, thank 
you for your service. You are familiar with the pilot project 
that I worked on back in the 2014 reauthorization that I think 
was successful. And Fresno County's Bridge Academy was chosen 
as one of the SNAP employment and training for a pilot program. 
By the end of 2017, the program had expanded to 14 academies 
and counties affecting 3,000 families to get people back on 
their feet. I want to continue to make this push. When we look 
at the reauthorization of the farm bill--and the Chairman and I 
have had three authorizations, this will be our fourth. But, as 
the Ranking Member noted, the title IV is usually the most 
contentious issue among the Agriculture Committee. I think 
there are ways that we can work together on this and should. I 
think this pilot project is an example, but I think more 
funding is needed.
    Ms. Long, would you agree that such an example of this 
effort can be accomplished and can be expanded to provide 
reform and opportunities for public-private partnerships?
    Ms. Dean. Congressman, if I may, I will take that question. 
I was very fortunate some years ago to be invited by the 
incomparable Pete Weber to come out and visit the Bridge 
Academies in Fresno, and it was incredibly impressive.
    Mr. Costa. He is a good man.
    Ms. Dean. And many of its elements I think helped inform 
the pilots and even some of the directives from the 2018 Farm 
Bill to us on how to shift and change employment and training, 
huge emphasis on case management, making sure that families 
have some of the wraparound supports that they need for 
training and employment to be successful.
    Mr. Costa. Those are critical.
    Ms. Dean. Yes, and also really making sure that 
participants are matched to the right program or training 
program for them, as well as the right employer and high-
quality jobs, with a big focus on ensuring that we place 
participants in high-quality jobs.
    Mr. Costa. Provide a living wage.
    Ms. Dean. Yes, and that lead to opportunity.
    Mr. Costa. Well, and because SNAP is such a significant 
part of the farm bill in terms of the baseline, 80 percent 
annually, I think it is critical that we focus.
    With my remaining time allowed, and I don't know if you, 
Madam Secretary, would want to continue, I think the importance 
of reforming and focusing on nutrition, on WIC and the school 
lunch and breakfast program is critical. And during the 
pandemic, obviously the food box program was critical, but we 
have with the supply chain also a perverse situation in which 
we have excess commodities that are depressing prices. I am 
wondering if you are looking at how we can use those excess 
commodities either through the Commodity Credit Corporation or 
others to help deal with the impacts of that production 
oversupply.
    Ms. Dean. Well, quickly, that is an entire initiative of 
the Secretary and our friends at the Marketing and Regulatory 
Programs mission area. One example would be the Local Food 
Procurement Grant Program that the Secretary has just launched 
where we are going to be supporting state secretaries of 
agriculture to build their capacity to procure food locally in 
order to distribute their emergency food or school food. We 
think that will help support more resilient local food systems.
    Mr. Costa. Well, thank you. My time has expired, but, Mr. 
Chairman, we are going to have hunger issues not only in this 
country but around the world, and there is an opportunity here 
for us to take good action. Thank you.
    The Chairman. Yes, you are right. The gentleman from 
Arkansas, Mr. Crawford, is now recognized for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman. I appreciate that.
    Since March 2020, consumers have rapidly shifted to online 
grocery shopping. As you know, FNS was tasked with implementing 
the SNAP Online Purchasing Pilot at a difficult time during 
this consumer shift and retailers lined up to accept SNAP 
benefits online. However, I am hearing from my independent 
grocers who still want to participate 2 years later that there 
continue to be significant challenges in getting approved, 
while the largest national chains have accepted SNAP online 
from the beginning.
    Congress attempted to address the bottlenecks and slow 
onboarding processes by allocating $25 million in the American 
Rescue Plan (Pub. L. 117-2) in part for retail technical 
assistance. My understanding is that none of this money has 
been distributed yet. What steps are being taken by FNS to help 
ensure that all retailers and consumers have access to this 
program?
    Ms. Long. Well, thank you for that question, Congressman, 
and we really appreciate the support for online purchasing. We 
are at a place where over 97 percent of SNAP households 
currently do have access to online purchasing options. But, as 
you know, there is certainly more to do, particularly with 
respect to smaller and specialty retailers, and we are very 
grateful for the support that came through the American Rescue 
Plan Act. And I am happy to report that next month, in May, we 
are going to be putting out our request for a contract to 
develop a technical assistance center which will be 
specifically designed to assist particularly, again, those 
smaller retailers and coming on board to the online platforms. 
And their goal will be really to provide the support that those 
retailers need to assess their technology needs and the 
business case to be able to successfully integrate into online 
purchasing in SNAP.
    Mr. Crawford. And so that money, you are saying, will start 
to flow next month?
    Ms. Long. We will be soliciting for the support for that 
technical assistance center, and we would be happy to get you 
more information on the anticipated schedule for the actual 
award and flowing of support.
    [The information referred to is located on p. 821.]
    Mr. Crawford. Okay, thank you. And just one other thing 
that I need to note, and I was actually talking to the Ranking 
Member and this is an issue we have had conversations about in 
the past. And I got on your website and I noticed that this is 
the case, that whole milk is not acceptable for school lunches, 
school breakfasts, and so, we are concerned about the 
nutritional choices that our children are making, and yet we 
don't have that same concern as it applies to, say, for 
example, candy and energy drinks and things like that. Do you 
see the disconnect there? Do you see the irony of that is that 
we are making judgments on nutrition value to our young people 
as it applies to whole milk but we are saying it is okay to go 
and buy a candy bar. Can you explain the disconnect there?
    Ms. Long. Well, I would be happy to comment on the 
importance of milk. As you know, it serves a fundamental role 
not only in the schools but in all of the child nutrition 
programs. We certainly support the service of milk through the 
WIC program. Those programs are fundamentally different than 
SNAP in that they are designed to put a meal or a package of 
targeted foods on the table, and so we do believe that a 
differential approach is warranted.
    Mr. Crawford. Okay, but you as FNS are making the decision 
that in one nutrition program we can make those judgment calls 
but in another nutrition program we can't make those judgment 
calls. And also, are energy drinks included in SNAP? Are they 
acceptable for SNAP expenditures?
    Ms. Dean. They are, Congressman. Let me just jump in and 
this. I think the statute actually differentiates between the 
programs in terms of the science-based standards and the 
provision of food versus empowering--
    Mr. Crawford. Would you support changing that statute so 
that you could make a more consistent application across the 
agency?
    Ms. Dean. Well, I think we are making a consistent 
application in that we are promoting for SNAP participants to 
purchase food aligned with the Dietary Guidelines and as in WIC 
and school--
    Mr. Crawford. You are promoting it and I get that and I 
appreciate that, but you are not mandating it because the 
statute doesn't allow for you to mandate that? Is that correct?
    Ms. Dean. That is correct.
    Mr. Crawford. But the statute does allow for you to mandate 
not allowing whole milk in schools for breakfast or lunch. Is 
that correct?
    Ms. Dean. That is correct.
    Mr. Crawford. Okay. So that is my point, is there is an 
inconsistency there, statutory, that probably this Committee 
needs to address so that you are not in this position of saying 
one thing, doing another. I am not laying this in your lap and 
saying this is your fault. You already pointed to the fact that 
this is a statutory issue. But it seems to me, based on the 
exchange we are having today, that the inconsistency can be 
addressed here in this Committee, and that is something that 
you would be okay with?
    Ms. Dean. Sir, we bring the Dietary Guidelines to life in 
different ways for each program. It is certainly an important 
issue for the Committee to look at, but we believe that SNAP 
participants ought to have the flexibility to purchase like any 
other consumer in the store.
    Mr. Crawford. So basically then, I am running out of time, 
but then it is really not a statutory issue. It is more of a 
judgment call then?
    Ms. Dean. I think it is both. It is both, we follow the 
statute, and what we do in SNAP is the way we bring the Dietary 
Guidelines to life is different than it flows through the other 
programs. But, I am sorry, judgment informs statute, so maybe 
we can follow up on this conversation.
    Mr. Crawford. Thank you.
    Ms. Dean. I think we want to promote better health.
    Mr. Crawford. Yes, thank you. I yield back.
    The Chairman. Thank you. Just as a reminder, Members should 
direct questions to our witness, Deputy Under Secretary Dean. 
Thank you.
    Mr. Crawford. Sorry, Mr. Chairman, I thought that is what I 
was doing.
    The Chairman. No problem. And now I recognize the gentleman 
from Massachusetts, Mr. McGovern, who is also the Chairman of 
the House Committee on Rules and is a national leader in our 
fight against hunger. He is now recognized for 5 minutes.
    Mr. McGovern. Well, thank you, Mr. Chairman, and thank you 
for this hearing.
    And, Deputy Under Secretary Dean, thank you for being here 
today. I want to begin first by saying thank you. Thank you to 
you, thank you to Secretary Vilsack, thank you to President 
Biden for stepping up during this pandemic and providing 
additional assistance so that hunger didn't spike even more 
than it did during this unprecedented time. I am grateful that 
you were in the positions that you are in, because I quite 
frankly can only imagine what might have happened if it was the 
previous Administration that was in charge, number one.
    Number two, I got to be honest with you. I get a little 
frustrated when I hear things like, ``Thrifty Food Plan 
scheme'' or talk about how SNAP encourages idleness and 
disengagement. I find that, to be honest with you, offensive. 
In terms of the Thrifty Food Plan, you were asked in the last 
farm bill, when the Republicans controlled the House, to 
actually reevaluate the program to see what in fact was 
necessary to be able to afford a nutritious meal. You did that. 
And by the way, just to put everything in perspective, the 
average SNAP benefit before all of these adjustments was about 
$1.40 per person per meal. To my colleagues who think that is 
too much, you try living on that. And yet that is what the 
benefit was.
    And in terms of being idle and disengaged as a result of 
being on SNAP, the majority of people who are eligible to work 
who are on SNAP actually do work. They are doing everything we 
expect them to do, but they still earn so little that they are 
eligible for the benefit.
    I also just want to say when people say, ``Oh, that some of 
us are drawing a line in the sand, do not touch SNAP,'' look, 
everybody is open to constructive ideas on how to make any 
program better and more responsive. But, the thing that gives 
people like me pause is, to my friends who are calling for 
``touching SNAP'' or ``reforming SNAP,'' when you guys were 
calling the shots, that meant cutting the program by over $20 
billion and actually throwing people off the benefit. Yes, no, 
I mean, I would fight that tooth and nail. I mean, that is just 
inappropriate.
    And, here we are coming out of this pandemic, there is 
worldwide inflation, food costs are going up, gas prices are 
going up, and again, I find it somewhat ironic that my 
colleagues who were calling for, quote, ``touching SNAP'' have 
no problem with oil and gas companies gouging consumers or with 
the continued subsidization of that industry at a great benefit 
to oil executives. But anyway, that is another story. We will 
talk about that at another hearing.
    But the bottom line is food prices are going up, and that 
directly relates to people's ability to be able to afford 
nutritious food. And, we are all for encouraging people to make 
better choices. I don't think we have to micromanage their 
shopping. There are programs in SNAP, like the Double Bucks 
Program, which actually incentivizes people to go to farmers' 
markets and buy fresh produce and they get more of a bang for 
their buck with their SNAP dollars if they do that. I think 
those are good programs. But, basically saying to somebody that 
because you are struggling, because you are poor we are going 
to tell you what you can buy and what you can't buy. I mean, 
talk about Washington kind of overstepping its bounds and 
micromanaging people's lives. I mean, there are better ways to 
do this.
    And Deputy Secretary, I appreciate the fact that you talked 
about an all-of-government approach to dealing with some of the 
challenges in nutrition because, quite frankly, this is not 
just a USDA issue. It is a Department of Education issue. It is 
a Health and Human Services issue. It is a Department of the 
Interior issue. I go right down the list. We need a whole-of-
government approach to hunger. We need a whole-of-government 
approach to nutrition. And I hope the Administration will move 
in that direction.
    But let me just ask you, the USDA's Economic Research 
Service put out a report in March predicting an up to five 
percent increase in food prices this year. And that is 
astounding. It is simply not affordable for many American 
families. And while I was pleased to see that SNAP spending 
rose in 2020 in response to the sharp economic downturn, it has 
been relatively flat since the summer of 2021 and has started 
falling as temporary benefit increases that took place during 
the pandemic are phasing out. So, can you help us understand 
the important role that SNAP played during the pandemic, and, 
more importantly, can you give us a reality check about what it 
will mean for families' food costs if the benefit decreases 
again at the end of the public health emergency?
    The Chairman. Would you answer that very quickly?
    Ms. Dean. I will do my best. Thank you, Mr. Chairman. Okay. 
So, SNAP--during the pandemic--did, first of all, increase when 
we saw a significant increase in need and newly unemployed 
folks qualifying for the program, so it was able to flex. 
Congress increased benefits by providing emergency allotments, 
which actually allowed benefits to go up by about, monthly, 
aggregate across the country about 40 percent, so it really 
helped to cushion folks through the dramatic difficulty in 
securing food during a difficult time. And that increase has 
also helped to cushion relative to the rising food inflation. 
And I think the President's request of USDA to ensure that we 
had a minimum emergency allotment, a $95 per month per 
household amount helps to deflect the impact of rising food 
costs on SNAP participants. And of course, food hardship would 
be much, much higher had the program not been able to grow and 
expand with Congress' support. And I will stop there, sir.
    The Chairman. Very fine. And you can also provide 
additional information to Jim in writing. Thank you.*
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    * Editor's note: The information referred to is located on p. 819.
---------------------------------------------------------------------------
    And now the gentleman from Tennessee, Mr. DesJarlais, is 
recognized for 5 minutes.
    Mr. DesJarlais. Thank you, Chairman Scott, and thanks to 
our witness today. I do have some questions I want to ask 
before my time expires.
    Under Secretary Dean, just for some background, can you 
tell us currently how many citizens are participating in the 
SNAP program?
    Ms. Dean. Sir, I think it is approximately 43 million 
individuals, but I can get you the precise number.
    Mr. DesJarlais. Okay. And what is our annual cost 
currently?
    Ms. Dean. I believe we estimate it to be--just give me 1 
second. This year, we estimate it to be $127 billion in 
benefits.
    Mr. DesJarlais. Okay.
    Ms. Dean. Including emergency allotments.
    Mr. DesJarlais. Is that including--I think you indicated--
about a 21 percent food inflation in your opening statement?
    Ms. Dean. That includes the increased cost associated with 
the Thrifty Food Plan reevaluation and emergency allotments.
    Mr. DesJarlais. Okay, thank you. I guess I want to shift a 
little bit with concerns of what is happening at the southern 
border. And do you know offhand what number of non-citizens, 
asylum-seekers, immigrant non-citizen children are receiving 
SNAP benefits now?
    Ms. Dean. I do not, although non-citizens face much more 
restrictive eligibility rules than citizens, sir.
    Mr. DesJarlais. Well, they do, correct, but if you are a 
non-citizen child under 18, you receive benefits?
    Ms. Dean. Yes.
    Mr. DesJarlais. If you are an asylum-seeker under Section 
208, you receive benefits?
    Ms. Dean. That sounds correct.
    Mr. DesJarlais. And, I mean, there is a list. There are 
about 15 different categories. So, there are quite a fair 
number of non-citizens, especially asylum-seekers. I think 
right now we have a 1.1 million backlog of asylum-seekers 
awaiting adjudication inside the U.S. We are getting 300,000, I 
think just this last year. With title 42 being lifted by the 
Administration, which temporarily had been blocked, if this 
abandonment does come to fruition, I was wondering what your 
concerns would be to the strain on the program moving forward. 
And have you discussed lifting title 42 with the White House? 
If so, what is the plan to ensure that SNAP benefits will be 
preserved for the Americans that truly need it? And if not, 
why?
    Ms. Dean. Sir, just to--I guess one thing I want to make 
sure you are aware of is that the program, as an entitlement 
program, can flex to need, so we would not displace one 
eligible individual for another.
    But in terms of your specific question, no, I haven't been 
involved with conversations with the White House on that issue.
    Mr. DesJarlais. Okay. Well, we talked about veteran hunger 
and hunger in the United States, and it seems that American 
citizens should be a priority, not that we want anyone to go 
hungry, but there are other costs associated beside SNAP with 
asylum-seekers and people who come in, in the form of TANF, 
heating, education, and whatnot. And according to the Center 
for Immigration Studies, 45 percent of non-citizen households 
rely on SNAP as opposed to 21 percent of citizens' households. 
Can you walk me through this and why this is and what the 
Department and FNS is specifically doing to help lift these 
families from poverty and independence? And first of all 
comment on those numbers and percentages.
    Ms. Dean. Sure. First of all, I am not familiar with that 
study so I can't speak to its particulars, but we are happy to 
follow up. I want to just restate again that non-citizens face 
much more restrictive eligibility rules than citizens. There 
is, for most adults, a 5 year waiting bar and then other 
restrictions. And you are right that refugees and other 
immigrants admitted on a humanitarian basis do have more 
immediate access to help--
    Mr. DesJarlais. Right. And I would argue right now that 
most people crossing the southern border have learned that. 
They don't come here and say--they don't cross into the United 
States and say, ``We are just coming here because we felt like 
it.'' They are saying we are seeking asylum. They are taught 
what to say. They are charged up to $4,000 per person to be 
brought by drug smugglers and cartels and people to get into 
the United States, and so they know what to say.
    So, I guess what I would like to get from you is an actual 
number. We know what it costs for SNAP per year. We know how 
many Americans--well, I think we know how many Americans--you 
said 41 million, but we don't know how many of those are actual 
Americans. Does that number include the asylum-seekers and 
children of non-citizens?
    Ms. Dean. It would include eligible non-citizens, yes.
    Mr. DesJarlais. Okay. So, I guess what we need to know is 
that, first of all, we are taking care of Americans first. We 
have programs to assist people whether they are in other 
countries in terms of hunger, and I think that is important. 
The U.S. should lead on that, and I am really proud of the SNAP 
program that we have in order to take care of the people who 
are hungry in the U.S. I just want to prepare--this line of 
questioning is to prepare the farm bill so we know what to 
expect and how to best take care of those in need. So, I thank 
you for your testimony, and any information you can get to me 
in writing on those numbers would be greatly appreciated, and I 
yield back.
    Ms. Dean. Happy to do that, sir.
    [The information referred to is located on p. 821.]
    The Chairman. Thank you. And now the gentlewoman from 
Connecticut, Mrs. Hayes, who is also the Chairwoman of the 
Subcommittee on Nutrition, Oversight, and Department 
Operations, is recognized for 5 minutes.
    Mrs. Hayes. Thank you, Mr. Chairman. I am really excited 
that we are having this hearing because, again, this program is 
incredibly important. I also hope, Deputy Under Secretary and 
Administrator Long, that you appreciate the fullness of the 
immigrant experience, and it is not a single issue. It is much 
more complex, and it is something that we have a responsibility 
to look at completely and thoroughly.
    SNAP is one of the most effective Federal programs also for 
bolstering local economies. Every $1 in SNAP generates $1.50 to 
economic activity, and studies have shown that SNAP was 
responsible for nearly 200,000 U.S. industry jobs and 45,000 
jobs in supporting industries like agriculture, manufacturing, 
and transportation. In my State of Connecticut 77,000 people 
are lifted out of poverty every year by SNAP. That number 
includes 31,000 people. It is not a ``poverty-inducing endemic 
program.'' It is something that I have seen families use to 
stabilize themselves until they can enter the fullness of 
society. And I have a lot to say on that.
    However, the program is still not as accessible as it 
should be, especially for veterans, as I mentioned before. I 
appreciate the gentleman from Nebraska's comments about raising 
the pay of our servicemembers, but we have not done that yet. 
And in my area of jurisdiction, which is the programs like 
this, there is more that we can do. And I am hearing from 
veterans just about the impact when they return, when their 
disability rating is not enough to qualify for benefits, and we 
are falling well short of what we can do.
    My question is would you have any recommendations as we go 
into the next farm bill on how we can make sure, especially for 
this targeted group, that we are doing a better job?
    Ms. Dean. Well, thank you for the question. And I agree. 
The rates of food insecurity amongst our veterans is incredibly 
troubling and merits bold action. And just to speak to that, 
the way we have approached it is first trying to get 
information to veterans themselves through the Department of 
Veterans Affairs welcome-home kits. We also work with those who 
work with veterans, so training nurses and other professionals 
at the VA to make them aware of our programs and how to screen 
for whether someone is eligible, and then of course we have 
been encouraging our states to do direct outreach to veterans. 
So those are things within our toolkit today.
    I am always a little--I do want to be mindful of making 
policy at the table in a markup, but I think the kinds of 
things that you have in your bill are certainly worthy of 
exploration. Is the disability rating in the statute too high 
and does it close out those who are disabled, severely disabled 
but not yet at that 100 percent rating?
    I think we also have a relationship with Social Security 
Administration that might be one we could explore with VA where 
Social Security makes SNAP--actually takes the responsibility 
of taking SNAP applications for low-income seniors and 
individuals with disabilities, and we reimburse them for that 
activity. That might be something we could look at. And, of 
course, we would certainly love to explore the idea of targeted 
outreach programs to veterans, which would require funding, but 
we would love to talk to you about that.
    Mrs. Hayes. Well, thank you. I just appreciate your 
understanding of the magnitude of this problem and that we 
really have to make some intentional changes. And I don't want 
you to make policy at the table because your work is way too 
important and requires a lot more thought.
    I am going to ask a question and then just make an 
observation and then let you run out the time because 5 minutes 
is not enough time to have this kind of a conversation. I know 
that in 2004 we switched from food coupons to the Electronic 
Benefits Transfer program. I know that--can you just please 
provide us with any updates on the status of implementation of 
the mobile technology demonstration projects?
    And just one thing--you probably won't even have time to 
answer this, but I also wanted to share something that I am 
hearing from grocers in my district that I just think that we 
should take a better look at is rolling benefits. I have heard 
from many grocers that at the beginning of the month there is 
this surge of people who all get their benefits at the same 
time, and I just think that to preserve the dignity of people, 
the first 5 days of the month, everybody is shopping, they are 
running out of the--the stores can't keep the shelves stocked 
enough because of the surge, and then the rest of the month as 
benefits begin to dwindle, I just feel like there shouldn't be 
this idea that on the first of the month everyone who is 
receiving benefits is shopping because many of these people are 
also working or are a very different narrative than people 
associate with benefit participants.
    My time has expired, but if you could just share with me 
just the updates on the mobile demonstration programs and just 
think of that for your consideration as we move forward because 
it is something that I am hearing over and over about the way 
benefits are distributed.
    Mr. Chairman, I apologize for going over. I yield back.
    The Chairman. Thank you. And please follow up with the 
Chairwoman in writing so she can get some specific responses 
from you, Under Secretary. Thank you.
    And now the gentleman from Illinois, Mr. Davis, is 
recognized for 5 minutes.
    Mr. Davis. Well, thank you, Mr. Chairman and Ranking Member 
Thompson. We have had a busy week in this Committee, and I 
appreciate that. I am looking forward to discussing the SNAP 
issues today.
    Deputy Under Secretary Dean, in your testimony you talk 
about how SNAP is a powerful tool to address hunger and 
hardship, and yet the Biden Administration is pushing an agenda 
of poverty by continuing to incentivize people to stay home, 
not seek employment, not utilize the employment and training 
programs that exist through the USDA at a time when there is a 
business on every corner that really needs employees.
    I mentioned this in the Committee's cattle hearing 
yesterday but it is worth repeating, we are currently seeing 
the largest increase in food prices in 40 years. I keep 
bringing up inflation in this Committee because it is 
warranted. These benefits have always been intended to be a 
tool to get people back on their feet from a hard time, not an 
economic incentive to stay on the sidelines.
    To that end, the Department conducted its annual cost-of-
living adjustment just last year and then increased benefits by 
way of an accelerated, debatable Thrifty Food Plan update. I 
believe there is still a focus from this Administration and FNS 
to increase SNAP benefit allotments and expand eligibility even 
further. Just yesterday, Democrats blamed meatpackers for high 
prices even when producers said inflation related to wasteful 
pandemic spending, supply-chain issues, and a lack of workers 
was the cause for these increased input costs in subsequent 
food prices. It seems obvious that the Department wouldn't be 
able to quantify mere rumors of price gouging when adjusting 
these prices, so why does the Administration insist on finger-
pointing when it comes to the root cause of high food prices?
    It is worth repeating that there are currently 11 million 
work-ready adults certified by their state workforce agencies 
who are receiving SNAP benefits but could start working 
immediately to fill the over 11 million open jobs in the United 
States. Getting these individuals to work could ease supply-
chain issues immediately, and that would be done by increasing 
domestic production and productivity. Until this Administration 
pushes to do a better job of matching people with these jobs 
and disincentivizing the COVID culture of not working, these 
problems that we are talking about today are only going to 
persist.
    So, Mr. Chairman, I want to say thank you for allowing me 
the time to make these remarks today. I don't have any further 
questions of the witness, and I yield back the balance of my 
time.
    The Chairman. Thank you. And now the gentlewoman from 
Virginia, Ms. Spanberger, who is also the Chair of the 
Subcommittee on Conservation and Forestry, is now recognized 
for 5 minutes.
    Ms. Spanberger. Thank you very much, Chairman Scott, and 
thank you, Ms. Dean and Ms. Long, for taking the time to be 
with us here today. I really appreciate the opportunity to 
discuss SNAP and to reflect on the program's efficacy since the 
farm bill was last enacted in 2018. And at that point in time 
no one could have predicted the pandemic and just how vital 
these programs would be to provide food for families, children, 
veterans, and those with disabilities across our country. In 
fact, Congress demonstrated the importance of the SNAP program 
when, under the Trump Administration, we increased the maximum 
monthly SNAP benefit by 15 percent. That is because we know 
that SNAP helps families afford food while also boosting 
economic recovery.
    For example, in spite of the pandemic, a USDA report found 
that U.S. household food insecurity remained unchanged in 2020. 
Another report from the last economic recession found that SNAP 
benefits generated an annual increase in rural output of $46.8 
billion while sustaining the employment of \1/4\ million rural 
workers. As the data suggests, SNAP and Congressional actions 
to enhance SNAP both prevented hunger and strengthened local 
economies in the communities we represent across this country.
    And so, as such, I am really appreciative of USDA's work 
over the past several years to implement the 2018 Farm Bill and 
contend with the challenges caused by the pandemic. And, 
certainly, in your testimony you mentioned a few areas the USDA 
is exploring to reduce the burden on families trying to access 
SNAP benefits. And as we turn towards the 2023 Farm Bill, I am 
especially interested in examining the ways that we can improve 
flexibilities for those who rely on SNAP to put food on the 
table, and I am particularly interested in discussion related 
to the exclusion of hot foods from SNAP.
    And so, under current policy, a parent on their way home 
currently cannot pick up from the local grocery store with 
their SNAP benefits a hot rotisserie chicken for their 
children's dinner. And just to speak to that, rotisserie 
chickens are such an important sort of staple in my family 
because you pick up the chicken, you eat it hot, you have the 
leftovers, you make chicken salad, you boil the bones and make 
bone broth that you then use for soup a couple weeks later, a 
couple days later, stick it in the freezer. It is an economical 
way to not only feed your family that night with hot food, but 
it is an important way for people to make those dollars--
certainly, we do it in my home--but to make those dollars work 
harder and feed better.
    So, I want to speak a little bit. Congressman Rush has a 
bipartisan bill, H.R. 6338 that I am a sponsor of, that would 
repeal this exclusion. And so, I am curious if you could 
provide your thoughts on this current policy and discuss the 
potential impact it could have if we were to repeal this 
exclusion, because I think certainly all of us want to make 
sure that these SNAP dollars are going towards nutritious, good 
food that keeps people healthy, keeps people fed. So, could you 
please speak to that question and that legislation?
    Ms. Dean. Thanks so much, Congresswoman. I am a mom of 
three, so I totally appreciate the value of being able to pick 
up a rotisserie chicken as you are preparing a nutritious meal 
on the fly for your kids. The hot foods prohibition is in the 
statute, and so that is something that Congress would have to 
take a look at and so I am glad that you have a bill on it.
    I think the issue is grocery stores look quite a bit 
different today than they did decades ago when those rules were 
written, and so one question I think we will have--because we 
have another part of the law that allows restaurants to take 
benefits for some specific households, senior disabled 
homeless--is what does this mean--if we allow hot foods--how 
does that translate over into restaurant involvement in the 
program? And I think that is going to be critical for the 
Committee to consider, and I am really not prejudging the 
issue, but there are over a million restaurants. What will be 
their role, and how will shifting that policy potentially shift 
the contours of who is a retailer and how they participate? So, 
I think that is the issue, that complex operational issue we 
want to work through with you. But I think we are all fans of 
rotisserie chicken as a good solution for dinner at home.
    Ms. Spanberger. Well, and thank you, Ms. Dean. I really 
appreciate that response. And certainly, I appreciate the 
leadership of Congressman Rush on this issue. And I thank you 
for some input on that in terms of how we can make sure that 
the bill is the strongest possible bill that it can be in that 
it is focused on kind of efficient, nutritious, good food for 
our families and particularly with the hot food that makes for 
great leftovers such as rotisserie chicken. I will be following 
up on that. But thank you for your guidance and your feedback. 
And, Mr. Chairman, I yield back.
    The Chairman. Yes. And now the gentleman from Georgia, Mr. 
Austin Scott, is now recognized for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. And 
many of the questions that I have, have been answered, but I 
again want to reiterate what Ranking Member Thompson said about 
the need to have an honest discussion about this title instead 
of having Democrats simply say we are not doing anything with 
the title, it is untouchable. I don't have a problem--as my 
colleague from the other side of the aisle was just 
discussing--I don't have a problem with a rotisserie chicken 
being available as part of the program. I do have a problem 
with a Happy Meal or a drive-through being part of it. And I 
don't understand why we can't have an honest discussion about 
obesity with our youth and what is available to be purchased 
with SNAP products.
    And so, I guess my question to the Under Secretary is why 
can't we move, and wouldn't it be better for people's health if 
we move to a system similar to WIC where you had to buy 
products that actually had a nutritional value to them instead 
of soda pop and potato chips? So, Secretary Dean, can you tell 
me why the Biden Administration would oppose this?
    Ms. Dean. Well, Congressman, thank you for the question. I 
think what I am hearing from you and so many Members of the 
Committee is a deep concern about improving overall diet 
health, improving our risk of diet-related disease, and in 
particular the risk to children. So, we share that concern. And 
that is why the Secretary has launched his Nutrition Security 
Initiative, which is about improving access to healthy, 
affordable food for all Americans, right, with the goal of 
improving diet health and their long-term health.
    And I think we have to begin with making sure that 
Americans are aware of what a healthy diet is, that they know 
how to purchase it, they know how to prepare it, and then we 
are sure that they are eating it. And, I guess I would say we 
want to start from an affirming place. We want to start from 
believing that everybody wants the best for their kids because 
they do. But that just isn't within reach for a lot of 
families, and I think that is just going to be a much stronger 
place to go. And so, we would really love to see a plan to 
increase our work around MyPlate. We want to seek more public-
private partnerships to promote healthy food and healthy 
eating. We want to partner with our grocers, with our 
healthcare professionals, with nutritionists around the 
country. There is just a lot more we can do, and our efforts 
shouldn't just be limited to our program participants. This is 
a whole-of-country problem, and it needs a whole-of-government, 
whole-of-country solution.
    Mr. Austin Scott of Georgia. Well, ma'am, just giving more 
money to people and allowing them to buy 200 calorie sodas in a 
12 ounce can and potato chips is simply making the problem 
worse. And we have a system out there, in the WIC program where 
people are limited to products that are actually nutritious. 
Now, maybe that program--maybe the SNAP program doesn't need to 
be identical to the WIC program. Maybe it needs to include 
things like a rotisserie chicken, for example, that my 
predecessor just mentioned. But with barcodes and other things 
today, it would be pretty easy if the Administration was 
willing to actually make it a nutrition program instead of 
something that people can buy, again, soda pop and potato chips 
with.
    So one other question that I have, Secretary, is the 
average balances that are showing up on the SNAP cards right 
now, I have had people at grocery stores tell me that people 
line up and offer to purchase other people's groceries for cash 
for a certain percentage of it, so you buy $100 worth of 
groceries, I will put it on my SNAP card, and you give me $50 
for it outside. What is the Administration doing about that 
type of fraud?
    Ms. Dean. Congressman, thanks for the question. First of 
all, that kind of trafficking violates Federal law, and it is 
really critical that when folks see it, that they report it. We 
want to make sure that we and our state fraud investigators are 
following up and taking action--
    Mr. Austin Scott of Georgia. Has the Biden Administration 
prosecuted a single case of that fraud? Have they prosecuted a 
single case of SNAP fraud?
    Ms. Dean. You mean in terms of the judiciary or through 
administrative--we can absolutely follow up with you but, yes, 
we have a rigorous approach to addressing fraud.
    Mr. Austin Scott of Georgia. I would appreciate information 
on how many cases have been brought for fraud.
    Ms. Dean. Okay.
    Mr. Austin Scott of Georgia. Thank you, ma'am.
    The Chairman. And, Deputy Secretary, please follow up with 
Congressman Scott's inquiry in writing.
    Ms. Dean. Absolutely.
    [The information referred to is located on p. 822.]
    The Chairman. Thank you.
    And now the gentlewoman from New Hampshire, Ms. Kuster, is 
recognized for 5 minutes.
    Ms. Kuster. Thank you, Mr. Chairman, and thank you to the 
Under Secretary Dean and Administrator Long for being with us 
for this important hearing today.
    SNAP has a proven track record of helping to mitigate 
hunger in New Hampshire and save thousands of families from 
slipping into the depths of poverty. Never was the safety net 
more necessary than during the COVID-19 pandemic. Not only was 
access to SNAP critical for so many Granite Staters and their 
families during the heights of the pandemic but the waivers and 
flexibilities granted to the SNAP program by Congress and 
implemented by the USDA made a tremendous difference as well.
    A perfect example is flexibility around how to apply for 
SNAP. As you may know, I have introduced the Streamlining 
Assistance Paperwork Act that would make permanent SNAP 
application flexibility granted by USDA in 2022 under the 
parameters of the Families First COVID package (Pub. L. 116-
127). This flexibility allows states to process SNAP 
applications without expensive telephonic signature technology 
and saves applicants from having to make the trip to a state 
office to fill out the paperwork. That is critical for a rural 
state like mine, especially for people who can't easily travel 
or get time off from work. Not only does this flexibility cut a 
lot of unnecessary red tape, it still holds applicants to the 
same standards as if they had come into the office to sign the 
paperwork, thereby maintaining the SNAP program's integrity.
    Administrator Long, do you believe the flexibilities 
extended to SNAP during the pandemic have been valuable and 
should be made permanent in the farm bill?
    Ms. Long. Well, thank you for the question, Congresswoman. 
We certainly believe that we had the opportunity to learn a lot 
about how the program can operate better through the kind of 
natural experiment of the pandemic. We are currently in the 
process actually of doing some fairly intensive conversations 
with our state agencies that administer the program to help 
them prepare for the return to normal operations, but that also 
provides us the opportunity to receive feedback about how they 
have experienced some of those flexibilities and have a 
conversation about what could be useful, going forward.
    Certainly, the flexibility around the telephonic signature 
is something that we have heard from quite a few states they 
have found extremely useful and valuable, and we are taking a 
look internally at putting together our thoughts on how we 
might work with Congress to move forward to make that 
particular flexibility available, and we are happy to continue 
the conversation with you about other ways in which we might 
take the learnings of the last several years as Congress begins 
its work on the farm bill.
    Ms. Kuster. Excellent. Thank you. I also wanted to ask 
about the Federal SNAP emergency allotment, a modest but 
valuable boost in funds for SNAP participants that was also 
implemented under the auspices of the Families First bill. We 
know this allotment will expire in states still utilizing it as 
soon as the Federal public health emergency ends. And even 
though much work is being done to make sure families are made 
aware of this, I fear it will have a jarring effect, 
particularly as food prices remain high. Has there been 
consultation within USDA or the Administration more broadly 
about how we could gradually reduce this allotment instead of 
having a hard stop? And would you recommend that Congress take 
action to reduce the allotment along those lines once the 
health emergency has been lifted?
    Ms. Dean. Thank you, Congresswoman. We share your concern 
about basically when the allotments end, that it will be 
disruptive and confusing for a lot of families and will require 
many to rejigger and think through their monthly budgets. Of 
course, they were intended to be temporary, and so you are 
asking a really good question about is there a better way to 
taper them off that would be perhaps less jarring for 
households. We don't have the authority to do that within the 
Administration. Certainly, we would be happy to talk with you 
and others in Congress about whether you have thoughts about 
ways to stairstep it down so that families don't experience 
such an abrupt change.
    Ms. Kuster. Great, thank you, and we will follow up on that 
as well.
    And thank you, Mr. Chairman, and I yield back.
    The Chairman. Thank you. The gentleman from California, Mr. 
LaMalfa, is now recognized for 5 minutes.
    Mr. LaMalfa. Thank you again, Mr. Chairman.
    I want to follow up on something that Mr. Crawford was 
speaking about, Under Secretary, and I wanted to ascertain the 
jurisdiction standpoint here within the agencies here on 
interpreting the statutes as far as going back down to this 
healthy foods issues versus things that I think almost 
everybody unanimously would agree is that should we be looking 
at milk versus energy drink or soda pop and things like that? 
And so, it sounded like there was inconsistency in the thought 
or even the response on the ability to interpret the statute is 
available in the different branches of the agencies involved.
    Ms. Dean. I am very sorry, Congressman, if I left that 
impression. The definition of food is in the statute--the 
definition of what is an allowable food for SNAP--so we don't 
have the opportunity to shift that, I guess I would say, 
outside of I suppose a robust research demonstration project. 
But as a general matter, the statute sets the definition.
    Mr. LaMalfa. Applies to SNAP but not to WIC, not to Thrifty 
foods, or the other--
    Ms. Dean. The other programs--
    Mr. LaMalfa. They seem to have--it sounded like you have 
the ability to decide that within those others the same as you 
would within SNAP.
    Ms. Dean. Thank you. No, the other programs--and you should 
jump in here, Cindy, as a real expert in school meals and WIC, 
the other programs set a prescription package that needs to be 
informed by the Dietary Guidelines. So, in WIC it is a 
supplemental package that is informed by where participants in 
that program, say, have overall nutrient deficits where we need 
to supplement, and then in school meals, it is about putting a 
meal on a plate that aligns with the Dietary Guidelines. So, we 
update them in the case of those particular food packages based 
on the Dietary Guidelines. So, I am sorry if I am not being 
clear.
    Mr. LaMalfa. Okay. Maybe it is pretty muddled, but 
everybody understands what the intent is here, right, is we 
want American-grown food that is nutritious from our ag sector 
or the processing that comes from that to be on the plates of 
people that are receiving taxpayer-driven assistance, not 
things that are not common sensibly as healthy, right, healthy 
foods, not that they are bad foods or just not targeted towards 
driving health because we get it on the other end, too. If 
people are purchasing things that are not positive for their 
health, then we are going to pick it up on the healthcare 
system on the other end if they are eating other things that 
cause obesity, et cetera, diabetes, what have you.
    So, what is so difficult about the jump here within the 
agency here to say we don't want to have eligibility for soda 
pop and candy bars and all that sort of thing, potato chips and 
fast food to be part of the program? Why can't we define it 
more straight up? And you have that ability to do so from what 
we are looking at within your jurisdiction.
    Ms. Dean. We have the ability in WIC and school meals to 
ensure that those programs align with the Dietary Guidelines. 
In SNAP, Congress sets the definition of food, sir, so it is 
Congress who decides what benefits can be used for in the 
stores.
    But I guess the one re-frame I would put on your--I 
completely agree with you that we are all--it sounds as if we 
are all here with the goal of improving what Americans are 
eating, for the goal of improved health outcomes. But for us 
this problem is not limited to those who participate in Federal 
nutrition programs. This is a universal problem for most of the 
country. Almost no American eats according to the--
    Mr. LaMalfa. But those are private decisions. Where the 
rubber meets the road is that we are expending tax dollars and 
would have a say in a lot of other things. There are strings 
attached to tax dollars on building roads and everything else, 
and so why would we be going down a path that is not helpful to 
the health of those folks? And, normal people are still 
wondering why are you guys doing that? Every farm bill, you 
have the discussion that runs into a big political problem. It 
was on a national broadcast this morning. A lady from Ohio was 
wondering why do you guys still have this stuff in these 
programs? And so, you are saying you do not have the 
jurisdiction to interpret that as far as SNAP goes, that 
Congress has to change the law itself?
    Ms. Dean. That is correct.
    Mr. LaMalfa. Okay. All right. Thank you. I yield back, Mr. 
Chairman.
    The Chairman. Thank you. And now the gentleman from 
Arizona, Mr. O'Halleran, is recognized for 5 minutes.
    Mr. O'Halleran. Thank you, Mr. Chairman and Ranking Member, 
for organizing this important hearing. I also want to thank the 
witnesses for their participation today.
    Food insecurity is a devastating issue for our Tribal 
communities. Roughly one in four Tribal families experience 
food insecurity in comparison to one in eight Americans 
overall. Before the pandemic, Apache County, a rural county in 
my district, had a food insecurity rate of 20 percent. This 
county is home to several Native American Tribes, including 
some of the Navajo Nation. During the pandemic, nearly half of 
Native Americans nationwide reported experiencing food 
insecurity.
    The questions I have are these: The 2018 Farm Bill 
authorized USDA to conduct demonstration projects to enter into 
self-determination contracts with Tribal organizations to 
purchase agricultural commodities under the Food Distribution 
Program on Indian Reservations. Ms. Dean, are there lessons 
USDA has learned from the new demonstration projects in Indian 
Country that might be applicable to nutritional programs like 
SNAP so that we can better understand and address the food 
insecurity on Tribal lands?
    Ms. Dean. Thank you, Congressman. We are really delighted 
and thrilled with the self-determination projects and thank 
Congress. We are going to be able to extend them for the 
current grantees and offer new Tribes the ability to come into 
the program.
    I think part of the lessons that we have learned is a new 
effort and a new conversation with Tribes about self-governance 
and self-determination, and so we are seeking to do that with 
respect to SNAP and also the components of SNAP, employment and 
training, nutrition education, so that we can make sure that we 
are in a better place for a conversation with you all about how 
to incorporate self-governance and self-determination into 
those aspects of the Act if that is of interest to Congress.
    Mr. O'Halleran. Thank you. Additionally, SNAP is also 
essential to our rural communities. Following the Great 
Recession, SNAP benefits increased rural employment by 279,000 
jobs and increased rural economic output by $48.8 billion. 
However, accessing these benefits often presents major issues 
for those in rural communities. How can we strengthen and 
improve rural grocery stores and retailers to ensure access to 
healthy food in rural and Tribal communities?
    Ms. Dean. Well, our Rural Development mission area is 
definitely taking a look at the Healthy Food Financing 
Initiative and how it can help support and attract grocers to 
rural areas. We have the online shopping option that is now 
available, and as Administrator Long pointed out, we are 
seeking to dramatically increase the number of stores, 
particularly small individually owned grocers, who probably are 
very frequently in rural areas, seeing if we can bring them 
onto the program. So those would be two examples.
    But we have to expand our reach into rural America. And as 
I am sure you know, this is a critical priority of the 
Secretary's--to make sure that USDA and across the whole-of-
government are fundamentally serving those communities and 
thinking creatively and across mission areas so that we can 
fully leverage the support in those communities to see them 
revitalize and thrive.
    Mr. O'Halleran. And the quality of food in my district, 
which is the size of Illinois, it just is not the quality that 
you can get in other places within urban areas throughout the 
state. And the distance between stores is terrible. Each Tribal 
government is different, though, just like each state. What is 
the USDA Food and Nutrition Service doing to work closely with 
each Tribe to help them tailor programs like the Food 
Distribution Program on Indian Reservations and SNAP to the 
needs of those Tribes?
    Ms. Dean. I would say two things quickly. One is regular 
consultation. We do about four consultations a year focused on 
FDPIR, but open to other topics, and we do also do 
collaboration on our other programs where we make a rule change 
there, we want to make sure we confer and consult with Tribes.
    But, in addition, we need to strengthen our own capacity to 
work with Tribes, so our budget that the Secretary is 
testifying on I think just down the Hill today would include 
several additional positions to bolster our ability to support 
Tribes and their needs as they seek to leverage our Federal 
food programs.
    Mr. O'Halleran. Thank you very much. I would like to sit in 
on one of those programs sometime. And, Mr. Chairman, I yield 
back.
    The Chairman. Thank you, and thank you, Congressman 
O'Halleran, for bringing up the rural and Tribal communities. 
They are facing some tremendous challenges. Thank you, 
Congressman O'Halleran.
    And now the gentleman from Georgia, Mr. Allen, is 
recognized for 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman. Can you hear me okay?
    The Chairman. Yes, we can, Mr. Allen.
    Mr. Allen. Very good. Thank you.
    Deputy Under Secretary, thank you for joining us today for 
this important hearing as we review the Supplemental Nutrition 
Assistance Program. Obviously, we have a health crisis in our 
country, along with the food supply issues and obviously the 
cost of meat and other things. And I hear about this daily. In 
fact, as my doctor tells me, you are what you eat. And what you 
eat has, and your habits and that sort of thing has, tremendous 
implications on your health. And obviously, we want to promote 
good health in this country.
    Currently, our country continues to have a sluggish rebound 
from the unprecedented stay-at-home policy measures enacted 
over the past 2 years. We have nearly five million childless 
nonworking adults that are not employed currently. These are 
folks that have no children, and they are 18 to 49 years old. 
At the same time, we have over 11 million job openings drop the 
country, and of course we have runaway inflation because of 
supply-demand issues caused by a workforce shortage.
    The SNAP program was designed to work as a primer to get 
people through difficult times, and it has been successful 
doing that, but it was meant primarily for our children and 
certainly our elderly folks. But now it has become a 
generational program. In other words, we have generations that 
continue to be on welfare. We need to reform this program so 
that it serves its original intended purposes.
    Under Secretary Dean, from your standpoint, I mean, do you 
look at--I mean, is USDA concerned about the health of the 
American people?
    Ms. Dean. Yes, sir, absolutely.
    Mr. Allen. So, what measures has USDA taken as far as the 
food security issues to promote good health to the American 
people?
    Ms. Dean. So, well, sir, thank you for the question. 
Secretary Vilsack recently at Columbia University just launched 
what we are calling our Nutrition Security Initiative, and it 
has four core pillars. One is ensuring that all of our 
nutrition programs offer meaningful support, meaning sufficient 
support to secure a healthy diet, as well as that they are 
nutrition science-informed. Second is that we want to be 
promoting access to healthy foods and healthy foods overall. 
Third is collaborative action, work that we can do with 
nutritionists, educators, health professionals across the 
country. And then fourth, making sure that all of our work in 
this space is driven from an equity lens given that food 
insecurity and health disparities are not problems that are 
equally borne and that people of color in particular experience 
those problems at much higher rates. And so, we want to be 
mindful of what caused those disparities.
    Mr. Allen. Well, so we are saying that the current farm 
bill is untouchable? So, I mean, and this has to be done 
legislatively as I understand, so how are we going to fix the 
problem if we don't do it legislatively?
    Ms. Dean. Sir, I am not saying the current farm bill is 
untouchable. Obviously, that is Congress' purview. But I think 
what we want to do is a stronger nutrition education--
    Mr. Allen. Okay. Well, our Democratic colleagues are saying 
that this program is untouchable, but at any rate, I am just 
about out of time. One other thing that we need to get to the 
root of the problem on, and I don't understand this, but, we 
hear time and time again that one out of five children go to 
bed hungry in this country every night, and I don't know about 
the rest of the country, but in the 12th District of Georgia, 
during the pandemic, our children got breakfast, lunch, and a 
snack each day through our school nutrition programs. We made 
that happen. How is it possible that one in five children go to 
bed hungry at night, and why? Have you all investigated this 
problem?
    Ms. Dean. I don't have enough time to get back to given the 
time, but I am happy to follow up with you, sir.
    [The information referred to is located on p. 823.]
    Mr. Allen. Yes, we are out of time. Yes, that would be 
great. And, Mr. Chairman, I yield back.
    The Chairman. Thank you. And now the gentleman from 
California, Mr. Carbajal, is recognized for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chairman, and thank you, Under 
Secretary Dean, for your testimony. And thank you, Ms. Long, 
for being here today.
    I must say, as somebody who when I was young my family had 
to be on SNAP, it is sometimes disconcerting to hear some of 
the over-obsession with real specifics, how we want to monitor 
and the guidelines and the specific nutrition of the subsidies 
provided to families that are food-insecure. Certainly, I think 
we all have the goal to promote good nutrition--make sure that 
the dollars are spent as such--and education, to educate more 
families as to what is more nutritious versus not nutritious. 
And I know we do that with a lot of the subsidies and support 
we give our food banks. They go a long way to now really focus 
on nutrition. I just wish some of my colleagues and good 
friends on the other side of the aisle were as dogged about the 
subsidies we give certain industries, oil companies and what 
have you, about how those dollars are being spent. But usually, 
it is those that have the least among us who don't have a voice 
that oftentimes we are over-obsessed with how they spend every 
dollar. We want government intrusion in that candy bar that 
they buy that maybe the rest of America buys as well.
    Nutrition and healthy eating is a challenge that we all 
have throughout the country, irrespective of class. Certainly, 
it is sometimes more pervasive with those who have less means, 
but certainly, I do hope that we don't get over-obsessed with 
how we are helping the poor and then being very direct of how 
they should spend every single dollar.
    I believe it is the basic function of government to ensure 
people in this country are not going hungry. SNAP is essential 
to ensuring that individuals are able to have access to food. 
Congress acted multiple times to provide flexibility to SNAP 
and bolster the benefits during the course of the pandemic. 
However, at the end of the public health emergency, people 
receiving SNAP will see substantial decreases to their 
benefits.
    Under Secretary Dean, is the USDA putting in place any 
plans to be ready for this decrease in benefits and the hunger 
cliff following this decrease?
    Ms. Dean. Thank you, Congressman, for your question and 
your comments. We are concerned that when the emergency 
allotments end, it will be an abrupt change for millions of 
households. At this point we are issuing about $3 billion a 
month in emergency allotments, so it will be a dramatic shift 
if the public health emergency were to end in terms of--and to 
be clear, the public health emergency ending is a signal of a 
good thing in our country, but just thinking about the impact 
on households and monthly budgets could be very difficult.
    So, we are working with states to make sure that they have 
good communications available for households. We want to make 
sure also that when households see their benefits change, 
probably many of them are going to be calling states, right, 
which will clog up phone lines and could lead to disruption and 
cause folks who are eligible to lose benefits, so planning for 
this pivot is critically important.
    And the Secretary also has made investments in the 
emergency food system by ensuring that we had significant 
additional resources available through TEFAP and complementary 
programs to shore up emergency food.
    I will say one of the worries we have looking ahead is what 
the impact will be for school food. That is an area where we 
know we will lose our expanded waiver authority on June 30th. 
We have called upon Congress to see if there is a way to extend 
it because that is a system we are not as confident can make 
the pivot to ensuring that they are continuing to provide meals 
to children during a period of higher food prices and labor 
difficulties. So, we really hope that we can work with you all 
on giving us some additional flexibility to help there.
    Mr. Carbajal. Thank you. We have seen benefits associated 
with the expansion of online services across several sectors, 
including the online acceptance of SNAP benefits. This 
flexibility can be particularly useful if an individual does 
not have access to transportation or is caring for children at 
home. Under Secretary Dean, what are some of the successes of 
online services you have seen, and what are some of the 
challenges people have run into, and how can we improve these 
services so that they benefit more individuals, especially in 
rural areas?
    Ms. Dean. Well, how to capture all of the benefits of 
online, I think a great example is just managing your benefits. 
Many states offer an account management tool similar to what 
you might have with banking or your credit card management and 
you can go in and see when you have applied, what follow-up 
data or pieces of paper are necessary, what is your balance, so 
just giving households more transparency and agency over the 
process as opposed to it being some sort of bureaucratic black 
box where they feel powerless, right, for understanding what is 
happening with these processes. So that is a wonderful thing. 
Also, the ability to more quickly adapt the forms and the 
questions to be responsive to what households may or may not 
understand.
    The challenge is of course that so many struggling 
Americans don't have access to broadband at home, they may not 
have a mobile phone, and so if we shift all service to online, 
we would of course exclude many, many vulnerable individuals. 
So online services, it has to be at both ends to also in-person 
service, and we have to meet people where they are at. And we 
are certainly working to expand broadband to the whole of the 
country, but until we do--and to equip everyone with devices. 
But until we do, it has to be at both ends.
    The Chairman. The gentleman from Nebraska, Mr. Bacon, is 
recognized now for 5 minutes.
    Mr. Bacon. Thank you, Mr. Chairman. I appreciate your 
testimony today. Deputy Under Secretary Dean, what is the 
agency doing to emphasize employment and training, especially 
when businesses are clamoring for employees? In Nebraska we 
have record low unemployment, but half the businesses are 
looking for employees, so we have a challenge there. Do you 
have staff on the ground guiding states in their quests to 
build for higher-quality programs? Thank you.
    Ms. Dean. Well, thank you. And the 2018 Farm Bill made 
quite a number of changes in direction in employment and 
training, in particular emphasizing better, higher-quality 
employment and training over sort of larger-scale, lower-
quality services. So, a big part of what we have been doing has 
been implementing those changes. New regulations, lots of 
training on the ground for states to make sure that they are 
aware of the changes there, and then of course working with 
them on their plans.
    Our goal is very much to make sure that E&T reflects what 
our local workforce needs are, and to make sure that we are 
matching individual participants to either training or jobs 
that makes sense for them.
    I saw a terrific program in Nevada that actually really--
sorry, it was quite impressive, and that was one that was set 
up by the casinos and local labor to train individuals for 
exactly what the Las Vegas hospitality industry needed in terms 
of folks, highly skilled staff prepared to work in restaurants 
or in hotels but then also credentialing them so that they can 
move up the system from a barback to a bartender, from a 
custodian to hospitality services. So, I think that is the kind 
of collaboration that we really want to see and support.
    Mr. Bacon. I echo that. And I know not all states are the 
same, but in many states with half the companies trying to hire 
and I have talked to some businesses that have the trades that 
will actually help people go through 2 years of school, get 
them licensed or certified. I mean, if you are looking for a 
job in many states, they are there and people will train you to 
do it, so that is something we can keep stressing.
    I would like to switch directions a little bit and talk 
about the National Association of States Workforce Agencies or 
NASWA. Forty-one states and the District of Columbia took the 
pandemic legislation authorized option to use private 
contractors to help shore up their unemployment insurance 
programs during the pandemic. The states that took this option 
are both Republican and Democratic, governor-led, with more 
Democratic states actually taking advantage of this option. 
Further, NASWA has unanimously asked for an extension of this 
flexibility, and some SNAP directors have recently asked for 12 
months of similar flexibility. So, you touched on this early 
on. Can you provide your position on this?
    Ms. Dean. Well, the statute requires that we use merit 
system personnel for certain aspects of state operations, so I 
think we have been focusing on making sure states understand 
where they can and can't use private contract workers if that 
is a flexibility they choose to avail themselves of in terms of 
expanding their capacity.
    I do want to say that when SNAP--before this issue came up, 
it was merit systems work or whatever the states construct was 
in terms of a balance of private and public workers that 
allowed the program to grow dramatically in the early days of 
the pandemic under extraordinary circumstances, right? Many 
workers had shifted to home. They hadn't been working from home 
before. It was an incredibly impressive.
    So, I think the current problem that we are looking at is 
states are, like many employers, having difficulty bringing on 
labor and being able to predict what the future will hold. So, 
we want to work with them on that and make sure they understand 
what their options are. But the system we have now has worked 
well for 40 years, 4 decades, and I would be very careful 
before making any significant changes to it.
    Mr. Bacon. But are we having backlogs with the SNAP 
processing? Because I hear we are, so there may be need in some 
states to have this flexibility for SNAP like it is with 
unemployment insurance.
    Ms. Dean. Yes, certainly some states are experiencing 
backlogs, and we would imagine when the public health emergency 
ends and their current flexibilities both in SNAP and the other 
programs that they operate, there is going to be a disruption 
and a shift. So, we are working very hard to make sure--they 
are trying to get ahead of that problem and prepare for it. And 
thinking through their business model and who does what is 
certainly a relevant question on their part. We think they have 
more flexibility than many of them are availing themselves of 
now, though.
    Mr. Bacon. I would just close. We don't want to see with 
SNAP what we are seeing with IRS. We have a year backlog of 
paperwork.
    So, with that, thank you, Mr. Chairman.
    The Chairman. The gentlewoman from Washington, Mrs. 
Schrier, is recognized for 5 minutes.
    Ms. Schrier. Well, thank you, Mr. Chairman, and welcome to 
our witness.
    I first just want to take a moment to recognize how vital 
this conversation and SNAP are right now. This week, new data 
from the U.S. Census Bureau shows 11.2 percent of households 
reporting food insecurity. The number is even higher for 
families with children, 14.5 percent. And the statistics for 
children--and I am a pediatrician--are that one in six children 
do not reliably have enough to eat, one in six.
    I also want to just take a minute to point out that my 
colleagues and I have had many discussions about the issues at 
food banks, the long lines over the past year or 2, the way 
that they have stepped up during the pandemic, distribution, 
donations more than ever, but I also want to remind those 
listening that the primary program to help individuals facing 
food insecurity in this country is SNAP. It is not food banks. 
They are supposed to be the last resort. And if SNAP better 
supported the dietary and nutritional needs of food-insecure 
Americans, it would really reduce the burdens on food banks, 
the rest of the hunger relief system, which has faced so many 
challenges these past couple years. And then I would add that 
SNAP also supports local economies because those purchases are 
made at local stores.
    I also want to just say that one crucial component of 
making sure people have enough to eat is addressing barriers 
for college and other post-high school students to access SNAP 
because those one in six children don't suddenly have enough 
resources when they go past high school. The farm bill allows 
an exemption to the 20 hours per week work requirement for 
students awarded work-study, but for a huge percentage of 
students eligible for work-study, there are simply no jobs 
available. And in Washington in recent years only 2.8 percent 
of students eligible actually got that work. I will add the 
full-time education that I have, whether it is grad school, 
college, or apprenticeship enrollment, that is comparable to at 
least 20 hours of work, and we should frankly just allow full-
time students access to the SNAP programs. All of that is why I 
am a cosponsor of Representative Gomez's EATS Act (H.R. 1919, 
Enhance Access To SNAP Act of 2021), which permanently expands 
eligibility for SNAP to students attending institutes of higher 
education.
    I want to ask you, Under Secretary Dean, about whether we 
can find some practical, pragmatic solutions here. Green River 
College in my district, the average student is 28 years old, 
many have children. SNAP is a vital resource for these families 
and millions of others across this country, and we just need to 
make it simpler for these students when they are strained to 
access benefits. Can we recognize that the current regulations 
just don't account for the situation on the ground? And what 
flexibility might you be able to find like circumstances out of 
their control like not being able to get a job, for example?
    Ms. Dean. Well, Congresswoman, thanks for the question. And 
you are right, it is a really important and timely issue. The 
SNAP eligibility rules for college students were written with 
what we call a traditional college student, so my kid who 
actually goes to the University of Washington in Seattle, 
right, who temporarily appears lower income but actually has 
the support of their family. And there was concern in the early 
1980s that those folks were getting eligibility to SNAP and 
they needed to be precluded.
    But, as it turns out, the traditional student isn't in fact 
who are predominantly going to college or pursuing higher ed 
these days. I believe it is \3/4\ of students are actually 
nontraditional, meaning independent from their parents or have 
a child of their own. And so, you are right that we have to 
figure out how to refresh these rules that are just wildly out 
of sync with what the reality is and probably are very much 
inadvertently keeping out needy individuals from participating 
in the program.
    So, Washington is very much a leader here. I just recently 
met with Claire Lane and other advocates from across the 
country who are deeply concerned, and we are going to see what 
we can do there. And we would really welcome working with you 
on making improvements in the farm bill.
    Ms. Schrier. Thank you. And yes, there are food banks on 
college campuses in my district.
    In my little bit of time remaining, I just want to touch on 
a program that is really near and dear to my heart where we are 
also leading the way in Washington State, which is the GusNIP 
program. And it provides incentives for SNAP participants to 
increase their purchase of fruits and vegetables. And we need 
more funding for programs like this. Again, as a pediatrician, 
I can tell you food is preventative medicine if you choose the 
right foods, incentivize that, and train kids up on eating the 
right foods. So, I want to address this as an urgent health 
issue and I want to yield back. Thank you very much.
    The Chairman. The gentleman from Indiana, Mr. Baird, is now 
recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman, and I appreciate you 
and the Ranking Member holding this important hearing. I always 
appreciate the witness being with us and having the opportunity 
to discuss the SNAP program.
    So I am going to start out with we know that consumers 
really need to increase their fruit and vegetable consumption, 
and having the availability of all forms of produce, whether it 
be fresh or frozen, canned, or dried, can be one beneficial 
tool to do so, especially when fresh-only options are not 
available in parts of the country all year round.
    So, Deputy Under Secretary, what is FNS doing to ensure 
SNAP participants feel empowered to choose other forms of 
fruits and vegetables like frozen options in alignment with the 
Dietary Guidelines recommendations while also addressing this 
nutrition security. Madam Under Secretary?
    Ms. Dean. Thank you, Congressman. And you are absolutely 
right that frozen and other forms of fruits and vegetables are 
healthy and nutritious. They are also really low-cost quality 
options. So a big part of the way that we introduce them as a 
practical, low-cost, quality choice is through our SNAP 
nutrition education programs, as well as through USDA's MyPlate 
where we translate the Dietary Guidelines into menus. And that 
is how we fundamentally seek to inspire households to select 
the array of fruit and vegetable choices that they have.
    Mr. Baird. Super. Can you also--what is the agency doing to 
tangibly ensure that rural communities like my district have 
access to healthy foods? And if so, is there more to be done to 
ensure parity with their urban counterparts?
    Ms. Dean. I feel like you teed me up for that question. The 
Secretary is going to be so pleased. Absolutely there is more 
that we can do for rural America, and that is why for the past 
month the Secretary and Cabinet Secretaries across the 
Administration have been on a rural tour to show how we can 
leverage all of government to ensure that we are supporting and 
working to revitalize rural communities. So, I mentioned 
earlier that the Rural Development mission area at USDA has a 
program called the Healthy Food Financing Initiative, which 
provides resources to support grocers to come in to rural 
areas. And the Secretary is a champion of finding ways to see 
if we can expand that program.
    Mr. Baird. It is interesting, food deserts, when I first 
heard that term, it didn't seem possible in a rural community 
like ours, but I am coming to find out that there are those 
situations in many communities.
    But my last question deals with work. So, could you tell us 
what the agency is doing to emphasize employment and training, 
especially when the businesses are clamoring, trying to get 
employees? So, do you have staff on the ground that are guiding 
states to help their guests to build higher-quality programs?
    Ms. Dean. Yes, sir. And let me just add in response to your 
last question, too, of course offering SNAP participants an 
online shopping option is a real way to address some of the 
food desert issues that we know rural Americans face, so I just 
wanted to flag that from before.
    In terms of employment and training, that is a program that 
states run with our Federal support, but the 2018 Farm Bill 
really did a terrific job at helping us to work to reshape the 
program to make sure that states are designing programs that 
are much more responsive to local employers' needs, incorporate 
local workforce programs and orientation to how to connect 
eligible workers to the available jobs in the community, and to 
make sure that the individuals that we are matching to training 
or employment are well-suited for those things. So, we provide 
support to the states in that and will be very soon on the 
ground in terms of assessing and reviewing what they are doing 
this fiscal year and the next fiscal year.
    Mr. Baird. Well, thank you, Madam Under Secretary. We 
appreciate the opportunity to be with you. I appreciate you 
being with us. I yield back.
    The Chairman. The gentleman from California, Mr. Panetta, 
is now recognized for 5 minutes.
    Mr. Panetta. Thank you, Mr. Chairman. I really appreciate 
this hearing, which I am sure there will be many hearings in 
which we are going to talk about this very, very important 
subject of the Supplemental Nutrition Assistance Program, 
especially as we approach the 2023 Farm Bill. And that is why 
it is so important to have Deputy Under Secretary Dean here, as 
well as Administrator Long. Thank you for your participation.
    I hail from the Central Coast of California. We have a lot 
of beauty, but we also have a lot of bounty, and that is with 
our fresh fruits and vegetables especially. As you know, in 
order to harvest those fresh fruits and vegetables, we can't 
just send a machine through the field. It is all about 
farmworkers. It is all about people who are actually in the 
fields bending down, discerning what is a fresh, ripe, 
aesthetically pleasing product to then package into a clamshell 
or package appropriately and get it to the store shelves.
    Those farmworkers are surrounded by fresh fruits and 
vegetables all day long. Unfortunately, what we have seen is 
that their access at home is not as plentiful as it is when 
they are at work, and it has been unfortunate that this has 
been a problem.
    However, let me just also give a shout-out to some programs 
that we have there locally and from our schools, which are 
starting to give their children exposure to our fresh fruits 
and vegetables. Starlight Elementary is developing a kitchen 
and a garden of course there. Our farmers are very generous. 
Some have pantries. Lakeside Organics in Watsonville has its 
own pantry for its farmworkers to choose from after work. And 
then our food banks are absolutely awesome and they have been 
awesome during the pandemic.
    However, as you know, many families, many farmworkers still 
greatly rely on SNAP, especially over the last few years with 
the pandemic, which has definitely led to higher food 
insecurity in many parts of my district. Salinas Valley, one in 
four children were still food-insecure in 2021, and then Santa 
Cruz and San Benito Counties, household food insecurity was 
over 30 percent unfortunately.
    So, I am obviously proud of what we did at the Federal 
level to increase SNAP assistance, but as you know and as you 
said today, that is temporary. There is more we have to do, and 
especially with the upcoming farm bill. We are going to have to 
prepare for the fights of increasing and keeping SNAP as to 
what we got.
    There are many programs in which we can make SNAP more 
convenient as well. The SNAP CARRY Act (H.R. 6688, SNAP COVID-
19 Anti-Hunger Restaurant Relief for You Act of 2020),* a bill 
that I authored, would open up the Restaurant Meals Program for 
all SNAP households and support our restaurants that have been 
rocked over the past few years that need to continue to 
recover.
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    * Editor's note: the legislation was introduced May 1, 2020 in the 
116th Congress.
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    My question to you is about the USDA and how is it 
supporting states and restaurants to become part of the 
Restaurant Meals Program? And is there anything else that can 
be done to support this important aspect, a food aspect to make 
the SNAP benefit more convenient and meaningful to all 
participants?
    Ms. Dean. Thank you, Congressman. California has been a 
real leader on the Restaurant Meals Program. California and 
just a few other states have taken advantage of it, and so I 
think during the pandemic we saw an uptick in the number of 
states interested because of the very issues that you raise.
    Often when we see states holding back on an option, it is 
just simply that they don't have the experience. They don't 
necessarily have the models to look to. So, I think with the 
few more in the program and there are several more queued 
behind, that will just create a more robust conversation 
amongst peers about the value and interest and we are likely to 
see it grow. And we will of course support that as states show 
more interest in taking on the program.
    Mr. Panetta. Outstanding. I have a minute left. I just want 
to go on to another topic. I am also a Member of the House 
Armed Services Committee, and I have been working to get 
military hunger prevention legislation across the goal line. 
Currently, you have tens of thousands of servicemembers who 
struggle to feed and support their families, around 20 percent 
of active servicemembers actually. I am ashamed to say it. 
Current SNAP guidelines often disqualify them from accessing 
this Federal lifeline, as you know.
    Senator Duckworth in the Senate and myself have introduced 
the Military Hunger Prevention Act (S. 1488/H.R. 2339), which 
would expand eligibility and modify income calculations to 
exclude the BAH, which is used to determine SNAP eligibility 
where we are working right now in the House on a version. Can 
you commit to working with us to find a suitable solution to 
address the issue of military hunger and provide our 
servicemembers access that they deserve at a minimum to the 
established nutrition programs like SNAP?
    Ms. Dean. Of course, sir. And let me just say we are so 
appreciative of the basic needs allowance that Congress just 
passed. We think by raising pay of military members, actually 
making it so that their pay is that they don't qualify for food 
assistance because they are getting sufficient income is really 
going to be a powerful way forward. But absolutely, we are 
happy to work with you.
    Mr. Panetta. Thank you. Thank you for your service. Thank 
you for your testimony today. Thank you, Mr. Chairman. I yield 
back.
    The Chairman. The gentleman from Iowa, Mr. Feenstra, is 
recognized for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Scott and Ranking Member 
Thompson. And I also want to say thank you to the Deputy Under 
Secretary for testifying today, I am very grateful.
    Making sure Americans are fed remains a shared and critical 
goal for this Committee, I think for most people in Congress. 
My state was home to Norman Borlaug, who was very instrumental 
in saving billions of people from starvation over the 
generations. His statue is honored in Statuary Hall, and he 
also received the Nobel Peace Prize for his work.
    Those who are vulnerable and need food should have access 
to it. Obviously, title IV, the Nutrition Title of the farm 
bill, makes up to 80 percent of the authorized funding, so it 
is important that we get it right as we move forward. We are 
trusted by constituents to be good stewards of the taxpayer 
dollars, and my district in northwest Iowa is almost entirely 
made up of rural communities. Seventeen percent of my district 
are seniors with seven percent being veterans.
    So, this is my question. This past Monday the Government 
Accountability Office released a report regarding the oversight 
and collaboration efforts to support veterans with food 
insecurity, and we just talked about this with Congressman 
Panetta. Broadly speaking, the GAO's recommendations include 
the VA fully monitoring and evaluating the effectiveness of 
these efforts and that the USDA improve its collaboration with 
the VA. So, Deputy Under Secretary Dean, can you talk to me or 
talk through the collaborative efforts as you see them today 
and what the agency plans to do to further ensure that veterans 
understand the nutrition supports available to them?
    Ms. Dean. Absolutely, Congressman. The food insecurity 
rates amongst veterans are disturbing, and it is really 
critical that we take action to address it. So, my team meets 
very regularly with the Department of Veterans Affairs, but, 
after looking at the GAO recommendation I am going to ask them 
whether it would benefit the partnership to formalize that, as 
the recommendation suggests.
    But the framework about how we have gone about this is we 
work to create material that can go directly to veterans to 
make them aware of their potential eligibility that goes into 
their welcome home kit that VA passes out. We do training when 
VA asks for it of their nurses and social workers and others 
who are directly supporting veterans to make sure they are 
aware of our programs so that when they are in a conversation 
with veterans or aware of a vulnerability that they can help 
connect. And then we are encouraging states to use their SNAP 
outreach dollars to do direct outreach to veterans. But we 
talked with other Members on the Committee earlier about the 
opportunity to do more and whether the farm bill offers the 
right time for our conversation about that.
    Mr. Feenstra. Yes. Well, I thank you for those comments. I 
think it is really good to formalize, as the GAO noted, I think 
it is very important. And I often think that veterans have done 
so much for us and they are very proud people, that sometimes 
they don't ask. And sometimes we have to look out and say how 
can we help, and I hear you saying that.
    Deputy Under Secretary, another question. Your testimony 
closes with a call to further strengthen SNAP. As I mentioned, 
we need to be deliberate when we are making changes to this 
program. We have to be very focused. Seeing title IV, it will 
cost roughly about $1 trillion over the next 10 years, which is 
very significant. So how do you reconcile the dollars with your 
programmatic goals? I mean, I look at results-based government. 
And results-based government is saying, ``Okay, here is the 
objective, here are the goals, here are the outcomes.'' Do you 
see anything like this going into these types of programs?
    Ms. Dean. Well, I think there is extraordinary evidence to 
support SNAP in terms of the outcomes that it achieves both in 
terms of alleviating immediate hardship and then over the 
longer-term poverty reduction, food insecurity, and then there 
is powerful evidence to show that children who received in 
utero or while as very small children have better health, 
employment, and education outcomes.
    But because that evidence base is so powerful, and 
honestly, evidence underlies all of our programs at FNS, we 
want to continue to make investments to assess how the programs 
are performing relative to expectations, so we will continue to 
do that.
    Mr. Feenstra. Well, and I appreciate that. I just think we 
are a government together. It is not government in D.C. It is 
we the people, and we the people are paying these dollars 
through our taxes. And I think we have to make sure we get it 
right always. And that is always a challenge, but we get it 
right through facts and figures and making sure that we look at 
the analysis and say, okay, this works or this doesn't. And 
sometimes we keep programs going on and on forever and 
sometimes there are new ones that we could put on and stop 
other ones. So, thank you for those comments. And Mr. Chairman, 
I yield back.
    The Chairman. Sure. And now the gentlewoman from Iowa, Mrs. 
Axne, is recognized for 5 minutes.
    Mrs. Axne. Thank you, Chairman Scott, and thank you, Under 
Secretary Dean, for joining us today. We are just going to keep 
the Iowa theme going here.
    I am looking very much forward to working on the 2023 Farm 
Bill, and on behalf of Iowa farmers and producers in 
particular, but also so that we can support strong nutrition 
policy that reduces food insecurity and improves access to 
healthy, sustainable foods for all Americans. And that means 
local.
    In my home state there are over 400,000 food-insecure 
Iowans. That is roughly one in seven adults and one in five 
children in Iowa not having reliable access to food. These 
aren't just numbers. As we all know, these are our friends. 
They are our neighbors. They are our community members. They 
are the kids in our schools that are struggling to get by.
    And thankfully, though, we have many dedicated Iowans doing 
a lot of great work to address food insecurity, but unless 
Congress continues to support and improve critical programs 
like SNAP, we are unlikely to make any meaningful progress 
towards food security.
    And so, I first want to applaud you and the USDA's actions 
to expand the Thrifty Food Plan, as directed by the 2018 Farm 
Bill. The USDA recently re-elevated the Thrifty Food Plan 
calculation, and that resulted in higher SNAP benefits for 
families. So, the updated Thrifty Food Plan, while modest, is 
estimated to lift about 2.4 million Americans, including more 
than a million children, out of poverty this year. And this 
also has tremendous impact for Iowa families. Just last year, 
SNAP benefits helped over 285,000 Iowans with nearly 70 percent 
of those participants being families with children and a 
majority of them in working families.
    So, Deputy Under Secretary Dean, I want to thank you and 
others again for your hard work on expansion of the Thrifty 
Food Plan. But I am concerned, however, with how food-insecure 
families will manage as these pandemic-related emergency 
allotments for SNAP expire. And as you are probably aware, Iowa 
has chosen to end those emergency allotments starting this 
month, which means many Iowans have seen their monthly SNAP 
benefits reduced. So, I would like to look at that. In your 
opinion, what has the impact of those emergency allotments 
been, particularly in rural areas over the past 2 years? And 
what does the end of these emergency allotments mean to 
families in Iowa?
    Ms. Dean. Well, thank you, Congresswoman. As you can 
imagine, given who we work for, we are on a very vigilant Iowa 
watch. So, I am actually going to turn it over to Administrator 
Long to respond.
    Ms. Long. Thank you for your question, Congresswoman. We do 
have some data available for the State of Iowa with respect to 
the impact of emergency allotments and the impact of the ending 
of those with the end of the public health emergency. So, as 
you know, the last month of emergency allotments were paid out 
in March, and our data indicates that about just under $30 
million was provided to SNAP recipients in that month. And that 
was to support about 142,000 households who participated in 
Iowan SNAP, so that gives a sense of the importance that the 
emergency allotment has provided and the impact of the 
transition.
    Mrs. Axne. Well, thank you so much, Ms. Long, for bringing 
that up. When you talk about this $30 million, 142,000 
households, what do you think the end of this emergency 
allotment will mean to those families?
    Ms. Dean. We can both jump in. I mean, it is going to be 
very disruptive as they sort out how to re-budget.
    Ms. Long. Yes.
    Ms. Dean. One of the groups that will have the biggest 
impact are seniors. Many of them would typically receive a much 
smaller benefit, $40 or $50 a month, but they have been 
receiving the maximum allotment, and they will see quite a big 
drop-off. That is very disruptive. I also think it will have a 
big impact on community agencies who help support families, and 
so we may see many families turning to emergency food. And so, 
we are looking for ways to make sure that we are continuing to 
support that community as well.
    Ms. Long. Yes, and I would simply add with respect to the 
impact, it will also impact your state administration of the 
program. I think Deputy Under Secretary Dean mentioned earlier 
that we recognize when these changes occur and the pandemic 
benefits are transitioned out, there are likely to be a lot of 
questions and issues that come up for recipients, which is 
going to translate into sort of more telephone calls and 
expanded workload that the state agency will be managing.
    Mrs. Axne. Well, I appreciate you letting me know about 
that. Those are not good things. And the last question I want 
to ask you then--and I think we also have another impact 
because studies have shown that for every $1 additional in SNAP 
benefits, it equates to $1.50 or more returning into the 
economy. What impact will the revised Thrifty Food Plan have on 
Iowa's economy, and what will be the impact of the grocers, 
grocery retailers in our state?
    Ms. Long. Yes, well, I think it was mentioned earlier the 
reevaluation of the Thrifty Food Plan resulted in a 21 percent 
increase in the value of the Thrifty Food Plan. And just 
looking roughly at data from Iowa, the last year we have was a 
couple years back, but it looks like $134 million worth of 
benefits were redeemed at Iowa retailers, so if you just kind 
of apply that 21 percent difference to that figure, that would 
suggest that that change means about another $90 million 
available to the Iowa economy to support families and then $90 
million in revenue. That same $90 million will certainly flow 
through retailers in those communities.
    The Chairman. Thank you for that. The lady's time has 
expired.
    And now the gentlelady from Florida, Mrs. Cammack, is now 
recognized for 5 minutes.
    Mrs. Cammack. Well, thank you, Mr. Chairman and our Ranking 
Member.
    Deputy Under Secretary Dean, can you walk me through why 
the update to the Thrifty Food Plan, as required by the 2018 
Farm Bill, was accelerated and finalized without regular 
updates to Congress? Was it simply coincidental or was it 
accelerated purposefully?
    Ms. Dean. I think the quick answer to that is that on the 
second or third day of his Presidency, the President directed 
USDA to see if we were able to undertake the reevaluation more 
quickly, and we assessed that we were able to do so.
    Mrs. Cammack. Okay. So, we only got these updates through 
Bloomberg, The New York Times and The Washington Post, so it 
would be nice if the Administration would acknowledge that, as 
required by the GAO report, that Congress should have been 
notified. But to me it looks a lot like your agency and this 
Administration wanted to avoid the criticism more than anything 
for what has been done here and push through the historic 
increase in SNAP by adding calories to the diets of Americans, 
which if you look at the research, it is actually contrary.
    So, I say that to say, to the consternation of my 
colleagues across the aisle, I put forward an amendment last 
year in the budget reconciliation to delay the update until a 
full GAO investigation could be completed. I think that is 
critical, and I think the American people deserve transparency 
and accountability. And I am sure you would agree with that.
    But I want to move on to program integrity moving forward 
because it appears that FNS opposes using a blended workforce 
to supplement merit staff in determining household eligibility. 
Now, at times of rapid caseload increases, it seems like FNS 
would leap at the chance to ensure efficient eligibility 
determinations, especially when other safety net programs do 
just that regularly. So, if this is true, can you tell me the 
rationale? And will FNS make a commitment to work with Congress 
to pass legislation allowing eligibility determinations to be 
made by contracted personnel?
    Ms. Dean. Congresswoman, we don't oppose a blended 
workforce. In fact, most states have them. The question is 
about where to draw the line with which functions need to stay 
with state or local government workers. So, we are focused on, 
and we believe this is where the statute is, eligibility 
determinations, the interview, and areas where we are 
maintaining privacy of very private personal information from 
households. So that is sort of the core nexus that we think 
needs to stay with state personnel.
    But the prior Administration put out guidance in 2020 that 
outlined some of the functions, given technology and the way--
what is the right way to say--the business flow has changed, 
identifying new opportunities to consider, as you pointed out, 
bringing in a blended workforce. And I think that was very 
sensible, and we have been talking with states about it when 
they raise their labor force challenges.
    Mrs. Cammack. I appreciate that feedback. It is not every 
day that you hear this Administration compliment the previous 
Administration's work, so I do appreciate that.
    And I do want to end on this because I do think that we can 
all kind of come together on this. And as someone who about 11 
years ago found myself homeless, I am not sure if you are 
familiar with my journey to Congress, but a little over a 
decade ago I was homeless, and now I serve in the House of 
Representatives along colleagues who, while I was homeless, 
talking about these same programs, were here.
    So, I think by the very definition of insanity, right, 
doing the same thing over and over and over again and expecting 
a different result, I think it is time that we start looking at 
new approaches. And we talk about SNAP as a safety net, and we 
talk about it in terms of bringing integrity and a hand up 
rather than a handout. And I think every Member on this 
Committee, every Member in the House of Representatives serves 
constituents that are in need of this program. So we want it to 
be useful, but we don't want it to be a lifestyle. And we want 
to talk about self-sufficiency and integrity without making 
people dependent. And it seems like today we deal with a lot of 
programs that are really designed by their very nature to 
create dependence rather than self-sufficiency.
    So, I hope this Administration will work with us on that 
and will not see COVID as an excuse moving forward. I look 
forward, truly, to working with my colleagues and the 
Administration to shore up any future updates. Hopefully, we 
can work closely on those updates to ensure that it cannot be 
used in a blatantly partisan manner, as we have seen in the 
past.
    And with that, I yield back. And thank you for being here 
today.
    Ms. Dean. Thank you.
    The Chairman. The gentlewoman from the U.S. Virgin Islands, 
Ms. Plaskett, who is also the Chair of the Subcommittee on 
Biotechnology, Horticulture, and Research, is now recognized 
for 5 minutes.
    Ms. Plaskett. Thank you so much, Mr. Chairman. And I also 
want to thank the Subcommittee Chairwoman, our good colleague, 
Congresswoman Jahana Hayes, for working with you, Mr. Chairman, 
on having this hearing, which is so vitally important to the 
farm bill.
    I have several questions that I would like to ask the 
witness. And I want to thank you as well for your honesty and 
for your openness and hearing our suggestions and having a 
discussion with us.
    Now, I understand that the USDA ERS study showed that food 
insecurity in the U.S. has remained steady in 2020 when 
compared to 2019, despite the pandemic. However, in the Census 
Household Pulse Survey Data for early April of this year, 11.2 
percent of adults, or nearly 24 million adults, reported that 
they do not have enough to eat in the previous week. It is 
clear that quick Congressional action during the early portion 
of the pandemic was successful in staving off the worst 
potential hunger crisis. The increasing hunger we are now 
seeing is due to a number of factors. But how can USDA and 
Congress, if necessary, act to ensure that our safety net 
programs like SNAP are providing sufficient support for 
Americans in need?
    Ms. Dean. Thank you, Congresswoman, for your question. What 
is the right way to say it? We were very pleased that the 
response that wasn't just through food assistance but through a 
really robust set of expansions of support to households during 
a period of incredible crisis. It worked, and I think that is 
an important lesson for the future.
    Ms. Plaskett. Right. Whatever anybody says, the child tax 
credit worked for American families.
    Ms. Dean. That is right where I was going, ma'am, and that 
is that--you asked me what we could do--I think the President's 
agenda on making sure that, as we recover, we are recovering in 
a way that works for all and that lifts folks up, investments 
in childcare, continuing the expansions of the CTC and the 
EITC, supporting housing, as well as the investments in summer 
feeding that the USDA sought for building off of pandemic EBT, 
those would be critical investments to addressing the hardships 
that you described.
    Ms. Plaskett. Thank you. My second question is related to 
the Farm to School Grant Program. Now, the Department of 
Agriculture's Farm to School Grant Program includes $5 million 
in annual mandatory funding. And since its inception in 2013, 
USDA has awarded over $52 million through Farm to School 
grants, funding a total of 719 projects, reaching almost 21 
million students and 47,000 schools. We have seen increased 
demand for Farm to School programming, and as we emerge from 
the pandemic, we must ensure that this program has the 
necessary resources. Do you support proposals like the Farm to 
School Act of 2021, H.R. 1768, to allow more of these impacted 
projects to be realized by increasing the annual mandatory 
funding to $15 million and the maximum grant award amount of 
$250,000, expanding markets to local farms and targeting 
increased participation? So targeted participation, expanding 
markets to local farms, and increasing the mandatory funding, 
amongst other provisions?
    Ms. Long. Well, thank you for that question, Congresswoman. 
We certainly share your view on the incredible value of the 
Farm to School Program. You are obviously very well-versed in 
its impact. I can share from personal experience that nothing 
is more motivating for schools and students and the entire 
community than really engaging around where the food comes from 
and integrating what is happening at schools and what is 
happening in the broader community, including local producers. 
So, we would be absolutely delighted to work with you moving 
forward to look at how we can strengthen that program and some 
of the ways you have described, we would also be happy to offer 
other observations and experiences.
    Ms. Plaskett. Well, our office is excited about the work 
that we have coming up and how we can all be supportive of one 
another. In the Virgin Islands, with the amount of students 
that we have living in poverty, we know how critical the Farm 
to School Program is to not only support our small farming 
community--micro-farmers that are one of their primary markets 
is this--as well as to our seniors, but also to ensure that our 
students have nutritious food so that they can think and they 
can learn and they can be productive members of our society.
    So, again, thank you, Mr. Chairman, for the opportunity to 
speak and to ask questions of these witnesses, and I yield 
back.
    The Chairman. And thank you, Ms. Plaskett.
    And now the gentlelady from Louisiana, Ms. Letlow, is 
recognized for 5 minutes.
    Ms. Letlow. Thank you, Chairman Scott.
    I represent the 5th District of Louisiana, which is home to 
many rural communities, and agriculture and small businesses 
are the backbone of our local economies. When reviewing the 
USDA nutrition programs, I believe it is essential to ensure 
they are adequately meeting the needs of families, especially 
in rural America where many lack access to fresh foods like 
fruits and vegetables.
    In the 2018 Farm Bill, Congress authorized more than $\1/2\ 
billion in mandatory funding over 10 years for the Gus 
Schumacher Nutrition Incentive Program to incentivize SNAP 
recipients to eat fruit and vegetables. In addition, Congress 
spent another $75 million in the American Rescue Plan Act with 
no strings attached.
    Fast-forward 4 years. Louisiana hasn't seen a dime of this 
funding expended in retail grocery stores where most SNAP 
recipients do their shopping. Even if there were grocery stores 
offering these incentives, we wouldn't be able to find those 
statistics because the USDA hasn't updated the GusNIP retailer 
store locator data in years.
    Deputy Under Secretary Dean, the 2018 Farm Bill prioritized 
allocating GusNIP funding to retail locations. How has the USDA 
adequately provided retailers an opportunity to participate in 
this program?
    Ms. Dean. Congresswoman, I guess I will need to get back to 
you on that. GusNIP is operated through another arm of USDA, 
but I take your--I am concerned about your concerns, and so I 
want to make sure that we are responsive to--I would flag that 
the farm bill also included another provision which allows 
retailers themselves to offer incentives to SNAP participants, 
and that, too, we haven't seen a robust take-up of. And it is 
an area that I want to explore with my team. I feel that 
retailers across the country are participating with the 
program, they are supporting participants through their grocery 
stores, and we would love to see them be offering more 
incentives at their own direction.
    Ms. Letlow. Thank you. I would appreciate that information. 
And it is also my understanding that these incentives are only 
available at farmers' markets in Louisiana, yet farmers' 
markets represent less than one percent of all SNAP 
redemptions. My grocery retailers who serve SNAP populations 
are very eager to participate, but they don't even have that 
opportunity. Why is this, and what can we do to change it?
    Ms. Dean. Well, I can't speak to that particular issue, but 
funding for GusNIP is limited, so wherever it operates, it is 
smaller than we would like it to be, so that is of course 
something we are happy to talk with you further about.
    [The information referred to is located on p. 823.]
    Ms. Letlow. Okay. As our Committee considers the farm bill 
reauthorization, it is essential to ensure these funds are 
getting to the individuals they are intended for and need them 
the most. One reform could be providing these incentives 
directly on the SNAP EBT card to help at-risk populations. Do 
you have any feedback on this kind of proposal?
    Ms. Dean. We couldn't agree with you more, and that is 
something that we are looking at is how to streamline and 
coordinate all of our incentive programs, farmers' market 
programs, and make sure that we have simpler, easier solutions 
that would leverage off of the EBT benefit.
    Ms. Letlow. Okay. Thank you. I look forward to working with 
you on that and my colleagues to improve this program and 
provide greater transparency. Thank you, Mr. Chairman. I yield 
back the remainder of my time.
    The Chairman. Thank you. And now the gentleman from 
Florida, Mr. Lawson, is now recognized for 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman and Ranking Member, for 
this hearing today. And, Madam Under Secretary, you have heard 
earlier from some of my colleagues about student hunger. The 
reason why I make this statement is I have here maybe as many 
as almost 60,000 students. And I know while the Biden 
Administration acted to support college students during the 
pandemic, COVID-19 has only worsened food insecurity and 
intensified racial disparities and hunger among students. Once 
the public health emergency ends, the waiver in place to expand 
SNAP eligibility for college students will expire, and many 
will lose access to this very important vital lifeline that 
they have.
    My question is, the bill that I sponsored, H.R. 6272, the 
College Student Hunger Act, would make permanent the temporary 
eligibility waiver passed in the Consolidated Appropriation Act 
of 2021 and includes additional waivers for college students 
who are eligible for Pell Grants and reduce the work 
requirement to 10 hours a week, among a number of other things. 
What else do you believe can be done by Congress to better 
address college students' specific needs?
    Ms. Dean. Well, thank you, sir, for the question. I think 
we have been talking about the struggles of college students 
and college student hunger, which is of course a serious 
concern, but I think the broader question is affordability of 
college and the affordability of pursuing any kind of 
credential or degree through higher ed. That is fundamentally a 
pathway to more opportunity in the workplace, and that is 
what--the President put forward some fairly bold initiatives, 
for example, to make a community college free of charge to all 
students.
    Now, we may not be pursuing that path, but I think the 
broader question is higher ed and college affordable is really 
the core one. And then when folks are pursuing a credential, a 
degree, additional higher ed training, how do we make sure that 
we are adequately supporting them?
    So, I think all of the ideas that you put forward are 
terrific, and I think we also want to make sure we do more, and 
perhaps that is with Congressional direction or support, but 
that we are doing more with the Department of Education to make 
sure that education institutions are aware of all of the 
supports such as SNAP or health coverage and that they are 
informing students of that. I think that that will probably be 
a much more powerful intermediary to students than assuming 
that we can reach them through the SNAP agencies. But we will 
do both.
    Mr. Lawson. Okay, thank you very much. And one other thing, 
you stated that the economic fallout in the early days of the 
pandemic, I have inflation and housing costs--as it was stated 
earlier--continuing to rise and many Americans are still 
struggling to afford a nutritious meal for themselves and their 
families. So, my question would be, before the public health 
emergency ends, what can be done by Congress to help prepare 
states and better expand their capacity to meet the needs of 
their residents?
    Ms. Dean. Well, to be fair, I think states are very much 
focused on this. They are also concerned about the end of the 
public health emergency and losing flexibilities, not just in 
SNAP but in other programs, as well as losing the additional 
eligibility rules and augmented benefits. They care about their 
residents just as much as we do. We have engaged in a very 
aggressive outreach and engagement effort, as have our 
colleagues at HHS through Medicaid, talking with state agency 
leaders about where are you today, where do want to be, what 
disruption does the public health emergency end cause for you, 
and what do we do to work together, what flexibilities do you 
need from us, what peers do you need to talk to, to learn from 
their experience, and which of you are, for example, asking 
your legislatures for additional resources or supports. So, it 
is a very active conversation.
    I actually just spoke with Secretary Harris to think about 
other states in other parts of the country that were good 
models for Florida as she was thinking about how best to set up 
operations to deal with these changes.
    Mr. Lawson. Okay. My time has about expired, but I would 
like to comment later on, if you get a chance if someone asks 
the question--how can we do something about the cost of the 
meals? I think it was discussed earlier in the conversation, 
and I don't know exactly what was really stated that we need to 
do, but with that, Mr. Chairman, I yield back.
    The Chairman. Thank you very much, Mr. Lawson.
    And now the gentleman from the Northern Mariana Islands, 
Mr. Sablan, is recognized for 5 minutes.
    Mr. Sablan. Well, thank you. Thank you very much, Chairman 
Scott and Ranking Member Thompson, for holding this hearing. 
Good morning, Secretary Dean. Good morning, Ms. Long.
    Madam Secretary, you mentioned in your testimony that FNS 
is, and I quote, ``working towards parity for the people of the 
Commonwealth of the Northern Mariana Islands, Puerto Rico, and 
American Samoa.'' Could you expand on what you mean by parity 
and the steps the Department has taken and will take to ensure 
that it continues to work towards parity for the Northern 
Mariana Islands, Puerto Rico, and American Samoa? And I like 
the word parity.
    Ms. Dean. Good to see you, Congressman. I would be happy to 
do that. As you well know, I am probably one of the foremost 
champions on this issue. Those three Territories don't have 
access to household food assistance in SNAP. Instead, they are 
offered block grants. And so, although each one has a different 
potential pathway to having a more robust household food 
assistance program, in the case of the Northern Mariana 
Islands, the Secretary has an authority to expand household 
food assistance, and we have been able to work with the 
governor through your leadership to do just that, where it is 
the Northern Mariana Islands who was able to put forward a plan 
or proposal for household food assistance program that was more 
aligned with the level of support that is offered through SNAP, 
although not exactly the same, because that wasn't perfectly 
well-suited for them.
    With American Samoa, we have been in similar conversations, 
although I would say unfortunately their block grant sets a 
statutory cap on the amount of assistance that we can provide 
that way.
    And then, in Puerto Rico, where it would be a much bigger 
undertaking to shift to SNAP just because of the size and scale 
of the program, we are engaged in monthly conversations, 
ongoing workgroups to talk through the particulars of a shift 
so that if the Committee is prepared to consider that, that 
each of the Territories can come and talk about what SNAP would 
mean for them and their readiness to take it on.
    Mr. Sablan. Yes, thank you very much. Again, I know so many 
in my community have access to nutritious food because of the 
generosity of the American people, and I can never forget that. 
I am very grateful for that.
    Now, Ms. Long, if I may, two farm bills ago Congress 
authorized funds for the development and installation of the 
EBT system for FNS, for SNAP here in the Northern Mariana 
Islands. That continues to be unavailable, and I am sometimes 
made to understand from the local--from the ground here, that 
the obstacle may be coming from region 9, from USDA, from FNS. 
Can you tell me why we still don't have EBT card in place in 
the Northern Mariana Islands? Including, one of my colleagues 
earlier said there was fraud, waste that people can fraud the 
system. I just can't imagine how you can fraud a system with 
paper coupons. So, any plans on getting EBT implemented in the 
Northern Mariana Islands, especially since it has been 
authorized and especially since funds have been available all 
these years?
    Ms. Dean. Well, Congressman, if I may, I will take the 
question.
    Mr. Sablan. Okay, all right, thank you. Thank you.
    Ms. Dean. We understand that this is something that the 
Northern Mariana Islands want to pursue. My understanding is 
that there has been difficulty in securing a vendor to provide 
a system, but we are happy to dig more into that and follow up 
with that.
    [The information referred to is located on p. 819.]
    Mr. Sablan. Okay. Okay. Because, WIC was able to do this 
and get this program running, running very well. In fact, I 
know of one department store here that sells groceries, and I 
encourage them to get up and prepare for EBT someday, and they 
did, and it is working well to their delight.
    But anyway, Ms. Dean, thank you. Madam Secretary, thank you 
for you, your staff, your colleagues, and your Department for 
everything you continue to do for us. It is not always very 
smooth and not always easy, but please know that it is always 
very much appreciated.
    Mr. Chairman, thank you for the hearing, and I yield my 
time back.
    The Chairman. Well, thank you, Mr. Sablan.
    And we have reached the end of our hearing today. But 
before we adjourn, I certainly want to recognize the Ranking 
Member for his closing remarks, my closing remarks, and also we 
have a special guest with us. So, please, Ranking Member, you 
are recognized for your closing remarks.
    Mr. Thompson. Thank you very much, Mr. Chairman. First of 
all, thank you to our USDA leaders out here for testifying, 
your leadership. I look forward to continuing to work with you. 
And I will make a few more comments on this section. I want to 
take the liberty of recognizing some folks here. First of all, 
I want to thank the staff, both of our staffs for their work 
and due diligence as we prepare for the 2023 Farm Bill. I 
thought this was--these are the kind of hearings I look forward 
to. I think they are instructive, having folks from USDA that 
are responsible for implementing these various titles, so thank 
you, ladies, for your leadership and being here.
    I want to recognize--I have got a--we have had the pleasure 
of working with a very special student intern that has been 
with us, and this is her final week and she is from Texas A&M, 
Tatum Hausman, and so thank you to her for her work. Best 
wishes to her and her continued education.
    And then I brought another friend of mine with me, Seth 
Parrish. And Seth is--stand up there, Seth.
    The Chairman. Hey, there he is.
    Mr. Thompson. Seth is a--
    The Chairman. Why don't we give a hand for both of the--
    Mr. Thompson. Seth is a--
    Mrs. Hayes. I would have brought friends.
    Mr. Thompson. Seth is a sixth grader from Maryland. He has 
been a friend of mine for many years. This is the fourth year 
he has shadowed me. He is part of an organization called 
Tuesday's Children where his dad served and sacrificed in the 
Army and sadly died about a month before Seth was born. But 
Seth has become a really close friend and I am really happy to 
have him here today. I just had him on the House floor where I 
bragged on him a little bit.
    The Chairman. Way to go.
    Mr. Thompson. Yes. So, in terms of this hearing, my thanks 
to the witness. Obviously, I laid out my initial principles in 
looking at the Nutrition Title. I really believe like true 
north on a compass where you lay your principles out first, and 
it helps you cut through sometimes some of the minuti# and also 
some of the controversy if we stay focused based on principles. 
And I have laid those out in my opening comments.
    We obviously need to make certain that our intentions 
create good outcomes. We need to have executive action that is 
transparent. We need to work together to promote work, 
integrity, and great nutritional outcomes that I think we are 
all dedicated to, that I know we are all dedicated to. And I 
will follow up with some additional questions for the record.
    So with that, thank you so much for your testimony today. 
And, Mr. Chairman, I yield back.
    The Chairman. And thank you, Ranking Member, for your 
expert participation, as always. It is a pleasure working with 
you. And I want to thank the Members of the Committee. I 
certainly want to thank our distinguished Chairwoman of our 
Subcommittee for the great work that she is doing. Please give 
her a hand. Thank you.
    And of course, I want to thank the Deputy Under Secretary, 
Ms. Dean, and our Administrator, Ms. Long, for taking the time 
to join us and presenting this extraordinary hearing. This is 
an important hearing to us.
    And now, I would also like to recognize Ms. Jessica Shahin. 
Now, let me tell you about her, Ms. Shahin. She is here today, 
and I am so delighted for your long service that you have given 
to us in this area. And as I look at you, I just want you to 
know there is no greater thing you could be doing than making 
sure that people receive food. We can do without a lot of 
things, but the one thing we cannot do without is food. And you 
have put in 18 years of incredible service. You started at the 
USDA in 2001 as the Associate Administrator for SNAP and have 
become an institution in the SNAP world. And we thank you for 
that. You are a blessing and have been a blessing to our 
nation. And please, won't you join me, everyone, in giving her 
a most deserving round of applause. Thank you so much for your 
service, we really appreciate it.
    And now, as we continue to review the previous farm bill 
and look forward to the upcoming 2023 Farm Bill, I hope we will 
all keep in mind what we heard from USDA today. The farm bill 
is one of the most unique legislative packages in Congress. As 
was referenced, SNAP is close to 80 percent of our spending 
package with our farm bill. That shows you the importance of 
what we are doing with this Committee, and particularly with 
SNAP, with a long history of passing a bipartisan coalition of 
urban, suburban, and rural Members of Congress joining together 
for the collective purpose of supporting our nation's food 
system all the way from the farmer to the consumer.
    SNAP is a vital piece of that puzzle, providing Americans 
in need with a hand up, not a handout. And there is no greater 
hand up we need than to make sure we are healthy, and you 
cannot be healthy without the proper food being put on the food 
tables of our families, regardless of their circumstance, but 
particularly for the lower-income and people who are struggling 
and, as we pointed out earlier, special groups like our 
veterans who are suffering today from hunger. And I just look 
forward to working as we have been with our Subcommittee 
Chairwoman on this bill to help our veterans.
    And this is why, in the next farm bill, I will continue to 
be committed to protecting and preserving SNAP, to ensure that 
it will continue to serve as our nation's frontline anti-hunger 
program for many decades to come.
    Again, thank you all for joining us today. And now we reach 
adjournment, and I must read these words. Under the Rules of 
the Committee, the record of today's hearing will remain open 
for 10 calendar days to receive additional material and 
supplementary written responses from the witness to any 
question posed by our Members.
    And with that, this hearing is adjourned.
    [Whereupon, at 1:08 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
Submitted Letter by Hon. David Scott, a Representative in Congress from 
 Georgia; on Behalf of Bill Sweeney, Senior Vice President, Government 
                             Affairs, AARP
May 3, 2022

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Scott and Ranking Member Thompson:

    AARP, on behalf of our 38 million members and all older Americans 
nationwide, appreciates the opportunity to submit a written statement 
for the hearing record of the April 28 House Committee on Agriculture 
hearing, ``A 2022 Review of the Farm Bill: The Supplemental Nutrition 
Assistance Program''. SNAP serves as a lifeline for millions of people 
who are struggling to put food on the table, and nearly half of all 
SNAP households include at least one adult age 50 or older.\1\ *
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    \1\ Dean, O., Figueiredo, C. Millions of Adults Ages 50 and Older 
Rely on the Supplemental Nutrition Assistance Program (SNAP), AARP 
Public Policy Institute, Dec. 2021. https://www.aarp.org/content/dam/
aarp/ppi/2021/12/millions-of-adults-rely-on-snap.doi.10.26419-
2Fppi.00106.002.pdf.
    * Editor's note: footnotes annotated with  are retained in 
Committee file.
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SNAP is critical to the food security and health of millions of older 
        Americans
    SNAP is the nation's largest nutrition assistance program. There 
are 8.7 million households with at least one adult age 50 or older 
participating in the program,\2\ though many more are eligible. While 
the program provides a modest benefit--$142 a month on average, or 
$1.56 per meal--it helps older adults meet their basic food needs.\3\ 
The program reduces food insecurity \4\ and poverty and is linked to 
improved health outcomes. Growing evidence suggests SNAP is associated 
with fewer inpatient hospitalizations, emergency department visits, and 
long-term care admissions among older adults.5-7 This 
translates into substantial health care savings. A recent study found 
that SNAP enrollment was associated with lower Medicaid spending among 
older adults dually eligible for Medicare and Medicaid.\8\ 
Additionally, qualitative interviews found that increased SNAP benefits 
during the pandemic helped participants purchase healthier food and had 
a positive impact on their health.\9\ Access to an adequate and 
nutritious diet is foundational to maintaining health, quality of life, 
and independence as people age.
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    \2\ Id.
    \3\ Amount refers to the average SNAP household with adults ages 50 
and older. AARP Public Policy Institute analysis of SNAP Quality 
Control data, 2019.
    \4\ Ratcliffe, C., McKernan, S. This study was conducted by The 
Urban Institute under a cooperative research contract with USDA's 
Economic Research Service (ERS) Food and Nutrition Assistance Research 
Program (FANRP): contract number 59-5000-7-0113. April 2010. https://
www.ers.usda.gov/publications/pub-details/
?pubid=84335#::text=The%20results%20suggest%20 
that%20receiving,of%20reducing%20food%2Drelated%20hardship.
    \5\ Szanton, S., Samuel, L., Cahill, R., Zielinskie, G., Wolff, J., 
Thorpe, R. Jr., Betley, C. Food assistance is associated with decreased 
nursing home admissions for Maryland's dually eligible older adults. 
BMC Geriatr. July 2017; 17(1): 162. doi: 10.1186/s12877-017-0553-x. 
PMID: 28738897; PMCID: PMC5525341.
    \6\ Samuel, L., Szanton, S., Cahill, R., Wolff, J., Ong, P., 
Zielinskie, G., Betley, C. Does the Supplemental Nutrition Assistance 
Program Affect Hospital Utilization Among Older Adults? The Case of 
Maryland. Popul. Health Manag. April 2018; 21(2): 88-95. doi: 10.1089/
pop.2017.0055.
    \7\ Berkowitz, S., Palakshappa, D., Rigdon, J., et al.; 
Supplemental Nutrition Assistance Program Participation and Health Care 
Use in Older Adults: A Cohort Study. Ann. Intern. Med. Dec. 2021; 174: 
1674-1682.
    \8\ Ibid.
    \9\ Food Research & Action Center. The Case for Making SNAP 
Benefits Adequate: Reflections From Interviews With Older Adults. Feb. 
2022. https://www.aarp.org/aarp-foundation/our-work/food-security/the-
case-for-making-snap-benefits-adequate-reflections-from-interviews-
with-older-adults/.
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Older adult SNAP participation: Millions are eligible but not enrolled
    Despite SNAP's importance, seniors have historically had much lower 
participation rates in the program than other age groups. The U.S. 
Department of Agriculture reports that in fiscal year 2018, only 48 
percent of adults ages 60 and older participated in the program under 
Federal income and resource rules.\10\ While using Federal rules is 
useful for state comparisons, forthcoming AARP/Mathematica research 
estimates an even lower FY 2018 participation rate of 29 percent among 
this age group using state-specific broad-based categorical eligibility 
rules, which better reflect the actual percentage of those eligible for 
the program. Under state SNAP rules, we estimated that 16 million--or 
over 60 percent--of eligible adults ages 50 and older were not enrolled 
in the program in FY 2018. While many would have been eligible for the 
minimum benefit, over three million lived in households that could have 
been eligible for over $200 a month.\11\
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    \10\ https://fns-prod.azureedge.us/sites/default/files/resource-
files/Trends2016-2019.pdf.
    \11\ AARP Public Policy Institute and Mathematica analysis using 
fiscal year 2018 Current Population Survey (CPS) and fiscal year 2018 
SNAP Quality Control (QC) data.
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    Qualitative research has identified common reasons for 
nonparticipation, including the belief that the benefit would not be 
worth the effort, social isolation, a confusing application process, 
and barriers such as discomfort with technology.12-13 
Administrative inefficiencies such as outdated enrollment systems, 
processing delays, and complicated recertification processes may also 
contribute to the under-enrollment of eligible seniors in SNAP.\14\ We 
look forward to working with Congress to address this challenge to make 
sure that older Americans can access the SNAP benefits for which they 
are eligible.
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    \12\ Levin, M., Paprocki, A., Mack, M., Grey, C. Older Adult SNAP 
Access. Social Policy Research Associates, 2021. https://www.aarp.org/
content/dam/aarp/aarp_foundation/pdf/2021/spr-older-adult-snap-access-
report-fullreport.pdf.
    \13\ Gabor, V., Williams, S., Bellamy, H., Hardison, B. Seniors' 
Views of the Food Stamp Program and Ways To Improve Participation--
Focus Group Findings in Washington State: Final Report. Health Systems 
Research, Inc., USDA Economic Research Service, June 2002. https://
www.ers.usda.gov/webdocs/publications/43151/51497_efan02012.pdf?v=0.
    \14\ Food Bank News. SNAP Can Slash Healthcare Costs. But How To 
Boost Enrollment? Nov. 2021. https://foodbanknews.org/snap-can-slash-
healthcare-costs-but-how-to-boost-enrollment/.
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Food insecurity among older adults
    Nearly 9.5 million Americans ages 50 and older experience food 
insecurity, meaning they have limited or uncertain access to adequate, 
nutritious food.\15\ Older adults may face life challenges as they 
age--such as experiencing a medical crisis, job loss, or the death of a 
spouse or other loved one--that may result in financial instability and 
make it difficult to afford food. SNAP is critical for older workers 
who lose their job. In economic downturns especially, older workers 
face longer durations of unemployment compared with younger job 
seekers. Rising food prices can mean the difference between putting a 
meal on the table and going without for someone living on a tight 
budget. When financially strained, seniors may be forced to choose 
between paying for food and paying for other necessities like rent, 
transportation, medication, and medical bills. Between an aging 
population and rising food prices, it is increasingly important to find 
ways to connect eligible older adults to SNAP.
---------------------------------------------------------------------------
    \15\ Dean, O., Figueiredo, C. Over 9 Million Adults Ages 50 and 
Older Faced Food Insecurity in 2020, AARP Public Policy Institute, 
March 2022. https://www.aarp.org/content/dam/aarp/ppi/2022/03/over-
nine-million-adults-50-and-older-faced-food-insecurity.doi.10.26419-
2Fppi.00162.001.pdf.
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Impact of COVID-19 on food insecurity among older Americans
    In 2020, the COVID-19 pandemic led to widespread job loss that hit 
older workers particularly hard.\16\ Yet, food insecurity did not 
impact everyone equally. According to annual data from USDA, the 
overall share of older Americans experiencing food insecurity did not 
change significantly from 2019 to 2020,\17\ in part, likely due to 
short-term pandemic-related relief policies. However, between 2019 and 
2020, food insecurity increased among older Black, American Indian/
Alaska Native, Hispanic, and Asian adults, while it decreased slightly 
among older White adults.\18\ In 2020, nearly one in five Black and 
American Indian/Alaska Native adults ages 50 and older experienced food 
insecurity. Among this age group, 14.6 percent of Hispanic adults were 
food-insecure, compared with 5.6 and 5.2 percent of Asian and White 
adults ages 50 and older, respectively.\19\
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    \16\ Schramm, J., Devastating Job Losses May Be Pushing Older 
Workers into Retirement, AARP Public Policy Institute, June 2020, 
https://blog.aarp.org/thinking-policy/job-losses-may-be-pushing-older-
workers-into-retirement.
    \17\ U.S. Department of Agriculture, Household Food Security in the 
United States in 2020, Sept. 2021. https://www.ers.usda.gov/webdocs/
publications/102076/err-298.pdf?v=4757.2.
    \18\ Dean, O., Pandemic Widens Food Insecurity Disparities Among 
Older Adults, AARP Public Policy Institute, Nov. 2021. https://
blog.aarp.org/thinking-policy/pandemic-widens-food-insecurity-
disparities-among-older-adults.
    \19\ Dean, O., Figueiredo, C., Over 9 Million Adults Ages 50 and 
Older Faced Food Insecurity in 2020, AARP Public Policy Institute, 
March 2022. https://www.aarp.org/content/dam/aarp/ppi/2022/03/over-
nine-million-adults-50-and-older-faced-food-insecurity.doi.10.26419-
2Fppi.00162.001.pdf.
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Impact of food insecurity on health
    Older adults who are food-insecure are at increased risk for many 
negative health outcomes. They are over twice as likely to report being 
in fair or poor health relative to their peers who are food-secure.\20\ 
Compared to food-secure older adults, they are 78 percent more likely 
to have asthma, 74 percent more likely to be diabetic, 71 percent more 
likely to have congestive heart failure, 64 percent more likely to have 
experienced a heart attack, 20 percent more likely to report at least 
one Activities of Daily Living limitation, and almost three times more 
likely to experience depression.\21\ Food insecurity among this 
population also results in significant costs to the American public, 
particularly through increased expenditures on health care. Experts 
widely agree that nutrition is one of the most important factors 
influencing our health.\22\ Enrolling the millions of older Americans 
eligible but not enrolled in SNAP could result in billions of dollars 
in health care savings.\23\
---------------------------------------------------------------------------
    \20\ Lee, J., Frongillo, E., Nutritional and Health Consequences 
Are Associated with Food Insecurity among U.S. Elderly Persons. J. 
Nutr. May 2001, vol. 131 no. 5 1503-1509. http://jn.nutrition.org/
content/131/5/1503.long.
    \21\ Ziliak, J., Gundersen, C. The Health Consequences of Senior 
Hunger in the United States: Evidence from the 1999-2016 NHANES, Aug. 
2021. Report for Feeding America. https://www.feedingamerica.org/
research/seniorhunger-research.
    \22\ Trust for America's Health, Prevention for a Health America: 
Investments in Disease Prevention Yield Significant Savings, Stronger 
Communities, Feb. 2009. https://www.tfah.org/wp-content/uploads/
archive/reports/prevention08/Prevention08.pdf.
    \23\ Zielinskie, G., Samuel, L., Szanton, S. To Improve Health and 
Reduce Costs for Low-Income Seniors, Invest Upstream, Health Affairs, 
Oct. 2017. https://www.healthaffairs.org/do/10.1377/
forefront.20171024.786928/.
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    SNAP plays a critical role in reducing the likelihood of food 
insecurity and we must make sure that eligible older adults can get the 
food they need to nourish themselves when they fall on hard times. The 
reauthorization of the farm bill presents an opportunity to solve for 
the persistent participation challenges in SNAP. We appreciate the 
opportunity to provide our perspective and look forward to working with 
you throughout the reauthorization process. If you have any questions 
or need more information, please feel free to contact me or Nicole 
Burda on our Government Affairs team at [Redacted] or [Redacted].
            Sincerely,
            
            
Bill Sweeney,
Senior Vice President Government Affairs.
                                 ______
                                 
Submitted Article by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania


[https://www.wsj.com/articles/the-eternal-covid-emergency-health-and-
human-services-xavier-becerra-government-welfare-11649968111]
The Eternal [COVID] Emergency
Opinion \1\
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    \1\ https://www.wsj.com/news/opinion?mod=breadcrumb

Review & Outlook \2\
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    \2\ https://www.wsj.com/news/types/review-outlook-u-
s?mod=breadcrumb.

By The Editorial Board \3\
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    \3\ https://www.wsj.com/news/author/editorial-board.

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April 15, 2022 6:48 p.m. ET

          Health and Human Services extends the crisis again so it can 
        keep the extra welfare flowing.
        
        
          Secretary of Health and Human Services Xavier Becerra.
          Photo: Ron Sachs--Pool Via CNP/Zuma Press.

    The [COVID] emergency is over thanks mainly to vaccines and 
therapies. Yet Health and Human Service s Secretary Xavier Becerra on 
Wednesday extended the national public-health emergency for another 90 
days. Why? Because permanent crisis means more dependence on 
government.
    The Trump Administration invoked the emergency under the Public 
Health Service Act on Jan. 31, 2020 to reduce red tape for healthcare 
providers. But then Congress linked an expansion of Medicaid and food 
stamps to the declaration. Now progressives don't want the emergency to 
end.
    The Families First Coronavirus Response Act of March 2020 suspended 
food stamp work requirements for able-bodied adults without dependents 
during the emergency. These individuals normally can't receive benefits 
for more than 3 months over a 3 year period unless they work or 
participate in a work-training program. Congress also boosted benefits, 
so the average monthly payment is now double ($240 per person) what it 
was in 2019.
    Suspending work requirements was intended to help workers laid off 
during lockdowns when few jobs were available. But once lockdowns 
eased, businesses were desperate to hire. The sweetened food stamps and 
suspended work-requirement--on top of enhanced unemployment benefits 
and other transfer payments--reduced the incentive to return to work.
    Now there are 1.8 job openings for every unemployed worker, and the 
unemployment rate has fallen to near pre-pandemic levels. Yet as of 
January there were nearly 2.5 million more households receiving food 
stamps than in 2019 and 500,000 more than in April 2020. What's wrong 
with this picture?
    States may end the supplemental food stamps before the public-
health emergency is lifted, but only a dozen or so have. Even GOP 
governors struggle to resist free Federal money, and they fret about 
being attacked for refusing extra benefits amid rising food costs, even 
if beneficiaries aren't poor.
    Congress also increased Medicaid funding for states during the 
emergency on the condition they don't remove beneficiaries from their 
rolls, even if they earn too much to qualify. Medicaid enrollment has 
swelled by more than 14.6 million (20%) since February 2020--more than 
gained coverage from ObamaCare.\4\
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    \4\ https://www.macpac.gov/subtopic/medicaid-enrollment-changes-
following-the-aca/.
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    A recent Journal of the American Medical Association study found 
that Wisconsin Medicaid enrollment increased 11.1% more than would be 
expected based on economic factors during the first 7 months of the 
emergency, mostly because ineligible beneficiaries weren't kicked off. 
Some states now want to prune their rolls but can't without losing 
Federal funds. Congress has hooked states on Federal transfer payments, 
and Democrats want them to stay hooked.
    The emergency rules have served some useful purposes, such as 
letting Medicare cover telehealth services and waiving a Medicare 
requirement that beneficiaries be hospitalized for 3 days before the 
cost of nursing-home care is covered. But the Administration can make 
some of those useful changes permanent by regulation and ask Congress 
to include those it can't in the mooted [COVID] spending bill.
    The same bill is also a chance to override Mr. Becerra's 
declaration of what is becoming an eternal [COVID] emergency. Pandemic 
welfare shouldn't become endemic.

          Appeared in the April 16, 2022, print edition.
                                 ______
                                 
Supplementary Material Submitted by Stacy Dean, Deputy Under Secretary 
    for Food, Nutrition, and Consumer Services, U.S. Department of 
                              Agriculture
Insert 1
          Mr. McGovern. . . .
           . . . the USDA's Economic Research Service put out a report 
        in March predicting an up to five percent increase in food 
        prices this year. And that is astounding. It is simply not 
        affordable for many American families. And while I was pleased 
        to see that SNAP spending rose in 2020 in response to the sharp 
        economic downturn, it has been relatively flat since the summer 
        of 2021 and has started falling as temporary benefit increases 
        that took place during the pandemic are phasing out. So, can 
        you help us understand the important role that SNAP played 
        during the pandemic, and, more importantly, can you give us a 
        reality check about what it will mean for families' food costs 
        if the benefit decreases again at the end of the public health 
        emergency?
          The Chairman. Would you answer that very quickly?
          Ms. Dean. I will do my best. Thank you, Mr. Chairman. Okay. 
        So, SNAP--during the pandemic--did, first of all, increase when 
        we saw a significant increase in need and newly unemployed 
        folks qualifying for the program, so it was able to flex. 
        Congress increased benefits by providing emergency allotments, 
        which actually allowed benefits to go up by about, monthly, 
        aggregate across the country about 40 percent, so it really 
        helped to cushion folks through the dramatic difficulty in 
        securing food during a difficult time. And that increase has 
        also helped to cushion relative to the rising food inflation. 
        And I think the President's request of USDA to ensure that we 
        had a minimum emergency allotment, a $95 per month per 
        household amount helps to deflect the impact of rising food 
        costs on SNAP participants. And of course, food hardship would 
        be much, much higher had the program not been able to grow and 
        expand with Congress' support. And I will stop there, sir.
          The Chairman. Very fine. And you can also provide additional 
        information to Jim in writing. Thank you.

    USDA remains committed to ensuring SNAP households' access to a 
healthful, nutritious diet. Some states have already begun to 
transition away from issuance of Emergency Allotments (EA) as their 
state emergency declarations end. As of August 2022, 17 states have 
ended EA issuance. When the COVID-19 public health emergency ends, SNAP 
participants will see decreases in their benefits as a result of losing 
EA.
    To mitigate any potential negative impacts from losing EA, USDA is 
providing enhanced technical support to state agencies to ensure that 
SNAP households receive all the benefits to which they are entitled. 
USDA is providing this support through a variety of means, including 
training webinars, policy clarifications and additional waiver 
opportunities. USDA welcomes any opportunity to work with Congress to 
support SNAP households during this transition.
Insert 2
          Mr. Sablan. . . .
           . . . Can you tell me why we still don't have EBT card in 
        place in the Northern Mariana Islands? Including, one of my 
        colleagues earlier said there was fraud, waste that people can 
        fraud the system. I just can't imagine how you can fraud a 
        system with paper coupons. So, any plans on getting EBT 
        implemented in the Northern Mariana Islands, especially since 
        it has been authorized and especially since funds have been 
        available all these years?
          Ms. Dean. Well, Congressman, if I may, I will take the 
        question.
          Mr. Sablan. Okay, all right, thank you. Thank you.
          Ms. Dean. We understand that this is something that the 
        Northern Mariana Islands want to pursue. My understanding is 
        that there has been difficulty in securing a vendor to provide 
        a system, but we are happy to dig more into that and follow up 
        with that.

    USDA recognizes the importance of implementing an Electronic 
Benefit Transfer (EBT) system for the Commonwealth of the Northern 
Mariana Islands' (CNMI) Nutrition Assistance Program (NAP). 
Implementing EBT in the CNMI only became more critical as participation 
increased, which required issuing coupon benefits in significant 
volumes. The implementation has presented some challenges, but the CNMI 
and USDA are committed to ensuring its completion.
    Starting in March 2021 the CNMI worked to secure a project 
management contract to assist in developing a scope of work and 
procuring an EBT Processor to implement the EBT system. At present, the 
CNMI is close to concluding the contract for the EBT system. The total 
cost of the 7 year contract amounts to $3,088,225, which has been 
approved to be covered by American Rescue Plan Act and block grant 
funds. The CNMI's EBT system is tentatively scheduled to roll out in 
June 2023.
Insert 3
          Mr. Thompson. . . .
          A follow-up, or another question, not a follow-up--but what 
        role does the Department's Office of Chief Economist play in 
        helping FNS make decisions related to policy and spending? I 
        was made privy to a USDA Office of Information Affairs response 
        to a FOIA request that states, quote, ``The OCE relayed they 
        were not asked to review any information related to the 2021 
        Thrifty Food Plan,'' end quote. And I think we can all agree 
        that this update has a major economic impact obviously, and if 
        this response is indeed true, can you tell me why the Office of 
        Chief Economist would not be consulted? I can only wonder if 
        there was concern OCE would disagree with your approach from an 
        unbiased economic standpoint, especially when I perceive OCE as 
        falling victim to calculated attempts at blocking economic 
        analysis across a variety of policy issues. And if this 
        response is not true, can you walk me through those 
        consultations with the Office of Chief Economist?
          * * * * *
          Mr. Thompson. And that is fine, but, I mean, this decision 
        tipped the Nutrition Title over $1 trillion over 10 years. I 
        would think that would warrant being elevated to consulting 
        with the Office of Chief Economist for USDA. And if so, I mean, 
        why within these internal communications that were discovered 
        under FOIA, I mean, I just question why they were excluded. It 
        seemed that something was missed in the process. I appreciate 
        all the things that were done, but my question is what was not 
        done given the significant impact of the changes to the Thrifty 
        Food Plan.
          Ms. Long. Certainly. And, Congressman, we would be happy to 
        get back to you on a more detailed description of the clearance 
        process, because at this point we would need to double-check to 
        see whether OCE did have the opportunity--

    The clearance process undertaken for the Thrifty Food Plan, 
2021,\1\ * published by USDA in August 2021 (FNS-916) followed the 
standard process set forth in the USDA Departmental Regulation on 
``Publication Review and Clearance Policy'' (DR1410-001).\2\ 
Specifically, in accordance with Section 5a(4)(e) of that Departmental 
Regulation, the FNS consultation process included economists from the 
Economic Research Service (ERS) and nutrition scientists from the 
Agricultural Research Service (ARS). The publication itself lays out 
the approach and methodology that was used to fulfill this 
Congressional mandate, mentions numerous internal and external 
stakeholders were consulted by FNS throughout the process, and 
describes ways in which FNS--specifically the Center for Nutrition 
Policy and Promotion (CNPP)--leveraged expertise and equities of other 
USDA agencies like ERS and ARS for this effort. The Office of the Chief 
Economist (OCE) did not provide specific input for this publication, in 
part because the support FNS received from economists at ERS was 
sufficient to fulfill the mandate from Congress. The partnership 
between FNS and ERS for this effort began several years ago, resulted 
in a new method to determine food prices for updating the Thrifty Food 
Plan, and is documented in an ERS Technical Bulletin published in 
September 2020 and titled, Estimating Prices for Foods in the National 
Health and Nutrition Examination Survey: The Purchase to Plate Price 
Tool \3\ (TB-1955). Historically, OCE has not played a role in 
calculating or reviewing the Thrifty Food Plan during its development; 
however OCE was briefed on the 1999, 2006, and 2021 reports prior to 
their respective releases. As such, their engagement did not change 
relative to past updates. FNS is confident in the soundness of the 
approach and methodology--informed by USDA economists--that was used 
for this most recent reevaluation. The reevaluation was strengthened by 
interagency input and external partnership and followed all applicable 
Departmental regulations and guidelines.
---------------------------------------------------------------------------
    \1\ https://doi.org/10.52570/TFP2021.
    Editor's note: footnotes annotated with  are retained in Committee 
file.
    \2\ https://www.usda.gov/directives/dr-1410-001.
    \3\ https://www.ers.usda.gov/publications/pub-details/
?pubid=99294.
---------------------------------------------------------------------------
Insert 4
          Mr. Crawford. . . .
          Congress attempted to address the bottlenecks and slow 
        onboarding processes by allocating $25 million in the American 
        Rescue Plan (Pub. L. 117-2) in part for retail technical 
        assistance. My understanding is that none of this money has 
        been distributed yet. What steps are being taken by FNS to help 
        ensure that all retailers and consumers have access to this 
        program?
          Ms. Long. Well, thank you for that question, Congressman, and 
        we really appreciate the support for online purchasing. We are 
        at a place where over 97 percent of SNAP households currently 
        do have access to online purchasing options. But, as you know, 
        there is certainly more to do, particularly with respect to 
        smaller and specialty retailers, and we are very grateful for 
        the support that came through the American Rescue Plan Act. And 
        I am happy to report that next month, in May, we are going to 
        be putting out our request for a contract to develop a 
        technical assistance center which will be specifically designed 
        to assist particularly, again, those smaller retailers and 
        coming on board to the online platforms. And their goal will be 
        really to provide the support that those retailers need to 
        assess their technology needs and the business case to be able 
        to successfully integrate into online purchasing in SNAP.
          Mr. Crawford. And so that money, you are saying, will start 
        to flow next month?
          Ms. Long. We will be soliciting for the support for that 
        technical assistance center, and we would be happy to get you 
        more information on the anticipated schedule for the actual 
        award and flowing of support.

    On July 7, 2022, USDA issued a Request for Applications to solicit 
a nonprofit grantee to provide technical assistance to retailers 
interested in pursuing online SNAP. Award is expected in the early 
fall.
    This grant will use $5 million of the $25 million from the American 
Rescue Plan Act and the period of performance will be four years.
    The grantee will assist retailers in understanding the various 
paths to online SNAP, including determining costs and return-on-
investment. The grantee will simplify, streamline, and translate 
existing guidance, and guide interested retailers through online 
implementation.
    Eventually, the grantee will provide the same services to retailers 
operating in States selected to pilot mobile payments.
Insert 5
          Mr. DesJarlais. Right. And I would argue right now that most 
        people crossing the southern border have learned that. They 
        don't come here and say--they don't cross into the United 
        States and say, ``We are just coming here because we felt like 
        it.'' They are saying we are seeking asylum. They are taught 
        what to say. They are charged up to $4,000 per person to be 
        brought by drug smugglers and cartels and people to get into 
        the United States, and so they know what to say.
          So, I guess what I would like to get from you is an actual 
        number. We know what it costs for SNAP per year. We know how 
        many Americans--well, I think we know how many Americans--you 
        said 41 million, but we don't know how many of those are actual 
        Americans. Does that number include the asylum-seekers and 
        children of non-citizens?
          Ms. Dean. It would include eligible non-citizens, yes.
          Mr. DesJarlais. Okay. So, I guess what we need to know is 
        that, first of all, we are taking care of Americans first. We 
        have programs to assist people whether they are in other 
        countries in terms of hunger, and I think that is important. 
        The U.S. should lead on that, and I am really proud of the SNAP 
        program that we have in order to take care of the people who 
        are hungry in the U.S. I just want to prepare--this line of 
        questioning is to prepare the farm bill so we know what to 
        expect and how to best take care of those in need. So, I thank 
        you for your testimony, and any information you can get to me 
        in writing on those numbers would be greatly appreciated, and I 
        yield back.
          Ms. Dean. Happy to do that, sir.

    The latest data available are from FY 2019. A total of 37.2 million 
individuals received SNAP on average each month in FY19.
    The citizenship breakdown of these individuals is as follows:

   33.9 million (91.1%) are U.S.-born citizens;

   1.9 million (5.0%) are naturalized citizens;

   295,000 (0.8%) are refugees, asylees, or individuals given a 
        stay of deportation; and

   1.1 million (3.1%) are other noncitizens--e.g., a legal 
        permanent resident with 40 quarters of work (which is typically 
        10 years of work history), military service, 5 years legal U.S. 
        residency, disability, or under age 18.

    Included in the above groups are 2.5 million citizen children that 
are living with noncitizen adults (adults may or may not be SNAP 
participants).
Insert 6
          Mr. Austin Scott of Georgia. Has the Biden Administration 
        prosecuted a single case of that fraud? Have they prosecuted a 
        single case of SNAP fraud?
          Ms. Dean. You mean in terms of the judiciary or through 
        administrative--we can absolutely follow up with you but, yes, 
        we have a rigorous approach to addressing fraud.
          Mr. Austin Scott of Georgia. I would appreciate information 
        on how many cases have been brought for fraud.
          Ms. Dean. Okay.
          Mr. Austin Scott of Georgia. Thank you, ma'am.
          The Chairman. And, Deputy Secretary, please follow up with 
        Congressman Scott's inquiry in writing.
          Ms. Dean. Absolutely.

    In Fiscal Year (FY) 2021, USDA identified 27,862 firms as potential 
compliance violators and conducted 11,273 investigations of authorized 
retail firms to determine compliance with program regulations. USDA may 
sanction or warn retailers found violating Program rules. Sanctions 
include permanent or time-limited term disqualifications and civil 
money penalties. Retailers who commit minor violations are issued 
official warning letters. Retailers who are disqualified permanently 
and later sell their stores are also subject to a transfer of ownership 
civil money penalty.

 
 
                      Sanctions                              Total
 
Time-Limited Term Disqualification...................              1,155
Permanent Disqualifications..........................              1,595
Hardship Civil Money Penalty (CMP)...................                345
Trafficking CMP......................................                  4
                                                      ------------------
  Total Sanction Actions.............................              3,099
 
               Other Compliance Actions                      Total
 
Transfer of Ownership CMP............................                102
Official Warning.....................................                784
Involuntary Withdrawal (for other than non-                          299
 redemption).........................................
Permanent Involuntary Withdrawal.....................                 12
Fiscal Claim.........................................                162
Unauthorized Acceptance Fine.........................                 15
                                                      ------------------
  Total Compliance Actions...........................              1,374
                                                      ==================
    Total Sanctions + Compliance Actions.............              4,473
 

    In the first half of FY 2022, more than 1,000 stores were 
sanctioned and over 700 were subject to compliance actions.
Insert 7
          Mr. Allen. Okay. Well, our Democratic colleagues are saying 
        that this program is untouchable, but at any rate, I am just 
        about out of time. One other thing that we need to get to the 
        root of the problem on, and I don't understand this, but, we 
        hear time and time again that one out of five children go to 
        bed hungry in this country every night, and I don't know about 
        the rest of the country, but in the 12th District of Georgia, 
        during the pandemic, our children got breakfast, lunch, and a 
        snack each day through our school nutrition programs. We made 
        that happen. How is it possible that one in five children go to 
        bed hungry at night, and why? Have you all investigated this 
        problem?
          Ms. Dean. I don't have enough time to get back to given the 
        time, but I am happy to follow up with you, sir.

    Although, most households in the US are food secure (89.8 percent 
in 2021), some households experience food insecurity in that their 
access to adequate food is limited due to lack of money and other 
resources. USDA's nutrition assistance programs improve household food 
security by providing low-income households access to food for a 
healthful diet. USDA also monitors food insecurity among U.S households 
annually through a nationally representative survey and publishes 
annual statistics on prevalence of food insecurity. The annual report 
presents prevalence and trends but does not examine causation.
    Food security statistics for 2021 were published by USDA's Economic 
Research Service on September 7, 2022 (USDA ERS--Household Food 
Security in the United States in 2021 \4\) and key findings for 
households with children are as follows:
---------------------------------------------------------------------------
    \4\ https://www.ers.usda.gov/publications/pub-details/
?pubid=104655.

   In 2021 the prevalence of food insecurity among all 
        households with children decreased from 14.8 percent in 2020 to 
---------------------------------------------------------------------------
        12.5 percent.

   Children were food-insecure at times in 6.2 percent of 
        households with children (2.3 million households). These 
        households were unable at times to provide, adequate, 
        nutritious food for their children. The prevalence decreased 
        from 7.6 percent in 2020.

   Children and adults experienced very-low food security 
        (severe form of food insecurity) in 0.7 percent of household 
        with children (274,000 households). The rate in 2020 was 0.8 
        percent (322,000 households).

    In 2020, the onset of the COVID-19 pandemic resulted in school and 
business closures and job losses which could have increased food 
insecurity considerably among resource constrained households. However, 
in response, USDA implemented additional nutrition assistance programs 
such as the Pandemic EBT program (P-EBT) as well as flexibilities 
within existing programs, some of these continued in 2021 FNS Responds 
to COVID-19 D Food and Nutrition Service (usda.gov).\5\ Previous 
research has shown that participation in nutrition assistance programs 
can improve food security among children living in food insecure 
households. Summer Electronic Benefit Transfer for Children (Summer 
EBT) was found to reduce the prevalence of food insecurity among 
children by nearly \1/5\. Participation in SNAP for around six months 
was associated with a 9 to 10 percentage point decrease in the 
prevalence of households with food insecure children.
---------------------------------------------------------------------------
    \5\ https://www.fns.usda.gov/coronavirus.
---------------------------------------------------------------------------
Insert 8
          Mrs. Letlow. . . .
          Deputy Under Secretary Dean, the 2018 Farm Bill prioritized 
        allocating GusNIP funding to retail locations. How has the USDA 
        adequately provided retailers an opportunity to participate in 
        this program?
          Ms. Dean. Congresswoman, I guess I will need to get back to 
        you on that. GusNIP is operated through another arm of USDA, 
        but I take your--I am concerned about your concerns, and so I 
        want to make sure that we are responsive to--I would flag that 
        the farm bill also included another provision which allows 
        retailers themselves to offer incentives to SNAP participants, 
        and that, too, we haven't seen a robust take-up of. And it is 
        an area that I want to explore with my team. I feel that 
        retailers across the country are participating with the 
        program, they are supporting participants through their grocery 
        stores, and we would love to see them be offering more 
        incentives at their own direction.
          * * * * *
          Ms. Letlow. Thank you. I would appreciate that information. 
        And it is also my understanding that these incentives are only 
        available at farmers' markets in Louisiana, yet farmers' 
        markets represent less than one percent of all SNAP 
        redemptions. My grocery retailers who serve SNAP populations 
        are very eager to participate, but they don't even have that 
        opportunity. Why is this, and what can we do to change it?
          Ms. Dean. Well, I can't speak to that particular issue, but 
        funding for GusNIP is limited, so wherever it operates, it is 
        smaller than we would like it to be, so that is of course 
        something we are happy to talk with you further about.

    USDA has diligently worked to provide retailers an opportunity to 
participate in the program. The GusNIP Request for Applications (RFA) 
\6\ is available through the USDA-NIFA Grants Funding Opportunity Page 
and through Grants.gov. Other outreach components for this grant 
include but are not limited to: GusNIP Webinars and GusNIP Listening 
Sessions.
---------------------------------------------------------------------------
    \6\ https://www.nifa.usda.gov/sites/default/files/2022-04/FY22-
GusNIP-NIP-RFA-508_0.pdf.
---------------------------------------------------------------------------
    All GusNIP Nutrition Incentive Program priorities are given equal 
consideration and include:

  1.  Maximize the share of funds used for direct incentives to 
            participants;

  2.  Use direct-to-consumer sales marketing;

  3.  Demonstrate a track record of designing and implementing 
            successful nutrition incentive programs that connect SNAP/
            NAP participants and agricultural producers;

  4.  Provide locally or regionally produced and fresh fruits and 
            vegetables, especially those culturally appropriate for the 
            target audience;

  5.  Include a project design that provides incentives when fruits or 
            vegetables are purchased using SNAP/NAP benefits and in 
            which the incentives earned may be used only to purchase 
            fruits or vegetables;

  6.  Have demonstrated the ability to provide services to underserved 
            communities; and/or communities where the majority of 
            residents are racial/ethnic minorities, living below the 
            Federal poverty line, and/or rural or remote communities;

  7.  Include coordination with multiple stakeholders, such as general 
            farm organizations, nutrition education programs, 
            cooperative extension services, public health departments, 
            health providers, private and public health insurance 
            agencies, cooperative grocers, grocery associations, and 
            community-based and non-governmental organizations;

  8.  Offer supplemental services in high-need communities, including 
            online ordering, transportation between home and store, and 
            delivery services;

  9.  Include food retailers (firms) that are open (1) for extended 
            hours and (2) most or all days of the year;

  10. Test innovative or promising strategies within the limits of 
            SNAP/NAP policy that would contribute to our understanding 
            of how best to increase the purchase of fruits and 
            vegetables by SNAP/NAP participants, to inform future 
            efforts; and

  11. Involve a diversity of types of firms (e.g., convenience stores, 
            supermarkets, farmers' markets).

    As part of our nutrition security work, the Department is making a 
concerted effort to inform retailers of the opportunity and process for 
providing incentives to SNAP participants. Such efforts go a long way 
to assist in making healthy foods, those that are aligned with the 
dietary guidelines for all Americans, more readily available and 
affordable for SNAP participants.
                                 ______
                                 
                          Submitted Questions
Response from Stacy Dean, Deputy Under Secretary for Food, Nutrition, 
        and Consumer Services, U.S. Department of Agriculture
Questions Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question 1. Under Secretary Dean: Can you please provide an update 
on the status of the implementation of the mobile technology 
demonstration project, including what USDA is doing to ensure that any 
approved demonstration projects are technologically secure and protect 
the privacy of SNAP recipients?
    Answer. The Agricultural Improvement Act of 2018 authorizes the use 
of mobile technologies for the purpose of accessing SNAP benefits for 
payment at the point-of-sale. This will allow SNAP participants to 
input their Electronic Benefit Transfer (EBT) card into a mobile device 
and make SNAP purchases at the point-of-sale without the presence of 
the physical EBT card. The Act requires that USDA approve not more than 
five projects to pilot the use of this technology and then determine if 
mobile technology should be authorized nationwide.
    The Mobile Payment Pilot Request for Volunteers (RFV) was released 
on July 12, 2022. The deadline for submission of proposals to the RFV 
is October 4, 2022. State SNAP agencies are eligible entities.
    The RFV requires respondents to address fraud concerns specific to 
mobile payment methods, and clearly explain how the pilot project plans 
to deter potentially fraudulent activity. Respondents must ensure that 
state participants have adequate methods in place to ensure system and 
data security, as well as customer privacy, to prevent compromise of 
SNAP household information, identity theft, and other fraud. Proposals 
will be carefully evaluated for strong data security systems and 
policies, and the use of industry-recommended practices.

    Question 2. Under Secretary Dean: I have heard concerns from 
grocers in my district that releasing SNAP benefits on the first of the 
month, every month, not only causes problems for stocking common items 
but also contributes to stigma of SNAP participants who are often 
working, caring for family, and generally living lives wholly 
inconsistent with stereotypes associated with their benefit. Do you 
believe it would be feasible to distribute benefits in a different 
way--throughout the month, or on a rolling basis in some other sense? 
Has the Department deliberated this possibility at any time?
    Answer. SNAP state agencies are responsible for general SNAP 
program administration at the local level, including the issuance of 
SNAP benefits to eligible households. USDA encourages SNAP state 
agencies to stagger their benefit issuance over multiple days 
throughout the month, as a staggered issuance schedule more evenly 
distributes demand on SNAP authorized retailers and may reduce stigma 
clients face. Most states issue benefits on a staggered schedule that 
can, for example, range from 10 business days to as many as 28 calendar 
days over the issuance month.
    Six states and one U.S. Territory issue all benefits on one day of 
the month. Within that subset, only four states and one U.S. Territory 
issue benefits on the first day of the month.
Question Submitted by Hon. Al Lawson, Jr., a Representative in Congress 
        from Florida
    Question. The recent SNAP increase drastically helped to close the 
gap between SNAP benefits and meal costs, however, for four of my eight 
counties these benefits are still below the average cost of a meal in 
that county.
    Since a review of the Thrifty Food Plan is not expected for another 
5 years, what else could be done by Congress to address this gap and 
ensure that all Americans have access to healthy and delicious food?
    Answer. The most recent reevaluation of the Thrifty Food Plan (TFP) 
increased the purchasing power of SNAP households by utilizing a 
modernized, data driven approach, reflecting notable shifts in the food 
marketplace and consumers' circumstances. This reevaluation included 
current food prices, foods Americans typically eat, nutritional values 
and the latest dietary guidance.
    In addition to revaluating the TFP every five years, USDA issues 
annual SNAP Cost-of-Living-Adjustments (COLA) to address increased 
consumer costs. COLA adjusts the SNAP maximum allotments, minimum 
allotment, income eligibility standards, and deductions. Beginning 
October 1, 2022, maximum allotments will increase for the 48 states and 
the District of Columbia, Hawaii, Guam, the U.S. Virgin Islands, and 
Alaska. For a family of four receiving a maximum allotment in the 48 
states and the District of Columbia, benefits will be $939. Maximum 
allotments for a family of four will increase to $1,794 in Hawaii, 
$1,385 in Guam, $1,208 in the U.S. Virgin Islands, and to a range of 
$1,172 to $1,819 in Alaska. The minimum benefit for the 48 states and 
the District of Columbia will increase to $23 and will also increase in 
Alaska, Guam, Hawaii, and the U.S. Virgin Islands.
    In addition to the annual COLA adjustment, during the pandemic 
Congress passed legislation which temporarily increased SNAP benefits 
for households. Many of the flexibilities, such as emergency allotments 
which provided SNAP households with the maximum allotment, were 
instrumental in ensuring SNAP households had access to healthy and 
delicious food. USDA stands ready to work with our partners in Congress 
to help all Americans have access to healthy and affordable food.
Question Submitted by Hon. Jimmy Panetta, a Representative in Congress 
        from California
    Question. Deputy Undersecretary Dean and Administrator Long, thank 
you so much for your recent testimony to the House Agriculture 
Committee about the importance of the Supplemental Nutrition Assistance 
Program (SNAP) in the 2023 Farm Bill.
    I appreciate your comments regarding building on the proven success 
of flexibilities during COVID-19, including to streamline methods for 
accommodating telephonic signatures--this has provided critical program 
access here in California. I look forward to seeing the guidance and 
other assistance you provide states on the overall approach to continue 
proven practices to improve operations and streamline access for 
families in need as permanent solutions to strengthen SNAP.
    I would like to expand that topic to the importance of telephonic 
and online remote options to for applications and interviews during 
Disaster SNAP operations.
    I appreciate that FNS has temporarily allowed remote interview 
options during pandemic given the larger flexibility, providing crucial 
program access in Santa Cruz County \1\ in the summer of 2020 during 
the height of COVID & following the CZU Complex Fires.\2\
---------------------------------------------------------------------------
    \1\ https://www.fns.usda.gov/disaster/california-disaster-
nutrition-assistance. [Attachment 1].
    \2\ https://www.fema.gov/disaster/5336. [Attachment 2].
---------------------------------------------------------------------------
    Prior to the pandemic, however, FNS has required the interview to 
be in person. This has been problematic for several reasons, including: 
retraumatizing applicants who have been through a major crisis to have 
to present in person while they are managing multiple other disaster 
benefits during the limited D-SNAP application window; the significant 
transportation, distance, fuel expenses, and other barriers applicants 
who have had to relocate but are eligible for aid; the inequitable 
impact all of this has for the civil rights of people with disabilities 
and other outstanding barriers to accessing D-SNAP.
    The California Association of Food Banks that represents the three 
food banks serving my District, along with the Western Center on Law & 
Poverty, have documented the impact that the lack of remote interview 
options has had, and called for permanent remote access to D-SNAP,\3\ 
since 2015.
---------------------------------------------------------------------------
    \3\ https://wclp.org/wp-content/uploads/2016/07/
071116_WCLP_CAFB_DisasterSNAPCom
ments_Final.pdf, https://wclp.org/wp-content/uploads/2020/09/
WCLP_DSNAP_Comments_
Sept14_2020.pdf. [Attachments 3a & 3b].
---------------------------------------------------------------------------
    How can FNS support states to permanently provide remote (telephone 
and online) options for the application and interview during Disaster 
SNAP to ensure equitable access to food assistance when communities 
need it most?
    Answer. Traditionally, state agencies operate Disaster Supplemental 
Nutrition Assistance Programs (D-SNAPs) via an in-person application 
and interview process. Since the onset of the COVID-19 pandemic, USDA 
has approved D-SNAPs with virtual components to support states in 
protecting the health and safety of households and staff while 
responding to disasters.
    Since March 2020, USDA has approved 23 D-SNAP operations with novel 
virtual components. Virtual operations were critical to states as they 
dealt with challenges due to the COVID-19 pandemic and USDA is 
committed to continuing to approve virtual D-SNAPs through the end of 
COVID-19 Public Health Emergency.
    In many states, the use of virtual components in D-SNAP has 
improved efficiency and program access but has not been without its 
challenges. USDA believes that states may mitigate these access 
challenges by utilizing technology for pre-registration systems, call 
centers, and ensuring they have the capacity to mail the electronic 
benefit transfer (EBT) cards overnight.
Questions Submitted by Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. Based on recent Department data, it appears some states 
are seeing declines in program enrollment while others see growth. 
Deputy Under Secretary Dean, what do you attribute these variations in 
enrollment trends to? Do you think it's a matter of policy choices? 
Operations? Something else?
    Answer. As a result of the COVID-19 Public Health Emergency, SNAP 
saw a rapid growth in participation across the country. As the nation 
continues to recover from the pandemic, shifts in participation trends 
are expected as state economic conditions vary.
    A growing number of states have begun to end state emergency 
declarations and transition off program flexibilities available under 
such declarations.
    USDA remains committed to assisting states with administering SNAP 
and ensuring program integrity throughout the pandemic and as we 
continue to transition through recovery to ensure access among eligible 
populations.

    Question 2. Deputy Under Secretary Dean, I am increasingly 
concerned SNAP promotes a perverse business of poverty. Organizations 
across the country have come to expect ongoing, or even increased 
reliance on safety net programs to remain solvent, particularly through 
the receipt of Federal dollars. How do we engage non-traditional 
partners in the delivery of services? How can we weed out those who are 
not conducting the work in the vein of what the American taxpayer 
expects?
    Answer. SNAP is the most far-reaching, powerful tool available to 
ensure that all Americans can afford healthy food--it is a lifeline for 
tens of millions of Americans in every part of the country. It reduces 
poverty and food hardship, and participation by young children has been 
linked to better long-term health, education, and employment outcomes. 
SNAP also helps to stabilize the economy and respond to increased need 
during downturns. Every additional $1 in SNAP benefits can create at 
least $1.50 in economic activity. USDA is continuously working to 
improve the effectiveness and efficiency of nutrition assistance 
programs.
    As part of this ongoing work, the Administration is strengthening 
communication with longstanding partners and engaging new partners, 
including non-traditional partners, for ideas on how to better 
implement the Federal nutrition programs and deliver services. In this 
regard, we continue formal consultations with Tribes and our regular 
dialogue with state agencies that administer our programs.
    The Secretary has also engaged directly with local school 
officials, including school food service personnel, to ensure we have 
robust dialogue and direct stakeholder input as we work together to 
enhance policy around and support for school meals.
    We are expanding our lines of communication with non-profits, 
academic leaders, faith-based organizations, and industry and private-
sector partners across multiple fronts. As an example, we are launching 
a series of summits on nutrition security and the connection to both 
individual and public health with stakeholders in the healthcare 
sector. After a recent national kickoff summit, FNS is partnering with 
the private-sector for a series of regional summits across the nation 
on this important topic in 2023. We have also engaged partners in the 
efforts to innovate and modernize the Special Supplemental Nutrition 
Program for Women, Infants, and Children (WIC).
    WIC is one of the nation's most successful and cost-effective 
nutrition intervention programs, as proven by the results of studies 
conducted by USDA and other non-government entities. Since its 
beginning in 1974, the WIC Program has earned the reputation of being 
one of the most successful federally funded nutrition programs in the 
United States. Collective findings of studies, reviews, and reports 
demonstrate that the WIC Program is cost effective in protecting or 
improving the health and nutritional status of low-income women, 
infants, and children.
    Additionally, USDA's school meals programs provide critical 
nutrition to tens of millions of children every school day. For many 
children, the food they receive from school breakfast and lunch makes 
up about half their dietary intake each school day. Students' success 
in the classroom is connected to their ability to access healthy and 
nutritious meals, and a 2021 study published in the Journal of the 
American Medical Association found that school meals are the healthiest 
meal kids receive each day. Research also shows children who ate 
lunches from school were more likely to consume milk, fruits, and 
vegetables and less likely to consume desserts, snack items, and non-
milk beverages than children who brought food from home. Strong school 
nutrition programs are proven to work for schools and families.
    We strive to seek out and leverage opportunities to enhance input 
and dialog, especially with non-traditional partners. We welcome input 
from you, Ranking Member Thompson, and other members of the Committee 
as we strive to make connections with stakeholders, engage those with 
``lived experiences'' for their rich perspectives, and advance USDA's 
diversity, equity, inclusion, and accessibility goals with respect to 
the Federal nutrition programs.

    Question 3. On April 21, the Supreme Court turned down a bid to 
allow Puerto Rico residents to claim benefits under the Federal 
Government's main disability insurance program, ruling the Constitution 
does not require Congress to offer such payments to residents of the 
island, largely because residents are exempt from most U.S. taxes. The 
Biden Administration defended the law excluding Puerto Rico, but 
acknowledged it favors legislation to address the issue. Deputy Under 
Secretary Dean, your testimony stated the agency is exploring parity 
for residents of Puerto Rico; is this something the agency thinks you 
have authority to do? Or will legislation be required? Are their 
proposals out there that FNS supports?
    Answer. Legislation is required to move from the Puerto Rico 
Nutrition Assistance Program (NAP) block grant to the Supplemental 
Nutrition Assistance Program (SNAP). USDA supports giving the 
Government of Puerto Rico the choice to pursue transitioning from NAP 
to SNAP.
    USDA is providing ongoing, robust technical assistance to the 
Government of Puerto Rico as they consider this possibility and what it 
means for their current program and residents. This assistance includes 
facilitating visits to SNAP state agencies, creating working groups, 
and providing technical assistance on their annual plan of operation to 
better align the program with SNAP within the authority of the block 
grant.
    USDA is committed to continuing to work with our partners in Puerto 
Rico and in Congress on a path forward that best meets the nutrition 
needs of the residents of Puerto Rico. Specifically, our ongoing work 
with the Government of Puerto Rico is helping ensure they have a robust 
and accurate understanding of SNAP, including all program requirements. 
This partnership is also equipping them with information they need to 
engage with the Committee in discussions about legislation related to 
the future of nutrition assistance in Puerto Rico.

    Question 4. In March 2022, FNS rescinded charge letters and Final 
Agency Decisions related to indirect trafficking. Deputy Under 
Secretary Dean, can you walk the Committee through the following: What 
led to FNS charging these (potentially hundreds) of retailers with 
indirect trafficking?
    Answer. Starting in 2018, the Department expanded its efforts to 
investigate SNAP trafficking to provide stronger monitoring and 
enforcement against those seeking to undermine the program. This 
included pursuing more cases of indirect trafficking, or the illegal 
act of a retailer intentionally purchasing products that were 
originally bought with SNAP benefits.

    Question 4a. If the investigators were contractors, what is the 
process by which these contractors are retained?
    Answer. The investigators are on contract with the Department. The 
contract is solicited using standard contracting practices.

    Question 4b. How many total retailers had their permanent 
disqualification reversed by the March 2022 decision?
    Answer. Out of an abundance of caution, USDA rescinded all actions 
taken against retailers whose indirect trafficking investigations may 
have been adversely impacted by process weaknesses, including 
reinstating those that were disqualified. USDA did this because of a 
deep commitment to maintaining fairness and program integrity in SNAP 
and will continue to pursue ways to leverage the best tools available 
to safeguard all our programs. There are nearly 250,000 SNAP-authorized 
retailers. In total, less than 1,000 retailers had permanent 
disqualification actions rescinded.

    Question 4c. Is the notification process complete? If not, how many 
notifications remain and when do you expect the process to be 
finalized?
    Answer. Yes, the notification process was completed in April 2022.

    Question 4d. Has the agency found wrongdoing by the investigators? 
If so, has disciplinary action occurred? If so, in what form and how 
many investigators have been impacted by such?
    Answer. When concerns were brought to the Department's attention 
about specific aspects of how those indirect trafficking investigations 
were executed, a sample of the administrative (not criminal) indirect 
trafficking cases conducted between 2018 and 2021 were reviewed. Some 
weaknesses in the process were identified.
    While we cannot discuss investigative techniques in detail, we take 
very seriously the enforcement power that we wield. USDA has taken 
immediate actions to address those weaknesses, including providing 
extensive training to investigative and compliance staff.

    Question 4e. I have heard many of these retailers have lost 
thousands of dollars in revenues as a result of these original agency 
decisions, and some have had to close their doors entirely. What, if 
anything, is the agency doing to rectify that? Will the agency commence 
some type of claims process?
    Answer. Impacted retailers that were still under investigation or 
awaiting appeal had the administrative cases against them rescinded. 
Those who were disqualified while awaiting administrative appeal were 
automatically reinstated. Retailers who were already disqualified for 
indirect trafficking had their Final Agency Decisions (FADs) rescinded 
and were reinstated. The administrative decision that was rescinded for 
these retailers will not be held against them for purposes of future 
authorization decisions. Monetary penalties paid by sanctioned 
retailers were refunded.
    Retailers who are no longer in business will be able to return to 
SNAP as authorized retailers should they so choose. Their application 
will be accepted without prejudice, meaning USDA will not hold the 
rescinded actions against them. They will be subject to the same 
monitoring and oversight as all SNAP authorized retailers.

    Question 4f. The Department makes equity in services a priority; 
how many of these retailers are minority-owned? Additionally, please 
provide the full demographic (i.e., race, age, gender) breakdown of 
these retailers.
    Answer. USDA does not collect the racial or ethnic makeup of 
retailers who participate in SNAP.

    Question 5. Deputy Under Secretary Dean, as you know, many 
businesses and schools were shuttered during 2020 and 2021. Please 
explain how Federal E&T disbursements were used by states during that 
time.
    Answer. USDA responded immediately to the COVID-19 public health 
emergency (PHE) by issuing an April 2020 memorandum clarifying that 
SNAP E&T service providers could offer virtual services to better meet 
SNAP E&T participant's needs during this unprecedented time.
    Although many of the organizations that normally offer E&T services 
were forced to close their doors to in-person activities, many states 
and E&T providers quickly shifted to offering virtual services.
    As a result, Federal E&T funds continued to be used during the 
pandemic for regular administrative costs of operating an E&T program, 
offering SNAP E&T components and case management, and providing 
participant reimbursements.
    As always, states were required to submit amendments to their state 
SNAP E&T plans if they anticipated any major changes to their SNAP E&T 
program or operating budget.

    Question 6. The 2018 Farm Bill asked FNS to implement the 
successful Obama-era National Accuracy Clearinghouse (NAC) 
demonstration pilot nationwide. Subsequent appropriations bills 
directed the agency to ensure the NAC provides for a robust appeals 
process for SNAP recipients identified as receiving SNAP benefits in 
more than one state before removing them from the program in either 
state. Deputy Under Secretary Dean, what has FNS done to ensure there 
are new minimum appeals processes in light of the Department's reports 
to Congress that nationwide implementation of the NAC is imminent? Can 
you point me to the regulation or guidance?
    Answer. The National Accuracy Clearinghouse (NAC) interim final 
rule--which was published in the Federal Register on October 3, 2022, 
with a corrected effective date of December 6, 2022 (87 FR 59633) \4\--
as well as the SNAP regulations, seek to improve the customer service 
experience for SNAP applicants and participants by ensuring that they 
receive the benefits they are entitled to, while maintaining program 
integrity through the prevention of duplicate participation.
---------------------------------------------------------------------------
    \4\ https://www.federalregister.gov/documents/2022/10/03/2022-
21011/supplemental-nutrition-assistance-program-requirement-for-
interstate-data-matching-to-prevent.
---------------------------------------------------------------------------
    USDA's development of the NAC interim final rule and the NAC system 
have been informed by recommendations from the independent evaluation 
of the NAC pilot. This evaluation found that more successful states 
integrated the NAC with their SNAP eligibility systems and into 
existing workflows. As a result, the NAC interim final rule inserts the 
NAC requirements into current regulations to prevent the disruption of 
existing workflows while still enhancing customer service and program 
integrity by preventing duplicate participation.
    State agencies that use match information from the NAC must comply 
with the requirements set forth in 5 U.S.C.  552a(p) and 7 CFR  
272.12(c). According to these requirements, state agencies may not take 
any adverse action to terminate, deny, suspend, or reduce benefits to 
an applicant or SNAP participant based on information produced by the 
NAC until the state agency has independently verified the information 
and informed the applicant or SNAP participant of agency findings, the 
opportunity to contest findings, and the allowable timeframe to do so. 
In addition, under requirements in 7 CFR  273.15, SNAP households or 
individuals may request a fair hearing to contest any action of the 
state agency which affects their participation in the program. If a 
household wishes to appeal a local fair hearing decision, they can 
request an appeal within 15 days of the mailing date of the hearing 
decision notice.
    If the state agency suspects that a household or individual is 
intentionally participating in SNAP in more than one state, based on 
data obtained through a NAC match or other means, the state agency 
investigates the alleged intentional program violation. The state 
agency is required to act on households or individuals with intentional 
program violations through administrative disqualification hearings or 
court referrals. However, while these actions are pending, affected 
households or individuals are allowed to participate in the program, 
per regulations at 7 CFR  273.16.

    Question 7. The Department had announced a suite of investments in 
program administration and integrity, which amounted to less than \1/
10\ of 1 percent of the annual SNAP appropriation. Upon adding roughly 
$20 billion more in payments per year by way of the Thrifty Food Plan 
update, this investment appears to have dropped to less than \1/20\ of 
1 percent. Deputy Under Secretary Dean, beyond the announcements, what 
is the agency doing to ensure those investments are worthwhile? Do you 
anticipate further investments in the integrity and administration 
space?
    Answer. Integrity and payment accuracy are ongoing priorities for 
the USDA. SNAP state agencies are responsible for identifying and 
holding SNAP recipients who break the rules accountable. USDA has 
numerous initiatives and resources focused on strengthening the 
integrity of SNAP and improving payment accuracy. To support states in 
these efforts, USDA provides policy guidance, regulations, and 
technical assistance to enhance states' ability to prevent, detect, and 
investigate recipient fraud. Accurate payments mean better customer 
service for SNAP clients, and USDA is committed to maintaining program 
integrity as stewards of taxpayer dollars. Following are a few specific 
examples of the projects USDA is working on in this area, and the 
standard statutory and regulatory tools that USDA regularly employs.
    Income Verification Pilot Program--In Fiscal Year 2022, USDA 
awarded grants to 16 states to evaluate their use of third-party 
databases to verify earned income. Preliminary results suggest this 
project may have a positive impact on payment accuracy. USDA is using 
the information from grantees to pursue a national-level contract for 
all states for earned income verification.
    Understanding Risk Assessment in SNAP Payment Accuracy and 
Employing Model Programs to States--USDA is studying how state SNAP 
agencies use analytic risk assessment tools and what makes these tools 
effective. At the same time, USDA is developing its own risk assessment 
model that can easily be deployed to any state and aims to identify 
characteristics of cases that are prone to payment errors so that state 
SNAP eligibility staff can provide extra layers of review during the 
certification process to ensure households receive only the benefits to 
which they are entitled. This model contains safeguards to ensure the 
protection of protected classes.
    SNAP Fraud Framework--The SNAP Fraud Framework (SFF) serves as a 
cornerstone of recipient integrity efforts, and USDA seeks to enhance 
the SFF as new technology and best practices emerge. USDA designed the 
SFF and its supporting documents to support states as they develop new 
efforts or improve existing ones to prevent, detect, and investigate 
fraud. In 2019, USDA established the SNAP Fraud Framework 
Implementation Grant program. These grants aim to improve state 
agencies' recipient fraud prevention, detection, and investigation 
efforts, using principles from the SFF. Since 2019, USDA has funded 29 
awards totaling over $15 million under this grant program.
    Proposed Rulemaking for Strengthening Integrity and Reducing 
Retailer Fraud in the Supplemental Nutrition Assistance Program--USDA 
is working to issue a proposed rulemaking to strengthen the integrity 
of SNAP's payment accuracy measurement system. These proposed changes 
address longstanding concerns by USDA, OIG, and state partners and is 
planned for publication in July 2024 for notice and comment.
    Investments in IT Resources to Improve Improper Payment Measurement 
and Analysis--USDA is developing a new information technology system 
that will provide a suite of tools and process efficiencies for state 
and Federal reviewers conducting improper payment reviews. This system 
will also provide better data analysis tools, allowing administrators 
at all levels of the Program to make more informed decisions about how 
to ensure the integrity of SNAP. Additionally, USDA is adding 
additional data analytic tools that will go beyond the improper payment 
data to integrate multiple data sources, allowing for a more nuanced 
examination of what is causing payment errors and how they may be 
fixed.
    Statutory and Regulatory Ongoing Compliance Activities--USDA 
continues to conduct management evaluations on state recipient 
integrity and payment accuracy activities to ensure states are 
following the law and regulations, and implementing the most effective 
strategies to administer and oversee integrity responsibilities. For 
states that are found to have deficiencies, USDA works to establish 
corrective actions with the state to improve program performance and 
payment accuracy.

    Question 8. States are exploring innovative ways to streamline 
eligibility determinations. Mobile sites and mobile applications offer 
the ability to upload verification documents, greatly reducing a common 
source of churn--where households apply but do not complete their 
applications, and subsequently reapply, creating administrative burden 
and higher costs--by capturing verification quickly and easily. These 
and other technology initiatives, combined with data-driven business 
process improvements, can enhance administrative efficiency, and reduce 
both state and Federal expenditures. There are companies currently 
providing asset verification to a host of other safety net programs, 
yet they have struggled to enter the SNAP space. Deputy Under Secretary 
Dean, I welcome your thoughts on exploring verification services that 
provide responses in minutes. Are state budgets and policies the burden 
here? Is it an agency decision? Or, can it be surmised there is just no 
interest in any asset tests?
    Answer. USDA supports states' efforts to modernize their 
applications, eligibility systems, usage of data matching and 
processes, and other program operations in various ways, for example by 
providing ongoing technical assistance and through annual Process and 
Technology Improvement Grants.
    USDA is also focused on the potential advantages to using third-
party, commercial payroll databases to meet the statutory requirement 
to verify applicants' earned income. This form of data matching has the 
potential to help states verify earned income amounts and/or confirm 
the lack of earned income faster and more effectively than traditional 
methods, which entail relying on households to provide documentation 
(e.g., paystubs) or in some cases require state eligibility workers to 
contact employers directly (e.g., by calling the employer).
    Approximately 75 percent of states have entered contracts with 
commercial vendors to obtain data matching services that allow them to 
verify a significant portion of SNAP applicants earned income upon a 
single query, in real-time. The cost of these contracts varies widely, 
and the majority of states are forced to ration usage due to cost 
concerns. Other states have discontinued their contracts due to cost 
concerns and negotiation challenges.
    In FY22, USDA awarded grants to 16 states to evaluate their use of 
third-party databases to verify earned income. Preliminary results 
suggest this project may have a positive impact on payment accuracy. 
USDA is using the information from grantees to pursue a national-level 
contract for all states for earned income verification.

    Question 9. As mandated in the Consolidated Appropriations Act, 
2021 (CAA, 2021), the National Academy of Sciences, Engineering, and 
Medicine (NASEM) was to complete a review of the 2020 edition of the 
Dietary Guidelines for Americans that among other things, would conduct 
comparative analyses of methodologies, protocols, and evaluation 
processes. This report is long overdue, however the Department of 
Health and Human Services and the Department of Agriculture have 
seemingly ignored this mandate, instead moving ahead with the proposal 
of scientific questions and a call for public comment on them. Deputy 
Under Secretary Dean, when can we expect the release of the NASEM 
report, and will you commit to ample notice and briefings on it? 
Additionally, is it not premature to move forward with the 2025-2030 
iteration, knowing the relevant Congressional committees, the 
scientific community, and the general public have not been privy to the 
comprehensive analyses as required in CAA, 2021? Do you think the 
public, including the scientific community, should have the opportunity 
to comment on the NASEM report once released? Especially before an 
expectation to engage on the 2025-2030 edition?
    Answer. It is our understanding that NASEM provided Congress with 
the study's midcourse report on May 18. NASEM requested an extension to 
complete the study, and the committee now expects to submit its final 
report by the end of this calendar year. NASEM has told us it is their 
standard practice to offer Congress a briefing on its study committee's 
work. USDA and HHS are also happy to brief Congress on the midcourse 
report released publicly on May 19, and on the final report once we 
receive it ourselves.
    While the DGA is published every 5 years, the work to develop each 
new edition is a multiyear process. In order to ensure we release the 
next edition of the DGA on time, as mandated by Congress, we had to 
begin work when we did, particularly to ensure we have enough time to 
give the public ample opportunities to weigh in and participate 
throughout.
    The purpose of the NASEM study currently underway is to assess the 
process for developing the 2020-2025 Guidelines in light of the 2017 
NASEM study recommendations. While the current NASEM study will not 
include recommendations on the process to develop the Dietary 
Guidelines for Americans, continuous quality advancement is critical to 
our work, and we'll continue to work towards integrating the 
recommendations from the 2017 NASEM study into our process as we move 
forward.
    We appreciate their ongoing work on this analysis, described in the 
midcourse report, and look forward to the final report once published. 
This is one of many tools we will use to help support our continuous 
process improvement and promote science-based decision making across 
all that we do. USDA and HHS are fully committed to a scientific and 
transparent process for developing the Dietary Guidelines for 
Americans. As we look ahead to the next edition, we have already taken 
steps to implement the NASEM recommendations, including enhancing 
transparency and supporting state-of-the-art processes and methods.

    Question 10. On May 05, 2022, the Department announced it will 
interpret the prohibition on discrimination based on sex found in Title 
IX of the Education Amendments of 1972, and in the Food and Nutrition 
Act of 2008, as amended, Supplemental Nutrition Assistance Program 
(SNAP), (7 U.S.C.  2011 et seq.), to include discrimination based on 
sexual orientation and gender identity. As a result, state and local 
agencies, program operators and sponsors that receive funds from FNS 
must investigate allegations of discrimination based on gender identity 
or sexual orientation. Those organizations must also update their non-
discrimination policies and signage to include prohibitions against 
discrimination based on gender identity and sexual orientation. Deputy 
Under Secretary Dean, this is concerning because like you, I feel that 
access to programs should come without fear of discrimination. Looking 
at the last 10 years, how many complaints have been filed regarding 
SNAP discrimination based on sexual orientation or gender identity? 
Please walk me through each, as well as the process by which the 
Department addressed and/or resolved the complaint(s). Is the 
Department providing additional training to ensure partners understand 
their responsibilities?
    Answer. Each of the FNS programs also has enabling regulations that 
include certain civil rights components. The SNAP regulations at 7 CFR 
272.6 describe procedures for SNAP complaint handling, and specifically 
authorize state SNAP agencies with an approved complaint processing 
procedure to opt to directly process program civil rights complaints. 
States must process discrimination complaints based on sexual 
orientation and gender identity just as they would process 
discrimination complaints based on sex.
    Generally, state agencies must ``timely'' forward all complaints of 
prohibited discrimination to FNS, unless they have an approved 
complaint processing procedure in place. In addition, state agencies 
must maintain records of complaints and submit records to FNS. State 
agencies with approved complaint processing plans must follow those 
plans in handling complaints, including submitting decisions to FNS for 
review before they are issued, and ensuring decisions include appeal 
rights to USDA's Office of the Assistant Secretary for Civil Rights.
    Prior to 2016, FNS complaint databases were unable to track 
complaints of discrimination in SNAP programs that raised issues based 
on gender identity or sexual orientation separately from other sex 
discrimination complaints. Beginning in 2016, FNS Civil Rights tracked 
complaints based on gender identity or sexual orientation manually. 
Between February 2016, and August 2022, FNS received 36 complaints of 
discrimination in the SNAP program based on sexual orientation or 
gender identity.
    FNS contacted all 36 complainants. In 33 of those cases, FNS 
received no response from the complainant. In the remaining three 
cases, FNS closed one case because the complainant filed in court on 
substantially the same issues, received one request to withdraw the 
complaint, and issued one final agency decision finding no 
discrimination.

    Question 11. Deputy Under Secretary Dean, for any states approved 
for Pandemic-EBT benefits in February, March and/or April 2022, can you 
please outline the average amount provided to families via P-EBT 
benefits? Also, given that most schools have reopened, what is the 
purpose of continued issuances?
    Answer. USDA approved 14 state P-EBT plans for school children in 
the months of February, March, and April 2022. These states estimated 
that 4.5 million children would receive P-EBT benefits totaling $1.94 
billion under their plans over the course of School Year 2021-2022. On 
average, beneficiaries under these plans would receive a state-
estimated $430 for the school year. Note, though, that many children 
would receive no benefits under these plans since they did not miss 
school days due to the pandemic. Averaged across the total number of 
children eligible for free or reduced-price school meals, children in 
these states would receive an average of $190 over the course of the 
school year.
    USDA approved five P-EBT child care plans in the months of 
February, March, and April 2022. These states estimated that they would 
issue a total of $196.5 million to 532,000 SNAP-enrolled children in 
child care over the course of the school year. On average, this is $370 
per child.
    Although most schools have reopened, many children continued to 
miss school days during School Year 2021-2022 for COVID-related 
reasons. These reasons include mandatory isolation periods due to 
positive test cases or exposure to someone else who tested positive. 
Children also missed school days because their health-compromised 
status or the health-compromised status of their family members 
prevented them from safely attending school in-person. All these 
children lacked access to meals at school for some or all of the school 
year and qualified for P-EBT benefits under the terms of the Families 
First Coronavirus Response Act (FFCRA).

    Question 12. The agency shares a daily file of all SNAP-authorized 
retailers with state vendors for purposes related to their contracts 
with state agencies. I am hearing multiple retailers have been 
contacted by third-party processors (TPP) shortly after being 
authorized (in some cases, less than 24 hours post-authorization). I 
have also heard of cases where the retailer was contacted before they 
themselves were made aware of authorization. I have been told several 
complaints have been filed with FNS in recent months. Deputy Under 
Secretary Dean, if true, how are these third-party processors obtaining 
this information, in what appears to be real time? What has or is FNS 
planning to do to address what appears to be an improper use of 
personally identifiable information? If nothing, does the agency not 
see this as an issue? Does the agency have any plans to contact state 
vendors and third-party processors and advise them to not share or use 
this confidential information?
    Answer. The Department has conducted extensive outreach to all 
internal and external stakeholders who have a need for the daily file 
of SNAP authorized retailers to remind them of their responsibilities 
to safeguard the information, and of the penalties associated with 
information release.
    All stakeholders were required to acknowledge and re-sign 
attestations regarding information use and disclosure. USDA will ensure 
that all authorized users are periodically reminded of these 
responsibilities.
    USDA also reached out to certain third parties directly to inform 
them of information use and disclosure penalties and provided them 
links to readily available public information. USDA has seen a notable 
downtick in complaints regarding early contacts.
Question Submitted by Hon. James R. Baird, a Representative in Congress 
        from Indiana
    Question. Deputy Under Secretary Dean, the Committee appreciates 
your response regarding the use of MyPlate and SNAP-Ed as educational 
opportunities which empower customers to purchase all forms of produce, 
specifically frozen. Please provide descriptive, tangible proof of 
Federal and state programming where the purchase of frozen foods has 
been encouraged.
    Answer. In SNAP-Ed, messages of nutrition education and obesity 
prevention are to be consistent with the Dietary Guidelines for 
Americans (DGAs). The DGAs state that all forms of fruits and 
vegetables, including fresh, canned, dried, frozen, and 100 percent 
juices, in nutrient-dense forms, can be included in healthy dietary 
patterns. Some examples of SNAP-Ed programming that encourages the 
consumption of frozen foods include:

   Webpage messaging: ``Remember, fresh, frozen, canned, and 
        dried: fruits and vegetables are a delicious way to make every 
        bite count!'' https://snaped.fns.usda.gov/seasonal-produce-
        guide

   Educational discussion guides, recipes and handouts 
        available on this page reference the use of frozen foods 
        https://snaped.fns.usda.gov/nutrition-education/fns-curricula/
        myplate-my-family, such as:

     MyPlate Family Meals discussion guide https://
            snaped.fns.usda.gov/sites/default/files/documents/
            Discussion_MyPlateFamilyMeals.pdf * 
---------------------------------------------------------------------------
    * Editor's note: items annotated with  are retained in Committee 
file.

     MyPlate Family Meals handouts complete set https://
            snaped.fns.usda.gov/sites/default/files/documents/
---------------------------------------------------------------------------
            MyPlateFamilyMealsHandouts.pdf 

   The Shop Simple with MyPlate app includes using frozen 
        vegetables as well as fresh and canned. Start Simple with 
        MyPlate D MyPlate \5\
---------------------------------------------------------------------------
    \5\ https://www.myplate.gov/resources/tools/startsimple-myplate-
app.

   ``New Mainers Learn Strategies to Shop, Cook, and Eat 
        Healthy''--A state success story about teaching participants 
        how to use low-cost frozen and canned food items to make meals 
        that are healthy and familiar https://snaped.fns.usda.gov/
        success-stories/new-mainers-learn-strategies-shop-cook-and-eat-
---------------------------------------------------------------------------
        healthy 

   Additional examples containing reference to frozen foods are 
        in the links below:

     Berries (azureedge.us) \6\
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    \6\ https://myplate-prod.azureedge.us/sites/default/files/2020-12/
Berries%205%20Ways%20%
282017%29.pdf.

     Search D MyPlate \7\
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    \7\ https://www.myplate.gov/search?keyword=Frozen+foods.
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Question Submitted by Hon. Chris Jacobs, a Representative in Congress 
        from New York
    Question. According to USDA's FY 2023 budget materials, 
``[e]ncouraging SNAP families to purchase more healthy foods remains an 
important priority for FNS.'' And one of the ways that Congress has 
been doing this is through incentive programs such as the Healthy Fluid 
Milk Incentives Projects program, which was established in the 2018 
Farm Bill to help improve nutrition security for SNAP families through 
healthy and nutritious dairy products. Under this program, shoppers 
that use SNAP benefits to purchase a qualifying fluid milk product 
receive a matching dollar for dollar coupon to use for additional free 
milk. Deputy Under Secretary Dean, can you please explain why incentive 
programs, such as the Healthy Fluid Milk Incentives Projects, are so 
important to families that benefit from SNAP?
    Answer. Incentives programs are intended to increase the 
consumption of healthy foods by SNAP participants while making these 
foods more affordable. Current programs include:

   The Healthy Fluid Milk Incentives Project, which encourages 
        the purchase and consumption of low-fat dairy;

   The Gus Schumacher Nutrition Incentive Program, which 
        encourages the purchase and consumption of fruits and 
        vegetables; and

   Incentives initiated by SNAP-authorized retailers for the 
        purchase of products that meet the dietary guidelines.

    In Fiscal Year 2014, USDA completed an evaluation of the Healthy 
Incentives Pilot (HIP). HIP made fruits and vegetables more affordable 
to SNAP participants. SNAP households received 30 on every SNAP dollar 
they spent on targeted fruits and vegetables at participating SNAP 
authorized firms including large supermarkets, grocery stores and 
farmers markets. This pilot operated in one Massachusetts county 
between November 2011 and December 2012. A rigorous evaluation showed 
that HIP increased the consumption of targeted fruits and vegetables by 
about \1/4\ of a cup per day.
Questions Submitted by Hon. Michael Cloud, a Representative in Congress 
        from Texas
    Question 1. Deputy Under Secretary Dean, it is my understanding 
that states had regulatory flexibility during the pandemic when it came 
to quality control reviews. In a release dated February 19, 2021, FNS 
specifically encouraged states to still collect this data. Do you know 
how many states continued collecting quality control data during the 
pandemic and were there any who chose not to collect this data? For 
those that chose not to, why?
    Answer. While quality control (QC) flexibilities provided to states 
by Section 4603(a)(2) of the Continuing Appropriations Act, 2021 and 
Other Extensions Act \8\ allowed states to suspend QC reviews, most 
states continued to conduct some reviews during the course of the 
suspension.
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    \8\ https://www.congress.gov/116/plaws/publ159/PLAW-
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    See the table below showing the number of states that continued to 
conduct reviews and the proportion of QC reviews states completed. 
Although most states completed at least some reviews, many opted to 
modify their sampling or review procedures in ways that make it 
problematic to compare data from these reviews to official, validated 
QC data.

                        Number of States that Completed SNAP Quality Control (QC) Reviews
----------------------------------------------------------------------------------------------------------------
   Fiscal Year (QC Sample         0% of QC       1-25% of QC      26-50% of QC     51-75% of QC    76-100% of QC
           Months)                Reviews          Reviews          Reviews          Reviews          Reviews
----------------------------------------------------------------------------------------------------------------
   2020 (03/2020-09/2020)                 4               17               16               14                2
   2021 (10/2020-06/2021)                21                8               12                6                6
----------------------------------------------------------------------------------------------------------------


    Question 2. Deputy Under Secretary Dean, regulatory requirements 
concerning quality control were supposed to return July 2021. Does FNS 
have any intention of going back and retroactively developing error 
rates for FY 2020 and FY 2021?
    Answer. Using the QC flexibilities provided to states by Section 
4603(a)(2) of the Continuing Appropriations Act, 2021 and Other 
Extensions Act,\9\ many states modified their sampling or review 
procedures in ways that make it problematic to compare data from these 
reviews to official, validated QC data. These modifications impacted 
the quality and completeness of the data gathered and, consequently, 
USDA's ability to calculate statistically valid payment error rates 
using these data. For example, some states focused on conducting QC 
reviews of error-prone SNAP households, rather than reviews of a random 
sample of all SNAP households.
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    As a result, USDA is unable to use the QC data gathered for FY 2020 
and FY 2021 to establish official payment error rates that comply with 
requirements in the Food and Nutrition Act of 2008, as amended. 
However, USDA has used, and will continue to use, these data to provide 
technical assistance to states.

    Question 3. Deputy Under Secretary Dean, from the audits that FNS 
has conducted so far this year, what are the trends you are seeing for 
over and under payments?
    Answer. At this time, USDA has received state-reported QC data for 
the first half of FY 2022. Those data are unweighted, un-regressed, and 
do not incorporate any adjustments that result from the Federal re-
review.
    The QC data currently available to USDA are considered preliminary, 
as they change daily with each submission of a state's QC findings. FY 
2022 QC data will be final when the FY 2022 payment error rates are 
officially announced on June 30, 2023.
    The preliminary data show that agency-caused payment errors are 
more than half of all payment errors, and the majority of all payment 
errors resulted in overpayments. The most frequent causes of payment 
errors are inaccurate wages and salaries, inaccurate household 
composition, and incorrect application of policy related to a 
household's reporting system. USDA continues to monitor these and other 
trends and to provide technical assistance to states to help improve 
payment accuracy.
Question Submitted by Hon. Michelle Fischbach, a Representative in 
        Congress from Minnesota
    Question. Deputy Under Secretary Dean, a nonprofit based in 
Minnesota is under Federal investigation over allegedly defrauding the 
Federal Government of tens, even hundreds of millions of dollars. Two 
programs, the Child and Adult Care Food Program and the Summer Food 
Service Program, are administered by the Food and Nutrition Service, 
and further managed by state agencies. This nonprofit, contracted by 
the state agency, has claimed feeding more children--on a daily basis--
than there even exists in Minnesota's largest school district. 
Allegations include Federal funds meant to provide free meals to 
underprivileged children and adults instead went to extravagant 
expenses, such as property purchases in Kenya and trips to Las Vegas. 
State officials claimed they brought their concerns to USDA when 
irregularities were found, even sharing them with the Office of 
Inspector General. Ensuring adequate oversight and safeguards over 
Federal meal programs is critical to tamping down fraud and good 
stewardship over the taxpayer dollars. When my office requested more 
information surrounding this situation, it took nearly 2 months to hear 
that your staff cannot discuss details. That is a disappointment, and I 
am asking you on the record to commit to working with my staff and me 
to address the underlying gaps in safeguards so that this situation 
does not occur again in the future.
    Answer. Ensuring the integrity of Federal funds granted to 
institutions administering and operating all of our programs, including 
child nutrition programs, is of the utmost importance to us at USDA and 
FNS welcomes working with Congress on these important matters. FNS 
understands that at this time, the Federal Bureau of Investigation 
continues its active, ongoing investigation into the administration of 
the Child and Adult Care Food Program (CACFP) and the Summer Food 
Service Program (SFSP) by Feeding Our Future and other sponsoring 
organizations in Minnesota and is thus limited in the statements we may 
make relative to this matter.
    USDA has measures in place at both the state and Federal levels to 
safeguard against fraud and minimize misuse of program funds. FNS and 
state agencies regularly conduct oversight of FNS local program 
partners during local level reviews and Management Evaluations. In 
instances where fraud and program abuse are suspected, USDA has 
regulatory provisions and processes which state agencies follow. In 
addition, mechanisms are in place to engage other Federal entities that 
have specific legal authority and ability to conduct investigations on 
fraud or criminal wrongdoing.
                              attachment 1


[https://www.fns.usda.gov/disaster/california-disaster-nutrition-
assistance]
FNS Disaster Assistance
California Disaster Nutrition Assistance
    Incident: Severe Snow Storms and Power Outages

    Began on Dec. 26, 2021

    Supplemental Nutrition Assistance Programs (SNAP)

   On Jan. 13, 2022, FNS approved California's request to waive 
        timely reporting of food loss for households in Trinity County 
        due to power outages caused by severe winter storms that began 
        on Dec. 26, 2021. This waiver approval allows impacted 
        households to make a request for replacement of SNAP benefits 
        and includes November 2021 Emergency Allotments issued on Dec. 
        4 and 11, 2021. The waiver will be in effect through Jan. 25, 
        2022.

   On Jan. 7, 2022, FNS approved California Department of 
        Social Services (DSS) request to issue mass replacements to 
        impacted households. This waiver approval allows households to 
        receive replacement of benefits in certain [ZIP C]odes of 17 
        counties (Amador, Butte, Calaveras, El Dorado, Humboldt, 
        Mariposa, Mendocino, Nevada, Placer, Plumas, Sierra, Siskiyou, 
        Sonoma, Trinity, Tulare, Tuolumne and Yuba) due to power 
        outages caused by record breaking snowfall and heavy winds that 
        began on Dec. 26, 2021.

   On Jan. 7, 2022, FNS also approved DSS request to waive 
        timely reporting of food loss for households in 20 counties 
        (Alameda, Amador, Calaveras, El Dorado, Humboldt, Lake, Los 
        Angeles, Marin, Monterey, Napa, Nevada, Orange, Placer, 
        Sacramento, San Bernardino, San Luis Obispo, San Mateo, Santa 
        Cruz, Sierra and Yuba counties) due to power outages caused by 
        severe winter storms that began on Dec. 26, 2021. This waiver 
        approval allows impacted households to make a request for 
        replacement of SNAP benefits and includes November 2021 
        Emergency Allotments issued on Dec. 4 and 11, 2021. The waiver 
        is in effect through Jan. 25, 2022.

    Incident: Severe Storms and Power Outages

    Began on Oct. 22, 2021

    Supplemental Nutrition Assistance Programs (SNAP)

   On Nov. 4, 2021, FNS approved California Department of 
        Social Services' request to issue mass replacements to impacted 
        households. This waiver approval allows households in specific 
        [ZIP C]odes in 15 counties to receive replacement of benefits 
        due to severe storms and Public Safety Power Shutoffs that 
        began on Oct. 22, 2021, through Oct. 28, 2021.

    Incident: Power Outages

    Began: Oct. 11, 2021

    Supplemental Nutrition Assistance Programs (SNAP)

   On Oct. 22, 2021, FNS approved California Department of 
        Social Services' request to issue mass replacements to impacted 
        SNAP households in certain [ZIP C]odes in 14 counties as a 
        result of extreme wind and Public Safety Power Shutoffs that 
        began on Oct. 11, 2021.

    Incident: Wildfires

    Began: July 20, 2021

    Disaster Supplemental Nutrition Assistance Programs (D-SNAP)

   On Oct. 8, 2021, FNS approved California's request to 
        operate D-SNAP in six counties--Lassen, Nevada, Placer, Plumas, 
        Tehama and Trinity--in response to the impact of wildfires that 
        began on July 20, 2021. The state agency will begin the 7 day 
        application period on Oct. 18, 2021 and continue through Oct. 
        26, 2021.

    Incident: Wildfires and Power Outages

    Began: June 24, 2021

    Supplemental Nutrition Assistance Programs (SNAP)

   On Sept. 29, 2021, FNS approved California's request to 
        waive the statutory definition of ``food'' under Section 
        3(k)(1) of the Food and Nutrition Act of 2008, as amended, and 
        companion regulations at 7 CFR 271.2.\1\ The waiver applies to 
        the counties of Butte, Glenn, Humboldt, Mendocino, Plumas, 
        Shasta, Siskiyou, Tehama, and Trinity. This waiver approval 
        allows SNAP households to purchase hot foods with SNAP benefits 
        through Oct. 28, 2021 to replace food lost as a result of 
        wildfires that began on July 14, 2021, and continue. FNS has 
        notified SNAP authorized retailers in the approved county of 
        the hot foods waiver approval. Retailers may need as much as 
        24-36 hours to make changes that will allow for sale of hot 
        foods.
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    \1\ https://www.ecfr.gov/current/title-7/subtitle-B/chapter-II/
subchapter-C/part-271/section-271.2.

   On Sept. 29, 2021, FNS approved a California Department of 
        Social Services amended request to waive timely reporting of 
        food loss for households in Shasta County. This waiver approval 
        allows impacted households to make a request for replacement of 
        SNAP benefits, as well as August 2021 Emergency Allotments 
        issued on Sept. 4, 2021, for replacement of food purchased with 
        SNAP benefits that was lost as a result of power outages due to 
        the Fawn Fire that began on Sept. 22, 2021. The waiver will be 
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        in effect through Oct. 22, 2021.

   On Sept. 24, 2021, FNS approved the California Department of 
        Social Services' amended request to waive timely reporting of 
        food loss for households in Riverside County. This waiver 
        approval will allow impacted households to make a request for 
        replacement of SNAP benefits. The waiver will be in effect 
        through Oct. 1, 2021.

   On Sept. 20, 2021, FNS approved the California Department of 
        Social Services to allow SNAP households in 83 impacted [ZIP 
        C]odes of 27 counties additional time to seek replacements via 
        the individual attestation process, including in some areas 
        previously approved for a waiver of timely reporting of food 
        loss. This waiver approval allows impacted households to make a 
        request for replacement of SNAP benefits for replacement of 
        food purchased with SNAP benefits that was lost as a result of 
        power outages and Public Safety Power Shutoffs from Aug. 1, 
        2021, through Aug. 19, 2021. The waiver will be in effect 
        through Oct. 1, 2021.

   On Sept. 8, 2021, FNS approved California's request to waive 
        the statutory definition of ``food'' under Section 3(k)(1) of 
        the Food and Nutrition Act of 2008, as amended, and companion 
        regulations at 7 CFR 271.2.\2\ The waiver applies to the 
        counties of Butte, El Dorado, Lassen, Modoc, Nevada, Placer, 
        Plumas, Sacramento, Shasta, Sierra, Sutter, Tehama, and Yuba. 
        This waiver approval will allow SNAP households to purchase hot 
        foods with SNAP benefits through Oct. 3, 2021 to replace food 
        lost as a result of multiple wildfires that began on July 14, 
        2021 and continue. FNS has notified SNAP authorized retailers 
        in the approved counties of the hot foods waiver approval. 
        Retailers may need as much as 24-36 hours to make changes that 
        will allow for sale of hot foods.
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    \2\ https://www.ecfr.gov/current/title-7/subtitle-B/chapter-II/
subchapter-C/part-271/section-271.2.

   On Sept. 5, 2021, FNS approved the California Department of 
        Social Services request to waive timely reporting of food loss 
        for households in Kern County. This waiver approval will allow 
        impacted households to make a request for replacement of 
        regular SNAP benefits, as well as July 2021 Emergency 
        Allotments issued on Aug. 7, 2021, for replacement of food 
        purchased with SNAP benefits that was lost as a result of power 
        outages due to the French Fire that began on Aug. 30, 2021. The 
        waiver will be in effect through Sept. 29, 2021. On Aug. 30, 
        2021, FNS approved the California Department of Social Services 
        request to waive timely reporting of food loss for households 
        in Riverside County. This waiver approval allows impacted 
        households to make a request for replacement of SNAP benefits, 
        for replacement of food purchased with SNAP benefits that was 
        lost as a result of power outages and the Westward Fire that 
        began on Aug. 25, 2021. The waiver will be in effect through 
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        Sept. 24, 2021.

   On Sept. 3, 2021, FNS approved the California Department of 
        Social Services request to waive timely reporting of food loss 
        for households in San Bernardino County. This waiver approval 
        will allow impacted households to make a request for 
        replacement of regular SNAP benefits, as well as July 2021 
        Emergency Allotments that were issued on Aug. 7, 2021, for 
        replacement of food purchased with SNAP benefits that was lost 
        as a result of power outages due to the Railroad, Roadside, and 
        South Fires that began on Aug. 25, 2021. The waiver will be in 
        effect through Sept. 24, 2021.

   On Aug. 23, 2021, FNS approved a California Department of 
        Social Services request to waive timely reporting of food loss 
        for households in Trinity and Shasta counties for food that was 
        lost as a result of the McFarland and Monument fires. For 
        Trinity County, FNS approved the waiver to allow impacted 
        households sufficient time to report food purchased with 
        regular SNAP benefits and subsequently lost. This waiver 
        approval allows impacted households to make a request for 
        replacement of SNAP benefits through Sept. 16, 2021. In Shasta 
        County, FNS granted approval to allow impacted households in 
        Shasta County sufficient time to report their loss of food. 
        Replacements would be authorized for the amount of the loss, 
        not to exceed the monthly allotment for the household, as well 
        as the household's July 2021 Emergency Allotments that were 
        issued on Aug. 7, 2021. This waiver approval allows impacted 
        households to make a request for replacement of SNAP benefits 
        and EA benefits through Sept. 16, 2021.

   On Aug. 16, 2021, FNS approved the California Department of 
        Social Services' request to waive timely reporting of food loss 
        for households in Yuba County. This waiver approval allows 
        impacted households to make a request for replacement of SNAP 
        benefits and July 2021 Emergency Allotments issued on Aug. 7, 
        2021, for replacement of food purchased with SNAP benefits that 
        was lost as a result of power outages and the Glen Fire that 
        began on Aug. 11, 2021. The waiver will be in effect through 
        Sept. 10, 2021.

   On Aug. 12, 2021, FNS approved the California Department of 
        Social Services' request to waive timely reporting of food loss 
        for households in Siskiyou County. This waiver approval allows 
        impacted households to make a request for replacement of SNAP 
        benefits and June 2021 Emergency Allotments as a result of 
        power outages and the River Complex and Antelope Fires that 
        began on July 30, 2021. The waiver will be in effect through 
        Aug. 30, 2021.

   On Aug. 9, 2021, FNS approved the California Department of 
        Social Services' request to waive timely reporting of food loss 
        for households in Nevada and Placer counties as a result of 
        power outages and the River Fire that began on Aug. 4, 2021. 
        This waiver approval allows impacted households to make a 
        request for replacement of SNAP benefits through Sept. 3, 2021.

   On Aug. 4, 2021, FNS approved the California Department of 
        Social Services request to waive timely reporting of food loss 
        for households in El Dorado County. This waiver approval allows 
        impacted households to make a request for replacement of SNAP 
        benefits and July 2021 Emergency Allotments issued on Aug. 7, 
        2021 that were lost as a result of power outages and the Caldor 
        Fire that began on Aug. 14, 2021. The waiver will be in effect 
        through Sept. 13, 2021.

   On July 29, 2021, FNS has approved the California Department 
        of Social Services request to waive timely reporting of food 
        loss for households in Mono County due to power outages and the 
        Tamarack Fire. This waiver approval allows impacted households 
        to make a request for replacement of SNAP benefits and June 
        2021 Emergency Allotments issued on July 17, 2021. The waiver 
        will be in effect through Aug. 23, 2021.

   On July 26, FNS approved the California Department of Social 
        Services request to waive timely reporting of food loss for 
        households in Lassen County, for replacement of food purchased 
        with SNAP benefits lost as a result of power outages and the 
        Beckwourth Complex Fire that began on July 12, 2021. This 
        waiver approval allows impacted households to make a request 
        for replacement of SNAP benefits through Aug. 11, 2021.

   On July 22, FNS approved the California Department of Social 
        Services request to waive timely reporting of food loss for 
        households in Alpine County for the replacement of food 
        purchased with SNAP benefits that was lost as a result of the 
        power outages that began July 16, 2021. This waiver approval 
        allows impacted households to make a request for replacement of 
        SNAP benefits through Aug. 16, 2021.

   On July 21, 2021, FNS approved the California Department of 
        Social Services' request to waive timely reporting of food loss 
        for households in Mariposa County for the replacement of food 
        purchased with SNAP benefits that was lost as a result of the 
        River Fire that began on July 11, 2021. This waiver approval 
        allows impacted households to make a request for replacement of 
        SNAP benefits through Aug. 10, 2021.

   On July 15, 2021, FNS approved California's request to waive 
        timely reporting of food loss for households in Mendocino 
        County as a result of the Broiler Fire that began on July 7, 
        2021. This waiver approval will allow impacted households to 
        make a request for replacement of SNAP benefits through Aug. 6, 
        2021.

   On July 12, 2021, FNS approved the California Department of 
        Social Services request to waive timely reporting of food loss 
        for households in Shasta County for replacement of food 
        purchased with SNAP benefits that was lost as a result of 
        wildfires that began on June 30, 2021. This waiver approval 
        allows impacted households to make a request for replacement of 
        regular SNAP benefits, as well as May 2021 Emergency Allotments 
        issued on June 13, 2021. The waiver will be in effect through 
        July 30, 2021.

   On July 7, 2021, FNS approved a California Department of 
        Social Services request to waive timely reporting of food loss 
        for households in Siskiyou County, for replacement of food 
        purchased with SNAP benefits that was lost as a result of a 
        wildfire that began on June 24, 2021. This waiver approval 
        allows impacted households to make a request for replacement of 
        SNAP benefits through July 26, 2021.

    Incident: Mono Wind Event

    Began: Jan. 18, 2021

    Supplemental Nutrition Assistance Programs (SNAP)

   On April 6, 2021, FNS approved an extension to allow 
        impacted households in California to make a request for 
        replacement of SNAP benefits through April 30, 2021 as a result 
        of power outages that began on Jan. 18, 2021.

   On Jan. 26, 2021, FNS approved California's request to waive 
        timely reporting of food loss for households in Mariposa 
        County. This waiver allows affected households to make a 
        request for replacement of SNAP benefits through Feb. 21, 2021, 
        as a result of the Mono Wind Event that began on Jan. 18, 2021.

    Incident: Snowstorm

    Began: Jan. 26, 2021

    Supplemental Nutrition Assistance Programs (SNAP)

   On Feb. 4, 2021, FNS approved California's request to waive 
        timely reporting of food loss for households in Shasta County 
        as a result of a large snowstorm that began on Jan. 26, 2021, 
        that caused the closure of vital roads and infrastructure, 
        downed trees, and widespread power outages. This waiver 
        approval allows affected households to make a request for 
        replacement of SNAP benefits through Feb. 26, 2021.

    Incident: Mountain View Fire

    Began: Nov. 17, 2020

    Supplemental Nutrition Assistance Programs (SNAP)

   On Nov. 25, 2020, FNS approved California's request to waive 
        timely reporting of food loss for households in Mono County. 
        This waiver allows affected households to make a request for 
        replacement of SNAP benefits through Dec. 17, 2020, for 
        replacement of food purchased with SNAP benefits that was lost 
        as a result of the Mountain View Fire that began on Nov. 17, 
        2020.

    Incident: Power Outages

    Began: Oct. 14, 2020

    Supplemental Nutrition Assistance Programs (SNAP)

   On Nov. 16, 2020, FNS approved California's request to issue 
        mass replacements to impacted households as a result of power 
        outages that occurred on Oct.14, 2020. This waiver allows 
        households to receive replacement of 35 percent of SNAP and 
        Emergency Allotment benefits issued in October 2020, in the 174 
        approved [ZIP C]odes in 31 counties.

    Incident: California Wildfires

    Began: Sept. 4, 2020

    Supplemental Nutrition Assistance Programs (SNAP)

   On Nov. 5, 2020, FNS approved California's request to 
        operate D-SNAP in the ten counties, listed below, in response 
        to the impact of wildfires that began on Sept. 4, 2020. The 
        application period is Monday, Nov. 16, 2020 through Friday, 
        Nov. 20, 2020.

      Impacted counties: Fresno, Los Angeles, Madera, Mendocino, Napa, 
        San Bernardino, San Diego, Shasta, Siskiyou and Sonoma 
        counties.

    Incident: California Wildfires

    Began: Aug. 14, 2020

    Supplemental Nutrition Assistance Programs (SNAP)

   On Oct. 26, 2020, FNS approved California's request to waive 
        the statutory definition of ``food'' under Section 3(k)(1) of 
        the Food and Nutrition Act of 2008, as amended, and companion 
        regulations at 7 CFR 271.2. The waiver applies to 35 counties. 
        This waiver allows SNAP households to purchase hot foods with 
        SNAP benefits in the 35 approved counties through Nov. 22, 
        2020.

   On Oct. 6, 2020, FNS approved California's request to waive 
        timely reporting of food loss for households in Shasta County. 
        This waiver allows affected households to make a request for 
        replacement of SNAP benefits through Oct. 26, 2020.

   On Oct. 6, 2020, FNS approved California's request to issue 
        mass replacements to impacted households. This waiver allows 
        households to receive replacement of 40 percent of September 
        benefits in 16 [ZIP C]odes in 10 counties as a result of 
        wildfires and power outages that began on Sept. 26, 2020.

   On Sept. 29, 2020, FNS approved California's request to 
        operate D-SNAP in nine counties in response to the impact of 
        wildfires that began Aug. 14, 2020. For Lake, Monterey, Napa, 
        San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties, the 
        application period will begin no earlier than Oct. 14 through 
        Oct. 16, 2020, then resume on Oct. 19 through Oct. 22, 2020. 
        For Butte County, the application period will begin no earlier 
        than Oct. 21 through Oct. 23, 2020, then resume on Oct. 26 
        through Oct. 29, 2020.

   On Sept. 24, FNS approved California's request to waive the 
        statutory definition of ``food'' under Section 3(k)(1) of the 
        Food and Nutrition Act of 2008, as amended, and companion 
        regulations at 7 CFR 271.2. for six counties. This waiver 
        approval allows SNAP households to purchase hot foods with SNAP 
        benefits in the approved counties through Oct. 22, 2020.

   On Sept. 21, 2020, FNS approved California's request to 
        issue mass replacements to impacted households. This waiver 
        allows households to receive replacement of 50% of September 
        benefits in the 83 [ZIP C]odes as a result of wildfires and 
        power outages.

   On Sept. 15, 2020, FNS approved California's request to 
        waive timely reporting of food loss for households in Siskiyou 
        County. This waiver approval allows households to make a 
        request for replacement of SNAP benefits through Oct. 8, 2020. 
        These replacement SNAP benefits will allow households to 
        replace food lost as a result of power outages and the Slater 
        Fire that began on Sept. 8, 2020.

   On Sept. 14, 2020, FNS approved California's request to 
        waive timely reporting of food loss for households in seven 
        counties. This waiver approval allows households to make a 
        request for replacement of SNAP benefits through Oct. 5, 2020, 
        as a result of power outages and wildfires

   On Sept. 3, 2020, FNS approved California's request to issue 
        SNAP mass replacements to impacted households. This waiver 
        approval allows households to receive replacement of 50 percent 
        of August benefits for 23 [ZIP C]odes in 12 counties as a 
        result of wildfires and power outages.

   On Aug. 26, 2020, FNS approved California's request to waive 
        the timely reporting of food loss in the eight affected 
        counties listed below. This waiver approval allows households 
        to request, by individual affidavit/attestation, replacement of 
        SNAP benefits for food lost as a result of wildfires and power 
        outages that began on Aug. 14, 2020. The waiver applies from 
        Aug. 14, 2020, through Sept. 14, 2020.

      Impacted counties: Lake, Monterey, Napa, San Mateo, Santa Cruz, 
        Solano, Sonoma and Yolo.

   On Aug. 26, 2020, FNS approved California's hot food waiver 
        request. This waiver allows SNAP households in the eight 
        affected counties listed below to purchase hot foods and hot 
        food products with SNAP benefits through Sept. 23, 2020.

      Impacted counties: Lake, Monterey, Napa, San Mateo, Santa Cruz, 
        Solano, Sonoma and Yolo.
      Because many households within these counties have been displaced 
        or have temporarily relocated to other parts of the state, the 
        waiver is extended to the bordering counties of Alameda, 
        Colusa, Contra Costa, Glenn, Marin, Mendocino, Sacramento, 
        Santa Clara and Sutter.

    Incident: Wildfire

    Began: October 2019

    Supplemental Nutrition Assistance Programs (SNAP)

   On Nov. 18, 2019, FNS approved a mass replacement request 
        from the state of California to 104 [ZIP C]odes in 20 counties. 
        The waiver approval will allow households in these affected 
        [ZIP C]odes to receive replacement of 15% of the October SNAP 
        benefit. These replacement SNAP benefits will allow households 
        to replace food lost as a result of proactive de-energization 
        of power lines by Pacific Gas and Electric and Southern 
        California Edison that occurred from Oct. 23, 2019 through Oct. 
        31, 2019.

   On Nov. 1, 2019, FNS approved a waiver request from the 
        state of California to waive timely reporting of food loss to 
        households for the entire state of California. This waiver 
        approval allows households in the affected areas to request a 
        replacement of SNAP benefits through Nov. 22, 2019, to replace 
        food lost as a result of Pacific Gas and Electric and Southern 
        California Edison power outages that began Oct. 23, 2019.

   On Oct. 21, 2019, FNS approved California's request to issue 
        mass replacements to 231 [ZIP C]odes in 28 counties. This 
        waiver approval allows households in these affected [ZIP C]odes 
        to receive replacement of 60 percent of the October SNAP 
        benefit. These replacement SNAP benefits allow households to 
        replace food lost as a result of proactive de-energization of 
        power lines by Pacific Gas and Electric and Southern California 
        Edison that began on Oct. 9, 2019.Child Nutrition Programs

   On Oct. 30, 2019, FNS approved a request from California for 
        SFAs impacted by the public safety power outages. The 
        California Department of Education made this request on behalf 
        of SFA in 45 counties. The state agency reported that schools 
        in the affected counties are experiencing spoiled food 
        inventory, making compliance with the school meal pattern 
        requirements difficult. Schools in the affected counties may 
        serve and claim for reimbursement school lunch and breakfast 
        meals that do not meet the meal pattern requirements, through 
        Nov. 12, 2019.

    Incident: Kincade Wildfire

    Began: October 2019

    Child Nutrition Programs

   On Nov. 1, 2019, FNS approved the request for the National 
        School Lunch Program (NSLP) and the School Breakfast Program 
        (SBP) meal pattern flexibility in the 38 school food 
        authorities (SFAs) in Sonoma County and six SFAs in Lake County 
        impacted by the Kincade fire effective Oct. 23, 1019 through 
        Nov. 25, 2019.

    Incident: California Earthquake

    July 2019

    Child Nutrition Programs

   On Aug. 1, 2019, FNS issued a letter approving a request for 
        two school districts in Kern and San Bernardino Counties, 
        California impacted by two major earthquakes. Trona Joint 
        Unified School District and Sierra Sands Unified School 
        District may serve lunches and breakfasts for reimbursement 
        that do not meet the National School Lunch Program and School 
        Breakfast Program meal patterns through Sept. 30, 2019. The 
        state agency reported that the earthquakes have damaged 
        numerous schools, homes, commercial structures, and roadways. 
        This approval is expected to help Trona Joint Unified School 
        District and Sierra Sands Unified School District overcome 
        barriers to standard Program operations as the districts 
        recover from the earthquakes.

   On July 12, 2019, FNS approved the California Department of 
        Education's (CDE) request for flexibility in meal pattern 
        requirements for SFA operating the Seamless Summer Option in 
        communities affected by earthquakes in Kern and San Bernardino 
        Counties on July 4 and 5, 2019. This approval allows affected 
        schools to serve meals that do not meet the NSLP meal pattern, 
        through Aug. 5, 2019.

    Incident: California Earthquake

    July 2019

    Supplemental Nutrition Assistance Programs (SNAP)

   On July 9 and July 11, 2019, FNS approved California's 
        requests to waive timely reporting of food loss for households 
        in Kern County and San Bernardino counties; this waiver 
        approval will allow households in Kern and San Bernardino 
        County to make a request for replacement of SNAP benefits 
        through Aug. 5, 2019. These replacement SNAP benefits will 
        allow households to replace food lost due to power outages 
        caused by earthquakes and aftershocks that began on July 4, 
        2019.

    Incident: California Storms and Subsequent Power Outages

    February 2019

    Supplemental Nutrition Assistance Programs (SNAP)

   On March 4, 2019, FNS approved California's request to waive 
        timely reporting of food loss to households in the counties of 
        Lake, Sonoma and Mendocino. This waiver approval will allow 
        households in these affected counties to make a request for 
        replacement of SNAP benefits through March 26, 2019. These 
        replacement benefits will allow households to replace food lost 
        due to heavy rainfall and flooding resulting from storms that 
        began on Feb. 25, 2019.

    Incident: Snow Storms and Subsequent Power Outages

    February 2019

    Supplemental Nutrition Assistance Program (SNAP)

   On Feb. 25, 2019, FNS approved California's request to waive 
        timely reporting of food loss to households in Shasta County 
        and will allow households in the affected county to make a 
        request for replacement of SNAP benefits through March 14, 
        2019. These replacement benefits will allow households to 
        replace food lost due to power outages resulting from the snow 
        storms.

   FNS also approved California's request to issue mass 
        replacements of SNAP benefits for residents in impacted [ZIP 
        C]odes in Shasta County that suffered food losses resulting 
        from power outages caused by the snow storms that began on Feb. 
        12, 2019.

    Incident: Camp, Hill, and Woolsey Fires

    November 2018

    Disaster Supplemental Nutrition Assistance Program (D-SNAP)

   On Nov. 29, 2018, FNS approved California's request to 
        operate a D-SNAP in Butte County starting on December 12. Look 
        for specific information regarding D-SNAP eligibility and 
        operations on state web pages or call the state's SNAP hotline.

     SNAP Hotline: 877-847-3663

     Disaster CalFresh \3\
---------------------------------------------------------------------------
    \3\ http://www.cdss.ca.gov/Disastercalfresh.

     If you need assistance with or a replacement of your 
            EBT card, please call the state's EBT customer service 
---------------------------------------------------------------------------
            number at: 877-328-9677

   On Nov. 28, 2018, FNS approved California's request to 
        operate a D-SNAP in certain [ZIP C]odes Los Angeles and Ventura 
        counties starting on December 3. Look for specific information 
        regarding D-SNAP eligibility and operations on state web pages 
        or call the state's SNAP hotline.

     SNAP Hotline: 877-847-3663

     Disaster CalFresh \4\
---------------------------------------------------------------------------
    \4\ http://www.cdss.ca.gov/Disastercalfresh.

     If you need assistance with or a replacement of your 
            EBT card, please call the state's EBT customer service 
---------------------------------------------------------------------------
            number at: 877-328-9677

    Supplemental Nutrition Assistance Program (SNAP)

   On Dec. 18, 2018, FNS approved California's extension 
        request to allow hot foods to be purchased at SNAP authorized 
        retailers through Jan. 16, 2019. The waiver applies to the 
        counties of Butte, Colusa, Glenn, Plumas, Sutter, Tehama and 
        Yuba.

   On Nov. 29, 2018, FNS approved California's request to issue 
        automatic disaster supplements to ongoing SNAP households in 
        the following [ZIP C]odes in Butte County: 95916, 95928, 95942, 
        95954, 95965, 95966, 95969 and 95978.

   On Nov. 28, 2018, FNS approved California's request to issue 
        automatic disaster supplements to ongoing SNAP households in 
        the following [ZIP C]odes:

     Los Angeles: 90263, 90290, 90265, 91302, 90264, 91012, 
            91301, 91304, 91307, 91361, 91362 and 91372;

     Ventura: 91377, 91320, 91361, 91362, 93012, 93042 and 
            93065.

   On Nov. 21, 2018, FNS approved California's request to issue 
        mass replacements of SNAP benefits for residents in the 
        following impacted [ZIP C]odes:

     Ventura County: 91377

     Los Angeles County: 90263, 90290, 90265 and 91302

   On Nov. 19, 2018, FNS approved California's request to issue 
        mass replacements of SNAP benefits for residents that suffered 
        food losses due to power outages caused by the Camp Fire and 
        proactive de-energization of power lines by the local utility. 
        This approval applies to the following impacted [ZIP C]odes:

     Butte County: 95978, 95942, 95954 and 95969

     Plumas County: 95923, 95984, 95956, 95983, 96137, 
            95947, 95971, 95934 and 95915

   On Nov. 16, 2018, FNS approved California's request to 
        allow; hot foods to be purchased at SNAP authorized retailers 
        through Dec. 17, 2018. The waiver applies to the counties of 
        Butte, Colusa, Glenn, Kern, Los Angeles, Orange, Plumas, 
        Tehama, Santa Barbara, San Bernardino, San Luis Obispo, Sutter, 
        Yuba and Ventura.

     Hot Foods Notice to Retailers \5\
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    \5\ https://www.fns.usda.gov/sites/default/files/disaster/11-16-
California Hot Foods Notice to Retailers.pdf.

     Retailers may need 24-36 hours to make changes that 
---------------------------------------------------------------------------
            will allow for the sale of hot foods

   On Nov. 16, 2018, FNS approved California's request to waive 
        timely reporting of food loss to households in the counties of 
        Butte, Ventura and Los Angeles. This waiver approval will allow 
        households in these affected counties to make a request for 
        replacement of SNAP benefits through Dec. 10, 2018.

    Disaster Household Distribution Program (DHD)

   On Nov. 21, 2018, FNS approved a request from California to 
        operate a Disaster Household Distribution Program in Butte 
        County and surrounding areas (Colusa, Glenn, Plumas, Tehama, 
        Shasta, Sutter and Yuba Counties). The program is expected to 
        serve up to 8,000 people with food boxes beginning November 26 
        and operating for approximately 2 weeks.

    Child Nutrition Programs

   On Dec. 20, 2018, FNS approved California's request to 
        extend disaster waivers for Paradise Unified School District. 
        Paradise Unified School District may continue to serve and 
        claim for reimbursement for school lunch and breakfast meals 
        that do not meet the meal pattern requirements through March 1, 
        2019. Paradise Unified School District may also continue to 
        serve all school lunch and breakfast meals to students at no 
        cost and claim meals at the free reimbursement rate through 
        March 1, 2019.

   On Nov. 30, 2018, FNS issued a disaster approval for Butte 
        County in response to the Camp Fire. Schools in Butte County 
        may serve and claim for reimbursement school lunch and 
        breakfast meals that do not meet the meal pattern requirements 
        through Dec. 31, 2018. Schools in Butte County may also serve 
        all school lunch and breakfast meals to students at no cost and 
        claim meals at the free reimbursement rate through Dec. 31, 
        2018.

    Incident: Wildfire

    Oct. 14, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On Oct. 24, 2018, FNS approved California's request to issue 
        mass replacements of SNAP benefits for residents that suffered 
        food losses resulting from power outages, which occurred when 
        power was proactively shut down due to extreme fire conditions. 
        This approval applies to the following impacted [ZIP C]odes:

     Amador County: 95601, 95666, 95689, 95665 and 95629

     Butte County: 95914

     Calaveras County: 95257, 95255, 95232 and 95248

     El Dorado County: 95636, 95634, 95726, 95684, 95633, 
            95720, 95635 and 95667

     Lake County: 95426, 95461, 95467 and 95423

     Napa County: 94508, 94567, 94576 and 94515

     Placer County: 95631, 95714, 95717 and 95701

     Yuba County: 95962, 95935 and 95919

   California intends to issue replacement benefits as early as 
        Oct. 25, 2018.

    Incident: Carr Wildfire

    Began July 23, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On July 28, FNS approved California's request for timely 
        household reporting of food loss for Shasta County. This waiver 
        approval allowed households to make a request for replacement 
        of SNAP benefits through Aug. 21, 2018. These replacement SNAP 
        benefits allowed households to replace food lost as a result of 
        the Carr Fire.

   On Aug. 8, FNS approved California's request for timely 
        household reporting of food loss for Trinity County. This 
        waiver approval will allow households to make a request for 
        replacement of SNAP benefits through Sept. 5, 2018. These 
        replacement SNAP benefits will allow households to replace food 
        lost as a result of the Carr Fire.

   On Aug. 10, 2018, FNS approved the California request for 
        automatic mass replacements in Shasta County. This waiver 
        approval will allow households to receive replacement benefits 
        without having to appear at a local SNAP office to sign an 
        affidavit attesting to food loss, and will allow local DSS 
        offices to operate the program in a more efficient and 
        effective manner. This waiver applies to the following [ZIP 
        C]odes: 96033, 96047 and 96087.

   On Aug. 15, 2018, FNS approved the California Department of 
        Social Services' request to operate D-SNAP in Shasta County due 
        to the impacts of the ongoing Carr Fire. The state agency 
        accepted D-SNAP applications from Aug. 22 through Aug. 25, 
        2018, and will continue to accept application from Aug. 27 
        through Aug. 29, 2018. FNS also approved automatic supplements 
        for ongoing SNAP households in [ZIP C]odes 96001, 96003, 96019, 
        96079, 96089, 96033, 96087, 96047 and 96095.

   On Aug. 16, 2018 FNS approved California's request to allow 
        for hot foods to be purchased at SNAP authorized retailers. Due 
        to the power outages, displacement from homes and structure 
        loss caused by the Carr Fire, FNS has approved a waiver so that 
        affected SNAP households in Butte, Glenn, Lassen, Modoc, 
        Plumas, Shasta, Siskiyou, Tehama and Trinity counties are able 
        to buy hot foods and hot food products with their SNAP benefits 
        through Sept. 16, 2018.

    Child Nutrition Programs

   On Aug. 10, FNS approved California's request for disaster 
        waivers to assist schools impacted by the Carr Fire. These 
        waivers apply to schools that operate the school lunch and 
        school breakfast programs in Shasta County.

     Schools in Shasta County may serve and claim all 
            school lunch and school breakfast meals at the Free 
            Reimbursement Rate, effective Aug. 13 through Sept. 30, 
            2018.

     Schools in Shasta County may serve school lunch and 
            school breakfast meals that do not meet the menu planning 
            or meal pattern requirements, effective Aug. 13 through 
            Sept. 30, 2018.

   California also has the discretion to execute the following 
        flexibilities in Shasta County: Flexibility to allow 
        organizations with current agreements to operate the Summer 
        Food Service Program to open emergency feeding sites, 
        Flexibility to allow Summer Food Service Program sites to be 
        located at school sites during school closure, and Flexibility 
        to designate any appropriate facility as an emergency shelter 
        and waive Child and Adult Care Food Program application 
        requirements.

    Incident: Cranston Fire

    Began July 25, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On August 6, FNS approved California's request for timely 
        household reporting of food loss for Riverside County. This 
        waiver approval allowed households to make a request for 
        replacement of SNAP benefits through Aug. 23, 2018. These 
        replacement SNAP benefits allowed households to replace food 
        lost as a result of the Cranston Fire.

   On Aug. 13, 2018, FNS approved California's request to issue 
        mass replacements for certain [ZIP C]odes in Riverside County. 
        This waiver approval will allow the California Department of 
        Social Services to automatically replace 30 percent of the July 
        2018 SNAP benefit for households affected by the Cranston Fire 
        in the following [ZIP C]odes: 92536, 92539 and 92561.

    Incident: Mendocino Complex Wildfire

    Began July 27, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On July 31, FNS approved California's request for timely 
        household reporting of food loss for Mendocino and Lake 
        Counties. This waiver approval allowed households to make a 
        request for replacement of SNAP benefits through Aug. 26, 2018. 
        These replacement SNAP benefits allowed households to replace 
        food lost as a result of the River and Ranch Fires.

   On Aug. 10, 2018, FNS approved the California request for 
        automatic mass replacements in Lake and Mendocino Counties. 
        This waiver approval will allow households to receive 
        replacement benefits without having to appear at a local SNAP 
        office to sign an affidavit attesting to food loss, and will 
        allow local DSS offices to operate the program in a more 
        efficient and effective manner. This waiver applies to the 
        following [ZIP C]odes:

     Lake County: 95458, 95464, 95485 and 95493;

     Mendocino County: 95410, 95415, 95420, 95427, 95432, 
            95437, 95456, 95459, 95460, 95463, 95466, 95469, 95470, 
            95482, 95488, 95490 and 95494.

   On Aug. 20, 2018, FNS approved the California Department of 
        Social Services' request to operate D-SNAP in Lake County. The 
        state agency accepted D-SNAP applications from Aug. 22 through 
        Aug. 25, 2018, and will continue to accept applications from 
        Aug. 27 through Aug. 29, 2018. FNS also approved automatic 
        supplements for ongoing SNAP households in [ZIP C]odes: 95458, 
        95464, 95485, 95493, 95453, 95423, 95451, 95443, and 95435.

   On Aug. 20, 2018, FNS approved an amended hot foods waiver 
        so that affected SNAP households in Colusa, Lake, Mendocino, 
        Napa, Sonoma, and Yolo counties are able to buy hot foods and 
        hot food products with their SNAP benefits through Sept. 16, 
        2018.

    Incident: Ferguson Wildfire

    Began July 13, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On July 25, 2018, FNS approved California's request for 
        timely household reporting of food loss for Mariposa County. 
        This waiver approval allowed households to request replacement 
        of SNAP benefits through Aug. 13, 2018. These replacement SNAP 
        benefits allow households to replace food lost as a result of 
        the Ferguson Fire.

    Incident: Klamathon Wildfire

    Began July 5, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On July 13, FNS approved California's request for timely 
        household reporting of food loss for Siskiyou County, 
        California. This waiver approval allowed households to make a 
        request for replacement of SNAP benefits through Aug. 6, 2018. 
        These replacement SNAP benefits allowed households to replace 
        food lost as a result of the Klamathon Fire.

    Incident: Pawnee Wildfire

    Began June 23, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On June 29, 2018, FNS approved California's request for 
        timely household reporting of food loss for Lake County, 
        California. This waiver approval allowed households to make a 
        request for replacement of SNAP benefits through July 23, 2018. 
        These replacement SNAP benefits allowed households to replace 
        food lost as a result of the Pawnee Fire.

    Incident: Wildfires and Mudslides

    Began Dec. 4, 2017 and Jan. 9, 2018

    Supplemental Nutrition Assistance Program (SNAP)

   On Feb. 8, 2018, FNS approved the California Department of 
        Social Services' (CDSS) request to operate a D-SNAP in 11 [ZIP 
        C]odes within Los Angeles and San Diego counties due to the 
        impact of multiple wildfires in December 2017. The approved 
        [ZIP C]odes were: 91342, 91040, 91042, 91355, 91381, 91384 and 
        90077 (Los Angeles County) and 92028, 92003, 92084 and 92057 
        (San Diego County). CDSS accepted D-SNAP applications in Los 
        Angeles County for 7 non-consecutive days, beginning Feb. 13 
        through Feb. 16, 2018, then resumed on Feb. 20, and ended on 
        Feb. 22, 2018. CDSS accepted D-SNAP applications in San Diego 
        County for 5 days, beginning Feb. 12, through Feb. 16, 2018. 
        The state agency may have automatically issued a 1 month 
        disaster supplement to all ongoing SNAP households in the 11 
        approved [ZIP C]odes. Ongoing households that lived or worked 
        outside of these 11 [ZIP C]odes may have requested disaster 
        supplements on an individual basis via a signed affidavit 
        attesting to their disaster losses. Ongoing SNAP households 
        already receiving the maximum monthly SNAP allotment for their 
        household size were not eligible for disaster supplements. No 
        household may receive more than the maximum monthly allotment 
        for their household size.

   On Feb. 1, 2018, FNS approved a waiver so that affected SNAP 
        recipients in Santa Barbara and Ventura counties were able to 
        buy hot foods and hot food products with their SNAP benefits 
        through Feb. 28, 2018.

   On Feb. 1, 2018, FNS approved the California Department of 
        Social Services' (CDSS) request to operate a Disaster 
        Supplemental Nutrition Assistance Program (D-SNAP) in Santa 
        Barbara and Ventura counties due to the combined impact of 
        multiple wildfires in December 2017 and mudslides in January 
        2018. CDSS accepted D-SNAP applications in Santa Barbara and 
        Ventura counties for 7 non-consecutive days, beginning Feb. 6 
        through Feb. 9, then resumed on Feb. 12, and ended on Feb. 14, 
        2018. CDSS accepts applications at seven CDSS offices in the 
        approved counties. The state agency may have automatically 
        issued a 1 month disaster supplement to all ongoing SNAP 
        households in the following 20 [ZIP C]odes that experienced 
        either a power outage of more than 4 hours, mandatory 
        evacuations, or both:

     Santa Barbara: 93102, 93105, 93108, 93110, 93111, 
            93067, 93103 93117

     Ventura: 93001, 93003, 93004, 93012, 93013, 93015, 
            93022, 93023, 93033, 93035, 93041 and 93060

   Because ongoing households may have been impacted in 
        December, January, or both months, the state determined the 
        amount of the supplement based on the household's size and 
        composition in the earliest month it was affected. Ongoing 
        households that lived or worked outside of these [ZIP C]odes 
        may have requested disaster supplements on an individual basis 
        via a signed affidavit attesting to their disaster losses. 
        Ongoing SNAP households already receiving the maximum monthly 
        SNAP allotment for their household size were not eligible for 
        disaster supplements. No household may receive more than the 
        maximum monthly allotment for their household size.

   On Dec. 21, 2017, FNS approved California's request to issue 
        SNAP mass replacement benefits for certain [ZIP C]odes in 
        Ventura County. This waiver approval allowed the California 
        Department of Social Services to automatically replace 60 
        percent of the December 2017 SNAP benefit for households 
        affected by the wildfires in the following [ZIP C]odes in 
        Ventura County: 93001, 93004, 93012, 93022, 93033, 93035 and 
        93041. These replacement benefits allowed households to replace 
        food lost as a result of the fires. On Dec. 22, 2017, FNS 
        approved an amendment to California's request for mass 
        replacement of SNAP benefits at 60 percent, in San Diego 
        County, for the following [ZIP C]odes: 91905, 91916, 91963, 
        91980, 92036, 92066, 92070 and 92086.

   On Dec. 10 and 13, 2017, respectively, FNS approved the 
        California Department of Social Services' (DSS) requests to 
        waive the 10 day reporting requirement under SNAP regulations 
        at 7 CFR 274.6(a) for replacement of food purchased with SNAP 
        benefits that was destroyed due to power outages or structural 
        damage/loss of homes resulting from the California Wildfires 
        that began on Dec. 4, 2017. The waiver applied to all of 
        Ventura County and the impacted [ZIP C]odes in Santa Barbara 
        County: 93013, 93067, 93101, 93105, 93106, 93108, 93109, 93110, 
        93111, 93117, and 93436; Los Angeles County: 90077, 91020, 
        91040, 91046, 91202, 91203 , 91205, 91206, 91208, 91209, 
        91214,91221, 91331, 91342, 91355, 91392 and 91393; and San 
        Diego County: 91901, 91905, 91906, 91916, 91917, 91931, 91934, 
        91935, 91948, 91962, 91963, 91980, 92003, 92026, 92027, 92028, 
        92036, 92054, 92056, 92057, 92058, 92059, 92060, 92061, 92065, 
        92066, 92069, 92070, 92082, 92083, 92084 and 92086. The waiver 
        extended the time period for reporting loss of food until Jan. 
        4, 2018. These replacement SNAP benefits allowed households to 
        replace food lost as a result of the fires.

          California Department of Social Service's CalFresh Website 
        \6\
---------------------------------------------------------------------------
    \6\ http://www.cdss.ca.gov/inforesources/calfresh.

    If you think you may be eligible for disaster food assistance in 
your state, please contact your local state office.\7\
---------------------------------------------------------------------------
    \7\ https://www.fns.usda.gov/snap/state-directory.

          01/10/2022.
                              attachment 2


[https://www.fema.gov/disaster/5336]
California Czu Lightning Fire Complex
FM-5336-CA


    Incident Period: Aug. 20, 2020
    Declaration Date: Aug. 20, 2020
Quick Links
    Recovery resources: State & Local \1\ D National \2\
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    \1\ https://www.fema.gov/disaster/5336#local-resources.
    \2\ https://www.fema.gov/disaster/national-referral-list.
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    Connect: Social Media \4\ D Mobile App & Text \5\
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    \4\ https://www.fema.gov/about/news-multimedia/social-media.
    \5\ https://www.fema.gov/about/news-multimedia/mobile-app-text-
messages.
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    24/7 counseling: Disaster Distress Helpline \6\
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    \6\ https://www.samhsa.gov/find-help/disaster-distress-helpline.
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More About This Disaster
          Designated Areas Individual Assistance D Public Assistance D 
        How a Disaster Gets Declared \7\
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    \7\ https://www.fema.gov/disaster/5336/designated-areas.
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          News & Media Events D Press Releases & Fact Sheets D PDFs, 
        Graphics & Multimedia \8\
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    \8\ https://www.fema.gov/disaster/5336/news-media.
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          Reports & Notices Disaster Federal Register Notices D 
        Preliminary Damage Assessments \9\
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    \9\ https://www.fema.gov/disaster/5336/notices.
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Local Resources
    Local Offices

          California Office of Emergency Services \10\
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    \10\ http://www.caloes.ca.gov/.
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          California Office of the Governor \11\
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    \11\ http://gov.ca.gov/.
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          California State and Local Referrals \12\
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    \12\ https://www.fema.gov/node/california-state-and-local-level-
referrals.
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          California Statewide Wildfire Recovery Resources information 
        \13\
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    \13\ https://wildfirerecovery.caloes.ca.gov/.
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          Inciweb--Incident Information System \14\
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    \14\ https://inciweb.nwcg.gov/.

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    Local News & Media

    Visit the News & Media \15\ page for events, fact sheets, press 
releases and other multimedia resources.
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    \15\ https://www.fema.gov/disaster/5336/news-media.
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Funding Obligations
    If and when financial assistance is approved for this disaster, it 
will be displayed here. Information is updated every hour.

          Last updated August 22, 2020.
                             attachment 3a
July 11, 2016

  Sasha Gersten-Paal,
  Branch Chief, Certification Policy Branch,
  Program Development Division,
  Supplemental Nutrition Assistance Program,
  USDA Food and Nutrition Service,
  Alexandria, VA

  Re: Proposed Rule on Disaster Supplemental Nutrition Assistance 
            Program (D-SNAP), Docket RIN 0584-AE00

    Dear Ms. Gersten-Paal:

    On behalf of the Western Center on Law and Poverty (Western Center) 
and the California Association of Food Banks (CAFB), we are submitting 
these comments on the United States Department of Agriculture's 
(USDA's) Food and Nutrition Service (FNS) Proposed Rule on the Disaster 
Supplemental Nutrition Assistance Program (D-SNAP). Our organizations 
have over a decade of experience and partnership in response to 
emergency food needs to prevent hunger following disaster in 
California. It has been our experience that D-SNAP is essential in 
helping households and communities during disaster recovery. The 
proposed rules take important steps toward ensuring D-SNAP is there to 
help Americans and their communities recovering following disaster.
About Our Organizations
    Western Center represents California's poorest residents in policy 
and budget discussions affecting housing, health and public benefits, 
including SNAP. Western Center serves as one of the statewide support 
centers for Legal Services, providing technical assistance and training 
in the SNAP program, including D-SNAP, for legal services throughout 
the state. We also serve on several committees and task forces convened 
by the California Department of Social Services to advise on SNAP, the 
Electronic Benefit Transfer System (EBT) and public benefit online 
application and services and to support implementation of new policies. 
As such, Western Center has played a significant role in supporting the 
state's implementation of SNAP disaster response.
    CAFB is a membership organization of 44 food banks from throughout 
the state with a shared mission to end hunger in California and a firm 
commitment to providing cutting-edge leadership in the anti-hunger 
community. CAFB's major programs include Farm to Family, which works 
with growers and packers to provide fresh produce to food banks; 
statewide programs for SNAP outreach and enrollment; robust state and 
Federal advocacy efforts; produce education; and member services that 
offer assistance with special projects as well as technical support. As 
such, CAFB has played a central role in disaster response in recent and 
historical disasters.
SNAP Provides Essential Anti-Hunger Benefits
    Fifty years ago President Kennedy proposed the establishment of the 
Food Stamp Program, now known nationally as SNAP to confront hunger and 
malnutrition in the United States. The program now serves approximately 
one in seven Americans.
    In California, SNAP is referred to as CalFresh and it is our 
state's first line of defense against hunger. Despite the deep 
commitment and breadth of our state's emergency food bag and soup 
kitchen programs, there is no program with the reach of CalFresh. 
CalFresh benefit allotments are calculated based on household income, 
resources, expenses and size. The maximum monthly allotment in FY 2013 
is $194 for a single person and $649 for a family of four.\1\ 
Nationally, only 41 percent of households receive the maximum allotment 
and 23 percent of household receive less than half of the maximum 
allotment.\2\ In all cases, CalFresh benefits are only expected to 
supplement the food budgets of participating households, that is, 
CalFresh recipients are expected to use other income or other food 
assistance to make up the difference in their food budget.
---------------------------------------------------------------------------
    \1\ U.S. Department of Agriculture, Food and Nutrition Service. 
(2013b). Supplemental Nutrition Assistance Program--Eligibility. 
Available at: http://www.fns.usda.gov/snap/applicant_recipients/
eligibility.htm.
    \2\ Strayer, M., Leftin, J., & Eslami, E. (2012). Characteristics 
of Supplemental Nutrition Assistance Program Households: Fiscal Year 
2011. Report No. SNAP-12-CHAR. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Research and 
Analysis.
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    As highlighted in a report from the Institute of Medicine (IOM),\3\ 
SNAP recipients are less likely to be food-insecure than eligible non-
recipients; in other words, the program meets the central goal to 
alleviate hunger. Controlling for other factors, research has also 
shown that SNAP participants are not more likely than eligible non-
participants to be overweight or obese and that the program does not 
contribute to the current obesity crisis in the U.S.\4\ In fact, by 
both improving dietary intake and reducing food insecurity, 
participation in Federal nutrition programs plays a critical role in 
obesity prevention. For this reason, increasing participation in the 
Federal nutrition programs, including SNAP, is a childhood obesity 
prevention strategy recommended by the IOM and the White House Task 
Force on Childhood Obesity.\5\
---------------------------------------------------------------------------
    \3\ Consensus Report released January 17, 2013, ``Supplemental 
Nutrition Assistance Program: Examining the Evidence to Determine 
Benefit Adequacy,'' available at http://www.iom.edu/Reports/2013/
Supplemental-Nutrition-Assistance-Program-Examining-the-Evidence-to-
Define-Benefit-Adequacy.aspx.
    \4\ Hofferth, S.L. & Curtin, S. (2005). Poverty, food programs, and 
childhood obesity. Journal of Policy Analysis and Management, 24(4), 
703-726, and Linz, P., Lee, M., & Bell, L. (2004). Obesity, poverty, 
and participation in food assistance programs. Family Programs, FSP-04-
PO. Alexandria, VA: U.S. Department of Agriculture, Food and Nutrition 
Service, Office of Analysis, Nutrition and Evaluation.
    \5\ Institute of Medicine, 2009; Institute of Medicine, 2011a; 
White House Task Force on Childhood Obesity, 2010. Reports found at: 
http://www.iom.edu/Activities/Nutrition/SNAPadequacy.aspx and http://
www.whitehouse.gov/the-press-office/childhood-obesity-task-force-
unveils-action-plan-solving-problem-childhood-obesity-.
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    A strong and effective SNAP is crucial for ending hunger and 
improving health in America. Research shows that SNAP plays a critical 
role in alleviating poverty and food insecurity and in improving 
dietary intake, weight outcomes, and health, especially among the 
nation's most vulnerable children.\6\
---------------------------------------------------------------------------
    \6\ ``Long-Term Benefits of the Supplemental Nutrition Assistance 
Program,'' White House Council of Economic Advisors, December 2015, 
available at https://www.whitehouse.gov/sites/whitehouse.gov/files/
documents/SNAP_report_final_nonembargo.pdf and White House fact sheet, 
available at https://www.whitehouse.gov/the-press-office/2015/12/08/
fact-sheet-council-economic-advisers-releases-report-highlighting-new.
---------------------------------------------------------------------------
    On February 7, 2014, the President signed H.R. 2642 Conference 
Report (P.L. 113-79), known as the Agricultural Act of 2014 and 
commonly referred to as ``The Farm Bill.'' This bill enacted several 
provisions negatively impacting the Supplemental Nutrition Assistance 
Program (SNAP), known as CalFresh in California. In Fiscal Year 2015, 
CalFresh reached 4,418,000 California residents, or 11% of the state 
population (one in nine), and 78% of the families that received this 
essential anti-hunger benefit were families with children.\7\
---------------------------------------------------------------------------
    \7\ Center on Budget and Policy Priority, SNAP State-by-State Fact 
Sheet: http://www.cbpp.org/sites/default/files/atoms/files/
snap_factsheet_california.pdf.
---------------------------------------------------------------------------
    More than 48.1 million Americans--15.3 million of them children--
lived in households that struggled against hunger in 2014, according to 
USDA's data. The number of individuals in households that faced the 
deepest struggles with hunger--``very-low-food security''--was 5.5 
percent in 2014.\8\ In California, where only 66% of those eligible for 
CalFresh receive it, food insecurity is high, with 13.5% of state 
residents experience hunger or food insecurity.\9\ Before the 2014 Farm 
Bill debate, a coalition led by Western Center on Law and Poverty 
called on Congress to use the act to address the unacceptable numbers 
of people experiencing hunger.\10\ Unfortunately, the 2012-2014 Farm 
Bill debate did not achieve this goal. Instead, while significant cuts 
were prevented, cuts (rather than a much needed expansion) were passed. 
The farm bill passed assumed $8.6 billion in savings from SNAP, to be 
taken on top of the $11 billion that took effect in November 2013, 
making families hungrier and more vulnerable to poor health.\11\
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    \8\ More than 48.1 million Americans lived in households that were 
struggling against hunger in 2014 according to USDA's Economic Research 
Service. For the summary and full report on USDA's findings, go to 
http://ers.usda.gov/media/1896836/err194_summary.pdf and http://
ers.usda.gov/media/1896841/err194.pdf.
    \9\ Food Research and Action Center State-by-State Food Insecurity 
Report: http://frac.org/pdf/
2015_09_09_usda_food_insecurity_bystate_2012_2014.pdf.
    \10\ Letter of 175 California Organizations calling on the farm 
bill to strengthen SNAP: http://www.frac.org/pdf/FBStateLetter_CA.pdf.
    \11\ These cuts also impacted the retail economy (according to the 
Los Angeles Times) and food banks have not been able to make up the 
loss in benefits (according to USA TODAY). SNAP cuts are job killers, 
too. The USDA-ERS estimates that for every billion in SNAP benefits 
cut, between 8,900 to 17,900 jobs are lost.
---------------------------------------------------------------------------
    With so many Americans already experiencing hunger, the resiliency 
of America's communities impacted by disaster is already compromised, 
making a strong the SNAP disaster response and D-SNAP program even more 
important.\12\ While SNAP's entitlement structure allows it to respond 
quickly and effectively to changes in need, whether those are caused by 
economic downturns or disasters, the D-SNAP program is needed when the 
provisions offered through SNAP are not quick enough or sufficient to 
address a disaster that meets the standards required to receive a 
declaration from the President of the United States.
---------------------------------------------------------------------------
    \12\ According to the National Center for Disaster Response, 
Community resilience is generally defined as the ability to adapt to, 
withstand, or rapidly recover from a disaster or catastrophic event. 
Research suggests that communities have a greater capacity to withstand 
a disaster when its population is not suffering from deprivation of 
basic needs. More information on NCDR's description of the relationship 
between vulnerability and disaster recovery, go to: http://
ncdp.columbia.edu/research/recovery-resiliency/.
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Our Comments to the Proposed Regulations
    Disasters come in many forms. In California, the disasters we have 
experienced in the last decade have been as a result of fire, freeze 
and earthquakes. As the preamble to the proposed rules explains, the 
USDA has worked for decades with states and other partners to prevent 
hunger among disaster victims of disaster through SNAP and D-SNAP.
    I. Support Retaining Agility of D-SNAP: Through D-SNAP procedures, 
FNS provides states with authority to get temporary SNAP benefits to 
disaster victims not already enrolled in SNAP and replacement and 
supplemental benefits to regular SNAP households affected by disaster. 
We appreciate that the D-SNAP framework retains agility for USDA 
response to the varied circumstances of each disaster and believe that 
this is one of the most important features of the proposed rule.
    II. Mass Issuance Is Important Anti-Hunger Tool: The proposed rule 
preamble addresses mass issuance of automatic/replacement and 
supplemental benefits onto EBT cards in disaster areas. Replacement 
SNAP is a permanent feature of the program and all current recipients 
who have been displaced or impacted by an incidence (flood, power 
outage, fire, etc.) that has destroyed their food can apply for 
replacement Cal-Fresh after they have spent their monthly allocation 
(or a portion of it).\13\ As the preamble discusses, however, mass 
replacements generally may be in order in certain circumstances, when 
multiple SNAP households have experienced the same displacement or 
destruction of food. This mass replacement benefit is essential in 
responding to events that fall short of a disaster declaration, such as 
those experienced during the during the 12 month California electricity 
crisis of 2000-2001. Mass replacements also allow administrators to 
respond more quickly in cases of significant disasters when a disaster 
declaration is pending. Mass replacement CalFresh was an important tool 
used in California's 2015 fires.\14\ A mass replacement not only 
reduces likelihood of disaster victims experiencing hunger, it also 
reduces the administrative burden of SNAP caseworkers, many of whom are 
also impacted by a disaster directly or indirectly. We appreciate the 
work that USDA, states and the EBT stakeholders do to make SNAP mass 
issuance a reliable, targeted, efficient, and cost-effective method of 
getting the broadest relief to affected SNAP households in areas with 
demonstrated need.
---------------------------------------------------------------------------
    \13\ This is the California's form to apply for replacement 
CalFresh: http://www.cdss.ca.gov/cdssweb/entres/forms/English/
CF303.pdf.
    \14\ President Obama's 2015 Major Disaster Declarations for Lake 
(https://www.gov.ca.gov/docs/
Governor%27s_Letter_to_President,_Valley_Fire.pdf) and Calaveras 
(https://www.gov.ca.
gov/docs/Governor%27s_Letter_to_President,_Butte_Fire.pdf) county 
fires.
---------------------------------------------------------------------------
    III. Allowing for 30 Days to Prove Loss of Food: We strongly 
support the proposed rule in allowing 30 days (instead of 10) for SNAP 
households in disaster-declared areas to prove food loss for 
replacement benefit eligibility determination. The normal 10 day period 
provides too little time for many clients to learn about the right to 
prove food loss due to a misfortune and too little time for outreach 
workers and media to apprise them of the procedures to claim the loss. 
Additionally, we urge USDA to clarify that a power outage of 4 hours or 
more is sufficient not only for situations involving mass replacements 
(as referenced in the D-SNAP proposed rule preamble) but also is 
sufficient in individual cases of household misfortune.
    IV. Workers Impacted by Disaster Should be Served: One of the most 
frustrating experiences in working with California's disaster victims 
seeking D-SNAP over the past decade is having to tell people who have 
lost their jobs that they are not eligible for D-SNAP. This was 
especially the case in the 2007 San Diego Fire Storm,\15\ impacting 
many wealthy homes that employed low-wage earning gardeners, dry-
cleaners, babysitters and other service professionals who lived in 
other areas, but were suddenly unemployed as a result of the fire and, 
because they were very-low-income, they were ineligible for UI 
benefits. It is well documented that disasters disrupt industries and 
local economic activity, thereby adversely impacting workers who reside 
outside the disaster area. We have recently learned, however, that some 
states have received D-SNAP approval for ``households who resided or 
worked in these 12 counties on April 27, 2014, and who suffered 
disaster-related adverse effects from the severe storms and tornadoes 
were eligible for certification using D-SNAP criteria.'' \16\ As such, 
we strongly support the proposed rule clarifying that states are 
allowed to extend D-SNAP eligibility to those who worked in the 
disaster area at the time of the disaster in addition to those who 
lived in the disaster area. We recommend that the Department improve 
the final rule in this area by requiring that a state that opts not to 
serve non-resident workers explain why it has made that decision. Doing 
so will inform states that serving this population is an option and 
encourage states to consider and document harm, or lack-thereof to 
people who do not reside in the disaster area but who have been 
economically harmed by the disaster.
---------------------------------------------------------------------------
    \15\ https://en.wikipedia.org/wiki/2007_California_wildfires.
    \16\ See information available at http://www.fns.usda.gov/sites/
default/files/Response_to_SE-SW_Tornadoes.pdf.
---------------------------------------------------------------------------
    V. Support Outreach Providers' Role in Disaster Response: Outreach 
and application assisters are essential in connecting eligible people 
with benefits to which they are entitled. Our organizations have had 
significant experience in supporting application assisters in 
responding to disaster. During last year's valley fires, CAFB helped to 
train and coordinate several application assisters from throughout the 
state travel to Lake County to support the D-SNAP outreach effort. CAFB 
supports food banks and outreach providers to plan for impending 
disasters.\17\ Western Center has successfully advocated for improved 
state disaster preparedness, including adding D-SNAP outreach in 
CalFresh outreach contract scopes of work.\18\ As such, we strongly 
support the proposed rule on D-SNAP requiring states to outline plans 
for D-SNAP outreach and believe that California offers a model for 
other states. While we are proud of the outreach partnerships our state 
rallied in response to recent fires, these efforts can be costly for 
all those involved and so we also encourage the Department to make 
additional Federal funds available to augment D-SNAP outreach 
reimbursement funds to support participation of community partners for 
increased disaster response capacity to provide information and 
application assistance in the wake of disasters.
---------------------------------------------------------------------------
    \17\ http://cafoodbanks.org/disaster-preparedness.
    \18\ http://www.calfresh.ca.gov/PG2903.htm It has been up for about 
a year now and from this site, one can access: Application for Disaster 
CalFresh; Notice of Approval/Denial for Disaster CalFresh; Replacement 
Affidavit/Authorization; California Association of Food Banks Emergency 
Food Distributions; Disaster CalFresh Regulations; and, D-SNAP State 
Training Webinar[.]
---------------------------------------------------------------------------
    VI. Final Rules Should Be More Responsive of Vulnerable Households: 
Households with persons with disabilities are particularly vulnerable 
to food insecurity and to hardship following disaster. We support the 
proposed rule requiring state D-SNAP Plans to address accommodations 
for disaster victims with disabilities. The final rule also should 
recognize that additional populations may need special accommodations 
or services to access D-SNAP, including seniors, migrant workers, 
families with children (who will be without school lunches and/or WIC) 
and rural and urban populations that may lack transportation and/or 
communication (broadband) networks, especially following a disaster. 
Our experience suggests several important accommodations for these 
populations: (a) having sufficient application sites; (b) allowing for 
phone interviews, (c) preparing for multiple card issuance locations 
(or pre-printed cards that need only to be loaded with benefits); and, 
(d) ensuring that intake offices are open 7 days, including over 
holidays and weekends. Regarding our recommendation that the proposed 
rule should be improved by allowing alternatives to face-to-face 
interviews for D-SNAP, it is important to note that the regular SNAP 
rules recognize that a face-to-face interview may present a hardship to 
potential clients. We appreciate that for many years now the Department 
has worked with states to minimize the barriers to SNAP access that 
traditional face-to-face interviews pose. The Department allows 
alternatives such as telephone interviews broadly, and, for elderly 
persons and persons with disabilities with stable incomes, lifts the 
requirement for a recertification interview at all. Disaster victims 
often have lost homes, cars, and telephone and internet access. In the 
wake of a disaster, use public transportation and public roads may be 
restricted. For example, in the Northern California fires earlier this 
year, gas stations were closed and travel was restricted for weeks. The 
final D-SNAP rule should recognize the reality of limited 
transportation in most disasters and incorporate lessons learned from 
regular SNAP application and recertification procedures and provide for 
alternatives to face-to-face interviews to better serve those who are 
need of D-SNAP.
    VII. Improving Retail Experience during Disaster Response: We 
support the proposed rule requiring state D-SNAP Plans to address 
communications with food retailers and to reinforce the ability of hot 
food waivers. The prepared food waivers were essential in recent fire 
disaster responses. This provision has been important for many disaster 
victims to obtain meals, often while they lack shelter or kitchen 
facilities to prepare food. Giving retailers timely and accurate 
information about D-SNAP operations, including information about any 
hot food waivers, bolsters the effectiveness of the commercial 
infrastructure that underlies SNAP benefit redemptions. Similarly, we 
support the proposed rule requiring state D-SNAP Plans to address 
Electronic Benefit Transfer (EBT) issuance. EBT offers a mainstream, 
efficient way to provide public benefits to consumers. Anticipating the 
steps needed by government and its partners to issue D-SNAP benefits 
and/or replacement and/or supplemental SNAP benefits electronically in 
the wake of disaster is a proper component of D-SNAP Plans.
    VIII. D-SNAP Should Never Create Government Debt: The proposed rule 
properly prohibits states from collecting benefit over issuances out of 
D-SNAP benefits and also provides that payment of disaster expenses via 
credit card, not only those paid by cash or check, will count when 
determining D-SNAP disaster expenses.
    In closing, considering the great importance of SNAP and D-SNAP in 
preventing hunger and restoring the local economy following a disaster, 
we appreciate the proposed rules and believe that they will greatly 
increase the likelihood that United States residents hard hit by 
disaster will be resilient in the wake of the unthinkable.
    Thank you for your service and for your consideration of our 
comments.
            Sincerely,
            
            

 
 
 
Jessica Bartholow,                   Andrew Cheyne,
Policy Advocate,                     Director of Government Affairs,
Western Center on Law and Poverty,   California Association of Food
                                      Banks,
Sacramento, CA;                      Oakland, CA.
 

                             attachment 3b
September 14, 2020

  Eric Williams,
  Food and Nutrition Service,
  U.S. Department of Agriculture,
  Alexandria, VA

  Re: Notice of Agency Information Collection Activities--Best 
            Practices in Disaster Supplemental Nutrition Assistance 
            Program (D-SNAP) Operations and Planning--OMB Number 0584-
            NEW

Submitted via regulations.gov

    Dear Mr. Williams:

    On behalf of the Western Center on Law and Poverty, please accept 
this comment in response to the Notice of Agency Information Collection 
Activities: Best Practices in Disaster Supplemental Nutrition 
Assistance Program (D-SNAP) Operations and Planning.
About the Western Center on Law and Poverty
    For over 5 decades, the Western Center on Law and Poverty (Western 
Center) has advocated on behalf of individuals with low incomes in 
every branch of California government--from the courts to the 
Legislature. Through the lens of economic and racial justice, we 
litigate, educate and advocate around health care, housing, and public 
benefits policies and administration. Western Center staff have decades 
of experience in working with legislators and state policymakers to 
improve SNAP, known as CalFresh in California. We have published 
countless advocate guides, chaired advisory committees, supported 
Federal and state legislation and, when necessary, filed and won 
litigation to protect the rights of SNAP recipients in California.
    Western Center has also worked with Federal, state and local 
partners for over a decade to plan for and to administer D-SNAP, as 
called for and when approved. We have provided trainings,\1\ crafted 
and helped to implement new policies,\2\ served in the D-SNAP advisory 
workgroups and helped to draft the Disaster CalFresh Manual[.] \3\ It 
is with this experience that has brought us to submit these comments. 
Most recently, we have been working with the California Department of 
Social Services to prepare for D-SNAP implementation following the 
Presidential Declaration for Individual Assistance (FEMA 4558-DR) for 
Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma, and Yolo 
Counties, which we hope will be approved.
---------------------------------------------------------------------------
    \1\ Minimizing Hunger in a Disaster: Advocacy Timeline (http://
www.cafoodbanks.org/sites/default/files/
D%20SNAP%20Advocacy%20Timeline%20FINAL.pdf) (February, 2018) The 
Importance of Disaster SNAP: SNAP Responds When We Need It Most (http:/
/www.cafoodbanks.org/sites/default/files/Fact%20Sheet%20-%20D-
SNAP_0.pdf) (February, 2018).
    \2\ https://wclp.org/resources/implementing-ab-607-gloria-disaster-
calfresh-calworks-feb-2018/.
    \3\ https://www.cdss.ca.gov/Portals/9/ACL/2018/18-125_ES.pdf.
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SNAP is a Program Central to California's Safety Net
    Between January and March 2020, an average of 4.1 million 
Californians living in 2.2 million households received CalFresh 
benefits, with each individual receiving an average of $123 monthly. 
Due to the COVID-19 Public Health Crisis and necessary shelter-in-place 
orders, these numbers increased to 4.8 million Californians in 2.6 
million households by June 2020. On average, in California, each 
participant received an average of $166 monthly in June 2020. The 
program is one of the most responsive to economic downturn caused by 
any reason, including natural disaster.\4\
---------------------------------------------------------------------------
    \4\ https://www.ppic.org/publication/the-calfresh-food-assistance-
program/.
---------------------------------------------------------------------------
D-SNAP Works to Address Hunger Following a Disaster
    The Robert T. Stafford Disaster Relief and Emergency Assistance Act 
provides the Secretary of Agriculture with the authority to operate a 
D-SNAP when affected areas have received a Presidential major disaster 
declaration and when commercial channels of food distribution are 
available. The Food and Nutrition Act of 2008 provides the Secretary of 
Agriculture with the authority to establish temporary emergency 
standards of eligibility for households who are survivors of a disaster 
that disrupts commercial channels of food distribution after those 
channels have been restored. The United States Department of 
Agriculture (USDA) Food and Nutrition Services (FNS) have, on several 
occasions over the past decade, elected to approve the operation of D-
SNAP under Stafford Act authority when affected areas have received a 
Presidential disaster declaration for individual assistance. In 
California, this program is known as D-CalFresh (DCF).\5\
---------------------------------------------------------------------------
    \5\ http://www.calfresh.ca.gov/pg2903.htm.
---------------------------------------------------------------------------
    With a significant number of Californians already experiencing 
hunger or food insecurity, the resiliency of our communities impacted 
by disaster is already compromised. This makes the work of ensuring the 
SNAP disaster response and D-SNAP \6\ program are swift acting and 
robust is even more important.\7\ While SNAP's entitlement structure 
allows it to respond quickly and effectively to changes in need, 
whether those are caused by economic downturns or natural disasters, 
the D-SNAP program is needed when the provisions offered through SNAP 
are not quick enough or sufficient to address a disaster that meets the 
standards required to receive a declaration from the President of the 
United States to support individual assistance. It is for this reason 
that we are very proud of the track-record of cooperation and 
collaboration that California and the USDA FNS have had on securing 
approval and implementing this important benefit throughout the years. 
Still, some improvements to the program could make the program even 
more effective and its reach even further into impacted communities.
---------------------------------------------------------------------------
    \6\ https://www.fns.usda.gov/sites/default/files/D-
SNAP_Disaster.pdf and https://www.fns.
usda.gov/sites/default/files/D-SNAP_handbook_0.pdf.
    \7\ According to the National Center for Disaster Response, 
Community resilience is generally defined as the ability to adapt to, 
withstand, or rapidly recover from a disaster or catastrophic event. 
Research suggests that communities have a greater capacity to withstand 
a disaster when its population is not suffering from deprivation of 
basic needs. More information on NCDR's description of the 
relationship: http://ncdp.columbia.edu/research/recovery-resiliency/.
---------------------------------------------------------------------------
D-SNAP Should Be More Accessible Once Approved
    Our experience suggests several important accommodations for 
disaster victims must be considered when designing a D-SNAP program. 
Disaster victims often have lost homes, cars, and telephone and 
internet access. In the wake of a disaster, use public transportation 
and public roads may be restricted. For example, in the Northern 
California fires that have ravaged our communities over the past 
several years, gas stations were closed and travel was restricted for 
weeks. We believe that ensuring multiple locations where can apply for 
D-SNAP, complete their interview and secure their D-SNAP EBT card for 
the entire period (including weekends and holidays) which the 
application period has been approved should be a priority in disaster 
responses. This access should also include allowing for a telephone 
interview, even when an entire county has been evacuated \8\ or for 
people who cannot physically go into any of the available locations. 
The lack of clear and consistent guidance from the USDA to ensure 
telephone and computer (out-of-office) application and interview for D-
SNAP have especially frustrated our ability to plan for D-SNAP 
implementation during the COVID-19 Public Health Crisis. While state 
law and guidance requires CDSS to maintain mobile EBT issuance stations 
and to make these stations available to the county upon their request, 
this is not sufficing to meet the civil rights of people with 
disabilities during a disaster and the USDA FNS should remedy that by 
allowing online and over the phone processes for D-SNAP across the 
board.
---------------------------------------------------------------------------
    \8\ This is a flaw in the Federal guidance. Western Center and the 
California Association of Food Banks submitted comments to the draft 
regulations calling for them to amend this provision of the 
regulations, but the rules have not been finalized.
---------------------------------------------------------------------------
Prepared Food Availability in Our Disaster Response
    The prepared food waivers were essential in recent California fire 
disaster responses. This provision has been important for many disaster 
victims to obtain meals, often while they lack shelter or kitchen 
facilities to prepare food. Giving retailers timely and accurate 
information about D-SNAP operations, including information about any 
prepared food waivers, bolsters the effectiveness of the commercial 
infrastructure that underlies SNAP benefit redemptions. California 
consistently requests a hot-meal waiver in all D-SNAP application 
materials and the USDA proposed rule also suggested this as a component 
to state disaster planning, but the USDA should go further to make this 
provision automatically accessible to any state, without the rigmarole 
of preparing, submitting and getting approval of a waiver.
Continue to Reinforce Disaster Preparation and Disaster Recovery for 
        Poorest Californians
    Disasters come in many forms. In California, the disasters we have 
experienced in the last decade have been as a result of fire, freeze, 
drought, rain and earthquakes. With the passage of state law, 
California social services administrators are now required by law to 
participate in planning for disaster, adequately represent the needs 
for individual assistance in Federal disaster requests, and implement 
Federal disaster aid if granted. We know these efforts will prevent 
hunger and hardship and contribute to the restoring local economies 
following a disaster. We suggest similar standards be set across the 
board nationally.
Goals for the Information Collection and Study
    The notice provides examples of how it will seek input from 
community stakeholders, we advise that on the list of relevant 
stakeholders, you include legal services, SNAP EBT processors, 
national, state and local anti-hunger advocates, SNAP application 
assisters, SNAP nutrition educators, SNAP Employment and Training 
personnel, people with lived experience with hunger and poverty, 
disaster survivors, and representatives of particular population groups 
(such as older Americans, people with disabilities, rural residents, 
Tribal members, and various racial and ethnic group members and 
representatives).
Using Technology to Improve Access and Operations
    As we mention above, we believe that people should have access to 
technologies that are already at work helping to streamline SNAP 
operations overall. For decades now, automatic mass SNAP replacement 
benefits have been transmitted quickly and efficiently onto EBT cards 
for existing SNAP participants who reside in impacted areas. There is 
no reason why these technologies cannot be used to ensure access to D-
SNAP. In fact, there is no proven way to ensure the civil rights 
protections of D-SNAP eligible Americans without doing so. These 
include the use of online, telephone, texting and other mobile 
technology platforms in D-SNAP. Florida and Louisiana have been granted 
authority to conduct D-SNAP interviews by phone rather than in person 
(for Hurricane Irma and Michael in Florida and, during COVID-19, for 
Hurricane Laura in Louisiana). We believe that this authority should be 
available in all D-SNAP scenarios.
D-SNAP is an Essential Program That Can Be Improved
    We appreciate the opportunity to submit these comments to the 
Department and are grateful that leaders are seeking to build upon the 
considerable experience that it and partner stakeholders have in 
preventing hunger both during and after a disaster. We hope that we can 
be of further assistance during the information collection process and 
will continue to consider ways to adapt D-SNAP tools to new scenarios, 
including to help in the COVID-19 Public Health Emergency and future 
pandemics or climate crisis situations, as we hope the Department will 
too.
    Thank you for the opportunity to comment on the D-SNAP information 
collection. Please do not hesitate to contact me at the email or phone 
number below.
            Sincerely,

Jessica Bartholow,
Policy Advocate,
Western Center on Law and Poverty.


 
                     A 2022 REVIEW OF THE FARM BILL

                   (STAKEHOLDER PERSPECTIVES ON SNAP)

                              ----------                              


                        WEDNESDAY, JUNE 8, 2022

                          House of Representatives,
      Subcommittee on Nutrition, Oversight, and Department 
                                                Operations,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:17 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Jahana Hayes [Chairwoman of the Subcommittee] presiding.
    Members present: Representatives Hayes, McGovern, Adams, 
Brown, Rush, Sablan, Carbajal, Lawson, Kuster, Panetta, Bacon, 
DesJarlais, Baird, Cammack, Thompson (ex officio), and Mann.
    Staff present: Caitlin Balagula, Lyron Blum-Evitts, Lisa 
Shelton, Katherine Stewart, Caleb Crosswhite, Jennifer Tiller, 
Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. JAHANA HAYES, A REPRESENTATIVE IN 
                   CONGRESS FROM CONNECTICUT

    The Chairwoman. This hearing of the Subcommittee on 
Nutrition, Oversight, and Department Operations entitled, A 
2022 Review of the Farm Bill: Stakeholder Perspectives on SNAP, 
will come to order.
    Welcome, and thank you for joining us here today. After 
brief opening remarks, Members will receive testimony from our 
witnesses, and then the hearing will be open to questions. In 
consultation with the Ranking Member and pursuant to Rule 
XI(e), I want to make Members of the Subcommittee aware that 
other Members of the full Committee may join us today.
    And now I will start with my opening statement.
    Good morning, and welcome to today's hearing, A 2022 Review 
of the Farm Bill: Stakeholder Perspectives on SNAP. This 
hearing is one in a series of hearings to review the 2018 Farm 
Bill and prepare for the 2023 Farm Bill.
    Today, we will receive stakeholder input on the 
Supplemental Nutrition Assistance Program, or SNAP, the 2018 
Farm Bill provisions that impact the program, and how the 
COVID-19 pandemic has affected SNAP operations and what we can 
do in the upcoming farm bill to build on the decades of success 
of the SNAP program in combating hunger and food insecurity in 
America.
    Forty-one million Americans currently participate in SNAP. 
Each of their stories are unique, and every person faces 
different challenges, so it is critically important that we 
understand that as part of our decision-making process. The 
positive impacts of SNAP have been particularly felt during the 
pandemic and are continuing to grow as participants receive 
more adequate benefits as a result of the 2021 Thrifty Food 
Plan reevaluation, which I know we will hear more about today 
from our witnesses.
    In 2020, SNAP is estimated to have lifted 2.9 million 
Americans out of poverty. It provided economic stimulus to 
households in every community across the nation, supporting 
local grocery stores, farmers, distributors, and creating jobs. 
It is clear that SNAP works, and it works for our entire 
economy from farmers to consumers. Today, I am interested in 
hearing the ways we can improve upon the SNAP program and help 
make the program more equitable and accessible to those in 
need.
    SNAP is also a highly responsive means-tested program, 
which serves as a stabilizer in times of economic downturn. 
Participation rates are high right now because of the pandemic. 
However, we are already seeing participation decrease as 
Americans begin to recover. In September 2020, SNAP 
participation peaked at 43 million. As of February of this 
year, participation has dropped by nearly two million people. 
That is how SNAP works. It responds in times of need.
    Similarly, our farm support programs spend more when 
commodity prices are low. Our farm bill programs are designed 
that way because it just makes sense, and spending on both SNAP 
and farm programs fluctuates as a result.
    Increased SNAP costs are also due to continued COVID-19 
relief, which is tied to the end of the public health 
emergency, inflation, and the Thrifty Food Plan reevaluation, 
which assured that SNAP provided recipients with adequate 
support.
    Finally, in Fiscal Year 2021, one in eight Americans or 13 
percent of our country participated in SNAP. That means one in 
eight Americans were not sure they would be able to put food on 
their tables, one in eight Americans. But SNAP offered 
stability and assurance.
    Thank you again to the Members and witnesses who are 
joining us here today, as well as those who have tuned in and 
are listening. I look forward to hearing more today about how 
we can improve outcomes for Americans facing food insecurity.
    [The prepared statement of Mrs. Hayes follows:]

 Prepared Statement of Hon. Jahana Hayes, a Representative in Congress 
                            from Connecticut
    Good morning and welcome to today's hearing, A 2022 Review of the 
Farm Bill: Stakeholder Perspectives on SNAP. This hearing is one in a 
series of hearings we are hosting to review the 2018 Farm Bill and 
prepare for the 2023 Farm Bill.
    Today we will receive stakeholder input on the Supplemental 
Nutrition Assistance Program, or SNAP, the 2018 Farm Bill provisions 
that impact the program, how the COVID-19 pandemic has affected SNAP 
operations and what we can do in the upcoming farm bill to build on the 
decades of success of the SNAP program in combating hunger and food 
insecurity in America.
    41 million Americans currently participate in SNAP. Each of their 
stories are unique and every person faces different challenges, so it 
is important that we understand that as part of our decision-making 
process.
    The positive impacts of SNAP have been particularly felt during the 
pandemic and are continuing to grow as participants receive more 
adequate benefits as a result of the 2021 Thrifty Food Plan 
reevaluation, which I know we will hear more about from our witnesses.
    In 2020, SNAP is estimated to have lifted 2.9 million Americans out 
of poverty. It provided economic stimulus to households in every 
community across the nation--supporting local grocery stores, farmers, 
distributors, and jobs.
    It is clear that SNAP works, and it works for our entire economy, 
from farmer to consumer. Today, I am interested in hearing the ways we 
can improve SNAP and help make the program more equitable and 
accessible to those in need.
    SNAP is also a highly responsive, means-tested program which serves 
as a stabilizer in times of economic downturn. Participation rates are 
high right now because of the pandemic. However, we are already seeing 
participation decrease as Americans begin to recover.
    In September 2020, SNAP participation peaked at 43 million. As of 
February of this year, participation has dropped by nearly two million 
people. That is how SNAP works. It responds in times of need.
    Similarly, our farm support programs spend more when commodity 
prices are low. Our farm bill programs are designed that way because it 
makes sense, and spending on both SNAP and farm programs fluctuates as 
a result.
    Increased SNAP costs are also due to continued COVID-19 relief, 
which is tied to the end of the Public Health Emergency, inflation, and 
the Thrifty Food Plan reevaluation, which ensured that SNAP provides 
recipients with adequate support.
    Finally, in Fiscal Year 2021, one in eight Americans--or 13 percent 
of our country--participated in SNAP. That means one in eight Americans 
were not sure if they would be able to put food on their tables, but 
SNAP offered stability and assurance.
    Thank you again to the Members and witnesses joining us today as 
well as those who have tuned in and are listening.
    I look forward to hearing more today about how we can improve 
outcomes for Americans facing food insecurity.
    I'd now like to welcome the distinguished Ranking Member, the 
gentleman from Nebraska, Mr. Bacon, for any opening remarks he would 
like to give.

    The Chairwoman. I would now like to welcome the 
distinguished Ranking Member, the gentleman from Nebraska, Mr. 
Bacon, for any opening remarks he would like to give and just 
to thank him for his help and just being a measured voice in 
these conversations. Mr. Bacon.

   OPENING STATEMENT OF HON. DON BACON, A REPRESENTATIVE IN 
                     CONGRESS FROM NEBRASKA

    Mr. Bacon. Well, thank you, Madam Chairwoman. And thank you 
to our witnesses for sharing your time, your expertise with 
this Subcommittee.
    I was a freshman throughout the drafting and finalizing of 
the 2018 Farm Bill. To say the process is daunting and the work 
tremendous is simply an understatement, and we have a lot of 
work to do. We know that. Policy is tough, and it is 
exacerbated here by the reach and role of SNAP, a huge program, 
a program that is currently assisting more than 42 million 
people at a cost of $9 billion per month.
    This is why these hearings are so important, so we as 
policymakers can understand what is working and what is not and 
how we can improve. And the latter is equally as important as 
the former. I know that SNAP helps people who are in dire 
straits, but I also know the fuzzy interpretation of the law 
and regulatory loopholes lead to questions on the integrity and 
strength of the program, which I hope we can discuss today and 
make improvements.
    And equally important to today's conversation is an honest 
discussion about nutrition and health. We have a real 
opportunity to promote the consumption of healthy foods. What 
we are doing now is not working. Employment, healthcare costs, 
military readiness, and general longevity are highly dependent 
on the foods we consume. U.S. stakeholders, together with 
policymakers, the Department, and other community organizations 
and local governments and recipients themselves are uniquely 
positioned to improve the health outcomes of millions of 
people. So, today, let's be bold. Let's rethink consumer 
education. Let's rethink how we can engage with recipients. And 
let's rethink how we use the billions of dollars attached to 
this program for better outcomes.
    So with that, Madam Chairwoman, I am glad this hearing is 
finally taking place, and I look forward to the testimony and 
my colleagues' questions. With that, I yield back.
    The Chairwoman. Thank you, Mr. Bacon. Let's be bold. I 
think we are on the same page.
    I now recognize Ranking Member Thompson for any opening 
comments you would like to make.

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

    Mr. Thompson. Madam Chairwoman, thank you so much. And 
thank you to each of our witnesses for your time and your 
testimony today.
    When the full Committee hosted the Administration several 
weeks ago, I mentioned my frustration with colleagues who have 
drawn a line in the sand about future title IV policymaking. 
Since then, the Congressional Budget Office released its 
baseline assumptions, which includes $1.1 trillion, 10 year 
score related to SNAP. So, I am doubling down today. There are 
things we can improve and probably even a few policies we can 
upend. We do not need to spend for the sake of spending or 
because it makes us feel better. If there is no impact or the 
impact is so minimal, how can we defend it?
    Like many of you, I have spent my life serving people, and 
sometimes our best intentions cause irreparable hardship for 
families that we aim to help. Spending more money for the sake 
of spending it does not necessarily mean we are achieving our 
desired results or outcomes. We have to be prescriptive in our 
investments to be successful.
    And, based on testimony that we will hear today, I also 
want to reiterate my concern that pandemic aid is morphing into 
endemic aid and that various issues caused by this 
Administration's own actions and at times inaction have 
stakeholders calling for permanent extensions. To say I 
disagree with those calls is an understatement. Let's have an 
honest discussion about where we have been and where we can go 
while keeping in mind the overarching goal of SNAP, to provide 
for improved levels of nutrition amongst low-income families, 
families that are struggling with financial distress.
    And with that, thank you so much. I am looking forward to 
the hearing, and I yield back.
    The Chairwoman. Thank you, Ranking Member Thompson, and 
thank you so much for being here today.
    The chair would request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony and to ensure there is ample time for questions.
    I am pleased to welcome a distinguished panel of witnesses 
to our hearing today. Our witnesses bring a wide range of 
experience and expertise, and I thank you all for joining us. 
Our first witness today is joining us virtually, Mr. Daniel 
Giacomi, the SNAP program administrator for the State of 
Connecticut, Department of Social Services. He leads the day-
to-day operations of the SNAP policy team and conducts 
oversight over the program in the State of Connecticut. This 
program helps over 217,000 households.
    Our second witness is Mr. Mike Beal, the Chief Financial 
Officer of Balls Food Stores. Today, he is testifying on behalf 
of the National Grocers Association, the only trade association 
dedicated to the needs of independent, community-focused 
grocery retailers.
    Our third witness is Mrs. Ty Jones Cox, the Vice President 
of Food Assistance Policy at the Center on Budget and Policy 
Priorities. In her role, she focuses on improving the 
effectiveness of the major Federal nutrition programs such as 
SNAP for low-income and middle-class families.
    I would like to welcome all of our witnesses here today. We 
will now proceed to hearing your testimony. You will each have 
5 minutes. The timer should be visible to you and will count 
down to zero, at which point your time has expired. We will 
begin with Mr. Giacomi.
    Mr. Giacomi, when you are ready, please unmute yourself and 
begin.
    Mr. Giacomi. Thank you, and good morning, Chairwoman Hayes, 
Ranking Members Bacon and Thompson, and distinguished Members 
of the Subcommittee. As the Chairwoman said, my name is Dan 
Giacomi, and I am the SNAP program administration manager for 
the Connecticut Department of Social Services. I am honored to 
appear before you----
    The Chairwoman. I am sorry, Mr. Giacomi, can you hold for a 
second?
    Mr. Giacomi. Sure.
    The Chairwoman. I am not sure what is happening.
    Okay. In the interest of time, I will go to Mr. Beal. We 
will have you begin so that we can work on the technical, and 
we will have Mr. Giacomi come up next.
    Mr. Beal, if you don't mind if you could begin, that would 
be great.

      STATEMENT OF MICHAEL J. BEAL, J.D., CHIEF FINANCIAL 
        OFFICER, BALLS FOOD STORES, KANSAS CITY, KS; ON 
             BEHALF OF NATIONAL GROCERS ASSOCIATION

    Mr. Beal. Sure. Good morning, Chairwoman Hayes, Ranking 
Member Bacon, and Members of the Nutrition, Oversight, and 
Department Operations Subcommittee. My name is Mike Beal, and I 
am currently the Chief Financial Officer of Balls Food Stores. 
Balls Food Stores currently owns and operates 26 retail grocery 
stores in the greater Kansas City, Kansas, and Missouri 
metropolitan area. We operate primarily under the Price Chopper 
and Hen House banners but have other stores as well. It is an 
honor and a privilege to be with you here today.
    I am testifying on behalf of the National Grocers 
Association, the trade association representing the independent 
grocery stores across this country. Balls Food Stores is a 
locally owned, third-generation, family-owned company started 
by Mollie and Sidney Ball in 1923. Our stores are full-service 
supermarkets and have accepted SNAP as a form of tender 
essentially since each location opened.
    We make a point of doing substantial business with about 
150 local family farmers located within 200 miles of Kansas 
City and have been doing so for more than 15 years. Independent 
grocers create markets for smaller producers, adding to the 
partnerships across our communities. My purpose today is to 
share with you the independent grocer's perspective on the 
value of SNAP and the importance of continued support of this 
program.
    In 2020, SNAP was responsible for nearly 200,000 U.S. 
grocery industry jobs, earning wages totaling more than $6.7 
billion. SNAP is a shining example of a public-private 
partnership that builds strong communities. SNAP not only works 
as it is intended, but it also features one of the lowest error 
rates of any Federal program in existence. Independent 
community grocers are the key private partners with the Federal 
Government to administer SNAP, and I can attest that the 
program is critical to the health of local communities.
    If it were not for SNAP, many local grocery stores would 
simply not exist in areas that need them most. Numerous urban 
and rural areas throughout the country are home to high 
concentrations of SNAP participants who rely on local grocery 
stores to access healthy and affordable foods. In many small 
towns, the local independent grocer is the only store in town 
that provides an anchor to the community.
    NGA supports continued access to SNAP and expanding access 
to include online purchasing. While 47 states have launched 
SNAP online purchasing, independent retailers face significant 
barriers offering the program to consumers. NGA supports 
expanding online SNAP purchasing in all states and providing 
resources to develop a secure, easy-to-use online and app-based 
portal for EBT redemption to support smaller retailers. 
Establishing a system to accept online SNAP payments is a 
lengthy and expensive process requiring specific point-of-sale 
technology and website functions. Additionally, we support the 
creation of a USDA Technical Assistance Center to facilitate 
online purchasing and the use of a portal for smaller 
retailers, direct-to-consumer farmers, and farmers' markets. We 
ask for the Committee's support to streamline the difficult 
process that is hindering independent supermarkets from 
enabling SNAP for online grocery purchases.
    In addition to increasing access, NGA supports increasing 
nutritional incentives to use SNAP benefits to purchase a 
variety of foods, including fruits and vegetables. We strongly 
believe this is a better solution than attempting to impose 
restrictions on choice. The dietary habits of SNAP and non-SNAP 
customers have been shown to be identical by the USDA. 
Consequently, restricting choice will not advance important 
public health goals. SNAP choice restrictions would require the 
Federal Government to identify, evaluate, and track the 
nutritional profile of the hundreds of thousands of foods that 
are available in today's grocery stores. It is far better to 
provide incentives such as the Gus Schumacher Nutritional 
Incentive Program, otherwise known as GusNIP, and the Healthy 
Food Financing Initiative. Empowering consumers to purchase 
healthy fruits and vegetables is a much more successful long-
term strategy to encouraging healthy eating than allowing the 
government to decide which food items a SNAP consumer may 
purchase.
    NGA supports reducing barriers for retailers to participate 
in the nutrition incentive programs. The main barrier that 
retailers often run into when trying to participate in SNAP 
incentives is technical challenges to developing a point-of-
sale system, or a POS, that automatically triggers a discount 
on produce based on EBT payment. This issue has actually 
prevented many retailers from even pursuing GusNIP projects. We 
suggest that these additional benefits be provided directly to 
EBT cards to simplify administration.
    The final issue I would like to mention is operational 
fees. NGA supports the prohibition on the EBT processing fees 
in section 4006(d) [of the 2018 Farm Bill] and urges its 
extension. We believe this provision will prevent state EBT 
processors from imposing excessive fees and strengthen the ban 
on interchange fees. We hope that section 4006(d) can serve as 
a solution to restore competition to the contracting process so 
that more reliable firms have a shot at state EBT processing 
contracts.
    In conclusion, we want to maintain our strong existing 
private-public partnership with the SNAP program that continues 
to serve our rural and urban customers. We hope to improve 
access to SNAP, including online purchasing, support customers 
in making healthy purchasing decisions, and reduce the 
administrative burden and fees on participating retailers.
    Thank you for the opportunity to discuss these important 
issues today. I look forward to your questions.
    [The prepared statement of Mr. Beal follows:]

 Prepared Statement of Michael J. Beal, J.D., Chief Financial Officer, 
   Balls Food Stores, Kansas City, KS; on behalf of National Grocers 
                              Association
    Good morning, Chairwoman Hayes, Ranking Member Bacon, and Members 
of the Nutrition, Oversight, and Department Operations Subcommittee. My 
name is Mike Beal, and I currently am the Chief Financial Officer of 
Balls Food Stores. I also spent 6 years as our first Chief Operating 
Officer. Balls Food Stores currently owns and operates 26 retail 
grocery stores in the greater Kansas City, Kansas and Missouri 
metropolitan area. We operate primarily under the Price Chopper and Hen 
House banners, but have other stores as well. It is an honor and a 
privilege to be here with you today.
    Balls Food Stores is a locally-owned, third generation, family 
owned company started by Mollie and Sidney Ball in 1923. Our company is 
currently led by David Ball, who follows his father, Fred Ball, a 
person who was known nationally in the grocery industry for his 
innovation, character and charity to our community. Our stores are all 
full-service supermarkets and have accepted SNAP as a form of tender 
essentially since each location opened.
    SNAP is a very important program for Balls Food Stores. Six of our 
stores have a high percentage of SNAP customers. Last year we opened a 
new store in an area that was previously described as a food desert, 
and the people who use it are very proud to have it available to them. 
We relied on a dependable SNAP program when making our investment 
choice and believe other independent grocers should be able to do the 
same.
    We also make a point of doing substantial business with about 150 
local farmers, and have been doing so for more than 15 years. 
Independent grocers create markets for smaller producers, adding to the 
partnerships across our communities.
    I am very proud to be here on behalf of the National Grocers 
Association. NGA is the only national trade association dedicated 
solely to the needs of independent, community-focused grocery retailers 
and operators. NGA represents the 21,000 independent community grocers 
and the wholesalers that service them. Independent community grocers 
account for 33 percent of all grocery sales, exceeding $250 billion, 
and more than one million American jobs. We are inherently tied to the 
strength and vitality of the markets we serve--at the heart of local 
communities and the U.S. economy. Having often been in the business for 
generations, independent grocers are dedicated to their customers, 
associates, and communities.
Overview
    My purpose today is to share with you the independent grocer's 
perspective on the value of SNAP and the importance of continued 
support for the program. In 2020, SNAP was responsible for nearly 
200,000 U.S. grocery industry jobs earning wages totaling more than 
$6.7 billion.
    SNAP is a shining example of a public-private partnership. SNAP not 
only works as it is intended but it also features one of the lowest 
error rates of any Federal program in existence. Independent community 
grocers are the key private partners with the Federal Government to 
administer SNAP and I can attest that the program is critical to the 
health of local communities.
    If it were not for SNAP, many grocery stores would simply not exist 
in areas that need them most. Numerous rural areas throughout the 
country are home to high concentrations of SNAP participants who rely 
on local grocery stores to access healthy and affordable foods. In many 
small towns, the local independent grocer is the only store in town and 
provides an anchor to the community.
    SNAP is very important in rural areas. An Economic Research Service 
report released last November found that SNAP generated larger relative 
impacts in the rural economy than in the urban economy. Household 
expenditures of SNAP benefits annually increased rural economic output 
by 1.25 percent and rural employment by 1.18 percent. For the urban 
economy, SNAP benefits increased economic output by 0.53 percent and 
employment by 0.50 percent. SNAP has a positive economic impact on 
local economies. For every dollar spent locally in the SNAP program, 
$1.80 in positive economic benefit is realized. This helps keep local 
economies stronger and recover more quickly from economic downturns. It 
also supports local jobs.
    SNAP was a crucial lifeline during the pandemic. The additional 
benefits provided to recipients help them get needed foods in a variety 
of ways. Many did so at traditional grocery stores. Others took 
advantage of the growing ability to redeem benefits with online 
purchases. NGA supports continued access to SNAP for needy, hungry 
Americans.
Online Purchasing
    While 47 states have launched SNAP online purchasing, independent 
retailers face significant barriers offering the program to customers. 
Establishing a system to accept online SNAP payments is a lengthy and 
expensive process, requiring certain point-of-sale technology and 
website functions. Additionally, the system requires USDA approval and 
must go through a testing process.
    NGA strongly supports legislative proposals to improve online SNAP 
programs advanced by this Committee as part of the reconciliation bill 
and those contained in H.R. 1413 and S. 313, the Expanding SNAP Options 
Act. In particular, we support efforts to require the Secretary of 
Agriculture to implement online SNAP purchasing in all states. We also 
support providing resources to develop and maintain a secure, easy-to-
use online and app-based portal for EBT redemption to support smaller 
retailers in offering products for online SNAP purchasing. And we 
support the creation of a USDA Technical Assistance Center to 
facilitate online purchasing and use of the portal for smaller 
retailers, direct-to-consumer farmers and farmers' markets. We also 
support this USDA Online SNAP TA Center sharing accurate, accessible 
information with the public about which local vendors participate in 
SNAP online purchasing.
    It is important for the Committee to recognize the challenges that 
independent grocers face in accessing online systems. Independent 
grocers wish to offer this service to their customers, and many have 
applied to FNS to participate. However, barriers to participation 
include technical challenges, financial constraints to launch and 
continuously operate the program, and a lengthy application and 
approval process.
    For many SNAP participants, the result is that the only options to 
use their benefits online are Amazon and Walmart. Yet, according to 
USDA Economic Research Service (ERS), independent grocers play an 
important role in helping to ensure food access for consumers, 
particularly in low-income and rural areas. ERS found that independent 
grocers outnumber chain grocery stores in rural areas and operate at 
higher rates in counties with a large share of Black and Hispanic 
citizens.
    NGA has had to expend significant effort and resources helping our 
members through the online purchasing program set up because of limited 
help from the government. NGA has developed a ``SNAP Online Purchasing 
Toolkit'' that outlines the steps retailers may take to accept SNAP 
Electronic Benefit Transfer (EBT) payments online. The purpose of the 
toolkit is to provide guidance to independent supermarket retailers in 
adding SNAP online purchasing as a payment they can support.
    We ask for the Committee's support to streamline the difficult 
process that is hindering independent supermarkets from enabling SNAP 
for online grocery purchases so that we may continue to furnish 
essential goods to the members of our communities most in need.
SNAP Incentives
    NGA supports increasing incentives for the use of SNAP benefits for 
the purchase of a variety of foods, including fruits and vegetables, a 
better solution in our view than attempting to impose restrictions on 
choice. The dietary habits of SNAP and non-SNAP customers have been 
shown to be nearly identical by USDA. Consequently, we do not believe 
that restricting choice will advance important public health goals.
    Additionally, SNAP choice restrictions would require the Federal 
Government to identify, evaluate and track the nutritional profile of 
the thousands of foods that are available in today's grocery stores, 
resulting in a complicated ``food code.''
    Currently no clear standard exists in the Federal Government for 
defining foods as good or bad, healthy or not healthy. With more than 
650,000 food and beverage products on the market today and more than 
20,000 introduced each year, creating those standards would be 
difficult, if not impossible. Defining foods as ``in'' or ``out'' means 
the government would pick winners and losers on grocery shelves and in 
grocery carts, increasing their influence over private enterprise and 
making decisions about what Americans can buy. According to USDA, 
establishing the nutritional profile of every food available would be a 
substantial undertaking. This expanded bureaucracy would mean 
increased, not decreased, administrative costs, without, we believe, 
any meaningful benefit for SNAP recipients.
    Managing a SNAP eligible foods list would be a difficult task that 
would have to be staffed, maintained and communicated to retailers, 
customers, and manufacturers on a real-time basis. NGA members 
typically operate on a one to two percent profit margin, so the added 
cost of such a policy would be extremely difficult for supermarkets 
that serve a low-income population. The added cost to the retailer and 
inevitable stigma it would create for our SNAP customers would cause 
many of NGA's members to drop out of the SNAP program entirely.
    It is far better to provide incentives such as the Gus Schumacher 
Nutrition Incentive Program (GusNIP) included in prior farm bills, as 
well as the Healthy Food Financing Initiative. Empowering consumers to 
purchase healthy fruits and vegetables prevents stigma and is a much 
more successful long-term strategy to encouraging healthy eating than 
allowing the government to decide which food items a SNAP consumer may 
purchase.
    Let me point out that the main barrier that retailers often run 
into is that it is technically challenging to develop a point of sale 
system (POS) system that automatically triggers a discount on produce 
based on the EBT payment tender that SNAP consumers use to purchase 
items using their monthly benefits. This issue has actually prevented 
many retailers from even pursuing GusNIP projects since it becomes so 
technically difficult to set up a program at the register. There is an 
immense need for a national Point of Sale (POS) solution for GusNIP, 
which will allow the program to expand and become scalable nationwide 
and get healthy foods into consumers' hands. We also suggest that these 
additional benefits be provided directly to EBT cards to simplify 
administration.
    NGA strongly supports the USDA's recent announcement to provide $25 
million to support SNAP technology improvements to modernize the 
delivery of nutrition incentive programs. These improvements will 
provide certainty for businesses that want to ensure their communities 
have access to nutrition incentives.
Thrifty Food Plan
    NGA applauded USDA's announcement to permanently increase monthly 
SNAP benefits by 27% beginning Oct. 1, 2021. The increase was required 
by the 2018 Farm Bill's provision to evaluate and update the Thrifty 
Food Plan (or TFP) by 2022. This is the first time that TFP has been 
updated with a major change since 1975. This benefit adjustment is 
overdue, and comes at a time when most needed.
Operational Fees
    Two of the most impactful payments trends for grocery and other 
retail industries have, unfortunately, led to more costs for merchants: 
the growth in debit card usage and a rise in card-not-present 
transactions. And with the costs of card acceptance growing, we urge 
regulators and Congress to renew your interest in identifying the bad 
actors that continue to game the system and leave merchants holding the 
bag. Independent grocers operate on very thin margins. While we all 
want to make purchasing as convenient as possible, any fee that 
increases costs to grocers risks being passed on to consumers in the 
form of higher prices.
    NGA supports the prohibition on EBT processing fees in Sec. 
4006(d), and urges its extension. We believe this provision will 
prevent state EBT processors from imposing excessive fees and 
strengthen the ban on interchange fees. Additionally, EBT outages 
damage retailers' ability to sell food to low-income SNAP customers, 
who are impacted the most during outage scenarios. Little evidence 
suggests that state EBT processors have taken the appropriate steps to 
resolve this problem and outages are only becoming more and more 
frequent. We hope that Section 4006(d) can serve as a solution to 
restore competition to the contracting process so that more reliable 
firms have a shot at state EBT processing contacts.
    In conclusion, we want to work to maintain our strong existing 
public-private partnership with the SNAP program and continue to serve 
our rural and urban customers. We hope to improve online purchasing and 
do as much as possible to provide incentives for consumers to make 
better purchasing decisions. We want to maintain benefit levels as much 
as possible. And we would like to provide responsible control of 
operational fees in order to make sure even more retailers are able to 
provide services.
    We commend Congress for recent efforts to support a White House 
Conference on Food, Nutrition, Hunger, and Health. NGA plans to 
participate in this conference and we expect to support these SNAP 
reform proposals as part of our recommendations for the conference.
    [Madam Chairwoman,] you have the special opportunity to serve on 
both this Committee as well as the Education and Labor Committee with 
jurisdiction over the child nutrition programs. We all know that a good 
breakfast is the best way to start the day, and that a good evening 
meal can be a reward for a day well spent. Let us do all that we can to 
allow as many people as possible to share in these blessings.

    The Chairwoman. Thank you so much. We will now go virtually 
to Mr. Giacomi. If you are ready, please begin.

        STATEMENT OF DANIEL R. GIACOMI, SOCIAL SERVICES 
          PROGRAM ADMINISTRATION MANAGER, CONNECTICUT 
          DEPARTMENT OF SOCIAL SERVICES, HARTFORD, CT

    Mr. Giacomi. Good morning, Chairwoman Hayes, Ranking 
Members Bacon and Thompson, and distinguished Members of the 
Subcommittee. My name is Dan Giacomi, and I am the SNAP program 
administration manager for the Connecticut Department of Social 
Services. I am honored to appear before you today to offer 
testimony concerning this critical and successful program 
utilized by millions of Americans each month.
    In Connecticut, we currently provide SNAP assistance 
monthly to more than one in ten residents residing in all 169 
towns. Through this, we see that SNAP significantly reduces 
food insecurity in our state and is one of the most effective 
tools at our disposal to boost the food industry and broader 
economy quickly and efficiently, especially in times of 
economic downturn. We also see how SNAP improves health 
outcomes and supports individuals in all aspects of life by 
providing essential nutrition and supports to its recipients.
    First, we would like to commend Congress for the actions 
taken in the 2018 Farm Bill that gave Connecticut the tools we 
so critically needed to meet the unprecedented and unexpected 
challenges we have faced in recent years. In addition, the 
temporary flexibilities Congress enacted to increase SNAP 
benefits and adjust administrative rules early in the public 
health emergency meant that we could preserve access to 
meaningful food assistance for families while operating under 
the social and economic disruptions experienced early in the 
pandemic. We firmly believe that the actions Congress took were 
fundamental to SNAP being one of the true success stories of 
our country's pandemic response.
    Food insecurity in Connecticut, like many states, rose 
significantly as a result of the COVID-19 pandemic. Results 
from a report published in September 2021 by our partners at 
Connecticut Foodshare showed an overall 31 percent increase in 
food insecurity 1 year into the pandemic in our state.
    As you look ahead to the next reauthorization of the farm 
bill, our experiences administering the SNAP program both 
during the 2018/2019 government shutdown and the subsequent 
pandemic have demonstrated the value and importance of program 
innovations, some of which I believe should be made permanent, 
but has also revealed additional steps that could be taken to 
strengthen the program in the future, making it more resilient 
in times of greater need and better able to include groups that 
have long been overlooked. Significant improvements can and 
should be considered in areas that would foster innovation, 
streamline service delivery, and simplify the administration of 
the program, as well as ensure its integrity and stability.
    While not a comprehensive list, I will briefly touch on 
areas in which I believe this Committee and Congress should 
consider during the reauthorization. First and foremost, it is 
critical that we preserve access to broad-based categorical 
eligibility and the alignment of services with programs such as 
TANF and the National School Lunch Program, as doing so greatly 
simplifies access to SNAP, especially for working families, 
seniors, and people with disabilities.
    Second, we should build upon and make permanent proven 
demonstration projects which streamline access to SNAP for 
vulnerable households while simultaneously cutting down on 
administrative expenses and increasing timeliness of case 
processing.
    Next, we need to modify and expand the policies around 
access to SNAP benefits for college students and veterans with 
disabilities and allow for the purchase of hot or prepared 
foods outside of the Restaurant Meals Program. Allowing 
purchases such as the salad bar in grocery stores or the often-
talked-about rotisserie chicken would give these individuals 
and all SNAP recipients the same flexibilities that other 
Americans depend upon.
    Finally, the adaptations made over the past 2 years in 
response to the public health emergency have helped us better 
understand ways we can adjust program rules to meet the needs 
of our customers more flexibly. Opportunities are needed to 
further test and evaluate innovative approaches to SNAP 
administrative functions, such as cross-enrollment with other 
means-tested programs to provide space for states to transition 
out of the public health emergency, leveraging the lessons we 
have learned.
    At the same time that we focus on commonsense approaches to 
simplifying SNAP, states are committed to maintaining program 
integrity as a top priority. Looking ahead, Congress can assist 
states in their efforts to promote program integrity by helping 
equip them with tools that maintain accuracy and prevent fraud 
in the program. For example, I urge the Committee to support 
the USDA in advancing strategies that help states use third-
party income databases to quickly identify earned income of 
SNAP participants, both improving program integrity and 
streamlining the enrollment process for households.
    Coming out of the COVID-19 pandemic during a time when our 
aging workforce continues to grow and the number of individuals 
leaving the workforce increases, as well as the time where the 
farm bill is up for reauthorization, we collectively are at an 
inflection point where we have both tremendous opportunities to 
modernize and streamline the SNAP program to provide more 
equitable and effective services while also facing significant 
workforce challenges and complex requirements that threaten to 
stymie progress.
    Thank you for your time and your work on this critical 
program.
    [The prepared statement of Mr. Giacomi follows:]

   Prepared Statement of Daniel R. Giacomi, Social Services Program 
  Administration Manager, Connecticut Department of Social Services, 
                              Hartford, CT
    Good morning, Chairwoman Hayes, Ranking Member Bacon, and 
distinguished Members of the Subcommittee. My name is Daniel R. 
Giacomi, and I am the Supplemental Nutrition Assistance Program (SNAP) 
Program Administration Manager for the Connecticut Department of Social 
Services (DSS). I am honored to appear before you today to offer 
testimony concerning a stakeholder's perspective on SNAP.
    DSS is the state agency responsible for administering SNAP in 
Connecticut. We currently provide SNAP assistance to one in ten 
Connecticut residents--approximately 373,000 individuals in over 
217,000 households in all 169 towns. As the SNAP administrator in 
Connecticut, DSS has first-hand knowledge of the complexities involved 
in determining eligibility for SNAP as well as creating and 
implementing SNAP policies, especially in comparison to other means-
tested programs. SNAP eligibility is complicated largely because SNAP 
relies upon multiple eligibility factors and deductions and provides a 
benefit on a sliding scale rather than a flat grant. This experience 
informs our perspective on the administration changes to the program in 
the 2018 Farm Bill. But, more importantly, DSS has first-hand knowledge 
of how SNAP significantly reduces food insecurity in our state and 
stimulates local economies--particularly during times of economic 
downturns--as well as how SNAP improves health outcomes and supports 
individuals in all aspects of life, by providing essential nutrition to 
many working families, children, and elderly adults.
    We would like to commend Congress for the actions taken in the 2018 
Farm Bill and in the ensuing years that gave Connecticut the tools we 
so critically needed to meet the unprecedented challenges we have faced 
in recent years. In addition, the temporary flexibilities Congress 
enacted to increase SNAP benefits and adjust administrative rules early 
in the public health emergency meant that Connecticut DSS could 
preserve access to meaningful food assistance benefits for families 
while operating under the social and economic disruptions we 
experienced early in the pandemic. As we continue to phase out these 
flexibilities, Congress' foresight in the 2018 Farm Bill to direct USDA 
to update the Thrifty Food Plan is now helping SNAP benefits better 
keep pace with the rising cost of food in our country. This has 
undoubtedly supported the health and well-being of millions of 
Americans, but also was key to supporting local retailers in the 
economic recovery. SNAP remains one of the most effective tools at our 
disposal to boost the food industry and broader economy quickly and 
efficiently. We firmly believe that the actions Congress took were 
fundamental to SNAP being one of the true success stories of our 
country's pandemic response.
    Food insecurity in Connecticut, like many states, rose 
significantly as a result of the COVID-19 pandemic, as evidenced in a 
report published in September 2021 by our partners at CT Foodshare's 
Institute for Hunger & Research Solutions.\1\ Results from this study 
showed an overall 31% increase in food insecurity 1 year into the 
pandemic. Food insecurity was also greater in respondent households 
with children under age 18 (44%) compared to respondent households 
without a child (24%) and is greater in respondent households with 
people of color (43%) compared to respondent households where all 
members are white (26%).\1\ Heightened food insecurity is also 
demonstrated by the volume of applications for SNAP assistance that we 
have received since the start of the pandemic. During the early days of 
the pandemic, DSS experienced a high of nearly 4,700 applications 
arriving weekly, a 330% increase from the number of SNAP applications 
received weekly in the period directly preceding the start of the 
pandemic, and we continue to receive over 3,000 applications per week a 
176% increase from the number of SNAP applications received weekly in 
the period directly preceding the start of the pandemic.
---------------------------------------------------------------------------
    \1\ https://www.ctfoodshare.org/wp-content/uploads/2021/09/Food-
Access-In-Connecticut-Report.pdf.
---------------------------------------------------------------------------
Reflection on the 2018 Farm Bill
    The 2018 Farm Bill has helped state agencies strengthen the impact 
of SNAP in many ways, both here in Connecticut and nationwide. First, 
as previously mentioned, the 2018 Farm Bill triggered a review of the 
Thrifty Food Plan (TFP), the first review in 46 years. For context, 
when the previous review was undertaken, a loaf of bread was $0.28, a 
dozen eggs cost $0.77, and milk was $1.40 per gallon. The TFP review 
resulted in a modest increase in SNAP benefits equating, generally, to 
between $12 and $16 per person, per month. While this may not seem like 
an enormous increase to some, it was especially important at a time 
when the pandemic closed businesses and shut down offices, causing many 
individuals to lose work, be furloughed, or experience reduced hours, 
which in turn made them unable to meet their families' needs. Research 
from the previously mentioned CT Foodshare report showed that, 1 year 
since the onset of the pandemic, approximately \1/3\ of Connecticut 
residents were still experiencing a job disruption, with many changing 
shopping frequencies or purchasing habits, or relying on SNAP 
assistance. In addition, of the responses received in this report, 22% 
of the households indicated that they received SNAP benefits in the 3 
months prior with nearly half of those respondents also said they had 
to seek additional food assistance, such as going to a food pantry, 
because their monthly SNAP benefits ran out before they received 
more.\1\ While we continue to make progress recovering from the 
economic disruption of the pandemic, we now face record inflation 
placing further strain on the shoulders of families trying to feed 
their families. The greatest increase in food costs have come in food 
prepared at home, where costs as of March of this year are 10% more 
than they were last year.\2\ That is why I believe the long-overdue 
review of the TFP was necessary and timely.
---------------------------------------------------------------------------
    \2\ https://www.bls.gov/news.release/cpi.nr0.htm.
---------------------------------------------------------------------------
    In addition to directly alleviating hunger at a time of significant 
societal disruption, the modest increase to the SNAP benefit resulting 
from the TFP review was important for broader economic and public 
health reasons. Research has shown that when SNAP benefits are 
increased, food expenditures increase, and when SNAP benefits are 
decreased, such as after the expiration of the SNAP benefit increase 
from the American Recovery and Reinvestment Act of 2009, food 
expenditures also decline, decreasing the affordability of a healthy 
diet.\3\ Additionally, it is known that when food insecurity is 
reduced, people are less likely to suffer from chronic illnesses such 
as Type 2 Diabetes, hypertension, high cholesterol, and heart and 
kidney disease. Additionally, ``access to [SNAP] in childhood leads to 
a significant reduction in the incidence of `metabolic syndrome' 
(obesity, high blood pressure, and diabetes) and, for women, an 
increase in economic self-sufficiency.'' \4\ Conversely, food 
insecurity is directly linked to poorer general and mental health.\5\ 
In fact, a study done by the USDA found that, in some cases, the level 
of a person's food security was an even greater predictor of chronic 
illness than income. ``Income is significantly associated with only 
three of the ten chronic diseases--hepatitis, arthritis, and COPD--
while food insecurity is significantly associated with all ten,'' \6\
---------------------------------------------------------------------------
    \3\ Steven Carlson. More Adequate SNAP Benefits Would Help Millions 
of Participants Better Afford Food. Center on Budget and Policy 
Priorities. July 30, 2019. https://www.cbpp.org/research/food-
assistance/more-adequate-snap-benefits-would-help-millions-of-
participants-better.
    \4\ Hilary W. Hoynes, Diane Whitmore Schanzenbach, and Douglas 
Almond. Long Run Impacts of Childhood Access to The Safety Net. [NBER] 
Working Paper Series. November 2012. https://www.nber.org/system/files/
working_papers/w18535/w18535.pdf.
    \5\ Steven Carlson and Brynne Keith-Jennings. SNAP Is Linked with 
Improved Nutritional Outcomes and Lower Health Care Costs. Center on 
Budget and Policy Priorities. January 17, 2018. https://www.cbpp.org/
research/food-assistance/snap-is-linked-with-improved-nutritional-
outcomes-and-lower-health-care.
    \6\ Christian A. Gregory, Alisha Coleman-Jensen. Food Insecurity, 
Chronic Disease, and Health Among Working-Age Adults, ERR-235. U.S. 
Department of Agriculture, Economic Research Service. July 2017. 
https://www.ers.usda.gov/webdocs/publications/84467/err-235.pdf?
v=1071.6.
---------------------------------------------------------------------------
Predicted prevalence of more common chronic diseases by food security 
        status, adults in low-income households
        
        
          COPD = chronic obstructive pulmonary disease.
          Source: USDA, Economic Research Service calculations using 
        National Health Interview Survey data 2011-2015. Predicted 
        prevalence estimates are adjusted for: survey year indicators, 
        age, gender, employment, marital status, race/ethnicity, 
        insurance status, highest education of any adult in household, 
        number of children, family size, and household income-to-
        poverty ratio. Sample includes working-age adults in households 
        at or below 200 percent of the Federal poverty line.

    Improving access to nutritious food, in turn, leads to reduced 
healthcare spending, reduced likelihood of hospital visits, and overall 
better long-term health outcomes. In research released by USDA, 88% of 
SNAP participants reported facing at least one barrier to achieving a 
healthy diet throughout the month, with the most common barrier 
(reported by 61% of SNAP participants) being the affordability of 
healthy foods such as lean meat and fresh fruits and vegetables.\7\ 
Increasing families' ability to afford nutritious food also brings 
better long-term health outcomes to future generations, as children who 
receive SNAP have improved health outcomes and higher educational 
attainment when compared to children not in SNAP households.\5\
---------------------------------------------------------------------------
    \7\ USDA Food and Nutrition Service. Barriers that Constrain the 
Adequacy of Supplemental Nutrition Assistance Program (SNAP) 
Allotments. June 23, 2021. https://www.fns.usda.gov/snap/barriers-
constrain-adequacy-snap-allotments.
---------------------------------------------------------------------------
    The second area of the 2018 Farm Bill that I wish to touch on is 
the investment and changes in the SNAP Employment and Training (E&T) 
program. The Connecticut SNAP population is a diverse group with 
varying degrees of work readiness. In response, DSS' voluntary SNAP E&T 
program is designed to help SNAP recipients gain valuable skills needed 
for self-sufficiency. Connecticut's SNAP E&T program meets the wide 
range of work-related services needed by its SNAP participants by 
offering over 60 short-term vocational programs that are job focused 
and employer driven. Offerings range from 1 day security guard programs 
to 2 year associates degrees. In Connecticut, these activities are 
delivered through diverse partnerships with nonprofit community-based 
organizations and a private nonprofit college. In addition, in 2018, 
Connecticut became one of the first states in the nation to partner 
with every community college within the state's college and university 
system, a process that began in 2011 and has become the pillar of our 
SNAP E&T program. With the flexibilities afforded through the 2018 Farm 
Bill, we are now exploring additional partnerships in the areas of pre-
apprenticeships, apprenticeships and subsidized employment, services 
that we were unable to offer until the recent farm bill changes. 
However, because income from participating in these programs would 
often result in individuals becoming ineligible for SNAP, we are unable 
to support many participants through their successful completion of job 
training programs. To help ensure SNAP E&T can be more effective in 
helping families succeed for the long-term, I urge Congress to revisit 
ways we can tackle benefit cliffs by disregarding income while 
households participate in SNAP E&T programs.
    Also, as required by the 2018 Farm Bill, Connecticut's SNAP E&T 
partners now provide case management services that are unique to SNAP 
E&T participants and help each participant succeed in their employment 
and training activities. These services include employability 
assessments, individualized service plans, progress monitoring, monthly 
case notes, and coordination with other service providers as well as 
referrals for Adult Basic Education or other support services that 
enable the participant to remain engaged in his or her employment or 
training activity. The on-site case management services identify, and 
address barriers faced by participants. Providing these additional 
supportive services and removing barriers supports participants' 
completion of their SNAP E&T program and has produced many success 
stories in the Connecticut E&T program.
    One recent success story involves a 39 year old enrollee residing 
in Hartford, Connecticut who was a participant of Capital Workforce 
Partners' Integrated Basic Education and Skills Training (BEST Chance) 
program. The BEST Chance Program is an initiative that provides 
manufacturing, construction, carpentry, and culinary training for 
individuals attempting to re-enter the work force after incarceration 
with an emphasis on 18-24 year old individuals in the Hartford area. 
This particular individual registered with the SNAP E&T program's 3 
month pre-manufacturing course at Manchester Community College in 
September 2019, looking for a second chance and hoping to gain self-
sufficiency through a new career. After completing training, she began 
her supervised job search phase and endured multiple rejections due to 
a previous felony record. In spite of the rejections, she persevered 
and, with the assistance of the SNAP E&T program and Capital Workforce 
Partners, continued to look for manufacturing jobs. In April 2020, she 
secured an employment offer from Boat Works of South Windsor, Inc. 
despite the uncertain work environment caused by COVID-19. She is 
making above minimum wage in Connecticut and is hoping that her hard 
work and perseverance will continue to move her forward in her new 
profession.
    Another such success story involves a young woman living in New 
Haven County. Having already obtained her bachelor's degree, she was 
enrolled in an MBA program and working as a bank teller, both part-
time, when she became pregnant with her first child, who was born in 
March 2016. She transferred to an accelerated MBA program, and her 
second son was born in 2017. Being both a full-time student and mother 
to two young children became a challenge, and she had to quit her job 
and apply for SNAP benefits. She persevered and obtained her MBA in 
2018. However, with no recent work history, finding employment in her 
field was difficult. She finally found employment; first a sales job, 
and next as an operations manager at Michaels on her way to her ``dream 
Job'': Senior Operations Manager at Amazon. She applied, 
unsuccessfully, for several Amazon positions that often required Six 
Sigma Certification, which she did not have. She then remembered and 
enrolled in Gateway Community College's SNAP E&T Business Professional 
and Office Assistant Training Certification program which included Six 
Sigma White Belt Certification. Through this program, she was hired by 
Amazon in October 2020 and is currently an Operations Manager II, on 
her way to her dream job.
    It is through this Committee's funding and support for the SNAP E&T 
program in the 2018 Farm Bill that these individuals and others like 
them have been able to achieve goals they once thought unattainable.\8\ 
But SNAP E&T remains a program that is early in its growth and there 
remains opportunity for us to do more. With additional 100% SNAP E&T 
funding appropriated by Congress, Connecticut could increase the number 
of community providers, types of services, and percentage of SNAP 
participants reached. In addition, there's more we can do to make work 
pay and support SNAP participants working in earnest to achieve family-
sustaining wages. While our ability to offer apprenticeships and 
subsidized employment is a critical new tool provided to SNAP E&T 
programs through the 2018 Farm Bill, many SNAP households would lose 
their eligibility as a result of participating in such a program. As 
noted previously, Congress can help mitigate benefit cliffs and support 
SNAP recipients' long-term success by excluding income from these SNAP 
E&T components while participants work towards the goal of self-
sufficiency.
---------------------------------------------------------------------------
    \8\ https://portal.ct.gov/DSS/SNAP/SNAP-Employment-and-Training/
Success-Stories.
---------------------------------------------------------------------------
    A third change made by the 2018 Farm Bill that has been of 
significant importance during the past 24 months concerns the expanded 
approval of access to online purchasing for redeeming SNAP benefits. At 
the beginning of the COVID-19 public health emergency, when families 
stayed home to help our state stop the spread of the virus, DSS was 
inundated with phone calls, emails, and letters from individuals across 
the state looking for ways to safely obtain groceries, particularly for 
households that included children or elderly individuals as well as 
those households that included disabled or immunocompromised 
individuals. The pandemic exacerbated an existing issue for many SNAP 
households: limited access to transportation and availability of nearby 
grocery-store options.
    Thankfully, a move towards online purchasing was already underway 
at the beginning of the pandemic because the 2014 Farm Bill authorized 
a pilot program to test online purchasing, and the 2018 Farm Bill moved 
it towards nationwide implementation. Accordingly, there was already a 
framework of SNAP-participating vendors who were able to rapidly scale 
up the online-purchasing pilot such that an estimated 90% of SNAP 
participants lived in states that had implemented the pilot by June of 
2020, including Connecticut.\9\ In Connecticut, the online purchasing 
pilot began with three retailers and has since expanded to ten, 
including both local and national retailers as well as a partnership 
with a nationwide grocery delivery service. This pilot provided a 
critical opportunity for states to experiment and modernize services in 
a way that has proven to be beneficial for clients and for the 
country's overall public health. 49 states, as well as the District of 
Columbia, have now signed on to participate and offer this critical 
tool to their residents, with the majority having done so by the end of 
2020. As access to the pilot expanded during 2020, so did use of online 
SNAP purchasing. In February 2020, the earliest month for which data is 
available, households redeemed less than $3 million in SNAP benefits 
online, accounting for less than 0.1% of all benefits redeemed that 
month. This value grew exponentially through June 2020, when online 
SNAP and P-EBT redemptions totaled $154 million, or 1.6% of total 
redemptions. Online redemptions grew each subsequent month through 
December 2020 to $246 million--86 times the value in February.\9\
---------------------------------------------------------------------------
    \9\ Jordan W. Jones. Online Supplemental Nutrition Assistance 
Program (SNAP) Purchasing Grew Substantially in 2020. July 06, 2021. 
https://www.ers.usda.gov/amber-waves/2021/july/online-supplemental-
nutrition-assistance-program-snap-purchasing-grew-substantially-in-
2020.
---------------------------------------------------------------------------
Monthly online SNAP and P-EBT benefit redemptions grew as the SNAP 
        Online Purchasing Pilot expanded to almost all States in 2020
        
        
          Notes: SNAP = Supplemental Nutrition Assistance Program. P-
        EBT = Pandemic Electronic Benefit Transfer. ``Benefits redeemed 
        online'' excludes the value of transactions made online in 
        which benefits are redeemed in-person at time of grocery 
        pickup. ``States with Online Purchasing Pilot'' denotes the 
        number of states (including D.C.) where the SNAP Online 
        Purchasing Pilot was operational on or before the last day of 
        the month.
          Source: USDA, Economic Research Service using data from USDA, 
        Food and Nutrition Service.

    However, this pilot is not without its challenges. The biggest 
being that at the moment participants must pay out of their own pocket 
for delivery, convenience, or service fees which, over time, may 
disproportionately impact elderly and disabled individuals and others 
with mobility barriers. These charges can vary greatly depending on 
order size, membership or subscription plans, flat rates, etc. In 
addition, placing an order online is difficult without a bank account 
or access to credit, because having a debit or credit card apart from a 
SNAP EBT card is often needed to cover delivery fees and other 
fees.\10\ This issue is exacerbated by the fact that, for the majority 
of states operating in the pilot, we still do not have the ability to 
allow our SNAP participants to use any non-SNAP cash funds that they 
may have associated with their EBT account for these purchases. I urge 
the Committee to direct USDA to establish a demonstration project that 
explores subsidizing fees fully or partially for purchases made online 
with SNAP benefits in order to support additional access to online food 
options for those who are often most in need of those services.
---------------------------------------------------------------------------
    \10\ Lagisetty P., Flamm L., Rak S., Landgraf J., Heisler M., 
Forman J. A Multi-stakeholder Evaluation of the Baltimore City Virtual 
Supermarket Program. BMC Public Health. 2017; 17(1): 837.
---------------------------------------------------------------------------
Looking Ahead: The 2023 Farm Bill
    The next reauthorization of the farm bill presents the opportunity 
to review the program with the benefit of the lessons learned during 
the temporary government shutdown of 2019 as well as the COVID-19 
pandemic that began in 2020. The experience of administering the 
program during the shutdown and the pandemic has demonstrated the value 
and importance of program innovations, some of which should be made 
permanent, but has also revealed additional steps that could be taken 
to strengthen the program in the future, making it more resilient in 
times of greater need and able to include vulnerable groups that have 
long been overlooked. Significant improvements can and should be 
considered in areas that would foster innovation, streamline service 
delivery, and simplify the administration of the program, as well as 
ensure its integrity and stability.

   First and foremost, it is critical that we preserve access 
        to Broad-Based Categorical Eligibility (BBCE) and the alignment 
        of services with programs such as TANF and the National School 
        Lunch Program as doing so greatly simplifies access to SNAP 
        especially for working families, seniors, and people with 
        disabilities. BBCE directly benefits nearly 65,000 low-income 
        Connecticut residents, 35% of whom are aged birth--18, as well 
        as millions of Americans across the vast majority of states 
        that rely on this flexibility. It helps working families by 
        eliminating a ``benefit cliff'' and lets low-income households 
        accrue savings to avoid debt, prepare for unexpected events, 
        and become self-sufficient. In addition, it reduces the 
        administrative burden on states processing SNAP applications, 
        changes, and renewals which correlates to a direct reduction in 
        SNAP administrative costs per case of which the state and 
        Federal Government each pay a share.

   Second, we should build upon and make permanent proven 
        demonstration projects, such as the Elderly Simplified 
        Application Project (ESAP) and Combined Application Project 
        (CAP), which streamline access to SNAP for vulnerable 
        households while simultaneously cutting down on administrative 
        expenses and increasing timeliness of case processing. In 
        addition, other means-tested programs such as TANF, Medicaid, 
        or WIC should be looked at to determine whether cross 
        enrollment, or automatic enrollment, would be appropriate and 
        efficient in ensuring individuals receive all of the assistance 
        they need without the burden of filling out multiple 
        applications and providing the same verifications multiple 
        times, again reducing the SNAP administrative costs per case 
        rates.

   We also need to modify and expand the policies around access 
        to SNAP benefits for college students and Veterans with 
        disabilities. With the demographic makeup and rising expenses 
        faced by the college student population as well as increase in 
        Veterans of working-age with a service-connected disability, 
        more should be done to ensure these individuals do not go 
        hungry. In a report published in February 2020, \1/3\ of all 
        respondents at the University of Connecticut reported low or 
        very-low-food security as measured by items from the USDA's 
        standard assessment tool. This same report showed that students 
        who are food-insecure were more likely to report that they have 
        missed class, missed assignments, and have considered dropping 
        out.\11\ In response to the COVID-19 pandemic, The Consolidated 
        Appropriations Act of 2021 temporarily expanded student 
        eligibility to students applying for SNAP benefits who were are 
        eligible to participate in a state or federally funded work 
        study, as well as those who have an expected family 
        contribution (EFC) of $0, exemptions not otherwise offered to 
        this population. Through partnerships with our colleges and 
        universities, DSS was able to quickly identify and provide 
        direct outreach to nearly 27,600 students in Connecticut that 
        fit these categories and otherwise may not have been eligible 
        for SNAP benefits. Likewise, in a recent USDA study, it was 
        found that food insecurity was 22.5% higher among disabled 
        working-age Veterans than the average for all working-age 
        Veterans. This is significant in that in 2019, over 13 million 
        Veterans were of working age and one of the fastest growing and 
        youngest groups of Veterans--those who served after September 
        11, 2001--is more likely to have a service-connected disability 
        than Veterans from other service periods.\12\ While DSS does 
        provide support and SNAP outreach assistance in areas such as 
        stand-down events, we believe an expansion of SNAP eligibility 
        to more service-connected disabled, elderly and housebound 
        Veterans will help to ensure those individuals have the support 
        and access to food that they deserve.
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    \11\ https://senate.uconn.edu/wp-content/uploads/sites/1323/2020/
03/2020-0302-Student-Affairs-Handout.pdf.
    \12\ https://www.ers.usda.gov/webdocs/publications/101269/err-
829.pdf?v=6491.5.

   Allow for the purchase of hot/prepared foods outside of the 
        Restaurant Meals Program. Since the passage of the Food Stamp 
        Act in 1964, Americans' shopping and eating habits have 
        evolved, and SNAP families need convenience and faster meal-
        preparation. In addition, the rule, as it is currently 
        interpreted does not consider whether the food will or even can 
        be consumed on premises or taken home to be eaten. This 
        restriction is most harmful to our homeless population that 
        often do not have the means to prepare their foods, as well as 
        those recovering from a natural disaster or event that renders 
        their home uninhabitable and therefore lack convenient access 
        to a kitchen or the ability to heat up foods. These families 
        are among those most in need and most struggle with the ability 
        to utilize their benefits. Instead, they rely upon the 
        ingenuity and kindness of store owners and clerks to resort to 
        loopholes such as the complimentary heating of food after 
        purchase. Also, it was evident at the onset of the pandemic, 
        when grocery stores were struggling to keep shelves stocked, 
        that the inability to purchase hot and prepared foods was a 
        major problem for SNAP participants. Allowing the purchase of 
        hot or prepared foods outside of a fast-food setting, such as 
        the salad bar in grocery stores and supermarkets, or the often 
        talked about rotisserie chicken, would give these individuals 
        and all SNAP recipients the same flexibility that other 
        Americans depend upon.
        
        

   Finally, the adaptations made over the past 2 years in 
        response to the public health emergency have helped us better 
        understand ways we can adjust program rules to meet the needs 
        of our customers more flexibly. Opportunities are needed to 
        further test and evaluate innovative approaches to interviews, 
        change reporting, Periodic Report Forms, and telephonic 
        signatures to provide space for states to transition out of the 
        public health emergency leveraging the lessons we have learned. 
        For example, many states already operate Combined Application 
        Projects (CAP), state-demonstration programs that aim to 
        increase SNAP participation among SSI recipients by enrolling 
        them automatically into SNAP. These ``demonstration projects'' 
        have been operating for 27 years and have proven very 
        successful in increasing food stamp participation among SSI 
        recipients. However, it is severely underutilized with only 17 
        states having some version of the CAP in place. This should 
        become a regular component of the program with no cost 
        neutrality, a provision in demonstration projects where states 
        have to evaluate data to ensure the project should not cost 
        more than it would have cost to add new participants under the 
        regular SNAP program. In addition, other means-tested programs 
        such as TANF, Medicaid, or WIC should be looked at to determine 
        whether cross enrollment, or automatic enrollment, would be 
        appropriate and efficient in ensuring individuals receive all 
        of the assistance they need without the burden of filling out 
        multiple applications and providing the same verifications 
        multiple times to multiple agencies. This is especially 
        important as state agencies, like many industries, face 
        challenges in recruiting and retaining staff. Collectively, we 
        need to think differently about the way we properly invest in 
        technology and partnerships to ensure we continue to deliver on 
        our core mission while doing more with less. Of similar 
        importance is the alignment of QC process with those processes 
        used to determine eligibility would ensure fair, accountable, 
        and equitable processes for both the states and those we serve.

    At the same time that we focus on common sense approaches to 
simplifying SNAP, states are committed to maintaining program integrity 
as a top priority. The public health emergency forced Connecticut to 
temporarily adapt many of our program rules to ensure families could 
continue to access their benefits safely and reliably. But through it 
all, we have continued to prioritize conducting quality control 
reviews, completing reviews both on the Federal and state levels 
throughout the pandemic, and participating in quarterly trainings with 
FNS staff in a multitude of QC areas including Able-Bodied Adults 
Without Dependents (ABAWDs). In fact, we have doubled down on these 
investments, adding five new review staff members in the past year, and 
resuming a state process on hold since 2016 that requires DSS 
eligibility supervisors to each review at least 20 SNAP cases each 
month processed by both new and seasoned staff members to ensure robust 
case reviews are completed and program integrity remains at the 
forefront. As we get closer to the end of the public health emergency 
and approach a new normal in our program operations, we are in a strong 
position to continue our progress maintaining program integrity as we 
see it already providing results seen in the USDA's current posted 
payment error rates showing Connecticut's FY2022 error rate well below 
the national average.
    Looking ahead, Congress can assist states in their efforts to 
promote program integrity by helping equip them with tools that help 
maintain accuracy and prevent fraud in the program. I applaud Congress 
for the investments made in the 2018 Farm Bill to create a National 
Accuracy Clearinghouse (NAC) that helps states identify and pursue 
individuals that seek to obtain SNAP benefits in multiple states, a 
process manually done today via email and faxed requests. The early 
efforts to scale this project have been promising and Connecticut looks 
forward to utilizing the lessons learned from the pilot states as we 
integrate our eligibility system into the NAC as it becomes nationwide. 
I also urge the Committee to support the USDA in advancing strategies 
that help states make optimal use of third-party income databases that 
can quickly identify earned income of SNAP participants, both improving 
program integrity and streamlining the enrollment process for 
households. Lastly, as fraudsters find new ways to steal SNAP 
participants' benefits through tactics such as identify theft and card 
cloning or skimming, Congress can help support states with the staffing 
and technology resources needed to detect, prevent, catch, and enforce 
penalties against these attempts to defraud the program while ensuring 
those unknowingly victimized by these individuals or groups do not lose 
the benefits to which they are entitled.
Conclusion
    While the areas above reflect some extremely important areas of the 
SNAP program, they by no means represent a comprehensive list of 
programmatic areas or policies that can be implemented or modified to 
strengthen and improve an essential entitlement utilized by millions of 
Americans each month. Coming out of the COVID-19 pandemic, during a 
time when the percentage of the aging workforce continues to grow and 
the number of individuals leaving the workforce increases, as well as a 
time where the farm bill is up for reauthorization, states and this 
Committee are at an inflection point where we have both tremendous 
opportunities to modernize and streamline the program to provide more 
equitable and effective services while also facing the threat of 
workforce challenges and complex requirements that that threaten to 
stymie progress.
    The actions of this Committee through the reauthorization of the 
farm bill in 2023 will play a crucial role in helping to unlock the 
potential advancements we can make in SNAP in the coming years, 
modernizing the program and its eligibility requirements while not 
sacrificing program integrity. It can do so by ensuring regular reviews 
and updates to the Thrifty Food Plan, continuing to expand the funding 
flexibility and range of SNAP E&T, modernizing the program by making 
permanent and providing support for no-cost online purchasing, 
maintaining the vital program simplification rules that helped us 
through the pandemic: BBCE, ESAP, expanded student eligibility, and 
interview/process streamlining, investing in new ways to help states 
stop more sophisticated electronic fraud techniques, and ensuring 
durable program stability for this critical part of the social safety 
net as clearly demonstrated during the program's success both before 
and during the pandemic.

    The Chairwoman. Thank you so much for being here with us 
today. I now recognize Mrs. Cox for 5 minutes. Please begin 
when you are ready.

    STATEMENT OF TY JONES COX, J.D., VICE PRESIDENT OF FOOD 
            ASSISTANCE POLICY, CENTER ON BUDGET AND 
              POLICY PRIORITIES, WASHINGTON, D.C.

    Mrs. Cox. Chairwoman Hayes, Ranking Member Bacon, Members 
of the Subcommittee, thank you for the opportunity to testify. 
I am Ty Jones Cox, Vice President of Food Assistance Policy at 
the Center on Budget and Policy Priorities here in Washington, 
D.C. I will discuss three things today: why SNAP is so 
important, the need for the updated Thrifty Food Plan, and how 
Congress can strengthen SNAP as part of the next farm bill.
    SNAP is our most effective anti-hunger program. That is 
largely because everyone who is eligible can get benefits, and 
the program expands automatically to meet rising needs in tough 
times. SNAP provides tens of millions of low-income seniors, 
kids, and working adults with money to buy food in their local 
communities. About 92 percent of benefits go to households with 
income at or below the poverty line, and 54 percent go to 
households experiencing deep poverty. As a legal aid attorney 
in Virginia, I saw how SNAP was a critical piece of the 
patchwork of services that my clients used to feed their 
children when their wages just were not enough to close the 
gap.
    In addition, SNAP acts as a first responder during 
emergencies and natural disasters. We saw how SNAP was critical 
in fighting food insecurity and other hardships during the 
pandemic. Because of SNAP and other relief measures by 
Congress, food insecurity did not surge during the pandemic the 
way it did during the Great Recession. SNAP is associated with 
better, short- and long-term outcomes in health, education, and 
self-sufficiency.
    While SNAP is an effective tool in reducing food 
insecurity, the benefit amount had not kept up with the 
changing times. The revised Thrifty Food Plan raised SNAP 
benefits, helping households better afford a healthy diet. 
Average SNAP benefits went from about $4.25 per person per day 
to about $5.45 per person per day, which is obviously still 
quite modest. The Agriculture Department revised the Thrifty 
Food Plan at the specific direction of Congress and the 
bipartisan farm bill that was signed by President Trump.
    About 2.4 million people, including more than one million 
children, are lifted above the poverty line because of this 
modest increase, based on a Center on Budget and Policy 
Priorities estimate that uses the supplemental poverty measure 
and Census data. That is something to celebrate, right? 
Previously, SNAP benefits were woefully inadequate, given the 
struggles of many households to buy and prepare healthy foods, 
and they were not aligned with the most recent dietary 
recommendations. This revision to the Thrifty Food Plan was 
needed, overdue, and one thing I think about is how many more 
children could have been lifted out of poverty if we had done 
something earlier.
    The farm bill is the time for Congress to strengthen SNAP. 
Although I do not consider this a comprehensive list, I want to 
suggest two areas for the Committee to consider. First, SNAP 
does not reach all groups of eligible low-income people, and 
the Committee could strengthen SNAP to reduce the risk of food 
insecurity for these groups. For example, about \1/2\ of adults 
over 60 participate in SNAP. Certain immigrants and college 
students who are experiencing food insecurity do not qualify 
for SNAP, and others are reluctant to participate or unaware 
they qualify. SNAP's 3 month time limit on non-disabled 
unemployed adults excludes many unemployed or underemployed 
workers, including veterans. And residents of Puerto Rico, 
American Samoa, and the Northern Mariana Islands are excluded 
from SNAP and instead receive food assistance through block 
grant programs that are not as responsive as SNAP.
    Congress should consider how to ensure that SNAP program 
operations and oversight keep pace with technology and 
innovation. Out of necessity, SNAP adopted some technological 
improvements during the pandemic and proved that others were 
viable. The farm bill will be an opportunity to assess where 
these changes can be institutionalized or expanded. 
Participants in agencies are used to having to make do with 
outdated systems, and participants are accustomed to having 
subpar service. And this should no longer be acceptable in our 
Federal programs.
    To wrap up, I want to highlight a sobering reality that 
should make all of us want to do more in fighting food 
insecurity. In 2021, one in four Black households with children 
and one in five Latino households with children was food-
insecure. This is a crisis that has been going on for decades, 
even before the pandemic revealed these stark disparities. One 
in four is sobering. How do we let this kind of hardship 
persist year after year? This is a huge disadvantage for these 
children, even as they are just getting started in life. And we 
know that it will affect their health, education, and well-
being for the rest of their lives. This cannot be how we 
operate. And I look forward to working together that we can 
change this.
    Thank you again for the opportunity to testify.
    [The prepared statement of Mrs. Cox follows:]

   Prepared Statement of Ty Jones Cox, J.D., Vice President of Food 
Assistance Policy, Center on Budget and Policy Priorities, Washington, 
                                  D.C.
    Thank you for the opportunity to testify today. I am Ty Jones Cox, 
Vice President of Food Assistance Policy at the Center on Budget and 
Policy Priorities (CBPP), an independent, nonprofit, nonpartisan policy 
institute located in Washington, D.C. CBPP conducts research and 
analysis on a range of Federal and state policy issues affecting 
families with low and moderate incomes. The Center's food assistance 
work focuses on improving the effectiveness of the major Federal 
nutrition programs, including the Supplemental Nutrition Assistance 
Program (SNAP, formerly food stamps). I have worked on SNAP policy and 
operations for more than 15 years, starting as a legal aid attorney in 
Virginia where I represented clients in their fair hearing and during 
their engagement with the Department of Social Services. Much of my 
current work is providing technical assistance to state officials and 
advocates, who wish to explore options and policies to improve SNAP 
operations to more efficiently serve eligible households. My team and I 
also conduct research and analysis on SNAP at the national and state 
levels. CBPP receives no government funding for our policy work or 
operations.
    My testimony today explains SNAP's critical roles in fighting food 
insecurity and poverty; in supporting health and economic well-being; 
in defending against hardship during the COVID-19 pandemic; and in 
supporting people who are paid low wages. I'll also describe how the 
recent update to the Thrifty Food Plan, which is used to set the 
maximum amount of food assistance people participating in the SNAP 
receive, has increased the adequacy of SNAP benefits, allowing 
households to better afford a nutritious diet. Finally, I'll detail 
opportunities to strengthen SNAP in the next farm bill.
SNAP's Critical Role in Fighting Food Insecurity and Poverty
    Research shows that SNAP is one of our most effective tools in 
reducing hunger and food insecurity, which occurs when a lack of 
resources causes household members to struggle to afford enough food 
for an active, healthy life during the entire year. As a result, it 
plays a critical role in our country.
    Much of SNAP's success is due to its structure: it is designed so 
that everyone who is eligible can get benefits; it expands 
automatically to meet needs during tough times; and it focuses its 
benefits to the households with the least resources available to 
purchase groceries, assisting families with low income to obtain 
adequate nutrition, regardless of where they live. As of February 2022, 
SNAP was helping 41 million low-income people in the U.S. to afford a 
nutritionally adequate diet by providing them with benefits on a debit 
card that can be used only to purchase food at about 254,000 retailers 
across the country. On average, SNAP recipients receive about $5.45 per 
person per day in food benefits, not counting the temporary additional 
benefits during the current public health emergency. SNAP's reach shows 
the extensive need for nutrition assistance and SNAP's critical role in 
addressing it.
    Consistent with its original purpose, SNAP provides a basic 
nutrition benefit to people with low incomes who cannot afford an 
adequate diet. SNAP is one of the only Federal benefit programs 
available to almost all households with low incomes; many other 
programs are limited to certain populations, such as families with 
children or people with disabilities, or have capped funding that 
limits the number of people who can receive benefits. Nearly 90 percent 
of SNAP participants are in households that contain a child under age 
18, an older adult 60 years or older, or an individual with a 
disability. (See Figure 1.) Based on pre-pandemic data, about \2/3\ of 
SNAP participants are in families with children; over \1/3\ are in 
households with older adults (aged 60 or older) or people with 
disabilities. Nearly half of SNAP households are headed by a non-
Hispanic white person, about a quarter by a non-Hispanic Black person, 
and more than a fifth by a Latino person (of any race). About seven 
percent of SNAP households are headed by a person who is Asian or 
another race.
Figure 1. Nearly 90 Percent of SNAP Recipients Are in Households With 
        Children, Older Adults, or Disabled Adults 
        
        
          Source: CBPP tabulations of USDA 2019 SNAP household 
        characteristics data.

    Children under age 18 constitute nearly half (43 percent) of all 
SNAP participants. Participation in SNAP also helps children receive 
school meals and confers eligibility to the Special Supplemental 
Program for Women, Infants, and Children (WIC). SNAP also benefits many 
households with workers paid low wages; the share of SNAP households 
that had earnings in an average month while receiving SNAP has risen 
over the past few decades, from 20 percent in 1992 to 29 percent in 
2019.\1\ Many households without earnings in a particular month are 
temporarily out of work and have worked recently and will work again 
soon.
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    \1\ Based on SNAP administrative data through 2019. Data are not 
available to know whether the trend continued during the pandemic.
---------------------------------------------------------------------------
    SNAP reduces poverty and food insecurity by giving households 
benefits to buy groceries, which allows them to spend more of their 
budgets on other basic needs, such as housing, electricity, and medical 
care. SNAP reaches more than 80 percent of eligible households. It 
delivers the largest benefits to those least able to afford an adequate 
diet. About 92 percent of SNAP benefits go to households with incomes 
at or below the poverty line, and 54 percent go to households at or 
below half of the poverty line (about $10,980 for a family of three in 
2022). Families with the greatest need receive the largest benefits; 
these households, particularly households with children, also have 
higher rates of participation in the program.
    These features make SNAP a powerful anti-poverty tool. SNAP kept 
nearly eight million people above the poverty line in the years before 
the COVID-19 pandemic, including 3.6 million children.\2\ SNAP has one 
of the strongest anti-poverty effects among government economic 
security programs and is particularly effective at reducing deep 
poverty, that is, in lifting families' incomes above half of the 
poverty line.
---------------------------------------------------------------------------
    \2\ Matt Saenz, ``Research Note: Economic Security Programs 
Significantly Reduce Poverty in Every State,'' CBPP, August 10, 2021, 
https://www.cbpp.org/research/poverty-and-inequality/economic-security-
programs-significantly-reduce-poverty-in-every.
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    SNAP reduces the overall prevalence of food insecurity by as much 
as 30 percent, and is even more effective among the most vulnerable, 
such as children and those with ``very-low-food security,'' in which 
one or more household members skips meals or otherwise eats less during 
the year due to lack of money. The largest and most rigorous 
examination of the relationship between SNAP participation and food 
security found that food insecurity among children fell by roughly \1/
3\ after their families received SNAP benefits for 6 months.\3\
---------------------------------------------------------------------------
    \3\ James Mabli, et al., ``Measuring the Effect of Supplemental 
Nutrition Assistance Program (SNAP) Participation on Food Security,'' 
Food and Nutrition Service, USDA, 2013, https://www.fns.usda.gov/
measuring-effect-snap-participation-food-security-0.
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    SNAP is highly responsive to the economy. When more households are 
out of work or see their earnings fall, SNAP automatically expands to 
serve everyone who is eligible and applies. This mitigates hardship 
during a recession and gets money into the economy quickly, acting as 
stimulus for the economy overall. Low-income individuals generally 
spend all of their income meeting daily needs such as shelter, food, 
and transportation, so every dollar in SNAP that a household receives, 
including during a downturn, enables the family to spend an additional 
dollar on food or other basic needs. Nearly 78 percent of SNAP benefits 
are redeemed within 2 weeks of receipt and 96 percent are spent within 
a month.\4\ During the Great Recession and the COVID pandemic, 
policymakers turned to SNAP as an efficient mechanism for getting 
additional help to households struggling to afford food and contending 
with significant income losses and for bolstering aggregate demand, 
thereby reducing the duration and depth of the economic downturn.
---------------------------------------------------------------------------
    \4\ Laura Castner, et al., ``Benefit Redemption Patterns in the 
Supplemental Nutrition Assistance Program in Fiscal Year 2017,'' 
Insight Policy Research, 2020, https://www.fns.usda.gov/snap/benefit-
redemption-patterns-fy-2017.
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    Research backs up how SNAP can act as economic stimulus. Every 
dollar in new SNAP benefits generates business for local retailers of 
all types and sizes, and increases the Gross Domestic Product by $1.50 
during a weak economy. Similarly, the Congressional Budget Office (CBO) 
and Moody's Analytics found that SNAP has one of the largest ``bangs-
for-the-buck'' for increasing economic activity and employment among a 
broad range of stimulus policies.\5\
---------------------------------------------------------------------------
    \5\ Alan Blinder and Mark Zandi, ``The Financial Crisis: Lessons 
for the Next One,'' CBPP, October 15, 2015, https://www.cbpp.org/
research/economy/the-financial-crisis-lessons-for-the-next-one; Patrick 
Canning and Brian Stacy, ``The Supplemental Nutrition Assistance 
Program (SNAP) and the Economy: New Estimates of the SNAP Multiplier,'' 
USDA Economic Research Service, July 2019, https://www.ers.usda.gov/
webdocs/publications/93529/err-265.pdf?v=82
72.8; Congressional Budget Office, ``Estimated Impact of the American 
Recovery and Reinvestment Act on Employment and Economic Output in 
2014,'' February 2015, https://www.cbo.gov/sites/default/files/114th-
congress-2015-2016/reports/49958-ARRA.pdf.
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    SNAP also acts as a first responder in the wake of the emergencies 
and natural disasters, providing critical food assistance to vulnerable 
households. After disasters, the U.S. Department of Agriculture (USDA) 
and states work together to provide quick, targeted assistance. This 
can include replacing participants' benefits to compensate for lost 
food, providing temporary Disaster SNAP (D-SNAP) benefits to non-
participants who have suffered significant loss, and relaxing program 
requirements to ease access and relieve undue burden on staff.
SNAP's Role in Supporting Health and Economic Well-Being
    SNAP is associated with improved outcomes in health, education, and 
self-sufficiency. SNAP participants are more likely to report excellent 
or very good health than low-income non-participants. Research 
comparing long-term outcomes of individuals in different areas of the 
country when SNAP expanded nationwide in the 1960s and early 1970s 
found that access to SNAP during pregnancy and in early childhood 
improved birth outcomes and long-term health as adults. Studies have 
linked SNAP to improved educational attainment, higher rates of high 
school completion, and improved labor market outcomes in adulthood. 
Older SNAP participants are less likely than similar non-participants 
to forgo their full prescribed dosage of medicine due to cost. SNAP may 
also help low-income seniors live independently in their communities 
and avoid hospitalization.
    SNAP is linked with reduced health care costs. On average, after 
controlling for factors expected to affect spending on medical care, 
low-income adults participating in SNAP incur about $1,400, or nearly 
25 percent, less in medical care costs in a year than low-income non-
participants. The difference is even greater for those with 
hypertension (nearly $2,700 less) and coronary heart disease (over 
$4,100 less). Two other studies also found an association between SNAP 
participation and reduced health care costs of as much as $5,000 per 
person per year.\6\
---------------------------------------------------------------------------
    \6\ Steven Carlson and Brynne Keith-Jennings, ``SNAP Is Linked with 
Improved Nutritional Outcomes and Lower Health Care Costs,'' CBPP, 
January 17, 2018, https://www.cbpp.org/research/food-assistance/snap-
is-linked-with-improved-nutritional-outcomes-and-lower-health-care.
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    SNAP enables low-income households to afford more healthy foods. 
Because SNAP benefits can be spent only on food, they boost families' 
food purchases. The updated Thrifty Food Plan (TFP), discussed more 
below, resulted in higher benefit levels, which will help households 
better afford a healthy diet featuring more whole grains, different-
colored fruits and vegetables, and lean proteins. The fact that SNAP 
can only be used for food purchased from grocery stores or other food 
retailers likely encourages better nutrition among participants, 
because it shifts food spending away from restaurants. In addition, all 
states operate SNAP nutrition education programs to help participants 
make healthy food choices.
SNAP Acted as a First Line of Defense Against Hardship During Pandemic
    After the onset of the COVID-19 pandemic, SNAP responded quickly to 
deteriorating economic conditions, pushed back against food insecurity 
and other forms of hardship, and supported families during periods of 
unemployment, earnings loss, and uncertainty. Moreover, Congress acted 
expeditiously to temporarily modify and expand SNAP--changes that 
states implemented quickly and effectively--to deliver additional food 
assistance to households in communities across the country.
    In March 2020, when Congress enacted and President Trump signed the 
first legislation to address the health and economic impacts of COVID-
19, hunger was poised to soar. Calls requesting help with food to state 
``211'' numbers, which households in need of help can use for human 
services referrals, were over four times greater in late March through 
mid-May 2020 than earlier in 2020.\7\ The food bank network Feeding 
America distributed 42 percent more food in the second quarter of 2020 
than it did in the first quarter, and food banks were growing 
increasingly concerned about their ability to meet the increased 
need.\8\
---------------------------------------------------------------------------
    \7\ Rachel Garg, et al., ``A new normal for 2-1-1 food requests?'' 
Washington University in St. Louis Health Communication Research 
Laboratory, June 15, 2020, https://hcrl.wustl.edu/a-new-normal-for-2-1-
1-food-requests/; Cindy Charles, et al., ``Trends of top 3 food needs 
during COVID,'' Washington University in St. Louis Health Communication 
Research Laboratory, August 7, 2020, https://hcrl.wustl.edu/trends-of-
top-3-food-needs-duringcovid/.
    \8\ Paul Morello, ``The food bank response to COVID, by the 
numbers,'' Feeding America, March 12, 2021, https://
www.feedingamerica.org/hunger-blog/food-bank-response-covid-numbers.
---------------------------------------------------------------------------
    During the Great Recession, the share of households that were food-
insecure rose from 11.1 percent in 2007 to 14.7 percent in 2009, 
according to Agriculture Department estimates. Yet during the COVID-19 
pandemic, because of SNAP's structural ability to respond to increased 
need as well as the robust relief effort in SNAP and other efforts--
including unemployment insurance and economic impact payments--the 
typical annual measure of food insecurity in 2020 was unchanged from 
the 2019 level of 10.5 percent.\9\
---------------------------------------------------------------------------
    \9\ Alisha Coleman-Jensen, et al., ``Household Food Security in the 
United States in 2020,'' USDA, September 2021, https://
www.ers.usda.gov/publications/pub-details/?pubid=102075.
---------------------------------------------------------------------------
    This overall figure obscures that food insecurity under the annual 
measure did rise for households with children and for households headed 
by Black adults; people of color have faced higher levels of food 
insecurity for decades. (See Figure 2.) And other Census data show 
higher levels of food insufficiency (a different measure of food 
hardship, in which adults report that their household sometimes or 
often did not have enough to eat in the last week) during the pandemic 
than what the annual data show. But it's clear that SNAP and other 
forms of economic support prevented food insecurity from surging during 
the pandemic the way it did during the Great Recession.
Figure 2. Food Insecurity by Race and Ethnicity Reveals Stark 
        Disparities
Percentage of households that lacked access to adequate food at some 
        point in the year, by race and ethnicity, 2001-2020
        
        
          Note: Other race = people who identify as American Indian or 
        Alaskan Native, Asian, Hawaiian or Pacific Islander, or more 
        than one race. Hispanic people may be of any race.
          Source: U.S. Department of Agriculture.

    Because of SNAP's structure, participation can expand automatically 
in response to job and income losses, and policy changes enacted during 
the pandemic boosted caseloads modestly as well. SNAP is available 
within a month--often within a week--of a household's application, so 
it was one of the first forms of economic relief available to many low-
income families during the pandemic when people lost jobs, had their 
hours cut, or were unable to work because of illness.
    The number of SNAP participants grew from 37 million in an average 
month just before the pandemic to 43 million in June 2020. (The total 
number of individuals helped by SNAP during the pandemic is higher than 
these point-in-time figures because households enrolled in and left the 
program over the course of the last 2 years.) The number of people 
participating in SNAP has declined since the summer of 2020, but in 
February 2022 (the most recent data available) more than 41 million 
people participated, 12 percent above the February 2020 level. CBO 
forecasts the number of SNAP participants will continue to decline in 
coming years and ultimately fall below pre-pandemic levels. After a 
downturn, SNAP caseloads tend to remain elevated for a number of years. 
One reason is that during a crisis, families who may have already been 
eligible apply for SNAP as they face greater need and uncertainty. Such 
households may continue to participate in the program, receiving 
benefits to augment their low earnings until their earnings rise enough 
to make them wholly ineligible.
    Beginning in March 2020, Congress temporarily modified SNAP rules 
to further reduce hardship and support the economy, taking advantage of 
SNAP's ability to deliver benefits quickly and efficiently on 
households' electronic benefit transfer (EBT) cards. These changes 
included:

   Emergency allotments (EAs). In March 2020 Congress gave 
        states and USDA the flexibility to provide emergency SNAP 
        benefit supplements, which all states did. Congress authorized 
        USDA to approve EAs for as long as the Federal Government has 
        declared a public health emergency and the state has issued an 
        emergency or disaster declaration. As of May 2022, about 15 
        states had ended their disaster declarations and were no longer 
        providing EAs. In states providing EAs, all households receive 
        the maximum benefit for their household size; if the difference 
        between the maximum benefit and the household's original 
        benefit under the SNAP benefit formula is less than $95, then 
        the household's EA is increased so the total EA benefit is no 
        lower than $95.\10\
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    \10\ The Trump Administration originally set EAs at the amount that 
raised each SNAP household's benefits to the level of the SNAP maximum 
allotment--which helped those households that didn't otherwise receive 
the maximum allotment, but left out the 40 percent of SNAP households 
who have the lowest incomes and already received the maximum allotment. 
In April 2021, USDA revised the emergency allotment calculations to 
include the lowest-income households so each household now receives at 
least an additional $95 a month. See USDA, ``USDA Increases Emergency 
SNAP Benefits for 25 million Americans,'' April 1, 2021, https://
www.fns.usda.gov/news-item/usda-006421.

   A 15 percent SNAP benefit boost. Congress acted in December 
        2020 to raise SNAP maximum benefits by 15 percent from January 
        through June 2021. The American Rescue Plan extended the 
---------------------------------------------------------------------------
        increase through September 2021, when the increase ended.

   The Pandemic-EBT program (P-EBT). Congress created P-EBT in 
        March 2020 as a temporary program to provide benefits to 
        households with children who miss out on free or reduced-price 
        school meals due to the pandemic. Congress later extended and 
        expanded it to provide benefits to cover certain younger 
        children and during the summer, when food insecurity among 
        children rises.

      While not SNAP benefits, P-EBT is delivered on SNAP's EBT cards 
        and state SNAP agencies played a leadership role in standing up 
        this new program within just a few months. P-EBT reduced the 
        share of families where children experienced very low food 
        security by 17 percent, according to Brookings Institution 
        research. The program reduced food insufficiency, by 28 
        percent, the same study found. The effects were larger in 
        states that had higher rates of school closures during the 
        pandemic.\11\ States' ability to provide P-EBT benefits is tied 
        to the Federal public health emergency. All or nearly all 
        states offered P-EBT benefits during the past couple of school 
        years and last summer. Currently more than half of states have 
        USDA-approved plans to issue P-EBT benefits for the 2021-2022 
        school year when schools are closed or attendance is disrupted 
        due to COVID-19, and USDA recently issued guidance to states 
        regarding P-EBT for summer 2022.
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    \11\ Lauren Bauer, Kristina Ruffini, and Diane Whitmore 
Schanzenbach, ``An Update on the Effect of Pandemic EBT on Measures of 
Food Hardship,'' Hamilton Project, September 29, 2021, https://
www.brookings.edu/research/an-update-on-the-effect-of-pandemic-ebt-on-
measures-of-food-hardship/. As explained above, very-low-food 
insecurity is the most severe form of food insecurity where children 
have to take steps such as skipping meals because they lack resources. 
Food insufficiency is a different measure where adults report that 
their household sometimes or often did not have enough to eat in the 
last week.

    Average SNAP benefits across all households rose from about $120 
per person per month before the pandemic to about $230 in the summer of 
2021. Since then, SNAP pandemic relief has fallen after the 15 percent 
benefit boost ended and states have started to pull back on emergency 
supplements. When the emergency allotments end--as has happened already 
in some states and will happen in other states with the end of the 
Federal public health emergency--SNAP households see their benefits 
fall by an average of about $80 per person per month, or about 33 
percent, though the exact amount depends on the household's income and 
other circumstances. The average SNAP benefit per person per day drops 
from about $8 to about $5.45. Fortunately, because of the update to the 
Thrifty Food Plan, described below, SNAP benefits after the EAs end are 
far more adequate than they otherwise would have been.
    During the pandemic Congress also:

   Temporarily suspended SNAP's harsh 3 month time limit, which 
        takes benefits away from many adults under age 50 without 
        children in the home when they don't have a job for more than 
        20 hours a week;

   Loosened the general rule that makes many college students 
        ineligible for SNAP;

   Allowed waivers of certain administrative process 
        requirements in SNAP to enable administrators to deliver 
        benefits promptly and safely even as caseloads surged and 
        eligibility staff worked from home; and

   Increased funding for the nutrition assistance block grants 
        in Puerto Rico, American Samoa, and the Northern Mariana 
        Islands and funded additional commodity purchases for emergency 
        food programs.

    The pandemic highlighted the critical role that SNAP plays in 
delivering resources quickly to individuals and their communities. It 
also reinforced the exceptional dedication and perseverance of the 
state officials across the country who administer the program with 
compassion and integrity.
SNAP Supports Workers Paid Low Wages
    SNAP is an important support for workers who are paid low wages. 
Millions of people in the U.S. work in jobs with low wages, 
unpredictable schedules, and no benefits such as paid sick leave--all 
of which contribute to high turnover and spells of unemployment. SNAP 
provides monthly benefits that help fill gaps for workers with low and 
inconsistent pay and can help workers afford food during periods when 
they are looking for work.
    Several features of SNAP's benefit structure make it an effective 
support for workers. During the pandemic, SNAP has helped millions of 
households experiencing unemployment and a turbulent job market. 
However, SNAP's harsh 3 month time limit for unemployed adults not 
raising children cuts off benefits for participants who may be looking 
for work or who face barriers to work, creating hardship with no 
significant impact on employment among those affected.
    SNAP helps workers in low-paying jobs put food on the table. The 
share of SNAP households that worked in an average month while 
receiving SNAP grew over the past 3 decades, until the onset of the 
pandemic. Work rates rose among all SNAP households, but especially 
among households with children. This trend continued despite the large 
job losses in the Great Recession.
    Close to \2/3\ of working SNAP participants work in service, office 
and administrative support, sales, or professional occupations. Many of 
the jobs most common among SNAP participants, such as service or sales 
jobs like cashiers, cooks, or home health aides, often feature low pay 
and irregular work hours, and frequently lack benefits such as paid 
sick leave.\12\ These conditions make it difficult for workers to earn 
sufficient income to provide for their families and may contribute to 
volatility such as high job turnover. SNAP supplements these workers' 
low pay, helps smooth out income fluctuations due to irregular hours, 
and helps workers when they temporarily lose employment, enabling them 
to buy food and use their limited resources on other basic necessities.
---------------------------------------------------------------------------
    \12\ Brynne Keith-Jennings and Vincent Palacios, ``SNAP Helps 
Millions of Low-Wage Workers,'' Center on Budget and Policy Priorities, 
May 17, 2017, https://www.cbpp.org/research/food-assistance/snap-helps-
millions-of-low-wage-workers.
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    The pandemic has disproportionately impacted the low-paid labor 
market and SNAP participants seeking work. The majority of jobs lost in 
the crisis were in industries that pay low wages, with the lowest-
paying industries accounting for 30 percent of all jobs but 59 percent 
of the jobs lost from February 2020 to October 2021, according to Labor 
Department employment data. Jobs were down nearly twice as much in low-
paying industries (4.5 percent) as in medium-wage industries (2.6 
percent) and roughly 15 times as much as in high-wage industries (0.3 
percent) during this period.\13\ Workers who were born outside the U.S. 
(including individuals who are now U.S. citizens) experienced larger 
job losses than U.S.-born workers.
---------------------------------------------------------------------------
    \13\ CBPP, ``Tracking the [COVID]-19 Economy's Effects on Food, 
Housing, and Employment Hardships,'' updated February 10, 2022, https:/
/www.cbpp.org/research/poverty-and-inequality/tracking-the-covid-19-
economys-effects-on-food-housing-and.
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    Black and Latino workers experienced a far slower jobs recovery 
than white workers--reflecting historical patterns rooted in structural 
racism. By May 2022, however, unemployment rates for Black and Latino 
workers had returned to pre-pandemic levels, though they still are 
substantially higher than unemployment rates for white workers. Some 
6.2 percent of Black workers and 4.3 percent of Latino workers were 
unemployed in May 2022, compared to 3.2 percent of white workers.
    The majority of SNAP participants who can work do so, either while 
receiving SNAP or before and after. Many turn to SNAP when they are 
between jobs. Among SNAP participants who are working-age, non-disabled 
adults, more than half work while receiving SNAP--and 74 percent work 
in the year prior to or the year after receiving SNAP. For families 
with children and at least one working-age, non-disabled adult the work 
rates are even higher: 75 percent of households with children include 
someone who works while receiving SNAP and nearly 90 percent of such 
households include someone who works in the year prior to or the year 
after receiving SNAP.\14\ This shows that joblessness is often 
temporary for SNAP participants.
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    \14\ CBPP analysis of the 2014 panel of the U.S. Census Bureau's 
Survey of Income and Program Participation.
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    The low pay and instability in many low-paid jobs can contribute to 
income volatility and job turnover: workers paid low wages, including 
many who participate in SNAP, are more likely than other workers to 
experience periods when they are out of work or when their monthly 
earnings drop, at least temporarily. These dynamics lead many adults to 
participate in SNAP for short periods, often while between jobs or when 
their work hours are cut. Others, such as workers with steady but low-
paying jobs or those unable to work, participate longer-term.
    People working for low pay are underserved in many states. Even 
though SNAP provides an important support for these workers, this 
population is often particularly hard to reach. In 2019, 72 percent of 
individuals with earnings who were eligible for SNAP participated 
compared to 82 percent of all eligible people, according to USDA 
estimates.\15\
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    \15\ Alma Vigil, ``Trends in USDA Supplemental Nutrition Assistance 
Program Participation Rates: Fiscal Year 2016 to Fiscal Year 2019,'' 
USDA, March 2022, https://www.fns.usda.gov/snap/trends-participation-
rates-fy-2016-2019.
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    SNAP's design supports work. Some policymakers have raised concerns 
that programs that provide assistance for low-income families may 
discourage work if participants are worried that they will face a 
``cliff'' where they lose their benefits entirely if they take a job or 
increase their earnings above the program's income limit. SNAP contains 
three features that result in a fairly small benefit cliff for 
households with income at the upper end of SNAP's income eligibility 
limit.
    First, SNAP's standard benefit formula (in place outside of the 
current public health emergency) targets benefits based on a 
household's income and expenses, but the program phases out benefits 
slowly with increased earnings and includes a 20 percent deduction for 
earned income to reflect the cost of work-related expenses and to 
function as an additional work support. As a result, each additional 
dollar of earnings results in most households experiencing a decline of 
only 24 to 36 in SNAP benefits. Most SNAP households see an increase 
in their total income when their earnings rise modestly--particularly 
if they are in the income range where the Earned Income Tax Credit is 
increasing as earnings rise--even if some other benefits begin to phase 
down as well. As a result of the earnings deduction, a household with 
earnings will receive a larger SNAP benefit than a household of the 
same size and gross income in which income comes from unearned sources.
    SNAP does, however, limit gross income to 130 percent of the 
Federal poverty line, creating a small but meaningful benefit cliff or 
benefit loss for some households who see their earnings increase from 
just below to just above that level. This loss of SNAP would cancel out 
more of the increased earnings than is the case for lower-income 
households, and, depending on how much the household had increased its 
earnings, the household may not be better off over a narrow income 
range.
    For example, a single parent with two children working full time at 
$13.50 an hour would have income at 128 percent of the poverty level 
and receive about $317 a month from SNAP, making up about 12 percent of 
their total monthly income. If their hourly wage increased by 50 (or 
$87 a month), lifting the household's income just above 130 percent of 
FPL ($2,379 for a family of three per month in Fiscal Year 2022), the 
family would become ineligible for SNAP under the Federal income 
eligibility cut-off. In this circumstance, the household's loss of SNAP 
benefits would more than cancel out the higher earnings; their total 
monthly resources would decline by about $230 per month.\16\ (The 
parent may see further wage increases over time, now building from a 
higher base, and at that point their higher earnings would make the 
family better off.)
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    \16\ CBPP calculation based on fiscal year 2022 SNAP benefit 
parameters and fiscal year 2019 SNAP household characteristics data. We 
assume no emergency allotments are in effect. In this example, this 
family claims the $177 standard deduction and the 20 percent earned 
income deduction and has $1,407 monthly shelter costs.
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    Fortunately, states currently have an option to lift the gross 
income limit through ``broad-based categorical eligibility.'' This 
state option is the second protection in SNAP against a benefit cliff. 
More than 30 states have taken advantage of the option thereby allowing 
benefits to phase out gradually for all working households. Consider 
the previous example in a state that used the categorical eligibility 
option to adopt a higher gross income limit. The household's SNAP 
benefit would drop by only about $30 a month when their income rose, so 
the household would still be better off with the higher-paying job. The 
option allows states to smooth SNAP's phase out and eliminate the 
relatively modest benefit cliff; states that adopt the option ensure 
that if a working household is able to increase their earnings, their 
SNAP benefits phase out slowly and evenly.
    The third protection against a benefit cliff is SNAP's structural 
guarantee to make food assistance available to every household that 
qualifies under program rules and applies for help. SNAP households 
that leave the program because they find a job or get a raise and no 
longer qualify can count on SNAP being available if they need help 
again later. Without this guarantee a household that loses its job 
might have to wait until funding became available to resume benefits--
as occurs now with child care and other benefits that are constrained 
by funding limitations from serving all who are eligible. That SNAP can 
serve all who qualify for its benefits lowers the perceived risks of 
working, making it easier for low-income families to take a chance on a 
new job or promotion.
    SNAP's time limit does not increase work effort but does cut people 
off benefits. SNAP's role as the nation's primary anti-hunger safety 
net has long had a gaping hole. Non-elderly adults without children in 
their homes can receive benefits for only 3 months every 3 years, 
unless they are working at least 20 hours a week or can document they 
are unable to work. Most states offer little if any help in meeting the 
20 hour requirement, so the rule is actually a time limit on benefit 
receipt, cutting off all individuals who are unable to find enough 
hours of work. States can temporarily waive the time limit in areas 
where there are insufficient jobs. Due to the pandemic, the time limit 
is temporarily suspended nationwide.
    Research shows that taking food away from households does not lead 
to increased work effort or earnings. A recent USDA report adds to the 
growing evidence that the time limit doesn't lead to SNAP participants 
finding a job.\17\ By taking SNAP away, the time limit leaves people 
with fewer resources to buy food and puts them at risk of food 
insecurity.
---------------------------------------------------------------------------
    \17\ Laura Wheaton, et al., ``The Impact of SNAP Able-Bodied Adults 
Without Dependents (ABAWD) Time Limit Reinstatement in Nine States,'' 
Urban Institute, June 2021, https://www.fns.usda.gov/snap/impact-snap-
able-bodied-adults-without-dependents-abawd-time-limit-reinstatement-
nine.
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    Additional research supports these findings. A recent paper showed 
that SNAP's time limit reduced participation in the program by 53 
percent among those subject to the time limit, again with no effects on 
employment.\18\ Earlier research found people subject to the time limit 
lost SNAP benefits and that losing SNAP eligibility did not increase 
employment but did increase the number of days people reported being in 
poor health.\19\
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    \18\ Colin Gray, et al., ``Employed in a SNAP? The Impact of Work 
Requirements on Program Participation and Labor Supply,'' National 
Bureau of Economic Research Working Paper 28877, June 2021, https://
www.nber.org/papers/w28877.
    \19\ Ed Bolen, et al., ``Permanently End the SNAP Cut-Off to 
Support a More Equitable Recovery,'' CBPP, May 2021, https://
www.cbpp.org/research/food-assistance/permanently-end-the-snap-cut-off-
to-support-a-more-equitable-recovery; Wenhui Feng, ``The Effects of 
Changing SNAP Work Requirement on the Health and Employment Outcomes of 
Able-Bodied Adults without Dependents,'' Journal of the American 
Nutrition Association, Vol. 41, No. 3, 2021, pp. 281-290, https://
www.tandfonline.com/doi/abs/10.1080/
07315724.2021.1879692?journalCode=uacn20&.
---------------------------------------------------------------------------
    Studies also confirm that individuals potentially subject to the 
time limit are more likely to have significant barriers to employment, 
such as lack of a high school diploma or GED, a felony conviction, or 
lack of transportation or a driver's license, and have higher rates of 
homelessness and mental or physical conditions that can impact their 
ability to work.
Thrifty Food Plan Update Increasing SNAP's Benefit Adequacy
    SNAP's purpose is to help participants afford a variety of healthy 
foods. SNAP benefit levels are tied to the cost of the Department of 
Agriculture's Thrifty Food Plan, a food plan intended to provide 
adequate nutrition at a budget-conscious cost.
    The bipartisan 2018 Farm Bill directed USDA to reevaluate the 
Thrifty Food Plan to better reflect the modern cost of a healthy diet 
by 2022 and every 5 years thereafter. (See Figure 3.) USDA's updated 
Thrifty Food Plan, which was issued in August 2021 (meeting the 
statutory timeframe) and went into effect at the start of fiscal year 
2022, increased SNAP's purchasing power, raising average benefits per 
person per day by about $1.20 to about $5.45 in fiscal year 2022, which 
will help millions of families' ability to add a greater variety of 
fruits, vegetables, and other healthy foods to their diet.\20\
---------------------------------------------------------------------------
    \20\ Joseph Llobrera, Matt Saenz, and Lauren Hall, ``USDA Announces 
Important SNAP Benefit Modernization,'' CBPP, August 26, 2021, https://
www.cbpp.org/research/food-assistance/usda-announces-important-snap-
benefit-modernization.
---------------------------------------------------------------------------
Figure 3. Original text from Agriculture Improvement Act of 2018


    It had been 15 years since USDA last revised the TFP and nearly 60 
years since it reexamined the TFP's real purchasing power. The revised 
TFP is a model food plan that's more: in sync with what families with 
low incomes eat, or would eat if less budget constrained; attuned to 
the realities of time-strapped families; and reflective of scientific 
evidence for a nutritious, varied diet that includes more whole grains, 
different-colored fruits and vegetables, and lean proteins (including 
seafood).
    SNAP expects families receiving benefits to spend 30 percent of 
their net income on food. Families with no net income receive the 
maximum benefit, which is set at the cost of the Thrifty Food Plan. For 
all other households, the monthly SNAP benefit equals the maximum 
benefit for that household size minus the household's expected 
contribution.
Before TFP Update, Evidence Showed Benefits Were Inadequate
    Before USDA's revision, the Thrifty Food Plan had been adjusted 
only for inflation since the 1970s, even as our understanding of what 
constitutes a healthy diet changed. That left SNAP benefits badly out 
of line with the most recent dietary recommendations and the economic 
realities most struggling households face when trying to buy and 
prepare healthy foods.
    Prior to the TFP revision, many families struggled once SNAP 
benefits ran out. About \1/4\ of all households exhausted virtually all 
their benefits within a week of receipt, and more than half exhausted 
virtually all benefits within the first 2 weeks. Numerous studies have 
found that late in the benefit cycle (that is, toward the end of the 
month), SNAP participants consumed fewer calories (with the probability 
of going an entire day without eating tripling from the first to the 
last day of the month), were likelier to experience food insecurity, 
visited food pantries more frequently, and may have been more likely to 
visit emergency rooms or to be admitted to a hospital because of low 
blood sugar. In addition, at the end of the benefit month, children's 
test scores were lower and they were more likely to misbehave in 
school.\21\
---------------------------------------------------------------------------
    \21\ Steven Carlson, Joseph Llobrera, and Brynne Keith-Jennings, 
``More Adequate SNAP Benefits Would Help Millions of Participants 
Better Afford Food,'' CBPP, July 15, 2021, https://www.cbpp.org/
research/food-assistance/more-adequate-snap-benefits-would-help-
millions-of-participants-better.
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    Scientific evidence now emphasizes the importance of eating a broad 
range of somewhat more costly foods, including more whole grains, red, 
orange, and leafy green vegetables, lean proteins, and seafood. To 
prepare a healthy diet, families must have enough money to buy 
ingredients, as well as the time needed to plan meals, buy and prepare 
food, consume meals, and clean up. With the increase in women's labor 
force participation since the 1970s, and with many parents working 
multiple jobs, many families lack this time for food preparation.
    To stay cost-neutral over the years, the TFP had relied on a 
limited set of less-expensive foods, had assumed that families can 
spend a considerable amount of time preparing meals mostly from 
scratch, and had not accounted for varying family types and dietary 
needs. As a result, SNAP benefits had fallen short of what many people 
need to buy and prepare healthy food.
Impact of TFP Increase
    The update to the TFP resulted in a meaningful but modest SNAP 
benefit increase. The 21 percent increase in maximum SNAP benefits 
raised the average benefit from about $4.25 per person per day (without 
the temporary, pandemic-related increases that are now in place but 
expire in the coming months) to about $5.45 per person per day in 
Fiscal Year 2022. (See Figure 4.)
Figure 4. Thrifty Food Plan Revision Meaningfully Increased Average 
        SNAP Benefits Per Person Per Day
        
        
          Note: TFP = Thrifty Food Plan. Figures do not include 
        temporary, pandemic-related SNAP benefit increases (likely to 
        expire in coming months).
          Source: CBPP analysis of 2019 SNAP household characteristics 
        data for Fiscal Year 2022.
Reduces Poverty
    About 2.4 million people, including more than one million children, 
will be lifted above the poverty line because of this modest increase, 
based on a CBPP estimate that uses the Supplemental Poverty Measure and 
Census data for 2017.\22\ The TFP adjustment is projected to cut the 
number of children participating in SNAP whose families have annual 
incomes below the poverty line by 15 percent and will reduce the number 
of children in poverty overall by 12 percent, we estimate. In addition, 
the TFP adjustment will reduce the severity of poverty for another 20.5 
million people, including 6.2 million children.
---------------------------------------------------------------------------
    \22\ These CBPP estimates are based on the U.S. Census Bureau's 
March 2018 Current Population Survey, using tax year 2017 tax rules 
that account for the Tax Cuts and Jobs Act. They include corrections 
for underreported benefits from SNAP, Supplemental Security Income, and 
Temporary Assistance for Needy Families from the Department of Health 
and Human Services/Urban Institute Transfer Income Model (TRIM). At the 
time of the TFP adjustment, the most recent version of TRIM was based 
on tax year 2017. The estimates reflect a pre-pandemic economy and 
regular SNAP program rules and do not account for temporary measures 
enacted to help reduce hardship during the pandemic, such as the 
temporary increase in the Child Tax Credit.
---------------------------------------------------------------------------
    Of the roughly 23 million people the change will lift above or 
closer to the poverty line, 9.4 million are white, 6.5 million are 
Latino, 5.3 million are Black, and 900,000 are Asian.\23\
---------------------------------------------------------------------------
    \23\ Joseph Llobrera, Matt Saenz and Lauren Hall, ``USDA Announces 
Important SNAP Benefit Modernization,'' CBPP, August 26, 2021, https://
www.cbpp.org/research/food-assistance/usda-announces-important-snap-
benefit-modernization.
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Improves Food Security
    More adequate SNAP benefits can help reduce food insecurity, 
research shows. Those improvements can have long-term impacts, such as 
supporting economic mobility and reducing health care costs. Children 
participating in SNAP face lower risks of nutritional deficiencies and 
poor health, which can improve their health over their lifetimes. SNAP 
also can affect children's ability to succeed in school. One study, for 
example, found that test scores among students in SNAP households are 
highest for those receiving benefits 2 to 3 weeks before the test, 
suggesting that SNAP can help students learn and prepare for tests--and 
that when benefits run out and families are struggling to afford 
groceries, children's ability to learn is diminished.\24\
---------------------------------------------------------------------------
    \24\ Anna Gassman-Pines and Laura Bellows, ``Food instability and 
academic achievement: a quasi-experiment using SNAP benefit timing,'' 
American Educational Research Journal, Vol. 55, No. 5, 2018, pp. 897-
927, http://journals.sagepub.com/doi/10.3102/0002831218761337.
---------------------------------------------------------------------------
    Improving the adequacy of SNAP benefits is particularly important 
in addressing disproportionately high rates of food insecurity among 
Black and Latino households. Poverty and food insecurity rates are 
higher among Black and Latino households due to racism and structural 
factors, including unequal education, job, and housing opportunities, 
that contribute to income disparities.
Improves Nutritional Outcomes
    These higher benefit levels will help households better afford a 
healthy diet featuring enough different fruit and vegetables, a recent 
USDA study simulating the impact of the benefit increase found.\25\ And 
with fewer cost constraints on their food budgets, participating 
households can better meet dietary guidelines for fruit and vegetable 
consumption while leaving more of their benefits to purchase other 
types of nutritious foods.
---------------------------------------------------------------------------
    \25\ Sabrina Young and Hayden Stewart, ``U.S. Fruit and Vegetable 
Affordability on the Thrifty Food Plan Depends on Purchasing Power and 
Safety Net Supports,'' International Journal of Environmental Research 
and Public Health, 19(5), February 2022, https://www.mdpi.com/1660-
4601/19/5/2772.
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    In research we helped support, economists Michele Ver Ploeg and 
Chen Zhen found that increasing SNAP benefits is expected to increase 
spending on groceries, improve the dietary quality of food purchases, 
and increase the amount of key nutrients, such as iron and calcium.\26\ 
In another study, economics professors Patricia Anderson and Kristin 
Butcher found that boosting SNAP benefits would raise not only the 
amount that low-income households spend on groceries but also the 
nutritional quality of the food purchased.\27\
---------------------------------------------------------------------------
    \26\ Michele Ver Ploeg and Chen Zhen, ``Changes in SNAP Benefit 
Levels and Food Spending and Diet Quality: Simulations from the 
National Household Food Acquisition and Purchase Survey,'' CBPP, May 
12, 2022, https://www.cbpp.org/research/food-assistance/changes-in-
snap-benefit-levels-and-food-spending-and-diet-quality.
    \27\ Patricia Anderson and Kristin Butcher, ``The Relationships 
Among SNAP Benefits, Grocery Spending, Diet Quality, and the Adequacy 
of Low-Income Families' Resources,'' CBPP, June 14, 2016, https://
www.cbpp.org/research/food-assistance/the-relationships-among-snap-
benefits-gro
cery-spending-diet-quality-and.
---------------------------------------------------------------------------
    Anderson and Butcher estimated the impact of an increase in SNAP 
benefits of $30 per person per month--slightly less than the $36 per-
person, per-month increase due to the TFP update. The researchers found 
that a $30 monthly increase would result in about $19 per person per 
month more in food spending. (This is less than the SNAP benefit 
increase because the added benefits free up household income for other 
necessities such as rent, utility bills, or non-food items that SNAP 
doesn't cover.) That increase in food spending, in turn, would raise 
consumption of more nutritious foods, notably, vegetables and certain 
healthy sources of protein (such as poultry and fish), and less fast 
food. The increased food spending would also reduce food insecurity 
among SNAP recipients.
Opportunities to Strengthen SNAP in the Next Farm Bill
    There is strong evidence that SNAP is working well, but there are 
certainly parts of the program that should be improved. The coming farm 
bill is a time to address areas of the program that could be more 
effective. It is still early in the farm bill process, and this list is 
not comprehensive, but rather is meant to suggest possible areas for 
the Committee to consider.
Ensure SNAP Reaches More Low-income People Who Face Food Insecurity
    USDA estimates in recent years, prior to the pandemic, that SNAP 
reached more than 80 percent of people who qualified for benefits. But 
some people face barriers to gaining access and either participate at 
lower rates or may not be eligible. A major area for consideration is 
how to strengthen SNAP to address the risk of food insecurity for these 
populations, many of whom are disproportionately people of color.
    Bring parity to food assistance in Puerto Rico, American Samoa, and 
the Commonwealth of the Northern Mariana Islands. Despite higher levels 
of poverty than the rest of the U.S., these three Territories are 
excluded from SNAP (unlike Guam and the Virgin Islands) and instead 
receive block grants for nutrition assistance. Because of the block 
grants' low, capped levels, these territories have more limited 
eligibility and/or benefit levels and the programs are not able to 
respond to changes in need because of economic downturns or disasters.
    For example, Puerto Rico's household food assistance program, the 
Nutrition Assistance Program (NAP, or PAN for its name in Spanish, 
Programa de Asistencia Nutricional) is one of the most important 
programs helping people meet basic needs in Puerto Rico. On average 
about 1.3 million people participated in NAP in 2018, about \2/5\ of 
the territory's population. But because it is a capped block grant, 
NAP's support is more limited than SNAP. Puerto Rico sets eligibility 
and benefit levels to keep the program's cost within the fixed Federal 
funding limits, which means these levels aren't solely based on, and 
can't fully respond to, need.
    As a result, under regular NAP rules (not including the recent 
temporary disaster benefits), a parent of two children who lost a job 
and had no other income received an average of $376 in monthly NAP 
benefits in March through June 2019.\28\ By comparison, a parent of two 
children who lost a job and had no other income would have received the 
maximum monthly SNAP benefit of about $505 in the continental United 
States in 2019, and more in Alaska, Hawai'i, Guam, and the Virgin 
Islands. SNAP's funding structure also enables it to respond to changes 
in demand, including those due to natural disasters or recessions, 
which NAP, with its limited funding, can't.
---------------------------------------------------------------------------
    \28\ CBPP, ``A Brief Overview of the Nutrition Assistance 
Program,'' https://www.cbpp.org/research/food-assistance/a-brief-
overview-of-the-nutrition-assistance-program.
---------------------------------------------------------------------------
    Congress recently funded USDA to conduct research to help determine 
the information and changes that would be needed to transition Puerto 
Rico to SNAP, including administrative changes and the development of a 
methodology to determine SNAP benefit levels based on food price data 
and consumption data for Puerto Rico. The data used to estimate the 
Thrifty Food Plan for SNAP is not available for Puerto Rico, but 
available data on food prices suggests that they are higher in Puerto 
Rico than in other parts of the U.S.
    Similarly, the Commonwealth of the Northern Mariana Islands (CNMI) 
receives insufficient funding for food assistance despite high levels 
of poverty. A 2016 USDA-funded study of the feasibility of including 
the CNMI in SNAP reported that more than half of the CNMI's population 
had income below the Federal poverty level, and median household income 
in the CNMI was less than half the median income in Guam, its nearest 
neighbor, and in the United States as a whole.\29\ Like Puerto Rico, 
the CNMI has had to set eligibility and benefit levels far lower than 
in the states, the District of Columbia, and Guam and the Virgin 
Islands. Under a new memorandum of understanding, the CNMI's benefit 
amounts have increased, eligibility was expanded, and a contingency 
reserve fund was created to be available to meet unanticipated needs. 
But additional changes are needed to allow food assistance in the CNMI 
to reach full parity with SNAP.
---------------------------------------------------------------------------
    \29\ Anne Peterson, et al., ``Assessing the Feasibility of 
Implementing SNAP in the Commonwealth of the Northern Mariana 
Islands,'' Insight Policy Research, USDA, Food and Nutrition Service, 
August 2016, https://www.fns.usda.gov/snap/assessing-feasibility-
implementing-supplemental-nutrition-assistance-program-commonwealth-
northern.
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    USDA and Congress have made some progress in recent years in taking 
steps to address the needs in the territories, document the challenges, 
and assess the feasibility of changes that would be needed to bring 
parity to the food assistance provided to these territories' residents, 
but more needs to be done, in consultation with the territories, to 
achieve parity in food assistance.
    End SNAP's 3 month time limit, which excludes many unemployed or 
underemployed workers. As described above, one of SNAP's harshest rules 
limits unemployed individuals aged 18 to 50 not living with children to 
3 months of benefits in any 36 month period when they aren't employed 
or in a work or training program for at least 20 hours a week. This 
rule is a time limit on benefits and not a work requirement, as it is 
sometimes described, because states are not required to provide any way 
for an individual to meet the requirement--and most do not. Thus, an 
individual looking for work, or working fewer than 20 hours, will lose 
food assistance after 3 months.
    Those subject to this rule have extremely low incomes and often 
face barriers to work such as a criminal justice history, racial 
discrimination, or health impairments. They also tend to have less 
education, which is associated with higher unemployment rates. In 
addition to being a harsh policy that takes critical food assistance 
away from people who need it without any significant positive impact on 
employment, the rule is one of the most administratively complex and 
error-prone aspects of SNAP law. Many states also believe the rule 
undermines their efforts to design meaningful work activities for adult 
SNAP recipients as the time limit imposes unrealistic dictates on the 
types of job training that will permit someone to continue to receive 
basic food assistance so they can eat. For these reasons, many states 
and anti-hunger advocates have long sought the rule's repeal or 
moderation.
    Congress suspended the time limit during the COVID-19 public health 
emergency in recognition of the pandemic's effects on the labor market. 
Rep. Adams through H.R. 4077, the Closing the Meal Gap Act of 2021, and 
Rep. Lee, through H.R. 1753, the Improving Access to Nutrition Act of 
2021, (both with numerous cosponsors) would end the time limit, 
restoring eligibility for many individuals who will have food 
assistance taken away once the public health emergency ends, regardless 
of their own circumstances, due to a misguided policy that has been 
shown to increase food insecurity while having no positive impact on 
employment.
    Raise participation rates among eligible older adults. Many older 
adults have limited income from Social Security and or Supplemental 
Security Income and could benefit from SNAP benefits, which before the 
pandemic averaged about $120 a month for households with members 60 
years or older. But only about half (48 percent in 2019) of eligible 
adults aged 60 and over participate in SNAP, though participation rates 
have risen modestly in recent years.\30\ Moreover, most who would 
qualify for SNAP also would qualify for Medicare Savings Programs, 
which defray Medicare premiums and/or cost-sharing charges for seniors 
near or below the poverty line who are not enrolled in the full 
Medicaid program, and for the Low-Income Subsidy for the Medicare Part 
D prescription drug benefit. But participation rates in these programs 
among low-income seniors also are very low. While these programs have 
similar eligibility rules, the differences can be confusing and older 
adults typically must apply for them via different duplicative 
processes and may not be aware of the assistance that is available.\31\ 
Tackling low participation rates across programs would address food 
insecurity as well as help low-income seniors make ends meet overall.
---------------------------------------------------------------------------
    \30\ Alma Vigil, ``Trends in USDA Supplemental Nutrition Assistance 
Program Participation Rates: Fiscal Year 2016 to Fiscal Year 2019,'' 
USDA, March 2022, https://www.fns.usda.gov/snap/trends-participation-
rates-fy-2016-2019.
    \31\ Medicaid and CHIP Payment and Access Commission, ``Report to 
Congress on Medicaid and CHIP,'' Chapter 3, June 2020, https://
www.macpac.gov/wp-content/uploads/2020/06/June-2020-Report-to-Congress-
on-Medicaid-and-CHIP.pdf.
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    Lower barriers to SNAP participation among certain immigrants and 
college students experiencing food insecurity. SNAP eligibility rules 
for immigrants and college students are very complicated. Many 
individuals in these groups who have low income and for whom assistance 
with affording food could ease hardship and help them improve their 
future health and economic well-being are not eligible for SNAP 
benefits. Others who do qualify are not aware they are eligible; are 
reluctant to participate out of concern about possible ramifications 
for their immigration status, even though those concerns are generally 
not accurate; or face barriers navigating SNAP's sometimes complicated 
and burdensome application procedures.
    Participation by eligible people who are immigrants and children in 
families that include immigrant adults has decreased substantially in 
recent years, according to USDA estimates, likely due in large part to 
the Trump Administration's efforts to discourage immigration and to 
change the public charge rules to include SNAP and other health and 
economic support programs. Between 2016 and 2019, the participation 
rate for eligible people who are immigrants dropped from 66 percent to 
55 percent and for children who are U.S. citizens who live with adults 
who are immigrants from 80 percent to 64 percent.\32\
---------------------------------------------------------------------------
    \32\ Vigil, op cit.
---------------------------------------------------------------------------
    We recommend Congress consider how to improve access to SNAP for 
low-income immigrants and college students and other groups who cannot 
qualify or who have low participation rates because of confusion or 
because they face enrollment barriers.
    Allow formerly incarcerated individuals with drug felony 
convictions to participate in SNAP. Denying food assistance to people 
who have completed their sentences makes it harder for them to get back 
on their feet and may contribute to high re-arrest rates, which are up 
to 50 percent for people with prior drug offenses.\33\ Given that 
formerly incarcerated people also face barriers and discrimination in 
employment and housing, it's not surprising that 91 percent are food-
insecure.\34\ While most states have restored eligibility to some 
individuals affected by the ban, these limited restorations leave too 
many individuals who have completed their sentences and are complying 
with parole or probation ineligible for SNAP. SNAP's drug felon ban 
also disproportionately affects people of color, reflecting--and 
amplifying--the stark racial disparities in the criminal justice 
system, with impacts extending to these individuals' children and other 
family members.\35\
---------------------------------------------------------------------------
    \33\ Louis Reedt, et al., ``Recidivism Among Federal Drug 
Trafficking Offenders,'' United States Sentencing Commission, February 
2017, https://www.ussc.gov/research/research-reports/recidivism-among-
federal-drug-trafficking-offenders.
    \34\ Emily Wang, et al., ``A Pilot Study Examining Food Insecurity 
and HIV Risk Behaviors Among Individuals Recently Released From 
Prison,'' AIDS Education and Prevention, Vol. 25, Issue 2, 2013, pp. 
123-123, https://doi.org/10.1521/aeap.2013.25.2.112.
    \35\ Marc Mauer, ``The Changing Racial Dynamics of the War on 
Drugs,'' The Sentencing Project, April 2009, https://
www.sentencingproject.org/publications/the-changing-racial-dynamics-of-
the-war-on-drugs/.
---------------------------------------------------------------------------
    Support Tribal sovereignty and strengthen food security in Native 
communities. American Indians and Alaska Natives experience food 
insecurity at a much higher rate than white people. The 2018 Farm Bill 
included administrative improvements to the Food Distribution on Indian 
Reservations (FDPIR) program, which provides food packages to Native 
American families who live in designated areas near reservations and in 
Oklahoma as an alternative to SNAP. The bill also authorized 
demonstration projects through which Indian Tribal Organizations, 
instead of USDA, can directly purchase commodities for their FDPIR food 
packages. Congress should work with tribal stakeholders to build on 
this progress and strengthen food security in Native communities.
Redesign SNAP Performance Measurement to be More Human Centered
    SNAP's current performance measurement system emphasizes preventing 
improper payments. States and USDA take their roles as stewards of 
public funds seriously and have a rigorous measurement system in place 
to assess the accuracy of eligibility and benefit determinations. 
States are assessed fiscal penalties if their payment error rates are 
persistently too high.
    When a household applies for SNAP it must report its income and 
other relevant information; a state eligibility worker interviews a 
household member and verifies the accuracy of information using third-
party data matches, paper documentation from the household, and/or by 
contacting a knowledgeable party, such as an employer or landlord. When 
errors do occur they are overwhelmingly from unintentional mistakes by 
applicants or recipients, eligibility workers, or other state agency 
staff, rather than fraud.
    It is critical that SNAP have a strong system in place to assess 
and address program integrity. But it is also important that the 
measures states and USDA take do not undermine the program's purpose to 
deliver food assistance to households that face difficulties affording 
an adequate, healthy diet.
    Currently information is not available to policymakers or the 
public about how well SNAP is working in terms of the human experience 
of accessing benefits. The 2018 Farm Bill eliminated SNAP performance 
bonuses, which were tied to low or improving payment error rates, 
participation rates among eligible people, and delivering benefits 
promptly within Federal timelines. But states still are subject to 
fiscal penalties for high payment error rates, which places a 
disproportionate emphasis on payment accuracy over access for low-
income families.
    In collaboration with the Center on Budget and Policy Priorities, 
Code for America developed a National Safety Net Scorecard to put 
forward a package of metrics that Federal and state governments could 
use to track program performance over time and across states or other 
jurisdictions.
    The measures in the National Safety Net Scorecard measure 
performance across three categories:

   Equitable access: These metrics help assess whether the 
        programs are open to all eligible people. Are online, 
        telephone, and in-person services available and accessible to 
        all people? How difficult is it to apply? Are people who apply 
        satisfied with their experience?

   Effective delivery: Measures in this category examine the 
        smoothness of the process after a person applies. How long does 
        it take to receive benefits? How common is it for cases to be 
        denied for procedural reasons as opposed to reasons related to 
        financial eligibility? Are people who remain eligible able to 
        successfully maintain eligibility?

   Compassionate integrity: Finally, this category assesses 
        whether people are receiving the benefits to which they are 
        entitled. What share of eligible people participate? How 
        accurate are eligibility and benefit determinations? How smooth 
        is the appeals process?

    Some states measure some of these types of metrics as part of their 
operations or to make the case to the public that they are running 
successful programs. But there is a need for leadership to make 
progress toward this vision through Federal legislation in the farm 
bill, administrative action, and further state innovation.
Ensure SNAP Program Operations and Oversight Keep Pace With Technology
    The farm bill presents an important opportunity to reassess program 
operations and ensure SNAP keeps pace with technological and other 
changes. The pandemic has presented challenges and opportunities that 
resulted in the program adapting quickly out of necessity. Some 
technological changes, such as online shopping and remote eligibility 
practices, that probably would have occurred over time did so instead 
on an accelerated timeframe. Below are some areas Congress should 
consider to support these advancements.

   Online purchases. Probably the best example of an 
        accelerated timeframe around technology is the rapid expansion 
        of online purchases during the pandemic. Though less than ten 
        percent of SNAP benefits are redeemed online, USDA rapidly 
        expanded the number of states and the number of stores that 
        allow recipients to redeem their benefits online. The 
        provisions from the last two farm bills that piloted and 
        studied online benefits were a big reason that USDA, states, 
        and retailers were able to expand so quickly during the 
        pandemic. This next farm bill presents an opportunity to 
        continue the progress from recent years and improve access to 
        online benefits for participants.

   EBT. The original roll-out of EBT revolutionized SNAP 
        benefit delivery, beginning more than 30 years ago. The 
        Committee should consider, in collaboration with USDA and other 
        stakeholders, whether to incorporate advancements in retail 
        transactions, such as mobile payment options, while protecting 
        program integrity and ease of use for participants.

   The National Accuracy Clearinghouse (NAC). The 2018 Farm 
        Bill provided that USDA and states should expand to nationwide 
        a pilot program that several states use to share data on their 
        SNAP participants and prevent individuals from participating in 
        more than one state. An evaluation of the NAC found that less 
        than 0.2 percent of SNAP participants were participating in 
        multiple states. In addition to improving program integrity, 
        the NAC holds promise as a customer service improvement for 
        applicants because it can help participants who move from one 
        state to another disenroll more quickly from benefits in their 
        former home state so that their new home state can open their 
        SNAP case. Congress should monitor the roll out of the NAC 
        nationwide, which is underway and expected to accelerate later 
        this year, to ensure that it does not pose challenges to 
        privacy or vulnerable individuals' access to benefits.

   Ensuring accessibility of certification and recertification. 
        Gradually over recent decades, SNAP and other income support 
        and health programs have transformed from very labor intensive 
        in-person application and recertification processes to making 
        far greater use of online, telephone, and other technological 
        tools. States adapted and expanded these tools very quickly 
        during the pandemic when they needed to move to remote 
        operations. These tools, combined with the temporary 
        flexibilities that Congress and USDA allowed during the 
        pandemic, helped states manage their workloads and helped 
        participants gain and maintain access to the program.

      Congress should consider revisions to SNAP rules that would 
        support the use of technology in the SNAP certification 
        process. For example, telephonic signatures and text messaging 
        have shown promise in improving access for some households. 
        Making use of available electronic data sources, when relevant, 
        timely, and accurate can lower documentation burdens on 
        households and state agencies. However, technology does not 
        work for all SNAP households. For example, some households do 
        not have telephones or internet access. Some households, 
        including some with elderly or disabled members and those 
        experiencing homelessness, may prefer an in-person process 
        rather than navigating online and telephone communications. It 
        is important that the program balance the use of promising 
        technology with ensuring that states' certification processes 
        are accessible to everyone.
      The recertification process is another area the Committee could 
        focus on where technology could be used to improve customer 
        service. Most households need to reapply for SNAP every year 
        (or for every 2 years for households with elderly or disabled 
        members) and are required to submit periodic reports about 
        changes in income and some other circumstances halfway through 
        that period. But the recertification and reporting processes 
        present hurdles for many households that result in eligible 
        households losing out on benefits because of mail issues, 
        difficulty scheduling telephone issues, a verification problem, 
        or other procedural issues. Funding to support states making 
        more use of certain technological advancements such as text 
        messaging, reliable third-party data sources, or information 
        from other programs could help keep eligible households 
        connected to SNAP and save state agencies from needing to spend 
        more time processing re-applications from households that lose 
        benefits for procedural reasons.

   Using data for outreach and enrollment. Many individuals and 
        families who have low incomes qualify for a package of benefit 
        programs, but they often need to apply separately and provide 
        paperwork multiple times to apply for and maintain different 
        benefits. In some cases, a program can use data (such as 
        income) that another trusted program has collected and verified 
        to reduce burdens on state and local administrators and enable 
        applicants to avoid having to provide the same paperwork to 
        multiple offices. For example, all participants in SNAP, 
        Medicaid, and Temporary Assistance for Needy Families monthly 
        cash assistance are ``adjunctively eligible'' for WIC, which 
        means the WIC program does not need to redetermine financial 
        eligibility, but the family still must contact the WIC agency 
        to apply.\36\
---------------------------------------------------------------------------
    \36\ Sonal Ambegaokar, Zoe Neuberger, and Dorothy Rosenbaum, 
``Opportunities to Streamline Enrollment Across Public Benefit 
Programs,'' Social Interest Solutions and Center on Budget and Policy 
Priorities, November 2, 2017, https://www.cbpp.org/research/poverty-
and-inequality/opportunities-to-streamline-enrollment-across-public-
benefit.

      In other cases states can use information provided to one program 
        to trigger an application for another program, using a check 
        box, for example, or for targeted outreach. These kinds of 
        linkages hold substantial promise to improve efficiency and 
        program participation but can be tricky for states and the 
        Federal Government because of different administrative and 
        jurisdictional structures. But leadership from Congress in 
        creating the legal authorities and the expectation of cross-
        program enrollment, collecting and sharing data and best 
        practices, and offering funding to support these efforts could 
        help elevate the issue and smooth the way.
Conclusion
    SNAP is a highly effective program that alleviates hunger and 
poverty, has positive impacts on the long-term outcomes of those who 
receive its benefits, and supports people in low-paid jobs and those 
between jobs. While there are ways in which SNAP could be improved, I 
urge you to protect SNAP so that it can continue to play its critical 
role in supporting food security and to make changes that will 
strengthen its effectiveness, particularly among racial and ethnic 
groups with high rates of food insecurity due to historical structural 
inequities.

    The Chairwoman. Thank you to all our witnesses for your 
very powerful and informative testimony.
    At this time, Members will be recognized for questions in 
the order of seniority, alternating between Majority and 
Minority Members. You will be recognized for 5 minutes in order 
to allow us as much time as possible to get through questions. 
Please keep your microphones muted until you are recognized in 
order to minimize background noise.
    I will now begin with the gentleman from Massachusetts, Mr. 
McGovern. If you are on the panel, you are recognized for 5 
minutes for your questions.
    I am sorry. Mr. McGovern is not here. I now recognize the 
gentleman from Illinois, Mr. Rush.
    How about the gentleman from California, Mr. Carbajal?
    The gentleman from Florida, Mr. Lawson, you are now 
recognized for 5 minutes.
    Mr. Lawson, we can't hear you. If you can unmute yourself.
    Mr. Lawson. Okay. I think you can hear me now.
    The Chairwoman. Yes, sir. Please begin.
    Mr. Lawson. Okay. Madam Chairwoman and Ranking Member 
Bacon, I want to thank you all for having this hearing. One of 
the first things that I want to talk about is--and I guess this 
goes to Mr. Beal. In your testimony, Mr. Beal, you mentioned 
that the SNAP program kept a large number of small grocery 
stores in business. They might not exist right now during this 
pandemic. Could you further elaborate on that? And I am very 
interested in that statement that you made.
    Mr. Beal. Certainly, Representative. Yes, we operate stores 
on both sides of the state line. We operate stores in more 
affluent areas. We operate stores in more demographically 
challenged areas. As an example of what I mean by that, we 
recently--actually last July--opened a brand-new store. It was 
a replacement store that was in an area where over 25 percent 
of our total store sales are SNAP customers. And our store was 
losing money in that location. It was underserving the market. 
And we opened a new store in what would have otherwise been 
considered a food desert. And the residents and all the 
customers around that store were so grateful. They consider it 
their store. We are so proud to be a part of the community.
    We know of another situation in Kansas City where a grocer 
closed the doors and couldn't get another grocer to go in. It 
was purchased by the landlord, who was a nonprofit agency in a 
predominantly Black customer base, as well as administrative. 
Our company worked with that landlord who now became a grocery 
owner for 18 months to help them get into the business, to 
learn the business. But they would not have a store in that 
area but for the SNAP program because so many of their 
customers and constituents were on SNAP benefits. And we did 
this because we are a community partner. We didn't charge 
anything for paying all their bills, for paying their payroll. 
It wasn't our bank account. It was their cash. But we provided 
all those administrative services for 18 months to help them 
get in the business. And I assure you that had it not been for 
SNAP, that store wouldn't have survived, and neither would our 
new store have opened up in the area that we opened the new 
store last July.
    Mr. Lawson. Okay. Thank you. Now, Mr. Beal, there are 
specific ways that Congress can support these retailers and 
growers in the upcoming farm bill to make it easier for them to 
participate in SNAP online purchasing program. Do you have any 
recommendations that you could give to us for this farm bill?
    Mr. Beal. Certainly. The online SNAP process is very 
complicated. There are really three areas that I would like to 
share with the Committee that could be very helpful. First, NGA 
in particular would love the USDA to create a technical 
assistance center, and we believe that will go a long way 
toward solving these three issues. But, the first thing is 
there are no clear guidelines in terms of what it takes to get 
certified as an online SNAP grocer. There is nowhere to go. 
There is no central repository, no portal, anything we can go 
to. And so, each retailer is kind of out there on their own to 
try and figure out how to get online-certified.
    Second is that when you do attempt to do this, you can send 
a letter of intent to the USDA, and it is like sending 
something out into a black hole. We don't get any kind of 
acknowledgment that the letter of intent or the inquiry has 
been received. You don't hear anything back from them. It could 
be 6 weeks, it could be 9 weeks, it could be something longer. 
You don't even have any idea whether you sent it to the right 
party.
    And third, when it comes to certifying for online SNAP, the 
certification process is much different from what the states do 
with the WIC program, where the whole platform is certified. 
But with online SNAP, it is every single banner that an 
operator operates that has to get certified, even if the 
platform itself is the same and the only difference is the 
pricing on the products and the name on the banner. And, as I 
mentioned, we operate a number of different banners in our 
company; predominantly two, but we operate four different 
banners overall. And so, for us to certify--and that 
certification could be anywhere from 9 months to a year to get 
certified you have to go through that process with every single 
banner and not with the individual platform. So it is very, 
very cumbersome. And if the Committee could address those 
issues, particularly with a technical assistance center, it 
would be much appreciated by independent grocers.
    Mr. Lawson. Okay. Thank you. Very good. Madam Chairwoman, 
my time is running out, but if I get a chance at the end to 
talk a little bit more about students' access to SNAP. With 
that, I yield back.
    The Chairwoman. Thank you so much, Mr. Lawson.
    I now recognize the gentleman from Nebraska, Ranking Member 
Bacon.
    Mr. Bacon. Thank you, Madam Chairwoman, and I appreciate 
the opening comments from all three of our panelists today. And 
my first questions are for Mr. Giacomi and Mrs. Cox. How can we 
better promote healthy foods for SNAP recipients? What are some 
logical, good ways we could help urge healthier eating? And I 
will go to Mr. Giacomi first.
    Mr. Giacomi. Thank you, Representative. I am very proud in 
the work that we do here on our SNAP Nutrition Education 
Program. I would love to see further investment in that 
program. That program goes out and meets people where they are 
at, looking at their dietary needs, and provides them with 
nutrition education, with exercise, with meals, things of that 
nature that allows that.
    Second, I would say that, as Mr. Beal mentioned in his 
testimony, healthy nutrition incentive programs are definitely 
a way in which we could promote healthier eating. If you 
incentivize individuals by saying we will provide you with a 
rebate refund, additional SNAP dollars for all fruits and 
vegetables, things of that nature that you purchase, I believe 
that in itself would promote and would allow individuals to 
purchase these items and further stretch out the benefits that 
they receive each month.
    Mr. Bacon. Thank you, Mr. Giacomi. Mrs. Cox?
    Mrs. Cox. Thank you. Yes, so SNAP enables households to 
afford more healthy food, right? The fact that they are able to 
get these benefits, the other income they have, they are able 
to shuffle it around and purchase the food.
    A couple of things. So, SNAP benefits, since they only can 
be purchased in grocery stores, they are actually more likely 
to purchase food that is healthier because the food in a 
grocery store is usually healthier than food that is purchased 
outside at a restaurant. Also, as both Mr. Giacomi and Mr. Beal 
said, there are the fresh incentives. And so, in a prior 
position that I had at AARP Foundation, we actually operated a 
pilot for older adults in Fort Lauderdale, Florida, where those 
who had hypertension, high blood pressure, or obesity, we 
actually gave them a gift card to purchase at a grocery store 
where they could only buy fresh fruits or vegetables or frozen 
vegetables. And we saw real change in their A1C, their 
hypertension, and their high blood pressure 3 and 6 months 
later. So, while the research doesn't show that restricting 
food makes people purchase more healthy food, we do see that 
incentives--when you are actually giving people Double Up Bucks 
or some other incentive to purchase fresh fruits and 
vegetables--works.
    Mr. Bacon. Thank you. I find it very insightful. A question 
for Mr. Beal. We have had some discussions in the past about 
what Mrs. Cox referred to about restricting what foods you 
could buy if they are unhealthy. And there is a lot of debate--
is cranberry juice healthy and diet sodas not? I mean, there 
are a lot of different debates on this. But the main thing that 
we hear from--is from the grocery stores--how hard it would be 
to administer a program like that. Could you give us some 
insights on that as well? Because I think that that is a key 
factor in limiting what we can really do here. Go ahead.
    Mr. Beal. Thank you for offering me a chance to answer that 
question, because in our experience, we do participate in the 
Double Up Food Bucks Program. I testified in November 2016 
regarding that, and we have been running that program now for 7 
years, and, as in Mrs. Cox's testimony, that has resulted in 
better food nutrition for those beneficiaries.
    So, before we switched POS systems, we had what is called a 
loyalty program. And you may be familiar with a loyalty card 
that many grocers offer where you can track the purchases and 
stuff. And we had a system that was what I would call a 
Cadillac or the Maserati that made it very, very easy for us to 
conduct the Double Up Food Bucks Program. After we were forced 
to switch POS programs for other issues, we found out it became 
very challenging because the issue is on the Double Up Food 
Programs there is incentives provided for fresh produce 
purchasing, but the SNAP benefit is a tender type, okay? And so 
that transaction needs to know that it is only paying for, 
under the Double Up Food Bucks, fresh fruits and vegetables. 
And typically, the tender type doesn't know anything about what 
is in the order. It just knows the totals. And that is the 
reason for having and requesting a technical assistance center 
through the USDA that can help grocers marry up the two, what 
is in the order along with the payment.
    We work with a local agency, nonprofit agency by the name 
of Mid-America Regional Council, MARC, that administers the 
program. And it is very cumbersome, but we do it in our stores, 
all 26 stores, to help provide that benefit. We're getting 
ready, MARC is getting ready to write a grant similar to what 
Mrs. Cox mentioned where we can participate in a program where 
doctors will write scripts that would be funded by a gift card 
program through the GusNIP program for SNAP customers, Medicaid 
customers, to just purchase fresh fruits and vegetables. But 
that is what the challenge is, is that the form of payment 
doesn't realize what is in the order. And you need to know that 
to make sure that you are only paying for what you want.
    Mr. Bacon. Thank you very much. My time has expired.
    Mr. Beal. Sorry.
    The Chairwoman. Don't be sorry. That was really good 
information. Thank you.
    I now recognize the gentleman from Massachusetts, Mr. 
McGovern. You can unmute and begin your questioning for 5 
minutes.
    Mr. McGovern. Thank you, Madam Chairwoman. First of all, 
thank you for holding this hearing. And I want to thank the 
Administration for all it has done during the public health 
emergency to improve access to SNAP and the important but 
overdue increase in benefits for the Thrifty Food Plan.
    And I want to start by reminding everyone that COVID showed 
us just how easily people can fall from stability into 
instability. And while our world continues to be unpredictable, 
it is essential that people know that there is support for them 
when times get hard.
    So yesterday, I had a meeting with Dawn Pierce, who is from 
Idaho. She is going to be speaking at one of the upcoming 
listening sessions for the White House Conference on Hunger, 
Nutrition, and Health. But a few years back, she was working as 
a hospice nurse. And despite being someone who was taking care 
of other people's loved ones, she found herself in a place 
where she couldn't financially take care of her own loved ones. 
And she told me her story. And the thing that stuck out to me 
the most was that she was ridiculed multiple times at the 
grocery store when she was buying food for her family using her 
EBT card. In fact, she was told that, quote, ``She didn't look 
like someone who was on food stamps.''
    And the reality is that the stigma starts with the rhetoric 
that comes out of this place, out of the Capitol. The 
stereotypes about people using SNAP are harmful and simply not 
true. And I know these stereotypes are advanced because there 
are some who are trying to push an agenda to try to diminish 
the program or cut the program. The fact of the matter is, is 
that \3/4\ of SNAP households with at least one working-age, 
non-disabled adult work while receiving SNAP. And we know that 
the harsh time limit for SNAP of 3 months of enrollment without 
a job does not increase employment. It throws people off of 
benefits and increases hunger. And yet there are people who 
still are holding onto that as something that we need to 
enshrine.
    The bottom line is that people who aren't working, and who 
are on SNAP, are often children, seniors, and disabled adults. 
And most participants who can work, do so. So, I really get 
frustrated when people spend their time trying to make it 
harder for people to access SNAP as if everybody's dream is to 
be financially insecure enough to be on SNAP. Access to SNAP 
helps people move their lives forward faster.
    And so, we need to start treating people with dignity, and 
how we draft and pass the next farm bill, starting here in this 
room, can send one of two messages: that we either care about 
people and we understand the importance of SNAP for people who 
are experiencing hard times, or we do not.
    And I will just also say that many of the waivers put in 
place during the COVID-19 emergency just made life easier for 
people. And it will be a missed opportunity on our part if we 
do not reauthorize them before they expire.
    So let me end by saying that if seeing your constituents 
and Americans across this country waiting in lines at food 
banks during COVID doesn't move us all to do something more and 
appreciate the importance of programs like SNAP, I am not sure 
anything will. And let me be clear. I will not support any farm 
bill that guts the nutrition safety net for millions of 
Americans. I am not going to support passing legislation that 
increases hunger in this country. We have an opportunity to 
have a more thoughtful discussion in the aftermath of COVID. 
Again, I want to thank the Administration for their leadership 
and their sensitivity during this difficult time.
    SNAP is an important program that deserves our support. And 
by the way, it also helps our farmers. There is an economic 
stimulus to this benefit as well. So, I just want to go on 
record to say as we look at the next farm bill, we need to find 
ways to strengthen the program, and we need to learn from its 
successes in the recent months. And again, Madam Chairwoman, 
thank you for your leadership on this, and I look forward to 
working with you as we move forward on the next farm bill.
    The Chairwoman. Are you yielding back? You still have time, 
Mr. McGovern.
    Mr. McGovern. Well, I mean, again, the only other thing I 
would say is that it is important for us to talk to people with 
lived experiences because, oftentimes, we say things in this 
Committee or on the House floor that may make a good soundbite 
in some circles but do not reflect the reality of what people 
are experiencing in this country. So, I have been talking to a 
lot of people with lived experiences, and SNAP has been a 
lifeline for them and their families. So, again, this needs to 
be an important part of the farm bill, one in which we 
strengthen the program and not try to punish people or try to 
diminish people who need the benefit.
    And with that, I yield back.
    The Chairwoman. Thank you, Mr. McGovern. Thank you for your 
partnership. Now, your time has expired.
    I now recognize the gentleman from Pennsylvania. Mr. 
Thompson, you are recognized for 5 minutes for questions.
    Mr. Thompson. Thank you, Madam Chairwoman.
    Mr. Beal, when trying to get into the weeds, which is what 
we need to do with this farm bill, is preparing for the next 
one. And thank you all for your kind comments about the 2018 
Farm Bill. I was the Nutrition Subcommittee Chairman during 
that process. It is near and dear to my heart. As a young 
couple, my wife and I, not under the Agriculture Committee 
jurisdiction, but Education and Labor, we were on the WIC 
program starting out as a young couple when we were expecting 
our first child, so I appreciate these programs. I want to make 
sure they are done right. I want to make sure that they are 
pathways to opportunity, meeting the immediate nutritional 
needs of these families who find themselves usually temporarily 
in financial distress. And the question is, how do we help them 
also move out of financial distress?
    But my question is more of a technical question for you. I 
just had the check in. When section 4006 of the 2018 Farm Bill 
was drafted, when that was done, policymakers were very clear 
it was temporary. There basically was a moratorium on the 
processing fees because that had gotten to be a problem for our 
vendors, our independent grocers, our large grocery stores, our 
convenience stores. And so, we basically did a 5 year 
prohibition. But we also asked that, while providing interim 
certainty, that an expectation that stakeholders would all come 
to the table to coordinate and find practical compromises for 
this next farm bill, which, as we all know--so we have 
basically just under \1/3\ of this farm bill is left. Nineteen 
months from now it expires. We need to be prepared to 
reauthorize.
    To the best of your knowledge, can you tell me about how 
that has been complied with? What has been the effort to 
stakeholders to come together to kind of coordinate and find 
practical compromise with the processors on these fees, so we 
have some suggested recommendations and solutions going into 
the next farm bill.
    Mr. Beal. Thank you for your question, sir. I can only 
speak from personal experience, but I will tell you of a recent 
experience that I had that kind of demonstrates what the 
quandary is. And, I am not a member of the board of NGA or FMI, 
which is Food Marketing Institute, but I do know that our 
wholesaler, Associate Wholesale Grocers out of Kansas City, it 
is a significant independent co-op. They held a roundtable 
discussion about 3 weeks ago Friday, maybe 4. Senator Marshall 
was there, and it was a discussion concerning EBT and 
electronic fees. You might be impressed with some of the 
parties that were there, but representatives from Kroger, from 
Walmart, many independent grocers, many state association 
convenience stores were there, and they were places for members 
of the banking community to be there. MasterCard and Visa did 
not send anybody to represent to sit down and talk about that, 
about the issues facing us.
    I do know that most grocers make, on average, if they are 
lucky, one percent. I am not talking about the big public 
companies.
    Mr. Thompson. Yes.
    Mr. Beal. And I will tell you that our credit card fees and 
debit fees, which debit is much preferred, was more than 1.12 
percent of our business. And we don't get 100 percent of our 
tenders paid with credit card fees. But every time that there 
is a class-action settlement with the industry, and it has 
happened at least three times over the last 24 years I have 
been back in the grocery business, the rates just go up that 
the retailers get charged to pay for their fees. And I do know 
we have had a number of discussions amongst committees, other 
grocers about how the argument that there is so much fraud and 
stuff that is out there that they have to pay for with their 
fees can be easily simplified and totally abolished with the 
use of a PIN, with a credit card like they do in the majority 
of Europe. And so, the technology is out there. That is the 
same credit card companies, Visa and MasterCard. But there has, 
to my knowledge, been no discussion jointly with the banking 
industry and Visa and MasterCard to try and reduce the fees and 
rein them in. And we have the highest fees, credit card, 
electronic payment fees of any country in the world that I am 
aware of. And many countries have done something about it. So, 
we would welcome the opportunity.
    Mr. Thompson. Well, I appreciate the effort that was made 
on this, very much so. And I am disappointed in, the 
stakeholders, as you had mentioned, that failed to show that 
this was--the expectation was set forth in the farm bill was 
for all the key stakeholders, not just the folks in the grocery 
business, the retail business, but quite frankly, also the 
processors. And, I would encourage them. We have a little shy 
of \1/3\ of the term of this farm bill left to go, I guess, 
before this one expires. And my expectation is the processors 
would come to the table and join you all to have a part, 
whether you were able to come to some agreement or some 
reasonable agreement that is left to be seen. But there is no 
excuse not to be at the table for the discussion.
    Mr. Beal. Can I clarify one thing just for the sake of 
factual.
    Mr. Thompson. Please.
    Mr. Beal. Any time we are working with electronic payments, 
there is a processor which really just takes all the payments 
from the retailer and sends them off to basically MasterCard, 
Visa, and Discover.
    Mr. Thompson. Right.
    Mr. Beal. So, it is not really the processors who charge a 
fixed fee per transaction, and it is well less than 1 in most 
cases, at least in our industry. It is Visa, MasterCard, 
Discover, Amex--the most expensive that actually charge the 
fees that we get hit with. And the chargebacks that we are 
still getting hit with, even though they have come out with 
security on the EMV cards, still exist to this day, regardless 
of what they say. We would welcome that opportunity, but it is 
going to take a push from Members of Congress and from the 
committees to make that happen in my opinion.
    Mr. Thompson. Thank you very much. Thank you, Madam 
Chairwoman.
    The Chairwoman. Thank you, Ranking Member Thompson.
    I now recognize the gentleman from California. I remind 
Members to keep their comments to 5 minutes. We extend some 
grace to our Ranking Member because he is our Ranking Member. 
Thank you.
    Mr. Carbajal, please unmute and begin.
    Mr. Carbajal. Thank you very much, Madam Chairwoman, and 
thank you to the witnesses here today testifying.
    SNAP is critical to ensuring millions of Americans do not 
go hungry. When SNAP recipients use their benefits, Congress 
should not be overly scrutinizing every single purchase. We 
should let families make decisions, as other families do, that 
are best for them.
    I certainly share the goal of many of my colleagues 
interested in promoting healthier eating by SNAP recipients and 
making sure that, like the rest of America, they get as much 
education as possible. But a few of my colleagues are doing 
more to regulate the ability of a SNAP recipient to buy a bag 
of chips than they are to ensure that someone purchasing an AR-
15 is not a danger to others or themselves and/or qualified to 
own such a gun.
    We also don't see near this level of scrutiny when the 
United States Government provides oil companies with subsidies. 
Sure, they could spend those subsidies however they want. We 
know that the USDA has proven that dietary habits of SNAP 
participants and non-participants are very similar. We know 
that participation in SNAP is linked with improved nutritional 
outcomes, compared to non-participants at similar income 
levels. We also know that SNAP is a successful public-private 
partnership, and for every $1 the government spends on SNAP, up 
to $1.50 is returned to the economy. There is a positive return 
to the economy from this very important program, and there is 
no evidence that SNAP purchases are contributing to poorer 
health outcomes.
    Mr. Beal, can you elaborate on what benefits you see 
consumers and businesses receiving from a system that 
incentivizes healthy food choices instead of limiting what food 
SNAP recipients can purchase?
    Mr. Beal. I am not exactly certain what you are asking, but 
I can tell you from our participation with the Double Up Food 
Bucks Program, and not only do we work with MARC, the local 
agency, but the University of Kansas Medical Center, and they 
have actually done studies on improved health outcomes, similar 
to what Mrs. Cox mentioned with regard to the prescription 
program.
    I also can tell you that when I have worked with the State 
of Kansas and Missouri--particularly Kansas, when they were 
considering a sugar tax on products that are being sold in 
stores--that it is very similar to the to the situation where 
we talked about restriction of certain food choices. Where the 
industry, the retailers, the people that have to abide by these 
rules and regulations would be left in a quandary and a great 
deal of uncertainty as to what items would qualify if we 
started going down that road to limit choice. One person's 
version of what is healthy compared to somebody else and we 
could get nutritionists who would generally agree, but 
necessarily not agreeing on everything would be a bureaucratic 
nightmare for the USDA, but also for all the grocers that are 
asked to enforce a program and honor the program. And I would 
expect that there would be compliance issues and inspections, 
like there are today.
    And so, not knowing what the specifics would be of what 
items would qualify or not, but to allow customers the choice, 
my personal view is--not NGA's--that that incentives like what 
we are talking about with the Double Up Food Bucks and with the 
prescription program, where we can actually focus on people's 
health outcomes and healthier eating, is a very, very strong 
way to go and would maximize the opportunities for people to 
improve health outcomes as well. I don't know if I answered 
your question.
    Mr. Carbajal. Thank you. You did very good for not 
understanding my question completely. So, you did great. Thank 
you.
    Mrs. Cox, in your testimony, you mentioned how food 
insecurity can cause long-term harm to children and families. 
Can you speak more to how hunger can impact life outcomes, and 
conversely, the benefits of SNAP on educational achievement and 
health outcomes?
    Mrs. Cox. Sure. Thanks for the question. So, we know that 
food insecurity impacts a child's ability to learn, pay 
attention in school, and grow. And so, research shows that 
children participating in SNAP, they face lower risk of 
nutritional deficiencies and poor health, which can improve 
their health over their lifetime. Also, SNAP helps children 
succeed in school, right? We understand that when children are 
hungry, they are not able to pay attention and they are also 
having behavioral issues.
    There was a study that found that test scores among 
students in SNAP households are highest for those receiving 
benefits 2 or 3 weeks before the test. So, that suggests that 
SNAP can help students learn and prepare for tests and that 
when benefits run out and families are struggling for 
groceries, children's ability to learn is diminished.
    To the last piece of just kind of the importance of SNAP 
for children overall, when children are fed, they are able to 
learn, they are able to pay attention, and they are able to 
grow. And I think that SNAP is an investment in long-term 
outcomes for our children and the health of our country.
    Mr. Carbajal. Thank you very much. I am out of time. I 
yield back, Madam Chairwoman.
    The Chairwoman. Right in the middle of a sip of water. 
Thank you so much, Mr. Carbajal.
    I now recognize the gentleman from Tennessee, Mr. 
DesJarlais. If you are on the platform, can you unmute and 
begin your questions?
    Mr. DesJarlais. I am. Thank you, Madam Chairwoman. I 
appreciate the opportunity to participate, and I thank the 
witnesses for participating in what is a very timely hearing. 
Considering the pending global food shortage, the record 
inflation, the price and cost of groceries, people are 
struggling all across the country. And, we want to make sure 
going into next year with this farm bill that we have all the 
information and data we need to make sure that this program is 
stable and that we can provide it to the people who really need 
it.
    And, Mr. Giacomi, I wanted to ask you a few questions as we 
prepare for this monumental task in the upcoming year. During 
the early days of the pandemic, your Connecticut Department of 
Social Services experienced a high of nearly 4,700 applicants 
arriving weekly, which was a 330 percent increase in the number 
of applications received weekly prior to the start of the 
pandemic. And now you are still receiving over 3,000 
applications per week, which is up 176 percent.
    So, I struggle a little bit with these numbers. One, I want 
to talk a little bit about work requirements; but two, 
businesses all across the country, certainly not just across 
Tennessee's 4th District, are struggling with labor shortages. 
And it is estimated from the U.S. Chambers of Commerce that we 
have 11.4 million job openings right now and up to six million 
unemployment workers. So, it looks like there is about two jobs 
for every worker that is out there looking for jobs. So, what 
are you finding in Connecticut in terms of people trying to 
find work that can't? Are you keeping any data on this? And are 
there any current requirements that people are seeking work?
    Mr. Giacomi. Thank you, Representative. The Department of 
Social Services does not track employment data to that extent. 
What we do track is we do have a very robust employment and 
training program, in regards to SNAP, which allows SNAP 
recipients not receiving TANF to have training in all sorts of 
industries, especially those that are most in need right now 
when you look at manufacturing, health care, et cetera. What we 
are seeing is individuals are still participating very 
robustly. They are attending our community college programs, 
our community-based organizations. They are able to come out 
with these degrees or certificates, and they are able to find 
employment, which then essentially--or hopefully--the intent is 
to allow them to be in a position to support themselves and no 
longer need assistance.
    Mr. DesJarlais. Yes, I mean, that sounds good, but it 
doesn't reconcile with those numbers. The numbers that you are 
still seeing that are applying in this program that you say is 
effective doesn't seem to be working based on those numbers.
    Again, trying to help us here as we write this farm bill, 
why do you suggest the necessity of broad-based categorical 
eligibility is so important when others consider it to be a 
loophole where people that are maybe wealthy are not 
necessarily qualified for SNAP continue to get benefits?
    Mr. Giacomi. So, I will say with broad-based categorical 
eligibility, it is not an automatic funnel into the program 
itself. While it allows us to give individuals, especially 
those in working families, the opportunity to apply and not 
necessarily be automatically rejected because of their gross 
income, they still do have to meet a net income test of a 100 
percent of the FPL before they are able to receive assistance. 
So, those individuals that perhaps are wealthier or otherwise 
that are able to apply and perhaps get in the door under a 185 
percent FPL still have to show us that their need is there, and 
they meet this net income test prior to us providing them any 
benefits.
    Mr. DesJarlais. Do you track at all? I mean, with the 
influx of illegal immigration across the southern border and it 
is record numbers, and this is going to obviously cause a drain 
on the SNAP program, are you tracking that at all?
    Mr. Giacomi. We do have numbers on those that are applying. 
I will say that if an adult comes in and is not identified as a 
permanent resident or in a qualifying category, they would not 
be eligible for assistance. So, we are not necessarily tracking 
the number of individuals that are coming in that we are 
denying because of this reason.
    Mr. DesJarlais. Yes, I am just going to interrupt because 
my time is short. That is a talking point that I say you can 
Google how many non-U.S. citizens receive SNAP, and it says it 
is very difficult to get it. But that is not actually true 
because if you are a child under 18 or if you say you are 
seeking asylum, which pretty much everybody is right now, it is 
refugee status or asylum-seeking. So, all these people do 
qualify for the SNAP program, and for some reason we just want 
to ignore that. There is going to be a global food shortage. 
Americans are hungry, and we need to worry about taking care of 
Americans first.
    And my time has expired. But I thank you for your 
participation.
    Mr. Giacomi. Thank you, Madam Chair, if I may respond 
really quickly to clarify my statement.
    [The information referred to is located on p. 922.]
    The Chairwoman. And we will get back to you on that, sir, 
please. I will give you time. Thank you.
    The gentleman yields back.
    I will just add something for the record. Only U.S. 
citizens and certain lawfully present non-citizens may receive 
SNAP benefits. Non-citizens who are eligible based on their 
immigration status must also meet other SNAP eligibility 
requirements, such as income and resource limits. Some 
specific, very specific, non-citizen groups are eligible 
without a waiting period, and they include refugees, asylees, 
victims of trafficking, Iraq and Afghan immigrants who worked 
as translators, interpreters, or were employed by the U.S. 
Government and received special immigrant visas. Other non-
citizens can be considered after a waiting period if they are a 
legal, permanent resident and have worked for 10 years or of 
another qualifying status for 5 years. So, the idea that 
undocumented immigrants who are coming over the border 
automatically qualify for benefits like SNAP is just not true.
    Mr. DesJarlais. Well, Madam Chairwoman----
    The Chairwoman. I now recognize the gentlewoman from New 
Hampshire----
    Mr. DesJarlais.--with all due respect, if you are going to 
reclaim my time, Madam Chair----
    The Chairwoman.--Representative Kuster, you have 5 minutes. 
You can unmute yourself and begin your questioning.
    Ms. Kuster. Thank you, Madam Chairwoman, and thank you for 
that important clarification. And I think that is an example of 
what Representative McGovern was talking about with the stigma 
and the inaccurate information that has been spread about 
people who need assistance to keep their children fed.
    I appreciate this hearing, and I know this is not directly 
germane to SNAP, but I do want to mention, particularly after 
the last exchange, that food security programs are interwoven. 
And I cannot let this opportunity pass without commenting on 
the approaching cliff that students are facing when the school 
meal pandemic waiver expires at the end of this month.
    Let's remember--and we have heard testimony today to this 
effect--children cannot learn when they are hungry. And I 
strongly believe that universal free school meals are a 
sensible investment in our young people and in the future of 
this country and our economy. Even if we don't pursue universal 
meals now--and by the way, for the record, I believe we 
should--letting these waivers expire will have a painful and 
abrupt impact upon students and their families, as well as 
creating an administrative nightmare for our schools. It does 
not need to happen this way. We have been at the ready to 
advance a reasonable extension in the House, and I hope that 
the Senate will get on board before we reach that cliff in just 
a few weeks.
    Now, having said that, let me turn back to SNAP and how we 
can use the 2023 Farm Bill to continue to strengthen this 
critical lifeline for American families. As I mentioned at our 
hearing earlier this spring with Under Secretary Dean, I 
believe that the SNAP program's administrative flexibilities 
granted since 2020 have made an incredible difference in 
mitigating hunger throughout the COVID-19 pandemic. I have 
introduced legislation to make permanent the telephonic 
signature flexibility, which allows states to process SNAP 
applications without expensive technology and saves applicants 
from having to make the trip to a state office just to fill out 
paperwork.
    Mr. Giacomi mentioned several of these COVID relief 
flexibilities in his testimony, including telephonic 
signatures. So, Mr. Giacomi, let me turn to you. Could you 
elaborate on the impact that the flexibilities have had on the 
ground, both for your department's administrative work and how 
families have been helped in securing benefits that they so 
desperately needed during COVID?
    Mr. Giacomi. Certainly. And thank you for the question. The 
flexibilities that we received throughout the public health 
emergency have been pivotal to our success in our ability to be 
able to serve the residents of Connecticut for the past 2 
years. It was in March of 2020 that, quite suddenly, our 
offices closed for a period of time due to a shutdown here in 
Connecticut. And we had to pivot to a new way of serving 
individuals that perhaps we had been unable to do prior or were 
not experienced in doing. So, things such as that telephonic 
signature that you mentioned allowed us to have these 
individuals call us on the telephone, not be burdened to come 
into the office to find a closed door, not to try and have to 
go to the library or other institution that has internet 
access, or things of that nature in order to receive 
assistance. They were able to call us up on the telephone.
    It also helped us to reduce churn, or the period of time 
that an individual is receiving and then perhaps is closed and 
goes back on to assistance. We were able to utilize some 
reports that we had of individuals that were in danger of 
closing at the end of the month, get on the telephone, call 
those individuals and say, ``Hey, listen, we have this 
opportunity for you to be able to renew your benefits directly 
from the telephone, if you are willing to take it,'' and keep 
those individuals receiving benefits and not having to worry 
about taking time off of work to come into the office or to 
complete a form or things of that nature. So, I think that 
flexibility, along with the others that were provided to us 
throughout the pandemic, as we said, were monumental and were 
definitely necessary in order for us to be able to do the work 
that we do.
    Ms. Kuster. Thank you. Shifting gears, I want to cover how 
we continue to strengthen SNAP in rural areas. And I think it 
is worth re-emphasizing that SNAP not only helps rural patrons 
but helps rural grocers remain economically viable. Mr. Beal, 
can you share briefly more from the retailer's perspective 
about how SNAP supports both stores and recipients in rural 
communities?
    Mr. Beal. Thank you for the opportunity. Even though we 
operate 26 stores in the greater Kansas City metro area, we 
have two stores that are in outlying areas, one that is in 
Harrisonville, Missouri, and its county seat. It is more rural. 
And I would say that most Americans underappreciate how many 
SNAP recipients live in rural America. I think there is a 
general perception that it is all in the big cities, where 
there are a fair percentage of SNAP recipients. But I would say 
not having enough money to afford groceries is an equal 
opportunity situation that isn't limited to the urban areas of 
town. And we see it in terms of----
    The Chairwoman. I am sorry, Mr. Beal, the gentlelady's time 
has expired.
    Ms. Kuster. Thank you. I yield back.
    The Chairwoman. Thank you. Thank you, Representative 
Kuster.
    I now recognize the gentleman from Indiana, Mr. Baird, for 
your questioning. You have 5 minutes. Please begin.
    Mr. Baird. Thank you, Madam Chairwoman. And thank you, 
Ranking Member, for holding this hearing about the SNAP 
program. And it is always insightful to me to hear from 
witnesses that are actually involved in the process, and I 
think that is important for us to make decisions on this 
Committee about the next farm bill.
    So, I am going to start. Mr. Beal, you mentioned and I took 
down three things that were concerning to you, one of those 
being that there are no clear guidelines. The second was no 
response. Many times you don't get a response back. But the 
third one you mentioned, you said certifying online banners and 
there may be more than one banner. And that may be, to me in my 
mind, was a barrier to try and make it a smooth process for 
getting folks moving. So could you elaborate on that, well, on 
the banners, please?
    Mr. Beal. Certainly, sir. What I mean by banner is a trade 
name. So, I mentioned that we operate Hen House stores and 
Price Chopper stores. Those are considered different banners. 
And under the online SNAP program, you have to certify each of 
the banners, even though the underlying technology--I am a lead 
investor in a medical technology company the platform itself is 
the platform that needs to be certified. When it comes to WIC 
situations, it is the platform that is certified, but with the 
online SNAP, it is the actual banner that needs to be 
certified. So, you have to go through the same process, the 
certification, even though there is a different name on the 
stores you operate.
    Mr. Baird. So, continuing in that vein, what do you see 
would be helpful to make that more efficient?
    Mr. Beal. To come up with a situation or requirements that 
are similar to WIC, where you get the platforms certified. And 
once the underlying technology is certified as being secure, 
efficient for the retailer, that after that, once the platform 
has been certified, you don't have to recertify it just because 
you operate different trade names on the retail stores.
    Mr. Baird. Thank you. I want to change just a little bit, 
but I do want to ask you, in terms of helping individuals make 
healthy choices for their diet, I think that is important. So, 
what do you think is an effective way for consumers to make 
those kinds of decisions while they are in the grocery store? 
And then, what can we do to stimulate them to stick to that 
kind of decision-making to their benefit long-term? So, if you 
have any thoughts there.
    Mr. Beal. Yes. And thank you for inquiring. As previously 
discussed, I think it is a general consensus that anytime you 
cook at home and you make your meals from fresh foods, that you 
are going to have healthier food outcomes than you would eating 
from fast food or from restaurants and stuff. So, any type of 
program incentives that could be a part of the SNAP program 
like the GusNIP program is today, that would encourage the 
eating of fresh fruits and vegetables. We hear nutritionists 
tell us, and we firmly believe that if you shop the outside, 
the perimeter of the store, you get in all the perishable 
departments, and that is where the healthier choices are for 
consumers. And so, any types of incentives along the lines of 
the GusNIP program are very, very highly recommended by us.
    Mr. Baird. Thank you. And I am going to turn to maybe all 
the witnesses with this question. Sometimes, good intentions--I 
am talking about government programs--the good intentions don't 
really end up helping the people that we would like to help in 
a manner that we would like to help. And so, what can we do? 
Because we are coming down with this farm bill. What what do 
you think we can do to improve our models and our modes of 
delivery that really makes this program more efficient? Mr. 
Beal, we can start with you.
    Mr. Beal. I would say one thing in particular is to reduce 
any future administrative, regulatory, and financial burdens 
for the administration of the program. Like what we were 
talking about with the interchange fees, electronic fees would 
be a start, not allowing restrictions on the SNAP program 
because, as I mentioned earlier, you will be--you being the 
Members of the Committee and the USDA--would be forced to make 
choices between winners and losers on the food products that 
are in the store. And we have over 100,000 SKUs (stock keeping 
units), or what you would call UPCs (Universal Product Codes), 
in our database that some of our stores carry. And there are 
over 600,000 items, potential items, food items, and new 
items--over 20,000 a year coming out--and you would be forced 
to do that. So, I would strongly encourage that we stay away 
from that and go towards an incentive program where there is 
encouragement for the healthier eating.
    Mr. Baird. Thank you very much. And I am sorry I have run 
out of time, and so I don't have time to get to the other two 
witnesses. But some time I would be interested in hearing your 
thoughts.* Thank you. I yield back.
---------------------------------------------------------------------------
    * Editor's note: the responses to the information referred to are 
located: for Mr. Giacomi, on p. 923; and Mrs. Cox, on p. 924.
---------------------------------------------------------------------------
    The Chairwoman. Thank you, Mr. Baird.
    I now recognize the gentleman from Illinois. Mr. Rush, you 
have 5 minutes for questioning. Please unmute and begin.
    Mr. Rush. Thank you, Madam Chairwoman, for this outstanding 
hearing, very informative. And I want to thank all of our 
witnesses who are appearing before us today.
    Madam Chairwoman, SNAP, as you know, is a necessary 
program, and my constituents certainly agree. And it is vital 
that we strengthen this program and build upon its successes in 
the next year's farm bill. One of the ways that I believe that 
we can strengthen the bill is by eliminating the asinine and 
the pointless and the extremely harmful restrictions that 
currently exist, prohibiting SNAP recipients from spending some 
of their SNAP funds on hot and prepared food. Madam Chairwoman, 
that is nothing but gross discrimination and biases built into 
this aspect of what is really a wonderful program.
    As we have heard from witnesses today, we already make SNAP 
recipients jump through far too many hoops in order to receive 
these benefits. It is beyond ridiculous, Madam Chairwoman, that 
we prohibit them from buying hot food while allowing them to 
purchase the same food if it was at a lower temperature. How 
insulting can we be? And that is why, Madam Chair, I am proud 
to partner with Representatives Grace Meng and Brian 
Fitzpatrick earlier this year to introduce the SNAP PLUS Act of 
2021 (H.R. 6338), which will fix this [inaudible] loophole in 
our social safety network.
    Mr. Giacomi, I was happy that you, in your witness 
statement, that you supported lifting the restrictions on the 
purchase of hot and prepared food. Can you now tell the 
Subcommittee about the benefits that lifting those horrendous, 
unnecessary, very discriminatory restrictions will have to SNAP 
beneficiaries?
    Mr. Giacomi. Certainly. Thank you, Representative Rush. 
American shopping and eating habits have evolved. SNAP families 
need convenience and faster meal preparation. As a father of 
two children--two young children, I should say--I know what it 
is like to have to juggle between sports and other activities 
after school, and then also worrying about preparing a meal to 
make sure that my kids have something healthy and nutritious to 
eat. I know that I have the flexibility to be able to go to the 
store and get that rotisserie chicken that we have talked about 
or pick up a salad for myself and my household. I believe all 
Americans should have that same choice. I don't think that this 
rule, as it is written now, considers whether or not the food 
will even be consumed on the premises or taken home to eat.
    I think that this rule, in itself, is most harmful to our 
homeless population, as well as those recovering from a natural 
disaster, be it in their town or their home, and cannot cook 
their food and need more choice. So, as I said, I think that it 
is a commonsense approach to looking at the flexibilities that 
Americans have, looking at the purchasing power of SNAP, and 
things of that nature, and adjusting to be in tune with the 
current situation that we see as Americans here.
    Mr. Rush. Would this provision that we are advocating, will 
it result in any financial or monetary increases for the 
American taxpayer?
    Mr. Giacomi. Not from my perspective. Perhaps Mr. Beal 
coming from the National Grocers Association may have a 
different perspective there.
    Mr. Rush. Well, I see I am running out of time, and so I 
yield back the balance of my time.
    The Chairwoman. Thank you, Representative Rush.
    I now recognize the gentlewoman from Florida. Mrs. Cammack, 
if you are ready, please unmute and begin your questions.
    Mrs. Cammack. All right. Thank you, Madam Chairwoman. I am 
just going to jump right into questions because I know that we 
are kind of bouncing back and forth. But I will start with Mrs. 
Cox. Your testimony lauds the Administration for their update 
to the Thrifty Food Plan and mentions how the update will raise 
consumption of more nutritious foods beyond the simulations 
supported by CBPP. Can you walk me through the library of 
research that supports this claim? Are we missing an 
opportunity to study actual health outcomes rather than 
measuring consumption?
    Mrs. Cox. So, there is still more research to be done, 
right? But the research that has been done shows that the 
purchase of healthier foods, like leafy greens, lean proteins, 
as well as prepared items, saves families time, and it is also 
saving money. The Academy of Nutrition and Dietetics supported 
the Thrifty Food Plan update because it also gives families 
better access to healthier food. So, just a quick reminder that 
it just went into place in October of 2021, so we still have 
time and there is research to be done to show the actual 
improvement in how much the Thrifty Food Plan will benefit 
families.
    Mrs. Cammack. Well, and I think we can all agree that 
saving time and money isn't always the more nutritious option. 
Convenience sometimes comes at a cost, oftentimes, a lot of 
times comes at a cost, and sometimes that is in the form of 
less healthy food.
    I will open this up to all of our witnesses. Generally, I 
am concerned that SNAP promotes a perverse business of poverty. 
As someone who about a decade ago was homeless and my family 
has faced food insecurity, I can speak to the fact that a lot 
of the programs seem to miss the mark and seem to perpetuate 
more of a handout than hand-up type mentalities. So, you see 
organizations across the country that have come to expect 
continued or increased need in order to remain solvent instead 
of working themselves out of a job. They tend to just grow. So 
particularly in terms of Federal dollars and getting more 
Federal dollars, how are we engaging nontraditional partners in 
the delivery of services, and how do we rely more on the 
private-sector, which has more of a proven ability to deliver 
efficiency and results with minimal red tape? And we can start 
with you, Mrs. Cox, and work our way through the witnesses here 
today.
    Mrs. Cox. No problem. So, to get to one particular point 
you made about working ourselves or organizations not working 
themselves out of business because of poverty. So, SNAP covers 
41 million people, and that shows because there is immense need 
in this country, right? We are still coming out of a pandemic, 
so there has to be an ability for this country to catch those 
people when they are struggling. And that is what the programs 
do. The fact that there is continued need doesn't mean that the 
programs aren't working. They are actually working as intended 
because SNAP actually expands when there is need and it 
contracts when the need lessens. And so, when need is less, 
SNAP will also--the amount of SNAP participants will also 
reduce. And we have seen that before. Do you want me to yield 
some time to another?
    Mrs. Cammack. Yes, I see----
    Mrs. Cox. Okay.
    Mrs. Cammack.--Dan kind of chomping at the bit here, so I 
appreciate that, Mrs. Cox. I appreciate you yielding.
    Mr. Giacomi. Thanks, Representative. I will say this. Per 
person per day, benefits are around $5 or so for SNAP 
participants. To me, in my opinion that is extremely low, 
especially when we look at the price of foods nowadays as well 
as other areas of inflation. What I will say is that I think 
states are in the best position to identify the need, whether 
it be of their workforce, whether it be of the state 
administrators, et cetera, and identify what work model works 
best for them. So, in my opinion, if you are asking me, I think 
allowing states to be able to look at their workforce, see what 
works best and respond in kind would be the way to go about 
things.
    Mrs. Cammack. Excellent. Any remaining----
    Mr. Beal. Mike Beal, is it okay?
    Mrs. Cammack. There we go.
    Mr. Beal. In response to your question. I would second that 
testimony. And from a grocer's perspective, I do believe that 
the administrative burden currently to grocers because of the 
SNAP program, is about as painless as it gets, with the 
exception of the online. It is very, very efficient for stores 
to take and perform the SNAP with as little red tape as 
possible currently.
    Mrs. Cammack. Thank you. My time has expired. I appreciate 
it. Thank you. And with that, I yield back. Madam Chairwoman.
    The Chairwoman. Thank you, Mrs. Cammack.
    I now recognize the gentleman from California. Mr. Panetta, 
you have 5 minutes. When you are ready, you can begin.
    Mr. Panetta. Thank you, Madam Chairwoman. I appreciate 
this. And thank you to the witnesses for being here discussing 
a very important topic as well, first of all, as we know, as 
the country saw and experienced throughout the pandemic--and 
that is, obviously, access to our Supplemental Nutrition 
Assistance Program.
    Obviously, we have the farm bill coming up in 2023, and I 
do hope to be a part of this Committee in which I can continue 
to ensure that obviously SNAP not just plays a majority role in 
the farm bill, but that it grows and expands. And I think we 
have some good evidence, based on what we saw during the 
pandemic, as to how important and how vital and how crucial the 
Supplemental Nutrition Assistance Program is. But we also want 
to make it more and more accessible.
    So, what I would ask you is--and either of you can answer 
this question--is what is my opening argument for when I talk 
about SNAP when it comes to the farm bill? Obviously, I think 
we understand the basics, but what opportunities are there? How 
can we improve participation to make sure that those who are 
eligible are actually connected to this very, very important 
benefit?
    Mrs. Cox. I will start. I think your opening argument would 
be that SNAP as it is, the structure itself, we need to 
maintain it, right? We saw how important and quickly it was 
able to respond during the recession and thanks to the great 
efforts of Congress to add additional boost, it was quick, and 
people would spend their money right in their communities. So, 
first, we want to keep the structure.
    Second, when we talk about access, a piece of it is looking 
at those people who are not eligible or who think they are not 
eligible and don't know that they are eligible, like we 
mentioned, some college students and we are talking about some 
veterans.
    And then, another key piece for the Center is the 3 month 
time limit for unemployed adults without children in their 
home. This is just a harsh time limit. And there is no research 
that shows taking away food from people is going to make them 
be able to work. We have to remember that the people who we are 
talking about on SNAP are usually low-wage workers. They are 
the ones that are in hospitality, are frontline workers in 
grocery stores, and those were the places that were hardest 
hit, so they are the ones that are having the hardest time to 
work, right, and with finding work.
    As a legal aid attorney, I had clients who worked, and they 
still were eligible for SNAP. So, I think it is about making 
sure to protect the structure and ensure those who are eligible 
are able to get on. And we look at those who are eligible and 
don't know, and make sure that they know that they are 
eligible. So, I will yield some of my time to my fellow 
witnesses.
    Mr. Panetta. Sure. Mr. Beal?
    Mr. Beal. Yes. Thank you for your question. As a retailer, 
we are just part of the delivery mechanism, right? I don't have 
anything to do with eligibility qualification. But here is what 
I do know. Food is a very basic human need. We all know that, 
right? And I will tell you what we see anecdotally. When people 
don't have the money to buy food, we know what happens. They 
are still going to find a way to get food. And what we see when 
they can't afford the food--we see it in our stores today 
increasing because of inflation, the price of gas, housing, and 
everything else--is that we see our theft go up. Which is what 
we call shrink, okay? And people have to solve that need for 
the very basic of all human needs, right? And so, that is what 
we see in our stores going up and increasing. And we also 
discuss that with other retailers in our share groups, and we 
are very concerned about that. So, that is just an anecdotal 
piece of evidence.
    Mr. Panetta. Understood. Thank you. Going back to you 
talked about college and obviously as a supporter, original 
cosponsor of the EATS Act (H.R. 1919, Enhance Access To SNAP 
Act of 2021), I think we can do better to level the playing 
field, especially when it comes with our college students. Can 
you go into some of the college student SNAP rules and how 
difficult they can be and how we can streamline them?
    Mrs. Cox. Sure. So, currently, anyone who attends college 
more than part-time is ineligible for SNAP unless they are 
taking care of a child that is 6 years and older, working at 
least 20 hours, or maybe participates in work study or a part 
of another kind of employment and training program. So, it is a 
really strict exemption. And I think that this rule was made at 
a time when the idea of a traditional college student isn't 
what we really see now. And so, it is time to think about who 
are our traditional college students now. And, maybe think 
about ways that we can make sure that those who are really in 
need are still able to access benefits in college so they can 
finish.
    Mr. Panetta. Great, great. My time is up. I just want to 
thank both of you, not just for your service, but providing me 
evidence in which I hope to use next year, especially with the 
2023 Farm Bill and securing our Supplemental Nutrition 
Assistance Program. Thanks to both of you. I yield back, Madam 
Chairwoman.
    The Chairwoman. Thank you, Mr. Panetta.
    Seeing no Minority Members on the platform, I now recognize 
the gentleman from the Northern Mariana Islands. Mr. Sablan, 
you are recognized. Please unmute and begin your questions.
    Mr. Sablan. Yes, Madam Chairwoman, thank you very much for 
holding today's hearing on this very important topic. I am 
just--Mr. Giacomi, I will--again, thank you to all the 
witnesses for joining us today. But Mr. Giacomi, SNAP 
employment and training programs helps SNAP participants gain 
skills training or work experience to increase their ability to 
obtain regular employment that leads to economic sufficiency, 
at least enough so they don't need help with nutrition 
assistance. But these federally-funded state-administered 
programs also help reduce barriers to work by providing 
individuals with support services such as transportation, 
childcare as they prepare for and obtain employment. And as 
mentioned by Mrs. Cox, funding for these programs is not 
available to communities like the Northern Mariana Islands, 
which are not included in SNAP and instead receive block 
grants. So, how important to Connecticut is the employment and 
training program connected to SNAP?
    Mr. Giacomi. Thank you, Representative. It is extremely 
important. It is one of our top tier pillars in Connecticut for 
the SNAP program is to be able to offer SNAP employment and 
training. You will see if you happen to get a chance to read my 
written testimony two very valuable success stories of our SNAP 
employment and training program. We are very proud of the work 
we do. We are very proud to be able to partner with all of our 
community colleges here in the state, as well as community-
based organizations. And we see the fruits of our labor. And we 
feel that, through employment and training, it is one of those 
tangible pieces of the SNAP program and the support that SNAP 
provides outside of just the nutrition that allows individuals 
to become self-sufficient, to have the training, obtain a job, 
and be able to support themselves and their families, going 
forward.
    Mr. Sablan. Thank you. And let me now, Mrs. Cox. Mr. 
Giacomi just told us how important these education and training 
programs are to Connecticut and how successful it has been to 
beneficiaries of SNAP. Have you also seen similar situations or 
results in the several states where SNAP, of course, is 
available?
    Mrs. Cox. Yes, great. And thank you for that question. We 
have seen a lot of success stories. Specifically, Washington 
State has a really amazing E&T program where they are able to 
kind of provide wraparound services where people are getting 
the necessary training and they are actually trained and placed 
into positions, in a field that they will be able to keep work. 
So, there is apprenticeship. There is subsidized employment 
with certain industries. I would love to give you more 
information specifically on Washington State. And I also 
believe I have read about the State of Louisiana also having a 
pretty comprehensive and successful E&T program, so I am happy 
to give you more information on that.
    [The information referred to is located on p. 925.]
    Mr. Sablan. Thank you. And, it just is very important to 
provide this skill training, these education opportunities to 
those, especially in the United States, especially to those, 
some of them who live in the poorest part of the country, like 
the Northern Mariana Islands, American Samoa, and Puerto Rico. 
And so, looking at the 2023 Farm Bill, it is my hope that we 
could include language that would allow the inclusion of 
education and training programs to those receiving block 
grants.
    Madam Chairwoman, thank you. Thank you for this hearing, 
and I yield back my time.
    The Chairwoman. Thank you, Mr. Sablan. I now recognize the 
gentlewoman from Ohio, Ms. Brown. You have 5 minutes. Please 
unmute and begin your questions.
    Ms. Brown. Thank you, Madam Chairwoman. And thank you to 
our expert panel for being here today. Your perspectives are 
helpful as we look ahead to the next farm bill.
    The SNAP program has proven to be an anti-poverty program 
that has shown time and time again to be effective and 
efficient. The SNAP program feels very close to home, as almost 
one in four people in my district receives monthly SNAP 
benefits. It is important that, as we look ahead to the next 
farm bill, we are thinking about how to improve the SNAP 
program so that it works for each participant, no matter if you 
are a senior, a veteran, a family with young children, disabled 
or simply have fallen on hard times.
    So, Mrs. Cox, you mentioned in your testimony how quickly 
the SNAP program was able to adapt during the COVID-19 
pandemic. What do you attribute that to, and what are some of 
the ways to streamline and modernize the SNAP program as we are 
thinking about the next farm bill?
    Mrs. Cox. Thank you for that question. So, the reason it 
was able to respond so quickly is because of its structure, 
right? Literally, its ability to expand and contract. So, it is 
based on need. When there are more people who have need, more 
people are able to get SNAP and then they are quickly able to 
spend those SNAP benefits in their local communities. So, that 
is one.
    And your second question was about how we could strengthen 
it. And I think there are a couple of pieces when we think 
about how to strengthen it, going forward. One is when people 
come in, they are usually eligible or connected to other 
benefits. So, if we start to think about how do we use data 
better, right? We know these individuals; they are showing up. 
How do we share data across programs to make sure people get 
on? As well as something that Mr. Beal brought up about the 
online purchasing, so once you are on, we are getting you on, 
we are sharing data, we are using telephonic signature, a lot 
of new things that we learned during the pandemic. How do we 
make sure that people are able to access their benefits so 
those in rural communities, those who are able to get to the 
grocery store, they are better able to use online purchasing 
pilots? That would be another strategy, I would suggest.
    And then the last one, also around access, in addition to 
connecting people based on data is also really taking a look at 
some of the categories of people who either think they are 
eligible, like we talked about, or those who really are 
eligible and seeing if there is an opportunity to rethink our 
rules, like the rule around college students and also the time 
limit.
    Ms. Brown. Thank you so much.
    Mr. Beal, from the grocers' perspective, can you share what 
are some of the ways to streamline and modernize the SNAP 
program as we are thinking about the next farm bill?
    Mr. Beal. Thank you for your question. I have already 
shared the comment about creating a technical assistance center 
as part of the USDA to help retailers get online, but also the 
GusNIP incentive program, which I think has a lot to do with 
encouraging greater nutrition and nutritional eating habits. 
The technical assistance center would go a very long way 
towards helping find solutions for grocers right now that are 
forced to navigate individually on their own. Those are two 
really, really big issues.
    But I would also note from experience from working in the 
Double Up Food Bucks Program, that despite what the common 
notion may be, there are many other people out there that are 
eligible and would qualify for SNAP benefits who aren't even 
aware of that. And so, the communication piece, we have learned 
that it is dependent upon a lot of nonprofit agencies for these 
individuals to find out. And oftentimes there are stigmas 
associated with it that they choose not to participate in the 
program. And so, that is a challenge. I am not sure how to 
solve that challenge except with better communication. But this 
technical assistance center would go a long way towards helping 
create incentives to get healthier eating, too.
    Ms. Brown. Thank you so much. One of the most important 
provisions in the last farm bill was the reevaluation of the 
Thrifty Food Plan. This has been a crucial and long overdue 
update, and it comes at a time when it is most needed. Mrs. 
Cox, can you talk about why it is important for the Thrifty 
Food Plan to be reevaluated often? And in your view, how often 
should it be revisited?
    Mrs. Cox. Thanks for that question. So, as we know, the 
Thrifty Food Plan update was long overdue, right? The amount of 
benefits people were getting hadn't risen, other than for 
inflation, since the 1970s. And we saw how many things have 
changed from the 1970s to now and how working families consume 
and cook food. So, I think that it was important to have the 
current revision.
    As far as how often, I think I would leave that up to USDA 
because they are better equipped to figure out exactly what 
families need. But it is something we want to make sure to keep 
our eye on because times are changing as we see all the time 
and what people eat and how much time they have.
    Ms. Brown. Well, thank you. The nutrition programs are 
critical in helping people get back on their feet in these 
difficult times, and so I do believe that these programs cannot 
be a bargaining chip that gets subjected to partisan politics. 
And I see my time has expired. So, with that, I will yield 
back. Thank you, Madam Chairwoman.
    The Chairwoman. Thank you.
    I now recognize the gentlelady from North Carolina, Ms. 
Adams. You have 5 minutes. Please unmute and begin your 
questions.
    Ms. Adams. Thank you, Chairwoman Hayes and Ranking Member 
Bacon, for hosting today's hearing. And to our witnesses, thank 
you as well for your testimony.
    The Supplemental Nutrition Assistance Program, SNAP, is one 
of the most effective tools that we have to combat hunger and 
food insecurity. In the last year, the reevaluation of the 
Thrifty Food Plan increased benefits by an average of $36 per 
month per SNAP recipient. Prior to 2021, the Thrifty Food Plan 
was last updated in the 1970s.
    Tens of millions of Americans depend on SNAP for their 
meals, even though SNAP benefits are not sufficient to feed 
families or prevent child hunger. And that is why I have 
introduced my Closing the Meal Gap Act (H.R. 4077), which will 
strengthen the SNAP program for millions of people affected by 
COVID-19, as well as older Americans, people with disabilities, 
children, struggling parents, students, unemployed and 
underemployed people, and veterans. Mr. Giacomi, states have a 
significant responsibility in administering SNAP and related 
programs shouldering 50 percent of those costs. So, your 
testimony detailed the positive changes to SNAP made in the 
2018 Farm Bill. What should the Committee prioritize in the 
2023 Farm Bill to improve SNAP rollout for state agencies?
    Mr. Giacomi. Thank you, Representative. I think you made a 
tremendous point there in saying the costs associated and the 
burden associated with administering the program. That burden 
is shared not only by states themselves, but also by the 
Federal Government, who is paying the other 50 percent, but 
also about clients who are trying to navigate these rules that 
are often changing or difficult to understand or remember or 
what have you. So, if I was to prioritize anything, it would be 
to simplify the administration of the program for both states 
and individuals, allowing for funding for increased online or 
telephonic options, and base eligibility upon other means-
tested programs. If you are receiving SSI, for example, you 
should not have to reapply or apply for SNAP benefits when the 
government has already decided that your income and assets are 
low enough that you qualify for SSI. Allowing individuals time 
to do other things than having to go to multiple agencies to 
apply for different programs, provide the same verifications 
often multiple times to these programs, allows them to do 
things like plan out meals, looking for work, things of that 
nature. So, simplifying it works, I think for, as I said, both 
the recipients and the agencies in most cases.
    Ms. Adams. Okay. Thank you, sir. Thank you.
    Mrs. Cox, during times of economic upheaval, lawmakers have 
turned to SNAP to make sure that our neighbors in need can 
still put food on their tables. As a result of the COVID-19 
pandemic, our country experienced one of our greatest economic 
upheavals, with millions of jobs lost and incomes cut. So how 
did SNAP respond in this time of crisis? And what lessons have 
we learned from this? And what should we be applying, going 
forward?
    Mrs. Cox. Thanks for that question. So, SNAP did exactly 
what it is meant to do, right? It responded to rising need. It 
responded quickly to those deteriorating economic conditions, 
and it actually pushed back against food insecurity and other 
forms of hardship that we saw since it was able to deliver 
additional food assistance. We saw calls to 211 requesting help 
with food and visits to food banks spiked dramatically in the 
early weeks of the pandemic, but the annual measure of overall 
food insecurity actually remained level. So, it shows that the 
quick actions of Congress and SNAP structure itself actually 
warded off a lot of pain.
    I think what we learned is that SNAP's structure and its 
ability to expand is useful and we want to keep that. And I 
think a few lessons that we can take is that how do we be more 
innovative in the delivery and redemption of SNAP? Kind of 
piggybacking off of Mr. Beal and Mr. Giacomi, the expansion of 
online purchasing pilot and the increased use of the telephonic 
signature I think are our big takeaways.
    Ms. Adams. Great. Well, thank you very much. And hopefully 
we will take advantage of those takeaways and do the right 
thing because it is right. Thank you so much for your 
responses. And, Madam Chairwoman, I yield back.
    The Chairwoman. Thank you. I now recognize myself for 5 
minutes for questioning.
    Expanding SNAP eligibility has a proven track record of 
lifting families out of poverty and improving health outcomes. 
Several states and Territories have received additional 
emergency SNAP benefits as a result of COVID-19 relief efforts. 
That includes disabled veterans who often hesitate to apply for 
SNAP benefits but are nearly 22 percent more likely to 
experience food insecurity.
    Mr. Giacomi, I appreciate your perspective and your focus 
on efforts to help families with the highest needs. What 
improvements do you recommend in the upcoming farm bill to 
ensure that veterans are able to access SNAP without facing 
unnecessary burdens?
    Mr. Giacomi. Thank you. As you will see in my testimony as 
well, my written testimony, veterans are a group of individuals 
that have long been overlooked. I think there is a need to look 
at the income that they are receiving and see whether or not 
that is something that can be excluded in eligibility 
determination. I think there is also a way of looking at 
perhaps the disability rating for veterans and expanding upon 
that to allow for more veterans to qualify for SNAP assistance 
in order to receive the help that they need.
    The Chairwoman. Thank you. I introduced legislation, the 
Feed Hungry Veterans Act (H.R. 7272), to tackle this very 
issue, and I look forward to working to be sure that this 
provision is included in any upcoming farm bill.
    In our State of Connecticut, 77,000 people are lifted out 
of poverty every year by SNAP, including an estimated 31,000 
children. Broad-based categorical eligibility has been proven 
to ease the benefits cliff that exist for recipients that are 
close to the income and assets level, allowing them to remain 
eligible. Connecticut utilizes broad-based categorical 
eligibility to set our gross income limit at 185 percent of the 
Federal poverty line and waives SNAP assets limit, which would 
otherwise prevent recipients from saving or having assets that 
exceeded $2,500. Can you elaborate on the effectiveness of this 
Connecticut formula and the impacts we have seen on 
beneficiaries and administrators of the program?
    Mr. Giacomi. Certainly.
    The Chairwoman. From high-cost states. I want to just add 
that we are a very high-cost state, so it is important.
    Mr. Giacomi. Absolutely. And that was what I was going to 
mention as well. What we see in Connecticut is that there are 
residents in around 35,500 households that are able to take 
advantage of the SNAP program because of our increased gross 
income level through broad-based categorical eligibility. These 
are individuals that not only, as I said, are our working poor, 
they are individuals that are working families that have 
children. We see that 35 percent of these families, 35 percent 
of these individuals, rather, are aged birth to 18.
    So, allowing them to get in the door, so to speak, because 
as I mentioned previously, they do still have to meet other 
criteria in order to receive assistance, then opens up other 
opportunities, such as the ability to receive WIC, Head Start, 
the National School Lunch Program, and a host of other areas 
that allow them to not have to decide between paying rent or 
buying clothes for their children and feeding themselves and 
their kids that month. So, I believe it has been a tremendous 
impact on our residents. But, as you mentioned, it is also a 
tremendous help administratively. It allows our eligibility 
workers to not focus on minute changes each month and instead 
ensuring that the benefits that we are giving are correct and 
are proper and looking at cases and ensuring that only 
individuals that are eligible to receive do receive the 
benefits.
    The Chairwoman. Thank you.
    Mrs. Cox, the Families First Coronavirus Response Act (P.L. 
116-127) included provisions that temporarily suspended the 
time limit for ABAWDs. While we are coming up on the end of 
that, and the pandemic is still happening, can you elaborate on 
why the waiver of the time limit continues to be important?
    Mrs. Cox. Sure. Thanks for that question. So, what we saw 
in this pandemic, right, was a huge upheaval where most of the 
jobs that our SNAP participants usually participate in--whether 
it is in grocery stores, at factories, as childcare workers, as 
home health aides--those were the jobs that were lost, and so 
those were the jobs that are still taking a while to open back 
up. So, it is super important at this time that we make sure 
that that time limit isn't implemented.
    And one thing that I know we look at is the overall 
national unemployment rate. And what happens with the national 
unemployment rate is it really masks local unemployment levels, 
right? So, the unemployment rate in one place, it looks very 
different than an unemployment rate in a different place. So I 
don't think we can look at it from a national unemployment rate 
to make decisions on local conditions.
    The Chairwoman. Thank you. Thank you for that answer, Mrs. 
Cox. Seeing no other Members on the platform. I think that 
concludes our Member questions. Before we adjourn, I invite the 
Ranking Member to share any closing comments he may have.
    Mr. Bacon. Thank you. I will just simply say I appreciate 
our three panelists. Thanks for your insights. And with that, I 
will yield back.
    The Chairwoman. Thank you to the Members of the Committee 
for attending this critical hearing today. And I join the 
Ranking Member in thanking our panelists, who offered very 
different and unique but equally important perspectives to this 
issue that we are all attempting to tackle.
    As we continue to review the 2018 Farm Bill and look 
forward to the 2023 Farm Bill, I will keep in mind what each of 
you has said today. It is clear that hunger continues to be a 
pervasive issue in our nation. In the upcoming farm bill I will 
work to ensure SNAP, in conjunction with other Federal 
nutrition programs, meets the needs of millions of Americans 
who struggle with food insecurity.
    Finally, as we were reminded by our Chairman during the 
last SNAP hearing, the farm bill is special. It is one of the 
few longstanding, bipartisan legislative packages in Congress 
with a long history of passing, with a large coalition of 
support from urban, suburban, and rural Members. Congress joins 
together to pass the farm bill every 5 years because it 
supports our nation's food system, from the farmer to the 
consumer and everyone in between, especially hungry children. 
SNAP is at the heart of that coalition because, like the farm 
bill itself, it provides support to every part of the food 
economy.
    In closing, I would just like to invite Mr. Beal to, if you 
would, I would be very interested to hear the end of your 
answer on the impact on rural communities and ways that we can 
improve the program from all of our witnesses. Anything that 
was not covered today, I invite you to share that for the 
record, because that is definitely for the attention of every 
Member on this Committee. Thank you all for joining us today.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any question posed by a Member. This hearing 
of the Subcommittee on Nutrition, Oversight, and Department 
Operations is now adjourned.
    [Whereupon, at 12:15 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Submitted Blog by Hon. Don Bacon, a Representative in Congress from 
                                Nebraska
[https://medicaiddirectors.org/resource/congress-must-act-to-help-
states-realign-medicaid-and-snap-renewals/]
Congress Must Act to Help States Realign Medicaid and SNAP Renewals
May 16, 2022

By Chloe Green, American Public Human Services Association & Hannah 
Maniates, National Association of Medicaid Directors

    In March 2020, Congress acted swiftly to pass bipartisan 
legislation to respond to the COVID-19 pandemic. This legislation--the 
Families First Coronavirus Response Act (FFCRA) \1\--included changes 
to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) to 
ensure that people would continue to receive timely and safe access to 
benefits during this time of crisis. Due to a ``continuous enrollment'' 
requirement in the FFCRA, Medicaid programs have not disenrolled 
members during the Federal COVID-19 public health emergency (PHE) 
declaration. While this policy was critical to ensuring people had 
reliable access to health care during the PHE, it meant that households 
maintained benefits even if they did not meet the usual eligibility 
criteria for the program. The FFCRA also granted SNAP programs 
additional flexibilities to adjust issuance methods and application and 
reporting requirements; these flexibilities were crucial \2\ to 
increasing equitable access to SNAP benefits as demand for nutrition 
assistance reached unprecedented levels early in the pandemic.
---------------------------------------------------------------------------
    \1\ https://www.congress.gov/116/plaws/publ127/PLAW-116publ127.pdf.
    \2\ https://files.constantcontact.com/391325ca001/43b432bd-bdde-
4525-8e63-a1b0293de236.pdf.
---------------------------------------------------------------------------
    When the Federal public health emergency declaration ends, state 
Medicaid programs will be required \3\ to redetermine eligibility for 
all of their members, at the same time as the SNAP administrative 
flexibilities expire. With the vast majority of states jointly 
processing SNAP and Medicaid eligibility, the expiration of these 
flexibilities will create a massive operational undertaking for state 
agencies--and could lead to delays and poorer customer service for 
members.
---------------------------------------------------------------------------
    \3\ https://www.medicaid.gov/federal-policy-guidance/downloads/
sho22001.pdf.
---------------------------------------------------------------------------
Realigning Medicaid and SNAP Renewals will Reduce Burden for Families
    Because eligibility for both Medicaid and SNAP is primarily based 
on household income, many people participate in both programs: as of 
2017, 89% of children \4\ receiving SNAP benefits were also enrolled in 
Medicaid or CHIP. Most states use integrated models \5\ to 
simultaneously process Medicaid and SNAP eligibility, which reduces the 
amount of paperwork that families must complete to apply for or renew 
their benefits, while also reducing workload for state agencies.
---------------------------------------------------------------------------
    \4\ https://www.census.gov/library/stories/2021/06/most-children-
receiving-snap-get-at-least-one-other-social-safety-net-benefit.html.
    \5\ https://www.kff.org/report-section/medicaid-and-chip-
eligibility-enrollment-and-cost-sharing-policies-as-of-january-2020-
findings-from-a-50-state-survey-enrollment-and-renewal-processes/.
---------------------------------------------------------------------------
    During the COVID-19 public health emergency, state Medicaid and 
SNAP programs have been operating under different rules for their 
redeterminations and recertifications of eligibility. However, in 
creating these much-needed flexibilities for members and administrative 
staff, SNAP and Medicaid recertification dates have become misaligned 
for many households--potentially doubling the amount of paperwork each 
year that families will have to complete moving forward.
    At the end of the Federal public health emergency, states will have 
up to 14 months \6\ to redetermine eligibility for their entire 
Medicaid caseload, representing a crucial opportunity to re-align these 
dates. However, the FFCRA's SNAP periodic reporting and recertification 
date flexibilities are set to expire at the of the PHE, meaning that 
states will lose a key tool for realigning certification dates.
---------------------------------------------------------------------------
    \6\ https://www.medicaid.gov/federal-policy-guidance/downloads/
sho22001.pdf.
---------------------------------------------------------------------------
State Agencies Face Urgent Workforce Challenges
    State Medicaid and SNAP agencies are facing another major 
challenge: bringing on enough employees to handle the massive amount of 
work associated with Medicaid redeterminations. Over the past 2 years, 
state Medicaid agencies have been preparing \7\ for the end of the 
public health emergency by cross-training staff from other agencies to 
help with redeterminations, leveraging vendors and third-party 
contractors to support case processing, and re-hiring retired 
eligibility workers.
---------------------------------------------------------------------------
    \7\ https://www.medicaid.gov/resources-for-states/downloads/state-
unwinding-best-practices.pdf.
---------------------------------------------------------------------------
    SNAP agencies, however, face unique restrictions on the types of 
workers they can use. Unlike in Medicaid, SNAP agencies are federally 
required \8\ to use ``merit system employees'' for certification 
interviews and eligibility determinations, meaning that they cannot use 
contract workers or consultants for most functions. In states where 
SNAP staff also conduct Medicaid redeterminations, this means that 
agencies will be facing a tidal wave of work with limited options for 
deploying short-term contractors to help. This could lead to issues 
with timeliness of application processing, increased churn, and poorer 
customer service.
---------------------------------------------------------------------------
    \8\ https://www.fns.usda.gov/snap/non-merit-system-personnel-
guidance-call-centers-2020-revision.
---------------------------------------------------------------------------
Congress Must Act to Support States with Integrated Eligibility Systems
    Realigning Medicaid and SNAP renewals is an important policy goal. 
The Centers for Medicare and Medicaid Services have authorized 
additional flexibilities for Medicaid programs, including the use of 
1902(e)(14)(A) waivers, to streamline the redetermination process 
following the end of the public health emergency. But Congress must act 
to give SNAP programs similar flexibilities.
    Specifically, Congress should do three things to help states with 
integrated SNAP and Medicaid eligibility systems:

  1.  Extend flexibilities that allow the USDA to adjust SNAP issuance 
            methods and application/reporting requirements. This will 
            help states with integrated eligibility systems re-align 
            Medicaid and SNAP renewal dates, reducing administrative 
            burden on families.

  2.  Expand non-merit staffing flexibilities for the SNAP program. 
            This would allow states to bring on additional short-term 
            staff to help process Medicaid redeterminations in 
            integrated eligibility states following the end of the 
            Federal public health emergency, ensuring timeliness and 
            good customer service.

  3.  Provide states with adequate planning time and resources. 
            Congress has considered new legislation \9\ that would 
            change how and when states conduct Medicaid 
            redeterminations. States would need time to prepare for 
            this type of change--including time to implement IT systems 
            changes, train staff, and communicate with members--so at 
            least 120 days of advance notice is essential. Congress 
            should also provide states with a phase down of the 
            enhanced Federal funding that is tied to the public health 
            emergency to ensure states have the resources they need to 
            conduct redeterminations.
---------------------------------------------------------------------------
    \9\ https://www.finance.senate.gov/download/finance-committee-
build-back-better-text-.

    The COVID-19 pandemic has had significant impacts on Medicaid and 
SNAP programs, which are facing increased demand, a reduced workforce, 
and changing Federal regulations. In order to mitigate the negative 
impact of the end of the public health emergency on families, Congress 
must give states the tools they need to transition off of COVID-related 
flexibilities. These tools will ensure that states can continue 
delivering efficient, effective, and high-quality services to the 
millions of people served by Medicaid and SNAP.
                                 ______
                                 
Supplementary Material Submitted by Daniel R. Giacomi, Social Services 
   Program Administration Manager, Connecticut Department of Social 
                                Services
Insert 1
          Mr. DesJarlais. Do you track at all? I mean, with the influx 
        of illegal immigration across the southern border and it is 
        record numbers, and this is going to obviously cause a drain on 
        the SNAP program, are you tracking that at all?
          Mr. Giacomi. We do have numbers on those that are applying. I 
        will say that if an adult comes in and is not identified as a 
        permanent resident or in a qualifying category, they would not 
        be eligible for assistance. So, we are not necessarily tracking 
        the number of individuals that are coming in that we are 
        denying because of this reason.
          * * * * *
          Mr. Giacomi. Thank you, Madam Chair, if I may respond really 
        quickly to clarify my statement.

    The Connecticut Department of Social Services (DSS) does not 
provide SNAP benefits to undocumented non-citizens; rather, it provides 
SNAP benefits only to certain lawfully present non-citizens who have 
been granted a qualifying immigration status, in accordance with 
Federal law. See generally. 8 U.S.C.  1611 (restricting eligibility 
for certain Federal benefits only to qualified aliens) and 1641 
(defining the term ``qualified alien'').*
---------------------------------------------------------------------------
    * Editor's note: the referenced statutes, 8 U.S.C.  1611 and 
1641, are retained in Committee file.
---------------------------------------------------------------------------
    Therefore, DSS does not track the number of undocumented non-
citizens receiving SNAP benefits because it simply does not provide 
such benefits to these individuals, and accordingly there is no such 
thing as a drain on the SNAP program as a result of providing benefits 
to undocumented non-citizens.
Insert 2
          Mr. Baird. Thank you. And I am going to turn to maybe all the 
        witnesses with this question. Sometimes, good intentions--I am 
        talking about government programs--the good intentions don't 
        really end up helping the people that we would like to help in 
        a manner that we would like to help. And so, what can we do? 
        Because we are coming down with this farm bill. What what do 
        you think we can do to improve our models and our modes of 
        delivery that really makes this program more efficient? Mr. 
        Beal, we can start with you.
          * * * * *
          Mr. Baird. Thank you very much. And I am sorry I have run out 
        of time, and so I don't have time to get to the other two 
        witnesses. But some time I would be interested in hearing your 
        thoughts. . . .

    The next reauthorization of the farm bill presents an opportunity 
to review the program with the benefit of lessons learned during the 
temporary government shutdown of 2019 and the COVID-19 pandemic that 
began in 2020. The experience of administering the program during the 
shutdown and the pandemic has demonstrated the value and importance of 
program innovations, some of which should be made permanent, but has 
also revealed additional steps that could be taken to strengthen the 
program in the future, making it more resilient in times of greater 
need and able to include vulnerable groups that have long been 
overlooked. Significant improvements can and should be considered in 
areas that would foster innovation, streamline service delivery, and 
simplify the administration of the program, and these improvements 
should be done in a way that ensures the program's integrity and 
stability.
    First and foremost, it is critical that we preserve access to 
Broad-Based Categorical Eligibility (BBCE) and the alignment of SNAP 
services with programs such as TANF and the National School Lunch 
Program, as doing so greatly simplifies access to SNAP, especially for 
working families, seniors, and people with disabilities. BBCE directly 
benefits nearly 65,000 low-income Connecticut residents, 35% of whom 
are aged birth to 18 years, as well as millions of Americans across the 
vast majority of states that rely on this flexibility. It helps working 
families by eliminating a ``benefit cliff'' and lets low-income 
households accrue savings to avoid debt, prepare for unexpected events, 
and become self-sufficient. In addition, it reduces the administrative 
burden on states processing SNAP applications, changes, and renewals, 
which correlates to a direct reduction in SNAP administrative costs per 
case, costs that the state and Federal Governments share.
    Next, we should build upon and make permanent proven demonstration 
projects, such as the Elderly Simplified Application Project (ESAP) and 
Combined Application Project (CAP), which streamline access to SNAP for 
vulnerable households while simultaneously cutting down on 
administrative expenses and increasing timeliness of case processing. 
In addition, other means-tested programs such as TANF, Medicaid, and 
WIC should be looked at to determine whether cross enrollment, or 
automatic enrollment, would be appropriate and efficient to ensure 
individuals receive all of the assistance they need without the burden 
of filling out multiple applications and providing the same 
verifications multiple times, again reducing SNAP administrative costs 
per case.
    Finally, the adaptations made over the past 2 years in response to 
the public health emergency have helped us better understand ways we 
can adjust program rules to more flexibly meet the needs of our 
customers. Opportunities are needed to further test and evaluate 
innovative approaches to interviews, change reporting, Periodic Report 
Forms, and telephonic signatures to provide space for states to 
transition out of the public health emergency leveraging the lessons we 
have learned. For example, many states already operate Combined 
Application Projects (CAP), state-demonstration programs that aim to 
increase SNAP participation among SSI recipients by enrolling them 
automatically into SNAP. These ``demonstration projects'' have been 
operating for 27 years and have proven very successful in increasing 
food stamp participation among SSI recipients. However, it is severely 
underutilized with only 17 states having some version of the CAP in 
place. This should become a regular component of the program with no 
cost neutrality, a provision in demonstration projects where states 
have to evaluate data to ensure the project should not cost more than 
it would have cost to add new participants under the regular SNAP 
program. In addition, other means-tested programs such as TANF, 
Medicaid, or WIC should be looked at to determine whether cross 
enrollment, or automatic enrollment, would be appropriate and efficient 
to ensure individuals receive all of the assistance they need without 
the burden of filling out multiple applications and providing the same 
verifications multiple times to multiple agencies. This is especially 
important as state agencies, like many industries, face challenges in 
recruiting and retaining staff. Collectively, we need to think 
differently about the way we properly invest in technology and 
partnerships to ensure we continue to deliver on our core mission while 
doing more with less.
                                 ______
                                 
Supplementary Material Submitted by Ty Jones Cox, J.D., Vice President 
   of Food Assistance Policy, Center on Budget and Policy Priorities
Insert 1
          Mr. Baird. Thank you. And I am going to turn to maybe all the 
        witnesses with this question. Sometimes, good intentions--I am 
        talking about government programs--the good intentions don't 
        really end up helping the people that we would like to help in 
        a manner that we would like to help. And so, what can we do? 
        Because we are coming down with this farm bill. What what do 
        you think we can do to improve our models and our modes of 
        delivery that really makes this program more efficient? Mr. 
        Beal, we can start with you.
          * * * * *
          Mr. Baird. Thank you very much. And I am sorry I have run out 
        of time, and so I don't have time to get to the other two 
        witnesses. But some time I would be interested in hearing your 
        thoughts. . . .

    There is strong evidence that SNAP is working well, but there are 
certainly parts of the program that could be improved. Two 
opportunities that come to mind are: (1) redesigning SNAP performance 
measurements to be more human centered and (2) ensuring SNAP program 
operations keep pace with technology.

  (1)  SNAP's current performance measurement system emphasizes 
            preventing improper payments. States and USDA take their 
            roles as stewards of public funds seriously and have a 
            rigorous measurement system in place to assess the accuracy 
            of eligibility and benefit determinations. States are 
            assessed fiscal penalties if their payment error rates are 
            persistently too high. It is critical that SNAP have a 
            strong system in place to assess and address program 
            integrity. But it is also important that the measures 
            states and USDA take do not undermine the program's purpose 
            to deliver food assistance to households that face 
            difficulties affording an adequate, healthy diet. Currently 
            information is not available to policymakers or the public 
            about how well SNAP is working in terms of the human 
            experience of accessing benefits. The 2018 Farm Bill 
            eliminated SNAP performance bonuses, which were tied to low 
            or improving payment error rates, participation rates among 
            eligible people, and delivering benefits promptly within 
            Federal timelines. But states still are subject to fiscal 
            penalties for high payment error rates, which places a 
            disproportionate emphasis on payment accuracy over access 
            for low-income families. This means that if states face 
            fiscal penalties for high error rates but aren't evaluated 
            on or incentivized to improve access, they have an 
            incentive to erect barriers to eligible households that may 
            be more error-prone.

        In collaboration with the Center on Budget and Policy 
            Priorities, Code for America developed a National Safety 
            Net Scorecard to put forward a package of metrics that 
            Federal and state governments could use to track program 
            performance over time and across states or other 
            jurisdictions. The measures in the National Safety Net 
            Scorecard measure performance across three categories:

        a.  Equitable access: These metrics help assess whether the 
            programs 
                  are open to all eligible people. Are online, 
            telephone, and in-person 
                  services available and accessible to all people? How 
            difficult is it to 
                  apply? Are people who apply satisfied with their 
            experience?

        b.  Effective delivery: Measures in this category examine the 
            smoothness 
                  of the process after a person applies. How long does 
            it take to receive 
                  benefits? How common is it for cases to be denied for 
            procedural rea-
                  sons as opposed to reasons related to financial 
            eligibility? Are people 
                  who remain eligible able to successfully maintain 
            eligibility?

        c.  Compassionate integrity: Finally, this category assesses 
            whether peo-
                  ple are receiving the benefits to which they are 
            entitled. What share 
                  of eligible people participate? How accurate are 
            eligibility and benefit 
                  determinations? How smooth is the appeals process?

        Some states measure some of these types of metrics as part of 
            their operations or to make the case to the public that 
            they are running successful programs. But there is a need 
            for leadership to make progress toward this vision through 
            Federal legislation in the farm bill, administrative 
            action, and further state innovation.

  (2)  The pandemic presented challenges and opportunities that 
            resulted in the program adapting quickly out of necessity. 
            Some technological changes, such as online shopping and 
            remote eligibility practices, that probably would have 
            occurred over time did so instead on an accelerated 
            timeframe. Congress could consider evaluating and 
            continuing to support these advancements. Online purchasing 
            is probably the best example of an accelerated timeframe 
            around technology during the pandemic. Though less than ten 
            percent of SNAP benefits are redeemed online, USDA rapidly 
            expanded the number of states and the number of stores that 
            allow recipients to redeem their benefits online. The next 
            farm bill presents an opportunity to continue the progress 
            from recent years and improve access to online benefits for 
            participants. Congress should consider revisions to SNAP 
            rules that would support the use of technology in the SNAP 
            certification and recertification processes, while 
            maintaining alternatives for people who lack access to 
            adequate internet service or face other barriers to using 
            technology. For example, telephonic signatures and text 
            messaging have shown promise in improving access for some 
            households without compromising program integrity.

    These are a few ways that we can improve the models and modes of 
delivery to make SNAP work best for participants and applicants.
Insert 2
          Mr. Sablan. Thank you. And let me now, Mrs. Cox. Mr. Giacomi 
        just told us how important these education and training 
        programs are to Connecticut and how successful it has been to 
        beneficiaries of SNAP. Have you also seen similar situations or 
        results in the several states where SNAP, of course, is 
        available?
          Mrs. Cox. Yes, great. And thank you for that question. We 
        have seen a lot of success stories. Specifically, Washington 
        State has a really amazing E&T program where they are able to 
        kind of provide wraparound services where people are getting 
        the necessary training and they are actually trained and placed 
        into positions, in a field that they will be able to keep work. 
        So, there is apprenticeship. There is subsidized employment 
        with certain industries. I would love to give you more 
        information specifically on Washington State. And I also 
        believe I have read about the State of Louisiana also having a 
        pretty comprehensive and successful E&T program, so I am happy 
        to give you more information on that.

    All states must operate an Employment and Training (E&T) program as 
part of SNAP. These programs vary widely because the SNAP statute 
allows states to require participation in E&T as a condition of 
receiving benefits (such approaches are referred to as ``mandatory 
E&T'') or to offer training and services without any consequence for 
their SNAP benefits should an individual be unable to participate 
(referred to as ``voluntary E&T''). USDA's research has found that 
mandatory E&T usually results in high rates of termination from SNAP, 
with little to no improvement in employment or income, so E&T in these 
cases is harmful to SNAP participants.
    There are promising examples of states that have helped individuals 
receive the training, experience and support they need to find and keep 
employment and increase their earned income. These are all voluntary 
E&T programs. As I mentioned in my testimony, Washington State has 
built an impressive workforce development system with SNAP E&T as an 
essential component. Studies have shown participants who complete the 
training increase their earnings.
    Louisiana's SNAP E&T program supports over 25 community and 
statewide organizations that provide training and support services to a 
wide range of individuals, including homeless families, individuals 
recently released from the criminal legal system, and young, at-risk 
adults.
    Several states provide E&T services through their community college 
networks, including California, Connecticut, Iowa
    Oklahoma is a good example of a state that operated a mandatory E&T 
program that consisted of job search, but moved in 2017 to a voluntary 
education and services model after finding the job search program did 
not yield positive results.
                                 ______
                                 
Submitted Letter by Sam Schaeffer, Chief Executive Officer, Center for 
                     Employment Opportunities, Inc.
June 8, 2022

 
 
 
Hon. Jahana Hayes,                   Hon. Don Bacon,
Chairwoman,                          Ranking Minority Member,
Subcommittee on Nutrition,           Subcommittee on Nutrition,
 Oversight, and Department            Oversight, and Department
 Operations,                          Operations,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chair[woman] Hayes and Ranking Member Bacon:

    On behalf of the Center for Employment Opportunities (CEO), I write 
to provide our perspective on the Supplemental Nutrition Assistance 
Program (SNAP) and SNAP Employment & Training (SNAP E&T) program for 
the Subcommittee on Nutrition, Oversight, and Department Operations 
hearing, ``A 2022 Review of the Farm Bill: Stakeholder Perspectives on 
SNAP.'' Thank you for holding a hearing on this important topic. In 
CEO's experience, SNAP E&T is one of the few workforce programs that 
reaches individuals returning home from incarceration, providing food 
security, access to training via partners like CEO, and critical 
support services such as reimbursement for transportation costs in the 
first 90 days of an unsubsidized job.
    CEO is the country's largest reentry employment organization, 
providing daily work and daily pay to justice-involved individuals 
facing the highest barriers to employment in 32 cities across 12 states 
through a transitional job and vocational training strategy. CEO 
engages with SNAP and SNAP E&T as critical resources for individuals 
reentering their community following incarceration. The United States 
has one of the highest incarceration rates in the world with 431 
sentenced individuals per 100,000 residents in state and Federal 
prisons. In some states as many as 1 in 18 individuals are on probation 
or parole. Each year, more than 600,000 individuals return home from 
incarceration in need of a job.
    Around half of CEO participants begin our program with no prior 
work experience. Additionally, more than half of CEO participants are 
young adults between the ages of 18 and 30 years of age, and come to 
CEO with significant barriers to employment, such as longer criminal 
histories, severe terms of incarceration, and more stigmatized 
convictions. CEO offers a transitional job-focused model that is proven 
to improve multiple outcomes for these individuals. CEO's vision is 
that anyone returning home from incarceration has employment and the 
opportunity for economic mobility aligned with their goals.
    A randomized control trial conducted by MDRC found that recently 
released CEO participants were significantly less likely to again be 
incarcerated (^16%) or convicted of a crime (^22%) compared to the 
control group, which received basic job search services. Those who 
enrolled in CEO within 3 months of release generated more than $3 in 
benefits for every $1 in costs. A recent quasi-experimental evaluation 
in New York State found that CEO participants were 52% more likely to 
be employed 1 year after and 48% more likely to be employed 3 years 
after beginning services than the comparison group.
    Immediate access to SNAP provides stability and an immediate 
resource for individuals released from prison with no income. 
Furthermore, access to SNAP E&T facilitates employment through third-
party partners like CEO; we are SNAP E&T 50/50 partner in all 12 of our 
states. If individuals are eligible for SNAP, then they are often 
eligible to participate in SNAP Employment & Training (E&T), including 
paid work experience.
    CEO's program model offers immediate work and pay, combined with 
wrap-around support and tools that lead to gainful unsubsidized 
employment. Christopher Oaks, one of our recent Oklahoma City 
participants who now has a career counseling individuals on housing, 
stated, ``Coming out of prison and immediately receiving SNAP benefits, 
in addition to my daily income from CEO; that was a game-changer for 
me. I don't know what I would've done without it.''
    In the last farm bill, Congress recognized the value of paid 
training for people coming home by allowing subsidized employment, 
including transitional jobs, and apprenticeships as allowable 
activities under E&T. In 2021, USDA-FNS finalized the Subsidized Work-
Based Learning (SWBL) rule under the Work Experience component of SNAP 
E&T. This rule reinforces Congress's support for job training services 
to reach high barrier populations, like justice-impacted individuals, 
who are likely not able to step away from the workforce to engage in 
unpaid training.
    To participate in SNAP E&T, an individual must receive SNAP 
benefits that month. Unfortunately, because there is not an explicit 
statutory exemption, USDA finds that for purposes of SNAP eligibility 
and benefit determination, income from SNAP E&T SWBL training 
activities is subject to the income limit as if it was from standard 
employment. Income from SNAP E&T now affects benefits levels and 
potentially makes a household ineligible for SNAP. That means if an 
individual engages in 40 hours of paid training earning minimum wage 
for that jurisdiction or more, they may lose SNAP benefits and cannot 
complete their skills training. Further, some state agencies are 
hesitant to even offer training that individuals may not be able to 
complete due to lost benefits and have cited this as a reason not to 
expand SNAP E&T services to include SWBL.
    Fixing this issue not only would help participants in their journey 
to independence and on a career pathway, but it would also expand the 
number of participants able to benefit from this proven model and 
likely the number of states where the model would be deployed. 
Excluding SNAP E&T income from countable SNAP income would result in 
more robust, quality training programs. For example, an individual 
enrolled at CEO could receive immediate stability and skills training 
in a transitional job and then concurrently pursue a multi-week paid 
training to receive their commercial driver's license, resulting in a 
higher quality job placement.
    As you can see, SNAP and SNAP E&T are being utilized in an 
effective and proven way to reduce recidivism and help justice-impacted 
individuals transition to full-time employment and re-integration with 
society. With a small technical fix to the income disregard issue--that 
we believe to be an unintended consequence of the flexibility for the 
SNAP E&T program provided in the last farm bill--SNAP E&T providers 
around the country could help more individuals complete important 
transitional employmentand skills development.
    Thank you for the opportunity to share CEO's perspective on SNAP 
and SNAP E&T and thank you for the Subcommittee's ongoing work on 
ensuring these programs function as Congress intended. Please don't 
hesitate to contact us with any questions as you work to develop the 
next farm bill.
            Sincerely,
            
            
Sam Schaeffer,
Chief Executive Officer.
                                 ______
                                 
                          Submitted Questions
Questions submitted by Hon. Al Lawson, Jr., a Representative in 
        Congress from Florida
Response from Michael J. Beal, J.D., Chief Financial Officer, Balls 
        Food Stores; on behalf of National Grocers Association
    Question. In my state, GusNIP a competitive USDA grant program, 
funds Fresh Access Bucks, a statewide incentive program that increases 
the purchasing power of SNAP recipients to buy fresh fruits and 
vegetables.
    This question is for all panelists, given the importance of GusNIP 
and its effectiveness in promoting local economies, increasing the 
consumption of fruits and vegetables in underserved communities, and 
driving positive health outcomes, what additional incentives should 
Congress include to increase GusNIP participation or expand existing 
programs?
    Answer. This important program has all of the great benefits you 
listed in your question and should be expanded to reach more consumers. 
To do this, the GusNIP program should be streamlined so program 
benefits can be provided through EBT cards and more retailers can 
participate. While the current model works well and helps target the 
programs limited resources, retailers need the assurance of reliable 
benefits and up-to-date technology. Retailers should be allowed to opt 
into participation their normal USDA channels and states should be 
consulted when targeting limited resources to high need areas. 
Additionally, one major enhancement to expand the program would be to 
offer some reimbursement of IT expenses required to modify the POS 
systems or the loyalty programs of retailers that may choose to 
participate in the GusNIP program, at least up to some dollar amount 
that could be documented to the nonprofit sponsor of local grocer's 
program. Retailers are ready to work with Congress to expand this 
program and support healthy eating in our communities.
Response from Daniel R. Giacomi, Social Services Program Administration 
        Manager, Connecticut Department of Social Services
    Question 1. Mr. Giacomi, you mentioned the importance of expanding 
access to SNAP benefits for college students to address the growing 
food insecurity among this population.
    What will be the effect of the end of the SNAP eligibility waivers 
for college students at the end of the public health emergency (PHE) 
and why is it important that bills like mine, H.R. 6272, The College 
Student Hunger Act, which makes permanent the temporary eligibility 
waivers, are passed before the PHE ends?
    Answer. More can be done to ensure students in higher education do 
not go hungry. It must be acknowledged that the student landscape is 
not the same as it was when SNAP eligibility criteria were developed. 
Perhaps contrary to the common perception of a college student who 
lives on campus in student housing, or who continues to live at home 
with parents, the majority of college students in fact live off campus 
away from their parents. This has largely been consistent since 2000. 
For example, in May 2018, Dr. Robert Kelchen, professor and head of the 
Department of Educational Leadership and Policy Studies at the 
University of Tennessee, Knoxville, used data from the National 
Postsecondary Student Aid Study to find that only 15.6% of all 
undergraduate students lived on campus in the 2015-16 academic year.\1\ 
*
---------------------------------------------------------------------------
    \1\ https://robertkelchen.com/2018/05/28/a-look-at-college-
students-living-arrangements/.
    * Editor's note: footnotes annotated with  are retained in 
Committee file.
---------------------------------------------------------------------------
    Prior to the pandemic, college students already faced disturbing 
levels of food insecurity. In a report published in February 2020, \1/
3\ of all respondents at the University of Connecticut reported low or 
very low food security as measured by the USDA's standard assessment 
tool. This same report showed that students who were food-insecure were 
more likely to report that they missed class and assignments, and have 
considered dropping out.\2\ Furthermore, these students had lower GPAs 
than their food-secure classmates. The pandemic exacerbated this 
problem nationwide. After the pandemic's onset, 38% of students across 
the country said they regularly missed meals, and 36% of students 
reported knowing someone who dropped out due to food insecurity during 
the pandemic.\3\
---------------------------------------------------------------------------
    \2\ https://senate.uconn.edu/wp-content/uploads/sites/1323/2020/03/
2020-0302-Student-Affairs-Handout.pdf.
    \3\ https://www.insidehighered.com/news/2021/05/27/how-manage-
covid-impacts-student-health-habits.
---------------------------------------------------------------------------
    To address this issue, The Consolidated Appropriations Act of 2021 
temporarily expanded SNAP student participation exemptions to students 
approved for work study and who are not participating in work study 
rather than only those students participating as well as added a new 
exemption for those who have an expected family contribution (EFC) of 
$0. Through partnerships with state educational organizations, the 
Connecticut Department of Social Services was able to quickly identify 
and provide direct outreach to nearly 27,600 students in Connecticut 
that fit these categories and who otherwise may not have been eligible 
for SNAP benefits.
    Should these flexibilities expire, the thousands of students who 
gained eligibility for SNAP benefits would lose this assistance and 
food insecurity would undoubtedly grow among this population.

    Question 2. In my state, GusNIP a competitive USDA grant program, 
funds Fresh Access Bucks, a statewide incentive program that increases 
the purchasing power of SNAP recipients to buy fresh fruits and 
vegetables.
    This question is for all panelists, given the importance of GusNIP 
and its effectiveness in promoting local economies, increasing the 
consumption of fruits and vegetables in underserved communities, and 
driving positive health outcomes, what additional incentives should 
Congress include to increase GusNIP participation or expand existing 
programs?
    Answer. When food insecurity is reduced, people are less likely to 
suffer from chronic illnesses such as Type 2 Diabetes, hypertension, 
high cholesterol, and heart and kidney disease. Additionally, ``access 
to [SNAP] in childhood leads to a significant reduction in the 
incidence of `metabolic syndrome' (obesity, high blood pressure, and 
diabetes) and, for women, an increase in economic self-sufficiency.'' 
\4\ Conversely, food insecurity is directly linked to poorer general 
and mental health.\5\ In fact, a study done by the USDA found that, in 
some cases, the level of a person's food security was an even greater 
predictor of chronic illness than income. ``Income is significantly 
associated with only three of the ten chronic diseases--hepatitis, 
arthritis, and COPD--while food insecurity is significantly associated 
with all ten,''[.] \6\
---------------------------------------------------------------------------
    \4\ Hilary W. Hoynes, Diane Whitmore Schanzenbach, and Douglas 
Almond. Long Run Impacts of Childhood Access to The Safety Net. NBER 
Working Paper Series. November 2012. https://www.nber.org/system/files/
working_papers/w18535/w18535.pdf.
    \5\ Steven Carlson and Brynne Keith-Jennings. SNAP Is Linked with 
Improved Nutritional Outcomes and Lower Health Care Costs. Center on 
Budget and Policy Priorities. January 17, 2018. https://www.cbpp.org/
research/food-assistance/snap-is-linked-with-improved-nutritional-
outcomes-and-lower-health-care.
    \6\ Christian A. Gregory, Alisha Coleman-Jensen. Food Insecurity, 
Chronic Disease, and Health Among Working-Age Adults, ERR-235. U.S. 
Department of Agriculture, Economic Research Service. July 2017. 
https://www.ers.usda.gov/webdocs/publications/84467/err-235.pdf?v=10
71.6.
---------------------------------------------------------------------------
    Improving access to nutritious food, in turn, leads to reduced 
healthcare spending, reduced likelihood of hospital visits, and overall 
better long-term health outcomes. In research released by USDA, 88% of 
SNAP participants reported facing at least one barrier to achieving a 
healthy diet throughout the month, with the most common barrier 
(reported by 61% of SNAP participants) being the affordability of 
healthy foods such as lean meat and fresh fruits and vegetables.\7\ 
Increasing families' ability to afford nutritious food also brings 
better long-term health outcomes to future generations, as children who 
receive SNAP have improved health outcomes and higher educational 
attainment when compared to children not in SNAP households.\5\
---------------------------------------------------------------------------
    \7\ USDA Food and Nutrition Service. Barriers that Constrain the 
Adequacy of Supplemental Nutrition Assistance Program (SNAP) 
Allotments. June 23, 2021. https://www.fns.usda.gov/snap/barriers-
constrain-adequacy-snap-allotments.
---------------------------------------------------------------------------
    Given this clear evidence, I strongly support increased GusNIP 
program funding. Notwithstanding that support, I would also advocate 
for increased SNAP programmatic funding and authority to provide more 
benefits to recipients, with a particular focus on incentivizing the 
purchase of fruits and vegetables, especially those bought locally. 
This could be accomplished through increased funding for Healthy 
Incentives Program (HIP) plans as well as funding for technology 
advances that allows farmers' markets, direct market farms, CSAs, and 
others to participate in the online purchasing program.
Response from Ty Jones Cox, J.D., Vice President of Food Assistance 
        Policy, Center on Budget and Policy Priorities
    Question 1. Mrs. Cox, you mentioned the importance of expanding 
access to SNAP benefits for college students to address the growing 
food insecurity among this population.
    What will be the effect of the end of the SNAP eligibility waivers 
for college students at the end of the public health emergency (PHE) 
and why is it important that bills like mine, H.R. 6272, The College 
Student Hunger Act, which makes permanent the temporary eligibility 
waivers, are passed before the PHE ends?
    Answer. SNAP has restrictive and complicated eligibility rules for 
college students. Some students who come from low-income backgrounds 
and continue to struggle with food insecurity may not be eligible for 
SNAP; others may be eligible but do not participate in SNAP because 
they are not aware they qualify or face difficulty navigating SNAP's 
sometimes complex application procedures.
    In December 2020, Congress temporarily expanded SNAP eligibility 
for college students to include students who are eligible to 
participate in state or Federal work study or have no ``expected family 
contribution'' as part of the Federal financial aid determination. This 
expanded eligibility will end 30 days after the Federal public health 
emergency for COVID-19 is lifted. At that point, college students who 
are participating in SNAP will lose eligibility when they come up for 
recertification unless they can show that they qualify for one of a 
much more limited set of student exemptions under the normal program 
rules. Congress should work to better understand the extent to which 
college students are eligible for and able to participate in SNAP and 
lower barriers to SNAP for low-income college students experiencing 
food insecurity.

    Question 2. In my state, GusNIP a competitive USDA grant program, 
funds Fresh Access Bucks, a statewide incentive program that increases 
the purchasing power of SNAP recipients to buy fresh fruits and 
vegetables.
    This question is for all panelists, given the importance of GusNIP 
and its effectiveness in promoting local economies, increasing the 
consumption of fruits and vegetables in underserved communities, and 
driving positive health outcomes, what additional incentives should 
Congress include to increase GusNIP participation or expand existing 
programs?
    Answer. Nutrition incentive programs can be an effective strategy 
to improve fruit and vegetable consumption among SNAP participants. For 
example, a USDA study, using rigorous methodology, found that offering 
financial incentives for purchasing fruits and vegetables increased 
SNAP participants' consumption of fruits and vegetables by 25 percent.
    Congress has substantially increased support for SNAP fruit and 
vegetable incentives over time; this initiative has grown from a small 
pilot in the 2008 Farm Bill to a permanent program with projects across 
the country. Congress has also provided significant supplemental 
funding for GusNIP during the pandemic, including $75 million in the 
Consolidated Appropriations Act, 2021 and nearly $40 million through 
supply chain funding from the American Rescue Plan Act. The 2018 Farm 
Bill established a Nutrition Incentive Program Training, Technical 
Assistance, Evaluation, and Information Center with the goal of 
collecting, evaluating, and sharing project data from GusNIP grantees 
to better understand program outcomes and best practices for incentive 
program design and implementation. These findings could be instructive 
as Congress considers avenues to strengthen GusNIP in the upcoming farm 
bill.


 
                     A 2022 REVIEW OF THE FARM BILL

    (ECONOMIC PERSPECTIVES ON TITLE I COMMODITIES AND TITLE XI CROP 
                               INSURANCE)

                              ----------                              


                         THURSDAY, JUNE 9, 2022

                  House of Representatives,
         Subcommittee on General Farm Commodities and Risk 
                                                Management,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 9:00 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Cheri Bustos [Chair of the Subcommittee] presiding.
    Members present: Representatives Bustos, Craig, O'Halleran, 
Lawson, Austin Scott of Georgia, Crawford, Allen, Rouzer, Mann, 
Miller, Thompson (ex officio), and Baird.
    Staff present: Lyron Blum-Evitts, Carlton Bridgeforth, 
Prescott Martin III, Joshua Tonsager, Josh Maxwell, Patricia 
Straughn, Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. CHERI BUSTOS, A REPRESENTATIVE IN 
                     CONGRESS FROM ILLINOIS

    The Chair. This hearing of the Subcommittee on General Farm 
Commodities and Risk Management entitled, A 2022 Review of the 
Farm Bill: Economic Perspectives on Title I Commodities and 
Title XI Crop Insurance, will come to order.
    I want to say welcome and thank you for joining today's 
hearing. After brief opening remarks, Members will receive 
testimony from our witnesses today, and then the hearing will 
be open to questions. In consultation with the Ranking Member 
and pursuant to Rule XI(e), I want to make Members of the 
Subcommittee aware that other Members of the full Committee may 
join us today.
    I am pleased to chair this hearing as producers around the 
country are in different stages of the growing season and 
dealing with varying weather conditions. Winter wheat farmers 
in the South are starting harvest, with many dealing with 
historic drought conditions. At the same time, corn, soybean, 
oil seed, and sugarbeet growers further to the north are still 
trying to get their crops in amid widespread flooding.
    Since the 2018 Farm Bill was written, farmers have 
experienced the economic impacts of a trade war with China, 
marketing and supply chain disruptions caused by the pandemic, 
historic weather events, and now extreme volatility in 
commodity and input markets caused in part by Putin's 
unjustified and unprovoked war in Ukraine. In particular, the 
most consistent issue I hear from farmers and stakeholders back 
home in Illinois is the price and availability of fertilizer, 
not only for their production this year, but also what it could 
mean for next year's crop as well.
    All of these conditions have had implications for how our 
farm bill programs have been functioning. And our intent with 
today's hearing is to gather input from this panel of experts 
on what these conditions have meant for how our commodity 
programs have worked as a safety net and the role that the 
Federal Crop Insurance Program has played in helping producers 
manage risk.
    During the past year and a half, this Subcommittee has been 
focused on understanding the situation on the ground and the 
needs of our producers. We held a hearing on the efficacy of 
the farm safety net almost a year ago and heard important 
testimony from producers, a crop insurance agent, and an ag 
economist, and it is clear the situation is much different 
today than it was at that time. And earlier this year we heard 
from Under Secretary Robert Bonnie about the state of our farm 
bill programs.
    Today, we have the privilege to hear from a distinguished 
panel of agricultural economists on the state of play, and I 
look forward to your testimony.
    [The prepared statement of Mrs. Bustos follows:]

 Prepared Statement of Hon. Cheri Bustos, a Representative in Congress 
                             from Illinois
    Good morning, and thank you to our witnesses and to my colleagues 
for joining us at this early hour.
    I am pleased to chair this hearing as producers around the country 
are in different stages of the growing season and dealing with varying 
weather conditions.
    Winter wheat farmers in the south are starting harvest, with many 
dealing with historic drought conditions. At the same time, corn, 
soybean, oilseed, and sugarbeet growers further to the north are still 
trying to get their crops in amid widespread flooding.
    Since the 2018 Farm Bill was written, farmers have experienced the 
economic impacts of a trade war with China, marketing and supply chain 
disruptions caused by the pandemic, historic weather events, and now 
extreme volatility in commodity and input markets caused in part by 
Putin's unjustified and unprovoked war in Ukraine.
    In particular, the most consistent issue I hear about from farmers 
and stakeholders back home in Illinois is the price and availability of 
fertilizer, not only for their production this year, but also what it 
could mean for next year's crop as well.
    All of these conditions have had implications for how our farm bill 
programs have been functioning. And our intent with today's hearing is 
to gather input from this panel of experts on what these conditions 
have meant for how our commodity programs have worked as a safety net 
and the role that the Federal Crop Insurance Program has played in 
helping producers manage risk.
    During the past year and a half, this Subcommittee has been focused 
on understanding the situation on the ground and the needs of our 
producers. We held a hearing on the efficacy of the farm safety net 
almost a year ago and heard important testimony from producers, a crop 
insurance agent, and an ag economist, and it is clear the situation is 
much different today than it was at that time. And earlier this year we 
heard from Under Secretary Robert Bonnie about the state of our farm 
bill programs.
    Today, we have the privilege to hear from a distinguished panel of 
agricultural economists on the state of play and I look forward to your 
testimony.

    The Chair. I would now like to welcome the distinguished 
Ranking Member, the gentleman from Georgia, Mr. Austin Scott, 
for any opening remarks he would like to give.

  OPENING STATEMENT OF HON. AUSTIN SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    Mr. Austin Scott of Georgia. Thank you, Chair Bustos. And 
thank you to the economists that are joining us today to share 
their perspectives on the state of the ag economy and the 
performance of the farm safety net and risk management tools in 
the farm bill.
    I would be remiss if I didn't say that the ag economy is 
the rural economy. And for those of us who live in rural 
America who do not farm, we recognize the impact of agriculture 
on our daily lives. Between weather, global events, 
skyrocketing inflation, and regulatory uncertainty, farmers and 
ranchers today are struggling to make sound business decisions 
in the face of extreme uncertainty. The provisions we 
established in the 2018 Farm Bill were meant to help farmers 
manage some of that risk. Today, I am looking forward to 
hearing from our witnesses about how those policies are 
working.
    While all Americans are dealing with the impact of high and 
rising inflation, I would argue that the farm sector of the 
economy is the one that is most vulnerable to these impacts. As 
JFK said, they buy ``everything at retail, sell it at 
wholesale, and pay the freight both ways.'' Many ag commodities 
are fetching high prices, but the cost of inputs continue to 
skyrocket. Transportation is more expensive, and labor is 
increasingly hard to find. Any softening of crop prices could 
spell disaster for the rural economy because production costs 
continue to rise.
    I am extremely frustrated with an Administration who is 
absolutely tone-deaf to what is happening on the farm. Senior 
officials suggest that the remedy for high gas prices is for 
more Americans to drive electric vehicles, or the USDA's most 
recent announcement of which they seek to transform the food 
system, one rooftop garden at a time. This Administration is 
clearly showing their lack of regard for the full-time farmers 
and ranchers that produce our food. And instead of going on 
Jimmy Kimmel, perhaps the Administration could remove the 
excise tax on diesel fuel and reduce the cost of farming.
    There are certainly many factors that contribute to 
skyrocketing production costs, but it is undeniable that many 
of these wounds are self-inflicted by our current political 
leadership. Yesterday, I spoke to a farmer that I represent. He 
told me that during the 2019 planting season he was paying 
$2.71 a gallon for truck fuel, $2.08 a gallon for tractor fuel. 
His quote yesterday was $5.55 a gallon for truck fuel and $5.21 
a gallon for tractor fuel. Those increases of 104.8 percent and 
150.5 percent respectively would be higher had the Governor of 
the State of Georgia not removed Georgia's tax on diesel.
    Crop protection tools that farmers rely on are under 
assault from the left wing enviro-activist. Yet the solicitor 
general filed a brief in the Ninth Circuit that fundamentally 
undermined EPA's preemptive authority of crop protection tools. 
The list goes on of the damage this Administration is doing.
    I am interested in testimony of our witnesses today, 
particularly how it relates to the impact inflation production 
costs will have more farmers, ranchers, and if our current 
safety net is inadequate. But instead of only looking for 
solutions by more Federal assistance, this Subcommittee also 
needs to pay attention to policies and actions that increase 
the cost of growing food and work to remedy that.
    Thank you, Madam Chair, for convening this hearing. Thanks 
for the witnesses before us today. I yield back.
    The Chair. All right. Thank you, Mr. Scott.
    I will now recognize the Ranking Member of our full 
Committee, Mr. Thompson, for any opening statement he would 
like to make.

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

    Mr. Thompson. Madam Chair, thank you so much, much 
appreciation to you, Chair Bustos, Ranking Member Scott, and 
the four witnesses with us today.
    This hearing is happening at a critical time as it relates 
to the work of the Agriculture Committee. Farmers are combating 
incredible challenges as they need to feed, clothe, and fuel 
this great nation and the world. The headlines of the recent 
article in the Wall Street Journal tell the story well, such 
as, quote, ``Farmers feel the squeeze of inflation,`` end 
quote, or quote, `` `Farms are failing' as fertilizer prices 
drive up cost of food,'' end quote, and another headline, 
quote, ``Farmers are racing against poor weather to plant 
crops,'' end quote. That is just scratching the surface of the 
challenges our producers face.
    Additionally, 2 weeks ago, the Congressional Budget Office 
released the updated baseline for USDA mandatory programs, 
which paints a challenging picture for this Committee as we 
looked to reauthorize the farm bill and make key improvements 
along the way. The critical Title I support programs, ARC and 
PLC, spent about $5 billion or 24 percent less than expected in 
the 4 years after passage of the 2018 Farm Bill, and the 10 
year expected cost of these programs is down nearly $7 billion. 
And because of their countercyclical design, these programs 
spending less would typically be a good sign because, as it 
indicates, commodity prices are higher.
    However, this is not translating to drastically higher farm 
profitability because the inputs required to produce crops have 
skyrocketed as well. In just 1 year, the cost per acre for 
nitrogen fertilizer is up 130 percent, farm diesel is up 110 
percent, and according to USDA's Economic Research Service, 
farm production expenses are expected to jump by over $20 
billion in 2022.
    All these factors are ones we must weigh as we begin to 
consider necessary reforms to farm bill programs. There is no 
better way to understand the current market dynamics and inform 
the process than to hear from the agriculture economists with 
us today. Over the past 2 decades, each farm bill has taken a 
unique route to enactment, whether it was the 2002 Farm Bill 
that was done early, the 2008 Farm Bill that was vetoed and 
overridden not once but twice, the 2014 Farm Bill that took 2 
years of extensions to get across the finish line, or the 2018 
Farm Bill that first failed on the House floor but was only 
enacted with record support in both chambers in the year that 
it was introduced. Each one is different, yet the one constant 
is the preparation, diligent work and input from stakeholders 
that ultimately led to success.
    So again, I want to thank the Chair and the Ranking Member 
of this Subcommittee for convening this hearing, and I eagerly 
look forward to hearing from our witnesses, farmers, ranchers, 
and foresters who are in the fight to produce safe, abundant, 
and affordable products that we all rely upon, and they deserve 
the best possible policies to aid in that fight. It is 
incumbent upon us to make sure that they know that we are right 
there with them. And despite all the challenges, we will have 
their backs in the 2023 Farm Bill.
    Thank you, Madam Chair, Ranking Member, and I yield back.
    The Chair. Thank you, Mr. Thompson. And thank you for being 
so good about attending our Subcommittee hearings. You have 
been wonderful on that.
    The chair would request that any other Members submit their 
opening statements for the record so the witnesses may begin 
their testimony and to ensure that there is ample time for 
questions.
    We are pleased to welcome our four distinguished expert 
witnesses to our hearing today. We have two in person here in 
Washington, D.C., in our hearing room. We have two who will be 
virtual. We are going to start with some introductions. I am 
going to introduce a couple, and then we have a couple of our 
Members up here who will introduce a couple of our folks who 
are our witnesses today. And then you will have your opening 
statements after we start with our introductions.
    So our first witness is from my home State of Illinois, Dr. 
Joseph Janzen, who is an Assistant Professor at the Department 
of Agricultural and Consumer Economics at the University of 
Illinois Urbana-Champaign, and he contributes to farmdoc Daily, 
an online resource for farmers across the country.
    So to introduce our second witness, I will yield to the 
gentlewoman from Minnesota, Congresswoman Angie Craig.
    Ms. Craig. Thank you so much, Chair Bustos. I appreciate 
the opportunity to introduce Mr. Robert Craven to the 
Subcommittee. Mr. Craven is the Associate Director of the 
Center for Farm Financial Management at the University of 
Minnesota, where he also serves as an Extension Economist. In 
his leadership role with the Center for Farm Financial 
Management, Mr. Craven has led the development of FINPACK, 
which is a nationally recognized ag credit analysis software. 
His work to help producers better benchmark their performance 
and make informed and strategic economic decisions has made a 
positive impact for thousands of family farmers. He has taught 
more than 450 workshops designed to help farmers maximize their 
financial decisions and effectiveness, including farm 
management and marketing. And he has spoken at dozens of ag 
conferences and seminars. In addition to all of this work, Mr. 
Craven is still involved in his family's farming operation in 
southwestern Minnesota. Mr. Craven, your work to help family 
farmers really maximizes the effectiveness of commodity 
programs and crop insurance, and it is incredibly important and 
impactful. We are lucky to have you in Minnesota.
    The Chair. Thank you, Congresswoman Craig.
    To introduce our third witness today, I am pleased to yield 
to the gentleman from Arkansas, Mr. Rick Crawford.
    Mr. Crawford. Thank you, Madam Chair. I want to introduce 
Dr. Ron Rainey, who is the Assistant Vice President of the 
Division of Agriculture and Center Director for the Southern 
Risk Management Education Center. Dr. Rainey has decades of 
experience as an extension agricultural economist with the 
University of Arkansas, and I appreciate his work for our state 
and appreciate him being here with us today.
    The Chair. Thank you, Mr. Crawford.
    Our fourth and final witness today is Dr. Joe Outlaw, who 
is with us here in person, who is a Professor and Extension 
Economist and who is the Co-Director of the Agricultural and 
Food Policy Center at Texas A&M.
    So welcome again to all four of our witnesses today. We 
will now proceed with your testimony. You will each have 5 
minutes. The timer should be visible to you and will count down 
to zero, at which point your time has expired. If you can honor 
that as best as possible, that would be great. Dr. Janzen, 
please begin when you are ready.

        STATEMENT OF JOSEPH P. JANZEN, Ph.D., ASSISTANT 
             PROFESSOR, AGRICULTURAL AND CONSUMER 
           ECONOMICS, DEPARTMENT OF AGRICULTURAL AND 
         CONSUMER ECONOMICS, UNIVERSITY OF ILLINOIS AT 
                  URBANA-CHAMPAIGN, URBANA, IL

    Dr. Janzen. Chair Bustos, Ranking Member Scott, Members of 
the Subcommittee, thank you for the opportunity to participate 
in today's hearing. My name is Joe Janzen. I am an Assistant 
Professor of Agricultural and Consumer Economics at the 
University of Illinois, where I am a contributor to the farmdoc 
project. farmdoc is a leading extension platform providing U.S. 
agriculture with integrated information and analysis to improve 
farm business decision-making and policy outcomes. As a member 
of the farmdoc team, I have published peer-reviewed academic 
research and outreach articles for industry and policymakers on 
commodity market analysis and the interplay between commodity 
prices and agricultural policy.
    My testimony focuses on changes in commodity prices related 
to the ongoing war in Ukraine and their implications for 
current and future U.S. farm policy, specifically the 
relationship between price levels and Title I farm programs. 
These programs are an important component of the farm safety 
net generally used to address the economic consequences of low 
commodity prices for U.S. farmers over periods longer than the 
single production cycle covered by crop insurance.
    I want to highlight the following: Our expectations for 
commodity prices are an important determinant of the 
policymaking process, setting the parameters of these safety 
net programs. We are currently in a period of high commodity 
prices. Since the beginning of 2022, corn, wheat, and soybean 
prices have increased by 20 to 50 percent from already elevated 
levels. Supply disruptions due to the Russian invasion of 
Ukraine are a major cause of the price change, but inventory 
reductions over the past 4 years; poor growing season weather 
in the United States, South America, and elsewhere around the 
world; and strong demand from China and other importers are 
important contributing factors. Current market price structure 
suggests elevated corn, wheat, and soybean prices for the 
duration of the marketing period for the 2022 crop, and lower 
but still historically elevated prices for the 2023 crop.
    U.S. farmers do face challenges related to adverse weather 
and rising costs. However, higher prices for corn, soybeans, 
and wheat for farmers of those crops are expected to improve 
profitability for U.S. farmers relative to 2021. For example, 
University of Illinois crop budgets show expected revenue 
increases larger than concurrent growth and farm input prices 
for fertilizer and energy that are also high, in part as a 
consequence of the Russian invasion of Ukraine. What makes this 
input situation so difficult is more so the uncertainty around 
supply chains and the ability to procure the fertilizer and 
other inputs necessary to produce the food that we all eat.
    Recent policy proposals have included the use of Title I 
commodity programs to incentivize U.S. farmers to fill the gap 
in global supply related to the war in Ukraine. This is a 
difficult challenge because Ukraine and Russia are low-cost 
producers of corn, wheat, and other commodities. Commodity 
supply from Ukraine and Russia can only really be replaced with 
higher cost production from other parts of the world.
    Experiences under the 2018 Farm Bill do offer some lessons 
for policy responses to this situation. Since 2018 Title I 
commodity programs have played a diminished role in the farm 
safety net relative to ad hoc programs intended to compensate 
farmers for specific price declines related to the U.S.-China 
trade war, and the coronavirus pandemic that did not trigger 
payments under standing programs.
    This experience suggests there are a number of trade-offs 
among objectives for U.S. farm policy, including decoupling 
program payments from production to avoid distorting market 
price incentives, targeting program payments to specific 
realized losses, and delivering timely program payments. For 
example, a rapid timely response to an observed price change is 
likely to impair targeting of that program to specific losses. 
For example, the Coronavirus Food Assistance Program in 2020 
compensated farmers for price declines between January and July 
of that year. That proved temporary.
    Targeting programs to encourage U.S. production when prices 
are historically high runs counter to the principle that U.S. 
farm programs should be decoupled from production, a principle 
that was maintained throughout that series of ad hoc programs 
developed by USDA. Using Title I or similar programs to 
increase supply response would also create long-term budget 
liabilities, and their impact on production and thus on the 
global market situation may be small.
    In summary, there is a limited role for farm policy, 
especially Title I commodity programs, to address the 
consequences of the war in Ukraine. Current and expected future 
prices are providing U.S. farmers with a strong incentive to 
meet this challenge, and they are making every effort to do so, 
as we have seen, in spite of the ongoing weather and other 
challenges that they face.
    Thank you and I look forward to your questions.
    [The prepared statement of Dr. Janzen follows:]

  Prepared Statement of Joseph P. Janzen, Ph.D., Assistant Professor, 
  Agricultural and Consumer Economics, Department of Agricultural and 
Consumer Economics, University of Illinois at Urbana-Champaign, Urbana, 
                                   IL
    [Chair] Bustos, Ranking Member Scott, and Members of the 
Subcommittee: Thank you for the opportunity to participate in today's 
hearing.
    My testimony focuses on changes in commodity prices related to the 
ongoing war in Ukraine and their implications for current and future 
U.S. farm policy. I specifically focus on the relationship between 
price levels and Title I farm programs, the primary farm safety net 
tool used to address the economic consequences of low commodity prices 
for U.S. farmers in the medium to long-run. In doing so, I highlight 
the following points:

   Commodity price expectations are an important determinant of 
        the policymaking process, especially for setting reference 
        prices and other commodity program parameters.

   Disruptions to global agricultural commodity trade due to 
        the war in Ukraine are significant and likely to persist 
        through the upcoming 2022/23 marketing year and beyond. Higher 
        prices are expected to improve profitability for U.S. farmers 
        with revenue increases larger than concurrent growth in farm 
        input costs that are part of the impact of the war on commodity 
        markets.

   Since the 2018 Farm Bill, Title I commodity programs have 
        played a diminished role in the farm safety net relative to ad 
        hoc programs intended to compensate farmers for specific price 
        declines that did not trigger payments under existing programs.

   Using Title I farm programs to address the economic 
        consequences of the war in Ukraine for agriculture is likely to 
        present trade-offs similar to those encountered in the design 
        and implementation of ad hoc farm programs between 2018 and 
        2021.

     Policy incentives to increase U.S. production to meet 
            supply shortfalls elsewhere in the world are likely less to 
            be effective than market incentives. Putting such policy 
            incentives in standing programs runs counter to policy 
            efforts in the past thirty years to reduce market 
            distortions from U.S. farm policy.

     Making program payments timelier is likely to impair 
            targeting of payments to realized losses. Efforts to 
            improve targeting of programs to realized farm losses may 
            affect production decisions and distort markets.
The importance of price expectations for commodity programs
    Fluctuations in agricultural commodity prices are directly 
connected to farm bill policy making. Farm programs under Title I and 
Title XI of the farm bill are intended to be countercyclical to market 
prices; they provide a safety net to farmers from the economic 
consequences of low prices. Broadly speaking, Title [I] programs 
provide support to farmers when prices are below long-run levels, 
especially but not exclusively the levels defined in legislation. Title 
XI crop revenue insurance pays indemnities to farmer policy holders 
when short-run, within-year price changes contribute to revenue 
declines below a given revenue guarantee.
    Since the level of the safety net provided by Title I programs is a 
policy parameter defined in legislation, this testimony focuses on 
deviations from long-run price levels and their relationship to Title I 
farm programs. Empirical evidence is presented for corn, soybeans, and 
wheat which comprise a majority of principal crop acres in the U.S.
    There is a long-standing debate in U.S. farm policy about the 
degree to which program parameters should be fixed in legislation or 
set flexibly according to mechanisms designed by policy makers.\1\ 
Expectations about future price levels play an important role in this 
debate since a fixed support may provide no assistance when prices end 
up higher than expected or larger than anticipated support when prices 
are lower than expected at the time legislation is set (Zulauf 2012; 
Coppess, Paulson, and Zulauf 2018).
---------------------------------------------------------------------------
    \1\ Title XI crop insurance programs are flexible according to this 
dichotomy and are not discussed here.
---------------------------------------------------------------------------
    The debate over fixed versus flexible commodity programs has led 
the provision of separate programs under Title I that vary in the 
degree to which program parameters are fixed in legislation. Price loss 
coverage (PLC) makes payments relative to fixed reference prices. 
Agricultural Revenue Coverage (ARC) makes payments relative to a 
rolling average revenue calculation that depends on market conditions 
in the preceding 5 years (Schnitkey, et al., 2022). Title I also 
includes the Marketing Assistance Loan (MAL) program which provides 
loan deficiency payments when prices fall below a (lower) price floor 
called the loan rate.\2\
---------------------------------------------------------------------------
    \2\ The MAL program also facilitates commodity marketing through 
the provision of loans secured by agricultural commodities but that 
aspect of the program is not discussed here.
---------------------------------------------------------------------------
    Since the 1990s, U.S. farm policy makers both in Congress and the 
executive have generally sought to avoid production effects from Title 
I programs by decoupling program payments from crop choice and acreage 
decisions. Such production effects would exacerbate or extend period of 
low prices. The primary mechanism for decoupling is payments on so-
called base acreage and production rather than current production. 
Broadly speaking, Title [I] programs tend to receive less attention and 
lower funding when current and expected future prices are high.
The War in Ukraine and Agricultural Commodity Prices
    Agricultural commodity prices are currently at historically high 
levels. One proximate cause of high prices, especially for wheat and 
corn, is the ongoing Russian invasion of Ukraine. Anticipated prices 
for the 2022 U.S. wheat crop, represented by the new-crop futures 
contract price, are now roughly 50% higher than on January 1, 2022. 
New-crop corn futures prices are \1/3\ higher and soybean futures 
prices 20% higher over the same period.
Figure 1. Expected 2022 harvest-time futures prices for corn, soybeans, 
        and wheat, January 1 to May 27, 2022
        
        
          Source: Bloomberg.

    As shown in Figure 1, the largest price increases took place 
immediately following the initial Russian invasion of Ukraine on 
February 24, 2022. Price increases at that time were greatest for 
wheat, especially for soft red winter (SRW) and hard red winter (HRW) 
wheat futures prices (HRW prices are omitted for clarity in Figure 1). 
These wheat classes have similar protein content and are viewed as 
closer substitutes to the wheat exported from Russia and Ukraine, 
compared to other wheat classes grown in the U.S. such as Hard Red 
Spring (HRS).
    While all nearly all agricultural commodity prices have increased 
in 2022, price increases have been especially large for wheat and corn 
because of the importance of Ukraine and Russia in global markets for 
these commodities. On average between the 2016-17 and 2020-21 marketing 
years, Ukraine and Russia were responsible for 28% of world wheat 
exports and 17% of world corn exports.\3\
---------------------------------------------------------------------------
    \3\ All production, export, and stocks data referred to in this 
testimony come the USDA Foreign Agricultural Service PS&D database: 
https://apps.fas.usda.gov/psdonline.
---------------------------------------------------------------------------
    The conflict has limited exports with significant quantities of 
agricultural commodities essentially stuck inside Ukraine. Estimated 
Ukrainian ending stocks for the 2021/22 marketing year are expected 
increase dramatically. Current USDA estimates for 2021/22 Ukrainian 
corn and wheat ending stocks are roughly four times higher than the 
previous 5 year average. Outside of Ukraine, conflict-related 
constraints on Black Sea shipping and sanctions on Russia have also 
limited the movement of agricultural commodities. Production is 
expected to be lower in 2022 as the conflict restricts the availability 
of crop inputs and limits farming operations, but the inability to move 
commodities out of the region is expected to further increase commodity 
stocks inside Ukraine.
    The conflict has limited exports with significant quantities of 
agricultural commodities essentially stuck inside Ukraine. Estimated 
Ukrainian ending stocks for the 2021/22 marketing year are expected 
increase dramatically. Current USDA estimates for 2021/22 Ukrainian 
corn and wheat ending stocks are roughly four times higher than the 
previous 5 year average. Outside of Ukraine, conflict-related 
constraints on Black Sea shipping and sanctions on Russia have also 
limited the movement of agricultural commodities. Production is 
expected to be lower in 2022 as the conflict restricts the availability 
of crop inputs and limits farming operations, but the inability to move 
commodities out of the region is expected to further increase commodity 
stocks inside Ukraine.
    Price increases observed in early 2022 were not solely caused by 
lower Ukrainian and Russian commodity exports. First, commodity markets 
were more susceptible to supply shocks because inventories, a key 
measure of commodity scarcity, had been drawn down in the years leading 
up to the current 2021/22 marketing year, particularly in major 
exporting countries where corn and wheat inventories have been 
declining since 2018. Commodity markets exhibit higher volatility and a 
tendency to spike in the short run when inventories cannot be used to 
mitigate the effects of supply shortfalls.
    Second, there have been a series of supply shocks outside of 
Ukraine and Russia that have pushed the global commodity supply and 
demand balance toward higher prices. Drought reduced 2021/22 crop 
production in South America with the impact strongest in soybean 
prices. News of the drought moved prices higher in January and February 
2022 in advance of the war in Ukraine (as shown in Figure 1). 
Similarly, drought limited wheat in the U.S. Great Plains in 2021 and 
drought and poor conditions for the 2022 U.S. wheat crop contributed to 
higher wheat prices. Strong demand from major agricultural commodity 
importers, especially China, also contributed to high prices. Finally, 
knock-on impacts of higher prices, especially export restrictions 
imposed by some exporting nations have exacerbated price impacts.
    The war in Ukraine is of great concern to global commodity markets 
with an impact possibly larger and more persistent than other supply 
shocks. While the amount of grain removed from global commodity markets 
due to the war is significant, quantity changes implied by other supply 
shocks are similar in magnitude. However, the war in Ukraine may have 
longer-term market implications because the Black Sea region is a low-
cost producer of corn, wheat, and other agricultural commodities 
(Langemeier and Zhou 2022b; 2022a). Moreover, crop production areas in 
this region are located close to ports to facilitate efficient 
transportation to importing nations. This means that in most cases, any 
importing nation seeking alternatives to crop supplies from Ukraine or 
Russia will only find more expensive options.
    Current forward markets indicate high prices will persist at least 
until the end of the 2022-23 marketing year. Figure 2 visualizes the 
set of futures market prices for delivery at different time horizons on 
specific days in early 2022. These prices represent some indication of 
price expectations at a given time horizon. The figure show that the 
initial market reaction to the war in Ukraine was very much 
concentrated in the short and medium-run; prices for delivery during 
the current 2021/22 marketing year and prices for the 2022 crop 
increased, but long-run price expectations moved only a little. This 
was especially true for the SRW wheat market. In the roughly 3 months 
since the start of fighting in Ukraine, longer-horizon prices have 
increased more than short-horizon prices.
Figure 2. Forward Curves for Crop Futures Prices as of Specific Dates 
        in 2022
SRW Wheat


Corn


Soybeans


          Source: Bloomberg. Note: Shaded areas represent prices for 
        delivery during a specified marketing year.

    The economic consequences of these higher prices for U.S. farmers 
are muddied somewhat by concurrent increases in fertilizer and energy 
costs that are in part related to conflict in Ukraine. Russia and its 
ally Belarus are major fertilizer producers and exporters. Similarly, 
Russia is a major producer and exporter of oil and natural gas. Data on 
fertilizer and crude oil price levels shown in Figure 3 indicate that a 
broad basket of U.S. fertilizer prices approximately tripled between 
January 2021 and March 2022. Similarly, the benchmark West Texas 
Intermediate crude oil price nearly tripled over the same timeframe. 
High fertilizer and energy prices encourage farmers to economize on 
input use. This is concerning, because it may limit the ability for 
U.S. and other farmers to respond to higher output prices with 
increased production, particularly in the short run.
Figure 3. Weekly Fertilizer and Crude Oil Prices, January 2018 to May 
        2022
        
        
          Source: Green Markets/Bloomberg.

    The net effect for U.S. farmers of higher prices for outputs like 
corn, wheat, and soybeans and inputs like fertilizer and energy is 
nonetheless expected to be positive. Figure 4 shows expected revenue 
for corn, soybean, and wheat production on Illinois crop farms relative 
to fertilizer, fuel, land, and other costs. University of Illinois 
farmdoc crop budget estimates show rising output prices are expected to 
more than compensate for large fertilizer and fuel price increases. 
Though fertilizer and fuel expenses are expected to nearly double from 
2021 to 2022, expected operator returns given average crop yields are 
substantially higher in 2022 than in 2021. Fertilizer and fuel costs 
simply do not comprise a large enough share of expenses to offset 
revenue increases.
Figure 4. Costs and Net Returns as a Proportion of Expected Revenue for 
        Illinois Crop Farms, 2021 and 2022
        
        
          Source: Crop Budgets, Illinois, https://farmdoc.illinois.edu/
        management#handbook-crop-budgets.
          Note: Quantities represent springtime forecasts of marketing 
        year total revenue and costs. Corn and soybeans data are for 
        high productivity land in Central Illinois. Wheat data are for 
        Southern Illinois. Land costs are based on realized land costs 
        in 2021 which are an average of land ownership, share rent, and 
        cash rent costs.
Price Levels and Agricultural Policy Under the 2018 Farm Bill
    To provide a sense of the level of government safety net support 
provided by Title I commodity programs under current market conditions, 
compare current price levels to fixed support levels defined in the 
2018 Farm Bill. Two key price levels defined in the 2018 Farm Bill are 
the effective reference price and the national loan rate. The effective 
reference price is higher than the loan rate, so it defines the initial 
level of farm safety net support.
    Farm payments under the Price Loss Coverage program occur when 
marketing year average (MYA) prices as calculated by USDA fall below 
the effective reference price. The MYA price is a benchmark 
representing average price received by farmers for a given commodity 
produced in a given marketing year. By definition, the MYA price is 
only known at the end of the marketing year, so farm payments under 
this Title I farm program are made after the marketing year has ended.
    Figure 5 plots the MYA price and effective reference price for 
corn, soybeans, wheat during the 4 marketing years since the 2018 Farm 
Bill. Realized prices were generally close but not significantly above 
or below reference prices in the 2018/19 and 2019/20 marketing years. 
This resulted in limited PLC payments for corn and soybeans and modest 
PLC payments (relative to payments under the 2014 Farm Bill) for wheat. 
Prices for the 2020/21 and 2021/22 marketing years were generally well 
above the effective reference price for these commodities, a condition 
expected to persist into 2022/23.
Figure 5. Intra-year and Marketing Year Average Farm Prices for Corn, 
        Wheat, and Soybeans, 2018/19 to 2021/22
Corn


Wheat


Soybeans


          Source: USDA/Bloomberg. Note: Intra-year daily spot prices 
        represent the price of corn and soybeans in Central Illinois 
        and hard red winter wheat in Kansas City on a given day.

    While the MYA price has generally determined the magnitude of Title 
I commodity program support, price levels within a year may 
substantially exceed the MYA price. Intra-year spot prices are plotted 
in Figure 5 for corn, soybeans, and wheat. These prices represent the 
current value of the commodity on a given day. By definition, higher 
than MYA prices will occur within a marketing year. However, the 
presence of such prices can create the perception of economic losses 
because only a small portion of each marketing year's production is 
sold at the higher than average price level.
    Figure 5 also shows the level of national loan rates, the price 
level below which the marketing assistance loan program payments are 
triggered. For corn, wheat, and soybeans, loan rates have been well 
below market prices during the 2018 Farm Bill period. Payments to 
farmers under the marketing assistance loan program have been 
negligible. Recall that payments to farmers under the MAL program are 
made on actual production. This may create an incentive to produce more 
when expected prices are low. Low MAL program payments therefore imply 
potential market distortions related to the program have been similarly 
insignificant.
    While commodity program payments have generally been small during 
the 2018 Farm Bill period, direct government payments to farmers have 
not. Figure 6 shows that nominal government payments far exceeded 
levels observed in the recent past between 2018 and 2021. Direct farm 
payments in calendar year 2020 were estimated to be approximately $46 
billion, higher in both nominal and real terms than any year recorded, 
including previous peaks during the 1980s farm crisis and the period of 
low commodity prices from 1998 to 2005.
    Approximately 80% of direct farm payments between 2018 and 2021 
came from programs were ad hoc: designed to quickly address specific 
issues. These programs sought to quantify specific economic damages 
related to the U.S.-China trade conflict, the coronavirus pandemic, and 
other disasters. The largest ad hoc programs were the Market 
Facilitation Program (MFP) related to the U.S.-China trade conflict and 
the Coronavirus Food Assistance Program (CFAP).
    MFP and CFAP were notable in that program payments for commodities 
discussed here--corn, wheat, and soybeans--were defined relative to 
projected or observed price declines over specified time intervals. MFP 
payments were calculated relative to commodity-specific payment rates 
that can be compared to price changes (Janzen and Hendricks 2020). CFAP 
payments were based on specific price declines that occurred between 
January 2020 and specific dates later that year.
    MFP and CFAP attempted to provide greater support to farmers in a 
timelier manner than is the case with farm bill programs. Payments were 
made on actual production or acreage during this period, although USDA 
attempted to limit possible production distortions through program 
design. Attempting to provide ad hoc payments before the end of a 
production cycle (as is common with many farm bill programs) required 
USDA to predict the magnitude of the economic harm caused by the trade 
war and the pandemic for specific commodities at specific points in 
time.
    The prevalence of ad hoc payments since 2018 suggests that the 
existing farm safety net provided in past farm bills had real or 
perceived inadequacies in the context of the economic harm caused by 
the trade conflict and the pandemic. Existing programs did not provide 
support to U.S. farmers under the market conditions that existed 
between 2018 and 2021. Any payments from existing Title I programs 
would have been made much later than was the case for MFP, CFAP, and 
other ad hoc programs.
Figure 6. Nominal Direct Government Payments to Farmers by Calendar 
        Year, 1990-2022F
        
        
          Source: USDA Economic Research Service Farm Income and Wealth 
        Statistics.
Implications for Title I Commodity Programs
    The war in Ukraine has prompted discussion of a global food price 
crisis. Relevant to Title I commodity programs, there is an active 
debate about the extent to which U.S. farm policy can and should 
address the supply shortfall caused by the war in Ukraine. For example, 
the Biden Administration recently proposed the use of higher fixed 
price supports under the marketing assistant loan program to encourage 
production (Swanson, et al., 2022). This proposal and similar efforts 
to boost U.S. production using policy incentives run counter to the 
principle that U.S. farm programs should avoid market price distortions 
by decoupling program payments from production. Using Title [I] 
programs to increase supply response would also create long-term budget 
liabilities. Most importantly, increasing countercyclical market 
support may not increase crop production by much if at all, since 
expected payments from these programs would be small given current 
price expectations.
    More broadly, using Title I farm programs to address the economic 
consequences of the war in Ukraine for food security and agriculture is 
likely to face trade-offs similar to those encountered in the design 
and implementation of Title I and ad hoc farm programs between 2018 and 
2021. Farm safety net policy has generally attempted to achieve the 
following objectives (among others):

  1.  Targeting: Program payments are matched to specific enumerated 
            economic damages sustained by farmers.

  2.  Decoupling: Program payments do not affect acreage and crop 
            choices decisions for farmers.

  3.  Timeliness: Program payments are received as close as possible to 
            the time when economic losses are incurred.

    Experience with Title I and ad hoc farm payments suggests it is 
difficult to simultaneously achieve all three objectives. For instance, 
the main mechanism for decoupling Title [I] commodity programs--making 
payments on base acres rather than actual acres--ensures that payments 
are not exactly matched to realized losses (Zulauf, et al., 2020). Ad 
hoc payments were able to avoid production distorting impacts by 
announcing payments after planting or paying common payment rates 
across a wide range of crops, but these mechanisms are either 
infeasible for a program designed to exist for 5 years, or come at the 
expense of targeting.
    Recent experience also suggests that program payment timeliness 
often conflicts with other goals, especially targeting. For example, 
the MFP attempted to identify economic damage to U.S. farmers caused by 
the trade conflict prior even to the 2018 harvest period. The full 
market implications of the trade conflict were not known when the 
program was announced, and this created considerable disagreement about 
whether MFP payment rates overcompensated certain commodities and 
regions. Improvements in payment timeliness almost certainly came at 
the expense of targeting.
    Similarly, payments made under CFAP, especially the second round of 
those payments, aimed to compensate farmers for price declines between 
specific dates in 2020, using the January 15, 2020, pre-pandemic price 
level as a baseline. Some of the price declines identified by CFAP 
proved to be largely temporary. Again, efforts to provide timely 
assistance to farmers resulted in ad hoc payments that were not 
targeted to realized economic losses that met the criteria for coverage 
in the 2018 Farm Bill. Current Title I programs, by focusing on the 
marketing year average price as the outcome of interest, do a good job 
of focusing on long-lived, economically significant losses experienced 
by most producers of a given commodity.
    In the current period of elevated price expectations, it is most 
important to note that Title I commodity programs are by design less 
active. Efforts to apply Title I policy levers as a means to address 
other objectives related to global food security and the war in Ukraine 
are likely to come at the expense of existing objectives, especially 
the goals of targeting payments to specific losses and decoupling 
payments from production.

 
 
 
                               References
 
    Coppess, Jonathan, Nick Paulson, and Gary Schnitkey and Carl Zulauf.
 2018. ``Farm Bill Review: Origins of Fixed Price Policy.'' farmdoc
 Daily 8 (31). https://farmdocdaily.illinois.edu/2018/02/farm-bill-
 review-origins-fixed-price-policy.html.
    Janzen, Joseph P., and Nathan P. Hendricks. 2020. ``Are Farmers Made
 Whole by Trade Aid?'' Applied Economic Perspectives and Policy 42 (2):
 205-26. https://doi.org/10.1002/aepp.13045.
    Langemeier, Michael, and Leying Zhou. 2022a. ``International
 Benchmarks for Corn Production.'' farmdoc Daily 12 (29). https://
 farmdocdaily.illinois.edu/2022/03/international-benchmarks-for-corn-
 production-6.html.
    ___. 2022b. ``International Benchmarks for Wheat Production.''
 farmdoc Daily 12 (65). https://farmdocdaily.illinois.edu/2022/05/
 international-benchmarks-for-wheat-production-5.html.
    Schnitkey, Gary, Nick Paulson, Carl Zulauf, and [] Krista Swanson.
 2022. ``The 2022 PLC and ARC Decision.'' farmdoc Daily 12 (4). https://
 farmdocdaily.illinois.edu/2022/01/the-2022-plc-and-arc-decision.html.
    Swanson, Krista, Gary Schnitkey, Carl Zulauf, Jonathan Coppess, and
 [] Nick Paulson. 2022. ``Administration Efforts to Incentivize
 Production Due to Ukraine-Russia Conflict.'' farmdoc Daily 12 (67).
 https://farmdocdaily.illinois.edu/2022/05/administration-efforts-to-
 incentivize-production-due-to-ukraine-russia-conflict.html.
    Zulauf, Carl. 2012. ``Market Oriented vs. Fixed Supports and the
 2012 Farm Bill.'' farmdoc Daily 2 (42). https://
 farmdocdaily.illinois.edu/2012/03/market-oriented-vs-fixed-suppo.html.
    Zulauf, Carl, Gary Schnitkey, Krista Swanson, Joe Janzen, Nick
 Paulson, and [] Jonathan Coppess. 2020. ``A Farm Policy Dilemma: Base
 Acres, Planted Acres, and Ad Hoc Payments.'' farmdoc Daily 10 (171).
 https://farmdocdaily.illinois.edu/2020/09/a-farm-policy-dilemma-base-
 acres-planted-acres-and-ad-hoc-payments.html.
 


    The Chair. Thank you Dr. Janzen.
    Mr. Craven, please begin when you are ready.

STATEMENT OF ROBERT H. CRAVEN, ASSOCIATE DIRECTOR AND EXTENSION 
                  PROFESSOR, CENTER FOR FARM 
          FINANCIAL MANAGEMENT, DEPARTMENT OF APPLIED 
        ECONOMICS, UNIVERSITY OF MINNESOTA, ST. PAUL, MN

    Mr. Craven. Chair Bustos, Ranking Member Scott, and Members 
of the Subcommittee, thank you for the opportunity to speak 
with you today. I am sorry I can't be there in person
    I am Bob Craven, extension economist and Associate Director 
of the Center for Farm Financial Management at the University 
of Minnesota. The Center has a long history of providing 
decision support tools and training to agricultural producers 
and the professionals that support them. One of our major 
efforts is farm benchmarking to help producers better 
understand their financial performance and make better 
decisions. We collaborate with farm business management 
programs in over 20 states to provide tools and educational 
support. These programs work with individual producers on the 
record-keeping, planning, and analysis of those records.
    Currently, the analyses from producers in 12 of these 
states are then loaded anonymously into the FINBIN database, 
the largest public searchable database of farm financial 
information in the U.S. There are currently over 3,300 
producers in the database with data that spans over 20 years. 
The FINBIN data is the basis for my presentation today.
    I am going to go ahead and share some charts on the screen 
so that you can look along with me on those. Chart 1 shows 
median net farm income over the past 26 years. Net farm income 
is the amount available for family living, taxes, and net worth 
growth. 2013 through 2019 represented a period of low net farm 
income. The average rate of return on assets during that period 
was 2.5 percent. Under four percent is considered weak. 2020 
and 2021 saw a significant improvement in profitability. The 
median income in 2021 was just over $166,000, up from just 
under $109,000 in 2020. ROA in 2021 was much improved at 11 
percent.
    Chart 2, hang on, chart 2 provides the net farm income by 
different farm types. As you can see, hog farms had an 
excellent year in 2021. Crop and beef farms also had increased 
profitability over the past 2 years, but the beef farms in our 
database always struggle with profitability. Dairy farms did 
well in 2020, but their net income declined slightly in 2021.
    Chart 3 shows working capital as a percent of gross income. 
This is a measure of the liquidity or the ability of the 
business to meet short-term financial obligations. It is the 
first line of financial defense in low-income years. Over 30 
percent will be considered a strong position. Crop, beef, and 
hog farms all improved their liquidity positions substantially 
over the past 2 years. Dairy farms showed only a slight 
increase in 2021, but they are in a much stronger position than 
they were at the end of 2018.
    Chart 4 shows average net farm income displayed in the blue 
bars. We are using averages here. Median values were provided 
in the charts above. Government payments are displayed by the 
red line. We have included PPP loan forgiveness and government 
payments which had a significant impact in the payments for 
2020 and 2021. From 2007 to 2013, there was a little 
variability in government payments. Many of the payments at 
that time were from direct programs. ARC and PLC were first 
introduced in 2014. 2015 through 2019 were very low-income 
years for Midwest farmers, so in those years, government 
payments made up a substantial percent of net farm income. This 
chart shows that 2020 would have also been a low-income year 
had it not been for COVID-related ad hoc payments.
    Chart 5 shows the breakdown of government payments by type. 
The maroon portion of the bars represents ARC and PLC payments. 
The purple bar represents what I have termed ad hoc government 
payments. In 2020 and 2021 this includes PPP loan forgiveness. 
Certainly, ad hoc payments and PPP were a significant portion 
of support from 2018 through 2021. The low ARC/PLC payments in 
2021 reflect good yields in commodity prices in 2020.
    The final chart 6 shows net farm income and government 
payments by different farm size. The lower axis is gross farm 
income in thousands. Government payments increased as farm size 
increased, but as a proportion of net farm income, it 
decreases. In 2021 for a farm that grossed $100,000-$250,000 
government payments comprise 31 percent of net farm income. For 
operations grossing over $2 million it was only 20 percent.
    In conclusion, our data illustrate that traditional 
commodity programs have not provided the major part of the 
support to react to the shocks that have hit commodity 
agriculture in recent years. Ad hoc programs filled in the 
gaps. In recent years, both Title I commodity and ad hoc 
programs have been an important safety net for agriculture 
producers. If you have additional questions about the data in 
FINBIN, don't hesitate to reach out to me. Thanks for your time 
and attention, and I look forward to your questions.
    [The prepared statement of Mr. Craven follows:]

    Prepared Statement of Robert H. Craven, Associate Director and 
 Extension Professor, Center for Farm Financial Management, Department 
                                  of 
        Applied Economics, University of Minnesota, St. Paul, MN
Introduction
    [Chair Bustos], Ranking Member Scott, and Members of the 
Subcommittee, thank you for the opportunity to speak with you today. I 
am Bob Craven, Extension Economist and Associate Director of the Center 
for Farm Financial Management at the University of Minnesota. The 
Center has a long history of providing decision support tools and 
training to agricultural producers and the professionals that support 
them. One of our major efforts is farm benchmarking to help producers 
better understand their financial performance and make better 
decisions. We collaborate with farm business management programs in 
over 20 states to provide tools and educational support. These programs 
work with individual producers on their record keeping, planning, and 
analysis of those records. Currently, the analyses from producers in 12 
of these states are then loaded anonymously into the FINBIN database 
(finbin.umn.edu)--the largest public searchable database of farm 
financial information in the U.S. There are currently over 3,300 
producers in the database with data that spans over 20 years. The 
FINBIN data is the basis for my presentation today. Please note we do 
not have 2021 data from all the states yet, so much of what you will 
see for 2021 is from Minnesota farms.
Farm Income
Chart 1. Median Net Farm Income Trend


          FINBIN Database.

    Chart 1 shows the median net farm income over the past 26 years. 
Net farm income is the amount available for family living, taxes, and 
net worth growth. 2013 through 2019 represented a period of low net 
farm income. The average rate of return on assets (ROA) during that 
period was 2.5%. Under 4% is considered a weak ROA. 2020 and 2021 saw a 
significant improvement in profitability. The median income in 2021 was 
$166,297, up from $108,781 in 2020. The ROA in 2021 was much improved 
at 11%.
Chart 2. Median Net Farm by Farm Type


          FINBIN Database.

    Chart 2 provides the net farm income by different farm types. As 
you can see, hog farms had an excellent year in 2021. Crop and beef 
farms also had increased profitability over the past 2 years but the 
beef farms in our database always struggle with profitability. Dairy 
farms did well in 2020, but their net income declined slightly in 2021.
Liquidity
Chart 3. Working Capital as a Percent of Gross Income


          FINBIN Database.

    Chart 3 shows working capital as a percent of gross income. This is 
a measure of the liquidity or the ability of the business to meet short 
term financial obligations. It is the first line of financial defense 
in low income years. The higher the percentage, the better. For this 
measure, over 30% would be considered a strong working capital 
position. Crop, beef and hog farms all improved their liquidity 
position substantially over the past 2 years. Dairy farms showed only a 
slight increase in 2021 but are in a much stronger position than they 
were at the end of 2018.
Government Payments
Chart 4. Government Payments versus Average Net Farm Income


          FINBIN Database.

    Chart 4 shows average net farm income displayed by the blue bars in 
the figure. We are using averages here. Median values were provided in 
the charts above. Government payments are displayed by the red line. We 
have included PPP loan forgiveness in government payments which has had 
a significant impact on the payments for 2020 and 2021. From 2007 to 
2013 there was little variability in government payments. Many of the 
government payments at that time were from direct programs. ARC and PLC 
were first introduced in 2014. 2015 through 2019 were very low income 
years for Midwest farmers, so in those years government payments made 
up a substantial percent of net farm income. This chart shows that 2020 
would have also been a low income year had it not been for [COVID] 
related ad hoc payments.
Chart 5. Government Payments by Program Type


    Chart 5 shows a breakdown of government payments by type. The 
maroon portion of the bars represent ARC and PLC payments. These 
payments lag a year from the data they are based on. The purple bar 
represents what I have termed Ad Hoc government payments. In 2020 and 
2021 this includes PPP loan forgiveness. Prior to 2018 this category 
also included the conservation payments. Certainly, ad hoc payments and 
PPP were a significant portion of support from 2018 through 2021. The 
low ARC/PLC payments in 2021 reflect good yields and commodity prices 
in 2020. It was a year of excellent profits and ARC and PLC payments 
were not triggered for most of these producers.
Chart 6. Government Payments by Size of Farm
Net Farm Income vs. Government Payments, 2021
Average by Gross Income in Thousands


          FINBIN Database.

    Chart 6 shows net farm income and government payments by different 
farm size. The lower axis is gross farm income in thousands. The 
government payments increase as farm size increases, but as a 
proportion of net farm income it decreases. In 2021, for a farm that 
grossed $100-$250,000, government payments comprised 31% of net farm 
income. For operations grossing over $2,000,000 it is only 20%.
Conclusion
    Our data illustrates that traditional commodity programs have not 
provided the major part of the support to react to shocks that have hit 
commodity agriculture in recent years. Ad Hoc programs filled in the 
gaps. In recent years both Title [I] Commodity and ad hoc programs have 
been an important safety net for agricultural producers.
    If you have additional questions about the data in FINBIN, don't 
hesitate to reach out to me at [Redacted]. Thank you for your 
attention.

    The Chair. Thank you, Mr. Craven.
    Dr. Rainey, please begin when you are ready.

STATEMENT OF RONALD RAINEY, Ph.D., ASSISTANT VICE PRESIDENT AND 
  PROFESSOR, DIVISION OF AGRICULTURE, UNIVERSITY OF ARKANSAS 
SYSTEM; DIRECTOR, SOUTHERN RISK MANAGEMENT EDUCATION CENTER, U 
                            OF AR, 
                        FAYETTEVILLE, AR

    Dr. Rainey. Madam Chair and Committee Members, thank you 
for the opportunity to present here today. My name is Ron 
Rainey, and I am humbled to provide input into this important 
deliberative process. I have almost 3 decades of experience 
working primarily as an extension agricultural economist across 
the food value chain with the University of Arkansas, our 
state's flagship land-grant university. I currently serve as 
Assistant Vice President of the Division of Agriculture and 
Center Director for the Southern Risk Management Education 
Center.
    Farmers across the South continue to adapt to the 
challenging agricultural environment made worse by the 
pandemic, current microeconomic trends, climate variability, 
and disrupted supply chains. The growing challenges of 
inflationary pressure and supply chain issues will push 2022 
net farm income lower as a result of sharply higher cost of 
inputs, particularly fertilizer and fuel. Increasingly adverse 
weather events are creating additional hurdles that challenge 
farm viability.
    Many of our specialty crop producers have limited crop 
insurance options, and the added cost sometimes results in 
minimal risk-reducing strategies being implemented on their 
farms. The number of insurance products that have been made 
available have expanded in recent years. For example, whole 
farm revenue, dairy margin, forage, to name a few, but still 
gaps in coverage remain. For example, the poultry sector, which 
is the largest single agriculture industry in many southern 
states, is dominated by contract production. Yet contract 
growers have virtually no access to insurance products. Even 
where newer insurance product offerings are available, a lack 
of understanding on the functionality of a number of these more 
specialized products is a persistent problem that hampers use 
of crop insurance.
    The Agricultural Risk Protection Act of 2000 (Pub. L. 106-
224) authorized the Secretary of USDA to carry out the program 
the Partnership for Risk Management Education. Under this 
authority, NIFA partnered with four regional extension risk 
management centers to carry out a nationally competitive grant 
program Extension Risk Management Education. The Southern Risk 
Management Education Center at the University of Arkansas had 
been part of the ERME program since 2009, serving the southern 
region. SRMEC's goal is to empower producers to manage risk and 
to understand and manage their ability to understand those 
risks and increase profitability of southern agriculture by 
delivering programs designed to change risk management behavior 
among key producer populations.
    The Center annually manages $2 million in competitive 
grants that seek to empower producers to manage risk on their 
individual operations through educational offerings, primarily 
to land-grant institutions, though faculty and community-based 
organizations as well. We offer two grant programs. One focuses 
on a full range of risk management activities and tools, and 
the other seeks to enhance the use and understanding of Federal 
crop insurance.
    The ERME program routinely collaborates with Risk 
Management Agency to promote RMA resources and to engage with 
its regional offices on the ways to engage and support our 
farmers and ranchers. Both programs collaborated to jointly 
develop and distribute a primer Introduction to Risk Management 
Education, which is a publication that details a consistent 
approach across the five risk areas that we address: 
production, marketing, finance, legal, and human.
    The Southern Center also has ongoing conversations with 
crop insurance industry, individual companies, National Crop 
Insurance Services, and the Crop Insurance Professionals 
Association on ways to collaborate on company agent trainings, 
as well as on ways to engage with our farmers and our ranchers. 
SRMEC is working with partners across the region to offer 
continuing education credits to enhance crop insurance industry 
stakeholder understanding of emerging issues in agriculture, 
and best management practices for engaging diverse producer 
groups.
    The Census of Agriculture reveals that most socially 
disadvantaged farmers and ranchers on average operate 
relatively smaller-size farms, thereby leveraging smaller 
operating loans to produce their crops each year. It should be 
noted that USDA program historical equity and access issues 
have played a significant role in limiting the opportunities 
for socially disadvantaged farmers and ranchers to gain 
economies-of-scale, increasing their farm size, and investing 
in innovative or new machinery. The lack of opportunity to 
scale up results in lower productivity and relatively higher 
input costs on average.
    Even when socially disadvantaged farmers and ranchers 
participate in USDA programs, they receive a disproportionately 
lower level of Federal support in terms of funds to reinvest in 
their farms. The cumulative impact of these lower support 
levels over an extended period of time results in real 
differences in terms of size of operation, equipment, 
facilities, and seriously compromising the viability of 
socially disadvantaged-owned operations.
    Another issue that continues to plague socially 
disadvantaged farmers and ranchers is real and perceived trust 
issues resulting from current and past experiences and ongoing 
confrontations. For example, there are a number of producers 
who refuse to enter a USDA office even in 2022 because of fear 
based on past experiences of disparate treatment, of the 
ability or probability of losing their land or being foreclosed 
on a loan under what they would feel would be less-than-fair 
conditions. Therefore, the ability to build and restore trust 
in relationships is a critical hurdle to effectively reach 
marginalized producers and their communities with USDA programs 
and resources.
    To carry out our programs----
    The Chair. Dr. Rainey?
    Dr. Rainey. Yes, ma'am?
    The Chair. Your time has expired. Can you wrap it up like 
in a couple of seconds?
    Dr. Rainey. Yes, ma'am. So we annually collaborate to carry 
out our programs with both 1862 institutions, 1890 institutions 
with some of their outreach specialists. And I just want to 
close by highlighting a program that we recently launched in 
partnership with Dr. Outlaw and his center to launch Southern 
Ag Today, which is a collaboration to do a daily news analysis, 
which focuses on southern agriculture and its producers. Thank 
you.
    [The prepared statement of Dr. Rainey follows:]

 Prepared Statement of Ronald Rainey, Ph.D., Assistant Vice President 
and Professor, Division of Agriculture, University of Arkansas System; 
     Director, Southern Risk Management Education Center, U of AR, 
                            Fayetteville, AR
    My name is Ron Rainey and I am humbled to provide input into this 
important, deliberative process that means so much to all of our 
farmers, ranchers, and rural communities. I have almost 3 decades of 
experience working primarily as an Extension Agricultural Economist 
with the University of Arkansas, our state's flagship, Land-Grant 
University. I currently serve as Assistant Vice President of the 
Division of Agriculture and Center Director for the Southern Risk 
Management Education Center.
Current Economic Update on Southern Agriculture
    Farmers across the South continue to adapt to the challenging 
agriculture environment made worse by the pandemic, current 
macroeconomic trends, climate variability, and disrupted supply chains. 
However over the last 2 years, according to USDA estimates farm incomes 
have increased with a forecast for growth in 2022 in terms of gross 
farm income levels. But the growing challenges of inflationary pressure 
and supply chain issues will push net farm incomes lower as a result of 
sharply higher costs of inputs, particularly fertilizer and fuel. 
Increasingly adverse weather events are creating additional hurdles for 
farm viability.
    The current silver lining is the solid market prices and outlook 
for the near-term price changes which should sustain throughout the 
marketing year and into next year. These prices are evident across 
traditional row-crop commodities and for most of the specialty crop 
items. It should be noted that average gross farm and net farm income 
estimates obscure the difficulties occurring on the extreme ends of our 
farm distributions. Across our small- and mid-sized farms and even some 
of our large scale commercial operations, farm profitability remains a 
challenge.
    Many specialty crop producers have limited crop insurance options 
and the added costs sometimes results in minimal risk reducing 
strategies being implemented. The number of insurance products 
available for producers has expanded in recent years: whole farm 
revenue, dairy margin, forage, to name a few. Still, gaps in coverage 
remain. For example, the poultry sector--which is the largest single 
agricultural industry in many southern states--is dominated by contract 
production. Contract growers have virtually no access to insurance 
products.
    Even where newer insurance product offerings are available, a lack 
of understanding on the functionality of a number of these more 
specialized products is a persistent problem. Additional training is 
needed to improve farmer and rancher understanding and use of these 
products. There also appear to be training needs for insurance 
companies and agents on the array of available products. Some producers 
complain about the lack of a company/agent offerings in terms of a 
desired insurance product(s) as well as a lack of engagement with 
certain producer groups. Some of the limited engagement seems to occur 
from a specialization within the crop insurance companies. If an 
insurance company's portfolio of clients in a particular region is made 
up primarily of large scale commercial row-crop farms, they may have 
little incentive to cultivate business among small, specialty crop, 
and/or livestock producers, particularly on products for which sales or 
underwriting procedures are more difficult, such as whole farm revenue 
insurance.
Role of Southern Risk Management Education Center (SRMEC)
    The Agricultural Risk Protection Act (ARPA) of 2000, authorized the 
Secretary of USDA to carry out the program, Partnerships for Risk 
Management Education. Under this authority NIFA partners with four 
regional Extension Risk Management Education (ERME) Centers to carry 
out a national competitive grants program in Risk Management Education 
to educate agricultural producers about the full range of risk 
management activities. The Southern Risk Management Education Center 
(SRMEC) at the University of Arkansas has been a part of ERME since 
2009, serving 13 states and two Territories--the Southern Region. 
SRMEC's goal is to empower producers to manage risks. The Center 
strives to improve producers' ability to manage risk and increase 
profitability of southern agriculture by delivering programs designed 
to change risk management behavior among key producer populations.
    The ERME authorizing language has been amended through successive 
legislation, namely the 2008, 2014, and 2018 Farm Bills. As amended, 
the language describes the purpose of this risk management partnership 
as ``educating agricultural producers and providing technical 
assistance to agricultural producers on a full range of farm viability 
and risk management activities, including futures, options, 
agricultural trade options, crop insurance, business planning, 
enterprise analysis, transfer and succession planning, management 
coaching, market assessment, cash flow analysis, cash forward 
contracting, debt reduction, production diversification, farm resources 
risk reduction, farm financial benchmarking, conservation activities, 
and other risk management strategies.''
    Section 11125 of the Agricultural Improvement Act of 2018 provides 
authority for the USDA NIFA to expand the Partnerships for Risk 
Management Education program to serve a new audience, defined as 
``producers that are underserved by the Federal crop insurance 
program''. ERME implemented the expanded program by offering two 
separate grant pools within our annual request for applications (RFA) 
that seeks education project proposals: risk management education (our 
traditional program area), and producers underserved by crop insurance.
    SRMEC works with a ten member advisory council made up of public 
and private agricultural stakeholders that are strategically and 
intentionally engaged to serve our region's diverse agriculture 
sector--commercial, small, diversified, row-crop, livestock, organic, 
sustainable, urban, and specialty. Representation includes farmers, 
ranchers, 1862 and 1890 land-grant university faculty, and community 
based organization representatives. The Center annually manages $2 
Million in competitive grants that seek to empower producers to manage 
risk on their individual operations through educational offerings. To 
manage our two separate grant pools, SRMEC employs a ten member 
advisory council and a seven member evaluation panel made up of public 
and private agricultural stakeholders to identify our grant regional 
priority areas and capacity building efforts across the region. 
Additionally our advisory council and crop insurance evaluation panel 
serve as reviewers for our grants selection process using a transparent 
merit-based process.
Engagement with Risk Management Agency (RMA) and crop insurance 
        industry
    The ERME program routinely collaborates with RMA to promote RMA 
resources and to engage with its regional offices. Both programs 
collaborated to jointly develop and distribute a primer, Introduction 
to Risk Management (Crane, Gantz, Isaacs, Jose, and Sharp, 2013). The 
publication details ERME and RMA's consistent approach to managing 
risks across five areas: production, marketing, finance, legal, and 
human. The document not only defines each risk area but details 
specific tools and strategies to successfully mitigate the unique risks 
that agricultural producers face. Beyond the publication and on-going 
communications, each ERME Center has RMA representation on its advisory 
council. SRMEC has an RMA representative on our Advisory Council and 
two representatives on our crop insurance evaluation panel. We 
communicate on program and funding areas to build on the synergies of 
each program to serve farmers and ranchers. SRMEC actively engages with 
multiple regional offices and has on-going conversations with RMA 
administrators on ways to enhance outreach efforts and resources.
    Last, SRMEC has on-going conversations with the crop insurance 
industry--individual companies, National Crop Insurance Services, and 
Crop Insurance Professional Association (CIPA)--on ways to collaborate 
on company/agent trainings. The pandemic interrupted planning for a 
company/agent training in collaboration with CIPA, but those 
discussions are on-going. SRMEC envisions offering continuing education 
credits to enhance crop insurance industry stakeholder understanding of 
emerging issues in agriculture and best management practices for 
engaging diverse producer groups.
Current Condition for SDFRs
    The Census of Agriculture reveals that most socially disadvantaged 
farmers and ranchers (SDFRs) on average operate relatively smaller 
sized farms, thereby leveraging smaller operating loans to produce 
their crops each year. It should be noted that USDA program historical 
equity and access issues have played a role in limiting the 
opportunities for SDFRs to gain economies of scale--increasing farm 
size and investing in innovative or new machinery/technology. The lack 
of opportunities to scale up results in lower productivity and 
relatively higher input costs on average. Even when SDFRs participate 
in USDA farm programs, they receive a disproportionately lower level of 
Federal support in terms of funds to reinvest in their farms. The 
cumulative impact of lower support levels over an extended period of 
time--10 year, 20 year horizon, etc.--results in real differences in 
terms like size of operation and equipment/facilities, seriously 
compromising the viability of SDFR-owned operations.
    I serve on the board of directors for the Socially Disadvantaged 
Farmer and Rancher Policy Research Center at Alcorn State University. 
The Policy Research Center actively organizes and examines research, 
data, and producer feedback to provide insights to enhance 
understanding of SDFR conditions and policy recommendations to enhance 
their economic viability and survival. The Policy Research Center notes 
the following discrepancy in risk management/crop insurance subsides. 
As Federal crop insurance subsidies programs have increased, the 
``subsidy gap'' has widened between White and Black farmers. Because 
crop insurance subsidies are based on the value of a producers' crop, 
the larger subsidy premiums go to producers with the highest sales. The 
vast majority of farmers that receive the highest subsides are White. 
The 2017 USDA Census Report, indicates that slightly over 2,500 Black 
farmers had product sales for more than $50,000, compared to 500,000 
white producers. Almost 50% (16,891) of all (35,470) Black owned farms 
had less than $2,500 in sales. With premium subsides being linked to 
the value of the crop, it is a safe estimate that between 95-97% of 
crop insurance subsides have gone to white producers.
    Another issue that continues to plague SDFRs is real and perceived 
trust issues resulting from current/past experiences and on-going 
confrontations. For example, there are a number of producers who refuse 
to enter a USDA office even in 2022 because of fear-based on 
experiences--of disparate treatment, losing their land or being 
foreclosed on a loan under less than fair conditions. Therefore, the 
ability to build and restore trust and relationships is a critical 
hurdle to effectively reach marginalized producers and their 
communities with USDA programs/resources. The resulting community 
impact of inequitable access to Federal and state programs have played 
a significant role in individual and community wealth levels across 
both urban and rural areas.
    In terms of crop insurance, my past experience with managing 
education projects reveals that technical assistance in record-keeping, 
business planning, and tax preparation are core areas to build and 
maintain viable businesses. These fundamental processes are directly 
linked to credit access and indirectly linked to use of crop insurance. 
Additional technical assistance in these core areas could enhance 
producer understanding of ways to leverage crop insurance products to 
support their businesses.
Overview of working with 1862, 1890 Land Grants & Community-Based 
        Organizations
    As SRMEC director, I have been privileged to work with a collection 
of public and private agricultural stakeholders assisting our farmers 
and ranchers across the region and nationally. SRMEC has intentionally 
engaged with diverse stakeholder groups to build meaningful 
relationships across region and nationally. This includes engagement 
with diverse farm types and producer backgrounds as well as grower 
organizations. We collaborate annually with 1890 Extension and outreach 
specialists, primarily small farm program (2501) directors and 
community based organizations that serve an array of producer groups 
ranging from African American, Native American, Hmong, Organic, 
Sustainable, Livestock, Row-Crop, Greenhouse & Nursery, to name a few. 
Within the 1862 land-grants, we collaborate with the region's farm 
management committee--Southern Extension Economics Committee. The 
committee is made up of agricultural economists from the region's land-
grant institutions, primarily those with Extension responsibilities. 
Annually, the Center supports the region's premiere academic outreach 
meeting, the Southern Outlook Conference, which is hosted by Southern 
Extension Economics Committee. SRMEC features its collaborations with 
the farm management committee and 1890 partners on our website, https:/
/srmec.uada.edu/.
    Last, SRMEC partnered with the Agricultural and Food Policy Center 
at Texas A&M to lead a collaborative effort among the Southern 
Extension Economics Committee to offer Southern Ag Today (SAT). SAT is 
a daily insight and analysis on issues impacting southern farmers and 
producers and is a timely resource for anyone--farmers, ranchers, 
Extension educators, lenders, policy makers, and media--who wants a 
better understanding of the issues affecting agriculture in the region.

    The Chair. All right, very good. Thank you, Dr. Rainey. I 
appreciate that.
    Dr. Outlaw, please begin when you are ready.

         STATEMENT OF JOE L. OUTLAW, Ph.D., PROFESSOR, 
             EXTENSION ECONOMIST, AND CO-DIRECTOR, 
AGRICULTURAL AND FOOD POLICY CENTER, DEPARTMENT OF AGRICULTURAL 
      ECONOMICS, TEXAS A&M UNIVERSITY, COLLEGE STATION, TX

    Dr. Outlaw. Chair Bustos, Ranking Member Scott, and Members 
of the Subcommittee, thank you for the opportunity to testify 
on behalf of the Agricultural and Food Policy Center at Texas 
A&M University as you focus on opportunities to enhance Title I 
and XI programs.
    As many of you know, the primary focus of AFPC has been to 
analyze the likely consequences of policy changes at the farm 
level with our one-of-a-kind data set of information that we 
collect from commercial farmers and ranchers located across the 
United States. Working closely with 675 commercial producers 
has provided our group with a unique perspective on 
agricultural policy. Currently, we maintain the information to 
describe and simulate 94 representative crop and livestock 
operations in 30 states.
    In order to provide perspective on Titles I and XI, I 
wanted to briefly summarize a recent report that looks at farm 
profitability in 2022 relative to 2021 for our 64 
representative crop farms in the face of higher input and 
output prices. For this report, we asked our panel members to 
provide their cost per acre for each of those years. While some 
producers were able to benefit by locking in input prices early 
in 2021 for this year's crop, most indicated very little 
ability to do so. The news is full of stories about inflation 
is averaging 8.5 percent so far this year for the average 
American. The lowest year-over-year inflation farmers are 
saying is twice that on seed with most commodity categories 
many times higher.
    The following are highlights of the analysis that are 
relevant for today's hearing. Net cash farm income in 2021 
included a significant amount of ad hoc assistance. Absent 
another infusion in 2022, we estimate that significant 
increases in input prices will result in a decline in net cash 
farm income in 2022 relative to 2021. However, despite the 
income reduction from 2021, most crops will likely still result 
in positive net cash farm income for the representative crop 
farms. The noticeable outlier is rice. Two-thirds of rice 
farmers are facing losses in 2022. Having worked with farmers 
over the last 30 years, I want to make sure you understand we 
are talking about historic amounts of capital that farmers are 
putting at risk.
    Throughout my career, I have referred to the programs of 
Title I and Title XI as the three-legged stool that serves as a 
safety net for U.S. producers. Agriculture Risk Coverage, ARC, 
and Price Loss Coverage, PLC, and the Non-recourse Commodity 
Loan Program serve as two of the legs while the Federal Crop 
Insurance Program serves as a third leg.
    Price Loss Coverage was established in the 2014 Farm Bill 
using the cost of production as a basis for setting a level of 
protection for each covered commodity through reference prices. 
PLC rates worked fine while inflation was fairly low. However, 
the reference prices are in dire need of increases to remain 
relevant. Producers' costs have increased substantially, and 
the current reference prices are not providing a relative 
amount of protection.
    Agriculture Risk Coverage was also established in the 2014 
Farm Bill. ARC uses a 5 year moving average of historic prices 
and yields to establish a benchmark that is used to determine 
the level of protection producers received. While good when 
coming off of relatively high prices, ARC proves worthless when 
prices declined or remained relatively flat. Since ARC has a 
reference price embedded in the calculations, raising reference 
prices will make ARC attractive as a revenue protection safety 
net alternative.
    Assuming these two alternatives are used, going forward, 
instead of forcing producers to pick the tool ARC or PLC they 
want, I would suggest allowing them to receive the benefits of 
whichever is higher in a given year. This would cost nothing 
more than if producers have chosen wisely.
    Historically high input costs have also highlighted the 
shortcomings of basic safety nets on prices and/or gross 
incomes alone. This may present an opportunity to explore 
adding margin coverage. However, I would urge you to proceed 
with caution. Dairy offers a constructive example. Dairy margin 
coverage was added in the 2014 Farm Bill, but the initial 
version was a flop that has taken years and a lot of money to 
improve.
    The Non-recourse Loan Marketing Program works as it was 
designed. The rates have largely remained unchanged over the 
past 30 years, losing ground to inflation. The rates need to be 
raised to increase the amount of the crop that is being 
protected, which will cost money.
    Federal crop insurance is an enormously successful public-
private partnership that stands today as the primary safety net 
tool for U.S. producers. As I have said many times in front of 
Congress, do no harm to crop insurance and stop outside 
interest groups from trying to tie provisions of their pet 
projects to crop insurance, for example, linking climate change 
practice adoption to insurance program subsidy levels.
    While this hearing is about the farm bill, I would be 
remiss if I didn't mention the last 5 years of ad hoc disaster 
assistance. I believe the upcoming farm bill provides an 
opportunity to help address some of the shortcomings of ad hoc 
assistance that that ad hoc assistance was designed to address.
    Madam Chair, thank you. This completes my statement.
    [The prepared statement of Dr. Outlaw follows:]

   Prepared Statement of Joe L. Outlaw, Ph.D., Professor, Extension 
   Economist, and Co-Director, Agricultural and Food Policy Center, 
  Department of Agricultural Economics, Texas A&M University, College 
                              Station, TX
    [Chair] Bustos, Ranking Member Scott, and Members of the 
Subcommittee, thank you for the opportunity to testify on behalf of the 
Agricultural and Food Policy Center (AFPC) at Texas A&M University as 
you focus on opportunities to enhance Title I and XI programs. As many 
of you know, the primary focus of AFPC has been to analyze the likely 
consequences of policy changes at the farm level with our one-of-a-kind 
dataset of information that we collect from commercial farmers and 
ranchers located across the United States.
    Our Center was formed at Texas A&M University more than 30 years 
ago at the request of Congressman Charlie Stenholm to provide Congress 
with objective research regarding the financial health of agricultural 
operations across the United States. Since that time, we have worked 
with the Agricultural Committees in both the U.S. Senate and House of 
Representatives, providing Members and Committee staff objective 
research regarding the potential farm-level effects of agricultural 
policy changes.
    Working closely with 675 commercial producers located across the 
United States has provided our group with a unique perspective on 
agricultural policy. Currently, we maintain the information to describe 
and simulate 94 representative crop and livestock operations in 30 
states. We have several panels that continue to have the original 
farmer members we started with back in 1983. We update the data to 
describe each representative farm relying on a face-to-face meeting 
with the panels every 2 to 3 years. We partner with the Food & 
Agricultural Policy Research Institute (FAPRI) at the University of 
Missouri which provides projected prices, policy variables, and input 
inflation rates. The producer panels are provided pro forma financial 
statements for their representative farm and are asked to verify the 
accuracy of our simulated results for the past year and the 
reasonableness of a 6 year projection. Each panel must approve the 
model's ability to reasonably reflect the economic activity on their 
representative farm prior to using the farm for policy analysis.
    In order to provide perspective on Titles I and XI, I wanted to 
briefly summarize a recent AFPC report that looks at farm profitability 
in 2022 relative to 2021 for our 64 representative crop farms in the 
face of higher input and output prices.\1\
---------------------------------------------------------------------------
    \1\ Economic Impact of Higher Crop and Input Prices on AFPC's 
Representative Crop Farms, AFPC Briefing Report 22-05. https://
www.afpc.tamu.edu/research/publications/files/716/BP-22-06.pdf.
---------------------------------------------------------------------------
    For this report, we asked our panel members to provide their costs 
per acre for 2022 versus 2021 for the major input categories. The 
average for each category across all respondents is presented in Table 
1. Updated commodity prices for the 2021/22 and 2022/23 marketing years 
and policy variables were obtained from the FAPRI-MU Bulletin #01-22 
entitled U.S. Agricultural Market Snapshot, April 2022 (Table 2). While 
some producers were able to benefit by locking in input prices early in 
2021 for this year's crop, most indicated very little ability to lock 
in these prices even when using their normal tax management strategy of 
prepaying inputs. Simply, the input suppliers would not lock in a price 
until the producers agreed to take delivery. Almost every respondent 
stated they were going to do their best to reduce input usage in the 
face of the highest costs of production they had ever experienced.
    The news is full of stories about inflation that is averaging 8.5 
percent so far this year for the average American. The lowest year-
over-year inflation farmers are seeing is twice that on seed with most 
categories many times higher. Commodity prices, while generally higher 
in 2022, are up less than eight percent. If not for the incredible 
productivity of the U.S. farmer, there would be a major financial 
crisis in agriculture.

          Table 1. Average Percentage Change in Representative Farm Input Costs/Acre from 2021 to 2022.
----------------------------------------------------------------------------------------------------------------
                                               Phosphorus &
                       Seed       Nitrogen      Potassium      Herbicide     Insecticide    Fungicide    Fuel &
                                 Fertilizer     Fertilizer                                                Lube
----------------------------------------------------------------------------------------------------------------
Percentage Change     16.58%      133.62%         92.75%        64.23%         40.25%         36.02%     86.63%
     2021 to 2022
----------------------------------------------------------------------------------------------------------------


Table 2. Projected Commodity Prices Reported in FAPRI April 2022 Update,
                  Marketing Years 2021/22 and 2022/23.
------------------------------------------------------------------------
                                                            Percentage
                            2021/22          2022/23          Change
------------------------------------------------------------------------
        Corn ($/bu)             $5.78            $6.06            4.84%
       Wheat ($/bu)             $7.60            $8.08            6.32%
     Soybean ($/bu)            $13.27           $14.22            7.16%
Grain Sorghum ($/bu)            $5.87            $6.14            4.60%
      Barley ($/bu)             $5.27            $5.60            6.26%
        Oats ($/bu)             $4.30            $4.00           ^6.98%
Upland Cotton ($/lb)           $0.910           $0.871           ^4.29%
 Seed Cotton ($/lb)            $0.464           $0.443           ^4.53%
     Peanuts ($/lb)            $0.238           $0.240            0.84%
Sunflower Seed ($/lb)          $0.318           $0.324            1.89%
      Canola ($/lb)            $0.318           $0.295           ^7.23%
   All Rice ($/cwt)            $15.80           $15.84            0.25%
                   Long Grain R$13.75/          $14.03            2.04%
                cwt)
------------------------------------------------------------------------

    The following are highlights of the analysis that are relevant for 
today's hearing:

   Net cash farm income in 2021 included a significant amount 
        of ad hoc assistance. Absent another infusion of assistance in 
        2022, we estimate that significant increases in input prices 
        will result in a huge decline in net cash farm income in 2022 
        (compared to 2021).

   Despite the significant reduction from 2021, higher 
        commodity prices for most crops will likely still result in 
        positive net cash farm income for most of AFPC's representative 
        crop farms. The noticeable outlier is rice--\2/3\ of the rice 
        farms are facing losses in 2022.

   The analysis hinges on producers receiving the higher 
        commodity prices forecasted by FAPRI with average yields. With 
        drought being experienced across a significant portion of the 
        country and many other areas facing excess moisture, this 
        assumption may be overly optimistic.

   Having worked with farmers located across the U.S. over the 
        last 30 years, I want to make sure you understand we are 
        talking about historic amounts of capital that farmers are 
        putting at risk

    Throughout my career, I have referred to the programs in Title I 
and Title XI as the three-legged stool that serves as the safety net 
for U.S. producers. The specific commodity programs in Title I have 
changed over that time, but all generally have the same objective to 
make-up for shortfalls in prices or incomes. The current programs, 
agriculture risk coverage (ARC) and price loss coverage (PLC) and the 
non-recourse commodity loan program, serve as two of the legs while the 
Federal Crop Insurance Program serves as the third leg.
    The following are what I believe to be the most significant 
shortcomings of all three legs of the stool. Most of my suggestions 
require additional resources that may be difficult to secure but are 
necessary.
    Price Loss Coverage (PLC) was established in the 2014 Farm Bill 
using the cost of production as the basis for setting the level of 
protection for each covered commodity through reference prices. 
Counter-cyclical price protection programs like PLC have been used in 
the U.S. since the 1970s with the notable exception of the 1996 Farm 
Bill. In the PLC program, I believe your colleagues decided to cover a 
significant amount (roughly 75% to 85%) of total costs of production 
realizing the likely negative consequences of providing price 
protection at higher levels. PLC rates worked fine while inflation was 
fairly low; however, the reference prices set in the 2014 Farm Bill and 
continued in the 2018 Farm Bill are in dire need of increases to remain 
relevant. Producers' costs have increased substantially, and the 
current reference prices are not providing a relevant amount of 
protection.
    Agriculture Risk Coverage (ARC) was also established in the 2014 
Farm Bill as a second attempt at providing producers a revenue-based 
safety net program to replace the overly complicated and not widely 
used average crop revenue election (ACRE) program first used in the 
2008 Farm Bill. ARC uses a 5 year moving average of historical prices 
and yields to establish a benchmark that is used to determine the level 
of protection producers receive. While good when coming off of 
relatively high prices, ARC proved worthless when prices declined and 
remained relatively flat, providing little protection to producers. 
This is why that while widely chosen over PLC early in the 2014 Farm 
Bill, ARC was largely abandoned as a choice of safety net program in 
recent years. The problem with ARC is that it assumes the historical 
revenue levels were the appropriate levels that producers should be 
supported at without any basis such as protecting some level of costs 
for making that claim. Since ARC has the reference price embedded in 
the calculations, raising reference prices will make ARC more 
attractive as a revenue protection safety net alternative.
    Assuming these two alternatives are used going forward, instead of 
forcing producers to pick the tool (ARC or PLC) they want, I would 
suggest allowing them to receive the benefits of whichever is higher in 
a given year. This would cost nothing more than if the producers have 
chosen wisely and selected the appropriate tool and would take a major 
decision away that only serves as a major distraction to their work in 
trying to grow a crop. Historically high input costs have also 
highlighted the shortcomings of basing the safety net on prices and/or 
gross incomes alone. This may present an opportunity to explore adding 
margin coverage. However, ARC & PLC have been popular, so I would urge 
you to proceed with caution. Dairy offers an instructive example. Dairy 
margin coverage was added in the 2014 Farm Bill, but the initial 
version was a flop that has taken years (and a lot of money) to 
improve.
    The Non-recourse Marketing Loan Program works as it was designed 
more than 4 decades ago; however, despite modest increases for some 
commodities in the 2018 Farm Bill, the rates have largely remained 
unchanged over the past 30 years, losing ground to inflation. Providing 
producers the ability to take out a storage loan or receive a loan 
deficiency payment on a crop is a very useful marketing tool. The rates 
need to be raised to increase the amount of the crop that is being 
protected which will cost money but is significantly less expensive to 
do at current price levels.
    Federal crop insurance is an enormously successful public-private 
partnership that today stands as the primary safety net tool for U.S. 
producers. This is due to the program largely using futures prices to 
annually adjust the amount of protection producers can select. While 
crop insurance is popular with producers, the little-known secret in 
the farming community is that bankers ``encourage'' producers to 
purchase buy-up levels of crop insurance as a means of protecting the 
producer and the operating loan banks make to producers. As I have said 
many times in front of Congress. do no harm to crop insurance and stop 
outside interest groups from tying provisions of their pet projects to 
crop insurance--for example, linking climate change practice adoption 
to insurance program subsidy levels. This runs the risk of creating an 
unlevel playing field for producers by distorting protection levels and 
leaving some producers with less protection due to their lack of 
feasible climate change mitigation alternatives.
    While this hearing is about the farm bill, I would be remiss if I 
didn't mention the last 5 years of ad hoc disaster assistance. I 
believe the upcoming farm bill provides a clear opportunity to help 
address some of the shortcomings ad hoc assistance was designed to 
address. In the case of WHIP, WHIP+, and ERP, they all essentially are 
designed to help cover the large deductibles producers face in their 
crop insurance policies. While the ad hoc assistance over the last 5 
years has been vital, it comes LONG after the disaster has come and 
gone and has been limited to specific causes of loss. Perhaps most 
important, ad hoc assistance is, by definition, not guaranteed. Farmers 
already face enough risks and uncertainty--ideally, they wouldn't have 
to guess at what the safety net might look like as they struggle to put 
a crop in the ground.
    [Madam Chair,] that completes my statement.

    The Chair. Thank you, Dr. Outlaw.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. You will each be recognized for 5 minutes each in 
order to allow to get to as many questions as possible. Please 
keep your microphones muted until you are recognized in order 
to minimize background noise. For starters, I will recognize 
myself for 5 minutes and start with our line of questioning.
    And my questions just so all four of you are paying 
attention, I would like all four of you to address it. And, Dr. 
Janzen, I am going to ask you to address it first, just because 
you are from my home State of Illinois, all right, so you get 
that that benefit. So here you go. What is an appropriate 
metric we should be using to evaluate how the safety net should 
be structured? ARC kicks in when there are relatively 
significant drops in revenue compared to the previous few 
years. PLC kicks in when prices drop below a set level. And 
producers face risk now of tightened margins. How should we 
think about an appropriate structure of the farm safety net? 
This is really to help us start laying the foundation for what 
do we want to consider as we look at the 2023 Farm Bill. Dr. 
Janzen, we will start with you.
    Dr. Janzen. I think an appropriate measure, a starting 
point is the level of price. And looking to--there is a long-
standing debate about whether we should have sort of flexible 
or fixed parameters. And it is something that I think it 
would--if Congress wants to step up and say that we know what 
the long run level of price is at which we would like to fix 
the safety net, then the PLC reference price is that parameter 
in current policy and likely to be something similar in policy, 
going forward.
    So we need to decide what that price is. And it is 
important to remember that that is the season average price, 
not the price on one day, but the price over the course of an 
entire year. And I think it is important to recognize that we 
have a situation right now, where prices are high, but people 
are worried about price declines. But it is important to sort 
of wait until those price declines are realized and we 
understand what net farm income is in a given year before we 
sort of define whether there is a realized loss that is worth 
having some sort of policy intervention to cover.
    The Chair. Very good. And, Dr. Outlaw, if you can answer 
the question as well.
    Dr. Outlaw. I tend to take a little bit different view. I 
look at the cost of production as basically something that 
tells me that we need to cover a good portion of the cost if we 
are going to keep people producing in this country. And one of 
the things that our center has done for various Members of 
Congress over time was look at a lot of different ways of 
trying to attach escalators to the reference price, for 
example, that would take into consideration cost increases, and 
so that producers wouldn't be caught flat whenever prices--what 
we know is going to happen turn, Madam Chair, is that the 
prices are going to decline, but the input prices are going to 
stay up for a while. And they always do. And that is going to 
lead people to what we call a cost price squeeze. And so either 
looking at some sort of margin or building in the ability to 
ratchet up the reference price with costs is my suggestion.
    The Chair. Thanks, Dr. Outlaw.
    Dr. Rainey, is there anything that you would have to add to 
either one of those responses?
    Dr. Rainey. Again, I would focus in on the comments made by 
Dr. Outlaw. I think that the margins--because just focusing on 
price, you get in the situation we have now where input costs 
are increasing and inflationary pressures. And so you are going 
to have some intense pressure where that safety net will be 
weakened.
    The Chair. Thanks, Dr. Rainey. And then, Mr. Craven, 
anything else to add?
    Mr. Craven. I would just second Dr. Outlaw's comments. We 
have looked at cost reduction for corn in Minnesota for 2023, 
and it is $5.18, which is a long ways away from where we 
currently have in reference prices.
    The Chair. Very good. Dr. Janzen, I am going to address my 
second question to you. I appreciate you sharing your insight 
on what you shared about commodity prices and the implication 
of Putin's invasion of Ukraine and the current and future farm 
policy. You talked about how the recent increases in commodity 
prices are expected to be larger than growth in input costs for 
corn, soybean, and wheat farmers for the marketing year of the 
2022 crop. Coming into this growing season, and with the 
uncertainty producers face over input costs and market prices, 
can you talk about the sort of considerations that farmers are 
making in their inputs for this year and looking ahead to next 
year?
    Dr. Janzen. Right. There is tremendous uncertainty, and the 
capital required is massive. And those put everyone on sort of 
a little bit of unstable footing. The question I think for 
this, under the aegis of this Committee is related to what 
losses have occurred. And as of yet, those losses are not yet 
realized. We do have a crop insurance program that will step 
in, in the situation where production declines occur because of 
weather or other things beyond the control of the producers. 
That safety net is in place, and we have to let that sink in 
and play out.
    The Chair. We could talk a lot deeper about this, but with 
the time expired, I will now recognize the gentleman from 
Georgia, Mr. Austin Scott.
    Mr. Austin Scott of Georgia. Thank you, Madam Chair.
    And Mr. Craven, when you put that number up there on the ad 
hoc assistance, I assume that include the USDA Food Box 
Program, is that correct?
    Mr. Craven. Yes, that is correct.
    Mr. Austin Scott of Georgia. Okay.
    Mr. Craven. We didn't differentiate, so if the ad hoc 
included PPP loan forgiveness, the WIC programs, CFAP, the QLA 
payments, so there was a long list of payments that were in 
that ad hoc category.
    Mr. Austin Scott of Georgia. Okay. I will ask staff to do 
this, but I would like to see that chart without the food box 
and other things in there simply because I do know farmers who 
are literally carrying their crops under it, and had it not 
been for the food box program where we did some unusual things 
where we actually purchased the commodities from the farmers 
and delivered them to the American citizens, I can tell you we 
would have had a lot of hungry people inside this country.
    And I do think that as this Committee pushes forward, if we 
deal with the crop insurance system in an appropriate manner, 
then there for the majority of the time should be less ad hoc 
assistance, including disaster assistance, if we get the crop 
insurance program correct. Would you agree with that, as an 
economist? That if crop insurance is handled properly, that we 
would need less ad hoc assistance?
    Mr. Craven. I would agree with that. And, I didn't talk 
much about crop insurance in my presentation.
    Mr. Austin Scott of Georgia. That is fine.
    Mr. Craven. I certainly think that is the basis that almost 
all producers rely on, at least commodity producers in terms of 
the first support net that we have out there.
    Mr. Austin Scott of Georgia. Let me mention, we have talked 
some about Russia and production costs. One of my farmers sent 
me these numbers. In May of 2019 he was paying $248 a ton for 
nitrogen. In May of 2022, just a few days ago, he paid $682 a 
ton. I think as we talk about Russia and even Belarus, we have 
to remember that Russia is the number one producer of nitrogen. 
And Russia and Belarus are number two and number three, I 
believe, in potash production, which we all depend on for the 
yields that we have in this country.
    And so as we have touched on higher operating revenue in 
2022, we have to have a long-term outlook for production 
agriculture inside this country. And so the 2022 forecasts are 
based on expected yields. Inputs have gone up, particularly 
fertilizer and diesel. I know many farmers are looking to save 
costs by applying less nutrients. We had an issue where Union 
Pacific curtailed fertilizer shipments. Now I understand that 
they undid that. But certainly if you don't have the ability to 
get the nutrients in the crop in a timely manner, then that 
impacts yield. If farmers are not able to get the nutrients on 
their crops, if this prevalent behavior results in lower 
yields, how concerned are you that actual operator returns 
would be significantly less than currently anticipated? Dr. 
Outlaw?
    Dr. Outlaw. Oh, very concerned. Aside from price, weather 
concerns around the country are still making it where some 
crops are not even in yet. So the producers that we deal with 
reach out to me on a daily basis, talking about the fact of 
individual instances of not being able to get different inputs, 
whether it be chemicals or nutrients. And this was a real 
challenge and it has kind of proved to be a challenge. Farming 
is an extremely difficult thing to do, even though they make it 
look these look easy at times. And if we have any kind of 
weather blip, we are going to not have the yields. And as was 
stated earlier, we are going to have even worse price situation 
than when we thought.
    Mr. Austin Scott of Georgia. Well, I think navigating over 
the next year is going to be difficult for our farm families, 
but we have to have a crop insurance system that is going to 
allow them to navigate over the next decade. I don't want my 
country to become dependent on foreign sources of food, and I 
don't know any American that does. I would suggest that none of 
you has spoken about the removal of some of the products, I 
mean, glyphosate, Dicamba. As you remove those products from 
the farmers' tools, what is that going to do to the yields in 
this country? Dr. Outlaw?
    Dr. Outlaw. They are going to go down.
    Mr. Austin Scott of Georgia. I think that is important for 
Americans to understand, that as liberals use the courts and 
other things to remove the products that we need as farmers to 
produce the food supply for America and the rest of the world, 
that as our yields go down, the prices for Americans at the 
grocery store is going to go up.
    With that, Madam Chair, I will yield back.
    The Chair. Thank you, Mr. Scott.
    I will now recognize the gentleman from Arizona, Mr. 
O'Halleran.
    Mr. O'Halleran. Thank you, Madam Chair and Ranking Member, 
for this meeting today. It is important for getting prepared 
for the farm bill.
    I have been interested in hearing what I have so far this 
morning. And it is my belief that we have to find a way for 
better flexibility, innovation, and timely action. Congress and 
government in the whole have to start to understand that these 
dynamic markets that we are seeing now are not going to go away 
anytime soon, and we have to be prepared for that in the long 
run. And that means being on our feet and ready to move 
instantly in many cases, as the world changes and climate 
changes.
    Arizona has experienced the worst drought the region has 
seen in 1,200 years, and it is going to get worse. The arid 
climate and skyrocketing temperatures have only worsened since 
we passed the 2018 Farm Bill, and it is essential we update 
critical safety net programs to reflect these changes.
    Nationally, producers are contending with high fuel and 
fertilizer costs. On top of this, producers are facing extreme 
drought conditions, run the risk of ultimately not being able 
to grow their crop because of soaring temperatures and 
wildfires. In fact, my last time in the district last week, as 
I went around it, it is probably--I have lived in Arizona now 
for 28 years. I have never seen conditions like this and with 
no relief in sight. Whether it is the Southwest or the South or 
anywhere else in our great country and the world, we have 
something that has to be overcome, and we can't do it by half 
measures.
    So, Dr. Outlaw, because of more frequent and severe weather 
events, Congress authorized an ad hoc disaster assistance to 
supplement crop insurance and support uninsured producers. And 
how are producers in drought-stricken areas faring in the 
current state of the farm economy?
    Dr. Outlaw. Oh, specifically, due to the program you 
mentioned, you all have passed WHIP and the WHIP+ and then the 
new program that recently was rolled out is going to provide a 
lot of protection, which will help producers when they have had 
a loss, and it will help cover a portion of the deductible that 
they don't get paid on. So that has been a very important 
aspect of the programs.
    Mr. O'Halleran. Thank you. Another question, are our crop 
insurance and disaster programs adequately supporting farm 
incomes affected by drought?
    Dr. Outlaw. Well, I would have to say they are because crop 
insurance is very strong. And, the way it works, most of their 
commodities, the price that establishes the amount of coverage 
is adjusted off of the futures market, which on an annual basis 
is really good. When prices are moving up, we have a lot of 
protection. So producers have a lot of protection through their 
products right now. And then with the new ad hoc disaster 
program that is going to pay part of the deductible back 
because of some sort of a loss, one of those being drought, 
then they are going to be made more whole is the way to say it. 
They are not going to be made whole but more whole.
    Mr. O'Halleran. Thank you, Doctor. And, Dr. Rainey, 
Arizona's First Congressional District is home to many rural 
and Tribal communities that you know about, and many may not 
always have easy access to risk management programs. Could you 
please talk about the work the Southern Risk Management 
Education Center does to help underserved producers manage 
their risk and the type of outreach the Center does to these 
communities?
    Dr. Rainey. Yes, so we provide grants to actually hold 
face-to-face outreach trainings to help explain those different 
insurance products to the various groups, farmers and ranchers 
that are interested in them. We try to make connections with 
risk management agencies so that there is an additional agency 
there to help make the connection to some of the companies and 
the agents to talk about the different products and services 
that are available. So we are there as an educational endeavor 
to try to make those connections to make that process more 
transparent so that our farmers can not only understand the 
environment that they are facing, but understand the specific 
tools or what may be best for them to use, what insurance 
product would work best for them.
    Mr. O'Halleran. Thank you, Dr. Rainey. And I see my time is 
almost up and I yield back. Thank you, Madam Chair.
    The Chair. Thank you, Mr. O'Halleran.
    I now recognize the gentleman from Pennsylvania, the 
Ranking Member of our full Committee, Mr. Thompson.
    Mr. Thompson. Madam Chair, thank you so much. First 
question is, Dr. Outlaw, in your testimony, you mentioned the 
potential for Congress to explore a margin program. That is a 
concept that I have been interested in as, by and large, dairy 
producers in Pennsylvania have been pleased with how the Dairy 
Margin Coverage has functioned after we made key improvements 
in the 2018 Farm Bill. Could you perhaps explain a bit further 
on how something like that might work for row crops in 
particular, and what would be the benefits of a margin-based 
program versus a support based on price alone?
    Dr. Outlaw. Well, clearly the benefit is that it would take 
into consideration both the cost side and the revenue side 
where we are largely protective of the revenue side in this 
country. That would definitely be one of those things that I 
would hope that you would ask our center to look into for you, 
or for this Committee because it would--on the surface it 
sounds relatively easy. I know that those of you that were 
involved in the dairy program know that it took a little bit of 
time to get it to where that worked well.
    Mr. Thompson. Yes.
    Dr. Outlaw. And what I would say is maybe you would want to 
consider doing a pilot for a certain commodity because while it 
was very simple to--among us economists, we would come up with, 
well, on the on the cost side, fertilizer, clearly fuel and 
labor, and there are a whole lot of things that would matter 
for a certain set of crops that might not matter as much for 
another set of crops. So we would have to be really careful to 
make sure that we did it balanced, but it would be worth 
looking at for sure.
    Mr. Thompson. Yes, absolutely. I mean, there are a lot of 
variables in farming, right, soil types, climate, moisture. But 
the bottom line is that agriculture is a business. At the end 
of the day, it is not what you bring in, it is the margin you 
are left with. And I have tremendous concerns with where we are 
heading right now.
    On that note, while prices for most commodities are at high 
levels and some paint a rosy picture for agriculture, I think 
it is mostly by folks who really don't understand that farming 
is a business, and at the end of the day, it is the margin you 
are left with, if any. I am not optimistic about this.
    Net farm income projections are based on an expectation of 
average yields, which is not a given. Additionally, it will 
only take some softening of prices before producers may be 
underwater, as you have well-stated. Commodity prices can drop 
overnight, but input costs, once they are up there, it is 
difficult to see them lower. Would any of our witnesses care to 
speculate--I am asking for your crystal balls now I guess--
about how long we might expect bullish commodity markets? And 
when prices do begin to moderate, how long would you expect it 
would take for production expenses to the fall? Or is this the 
new normal? And I know it is speculation.
    Dr. Janzen. I think we can say from the price signals that 
we see right now, prices will remain elevated for the 2023 
crop. The new 2023 prices for delivery for that harvest are 
still well above historic levels, levels that, say, wouldn't 
cause the PLC program to kick in, for example.
    Now, probably the biggest factor is obviously the war in 
Ukraine. Some resolution to that conflict will lower commodity 
prices, both on the output side and the input side. But I think 
you are right, that there is significant concern that even on 
the input side, there are a host of issues around the world 
that would leave input prices elevated. And that is that is a 
concern for us agriculture, going forward.
    Mr. Thompson. Yes, just the clearing of those mines in the 
port of Odessa to allow those grain elevators to be offloaded 
so they can be refilled. Any of the other witnesses, any 
thoughts or comments on that particular question?
    Mr. Craven. I guess as we look back, Congressman, at 2012 
and how many years it took for costs to come back in line with 
lower prices, it was a 4 or 5 year process before things got 
lined back up again. So it takes a long time to get those back 
down, as Joe pointed out earlier.
    Mr. Thompson. Yes, now, I am going to tee this one up and 
would love to follow up individually with you just because all 
the time remaining. I have been hearing a lot about--and I want 
to kind of look at the economic impact on commodity prices, but 
it is a total curveball. It has to do with solar fields being 
on fertile farmlands. And I think some of our other Members of 
the Committee are hearing about this as well. That is putting 
out policies that--policies have impact, right? I am recently 
hearing a lot of discussion and concern that government policy 
is incentivizing placement of solar farms on fertile farm, not 
marginal, but fertile farm land driving up the competition for 
leasing acreage, and that is really important for our young and 
beginning farmers. And so I would love to follow up with you, 
any thoughts you might have in writing or in person, if this is 
or could be a significant input cost variable going forward, 
just cost of acreage.*
---------------------------------------------------------------------------
    * Editor's note: the responses to the information referred to are 
located: for Dr. Janzen, on p. 1013; Mr. Craven, on p. 1014; and Dr. 
Outlaw, on p. 1014.
---------------------------------------------------------------------------
    Thank you, Madam Chair.
    The Chair. All right. Thank you, Mr. Thompson.
    I now recognize the gentleman from Florida, Mr. Lawson.
    Mr. Lawson. Thank you, Madam Chair and Ranking Member 
Scott, for hosting this important hearing. I would like to 
welcome all of the panel to the Committee because it is very 
important area.
    Federal crop insurance is a hugely successful public-
private partnership, that today's stands as the primary safety 
net for the U.S. producers. However, in your testimony, Mr. 
Rainey, you discuss a lack of understanding among insurance 
companies on available products and the lack of engagement with 
certain producers. What do you believe, Mr. Rainey, Congress 
can do to bridge the gap and encourage insurance companies and 
their agents to diversify their portfolio and continue to 
outreach to socially disadvantaged farmers?
    Dr. Rainey. I do think that it is a pervasive issue. And 
sometimes I think it is just some of the economics of it 
because--so if I am an insurance agent and company and I am in 
a high intense row crop commercial area, if I got a portfolio 
full of large-scale, commercial, row-crop producers, I may not 
even take the time to learn about whole farm revenue, which is 
what our specialty crop--what some of our small growers would 
be interested in. So any way to enhance that training or 
understanding because at the end of the day, some of those 
agency companies will tell those farmers, oh, we don't offer 
that or they will try to send them to someone else. And some of 
it is just a profit motive. So as you explore that engagement, 
I think there is some education with the companies and agents 
on--to me, it is an entrepreneurship opportunity to diversify 
their staff to serve this need and really look at what is an 
economic benefit to those companies and those agents to serve 
those underserved areas if you will. I think that will be a 
first step is to really have a real discussion with the 
companies and agents about--or understanding on the areas that 
they are not serving because I think there is a lack of 
understanding of crops outside of their traditional audience 
that they have historically served.
    Mr. Lawson. Okay. Thank you. And I would just like to say 
my district is no stranger to the worsening and more frequent 
severe weather events and importance of ad hoc disaster 
assistance of our producers. The next question will be--this 
question is for all the panel. As we enter into the negotiation 
of the farm bill, should Congress consider a permanent disaster 
program? How do you believe a permanent system could build upon 
existing Title I and Title XI programs? And this is for the 
panel.
    Dr. Outlaw. I will take the first shot. Thank you. In 
general, the crop insurance industry and the products that are 
available are sufficient. What we have found over time is that 
natural disasters don't worry about what policy you bought. And 
so it has been a case where there has been added help provided 
to cover a portion of the deductible area.
    It is certainly within logical thinking to think that if we 
have done this 5 years in a row, likely, we are going to 
continue to do this. There are going to be natural disasters. 
And it would be helpful if there was a plan in place or a set 
of rules in place of exactly how it was going to work so that 
producers would understand what kind of help they might get if 
this happened and not leave it to chance or whether you get 
something passed.
    Mr. Lawson. Anyone else like to respond?
    Dr. Janzen. The issue in developing a standing disaster 
assistance program is always how to define what constitutes a 
disaster and when will the government step in and when will 
they not. And that is why these programs have been ad hoc. And 
the crop insurance program does a good job of defining the 
types of losses that will be covered. And so a standing 
disaster assistance program looks a lot like insurance but 
covering the things that we didn't know about the future.
    Mr. Lawson. I tell you what, I reclaim my time, Dr. Outlaw, 
you mentioned in your written testimony that producers should 
not be forced to choose between Agriculture Risk Coverage and 
Price Loss Coverage, but the farmer should receive benefits 
from whichever is higher in a given year. Could you comment on 
that for me please, sir?
    Dr. Outlaw. Yes, sir. In the 2014 Farm Bill, that decision 
was a one time for the life of the farm bill decision. And it 
really stressed producers out trying to make that decision for 
the next 5 years, much less what is going to happen this year. 
The 2018 Farm Bill changed that and made it an annual decision 
after the first 2 years. And producers would have to decide on 
an annual basis which of those two products they wanted to go 
to. All I am saying is take the decision away from them and 
allow them--if there is a benefit to be had, allow to have the 
higher of the two. A lot of times they are both going to be 
negative or, I mean, not negative but zero. But they are good 
at farming, and they don't want to make this decision. And 
really, it puts a lot of undue stress on them. Just give them 
whichever would be higher, and it can be scored that way.
    Mr. Lawson. Okay, my time has run out. Madam Chair, I yield 
back.
    The Chair. Thank you, Mr. Lawson. I now recognize the 
gentleman from Arkansas, Mr. Crawford.
    Mr. Crawford. Thank you, Madam Chair.
    Dr. Outlaw, you may recall, not long ago, back in March, we 
had this conversation about the state of the rice industry. 
And, as the Representative of the largest rice-producing 
district in the nation and largest rice-producing state in the 
nation, obviously, I have some concerns about that. It should 
be talked about here, the farm safety net, particularly PLC, 
isn't working well for rice producers under the current 
circumstances. And obviously--and we have talked about this. We 
know we need to enhance that in the next farm bill.
    But, you also mentioned during that hearing, you said the 
rice industry was not doing well. The rice farmers are not 
seeing the increases in prices as other commodities are but 
experiencing the same pressure with regard to input costs. I 
have done a little bit of math just since we have been sitting 
here, and I am not a mathematician, but based on the 
conventional enterprise budget in Arkansas cost per acre, 
roughly $554 per acre, of that, 48 percent is fertilizer costs. 
I mean, just fertilizer cost accounts for almost \1/2\ of that 
enterprise budget. Average yield, 169 bushels an acre. You are 
a heck of a lot better at this than me, but those numbers look 
like they don't really pencil out well. You were working on a 
study for Senator Boozman as well as Congresswoman Letlow. Can 
you give me an update on that and how those numbers are shaking 
out if it has gotten worse?
    Dr. Outlaw. Yes, sir. The testimony today included the 
analysis of the request from Senator Boozman, and it showed 
that the only farms we have that really aren't going to cash 
flow this year are rice farms. And \2/3\ of them will not cash 
flow. So we have 15, so you can do the math. That is 10 out of 
15 will not cash flow. Certainly for other industries that 
prices have risen and it is it isn't a big concern. But for 
this industry in particular, there are a lot of reasons for 
that, which I would call trade distortions from other 
countries. There are a lot of reasons why rice is different. 
But certainly, I would think that there would be cause for this 
body and the larger body to do something for rice starting this 
year.
    Mr. Crawford. And what would you suggest? Because, we can 
spitball about ideas to help, crop-specific. Rice is one of 
those that is kind of a staple item outside of the United 
States. So we rely on--we look to foreign markets to move our 
rice. In fact, we are not one of the biggest rice-producing 
nations in the world, yet we are in the top five in exports. Is 
that not true?
    Dr. Outlaw. Yes.
    Mr. Crawford. So what do we do to enhance that? I mean, 
should we put a little more emphasis in our trade relationships 
with regard to rice? I know it is a sensitive area, 
particularly in Asia. But I mean, what would you suggest? And, 
in the absence of--I mean, we are not going to reauthorize the 
farm bill today, but what could we do?
    Dr. Outlaw. Well, certainly, holding other countries 
accountable to what they have agreed to do, and trade 
negotiations is number one. And I think there are a couple in 
particular we could talk about. But short of that, I would say 
that, hopefully, there would be a situation with some bill that 
was going to move this year that you could increase, add some 
assistance targeted towards rice producers. I don't usually say 
those types of things, but this is completely different than 
for every other crop. And unless we want to lose producers, 
which basically rice has got a different infrastructure, we are 
going to lose that infrastructure. And unless we want to worry 
about doing that, then we need to provide some help relatively 
soon.
    Mr. Crawford. Relatively soon, and what type of help would 
we be talking about? Now we mentioned in our last visit in this 
room, we talked about the potential for indexing production 
costs. When the farm bill in 2014 was implemented, we were 
basing that on 2012 figures, so we were already 2 years behind, 
but we made the mistake of not indexing those production costs. 
So now bringing that into 2020, you have seen a huge disparity 
in cost of production in the last several years. Is that an 
appropriate response?
    Dr. Outlaw. Yes, I think so. And obviously, as was stated 
earlier, we have spent a lot of money on CFAP and MFP for 
losses that were likely to happen that didn't actually 
materialize completely that we thought, and I am telling you, 
these losses are going to happen. And so, specifically, the 
mechanism to do it, I think that you could use some of the 
formulas from CFAP in particular and adjust them and get some 
money to the producers.
    Mr. Crawford. Thank you. I have run out of time, but I 
appreciate your input. Thank you.
    The Chair. Thank you, Mr. Crawford.
    I now recognize the gentleman from Georgia, Mr. Allen, for 
5 minutes.
    Mr. Allen. Thank you, and I appreciate this hearing today. 
Obviously, it is timely because I had the folks with Farm 
Bureau in my office yesterday, livestock folks, and now we have 
a shortage of hay because of the drought. And so I don't know. 
Every time we turn around, we have another emergency. But, 
Chair Bustos and Ranking Member Scott, I thank you for holding 
this important hearing and to talk about these threats, 
particularly to our food supply.
    As we come closer to the time when Congress will write a 
new farm bill, it is important that we hear from all of you on 
how these programs are working for our farmers and what 
improvements need to be made. I believe that our main approach 
to writing new farm bills should be a cautious one. The years 
since 2018, when the most recent farm bill was signed into law, 
have been so chaotic and unprecedented, not only from the 
overall economic picture in this country, for example, the war 
on fossil fuel, and now it appears there is a war on 
agriculture, we shouldn't make major changes to Title I and 
Title XI programs unless we are able to fully evaluate the 
potential consequences of those changes.
    Before turning to questions, I will make one final comment. 
Though commodity prices are higher right now, input prices are 
rising at an even faster rate. And of course, we have heard 
that in your testimony. If my farmers have no way of protecting 
their margins, we could have another 1982 here, which was the 
last time that we had unprecedented inflation and a lot of 
guesswork on how--so many surprises out there. And coming from 
the business community, surprises are a real problem.
    Dr. Outlaw, again, I thank you for your testimony. It is 
particularly timely when I am hearing from all my farmers about 
the rising input of prices right now. Can you talk more about 
how we might better protect farmers and deal with all of these 
changes? Now, obviously, the war in Ukraine, we can all say, 
``Gosh, I wish we would have done more to prevent that because 
now we are seeing the repercussions of it.'' And, frankly, I 
don't know why the world's sitting around allowing one country 
to cause famine throughout the world. I mean, there ought to be 
repercussions for that. But at any rate, have you looked at any 
options as to what we can do with the present situation?
    Dr. Outlaw. Well, yes, sir. Our group has looked--over 
time, we have been asked by various Members of Congress to look 
at indexing up the reference prices to more closely account the 
cost changes that their producers are dealing with. And so we 
have done that a lot of different times, and it is difficult to 
do. And it is difficult to do in real time because most of the 
official data we get from USDA has lagged and things like that. 
But certainly, it is worth looking at, again, specifically in 
this environment. It has been brought up a couple of times 
about margin protection for crop producers. That would include 
both the price side and the cost side. While it is complicated, 
as is anything we do, anything worth doing. The protection 
measures that we use are going to matter a lot as we go 
forward, so just because it is complicated or hard to do 
doesn't mean we shouldn't look at it.
    Mr. Allen. Well, from my economic experience, supply and 
demand is what guides everything. We know because of events 
around the world, demand is going up. And of course, I think 
the world is going to be looking at the United States to put 
forth every effort to make sure people aren't starving to 
death. That is going to require farmers for bigger yields, 
borrow more money and farm more acres. And so as far as demand, 
have you made any projections on what this thing could look 
like?
    Dr. Outlaw. In particular, our group works with FAPRI out 
of the University of Missouri to do that side of the national 
and international price projections. But having done all this 
for 30+ years, like Joe said earlier, these prices are going to 
come down. We can't anticipate what is going to happen with the 
war stuff. That is the only reason why I would be sitting here 
saying I have no idea.
    Mr. Allen. So how are prices going down if demand is 
exceeding supply?
    Dr. Outlaw. One of the things that will happen was--well, 
we had higher prices before Ukraine, and the reason why was 
because we had droughts around the world and other problems. So 
those are going to get satisfied a little bit, and then Ukraine 
won't be quite as big a problem, I think.
    Mr. Allen. Right. Okay. As far as a lack of agronomic 
inputs, a lot of my farmers have signed on to a petition 
dealing with that, and I am about to run out of time, but the 
2022 MPCI policy, could you comment on that proposal?
    Dr. Outlaw. I am not sure I heard what you said.
    Mr. Allen. Farmers in my district have signed on to a 
petition which requests that a lack of agronomic inputs be 
included as covered peril under the 2022 MPCI policy. Can you 
comment on that?
    Dr. Outlaw. I would say that----
    [The information referred to is located on p. 1015.]
    The Chair. Why don't we give you time to answer that later? 
The time has expired by more than a minute, so I am going to go 
ahead and move on.
    Mr. Allen. Okay. Well, I am sorry.
    The Chair. Thank you, Mr. Allen.
    I now would like to recognize Mr. Mann from the State of 
Kansas, for 5 minutes.
    Mr. Mann. Great. Thank you, Madam Chair, for letting me ask 
questions, and thank you for hosting this hearing.
    President Eisenhower was from Kansas, grew up in my 
district, and he used to say that: ``Farming looks mighty easy 
when your plow is a pencil and you are a thousand miles from 
the corn field.'' And there is a lot of lot of truth in that.
    I think we are having a lot of conversations about the 
input side, which is what we need to be talking about, the 
biggest issue facing the First District of Kansas today and 
moving forward. I think we have to acknowledge that to a large 
degree this is self-inflicted. I mean, this irrational war on 
fossil fuel is the basic reason we have seen these input prices 
increase. It is also self-inflicted because this war against 
our chemicals and how modern agriculture works, this just makes 
no sense, the policies that we are pursuing, so that happens. 
And then things come along that may or may not be within our 
control like Ukraine that just exacerbates the problem. So I 
think we have to acknowledge that.
    We all know this crop insurance is absolutely vital. And it 
does two things: It benefits farmers, but it also benefits 
Americans because we have never had to rely on another country 
for our food supply. We get that wrong, the whole world looks 
entirely different. Certainly, our country looks different.
    And I know we have talked a little bit of this, but for you 
specifically, Dr. Outlaw, given the ability to make some 
changes to crop insurance this year--and I think we need to use 
a scalpel and not a sledgehammer--but what specific changes 
would you make, would you advise that we consider making to the 
crop insurance program in this next farm bill?
    Dr. Outlaw. Really, I don't have very many changes other 
than there is a situation right now with the basically the 
ethanol situation, USDA capped the A&O for agents, and that has 
caused a problem with providing insurance policies to the 
specialty crops. And that to me is one of those things--I am 
not an expert on it, but I have been reading about it, and it 
is one of those things that needs to be adjusted sooner rather 
than later.
    In terms of the rest of the crop insurance products, 
obviously, we have a really good system in place where new 
policies can be developed and the government helps policies be 
developed and paying for the costs, which will make it more 
likely. So I really can't say that there is anything else that 
really needs to be looked into for crop insurance other than 
that A&O issue that, again, I am not an expert on but I know it 
is out there.
    Mr. Mann. Okay. Based on recent drought monitoring indexes 
in Kansas, and we have some areas that are 10" to 15" behind 
annual rainfall this year, so in areas of the country, 
certainly severe drought, which is leading to less forage, less 
hay, less ability for our livestock producers who also are 
facing record inputs. A question for you, Dr. Rainey, can you 
speak more to the value of the current risk management products 
available to our livestock producers?
    Dr. Rainey. I think that they have been enhanced recently. 
I still think that there is--as farmers learn of these 
products, I think there are opportunities for technical 
assistance to help enhance the understanding in how to use 
those products more effectively. I think if you are going back 
to what you were talking about in general crop insurance, I 
think that the metric is protection to the farmers and 
ranchers. And as we look--and sometimes we can look and see 
where their product is being used or not and actually just do 
some follow up to get some feedback on why products aren't 
being used. And sometimes that is the indicator of that lack of 
understanding or additional work being needed to change some of 
the parameters of the program.
    Mr. Mann. Great.
    Dr. Rainey. And so I think that especially I have heard a 
lot of success stories from a lot of our livestock farmers in 
terms of the forage, in terms of drought products that have 
been advanced that are really helpful as we see this enhanced 
issues with climate variability.
    Mr. Mann. Yes, thank you. Last, I will just say, while we 
are discussing these tools available to farmers and ranchers 
across the country, I think we also have to take a moment to 
discuss the impact of some of the Administration's proposed 
changes to the Tax Code. Specifically, President Biden's most 
recent budget once again included eliminating the stepped-up 
basis and also includes imposing capital gains taxes on farms, 
ranchers, and businesses that have been held in a family for 
over 90 years or more. I am calling this the farm killer tax 
because it would destroy the livelihood of producers across the 
country.
    Dr. Outlaw, my last question would be to you. Have you 
examined what the impact of changes to the Tax Code would have 
on farms and ranches? And can you expand on what an elimination 
of a stepped-up basis or the new farm killer tax would mean for 
farm country?
    Dr. Outlaw. Yes, so we actually did a study at the request 
of Ranking Member Thompson and Senator Boozman last year that, 
across all of our 94 farms, 98 percent of them would be 
affected by the elimination of stepped-up basis at an average 
cost of $750,000 extra in tax.
    Mr. Mann. Yes, once again, in my view stepped-up--or this 
would be self-inflicted nonsense, and we got to make sure we 
don't let that happen to our ag producers.
    So thank you. With that, I yield back.
    The Chair. Thank you, Mr. Mann.
    I now recognize Mr. Rouzer from the State of North Carolina 
for the next 5 minutes.
    Mr. Rouzer. Thank you, Madam Chair. And I appreciate our 
witnesses being here today very much.
    Energy and food are both critical to our national security, 
and not just that, everybody's survival, basic survival. I 
certainly don't mean to be pessimistic, but I think the next 
several years are going to be pretty challenging. I don't see 
inflation going anywhere for the next several years. Interest 
rates are going to be a lot higher. Much higher input costs are 
going to be with us for some time.
    And a subject I want to explore a little bit that really 
hasn't been discussed today in terms of the direct payment that 
was put in place in the 2002 Farm Bill for our program crops. 
If you look at that period of time, 2002 to 2014, of course, 
not all things are comparing apples to apples necessarily; but, 
we didn't have as much ad hoc assistance. Again, not all things 
are equal, but I do think that is notable. What are the pros 
and cons to reinstituting that? One of the nice things about it 
was it was WTO-compliant, it was simple, it was easy. When we 
did have ad hoc disaster assistance payments, it was easy to 
piggyback on. Again, everything has its pros and cons. But I 
was just curious from the panel, if you can discuss your 
thoughts on that. And maybe now is a good time to reinstitute 
that, given the input costs that are going to continue to be 
exceptionally high. And it is simple. It is easy as compared to 
some of these other alternatives. Any thoughts on that? Dr. 
Outlaw, I will start with you.
    Dr. Outlaw. Okay. Sure. I have studied this my whole 
career, and really, there was nothing at all wrong. The 
producers liked the direct payments. There became a lot of 
different names for these payments, but they started off as PFC 
payments and that changed over time. But really what happened 
was that we had a good series of good years in agriculture and 
they were very hard to defend, giving payments to producers 
when they didn't need them. And so people were thinking about 
just going to a situation--and it was brought up a number of 
different times by different people on could a trigger be put 
in place so the fixed payment comes if things are needed and 
that doesn't happen if it doesn't trigger again? It makes it 
kind of a countercyclical payment, but at least it is a fixed 
amount and the producer would know what they were going to get. 
It has been like that a lot of different ways, but I will 
just--I don't want to take all the time. But in my opinion, the 
public opinion of giving producers money when things got good 
was what ended that program.
    Mr. Rouzer. Sure. Well, obviously, we are in a different 
environment now. So, the ground might be a little more fertile.
    Any other comment or thoughts?
    Dr. Janzen. I think it just speaks to the issue of 
targeting that I mentioned in my testimony, the idea that the 
demand for assistance tends to be greater at different times. 
And the demand from producers for assistance is stronger in 
certain times than others. And if you provide payments in times 
when that demand is low, that is not going to achieve the 
policy objectives that we want, which is to keep farmers going 
through those tough times.
    Mr. Rouzer. Any other comment from any other panelist?
    Mr. Craven. I guess, Congressman, in the material I 
presented, the ARC/PLC payments remained relatively flat 
through the last 5, 6 years. In fact, it is down in 2021. The 
direct payments wouldn't react to the kind of situation we have 
seen the last 3 or 4 years. And the ad hoc payments have 
certainly been the thing that have helped producers in this 
period. And I am not sure a direct payment would react quick 
enough.
    Mr. Rouzer. Okay. Any other thoughts? One quick last thing. 
There is one thing worse than high input costs, and that is no 
inputs. I am concerned about the availability of fertilizer as 
we move forward. Any thoughts on that or any insight that you 
all might be able to provide on that front? Any projections?
    Dr. Outlaw. If you read the press as much as the rest of us 
have to, you would feel a little bit encouraged that they are 
going to get the bottlenecks figured out. But certainly, the 
industry has a lot of questions that somebody needs to ask.
    Mr. Rouzer. My time has expired. I yield back. Thank you.
    The Chair. Thank you, Mr. Rouzer. I now would like to 
recognize Mr. Baird from Indiana, who is on with us virtually, 
for the next 5 minutes. Mr. Baird, your camera is off. Oh, it 
looks like maybe it is on now if you can----
    Mr. Baird. Thank you, Madam Chair. And I really appreciate 
this Committee. I appreciate this hearing. And I always learn 
something.
    So I was really just listening in to hear all the comments. 
And I think the farm bill is so important to the rural 
communities like my district in west central Indiana. So I 
really appreciate the expertise that you have with the 
Committee and the witnesses today. So thank you very much, and 
I will yield back.
    The Chair. All right. Thank you, Mr. Baird.
    So before we adjourn today, everybody has had a chance to 
ask questions, I would invite the Ranking Member to share any 
closing comments that he may have, Mr. Scott.
    Mr. Austin Scott of Georgia. Thank you, Madam Chair. And I 
want to thank the people who have testified before the 
Committee today. I mean, your input will be key to us as we 
write the next farm bill. About 90 percent of the ag production 
in this country comes from around 12 percent of the farms. And 
whether you are a big farmer or a small farmer, the dollars in 
and the dollars out have to yield to positive revenue or you 
are not going to be in business. And this is not about every 
individual farm inside the United States. It is about domestic 
agriculture production and making sure that Americans aren't 
dependent on foreign sources of food, and it has everything to 
do with our independence as a country. And working through the 
next farm bill and how we handle crop insurance and disaster 
payments is key to making sure that we are able to keep our 
domestic ag production afloat during these hard times.
    I want to thank you for coming. I want to thank the Chair 
for having the hearing. I think it has been a good hearing, and 
I look forward to continuing this discussion as we mark up the 
next farm bill.
    The Chair. Very good. Thank you, Mr. Scott. Mr. Thompson, 
as the Ranking Member of our full Committee, would you like to 
make any closing comments?
    Mr. Thompson. No, I know, votes are coming up here soon, so 
I just want to say thank you for your leadership and the 
Ranking Member's leadership on this incredibly important work. 
Farming, as I said before, agriculture is a business. And at 
the end of the day, it is a margin. And these are some 
challenging times based on the testimony we have heard and the 
things that we are hearing at home, too. And it is just great 
to have these four economists as a part of our farm team to be 
able to lean on and to get your input. And we will continue to 
lean on all four of you, so thank you so much for being here 
and participating today.
    The Chair. Thank you, Mr. Thompson. And I want to thank our 
Members for participating today and also our witnesses. We are 
grateful to you. You shed some light on what is going on out in 
the countryside, and that is very helpful to us as we gear up 
to figure out what is going to go into the 2023 Farm Bill, so 
we are really grateful to you for your time.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions posed by a Member. This hearing 
the Subcommittee on General Farm Commodities and Risk 
Management is adjourned.
    [Whereupon, at 10:31 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
Submitted Articles by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
                               Article 1


[https://www.wsj.com/articles/farmers-feel-the-squeeze-of-inflation-
11644921180]
Farmers Feel the Squeeze of Inflation
          Higher costs for seeds, fertilizer, weedkillers and labor 
        could push up grocery bills this year, researchers say
        
        
          Even as crop prices remain high, supply costs are expected to 
        outpace the price of agricultural goods in 2022.

By Patrick Thomas \1\
---------------------------------------------------------------------------
    \1\ https://www.wsj.com/news/author/patrick-thomas.

Photos by Veasey Conway for The Wall Street Journal Feb. 15, 2022 5:33 
---------------------------------------------------------------------------
a.m. ET

    Inflation is growing on the farm.
    American farmers are paying significantly higher prices for their 
weed-killing chemicals, crop seeds, fertilizer, equipment repairs and 
seasonal labor, eroding some of 2021's windfall \2\ from rising crop 
prices. Higher farm costs \3\ could help push up grocery bills further 
in 2022, analysts say, following a year in which global food prices 
rose \4\ to decade highs.
---------------------------------------------------------------------------
    \2\ https://www.wsj.com/articles/surging-grain-prices-fuel-
surprise-farm-recovery-11611322634.
    \3\ https://www.wsj.com/articles/surging-fertilizer-costs-push-
farmers-to-shift-planting-plans-raise-prices-11639580768.
    \4\ https://www.wsj.com/articles/where-inflation-is-hitting-
hardest-prices-of-groceries-utilities-rent-jump-11644519819.


          Brooks Barnes, a second-generation farmer in Wilson County, 
        N.C., says he plans to reduce acres dedicated to fertilizer-
---------------------------------------------------------------------------
        intensive crops.

    ``I just don't see how I'm going to get paid this year,'' said 
Brooks Barnes, a second-generation farmer in Wilson County, N.C.
    Mr. Barnes said he spent more than he ever had to operate his farm 
last year. Higher commodity prices at the time covered most of those 
cost increases. Facing even higher prices now, he doesn't expect that 
to be the case for 2022.
    On his farm where he grows tobacco, corn, soybeans, wheat and sweet 
potatoes, Mr. Barnes in the spring of 2021 said he paid $16 a gallon 
for Bayer \5\ AG's Roundup, the world's most commonly used weedkiller, 
for his crops. By September he bought it for about $40 a gallon and in 
February, his Nutrien Ltd. retailer told him it was $60 a gallon, he 
said. One of the fertilizers he buys, 24s, cost him $500 a ton from 
$175 last spring, he said. Float bed plastic, which holds water for his 
tobacco plant trays to float on in his greenhouses, cost him $82 a 
roll, compared with $70 a year ago.
---------------------------------------------------------------------------
    \5\ https://www.wsj.com/market-data/quotes/BAYRY.
---------------------------------------------------------------------------
    ``I've always been excited to start a new crop but I'm not excited 
at all for this one,'' said Mr. Barnes, who has been farming full-time 
since 2004.
    Supply-chain constraints and staffing problems are leading to 
higher prices for products and supplies across a variety of industries, 
especially food. U.S. inflation hit its fastest pace in nearly 4 
decades \6\ last year. Food prices surged 7% in January, the sharpest 
rise since 1981, the Labor Department on Thursday said, as meat and egg 
prices continued to climb at double-digit rates.
---------------------------------------------------------------------------
    \6\ https://www.wsj.com/articles/us-inflation-consumer-price-index-
january-2022-11644452274.
---------------------------------------------------------------------------
    A rally in prices for agricultural commodities such as corn and 
soybeans, which kicked off in mid-2020, pushed up incomes for U.S. 
farmers and led them to spend more freely on farmland and machinery.\7\ 
In 2021, U.S. farms' net income was estimated to be about $117 billion, 
up 23% from 2020, according to the U.S. Department of Agriculture.
---------------------------------------------------------------------------
    \7\ https://www.wsj.com/articles/u-s-farm-belt-revival-prompts-mad-
dash-for-dirt-and-iron-11632657604.
---------------------------------------------------------------------------
    Even as crop prices remain high, supply costs are expected to 
outpace the price of agricultural goods in 2022, according to a January 
report from the Federal Reserve Board. Net income for farmers in Kansas 
is estimated to fall 65% from a year ago, according to a January study 
from Kansas State University.


          Source: WSJ analysis of Mr. Barnes's annual budget. Stephanie 
        Stamm/The Wall Street Journal.

    Growers' biggest expenses each year, including fertilizer and crop 
chemicals, such as glyphosate, used to kill weeds and other pests are 
soaring in price. Glyphosate, Roundup's active ingredient, is up about 
250% from what it was 12 months ago, said Dean Hendrickson, vice 
president of marketing and business development at CHS \8\ Inc., a farm 
cooperative and major retailer of seeds and chemicals.
---------------------------------------------------------------------------
    \8\ https://www.wsj.com/market-data/quotes/CHSCP.
---------------------------------------------------------------------------
    Bayer attributed the recent increases in glyphosate prices to a 
global shortage caused by weather events, energy restrictions, high 
demand for transportation and global supply-chain challenges, a 
spokeswoman said.
    ``We expect challenges to the global ag industry to remain in 2022 
and beyond,'' the company's spokeswoman said.


          Mr. Barnes says his goal is to break even this year.

    Bayer said Monday that a supplier of an ingredient for glyphosate 
ran into mechanical problems that may hamper production of the 
herbicide. The company said the supplier is on track to restore 
production, and Bayer said it expects any impact to be marginal in 
terms of its annual glyphosate production.


          The Federal Reserve has signaled it plans to raise interest 
        rates in 2022 in response to stubbornly high inflation. WSJ's 
        J.J. McCorvey explains what higher rates could mean for your 
        finances. Photo illustration: Todd Johnson.
          Editor's note: the video is retained in Committee file.

    Seed prices are also up. Crop-seed and pesticide supplier Corteva 
\9\ Inc. said prices that it charges farmers for seeds rose 10% in its 
most recent quarter and its crop-protection products were up 6% 
compared with the prior year to offset inflation. ``We've demonstrated 
that we can move prices to cover costs and grow margins,'' said CEO 
Chuck Magro.
---------------------------------------------------------------------------
    \9\ https://www.wsj.com/market-data/quotes/CTVA.
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    The price of anhydrous ammonia fertilizer is up more than 200% from 
a year ago at $1,492 per ton, an all-time high, according to 
agricultural research firm DTN. Fertilizer price increases partly stem 
from elevated natural-gas prices, a key ingredient for nitrogen-based 
fertilizers, as well as severe storms in the U.S. that disrupted 
production plants earlier this year. Major fertilizer producers 
including China, Turkey, Egypt and Russia also curbed exports in the 
second half of 2021, further pushing up global prices, analysts and 
retailers said.
    Some farmers also blame fertilizer companies for the rising prices. 
A recent study from Texas A&M, commissioned by state corn growers 
associations, suggested that fertilizer costs tend to go up when corn 
revenues increase, even after accounting for natural-gas prices and 
higher demand.


          Boxes of sweet potatoes are moved inside a climate-controlled 
        barn on Mr. Barnes's farm in Lucama, N.C.

    ``Our cost to buy products from our suppliers went up and therefore 
our prices for customers have increased,'' said Jeff Tarsi, head of 
global retail operations at Nutrien, a major fertilizer supplier.
    The potential for higher farming costs to cut into production of 
corn and other crops could fuel continued food-price inflation, 
analysts said. Higher corn and soybean prices, for example, raise the 
cost of animal feed for meat companies, which pass along the increase 
to consumers.\10\
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    \10\ https://www.wsj.com/articles/tyson-posts-higher-quarterly-
profit-on-price-increases-strong-demand-11644241426.
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    ``I don't think there is any reprieve for food prices to come 
down,'' said Kevin McNew, chief economist for the Farmers Business 
Network, an online marketplace for agricultural supplies. ``It's not 
just a logistics issue, or supply-chain issue to grocery stores, it's 
deeper rooted than that.''
    Because of the higher costs, Mr. Barnes said he is holding back on 
many of the purchases he had hoped to make this year, including a new 
combine. He put his annual hunting trip to Saskatchewan, Canada, on 
hold this year, for fear his budget might be too tight.
    Like many other U.S. farmers, Mr. Barnes also plans to adjust this 
year by reducing acres dedicated to fertilizer-intensive crops, and 
planting more soybeans and wheat, which tend to require less nutrients. 
Planted U.S. acreage of soybeans this year is projected to be up about 
6% from last year and exceed corn for the third time in history, 
according to Farm Progress, a division of research firm Informa.\11\ 
The only other times were in 1983 and 2018.
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    \11\ https://www.wsj.com/market-data/quotes/UK/XLON/INF.
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    ``My goal for the year is just to break even,'' Mr. Barnes said.
    
    
          Greenhouses on Mr. Barnes's farm.
Corrections & Amplifications
    If planted soybean acreage in the U.S. were to exceed corn this 
year, it would mark only the third time for that to happen, the prior 
years being 2018 and 1983. An earlier version of this article, failing 
to cite 1983, incorrectly said it would be the second time and that the 
only other time was 2018. (Corrected on Feb. 16.)

          Appeared in the February 16, 2022, print edition as 
        `Inflation Hits Farmers, Stalks Food Costs'.
                               Article 2


[https://www.wsj.com/articles/farms-are-failing-as-fertilizer-prices-
drive-up-cost-of-food-11642770182]
`Farms Are Failing' as Fertilizer Prices Drive Up Cost of Food
          Farmers in the developing world say they are curtailing 
        production, which means global hunger could worsen
        
        
          Fertilizer prices and shortages are hurting farmers; 
        phosphate fertilizer being moved at a warehouse in Russia last 
        month. Andrey Rudakov/Bloomberg News.

By Jon Emont,\1\ in Singapore and Jenny Carolina Gonzalez in Bogota, 
Colombia
---------------------------------------------------------------------------
    \1\ https://www.wsj.com/news/author/jon-emont.

    From South America's avocado, corn and coffee farms to Southeast 
Asia's plantations of coconuts and oil palms, high fertilizer prices 
are weighing on farmers across the developing world, making it much 
costlier to cultivate and forcing many to cut back on production.
    That means grocery bills could go up even more in 2022, following a 
year in which global food prices rose to decade highs.\2\ An uptick 
would exacerbate hunger--already acute in some parts of the world 
because of pandemic-linked job losses--and thwart efforts by 
politicians and central bankers to subdue inflation.\3\
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    \2\ https://www.wsj.com/articles/global-food-prices-surge-as-
inflation-spreads-11636119367.
    \3\ https://www.wsj.com/articles/central-banks-around-the-world-
raise-rates-as-fed-prepares-move-11639750006.
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    ``Farms are failing and many people are not growing,'' said 61 year 
old Rodrigo Fierro, who produces avocados, tangerines and oranges on 
his 10 acre farm in central Colombia. He has seen fertilizer prices 
double in recent months, he said.


          A coffee plantation in Brazil earlier this month. Photo: 
        Jonne Roriz/Bloomberg News.
        
        
          A woman harvesting in a field in Ivory Coast. Fertilizer 
        demand in sub-Saharan Africa could fall 30% this year, which 
        nonprofit International Fertilizer Development Center says 
        would translate to a loss in food production equivalent to the 
        needs of 100 million people. Photo: Legnan Koula/Shutterstock.

    Christina Ribeiro do Valle, who comes from a long line of coffee 
growers in Brazil, is this year paying three times what she paid last 
year for the fertilizer she needs. Coupled with a recent drought that 
hit her crop hard, it means Ms. do Valle, 75, will produce a fraction 
of her Ribeiro do Valle brand of coffee, some of which is exported.
    There is also a shortage of fertilizer. ``This year, you pay, then 
put your name on a waiting list, and the supplier delivers it when he 
has it,'' she said.
    The coffee beans won't develop as they should for lack of 
fertilizer, she said--not just this year but also in 2023. ``It's like 
a child that's malnourished,'' she said.
    Farmers in the U.S. are also feeling the pinch,\4\ with some 
shifting their planting plans. But the impact is expected to be worse 
in developing countries where smallholders have limited access to bank 
loans and can't pay up front for expensive fertilizer.
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    \4\ https://www.wsj.com/articles/surging-fertilizer-costs-push-
farmers-to-shift-planting-plans-raise-prices-11639580768.
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    Fertilizer demand in sub-Saharan Africa could fall 30% in 2022, 
according to the International Fertilizer Development Center, a global 
nonprofit organization. That would translate to 30 million metric tons 
less food produced, which the center says is equivalent to the food 
needs of 100 million people.


          A child holding a plate of food at a subsidized food center 
        in India this month. Photo: Pradeep Gaur/Zuma Press.
        
        
          Global food prices rose to decade highs last year. A customer 
        shopping at a London supermarket earlier this month. Photo: 
        Daniel Leal/Agence France-Presse/Getty Images.

    ``Lower fertilizer use will inevitably weigh on food production and 
quality, affecting food availability, rural incomes and the livelihoods 
of the poor,'' said Josef Schmidhuber, deputy director of the United 
Nations Food and Agriculture Organization's trade and markets division.
    As the pandemic enters year 3, more households are having to cut 
down on the quantity and quality of food they consume, the World Bank 
said in a note last month, noting that high fertilizer prices were 
adding to costs. Around 2.4 billion people lacked access to adequate 
food in 2020, up 320 million from the year before, it said. Inflation 
rose in about 80% of emerging-market economies last year, with roughly 
a third seeing double-digit food inflation, according to the World 
Bank.
    Diammonium phosphate, or DAP, a commonly used phosphate fertilizer, 
cost $745 per metric ton in December--more than double its 2020 average 
price. December prices for Eastern European urea, a widely exported 
nitrogen fertilizer, were nearly four times the 2020 average.
    The price-increases stem partly from global energy costs, with the 
average natural-gas price in Europe for the October-December quarter 
ten times as much as that for the year of 2020, according to World Bank 
data. Nitrogen production facilities rely heavily on natural gas to 
convert chemical raw materials into finished products, so rises in the 
natural-gas price often flow through into fertilizer costs. Major 
fertilizer producers including China, Turkey, Egypt and Russia also 
curbed exports in the second half of 2021, further pushing up global 
prices.
    A more recent factor is European Union and U.S. sanctions on 
Belarus, a major exporter of potash, which is a key ingredient of 
mineral fertilizers. Norway-based Yara International ASA,\5\ one of the 
world's largest fertilizer makers, said this month it would wind down 
its sourcing of Belarusian potash by April.
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    \5\ https://www.wsj.com/market-data/quotes/YARIY.
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    ``Belarus represents 20% of the global production of potash so 
clearly they are a significant supplier,'' said Chief Executive Svein 
Tore Holsether in an interview. ``If that part doesn't make it out of 
Belarus then I don't see anyone ready to turn up the volumes,'' he 
said.


          The trucking industry has long been dealing with a shortage 
        of drivers and high job turnover, but supply-chain bottlenecks 
        have underscored the need for new recruits. Here's how some 
        companies are trying to get them behind the wheel. Photo: Robyn 
        Beck/AFP via Getty Images (Originally published in November).
          Editor's note: video retained in Committee file.

    Tony Will, chief executive of CF Industries Holdings Inc., a 
leading nitrogen fertilizer manufacturer based in Deerfield, Ill., said 
he expected lower fertilization levels this year to result in reduced 
agricultural yields. The company has only reopened one of the two UK 
plants it closed in September, citing high natural-gas prices and low 
availability of truck drivers. Plants in North America, where gas 
prices are lower, are running at maximum capacity, Mr. Will said.
    Industry experts say European production is likely to be 
constrained as long as natural-gas prices remain high there, with 
shortages in parts of the developing world amplified by trade 
restrictions in other major fertilizer exporters.
    On Indonesia's Sumatra island, coconut grower Burhanuddin Rafik is 
seeking out alternatives to fertilizer. He says farmers in his area 
have resorted to using monosodium glutamate, or MSG, a flavor enhancer 
that contains high levels of nitrogen and is used in local dishes. He 
and others are also trying organic methods, like spreading ash and 
plant debris on their crops.

          ``When I tell them the price of seeds is $3 per kilogram, 
        they start to cry.''
  Faustin Lohouri Bi Tra, who grows corn, rice and soy seeds for other 
                                                 farmers in Ivory Coast

    Faustin Lohouri Bi Tra, who grows corn, rice and soy seeds for 
other farmers on a 500 acre plantation in Ivory Coast, said if 
fertilizer prices remain high into April, he might have to slash his 
own planting by half or more. He can only raise prices so much before 
his seeds become too expensive for local farmers. ``When I tell them 
the price of seeds is $3 per kilogram, they start to cry,'' he said.
    In an oven-hot, largely flat corner of southern Colombia, Marcos 
Baquero, 48, said high fertilizer costs were prompting him to try to 
figure out how to coax a bigger yield from his small farm.
    ``Farmers need to produce 50% more than they produced before,'' 
said Mr. Baquero, though he said he believed that many would simply 
give up on farming.
    While he usually gets 35 tons of watermelon a hectare, he now wants 
to see if he can produce 40 tons. As for corn, he would like to 
increase the yield from the 6 tons to 10 tons he now produces to as 
much as 20 tons a hectare.
    ``This is very painful for us farmers,'' he said, ``and it's 
getting very difficult to work.''


          A worker using a motorized harvesting sickle to cut a fruit 
        bunch from an oil palm at a plantation in Malaysia earlier this 
        month. Photo: Samsul Said/Bloomberg News.

          Jeffrey T. Lewis in Sao Paulo contributed to this article.
                               Article 3


[https://www.wsj.com/articles/poor-planting-weather-puts-squeeze-on-u-
s-farmers-11652290167]
Farmers Are Racing Against Poor Weather to Plant Crops
          Delays in getting crops started could cut into harvests amid 
        already high grain prices
        
        
          A farmer at work last month in Heyworth, Ill. The planting of 
        corn, soybeans and wheat are well behind their usual pace. 
        Photo: Alan Look/Zuma Press.

By Patrick Thomas,\1\ and Kirk Maltais \2\
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    \1\ https://www.wsj.com/news/author/patrick-thomas.
    \2\ https://www.wsj.com/news/author/kirk-maltais.

---------------------------------------------------------------------------
May 11, 2022 1:29 p.m. ET

    Farmers are in a race against the clock to get their crops in the 
ground this week, with planting of corn, soybeans and wheat well behind 
their usual pace.
    Wet and cool temperatures in key parts of the Midwest have delayed 
farmers' planting plans, leaving them days to get crops in the ground 
before they start to lose out on a bigger harvest. If they don't, some 
grain traders say that already high prices for agricultural commodities 
could rise even more, with supplies thinning as farmers world-wide 
grapple with tough weather.
    On Monday, the U.S. Department of Agriculture said 22% of corn was 
planted, compared with 50% for the previous 5 year average. For 
soybeans, 12% was planted, compared with the previous 5 year average of 
24%, and 27% of spring wheat was in the ground compared with a typical 
47%, according to the USDA.
    For corn the situation is particularly tenuous because corn planted 
after this week runs an increased risk of yielding less, agronomists 
say. With global grain markets already tight due to poor weather in key 
growing areas \3\ and Russia's war in Ukraine, further disruptions to 
U.S. crops could push crop prices beyond current near-record levels,\4\ 
they said.
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    \3\ https://www.wsj.com/articles/ukraine-war-wheat-shortfalls-high-
prices-11651503940.
    \4\ https://www.wsj.com/articles/corn-and-soybeans-near-record-
prices-push-food-costs-higher-11651092056.
---------------------------------------------------------------------------
    Jeff Ryan, a corn and soybean farmer in Cresco, Iowa, said under 
10% of his crop is planted, and more rain Monday night further delayed 
his progress. In a typical year, he said, he finishes planting by May 
10, but windy and overcast weather conditions this spring have left his 
soil too wet. With rain expected later this week, Mr. Ryan said he 
expects his yields to fall by between 10% and 20% if the weather 
doesn't improve.
    ``It's not looking real promising,'' Mr. Ryan said, adding that it 
will take him about 10 days to plant. ``It all depends on the weather. 
If it's just rainy enough and overcast, there's not much you can do.''
    Corn crops usually produce less grain when planted in middle to 
late May, said Jeffrey Coulter, a University of Minnesota Extension 
corn agronomist, who advises regional farmers. When corn is planted 
after May 12, yields start to slip, but can stay high until around May 
20, he said.
    Some corn-producing states--such as Illinois, Indiana, Minnesota 
and North Dakota--have seen above-average precipitation over the past 3 
months, according to data from the U.S. National Oceanic and 
Atmospheric Administration. Wet soils in Corn Belt states have 
prevented farmers from getting their machinery into their fields.
    Sean Elliot, a sixth-generation farmer in Iroquois County, Ill., 
planted his crop until midnight on Monday and got back out to the 
fields at 5:30 a.m. the next day to resume planting. Some of his land 
is still wet, but with more rain expected this weekend, Mr. Elliot said 
he is racing to get as much corn and soybean planted as he can this 
week. He has a drainage system installed that will help dry out his 
soil, but his neighbors that don't will probably lose out on some of 
their yields, he said.
    ``We're pushing as hard as we can,'' he said.
    Farmers faced a similar situation \5\ in 2019, when record rainfall 
delayed planting and many either planted diminished crops or made 
insurance claims for unplanted acres. Corn production declined by about 
5% that year, according to the USDA.
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    \5\ https://www.wsj.com/articles/farmers-on-drenched-land-confront-
tough-choice-on-planting-11559727000.
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    Further west, drought conditions are lingering in parts of major 
grain-producing states like Kansas and Nebraska, where dry soils make 
it difficult for farmers to successfully plant seeds.
    Over 68% of the winter-wheat crop in the U.S. is in a severe 
drought, while spring-wheat states are stuck with excessive moisture, 
said Chandler Goule, chief executive of the National Association of 
Wheat Growers. In Minnesota, one of the largest spring-wheat growing 
states, 2% of the spring wheat is planted compared with 93% last year.
    ``The lack of moisture in the winter wheat and excessive moisture 
in the spring will affect yields and quality if we don't see an 
immediate change in the weather,'' he said.
    Seed and pesticide maker Corteva \6\ Inc. said the planting delays 
cut into some of the company's first-quarter seed sales. While Corteva 
ships seeds to local sales representatives, it doesn't recognize 
revenue until after the seeds make it to the farmer. Challenging 
weather conditions that began at the end of March pushed back 
purchases, the company said.
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    \6\ https://www.wsj.com/market-data/quotes/CTVA.
---------------------------------------------------------------------------
    A tight crop supply globally has boosted grains prices. Year-to-
date, corn futures are up 31% while soybeans have risen 19% and wheat 
has increased nearly 42%. The USDA on Thursday is expected to release 
its monthly world supply-and-demand report. If the report shows demand 
for grains in the coming year rising as inventories and new U.S. 
production shrinks, futures may rise further, according to analysts
    Chuck Read, a fifth-generation farmer in Princeton, Ill., said he 
thinks he can get his 1,150 acres of corn and soybeans planted by the 
end of the week if the weather holds. ``It's important we have a good 
crop for food prices,'' he said. ``We need to have a good crop 
especially with what's happening in Ukraine.''

          Appeared in the May 12, 2022, print edition as `Poor Weather 
        Delays Midwest Crop Planting'.
                                 ______
                                 
 Submitted Report by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania


        Congressional Budget Office
        Baseline Projections
May 2022

    The Commodity Credit Corporation (CCC) accounts for a significant 
portion of mandatory Federal spending for agriculture through a wide 
range of programs shown in the general summary tables. CCC provides 
commodity price and income supports mainly through four programs:

   The Price Loss Coverage program makes payments to producers 
        when the annual average market price per unit of a covered 
        commodity falls below the reference price set in law. Beginning 
        with the 2019 crop year, the Price Loss Coverage program makes 
        payments when the annual average market price per unit of a 
        covered commodity falls below the effective reference price, as 
        defined in the 2018 Farm Bill (Public Law 115-334, the 
        Agriculture Improvement Act of 2018).

   The Agriculture Risk Coverage-County program makes payments 
        to producers when the actual average revenue for a crop (price 
        times production) within the producer's county falls below the 
        local guaranteed amount, which is based on an average for 
        recent years.

   The Marketing Loan program makes short-term loans to farmers 
        at specified commodity loan rates using current production as 
        collateral. Non-recourse loans may be repaid at less than 
        principle plus interest if the market price estimated by the 
        Department of Agriculture drops below the loan rate. The 
        commodity also may be forfeited to CCC in lieu of loan 
        repayment. Once a loan is repaid, producers are free to sell 
        their crops.

   The Dairy Support program makes payments to producers to 
        account for the difference between the monthly milk price and 
        the cost of feed. Participants may choose the size of the 
        margin they wish to cover and may be required to pay a premium 
        to the government for such protection.

    Participants in the Price Loss Coverage Program and in the 
Agriculture Risk Coverage program may receive payments from only one 
such program in any given year. The loan program is available to 
qualified producers in any year. The dairy supports program operates 
continuously.
Crop Insurance
    Through the Federal Crop Insurance Corporation, producers may 
purchase insurance against major losses in yield or revenues for their 
crops. On average, the Federal Government pays 60 percent of a 
producer's insurance premiums. The government also reimburses private-
sector insurance companies for administrative expenses and underwriting 
gains (a company's share of total gains and losses for insurance 
policies).
Conservation Programs
    The Federal Government has programs to encourage producers to take 
fragile land out of production or to make improvements that promote 
land conservation by preventing erosion or improving productivity, for 
example.
Disaster Assistance
    The Federal Government offers producers assistance when natural 
disasters reduce feed available for livestock, cause above-average 
death rates among livestock, or damage trees.
Commodity Background Tables
    Total costs of commodity programs are derived from estimates for 
individual eligible commodities. Critical factors used to estimate 
program costs depend on projections of the price, yield, and program 
acres for each commodity. Historically, prices for a given commodity 
have been related to, among other things, the ratio of ending stocks to 
total use. A relatively high ratio implies an excess supply, which 
usually is associated with a lower price. Estimating prices according 
to historical relationships helps to keep price projections consistent 
with other market variables.
    To help the agency consider changes to its baseline estimates, CBO 
convenes a meeting of agricultural economists each fall to discuss 
supply, demand, and price forecasts for major agricultural commodities 
like corn, soybeans, wheat, and cotton. In addition, crop insurance 
analysts are invited to review past performance of the crop insurance 
program and to discuss program changes. Attendees include economists 
from the Department of Agriculture's Office of the Chief Economist, 
World Agricultural Outlook Board, Economic Research Service, Farm 
Service Agency, Foreign Agricultural Service, and Risk Management 
Agency, as well as agricultural economists from various universities 
and private enterprises.
CBO's May 2022 Baseline for Farm Programs
Adjusted for Sequestration from FY 2021 to FY 2031

           Abbreviations Used in Farm Programs Baseline Tables
 
 
 
        ARC   Agriculture Risk Coverage
        AWP   Adjusted World Price
        CCC   Commodity Credit Corporation
         CO   County Coverage
 


     Abbreviations Used in Farm Programs Baseline Tables--Continued
 
 
 
        CRP   Conservation Reserve Program
          ELS Extra-Long Staple Cotton
       FCIC   Federal Crop Insurance Corporation
        FSI   Food, Seed, and Industrial
         FY   Fiscal Year
         IC   Individual Coverage
          MLG Marketing Loan Gain
       NRCS   Natural Resources Conservation Service
        OMB   Office of Management and Budget
          PLC Price Loss Coverage
       USDA   U.S. Department of Agriculture
 
Components may not sum to totals because of rounding.
In some cases, 2021 spending is indicated as estimated because actual
  spending by program component is incomplete.

Congressional Budget Office
May 2022

          On May 27, 2020, CBO reposted this table to correct a 
        typographical error on page 9.

                             List of Tables
 
 
 
Commodity Credit Corporation         Federal Crop Insurance Corporation
 Account Plus Other Accounts         CCC Conservation Programs (Summary)
 Comparable to the USDA Baseline     CCC Conservation Programs (Details)
 (Summary)
Commodity Credit Corporation         Sorghum Supply and Use
 Account Plus Other Accounts         Barley Supply and Use
 Comparable to the USDA Baseline     Oats Supply and Use
 (Details)
Program Payment Summary              Minor Feed Grain Program Outlays
Corn Supply and Use                  Sunflower Seed Supply and Use
Corn Program Outlays                 Canola Supply and Use
Soybean Supply and Use               Flaxseed Supply and Use
Soybean Program Outlays              Safflower Supply and Use
Wheat Supply and Use                 Mustard Seed Supply and Use
Wheat Program Outlays                Rapeseed (Inedible) Supply and Use
Upland Cotton Supply and Use         Minor Oilseed Program Outlays
Upland Cotton Program Outlays        ELS Cotton Supply and Use
Rice Supply and Use                  ELS Cotton Program Outlays
Rice Program Outlays                 Dry Field Pea Supply and Use
Peanut Supply and Use                Lentil Supply and Use
Peanut Program Outlays               Large Chickpea Supply and Use
Dairy Program                        Small Chickpea Supply and Use
Supplemental Agricultural Disaster   Pulse Crop Outlays
 Assistance Program
 


                                               Commodity Credit Corporation Account Plus Other Accounts Comparable to the USDA Baseline (Summary)
                                                                               Millions of Dollars, by Fiscal Year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual     Estimated                                                               Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Commodity Credit Corporation Price        9,515          5,099      4,229        3,612        5,251        7,664        9,339        9,964        9,137        7,617        7,090        7,189
 Support and Related Programs a
CCC Conservation Programs b               2,090          1,844      2,132        2,269        2,285        2,406        2,431        2,408        2,411        2,429        2,433        2,489
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  CCC Total c                            11,605          6,943      6,361        5,881        7,536       10,070       11,770       12,372       11,548       10,046        9,523        9,678
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
NRCS Conservation Programs d              3,190          3,187      3,238        3,174        3,413        3,532        3,661        3,680        3,682        3,672        3,674        3,797
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Conservation Program Total e            5,280          5,031      5,370        5,443        5,698        5,938        6,092        6,088        6,093        6,101        6,107        6,286
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
a This is the account for Commodity Credit Corporation price support programs in budget function 350 (agriculture). It includes those activities listed on the following page.
  It does not include conservation programs. CRP and several conservation programs were added to CCC in 1996, but remain under budget function 300 (natural resources and environment).
b These amounts reflect projected direct spending for conservation programs shown by OMB under the CCC account total.
c This total is consistent with categories included in USDA's CCC total for budget functions 350 and 300; includes some minor loan program accounts.
  The FY 2021 total does not reflect $3 billion in transfers from the CCC to other agencies.
d These amounts reflect projected direct spending for conservation programs shown by OMB under the NRCS account, reflecting program spending reauthorized by the 2018 Farm Bill.
e This total is the sum of CCC plus NRCS conservation direct spending.
Source: Congressional Budget Office.


                                               Commodity Credit Corporation Account Plus Other Accounts Comparable to the USDA Baseline (Details)
                                                                               Millions of Dollars, by Fiscal Year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Program                                   2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Feed Grains                               1,697             75         48           49        1,245        2,917        4,023        4,406        3,510        2,213        1,893        2,006
Wheat                                     1,790            880         22           15          115          623          847          854          898          821          799          878
Rice                                        385            274        204          159          371          430          462          473          514          495          475          458
Upland Cotton                             1,097            512        169          114          432          502          549          576          572          594          589          551
Soybeans                                    608              3          0            4           62          241          537          697          683          487          357          322
Peanuts                                     450            384        230          206          211          293          315          311          305          303          304          302
Sugar                                         0              0          0            2            6            9           14           24           26           34           39           57
Dairy                                       755            331        812          472          304          254          225          240          196          164          117          132
CCC Charter Act Authority a                 330            120      1,059        1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000
    Market Facilitation Program              33             10          9            0            0            0            0            0            0            0            0            0
    Seafood Trade Relief                    297             10         50            0            0            0            0            0            0            0            0            0
  Transfers to Agencies b                 3,000          1,000          0            0            0            0            0            0            0            0            0            0
    Higher Blends Infrastructure              0            100          0            0            0            0            0            0            0            0            0            0
     Incentives b
    Other Administrative CCC                  0            100      1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000
     Spending
Individual ARC                              318             25         17           25           38           55           73           91           94           78           65           62
Other Commodities                           152             64         44           56           84          112          126          133          115          113          123          112
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal                                7,582          2,667      2,604        2,103        3,869        6,437        8,172        8,805        7,912        6,301        5,760        5,880
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Disaster Payments (Crops and                646          1,907        845          813          793          781          789          789          789          789          789          789
 livestock) c
Export d                                    614            428        485          481          481          481          481          481          481          481          481          482
Other Noncommodity e                        522            382        370          300          300          300          300          300          300          300          300          300
Net Interest f                              134             12         99           64           53           60           87          115          130          129          113           99
Sequestration                                 0           ^297       ^176         ^150         ^246         ^396         ^492         ^527         ^476         ^384         ^354         ^362
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal                                1,933          2,432      1,624        1,509        1,382        1,227        1,166        1,159        1,225        1,316        1,330        1,309
                                     ===========================================================================================================================================================
    Total Outlays                         9,515          5,099      4,229        3,612        5,251        7,664        9,339        9,964        9,137        7,617        7,090        7,189
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Outlay estimates are based on market conditions through April 8, 2022, and exclude CCC conservation programs.
a This denotes use by USDA of spending authority provided in the CCC Charter Act. Spending on export and other noncommodity programs is listed on page 5.
b Outlays are recorded in the recipient accounts.
c Disaster assistance--cash payments only
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
 
    Crop Disaster Payments                    0              0          0            0            0            0            0            0            0            0            0            0
    Livestock and Tree Assistance           663          1,907        845          813          793          781          789          789          789          789          789          789
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
      Total                                 663          1,907        845          813          793          781          789          789          789          789          789          789
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
d Export Outlays
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
 
    Direct Loans                              0              0          0            0            0            0            0            0            0            0            0            0
    McGovern/Dole Program                     0              0          0            0            0            0            0            0            0            0            0            0
    Agricultural Trade Promotion and        186            251        251          251          251          251          251          251          251          251          251          251
     Facilitation
      Market Access Program                 157            200        200          200          200          200          200          200          200          200          200          200
      Foreign Market Development             23             35         35           35           35           35           35           35           35           35           35           35
       Cooperator
      Emerging Markets                        2              8          8            8            8            8            8            8            8            8            8            8
      Specialty Crop Technical                4              8          8            8            8            8            8            8            8            8            8            8
       Assistance
    Agricultural Trade Promotion             57              4          4            0            0            0            0            0            0            0            0            1
     Mitigation
    Food for Progress--commodities          286            125        175          175          175          175          175          175          175          175          175          175
    Food for Progress--transport             71             36         40           40           40           40           40           40           40           40           40           40
    Food for Progress--                      13             12         15           15           15           15           15           15           15           15           15           15
     administrative
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
      Total                                 614            428        485          481          481          481          481          481          481          481          481          482
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
e Other Noncommodity Outlays
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
 
    Operating Expenses                        0              0          0            0            0            0            0            0            0            0            0            0
    Change in Working Capital                 0              0          0            0            0            0            0            0            0            0            0            0
    Feedstock Flexibility Program             0              0          0            0            0            0            0            0            0            0            0            0
    National Organic Certification            7              8          8            0            0            0            0            0            0            0            0            0
     Cost-Share
    Food Purchase/Distribution              228             59         25            0            0            0            0            0            0            0            0            0
     Mitigation *
    Other                                   287            315        337          300          300          300          300          300          300          300          300          300
      Total                                 522            382        370          300          300          300          300          300          300          300          300          300
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
f Interest Outlays
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
 
    Interest Payments                       230             20        171          109           91          103          150          197          224          222          195          171
    Interest Receipts                       ^96             ^9        ^71          ^46          ^38          ^43          ^63          ^83          ^94          ^93          ^81          ^71
      Total                                 134             12         99           64           53           60           87          115          130          129          113           99
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Denotes use by USDA of spending authority provided in the CCC Charter Act.
Source: Congressional Budget Office.


                                                                                     Program Payment Summary
                                                                               Millions of Dollars, by Fiscal Year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Fiscal Year                                                                            8Total
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Program and Crop             2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032       82022-32
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                      Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price Loss Coverage
  Corn                       1,105            1            0            0        1,086        2,339        2,756        2,723        1,362        1,075        1,177        1,377      813,896
  Sorghum                      234            5            0            6           23           94          156          137          112          100           91          106         8830
  Barley                        56           43           36           32           50           92          107           95           96          103          103           97         8854
  Oats                           0            0            0            0            0            0            0            1            1            1            1            1           85
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Feed Grains        1,394           49           36           38        1,159        2,526        3,019        2,955        1,570        1,279        1,372        1,581      815,585
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Soybeans                       0            0            0            0           24          111          136          147           69           63           49           37         8635
  Wheat                      1,686          856            0            2            8          429          653          647          694          705          707          793       85,494
  Seed Cotton                  980          472            0            0          303          433          428          441          433          466          484          482       83,942
  Rice                         384          274          201          156          362          421          452          462          506          488          469          451       84,241
  Peanuts                      405          384          226          202          202          283          305          301          296          293          294          294       83,081
  Other Oilseeds               107           34            0            5           36           73           80           86           57           57           61           61         8549
  Dry Peas                       8            7            0            0            0            0            0            0            0            0            0            0           87
  Lentils                       16           11           15           19           22            0            0            0            0            3           17            7          894
  Small Chickpeas                1            0            0            0            0            0            0            0            0            0            0            0           80
  Large Chickpeas                5            1            1            1            1            1            1            1            1            1            1            0          810
                        ========================================================================================================================================================================
      Total Price Loss       4,987        2,088          480          422        2,116        4,277        5,074        5,040        3,626        3,354        3,455        3,707      833,638
       Coverage
                        ========================================================================================================================================================================
Agriculture Risk
 Coverage--County
  Corn                         291           28            0            0           28          332          942        1,393        1,902          910          499          403       86,436
  Sorghum                        7            1            0            0           20           43           49           53           38           17           11            9         8243
  Barley                         2            2           12            3            7            6            7            8           11           10            9           11          886
  Oats                           3            1            0            0            0            1            3            4            6            4            3            3          825
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Feed Grains          303           31           12            3           55          383        1,001        1,458        1,957          941          522          426       86,790
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Soybeans                     608            3            0            4           39          129          401          551          614          424          308          285       82,758
  Wheat                         56           23           18            9          102          187          187          199          197          110           86           79       81,197
  Seed Cotton                    6            4            3            0            7           19           29           41           43           29           25           21         8220
  Rice                           0            0            2            3            9           10           11           11            9            7            7            7          875
  Peanuts                        0            0            0            0            0            0            0            0            0            0            0            0           81
  Other Oilseeds                 2            0            1            2            2            8           14           15           27           19           14           13         8115
  Dry Peas                       0            0            9           10            7            7            7            6            6            5            5            5          867
  Lentils                        0            0            0            0            0            0            0            0            0            0            0            0           80
  Small Chickpeas                0            0            0            0            0            0            0            0            0            0            0            0           80
  Large Chickpeas                0            0            0            0            0            4            5            5            4            3            3            5          829
                        ========================================================================================================================================================================
      Total County             975           62           45           31          222          746        1,654        2,286        2,857        1,538          970          841      811,253
       Coverage
                        ========================================================================================================================================================================
Total Marketing Loan
 Benefits
  Corn                           0            0            0            0            0            0            0            0            0            0            0            0           80
  Sorghum                        0            0            0            0            0            0            0            0            0            0            0            0           80
  Barley                         0            0            0            0            0            0            0            0            0            0            0            0           80
  Oats                           0            0            0            0            0            0            0            0            0            0            0            0           80
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Feed Grains            0            0            0            0            0            0            0            0            0            0            0            0           80
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Soybeans                       0            0            0            0            0            0            0            0            0            0            0            0           80
  Wheat                          0            0            0            0            0            0            0            0            0            0            0            0           80
  Upland Cotton                 26            0            0            1           10           11           10           10           13           19           18           15         8106
  Rice                           0            0            0            0            0            0            0            0            0            0            0            0           80
  Peanuts                        0            0            4            4            9           10           10           10            9            9            9            8          882
  Other Oilseeds                 0            0            0            0            0            0            0            0            0            0            0            0           81
  Wool                           0            0            0            0            0            0            0            0            0            0            0            0           81
  Mohair                         0            0            0            0            0            0            0            0            0            0            0            0           81
  Honey                          0            0            0            0            0            0            0            0            0            0            0            0           81
  Dry Peas                       0            3            3            0            0            2            2            2            1            0            0            0          813
  Lentils                        2            1            0            0            0            0            0            0            0            0            0            0           81
  Small Chickpeas                6            6            6            7            0            0            0            0            0            6            2            1          828
  Large Chickpeas                0            0            0            0            0            0            0            0            0            0            0            0           81
                        ========================================================================================================================================================================
      Total Loan                33           10           13           13           19           23           22           21           23           35           29           25         8233
       Benefits
                        ========================================================================================================================================================================
Total Payments a
  Corn                       1,395           28            0            0        1,114        2,672        3,698        4,116        3,263        1,984        1,676        1,780      820,332
  Sorghum                      241            6            0            6           43          137          205          190          150          117          102          115       81,073
  Barley                        58           45           48           35           57           98          114          103          107          113          112          108         8940
  Oats                           3            1            0            0            0            1            3            5            7            5            4            4          830
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Feed Grains        1,697           80           48           41        1,214        2,909        4,020        4,414        3,527        2,219        1,894        2,007      822,375
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Soybeans                     608            3            0            4           62          241          537          697          683          487          357          322       83,393
  Wheat                      1,742          879           18           11          110          616          840          846          891          815          793          872       86,691
  Upland Cotton              1,012          476            3            1          320          463          467          492          489          514          527          518       84,269
  Rice                         385          274          204          159          371          430          462          473          514          495          475          458       84,316
  Peanuts                      406          384          230          206          211          293          315          311          305          303          304          302       83,165
  Other Oilseeds               109           35            1            6           38           81           94          101           84           76           75           74         8665
  Wool                           0            0            0            0            0            0            0            0            0            0            0            0           81
  Mohair                         0            0            0            0            0            0            0            0            0            0            0            0           81
  Honey                          0            0            0            0            0            0            0            0            0            0            0            0           81
  Dry Peas                       8           10           12           10            7            9            9            8            7            5            5            5          887
  Lentils                       18           12           15           19           22            0            0            0            0            3           17            7          895
  Small Chickpeas                7            6            6            7            0            0            0            0            0            6            2            1          828
  Large Chickpeas                5            1            1            1            1            5            6            6            5            4            4            5          840
                        ========================================================================================================================================================================
      Total Payments         5,996        2,160          538          465        2,357        5,046        6,750        7,348        6,505        4,927        4,454        4,573      845,124
       Listed
                        ========================================================================================================================================================================
Other Payments (Not
 included above)
  Agriculture Risk             318           25           17           25           38           55           73           91           94           78           65           62         8624
   Coverage--IC
  Cotton Ginning Cost-           5           --           --           --           --           --           --           --           --           --           --           --          8--
   Share Payments
  Assistance to Cotton          33           36           37           37           38           39           39           39           39           39           39           39         8419
   Users
  ELS Cotton                     4            0            1            1            3            3            3            3            3            3            3            3          826
   Competitiveness
   Payments
  Dairy Margin Coverage        792          387          878          536          366          316          286          302          257          225          178          193       83,924
  Dairy Premiums and           ^42          ^61          ^72          ^69          ^67          ^67          ^67          ^67          ^67          ^67          ^66          ^66        8^735
   Administrative Fees
  Milk Donation Program          5            5            5            5            5            5            5            5            5            5            5            5          855
  Livestock Disaster           663        1,907          845          813          793          781          789          789          789          789          789          789       89,876
   Payments
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Other              1,778        2,298        1,711        1,349        1,176        1,132        1,129        1,162        1,120        1,072        1,013        1,025      814,188
     Payments
                        ========================================================================================================================================================================
      Total Payments         7,774        4,458        2,249        1,814        3,534        6,179        7,879        8,510        7,625        5,999        5,467        5,598      859,313
       Listed
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
a Total payments by commodity do not include Individual Agriculture Risk Coverage payments. Those payments are based on all covered crops grown on the farm and, hence, cannot be readily
  assigned to individual crops.
Source: Congressional Budget Office.


                                                                                       Corn Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         75.3         51.4          0.0         87.2         74.4         64.1         59.0         43.6         51.3         61.5         66.7         69.2         71.8
  ARC-CO                      18.8         47.2         96.5          9.3         22.1         32.4         37.5         52.9         45.2         35.0         29.8         27.3         24.7
  ARC-IC                       5.8          1.4          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                94.710       92.680       93.700       93.700       93.700       93.700       93.700       93.700       93.700       93.700       93.700       93.700       93.700
  Planted                   90.652       93.357       89.490       91.750       91.000       90.250       90.000       89.500       89.000       89.000       89.000       89.000       89.000
  Harvested                 82.313       85.388       81.973       84.043       83.356       82.669       82.440       81.982       81.524       81.524       81.524       81.524       81.524
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Bushels per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Harvested Yield            171.4        177.0        178.4        180.3        183.0        185.7        187.7        189.6        191.6        193.5        195.5        197.0        199.0
  Planted Yield *            171.4        177.0        178.4        180.3        183.0        185.7        187.7        189.6        191.6        193.5        195.5        197.0        199.0
  Payment Yield--PLC         146.0        144.3        146.0        146.0        146.0        146.0        146.0        146.0        146.0        146.0        146.0        146.0        146.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                             Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           1,919        1,235        1,440        1,427        1,602        1,755        1,838        1,895        1,904        1,868        1,871        1,889        1,936
  Production                14,111       15,115       14,623       15,156       15,254       15,355       15,473       15,547       15,619       15,778       15,937       16,060       16,223
  Imports                       24           25           35           35           35           35           35           35           35           35           35           35           35
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply            16,054       16,375       16,098       16,618       16,891       17,144       17,346       17,476       17,558       17,680       17,842       17,985       18,467
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Food and Other             1,406        1,404        1,417        1,421        1,427        1,432        1,437        1,443        1,446        1,451        1,454        1,460        1,464
   Industrial
  Alcohol Fuel               5,028        5,375        5,275        5,265        5,255        5,245        5,235        5,225        5,215        5,205        5,195        5,185        5,175
  Seed                          31           31           30           30           29           29           29           29           29           29           29           29           29
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal FSI             6,465        6,810        6,722        6,716        6,712        6,706        6,701        6,697        6,690        6,685        6,678        6,674        6,668
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Feed and Residual          5,601        5,625        5,625        5,800        5,850        5,975        6,050        6,125        6,200        6,275        6,350        6,400        6,500
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic Use            12,066       12,435       12,347       12,516       12,562       12,681       12,751       12,822       12,890       12,960       13,028       13,074       13,168
  Exports                    2,753        2,500        2,325        2,500        2,575        2,625        2,700        2,750        2,800        2,850        2,925        2,975        3,025
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      Total Use             14,819       14,935       14,672       15,016       15,137       15,306       15,451       15,572       15,690       15,810       15,953       16,049       16,193
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                1,235        1,440        1,427        1,602        1,755        1,838        1,895        1,904        1,868        1,871        1,889        1,936        2,001
Stocks/Use (Percent)           8.3          9.6          9.7         10.7         11.6         12.0         12.3         12.2         11.9         11.8         11.8         12.1         12.4
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Bushel
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year              4.53         5.80         6.00         4.45         4.10         3.95         3.85         3.85         3.95         4.00         3.95         3.90         3.80
   Average
  Loan Rate                   2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20
  Reference Price             3.70         3.70         3.70         3.70         3.70         3.70         3.70         3.70         3.70         3.70         3.70         3.70         3.70
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for corn runs from September 1 of the year shown to August 31 of the following year.
* Excludes acreage intended for harvest other than for grain.
Source: Congressional Budget Office.


                                                                                      Corn Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Fiscal Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loan Activity                                                                                      Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Outstanding Beginning        140           47           47           47           47           47           47           47           47           47           47           47
   Loan Stocks
  Loans Made                   562          831          804          834          839          845          851          855          859          868          877          883
  Repayments                   656          831          804          834          839          845          851          855          859          868          877          883
  Transfers, Writeoffs           0            0            0            0            0            0            0            0            0            0            0            0
  Forfeitures                    0            0            0            0            0            0            0            0            0            0            0            0
  Outstanding Ending            47           47           47           47           47           47           47           47           47           47           47           47
   Loan Stocks
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Lending                                                                                        Millions of Dollars
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Loans Made                 1,224        1,829        1,769        1,834        1,846        1,858        1,872        1,881        1,890        1,909        1,928        1,943
  Loans Repaid               1,420        1,829        1,769        1,834        1,846        1,858        1,872        1,881        1,890        1,909        1,928        1,943
  Marketing Loan Gains           0            0            0            0            0            0            0            0            0            0            0            0
  Net Loans                    102            0            0            0            0            0            0            0            0            0            0            0
  CCC Storage and                0            0            0            0            0            0            0            0            0            0            0            0
   Handling
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                   102            0            0            0            0            0            0            0            0            0            0            0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Cash Payments
  Loan Deficiency                0            0            0            0            0            0            0            0            0            0            0            0
   Payments
  Price Loss Coverage        1,105            1            0            0        1,086        2,339        2,756        2,723        1,362        1,075        1,177        1,377
  County Agriculture           291           28            0            0           28          332          942        1,393        1,902          910          499          403
   Risk Coverage
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                 1,395           28            0            0        1,114        2,672        3,698        4,116        3,263        1,984        1,676        1,780
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Other Costs
  Purchases                      5            5            5            5            5            5            5            5            5            5            5            5
  Sales                         ^5           ^5           ^5           ^5           ^5           ^5           ^5           ^5           ^5           ^5           ^5           ^5
  Other                          0            0            0            0            0            0            0            0            0            0            0            0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                     0            0            0            0            0            0            0            0            0            0            0            0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Outlays
  Corn                       1,395           28            0            0        1,114        2,672        3,698        4,116        3,263        1,984        1,676        1,780
  Minor Feed Grains            302           47           48           49          131          245          325          290          246          229          216          226
                        ========================================================================================================================================================================
      Feed Grain Total       1,697           75           48           49        1,245        2,917        4,023        4,406        3,510        2,213        1,893        2,006
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                     Soybean Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         14.2         12.8          0.0         59.0         56.4         35.9         30.8         17.9         20.5         23.1         20.5         23.1         28.2
  ARC-CO                      79.6         85.9         97.0         38.0         40.6         61.1         66.2         79.1         76.5         73.9         76.5         73.9         68.8
  ARC-IC                       6.2          1.3          3.0          3.0          3.0          3.0          3.0          3.0          3.0          3.0          3.0          3.0          3.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                53.412       52.529       52.529       52.529       52.529       52.529       52.529       52.529       52.529       52.529       52.529       52.529       52.529
  Planted                   83.354       87.195       90.955       89.000       89.500       89.500       89.500       89.500       89.250       89.000       89.000       89.000       89.000
  Harvested                 82.603       86.332       90.045       88.110       88.605       88.605       88.605       88.605       88.358       88.110       88.110       88.110       88.110
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Bushels per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Harvested Yield             51.0         51.4         51.5         52.0         52.5         53.0         53.5         54.0         54.5         55.0         55.5         56.0         56.5
  Planted Yield               50.6         50.9         51.0         51.5         52.0         52.5         53.0         53.5         54.0         54.5         54.9         55.4         55.9
  Payment Yield--PLC          41.2         41.1         41.2         41.2         41.2         41.2         41.2         41.2         41.2         41.2         41.2         41.2         41.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                             Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks             525          257          259          346          294          275          265          263          269          270          265          267          269
  Production                 4,216        4,435        4,637        4,582        4,652        4,696        4,740        4,785        4,816        4,846        4,890        4,934        4,978
  Imports                       20           15           25           25           25           25           25           25           25           25           25           26           27
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             4,761        4,707        4,922        4,953        4,971        4,997        5,030        5,072        5,110        5,141        5,180        5,227        5,274
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Crush                      2,141        2,215        2,275        2,350        2,380        2,405        2,430        2,455        2,480        2,505        2,530        2,560        2,590
  Seed, Feed, and              102          118          140          144          145          146          148          149          150          151          152          154          155
   Residual
  Exports                    2,261        2,115        2,160        2,165        2,170        2,180        2,190        2,200        2,210        2,220        2,230        2,245        2,260
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                4,504        4,448        4,575        4,659        4,695        4,731        4,768        4,804        4,840        4,876        4,912        4,959        5,005
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                  257          259          346          294          275          265          263          269          270          265          267          269          269
Stocks/Use (Percent)           5.7          5.8          7.6          6.3          5.9          5.6          5.5          5.6          5.6          5.4          5.4          5.4          5.4
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Bushel
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year             10.80        13.25        12.50        10.50        10.20        10.10        10.00        10.10        10.00        10.00        10.00        10.00        10.00
   Average
  Loan Rate                   6.20         6.20         6.20         6.20         6.20         6.20         6.20         6.20         6.20         6.20         6.20         6.20         6.20
  Reference Price             8.40         8.40         8.40         8.40         8.40         8.40         8.40         8.40         8.40         8.40         8.40         8.40         8.40
  Soybean/Corn Price           2.4          2.3          2.1          2.4          2.5          2.6          2.6          2.6          2.5          2.5          2.5          2.6          2.6
   Ratio
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for soybeans runs from September 1 of the year shown to August 31 of the following year.
Source: Congressional Budget Office.


                                                                                     Soybean Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loan Activity                                                                                             Millions of Bushels
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Outstanding Beginning Loan Stocks          19            7            7            7            7            7            7            7            7            7            7            7
  Loans Made                                 76          133          139          137          140          141          142          144          144          145          147          148
  Repayments                                 88          133          139          137          140          141          142          144          144          145          147          148
  Transfers, Writeoffs                        0            0            0            0            0            0            0            0            0            0            0            0
  Forfeitures                                 0            0            0            0            0            0            0            0            0            0            0            0
  Outstanding Ending Loan Stocks              7            7            7            7            7            7            7            7            7            7            7            7
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Net Lending                                                                                               Millions of Dollars
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Loans Made                                474          825          863          852          865          873          882          890          896          901          910          918
  Loans Repaid                              545          825          863          852          865          873          882          890          896          901          910          918
  Marketing Loan Gains                        0            0            0            0            0            0            0            0            0            0            0            0
  Net Loans                                  42           42           42           42           42           42           42           42           42           42           42           42
  CCC Storage and Handling                    0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                 42           42           42           42           42           42           42           42           42           42           42           42
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Cash Payments
  Loan Deficiency Payments                    0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                         0            0            0            0           24          111          136          147           69           63           49           37
  County Agriculture Risk Coverage          608            3            0            4           39          129          401          551          614          424          308          285
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                608            3            0            4           62          241          537          697          683          487          357          322
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Other Costs
  Purchases                                   0            0            0            0            0            0            0            0            0            0            0            0
  Sales                                       0            0            0            0            0            0            0            0            0            0            0            0
  Other                                       0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                  0            0            0            0            0            0            0            0            0            0            0            0
                                     ===========================================================================================================================================================
      Total Outlays                         608            3            0            4           62          241          537          697          683          487          357          322
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                      Wheat Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         87.2         82.0         65.0         13.0         59.0         67.0         67.0         72.0         77.0         77.0         79.0         79.0         82.0
  ARC-CO                      10.8         16.0         33.0         85.0         39.0         31.0         31.0         26.0         21.0         21.0         19.0         19.0         16.0
  ARC-IC                       2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                  63.7         63.7         63.7         63.7         63.7         63.7         63.7         63.7         63.7         63.7         63.7         63.7         63.7
  Planted                     44.5         46.7         47.5         47.0         46.0         46.0         46.0         46.0         46.0         46.0         45.0         45.0         45.0
  Harvested                   36.8         37.2         40.1         39.7         38.8         38.8         38.8         38.8         38.8         38.8         38.0         38.0         38.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Bushels per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Harvested Yield             49.7         44.3         48.5         49.0         49.4         49.8         50.2         50.6         51.0         51.4         51.8         52.2         52.6
  Planted Yield               41.1         35.2         40.9         41.4         41.6         42.0         42.4         42.7         43.0         43.3         43.8         44.1         44.4
  Payment Yield--PLC          42.0         42.0         42.0         42.0         42.0         42.0         42.0         42.0         42.0         42.0         42.0         42.0         42.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                             Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           1,028          845          678          788          798          791          793          808          812          829          861          841          900
  Production                 1,828        1,646        1,945        1,944        1,915        1,934        1,950        1,964        1,980        1,994        1,969        1,985        2,095
  Imports                      100           95          105          105          120          120          120          120          120          120          120          120          120
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             2,956        2,586        2,728        2,837        2,833        2,845        2,863        2,892        2,912        2,943        2,950        2,946        2,982
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Food                         961          959          962          962          965          965          968          968          971          971          973          973        1,004
  Seed and Industrial           64           64           63           62           62           62           62           62           62           61           61           61           64
  Feed and Residual             95          100           90           90           90          100          100          100          100          100          100          100          120
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic Use             1,120        1,123        1,115        1,114        1,117        1,127        1,130        1,130        1,133        1,132        1,134        1,134        1,133
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                      992          785          825          925          925          925          925          950          950          950          950          950        1,025
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                2,112        1,908        1,940        2,039        2,042        2,052        2,055        2,080        2,083        2,082        2,084        2,084        2,083
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                  844          678          788          798          791          793          808          812          829          861          866          862          899
Stocks/Use (Percent)          40.0         35.5         40.6         39.1         38.7         38.6         39.3         39.0         39.8         41.4         41.6         41.4         43.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Bushel
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year              5.05         7.60         7.65         6.35         5.40         5.25         5.25         5.20         5.20         5.20         5.15         5.15         5.10
   Average
  Loan Rate                   2.94         3.38         3.38         3.38         3.38         3.38         3.38         3.38         3.38         3.38         3.38         3.38         3.38
  Reference Price             5.50         5.50         5.50         5.50         5.50         5.50         5.50         5.50         5.50         5.50         5.50         5.50         5.50
  Wheat/Corn Price             1.1          1.3          1.3          1.4          1.3          1.3          1.4          1.4          1.3          1.3          1.3          1.3          1.3
   Ratio
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for wheat runs from June 1 of the year shown to May 31 of the following year.
Source: Congressional Budget Office.


                                                                                      Wheat Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loan Activity                                                                                             Millions of Bushels
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Outstanding Beginning Loan Stocks          34           10           10           10           10           10           10           10           10           10           10           10
  Loans Made                                 26          136          134          135          137          137          139          140          138          139          140          141
  Repayments                                 50          136          134          135          137          137          139          140          138          139          140          141
  Transfers, Writeoffs                        0            0            0            0            0            0            0            0            0            0            0            0
  Forfeitures                                 0            0            0            0            0            0            0            0            0            0            0            0
  Outstanding Ending Loan Stocks             10           10           10           10           10           10           10           10           10           10           10           10
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Net Lending                                                                                               Millions of Dollars
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Loans Made                                 94          460          453          458          461          465          468          472          466          470          473          477
  Loans Repaid                              184          460          453          458          461          465          468          472          466          470          473          477
  Marketing Loan Gains                        0            0            0            0            0            0            0            0            0            0            0            0
  Net Loans                                  35            0            0            0            0            0            0            0            0            0            0            0
  CCC Storage and Handling                    0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                 35            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Cash Payments
  Loan Deficiency Payments                    0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                     1,687          856            0            2            8          429          653          647          694          705          707          793
  County Agriculture Risk Coverage           56           23           18            9          102          187          187          199          197          110           86           79
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                              1,743          879           18           11          110          616          840          846          891          815          793          872
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Other Costs
  Purchases                                   6            6            6            6            6            6            6            6            6            6            6            6
  Sales                                      ^6           ^6           ^6           ^6           ^6           ^6           ^6           ^6           ^6           ^6           ^6           ^6
  Other                                       0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                  0            0            0            0            0            0            0            0            0            0            0            0
                                     ===========================================================================================================================================================
      Total Outlays                       1,790          880           22           15          115          623          847          854          898          821          799          878
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                  Upland Cotton Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         99.1         91.5          91.5         93.0         90.0         87.0         85.0         85.0         87.0         89.0         91.0         91.5         91.5
  ARC-CO                       0.9          8.5           8.5          7.0         10.0         13.0         15.0         15.0         13.0         11.0          9.0          9.5          9.5
  ARC-IC                       0.0          0.0           0.0          0.0          0.0          0.0          0.0          0.0          0.0          0.0          0.0          0.0          0.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                12.793       12.564        12.793       12.793       12.793       12.793       12.793       12.793       12.793       12.793       12.793       12.793       12.793
  Planted Acres             11.890       11.093        12.058       12.600       12.300       12.200       12.300       12.350       12.400       12.400       12.400       12.500       12.400
  Harvested Acres            8.081        9.845        10.249       10.710       10.455       10.370       10.455       10.498       10.540       10.540       10.540       10.625       10.540
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Harvested Yield              835          841           845          851          857          863          869          875          881          887          893          900          906
  Planted Yield                568          747           718          723          728          733          739          744          749          754          759          765          770
  Seed Cotton Payment        1,750        1,773         1,748        1,748        1,748        1,748        1,748        1,748        1,748        1,748        1,748        1,748        1,749
   Yield--PLC
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                           Millions of 480 lb Bales
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           6.869        3.021         3.439        3.392        4.095        4.281        4.246        4.297        4.355        4.421        4.456        4.458        4.587
  Production                14.061       17.257        18.043       18.986       18.664       18.642       18.926       19.136       19.348       19.483       19.620       19.916       19.895
  Imports                    0.000        0.000         0.005        0.005        0.005        0.005        0.005        0.005        0.005        0.005        0.005        0.005        0.005
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply            20.930       20.278        21.486       22.383       22.764       22.927       23.177       23.437       23.708       23.909       24.080       24.379       24.286
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Mill Use                   2.385        2.535         2.573        2.612        2.651        2.691        2.731        2.772        2.813        2.816        2.819        2.822        2.825
  Exports                   15.586       14.325        15.471       15.626       15.782       15.940       16.099       16.260       16.423       16.587       16.753       16.920       17.090
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use               17.971       16.860        18.044       18.237       18.433       18.630       18.830       19.032       19.236       19.403       19.572       19.742       19.914
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Unaccounted                0.062        0.021        ^0.050       ^0.050       ^0.050       ^0.050       ^0.050       ^0.050       ^0.050       ^0.050       ^0.050       ^0.050       ^0.050
Ending Stocks                3.021        3.439         3.392        4.095        4.281        4.246        4.297        4.355        4.421        4.456        4.458        4.587        4.522
Stocks/Use (Percent)         16.8%        20.4%         18.8%        22.5%        23.2%        22.8%        22.8%        22.9%        23.0%        23.0%        22.8%        23.2%        22.7%
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year             0.630        0.910         0.878        0.737        0.709        0.712        0.712        0.711        0.709        0.710        0.713        0.705        0.714
   Average
  Far East Price             0.838        0.988         0.938        0.921        0.936        0.926        0.937        0.939        0.939        0.942        0.943        0.942        0.942
  AWP                        0.646        0.776         0.725        0.706        0.720        0.709        0.718        0.718        0.716        0.718        0.718        0.715        0.713
  Loan Rate                  0.520        0.520         0.520        0.520        0.520        0.520        0.520        0.520        0.520        0.520        0.520        0.520        0.520
  Cotton User Payment        0.030        0.030         0.030        0.030        0.030        0.030        0.030        0.030        0.030        0.030        0.030        0.030        0.030
   Rate
  Cottonseed                 0.097        0.122         0.117        0.101        0.099        0.099        0.098        0.099        0.099        0.099        0.100        0.100        0.101
  Seed Cotton                0.326        0.463         0.444        0.374        0.361        0.362        0.362        0.362        0.361        0.361        0.363        0.360        0.364
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for cotton runs from August 1 of the year shown to July 31 of the following year.
Source: Congressional Budget Office.


                                                                                  Upland Cotton Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loan Activity                                                                                          Millions of 480 lb Bales
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Loans Outstanding             0.638        0.264        0.260        0.169        0.314        0.314        0.314        0.314        0.263        0.258        0.258        0.258
  Loans Made                              8.251        7.624        9.022        9.493        9.332        9.321        9.463        9.568        9.674        9.742        9.810        9.879
  Loans Repaid                            8.557        7.628        9.113        9.348        9.332        9.321        9.463        9.619        9.678        9.742        9.810        9.958
  Transfers, Writeoffs                        0            0            0            0            0            0            0            0            0            0            0            0
  Forfeitures                             0.002            0            0            0            0            0            0            0            0            0            0            0
  Ending Loans Outstanding                0.264        0.260        0.169        0.314        0.314        0.314        0.314        0.263        0.258        0.258        0.258        0.178
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Net Lending                                                                                               Millions of Dollars
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Loans Made                              2,166        2,256        2,368        2,329        2,328        2,363        2,389        2,415        2,432        2,449        2,466        2,403
  Loans Repaid                            2,121        2,184        2,239        2,246        2,245        2,315        2,353        2,367        2,383        2,400        2,436        2,432
  Net Loans (Including MLG)                  46           72          129           83           83           48           36           48           49           49           30            0
  Marketing Loan Gains                       19            0            0            0            4            4            4            3            5            8            7            6
  CCC Storage, Transportation,                5            0            0            1            5            6            5            5            6            8            7            6
   Handling
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                 71            0          129           83           88            9           41           52           55           57           38            6
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Cash Payments
  Price Loss Coverage                       980          472            0            0          303          433          428          441          433          466          484          482
  Agriculture Risk Coverage                   6            4            3            0            7           19           29           41           43           29           25           21
  Loan Deficiency Payments                    2            0            0            0            2            2            2            1            2            3            3            3
  Cotton Ginning Cost-Share                   5           --           --           --           --           --           --           --           --           --           --           --
  Economic Assistance to Mills               33           36           37           37           38           39           39           39           39           39           39           39
    Subtotal                              1,026          512           40           38          350          492          497          523          517          537          551          545
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Other Costs and Receipts
  Purchases                                   0            0            0            0            0            0            0            0            0            0            0            0
  Sales                                       0            0            0            0            0            0            0            0            0            0            0            0
  Other (Loan collateral, etc.)               0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                  0            0            0            0            0            0            0            0            0            0            0            0
                                     ===========================================================================================================================================================
      Total Outlays                       1,097          512          169          121          437          502          537          575          572          594          589          551
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                       Rice Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres (All rice)      4.603        4.314        4.606        4.606        4.606        4.606        4.606        4.606        4.606        4.606        4.606        4.606        4.606
  Planted Acres              3.036        2.532        2.452        2.800        2.735        2.730        2.730        2.730        2.735        2.735        2.740        2.750        2.750
  Harvested Acres            2.986        2.488        2.408        2.750        2.686        2.681        2.681        2.681        2.686        2.686        2.691        2.701        2.701
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested        7,619        7,709        7,748        7,786        7,825        7,864        7,904        7,943        7,983        8,023        8,063        8,103        8,144
   Acre
  Yield per Planted          7,494        7,575        7,608        7,646        7,684        7,723        7,761        7,800        7,839        7,878        7,918        7,994        8,070
   Acre
  Payment Yield--PLC         6,372        6,322        6,371        6,371        6,371        6,371        6,371        6,371        6,371        6,371        6,371        6,371        6,371
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                          Millions of Hundredweight
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks            28.7         43.7         34.5         29.0         37.8         40.1         41.4         42.1         42.2         42.0         41.6         41.3         43.6
  Production                 227.5        191.8        186.6        214.1        210.2        210.8        211.9        212.9        214.4        215.5        216.9        219.8        221.9
  Imports                     34.1         30.5         37.5         37.5         37.7         37.9         38.1         38.3         38.4         38.6         38.8         40.0         41.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Total Supply               290.3        266.0        258.5        280.6        285.7        288.8        291.4        293.3        295.0        296.1        297.4        301.2        306.7
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Domestic                   152.7        145.5        144.5        153.8        154.6        155.5        156.4        157.4        158.3        159.3        160.2        161.2        162.1
  Exports                     93.9         86.0         85.0         89.0         91.0         91.9         92.8         93.8         94.7         95.3         95.8         96.4         97.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                246.6        231.5        229.5        242.8        245.6        247.4        249.3        251.1        253.0        254.5        256.1        257.6        259.1
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                 43.7         34.5         29.0         37.8         40.1         41.4         42.1         42.2         42.0         41.6         41.3         43.6         47.6
Stocks/Use (Percent)          17.7         14.9         12.6         15.6         16.3         16.7         16.9         16.8         16.6         16.3         16.1         16.9         18.4
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                          Dollars per Hundredweight
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year             14.40        15.70        15.93        13.94        13.54        13.34        13.27        13.31        13.40        13.53        13.64        13.63        13.68
   Average
  Adjusted World Price       11.23        12.14        14.33        10.90        10.63        10.49        10.44        10.47        10.53        10.62        10.69        10.69        10.72
  Loan Rate                   7.00         7.00         7.00         7.00         7.00         7.00         7.00         7.00         7.00         7.00         7.00         7.00         7.00
  Reference Price (Long/     14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00
   medium grain)
  Reference Price            17.30        17.30        17.30        17.30        17.30        17.30        17.30        17.30        17.30        17.30        17.30        17.30        17.30
   (Japonica)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for rice runs from August 1 of the year shown to July 31 of the following year.
Source: Congressional Budget Office.


                                                                                      Rice Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loan Activity                                                                                          Millions of Hundredweight
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Loans Outstanding                 6           10           10           13           16           19           22           25           26           27           27           27
  Loans Made                                 42           38           47           43           42           42           40           38           35           33           33           34
  Loan Repayments                            39           38           43           40           39           39           38           36           34           33           33           34
  Transfers, Writeoffs                        0            0            0            0            0            0            0            0            0            0            0            0
  Forfeitures                                 0            0            0            0            0            0            0            0            0            0            0            0
  Ending Loans Outstanding                   10           10           13           16           19           22           25           26           27           27           27           27
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Net Lending                                                                                               Millions of Dollars
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Loans Made                                295          266          326          300          297          294          278          263          246          233          234          237
  Loans Repaid                              272          266          302          278          275          273          263          252          240          232          234          237
  Net Loans (Including MLG)                  67            0           24           22           22           20           16           11            5            1            0            0
  Marketing Loan Gains                        0            0            0            0            0            0            0            0            0            0            0            0
  CCC Storage, Transportation.                0            0            0            0            0            0            0            0            0            0            0            0
   Handling
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                 67            0           24           22           22           20           16           11            5            1            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Cash Payments
  Loan Deficiency Payments                    0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                       384          274          201          156          362          421          452          462          506          488          469          451
  Agriculture Risk Coverage--County           0            0            2            3            9           10           11           11            9            7            7            7
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                385          274          204          159          371          430          462          473          514          495          475          458
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Other Costs and Receipts
  Purchases                                   0            0            0            0            0            0            0            0            0            0            0            0
  Other Sales                                 0            0            0            0            0            0            0            0            0            0            0            0
  Other (Loan collateral, etc.)               0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                  0            0            0            0            0            0            0            0            0            0            0            0
                                     ===========================================================================================================================================================
      Total Outlays                         385          274          204          159          371          430          462          473          514          495          475          458
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                      Peanut Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Thousands of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 2,451        2,424        2,452        2,452        2,452        2,452        2,452        2,452        2,452        2,452        2,452        2,452        2,452
  Planted Acres              1,663        1,585        1,571        1,650        1,600        1,611        1,622        1,634        1,645        1,657        1,668        1,680        1,692
  Harvested Acres            1,615        1,545        1,532        1,609        1,560        1,571        1,582        1,593        1,604        1,615        1,627        1,638        1,650
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Harvested Yield            3,813        4,135        4,000        4,028        4,056        4,085        4,113        4,142        4,171        4,200        4,230        4,259        4,289
  Planted Yield              3,704        4,031        3,900        3,927        3,955        3,982        4,010        4,038        4,067        4,095        4,124        4,153        4,182
  Payment Yield--PLC         3,566        3,569        3,565        3,565        3,565        3,565        3,565        3,565        3,565        3,565        3,565        3,565        3,565
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                              Millions of Pounds
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           2,116        1,965        2,339        2,298        2,478        2,477        2,480        2,489        2,504        2,524        2,550        2,582        2,620
  Production                 6,158        6,389        6,127        6,480        6,328        6,417        6,507        6,598        6,691        6,785        6,880        6,977        7,075
  Imports                      121          115          115          115          115          115          115          115          115          115          115          115          115
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             8,395        8,469        8,581        8,893        8,921        9,008        9,102        9,202        9,310        9,424        9,545        9,674        9,810
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Domestic Food              3,357        3,424        3,476        3,528        3,581        3,634        3,689        3,744        3,800        3,857        3,915        3,974        4,033
  Crush                        873          799          796          842          823          834          846          858          870          882          894          907          920
  Seed, Loss,                  783          658          752          777          765          774          784          793          803          813          823          833          843
   Shrinkage, Residual
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Domestic Use       5,013        4,881        5,024        5,147        5,168        5,243        5,318        5,395        5,473        5,552        5,632        5,714        5,796
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                    1,417        1,250        1,259        1,268        1,276        1,285        1,294        1,303        1,313        1,322        1,331        1,340        1,350
    Total Use                6,430        6,131        6,283        6,415        6,444        6,528        6,613        6,699        6,786        6,874        6,963        7,054        7,146
Ending Stocks                1,965        2,339        2,298        2,478        2,477        2,480        2,489        2,504        2,524        2,550        2,582        2,620        2,664
Stocks/Use (Percent)          30.6         38.1         36.6         38.6         38.4         38.0         37.6         37.4         37.2         37.1         37.1         37.1         37.3
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year            0.2100       0.2420       0.2475       0.2475       0.2320       0.2285       0.2292       0.2298       0.2302       0.2304       0.2304       0.2303       0.2300
   Average
  Loan Rate                 0.1775       0.1775       0.1775       0.1775       0.1775       0.1775       0.1775       0.1775       0.1775       0.1775       0.1775       0.1775       0.1775
  Reference Price           0.2675       0.2675       0.2675       0.2675       0.2675       0.2675       0.2675       0.2675       0.2675       0.2675       0.2675       0.2675       0.2675
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for peanuts runs from August 1 of the year shown to July 31 of the following year.
Source: Congressional Budget Office.


                                                                                     Peanut Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loan Activity                                                                                             Millions of Pounds
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Loans Outstanding               215          262          262          321          296          311          325          340          355          371          387          403
  Loans Made                              4,902        4,902        5,184        5,062        5,133        5,205        5,278        5,353        5,428        5,504        5,581        5,660
  Loan Repayments                         4,854        4,901        5,126        5,086        5,119        5,190        5,263        5,337        5,412        5,488        5,565        5,644
  Transfers, Writeoffs                        0            0            0            0            0            0            0            0            0            0            0            0
  Forfeitures                                 0            0            0            0            0            0            0            0            0            0            0            0
  Ending Loans Outstanding                  262          262          321          296          311          325          340          355          371          387          403          419
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Net Lending                                                                                               Millions of Dollars
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Loans Made                                888          872          920          899          912          924          937          950          964          977          991          974
  Loans Repaid                              857          844          893          872          884          896          909          922          935          948          961          974
  Net Loans (Including MLG)                  44           28           27           27           28           28           29           29           29           30           30            0
  Marketing Loan Gains                        0            0            4            4            9           10           10           10            9            9            9            8
  CCC Storage, Transportation,                0            0            0            0            0            0            0            0            0            0            0            0
   Handling
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                 44            0            4            4            9           10           10           10            9            9            9            8
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Cash Payments
  Loan Deficiency Payments                    0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                       405          384          226          202          202          283          305          301          296          293          294          294
  Agriculture Risk Coverage--County           0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                406          384          227          202          202          283          305          301          296          293          294          294
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Other Costs and Receipts
  Purchases                                   0            0            0            0            0            0            0            0            0            0            0            0
  Sales                                       0            0            0            0            0            0            0            0            0            0            0            0
  Other (Loan collateral, etc.)               0            0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                  0            0            0            0            0            0            0            0            0            0            0            0
                                     ===========================================================================================================================================================
      Total Outlays                         450          384          230          206          211          293          315          311          305          303          304          302
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                          Dairy Program
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Estimated                                                                     Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Herd Size (Million head)                    9.475      9.456        9.437        9.428        9.436        9.448        9.459        9.470        9.482        9.493        9.504        9.516
Yield (Pounds/cow)                         23,960     24,305       24,530       24,835       24,990       25,220       25,440       25,735       25,885       26,110       26,330       26,550
Production (Billion pounds, milkfat           226        228          231          234          236          238          241          244          245          248          250          253
 basis)
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Prices (Annual average)                                                                         Dollars per Hundredweight
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  All Milk Price                            18.69      25.80        21.00        19.20        19.35        19.40        19.55        19.50        20.05        20.45        20.85        20.80
  Milk Feed Cost                            10.51      12.14        12.75        10.16         9.61         9.41         9.36         9.38         9.50         9.56         9.53         9.52
  Milk/Feed Cost Margin                      8.18      13.66         8.25         9.04         9.74         9.99        10.19        10.12        10.55        10.89        11.32        11.28
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Outlays                                                                                            Millions of Dollars
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Dairy Margin Coverage                       792        387          878          536          366          316          286          302          257          225          178          193
  Milk Donation Program                         5          5            5            5            5            5            5            5            5            5            5            5
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Outlays                             797        392          883          541          371          321          291          307          262          230          183          198
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Receipts
  Annual Administrative Fee                    ^2         ^2           ^2           ^2           ^2           ^2           ^2           ^2           ^2           ^2           ^2           ^2
  Premiums for Margin Protection              ^40        ^59          ^69          ^67          ^64          ^64          ^64          ^64          ^64          ^64          ^64          ^64
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Receipts                            ^42        ^61          ^72          ^69          ^67          ^67          ^67          ^67          ^67          ^67          ^66          ^66
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Net CCC Expenditures                          755        331          811          472          304          254          225          240          195          164          117          132
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
                                            $4.00      $4.50        $5.00        $5.50        $6.00        $6.50        $7.00        $7.50        $8.00        $8.50        $9.00        $9.50
  Premiums for <5 Million Pounds              $--     $0.003       $0.005       $0.030       $0.050       $0.070       $0.080       $0.090       $0.100       $0.105       $0.110       $0.150
  Premiums for >5 Million Pounds              $--     $0.003       $0.005       $0.100       $0.310       $0.650       $1.107       $1.413       $1.813          $--          $--          $--
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                      Supplemental Agricultural Disaster Assistance Program
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Livestock Indemnity Payments
  Budget Authority                           19          142           58           56           54           53           54           54           54           54           54           54
  Outlays                                    18          142           58           56           54           53           54           54           54           54           54           54
Livestock Forage Disaster Program
  Budget Authority                          592        1,537          621          591          573          562          569          569          569          569          569          569
  Outlays                                   558        1,537          621          591          573          562          569          569          569          569          569          569
Emergency Assistance for Livestock,
 Honey Bees, and Farm-Raised Fish
  Budget Authority                           81          217          156          156          156          156          156          156          156          156          156          156
  Outlays                                    77          217          156          156          156          156          156          156          156          156          156          156
Tree Assistance Program
  Budget Authority                           10           10           10           10           10           10           10           10           10           10           10           10
  Outlays                                    10           10           10           10           10           10           10           10           10           10           10           10
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Total
  Budget Authority                          702        1,906          845          813          793          781          789          789          789          789          789          789
  Outlays                                   663        1,906          845          813          793          781          789          789          789          789          789          789
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                               Federal Crop Insurance Corporation
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Marketing Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Millions of Acres
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Insured Acres                                445          445          446          445          444          444          443          443          443          442          442          442
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Producer Premium                           5,103        4,598        3,945        3,763        3,725        3,712        3,734        3,774        3,808        3,809        3,813        3,802
Premium Subsidy                            8,580        7,845        6,683        6,353        6,290        6,270        6,310        6,379        6,440        6,443        6,460        6,451
Total Liability                          136,211      137,032      116,444      111,466      110,189      109,667      110,433      111,637      112,776      112,889      113,084      112,815
Total Premium                             13,683       12,444       10,628       10,117       10,016        9,982       10,044       10,153       10,248       10,251       10,273       10,253
Total Indemnities                         11,631       10,577        9,033        8,599        8,513        8,485        8,537        8,630        8,711        8,714        8,732        8,715
Loss Ratio                                  0.85         0.85         0.85         0.85         0.85         0.85         0.85         0.85         0.85         0.85         0.85         0.85
Crop Year Costs
  Excess losses                           ^2,052       ^1,867       ^1,594       ^1,517       ^1,502       ^1,497       ^1,507       ^1,523       ^1,537       ^1,538       ^1,541       ^1,538
  Premium subsidy                          8,580        7,845        6,683        6,353        6,290        6,270        6,310        6,379        6,440        6,443        6,460        6,451
  Delivery expense                         1,525        1,526        1,524        1,525        1,525        1,525        1,525        1,526        1,526        1,526        1,529        1,531
  Underwriting gains                       1,825        1,660        1,418        1,349        1,336        1,331        1,340        1,354        1,367        1,367        1,370        1,368
Other a                                       21           21           21           21           21           21           21           21           21           21           21           21
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Total                                    9,900        9,186        8,052        7,732        7,670        7,650        7,689        7,758        7,817        7,819        7,839        7,833
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
FCIC Program Spending                     2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Crop Insurance Programs
  Budget Authority                         9,900        9,186        8,052        7,732        7,670        7,650        7,689        7,758        7,817        7,819        7,840        7,832
  Outlays                                  4,591        9,490        9,423        8,313        7,805        7,686        7,652        7,676        7,740        7,805        7,821        7,840
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
a Includes net adjustments from new provisions in the 2018 Farm Bill.
Source: Congressional Budget Office.


                                                                               CCC Conservation Programs (Summary)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Fiscal Year                                                                            8Total
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032       82022-32
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Commodity Credit
 Corporation Programs
  Budget Authority           2,080        1,844        2,132        2,269        2,285        2,406        2,431        2,408        2,411        2,429        2,433        2,489       825,538
  Outlays                    2,090        1,844        2,132        2,269        2,285        2,406        2,431        2,408        2,411        2,429        2,433        2,489       825,538
Farm Security and Rural
 Investment Programs
  Budget Authority           3,921        3,978        4,160        3,770        3,697        3,723        3,675        3,647        3,646        3,630        3,632        3,857       841,415
  Outlays                    3,150        3,143        3,187        3,119        3,361        3,483        3,616        3,636        3,640        3,630        3,632        3,755       838,202
Watershed
 Rehabilitation Program
  Budget Authority               0            0            0            0            0            0            0            0            0            0            0            0            80
  Outlays                       26           15           15           15            9            1            0            0            0            0            0            0           855
Watershed and Flood
 Prevention Operations
  Budget Authority              47           47           47           47           47           47           47           47           47           47           47           50          8520
  Outlays                       14           29           36           40           43           48           45           44           42           42           42           42          8453
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total
  Budget Authority           6,048        5,869        6,340        6,086        6,029        6,176        6,153        6,102        6,104        6,107        6,112        6,395       867,473
  Outlays                    5,280        5,031        5,370        5,443        5,698        5,938        6,093        6,089        6,093        6,101        6,106        6,285       864,247
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                               CCC Conservation Programs (Details)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Fiscal Year                                                                            8Total
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032       82022-32
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Conservation Reserve
 Program
  Budget Authority           2,080        1,844        2,132        2,269        2,285        2,406        2,431        2,408        2,411        2,429        2,433        2,489       825,538
  Outlays                    2,090        1,844        2,132        2,269        2,285        2,406        2,431        2,408        2,411        2,429        2,433        2,489       825,538
CRP Technical
 Assistance
  Budget Authority             112          196          297          233          155          183          132          102          101           85           87           92        81,663
  Outlays                      112          196          297          233          155          183          132          102          101           85           87           92        81,663
Conservation
 Stewardship Program--
 2014
  Budget Authority             785          700          350            0            0            0            0            0            0            0            0            0        81,050
  Outlays                      785          700          350            0            0            0            0            0            0            0            0            0        81,050
Conservation
 Stewardship Program--
 2018
  Budget Authority             750          800        1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000        1,000       810,800
  Outlays                      275          324          470          640          840          890          990        1,000        1,000        1,000        1,000        1,000        89,154
Environmental Quality
 Incentives Program
  Budget Authority           1,800        1,850        2,025        2,025        2,025        2,025        2,025        2,025        2,025        2,025        2,025        2,025       822,100
  Outlays                    1,519        1,632        1,708        1,803        1,863        1,889        1,985        2,025        2,025        2,025        2,025        2,025       821,007
Agricultural
 Conservation Easement
 Program
  Budget Authority             450          450          450          450          450          450          450          450          450          450          450          450        84,950
  Outlays                      312          340          375          410          450          450          450          450          450          450          450          450        84,725
Regional Conservation
 Partnership Program
  Budget Authority             300          300          300          300          300          300          300          300          300          300          300          300        83,300
  Outlays                       60          113          165          216          251          286          283          292          297          300          300          300        82,802
Agricultural Management
 Assistance
  Budget Authority               5            5            5            5            5            5            5            5            5            5            5            5           855
  Outlays                        4            5            5            5            5            5            5            5            5            5            5            5           855
Voluntary Public Access
 and Habitat Incentive
  Budget Authority               0            0            0            0            0            0            0            0            0            0            0            0            80
  Outlays                        8           10           10           10            2            0            0            0            0            0            0            0           832
Watershed
 Rehabilitation Program
  Budget Authority               0            0            0            0            0            0            0            0            0            0            0            0            80
  Outlays                       26           15           15           15            9            1            0            0            0            0            0            0           855
Watershed and Flood
 Prevention Operations
  Budget Authority              50           50           50           50           50           50           50           50           50           50           50           50          8550
  Outlays                       14           30           38           42           45           50           48           47           45           45           45           45          8480
Other Programs a
  Budget Authority             ^79          ^75          ^15          ^15          ^15          ^15          ^15          ^15          ^15          ^15          ^15          ^15         8^225
  Outlays                       75          ^43          ^17          ^15          ^15          ^15          ^15          ^15          ^15          ^15          ^15          ^15         8^195
Announced Sequestration
 b
  Budget Authority            ^205         ^251         ^254         ^231         ^226         ^228         ^225         ^223         ^223         ^222         ^223            0       8^2,307
  Outlays                        0         ^134         ^178         ^185         ^193         ^207         ^217         ^227         ^226         ^223         ^223         ^105       8^2,118
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total
  Budget Authority           6,048        5,869        6,340        6,086        6,029        6,176        6,153        6,102        6,104        6,107        6,112        6,395       867,472
  Outlays                    5,280        5,031        5,370        5,443        5,698        5,938        6,093        6,089        6,093        6,101        6,106        6,285       864,247
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
a Includes spending on the Emergency Forestry Conservation Reserve Program, programs repealed by the 2014 Farm Bill, Grassroots Source Water Protection, Feral Swine Eradication, Conservation
  User Fees, and transfer of amounts to the Farm Production and Conservation Business Center.
b 2021 actual outlays for individual programs are net of sequestration.
Source: Congressional Budget Office.


                                                                                     Sorghum Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         82.0         84.5         31.0         38.5         59.0         66.5         66.5         72.0         77.0         79.5         82.0         84.5         84.5
  ARC-CO                      17.8         15.3         68.8         61.3         40.8         33.3         33.3         27.8         22.8         20.3         17.8         15.3         15.3
  ARC-IC                       0.2          0.2          0.2          0.2          0.2          0.2          0.2          0.2          0.2          0.2          0.2          0.2          0.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                   8.8          8.8          8.8          8.8          8.8          8.8          8.8          8.8          8.8          8.8          8.8          8.8          8.8
  Planted Acres                5.9          7.3          6.2          6.2          6.2          6.2          6.2          6.2          6.2          6.1          6.1          6.1          6.1
  Harvested Acres              5.1          6.5          5.5          5.5          5.5          5.5          5.5          5.5          5.5          5.4          5.4          5.4          5.4
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Bushels per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Per Harvested Acre          73.2         69.0         69.3         69.6         69.9         70.2         70.5         70.8         71.1         71.4         71.7         72.0         72.3
  Per Planted Acre            63.2         61.4         61.6         61.5         61.9         61.9         62.4         62.6         62.9         63.0         63.1         64.1         63.9
  Payment Yield--PLC          64.0         64.0         64.0         64.0         64.0         64.0         64.0         64.0         64.0         64.0         64.0         64.0         64.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                             Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks              30           20           28           20           21           25           29           21           24           24           23           23           29
  Production                   373          448          382          381          384          384          387          388          390          384          385          391          390
  Imports                        0            0            0            0            0            0            0            0            0            0            0            0            0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply               403          468          410          401          405          409          416          409          414          408          408          414          419
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Feed and Residual             92          115          100          100          100          100          100          100          100           95           95           95           95
  Food, Seed,                    7           15           10           30           30           40           55           55           60           60           60           60           60
   Industrial
    Domestic Use                99          130          110          130          130          140          155          155          160          155          155          155          155
  Exports                      284          310          280          250          250          240          240          230          230          230          230          230          230
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                  383          440          390          380          380          380          395          385          390          385          385          385          385
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                   20           28           20           21           25           29           21           24           24           23           23           29           34
Stocks/Use (Percent)           5.2          6.4          5.1          5.5          6.6          7.6          5.3          6.2          6.2          6.0          6.0          7.5          8.8
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price                                                                                               Dollars per Bushel
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year              5.04         5.85         6.00         4.40         4.05         3.85         3.75         3.75         3.85         3.90         3.85         3.80         3.70
   Average
  Reference Price             3.95         3.95         3.95         3.95         3.95         3.95         3.95         3.95         3.95         3.95         3.95         3.95         3.95
  Loan Rate                   2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20         2.20
  Sorghum/Corn Price          1.11         1.01         1.00         0.99         0.99         0.97         0.97         0.97         0.97         0.98         0.97         0.97         0.97
   Ratio
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for sorghum runs from September 1 of the year shown through August 31 of the subsequent year.
Source: Congressional Budget Office.


                                                                                      Barley Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         76.9         84.5         75.0         72.0         82.0         82.0         79.5         77.0         79.5         79.5         77.0         79.5         77.0
  ARC-CO                      19.6         12.0         21.5         24.5         14.5         14.5         17.0         19.5         17.0         17.0         19.5         17.0         19.5
  ARC-IC                       3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5          3.5
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                   5.3          5.3          5.3          5.3          5.3          5.3          5.3          5.3          5.3          5.3          5.3          5.3          5.3
  Planted Acres                2.7          2.7          2.9          2.8          2.7          2.6          2.6          2.6          2.6          2.6          2.6          2.6          2.6
  Harvested Acres              2.2          1.9          2.4          2.3          2.3          2.2          2.2          2.2          2.2          2.2          2.2          2.2          2.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Bushels per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Per Harvested Acre          77.2         60.4         75.0         75.6         76.2         76.8         77.4         78.0         78.6         79.2         79.8         80.4         81.0
  Per Planted Acre            63.3         43.7         62.4         61.8         65.6         65.4         65.0         66.2         66.2         67.7         67.3         68.1         67.7
  Payment Yield--PLC          55.9         55.9         55.9         55.9         55.9         55.9         55.9         55.9         55.9         55.9         55.9         55.9         55.9
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                             Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks              80           71           56           81           93           94           88           81           77           73           73           67           63
  Production                   171          118          181          173          177          170          169          172          172          176          175          177          176
  Imports                        7           11            9            9            9            9            9            9            9            9            9            9            9
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Total Supply                 258          200          246          263          279          273          266          262          258          258          257          253          248
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Feed and Residual             26           20           20           25           35           35           35           35           35           35           35           35           35
  Food, Seed,                  147          115          135          135          140          140          140          140          140          140          145          145          145
   Industrial
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Domestic Use                 172          135          155          160          175          175          175          175          175          175          180          180          180
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                       14            9           10           10           10           10           10           10           10           10           10           10           10
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Total Use                    186          144          165          170          185          185          185          185          185          185          190          190          190
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                   71           56           81           93           94           88           81           77           73           73           67           63           58
Stocks/Use (Percent)          38.2         39.0         49.2         54.8         50.9         47.6         43.8         41.7         39.5         39.5         35.3         33.2         30.6
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price                                                                                               Dollars per Bushel
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year              4.75         5.25         5.60         4.95         4.65         4.55         4.60         4.55         4.55         4.55         4.55         4.55         4.55
   Average, All Barley
  Marketing-Year              3.45         3.81         4.07         3.59         3.38         3.30         3.34         3.30         3.30         3.30         3.30         3.30         3.30
   Average, Feed Barley
  Marketing-Year              4.98         5.51         5.87         5.19         4.88         4.77         4.83         4.77         4.77         4.77         4.77         4.77         4.77
   Average, Malting
   Barley
  Reference Price             4.95         4.95         4.95         4.95         4.95         4.95         4.95         4.95         4.95         4.95         4.95         4.95         4.95
  Loan Rate                   2.50         2.50         2.50         2.50         2.50         2.50         2.50         2.50         2.50         2.50         2.50         2.50         2.50
  Barley/Wheat Price          0.94         0.72         0.90         0.83         0.87         0.86         0.86         0.88         0.89         0.89         0.89         0.91         0.92
   Ratio
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for barley runs from June 1 of the year shown through May 31 of the subsequent year.
Source: Congressional Budget Office.


                                                                                       Oats Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         48.7         69.2         67.0          3.0         38.5         18.0         20.5         25.5         31.0         33.0         41.0         64.0         69.0
  ARC-CO                      50.6         30.1         32.3         96.3         60.8         81.3         78.8         73.8         68.3         66.3         58.3         35.3         30.3
  ARC-IC                       0.7          0.7          0.7          0.7          0.7          0.7          0.7          0.7          0.7          0.7          0.7          0.7          0.7
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                   2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0
  Planted Acres                3.0          2.6          2.5          2.6          2.7          2.8          2.8          2.8          2.8          2.7          2.7          2.7          2.7
  Harvested Acres              1.0          0.7          0.9          0.9          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Bushels per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Per Harvested Acre          65.1         61.3         65.0         65.3         65.6         65.9         66.2         66.5         66.8         67.1         67.4         67.7         68.0
  Per Planted Acre            22.0         15.4         23.4         22.3         24.4         23.6         23.6         23.9         23.9         24.8         24.8         25.9         26.2
  Payment Yield--PLC          50.8         50.8         50.8         50.8         50.8         50.8         50.8         50.8         50.8         50.8         50.8         50.8         50.8
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                             Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks              37           38           27           23           18           20           22           23           25           26           27           27           30
  Production                    66           40           59           58           66           66           66           67           67           67           67           70           71
  Imports                       85           77           90           90           90           90           90           90           90           90           90           90           90
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply               188          155          176          171          174          176          178          180          182          183          184          187          191
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Feed and Residual             68           45           70           70           70           70           70           70           70           70           70           70           70
  Food, Seed,                   78           80           81           81           82           82           83           83           84           84           85           85           86
   Industrial
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic Use               147          125          151          151          152          152          153          153          154          154          155          155          156
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                        3            3            2            2            2            2            2            2            2            2            2            2            2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                  150          128          153          153          154          154          155          155          156          156          157          157          158
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                   38           27           23           18           20           22           23           25           26           27           27           30           33
Stocks/Use (Percent)          25.3         21.1         15.0         11.8         13.0         14.3         14.8         16.1         16.7         17.3         17.2         19.1         20.9
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price                                                                                               Dollars per Bushel
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year              2.77         4.30         4.20         3.80         3.50         3.40         3.30         3.25         3.25         3.20         3.20         3.10         3.00
   Average
  Reference Price             2.40         2.40         2.40         2.40         2.40         2.40         2.40         2.40         2.40         2.40         2.40         2.40         2.40
  Loan Rate                   1.39         2.00         2.00         2.00         2.00         2.00         2.00         2.00         2.00         2.00         2.00         2.00         2.00
  Oats/Corn Price Ratio       0.61         0.79         0.88         0.83         0.83         0.83         0.80         0.81         0.83         0.82         0.82         0.82         0.79
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for oats runs from June 1 of the year shown through May 31 of the subsequent year.
Source: Congressional Budget Office.


                                                                                Minor Feed Grain Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Actual                                                                      Projected
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sorghum
  Marketing Assistance Loan Benefits          0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                       234            0            0            6           23           94          156          137          112          100           91          106
  Agriculture Risk Coverage                   7            1            0            0           20           43           49           53           38           17           11            9
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Sorghum                           241            1            0            6           43          137          205          190          150          117          102          115
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Barley
  Marketing Assistance Loan Benefits          0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                        56           43           36           32           50           92          107           95           96          103          103           97
  Agriculture Risk Coverage                   2            2           12            3            7            6            7            8           11           10            9           11
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Barley                             58           45           48           35           57           98          114          103          107          113          112          108
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Oats
  Marketing Assistance Loan Benefits          0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                         0            0            0            0            0            0            0            1            1            1            1            1
  Agriculture Risk Coverage                   3            1            0            0            0            1            3            4            6            4            3            3
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Oats                                3            1            0            0            0            1            3            5            7            5            4            4
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Minor Feed Grains
  Marketing Assistance Loan Benefits          0            0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                       290           43           36           38           73          186          263          233          209          204          195          204
  Agriculture Risk Coverage                  12            4           12            3           27           50           59           65           55           31           23           23
                                     ===========================================================================================================================================================
    Total Minor Feed Grains                 302           47           48           41          100          237          323          298          264          235          218          227
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                  Sunflower Seed Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         90.8         73.6         55.0         82.5         77.5         70.0         70.0         57.5         62.5         67.5         67.5         67.5         65.0
  ARC-CO                       7.5         25.6         43.8         16.3         21.3         28.8         28.8         41.3         36.3         31.3         31.3         31.3         33.8
  ARC-IC                       1.7          0.8          1.2          1.2          1.2          1.2          1.2          1.2          1.2          1.2          1.2          1.2          1.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 1.639        1.604        1.604        1.604        1.604        1.604        1.604        1.604        1.604        1.604        1.604        1.604        1.604
  Planted Acres              1.719        1.289        1.470        1.450        1.412        1.407        1.387        1.382        1.377        1.372        1.367        1.367        1.367
  Harvested Acres            1.666        1.244        1.403        1.384        1.348        1.343        1.324        1.319        1.314        1.310        1.305        1.305        1.305
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Per Harvested Acre         1,790        1,530        1,745        1,761        1,778        1,790        1,807        1,824        1,837        1,853        1,866        1,882        1,817
  Per Planted Acre           1,736        1,477        1,665        1,681        1,697        1,709        1,725        1,741        1,753        1,769        1,781        1,796        1,734
  Payment Yield--PLC         1,447        1,433        1,433        1,433        1,433        1,433        1,433        1,433        1,433        1,433        1,433        1,433        1,433
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                              Millions of Pounds
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks             194          398          245          353          425          433          436          439          443          447          450          453          463
  Production                 2,983        1,903        2,448        2,437        2,396        2,404        2,392        2,406        2,414        2,427        2,435        2,456        2,371
  Imports                      376          360          351          352          353          359          370          381          392          403          414          425          425
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             3,553        2,661        3,044        3,142        3,175        3,196        3,198        3,226        3,249        3,277        3,299        3,333        3,259
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Crush                      1,213        1,108        1,145        1,133        1,146        1,153        1,161        1,169        1,177        1,186        1,200        1,214        1,174
  Non-Oil + Seed             1,812        1,178        1,416        1,454        1,469        1,483        1,477        1,496        1,510        1,529        1,537        1,550        1,550
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic Use             3,025        2,286        2,561        2,587        2,615        2,636        2,638        2,665        2,687        2,715        2,737        2,764        2,724
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                      130          130          130          130          127          124          121          118          115          112          109          106          106
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                3,155        2,416        2,691        2,717        2,742        2,760        2,759        2,783        2,802        2,827        2,846        2,870        2,830
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                  398          245          353          425          433          436          439          443          447          450          453          463          429
Stocks/Use                    12.6         10.1         13.1         15.7         15.8         15.8         15.9         15.9         16.0         15.9         15.9         16.1         15.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price                                                                                               Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year            0.2130       0.3100       0.2829       0.2300       0.1998       0.1979       0.1979       0.1960       0.1979       0.1979       0.1979       0.1979       0.1979
   Average
  Reference Price           0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015
  Loan Rate                 0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for sunflowerseed runs from September 1 of the year shown through August 31 of the subsequent year.
Source: Congressional Budget Office.


                                                                                      Canola Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  ARC-CO                       0.9         97.0         32.0         19.5         22.0         24.5         24.5         37.0         32.0         27.0         27.0         97.0         97.0
  ARC-IC                       0.0          0.5          0.5          0.5          0.5          0.5          0.5          0.5          0.5          0.5          0.5          0.5          0.5
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 1.466        1.448        1.448        1.448        1.448        1.448        1.448        1.448        1.448        1.448        1.448        1.448        1.448
  Planted Acres              1.824        2.152        2.200        2.200        2.250        2.250        2.250        2.250        2.250        2.250        2.250        2.250        2.250
  Harvested Acres            1.788        2.089        2.123        2.123        2.171        2.171        2.171        2.171        2.171        2.171        2.171        2.171        2.171
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Per Harvested Acre         1,931        1,302        1,825        1,835        1,845        1,855        1,865        1,875        1,885        1,895        1,905        1,915        1,925
  Per Planted Acre           1,893        1,264        1,761        1,771        1,780        1,790        1,800        1,809        1,819        1,829        1,838        1,848        1,858
  Payment Yield--PLC         1,664        1,668        1,668        1,668        1,668        1,668        1,668        1,668        1,668        1,668        1,668        1,668        1,668
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                              Millions of Pounds
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks             482          473          543          667          668          669          670          673          674          674          674          675          676
  Production                 3,453        2,721        3,874        3,896        4,006        4,028        4,049        4,071        4,093        4,115        4,136        4,158        4,180
  Imports                      979          882        1,157        1,157        1,157        1,100        1,045          992          992          992          992          992          993
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             4,914        4,076        5,574        5,720        5,831        5,796        5,765        5,736        5,759        5,780        5,802        5,825        5,849
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Crush                      4,568        3,221        4,484        4,591        4,676        4,641        4,608        4,579        4,600        4,621        4,642        4,663        4,663
  Non-Oil + Seed              ^470           63          169          174          177          176          175          174          176          176          176          177          177
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic                 4,098        3,284        4,653        4,765        4,853        4,817        4,783        4,753        4,776        4,797        4,818        4,840        4,840
     Consumption
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                      343          249          254          287          309          309          309          309          309          309          309          309          309
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                4,441        3,533        4,907        5,052        5,162        5,126        5,092        5,062        5,085        5,106        5,127        5,149        5,149
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                  473          543          667          668          669          670          673          674          674          674          675          676          700
Stocks/Use (Percent)          10.7         15.4         13.6         13.2         13.0         13.1         13.2         13.3         13.2         13.2         13.2         13.1         13.6
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price                                                                                               Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year            0.1840       0.3300       0.2400       0.2243       0.1950       0.1930       0.1920       0.1910       0.1910       0.1910       0.1910       0.1910       0.1910
   Average
  Reference Price           0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015
  Loan Rate                 0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for canola runs from June 1 of the year shown through May 31 of the subsequent year.
Source: Congressional Budget Office.


                                                                                     Flaxseed Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         95.7          2.5         90.0         87.5         82.5         80.0         80.0         67.5         75.0         77.5         77.5          2.5          2.5
  ARC-CO                       3.9         96.7          9.2         11.7         16.7         19.2         19.2         31.7         24.2         21.7         21.7         96.7         96.7
  ARC-IC                       0.3          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 0.230        0.227        0.227        0.227        0.227        0.227        0.227        0.227        0.227        0.227        0.227        0.227        0.227
  Planted                    0.305        0.325        0.400        0.400        0.390        0.390        0.390        0.390        0.390        0.390        0.400        0.400        0.400
  Harvested                  0.296        0.268        0.368        0.368        0.359        0.359        0.359        0.359        0.359        0.359        0.368        0.368        0.368
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Bushels per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested         19.3         10.0         20.6         20.6         20.8         21.0         21.2         21.2         21.2         21.3         21.6         21.8         22.0
   Acre
  Yield per Planted           19.4         19.5         19.6         19.6         19.7         19.8         19.9         20.0         20.0         20.1         20.2         20.2         20.2
   Acre
  Payment Yield--PLC          19.4         19.4         19.4         19.4         19.4         19.4         19.4         19.4         19.4         19.4         19.4         19.4         19.4
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                             Millions of Bushels
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           1.263        2.005        0.461        2.538        3.699        3.817        3.582        3.038        2.536        2.122        1.715        1.599        1.642
  Production                 5.706        2.680        7.581        7.581        7.463        7.535        7.607        7.607        7.607        7.642        7.949        8.022        8.096
  Imports                    4.728        4.500        4.542        4.626        4.710        4.794        4.873        4.957        5.041        5.125        5.209        5.295        5.295
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply            11.697        9.185       12.584       14.745       15.872       16.146       16.061       15.602       15.183       14.890       14.873       14.916       15.033
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Crush                      8.000        7.000        8.000        9.000       10.000       10.500       10.950       11.000       11.200       11.300       11.400       11.500       11.600
  Seed                       0.316        0.324        0.324        0.316        0.316        0.316        0.316        0.316        0.316        0.324        0.324        0.324        0.316
  Residual                   0.192        0.300        0.621        0.630        0.639        0.648        0.657        0.650        0.645        0.650        0.650        0.650        0.650
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic Use             8.508        7.624        8.945        9.946       10.955       11.464       11.923       11.966       12.161       12.274       12.374       12.474       12.566
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                    1.184        1.100        1.100        1.100        1.100        1.100        1.100        1.100        0.900        0.900        0.900        0.800        0.800
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                9.692        8.724       10.045       11.046       12.055       12.564       13.023       13.066       13.061       13.174       13.274       13.274       13.366
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                2.005        0.461        2.538        3.699        3.817        3.582        3.038        2.536        2.122        1.715        1.599        1.642        1.667
Stocks/Use (Percent)          20.7          5.3         25.3         33.5         31.7         28.5         23.3         19.4         16.2         13.0         12.0         12.4         12.5
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Bushel
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year             11.10        27.00        16.25        11.11        10.44        10.34        10.35        10.26        10.39        10.35        10.31         9.50        10.38
   Average
  Reference Price            11.28        11.28        11.28        11.28        11.28        11.28        11.28        11.28        11.28        11.28        11.28        11.28        11.28
  Loan Rate                   5.65         5.65         5.65         5.65         5.65         5.65         5.65         5.65         5.65         5.65         5.65         5.65         5.65
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for flaxseed runs from June 1 of the year shown to May 31 of the following year. A bushel of flaxseed weighs 56 pounds.
Source: Congressional Budget Office.


                                                                                    Safflower Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         88.4          2.5         25.0         70.0         82.5         82.5         80.0         67.5         70.0         70.0         70.0          2.5          2.5
  ARC-CO                      11.4         94.3         71.8         26.8         14.3         14.3         16.8         29.3         26.8         26.8         26.8         94.3         94.3
  ARC-IC                       0.2          3.2          3.2          3.2          3.2          3.2          3.2          3.2          3.2          3.2          3.2          3.2          3.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 0.083        0.083        0.083        0.083        0.083        0.083        0.083        0.083        0.083        0.083        0.083        0.083        0.083
  Planted                    0.138        0.152        0.143        0.142        0.141        0.140        0.139        0.138        0.137        0.136        0.135        0.134        0.134
  Harvested                  0.128        0.135        0.136        0.135        0.134        0.133        0.132        0.131        0.130        0.129        0.129        0.128        0.128
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested        1,185        1,001        1,350        1,350        1,350        1,350        1,350        1,350        1,350        1,350        1,350        1,350        1,351
   Acre
  Yield per Planted            551          445          643          643          643          643          643          643          643          643          643          643          643
   Acre
  Payment Yield--PLC           986        1,007        1,007        1,007        1,007        1,007        1,007        1,007        1,007        1,007        1,007        1,007        1,007
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                              Millions of Pounds
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks             3.8          6.7          3.0          6.5          8.9         11.1         13.4         15.5         17.7         19.8         21.9         23.9         26.1
  Production                  76.1         67.6         91.9         91.2         90.6         90.0         89.3         88.7         88.0         87.4         86.8         86.1         86.2
  Imports                      3.1          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply              83.0         75.3         95.9         98.8        100.5        102.1        103.7        105.2        106.7        108.2        109.6        111.1        113.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Crush                       66.9         62.9         79.3         79.9         79.4         78.8         78.3         77.7         77.1         76.6         76.0         75.4         78.1
  Seed                         3.4          3.6          3.6          3.6          3.6          3.5          3.5          3.5          3.5          3.4          3.4          3.4          3.4
  Residual                     3.7          3.7          4.5          4.4          4.4          4.4          4.4          4.3          4.3          4.3          4.3          4.2          4.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Domestic Use        74.0         70.2         87.4         87.9         87.4         86.7         86.2         85.5         84.9         84.3         83.7         83.0         85.7
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                      2.3          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0          2.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                 76.3         72.2         89.4         89.9         89.4         88.7         88.2         87.5         86.9         86.3         85.7         85.0         87.7
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                  6.7          3.0          6.5          8.9         11.1         13.4         15.5         17.7         19.8         21.9         23.9         26.1         25.5
Stocks/Use (Percent)           8.7          4.2          7.3          9.9         12.4         15.1         17.6         20.2         22.8         25.4         27.9         30.6         29.1
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year            0.2150       0.3100       0.2600       0.2500       0.2300       0.2100       0.2079       0.2062       0.2079       0.2079       0.2079       0.2079       0.2079
   Average
  Reference Price           0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015
  Loan Rate                 0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for safflower runs from September 1 of the year shown to August 31 of the following year.
Source: Congressional Budget Office.


                                                                                   Mustard Seed Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         88.5          5.0         65.0         52.5         55.0         40.0         37.5         25.0         27.5         25.0         30.0          2.5          2.5
  ARC-CO                      11.5         89.2         29.2         41.7         39.2         54.2         56.7         69.2         66.7         69.2         64.2         91.7         91.7
  ARC-IC                       0.0          5.8          5.8          5.8          5.8          5.8          5.8          5.8          5.8          5.8          5.8          5.8          5.8
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 0.025        0.024        0.024        0.024        0.024        0.024        0.024        0.024        0.024        0.024        0.024        0.024        0.024
  Planted                    0.097        0.103        0.099        0.099        0.099        0.099        0.100        0.100        0.100        0.100        0.101        0.101        0.101
  Harvested                  0.091        0.089        0.091        0.091        0.091        0.091        0.092        0.092        0.092        0.092        0.092        0.093        0.093
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested          895          491          800          802          804          806          808          810          812          814          816          818          820
   Acre
  Yield per Planted            843          426          736          738          740          742          743          745          747          749          751          753          754
   Acre
  Payment Yield--PLC           685          683          683          683          683          683          683          683          683          683          683          683          683
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                              Millions of Pounds
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks             7.2          7.5          1.1          3.4          6.2          9.1         12.3         15.6         19.2         22.9         26.9         31.0         35.3
  Production                  81.8         43.8         72.5         72.9         73.2         73.6         74.0         74.3         74.7         75.1         75.4         75.8         76.0
  Imports                    129.7        140.0        140.5        141.0        141.5        142.0        142.5        143.0        143.5        144.0        144.5        145.0        145.5
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             218.7        191.3        214.1        217.2        220.9        224.7        228.7        233.0        237.4        242.0        246.8        251.8        256.8
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Crush                      172.1        168.0        173.7        173.9        174.3        174.7        175.1        175.5        175.8        176.2        176.6        177.0        177.4
  Seed                        10.9          1.5         10.9         10.9         11.0         11.0         11.0         11.1         11.1         11.1         11.2         11.2         11.2
  Residual                     0.7          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8          0.8
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic Use             183.8        170.3        185.4        185.6        186.0        186.4        186.9        187.3        187.7        188.1        188.6        189.0        189.4
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                     27.5         20.0         25.3         25.5         25.8         26.0         26.3         26.5         26.8         27.0         27.3         27.5         27.8
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                211.2        190.3        210.7        211.1        211.8        212.4        213.1        213.8        214.5        215.1        215.8        216.5        217.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                  7.5          1.1          3.4          6.2          9.1         12.3         15.6         19.2         22.9         26.9         31.0         35.3         39.7
Stocks/Use (Percent)           3.5          0.6          1.6          2.9          4.3          5.8          7.3          9.0         10.7         12.5         14.4         16.3         18.3
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year            0.2670       0.3760       0.3310       0.3230       0.3000       0.2965       0.2995       0.3010       0.3020       0.3050       0.3065       0.3085       0.3100
   Average
  Reference Price           0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015
  Loan Rate                 0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for mustard seed runs from September 1 of the year shown through August 31 of the subsequent year.
Source: Congressional Budget Office.


                                                                               Rapeseed (Inedible) Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Participation                                                                                    Percentage of Base Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  PLC                         95.7         20.0         50.0         67.5         67.5         65.0         62.5         50.0         55.0         52.5         55.0          2.5          2.5
  ARC-CO                       4.3         78.1         48.1         30.6         30.6         33.1         35.6         48.1         43.1         45.6         43.1         95.6         95.6
  ARC-IC                       0.0          1.9          1.9          1.9          1.9          1.9          1.9          1.9          1.9          1.9          1.9          1.9          1.9
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Millions of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 0.002        0.002        0.002        0.002        0.002        0.002        0.002        0.002        0.002        0.002        0.002        0.002        0.002
  Planted                    0.011        0.014        0.016        0.016        0.016        0.016        0.016        0.016        0.016        0.016        0.016        0.016        0.016
  Harvested                  0.010        0.013        0.015        0.015        0.015        0.015        0.015        0.015        0.015        0.015        0.015        0.015        0.015
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested        1,971        1,809        1,991        2,001        2,011        2,021        2,031        2,041        2,051        2,061        2,071        2,081        2,091
   Acre
  Yield per Planted          1,778        1,582        1,914        1,924        1,933        1,943        1,952        1,962        1,972        1,981        1,991        2,000        2,010
   Acre
  Payment Yield--PLC         1,433        1,435        1,435        1,435        1,435        1,435        1,435        1,435        1,435        1,435        1,435        1,435        1,435
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                              Millions of Pounds
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           1.191        2.438        0.717        1.869        1.868        1.910        1.954        1.998        2.043        2.088        2.133        2.179        2.516
  Production                19.910       22.616       29.666       29.815       29.964       30.113       30.262       30.411       30.560       30.709       30.858       31.007       31.156
  Imports                    0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply            21.101       25.054       30.382       31.684       31.832       32.023       32.216       32.409       32.603       32.797       32.991       33.186       33.672
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Crush                     17.861       23.489       27.338       28.664       28.767       28.908       29.052       29.195       29.339       29.483       29.626       29.770       29.770
  Seed                       0.695        0.733        1.060        1.036        1.039        1.045        1.050        1.055        1.060        1.065        1.070        0.784        0.784
  Residual                   0.107        0.116        0.116        0.116        0.116        0.116        0.116        0.116        0.116        0.116        0.116        0.116        0.000
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Domestic Use            18.663       24.338       28.514       29.816       29.922       30.069       30.218       30.366       30.515       30.664       30.812       30.670       30.554
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                        0            0            0            0            0            0            0            0            0            0            0            0            0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use               18.663       24.338       28.514       29.816       29.922       30.069       30.218       30.366       30.515       30.664       30.812       30.670       30.554
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                2.438        0.717        1.869        1.868        1.910        1.954        1.998        2.043        2.088        2.133        2.179        2.516        3.118
Stocks/Use (Percent)          13.1          2.9          6.6          6.3          6.4          6.5          6.6          6.7          6.8          7.0          7.1          8.2         10.2
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year            0.1890       0.2400       0.2600       0.2025       0.2050       0.2070       0.2090       0.2120       0.2130       0.2160       0.2175       0.2200       0.2220
   Average
  Reference Price           0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015       0.2015
  Loan Rate                 0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009       0.1009
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for rapeseed runs from June 1 of the year shown to May 31 of the following year.
Source: Congressional Budget Office.


                                                                                  Minor Oilseed Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Estimated                                                                     Projected
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sunflower Seed
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                          10          0            0            1           17           34           36           37           24           23           25           25
  Agriculture Risk Coverage                     2          0            0            1            1            4            8            8           14           10            7            7
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Sunflower Seed                       11          0            0            2           18           37           44           45           38           33           33           32
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Canola
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                          91         34            0            3           14           33           37           42           27           29           31           30
  Agriculture Risk Coverage                     0          0            0            1            1            4            6            6           12            8            6            6
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Canola                               91         34            0            4           16           37           43           48           39           37           37           36
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Flaxseed
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                           6          1            0            1            4            5            6            6            4            4            4            4
  Agriculture Risk Coverage                     0          0            0            0            0            0            0            1            1            1            1            1
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Total Flaxseed                                6          1            0            1            5            6            6            7            5            5            5            5
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Safflower
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                           0          0            0            0            0            1            1            1            1            1            1            1
  Agriculture Risk Coverage                     0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Safflower                             0          0            0            0            0            1            1            1            1            1            1            1
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Mustardseed
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                           0          0            0            0            0            0            0            0            0            0            0            0
  Agriculture Risk Coverage                     0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Mustardseed                           0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Rapeseed (Inedible)
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                           0          0            0            0            0            0            0            0            0            0            0            0
  Agriculture Risk Coverage                     0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Rapeseed                              0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Minor Oilseeds
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                         107         34            0            5           36           73           80           86           57           57           61           61
  Agriculture Risk Coverage                     2          0            1            2            2            8           14           15           27           19           14           13
                                     ===========================================================================================================================================================
    Total Minor Oilseeds                      109         35            1            6           38           81           94          101           84           76           75           74
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                     ELS Cotton Supply & Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Marketing Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage and Yield                                                                                   Thousands of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Planted                      202          127          176          220          220          225          225          225          225          220          220          225          225
  Harvested                    194          124          174          217          217          222          222          222          222          217          217          222          222
  Harvested Yield (Lbs./     1,352        1,423        1,426        1,433        1,440        1,447        1,447        1,455        1,462        1,469        1,477        1,484        1,484
   Acre)
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                          Thousands of 480 lb Bales
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           381.2        129.2         57.8         10.0         29.4         36.9         36.9         42.5         41.3         43.4         33.6         27.1         39.1
  Production                 547.0        367.6        516.4        648.7        651.9        670.1        670.1        673.4        676.8        665.0        668.4        687.0        687.0
  Imports                      1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          1.0          2.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             929.2        497.8        575.2        659.7        682.3        708.0        708.0        716.9        719.1        709.4        703.0        715.1        728.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Mill Use                    15.0         15.0         15.2         15.3         15.4         15.5         15.5         15.6         15.7         15.8         15.9         16.0         16.0
  Exports                    785.0        425.0        550.0        615.0        630.0        650.0        650.0        660.0        660.0        660.0        660.0        660.0        660.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                800.0        440.0        565.2        630.3        645.4        665.5        665.5        675.6        675.7        675.8        675.9        676.0        676.0
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Unaccounted                    0            0            0            0            0            0            0            0            0            0            0            0            0
Ending Stocks                129.2         57.8         10.0         29.4         36.9         42.5         42.5         41.3         43.4         33.6         27.1         39.1         52.0
Stocks/Use (Percent)          16.2         13.1          1.8          4.7          5.7          6.4          6.4          6.1          6.4          5.0          4.0          5.8          7.7
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                                              Dollars per Pound
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year            1.1900       2.3660       2.1937       1.4734       1.4183       1.4244       1.4244       1.4236       1.4216       1.4184       1.4191       1.4249       1.4249
   Average
  Loan Rate                 0.9500       0.9500       0.9500       0.9500       0.9500       0.9500       0.9500       0.9500       0.9500       0.9500       0.9500       0.9500       1.9500
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for ELS cotton runs from August 1 of the year shown to July 31 of the following year.
Source: Congressional Budget Office.


                                                                                   ELS Cotton Program Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loan Activity                                                                                    Millions of 480 lb Bales
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Loans Outstanding               0.173      0.034        0.028        0.032        0.032        0.032        0.032        0.032        0.032        0.032        0.032        0.032
  Loans Made                                0.292      0.184        0.258        0.324        0.326        0.326        0.335        0.337        0.338        0.333        0.334        0.343
  Cash Repayments                           0.431      0.190        0.254        0.324        0.326        0.326        0.335        0.337        0.338        0.333        0.334        0.343
  Noncash Repayments                            0          0            0            0            0            0            0            0            0            0            0            0
  Transfers, Writeoffs                          0          0            0            0            0            0            0            0            0            0            0            0
  Forfeitures                                   0          0            0            0            0            0            0            0            0            0            0            0
  Ending Loans Outstanding                  0.034      0.028        0.032        0.032        0.032        0.032        0.032        0.032        0.032        0.032        0.032        0.032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Net Lending                                                                                        Millions of Dollars
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
  Loans Made                                  136         84          118          148          149          149          153          154          154          152          152          157
  Loans Repaid                                202         87          116          148          149          149          153          154          154          152          152          157
  Net Loans                                    16         ^3            2            0            0            0            0            0            0            0            0            0
  CCC Storage, Transportation.                  0          0            0            0            0            0            0            0            0            0            0            0
   Handling
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                   16         ^3            2            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Cash Payments
  Competitiveness Payments                      4          0            1            1            3            3            3            3            3            3            3            3
Other Costs
  Purchases                                     0          0            0            0            0            0            0            0            0            0            0            0
  Sales                                         0          0            0            0            0            0            0            0            0            0            0            0
  Other                                         0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Subtotal                                    0          0            0            0            0            0            0            0            0            0            0            0
                                     ===========================================================================================================================================================
      Total Outlays                             4          0            1            1            3            3            3            3            3            3            3            3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.


                                                                                  Dry Field Pea Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      June-May Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Thousands of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                   440          440          440          440          440          440          440          440          440          440          440          440          440
  Total Planted Acres          998          977          900          920          940          950          965          980          995        1,010        1,025        1,040        1,055
  Total Harvested Acres        970          834          846          865          884          893          907          921          935          949          964          978          992
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested        1,972        1,025        2,265        2,281        2,297        2,313        2,329        2,346        2,362        2,379        2,395        2,412        2,429
   Acre
  Yield per Planted          2,167          875        2,129        2,144        2,159        2,174        2,190        2,205        2,220        2,236        2,252        2,267        2,283
   Acre
  Payment Yield--PLC         1,840        1,840        1,840        1,840        1,840        1,840        1,840        1,840        1,840        1,840        1,840        1,840        1,840
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                          Thousands of Hundredweight
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           6,533        3,274        4,401        4,180        4,212        4,497        4,834        4,825        4,968        5,263        5,210        5,308        5,556
  Production                21,629        8,549       19,165       19,728       20,298       20,658       21,131       21,609       22,094       22,584       23,080       23,581       24,089
  Imports                    2,350        4,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply            30,512       24,953       25,888       26,230       26,831       27,476       28,287       28,756       29,384       30,169       30,611       31,211       31,967
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Seed Use                   1,518        1,530        1,386        1,417        1,448        1,463        1,486        1,509        1,532        1,555        1,579        1,602        1,625
  Domestic and Residual     14,000       13,000       14,000       14,280       14,566       14,857       15,154       15,457       15,766       16,082       16,403       16,731       17,066
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Domestic Use      15,518       14,530       15,386       15,697       16,013       16,320       16,640       16,966       17,299       17,637       17,982       18,333       18,691
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                   11,152        7,200        7,500        7,500        7,500        7,500        8,000        8,000        8,000        8,500        8,500        8,500        9,000
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use               26,670       21,730       22,886       23,197       23,513       23,820       24,640       24,966       25,299       26,137       26,482       26,833       27,691
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Unaccounted                    0            0            0            0            0            0            0            0            0            0            0            0            0
Ending Stocks                3,842        3,223        3,002        3,033        3,318        3,656        3,647        3,790        4,085        4,032        4,130        4,378        4,276
Stocks/Use (Percent)          14.4         14.8         13.1         13.1         14.1         15.3         14.8         15.2         16.1         15.4         15.6         16.3         15.4
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                               Dollars per Hundredweight (Marketing-year basis)
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year              9.84         9.50        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00
   Average
  Loan Rate                   6.15         6.15         6.15         6.15         6.15         6.15         6.15         6.15         6.15         6.15         6.15         6.15         6.15
  Reference Price            11.00        11.00        11.00        11.00        11.00        11.00        12.00        13.00        13.00        14.00        14.00        14.00        14.00
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for dry field peas runs from July 1 of the year shown to June 30 of the following year. Ending stocks are as of June 1, as reported by USDA.
Source: Congressional Budget Office.


                                                                                      Lentil Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      June-May Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                             Thousands of Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres (Total ARC/       286          286          286          286          286          286          286          286          286          286          286          286          286
   PLC)
  Total Planted Acres          523          708          650          675          650          650          675          650          650          650          650          650          650
  Total Harvested Acres        510          549          590          612          590          590          612          590          590          590          590          590          590
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested        1,451          606          610          615          619          623          628          632          636          641          645          650          654
   Acre
  Yield per Planted          1,415          470          554          557          561          565          569          573          577          581          585          589          593
   Acre
  Payment Yield--PLC         1,212        1,212        1,212        1,212        1,212        1,212        1,212        1,212        1,212        1,212        1,212        1,212        1,212
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                          Thousands of Hundredweight
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           1,826        1,639        1,826        1,778        1,893        1,844        1,820        1,913        1,888        1,838        1,815        1,817        1,845
  Production                 7,398        3,327        3,598        3,762        3,648        3,674        3,842        3,725        3,751        3,778        3,804        3,831        3,856
  Imports                    1,498        1,800        1,600        1,600        1,600        1,600        1,600        1,600        1,600        1,600        1,600        1,600        1,600
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply            10,722        6,766        7,024        7,140        7,141        7,118        7,262        7,238        7,239        7,216        7,219        7,248        7,301
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Food                       1,200        1,200        1,250        1,250        1,300        1,300        1,350        1,350        1,400        1,400        1,400        1,400        1,400
  Seed                         500          390          390          390          389          390          390          390          390          390          390          390          390
  Feed and Residual            533          250          106          107          108          108          109          110          111          111          112          113          113
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Domestic Use       2,233        1,840        1,746        1,747        1,797        1,798        1,849        1,850        1,901        1,901        1,902        1,903        1,903
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Exports                    6,850        3,100        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500        3,500
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                9,083        4,940        5,246        5,247        5,297        5,298        5,349        5,350        5,401        5,401        5,402        5,403        5,404
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Unaccounted                    0            0            0            0            0            0            0            0            0            0            0            0            0
Ending Stocks                1,639        1,826        1,778        1,893        1,844        1,820        1,913        1,888        1,838        1,815        1,817        1,845        1,898
Stocks/Use (Percent)          18.0         37.0         33.9         36.1         34.8         34.4         35.8         35.3         34.0         33.6         33.6         34.1         35.1
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                               Dollars per Hundredweight (Marketing-year basis)
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year             18.20        18.00        19.00        18.50        19.00        19.50        19.00        19.50        20.00        20.00        20.00        20.00        20.00
   Average
  Loan Rate                  13.00        13.00        13.00        13.00        13.00        13.00        13.00        13.00        13.00        13.00        13.00        13.00        13.00
  Reference Price            19.97        19.97        19.97        19.97        19.97        19.97        19.97        19.97        19.97        19.97        19.97        19.97        19.97
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for lentils runs from July 1 of the year shown to June 30 of the following year. Ending stocks are as of June 1, as reported by USDA.
Source: Congressional Budget Office.


                                                                                  Large Chickpea Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      June-May Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                                   Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                 82,000       82,000       82,000       82,000       82,000       82,000       82,000       82,000       82,000       82,000       82,000       82,000       82,000
  Total Planted Acres       212,400      309,200      320,000      320,000      330,000      340,000      350,000      360,000      370,000      380,000      387,600      395,352      403,259
  Total Harvested Acres     209,800      297,500      304,000      304,000      313,500      323,000      332,500      342,000      351,500      361,000      368,220      375,584      383,096
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested         1,619          826        1,582        1,590        1,598        1,606        1,614        1,622        1,630        1,638        1,646        1,654        1,662
   Acre
  Yield per Planted           1,599          795        1,503        1,511        1,518        1,526        1,533        1,541        1,548        1,556        1,564        1,571        1,579
   Acre
  Payment Yield--PLC          1,412        1,412        1,412        1,412        1,412        1,412        1,412        1,412        1,412        1,412        1,412        1,412        1,412
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                          Thousands of Hundredweight
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks            2,490        1,605          662        1,218        1,779        1,840        1,888        1,924        1,949        1,963        1,970        1,977        1,974
  Production                  3,396        2,457        4,809        4,834        5,010        5,187        5,367        5,547        5,729        5,913        6,061        6,212        6,367
  Imports                       691          300          525          529          533          537          541          545          549          553          557          561          565
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply              6,577        4,362        5,996        6,581        7,322        7,564        7,796        8,016        8,227        8,429        8,588        8,750        8,906
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Domestic & Residual         3,100        1,350        1,830        1,840        1,900        1,970        2,040        2,110        2,180        2,250        2,300        2,360        2,420
  Seed                          323          350          448          462          476          490          504          518          532          543          553          565          576
  Exports                     2,612        2,000        2,500        2,500        3,106        3,216        3,328        3,439        3,552        3,666        3,758        3,851        3,948
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                 6,035        3,700        4,778        4,802        5,482        5,676        5,872        6,067        6,264        6,459        6,611        6,776        6,944
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                   542          662        1,218        1,779        1,840        1,888        1,924        1,949        1,963        1,970        1,977        1,974        1,962
Stocks/Use (Percent)            9.0         17.9         25.5         37.0         33.6         33.3         32.8         32.1         31.3         30.5         29.9         29.1         28.3
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                               Dollars per Hundredweight (Marketing-year basis)
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year              23.30        25.00        22.00        22.00        22.00        22.00        22.00        22.00        22.00        22.00        22.00        22.00        22.00
   Average
  Loan Rate                   14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00        14.00
  Reference Price             21.54        21.54        21.54        21.54        21.54        21.54        21.54        21.54        21.54        21.54        21.54        21.54        21.54
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for large chickpeas runs from September 1 of the year shown to August 31 of the following year. Ending stocks are as of June 1, as reported by USDA.
Source: Congressional Budget Office.


                                                                                  Small Chickpea Supply and Use
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      June-May Year
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             2020         2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            Actual                                                                             Projected
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage                                                                                                   Acres
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Base Acres                22,000       22,000       22,000       22,000       22,000       22,000       22,000       22,000       22,000       22,000       22,000       22,000       22,000
  Total Planted Acres       41,700       59,300       61,079       62,911       64,798       66,742       68,744       70,806       72,930       75,118       77,372       79,693       82,084
  Total Harvested Acres     41,000       53,500       59,552       61,338       63,178       65,073       67,025       69,036       71,107       73,240       75,438       77,701       80,032
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Yield                                                                                                Pounds per Acre
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Yield per Harvested        1,685          755        1,600        1,611        1,622        1,633        1,644        1,656        1,668        1,680        1,692        1,704        1,716
   Acre
  Yield per Planted          1,657          681        1,560        1,570        1,582        1,593        1,603        1,614        1,626        1,637        1,649        1,661        1,673
   Acre
  Payment Yield--PLC         1,438        1,438        1,438        1,438        1,438        1,438        1,438        1,438        1,438        1,438        1,438        1,438        1,438
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supply                                                                                          Thousands of Hundredweight
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Beginning Stocks           1,399          691          280          275          276          288          286          296          320          335          366          416          437
  Production                   691          404          953          988        1,025        1,063        1,102        1,143        1,186        1,230        1,276        1,324        1,373
  Imports                      691          800          700          700          700          700          700          700          700          700          700          700          700
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Supply             2,781        1,895        1,933        1,963        2,001        2,051        2,088        2,139        2,206        2,265        2,342        2,440        2,510
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use
  Domestic and Residual      1,573        1,257        1,298        1,325        1,350        1,375        1,400        1,425        1,450        1,475        1,500        1,525        1,550
  Seed                          56           58           60           62           63           65           67           69           71           74           76           78           80
  Exports                      461          300          300          300          300          325          325          325          350          350          350          400          400
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Use                2,090        1,615        1,658        1,687        1,713        1,765        1,792        1,819        1,871        1,899        1,926        2,003        2,030
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Stocks                  691          280          275          276          288          286          296          320          335          366          416          437          480
Stocks/Use (Percent)          33.1         17.3         16.6         16.4         16.8         16.2         16.5         17.6         17.9         19.3         21.6         21.8         23.6
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Prices                                                                               Dollars per Hundredweight (Marketing-year basis)
                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Marketing-Year             20.00        20.00        22.00        23.00        24.00        24.00        24.00        24.00        24.00        24.00        24.00        24.00        24.00
   Average
  Loan Rate                  10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00        10.00
  Reference Price            19.04        19.04        19.04        19.04        19.04        19.04        19.04        19.04        19.04        19.04        19.04        19.04        19.04
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The marketing year for small chickpeas runs from September 1 of the year shown to August 31 of the following year. Ending stocks are as of June 1, as reported by USDA.
Source: Congressional Budget Office.


                                                                                       Pulse Crop Outlays
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Fiscal Year
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2021         2022         2023         2024         2025         2026         2027         2028         2029         2030         2031         2032
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Estimated                                                                     Projected
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dry Field Peas
  Marketing Assistance Loan Benefits            0          3            3            0            0            2            2            2            1            0            0            0
  Price Loss Coverage                           8          7            0            0            0            0            0            0            0            0            0            0
  Agriculture Risk Coverage                     0          0            9           10            7            7            7            6            6            5            5            5
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Dry Field Peas                        8         10           12           10            7            9            9            8            7            5            5            5
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Lentils
  Marketing Assistance Loan Benefits            2          1            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                          16         11           15           19           22            0            0            0            0            3           17            7
  Agriculture Risk Coverage                     0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Lentils                              18         12           15           19           22            0            0            0            0            3           17            7
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Large Chickpeas
  Marketing Assistance Loan Benefits            0          0            0            0            0            0            0            0            0            0            0            0
  Price Loss Coverage                           5          1            1            1            1            1            1            1            1            1            1            0
  Agriculture Risk Coverage                     0          0            0            0            0            4            5            5            4            3            3            5
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Large Chickpeas                       6          1            1            1            1            5            6            6            5            4            4            5
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Small Chickpeas
  Marketing Assistance Loan Benefits            6          6            6            7            0            0            0            0            0            6            2            1
  Price Loss Coverage                           0          1            0            0            0            0            0            0            0            0            0            0
  Agriculture Risk Coverage                     0          0            0            0            0            0            0            0            0            0            0            0
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Small Chickpeas                       6          7            6            7            0            0            0            0            0            6            2            1
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Pulse Crops
  Marketing Assistance Loan Benefits            8         10            9            7            0            2            2            2            1            6            2            1
  Price Loss Coverage                          29         20           16           20           23            1            1            1            1            4           18            7
  Agriculture Risk Coverage                     0          0            9           10            7           11           12           11           10            8            8           10
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Pulse Crops                          37         30           34           38           31           14           15           14           12           19           29           19
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.

                                 ______
                                 
Supplementary Material Submitted by Joseph P. Janzen, Ph.D., Assistant 
     Professor, Agricultural and Consumer Economics, Department of 
 Agricultural and Consumer Economics, University of Illinois at Urbana-
                               Champaign
Insert
          Mr. Thompson. Yes, now, I am going to tee this one up and 
        would love to follow up individually with you just because all 
        the time remaining. I have been hearing a lot about--and I want 
        to kind of look at the economic impact on commodity prices, but 
        it is a total curveball. It has to do with solar fields being 
        on fertile farmlands. And I think some of our other Members of 
        the Committee are hearing about this as well. That is putting 
        out policies that--policies have impact, right? I am recently 
        hearing a lot of discussion and concern that government policy 
        is incentivizing placement of solar farms on fertile farm, not 
        marginal, but fertile farm land driving up the competition for 
        leasing acreage, and that is really important for our young and 
        beginning farmers. And so I would love to follow up with you, 
        any thoughts you might have in writing or in person, if this is 
        or could be a significant input cost variable going forward, 
        just cost of acreage.

    There is no currently available estimate of the impact of existing 
or proposed utility-scale solar installations on the price of 
agricultural land. Similarly, the degree to which government policies 
have incentivized utility-scale solar installations is not known with 
precision. Both effects are likely to vary considerably across states 
since policy incentives, farmland values, the availability of non-
agricultural land, and solar power output vary considerably across 
space. Many of these parameters also vary across time. For instance, a 
recent study \1\ * from the Lawrence Berkeley Laboratory suggests the 
land requirements per unit of power generated have fallen considerably 
over time. Finally, policy incentives are numerous and complex \2\ so 
estimating their impact on land values is difficult.
---------------------------------------------------------------------------
    \1\ M. Bolinger and G. Bolinger, ``Land Requirements for Utility-
Scale PV: An Empirical Update on Power and Energy Density,''  in IEEE 
Journal of Photovoltaics, vol. 12, no. 2, pp. 589-594, March 2022, doi: 
10.1109/JPHOTOV.2021.3136805.
    * Editor's note: footnotes annotated with  are retained in 
Committee file.
    \2\ Department of Energy Office of Energy Efficiency and Renewable 
Energy, ``Renewable Energy: Utility-Scale Policies and Programs'', 
https://www.energy.gov/eere/slsc/renewable-energy-utility-scale-
policies-and-programs.
---------------------------------------------------------------------------
    Even assuming government incentives are responsible for all solar 
installations and that all solar installations occur on farmland, the 
impact of existing and propose solar installations on farmland values 
is likely to be small because the number of agricultural land acres 
possibly impacted by conversion is small. By one estimate,\3\ the 
proportion of land in existing and proposed solar projects in the 
average county in the U.S. Midwest is 0.005% of the quantity of 
agricultural land.
---------------------------------------------------------------------------
    \3\ Wyatt, J., and M. Kristian, ``The True Land Footprint of Solar 
Energy,''  September 2021, https://betterenergy.org/blog/the-true-
land-footprint-of-solar-energy/.
---------------------------------------------------------------------------
    That said, more research is needed to answer the specific question 
proposed by the Representative. The impact of farmland conversion to 
alternative commercial and residential uses more generally is thought 
to be significant,\4\ although the impact of any one specific type of 
conversion (e.g., for utility-scale solar) is likely to be smaller.
---------------------------------------------------------------------------
    \4\  Kuethe, T.H., J. Ifft, and M. Morehart. 2011. ``The Influence 
of Urban Areas on Farmland Values''. Choices. Quarter 2. Available 
online: http://choicesmagazine.org/choices-magazine/theme-articles/
farmland-values/the-influence-of-urban-areas-on-farmland-values.
---------------------------------------------------------------------------
                                 ______
                                 
    Supplementary Material Submitted by Robert H. Craven, Associate 
Director and Extension Professor, Center for Farm Financial Management, 
        Department of Applied Economics, University of Minnesota
Insert
          Mr. Thompson. Yes, now, I am going to tee this one up and 
        would love to follow up individually with you just because all 
        the time remaining. I have been hearing a lot about--and I want 
        to kind of look at the economic impact on commodity prices, but 
        it is a total curveball. It has to do with solar fields being 
        on fertile farmlands. And I think some of our other Members of 
        the Committee are hearing about this as well. That is putting 
        out policies that--policies have impact, right? I am recently 
        hearing a lot of discussion and concern that government policy 
        is incentivizing placement of solar farms on fertile farm, not 
        marginal, but fertile farm land driving up the competition for 
        leasing acreage, and that is really important for our young and 
        beginning farmers. And so I would love to follow up with you, 
        any thoughts you might have in writing or in person, if this is 
        or could be a significant input cost variable going forward, 
        just cost of acreage.

    Congressman Thompson,

    Thanks for the question regarding ``solar farms.'' We don't have 
any data in our FINBIN database that directly address your question. My 
observation in MN and surrounding states is that the development of 
solar farms has been on relatively marginal farm land. I do not expect 
solar farms to have an impact on the availability or price of quality 
farm land.

Robert H. Craven,
University of Minnesota.
                                 ______
                                 
 Supplementary Material Submitted by Joe L. Outlaw, Ph.D., Professor, 
  Extension Economist, and Co-Director, Agricultural and Food Policy 
   Center, Department of Agricultural Economics, Texas A&M University
Insert 1
          Mr. Thompson. Yes, now, I am going to tee this one up and 
        would love to follow up individually with you just because all 
        the time remaining. I have been hearing a lot about--and I want 
        to kind of look at the economic impact on commodity prices, but 
        it is a total curveball. It has to do with solar fields being 
        on fertile farmlands. And I think some of our other Members of 
        the Committee are hearing about this as well. That is putting 
        out policies that--policies have impact, right? I am recently 
        hearing a lot of discussion and concern that government policy 
        is incentivizing placement of solar farms on fertile farm, not 
        marginal, but fertile farm land driving up the competition for 
        leasing acreage, and that is really important for our young and 
        beginning farmers. And so I would love to follow up with you, 
        any thoughts you might have in writing or in person, if this is 
        or could be a significant input cost variable going forward, 
        just cost of acreage.

    This confirms what I have witnessed and what I am hearing from 
colleagues in the South. Wind farm operators are targeting cropland so 
they will not have to undertake the cost of clearing and leveling the 
land for solar installation. Specifically as it relates to policy, a 
lot of agricultural policy has unintended consequences and this is 
another example. Incentivizing solar production in the suite of all 
renewable energy policy has the effect of reducing the cost of 
installation/operation of solar farms. This in turn makes it profitable 
to pay more for land for solar farms. Many solar farms are being 
located on productive farmland which reduces the available supply of 
farmland and increases costs.
Insert 2
          Mr. Allen. Farmers in my district have signed on to a 
        petition which requests that a lack of agronomic inputs be 
        included as covered peril under the 2022 MPCI policy.* Can you 
        comment on that?
---------------------------------------------------------------------------
    * See Attachment submitted by Hon. Rick W. Allen.
---------------------------------------------------------------------------
          Dr. Outlaw. I would say that----

    The standard MPCI policy covers a large array of causes of loss. 
The unavailability of necessary production inputs (at the time they are 
needed) would also cause losses for producers. While it may be 
difficult to prove loss, this is definitely an area that RMA should 
look into as the agriculture supply chains continue to prove 
unreliable.
                               attachment
April 14, 2022

  Congressman Rick W. Allen,
  Statesboro Office,
  Statesboro, GA.

    Dear Congressman Allen:

    We would like to take this opportunity to point out an operational 
and economic issue farmers are facing in 2022. Regardless of the fact 
that there are multiple contributors to the problem, 2022 poses a 
significant financial threat to the farm community due to major supply 
chain issues. Farmers are anticipating difficulties sourcing 
Herbicides, Fungicides, and Fertilizer needed to successfully make 
their crop yields. Why, you may ask, is this such an important issue 
for the upcoming year? To date, ``lack of agronomics inputs'' is a non-
insured peril under current Multi-Peril Crop Insurance policies (MPCI). 
This means that the inability to produce a favorable yield due to the 
inability to secure necessary supplies will lead to farmers being 
denied claims on the basis of policy exclusions.
    We believe, and hope, that you will support any effort to require 
USDA/FCIC/RMA to include ``lack of agronomics inputs'' as a covered 
peril in the 2022 MPCI policy. USDA made a favorable effort to extend 
deadlines as a result of [COVID], so we are certain that something can 
be done to cover the above mentioned peril, on a temporary basis at 
minimum, in an effort to prevent farmers from financial ruin.
    We would like to thank you, in advance, for your continued support! 
A petition in support of this request is attached and signed for your 
review.
            Best regards,

Georgia Farmers.


Sid Newton.

    Petition Request To Include ``Lack of Agronomics Inputs'' on 2022 
MPCI Policies as a Covered Peril for Crop Insurance








 
                     A 2022 REVIEW OF THE FARM BILL

     (STAKEHOLDER PERSPECTIVES ON NON-SNAP USDA NUTRITION PROGRAMS)

                              ----------                              


                         TUESDAY, JUNE 14, 2022

                  House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:06 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: Representatives David Scott of Georgia, 
Costa, McGovern, Adams, Spanberger, Hayes, Brown, Pingree, 
Sablan, Kuster, Plaskett, Carbajal, Lawson, Craig, Harder, 
Axne, Schrier, Panetta, Kaptur, Thompson, Austin Scott of 
Georgia, Crawford, Hartzler, LaMalfa, Allen, Rouzer, Kelly, 
Bacon, Johnson, Baird, Cloud, Mann, Feenstra, Moore, Cammack, 
and Fischbach.
    Staff present: Caitlin Balagula, Lyron Blum-Evitts, 
Prescott Martin III, Amar Nair, Ashley Smith, Katherine 
Stewart, Caleb Crosswhite, Jennifer Tiller, Erin Wilson, and 
Dana Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. All right. Welcome, everyone. The Committee 
will now come to order. And I want to thank everyone for 
joining us here today for A 2022 Review of the Farm Bill: 
Stakeholder Perspectives on Non-SNAP USDA Nutrition Programs, a 
very important hearing. After our brief opening remarks, 
Members will receive the testimony from our witnesses today, 
and then the hearing will be open for questions.
    And so, let me just start by again saying welcome to all of 
you. I really appreciate you all coming in and sharing this 
vital information on A 2022 Review of the Farm Bill: 
Stakeholder Perspectives on Non-SNAP USDA Nutrition Programs. 
This hearing is another in an ongoing series of hearings that 
we are hosting to review the 2018 Farm Bill and prepare for the 
2023 Farm Bill. We will receive stakeholder input on USDA's 
nutrition programs included in the farm bill other than SNAP, 
which includes the following food distribution programs: One, 
The Emergency Food Assistance Program, better known as TEFAP; 
two, the Commodity Supplemental Food Program; and three, the 
Food Distribution Program on Indian Reservations. And our 
nutrition incentives and food access programs, including the 
Gus Schumacher Nutrition Incentive Program, the Seniors 
Farmers' Market Nutrition Program, the Healthy Food Financing 
Initiative, and Community Food Projects Competitive Grants 
Program. So, as you can see, we have a lot of ground to cover.
    These critical anti-hunger nutrition programs work together 
alongside SNAP to tackle food insecurity from different angles 
and provide support to millions of Americans, with each also 
providing positive impacts for both farmers and ranchers, as 
well as our broader food system. For example, in Fiscal Year 
2020, The Emergency Food Assistance Program, or TEFAP, provided 
2.2 billion pounds of USDA foods to emergency food providers 
like food banks, who use that support to serve more than 60 
million Americans, according to Feeding America, an excellent, 
excellent helping hand for our nation to feed America. The 
Seniors Farmers' Market Nutrition Program, which provides over 
800,000 low-income seniors with coupons each year that they can 
exchange for fresh fruits, vegetables, herbs, and honey at our 
farmers' markets. And our newest Member, Ms. Kaptur, a fine 
Representative from Ohio, has been a strong proponent of this 
program for many years. Thank you, Ms. Kaptur.
    And just last week, the Healthy Food Financing Initiative 
announced its latest round of grants and loans to entities that 
will offer healthy foods in communities without access to 
nearby grocery stores and food retailers. These awards will 
support 134 projects in rural areas, urban areas, and Tribal 
communities in 46 states and Territories, including several 
right in my own home State of Georgia. Because it is in 
Ellenwood, Georgia, which is now completely in my district 
thanks to the redrawing--I had it before, and now they are 
bringing it back to me, Ellenwood.
    And the name of this organization is Atlanta Harvest, an 
urban farm that provides food to seven counties in the greater 
Atlanta region. They just received Healthy Food Financing 
Initiative funding, and I am very glad about that. This funding 
will expand their market square footage to increase their 
inventory and variety of foods sold, and they will be able to 
purchase a hybrid delivery food truck. And Atlanta Harvest is a 
great example of how our nutrition programs work in concert. 
And since 2018, they have partnered with Wholesome Wave 
Georgia, who happens to be a 2021 GusNIP grantee, and provides 
SNAP recipients a 100 percent match for fresh produce.
    And that was a little bit of just some of the many 
fantastic programs that we will discuss today. I also have to 
acknowledge the incredible work that these programs and their 
grantees and administrators have done during this terrible 
COVID-19 pandemic. Despite incredible challenges faced, they 
responded quickly and with great flexibility to be able to 
continue serving those in need during a particularly difficult 
time, and we want to say thank you very much. I look forward to 
discussing these programs and reviewing their relevant 
provisions in the 2018 Farm Bill so that we can maintain and 
improve upon them as necessary for our 2023 Farm Bill.
    So, thank you again to the Members and witnesses who are 
joining us today, as well as those who have tuned in and are 
listening or watching. And I look forward to hearing more today 
about how we can improve these important programs.
    [The prepared statement of David Scott of Georgia follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning and welcome to today's hearing, A 2022 Review of the 
Farm Bill: Stakeholder Perspectives on Non-SNAP USDA Nutrition 
Programs. This hearing is another in the ongoing series of hearings we 
are hosting to review the 2018 Farm Bill and prepare for the 2023 Farm 
Bill.
    We will receive stakeholder input on USDA nutrition programs 
included in the farm bill--other than SNAP--which includes our food 
distribution programs: The Emergency Food Assistance Program (TEFAP), 
The Commodity Supplemental Food Program, and the Food Distribution 
Program on Indian Reservations.
    And our nutrition incentive and food access programs, including: 
The Gus Schumacher Nutrition Incentive Program, The Seniors Farmers' 
Market Nutrition Program, The Healthy Food Financing Initiative, and 
Community Food Projects Competitive Grants Program.
    So, as you can see, we have a lot of ground to cover!
    These critical anti-hunger and nutrition incentive programs work 
together, alongside SNAP, to tackle food insecurity from different 
angles and provide support to millions of Americans, with each also 
providing positive impacts for farmers and ranchers and our broader 
food system.
    For example, in Fiscal Year 2020, The Emergency Food Assistance 
Program--or TEFAP--provided 2.2 billion pounds of USDA Foods to 
emergency food providers, like food banks, who used that support to 
serve more than 60 million Americans, according to Feeding America.
    The Seniors Farmers' Market Nutrition Program provides over 800,000 
low-income seniors with coupons each year that they can exchange for 
fresh fruits, vegetables, herbs, and honey at farmers' markets. Our 
newest Member, Ms. Kaptur has been a strong proponent of this program.
    And, just last week, the Healthy Food Financing Initiative 
announced its latest round of grants and loans to entities that will 
offer healthy foods in communities without access to nearby grocery 
stores and food retailers. These awards will support 134 projects in 
rural, urban, and Tribal communities in 46 states and Territories, 
including several in my own home state of Georgia.
    In Ellenwood, Georgia--which is inside of my new Congressional 
District--Atlanta Harvest, an urban farm that provides food to seven 
counties in the greater-Atlanta region, just received Healthy Food 
Financing Initiative funding to expand their market's square footage, 
to increase their inventory and variety of food sold, and to purchase a 
hybrid delivery food truck.
    And Atlanta Harvest is a great example of how our nutrition 
programs work in concert. Since 2018, they have partnered with 
Wholesome Wave Georgia, who happens to be a 2021 GusNIP grantee, to 
provide SNAP recipients 50 percent off fresh produce.
    And that was a little bit on just some of the many fantastic 
programs we will discuss today.
    I also have to acknowledge the incredible work that these programs 
and their grantees and administrators have done during the COVID-19 
pandemic. Despite the incredible challenges faced, they responded 
quickly and with great flexibility to continue serving those in need 
during a particularly difficult time. Thank you.
    I look forward to discussing these programs and reviewing their 
relevant provisions in the 2018 Farm Bill so we can maintain and 
improve upon them as necessary for the 2023 Farm Bill.
    Thank you again to the Members and witnesses joining us today as 
well as those who have tuned in and are listening. I look forward to 
hearing more today about how we can improve these important programs.
    With that, I'd now like to welcome the distinguished Ranking 
Member, the gentleman from Pennsylvania, Mr. Thompson, for any opening 
remarks he would like to give.

    The Chairman. And so, with that, now, I would like to 
welcome our distinguished Ranking Member, my friend, the 
gentleman from Pennsylvania, Mr. Thompson, for any opening 
remarks that you would like to give.

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

    Mr. Thompson. Thank you, Mr. Chairman. Thank you, Mr. 
Chairman, and good morning to our witnesses, and thank you for 
sharing your time and expertise with us today.
    First, I want to remind the Committee we are again battling 
record levels of inflation. Consumer prices rose 8.6 percent in 
the 12 months ending in May, climbing at the quickest pace 
since the Carter Administration. This Administration and my 
colleagues must rethink regulatory actions and spending 
proposals because to say our communities are suffering is an 
understatement. And obviously, we see that in the area that we 
are discussing today, which is the affordability of food when 
you look at the cost of groceries and individual food products 
have increased and escalated as a part of that.
    The harsh reality makes today's hearing important but also 
a cautionary tale. Each of the programs being discussed today, 
including the Commodity Supplemental Food Program, The 
Emergency Food Assistance Program, and the Food Distribution 
Program on Indian Reservations, round out the nutrition safety 
net for individuals and communities in need. But it is no 
wonder participation rates are through the roof. Nutrition 
distribution incentive programs are costing billions to 
operate, and inflated prices are making it harder for providers 
to provide and recipients to receive. So, I do hope today 
delivers a realistic discussion on how to combat these 
excessive costs and ensure those in need have access.
    But more spending and expanded eligibility are not 
necessarily the answer. Infusing the economy with newly printed 
money is a reckless plan. Instead, we need to evaluate how to 
grow our economy naturally through increased labor force 
participation, addressing our fractured supply chain, and 
boosting our domestic production, welcomed steps towards less 
need and reliance on Federal aid.
    Today also presents the opportunity to discuss what is 
working and what is not in the statutes guiding each of these 
programs. And I remain troubled that our recent nutrition farm 
bill-related hearings that focus solely on the 2018 Farm Bill 
and more on where we can increase spending and expanding 
eligibility and programming. We know for a fact some of the 
bipartisan ideas that came to fruition in 2018 have cost too 
much, yielded too few results, or barely made a difference in 
people's lives. I think also it is imperative that we hear more 
about nutrition and health today.
    The recently announced White House Conference on Food, 
Nutrition, Hunger, and Health advertises itself as an event to 
accelerate progress and drive significant change to end hunger, 
improve nutrition and physical activity, reduce diet-related 
disease, and close the disparities around them. On its face 
that mission appears praiseworthy. However, the hearsay 
surrounding the conference is leaving much to be desired.
    And last, in areas like nutrition centers, what is being 
studied and learned related to health outcomes? Are we asking 
the right questions about their impact? And are the 
beneficiaries receiving the bulk of the funding or are we 
seeing funds tied up by organizations under the guise of, 
quote, ``administration,'' end quote.
    Thank you, Mr. Chairman, for calling this hearing. I look 
forward to the discussion. And again, I thank our witnesses for 
their testimony today. And with that, I yield back.
    The Chairman. Thank you, Ranking Member.
    And now the chair would request that other Members submit 
their opening statements for the record so that witnesses will 
be able to begin their testimony and to ensure that there is 
ample time for questions.
    And right now, I would like to give a warm welcome to our 
first witness today, Mr. Kyle Waide, who is the President and 
Chief Executive Officer of the Atlanta Community Food Bank in 
our great State of Georgia. And let me just say, I have had a 
great relationship with this gentleman. We have worked together 
on many projects through feeding our wonderful people in 
Georgia and across the nation. And I want to also add that we 
have done a great project at Mundy's Mill High School, where we 
were able to provide COVID-19 vaccinations.
    Our next witness today is Mr. Gary Besaw, who is the 
Director of the Menominee Tribal Department of Agriculture and 
Food Systems and also the Director of the Menominee Tribal Food 
Distribution Program from Keshena, Wisconsin. Thank you for 
coming.
    Our third witness today is Dr. Jessie Gruner, the Director 
of Community Innovations at Pinnacle Prevention in Chandler, 
Arizona.
    And our fourth witness today is Ms. Spencer Moss, who is 
the Executive Director of the West Virginia Food and Farm 
Coalition in Charleston, West Virginia.
    And our fifth and final witness today is Mr. William 
Smittcamp, the President and Chief Executive Officer of the 
Wawona Frozen Foods in Clovis, California, who is testifying on 
behalf of the American Frozen Foods Institute.
    I want to welcome all of you to our hearing today. And now 
we will proceed with your testimony. Mr. Waide, please begin 
when you are ready.

         STATEMENT OF KYLE WAIDE, PRESIDENT AND CHIEF 
   EXECUTIVE OFFICER, ATLANTA COMMUNITY FOOD BANK, ATLANTA GA

    Mr. Waide. Chairman Scott, Ranking Member Thompson, and 
distinguished Members of the Committee, thank you for your 
invitation to testify today. My name is Kyle Waide. I am the 
CEO of the Atlanta Community Food Bank. We are a member of 
Feeding America, the national network of 200 member food banks 
that serve every county in the United States, distributing 7.5 
billion pounds of food annually through a grassroots network of 
community-based feeding programs. Last year, my food bank in 
north Georgia provided 100 million pounds of food to 700,000 
neighbors across 29 counties. Together, Feeding America food 
banks are uniquely capable of distributing emergency food 
safely, efficiently, equitably, and reliably to food-insecure 
families when and where they need it.
    As we discuss the next farm bill, I want to deliver a 
simple message. Demand for food assistance is growing, and food 
banks need more Federal support to meet rising demand. We all 
know how the pandemic dramatically increased food insecurity 
across the country. We met this crisis with an unprecedented 
Federal response, combined with an extraordinary expansion of 
food banks and other nonprofit feeding programs. Over time, 
more and more food-insecure families got back on their feet, 
and demand for food assistance declined. In recent months, 
however, rising prices for food, gas, and other basic needs, 
combined with the unwinding of many COVID recovery supports 
have increased pressure on families. Lines at food banks are 
growing again. And in my food bank, our distribution volume 
over the last few months has now risen again to 35 percent 
higher than where we were before COVID.
    Meeting this demand is getting harder. Like every business 
in the country, our operating costs are skyrocketing due to 
rising wages, gas prices, and costs for maintaining and 
replacing equipment. Our costs for food acquisition have 
increased by 40 percent as we purchase more food at inflated 
prices to offset large declines in food commodities provided 
through Federal nutrition programs.
    The Emergency Food Assistance Program, TEFAP, has provided 
critical support for food banks, especially during the 
pandemic. We would not have met the need for food assistance 
during the pandemic were it not for the massive investments in 
additional TEFAP spending authorized by Congress. This is 
particularly true in less populated areas of the country, where 
Federal commodities account for a much larger percentage of the 
food distributed by food banks.
    But, looking ahead, we are concerned that reverting back to 
pre-pandemic levels of TEFAP spending in the next farm bill 
will leave us ill-prepared to meet the needs in our local 
communities. Food banks are anticipating a decline in Federal 
commodities next year of 40 percent or more. In addition, many 
TEFAP shipments right now are being canceled due to supply 
chain challenges and price increases.
    To offset these reductions, food banks are purchasing more 
food. In Atlanta, we will spend more than $15 million next year 
just to purchase food, which will account for more food than we 
expect to receive in TEFAP commodities. That is not a 
sustainable pattern for the vast majority of food banks.
    We need your help to continue to meet the need for food 
assistance over the long-term. And specifically, we need more 
TEFAP. I encourage you to consider increasing the level of 
mandatory funding for TEFAP to $450 million annually while 
increasing funding for TEFAP storage and distribution costs.
    Alongside an increased investment in TEFAP, I also 
encourage you to consider expanding access to the Commodity 
Supplemental Food Program and to support enhancements to the 
SNAP program. I refer you to my written testimony for more 
detail on enhancements to CSFP and SNAP.
    As you consider increasing funding for these programs, I 
also encourage you to consider what it takes to ensure this 
food is distributed safely and equitably in the communities 
that need it the most. Food insecurity continues to 
disproportionately impact communities of color and rural 
communities, both of which experience food insecurity rates 
that are twice as high as the national average. Getting food to 
these communities is often more challenging and more expensive. 
Here again, the nation's food banks are uniquely capable of 
ensuring federally funded food resources reach the people in 
communities that need it the most.
    We have developed the infrastructure and systems to store 
and move food safely and accountably, and, more importantly, we 
have built relationships and trust in our country's most 
vulnerable communities. In Atlanta, \2/3\ of the partners who 
work with us to distribute food are faith-based organizations, 
representing a wide variety of faiths and denominations across 
urban, suburban, and rural communities. Sixty percent of our 
partners serve majority minority communities, and half are led 
by BIPOC leaders. This is why our community turns to us in a 
crisis and it is why Congress and the USDA can trust us to 
ensure the food you provide us is reaching the people who need 
it the most.
    I want to thank Chairman Scott for inviting me to testify. 
I look forward to working with the Committee to advance our 
next farm bill, and I am happy to answer your questions.
    [The prepared statement of Mr. Waide follows:]

    Prepared Statement of Kyle Waide, President and Chief Executive 
            Officer, Atlanta Community Food Bank, Atlanta GA
    Dear Chairman Scott, Ranking Member Thompson, and distinguished 
Members of the Committee:

    Thank you for the invitation to testify at today's hearing on the 
2022 Review of the Farm Bill: Stakeholder Perspectives on Non-SNAP USDA 
Nutrition Programs. My name is Kyle Waide, and I am the President and 
CEO of the Atlanta Community Food Bank, one of the largest food banks 
in the country. I am excited to share my perspective today on how to 
protect and improve Federal nutrition programs, specifically The 
Emergency Food Assistance Program (TEFAP) and the Commodity 
Supplemental Food Program (CSFP) to ensure individuals and families 
facing hunger can continue to put food on the table.
    The Atlanta Community Food Bank is a member of the Feeding America 
food bank network. Feeding America is the largest hunger-relief 
organization in the United States with a network of more than 200 food 
banks, 21 statewide food bank associations, and more than 60,000 
partner agencies, food pantries, and meal programs. Like our sister 
food banks across the country, the Atlanta Community Food Bank works to 
end hunger with the food, people, and big ideas required to ensure our 
neighbors have the nourishment they need to lead healthy and productive 
lives.
    We work with a wide variety of retailers, farmers, restaurants, 
manufacturers, distributors, and Federal programs to secure donated and 
purchased essential groceries for people facing hunger in our service 
area. We distribute this food across 29 counties in metro Atlanta and 
north Georgia through a large, decentralized grassroots network of 
close to 700 community-based nonprofit partners, the majority of which 
are faith-based organizations. In our Fiscal Year 2021, we served more 
than 715,000 of our Georgia neighbors in need of food assistance, 
distributing more than 116 million pounds of food, the equivalent of 
nearly 100 million meals. In addition to managing a food supply chain, 
we offer other services that connect individuals and families to local 
providers offering services such as affordable housing options, 
shelters, rent and utility assistance, free to low-cost health 
services, job skills, nutrition education and food and clothing 
pantries.
    The Atlanta Community Food Bank and the Feeding America food bank 
network are uniquely capable of working to reduce food insecurity as 
part of a robust combined government and community response. Through 
years of growing our infrastructure, building public-private 
partnerships, responding to crises, and driving innovation, we have 
built the capacity and the accountability systems to support ongoing 
large-scale food distribution, providing high-quality nutritious food 
safely, efficiently, equitably, and reliably to food-insecure families 
when and where they need it.
Current State of Food Insecurity
    Prior to the pandemic, national food insecurity rates had reached 
their lowest levels in 20 years. After reaching a peak following the 
Great Recession, the food insecurity rate fell steadily as the economic 
recovery accelerated and we reached historically low levels of 
unemployment. Despite that progress, 38 million people, including 
nearly 12 million children are food-insecure in the United States in 
2022. In Georgia, the food insecurity rate within the Atlanta Community 
Food Bank's 29 county service area is currently 12%.
    The COVID-19 pandemic may be receding, but demand for food 
assistance is on the rise again. As we all know, the Federal response 
to the pandemic was unprecedented in scale and scope. Investments in 
nutrition assistance programs made an enormous difference in preventing 
much larger increases in hunger. Now, however, some of those expansions 
in program capacity and flexibility have already ended, and others, 
such as Supplemental Nutrition Assistance Program (SNAP) emergency 
allotments, will go away nationwide when the Public Health Emergency 
(PHE) declaration ends. Some states, including Georgia, have already 
chosen to end SNAP emergency allotments, leading to a projected average 
loss of $82 a month in benefits for those enrolled. Many families are 
struggling to adjust to these changes, and rising costs are only 
increasing the challenges they face. These families are facing grocery 
prices that are ten percent higher this year, alongside the rising 
costs they face for other basic needs like gas, housing, and childcare. 
Nationally, the cost of meat, poultry, fish, and eggs has increased by 
13%. Households that are low-income already spend about \1/3\ of their 
income on food. Even relatively small increases in food prices can 
destabilize budgets and force families to make impossible choices 
between food and other necessities. Increased food prices also mean 
that nutrition program benefits, like those received through SNAP, 
don't buy as much. To survive rising costs at the supermarket and 
reduced government assistance program benefits and access, many 
families are turning to food banks.
    During the peak of the pandemic our food distribution volumes were 
70 percent higher than pre-pandemic levels. An improving economic 
environment and critical public supports such as the investments in 
nutrition programs and the Child Tax Credit helped reduce demand for 
food assistance during the latter half of 2021, and our distribution 
volume declined as well. In recent months, however, the rising prices 
for food and other basic needs, combined with the cessation of COVID 
recovery supports, have put increasing pressure on low- and moderate-
income families. Our distribution volumes are rising again, and over 
the past 2 months we distributed essentially the same volume of food as 
we did during April and May of 2020, nearly 35% higher than pre-COVID 
levels.
    Alongside the increase in demand, our operating costs are 
increasing significantly. Fifty-five percent of Feeding America food 
banks have recently reported that food donations are down, and 57% 
report that United States Department of Agriculture (USDA) commodities 
including The Emergency Food Assistance Program (TEFAP) have declined 
significantly this year. To replace these sources of food, food banks 
have dramatically grown how much food they purchase. With food prices 
soaring, our costs for food acquisition have increased by nearly 40% to 
source the food we need to meet current levels of demand. Outside of 
food acquisition costs, food banks are also paying more for everything 
else from fuel to vehicle maintenance. And like everyone else, we are 
paying more in wages and benefits to keep up with the highly 
competitive labor market. In Atlanta, this means our costs per meal 
distributed have risen by 22%.
    Food insecurity continues to disproportionately impact Black, 
Latino, and Native American/Alaskan communities, which experience rates 
of food insecurity that are more than double the rates of food 
insecurity among their white counterparts. Similarly, many rural 
communities continue to experience higher levels of hunger, with food 
insecurity rates exceeding 20% in many rural Census tracts across 
Georgia. At the Atlanta Community Food Bank, more than 70% of the 
people receiving food through our network identify as Black or Latino, 
with demand growing significantly in a number of counties and 
communities with highly concentrated BIPOC populations. And we 
distributed close to 30 million pounds of food in the ex-urban and 
rural counties outside metro Atlanta over the past twelve months.
    The resiliency, diversity and breadth of our partner network makes 
our work possible and enables us to continue adapting to the rapidly 
changing environment in which we operate. Food banks are not stand-
alone organizations, working in isolation from a single location to 
deliver services. We are truly defined by and best understood as a 
widely distributed network of hyper-local community-based 
organizations, supported by a high-capacity centralized engine for 
acquiring and distributing food and other resources. We are the 
churches, soup kitchens, social-service programs, shelters, and 
community centers where food-insecure families access the food we 
source through our central warehouses. In Atlanta, \2/3\ of these 
partners are faith-based organizations, representing a wide array of 
faiths and denominations across urban, suburban, and rural communities. 
Approximately 60% serve majority BIPOC communities, and half are led by 
BIPOC leaders. Two-thirds of our staff, more than 60% of our leadership 
team, and 44% of our board of directors identify as racially diverse. 
We represent, include, and engage all aspects of our community, which 
has helped us build a unique level of trust and connectivity in all 
kinds of local communities across our region, including and especially 
in our most vulnerable populations. It is also why the community turns 
to us during crisis, enabling us to work closely with schools, 
government leaders, business groups and others to support a variety of 
emergency food distributions across our region, including the events we 
supported with Chairman Scott and a variety of community partners over 
the past several years.
    In addition to our community-based distribution network, our work 
also depends on broad community support and deep relationships across 
food and agriculture industries. We are supported by 20,000 volunteers 
and 60,000 financial donors, who help our team of 180 food bankers pack 
food boxes, pull orders, manage food distributions, and address other 
client needs. We source donated food from a long list of local, 
regional, and national food manufacturers and distributors, which 
includes collecting donated perishable food items from more than 500 
retail grocery store locations in north Georgia. We work closely with 
farmers to collect and distribute millions of pounds of surplus 
produce, dairy and other agricultural products that otherwise would go 
to waste. These relationships include large, multi-generational farms, 
as well as smaller, local farms, including socially disadvantaged BIPOC 
growers and urban farmers.
    This deep connectivity across our community, with grassroots 
organizations, large corporations, and everything in between, enables 
us to get food and other resources to the people and communities who 
need it, when and where they need it. And against the backdrop of 
growing demand, a tightening food supply and increasing costs, food 
banks are working as hard as ever with our partners to feed families in 
need. We are committed to continue growing our capacity to acquire and 
distribute more food to respond to the growing need for food 
assistance. But we cannot do our work alone. We need help, and in 
particular we need access to more of the high-quality food commodities 
provided by USDA through programs authorized by the farm bill. The 
people and communities we serve need more food. The 2023 Farm Bill 
provides an opportunity for Congress to help continue to reduce food 
insecurity and address racial equity in food insecurity by increasing 
investments in Federal nutrition programs including The Supplemental 
Nutrition Assistance Program (SNAP), The Emergency Food Assistance 
Program (TEFAP) and Commodity Supplemental Food Program (CSFP).
Role of Federal Support in Addressing Food Insecurity
    The support provided by and through a variety of Federal nutrition 
programs has been critical to helping food banks do our work, starting 
with two programs that provide the backbone of nutritious food we 
distribute. The Emergency Food Assistance Program (TEFAP) is a means 
tested Federal program that provides nutritious food to low-income 
individuals through food banks and other charitable organizations 
nationwide, while supporting U.S. grown commodities. The program 
provides critical support, helping us ensure a nutritious balance of 
food is distributed to families in need by allowing us to combine TEFAP 
with our other sources of food. As the Committee already knows, 
Congress authorized more than $1 billion in additional TEFAP spending 
through a number of COVID recovery bills in 2020, dramatically 
increasing our access to food resources during the crisis. USDA also 
provided short term assistance through an additional allocation of food 
purchases in 2020 and 2021, including support for states to partner 
with food banks and local growers to connect local food with people in 
need.
    This made a critical difference for us in north Georgia. In our 
fiscal 2021 year, we distributed approximately 40 million pounds of 
food commodities provided through TEFAP and other special USDA programs 
(e.g., the Coronavirus Food Assistance Program, commonly known as the 
``Farmers to Families Food Box Program''). This represents more than 
\1/3\ of our total volume during that critical year. For food banks 
serving less populated areas of the country, Federal commodities 
accounted for an even larger percentage of their food distribution 
volume. To state the obvious, we would not have met the need in our 
community were it not for these extraordinary investments in TEFAP 
spending during the pandemic.
    But looking ahead, we are concerned that simply reverting back to 
pre-pandemic levels of TEFAP funding will be insufficient to respond to 
the needs of our communities. Food banks across the country are 
anticipating a decline in Federal commodities of 40% or more. At my 
food bank, we are planning to receive 14 million pounds of TEFAP food 
in fiscal 2023, representing only \1/3\ of the food we received through 
TEFAP and CFAP during 2021 and a reduction of approximately 1 million 
pounds in food compared to what we received pre-COVID. And this does 
not account for the growing number of TEFAP shipments that are being 
canceled due to complications in the food supply chain--for us in 
Atlanta, approximately 13% of the TEFAP shipments we ordered this year 
have been canceled and we believe this number is higher in many other 
parts of the country. We expect to spend nearly $15 million next year 
on purchasing food to offset this reduction, and we will source 25% 
more food next year through purchasing (17.5 million pounds) than we 
expect to receive through TEFAP (14 million pounds). We are concerned 
that this pattern will not be sustainable over the long-term.
    Food banks and other charitable feeding organizations have 
demonstrated the critical role they play in providing immediate food 
assistance as well as in augmenting gaps in broader food assistance 
programs. Congress should include additional mandatory funding for 
TEFAP food in the next farm bill in recognition of the sustained high 
need for food assistance nationwide. Specifically, TEFAP mandatory 
funding should be authorized to $450 million per year in the next farm 
bill and TEFAP Storage and Distribution Funds should increase to 
reflect the actual distribution costs needed to $200 million per year. 
TEFAP Infrastructure Grants should remain at $15 million per year.
    There are 5.2 million seniors facing hunger in the United States. 
The Commodity Supplemental Food Program (CSFP) works to improve the 
health of low-income persons at least 60 years of age by supplementing 
their diets with nutritious USDA Foods. The program itself serves 
619,000 seniors with incomes at or below 130% of the Federal Poverty 
Line (approximately $15,301 for a senior living alone) and the Feeding 
America network serves more than \1/2\ million seniors (age 60 and 
older) through the CSFP program. More than half of Feeding America 
network food banks participate in CSFP, the most extensive hunger-
relief program for seniors operated across our network. In Atlanta, we 
distribute roughly 5,000 CSFP boxes each month to low-income seniors, 
connecting them with high-quality nutritious food they would not 
otherwise be able to access.
    While CSFP serves more than \1/2\ million seniors across the 
Feeding America network, the population of food-insecure seniors is 
growing and will continue to grow over the next decade. To expand 
access to this program, Congress should increase the Federal Poverty 
Level for eligibility determination above 130% to reduce the burden of 
reporting requirements as part of the program. We also recommend 
increasing the length of time between recertification periods to ensure 
more seniors are able to participate in this important Federal program, 
instituting a self-declaration of needs to determine CSFP eligibility, 
and tailoring CSFP food packaging to assist with meeting dietary and 
medical needs of seniors. Furthermore, Congress should help us more 
effectively meet the food needs of seniors across the nation by adding 
culturally appropriate nutritious food options.
    In addition to the food provided to food banks and other nonprofits 
by USDA, support for food assistance through other nutrition programs 
has played a critical role in response to this crisis. Our food-
insecure neighbors rely heavily on an array of Federal programs--SNAP, 
school lunches, Pandemic-EBT, WIC, senior meals--to meet their 
families' needs. Millions of Americans would not have the food they 
need to survive without the continued strong support of Federal 
nutrition programs.
Conclusion
    Recovering from COVID will continue to be a challenge for all of 
us. Ongoing Federal investment and support will be necessary to 
accelerate and sustain our recovery. This is even more true for food-
insecure families, whose recovery will be disproportionately harder. I 
urge the Committee, Congress, and the Administration to take the 
lessons learned from COVID and use that insight to create a strong farm 
bill that puts people facing hunger at the center. Purchase more food 
through TEFAP and other USDA programs. Leverage high-capacity partners 
like the nation's food banks to move this food safely, efficiently, and 
equitably to the people and communities who need it. Flood the zone 
with access to food. Doing so will help our families, communities and 
our country recover faster.
    I want to again thank Chairman Scott for inviting me to testify. We 
celebrate the Committee's interest in ensuring all our neighbors have 
the food they need. I look forward to working with you on that 
important goal and to answering your questions.
            Sincerely,
            
            
Kyle Waide,
President and CEO,
Atlanta Community Food Bank.

    The Chairman. Thank you, Mr. Waide.
    And now, Mr. Besaw, please begin when you are ready. Mr. 
Besaw, you may want to come a little closer to your microphone. 
We are not hearing you clearly.
    Mr. Besaw. Can you hear me now?
    The Chairman. Yes. It is a little muffled. Just get as 
close as you can, and we will make do. Go right ahead.

    STATEMENT OF GARY J. BESAW, DIRECTOR, MENOMINEE TRIBAL 
              DEPARTMENT OF AGRICULTURE AND FOOD 
    SYSTEMS AND MENOMINEE TRIBAL FOOD DISTRIBUTION PROGRAM, 
                          KESHENA, WI

    Mr. Besaw. Anam#hkatowak, na net#nawemakanak w#w#nen, 
etowak (Greetings my Relatives, Thank you I say) for allowing 
me to be here today to speak regarding the Food Distribution 
Program on Indian Reservations. Part of the comments I have 
heard here today about the increased funding and costs are 
important to Menominee and important to the Tribes. And part of 
that response can be that much of what is in the farm bill or 
would be in the farm bill can be redirected to allow Tribes to 
have that ability to take that same funding that may be going 
to them, or that may be through the farm bill and administered 
by AMS, to now have Tribes have that authority to have control 
through self-governance processes.
    There are several things within the farm bill that Tribes 
have been working through a Tribal leaders consultation work 
group, and these are some of the concerns. One I will speak to 
is the 638 self-determination contracting.* Another is working 
and having more assistance from the Agricultural Marketing 
Service in working to develop that point of contact and really 
work to allow Tribes to walk through the process to become an 
eligible producer in the system.
---------------------------------------------------------------------------
    * Editor's note: 638 refers to Pub. L. 93-638, Indian Self-
Determination and Education Assistance Act.
---------------------------------------------------------------------------
    We have concerns on indigenous representation in the FNS 
positions. Where that is available, Tribes ask that we have 
positions filled by Tribal members or by others who have 
received the training and education that they would need to be 
able to support Tribes.
    I will talk about one of the programs that we are in; using 
the FDPIR's Self-Determination Demonstration Project, Menominee 
has been able to use self-determination to replace and supplant 
some of the 100 products that are available as commodities or 
products for our food distribution clients. What this does is 
allows Tribes that want to participate in the 638 contracting 
process to now be able to come in to contract with indigenous 
producers to use that same funding that AMS may have used to 
purchase product from wherever across the country and bring 
that to our food distribution--to our stores, our warehouses on 
reservation. We want to be able to shorten that food chain to 
build a more resilient food system. We want to look at 
providing jobs for our economy, for our Tribal economies.
    So, the 638 contracting allows Tribes--this was put into 
the 2018 Farm Bill as a pilot project--it allows us to be that 
purchaser for certain foods grown indigenously, grown by Tribes 
to be able to purchase that food and to supplant or replace 
those certain foods. And we have done that by replacing and 
purchasing, through that 638 process wild rice. We have 
replaced ground beef, ground bison, and beef roasts. We have 
also replaced apples with apples we have bought from indigenous 
producers and smoked fish, lake trout filets, white fish 
filets, and walleye from indigenous producers.
    So, we are trying to grow our economies. And this is a good 
way, as we have heard before, where we are not necessarily 
trying to ask for money, too much additional money, but we 
would be replacing that authority where we do the actual ask, 
and we actually purchase. We know what is best for our Tribal 
members.
    [The prepared statement of Mr. Besaw follows:]

    Prepared Statement of Gary J. Besaw, Director, Menominee Tribal 
 Department of Agriculture and Food Systems and Menominee Tribal Food 
                   Distribution Program, Keshena, WI
Introduction--About Menominee & Oneida
    Beginning in 2021, the Menominee Indian Tribe of Wisconsin and the 
Oneida Nation partnered together to participate in the FDPIR Self-
Determination Demonstration Project. Through this project, we are 
replacing USDA buffalo, ground beef, beef roast, and apples with Oneida 
Nation buffalo, ground beef, beef roast, and apples. We are also 
replacing USDA wild rice with wild rice from Spirit Lake and replacing 
USDA fish with fish from Red Cliff.
    By participating in this demonstration project, we are:

   Expanding Tribal sovereignty

   Providing better, more nutritious foods to our community

   Expanding cultural and historical knowledge through the use 
        of traditional foods

   Building capacity amongst our Tribal staff, farmers, 
        indigenous vendors, food producers, and our government as well 
        as educate the USDA on our food systems and the challenges our 
        communities face with access to nutritious, locally-grown, and 
        traditional foods.

   Providing a source of economic benefits to the Tribes and 
        Tribal vendors

   Expanding Self Determination and hopefully Self Governance 
        into the USDA.
How we want to see this Demonstration Project evolve
    While we are happy to participate in this Demonstration Project, we 
believe more can be done to enhance Tribal flexibility in FDPIR and 
USDA:

   We would like to see this Demonstration Project become 
        permanent and expanded to include Self Governance authority. 
        Although we appreciate the opportunity to determine what foods 
        to buy and incorporate into the FDPIR food packages, we think 
        Tribal authority should go beyond this by providing Tribes with 
        recurring, base funding and the authority to redesign the 
        program in a way that meets each Tribe's unique needs and 
        Tribal priorities.

   This flexibility is especially important for FDPIR, because 
        our local food products are so impacted by seasonality and 
        weather. This demonstration project required us to predict 
        specific food quantities months or years ahead of the actual 
        growing season, which is challenging. For example, In May 2021, 
        Wisconsin suffered unusual weather and experienced three hard 
        frosts. This ended up damaging much of the apples in our region 
        and the Orchard lost over half of their apple production in 
        2021. If we had Self-Governance authority, we would be able to 
        handle unforeseen issues without having to obtain Federal 
        approval and all the administrative work that goes along with 
        it to substitute products or make budget modifications.

     Increased flexibility would also allow us to respond 
            to the unique needs and demands of our community. So far, 
            we have received a lot of positive feedback from our 
            clientele. Many of our customers have said how they are 
            enjoying the quality of the foods being provided, 
            especially the black Angus beef that comes from the Oneida 
            Nation Farm. One Elder customer said that she does not have 
            to use much seasoning when preparing the meat because the 
            quality is so much better. The beef and buffalo are in high 
            demand and efforts are being made to provide more beef 
            roasts for next year. Under Self-Governance, we would have 
            been able to reallocate funds from other products, such as 
            fish products, to the beef and buffalo products without 
            further approval from the USDA. Under the current 
            demonstration project, we had to make a modification of our 
            food list in order to reallocate funds to meet the needs of 
            our communities.
Closing
    Thank you for the opportunity to provide our perspective on the 
FDPIR Demonstration Project. We are eager to work with you to make this 
demonstration project permanent and expand Self-Governance in FDPIR and 
the USDA.

    The Chairman. Well, thank you very much, Mr. Besaw.
    And now, Dr. Gruner, please begin when you are ready.

    STATEMENT OF JESSIE G. GRUNER, Ph.D., RDN, DIRECTOR OF 
          COMMUNITY INNOVATIONS, PINNACLE PREVENTION, 
                          CHANDLER, AZ

    Dr. Gruner. Thank you, Chairman Scott and Members of the 
Committee. I am honored to have the opportunity to provide 
testimony today. My name is Jessie Gruner. I am the Director of 
Community Innovations at Pinnacle Prevention, an Arizona-based 
nonprofit. We have been administering USDA nutrition programs 
statewide in Arizona for over 5 years. Today, I want to share 
with you our experiences and recommendations around GusNIP, the 
Senior Farmers' Market Nutrition Program, and the Community 
Food Projects Competitive Grants Program.
    I would like to start off with GusNIP first, or the SNAP 
incentive program. In Arizona, we offer our Double Food Bucks 
Program at multiple outlets, including farmers' markets, CSAs, 
mobile markets, corner stores, as well as grocery stores. We 
started this program with FINI funding in 2016, with only six 
farmers' market sites. Six years later, we are now on our third 
round of GusNIP funding from USDA, and we have grown our Double 
Up Program to over 75 locations.
    From our experience, we want to share the value and 
importance of being able to have an adaptable program model 
that we can tailor based on the needs of our diverse 
communities, including urban, rural, and indigenous. The 
ability to tailor the incentive program has allowed us to 
spread across the state, particularly in areas that don't have 
access to a farmers' market.
    In our model, we prioritize locally grown produce. This 
prioritization has had a tremendous economic impact with small 
producers and as increased local spending on these products by 
more than ten-fold at our Double Up sites. Not only are 
families taking home more healthy, seasonal, local food, this 
program has become a consistent, reliable source of revenue for 
local farmers.
    We did not get to where we are today alone. Thanks to 
collaborations with other states and strong technical 
assistance, we were able to find new and innovative solutions 
and had an abundance of resources available for us to use. The 
2018 Farm Bill created a national Nutrition Incentive Program 
Training Technical Assistance Evaluation and Information 
Center, known as the Nutrition Incentive Hub. Today, we would 
like to voice our support for ensuring current farm bill 
efforts continue to include technical support and assistance, 
which is critical for implementing and evaluating nutrition 
incentive programs.
    The program is currently designed with a dollar-for-dollar 
match requirement. While in Arizona we were successful in 
securing state-match funding, the current match structure 
inhibits our ability to expand our program, particularly in the 
grocery sector, which has a much higher SNAP volume and 
utilization rate. An alternative match structure would allow us 
to truly meet the needs of our communities.
    Next, I would like to talk about the Senior Farmers' Market 
Nutrition Program, which provides low-income seniors with 
coupons that can be exchanged for locally grown produce at 
farmers' markets, roadside stands, and CSA programs. This is a 
tiny but mighty program. It is so much more than just food and 
can be part of the solution for reducing senior isolation. In 
some of our senior housing centers, our program was the only 
source of fresh food during the pandemic. In one of our rural 
mountain communities, a low-income housing site had a bus that 
would typically bring the seniors to the farmers' market to 
spend their coupons.
    And during the pandemic, in order to protect their safety, 
they weren't able to bring seniors to the market, and this was 
really challenging for our seniors. Luckily, the Senior 
Farmers' Market Nutrition Program allows up to 50 percent of 
the funds to be used on bulk food purchases. This flexibility 
allowed us to have local produce delivered to their housing 
centers. We also had kids send in pictures that they drew to be 
included in their produce bags. And it was really a beautiful 
way to bring connection to seniors during a really isolating 
time.
    We know that isolation was exacerbated by the COVID-19 
pandemic, but isolation both preceded the pandemic and will 
continue to be a challenge seniors face. Because this program 
is something that seniors look forward to, a one-time benefit 
is not enough to meet the need and maximize the program's 
potential benefits. Increasing the maximum amount seniors 
receive annually would allow more flexibility in the program's 
structure and provide seniors more touch-points with their 
communities.
    We also desperately need an investment in the 
administrative allocation for this program. Administrative 
costs are capped at ten percent, which means the amount of 
dollars that can be used for personnel time is really limited, 
making it hard to reach the communities that need the support 
and assistance the most, especially in our rural areas.
    Finally, I would like to briefly mention the Community Food 
Projects Competitive Grants Program. We see this program as the 
low-hanging fruit that helps to build capacity for our 
community organization and helps producers to be able to scale 
up for larger programs and projects. It helps organizations 
test innovation at a small regional level. If we want to be 
able to meet the challenges that are facing the future of our 
local, regional, and national food systems, we have to provide 
space and resources for idea incubation and continue to center 
our small community food projects and socially disadvantaged 
producers. In many cases, this program is farmers' first 
introduction to USDA programs. As one of the lowest entry 
points we see an opportunity to make this----
    [The prepared statement of Dr. Gruner follows:]

    Prepared Statement of Jessie G. Gruner, Ph.D., RDN, Director of 
        Community Innovations, Pinnacle Prevention, Chandler, AZ
Introduction
    Thank you, Chairman Scott and Members of the Committee. I am 
honored to have the opportunity to provide testimony on non-SNAP USDA 
Nutrition Programs. My name is Jessie Gruner, I am the Director of 
Community Innovations at Pinnacle Prevention, an Arizona-based 
nonprofit dedicated to cultivating a just food system and opportunities 
for joyful movement.
    We have been administering USDA nutrition programs statewide in 
Arizona for over 5 years. Today, I want to share with you our 
experiences and recommendations around GusNIP, the Senior Farmers 
Market Nutrition Program, and the Community Food Projects Competitive 
Grants Program.
GusNIP
    I would like to start off with GusNIP, or the SNAP incentive 
program. Here in Arizona, we offer our nutrition incentive program, or 
as we brand it Double Up Food Bucks Arizona, at multiple outlets, 
including farmers['] markets, Community Supported Agriculture (CSA) 
programs, mobile markets, corner stores, as well as grocery stores. We 
started this program with FINI funding in 2016 with only six farmers['] 
market sites. Six years later, we are now in our third round of GusNIP 
funding from USDA and we have grown our Double Up program to over 75 
locations.
    From our experience we want to share the value and importance of 
being able to have an adaptable program model that we can tailor based 
on the needs of our diverse communities, including urban, rural, and 
indigenous. The ability to tailor the incentive program has allowed us 
to spread across the state, particularly in areas that do not have 
access to a farmers' market.
    Because of the success of the program, we were able to achieve a 
state-wide policy win securing recurring program investment from the 
state's general fund with strong bipartisan support, which shows how 
much people love and believe in this program.
    In our model, we prioritize locally-grown produce. This 
prioritization has had a tremendous economic impact with small 
producers and has increased local spending on these products by more 
than ten-fold at our Double Up sites. Not only are families taking home 
more healthy, seasonal, local food, this program has become a 
consistent, reliable source of revenue for local farmers, some of whom 
take home half of their daily market sales from Double Up Food Bucks.
    We did not get to where we are today alone. Thanks to 
collaborations with other states and strong technical assistance, we 
were able to find new and innovative solutions and had an abundance of 
resources available for us to use. The 2018 Farm Bill created a 
national Nutrition Incentive Program Training, Technical Assistance, 
Evaluation, and Information center, known as the Nutrition Incentive 
Hub. Today we would like to voice our support for ensuring current farm 
bill efforts continue to include technical support and assistance, 
which is critical for implementing and evaluating nutrition incentive 
programs.
    The program is currently designed with a dollar-for-dollar match 
requirement. While in Arizona we were successful in securing state 
match funding, the current match structure inhibits our ability to 
expand our program, particularly in the grocery sector which has a much 
higher SNAP volume and utilization rate. An alternative match structure 
would allow us to truly meet the needs of our communities, especially 
in places where individuals must travel between 50 and 100 miles to 
access a grocery store. We ask the Committee to consider a lower or 
percentage-based approach to match or removing this component.
    Finally, we know that USDA is making tremendous strides to increase 
access to online SNAP for small vendors. We want to ensure that these 
efforts continue. The pandemic has resulted in new innovations in 
online and grocer delivery models, and we would like nutrition 
incentive models to be competitive in this space. We need more 
investment and flexibility to make this happen, especially for farmers 
and small business operations. To keep pace with efforts in 
modernization, we need to be thinking 10-20 years down the road with 
funding and support provided for the integration of GusNIP programs 
into SNAP EBT processing technologies.
Senior Farmers['] Market Nutrition Program
    Next, I would like to talk about the Senior Farmers['] Market 
Nutrition Program, which provides low-income seniors with coupons that 
can be exchanged for locally-grown produce at farmers' markets, 
roadside stands, and CSA programs. The Senior Farmers['] Market 
Nutrition Program is a tiny, but mighty program. It is so much more 
than just food and can be part of the solution for reducing senior 
isolation. While the program provides nourishment for seniors and an 
additional source of revenue for small food producers, it is also a 
connection point for seniors. Food is the way that seniors are 
connecting with each other. Through this program they get to connect 
with the farmers, they get to see their neighbors, and they get to 
interact with their communities.
    In some of our senior housing centers, our program was the only 
source for fresh food during the pandemic. In one of our rural mountain 
communities, a low-income housing site had a bus that would typically 
bring the seniors to the farmers['] market to spend their coupons. 
During the pandemic, in order to protect their safety, they weren't 
able to bring the seniors to the market. And seniors were really 
mourning that loss. Luckily, the Senior Farmers['] Market Program 
allows up to 50% of the funds to be used on CSAs or bulk food 
purchases. This flexibility allowed us to take produce from producers 
at the farmers['] market to the seniors when they couldn't leave their 
homes. We also had kids send in pictures they drew to include in the 
produce bags, and it was a beautiful way to bring connection to seniors 
during a really isolating time. We know that isolation was exacerbated 
by COVID-19, but isolation both preceded the pandemic and will continue 
to be a challenge seniors face.
    Because this program is something that seniors look forward to, a 
one-time benefit is not enough to meet the need and maximize the 
program's potential benefits. Increasing the maximum amount seniors 
receive annually would allow more flexibility in program structure, 
such as a monthly benefit during the market season. For example, 
seniors could receive a $100 benefit broken down over a monthly period 
across the market season. More touch-points can help build 
relationships between seniors and farmers, and strong customer 
relationships often lead to increased food literacy, understanding of 
local availability, and better access to community resources.
    We also desperately need an investment in the administrative 
allocation for this program. Administrative costs are capped at ten 
percent, which means the amount of dollars that can be used for 
personnel time is really limited, making it hard to reach the 
communities that need the most support and assistance, especially in 
rural areas. Additional flexibility and investment in administrative 
dollars would help meet seniors where they are at and would result in a 
greater ability to provide equitable access to the program.
    One final point, we recognize that WIC FMNP is the sister program 
to SFMNP and falls under Child Nutrition Reauthorization. We would like 
to see the same flexibility offered under farm bill to be offered for 
WIC FMNP, including bulk purchasing and CSA purchasing
Community Food Projects Competitive Grants Program
    Finally, I would like to briefly mention the Community Food 
Projects Competitive Grants Program. While we have not been the direct 
recipients of a Community Food Project, we work with smaller food 
producers to help them submit proposals for CFPs. We see community food 
projects as the low-hanging fruit that helps to build capacity for the 
really small community organizations and producers to be able to apply 
for larger programs and projects, such as building their capacity to 
scale up to apply for GusNIP programs. It helps organizations test 
innovation at a smaller regional level. If we want to be able to meet 
the challenges that are facing the future of our local, regional, and 
national food systems, we have to provide space and resources for idea 
incubation and continue to center small community food projects and 
socially disadvantaged producers.
    In many cases, the Community Food Projects Competitive Grants 
Program is farmer's and organization's first introduction to USDA 
programs. As one of the lowest entry points, we see an opportunity to 
make this program as easy as possible for applicants. Providing strong 
technical assistance, simplifying the application process and reporting 
requirements, and removing or reducing the match requirement would help 
streamline entry for farmers and organizations and make it easier for 
them to equitably participate.
Closing
    I would like to conclude my statement by saying that our 
participation in these incredibly important programs has allowed us to 
be responsive to food system needs in unprecedented ways and times here 
in Arizona. It's allowed us to be more adaptive in linking and 
leveraging multiple efforts across USDA as a whole to benefit farmers 
and provide nutrition security to families. Thank you for the time to 
share our experiences with you today.

    The Chairman. Yes, thank you, Dr. Gruner. If you could wrap 
up for a moment there, your time has expired. But thank you.
    Ms. Moss, please begin where you are ready.

STATEMENT OF SPENCER C. MOSS, EXECUTIVE DIRECTOR, WEST VIRGINIA 
         FOOD AND FARM COALITION, INC., CHARLESTON, WV

    Ms. Moss. Thank you. Good morning and thank you for having 
me here today. My name is Spencer Moss. I am the Executive 
Director of the West Virginia Food and Farm Coalition. We are a 
nonprofit organization. And since we work at the intersection 
of farm viability and food access, we take advantage of Federal 
grant programs that allow us to pull resources into our rural 
communities.
    Today, I will briefly discuss two programs that we have 
utilized, even though I could also speak to Senior Farmers' 
Market Nutrition Program, Community Food Projects, Farmers' 
Market and Local Food Promotion Programs as well. I am speaking 
to two programs that are nutrition-based but also have 
fantastic economic development outcomes. And finally, I will 
make three brief recommendations to make Federal grant programs 
more accessible.
    So first, the Healthy Food Financing Initiative--the goal 
of this program is to improve food security in low-access 
communities through the establishment of new retail facilities, 
aggregation distribution hubs, and programming such as delivery 
programs. In 2019, we received one of these grants for 
$215,400. And, with this grant, we helped establish two brick-
and-mortar stores in downtown areas, and five corner store 
kiosks in existing businesses in rural Pocahontas County, West 
Virginia.
    Now this is a story of improved nutrition, but it is also a 
story of economic development. On average, these brick-and-
mortars have grossed $609,000 annually, and employ 4.5 full-
time and 5.5 part-time staff. And our work did not stop with 
the end of that grant. As a direct result of that grant, we 
established the West Virginia Rural Grocer Network where we 
provide valuable access to technical assistance and training to 
nascent or rural grocers. Most are just people who are stepping 
up to feed their communities and are leaving careers in the 
trades or in education. We also provide access to capital to 
purchase things like refrigeration equipment.
    The second program I am going to talk about briefly was 
that Gus Schumacher Nutrition Incentive Program, or GusNIP. We 
received FINI funds in 2018 to pilot a program that we would 
eventually call SNAP Stretch. And in 2020 and 2021, we received 
the GusNIP award and a COVID response supplemental award.
    So, SNAP Stretch doubles and triples SNAP EBT dollars--aka, 
formerly food stamps--at farmers' markets, on-farm stands, 
mobile markets, CSAs, and a growing number of local retailers. 
Can you tell I have said that a few times? So if a SNAP user 
comes to the market and they say I want to spend $10 of my 
SNAP, they are going to get $10 in market scrip to spend on any 
SNAP-eligible item. They are also going to get $10 in SNAP 
Stretch scrip to spend on fruits and vegetables. If they are a 
senior or if they have a child with them, they are going to get 
an extra $10.
    This is another program that certainly improves nutrition 
as it stretches the food budgets of low-income SNAP recipients, 
but it is also a major economic benefit to our communities, 
capturing both Federal food assistance dollars, Federal grant 
funds, and philanthropic funds. This program has grown each 
year since 2018 and in 2021, with the help of the folks behind 
me, we helped 35,000 West Virginians access this program, 
putting $1 million into the hands of our farmers and local 
businesses.
    Now, with my remaining time, I want to briefly talk on some 
recommendations. Matching requirements: In theory, grant-
matching requirements show that there is some community 
investment in the program. In reality, matching requirements 
disadvantage rural communities, low-income communities, 
communities of color, and small nonprofit organizations. 
Ninety-one out of 100 of the most disadvantaged communities in 
this country are rural, and only five to seven percent of 
philanthropic funds come into rural communities. So, thereby, 
there is less money available for rural communities to access 
which is needed to access these Federal funds.
    Number two, requiring grants to be reimbursable: The 
practice of reimbursable grants disadvantages smaller 
organizations and smaller communities that do not have the cash 
flow. To run a grant, you spend the money first, wait 4 weeks 
to 4 months to receive a reimbursement. It can oftentimes 
completely lock out communities from accessing these Federal 
funds.
    And last, programs need more funding. Many of these Federal 
programs have not received the caps in what community groups 
can apply for in many years. So what I could do with $500,000 
in 2016, when I received my first Farmers' Market Promotion 
Program grant, versus what I can do today are very different, 
given the conversation we have already had about inflation. And 
yet, as grantees, we are increasingly expected to be more 
innovative, dig deeper in communities, have more partners, have 
more stakeholders, and affect more community change. But those 
dollars don't go as far, even though we are very happy to meet 
all of those expectations.
    And with that, I am open for questions as well.
    [The prepared statement of Ms. Moss follows:]

    Prepared Statement of Spencer C. Moss, Executive Director, West 
         Virginia Food and Farm Coalition, Inc., Charleston, WV
    The West Virginia Food and Farm Coalition was founded in 2010 and 
its mission is to build the West Virginia food and agriculture system 
in a way that provides viable incomes for farmers and local food 
businesses and ensures all residents have access to locally produced 
food. With this in mind, the Coalition is always trying to marry 
economic development and advancement of the agricultural sector with 
food access/food security for West Virginia's communities.
    The following testimony will detail the Coalition's successes in 
implementation of several USDA grant programs that are either designed 
to increase nutrition and food security or increase economic 
development in the agricultural sectors. Through the Coalition's 
execution, we have been able to excel in both areas, further proving 
that nutrition programs are good for both the economy and the future of 
food access and security. Additionally, this testimony will explain how 
these grant programs have given wings to further programing at the 
community-organization level and allowed for the programs to layer 
together for maxim efficacy.
    Last, this testimony will make recommendations regarding these 
grant programs for ways that they can be more efficient and more 
equitable in low-income, low-resources, rural, and/or communities of 
color.
About Non-SNAP Nutrition Incentive Programs
   USDA/NIFA Gus Schumacher Nutrition Incentive Program 
        (GusNIP) (formally the Food Insecurity Nutrition Incentive FINI 
        program)--provides incentives to income-eligible consumers to 
        increase the purchase of fruits and vegetables and 
        prescriptions for fresh fruits and vegetables (Prescription 
        Produce program).

   USDA/RD Healthy Food Financing Initiative (HFFI)--aims to 
        improve access to healthy foods in underserved areas, to create 
        and preserve quality jobs, and to revitalize low-income 
        communities. The program aims to build a more equitable food 
        system that supports the health and economic vibrancy of all 
        Americans.

   USDA/AMS Farmers['] Market/Local Food Promotion Program 
        (FMLFPP)--are two grant programs under the same heading. The 
        Farmers['] Market Promotional Program funds projects that 
        develop, coordinate and expand direct producer-to-consumer 
        markets to help increase access to and availability of locally 
        and regionally produced agricultural products by developing, 
        coordinating, expanding, and providing outreach, training, and 
        technical assistance to domestic farmers['] markets, roadside 
        stands, community-supported agriculture programs, agritourism 
        activities, online sales or other direct producer-to-consumer. 
        The Local Foods Promotional Program funds projects that 
        develop, coordinate and expand local and regional food business 
        enterprises that engage as intermediaries in indirect producer 
        to consumer marketing to help increase access to and 
        availability of locally and regionally produced agricultural 
        products.

   USDA/FNS Farm-To-School (F2S)--Farm-to-School programming 
        can take on many forms including introducing garden education 
        to youth, developing youth entrepreneurs, building youth farms, 
        conducting educational youth-focused marketing, and developing 
        pathways to get more locally sourced produce in local schools.
Gus Schumacher Nutrition Incentive Program (GusNIP) Became SNAP 
        Stretch: How it Was Implemented in West Virginia
    First funded by a USDA/NIFA FINI grant in 2018 then a 2020 USDA/
NIFA GusNIP grant, and a supplemental USDA/NIFA GusNIP COVID Response 
and Recovery award in 2021, the SNAP Stretch program is a triple-
bottom-line win for communities! SNAP Stretch benefits low-income West 
Virginia residents and farmers by doubling and tripling SNAP/EBT 
purchases for fruits and vegetables at farmers' markets, on-farm 
stands, mobile markets, Community Supported Agriculture Programs 
(CSAs), and local food retailers. SNAP Stretch incentivizes purchases 
of fruits and vegetables from local markets/farmers and helps overcome 
three key food access issues seen in rural communities:

  1.  Many rural communities lack access to grocery stores where fresh 
            produce is available. ``Dollar stores'' litter rural 
            landscapes and these stores often do not offer fresh 
            produce. However, mobile and farmers['] markets offer an 
            endless supply of fresh fruits and vegetables during 6 
            months of the year providing valuable access to rural 
            community members

  2.  Many low-income folks, especially seniors, lack transportation to 
            grocery stores that are outside of the community. There are 
            dozens of West Virginian communities that require residents 
            to travel 45 minutes or more to access grocery stores. 
            Mobile markets and farmers['] markets are typically located 
            in the middle of communities, helping residents overcome 
            transportation barriers. In addition, as a result of big 
            box grocery stores exiting rural communities, there has 
            been an influx of locally-owned small grocery retailers 
            beginning to establish in West Virginia. These retailers 
            are located in the center of rural communities and are 
            willing to participate in programs like SNAP Stretch in 
            order to boost their sales, benefit local farmers, and 
            fully engage their community.

  3.  Often it is not financially feasible for families to purchase 
            fruits and vegetables as they are not shelf stable. 
            However, double and tripling SNAP dollars makes market 
            shopping thrifty and more financially feasible for cash-
            strapped families. There are countless anecdotal stories of 
            the SNAP Stretch program helping families, however, there 
            is one story of a family with four-children and they were 
            weekly market shoppers. The mother said on multiple 
            occasions that SNAP Stretch ``financially enabled her to 
            feed her children fresh fruits and vegetables.''
How it Works
    At participating farmers' markets a SNAP/EBT user will bring their 
card to a market staff representative or volunteer and ask to use any 
portion of their SNAP/EBT balance on purchases. Typically, the market 
will issue market scrip, such as tokens. Then, they will also issue 
``SNAP Stretch dollars'' in the form of a similar but distinct scrip. 
For example, if the user asks to use $20 from their SNAP/EBT card, they 
will receive $20 in SNAP tokens and $20 in SNAP Stretch tokens. If the 
user has children or they are a senior citizen, they will receive an 
additional $20. So, a family with seniors and/or children would have 
$40 to spend at the farmers['] market on fruits and vegetables in 
addition to their $20 that could be spent on anything that is SNAP-
eligible. Similarly, participating local food retailers offer a 
discount at the register for allowable items before charging the SNAP/
EBT card. Detailed documentation is kept and the Coalition reimburses 
the market/retailer for the SNAP Stretch redeemed.
    One of the innovations in the SNAP Stretch program, as compared to 
national programs, such as Double Dollars and Double Up Bucks, is that 
there is an additional match (1:2) for families with children. This 
innovation came from an idea tested by the West Virginia University 
Family Nutrition Program (WVUFNP). WVUFNP began hosting a series of 
pop-up farmers['] markets at schools and child-care centers. These 
children were given $4 in market bucks to spend on fruits and 
vegetables of their choosing. Over 600 parent surveys revealed that 91% 
of participating youth ate all of the produce that they purchased 
because they had the agency to choose. It is with this in mind that 
SNAP Stretch has continued this practice that not only supports 
families, it develops youths pallets for fruits and vegetables, and 
further supports West Virginia Farmers.


Program Success!
    Prior to the inception of the SNAP Stretch Program, SNAP/EBT 
purchases at West Virginia farmers['] markets were nearly nonexistent. 
In fact, many farmers['] markets paid the necessary internet and point 
of sale terminal fees for ideological reasons and not because there was 
a return on investment in SNAP/EBT sales. In a few short years, SNAP 
Stretch has quickly expanded the use of SNAP/EBT dollars for fruits and 
vegetables at local markets:
Food Access Dollars in West Virginia Farmers['] Markets


    Farmers' market vendors and small businesses have seen the benefit 
of the program as SNAP Stretch dollars are reimbursed directly to them. 
Because of this program, farmers have invested in additional acres of 
land for an increased output of products to be sold at markets. One of 
the participating markets normally closes their business for the winter 
in September, however their SNAP Stretch sales allowed them to remain 
open for an additional 3 months through the end of the year. ``We paid 
$165,171 to [our county's] businesses and fellow farmers in 2021 for 
their goods and services,'' the market owner told the Coalition. ``We 
have also teamed together with several farmers in the area and are 
working to open our own meat processing facility in [our county]. Our 
added income with SNAP Stretch has made all of this possible.''




    Finally, many SNAP Stretch recipients speak highly of the program's 
positive impact on their overall health. One participant shared the 
impact of the program on his life with a video testimonial, saying ``if 
we didn't have the EBT [SNAP Stretch] program where it doubled and 
tripled the dollars, I would never be able to afford to eat healthy 
because health food costs more''. Market managers regularly share 
stories like these with the Coalition as it becomes clear what a strong 
impact SNAP Stretch incentives are having.
Healthy Food Financing Initiative (HFFI) Became WV Rural Grocer 
        Network: How it Was Implemented in West Virginia
    The USDA Healthy Food Financing Initiative (HFFI) aims to improve 
access to healthy foods in underserved areas, create and preserve 
quality jobs, and revitalize low-income communities. The program aims 
to build a more equitable food system that supports the health and 
economic vibrancy of all Americans. In 2019-2020, the Coalition 
received an HFFI grant to help establish two brick-and-mortar grocery 
stores (Blue Ridge Bee Company in Princeton, WV and The Public Market 
in Wheeling, WV) and five corner kiosks in existing businesses along 
Route 219 in Pocahontas County to address barriers to food access and 
support a more equitable food system. This funding allowed the 
Coalition to (1) develop a grocery store toolkit (2) provide technical 
assistance to participating nascent grocers (3) provide access to 
necessary supplies and equipment to open the groceries, and (4) 
strengthen a network of grocers throughout West Virginia.
Program Success!
    Each year in compliance with HFFI reporting, the Coalition collects 
end-of-the-year data from these participating grocers. While the HFFI 
investment was $215,400, and the projects all had additional private 
investment, just 2 years worth of data indicate that there was a 
significant return on investment in these grocers:
Average Annual Sales between Brick and Mortar Stores and Decentralized 
        Kiosks in 2020-21
        
        
    Through the HFFI project, the Coalition identified two of the 
biggest barriers in achieving sustainability in an ever-changing 
landscape amongst grocers: (1) reliable equipment and (2) the skills to 
understand their finances in order to make appropriate business 
decisions. Assessment, expert technical assistance, coaching, and 
access to capital are required to support these businesses, thus, the 
WV Rural Grocer Network (WVRGN) was born. In addition to providing 
access to technical assistance, coaching, and capital, the [WVRGN] also 
creates a market for locally grown produce and value-added products.
    In addition to HFFI reporting, the Coalition collects end-of-the-
year data from all of its WVRGN participants, the 2020-2021 results 
include:
Average Annual Sales of WV Rural Grocer Network Participants 2020-21


    Blue Ridge Bee Company is one of the grocers that got their start 
as part of the HFFI project. The owners, Will and Emily, began 
harvesting honey in 2014 and noticed a need for a cost-effective way to 
mitigate varroa mites in their hives that didn't include harsh 
chemicals and after much research, engineered their own BRBC Oxalic 
Acid Vaporizer. After success through online sales, Will and Emily 
envisioned a storefront to sell their vaporizer, beekeeping supplies, 
and honey. Their plan was to use the sales of beekeeping equipment to 
offset the overhead costs of running a grocery that would benefit their 
main street community. With support from HFFI and the Coalition, they 
opened their store in 2019 in Princeton, WV. Once open, the vision 
expanded and today the store includes value-added products such as jams 
and jellies, fresh produce, meat, eggs, dairy products, hand-dipped ice 
cream, and much more!
How do USDA-Funded Nutrition Programs Work Together?
    The Coalition views its work as the intersection between economic 
development and food access. Through programming such as the WV Rural 
Grocer Network or SNAP Stretch, the Coalition seeks to increase 
farmers' and food-based entrepreneurs' bottom line while increasing 
West Virginians' access to fresh local fruits and vegetables. These 
efforts are combined to support a more equitable food system in the 
state. Nottingham's Store is a prime example of how this work 
intersects. Located in Clay County, West Virginia, Nottingham's Store 
is a family-owned and operated business that offers groceries, 
hardware, plumbing supplies, livestock feed, night crawlers/chicken 
livers for fishing, knives, ammunition, and numerous country sundries. 
In the businesses' 100+ years in operation, it has seen economic 
declines in their county. Clay County is ranked as the second lowest 
county in the state in per capita and household income. 27.30% live in 
poverty including 37.40% children. 29.8% of the population receive 
SNAP/EBT benefits. With transportation being a large barrier to fresh 
produce, it is difficult for the population of Clay County to travel 
out-of-the-county to a full-service grocery store.
    Nottingham's Store, however, can see the need its community has for 
food assistance and more fresh produce options. Nottingham's has also 
started making business decisions with the changing of the time to meet 
the needs of their community while also being a viable business. In the 
fall of 2021, Nottingham's Store began to participate in the WV Rural 
Grocer Network and SNAP Stretch with the Coalition. After only a few 
months of participation this small, family-owned business distributed 
$9,000 in SNAP Stretch incentives, while capturing $9,000 in Federal 
assistance dollars that will remain in Clay County to spur economic 
growth and help the Nottingham's adapt their business model to the 
changing landscape around them.
    ``We want to help our community and customers and hopefully (with 
SNAP Stretch) can support our local farmers more instead of big box 
stores,'' said Bryan Nottingham.
    The business is situated between the Elk River water trail and a 
newly developed rail trail which is attracting visitors and new 
customers to the area--kayakers, hikers, mountain bikers, and nature 
enthusiasts. Currently, there are few restaurant options in Clay County 
so the owners of Nottingham's saw an opportunity to add a to-go kitchen 
that offers pizza, sandwiches, and daily specials.
    As participants of the WV Rural Grocer Network, the Coalition is 
supporting the Nottingham's through technical assistance and access to 
the Revolving Equipment Fund. Additionally, the extra income generated 
from SNAP Stretch allowed the Nottingham's to build out their kitchen 
ahead of schedule. ``This business has been around for over 100 years, 
we want to see it last another 100 with future generations of 
Nottingham's,'' said Pauline Nottingham, when asked about the 
motivation for changes and updates to the store.
Economic Development Programs Can Develop Nutrition
    The Coalition has received a 2016 Farmers['] Market Promotional 
Program and is currently a subcontractor on a Local Foods Promotional 
Program. These two programs are aimed at economic development within 
the local agricultural sector. However, these programs easily enhance 
nutrition in communities. For example, currently, the Coalition helps 
operate the Go Growcery Market. This mobile cold-storage trailer 
aggregates produce from local farmers and takes it into rural 
communities that lack access to grocery stores and sets up a weekly 
farmers['] market. This program is especially successful with seniors!
    Farm-to-School grants are aimed at education, economic development, 
and nutrition. Depending on the implementation plan, all three outcomes 
can be achieved! In the Coalition's current Farm-to-School grant 
activities, we're installing gardens at elementary schools in 
partnership with teachers to both teach about agriculture and develop 
the pallet for the taste of vegetables with young children. We're also 
able to engage farmers and develop systems for farmers to sell their 
fresh produce into the school system that will increase children's 
access to more nutritious fresh foods. Also in development is a youth-
ran business that sells fresh produce and value-added products to 
communities!
Future Program Recommendations
Match Requirements
    It is understood that most grant programs have matching 
requirements--in theory, it shows that the community is invested in the 
project. In reality, matching requirements disadvantages rural 
communities, low-resource communities, communities of color, and 
smaller nonprofit organizations. These communities inherently have far 
less access to funds than affluent communities and urban communities. 
According to a study commissioned by the Bill and Melinda Gates 
foundation 91 of out 100 of the most disadvantaged communities are 
rural and 20% of the country's population reside in rural areas 
(Carlson and Cook 2021).* However, according to multiple sources, only 
5-7% of philanthropic dollars are invested in rural communities.
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    * Editor's note: there is neither a link, nor an end note citation, 
for this in-text citation. It has been reproduced herein as submitted.
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    Concessions in matching requirements for rural communities, low-
resource communities, communities of color, and smaller nonprofit 
organizations should be made in order to encourage projects that 
benefit these communities.
Requiring Grants to be Reimbursable
    Currently, the vast majority of Federal grants are considered to be 
``reimbursable.'' This means that organizations or communities must 
first spend the funds first and then receive reimbursement. While some 
grant programs do allow for pre-approved ``advances'' on known 
expenses, the practice of reimbursable grants creates two challenges: 
(1) it disadvantages smaller organizations who do not have the cash 
flow to manage a grant and wait a minimum of 4 weeks to 4 months for 
reimbursement. It often requires these organizations to take out lines 
of credit and pay interest fees instead of investing funds into 
communities, and (2) it locks smaller communities or community 
organizations out of applying for funds completely, simply because they 
are unable to operate on a reimbursement basis.
    Requiring that grants are reimbursable locks smaller community 
groups out of the ability to apply--or it requires that groups take out 
a line of credit and then pay interest rates. Some grants allow 
reimbursement within 24 hours and some take 4-8 weeks.
Use of Intermediaries Organizations
    The use of intermediary organizations can be helpful. Organizations 
such as the Gretchen Swanson Center and Fair Food Network provide 
useful technical assistance and data collection support to 
organizations.
    However, using an intermediary to administer the grant makes 
community groups essentially a ``sub-awardee,'' which significantly 
increases the administrative paperwork in order to receive 
reimbursements, ultimately increasing overhead costs. While it is 
sometimes helpful to have the support an intermediary can provide, it 
is usually easier and less time consuming to operate the grant, dealing 
directly with staff at the USDA.
Length of Time Between the Program Announcement and Submission 
        Deadlines
    Annually, the GusNIP Request for Applications (RFA) is made 
available to the public only 60 days in advance of the submission 
deadline. Significant changes were made between 2019-2020 in the 
program funding requirements. Most noticeably, priority areas in 
program design and preferred firm types along with the allowable 
options for issuing nutrition incentive dollars. Following the 2020 
RFA, every annual request has continued in this pattern. While it is 
helpful that program operators are listening and responding to 
feedback, more than 60 days would help community-based organizations 
submit more thoughtful informed applications as preference is given to 
those grantees who demonstrate coordination with multiple stakeholders, 
such as farm organizations, nutrition education programs, cooperative 
extension services, public health departments, private and public 
health insurance agencies, cooperative grocers, grocery associations, 
and community-based and non-governmental organizations. It can be 
challenging to coordinate all of these stakeholders on a short 
schedule.
Programs Need More Funding
    In 2016, the Coalition received a Farmers['] Market Promotional 
Program grant for $500,000 and applied for another in 2022. The 
difference in what can be achieved with $500,000 in 2016 vs. 2022 is 
astoundingly different. Many of the aforementioned programs have not 
experienced an increase in the amount of funding that can be applied 
for in many years. With higher costs associated with travel, having 
staff, supplies, construction, etc., these programs need higher funding 
caps.
    To illustrate this point even further, GusNIP has increased 
emphasis on recruiting brick-and-mortar retailers over farmers' markets 
to participate in the program, with the rationale being that brick-and-
mortar stores are open longer hours. However, without a sufficient 
increase in funds to enable this expansion, there often isn't enough of 
an incentive for grocery stores to join the program, given the 
additional administrative oversight that they incur.
    Brick and mortar retailers operate longer hours and often have more 
registers and employees. This creates an increased paperwork and 
reporting burden for these firms, as well as increased incentive money 
required to operate SNAP Stretch. Brick and mortar firms often require 
additional onboarding effort and training, accounting for the increased 
time commitment and travel per market for program staff. When the 
GusCRR grant was introduced with an increased emphasis on brick-and-
mortar retailers, the grant funds were not increased to account for 
these considerations.
Concluding Thoughts
    The Coalition has continued these programs launched with USDA FINI 
and HFFI funding and is always finding new and exciting partnerships to 
work with. One such partnership is Keep Your Faith Corporation, Inc 
(KYFC) located on the West Side of Charleston, WV. KYFC is a community-
based organization working to grow and cultivate opportunity and 
support community through programs centered around behavioral health, 
food insecurity, and workforce development.
    In partnership with the Coalition, and with American Rescue Plan 
Funding, KYFC is developing Miss Ruby's Corner Market, a community-
owned grocery store, that will provide healthy food access and will 
employ youth from within the community to help grow food, stock, 
manage, and conduct community engagement. This store will also accept 
SNAP Stretch and engage in a number of community-based programs that 
other NGO and University Extension Services have to offer--all the 
economic development, food security, and better nutrition for the 
community.













    The Chairman. Thank you, Ms. Moss. And now Mr. Smittcamp.

STATEMENT OF WILLIAM S. ``BILL'' SMITTCAMP, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, WAWONA FROZEN FOODS, INC., CLOVIS, CA; ON 
           BEHALF OF AMERICAN FROZEN FOODS INSTITUTE

    Mr. Smittcamp. Thank you, Chairman Scott, Ranking Member 
Thompson, and distinguished Members of this Committee. I thank 
you for the opportunity to speak with you today about USDA 
feeding programs and how they can best serve the consumers, 
especially the most vulnerable and underserved populations. I 
am Bill Smittcamp, President and CEO of Wawona Frozen Foods in 
Clovis, California, and I am representing the American Frozen 
Foods Institute. At Wawona, we grow and process over 125 
million pounds of fresh and frozen fruits and nutritious 
produce and products that we supply worldwide to sectors such 
as the school lunch program, the foodservice industry, retail, 
and we are also an ingredient supplier. We have been in 
business since 1963, and we are honored to have been partners 
with the USDA for over 35 years, serving families who 
participate in the national school lunch program and as well as 
food stamps.
    Personally, I am passionate about feeding communities not 
just in my hometown, but among populations around the 
community. Family businesses and community are a way of life 
for me and my family. And I think this is very important that 
we are here today.
    We believe households are best served when they have access 
to all forms of nutritious foods, just as my family does. We 
know that USDA nutrition programs have been successful in 
bringing fresh foods to recipients. However, there is an 
opportunity to include and promote frozen foods to enhance 
these programs and help ensure families have access to high-
quality nutrition throughout the year, regardless of their 
geographic location. This is especially true in programs such 
as GusNIP--in the Produce Prescription Program, FDPIR, and 
consumer education through programs such as SNAP-Ed.
    When we think about strengthening these programs in the 
2023 Farm Bill, there are three main components I would 
encourage you to consider. Americans fall far short of meeting 
recommended intakes of produce and therefore feeding programs 
intended to increase produce consumption should promote all 
forms of produce. The U.S. Dietary Guidelines for Americans 
recommend consumers eat all forms of fruits and vegetables, 
including frozen, fresh, canned, and dried, to meet the 
recommended daily intakes. Frozen foods offer a cost-effective 
and pragmatic way for people to meet these intakes.
    Second, the frozen food advantage. The frozen food promotes 
a sustainable food system, especially one that minimizes food 
waste. Frozen foods are critical to fighting food waste due to 
the extended shelf life and proportional serving that help 
consumers prepare just the right amount of food that they need 
to eat. For example, families currently throw away over $2,200 
a year in food waste, but frozen foods are pre-measured, ready 
to serve, their longer shelf life than refrigerated or fresh 
foods, so households can avoid their financial waste by 
utilizing frozen products.
    And then third, the supply chain stability. We should 
consider that freezing is like nature's pause. It allows us all 
to enjoy just-baked, just-harvested, just-crafted food at our 
convenience without losing any of the freshness or its 
nutritional benefit. For example, Mother's Day, we just 
celebrated all of our mothers and the strawberry season was 
ramping up. And then, that Sunday, we celebrated with 
strawberry shortcakes. But then what happened on Monday? There 
was no market after that. That is where the frozen food 
industry steps in as a safety net and takes those strawberries 
on, freezes them, puts them in 4 ounce fruit cups for the USDA 
School Lunch Program or for the TEFAP program. And this is 
where I believe that we need to improve the ability to get 
frozen into these programs.
    Unfortunately, we often hear that, due to lack of funding, 
there is lack of freezer capacities for schools, food banks, 
pantries, retail locations, and that these outlets cannot or 
will not accept frozen product. The real point here I am trying 
to make is that our peach season is 4 months, all during when 
school is out. We can have frozen peaches all year round. You 
can have them in November, December, January when it is done. I 
thank you for your time.
    [The prepared statement of Mr. Smittcamp follows:]

  Prepared Statement of William S. ``Bill'' Smittcamp, President and 
                                 Chief 
Executive Officer, Wawona Frozen Foods, Inc., Clovis, CA; on Behalf of 
                    American Frozen Foods Institute
    Chairman Scott, Ranking Member Thompson, and distinguished Members 
of the Committee, thank you for the opportunity to speak with you today 
about USDA feeding programs and how they can best serve all consumers, 
especially the most vulnerable and underserved populations. I am Bill 
Smittcamp, President and CEO of Wawona Frozen Foods located in the San 
Joaquin Valley in Clovis, CA, and representing the American Frozen 
Foods Institute. At Wawona, we grow and process over 125 million pounds 
of fresh fruit into nutritious frozen fruit products that we supply 
worldwide to sectors such as schools, foodservice, retail and as an 
ingredient supplier.
    We have been in business since 1963, and we are honored to have 
been partners with USDA for over 35 years to serve families who 
participate in the National School Meals Program, as well as TEFAP. 
Personally, I am passionate about feeding communities, not just in my 
hometown but among populations around the country. Family, business, 
and community are a way of life for me and my family . . . not to 
mention peaches.
    We believe households are best served when they have access to all 
forms of nutritious foods, just as my family does. We know USDA 
nutrition programs have been successful in bringing fresh foods to 
recipients. However, there is an opportunity to include and promote 
frozen foods to enhance these programs, and help ensure families have 
access to high quality nutrition throughout the year, regardless of 
their geographic location, available time to prepare meals, and cooking 
skills. This is especially true in programs such as [GusNIP], in both 
incentive and produce prescription programs, [FDPIR], and consumer 
education through programs such as SNAP-Ed. When we think about 
strengthening these programs in the 2023 Farm Bill, there are three 
main components I'd encourage you to consider.
1. Americans fall far short of meeting recommended intake levels of 
        produce and therefore, Federal feeding programs should promote 
        greater consumption of these important foods. Feeding programs 
        intended to increase produce consumption should promote all 
        forms of produce.
    The U.S. Dietary Guidelines for Americans recommends consumers eat 
all forms of fruits and vegetables, including frozen, fresh, canned, 
and dried, to meet the recommended daily intake. Frozen foods offer a 
cost-effective and pragmatic way to help people meet these nutritional 
needs.
    USDA's Thrifty Food Plan recognizes the value of frozen food in 
helping consumers eat a diet that meets Federal nutrition guidelines. 
This is thanks to the benefits that frozen food offers in meeting 
value, time, and preparation needs. Frozen food is delicious, 
nutritious and helps families meet their food and nutrition goals while 
ensuring they spend less money over time.
    Additionally, results from menu modeling * show that realistic, 
balanced and affordable menus featuring mostly frozen foods can meet 
energy, nutrient and cost goals based on recommendations from the 
Dietary Guidelines for Americans, MyPlate and the USDA Thrifty Food 
Plan.
---------------------------------------------------------------------------
    * https://frozenadvantag.wpengine.com/achieve-the-dietary-
guidelines-for-americans-with-frozen-foods/.
---------------------------------------------------------------------------
    When studying produce consumption in the United States, data 
indicates that many consumers do not eat more produce because they do 
not know how to prepare it.\1\ Frozen vegetables are peeled and 
trimmed, ready to cook with easy-to-follow cooking instructions on 
package. In addition, research shows that the nutritional value of 
frozen fruits and vegetables is equal to, and in some cases better 
than, fresh produce.2-3   We need to ensure consumers are 
encouraged and able to purchase the form of produce that is right for 
their family and meets their ease of preparation and cost needs.
---------------------------------------------------------------------------
    \1\ https://fns-prod.azureedge.us/sites/default/files/resource-
files/SNAP-Barriers-Summary.pdf.
    \2\ Bouzari, A., D. Holstege and D.M. Barrett. 2015. Vitamin 
Retention in Eight Fruits and Vegetables: A Comparison of Refrigerated 
and Frozen Storage. Journal of Agricultural and Food Chemistry, 63(3): 
957-962.
    \3\ Li, L., et al., 2017. Selected analyses of fresh, fresh-stored, 
and frozen fruits and vegetables. Journal of Food Composition and 
Analysis, 59: 8-17.
---------------------------------------------------------------------------
2. The Frozen Advantage: frozen foods promote a sustainable food 
        system, especially one that minimizes food waste.
    Frozen foods are critical to fighting food waste due to their 
extended shelf-life and pre-portioned servings that help consumers 
prepare just the amount of food they plan to eat. For example, families 
currently throw out up to $2,275 worth of food each year,\4\ but frozen 
foods are often lower in cost-per-serving and have a longer shelf-life 
than refrigerated or fresh foods, so households can avoid this 
financial waste by utilizing frozen products.
---------------------------------------------------------------------------
    \4\ https://www.nrdc.org/media/2012/120821.
---------------------------------------------------------------------------
    This translates to consumers saving money and benefits to the 
environment by reducing Greenhouse Gas (GHG) emissions in landfills 
from food waste. This reduced waste can also help lessen the 
environmental impact across the entire food production chain, including 
at the distribution and retail level.
3. Supply chain stability: We should consider that freezing is like 
        nature's pause button. It allows all of us to enjoy just-baked, 
        just-harvested, and just-crafted food at our convenience 
        without losing any of the freshness or nutritional benefits.
    For example, the day after Mother's Day, suddenly there is a sharp 
decrease in demand for fresh strawberries. So, we in the frozen 
industry are the safety net for the strawberry growers for the fresh 
market that could [plummet]. Therefore, we now freeze those 
strawberries, so that the nutritious strawberry could be eaten any time 
of the year and not wasted. Access to food year-round is one reason why 
USDA's feeding programs are extremely important, and why we should work 
together to strengthen them.
    Unfortunately, we oftentimes hear that, due to a lack of freezer 
capacity at schools, food banks, pantries, and retail locations, that 
these outlets cannot or will not accept frozen foods. How can we work 
together to solve these infrastructure challenges and ensure that 
consumers can access multiple forms of produce for their nutritional 
needs at any time? The real point that I am trying to make here, is 
that our peach season in the U.S. is 4 months long. With frozen peaches 
in particular, the recipients and school kids can have a delicious, 
healthy fresh-frozen peach during any season.
    In conclusion, as you craft the 2023 Farm Bill, please ensure that 
frozen foods are allowed and encouraged as a solution to increasing 
nutrition access and ending hunger. In any program that is specifically 
geared to increase produce consumption, we would like to see families 
have the option and incentive to purchase all forms of nutritious 
foods: fresh, frozen. dried, and canned.
    In the U.S. in 2022, I am saddened we are still talking about how 
to help hungry people, yet we are. But the frozen industry stands ready 
to offer innovative solutions and work with you to make sure that all 
Americans have access to the bounty of products, the fruits of our 
labor, if you will, we food producers can offer. I thank you and 
``Think Peaches.''

    The Chairman. And thank you so much, and thank all of you. 
You have all given wonderful, informative testimony.
    And now we will move to our questions at this time. Members 
will be recognized for questions in order of seniority, 
alternating between Majority and Minority Members. You will be 
recognized for 5 minutes each in order to allow us to get in as 
many questions as possible. And as always, please do keep your 
microphones muted until you are recognized so we can eliminate 
any background noise.
    And now let me start off. I recognize myself for 5 minutes.
    Mr. Waide, you have delivered some very troublesome news to 
this Committee, and it is news that is daily on all the 
newscasts. People are not just suffering from the lack of food 
but the lack of ability to get the food with the high prices. 
What I want you to do, if you can, is share with us and the 
nation how serious this problem is. We have veterans not 
getting--tell us how serious this is. And you are in a position 
to best tell us Members of Congress what do we need to do right 
now to help with this food crisis, with Feeding America and 
your fellow community food banks? We are determined to make 
sure that nobody goes hungry in our nation. Everything almost 
you can do without, but food you can't, so it is critical. Tell 
us what we need to do here in Congress to help you and to 
address this food accessibility crisis.
    Mr. Waide. Well, thank you for the question, Mr. Chairman. 
And, as I said in my testimony, lines at food banks are now 
increasing again. We went through a period over the latter half 
of last calendar year where we were really seeing a reduction 
in demand as people were getting back on their feet. But the 
impact of rising gas prices, food prices, and other basic needs 
is having a serious impact.
    I just had a conversation at the end of last week with a 
couple of our feeding program partners in a couple of counties, 
historically known as affluent suburban counties north of 
Atlanta, in Cobb County and in north Fulton County. And those 
partners are telling us how the client base that they serve is 
growing. And more troubling is that in that client base there 
are people who are showing up who, just like in the early days 
of the pandemic, have never needed help getting food before in 
their lives.
    The Chairman. Yes.
    Mr. Waide. These are new clients. They had found a way to 
survive the pandemic, and now they are facing trouble.
    What we need help with in the Feeding America network, and 
for my food bank in particular, is, as we look forward to the 
farm bill, that we need increased mandatory funding for TEFAP 
commodities. TEFAP commodities are really high-quality, 
nutritious food products that offer a lot of variety. They 
offer high nutritional content, and they help us ensure that 
our client base has access to the food.
    The Chairman. So, you have given us one, that TEFAP 
funding. What is it now, and how much additional do you need, 
and how--so we can address----
    Mr. Waide. Well, we have enjoyed tremendous TEFAP access 
and other nutrition program access during the pandemic, and 
that provided us with a huge influx of food during that 
critical time. We are in the process right now of those 
supplemental forms of funding having been exhausted, of 
reverting back to the baseline of TEFAP. And what that means is 
that our access to TEFAP in the next 18 months is going to 
decline significantly. We are asking for an increase to $450 
million in annual TEFAP funding.
    The Chairman. That $450 million increase into the farm 
bill, is that----
    Mr. Waide. In total TEFAP funding of----
    The Chairman. Okay. We want to work with you on that. Our 
staff will follow up on that because I agree with you. I wanted 
to get to you also. But in the spirit of what I say, my time 
has expired. Ranking Member, maybe you will----
    Mr. Thompson. Mr. Chairman, you are a man of your word.
    The Chairman. Yes, sir, thank you.
    Mr. Thompson. Thanks once again to all the witnesses.
    The recently announced White House Conference on Food, 
Nutrition, Hunger, and Health, which is really kind of 
interesting, no outreach from the White House on this. You 
would think you would want to engage the authorizing Committee 
when it comes to nutrition. But they advertise it as an event 
to accelerate progress and drive significant changes to end 
hunger, improve nutrition and physical activity, reduce diet-
related disease, and close disparities around them. And while 
that mission is laudable, as I have said before, the listening 
sessions to date have left a lot to be desired, including a 
strong focus on just SNAP-specific policy and not much else, 
including the programs that you all are here to discuss. So for 
any of the witnesses, what has been your participation thus far 
in that process? Do any of the organizations represented here 
have a role--I assume Feeding America.
    Mr. Waide. So, I know Feeding America, the national 
organization, is in conversation with the various organizers of 
the conference. And in particular, what our network is working 
to do is to help identify folks who are receiving--the food-
insecure families, people with lived experience, who can talk 
about the challenges they experience day to day, and have those 
folks participate in a variety of listening sessions to inform 
the content of the conference. And then I think there are other 
conversations going on among Feeding America folks that I 
haven't been privy to personally, but I know that we are 
engaged in the planning around the conference.
    Mr. Thompson. Okay. Any other organizations represented 
here today have received an invitation to be engaged in this 
conference? Not seeing it? Okay. When Feeding America has 
been--and if you were invited--which I am really surprised by 
the fact that you weren't. So if you weren't, say, and you were 
king for a day, what would you like to see? What would this 
conference look like if you were able to plan it, organize it, 
implement it? What kind of conversations? What would it look 
like?
    Mr. Smittcamp. Thank you, Ranking Member. We have been.
    Mr. Thompson. Okay.
    Mr. Smittcamp. As I said, we have been invited, and I think 
what we would be looking for from the conference would be just 
equal access, fresh, frozen, canned, so that there was, again, 
parity in everything that we do. And that would be really what 
we are looking for. We don't want the big side of it. But our 
products are better transported than some of the fresh side of 
things.
    Mr. Thompson. Very good. Any other thoughts which you would 
like to see this conference turn out to be? Please, Ms. Moss.
    Ms. Moss. Certainly. I think it would be really interesting 
to see an emphasis on rural communities, and particularly the 
farmers that support feeding people in this country. I think 
there is a lot of emphasis placed on commodities and whatnot, 
but given the mobility issues of food that we have seen 
throughout the pandemic, I think an emphasis on our local 
agriculture and our local farmers would be significant and 
really looking at rural communities. So that is what I would 
love to see an emphasis on.
    Mr. Thompson. Very good. Thank you. Mr. Waide, any thoughts 
of, you are obviously--your organization is going to be a part 
of the process. If you had the ability to help shape this 
agenda, those discussions, anything particularly you really 
want to make sure this would look like?
    Mr. Waide. Yes, I would just offer three thoughts. I think, 
first, as I said, it is really important that we listen to 
food-insecure families and understand what life looks like on 
the ground for them firsthand as the first sort of data point 
in understanding what solutions we need to develop to help them 
have food access. Let's listen to them first.
    I think, second, we have to think about the hunger issue, 
the food insecurity issue more broadly as an economic 
insecurity issue and think about what it takes comprehensively 
to help people have access to financial opportunity that would 
prevent food insecurity.
    And then I think, third, I would want to see us in that 
conversation with alignment on the goals and metrics of what 
success looks like. I think sometimes we don't have alignment 
on metrics and goals, and that leads to a lot of disagreement 
about inputs. If we can get aligned on goals and metrics that 
would help us develop better solutions.
    Mr. Thompson. Very good. Well, Mr. Chairman, thank you so 
much. My time has expired.
    The Chairman. The gentleman from California, Mr. Costa, who 
is also the Chairman of the Subcommittee on Livestock and 
Foreign Agriculture, is now recognized for 5 minutes.
    Mr. Costa. Thank you very much, Mr. Chairman, for this 
hearing. It is important as we set the table, literally and 
figuratively, for next year's farm bill. And I want to thank 
the witnesses. I think you have all underlined in various ways 
what I like to say, and that is that food, food that we grow in 
America is a national security issue.
    And when we talk about the SNAP program, otherwise referred 
to as food stamps, but the other programs that ought to be 
touched upon in one fashion or another, what we are talking 
about is America's safety net, America's safety net to ensure 
that in fact all Americans have quality and affordable food. 
But in some cases, we know we have real challenges. And 
certainly, this pandemic pointed out the challenges we have, 
especially among those who live in food deserts, those who have 
other difficult challenges in terms of their economic income 
and being able to have a decent meal on their dinner table. So 
many of the children today we know in nutrition programs get 
their best meal of the day in the school lunch or breakfast 
program. And of course, when we don't have school going on, 
that is more difficult for those children.
    Obviously, not time to cover all of the areas; but, Mr. 
Bill Smittcamp, Wawona Foods in Clovis, California, I have 
worked with you and your family now for three generations. And 
I want to commend you not only for your efforts and being a 
pioneer in terms of the frozen food production and the many 
fruits that you are able to provide over an entire year, as you 
noted in your testimony, but also the importance of the 
nutritional value of that program and the challenges faced in 
making that available. Obviously, freezer capacity and other 
factors and supply chain are critical.
    But you and I have discussed this in the past, Bill, as to 
what the USDA qualifies that should be included or not included 
in the school lunch programs in terms of what is nutritious. 
And we grow so many products out in California, and around the 
country. What are your thoughts in terms of how we do a better 
job?
    Mr. Smittcamp. Well, I think the USDA currently is doing an 
excellent job reaching out. We just had a meeting with them 
yesterday in regards to innovation, how we can get more 
products into them. But during the pandemic, for example, we 
were very instrumental with fruit cups and individual servings 
rather than the #10 can or a way where fresh fruit was not 
quite available during the winter months. There were innovative 
serving sizes that the frozen industry could apply to all these 
things.
    We just think that, with what we are doing, that we 
continue to move forward with frozen in the language. I think 
this is part of what----
    Mr. Costa. Is freezer capacity an issue, especially in our 
schools?
    Mr. Smittcamp. No, I think we have the capacity to supply 
more frozen foods to the world----
    Mr. Costa. How about food banks?
    Mr. Smittcamp. Pardon me?
    Mr. Costa. How about our food banks?
    Mr. Smittcamp. And the food banks. I think there again, we 
are the safety net, the frozen food side, whether it is 
freezers of fruits or vegetables.
    Mr. Costa. When the height of the pandemic and having 
people that had never been--Mr. Waide, as you indicated--to a 
food bank in their lives, put more pressure and demand on the 
services of food banks. I found some of the food banks in our 
area having challenges in terms of being able to make that 
supply. The point you made to the chair in your closing 
testimony talked about increasing funding. And I think one of 
the debates we are going to have here in Committee next year is 
baseline funding. If we are going to be able to expand capacity 
here in a host of areas, we are going to have to deal with the 
baseline funding. Have the food banks in the country come up 
with any suggestions on how we tackle that issue?
    Mr. Waide. In terms of expanding baseline funding?
    Mr. Costa. Right.
    Mr. Waide. Well, I mean, I don't know how to solve the 
budgetary----
    Mr. Costa. No, I am not expecting you to do that.
    Mr. Waide. But I----
    Mr. Costa. Do you have recommendations in terms of 
anticipating what the need may be?
    Mr. Waide. Yes, so our recommendation is $450 million in 
baseline funding.
    Mr. Costa. Nationwide?
    Mr. Waide. Nationwide, yes.
    Mr. Costa. All right. You talk about waste in our food 
supply chain, and you noted $2,100. How do we get at the waste 
that we need to cut at all ends of the food supply chain? My 
time is obviously almost over. But I would like you to submit 
that to the Committee for future reference.
    The information referred to is located on p. 1101.]
    The Chairman. Thank you. And now the Chairman recognizes 
the gentleman from Georgia, Mr. Austin Scott.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. And I 
want to focus on the domestic food issue. But I do want to make 
just a brief statement that I hope that America is watching 
what is happening with the food supply around the world. 
Ukraine exported 50 million metric tons of corn and wheat. They 
were the largest supplier of the UN World Food Programme. And 
while we have challenges in America, I am afraid that we are 
about to see people literally starving to death throughout 
Africa, Asia, and other lower-income parts of the world.
    And we need to be cognizant that the nitrogen and the 
potash that was coming through the Black Sea region, which are 
two of the key elements we use to achieve the yields inside the 
United States, that supply of fertilizer may not be there next 
year, and we need to be cognizant of that. And we need to be 
making sure that we are doing everything we can as a Committee 
to replace the supply from Russia and Belarus and others so 
that we are not dependent on them for our yields.
    That said, Mr. Waide, I am from Georgia. And before the 
Family Food Box Program was put in, I literally know farmers 
who were sharing hundreds of hundreds of thousands of dollars' 
worth of vegetables. It was done, admittedly hastily, but I 
will tell you, those crops would have been left to rot in the 
field. And I watched my National Guard pass out boxes of food 
that I think any of us would have been proud to serve on the 
most special of days in our homes.
    I am disappointed in the criticism of that program from 
President Biden and Secretary Vilsack. I think it was a program 
that was extremely effective and served America well, 
especially based on the speed with which it was put in.
    We have moved now to the TEFAP program since Farmers to 
Families was canceled. And just I understand that your food 
bank, that you have received some of these boxes already, is 
that correct?
    Mr. Waide. Yes, we received boxes through both programs. 
The Farmers to Families Food Box Program provided a lot of 
support for our community, helped us meet the need in our 
community. And in the new program, we have benefited from that 
as well.
    Mr. Austin Scott of Georgia. And how many commodities are 
available through that program?
    Mr. Waide. I don't know the specific number of commodities. 
We can follow up with that specific answer.
    [The information referred to is located on p. 1101.]
    Mr. Austin Scott of Georgia. Okay. All right. Do you think 
it is meeting your demand for fresh produce?
    Mr. Waide. Well, I would say that the demand for fresh 
produce in our community currently exceeds what we are doing. I 
think we are trying to grow our capacity to move produce 
effectively. Some of the challenges relate to what Mr. 
Smittcamp was talking about, an opportunity to invest in 
processing capacity to preserve more fresh products so that it 
can be utilized by the families that we serve. I think 
investments in agile programs that can operate quickly at scale 
to capture surplus produce will help us move more produce to 
the families who need it. So again, the Farmers to Families 
Food Box Program was an attempt to do that, and I think we 
benefited a lot from it.
    Mr. Austin Scott of Georgia. Okay. Mr. Smittcamp, for the 
most part, each of the programs under discussion include all 
forms of produce, as well as a variety of other frozen 
products. What specific programs need a stronger focus on all 
of these forms?
    Mr. Smittcamp. Well, I think when it really comes down to 
it, it is the access, but it is also the ability to distribute 
and warehouse in these rural communities that do not have the 
capacity to handle fresh and frozen products across the 
country. And that is where I believe the focus really needs to 
be is on capacity of storage. When Congressman Costa asked me 
about availability, I was thinking about it from a production 
side rather than from the recipient side. But it really is 
needed on the recipient side because we have the capacity to 
produce it, but then there is no capacity to store it and move 
it.
    Mr. Austin Scott of Georgia. I want to thank all of you for 
being here and helping us solve these challenges as we push 
ahead. And I just want to again, advocate for those who are 
working to solve the problems throughout the world with the 
issues and the new challenges from Russia. Thank you.
    The Chairman. The gentleman from Massachusetts, Mr. 
McGovern, who is also the Chairman of the House Committee on 
Rules, is now recognized for 5 minutes.
    Mr. McGovern. Well, thank you, Mr. Chairman. And let me 
start off by thanking all our witnesses for their comprehensive 
testimonies about these incredibly important programs that I am 
determined to see strengthened in the next farm bill.
    I want to bring up a few points on GusNIP, which has 
continued to show us that incentives actually work. When I was 
on a farm tour last year throughout Massachusetts, I heard from 
farmers that the Double Up Bucks Program has made an incredible 
difference in their lives and for the lives of their customers. 
They mentioned to me that during the pandemic when many of us 
were worried about going to the grocery store, that the Double 
Up Program helped support people looking to make healthier 
choices without limiting what consumers could and could not 
buy.
    What I care about is making it easier for people to access 
fruits and vegetables, and that is exactly what programs 
through GusNIP do. And, that to me is better than having--as 
some of my colleagues have advocated--having government dictate 
what people can and cannot eat or what they can or cannot 
purchase with their SNAP dollars. Quite frankly, I think that 
is offensive. It robs people of choice, and it robs people of 
dignity.
    And so, my goal is to find ways to expand these incentive 
programs in the next farm bill, and I look forward to working 
with my colleagues who also get that these incentives actually 
help people make healthier choices that make sense for them, 
and also enables them to buy culturally appropriate foods for 
their families.
    So next, while we have Mr. Besaw here, I want to take a 
minute to talk about the Food Distribution Program on Indian 
Reservations, especially how we can expand regional purchasing. 
Through the Rules Committee's push for a White House Conference 
on Hunger, Nutrition, and Health, I have had the opportunity to 
speak with Tribal leaders all across this country. And while I 
am amazed by the work that this program has done, I heard over 
and over that Tribes are looking for more diversity of food 
options available to them, and they are looking for more--and 
the Tribal leaders will tell me that what Tribes eat in the 
Pacific Northwest is not the same of what Tribes in the 
Southeast want in their eating, and yet there is not currently 
a structure in place to fully support this. So, this is 
something I started working on in the last farm bill and 
something that I fully intend to continue working with USDA on.
    So, Mr. Besaw, I would like to ask, in your opinion, what 
do we need to make regional purchasing a reality? What are the 
things that you in your role think that we would need to make 
regional purchasing feasible?
    Mr. Besaw. One of the things--and thank you for that. One 
of the things that we looked at, again, is using the 638 
funding, the Indian Self-Determination Act. So, if we took 
that--if we were allowed--and we are not talking additional 
funding, we are talking about funding AMS currently uses to 
purchase. And now we have that ability to contract so we can 
make the determinations on purchasing. We can help grow the 
local producers and ranchers. Many times, on Tribal 
reservations, we do not have that in place right now enough for 
the farm, the bigger industry on there. If we had that ability 
to be able to decide who we purchase from using an expanded and 
permanent 638 funding, which really is not so much additional 
funding, but is replacing what AMS currently does, by us 
deciding who those local producers are, we can grow them. If 
they have the capital to build their infrastructure, put in 
more pack wash, more fencing, and really grow what they do, 
then there is a greater chance that they can expand. And that 
is what we want. We don't want to be fed a fish. We want to be 
able to learn how to fish. So, we want to build those 
economies. And that is a strong answer towards some of the 
other inputs and some of the other international and national 
systems problems we have.
    Mr. McGovern. Right.
    Mr. Besaw. We want to have a resilient, smaller system in 
place.
    Mr. McGovern. Yes, and I appreciate that. I have heard that 
over and over from other leaders. Let me just say one thing. 
That is why we need a White House Conference on Nutrition, 
Health, and Hunger. We need to connect the dots better, and I 
think we need to listen to people on the ground and people with 
lived experiences. And again, I would hope that everybody on 
this Committee, Democrats and Republican alike, rather than try 
to diminish the importance of a White House Conference would 
embrace it and use this opportunity for us to look at these 
issues holistically and actually help people get access to the 
food that they want. But thank you very much.
    The Chairman. Thank you. And now the gentleman from 
Arkansas, Mr. Crawford, is recognized for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman.
    I want to direct this question to Dr. Gruner. Recent 
evaluations of GusNIP have reported about 85 percent of 
retailers are in urban areas despite there being roughly the 
same SNAP density across different geographies and 
demographics. Additionally, about 70 percent of projects are in 
farmers' markets. While supporting smaller local farmers is 
vitally important, less than one percent of SNAP benefits are 
redeemed at farmers' markets. What more can be done to ensure 
that retail SNAP customers have access to incentive programs 
like GusNIP in rural areas and in the retailers where they most 
often redeem benefits? And go ahead and give me your thoughts 
on that.
    Dr. Gruner. Thanks, Representative Crawford. I think, as I 
mentioned, a stronger investment in GusNIP--in particular for 
grocery expansion--is desperately needed. We know that farmers' 
markets are limited usually once a week, sometimes twice a week 
for a couple of hours. Grocery stores are open every single 
day, all hours, except for evenings, usually, so they have a 
much higher SNAP volume and also utilization rate.
    So, just in our experience, when we have tried to expand 
into some of our grocery outlets, in corner stores in smaller 
rural areas, we have gone through funding a lot more quickly. 
Our funding formula was kind of blown out of the water. We 
tried our best to use some of the resources available to 
estimate what the funds would be so we could properly supply 
and bring on those partners. And then what we don't want to do 
is go into communities for only a limited time, and then we run 
out of funding and have to pull out because that is harmful for 
growers, it is harmful for retailers that participate, and it 
is especially harmful for community members that start to use 
that resource. So really having additional investment is really 
important if we want to think about how to expand into grocery 
and corner stores and thinking about the utilization rate that 
is much higher than farmers' markets. And so we just have to 
have that additional investment in order to do that.
    Second, I would say that we also need help and more 
investment in the POS technology. Sometimes getting the 
incentive built into POS systems, which are vastly different 
across our retailers, especially in rural areas, they need 
additional technical support and resources for getting that POS 
to kind of talk to that incentive model. So, I would say those 
are the kind of two investments I would recommend is a higher 
incentive and also investment in POS technology that can help 
to distribute the incentive.
    Mr. Crawford. Ms. Moss, do you have any thoughts on that?
    Ms. Moss. Yes, certainly. And I would echo what Dr. Gruner 
said. We have encountered----
    Mr. Crawford. [inaudible]----
    Ms. Moss. I am sorry?
    Mr. Crawford. I am sorry. Go ahead, Ms. Moss.
    Ms. Moss. Oh, okay. I would echo what she said. We have 
experienced--so last year looking at our numbers, we were in 21 
farmers' markets and ten brick-and-mortar stores. And so, when 
we looked at our allocations this year, we have less money 
because we have less philanthropic investment this year. And 
so, some of our grocery stores sort of pulled out because it 
just wasn't enough money to incentivize the additional work on 
their part, even though ideologically they agree with the 
program and they want to be a part of that. So, I certainly 
could almost see an additional program that was aimed at GusNIP 
in grocery stores instead of having grocery stores, corner 
markets, brick-and-mortar, mobiles, farmers' markets, things 
along those lines. That would be my initial thought on it.
    Mr. Crawford. Ms. Moss, we know that nine in ten Americans 
aren't meeting Dietary Guidelines for Americans' fruit and 
vegetable consumption recommendations. We also know most fruits 
and vegetables purchased by USDA for distribution and nutrition 
programs aren't fresh. We see in programs like WIC where 
clients can select the produce of their choice, for example, 
consumers typically choose to spend most of their benefit on 
the fresh option. Appreciating that all forms of fruit and 
vegetables can help meet Dietary Guidelines recommendations, 
are you able to speak to why ensuring the families you serve 
have access to fresh fruits and vegetables through Federal 
nutrition programs is equally important?
    Ms. Moss. I am sorry, and just double-checking. Why is it 
equally important that families have access to fresh fruits and 
vegetables?
    Mr. Crawford. Right.
    Ms. Moss. Yes, certainly. For us, one of the things we look 
at is, again, I represent a lot of local agriculture, so when 
things are picked at the peak of freshness, it is a higher 
degree of nutrition. And I think there is also an amazing sort 
of connection to your local farmer, your local community. We 
don't move as much product--or product doesn't get trucked 
nearly as far, so that can also help reduce the prices. So, 
what we see in our local communities is our farmers drive, not 
as far of a distance, and can sort of lower the prices of these 
fresh fruits and vegetable items.
    Mr. Crawford. Thank you. I yield back.
    The Chairman. Thank you. And now the gentlewoman from North 
Carolina, Ms. Adams, who is also the Vice Chair of the 
Committee on Agriculture, is now recognized for 5 minutes.
    Ms. Adams. Thank you, Chairman Scott and Ranking Member 
Thompson, for hosting today's hearing. To our witnesses, your 
expert testimony clearly paints the stark reality that we were 
facing as a nation.
    Before the COVID-19 pandemic, food insecurity was at its 
lowest since the 2008 recession. And although COVID-19 is 
receding, the demand for food aid has not receded. We can point 
to a perfect storm of factors, whether worker shortages or 
global supply chains caused by the war in Ukraine, families and 
households are struggling today. And Congress must rise to meet 
these demands.
    Last week, along with Representatives McGovern and Lee, I 
sent a letter to the House and Senate leadership urging 
immediate action to prevent the hunger cliff that looms ahead 
when the Federal COVID-19 public health emergency expires. The 
non-SNAP nutrition programs we are discussing today are 
currently weathering the storm through the COVID-19 recovery 
bill passed in 2020, and I am worried about the capacity that 
these programs currently have.
    Mr. Waide, your testimony states that over five million 
seniors face hunger in the U.S. One effective program 
discussed, the Commodity Supplemental Food Program, works to 
mitigate food insecurity for this population. So, what are some 
of your recommendations for Congress to further invest in CSFP 
in the upcoming farm bill?
    Mr. Waide. Thank you, Congresswoman, for the question. The 
CSFP program is a really important resource for low-income 
seniors who face food insecurity. Many food banks around the 
country help operate the CSFP program, delivering really high-
quality food boxes to these seniors to round out their need for 
nutrition. And, in the next farm bill, we recommend a number of 
different enhancements to the CSFP program. Number one, we 
think expanding access to the program would be very beneficial 
by increasing the eligibility determination above the current 
level of 130 percent of the Federal poverty line. We also 
recommend increasing the length of time between recertification 
periods to ensure that more seniors are able to participate. We 
recommend instituting a self-declaration of needs for 
determining CSFP eligibility. And we recommend tailoring CSFP 
food packaging to assist with meeting dietary and medical needs 
of seniors.
    Ms. Adams. Well, thank you. Thank you. It is quite a list. 
Great. Great.
    Ms. Moss, you spoke of the successes saying that the 
implementation of GusNIP and the Healthy Food Financing 
Initiative in rural communities, of course, your testimony 
speaks to how hunger issues are cross-cutting across all 
demographics. So, although you are an expert concerning rural 
food security, can you speak to the overall need for increased 
funding for all communities that utilize these programs?
    Ms. Moss. Yes, certainly. So, these programs are 
competitive grant programs, which means that, as an 
organization or as a community, you have to apply, you have to 
write an amazing grant with amazing evaluation metrics, you 
have to have all the right partners, you have to have all the 
right match funding. And then, if your grant reviewer is really 
feeling you that day, you might get lucky and get put into a 
pot that might get funding. So, inherently, it is a very 
competitive process. And so, if there were either additional 
funding or the process was not competitive, I think we could 
see these programs really affect more communities.
    Ms. Adams. Okay. So, can you share just a little bit more 
about what your participants are saying about their ability to 
buy and eat more produce?
    Ms. Moss. Oh, my goodness. Okay. I will share with you a 
story. I had a mom call me just Friday. She called me and she 
said, ``Hey, do you know of any voucher programs for families 
with a type 1 diabetic child?'' I said, ``No, it is not really 
what we do,'' although I could point her in the direction of a 
few resources. And I said, ``Let me tell you about SNAP 
Stretch.'' So, this mother tells me the story of the fact that 
they were a middle-income family, Dad got COVID, was in the 
hospital on a ventilator for 4 months. Now he has long COVID. 
He is not even the same person. His accent has changed. He is 
now disabled. Mom was working in a nursing home, lost her job. 
The child is 14 years old, and she is a type 1 diabetic, and 
they cannot keep her blood sugar under control, so she is 
consistently in the hospital. And Mom says, ``I don't know what 
I am doing. I need to change her diet. I get $134 a month in 
food stamps. What do I do?'' So, I was able to talk to her 
about really stretching her SNAP budget.
    Ms. Adams. Well, thank you so much. I am out of time, I 
think. Is that correct? I think I am out of time.
    The Chairman. Yes. Thank you very much.
    Ms. Adams. Thank you so much for the responses. I 
appreciate it.
    The Chairman. Ms. Adams, thank you. And thank you, Ms. 
Moss.
    And now the gentleman from California, Mr. LaMalfa.
    Mr. LaMalfa. Thank you, Mr. Chairman.
    To our witnesses here, thank you for being here and 
participating. As we contemplate the next farm bill and 
reflecting upon the elements that were in the 2018 Farm Bill, 
what would you look at would be some improvements on modifying 
the feeding programs, et cetera? Coordination, is there 
something that could be done on improving coordination between 
the agencies and such? What should we be looking at really that 
would get a more streamlined, better approach towards more 
success?
    Mr. Waide. Well, from our perspective in the network of 
food banks, the farm bill has provided tremendous support to 
our work over the last 5 years, 4 years. We think that, again, 
expanding mandatory TEFAP funding levels would be a critical 
part of ensuring that we meet the needs in our local 
communities. We think there are opportunities to continue to 
invest in capacity. We heard from Mr. Smittcamp about the 
availability of frozen products and continuing to invest in 
capacity at the local level for freezer and cooler capacity, 
can help us move more high-quality produce, both fresh and 
frozen, in communities that need it the most.
    We certainly think that there are always opportunities in 
terms of working with producers to have better coordination in 
the way that purchasing is planned out. Smaller producers in 
particular need to know well in advance what kind of 
opportunities exist so that they can get crops in the ground in 
time to participate in some of these contract opportunities 
with TEFAP.
    Mr. LaMalfa. Let's go back to the refrigeration and 
freezing aspect of frozen foods, et cetera. Is that going to be 
a huge challenge on just the ongoing cost of electricity is no 
bargain these days, as well as the space required to keep such 
at food banks or, the others on the panel, with your way of 
handling business? Is that something that is really being 
clamored for or is it duplicative----
    Mr. Waide. Well, the food banks around the country are 
investing in or trying to invest in capacity, freezer cooler 
capacity. My food bank completed a capital campaign and moved 
into a new building that is 345,000\2\ large with 75,000\2\ 
of freezer cooler space in March of 2020. The other seven food 
banks that are serving the State of Georgia are all engaged 
right now in capital projects to expand freezer cooler capacity 
and other kind of warehousing capacity----
    Mr. LaMalfa. Well, let me narrow it down then. So, is that 
seen as a top priority or number one priority? Or what is 
really the most important thing we can be looking at as we 
contemplate the farm bill for those needs overall needs?
    Mr. Waide. Yes, outside of protecting and preserving the 
SNAP program, the number one priority for us within food banks 
is mandatory TEFAP funding and expanding that. We need food. I 
think certainly being able to invest, particularly for smaller 
food banks, being able to invest in freezer cooler capacity, 
and having funding sources at the Federal level can help with 
that. But TEFAP funding is at the top of the list.
    Mr. LaMalfa. Okay. The others, what should we prioritize?
    Mr. Smittcamp. I am sorry?
    Mr. LaMalfa. What should we prioritize coming into the next 
farm bill?
    Mr. Smittcamp. Well, it certainly would be--in the produce 
prescription side and the GusNIP would be to let in all forms 
so that way--because right now it is dedicated to fresh. And by 
having all forms, we can complement, we can complement what is 
going on. So, when the food producer, if we are going to go to 
the regional side, doesn't quite have enough crop or has an 
overcrop, so we can balance it with the frozen food or canned 
or all forms. So, I think that is the key that we are here at 
the table just asking for the appropriate thing for the 
recipient to get the healthy, nutritious food.
    Mr. LaMalfa. That would be in domestic production. Would 
that be a priority rather than import?
    Mr. Smittcamp. I am sorry?
    Mr. LaMalfa. Domestic production instead of imported, would 
that be a priority, too?
    Mr. Smittcamp. Domestic?
    Mr. LaMalfa. Yes. Okay. Thank you.
    Mr. Smittcamp. Yes, I am sorry.
    Mr. LaMalfa. I yield back, Mr. Chairman.
    The Chairman. Thank you, Mr. LaMalfa.
    And now the gentlewoman from Virginia, Ms. Spanberger, who 
is also the Chair of the Subcommittee on Conservation and 
Forestry, is now recognized for 5 minutes.
    Ms. Spanberger. Thank you, Chairman Scott.
    And before I turn to questions, I would like to call 
attention to an impending deadline that is of critical 
importance to the well-being of our children across the country 
and certainly the planning for our school districts across the 
country. On June 30, less than 3 weeks from today, the child 
nutrition waivers that provide schools with flexibilities to 
feed children will expire. And I have heard from communities, 
counties across central Virginia imploring us to extend these 
waivers because they are valuable to schools' ability to plan 
for and provide those in-school programs. These waivers have 
been a lifeline for schools, for students, for parents, 
especially amid ongoing pandemic-related supply chain 
challenges. And a survey from the School Nutrition Association 
found that 97 percent of respondents were impacted by higher 
food and packaging prices.
    With the current waivers, most schools receive $4.56 in 
reimbursement for each school lunch received, and without them, 
most only received $3.75. To prepare for these waivers 
expiring, school districts are raising prices for students for 
the first time in years to make up for the increase in costs. 
And for hardworking parents across the country, every cent 
counts. We can address these rising costs, including by passing 
my Lower Food and Fuel Cost Act (H.R. 7606) on the House floor 
this week. But, as we do so, we must ensure that children have 
access to healthy, nutritious food. Failure to act and extend 
these waivers will mean more hungry kids, higher costs for 
parents, and a lot of confusion and lack of planning for school 
districts across the country.
    As we get closer to the June 30 expiration date, I urge my 
colleagues in the House and the Senate to heed the pleas from 
our local school districts, take up the bipartisan legislation, 
Keeping School Meals Flexible Act (H.R. 6613), to extend these 
waivers.
    And another program, switching gears to this hearing, that 
I hear consistently about from food banks and pantries across 
our district is the TEFAP program. Now more than ever, food 
banks rely on this program. And the Federation of Virginia Food 
Banks, comprised of seven food banks across the Commonwealth, 
purchased 30 percent more food in 2021 compared to 2019 to keep 
pace with the growing need.
    Mr. Waide, thank you so much for your testimony. And you 
mentioned that approximately \1/3\ of the food commodities your 
food bank distributed last year were provided through TEFAP. 
Could you talk a little bit about some of the logistical 
barriers or challenges that you might face with the 
administration of TEFAP? And as we are looking to strengthen 
the program, speak to some of those challenges.
    Mr. Waide. Well, in terms of logistical challenges around 
TEFAP, I think the biggest challenge we are facing right now is 
that a number of TEFAP orders for us. Thirteen percent--for the 
nation-wide number it is closer to 16 or 17 percent of these 
TEFAP shipments--are being canceled. And obviously, that 
creates lots of challenges. Number one, we don't have the food 
coming. But, number two, we have also been planning around 
those shipments coming and basing other kind of purchasing or 
sourcing decisions on the expectation that that food would be 
arriving.
    And so, the reason why those orders are being canceled are 
complex.
    Ms. Spanberger. Yes.
    Mr. Waide. They relate to the complexity in the broader 
supply chain. But that is obviously a challenge that we are 
facing right now.
    More importantly, TEFAP is a great program. We support it 
100 percent. We want to see additional funding because that 
food is a lifeline, in particular for smaller food banks 
serving smaller communities.
    Ms. Spanberger. And, speaking of which--and I do appreciate 
that you had included in your comments the recommendation 
related to increasing funding for TEFAP storage and 
distribution. Pivoting to some of the smaller communities, 
certainly I hear from Virginia food banks about how rural 
distribution allows them to reach more households. Mobile 
distribution allows them to reach more households, particularly 
in rural communities. Could you comment on the impact that this 
flexibility for mobile distribution has had on the communities 
that you serve?
    Mr. Waide. Sure. So, we have a tremendous network of 
community-based partners who get food from us and distribute it 
in their local community. We have invested in a lot of their 
capacity, but in times of great crisis, or in more rural 
communities where the distance between pantries is larger, 
being able to operate mobile distribution sites allows us to 
get the food closer to where people are at a time when they 
need it. And so, it has had a huge impact for us in a variety 
of communities, particularly in rural communities.
    Ms. Spanberger. Thank you very much. Mr. Chairman, I yield 
back. Thank you.
    The Chairman. And now the gentleman from South Dakota, Mr. 
Johnson, is now recognized for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman.
    I want to go back to the days of COVID, to the Farmers to 
Families Food Box Program. And given all of the constraints and 
the Herculean efforts that needed to be accomplished, I always 
felt like that program answered the bell in a most impressive 
way--not perfectly, but quite impressive. I just want to ask 
the panelists for their reactions to that. And part of the 
reason I ask is it seemed like some of the reputation for that 
program has been more modest than what I think the impressive 
delivery and execution was. And so how did the program work? 
What can we learn from that? And what are the potential uses of 
that kind of delivery mechanism in the future?
    Ms. Moss. If I could speak to that, so the Food and Farm 
Coalition works with the two food banks in the State of West 
Virginia. And, what we saw from that program, especially 
initially, is that food was not--first of all, was not coming 
from any farmers in West Virginia. And second, they weren't 
bringing food that we would consider to be culturally 
appropriate in West Virginia, and it was not coming in a timely 
manner. So, that program didn't really do well for us in our 
very rural state in our very rural communities.
    Mr. Johnson. So, Ms. Moss, just to follow up because I 
think that is a little different than what I heard from South 
Dakota. But obviously, when you roll out a national program, 
you are going to have some high points and some low areas. And 
I did hear some of those complaints in South Dakota. They 
diminished pretty rapidly as the program got a little more 
mature. Did you see any improvement in West Virginia?
    Ms. Moss. I think in the second round when new contracts 
came out, our food banks did have somewhat better contracts for 
food groups coming from Pittsburgh and Philadelphia that were 
delivering those products. But our two food bank directors were 
very glad to see that program end.
    Mr. Johnson. Yes, I mean, that is good feedback. Well, what 
about anybody else, other experiences?
    Dr. Gruner. You can conclude that as well in Arizona. That 
was our experience. The second round we did have one local 
dairy producer that was able to participate, but we weren't 
able to have a lot of our local food producers, so I think we 
are really welcoming the opportunity for the Local Food 
Purchasing Cooperative Agreement Program, which we are calling 
LFPA, as another opportunity to kind of take the good things 
that came from CFAP and invite our local producers to be part 
of that solution. So, I am really looking forward to the 
opportunities that are going to come this year, building on 
that program and just creating more opportunities for local 
product to go to families that need it the most.
    Mr. Johnson. Okay.
    Mr. Besaw. If I may pitch in, one of the things that we 
found in Wisconsin--and I am going to speak to Wisconsin to 
what we found--is that, sadly, we lead in a lot of the health 
indicators in a bad way with diabetes, hypertension, lactose 
intolerance, heart disease, reduced life expectancy. And a lot 
of the foods that were in the boxes were incompatible with many 
of our elders and some other individuals on the reservations. 
And it is not that we were not appreciative. I mean, we got 
food. So, what we had done was said this needs to push us to 
really look at trying to look at our sovereign food system to 
really look at how can we get the foods that we know are 
culturally appropriate that our elders can use almost in that 
food-as-medicine type approach? And that is where we went with 
that. And we have received all types of accolades from 
individuals. For instance, even getting--we buy from the Oneida 
Nation in Wisconsin. We replace--there are over 100 food items 
on the food distribution category. And with the 638, you can 
replace or supplant existing--those foods with comparable.
    Mr. Johnson. So, sir, I have one more follow-up for you in 
just 30 seconds. I mean, you talk about them not being a good 
fit for your elders. Of course, we have nine reservations in 
South Dakota. Diabetes is a big concern there. The food boxes 
in South Dakota weren't overly high on sugar near as I could 
tell. Maybe your experience in Wisconsin was different.
    Mr. Besaw. Yes, I think just systemically, with all of the 
foods, the processed foods within that, I think that caused the 
concern more than anything.
    Mr. Johnson. Very good. Thank you. Mr. Chairman, I know I 
am out of time and so--or, Madam Chair, I yield back.
    The Chairman. Thank you.
    Mr. Johnson. Or Mr. Chairman.
    The Chairman. And now, the gentlewoman from Connecticut, 
Mrs. Hayes, who is also the Chairwoman of the Subcommittee on 
Nutrition, Oversight, and Department Operations, is now 
recognized for 5 minutes.
    Mrs. Hayes. Thank you, Mr. Chairman, and thank you for 
having this very important hearing.
    I am trying to figure out now how I am going to get through 
all of my questions. And also, Ms. Spencer Moss, I am very 
interested in hearing the end of the story you were telling 
about how you responded to this parent with her questions about 
expanding the diet of her diabetic child.
    Ms. Moss. Yes, so fortunately, I got close to the end of 
the story, but essentially, it was, okay, your farm is quote/
unquote, ``Up a holler in a county where we don't actually have 
a SNAP Stretch program,'' but let me point you to two SNAP 
Stretch sites in one county over and one more in another county 
over that is open 7 days a week. A very, very ecstatic mama to 
have the opportunity to triple her SNAP--her $134 in SNAP to 
try to get her daughter's diet under control.
    Mrs. Hayes. Thank you. I appreciate that. And I think it 
ties in very nicely with the questions that my colleague Mr. 
Johnson was just asking. People with very specific and unique 
dietary needs, we really have to have programs that are 
malleable and flexible so that we are not just providing food 
that is unusable to people who have very hyper-specific dietary 
restrictions, so that is very helpful. I am happy that that 
mother was able to connect with you.
    We have heard in the hearing today that matching 
requirements often disadvantage rural communities, and I am 
talking about the GusNIP program, low-resource communities, 
communities of color, and smaller nonprofit organizations 
because they have less access to food. My question is for Dr. 
Gruner. How can a shift in matching requirements help these 
communities gain access to more fruits and vegetables? And what 
else can we do to ensure that these hard-to-reach or especially 
vulnerable communities are better served by these programs? And 
I will just add that one of the things that the experience in 
my State of Connecticut with many of the Farmers to Families 
Food Box, we had one Connecticut farm that was involved in the 
program. Much of what was brought in was shipped, packaged 
somewhere else. By the time it got to us, it was expired, 
outdated, bruised. So how do we really utilize local farmers in 
these programs?
    Dr. Gruner. Thanks, Representative Hayes. I think from 
that, first speaking to the match requirement, the one-to-one 
match requirement means that we have to find capital in our 
communities, which we work really hard to do. But I will say in 
some of our more urban communities, it is easier to find 
partners that are willing to give that match requirement. 
Sometimes that comes with a stipulation that it can only be 
used in a certain area. They want to invest in a specific site, 
a specific location, a farmers' market or store. So that really 
makes it difficult to expand to those rural communities, 
especially if we don't have a match partner in rural 
communities. So, I will say that that is one challenge that we 
see.
    In terms of, again, just wanting to echo my previous 
comments on some of our rural communities don't have a farmers' 
market. And so, while GusNIP and the Double Up Food Bucks 
Program, when we originally rolled it out, it was designed for 
farmers' markets. To have to think about how to shift to 
different models that will fit our rural communities, which, 
again, don't have a farmers' market, but there is a really 
great corner store that might be a good fit. And the thing that 
we see with our corner stores in our rural communities is, 
again, just getting some of the EBT technology up and running 
for them is one challenge so that they can even accept SNAP 
benefits, and then also getting a POS system that can read the 
benefits and also distribute an incentive. I think that is an 
area that definitely needs more investment.
    And then I think our model in particular, we do work on 
prioritizing local produce. And so, with that, we do work with 
our corner stores on scaling up. So, whenever they start their 
baseline, we try to find ways that we can connect them with 
local growers in the region so that we see over time they have 
a percentage shift in the local----
    Mrs. Hayes. Thank you. I am sorry to cut you off, but I 
want to hear from Mr. Smittcamp before my time ran out.
    Mr. Smittcamp. Thank you very much. Just broaden the 
language. That is where we are. We want to complement--frozen 
foods wants to complement all other sources. And so, we are 
there. We can get it to the small rural if they have the 
infrastructure to handle frozen. It is all about getting the 
language opened up to handle all forms and then allowing us to 
do what we do best and get the product to the particular 
recipient.
    Mrs. Hayes. Thank you. I appreciate that. I really need 
more than 5 minutes to have this conversation. Mr. Chairman, I 
yield back.
    The Chairman. I agree with you, gentlelady. There is so 
much we want to do to help solve this food disparity problem.
    And now the gentleman from Indiana, Mr. Baird is recognized 
for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman. I appreciate the 
opportunity to sit in on this important hearing. I really 
appreciate the witnesses being here. I think the expertise that 
you share with us really makes us better informed to try to 
improve these programs. And as we look at the 2023 Farm Bill, 
that is a real asset to us.
    I want to look at another little area. I think in many 
cases, food preparation can be just as important as the type of 
foods. So, we have these air fryers and so on now. So, I am 
interested in two things. Is there equipment that we could use 
that would be beneficial to people? And how many people have 
access to those sort of things? And then how much has education 
played a role in trying to help families identify a good 
nutrition program?
    Mr. Smittcamp. I don't know anything about air fryers. My 
wife has one, but I don't know.
    Mr. Baird. I don't either. But I would like to----
    Mr. Smittcamp. But I will tell you that education is the 
key. There are so many things about the leafy green vegetables 
that we are talking about, right? And people just don't accept 
them. I think when I serve in some of the nonprofits back home, 
they just don't take the leafy greens or some of those things 
because they don't know how to prepare them. So, there again, 
we have access to a product that is already prepared for them 
and frozen. And so, I think that is all we are trying to do; 
open that language up, get the availability of the 
infrastructure, and then naturally educate the recipients of 
how to do that. And I think, more and more, agencies are doing 
that and seeing that need, where they are in my community.
    Mr. Besaw. If I may also speak to that. The SNAP 
educational funding goes to states, and there is no real 
compulsory coordination with Tribal governments if there was a 
$4 million allocation for FDPIR Tribes in the nutrition field. 
So, if we have those fresh products, then we want to be able to 
provide that type of educational training. And I think there 
needs to be an increase or a proportion of what goes to SNAP 
should come a higher proportion to the Tribes, or there should 
be mandatory coordination between the states and SNAP 
recipients and the FDPIR programs because, by all means, we 
provide that type of cooking and coursework. And, by the way, 
several of my children have the air fryer.
    Mr. Baird. Thank you. Ms. Moss, did you have a----
    Ms. Moss. Yes, so just to follow up to my co-panelists 
here. So, USDA does have several programs that I think are 
really interesting. So, one he mentioned is SNAP-Education. We 
work very closely with our SNAP-Education folks that come out 
of West Virginia University very closely. They do amazing 
education in schools with both children and also adults. And I 
think there are other really great USDA-funded grant programs 
to help out with this. So, Farm to School, for example, does 
farming education, but it is also nutrition education with 
youth, and it really helps to develop their palates.
    Mr. Baird. Thank you. Anyone else? I would like to ask one 
more question in that regard. What are we doing in the schools, 
do you think, for these families? Are the children being 
exposed to better ways to eat and so on?
    Dr. Gruner. I can speak to the Farm to School Program. I 
think the beauty of all of these programs is that there is a 
lot of collaboration that happens, and Farm to School is a 
great area where local farmers and nutrition, the SNAP-Ed 
program can come in and teach kids about where their food is 
coming from. We know that we can only do so much to create 
local food. We also have to do work on both ends to increase 
education so that the demand for local food is also there. And 
that is where the Farm to School Program is just a great way 
that that teaches kids about where their food comes from to 
increase their palates.
    Mr. Baird. Thank you very much. Anyone else?
    Mr. Smittcamp. Well, a fun fact on that, I mean, the USDA 
has asked us as manufacturers to do a much more retail label so 
they can go on and get our website and look at education on 
that. We are feeding 30 million children in a day, so there is 
a lot of access out there.
    Mr. Baird. Thank you. My time is out, and so I yield back.
    The Chairman. Thank you. And now the gentlewoman from Ohio, 
Ms. Brown, is now recognized for 5 minutes.
    Ms. Brown. Thank you, Chairman Scott and Ranking Member 
Thompson, for holding this hearing today. And thank you to our 
expert panel for being here. Your perspectives are helpful as 
we look ahead to the next farm bill.
    The COVID-19 pandemic put tremendous strain on our nation's 
food system. We saw our nation's hunger crisis expand our food 
supply chain challenge. And this is why I worked with my 
colleagues to introduce the FIND Food Act of 2022 (H.R. 7317, 
Further Incentivizing Nutritious Donations of Food Act of 2022) 
to meet the demand in the face of declining food donations.
    So, Mr. Waide, as you mentioned in your testimony, food 
banks are paying almost 40 percent more to purchase nearly the 
same amount of food as last year, and prices continue to rise. 
How would additional TEFAP investments help your food bank and 
others across the country in the 2023 Farm Bill?
    Mr. Waide. So, thank you for the question, Congresswoman. 
Expanded TEFAP funding would make a critical difference, 
particularly for food banks serving smaller communities where 
TEFAP commodities make up a much higher percentage of the total 
volume of food that they distribute in those local communities. 
Today, food banks are experiencing a decline in the volume of 
Federal commodities that are flowing into food banks as we 
revert back to baseline spending. And to offset those declines, 
along with declines in donated food, food banks are purchasing 
more in patterns that are just unsustainable. As I mentioned, 
my food bank next year will spend more than $15 million to buy 
food for the first time in our history. We will source more 
food through our purchasing activity than we will source 
through Federal commodities. And, again, that is just not a 
pattern that most food banks will be able to support long-term. 
So, increased TEFAP funding will help ensure that food banks 
have the food sourcing capacity they need to meet the demand in 
their local community.
    Ms. Brown. Thank you. The pandemic also shed light on many 
of the existing barriers to access when it comes to putting 
food on the table. So, Mr. Waide, communities of color and 
rural communities often have higher rates of food insecurity, 
lack adequate grocery store retailers, and are often harder to 
reach for food distribution. What are some of the innovative 
distribution models your food bank uses to help serve our 
neighbors in need? And how can the Committee better address 
hunger in communities of color and rural communities in the 
2023 Farm Bill?
    Mr. Waide. Well, I think the most important thing that we 
have done in my food bank to increase access is really about 
building partnerships with organizations on the ground level in 
those local communities. And that includes organizations with 
which we have longstanding partnerships, who really understand 
those local communities, and who have built capacity to serve 
those communities more effectively.
    It also includes organizations where we built relationships 
kind of on the fly in the midst of crisis during the pandemic, 
so we worked with a lot of schools, a lot of governmental 
organizations, city council leaders to host mobile 
distributions in urban communities, in rural communities, and 
everywhere in between so that we could target parts of the 
region where we did not have existing food partners to get food 
there ordinarily. And that really helped us fill those gaps in 
a way that was critically important during that crisis. So 
mobile distribution, partnerships, and investments in capacity 
are really the keys to ensuring that every part of our region 
has access.
    Ms. Brown. Well, thank you very much. I know that in my 
community we have begun to partner with an organization such as 
DoorDash to help some of our seniors get access. And so those 
are innovative ideas that I hope we are doing research that 
could potentially have a greater impact.
    So, an important point in closing that you touched on in 
your testimony, that often gets lost, is that TEFAP is not only 
an important program for families but for farmers as well. And 
so, I just look forward to working with my colleagues on both 
sides of the aisle to address this issue.
    And with that, Mr. Chairman, I thank you, and I yield back.
    The Chairman. Thank you, Ms. Brown.
    And now the gentleman from Iowa, Mr. Feenstra, is 
recognized for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Scott and Ranking Member 
Thompson, and thank you for having this hearing. And I 
appreciate all your testimony. It is very useful as we look at 
the 2023 Farm Bill as we move forward.
    The Fourth District in Iowa, which is where I am from--my 
district, is made up of many small rural communities. Ms. Moss, 
you mentioned in your testimony that requiring some Federal 
grants to be reimbursable has a negative impact on smaller 
communities. Can you speak on this more, what your thoughts are 
when you noted that?
    Ms. Moss. Certainly. So, almost all Federal grants are 
reimbursable, you have to spend the money, wait 4 weeks to 4 
months to get reimbursed.
    Mr. Feenstra. Yes.
    Ms. Moss. And this can be $20,000, it could be $200,000. I 
was actually just on the phone with one of our food bank 
directors who had to spend $600,000 and is still waiting on 
reimbursement 6 months later. It is really challenging to 
maintain that kind of a cash flow if you are a small 
organization.
    Mr. Feenstra. I fully agree with you. So, what is your 
solution? Especially, we have all these small locations in my 
communities and stuff. So, what could we do to create a better 
system when it comes to reimbursement or getting away from 
reimbursement?
    Ms. Moss. Certainly, there are in my mind two options. And 
some grant programs do allow this. They allow you to apply for 
an advance. But those are only very known expenses, and you 
have to supply a very detailed list of what those expenses are. 
The lady behind me nodding her head is about to tell you how 
much of a pain that is and how much human capital it takes to 
make that happen.
    The other option is do what a lot of philanthropic 
organizations do, and they will cut a check annually or every 6 
months for what you said you would need for that period.
    Mr. Feenstra. So that would be like a grant application?
    Ms. Moss. Yes, essentially. And a lot of the programs we 
are talking about are grants, GusNIP, HFFI.
    Mr. Feenstra. Yes. So with that, Ms. Moss, which programs 
that you discussed in your testimony are most beneficial to 
rural America? Again, my district, I am just thinking about it. 
Are there programs that are better serving rural communities 
and small communities than others? And how can we maximize that 
intent? We just started talking about the intent of 
reimbursements. But I am looking at things being equitable and 
the impact. What are your thoughts?
    Ms. Moss. Certainly. So Healthy Food Financing Initiative 
is fantastic in rural communities because rural communities are 
experiencing the big box stores pulling out, so that program 
really helps to have retail close by. GusNIP, of course, is a 
fantastic program. And this is not part of the discussion 
today; but, AMS has the farmers' market, local food Farmers' 
Market and Local Foods Promotion Programs, also fantastic farm 
bill programs to really maximize that local agriculture.
    I think one of the biggest things is match. Rural 
communities just don't have the funding that cities have. 
Philanthropy doesn't invest in rural communities.
    Mr. Feenstra. Exactly. I tend to agree with that. Do you 
look at a private-public partnership, meaning that, would there 
be a way that we should incentivize--I think of my larger 
grocery chains, things like that, where we can give them some 
incentivization to help our local food banks and things like 
that?
    Ms. Moss. I think my colleague to the left would probably 
be better suited to speak to that. And I think there are a lot 
of partnerships with food banks.
    Mr. Waide. Well, certainly the majority of food banks in 
the country are located in smaller communities. And in the 
State of Iowa there are several outstanding food banks serving 
that state that are doing a lot of innovative things to grow 
capacity in the state. I think we have a lot of incentives in 
place to encourage large grocery store chains to donate and to 
support food banks and other charitable feeding programs. And 
certainly, just enhancing those incentives can continue to grow 
our partnerships.
    I think probably the biggest thing to contemplate in 
increasing access in local communities that are in the food 
banks serving the smaller communities is, one, to beat a dead 
horse, TEFAP funding is really critical. So, my food bank, 
large metro area, 30 percent maybe of our food comes from 
Federal commodities. In a smaller community like those serving 
in Iowa, it will be over 50 percent Federal commodities.
    Mr. Feenstra. And I appreciate you saying that. I just look 
at--I mean, my in-laws, we have a large cattle operation, a hog 
operation, and stuff like that, and I think there is always, to 
me, opportunities not only with grocery but also the 
agricultural producers on how we could partner up and help food 
banks and stuff like that.
    Thank you. I am out of time. I yield back.
    The Chairman. And now we recognize the gentlewoman from 
Maine, Ms. Pingree for 5 minutes.
    Ms. Pingree. Thank you so much, Mr. Chairman. Thank you for 
holding this important hearing and thank you to all of our 
panelists. You do wonderful work, all of you, and I really 
appreciate it. And you are really helping to inform our 
Committee as we look into the future of the farm bill and other 
funding issues that we have to deal with.
    So, let me just start with Mr. Waide. Thank you for the 
great work you do at the food bank. And I think in the last 
answer you said you hate to keep beating a dead horse on the 
TEFAP program, but as far as I am concerned, you can keep 
beating that drum as long as you want because I am particularly 
concerned about what is going to happen when we revert to pre-
pandemic levels. And you have talked about that quite a bit, so 
thank you for emphasizing that.
    I just want to ask a somewhat more obscure question, but it 
is something we have heard about. We are served by the Good 
Shepherd Food Bank here in Maine, and they do an incredible 
job. But they brought up to us some challenges with The 
Emergency Food Assistance Program, where the implementation 
guidelines limit participating agencies to 501(c)(3) nonprofits 
when their partner networks now includes schools, hospitals, 
and municipalities. I am just wondering if you have had similar 
experiences and if you have any suggestions about that 
challenge?
    Mr. Waide. Well, we certainly work a lot with schools in 
our community, and we work with a variety of other entities. As 
I mentioned, during the pandemic, we worked with a number of 
municipal governmental leaders to host food distributions. And 
doing that did create some complexity in how we distributed 
TEFAP products and other federally funded types of products. 
And so increasing flexibilities is something we would always 
support. It just helps us move faster to get food to where it 
is needed.
    Obviously, we have to balance that against the need for 
accountability and the need for organizations that have good 
operating practices, know what they are doing to handle food 
safely, and that can adhere to other kinds of standards. But we 
think we can accomplish that while still maintaining greater 
flexibility that allows the whole system to move faster.
    Ms. Pingree. Well, thank you for that. Maybe that is 
something we could look into the future in terms of that 
flexibility. So that is an important point, I think.
    Dr. Gruner, you, again, are also doing great work. And 
thank you for all of your testimony today. I am really 
interested in the locally sourced side of this. I think, 
particularly now with the supply chain issues that we have 
worried about and are working on, the more we can do to expand 
those local networks is really important. And in previous farm 
bills, I have worked on the language that allowed SNAP 
beneficiaries to shop at farmers' markets like everyone else, 
so that is very important to me.
    I know there have been some concerns raised about 
insufficient access in rural communities, which is kind of 
ironic, since it is in the rural communities that we are 
producing so much of the food. I come from a very rural state. 
And I know you have already talked about this a little bit, but 
do you have anything else to add about the challenges that we 
could address or successes that we can build on when we are 
prioritizing locally grown food through GusNIP?
    Dr. Gruner. Yes, I think in addition, GusNIP, having the 
model that prioritizes local food I think is really important, 
but I also think that when looking at all the different 
programs that are in the farm bill, I think there is a really 
untapped resource with our small local producers, especially in 
our rural areas. So smaller programs like the Senior Farmers' 
Market Nutrition Program, which utilizes local produce, is 
another great complementary program that, again, I think just 
having an additional investment in that program and additional 
admin dollars could really help to expand and purchase that 
product from local producers. Especially sometimes in our 
smaller farms, it is really hard to get larger distribution 
trucks in those areas, so being able to have smaller programs 
that can navigate and source from our farms and our rural 
communities can be really helpful. So, I see all of these 
programs as really being complementary. And, I know it was 
already mentioned, but, LAMP is a great way that can help with 
that coordination of all the programs because I think all of 
these programs play a role. So, I am really looking at ways to 
invest in our small local producers as a solution.
    Ms. Pingree. Thank you for that. And thank you for always 
mentioning LAMP. That has been a really important part of the 
work that we have been doing in enhancing that. And so, we 
appreciate hearing that it is working.
    I am going to run out of time, but, Ms. Moss, thank you 
too, for your work. And I was really grateful to hear your 
story about helping the family with the diabetic child. And 
that is another reason to work on the Produce Prescription 
Program as a way to tailor making sure that people get the food 
and nutrition that they need for their families. So I am out of 
time, but I will yield back. Thank you so much, Mr. Chairman.
    The Chairman. And thank you.
    And now the gentlelady from Florida, Mrs. Cammack, is now 
recognized for 5 minutes.
    Mrs. Cammack. Thank you, Chairman Scott, and thank you to 
all our witnesses for appearing before the Committee today, 
definitely an important topic, and so I am just going to jump 
right in.
    Mr. Waide, your testimony alludes to Feeding America 
working to quote, ``End hunger with the food, people, and big 
ideas required to ensure our neighbors have the nourishment 
they need to lead healthy and productive lives,'' end quote. 
Feeding America has been around for more than 40 years and has 
seen increased participation in programming, receives billions, 
with a B, from the Federal Government, and spends millions of 
dollars on advertising. What started as a clearinghouse has 
really become a monopoly in the distribution space. Can you 
walk me through the big ideas the organization is currently 
thinking through to reduce reliance on food assistance and 
indeed help families lead healthy and productive lives?
    Mr. Waide. Sure, I would be happy to answer that question, 
Congresswoman. I think it is really important to start with 
really understanding what food insecurity is and looks like. 
The vast majority of folks who identify as food-insecure, who 
get food through our network, who participate in Federal 
programs like SNAP, they aren't a part of these programs 
permanently. And in fact, whether you look at SNAP or you look 
at participation in feeding programs like those operated by 
Feeding America, the duration that people spend in these 
programs is generally less than a year's worth of time. And 
then they get back on their feet after they have navigated a 
crisis and are able to provide for themselves.
    So, we have been around for 40 years. We have expanded food 
distribution over those 40 years. And I think we have done that 
to great end to help ensure that people get out of crisis 
faster and that our response to crisis is more effective and 
durable.
    So, the innovations that I think you are asking about 
relate to our ability to enhance the quality of the food that 
we are distributing compared to what we were doing 40 years 
ago. More than half of the food that we distributed during the 
pandemic was either fresh or frozen. We have increased access 
to nutrition education during that time. We have increased 
partnerships with workforce development programs to help people 
get access to better careers over time. And we have increased 
partnerships with other kinds of service providers in the 
healthcare space to improve health outcomes over time. So, I 
think what we have seen through the investment that we have 
been privileged to enjoy from both Federal sources and the 
private-sector is that, as pressure has increased over the last 
40 years on low- to moderate-income families, that we have 
helped those families have better life outcomes than they 
certainly would have otherwise.
    Mrs. Cammack. Well, and Dr. Gruner, I will submit a follow-
up question for the record, but I am running out of time, so I 
am just going to jump into my second question.
    Feeding America states that for every one meal provided, 
SNAP provides nine. Does it make more sense to shift the 
hundreds of millions spent on TEFAP to SNAP or incentive 
programming, each of which provide choice, flexibility, and 
more immediate solutions for families in need?
    Mr. Waide. So, we think the safety net that is provided by 
the combination of these nutrition programs are complementary 
and important to be taken together. SNAP is a much larger 
program, and the spending on SNAP is about 20 times what it is 
on TEFAP. So certainly, SNAP is a critical part of the 
response. That said, TEFAP is a unique program that really 
helps respond to opportunities in the agricultural market to 
take advantage of surplus food and get it to people who need 
it, while also supporting America's farmers. So, we don't think 
canceling that program out would continue to support our 
farmers in the way that TEFAP does today. And we also think it 
would be a net loss to the families that we serve collectively 
in the hunger relief space.
    I would also say, you mentioned a monopoly in the feeding 
programs. It is important to remember that Feeding America 
works with 60,000 community-based programs across the country, 
\2/3\ of which are faith-based organizations, probably a 
significant percentage of which are led by BIPOC leaders and a 
significant number of which serve majority minority 
communities.
    Mrs. Cammack. So, Mr. Waide, my time has expired, and so I 
want to be sensitive to the Chairman's time. I would just like 
to follow up with I do believe there is a licensing fee that 
many of those entities have to use in order to use the Feeding 
America name. But with that, I yield back. Thank you.
    The Chairman. Thank you. And now the gentlewoman from New 
Hampshire, Ms. Kuster, is now recognized for 5 minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman. And thank you, 
Mr. Waide, for bringing up the health benefits. I think Ms. 
Schrier and I both serve on both the Health Subcommittee on 
Energy and Commerce and on Agriculture. And I would love to 
have a joint hearing at some point about the health benefits of 
these important issues and programs in the Nutrition Title of 
the farm bill, not just SNAP, but these nutrition programs that 
take a holistic approach to food security and the safety net, 
but also to helping families address health issues, the most 
expensive health issues, diabetes, heart disease, obesity. All 
of that can benefit from the work that you are doing not just 
to mitigate hunger but help stabilize families and help them 
address their health and well-being, eating more fruits and 
vegetables, eating those leafy greens that we have talked about 
this morning.
    That safety net is more critical than ever as we recover 
our supply chains from the height of the pandemic and navigate 
the food and fuel shortages stemming from Russia's 
unconscionable invasion of Ukraine. We know that the results of 
the pandemic and the war are higher prices at the grocery store 
and leading to greater reliance on food banks and community 
resources at a time when they are already stretched thin. And 
so, it is so important today that we talk about how we reduce 
costs, but also how do we provide that important safety net.
    And for me, a big part of this, as Representative Pingree 
brought up, is having food grown closer to where it is consumed 
because we can bring down those high transportation costs, the 
trucking, the shipping, et cetera.
    Mr. Waide, you noted in your testimony that Congress helped 
fill the gap during the pandemic by authorizing $1 billion in 
additional funding for the TEFAP, The Emergency Food Assistance 
Program, but we are far from out of the woods. Just like the 
experience in Georgia, I have heard from the Community Action 
Program in New Hampshire that handles our TEFAP contract about 
the challenges of acquiring the items they need to feed 
families as food and transportation prices rise.
    Mr. Waide, could you elaborate on how the additional TEFAP 
allocation helped sustain your operations during the peak of 
COVID, and why the mandatory funding level needs to be 
increased in the next farm bill?
    Mr. Waide. So, simply put, we would not have been able to 
meet the need in our local community were it not for the 
extraordinary Federal response in expanding access to 
commodities. The demand would have just far exceeded the supply 
available from donated sources of food. And we certainly could 
not have closed the gap with our own purchasing resources.
    What we know, going forward, is that demand right now is 
growing again due to the pressures that families are facing 
with higher costs for food and gas and other basic needs. We do 
not think that is a challenge that will last only a few months. 
We think it will be with us for a longer period. And, for food 
banks and other organizations to continue to respond to their 
community and meet the needs in their community, we need more 
food. Being able to provide all that food with our own 
purchasing resources is not a sustainable solution. It might be 
something we can do over the course of a year or two, but 
having a higher level of mandatory funding for TEFAP in the 
next farm bill will help ensure a predictable, robust supply of 
food for emergency food providers over the long-term as we 
continue to work to meet the need for increased levels of 
demand for food assistance.
    Ms. Kuster. Thank you. Now, let me turn to the Senior 
Farmers' Market Nutrition Program, which I believe is an 
incredible win-win program for vulnerable seniors and for our 
local farmers. Dr. Gruner, I appreciate in your testimony you 
called this program tiny but mighty. The connections this 
program allows seniors to make with fresh, local food, as well 
as other community resources, are invaluable, and it also 
supports our small farm economics, just like the farmers in my 
district in New Hampshire.
    Dr. Gruner, we have heard the program is drastically 
oversubscribed nationally. Can you tell us roughly how many 
more seniors you could be serving with more funding in the 
program?
    Dr. Gruner. Representative, I realize your time has 
expired. I am happy to follow up in written comments if that 
would be helpful.
    [The information referred to is located on p. 1104.]
    Ms. Kuster. I apologize.
    The Chairman. We appreciate that so much.
    Ms. Kuster. I wasn't tending the clock.
    I yield back.
    The Chairman. No problem. And the gentleman from Georgia, 
Mr. Allen, is now recognized for 5 minutes.
    Mr. Allen. Well, thank you, Mr. Chairman. And, Mr. Waide, 
you have mentioned the partnerships with farmers to minimize 
waste products. Do you have any ideas for how a similar 
partnership could be created for any of the USDA programs in 
order to create more access to fresh, local products while 
utilizing the excess products of farmers, how that could be 
integrated?
    Mr. Waide. Well, I think--and, Congressman, good to see you 
again, and thank you for the question. I think TEFAP is already 
engaging a wide variety of producers as suppliers to the TEFAP 
program. I think work can certainly be done to broaden 
participation of producers in the existing TEFAP program. And 
we certainly encourage AMS to do that as part of their ongoing 
activity. We also think that there are opportunities to invest 
in the capacity of smaller local producers, including socially 
disadvantaged producers, so that they can participate on an 
ongoing basis in TEFAP contracts more effectively.
    And then there are always opportunities to take lessons 
learned from programs like the Farmers to Families Food Box 
Program to find ways to respond with greater agility and speed 
to market opportunities to get that high-quality product where 
it is needed, when it is needed.
    Mr. Allen. Well, your comments are important here and your 
input is important, because we will be working on a new farm 
bill in the next Congress, and we want to see how these non-
SNAP USDA nutrition programs are working and the improvements 
that we need to make to those programs to make sure that we are 
doing everything we can do to make sure folks get good and 
nutritious food.
    This is a question for all of our folks who are here 
testifying today. Much of the testimony we have received thus 
far in the 117th Congress, including today's, includes calls to 
strengthen programs. And, of course, when I hear calls for 
strengthening, I immediately think of we need additional 
funding. And for our witnesses today, seeing Title IV alone 
will cost taxpayers more than $1.1 trillion over the next 10 
years, how do you reconcile that with your programmatic 
recommendations? And we will start off with you, Mr. Smittcamp, 
I believe, if I am reading that correct.
    Mr. Smittcamp. Well, I guess if I understand the question, 
how do we recognize when the cost of fuel is going up, how we 
can supply all the things that we need to do? But I think in 
the frozen food world, we are probably the most efficient folks 
to be able to produce a pound a serving that needs to go to 
these communities. So, with that, I believe the frozen food 
industry is doing their job to continue to eliminate waste, 
give a value and complement what fresh is when they run out or 
when they have oversupply. So, I think in the frozen food 
industry we are trying to do--and with regard to the TEFAP 
money, when we are a lot of a bonus buy, when there is an 
excessive crop, wherever it might be, whether it is peaches, 
strawberries, or berries, it comes in and it definitely shows 
on the farmer side, which were all very important, that the 
farmer's side, it raises the fresh market up to a nice parity. 
So, the TEFAP program is good.
    Mr. Allen. Good. And so, it sounds like that your threats 
are external things you can't control and so that is going to 
be part of your ask. Ms. Moss, what do you have for us as far 
as what you can do to----
    Ms. Moss. In terms of a rationale for the line item?
    Mr. Allen. Right.
    Ms. Moss. In my lifetime I have seen a consolidation of 
agriculture. There are a lot of big corporate farms in America, 
and we don't see nearly as many small farmers as we did when I 
was a kid. I am not that old. And so I think that is for a 
couple of reasons. One of it is farming is hard work. Farmers 
don't get a fair shake. There has not been a lot of investment 
in our local farmers, particularly those that are producing 
food.
    Mr. Allen. Right.
    Ms. Moss. And so, I would say that this is really an 
investment in your local agriculture, which is really a 
homeland security issue as well.
    Mr. Allen. Sorry, I am out of time. And, Mr. Waide, if you 
will provide us something to that question to us in writing, I 
would appreciate it. Mr. Chairman, I yield back. Thank you.
    [The information referred to is located on p. 1102.]
    The Chairman. Thank you very much. And now the gentleman 
from California, Mr. Carbajal, is now recognized for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chairman. And thank you to all 
the witnesses testifying today. The work you all do in 
administering these very important programs is essential to 
providing people across the country with nutritious food and 
preventing millions from going hungry.
    As we prepare for work on the next farm bill, hearing from 
you all is extremely important to these programs so that we can 
best serve the people who most need them in our planning.
    Mr. Waide, USDA recently launched the TEFAP Fresh Produce 
Box Program to help address a lack of fresh produce available 
through the TEFAP food list. This serves to complement the 
fresh produce food banks are purchasing privately. Can you talk 
about the importance of ensuring clients have options to access 
a wide variety of produce when they visit a food bank?
    Mr. Waide. Thank you for the question, Congressman. And it 
is a really important consideration. The families that we 
serve, in particular, lack access to fresh produce. It is 
harder for them to access because it is not as available in the 
grocery store serving their communities, or because it is just 
not something they can afford and certainly can't afford to see 
go to waste. So, having good variety is critical to our meeting 
their nutrition needs.
    We in the nation's food banks have dramatically grown our 
distribution of fresh produce over the last decade. And we 
still have a lot of opportunity to increase the volume and 
variety of produce that we are distributing. Having more 
options for where we source that produce, for the format and 
packaging of what that produce shows up to our food banks 
looking like so that we can give clients options, allows them 
to have more choices, to find products that meet the needs of 
their families, the preferences of their families, which is 
what any of us want when we go to the grocery store. And so 
that variety is really critical to increase access and 
utilization of produce for food-insecure families.
    Mr. Carbajal. Thank you.
    Dr. Gruner, it is great to hear about the success Arizona 
has had in implementing the GusNIP program. I am very 
supportive of helping SNAP recipients get more bang for their 
buck. Can you walk me through some of the challenges you faced 
when implementing this program and how Congress can best 
support the Nutrition Incentive Hub to make sure that the 
needed resources are available to other organizations?
    Dr. Gruner. Yes, I would be happy to. I think the first 
thing is just when we have any site that is available, is 
getting them onboarded with EBT equipment. Not all of our 
farmers' markets are eligible sites that are receiving local 
produce are able to receive SNAP benefits. So, I think that is 
where we see the biggest amount of our technical support right 
now is just making sure that they have EBT processing equipment 
and are part of that registration. And then, I think ultimately 
it's just outreach and making sure that participants know that 
they are eligible and that they can find a location, so I think 
we see a significant effort in our outreach and finding 
creative solutions for reaching lots of different families 
across our state. So, I think those are the two areas where we 
see significant challenges.
    We are really lucky that the evaluation component, again, 
is with that Nutrition Incentive Hub. That has really helped to 
streamline and create a really comprehensive evaluation. So, I 
think in the next couple of years we are going to have some 
really great data from all of our states across the nation to 
pull together. So, I think having that uplifted to a broader 
approach is going to be really helpful as well, so we are not 
having to do all of the evaluation from scratch. So, I think 
those are just a couple of the ways that we see some challenges 
that we faced.
    Mr. Carbajal. Thank you very much. Mr. Chairman, I yield 
back.
    The Chairman. Thank you. And now the gentlewoman from 
Washington, Ms. Schrier, is recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and welcome to all of 
our witnesses. Today, I would like to focus on The Emergency 
Food Assistance Program, or TEFAP. Over the past few years, we 
have all had many discussions about the issues at food banks, 
huge increases in demand like you pointed to in your 
testimonies, long lines, distribution challenges, sometimes 
more donations than food banks can even handle because of 
storage limitations, refrigeration space. And I think that this 
has all really ignited an important and urgent conversation 
about what our food systems, writ large, should look like.
    I want to first just highlight the incredible work of two 
organizations in my district. First, the Bonney Lake Food Bank 
is charting a new path forward for the operation of food banks 
and food pantries. They saw a 700 percent increase in customers 
due to the COVID-19 pandemic. And because of that, they began 
developing a new food insecurity project that focuses on 
increasing access for the surrounding area by building in 
consideration of convenience for customers and transportation 
and help with language barriers. And they are also 
supplementing the TEFAP foods that they receive with weekly 
purchases of fresh produce from nearby farms to create a food 
bank that really looks and feels more like a market.
    The second that I would like to really highlight is 
Cascadia Produce, a food aggregator and distributor in Auburn, 
Washington. In response to some of the systemic barriers 
preventing small and underserved farmers from accessing market 
opportunities, Cascadia Produce is championing a new model of 
coordinated collaboration to act as an incubator and create a 
path for underserved food businesses to bid and execute future 
contracts on their own. And this work is ensuring that 
communities throughout Washington are fed by local farmers in a 
way that creates jobs, sustains local farms, and strengthens 
the entire food network.
    I wanted to share these examples because I think this is 
the kind of work that TEFAP can and should help to support. And 
Federal investment through TEFAP and other feeding programs we 
are discussing today, it really has the potential to act as a 
catalyst for creating circular local food systems that support 
our family farms while also feeding our communities. So, that 
is why I am working on legislation that would improve our food 
and agricultural supply chain by modifying the procurement side 
of TEFAP to provide emergency feeding organizations with better 
access to healthy, locally grown food.
    Mr. Waide, I have a question for you. In meeting with 
stakeholders throughout my district in Washington State, one 
thing I have heard time and again is the need for work to be 
really locally led. People have told me that the pandemic food 
box program for example, however well-intended--and it was 
really well-intended--demonstrated that the Federal agencies 
just don't have the on-the-ground local knowledge and 
connections to adapt to the need of every different community 
and different food banks with different capabilities. So, I 
wanted to ask you, Mr. Waide, about your view here. How did the 
Atlanta Community Food Bank work to get food, as you said in 
your testimony, to the people who need it, when and where they 
need it during the pandemic?
    Mr. Waide. Well, I think--and thank you for the question. 
The key to our success in being responsive to the needs of the 
community is that we have built, over more than 40 years of 
practice, really deep relationships on the ground in 
communities across our region. And so, we are there to engage, 
educate, and empower the community to fight hunger, which means 
we are providing resources and platforms including food, 
including investments and transportation capacity, 
refrigeration capacity so the folks who really understand what 
need looks like in their local neighborhoods have what they 
need to really take care of their neighbors. Those grassroots 
relationships we were able to really lean on and activate to an 
even greater degree during the crisis so that we could stand up 
mobile distributions in places that weren't being served as 
well as they needed to be so that we could change operating 
models on the fly, to respond to needs in those local 
communities.
    Ms. Schrier. Thank you.
    Mr. Waide. Yes.
    Ms. Schrier. I really appreciate those relationships. That 
is why the legislation I am working on now is really going to 
get funding hopefully to the states to get down to the most 
local communities to do exactly what you have done and be able 
to purchase local food farmed locally to food banks and solve 
hunger. Thanks very much. I yield back.
    The Chairman. The gentleman from California, Mr. Panetta, 
is recognized for 5 minutes.
    Mr. Panetta. Thank you, Mr. Chairman, and thanks to all our 
witnesses for participating in this very important hearing, 
especially on the evening before the farm bill coming up in 
2023. So, I appreciate you discussing something that is going 
to be and is very important to my district on the Central Coast 
of California.
    Recently, I led a bipartisan letter with my colleague 
Shontel Brown and the late Congressman Don Young, requesting an 
additional $900 million to support The Emergency Food 
Assistance Program, TEFAP, as we have been discussing, 
obviously identifying the urgent need to resource this vital 
program.
    I am continuing, though, to hear from food banks in my 
district about how critical TEFAP is so that they can meet 
their demand for food. And I think we all know that food banks, 
as well as families, are being squeezed by the cost of food, 
fuel, and other basic needs, especially at this time.
    Mr. Waide, I am going to hit you up again. I know you have 
been busy in this hearing, as I have been seeing, but I am 
going to rely on your expertise to answer this next question. 
Go ahead and describe what the Federal drop in commodities has 
meant to food banks, and what can be done in the upcoming farm 
bill to ensure food banks who literally are the final backstop 
in the Federal Government's safety net? What can be done to 
ensure that they are adequately resourced?
    Mr. Waide. Well, thank you, Congressman, for the question. 
As I have indicated throughout this hearing, food banks right 
now are responding to the decline in Federal commodities by 
buying more food with private resources. We are expecting a 40 
percent decline in the volume of TEFAP food in the coming year 
collectively. And in response to that, we are trying to fill 
the gap with purchased food because we are also seeing 
challenges in terms of donated food due to other issues in the 
supply chain.
    For my food bank, as an example, prior to COVID, we were 
spending approximately $6 million a year in total food 
purchasing activity. In the coming year, we will spend more 
than $15 million on buying food. So that is 2\1/2\ times what 
we were buying prior to the pandemic. And, my food bank 
compared to most food banks in the network is very well-
resourced. And, even for us, if we were to do that 
indefinitely, it would become very challenging to sustain our 
operations.
    So expanded TEFAP funding--and we are recommending $450 
million in annual mandatory TEFAP funding in the next farm 
bill--would help reduce that dependency on buying food and give 
us more resources to invest in programming, to invest in 
trucking, to invest in grant-making to our partners so that we 
can really build our distribution capacity to get food where it 
is needed.
    Mr. Panetta. Great. Great. Thank you. I appreciate that.
    Dr. Gruner, I got two for you. Obviously, you understand 
the importance of using SNAP, especially, to buy fresh fruits 
and vegetables, but also at farmers' markets. And 
unfortunately, there are some barriers there that SNAP 
beneficiaries have in using their benefits at farmers' markets. 
What are some of those barriers, and how can we make it a 
little bit easier for people to use their SNAP benefits at 
farmers' markets?
    Dr. Gruner. I will take a perspective from our rural areas. 
Just having EBT equipment that connects and that can read 
cards, so connectivity broadband is where we definitely need 
investment for our rural communities so that they can have SNAP 
equipment that can read EBT cards so that beneficiaries can 
even participate in the program or even use SNAP benefits at 
farmers' markets. So, I would say that is one of the primary 
things that we see, just an additional investment and a need 
for technology support in our rural communities.
    I am sorry, you had one more, so I want to just give you an 
opportunity----
    Mr. Panetta. Thank you. Real quickly on the GusNIP, how can 
we utilize online SNAP to improve user experience and increase 
access to fresh fruits and vegetables through the use of 
GusNIP?
    Dr. Gruner. I would love to submit some more--it is a 
complex answer, but I will just say I am thinking about online 
SNAP has to be part of a solution for how we think about 
modernization, and using the farm bill to really lay that 
groundwork work is really important, so it has to be part of 
how we think about it.
    Mr. Panetta. Outstanding. Thank you. Thanks to the 
witnesses. Thank you, Mr. Chairman. I yield back.
    The Chairman. And now the gentlelady from Ohio, Ms. Kaptur, 
is now recognized for 5 minutes.
    Ms. Kaptur. Thank you, Mr. Chairman. What an outstanding 
set of witnesses you have gathered today. And I want to thank 
you all on behalf of the people of Ohio that I represent for 
the tremendous job that you do in representing all of America. 
Your experience will influence us in drafting this farm bill.
    And I wanted to just mention that in another bill Congress 
passed, which is the Infrastructure Investment and Jobs Act 
(Pub. L. 117-58), there is funding there for energy systems, 
new energy systems. Many of the food banks and even farmers' 
markets that we operate around the country could be much more 
efficiently run if they had modern power and even some 
generator backups for some of our freezers and some of our food 
banks. I would urge you to look at that bill and put together 
a--you would have to give it a name, a food network plan for 
the regions that you represent, whether it is West Virginia, 
California, Georgia, wherever it might be, and take a look at 
that bill. And also, on broadband, which Dr. Gruner just 
mentioned, there is funding in that bill that could really help 
you do the work that you are attempting to do. And I thank you 
on behalf of the country.
    I will be real quick and say my goal in participating in 
the farm bill drafting will be to strengthen local agriculture 
in this country. And I have heard that from many of you. And 
another goal of mine is to improve nutrition and the elements 
of that so the younger generation understands what it is to 
grow food and harvest a crop. We are far from that in our 
country, and it is hurting us. It is hurting us as a country.
    So, I am very interested in that, Mr. Besaw, I listened to 
you use the term shorten the food chain. I know he is up there 
on the computer somewhere. But I am somebody that wants to do 
that. And Ms. Schrier, Representative Schrier used the term 
circular food system, and I just am sitting here applauding. 
So, I believe that what American farmers grow, grows America. 
And when they get harmed, boy, we are in trouble. And too much 
of our food is imported. I grew up in a family market. We used 
to go over to Indiana, pick up the best melons in the world. 
The other day, I went to shop at a produce market and the melon 
came from Honduras. There are climate refugees from Honduras. I 
look at that and I say to myself, ``Am I taking food from 
someone in Honduras?'' I don't really know. But I want to 
support local agriculture in this country.
    I am asking myself the following questions. Mr. Waide, do 
food banks in your network have the ability to contract with 
local farmers in order to move product to your food bank? I 
don't know if you are authorized to do that. I would like to 
know that. I will ask these questions very quickly.
    Dr. Gruner, I would like to ask you, in terms of the Senior 
Farmers' Market Nutrition Program, the coupon program, it is so 
popular. Why does it only function in maybe one Congressional 
district per state in this country?
    And number three, how do we encourage local schools to get 
food from local farmers? How do we move into those school 
nutrition contracts? What can we do in the farm bill in that 
regard? So, anybody that wants to address any one of those 
three, I am really interested in your answers. Thank you.
    Mr. Waide. Well, I can quickly answer the first question 
you asked me. We do source purchased produce from local 
farmers. The point I would emphasize, though, for you all to 
consider is the local producers, including socially 
disadvantaged producers in our region, what they really want is 
access to markets and customers, right? And so, working with 
food banks is great for them, but, more importantly, they need 
customers. And the key enabler for them is going to be access 
to capital and investment in their capacity. And so, in 
addition to helping folks participate more regularly in the 
TEFAP program as suppliers, the more we can do through a 
variety of programs, with the farm bill, with FSA programs, is 
help these smaller producers get access to capital to invest in 
their capacity so that they can build customer relationships.
    Ms. Kaptur. I agree with you, Mr. Waide. I don't want to 
cut you off, but in terms of what we can do through the farm 
bill, we can empower our local food banks to buy from local 
farmers because our local farmers are the major donors to our 
food banks, at least where I come from. And I am going, hey, 
how come they can't get a contract to grow cucumbers and 
tomatoes and so forth and move those into the food banks? But 
it is my understanding that that isn't so easily done in 
current programs. I don't know if anyone else wishes to comment 
on that.
    But I did ask two other questions, one about how we can 
improve the ability for local schools to buy local from farmers 
and producers. And then in terms of the Senior Farmers' Market 
Nutrition Program, how can we make it a national program rather 
than diddle around in one Congressional district and half the 
states?
    The Chairman. If you don't mind, your time has expired. But 
that was a very important question, and we would appreciate it 
if each of you could respond to Ms. Kaptur in writing.* And I 
thank you for that, Ms. Kaptur, and for your wonderful--oh, 
okay. Mr. Lawson?
---------------------------------------------------------------------------
    * Editor's note: the response from Dr. Gruner is located on p. 
1103.
---------------------------------------------------------------------------
    Mr. Lawson. Thank you, Mr. Chairman. Thank you. I am having 
some difficulty on the computer, but now, I think--first, I 
want to thank you----
    The Chairman. Yes----
    Mr. Lawson.--Mr. Chairman and Mr. Thompson, for holding 
such a great hearing. And, hunger is a serious issue among 
seniors. According to the recent data from Feeding America, 
nearly 5.2 million seniors were food-insecure during 2020, 
which is incredible. Dr. Gruner, you had heard that the Senior 
Farmers' Market Nutrition Program is drastically oversubscribed 
nationally. Can you tell us roughly how many more seniors you 
could serve with more funding? Dr. Gruner?
    The Chairman. Yes, Mr. Lawson, can you repeat the question 
and who you directed it to?
    Mr. Lawson. Yes. Mr. Chairman, I don't know whether you can 
hear me, but it was directed to Dr. Gruner. I was talking about 
the 5.2 million seniors that were food-insecure in 2020. And my 
question was, we have heard that Seniors Farmers' Market 
Nutrition Program is drastically oversubscribed nationally. And 
I was asking, Doctor, can you tell us roughly how many more 
seniors you could serve with more funding?
    Dr. Gruner. Thank you, Representative. I think where we see 
opportunity is we also need an additional investment in admin. 
When we talk to some of our neighboring states, I think where 
we see commonality is a lot of us are limited in how much 
outreach we can do. And so, speaking of the program only being 
in a couple of Congressional districts, that is really because 
the personnel time is so strapped, especially in a state like 
Arizona. We are the sixth-largest state, and so getting to all 
of our rural communities and getting out and transportation 
there and getting programs up and running there, technical 
support there, and then also just distributing coupons or 
whatever the incentive model there is, is quite challenging. 
And so I think additional admin would really help us to expand 
our capacity.
    In Arizona, we served just over almost 1,400 seniors last 
year, but we are also capped at whatever our CFAP program is, a 
that is like one of the entry points. We have created an 
additional way that we can do an eligibility waiver. But 
essentially, it is really tied closely with our CFAP. So, I 
think these programs work really closely together. But, 
ultimately, we have farmers that are available and willing to 
offer product. We just need personnel and resources to be able 
to expand into other communities and reach more seniors. So, I 
would say that we don't necessarily have a number I can say, 
but I would say just additional admin time would help not just 
Arizona, but some of our neighboring states as well to really 
expand to reach some of those hard-to-reach areas of all of our 
states.
    Mr. Lawson. Okay, thank you very much. And, Mr. Waide, 
thank you for all the work that you are doing in Georgia 
distributing food during these difficult times. I am very 
interested in Atlanta Community Food Bank's work and with 
housing, health services, job training, and other critical 
support. The kind of wrap-around service that you provide can 
change the lives during this time. So, are there any 
restrictions on TEFAP that prevents you from offering more 
support services?
    Mr. Waide. There are no restrictions in TEFAP that prevent 
us from offering more services. The way we typically do that is 
by partnering with other organizations that are experts in 
those areas. We are really good at moving food. We are really 
good at building partnerships on the grassroots level and 
investing the capacity of other organizations. Those other 
organizations are really good at job training or other kinds of 
healthcare type of provision of services, and we really 
leverage their expertise.
    I think the key thing that could always make a difference 
is expanding eligibility for TEFAP. Right now, about 57 percent 
of the people we serve earn too much money to be eligible for 
TEFAP, and so we could serve more of those people more food and 
do more work for them if that eligibility threshold were lifted 
to a higher number.
    Mr. Lawson. Thank you very much. Mr. Chairman, my time is 
running out, and I yield back.
    The Chairman. All right, thank you very much. And now we 
have reached the end of our hearing. And we want to first of 
all thank you. And then we are going to have some comments from 
the Ranking Member and then my closing statement as well.
    So first, Mr. Kyle Waide, President and CEO of Atlanta's 
Community Food Bank, we want to say thank you. And we are 
committed to helping secure this additional $450 million. I 
believe this Committee--and I think you have heard from them--
share this goal as well. And with the help of my good friend, 
the Ranking Member, I believe we will be able to do it.
    And now, Mr. Gary Besaw, Director of the Menominee Tribal 
Department of Agriculture and Food Systems, we want to say 
thank you to your excellent testimony.
    And to Dr. Jessie Gruner, Director of Community 
Innovations, Clinical Prevention, thank you very much.
    And for Ms. Spencer Moss, Executive Director of the West 
Virginia Food and Farm Coalition, thank you for your very 
informative testimony.
    And Mr. William Smittcamp, President and CEO of the Wawona 
Frozen Foods, testifying on behalf of the American Frozen Foods 
Institute, thank you for your excellent testimony and 
presenting that very important perspective from our frozen 
foods. They play a very important role.
    And now with that before I give my closing statement, Mr. 
Ranking Member, I recognize you.
    Mr. Thompson. All right, Mr. Chairman, thank you so much. 
Each of the witnesses, thank you for bringing your experience, 
your expertise, and obviously your passion in this realm. 
Nutrition is incredibly--Title IV of the farm bill, the 
Nutrition Title is a very important title, as important as any 
other title in the farm bill. And quite frankly, this is 
about--I think Title IV for me summarizes what I have come to 
identify as a rural value, maybe an urban value, too. I have 
never lived in urban America, so I am not sure. But a rural 
value is neighbors help neighbors in need. And part of that is 
making sure that we look at it from a broad perspective.
    Certainly, as was pointed out, in a lot of the testimony I 
heard today, it is recognized that financial distress, poverty, 
whatever we want to call it, financial challenge is transitory. 
People enter in and they are either in or out. I don't think we 
will ever end poverty, but the goal is to help people stay 
there for a short period of time when they find themselves in 
difficult financial situations, whether it is because of 
nothing that they did, or quite frankly, bad decisions, 
whatever would put them in that.
    And so, I think that that is why, not only making sure that 
folks are getting access to nutrition, I think nutrition comes 
in many different ways. Frozen, fresh, I don't get too hung up 
on how things are packaged. But, in addition to that, I think 
we have an obligation here to make sure that we are helping 
people effectively move out of poverty, out of financial 
distress to the point that they don't need these programs. And 
that is why we have the SNAP-Education programs. That is why we 
have the education, call it training, although I will say, the 
Ranking Member in the Education Workforce Committee would take 
argument with that because she says we train dogs and we 
educate people. And I don't argue with her, so I am okay with 
that.
    And we have great programs to do that. We reauthorized the 
Perkins Act (Pub. L. 115-224) for education, laborers, career 
and technical education. We have great opportunities. We 
expanded apprenticeships, so we have different ways to move 
people out of poverty. And we need our partners who are there 
to help people land softly, let's say, when they find 
themselves in financial distress, get the proper nutrition they 
need. They help us be partners to move these folks so that they 
can realize the American dream because the American dream is 
not being stuck in financially difficult circumstances, 
obviously. This country offers more than that.
    I think we also have to be looking--and I know it was part 
of my opening remarks--of what puts people into poverty, these 
inflation prices, which I think are self-inflicted at this 
point when you look at energy policy, when you look at 
regulatory policy. It is just incredible where inflation has 
come to over eight percent, a new record just this past week. 
And so, we need to--we in terms of us, Members of Congress--we 
need to be looking at what can we do in order to correct the 
course of the policies we have seen over the past couple of 
years that lead people into those poverty circumstances.
    So, we have a stunning statistic, and I am going to round 
off numbers, I apologize if I get it wrong by a decimal point. 
But there is somewhere in the neighborhood of 11.2 jobs open 
and available in this country today. That is more than maybe 
any time in our lifetime. And unless I am incorrect, I believe 
there are about 11 million people that have been on the SNAP 
program, and that is the able-bodied adults that do not have 
dependent children or, quite frankly, parents that need care at 
home because those folks need to be dedicated to doing that. 
And these are able-bodied folks.
    And so, we got a lot of work ahead of us actually. And I 
really appreciate the role that you all play primarily in the 
nutrition space. But quite frankly, those who participate in 
the programs where we also put an emphasis into the education 
component to helping people move out of those financially 
distressed circumstances to greater opportunity, which that is 
basically the only thing this country promises each and every 
one of us.
    So, Mr. Chairman, thanks so much for this hearing and your 
leadership.
    The Chairman. And thank you, Ranking Member, for your 
leadership as well. You are my partner on this Committee. You 
and I have worked together on many things, and I appreciate 
that, and certainly none greater than making sure that we feed 
the American people. That is the number one objective of our 
Agriculture Committee. And I appreciate our partnership.
    And I just want to say again, and echo a few of the things 
that the Ranking Member mentioned as well; our first priority 
is what we have been in here talking about. But we are also 
faced with numerous challenges. And then, more than that, 
statistical evidence that Mr. Kyle Waide presented in terms of 
the 40 percent increase in terms of need. That is almost half 
of what we are doing. We have to increase. We have been hit 
with COVID-19. We have been hit with challenges all the way 
through.
    Many of our veterans are going hungry, and that just breaks 
my heart for any of our American citizens going hungry. But 
Lord knows those that have put their lives on the line for us 
are reaching pinnacles of homelessness and food deserts. 
Sometimes the chill in this room, this gives me an aggravated 
cough, so I appreciate you all working with me on that during 
this session.
    But I can't tell you how grateful we are. And you have 
reinforced--I think you have heard from the feedback from the 
Members of this Committee, both on the Republican side and on 
the Democratic side. This is one thing, one issue that has 
bipartisan support, feeding our nation.
    And so, I mean that sincerely, Mr. Waide, we are going to 
get you and this nation that $450 million that is needed in 
this farm bill. We are committed to doing that. And I think 
then that I feel confident that we have the collective power to 
get it done.
    And all of the other recommendations that each of you have 
mentioned, we can get it done. All we have to do is work 
together in a bipartisan way. That is the way you get things 
done. In my whole career people say I have done great work, but 
I have done great bipartisan work. And we Democrats and 
Republicans are going to work together to make this the 
absolute best farm bill we have ever had. And we have had a 
bunch of, many of them, but we want to keep improving.
    And so, I just want to thank you. And before I close out, I 
want to thank my wonderful staff. They have put together a 
wonderful hearing here. Would you mind giving my staff a good 
round of applause? These are the people that do the work. And 
so I thank you for that. And I believe I have to do a little 
homework here before I adjourn.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any question posed by a Member.
    With that, this hearing of the Committee on Agriculture of 
the House of Representatives is adjourned.
    [Whereupon, at 1:09 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letter by Hon. Alma S. Adams, a Representative in Congress 
                          from North Carolina
June 9, 2022

 
 
 
Hon. Nancy Pelosi,                   Hon. Chuck Schumer,
Speaker of the House,                Majority Leader,
U.S. House of Representatives,       United States Senate,
Washington, D.C.;                    Washington, D.C.;
 
Hon. Kevin McCarthy,                 Hon. Mitch McConnell,
Minority Leader,                     Minority Leader,
U.S. House of Representatives,       United States Senate,
Washington, D.C.;                    Washington, D.C.
 

    Dear Speaker Pelosi, Minority Leader McCarthy, Majority Leader 
Schumer, Minority Leader McConnell,

    We urge you to take steps now to prevent a ``hunger cliff'' that 
otherwise looms ahead when the Federal COVID-19 Public Health Emergency 
Declaration (PHE) expires.
    Food insecurity in 2020 affected an estimated one in ten U.S. 
households overall. Food insecurity also had disparate impacts, with 
food insecurity affecting nearly one in eight Hispanic-headed 
households and more than one in five Black-headed households.\1\ Recent 
supply chain issues, the Russian invasion of Ukraine, and other factors 
pushing food price rises are exacerbating the challenges many Americans 
have in affording an adequate diet.
---------------------------------------------------------------------------
    \1\ https://www.ers.usda.gov/publications/pub-details/
?pubid=102075.
---------------------------------------------------------------------------
    Federal relief enacted at the outset of the pandemic has helped to 
mitigate the depth of hunger. Specifically, the Families First 
Coronavirus Response Act of 2020 authorized the issuance of SNAP 
Emergency Allotments (EAs) while Federal and state PHEs are in place. 
That Act also temporarily suspended time limits on SNAP eligibility for 
certain unemployed and underemployed workers and provided USDA with 
enhanced authority to allow changes to SNAP operations. The 
Consolidated Appropriations Act, 2021 increased SNAP access for college 
students during COVID-19.
    In addition to positive impacts on the food budgets of millions of 
households and the streamlining of administrative operations, the 
temporary SNAP relief has had positive impacts on the economy. Each $1 
in SNAP benefits during a downturn generates between $1.50 and $1.80 in 
economic activity. That has benefited the entire food chain--from 
farmers, ranchers and food manufacturers, to truckers, grocers and 
store clerks.
    Moreover, SNAP has had positive impacts on all communities, rural 
as well as urban. In 2020, SNAP reduced poverty in metro areas by 0.8 
percent and in rural areas by nearly double that (1.4 percent).\2\
---------------------------------------------------------------------------
    \2\ https://www.aei.org/wp-content/uploads/2022/03/SNAP-Supports-
Rural-Families.pdf?x
91208.
---------------------------------------------------------------------------
    Once the HHS PHE sunsets, however, much of these SNAP relief 
measures also will end. Due to the end to EAs alone, most SNAP 
participants, on average, are expected to lose $82 per person a month 
in SNAP benefits. The average SNAP benefit will fall to about a mere 
$5.40 per person per day.
    Action is needed to avert the looming ``hunger cliff'' and to 
strengthen SNAP permanently. First, Congress should both extend the 
authority for issuing SNAP EAs beyond the PHE to provide a more gradual 
path to regular benefits as well as instruct USDA to require states to 
notify and robustly screen all households for all allowable shelter, 
childcare, and medical expense deductions in order to ensure the 
correct amount of SNAP benefits.
    Second, Congress should include in any upcoming legislation three 
key strengthen SNAP bills:

          Closing the Meal Gap Act of 2021 (H.R. 4077/S. 2192) to 
        address SNAP benefit adequacy and equity by: (1) substituting 
        the Low Cost Food Plan for the Thrifty Food Plan as the market 
        basket on which to calculate SNAP benefits; (2) increasing the 
        $20 minimum monthly benefit; (3) removing the cap on the 
        shelter costs that households with children can take into 
        account for SNAP; (4) streamlining the SNAP standard medical 
        deduction for SNAP participants who are elderly or have a 
        disability; and (5) providing equitable access to residents of 
        Puerto Rico, American Samoa, and the Commonwealth of the 
        Northern Mariana Islands.
          Two additional bills to improve equitable access to SNAP: 
        one, ending a time limit on benefits for certain unemployed and 
        underemployed adults (Improving Access to Nutrition Act of 2021 
        (H.R. 1753)); the other, eliminating long-standing rules that 
        require many college students to work 20 hours a week for their 
        food benefits, effectively undermining their educational 
        success. (Enhance Access To SNAP Act of 2021 (H.R. 1919/S. 
        2515)).

    Hungry people can't wait. Taking these actions now can help avert a 
severe ``hunger cliff'' and promote food security and economic equity 
during COVID-19 and beyond.
            Sincerely, 
            
            

 
 
 
Hon. James P. McGovern,              Hon. Alma S. Adams,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Barbara Lee,                    Hon. Melanie A. Stansbury,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jimmy Panetta,                  Hon. Janice D. Schakowsky,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Dina Titus,                     Hon. Cori Bush,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mary Gay Scanlon,               Hon. Raul M. Grijalva,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Adam Smith,                     Hon. Frank J. Mrvan,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jimmy Gomez,                    Hon. Al Lawson, Jr.,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Judy Chu,                       Hon. Sara Jacobs,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Ted Lieu,                       Hon. Terri A. Sewell,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Frank Pallone, Jr.,             Hon. Mark Pocan,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Salud O. Carbajal,              Hon. Zoe Lofgren,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Suzan K. DelBene,               Hon. Peter Welch,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mark DeSaulnier,                Hon. Grace Meng,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Ayanna Pressley,                Hon. Tony Cardenas,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. J. Luis Correa,                 Hon. Juan Vargas,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Lori Trahan,                    Hon. Jim Costa,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Doris O. Matsui,                Hon. Danny K. Davis,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Norma J. Torres,                Hon. Eric Swalwell,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Karen Bass,                     Hon. Alan S. Lowenthal,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jared Huffman,                  Hon. Linda T. Sanchez,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Julia Brownley,                 Hon. Gregorio Kilili Camacho
Member of Congress                    Sablan,
                                     Member of Congress
 

                                     
                                     

 
 
 
Hon. Jahana Hayes,                   Hon. Chellie Pingree,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Scott H. Peters,                Hon. Nydia M. Velazquez,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Ritchie Torres,                 Hon. Jake Auchincloss,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Anna G. Eshoo,                  Hon. Jerrold Nadler,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Marilyn Strickland,             Hon. Dwight Evans,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Raul Ruiz,                      Hon. Earl Blumenauer,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Adriano Espaillat,              Hon. Gwen Moore,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Derek Kilmer,                   Hon. Donald M. Payne, Jr.,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jamie Raskin,                   Hon. Colin Z. Allred,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mondaire Jones,                 Hon. Joseph D. Morelle,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Paul Tonko,                     Hon. Mike Levin,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Bobby L. Rush,                  Hon. Nanette Diaz Barragan,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. G. K. Butterfield,              Hon. Shontel M. Brown,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Veronica Escobar,               Hon. Ruben Gallego,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Vicente Gonzalez,               Hon. Nikema Williams,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Stacey E. Plaskett,             Hon. John Garamendi,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Katie Porter,                   Hon. A. Donald McEachin,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Troy A. Carter,
Member of Congress
 

                                 ______
                                 
 Submitted Letter by Hon. Jimmy Panetta, a Representative in Congress 
                            from California
February 28, 2022

 
 
 
Hon. Tammy Baldwin,                  Hon. Sanford D. Bishop, Jr.,
Chair,                               Chair,
Senate Appropriations Agriculture,   House Appropriations Agriculture,
 Rural Development, Food and Drug     Rural Development, Food and Drug
 Administration, and Related          Administration, and Related
 Agencies Subcommittee,               Agencies Subcommittee,
Washington, D.C.;                    Washington, D.C.;
 
Hon. John Hoeven                     Hon. Andy Harris
Ranking Minority Member,             Ranking Minority Member,
Senate Appropriations Agriculture,   House Appropriations Agriculture,
 Rural Development, Food and Drug     Rural Development, Food and Drug
 Administration, and Related          Administration, and Related
 Agencies Subcommittee,               Agencies Subcommittee,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairs Baldwin and Bishop and Ranking Members Hoeven and 
Harris:

    We write to respectfully request that you include additional 
funding beyond what has already been provided in FY 2022 appropriations 
legislation for The Emergency Food Assistance Program (TEFAP) in 
omnibus spending legislation or any additional COVID relief 
supplemental spending legislation.
    The charitable food system continues to experience an on-average 40 
percent increase in demand for local emergency hunger relief, with over 
60 million people turning to food banks in 2020.\1\ This rise comes at 
a time when past emergency food support provided by Congress has ended. 
As we continue to observe a high demand for food assistance, food banks 
will need additional support to ensure they can meet the demand from 
community members, families, and children facing hunger.
---------------------------------------------------------------------------
    \1\ State-By-State Resource: The Coming Food Bank Crisis--Your 
Community May Face a Food Crisis in 2021--Feeding America Action 
(https://feedingamericaaction.org/resources/state-by-state-resource-
the-coming-food-bank-crisis-your-community-may-face-a-food-crisis-in-
2021/).
---------------------------------------------------------------------------
    United States Department of Agriculture (USDA) foods including 
TEFAP are the cornerstone of the food supply for our nation's food 
banks. According to Feeding America, USDA commodities provide 
approximately 39 percent of the food distributed by their network of 
200 food banks and 60,000 local faith-based and charitable partner 
organizations. Last year, USDA foods provided 2.4 billion meals 
distributed to their network food banks. Many food banks could struggle 
to meet the demand for food assistance without the fresh fruits, 
vegetables, protein, and more provided through the program.
    Further, TEFAP is essential to rural communities. Rural communities 
make up 63 percent of all counties in the United States, but account 
for 87 percent of counties with the highest rates of food insecurity in 
the nation.\2\ Last year, through USDA commodities, food banks 
distributed 1.2 billion pounds of food to rural America,\3\ with TEFAP 
providing nearly 40 percent of this assistance. For years, farmers, 
agriculture partners, and food banks have maintained a deep working 
relationship to provide U.S. grown commodities to families and children 
facing hunger.
---------------------------------------------------------------------------
    \2\ Rural Hunger Facts D Feeding America (https://
www.feedingamerica.org/hunger-in-america/rural-hunger-facts).
    \3\ The Emergency Food Assistance Program is Rural America's Hunger 
Lifeline--Feeding America Action (https://feedingamericaaction.org/
tefaphelpsruralhunger/).
---------------------------------------------------------------------------
    We can help address the need for emergency food bank support by 
providing an additional $900 million for food purchases through TEFAP. 
We ask that you include this additional critical funding to ensure 
food-insecure families can put food on the table.
            Sincerely,
            
            

 
 
 
Hon. Jimmy Panetta,      Hon. Shontel M. Brown,   Hon. Don Young,
Member of Congress       Member of Congress       Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Jake Auchincloss,               Hon. Debbie Dingell,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Gwen Moore,                     Hon. Kim Schrier,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Jahana Hayes,                   Hon. Suzanne Bonamici,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Salud O. Carbajal,              Hon. Jared Huffman,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Zoe Lofgren,                    Hon. Jim Costa,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Alma S. Adams,                  Hon. Mike Thompson,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Sharice Davids,                 Hon. James P. McGovern,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Nikema Williams,                Hon. Lori Trahan,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Adam Smith,                     Hon. Jimmy Gomez,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. John Garamendi,                 Hon. Daniel Meuser,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Julia Brownley,                 Hon. Kaiali'i Kahele,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Earl Blumenauer,                Hon. Ann M. Kuster,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mary Gay Scanlon,               Hon. Jason Crow,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. David N. Cicilline,             Hon. Abigail Davis Spanberger,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Eddie Bernice Johnson,          Hon. Angie Craig,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Conor Lamb,                     Hon. Eric Swalwell,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. James R. Langevin,              Hon. Ted Lieu,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Peter A. DeFazio,               Hon. J. Luis Correa,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Juan Vargas,                    Hon. Madeleine Dean,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Mark DeSaulnier,                Hon. Joyce Beatty,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Dwight Evans,                   Hon. Andy Kim,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Donald Norcross,                Hon. Peter Welch,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Ro Khanna,                      Hon. Jerrold Nadler,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. G. K. Butterfield,              Hon. Emanuel Cleaver,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Josh Gottheimer,                Hon. Jerry McNerney,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Rick Larsen,                    Hon. Eleanor Holmes Norton,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Anna G. Eshoo,                  Hon. Andre Carson,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Bobby L. Rush,                  Hon. Steven Horsford,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Danny K. Davis,                 Hon. Carolyn B. Maloney,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Colin Z. Allred,                Hon. Stephen F. Lynch,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Marc A. Veasey,                 Hon. Katie Porter,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Deborah K. Ross,                Hon. Ritchie Torres,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Kurt Schrader,                  Hon. Dina Titus,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Linda T. Sanchez,               Hon. Veronica Escobar,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Melanie A. Stansbury,           Hon. Stacey E. Plaskett,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Raul M. Grijalva,               Hon. Elaine G. Luria,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Troy A. Carter,                 Hon. Joe Neguse,
Member of Congress                   Member of Congress
 

                                     
                                     

 
 
 
Hon. Thomas R. Suozzi,               Hon. Hakeem S. Jeffries,
Member of Congress                   Member of Congress
 

                                 ______
                                 
  Supplementary Material Submitted by Kyle Waide, President and Chief 
             Executive Officer, Atlanta Community Food Bank
Insert 1
          Mr. Costa. All right. You talk about waste in our food supply 
        chain, and you noted $2,100. How do we get at the waste that we 
        need to cut at all ends of the food supply chain? My time is 
        obviously almost over. But I would like you to submit that to 
        the Committee for future reference.

    Feeding America is the nation's largest food rescue organization 
and partners with food manufacturers, retailers, restaurants, and 
growers to recover surplus nutritious food and distribute it to people 
in need. An estimated 72 billion pounds of edible food goes to waste 
each year in the United States. Last year, the Feeding America food 
bank network and partners rescued 4.7 billion pounds of groceries to 
help provide additional food assistance to our neighbors facing hunger. 
In Georgia, we continue to work with agriculture partners to ensure 
agriculture products that would otherwise go to waste can be used to 
help Georgians facing hunger. However, Congress and the United States 
Department of Agriculture (USDA) can take additional actions to reduce 
food waste and increase food assistance. The Feeding America food bank 
network urges Congress and the USDA to consider the following policy 
suggestions:

   Increase technical support and education about the Bill 
        Emerson Good Samaritan Food Donation Act, to reduce donor 
        concern about potential liability.

   Increase storage and distribution funding for food rescue 
        efforts. The 2018 Farm Bill funded food waste pilots that USDA 
        has implemented to focus on composting at the municipal level; 
        this should be expanded to include food rescue support by food 
        banks and others.

   Standardize food donation guidelines to allow the donation 
        of safe, nutritious food beyond the ``sell-by'' date. 
        Currently, 20 states do not allow the donation of food if it is 
        beyond a ``sell-by'' date, even when the food is known to be 
        safe and nutritious.

   Simplify food labels by providing a uniform national 
        standard to reduce confusion around what terms like ``sell-
        by,'' ``best-by,'' ``use-by,'' and ``best before'' dates mean.

   Provide resources to innovative food rescue programs, 
        including offsetting the cost to harvest, pack, and transport 
        donated food.

   Increase tax incentives for food donation and provide tax 
        incentives for donations of transportation to 501(c)(3) 
        nonprofit organizations or grant dollars to support 
        transportation and distribution of recovered food.

   Increase access to donated foods for Native American 
        communities by allowing Tribal organizations to receive donated 
        food, along with 501(c)(3) organizations, under Internal 
        Revenue Code Section 170(e)(3).
Insert 2
          Mr. Austin Scott of Georgia. . . .
          We have moved now to the TEFAP program since Farmers to 
        Families was canceled. And just I understand that your food 
        bank, that you have received some of these boxes already, is 
        that correct?
          Mr. Waide. Yes, we received boxes through both programs. The 
        Farmers to Families Food Box Program provided a lot of support 
        for our community, helped us meet the need in our community. 
        And in the new program, we have benefited from that as well.
          Mr. Austin Scott of Georgia. And how many commodities are 
        available through that program?
          Mr. Waide. I don't know the specific number of commodities. 
        We can follow up with that specific answer.

    According to the United States Department of Agriculture (USDA), 
from May to December 2020, the Farmers to Families Food Box Program 
provided 132 million food boxes nationwide to people in need of food 
assistance. The Feeding America food bank network distributed 20-29% of 
the food throughout this timeframe. While the program provided critical 
additional food assistance during an unprecedented time, the 
Administration and Congress should consider a few recommendations 
before potentially implementing similar programs. These recommendations 
include:

   Provide increased accountability for the Farmers to Families 
        Food Box Program by requiring distributors to distribute the 
        food in an equitable manner nationwide through USDA Food 
        Distributions Programs like The Emergency Food Assistance 
        Program (TEFAP) to emergency hunger relief organizations.

   Provide support for emergency hunger relief organizations 
        for distribution costs by providing storage and distribution 
        grants directly to the organizations per truckload of food 
        received.

   Provide a steady supply of ready-to-load commodities to food 
        banks to help meet demand. Both growers and food banks would 
        benefit from knowing how long additional food purchase support 
        from USDA could last so that they can plan accordingly and 
        understand the impact of the program. This would allow food 
        banks to plan with other partners to source additional food as 
        needed. The Farmers to Families Food Box Program provided food 
        quickly but was not as efficient or effective as it could be in 
        distributing food to people in need. We recommend a program 
        that provides food quickly during this crisis, but that 
        operates through existing distribution channels to ensure 
        equitable distribution across the country, predictable 
        deliveries, and safe food handling.
Insert 3
          Mr. Allen. . . .
           . . . And for our witnesses today, seeing Title IV alone 
        will cost taxpayers more than $1.1 trillion over the next 10 
        years, how do you reconcile that with your programmatic 
        recommendations? And we will start off with you, Mr. Smittcamp, 
        I believe, if I am reading that correct.
          * * * * *
          Mr. Allen. Sorry, I am out of time. And, Mr. Waide, if you 
        will provide us something to that question to us in writing, I 
        would appreciate it. Mr. Chairman, I yield back. Thank you.

    Currently, 38 million people, including 12 million children, 
continue to face hunger in the United States, which is still higher 
than pre-pandemic levels. Last year, one in six people in the United 
States--53 million people--sought help from the charitable food sector. 
In Georgia, the food insecurity rate within the Atlanta Community Food 
Bank's 29 county service area is currently 12%. In addition, hunger 
continues to disproportionately impact communities of color and rural 
communities, which often have higher rates of food insecurity. While 
food banks have worked tirelessly to ensure our neighbors in need have 
access to emergency food assistance, we know hunger cannot be solved 
without continued strong partnerships between the private- and public-
sectors. For example, United States Department of Agriculture (USDA) 
commodities like The Emergency Food Assistance Program (TEFAP) provide 
39% of all the food distributed through the Feeding America food bank 
network. This critical program would not exist without the strong 
partnerships between our nation's farmers, food banks, and the USDA. 
Federal nutrition programs have been proven to help reduce hunger 
across the United States, and Congress should continue to invest in 
these programs. In the 2023 Farm Bill, the Feeding America food bank 
network is urging Congress for a modest increase in increase TEFAP 
baseline funding by $250 million a year, providing $500 million total 
for TEFAP food purchases before adjusting for inflation. TEFAP is 
currently funded at $250 million per year, adjusted annually by the 
Thrifty Food Plan, with an additional $35 million per year added by the 
2018 Farm Bill. Increased funding for TEFAP will help ensure food banks 
can continue to meet the demand for food assistance from neighbors in 
need. In addition, Feeding America is planning for a nearly 40% 
decrease in Federal commodity food pounds in FY2023. Food banks will 
not be able to make up for the decrease in food without additional 
increases in TEFAP and other USDA commodity programs.
                                 ______
                                 
   Supplementary Material Submitted by Jessie G. Gruner, Ph.D., RDN, 
         Director of Community Innovations, Pinnacle Prevention
Insert 1
          Ms. Kaptur. . . .
          * * * * *
          Dr. Gruner, I would like to ask you, in terms of the Senior 
        Farmers' Market Nutrition Program, the coupon program, it is so 
        popular. Why does it only function in maybe one Congressional 
        district per state in this country?
          And number three, how do we encourage local schools to get 
        food from local farmers? How do we move into those school 
        nutrition contracts? What can we do in the farm bill in that 
        regard? So, anybody that wants to address any one of those 
        three, I am really interested in your answers. Thank you.
          * * * * *
          The Chairman. If you don't mind, your time has expired. But 
        that was a very important question, and we would appreciate it 
        if each of you could respond to Ms. Kaptur in writing.

    Thank you for your questions, Representative Kaptur. We typically 
see the greatest utilization of the Senior Farmers['] Market Nutrition 
Program (SFMNP) in places and regions where seniors have greater access 
to farmers['] markets and limited transportation barriers. Due to the 
limited funding of the program, we believe that some states are 
strategic in channeling their funding to areas where they will have the 
highest utilization of the program with the lowest human capacity for 
implementation. Ultimately this results in the program operating only 
in one or two Congressional districts per state. Our experience with 
the SFMNP has led us to recognize that innovative transportation 
solutions and additional technical assistance are needed to increase 
access to the program, especially in geographically hard-to-reach 
communities, including rural and Tribal areas. Additional resources to 
meet the needs of these communities in the form of administrative funds 
would help to ensure that more seniors and growers can participate in 
this program and further shore up our regional food system. Even a 
small amount of increased investment can greatly increase reach, 
program utilization, and ultimately consumption of nutritionally-dense 
food among our senior population. For example, in Colorado, the 
addition of a nominal $5 per share empowered a CSA program to deliver 
weekly produce directly to isolated households. Increasing the 
administrative cost cap from 10% to 15% would allow states more 
flexibility and innovation to reach underserved communities and further 
advance equity in the program.
    In terms of encouraging schools to get food from local farmers, 
there are a couple of pieces of legislation that will help to move more 
local food into our school system that will hopefully be adopted 
through Child Nutrition Reauthorization (CNR). This includes:

   The Kids Eat Local Act (H.R. 3220, S. 1817), which will 
        bring more local food into school meal and child nutrition 
        programs by making it easier for schools to source local food 
        through procurement processes, providing more market 
        opportunities for farmers, ranchers and fishermen.

   the Farm to School Act (H.R. 1768, S. 1328), which will 
        increase annual funding for the highly demanded Farm to School 
        Program from $5 million to $15 million and increase the grant 
        award maximum to $250,000, which will help support more 
        grantees and grantees from large school districts and state 
        agencies in launching and establishing long-term, sustainable 
        programs.

   The Scratch Cooked Meals for Students Act (H.R. 6608), which 
        will provide funding for culinary training, kitchen equipment, 
        infrastructure, and technical assistance for schools and 
        districts. Greater access to equipment and training will 
        ultimately help to expand the types of products schools are 
        able to procure and cook for students, including more whole and 
        minimally processed products.

   The School Food Modernization Act (H.R. 4379 and S. 876), 
        which will help provide grant assistance and seed funding for 
        schools to upgrade kitchen infrastructure and high-quality 
        equipment, which will expand the type of foods that schools are 
        able to source and menu.

    These policy efforts through CNR will help to build the capacity of 
schools to procure more local food. We also recognize a need to build 
the capacity of local farmers, ranchers, and fishermen to help navigate 
the unique school marketplace. Building off of experiences and lessons 
learned from USDA's recently launched Local Foods for Schools (LFS) 
Cooperative Agreement Program, we have identified a need to help 
farmers build capacity to navigate school procurement systems and a 
need to improve access to equipment and technology to help producers 
source product to their local school districts. This could include 
increased and improved accessibility of funds farmers, ranchers, and 
fishermen could specifically apply for to:

   increase food safety training and certification, such as the 
        Food Safety Certification for Specialty Crop Program;

   improve on-farm cold food storage and transportation, 
        including Coolbots and refrigerated trucks and vans; and

   gain greater access to packing and processing equipment, and 
        third-party possessors to better meet the unique serving size 
        and product needs of schools.

    Continued investment in equipment, infrastructure and technical 
support will help increase the capacity of local farmers which will 
ultimately make it easier for schools to source food from local 
producers. Improving access and creating low-burden application 
processes of existing funding will help to ensure a greater number of 
producers have access to programs, especially historically underserved 
producers. In summary, to evade duplication of efforts, we recommend 
that farm bill efforts emphasize building farmer capacity and CNR 
efforts continue to support building the capacity of schools.
Insert 2
          Ms. Kuster. . . .
          Dr. Gruner, we have heard the program is drastically 
        oversubscribed nationally. Can you tell us roughly how many 
        more seniors you could be serving with more funding in the 
        program?
          Dr. Gruner. Representative, I realize your time has expired. 
        I am happy to follow up in written comments if that would be 
        helpful.

    Thank you for your question, Representative Kuster. It is not our 
experience that the Senior Farmers['] Market Nutrition Program is 
oversubscribed. For context, in Arizona, we have nearly 250,000 seniors 
who are eligible for the SFMNP and our current funding allocation can 
serve roughly 2,600 individuals, meaning we only have enough funding to 
meet about 1% of the need.
    We recognize that there could be improvements made to the funding 
allocation to ensure that there is an equitable distribution of funds 
based on current poverty rates across states. For example, in FY 2021, 
Texas received less than 0.50% of the current SFMNP allocation despite 
being home to 10% of the nation's adults over the age of 65 living in 
poverty. In June of this year, the USDA released a framework for 
shoring up the food supply chain and transforming the food system to be 
more fair, competitive, and resilient. This included an additional $50 
million allocated for the SFMNP. We have submitted a letter to 
Undersecretary Vilsack advocating that this funding be used to help 
resolve the significant inequity in the current allocation of funds to 
be more in line with state poverty rates. We suggest that in order to 
have a distribution of funds that more accurately reflects need, the 
additional $50 million be used to ensure that all states receive an 
allocation that (at a minimum) reflects a standard equation based on 
poverty rates, without penalizing states that are meeting and exceeding 
their current caseloads. While this one-time funding is a welcomed 
investment that will ultimately help to serve more seniors and improve 
equity in the program, what is ultimately needed long-term is an 
increase in the base funding for the program through farm bill to 
create a more sustainable solution. Reexamining the current 
appropriation of funds in the absence of increased base funding will 
continue to perpetuate the disparities in the funding allocation and 
would fail to address the true need of serving more seniors and 
optimize the full capacity and potential for this program.
    In terms of how many more seniors we could we could serve in 
Arizona, approximately 23,000 seniors participate in the Commodity 
Supplemental Food Program (CSFP), making them eligible for the SFMNP 
(in Arizona, our SFMNP is tied to CSFP participation). We are currently 
serving 2,600 seniors and with additional funding we would have the 
capacity to serve all seniors participating in CSFP.
                                 ______
                                 
                          Submitted Questions
Response from Kyle Waide, President and Chief Executive Officer, 
        Atlanta Community Food Bank
Question Submitted by Hon. Salud O. Carbajal, a Representative in 
        Congress from California
    Question. As a supporter of additional funding for TEFAP, I know 
how vital the program continues to be to ensure food banks can continue 
to meet the increased demand for food. During the pandemic, I heard 
from food banks in my district about the flexibilities that allowed 
them to improve program operations. Allowing things as simple as a 
streamlined signature process was critical as food banks had to shift 
to scale up and quickly modify their programs. I'm also glad to see 
California raise the income threshold so that families facing higher 
costs of living can access the program.
    Mr. Waide, can you describe ideas to strengthen TEFAP in the 2023 
Farm Bill by building on program improvements while maintaining the 
critical civil rights protections in Federal nutrition programs?
    Answer. The Emergency Food Assistance Program (TEFAP) and United 
States Department of Agriculture (USDA) foods are the backbones of the 
Feeding America food bank food supply, providing 39 percent of the food 
we distribute to people in need of emergency food assistance. The 
Atlanta Community Food Bank distributed approximately 40 million pounds 
of food commodities provided through TEFAP and other special USDA 
programs in our FY 2021. In addition, TEFAP and USDA foods continue to 
be a critical source of nutrition for unserved and rural communities. 
Last year, Feeding America distributed 1.2 billion pounds of food in 
rural communities, and 465 million pounds distributed in rural counties 
were through USDA commodities like TEFAP. As our nation's food banks 
continue to experience an increase in demand for food assistance and a 
decline in retail donations, food banks will need additional support to 
help meet the demand. Unfortunately, Feeding America is planning for a 
nearly 40% decrease in Federal commodity food pounds in FY 2023, which 
cannot be made up without additional investments in TEFAP. In the 2023 
Farm Bill, Congress should increase TEFAP baseline funding by $250 
million a year, providing $500 million total for TEFAP food purchases 
before adjusting for inflation. TEFAP is currently funded at $250 
million per year, adjusted annually by the Thrifty Food Plan, with an 
additional $35 million per year added by the 2018 Farm Bill. Congress 
must also authorize $200 million per year for TEFAP Storage and 
Distribution funds and $15 million per year for TEFAP Infrastructure 
Grants. This funding will help ensure that TEFAP food levels remain 
steady throughout the food assistance network, continue to help 
households facing hunger, and support the U.S. agricultural economy. In 
addition, programmatic improvements can be made to increase access to 
the program. TEFAP state agencies should work with distributors of 
TEFAP foods, like food banks, to use policy options that optimize 
distribution. The USDA should strongly encourage states to reduce 
program administrative barriers and reduce barriers to eligibility. 
Federal law specifies four key requirements for TEFAP eligibility: 
Local organizations must collect an individual's name, income 
eligibility, address, and the number of people in their household. 
However, numerous states require additional paperwork that reduces 
individual dignity and creates burdensome processes for food banks and 
state agencies.
Response from Gary J. Besaw, Director, Menominee Tribal Department of 
        Agriculture and Menominee Tribal Food Systems and Food 
        Distribution Program
Questions Submitted by Hon. Tom O'Halleran, a Representative in 
        Congress from Arizona
    Question 1. Mr. Besaw, how do you expect the 638 Self-Determination 
Demonstration Project for FDPIR--or the 638 contracts--to impact local 
farmers and ranchers and the broader food systems in and around 
participating Tribes?
    Answer. This is a new market opportunity for local farmers and 
ranchers that can increase farm income and open doors to other 
institutional markets for our producers. That helps producers grow 
their businesses and scale up, which in turn creates new job 
opportunities. Those new jobs are not only on farm, but also in the 
surrounding food system: when producers scale up and add value-added 
opportunities to their operations, this creates a need for processing 
facilities, packing, transportation and shipping for those value-added 
products. This also keeps food dollars circulating within our 
communities, stabilizing economies. That doesn't just benefit Tribal 
citizens, but everyone in and around the Tribe.
    Importantly--this is also a market opportunity that continues even 
during emergencies. When the coronavirus pandemic started in spring 
2020, almost overnight local farmers and ranchers across the country 
lost market access as restaurants, schools, and even farmers['] markets 
closed. But our food assistance programs like FDPIR continued because 
they had to provide food during that crisis.

    Question 2. Mr. Besaw, of the eight Tribes participating in the 
Self-Determination Demonstration Projects, Menominee is unique in that 
it has joined together with Oneida Nation to establish a joint 638 
Demonstration Project. Can you elaborate on why it was important to 
Menominee collaborate on this project?
    Answer. There were several reasons. Some of the bigger goals of the 
joint 638 Demonstration Project collaboration were to (1). Model a 
cooperative agreement process between two Tribal sovereigns in order to 
demonstrate and educate the USDA/FNS on our unique needs and joint 
processes, (2). Model to other regional Tribal sovereigns that Tribal 
sovereigns can create culturally and legally informed agreements and 
set the stage for future agriculturally related agreements, (3). By 
joining together, we could increase the volume of produce and proteins 
needed to order from each vendor, thus increasing the positive impact 
to indigenous producers and economically justifying their respective 
involvement as suppliers. (4). Since our reservations are approximately 
40 miles apart, by shortening the delivery radius and coordinating 
deliveries, we could decrease the transportation and storage needs, 
thus reducing the carbon footprint, a goal of the USDA as well.

    Question 3. Mr. Besaw, I understand the Self-Determination Projects 
currently last up to 3 years. Does the time-limited nature of the Self-
Determination Projects impact your ability to secure contracts with 
more Native farmers?
    Answer. Yes, absolutely. Timing has certainly been an issue. 
Farmers and ranchers are excited about working with us but they need to 
know about contract availability much earlier in the year to be able to 
plan and commit to that. Also, many of the producers we are working 
with are small- or midsize farmers and ranchers who may be able to 
scale up their operations because of the market opportunity they have 
with these contracts, but that requires additional capital investment, 
which is challenging for them to receive without a guarantee of stable 
contracts. We can provide that stability for our farmers and ranchers 
when we can offer a longer termed, more permanent contract for 
producers to plan out and finance infrastructure improvements needed. 
The longer termed contracts can also serve to provide the justification 
for start-up farmers and producers to develop feasibility models and 
more realistic business plans needed to obtain financing for 
infrastructure and capital needed to get started in the Tribal 
agricultural economy.
    As long as this is a limited pilot project that relies on 
discretionary appropriations, USDA will be unable to extend the kind of 
long-term contracts we need to see the most benefit to our producers, 
people, and food systems from this authority. The next farm bill offers 
an opportunity for Congress to make this authority permanent, which 
would remove that time-limited barrier. That type of change would 
benefit Tribal and non-Tribal producers and ranchers across untold 
communities by creating regional food systems, while also reducing 
carbon emissions by reducing travel and storage needs.

    Question 4. Mr. Besaw, in your testimony, you mention the 
administrative hurdles you ran into last year when Wisconsin suffered 
unusual weather and experienced three hard frosts, damaging many of the 
apples in your region. How would self-governance authority help you 
handle unforeseen issues like this?
    Answer. Expanded self-governance authority for this program would 
help us be as flexible as possible in sourcing food for our people and 
supporting our producers. When those kinds of weather events happen and 
we have limited apples to source, we would have the immediate ability 
to shift and purchase different products for the program, or 
immediately pivot to other available orchards or fruit providers.
    Broader self-governance authority for all USDA programs would be 
even more helpful in situations like this, because Tribes would have 
the ability to offer more immediate disaster relief to our producers.
    The current demonstration project is limited in scope and only 
allows Tribes or Tribal organizations to enter into short-term 
contracts to replace USDA food with locally grown, traditional foods. 
By expanding into self-governance, Tribes would have greater authority 
and flexibility to revise what foods are being provided in the program 
and adapt to the unpredictability of food production. If we had Self-
Governance authority, we would be able to handle unforeseen issues like 
this without having to obtain Federal approval and all the 
administrative work that goes along with it.


 
                     A 2022 REVIEW OF THE FARM BILL

                           (DAIRY PROVISIONS)

                              ----------                              


                        WEDNESDAY, JUNE 22, 2022

                  House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: Representatives David Scott of Georgia, 
Costa, McGovern, Adams, Brown, Kuster, O'Halleran, Carbajal, 
Khanna, Craig, Harder, Axne, Schrier, Bishop, Davids, Thompson, 
LaMalfa, Allen, Johnson, Baird, Balderson, Cloud, Mann, 
Feenstra, Moore, Cammack, and Fischbach.
    Staff present: Lyron Blum-Evitts, Daniel Feingold, Emily 
Pliscott, Kelcy Schaunaman, Ashley Smith, Patricia Straughn, 
Trevor White, Erin Wilson, John Konya, and Dana Sandman.

  STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF GEORGIA

    The Chairman. The hearing will now come to order, and I 
would like to welcome everyone, and thank you each for joining 
us today. Today's hearing is entitled, A 2022 Review of the 
Farm Bill: Dairy Provisions. After brief opening remarks, 
Members will receive testimony from our witnesses, and then the 
hearing will be open for questions. And let me begin with my 
statement first.
    Good morning again, and I appreciate our wonderful 
witnesses for joining us today. Before we discuss the topics of 
today's hearing, I certainly want to welcome Congresswoman 
Sharice Davids to our House Committee on Agriculture. Ms. 
Davids represents the Third District in Kansas and joins Mr. 
Mann as our second Member from the great State of Kansas. So we 
want to extend a welcome to Ms. Davids, and I understand she 
will be joining us in person very soon.
    Today's hearing continues our review of the 2018 Farm Bill 
as we analyze the dairy provisions, and the impact that they 
have had on dairy farmers, and how appropriate it is that we 
hold this hearing in the month of June, as we celebrate Dairy 
Month. I am very pleased to welcome two panels today, a panel 
first of USDA witnesses, and an industry panel. These two 
panels provide us with a depth of expertise to evaluate the 
dairy provisions of the farm bill. A significant portion of 
today's hearing will cover the dairy safety net for family 
farmers, which is an integral part of ensuring the consistent 
production and availability of dairy products.
    And, contained within that safety net, is Dairy Margin 
Coverage. Very, very important, DMC. This program provides more 
comprehensive coverage to small- and medium-sized farms than 
any other program before it. The Dairy Margin Coverage is 
extraordinarily important to our dairy farmers. The creation of 
DMC was an important part of the 2018 Farm Bill, and it is 
vital that we understand if there are ways to further improve 
this valuable tool so that it is working for our farmers and 
the American people. That is our chore today. And I look 
forward to a productive conversation about programs, such as 
DMC, designed to give our farmers a safety net that works.
    And nothing made the importance of this safety net more 
apparent than the COVID-19 pandemic that we saw, and we saw 
during the early stages of the pandemic how shocks to labor, 
and our supply chain--some of which still persist today--how 
they impacted the ability of farmers to get their products to 
market. However, as market balances were disrupted, we were 
able to provide Pandemic Market Volatility Assistance Program 
funds through USDA to help our dairy farmers. However, COVID 
also raised a question of whether the Federal Milk Marketing 
Order system, which governs the pricing of milk, is the best 
fit for today's world. And we must listen to our farmers, and 
we must continue a dialogue with industry and USDA, as we 
navigate that issue to identify the best approach to any 
changes as we move forward.
    And even as we have seen dairy prices rebound in 2022, 
there are several trends that are extremely troubling to me, 
and to our Committee. The number of licensed U.S. dairy herds 
fell by more than half between 2002 and 2019, and with an 
accelerating rate of decline in 2018 and 2019, even as milk 
production continued to grow, and we are losing dairy farms 
every single day. And this is something that is pressing on my 
heart, and the heart of this Committee. Folks, we are losing at 
a record pace our small farmers in many areas of our 
agriculture industry, and this is why I am writing a bill, and 
some legislation, with our Committee to see if we can help to 
stem this loss. This loss is devastating. Many of these smaller 
farmers--and while we have room for all sizes in the dairy 
industry, the loss of the smaller farms is having an impact 
across our rural communities. Human loss, as well as drastic 
economic loss. And in that same vein, we must also pay 
attention to the needs of small farmers around the country.
    We were intentional in selecting our witnesses for our 
stakeholder panel today from multiple regions across the 
country, because this will provide us with the diversity of 
views, and can provide insight into recent developments, such 
as in the Northeast, where organic farmers have struggled to 
identify alternative markets after a major plant closed, and 
faced debilitating transportation issues in trying to find new 
markets for their milk. And as I have said many times, I have 
tremendous admiration for our farmers, and dairy faces a unique 
set of challenges, which is why the farm bill dairy provisions 
are so vitally important to each and every one of the Members 
on this Committee. And I look forward to hearing from our 
distinguished panels today about these programs, as well as 
opportunities where this Committee can move to improve them.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning, and thank you to our Committee Members and witnesses 
for joining us today. Before we discuss the topic of today's hearing, I 
would like to welcome Congresswoman Sharice Davids to the House 
Committee on Agriculture. Ms. Davids represents the Third District in 
Kansas and joins Mr. Mann as our second Member from the great State of 
Kansas. Welcome Ms. Davids.
    Today's hearing continues our review of the 2018 Farm Bill, as we 
analyze the dairy provisions and the impact they have had on dairy 
farmers. How appropriate it is that we hold this hearing in June, as we 
celebrate Dairy Month. I am pleased to welcome two panels today, a 
panel of USDA witnesses, and an industry panel. These two panels 
provide us with a depth of expertise to evaluate the dairy provisions 
of the farm bill.
    A significant portion of today's hearing will cover the dairy 
safety net for family farmers, which is an integral part of ensuring 
the consistent production and availability of dairy products. Contained 
within that safety net is Dairy Margin Coverage (DMC), a program that 
provides more comprehensive coverage to small- and medium-sized farms 
than any program before it.
    The creation of DMC was an important part of the 2018 Farm Bill, 
and it is vital that we understand if there are ways to further improve 
this tool so that it is working for farmers and the American people. I 
look forward to a productive conversation about programs, such as DMC, 
designed to give these farmers a safety net that works.
    Nothing made the importance of this safety net more apparent than 
the COVID-19 pandemic. We saw during the early stages of the pandemic 
how shocks to labor and the supply chain--some of which persist today--
impacted the ability of farmers to get their products to market. As 
market balances were disrupted, we were able to provide Pandemic Market 
Volatility Assistance Program funds through USDA to our farmers.
    However, COVID also raised the question of whether the Federal Milk 
Marketing Order System, which governs the pricing of milk, is the best 
fit for today's world. We must listen to farmers and continue a 
dialogue with industry and USDA as we navigate that issue to identify 
the best approach to any changes moving forward.
    Even as we've seen dairy prices rebound in 2022, there are several 
trends that are extremely troubling. The number of licensed U.S. dairy 
herds fell by more than half between 2002 and 2019, with an 
accelerating rate of decline in 2018 and 2019, even as milk production 
continued to grow. We are losing dairy farms every single day. Many of 
these are smaller farms, and while we have room for all sizes in the 
dairy industry, the loss of these smaller farms is having impacts 
across rural communities.
    In that same vein, we must also pay attention to the needs of small 
farmers around the country. We were intentional in selecting witnesses 
for our stakeholder panel from multiple regions across the country. 
This will provide us with a diversity of views and can provide insight 
into recent developments, such as in the Northeast, where organic 
farmers have struggled to identify alternative markets after a major 
plant closed and faced debilitating transportation issues in trying to 
find new markets for their milk.
    As I have said many times, I have a tremendous admiration for our 
farmers. And dairy faces a unique set of challenges, which is why the 
farm bill dairy provisions are so important. I look forward to hearing 
from our distinguished panels today about these programs, as well as 
opportunities to improve them.
    With that, I'd now like to welcome the distinguished Ranking 
Member, the gentleman from Pennsylvania, Mr. Thompson, for any opening 
remarks he would like to give.

    The Chairman. And with that, I would like to turn it over 
to my good friend, the Ranking Member from Pennsylvania, 
Ranking Member Thompson.

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

    Mr. Thompson. Chairman Scott, thank you so much for 
convening this important hearing to discuss farm bill dairy 
provisions. Agriculture is the number one industry in 
Pennsylvania, and dairy is our most valuable commodity. Our 
dairy producers have a huge impact on the economy in our 
Commonwealth, especially in the rural communities and townships 
that I am honored to represent. I am a descendant of many 
generations of dairymen and -women who produced the milk, 
processed the milk, and actually delivered the milk. 
Unfortunately, our family farm sits at the bottom of a lake 
today, thanks to eminent domain.
    But dairy will always remain a key interest of mine--I am 
proud to say I have milk flowing through my veins. I am 
concerned with the number of farms that we have lost in my 
state, and--dairy farms that we have lost, and those across the 
country as well. From 2020 to 2021, Pennsylvania lost more than 
200 dairy farms, and nearly 1,800 nationwide in that same 
period. In order to stem this decline, we must have strong 
dairy policies in place that provides a safety net to help 
farmers withstand the tough years, and programs that help 
facilitate the movement of milk from the herd to the household.
    Now, I am glad that we have witnesses from the Department 
of Agriculture to update us on current policy and program 
implementation, as well as from our dairy stakeholder community 
to give their perspective on what is, and, quite frankly, what 
isn't working well. With the trends that we have seen year in, 
year out, in terms of number of cows, number of dairy farms, we 
can't keep doing what we have been doing and expect different 
results. The dairy policy we have in place now is the result of 
an alliterative process. To be frank, Congress missed the mark 
in the 2014 Farm Bill with regards to the dairy safety net. I 
will say our Committee didn't miss the mark. Unfortunately, 
once the dairy coverage in 2014 Farm Bill went to the larger 
body changes were made that did not work well, make it 
affordable, nor make it useful for our dairy farmers. Since 
then, via the omnibus spending bills, and the 2018 Farm Bill, 
we have made key improvements, and now our producers have 
access to the Dairy Margin Coverage Program, as you have made 
reference to, Mr. Chairman, which is proven to be an effective 
risk management tool for dairies.
    In terms of the agriculture industry, I would argue no 
sector was as acutely affected by the COVID-19 pandemic as 
dairy producers and processors. Unlike many other commodities, 
that can be stored or easily re-routed from food service to 
retail shelves, dairy doesn't have that luxury. Unfortunately, 
in the early days of the pandemic, there were some tragic 
examples of farmers being forced to dump milk, but I credit the 
resiliency of the industry in limiting those occurrences. 
Everyone, from the producer to the processor, stepped up, and 
they worked overtime to find new markets or retool their 
production lines to keep up with the rapidly changing demands 
of the shuttered economy.
    Now, I am proud of our dairy industry for rising to the 
unprecedented challenges, and continuing to provide households 
here at home and abroad with safe, abundant, and affordable 
supplies of nutritious milk and dairy products. Unfortunately, 
these market disruptions had a negative impact on producers' 
income due to the changes made in the 2018 Farm Bill to the 
Class I Mover. While USDA has provided some assistance to 
compensate producers for those losses, the 5 million pound 
limitation on assistance under the Pandemic Market Volatility 
Assistance Program left large operations with significant 
uncovered losses. In the past, dairy policy was regularly one 
of the most contentious debates during farm bill 
reauthorizations. However, in the 2018 Farm Bill, the dairy 
industry worked together to achieve consensus, rather than 
having Congress fight its battles for them. Now, I want to 
commend the National Milk Producers Federation and the 
International Dairy Foods Association for their work to foster 
those conversations, and present a united front on critical 
policy debates, particularly as it relates to further 
modifications to the Class I Mover.
    Before I close, I would be remiss if I didn't point out 
that dairy not only needs producers and manufacturers, it needs 
consumers. Dairy is a nutrition powerhouse, but we lost a 
generation of milk drinkers when the milk fat was taken out of 
our schools in 2010, not by this Committee, but by the 
Education and Labor Committee, and we badly need to turn that 
around, and make sure that our kids have access to the 
nutrition that they need, and milk fat, we know, is where that 
nutrition is centered. I will continue to push for my 
bipartisan Whole Milk For Healthy Kids Act of 2021 (H.R. 1861). 
Many Members of this Committee are cosponsors of that bill, 
which has strong support across the Committee, and Congress, 
and hope that we can make some progress there.
    Thank you, Mr. Chairman, for working with me on this 
hearing, and I look forward to hearing from the witnesses on 
both panels, and I yield back.
    The Chairman. And thank you, Ranking Member, for your 
opening statement. The chair would request that other Members 
submit their opening statements for the record so witnesses may 
begin their testimony to ensure that there is ample time for 
questions. And now let me introduce our distinguished panel. 
And, again, as I mentioned earlier, we are going to have two 
panels today.
    On our first panel, we have our first witness for our first 
panel, is Mr. Scott Marlow. Mr. Marlow is the distinguished 
Deputy Administrator for Farm Programs at the Farm Service 
Agency at the United States Department of Agriculture. Welcome, 
Mr. Marlow. Good to have you. And now our second witness today 
is Ms. Dana Coale, the Deputy Administrator for the 
Agricultural Marketing Service Dairy Program at the Department 
of Agriculture. Good to have you too.
    And--so now we are going to start, and, again, I want 
everyone to please keep your microphones muted until you are 
ready to speak. And, Mr. Marlow, please begin when you are 
ready.

   STATEMENT OF SCOTT MARLOW, DEPUTY ADMINISTRATOR FOR FARM 
              PROGRAMS, FARM SERVICE AGENCY, U.S. 
          DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

    Mr. Marlow. Thank you, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee, for this opportunity to 
appear before you and discuss the Farm Service Agency's efforts 
to support the American dairy sector. My name is Scott Marlow, 
and since January of this year I have had the honor of serving 
as the Deputy Administrator for Farm Programs at the USDA's 
Farm Service Agency. In this capacity, I oversee the management 
of FSA's disaster assistance, conservation, safety net, and 
price support programs, including the focus of today's hearing, 
our dairy programs. I come to this job after decades of work 
supporting farmers and ranchers as they navigate the impacts of 
financial crises and disasters, and work to rebuild. I have 
seen firsthand the importance of timely, targeted, and 
accessible assistance from USDA, and I am humbled to now have 
the opportunity to help shape and improve the very programs I 
have helped producers access. Since the start of the Biden-
Harris Administration, USDA has been focused on helping all 
producers recover from the continued impacts of the bruising 
COVID-19 pandemic, and in particular this Administration has 
been dedicated to filling gaps in previous pandemic programs 
and keeping farmers and ranchers in business.
    At FSA our staff have worked tirelessly to find 
flexibilities in our existing dairy programs to be more 
responsive to the realities of dairy farming today, and we have 
made key improvements to both our Dairy Margin Coverage Program 
and our Dairy Indemnity Payment Program to meet the needs of 
our producers. I will let Deputy Administrator Coale delve into 
the details of the AMS Pandemic Market Volatility Assistance 
Program, the Dairy Donation Program, the Dairy Business 
Innovation Initiatives, but I will reference those programs as 
additional clear examples of this Administration's commitment 
to filling gaps and helping the dairy industry recover and 
rebuild with resilience.
    As we look ahead to the upcoming farm bill process, and 
opportunities to update and improve our programs, I look 
forward to providing technical assistance and working together 
to continue finding the best path forward to support American 
dairy producers. In the remainder of my testimony, I will 
provide additional details on FSA's key dairy programs, and 
improvements that we have made.
    The Dairy Margin Coverage Program is a voluntary risk 
management program established in the 2018 Farm Bill that 
offers reasonably priced risk protection to dairy producers 
when the difference between the all-milk price and the average 
cost of feed falls below a certain level selected by the 
producer. In 2021 DMC payments triggered for 11 months, for a 
total of $1.2 billion paid to producers who enrolled in DMC for 
the 2021 program year. Ahead of the 2022 DMC signup, FSA made 
key improvements to DMC. Specifically, FSA rolled out 
Supplemental DMC, allowing dairy producers to better protect 
their operations by enrolling supplemental production, and 
providing an additional $450 million in benefits. FSA also 
updated the DMC and Supplemental DMC formula to better reflect 
the actual cost dairy farmers pay for high quality alfalfa hay. 
We are now calculating those payments using 100 percent premium 
alfalfa hay, rather than 50 percent. This change is retroactive 
to January 2020 and provided additional payments of $42.8 
million for 2020 and 2021.
    In addition to DMC, FSA administers the Dairy Indemnity 
Payment Program, which has historically provided indemnities to 
dairy producers for contaminated milk and milk products, and in 
December of 2021, FSA updated its DIPP regulations to better 
address the tragic crisis of PFAS contamination. Specifically, 
dairy producers are now eligible to receive payments for the 
loss of contaminated dairy cows. While I know that our updates 
to DIPP will provide critical assistance to impacted dairy 
operations, I also want to take a moment to recognize the 
reality that DIPP does not capture the scope of the problem 
when it comes to PFAS contamination on agricultural lands.
    Moreover, while New Mexico and Maine have been at the 
forefront of this crisis, PFAS contamination extends far beyond 
these states. Unfortunately, the resources FSA has at the ready 
are not designed to comprehensively respond to these concerns, 
and as we look ahead to the upcoming farm bill, USDA will 
continue to provide technical assistance in response to any 
requests from Congress, and we are eager to engage on questions 
that will help USDA better support the range of agricultural 
producers grappling with chemical contaminants, including PFAS.
    I also want to highlight forthcoming disaster assistance 
for dairy producers. On September 30, 2021, President Biden 
signed into law the Extending Government Funding and Delivering 
Emergency Assistance Act (Pub. L. 117-43), which includes $10 
billion in assistance to agricultural producers impacted by 
natural disasters in 2020 and 2021. FSA has implemented the 
first phase of assistance for livestock and crop producers, 
and, thus far, using a streamlined application process, has 
provided $590 million through the Emergency Livestock Relief 
Program, and $3 billion through the Emergency Relief Program. 
My team and I are actively working on designing phase two of 
both programs and will also be implementing assistance to 
specifically address milk loss, and I look forward to sharing 
additional details later this summer.
    As I close my testimony, I also want to take the 
opportunity to express my gratitude and admiration for the 
entire FSA workforce, who are committed to keeping our nation's 
dairy producers, and all farmers and ranchers, in business for 
generations to come. Since my first day on the job, I have seen 
our staff work hard to develop and implement many new pandemic 
relief and disaster programs authorized by Congress, while 
administrating our conventional farm programs, and I am 
grateful for the opportunity to work with them. I look forward 
to answering your questions and working with each of you.
    [The prepared statement of Mr. Marlow follows:]

   Prepared Statement of Scott Marlow, Deputy Administrator for Farm 
    Programs, Farm Service Agency, U.S. Department of Agriculture, 
                            Washington, D.C.
    Thank you, Chairman Scott, Ranking Member Thompson, and Members of 
the Committee, for the opportunity to appear before you and discuss the 
Farm Service Agency's (FSA's) administration of programs that benefit 
our nation's dairy farmers.
    My name is Scott Marlow, and since January of this year, I have had 
the honor of serving as the FSA Deputy Administrator for Farm Programs 
at the U.S. Department of Agriculture (USDA). In this capacity, I 
oversee the management of FSA's disaster assistance, conservation, 
safety net, and price support programs, which play a critical role in 
our farm and ranch economy. I am grateful for the opportunity to share 
and discuss FSA's efforts to support the American dairy sector.
    Thanks to the work of many in this room, the 2018 Farm Bill 
established a much stronger dairy safety net. Over the past 2 years, 
pandemic relief and appropriations laws provided additional support to 
address new challenges and stressors facing the dairy sector. Since the 
start of the Biden-Harris Administration, FSA has engaged with 
stakeholders and worked to implement provisions to support dairy 
farmers hard hit by the dual crises of the pandemic and devastating 
natural disasters.
    Specifically, over the past year, FSA staff have worked tirelessly 
to find flexibilities in our existing dairy programs to be more 
responsive to the realities of dairy farming today. We have made key 
improvements to both our Dairy Margin Coverage (DMC) Program and our 
Dairy Indemnity Payment Program (DIPP) to meet the needs of our 
producers. We have also collaborated with our partners at the Risk 
Management Agency (RMA) and the Natural Resources Conservation Service 
(NRCS) to ensure we are working effectively across the Farm Production 
and Conservation (FPAC) mission area to best serve these producers. As 
we look ahead to the upcoming farm bill process, we look forward to 
providing technical assistance and working together to continue finding 
the best path forward to support American dairy producers. 
Additionally, just last week USDA Deputy Secretary Bronaugh signed a 
key Memorandum of Understanding (MOU) with the Innovation Center for 
U.S. Dairy, to continue our collaborative work on sustainability and 
reducing methane emissions with this important industry. The Innovation 
Center for U.S. Dairy was established in 2008 through the dairy check-
off program. The MOU, which extends and builds upon a 2009 agreement, 
will facilitate cooperation to encourage the adoption of technologies 
and practices that improve sustainability and assist in addressing 
environmental needs of U.S. dairy farmers. We feel this MOU will 
further position the domestic dairy industry as a leader in 
sustainability.
    In the remainder of my testimony, I will provide additional details 
on FSA's key dairy programs.
Dairy Margin Coverage
    The DMC Program is a voluntary risk management program established 
in the 2018 Farm Bill that replaced the Margin Protection Program for 
Dairy (MPP-Dairy). DMC offers reasonably priced protection to dairy 
producers when the difference between the all-milk price and the 
average cost of feed falls below a certain level selected by the 
program participants. By providing flexible coverage options, DMC was 
crafted to better target small- and mid-sized dairy producers.
    The last couple years have proven to be incredibly volatile for 
dairy producers. The monthly all-milk price for 2021 ranged from $17.10 
per hundredweight to $21.80 per hundredweight, and the dairy margins 
varied from $5.03 per hundredweight to $9.53 per hundredweight. So far 
in 2022, the monthly all-milk price has ranged from $24.20 per 
hundredweight to $27.10 per hundredweight, with dairy margins ranging 
from $10.98 per hundredweight to $12.29 per hundredweight.\1\ This 
swing in dairy prices and margins caused the 2022 forecast for net cash 
farm income for dairy businesses to increase by 58% relative to the 
previous year to $382,100 per farm business. Still, we must interpret 
this data with an important caveat--that these incomes are not 
representative of the experience of all dairy farms, especially since 
``farm businesses'' only include farms with annual gross cash farm 
income (GCFI) of at least $350,000 or operations with less than 
$350,000 in annual gross cash farm income but in which farming is 
reported as the operator's primary occupation.
---------------------------------------------------------------------------
    \1\ https://www.fsa.usda.gov/programs-and-services/dairy-margin-
coverage-program/index#accordion-col-8.
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Numbers for 2021
    In 2021, DMC payments were triggered for 11 months for a total of 
$1.2 billion paid to producers who enrolled in DMC for the 2021 program 
year, with an average payment of $60,275 per operation. At 15 per 
hundredweight at the $9.50 level of coverage, DMC is a very cost-
effective risk management tool for dairy producers.
Performance for 2022
    Ahead of the 2022 DMC signup which opened in December 2021, FSA 
made key improvements to DMC. Specifically, the program was expanded to 
allow dairy producers to better protect their operations by enrolling 
supplemental production, as authorized by the Consolidated 
Appropriations Act of 2021. Supplemental DMC provides $580 million to 
better help our small- and mid-sized dairy operations that have 
increased production over the years but were not able to enroll that 
additional production. Specifically, eligible dairy operations with 
fewer than 5 million pounds of established production history can now 
enroll supplemental pounds based on a formula using 2019 actual milk 
marketings, which are resulting in additional payments. Supplemental 
DMC coverage is applicable to calendar years 2021, 2022, and 2023, 
which means that participating dairy operations with supplemental 
production history have been able to receive retroactive supplemental 
payments for 2021 in addition to payments based on their established 
production history.
    In addition to rolling out Supplemental DMC, FSA updated the DMC 
and Supplemental DMC feed cost formula to better reflect the actual 
cost dairy farmers pay for high-quality alfalfa hay. FSA now calculates 
payments using 100 percent premium alfalfa hay rather than 50 percent 
of the premium alfalfa hay price and 50 percent of the conventional 
alfalfa hay price. This change is retroactive to January 2020 and 
provided additional payments of $42.8 million for 2020 and 2021.
    After rolling out these updates, FSA heard from stakeholders about 
the need for additional outreach and time for producers to make an 
enrollment decision. In addition to hosting a widely attended webinar, 
FSA conducted specific outreach with FSA cooperators, Tribal 
governments, State Outreach Coordinators, State Beginning Farmer and 
Rancher Coordinators, and other USDA Outreach Coordinators. FSA also 
extended the original deadline to enroll in DMC and Supplemental DMC 
from February 8, 2022, to March 25, 2022. Continued interest in DMC is 
reflected in the increase in both 2021 and 2022 DMC enrollment numbers.
Dairy Indemnity Payment Program (DIPP)
    In addition to DMC, FSA administers the Dairy Indemnity Payment 
Program (DIPP), which has historically provided indemnities to dairy 
producers for contaminated milk and milk products. In December 2021, 
FSA updated its DIPP regulation to better address the crisis of 
perfluoroalkyl and polyfluoroalkyl substances (PFAS) contamination. 
Specifically, dairy producers are now eligible to receive payments for 
the depopulation, or losses above normal mortality, of contaminated 
dairy cows. Applications are already available for cow indemnification 
under DIPP, and the program will now be able to provide much-needed 
compensation to dairy producers who must depopulate or lose their cows 
due to chemical contamination through no fault of their own. Here at 
FSA, we are also working closely with USDA's NRCS to target assistance 
through the Environmental Quality Incentives Program and other 
conservation programs to help producers safely dispose of and address 
resource concerns created by affected cows.
    While I know that our updates to DIPP will provide critical 
assistance to impacted dairy operations in New Mexico and Maine, I also 
want to take a moment to recognize the reality that DIPP does not 
capture the scope of the problem when it comes to PFAS contamination on 
agricultural lands. Moreover, while New Mexico and Maine have been at 
the forefront of this crisis, the tragic reality of PFAS contamination 
extends far beyond these states. Unfortunately, the resources FSA has 
at the ready are not designed to comprehensively respond to these 
concerns. As we look ahead to the upcoming farm bill, USDA will 
continue to provide technical assistance in response to any requests 
from Congress, and the Administration looks forward to working this 
year with the Congress, partners, stakeholders, and the public to 
identify shared priorities for the 2023 Farm Bill.
Emergency Relief for Dairy Loss
    I also want to touch on forthcoming disaster assistance for dairy 
producers. Over the past 2 years, dairy producers across the country 
have been hard-hit by more frequent and intense natural disasters. On 
September 30, 2021, President Biden signed into law the Extending 
Government Funding and Delivering Emergency Assistance Act (P.L. 117-
43), which includes $10 billion for necessary expenses related to 
losses of crops, including milk, due to wildfires, droughts, 
hurricanes, winter storms, and other eligible disasters experienced 
during calendar years 2020 and 2021. In addition to disaster assistance 
provided by farm bill programs, Congress designated $750 million of 
this funding to assist livestock producers for losses in 2021 due to 
drought or wildfires. USDA is implementing this assistance using a two-
phase process for both livestock and crop disaster assistance. The 
first phase of the Emergency Livestock Relief Program, which provides 
payments related to forage losses, was announced on March 31, and $597 
million in payments have been disbursed for the Emergency Livestock 
Relief Program as of June 2. I look forward to sharing additional 
details this summer regarding assistance to address milk loss.
Risk Management Agency (RMA)
    Last, while it is outside the scope of my work at the FSA, I want 
to highlight the great work the Risk Management Agency (RMA) is doing 
to proactively help dairy farmers through the Dairy Revenue Protection 
(DRP) and the Pasture, Rangeland, and Forage (PRF) program.
Dairy Revenue Protection (DRP)
    Dairy producers have seen significant expansion of Federal crop 
insurance offering the last several years. Through the Dairy Revenue 
Protection (DRP), dairy producers can protect against unexpected 
declines in their quarterly revenue from milk sales relative to a 
guaranteed coverage level.
    While this product has only been offered for a few years, it covers 
approximately a quarter of the milk production in the United States. 
Livestock Gross Margin for Dairy Cattle is also available and provides 
protection when feed costs rise, or milk prices drop and can be 
tailored to any size farm. Modifications were made last year to allow 
dairy producers to purchase coverage on a weekly basis.
Pasture, Rangeland, and Forage Program (PRF)
    RMA also offers the Pasture, Rangeland, and Forage (PRF) program, 
which is designed to provide insurance coverage on pasture, rangeland, 
or forage acres grown for the intended use of livestock grazing or 
haying. The PRF program allows producers to insure specific 2 month 
time periods, called index intervals, that are important to their 
operation. In doing so, the program is designed to help protect a 
producer's operation from the risks of forage loss due to a lack of 
precipitation.
Conclusion
    In closing, I would like to emphasize FSA's commitment to keeping 
our nation's dairy producers in business for generations to come. I 
want to thank you for the opportunity to testify and for the support 
you have provided to USDA so that we can implement strong, inclusive 
programs. I look forward to continuing to work with this Committee to 
empower our producers to address new challenges, and I am happy to take 
any questions from the Committee.

    The Chairman. Thank you very much, I appreciate that. And 
now, Ms. Coale, you are recognized. Begin when you are ready.

    STATEMENT OF DANA H. COALE, DEPUTY ADMINISTRATOR, DAIRY 
  PROGRAM, AGRICULTURAL MARKETING SERVICE, U.S. DEPARTMENT OF 
                 AGRICULTURE, WASHINGTON, D.C.

    Ms. Coale. Good morning, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee. Thank you for the 
opportunity to appear before you today to discuss USDA's 
implementation of select provisions of the 2018 Farm Bill, as 
well as the numerous other activities undertaken by the 
Agricultural Marketing Service, where the primary role is to 
facilitate the efficient marketing of milk and dairy products 
for the benefit of our nation's dairy farmers through 
increasing transparency in the marketplace. I am Dana Coale, 
Deputy Administrator of AMS Dairy Programs.
    As someone who has worked with the dairy industry for more 
than 32 years, I have witnessed the turbulent landscapes that 
producers have faced over several decades. Most recently we 
have seen prices oscillate from near record lows to now record 
highs, while the margins vary widely across the country. 
Through all of this, I have seen America's dairy farmers 
continue to innovate, persevere, and put top quality dairy 
products on tables here and around the world. At USDA, we are 
committed to being a strong partner for dairy farmers, 
providing vital market information and programs to spur the 
development of more and better markets for America's dairy 
farmers both here and abroad. While my written testimony 
provides more detail on the wide range of activities conducted 
by AMS, I would like to briefly highlight some of our current 
activities that help our nation's dairy farmers.
    The 2018 Farm Bill directed USDA to develop a program to 
reduce food waste and provide nutrition assistance to low-
income individuals. The Milk Donation Reimbursement Program was 
established in 2019. Under the program, eligible dairy 
organizations may apply for, and receive, limited 
reimbursements to cover donations of fluid milk products. 
Congress authorized $9 million for the program in Fiscal Year 
2019, and $5 million for each fiscal year thereafter. In the 
Consolidated Appropriations Act of 2021 (Pub. L. 116-260), 
Congress expanded USDA's authority to reimburse processors for 
donated dairy products and provide additional resources for the 
new Dairy Donation Program. An interim final rule implementing 
this program was published on September 1, 2021. To lessen the 
burden on participating entities, and gain administrative 
efficiencies, the programs are administered jointly, while 
still maintaining separate funds from which payments are made, 
according to the separate program rules.
    The 2018 Farm Bill also authorized the establishment of at 
least three Dairy Business Innovation Initiatives, which was 
expanded to four in 2021, to support dairy businesses in the 
development, production, marketing, and distribution of dairy 
products. The DBI initiatives provide technical assistance to 
dairy businesses and provide sub-awards to dairy businesses as 
well. The DBI businesses approach of providing both technical 
assistance and sub-awards serves as a unique and very effective 
model. In order to improve regional dairy supply chain 
resiliency, support processing capacity expansion, and increase 
technical assistance service to local and regional dairy 
businesses, USDA invested, just this week, an additional $80 
million in DBI funding from the American Rescue Plan (Pub. L. 
117-2). The four DBI partners are now able to reach dairy 
producers and processors in nearly 40 states.
    The Pandemic Market Volatility Assistance Program was 
authorized and funded under the CARES Act of 2021 (P.L. 116-
136), and provided much needed pandemic assistance payments to 
dairy farmers, who received a lower value for their milk due to 
market abnormalities occurring during the pandemic. Under the 
program, payments reimbursed qualified dairy farmers for 80 
percent of revenue losses for fluid milk sales from July to 
December of 2020 on an annual production of up to 5 million 
pounds. USDA distributed the funds to producers through their 
handlers and implemented a robust oversight system to ensure 
accurate payments were distributed to producers within the 30 
days of a handler receiving the money. A key part of the 
program was a required producer educational component on the 
PMVAP Program, and other dairy topics.
    Finally, the origin of livestock final rule was published 
in the Federal Register on April 5, 2022. This rule provides 
clear and uniform standards about how and when livestock may be 
transitioned to organic dairy production, and how transitioned 
animals are managed.
    Thank you for the opportunity to be here today, and we look 
forward to working with the Committee as you draft the next 
farm bill. I would be happy to address any questions you have. 
Thank you.
    [The prepared statement of Ms. Coale follows:]

   Prepared Statement of Dana H. Coale, Deputy Administrator, Dairy 
      Program, Agricultural Marketing Service, U.S. Department of 
                     Agriculture, Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the opportunity to appear before you today to 
discuss the U.S. Department of Agriculture's (USDA) implementation of 
select provisions of the Agriculture Improvement Act of 2018 (2018 Farm 
Bill) as well as the numerous other activities undertaken by the 
Agricultural Marketing Service (AMS) to facilitate the efficient 
marketing of milk and dairy products for the benefit of our nation's 
dairy farmers.
    I am Dana Coale, Deputy Administrator of AMS' Dairy Program, and as 
someone who has worked with the dairy industry for 32 years, I've 
witnessed the turbulent landscapes that producers have faced over the 
last several decades. More recently, we've seen milk prices oscillate 
from near-record lows to now record highs. Through of all of this, I've 
seen America's dairy farmers continue to innovate, persevere, and 
continue to put top quality dairy products on tables here and around 
the world. At USDA, we are committed to being a strong partner for 
dairy farmers, providing vital market information and programs to spur 
the development of more and better markets for America's dairy farmers 
at home and abroad.
    We appreciate the tools that Congress has provided to the agency 
through the 2018 Farm Bill and subsequent legislation. In addition to a 
summary of those farm bill provisions, my testimony today will discuss 
other key AMS dairy programs and activities.
Milk Donation Reimbursement Program and Dairy Donation Program
    The 2018 Farm Bill directed USDA to develop a program to reduce 
food waste and provide nutrition assistance to low-income individuals. 
The Milk Donation Reimbursement Program was established in a Final Rule 
published on September 5, 2019. Under the program, eligible dairy 
organizations that account to a Federal Milk Marketing Order market-
wide pool and incur qualified expenses related to certain fluid milk 
product donations may apply for and receive limited reimbursements to 
cover those expenses. The program is intended to reduce food waste and 
provide nutrition assistance to low-income individuals. Congress 
authorized $9 million for the program in Fiscal Year 2019, and $5 
million per fiscal year thereafter.
    In the Consolidated Appropriations Act, 2021, Congress expanded 
USDA's authority to reimburse processors for donated dairy products, 
including those in addition to fluid milk, and provided additional 
resources for the new Dairy Donation Program (DDP). An Interim final 
rule implementing this program was published on September 1, 2021. To 
lessen the burden on participating entities and gain administrative 
efficiencies, the programs are administered jointly, while still 
maintaining separate funds from which payments are made according to 
the separate program rules. The program began making reimbursement 
payments this spring.
Dairy Business Innovation Initiatives
    The 2018 Farm Bill authorized the establishment of at least three 
Dairy Business Innovation (DBI) Initiatives to support dairy businesses 
in the development, production, marketing, and distribution of dairy 
products. The DBI Initiatives provide technical assistance to dairy 
businesses and use at least 50% of the award for subawards to dairy 
businesses, including makers of niche dairy products, such as specialty 
cheese, or producers of dairy products derived from the milk of a dairy 
animal, including cow, sheep, and goat milk. For example, the 
University of Wisconsin's Center for Dairy Research partners with the 
Wisconsin Cheese Makers Association to test new ingredients and conduct 
trials of new cheeses. The DBI Initiatives' approach of providing both 
technical assistance and subawards to dairy businesses serves as a 
unique and effective model by facilitating the development of critical 
relationships with local dairy producers and processors to support 
their on-the-ground needs. For example, the Vermont Agency of 
Agriculture, Food, and Markets made marketing and branding consultants 
available to help dairy businesses pivot their business strategies in 
response to the pandemic.
    In Fiscal Year 2019, which was the DBI Initiative's first year with 
funding, AMS competitively awarded $1.36 million to three initiatives 
to fulfill the purpose of the program: the University of Tennessee, the 
Vermont Agency of Agriculture, Food & Markets, and the University of 
Wisconsin. In Fiscal Year 2020, AMS awarded $18.4 million in additional 
funds to the current Initiatives to continue the work started under 
their previous awards. On November 8, 2021, AMS announced $18.4 
million, to be evenly split among the three current initiatives and an 
additional $1.8 million for a new initiative at California State 
University Fresno Foundation. Each of these centers serve a multi-state 
region, such as the northeast, to reach stakeholders across broad 
geographic regions.
    In order to improve regional dairy supply chain resiliency, support 
processing capacity expansion, and increasing technical assistance 
services to local and regional dairy businesses, USDA announced on 
March 2, 2022, an additional $80 million in funding to support long-
term resilience in the dairy industry. This American Rescue Plan 
funding provided the four DBI partners the opportunity to submit an 
additional proposal to further dairy processing capacity expansion, on-
farm improvements, and technical assistance to producers. On June 20, 
2022, USDA awarded this $80 million in additional funding and announced 
a new DBI Request for Applications for $22.9 million in appropriated 
funding for Fiscal Year 2023. It's important to note that with this 
supplemental $80 million in funding, the reach of the DBIs was extended 
from 30 to 39 states.
Extension of Dairy Forward Pricing Program
    The 2018 Farm Bill extended the Dairy Forward Pricing Program until 
September 30, 2023. This program allows farmers to voluntarily enter 
into forward price contracts with handlers for pooled milk used for 
Class II, III, or IV products under the Federal Milk Marketing Orders. 
The program allows regulated handlers to pay farmers in accordance with 
the terms of a forward contract instead of paying the minimum Federal 
Order blend price for pooled milk. The final rule extending the program 
was published on March 1, 2019.
Class I Skim Milk Price
    The 2018 Farm Bill amended the Class I skim milk price formula for 
milk pooled under Federal Milk Marketing Orders. Per Congress's 
direction, the Class I skim milk price became the simple average of the 
monthly advanced pricing factors for Class III and Class IV skim milk, 
plus $0.74 per cwt, plus the applicable adjusted Class I differential. 
Prior to this amendment, the Class I skim milk price was the higher of 
the two advanced pricing factors, plus the applicable adjusted Class I 
differential. The final rule amending the formula was published on 
March 11, 2019.
Pandemic Market Volatility Assistance Program
    The Pandemic Market Volatility Assistance Program (PMVAP) was 
authorized and funded under the Coronavirus Aid, Relief, and Economic 
Security (CARES) Act of 2021 and provided much-needed pandemic 
assistance payments to dairy farmers who received a lower value due to 
market abnormalities occurring during the pandemic. Under the PMVAP, 
payments reimburse qualified dairy farmers on an annual production of 
up to 5 million pounds of milk, for 80 percent of revenue losses for 
fluid milk sales from July 2020 through December 2020. The payment rate 
varies by region based on the actual losses on pooled milk related to 
price volatility.
    USDA disbursed funds to handlers to provide to their eligible dairy 
farmer suppliers. After receiving the payments, handlers had 30 days to 
make payments to their eligible dairy farmer suppliers. Handlers began 
payments to farmers in January 2022. USDA has implemented a robust 
oversight system to ensure accurate and verified payments are 
distributed by handlers to qualifying dairy farmers within 30 days of a 
handler's receipt of the money.
    As part of the program, handlers provided virtual or in-person 
education to dairy farmers on the program and other dairy topics, 
selecting from educational information available from USDA or other 
sources. Handlers were paid a limited reimbursement for administrative 
costs and the dairy policy education they provided.
Market News
    One of AMS' most important functions is Market News which collects, 
analyzes, and disseminates current market information to assist 
producers and marketers of farm products and those in related 
industries in making critical daily decisions. Market News information 
covers local, regional, national, and international markets and 
includes data on supply, movement, contractual agreements, inventories, 
and prices for numerous agricultural commodities, both conventionally 
and organically produced. Reported commodities include cotton, 
cottonseed, and tobacco; dairy products; fruits, vegetables, and 
ornamentals; and livestock, meat, grains, poultry, and eggs. There are 
over 470 unique market reports disseminated from over 45 Market News 
offices across the country.
    Market News continues to expand its organic market price reporting 
services, increasing the products and markets covered by boosting 
outreach to reporters and industry contacts in the organic sector. 
Market News has added new organic products and expanded overall organic 
coverage at each of the market levels reported--shipping point, 
wholesale/terminal markets, and retail. The AMS Market News organic 
webpage focuses on market reports detailing over 300 different grains, 
feedstuffs, eggs, specialty crops, and dairy products. The AMS Weekly 
Retail Organic Price Comparison report shows price differences between 
organic and conventional products to assist stakeholders in analyzing 
commodity sales and consumers' willingness to pay for organic products.
Federal Milk Marketing Orders
    Federal Milk Marketing Orders (FMMOs) establish certain provisions 
under which dairy processors purchase fresh milk from dairy farmers 
supplying a marketing area. In Federal Order provisions, dairy 
processors are referred to as handlers and dairy farmers are known as 
producers. A marketing area is generally defined as a geographic area 
where handlers compete for packaged fluid milk sales, although other 
factors may be taken into account when determining the boundaries of a 
marketing area. Federal Orders serve to maintain stable marketing 
relationships for all handlers and producers supplying marketing areas. 
Federal Milk Marketing Orders were established in the 1930s by Congress 
and have been continually modified, at industry request (most recently 
in 2019), to evolve into the system we have today. The program carries 
out its objectives by establishing minimum milk prices participating 
handlers must pay to producers, ensuring timely and accurate payments 
to producers, and providing robust market information. The provisions 
work together to facilitate the complex process of marketing fresh 
milk.
Research and Promotion Programs
    Since 1966, Congress has authorized industry-funded research and 
promotion boards, also known as check-offs, to provide a framework for 
agricultural industries to pool their resources and combine efforts to 
develop new markets, strengthen existing markets and conduct important 
research and promotion activities. AMS oversees 22 research and 
promotion programs, which generate more than $900 million is 
assessments annually. The strategic direction for activities conducted 
by research and promotion programs is determined by a board of 
directors appointed by the Secretary of Agriculture. AMS ensures that 
those boards properly account for all program funds and administer the 
programs in accordance with their authorizing statutes and Orders. 
Boards are required to post their bylaws; annual budget summaries; 
annual reports containing information about board activities, projects, 
and administrative expenses; annual Certified Public Accountant 
financial audit report; and most recent independent economic evaluation 
to their website.
    AMS oversees two research and promotion dairy programs. The Dairy 
Research and Promotion Program is a national producer and importer 
program for dairy product promotion, research, and nutrition education. 
It is the largest of all commodity check off programs generating $346.7 
million annually. To fund the program, U.S. dairy farmers pay a 15 per 
hundredweight assessment on their milk and importers pay 7.5 per 
hundredweight on dairy products imported into the U.S.
    The Fluid Milk Processor Promotion Program develops and finances a 
generic advertising program designed to maintain and expand markets and 
uses for fluid milk products produced in the U.S. Processors marketing 
more than 3 million pounds of fluid milk per month pay a 20 per-
hundredweight assessment on fluid milk processed and marketed in 
consumer type packages in the U.S. This program generates $85.7 million 
annually. The Dairy and Fluid Milk boards fund a variety of programs 
and activities including consumer marketing and education, product 
innovation and partnerships, nutrition research, exports, and childhood 
health and wellness, and climate change solutions.
    The provisions contained in the authorizing statutes, the Dairy 
Production Stabilization Act of 1983 and the Fluid Milk Promotion Act 
of 1990, may be amended by Congress. The National Dairy Promotion and 
Research Board and the Fluid Milk Processor Promotion Board may 
recommend to the Secretary of Agriculture amendments to the Dairy 
Production and Research Order and the Fluid Milk Order. Amendments to 
the programs are conducted through the rulemaking process in the 
Federal Register.
Origin of Livestock
    The Origin of Livestock final rule was published in the Federal 
Register on April 5, 2022. This rule provides clear and uniform 
standards about how and when livestock may be transitioned to organic 
dairy production, and how transitioned animals are managed within the 
organic dairy system. Now, all organic dairy livestock producers will 
have the confidence and certainty they are operating in a fair and 
competitive market.
    Some organic certifiers and dairies had not been consistently 
implementing these requirements. Therefore, the organic industry sought 
further rulemaking to eliminate the inconsistencies and what they 
viewed as some producers avoiding the significant costs and time 
investments required under statute.
    AMS-accredited certifiers visit every certified organic dairy 
yearly. AMS is working with them to ensure the inspectors understand 
and apply the new regulation consistently, to ensure all organic 
dairies are held to the same standard. In addition to the inspections 
by certifiers, the ongoing organic livestock compliance project targets 
Federal surveillance and unannounced inspections based on risk factors 
that include operation size, complexity, and compliance history to 
better enforce uniform compliance with the organic standards.
Conclusion
    Thank you for the opportunity to be here today and we look forward 
to working with the Committee as you work to draft the 2023 Farm Bill. 
I would be happy to address any questions you may have.

    The Chairman. Thank you and thank you to the both of you. 
At this time Members will be recognized for questions in order 
of seniority, alternating between Majority and Minority 
Members, and you will be recognized for 5 minutes each in order 
to allow us to get in as much time, and as many questions, as 
possible. And as always, please keep your microphones muted 
until you are recognized so that we can minimize noise. I 
recognize now myself for my 5 minutes of questions.
    Let me start with you, Mr. Marlow. I have been hearing a 
lot about Dairy Margin Coverage from our producers. Tell us, 
how has Dairy Margin Coverage enrollment changed since it 
replaced the Margin Production Program after the 2018 Farm 
Bill? Tell us, what type of feedback has the Department 
received from dairy farmers since DMC was first implemented?
    Mr. Marlow. Thank you very much, Chairman Scott. The Margin 
Protection Program, which you recognized, was a transition in 
dairy programs to a risk management-based--essentially a risk 
management-based program. DMC then expanded on that program. 
What we have seen as we have moved into DMC, and we have made a 
series of improvements to the program, DMC, in the transition 
from MPP Dairy, lowered the cost of the protection, increased 
the level of protection that producers could get, and a series 
of other improvements.
    Since the start of the Administration, we have made a 
series of improvements again to DMC. These include changing the 
calculation of the cost of feed to include 100 percent high 
quality alfalfa hay instead of just 50 percent so that it more 
accurately represents the cost that producers are facing. Also, 
with Congress' authority, we created Supplemental DMC, which 
allowed producers who had increased production from the time 
that they set their production history back in 2011, 2012, 
2013, who had increased their production, to increase their 
coverage under DMC. And that--the introduction of Supplemental 
DMC, it put an extra $580 million into the program.
    The Chairman. And so where do you see, or what do you see, 
we could do in this farm bill to improve this program?
    Mr. Marlow. The changes that we have made so far are very 
much in response to the input that we have gotten from farmers. 
Supplemental DMC was an important step. Both DMC and 
Supplemental DMC are equivalent, so it would be very easy to 
combine the two, or to make that a permanent change.
    The Chairman. So, you are saying sort of steady as we go, 
we are okay right now, you don't see us making any changes?
    Mr. Marlow. Well, we are happy to provide technical 
assistance, and look at any suggested reforms, but we made 
extensive changes and improvements to the program over the last 
couple of years, and believe that it is, in concert with the 
Risk Management Agency programs, a strong safety net.
    The Chairman. Okay. That is fine. Deputy Administrator 
Coale, when discussing any potential changes to our Federal 
Milk Marketing Orders, what are your thoughts regarding the 
procedure for implementation?
    Ms. Coale. Thank you for the question, Chairman Scott. I 
believe that the process that we utilize to make amendments 
within the Federal Milk Marketing Order system is one that 
provides for clear transparency, and, most importantly, it 
stimulates and encourages industry participation. USDA must 
respond to the industry, rather than USDA leading, so it is an 
opportunity for the industry to present issues before the 
Department, and then we can work with them to determine if we 
need to go through rulemaking proceeding, but it is a very 
collaborative process.
    The Chairman. Well, we on the Committee, we have seen--
shall I say a reluctance to initiate this process within the 
industry. Is that your impression?
    Ms. Coale. That is not my----
    The Chairman. Within USDA.
    Ms. Coale. Within USDA, that is not my impression. We spend 
a considerable amount of time, and I personally have traveled 
throughout the United States, talking with dairy producers, 
with cooperatives, with processors, regarding what kind of 
changes might be made to the Federal Order system.
    The Chairman. And let me ask you also, what have you heard 
from industry on changes to structure, and do we in Congress 
need to act?
    Ms. Coale. With regard to structure, I am not exactly 
certain what you are referring to with that. Is it the 
structure of the Federal Order system, or is it the structure 
within the industry?
    The Chairman. Well, what we are trying to find out is--I 
will say within the industry.
    Ms. Coale. Okay. I think that the Federal Order system is a 
program that is designed to work in the current structure, as 
well as in any future structure of the industry. The Order 
system adapts and changes on a regular basis to reflect what is 
happening within the industry itself, and that is based on 
proposals that the industry brings forward to the Department.
    The Chairman. Okay. Thank you very much. Ranking Member, I 
now recognize you for your questions.
    Mr. Thompson. All right. Well, thank you to both our 
witnesses from the USDA for your service and leadership. Ms. 
Coale, I appreciate the Department's work implementing the 
Dairy Donation Program we created to provide needed dairy 
products for families in need, while also minimizing food 
waste. This is a great win-win, in my opinion. As you have 
implemented the program, can you talk about the successes you 
have seen so far, as well as any areas for improvement that we 
could help to refine in order to make sure the program is used 
to the fullest potential?
    Ms. Coale. Thank you, Ranking Member Thompson. I would 
agree with you, the Dairy Donation Program is a fantastic 
program, and it was really designed to take a situation where 
dairy farmers were dumping milk and put that into consumers who 
really needed to have that nutritional product, so the premise 
on which the program has been established is wonderful.
    At this particular time, we are in the infancy, as far as 
implementing the Dairy Donation Program. As you know, we 
implemented the Milk Donation Reimbursement Program as part of 
the last farm bill. That program did not receive enough 
publicity, and enough participation, I think partially because 
of the reimbursement level, and that has been corrected through 
the Dairy Donation Program, where reimbursements are more 
reflective of what the costs are being incurred for those 
donations. So, I think at this particular time we need to see 
how the program further develops. Any assistance in encouraging 
processors and feeding networks to participate in the program 
is always welcome, and we are working on increasing the 
awareness of the program.
    Mr. Thompson. Well, thank you. And we are certainly open 
to, as implementation proceeds, any suggested refinements as we 
prepare for the next farm bill. Mr. Marlow, I was glad USDA 
incorporated the dairy quality alfalfa price point, you 
mentioned that, into the Dairy Margin Coverage formula. We 
included language in the 2018 Farm Bill directing NASS to 
include that price point in their monthly surveys, enabling you 
all to make this change, and I am pleased with this 
improvement, as it makes our dairy safety net more reflective 
of actual farmer feed costs. Can you talk about how this change 
has impacted producer payments under the program?
    Mr. Marlow. Prior to that change, the feed costs were 
calculated based on 50 percent high value alfalfa. The change 
made a significant increase in payments. There are two factors 
to this. One is that we made it retroactive to 2020, so that 
farmers were able to receive payments for both 2020 and 2021. 
Also, this is a permanent change to the program. Having this 
change in the program will affect the baseline, and our 
conversations as we go into the new farm bill. So it has 
provided a series of benefits.
    Mr. Thompson. Well, I am so thankful that, when we set the 
Dairy Margin Coverage, we based it on margin. I think it was 
Southern Ag that had a blog on Monday this week that talked 
about hundredweight prices topping $27 per hundredweight. I 
didn't think we were going to see that. Unfortunately, 
agriculture is a business, right? And at the end of the day, it 
is the margin that matters, so I am, again, very thankful that 
we based our safety net for dairy on margin. That is probably 
something we need to look at for other commodities.
    So, Mr. Marlow, the escalating cost of inputs that is 
making that high commodity price is not really beneficial, do 
we have a mechanism, or additional mechanisms to consider any 
of those input costs for further adjustment within the Dairy 
Margin Coverage?
    Mr. Marlow. We are very concerned about the margins, and, 
as you just said, I think it is very important that the DMC 
focused on the margin, and not just the price in the 
marketplace. We know that producers are facing inflation on 
costs far beyond just the feed costs that are part of the 
calculation. This is part of a much broader strategy on 
inflation that the Administration is taking on, which includes 
looking at a series of issues, including labor, and also 
freeing up trade, freeing up trade and the movement and 
transportation, and a series of issues that we are taking on. 
But at this point, and I agree with you and the Chairman, that 
this margin-based coverage has proven to be extremely important 
in terms of addressing the costs that you are talking about, 
and is something that we need to look at in terms of other 
commodities.
    Mr. Thompson. All right. Thank you so much. Thank you, Mr. 
Chairman.
    The Chairman. Thank you. And now the gentleman from 
California, Mr. Costa, who is also the Chairman of the 
Subcommittee on Livestock and Foreign Agriculture, is 
recognized for 5 minutes.
    Mr. Costa. Thank you very much, Mr. Chairman, for this 
important informational hearing as we set the table for the 
reauthorization of next year's farm bill. Clearly, we 
understand that the dairy industry is such an important 
component of American agriculture, and it has variations on a 
regional basis, as we are already discussing. As a third-
generation dairy--son of three generations of dairy family in 
Fresno, California--from the time I was a young man until I was 
in my early 20s I worked on our family's dairy--I understand 
the trials and the challenges that we face, a business that is 
365 days a year in which the cows must be milked, the 
volatility that we have seen not only in recent years, but it 
is part of the history of dairy in America. So this hearing is 
near and dear to my heart, as California is the leading dairy 
state in the nation. We are producing 20 percent of the milk 
products for the entire country, a total milk production of 
over 41 billion pounds last year.
    My district is one of the top ranking dairy producing 
districts in the nation, so as we talk about how we make 
changes, and how we adjust, in light of the pandemic and other 
factors, I think it is very important, for the 2023 
reauthorization bill, that we examine the safety net 
provisions, whether we are talking about the Dairy Margin 
Coverage Program, or other issues in terms of the Dairy Forward 
Pricing Program that involve risk management. Clearly we are 
fortunate to have a situation where organizations that work 
closely with Members of the Committee, and I think there is a 
consensus--a bipartisan consensus here, whether we are talking 
about National Milk Producers Federation, International Dairy 
Foods Association, Dairy Farmers of America, or California 
Dairy, Inc., that I work very closely with.
    What we have seen is extreme volatility during this 
pandemic, with price per hundredweight dropping down below $10 
per hundredweight, now we see it at $27 per hundredweight. That 
volatility, and those input costs, I think demonstrates the 
risky nature of this business. And so I want to--and commend 
the USDA for their efforts, going back to 2020, making it 
retroactive, and including the alfalfa pricing, as a number of 
Members have mentioned, I think was the appropriate thing to 
do, because these are part of the input costs. But I think the 
$5 million cap, frankly--and, again, one size doesn't fit all, 
but it is really discriminatory to California, where our 1,200+ 
dairy producers exceed that amount, and so that is something 
that I would like to bring to the Committee's attention.
    My first question is to Ms. Coale. As you are aware, the 
State of California conducted statewide processing under the 
old system before we joined the Federal Milk Marketing Order to 
ensure that we understood the data, as a vital resource, would 
be included in cost allowance. Can't we do better on the 
Federal Marketing System to update that data collection 
services, and what would you need to ensure that to occur?
    Ms. Coale. Thank you, Congressman Costa. You are correct in 
that the California Department of Food and Ag had a robust 
manufacturing cost survey that they conducted when there was a 
California State Order. When California became part of the 
Federal Order System, that manufacturing cost survey was no 
longer continued by CDFA. Currently at USDA, we do not have the 
authority to conduct a mandatory manufacturing cost survey so 
that----
    Mr. Costa. Could that be something we consider under the 
reauthorization of the new farm bill?
    Ms. Coale. That would certainly be something that would 
need to be authorized under the upcoming farm bill.
    Mr. Costa. And what level of funding would you need to do 
that?
    Ms. Coale. That is a great question.
    Mr. Costa. Get back to us, because I want to pursue that.
    Ms. Coale. Okay. We can get back to you with the 
information on how much we will need for that funding. Thank 
you.
    Mr. Costa. And when we talk about--and maybe both of you 
might want to respond, I have limited time here, but the 
Federal Milk Marketing Order for Class II, III, and IV 
purposes, reauthorized in the 2018 Farm Bill, is set to expire. 
You think--it is a very valuable risk management tool. Do you 
think we ought to permanently include that? You can say yes or 
no because of limited time.
    Ms. Coale. Yes.
    Mr. Costa. Okay. My time has expired. Thank you very much, 
Mr. Chairman.
    The Chairman. The gentleman from California, Mr. LaMalfa, 
is recognized for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate this 
discussion today, and the key element that dairy is for my home 
state, and district, and following up with Mr. Costa on that, 
we do see California as a major, major producer, and the 
challenges they have faced from state regulations and market 
conditions--let me launch right into a couple thoughts here for 
Deputy Administrator Coale. On Dairy Forward Pricing Program, 
as far as how producers take this, what do you think the great 
benefit will be from permanent authorization of the program?
    Ms. Coale. I think if that--forwarding contracting on Class 
II, Class III, and Class IV were made permanent, the industry 
would have a good understanding and appreciation to use the 
program more robustly than they currently do, because there is 
always the concern that, at the end of a farm bill, it may not 
be reauthorized in the next one.
    Mr. LaMalfa. Farm bills aren't easy to pass around here. It 
is tougher every 5 years, it seems, to get it done, with a lot 
of misinformation put out about them and such, but on the 
farmer's side of it, which represents about 20 percent of the 
spending is more critical than ever that we have it, no real 
downside on permanency that you would see, as far as having to 
change it with further legislation? Would it be pretty linear 
over time?
    Ms. Coale. Absolutely, as long as it continued for Class 
II, Class III, and Class IV.
    Mr. LaMalfa. Okay, thank you. And, Administrator Marlow, 
the Emergency Livestock Relief Program related to forage losses 
for the last couple years, of course, bringing it back home to 
my home state, and the western states, where we have had such 
drought problems and lack of availability of forage, of feed, 
at good pricing, and it is going to be that way in 2022 with 
that crop as well, what further work can we do to streamline an 
emergency program like this to make sure that the producers are 
getting relief as soon as possible, since they are not as 
likely to be able to float this cash-wise with other increased 
expenses, et cetera?
    Mr. Marlow. That time lag, in terms of the time between 
disaster and payment, is something that we are very focused on, 
and administering this program would leverage the applications 
that farmers had already filled out to streamline that 
application process and build on information that we already 
have.
    Mr. LaMalfa. So you don't have to reinvent the wheel with a 
new application? Just change the dates, pretty much, and it 
will be much quicker?
    Mr. Marlow. We were able to use the information from 
farmers' Livestock Forage Program applications to essentially 
be the application for this program. We have now disbursed $590 
million into farmers' pockets without them ever having to fill 
out an application, or go into their local offices.
    Mr. LaMalfa. But there is still accountability the 
taxpayers would demand and expect, right?
    Mr. Marlow. Absolutely.
    Mr. LaMalfa. Yes. Okay. So, as we have seen, that Congress 
did pass the funding in September of 2021, but the program 
didn't come into place until end of March in 2022, so you don't 
see further delays like that coming forward, like--happening 
for what is in the pipeline, or maybe possible 2022 claims next 
year?
    Mr. Marlow. Well----
    Mr. LaMalfa. A 6 month gap?
    Mr. Marlow. What I would encourage us to look at is not 
just the time until the program is announced, but the time to 
actual cash in farmers' pockets. On ELRP alone, we had money 
going into farmers' pockets within just a couple of weeks of 
the program being announced.
    Mr. LaMalfa. Beautiful.
    Mr. Marlow. We are now on Emergency Relief Program-Phase 
One. That program was announced approximately a month ago. We 
now have over $3 billion that has been disbursed. Those checks 
are out, and in farmers' pockets. We are now in the process of 
looking for Phase Two. What we are charged with on phase two is 
filling in the gaps and addressing those who have not received 
those benefits. We are moving forward as quickly as we can to 
finish out the disaster programs.
    Mr. LaMalfa. Okay. Good, good. I appreciate--that is a good 
report. Thank you for that. So, Mr. Chairman, I will yield 
back.
    The Chairman. Thank you. And now the gentlewoman from Ohio, 
Ms. Brown, is recognized for 5 minutes.
    Ms. Brown. Thank you, Chairman Scott, and Ranking Member 
Thompson, for holding this hearing today, and thank you to both 
of our panels for being here today. Dairy products of all kinds 
are an important component of USDA's food distribution 
programs. Programs such as The Emergency Food Assistance 
Program, the Commodity Supplemental Food Program, and the Food 
Distribution Program on Indian reservations are unique in that 
they utilize only U.S. grown and produced products. These 
programs are critical to our nation's farmers, farm economy, 
and food security. CFAP bonus commodity purchases are 
particularly unique, as they are driven by the need for 
agriculture commodity support when the market price of 
commodities falls, and those purchases are made by Agricultural 
Marketing Service and Farm Service Agency.
    So my question is, Deputy Administrator Marlow and Deputy 
Administrator Coale, can you speak about how our USDA food 
distribution programs, including CFAP bonus purchases, serve 
these important dual purposes of supporting food-insecure 
families, as well as our nation's farmers, in particular dairy 
farmers? Thank you.
    Ms. Coale. Thank you for the question, Congresswoman Brown. 
The food programs that we have at USDA are vital to both the 
agricultural producers who grow the food that is purchased 
through the Commodity Procurement Program at the Agricultural 
Marketing Service, and then distributed through the various 
programs offered and developed through the Food and Nutrition 
Service. This is not our particular area of expertise, and I 
would encourage you to contact us to give you the individuals 
at the Food and Nutrition Service who would be happy to go into 
detail on the specific programs that you are asking about. But 
anytime that USDA can deliver food to individuals who need 
nutrition assistance, it is a benefit to everyone in the 
agricultural sector, so thank you so much for that question.
    Ms. Brown. Thank you. Along similar lines, can you speak to 
how the Supplemental Nutrition Assistance Program supports 
dairy farmers by ensuring that low-income Americans can afford 
to purchase their products?
    Ms. Coale. Once again, this would be a question that I 
would defer to my colleagues in the Food and Nutrition Service, 
and what I can say is that we are actively, and have recently, 
increased the amount of fluid milk that is available through 
feeding networks, which is something that USDA implemented 
recently. We also are working on developing, through various 
programs, the opportunities for food banks to have 
refrigeration systems so that the nutritious dairy products are 
available to them as well. Again, specifics could be answered 
best by our colleagues at the Food and Nutrition Service 
regarding the specific SNAP program.
    I might indicate as well that the Dairy Donation Program, 
which is administered within the Agricultural Marketing 
Service, is one program that is truly designed to connect the 
consumer with products that are donated, and it is to provide a 
direct benefit to the dairy farmer in that milk that might have 
been dumped on the farm can be manufactured and put into the 
feeding networks for those low-income individuals to have the 
nutritious product.
    Ms. Brown. All right, excellent. Well, thank you for 
sharing that information, I appreciate it. And with that, Mr. 
Chairman, I yield back.
    The Chairman. The gentleman from Indiana, Mr. Baird, is 
recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman, Ranking Member, for 
holding this session. Mr. Marlow, my question deals with the 
2022 DMC signup. In other words, that was expanded or opened in 
December of 2021, and it has key provisions for helping small- 
and mid-sized producers to sign up for a supplemental 
production. Could you elaborate on that?
    Mr. Marlow. Thank you, Congressman, for the question. When 
DMC was established, farmers were able to establish their 
history of production based on either the 2011, 2012, or 2013 
years. Many farmers had not reached the 5 million pound cap 
yet. So what Supplemental DMC did was allowed farmers to 
essentially enroll that supplemental production, that was 
between what they had established in 2011 or 2012, and the 5 
million pound cap in the program, increasing their risk 
management for their operations.
    Mr. Baird. So can you elaborate on--are there any issues 
that we need to tweak in that program, that you are aware of, 
or has it been working well enough to leave it alone?
    Mr. Marlow. With the changes that we have made over the 
last year, we have gotten very positive feedback from dairy 
producers on the current status of the program. We look at the 
opportunity possibly to combine Supplemental DMC with DMC, and 
make that a more permanent part of the program. This would 
allow farmers to update their production history, and the 
amount that they can enroll in the program. We continue to seek 
and receive feedback from producers in terms of the types of 
changes that we have already made, and we will continue to be 
aggressive about communicating with the producers, and 
responding to that feedback, and look forward to providing 
technical assistance on any suggestions that come from this 
hearing, or other conversations in preparation for the farm 
bill. Thank you.
    Mr. Baird. Thank you. Thank you very much. I am going to 
turn now to Deputy Administrator Coale. The 2018 Farm Bill is 
probably going to serve as the base, certainly for what we do 
in the 2023, but I am interested in the Dairy Forward Pricing 
Program that is extended until September of 2023. I want to 
know what classes of milk, and I think it is II, III, and IV, 
that are covered in that extension, and how that has been 
working.
    Ms. Coale. Thank you, Congressman, for the question. The 
Dairy Forward Pricing Program is working very well, as it was 
authorized within the last farm bill and previous farm bills. 
The application of forward contracting does apply to Class II, 
Class III, and Class IV uses of milk, and I think that is the 
appropriate continuation of the program. At the current time we 
see the program probably utilized most in the upper Midwest 
region of the U.S., and potentially the program would be 
utilized a bit more if there were permanent authorization for 
the program, although that is something that we don't have any 
information on. But the individuals who do utilize the program, 
the feedback that I get from the dairy sector is that it works 
very positively, and is a valuable risk management tool for the 
producers who do use it. Thank you.
    Mr. Baird. Thank you, and thank you, both witnesses, for 
your responses, and I yield back.
    The Chairman. The gentlewoman now from North Carolina, Ms. 
Adams, who is also the Vice Chair of the House Agriculture 
Committee, is now recognized for 5 minutes.
    Ms. Adams. Thank you, Chairman Scott, and Ranking Member 
Thompson, for having this hearing, and to our witnesses, thank 
you for testimonies that continue to help Members of the 
Committee prepare for the farm bill. We can see that the 
subsidy policies discussed today are effective for producers 
and consumers across the board. I would like to see similar 
farm bill subsidies and programs improve conditions for fresh 
produce growers as they continue to face barriers to expanding 
their production, advocating for subsidies that support dietary 
guidelines for all Americans, meaning that we need to remove 
these barriers.
    So, Deputy Administrator Coale, I would like to discuss the 
dairy safety net programs, and their ability to withstand 
market disruptions. So, if these programs are working well, why 
were additional payments, including $350 million in Pandemic 
Market Volatility Assistance payments necessary?
    Ms. Coale. Thank you for the question, Congresswoman. The 
payments that were distributed and are currently still under 
distribution for the Pandemic Market Volatility Assistance 
Program, resulted from market abnormalities that occurred 
during the pandemic. In the 2018 Farm Bill, Congress authorized 
a change to the Class I price mover, and we implemented that in 
the Department in 2019. As was mentioned earlier this morning, 
this change in Class I mover was a consensus agreement reached 
by the National Milk Producers Federation and the International 
Dairy Foods Association to benefit the entire industry, and 
implementation in the farm bill was designed to be revenue 
neutral.
    However, at the time it was implemented, nobody foresaw a 
pandemic occurring, and, more importantly, nobody even could 
have projected the implications that that pandemic would have 
on all agricultural market prices, and particularly within the 
dairy sector. So, a provision that was intended to be revenue 
neutral, what we saw occur between a period of mid-2020 through 
mid-2021 was a result in a significant change in that revenue 
neutrality. If you look at the Class I mover prior to the 
pandemic, and the Class I mover as we are moving out of the 
pandemic, it is maintaining pretty much a revenue neutral 
position, compared to the prior mover. However, during that 
pandemic period, due to the price inversions that occurred, we 
had some major losses that were incurred by the dairy sector, 
and hence USDA stepped up to help provide assistance that was 
needed to those dairy producers during that period of time. 
Thank you.
    Ms. Adams. Thank you. Mr. Bozic, you mentioned long-term 
trends in the U.S. dairy industry, and the continued decrease 
in demand, so can you explain or speak to how farm bill 
programs can aid milk prices, and stabilize a volatile market?
    The Chairman. I believe that was--who did you direct that 
to?
    Ms. Adams. Well, any of the panelists can answer that.
    The Chairman. Okay. Would any of you----
    Ms. Coale. All right, I will go ahead and answer that 
question. I believe it was directed towards my colleague, but I 
will be happy to try and step in.
    The Chairman. Go right ahead.
    Ms. Coale. USDA has several programs to help assist dairy 
producers, and I think it is important that all of these 
programs are a package that work together, and many of them are 
dependent upon the producer actually taking the initiative to 
participate. So if a producer wants to participate in a forward 
contracting program to lock in a particular price, they need to 
invest, and take the time to understand the program, and sign 
up for the program. Likewise, the programs that Deputy 
Administrator Marlow administers in the Farm Service Agency 
also require signup by those producers.
    Working collectively, USDA tries to assure that there are 
various opportunities for producers to ensure that they have 
viability going forward in the future because, of course, 
American agriculture is the essence of USDA.
    Ms. Adams. Well, thank you very much. Mr. Chairman, I am 
going to yield back.
    The Chairman. All right, thank you. And now the gentleman 
from Ohio, Mr. Balderson, is recognized for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman. Panel, thank you 
for taking time to be here today. My first question is for 
Deputy Administrator Coale, Federal Milk----
    The Chairman. Excuse me a moment. Members, remember, check 
your microphones. Let us keep them muted until you are 
recognized. Thank you. You may continue.
    Mr. Balderson. Thank you, Mr. Chairman. Again, this is for 
Deputy Administrator Coale. Federal Milk Marketing Order price 
formulas use the average cost of manufacturing a pound of four 
specific dairy products. AMS released a cost processing study 
earlier this year which accounted for data from October 2017 to 
December of 2020. Prior to this data collected from a 2006 and 
2007 cost of processing study was being used. This was touched 
on earlier by Mr. Costa, but can you elaborate further on the 
benefits of conducting cost of processing studies more often?
    Ms. Coale. Thank you for that question, Congressman. I do 
believe that, in the Federal Milk Marketing Order price 
formulas, we are using make allowances, and there were 
benchmarks that we could utilize to determine if those make 
allowances were staying in touch with reality, as far as what 
was happening in the manufacturing sector. And, without the 
California Department of Food and Ag, without their make 
allowance study, there really is no information, so USDA 
progressively has worked with Dr. Mark Stevenson to have a 
manufacturing cost study. It is a voluntary study, and the 
information, obviously, was not as robust as what the industry 
was hoping for, nor was it as robust as what USDA was hoping. 
However, the information is purely voluntary.
    In order to continue to have an effective make allowance 
within the Federal Milk Marketing Order price formulas, I think 
that it would be beneficial to have authorization for USDA to 
conduct a mandatory price survey, as far as the manufacturing 
costs are concerned. The timing, and the robustness of that 
survey would be things that could be determined by the 
industry, as to who should participate, if it should be the 
same participants that are already required to report under the 
Dairy Mandatory Price Reporting System, or if it should be 
something else, as well as the industry determining how often 
that make allowance study should be conducted, and how the 
results of that study should be implemented within the Federal 
Milk Marketing Order System.
    So, I think this is a conversation that is applicable to 
the upcoming farm bill and is something that needs to 
incorporate a robust discussion with the industry as well. 
Thank you.
    Mr. Balderson. Ms. Coale, thank you. That was a great 
response. I appreciate that. My next question is for Mr. 
Marlow. Thank you for being here also, sir. You discussed the 
changes your agency has made to the DMC Program earlier. Did 
you reach out to get feedback from small- and medium-sized 
producers when deciding what changes would be made to DMC, and 
what kind of outreach was conducted?
    Mr. Marlow. Thank you very much for the question. Yes, 
since the start of the Administration, dairy producers, and 
especially small- and mid-scale dairy producers, have been one 
of the areas we have focused our attention, in terms of the 
gaps within the programs that have needed increased assistance. 
Over that time, based on input that we have received from 
producers, we have made changes specifically because of the 
input of producers, and the input of those who work with small- 
and mid-scale producers. We continue to seek that input through 
our county and our state officers, and also through meetings 
with industry that we hold on a regular basis.
    Mr. Balderson. Okay. Thank you very much. Mr. Chairman, I 
yield back my remaining time. Thank you very much, sir.
    The Chairman. The gentleman from Arizona, Mr. O'Halleran, 
is now recognized for 5 minutes.
    Mr. O'Halleran. I want to thank Chairman Scott and Ranking 
Member Thompson for organizing this important hearing. I also 
want to thank the witnesses for their participation today in 
preparation for the upcoming farm bill. Last year, Arizona's 
dairy industry created more than 44,000 jobs. Dairy is an 
essential part of Arizona's economy, and among the top 
commodities in Arizona's First Congressional District. Over 98 
percent of Arizona dairies are family owned and operated, and 
these families depend on our work to stabilize prices and 
incentivize domestic production.
    I know a little bit about dairy farming. It is in my 
family's background. My grandfather, my father, were dairy 
farmers, along with seven brothers of my father's, and some of 
those uncles took on the role of dairy farming even after my 
grandfather's farm was lost during the Great Depression. During 
the previous farm bill reauthorization I worked to strengthen 
the dairy farm safety net. This included creating the Dairy 
Margin Coverage Program, which serves as an important risk 
management tool for producers in my district.
    Mr. Marlow, you have significant expertise in risk 
management. In your view, how successful has the DMC program in 
aiding farmers through the recent volatile years?
    Mr. Marlow. Congressman, thank you very much for the 
question. I think it is important for us to look at the safety 
net as a system between both DMC and also the Risk Management 
Agency programs that also work with it to provide a more 
comprehensive coverage. I would highlight that in 2021, the DMC 
Program put out $1.1 billion in payments to dairy farmers 
across the country, having a very significant impact on farm 
viability across the country. I am very proud of the changes 
that we have made in DMC over the last couple of years. I think 
it is a much more robust safety net, along with our programs 
from our partners over at RMA, but I also would be remiss if I 
didn't note that between 2013 and 2021 we lost approximately 
17,000 dairy farms in the United States.
    That is a loss, and over time I have spent time sitting at 
the kitchen tables of families going through that process, I 
know that that is a continued weight on the land, a weight in 
our communities, but we are very proud of the safety net that 
we have created, and the safety net that we have built through 
the changes that we have made over the last couple of years.
    Mr. O'Halleran. And a follow up on that, what are the most 
important updates we can make to the DMC Program, or other 
programs, to make sure the dairy safety net is as strong as it 
needs to be, to make sure that we don't lose 17,000 farms, like 
you had just mentioned?
    Mr. Marlow. Thank you very much, Congressman. I would say 
that the opportunity was provided through Supplemental DMC for 
farmers to update their coverage levels, and their production 
history has been a very important part of the process, and a 
very important part of it being an effective safety net over 
the last couple of years. We can look at how that becomes more 
of a part of the program over time. I would also say that, by 
focusing on the margin, and by focusing on the gap between the 
price and the cost, in this case feed cost, as we have talked 
about inflationary pressures and other issues, this is a very 
important model for assistance programs as we go forward, and 
should serve as an important touchpoint in the conversation 
going to the farm bill. And we look forward to providing 
technical assistance on any other proposals that come either 
through your offices, or through the remaining panels who are 
yet to speak today.
    Mr. O'Halleran. Thank you very much, Mr. Marlow. Ms. Coale, 
despite the safety net provisions, the dairy industry was hit 
hard during the beginning of the COVID-19 pandemic. At one 
point Arizona dairy farmers were dumping hundreds of thousands 
of gallons of milk a day. Milk pricing became volatile, and 
farmers in Arizona have had to contend with economic ups and 
downs ever since. I am going to be sending you, due to time, 
some questions on that, but I find it that we have to 
continually adapt to these changing environments at a much 
faster pace so that there is reality placed in the system of 
the timeliness and the impacts to family farms. Thank you, and 
I yield back.
    The Chairman. The gentleman from Iowa, Mr. Feenstra, is now 
recognized for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Scott, and Ranking Member 
Thompson. Thank you for the testimony from both of you. The 
dairy industry is extremely vital to Iowa, in my Fourth 
District. I mean, we are home to Agropur, Wells, Blue Bunny, 
Dean Foods, AMPI. They are all in my back yard, literally in my 
back yard, and I talk to my dairy producers virtually every 
week, so I am just thankful for you taking the time out to 
discuss these topics.
    However, the number one topic that I am hearing from my 
producers is the fear moving forward, granted, we are at $25 
per hundredweight right now, but their input costs are just 
very significant. So from either one of you, I am just 
wondering, as we move forward--and I know we have the Dairy 
Margin Coverage and stuff like that, but a lot of the smaller 
producers are saying that they are going to go under if this 
changes, or if the commodity price changes at all, the costs of 
feeding and everything else going up, that they are setting up 
for a huge cliff. Can either of you talk about what we can do 
in the farm bill, or what we should be doing moving forward so 
we don't lose these producers?
    Mr. Marlow. Thank you, Congressman, this is an extremely 
important question at this point. We share the concern about 
the volatility of the price, and the pressures of inflation. 
Inflation and input costs has been a major concern within USDA, 
and a major cause of action, and it is taking essentially a 
two-prong approach. One is looking at what we can do to improve 
the situation in the short-term, and address some of the 
specific situations in terms of shipping, in terms of 
transportation, in terms of supply chain issues, and those 
types of things. We are also looking at longer-term structural 
issues, in terms of competition.
    So, I would point at both the work that is being done on 
the investments, on increasing fertilizer production, and 
increasing and addressing fertilizer costs, but then also, 
longer-term, the very significant investment that the 
Administration is making in supply chain diversification, and 
the opportunities to access and increase processing. I would 
also suggest that, for the smaller-scale and mid-scale farmers 
that you are referring to, access to higher value markets is 
often a very critical component of their strategy for financial 
viability and as we invest in these supply chains, invest in 
higher value markets, and invest in bringing a greater portion 
of the food dollar back to the farm. One of the issues that our 
division is working on is to look at how we need to adjust our 
safety net programs to make sure that we are recognizing those 
markets that are so critically important to the scale of 
farmers that you are talking about and how, in our disaster 
programs, we are able to recognize those prices, recognize 
those markets, and make sure that that safety net extends into 
the higher value shorter chain operations that farmers of the 
scale that you are referring to need to be viable, and not just 
stay in, but thrive over time.
    Mr. Feenstra. Yes. Right. I mean, I agree 100 percent. I 
mean, you have to find value added. They have to figure out a 
way to make sure that--and sustainability. I mean, long-term, 
this is always a challenge. The other thing that sort of goes 
along with this, when it comes to inputs, is the cost of 
finding workers, and, especially in the Midwest right now, we 
have such a shortage of workers, both from the production side, 
all right, from the producer, and then also from the side that 
is making the dairy products, whether--the ice cream, or 
cheese, or whatever--proteins, or whatever it might be.
    Actually, yesterday we had a situation that one of the 
locations I noted was dumping milk. Well, we sure don't ever 
want that, and so I look at that, and I have 35 seconds here. 
Any direction there? I know we talked to the H-2A--H-1A 
program, but any direction that you look at and say, ``Hey, 
this is something that we need to address''?
    Mr. Marlow. This is an issue that the Secretary has taken a 
personal interest. We have supported the Farm Workforce 
Modernization Act of 2021 (H.R. 1603), and we are happy to 
continue conversations about specific needs within specific 
industries, but, in my last 3 seconds, it is an issue that has 
very much taken the attention of the Department.
    Mr. Feenstra. Yes. Thank you, and I yield back.
    The Chairman. The gentlewoman from Washington, Ms. Schrier, 
is now recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and thank you to our 
witnesses. I thought I would first focus today on just keeping 
costs down for our producers. As everyone here knows, import 
costs are extremely high for farmers and agricultural producers 
right now. I first became aware of supply chain dysfunction 
made worse by the pandemic from hay growers in Ellensburg, 
Washington, in my district, and, of course, issues impacting 
the hay and feed supply are going to directly impact dairy 
producers, so right now I am seeing the storm brewing that will 
impact all feed for cattle. Part of that is weather, part of it 
is port congestion, and supply chain issues. Part is the high 
cost of inputs, like fertilizer, and then another is that right 
now the price of wheat is so high that there is more incentive 
to grow wheat, and less incentive to grow hay, and so this is 
all potentially contributing to skyrocketing prices for feed.
    So, Mr. Marlow, first I want to thank you--especially on 
behalf of the producers in my district. Thank you for the 
change in the DMC feed cost formula to better reflect the cost 
of high-quality alfalfa hay. And I want to ask you a couple of 
things. One is, in light of this change, is there more that can 
be done to address or offset high feed costs, and kind of part 
two of that question is--I do have dairy producers in my 
district who have their cows at least part time just feed off 
the grass, just feed--and--on the range, and was wondering if--
how you think about costs of feeding those cattle?
    Mr. Marlow. Thank you very much Congresswoman for the 
question. This is an extremely important issue. The inflation 
of costs for producers is something that we have been looking 
at and working on quite intensively. You mentioned several 
pieces. One is opening up movement through the ports to allow a 
greater flow of goods. We have recently created a program with 
the ports of Seattle and Oakland to basically provide an 
opportunity for containers to be filled with agricultural 
commodities, and to increase that flow of goods. We have also 
had increased funding for the expansion of fertilizer 
production in the United States.
    And there are a series of steps that we are taking to 
address the specific issues that you named. One is the extent 
to which we have been able to open up some of the CRP land for 
supplemental grazing and supplemental haying based on the 
extensive droughts across the country. For land that is being 
taken out of CRP at the end of the season, we have opened up 
the ability for farmers to get out of CRP early in order to 
prepare land for fall production if that land was coming out of 
CRP anyway.
    These issues of inflation, and we have had a whole series 
of issues, the extensive disasters, the war in the Ukraine, 
coming out of the pandemic, these issues are going to require a 
comprehensive approach in terms of addressing each of the 
different pieces. We are really looking at that comprehensive 
approach in terms of increasing the ability for the financing 
of infrastructure, the development of supply chain 
diversification, and a series of other steps to be taken.
    Ms. Schrier. Thank you for the answer. We may have to have 
a further discussion about undoing conservation programs for 
this, but that can be another day. I just want to close by 
mentioning that there is a big problem, as Mr. Feenstra just 
said, with labor issues for our dairy producers. In Washington 
State, folks point to immigration policy as one of the primary 
barriers here, and so I just want to mention the need to make 
progress here with the passage of the Farm Workforce 
Modernization Act of 2021 that passed in a bipartisan manner in 
the House, but we need to get through the Senate. It would 
allow for more worker visas, which would help the dairy 
producers in my district, and across this country. Thank you, I 
yield back.
    The Chairman. The gentlelady from Florida, Mrs. Cammack, is 
now recognized for 5 minutes.
    Mrs. Cammack. All right. Well, thank you, Mr. Chairman. I 
will jump right into it. So, Ms. Coale--am I saying that right?
    Ms. Coale. You are.
    Mrs. Cammack. All right, wonderful. I always have to ask, 
because people always get my name wrong. But, Ms. Coale, as you 
know, my dairy farmers in the great State of Florida were 
especially hard hit by the price inversions that occurred 
during the pandemic 2 years ago. Now, I appreciate that the 
Department has reimbursed farmers for some of the losses under 
the Pandemic Market Volatility Assistance Program, but I am 
continuing to work on rectifying that program's 5 million pound 
limitation.
    I know that we see eye to eye on how important it is that 
we work towards real reforms for the dairy sector that avoid a 
repeat of what happened amid the pandemic, and that we consider 
the impact of such reforms, and what they can do on dairy 
farmers of all sizes, including our family dairy farms in my 
state, where the average dairy has more than 1,300 cows, and 
keep in mind these are all family operations. These are not 
massive corporate entities, but they are family operations. So 
can you give me your assessment on some of these pricing 
dynamics, and how they impacted producers in different areas?
    Ms. Coale. Thank you, Congresswoman. I have been on many of 
your family-owned dairy farms in Florida, and I completely 
understand how they are operating, and the unique marketing 
conditions that they face in the State of Florida that are 
different than from other areas across the country. And what we 
did see through the pandemic was that there was a real increase 
in price volatility, and typically we see cheese prices that 
are lower than what the price for fluid milk is, or Class I 
milk, as we refer to it, but during the pandemic there were 
some market abnormalities that occurred, and cheese was 
suddenly valued much higher than Class I milk. And that 
continued for a period of time, and the Department recognized 
that this was creating great hardship for the dairy sector and 
dairy producers, so the Pandemic Market Volatility Assistance 
Program was developed and implemented.
    And I recognize that the program had different effects 
across the country, and there were different payouts across the 
country. That was a result of several things, including the 5 
million pound cap, which obviously impacted every producer in 
the State of Florida, and it may not have impacted all other 
producers in different regions. When we are looking at how the 
Pandemic Market Volatility Assistance Program paid out, what it 
looked at was the difference between the prior Class I mover 
and the current Class I mover. It looked at the volumes of milk 
that were pooled. It looked at how the cooperative or the 
processor was paying the individual dairy producers, and took 
all of this collective information to determine how to pay out 
the monies. And I recognize that we were limited in the 
resources that we had available to us, and therefore we looked 
across to determine how other support programs were 
administered that USDA had been given authority to, and that is 
how the 5 million pound cap came into existence.
    So it is a program that we would look at. If Congress were 
able to provide additional resources for that, we could explore 
what other opportunities might be to help the dairy producers 
in your region, as well as across the country.
    Mrs. Cammack. I appreciate your insight there, and I would 
like to insert into the record an article from the Tampa Bay 
Times from one of my dairy farmers, Ms. Brittany Nickerson-
Thurlow.
    The Chairman. Without objection.
    [The article referred to is located on p. 1191.]
    Mrs. Cammack. Thank you, Mr. Chairman. Now, as you know, 
and you talk about this, my state, Florida, our dairy farmers 
have been working for generations, but, as we know, their 
livelihood and their survival are threatened. Now, I want to 
reiterate something that has already been spoken about in this 
hearing here today, which is that 95 percent of the U.S. 
dairies, even those larger dairies like those in my State of 
Florida, with more than 1,300 cows, are family owned and 
operated. We keep reiterating this. Now, these farms are part 
of the fabric of my state--we like to call ourselves the Dairy 
Belt--and they are vital to our economy and our food security. 
And, yes, these farms have grown in size, but they are still 
family farms, and they grow in size because they have to meet 
margins just to stay viable.
    One of the dairy farms in my state recently spelled out a 
reality that I hope we can all remember as we move forward. In 
the 1960s, a dairy with 27 cows was enough to support one 
family and three kids. To be successful today, many of our 
dairy farmers, particularly those in my State of Florida, must 
operate on a larger scale, with hundreds, thousands, even, of 
cows in order to make a living and survive this challenging 
time. With any of the programs moving forward, I think that the 
Pandemic Market Volatility Assistance Program being one of 
them, we need to take into the--reality this--the account. Many 
farms are not that small. They have many operations, and I look 
forward to working with my colleagues here on the Committee, 
but also with USDA to ensure that our family-owned dairy farms 
are able to be provided equitable relief and support, 
regardless of the size of their operation. And with that, Mr. 
Chairman, I yield back.
    The Chairman. The gentleman from California, Mr. Harder, is 
now recognized for 5 minutes.
    Mr. Harder. Thank you, Chairman Scott, and thank you also 
to our witnesses for joining us today. California's dairy 
producers are key to the ag economy of the Central Valley. In 
both Stanislaus and San Joaquin Counties, milk is the second 
top commodity, valuing over $700 million and over $400 million 
respectively. But despite the staggering economic contributions 
that we have seen from dairy, dairy has to face some real 
challengers, many of them exacerbated by the COVID pandemic. 
Just in my district we have seen hundreds of dairies close in 
recent years, and I know we are working to try to address that 
in the 2023 Farm Bill.
    I know that USDA and this Committee have partnered to roll 
out programs that assist dairy farmers to combat price 
fluctuations, unforeseen natural disasters, but I hear from 
many of our dairy producers that those programs don't quite 
meet the scope of our California dairies. And, of course, top 
of mind is the Dairy Margin Coverage Program, which I know came 
from the 2018 Farm Bill. It has been helpful to some dairy 
farmers, but most of our producers find that the 5 million 
pound cap either gives them minimal support, or deters them 
from the program entirely. And, given the vast amount of dairy 
production in the State of California, you would think that we 
would have a pretty high level of participation within DMC, but 
that is, of course, not the case. California has much lower 
participation than other states.
    Mr. Marlow, given your role managing the safety net 
programs like DMC, can you discuss any regional differences you 
have seen in DMC participation, in particular why California 
participation is so much lower compared to other states?
    Mr. Marlow. Thank you very much, Congressman. Thank you for 
the question. I do think, as we look at our safety net 
programs, that a one-size-fits-all approach does not fit. The 
scale of production definitely has an impact on participation, 
but in answering your question, I really want to look at our 
dairy safety net programs more comprehensively, including our 
Risk Management Agency programs.
    It is true that DMC has the 5 million pound cap. Coverage 
up to that cap is available to all dairy farmers, regardless of 
scale. They can also obtain the same coverage above that cap, 
just at a higher price. We also look at the RMA crop insurance 
policies based on dairy as part of that safety net, especially 
for some of our larger operations as they move past that 5 
million pound point. So I think we have to look at it in a 
comprehensive way, and look at all of those programs together 
as providing a safety net, whereas the 5 million pound cap 
really focuses in on providing a basic safety net across all 
scales, rather than just a subset. As you said, it may not 
cover the full range for a large scale producer.
    Mr. Harder. Yes, I hear what you are saying. I also think 
the DMC Program is incredibly important for dairy producers, 
and I am curious if you have any suggestions around what can be 
done to include California producers who may be on the fence 
about participating in DMC.
    Mr. Marlow. Well, I think it is important to recognize that 
the margin factor of the DMC is one of the major factors that 
makes it effective for dairy producers, that it is focused on 
the margin. We also have an RMA program that is also focused on 
margin for dairy producers as well. We are happy to engage in a 
conversation on how it can be extended more effectively to 
producers across the scale. I am happy to engage in technical 
assistance as we look at additional proposals.
    Mr. Harder. Thank you. I appreciate your comments, and I do 
think it is important to make sure that, as we look at the 2023 
Farm Bill process, that we are making sure that our California 
dairy farmers are well represented. I look across this 
Committee, I see a lot of folks that represent California 
dairies, more so than in the 2018 Farm Bill process, and I 
think that should be a chief goal of this Committee as we go 
forward. So, I look forward to working with the Committee, and 
our Chairman, and Ranking Member, and our stakeholders to 
hopefully get this right. So thank you guys so much for coming, 
and, Mr. Chairman, I yield back the remainder of my time.
    The Chairman. The gentlewoman from New Hampshire, Ms. 
Kuster, is now recognized for 5 minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman, and I want to 
thank our panel for being with us today. Dairy is an important 
pillar of New Hampshire's diverse agricultural economy, so I am 
glad we are having this discussion as we look ahead to the 2023 
Farm Bill. In the last farm bill, 2018, we successfully 
retooled what is now known as the Dairy Margin Coverage Program 
that we are discussing today. The narrow margins between high 
feed costs and low milk prices strain dairy farms across the 
country, and that was especially true for small family farms in 
New England, and in my district in New Hampshire, where 
transportation costs trend much higher. Farmers have been 
burned so badly by the previous iteration of margin coverage 
that not one dairy farmer I talked to in my district thought 
they would re-enroll.
    Thankfully, the DMC Program won over many converts, and has 
made a tangible difference in ensuring that farmers can access 
reliable margin coverage, and choose between options that best 
fit their needs. And it was a tremendous testament to the type 
of work we can get done when we write the farm bill in a 
bipartisan way. Nevertheless, New England dairies continue to 
face significant challenges to their long-term viability, and 
we are still losing small dairy farms in New Hampshire who have 
a tough time remaining viable as the industry consolidates 
nationwide.
    Consolidation runs the clear risk of making our dairy 
supply chains less flexible, especially in moments that call 
for maximum agility. We saw this discrepancy play out in the 
early days of COVID, when farmers were forced to dump milk, 
even though families were going hungry. The supply chain dots 
just weren't being connected. I believe there is much more we 
can do in the next farm bill to shore up family dairy 
operations, so with that, let us dive into the Milk Marketing 
Orders. In 2020, we saw the Federal dairy pricing thrown off as 
a result of the increased demand for cheese in the Farmers to 
Families Food Box Program, which then negatively impacted the 
fluid milk price. Deputy Administrator Coale, given this type 
of uncertainty, I am curious if USDA is making any moves 
regarding Federal Milk Marketing Orders, and if you had been in 
touch and heard from small dairy producers about how best to 
ensure fairness for setting dairy prices.
    Ms. Coale. Thank you, Congresswoman. I appreciate the 
question about what we are doing within the Federal Order 
System, and right now USDA's primary role is to have 
conversations with our stakeholders, and those conversations 
include both large and, in particular, small dairy producers to 
find out and educate them as to what the Federal Order System 
provides, and how it enables them to have a market for their 
milk production. The Federal Order System is one that is 
designed to establish minimum prices, and, in essence, this 
assures a dairy producer as to what the value is of the milk 
that they are marketing, based on how it is used. So it is 
vital that we have those conversations, and continue to educate 
the industry as a whole as to what it is that we offer within 
the system.
    We have had multiple, and I personally have had multiple 
conversations with producers from the northeastern part of the 
United States just discussing the unique marketing challenges 
that they face, and how best they can position themselves. One 
of the programs that USDA does have that has been providing a 
benefit, and adding a value to dairy producers and operations, 
is through the Dairy Business Innovation Initiatives. And these 
are opportunities for dairy producers to receive technical 
assistance and also to get some grants and some awards if they 
want to put in any kind of value-added production, or improve 
their efficiencies, whether it be for climate change, or just 
general marketing practices, et cetera. So, the DBIs are one 
very effective model that we have been using within AMS to 
assist all dairy producers, but with real focus on small- to 
medium-sized producers. Thank you.
    Ms. Kuster. Great. That is good to hear. I just want to 
quickly go back to the margin coverage. Do you see 
opportunities for better incorporating regional feed cost 
calculations into the program formulas?
    Mr. Marlow. We would be happy to engage in technical 
assistance with you on any proposed changes made to regional 
feed costs. We are happy to look at those issues as we move 
into the farm bill conversation.
    Ms. Kuster. Great.
    The Chairman. The gentlelady's time----
    Ms. Kuster. Thank you very much. With that I yield back.
    The Chairman. Yes, ma'am, thank you. And now the gentleman 
from Texas, Mr. Cloud, is recognized for 5 minutes.
    Mr. Cloud. Thank you very much, Mr. Chairman, and thank you 
all for being here to help us as we prep for the farm bill. Mr. 
Marlow, I wanted to ask you about the Dairy Margin Coverage 
Program. I talked to some dairy producers back in Texas, and 
Texas maybe tends to have some of the larger producers. Could 
you give me a rough estimate of how many farms are enrolled in 
Tier One, as opposed to Tier Two?
    Mr. Marlow. Approximately 60 percent of the farmers who 
enroll in DMC are in Tier One only, so about 40 percent are in 
Tier One and Tier Two.
    Mr. Cloud. Forty percent are in both? Or are in Tier Two?
    Mr. Marlow. Well--were you--you can----
    Mr. Cloud. Sixty percent are in Tier One?
    Mr. Marlow. You can enroll in Tier One for the first 5 
million pounds, and then Tier Two for the additional. So about 
40 percent of the producers who are in the program go beyond 
that 5 million pound limit.
    Mr. Cloud. Right. I have talked to some in Texas, and, even 
though they produce that much, some say they can hit that 5 
million mark in a matter of a couple weeks, but they don't 
enroll in Tier Two just because of the cost discrepancy. Can 
you speak to how that 5 million benchmark came into place, and 
whether that is a good figure or not?
    Mr. Marlow. I believe that that was in the original 
legislation that was provided to us, and so we work with that 
$5 million--I am sorry, 5----
    Mr. Cloud. Five million pound.
    Mr. Marlow.--million pound number.
    Mr. Cloud. Right.
    Mr. Marlow. We are happy to engage in a conversation about 
where that lands. It is approximately a 250 cow dairy for the 5 
million pound mark. That is really an approximate point.
    Mr. Cloud. Okay. I guess is it your estimation that that is 
a good amount? Would you recommend more? I mean, it--the ones I 
am talking to are saying it would be great if it was raised, 
but----
    Mr. Marlow. I think it is important to look at the 
combination of DMC with the Risk Management Agency programs as 
a combined safety net so it is not just DMC standing on its 
own, and those Risk Management Agency programs are also 
available to the larger scale operations. So they have the 
choice of either doing Tier Two, or going into the RMA 
programs, and looking at it there.
    Mr. Cloud. Okay. I wanted to ask you another question too, 
because probably the biggest thing I have heard from farmers 
over the last year has been just the ability to work with their 
local FSA field agents, and so I was curious if you can give us 
an update on the teleworking status? Are field agents back to 
work, what percentage, what is our status on that?
    Mr. Marlow. We continue to monitor COVID issues very 
closely. All of our staffing levels are based on the science of 
what the COVID levels are in their areas. We are across the 
board--and I don't have the number of specific offices, but 
almost across the board back to 100 percent staffing.
    Mr. Cloud. Yes. For practical purposes, we are almost 
full--okay.
    Mr. Marlow. Absolutely.
    Mr. Cloud. That really helps. I appreciate it. Thank you 
very much. That helps me. I appreciate it. Thank you, Mr. 
Chairman.
    The Chairman. Well, thank you, Mr. Cloud. And, Ms. Coale, 
Mr. Marlow, thank you. This concludes this part of our hearing 
today. Panel one, you all did a great job, thank you. And now, 
Panel one, you will be excused. We will take a 5 minute break 
to exchange panels, and then our second panel will appear in 5 
minutes. And so, for 5 minutes, we will stand in recess. Thank 
you.
    [Recess.]
    The Chairman. The Committee will come to order. First I 
want to welcome our second panelists, and to introduce our 
first witness on our second panel today, I am pleased to yield 
to the distinguished gentleman from Pennsylvania, my friend, 
the Ranking Member, Mr. Thompson.
    Mr. Thompson. Thank you very much, Mr. Chairman. It is my 
pleasure to introduce fellow Pennsylvanian, Ms. Lolly Lesher. 
Lolly, her husband William, and three of their children operate 
Way-Har Farms in southeastern Pennsylvania. The Leshers are 
seventh generation dairy producers, and have expanded their 
operation to sell milk and ice cream direct to consumers. She 
has been very active in the industry in numerous roles over her 
career, and is a current member of the DFA Resolutions 
Committee. Lolly, thank you so much for joining us today.
    The Chairman. And I thank the Ranking Member for his 
comments. To introduce our second witness, I am pleased to 
yield to the distinguished gentleman from California, the 
Chairman of the Livestock and Foreign Agriculture Subcommittee, 
Mr. Costa.
    Mr. Costa. Mr. Chairman?
    The Chairman. Yes, you are recognized.
    Mr. Costa. Can you hear me?
    The Chairman. Yes, I do. Go right ahead.
    Mr. Costa. Thank you very much, Mr. Chairman. I have the 
honor to introduce Mr. Mike Durkin, who has testified before, 
back by popular demand, I think. His experience and background 
I think is well known in the dairy industry across the country. 
He is the President and Chief Executive Offer of Leprino Foods, 
representing today the International Dairy Foods Association. 
Leprino Foods many of you are familiar with. They are the 
largest producer of mozzarella cheese in America, which makes 
them the largest in the world. They also export 20 percent of 
their products abroad, so he is very experienced in the 
challenges with the food supply chain that we have had in the 
last couple years as a result of the pandemic and other 
factors. But what they do is produce protein, lactose, and 
other dairy ingredients that are critical to our food supply 
chain, and I might also say baby food formula that they sell to 
processors.
    Leprino Foods has three plants in California, notably in 
the San Joaquin Valley, two in Lemoore, one in Tracy. It is the 
home of the largest cheese manufacturing facilities in the 
world. Mr. Durkin has a lot of experience in senior leadership 
roles. He holds a Bachelor Degree in Marketing and Finance from 
the University of Rhode Island, and a Master in Business and 
Finance from Pace University. We look forward to hearing from 
him again today, and I thank you for giving me the honor to 
introduce him.
    The Chairman. And our third witness is Mr. Travis Forgues, 
who is the Executive Vice President of Membership for Organic 
Valley from LaFarge, Wisconsin. And our fourth and final 
witness today is Dr. Marin Bozic, an Assistant Professor of 
Applied Economics at the University of Minnesota from St. Paul, 
Minnesota. And now, Ms. Lesher, please begin when you are 
ready.

 STATEMENT OF LAURA ``LOLLY'' LESHER, OWNER/OPERATOR, WAY-HAR 
  FARMS, BERNVILLE, PA; ON BEHALF OF NATIONAL MILK PRODUCERS 
                 FEDERATION, DAIRY FARMERS OF 
                            AMERICA

    Ms. Lesher. Thank you. Good morning. Chairman Scott, 
Ranking Member Thompson, thank you so much for the opportunity 
to testify. My name is Lolly Lesher. My husband William and I 
own and operate Way-Har Farms in southeast Pennsylvania. Our 
family has milked cows for seven generations, and in the past 
50 years we added a retail farm market so that we could sell 
our milk and ice cream directly to consumers. We milk 240 cows 
and are joined in the family business with three of our four 
children. I am proud to be a member-owner of Dairy Farmers of 
America, and I am testifying to you today on behalf of National 
Milk Producers Federation, of which DFA is a member.
    I am pleased to offer comments on the current dairy policy, 
but first a few words about the economic landscape. Growth in 
domestic consumption and exports have been very bright spots 
for us. Milk prices have reached an all-time high level earlier 
this year, but the increasingly high input costs are pinching 
our farmer margins. Just this year our family dairy farm has 
seen the cost of diesel fuel increase by 290 percent compared 
to 2019. This is a problem that is only getting worse.
    Prior to the 2018 Farm Bill, the dairy policy did not work 
as well as it does today. The previous Margin Protection 
Program was well intended, but did not provide an effective 
safety net, and dairy farmers did not have access to other risk 
management tools. So, the dairy farmers are very grateful for 
your work to reform dairy policy in the 2018 Farm Bill and the 
Bipartisan Budget Act of 2018 (Pub. L. 115-123). Being from 
Pennsylvania, I am particularly grateful to you, Ranking Member 
Thompson, for your advocacy. The Dairy Margin Coverage Program 
is much more effective and has worked well for farmers during 
these very difficult times.
    DMC worked well, as intended, last year, paid out over $1.1 
billion to farmers nationwide, including nearly $89 million to 
Pennsylvania producers. Our farm has consistently purchased the 
maximum available coverage, knowing that DMC may not pay out, 
but has served as a very much intended safety net when needed, 
and I was very happy to learn 71 percent of farmers have signed 
up. However, there is always room for tweaking. DMC's 
production history calculation is outdated, and barely 
relevant. It is critical that, moving forward, farmers can 
update this calculation to reflect current productions.
    The current standard of 2013 was a long time ago, and many 
farms have grown to meet market demands, or to allow children 
to join the family farm, just like my family farm did in 2015. 
To that end, we thank this Committee for enacting the 
Supplemental DMC to compensate farmers for modest production 
increases since 2014, and it is critical that this adjustment 
be carried forward in the 2023 Farm Bill. We also want to thank 
the Committee and USDA for ensuring DMC better reflects farmer 
feed costs by fully incorporating the dairy quality alfalfa 
into the feed formula. And, finally, we are grateful that 
other--like other producers, dairy farmers can now have access 
to other risk management tools, like Dairy-RP and LGM-Dairy.
    Just over a year after the current farm bill was signed, 
the COVID pandemic took a hold, and the entire country was 
impacted in hugely--ways. Dairy farmers never stopped producing 
our nutritious food, but we were not immune to the economic 
upheaval. The change made to the Class I mover in the last farm 
bill, combined with the government's heavy cheese purchase, 
cost dairy farmers over $750 million in Class I skim milk 
revenue in the last 6 months of 2020 alone. The Northeast 
Order, which includes much of Pennsylvania, lost over $141 
million, which is the largest share of any one particular 
Order. The pandemic was, of course, a shock for all of us, but 
it highlighted the need to improve the Federal Milk Marketing 
Order system.
    Fortunately, the dairy industry, through National Milk, is 
working hard to reach an industry-wide consensus on fixes that 
we can take to USDA for consideration via a national Order 
hearing. National Milk farmer-led Economic Policy Committee is 
examining multiple issues, including the asymmetric risk 
inherent in the Class I mover, and other areas. DFA is a member 
of the National Milk, and is actively participating in this 
process. We recognize that, for our efforts to succeed, we must 
all work together, giving a little bit to get a little bit. 
This is way too important for our future, and we look forward 
to working with the Committee and the broader industry to help 
these efforts advance.
    My written testimony touches on key issues outside of the 
dairy title. In particular, we urge continued support of the 
Dairy Donation Program, which helps provide needed dairy 
products to food-insecure families, and we also support the 
Healthy Fluid Milk Initiative projects, intended to increase 
consumption of milk and dairy foods. Again, I want to thank you 
for this opportunity to testify, and I will be happy to answer 
any and all questions.
    [The prepared statement of Ms. Lesher follows:]

 Prepared Statement of Laura ``Lolly'' Lesher, Owner/Operator, Way-Har 
Farms, Bernville, PA; on Behalf of National Milk Producers Federation, 
                        Dairy Farmers of America
    Chairman Scott, Ranking Member Thompson, Members of the Committee, 
thank you for the opportunity to testify before you today as the 
Committee reviews current dairy policy in advance of the upcoming farm 
bill.
    My name is Lolly Lesher. My husband William and I own and operate 
Way-Har Farms located in southeastern Pennsylvania. Our family has 
milked cows for seven generations and in the past 50 years added a 
retail farm market to sell our milk and ice cream directly to 
consumers. Way-Har Farms consists of 240 milking cows and 400 acres of 
corn, hay, triticale, and rye. Our farm market operation has a retail 
store and a wholesale business with distribution to over 70 different 
outlets. William and I are joined in the family business by three of 
our four children. We also volunteer in our local community by serving 
on our local food bank, county Holstein group, the dairy promotion 
committee, and the Pennsylvania Center for Dairy Excellence Foundation. 
I also serve on our local school board.
    I am proud to be a member-owner of Dairy Farmers of America (DFA) 
and to serve on the Cooperative's Policy Resolutions Committee. DFA is 
the nation's leading diversified milk marketing cooperative, owned and 
governed by 11,500 dairy farmer members across the country. DFA's 
family farmers are invested in 83 processing facilities that produce a 
wide range of dairy products, including fluid milk, cheese, butter, ice 
cream, and dairy ingredients.
    I am testifying before you today on behalf of the National Milk 
Producers Federation (NMPF), of which DFA is a member cooperative. NMPF 
develops and carries out policies that advance the well-being of dairy 
producers like me and the cooperatives we own. NMPF's member 
cooperatives market the majority of the U.S. milk supply, making NMPF 
the voice of tens of thousands of dairy producers on national issues.
    I am pleased to offer comments on current dairy policy as you 
prepare to craft the next farm bill. First, a word about the current 
dairy economic landscape. Overall, robust growth in both domestic 
consumption and cheese exports have been bright spots for the dairy 
sector. During the first quarter of this year, milk production 
nationwide was one percent lower than during the same time period last 
year. In this context, milk prices reached their highest-ever monthly 
level earlier this year, as measured by the U.S. average all-milk 
price. However, record or near-record high input costs, including 
fertilizers, are pinching dairy farmer margins, with many dairy farmers 
now facing diesel fuel shortages partly on account of Russia's invasion 
of Ukraine.
    When this Committee last began its work heading into the 2018 Farm 
Bill, dairy policy looked much different than it does today. The 
previous Margin Protection Program (MPP), while well-intended, fell 
short of providing the protection required of an effective farm safety 
net. MPP allowed farmers to insure against low margins--the gap between 
milk prices and feed costs--but did not offer affordable or meaningful 
coverage that accounted for the challenges producers endured. As a 
result, dairy farmers largely opted out of the program or only obtained 
the free catastrophic coverage. Further, unlike our counterparts who 
grow crops, dairy farmers did not have access to the risk management 
options that can help farmers meet their customized needs.
    Dairy farmers are grateful for the work this Committee did to 
reform the dairy safety net in both the 2018 Farm Bill and the 
Bipartisan Budget Act of 2018. As a Pennsylvania producer, I am 
particularly grateful to you, Ranking Member Thompson, for your years 
of advocacy on behalf of dairy farmers in the Commonwealth and beyond. 
The Dairy Margin Coverage (DMC) program is a significant improvement 
over its predecessor and has been a strong safety net for dairy farmers 
during difficult times. It offers producers affordable coverage for 
margin levels that reflect the milk price and feed cost challenges they 
face. DMC worked as intended in 2021, paying out well over $1.1 billion 
to participating farmers nationwide, including nearly $89 million to 
Pennsylvania producers, as they continued to weather the COVID-19 
pandemic. The program has provided important security to my family's 
farm, given the volatility that persists in dairy markets. We have 
consistently purchased the maximum available DMC coverage since 2019, 
at a margin of $9.50 per hundredweight, knowing that it may not pay out 
every year, but is intended to serve as a safety net when needed. I am 
glad that more than 71 percent of those dairy farmers who have DMC 
production history are enrolled in the program for 2022.
    However, as valuable as the program has been, many farmers have not 
been able to fully benefit because DMC's underlying production history 
calculation is outdated. It is critical that farms like mine and my 
neighbors have an opportunity to update their production history to 
reflect current on-farm production. 2013 is far too long ago, and other 
farm safety net programs do not use such an outdated production 
reference. Many farms have grown to meet market demands or to allow 
their children to join the farm. To that end, we thank this Committee 
for enacting Supplemental Dairy Margin Coverage payments to compensate 
farmers for incremental production increases since 2014, accounting for 
a nearly decade-old production history formula. It is critical that 
this production history adjustment be carried over into the 2023 Farm 
Bill so that DMC remains a viable safety net. We also appreciate USDA's 
actions to ensure that DMC more accurately reflects dairy farmer feed 
costs by fully incorporating dairy quality alfalfa into the DMC feed 
formula. We know this change would not have been possible without this 
Committee's work to require the Department to report dairy-quality 
alfalfa prices in its monthly price surveys.
    Finally, we are grateful that, on par with producers of other 
commodities, dairy farmers, large and small, now have access to both a 
Farm Service Agency-run safety net as well as Risk Management Agency 
tools, such as Dairy Revenue Protection (Dairy-RP) and Livestock Gross 
Margin-Dairy (LGM-Dairy), which give all farmers the ability to adapt 
their risk management to their needs. We are pleased that USDA recently 
approved several improvements to LGM-Dairy, including simplifying the 
purchase process to align it more closely with Dairy-RP and making the 
program available in all counties in every state. We also support 
further improvements, including permitting concurrent use of Dairy-RP 
and LGM-Dairy in the same month and allowing producers who already have 
revenue coverage through Dairy-RP to obtain LGM-Dairy coverage with 
premiums and indemnities solely driven by changes in feed input costs. 
We hope these adjustments can be made to further strengthen dairy 
farmer risk management options.
    Just over a year after the current farm bill was signed, the COVID-
19 pandemic took hold and, from the start, impacted our entire country 
in significant ways. While dairy farmers never stopped providing 
households with an abundant supply of nutritious milk and dairy 
products, we were not immune to the massive economic consequences of 
the pandemic. In particular, the combined effects of the change made to 
the Class I mover in the last farm bill and the government's heavy 
cheese purchases cost dairy farmers over $750 million in Class I skim 
milk revenue during the last 6 months of 2020. No one could have 
anticipated COVID-19 when the change was made to the mover, but the 
events of the last 2 years have shined a spotlight on the need for an 
overall update to the Federal Milk Marketing Order (FMMO) system.
    To recap, prior to the 2018 Farm Bill, the Class I mover was based 
on the higher of the Class III or Class IV price each month, commonly 
called the ``higher of'' formula. In an effort to accommodate a request 
for improved price risk management for processors, while also 
maintaining revenue neutrality for farmers, a compromise was reached to 
restructure the mover as the monthly average of the Class III and Class 
IV prices, with a $0.74/cwt. adjustment factor added to that average. 
The historical record from January 2000 through August 2017 indicated 
that this new mover would be revenue neutral for dairy farmers by 
maintaining essentially the same Class I skim milk revenue as the old 
mover. The new mover was enacted into law on the basis that farm-level 
revenue would be maintained.
    The new Class I mover took effect in May 2019, but the COVID-19 
pandemic dramatically undercut the revenue neutrality that formed its 
foundation. The Farmers to Families Food Box Program heavily weighted 
its dairy product purchases toward cheese, priced under Class III. This 
imbalance caused a wide chasm between the monthly Class III and Class 
IV prices, making the average of the two significantly lower than the 
``higher of'' the two, even with the $0.74/cwt. adjustment factor 
added. As a result, Class I skim milk prices averaged $3.56/cwt. lower 
during the second half of 2020 than they would have under the previous 
mover. This undermined the orderly marketing of milk and represented a 
net loss to dairy producers of more than $750 million during the latter 
half of 2020, including over $141 million in the Northeast Order, which 
includes much of Pennsylvania. Dairy farmers are grateful to USDA for 
creating the Pandemic Market Volatility Assistance Program to partially 
reimburse farmers for these losses. We urge Congress to provide 
additional funding to close the gap for those producers who were 
adversely impacted by the program's 5 million pound per producer 
limitation. Farmers incurred these losses on all their milk volume, so 
we thank the Members of this Committee who are working to secure this 
equitable support.
    However, work must also be done to avoid a repeat of this scenario 
in the future. Fundamentally, the current Class I mover saddles dairy 
farmers with asymmetric risk because it includes an upper limit on how 
much more Class I skim revenue it can generate for producers than the 
previous mover, but no lower limit on how much less can be generated 
than the previous mover. On this point, even 2 years later, the current 
mover has not made up for the 2020 losses because it is only moderately 
different from the previous mover and has not performed significantly 
better at any point. In other words, when the asymmetric risk inherent 
in the current mover causes non-trivial losses, as it did in 2020, 
those losses become effectively permanent.
    Fortunately, the dairy industry through the National Milk Producers 
Federation is treating this matter with urgency and is seeking to find 
consensus on not only the Class I mover, but also a range of 
improvements to the FMMO system that we can take to USDA for 
consideration via a national Order hearing. DFA is a member of NMPF and 
is actively participating in its process, which involves careful 
examination of key issues to the dairy sector nationwide. NMPF's 
producer-led Economic Policy Committee has been meeting to discuss 
several FMMO updates, and we are grateful to Congress and USDA for 
their support during this process. The dairy industry recognizes that 
to successfully enact policies that are better than those we have in 
place today, we must work together with the goal of achieving 
consensus. We look forward to working with the broader dairy industry 
and Members of this Committee as our efforts advance.
    I would like to highlight several other areas of great significance 
to dairy. First, dairy producers are long-time environmental stewards 
who tend with great care to our land, water, and other natural 
resources. As a testament to dairy's endeavors, research shows that 
producing a gallon of milk in 2017 required 30% less water, 21% less 
land, had a 19% smaller carbon footprint, and produced 20% less manure 
than it did in 2007. However, we always believe that more can be done, 
and, as a result, have set industry-wide goals of becoming greenhouse 
gas neutral or better, improving water quality, and optimizing water 
use by 2050. Conservation programs like the Environmental Quality 
Incentives Program are key as we work to continue our ongoing 
sustainability efforts. Enhanced funding will help dairy farmers scale 
up innovative climate smart practices, such as new approaches to both 
feed and manure management, especially as these popular programs are 
currently oversubscribed.
    Second, trade is critical to our success as farmers. Today, exports 
account for 17% of our production and are likely to comprise an even 
greater share as global dairy demand continues to grow. Trade promotion 
programs like the Market Access Program and the Foreign Market 
Development program promote American-made dairy and agriculture 
products that compete with heavily subsidized foreign products, 
returning well over $20 in export revenue for every $1 dollar invested 
in the programs. We support doubling funding for both essential 
programs to better promote U.S. dairy products worldwide. In addition, 
we hope to work with this Committee to combat the European Union's 
efforts to restrict the use of common food names in markets around the 
world. These efforts are a trade barrier plain and simple, and they 
must be stopped.
    Third, dairy farmers appreciate the enduring connection between 
agriculture and nutrition. Dairy is a nutrition powerhouse, serving as 
an excellent source of 13 essential nutrients, but continues to be 
under consumed according to the most recent Dietary Guidelines for 
Americans. I thank you, Ranking Member Thompson, for authoring the 
bipartisan Whole Milk for Healthy Kids Act to allow schools to offer 
students all varieties of milk, including whole milk, and I also thank 
you, Chairman Scott, and others on this Committee for supporting this 
effort. In addition, nutrition programs like the Supplemental Nutrition 
Assistance Program are vital to linking the food we produce as farmers 
to families across the country facing difficult circumstances. Finally, 
we strongly encourage robust support for the Dairy Donation Program to 
provide nutritious dairy products to food-insecure families and 
minimize food waste. We also look forward to working with this 
Committee on any additional enhancements that will help the program 
meet its goals.
    Fourth, in recent years, farmers have endured one difficult year 
after another. Stress in rural America continues to be a major problem 
that grips many of our communities. I am thankful to this Committee for 
working in the previous farm bill to reauthorize the Farm and Ranch 
Stress Assistance Network, which aims to connect those working in 
agriculture to stress assistance and behavioral and mental health 
support programs. We thank the Members of the Appropriations Committee 
for providing the needed funding and hope those efforts can be 
increased in the future.
    I will close with two issues that are outside of this Committee's 
jurisdiction, but critically important to dairy producers. First, dairy 
farmers across the country are facing acute shortages of workers even 
as they work to provide sustainable nutrition for all Americans at a 
time of rising food costs. However, unlike the rest of agriculture, the 
dairy industry is unable to use the H-2A seasonal agricultural worker 
visa program because of the year-round nature of dairy production. We 
strongly urge Congress to enact long-needed legislation to allow dairy 
to meaningfully access H-2A, and to provide current agricultural 
workers and their families with permanent legal status. The House 
passed the bipartisan Farm Workforce Modernization Act last spring to 
achieve these goals, and we continue to urge the Senate to produce an 
improved version of this bill that can earn 60 votes and be signed into 
law. Separately, while this Committee does not oversee the Food and 
Drug Administration, it is critical that the agency finally enforce 
dairy standards of identity to combat the proliferation of imitation 
products attempting to use dairy's positive reputation in the 
marketplace when these products are not nutritionally equivalent to 
real dairy.
    Thank you again for the opportunity to testify before you. I am 
happy to answer any questions you may have, and I invite any of you 
traveling through Pennsylvania to stop by Way-Har Farms or visit our 
market for homemade ice cream.

    The Chairman. Thank you. And now, Mr. Durkin, please begin 
when you are ready.
    Mr. Durkin. Is it on? Okay.
    The Chairman. Yes. Go right ahead.

         STATEMENT OF MIKE DURKIN, PRESIDENT AND CHIEF 
EXECUTIVE OFFICER, LEPRINO FOODS COMPANY, DENVER, CO; ON BEHALF 
                 OF INTERNATIONAL DAIRY FOODS 
                          ASSOCIATION

    Mr. Durkin. Good afternoon, Chairman Scott, Ranking Member 
Thompson, and Members of the House Committee on Agriculture. My 
name is Mike Durkin, and I am the President and CEO of Leprino 
Foods, and I am here to testify on behalf of the International 
Dairy Foods Association and our company. IDFA represents the 
dairy manufacturing and marketing industry and its members, 
including independent processors, farmer-owned cooperatives, 
retailers, and marketers. Leprino Foods, a family-owned 
privately held company, is headquartered in Denver, Colorado, 
with over 4,500 employees in California, Colorado, New Mexico, 
Michigan, Pennsylvania, and New York. Leprino is the largest 
independent buyer of milk in the United States, supporting over 
1,000 dairy farms, and we are also the world's largest producer 
of mozzarella cheese, and a leading supplier of dairy nutrition 
products, including lactose and whey.
    As the Committee begins to discuss how the next farm bill 
can bring help to the U.S. dairy industry, I would like to put 
forward three policy recommendations and raise awareness of a 
concern for the Committee's consideration. These 
recommendations were developed by IDFA's Economic Policy 
Committee. The Association's Boards of Directors, which include 
proprietary processors and dairy cooperative leaders, voted 
unanimously to support these recommendations.
    First--we also ask the Committee to reauthorize and expand 
the Healthy Fluid Milk Incentives Projects Program. This 
program requires USDA to test different methodologies to 
encourage SNAP participants to purchase more dairy products. 
Under the program, when a SNAP beneficiary uses their benefits 
to purchase qualifying fluid milk, they also receive a dollar-
for-dollar coupon that can be used to purchase more fluid milk, 
or another qualifying dairy product. Pilots were launched last 
year at grocery stores in Texas, and more pilots are coming 
online this month in New Jersey. In addition, the USDA is 
expected to award funding by October that will allow 
approximately 250 new pilots across many regions. In the next 
farm bill we hope Congress will agree to expand this program to 
include yogurt and cheese, as well as additional fluid milk 
options. Expanding the program would help more SNAP families 
achieve positive health outcomes by increasing their dairy 
consumption.
    Second, IDFA supports a permanent authorization of the 
Dairy Forward Pricing Program. This program allows producers to 
enter into forward-priced contracts with milk buyers for milk 
used to manufacture Class II, III, and IV products. This 
program expires on September 30, 2023, which means that no 
forward priced contracts may be entered into after that date. 
Making this program permanent could facilitate greater 
utilization of the risk management tool because it would 
mitigate concerns due to the program's pending expiration date. 
Given this program has nearly universal support among producers 
and processors, we recommend Congress make this risk management 
tool permanent.
    Third, and most important to Leprino, and all processors, 
we ask that Congress require USDA to conduct regular cost of 
processing studies to generate industry data to develop 
proposals to adjust make allowances. The Federal Milk Marketing 
Order System sets the minimum milk price regulated processors 
must pay. Since 2000 the system directly transfers the market 
value of products to dairy producers, while processors retain 
only the assumed cost of manufacturing, or the make allowance. 
Current make allowances have not been adjusted in 15 years, and 
do not reflect the cost of manufacturing today's dairy 
products. Our industry is in this position in part because only 
two cost studies have been commissioned since 2000. Ironically, 
the most recent survey is also out of date because it excludes 
recent significant supply chain and inflation impacted data.
    In addition, only \1/3\ of the eligible plants participated 
in the most recent survey, so the cost information collected 
may not reflect the true cost of producing dairy products. 
Congress can improve this ad hoc system by directing USDA to 
conduct regular cost of processing studies to enable regular 
make allowance updates. In addition, Congress should require 
that plants reporting pricing data to USDA participate in these 
cost surveys. This will ensure the resulting data reflects 
plants of different sizes and regions.
    Related to this last request, I would like to discuss an 
increasingly urgent issue shared by the dairy producers and 
their processor partners, and that is the regulated pricing 
formulas. Current make allowances based on 2007 costs are 
woefully out of date. Coupled with ongoing inflationary 
pressures, the need to address this lag is increasingly urgent. 
While our proposal for USDA to conduct regular cost surveys 
will help in the longer-term, excuse me, the steps must be 
taken now to ensure adequate processing for capacity remains. 
Updates to the system will help ensure nutritious dairy 
products remain affordable to American consumers and exports 
beyond.
    While processors and dairy cooperatives are working 
together, Secretary Vilsack has stated that USDA will not 
convene a Federal Milk Marketing Order unless the industry 
reaches consensus on a proposed solution. Proper resolution via 
a hearing remains urgent for our dairy industry, so your 
support of this process will be greatly appreciated. Thank you 
for the opportunity to appear before you today. I am happy to 
answer any questions you may have.
    [The prepared statement of Mr. Durkin follows:]

   Prepared Statement of Mike Durkin, President and Chief Executive 
Officer, Leprino Foods Company, Denver, CO; on Behalf of International 
                        Dairy Foods Association
    Good morning, Chairman Scott, Ranking Member Thompson, and Members 
of the House Committee on Agriculture. My name is Mike Durkin. I am 
President and CEO of Leprino Foods Company, and I am here to testify on 
behalf of the International Dairy Foods Association and our company. As 
a member of IDFA, I serve as Vice Chair of the Cheese Board and as a 
member of the Ingredients Board and IDFA Executive Council.
    IDFA represents the United States' dairy manufacturing and 
marketing industry, which supports more than 3.3 million jobs that 
generate $41.6 billion in direct wages and $753 billion in overall 
economic impact for the U.S. economy. IDFA's diverse membership ranges 
from multinational dairy organizations to single-plant companies and 
small businesses. IDFA members include dairy companies with familiar 
branded products and companies that co-pack for other brands and 
private-label products. IDFA members also range from farmer-owned 
cooperatives and independent processors to food retailers and 
suppliers. Together, IDFA members represent 90 percent of the milk, 
cheese, ice cream, yogurt and cultured products, and dairy ingredients 
produced and marketed in the United States and sold throughout the 
world.
    Leprino Foods, a family-owned and privately held company, is 
headquartered in Denver, Colorado and has over 4,500 employees in the 
U.S. in six states including California, Colorado, New Mexico, 
Michigan, Pennsylvania, and New York. We will soon begin building an 
additional plant in Texas. Leprino is the largest buyer of milk in the 
United States supporting over 1,000 dairy farms. Our critical business 
partners include Dairy Farmers of America and Michigan Milk Producers 
Association. We are the world's largest producer of mozzarella cheese, 
and a leading supplier of dairy nutrition products, including lactose 
and whey. Leprino exports 26% of our milk equivalent volume to over 55 
countries, well above the industry average of 16%. I testified in front 
of this Committee in November on the impact of supply chain challenges 
on our company and the dairy industry. I can tell you that those 
challenges persist today coupled with rising inflation and a continued 
shortage of workers throughout the dairy supply chain.
State of the U.S. Dairy Industry
    Taken together, 2020 and 2021 were two of the strongest years on 
record for dairy sales and among the most challenging in terms of 
having a workforce to operate.
    We are experiencing strong demand domestically across all segments 
and surging demand around the world for American dairy products.
    Domestic demand remains very strong. In 2020 according to USDA 
data, the average American consumed 655 pounds of dairy in milk, 
cheese, yogurt, ice cream, butter, and other wholesome and nutritious 
dairy foods, demonstrating a resilient and growing love for all things 
dairy. The 2020 figure represents an increase of 3 pounds per person 
over the previous year and set a new consumption record. Ice cream 
continued to rebound and grew by 4% year-over-year in 2020. Meanwhile, 
yogurt consumption jumped 3% and butter notched a 2% increase. Milk and 
cheese remained resilient throughout 2020 despite the closure of 
restaurants, cafes, schools, and other institutions that drive demand. 
Since USDA began tracking dairy consumption in 1975, per capita 
consumption has grown 22%.
    Americans now consume more dairy food products than dairy beverage 
products. We include dairy in more meal occasions as well as for 
fitness and recovery, to live a healthy life, and to celebrate special 
moments. With a greater focus on healthy and sustainable foods, U.S. 
dairy product consumption could continue growing well into the future.
Nutrition, Health & Wellness
    On the whole, dairy foods remain a good buy for the American 
consumer when compared to other categories including meat and fish, 
fruits and vegetables, and baked goods. Good nutrition is the 
foundation of health and wellness, and dairy is a crucial part of a 
healthy diet beginning at a very young age. In fact, no other type of 
food or beverage provides the range and density of nutrients that dairy 
contributes to the American diet. Cow's milk alone has been found to 
rehydrate the body better than water and delivers 13 essential 
nutrients that everyone needs to stay healthy. Overall, dairy provides 
numerous health benefits, including better bone health along with a 
lower risk of type 2 diabetes and cardiovascular disease. Dairy 
products also play an important role in the diet of children, where 
dairy is the top source of calcium, potassium, and vitamin D in kids 
ages 2-18. The 2020-2025 Dietary Guidelines for Americans affirmed the 
unrivaled contribution made by dairy foods and reminded Americans that 
a healthy diet includes three daily servings of low-fat and fat-free 
dairy. However, the DGAs also found that 90% of Americans do not 
consume the recommended amount of dairy, including school-aged 
children. Dairy products play a critical role in the diet of children, 
where milk is the top source of calcium, potassium, phosphorus, and 
vitamin D in kids ages 2-18. Case in point: 73% of the calcium 
available in the food supply is provided by milk and milk products; and 
milk is the number one source of protein in the diets of children ages 
2 to 11. It is therefore important that this Committee do everything it 
can to develop laws and support agency policies that promote greater 
consumption of milk and dairy foods to fulfill critical nutrition gaps 
in our population.
    Before the pandemic, approximately 100,000 schools served nearly 30 
million students as part of the Federal school meals programs. School 
meals offer the most important opportunity of the day for children to 
get the essential nutrients they need, and dairy foods--including milk, 
yogurt, and cheese--are critical building blocks for a child's health 
and development. At present, USDA is developing updated school meal 
standards consistent with the DGAs, and we can only hope that USDA will 
follow its own dietary guidance and continue to make dairy central to 
child nutrition. An overall decline in school milk consumption has been 
identified in recent years, particularly after whole milk and low-fat 
flavored milk options were removed from school meals 10 years ago. USDA 
can begin to reverse the trend by providing options that kids want to 
consume while maintaining alignment with the DGAs. More varieties of 
milk, including low-fat flavored milks, help to increase overall meal 
consumption and thereby ensure students are getting the nutrients they 
need, including calcium, vitamin D and potassium.
    IDFA and dairy processors greatly appreciate the broad, bipartisan 
support among Members of Congress for maintaining low-fat flavored milk 
as a school meal option. This support has been demonstrated through 
sign-on letters to USDA, cosponsorship of the School Milk Nutrition Act 
(H.R. 4635) and the Whole Milk for Healthy Kids Act (H.R. 1861) and 
adoption of Agriculture Appropriations protections of low-fat, flavored 
milk in the FY21 Omnibus Appropriations Act and in both the House and 
Senate FY22 Agriculture Appropriations bills leading up to USDA's 
``Bridge Rule'' which was released in February 2022.
    The Special Supplemental Nutrition Program for Women, Infants and 
Children (WIC) provides nutritious foods to supplement the diets of 
low-income women who are pregnant, postpartum, and breastfeeding, as 
well as children up to age 5 who are at nutritional risk. As Congress 
and USDA consider updates to WIC, we would like to see an update to 
WIC's Supplemental Food Package that maintains the quantities of milk 
and other dairy foods but includes flexibility in the varieties of milk 
and in package-sizing, such as yogurt, within the current allowed food 
categories that reflect WIC participants' preferences and market 
availability and allow WIC families to maximize benefit redemption.
    The Supplemental Nutrition Assistance Program (SNAP) is the 
nation's most important anti-hunger program, reaching 38 million people 
nationwide in 2019. According to USDA SNAP purchase data published in 
2016, 5 of the top 20 products purchased with SNAP benefits are dairy 
products. The Healthy Fluid Milk Incentives Projects, established in 
the 2018 Farm Bill is allowing participants to buy more milk and help 
them to make nutritious choices that support a healthy lifestyle. We 
appreciate the Committee recognizing dairy nutrition in SNAP through 
incentives, and we would like to see this program reauthorized and 
expanded to additional milk and nutritious dairy products in the next 
farm bill and will provide further detail on that later in my remarks.
    Dairy products also play an important role at America's food banks, 
meeting food and nutrition needs for millions of Americans each week. 
In those settings, fresh fluid milk, cheeses, yogurt, and other dairy 
products are in high demand. While USDA has made changes to include 
more refrigerated dairy products procured for food banks and improved 
the procurement process, additional investments must be made to ensure 
adequate cold storage and refrigeration to protect perishable food is 
available to food banks throughout the country--especially in rural 
areas.
Trade & Global Competitiveness
    As the world population grows by another two billion people by 2050 
and continues to develop economically, the demand for protein and 
improved diets will increase the demand for dairy products. Dairy foods 
are uniquely positioned to meet the nutritional needs of a growing 
world with more disposable income and an appetite for higher-protein 
products. This will mean increased opportunities for global trade in 
dairy.
    Recent estimates show that the United States now exports more dairy 
production than we consume in the form of fluid milk. There has never 
been a time when trade was more important to the U.S. dairy industry 
than it is today. Companies (including producer-owned cooperatives) in 
the U.S. dairy exporting community are committed to doing as much as 
possible as efficiently as possible to support our long-term global 
business relationships and maintain our presence in global markets. We 
recognize that once lost, our market share will quickly go to 
competitors in producing countries such as those in Europe or New 
Zealand and is unlikely to be regained given their preferential tariff 
advantage over the U.S. Looking ahead, with the potential to 
continually increase production, we believe that global U.S. dairy 
opportunities abound if we can develop strong trade deals that level 
the tariff and market access playing field with our international 
competitors. Given the abundant resources and tremendous ingenuity and 
efficiency of American agriculture, USDA predicts an additional 25 
billion pounds of milk could be produced in the United States by 2030. 
Based on current consumption trends, we would need to export 40% of 
that increase in production for dairy farming and processing to remain 
economically viable. If we do not build our globally competitive market 
access now through reduced tariffs, competitive prices, and consistent 
shipping, our producers will be unable to grow. There is hardly a more 
critical priority for the U.S. dairy industry than trade.
    We applaud the U.S. Government's announcement that it will once 
again initiate consultations, the first step in a formal dispute 
settlement case, over Canada's continued manipulation of dairy tariff 
rate quotas (TRQs) in violation of Canada's commitments under the 
United States-Mexico-Canada Agreement (USMCA). Our government must stay 
the course and hold Canada accountable.
    We would also like to see the current Administration take immediate 
action to improve our commercial relationship with China by removing 
retaliatory tariffs and committing to maintain the gains made for U.S. 
dairy exporters under Phase One of the U.S.-China Agreement. Becoming 
the dairy exporter of choice to China and it is 1.4 billion citizens 
remains in America's long-term interest.
    In addition to needing a rules-based system of trade and fair flow 
of goods with trading partners, U.S. dairy urges the reauthorization of 
Trade Promotion Authority (TPA) in Congress as soon as possible. TPA 
will allow the current Administration to pursue trade deals and 
preferential market access for our exporters, benefitting U.S. 
producers, workers, and our economy.
Supply Chain Challenges
    I mentioned record exports for U.S. dairy to meet rising demand 
around the world. Today, congestion at U.S. ports is starting to ease. 
In April, container volume at the ports of Los Angeles and Oakland 
declined 6% and 15% year over year, respectively, though activity in 
the Port of Long Beach ticked up 10%. The number of ships moored at 
port has fallen from nearly 100 at the beginning of the year to below 
30 today, close to the pre-pandemic average. On the other hand, East 
Coast ports are seeing much more traffic than usual as retailers try to 
diversify their supply chains. We are still seeing high volumes of 
empty containers leaving our ports, however. In Los Angeles, 36% of 
containers leaving the port are empties, compared to 28% before the 
pandemic. We are pleased to see USDA offering cash compensation in the 
Port of Oakland to shipping companies willing to fill empty containers 
with U.S. agricultural products and move them to destinations offshore. 
One company, CMA CGM, a French ocean carrier, has been proactively 
working on solutions with the industry along with the Port of LA. 
Altogether, these new efforts are making a difference.
    An alliance between the Port of Los Angeles, CMA CGM, and IDFA 
members has led to improved movement of U.S. dairy exports through the 
Port of LA. This partnership has led to additional space and equipment 
allocated to IDFA members through the Port of Los Angeles as well as 
the prioritization of U.S. dairy exports for shipment to destinations 
in East and Southeast Asia, especially China, Vietnam, Thailand, and 
South Korea.
    I want to thank Congress for its recent bipartisan passage of the 
Ocean Shipping Reform Act (OSRA), demonstrating that Congress can 
indeed work together to provide important tools to address supply chain 
bottlenecks plaguing U.S. dairy and food exports. The Ocean Shipping 
Reform Act will provide real, long-term solutions for the myriad issues 
congesting U.S. ports and slowing U.S. dairy exports. The bill places 
limits on ocean carriers' ability to decline export cargo and when 
demurrage can be charged, helping to get U.S. dairy exports on the 
water in a timelier manner. It also strengthens the oversight authority 
of the Federal Maritime Commission over ocean carriers, the majority of 
which are foreign owned.
Workforce & Immigration
    At the end of the day, many of our production and supply chain 
challenges rest upon the worker shortage plaguing our nation's economy, 
which underscores the continuing need for comprehensive immigration 
reform. Today, the number of job openings is greater than the number of 
unemployed. We have nearly 5.4 million more jobs than unemployed 
Americans. The number of job openings hit 11.4 million in April. For 
the past few months, 4.4 million Americans have quit their jobs each 
month. The U.S. cannot meet demand for seasonal workers either, 
although the government has made available an additional 35,000 H-2B 
visas for temporary nonagricultural workers through the remainder of 
fiscal 2022--nearly twice the cap for this program. American employers 
had 127,000 seasonal employment opportunities they could not fill 
according to the most recent data. Further, as dairy is a 24/7 year-
round enterprise, seasonal worker programs fail to serve as a source of 
labor for our industry.
    By one calculation,\1\ the U.S. workforce today has two million 
fewer immigrants than it would have if immigration had continued at 
pre-pandemic levels. That is bad news for U.S. agriculture, where 
immigrants make up \3/4\ of the workforce. We need an immigration 
system that works for all sectors of our economy, that responds to our 
worsening workforce challenges, and treats people fairly and equitably. 
One solution would be to pass legislation to fix America's broken 
immigration system and create a guestworker program that works for the 
broader food industry, including non-seasonal commodities like dairy. 
In addition, it is critical that any immigration legislation include 
processing jobs to prevent disruptions along the supply chain from the 
farm to the plant. I know this Committee can help lead the charge on 
comprehensive immigration reform--you will have a partner in U.S. 
agriculture and food production--and I encourage you to continue to 
work to advance this important policy priority.
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    \1\ https://econofact.org/labor-shortages-and-the-immigration-
shortfall.
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Sustainability
    Collectively, the U.S. dairy industry has committed significant 
resources to achieve ambitious environmental stewardship goals, 
including greenhouse gas neutrality, optimized water use, and improved 
water quality by 2050. In fact, dairy companies and processors that 
have voluntarily signed onto the U.S. dairy industry's Stewardship 
Commitment represent 75% of U.S. milk production. As an industry, U.S. 
dairy produces twice as much milk with half as many cows on half as 
much land as it did 50 years ago. Over that time, water usage decreased 
by 65% and dairy's carbon footprint shrunk by 63%. Since this data was 
gathered in 2007, U.S. dairy has continued to reduce water usage and 
carbon and methane emissions throughout its supply chain. When writing 
the next farm bill, this Committee should ensure U.S. dairy remains 
part of the solution to mitigating and reversing climate change by 
continuing to have access to voluntary, incentive-based funding 
opportunities that generate streams of revenue for producers while 
caring for the environment.
Farm Bill Priorities
    As the Committee begins to discuss how the next farm bill can help 
the U.S. dairy industry grow and prosper, we would like to put forward 
three policy recommendations for the Committee's consideration. These 
recommendations were developed by IDFA's economic policy committee 
after several months of careful review and deliberation. Just last 
month, the association's boards of directors, which include both 
proprietary processors as well as dairy cooperative leaders, voted 
unanimously to support each of these recommendations.
Authorize USDA to Conduct Regular Cost of Processing Studies
    Since 2000, USDA's Agricultural Marketing Service (AMS) has twice 
commissioned a university to survey U.S. dairy processors to estimate 
the average cost of manufacturing a pound of the four dairy commodity 
products (cheddar cheese, butter, dry whey, and nonfat dry milk) used 
in Federal Milk Marketing Order price formulas. The results of the cost 
surveys typically serve as the basis for changing make allowances 
pursuant to a Federal Order hearing. The first cost study was completed 
in support of a milk price hearing held in 2006 and 2007, whose results 
were implemented in October 2008. The milk price formulas established 
at that time are the formulas that remain in place today. The costs in 
that formula dramatically understate today's cost of manufacturing and 
have resulted in distortions to the dairy manufacturing sector which 
have constrained capacity to process producer milk. This was manifested 
in an extended period of milk production surpassing local processing 
capacity in the Northeast and Michigan, high transport costs to move 
milk out of those regions for processing, and, in the extreme, dumped 
milk that was only solved when dairy cooperatives constrained their 
members' production and invested in additional manufacturing capacity 
themselves.
    The current ad hoc cost study program and price formula updating 
mechanism does not serve the needs of today's U.S. dairy industry. In 
the first place, cost studies are conducted very infrequently at the 
Federal level. As stated above, there have only been two national cost 
studies since 2000, the one for the mid-2000's hearing and a recently 
completed survey in 2021 that is already out-of-date because the data 
is based 2018-2020 costs, before the supply chain issues and 
inflationary surge that has occurred in 2021 and 2022. As a result, the 
15 year old make allowances do not reflect the cost of manufacturing 
today's finished dairy products.
    Second, because participation in these cost studies is currently 
voluntary, just over a third of the plants eligible to submit data for 
the most recent cost survey chose to do so.\2\ That means the cost 
information collected may not accurately reflect the true cost of 
producing products at different size plants and in various regions of 
the country. Increasing the participation rate in future studies will 
yield data that better reflects current economic conditions and has 
more credibility among various industry stakeholders.
---------------------------------------------------------------------------
    \2\ A total of 153 dairy plants were invited to submit data for the 
most recent USDA cost of processing study. Ultimately, data was 
provided by 10 cheddar cheese plants; 8 dry whey plants; 27 nonfat dry 
milk plants; and 12 butter plants for a total of 57 plants.
---------------------------------------------------------------------------
    Congress can improve the current situation by directing USDA to 
conduct regular cost of processing studies to enable regular make 
allowance updates. (These studies could be similar to the state-wide 
studies conducted by the California State Department of Food and 
Agriculture before California entered the Federal Order system in 
2018.) In addition, Congress should direct USDA to collect cost 
information from any dairy processing plant that already provides 
pricing data under the Dairy Product Mandatory Reporting Program for 
the four products contained in current pricing formulas. This will 
ensure the resulting cost information reflects plants of different 
sizes and in different regions of the country.
    Given the regulated pricing system, regular cost of processing 
updates will provide the dairy industry with valuable information to 
enable regular make allowance updates, remain viable and be positioned 
to grow in-line with market opportunities in the U.S. and around the 
world.
Reauthorize and Expand the Healthy Fluid Milk Incentives Projects 
        (HFMIP)
    Congress adopted a Healthy Fluid Milk Incentives Projects in the 
2018 Farm Bill authorizing USDA to test different methodologies to 
encourage participants in the Supplemental Nutrition Assistance Program 
(SNAP) to increase their purchases of fluid milk products as 
recommended by the Dietary Guidelines for Americans (DGAs).\3\ 
Approximately 90 percent of all Americans do not meet current U.S. 
recommendations for dairy consumption and only 65 percent of young 
children, 34 percent of adolescents, and about 20 percent of adults 
drink milk daily.\4\ As discussed earlier in my testimony, under-
consumption of dairy products can contribute to negative health 
outcomes for Americans in all life stages, including SNAP 
beneficiaries.
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    \3\ Section 4208 of Public Law 115-334, the Agriculture Improvement 
Act of 2018, December 20, 2018.
    \4\ Dietary Guidelines for Americans, 2020-2025, p. 33.
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    Purchase incentive programs, like the HFMIP, can help combat this 
trend by providing SNAP participants with financial encouragement to 
purchase healthy food for their families. Similar to the Gus Schumacher 
Nutrition Incentive Program (GusNIP) for fruits and vegetables, the 
HFMIP provides SNAP households with financial incentives when they 
purchase qualifying fluid milk at authorized retailers. For example, 
when a SNAP beneficiary uses his/her benefits to purchase qualifying 
fluid milk, they receive a dollar-for-dollar coupon or point of sale 
credit that can be used to purchase another fluid milk or qualifying 
dairy product.
    The Baylor Collaborative on Hunger and Poverty has been selected by 
USDA to administer the HFMIP program. The initial four pilots were 
launched in Texas in May 2021 with another pilot added in September 
2021. Nine more pilots were initiated earlier this month (eight in New 
Jersey and one in Texas) and another expansion of the program, which 
would include 33 additional retail outlets, is scheduled to begin in 
January 2023. In addition, USDA is expected to award additional funding 
by October that should allow approximately 250 new pilot projects 
targeting more regions of the country and different types of retailers, 
including convenience stores, rural retail chains and urban bodegas 
that are licensed to participate in SNAP.
    USDA will be providing Congress with a report on this program by 
the end of 2022 but based on what we have observed in the initial 
pilots, our industry believes that the program should be reauthorized 
with dedicated funding, and that the program should be expanded to 
include other nutritious dairy products, like cheese and yogurt. 
Expanding the program would help more SNAP families achieve positive 
health outcomes due to increased dairy consumption. In addition, we 
would urge Congress to expand the definition of qualifying fluid milk 
products to include two percent and whole milk varieties given that 
more than 80 percent of American consumers choose these varieties in 
the grocery store. Dairy products of all fat levels add important and 
under-consumed nutrients to the diet, while an increasing number of 
peer-reviewed research shows that higher fat dairy products do not have 
a negative effect on risk of obesity, cardiovascular disease or 
cardiometabolic risk markers.5-7 
---------------------------------------------------------------------------
    \5\ Vanderhout S.M., Aglipay M., Torabi N., Juni P., da Costa B.R., 
Birken C.S., O'Connor D.L., Thorpe K.E., and Maguire J.L. Whole milk 
compared with reduced-fat milk and childhood overweight: a systematic 
review and meta-analysis. Am. J. Clin. Nutr. 2019; 00: 1-14.
    \6\ O'Sullivan T.A., Schmidt K.A., and Kratz M. Whole-Fat or 
Reduced-Fat Dairy Product Intake, Adiposity, and Cardiometabolic Health 
in Children: A Systematic Review. Adv. Nutr. 2020; 00: 1-23.
    \7\ Duarte C., Boccardi V., Amaro Andrade P., Souza Lopes A.C., 
Jacques P.F. Dairy versus other saturated fats source and 
cardiometabolic risk markers: Systematic review of randomized 
controlled trials. Crit. Rev. Food Sci. Nutr. 2021; 61: 450-61.
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Permanently Authorize the Dairy Forward Pricing Program
    Congress originally authorized the Dairy Forward Pricing Program in 
the 2008 Farm Bill, and it has been reauthorized in every farm bill 
since then. This program allows producers to voluntarily enter into 
forward price contracts with handlers for pooled milk used to 
manufacture Class II, III, or IV products. Current authority for this 
program expires on September 30, 2023. This means that no forward price 
contracts may be entered into under the program after that date, and no 
forward contracts under the program may be extended beyond September 
30, 2026.
    Making this program permanent could facilitate additional industry 
utilization of this risk management tool because it would mitigate 
concerns from potential parties regarding forward contracts with 
shorter durations due to a pending program expiration date. Failure to 
extend the program will remove a valuable risk management tool which is 
now available to producers and processors. Given that this program has 
nearly universal support among producers and handlers (buyers), we 
would recommend that Congress make this program permanent to make it an 
even more attractive risk management tool for our industry.
Dairy Donation Program
    Mr. Chairman, we would also like to express our support for the 
Dairy Donation Program that was authorized as part of the Consolidated 
Appropriations Act of 2021. The purpose of this program is to 
facilitate the timely donation of eligible dairy products to food-
insecure families and to prevent and minimize food waste. The Act 
provided $400 million to fund this program.
    Since the start of the COVID-19 pandemic, U.S. dairy producers and 
dairy foods companies have led efforts to feed the hungry and support 
struggling communities. The Dairy Donation Program has provided our 
industry with one more tool to reach Americans in need. The dairy 
industry welcomes the opportunity to continue to partner with 
nonprofits, charities, and other organizations working to combat hunger 
and nutrition insecurity. The Dairy Donation Program helps to ensure 
high-quality, nutritious products like milk, cheese, yogurt and more 
will get to those who need them most, while ensuring dairy foods 
processors receive a fair market value for their healthy products.
Milk Pricing
    While the of focus of this hearing is on dairy programs authorized 
in the farm bill, I would like to briefly discuss an important and 
increasingly urgent issue of shared interest for both dairy producers 
and their processor partners. To ensure our industry can continue to 
grow and prosper, regulated milk pricing formulas must be addressed.
    Developed in the 1930s, USDA maintains the Federal Milk Marketing 
Order System that sets minimum milk prices that regulated processors 
must pay. Since 2000, formulas that back into minimum regulated milk 
prices based upon finished product values, have been used for some 
product groups. Specifically, milk used to produce the ``market-
clearing'' products of cheese, whey, butter, and nonfat dry milk is 
priced based upon the net revenue as calculated by USDA. The key 
elements include: the average price received for those products 
nationally, the volume of those products assumed to be produced from a 
given volume of milk, and an assumed cost to convert raw milk into 
those products. Effectively, it is a system that directly transfers the 
market value of these products to dairy producers while allowing 
manufacturers of those products to retain only the assumed cost of 
manufacturing; this cost is commonly called a ``make allowance''.
    Current make allowances are based on 2006 and 2007 costs which are 
now more than 15 years old, rendering the assumed milk processing costs 
woefully out-of-date. Coupled with recent inflationary pressures, the 
need to address this lag is now extremely urgent. While our proposal to 
authorize USDA to conduct regular cost surveys will eventually provide 
data to address this in the longer term, steps must be taken now to 
ensure adequate processing capacity remains.
    Updating make allowances to reflect current costs will enable 
producer milk to have a home. As the out-of-date make allowances make 
it difficult for dairy processors to justify capital investments, 
industry growth is threatened. Further, without an update, farm-level 
resources will be underutilized and there will be less opportunity for 
longer-term job growth. This scenario also has the potential to price 
U.S. exports out of global markets and could even lead to increased 
imports of certain dairy products. Such a result would represent a 
major setback for the U.S. dairy industry given our decades-long focus 
and clear opportunity to become the world's dominant dairy supplier. 
Finally, if U.S. milk production is limited, prices for milk, cheese 
and other dairy products will increase, hurting consumers who are 
already paying more for food purchases due to ongoing inflationary 
pressures.
    In addition, given that dairy producers and their cooperatives own 
a significant number of cheese/whey plants and especially butter/powder 
manufacturing facilities, producers who belong to a manufacturing 
cooperative will benefit from accurate make allowances, as well. 
Accurate make allowances would match cooperatively owned manufacturing 
costs and eliminate the need for those cooperatives to ``re-blend'' 
(withhold dollars from producer pay prices) to cover manufacturing 
losses. Updating make allowances to fully reflect today's manufacturing 
costs would put the farmer owners of manufacturing cooperatives back on 
even footing with producers who ship to marketing--only cooperatives 
(cooperatives that do not own processing facilities).
    More broadly across dairy processing, additional issues exist, as 
well. Bankruptcies in the bottling (fluid milk) sector further 
illustrate updates are needed to ensure dairy processing remains 
healthy and viable for producers to have adequate outlets for their 
milk. Updates to the system will help ensure nutritious dairy remains 
affordably available to American consumers and for export markets 
beyond.
    I am happy to report that discussions are currently underway within 
our industry to address this issue in the short-term. Processors and 
dairy cooperatives are working to develop a proposal that can be 
considered as part of a Federal Order hearing as Secretary Vilsack has 
stated USDA will not convene a hearing unless processors and producers 
reach consensus on a proposed solution. While industry discussions are 
ongoing, we have not yet reached an agreement on a path forward. I urge 
Congress to allow this collaborative effort to continue and not to 
address any milk pricing issues legislatively unless they are supported 
by all segments of our industry. This type of intervention could have 
unintended consequences, including the creation of artificial price 
signals that could lead to over-production and allow for market 
manipulation. That said, prompt resolution to these issues via a 
hearing remains urgent for our dairy industry.
    Thank you for the opportunity to appear before you today. I will be 
happy to answer any questions you may have.

    The Chairman. Thank you. And now, Mr. Forgues, please begin 
when you are ready.

          STATEMENT OF TRAVIS FORGUES, EXECUTIVE VICE 
        PRESIDENT OF MEMBERSHIP, ORGANIC VALLEY D CROPP 
                   COOPERATIVE, LA FARGE, WI

    Mr. Forgues. Good morning, Chairman Scott, and all 
Committee Members. My name is Travis Forgues. I have served as 
Executive Vice President of Membership for Organic Valley since 
2013, but more importantly, before that, I was an organic dairy 
farmer from Alburg Springs, Vermont for 16 years, and yes, I 
still miss our cows. Organic Valley is a marketing cooperative 
with nearly 1,800 farmers in 34 states. We are predominantly 
dairy and market Organic Valley branded products, as well as 
ingredients for commercial dairy buyers. We own three dairy 
processing facilities and work with dozens of co-processors 
across the U.S.
    The organic dairy sector witnessed a demand surge as COVID-
19 first gripped the nation. Consumer purchasing patterns 
changed, and, according to the Organic Trade Association survey 
data, average annual category growth was around 5\1/2\ percent 
for 2020 and 2021 combined. That said, the most recent data 
shows growth is flat, but we at Organic Valley continue to meet 
our sales expectations, indicating some of those purchasing 
shifts to value-added dairy are persisting.
    While the co-op is cautiously optimistic about the demand 
for organic dairy, and, in fact, is bringing on 58 additional 
farms in the Northeast who will be shipping with us by August, 
we must note serious headwinds, primarily driven by inflation 
and international disputes, which threaten the organic dairy 
marketplace. For context, Organic Valley's transportation costs 
to get goods to retail has increased 36 percent. Dairy 
processing costs are up 14 percent and climbing. Organic corn, 
soy, and hay are up 30, 55, and 48 percent respectively, with 
some regional variability. Farm pay prices for our farmers have 
increased slightly, and we are planning to expand the volume of 
milk we procure from membership four percent by the end of 
2023.
    To mitigate some of these incurred costs, we have increased 
consumer prices for our branded products as much as 8 to 14 
percent for some items. Some of these price increases are just 
hitting the marketplace now, so it is unclear how they will be 
received. These increases are meant to cover co-op operating 
expenses and are not nearly enough to move resources back to 
farms that are wrestling with high fuel and high feed costs. 
The honest reality is the current environment is very daunting 
for many organic dairy farmers.
    For the next farm bill, we urge the Committee to focus on 
efforts to bring stability for small farms and their supply 
chain partners, and to strengthen dairy farm resilience. Dairy 
farming and the dairy industry differ across the U.S. Crafting 
a national farm policy that spans those variances is a 
difficult, if not near impossible, proposition. One recent 
policy development in the last farm bill was the Dairy Business 
Innovation Initiative, which seeks to address region-specific 
needs of the industry. Currently there are four initiatives 
anchored in the States of Vermont, Wisconsin, Tennessee, and 
California. We urge a reauthorization and expansion of the 
Dairy Business Innovation Initiative to better service region-
specific dairy opportunities and challenges. These initiatives 
convene farmers, industry partners, and academia with funding 
to tackle production, processing, and marketing needs of dairy 
specific to each individual initiative's coverage area.
    As we all know, dairy farming is more than just cows and 
milk, and we believe U.S. farm policy must be intent on 
leveraging greater sustainability so agriculture can better 
absorb the shocks of weather, markets, and unforeseen 
conflicts, be it a pandemic or geopolitical dispute. We must 
create a more resilient food system. The farm bill should seek 
to expand the Rural Energy for America Program. Let us get 
renewable energy on every dairy farm that wants it. We can 
better support grass-based farming systems. Let us get more 
animals on the land in a way that provides stacked 
environmental benefits. Needed is technical assistance, 
structural cost-sharing provisions, and new technologies. 
Standardize the accounting and verification of carbon 
reductions measures in agriculture. Policy and oversight is 
needed to level set-carbon markets. In agriculture, some 
commodity and product claims on carbon reductions are reliable. 
And maximize regenerative farming approaches. Prioritize manure 
management techniques, such as composting, and other soil 
health practices that lessen dependence on off-farm crop 
inputs.
    In conclusion, I cannot overemphasize the need to focus 
intently on keeping small family farms viable in this next farm 
bill. They are the social and economic engine of rural 
communities across this country. It is vital we work together 
to help these families stay on the land, providing nutritious 
food and economic opportunities for today, and in the future. 
My written testimony provides greater details on investments to 
support organic dairy producers and dairy industry 
participants. Thank you for the opportunity to provide remarks, 
and I welcome any questions from Committee Members.
    [The prepared statement of Mr. Forgues follows:]

   Prepared Statement of Travis Forgues, Executive Vice President of 
      Membership, Organic Valley D CROPP Cooperative, La Farge, WI
    Good morning, Chairman Scott and Committee Members,

    I have served as Executive Vice President of Membership for Organic 
Valley since 2013 and oversee all cooperative membership engagement 
which includes 167 staff that are responsible for dairy hauling and 
scheduling, farmer resources, field operations, data analytics, milk 
management and farmer payroll, feed, meat and produce programs as well 
as farmer governance and communications.
    Before employment at the co-op, I was a farmer-member and the first 
organic dairy farmer to join the cooperative from Vermont. Between 1999 
and 2013 as a farmer-member, I pioneered the co-op's young farmer 
leadership program, Generation OrganicTM (Gen-
OTM), served on the co-op's board of directors and dairy 
executive committee, and was active in the Farmers in Marketing 
program.
    Organic Valley D CROPP Cooperative was established in 1988 in 
southwestern Wisconsin with seven farmer-members. Today, with sales 
topping $1.2 billion, the cooperative has nearly 1,800 farmer-members 
in 34 states and four countries. Focused predominately on organic 
dairy, the cooperative works with dozens of dairy processors nationwide 
to manufacture an array of Organic Valley branded products as well as 
bulk and ingredient commercial offerings. The cooperative maintains 
three dairy processing facilities in two states as well as two 
subsidiaries, a distribution company called Organic Logistics and a 
meat business called Organic Meat Company.
    Organic Valley D CROPP Cooperative's mission is to create and 
operate a marketing cooperative that promotes regional farm diversity 
and economic stability by the means of organic agricultural methods and 
the sale of certified organic products. The average size herd on a 
CROPP Cooperative dairy farm is 78 cows.
State of Organic Dairy
    The organic dairy sector witnessed a demand surge as the COVID-19 
pandemic first gripped the nation. Consumer purchasing patterns shifted 
and according to the Organic Trade Association survey data,\1\ average 
annual category growth was around 5.5% for 2020 and 2021 when combined. 
That said, the most recent data shows growth is flat, but we at Organic 
Valley continue to meet our sales expectations indicating some of those 
purchasing shifts to premium dairy are continuing.
---------------------------------------------------------------------------
    \1\ https://ota.com/news/press-releases/22284.
---------------------------------------------------------------------------
    While the co-op is cautiously optimistic about the demand for 
organic dairy, and in fact is bringing on 58 additional farms in the 
Northeast who will be shipping with us by August, we must note serious 
headwinds driven by inflation and international disputes threaten the 
organic dairy marketplace.
    For context:

   Transportation costs to get goods to retail has increased by 
        36%

   Dairy processing costs are up 14% and climbing

   Organic corn, soy, and hay are up 30%, 55% and 48% 
        respectively with some regional variation

   Farm pay prices for us have increased slightly and we are 
        planning to expand the volume of milk we procure from 
        membership 4% by the end of 2023

    To mitigate some of these incurred costs, we have increased 
consumer prices for our branded products as much as 8% to 14% for some 
items. Some of these price increases are just hitting the marketplace 
now, so it's unclear how they will be received. These increases are 
meant to try to cover co-op operating expenses and are not nearly 
enough to move resources back to farms that are wrestling with high 
fuel and high feed costs.
    The honest reality is the current environment in very daunting for 
many organic dairy farmers.
Dairy and Farm Program Review
    For the next farm bill, we urge the Committee to focus on efforts 
to:

  (1)  bring greater stability for small farms and their supply chain 
            partners

  (2)  strengthen dairy farm resilience
Dairy Business Innovation (DBI) Initiatives
    Dairy farming and the dairy industry differ across the U.S. 
Crafting a national farm policy that spans those variances is a 
difficult, if not nearly impossible, proposition. One recent policy 
development in the last farm bill was the Dairy Business Innovation 
Initiative which seeks to address region-specific needs of the 
industry. Currently, there are four initiatives anchored in the states 
of Vermont, Wisconsin, Tennessee, and California. These initiatives 
convene farmers, industry partners, and academia to tackle production, 
processing, and marketing needs of dairy, specific to each individual 
initiative's coverage area.
    We urge a reauthorization and expansion of the Dairy Business 
Innovation Initiative. Specific improvements include:

   Provide an authorization for appropriations of $30 million 
        each fiscal year

   Instruct USDA to ensure DBI's engage a broad range of 
        stakeholders in programming, grant-making, and priority 
        setting, and to hold an annual public session to assess the 
        previous year's outcomes and to solicit comments on how the 
        funding of awards should be determined

   Review distribution of DBI funding across the four 
        initiatives to understand the scale of results for relevant 
        populations (dairy farmers and dairy processors) served

   Consider adjusting maximum award caps for DBI funded 
        projects and allow minor construction costs, up to $10,000, be 
        eligible for program funding.

    Maintain the Dairy Margin Coverage (DMC) Program. Organic Valley 
supports the DMC as it is currently offered. We believe the two tiers 
and premiums levels are scaled appropriately, and the program is an 
option for producers who wish to mitigate risk when facing a margin 
condition of high feed costs and low milk price that would be 
especially traumatic for independent, family-scale dairy operations. 
While not a perfectly aligned tool for organic producers, who must 
graze cattle to meet organic diet requirements and are only 
tangentially impacted by national feed and milk prices, hundreds of our 
members are enrolled in the program.
    We acknowledge the DMC only encompasses a feed-milk price margin 
dynamic and with inflationary pressures impacting most dairy farm 
inputs, the DMC is ill equipped to aid producers with other substantial 
variable costs.
    A recent analysis, ``U.S. Dairy Market and Policy Overview'' \2\ 
out of the University of Illinois, provided observations that small 
farms may receive less protection against declines in net returns 
compared to larger farms. Their summary observations are outlined 
below.
---------------------------------------------------------------------------
    \2\ Zulauf, C., G. Schnitkey, K. Swanson and N. Paulson. ``US Dairy 
Market and Policy Overview.'' (https://farmdocdaily.illinois.edu/2021/
11/us-dairy-market-and-policy-overview.html) farmdoc Daily (11): 158, 
Department of Agricultural and Consumer Economics, University of 
Illinois at Urbana-Champaign, November 22, 2021.

  Summary Observations
          Since the U.S. began transitioning to a milk payment program 
        from a milk price support program in the late 1990s, 
        variability of milk price and net return has increased notably.
          Analysis in this article suggests a program that bases dairy 
        policy payments on the milk price-feed cost margin, such as the 
        current DMC program, provides the most protection against 
        decline in milk profitability for the largest dairy farms. 
        Protection is notably less for dairy farms with less than 50 
        cows, with some slippage for dairy farms with 50-99 cows.
          This finding prompts a policy equity issue: ``Should dairy 
        policy be fair across herd sizes?''
          If policy deliberations conclude that this fairness issue 
        should be addressed, a per cow payment for a policy specified, 
        limited number of cows per dairy operation is a potential 
        policy option.
          This policy option is in essence a policy addendum to DMC to 
        mitigate an equity issue created by DMC without changing DMC.
          It could be implemented by basing the per cow payment on the 
        decline in net return not covered by the change in DMC's milk-
        feed margin for dairy operations with less than a given number 
        of cows.
          Payment could be restricted to herds with less than the given 
        number of cows. However, such limits are usually difficult to 
        effectively implement because farms rearrange their operation 
        to qualify for payments. A per cow payment up to the given 
        number of cows could thus be made to all dairy operations. 
        Small dairy farms would however receive the greatest benefit 
        since a larger share of their cows receive a payment.

    Organic Valley would support Committee exploration of such a policy 
addendum to DMC that creates a threshold to trigger a per-cow payment 
at an established number of cows to address the other costs dairy 
farmers are incurring in the current environment and to ensure greater 
program equity for small farms.
    Organic Valley also supports testimony provided by International 
Dairy Foods Association, and in particular the Healthy Fluid Milk 
Incentives Projects request. We have maintained an active membership in 
the trade association where dairy pricing, trade, and industry affairs 
are frequently discussed.
Dairy Resilience and Dairy Sustainability
    As we all know, dairy farming is more than just cows and milk, and 
we believe U.S. Farm Policy must be intent on leveraging greater 
sustainability so agriculture can better absorb the shocks of weather, 
markets, and unforeseen conflicts--be it a pandemic or geo-political 
dispute. We must create a more resilient food system.

    Farm policy concepts to maintain or enhance include:
Rural Energy for America Program
    We should strive to get renewable energy on every dairy farm that 
wants it. Reforms should include:

   Increase REAP funding to $300 million per year--Currently, 
        REAP is at $50 million per year but the program is historically 
        oversubscribed

   Increase cost-share--REAP cost-shares only 25% of a 
        renewable energy project's cost. This is dreadfully low 
        compared to other USDA farm conservation and value-added 
        programs. To serve more applicants and accelerate technology 
        adoption, Federal cost-share for grants should be increased to 
        50%

   Invest in staff and outreach--Reforms should provide 
        specific direction and resources to USDA on staffing state RD 
        offices with energy specialists. Coordination between other 
        USDA agencies should be enhanced

   Enhance programmatic elements to ensure family farmers and 
        solar options receive fair recognition--REAP applicants are 
        judged in part by whether their renewable energy system could 
        replace 100% of a farm's energy use and whether it can pay for 
        itself within 10 years. However, some utility companies impose 
        net metering limits that discourage farmers from building 
        systems big enough to meet those criteria. These scoring 
        limitations must change since they are out of an applicant's 
        control. An additional priority should be made to resource 
        technologies and projects with strong net greenhouse gas 
        emissions reductions.

   Enable program components like Reserve Fund and REAP Rebate 
        to leverage clean technology deployment

   Expand REAP access and equity--Consider creating set-asides 
        (5% to 10%) of total yearly funds or institute more favorable 
        cost-share terms for Black, Indigenous, and people of color 
        farmers/business owners as well as beginning farmers and 
        ranchers

   Recalibrate thresholds for the smaller project funding 
        pool--Increase the maximum award request in the smaller project 
        funding pool from $20,000 and under to $40,000 and under. A 
        simple adjustment for inflation since the program's start would 
        validate an increase and reflect the overall needs of farmers 
        and rural businesses in this category of need
Grass-based Farming Systems
    Grass-based livestock systems create a landscape that, when 
properly managed, is environmentally friendly and can be more resilient 
to major weather events. Within organic dairy, grazing is required as 
part of the regulation but complementary support to maximize grazing 
efficacy is severely lacking. The right recipe of public and private 
signals can help farmers succeed at incorporating more grass-based 
production on their farms, be it organic or non-organic. Finding the 
appropriate public policy incentives and economic footing for this 
system deserves greater attention. Policy options should include:

   Expand the Grazing Lands Conservation Initiative with $50 
        million per year in mandatory farm bill funding. The Federal 
        farm bill's Grazing Lands Conservation Initiative (GLCI) once 
        functioned as a powerful tool that enabled states to 
        effectively deliver tailored education and technical assistance 
        to farmers wanting to graze more effectively. GLCI is a 
        specific allocation to USDA's NRCS that, in turn, is offered to 
        state grazing networks, consortiums, extension services, and 
        conservation entities that are providing hands-on grazing 
        support.

   GLCI was resourced for over a decade, reaching $27 million 
        by 2008, but over the last 14 years it has only received minor 
        funding. With climate challenges and growing interest 
        demonstrated by producers and consumers for animal products 
        from grass-based systems, the time is now to unleash this once 
        popular and effective effort by rebirthing GLCI at $50 million 
        a year. Successful transitions to management intensive 
        rotational grazing (MIRG) are characterized by mentorship, 
        education, and resources. A study in Alabama revealed 
        educational events had a positive impact on farmers cultivating 
        appropriate grass types, adopting MIRG and associated 
        technology, and increase their household income. The study 
        emphasized the need for small farm outreach through education 
        and technical support.\3\
---------------------------------------------------------------------------
    \3\ Karki, Lila and Uma Karki. ``Impact of an Educational Program 
on a Year-Round Forage Production and Grazing Management System in 
Alabama.'' Professional Agricultural Workers Journal. 7(1): 49-64. 
2019. ageconsearch.umn.edu/record/301211/.

   Prioritize NRCS Financial Assistance to expand the 
        infrastructure for grass-based livestock systems. The Federal 
        farm bill also includes substantial funding for working lands 
        conservation, including grazing, through the Environmental 
        Quality Incentives Program (EQIP) and the Conservation 
        Stewardship Program (CSP). In fact, in the most recent 
        iteration of the farm bill (2018), Congress specifically 
        directed NRCS to make higher incentive payments (a 50% bonus) 
        for advanced grazing management, including MIRG, within the 
---------------------------------------------------------------------------
        CSP.

      NRCS with instruction from Congress can further support 
        sustainable grazing by directing that:

     Half of EQIP funding, offered annually to support 
            animal agriculture, be dedicated to grazing infrastructure 
            and management.

     A wider range of advanced grazing enhancements be 
            added to CSP with robust payment levels.

     CSP payments for the annual management of previously 
            adopted conservation measures pay at cropland rates 
            whenever cropland is used for pasture.

     Restore the CSP funding that was cut in 2018.

   Enhance Risk Management Agency products for grazing systems 
        that are underutilized. The USDA Risk Management Agency (RMA) 
        launched the Pasture, Rangeland, Forage (PRF) Pilot Insurance 
        Program in 2017. The program exists to insure farmers against 
        drought by calculating forage losses based on lack of 
        precipitation per grid area. To date, the program has been 
        under advertised and underutilized.\4\ USDA should further 
        invest in risk management by creating greater incentives for 
        PRF enrollment and increasing accessibility and awareness of 
        the program.
---------------------------------------------------------------------------
    \4\ ``Pasture, Rangeland, Forage Pilot Insurance Program.'' Risk 
Management Agency. USDA. Aug. 2017. https://www.rma.usda.gov/Fact-
Sheets/National-Fact-Sheets/Pasture-Rangeland-Forage-Pilot-Insurance-
Program.

      RMA should consider cooperative agreements with organizations and 
        agencies to elevate PRF. Incentives might also be offered to 
        crop insurance agents to encourage them to more actively seek 
        clients.
      USDA should also expand and make permanent the June 1, 2021, RMA 
        action that provides farmers who planted cover crops during the 
        2021 crop year with a $5 per acre insurance premium 
        discount.\5\ Moreover, given the even greater climate 
        mitigation potential of carefully managed grass-based 
        agriculture, a similar or even greater premium discount should 
        be offered for PRF policies.
---------------------------------------------------------------------------
    \5\ ``Pandemic Cover Crop Program.'' Risk Management Agency. USDA. 
Jun. 2021. https://www.rma.usda.gov/en/Fact-Sheets/National-Fact-
Sheets/Pandemic-Cover-Crop-Program.

   Launch a $100 million national research initiative to enable 
        adaptive grazing systems in the U.S. The next farm bill should 
        look to establish a cross-cutting research initiative for 
        adaptive grazing systems within the USDA Research, Education, 
        and Economics mission area. With the use of National Institute 
        of Food and Agriculture (NIFA) competitive grants, primary 
        research at the Agriculture Research Service, and cooperative 
        agreements with nonprofit and community organizations with 
---------------------------------------------------------------------------
        relevant expertise, the nation can:

     Expand the body of grazing knowledge and learning 
            opportunities for farmers, ranchers, and those assisting 
            producers

     Leverage technology adoption for more effective 
            pasture management.

     Optimize forage types for specific livestock, 
            locations, and environmental stresses.

     Seek ways to better quantify carbon sequestration and 
            the climate science of grass-based systems along with the 
            value of other stacked conservation benefits

     Enhance farmer and rancher profitability and the 
            reporting of market trends for grass-fed meat and dairy 
            products

   Establish enforceable USDA animal-raising claim standards 
        for grass-fed to govern the labeling of all meat and dairy 
        products. Fraudulent or misleading product labels and claims 
        cost farmers who are following strict standards tremendously in 
        lost sales and income. USDA's Food Safety Inspection Service 
        should work cooperatively with the USDA's Agricultural 
        Marketing Service (AMS) to establish strong, clear standards 
        and auditing and verification procedures, including the option 
        of third-party certification.
Standardize the accounting and verification of carbon reductions 
        measures in agriculture
    Policy and oversight are needed to level set-carbon markets in 
agriculture so commodity and product claims on carbon reductions are 
reliable and transparent. Along with other stakeholders, we continue to 
believe a normalized science-based accounting for carbon capture and 
reduced GHG emissions is paramount. Congress should instruct USDA to 
advance this positioning.
Maximize regenerative farming approaches
    Regenerative agriculture solutions are already embedded in Federal 
farm conservation programs and should be scaled up through existing 
pathways within the upcoming farm bill.
    The following practices should be prioritized for funding and are 
useful to organic dairy operations:

   Cover Crops

   Crop Rotation

   Organic Amendments

   Conservation Tillage

   Livestock Integration & Prescribed Grazing

   Manure Collection and Storage Improvements

   Agroforestry

   Compost Application

    Beyond the aforementioned practices, we recognize there is a large 
gap in technical assistance to meet the needs of organic dairy farmers 
across production systems, scales, and geographic regions. We recommend 
maintaining the Conservation Innovation Grants and Regional 
Conservation Partnership Program as well as making permanent the new 
USDA programming for organic transition that was announced June 1, 2022 
as part of the ``Framework for Shoring Up the Food Supply Chain and 
Transforming the Food System to Be Fairer, More Competitive, More 
Resilient''.\6\
---------------------------------------------------------------------------
    \6\ https://www.usda.gov/media/press-releases/2022/06/01/usda-
announces-framework-shoring-food-supply-chain-and-transforming.
---------------------------------------------------------------------------
    In addition, Congress should evaluate existing state programs like 
the Alternative Manure Management Program being used by dairy farms in 
California to modernize and retrofit manure handling systems that 
benefit the local and global environment. Creating a Federal version of 
the California program would be of great benefit to small dairy farms 
and climate-smart agriculture.
Organic Agriculture Specific Dairy Features
    Organic Valley applauds the USDA for publishing the Origin of 
Livestock final rule in March 2022. The long-awaited final rule 
clarifies the expectation for how operations source and transition 
dairy animals for organic milk production. This rulemaking was in 
process for 7 years and regrettably created competitive harm among 
industry participants during that period of time. It underscores a more 
systemic challenge in USDA's ability to update organic practice 
standards to reflect industry and consumer expectations of certified 
organic.
    Organic Valley strongly supports the Continuous Improvement and 
Accountability in Organic Standards Act (HR 2918). The bill puts in 
place an improved Federal process by requiring USDA to:

   Issue and Organic Improvement Action Plan

   Develop a framework to advance standards updates when 
        affirmative recommendations are made by the National Organic 
        Standards Board

   Conduct specific review of certifier's actions regarding the 
        interpretation and implementation of new standards; and 
        requires an annual report to Congress on the National Organic 
        Program action plan and activities in rulemaking and standards 
        development

    Additionally, we support maintaining the National Institute of Food 
and Agriculture, Organic Research and Extension Initiative baseline 
funding of at least $50 million annually in next farm bill, and would 
encourage you to increase this to $100 million annually over time. This 
program has resourced numerous organic dairy research projects at land-
grant universities throughout the nation. Last, the co-op supports all 
efforts to simplify and streamline both the National Organic 
Certification Cost-Share Program, and the Organic and Transitional 
Education and Certification Program administered by USDA.
    Thank you for the opportunity to provide both oral and written 
testimony for the ``A 2022 Review of the Farm Bill: Dairy Provisions.'' 
I welcome any additional questions or follow-up from Committee Members 
as you take on the monumental task of developing the next farm bill.
Dairy Farm Representation


Sustainablity



    The Chairman. Thank you very much. And now, Dr. Bozic, 
please begin when you are ready.

     STATEMENT OF MARIN BOZIC, Ph.D., ASSISTANT PROFESSOR, 
 DEPARTMENT OF APPLIED ECONOMICS, UNIVERSITY OF MINNESOTA, ST. 
                            PAUL, MN

    Dr. Bozic. Chairman Scott, Ranking Member Thompson, Members 
of the Committee, thank you for inviting me to participate in 
this hearing. I am employed as an Assistant Professor in the 
Department of Applied Economics, University of Minnesota. I 
have been on faculty for 11 years. My research focuses on dairy 
markets, risk management, and dairy policy. I am going to talk 
about two topics, DMC, and then Federal Orders.
    Agriculture Improvement Act of 2018 substantially reformed 
the dairy safety net by transforming poorly functioning Margin 
Protection Program into highly effective Dairy Margin Coverage 
Program. At the highest coverage level, $9.50 per 
hundredweight, DMC provides coverage for 20 percent of U.S. 
milk production. Had DMC been in effect for the last 21 years, 
since year 2000, its benefits would exceed costs to producers 
in 19 out of 21 years. Last year it paid over $1 billion to 
producers. This year no payments are estimated, per my model, 
due to high projected margins.
    Several research papers in prior years have expressed 
concerns that DMC may provoke additional milk supply, however, 
due to widespread use of processor-level supply management 
programs introduced during COVID, I do not believe that DMC 
will cause oversupply, even if rules regarding updates to 
individual production history were to be further relaxed. By 
and large, Dairy Margin Coverage appears to be effective in 
accomplishing the legislative intent.
    On Federal Milk Marketing Orders, in 2018 U.S. Congress 
modified the formula used to calculate the price that fluid 
milk processors must contribute to Federal Order pools. The 
reason for the change was to facilitate hedging of raw milk 
purchases by non-traditional fluid milk processors, such as 
large restaurant and coffee house chains. The hope was that 
such change would increase fluid milk sales, and thus increase 
Federal Order benefits to dairy producers. And, to simplify, as 
long as prices of cheese and milk powders would move in the 
same direction, and with approximately the same intensity, 
there was little to lose, and potentially much to gain, from 
the fluid milk formula change. Unfortunately, the pandemic 
affected cheese and milk powder markets in a profoundly 
different way. Federal Government intervention through Farmers 
to Families Food Box Program dramatically increased cheese 
prices, while milk powder prices were not affected. The new 
formula resulted in substantially lower milk checks, and a 
widespread sense of injustice among producers in fluid heavy 
areas.
    There are several broad aspects of this issue that should 
be considered in future reforms. First, lack of wide public 
debate on proposed reforms increases odds of a fragile or 
flawed policy design. Federal Orders have comprehensive 
protocol for instituting changes through an industry hearing 
process, and legislative changes are best left for changes that 
cannot be done through a hearing. Second, to the maximum extent 
possible, the next farm bill should not make risk management 
less effective, either for dairy producers or dairy processors. 
And finally, no reform can be considered complete until it 
fully contemplates the long-term trends in U.S. dairy markets. 
My estimates are that over the next 10 years the share of U.S. 
milk production utilized in beverage milk is likely to fall 
from 18.3 percent this year to 14.5 percent 10 years from now.
    Last year we crossed a major milestone. We now export more 
milk solids than we consume domestically in beverage milk 
products. My estimates are that, over the next 10 years, 
between 45 and 60 percent of all additional skim milk produced 
because our cows are getting better, that will need to be 
exported. And if our regulatory framework remains centered on 
prescribing minimum prices for raw milk consumed domestically 
in beverage milk products, it will be increasingly irrelevant 
for the majority of U.S. regions where milk is primarily used 
in manufactured dairy products. The ultimate question we must 
ask is the following. Do Federal Milk Marketing Orders suffice, 
today and in the future, to deliver fair milk prices to dairy 
producers? I lack confidence to answer that question in the 
affirmative.
    The critical missing ingredient is vibrant competition for 
farm milk. Today it is extremely difficult for most producers 
to switch from their current buyer to another one. Anecdotal 
evidence, from conversing with dairy producers, consultants, 
and educators, suggests that--some presence of anti-competitive 
behavior from some processors. Some dairy producers have 
confided to me that when a prospective milk buy was willing to 
take them on as a patron, their current milk buyer stopped that 
from happening. Farmgate price discovery is also challenged by 
the lack of competition. If a corn producer wishes to know how 
different local elevators would pay for corn, all they need to 
do is go online, or tune in to their local radio station. In 
contrast, when some dairy producers have asked their milk--
their consultants or educators for milk pricing--milk price 
benchmarking information, those service providers have, in 
multiple instances, faced tacit disapproval, or even aggressive 
legal threats, from some dairy processors.
    Now, we should not rush to generalize from anecdotal 
evidence, but, in my opinion, it would also be prudent not to 
ignore it. Further research, and an honest debate on 
competition in dairy, is merited. Thank you for the opportunity 
to appear here today.
    [The prepared statement of Dr. Bozic follows:]

    Prepared Statement of Marin Bozic, Ph.D., Assistant Professor, 
 Department of Applied Economics, University of Minnesota, St. Paul, MN
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for inviting me to participate in this hearing.
    I am employed as an assistant professor in the Department of 
Applied Economics at the University of Minnesota. I have been on the 
faculty at the university for 11 years. My research focuses on dairy 
markets, risk management and dairy policy. I frequently collaborate 
with the U.S. Department of Agriculture to research policy-relevant 
issues and develop risk management tools for dairy producers. Outside 
of my academic appointment, I support the U.S. livestock sector as the 
principal of Bozic LLC, a consultancy and technology company that 
designs and maintains all three livestock insurance plans currently 
supported by the Federal Crop Insurance Corporation: Dairy Revenue 
Protection, Livestock Risk Protection, and Livestock Gross Margin. As 
an insurance designer, it is my role to collaborate with the USDA Risk 
Management Agency to ensure that these programs are actuarially fair 
and effective for reducing risk in the livestock sector and that policy 
rules promote program integrity. I also regularly help industry groups 
understand dairy regulation in the U.S. and overseas. I appear in front 
of you today representing myself, as an independent academic researcher 
and a public servant employed at a land-grant university. My statements 
do not represent the opinion of the University of Minnesota or any 
other entities in which I have a financial or business interest.
    This testimony summarizes my evaluation of two dairy policy reforms 
passed in the Agricultural Act of 2018: Dairy Margin Coverage (DMC) and 
Federal Milk Marketing Orders.
Dairy Margin Coverage
    The Agricultural Act of 2018 substantially reformed the dairy 
safety net, by transforming the poorly functioning Margin Protection 
Program into the highly effective Dairy Margin Coverage (DMC) program. 
Dairy Margin Coverage indemnifies participating dairy producers when 
the national average income over feed cost margin falls below the 
coverage level chosen by the producer (Congressional Research Service, 
2019). The 2018 reform increased the maximum coverage level from $8.00/
cwt to $9.50/cwt and authorized the change in the feed cost formula to 
include dairy-quality hay prices instead of ordinary alfalfa hay 
prices.
    From January 2019 through April 2022, DMC margins averaged $8.95/
cwt. Margins were lower than $9.50/cwt in 23 months, or 57% of the 
time. DMC participation peaked in 2021 at 46.2 billion pounds covered 
at the highest coverage level, $9.50/cwt. That represented 20.4% of 
U.S. milk production. For 2022, 43 billion pounds were covered at the 
$9.50/cwt level, representing 19% of estimated 2022 U.S. milk 
production.
    Had DMC been in effect since 2000, over the previous 21 years the 
program would have had a major impact on net farm income of 
participating dairy operations. An operation that could cover 95% of 
their milk marketings at $9.50/cwt would have seen their net farm 
income over 2000-2021 period increased on average $1.40/cwt. Benefits 
received by producers would be higher than premiums paid into the 
program in 19 out of 21 years. In 2021, the program paid over $1 
billion in indemnities. For 2022, no payments are estimated due to high 
projected margins. One of the goals of the DMC program was to slow down 
the pace of consolidation in the dairy sector. In 2018, U.S. lost 3,261 
dairies. Per the latest data available in 2021, the number of farms 
that exited the sector is only 1,794 dairies.
    Several research papers in prior years have expressed concerns that 
DMC may provoke additional milk supply (Mark, et al., 2016; Nicholson 
and Stephenson, 2014; Raghunathan, 2014). However, in the aftermath of 
pandemic disruption of the dairy supply chain, many dairy buyers have 
introduced supply management plans that help them align the growth in 
milk supply with growth in demand for their dairy products. As such, I 
do not believe that DMC will cause oversupply, even if rules regarding 
updates to individual production history were further relaxed.
    By and large, DMC appears to be effective in accomplishing the 
legislative intent. DMC payments substantially stabilized net farm 
income for dairies with herd sizes up to 250 cows, and consolidation 
pace has slowed down. Fixed coverage levels and premium rates keep this 
program simple and affordable to dairy producers, however those same 
design choices may reduce program effectiveness if inflationary 
pressures persist.
Federal Milk Marketing Orders
    Federal Milk Marketing Orders (FMMO) are one of the primary dairy 
policies in the United States (Bozic and Wolf, 2022). FMMOs are often 
portrayed as a Byzantine set of regulations that cannot be explained 
easily. In fact, central premises of FMMOs are common sense and easy to 
describe. First, FMMOs start from the assumption that the fair 
commodity value of farm milk can be derived from wholesale prices of 
commodity dairy products, net of processing costs and reasonable 
returns to capital invested in manufacturing capacity. If a dairy plant 
is making undifferentiated, commodity cheddar cheese and dry whey 
powder, then per FMMO principles, it would be fair to pass most of the 
revenue from sales of those products to dairy producers. Processors 
thus get a stable profit margin, and producers get a major share of the 
wholesale value of dairy products. In contrast, if a processor is 
making a branded, differentiated product such as aged cheddar cheese 
mixed with Italian herbs, then the processor has added substantial 
value above and beyond commodity products, and most of that added value 
and risk associated with uncertain additional revenue should be kept by 
the processor, other than unregulated milk premiums needed to attract 
sufficient milk supply. Another principle of FMMOs is that beverage 
milk is a superior food that should never be in short supply, and fluid 
milk manufacturers should never be able to use their market power to 
pit one dairy producer against another to reduce the input cost, and 
thus increase the spread between wholesale price of beverage milk and 
farmgate price of raw milk.
    The way these principles are implemented in practice is through 
establishment of geographically bounded Marketing Orders and requiring 
milk processing plants converting raw milk to beverage milk products to 
participate in the Marketing Order. For all other milk processing 
plants, participation is voluntary, incentivized by the prospect of 
sharing in revenue generated through sales of beverage milk products. 
The desired outcome is that all producers in a certain geography get at 
least the market-average commodity value of milk, referred to as the 
uniform milk price.
    FMMOs start from a set of farmer-friendly ideas and have been 
successful in regulating orderly marketing of milk, which is why they 
have persisted as a collective bargaining institution for almost a full 
century. In recent years, FMMOs have somewhat lost their luster due to 
declining sales of beverage milk products. In late 1990s, when the last 
major FMMO reform was passed by Congress, beverage milk share of all-
milk regulated under FMMOs was higher than 45%. In recent years, that 
share has fallen to less than 30%. In my opinion, in regions other than 
Northeast and Southeast, fluid milk sales no longer provide strong 
enough incentives for dairy manufacturers to choose to stay 
consistently regulated under FMMOs.
    In 2018, upon the request of the National Milk Producers Federation 
and International Dairy Foods Association, Congress modified the 
formula used to calculate the price that fluid milk processors must 
contribute to FMMO pools. The reason for the change was to facilitate 
hedging of raw milk purchases by non-traditional fluid milk processors, 
such as large restaurant and coffeehouse chains (Bozic and Gould, 
2019). The hope was that such a change would increase fluid milk sales, 
and thus increase FMMO benefits to dairy producers. Prior to 2019, when 
the change took effect, fluid milk skim price was based on the higher 
of the commodity value of skim milk in cheese and whey (Advanced Class 
III Skim Milk Price) and the commodity value of skim milk in nonfat dry 
milk powder (Advanced Class IV Skim Milk Price). Since May 2019, the 
formula is changed to be equal to the average of Advanced Class III and 
IV Skim Milk Price plus $0.74/cwt. The change would result in a higher 
milk check to dairy producers whenever the difference between Advanced 
Class III and IV Skim Milk Prices is less than $1.48/cwt. From January 
2000 through December 2018, this difference was lower than $1.48/cwt 
over 60% of months and never higher than $6.77/cwt. To simplify, for as 
long as prices of cheese and milk powders would move in the same 
direction and with approximately the same intensity, there was little 
to lose, and potentially much to gain from the fluid milk formula 
change. Unfortunately, the pandemic affected cheese and milk powder 
markets in a profoundly different way. By May 2020, all dairy product 
prices collapsed due to COVID-19 lockdowns, and the June 2020 Base 
Class I price (based on mid-May dairy product prices) was higher under 
the new formula than under the old formula. However, Federal Government 
intervention through Farmers to Families Food Box Program dramatically 
increased cheese prices, while milk powder prices were not affected. 
From July to December 2020, in all months other than October, the 
spread between Advanced Class III and Class IV Skim Milk Price was much 
higher than the historic record spread observed prior to December 2018. 
The new formula resulted in substantially lower milk checks and a 
widespread sense of injustice among producers in fluid-heavy areas. 
Consequently, some producer groups have started demanding the return to 
`higher-of' formula in force prior to 2019. There are several broader 
aspects of this issue that should be considered in future reforms. 
First, lack of wide public debate on proposed reforms increases odds of 
a fragile or flawed policy design, and lack of grassroots support for 
the mechanism in changing markets. FMMOs have a comprehensive protocol 
for instituting changes through an industry hearing process. 
Legislative changes are necessary only for changes that cannot be done 
through a hearing. The Class I milk price formula can be modified 
through a hearing process. Second, low elasticity of supply combined 
with low elasticity of demand for dairy products virtually guarantees 
that milk prices will have high volatility. To the maximum extent 
possible, the next farm bill should not make risk management less 
effective, either for dairy producers or dairy processors.
    Finally, no reform can be considered complete unless it fully 
contemplates the long-term trends in U.S. dairy markets. My estimates 
are that over the next 10 years, the share of U.S. milk production 
utilized in beverage milk products is likely to fall further, from 
18.3% in 2022 to 14.5% by 2032. Last year we crossed a major milestone: 
U.S. is now exporting more milk solids then are used for beverage milk 
products. Going forward, dairy exports will be critical for maintaining 
profitability. Recent estimates are that over the next decade, 45-60% 
of all add additional skim solids produced due to improved cow 
productivity will need to be exported (Bozic and Blimling and 
Associates, 2022). If our regulatory framework remains centered on 
prescribing minimum prices for milk consumed domestically in beverage 
milk products, it will be increasingly irrelevant for majority of U.S. 
regions where milk is primarily used in manufactured dairy products. 
The ultimate question we must ask is the following: Do Federal Milk 
Marketing Orders suffice, today and in the future, to deliver fair milk 
prices to dairy producers? I lack the confidence to answer this 
question in the affirmative. The critical missing ingredient is vibrant 
competition for farm milk. Whereas just 6 or 7 years ago, many 
producers had a choice where to ship their milk, today it is extremely 
difficult for most producers to switch from their current buyer to 
another one. One contributing factor is the rise in milk supply which 
was not matched by sufficient increases in processing capacity. To my 
knowledge, no current academic research has explored the consequences 
of these changes on the relationship between producers and their milk 
buyers. Anecdotal evidence, from conversing with dairy producers, 
consultants and educators, suggests some presence of anticompetitive 
behavior by some processors. Some dairy producers have confided to me 
that when a prospective milk buyer was willing to take them on as a 
patron, their current milk buyer stopped that from happening, by 
calling the prospective milk buyer to inform them of repercussions if 
such a transfer were to take place. Farmgate milk price discovery is 
also challenged by the lack of competition. If a corn producer wishes 
to know how different local elevators would pay for corn, all he needs 
to do is go online or tune in to his local radio station. Dairy 
producers used to be able to ``shop around'' and ask various processors 
what they would pay for their milk. Recently, when some dairy producers 
have asked for milk price benchmarking information from their educators 
or consultants, those service providers have in multiple instances 
faced tacit disapproval or even aggressive legal threats from some 
dairy processors. We should not rush to generalize from such anecdotal 
evidence, but in my opinion, it would also be prudent not to ignore it. 
Further research, and an honest debate on competition in dairy is 
merited.

 
 
 
                               References
 
    Bozic, M. and M. Gould. 2019. Fluid Milk: A Better Hedge. CMEGroup.
 URL: https://www.cmegroup.com/education/articles-and-reports/fluid-milk-
 a-better-hedge.html.
    Bozic, M. and Blimling and Associates. 2022. Modernizing U.S. Milk
 Pricing: An Exploration. International Dairy Foods Association. URL:
 https://www.idfa.org/resources/modernizing-u-smilk-pricing-an-
 exploration.
    Bozic, M. and C. Wolf. 2022. Negative Producer Price Differentials
 in Federal Milk Marketing Orders: Explanations, Implications and Policy
 Options. Journal of Dairy Science, vol. 105(1). URL: https://
 www.journalofdairyscience.org/article/S0022-0302(21)00977-2/fulltext.
    Congressional Research Service. 2019. 2018 Farm Bill Primer: Dairy
 Programs. URL: https://sgp.fas.org/crs/misc/IF11188.pdf.
    Mark, T.B., K.H. Burdine, J. Cessna, and E. Dohlman. 2016. The
 Effects of the Margin Protection Program for Dairy Producers. Economic
 Research Service, U.S. Department of Agriculture. URL: https://
 www.ers.usda.gov/webdocs/publications/79415/err214_summary.pdf?v=0.
    Nicholson, C.F. and M.W. Stephenson. 2014. Dynamic Market Impacts of
 the Dairy Margin Protection Program. Journal of Agribusiness 32(2).
 URL: https://dairymarkets.org/PubPod/Pubs/AgBusiness/
 Nicholson_Stephenson_JAB-Dairy.pdf.
    Raghunatan, U. 2014. The impact on the milk supply response to MPP-
 Dairy. Journal of Agribusiness 32(2). URL: https://dairymarkets.org/
 PubPod/Pubs/AgBusiness/Raghunatan_JABDairy.pdf.
 


    The Chairman. And thank you very much to all of our 
witnesses. Excellent testimony. Thank you. At this time Members 
will be recognized for questions in order of seniority, 
alternating between Majority and Minority's sides, and you will 
be recognized for 5 minutes each in order to allow us to get in 
as many questions as possible. And, as always, please remember, 
keep your microphones muted until you are recognized so we 
don't have that noise interference. And let me start with my 
questions.
    Mr. Forgues, I hope I pronounced that okay.
    Mr. Forgues. It is Forgues.
    The Chairman. Forgues?
    Mr. Forgues. Yes.
    The Chairman. Thank you. I appreciate it. And Ms. Lesher, I 
want to--and others on the Committee, I am very concerned about 
the tremendous loss of our family farms, and you all touched 
upon it, and I want to ask--and others--because we on this 
Committee are very concerned about this issue. For example, we 
are losing 17,000 family ranching farms every year. 17,000 
ranching farms, in the dairy industry itself, as you pointed 
out in your testimonies, we are losing record numbers. And so 
we on the House Agriculture Committee are putting together a 
bill to address this issue, to give a helping hand, because if 
we don't, our entire agriculture industry is going to be at 
stake. And small family farms are the heart and the soul of our 
agriculture system, and so we are moving to very rapidly put in 
a bill that will give our small family farms a helping hand, 
and this is shared on both sides of the aisle, both Democrats 
and Republicans. And so, just tell me, what do we need to do, 
from your all's perspective? And I will start with--let us 
start with ladies first. Go ahead, please.
    Ms. Lesher. Thank you very much. I appreciate the question, 
and so, like every small business, we have challenges, some of 
which would be labor, some of which would be technology, access 
to broadband, things like that. Farms are generational, and 
they truly are the backbone of our communities, and I think 
things that we need to look at is the labor issue, and how we 
can do that--creating a more level playing field for pricing 
across the board that takes into account all the costs that 
farmers pay, because we pay freight coming in, and we pay the 
freight going back out, so we do get hit exceptionally hard on 
costs of inputs, and trying to make use of the best 
technologies. Things that could help us in those regard I think 
would be wonderful moving forward.
    The Chairman. Thank you. And Mr. Forgues?
    Mr. Forgues. Thank you, Chairman Scott. You hit on 
something that, for myself has been a life's work, mostly since 
I was born in the 1970s, and then in the 1980s went through the 
whole crisis of being a young child on a farm, and watching 
agriculture being destroyed across the country. The farm town 
that I am from had 21 dairy farms when I was young. We are down 
to three.
    The Chairman. Jeez.
    Mr. Forgues. Two of them that are organic, and one of them 
that has gotten larger and is conventional. I can't emphasize 
any more that our farms--and, of course, we are in an organic 
system, 1,800 families, 34 states--we just barely finished our 
visits with our regional meetings, where farmers can come in, 
discuss what is going on. We do that twice a year. And we met 
across the country, and what we are seeing with this elevated 
cost of inflation, and what we are seeing with the cost of 
feed, or just the availability of feed, because of the climate 
changes we are seeing, doesn't matter why we are seeing them, 
but it is extreme out there, and that is causing even 
availability of feed to be a crisis setting situation. How can 
we do more?
    And I think this is where we all need help, because 
ultimately, the big question our farmers are saying is well, 
let us charge it to the marketplace. Well, the marketplace is 
dealing with absolutely everything else that we are dealing 
with, right? Everyone is buying gas at very expensive costs, 
and then increased inflationary costs. Are they going to be 
able to accept premium cost for the addition on top of their 
premium half gallon of milk, right? And so that is probably not 
realistic in these current conditions, we have to find other 
ways, so I would strongly encourage us to focus the farm bill 
on areas of resiliency. How to help farmers be more resilient, 
and how to pay them for things that are--maybe not just for 
making milk on their farms, but for climate work, for energy 
work, and such. I would strongly encourage farm resiliency. 
Thank you.
    The Chairman. And thank you. Well, we are moving on this, 
and we hope to get this legislation together, because it is an 
immediate problem, and we are working on it. Hopefully we will 
be able to get a bill introduced within the next week or so. 
And now, with that, Ranking Member, I will recognize you for 
your questions.
    Mr. Thompson. Thank you, Mr. Chairman. Thanks to all the 
witnesses. Ms. Lesher, in your testimony you referenced the 
asymmetric risk facing producers under the current Class I 
mover formula. Could you go into a bit more detail on this 
risk, and can you elaborate on where NMPF is in the process of 
developing any recommendations for the mover?
    Ms. Lesher. Yes, thank you very much for the question. So, 
there is a ceiling on how much better the new mover can perform 
compared to the old mover, and that ceiling is at 74 per 
hundredweight, which would occur when the Class III price and 
IV price are identical, but there is no floor on how much worse 
it can perform. We saw that play out when the Class III and 
Class IV prices widely diverged in 2020. Dairy farmers lost 
roughly $750 million in Class I skim revenue relative to that 
old mover. The new mover will often track closely with the old 
mover, but it won't even exceed it by much, so it didn't bring 
in the revenue anticipated to make up for it when it generated 
significant losses. So today the new mover has hardly recouped 
any of the roughly $750 million that was lost. That makes these 
losses effectively permanent, which runs completely contrary to 
the intent of the 2018 agreement, which is not sustainable 
long-term.
    Mr. Thompson. Thank you for that, appreciate it. Mr. 
Durkin, in your testimony you discussed the need for more 
relevant and accurate cost of production studies that can form 
many changes to the make allowance. I know there is a desire to 
make reporting costs mandatory. Do you think this will be a 
burden to processors, or would it be an easy lift to include 
these figures alongside what is already being reported for the 
current pricing formulas?
    Mr. Durkin. Yes, from our perspective, we look at this as 
not a burden at all, particularly initially after--once you get 
the data arranged--set up that, on an annual basis, it could be 
published and reported on an annual basis with limited issues.
    Mr. Thompson. Thank you. Dr. Bozic, one thing that concerns 
me about DMC is the number of operations that did not sign up 
for the 5 years of coverage and receive the 25 percent discount 
on their premium, instead have elected to decide whether to 
participate in DMC on an annual basis. Can you talk about the 
risks of trying to guess the market like that? Current 
enrollment in DMC is around 72 percent of farms. What can be 
done to encourage the other 28 percent to sign up?
    Dr. Bozic. That is a nice--excellent question. The--2020 is 
the best year, when folks--some folks did not sign up for DMC. 
They thought it is going to be a good year, but 3 months in, 
all of that went out the door, and we had a black swan event. 
In my outreach programming for dairy producers in the upper 
Midwest, and really nationally, I always say that any time 
spent thinking about enrolling in DMC is time best spent on 
something else, because 9.50 coverage, it should be the default 
choice for dairy producers. The 25 percent discount is a great 
deal for 5 year coverage, and I hope that that is again 
available in the next farm bill.
    Mr. Thompson. Thank you. This question actually is for Ms. 
Lesher and Mr. Forgues. As members of dairy cooperatives, can 
you speak to the importance of the cooperative structure in the 
dairy industry? And, as a producer, what are the benefits that 
you see from being a member of your cooperative?
    Ms. Lesher. I guess I will be happy to answer that first, 
thank you so much. So, we have been a member of a co-op since 
my husband and I took over the family farm in 1989. We look at 
it as a real asset. I know my milk will be picked up, I know I 
will get paid on a prompt, fair basis. As we learned when our--
unfortunately, our--my neighbor shipped to Dean Foods, they did 
not have that ability. So, co-ops provide a lot of security for 
dairy farms, and they do work on our behalf to enhance our farm 
in many ways. They provide a lot of technical support as well. 
So, it is a real asset to be a member to a cooperative.
    Mr. Forgues. Yes, I would add that, for us, it has given 
the opportunity for our farmers to be heard. I think that we go 
out of our way to make sure that farmers are given the ability 
to be engaged, and we listen to our farmers. As with Farmer 
100, I always felt that--the importance of being heard. Doesn't 
mean you always get your own way, and trust me, with 1,800 
families, not everyone is going to be happy all the time, but 
being heard, and being part of the equation to make things 
better, especially when you are trying to do something like us, 
which has been on a stable pay price for 34 years, and working 
our way slowly up, and holding stability, when you are doing 
something like that, it is really important to have the ability 
to be together and cooperative.
    Mr. Thompson. Well, thank you all for your responses. Mr. 
Chairman, I would ask unanimous consent to submit for the 
record, and then submit to our four witnesses some very 
thoughtful questions that were put together by a grassroots 
Pennsylvania Dairy Advisory Committee. I appreciate the hard 
work that those folks do on the dairy issue.
    The Chairman. Without objection.* Ranking Member.
---------------------------------------------------------------------------
    * Editor's note: the responses from the witnesses to the 
information referred to are located: Ms. Lesher, on p. 1206; Mr. 
Durkin, on p. 1208; Mr. Forgues, on p. 1212; Dr. Bozic, on p. 1215.
---------------------------------------------------------------------------
    Mr. Thompson. My time has expired.
    The Chairman. Okay. Next we go to, excuse me, the gentleman 
from California, Mr. Costa, who is also the Chairman of the 
Subcommittee on Livestock and Foreign Agriculture, is now 
recognized for 5 minutes.
    Mr. Costa. Thank you very much, Mr. Chairman. I think we 
have had a good hearing, and I think we have--my sense is--have 
a lot of bipartisan support for a number of the issues that we 
have discussed this morning affecting--well, California, but 
America's dairy industry that is so critical, because we all 
agree that food is a national security issue, and the 
challenges facing dairymen and -women have been well discussed 
here today.
    Mr. Durkin, you talked of your three points, the healthy 
fluid milk program and expanding it in the next farm bill. I 
think there is bipartisan consensus under the SNAP Program to 
do that. I asked the question about permanent extension on the 
risk management tool, and I think there is bipartisan support 
on that effort as well. And the third point about updating the 
make allowance, you just referenced to the Ranking Member that 
that is not a challenge, and we ought to update this 
information in terms of regulating price formulas, and if we 
don't have current information, knowing the volatility that we 
have seen in milk markets here in recent years due to the 
pandemic, and other factors, it must be a part of the ongoing 
effort to allow these safety net programs to be realized.
    I want to shift the conversation a little bit, because 
another factor of this pandemic have been the upending of our 
supply chain efforts, both in terms of feed for dairies, and 
movement of that feed, but also exportation of our milk 
products around the world. And I know, as I said in your 
introduction, 26 percent of Leprino's products are exported. 
How much impact have you found in terms of potential loss of 
markets as a result of this supply chain effort, and do you 
think the recent law that the President signed, legislation 
that we all supported with Congressmen Garamendi and Johnson, 
will be an important effort to deal with that supply chain 
issue?
    Mr. Durkin. Yes. Well, thank you for the question, 
Congressman, and, on behalf of really the entire industry, I 
want to thank you, and Chairman Scott, and really everybody on 
the House Agriculture Committee for your support on this bill, 
for the Ocean Shipping Reform Act (Pub. L. 117-146). We truly 
appreciate that, and it is going to make a difference, and it 
already actually has started to make a difference, so we 
appreciate that support.
    Things are definitely better, but nowhere near where they 
need to be for sure, we are still struggling a little bit with 
certain----
    Mr. Costa. Have you lost market share in the last year?
    Mr. Durkin. Yes, we have lost in market share, particularly 
in China, I would say, from an international standpoint. It 
is--one is consistency and reliability of goods. I know I 
testified to that back in November, so we have seen some share 
in certain markets go down. We have been able to maintain it in 
others, and possibly grow a little bit, but net it has been an 
extreme challenge.
    Mr. Costa. All right. Well, any suggestions you may have 
for all of us would certainly be appropriate and appreciated. 
Mr. Forgues, you talked in your testimony about sustainable 
solutions in the dairy farmer's toolbox, and I have been very 
involved in California on how we deal with management of not 
only wastewater, but also manure management programs, and you 
noted that in your testimony to deal with greenhouse emissions. 
You are aware, I am sure, of the 114 projects funded in 
California that has reduced greenhouse gas emissions by an 
estimated 1.1 million metric tons of carbon dioxide over 5 
years. How could we expand that kind of effort nationwide, and 
how we might do it in the reauthorization of the farm bill?
    Mr. Forgues. Yes. Thanks for the question, Representative 
Costa. We have dairy farmers in California that have used the 
Alternative Manure Management Program, which is really about 
incentivizing farm systems to reduce methane emissions, but it 
is also creating better soil amendments for cropping. Some of 
the changes we see are putting in place a solids separator--
yes, and that is what it sounds like--and then developing 
composting systems with that manure.
    Mr. Costa. I'm very familiar with the details, my friend. I 
am wanting to know can we expand that in the reauthorization of 
the farm bill to provide those benefits nationwide, and have 
you determined what the potential expansion of that would be 
nationwide if we followed in the example that we know in 
California?
    Mr. Forgues. Well, we would applaud the program being 
implemented--or we applaud the program that's being implemented 
by the State of California. In our opinion, you could really 
take what California is doing and see if it is something we can 
offer nationwide as an option in the next farm bill.
    Mr. Costa. Thank you. Mr. Bozic, I only have a little time 
left, but you talked about competition with dairies, and you 
talked about being able to move on contracts. In California--
the milk pooling effect went into effect, dairy contracts are 
critical. How do you think we bridge that gap with so many 
belonging to co-ops? 56 percent of the milk produced in America 
is from members of co-ops.
    Dr. Bozic. A few seconds only for this answer. I believe 
that you should look for industry to provide proposed 
solutions. It is the role of academics to elevate issues for 
debate, to analyze proposed solutions, to project trends, et 
cetera. But when it comes to solutions, I don't think that it 
is up to us in academia to be the priests from the ivory tower 
church. We need to look for industry to come forward with 
proposed solutions, and then we can analyze them. I do believe 
that we will see a vibrant debate on this in the months to 
come.
    The Chairman. Thank you very much. The gentleman's time has 
expired. And now the gentleman from California, Mr. LaMalfa, is 
recognized for 5 minutes.
    Mr. LaMalfa. Thank you again, Mr. Chairman, and thank you 
to our second panel for appearing with us today to help educate 
us on how to best move forward in this new farm bill with 
regards to dairy. I wanted to, with Mr. Durkin here, go over 
just some of the nuances you were talking about in your 
testimony. As we know, market price for milk is based on 
several factors, such as butter fat, and solids, and other 
things that I am not greatly an expert on here, but there is a 
rate set, the rice I grow, for example, at home, what is the 
milling quality of my rice as it comes out, broke ends versus 
whole kernels, and such like that.
    So we all understand that kind of thinking, so you have 
these input values, and then you also have the costs, the 
processing costs, and the terminology used is called make 
allowances, so what we are looking at is that data on cost 
inputs, and why that is important is very reflective of today's 
costs--or should be reflective of current costs, whatever year 
it is, of doing business.
    And so, in previous conversation and today, what we seem to 
have is very old data from these cost studies, cost 
reflections, that are, in some cases, 15 years old, and a more 
recent one may have been done, and it may be seen as accurate, 
but right now, with costs changing practically hourly because 
of energy, because of feed, lack of feed, drought, whatever, it 
seems to me there needs to be an ability to have a very adept, 
very nimble way of keeping costs at the forefront so that 
prices are going to reflect that, and the industry is healthy. 
So, with inflation the way it is, I am not even sure how you 
keep that roller coaster somewhat in line, but we would love to 
hear what ideas or innovations that we could do to keep it 
reflective of current costs to drill down on that point, how 
often should the USDA conduct these cost studies to try and 
have some level of accuracy in the make allowances portion of 
cost to the industry?
    Mr. Durkin. Yes. I think we would say on a regular basis, 
obviously, sooner than 15 years, it would be there, so we would 
advocate, from a Leprino standpoint, to do it on an annual 
basis. If it becomes too burdensome, from a cost standpoint, 
from a USDA perspective, or even some plants--or other 
companies, there may be an indexing that could be done on a 
basis, so you do a cost study every other year, or every 2 or 3 
years, and then you could index some things after that. So that 
is a--I think a way to get at that. But if you look at--the 
recent data would suggest there is a--and then we know it is 
outdated, it would--says there is close to a 30 percent 
differential from where it was in the old cost study to the new 
one. And then on top of that reflect the current cost, so it is 
probably----
    Mr. LaMalfa. And which years of the two?
    Mr. Durkin. Excuse me?
    Mr. LaMalfa. Between the 15 year old one and the more 
current one is--
    Mr. Durkin. Correct.
    Mr. LaMalfa. And how about from the one that is most 
current and, say, today, with----
    Mr. Durkin. Yes. If you were add that too, in excess of 40 
percent.
    Mr. LaMalfa. Forty percent between the last one and the one 
that isn't done?
    Mr. Durkin. Correct.
    Mr. LaMalfa. Wow. That is tremendous. So you feel if you 
did a current deep dive, after that it could be kept up with a 
less complex indexing?
    Mr. Durkin. It could be, and I think that is a way to look 
at that. I think there is some conversation with industry, as 
well as the House Agriculture Committee, to talk about what 
makes the most sense, but--we would be happy with an annual, 
but if that becomes too burdensome from a cost standpoint as 
well as--I think there is a--maybe a simpler way to get at that 
as----
    Mr. LaMalfa. Well, do you think that would be a burden on 
producers, or on USDA products?
    Mr. Durkin. Actually, maybe both, and I was speaking 
specifically on USDA.
    Mr. LaMalfa. Yes. Okay.
    Mr. Durkin. It would not be burdensome from our standpoint 
as a company.
    Mr. LaMalfa. Yes, and probably for other producers as well, 
similarly, so----
    Mr. Durkin. Correct.
    Mr. LaMalfa. So, we just really have to get a reflection 
from USDA is it something that they could be doing annually, 
and how we could streamline their ability to do that?
    Mr. Durkin. Yes.
    Mr. LaMalfa. Okay. So, these cost studies in the past were 
only participated, as you mentioned, by about \1/3\ of the 
plants, and so do we need to have--well, I am sure it is skewed 
at that level. How do we have a--maybe a 90, 95 percent? Does 
it need to be requirement? How would we do that?
    Mr. Durkin. Yes, I would--we recommend it be a requirement, 
and I know that Dana Coale, who spoke before us, also put that 
out as well. So, we are required to submit prices to USDA. I 
would think that, as a requirement to submit prices, you are 
actually going to also submit your cost data as well.
    Mr. LaMalfa. Okay. What is the labor situation look like? 
We worked on the Farm Workforce Modernization Act, and I will--
in a word.
    Mr. Durkin. Listen, labor is a challenge across the board.
    Mr. LaMalfa. Yes.
    Mr. Durkin. Not only at the farm level, but up through 
processors, and I would argue the entire supply chain. So if 
one cog in the wheel is working, but you don't have the others 
going, whether that is transportation, rail, shipping, farm, or 
processor, we--the labor is an issue across the board.
    Mr. LaMalfa. Got to do it. Thank you. Thank you, Mr. 
Chairman. Thank you.
    The Chairman. And now we will hear from the gentleman from 
Georgia, Mr. Allen, is now recognized for 5 minutes.
    Mr. Allen. Well, thank you, Chairman Scott, and I want 
thank Ranking Member Thompson, Members of the Committee, for 
gathering today to discuss these important issues. And I want 
to thank our witnesses for sharing your insight on these 
important topics. Frankly, I hear this over and over again in 
the 12th District of Georgia, and we can't anticipate a lot of 
these things in writing the new farm bill because the last time 
we have had this kind of inflation, and supply chain issues, 
and whatnot was the early 1980s, and, of course, we know what 
happened to the family farm in the early 1980s. It was probably 
the biggest crisis we have had until now, and we lost a lot of 
farmers in early 1980s.
    So, what provisions do you make in a farm bill when these 
things happen? So that is 30 years ago, and so, of course, what 
I am hearing from our crop growers is input costs. I had a 
roundtable Friday afternoon, and they just had no idea. I mean, 
they don't know what things are going to cost next week. And 
the EPA is severely limiting them on fertilizers, and things 
that they need, and I know that you mentioned organic, and you 
are trying to do things a little different there, but, to get 
the kind of yields that we are getting in agriculture in my 
district, we have about two percent of the population in this 
country producing, what, 120 percent of the food needs.
    And, of course, I grew up on a dairy farm, and my dad 
elected not to go production ag. They wanted him to go to 200, 
300 cows, the processors, and he had to put the place up, to 
borrow the money, he had to put the place up as collateral, and 
he wouldn't do it. My dad went through the Great Depression. We 
paid cash for every car and everything he ever bought, and so 
he refused to do it, and in hindsight it was a really good 
move, because it was a tough situation.
    What I asked our roundtable on Friday was, okay, what are 
your suggestions, we have a fossil fuel crisis, we have a 
climate crisis, you name it, it is going on out there. So I 
would almost like to go down the panel, you all work hard, you 
have plenty of common sense. What do you all think needs to be 
done in this country right now to get us right side up? 
Because, what we are doing right now is unsustainable, 
particularly when you are talking about the farm bill, and 
funding some of these input costs and other things. So--we will 
start on this end, and go to there, and I will give the rest of 
my time to you all, and you tell me how we solve this thing.
    Dr. Bozic. Representative Allen, on the Dairy Margin 
Coverage we can introduce energy index, or we can increase the 
maximum coverage level from, for example, 9.50 to 10. That is 
Title I. In Title XI, in crop insurance, we can design 
Livestock Gross Margin, which is also a program that I help 
maintain, so that it allows increased emphasis on feed or non-
feed costs as well. They don't have non-feed costs in that part 
as well. On the climate, and new--and the--mentioning the loss 
of family farms, I would encourage the House Committee to look 
at helping small dairy farms meet the standards that the 
processors will require over the next 5 to 7 years as far as 
sustainability. It may be more difficult for some of them to 
meet that, and I would hate to see an increased consolidation 
pace because of the additional sustainability standards.
    Mr. Allen. Okay. We are--I have 40 seconds, so you all are 
going to have to go quick.
    Mr. Forgues. Well, I will just--I wanted to add, 
Representative Allen, that you mentioned input costs are maybe 
different in the conventional setting than the organic setting. 
I just want to let you know that our organic farmers would tell 
you the input costs are rising everywhere, so whatever we are 
trying to do when we are dealing with these kind of 
inflationary costs are going to need to be addressed for all 
farmers, because it is hitting everyone, and just wanted to 
make sure you knew that.
    Mr. Allen. Yes, sir. Thank you.
    Ms. Lesher. So I appreciate the confidence in us, thinking 
we would have the answer, because it is--I wish we all did. 
But, work on the DMC to extend the cap so that more milk is 
covered, because we have losses on all the milk, not just the 
first 5 million pounds that we produce. I also think we need a 
handle on labor, having access to guestworkers and things like 
that. We need access to technology. Assistance in buying 
technology, and getting involved with technology, is a big 
thing for us, and costs.
    Mr. Allen. Okay. Great.
    The Chairman. Thank you.
    Mr. Allen. I yield back.
    The Chairman. The gentleman's time has expired. And now the 
gentleman from California, Mr. Carbajal, is recognized for 5 
minutes.
    Mr. Carbajal. Thank you, Mr. Chairman, and thank you to all 
the witnesses participating on today's panel. Mr. Forgues, can 
you tell me some of the benefits of organic health to 
consumers, and what about benefits to the environment?
    Mr. Forgues. Thank you, Representative Carbajal. We are 
very excited about what we are seeing--I will start with the 
environment first--we are seeing opportunities to make a 
healthier environment, and we are spending a lot of energy 
right now within our cooperative to set up a system that is a 
little bit different than anything we are seeing out there that 
is talking about carbon reductions as insets within our 
organization. We are hoping to incentivize our farmers by 
paying for carbon sequestration that they are doing on their 
farms, and helping them get money and support to then leverage 
with--let us just say EQIP and NRCS to do more and more 
projects to help raise our goal of being carbon neutral by 2050 
without buying offsets, by really doing it on our farms. And we 
are going to offer that opportunity for other partners of ours, 
and customers, to join in with the work we are doing. I think 
it is really vital that as that process moves forward, that we 
all look at ways, and we can find ways, to make our environment 
better.
    As for the health for consumers and customers, we continue 
to tout the work that we are doing. Healthy cows, healthy soil, 
leads to healthy products, that leads to healthy people, and we 
are very excited to be able to offer that opportunity to the 
public. Organics is not a religion, it is a production method, 
and we are happy to be able to give that opportunity to 
consumers through the production methods that, if they want to 
be able to have a certified organic product, it is available to 
them. We look forward to being able to continue to show those 
benefits to the environment, and to the general population, 
through studies, and through other work we are doing.
    Mr. Carbajal. Great.
    Mr. Forgues. Thank you.
    Mr. Carbajal. More on that, what kind of resources does the 
organic dairy industry need from Congress to continue to 
operate?
    Mr. Forgues. I think that there is a really big opportunity 
to start talking about research and farm resiliency. Again, 
that is a mantra I am going to continue to drive home. There 
are ways to help better farms, better the farmers' livelihoods 
and income that might not just be about supply and demand of 
dairy, because it is so important, right? No one is thinking 
that it is just about a farmer and their milk check. It is that 
community piece. It is rural livelihoods that are on the line 
here, and rural economies. And so we have to find ways to make 
the farms more resilient, and that may mean finding other ways 
to provide income streams, which I think is exciting, because 
it also can help our environment, help our energy issues, and 
so I think the Federal Government can do a lot by putting money 
towards those programs, and it helps our organic farmers, but I 
think it helps every farmer if we are able help small family 
farms become more diverse and more resilient on their farms.
    Mr. Carbajal. Thank you. Dr. Bozic, can you expand on 
what--some of the reasons behind U.S. milk production utilizing 
beverage milk products is projected to fall over the next 
decade?
    Dr. Bozic. Lower fluid milk sales, and more milk going to 
manufacturing. So our per capita consumption of milk has been 
falling steadily for decades. Recently the gains in population 
have not been high enough to offset that, so the total volume 
of fluid milk is trending down for the last about 10 years. In 
the meantime, we consume more cheese domestically on a per 
capita basis, but we also are--when we are exporting, we are 
exporting storable or semi-storable dairy products. 15 years 
ago we only exported about five percent of U.S. milk 
production. We are about to be 20 percent of U.S. milk 
production very soon. And, going forward, exports are going to 
be critical. So exports and manufacturing dairy products up, 
fluid milk sales down, and, as a result, percent of milk 
utilized in beverage product will fall.
    Mr. Carbajal. Thank you. To that end, what do you see as 
the biggest challenge to smaller dairy producers? Do you see a 
place for them in the industry in the future, or will 
consolidation continue to the point there are no more small 
dairy producers?
    Dr. Bozic. Dairy Margin Coverage was truly a momentous 
change that I believe substantially reduced the pace of 
consolidation in the dairy industry, and did--will afford dairy 
producers over the next--smaller dairy producers over the next 
decade to be financially viable. The new emerging challenge may 
be sustainability standards that are coming up--that will be 
required by the buyers of dairy products to dairy processors, 
whether they are private or cooperatives, and then cooperatives 
will have to ask their members to--and private processors will 
have to ask their patrons to oblige with--and if such 
technology is more financially viable on larger farms than 
smaller farms, that may, again, increase the consolidation 
pace.
    Mr. Carbajal. Thank you.
    The Chairman. The gentleman's time, unfortunately, has 
expired. Now the gentleman from Indiana, Mr. Baird, is now 
recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman and Ranking Member. We 
really appreciate all the witnesses here, and the expertise 
that you share with us, because you are on the front lines and 
the cutting edge of the industry, and agriculture is so 
important to our country, as well as the district I am from in 
Indiana. And so, my first question goes to Ms. Lesher. And I 
know dairy farmers have endured significant volatility in 
recent years, especially during this pandemic. Could you share 
with us, because I think it is important for us, as a 
Committee, to understand the role these cooperatives play in 
helping farmers through these tough challenges? Go ahead.
    Ms. Lesher. Thank you for the question. I think that one of 
the benefits of a cooperative is the fact that they share 
information with their membership. They help us encourage 
people to participate in programs like DMC, sign up for that 
safety net. I call it an insurance policy. The co-ops have been 
able to help sustain, and of--and, again, as I mentioned 
earlier, I know I am going to get a milk check every single 
month. When I ship my milk, I know they are coming to pick it 
up, I know it is going to--I will get paid for it, so they 
offer a lot of stability, and they offer a lot of technical 
expertise to our family farms.
    Mr. Baird. Absolutely, and that hasn't changed over the 
years, has it? That steady income is pretty important to the 
viability of those farms, including dairy farms. My next 
question goes to everyone. I understand they are calling for 
the Dairy Forward Pricing Program to be permanent in the next 
farm bill reauthorization, so do any of the witnesses have 
thoughts on that proposal? And, as a follow up, would it be 
supported by all sectors of the dairy industry? So, feel free 
to go ahead. Ms. Lesher, we will start with you.
    Ms. Lesher. I am sorry, I missed part of the question. The 
dairy----
    Mr. Baird. The Forward Pricing Program. There is a call for 
that to be included in the next farm bill----
    Ms. Lesher. Yes.
    Mr. Baird.--and so I want to know what your thoughts are 
about that, and I want to know about whether or not all the 
sectors of the dairy industry would support that.
    Ms. Lesher. So it was an additional risk management tool 
for dairy farmers, something that was new to us, and we are 
still learning how to navigate through the system, but I think 
anything that will be in place to help mitigate risk is 
definitely something we need to continue.
    Mr. Baird. Yes. Mr. Durkin, how about you?
    Mr. Durkin. Yes, we are fully supportive of the program. 
And to your question, does it have support, and our mind and 
our understanding is that it has universal support across the 
dairy industry, so we think it just makes sense. The challenge 
is, you think about it, it expires at the end of September, so 
the ability to go beyond September, before the farm bill is 
actually approved, farmers aren't going to be able to hedge 
anything, and really, when you go 6 months out, you start to--
the validity of the program starts to fall apart, so that is 
the--really the need to make it permanent.
    Mr. Baird. Good information. Thank you. Mr. Forgues?
    Mr. Forgues. Yes, thank you for the question. I don't 
believe that there are any issues on an organic level that we 
shouldn't have everyone involved with risk management tools. 
The more tools, the merrier. I think we have to find ways to 
take risk out of the very complex piece of dairy farming, so we 
would be supportive of that as well.
    Mr. Baird. Thank you. Dr. Bozic?
    Dr. Bozic. Thank you for the question. I am not aware of 
any farm groups that would oppose this proposal.
    Mr. Baird. Well, thank you very much, and I yield back.
    The Chairman. The gentlewoman from Minnesota, Ms. Craig, is 
now recognized for 5 minutes.
    Ms. Craig. Well thank you so much, Mr. Chairman, and thank 
you to the Ranking Member, Mr. Thompson, for today's hearing on 
the farm bill provisions. It is a critical topic in the farm 
bill, given the many benefits that the dairy industry provides 
to folks across the country. Minnesota's Second Congressional 
District is home to more than 350 dairy farms, and more than 
45,000 milk cows that account for more than $200 million in 
annual sales of dairy products. The family farmers on the 
dairies across the district are a key part of our rural economy 
and communities.
    Over the past year, I have had the privilege of visiting 
family dairies in my district, like Zweber Farm in Elko New 
Market, and the Buck Family Dairy in Goodhue. I have heard a 
lot about the challenges facing the industry, and the ways in 
which Federal programs are impacting those operations. One of 
those programs is, of course, the Dairy Margin Coverage 
Program, and I first want to turn to Ms. Lesher. Ms. Lesher, in 
the 2018 Farm Bill it enacted the Dairy Margin Coverage 
Program, which I know has been just an important safety net to 
producers in Minnesota. Can you talk a little bit about what 
factors you weigh, and how you decide to sign up for the 
program each year?
    Ms. Lesher. Thank you very much for the question. So, on 
our family farm, it is a no brainer to sign up for DMC. I mean, 
it is like an insurance policy. It is one of those things you 
invest in, and you know it is there if you really need it. You 
hope you don't. We hope our margins are larger than what we are 
insuring for, and we have always bought in at the highest 
possible coverage. It is an easy way to help mitigate some of 
our risk.
    Ms. Craig. That is incredibly helpful as we start to think 
about the 2023 Farm Bill. Turning now to another topic which 
has come up during visits with dairies in my district, and that 
is the attention that producers are paying to land care and 
management in response to both increasingly variable weather, 
and also changes in consumer demand, so I would like to ask 
this question for each of the panelists here today. Can you 
describe how your operations are dealing with the more 
unpredictable weather patterns, and the increasing consumer 
demand for climate friendly products? I know that these are 
issues that family dairies in my district care deeply about, 
and I am curious to hear more about the ways you are working on 
them as well. So let us start with Mr. Forgues.
    Mr. Forgues. Thank you, Representative Craig. It is a great 
question that you are asking. I think it is really relevant for 
lots of reasons. It can be a business relevance because, as we 
are trying to forecast the supply that we are going to see from 
farms across the country based on biological systems that are 
affected by weather. And then at the same time, part of a 
marketing cooperative that is trying to continue to find ways 
to represent our products in a way that is authentic and 
special in the products that we are offering to the consumer, 
and to our customers. So we continue to look at farm 
resiliency, and really dealing with climate in everything we 
do.
    Let us be real, all of us in dairy, conventional, organics, 
Scope Three emissions is the biggest challenges that we are 
going to have, or at least one of the largest challenges that 
we are going to have as we move forward. So at Organic Valley 
right now, like I mentioned, we are already launching into a 
carbon program right now that really works on insets, and 
working with our farmers to give them dollars for the work they 
are doing. I think that the other important piece is really to 
understand the science of this, and we are deep into the 
science of what a life cycle analysis of your carbon life cycle 
is about, and we really think that that is going to be an 
important key for all of us as we move forward, to really focus 
on knowing where you are with carbon, and where you are going 
to move in the future.
    Ms. Craig. I appreciate that. And I have about a minute 
left, so, Mr. Durkin?
    Mr. Durkin. Yes. Thank you for the question, Congresswoman. 
Obviously it is a huge challenge, and we are willing to face 
that. Obviously we signed on to the Stewardship Commitment as 
part of the Innovation Center, which is a subset of DMI. This 
global dairy platform. We honor that as well with the pathways 
to net-zero. It is a huge challenge. When you think about 
this--obviously we just talked about it with Travis, about 
Scope Three, which obviously one and two is our key primary 
responsibility, but we have to be in partnership with our 
farmers to make sure we are going to get there. We are seeing 
huge push from our customers as well, so we are primarily B2B, 
but our customers that we go to, some of the major food 
suppliers in the world, it is definitely a challenge that we 
are going to have to face.
    Ms. Craig. I am going to give Dr. Bozic the last word, 
since I haven't heard from him.
    Dr. Bozic. I can only repeat what I answered before, 
Representative Craig, that Congress should look to the industry 
for advice on how to make sure that smaller family dairy 
farmers are not left behind in implementing additional 
requirements that they will need to meet to stay in business. 
Some of these technologies work better when you have more cows 
to spread fixed costs over more head, and we should not--in 
solving the climate, we should not allow the pace of 
consolidation to pick up again in the dairy industry.
    Ms. Craig. Thank you so much. With that, Mr. Chairman, I 
yield back.
    The Chairman. The gentleman from Ohio, Mr. Balderson, is 
recognized for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman, and thank you to 
all the witnesses for being here today on Panel two. My first 
question is for the whole panel. Trade is critical for American 
agriculture, and the dairy industry is no exception. Ms. 
Lesher, in your testimony you emphasized the importance of 
trade for the dairy industry, and how exports account for 17 
percent of production. Can any of you discuss in more detail 
how important the Market Access Program and the Foreign Market 
Development Program are for the dairy industry? And who may 
ever want to go first, go right ahead. Thank you.
    Ms. Lesher. I will be happy to answer the question just to 
get started. Trade is very, very important to the dairy 
industry, and most segments of our agriculture in the United 
States. We do need to have some new free trade agreements. We 
are limited in those regards, we also have some tariffs in 
place that are limiting what we can do. The challenges of 
getting through the ports have created some issues, so we do 
have some things we need to work on to continue to grow our 
opportunity and maintain a stable income for farmers through 
exports.
    Mr. Durkin. Yes, I would add to Ms. Lesher's comments that 
the trade is usually important. I know Dr. Bozic has talked 
about the amount of dairy solids being exported. We are right 
around 25 to 26 percent, which is in excess of what it is for 
the entire dairy industry as a whole in the U.S. We have a huge 
opportunity in the U.S. to actually capture a large share of 
the dairy growth on an international market, so clearly the 
current programs that we have in place are important, but I 
would emphasize, and I know Lolly talked about it as well, more 
free trade agreements, more tariff issues, and non-tariff 
barriers that are out there have to be eliminated for us to 
capture that. We are in a prime position, as a U.S. dairy 
industry, to capture that growth, and, absent some of those 
programs, I think it is going to be a challenge for us to do 
that, as well as--I know we talked about some of the supply 
chain challenges as well.
    Mr. Balderson. Thank you. Did anybody else want to add--is 
that good? Okay. I had a follow up, but I think you just 
addressed it very well. My next question is for Mr. Durkin. You 
mentioned in your testimony the growth in milk product exports 
from the U.S. How much additional growth in export markets do 
you anticipate in the coming years, and what impact will this 
have on the domestic industry?
    Mr. Durkin. We are, exports are up, there is no doubt about 
that, and that is even despite some of the supply chain 
challenges we have, and I testified earlier, even with that, we 
have actually lost some market share in key markets, China 
being one, and a few others. So it is a huge opportunity, as I 
mentioned, for--continue to grow, and we need to work together, 
the entire dairy industry, as well as government, to kind of 
bring down those barriers, and help with the supply chain 
issues to be able to handle that. But we are bullish on 
international shipments, and hopefully some of those barriers 
will start to ease.
    Mr. Balderson. Okay. Thank you all very much. Mr. Chairman, 
I will yield back my remaining time.
    The Chairman. The gentleman from Iowa, Mr. Feenstra, is now 
recognized for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Scott, Ranking Member 
Thompson. Thank you, Members. Thank you each one of you for 
testifying today. This is so important to me, and I want to 
sort of pivot off what Congressman Balderson stated on exports. 
I mean, this, to me, is a great opportunity for the United 
States, especially in the milk industry, or I should say in the 
dairy industry, to create more opportunity for our producers. 
Dr. Bozic, you referenced some of this stuff in your testimony. 
Can you look at what can we do to create better trade partners? 
What can Congress do, and what can the Administration do? I get 
concerned that the Administration is not doing a lot in that 
trade sphere right now, and I would just like your thoughts on 
this area.
    Dr. Bozic. Thank you for your question, Representative. We 
should strictly enforce the existing trade agreements, 
particularly with our neighbors to the north, and beyond that, 
we should aggressively pursue new trade agreements that open 
markets for us in Asia, Africa, and other countries--other 
regions, where we have the ability to add a lot more exports 
over the next 10 years. Our two main competitors, New Zealand 
and Europe, are facing problems. New Zealand discovered they 
are an island, and Europe is moving towards very, very 
aggressive climate-related policies that will see perhaps the 
number of cars in Europe--the number of cows in Europe reduced. 
That opens huge opportunity for us.
    Mr. Feenstra. Yes.
    Dr. Bozic. Industry will deliver if market access is there. 
The primary responsibility of the Congress and the 
Administration is to expand market access.
    Mr. Feenstra. Yes. I'm glad you said that, about cows and I 
know there was a question asked a while ago, I have so many 
small producers in my area in the Fourth District--we don't 
need more regulation. We can do things voluntarily, and we have 
the opportunity to do that, but, my goodness, the last thing we 
need is more regulatory environment. Dr. Bozic, I also want to 
also address something that you had in your testimony regarding 
pricing transparency, and the inability of dairy producers to 
shop around for the best farmgate milk price. Can you expand on 
that? Because, to me, this is a very critical component.
    Dr. Bozic. So up until--thank you for the question. Up 
until about 7 years ago, a producer could reach out to 
processors in their area and say, if I were to move my milk to 
you, if I were to start shipping my milk to you, what would you 
pay me? And then processor will say, well, send me your milk 
marketing records for the last 2 years and I will tell you. So 
then they would see what they would get paid over the last 24 
months versus what they are getting paid from their current 
milk buyer, and, based on that--that is one of the factors they 
would consider in where to ship milk. They can't do that 
anymore. The people are having very hard time moving.
    Mr. Feenstra. That is correct.
    Dr. Bozic. So if you cannot move, what else can you do? 
Well, you can at least know where you are versus the others.
    Mr. Feenstra. But don't you think we should take action, I 
mean, this is a fundamental problem, don't you think?
    Dr. Bozic. I think it is very important.
    Mr. Feenstra. I agree. I agree 100 percent. Last word, Ms. 
Lesher. You are in it. You are in this business. What advice do 
you have for Congress as we move forward in the farm bill, and 
what can we do when it comes to revenue protections, or just 
even what are your thoughts in this whole dairy scheme?
    Ms. Lesher. So I think costs right now are excessive that 
that is one of the most limiting capacities. Labor is a huge 
issue, you have heard me mention that before, and technology.
    Mr. Feenstra. Yes.
    Ms. Lesher. No, but making DMC--the cap on DMC, re-
evaluating that, making it larger, because there are losses 
across the board in--on our farm first million----
    Mr. Feenstra. There is, absolutely, I am glad you said 
that. That is exactly right. It is across the board to 
everyone, that is right.
    Ms. Lesher. That is correct, so whatever we can do to help 
level that playing field, and help make sure that we can recoup 
as many costs as possible that would be incredibly helpful.
    Mr. Feenstra. Yes. Well, I thank you, and I appreciate all 
you do. I thank you for each one of your testimonies, but we 
have to understand, the dairy industry is the fundamental 
economic engine of food and our production, and we have this 
great opportunity, this great asset, to export around the 
country, and around the world, and I sometimes think we lose 
sight of that. And we are doing 20 percent right now, or a 
little more than that, but we have so much opportunity as other 
countries get away from it, as you noted, Dr. Bozic. So this is 
my passion, and I fully hope to make recommendations as we move 
forward in the next farm bill. So thanks to each one of you, 
and I yield back.
    The Chairman. Thank you. And now the gentlelady from 
Florida, Mrs. Cammack, is now recognized for 5 minutes.
    Mrs. Cammack. All right. Thank you, Mr. Chairman. As you 
can see, we kind of came in here sliding hot. There are votes 
that have been called, and I know we are all trying to hustle, 
so I will just jump right into it.
    Just generally for all of our witnesses here today, one of 
the main concerns that I hear from farmers of all types--
keeping in mind that I represent a state that has not only 300 
different commodities and specialty crops, but we also are the 
Dairy Belt for the Southeast--especially dairy producers, it is 
the lack of a legal workforce. Now, I know that H-2A is not a 
good fit for dairy. It is a seasonal program when we need year-
round. There are a lot of key fixes. Would you support moving 
or creating a secondary guestworker program under USDA, 
separate of H-2A, that gets rid of the adverse wage effect, 
creates a long-term certainty for employees and employers, and 
helps solve some of these year-round guestworker issues that we 
have? I would love to hear just a real quick yes/no from each 
panelist here today.
    Ms. Lesher. Thank you for the question. Yes, we would be 
very much in support of something that would have a way to 
answer some of those issues that we have about year-long 
stability for our employees, so that would be a big help.
    Mrs. Cammack. Beautiful. Thank you.
    Mr. Durkin. Yes. Well, as a processor, we need our farmer 
partners to be productive, healthy, and growing, so absolutely 
we agree.
    Mrs. Cammack. Wonderful.
    Mr. Forgues. Yes, well, we would love to have labor for our 
farms, so absolutely.
    Mrs. Cammack. Wonderful. Thank you.
    Dr. Bozic. As an academic, I don't believe I should weigh 
in support of a particular proposal, but I do want to say that 
I believe that it is very important for our country to be based 
on a rule of law, and that everything is regulated by law, not 
in the underground economy.
    Mrs. Cammack. Absolutely. Thank you. I just wanted to make 
sure we got that on the record. Now, Mr. Durkin, in the 2018 
Farm Bill, NMPF and IDFA requested a change to the formula for 
pricing for Class I milk--obviously, Florida, we are a Class I 
market--which was adopted by Congress and enacted. The purpose 
of this change was primarily to remove ambiguity from the 
pricing formula and to allow processors more certainty as they 
managed risk in the Class III and IV futures markets. Has the 
new formula been successful in this regard, and are more 
processors hedging risk in the futures market?
    Mr. Durkin. I have two questions on the Class I mover 
component of it, we are not part of that program, given we are 
basically cheese and whey products, so we'll be in the Class 
III area, so I will yield to some others on the panel to be 
able to answer that. We are not currently in the Dairy Hedging 
Program, and that is--that--but we are fully supportive of the 
program. IDFA is, and the only reason we are not is we are--we 
buy our milk and sell all our components, so, in fact, we are 
fully hedged, so--but we are fully supportive of the program, 
as--in my testimony to that as well, and you have both IDFA, 
National Milk, everybody is supportive, so we think it is the 
right thing to do.
    Mrs. Cammack. Thank you for that. Ms. Lesher--is that 
right?
    Ms. Lesher. Yes.
    Mrs. Cammack. In my district we have a multi-generation 
family there, and they are the Leshers, so kind of close. As 
you know, USDA created the Pandemic Market Volatility 
Assistance Program to compensate producers for losses relative 
to the old ``higher up formula'' for the Class I mover. Can you 
comment on that program, or any additional work being done to 
address uncovered losses?
    Ms. Lesher. So, we appreciate that question very much, and 
we appreciate the assistance that the Pandemic Market 
Volatility Assistance Program offered to dairy farmers. We have 
not totally recouped all the losses that we had a result of the 
Class I mover changing. Nobody anticipated what would happen 
happened.
    Mrs. Cammack. Right.
    Ms. Lesher. We have not gotten there yet, as far as 
recouping those losses, but hopefully that can be addressed at 
some time.
    Mrs. Cammack. We are looking forward to trying to rectify 
that, so I appreciate you weighing on that. Dr. Bozic, in your 
testimony you discussed the declining share of demand for fluid 
milk. In fact, I believe you state that we are now exporting 
more milk solids than the U.S. drinks. As this trend continues, 
how do you think it will impact the industry generally, and 
milk pricing in particular?
    Dr. Bozic. Congresswoman Cammack, for your district I think 
Federal Orders will be extremely important for the foreseeable 
future, very relevant as well, and I believe that some big milk 
buyers would exert more market power on cooperatives and dairy 
producers in your region were it not for mandated prices for 
Class I, so I am fully in support of Federal Orders there. 
Unfortunately, for a majority of the country, where milk is 
used in manufactured dairy products, Federal Orders will become 
increasingly relevant, and that is the part of my testimony in 
which I have been--build further in my written remarks.
    Mrs. Cammack. I appreciate that, thank you. My time has 
expired. I yield back.
    The Chairman. The gentleman from South Dakota, Mr. Johnson 
is now recognized for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman, and I will start with 
Ms. Lesher. I know we talked a little bit about markets, and 
about the farm bill, and specifically what can be done with the 
two programs to help expand trade. We didn't talk in a lot of 
depth, so, Ms. Lesher, as we look to the next farm bill, are 
there any particular tweaks, or expansions or changes we should 
be looking to make to help you all find new markets abroad?
    Ms. Lesher. So thank you very much for the question. Yes, I 
do believe there are some tweaks we need to do. Some of it 
would be some of the trade barriers that we are facing, some of 
the lack of free trade agreements, not following the ones that 
we have at this point in time, and then--and really endorsing 
those. And another thing would be the use of common names. So, 
there are some things like--whether it be parmesan or bologna, 
things like--the common name usage, we need to address that 
situation so that those products can be marketed globally 
without so much of a drama.
    Mr. Johnson. And so as we talk, ma'am, about making sure 
that the execution of these deals is as good as what the deals 
say they should be in paper, I know Canada was a little slower 
to make good on their commitments, their new commitments out of 
USMCA. In your assessment, where are we at today, and are we 
getting closer to the target?
    Ms. Lesher. I will be honest, I really don't know 
specifically on that issue, but I am sure National Milk would 
be happy to get back to you.
    Mr. Johnson. Yes, sure, that would be good. And are there 
any particular market opportunities that you are most excited 
about? I mean, countries that we should be really putting some 
lead on the target with.
    Ms. Lesher. I think, as we look to South Africa, Africa, 
South America, other places like that offer tremendous 
opportunities for us if we could just have access to those 
markets.
    Mr. Johnson. Yes, very good. Thank you. And then, for any 
of the other panelists, I want to give you an opportunity, if 
you want, to respond to my line of questioning. Anyone?
    Mr. Durkin. Congressman, yes, thank you for the question. 
There are huge opportunities, and Ms. Lesher talked about one, 
but I would focus on primarily that--I don't know if it is 
secondary, but I--we would put it as more primary, and the 
primary now is the Asia-Pacific region. If you look at--where 
we have New Zealand as being one of the primary exporters of 
dairy products in that area, we have a huge competitive 
disadvantage, really, in just about every country that we 
compete in, from a tariff standpoint, so that is a big 
opportunity. And kind of--if we can level the playing field, 
and we actually still do very, very well relative to them, but 
it is a challenge we face every day.
    Mr. Johnson. Yes, and I think somebody last week told me 
that India used to be a very, very strong market, and now has 
kind of whittled away to nothing. Is that about right? Am I 
remembering that right?
    Mr. Durkin. Can you repeat what country?
    Mr. Johnson. Yes, India. And it may not be for your 
specific company, but do you think that is true for the dairy 
industry generally?
    Mr. Durkin. Yes, well, in general it is very difficult to 
go--import into India just because--given the rules.
    Mr. Johnson. Yes. Okay. Anything else from any of the other 
panelists? Thank you very much, Mr. Chairman. I yield back.
    The Chairman. Thank you. And now the gentlelady from 
Minnesota, Mrs. Fischbach, is now recognized for 5 minutes.
    Mrs. Fischbach. Thank you, Mr. Chairman. I have been 
watching the proceedings, and listening, and I really 
appreciate the panelists for being with us today, and all of 
the thoughtful questions that Members have asked. And I just 
wanted to kind of ask, for any of the panelists, as you all 
know, participation rates in the DMC and its predecessor, MPP, 
have been a challenge, historically. And, in Minnesota, where I 
am from, participation rates in DMC have been higher than most 
of the rest of the country. And are there lessons to be learned 
in terms of--either incentives marketing, or even mechanics of 
these programs that can be carried forward into the new farm 
bill? For any of the panelists, if someone wants to jump in.
    Dr. Bozic. Congresswoman Fischbach, thank you for the 
question. I work in Minnesota, as you know, and we work very 
closely with the industry in Minnesota to educate producers 
about Dairy Margin Coverage, before that Margin Protection 
Program, as well as Minnesota has always been quite high in the 
adoption rate. I would like to think that it has something to 
do with the educational programming that my colleagues at the 
University of Minnesota and myself have done. Beyond that, as 
you know, our state also has a state level dairy program, which 
is additional subsidy for Dairy Margin Coverage. The 
participation goes down where producers believe that premiums 
are too high relative to where markets are at. So one way to 
address that is to make premiums be capped at 15, but 
potentially go down as markets are projected to be far above 
9.50, but that would complicate the delivery of the program. 
But if you were to do that, participation would be more stable 
in the program.
    Mrs. Fischbach. Thank you very much. And maybe, if there is 
anyone who just wanted to add anything to that? Otherwise, I 
can move on. Mr. Durkin, you mentioned the outdated cost study 
used to determine make allowances. Now that it is more than 15 
years old, I know there is another study that is currently 
underway, but, with high inflation, that study may be outdated 
by the time it is delivered. Assuming inflation gets under 
control, with what frequency should the USDA conduct those cost 
studies to inform accurate make allowances?
    Mr. Durkin. Speaking specifically for our company, we would 
advocate to be on an annual basis, but if that becomes too 
burdensome for either USDA, or certain processors in the United 
States, we would be okay with moving that to every couple of 
years. But what you may be able to do then, too, is add an 
index to that, an inflationary index that is a component of 
that, and, again, it just gets adjusted when the cost studies 
are done.
    Mrs. Fischbach. Okay. Thank you. And I guess I would just 
like to give the panel the opportunity, if there is anything as 
we are very close to wrapping up, is there is anything that you 
wanted to add to any of the comments that have been made or 
anything, just give anybody the opportunity, with my extra 
minute and a half here. And if not, Mr. Chairman, I yield back.
    The Chairman. All clear. Thank you so very much. And, lady 
and gentlemen, I want to thank you, on behalf of our 
Agriculture Committee. This has been an excellent hearing, and 
you brought out some very, very important points. For example, 
it was clear that the improvements that led to the creation of 
our Dairy Margin Coverage during the last farm bill have been 
beneficial. We are very delighted to hear that. And I am 
excited to keep optimizing the program we are doing.
    But there is one issue here that you all have brought even 
greater attention to, and that is the status of our small 
family farms within dairy, as they are within our beef area, of 
which both of you belong, our beef, our milk. You can't get 
more vital anchors of our food sources than these two. And so 
this is why, as I said earlier, I want to make it known, we are 
determined to address this issue of helping preserve our small 
family farms. And so, the testimony that you all gave to us 
will help us as we move forward to draft legislation to do 
precisely that. I am committed to that. I was born on a farm, 
grew up on it. A family farm, passed through generations. But 
now we have younger generations of family farms who are making 
the decision not to enter, and because of serious issues. So, I 
believe there is no greater issue we need to tackle than 
preserving the foundation of our agriculture system in this 
nation, and that is the family farm.
    And so I want to thank you for it. I want to thank you, Ms. 
Dana Coale, the two who were in here earlier, who were the 
Deputy Administrator of the Agricultural Marketing Service. Mr. 
Scott Marlow was in, Deputy Administrator for the Farm Service 
Agency. And now our second panelists, Ms. Lolly Lesher, she and 
her husband own and operate Way-Har Farms in southeastern 
Pennsylvania. Thank you. And Mr. Mike Durkin, President and 
Chief Executive Officer of Leprino Foods Company, thank you. 
And Mr. Travis Forgues is the Executive Vice President of 
Membership, CROPP Cooperative and Organic Valley, and Dr. Marin 
Bozic, Associate Director of Midwest Dairy Foods Research 
Center. I want to thank all of you. You have been very helpful. 
We may need you back again as we pursue the big issue, saving 
our family farms, because you all are the ones that can help us 
find out how we can do it. And so I just want to thank you for 
it, God bless you, and safe travels. Thank you.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions posed by a Member, and now this 
hearing of the Committee on Agriculture is adjourned.
    [Whereupon, at 1:34 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Submitted Blog by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania


[https://southernagtoday.org/2022/06/farm-level-milk-prices-set-record-
in-back-to-back-months/]


Farm Level Milk Prices Set Record in Back-to-Back Months
          Burdine, Kenny. ``Farm Level Milk Prices Set Record in Back-
        to-Back Months''.\1\ Southern Ag Today 2(26.2). June 21, 2022.
---------------------------------------------------------------------------
    \1\ https://southernagtoday.org/2022/06/farm-level-milk-prices-set-
record-in-back-to-back-months/.

    After dealing with incredible volatility for much of 2020 and 2021, 
dairy producers are benefiting from a sharply stronger milk market in 
2022. Prices for cheese, butter, and nonfat dry milk are running 
significantly higher than last year and are fueling farm level milk 
prices. The U.S. All Milk price set a record in March of 2022, then 
exceeded that level to set a new record the following month. From March 
to April, prices rose by $1.20 to a record level of $27.10 per cwt. 
Prior to March of this year, the record high milk price was set in 
September of 2014.
U.S. All-Milk Price
January 2014 to April 2022, $ per cwt


          Source: USDA-NASS.

    Like most all commodities, milk prices only tell part of the story 
this year. Dairy producers are dealing with higher production costs as 
feed, fuel, fertilizer, and other inputs are also much higher. While 
feed rations differ across all operations, the assumed ration for the 
Dairy Margin Coverage (DMC) program has become a common metric to 
estimate feed costs for dairy operations. DMC feed cost includes 
assumed quantities of corn, soybean meal, and alfalfa hay for a 
representative dairy operation.
    From April 2021 to April 2022, the estimated cost of the DMC ration 
has increased by $2.28 per cwt or 18%. The U.S. All Milk price has 
increased by more than enough offset that increase over the last year, 
but considering the increase in feed costs does put the historical 
price levels in a slightly different perspective. While milk prices are 
setting record highs, estimated returns above feed costs have reached 
levels comparable to what was seen at times in 2019 and 2020. And, they 
are not at the levels that were seen during 2014.
DMC Margin--U.S. All Milk Price Minus DMC Feed Cost
January 2014 to April 2022, $ per cwt


          Source: USDA-FSA.
                                 ______
                                 
  Submitted Article by Hon. Kat Cammack, a Representative in Congress 
                              from Florida


[https://www.tampabay.com/opinion/2022/03/08/florida-dairy-farms-need-
a-policy-update-column/]

Opinion \1\ D Guest Column
---------------------------------------------------------------------------
    1 https://www.tampabay.com/opinion/.

Brittany Nickerson-Thurlow
Florida dairy farms need a policy update
          While 150 cow operations still exist in Florida, the average 
        Florida dairy now has more than 1,300 cows, and policies from 
        dealing with climate change to immigration reform need to 
        reflect those new realities.
        
        
          My family's farm started as a 27 cow dairy my grandparents 
        financed. Over the generations, our family farms grew to a 
        milking herd that included 5,000 cows and employed 40 people. 
        From climate change and emissions control to immigration 
        reform, Federal policy needs to reflect these new realities.

Published Mar. 8, [2022]

    As they have been for generations, dairy farms are an important 
part of Florida's fabric. And as always, dairy farms overwhelmingly are 
family businesses--95 percent of U.S. dairies, in fact, are family-
owned and operated, according to USDA statistics.
    But what a dairy farm is also has been changing. The average size 
of a U.S. dairy farm has risen from less than 130 cows 20 years ago to 
more than 300 cows today. In Florida, family dairy farms are even 
bigger--while 150 cow operations still exist in Florida, the average 
Florida dairy has more than 1,300 cows.
    My own farm is part of this story. My family's farm started as a 27 
cow dairy my grandparents financed after my grandfather returned home 
from serving in the Army. In the 1960s, 27 cows was enough to raise one 
family with three sons. My dad and uncle decided to stay on that farm, 
buying two more small farms with their parents in the mid-1980s. Those 
three farms--and their 400 cows--provided for three farm families and a 
few employees.
    I grew up on one of those farms--I live next door to it today. When 
my grandfather retired after our fourth farm was built in 2003, the 
milking herd across all operations included 5,000 cows and employed 40 
people. As my generation graduated from high school and college, the 
then-four dairy farms split into two businesses. Today, those farms 
support six farm families, including my own, and 36 employees.
    That's a lot of change in three generations. And those changes are 
why, as part of the next farm bill and in Congress this year, Members 
of Congress need to remember the needs of dairy farms that are still 
family-owned, but much more complicated in how they're run. We're 
seeing missed opportunities from Washington to make a meaningful 
difference. We're hoping that this year, with elections and the work 
beginning on the next farm bill, we family dairy farmers might be 
heard.
    One example of missed opportunities is a benefit that's being 
distributed across dairy country right now: The Federal Pandemic Market 
Volatility Assistance Program. This program meant to make up for 
revenues lost during the early days of the pandemic because of a change 
to the Federal formula on how milk is priced. The Pandemic Market 
Volatility Assistance Program spends $350 million compensating farmers 
for losses of $750 million.
    Unfortunately, while it's well-intentioned, the program caps 
compensation at an amount that doesn't cover losses beyond what works 
out to the first 400 cows of an operation. That sounds like a way to 
help small, family farmers--but many family farms aren't that small, 
and many farms have multiple operations that give them an edge in 
payments.
    My cousins own three of our original four farms. Because of the 
rules, they were able to capture up to three times the Pandemic Market 
Volatility Assistance Program funds I received, despite the fact that 
my single-family farm produces more milk--and thus lost more money--
than their three together. Given the average size and mixed 
demographics of a Florida dairy business, it's easy to see how the 
effort falls short.
    Another missed opportunity is climate change. U.S. dairy is a 
global leader in reducing agricultural emissions, with a target of 
carbon-neutrality by 2050. Federal policy could better help dairies of 
all sizes transition to an even more sustainable future. While smaller 
farms play an important role in sustainability, the fact is that larger 
ones can make a big difference. Farms like ours are already part of the 
solution--we graze our cows on grass pasture that's sequestering carbon 
in our soil and absorbs carbon from the atmosphere 365 days a year. We 
also recycle all our water, and we re-use the manure from our cows as 
fertilizer. We could be an even larger part of the solution if policies 
catch up to our promise.
    Farmers also need immigration reform. Our current immigration 
system forces many high-quality workers into the shadows, making it 
impossible for families and businesses to plan ahead. Immigration 
policy often gets caught up in emotional debates that have nothing to 
do with farming--but lower-hanging fruit could be harvested through 
changes to visa programs that would make a temporary foreign workforce 
more workable for dairy.
    These are only some of the many challenges dairy farmers face--
everything from animal care to environmental stewardship is part of 
what makes a family farm work. And there's a lot of work to do. Family 
dairies are still doing what we do best--sustainably providing 
nutritious products to America and the world. Federal officials need to 
adapt to changes in how that's done to make sure the dairy industry, 
and the communities they serve, continue to thrive.

          Brittany Nickerson-Thurlow was recently elected vice-chair of 
        Southeast Milk Inc., Florida's dominant dairy co-op.
                                 ______
                                 
 Submitted Letter by Ed Maltby, Executive Director, Northeast Organic 
                        Dairy Producers Alliance
June 22, 2022

    Chairman Scott and Committee Members,

    The Northeast Organic Dairy Producers Alliance (NODPA), founded in 
2001, is the largest grassroots organization of organic dairy producers 
in the United States. It has remained true to its original goals of 
advocating on behalf of producers for a sustainable pay price, 
regardless of who they sell their milk to, and to protect the integrity 
of the USDA Organic Regulations. To learn more, visit www.nodpa.com.
    I was a dairy farmer for thirty years and have been farming both 
livestock and produce since I stopped dairy farming in 2000. I have 
been Executive Director of NODPA since 2005; served on the USDA Dairy 
Industry Advisory Committee in 2010; and serve on the Executive 
Committees of the National Organic Coalition and the Organic Farmers 
Association.
    Organic certification is the only third-party audited program in 
the U.S. and, as a Federal program, is subject to a variety of Federal 
policies, regulations and programs, along with the enforcement of the 
organic standard by the USDA's National Organic Program (NOP). NODPA 
has worked with the NOP and all stakeholders to develop and implement 
regulations developed from the National Organic Standards Board (NOSB) 
recommendations that improve the integrity of the organic seal; ensure 
a living wage for organic farm families and their employees and ensure 
consistent implementation of regulations across all regions and 
certifiers.
State of the Organic Dairy Market
    Since 2002, the retail organic dairy market has grown to 6.5% of 
the total domestic retail sales of milk products in 2021. It 
experienced growth of 7-15% per year in most years from 2005-2015, with 
the exception of the 2008-2009 recession. Its retail price per half 
gallon has been consistent, fluctuating between an average of $3.80 and 
$4.20 since 2008, according to data from the USDA AMS. Initially, the 
retail market was dominated by Horizon Organic, with CROPP 
Cooperative's Organic Valley brand in the top ten for retail sales. In 
the last few years, store brand or private label milk has dominated in 
sales, with Horizon in second place and Organic Valley branded product 
lower on the list of retail sales. The store brands are supplied by the 
large, vertically integrated companies in the West and Southwest, and 
by CROPP Cooperative, which sources its raw milk from a variety of 
different sized farms.
    The price paid to organic dairy farmers in the northeast had slowly 
increased with the growth in demand since 2001 when NODPA objected to a 
cut in pay price by Horizon Organic from $20 per hundred pounds to $19. 
Pay price peaked in 2015, at $38 per hundred pounds, with demand 
exceeding supply. Cost of organic dairy production in the Northeast in 
2015 was determined to be $35 per hundred pounds by an ongoing study 
conducted by the University of Vermont. USDA NASS's organic census 
showed that an increase in the number of organic dairy cows from 2014 
to 2015 was 1,068, while the increase in organic cows from 2015 to 2016 
was 38,326. Many of the large vertically integrated organic herds 
catering to the store brand companies used a loophole in organic 
regulation (Origin of Livestock) to dramatically increase their cow 
numbers, and by 2016 there was a surplus. This coincided with a 
slowdown in demand for organic dairy products, lax and inconsistent 
enforcement of organic regulation, increased consolidation in organic 
dairy and an increase in demand for plant based `milks.' By 2018, the 
Northeast pay price had dropped by up to 25% and has not recovered.
    The pay price average for 2022 is projected to be $31 per hundred 
pounds. After 5 years of a pay price below their costs of production, 
small- to mid-size organic dairy farm families are leaving the 
industry, with the data showing that only those larger herds of 300+ 
cows have the ability to survive at the current low pay price. There 
were two bright spots in the past couple of years; one being that the 
increase in sales during COVID did reduce the surplus; and CROPP 
Cooperative gave a 50 per hundred pounds (6 a gallon) increase in pay 
price in 2022.
    How is pay price determined? The organic pay price is determined by 
the two national buyers, vertically integrated large organic dairies, 
and the conventional price for balancing organic milk when there is 
oversupply. The national buyers are CROPP Cooperative and Danone NA, 
and the major independent supplier is Aurora Dairy. The two major 
buyers, with their own dedicated pool of milk, dominate the supply-
side; buying organic raw milk at a price they set because monopsony is 
prevalent in organic dairy. Each buyer has regional pricing depending 
on geographic location. They also have quality incentives and penalties 
that are similar but not identical. In many cases, a farmer's decision 
as to whom they sell their milk is determined by the pick-up route or 
processing plant that is nearest to their farm. Historical data shows 
that when there is a surplus of organic milk, the pay price drops 
across the board. It is only when supply is short or there is a new 
entrant into the supply market that pay price will increase, but not 
because farm operational costs increase or there is greater demand on 
the world market. Milk buyers have to bear the increased costs of 
balancing supply with demand, and this affects the pay price in both 
the conventional and organic market because any surplus has to be sold 
at a lower price. Pay price is now determined by the price that CROPP 
sets to compete in the store brand market since approximately 70% of 
its raw milk supply is sold into the store brand or private label 
market. The price that CROPP pays sets the price for what all organic 
producers are paid, although recently Danone, owners of Horizon 
Organic, has cut its pay price below CROPP's.
    We are talking about more than just organic dairying. We all know 
the multiplier effect of small- to mid-size operations that are the 
backbone of the rural community. In a letter to the USDA Secretary in 
September 2021, seven United States Senators and six Members of 
Congress used the phrase ``The organic dairy industry is an important 
economic engine in the Northeast and these farms serve as anchor 
businesses to many of our local rural economies,'' to describe the role 
of organic dairies. Organic Agriculture is also a climate smart system 
of agriculture. Science demonstrates that organic farming reduces 
greenhouse gas emissions, builds soil health and sequesters carbon, and 
fosters resilience to droughts, floods, and other extreme weather 
conditions. The practices pioneered by organic farmers, such as cover 
cropping, are being adopted more broadly in agriculture. All farmers 
can benefit from these cutting-edge practices to reduce greenhouse gas 
emissions and sequester carbon.
    Organic regulations require farmers to use soil building practices, 
such as crop rotations, cover crops, and pastured grazing for 
livestock, which have been proven to improve soil health and increase 
carbon sequestration. Organic is the ONLY federally regulated label to 
require the use of these climate-smart farming practices.
    The following chart is the average northeast base pay price, in 
dollars per hundred pounds, since 2004:

         Average Northeast Base Pay Price--$ per hundred pounds
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                   2004                                $22.97
                   2005                                $24.73
                   2006                                $26.00
                   2007                                $25.80
                   2008                                $28.38
                   2009                                $27.50
                   2010                                $28.80
                   2011                                $30.00
                   2012                                $30.75
                   2013                                $33.39
                   2014                                $35.39
                   2015                                $38.39
                   2016                                $35.68
                   2017                                $33.27
                   2018                                $29.52
                   2019                                $29.51
                   2020                                $29.51
                   2021                                $29.51
------------------------------------------------------------------------

    Organic Dairy Farmers and their families are in a dire situation 
and in need of constructive assistance now and continuing aid to 
maintain their operations in the future. As CROPP has stated in its 
testimony, they cannot go to the market for an increase in price 
because they have only a small volume of consumer facing branded 
product. They are subject to competition from large scale, vertically 
integrated, low cost operations in the competitive store brand market. 
Organic dairy has none of the direct risk management tools that 
conventional dairies have. The process of deciding a pay price is 
opaque and lacks any process. Eighty nine organic dairies in the 
northeast lost their market because their buyer Danone wanted to change 
their logistics to cut costs. CROPP has found a market for only 58 of 
them in their reserve pool. We can't afford to lose any more
    The following are potential remedies that can be implemented as 
soon as possible to begin to address the disadvantages facing American 
Organic Dairy Farm Families.

   Develop an Organic Dairy Margin Coverage (DMC) Program

   Address the Lack of Competition in Organic Dairy: Congress 
        should instruct USDA to work with DOJ to investigate the effect 
        of lack of competition in New England and eastern New York in 
        light of Danone's decision to exit the region.

   Expansion and investment in dairy processing

   Consistent Regulation Enforcement: The issues around 
        sustainability for the small- to mid-size operations (80-1,000 
        organic cows) hang on how well the USDA's NOP enforces the 
        regulations. Inadequate and inconsistently implementation for 
        regulations has allowed the supply side of organic dairy to be 
        exploited by low cost operations that exploit loopholes.

   Request for more detailed organic milk data to reflect the 
        depth of information provided for non-organic milk production: 
        We request that the Committee instruct USDA to establish 
        mechanisms for publishing data for organic milk so organic 
        farmers can understand their market in ways similar to the 
        conventional market.

   Financially reward the good work that organic farmers are 
        doing regarding climate change

   FSA/Organic Certification Cost Share Program (OCSSP)
1. Develop an Organic Dairy Margin Coverage (DMC) Program
    Develop a program that analyzes organic milk price and feed cost 
data to determine possible benefits of an organic counterpart to the 
existing Dairy Margin Coverage (DMC) Program which has been used 
effectively in conventional dairy. We are asking that FSA, in 
coordination with NASS and AMS, use available organic price and feed 
data to develop an organic DMC program. To the extent possible, USDA 
should use organic data that is as comparable as possible to the data 
sets used under the DMC program. If there are data sets used for the 
DMC that have no comparable organic data set, we urge USDA to note that 
deficiency and provide analysis of the potential to start collecting 
those organic data.

   The Dairy Margin Coverage (DMC) Program, developed as part 
        of the 2018 Farm Bill, is a national risk management program 
        that offers margin protection to dairy farmers, defined as the 
        difference between the national all-milk price and national 
        average feed costs. The program is particularly targeted to 
        benefit small- and medium-scale dairy farms, and it is this 
        size operation that is suffering the most in organic dairy. 
        Producers can choose their level of coverage. While premiums 
        increase based on level of coverage chosen, those premiums are 
        highly subsidized for a producer's first 5 million pounds of 
        milk production annually, which is the mechanism used by 
        Congress to target the benefits to small- and medium-scale 
        dairy farms. Producers can buy coverage for production above 
        the 5 million pound threshold, but the premiums for coverage 
        above that are significantly higher, by design.

   The factors used to calculate the monthly margin DMC 
        payments are the average national all-milk price minus national 
        average feed costs (including corn, soybean meal, and alfalfa 
        hay). The all-milk price is reported monthly by the National 
        Agricultural Statistics Service (NASS). The corn and alfalfa 
        hay prices are also reported monthly by the National NASS, and 
        the soybean meal price is reported monthly by the Agricultural 
        Marketing Service (AMS). USDA's Farm Service Agency (FSA) uses 
        those data to administer the DMC program. o Conventional and 
        organic dairy producers are eligible for the program. However, 
        the price factors used to calculate the margin are based on 
        conventional prices. While in some circumstances this can be 
        beneficial to organic producers, the current and future 
        situation will have an adverse effect on organic dairy as the 
        pay price is low and inputs high in organic but the 
        conventional price has a high pay price even though inputs have 
        increased in price. In 2022 Class [I] price is in many cases 
        higher than the organic base price.
2. Expansion and investment in dairy processing
    Congress should make the investment in scale appropriate dairy 
processing a priority in the 2023 Farm Bill.
    Investment must be made in both existing successful track-record 
processors who are positioned and can scale production quickly and in 
new scale appropriate processing facilities to continue to develop 
system flexibility.
    The creation of a new supply-side model for organic dairy is needed 
that addresses the immediate loss of milk markets for organic dairy 
producers and provides them with long-term sustainability. It is clear 
that the major dairy companies in the U.S. are quickly moving away from 
rural communities in favor of more cost-effective supply chains and 
huge, vertically integrated operations. It has become apparent that the 
whole organic milk supply-side model needs to change. The current model 
for the supply side of organic dairy is obsolete, with many organic 
dairy farms facing extinction now, and many more likely to follow. A 
long-term analysis of the future of organic dairy family farms will be 
regionally based. A new organic dairy supply-side model is needed, and 
a successful model will feature regionally owned, scale-appropriate 
facilities to process regional milk that will be sold into the regional 
market as a source-identified local product that will give an adequate 
pay price that ensures a living wage to organic family farms in the 
USA.
3. Address the Lack of Competition in Organic Dairy
    Congress should instruct USDA to work with DOJ to investigate the 
effect of lack of competition in New England and eastern New York in 
light of Danone's decision to exit the region. New remedies should be 
proposed to restore competition in the region. The results of this 
investigation should inform future updates to Federal guidelines on 
horizontal and vertical merger approvals.
    The crisis in New England and eastern New York caused by Danone 
with their Horizon brand decision to cancel their supply contracts with 
89 farm families is a vivid regional example of the impacts of 
consolidation that plagues the entire organic dairy sector. Previous 
government decisions have allowed this consolidation to worsen and 
should be revisited. When Danone purchased White Wave in 2017, the 
Department of Justice mandated that Stonyfield Organic (owned by Danone 
with a supply contract with CROPP Cooperative) would have to be sold as 
a remedy to prevent monopsony in the region. Stonyfield Organic was 
sold to Lactalis, the second largest dairy company in the world. Now, 
effectively, there is only one buyer of organic milk in New England and 
eastern New York: Lactalis. Lactalis purchases 80% of its total milk 
supply from CROPP and purchases the other 20% either directly from 
Northeast farms or other sources. CROPP milk from New England and 
eastern New York is also used in packaged product under the Stonyfield 
Organic label, licensed to CROPP by Lactalis.
4. Consistent Regulation Enforcement
    Increase enforcement to level the playing field with consistent 
implementation of all regulations

    Finalize the rule to crack down on organic fraud, the 
`Strengthening Organic Enforcement' Rule.
    Fraudulent organic imports and domestic fraud undermines consumer 
confidence in the organic label and undercuts prices for U.S. organic 
producers. Congress required USDA to issue a final rule to strengthen 
organic enforcement by December 19, 2019. The comment period on the 
Proposed Rule ended on Oct. 5, 2020. The rule is still under review by 
USDA.
    This is unacceptable. We are asking that Congress urge USDA to move 
this rule forward as swiftly as possible.

    Strengthen pasture rule enforcement with particular attention to 
high risk Concentrated Animal Feeding Operations (CAFO)

    Particular attention needs to be paid to the following:

  a.  Certifier's inspection reports are inconsistent in detailing the 
            growing season applicable to each operation. There is 
            published data that reflects the growing season for each 
            area. The operation must follow the applicable growing 
            season rather than fall back on the minimum of 120 days.

  b.  In evaluating percentage of dry matter consumption from pasture, 
            each class of animal is required to be assessed separately.

  c.  Attention needs to be paid to the crop rotation within the OSP 
            with pasture as a crop.

  d.  There is a lack of certifier/ inspector expertise in evaluating 
            the dairy rations of large-scale dairies who use 
            sophisticated technology and teams of veterinarians/
            nutritionists to prepare reports that may be impossible for 
            the average dairy inspector to interpret when they analyze 
            dairy rations and tie them to production and pasture 
            consumption. NOP needs to mandate that these dairies are 
            inspected by highly qualified dairy nutritionists 
            experienced in pasture management. Surprise inspections of 
            all pasture usage on large-scale dairies during the growing 
            season needs to be required.

       NOP needs to continue to level the playing field in 
            providing inspectors who 
              can interpret the unsophisticated but honest record 
            keeping of 
              small-scale dairies that do not have the technology, 
            money or time for re-
              ports to satisfy desk audits. An experienced dairy 
            inspector can take a walk 
              in the pastures, noting the locations of water, shade and 
            access pathways 
              that are well worn by animals and view the unique signs 
            of grazing within 
              pastures, to assist in their evaluation of meeting 
            regulations.

       NOP should continue its Dairy Compliance Program; NOP 
            should provide 
              a detailed update with information that would help 
            identify inconsistent en-
              forcement that may be contributing to economic 
            disadvantages for North-
              east organic dairy operations.
5. Request for more detailed organic milk data to reflect the depth of 
        information provided for non-organic milk production
    We request that the Committee instruct USDA to establish mechanisms 
for publishing data for organic milk so organic farmers can understand 
their market in ways similar to the conventional market.

  a.  Pay price for organic dairy farmers is set either by direct 
            marketing of products to the consumer; a personal contract 
            with the buyer (organic brand, dairy processor or, in the 
            case of vertically integrated organic CAFO's, retailer), or 
            as part of a cooperative agreement as a member of a 
            cooperative. There is a scarcity of organic data available 
            for the farmer to make decisions on the state of the 
            organic market, projections on potential changes in supply 
            and demand and the value of their product.

  b.  The Federal Milk Marketing Order program (FMMO) already receives 
            data that allows them to provide information on the organic 
            dairy sector. Statistics on dairy also are found at the 
            USDA National Agricultural Statistics Service (USDA NASS) 
            and the USDA's Economic Research Service (USDA ERS). Every 
            region produces a monthly statistical report that is 
            published up to 2 months in arrears of the usage.

  c.  FMMO data is derived from reports submitted by pooled handlers. 
            The majority of organic milk is processed at FMMO pool 
            plants that also process and manufacture conventional milk 
            and are required to report to the FMMO. Only FMMO 1 (the 
            Northeast Order) reports some of this information in its 
            monthly statistical reports, in limited form. The FMMO 1 
            Monthly Statistical Report breaks out organic Class I fluid 
            volumes for Whole Milk and Reduced Fat Milk (2%), which 
            limits how the report can be used. Providing only part of 
            the needed data, however, the information can also be 
            combined to get an inaccurate picture of utilization of 
            organic fluid milk in the Order and marketplace.

  d.  USDA Dairy Programs asserts that it only has the statutory 
            authority to collect Class I (fluid milk) data in the 
            detail necessary to separate milk produced under organic 
            production. We request that the Committee instruct USDA to 
            identify this deficiency and provide analysis of the 
            potential to start collecting that organic data for all 
            Orders.

    The collection of the following data is within the statutory 
authority of the FMMO but is not published on a regular basis:

          (a). Utilization of organic Fluid Milk products and cream 
        from Producer Receipts and Other Sources: Class I milk:

                  1.i. Marketing Area;
                  1.ii. Other Federal Markets;
                  1.iii. Non-Federal Markets

          (b) Utilization of Fluid Milk Products and Cream by Pool 
        Plants for Class [I] Milk, for all Orders:

                  1. Organic Whole Milk
                  2. Organic Reduced Fat Milk (2%)
                  3. Organic Low Fat Milk (1%)
                  4. Organic Fat Free Milk (Skim)

          (c) Organic Mailbox Price by region
          (d) Export of organic dairy products
6. Financially reward the good work that organic farmers are doing 
        regarding climate change
    Organic agriculture should be front and center in policies that 
address the role of agriculture in combating climate change. Organic 
dairy farmers should be at the table for these discussions. Congress 
should reward the good work that organic farmers are already doing and 
should assist others interested in transitioning to organic.
    We are asking that Congress should include provisions in the 2023 
Farm Bill to:

   Support organic farmers and help others to transition to 
        organic.

   Increase funding for organic research related to climate 
        change.

   Increase funding for USDA conservation programs to reward 
        regenerative organic farming practices.

   Modernize USDA risk management programs to reward, not 
        penalize, regenerative organic farming practices.

    Include provisions in the FY 2023 Agriculture Appropriations bill 
to:

   Increase funding for USDA's National Organic Program with 
        focus on increased enforcement of existing soil health 
        requirements

   Increase organic research funding related to climate change.
7. FSA/Organic Certification Cost Share Program (OCSSP)
    In the previous Administration, USDA's Farm Service Agency (FSA) 
unilaterally cut reimbursements to organic farmers under the Organic 
Certification Cost Share Program (OCCSP), in conflict with the 2018 
Farm Bill directive. As a temporary stopgap, USDA created a parallel 
Organic and Transitional Education and Certification Program (OTECP), 
which NODPA has supported. OTECP is currently slated to provide stopgap 
funding through FY2022.
    For FY 2023, it is critical to fully fund the OCSSP. The OCSSP is 
especially important for small- and mid-size farms and for underserved 
producers. A recent survey conducted by the Organic Farming Research 
Foundation https://ofrf.org/research/nora/ shows that the cost of 
organic certification was identified as a major challenge--29% of all 
organic farmers listed this as a challenge & 61% of Black, Indigenous 
and other farmers of color identified this as a challenge. Thus far, 
USDA has not committed to fully restore the program for FY23, so we are 
asking Congress to fix the problem through the FY 2023 appropriations 
process.
Summary
    The future for all small- to mid-size organic dairies must include 
regulations that maintain organic integrity, not undermine it for the 
benefit of large operations and milk handlers. We must have strong 
enforcement and certifiers that understand the regulations and a USDA 
NOP that can ensure consistent enforcement at all levels of production. 
We must also look at infrastructure that is scale and market 
appropriate. If we have regulations that are strongly enforced, the 
processing, packaging and marketing infrastructure will have a secure 
base to build on. For organic dairy, that will mean having modern 
processing facilities that are designed to process and package smaller 
quantities of milk to meet the needs of the value-added products that 
have a strong market with discriminating consumers. When the next 
pandemic or weather crises happens, will the food supply chain be more 
protected or more exposed with less processing capacity and a smaller 
rural population?
    NODPA appreciates the opportunity to provide written testimony for 
the ``A 2022 Review of the Farm Bill: Dairy Provisions.'' Please reach 
out to me with any questions or follow-up from Committee Members as you 
take on the massive work of developing the 2023 Farm Bill.

Ed Maltby,
NODPA Executive Director.
                                 ______
                                 
    Submitted Letter by Kate Mendenhall, Director, Organic Farmers 
                              Association
June 30, 2022

    Chairman Scott, Ranking Member Thompson and Members of the 
Committee:

    The Organic Farmers Association (OFA) is a membership organization 
that represents U.S. certified organic farmers. Our organization was 
founded by and is controlled by certified organic farmers, and only 
domestic certified organic farmers vote on OFA's policies and 
leadership. We would like to share with the Committee some more 
information related to a problem in organic dairy that the Chairman 
referenced in his opening remarks.
    In August 2021, Horizon Organic (owned by Danone North America) 
notified organic dairy farms in Maine, Vermont, New Hampshire and 
several counties in New York that it would terminate their contracts in 
the summer of 2022. This decision is directly impacting 89 organic 
family farms. Since the original announcement, Danone announced that it 
will keep the impacted farms on contract for an additional 6 months 
(for a total of 18 months from the original notice), but will still be 
pulling out of Maine, Vermont, New Hampshire and several counties of 
eastern New York.
    This impacts not only the 89 farm families who have to cope with 
the loss of their milk contract, but could also affect the rural 
communities where these farms are located, other organic farmers who 
supply these operations with feed and local businesses who provide 
services to these farms. And we believe it is a useful example of the 
damage done by the extreme levels of consolidation that are present in 
every sector of agriculture, even a specialized market such as organic, 
where many assume that farmers must be better off because organic 
products are sold for a premium.
    While the crisis caused by Horizon's decision to exit the Northeast 
is focused in one region of the country, extreme consolidation plagues 
the entire organic dairy sector nationwide. In the organic dairy 
market, there are two national brands: Horizon Organic owned by Danone 
North America, whose parent company is Danone that is headquartered in 
France, and Organic Valley, owned by CROPP Cooperative based in 
Wisconsin. The leading retail seller of organic dairy products is store 
brand/private label products supplied by CROPP Cooperative and very 
large, confinement-style, vertically integrated organic dairies, such 
as Aurora Dairy farms and milk plants in Texas, Colorado and Missouri. 
The vertically integrated dairies have the economies of scale that 
allow them to undercut competitors in the price sensitive store brand/
private label retail market, which by its nature has a lower retail 
price than branded organic product. In addition to economies of scale, 
there are ongoing problems with the enforcement of organic standards at 
these large operations, including requirements that organic dairy cows 
receive access to pasture and rules for how conventional animals can be 
transitioned into organic production. This enforcement is the 
responsibility of the U.S. Department of Agriculture (USDA), which 
oversees organic certification. This enforcement problem goes hand in 
hand with the consolidation of the organic dairy sector--as these large 
vertically integrated operations entered the market, weaknesses in 
USDA's enforcement system became more pronounced, and small-scale 
operations now compete on an unlevel playing field that puts them at a 
significant economic disadvantage in a market dominated by a few large 
buyers.
    The consolidation of the organic dairy market gives 
disproportionate power to international companies to dominate both the 
supply side and the retail market, which has resulted in a lack of 
regional processing infrastructure in the Northeast and only one buyer 
for organic milk. That one buyer can set the price and conditions of 
any contract or cooperative agreement, leaving the organic dairy farmer 
only two choices, take the deal or leave organic dairy (or dairy 
farming altogether), with the resulting repercussions on their family 
and their rural community.
    As you develop the next farm bill, we urge you to consider some 
specific needs of organic dairy producers. As the organic dairy sector 
has grown, organic dairy producers have not been able to access the 
same information about their industry from USDA's Agricultural 
Marketing Service as their conventional neighbors. We urge Congress to 
instruct USDA to work with organic dairy producers to design reports 
with statistics available through the Federal Milk Marketing Order 
system to provide insight into the dynamics of how organic milk flows 
through national supply chains. Lack of transparency about supply and 
utilization of organic milk has been a source of confusion and 
frustration for organic dairy producers who would like to better 
understand these trends so they can adapt to an evolving industry.
    Another area that Congress should address in the next farm bill is 
the Organic Certification Cost-Share Program. All certified organic 
operations must complete annual inspection and certification. The 
Federal Government has historically reimbursed up to 75 percent of 
organic certification fees paid by organic farms and businesses, with a 
maximum reimbursement of $750 per certification scope (crops, livestock 
or handling) per operation, but since 2020, the program has paid a 
reduced reimbursement rate. In the next farm bill, we urge Congress to 
increase the reimbursement level and to streamline the program to 
reduce the up-front cost of certification instead of relying on a 
reimbursement model.
    And in addition to the next farm bill, we urge you to exercise your 
ongoing oversight of the USDA, which is responsible for ensuring that 
products bearing the organic label are meeting the same high standards, 
no matter where they are from or what size operation produced them. 
Specific actions needed from the USDA include:

   The USDA and the Department of Justice should work with the 
        inter-departmental White House Competition Council (established 
        by President Biden's Executive Order on Promoting Competition 
        in the American Economy) to examine the organic dairy market in 
        the Northeast as a case study of loss of resilience and harm to 
        farmers caused by consolidation.

   The USDA should step up enforcement of organic pasture 
        standards to level the playing field for smaller organic dairy 
        operations and begin to enforce the newly updated Origin of 
        Livestock standard.

   The USDA should complete and enforce long-delayed 
        regulations necessary to protect the integrity of the organic 
        label. Organic dairy producers rely on consumer trust of the 
        USDA label to market their products, and USDA's failure to 
        update and enforce organic standards beyond those for dairy 
        production can still put organic dairy farmers at risk of 
        losing consumers' trust. The USDA must complete the Organic 
        Livestock and Poultry Standards rule and consistently enforce 
        stronger animal welfare standards on organic farms, as well as 
        the Strengthening Organic Enforcement rule that would implement 
        important measures to detect and prevent fraud in organic 
        supply chains, as required by the 2018 Farm Bill.

    Thank you for your attention to the critical issues facing dairy 
farmers, including organic dairy farmers. Please contact our Policy 
Director, Patty Lovera, if you need more information or have questions 
about this testimony, [Redacted], [Redacted].
            Respectfully submitted,
            
            
Kate Mendenhall,
Director.
                                 ______
                                 
    Submitted Statement by Steven Etka, Coordinator, Midwest Dairy 
                               Coalition
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee--

    Thank you for holding this hearing to discuss important dairy 
policy issues in advance of the 2023 Farm Bill. I wanted to use this 
opportunity to introduce Committee Members to the Midwest Dairy 
Coalition and inform you about the policy positions of the Coalition.
    The Midwest Dairy Coalition is an alliance of dairy cooperatives 
representing dairy producers in eight Upper Midwest states on Federal 
dairy policy issues. The Coalition collectively represents nearly 5,600 
dairy farms, or about 19 percent of the dairy farms in the nation. On a 
regional basis, the Coalition's membership represents a majority of the 
dairy farms in the Upper Midwest and provides an effective and useful 
forum for dairy organizations to discuss, debate and propose common 
policy action dealing with the ever-changing Federal dairy issues of 
the day.
    Member organizations include Associated Milk Producers Inc., 
Bongards Creameries, Ellsworth Cooperative Creamery, First District 
Association, FarmFirst Dairy Cooperative, and Rolling Hills Dairy 
Cooperative.
    The Midwest Dairy Coalition has taken strong policy positions on a 
wide array of Federal policies affecting dairy farmers and their 
markets. While not all our policy recommendations are within the 
jurisdiction of the House Agriculture Committee, we believe it is 
important for the Committee to see the cross-cutting issues affecting 
dairy farmers and their cooperatives.
Dairy Margin Coverage (DMC) Program
    The Dairy Margin Coverage (DMC) Program has proven to be a very 
important risk management tool for dairy farmers. The voluntary program 
gives participating dairy farmers the ability to manage risks 
associated with changes in the margin between milk prices and feed 
costs. The program was established in the 2018 Farm Bill as a successor 
program to the inadequate Margin Protection Program (MPP). In the 2023 
Farm Bill, the DMC should be continued with the following updates:

   The 5 million pound annual production threshold (about 200 
        cows) between Tier I premiums and the higher Tier II premiums 
        should be updated to 8 million pounds (about 320 cows). Doing 
        so reflects the growth in average dairy herd size since the 
        2018 Farm Bill. The average dairy cow annually produces about 
        25,000 pounds.

   The production history used under the current program is 
        based on a dairy farmer's highest production from 2011, 2012 or 
        2013. As part of the Consolidated Appropriations Act of 2019, 
        Congress established a parallel program called the Supplemental 
        DMC Program to allow smaller-scale dairy farmers (under 5 
        million pounds of production history) to receive a Supplemental 
        DMC payment based on their 2019 production history. The updated 
        production history concept of the Supplemental DMC Program 
        should be merged into the base DMC Program to allow dairy 
        farmers with 8 million pounds of production or less to update 
        their production history to 2022 levels for future DMC 
        payments.

   The Committee should also consider increasing the top DMC 
        margin level from $9.50 to $10.00 per hundredweight, to 
        partially reflect the increased costs of non-feed inputs used 
        by dairy farmers. Variable feed costs are already captured in 
        the base margin calculation formula of the DMC.
Federal Milk Marketing Order Modernization
    The Federal Milk Marketing Order (FMMO) system has not been 
significantly updated since 2008. Because of the complexity of the 
system and the inter-related nature of all the aspects of the pricing 
system, the Midwest Dairy Coalition supports a full-scale review and 
improvements to the system and opposes efforts to seek more narrow 
changes.
    Changes to the FMMO system should be made through the robust FMMO 
administrative hearing process, which was developed by Congress to 
fully consider all perspectives and potential repercussions of proposed 
changes, as opposed to mandating specific Federal Order changes 
legislatively.
    Many of our members are actively engaged in FMMO discussions with 
other dairy farmer cooperative leaders from around the country through 
a process established by the National Milk Producer Federation (NMPF), 
at the urging of Agriculture Secretary Vilsack. The goal of this effort 
is to seek broad agreement on a full-scale proposal for FMMO 
modernization to be undertaken through the existing administrative 
hearing process within USDA's Agricultural Marketing Service. We urge 
the Committee to continue to monitor the industry's consensus-building 
dialogue. It is paramount that this process be allowed to play out 
prior to any Committee consideration of legislative action on FMMO 
issues.
Dairy Pride Act (S. 1346 and H.R. 2828)
Truth in Labeling for Non-Dairy Beverages
    Currently, FDA regulations require products labeled as milk, 
yogurt, ice cream and cheese to be produced from dairy animals. 
Unfortunately, FDA has not enforced those regulations, which has 
resulted in many plant, nut-based or lab-generated products being 
inappropriately labeled using dairy terms.
    Consumers are often unaware that the nutritional attributes of milk 
and other dairy products far exceed those of non-dairy beverages. 
Bipartisan legislation has been introduced in the Senate and House to 
require FDA to enforce its own regulations. The Midwest Dairy Coalition 
is urging Members of Congress to cosponsor this important legislation.
Dairy Trade Issues
United States-Mexico-Canada Agreement (USMCA) Enforcement
    The United States-Mexico-Canada Agreement (USMCA), signed into law 
in January of 2020, includes important provisions to reform Canada's 
trade-distorting dairy pricing policies and expand U.S. dairy access to 
Canada. However, Canada has not lived up to its dairy access 
commitments under the Agreement, which led the U.S. to file a dispute 
settlement case against Canada's actions. In January 2022, U.S. Trade 
Representative Ambassador Tai announced the U.S. had prevailed in its 
case against Canada. As part of the dispute resolution process, Canada 
was given the opportunity to put forward a proposal to revise its rules 
to comply with the ruling. Canada's proposals to comply with the ruling 
failed to address to underlying harms identified by the ruling. This 
led the Biden Administration in May of 2022 to initiate a second 
dispute panel over Canada's recent delays in fulfilling its obligations 
under USMCA. The Administration and Congress should continue to insist 
Canada comply with the dairy market provisions of the USMCA.
Geographic Indications and Common Cheese Names
    The European Union has taken an aggressive stance in bilateral and 
multi-lateral trade negotiations to block the ability of U.S. dairy 
farmers and manufacturers to use common cheese names, such as parmesan, 
feta, and asiago. They argue these names should only be allowed for use 
by cheesemakers in the regions of the world where that style of cheese 
originated. However, these generic cheese names have been commonly used 
in the U.S. dairy sector for generations.
    In a January 2022 judicial ruling, Judge Ellis of the U.S. District 
Court for the Eastern District of Virginia upheld a 2020 decision of 
the U.S. Patent and Trademark Office's (USPTO) Trademark Trial and 
Appeal Board regarding us of the term ``gruyere.'' This ruling 
confirmed ``gruyere'' is a generic style of cheese that can come from 
anywhere. The decision reaffirms that all cheesemakers, not just those 
in France or Switzerland, can continue to create and market cheese 
under this common name.
    Congress and the Administration should take steps in trade 
negotiations to preserve the ability of U.S. cheesemakers to continue 
the use of common cheese names.
Support for Bi-lateral and Multi-lateral Trade Agreements
    In 2021, dairy product exports totaled 17.3 percent of U.S. total 
milk solids production, a record for the U.S. dairy industry. The U.S. 
dairy industry has the capacity to raise its level of exports even 
further.
    The Midwest Dairy Coalition encourages the Administration to pursue 
comprehensive trade agreements whether bi-lateral or multi-lateral. The 
Administration's trade policy agenda refers to trade and investment and 
economic ``frameworks'' but that doesn't equate to trade agreements 
built around tariff cuts.
    With respect to dairy competitors, the European Union, New Zealand, 
and Australia are showing signs that their dairy industries have 
limitations on their ability to significantly grow dairy exports in the 
future. More bi-lateral and multi-lateral trade agreements will give 
the dairy industry the opportunity to reach new highs in dairy exports.
Ocean Shipping Reform and Dairy Trade
    The Midwest Dairy Coalition has endorsed the Ocean Shipping Reform 
Act to address the shipping challenges the dairy industry and other 
U.S. agricultural sectors have faced since the beginning of the 
pandemic. Therefore, we are very pleased that this bill recently passed 
Congress and was signed into law by President Biden. The new law will 
help alleviate delays and disruptions at U.S. ports that have been a 
critical part of the export supply chain challenges plaguing U.S. dairy 
exporters. We thank Congressmen Garamendi and Johnson and Senators 
Klobuchar and Thune for their bipartisan leadership in getting this 
important legislation across the finish line.
Agriculture Labor Policy and Dairy Farms
    Foreign-born workers are a critical part of the U.S. dairy economy 
and the communities where they live. While border security is 
important, establishing a clear process for immigrant dairy workers to 
establish legal status is critical. The Midwest Dairy Coalition 
supports agriculture labor reform legislation to:

   Provide an affordable and efficient guestworker program that 
        ensures the continued availability of immigrant labor for all 
        of agriculture, including dairies; and

   Permit those currently employed or with employment history 
        in the U.S. to earn the right to work here legally, regardless 
        of their current legal status.

    The Midwest Dairy Coalition supports the Farm Workforce 
Modernization Act (H.R. 1603), as passed by the House in March 2021, 
and supports efforts to make improvements and pass the bill in the 
Senate.
The Role of Dairy in the National School Lunch Program
    Dairy foods such as milk, cheese and yogurt provide critical 
nutrition to Americans of all ages. Dairy consumption helps Americans 
meet recommendations for calcium, vitamin D and potassium, three of the 
four under-consumed nutrients of public health concern. Dairy foods 
also make important contributions to the consumption of protein, 
magnesium, vitamin A and other nutrients in the U.S. diet.
    Access to nutritious milk and dairy products is especially 
important for children--a large percentage of whom fall short of 
meeting daily dairy intake recommendations established by the [Dietary] 
Guidelines for Americans through the U.S. Department of Agriculture and 
the U.S. Department of Health and Human Services.
    The decline in fluid milk consumption in schools has been linked, 
in part, to past Congressional and USDA efforts to prohibit schools 
from offering whole milk or low-fat flavored milks, which children 
prefer for a better taste experience. Nutrition and health science 
professionals have begun to reconsider those policies in recognition of 
the nutritional benefits of milk consumption for children. For example, 
a March 2015 Policy Statement from the American Academy of Pediatrics 
declared that ``consideration of a beverage such as flavored milk 
provides a good example of the balance needed to limit added sugars and 
yet promote nutrient-rich foods.''
    To help address the shortfall in daily intake of dairy products by 
schoolchildren, the Midwest Dairy Coalition supports:

   The School Milk Nutrition Act (H.R. 4635), introduced by 
        Reps. Courtney (D-CT) and GT Thompson (R-PA), to ensure low-fat 
        flavored milk remains an option for children as part of the 
        National School Lunch Program.

   The Whole Milk for Healthy Kids Act (H.R. 1861), introduced 
        by Reps. GT Thompson (R-PA) and Antonio Delgado (D-NY), to 
        require children be offered a variety of fluid milk options as 
        part of the National School Lunch Program, and to allow schools 
        the option of serving whole milk.

    Thank you for this opportunity to highlight the broad array of 
Federal policy initiatives that impact dairy farmers and cooperatives 
of the Midwest and nationwide. We look forward to working with the 
Committee as your farm bill hearings and deliberations continue.
                                 ______
                                 
           Submitted Sign-on Letter by ActionAid USA, Et Al.
National Call for Fair Prices for Dairy Farmers and Systemic Dairy 
        Policy Reform
  United States Senate,
  Washington, D.C.;

  United States House of Representatives
  Washington, D.C.,

  Date: November 10th, 2021

    Dear Senators and Representatives,

    We, the undersigned 91 farm, food, social, labor, and environmental 
justice organizations, urge Congress to take immediate action to 
implement fair prices for family-scale dairy farmers to address the 
ongoing U.S. dairy crisis.
    For years, the prices paid to U.S. dairy farmers have regularly 
been below their costs of production. Prices dipped so low in 2018 that 
farmer suicides became national news. Low prices mean that family dairy 
farmers cannot pay their bills, contribute to their local economies, 
invest in sustainable practices, pay workers a fair wage, or transition 
their farms to the next generation. Federal dairy insurance and other 
payments have made little difference for most farmers, instead 
amounting to taxpayer subsidies for the large dairy processors who 
benefit from low milk prices.
    Aided by Federal policy decisions, milk production has moved to 
industrial-scale operations, whose large-scale production contributes 
to driving prices down. Seventy percent of dairy farms went out of 
business from 2000 to 2020, even while milk production increased by 
over 130%.\1\ Large-scale industrial operations have lower production 
costs, but this economy of scale conceals expensive externalities, in 
the form of water pollution, depressed rural communities, lower 
property values, worker rights abuses, and more.
---------------------------------------------------------------------------
    \1\ USDA ``Milk Production,'' 2/16/01 & 2/23/20.
---------------------------------------------------------------------------
    Overproduction and low prices have led to an over-reliance on 
export markets to dispose of excess milk volume. Small- and mid-size 
farmers are particularly at risk in an export-focused industry, which 
is vulnerable to global political uncertainties. The fragility of the 
``get big or get out'' approach has decreased the sector's resilience 
in the face of shocks, as was clearly exposed in the COVID-19 pandemic, 
when farmers have dumped tens of millions of pounds of milk even as 
tens of millions of people are food-insecure.
    The dairy insurance programs developed in the last two farm bills 
have acknowledged the problems, but have not fundamentally addressed 
chronic low prices, market volatility, and continued consolidation.
    The U.S. dairy sector needs systemic reform to support fair prices 
for family-scale producers, address corporate consolidation, and reduce 
dependence on export markets.
    We need a new U.S. dairy policy oriented towards small- and mid-
size dairy farms, rather than corporate agribusiness. Successful models 
abound: U.S. dairy policies in place from the New Deal through the 
1990s managed milk production and ensured farmers a fair price, while 
the U.S. sugar and cranberry industries and Canadian dairy market use 
similar elements that have stabilized those sectors in ways that U.S. 
dairy farmers need and deserve.
    Core components of a successful dairy program must include:

   Price floors, based on scale of operation, that allow 
        family-scale dairy farmers to cover their costs of operation;

   Production management mechanisms to re-balance U.S. dairy 
        supply with demand, focused on scaling down the industrial-
        scale mega-dairies that contribute most to overproduction;

   Managed imports and exports to prevent undercutting farmer 
        incomes and workers' rights in the U.S. and limit dependence on 
        foreign markets;

   Measures to restore competition to the sector;

   Investment and incentives to rebuild regional dairy 
        infrastructure.

    Such a program must include both the organic and conventional 
markets, and support for entry of new and beginning dairy farmers must 
be a particular priority. Many in the sector are also calling for 
reform of the antiquated Federal Milk Marketing Order (FMMO) system; 
there is great potential to incorporate other necessary changes in the 
sector into any FMMO reform process.
    The benefits of a new way forward for the dairy industry are 
numerous: for consumers, workers, and dairy processors who will be 
guaranteed a consistent and resilient milk supply; for the climate and 
the environment, as family-scale dairies can manage their waste in a 
more ecologically-appropriate manner and are more likely to graze their 
animals to build healthy soil and sequester carbon; for rural 
economies, where a thriving dairy industry will respect workers' rights 
while creating good jobs in processing and transportation; and for 
dairy farmers themselves, who deserve more transparency, competition, 
and control over the sector they uphold.
    It is time for a change in the dairy industry. We call on your 
political leadership to support farmer- and worker-centered systemic 
reform of U.S. dairy policy. To support true sustainability from our 
kitchen table to our planet, we must support economic justice for dairy 
producers.
            Sincerely,

 
 
 
ActionAid USA                        Minnesota Farmers Union
American Agriculture Movement        Missouri Rural Crisis Center
American Federation of Government    Mississippi Association of
 Employees, Local 3354                Cooperatives
American Sustainable Business        Montana Cattlemen's Association
 Council
Ashtabula, Geauga, Lake Counties     National Dairy Producers
 Farmers Union (Ohio)                 Organization
California Farmers Union             National Family Farm Coalition
Campaign for Family Farms and the    National Farmers Organization
 Environment
Center for Food Safety               National Farmers Union
Citizens Trade Campaign              National Latino Farmers & Ranchers
                                      Trade Association
Coming Clean                         New England Farmers Union
Community Alliance for Global        North American Marine Alliance
 Justice
Community Alliance with Family       North Carolina Association of Black
 Farmers                              Lawyers Land Loss Prevention
Community Farm Alliance               Project
Cooperative Development Institute    Northwest Farmers Union
Cornucopia Institute                 Northeast Organic Dairy Producers
                                      Alliance
Dakota Rural Action                  Northeast Organic Farming
                                      Association--Interstate Council
Fair World Project                   Northeast Organic Farming
                                      Association--Massachusetts
Family Farm Defenders                Northeast Organic Farming
                                      Association--New Hampshire
Farm Aid                             Northeast Organic Farming
                                      Association--New Jersey
Farm and Ranch Freedom Alliance      Northeast Organic Farming
                                      Association--New York
Farm to Institution New England      Northeast Organic Farming
                                      Association--Vermont
Farmworker Association of Florida    Northeast Sustainable Agriculture
                                      Working Group
Federation of Southern Cooperatives  Northern Plains Resource Council
Food & Water Watch                   Ohio Farmers Union
Food Animal Concerns Trust (FACT)    Oklahoma Black Historical Research
                                      Project, Inc.
Food Chain Workers Alliance          Organization for Competitive
Food Democracy Now!                  Partners for Dignity & Rights
Food for Maine's Future              Pennsylvania Farmers Union
Friends of Family Farmers            Presbyterian Hunger Program
Friends of the MST (US)              Public Justice Food Project
Harambee House Inc.                  R-CALF USA
Health Care Without Harm             Real Food Media
Healthy Communities of the Capital   Regeneration Massachusetts
 Area
Illinois Stewardship Alliance        Rural Advancement Foundation
                                      International--USA (RAFI-USA)
Institute for Agriculture and Trade  Rural Coalition
 Policy
International Brotherhood of         Rural Vermont
 Teamsters Dairy Conference
Iowa Citizens for Community          Soul Fire Farm
 Improvement
Land For Good                        Sustainable Agriculture of
                                      Louisville
Land Stewardship Project             United Food & Commercial Workers
                                      International Union
Liberty Tree Foundation for the      Uprooted & Rising
 Democratic Revolution
Maine Farm to Institution            US Food Sovereignty Alliance
Maine Farm to School Network         Western Organization of Resource
                                      Councils
Maine Farmland Trust                 WhyHunger
Massachusetts Avenue Project, Inc.   Wisconsin Farmers Union
Michigan Organic Food and Farm       Women Food and Agriculture Network
 Alliance                             (WFAN)
Migrant Justice/Justicia Migrante    350 Seattle
 

    Please contact NFFC Policy Director Jordan Treakle 
([email protected]) or Dairy Consultant Siena Chrisman ([email protected]) 
with any questions.
                                 ______
                                 
                          Submitted Questions
Response from Scott Marlow, Deputy Administrator for Farm Programs, 
        Farm Service Agency, U.S. Department of Agriculture
Questions Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question 1. The scale of dairy operations in Connecticut is much 
smaller than those in the West, and it is critical to ensure that 
provisions in the farm bill do not leave them out of the conversation. 
I hear from producers in my district, most of whom are small, family-
owned operations, that they lack the capacity to interface with Federal 
assistance programs on top of running operations.
    Administrator Marlow, is the Farm Service Agency properly equipped 
to conduct focused outreach to small farms? Would adjusting the DMC 
Program for small farms, as suggested by Mr. Forgues's testimony, help 
your agency assist smaller operations in Connecticut and the Northeast?
    Answer. DMC is a risk management program providing benefits for 
participating dairy operations up to 5 million pounds of covered 
production history. By the numbers, small- and mid-size dairy 
operations make up a majority of those enrolled in DMC. Small dairy 
farms are viewed by many as important to the rural character to much of 
the continental U.S. and efforts are needed to keep them sustainable. 
USDA-FSA understands smaller dairy operations, compared to their larger 
counterparts, lack economies of scale, and do not have the 
technological and management resources the larger dairy operations have 
available. Finding a way to provide attainable resources for the 
smaller operations is an important point worthy of consideration and 
was mentioned more than once during the recent House Agriculture 
Committee hearing.
    Mr. Forgues, Executive Vice President of Membership for Organic 
Valley, provides suggestions that should be reviewed further. While it 
is important to remember a segment of small dairy operations are 
organic, grass based or other and may operate differently from typical 
dairy operations, it is not a realistic approach for the rest of the 
current dairy industry. USDA will seriously consider the proposals and 
make applicable program changes within authority, as we have 
accomplished in the past for dairy support programs.

    Question 2. In 2021, about 19,000 operations had registered for the 
DMC Program. To date this year, the number of operations registered is 
about 17,000. To what do you attribute the drop in participation in 
DMC, and what efforts is the Farm Service Agency making to restore and 
increase participation?
    Answer. Unfortunately, a small percentage of dairy operations 
determine their annual participation in DMC according to margin 
projections for the upcoming enrollment year. If indemnity payments are 
not predicted, the producer does not enroll to avoid payment of the 
premium fee. During the 2022 DMC Coverage Election Period prior to 
2022, the DMC monthly margin projections were above the $9.50 coverage 
level and consequently some producers declined 2022 DMC participation.
    Prior to and during the DMC Coverage Election Period, FSA promotes 
the value of DMC risk management protection, and reminds producers the 
margin projections are not definite. This is not the first time annual 
participation dropped because there were no expected DMC indemnity 
payments during the DMC enrollment period. For the upcoming 2023 DMC 
coverage election period and future enrollment periods, USDA will 
promote the program benefits and perform significant outreach reminding 
producers and the dairy industry of the long-term importance of having 
a risk management program rather than trying to annually predict if the 
program will trigger.
    While 2022 DMC participation is less than 2021 participation, 93 
percent of 2021 producers enrolled for 2022 even with no expected 
indemnity payments. Additionally, it should be noted, nationally some 
dairy operations have chosen to dissolve and stop commercially 
marketing milk in 2021 and 2022.
    During a very turbulent time for dairy feed and milk prices DMC 
provided significant financial support in 2020 and 2021 in the amount 
of $1.4 billion. Over time, DMC has earned the trust of those producers 
participating in this important risk management program.
Response from Laura ``Lolly'' Lesher, Owner/Operator, Way-Har Farms; on 
        behalf of National Milk Producers Federation, Dairy Farmers of 
        America
Question Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question. In your testimony, you highlighted how dairy farmers have 
long been responsible stewards of the environment. The numbers show 
that programs like the Environmental Quality Incentives Program (EQIP) 
are incredibly popular among farmers. However, this popularity leads to 
oversubscribing, and EQIP lacks the resources to fulfill every 
application it receives. Even the smallest farms in my district are 
taking important steps to adopt climate-smart practices, and Congress 
should e rewarding this behavior by making it easier to access 
assistance.
    What level of investment would you suggest to help EQIP and other 
conservation programs meet high levels of demand?
    Answer. We support enhanced funding for EQIP as well as better 
targeting the program toward areas of opportunity for dairy like feed 
and manure management. The recently enacted Inflation Reduction Act 
included $8.45 billion in new funding for EQIP over 4 years, including 
$100 million for Conservation Innovation Trials with emphasis on 
projects that use feed and diet management to reduce enteric methane 
emissions from livestock. We look forward to working with Congress in 
the upcoming farm bill to build on these initiatives.
Questions Submitted by Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. Farmers have been asking for a national hearing on milk 
pricing, but the Secretary of Agriculture was quoted in a Brownfield 
interview earlier this month saying dairy stakeholders will have to all 
agree on one dairy pricing plan before opening a hearing. How do you 
see this working without a hearing process to evaluate multiple 
proposals? How do you see this process moving forward in terms of the 
farm bill and what happens if it does not?
    Answer. The dairy industry through NMPF is working to develop a 
Federal Milk Marketing Order modernization proposal that can be 
submitted to USDA for consideration in a national Federal Order 
hearing. A hearing process allows for discussion of numerous ideas and 
proposals from stakeholders, but ultimately a national consensus will 
be needed for us to be successful and that's what we are working to 
achieve. That means a give-and-take that requires a careful balance if 
dairy farmers are going to succeed in improving our milk pricing 
system. As we work to develop lasting solutions, we're also engaging 
with other farmer groups, industry organizations, and experts from 
across dairy to make sure our proposal addresses widely shared concerns 
and attracts wide support. This involves open dialogue and fact finding 
through discussion in the industry, to ensure that all voices are 
heard. As the largest dairy farmer organization in the United States, 
as well as the one that represents farmers invested in their own milk 
processing capacity, NMPF is well-positioned to lead FMMO modernization 
discussions. USDA can convene hearings under existing law, or Congress 
can pass legislation, in the farm bill for example, directing USDA to 
convene hearings.

    Question 2. The dairy check-off board representation is weighted 
geographically by milk volume not by farm numbers and the industry is 
consolidating with significant geographic shifts in production. As this 
occurs, should changes be made to the check-off program or should a 
referendum be conducted so farmers can confirm their support of its 
direction?
    Answer. I have seen firsthand the critical work the Dairy Research 
and Promotion Program does to advance and promote the interests of all 
dairy producers. Its Undeniably Dairy media activation has introduced 
millions of Americans to real dairy farmers, which is important in our 
society that is more removed from the farm than ever. Through 
longstanding partnerships with school nutrition programs and food 
banks, the DRPP pivoted during COVID-19 to rapidly connect dairy 
farmers to schools and food banks. By leveraging partnerships and 
bolstering the supply chain, the industry got nutrient-rich dairy foods 
to children and families experiencing food insecurity through school 
and emergency food programs. The National Dairy Research and Promotion 
Board includes 36 dairy farmers who are in constant communication with 
their farmer neighbors around the country. The Board's members are well 
positioned to keep the program moving in a direction that serves all 
farmers.

    Question 3. How have the changes to safety net and risk management 
tools in the last farm bill (i.e., DMC, DRP) worked for your farm and 
others?
    Answer. DMC has worked effectively since being enacted in the 2018 
Farm Bill. We have purchased the maximum available DMC coverage each 
year since 2019, at a margin of $9.50 per hundredweight, knowing that 
it may not pay out every year, but is intended to serve as a safety net 
when needed.

    Question 4. What unintended consequences have you or other dairy 
farmers experienced since the Class I pricing change was implemented?
    Answer. Unfortunately, the current Class I mover saddles dairy 
farmers with asymmetric risk because it includes an upper limit on how 
much more Class I skim revenue it can generate for producers than the 
previous mover, but no lower limit on how much less can be generated 
than the previous mover. Whenever the Class III and IV prices widely 
diverge, as is happening again today with higher Class IV prices, the 
current mover will significantly under-perform the previous mover. Even 
today, the current mover has not made up for the 2020 losses because it 
is only moderately different from the previous mover and has not 
performed significantly better at any point. In other words, when the 
asymmetric risk inherent in the current mover causes non-trivial 
losses, as it did in 2020, those losses become effectively permanent. 
This runs contrary to the intent of the 2018 agreement and isn't 
sustainable long-term public policy.

    Question 5. Should dairy farmers have the right to vote 
individually on Federal Orders instead of being bloc voted by their 
cooperatives?
    Answer. Dairy farmer-owned cooperatives play a large and critical 
role in the marketing of milk across the U.S., doing the needed work of 
balancing milk markets to ensure that all-milk supplied by their 
farmer-owners is marketed for the highest possible return to the farmer 
and moved as quickly as possible in volumes that manufacturers need. 
This often involves intricate logistical work that co-ops perform on 
behalf of their farmer-owners and extends to decisions on amendments to 
the Federal Milk Marketing Order system. The ability of co-ops to bloc 
vote on behalf of their farmer-owners is a fundamental component of the 
co-op's overarching goal of effectively marketing milk for the highest 
possible financial return to its farmer-owners. Under current 
procedures, a co-op may elect not to bloc vote on FMMO issues and in 
those cases its members receive individual ballots to exercise as they 
wish. A co-op board can also decide to bloc vote on behalf of its 
members, and if it does so it must submit a certified copy of a 
resolution from the co-op board, which represents the co-op owners, 
authorizing the casting of the ballot.

    Question 6. What are some of the dairy market access and 
competitive concerns we should be looking at in crafting dairy policy 
for the next farm bill?
    Answer. Farm bill funding to support export promotion is a valuable 
tool--we should invest more in that space in the next farm bill, along 
the lines of bipartisan legislation recently introduced in the Senate. 
Also, within the scope of the farm bill, we're seeing a growing number 
of non-tariff trade barriers in different markets. One that is 
especially problematic in multiple countries are bans on the use of 
common food names like parmesan and bologna. The farm bill could help 
tackle this expanding trade barrier by charging USTR and USDA to 
negotiate protections for the use of commonly used food terms.
Response from Mike Durkin, President and Chief Executive Officer, 
        Leprino Foods Company; on behalf of International Dairy Foods 
        Association
Questions Submitted by Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. Section 4305 in the 2008 Farm Bill instructed USDA to 
set up a trial of sorts, providing a variety of whole grain products in 
school lunch and breakfast programs, then evaluating student 
consumption and acceptance. Would a similar `trial' for whole and 2% 
milk be helpful in this farm bill to evaluate consumption, waste and 
acceptance--given the facts that student consumption of milk has 
declined, waste has increased and key nutrients of concern found in 
milk have been documented as under-consumed over the past decade while 
schools have been restricted to offering only fat-free and 1% low-fat 
milk.[1]
---------------------------------------------------------------------------
    \[1]\ Whole Grain Purchases for School Meals: Section 4305 in the 
2008 Farm Bill instructed the USDA to purchase whole grains and whole 
grain products for use in the National School Lunch Program and School 
Breakfast Program. The section also instructed the USDA to evaluate 
whether children increased their consumption of whole grains as a 
result; which whole grains were found to be most acceptable to children 
participating in the school meal programs; and recommendations for 
integrating whole grain products into the school meal programs.
---------------------------------------------------------------------------
    Answer. The 2020-2025 Dietary Guidelines for Americans, which 
continued the message of previous DGAs, recommended increased intake of 
dairy products, and identified dairy as an under-consumed food 
group.\1\ * This is especially true for many school age children, with 
between 68% and 76.2% of school age males and between 77.4% and 94.3% 
of school age females failing to meet recommended levels of dairy.\2\ 
For all youth aged 19 and younger, mean intake of dairy is only 1.9 
cup-equivalent per day, which is below recommendations by \1/2\ cup or 
1 cup-equivalents, depending on age.\3\
---------------------------------------------------------------------------
    \1\ U.S. Department of Agriculture and U.S. Department of Health 
and Human Services. Dietary Guidelines for Americans, 2020-2025. 9th 
Edition. December 2020. Available at DietaryGuidelines.gov.
    * Editor's note: footnotes annotated with  are retained in 
Committee file.
    \2\ Dietary Guidelines Advisory Committee. 2020. Scientific Report 
of the 2020 Dietary Guidelines Advisory Committee: Advisory Report to 
the Secretary of Agriculture and the Secretary of Health and Human 
Services. Online Materials, Table 1.15. U.S. Department of 
Agriculture, Agricultural Research Service, Washington, D.C. Available 
at: https://doi.org/10.52570/DGAC2020.
    \3\ Dietary Guidelines Advisory Committee. 2020. Scientific Report 
of the 2020 Dietary Guidelines Advisory Committee: Advisory Report to 
the Secretary of Agriculture and the Secretary of Health and Human 
Services. Online Materials, Table 1.15. U.S. Department of 
Agriculture, Agricultural Research Service, Washington, DC. Available 
at: https://doi.org/10.52570/DGAC2020.
---------------------------------------------------------------------------
    School meal program nutrition standards should encourage dairy 
consumption. School meals are a significant source of dairy, with the 
School Breakfast Program providing 40% of the dairy needed by students 
each day and the National School Lunch Program providing 47%.\4\ For 
children, dairy is the number one source of three of the four food 
substances of public health concern as identified by the DGA: calcium, 
potassium, and vitamin D.\5\
---------------------------------------------------------------------------
    \4\ U.S. Department of Agriculture, Food and Nutrition Service, 
School Nutrition and Meal Cost Study: Volume 1--School Meal Program 
Operations and School Nutrition Environments, by Sarah Forrestal, et 
al., Project Officer, John Endahl, Alexandria, VA: April 2019. 
Available online at: www.fns.usda.gov/research-and-analysis.
    \5\ Keast, Fulgoni, Nicklas, O'Neil. Food Sources of Energy and 
Nutrients among Children in the United State: National Health and 
Nutrition Examination Survey 2003-2006. Nutrients 2013, 5, 283-301, 
doi: 10.3390/nu5010283.
---------------------------------------------------------------------------
    Whole milk contains the same nutrients as all other fluid milk, 
including calcium, phosphorus, protein, vitamins A, D and B12, 
pantothenic acid, riboflavin, and niacin. Other full fat dairy products 
contain similar levels of nutrients as their low-fat or fat-free 
counterparts. While they do have higher levels of saturated fat than 
low-fat versions, a growing body of evidence indicates that consumption 
of full-fat dairy foods (milk, cheese, and yogurt) is not associated 
with higher risk of adverse health outcomes, including obesity, 
diabetes, and heart disease.6, 7 
---------------------------------------------------------------------------
    \6\ Dariush Mozaffarian, Dairy foods, dairy fat, diabetes, and 
death: what can be learned from 3 large new investigations?, The 
American Journal of Clinical Nutrition, nqz250, https://doi.org/
10.1093/ajcn/nqz250.
    \7\ Mozaffarian D. Dairy Foods, Obesity, and Metabolic Health: The 
Role of the Food Matrix Compared with Single Nutrients. Adv. Nutr. 
2019;10(5): 917S-923S. doi:10.1093/advances/nmz053.
---------------------------------------------------------------------------
    Several recent research studies (including systematic reviews and 
meta-analysis) that examined the effect of higher fat milk consumption 
found that it was associated with lower childhood obesity and concluded 
that dietary guidelines that recommend reduced-fat milk versions might 
not lower the risk of childhood obesity.8, 9, 10, 11 One of 
these systematic reviews \12\ also examined cardiometabolic health in 
children (2 to 18 y) in addition to adiposity and concluded that full-
fat dairy consumption was not associated with increased body weight and 
adiposity, or with cardiometabolic risk in children.
---------------------------------------------------------------------------
    \8\ Vanderhout S.M., Aglipay M., Torabi N., Juni P., da Costa B.R., 
Birken C.S., O'Connor D.L., Thorpe K.E., and Maguire J.L. Whole milk 
compared with reduced-fat milk and childhood overweight: a systematic 
review and meta-analysis. Am. J. Clin. Nutr. 2019; 00: 1-14.
    \9\ O'Sullivan T.A., Schmidt K.A., and Kratz M. Whole-Fat or 
Reduced-Fat Dairy Product Intake, Adiposity, and Cardiometabolic Health 
in Children: A Systematic Review. Adv. Nutr. 2020; 00: 1-23.
    \10\ Dougkas A., Barr S., Reddy S. and Summerbell C.D. A critical 
review of the role of milk and other dairy products in the development 
of obesity in children and adolescents. Nutrition Research Reviews 
(2019), 32, 106-127.
    \11\ Kang K., Sotunde O.F., and Weiler H.A. Effects of Milk and 
Milk-Product Consumption on Growth among Children and Adolescents Aged 
6-18 Years: A Meta-Analysis of Randomized Controlled Trials. Adv. 
Nutr. 2019; 10: 250-261.
    \12\ O'Sullivan T.A., Schmidt K.A., and Kratz M. Whole-Fat or 
Reduced-Fat Dairy Product Intake, Adiposity, and Cardiometabolic Health 
in Children: A Systematic Review. Adv. Nut.r 2020; 00: 1-23.
---------------------------------------------------------------------------
    Higher consumption of full-fat dairy has been shown to be 
associated with lower risk of total body fat mass in children.\13\ 
Whole milk has been found to increase satiety in children when served 
with breakfast.\14\ A systematic review showed that high-fat dairy 
products were inversely associated with risk of obesity.\15\
---------------------------------------------------------------------------
    \13\ Bigornia S.J., LaValley M.P., Moore L.L., Northstone K., 
Emmett P., Ness A.R., Newby P.K. Dairy intakes at age 10 years do not 
adversely affect risk of excess adiposity at 13 years. J. Nutr. 2014 
Jul.; 144(7): 1081-90. doi: 10.3945/jn.113.183640. Epub 2014 Apr. 17. 
PMID: 24744312; PMCID: PMC4056647.
    \14\ Kavezade S., Mozaffari-Khosravi H., Aflatoonian M., Asemi M., 
Mehrabani S., Salehi-Abargouei A. The effects of whole milk compared to 
skim milk and apple juice consumption in breakfast on appetite and 
energy intake in obese children: a three-way randomized crossover 
clinical trial. BMC Nutr. 2018 Dec. 10;4:44. doi: 10.1186/s40795-018-
0253-8. PMID: 32153905; PMCID: PMC7050899.
    \15\ Kratz M., Baars T., Guyenet S. The relationship between high-
fat dairy consumption and obesity, cardiovascular, and metabolic 
disease. Eur. J. Nutr. 2013; 52: 1-24.
---------------------------------------------------------------------------
    A summary of multiple studies on full fat dairy foods found that 
the evidence showed no association with high blood pressure, 
cardiovascular disease, and type 2 diabetes. Some of the studies 
reviewed showed full fat dairy was associated with lower risk of 
obesity.\16\
---------------------------------------------------------------------------
    \16\ Astrup A., et al., Regular-fat dairy and human health: a 
synopsis of symposia presented in Europe and North American (2014-
2015). Nutrients 2016, 8, 463.
---------------------------------------------------------------------------
    Consumption of full fat dairy has been found to be associated with 
neutral or lower risk of heart disease.\17\ A meta-analysis of 29 
studies indicated that there is no negative effect on heart health of 
dairy, milk and yogurt, no matter whether those dairy products were 
full fat or low-fat.\18\
---------------------------------------------------------------------------
    \17\  Lordan R., A. Tsoupras, B. Mitra, I. Zabetakis. Dairy fats 
and cardiovascular disease: do we really need to be concerned?, Foods 
2018: 7, 29.
    \18\ Guo J. et al., Milk and dairy consumption and risk of 
cardiovascular diseases and all-cause mortality: dose-response meta-
analysis of prospective cohort studies. Eur. J. Epidemiol. 2017 32(4): 
269-287.
---------------------------------------------------------------------------
    A review of the recent science stated: ``No long-term studies 
support harms, and emerging evidence suggests some potential benefits, 
of dairy fat or high-fat dairy foods . . .'' \19\ Another stated, ``The 
present evidence suggests that whole-fat dairy foods do not cause 
weight gain, that overall dairy consumption increases lean body mass 
and reduces body fat, that yogurt consumption and probiotics reduce 
weight gain, that fermented dairy consumption including cheese is 
linked to lower CVD risk, and that yogurt, cheese, and even dairy fat 
may protect against type 2 diabetes. Based on the current science, 
dairy consumption is part of a healthy diet, without strong evidence to 
favor reduced-fat products; while intakes of probiotic-containing 
unsweetened and fermented dairy products such as yogurt and cheese 
appear especially beneficial.'' \20\
---------------------------------------------------------------------------
    \19\ Mozaffarian D. Dietary and Policy Priorities for 
Cardiovascular Disease, Diabetes, and Obesity: A Comprehensive Review. 
Circulation 2016; 133: 187-225.
    \20\ Mozaffarian Dariush, Dairy Foods, Obesity, and Metabolic 
Health: The Role of the Food Matrix Compared with Single Nutrients, 
Advances in Nutrition, Volume 10, Issue 5, September 2019, Pages 917S-
923S, https://doi.org/10.1093/advances/nmz053.
---------------------------------------------------------------------------
    Accordingly, IDFA believes that establishing a trial or pilot 
program in the next farm bill to test whether adding whole and 2% milk 
to the School Meals Program (SMP) would promote milk consumption rates 
and reduce food waste in the cafeteria would be beneficial. Such a 
program would provide important information to Congress and USDA that 
could help shape future policy decisions regarding the parameters of 
the SMP in order to encourage better health and nutrition outcomes for 
participating students.

    Question 2. I understand 40% of the milk produced and sold in the 
U.S. is not transacted within the Federal Order system, according to 
USDA.[2] Is the milk you use to manufacture products 
transacted within or outside of Federal Orders, and what benefits does 
this choice provide to your company and its suppliers? Has the Class I 
pricing change from the last farm bill impacted decisions about Federal 
Order participation?
---------------------------------------------------------------------------
    \[2]\ A key reason for the Class I pricing change was to increase 
processor ability to hedge milk and bring stability to the fluid sector 
to encourage investment in fluid sector, but 7 months after the May 
2019 implementation of the new Class I formula, the largest fluid milk 
processor Dean Foods filed bankruptcy and a few months after that, 
Borden.
---------------------------------------------------------------------------
    Answer. Leprino Foods pays the Federal Order class price for all-
milk we purchase. However, the technical decision on whether our milk 
goes into the Federal Order pool is essentially made by our cooperative 
partners. Accordingly, we do not have specific knowledge as to what 
percentage of the milk that we use is inside or outside of Federal 
Orders at any given time. Nonetheless, Leprino Foods believes the 
Federal Order system, by providing an explicit link between the end 
products we make and the price we pay for milk, has provided good 
stability over time to both our company and the farms that supply us 
milk. This is reflected in the historically steady growth of our milk 
supply. However, the value of the Federal Order system to Leprino has 
gradually eroded as Make Allowances, a key component of the formulas, 
are now distressingly out of date. Regarding the Class I mover, our 
company does not have any direct knowledge regarding whether the change 
to the Class I mover has affected Federal Order participation, although 
some market analysts have pointed out that long-term declines in Class 
I utilization have impacted Federal Order participation.

    Question 3. Farmers have been asking for a national hearing on milk 
pricing, but the Secretary of Agriculture was quoted in a Brownfield 
interview earlier this month saying dairy stakeholders will have to all 
agree on one dairy pricing plan before opening a hearing. How do you 
see this working without a hearing process to evaluate multiple 
proposals? How do you see this process moving forward in terms of the 
farm bill and what happens if it does not?
    Answer. When the dairy industry is united and focused on building a 
future together, we can accomplish almost any shared objective. While 
the challenges we face today are not new, our approach to the future 
must be focused on the global competitiveness of our industry. Our 
industry has grown and evolved considerably over the past 90 years 
since the FMMO system was established. If we're going to be a more 
resilient, sustainable dairy sector able to respond to shifting 
consumer preferences, we must ensure that the full supply chain remains 
competitive into the future. Dairy processors continue to support 
market based FMMO policies as well as a process to develop a 
collaborative solution that can unify the industry. IDFA, of which we 
are a member, continues to study the current FMMO system to better 
understand some of the recent challenges affecting our industry, and 
our company stands ready to work with other industry stakeholders to 
develop a path forward on these issues as part of a Federal Order 
hearing. The dairy industry would be best served if a hearing were to 
take place as soon as a level of industry consensus is reached on an 
overarching scope and range for consideration.
    First and foremost, we need to update the make allowances that are 
part of existing milk pricing formulas to reflect current manufacturing 
costs. As stated in my written statement, current make allowances are 
based on 2006 and 2007 costs which are now more than 15 years old, 
rendering the assumed milk processing costs woefully out-of-date. 
Coupled with recent inflationary pressures, the need to address this 
lag is now extremely urgent to maintain a healthy dairy processing 
sector.
    As our industry works to develop a proposal to update current make 
allowances, we hope that Congress will allow this collaborative effort 
to continue and not address any milk pricing issues legislatively 
unless they are supported by all segments of our industry. This type of 
intervention could have unintended consequences, including the creation 
of artificial price signals that could lead to over-production or 
under-production, and allow for market manipulation. That said, prompt 
resolution to the make allowance issue via a Federal Order hearing 
remains urgent for our dairy industry.

    Question 4. The dairy check-off board representation is weighted 
geographically by milk volume not by farm numbers and the industry is 
consolidating with significant geographic shifts in production. As this 
occurs, should changes be made to the check-off program or should a 
referendum be conducted so farmers can confirm their support of its 
direction?
    Answer. As a dairy processor, Leprino Foods is not eligible to 
participate in the Dairy Research and Promotion Program, also known as 
the Dairy Checkoff Program. This program, which focuses on dairy 
product promotion, research, and nutrition education, is funded solely 
by dairy producers and importers. Accordingly, our company does not 
have a position regarding potential changes to this program.
Response from Travis Forgues, Executive Vice President of Membership, 
        Organic Valley D CROPP Cooperative
Question Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question. Mr. Forgues: in your testimony, you pointed to rising 
transportation and operating costs. Would expanding the DMC Program to 
account for additional inputs beyond the cost of feed ease this 
pressure on producers?
    Answer. CROPP Cooperative would support Committee exploration in 
expanding DMC to factor in other variable costs that producers are 
exposed to such as on-farm energy costs as well as on-farm fuel costs. 
Determining a national index for such cost factors may be challenging 
as would overall program cost containment but CROPP believes these 
options merit review.
    These two costs factors (energy and fuel) could be offered as an 
elective to producers within DMC coverage options akin to policy 
mechanisms like the Harvest Price Election or the Trend Yield 
Adjustment that are within Federal crop insurance. Dairy producers 
would be enabled to choose coverage elements that match their risk 
tolerance for various inputs.
    It should be noted that while numerous CROPP Cooperative farmer-
members use the DMC it is not necessarily correlated to the landscape 
in organic dairy. DMC has no organic elections and there is no 
mechanism to account for a national organic feed price or national 
organic milk price. While the current margins are very challenged in 
the organic dairy market for producers the solution of an organic DMC 
is not one the cooperative is pursuing.
    Given that farmer-level milk pricing in organic is more attuned to 
consumer preferences and national organic averages are not 
identifiable, we are not confident development of an organic DMC would 
be productive or useful. Considering the limited number of organic farm 
milk buyers, we are also concerned disorderly milk pricing could occur 
that seeks to shift pay obligations on to the state actor if 
performance of any of the milk buyers falters.
    The current exorbitantly high-cost organic feedstuffs, see attached 
graphic, is largely the result of international trade distortion caused 
by:

   discontinuation of the USDA-AMS-NOP recognition agreement 
        with India's Agricultural and Processed Food Products Export 
        Development Authority (APEDA) in January 2021; \1\ *
---------------------------------------------------------------------------
    \1\ International Trade Policies: India, Updated: July 13, 2022  
(https://www.ams.usda.gov/services/organic-certification/international-
trade/India) Agricultural Marketing Service (usda.gov).
    * Editor's note: references annotated with  are retained in 
Committee file.

   determination of duties and countervailing duties in March 
        2022 by the U.S. Department of Commerce in an antidumping 
        investigation of organic soybean meal from India; \2\
---------------------------------------------------------------------------
    \2\ Final Determination in Antidumping Duty and Countervailing Duty 
Investigations of Organic Soybean Meal from India  (https://
www.trade.gov/faq/final-determination-antidumping-duty-and-
countervailing-duty-investigations-organic-soybean) (trade.gov).

   international conflicts that impede international shipping 
        of organic grains from the Black Sea region.\3\
---------------------------------------------------------------------------
    \3\ War in Ukraine: Organic in the spotlight as food security 
debate ignites  (https://www.bioecoactual.com/en/2022/05/04/war-in-
ukraine-organic-in-the-spotlight-as-food-security-debate-ignites/) 
(bioecoactual.com).

   acute drought conditions in certain regions of the U.S. that 
        has decimated crop and forage availability.\4\
---------------------------------------------------------------------------
    \4\ American farmers are killing their own crops and selling cows 
because of extreme drought  (https://www.cnn.com/2022/08/17/business/
west-drought-farmers-survey-climate/index.html)--CNN.

    This type of market disruption is not a systemic problem but an 
---------------------------------------------------------------------------
anomaly that is best addressed by two actions:

  1.  immediate short-term disaster relief payments, on a historic feed 
            use equivalency, to end-users of organic feedstuffs. These 
            organic livestock producers had no way to plan for, or 
            mitigate these cost realities brought on by trade 
            distortions.

  2.  Exploration, or/and, extension of existing natural disaster 
            provision such as

       Emergency Livestock Relief Program and Emergency Relief 
            Program 
              (2021);

       Emergency Assistance for Livestock, Honeybees, and Farm-
            Raised Fish;

       Livestock Forage Disaster Program;

       Livestock Indemnity Program; and

       Applicable Farm Service Agency farm loan/credit 
            provisions.

    Direct disaster relief payments would stem market exits and allow 
farms to reorganize or recalibrate for the coming year. Immediate 
payments would complement existing investments by USDA in the Organic 
Transition Initiative \5\ that seeks to in part improve the volume and 
reliability of U.S. domestic organic grain and forage crops.
---------------------------------------------------------------------------
    \5\ USDA to Invest up to $300 million in New Organic Transition 
Initiative  (https://www.usda.gov/media/press-releases/2022/08/22/
usda-invest-300-million-new-organic-transition-initiative) USDA.
---------------------------------------------------------------------------
Questions Submitted by Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. Farmers have been asking for a national hearing on milk 
pricing, but the Secretary of Agriculture was quoted in a Brownfield 
interview earlier this month saying dairy stakeholders will have to all 
agree on one dairy pricing plan before opening a hearing. How do you 
see this working without a hearing process to evaluate multiple 
proposals? How do you see this process moving forward in terms of the 
farm bill and what happens if it does not?
    Answer. Organic dairy pricing and markets are fundamentally 
disconnected from the FMMO. In our opinion the Orders represent an 
unmitigated burden on CROPP Cooperative that diminishes resources we 
might otherwise offer back to producer members or use to market co-op 
branded and commercial organic dairy products. The Orders provide no 
balancing function or farmer milk pricing relevancy for our co-op. As 
it currently stands, approximately 65 percent of all organic dairy is 
dedicated to Class I. Within non-organic milk only 30 percent is 
dedicated to Class I with the vast majority being utilized in Class II, 
III and IV. This dynamic creates and additional onus on organic dairy 
since Class I traditionally carries the largest pooling obligations.
    Any proposals, be in through the USDA-AMS Dairy Programs hearing 
process, or within the Congressional arena needs to acknowledge and 
rectify the untenable position that organic dairy is forced to 
participate in.

    Question 2. The dairy check-off board representation is weighted 
geographically by milk volume not by farm numbers and the industry is 
consolidating with significant geographic shifts in production. As this 
occurs, should changes be made to the check-off program or should a 
referendum be conducted so farmers can confirm their support of its 
direction?
    Answer. Section 10004 of the Agricultural Act of 2014 (2014 Farm 
Bill) (Pub. L. 113-79) [1] allows all USDA certified organic 
dairy producers to file an exemption from the Federal Dairy Promotion 
Program, carried out by the National Dairy Promotion and Research 
Board. Organic dairy farmers can voluntarily fill out and submit the 
Organic Exemption Request form (AMS-15) \6\ annually to exercise the 
exemption afforded in law.
---------------------------------------------------------------------------
    \[1]\ https://www.govinfo.gov/link/plaw/113/public/79.
    \6\ AMS-15--Organic Exemption Request Form  (https://
www.ams.usda.gov/resources/rp-organic-exemption) Agricultural Marketing 
Service (usda.gov).
---------------------------------------------------------------------------
    While organic dairy producers were previously made aware of this 
option by the National Promotion Research Board that outreach and 
notice has regrettably been discontinued and falls on the producers to 
seek the certified organic exemption.
    Any modifications to the Dairy Promotion Program should be 
structured in a way that it does not impede the organic exemption 
currently allowed.

    Question 3. How have the changes to safety net and risk management 
tools in the last farm bill (i.e., DMC, DRP) worked for your farm and 
others?
    Answer. Changes to the DMC have made the program more attractive to 
small dairy farmers in the U.S. While most of these farms are not 
organic producers this segment of farmers is the audience that our 
family farm-based cooperative is most likely to court as our market 
position grows or shifts. As consolidation and concentration trends 
demonstrate more and more pressure on small farmers that are the 
bedrock of many rural communities, we acknowledge the DMC as a leveling 
force that can mitigate some episodic margin pressures that might 
otherwise result in farm departures. As provided in our written and 
oral remarks we have some farm members that use the DMC but it is not 
necessarily correlated to the organic dairy landscape. We would suggest 
a greater priority be placed on enhancing farm resilience in the next 
farm bill.

    Question 4. What unintended consequences have you or other dairy 
farmers experienced since the Class I pricing change was implemented?
    Answer. Please see response to Question 1.

    Question 5. Should dairy farmers have the right to vote 
individually on Federal Orders instead of being bloc voted by their 
cooperatives?
    Answer. CROPP Cooperative operates on the democratic principle of 
one member, one vote. We have consistently maintained that position and 
would not exercise bloc voting if Order reform advanced to a producer 
vote.
    We are in alignment with other industry stakeholders such as 
American Farm Bureau and National Farmers Union who have advocated for 
reforms which provide dairy producers an opportunity to cast an 
individual and confidential ballot during the Federal Milk Marketing 
Order ballot casting process.

    Question 6. What are some of the dairy market access and 
competitive concerns we should be looking at in crafting dairy policy 
for the next farm bill?
    Answer. CROPP continues to support investments in the USDA Market 
Access Program as well as a focus on how organic dairy may be 
positioned to satisfy the cultural preferences of consumers around the 
world.
Attachment
    Domestic Feed Price Analysis

    Soybean Price per Bushel
    
    
    Corn Price per Bushel
    
    
          The Mercaris Price is weighted average, delivered transaction 
        price, of USDA Organic feed grade commodities as reported to 
        Mercaris via the Mercaris Market SurveyTM in the U.S. and 
        Canada.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
                     Mercaris Feed    USDA Dealer FOB    Mercaris Feed
                             Grade         Elevator/             Grade
                      Organic Corn         Warehouse    Organic Soybeans
                    Price per bushel   Organic Grain      Price Series
                                     -----------------------------------
                                                Spot    Volume Weighted
                                        Transactions     Average Price
                                      Soybean meal per      per bushel
                                                 ton
------------------------------------------------------------------------
          2017                  --           $827.68            $19.59
          2018               $9.89           $849.88            $19.63
          2019               $9.11           $857.60            $19.73
          2020               $8.28           $844.59            $22.49
          2021               $9.73         $1,334.47            $31.67
2022 thru July              $11.99         $1,582.81            $34.37
------------------------------------------------------------------------


               Vermont Organic Dairy Sample--2022 Snapshot
    Table Represents: Full year 2021 vs. 2022 Jan.-May Income/Expense
                          Comparison CASH BASIS
Northeast Organic Farming Association of Vermont (https://www.nofavt.org/
                 )--Jen Miller, Farmer Services Director
 
                                                        Average % Change
                                                             (n=8)
 
Income
  Milk Sales.........................................              ^4.7%
  Other..............................................              19.5%
                                                      ------------------
    Total Income.....................................              ^1.4%
                                                      ------------------
Expense
  Bedding............................................               8.7%
  Breeding...........................................              ^8.0%
  Custom-Hire........................................             ^35.2%
  Feed Grain.........................................              27.9%
  Feed--Forage.......................................             ^21.3%
  Feed--other........................................             ^47.5%
                                                      ------------------
    Total Feed.......................................              24.4%
                                                      ------------------
  Fertilizer.........................................             ^30.1%
  Gas Fuel and Oil...................................              75.7%
  Insurance..........................................              35.2%
  Labor..............................................             137.3%
  Repairs and Maintenance............................              64.5%
  Supplies...........................................              34.0%
  Utilities..........................................              22.1%
  Vet and Medicine...................................              10.1%
                                                      ==================
    8Net Cash income (all cash expenses factored in).             ^50.0%
 

Response from Marin Bozic, Ph.D., Assistant Professor, Department of 
        Applied Economics, University of Minnesota
Questions Submitted by Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. I hear from constituents about the Class I pricing 
change and their concerns about milk check transparency and lack of 
competition. Since only the milk for Class I beverage use is required 
to participate in Federal Orders, did the pricing change in the last 
farm bill have unintended consequences on class price relationships and 
Federal Order participation by processors of other voluntary class 
products? How has this impacted performance and cost of risk management 
tools like DRP (Dairy Revenue Protection), especially when price 
protection is needed most during unforeseen market shocks like the 
pandemic.\1\
---------------------------------------------------------------------------
    \1\ Measures of growth in Federal Orders, USDA AMS, May 18, 2022 
https://www.ams.usda.gov/sites/default/files/media/
DairyMeasuresofGrowth19472021.pdf.
---------------------------------------------------------------------------
    Answer. Prior to 2019, the Class I milk price, used for beverage 
milk, was based on the ``higher-of'' advanced Class III and Class IV 
skim milk prices. Advanced pricing allows fluid milk processors to know 
milk procurement costs before they offer pricing lists to retailers. 
The purpose of the ``higher-of'' feature was to ensure that beverage 
milk can always have sufficient reserve supply from manufacturing 
plants through financial incentives for dairy manufacturers to 
voluntarily participate (i.e., ``pool'') in the Federal Milk Marketing 
Orders.
    With total fluid milk sales volume declining throughout the 2010s, 
the hope was that a regulatory reform would make it easier for non-
traditional Class I milk buyers such as coffeehouse chains and quick 
service restaurant companies to hedge their input costs, then they 
would consequently be more willing to include cow milk in their menus 
and products.
    The Agriculture Improvement Act of 2018 replaced the ``higher-of'' 
mechanism with a simple average of the Class III and Class IV advanced 
skim prices plus $0.74 per cwt. The $0.74 per cwt differential was 
based on historical data analysis, and intended to keep producers 
revenue neutral vs. ``higher-of'' regime. One fragility of the new 
design is that when the price spread between the Advanced Class III and 
the Advanced Class IV Skim Milk gets extraordinarily large, the new 
Class I skim price can be substantially below the levels it would have 
been under the ``higher-of''. On the other hand, when the spread is 
zero, the new Class I skim price can only be higher than the old price 
by $0.74/cwt. This asymmetry was manifested during the COVID-19 
pandemic. In May 2020, USDA implemented the Farmers to Families Food 
Box Program, a very aggressive set of measures designed to support 
commodity markets as well as millions of U.S. citizens who overnight 
lost their jobs. Through this program, the majority of support for 
dairy went to cheese purchases, as cheese is the product that is 
sufficiently storable and easy to distribute to individuals. 
Distributing milk powders in a similar way would not be feasible. As 
such, this intervention resulted in the extreme price spread, with 
Class III prices in some months during 2020 almost $8.00 per cwt. 
higher than Class IV. This level of price spread was unprecedented 
prior to the pandemic.
    This spread led to negative producer price differentials and 
widespread depooling. While depooling would have happened even under 
the ``higher-of'' regime, it was exacerbated by the changes introduced 
in 2019. Negative producer price differentials hurt the effectiveness 
of insurance programs such as Dairy Revenue Protection (DRP) through 
increased basis risk. Further, the uncertainty regarding pandemic USDA 
policy direction or duration did cause increase perceived risk in dairy 
markets, which manifested itself in more expensive CME-traded option 
contracts, and thus consequently, more expensive USDA RMA programs such 
as Dairy Revenue Protection and Livestock Gross Margin.
    As for the new Class I pricing system, two main questions seem to 
be: (1) has it induced desired behavior by non-traditional buyers of 
fluid milk, and (2) how to remove fragility in its design, and make it 
revenue-neutral to producers quicker. 

    Question 2. Farmers have been asking for a national hearing on milk 
pricing, but the Secretary of Agriculture was quoted in a Brownfield 
interview \2\ earlier this month saying dairy stakeholders will have to 
all agree on one dairy pricing plan before opening a hearing. How do 
you see this working without a hearing process to evaluate multiple 
proposals? How do you see this process moving forward in terms of the 
farm bill and what happens if it does not?
---------------------------------------------------------------------------
    \2\ Brownfield article quoting Ag Secretary Tom Vilsack about 
national pricing hearing https://brownfieldagnews.com/news/ag-
secretary-answers-dairy-consensus-question/.
---------------------------------------------------------------------------
    Answer. I do think that if a hearing is announced, multiple 
proposals will be submitted. The lead time created by Secretary's 
request for consensus has been helpful so far, but I anticipate that by 
the first quarter of 2023, it will be optimal to proceed with the 
consensus even if there is no consensus among those that are eligible 
to vote in a USDA hearing. We should never be afraid of honest, intense 
public debate. Further, it appears clear already that not all problems 
in the milk pricing system can be addressed via USDA hearing process, 
and some issues are better addressed through the farm bill. 
Particularly, new regulation that promotes transparency in milk 
processing costs (for the purpose of setting and regularly updating 
make allowances), and transparency in farm gate milk pricing are issues 
for which processors and producers would respectively have a high 
degree of interest.

    Question 3. The dairy check-off board representation is weighted 
geographically by milk volume not by farm numbers and the industry is 
consolidating with significant geographic shifts in production. As this 
occurs, should changes be made to the check-off program or should a 
referendum be conducted so farmers can confirm their support of its 
direction?
    Answer. The role of dairy check-off has evolved over time and needs 
to remain nimble to ever changing challenges facing the dairy industry. 
The original focus on promotion and advertising is now expanded to 
social license, U.S. dairy export initiatives, and new efforts on 
issues such as climate change, animal welfare, and benefits of certain 
conservation practices. A national discussion on the choice different 
groups should or should not have in distribution of check-off dollars 
would be welcome.

    Question 4. What are some of the dairy market access and 
competitive concerns we should be looking at in crafting dairy policy 
for the next farm bill?
    Answer. One of the most important issues facing dairy producers is 
the lack of competition for farm milk. With few exceptions, dairy 
producers are tied to one processor and have little to no choice in 
finding alternative outlets for their milk. To prevent abuses of market 
power, a set of mandatory guidelines for milk supply agreements could 
be helpful. Even in a situation where a dairy producer ships milk to a 
dairy cooperative, the business she owns, it would still be helpful to 
promote transparency in milk pricing, to make it easy for producers to 
hold cooperative management accountable for business performance.
    Federal Milk Marketing Orders still serve a useful purpose for the 
dairy industry. To maintain their relevance, more regulatory 
flexibility will be needed regarding the rules for distributing 
benefits from beverage milk sales to producers whose milk is shipped to 
dairy manufacturing plants.
    Dairy buyers increasingly require ever more stringent 
sustainability and animal welfare standards. Regulation and support for 
implementation of new farming practices should be implemented in such 
way to avoid accelerating pace of consolidation in dairy farming.
                              attachment 1


Measures of Growth in Federal Orders
United States Department of Agriculture

Agricultural Marketing Service, Dairy Program, Market Information 
Branch

MGFMO-2021

May 18, 2022
2021 Highlights
    Total Receipts of milk pooled under Federal Milk Marketing Orders 
totaled 136.8 billion pounds marketed by 23,292 dairy producers across 
all Federal Orders in 2021. Total receipts were 0.7 percent lower than 
2020. Pooled producer numbers were 6.5 percent lower than 2020. The 
average daily delivery of producer milk per pooled producer was 6.4 
percent higher compared to 2020. In 2021, milk marketed through Federal 
Orders accounted for 61 percent of all milk sold and 61 percent of 
fluid grade milk sold to U.S. plants and milk dealers.
Total Receipts of Producer Milk and Percent Used as Class I, 2001-2021



----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year             Number of      Number of     Number of    Population       Total       Producer     Percent of
                  Markets         Pool         Pooled      of Federal    Receipts of  Milk Used as    Producer
                                Handlers      Producers       Milk        Producer       Class I    Milk Used as
                                                            Marketing       Milk                       Class I
                                                            Areas \2\
                             --------------              -------------------------------------------------------
                                (number)                   (thousands)       (million pounds)         (percent)
----------------------------------------------------------------------------------------------------------------
      1947              29           991       135,830           N/A        14,980         9,808          65.5
      1948              20           993       136,363           N/A        15,020         9,852          65.6
      1949              33           966       142,995           N/A        17,049        10,104          59.3
      1950              39         1,101       156,584           N/A        18,660        11,000          58.9
      1951              44         1,343       172,327        39,891        20,117        12,718          63.2
      1952              49         1,352       176,752        41,185        22,998        14,672          63.8
      1953              49         1,308       183,479        41,506        25,896        15,436          59.6
      1954              53         1,333       186,127        43,266        27,140        16,172          59.6
      1955              63         1,483       188,611        46,963        28,948        18,032          62.3
      1956              68         1,486       183,830        48,575        31,380        19,615          62.5
      1957              68         1,889       182,551        57,297        33,455        21,339          63.8
      1958              74         1,962       186,155        60,717        36,356        23,309          64.1
      1959              77         2,197       187,576        67,720        40,149        26,250          65.4
      1960              80         2,259       189,816        88,818        44,812        28,758          64.2
      1961              81         2,314       192,947        93,727        48,803        29,859          61.2
      1962              83         2,258       186,468        97,353        51,648        31,606          61.2
      1963              82         2,144       176,477       100,083        52,860        32,964          62.4
      1964              77         2,010       167,503        99,333        54,447        33,965          62.4
      1965              73         1,891       158,077       102,351        54,444        34,561          63.5
      1966              71         1,724       145,964        98,307        53,012        34,805          65.7
      1967              74         1,650       140,657       103,566        53,761        34,412          64.0
      1968              67         1,637       141,623       117,013        56,444        36,490          64.6
      1969              67         1,628       144,275       122,319        61,026        39,219          64.3
      1970              62         1,588       143,411       125,721        65,104        40,063          61.5
      1971              62         1,529       141,347       142,934        67,872        40,268          59.3
      1972              62         1,487       136,881       144,749        68,719        40,938          59.6
      1973              61         1,355       131,565       144,738        66,229        40,519          61.2
      1974              61         1,312       126,805       146,264        67,778        39,293          58.0
      1975              56         1,315       123,855       150,666        69,249        40,106          57.9
      1976              50         1,305       122,675       157,295        74,586        40,985          54.9
      1977              47         1,260       122,755       159,504        77,947        41,125          52.8
      1978              47         1,189       119,326       161,244        78,091        41,143          52.7
      1979              47         1,127       116,447       163,053        79,436        41,011          51.6
      1980              47         1,091       117,490       164,908        83,998        41,034          48.9
      1981              48         1,058       119,323       166,663        87,989        40,746          46.3
      1982              49         1,010       120,743       172,775        91,611        40,807          44.5
      1983              46           958       121,052       175,624        95,757        41,091          42.9
      1984              45           912       119,033       177,524        91,676        41,517          45.3
      1985              44           884       116,765       176,440        97,762        42,201          43.2
      1986              44           849       112,322       177,992        98,761        42,725          43.2
      1987              43           797       105,882       180,374        98,182        42,876          43.7
      1988              42           776       104,141       184,180       100,066        43,141          43.1
      1989              41           748       100,291       185,919        95,871        43,367          45.2
      1990              42           753       100,397       195,841       102,396        43,783          42.8
      1991              40           722       100,267       198,409       103,252        45,033          43.6
      1992              40           698        97,803       200,530       107,947        44,914          41.6
      1993              38           675        92,934       199,604       103,979        44,805          43.1
      1994              38           629        91,397       201,561       107,811        44,866          41.6
      1995              33           571        88,717       207,548       108,548        45,044          41.5
      1996              32           570        82,947       209,599       104,501        45,479          43.5
      1997              31           570        78,422       208,379       105,224        44,917          42.7
      1998              31           522        72,402       210,484        99,223        44,968          45.3
      1999              31           487        69,008       212,118       104,479        45,216          43.3
      2000              11           346      * 69,585     * 229,473     * 116,923        45,989          39.3
      2001              11           350      * 66,418     * 231,692       120,223        45,887          38.2
      2002              11           338      * 63,852     * 233,819       125,546        46,043          36.7
      2003              11           331      * 58,104     * 235,786       110,581        45,843          41.5
      2004              10           306      * 52,853     * 237,988       103,048        44,939          43.6
      2005              10           302      * 53,032     * 234,834       114,682        44,570          38.9
      2006              10           314      * 52,721     * 238,437       120,618        45,304          37.6
      2007              10           312      * 49,777     * 240,774       114,407        45,226          39.5
      2008              10           333      * 47,854     * 243,034       115,867        44,989          38.8
      2009              10           251      * 46,671     * 245,145       123,430        45,262          36.7
      2010              10           251        45,918     * 247,161       126,909        44,970          35.4
      2011              10           241      * 43,650     * 248,964       126,879        44,383          35.0
      2012              10           237      * 40,745     * 250,788       122,388        43,492          35.5
      2013              10           225      * 40,043     * 252,499       132,100        42,742          32.4
      2014              10           223      * 39,146     * 254,339       129,420        41,420          32.0
      2015              10           214      * 36,112     * 256,225       126,126        41,206          32.7
      2016              10           216      * 34,689     * 258,142       133,846        41,140          30.7
      2017              10           217      * 32,981     * 259,835       135,502        40,642          30.0
  2018 \1\              11           233        32,061     * 300,717       141,684        40,945          28.9
      2019              11           230      * 29,468     * 302,048       156,510        43,882          28.0
      2020              11           228        24,906     * 304,861       137,818        43,766          31.8
      2021              11           223        23,292       305,078       136,836        42,127          30.8
----------------------------------------------------------------------------------------------------------------
* Revised. N/A--Data not available.
\1\ 2018 includes November and December data from the California Federal Milk Marketing Order which became
  effective November 1, 2018.
\2\ Population data revised for 2000 to 2021 based on updated Census data.


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Year           Percentage of All-Milk Sold
                    Milk Price at 3.5%         Average
                    Butterfat Content           Daily
                                            Delivery Per
                                              Producer      Gross Value of Producer
                                                                     Milk
              ---------------------------------------------------------              ---------------------------
                Fluid Grade     All-Milk       Class I        Blend                    Per Pooled    All Pooled
                                                                                        Producer      Producers
              --------------------------------------------------------------------------------------------------
                        (percent)
                         ($/cwt)              (pounds)      (dollars)    (thousands)
----------------------------------------------------------------------------------------------------------------
      1947             N/A            21          4.65          4.34           302         5,024       682,407
      1948             N/A            22          5.29          4.97           301         5,713       779,079
      1949             N/A            23          4.67          4.03           327         5,019       717,748
      1950              41            25          4.51          3.93           326         4,914       769,442
      1951              44            27          5.13          4.59           320         5,605       965,900
      1952              46            30          5.37          4.85           356         6,598     1,166,246
      1953              49            31          4.91          4.31           387         6,355     1,166,015
      1954              49            31          4.62          4.01           399         6,098     1,135,019
      1955              51            32          4.67          4.08           420         6,510     1,227,815
      1956              51            33          4.90          4.24           466         7,534     1,384,955
      1957              53            34          4.87          4.51           502         8,147     1,487,153
      1958              56            36          4.72          4.40           535         8,500     1,582,310
      1959              60            40          4.79          4.43           586         9,466     1,775,583
      1960              64            43          4.88          4.47           648        10,482     1,989,615
      1961              67            45          4.91          4.45           704        11,131     2,147,656
      1962              70            47          4.80          4.14           761        11,854     2,210,330
      1963              70            48          4.78          4.15           821        12,814     2,261,437
      1964              70            48          4.87          4.23           888        14,174     2,374,137
      1965              70            48          4.93          4.31           944        15,300     2,418,526
      1966              70            48          5.55          4.95           994        18,526     2,630,908
      1967              71            49          5.85          5.17         1,056        20,321     2,858,351
      1968              74            52          6.23          5.53         1,089        22,561     3,195,087
      1969              77            56          6.50          5.74         1,164        24,892     3,591,293
      1970              79            59          6.74          5.95         1,244        27,636     3,963,311
      1971              80            60          6.90          6.08         1,316        29,893     4,225,340
      1972              78            60          7.10          6.31         1,372        32,439     4,400,288
      1973              78            60          8.03          7.31         1,386        37,461     4,928,514
      1974              78            61          9.35          8.36         1,464        45,376     5,753,852
      1975              78            63          9.36          8.64         1,532        49,233     6,097,768
      1976              79            65         10.70          9.75         1,661        60,277     7,394,486
      1977              80            66         10.59          9.69         1,740        62,692     7,695,764
      1978              80            67         11.40         10.57         1,793        70,528     8,415,787
      1979              80            67         12.88         11.97         1,870        83,262     9,695,637
      1980              80            67         13.77         12.86         1,954        93,685    11,007,001
      1981              80            68         14.69         13.63         2,021       102,354    12,213,199
      1982              81            69         14.63         13.53         2,079       104,573    12,626,510
      1983              82            70         14.69         13.53         2,168       109,142    13,211,805
      1984              81            70         14.41         13.33         2,104       104,935    12,490,729
      1985              80            70         13.88         12.61         2,294       107,871    12,595,522
      1986              80            71         13.60         12.38         2,413       111,581    12,515,451
      1987              80            71         13.90         12.51         2,542       118,402    12,529,800
      1988              79            71         13.42         12.14         2,627       119,261    12,419,974
      1989              75            68         14.51         13.30         2,614       129,744    13,012,796
      1990              77            70         15.55         13.78         2,796       142,324    14,289,567
      1991              76            71         13.30         12.11         2,821       121,479    12,180,354
      1992              77            73         14.57         13.12         3,017       146,452    14,323,698
      1993              73            69         14.19         12.89         3,073       145,350    13,507,974
      1994              75            71         14.75         13.16         3,232       156,253    14,281,193
      1995              75            71         14.19         12.79         3,350       157,754    13,995,454
      1996              72            69         16.19         14.64         3,442       187,713    15,570,261
      1997              71            69         14.36         13.10         3,676       178,424    13,992,366
      1998              66            64         16.14         14.92         3,755       202,770    14,681,340
      1999              67            65         16.24         14.09         4,148       216,794    14,960,544
      2000              72            70         14.24         12.11       * 4,604       207,913    14,468,892
      2001              75            73         16.96         14.90         4,959       275,642    18,308,968
      2002              77            76         13.69         11.91         5,387       239,520    15,294,802
      2003              67            65         14.10         12.12         5,178       242,066    14,066,672
      2004              62            61         17.56         15.74       * 5,369       324,119    16,965,368
      2005              66            65         17.13         15.07         5,904       334,626    17,747,577
      2006              68            67         14.59         12.86         6,264       303,429    15,998,288
      2007              63            62         20.81         19.19         6,297       452,097    22,507,219
      2008              61            62         20.78         18.24       * 6,633       453,886    21,722,538
      2009              66            66         14.40         12.44       * 7,243       339,698    15,856,077
      2010              67            66         18.25         16.07         7,572       444,038    20,389,201
      2011              66            65         21.97         19.87       * 7,965       577,538    25,211,996
      2012              62            61         20.39         18.05       * 8,209       542,121    22,091,337
      2013              67            66         21.80         19.44       * 9,039       641,295    25,682,588
      2014              63            63         26.14         23.54       * 9,074       793,728    30,472,016
      2015              61            61         19.21         16.70         9,559       583,173    21,063,042
      2016              64          * 63         17.70         15.38      * 10,557       593,364    20,585,571
      2017              64            63         19.31         16.96      * 11,244       696,651    22,981,139
  2018 \1\              66            65         17.70         15.51      * 12,449       685,389    21,974,258
      2019              73            72         19.74         17.35      * 14,513     * 921,492    27,154,539
      2020              63            62         19.70         16.12        15,102       892,007    22,216,324
      2021              61            61         19.56         17.33        16,074     1,018,102    23,713,626
----------------------------------------------------------------------------------------------------------------
* Revised. N/A--Data not available.
\1\ 2018 includes November and December data from the California Federal Milk Marketing Order which became
  effective November 1, 2018.

Methodology: Growth in Federal Milk Order Markets
    Data: The Measures of Growth in Federal Milk Order markets is 
created using information on the handling of milk obtained from Federal 
Milk Marketing Order personnel.
    The number of Federal Order markets and the number of handlers is 
at year end.
    The annual number of pooled producers is the simple average number 
of producers pooled each month during that year.
    The population of Federal milk marketing areas is obtained from 
published U.S. Census Annual Estimates of the Resident Population for 
Counties in U.S. Census years (1950, 1960, 1970, 1980, 1990, 2000, 
2010, and 2020). Annual Federal Order county populations are estimated 
by the Census Bureau for Federal Order counties for the years between 
each U.S. Census.
    The receipts of producer milk and producer milk used in Class I 
reflects millions of pounds. Beginning in 1990, due to disadvantageous 
price situations in some markets, regulated handlers elected not to 
pool milk that normally would have been associated with the Order. This 
has reduced, sometimes substantially, the volume of producer milk 
receipts reported for some markets. This can also affect significantly 
the comparability of other ``Measures of Growth'' based on this 
statistic.
    The percent used as Class I is the percentage of all milk pooled 
that is used to produce Class I fluid products as defined by the Code 
of Federal Regulation (CFR 1000.15).
    The percentage of all milk sold is the amount of producer milk 
pooled on Federal Orders as a percentage of the total amount of milk 
sold to U.S. plants and dealers, both as fluid grade (Grade A) and all 
milk sold. The amount of milk sold to U.S. plants and dealers is 
obtained from the USDA National Agricultural Statistics Service Milk 
Production, Disposition, and Income, 2021 Summary, ISSN: 1949-1506, 
issued April 28, 2022.
    The milk price at 3.5% butterfat content is the weighted average 
Federal Order minimum regulated milk price for milk at a standardized 
3.5% butterfat content. Milk prices are simple averages for 1950-65 and 
weighted averages for 1970 to date. Milk prices are based on the blend 
(uniform) price adjusted for the butterfat content, and starting in 
1990, other milk components of producer milk.
    The average daily delivery of milk per producer is calculated by 
dividing producer receipts by the number of producers pooled. The 
annual average is the average of the monthly averages.
    The annual gross value of receipts of producer milk per producer is 
calculated by dividing the total value of all pooled milk as reported 
by the Market Administrators divided by the simple average of the 
number of producers pooled each month during the year.
    The annual gross value of all receipts of producer milk is the 
total value of all milk pooled for each respective year as reported by 
the Market Administrators.
    Reliability: The AMS audit staff periodically perform on-site 
audits on the amounts of producer milk pooled to ensure accurate 
reporting of pool, utilization, and price information.
Information Contacts
    Listed below are the specialists in the Agricultural Marketing 
Service, Dairy Program, Market Information Branch to contact for 
additional information. E-mail inquiries may be sent to 
[email protected].

  Lorie Warren Cashman, Chief, Market Information (202) 720-4405

 
 
 
               Dairy Products Mandatory Reporting Program
Jessica Newsome                      Kerry Siekmann
Dairy Products Marketing             Dairy Products Marketing Specialist
 Specialist, Coordinator
(202) 260-9091                       (952) 277-2363
 
Hripsime Tamrazyan                   Joshua McNeff
Dairy Products Marketing Specialist  Dairy Products Marketing Specialist
(202) 260-8953                       (202) 937-4934
                 Federal Milk Order Information Program
Kerry Siekmann                       Joshua McNeff
Dairy Products Marketing             Dairy Products Marketing Specialist
 Specialist, Coordinator
(952) 277-2363                       (202) 937-4934
 

    For the most current release, visit AMS Dairy Program (Dairy 
Products Mandatory Reporting Program's page) \1\ or Cornell 
University's Library (National Dairy Products Sales Report page).\2\
---------------------------------------------------------------------------
    \1\ http://www.ams.usda.gov/rules-regulations/mmr/dmr.
    \2\ https://usda.library.cornell.edu/concern/publications/
zs25x847n?locale=en.
---------------------------------------------------------------------------
    To receive e-mail notification for AMS Dairy Program publications, 
visit Cornell University's Library \3\ and follow the instructions.
---------------------------------------------------------------------------
    \3\ https://usda.library.cornell.edu/.
    
    
          In accordance with Federal civil rights law and U.S. 
        Department of Agriculture (USDA) civil rights regulations and 
        policies, the USDA, its Agencies, offices, and employees, and 
        institutions participating in or administering USDA programs 
        are prohibited from discriminating based on race, color, 
        national origin, religion, sex, gender identity (including 
        gender expression), sexual orientation, disability, age, 
        marital status, family/parental status, income derived from a 
        public assistance program, political beliefs, or reprisal or 
        retaliation for prior civil rights activity, in any program or 
        activity conducted or funded by USDA (not all bases apply to 
        all programs). Remedies and complaint filing deadlines vary by 
        program or incident. Persons with disabilities who require 
        alternative means of communication for program information 
        (e.g., Braille, large print, audiotape, American Sign Language, 
        etc.) should contact the responsible Agency or USDA's TARGET 
        Center at (202) 720-2600 (voice and TTY) or contact USDA 
        through the Federal Relay Service at (800) 877-8339. 
        Additionally, program information may be made available in 
        languages other than English. To file a program discrimination 
        complaint, complete the USDA Program Discrimination Complaint 
        Form, AD-3027, found online at How to File a Program 
        Discrimination Complaint \4\ and at any USDA office or write a 
        letter addressed to USDA and provide in the letter all of the 
        information requested in the form. To request a copy of the 
        complaint form, call (866) 632-9992. Submit your completed form 
        or letter to USDA by: (1) mail: U.S. Department of Agriculture, 
        Office of the Assistant Secretary for Civil Rights, 1400 
        Independence Avenue, SW, Washington, D.C. 20250-9410; (2) fax: 
        (202) 690-7442; or (3) email: [email protected].
---------------------------------------------------------------------------
    \4\ https://www.ascr.usda.gov/how-file-program-discrimination-
complaint.
---------------------------------------------------------------------------
                              attachment 2


[https://brownfieldagnews.com/news/ag-secretary-answers-dairy-
consensus-question/]
Ag Secretary Answers Dairy Consensus Question
June 3, 2022 By Larry Lee *
---------------------------------------------------------------------------
    * https://brownfieldagnews.com/author/llee/.
    
    
    Dairy producers, processors, and other stakeholders will have to 
agree on one dairy pricing plan. That's according to Ag Secretary Tom 
Vilsack who tells Brownfield it doesn't make sense to open up the 
Federal Milk Marketing Order hearing process until they do. ``If you 
have too many competing proposals, essentially, you're back to the same 
old same old and it makes it more difficult because it's easier to sort 
of stalemate the process.''
    Vilsack tells Brownfield he believes having all of the dairy 
stakeholders iron out the issues before opening up the Federal Order 
hearing process has the greatest chance of affecting change in a place 
where a significant percentage of producers think change is necessary. 
``I think everybody agrees, or most everybody agrees that changes are 
necessary. Where there is disagreement is precisely how to structure 
those changes to deal with the regional difference in dairy, and I 
think its going to be important for folks to sit down, work through 
those difficulties and see if they can come up with a consensus.''
    Last week, the American Dairy Coalition sent Vilsack a letter 
asking him to clarify if he would allow the hearing process to vet 
different milk pricing options or if the dairy sector had to agree to 
something first. The letter says there is an industry-wide consensus 
that the Class I milk pricing change made in the 2018 Farm Bill needs 
amending, though there are differences in how this should be 
accomplished.
    ADC board's letter to the Secretary also says any move to increase 
processor make allowance credits should be linked to achieving 
transparent milk pricing for farmers.


          https://brownfieldagnews.com/wp-content/uploads/2022/06/
        220602-EXCERPT-Tom-Vilsack-on-ADCs-dairy-consensus-question-
        1.mp3.
          Editor's note: the audio clip is retained in Committee file.


 
                     A 2022 REVIEW OF THE FARM BILL

                               (FORESTRY)

                              ----------                              


                        WEDNESDAY, JULY 13, 2022

                  House of Representatives,
                 Subcommittee on Conservation and Forestry,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Abigail Davis Spanberger [Chair of the Subcommittee] 
presiding.
    Members present: Representatives Spanberger, Kuster, 
O'Halleran, Panetta, Schrier, Costa, LaMalfa, DesJarlais, 
Allen, Kelly, Johnson, Miller, Moore, and Thompson (ex 
officio).
    Staff present: Paul Babbitt, Lyron Blum-Evitts, Josh 
Lobert, John Busovsky, Patricia Straughn, Erin Wilson, and Dana 
Sandman.

     OPENING STATEMENT OF HON. ABIGAIL DAVIS SPANBERGER, A 
            REPRESENTATIVE IN CONGRESS FROM VIRGINIA

    The Chair. This hearing of the Subcommittee on Conservation 
and Forestry entitled, A 2022 Review of the Farm Bill: 
Forestry, will come to order.
    Welcome, and thank you for joining today's hearing. After 
brief opening remarks, Members will receive testimony from our 
witnesses today, and then the hearing will be open to 
questions. In consultation with the Ranking Member and pursuant 
to Rule XI(e), I want to make Members of the Subcommittee aware 
that other Members of the full Committee may join us today, and 
we welcome you.
    Good morning. I would like to welcome you to today's 
hearing, A 2022 Review of the Farm Bill: Forestry. This hearing 
is an opportunity to hear from Chief Moore of U.S. Forest 
Service and a variety of American industry, environmental, and 
forestry-focused organizations on their thoughts about what is 
and is not working from the forestry provisions of the 2018 
Farm Bill, as well as about the other ways this Committee can 
better support our forests, support the American workers they 
employ, and support regional economies that they keep afloat.
    Healthy forests, both public and private, are critical to 
our fight against the climate crisis, and we have seen the 
urgency of this fight as we prepare for and respond to yet 
another brutal fire season here in the United States. Forests 
not only sequester carbon pollution, but they can be critical 
in increasing land resilience to flooding, improving water 
quality, and promoting biodiversity. In addition, healthy 
forests support rural economies, like those I represent, by 
providing good-paying jobs across the tourism, recreation, 
logging, and forest-product sectors. As such, farm bill 
programs that support innovation in wood products and efforts 
that make forest restoration more successful are key to 
promoting rural prosperity.
    I look forward to hearing from our witnesses about what is 
working and where we need to make adjustments to the farm bill 
programs to protect the health of our forests, grow rural 
economies, keep Americans in good jobs, and combat the climate 
crisis.
    [The prepared statement of Ms. Spanberger follows:]

 Prepared Statement of Hon. Abigail Davis Spanberger, a Representative 
                       in Congress from Virginia
    Good morning, I would like to welcome you to today's hearing, 
entitled ``A 2022 Review of the Farm Bill: Forestry.'' This hearing is 
our opportunity to hear from Chief Moore of the U.S. Forest Service and 
a variety of American industry, environmental, and forestry-focused 
organizations on their thoughts about what is and is not working from 
the forestry provisions of the 2018 Farm Bill--as well as about other 
ways this Committee can better support our forests, support the 
American workers they employ, and support the regional economies they 
keep afloat.
    Healthy forests, both public and private, are critical to our fight 
against the climate crisis--and we've seen the urgency of this fight as 
we prepare for and respond to yet another brutal fire season here in 
the United States.
    Forests not only sequester carbon pollution, but they can be 
critical to increasing land resilience to flooding, improving water 
quality, and promoting biodiversity. In addition, healthy forests 
support rural economies by providing good-paying jobs across the 
tourism, recreation, logging, and forest-product sectors. As such, farm 
bill programs that support innovation in wood products and efforts that 
make forest restoration more successful are key to promoting rural 
prosperity. I look forward to hearing from our witnesses about what is 
working and where we need to make adjustments to farm bill programs to 
protect the health of our forests, grow rural economies, keep Americans 
in good jobs, and combat the climate crisis.

    The Chair. I now recognize Ranking Member--whoops, I now 
recognize the chair of the full Committee if he would like to 
make any opening comments.
    If you will excuse me, I now recognize Ranking Member 
LaMalfa, the gentleman from California, for opening remarks.

  OPENING STATEMENT OF HON. DOUG LaMALFA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. LaMalfa. Thank you, Madam Chair. I appreciate the 
hearing today and the opportunity to talk about something that 
is going to be very, very timely as, of course, we are entering 
the heart of the fire season of 2022. I guess we have a fire 
season all the time anymore. So what we already have are 5 
million acres have burned across the country with nearly 80 
large fires currently burning. The Forest Service, Committee, 
and those watching must understand the West is facing a crisis.
    The Forestry Title in the farm bill must be used to 
increase the pace and scale of forest management. Rural and 
forested communities nationwide can either benefit from logging 
and proper forest management or they will suffer from 
mismanaged forests that threaten them and their towns with 
wildfire. For decades, forest health has declined as active 
forest management has stalled or stopped even completely. The 
West has faced some of the most destructive wildfires in our 
nation's history just in the past several years. Our National 
Forests have never been in more urgent need of increased 
management and restoration.
    In my district, in northern California, we have seen 
devastating wildfires in recent years such as the Camp Fire in 
2018 that had destroyed the town of Paradise. And last year's 
Dixie Fire, right at a million acres, one fire, a million 
acres, as well as the loss of two towns, Greenville and Canyon 
Dam, completely.
    Across the West, we live with these challenges every day. 
Forest management has reached a crisis level, and we must act 
accordingly and act now. Forest Service needs to act like there 
is a crisis and cut trees, thin overgrowth of vegetation, and 
restore our forests. Tens of millions of acres are at risk of 
catastrophic wildfire every year. Nothing short of a 
fundamental change in mindset will fix this crisis. The Forest 
Service must aggressively cut trees. A 10 year plan aims to 
thin and do vegetation management on 20 million acres of 
National Forest System lands and an additional 30 million on 
other Federal, state, Tribal, and private lands.
    But, the National Forest system consists of 193 million 
acres of land. So are we to sit and watch the remaining 173 
million acres go up over the next 10 years? The Forest Service 
needs additional resources, tools, and authorities in place to 
do this needed work. Tell us now at this Committee. Delay is 
unacceptable. People's lives are at risk. The asset is at risk. 
Wildlife is at risk, habitat, water quality, air quality. We 
know what the risks are, and we have to live with them yearly.
    The Forest Service must make real progress to lessen the 
risk of catastrophic fire. Through the farm bill, this 
Committee can require the Forest Service to do the work that is 
desperately needed and way behind, encourage better forest 
management, help mitigate wildfire, and grow opportunities for 
rural communities that rely on our forests as economic agents 
as they used to. Critically, we need to address the over-
litigation of projects the Forest Service needs to do to 
protect forests from catastrophic fire. For example, just at 
the end of June, a Federal court stopped two projects that the 
Forest Service planned to do in Idaho, one entirely in the 
wildland-urban interface. This example is duplicated across the 
West, ruining landscapes, putting lives at risk, and destroying 
rural towns. Over-litigation stops or slows necessary forest 
management, and sadly, many acres that were tied up in lawsuits 
have now been completely burnt.
    As it did to the people of Feather Falls in northern 
California, destroying the forests and devastating downstream 
watersheds, some of those forests will take hundreds of years 
to recover. Look at the fires in California that killed almost 
\1/5\ of all the giant sequoias in the world currently being 
threatened right now. The answer so far has been wrap them with 
foil or put sprinkler systems out? Yes, that will help right 
now in the short-term, but real work needs to be done. I am 
glad I am part of a piece of legislation to help do so. But it 
needs to happen now. The last recorded evidence of mass giant 
sequoia mortality occurred in 1297. That was the year that 
William Wallace defeated the English at the Battle of Stirling 
Bridge.
    This can't be stressed enough. Our public lands are facing 
a crisis, and the Forest Service must act now. Currently, more 
than 500 sequoias are being threatened in the Mariposa Grove 
near Yosemite National Park by the Washburn Fire. Well, this is 
Park Service, not Forest Service. It is basically the same 
issue. Firefighters on the ground are battling to save these 
trees in the town of Wawona, and I want to thank them for their 
efforts every fire season to fight the fires that threaten 
towns and our public lands. But more work must be done pre-fire 
season so firefighters are not placed in situations of 
catastrophic fire. These extremely hot and fast-moving fires 
are a direct result of poor management and make the 
firefighters' jobs more difficult and even more deadly. This 
must end. We must properly manage the forests.
    The Forestry Title of the farm bill contains a variety of 
provisions. We must expand the management authorities in this 
law. For example, the 2018 Farm Bill contained a renewal of the 
insect and disease categorical exclusion and expanded it to 
include hazardous fuels reduction. These should be increased in 
size dramatically. Our forests need it. For many acres, it is 
too late as they have already been destroyed by high-intensity 
wildfire.
    Public lands are currently not good neighbors. They are 
tinderboxes waiting to go up in smoke. So while the private-
sector is held to a higher standard if they have an accident or 
it turns out they didn't, they get sued by the governments, but 
nobody gets to have a say on when Federal lands or other lands 
start a fire and affect private lands.
    This Committee must expand the Good Neighbor Authority to 
encourage partnerships with the Forest Service and the states, 
counties, and Tribes that are harmed most by fire. We must also 
coordinate with private industry to add value to the timber and 
the slash that must be removed from our public forests. The 
2018 Farm Bill modified the Community Wood Energy Program and 
continued a research and development program to help encourage 
new markets and infrastructure for forest products and advance 
tall wood building construction in the United States. But we 
must also open new mills and other facilities to ensure that 
they have a consistent, reliable source of Federal timber to 
feed those mills over a period of time, at least 30 years. You 
are not going to build something and invest hundreds of 
millions of dollars if you can't count on a feedstock. The 
Forest Service needs to be behind guaranteeing that and not 
giving us roundy-roundy answers.
    The 2018 Farm Bill expanded authorities that have focused a 
landscape-scale restoration program on cross-boundary 
restoration and authorize new tools that allow for the 
collaborative treatment of hazardous fuel loads on bordering 
non-Federal lands. We must continue this progress by expanding 
partnerships and authorities that allow for increased 
landscape-scale treatments. We are seeing landscape-scale 
fires--the Dixie Fire, again, nearly a million acres--so we 
need forest management that can match that scale.
    Chief Moore, and to all our witnesses, our public lands are 
indeed facing a crisis. I know that is not news, but the 
reaction needs to be much stronger. As we begin the process of 
writing this next farm bill, what authorities need to be added 
or expanded to address the catastrophic fires that are 
threatening the West? I look forward to the answers. Madam 
Chair, I yield back. Thank you.
    The Chair. Thank you. I now recognize Ranking Member of the 
full Committee, Mr. Thompson, for any opening comments that he 
would like to make.

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

    Mr. Thompson. Well, thank you, Chair Spanberger and Ranking 
Member LaMalfa, and happy National Forest Week. I much 
appreciate today's hearing to review the Forestry Title of the 
2018 Farm Bill as it is a key interest to Pennsylvania's 15th 
Congressional District, the home to Pennsylvania's only 
National Forest, the Allegheny.
    The forestry provisions have progressed in the past several 
farm bills and will again be an important part of the next 
reauthorization. As a former Chairman of the Conservation, 
Energy, and Forestry Subcommittee, I can confidently say this 
Committee worked hard in both 2014 and the 2018 Farm Bills to 
provide tools and authorities for the Forest Service to better 
manage our forests, increase partnerships, and encourage new 
markets for forest products. Given the challenges before the 
Forest Service and forest managers nationwide, the next farm 
bill must build on these reforms and provide additional 
authorities for those very same purposes and more.
    Although the recent infrastructure law provided more than 
$3 billion to the Forest Service for restoration and fire 
prevention activities, funding alone won't address the urgent 
needs that we have in forest communities and across the 
National Forest System. If we truly are going to make progress 
on the tens of millions of acres that are overgrown and in need 
of immediate treatment, we need every tool available and 
consider others that will promote forest health, and help meet 
our long-term management goals.
    Now while some continue to call for reworking the 
conservation programs in title II to emphasize climate 
benefits, forestry and management must also be a major part of 
that conversation. The farm bill's Forestry Title presents an 
enormous opportunity to generate climate benefits, through what 
I would call natural solutions and on a broad landscape scale. 
Through active management, we can restore our forests and 
reduce the intensity and risk of wildfire. Simultaneously, we 
can create stronger carbon sinks that will sequester even more 
carbon and forest products that indefinitely store it. 
According to the Forest Service, our forests are currently 
sequestering 14 percent of all U.S. emissions and could nearly 
double that through active management.
    Now, we can't have a healthy environment without a healthy 
economy and vice versa. And with that in mind, we also need to 
be doing more to allow for increased timber harvesting in the 
National Forest System. Sustainable harvests will encourage 
both forest health and the economic health of the forested 
communities in many rural counties.
    Chief Moore, thank you for being here today and sharing 
your perspective as we begin the 2023 Farm Bill process. I also 
would like to welcome all of our witnesses on panel two for 
your time and expertise today. We look forward to today's 
testimony and working with you as we begin developing the next 
farm bill.
    Thank you, Madam Chair, and I yield back.
    The Chair. The chair would request that other Members 
submit their opening statements for the record so that 
witnesses may begin their testimony to ensure that there is 
ample time for questions.
    I am pleased to welcome two panels of witnesses to the 
Subcommittee on Conservation and Forestry of the larger 
Agriculture Committee today. On our first panel, our witness is 
Chief of the U.S. Department of Agriculture's Forest Service, 
Mr. Randy Moore. Mr. Moore is accompanied by Deputy Chief of 
the National Forest System of the Forest Service, Mr. Chris 
French, and Deputy Chief of State and Private Forestry of the 
Forest Service, Ms. Jaelith Hall-Rivera.
    Chief Moore, you now have 5 minutes to deliver your opening 
testimony. The timer should be visible to you on your screen 
and will count down to zero, at which point your time has 
expired. Chief Moore, please begin whenever you are ready.

  STATEMENT OF RANDY MOORE, CHIEF, U.S. FOREST SERVICE, U.S. 
  DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY 
   CHRISTOPHER FRENCH, DEPUTY CHIEF, NATIONAL FOREST SYSTEM; 
                     JAELITH, HALL-RIVERA, 
      DEPUTY CHIEF, STATE AND PRIVATE FORESTRY, USFS, USDA

    Mr. Moore. Chair Spanberger, Ranking Member LaMalfa, and 
Members of this Subcommittee, I appreciate the opportunity to 
testify before you as my first time as Chief of the U.S. Forest 
Service. I am joined today, as indicated, by my Deputy Chief, 
Chris French, the National Forest System's Deputy Chief, and as 
well as Jaelith Hall-Rivera, Deputy Chief for State and Private 
Forestry.
    My testimony today will focus on the important role that 
the farm bill has played in providing authorities to carry out 
the agency's work, including with our partners, to steward the 
nation's forests. The Forest Service, along with many of our 
partners, work together to sustain healthy, resilient 
landscapes for all the services the nation's forests and 
grasslands provide. For instance, forests are America's largest 
terrestrial carbon sink, which was indicated earlier. Our 
forests plus harvested wood products and urban forests offset 
almost 15 percent of the nation's total carbon dioxide 
emissions and almost 12 percent of all greenhouse gas 
emissions.
    The National Forests alone are the source of drinking water 
for more than 60 million people living in 3,400 different 
communities across 36 states, the value of $367 billion for the 
City of Los Angeles alone. Forest products play a key role and 
an important role. In Fiscal Year 2021 the National Forest 
generated 2.9 billion board feet of timber. That is enough to 
build 180,000 new single-family homes.
    The main way that Americans enjoy and use their National 
Forests and Grasslands today is for outdoor recreation. We have 
370,000 miles of roads to give people access to their favorite 
spots. Our visitors have 159,000 miles of trails that they can 
use across the landscapes of all kinds. In 2020, the National 
Forest System supported more than 370,000 jobs and contributed 
more than $35 billion to the GDP.
    Past farm bills have provided and expanded on various 
authorities that have given the agency and our partners 
critical tools for managing forests for many goods and services 
that they provide to the public. These tools have been 
instrumental in accomplishing our collective work on the 
ground. For instance, the stewardship contract authority, which 
was reauthorized in 2014 Farm Bill, has promoted closer public-
private working relationships by using the value of timber or 
other forest products to offset the cost of restoration 
activities. Over the past 4 fiscal years, use of this authority 
has resulted in over \1/2\ a million acres of fuel treatments 
in the wildland-urban interface, 750,000 tons of biomass for 
energy production, and nearly 400 miles of stream habitat 
restored for other services.
    In addition, Congress permanently authorized the Good 
Neighbor Authority in the 2014 Farm Bill. This authority allows 
the agency to more efficiently work with states to perform 
restoration on Federal lands. And in the 2018 Farm Bill, 
Congress expanded GNA to include federally recognized Indian 
Tribes and county governments to allow funds received by the 
sale of timber sales to be used by the state to accomplish 
additional work under this authority. To date, the Forest 
Service has completed 339 Good Neighbor agreements across 38 
states, nine Tribal GNA agreements, and seven agreements with 
counties to accomplish a variety of restoration work.
    Timber harvest under GNA continues to grow. Two hundred and 
seventy-three million board feet were sold in 2021 under this 
authority, and that is an increase from 89 million board feet 
in 2018.
    The 2018 Farm Bill also reauthorized the Collaborative 
Forest Landscape Restoration Program, and it allowed for the 
agency to issue a waiver to extend existing projects up to an 
additional 10 years. The authority has allowed us to build 
partnerships and involve communities in decision-making 
process. The Wood Innovation Grants Program, which was formally 
established in a previous farm bill, supports proposals that 
expand and accelerate wood products and wood energy markets to 
support managing the nation's forests. For instance, the 
program has helped catalyze U.S. growth in mass timber 
construction with over 1,400 buildings built, either under 
construction or in design, and the rate is accelerating each 
year.
    The Forest Service is and will be using prior farm bill and 
other authorities to carry out the 10 year implementation plan 
associated with our Wildfire Crisis Strategy to deliver funding 
provided through the bipartisan infrastructure law. A couple of 
examples include: in central Washington, the Okanogan-Wenatchee 
National Forest will use, among other authorities, a GNA 
agreement with the state to reduce the risk on over 2 million 
acres over 10 years. In Oregon, the Deschutes National Forest 
using authorities under the GNA and CFLRP and others to carry 
out an expected 50,000 acres of treatment over the next 3 
fiscal years to reduce the wildfire risks to central Oregon 
communities.
    Throughout implementation of the strategy, we will continue 
to work with our industry partners through programs like Wood 
Innovation Grants Programs to develop new and innovative uses 
of wood and develop markets of biomass for small diameter 
material.
    In closing, I want to thank the Committee for your efforts, 
and I look forward to working with you as the Committee drafts 
the next farm bill. Thank you, and I look forward to your 
questions.
    [The prepared statement of Mr. Moore follows:]

  Prepared Statement of Randy Moore, Chief, U.S. Forest Service, U.S. 
              Department of Agriculture, Washington, D.C.
    Chair Spanberger, Ranking Member LaMalfa, and Members of the 
Subcommittee, thank you for the opportunity to address the Subcommittee 
regarding the U.S. Department of Agriculture (USDA), Forest Service's 
implementation of the 2018 Farm Bill forestry programs.
    Over the past 5 decades, the Forest Service has received 
authorization for numerous valuable programs through the farm bill that 
support our mission to sustain the health, diversity, and productivity 
of the nation's forests and grasslands to meet the needs of present and 
future generations. These authorizations have supported both our 
efforts on our Federal lands, as well as ways to sustain and support 
the health and conservation of our nation's state and private 
forestlands. Throughout the 2018 Farm Bill, principally in the Forestry 
Title, there are many authorities and provisions that assist the Forest 
Service in accomplishing our priority work, particularly ecological 
restoration, support to communities, vital voluntary conservation 
efforts, and reducing hazardous fuels. Together, these provisions 
demonstrate our commitment to shared stewardship of National Forests 
and Grasslands, while strengthening relationships with states, Tribes, 
and local communities.
    The Forest Service is using the 2018 Farm Bill authorities to help 
advance the agency's 10 year wildfire crisis strategy. Along with the 
tools and investments Congress enacted in the 2018 Consolidated 
Appropriations Act and the Infrastructure Investment and Jobs Act 
(IIJA), USDA is using farm bill authorities to combat the growing 
wildfire risk, create new markets and technology for wood products, and 
working to restore forests through partnerships and collaboration 
across landscapes. Today, I will focus on the implementation of the 
farm bill authorities and highlight the accomplishments achieved 
through use of the reauthorized Insect and Disease Categorical 
Exclusion (Section 603 of the Healthy Forests Restoration Act), the 
expanded Good Neighbor Authority, the new Tribal forestry demonstration 
project, the Collaborative Forest Landscape Restoration Program, and 
the Wood Innovation grant programs.
    The 2014 Farm Bill's Insect and Disease provisions set requirements 
for designating affected National Forest System areas, enabling 
streamlined environmental review procedures to expedite projects that 
reduce the risk and extent of, or increase the resilience to, insect or 
disease infestations. As of June 2022, approximately 77.5 million acres 
across National Forest System lands have been designated as already 
experiencing, or at risk of experiencing, insect and disease 
infestations. The 2014 Farm Bill also created a statutory Categorical 
Exclusion for certain insect and disease projects that met certain 
stringent criteria. The 2018 Farm Bill extended this Categorical 
Exclusion authority and allowed projects that reduce hazardous fuels to 
be carried out in the designated treatment areas (Section 8407). As of 
May 2022, the Forest Service has signed decisions for or is in the 
process of analyzing 274 projects encompassing 538,129 acres in 31 
states using the Insect and Disease Categorical Exclusion.
    The Good Neighbor Authority (GNA), first authorized in the 2014 
Farm Bill, allows the Forest Service to work with states, Tribes, and 
counties to perform treatments across larger landscapes through 
partnerships. In 2014, this authority allowed the Forest Service to 
enter into cooperative agreements or contracts with states and Puerto 
Rico to perform authorized watershed restoration and forest management 
services by our partners on Federal lands. The 2018 Farm Bill expanded 
this valuable authority to Tribes and counties and allows states to 
maintain revenues generated from the sale of National Forest System 
timber for future GNA activities (Section 8624). To date, the Forest 
Service has completed 339 GNA agreements to accomplish a variety of 
restoration work: 38 state agreements, nine Tribal agreements, and 
seven agreements with counties. This authority is extremely beneficial 
because it improves the Agency's access to state, Tribal and county 
expertise to accomplish restoration and hazardous fuels reduction work 
across larger landscapes. This authority also supports working with and 
learning from our partners so we can apply collective knowledge broadly 
on public lands.
    USDA is responsible for managing millions of acres of Federal lands 
and waters that contain cultural and natural resources of significance 
and value to Tribes, including sacred religious sites, burial sites, 
wildlife resources, and sources of Indigenous foods and medicines. The 
2018 Farm Bill authorized a new Tribal forestry demonstration project 
to allow Tribes to propose projects on National Forest lands to drive 
forest restoration and protect Tribal resources from threats such as 
fire, insects, and disease. As of the second quarter of Fiscal Year 
2022, agreements have been executed with Confederated Tribes of the 
Colville Reservation, Leech Lake Band of Ojibwe, Pueblo of Acoma, 
Pueblo of Jemez, and The Tulalip Tribes.
    The 2018 Farm Bill reauthorized and increased the authorization for 
appropriations for the Collaborative Forest Landscape Restoration 
Program (CFLRP) (Section 8629). Through the CFLRP, we are able to 
accomplish critical collaborative, science-based ecosystem restoration 
of priority forest landscapes. These projects produce significant 
outcomes on the landscape, including reducing the risk of catastrophic 
wildfire, eradicating invasive plants, restoring stream habitat, and 
accomplishing vital forest vegetation work through planting, seeding, 
and natural regeneration. Since the beginning of the program through 
Fiscal Year 2021, the Forest Service has funded 24 CFLRP landscapes 
nationwide. These projects have advanced treatment on over 4.5 million 
acres to reduce the risk of catastrophic wildfire, established 224,000 
acres of forest vegetation, and enhanced over 1,700 miles of stream 
habitat. In addition, CFLRP also has significant economic benefits, 
supporting over $2.3 billion in total local labor income. In April 
2022, USDA announced an additional $31.1 million in funding for 15 
CFLRP projects, including six new projects.
    The 2018 Farm Bill codified the existing Wood Innovation Grant 
Program and established a new program, the Community Wood Grant 
Program. These grant programs support Forest Service efforts to build 
innovative markets for wood products and wood energy that support rural 
economies with more jobs and income. The Wood Innovations and Community 
Wood Programs help support more and better markets and capacity for 
sustainable forest management and hazardous fuels reduction. The Wood 
Innovation Grant Program (Section 8643) allows the Forest Service to 
award grants to individuals, public or private entities, or state, 
local or Tribal governments for the purpose of advancing the use of 
innovative wood products. The program stimulates and expands 
sustainable wood products and wood energy markets, with a focus on mass 
timber, tall wood buildings, renewable wood energy, and technological 
development that supports fuel reduction and sustainable forest 
management. The Community Wood Grant Program (Section 8644) supports 
facility expansion or new equipment for thermal wood energy (wood-to-
heat) projects and innovative wood products manufacturing. In Fiscal 
Year 2022, the Forest Service awarded over $32 million in grants for 99 
projects using these two authorities.
    Our 10 year Wildfire Crisis Strategy aims to increase science-based 
fuels treatments by up to four times previous treatment levels, 
especially in those areas most at risk. Fuels treatments by the Forest 
Service, together with partners, have made a difference over the years. 
However, the scale of treatments is outmatched by the rapid increase in 
the scale and severity of wildfires as climate change accelerates. This 
Strategy calls for treating up to 20 million additional acres of 
National Forest System lands over the coming decade, and working with 
partners, including colleagues at the U.S. Department of the Interior, 
to treat up to 30 million additional acres on adjoining lands of 
multiple ownerships, while building a long-term maintenance plan. The 
intent for these treatments is to reduce the trajectory of wildfire 
risk to communities, municipal water sources, and natural resources, 
and to restore fire-adapted landscapes so they are more resilient.
    USDA is thankful that Congress has provided extensive tools, 
programs, and funding for partnerships and landscape scale work to 
carry out the science-based strategy. Many of these authorities have 
come through the farm bill, including GNA agreements, CFLRP, and 
stewardship contracts. Examples of initial projects under the strategy 
include:

   Central Washington Initiative. The Okanogan-Wenatchee 
        National Forest in Washington will use, among other 
        authorities, a GNA agreement with the Washington Department of 
        Natural Resources and stewardship agreements for timber, fuels, 
        and aquatics projects. The project is intended to reduce the 
        risk of wildfire and restore cross-boundary landscapes on 2.45 
        million acres over 10 years (1.35 million acres of National 
        Forest System lands; 1.1 million acres on other land 
        ownerships).

   Colorado Front Range. Due to years of fire suppression, 
        Colorado's Front Range forests are unhealthy and lend 
        themselves to intense wildfires. These forests are key sources 
        of water for the Front Range, making it critical to reduce the 
        likelihood, intensity, and size of fires to reduce the level of 
        sedimentation in reservoirs. The Arapaho and Roosevelt National 
        Forests and Pike-San Isabel National Forests are utilizing GNAs 
        (among other tools) to carry out an integrated approach to 
        conducting strategic fuels treatments on over 36,000 acres over 
        the next 3 fiscal years to reduce fire risk and effect for 
        people and businesses in the area.

   Central Oregon. Central Oregon is experiencing the most 
        extensive community growth in the state with some communities 
        increasing almost 30 percent in the past 10 years. Hundreds of 
        thousands of acres of Federal land are immediately adjacent to 
        communities and subdivisions, and treatment of these areas is 
        critical to reduce wildfire risks. The Deschutes National 
        Forest is working with several partners to restore forested 
        landscapes while reducing wildfire risk to life, property and 
        economic interests in and adjacent to the communities of Bend, 
        Sunriver, LaPine and Crescent. The Forest Service is using 
        authorities under GNA, CFLRP and others to carry out an 
        expected 50,000 acres of treatments over the next 3 fiscal 
        years.

   Kootenai Complex. The Kootenai National Forest in Montana is 
        working with several partners to treat hazardous fuels across 
        150,000 acres within high-risk firesheds surrounding the 
        communities of Libby, Troy, Eureka, Stryker, Fortine and Trego. 
        These communities are at a particularly high risk of being 
        impacted by severe wildfire events. The Kootenai National 
        Forest has a GNA agreement with the state to increase the pace 
        and scale of treatments across the forest using funds from the 
        IIJA in order to mitigate wildfire risk and reduce community 
        exposure.

    The wood products industry is an important partner for helping 
achieve restoration outcomes and reduce wildfire risk under this 
Strategy. For example, the Kootenai Complex Project will also 
complement an ongoing county-wide effort to increase infrastructure 
capacity for wood product utilization. Throughout implementation of the 
Strategy, we will continue to work with our industry partners through 
programs like the Wood Innovation Grant Program to develop new and 
innovative uses of wood and develop markets for biomass and small-
diameter materials.
    Significant effort goes into drafting a new farm bill every 5 
years. USDA looks forward to our work with the Committee to ensure the 
Forest Service has the tools it needs to address the wildfire crisis as 
well as successfully implement the full breadth of the Agency's 
mission. We appreciate your efforts and look forward to providing input 
as you frame and develop the 2023 Farm Bill.

    The Chair. Thank you very much.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. You will be recognized for 5 minutes each in order to 
allow us to get to as many questions as possible. Please keep 
your microphones muted until you are recognized.
    I now recognize myself for 5 minutes.
    Chief Moore, over the past couple of years, the 
Subcommittee has heard repeatedly about the promising 
developments and innovations from the wood and forest products 
industry that offer cost-competitive, durable, climate-friendly 
building materials, from nanocellulose additives for cement to 
cross-laminated timber. We really see that the forest industry 
is leading the way on de-carbonizing our building sector. And 
in 2018, Congress authorized the Wood Innovation Grant Program 
at the U.S. Forest Service to help fund these sorts of 
innovations.
    So I would like for you to speak to what progress has been 
made since 2018 in the implementation of this program. What 
kind of products have been funded so far? And then comment 
about the current funding level, whether that has been 
sufficient to meet the demand.
    Mr. Moore. So thank you, Madam Chair. The previous farm 
bill--let me start by saying that we have seen a lot of 
accomplishments under this bill. And we are so thankful to 
Congress for their foresight in passing the bill. And we look 
forward to the next farm bill.
    Looking at the Forest Legacy Program as an example, since 
its creation in 1990, the Forest Legacy Program has permanently 
protected about just under 3 million acres of land that are 
considered to be working forested lands. And of those acres, 
over 80 percent remain in private ownership protected under the 
conservation easements. And these acres that are conserved 
through this program are really protected in perpetuity, and we 
continue to manage those as working forested lands.
    One other example and looking at that program, we have 
invested in Federal funds just under $1 billion that have been 
leveraged by an additional $1 billion in non-Federal costs. And 
what this shows is that there is strong support both at the 
local level as well as the state level for the program. So we 
are having a lot of progress in this particular part of the 
program, and we look forward to continued work in these areas.
    In terms of the Wood Innovation Grants, that is one that 
this Congress and this Committee should be really proud of. It 
has been a catalyst for a number of new opportunities across 
the country. And I will give you an example. Earlier in some of 
my testimonies I talked about how we have a lot of small-
diameter, low-value-type material across the landscape, 
particularly in the West, and what we needed to focus on is 
wood innovations. And as I mentioned in my opening statements, 
so far, that program has really taken off. We have 14 new 
buildings that have been built using cross-laminated timber, 
and that really has spurred a lot of developments and a lot of 
support across the country for utilizing small-diameter, low-
value material.
    The Chair. For those who might be watching who might not be 
familiar with some of what you are discussing, could you 
explain why that is important that you can utilize that small-
diameter, low-value timber and what that might mean for forest 
landowners and for the forestry industry?
    Mr. Moore. Yes, if you look--let me focus primarily across 
the West right now where we are having a lot of the unwanted 
wildfires across that landscape. And when you look at the type 
of material that a lot of our industries are set up, it is 
looking a lot at commercial sawlogs and the larger trees if you 
will. And what we have that has been growing on a National 
Forest since 1935, it is a lot of small-diameter, low-value-
type material. And so this material is not really suitable for 
a lot of the infrastructure that we currently have in our 
country. And what we have been doing is cutting the small-
diameter, low-value stuff, piling it up, and then burning it. 
And what we have been trying to push is wood innovation so that 
you could utilize this material that we are piling and burning.
    And so with the cross-laminated timber as an example, that 
market has really taken off. We are creating new industries 
from the West to the Southeast where we are beginning to see 
production and facilities to utilize this type of material. We 
have awarded grants to look at working with private industries 
to refine the technology with our research people. And I am 
just happy to say that that is an industry that is beginning to 
really take off. And I see a lot of utilities in the future in 
terms of how it is going to help us remove some of that 
material off the landscape.
    I will give you an example why that is important and then I 
will cut. When you look at the types of ecosystems that we have 
routinely been managing, a healthy, resilient landscape would 
be about 40 to 60 trees per acre. What we currently have on 
these landscapes is anywhere between 800 or more trees per 
acre. And so if we are going to look at reducing the wildfire 
hazard potential, we have to remove a significant number of 
trees and other materials off the landscape. And so creating 
other industries to utilize material, it just works to create 
jobs in small communities, but it also creates healthy, 
resilient landscapes, which----
    The Chair. Thank you for that answer. Certainly, I think 
the program is tremendous and benefit economically to 
communities but also to forest health, and certainly the 
ability to build buildings using cross-laminated timber is 
tremendous. I will follow up with written questions related to 
some of the funding and program dollars that have gone out the 
door so far. But thank you for your answer.
    At this point, I now recognize the gentleman from 
California for 5 minutes.
    Mr. LaMalfa. Well, thank you again, Madam Chair. Thank you, 
Chief Moore and your colleagues there, for joining us.
    Chief, we have known each other a long time, and you may 
remember about 10 years ago the first time we met was at that 
park in Sacramento because we had a lockdown on the building we 
were supposed to meet. And you and I and Tom McClintock and a 
couple others were there. And so that has been 10 years. And so 
now, I have seen lately where the Forest Service has devised a 
10 year plan to treat 20 million acres of National Forest 
Service land and an additional 30 million acres of other lands. 
And so I would kind of count that as we are 20 years in, in a 
way?
    So the Forest Service oversees nearly 200 million, 193 
million, so if the plan is to treat 20 million over 10 years, 
that is ten percent of the total holdings. So on a per-year 
basis, that averages out to 2 million per year, so basically, 
we are at the point where we are treating one percent per year, 
which is about the same more or less pace and scale to use that 
terminology, which is important, as what we are already at, one 
percent per year. So that means instead of 10 years or 20 
years, we are talking about 100 years just to get over the land 
one time and if it can be applied to all that. It kind of 
reminds me of painting the Golden Gate Bridge. They never stop. 
They start at one end and they get to the other, only it isn't 
a 100 year cycle.
    So I have lost three-plus communities in my own district, 
and there are many more that are looking down the barrel of the 
gun of even more fires, year in, year out. And my people at 
home are not going to be excited about a one percent per year 
treatment. This needs to be dramatically increased. And so in 
the plan also it is talking about 30 million acres that are not 
National Forest System, but there are others, other Fed lands, 
state lands, Tribal and private lands. Why is the focus 30 
million acres on others when they should be doing that 
themselves? Why is the Forest Service intervening on developing 
or helping them when they are not even keeping up with more 
than one percent on their own? Why does that plan look that 
way?
    Mr. Moore. So, Congressman LaMalfa, thank you for that 
question. The best available science tells us that, on average 
there is 80 percent of the risk exposure to buildings and 
wildland-urban interface occurs on less than 20 percent of the 
total landscape. And we also know that the size and placement 
of hazardous treatments, it matters and it makes a difference. 
And so when you look at treating 20 million acres of National 
Forest System's lands, that represents more than a 20 percent 
that would have a positive outcome on the 80 percent of 
exposure.
    The other piece, we use that same method to come up with 
the 30 million for private and other Federal and state lands. 
It is the same method. And how we placed treatments on the 
landscapes matters as well.
    Mr. LaMalfa. But why intervene on state lands, private 
lands, Tribal lands that are not your jurisdiction?
    Mr. Moore. Well, when you look at the fires and how it 
appears on the landscape, it doesn't really care about 
jurisdiction or boundaries. And so what we have been trying to 
do----
    Mr. LaMalfa. No, but those folks would be keeping up with 
their own if they were allowed to, especially private. It is 
hard to get a timber harvest permit in California. I worked on 
that and got a little help. But the private doesn't really need 
a lot of help other than the ability to go do it. We have had 
their lands burned extensively, so that we are going to need 
cooperation from the Forest Service so the private entities 
will have actually something to cut once the salvage period is 
over with on somebody's firescapes. So why does the private, 
why does the states need Federal Forest Service help?
    Mr. Moore. Well, again, Congressman, when you look at what 
is really happening, the majority of fires start on private 
lands. And we know that once fires start, regardless of where 
they start, that it doesn't care about boundaries. And so 
unless we can all come together to look at treating landscapes 
with multiple jurisdictional boundaries, we are not going to 
have the positive outcome on the ground that we need to have in 
order to have that fire behave.
    A lot of these landscapes in the West are created from 
fire. And in order to maintain that, we need to also continue 
to have fire but not the unwanted wildfires that we are 
currently having.
    We also know that as we look at treating the landscape at a 
larger level, the treatment that works best is to go in and do 
thinning to remove some of those trees that I mentioned to 
you----
    Mr. LaMalfa. No, I got that, sir, 40, 50 trees per acre, 
mature trees is the right amount, not 500. So is the Forest 
Service actually engaging--we talked last year at the end about 
you were assessing the damage from the fires and such, but what 
work is being done to salvage the million acres in the Dixie 
Fire and the other various fires? At a timeline--when you 
talked about you get value out of the trees, when you are 
talking the small-diameter ones, but you can get value out of 
these trees, let me ask you this more directly. Are your 
offices open yet? Because just a few months ago for Christmas 
tree permits, people couldn't even go into an office and walk 
in the door because everything's all shut down due to COVID 
situation. Are we fully engaged in having open offices and 
people doing work?
    Mr. Moore. Congressman, I would like to know where you are 
seeing offices closed. Our offices have always been open. And 
if they were not open----
    Mr. LaMalfa. Oh, come on.
    Mr. Moore.--we always had ways for people, the public to 
come in and purchase permits of any kind.
    Mr. LaMalfa. Well, I will name a couple up in northern 
California a little later then. But the bottom line, are they 
fully engaged in doing normal, pre-COVID-type work out in the 
woods, handling paperwork in the offices that need to be done 
and getting the permits out?
    Mr. Moore. They are and they have been.
    Mr. LaMalfa. Thank you.
    The Chair. I now recognize Congresswoman Kuster for 5 
minutes.
    Ms. Kuster. Thank you, Madam Chair.
    Sustainable forestry and conservation are in our blood in 
the Granite State of New Hampshire. We are home to the White 
Mountain National Forest, and we appreciate all the Forest 
Service does to protect and maintain this treasured landscape.
    I want to appreciate our colleagues on both sides of the 
aisle talking about the impact of climate change in our forests 
today. We are the second-most forested state in the country 
right behind our friends in Maine. From wood products to 
outdoor recreation, forests are an essential backbone to our 
economy, and like Mr. LaMalfa, to my district.
    This hearing is a good opportunity to take stock of where 
we are as we look ahead to the 2023 Farm Bill. We secured a lot 
of forestry wins in the 2018 Farm Bill, the Great American 
Outdoors Act (Pub. L. 116-152), the bipartisan infrastructure 
package, but there are continuing challenges that we are 
discussing today that we need to address.
    In my state, our small forest operations need more outlets 
for wood products, particularly low-grade wood that can serve 
as a reliable, locally grown source for heat. And that is why I 
have introduced legislation like the Biomass Thermal 
Utilization Act (H.R. 3251).
    Our forests also remain vulnerable to invasive pests like 
the emerald ash borer, as well as to the effects, as I have 
mentioned, of climate change. We have seen an increase in 
temperature and a reduction in humidity in New Hampshire. And I 
know from a recent trip that that is exactly what is going on 
out in the West in Yosemite.
    The good news is that forests are the most powerful clean 
air technology on Earth, reducing the net amount of 
CO2 in the atmosphere as the trees grow. Public- and 
private-sector stakeholders continue to seek proactive ways to 
increase the climate contributions of working forests and 
forest products, but that requires reliable government data to 
inform these decisions. The Forest Service Forest Inventory and 
Analysis Program is the only source of forest data that is 
national in scope and consistent in measurement. I recently co-
led a letter calling for increased funding for the FIA, which I 
have been able to secure in the House spending package.
    Chief Moore, welcome. We are delighted to have you with us. 
How have you seen FIA forest carbon data benefit working 
forests, and do you have thoughts about how we can continue to 
strengthen carbon capture data collection and collaboration?
    Mr. Moore. Thank you, Congresswoman, for that question. 
And, it is interesting that you bring this up because, as I 
look into the future, the issues that you brought up are going 
to play prominently into what is the next iteration of 
America's forests in this country. And when we talk about 
climate and we talked about carbon sequestration, there is a 
huge role that we are still trying to venture into. FIA data is 
going to be one of the foundational pieces of this. I believe 
you are going to hear from the next panel some of the work that 
we are doing with different nonprofits and other groups in 
terms of looking at the FIA data, looking at what the 
opportunities are for carbon sequestration, and then how do the 
National Forests play into this new system that seems to be 
emerging in this country? And I think some basic fundamental 
decisions need to be made is that if the Federal Government 
participates in that, what are the policies associated with 
that so that we don't create undue competition with the private 
landowner? So we are tiptoeing into this new era, and we would 
welcome Congress's involvement in this, as well as our 
continued participation with our partners.
    Ms. Kuster. Well, and I think for Members, this is one of 
the very rare opportunities for bipartisan work in the carbon 
sequestration space, so I appreciate that.
    In this appropriation cycle, I also teamed up with 
Congressman Peter Welch from Vermont to secure $1.5 million 
increase in funding for the Community Forest Program in this 
year's House spending package. Again, Chief Moore, could you 
talk about the impact of the Community Forest Program and how 
it has enhanced conservation efforts around the country while 
supporting job creation?
    Mr. Moore. Thank you. Yes, so one of the advantages is that 
it allowed Tribes to participate as grantees. And so that is 
one of the advantages and the amendments that we have in to the 
program, and we welcome that.
    Since its creation, the Community Forest and the Open Space 
Conservation Program, we permanently protected over 27,000 
acres through simple fee purchase. And I had mentioned 
something about conservation easements earlier. The 
conservation easements are not allowed to participate in this 
program. But the program targets private lands that are 
threatened by conversion to non-forest uses and those that are 
not held in trust by the United States and also lands that can 
provide the fine community benefits and at the same time allow 
public use. So this is a program, that is not heavily funded, 
but the value that it provides is significant.
    Ms. Kuster. Well, I appreciate it. My time is up, I will 
yield back, but thank you again for your service.
    Mr. Moore. Thank you.
    The Chair. The chair now recognizes Mr. DesJarlais for 5 
minutes.
    The chair now recognizes Mr. Allen for 5 minutes.
    Mr. Allen. Thank you, Mr. Moore, and your colleagues for 
being with us today and talking about this that we have been 
talking about. I was just elected and served in 2015, and we 
seem to be continuously talking about where we are and how to 
prevent these fires. Obviously, from a climate standpoint, 
trees need carbon, and so that is a good thing. And if we have 
a forest fire, obviously, that produces carbon, which we 
understand is a problem. So we got to get a handle on this 
somehow.
    And how can--obviously we have increased funding, but 
something is out there that is keeping us from getting the job 
done. What can we do? I mean, what can we as Congress do to, 
and maybe it is just not money. Maybe it is certain 
environmental issues or something like that it is really 
keeping us, like, for example, to manage the forests, you got 
to build a road in there to manage the forests. And I 
understand we can't do that, and we are prohibited from doing 
that. We can't continue on like this because, like I said, it 
is not good for the environment. We need more trees, not less 
trees. And of course, in my state we are 40 percent 
sustainable. I mean, we plant 40 percent more trees than we 
cut. And we don't have to deal with these fires because we have 
a wetter climate and we don't have those winds. But, what 
barriers can we remove by legislation to make this happen and 
get this job done?
    Mr. Moore. So, Congressman Allen, first of all, that is a 
very insightful question, and it is one that has been kind of a 
thorn for a long time. I would say that if I look at the 
regulations, we have all the regulations we need and some would 
argue too many. But I think that Congress has provided us with 
opportunities that we have not had in the recent past, probably 
in the last 70, 80 years. I think what we should be focused on 
now is how do we implement the opportunities that we currently 
have? And so we are committed to moving forward with that.
    In relation to your question about roads, it is my 
understanding that we can build roads. And in some cases, we 
have to put them to rest after we finished the project that we 
built the road for. It just all depends. And what type of road 
do we build to go in if we are going to have a timber sale or 
something?
    But as you know, people complain about the number of roads 
we have and can we maintain the number of roads that we 
currently have? And I think there are opportunities, entering 
into agreements with counties and other entities where we could 
work together collaboratively to manage the road system that we 
currently have.
    But I will tell you, we are not funded to handle the level 
of roads that we currently have in the system, so we would 
appreciate any insight or help that you as Congress would 
provide.
    Mr. Allen. Okay. And that is for the maintenance of the 
roads?
    Mr. Moore. Yes.
    Mr. Allen. Okay.
    Mr. Moore. Maintenance, just when we have storms and stuff 
and you have blowouts from water and those types of things 
sanitation.
    Mr. Allen. Right. Okay.
    In the southeastern United States, what are your main 
challenges that you face that would fall under your direction 
as far as our part of the country? And I represent the State of 
Georgia, District 12.
    Mr. Moore. Well, it is always do you have the funding to do 
the level of work that is needed to do out on the ground? And 
when I look at what the South has in abundance is that they 
have done a really good job of managing that ecosystem and the 
ecologic conditions out there for different environments, like 
the red-cockaded woodpecker or the pileated woodpecker or some 
of the other threatened and endangered species. And what we 
have done in the South is really work with our partners, those 
local community leaders and others to create these conditions.
    I think, looking at the farm bill, the 2018 Farm Bill, it 
has given us a lot of those tools to create those conditions. 
Even when I look at prescribed burning, the South contributes 
probably about 70 percent of all the burning in the U.S. And 
they have created those authorizing conditions there. And so 
while there are always opportunities to improve, I want you to 
know that, the work that is taking place down there is really 
admirable. It is not to say that we can't do more, we can't do 
better, but right now, the work that is taking place there is 
kind of--it is a perfect example of what we were trying to 
achieve across the country.
    Mr. Allen. All right. Well, thank you, sir.
    The Chair. The chair now recognizes the gentleman from 
Arizona for 5 minutes.
    Mr. O'Halleran. Well, I thank the Chair and Ranking Member 
for organizing this meeting. I also want to thank Chief Moore 
and his team for being here today.
    Since your appointment, Chief, I believe that we have made 
headway on a number of important issues, along with the last 
few years of Congress has helped to get us to where we are at 
today on many of those issues.
    I also want to highlight that this Congress has been at 
this for a long time, as was just recognized a little while 
ago. And during that time, we have continuously up until 
recently cut the Forest Service time and time and time again. 
And we also have put hindrances in their way. We have fires to 
fight. We take staff and put them on fires up until the recent 
farm bill left last time.
    But the underlying issue is that we have to work as a team. 
And that team has to work in realization of the demands that we 
have placed on the Forest Service to create such a fast change 
after years and years of neglect are difficult.
    And Chief Moore has been with us for a year now. And I 
think he is doing, and his team have done, an outstanding job 
over that course of time. And here, the American Rescue Plan 
(Pub. L. 117-2) has put money forward and the bipartisan 
infrastructure bill, but much more remains to be done. But I 
look forward to continuing this partnership moving forward.
    In 2018, we worked to ensure the farm bill created and 
strengthened conservation and forestry programs vital for rural 
Arizona and America. Five years later, the nation is facing new 
challenges that are forcing action. Unprecedented dry 
conditions do not seem to be easing. Ready access to clean and 
reliable water for states like Arizona has become dire, and 
wildfires have grown in both scope and scale, now posing an 
even greater threat to local communities. Arizona's 1st 
Congressional District has not been spared.
    In addition to the immediate difficulties these fires cause 
for communities, wildfires can also dramatically change 
watershed processes, affecting streamflow and erosion. Often, 
if the watersheds aren't properly restored, communities are put 
at risk such as in Flagstaff during the recent couple of fires 
that have been up there. This same issue threatens much of 
Flagstaff now with the burn scars left from the pipeline fire 
just several weeks ago and the monsoon season we are currently 
having.
    Chief Moore, the most significant projects to prevent 
catastrophic wildfires in northern Arizona is [inaudible]. This 
week, I went to C.C. Cragin Reservoir in Coconino County and 
forest in northern Arizona. This is a project with 64,000 acres 
with 35,300 acres eligible for mechanical treatment. Some of my 
comments are similar to Mr. LaMalfa's. We don't have the 
manpower. We don't have the scale that is necessary. Part of 
that is the current hiring market. I know you are trying to 
hire people in forests throughout the West, but it is hard to 
get them on board right now. We are trying to find contractors, 
but after years and years of contractors not being around, we 
are having difficulty doing that. I know that the roads are 
expensive to put in, but you are trying to address that issue. 
And these delays and slow progress are threatening the ability 
to get the mitigation work done that is needed on a constant 
basis actually.
    So, Chief Moore, first, how is the Forest Service 
responding to hiring challenges for full-time staff and 
contractors? Second, how can we utilize the farm bill to help 
support the industry that is needed for forest restoration work 
like biomass and finding markets for the--whether it is the 
biomass or the timber and getting this done in a way on the 
scale that is going to be needed into the future? I know you 
can't turn it around in a year or maybe even 2 years, but we do 
need to turn it around with the help of all of us. Thank you.
    Mr. Moore. Yes, Congressman, thank you. So I will start 
with the hiring piece. We are playing catch-up over the last 20 
years of what has happened to the agency. As our fire workforce 
has doubled in size over the last 20 years, we have lost about 
40 percent of our non-fire workforce, and so we are playing 
catch-up in terms of how we build and add capacity in the 
organization again.
    Mr. O'Halleran. And, Chief, in order to get us out into the 
field, we need that workforce also.
    Mr. Moore. Yes, and the part--the 38 percent that I am 
talking about is primarily from the field, and so we are moving 
in that direction. But, I don't know if this is a secret within 
the government or not, but let me just share with you some of 
the complications that we have with hiring. First of all, we 
are playing catch-up, and so when we go out and hire positions, 
the existing employees also want to compete for those positions 
so they can advance and promote upwards, and that is a good 
thing about the agency.
    What we have to pay attention to is how do we bring new 
people into the organization, and how do we expand our 
opportunities to work with community leaders and partners to 
build this back up, build that capacity up. We are never going 
to go back to where we were in terms of number of people, but 
we do think that through some of the authorities under the farm 
bill like the GNA and shared stewardship, that we are going to 
build that authorizing environment through people in these 
communities to leverage and add capacity to do the work.
    And so that is our plan for looking at hiring and adding 
capacity back in order to effectively utilize the BIL monies 
(Pub. L. 117-58) and maybe other monies that may be coming down 
in the future.
    Mr. O'Halleran. Chief, I am going to have to yield or else 
I am going to get the hook here. So, Madam Chair, I yield back.
    The Chair. Thank you. The chair now recognizes Mr. 
DesJarlais for 5 minutes. Mr. DesJarlais, you are now 
recognized for 5 minutes.
    Mr. DesJarlais. I have no questions today.
    The Chair. Thank you for your attendance at today's 
hearing, Mr. DesJarlais.
    The chair now recognizes Mr. Kelly for 5 minutes.
    Mr. Kelly. Thank you, Madam Chair, and thank you for having 
this important hearing. And, Chief Moore, thank you for being 
here, and thank you for what you are doing for the Forestry 
Service.
    Expanding markets for timber and forest products are 
vitally important to both the family tree farmers and larger 
operations in states like Mississippi, where forestry 
contributes heavily to our economy, includes over 62,000 jobs. 
Domestic markets for wood products, as well as exports to 
Europe and Asia of wood pellets, have been bright spots for 
Mississippi tree farmers. Chief Moore, is the Forest Service 
doing what it can to encourage new markets? And are there 
things we should consider for the farm bill that would assist 
the Department in developing new forest product markets?
    Mr. Moore. Yes. The short answer is yes, but I am going to 
have my Deputy Chief of State and Private Forestry respond to 
that.
    Ms. Hall-Rivera. Thank you, Chief. And thank you for that 
question, Congressman. And as the Chief has previously stated, 
we are very much focused on expanding forest markets. And we 
talked a little bit about small-diameter timber, which is a 
particular interest in the West. Your state in the Southeast, 
already there are robust timber markets there, as you know, but 
we are doing work to grow those markets, particularly around 
pellets, which I am sure you are very familiar with. And we 
have work going on both in our part of the agency, as well as 
with our international programs, because there is a lot of 
interest in the pellet market overseas, in Europe in 
particular, as well as Asia. And the southeastern United States 
is really set up well to be a purveyor of that forest product, 
and that is a really good connection with private forest 
landowners as well. So we are doing a lot of work there.
    We have had a number of dignitaries here from Europe and 
have just been taking them to your state and other states to 
show them how our sustainably managed forests in the United 
States are a really critical part of the pellet market for 
Europe and other places.
    Mr. Kelly. Thank you. And, Chief Moore, just a comment. We 
spend lots of money and lots of time. I noticed you said 70 
percent of the controlled burns are in the South and Southeast. 
It seems like that number should be 70 percent and in our 
National Forests out West where the wildfires usually occur. 
Climate and those things go to that. But we throw a lot of 
money, we have a lot of solutions, but we have to get better. 
The reality is we keep having these wildfires. I have been here 
7 years, and we continue to have the same problems. We have to 
do solutions that work.
    And with that, I yield my time to Mr. LaMalfa.
    Mr. LaMalfa. Thank you, Mr. Kelly. Chief Moore, I just 
wanted to follow up on a couple of thoughts here. The 
authorities that were given in the 2018 Farm Bill, what was the 
most helpful out of those so far do you think to move the ball?
    Mr. Moore. I think a number of them were. I think the--when 
I look at the GNA authorities, when I look at shared 
stewardship authorities, when I look at the collaborative 
forest landscape restoration opportunities there, I think they 
have all been very helpful. And I also think that they are 
pointing to a direction that is going to help us be more 
successful than we have in the past in terms of removing and 
improving a number of acres, particularly across the West.
    Mr. LaMalfa. Yes, I like more local cooperation, is pretty 
big if we are going to win this thing. Let me dwell on some of 
the firefighting aspects for a moment. I get report after 
report after report that when a fire breaks out, there might be 
somebody locally onsite, maybe a logger, maybe somebody in 
construction, somebody like that might be nearby with a water 
truck, a dozer, Cat, personnel, whatever. And they might go out 
and be willing to go put out a fire when it is \1/4\ acre, and 
they might get run off by somebody aggressively saying if you 
go out there, we will arrest you. Now, why would we chase 
people out that have forester ability, whether it is loggers or 
whoever, and they can put a circle around a fire until somebody 
gets there? Why the heavy-handed threats that I get anecdotal 
conversations about? Is that the official policy of the Forest 
Service is to turn down good Samaritans that want to help on 
Forest Service land or neighboring responsibilities?
    Mr. Moore. Congressman LaMalfa, I think what we are trying 
to do now is take a look at all opportunities, going forward. 
If I focused on how we got to where we are, it is because we 
were afraid that anyone that was not Red Carded (Incident 
Qualification Card) to handle wildfires would put themselves at 
unnecessary risk.
    Mr. LaMalfa. These aren't dumb people. These are already 
people out in the forest that are constructors or forestry 
people. They can handle themselves if they know how to run a 
Cat that is already out there?
    Mr. Moore. I understand that, sir. What I am saying is that 
what we are seeing in terms of fire behavior is not normal. And 
while an individual may feel like they are qualified to do this 
work, I am not sure. So the question for me and I think what we 
want to pursue is what opportunities do we have to look at 
inviting people from in the community to be Red Carded and 
qualified to do the very work that you are talking about? So I 
am open to looking at how we can pull people from the community 
in to do exactly what you are talking about.
    Mr. LaMalfa. But, sir, you are talking like right now is 
that, oh, we are looking at new opportunities. I have been 
doing this for 20 years at one level or another. You have been 
in the Forest Service for a long time. Why are we acting like 
this is new? These should be established protocols. We are 
having troubles with the VIPR program getting people with 
equipment ready to roll and such, too, getting the contracts 
out because everybody is sitting in their offices--why are we 
looking at this as a brand-new thing? And I will stop there for 
your answer.
    Mr. Moore. Well, it is not a brand-new thing, but it is 
something different because, prior to now, they are not allowed 
to do that. We are trying to create an environment and the 
opportunity where we can look at how we might want to do that. 
And so what I am saying is that I am open to pursuing other 
opportunities, but we need to make sure that folks are 
qualified to be on these fires because the behavior is just 
unlike anything that we have seen. So I would not want to have 
people go out on these fires and something bad happens.
    The Chair. Thank you for your answer.
    The chair now recognizes Mr. Panetta for 5 minutes.
    Mr. Panetta. Thank you, Madam Chair. I appreciate this 
opportunity.
    Chief Moore, always good to see you here in Washington in 
front of the Agriculture Committee, and I apologize for not 
being there in person.
    Obviously, you are hearing some themes here from the 
Members of this Subcommittee, and one of them is about 
staffing. Clearly, we believe that staffing is important to 
address what unfortunately has become the number one cause of 
wildfires, and that is basically humans, basically humans being 
humans and not necessarily the most intelligent aspect of our 
human race, especially when it comes to how they deal with fire 
and basically the cause of many of the fires in our National 
Forests.
    Obviously, you are aware of the bill that I introduced, the 
Save Our Forests Act (H.R. 5341), which will increase the 
amount of personnel there in our National Forest. But I also 
was wondering if you could talk about other aspects of hiring 
such as housing, such as fire stations, such as incentives in 
order to keep a well-qualified personnel there. Is that 
something that you take into account as well in looking at what 
you can do to not just hire but to retain Forest Service 
personnel?
    Mr. Moore. Yes, Congressman. First of all, I appreciate all 
your efforts in the past getting us to where we are now. In 
terms of some of the challenges, you are right. I think the 
Forest Service is a microcosm of what is happening in our 
country right now, and so there is competition for the labor 
workforce. When you look at the average salary for Federal 
Government employees, it is less than what some are making at 
that county, a local level, and certainly at the state level in 
some locations. We are hopeful that we will continue to try and 
meet our goals of 100 percent filled in terms of firefighters.
    We also know that one of the challenges is housing, 
particularly in some of our small communities, but also in some 
of our more popular areas where rent or the cost of a purchase 
of a home far exceeds our employees'--particularly at that 
lower level of the organization--ability to afford housing. So 
we are trying to pursue opportunities for housing. We are 
looking forward to creating some of the kind of new 
opportunities with some locals to look at what are the 
possibilities there to build housing and to create that 
infrastructure so that we will have opportunities to fill 
firefighters and staff engines in some of our remote locations. 
But also, how do we fill those engines in some of those 
desirable locations where it is expensive to live and where the 
competition for the labor market is really hot?
    So we would invite the community to step forward. I will 
give you an idea. It is in everyone's best interest that we 
have a presence there. And so are there opportunities for some 
of our community leaders in some of these small rural 
communities to build housing and allow us to lease those 
facilities in order to have firefighters and employees live in 
these communities? And I think that this may be an opportunity 
for us to collaborate and sit down together with community 
leaders and others to help find solutions for some of the 
really tough problems that we have with infrastructure here in 
some of our locations.
    Mr. Panetta. Okay. Chief, I appreciate that and agree with 
you wholeheartedly and look forward to continuing to work with 
you.
    Let me pivot to another issue that Mr. O'Halleran brought 
up real quickly and that is biofuels. Obviously, biofuels 
produced using feedstocks that are sourced from Federal lands 
like National Forests, unfortunately, they are not qualifying 
for the EPA Renewable Fuel Standard, which, as you can tell, 
disincentivizes the private industry from contributing to 
wildfire risk reduction on our Federal land. Can you give us an 
update on whether or not the agency is working with the EPA on 
this issue? And can you elaborate in what little time we got on 
where you see the Forest Service and private industry working 
together to meet those goals?
    Mr. Moore. Yes. Let me ask Chris French, our Deputy Chief 
for NFS, to respond.
    Mr. French. Yes. So, Congressman, thank you for the 
question. Absolutely it is a concern. It has been an issue for 
quite a number of years. We are continuing our advocacy and 
conversations with the Administration, with the EPA on the way 
that is defined and see it as a significant barrier in our 
ability to reduce wildland fuels.
    Mr. Panetta. Okay. Thank you, gentlemen. I appreciate that. 
Madam Chair, I yield back.
    The Chair. Thank you very much.
    The chair now recognizes Ranking Member Thompson for 5 
minutes.
    Mr. Thompson. Madam Chair, thank you so much. First of all, 
Chief, just thank you for what you are talking about, 
identifying the firefighter need. As a former state-certified 
firefighter, our rural communities are hurting with our mostly 
volunteer forces. And so I think you are partnering perhaps 
with USDA Rural Development economic development maybe to see 
what kind of creative things we could do.
    To have a healthy community, you really need obviously 
qualified healthcare professionals in that community. To have a 
healthy forest, I think you need qualified silviculturists that 
are working with that forest.
    So my first quick question was what is the status of 
vacancies or do we have all the qualified silviculturists in 
the system, or how many vacancies currently exist that we need 
to be filling for folks who are actually qualified as 
silviculturists?
    Mr. Moore. Yes, I don't have a number for the actual 
silviculture position. I have numbers generally across the 
agency. But, Chris, as the National Forest System's Deputy 
Chief, do we have information?
    Mr. French. We do. And we can follow up with the specifics. 
In general, Congressman----
    [The information referred to is located on p. 1295.]
    Mr. Thompson. That is great.
    Mr. French.--what I would tell you is that we are running 
about 30 to 40 percent lower than the need, and that our 
attrition rate of folks retiring is almost higher than what we 
are able to hire. Now, having said that, we are doing large 
collective hiring events across the entire nation to overcome 
that.
    Mr. Thompson. Okay. Well, I think we want to work with you 
on that. And if you got specific numbers based on region, that 
is always helpful, obviously. I mean, again, it comes back to 
the community is not going to be healthy if they don't have 
access to a healthcare provider, and forests are not going to 
be healthy unless you have that expertise. And 30 percent, that 
is huge.
    Chief, how much timber do you expect to be harvesting in 
the coming year? And do you expect the harvest levels to 
increase, decrease, or remain stable in the next 5 years?
    Mr. Moore. I expect them to increase, sir. What is 
happening now is that we are creating efficiencies. To give you 
an example, when you look at the President's budget and what it 
was funded to do, it wasn't the same budget that we actually 
got. And so what we actually got was enough to produce 2.7 
billion board feet. What the President's budget proposed was 
about 3.2 billion board feet. Now, looking at the efficiencies 
that we have gained and looking so far as some of the bill 
funding that helps supplement that, we will exceed that. And 
our expectation is that we will continue to exceed that going 
forward.
    Mr. Thompson. When you look at exceeding that, are we 
talking about sawlog? What is the breakdown between restorative 
cuts and then sawlog? Because that certainly has--both impact 
the health of a forest but we are also concerned--we are always 
concerned about not just health or the environment but the 
healthy economy as well.
    Mr. Moore. Yes, in the past, we have considered sawlogs as 
success, and that is what we had wanted. When I talked earlier 
about wood innovations and looking at new markets and new 
opportunities.
    Mr. Thompson. Right.
    Mr. Moore. No matter what we produce, whether it is the 
commercial sawlogs, whether it is biomass, there is industry 
and there is a market for that material, and that is what we 
are shooting for. Rather than wasting anything, there is a 
market to utilize it to create jobs, particularly in our small 
rural communities because we are finding that they are drying 
up because there are no jobs to keep them there.
    Mr. Thompson. Yes.
    Mr. Moore. And I think being able to create markets in some 
of these small communities does give us a really good chance of 
maintaining that infrastructure and just the texture of the 
communities that we have grown to love.
    Mr. Thompson. Yes, we have met with--it has been a couple 
of years now, but, one of the things is we need to restore 
domestic furniture. I was proud to visit one of those this past 
week. It was very exciting what they are doing, kind of a new 
startup that is doing great things.
    My staff tells me that the Forest Inventory Analysis 
Program shows that there is over 235 billion cubic feet of 
standing sawtimber on unreserved National Forest lands, over 
200 billion of which is in the lower 48. That seems like it 
makes you one of the largest holders of sawtimber, if not the 
largest in the country. Can you explain how you have this much 
sawtimber, and yet you mentioned having too much low-value 
material?
    Mr. Moore. Yes, so I am not sure where your numbers come 
from, but I will tell you, normally when I hear large numbers 
like that, I know that it is all-inclusive. It includes 
wilderness areas. It includes areas where we don't go in----
    Mr. Thompson. Yes, and this specifically was sourced as the 
on reserve, so it took that into account.
    Mr. Moore. Yes, there is no doubt we have a lot of 
opportunities and a large need to remove a lot of vegetation 
off the landscapes out there, so there is no way around that, 
sir. We have a lot of vegetation removal that we need to do, 
particularly if we are going to be looking at trying to reduce 
the unwanted fire that is happening across the landscapes 
primarily in the West, but throughout as well.
    The other issue we have, too, if you look at the South and 
you are looking at the East and some of those areas, while 
there may not be fire that destroys a lot of landscapes, it is 
hurricane and it is other storm damage that we have to be 
considerate of.
    Mr. Thompson. Right. Yes, in Allegheny it is invasive 
species.
    Mr. Moore. Yes.
    Mr. Thompson. Yes. Thanks.
    Mr. Moore. And it is that wonderful black cherry there.
    Mr. Thompson. That is right. Thanks.
    The Chair. The chair now recognizes Ms. Schrier for 5 
minutes.
    Ms. Schrier. Thank you, Madam Chair. And welcome back, 
Chief Moore. It is great to see you again.
    I first just want to reextend my invitation to you to visit 
my district this summer--it is beautiful in Washington State in 
the summer--to speak with stakeholders about priority forest 
restoration and wildfire mitigation projects. My district 
actually includes much of the land covered by the Central 
Washington Initiative. In fact, it is one of the ten landscapes 
selected for an initial investment to implement the Forest 
Service's 10 year Wildfire Crisis Strategy.
    Next, I would like to note that the farm bill programs 
which authorized trusted Forest Service partners to conduct 
management projects on Federal land are of great importance to 
Washington State. For example, Good Neighbor Authority allows 
the Washington State Department of Natural Resources to hire 
and collaborate with local companies to perform a variety of 
important watershed rangeland and forest restoration work.
    The 638 * Authority is another great example. This 
authority, the Yakima Nation is conducting a much-needed salmon 
habitat and stream restoration project on Nason Creek in 
central Washington. So through 638, the Yakima Nation brought 
their own funding and expertise to this initiative, allowing 
the work to move forward quickly and efficiently. And with the 
additional funding from the bipartisan infrastructure law, they 
are expecting to rely on continued use of the 638 authority for 
more projects in the near future.
---------------------------------------------------------------------------
    * Editor's note: This refers to P.L. 93-638, Indian Self-
Determination and Education Assistance Act.
---------------------------------------------------------------------------
    The last thing I would like to focus on for my question is 
watersheds. And as you know, forests provide drinking water to 
more than 150 million people in the United States. The Forest 
Service's Watershed Condition Framework, which was authorized 
in the Forestry Title of the 2018 Farm Bill, authorizes the 
Forest Service to evaluate watershed conditions and develop, 
implement, and monitor restoration action plans in coordination 
with other interested parties.
    In the Pacific Northwest, forest stakeholders are telling 
me that much of the watershed restoration needs are related to 
roads and that the Legacy Roads and Trails Program is the 
principal source of funding. I was really proud to have my bill 
to codify Legacy Roads and Trails included in the bipartisan 
infrastructure law, along with a $250 million appropriation.
    So my question is for you, Chief Moore. First of all, I 
know that the Service recently completed an update of the 
Watershed Condition Framework. Can you share a little bit about 
the findings for the Mt. Baker-Snoqualmie and the Okanogan-
Wenatchee National Forest in Washington State?
    Mr. Moore. Yes, I sure can. And first of all, thank you for 
the question. And I look forward to coming to Washington State 
again to visit with you and some of your constituents there.
    Based on the condition assessment, 93 percent of the 128 
watersheds on the Mt. Baker-Snoqualmie are functioning 
properly, and this is good news. The remaining seven percent 
are functioning at-risk. When I look at the Okanogan-Wenatchee 
National Forest, in contrast, 41 percent of the 210 watersheds 
are functioning properly and 58 percent are functioning at-
risk, and you have one percent that are impaired in terms of 
how it functions. So that is what the framework assessment is 
telling us about those two forests currently.
    Ms. Schrier. It sounds like we have work to do, 
particularly in the Okanogan-Wenatchee National Forest. Can you 
share your perspective on funding needs for the Watershed 
Restoration Action Plans in the Pacific Northwest, including 
Legacy Roads and Trails? Do we have enough appropriated now? 
What do we need in order to get those numbers much farther up?
    Mr. Moore. Yes, and I may ask for help here, but the total 
function and needs to complete the work specified in that 
Watershed Restoration Action Plans--and these plans are 
associated with 67 priority watersheds in the Pacific Northwest 
region, which is Washington and Oregon. So that total is about 
$55 million, and about $32 million could be funded via the 
Legacy Roads and Trails Program, thanks to you.
    And one other piece that I would add is, since 2011, the 
National Forests in the Pacific Southwest have completed all 
needed restoration work on 37 of those 67 priority watersheds. 
And so while there is still work to be done, there has been a 
lot of work that has already been done and completed. And so 
kudos to the Pacific Northwest region for their focus on 
looking at improving those critical priority watersheds in that 
part of the country.
    Ms. Schrier. Thank you. That is a lot of money that you 
talked about. It sounds like almost \1/5\ of what has been 
appropriated for Legacy Roads and Trails. Do you have any sense 
of the timeline for rolling out those funds so that we can 
continue to make progress?
    Mr. Moore. Chris?
    Mr. French. Yes. Thank you, Congressman. We are about ready 
to announce within a few weeks here over 120 Legacy Roads and 
Trails projects across the country I think in 38 states. And as 
you pointed out, if you look at the costs associated with just 
those in the Pacific Northwest, if you look at the funding that 
we got in bill, which was $200 million over 5 years, the true 
needs across the country far exceed that. And so we are 
prioritizing those most impaired watersheds, including those up 
in the Pacific Northwest in this first set of projects we are 
rolling out.
    Ms. Schrier. Thank you. I appreciate that. And I yield 
back.
    The Chair. Thank you. The chair now recognizes Mrs. Miller 
for 5 minutes.
    Mrs. Miller. Thank you, Chair Spanberger.
    I would like to yield my time to Chairman LaMalfa.
    Mr. LaMalfa. You increased my rank. Thank you, though, 
appreciate that. Chief Moore, thank you again. I wanted to 
follow up a little bit more on the readiness for this fire 
season as we are already in the middle of it. For the last 
couple years, we have had some ups and downs with the VIPR 
program, which is the program that allows the Forest Service to 
contract with private owners of equipment that are helpful in 
fire situations. What is the status of the VIPR program this 
year? What is the feedback you are getting from these equipment 
owners that would like to be helpful with their water trucks 
and their dozers and et cetera? How is that looking this year?
    Mr. Moore. So I am not hearing a lot of problems with VIPR. 
Congressman, as you know, we had attended a meeting with you 
and some of your constituents there a couple of years back.
    Mr. LaMalfa. I appreciate that, yes, sir.
    Mr. Moore. And those same problems existed, but I believe 
we found a workable solution on an emergency use authorization 
to get around the problems that we had, particularly in 
northern California. And so unless you can share with me what 
some particular concerns or issues we have with VIPR, I think 
we have worked through those issues that we had in the past, 
but I am open for an opportunity to improve that if necessary.
    Mr. LaMalfa. Okay. I appreciate that. Well, we will follow 
up on that if we are getting feedback differently than that.
    Mr. Moore. Okay.
    Mr. LaMalfa. You mentioned wilderness areas a minute ago. 
What is the standard for Forest Service on maintaining 
wilderness areas for fire safety, for healthy forests, for the 
number of trees per acre that we talked about earlier as 
healthy and the ability to put out fires in those areas? What 
is the standard or what should the standard be for access to 
those and the maintenance of them so that they are healthy 
forests and fire-safe?
    Mr. Moore. So, as you know, we are not allowed to cut 
timber in wilderness areas. And if I could just focus on 
California since that is where you are, when I look at 
wildfires, all it takes really to use equipment in those areas 
is for that local line officer, a forest supervisor in this 
case, to request from the regional forester the authority and 
the okay to use mechanized equipment----
    Mr. LaMalfa. On wilderness?
    Mr. Moore. On wilderness, yes. And during my time there in 
California, it was a process. And part of it is because right 
outside of wilderness areas we have communities. And if we 
didn't suppress that fire within the wilderness, that community 
was at risk. And so I have always been okay with use of 
mechanized equipment in wilderness for that reason because when 
you look at California itself, it said about 93 percent of 
California is in urban settings. And when you have that number 
of urban settings across a state, it is very dangerous to not 
manage a fire, regardless of where it is at.
    Mr. LaMalfa. Ninety-three percent of----
    Mr. Moore. Urban settings, like in your district, you have 
a lot of communities that are built up. It is not necessarily a 
city, but you have communities that are built. That is an urban 
setting. And when you look at across the state, it is not equal 
all over the state. When you look at the average across the 
state, it is estimated that about 93 percent of California is--
--
    Mr. LaMalfa. That is interesting criteria. So let's take 
the town of Westwood, for example, which was threatened by fire 
last year, and Dixie as well. It has a perimeter. So, when you 
are talking a landscape of 93 percent is considered urban, what 
is the radius away from these towns that you would count as 
part of being urban, I guess? Because, there is--I drive my 
district a lot, and there is a lot of gaps in between that 
isn't urban, even small towns.
    Mr. Moore. As you know, northern California is different 
than central, and it is different than southern. And so we are 
looking at the average. But, in terms of urban communities 
being threatened, it depends on a lot of conditions like wind, 
topography.
    Mr. LaMalfa. No, but what I was asking, though, is for the 
landscape to be considered 93 percent urban interface, right, 
that means a town that is a square mile in the middle of a 
forest that might not have another town for 30 miles, how many 
acres around that town are what you are considering the acreage 
that makes 93 percent? Is it a 1 mile buffer around town that 
you would consider the urban area? I don't follow you.
    Mr. Moore. Yes, I don't have that level of detail, but it 
doesn't have to be a little town, Congressman. It could be a 
little group of homes. It could be just a setting where you 
have a community. We have a lot of resorts also isolated and 
remote areas----
    Mr. LaMalfa. Okay. Well, that is interesting that that much 
would be considered urban. On wilderness areas, then, so you 
feel like you have the access at a simple phone call to send 
equipment out there for fire starts, and it will start 
immediately?
    Mr. Moore. Yes, my experience has been that that usually 
has happened really quick. It has not been an issue in 
California, sir.
    Mr. LaMalfa. You don't have to wait days. Okay. Thank you.
    The Chair. Thank you, Mr. LaMalfa.
    The chair now recognizes Mr. Moore for 5 minutes.
    Mr. Moore of Alabama. Chief Moore, thank you for being 
here. And, as you know, the goal of forest conservation is to 
promote and conserve the rich diversity of natural resources 
found in healthy forests. This goal can be achieved by 
protecting and improving forests, providing technical 
assistance, and facilitating conservation efforts. In my 
district, we have about 4.4 million acres of forest. What 
program is authorized--and I am fairly new to the farm process, 
I am a freshman, so I am just curious what programs were 
authorized in the 2018 Farm Bill that you found to be the most 
utilized and the least utilized?
    Mr. Moore. So the most utilized program in the farm bill is 
going to be the Landscape Restoration Program. An example of 
the effectiveness of this program is that the changes expanded 
eligible applicants beyond the states to include Tribes, 
nonprofits, and institutions of higher learning, and they also 
prioritized investments in rural landscapes. So, it is those 
projects that contribute to healthy, climate-resilient rural 
forests and communities. So in short, it expanded the 
eligibility for people to participate in that. Whereas it used 
to be with just states, now it includes states, Tribes, 
nonprofits, and institutions of higher learning.
    Mr. Moore of Alabama. What was the least used, Chief? What 
did you find to be the least effective program or least 
utilized?
    Mr. Moore. Well, that is hard to say because where one 
program may be least utilized in one part of the country, it 
could be heavily utilized in another part of the country. And 
so that question would be hard for me to answer that unless you 
say, well, what is the least utilized program there in your 
district there, in Alabama, and then I could be more responsive 
to that in terms of what is actually being used there versus 
the one that is most effectively used there.
    Mr. Moore of Alabama. And I guess based on that, we have 
kind of gauge effectiveness based on utilization. And are there 
any programs that are just really popular in the southeastern 
part of the U.S. that you think my constituents would 
appreciate and that we would need to fight for in 2018--or in 
the 2023 Farm Bill I should say?
    Mr. French. Are there sections that were popular in the 
Southeast that we should go forward with?
    Mr. Moore. Well, I think the GNA, the Good Neighbor 
Authority, an agreement that we have talked about, is very 
popular. I think the Shared Stewardship Agreements are another 
one that is very, very popular. And I think what makes them so 
popular is that it gives us the opportunity to bring the 
community into the decision space of not only how we do it, but 
what we do. And that is one of the things that I think with 
some of these new authorities and how it has changed how the 
agency operates from the past, it gives a voice and decision 
space to the community in a much bigger way than perhaps what 
we have had in the past.
    Mr. Moore of Alabama. Thank you. And with that, Madam 
Chair, I will yield back.
    The Chair. Thank you. The chair now recognizes the very 
patient Mr. Costa for 5 minutes.
    Mr. Costa. Thank you very much, Madam Chair, for holding 
this important hearing with the Subcommittee. Obviously, when 
we see, as was noted by our colleague, Congressman LaMalfa, we 
no longer have a fire season but it is a fire year. And we are 
dealing with that throughout the country in the West, 
particularly in California.
    The last time I participated in a Subcommittee hearing was 
in the fall of 2020 toward the end of the Creek Fire. Matter of 
fact, I did a little bit of research here. Of the 20 largest 
fires in California dating back to 1932, 14 of them have been 
in the last 10 years. And climate change and many factors has 
been noted as the cause that we are dealing with.
    When I participated 2 years ago, I asked then-Deputy Chief 
Phipps about what would be needed to do proper forest 
management to catch up. As you said, Chief, we are playing 
catch-up. And he indicated at that time--so almost 3 years 
ago--$2-$3 billion a year for 10 years. Now you have your 
current budget that we have, and then there was the bipartisan 
infrastructure package, I believe, gave another $3.2 billion, 
but you add those numbers up, and they don't come close to $2-
$3 billion a year for the next 10 years.
    As you put your 10 year plan together, how are you 
prioritizing that and also hopefully allowing for additional 
partnership and funding in state and local monies? In 
California, I know we have done a fair amount.
    Mr. Moore. So we have looked at, Congressman, ten 
landscapes across primarily the West, and that covers about 
eight different states. And so if I was to just focus on 
California, we do have landscapes there in California we want 
to focus on. And what is good about California is that the 
state has been really aggressive and progressive in terms of 
treating the landscape conditions there in the state. And so 
the Forest Service there is partnering with them, and they have 
a goal to treat 1 million acres per year between the state----
    Mr. Costa. And then they get to there--I know Mr. LaMalfa 
and I both are at the same point, and that is the funding. Do 
we have the funding to meet those goals between Federal and 
state resources? Because what I have observed here in recent 
years is that we end up augmenting the fire suppression 
funding, and we take some of that from the forest management 
and we are always playing catch-up. And we are never--I mean, 
we have done a poor job, let's acknowledge it, for 20 years in 
managing our forests, and we are paying the price for that, I 
think.
    Mr. Moore. Yes. So if you look at the $5.6 billion or the 
$3 billion that we have for hazardous fuel reduction, it is 
only a shot in the arm in terms of what we actually need to 
make a difference on the landscape.
    Mr. Costa. Well, I think it would be helpful if you would 
provide the Subcommittee here with what you would really need 
to do the job for your 10 year program.
    On the private-sector, I was up visiting part of the Creek 
Fire in the last week or 2 and the devastation that is there. 
Some of the private landowners indicated that they have taken 
advantage of NRCS funding to help do this. You have not 
mentioned that. What is the potential for getting more private 
landowners involved to help do their part?
    Ms. Hall-Rivera. Thank you, Congressman, for that question. 
Yes, we work with our sister agency NRCS. They do provide 
funding for post-fire rehabilitation to private landowners. 
And, there is a pretty substantial budget there for that----
    Mr. Costa. But we could do more of it, right?
    Ms. Hall-Rivera. Yes, we can do more of it, and we are----
    Mr. Costa. We have to figure out how we include that. On 
the use of the wood products of--excuse me, I have a lot of 
questions and a little time. The fact is that it seems to me 
the salvage operations, again, using the Creek Fire because I 
was just there twice in the last 10 days, or trying to make 
progress in getting that salvage timber out, trying to find 
places where log decking or whatever you call it. But, again, 
we are playing catch-up, right, Chief?
    Mr. Moore. Right. We are playing catch-up, Congressman.
    Mr. Costa. And that is just one of the 14 fires in the last 
10 years that you have had to do that forest management just in 
California. That doesn't take in the other eight states. Right?
    Mr. Moore. That is correct.
    Mr. Costa. And, of course, we are losing water. We lost 
over 700,000 acre feet of water in drought conditions.
    Let me close on the permitting process because I think it 
is an important area and I think it is a problem. When the 
Native Americans managed Yosemite floor, the valley floor, they 
seemed to do a better job than we did, going in the springtime 
and live there and then in the fall when the first snow did 
come out and they would set fires. I understand we are trying 
to--we got more trees on the valley floor now than ever, and we 
can't get the permits to properly manage one of the nation's 
great National Parks.
    Mr. Moore. Yes, that is probably a question for the 
National Park Service through----
    Mr. Costa. The permitting impacts you as well for other 
forest areas----
    Mr. Moore. It does, yes.
    Mr. Costa. And is it a problem?
    Mr. Moore. Well, of course it creates unnecessary problems 
for us.
    Mr. Costa. Recommend how we adjust that. And my time has 
expired, but there are a number of areas here that I will 
submit further questions, working with my colleagues not only 
in California but with the good work of this Subcommittee Chair 
and the efforts. And thank you for allowing me to participate.
    The Chair. Thank you, Mr. Costa.
    Having concluded all questions for our first panel, the 
witnesses are now excused. Chief Moore, Mr. French, Ms. Hall-
Rivera, the Committee thanks you for your testimony today. The 
Committee will now take a brief recess for our first panel of 
witnesses to depart and our second panel of witnesses to take 
their seats. We would typically do a full 5 minutes, but given 
that we are coming up on votes, I am going to take a brief 
recess as long as it takes for our second panel to get 
comfortably situated. Thank you so very much.
    [Recess.]
    The Chair. I welcome the second panel of witnesses to the 
Agriculture Committee today. On the second panel, our first 
witness is Ms. Rita Hite, President and CEO of the American 
Forest Foundation. Our second witness is Mr. Douglas Reed, 
President of Green Diamond Resource Company, testifying on 
behalf of the National Alliance of Forest Owners. Our third 
witness is Mr. Christopher Martin, the Connecticut State 
Forester and testifying in his capacity as the President of the 
National Association of State Foresters. Our fourth witness 
today is Ms. Rebecca Humphries, the co-CEO of National Wild 
Turkey Federation. Our fifth witness is Ms. Sally Palmer, the 
Central Appalachian External Affairs Advisor for The Nature 
Conservancy. And our final witness is Mr. Tom Schultz, the Vice 
President of the Idaho Forest Group, testifying in his capacity 
as the President of the Federal Forest Resource Coalition.
    You will each have 5 minutes to deliver your testimony. The 
timer should be visible on your screen and will count down to 
zero, at which point in time your time has expired.
    Mrs. Hite, please begin when you are ready.

        STATEMENT OF RITA N. HITE, PRESIDENT AND CHIEF 
EXECUTIVE OFFICER, AMERICAN FOREST FOUNDATION, WASHINGTON, D.C.

    Mrs. Hite. Good morning. Thank you for the opportunity to 
share the views of the American Forest Foundation and the 
family forest owners we work with across the country every day. 
It is good to be back here, albeit on the other side of the 
dais. I had the privilege of staffing this committee on 
forestry issues a few years ago, so good to see some familiar 
faces. Well, there is more in my testimony----
    The Chair. Mrs. Hite, if I could interrupt you. There is an 
audio issue for those who are joining us virtually. Thank you, 
everyone, for your patience. All right. Mrs. Hite, you may 
proceed.
    Mrs. Hite. Thank you so much.
    The Chair. Sure.
    Mrs. Hite. While there is more in my testimony about the 
improvements we suggest in the farm bill, I would like to focus 
this morning on the significant opportunity we see to unlock 
private-sector support for family forests and the economic and 
environmental benefits that these lands provide.
    First, I just want to hit a little bit around family forest 
owners, who they are and such. Most people when they think 
about forests in this country, they think about the government 
and they think about corporations. Most don't know that the 
majority of the largest chunk of our forests are owned by 
families and individuals. One in four rural Americans own 
forests. And in fact, many of these forests are associated with 
a farm operation. About 75 million acres of our family forests 
are part of a farm operation.
    Forests are critical in our rural economies. Family forests 
supply more than half of the wood supplied for the nation's 
forest products manufacturing in the U.S., and they also 
provide us with clean air, climate mitigation, and a host of 
other benefits as well.
    Family forest owners come from all backgrounds, but they 
all want to care for their land and have an impact on the 
planet. They are people like Kedron Dillard, a third-generation 
African American forest owner who shares ownership with a dozen 
relatives, but is struggling to find a way for the farm to pay 
for itself. There are people like Sutter and Taylor Rogers in 
California, who operate an outdoor summer camp for kids but who 
can't afford to tackle the overgrown fire-prone stands at the 
camp. There are people like the Boutwells in Alabama who manage 
sustainably for timber, and they look for voluntary options and 
markets to keep their forests economically viable.
    Family forest owners want to care for their land but need 
technical and financial help to do that. And we are not just 
talking about these four landowners. There are 21 million 
people in America that own forests. Consider this: Eighty-five 
percent of forest owners are not working with a forester and 
don't have a management plan and thus are not maximizing the 
full potential of their forests. To be clear, the farm bill has 
helped. This Committee has done a great job in the last few 
farm bills of really opening opportunities in those 
conservation programs for forest owners.
    But still, we are just scratching the surface. These lands 
are not yet living up to their full potential, and we are 
seeing big challenges on the horizon from climate change to 
wildfires. We have talked about that already this morning. 
These are challenges that require active forest stewardship, 
and they are challenges that require technical and financial 
help for family landowners, and they are challenges where 
family forest owners can be a big part of the solution.
    While increased conservation program dollars are critical 
and improvements in those programs are critical, there is an 
opportunity to leverage the rapidly growing market, voluntary 
carbon market, which we estimate to be worth about $90 billion 
in the coming decades, to actually support the same kind of 
forest stewardship we are doing with those conservation 
programs and help those programs be leveraged further. To be 
clear, the government's role in carbon markets should be 
minimal. The private-sector is driving this. AFF is working 
alongside The Nature Conservancy on a program called the Family 
Forest Carbon Program to help unlock these markets for family 
landowners.
    What the farm bill can do and what USDA can do is the same 
role that USDA has played for a lot of other agricultural 
markets, catalyze these markets, open up these opportunities 
for forest owners so we can bring these resources to rural 
communities, very similar to the SUSTAINS Act (H.R. 2606) that 
that Congressman Thompson has introduced.
    We see a significant opportunity for rural America to 
benefit from these markets in ways that leverage and support 
those farm bill programs. The private-sector is eager to invest 
in these opportunities, but because they are new, and because 
they require up-front investment, we need tools like what is 
suggested in the Rural Forest Markets Act of 2021 (H.R. 3790) 
that a number of the Committee Members here have cosponsored. 
If we can't overcome these financing hurdles, this market 
opportunity will pass rural America, and we will see 
investments in other technologies, and America's rural family 
landowners will not benefit.
    So, Madam Chair, Ranking Member, I appreciate the time. I 
see a lot of opportunity to help the farm bill's forestry 
investments go further by leveraging these market 
opportunities, as well as improvements in the program.
    [The prepared statement of Mrs. Hite follows:]

   Prepared Statement of Rita N. Hite, President and Chief Executive 
         Officer, American Forest Foundation, Washington, D.C.
    [Chair] Spanberger, Ranking Member LaMalfa, and Members of the 
Subcommittee thank you for this opportunity to testify on behalf of the 
American Forest Foundation and the 21 million family forest owners of 
the United States that AFF works with.
    The American Forest Foundation is a national conservation 
organization focused on delivering meaningful conservation impact 
through the support and empowerment of America's family forest owners. 
With over 80 years of experience working with family forest owners in 
conservation, AFF has an in-depth understanding of the motivations, 
desires and challenges of families and private individuals that own 
wooded land in America. I personally have known first-hand the sweat 
and tears it takes to tend to the land. Before my 2 decades in the 
forest conservation space, I grew up on a beef cattle farm in upstate 
New York and know the joy and pride that comes from tending the land 
and seeing the ripple effect in our communities and the larger 
ecosystem.
    I'm also here today as a leader in the Forests in the Farm Bill 
Coalition, a 100 plus participant Coalition that has worked together 
since the 2002 Farm Bill to offer and advocate a forest sector view of 
forest-related priorities for the farm bill. AFF has co-chaired this 
Coalition alongside our partners at The Nature Conservancy, the 
National Wild Turkey Federation, and the National Association of State 
Foresters, here alongside me today, for decades. This Coalition's work 
has just begun in advance of the next farm bill, and we look forward to 
sharing further views of this Coalition with the Committee in the 
future.
    As the Committee considers the reauthorization of the farm bill in 
2023, I urge you to consider how this critical piece of legislation can 
do more to support the stewardship and conservation of private 
forestlands, particularly those owned by family forest owners. This is 
critical because of the role these lands play in our rural economies, 
our social fabric, and our environment, and because of the immense 
challenges facing these lands and people, including climate change and 
wildfire.
    We see a significant opportunity in this next farm bill to further 
unlock public-private partnerships, including new markets such as 
carbon markets, that can help increase the pace and scale of 
conservation and stewardship on these lands while also addressing many 
of the challenges we're facing as a nation.
Why Are Family-owned Forests So Critical?
    All forests, including family-owned forests, provide Americans with 
important public benefits. They provide critical habitat for wildlife 
and fish, they help clean our water and air, and they provide a 
critical source of wood fiber for products and economic vitality for 
rural citizens and communities. With respect to clean air, these lands 
already capture and store roughly fifteen percent of our annual U.S. 
greenhouse gas emissions. These lands have even more potential to 
address two intertwined challenges we face as a nation that I want to 
speak to today: the wildfire crisis and climate change.
    Families and individuals own the largest portion--39 percent--of 
all forests in the United States, more than the Federal, state, and 
local governments or corporations. As the largest portion of our 
forests, family forests can have a globally significant impact on 
climate change, through improved forest management, reforestation, 
avoiding emissions from catastrophic wildfires, and supplying the raw 
materials for climate beneficial forest products. In doing these 
actions, forest owners can also benefit their land goals and increase 
forest health and productivity.
    At the same time, more than \1/3\ of the high wildfire risk lands 
in the western U.S., where we have a severe wildfire crisis, are 
private, family-owned lands. These families can have a significant and 
essential impact in fostering wildfire resilience in our western 
landscapes.
    Family forest owners own their land for a variety of reasons, but 
one thing they all have in common is that they care about their land. 
Landowners want their forests to be healthy, want their lands to 
support wildlife, and want to pass the land in better shape on to their 
children.
    Bottom line, these landowners want healthy and productive forests 
that continue to provide these public benefits and do more to address 
growing issues like climate change and wildfire, and the resulting 
wildlife and other impacts, but they face significant barriers.
    As a result, few are taking active steps to care for their forest 
leaving untapped potential in these lands for climate mitigation, 
wildfire resilience, and many other public benefits.
    What are some of these barriers? First is a lack of forestry 
expertise and connection to technical assistance. In fact, only one in 
five landowners have received formal forest management advice. Many 
farm bill programs--such as the U.S. Forest Service's Forest 
Stewardship Program--are hobbled by flat budgets that result in only 
the capacity for pennies-on-the-acre investments, leaving a significant 
gap in the resources available for land management planning and 
technical assistance among family forest owners.
    The second biggest barrier to landowners taking further action to 
steward their land is cost. Most family forest owners are not 
generating a regular annual income from their land, as a typical farmer 
does. In fact, the average family forest owner has an income of less 
than $50,000, and may only generate income from their land, once a 
generation, if at all. So while landowners want to do the right thing, 
conservation and stewardship actions take money that these landowners 
often don't have.
    Minority and other underserved landowners--whose ownerships are 
often on the frontlines in climate-impacted communities--face even 
greater barriers to forest stewardship. Challenges around heirs' 
property, mistrust of government institutions due to decades of 
discrimination, and a lack of sufficient professional forestry support 
prevent access to farm bill programs such as the Environmental Quality 
and Incentive Program (EQIP), the Conservation Stewardship Program 
(CSP), and Conservation Reserve Program (CRP).
    These barriers are not insurmountable. With the right tools and 
support, we can empower forest owners to unlock the potential in their 
forests to support our environment and our economy--all while giving 
family forest owners the opportunity to achieve their own land 
management goals.
Previous Farm Bill Progress
    Through the last four farm bills, this Committee has made 
significant progress opening conservation program opportunities for 
family forest owners, right alongside traditional farmers, paving the 
way for technical and financial support for family forest owners. For 
this, we, and the nation's family forest owners are incredibly 
grateful.
    We estimate today that family forest owners are accessing roughly 
$100 million in conservation support from the various EQIP, CSP, CRP, 
and U.S. Forest Service programs. While this is important progress--
that's less than pennies on the acre if it were split across all family 
forests today, an investment that does not at all reflect the thousands 
of dollars per acre of value the public is benefiting from these lands, 
nor does it reflect the level of investment needed to unlock the power 
of these lands to mitigate climate change, address the wildfire crisis, 
and improve the other economic and environmental benefits from these 
lands.
    We know that while increased investment and improvements in 
programs like EQIP, CSP, CRP and various Forest Service is critical and 
we urge this Committee to aim for that, we also know that we should not 
rely solely on government funding to invest in forest stewardship and 
conservation.
    What we also know is that increasingly, society is placing real 
value on the public benefits our forests can provide in additional to 
traditional timber value--from the clean water, climate mitigation, and 
wildfire mitigation values these lands can provide. This value is being 
unlocked through new markets, such as voluntary carbon markets, that 
allow corporations to pay landowners for additional carbon benefits 
that offset their corporate emissions.
    We see a significant opportunity for this Committee to make 
improvements in this next farm bill that will leverage these market 
opportunities with government investments, helping the government 
dollars go further while also bringing these significant financing 
opportunities to rural America.
Leveraging Carbon Markets with USDA Programs for Conservation Finance 
        on Family Forests
    The voluntary carbon market is growing exponentially. In fact, 
market trends suggest this market will be valued between $90-$480 
billion by 2050. This is driven by corporations who are recognizing the 
risks of climate change in their business strategies and investing in 
and committing to significant emissions reductions goals to mitigate 
these risks. While corporations can, and many are, focused on what they 
can do within their own ``fence line,'' for many, it will not be 
possible to achieve their emissions reduction goals without purchasing 
carbon credits to offset a portion of their emissions.
    Today the demand for quality carbon credits far outpaces the supply 
of available credits, creating a prime opportunity for agriculture and 
forestry to meet this demand, as our lands are one of the most 
important strategies for carbon capture and storage.
    At the same time, many of the actions we can take in our woods and 
lands to capture and store carbon to produce quality carbon credits, 
are also incredibly valuable for improving forest health and 
productivity--the goals of family forest owners.
    For example, in the Central Appalachian region--Pennsylvania, 
western Maryland, and West Virginia, one of the key forest actions 
landowners can take to capture and store more carbon is to avoid high-
grading. In this region, high-grading, the practice of removing the 
best trees and leaving behind the poor quality trees, is a common 
practice on family lands for a variety of reasons, often related to 
lack of technical assistance and financial pressures. If we can help 
landowners change this practice, we can help them create a healthier 
and more productive forest, produce higher quality wood products, and 
produce additional carbon on the landscape in the form of quality 
carbon credits that can be sold in the voluntary carbon market.
    This is a win for the landowner, the forest, the forest products 
industry, and the climate.
    This is happening today in the private-sector: through a 
partnership with The Nature Conservancy, AFF has developed the Family 
Forest Carbon Program (FFCP). The Family Forest Carbon Program is a 
unique and credible solution to carbon markets for forest owners with 
small forest holdings, which represent the bulk of family lands in the 
U.S., who have largely been left out of carbon market opportunities to 
date due to costs and technical barriers.
    The program works by paying family forest landowners to implement 
carbon-positive forest management practices such as avoiding high-
grading, that result in increased carbon sequestration and storage, as 
well as improved wildlife habitat and forest resiliency, helping family 
landowners achieve their land goals. The program provides forester 
assistance, forest management planning, and ongoing technical support 
for family landowners as well.
    The program then sells the carbon generated by landowners to 
corporate entities interested in reducing their overall carbon 
emissions, triggering private investment in rural America that would 
not have otherwise been invested.
    The program's carbon credits are produced using a new, innovative 
carbon accounting method that is pending final approval by Verra, one 
of the world's recognized third-party verifiers of carbon and other 
ecosystem credits.
    To date, in the Central Appalachians, we have 173 landowners signed 
up for the program, another 2,557 that have expressed interested, and 
we've generated $49.1 million that support forestry and landowner 
goals. We have just begun to sign up landowners in the Northeast and 
have plans for expansion to the Midwest and South this year.
    So if this is happening in the private-sector, why is there a need 
for the next farm bill to help further unlock these markets?
    There is no doubt that the private-sector can drive this work, and 
in fact, the government's role in these markets should be minimal. 
However, given the potential for these carbon markets to bring 
significant finance to rural communities and rural landowners for the 
very same goals that the farm bill's conservation programs are 
supporting, there is a critical role USDA can and should play alongside 
these private markets.
    In our experience working in these voluntary markets, USDA can play 
a catalytic role, very similar to the role USDA plays for other 
agriculture markets for farmers and forest owners, helping to bring 
low-cost financing, technical and scientific support, and market 
transparency for landowners. Without this catalytic role, the nation's 
family forest owners will not benefit from these markets at the scale 
that's possible, leaving our rural forest owners and rural America out 
of significant revenue opportunities.
    In particular, one of the key roles USDA can play is in the area of 
low-cost financing. For landowners to participate in voluntary carbon 
markets and produce credible carbon credits, there is a significant up-
front cost to implement the practice, that is not paid back until the 
additional carbon is generated which can take as much as 20 years. AFF 
is innovating in this space, developing ways for private finance to 
step in through the bond market or low-cost loans. However, even with 
this private finance, given this is a new market, investors need to 
have certainty in their investment, with a guarantee backing their 
investment. This is not unlike any other emergent agriculture market.
    USDA and the next farm bill can help fill this finance gap in a 
number of ways:

   by leveraging its own conservation program funds to provide 
        some of this capital which provides significant leverage for 
        conservation programs;

   providing low interest loans or loan or bond guarantees, 
        such as those that would be authorized in the bipartisan Rural 
        Forest Markets Act;

    There are other ways USDA can help with financing too, such as 
serving as a buyer of last resort for credits, providing a low-cost 
insurance product, and even direct co-investing in credits.
    In addition to financing, USDA and the next farm bill can also help 
further unlock this market opportunity for America's rural landowners 
by:

   Investing in the forest carbon practice science, data and 
        inventory solutions, and program develop through grants and 
        other funding support that can bring innovation, efficiency, 
        continuity and credibility, and continuous improvement to 
        climate-smart forestry action.

   Supporting landowner engagement and technical assistance 
        including a focus on ensuring support for historically 
        underserved forest owners.

    Again, there is significant progress happening in the private-
sector in these markets, and USDA's role can be catalytic to ensure 
that America's landowners can benefit from these markets.
    Additionally, it's important to note that we believe carbon markets 
can and should work alongside traditional forest products markets. 
Strong markets for forest products, that promote use of carbon 
beneficial forest products, are critical for family forest conservation 
and climate impact as well. We encourage USDA to continue and expand 
investment in the science, data, and support for these markets as well.
    Like managing for wildfire resilience, implementing practices to 
maximize climate mitigation require significant up-front investments. 
Often it is the cost of implementing management practices to improve 
forest health and planting new trees that hinder forest owners from 
reaching their management goals. Families and individuals are willing 
to invest their time and energy but need incentives to align with their 
goals, incentives that value the real work and environmental benefits 
forest owners contribute to our society.
Tackling Wildfire Risk with Family and Private Forest Owners
    In addition to helping unlock carbon markets for rural landowners, 
the next farm bill presents an opportunity to address another 
significant issue we're facing as a nation: the wildfire crisis in the 
West.
    After almost a decade of unstoppable wildfires, gone is the time 
for modest wildfire protection measures and a sole focus on defensible 
space around structures and along roads. In line with the vision and 
strategy of Chief Moore and the Forest Service, AFF believes we must 
make a paradigm shift to address the health of our forests holistically 
and restore natural resiliency to wildfire across all forests in a 
landscape.
    The Agency's Wildfire Crisis Strategy and Implementation Plan 
identified up to 50 million acres of work outside of National Forest 
System boundaries needed to make a significant impact in critical 
firesheds, because wildfires don't recognize boundary lines. This goal 
is unattainable without cross-boundary partnerships that signify shared 
ownership in the problem and the solution. Cross-boundary partnerships 
that will be critical to the success of implementing the strategy and 
implementation plan include public-private partnerships as well as 
internal partnerships between the Forest Service and NRCS, creating 
opportunities to leverage resources across sectors and levels of 
government.
    For example, in the Northern Sierra's in California, a state were 
fifty-one percent of the of high fire risk lands in the state are 
private, family lands, the State of California through CAL FIRE, the 
forestry agency, AFF and many other private-sector partners, and the 
U.S. Forest Service are partnering to work across all ownership 
boundaries to treat lands at a scale that is unprecedented. Even with 
these critical partnerships, we have less than half of the available 
funding to treat the needed lands on private lands. A significant 
barrier to this work is match requirements for work on non-Federal 
lands. When treatments on private lands cost upwards of $2,000 an acre, 
family landowners are not able to bring the level of match needed to 
accomplish the work.
    Many forest owners want to do the work and are doing the work, but 
not at the scale needed to get ahead of the wildfire crisis, due to 
their own financial limitations.
    The Healthy Forest Restoration Act of 2003, as amended in the 2018 
Farm Bill, supports cross-boundary work to reduce hazardous fuels by 
allowing a portion of the U.S. Forest Service hazardous fuels funding 
to be used by states, private landowners, and non-governmental 
organizations for work on cross-boundary projects on non-Federal lands, 
prioritizing high risk areas. While this was a significant leap forward 
to improve the resilience of forest and rangeland ecosystems, the 
resources provided to private forest land, particularly family forest 
owners, have been minimal and insufficient to date.
    The Infrastructure bill provided significant new funding for 
wildfire mitigation. However, the investment is only a down payment on 
the $50-$60 billion needed over the next 10 years to mitigate our 
wildfire crisis. What is needed is an intentional focus on critical 
landscapes inclusive of cross-boundary ownership by increasing funding 
that is specifically directed to private lands within and around 
firesheds, while encouraging public-private partnerships to leverage 
funds and capacity to expand the Forest Service's reach into impacted 
communities.
    Cost-share programs like Environmental Quality and Incentive 
Program (EQIP) have the greatest potential to relieve the financial 
burden landowners experience with managing for wildfire mitigation and 
other conservation outcomes. However, these programs do not have enough 
funding to meet current contract demands and often present 
administrative hurdles for landowners to access. Streamlining processes 
across states to ensure consistency and transparency in the selection 
process, and increased funding for both cost-sharing and forestry 
technical assistance would improve program delivery significantly.
    In addition to working cross-boundary to mitigate wildfire risk, 
with the growing wildfire crisis, family forest owners are seeing their 
forests, their livelihood and legacy, destroyed by these catastrophic 
wildfires, with little support to get back on their feet after the 
wildfires.
    Forest owners are not eligible for crop insurance and the available 
disaster programs, including the Emergency Forest Restoration Program, 
are in need of significant reform. The farm bill provides an 
opportunity to improve disaster recovery programs to better support 
family forest owners that are increasingly facing billions in damages 
and lost value from natural disasters such as wildfires and hurricanes. 
Without this support, landowners are left with little path to get back 
on their feet and these forests can then become a liability for local 
water quality and public health.
2023 Farm Bill Policy Solutions
    While the 2018 Farm Bill included important improvements and 
critical investments to support family forest conservation, we 
recommend the following improvements be considered in the 2023 Farm 
Bill and we look forward to working with the Committee to develop these 
concepts.

  (1)  Creative solutions to leverage and unlock private-sector markets 
            including carbon markets, with support for:

       low interest loans or loan or bond guarantees, such as 
            those that would be 
              authorized in the bipartisan Rural Forest Markets Act;

       leveraging USDA conservation program funds to provide 
            investment along-
              side private market investment, with improvements in the 
            Regional Con-
              servation Partnership Program's Alternative Funding 
            Arrangements;

       forest carbon practice science, data and inventory 
            solutions, and program 
              develop through grants and other funding support that can 
            bring innova-
              tion, efficiency, continuity and credibility, and 
            continuous improvement to 
              these private-sector markets;

       science, data, and technical development of forest 
            products markets;

       landowner engagement and technical assistance including 
            a focus on ensur-
              ing support for historically underserved forest owners.

  (2)  Strengthen Wildfire Mitigation and Disaster Recovery on Family 
            Forests with support for:

       Increased financial and forestry technical assistance 
            for wildfire mitigation 
              and disaster recovery through programs such as EQIP;

       Strengthening funding provisions in the Infrastructure 
            bill that allow for 
              increased cross-boundary action, including match waivers 
            where appro-
              priate;

       Improvements in programs such as the Emergency Forest 
            Restoration Pro-
              gram and other disaster programs aimed at forest owners.

  (3)  Continued investment and improvements in USDA conservation 
            programs including:

       Increase funding for the Landscape Restoration Program 
            and encourage 
              public-private partnerships, with consideration for 
            underserved commu-
              nities;

       Reauthorize RCPP with a more streamlined administrative 
            process to be 
              more aligned with other Title II programs[;]

       Reauthorize restoration programs such as Conservation 
            Stewardship Pro-
              gram and Conservation Reserve Program[.]

    In conclusion, we truly appreciate this Committee's work on 
forestry and see the 2023 Farm Bill as an opportunity to build on this 
important work and leverage significant private-sector markets and 
funding in the process. Thank you for the opportunity to share our 
views and we stand ready to assist as AFF and the Forests in the Farm 
Bill Coalition, as the Committee's work continues.

    The Chair. Thank you for being absolutely right on time 
with your testimony.
    Votes have been called, so we are going to recess while 
Members of the Committee--there is official language. There 
have been two votes called on the House Floor. The Committee 
will take a brief recess, and we will reconvene shortly. We 
appreciate your patience. Thank you.
    [Recess.]
    The Chair. We will now resume the Subcommittee hearing. Mr. 
Reed, please begin when you are ready. You have 5 minutes.

          STATEMENT OF DOUGLAS REED, PRESIDENT, GREEN 
           DIAMOND RESOURCE COMPANY; CHAIR, BOARD OF 
        DIRECTORS, NATIONAL ALLIANCE OF FOREST OWNERS, 
                          SEATTLE, WA

    Mr. Reed. Thank you, Chair Spanberger, Ranking Member 
LaMalfa, distinguished Members of the Committee. I appreciate 
the opportunity to testify today. My name is Douglas Reed. I am 
the President of Green Diamond Resource Company, a fifth-
generation, family-owned forestry company, started by my great-
great-grandfather in 1890. Today, our company owns and operates 
working forests in the West and South. Green Diamond's long-
term commitment to forest stewardship is at the heart of our 
business.
    I am here today in my role as Chairman of the board of 
NAFO, the National Alliance of Forest Owners. NAFO represents 
privately owned working forests like ours. These forests 
provide clean air and water, wildlife habitat, and jobs. Of 
course, they also provide a steady, sustainable supply of 
products for building homes and schools and thousands of other 
everyday items. Our businesses also support 2.5 million 
American jobs, mainly in rural communities.
    Working forests are also a critical natural climate 
solution. Yet there is room to do more, and we have laid a path 
to get there as a sector. Recently, I joined 42 of my fellow 
forestry CEOs and our counterparts at the Environmental Defense 
Fund and The Nature Conservancy to adopt a climate roadmap for 
private working forests. We are carrying these ideas to farm 
bill stakeholder groups.
    Working forests sequester and store carbon. At just under 
half the nation's forest land base, private working forests 
provide 90 percent of domestic timber harvests, 80 percent of 
our nation's annual net carbon sequestration, and nearly half 
of our long-term forest carbon storage. To put this in context, 
privately owned working forests alone sequester more carbon 
than is emitted annually by 100 million passenger vehicles.
    Sustainably sourced forest products are also a climate 
solution. Half the dry weight of wood is carbon taken out of 
the air. When we substitute wood for other carbon-intensive 
building materials, we can reduce the carbon footprint of our 
buildings.
    The farm bill can help us reach a greener, more resilient 
future. We are interested in three workstreams: First, the 
Forest Inventory and Analysis Program; second, programs to 
support building with wood; and third, addressing the wildfire 
crisis.
    First, FIA: USDA's Forest Inventory and Analysis Program 
provides vital information on our nation's forest resources. At 
Green Diamond, we have developed carbon offset projects, and we 
have efforts underway in four states. Key to this type of work 
is reliable data to ensure that these projects are rooted in 
facts and science. As interest in forests as a climate solution 
grows, more and more stakeholders rely on FIA data to make 
decisions, sometimes in new ways. Despite attention in the 2018 
Farm Bill and increases in funding since then, the program 
needs additional support to meet all these growing uses. I 
recommend Congress direct the Forest Service to establish a 
national 5 year measurement cycle, standardized protocols for 
data collection and analysis, and ensure FIA has the strategic 
direction it needs to grow and adapt. These changes should be 
additive to the good work FIA is already doing.
    Second, building with wood. Wood is climate friendly, safe, 
durable, and can be grown locally, which supports American 
jobs. With new technology, we can use wood in new ways. I would 
like to thank you for the successful Timber Innovation Act in 
the 2018 Farm Bill. There are now over 1,300 mass timber 
buildings in the U.S., a big jump from 2018. Yet we still lag 
far behind Europe on the use of mass timber, despite our 
abundant sustainably managed forests. The 2023 Farm Bill should 
build on the Timber Innovation Act. NAFO, together with 
partners such as the American Wood Council, looks forward to 
working with you on this effort.
    Third, severe wildfire: Almost exactly a year ago the 
Bootleg Fire started on Federal ground and devastated 413,000 
acres in southern Oregon, including 110,000 acres of Green 
Diamond property. Chief Moore's testimony this morning is right 
that more fires start on private lands where people live and 
work. But while just 20 to 30 percent of fires begin on Federal 
lands, 70 to 80 percent of acres burn on our Federal land. What 
we know is that all stakeholders need to work together, and 
that active forest management is a proven tool to improve 
forest health and resilience. Yet, worsening fire seasons are 
making stewardship objectives harder to achieve. Congress 
should encourage the Forest Service to use all available 
resources to fight fires as vigorously as possible. The Forest 
Service and private forest owners in the West are partnering to 
fight fire across land ownership. This innovative partnership 
will give field officers and incident commanders more tools, 
more local knowledge and experience to keep fires manageable 
and less dangerous. We would like to thank Chief Moore for his 
leadership on these issues.
    And thank you again for having this hearing and allowing us 
to participate. We stand ready to provide any resources the 
Committee would like.
    [The prepared statement of Mr. Reed follows:]

 Prepared Statement of Douglas Reed, President, Green Diamond Resource 
Company; Chair, Board of Directors, National Alliance of Forest Owners, 
                              Seattle, WA
    [Chair] Spanberger, Ranking Member LaMalfa, and distinguished 
Members of the House Agriculture Committee, on behalf of Green Diamond 
Resource Company and the National Alliance of Forest Owners (NAFO), 
thank you for the opportunity to testify on the impacts of the 2018 
Farm Bill on private working forests.
Introduction
    My name is Douglas Reed, and I am President of Green Diamond 
Resource Company, a forest products company started by my great-great-
grandfather outside Shelton, Washington, in 1890. Today, our company 
owns working forests in Washington, Oregon, Montana, and California. A 
subsidiary, Green Diamond Management Company, provides forest 
management services in the U.S. South and West. Like many U.S. forestry 
companies, Green Diamond's forests are third-party audited and 
certified by sustainable forest management certification systems.
    Green Diamond's long-term commitment to forest stewardship is at 
the heart of how we run the company. Our forest management is guided by 
experience and backed by science. Through a continuous cycle of growth, 
harvest and regrowth, we can ensure that our forests, and therefore our 
business, will continue to thrive for another 130 years. Our forests 
provide environmental, social, and economic benefits for the 
communities where we operate today, and our mission is to ensure that 
remains true for many generations to come. This commitment is reflected 
in our day-to-day forest management and in the many innovative, 
voluntary forest and wildlife conservation programs implemented across 
our timberlands.
    More than \1/3\ of the United States is covered by forests, and 47% 
of U.S. forests are privately owned working forests--forests owned by 
families, businesses, and investors. Private working forests provide 
clean air and water, wildlife habitat, and jobs through market demand 
for forest products. These forests are sustainably managed to supply a 
steady, renewable supply of wood for lumber, plywood, energy, paper, 
and packaging, providing more than 5,000 items that consumers use every 
day. U.S. private working forests support 2.5 million American jobs,\1\ 
mainly in rural communities.
---------------------------------------------------------------------------
    \1\ https://nafoalliance.org/wp-content/uploads/2018/11/
Forest2Market_Economic_Impact_
of_Privately-Owned_Forests_April2019.pdf.
---------------------------------------------------------------------------
    Today, I'd like to focus on the impact of the 2018 Farm Bill on 
working forests and our contributions to the U.S. economy, environment, 
and climate mitigation.
Importance of Private Working Forests & Wood Products to the Climate
    Working forests are a critical natural climate solution due to 
their natural ability to sequester and store carbon. Maximizing the 
climate mitigation benefits from private working forests involves three 
key elements: (1) Strong forest products markets to maintain and 
increase private working forests on the landscape and continue 
investment in their health, resilience and productivity; (2) Improved 
tools and market-based approaches to expand forest carbon sequestration 
and storage; and (3) Advancements in the use of long-lived wood 
products and the underlying analysis needed to compare these products 
with more carbon intensive alternatives. Together, sustainably managed 
working forests and the forest products they produce are already one of 
our nation's greatest assets for achieving our climate goals: U.S. 
forests and forest products offset 15% of the nation's annual 
industrial carbon emissions.
    At just under half of the nation's forest land base, private 
working forests tell a remarkable carbon story: they provide 90% of 
domestic timber harvests, while also providing 80% of our nation's 
annual net carbon sequestration \2\ and nearly 50% of our long-term 
carbon storage. To put this in context, working forests annually 
sequester more carbon than is emitted by all U.S. passenger vehicles 
each year.\3\ In addition, durable wood products--like homes, 
buildings, and furniture--store significant amounts of carbon long-
term. As a natural material, forest products are recyclable, 
biodegradable, and renewable. When used to displace more fossil fuel 
intensive materials, forest products can play a critical role in 
reducing net atmospheric carbon over time. Healthy markets for forest 
products, and the continuous cycle of growth, harvest, and regrowth, 
enable private forest owners to maximize the climate mitigation power 
of their forests, wood products, and the carbon benefits they provide.
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    \2\ https://nafoalliance.org/wp-content/uploads/2022/07/NCASI-2022-
C-Data-Memo-to-NAFO-with-Tables.pdf.
    \3\ https://www.forestcarbondataviz.org/.
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    Sustainably managed private working forests are more than capable 
of meeting additional demand for wood. Each year we harvest about 2% of 
our working forest land base, while also replanting or regenerating an 
equal acreage. Replanting and natural regeneration after harvest 
quickly restarts the growth process and reestablishes the sequestration 
and storage capacity on the land. According to the USDA,\4\ from 1953 
to 2011, in a time of expanding population and increasing demand for 
homes, paper products, and energy, the total volume of trees grown in 
the U.S. increased by 60%.\5\ Today, private forest owners are growing 
43% more wood than they harvest.\6\
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    \4\ https://www.fs.fed.us/research/publications/gtr/gtr_wo87.pdf.
    \5\ https://www.fs.usda.gov/treesearch/pubs/57903.
    \6\ https://nafoalliance.org/wp-content/uploads/2019/07/
Forest2Market_Inventory_and_Har
vest_Trends_05-24-2019.pdf.
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    There are also other important environmental benefits provided by 
private working forests. Water supplies for many urban and rural 
communities around the country originate in and pass through forested 
watersheds, where forests act as a natural filtration system for nearly 
30% of the water we drink.\7\ Private working forests also play an 
important role in keeping abundant species abundant, while also 
conserving at-risk and declining species. Access to these forests is 
vital to wildlife conservation, as 60% of our nation's at-risk species 
rely on private forestland for survival.\8\ Collaborative conservation 
efforts such as NAFO's Wildlife Conservation Initiative \9\ can benefit 
species while keeping private working forests working.
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    \7\ https://www.fs.fed.us/managing-land/private-land.
    \8\ https://nafoalliance.org/wp-content/uploads/Wildlife/The-
geography-of-private-forests-that-Support-At-Risk-Species.pdf.
    \9\ https://nafoalliance.org/issues/wildlife/.
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    I am proud that private working forest owners like Green Diamond 
are leading the way in pursuing natural climate solutions. Recently, I 
joined the leaders of 42 other leading U.S. forest-owning companies, 
NAFO, The Nature Conservancy, the Environmental Defense Fund, American 
Forests, and the American Forest Foundation to adopt a unique set of 
Principles on Private Working Forests as a Natural Climate 
Solution.\10\ These ``CEO Principles'' express our common vision for 
increasing the climate mitigation of sustainably managed private 
working forests and sustainably produced solid wood products through 
market and incentive-based approaches.
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    \10\ https://nafoalliance.org/ceo-principles/.
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    Through NAFO, private working forest owners can speak with one 
voice to policymakers, and we are actively engaged in the farm bill, 
bringing nearly 50 member companies and over 46 million acres of 
sustainably managed working forests--an area larger than my home state 
of Washington--to the table. NAFO is a part of the Forests in the Farm 
Bill Coalition, an important group led by several of the organizations 
here with us today. NAFO is an active member of the Forest-Climate 
Working Group, which provides a unified voice within the forestry 
community for advancing forest climate policy. NAFO is also a founding 
member of the Food and Agriculture Climate Alliance, which works across 
the working lands community to advance broader climate mitigation 
solutions.
Climate and Carbon Data in the Farm Bill
    The USDA's Forest Inventory and Analysis (FIA) program, a central 
component of the Forest Service's research program, provides vital 
information on our nation's forest resources. FIA's forest data and 
analysis is national in scope and consistently measured across 
ownerships every year, providing a common source of reliable 
information for an increasing number of stakeholders. Private forest 
owners rely on and reference FIA data and analyses to make decisions, 
and as interest in forests and forest carbon grows, so too does our 
need for information from FIA. At Green Diamond, we have actively 
pursued carbon sequestration opportunities, and we have projects 
approved or in progress in four states: Alabama, California, Oregon, 
and most recently Montana. Key to fostering this type of work is 
reliable data to ensure that what we project will happen actually comes 
to pass.
    FIA serves as the authoritative data source for our nation's 
forests and forest carbon measuring, monitoring, reporting and 
verification. Yet, there are inconsistencies in data measurement cycles 
across geographies, and new remote sensing technology remains hard to 
integrate with FIA's existing approaches. Despite attention in the 2018 
Farm Bill and increases in funding since then, the current design and 
capabilities of the program are unable to meet growing needs. Simply 
put, the world has changed since 2018. Demand for forest carbon data 
has skyrocketed as the power of forests to address climate change has 
attracted attention and investors. Increased adoption of remote sensing 
in private data collection has increased demand for the same from FIA. 
Finally, we are seeing disturbances like wildfire and hurricanes at a 
rate not seen before, meaning that the 7 to 10 year remeasurement 
cycles used by FIA are not keeping up with the rapid changes our 
forests are experiencing.
    In particular, I recommend Congress direct the USDA and the Forest 
Service to:

   Establish a national 5 year measurement cycle (including the 
        Intermountain West and Alaska) for base grid data collection 
        and analysis with nationally consistent field protocols for 
        measurement and analysis. This will lead to improved data 
        uniformity and greater certainty in carbon estimation, allowing 
        for more accurate analysis of the resource and carbon impacts 
        of management decisions.

   Standardize protocols for national data collection and 
        analysis and for measurement variables, and standardize 
        previously reported data to include estimates from the 
        Intermountain West and Alaska. This will lead to more credible 
        and consistent information.

    I encourage Congress to provide additional direction and resources 
to ensure the FIA program has the strategic direction needed to provide 
updated, accurate, and reliable information on the status and trends of 
our forested resources. These changes should be additive, not taking 
away from the good work FIA is already doing. Green Diamond and NAFO 
stand ready to offer insight and recommendations into how to bolster 
this important program.
Sustainable Wood Construction in the Farm Bill
    Half the dry weight of wood is stored atmospheric carbon. When 
sourced from sustainably managed forests, long-lived wood products act 
as carbon vaults, storing carbon and keeping it out of the atmosphere 
for the full lifecycle of the product. Wood products in the U.S. 
currently store nearly 9.8 billion metric tons of \11\ CO2e, 
which is more than twice the amount of carbon stored in all National 
Parks combined.\12\
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    \11\ https://www.epa.gov/sites/default/files/2020-04/documents/us-
ghg-inventory-2020-main-text.pdf.
    \12\ https://www.fs.usda.gov/treesearch/pubs/57699.
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    The 2018 Farm Bill recognized the importance of sustainable wood 
construction, and I recommend this continue into the 2023 Farm Bill. 
Specifically, the Timber Innovation Act leveraged various farm bill 
programs to advance sustainable wood construction, and it has made a 
significant impact. There are now over 1,300 mass timber buildings 
being designed, under construction, or built in the U.S., representing 
a 50% increase from July 2020 to December 2021, according to 
WoodWorks.\13\ Yet, despite this progress and continued demand for 
better, more climate-friendly housing and infrastructure, the U.S. is 
behind on mass timber production and use. In the 2023 Farm Bill, 
Congress should build on the Timber Innovation Act to expand 
opportunities for sustainable wood construction, leveraging the Forest 
Products Lab and programs like Wood Innovation Grants. The 2023 Farm 
Bill can reduce carbon emissions and increase carbon storage through 
support for building with wood. We look forward to providing specific 
recommendations in the coming months, together with the American Wood 
Council and other partners.
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    \13\ https://www.woodworks.org/resources/u-s-mass-timber-projects/.
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    Buildings are responsible for 39% of global carbon emissions and 
traditional building materials require a lot of fossil fuel energy to 
produce. Steel and concrete produce 15% of global emissions,\14\ which 
is more emissions than any nation on [E]arth with the exception of the 
U.S. and China.\15\ New engineered wood products, like mass timber, 
offer economic, social, and environmental benefits. Building with wood 
is a powerful solution for avoiding emissions and storing carbon to 
maximize the value of our investment.
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    \14\ https://iea.blob.core.windows.net/assets/3f901e93-c083-4649-
a9e6-c591e28a7b70/ETP2015.pdf.
    \15\ https://www.epa.gov/ghgemissions/global-greenhouse-gas-
emissions-data.
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    Wood is a safe, durable, and efficient building material, storing 
carbon for the entire life of the building and because it is 
biodegradable and easily recycled, wood does not pose environmental 
challenges at the end of a building's life. Mass timber uses wood 
panels that are pre-built and then easily assembled with fewer trucks 
and equipment, with little to no construction site waste. Mass timber 
has been shown through research to be blast-resistant, fire-resistant, 
and earthquake-resistant. Increasing use of wood in buildings can 
reduce construction emissions by up to 44% while also storing 
significant amounts of carbon in wood panels and assemblies\16\ adding 
tangible value to the building. Mass timber can also be grown locally 
as a domestic building material supporting American jobs.
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    \16\ https://rmi.org/wp-content/uploads/dlm_uploads/2021/08/
Embodied_Carbon_full_re
port.pdf.
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    Sustainable forest management ensures increased use of wood in 
construction truly achieves climate, carbon, and other positive 
environmental outcomes. Third-party certification systems ensure 
sustainable practices in support of climate benefits. In the U.S. 
certification includes programs to certify forests to a forest 
management standard, chain of custody certification programs, and 
responsible wood fiber sourcing programs provided by the Sustainable 
Forestry Initiative,\17\ the American Tree Farm System,\18\ and Forest 
Stewardship Council.\19\ We were pleased to see the clarification in 
the 2018 Farm Bill to give all qualified certification programs equal 
treatment in any Federal procurement or other climate change policy 
involving private working forests. This is an important clarification 
and should be carried forward in all future farm bills.
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    \17\ https://forests.org/.
    \18\ https://www.treefarmsystem.org/.
    \19\ https://us.fsc.org/en-us.
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Wildfire in the Farm Bill
    Beginning in early July 2021, the Bootleg Fire in southern Oregon, 
the third largest wildfire in Oregon's history, devastated a drought-
stricken landscape. Among the 413,000 acres that burned were some 
110,000 acres of Green Diamond timberland. We literally watched years 
of investment and work go up in smoke.
    Increasingly intensive fire seasons severely impact the 
environment, local and regional economies, and public health and 
safety. Federal, state, and local forest owners and managers have a 
shared stewardship responsibility to protect natural resources and the 
communities that depend on them, especially during fire season. Yet, 
worsening fire seasons are making stewardship objectives more difficult 
to achieve. Despite increases in Federal firefighting resources, local 
fire officers and incident commanders often face difficult choices on 
how to best deploy limited personnel and equipment to attack and 
extinguish fires during the height of fire season. I would like to 
commend Chief Moore for rising to the occasion and sending important 
signals to those in the field about fundamental changes in approach by 
the Forest Service this fire season.
    To help address these challenges, the U.S. Forest Service and 
private forest owners are taking a new and innovative approach with the 
objective of better protecting private lands that are providing 
significant climate and other public benefits. Private forest owners 
with holdings in western states are partnering with the Forest Service 
to provide private resources, including people, equipment, and 
knowledge of local terrain and conditions, to fight fire in areas 
across ownerships. This partnership will give field officers and 
incident commanders more tools to keep fires more manageable and less 
dangerous, local knowledge and experience to maintain safe firefighting 
operations, and help to better identify and evaluate safety risks and 
opportunities. It will also enable Federal, state, and private forest 
owners to better achieve outcomes that protect the resources and 
communities in their shared stewardship.
    Development of this partnership is currently underway and will be 
commemorated in a memorandum of understanding between the parties. We 
all want to be good neighbors and by working together, we can protect 
our forest resources, private property, local jobs, and our local 
communities. I appreciate that Green Diamond has been included in the 
Wildland Fire Mitigation and Management Commission created in the 
bipartisan Investing in Infrastructure and Jobs Act. We look forward to 
working with the Forest Service this summer, and we are committed to 
using all available public and private resources to help put the fires 
out.
Conclusion
    The true scale of our forests' climate impact is hard to fathom. My 
colleagues at the National Alliance of Forest Owners have put together 
a forest carbon data visualization--available at 
ForestCarbonDataViz.org \20\--that uses publicly available EPA and USDA 
Forest Service's FIA data to show the enormous carbon contributions of 
private working forests and solid wood products. We are proud of the 
climate mitigation work we do, as private working forest owners.
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    \20\ http://www.forestcarbondataviz.org/.
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    Thank you again for conducting this hearing. The 2018 Farm Bill 
made important strides in advancing policies to improve carbon data, 
increase sustainable wood construction, and address the wildfire 
crisis. The 2023 Farm Bill can do even more. Green Diamond Resource 
Company and the National Alliance of Forest Owners stand ready as a 
resource to this Committee as it addresses the upcoming farm bill and 
the solutions private working forests can offer.

    The Chair. Thank you for your testimony.
    The chair now recognizes Mr. Martin. Please begin when you 
are ready. You have 5 minutes.

      STATEMENT OF CHRISTOPHER MARTIN, FORESTER, STATE OF 
     CONNECTICUT; PRESIDENT, NATIONAL ASSOCIATION OF STATE 
                    FORESTERS, HARTFORD, CT

    Mr. Martin. Thank you, Chair Spanberger, Ranking Member 
LaMalfa, and Members of the Subcommittee for holding this 
hearing today and for the opportunity to testify on behalf of 
the National Association of State Foresters. I am Christopher 
Martin, Connecticut State Forester and NASF President. NASF 
represents the directors of forestry agencies in all 50 states, 
five U.S. Territories, three nations in the Compact of Free 
Association with the U.S., and the District of Columbia.
    State Foresters deliver technical and financial assistance 
to private landowners, with the conservation of more than \2/3\ 
of the nation's forests. They also partner with Federal land 
management agencies through cooperative agreements and Good 
Neighbor Authority to manage National Forests and Grasslands. 
We are the principal conduit for connecting Federal programs 
and private landowners working with cooperative extension 
services, certified foresters, conservation districts, and 
local communities to administer, implement, and deliver the 
state and private forestry programs authorized under the 
Cooperative Forestry Assistance Act of 1978 (Pub. L. 95-313), 
as well as other Federal programs and authorities. We 
appreciate this Subcommittee holding this important hearing 
today to review the forestry provisions from the 2018 Farm Bill 
as we work toward developing the next farm bill.
    I would like to highlight for you today three policy 
priorities for NASF we have identified for addressing the next 
farm bill. First, the Good Neighbor Authority has allowed the 
Forest Service to partner with states on Federal forest 
restoration and management projects, facilitating critical work 
to improve species habitat, enhance the watersheds, and reduce 
hazardous fuels and mitigate wildfire risks. In the 2018 Farm 
Bill, Congress expanded GNA to make Tribes and counties 
eligible entities to enter into Good Neighbor agreements. 
However, Tribes and counties are not afforded the same 
authority as states to retain GNA project revenue to reinvest 
in conservation, greatly reducing the significant incentive to 
engage and partner on critical management projects, including 
wildfire mitigation, invasive species management, and habitat 
maintenance.
    Additionally, the 2018 Farm Bill removed the ability for 
restoration services that were agreed to under the Good 
Neighbor agreements to take place off Federal lands. This means 
adjacent state, Tribal, county, and other land that is 
essential to the health and productivity of National Forests 
can no longer be restored as a comprehensive landscape from the 
revenues generated from GNA projects.
    NASF supports authorizing counties and Tribes to retain and 
expand GNA revenues generated from GNA projects and restoring 
the cross-boundary nature of GNA by removing the requirement 
that revenue from GNA projects must be spent solely on Federal 
lands.
    Additionally, NASF supports further expanding GNA to all 
Federal land management agencies, making the authority 
permanent or at a minimum extending the 2023 sunset date for 
states to retain GNA revenue and amending the GNA to authorize 
the reconstruction, repair, and restoration of roads 
administered by the Bureau of Land Management and other Federal 
agencies.
    A second priority from the 2018 Farm Bill codified the 
Landscape Scale Restoration Program but also stipulated a new 
rural requirement for LSR, resulting in a subsequent rulemaking 
by the Forest Service limiting LSR work to communities of less 
than 50,000 people. This significantly reduced the scope and 
efficacy of the program, eliminating many opportunities for the 
urban and community forestry program work and reduce the 
potential for hazardous fuels reduction projects under LSR 
within the wildland-urban interface. NASF supports modifying 
the language in section 8102 of the 2018 Farm Bill that 
designated the program strictly as a rural program.
    To be as impactful as possible across all ownerships and 
all lands, including cities, suburbs, and towns, should be 
eligible for LSR support, as they were prior to the 2018 Farm 
Bill. The program should not exclude larger communities or 
populations that depend on trees for their health and well-
being, particularly in historically underserved communities. 
Urban and community forestry projects under LSR are crucial to 
ensuring all people have equitable access to the many benefits 
of trees.
    Section 8401 of the 2018 Farm Bill provided a new authority 
for the Forest Service to make grants available to State 
Foresters for hazardous fuel reduction projects that crossed 
landownership boundaries. While this new authority is working 
well in increasing the authorization for appropriations as 
authorization for appropriations is warranted, it is our 
understanding the Forest Service used this authority to codify 
an existing mechanism for implementing cross-boundary hazardous 
fuel products commonly known as Stevens Money, an 
appropriations provision championed by the late Senator Ted 
Stevens. Our written testimony provides more background on the 
history and purpose of this funding.
    The intent of the Forests in the Farm Bill Coalition for 
section 8401 in the 2018 Farm Bill was to supplement existing 
mechanism for implementing cross-boundary hazardous fuel 
projects and augmenting funding available for accomplishing 
this work, not to supplant Stevens Money. We look forward to 
working with the Members of this Subcommittee and our partners 
in the Forests in the Farm Bill Coalition here with us today in 
developing a solution that will best utilize all available 
authorities and funding accomplishing this important work.
    Thank you for the opportunity to testify here today, and I 
look forward to answering your questions.
    [The prepared statement of Mr. Martin follows:]

     Prepared Statement of Christopher Martin, Forester, State of 
   Connecticut; President, National Association of State Foresters, 
                              Hartford, CT
    The National Association of State Foresters (NASF) is pleased to 
provide written testimony to the House Agriculture Subcommittee on 
Conservation and Forestry for this important hearing on, A 2022 Review 
of the Farm Bill: Forestry. Thank you, [Chair] Spanberger, Ranking 
Member LaMalfa, and Members of the Committee, for holding this hearing 
today and for the opportunity to testify on behalf of NASF.
    NASF represents the directors of the forestry agencies in all 50 
states, five U.S. Territories, three nations in compacts of free 
association with the U.S., and the District of Columbia. State 
Foresters deliver technical and financial assistance to private 
landowners for the conservation of more than \2/3\ of the nation's 
forests. They also partner with Federal land management agencies 
through cooperative agreements and Good Neighbor Authority (GNA) to 
manage National Forests and Grasslands. All state forestry agencies 
share a common mission to protect America's forests and most have 
statutory responsibilities to provide wildland fire protection on all 
lands, public and private.
    State Foresters believe the farm bill is a unique opportunity to 
support rural America's economic backbone and improve the quality of 
life for all Americans by enhancing support for America's trees and 
forests.
    Between the 2018 Farm Bill and the 2018 Omnibus Appropriations 
Bill, several significant achievements were accomplished, providing new 
authorities for improving forest management. The 2018 Farm Bill 
forestry title built upon 2014 achievements, streamlining decision-
making and expanding authorities within several programs and creating 
several new programs and authorities while continuing to address and 
provide for cross-boundary and landscape-scale forest management.
    Recent farm bills have also been instrumental in elevating the role 
of forestry in conservation title programs. State forestry agencies are 
proactively involved in working with the Federal agencies in 
successfully implementing these programs which provide invaluable 
support to small private landowners in their forest management 
objectives. NASF appreciates the ongoing program support and attention 
in the farm bill that is responsible for significant on-the-ground 
results due to these partnerships.
Good Neighbor Authority
    The GNA program has allowed the USDA Forest Service (Forest 
Service) to partner with states on Federal forest restoration and 
management projects, facilitating critical work to improve species 
habitat, enhance watersheds, and reduce hazardous fuels and mitigate 
wildfire risks.
    Since GNA was first authorized by Congress with the 2014 Farm Bill, 
at least 36 states have broken ground on over 130 GNA projects. Through 
these GNA projects, states are contributing to the restoration of 
Federal forests on a scale never before realized. According to the 
Congressional Research Service, the amount of Forest Service timber 
sold under GNAs has increased from 14.4 million board feet in fiscal 
year (FY) 2016 to 182.6 million board feet in FY 2019.
    In the 2018 Farm Bill, Congress expanded GNA to make Tribes and 
Counties eligible entities to enter into Good Neighbor Agreements. 
However, Tribes and Counties were not afforded the same authority as 
states to retain GNA project revenues to reinvest in conservation, 
greatly reducing a significant incentive to engage and partner on 
critical management projects including wildfire mitigation, invasive 
species management, and habitat maintenance.
    Additionally, the 2018 Farm Bill removed the ability for 
restoration services that were agreed to under the Good Neighbor 
Agreement to take place off Federal lands. This means adjacent state, 
Tribal, county, and other land that is essential to the health and 
productivity of National Forests can no longer be restored as a 
comprehensive landscape with revenues generated from GNA projects.
    NASF supports authorizing counties and Federally Recognized Tribes 
to retain and expend GNA timber sale revenues and restoring the cross-
boundary nature of GNA by removing the requirement that GNA timber sale 
revenues must be spent solely on Federal lands.
    Additionally, NASF supports further expanding GNA to all Federal 
land management agencies, making the authority permanent, or at a 
minimum extending the October 1st, 2023, sunset date for states to 
retain GNA timber sale revenue, and amending GNA to authorize the 
reconstruction, repair, and restoration of roads administered by the 
Bureau of Land Management, and other Federal agencies (should GNA be 
expanded to include other Federal land management agencies).
Landscape Scale Restoration Program
    The 2018 Farm Bill codified the Landscape Scale Restoration (LSR) 
program which was a key policy priority at the time for NASF. The 
program originated with the 2008 Farm Bill and existed for a decade as 
a jointly administered program between the Forest Service and state 
forestry agencies.
    In addition to codifying the program, the 2018 Farm Bill also 
stipulated a new ``rural'' requirement for LSR. As a result, and per a 
subsequent rulemaking made by the Forest Service, LSR work can only be 
conducted in communities made up of fewer than 50,000 people. This 
change significantly reduced the scope and efficacy of the program by 
prohibiting work in areas across the United States with legitimate need 
for LSR grant support.
    The LSR rural requirement has eliminated opportunities for state 
forestry agencies to leverage their Urban and Community Forestry (U&CF) 
program work, and greatly restricted their ability to conduct hazardous 
fuels reduction projects under LSR in the areas with populations 
greater than 50,000 including many areas within the Wildland Urban 
Interface (WUI).
    LSR should be returned to a flexible program able to address the 
highest priority needs across landscapes as identified in state Forest 
Action Plans, regardless of community size. The program should not 
exclude larger communities or populations that depend on trees for 
their health and well-being, particularly in historically marginalized 
communities.
    Forests aren't just found on mountainsides or in wildlands, but in 
cities, towns, and communities as well. Community forests--especially 
in areas with over 50,000 residents--are shown to significantly improve 
human health outcomes and provide tremendous socioeconomic benefits. 
Healthy community forests aren't a given; they take work. For decades, 
state forestry agencies have helped communities manage their forests by 
providing technical and financial assistance for the planting and care 
of street, park, and other community trees. State forestry agencies and 
their U&CF programs are crucial to ensuring all people have equitable 
access to the many benefits of trees.
    The LSR program has supported many successful U&CF projects in 
priority areas with competitive grant funding in the past. It is 
crucial that LSR projects can once again include U&CF work.
    NASF supports striking the rural requirement from LSR legislative 
language established in the 2018 Farm Bill. To be as impactful as 
possible across ownerships and on a landscape scale, all lands--
including cities, suburbs, and towns--should be eligible for LSR 
support as they were prior to the 2018 Farm Bill.
Promoting Cross-Boundary Wildfire Mitigation
    The 2018 Farm Bill amended section 103 of the Healthy Forests 
Restoration Act (16 U.S.C.  6513), providing a new authority for the 
Forest Service to spend up to $20 million on grants to state foresters 
for hazardous fuel reduction projects that cross land ownership 
boundaries, particularly in priority landscapes as identified in state 
FAPs.
    While section 8401 of the 2018 Farm Bill, Promoting Cross Boundary 
Wildfire Mitigation, is working well, there is a need for increasing 
the authorization of appropriation for this provision. Additionally, it 
is our understanding the Forest Service used this new authority to 
codify an existing mechanism for implementing cross-boundary hazardous 
fuels projects commonly known as `Stevens Money'. As such, the helpful 
authorities provided under `Stevens Money' are no longer being 
utilized, and the net increase to the authorization of appropriations 
for cross-boundary hazardous fuels projects is $5 million. The end 
result has not been $20 million in new authority.
    In FY 2002, Senator Ted Stevens championed the addition of 
earmarked hazardous fuels funds. These funds are often referred to as 
`Stevens Money' and were to be spent towards hazardous fuels treatments 
on non-Federal lands that were adjacent to National Forest System lands 
where hazardous fuels work was being conducted or where other work was 
being conducted that increased the threat to the adjacent lands. The 
authorization allowed for money to be spent to protect communities when 
hazard reduction activities were being planned on adjacent National 
Forest System lands.
    This authorization allowed for work on Federal and non-Federal 
lands to complement each other and provided flexibility for the Forest 
Service to use the money where it would provide the most benefit. This 
provision has been added to the Interior-Environment and Related 
Agencies appropriations bill every year since FY 2002. In the FY 2003 
Interior-Environment and Related Agencies appropriations bill the 
following language was added: ``Provided further, that in addition to 
funds provided for State Fire Assistance programs, and subject to all 
authorities available to the Forest Service under the State and Private 
Forestry Appropriation, up to $15,000,000 may be used on adjacent non-
Federal lands for the purpose of protecting communities when hazard 
reduction activities are planned on National Forest lands that have the 
potential to place such communities at risk'' capping `Stevens Money' 
at $15 million.
    The intent from the Forests in the Farm Bill Coalition for section 
8401 of the 2018 Farm Bill was to supplement existing mechanisms for 
implementing cross-boundary hazardous fuels projects, and augment 
funding available for accomplishing this work, not to supplant `Stevens 
Money'. Both `Stevens Money' and the 2018 Farm Bill authority are 
important tools in the toolbox for mitigating wildfire risk for 
communities. We look forward to working with Members of the 
Subcommittee and our partners in the Forests in the Farm Bill Coalition 
on developing a solution that will best utilize all available 
authorities and funding for accomplishing this important work.
Post-Disaster Landowner Assistance and the Emergency Forest Restoration 
        Program
    Since the 2018 Farm Bill was passed, forest landowners across the 
country have been impacted by a myriad of natural disasters. In the 
wake of hurricanes in the South, the 2020 Derecho in Iowa, catastrophic 
wildfires in the West, and tornados, ice storms and more everywhere in 
between, we have realized the significant Federal programming gap that 
exists in helping landowners reforest and get back on their feet. The 
Emergency Forest Restoration Program (EFRP) which was codified in the 
2008 Farm Bill (Food, Conservation, and Energy Act of 2008) has proven 
to be woefully inadequate and bureaucratically cumbersome for most 
landowners to benefit from. Forest landowners should have equal support 
from the Federal Government compared to other agriculture commodities 
when faced with the impacts of natural disaster. Timely and 
ecologically-proper timber salvage and reforestation helps ensure our 
nation's private forestlands continue to provide public benefits like 
clean air and water, recreation opportunities, rural economic stimulus 
and more.
Forestry Support under Conservation Programs
    The Environmental Quality Incentives Program (EQIP) administered by 
the Natural Resources Conservation Service (NRCS) is playing an 
increasingly important role in helping non-industrial private forest 
owners (NIPF) access both financial and technical assistance to 
sustainably manage their forests. EQIP and other conservation title 
programs like the Conservation Stewardship Program and Conservation 
Reserve Program are absolutely essential to helping private landowners 
keep their forests as forests, continuing to provide a full suite of 
ecosystem benefits to society. Through strong partnerships between 
NRCS, Forest Service, state forestry agencies and other partners, the 
share of EQIP obligations going to forestry practices has increased 
from 4.3% to 7.3% over the past decade, meaning more forest landowners 
have been able to access assistance to help keep more forest acres in 
conservation. Commensurate with this increase in financial assistance, 
more funding for technical service provision through states and other 
providers is needed to keep pace. NASF appreciates the Subcommittee's 
ongoing support of EQIP, especially its role in forestry and wildlife 
habitat conservation.
Conclusion
    Thank you for the opportunity to appear before the Subcommittee 
today and provide testimony on behalf of NASF. We appreciate the 
ongoing work of this Subcommittee to provide Federal and state forest 
managers, as well as private landowners, with tools that increase the 
pace and scale of science based, sustainable active forest management, 
cross boundary work, and rapid and effective response to insects, 
disease and wildland fire.
    We look forward to working with the Subcommittee, our partners with 
us here today and our Federal partners, including the USDA Forest 
Service and NRCS. Our common goal is the same: to support the health of 
America's trees and forests and the rural and urban communities which 
rely on them. We look forward to working with you to provide the 
collective insights of the nation's State Foresters in developing the 
2023 Farm Bill.

    The Chair. Thank you very much.
    The chair now recognizes Ms. Humphries. Please begin when 
you are ready. You have 5 minutes.

          STATEMENT OF REBECCA A. HUMPHRIES, CO-CHIEF 
            EXECUTIVE OFFICER, NATIONAL WILD TURKEY 
                   FEDERATION, EDGEFIELD, SC

    Ms. Humphries. Thank you, Chair Spanberger, Ranking Member 
LaMalfa, and Members of this Subcommittee. It is my pleasure to 
be with you here today and an honor to talk about farm bill. I 
am Becky Humphries. I am co-CEO of the National Wild Turkey 
Federation. That co title denotes the fact that I will be 
moving towards retirement next year, and the new leadership 
with NWTF will be moving into their roles.
    Twenty twenty-three will also be our 50th anniversary year, 
and we are very proud of the great work we have done at the 
National Wild Turkey Federation to not only conserve the wild 
turkey and also preserve our hunting heritage but tremendous 
conservation work. Since 1985, we have conserved over 20 
million acres of habitat.
    Today, I would like to just focus on a couple of our 
partnerships and what we see as additional opportunities for 
refinement in the next farm bill. The first I would like to 
highlight, we have had a 40 year partnership with the U.S. 
Forest Service. This partnership was built with us making 
tracks as we call it, but it is about active management and 
helping the Forest Service do active management through 
stewardship contracting and beyond. We have done the first 
stewardship contract and over 100 of them since all across this 
nation. To put it in perspective, in 2019, we were number four 
nationally of Federal commercial timber purchasers of timber 
volume sold off the National Forest System, huge. We are 
usually one of the top ten. And we don't have a mill, we don't 
make furniture. It is all stewardship. It goes right back into 
the forest to make those forests more sustainable, to be better 
managed, and to make sure we have clean water and native 
species.
    Two things that we would like to see. Number one is we 
would like to extend stewardship authority for all Federal 
lands. As we talked about earlier in this hearing, not all 
fires start on Federal lands, but Federal lands, National 
Parks, refuges, and Army Corps of Engineers lands would open up 
an additional 180 million acres of land to potential 
stewardship work, and they are badly needed.
    Second, we would like to see 20 year stewardship contracts 
on the national scale. We desperately need stability in our 
rural communities and for private investment for future forest 
management work. And 20 year agreements would put more of our 
work in long-term perspective rather than redoing agreements 
that, quite frankly, administrative overhead takes up time and 
energy.
    The other partnership I would like to highlight is our 
National Forestry Initiative. This is a partnership that we 
have with USDA's Natural Resources Conservation Service. 
Through this partnership, we have positions in 24 states to do 
technical assistance for on-the-ground private forest owners. 
It is paramount to getting good forest management on the 
ground. And as my colleague Rita Hite mentioned earlier, we 
have just a small portion of those forest owners that are 
seeking that technical assistance, and we need to do more.
    And in this next farm bill we would like to see prescribed 
fire highlighted as a tool. Many times, that is the most cost-
effective means of doing active management and ongoing 
management on the forest but it takes technical assistance and 
it takes equipment.
    The third thing I would like to highlight is a concern, and 
it goes beyond the farm bill, but quite frankly, we have tried 
to address it within large categorical exclusions in past farm 
bills. We are seeing significant pushback in terms of legal 
challenges when we are trying to go through forest management 
plans. And what is happening is this expansion of legal 
challenges is requiring us to go back into forest management 
plans and update those with every new occurrence of threatened 
endangered species. That work should really be done at the 
project level. That is the area, the time when you are doing 
the actual planning, and the historical review as well as 
threatened endangered species. And so we would like to see 
approved forest plans not be ongoing Federal actions but rather 
have that review at a lower level.
    We look forward to working together with this Subcommittee 
in the days ahead to move forward on our next farm bill. Many 
great strides have been made, and with some refinement, we can 
make them even better in the days ahead. Thank you.
    [The prepared statement of Ms. Humphries follows:]

Prepared Statement of Rebecca A. Humphries, Co-Chief Executive Officer, 
             National Wild Turkey Federation, Edgefield, SC
July 13, 2022

 
 
 
Hon. Abigail Davis Spanberger,       Hon. Doug LaMalfa,
Chair,                               Ranking Minority Member,
Subcommittee on Conservation and     Subcommittee on Conservation and
 Forestry,                            Forestry,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    [Chair] Spanberger, Ranking Member LaMalfa, and Members of the 
Subcommittee on Conservation and Forestry, it is my honor to be here 
today to provide testimony on the important farm bill programs that do 
so much for natural resources conservation on our nation's private and 
public lands.
    I am Becky Humphries, CEO of the National Wild Turkey Federation, a 
not-for-profit organization dedicated to the conservation of the wild 
turkey and the preservation of our hunting heritage. Next year, we will 
be celebrating our 50th Anniversary, and I'm very proud to say that 
through our work with farm bill conservation and forestry programs and 
partnerships with state fish and wildlife agencies, Federal land 
management agencies, and private landowners, we have helped to conserve 
or enhance more than 20 million acres since we started collecting those 
data in 1985. Each year, we help to conserve or enhance hundreds of 
thousands of acres for the benefit of the wild turkey, its habitat, and 
all of the other wildlife and plant species that benefit from well 
managed forestlands, grasslands, and streamside habitat.
    The National Wild Turkey Federation's mission is as crucial today 
as it was when the organization was founded in 1973. Sadly, we're 
losing 6,000 acres of habitat every day. What we do on the land in the 
coming decades will be instrumental in strengthening climate and 
wildfire resilience in our nation's forests and other upland 
ecosystems, ensuring clean water for our communities, providing access 
for outdoor enthusiasts, including hunters, while enhancing habitat for 
wild turkeys and countless other species.
    Hunters are essential to the funding of conservation, but now we're 
at the point where less than ten percent of the American population 
hunts, so the funding source is going away. This Committee's work and 
the significant Conservation and Forestry Title efforts of the farm 
bill are helping the NWTF to continue to apply conservation to working 
lands. The NWTF is leading a collaborative effort to solve the problem 
through our Save the Habitat. Save the Hunt. initiative, our America's 
Big Six of Wildlife Conservation work on over 80 vital watersheds and 
738 million acres throughout the country, our Waterways for Wildlife 
initiative in the drought-prone Great Plains and American West, and the 
contributions of our dynamic and passionate volunteer base in 49 
states. We spend our volunteers' money and taxpayers' money wisely by 
leveraging each dollar at least 3:1 but often at much higher levels. As 
an example, this year's Waterways for Wildlife Initiative projects 
leveraged NWTF funding at a rate of 19:1 to conserve 77 critical stream 
miles in eight states. For every dollar raised by the NWTF, 90 goes to 
mission delivery.
    Since 1985, NWTF volunteers and partners raised and spent more than 
$488 million toward our mission. We recognize that accomplishing 
conservation delivery at a scale necessary to keep food on our tables, 
our water clean, our forests and grasslands healthy, and vibrant rural 
communities can only occur with public, private, and nonprofit partners 
working together across land-ownership boundaries with a common, 
landscape-scale vision for success.
    Private land holdings make up more than 60% of the approximately 
2.3 billion acres of land mass in the United States. In the Eastern 
United States, private lands far exceed public lands and, therefore, 
are crucial to the success of landscape-scale conservation objectives. 
These objectives need to include Federal, state, and local work to 
ensure healthy water, wildlife, and the places where wildlife and 
people live and recreate, including, forests, grasslands, agricultural 
lands, and water courses. In the West, the reverse is true, with public 
landholdings making up 50% or more of the land in many states. 
Delivering conservation on private lands--in partnership with private 
landowners--is fundamental to the success of landscape-scale, cross-
boundary habitat, forestry, and climate-driven conservation efforts, 
including the USDA's recently announced 10 Year Wildfire Crisis 
Strategy.
    The farm bill brings the private landowner to the table. This 
includes generational family farmers and forest owners, Non-
Governmental Organizations (NGOs), commercial operations, and American 
families. Farm bill programs provide the structure by which these 
conservation objectives are met by providing private landowners 
incentives for voluntary land stewardship. Additionally, USDA's 
delivery of technical assistance to private landowners to implement 
conservation programs on the landscape is crucial.
    The NWTF is an invested participant in, and implementer of, a 
number of farm bill programs. These programs include the Environmental 
Quality Incentives Program (EQIP), Conservation Reserve Program (CRP), 
and Regional Conservation Partnership Program (RCPP). NWTF also 
partners with the USDA's Natural Resources Conservation Service (NRCS), 
through shared positions, to provide technical assistance at the NRCS 
State Office level. And through a national partnership, we assist with 
workforce capacity in NRCS offices across the country.
    The NWTF and NRCS are working together to help improve forest 
ecosystem health and resiliency on private lands and manage the 
forestry-related workload derived from the farm bill. As part of the 
National Forestry Initiative agreement, the NWTF is positioned to help 
improve forest health and climate resilience on an estimated 350,000 
acres of private land throughout the country by providing experienced 
forestry professionals to bolster NRCS staff in 24 states over a 5 year 
period. To date, NFI has affected over 280,000 acres. Through our work, 
we see first-hand both the successes of these programs and needed 
improvements. Today, we offer our insights to improve this influential 
legislation.
    The NWTF strongly supports Title II--Conservation and Title VIII--
Forestry programs, as specified in the Agriculture Improvement Act of 
2018 (Public Law 115-334) and would like to see reauthorization of 
these programs to achieve desired landscape-level objectives. We 
encourage this Subcommittee and Congress as a whole to consider these 
specific farm bill recommendations for improvement:

   Actively promote prescribed burning as a valuable habitat 
        and forest management tool. Prescribed burning is not the only 
        tool in the toolbox, but when applicable, it is often the most 
        efficient and cost-effective technique for reducing hazardous 
        fuel loads, removing unwanted vegetation, and promoting 
        beneficial wildlife habitat in the forest understory. Low 
        intensity, slow moving prescribed burns conserve our grasslands 
        and forests by reducing fuel loads and removing ladder fuels. 
        They greatly reducing the overall risk of large-scale, costly, 
        and catastrophic wildfires, both in terms of suppression, 
        recovery and restoration of the impacted landscapes. Prescribed 
        fire is also the tool of choice for the routine maintenance of 
        previously treated landscapes. The visual from the Wall Street 
        Journal that is attached to this testimony shows the geographic 
        areas with the greatest wildfire threat. It should also be 
        labeled as the areas with the least prescribed fire management. 
        The upcoming farm bill is a perfect opportunity to promote 
        these benefits as well as reduce barriers to implementing 
        prescribed burning on the landscape. Barriers include securing 
        and maintaining the social license, or acceptance from the 
        public, by increasing the comfort level of surrounding 
        landowners and local permitting officials, properly training 
        landowners in the application of fire and smoke management, and 
        allaying fears of liability if a fire jumps a line and causes 
        unintended property damage. In addition, cost and availability 
        of prescribed burning equipment necessary to complete safe, 
        controlled burns is sometimes a barrier, especially in 
        underserved communities.

   Actively promote technical assistance programs and training 
        opportunities for private landowners and partners such as the 
        NWTF. Attaining landscape-level conservation objectives 
        requires active engagement across the boundaries of public and 
        private forestlands. Non-industrial landholders are more likely 
        to participate if they know technical assistance and training 
        opportunities are available. We have found that where 
        affiliated partner staff from NGOs, such as NWTF, supplement 
        NRCS local staff, landowner participation tends to increase as 
        a result of additional technical assistance capacity. History 
        has taught us that well-managed forests start with informed, 
        committed forest owners. Technical assistance programs not only 
        help to educate landowners they also create expectations with 
        timelines for management activities. Management is not a one-
        and-done proposition, but rather a continued commitment, which 
        is more likely with consistent and easily accessible technical 
        assistance and training.

   Reauthorize the Conservation Reserve Program (CRP) and 
        maintain CRP acreage at current authorized levels, including 
        CRP forestry acreage. CRP protects highly erodible and marginal 
        agricultural lands from being put back into production. 
        Retaining current mid-contract management requirements and 
        ensuring compliance maximize ecosystem benefits of CRP acreage. 
        And as carbon credits and ecosystem service assets become more 
        prevalent, it is of growing importance to provide clarification 
        on the eligibility of benefits for the CRP program.

   Reauthorize the Environmental Quality Incentives Program 
        (EQIP) and refocus a portion of the funding to allow more 
        participation in this highly demanded but severely under-funded 
        program, including CRP. This action would also help maintain 
        existing cover, whether grassland or forestland, on lands with 
        expiring CRP contracts that are transitioning to working lands. 
        It would support infrastructure to encourage grazing, including 
        fencing and water developments. We encourage Congress to 
        maintain the current allocation caps for wildlife habitat 
        activities and require the non-expended apportionment be re-
        distributed to areas where funding does not meet current 
        demand. This would ensure wildlife habitat practices, including 
        forestry practices, remain the focus of those funds.

   Reauthorize and enhance the Voluntary Public Access and 
        Habitat Incentive Program (VPA-HIP) and allow landowners 
        enrolled in VPA-HIP to participate in other cost-share 
        programs, including USDA farm bill conservation programs.

   The Regional Conservation Partnership Program (RCPP) has 
        been an extremely beneficial conservation tool; however, 
        administration of this program is difficult. Moving forward, 
        the NWTF recommends the program be reauthorized, but with the 
        ability to recover all costs--direct and indirect, including 
        outreach activities--associated with the implementation of RCPP 
        projects and with the addition of a more streamlined 
        administration process. Mandated recordkeeping and other 
        accounting processes for the continued collection and 
        cataloging of metrics are onerous to the administrating 
        partner, and these processes should be consistent with other 
        Title II programs.

    During our 40 year partnership with the USDA Forest Service, the 
NWTF has become the single largest organization involved in Stewardship 
Agreements across the agency. The Stewardship Authority under which we 
work was permanently authorized in the 2014 Farm Bill and is the 
largest vehicle through which the NWTF delivers its mission on the 
ground. Work accomplished as a result of the agreements includes: 
ecosystem restoration/rehabilitation; sustainable forest management; 
watershed enhancement; wildlife benefits, such as Threatened and 
Endangered species habitat improvement; wildland urban interface (WUI) 
protection; fuels reduction; and recreation.
    Through our critical partnership with the Forest Service, the NWTF 
has approximately 50 stewardship agreements ongoing across the National 
Forests and Grasslands in every Forest Service Region of the country, 
with more than 100 completed to date. To put this partnership into 
perspective, in 2019, the NWTF was ranked No. four nationally on the 
list of Federal, commercial timber purchasers by timber volume sold 
from National Forest System lands, and we regularly rank in the top 
ten. The resulting sales of this timber go directly back into these 
lands for the betterment of habitat and wildlife, water quality, 
climate and fire resilience, and recreational access. With this vast 
history of successful implementation of the Stewardship Authority, the 
NWTF makes these recommendations:

   Extend permanent Stewardship Authority to all Federal land-
        holding departments and agencies. The two agencies with 
        permanent stewardship authority are the Forest Service and the 
        Bureau of Land Management. Granting authority to the National 
        Parks Service, the Fish and Wildlife Service, the Department of 
        Defense including the U.S. Army Corps of Engineers and all 
        other Federal land-holding agencies gives these agencies 
        greater flexibility to better address climate, wildfire, 
        wildlife, and recreational needs. Granting stewardship 
        authority to these agencies could benefit more than an 
        additional 180 million acres of federally-owned lands. The NWTF 
        has MOUs with the Department of Defense through the U.S. Army 
        Corps of Engineers and military installations in a number of 
        states--Fort Polk, Fort Riley and Letterkenny Army Depot, among 
        others--but stewardship would expand those opportunities to 
        treat critical acreage and infrastructure.

   Authorize long-term, 20 year Stewardship contracts at a 
        national scale. Forests are not annual crops, and they require 
        longer-term maintenance options to achieve a resilient, healthy 
        condition. Twenty-year contracts provide a number of benefits. 
        It would allow for extended periods of uninterrupted forest 
        treatments that provide sustainable assurances of timber volume 
        for contractors, partners, and agency staff. It also would 
        reduce the need and time requirements for re-application and 
        review processes and the ramp-up/ramp-down periods associated 
        with these interruptions. Just as importantly, 20 year 
        contracts will benefit rural economies, including those 
        currently underserved, through more stable employment 
        opportunities and confidence for small business owners to 
        invest in long-term infrastructure, such as forestry equipment, 
        mills, and staff. This stability in our forest management 
        infrastructure is greatly needed and will be bolstered through 
        longer contract periods.

    None of the impactful conservation work we have accomplished 
together with the U.S. Forest Service, the NRCS and other partners 
could occur without the authorities and incentive programs established 
in the farm bill. The Conservation and Forestry Titles are crucial to 
the NWTF's mission delivery. This is why we actively engage in farm 
bill stakeholder coalitions, like the Forest in the Farm Bill 
Coalition, members of which you are hearing from today. While 
coordination with partners and other stakeholders is still underway, it 
is important for us to provide these high-level recommendations on 
behalf of our 200,000 members.
    Before I close, I would like to express a final but significant 
concern. The NWTF is fully supportive of the Endangered Species Act and 
the National Environmental Policy Act and the great protections they 
afford Threatened and Endangered Species and our vulnerable natural 
resources. There has been a long, but growing trend, however, by 
certain groups to use litigation as a way to halt critical forestland 
and grassland management work. While we recognize the importance of the 
individual's right to challenge government actions through the legal 
process, abuse of the system is tying up agency and partner resources 
and time that could be better used updating outdated forest plans and 
working to ensure our National Forests and grasslands are healthy and 
resilient to climate change, fire, and disease.
    A number of recent examples exist where ESA and NEPA have been used 
to stall work that is long overdue and vital to the health and security 
of National Forests and the communities surrounding them. Court actions 
initiating redundant, time consuming, and expensive consultation 
requirements come at the tax payers' and environment's expense, and are 
often counter to the actual management needs on the ground.
    Congress should address vulnerabilities in the Equal Access to 
Justice Act that has long been the source of public dollars used to 
fund court challenges by groups opposed to Federal land management, 
even when the management activities are deemed scientifically 
appropriate and for the greater good. Additionally, ESA challenges 
shouldn't halt entire forest plans but be addressed at the local, 
project level, where impacted species and habitats are relevant. One 
proposed fix for this would be to clarify that cooperatively developed, 
reviewed, and approved forest plans are not ongoing Federal actions, 
while leaving the individual project plans open for evaluation and 
update as new information becomes available.
    We urge Congress to find a balance between what is already 
supported in Federal law and beneficial for the landscape against the 
right of individuals and groups to recoup their legal challenges 
against government action, so that the positive impacts and authorities 
granted by Congress can be realized.
    In closing, the National Wild Turkey Federation is to committed to 
be a partner to this Subcommittee and other committees as Congress 
works to develop the next farm bill. We stand ready to assist by 
hosting field days and participating in dialog on this critical 
legislation. America needs a strong farm bill for the future of our 
nation's food, water, and wildlife.
    Thank you for your tremendous work and support, and we look forward 
to working with you in the months ahead.
Potential for Significant Wildfires Is Above Normal for Growing Share 
        of U.S.
          Widespread drought is fueling an early rampup of wildfire 
        season, with more than half of the U.S. wildland firefighting 
        resources already committed.
Potential for significant wild land fires
July 2021


          Note: Outlook issued July 1. [Forecast areas are 
        approximate.]
          Source: Predictive Services[, National Interagency Fire 
        Center].
          Image Source: The Wall Street Journal [https://www.wsj.com/
        articles/potential-for-significant-wildfires-is-above-normal-
        for-a-growing-share-of-the-u-s-11625262957].

    The Chair. Thank you very much for your testimony.
    And, Ms. Palmer, the chair now recognizes you for 5 
minutes.

  STATEMENT OF SALLY R. PALMER, CENTRAL APPALACHIAN EXTERNAL 
     AFFAIRS ADVISOR, THE NATURE CONSERVANCY, ARLINGTON, VA

    Ms. Palmer. Thank you. Chair Spanberger, Ranking Member 
LaMalfa, and Members of the Subcommittee, thank you for the 
opportunity to submit testimony on forests in the farm bill. My 
name is Sally Rollins Palmer, and I am here representing The 
Nature Conservancy.
    For over 70 years, we have worked to protect ecologically 
important lands and waters for people and nature here in the 
United States and around the world. It is a privilege to follow 
Chief Randy Moore of the Forest Service and be joined by 
leaders in forestry with whom we partner in the Forests in the 
Farm Bill Coalition.
    I am a native of Appalachian foothills in Tennessee. 
Growing up in this beautiful region gave me an appreciation for 
nature and all the different peoples who have stewarded these 
places as their home for centuries. Professionally, I have 
worked with TNC for over 2 decades, first as a field ecologist 
and in later years on natural resource policy efforts. I 
currently serve as the external affairs advisor for our Central 
Appalachians Program. I have experience working with state and 
Federal agency partners to implement many programs authorized 
by the farm bill. While my testimony today will draw on those 
experiences, our written testimony represents our broad 
interests and the work of my colleagues on forests in the U.S. 
and globally.
    The need for more collaboration and financial investment to 
halt biodiversity loss and address climate change has never 
been greater. The farm bill is a critical part of the solution 
by providing the authorities and funding to ensure improved 
stewardship on private working forests; address ecologically 
sound forest management needs in our public forests; and combat 
challenges, including climate change, insects and diseases, 
drought, and catastrophic wildfires.
    I would like to share with you examples of how farm bill 
programs are helping improve our forest for the future in the 
Appalachians, emphasizing the importance of collaboration and 
planning at the local and landscape scales. This work is driven 
by my colleagues in the field, along with partners at the 
Federal, state, and local levels. For example, the Forest 
Legacy Program is investing in some of the most biodiverse and 
climate-resilient forests in North America, including a recent 
example in Georgia. Located in the southern end of the 
Appalachians, the Dugdown Corridor spans 100,000 acres and 50 
miles between the Talladega National Forest in Alabama and the 
Sheffield/Paulding wildlife management areas. The State of 
Georgia and many partners have a goal to conserve and restore 
forests and increase the amount of publicly accessible 
recreation land in northwest Georgia.
    The Nature Conservancy also has a long history of 
partnering with the Forest Service working to implement the 
Collaborative Forest Landscape Restoration Program. In the 
southern region in Pisgah National Forest in North Carolina, 
TNC and partners has successfully implemented the Grandfather 
Restoration Initiative, a long-term effort that has increased 
prescribed burning and other management practices to more than 
40,000 acres. We also collaborate extensively with the Forest 
Service to implement prescribed fire programs across many fire-
adapted forest systems in the Appalachians and in the longleaf 
pine ecosystem, improving forest health and reducing the risk 
of wildfires.
    In Maryland and West Virginia, TNC has partnered with State 
Forestry and the Monongahela National Forest on the Landscape 
Scale Restoration Program. This project involved ten counties 
and invested in the science needed to establish shared 
restoration goals. It funded cost-effective approaches to 
deploying prescribed fire crews in the field, and tested 
approaches to controlling invasive species on public and 
private forest lands.
    In addition, statewide forest resource assessments and 
strategies are vitally important for greater collaboration 
between Federal, state, and other entities. These plans also 
enable the type of watershed-scale prioritization and 
management implementation that is becoming even more important, 
given the drought and extreme rainfall swings our forests are 
now facing.
    The Joint Chiefs Program also is a significant vehicle for 
delivering both forest and freshwater restoration efforts in 
the Appalachian region. TNC is currently a main collaborator on 
Joint Chiefs projects in Virginia and Tennessee.
    To support region-wide management needs, I also note that 
growing markets for low-value forest products is important in 
Appalachia. TNC generally supports ecologically sound 
management for forest products and advocates for such 
strategies to be designed to restore forests to a more 
ecologically sound condition.
    In conclusion, I emphasize TNC's guiding objectives for 
investing in forests within the farm bill provided in our 
written testimony. We also hope the next farm bill can provide 
maximum flexibility and access to forest programs, particularly 
those funded by the bipartisan infrastructure law. Some have 
high match requirements that create barriers for financially 
strapped partners and local communities.
    We are grateful to this Committee for its longstanding 
commitment to address the needs of America's forests and to 
help Congress advance a global zero deforestation policy 
agenda. Thank you.
    [The prepared statement of Ms. Palmer follows:]

  Prepared Statement of Sally R. Palmer, Central Appalachian External 
         Affairs Advisor, The Nature Conservancy, Arlington, VA
    [Chair] Spanberger, Ranking Member LaMalfa, and Members of the 
Subcommittee, thank you for the opportunity to submit testimony on 
forests in the farm bill. The Nature Conservancy (TNC) is a nonprofit 
conservation organization working around the world to protect 
ecologically important lands and waters for people and nature. Our 
mission is to conserve the lands and waters upon which all life 
depends. We are grateful to this Committee for its longstanding 
commitment and investment in the future of America's lands, water and 
wildlife and addressing the many timely challenges that face our 
forests.
    The Nature Conservancy has engaged in the reauthorization of the 
farm bill and implementation of many of its programs since the 
Conservation Title was created in the 1985 Farm Bill. Since seventy 
percent of the land in the lower 48 states is privately owned, the farm 
bill presents the greatest opportunity to impact conservation on 
private lands. The National Forest System covers 193 million acres of 
forests and grasslands, while more than half of the forestland in the 
United States (475 million acres) is in private ownership. TNC 
continues to engage in implementation of farm bill programs that 
benefit both private and public forests. While we enumerate our 
experience with programs largely enshrined in the Forestry Title (Title 
VIII), our interests span the conservation of forests broadly impacted 
and incentivized by the farm bill, across other titles, to ensure 
continued improvement in stewardship on private non-industrial forests, 
address forest management needs in our public forests, and combat 
challenges including climate change, insects and diseases, drought, and 
catastrophic wildfires that plague both forests and communities all 
over the country. Our hope is that the next farm bill builds on the 
successes of its forestry programs and delivers strong, just, equitable 
and inclusive outcomes while advancing conservation and community 
interests.
    My name is Sally Rollins Palmer, and I am a native of the 
Appalachian foothills in Tennessee. Growing up in this beautiful region 
gave me an appreciation for nature and all the different people who 
have tended to these places as their home for centuries. 
Professionally, I have worked for The Nature Conservancy for over 2 
decades, first as an ecologist--which is my academic training--and in 
later years on a variety of conservation planning and natural resource 
policy efforts. I currently serve as the External Affairs Advisor for 
our Central Appalachians program. Over my career, I have always been 
drawn to focus on how we can all work together--sharing our different 
expertise and experiences--to conserve our natural resources and 
promote our healthy co-existence with nature. My testimony will convey 
the perspectives of my colleagues in the Appalachian Region and across 
the country who share this same devotion.
    Our nation's forests provide much of the clean air and water, 
wildlife habitat, forest products, and recreational opportunities that 
every American enjoys. They also produce over $200 billion in products 
annually, aid in rural economies and provide almost one million direct 
jobs. Unfortunately, forests are facing a dire situation as wildfires 
continue to grow larger and hotter, insect and disease infestations 
spread, and forest health deteriorates. There is an urgent need to 
increase the pace and scale of ecologically-beneficial forest 
management on National Forests and provide incentives for state and 
private land managers to reduce the risk of catastrophic wildfire and 
improve forest health.
    Prior to the COVID-19 pandemic, several global entities--public and 
private--had turned their attention to steep declines in nature that 
risk destabilizing the very systems we depend on for our survival. This 
trend is expected to continue. According to the most recent findings of 
the Inter-governmental Panel on Biodiversity and Ecosystem Services 
(IPBES), \3/4\ of the world's land and \2/3\ of its marine environment 
have been significantly altered by human actions. We have lost half of 
the world's forests, half of coral reefs, 70 percent of wetlands and 
dammed \2/3\ of the world's main rivers. We are witnessing this 
ecological crisis right here at home. It threatens the stability of the 
entire planet and requires bold and urgent action.
    The need for more investment to halt biodiversity loss and address 
climate change has never been greater. The farm bill is a critical part 
of the solution, being the single largest driver of conservation 
investment in the United States. The farm bill provides the opportunity 
to continue to support our national, state and private forests by 
improving existing and developing new policies that would bring them to 
a healthier state. We stand ready to aid you in prioritizing key 
investments impacting conservation and forestry programs as you 
consider the 2023 Farm Bill.
    At the outset, we offer The Nature Conservancy's guiding objectives 
for prioritizing forests in the next farm bill that we hope will align 
with your interests:

   Sustain and grow farm bill programs for private forests and 
        dependent communities and promote watershed-level conservation 
        across relevant Federal agencies.

   Promote more ecologically beneficial forest management 
        policies throughout the farm bill.

   Advance more climate resilience incentives and investments 
        for forests.

   Protect the integrity of bedrock environmental laws that 
        help govern the management of National Forests.

   Ensure just and equitable outcomes in the farm bill also 
        benefit minority foresters, forest landowners and workers, and 
        enable Tribal management and/or co-management of forests 
        alongside Federal agencies.

    In addition, we hope the next farm bill can prioritize providing 
maximum flexibility and access to forestry programs, particularly those 
also funded by the Bipartisan Infrastructure Law (BIL) with high match 
requirements, that create barriers for financially strapped partners 
and local communities needed, to make program implementation 
successful. The following are key forestry programs authorized in the 
2014 and 2018 Farm Bill where TNC has either had direct engagement as 
an implementing partner or is keen to engage should ecologically 
meaningful modifications to programs occur in the next farm bill.
Forest Legacy Program
    The Forest Legacy Program (FLP) is an important conservation 
program that has fostered Federal-state partnerships to facilitate 
protecting more privately owned forest land. By providing economic 
incentives to landowners to keep their forests as forests, FLP is 
encouraging sustainable forest management and supporting strong markets 
for forest products. The program is a critical tool that invests in 
natural infrastructure by conserving forests that sequester carbon 
dioxide and protecting drinking water supplies that reduce the need for 
costly, human-made filtration and treatment systems. According to the 
U.S. Forest Service, 180 million people in over 68,000 communities rely 
on forested lands to capture and filter their drinking water and 
forested lands sequester 14 percent of annual U.S. carbon emissions.
    The Nature Conservancy and our partners have been able to steward 
more private land conservation efforts in several states thanks to FLP-
enabled conservation easements or land purchases. For example, located 
at the southern end of the Appalachians, the Dugdown Corridor spans 
100,000 acres and 50 miles between the Talladega National Forest in 
Alabama and the Sheffield-Paulding Wildlife Management Areas in 
Georgia--a region which contains some of the most biodiverse and 
climate resilient forests in North America, including the last 
remaining vestiges of the globally rare montane longleaf pine 
ecosystem. The Nature Conservancy and the state of Georgia's goal here 
is to acquire two tracts as a part of a larger initiative to protect 
and restore the Dugdown Corridor and increase the amount of publicly 
accessible recreation land in Northwest Georgia. Deliverables of this 
project include protection of 2,351 acres benefitting multiple 
threatened and endangered species including the federally endangered 
gray and Indiana bats and federally threatened fine-lined pocketbook 
mussel; creation of the first and only public recreational land in 
Haralson County; and expanded opportunities to restore the montane 
longleaf ecosystem.
    The 2018 Farm Bill authorized $35 million annually for the FLP and 
also eliminated its permanent authority to receive annual 
appropriations. We respectfully ask the Congress to consider increasing 
the authorization level for FLP in the 2023 Farm Bill while also 
providing maximum flexibility on the program's non-Federal cost-share 
to enable more conservation outcomes and increasingly equitable access 
to utilize the program.
Collaborative Forests Landscape Restoration Program
    Congress created the Collaborative Forest Landscape Restoration 
Program (CFLRP) in 2009 to enhance forest and watershed health, reduce 
risk from catastrophic megafires, and benefit rural economies through 
collaborative, science-based approaches to forest management. In its 
first 10 years, the CFLRP projects generated nearly $2 billion in local 
labor income, supported an average of 5,440 jobs annually, and engaged 
over 400 organizations in local collaboratives. More importantly, it 
has attracted and generated over $450 million in leveraged funding and 
in-kind contributions.
    The 2018 Farm Bill authorized $80 million for CFLRP. This has been 
critical to allow for the program to strategically advance the Forest 
Service's 10 year Wildfire Crisis Strategy and inspire infusion of new 
investments such as those granted in the Bipartisan Infrastructure Law, 
which is now enabling an additional twelve projects in eight states in 
Fiscal Year 2022 to receive CFLRP funding.
    The Nature Conservancy has a long history of partnering with the 
Forest Service and working in collaboratives to implement CFLRP. Across 
the West, CFLRP projects are helping to build wildfire resilience and 
support rural America. From Washington State to Arizona, and from 
California to Colorado, projects have advanced forest and watershed 
health, and making important contributions to reduce risks from 
uncharacteristic wildfire. In Oregon alone, five CFLRP projects--on 
Deschutes National Forest, in Lakeview and the Southern Blues, and two 
recent awards in the Northern Blues and Rogue Basin, have allowed TNC 
to engage deeply in high-priority landscapes to complement the down 
payment on long-term landscape resilience and wildfire risk reduction. 
Similarly, in the Longleaf Pine ecosystem, TNC has been an implementing 
partner on the Osceola National Forest, a CFLRP project funded in 2010. 
After 3 years of restoration work, a study was commissioned to examine 
the economic impact of the CFLRP in the landscape. Within the Osceola 
area, the total economic output for all 3 years was over $3 million 
including multiplier effects. Program expenditures also generated $1.8 
million in salaries and wages over the course of the 3 years within the 
same region of Florida and contributed $459,000 in local, state and 
Federal tax revenues. Such a study could be a model for future project 
evaluation and development of economic metrics. Similarly, also in 
Region 8, in Pisgah National Forest, TNC and partners have successfully 
completed a 10 year effort in the Grandfather Restoration Project by 
increasing prescribed burning and other management practices to more 
than 40,000 acres of the Grandfather Ranger District.
    As the Committee considers the next farm bill, we respectfully 
request CFLRP to remain a priority. We seek a longer-term 
reauthorization as well as expanded authorities of the program to 
address and account for climate resilience, and further strategic 
wildfire resilience investments.
Water Source Protection Program
    Congress took an important step by authorizing a new investment 
through the Water Source Protection Program (WSPP) in the 2018 Farm 
Bill at $10 million annually to encourage partnerships between 
agricultural producers, businesses, cities, and the Forest Service. We 
recognize and appreciate that if fully manifested as intended, these 
partnerships would improve forest health and benefit downstream 
communities, often bringing in significant new investments from non-
Federal partners. Despite widespread interest in WSPP across the 
country, it has not received dedicated funding. As growing populations 
and climate change place additional stress on our forests and 
watersheds, it is critical to invest in programs that support local, 
collaborative solutions to these challenges.
    The Colorado River Basin impacts 36 million people in the West who 
rely on the Colorado River for water, food, recreation and energy, but 
the current 22 year drought in the Colorado River Basin points to a 
future of increasing challenges to forest and watershed resilience and 
uncertain water supplies. Well-managed forests serve as natural 
reservoirs, enhancing drought resilience and water-related outdoor 
recreation and sustaining river base flows in the summer when crops, 
boaters, and fish need water. Given TNC's longstanding commitment to 
restore and conserve the Colorado River, we are eager to utilize the 
authorities of WSPP and see great promise to address watershed-level 
conservation challenges.
    In the next farm bill, we respectfully request a closer examination 
of this program and urge you to consider the following modifications:

   Require restoration plans and activities to be based on 
        ecological principles and the best available science and 
        designed to enhance resilience to climate change.

   Extend program to cover adjacent and nearby non-Federal 
        lands to support an ``all lands'' approach to restoration.

   Establish criteria that the Forest Service should use in 
        prioritizing projects for funding, to include (i) quantifiable 
        benefits to water supply and infrastructure, (ii) demonstrated 
        capacity and success of the partners in designing and 
        implementing ecological restoration projects, (iii) amount of 
        proposed match, and (iv) other factors

   Reduce the required non-Federal match from 50% to 20%, 
        commensurate with similar Forest Service programs, while using 
        the percentage of match as a factor in selecting projects to 
        provide an incentive for greater contributions.

   Increase authorized funding level to address watershed-level 
        conservation challenges.

   Require the agency to submit an implementation plan within 
        180 days of enactment.
Landscape Scale Restoration Program
    The Landscape Scale Restoration (LSR) program supports projects 
that align with the U.S. Forest Service's priorities to reduce the risk 
of uncharacteristically severe wildfires, maintain or improve forest 
and rangeland ecosystem resilience, improve fish and wildlife habitats, 
maintain or improve water quality and watershed function, and mitigate 
invasive species, insect infestation, and diseases.
    The 2018 Farm Bill established a state and private forest 
landscape-scale restoration fund at $20 million annually allowing for 
more projects to be eligible for funding. TNC has a long history of 
implementing the LSR program particularly in Forest Service Regions 8 
and 9. Recently, LSR awarded funding to a `Treesilience' project in 
northern St. Louis County, MO for work on private properties. This is a 
unique geography comprised of 24 municipalities, and one that is 
particularly hard hit by the emerald ash borer. This investment is 
providing much-needed resources to municipalities and homeowners for 
necessary removal and replacement of dead or dying trees that pose 
risks to homes and people, and is supporting planting of new trees in 
neighborhoods with the most need. In Maryland and West Virginia, 
spanning ten counties and in coordination with the Monongahela National 
Forest, the LSR program has enabled TNC and partners to conduct 
ecological departure analysis, innovative ``on-demand'' controlled fire 
and invasive species management. As the Committee considers the next 
farm bill, we respectfully request the annual investment in the program 
to be expanded, particularly to urban environments, while also 
providing maximum flexibility for the program's non-Federal cost-share 
to enable more conservation outcomes.
Other Key Considerations
    Investing in Wildfire Resilience: Congress took a major step toward 
stabilizing the Forest Service and Department of the Interior budgets 
with the 2018 ``fire fix,'' for which we continue to be thankful. We 
continue to urge Congress to ensure the fire fix remains durable and 
comprehensive. An estimated 50 million acres are in critical need of 
wildfire resilience treatments across all forests due to the impacts of 
these challenges.
    The Nature Conservancy has over 60 years of on-the-ground 
experience across the country, working with public and private partners 
to deliver prescribed fire programs as an ecologically based mechanism 
to reduce wildfire risk and improve forest health. Cross-boundary 
funding mechanisms such as the Hazardous Fuels Reduction projects 
authorized by the farm bill support these efforts. A TNC report \1\ 
recommends an investment surge of $5-$6 billion per year over the next 
10 years for the highest priority work of increasing wildfire 
resilience and providing communities with much-needed resources for 
infrastructure and adaptation.
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    \1\ https://www.nature.org/content/dam/tnc/nature/en/documents/
WildfireResilienceFun
ding_TNC_6-30-21.pdf.
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    The next farm bill can advance wildfire resilience through many 
specific actions, including:

   Directing the Secretary of Agriculture to coordinate with 
        the Secretary of the Interior to encourage and expand the use 
        of prescribed fire on land managed by the Forest Service or the 
        Department of the Interior. Inclusion of the bipartisan 
        proposal of the National Prescribed Fire Act can advance this 
        objective.

   Directing the Secretary of Agriculture to establish a pilot 
        program under which the Secretary may enter into a conservation 
        finance agreement with a public or private person, including a 
        for-profit or nonprofit organization, to plan, implement, and 
        monitor a landscape-scale forest restoration project selected 
        by the Secretary. A similar proposal has been incorporated into 
        Sec. 104 of S. 2806 Wildfire Emergency Act.

    Forest Management and Environmental Safeguards: Title VIII of the 
farm bill has shaped forest management policies to address some of the 
challenges that face large forest landscapes. We look forward to 
engaging in a dialogue on finding ways to increase the pace and scale 
of restoration and reducing risks posed by climate change, severe 
megafires, drought, insects and diseases, while also ensuring public 
processes and environmental protections are strengthened.
    Importantly, as the Congress examines the necessary mix of 
incentives and investments for forest management, we seek to ensure 
agencies have sufficient resources and the flexibility to use available 
authorities and more efficient processes while maintaining 
environmental safeguards. These will be essential conditions for 
success, as will be collaboration among Federal and state government 
agencies, Tribes, Indigenous peoples, scientific experts and other 
relevant stakeholders. The Nature Conservancy has demonstrated that 
collaborative planning efforts can achieve efficiencies of scale for 
management implementation, such as the recent authorization of over 
60,000 acres of ecologically-sound forest treatment across the South 
Zone of the Cherokee National Forest. Key actions in this respect would 
also need to include ensuring every Forest Service region has adequate 
resources and capacity dedicated to comply with processes enshrined in 
bedrock environmental laws such as the Endangered Species Act and the 
National Environmental Policy Act (NEPA), and access to a minimum of 
two NEPA strike teams for each Forest Service region.
    Natural Climate Solutions: Large-scale global reforestation goals 
have been proposed to help mitigate climate change and provide other 
ecosystem services. To accelerate reforestation, the entire 
``pipeline'' for tree planting (i.e., from seed collection all the way 
to sapling monitoring) need to be scaled up, including seed collection 
and storage, tree improvement research, nursery production, 
outplanting, and post-planting treatment and monitoring. To illustrate 
the requirements for increasing reforestation capacity in the U.S., 
scientists at The Nature Conservancy and other experts have produced a 
new report \2\ identifying 64 million acres of natural and agricultural 
lands, nearly half of the total reforestation opportunity. Accounting 
for different planting densities by region, it would require 30 billion 
trees to reforest these lands. This equates to 1.7 billion more tree 
seedlings produced each year for this land to be reforested by 2040.
---------------------------------------------------------------------------
    \2\ https://www.nature.org/en-us/newsroom/challenges-reforestation-
pipeline/.
---------------------------------------------------------------------------
    To this end, we request Congress to consider supporting increased 
public- and private-sector capacity for seed collection and storage, 
tree improvement research, tree nursery expansion, workforce 
development, and improvements in pre- and post-planting practices. We 
recommend the following priorities:

   Incentivize/guarantee low-interest or forgivable loans in 
        addition to long-term contracts to expand nursery expansion.

   Support more reforestation friendly outcomes from programs 
        such as Environmental Quality Incentives Program (EQIP) and 
        Conservation Reserve Program (CRP).

   Reduce the barriers for rural landowners to participate in 
        voluntary markets for forest carbon such as those proposed in 
        provisions of S. 1107 Rural Forest Markets Act.

   Address the national shortage of seedlings needed for 
        reforestation efforts such as those proposed in provisions of 
        H.R. 2562 the Solving Our Shortages for Seedlings Act.

   Support funding for the Tree Assistance Program (TAP) and 
        investing in more monitoring and research assistance.

    As climate resilience is further strengthened in farm bill 
programs, we respectfully request the Congress to ensure that such 
actions also provide ecological benefits, as originally intended, and 
programs such as Healthy Forests Reserve Program (HFRP) which helps 
landowners restore, enhance and protect forestland resources on private 
lands through easements and financial assistance are expanded for their 
community benefits and incentivized for climate resilience.
    Watershed Scale Restoration: Conservation programs and other 
policies in the farm bill are key drivers of water use and management 
decisions and, therefore, a primary source of solutions to our shared 
water challenges. The farm bill has the unique opportunity to enable 
forest restoration and fire protection efforts to improve the 
hydrologic function of headwater systems and strategically connect 
improvements with downstream flow and riparian restoration efforts.
    One important mechanism for enabling watershed scale prioritization 
and implementation has been the Statewide Forest Resource Assessments 
and Strategies. These plans are important mechanisms for supporting 
state decision-making regarding forest management, and they promote 
collaborative stakeholder engagement in the process. In recent years, 
TNC has partnered with different states to assist with the scientific 
data and priorities identified by stakeholders in these strategies.
    Based on our science expertise and field experiences, we request 
the Congress to consider innovative mechanisms to advance watershed 
scale restoration which strategically advance forest health efforts 
including the following recommendations:

   Enable farm bill programs such as the Regional Conservation 
        Partnership Program (RCPP) and EQIP to advance forest 
        restoration to benefit downstream flow and riparian 
        restoration.

   Require strategic integration of Agricultural Conservation 
        Easement Program (ACEP) and restoration programs such as 
        Conservation Stewardship Program (CSP) and CRP, alongside EQIP 
        and RCPP to prioritize funding to landowners that both maintain 
        agricultural and/or forest production and increase drought 
        resilience by implementing appropriate activities, projects, 
        and use of innovative measurement technologies.

   Authorize funding for the Watershed Condition Framework 
        (WCF) to provide a consistent, comparable, and credible process 
        for improving the health of watersheds on National Forests and 
        Grasslands.

   Alleviate match requirements and implementation barriers to 
        programs in the Bipartisan Infrastructure Law (BIL) to further 
        forest health and watershed restoration. Some examples of 
        implementation barriers include BIL funding requiring its own 
        agreements and a lack of clarity within the Forest Service 
        regarding eligibility for BIL funding for waiver requests.

    Community and Urban Forests: Given their ability to reduce the 
urban heat island effect and energy demand, retain stormwater, and 
absorb and store greenhouse gases while providing habitat for 
biodiversity, urban forests can help urban environments and their 
residents address the challenges of rising energy costs, water 
shortages and climate change.
    The Nature Conservancy has deep experience in delivering urban 
forest conservation together with the Forest Service and partners in 
several parts of the country--from New York City to Orlando and beyond, 
we are advancing urban forest conservation by aiding with technical and 
science expertise and delivering nature-based solutions to ensure a 
resilient and equitable tree canopy where a majority of Americans live.
    In the next farm bill, we respectfully request the Congress to 
consider ways to drive more support and investment for urban and 
community forests including:

   Permanently authorizing the National Urban Community 
        Forestry Advisory Council.

   Establishing provisions for private homeowner assistance 
        (technical and financial) for conservation actions taken to 
        enhance tree canopy on private property, prioritizing mature 
        tree maintenance activities and ``underserved'' urban 
        communities.

   Investing in a green infrastructure tree planting and 
        maintenance program for communities to improve air and water 
        quality; reduce storm water flooding, water treatment costs, 
        and consumer energy costs; and enhance property values, public 
        safety, and quality of life.

   Expanding key farm bill programs such as the Landscape Scale 
        Restoration to include urban environments.

   Amending the Cooperative Forestry Assistance Act and Healthy 
        Forest Restoration Act to include urban landscapes.

    Forest Products and Markets: The 2018 Farm Bill authorized a 
research, education and technical assistance program for expanding wood 
energy and wood products markets. The Nature Conservancy generally 
supports strategies to develop forest products and markets. Such 
strategies should be designed to restore forests to a more natural 
condition, correcting the harmful cumulative impacts of past fire 
suppression and ecologically harmful logging practices, and to enhance 
resilience to a changing climate.
    In certain situations, ecological thinning can help to facilitate 
the responsible use of prescribed and managed fire as part of efforts 
to restore fire to its proper role in fire-adapted forest ecosystems. 
In these places, facilitating development of, and fostering local 
markets and utilization strategies for, new value-added products from 
low-value material (small diameter timber and woody biomass) removed 
from forests during restoration projects may be necessary. Programs 
like the Wood for Life partnership in the western U.S. (which delivers 
unmerchantable logs to Indigenous residents for firewood) offer another 
avenue to support such utilization.
    As the Congress turns its attention to doing more for wood energy 
and the wood products markets, we respectfully request that all such 
efforts are conducted within proper environmental sideboards that 
ensure that the overall outcome is ecologically beneficial. 
Importantly, the lack of, or limitations within existing forest product 
markets should not serve to discourage the Forest Service from engaging 
in critical forest management activities to build resilience.
    Addressing deforestation and curbing importation of illegally 
harvested commodities: The farm bill has made meaningful contributions 
to addressing the importation of illegally harvested timber. In 2008, 
thanks to the farm bill, the United States--the world's largest 
consumer of forest products--became the first country to ban 
trafficking of products containing illegally sourced wood. The Lacey 
Act Amendments of 2008 were adopted with bipartisan support in Congress 
and have contributed to reduced imports of illegally sourced wood 
products by 32-44%. The amendments have demonstrated their potential 
for impact, yet significant delays in full implementation and sporadic 
enforcement continue to limit their effectiveness. Congressional 
oversight is vital to overcome these delays. We respectfully request 
the House Agriculture Committee to ensure that USDA implements the 
requirements of this law, phasing in enforcement of the import 
declaration requirement for key product categories including furniture, 
pulp, and paper by the end of this year.
    Global forests and other important biomes--such as the tropical 
rain forests of the Amazon, Congo Basin, Southeast Asia and the 
Pacific, and Central America and the Cerrado savanna and Pantanal 
wetlands of Brazil--are critical for human well-being and livelihoods, 
biodiversity, and carbon sequestration. A comprehensive U.S. approach 
backed by programs, policies, funding, and diplomatic engagement is 
needed to ensure the long-term conservation of these ecosystems. This 
includes specific initiatives to eliminate commodity-driven 
deforestation, forest degradation, and habitat conversion; halt bad 
actors from engaging in illegal timber extraction and illegal 
deforestation; promote sustainable livelihoods and the rights of 
Indigenous peoples and local communities; and protect and restore 
forests and other natural landscapes.
    The next farm bill provides opportunities to curb global 
deforestation by leveling the playing field for American ranchers, 
producers and other businesses competing in the global economy, and 
through specific bipartisan proposals that directly address commodity-
driven deforestation.
    As the Congress considers its next farm bill, we respectfully ask 
that bipartisan proposals such as the FOREST Act (Fostering Overseas 
Rule of Law and Environmentally Sound Trade Act) are incorporated. The 
FOREST Act would establish a new mechanism to remove illegal 
deforestation from agricultural commodity supply chains by creating a 
risk-based due diligence and reporting framework for key imported 
products; establish incentives for U.S. businesses and partner 
countries to reduce deforestation; and update financial crime statutes 
to apply to criminal enterprises engaged in illegal deforestation.
    In conclusion, we appreciate your leadership in examining the 
status of forestry programs authorized by the farm bill and providing 
us with an opportunity to share recommendations to strengthen and scale 
up efforts to reduce challenges such as catastrophic megafires, pests 
and drought--all impacts exacerbated by climate change--in support of 
our forests, as well as the local and Indigenous communities and 
economies that rely on them to thrive. We support substantial 
reinvestments in programs that increase forest resilience, specifically 
those that support collaboratively developed, science-based, climate-
informed and ecologically focused activities across all forests, and 
help Congress advance a zero-global deforestation policy agenda. Backed 
by significant investment, these policies would be an ambitious and 
important down payment to ensure the future of forests and the role 
they play in achieving U.S. farm and food policy goals. We look forward 
to working with you and your staff to advance these aspirations.

    The Chair. Thank you very much, Ms. Palmer.
    Mr. Schultz, please begin when you are ready. You have 5 
minutes.
    Mr. Schultz, you are muted.

          STATEMENT OF TOM SCHULTZ, VICE PRESIDENT OF 
     RESOURCES AND GOVERNMENT AFFAIRS, IDAHO FOREST GROUP; 
              PRESIDENT, FEDERAL FOREST RESOURCE 
                  COALITION, COEUR D'ALENE, ID

    Mr. Schultz. Thanks. Chair Spanberger, Ranking Member 
LaMalfa, and Members of the Committee, I am Tom Schultz, and I 
am here today in my capacity as President of the Federal Forest 
Resource Coalition, a national nonprofit representing 
purchasers of Forest Service timber in 37 states. Our members 
employ over 390,000 people and provide payroll in excess of $24 
billion annually.
    The most significant forest management reforms adopted in 
the last decade have been enacted through the 2014 and 2018 
Farm Bills. I am here today to share my experiences with these 
programs and suggest improvements to address the forest health 
crisis afflicting our National Forests.
    Among other things, the 2014 and 2018 Farm Bills expanded 
Good Neighbor Authority, made stewardship contracting 
permanent, created streamlined authorities for forest health 
and fuels reduction projects on National Forests. I want to 
focus on these authorities with recommendations on how to 
improve them.
    First is Good Neighbor Authority, or GNA. It has become a 
crucial tool to improve forest health in the National Forests. 
Since 2014, the farm bill expanded it to all 50 states. The 
number of acres treated annually under this program has grown 
by more than 20-fold and is now averaging more than 60,000 
acres per year. In Idaho alone, we have treated more than 8,200 
acres of Forest Service lands using GNA authorities. The 
program is a true state-Federal-local partnership with the 
Forest Service and the NRCS working seamlessly with private 
landowners, State Foresters, industry, and others to implement 
projects ranging from forest thinning to commercial timber 
sales to the creation of fuel and firebreaks. By leveraging the 
capacity of state forestry agencies, GNA allows us to practice 
what we call in Idaho no-boundaries forestry.
    As of 2021, 20 timber sales have been awarded under the GNA 
program in Idaho treating the 8,200 acres I mentioned, and 
generating over 70 million board feet of timber. Additionally, 
over 60 restoration service contracts at a total value of $3.5 
million have been awarded to the private-sector. The Idaho GNA 
program is a true success story, having nearly quadrupled 
volume outputs in just 5 short years since it began. It is now 
roughly ten percent of the annual timber program sold from 
partnering National Forests.
    The 2023 Farm Bill is an opportunity to make several key 
reforms, including allowing states, counties, and Tribes to use 
revenue generated by the GNA projects on non-Federal lands and 
to allow revenue from existing projects to be used for this 
work as well. By allowing new road construction under GNA, this 
program could retire older, poorly placed roads and replace 
them with better engineered roads to help reduce water quality 
impacts. Making Good Neighbor Authority permanent with these 
reforms will provide a powerful incentive to partners to 
continue investing in the program.
    The 2014 Farm Bill also made stewardship contracting 
authority permanent. Stewardship contracting has been a vital 
authority line of the Forest Service to implement forest 
restoration and management projects and now accounts for about 
25 percent of the overall Forest Service timber sale volume. In 
some regions that has grown to exceed 50 percent.
    One thing we have learned is that the loss of forest 
products facilities makes forest management far more difficult 
and expensive. The Forest Service has struggled mightily for 
decades to attract new forest industries to Arizona, where 
millions of acres of fire-adapted pine forest urgently need 
thinning. Further loss of building infrastructure could put up 
to 35 million additional acres of National Forest at risk of 
the same fate. We urge you to amend the authority to make 
retention of existing forest products facilities one of the key 
objectives of the program, as well as allowing receipts from 
stewardship projects to ensure adequate reforestation to the KV 
Fund (Knutson-Vandenberg Trust Fund).
    The 2014 and 2018 Farm Bills gave the Forest Service new 
authority to conduct insect and disease treatments and 
hazardous fuel production work on up to 3,000 acres of National 
Forest System lands at a time under section 602. These 
authorities have proven effective in reducing hazardous fuels. 
Section 602 projects have performed well, and they have 
encountered wildfires. In every case where the Forest Service 
has completed all the steps of the fuel reduction process, the 
treatments have reduced flame length, fire intensity, and rate 
of spread.
    However, the scope of the program is too limited. The 
Committee should move to substantially increase the number of 
acres covered by section 602 categorical exclusions. This 
section does not open a single new acre of land for timber 
harvest and requires compliance with forest plans. It allows 
the Forest Service to quickly approve needed treatments after a 
brief review rather than engaging in lengthy or NEPA processes 
that can delay projects for as much as 5 years or more.
    Our written testimony includes further recommendations for 
your consideration. FFRC has always appreciated the bipartisan, 
pragmatic approach to forest management that this Committee has 
demonstrated. With nearly half of the National Forest System 
off limits to management, we urge you to continue to build on 
the authorities you have already enacted to make sure that we 
can manage the rest of these critical lands sustainably. Thank 
you.
    [The prepared statement of Mr. Schultz follows:]

  Prepared Statement of Tom Schultz, Vice President of Resources and 
   Government Affairs, Idaho Forest Group; President, Federal Forest 
                 Resource Coalition, Coeur d'Alene, ID
    [Chair] Spanberger, Ranking Member LaMalfa, on behalf of the 
Federal Forest Resource Coalition, I appreciate the opportunity to 
testify before you today. My name is Tom Schultz and I am Vice 
President of Resources and Government Affairs at Idaho Forest Group 
(IFG), a family-owned business operating five sawmills in Idaho, as 
well as a new mill we are bringing online in rural Mississippi. I am 
here today as President of the Federal Forest Resource Coalition, which 
represents purchasers of Federal timber in 37 states, with over 650 
member companies and affiliated associations, collectively representing 
over 390,000 employees.
    By way of background, prior to joining IFG, I served in leadership 
roles for 2 decades at state land management agencies in both Montana 
and Idaho, roles I took on following a career in the U.S. Air Force. 
This diverse background has given me a unique perspective on the 
challenges facing the U.S. Forest Service.
    FFRC is extremely grateful for the leadership this Subcommittee has 
shown on National Forest Management issues in the last several farm 
bills. Since 2014, the farm bill has advanced some of the most 
effective and important policy changes that have aided Forest Service 
efforts to begin reversing the forest health and wildfire crisis that 
is challenging the sustainability of our Federal Forests.
    The 2014 and 2018 Farm Bills saw the expansion of Good Neighbor 
Authority, expansion of Designation by Description and Designation by 
Prescription, permanent reauthorization of Stewardship End-Results 
Contracting, and enactment of streamlined authorities to treat forest 
insects, disease, and reduce hazardous fuel loads on National Forests. 
The next bill, scheduled for 2023, provides an opportunity to build on 
these successes to scale up management to meet the significant 
challenges facing the health and sustainability of the National Forest 
System.
    Good Neighbor Reform: The 2014 Farm Bill expanded Good Neighbor 
Authority (GNA) to all 50 states, following years of pilot authorities 
which allowed small scale work in several states. The 2018 Farm bill 
expanded the eligibility of GNA to counties and Tribes. The program has 
been a resounding success and we urge the Subcommittee to build upon it 
in the 2023 Farm Bill. Since expanding the authority in the 2014 Bill, 
the number of acres treated annually under this program has grown by 
more than twenty-fold and is averaging more than 60,000 acres each year 
for the last 4 years.
    Since the 2014 Bill, three dozen states have begun work on over 130 
GNA projects. In addition to improving forest health, GNA has helped 
increase wood supply to bring additional needed forest products to 
market. According to the Congressional Research Service, the amount of 
Forest Service timber sold under GNAs has increased from 14.4 million 
board feet in FY2016 to 182.6 million board feet in FY 2019. That's 
enough lumber to frame about 11,000 single family homes. As many 
Americans struggle with finding affordable housing, this program is 
helping meet market needs.
    With states investing substantial sums of money to support 
implementation of Good Neighbor Authority (GNA) projects, including 
cross-boundary projects, treatment of revenue from GNA projects must 
reflect this reality. However, the 2018 Farm Bill limited the ability 
of states to utilize GNA project receipts on non-Federal lands--despite 
the clear direction that these projects be conducted to improve forest 
health on both Federal and Non-Federal lands. We note that this 
recommendation is consistent with those provided by the National 
Association of State Foresters.
    Action Requested: Amend 16 U.S. Code  2113b(2)(c) to allow states, 
counties, and Tribes to utilize revenues generated on non-Federal 
lands, pursuant to conditions specified in Good Neighbor Agreements, 
and direct the Forest Service to update existing Good Neighbor Master 
Agreements and Project Agreements to use revenue from existing projects 
for this work.
    We also recommend that Congress consider amendments to the GNA 
authority to allow new road construction and reconstruction under GNA 
contracts on a limited basis. Restoration work on the National Forest 
System is not limited the need to reduce hazardous fuels; in many 
cases, older roads, placed without adequate consideration of water 
quality impacts, should be retired and replaced by better engineered, 
correctly placed roads that address water quality issues as well as 
roads that are just worn out and need reconstruction such as crushed 
aggregate and vegetation removal for safe and efficient use.
    As you move to reauthorize these programs, we urge you to make all 
of the above changes and extend the authority for this program to the 
Bureau of Land Management (BLM) as well. The 2014 and 2018 Bills 
extended several forest management authorities to the BLM, and this 
Committee should build upon that precedent in the 2023 bill.
    Stewardship Contracting Amendments: The 2014 Farm Bill made 
Stewardship Contracting authority permanent, responding to a request 
from then-Chief Tom Tidwell. Stewardship Contracting has been a vital 
authority allowing the Forest Service to move implement forest 
restoration and management projects. Stewardship Contracts now account 
for about 25 percent of overall Forest Service timber sale volume, and 
in some regions, this total has grown to exceed 50 percent.
    As the use of this contracting tool has expanded, it has become 
clear that reforms are needed to ensure that the program doesn't result 
in unintended consequences, including inadequate resources for 
reforestation. Moreover, as the Forest Service struggles to expand its 
treatment of at-risk acres of National Forest System lands, it's become 
clear that retention of existing forest products infrastructure--
loggers, trucking capacity, and wood products facilities--is critical 
to achieving the paradigm shift the Forest Service has called for.
    In the last 3 years, we've seen the closure of five sawmills 
located near millions of acres of fire prone National Forests, 
including the IFG mill at St. Regis, Montana. All these closures were 
precipitated--at least in part--due to insufficient wood supply from 
nearby National Forests to keep these mills running. Loss of milling 
infrastructure is a major factor behind what the Forest Service calls 
its ``low-value material'' problem.
    Our initial analysis of Forest Service Forest Inventory & Analysis 
data show that there are substantial quantities of standing sawtimber 
on National Forest System lands across the United States. Using what 
are known as Integrated Resource Timber Contracts (IRTC's), the Forest 
Service can generate additional revenues to expand treatments--
including non-commercial thinning, prescribed fire, and improved fish 
passage--while supporting family-wage, year-round jobs in forest 
management and wood products industries.
    By contrast, if nearby mills close, experience has taught us that 
attracting new investment--particularly where there are few non-Federal 
forests to support a forest products industry--can be extremely 
difficult. Following the loss of most sawmilling capacity in Arizona, 
the Forest Service has struggled for over 12 years to attract capable, 
well capitalized industry to help it accomplish forest management work 
that will protect watersheds and communities from catastrophic fire.
    Action Requested: Amend 16 U.S. Code  6591c to strike Section 
(e)(B) and add clarifying language that requires Deposits in the 
Knutson-Vandenberg Fund (authorized by 16 U.S.C.  576) for Stewardship 
End-Results Contracts that include merchantable timber.
    Further, amend the purposes of Stewardship End-Results Contracting 
Projects (16 U.S. [Code]  6591(c)) to add an eighth ``land management 
goal'' of retaining and expanding existing forest products 
infrastructure, including logging capacity and wood consuming 
facilities, in proximity to the National Forests.
    Improving the Effectiveness of Farm Bill Insect and Disease, 
Hazardous Fuels Reduction Authorities: Beginning in the 2014 Farm Bill, 
Congress provided the Forest Service with the authority to 
``categorically exclude'' insect and disease treatments on up to 3,000 
acres of National Forest System lands. The 2018 Farm Bill expanded this 
authority to allow for hazardous fuels reduction work on acres 
designated using this authority.
    These authorities have proven effective in expediting needed forest 
management work. However, the size of the areas allowed to be treated 
is too small to effectively prevent catastrophic fires. The Caldor Fire 
in California provided numerous examples of effective fuels treatments 
using the farm bill CE. Within that fire's 221,000 acre burned 
footprint, there were at least five areas treated using the Insect & 
Disease and hazardous fuels mitigation CE's. In every case, where the 
Forest Service had completed all the steps of the fuels reduction 
process, the treatments reduced flame length, fire intensity, and rate 
of spread.
    However, the treatments were not conducted on enough acres to 
prevent the fire from being the first in history to burn over the crest 
of the Sierra Nevada mountains. Assuming all five categorical 
exclusions treated the 3,000 acre maximum, the treatments on the Caldor 
fire area amounted to 15,000 acres, or about seven percent of the fire 
area. If the Forest Service had been able to treat 15,000 acres under 
each CE, fire intensity and the damage resulting from it could have 
been reduced on fully \1/3\ of the fire and may have even allowed 
firefighters to control the fire sooner.
    It is critical to remember that the Categorical Exclusions provided 
to the Forest Service through the last two farm bills do not open a 
single new acre of land to timber harvest. Use of all Categorical 
Exclusions requires compliance with existing Forest Plans, including 
land allocations like designated Wilderness Areas, Inventoried Roadless 
Areas, and other areas where removal of vegetation is prohibited. These 
CE's merely allow the Forest Service to quickly approve needed 
treatments after a brief review, rather than engaging in lengthier NEPA 
processes that have delayed projects as small as 1,600 acres for as 
much as 5 years or more.
    Requested Action: Amend 16 U.S. Code  6591b to increase the number 
of acres which can be treated for fuels reduction and pest treatment 
from 3,000 to 15,000 acres.
    Eliminate Unnecessary Restrictions on Infrastructure Spending: The 
Infrastructure Investments & Jobs Act (IIJA, Public Law 117-51) 
provided unprecedented investments over the next 5 years for a wide 
range of forest management actions on National Forest System lands. In 
effect, this bill both authorized and appropriated funds for several 
new programs that impact all operations of the National Forest System, 
including those created from outside the Public Domain. That places 
these programs firmly within the jurisdiction of the Agriculture 
Committee, and we'd urge you to carefully review them as the 2023 Farm 
Bill approaches.
    Unfortunately, Congress chose to insert language limiting the 
application of these funds in ways that limits their effectiveness. For 
instance, the bill provided $500 million over 5 years for ``mechanical 
thinning and timber harvesting'' and ``pre-commercial thinning in young 
growth stands.'' However, each of these actions is limited with 
extraneous or redundant restrictions, including a limitation on 
precommercial thinning to include only those projects that produce 
``wildlife benefits to provide subsistence resources.''
    This requirement could be construed to limit the application of 
these new funds to only those National Forest System lands where a 
recognized Tribal government has valid subsistence rights, leaving 
large portions of the National Forest System ineligible for this 
important work.
    Requested Action: Amend IIJA authorities to eliminate duplicative, 
unnecessary, or unhelpful limitations on management.
    Streamline National Forest Management: Each National Forest is 
governed by a legally binding Forest Plan, developed through a 
collaborative process with ample opportunities for public involvement. 
Each Forest Plan designates some acres of National Forests as being 
``suited for timber production,'' while also recommending areas for 
more restrictive land uses, like wilderness designations.
    In practice, these Forest Plans take too long to develop, and 
frequently, they wind up producing binding restrictions on land 
management, while land management goals--like early seral habitat--are 
both difficult to achieve and are rarely monitored to determine whether 
they are attained. When the Forest Service proposes management 
actions--such as creation of young forests or thinning fire prone 
stands--the agency must begin entirely new NEPA processes that make 
fleeting--if any--reference to the underlying Forest Plan.
    The result is both an overly long planning process, and project 
level analysis that is too dense and voluminous to be of any use to 
anyone except experts. While the quantity of information required to 
move forward with a management project is impressive, the quality and 
accessibility to the public, leaves much to be desired. Moreover, 
conflicting court precedents, such as the disastrous Cottonwood case, 
have left in legal limbo whether Forest Plans are ``ongoing actions'' 
under the law. This has left the Forest Service vulnerable to frivolous 
lawsuits that frequently block or delay needed management projects.
    By one estimate, injunctions based on the erroneous Cottonwood 
precedent have stalled over 350 Million Board Feet of timber in the 
Forest Service Northern Region alone, enough timber to frame over 
29,000 single family homes. Congress stepped in and provided a partial 
fix to this problem in the 2018 Omnibus Appropriations bill. The 2023 
Farm Bill should be a vehicle to complete this work.
    Requested Action: Clarify that Forest Plans are not ``ongoing 
actions'' for the purposes of Federal law and make clear that 
consultation under the Endangered Species Act Section 7 is not required 
at the plan level. Second, Congress should, through amendments to the 
National Forest Management Act, clarify that projects conducted on 
acres designated as suited for timber production should be subjected to 
reduced analytical requirements under other statutes. Planning for an 
accounting for ``sensitive'' resources on the National Forest System 
must grapple with the fact that about half the acres are in restricted 
land uses and will likely never see management.
    Conclusion: FFRC appreciates the work this Committee has done to 
provide the Forest Service with streamlined authorities to accomplish 
needed work on the National Forests. As we've seen, the only limitation 
with these authorities is that they haven't gone far enough, fast 
enough. The forest health crisis on our National Forests threatens not 
only the sustainability of the forest industry that depends on those 
forests, but millions of Americans who need them for clean air, clean 
water, and places to recreate. The forest industry is a tool to help 
achieve management objectives on our National Forests--ranging from 
hazardous fuels reduction to the creation and maintenance of habitat 
for multiple wildlife species.
    By taking the steps outlined above, this Committee can help arrest 
the declines in forest health we've been witnessing for the last 30 
years and put our forests on a better path. We look forward to working 
with the Committee and the other stakeholders on today's panel to 
achieve these goals.

    The Chair. Thank you very much to our witnesses for your 
testimony.
    I see two of our colleagues on camera, and so I would ask 
Ms. Schrier or Mr. Johnson if you would consider taking the 
gavel as I need to no longer chair this hearing. My apologies 
to the witnesses. Would either of you, in order to proceed with 
questions, be willing to take the gavel for the remainder of 
our time or for some portion thereof?
    Mr. Johnson. Ms. Spanberger, I would of course defer to Ms. 
Schrier, but I am making my way down to third floor now and 
could, at least on a short-term basis [inaudible] or others.
    The Chair. Thank you very much, Mr. Johnson.
    So Ms. Schrier, I will recognize you first for questions, 
and then Mr. Johnson will take over chairing the Committee as 
soon as he is here. My apologies to the witnesses. I do want to 
thank you for your testimony, both given and written. And I 
have a meeting with the Speaker about my legislation, which is 
why I must excuse myself, but I am very grateful for your time. 
And I will leave you in good hands with Mr. Johnson.
    Ms. Schrier, you have 5 minutes.
    Ms. Schrier. Thank you, Madam Chair.
    Earlier this morning I spoke with Chief Moore about 
programs impacting forests on Federal land. And I want to turn 
my attention now to private lands and private forests now. 
There are over 620,000 acres of privately owned forest lands in 
my district and over 9 million acres in Washington State. 
Private forests are often sustainably managed to provide clean 
air, clean water, and wildlife habitat. They also provide a 
steady renewable supply of wood, which supports rural markets 
and jobs within my district. They often also use proper forest 
management practices, particularly for brush and tree thinning 
in order to help protect against wildfires. And they do it 
quite successfully.
    Mr. Reed, as you know, timely and appropriate brush removal 
and tree thinning that reduces wildfire risk and gives trees 
and wildlife some space to grow and flourish is critical in our 
home state. Could you speak a bit more about Green Diamond's 
expertise in forest management here, and what are the different 
benefits that these practices provide?
    Mr. Reed. Yes, thank you for the question, Congresswoman. 
It is true that the interests of private forest landowners are 
mostly in healthy forests, and that has obviously an impact on 
our core business but also many secondary positive effects of 
clean water and clean air and habitat and then not 
incidentally, significant reduction in wildfire risk. So we 
manage our forests with that in mind. It is not inexpensive. 
And we consider the treatment of forests to be investments in 
the future health and longevity of those forests and its 
resilience against the natural pests and fires and whatnot.
    It is not a silver bullet, but it does work. And we had the 
experience--as I mentioned before, we had a significant 
wildfire cross into us in Oregon, similar forest type to your 
district. And where we had engaged in active thinning, removing 
stems either through commercial harvest or a pre-commercial 
harvest, we saw fire activity significantly change. We watched 
it across the landscape where we were a neighbor to the Forest 
Service, which, for any number of reasons, I have a lot of 
appreciation for the challenges the Forest Service had. They 
had not done any thinning, and the trees were completely wiped 
out. When it hit our ground, we still lost a lot of trees, but 
the fire behavior changed. That gave us an opportunity to 
address the forest.
    So I feel very confident that the forest management 
activities that private forest owners engage in, again, it is 
not a panacea, it won't solve everything, but it certainly----
    Ms. Schrier. Thank you for that stewardship. And that 
example is exactly why we have put so many resources into the 
Forest Service and trying to have year-round jobs that will 
manage our public lands as well.
    Can I just quickly get your perspective on the wood 
products industry? We heard earlier about using every part of 
trees and how every part has value. And if you could talk a 
little bit about what that means for rural economies and forest 
health and for forest landowners, and maybe the role of small-
diameter mills in that ecosystem.
    Mr. Reed. Yes, there is no question that those small-
diameter trees provide a much more significant economic 
challenge than more valuable larger trees. And when you are 
operating on 100 year timescale like we are, though, you have 
to figure out how to address all of the issues in the forest. 
And sometimes the issue is too many small trees. And I think 
there are lots of programs that can be implemented to help 
promote the use of those small-diameter materials, but 
particularly in certain areas where we have lost infrastructure 
that processes it and in areas where you have to think about a 
100 mile haul for this type of small, low-value wood with $5, 
$6, $7 diesel prices, it is really tough. And in many cases, it 
is simply not economic even for a commercial owner to treat 
forests without it being a cost. So it is a challenge. There is 
no question about it. We are able to do it because we consider 
it an investment in our long-term future, but it is not a 
moneymaker.
    Ms. Schrier. Understandable. That 100 mile haul is 
something I hear about frequently in the district, and it is 
why I am looking to bring a small-diameter mill to the 8th 
District. So thank you very much, and I yield back.
    Mr. Johnson [presiding.] Thank you very much, Ms. Schrier. 
And I will recognize myself for 5 minutes.
    And my question will be for Mr. Schultz. I just think, sir, 
about if we are really going to treat these millions of acres 
of both Federal land and non-Federal land as it is called for 
in the 10 year plan, how are we going to get that done? It 
seems to me, sir, that you simply can't get that done without 
commercial partners and without infrastructure like sawmills to 
be able to do something with those forest products. Let me give 
you an opportunity, sir. To what extent am I wrong about that? 
And if I am right, give us more of a sense of why.
    Mr. Schultz. Sure. Thank you, Mr. Chairman. So you are 
absolutely correct. One of the things to think about, you need 
to have that milling infrastructure on the landscape, so it is 
critical that we retain that infrastructure. It is not just the 
sawmills but it is the logging and hauling workforce that also 
accompanies that. So if we just focus on small-diameter wood, 
which I am not suggesting anybody is saying that, but that is 
problematic, that that cannot sustain the industry unto itself 
and sustain all of that infrastructure. So you need to be able 
to partner with the mills. The mills need to be healthy. You 
need to have a healthy logging workforce and a hauling 
workforce as well. So those are all critical to being able to 
manage the National Forests.
    Other partners that have been discussed previously, it is 
the states. I am convinced that the Forest Service alone, as 
you have heard a lot of their challenges on hiring individuals, 
cannot get the work done alone without states, without NGOs, 
and without the industry, so we do need partnerships across--
you heard Ms. Humphries talk about the Wild Turkey Federation, 
and they are a tremendous partner with the Forest Service in 
terms of the work that they do. So anyhow, we do need 
partnerships, but you cannot lose the infrastructure that 
exists, both the mills and the logging and hauling workforce. 
It is absolutely critical.
    Mr. Johnson. Mr. Reed, I will give you an opportunity to 
feed into the conversation as well.
    Mr. Reed. Sure, no, I think that Mr. Schultz covered a lot 
of the key points. I would say that private forest land owners 
are happy to work in partnership with public forest landowners 
simply from a risk mitigation point of view. And while the core 
of our business is not harvesting on Federal timber land, we 
recognize that we have to be good neighbors to them, too. And 
if we want to mitigate the risk of fire or disease onto our own 
ground, we have to be willing to engage. And, as I said, I am 
appreciative of Chief Moore's willingness to engage with 
private-sector partners to try to achieve some of the goals 
that he is trying to try to get to, that we are all trying to 
get to.
    Mr. Johnson. Yes, very well said. And to tie this up, I 
would just note that we know that there are some policies that 
make it more difficult to manage the forest, and a managed 
forest is a healthy forest. And when our policies cause certain 
pieces of these infrastructure--you talked about human 
infrastructure, that is a big one; sawmills, that is a big one. 
When these pieces of infrastructure decay or erode or go away, 
it is unbelievably difficult and in some cases near impossible 
to build them back up. And I think that is why we want to make 
sure that when we talk about the sustainability of the forest, 
and of course we should, we want to understand that part of 
that sustainability is keeping that infrastructure intact.
    With that, unless there are any other Members who seek to 
be recognized, I want to thank our panelists. They have done an 
excellent job informing the Committee's work. And of course, I 
also want to thank Chair Spanberger for her leadership and 
pulling this together, and for her ill-advisedly trusting me 
with the gavel for at least a short period of time.
    With that, under the Rules of the Committee, the record of 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from the witnesses to any question posed by a Member.
    And unless there is anything further, this hearing of the 
Subcommittee on Conservation and Forestry is adjourned.
    [Whereupon, at 1:25 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Supplementary Material Submitted by Randy Moore, Chief, U.S. Forest 
                Service, U.S. Department of Agriculture
Insert
          Mr. Thompson. . . .
          So my first quick question was what is the status of 
        vacancies or do we have all the qualified silviculturists in 
        the system, or how many vacancies currently exist that we need 
        to be filling for folks who are actually qualified as 
        silviculturists?
          Mr. Moore. Yes, I don't have a number for the actual 
        silviculture position. I have numbers generally across the 
        agency. But, Chris, as the National Forest System's Deputy 
        Chief, do we have information?
          Mr. French. We do. And we can follow up with the specifics. 
        In general, Congressman----

    Beginning early this year (2022), the Forest Service is increasing 
the silviculture workforce through national hiring events to respond to 
ever-growing need for forest management as well as the need to 
implement the Infrastructure Investment and Jobs Act, which 
incorporates the REPLANT Act.
    The USFS has identified approximately 200 vacant positions in 
silviculture needed to meet the implementation work mentioned above. We 
are making good progress in filling these positions. Following a 
national hiring event this fiscal year, hiring actions on roughly half 
of these positions are in process or are complete. The remaining vacant 
positions are expected to be filled through a national hiring event 
held last month (September 2022) in conjunction with the Society of 
American Foresters Convention. The Agency continues to further refine 
estimates of needed silviculture positions through field capacity 
assessments.
    The Forest Service is also growing the silviculture workforce's 
skills through its silviculturist certification program. In 2020, the 
agency streamlined the silviculture certification process. The new 
process reduces the certification process from more than 4 years to 2.5 
years, allowing silviculturists to be certified faster.
                                 ______
                                 
                          Submitted Questions
Response from Randy Moore, Chief, U.S. Forest Service, U.S. Department 
        of Agriculture
Questions Submitted by Hon. Tom O'Halleran, a Representative in 
        Congress from Arizona
    Question 1. The vast majority of the Colorado River's headwaters 
originate in forested watersheds, which contain streams, wetlands, and 
meadows that capture snow melt and precipitation and provide critical 
water sources for communities, agriculture, and fish and wildlife. 
These forests and our natural water infrastructure in the Colorado 
River Basin are at risk from climate change, which contributes to more 
severe drought and wildfires. Within the context of the upcoming farm 
bill, where do you see the most opportunity to increase the pace and 
scale of investments of managing forests to increase drought and 
climate resilience? What are perhaps the most significant barriers that 
Congress could address to meet the scale of forest resilience necessary 
to respond to climate change?
    Answer. Though the Forest Service has been working to manage the 
health of millions of acres of National Forests across the American 
West for decades, the scale, methods of work, and funding have not 
matched the need. In the West, climate change is making the fire and 
fuels problem even worse by reducing snow and rainfall and by 
increasing the frequency and duration of high winds and hot dry 
weather.
    To address this crisis, the Forest Service launched a 10 year 
Wildfire Crisis Strategy to focus investments in landscapes where 
wildfire poses the most immediate threats to communities. Under this 
strategy, the Forest Service will work alongside partners to treat up 
to an additional 20 million acres on National Forest System lands and 
up to an additional 30 million acres of other Federal, state, Tribal 
and private lands. The Forest Service, through the Infrastructure 
Investment and Jobs Act (IIJA), has already made initial investments in 
ten landscapes across the West. In selecting these landscapes, the 
Forest Service considered where funding and other Federal investments 
could reduce exposure of people, communities, and natural resources to 
the risk of catastrophic wildfire.
    The Four Forest Restoration Initiative (4FRI) in Arizona was one of 
the ten selected landscapes. The 4FRI Restoration Strategy outlines an 
approach to restore a landscape that includes six of the ten of the 
highest priority firesheds in the Forest Service Southwestern Region. 
Multiple challenge/cost-share agreements and master stewardship 
agreements are already in place and are in development to implement the 
work in this landscape. 4FRI-associated watersheds capture, store, and 
release clean water to municipal, domestic, irrigation, and industrial 
uses for millions of people in the Phoenix metropolitan area and 
beyond. As outlined in the 4FRI Restoration Strategy, nine high 
priority partner projects will improve watershed conditions. One 
example is the Flagstaff Watershed Protection Project which will reduce 
the risk of severe wildfire and subsequent post-fire flooding in the 
Rio de Flag and Upper Lake Mary watersheds.
    A second landscape in Arizona was selected as part of the Initial 
Landscape Investments under the Wildfire Crisis Strategy: Greater 
Prescott Area Wildfire Protection and Restoration. The project will 
improve overall ecosystem health and watershed function while reducing 
the wildfire threat to communities/areas, including but not limited to 
Prescott, Prescott Valley, Dewey, Humboldt, Mayer, Cottonwood, Crown 
King, Walker, Groom Creek, Ponderosa Park, Highland Pines, and Jerome. 
This project will meet the strategic treatment objective of restoring 
fire-adapted ecosystems to 40 percent of the landscape to reduce 80 
percent of the exposure from wildfire.
    Recently, $65 million of IIJA funding was made available for 
investment in watershed restoration activities through the 
Collaborative Aquatics Restoration Program (CALR) and Legacy Roads and 
Trails Program. The Coconino National Forest in Arizona received 
funding for three separate projects, all of which will improve 
watershed conditions, reduce sedimentation, improve water quality, and 
improve wildlife habitat.
    The funding from the IIJA and the Inflation Reduction Act (IRA) is 
a down payment for this work and will not cover the full costs of the 
treatments or maintenance work moving forward. The farm bill is a key 
piece of legislation that provides the agency and our partners critical 
tools to leverage these financial resources to get the work done. 
Authorities such as Stewardship Contracting, Good Neighbor Authority, 
Collaborative Forest Landscape Restoration Program, Wood Innovation 
Grants, and others authorized and expanded in past farm bills are 
critical in carrying out the 10 year implementation plan associated 
with the Wildfire Crisis Strategy, and help implement funding provided 
by the Infrastructure Investment and Jobs Act and Inflation Reduction 
Act. As Congress considers the next farm bill, we look forward to our 
work with the Committee to ensure the Forest Service has the tools it 
needs to address the wildfire crisis as well as successfully implement 
the full breadth of the Agency's mission.

    Question 2 Ecologically based forest management practices, many of 
which are based on the extensive knowledge and practices of indigenous 
communities, such as prescribed burning and strategic mechanical 
thinning and nature-based solutions such as restoring high-elevation 
wetland and meadow systems have been shown to help manage climate risks 
to forest watersheds, including reducing post-fire impacts to critical 
water infrastructure and water quality. What steps have been made, or 
should be made to better deploy the full suite of forest management and 
restoration tools to enhance the resilience of forest watersheds and 
downstream water users to climate change risk?
    Answer. The Watershed Condition Framework (WCF) is a tool the 
Forest Service uses to focus watershed restoration efforts on priority 
watersheds to return them to, or maintain them in, proper functioning 
condition. Proper functioning condition means a watershed is better 
able to withstand disturbances, including climate driven changes, 
without suffering lasting effects on water quantity, water quality, and 
aquatic communities. Climate vulnerability assessments and other 
climate change analysis tools inform the decisions to designate 
watersheds with priority status . Over the past 10 years, the Forest 
Service has completed restoration in 130 priority watersheds. There are 
another 324 designated priority watersheds with an estimated cost of 
$800 million to restore. Currently, 53 percent of the 15,000 Forest 
Service watersheds are in proper functioning condition. The agency 
goal, with available funding, is to increase that to 54 percent by 
2027, which means restoration of another 100 watersheds over the next 5 
years.
    As referenced above, climate vulnerability assessments are used to 
guide management or conservation actions and consider adaptive 
management or policy responses that may lessen negative impacts (or 
enhance positive impacts) of climate change and have been developed for 
most National Forests. Other tools that are used to enhance the 
resilience of forest watersheds and downstream water users to climate 
change risk include the Forested Watersheds Menu of Adaptation 
Strategies and Approaches and the recently-developed Streamflow in a 
Changing Climate application, which provides a variety of observed 
(historical) and predicted (mid-century and end-of-century) streamflow 
metrics to help water resource practitioners understand effects of 
changing water metrics over time.
    Finally, implementation of aquatic organism passages (AOPs) to 
benefit fisheries and other aquatic species also improves resilience in 
flood-prone areas while maintaining habitat connectivity. Funding the 
completion of AOP projects and other watershed-specific activities can 
contribute to the improvement of watersheds under the WCF.

   Restoring flood resiliency at road-stream crossings benefits 
        active management by ensuring a functional road network and 
        safe access valued by communities and partners.

   The agency's stream simulation design approach for AOPs 
        increases transportation infrastructure resilience to flooding 
        and helps maintain critical access for emergency response, 
        recreation, and other economic activities for local 
        communities.

   Prioritizing the upgrade or mitigation of undersized road-
        stream crossings represents a key agency climate change 
        adaptation strategy to conserve important fish and aquatic 
        species.

    AOP projects are prioritized according to benefits to aquatic 
species, connectivity, flood potential, and essential projects 
identified under the WCF. Since 2008, the Forest Service has removed or 
improved more than 2,000 AOPs and is well on the way to improving 
another 1,500 AOPs by 2025.
Question Submitted by Hon. Eric A. ``Rick'' Crawford, a Representative 
        in Congress from Arkansas
    Question. Chief Moore, Blanchard Springs Caverns is a U.S. Forest 
Service-managed site in my district, located in Stone County, Arkansas. 
Blanchard Springs is a spectacular destination that attracts visitors 
from across Arkansas and the country. Not unlike other attractions, 
Blanchard Springs closed at the start of the COVID-19 pandemic. 
However, when other destinations were reopening in 2021 and early this 
year, Blanchard Springs has remained closed. In an email to my district 
staff on March 25, 2022, Forest Service staff outlined a very limited 
reopening set for June of July of this year. Unfortunately, upon 
inspection for reopening, significant problems with an elevator were 
discovered, necessitating repair. This is causing further delay of 
reopening.
    Chief Moore, I am frustrated that a plan to reopen Blanchard 
Springs was not outlined until just a few months ago. With our 
knowledge of COVID-19, effective prevention measures, and personal risk 
assessment, the 2 year closure seems unreasonable. I understand that, 
until recently, the site did not have sufficient personnel, which might 
have been avoided with a quicker reopening. Now there is an actual 
problem--the elevator--which will cause further delay. Not to mention, 
distrust among the community that loves and supports Blanchard Springs. 
They want to work with you all to reopen this treasured attraction, and 
that will require meaningful outreach and transparent communication 
from your team.
    My staff, along with staff from the office of Senator Boozman, had 
a positive meeting with your team from Arkansas and Atlanta on July 15, 
2022. They indicated that the process to begin elevator repairs is 
underway and that they have sufficient staffing in place for projected 
reopening in late August.
    When will Blanchard Springs Caverns reopen? Can you commit to 
working with our office to ensure Blanchard Springs is reopened as soon 
as possible and ensure communication with my team from your office?
    Answer. Blanchard Springs Caverns reopened on August 18, 2022, 
after a 2 year closure. We are committed to ensuring clear 
communication with your office and the public regarding any questions 
related to the reopening.


 
                     A 2022 REVIEW OF THE FARM BILL

 (THE STATE OF CREDIT FOR YOUNG, BEGINNING, AND UNDERSERVED PRODUCERS)

                              ----------                              


                        THURSDAY, JULY 14, 2022

                  House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 9:32 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: Representatives David Scott of Georgia, 
McGovern, Adams, Spanberger, Hayes, Brown, Rush, Sablan, 
Kuster, Bustos, Plaskett, O'Halleran, Carbajal, Lawson, Craig, 
Harder, Axne, Schrier, Bishop, Davids, Thompson, Austin Scott 
of Georgia, Crawford, DesJarlais, LaMalfa, Davis, Allen, 
Rouzer, Kelly, Bacon, Johnson, Baird, Balderson, Mann, Miller, 
Moore, Cammack, Fischbach, and Flores.
    Staff present: Lyron Blum-Evitts, Rodney Brooks, Emily 
German, Josh Lobert, Lisa Shelton, Ashley Smith, Caleb 
Crosswhite, Trevor White, Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. Good morning, everyone. The Committee will 
come to order. After brief opening remarks, Members will 
receive testimony from our witnesses today. And what a great 
subject and necessary and critical issue we will be dealing 
with, A 2022 Review of the Farm Bill: The State of Credit for 
Young, Beginning, and Underserved Producers, so important, so 
critical.
    Before we get to our business today, I would like to take a 
moment and yield to my friend, our Ranking Member, the 
distinguished gentleman from Pennsylvania, to welcome our 
newest Member to the Agriculture Committee.
    Mr. Thompson. Well, Mr. Chairman, thank you so much. It is 
a great honor and privilege to welcome the newest Member of the 
House Agriculture Committee, Ms. Mayra Flores from Texas. For 
those of you who do not know, Congresswoman Flores has an 
incredible personal story. She was born in Mexico, legally 
immigrated to the United States, and became a U.S. citizen at 6 
years old. She worked alongside her parents in cotton fields to 
help pay for school, became a respiratory care practitioner, 
was a frontline worker during the COVID-19 pandemic, and now is 
a Member of Congress. She is truly an American success story, 
and I know we will all benefit from her diverse experience and 
her passion for our country and the agricultural industry.
    So, Mayra, welcome to the Committee, and I am certainly 
looking forward to working with you.
    And with that, Mr. Chairman, I yield back.
    The Chairman. And that statement, Ranking Member, goes for 
me as well.
    Mr. Thompson. Excellent.
    The Chairman. Welcome, Mrs. Flores. We are delighted to 
have you.
    I am so excited about this hearing. This is a critical 
issue. We have to make sure that for generations and 
generations to come that we can have young and beginning 
farmers in place. And we have to make sure we are addressing 
those issues. And, so we are looking forward to hearing from 
each of you.
    And I want to start out by saying that it should be noted 
that the average age of our farmers and ranchers in this 
country right now is approaching 60 years of age. That right 
there lets you know that this is a very important issue. It is 
a national and very critical issue. And we must ensure that 
there is a next generation of men and women who will take the 
place of those who are retiring from this grand occupation 
called farming. I am one of those who was a beginning farmer 
growing up on my grandfather's farm, and I know the meaning of 
that. And this is very critical to me.
    And credit is one of those tools that we must make readily 
available. We have to do that. Farming is expensive now. Just 
going out and trying to get an acre of land is right now at the 
$5,000 level. Just think of that. So this is why farming and 
ranching, which are not exact sciences, but there are ebbs and 
there are flows. And capital is needed throughout various times 
before, during, and after the growing season. And now we are 
having such drastic weather changes, but the farming must go 
on. And we have to be there with the resources to help our 
beginning farmers.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning, I'm grateful to be here today to hold another full 
Committee hearing to review the credit title of the 2018 Farm Bill with 
a focus on our young, beginning, and underserved farmers and ranchers.
    I am also excited for the opportunity to continue to work with my 
colleague, Ranking Member Thompson of Pennsylvania, who shares an 
interest in this area.
    Our young, beginning and underserved producers face difficulties in 
obtaining credit that our more seasoned and established producers may 
not encounter.
    Historically, these groups of producers tend to have financial 
positions that are less desirable to lenders. Their financial position 
may be linked to a very limited production history that has not allowed 
for much equity to be gained in their operations or the smaller scale 
of production that they are engaged in, among other factors.
    It should be noted that the average age of our farmers and ranchers 
in this country is approaching 60 years of age. We must ensure that the 
next generation of men and women who take the place of those retiring 
from this grand occupation have the tools necessary to continue to 
produce the food and fiber that we rely on for our existence.
    Credit is one of those tools that we must make readily available to 
all our producers especially the young, beginning, and underserved.
    Access to capital, but even more so, access to credit, is a pillar 
to establishing a successful agricultural operation. Farming and 
ranching are not an exact science thus there are many ebbs and flows. 
Capital is needed throughout various times before, during, and after 
the growing season.
    Credit access and availability is vitally important to keep a 
farming operation afloat. A well drafted and realistic farm business 
plan that displays positive cash flow is required to obtain sufficient 
credit, whether it be from Farm Service Agency (FSA), the Farm Credit 
System (FCS), commercial bankers or any other financial entity.
    The FSA, Farm Credit System, and commercial bankers account for 
over 80% of the total outstanding farm loan debt and we want to ensure 
that these loan programs are meeting the needs of all our farmers and 
ranchers.
    Today, we have a broad range of witnesses before us who will 
discuss credit. I am eager to learn how changes enacted in the 2018 
Farm Bill have affected our producers and how we can improve these 
programs through effective policy decisions.

    The Chairman. And with that, Mr. Ranking Member, I am going 
to turn it over to you for your opening statement.

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

    Mr. Thompson. All right, Chairman Scott, thank you so much 
for convening this important hearing to assess credit issues in 
rural America. For any agriculture operation, one of the most 
critical relationships a farmer may have is with his or her 
lender. This is especially true for our young and beginning 
producers. Farming is capital-intensive. The cost of entry is 
incredibly high and can act as a barrier to entry for these new 
agriculturalists trying to start or grow their farm operations.
    Unfortunately, because of the significant financial risk, 
some new borrowers are unable to secure commercially available 
credit, which is where the critical credit programs authorized 
by the farm bill step in. Direct and guaranteed ownership and 
operating loans delivered by the Farm Service Agency can 
provide the necessary funds to start or to grow a farm 
operation and set-asides for beginning farmers and ranchers 
ensure new operations have access to these loans.
    As a part of the discussion today, I hope we learn what 
impact inflation is having on the financial health of our 
farmers. The announcement yesterday showing the consumer price 
index up 9.1 percent, highest rate in 41 years, has me 
incredibly concerned for the future of farm operations and for 
the ability of these credit programs to continue to provide the 
necessary funding for operations in this high-cost environment.
    For me, the measure of success of our credit programs is 
the ability of borrowers to utilize their loans to get their 
operations on solid financial footing and eventually obtain 
access to commercially available credit. With soaring costs, I 
fear we may be going the opposite direction over the next 
several years, and we must ensure our Credit Title is adequate 
to weather the storm.
    As many may know, the average age of a farmer is 
approaching 60 and is on an upward trend. FSA's credit programs 
can play a role in helping farm operations transition to the 
next generation, but we cannot examine them in a vacuum. Rather 
than simply pushing programs that allow producers to borrow 
more, the Committee should also be looking at solutions that 
help things cost less and reduce the reliance of young and 
beginning farmers on government loans.
    Mr. Chairman, I would like to ask unanimous consent to 
enter into the record a letter that I, Leader McCarthy, and 94 
House Members sent to President Biden on June 14.
    The Chairman. Without objection.
    [The letter referred to is located on p. 1363.]
    Mr. Thompson. Thank you, sir. This letter identifies 
tangible steps the Administration could take immediately to 
address rising farm input costs and provide regulatory 
certainty for our producers. Reducing these costs will help all 
farmers, ranchers, and eventually consumers, but those who 
would see the biggest positive impact would be our young and 
beginning farmers and producers.
    Many farmers and ranchers will borrow more in each growing 
season than the average American will borrow in their lifetime. 
But year in and year out our producers take this huge financial 
risk because they believe in the work that they are doing. They 
believe in living and raising a family in rural America. And 
with the right combination of policies, including our credit 
programs, we can help our farmers feed and clothe both this 
nation and the world.
    So thank you to the witnesses who are here today, and I 
look forward to hearing your testimony. Mr. Chairman, I yield 
back.
    The Chairman. Thank you, Ranking Member.
    And the chair would request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony and to ensure that there is ample time for questions.
    [The prepared statement of Mr. Carbajal follows:]

   Prepared Statement of Hon. Salud O. Carbajal, a Representative in 
                        Congress from California
    Thank you, Mr. Chairman, and thank you to the witnesses for 
testifying before this Committee today.
    It is vital that Congress empowers young, beginning, and 
underserved producers to become farmers that can contribute to our 
nation's food supply and economy. We should be working with USDA to 
make accessing credit and other resources needed to start farming as 
easy as possible. Access to resources have improved over the years but 
we can continue to do more.

    And let me welcome our five distinguished witnesses again, 
and say thank you for taking some of your valuable time to come 
help us with this very, very important issue. And let me 
introduce our panel at this time. Our first witness today is 
Dr. Nathan Kauffman. And Dr. Kauffman is the branch Executive 
Assistant Vice President, and Economist for the Federal Reserve 
Bank of Kansas City. Welcome, Mr. Kauffman.
    And our next witness today is Ms. Dania Davy, who is a 
board representative for the Alcorn State University Socially 
Disadvantaged Farmers and Ranchers Policy Research Center.
    And now to introduce our third witness today, I am pleased 
to yield to my good friend, the gentleman from Georgia, Mr. 
Austin Scott.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. Thank 
you, Chairman Scott.
    And it is my great privilege to welcome Ms. Julia Asherman 
of Jeffersonville, Georgia. She is a first-generation farmer. 
She owns Rag & Frass Farm and is testifying today on behalf of 
the National Young Farmers Coalition. She does a wonderful job 
advocating for them. And I have been to her place in 
Jeffersonville. And she is not originally from Georgia. I am 
glad she has decided to move to the 8th District and have her 
farming operation there. And I think most interestingly about 
Julia is she actually claims to have made peace with the fire 
ants.
    The Chairman. That is very good.
    Mr. Austin Scott of Georgia. I know nobody who has been 
able to make that, so perhaps she could explain that from her 
website in a little while. Julia, we are happy to have you here 
today and look forward to your testimony.
    The Chairman. I thank the gentleman.
    And now our fourth witness today is Mr. Willard Tillman, a 
Member of the Board of the Rural Coalition.
    And to introduce our fifth and final witness, I am pleased 
to yield to the gentleman from Illinois, Mr. Davis.
    Mr. Davis. Thank you, Mr. Chairman. It is always good to 
see you. And thank you, Ranking Member.
    I am hoping to be in person here before this hearing is 
done, but I did want to take the opportunity to introduce my 
good friend, Adam Brown. Adam and I have been friends for over 
a decade. Adam is the epitome of what a young farmer should be 
like and how to actually take a multi-generation operation and 
make it his own. Adam is a former state legislator in my home 
State of Illinois. He did a phenomenal job representing many 
areas that I have been able to represent over the last 10 years 
in central Illinois.
    Adam, it is great to see you there. I am going to come in 
personally and harass you in just a few minutes. But welcome. 
We certainly look forward to your testimony.
    And I will yield back the balance of any time you have 
given me, Mr. Chairman.
    The Chairman. Thank you.
    And now I want to again just say welcome to all of our 
witnesses. And now we will proceed with your testimony.
    And our first witness will be Dr. Kauffman. Please begin 
when you are ready.

    STATEMENT OF NATHAN S. KAUFFMAN, Ph.D., ASSISTANT VICE 
   PRESIDENT, ECONOMIST, AND OMAHA BRANCH EXECUTIVE, FEDERAL 
      RESERVE BANK OF KANSAS CITY, OMAHA BRANCH, OMAHA, NE

    Dr. Kauffman. Well, good morning, Chairman Scott, Ranking 
Member Thompson, and other Members of the Committee. Thank you 
for the opportunity to testify today. My name is Nate Kauffman, 
and I serve as Vice President and Economist with the Federal 
Reserve Bank of Kansas City. In my role, I lead several Federal 
Reserve System efforts to track economic conditions in U.S. 
agriculture, with a focus on farm finances and agricultural 
credit conditions. Because the industry is vital to the region 
we serve, the Kansas City Fed is committed to understanding 
developments in agriculture and including perspectives from 
rural America in national discussions on the economy.
    I am here today to share an overview of credit conditions 
in the U.S. farm sector, but before I begin, let me emphasize 
that my statement represents my views only and is not 
necessarily that of the Federal Reserve System or any of its 
representatives.
    Agricultural credit conditions have improved significantly 
the past 2 years, alongside a rebound in farm commodity prices 
that began in late 2020. Prior to the pandemic, the U.S. farm 
economy had been in a prolonged downturn. From 2013 to 2016, 
farm income dropped by 50 percent, alongside sharp declines in 
commodity prices and elevated input costs. Although farm income 
increased modestly from 2016 to 2019, profits generally 
remained low. Measures of agricultural credit indicated that 
financial stress was building at a gradual pace through 2019 
with increases in loan delinquencies and farm bankruptcies 
during that time.
    Despite disruptions associated with the pandemic, economic 
conditions in agriculture have recovered dramatically since 
2019. In the initial months of the pandemic, in 2020, 
agricultural prices had continued declining, but many of those 
prices began to recover later that year and remained elevated 
even in advance of Russia's invasion of Ukraine. By February of 
this year, the price of corn for example, was 65 percent higher 
than 2 years earlier. The prices of other major crops also 
increased sharply alongside strengthening economic activity and 
reduced production in several key growing areas. In addition to 
higher commodity prices, robust government aid programs 
administered during 2020 and 2021 also provided substantial 
financial support for many producers.
    The recent rebound in farm incomes has eased much of the 
financial stress that had been building prior to the pandemic. 
Through 2020, working capital increased substantially, and 
borrowers remained in a strong financial position through 2021. 
By the end of last year, the rate of delinquent farm loans held 
at commercial banks dropped to 1.3 percent following steady 
increases in prior years. The average value of farm real 
estate, a key indicator of financial health in the U.S. farm 
sector, increased by nearly 30 percent from the end of 2019 to 
the end of 2021 across the Midwestern U.S.
    Although agricultural prices have surged in recent years, 
input costs were also significantly increasing even before the 
war. Prior to the invasion of Ukraine, U.S. farm production 
expenses were expected to be 18 percent higher in 2022 than in 
2019. The average cost of fertilizer was expected to be 43 
percent higher. Since the invasion in February, many of these 
costs have continued to increase, highlighting a potential need 
for increased financing amid global concerns about food 
shortages and food price inflation. In recent months, a modest 
increase in farm loan interest rates has also contributed to 
higher production expenses, albeit to a lesser extent.
    Despite growing concerns about intensifying cost pressures, 
agricultural credit conditions have generally remained strong 
in recent months. Since the beginning of this year, the value 
of farmland in the Kansas City Fed region has increased by an 
additional five percent through June. Most lenders indicate 
that loan repayment rates have continued to rise, problem loans 
have remained sparse, and credit is readily available to meet 
borrowers' financing needs.
    Although economic conditions in agriculture have recovered 
the past 2 years and credit conditions have remained solid, the 
pace of improvement may be slowing. Through 2021, demand for 
farm operating loans declined steadily as profits expanded, and 
producers required less financial support from lenders. In the 
first quarter of 2022, however, lending activity at commercial 
banks accelerated due to a significant increase in the size of 
operating loans. Looking ahead, demand for farm loans in the 
Kansas City Fed district is expected to rise notably, and 
capital spending is expected to decline in the coming months 
for the first time since 2020. Numerous contacts have pointed 
to large increases in costs associated with fertilizer, fuel, 
and labor as primary drivers of higher expenses and a less 
favorable industry outlook.
    To briefly summarize, uncertainty about the outlook for the 
U.S. agricultural economy is high and will depend significantly 
on global factors, particularly the war in Ukraine and the 
strength of global economic activity. Overall, the U.S. farm 
sector appears to be well-positioned financially for the 
remainder of 2022, but some measures do appear to have softened 
in recent weeks, and some producers may face more substantial 
credit challenges than others.
    While the strength of farm income these past 2 years is 
likely to sustain credit conditions in agriculture for some 
time, some borrowers may face heightened financial stress in 
the year ahead if costs continue to rise and commodity prices 
ease further.
    This concludes my formal remarks. I will be happy to take 
questions at the appropriate time.
    [The prepared statement of Dr. Kauffman follows:]

    Prepared Statement of Nathan S. Kauffman, Ph.D., Assistant Vice 
President, Economist, and Omaha Branch Executive, Federal Reserve Bank 
                of Kansas City, Omaha Branch, Omaha, NE
    Good morning, Chairman Scott, Ranking Member Thompson, and other 
Members of the Committee. Thank you for the opportunity to testify 
today. My name is Nate Kauffman, and I serve as a Vice President and 
Economist with the Federal Reserve Bank of Kansas City. In my role, I 
lead several Federal Reserve System efforts to track economic 
conditions in U.S. agriculture, with a focus on farm finances and 
agricultural credit conditions. Because the industry is vital to the 
region we serve, the Kansas City Fed is committed to understanding 
developments in agriculture and including perspectives from rural 
America in discussions on the national economy. I am here today to 
share an overview of credit conditions in the U.S. farm sector. Before 
I begin, let me emphasize that my statement represents my views only 
and is not necessarily that of the Federal Reserve System or any of its 
representatives.
    Agricultural credit conditions have improved significantly the past 
2 years alongside a rebound in farm commodity prices that began in late 
2020. Prior to the pandemic, the U.S. farm economy had been in a 
prolonged downturn. From 2013 to 2016 farm income dropped by 50% 
alongside sharp declines in commodity prices and elevated input costs. 
Although farm income increased modestly from 2016 to 2019, profits 
generally remained low. Measures of agricultural credit indicated that 
financial stress was building at a gradual pace through 2019, with 
increases in loan delinquencies and farm bankruptcies during that time.
    Despite disruptions associated with the pandemic, economic 
conditions in agriculture have recovered dramatically since 2019. In 
the initial months of the pandemic in 2020, agricultural prices had 
continued declining, but many of those prices began to recover later 
that year and remained elevated even in advance of Russia's invasion of 
Ukraine. By February of this year, the price of corn, for example, was 
65% higher than 2 years earlier. The prices of other major crops also 
increased sharply alongside strengthening economic activity and reduced 
production in several key growing areas. In addition to higher 
commodity prices, robust government aid programs administered during 
2020 and 2021 also provided substantial financial support for many 
producers.
    The recent rebound in farm incomes has eased much of the financial 
stress that had been building prior to the pandemic. Through 2020, 
working capital increased substantially, and borrowers remained in a 
strong financial position through 2021. By the end of last year, the 
rate of delinquent farm loans held at commercial banks dropped to 1.3%, 
following steady increases in prior years. The average value of farm 
real estate, a key indicator of financial health in the U.S. farm 
sector, increased by nearly 30% from the end of 2019 to the end of 2021 
across the Midwestern U.S.
    Although agricultural prices have surged in recent years, input 
costs were also increasing significantly even before the war. Prior to 
the invasion of Ukraine, U.S. farm production expenses were expected to 
be 18% higher in 2022 than in 2019. The average cost of fertilizer was 
expected to be 43% higher. Since the invasion in February, many of 
these costs have continued to increase, highlighting a potential need 
for increased financing amid global concerns about food shortages and 
food price inflation. In recent months, a modest increase in farm loan 
interest rates has also contributed to higher production expenses, 
albeit to a lesser extent.
    Despite growing concerns about intensifying cost pressures, 
agricultural credit conditions have generally remained strong in recent 
months. Since the beginning of this year, the value of farmland in the 
Kansas City Fed region has increased by an additional 5% through June. 
Most lenders indicate that loan repayment rates have continued to rise, 
problem loans have remained sparse, and credit is readily available to 
meet borrowers' financing needs.
    Although economic conditions in agriculture have recovered the past 
2 years, and credit conditions have remained solid, the pace of 
improvement may be slowing. Through 2021, demand for farm operating 
loans declined steadily as profits expanded and producers required less 
financial support from lenders. In the first quarter of 2022, however, 
lending activity at commercial banks accelerated due to a significant 
increase in the size of operating loans. Looking ahead, demand for farm 
loans in the Kansas City Fed District is expected to rise notably and 
capital spending is expected to decline in the coming months for the 
first time since 2020. Numerous contacts have pointed to large 
increases in costs associated with fertilizer, fuel, and labor as 
primary drivers of higher expenses and a less favorable industry 
outlook.
    To briefly summarize, uncertainty about the outlook for the U.S. 
agricultural economy is high, and will depend significantly on global 
factors, particularly the war in Ukraine and the strength of global 
economic activity. Overall, the U.S. farm sector appears to be well 
positioned financially for the remainder of 2022, but some measures do 
appear to have softened in recent weeks. While the strength of farm 
incomes these past 2 years is likely to sustain credit conditions in 
agriculture for some time, some borrowers may face heightened financial 
stress in the year ahead if costs continue to rise and commodity prices 
ease further.
    This concludes my formal remarks and I would be happy to answer 
questions at the appropriate time. Thank you.

    The Chairman. Thank you so much, Dr. Kauffman.
    Next is Ms. Davy. Please begin when you are ready.

            STATEMENT OF DANIA C. DAVY, J.D., BOARD 
  REPRESENTATIVE, SOCIALLY DISADVANTAGED FARMERS AND RANCHERS 
 POLICY RESEARCH CENTER, ALCORN STATE UNIVERSITY; DIRECTOR OF 
      LAND RETENTION AND ADVOCACY, FEDERATION OF SOUTHERN 
       COOPERATIVES/LAND ASSISTANCE FUND, EAST POINT, GA

    Ms. Davy. Mr. Chairman and esteemed Members of the House 
Agriculture Committee, I am extremely honored to have this 
opportunity to highlight ongoing credit access challenges Black 
farmers, landowners, and cooperatives continue to face despite 
credit access improvements in the 2018 Farm Bill.
    My name is Dania Davy, and I serve as a board 
representative of the Socially Disadvantaged Farmer and Rancher 
Policy Research Center at Alcorn State University. My legal 
career has afforded me the opportunity to serve rural Black 
Americans, starting with my Skadden legal fellowship at a 
nonprofit law firm in North Carolina and performing outreach to 
socially disadvantaged farmers and ranchers in the Pigford II, 
Keepseagle, Garcia, and Love class-action discrimination 
settlements, and currently through the Federation of Southern 
Cooperatives/Land Assistance Fund, where I serve as Director of 
Land Retention and Advocacy.
    I appear before you today from the Mississippi Association 
of Cooperatives in Jackson, Mississippi, where our legal team 
is providing estate planning services via our mobile estate 
planning clinic, which has brought us from Opelousas, 
Louisiana, to Jackson, and this weekend we will travel to Epes, 
Alabama. Along the way, we have had the opportunity to meet 
with many of our members consisting of Black farmers, 
landowners, and cooperatives that have stewarded the Federation 
throughout our 55 year history. This has been a deeply 
enlightening experience and a timely opportunity for us to hear 
directly from our members, which has largely been limited to 
virtual meetings due to the ongoing pandemic that continues to 
disproportionately devastate rural Black America.
    This year, the Federation has hosted monthly listening 
sessions with our members, communities, and allied 
organizations, the most recent of which was focused on our 
members' credit access. Leading this work has given me specific 
insight into the deleterious impact of credit access challenges 
and ongoing corresponding disproportionate debt burden, loss of 
land, livelihood, and legacy for rural Black America.
    I have spoken to a Black farmer in the Midwest who was 
unable to purchase the certified organic farm he sought because 
of the lengthy and duplicitous loan application process with 
his local Farm Service Agency. Despite the farmer's ability to 
cash flow his proposal and extensive farm management 
experience, the loan officer refused to approve the loan 
because the officer advised the farmer that the home on the 
farm was too nice.
    A Black farmer in North Carolina shared with me that she 
was unable to expand her farm operations when she was 
discouraged from submitting her microloan application by her 
local FSA agent. Her loan officer advised her that she would 
need to collateralize her $50,000 microloan with her home, 
which far exceeded the microloan value. The FSA agent 
encouraged her to use credit cards to finance her farm instead 
of applying for a microloan.
    Perhaps the most disturbing story I have heard is from a 
Black rancher in Texas who first contacted us seeking 
assistance when the debt relief promise last year was delayed, 
putting his farm operations in a devastating limbo. In our most 
recent conversation, he further emphasized the vulnerability of 
his operation due to the combination of an unrelenting drought, 
extremely high input costs, and the uncertainty surrounding his 
promised farm loan debt relief, which put him at risk of losing 
his farm, thereby repeating the pattern of disproportionate 
land loss that cost his grandfather his entire farm operation, 
many acres of which this farmer has dutifully recovered to keep 
his farm ranching legacy alive and pass it on to his children. 
Despite my assurances of a farm foreclosure moratorium, he 
referenced contemplating suicide as he has taken the 
heartbreaking step of initiating the liquidation of his 
livestock and land to avoid foreclosure.
    Access to credit is the lifeblood of any farm or ranch 
operation. Without it, no farmer can meet the demands of 
acquiring or accessing land, developing critical 
infrastructure, or purchasing inputs. The changes in credit 
access in the 2018 Farm Bill did not anticipate the devastation 
caused by the global pandemic and thus did not go far enough to 
address the credit needs of farmers on the ground today.
    Dating as far back as Reconstruction, Black farmers have 
been disproportionately denied credit or provided less 
favorable terms, a trend that is so well-documented as to be 
common knowledge. The longstanding history of race-based 
discrimination in credit access, properly resulted in the race-
based class-action litigation against the USDA. As one 
devastating consequence of disparate credit access, Black 
farmers have been at least three times more likely to lose 
their land compared to White farmers during the same time 
period.
    Our farmers are their communities' first responders. Not 
only do they perform the critical feat of feeding their 
families and communities, they create jobs, stimulate rural 
economies, and lay the foundation for thriving self-sufficient 
rural regions. As we review the farm bill and prepare for the 
scheduled reauthorization, we must make use of the opportunity 
to prevent the looming threat of loss of Black farms, land, and 
livelihoods that has been institutionalized by racially 
disparate credit access.
    As the farmer stories I have shared this morning have 
outlined, our farmers need a more flexible, transparent, and 
streamlined FSA and loan application process. One way to do so 
is to simplify the first $100,000 of any farm loan in line with 
the existing microloan process. This will accomplish both an 
increased limit for microloans and position our farmers to 
acquire their initial inputs and establish their initial 
infrastructure more expeditiously. For any loans that exceed 
$100,000, we recommend alignment on farm ownership and farm 
operating loans to the farm ownership loans $600,000 limit. 
There is already a process in place for evaluating a loan 
application's ability to cash flow up to the $600,000 limit. 
And with the increased cost of all inputs, we need our farmers 
to have access to increased operating loan amounts to remain 
competitive.
    Finally, our farmers need support and resources to develop 
a financial institution owned and controlled by farmers of 
color which accomplishes the same rural credit access as the 
existing Farm Credit System. I humbly submit this testimony. 
Thank you for the time.
    [The prepared statement of Ms. Davy follows:]

   Prepared Statement of Dania C. Davy, J.D., Board Representative, 
  Socially Disadvantaged Farmers and Ranchers Policy Research Center, 
   Alcorn State University; Director of Land Retention and Advocacy, 
 Federation of Southern Cooperatives/Land Assistance Fund, East Point, 
                                   GA
    Mr. Chairman and esteemed Members of the House Agriculture 
Committee, I am extremely honored to have this opportunity to highlight 
ongoing credit access challenges Black farmers, landowners and 
cooperatives continue to face despite changes to credit access in the 
2018 Farm Bill.
    My name is Dania Davy and I serve as Director of Land Retention and 
Advocacy for the Federation of Southern Cooperatives/Land Assistance 
Fund. As you may be aware, the Federation is a Board member of the 
Socially Disadvantaged Farmer & Rancher Policy Center of Alcorn State 
University. I have the distinguished privilege of speaking on behalf of 
both the Federation and the Policy Center.
    My legal career has afforded me the opportunity to serve rural, 
Black Americans starting with my Skadden legal fellowship at a 
nonprofit law firm in North Carolina, then performing outreach to 
Socially Disadvantaged Farmers & Ranchers in the Pigford II, 
Keepseagle, Garcia & Love class action discrimination settlements, and 
now through the Federation, a regional nonprofit cooperative 
association of cooperatives, I serve members throughout the South.
    I appear before you from the Mississippi Association of 
Cooperatives office in Jackson, Mississippi where our legal team is 
providing estate planning services via our mobile estate planning 
clinic which has brought us from Opelousas, Louisiana to Jackson and 
this weekend we will travel to Epes, Alabama. Along the way, we have 
had the opportunity to meet with many of our members, consisting of 
Black farmers, landowners and cooperatives that have governed the 
Federation throughout our 55 year history. It goes without saying that 
this has been a deeply enlightening experience and a timely opportunity 
for us to hear directly from our members which has largely been limited 
to virtual meetings due to the ongoing pandemic that continues to 
disproportionately devastate Black, rural America.
    Earlier this year, the Federation became an intervening party in 
defense of the American Rescue Plan Act Section 1005 Emergency Debt 
Relief for Farmers and Ranchers of Color in the Miller v. Vilsack case 
which is currently pending in the Northern District of Texas. We have 
also hosted monthly listening sessions with our members, communities, 
and allied organizations, the most recent of which was focused on 
credit access. This work has given me specific insight into the 
deleterious impact of credit access challenges and the corresponding 
disproportionate loss of land, livelihood, and legacy for rural, Black 
America.
    I have spoken to a Black farmer in the Midwest who was unable to 
purchase the certified organic farm he sought because of lengthy and 
duplicitous loan application process with his local FSA because the 
loan officer felt the home on the farm was too nice despite the 
farmer's ability to cash flow his proposal and extensive farm 
management experience.
    A Black farmer in North Carolina shared with me that she was unable 
to expand her farm operations when she was discouraged from submitting 
her microloan application by her local FSA agent who encouraged her 
instead to use credit cards to finance her farm.
    But perhaps the most disturbing story I have heard is from a Black 
rancher in Texas who made a tongue in cheek joke about committing 
suicide. Despite my assurance of a farm foreclosure moratorium, this 
rancher has lost faith that he will ever receive the debt relief he was 
promised. He also expressed that the cost of maintaining his operation 
in light of the drought he is facing as well as extremely high input 
costs keep him in a constant state of severe emotional distress. He has 
taken the heartbreaking step of initiating the liquidation of his 
livestock and land to avoid foreclosure--a terrifying position he finds 
himself in because he believed in his government's promise of debt 
relief last year under Section 1005 of the American Rescue Plan.
    Access to credit is the lifeblood of any farm or ranch operation. 
Without it, no farmer can meet the demands of acquiring or accessing 
land, developing critical infrastructure, or purchasing inputs. The 
changes to the 2018 Farm Bill simply do not go far enough to address 
the credit needs of farmers on the ground today.
    Farmers are their community's first responders, not only do they 
perform the critical feat of feeding their families and communities, 
but they create jobs, stimulate rural economies, and lay the foundation 
for thriving self-sufficient rural regions.
    As we review the farm bill and prepare for the scheduled 
reauthorization next year, we cannot forget about the real challenges 
our farmers are facing because of the delayed implementation of Section 
1005 of the American Rescue Plan as passed by Congress and signed by 
the President. Our nation cannot risk the looming threat loss of Black 
farms, land, and livelihoods that this delay has created. The only 
solution to this threat is that all promised debt relief must be 
honored.
    As the farmer stories I have shared this morning have outlined, our 
farmers need a more flexible, transparent, and streamlined Farm Service 
Agency loan application process. One way to do so is to simplify the 
first $100,000 of any loan in line with the existing microloan process. 
This will accomplish both an increased limit for microloans and 
position our farmers to acquire their initial inputs and establish 
their initial infrastructure more expeditiously. For any loans that 
exceed $100,000, we recommend alignment on farm ownership and farm 
operating loans to the farm ownership loan's $600,000 limit. There is 
already a process in place for evaluating a loan application's ability 
to cash flow up to the $600,000 limit and with the increased cost of 
all inputs, we need our farmers to have access to increased operating 
loan amounts to remain competitive. Finally, our farmers need support 
and resources to develop a financial institution, owned and controlled 
by farmers of color, which accomplishes the same rural credit access as 
the existing Farm Credit System.
    I humbly submit this testimony and recommendations for your 
consideration.
    Thank you.

    The Chairman. Thank you so much, Ms. Davy.
    And now, Ms. Asherman, please begin when you are ready.

  STATEMENT OF JULIA ASHERMAN, OWNER, RAG & FRASS FARMS, LLC, 
               JEFFERSONVILLE, GA; ON BEHALF OF 
                NATIONAL YOUNG FARMERS COALITION

    Ms. Asherman. Thank you to the Honorable David Scott and 
Glenn ``G.T.'' Thompson for holding this hearing and for the 
opportunity to testify on this important topic. My name is 
Julia Asherman. I am the owner and operator of Rag & Frass 
Farm, a 3 acre certified organic vegetable and specialty cut 
flower farm in rural central Georgia. I have been farming for 
the past 13 years, the last 10 of which were on my own farm. I 
employ five people, three full-time and two part-time year-
round. We produce and sell 12 months a year, and I do this with 
no off-farm income.
    I am a first-generation farmer who grew up in the city. I 
learned to farm by trial and error, borrowing equipment from 
neighbors and learning lessons the hard way. The learning curve 
was very steep for all aspects of the farm: production, 
marketing, and running a business. In 2017, I was able to 
purchase my land with an FSA direct ownership loan. In 2019, I 
used a Farm Credit loan to buy our home next to the farm. And 
last year, I used an FSA operating microloan to buy a bigger 
delivery vehicle.
    My farming story is unusual, and my written testimony 
includes a longer account with more specifics on the process 
and the barriers. If you take away one message from my 
testimony today, I hope it is that my experience, while a 
success story, highlights the roadblocks, risks, and layered 
complex challenges that young farmers face in accessing credit 
and finding secure land tenure. I am extremely grateful for the 
programs that do exist. I know they are part of the reason I am 
farming today.
    When I bought my land in 2017, I had been in business and 
farming on it for 4 years prior. During that time, I kept 
detailed production and sales records. These records would 
become the most important factor in accessing USDA credit. I 
had no money for a down payment. All I had was experience and 
proof that it could be done.
    My property was marginal land with buildings in poor 
condition in an unpopulated rural area 2 hours away from any 
major markets. If any of these factors had been different, it 
would be unlikely that the seller would wait for me and my FSA 
process, which took months. The process is quite slow with many 
steps going back and forth and no pre-approval options. Farmers 
easily lose out on potential properties by not being able to 
act fast, and I have known several farmers personally who have 
not been able to use FSA loans to purchase for this reason.
    Diversified farms have the additional burden of fitting our 
business models into a framework that wasn't designed to 
accommodate them. This is frustrating to the borrower and 
doesn't build confidence in the application process or the USDA 
processes in general and is frustrating and more work for the 
loan officer as well. Any program that requires significant 
paperwork for what is essentially a gamble is not realistically 
geared towards being accessible to most farmers most of the 
year. Often, the cost of wasting time in the moment is higher 
than the potential return down the road, and farmers are 
constantly forced to weigh our options this way.
    Some of the loan process depends on a loan agent's 
familiarity with the type of operation you run. Beginning 
farmers often do things differently than the farmers many loan 
officers are used to. We are more likely to be organic; we are 
more likely to be diversified; we are more likely to be a 
smaller scale with more focus on specialty crops; we are more 
likely to direct market; we are more likely to be women, queer, 
people of color; and we are more likely to be first generation. 
These factors impact the business model and expectations of the 
borrower and contribute to the shared fluency or lack thereof 
between the borrower and the lender. Looking back, I can see my 
success with USDA loans was due in large part to luck, timing, 
and persistence.
    I want to thank you for the past improvements such as the 
microloan program and for increasing overall loan limits for 
direct farm ownership loans. I hope that you continue this work 
in the upcoming farm bill. Specifically, I ask that you 
establish clear processes to implement a pre-approval mechanism 
for FSA direct farm ownership loans so that farmers do not lose 
out on farm ownership opportunities. I also recommend that USDA 
index direct farm ownership loan limits to inflation so that 
farmers can bring competitive offers to the table.
    Last, Black, indigenous, and farmers of color need 
equitable access to USDA programs across the board, and this is 
especially true with access to credit.
    Thank you so much for your consideration of my testimony 
and for listening to the voices of farmers.
    [The prepared statement of Ms. Asherman follows:]

 Prepared Statement of Julia Asherman, Owner, Rag & Frass Farms, LLC, 
   Jeffersonville, GA; on Behalf of National Young Farmers Coalition
    Thank you to the Honorable David Scott and Glenn `G.T.' Thompson 
for holding this hearing, and for the opportunity to testify on this 
important topic.
    My name is Julia Asherman and I am the owner and operator of Rag & 
Frass Farm, which I started in late 2012. I farm 3 acres of certified 
organic vegetables and specialty cut flowers in rural central GA. I 
employ five people, three full-time and two part-time, year-round. We 
grow and sell 12 months a year, and I do this with no off-farm income. 
Until this year, when I had a baby, I worked 7 days a week. Now I work 
6 days a week. Farming is mentally and physically challenging but I am 
pleased that I found my calling, and hope my testimony is helpful to 
your policy decisions and to other farmers.
    I grew up in the city, born and raised in Boston and went to 
college in Chicago. I hail from several generations of proud gardeners. 
As a child my family would regularly drive 2 hours to southern Vermont 
where my grandparents had family land. This land is no longer in my 
immediate family, but it holds a piece of my heart. It is where I 
learned to love the country, walk the woods, and where I formed the 
foundational experiences that would direct me to farming later on.
    While in Chicago, I studied printmaking and metal sculpture, and 
dabbled in bike mechanics on the side. Indirectly these experiences 
lead me to farming: the tools, the creation, the problem-solving, 
working with my hands, and getting dirty.
    While in school I realized I wanted to live in the country, to 
carve out a piece of land and be self-sufficient. In 2009 I graduated 
and took the first cheap land opportunity I found, bringing me to rural 
central Georgia to a run down 1970's conventional hog farm. There I set 
to work turning it into a sustainable market garden with trial and 
error. There were a lot of errors. The learning curve was steep, and I 
had many hard lessons. Unexpectedly, the benefit to not learning from a 
more experienced mentor is I had no one telling me what was or was not 
possible.
    It took 3 years of `faking it till I made it' (and books, the 
internet, etc.) to get to a 1 acre small farm, selling at market, with 
customers. Initially, having not worked on a farm, I thought having one 
would be like having a big garden. I quickly realized it meant actually 
running a complex small business. I kept records, mostly so I could try 
to repeat my successes and minimize mistakes. I didn't know then that 
the harvest and sales records would be the most important thing I 
created.
    In early 2012, I was evicted. The land was abruptly no longer 
available to me, and I had to abandon the small farm I had worked the 
past 3 years on. I was a landless farmer. I had poured myself into 
creating my little farm, built infrastructure, but failed to get a 
clear written lease. This devastating experience was a wake up call to 
the risks of being a tenant farmer and the fragileness of a handshake 
agreement. It also planted the seeds of the benefit and security to 
land ownership.
    I moved to a bigger and much more established farm a few hours away 
and worked as an employee for a season. It was one of the first 
certified organic farms in the state, and was 10+ acres of veggies and 
produce. This was a much bigger scale, with more equipment and 
mechanization. I was part of a 5-10 person crew and helped manage 
harvests, market, and planning. During this time I realized I never 
wanted to have tenuous land arrangements again, and I also didn't want 
to work on just any farm, I wanted to work on my own farm. A farmer 
friend suggested I look into FSA loans. My first reaction was a hard 
`NO', simply because I didn't want to go back into debt after paying 
off my college debt. As I researched buying land, it sank in that I 
would never be able to own anything significant, like land, without 
debt.
    It sounds crazy to say I found my land on Craigslist, but I did. 54 
acres with an old fixer upper motel, old storefront, barn, pasture, 
pond, woods; in Jeffersonville, GA, a small town with 1,500 people and 
one flashing red light.
    By early 2013 I had moved to the property with a sales contract, a 
business plan, and FSA loan application. When I moved I had $2,000 in 
my bank account, my 1994 Chevy, two dogs and a cat. I was lucky and 
found a real estate attorney who took interest in my plan and drafted 
my purchase and lease agreements for a bargain. I borrowed a tractor 
from one of my `old man friends'. I disassembled and moved greenhouses 
that I got cheap from out-of-business nurseries, and put them up again. 
During the winter of 2012 when I moved to the land, I had no working 
electricity, no well or running water, and no heat. It was very rustic, 
I was resourceful, and I got crops in the ground 3 months later. I did 
not use any operating loans to get off the ground, I saved my debt for 
the land, and hobbled along for a few years, reinvesting as I went.
    I was a tenant on the property (with a frequently renewing sales 
contract) for 4 years before closing on the property in 2017 with an 
FSA Direct Ownership Loan for $75,000. The land had a lien on it, had 
underground storage tanks from an old gas station, and the seller was 
in a foreclosure/bankruptcy process, all of which added years to the 
process. By the time I bought the farm, I was fully in business growing 
on 3 acres. During the time that I was waiting to buy the land, I was 
farming and keeping records. These production and sales records, along 
with the records from the first farm I managed, were the most important 
factor in accessing USDA credit. I had no money for a down payment, all 
I had was experience and proof that it could be done.
    So far the story sort of sounds like the `American dream'. However, 
in hindsight, my success with FSA has been due to a few specific lucky 
factors:
    I am a persistent and stubborn person--not the giving up type. I 
stuck with the paperwork, the county loan officers, and did my homework 
enough that I could make it work, and sufficiently negotiate the deal 
with both the seller and lender. However, most farmers are busy and use 
their time strategically. Any program that requires significant 
frustrating paperwork and a lot of effort, for what is essentially a 
gamble, is not really geared toward being accessible to most farmers, 
most of the year. The cost of wasting time right now can outweigh the 
hypothetical benefits down the road. Having the right documents and 
records at your fingertips during the right time of year is a must, to 
make everything come together. Even then, a lot depends on the loan 
agent's understanding of the type of operation you run. Beginning 
farmers often do things differently from the farmers my loan officers 
are used to working with: we are more likely to be organic or 
sustainable; we are more likely to be diversified; we are more likely 
to be smaller scale (with more focus on specialty crops); we are more 
likely to be direct market; we are more likely to be women, queer, 
people of color; and we are more likely to be first generation.
    Luckily, I was able to successfully navigate the timeline. I was 
able to secure a lease in addition to a sales contract, and this was 
because the seller was motivated to sell. The property was on the 
market for a while, it was not in a desirable or populated area, and 
the condition of the buildings was poor. I was the only person 
interested in it, and that was great for me and the seller. If I had 
been trying to buy a property in better condition, in a different area 
or facing any type of development pressure, it would be unlikely that 
the seller would wait for me and my FSA process, which took months. The 
current process is slow, with many steps going back and forth, and no 
pre-approval. Farmers easily lose out on potential properties by not 
being able to act fast. I have known several farmers who have not been 
able to use FSA loans to purchase for this reason.
    My land was cheap. I paid $75,000 for 54 acres. It was a small, 
comparatively easy first ask. Everything I claimed in terms of yield, 
price, budget, etc. was foreign or unbelievable to my loan officers. It 
would have been very difficult to get them to take me or my farm 
seriously if I didn't have the records to prove what a small farm can 
produce in food, or what it can gross in sales. Additionally, as you 
know the FSA requires 150% equity on a purchase loan--if my property 
didn't appraise at 150% of the sales price, then FSA would have taken a 
lien on my truck or tractor--which was pretty much all that I owned at 
the time. And I bought my tractor with cash, so adding a lien to the 
most important equipment I owned for land collateral would have been a 
tough pill to swallow. While my story is one of success, I am sharing 
it today because it highlights how precarious and fortunate my 
experience was. As a country, we can't expect farmers to find suitable 
land for a steal the way I did. We are looking at the impending 
transition of more than 40% of farmland, and this crisis of land access 
will only become more acute if we do not address it head on. Farmers 
like me across the country need access to good farmland, and to have 
secure tenure. Making sure that good farmland stays or gets into the 
hands of farmers must be a priority. Making sure we always have new 
farmers to replace those who retire is a priority. We need to focus 
this next farm bill process on policies that enable equitable land 
access and transition, and access to credit is at the heart of this 
issue.
    While loan limits did not play a factor in my land purchase, I 
applaud Congress for increasing the limits in the 2018 Farm Bill, 
making land value a bit less of an access issue. However, loan limits 
certainly still affect many farmers in other areas, particularly near 
more populated areas. For me, that was not the foremost barrier. For 
farmers across the board, the lack of a pre-approval combined with the 
burdensome slow process, and the luck of the draw in finding a local 
loan officer with the necessary training, openness, and desire to meet 
the spirit of the law, are all salient challenges to be addressed. One 
of the great things about FSA is the ability to make annual payments, 
which reflects the seasonal cash flow of most farmers. If there was 
loan pre-approval, it would better reflect the seasonal workload. 
Farmers could get approved in their off seasons, instead of whenever 
they find the land, which could be in a very busy time.
    I also applaud Congress and the USDA for the creation and 
implementation of the microloan program, especially as a way to open 
doors to underserved and beginning farmers. Not all loans are of equal 
size or risk. Last year I applied for a $50,000 Direct Operating 
Microloan to purchase a bigger more reliable delivery truck. We did 
successfully get the loan and get the vehicle, however, the process was 
nearly identical to a Direct Operating Loan. I filled out the same 
paperwork, gave the same financial, crop planning, and cash flow 
projections as I did when I purchased the land. I did ask my loan 
officers if there was an expedited process since it was a microloan. I 
was told that since I was already in business, they would need the full 
paperwork of any operating loan. Essentially, my application process 
for this microloan (in terms of which documents I would need to supply 
and to what level of detail) was no different than any operating loan 
(up to $400,000) that I might apply for. This is not in keeping with my 
understanding of the stated purpose of the microloan program, and would 
certainly be a barrier to any farmer not already familiar with FSA loan 
processes.
    Another considerable factor in accessing land is student debt. 
While I did have student debt upon graduation, I had a `reasonable 
amount', which I was able to pay off before borrowing from the FSA. We 
know from surveys conducted by the National Young Farmers Coalition, 
that most of the new farming generation is likely to be college 
educated. If I still had debt to manage, I am not sure if I would have 
been able to make the numbers work for the loan, let alone start a farm 
at all. This is a hugely critical issue for young farmers like me, and 
is an even greater challenge for young farmers of color. It is 
challenging enough to enter a physically and financially risky 
profession that requires intense capitalization. For new farmers 
entering farming with immense debt, they face a real risk of failure or 
incredible hardship, if they are able to move forward at all. At the 
same time, I believe that I would not have been successful in my land 
access journey without my college education, and if I was not college 
educated, I doubt I would have been able to navigate the loan processes 
with FSA effectively.
    Farmers don't dream of a life filled with debt and financial 
stress. Access to credit can help us get our farms off the ground but 
we still need basic quality of life things afforded to most other 
working people: health insurance, basic risk mitigation, family leave, 
being able to send our kids to college, rural high speed internet, and 
a protected natural resources and climate to work within. The old 
timers say ``The quickest way to end up with $1 million farming is to 
start with $2 million.''
    To my surprise, despite my long repaid Federal student loans, 
despite my two current FSA loans, and despite my Farm Credit loan, I 
still do not have a credit score. Apparently Federal and Farm Credit 
debt do not contribute to credit scores. This means that regardless of 
my good standing on my loans, I still have no credit history, and if I 
were to go to a traditional lender, they may not lend to me, or I might 
pay the highest interest rate on the least favorable terms. I don't 
understand why this is the case or how you can remedy it, but I work 
hard to pay off my debt, and my Federal credit counting for nothing 
seems to cut me out of opportunities. Furthermore, since USDA has an 
increasing commitment to beginning and underserved farmers, if our 
Federal debt could help us build traditional credit, we would be more 
independent and have more options available to us.
    I ask that the next farm bill consider these issues.
    Establish clear processes and structures to implement a pre-
approval mechanism for Farm Service Agency Direct Farm Ownership Loans, 
so that farmers who have identified available land and gathered 
necessary supporting information do not lose out on farm ownership 
opportunities simply because they need to utilize USDA's help. Further, 
I recommend that USDA index Direct Farm Ownership Loan limits to 
inflation, so that farmers can bring competitive offers to the table.
    Thank you for listening to me and to the voices of farmers, even if 
we are small or young farmers. The farm bill touches everyone in this 
country, and your policies have an incredible impact on the direction 
our farms take. Please consider the big picture urgency for the 
nation's farmers, and the subsequent opportunity to make agriculture 
thrive. Our work is dangerous, risky, and exhausting, and we persist 
despite sacrifice and challenges, forgoing benefits many people enjoy.
    Many small, beginning, and underserved farmers feel largely 
invisible to most consumers, overlooked by most of society, and 
overlooked by our government. We feed and clothe communities and 
steward our nation's most precious resources for the future. Our 
resilience is a matter of national security. Yet many of us survive 
with luck, willpower, and with little tidbits of USDA support sprinkled 
in. Young farmers, beginning farmers, and underserved farmers need 
policies that acknowledge inequities, lift the burdens, give us 
pathways to success, open doors, watch our backs, and instill equity 
into agriculture.
            Sincerely,

Julia Asherman,
Owner and Operator of Rag and Frass Farm.

    The Chairman. And thank you, Ms. Asherman.
    And now, Mr. Tillman, please begin when you are ready.

   STATEMENT OF WILLARD TILLMAN, MEMBER OF THE BOARD, RURAL 
          COALITION/COALICION RURAL, OKLAHOMA CITY, OK

    Mr. Tillman. Good morning. My name is Willard Tillman. I am 
a Board Member of the Rural Coalition. Chairman Scott, Ranking 
Member Thompson, and all the other Members, thank you for 
inviting the Rural Coalition to speak here today.
    I was raised on a farm in Wewoka, Oklahoma. For decades, my 
family ran cow-calf operations. Me, myself, I am now the 
Executive Director of the Oklahoma Black Historical Research 
Project where I work with farmers and ranchers for decades 
about the challenges that they have in their areas. Right now, 
I am currently working with the Black mayors of all the 
historical towns in Oklahoma trying to reveal their economic 
base. We are seeking investments in rural communities' 
infrastructure needs and other businesses. This morning, I will 
concentrate on critical issues with livestock production to 
help build progress from the 2018 bill to assure fair service 
to all producers.
    The value of land in Oklahoma at this particular time is 
highly vital. Investors are putting the price of land up so 
high that young producers can't even get to invest in their own 
farms. Small-scale operations and multi-gen land tenure for the 
nation's moderate- and small-scale farmers and ranchers with 
special emphasis on beginning and historical producers should 
be a key goal for the next farm bill. Fair and efficient, 
affordable agriculture credit is an essential underpinning to 
the continuity of these farms and operations and sustainability 
of these communities.
    Several producers have basically talked about the tactics 
and everything that they are confronted with in the offices, 
which basically hinders a lot of the financial services and 
things that they need such as fair treatment just to basically 
be able to go in and get the necessary treatment that other 
people get when they go into the office. There seems to be a 
double standard. And I think that there should be more 
stringent checks and balances on these particular things.
    But we have demonstrated as a community-based organization 
over many years that technical assistance to these communities 
and community-based organizations are who the people trust. Our 
organization had partners across the country used to technical 
assistance to farmers learned enough about the programs to 
understand the benefits and how to access these programs. And 
we go through this process, and we are here as--I am here as a 
member of the Rural Coalition, and I urge this Committee to 
work on more modernized farm loan programs and expanding the 
FSA microloan benefits. A producer who is starting and 
transitioning farms needs to have an equitable chance to build 
sustainability.
    Our producers strongly support the 7 year operating loan 
with no payment for 3 years. A farmer who can build 3 years of 
equity should be able to make payments on his land, operate the 
farm, gain the ability to become sustainable. And we urge that 
the farm be authorized such a loan structure to afford 
producers the chance to build equity and ensure that they can 
cash flow and cover the payments of their loans.
    In closing, farmers have said to me, ``Farming is a hard 
job. We face all kinds of obstacles, floods, wildfires, and 
doing all this. But most underserved farmers have a full-time 
job off the farm. They face all these obstacles, the farmer is 
committed to the legacy of the land.'' And I asked him, ``Why 
do you keep doing this?'' And the farmer said, ``I love it. I 
just love it. I love farming.'' Thank you.
    [The prepared statement of Mr. Tillman follows:]

   Prepared Statement of Willard Tillman, Member of the Board, Rural 
              Coalition/Coalicion Rural, Oklahoma City, OK
    Good morning my name is Willard Tillman. I am here as a Board 
Member of the Rural Coalition. Chairman Scott, Ranking Member Thompson, 
and Members of this Committee, I want to thank you for your invitation 
to the Rural Coalition to be here today to share our thoughts about 
access to credit for historically underserved, limited resource and new 
and beginning farmers and ranchers.
    For 44 years, the Rural Coalition has effectively worked with the 
U.S. House and the U.S. Senate on legislative proposals involving farm 
programs, equity, and agriculture credit, which is the topic of today's 
hearing. The historically underserved farmers and ranchers that we 
represent play a critical role in the helping our nation maintain and 
expand its role of as the world's paramount leader in the production 
and marketing of an abundant, safe, and affordable supply of food and 
fiber.
    I was born and raised Wewoka, Oklahoma, where my family has for 
decades and continuing until to today, run cow and calf operations. I 
have myself and farmers. In my role as Executive Director of the 
Oklahoma Black Historical Research Project (OBHRPI), I've worked for 
over 2 decades with hundreds of cow-calf and other producers throughout 
the state of Oklahoma. At present, I am also working closely with the 
mayors of the historic black towns of Eastern Oklahoma, to rebuild and 
strengthen their economic bases. This includes seeking investments for 
local meat processing facilities.
    A strong agriculture sector is critical to economic progress in 
these communities. This progress will require investment in the 
continuing and expansion of agriculture in this region. And it will 
also require an investment in protecting land tenure for current 
farmers and growing a new generation of producers to carry on the deep 
knowledge of the generations who have held and worked this land.
    At present, land values in Oklahoma and beyond are highly volatile 
with outside investors driving up land prices in many areas. 
Anticipation of the expansion of carbon markets and authorizing 
payments for ecosystem services also appears to be driving investment 
both in farm and forest land. This trend should be monitored closely as 
move into the 2023 Farm Bill especially with changes in investment 
related to climate.
    We are working hard to help the next generation understand the 
value of the land to the family and community. A family can only sell 
their land once. Sometimes heirs can only see immediate money from a 
sale without understanding that they are giving up their family's 
lifetime legacy of a lot of hard work and how their elders in the face 
of all kinds of discriminatory practices were able to sustain and still 
hold onto that land.
    Protecting and expanding multi-generational land tenure for this 
nation's moderate and small-scale farmers and ranchers, with special 
focus on beginning and historically underserved producers should be a 
key goal of the next farm bill. Fair, sufficient, and affordable 
agriculture credit is essential underpinning to the continuity of these 
farming operations and to the stable and sustainable economy of these 
communities.
    In our testimony for the record, we will address our 
recommendations for credit in more detail. This morning I will 
concentrate on critical issues for livestock producers and how to build 
on the progress in the 2018 Farm Bill and your previous efforts to 
assure service to all producers.
2018 Farm Bill
    The Agriculture Improvement Act of 2018 (``2018 Farm Act'') 
increased support for farmers with limited access to traditional 
lending markets placing ``special emphasis on making loans to the next 
generation of farmers, including beginning farmers, farmers with 
limited means, and military veterans.''
    The adjustment in the maximum levels for direct farm ownership and 
operating levels is helpful as producers here contend with rising land 
and operating costs. Expanding the loan authorization level especially 
for direct loans is important. In 2023, we urge the Committee to 
consider what additional adjustments with special emphasis on building 
land tenure for beginning and historically underserved producers.
    The expansion of funding for direct operating microloans was 
helpful; we urge the Committee to consider further expansion. We 
strongly support the 50% loan funds set aside for beginning farmers and 
ranchers; we urge the Committee to consider a set aside for 
historically underserved producers. Farm loans are one of the farm 
programs most important for this group of producers who lack real 
access to the more richly supported commodity and market facilitation 
programs due to their smaller scale, livestock, or other diverse 
operations
    We support the 2018 authority provided to the Secretary to reduce 
or waive the eligibility requirement that an applicant have 
participated in the business operations of a farm or ranch for 3 years 
for farm ownership loans based on certain experience, training, or 
education--in our full testimony, we will explain why this waiver 
should be expanded or the requirement adjusted because in our 
experience it is often not fairly applied and contributes to the active 
discouragement many historically underserved producers receive.
    While we support the increases in the loan guarantees from 90 to 95 
percent for socially disadvantaged and beginning farmers, we are still 
not seeing how guaranteed lending is truly accessible to the producers 
we serve.
    We strongly supported the new Equitable Relief provision which 
authorizes the Secretary of Agriculture to provide equitable relief to 
farm loan program borrowers who were who acted in good faith but who 
have problems in their loans due to mistakes or inaccurate guidance 
from FSA. Relief measures, including a borrower's right to retain the 
loan or other benefits associated with the loan, or other means as the 
Secretary deems to be appropriate, still need to be implemented, 
refined, and applied to assure truth and fairness in lending.
    We further express our thanks to this Committee for their work to 
pass and include the historic ``Fair Access for Farmers and Ranchers'' 
heirs property provisions in the 2018 bill. Sections 12615 (7 U.S. Code 
 2266b. Eligibility for operators on heirs' property land to obtain a 
farm number), 5104 (7 U.S. Code  1936c. Relending program to resolve 
ownership and succession on farmland) and 12607 (7 U.S. Code  1936c. 
Relending program to resolve ownership and succession on farmland) are 
intended to assure USDA affords fair access to its programs for farmers 
and ranchers who operate farms on ``heirs' property.'' The final 
language ensures that more farmers--especially African American farmers 
and farmers of color operating on land with undivided interests--can 
finally access critical USDA programs that enable and find new support 
to work out complex heirship issues to obtain clear titles to their 
land.
Continuing Issues for Livestock Producers
    Farming is not an easy job. In Oklahoma, in addition to volatile 
land prices, producers face all the different weather conditions a 
person can stand including flood, drought, and wildfires. To face all 
these obstacles, it is essential that farmers are committed to the 
land. A farmer who was asked recently ``why do you keep doing it?'' 
``Because I love it,'' he responded.
    However, farmers from our communities remain legitimately 
distrustful of USDA and the Farm Service Agency in particular. In this 
section, I'll address some realities and some opportunities. For 
example, we have observed many times when local FSA loan officer could 
have done something to help producers navigate loans and losses, but 
they did not.
    Several producers I work with reported extreme pressure tactics on 
loan payments that made them feel like their land was being threatened. 
For example, a producer in Okmulgee County said the local office make 
them feel like they are going to foreclose. So, the producer paid the 
debt off before the time it was due. Only later did they learn that 
when they pay it off early, they were deemed no longer eligible for 
another direct loan. They were forced to graduate, and then sent to the 
bank where interest rates were 6-8%--unaffordable for these producers.
    In 2021, a Black farmer employed in another state sought the loan 
he needed to operate the family farm in Oklahoma where he grew up and 
farmed throughout his life. After his father passed, he filed all 
necessary documentation of ownership with Farm Service Agency. He 
contacted us because when he applied for a loan, the local office told 
him that he had to demonstrate 3 years of experience before he would be 
eligible for a loan. Before the office would provide him further 
assistance, they further directed him in a letter to provide a 
certified copy of a lease to his neighbor so the neighbor could collect 
benefits from the crops he was growing on this farmer's land.
    The farmer provided the office with a copy of the ``cease and 
desist'' letter he had sent to his neighbor to stop using his land and 
complained to the office about their role in enabling this incursion on 
his land. The local official then asked him ``do you want to sell your 
land?'' He was further instructed not bring this complaint to a higher 
level because he would ``get the previous staff of the office in 
trouble.'' He was unable to secure the loan in 2020, which would have 
left him unable to benefit from the ARP program. He filed a complaint 
with the inspector general which remains unanswered and has filed a 
civil rights complaint that is pending.
    Another producer had was unable in 2019 to get a bank loan because 
he could not get FSA to release a lien on his property. He was trying 
to replace a 100 year old decrepit barn with a new barn that would 
include a small meat processing facility. The office suddenly 
discovered the old barn had a $30,000 even though it was not included 
in a previous appraisal nor was it required to be insured. He was 
unable to secure the bank loan and is still working to secure resources 
to construct a processing facility he hopes would serve neighboring 
producers in his community.
    Rural communities are often small and insular. County office staff 
may have social or relational connections to third parties such as 
appraisers, or to other parties who may have an interest in a farmer's 
land that could be advanced by a low appraisal, for example. FSA lacks 
strong and clear standards and practices designed to prevent and 
require disclosure of conflicts of interest that can affect land 
transactions and ownership to the detriment of certain groups of 
producers.
    Appraisals are another area of concern, as are shared appreciation 
agreements. There are no quick ways to appeal and get a fair review of 
decisions, or even the ability to submit another appraisal and get a 
fairer decision in a reasonable length of time. In farming, delay can 
spell disaster or the loss of market opportunity.
    Within the Rural Coalition, we have seen many other examples of 
discouragement of services, denial of services, and situations where 
the use of discretion provided to county office staff has convinced 
black and other historically underserved producers that there are 
different standards for them than for other farmers.
    The authority provided in the 2018 Farm Bill that provides the 
Secretary discretion to waive the 3 year requirement of experience for 
beginning farmers and ranchers could be viewed as a step forward. 
However, is this waiver fairly applied, and how would this Committee 
know? Will children of the established producers well known to county 
office staff received the same scrutiny of skills as historically 
underserved and young farmers who walk in the door?
    How does this apply to the Black military veteran who grew up on a 
farm in southeast Alabama and after completing his tour of duty went 
into a local office to seek a loan to start farming again. The local 
office staff member replied by throwing the folder he brought in at his 
head and telling him not to come back until he could demonstrate 3 
years of experience. There need to be the same rules for all producers 
including in demonstrating experience.
    During the pandemic, many of the historically underserved producers 
who applied for the Coronavirus Food Assistance Program, were required 
to provide documentation for their claim, while the word of other 
farmers that their claim was correct was accepted in many offices. In 
another case, in southeast Alabama, producers were told that the type 
of specialty goat they produced were not eligible for CFAP. We worked 
with our members there and raised the issue to FSA headquarters, and 
some producers were able to secure some assistance. But many others 
were unwilling to go back into the office due to the treatment they 
received.
    Access to other programs besides loans is critical to being able to 
cash flow loans. We work with producers to get them to understand the 
content of the program--this is the part that often does not happen 
without CBO's. We must break it down for them and show how it works. If 
farmers don't understand--they won't mess with it. However, programs 
like EQIP to control invasive species and provide solar water wells for 
cattle, are very beneficial.
    The Livestock Indemnity program is also essential for producers to 
cover losses of cows, which are also collateral on their loan. However, 
in this state, producers we serve often farm on more fragile land. 
There are gullies at the edges of their property. When we have floods, 
which are frequent, the cows wash away, and you won't find them--you 
have the picture. The farmers can show in their records that they had 
this many cows but now only have this many. But FSA requires pictures 
and documentation that the farmer cannot produce. There needs to be 
some other way to ID loss.
    Producers are very aware that FSA offices took the word of other 
farmers in certifying production and losses in the livestock indemnity 
program and in CFAP, but not from them. They want FSA and other USDA 
agencies to apply the same rules for everyone.
    The long history of practices such as these had led farmers not to 
trust with these agencies. For example, when FSA contacts a farmer to 
tell them ``We need your AGI'' the older guys don't know what AGI is or 
why it is being requested.
    We have learned over the years that support for technical 
assistance by community-based organizations who are trusted to work in 
the interest of these farmers can help producers understand program 
requirements and their purposes is essential. Qualified TA is essential 
to rebuild trust. Our organizations and our partners across the country 
then use TA to help the farmer learn enough about the program to 
understand its benefits and learn how to access it. TA investments also 
help us develop proactive working relationships with FSA and NRCS 
county offices that help producers.
    Even as we work with producers to meet all their responsibilities 
to programs, we need the help of this Committee to set in place 
standards for service, and accountability for fair service, and 
protection from conflicts of interest. This is especially important in 
a time when there are growing outside investments in farm and forest 
land that have implications for this nation's small farmers, rural 
communities, and to the stability of agriculture lending system itself.
Heirs Property and Dormant Land
    Oklahoma Black Historical Research Project worked over the past 
decade to engage Black farmers in NRCS programs. With Rural Coalition 
and the Scholars of the America University farm bill practicum, the 
researched the data and experiences of Black farmers in access USDA 
programs. Their findings are summarized and published in the research 
paper on the Ecological Costs of Discrimination \1\ This research 
formed the basis for our push to include the Heirs Property provisions 
in the 2018 Farm Bill.
---------------------------------------------------------------------------
    \1\ Fagundes, Tillman, et al. Ecological costs of discrimination: 
racism, red cedar and resilience in farm bill conservation policy in 
Oklahoma, October 2019, Renewable Agriculture and Food Systems 35(4): 
1-15, DOI: 10.1017/S1742170519000322.
---------------------------------------------------------------------------
    Invasive species thrive in places facing climatic changes and put 
farmers at further risk. In Oklahoma, eastern redcedar is spreading at 
the rate of 800 acres a day. Without help for mitigation from USDA 
especially for historically underserved farmers who farm on heirs' 
property, small cow and calf operations have seen their grazing land 
taken over by redcedar, which competes with pastureland by consuming up 
to 55,000 gallons of water per acre per year and puts the viability of 
their operations at further risk. Other risks they have faced over the 
past decade include severe cycles of floods, droughts, fires, freezes 
and tornados. Farmers who produce on land held in undivided interests 
were being deemed ineligible for critical NRCS programs, because they 
lacked the documentation to secure farm and tract numbers to 
demonstrate their control of the land on which they sought benefits.
    The problem of eastern redcedar incursion is compounded by that 
fact that in Oklahoma, we have had large amounts of dormant land for 
years. Families may have kept land while they leave to seek jobs in 
other areas. Or, after the passing of elder landowner the family has 
been unable to resolve heirship issues, or secure legal assistance to 
help them. In rural areas, there are very few attorneys to help them 
and many of them may be conflicted--representing others who have an 
interest in acquiring that land.
    We are working now as hard as we can to connect young farmers to 
families with dormant land. It takes time to work out long-term lease 
agreements and point out the benefits of leasing the land to these 
young farmers that are out there looking for land. Work to protect land 
tenure and move dormant land back into production is urgently needed at 
this time because with rising prices of land in some areas due to the 
influx of outside investors--from $200-$300 an acre to $600-$800--we 
are working against the clock to assure that young farmers have a 
chance.
    Rural Coalition is just beginning a new Technical Assistance 
Project under the National Institute of Food and Agriculture in 
cooperation with OBHRPI and nine more RC members, to provide technical 
assistance to both farmers and landowners in assembling the paperwork 
they need to complete wills and succession plans so they are prepared 
to work with attorneys to complete these essential documents. We are 
also continuing our work to help farm operators, be they owners or 
renters, to secure farm and tract numbers and access to USDA programs. 
This work includes a special focus on helping producers farming on land 
held in heirs' property status to use the 2018 Farm Bill alternate 
documentation authorities to secure a farm and tract number and access 
NRCS programs[.]
Heirs Property and Forest Land
    Securing and building land tenure is also critical to protecting 
the intergenerational transfer of land and wealth and building a 
community with a healthy ecosystem and a tax base to sufficient to 
support quality education, employment opportunities, and a strong 
infrastructure. The following abstract of the paper ``Taking 
Goldschmidt to the Woods: Timberland Ownership and Quality of Life in 
Alabama'' \2\ summarizes the impact of the degree of highly 
concentrated land ownership on children, families, and the communities:
---------------------------------------------------------------------------
    \2\ September 2020 Rural Sociology 86(1) DOI: 10.1111/ruso.12344 
Authors: Conner Bailey, Abhimanyu Gopaul, Ryan Thomson, Auburn 
University; Andrew Gunnoe, Maryville College.

          We use a database of property tax records for 13.6 million 
        acres representing every parcel of privately owned timberland 
        in 48 rural Alabama counties to test two hypotheses inspired by 
        Walter Goldschmidt relating land ownership and quality of life. 
        Our data show private ownership is highly concentrated, and 62 
        percent is absentee owned. We employed Pearson correlations 
        alongside Poisson and negative binomial regression models to 
        estimate influence of both concentrated private ownership and 
        absentee ownership of timberland. Our findings support 
        Goldschmidt-inspired hypotheses that concentrated and absentee 
        ownership of timberland exhibit a significant adverse 
        relationship with quality of life as measured by educational 
        attainment, poverty, unemployment, food insecurity, eligibility 
        for free or reduced-price lunch at public schools, Supplemental 
        Nutritional Assistance Program participation, and population 
        density. Low property taxes in Alabama limit the ability of 
        local governments to generate revenue to support public 
        education or meet other infrastructural or service needs in 
        rural areas. We call on rural sociologists and kindred spirits 
        to pay more attention to the fundamental importance of land 
        ownership which shapes the foundations of power and inequality 
        affecting rural life in America and beyond.\3\
---------------------------------------------------------------------------
    \3\ https://www.researchgate.net/publication/
344021201_Taking_Goldschmidt_to_the_Woods_
Timberland_Ownership_and_Quality_of_Life_in_Alabama.

    The policies this Committee will enact in the 2023 Farm Bill will 
impact producers, forest and farmland owners and rural communities in a 
profound way. There are stark implications for communities and the 
rural economy in the burgeoning investments in both farm and forest 
land especially in the southeast. Investments in forests related to 
energy production and climate credits can be expected to increase 
volatility in land prices.
    At the same time, disasters are increasing, including both 
hurricanes and fires that affect forest in the southeast more than 
before.
Heirs Property, Housing and Rural Communities
    We look forward to other opportunities sharing our proposals to 
more fully full address the set of issues we have raised, including 
with respect to climate. We further point to a critical need to assure 
farmers have access to the qualified and trusted legal and technical 
assistance necessary to protect their land.
    In October 2019, Rural Coalition member group, the North Carolina 
Association of Black Lawyers Land Loss Prevention Project authored a 
Continuing Legal Education (CLE) manuscript ``Assisting Heir Property 
Owners Facing Natural Disasters: History and Overview of Heirs Property 
Issues,'' and participated in a collaborative CLE webinar to train NC 
Legal Aid volunteer attorneys on service to impacted heirs' property 
owners. According to Legal Aid's coordinator, there were approximately 
124 webinar participants on that date and the course will continue to 
be available for training purposes.
    The benefits of the expansion of individual direct legal 
intervention, technical assistance, outreach and policy innovation and 
implementation include increased property retention, removal of 
barriers to assistance programs, enhanced food access, heightened farm 
business risk management, and family engagement in multi-generational 
planning as a safeguard against inherent co-ownership vulnerabilities.
    We project that the pandemic will continue to emphasize the need 
for education on what defines sustainability and how environmental, 
economic, health stressors are intertwined and cumulative.
Modernize Farm Loan Programs
    We urge this Committee to continue its work modernize farm loan 
programs. Congress should recognize agricultural lending as a good 
investment in farmers and the farming and rural sector. These farmers 
who typically have smaller scale operations, do not need large 
operating loans. However, these loans are crucial to their operations. 
And they need access credit at the time they really need it.
    We recommend that:

   The 2023 Farm Bill emphasize the importance of investments 
        to build land tenure and sustainable and resilient operations 
        for the next generation of young, historically underserved, and 
        mid-scale farmers and ranchers as the basis of strong farm and 
        rural economies.

   Monitor compliance and assure all USDA offices serving 
        farmers automatically provide a complete receipt for service 
        for every interaction with producers and require that these 
        receipts also be reviewed by agencies to assure every producer 
        is receiving the same quality of service in each office at the 
        same time of the year.

   Microloans from FSA are beneficial to many producers 
        including in urban areas. Funding for microloans should be 
        expanded.

   Producers who are starting or transitioning farms need an 
        equitable chance to build sustainability. Our producers 
        responded strongly to proposals to provide 7 year operating 
        loans with no payments for 3 years. If a farmer who builds 3 
        years of equity, should be able to make payments on land, 
        operate the farm and gain the ability to become sustainable. We 
        urge that the 2023 Farm Bill authorize such a loan structure to 
        afford producers a chance to build equity, while assuring they 
        can cash flow their operation, and cover loan payments for farm 
        ownership.

   Smaller scale operating loans are not as attractive to other 
        lenders, nor are real estate loans that keep funds tied up for 
        long periods of time. However, because USDA holds the land as 
        collateral for real estate loans, these loans result in a 
        positive funds balance for the Federal Government. We strongly 
        recommend that FSA expand lending and allow more flexible 
        terms, including authorizing real estate loan terms for up to 
        40 years.

   Family scale producers, including young and historically 
        underserved producers should not be forced to graduate from FSA 
        agriculture credit. Within certain limits, Congress should 
        provide clear authority for these producers access affordable 
        credit from FSA they are not getting from other lenders and to 
        stay with FSA as their lender if they so choose.

   Congress should permanently waive the prohibition on 
        refinancing of other debt with FSA Direct Loans and FSA Farm 
        Ownership Loans and remove the eligibility restriction for new 
        FSA loans based on past debt write-down or other loss to the 
        agency.

   Land is in short supply, and it is rapidly sold often before 
        a new farmers can navigate the lending process. We strongly 
        support the recommendation of National Young Farmers 
        Association that FSA be authorized to pre-qualify them for 
        loans.

     TA from trusted CBO's is incredibly important.

   Congress should review and adjust or eliminate the 
        requirement for 3 years of experience requirement to protect 
        from abuses, but also to open new opportunities for producers. 
        Farmers should be able to qualify with mentorship from a 
        working farmer.

   At present, the nation's farmworkers form a large pool of 
        farmers with a deep interest in accessing land and entering 
        farming as a profession. The next farm bill should recognize 
        their skills, experience, and importance to expanding the next 
        generation of producers and adopt policies that incentive and 
        support their goal to enter agriculture.

   Congress should continue funding and expand support for the 
        heirs' property relending fund and examine proposals to 
        strengthen it.

   Congress should expand authority for FSA to accept alternate 
        forms of documentation to enable operators farming on land 
        lacking a clear legal title due to heirs' property issues to 
        receive farm numbers from USDA Farm Service Agency (FSA) and 
        thereby qualify to participate in additional USDA farm and 
        credit program beyond conservation programs and including 
        microloans for farm operating.

   The next farm bill should strengthen checks and balances, 
        including civil penalties to root out conflicts of interest, 
        unfair appraisals and other practices that serve to weaken the 
        ability of producers to retain their land, run a successful and 
        resilient farm operations, and contribute to the local economy.

   At a time when over a million families have lost members in 
        the pandemic, Congress should seek a report on how these losses 
        have affect farm ownership and operators. The next farm bill 
        should include incentives for borrowers and all farmers to 
        adopt wills and succession plans for their farms.

   Credit Issues and Protecting Distressed Farmers who are 
        Still Operational--USDA should develop a plan for standing 
        disaster program that automatically goes into effect in the 
        face of emergencies. USDA should have authority to extend as 
        far as possible a moratorium on acceleration, graduation, and 
        foreclosure for duration of the pandemic and economic recovery.

      We also further endorse the proposals in the Top Priorities for 
        COVID-19 C4 Response Legislation from the Native Farm Bill 
        Coalition, and recommend the Committee provide statutory 
        authority for use in future disasters that would allow FSA to

     Immediately and automatically defer of all FSA loan 
            principal due for the current production years and extend 
            all loans for 2 years.

     Offer payments to any lenders if they reduce the 
            interest rate of current loans by 2% and offer the same 
            reduced loan payments and extensions to their borrowers; 
            and

     Allows the use of FSA Farm Ownership loans to 
            refinance real estate and other debt to aid in recovery 
            from this crisis.
Additional Recommendations
    Equitable Relief (Sec. 5304 of Public Law 115-334)--Having made a 
compelling argument to the U.S. Congress during the 2018 Farm Bill 
debate, the House and Senate Agriculture Conference Committee, 
responded proactively to provide a provision of ``equitable relief'' 
for farm loan borrowers in those circumstances where an FSA farm loan 
employee makes a mistake--knowingly or unknowingly--and that mistake 
causes a borrower to be in noncompliance on a USDA direct loan. Section 
5304 of the 2018 Farm Bill conference report gives the Secretary of 
Agriculture the authority to offer a farm loan borrower a provision of 
``equitable relief'' when a decision of a farm loan officer causes the 
borrower to be out of compliance with the loan program. Noncompliance 
with a loan term or provision can lead to default, acceleration, and 
foreclosure. Lender mistakes (See deceptive practices 12 U.S.C. Section 
5531(d)) whether intentional or not will cause economic damage to farm 
business operations. We mention the presence of ``equitable relief'' in 
Section 5304 to highlight the existence of irregular lending practices 
having a flavor of mistake or fraud.
    We have called on USDA to assure the Equitable Relief provision of 
the 2018 Farm Bill are immediately and fully implemented with clear 
directives in handbooks to field offices. The intent of this provision 
is to protect farmers from adverse action in cases where errors were 
made on the part of FSA offices. In the time of extreme stress on both 
producers and FSA and other USDA field office staff, this protection is 
critical. Every effort should be made to help farmers and ranchers hold 
onto their land and have the economic base they need to build back 
better both their farms and the economic underpinnings of their 
communities.
    However, Congress in Section 5304 did not require regular reporting 
on incidences when Equitable Relief needed to be applied to correct 
lending mistakes. The statute must be amended to require at least an 
annual report to Congress on the implementation of equitable relief.
    Emergency Loans: Modernizations and Enhancements to Farmer 
Eligibility--The 2018 Farm Bill language allows emergency loans to 
farmers even if a farmer has been previously granted debt write down. 
Prior to the passage of the 2018 Farm Bill, a farmer cannot receive a 
USDA ``Emergency Loan'' if at any time after 1996 the farmer 
participated in a USDA Farm Service Agency primary loan servicing 
agreement that included debt write down or debt forgiveness.
    The frequent implementation of the debt ``write-down'' rule has an 
undue negative impact on socially disadvantaged in dire need of 
emergency loan. The 2018 natural disasters in North Carolina and 
California demanded modernization and enhancements in emergency loan 
programs. Indeed, farmers encounter multiple disasters that coincide 
with crop losses caused by environmental degradation, or low farm gate 
income caused by a global trade disruption.
    The 2018 language amends section 373(b)(2)(B) to exempt write-downs 
and restructurings under section 353 from what is considered ``debt 
forgiveness'' for the purposes of applying the debt forgiveness loan 
eligibility limitations. (Section 5307).
    We have recommended that the Secretary take a dual approach to 
speedily implement emergency loan eligibility. First, the Secretary 
should immediately issue a proposed rule to amend 7 CFR 764.352(b) 
which governs emergency loan eligibility requirements. Secondly, we 
have recommended that the FSA handbook identified as 3-FLP (Rev. 2) be 
amended at Page 10.1 to 10.2 to inform field staff and farmers and 
ranchers that a previous direct or guarantee loan write down is no 
longer a bar that prohibits a future application for an emergency loan.
    The Secretary should further make clear that emergency loan funds 
can be used to pay off or replace automobiles or higher interest credit 
cards that were frequently used prior to the disaster designation to 
finance farm operations. So long as otherwise permissible, the 
Secretary should further remove prohibitions for direct emergency loans 
in scenarios where farm loan borrowers have graduated from direct farm 
loan program with a history of a guaranteed loan loss claim paid by FSA 
to a guaranteed lender.
    This Committee should assure full implementation of this and all 
other authorities in the 2018 Farm Bill, and to find areas where gaps 
in authority still require additional statutory authority.
Addressing Known Discrimination in the Farm Loan System
    Congress has recognized some of the challenges SDFR face with 
respect to fairness in loan making and loan servicing. In response, 
certain statutes require the USDA to collect data on how loans made by 
race, gender and ethnic, and to establish target participation rates as 
goals in each county for making loans to socially disadvantaged farmers 
and ranchers in programs that make direct loans or that guarantee loans 
made by private lenders. However, USDA has not made this limited data 
which includes only numbers of loan applied for, made and denied to the 
county level easily available to the public. The data collected is much 
less comprehensive than proposed in this rule.
    The data collection and targeting of agricultural loans to SDFRs is 
a method of collecting data on loan making but does nothing to collect 
data on loan servicing, an action covered by the ECOA. In our long 
experience in working with producers on securing thousands of loans and 
submitting thousands of discriminations claims on their behalf, we have 
found that loan servicing is where most of the discrimination occurs 
with respect to farm loans. See GAO Report July 2019 at page 1 to 2. 
See ECOA Regulation B, 12 CFR 1002.2(n) (Discrimination against an 
applicant means to treat an applicant less favorable than other 
applicants).
    The follow section is an excerpt from the comments of the Rural 
Coalition to the Consumer Financial Protection Bureau on data in 
lending. The Committee should consider how authorities for 
accountability by CFPB, and USDA can be best connected and used by this 
Committee to assure Fair Lending.

          Under regulation B, rules designed to implement the Equal 
        Credit Opportunity U.S.D.A., FSA like all lenders, is 
        prohibited from discrimination in loan servicing. See 12 CFR 
        1002.2(n). Nevertheless, some farmers face serious 
        discriminatory loan transactions designed to end in foreclosure 
        and business operations. The known discrimination takes on many 
        different forms. Producers may face additional collateral 
        requirements and the need to demonstrate their value. 
        Appraisers in a small rural community may be more generous or 
        less stringent with some farmers than with others and may also 
        have inside information or close relationships with FSA or bank 
        staff that could influence appraisals in a way that benefits 
        some producers over others. In many instances, the agricultural 
        lender does not realize that certain transactions are 
        discriminatory by nature and design. The problem is that 
        minority farmers most often carry the burdens of discriminatory 
        farm loan transactions. Farmer related small business data will 
        serve as an educational tool for agricultural lenders who 
        knowingly and unknowingly carryon patterns and practices of 
        farm loan discrimination that have disparate impacts or 
        disparate treatments on the operations of minority farmers. 
        There discriminatory actions violate the following provisions 
        of Regulation B of the Equal Credit Opportunity Act. Farm Loan 
        Data Collection--Prohibited Basis--12 CFR 1002.2(z).: 
        ``Prohibited basis means race, color, religion, national 
        origin, sex, marital status, or age (provided that the 
        applicant has the capacity to enter into a binding contract); 
        the fact that all or part of the applicant's income derives 
        from any public assistance program; or the fact that the 
        applicant has in good faith exercised any right under the 
        Consumer Credit Protection Act or any state law upon which an 
        exemption has been granted by the Bureau.'' 12 CFR 1002.2(z).
          Farm Loan Data Collection--Prohibited Basis. 12 CFR 
        1002.4(a). Discrimination. ``A creditor shall not discriminate 
        against an applicant on a prohibited basis regarding any aspect 
        of a credit transaction.'' 12 CFR 1002.4(a). The phrase ``any 
        aspect of a credit transaction'' includes farm loan servicing 
        and should be understood as such. As mentioned earlier, farm 
        loan servicing is the state of the loan transaction where 
        minority farmers endure the most discriminatory terms and 
        conditions. Particularly, loan servicing during a disaster 
        related request places the farmer in a position that requires 
        the farmer to accept the burdensome terms and conditions or 
        face foreclosure. Some renegade farm lenders push farmers into 
        unlawful farm foreclosure after the farmer complains verbally 
        or in writing about consumer rights violations. This practice 
        must be recorded on a consistent bases to increase Department 
        of Justice investigations and civil actions against wrongdoers. 
        According to 15 U.S.C. 1691(a)(3) and Regulation B, 12 CFR 
        1002.2(z) a farm loan lender may not discriminate against an 
        applicant because the applicant has in good faith exercised his 
        or her rights under various Federal consumer protection laws. 
        See 15 U.S.C. 1691(a)(3) and Regulation B, 12 CFR 1002.2(z). 
        The final language of the proposed CFPB rule must include data 
        collection consumer whistleblower complaints so that 
        retaliation against farmers can be eliminated through strong 
        enforcement actions.
          Farm Loan Data Collection--Prohibited Basis. 12 CFR 
        1002.4(b). Discouragement. ``A creditor shall not make any oral 
        or written statement, in advertising or otherwise, to 
        applicants or prospective applicants that would discourage on a 
        prohibited basis a reasonable person from making or pursuing an 
        application.'' 12 CFR 1002.4(b). The undersigned organization 
        are aware of discriminatory terms and conditions that relate to 
        oral and written statements that discourage minority farmers 
        from making loan applications or requesting loan servicing. For 
        example, young minority farmers are told to accept the same 
        discriminatory terms and conditions: (a) loan approval based on 
        mandatory acceptance of same harsh terms placed on farm loans 
        of parents more than 20 years in the past; (b) loan approval 
        based on buying farm equipment from the lenders family member; 
        and (c) loan servicing based on farmer making a private, 
        personal loan to the loan officer, (d) completion of a loan 
        application of beginning farmer returning to take up the 
        operation of the farm he grew up on when ownership was 
        transferred to him is made contingent on him providing a 
        certified lease to allow a neighboring farmer to collect farm 
        benefits on a crop grown on the beginning farmer's land, 
        despite the fact the younger farmer had sent a cease and desist 
        order to his neighbor--and he is also told not to report this 
        situation to superiors as it might ``get the previous CED in 
        trouble'', (e) a SDFR farmer seeks an operating loan to cover 
        costs of spring planting with a plan that includes specific 
        application of treatments to improve his land, but the loan is 
        delayed until it is too late for these treatments to be 
        effective but he is required by the loan agreement to incur 
        these costs, (f) a farmer seeks the release of lien on his farm 
        in order to secure a loan from a private lender, but FSA 
        suddenly discovers a $30,000 value to the 100 year old barn he 
        is seeking to remove and replace with a facility to process 
        meat at the beginning of the pandemic, despite the fact that no 
        value for the old barn had been reflected in the appraisal for 
        the original loan, (g) a military veteran who grew up on a farm 
        and participated in the operation returns from a deployment and 
        seeks a loan to start farming again. The local office staff 
        member looks at his application in his folder, then throws the 
        folder at his head and tells him not to return ``until he can 
        demonstrate 3 years of experience.'' Such practices must end. 
        Data collection is a proven way to document and address such 
        discouragement in loan making, discouragement that often is at 
        the core of disparate treatment based on race and ethnicity.

    What remains unclear is what tools USDA has, needs, and will use to 
hold this and other offices accountable for such inequitable and 
patently fraudulent practices. The failure to do so in any tangible way 
is in our view the single biggest impediment to ever achieving equity 
and accountability in service to all producers.
    Our members have experienced many such problems on a routine basis. 
At present farmers have options to file an appeal of a decision to the 
National Appeals Division, to file a complaint to the office of Civil 
Rights and report of fraud to the Inspector General. There is a lack of 
clear guidance to help producers know which system to use to resolve 
issues that they are facing.
    We believe Congress should consider establishment of a process with 
specific contact information designed to immediately address and 
correct problems with program requirements, and internet access, but 
also related to service delivery, problems in program access, 
appraisals, especially on the attitudes of USDA workers, and not only 
the location of USDA offices but of the failure of USDA field staff to 
let farmers know how and when they can be reached.
    USDA needs to routinely measure outcomes in program participation 
as part of a proactive assessment of the operation of its county 
offices. But it should move beyond data on the application and 
participation in programs by race, gender, and ethnicity to the county 
level. It should also measure additional metrics related to its lending 
programs--specifically the month in which the farmer first contacts the 
office about a loan, and the month the loan is disbursed. The delays in 
loan making and slow walking the provision of benefits contributes is a 
continual factor in the precarious financial position of many producers 
whose cases we have reviewed.
    USDA should also routinely measure the highest and medium number of 
programs
    USDA should use comparative date from NASS and from the U.S. Census 
to assess land tenure, land concentration, broadband access, and 
factors including poverty and health disparities.
    Receipt for Service. The USDA National Appeals Division recognizes 
that FSA's employees have a greater understanding of program 
requirements. Administrative Law Judges recognize and understand that 
``while a program participant is responsible for exercising due 
diligence in understanding the requirements of a program, NAD case 
decisions recognized that it is not reasonable to expect a program 
participant to have greater understanding of program requirements than 
FSA's own employees.[''] This is why receipt for service is so critical 
to understand what farmers are told by FSA staff. It is also important 
to note that the receipt for service reveals what the farmer was not 
told in terms of program benefits and services.
    This Committee should review the use of the Receipt for Service and 
adopt new measure to assure compliance by all local offices that serve 
farmers.
Ensure Fair Access to USDA for Producers Farming on Heirs Property 
        (FSA, NRCS, NASS)
    Sections 12615, 5104 and 12607 of the 2018 Farm Bill Conference 
Report are intended to assure USDA affords fair access to its programs 
for farmers and ranchers who operate farms on ``heirs' property.'' The 
final language ensures that more farmers--especially African American 
farmers and farmers of color operating on land with undivided 
interests--can finally access critical USDA programs that enable them 
to
Tenure, Ownership, and Transition of Agricultural Land (TOTAL) Survey--
        $15 million
    Land access continues to be the biggest challenge facing beginning, 
current, and aspiring young farmers. Without secure land tenure, 
farmers are unable to invest in on-farm infrastructure or conservation 
practices critical to building soil quality, financial equity, and 
successful businesses. Land loss is also a major challenge for Black, 
Indigenous, and people of color (BIPOC) farmers who do not have clear 
titles to their land because it was passed down without a formal will; 
the land is then subject to fractured ownership among many relatives, 
becoming what is known as heirs' property.
    In the 2018 Farm Bill, Congress tasked USDA with completing an 
updated TOTAL Survey, the results of which will provide comprehensive 
data on farmland ownership, tenure, transition, and entry of beginning 
and BIPOC farmers and ranchers as a follow-on to the Census of 
Agriculture (Sec. 12607). Further, the 2018 Farm Bill required that 
this survey include data collection on the extent of heirs' property so 
that the full extent of this land tenure challenge can be understood. 
Access to this information is crucial to better understanding the 
policies and trends that lead to secure land tenure and thriving farm 
businesses.
    Unfortunately, this vital data gathering has not been funded since 
the 2018 Farm Bill was passed. Given that it requires surveying 
landowners who are not as well connected to the USDA--including non-
farming landowners and heirs' property owners--it requires dedicated 
funding this year to make up for the lapses over the last two funding 
cycles.
    To ensure that the USDA can produce a robust analysis leading to 
better access and more secure land tenure for young and historically 
underserved farmers alike, we urge this Committee to assure that 
Congress fund the survey for FY 2023 at the level of $15 million (the 
total authorized amount), and that you increase the investment for this 
important study in the 2023 Farm Bill.
    Current and comprehensive data is critically important to 
understanding the challenges farmers face related to land access and 
transition. We urge policymakers to ensure the data collection 
components of the 2018 Farm Bill are fully implemented and to continue 
to invest in recurring data collection, reporting, and research on 
farmland tenure, ownership, and transition to better understand the 
large-scale trends and challenges related to land access for beginning 
and historically underserved producers.
    We [also] urge this Committee to assure this Land Tenure is 
expeditiously conducted because of the growing volatility in land 
ownership and operations, and the potential impacts to farmers and 
ranchers, rural communities and the entire farm and food sector. We 
have seen volatility in land values impact the entire agriculture 
lending system in the past in years past, including 1987, and we 
believe it is of critical importance now to understand and mitigate 
these impacts as we enter the 2023 Farm Bill debate.
    We will be providing additional recommendations on the issues 
covered in the testimony. We pledge to work with you in any way we can 
to support the adoption of landmark 2023 Farm Bill.

    The Chairman. Thank you. Thank you very much, Mr. Tillman.
    And now, Mr. Brown, please begin when you are ready.

STATEMENT OF HON. ADAM BROWN, OWNER, B&B FARMS, DECATUR, IL; ON 
                 BEHALF OF ILLINOIS FARM BUREAU

    Mr. Brown. Chairman Scott, Ranking Member Thompson, other 
Members of the Committee, I want to begin by thanking you on 
this Committee for all that you have done for America's farmers 
and ranchers getting through the difficult times of the past 
several years. The farm economy has bent, but it has not broken 
through volatile commodity prices, a pandemic, and now a 
resulting supply chain and inflation crisis that are driving up 
input prices for production and increasing the cost of goods 
across the economy.
    My name is Adam Brown. I am a sixth-generation family 
farmer from central Illinois, where I raise 1,100 acres of corn 
and soybeans on some of the blackest soil in the world. Our 
ancestors broke sod in the 1860s to provide for their family, 
who had pioneered West from New Hampshire. The land proved to 
provide great food, a home, and way of life for the family. The 
care and conservation of that land began then and has persisted 
through multiple generations and continues today.
    At the end of 2017, my grandpa passed away as I was in the 
process of buying my uncle's share and preparing to buy my 
dad's share in the operation. Cash flow and debt loads were 
strained by the passing of my grandpa, as I would need to 
purchase several hundred acres from the many heirs of my 
grandparents' estate. The USDA FSA's Direct Farm Ownership 
Joint Financing Loan Program was a solid fit for this 
transaction. As my lender, Farm Credit Illinois, also had 
stellar young, beginning, and small farm real estate offerings 
to make the 50/50 split a workable solution for my situation. 
Still, to get through the cash crunch, I had to rely on 
participation in other USDA programs like the NRCS's 
Conservation Stewardship Program and FSA's Marketing Assistance 
Loan Program.
    After the successful acquisition of the other heirs' 
portions of my grandparents' estate, I had to change the 
formation of my business from a partnership to a sole 
proprietorship, which resulted in changes to USDA paperwork. 
The unwillingness of NRCS to review my application to CSP 
because of an administrative paperwork error remains a singular 
source of frustration and speaks to the inefficiencies of 
government that oftentimes prevent new and beginning farmers 
from gaining access to the programs they need to stay afloat 
until they have their feet under them.
    After a year of being forced to the sidelines, however, I 
finally re-qualified for the conservation program. And as a 
result, I expanded my use of no-till practices and, for the 
first time, created a pollinator habitat and utilized cover 
crops on my farm.
    Government programs certainly can't make up for every cash 
flow problem a farmer may face. Tight margins over the last few 
years have forced us to find ways to tighten our budget to make 
ends meet, including the liquidation of nonessential farm 
equipment, the most painful sale being that of the first 
tractor that my dad ever rode on, a 1950 Ford Ferguson TE20, 
which brought in $1,480. And while that was a difficult and 
emotional step to take, the survival of my farm for the next 
generation is my top priority, just like it was for the 
generation that passed it on to me.
    Even those tough business decisions were not enough. I 
still needed some help to keep things running. And the loan 
programs that were available for young, beginning, and 
underserved producers came through for me in one of the most 
difficult and stressful times of my life.
    I found ways to pay it forward as I served on the most 
recent USDA Advisory Committee on Beginning Farmers and 
Ranchers, where I led a workgroup dedicated to providing 
recommendations to USDA for improvements to existing programs 
on behalf of new and beginning farmers and ranchers. These 
recommendations include access to capital, access to land, 
tools for transition, information, and customer service, as 
well as a revised and aligned definition of a beginning farmer 
and rancher.
    According to FSA, there has been no carryover of approved 
unfunded loans since Fiscal Year 2018. Therefore, heading into 
discussions for the next farm bill, the focus should be on 
ensuring that everyone that potentially qualifies for a loan 
under the program has equal access to it and that both the farm 
operating and farm ownership loan limits are keeping pace with 
the rising costs of farm equipment and farm real estate.
    I thank you again for the opportunity to share my story 
with you today. I look forward to any questions you may have.
    [The prepared statement of Mr. Brown follows:]

 Prepared Statement of Hon. Adam Brown, Owner, B&B Farms, Decatur, IL; 
                   on Behalf of Illinois Farm Bureau
    Chairman Scott, Ranking Member Thompson, and other Members of the 
Committee, I want to begin by thanking you for everything this 
Committee has done to help America's farmers and ranchers get through 
such a difficult time. The Farm Economy has bent, but not broken, 
through volatile commodity prices, a pandemic, and now a resulting 
supply chain and inflation crisis that are driving up input prices for 
production and increasing the costs of goods across the economy.
    My name is Adam Brown. I'm a sixth-generation family farmer from 
Central Illinois, where I raise 1,100 acres of corn and soybeans on 
some of the blackest soil in the world. Our ancestors broke sod in the 
1860s to provide for their family who had pioneered west from New 
Hampshire. The land proved to provide great food, a home and way of 
life for the family. The care and conservation of that land began then, 
has persisted through multiple generations and continues today.
    At the end of 2017, my grandpa passed away as I was in the process 
of buying my uncle's share and preparing to buy my dad's share in the 
operation. Cash flow and debt loads were strained by the passing of my 
grandpa, as I would need to purchase several hundred acres from the 
many heirs of my grandparents' estate. The United States Department of 
Agriculture (USDA) Farm Service Agency's (FSA) Direct Farm Ownership 
Joint Financing Loan program was a solid fit for this transaction, as 
my lender Farm Credit Illinois also had stellar young, beginning, and 
small farm real estate offerings to make the 50-50% split a workable 
solution for my situation.
    Still, to get through the cash crunch, I had to rely on 
participation in other USDA programs like the Natural Resources 
Conservation Service's (NRCS) Conservation Stewardship Program (CSP) 
and FSA's Marketing Assistance Loan program. After the successful 
acquisition of the other heirs' portions of my grandparents' estate, I 
had to change the formation of my business from a partnership to a sole 
proprietorship, which resulted in changes to USDA paperwork. The 
unwillingness of NRCS to review my application to CSP because of an 
administrative paperwork error remains a singular source of frustration 
and speaks to the inefficiencies of government that can oftentimes 
prevent new and beginning farmers from gaining access to the programs 
they need to stay afloat until they have gotten their feet under them. 
After a year of being forced to the sidelines, however, I finally re-
qualified for the Conservation program. And as a result, I expanded my 
use of no-till practices--and for the first time--created a pollinator 
habitat and utilized cover crops on my farm.
    Government programs certainly can't make up for every cash flow 
problem a farmer may face. Tight margins over the last few years have 
forced us to find ways to tighten our budget to make ends meet, 
including the liquidation of non-essential farm equipment. The most 
painful sale being that of the first tractor that my dad ever rode on: 
a 1950 Ferguson Ford T20, which brought in $1,480. And while that was a 
difficult and emotional step to take, the survival of my farm for the 
next generation is my top priority, just like it was for the generation 
that passed it on to me. Even those tough business decisions were not 
enough. I still needed some help to keep things running, and the loan 
programs that were available for Young, Beginning and Underserved 
producers came through for me in one of the most difficult and 
stressful times of my life.
    I have found ways to pay it forward as I served on the most recent 
USDA Advisory Committee on Beginning Farmers and Ranchers where I led a 
workgroup dedicated to providing recommendations to USDA for 
improvements to existing programs on behalf of New and Beginning 
Farmers and Ranchers. These recommendations included access to capital, 
access to land, tools for transition, information and customer service, 
as well as a revised and aligned definition of a beginning farmer and 
rancher.
    According to FSA, there has been no carryover of approved, unfunded 
loans since Fiscal Year 2018. Therefore, heading into discussions for 
the next farm bill, the focus should be on ensuring that everyone that 
potentially qualifies for a loan under the program has equal access to 
it, and that both the Farm Operating and Farm Ownership loan limits are 
keeping pace with the rising costs of farm equipment and real estate.
    I thank you for the opportunity to share my story with you today, 
and I look forward to any questions you may have.

    The Chairman. Thank you very much. I thank each of you for 
your excellent testimonies. They were very, very good.
    And now at this time, Members will be recognized for 
questions in order of seniority, alternating between Majority 
and Minority Members. You will be recognized for 5 minutes each 
in order to allow us to get as many questions in. And also, 
Members, we are on a tight schedule, so I am going to hold 
strict discipline to your 5 minutes because we will soon have 
votes on the floor. And we would like to make sure we are able 
to conclude our hearing before the noon hour. I appreciate your 
cooperation in this.
    And of course, as I always say, please keep your 
microphones muted until you are recognized in order to minimize 
background noise.
    And my first question will go to you, Mr. Kauffman. You 
mentioned that the global uncertainties such as the war in 
Ukraine may impact our financial stability, going forward, and 
that is an excellent point. So if the war continues into 2023, 
what financial impact will this have on our agriculture sector?
    Dr. Kauffman. Well, thank you for the question. And I guess 
I would start by recognizing that the war has had a pretty 
direct impact on the price of commodities but also the price of 
inputs, specifically fertilizer but also fuel, that has created 
an environment of uncertainty and elevated volatility in 
markets. It has made decision-making a bit more challenging. It 
has elevated the need for financing in some cases. It has also 
elevated the sense of concern among lenders just given the push 
on profit margins from some of those increases in costs.
    The Chairman. And tell me, what suggestions, what 
recommendations could you share with this Committee as to what 
you feel we need to do?
    Dr. Kauffman. I would suggest that it starts with 
disciplined risk management strategies on behalf of producers. 
That might include marketing strategies. It might include 
leveraging the programs that are there that some others on the 
panel have already discussed. It would also include interacting 
directly with lenders to understand the position of lenders and 
some of the things that they might require to ensure that the 
capital is there to move forward.
    The Chairman. And would you not agree that--I was 
absolutely stunned to find out--and many people did not know 
this until I mentioned to our Chairman of our Federal Reserve 
and my Financial Services Committee, that right now, Russia 
controls and produces 66 percent of all the fertilizer. So my 
question to you, how do you feel we might be able to address 
this? We have some funding going forward in another bill, but I 
would like to hear from you. What do you think we can do? Can 
we stimulate more fertilizer production and growing right here 
at home?
    Dr. Kauffman. There may be some possibilities of ways to 
increase fertilizer production, but it could take some time to 
do that. As I mentioned earlier, I think having some of the 
discussions between those entities, those that might be 
involved with securing those inputs could be useful. I know in 
many cases farmers struggle not just with the cost of those 
inputs but even just the availability and how to navigate some 
of the systems. I think having processes in place that might 
clarify some of those could be useful.
    The Chairman. Yes, I would certainly agree with you.
    Now, Ms. Davy, you know and said that in your testimony 
that Black farmers have historically been denied access to 
credit. Black-owned farms are often less profitable than White-
owned farms and less able to obtain Federal payments that 
support their profitability. We are addressing these. But let 
me ask you, would you share with us what you think are some of 
the most effective ways in which we can break this cycle, Ms. 
Davy?
    Ms. Davy. Thank you for the question. I think that we do 
need and would benefit from a more robust civil rights process 
at the local levels. That is where the majority of the 
complaints of perceived and actual discrimination are taking 
place. So one recommendation could be the development of a 
local civil rights ombudsman that conduct annual civil rights 
reviews, something that has not consistently taken place, 
despite the acknowledgement of the discrimination that was 
happening at the local level through the class-action 
discrimination lawsuits.
    The Chairman. Well, thank you. And we are addressing that, 
and we will continue to do so.
    And now with that, I will now turn to the distinguished 
gentleman from Pennsylvania, my friend, Ranking Member Thompson 
is now recognized.
    Mr. Thompson. Well, thank you, Mr. Chairman. First of all, 
Mr. Brown, I commend you for all that you have done in just 5 
years of farming. Eleven hundred acres of prime Illinois farm 
ground isn't cheap. And it is a true success story that you 
were able to utilize these programs in the way that they were 
intended, to transition the farm from your grandfather, father, 
and uncle.
    In your experience with several different credit programs, 
what do you believe was the most successful? And did you have 
any complications or issues that we can look to address in the 
next farm bill?
    Mr. Brown. Thank you, Ranking Member Thompson. I would say 
that the most successful program was the Joint Farm Ownership 
Loan Program where I was able to establish real estate in my 
name early on in my operation, and that was through joint 
financing between the FSA's program and Farm Credit Illinois, 
which has a stellar what we call FreshRoots Young & Beginning 
Farmers program. Giving access to capital for young, beginning, 
and small farmers is an initiative obviously near and dear to 
my heart, but I want to see other farmers in my same boat 
succeed. And I don't think I am uncommon in the approach that I 
have taken and the access to capital for young farmers just 
starting out will continue to be an issue down the road. So I 
would ask that that program be extended and that the caps on 
that program be raised as the costs of our inputs, and the cost 
of our land continue to increase as well.
    I would mention that my troubles transitioning through the 
CSP program, the Conservation Stewardship Program, were 
incredibly frustrating as we changed the structure of our farm 
from a partnership to a sole proprietorship. And I think that 
stumbling block continues to be an issue for farms as they 
transition from one generation to the next.
    Also, I think it is important that the USDA acknowledge the 
Advisory Council for beginning farmers and ranchers. We had a 
lot of proposals that have not been acted upon by the USDA at 
this point. So thank you.
    Mr. Thompson. Well, thank you. One of the issues I hear, 
the most reoccurring question I heard--and it was actually a 
phone call just 2 days ago, most recently, from new and 
beginning farmers and, quite frankly, seasoned farmers that are 
struggling knowing what to do with their farmland, the 
transition is the issue of solar fields. In the rush both at 
the Federal and state level for alternative green energy, we 
have consistently had very generous subsidies and tax breaks 
that has driven up the price of leasing ground. And for young 
and beginning that is kind of where normally folks will start 
with trying to lease off of larger tracts of lands from other 
farmers, and it has pushed the value of this acreage, these 
leases for solar well--at least in my experience the people I 
am talking with--well beyond what typically you would be able 
to lease for agriculture. I am not opposed to solar obviously. 
I would sooner see it on marginal lands, lands that are maybe 
environmentally sensitive versus fertile production lands. But 
I heard that on a call that I did initially with young 
agriculture professionals throughout the Commonwealth of 
Pennsylvania, and it has been a consistent theme.
    So in your experiences, and this is for all witnesses, have 
you heard about this issue at all? Is this something that is in 
the different states represented here?
    Dr. Kauffman. I can start by offering just one comment, and 
that is to agree that what we have heard is that there are 
certain aspects of land that do add value to that land. It 
might be by way of solar farm, it could be wind operations, it 
could be other mineral rights. And that has been going on for 
some time. What that has led to is obviously a larger equity 
for those that own the land but, perhaps to your point, raising 
the costs for those that are trying to operate. And so it does 
make it a little bit more challenging than for those trying to 
enter, just given the high cost of entry.
    Mr. Thompson. Thank you, Dr. Kauffman. Just real quickly, 
Dr. Kauffman, what is the near-term threat to credit conditions 
for farmers? Is it high interest rates, weakening commodity 
markets, lower land values, or something else?
    Dr. Kauffman. I think in the near-term it is the high input 
costs combined with a potential for reductions in commodity 
prices. For this year, much of that environment looks pretty 
sound because many farmers do make sales in advance and they 
have already secured their inputs in previous months. The 
concern might potentially be moving to the end of this year as 
they are securing those inputs for next year, and there could 
be lower profit margins.
    Mr. Thompson. Very good, thank you.
    The Chairman. Thank you very much.
    And now the gentleman from Massachusetts, Mr. McGovern, who 
is also the Chairman of our House Committee on Rules, is now 
recognized for 5 minutes.
    Mr. McGovern. Well, thank you to all of our witnesses. And 
I want to thank the Chairman for convening this important 
hearing. I think it is critical that we hear directly from 
farmers when systems that are supposed to empower them aren't 
working the way that they should be.
    And I will just quickly say to my colleagues that I think 
we need to be prepared to be responsive to what we have heard 
today.
    Ms. Asherman, I want to make sure I get this right. When I 
was reading your testimony, did you say you grew up in 
Massachusetts?
    Ms. Asherman. Yes, I was born and raised in Boston.
    Mr. McGovern. Well, maybe that is why I thought you were 
particularly compelling today. But in any event, I want to 
congratulate you on all your successes, and we are certainly 
proud of the work that you are doing. But what struck me during 
your testimony was how much your story reminded me of stories 
that I have heard from farmers and would-be farmers in my 
district. They are interested in getting away from traditional 
row crops and opting for sustainable practices with the goal of 
contributing to local food systems. Often, they are the ones 
helping to build local food systems from the ground up.
    But just as you detailed, translating the desire to start 
farming into being launched is a daunting task. So I have a 
two-part question for you. First, could you please elaborate on 
some of the hurdles that you face while seeking a loan from 
FSA? And do you feel that FSA and other lenders sufficiently 
value your type of operation in the overall farm economy?
    Ms. Asherman. Thank you for the question. I would say, I 
mean, the initial hurdle for myself was that I had no 
experience or understanding on how to go into any type of 
ownership process. My dad sort of explained to me, most people 
just buy one home in their life, and that is a pretty big deal. 
So just navigating the language, the paperwork was its own 
initial challenge, and I think that was really made more 
difficult by the fact that the language that my loan officers--
their expectation of what a farm would look like, what it would 
gross per acre, what it could produce per acre, was just in a 
totally different realm from what my understanding was because 
they were really talking about a different kind of farming.
    And that sort of goes to your second part of the question, 
which is just there are very different kinds of farming 
practices out there, and if the loan officers on the ground are 
not open or well-versed and familiar in the kind of operation 
that you are running, they are not only going to struggle to 
make sense out of your supporting documents but they, I feel 
like, often do undervalue the type of farming that you do. And 
I definitely feel like a minority in my area in terms of the 
type of farming that I am doing.
    Mr. McGovern. Well, as a follow-up, let me just say, I am 
inspired by the work you are doing to build a more just food 
system and one that works for existing farmers and aspiring 
farmers while making healthy food accessible to every 
community. So how can expanding access to credit for farmers 
like you help with that vision?
    Ms. Asherman. Well, I am a big proponent of the local 
economy. I absolutely have respect for larger farmers that are 
shipping international and growing on just a totally different 
scale than what I am doing. I feel like local food economies 
are the most resilient food economies. I feel like I saw this 
during the pandemic when Walmart was running out of food and we 
were still setting up at the farmers' market. I think that 
smaller farms that are selling within a more narrow radius are 
keeping that money in the local economy better. I think that we 
are employing people in our communities who are staying in our 
communities. And I just believe in the power of smaller farms, 
producers of our domestic food.
    Mr. McGovern. Well, I thank you for your answer, and I 
share your vision here. And I want to thank the entire panel of 
witnesses.
    And Mr. Chairman, I will yield back my time.
    The Chairman. Thank you, Mr. McGovern.
    And now the gentleman from Georgia, Mr. Austin Scott, is 
now recognized for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. And I 
want to mention with regard to the FSA loan process, one of the 
most successful farmers I know in Georgia who I have had a 
relationship with for a long time, called me. He was trying to 
help his son get started. And after about a year, he finally 
went to the local bank and just cosigned the note with his son. 
And his comment to me was nobody who could access credit 
anywhere else would go through the process at FSA. So I am sure 
that the loan process is flawed. I think we need to work on 
that.
    I do want to mention one thing, and I want to say this 
cautiously, but I do know we are trying to make progress with 
this. And this really goes, I guess, very quickly to Ms. Davy, 
Mr. Tillman. But one of the key issues in my area in talking 
with professionals at Fort Valley State is the heirs-related 
issue and no clear title to property. And so when there is 
timber on the property, the timber companies are scared to 
contract to cut the timber because it is the heirs-related 
issue and no clear title. It is hard for a bank to loan money 
without clear title. I know we are doing some USDA--there are 
some USDA initiatives with that right now.
    But I will leave it with you, Mr. Tillman. I am from 
Georgia. Is the heirs-related issue with minority farmers--how 
big of an issue is that in Oklahoma where you are from, and how 
much progress is being made on resolving that issue?
    Mr. Tillman. It is most definitely a problem. When you have 
a parcel of land and you have 25 or 30 heirs to it, that is 
kind of a pickle of a mess. And trying to sort through things 
of that nature is quite expensive and basically very hard to 
deal with. And we are basically doing a lot of heir property 
workshops and development of wills and things of that nature to 
make it that much easier for the next generation, because all 
of that basically occurs when the unexpected happens, and then 
you got that challenge there of trying to divide up everything 
equally among all the heirs.
    Mr. Austin Scott of Georgia. David and I have been good 
friends for a long time, and we have some pretty heated 
conversations on some of the issues revolving around race and 
agriculture, but this is one of the issues that I do--this 
clearly disproportionately impacts minority farmers, and it is 
one of the issues that needs to be resolved for everybody. And 
so I look forward to working to help continue to resolve that 
because if you don't have clear title, you can't get the loan. 
That is the bottom line.
    Mr. Tillman. Right.
    Mr. Austin Scott of Georgia. And I do think through Fort 
Valley State and some other institutions we can work to help 
people. It won't be perfect, but it will be better than it is.
    I do want to mention this, Ms. Asherman. You hit on this. 
Ninety percent of our food supply in this country comes from 
about 12 percent of the farmers. We have to have large-
production agriculture. One of the things I see that is so 
difficult for our beginning, young, and small farmers is it 
costs more when you are a beginning, young, and small farmer. 
And so what you get if you are a big farmer might pay the 
bills, it might not right now, but it won't pay the bills that 
same ratio if you are a small farmer. How far do you have to 
travel to get to a farmers' market, Ms. Asherman? Ms. Asherman?
    The Chairman. You may need to unmute, Ms. Asherman.
    Ms. Asherman. I am sorry, my internet is extremely slow. I 
was trying to unmute. I drive 2 hours to my major market, and I 
also sell on the farm and a half an hour away [inaudible] 
market.
    Mr. Austin Scott of Georgia. This is one of the issues, Mr. 
Chairman. If you are a beginning, young, and a small farmer and 
you are growing the way Ms. Asherman is, you have to have 
access to markets to sell your products. And as our farmers' 
markets have closed, just like as our smaller meatpacking 
facilities have closed throughout Georgia, it has made it that 
much more difficult for our beginning, young, and small 
farmers. And candidly, it has given more control of our food 
supply over to the largest of the corporations.
    With that, I know my time has expired, and I apologize for 
your internet service, Ms. Asherman. I am hopeful that your EMC 
will be delivering 1 gigabyte to you shortly.
    [Information supplied by Ms. Asherman is located on p. 
1369.]
    The Chairman. Thank you, Mr. Scott.
    And now the gentlelady from North Carolina, Ms. Adams, who 
is also the Vice Chair of the Committee on Agriculture, is now 
recognized for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman. Thank you also to the 
Ranking Member for hosting the hearing. This is an important 
topic to our witnesses. Thank you for your testimony. It is 
timely.
    There is a new generation of farmers in America. They are 
different from older generations, younger, more diverse, and 
choose to grow other crops. An increasing number of them are 
women. At the same time, farmland is transitioning to new 
hands, and while the 2018 Farm Bill made strides in programming 
and microloans, there are still major gaps in the Federal 
agricultural credit system.
    Ms. Davy, your testimony briefly mentions these gaps, 
especially for Black and minority farmers. Farm Service Agency 
loans require 150 percent equity on purchase loans, require 
copious amounts of paperwork, and they take months to process. 
So what should Congress do to simplify the application process 
for young and socially disadvantaged farmers?
    Ms. Davy. Thank you for the question. Congress has already 
done a lot. And with regard to the previous question that was 
asked with regard to the heir property issue, the most recent 
farm bill, the 2018 Farm Bill, Congress already acknowledged 
the need for services for heirs property landowners, and 
authorized the Heir Property Relending Program. And so I think 
that the microloan program is another example of the 
intentionality that Congress has brought to addressing these 
communities and this issue.
    I think that the loan application process itself has had a 
lack of transparency. There are times when farmers are telling 
us that they are receiving requests for duplicitous 
information. And in the example of the farmer that I spoke with 
that was told that the farm home was too nice for the property, 
when he asked his FSA agent to explain what the house had to be 
like or look like to conform with their expectations of what a 
farmhouse should look like, there was never an explanation 
given. There has never been really any clear, transparent 
guidelines on what pre-approval or what an approved loan would 
look like. And so there needs to be assistance in addressing 
the information of what is required up-front, as well as a 
process that is streamlined in many ways similar to the reduced 
paperwork burden of the microloan process, but I definitely 
think transparency.
    Ms. Adams. Thank you. Thank you, ma'am. Okay. So let me ask 
about ag's government-sponsored enterprise, GSE farm credit. 
Congress requires other GSEs to set aside their profits for 
grants. So should Congress mandate similar set-asides as grants 
for farmers? Ms. Davy?
    Ms. Davy. I am sorry----
    Ms. Adams. Should Congress mandate similar set-asides as 
grants for farmers? I mean, they require other GSEs to set 
aside their profits for grants. So should we mandate similar 
set-asides as grants for farmers?
    Ms. Davy. We are grateful for the set-aside programs that 
exist and definitely think that any opportunities to expand 
set-asides that would benefit socially disadvantaged farmers 
and their ability to own and control their finances would be a 
benefit to all----
    Ms. Adams. Great. Okay. Thank you very much. Dr. Kauffman, 
you mentioned that demand for farm loans is expected to rise. I 
was surprised to learn from Ms. Asherman that Farm Credit and 
Farm Service Agency loans are not reported to credit bureaus. 
So can you help me understand why that is and the impact it may 
have on farmers' ability to build credit?
    Dr. Kauffman. I can't speak specifically, I guess, to the 
reporting mechanisms. My comment was to recognize that some of 
the credit demands appear to be rising in conjunction with the 
rising input costs.
    Ms. Adams. Okay. All right. Thank you very much. Mr. 
Chairman, I am going to give the 51 seconds back to you. I 
yield back.
    The Chairman. Thank you very much, Ms. Adams.
    And now the gentleman from Tennessee, Mr. DesJarlais, is 
recognized for 5 minutes.
    Mr. DesJarlais. I thank the Chairman. I just have a couple 
of quick questions, and I was going to address those to Mr. 
Brown.
    First, supporting the next generation of farmers is a huge 
priority for all Members of this Committee. If the elimination 
of stepped-up basis had occurred prior to your generation, how 
would it have impacted your ability to maintain the farm?
    Mr. Brown. Thank you for the question, Congressman. 
Stepped-up basis changes would be devastating for our 
operation. As a sixth-generation family farmer, my intent is to 
pass the farm on to the next generation and to take advantage 
of any tax breaks that are at all possible will just provide us 
the opportunity to feed that money back into the operation 
where we thrive on stewardship of our land and growing the 
economy in our rural town. As you know, keeping money locally 
is very important for us as farmers, and local towns are really 
struggling for us, our local bank and our local elevator. So as 
much of that money as we can keep in the local economy, we 
will.
    Mr. DesJarlais. Okay. Second, I often find that some 
perceive beginning farmers and ranchers that have smaller 
operations or operations that are not their full-time job. 
Could you add some color to why this perception is wrong and 
the importance of beginning farmers and ranchers of all sizes, 
including larger operations?
    Mr. Brown. Sure. Let me say that as our operation is 1,100 
acres, I would consider that small in this day and age. We have 
to compete with very large corporate-type farms, which have 
access to economies-of-scale that we can't readily compete 
with. So, as I mentioned in my testimony, we like to take 
advantage of conservation programs and continue to incentivize 
programs that we have done in the past and build up our soil 
quality and efforts to maintain a healthy community.
    It is very important for me to keep a corn and soybean 
operation. Our conventional system is what I am used to, what I 
know well, and what we built our grain system around. We are 
currently putting up a grain bin and trying to be as efficient 
as possible. And if very small, niche farms are more heavily 
incentivized than ourselves, it puts me at a competitive 
disadvantage because I can't pivot as quickly as some of those 
operations as we continue to focus on corn and soybean 
operation.
    Mr. DesJarlais. Okay. Well, Mr. Brown, thank you for being 
here today. And I would like to thank all the witnesses for 
being here for their testimony for this important hearing.
    And, Mr. Chairman, I will yield back the balance of my 
time.
    The Chairman. Thank you very much.
    And now the gentlewoman from Illinois, Mrs. Bustos, who is 
also the Chair of the Subcommittee on General Farm Commodities 
and Risk Management, you are now recognized for 5 minutes. Mrs. 
Bustos? You may want to unmute, Mrs. Bustos.
    If not, we will come back to Mrs. Bustos.
    Now, we will recognize the gentlewoman from Ohio, Ms. 
Brown, for 5 minutes.
    Ms. Brown of Ohio. Thank you, Chairman Scott and Ranking 
Member Thompson, for holding this hearing.
    Access to credit is one of the most important components of 
long-term success for young, beginning, and underserved farmers 
and ranchers, and Congress must do all it can to support these 
farmers and ranchers. I represent the City of Cleveland, an 
urban area which many of my constituents live in food deserts 
and have limited access to fresh fruits and vegetables. Urban 
farming ventures offer an innovative solution to fighting food 
insecurity and building healthier communities.
    Vice President Kauffman, thank you for joining this panel. 
In your role at the Federal Reserve Bank of Kansas City, you 
examine agriculture credit condition and farm finances. Can you 
please speak to the accessibility of credit to urban farmers, 
how they are using these loans, and whether the loans are 
sufficient to meet their needs?
    Dr. Kauffman. Well, the first thing that I would suggest I 
guess there is that, generally speaking, the access to credit 
is one where those that have the most established relationships 
have typically been most easily able to navigate some of the 
systems with credit. So that has been maybe a bit more of a 
challenge for some of those that are exploring niche 
opportunities such as those in urban locations. There are 
opportunities, though, for those individuals, and it seems like 
some of those niche opportunities have become more prominent, 
alongside some of the other comments about local food systems.
    Ms. Brown of Ohio. Okay. So it sounds like there are some 
challenges with accessibility, so if you could speak to how 
Congress can improve these programs to better serve urban 
farmers.
    Dr. Kauffman. I think one of those might be to recognize 
where there could be opportunities to, again, help with the 
relationship development, understanding what the programs are, 
understanding what the resources are, and maybe contacts that 
can help connect those that recognize where there are market 
opportunities with those lenders that may be unfamiliar with 
some of those opportunities but still stand at the ready to be 
able to provide that credit.
    Ms. Brown of Ohio. Thank you so much. Well, with that, Mr. 
Chairman, I will yield back the balance of my time.
    The Chairman. Thank you, Ms. Brown.
    And now the gentleman from Illinois, Mr. Davis, is 
recognized for 5 minutes.
    Mr. Davis. Thank you, Chairman Scott. I also want to thank 
Ranking Member Thompson. Earlier this Congress, I introduced 
the Farm Credit Administration Independent Authority Act (H.R. 
7768) with my colleagues Representatives Jimmy Panetta, 
Michelle Fischbach, Abigail Spanberger, and Angie Craig to 
mitigate a serious threat to the viability of the Farm Credit 
System from the CFPB to implement an overreaching one-size-
fits-all proposed rule on small business lending data 
collection. The proposed rule would demand new, costly IT 
infrastructure, additional staff, and would ultimately make 
lenders guess the demographic information of a borrower in the 
name of fair lending if left unreported. Our bill clarifies the 
Farm Credit Administration as the independent regulator of the 
Farm Credit System and would stop the implementation of the 
CFPB's proposed rule as it applies to Farm Credit.
    Right now, we are working to move this bill through the 
appropriations process, given the time-sensitive nature of this 
issue and the immediate harm that it would cause rural America. 
And I hope that the Rules and Appropriations Committees will 
work with us to resolve this quickly. Farm Credit System 
lenders have proven to be an effective tool for rural 
communities, and we must preserve their independent regulatory 
status.
    Now in the context of the conversation that we are having 
today on the state of credit for young, beginning, and 
underserved producers, this is an important issue we should be 
seeking to address in the immediate. On top of all the supply 
chain issues, increasing input costs, raging inflation, we 
can't also put the availability of credit on the line that will 
only serve to discourage individuals like each of you from 
seeking careers in farming and agriculture.
    Now, my question, and I will start with my good friend, 
Representative Brown, if new and beginning farmers do not have 
continued access to ag-lending entities like the Farm Credit 
System, what could the future of your operations look like, and 
do you see it as a barrier to entering the field?
    [Information supplied by Ms. Asherman is located on p. 
1371.]
    Mr. Brown. Well, I would hate to even imagine what it would 
look like for us to not have Farm Credit in the mix. Farm 
Credit Illinois has been the steady hand in our operation 
through our transitioning farm, and they offer educational 
courses as well as through their FreshRoots Program that I 
noted before, breaks the interest rates on operating notes and 
real estate notes for young farmers. In fact, about 35 percent 
of new notes that come to Farm Credit Illinois are from young, 
beginning, and small farmers. And so we are growing the future 
of Illinois agriculture. Without the assistance of Farm Credit, 
I would be hugely concerned.
    Mr. Davis. Well, I mean, I don't know your financial 
picture. I have known you a long time. I probably wouldn't lend 
you $20. So, Adam, thank God we have the Farm Credit System to 
help operations like yours grow. And obviously I say this in 
jest because I have seen your operation and I have seen what a 
system of availability of credit from an entity like Farm 
Credit has been able to do for you and your family to grow your 
operation. So, I mean, as you mentioned, this would be a 
devastating blow to anyone in your situation or anyone who may 
be in a situation where they might not be able to get that 
available credit without the entity.
    Mr. Tillman, would you like to address the issue of the 
CFPB rule that I mentioned?
    Mr. Tillman. Well, what I see is like--and I am trying to 
deal with the credit issue. When a farmer basically gets a loan 
from FSA, he pays the loan off before a time. But he was forced 
into a lot of these things by the actions that were basically 
taken towards him as they meet and discuss where they really 
are. This was more of a threatening type thing for the 
particular farmer, so he pays it off ahead of time. Now, when 
he did that, not knowing that he would not be able to get a 
loan again like that, whereas that if somebody does some good, 
why should he be punished for it? So you can't get another 
direct loan. You graduated in other words to the other state of 
that particular deal.
    Mr. Davis. Wow, thank you.
    Mr. Tillman. And that is a point that I would really like 
to make, whereas like if you have done something good, why are 
you not able to stay with something that you are accustomed to?
    Mr. Davis. Well, thank you for your comments, your remarks. 
I yield back.
    The Chairman. Thank you, Mr. Davis.
    And now the gentlewoman from Virginia, Ms. Spanberger, who 
is also the Chair of the Subcommittee on Conservation and 
Forestry, is recognized for 5 minutes.
    Ms. Spanberger. Thank you so very much, Mr. Chairman. And 
to our witnesses, I thank you so much for your time for being 
with us today. And I was wondering if you could just give us--
and I know that you have submitted written testimony and 
certainly answered many of our questions. But if you could 
identify one thing in the system--and I know there are many 
challenges, but one thing in the system that you would change 
and what that potential impact would be. I was wondering, if 
you could wave a legislative magic wand, what would you suggest 
for us? And I open it up to any of the witnesses.
    Ms. Davy. If I had my legislative magic wand, I think that, 
as I mentioned in my previous answer, a more robust civil 
rights process at the local level would be the biggest need for 
our community, despite the increases in credit limits and 
despite the availability of the Heirs Property Lending Program, 
if people cannot get their applications reviewed and processed 
because of any discrimination that is occurring, that is going 
underreported and under-recognized, that barrier is 
insurmountable and doesn't even open the door to access in 
credit. And so I definitely think that would be the highest 
need at this time.
    Ms. Spanberger. Thank you. And thank you very much for your 
testimony. Certainly thank you for sharing your experiences, 
and thank you for bringing greater clarity to your answer and 
in raising awareness about having local steps for raising 
concerns or bringing challenges.
    To any of the other witnesses, would you care to add 
anything else?
    Ms. Asherman. I would love to add something. In addition to 
waving the wand for that ask, I do think that a pre-approval 
process for ownership loans is really important. It is 
something that most other lenders offer, and it would keep 
farmers competitive. And I also think that one of the amazing 
things about FSA repayment is you can make an annual payment 
instead of monthly payments. And I am assuming that is because 
FSA recognizes cash flow is very seasonal for farmers. Well, 
workload is also incredibly seasonal, so being able to do some 
of that burden, some paperwork, or do some of that preplanning, 
get a pre-approval in your off-season and then be able to look 
for land, in an ongoing fashion, would be a major benefit to 
farmers.
    Ms. Spanberger. And so you are saying recognizing that 
there is already a sort of uniqueness to the industry, if you 
will, that FSA has already taken certain steps, and so applying 
those kind of on the front end as well, those assumptions or 
those understandings. Okay. I appreciate that.
    Any of the other witnesses? I can't see in the committee 
room.
    Mr. Tillman. I would like to basically make a suggestion. 
This is administration of equity and fairness. And being of 
equity and fairness, I think that there need to be programs to 
develop based on the past discrimination of a lot of these 
things, whereas that a person who basically receives an 
ownership loan and an operating loan, the first 3 years of his 
operating loan, he should have a waiver for him to build equity 
and sustainability in this process. This will give him cash 
flow, a chance for him to basically build a sustainable base 
for his operation. And with this, he can therefore take the 
monkey off his back and be able to actually manage, operate, 
meet the necessary needs of his farming operation.
    Ms. Spanberger. And have that breathing room as things are 
getting up and started and the operation is sort of working out 
the challenges. That makes sense. Well, thank you very much to 
our witnesses.
    Mr. Chairman, I want to abide your instructions for us to 
stay on time, so I yield back. Thank you so much.
    The Chairman. I appreciate that, Ms. Spanberger.
    And now the gentleman from Arkansas, Mr. Crawford, is now 
recognized for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman, and I thank the 
witnesses for being here today.
    I guess there is a long history of young and beginning 
farmer programs and probably have their roots, as we know them 
today, going back to the 1960s as part of the Great Society 
under the LBJ Administration, and yet we see a continual trend 
for the average age of a farmer continues to climb. And, as 
indicated by the Chairman and the Ranking Member, we are 
bumping 60 years of age and climbing on the average age of a 
farmer in the United States.
    I had an occasion to text a good friend of mine who is a 
farmer back in my district. I said if you could distill it down 
to a sentence, what do you think could be done to bring down 
the average age of a farmer in the United States? And here was 
his surprising response, and we are going to talk about this. 
His response was stop consolidation of the ag distribution 
network.
    So if we unpack that a little bit, the genie is basically 
out of the bottle here. Can we put it back in? I don't think so 
because the smaller guys are paying 25 to 30 percent more for 
inputs because the system is set up to accommodate the 
leverage, the strength in numbers, the economies-of-scale. 
Look, I am not going to malign economies-of-scale. I don't want 
to penalize people for being successful. But at the same time, 
if we are going to backfill our production base, we have to 
think forward about how we address this and all the credit 
programs. And it is not just the Federal Government. There are 
all kinds of entities in every state that are engaged in some 
form of young and beginning farmers incentives, and yet, we 
still see those numbers climb. We haven't moved the needle at 
all.
    So I want to talk about this system that we rely on: the ag 
distribution network. And, Mr. Brown, I will start with you 
because you look like a real success story, and that seems to 
be the exception versus the rule with regard to integrating 
young farmers into the system. Give me your take on that 
statement on the ag distribution network.
    Mr. Brown. Well, I will note that the ag network is 
difficult to navigate for a young farmer. And as you mentioned, 
input costs, commodity prices, weather all present many 
variables and challenges to me as a young operator. How do I 
compete with that? I think we compete with relationships, with 
education, and you compete with the corporate advantage, what I 
would call, with hard work. And the only way that I can 
overcome these challenges is by outworking, by out-
communicating, and having greater access and understanding of 
how our operation is set up and why it is a better approach 
than maybe the corporate attitude that you mentioned.
    Mr. Crawford. Well, and I don't want to get into a dynamic 
of where we are talking about ``corporate farms,'' quote/
unquote. I am not here to try to paint a negative picture of 
economies-of-scale. We rely on those economies-of-scale. What I 
want to do is to talk about how we get that young person. I 
mean, as I said, I think you tend to be a little bit of an 
exception to the rule when we see a continued upward trajectory 
in that age. And then, on the other side of the spectrum, you 
look at Ms. Asherman, who is on small acres and that is another 
success story, again, probably a little bit of an exception. I 
am going to ask Ms. Asherman to kind of weigh in on this as 
well. What have some of the challenges been for you? It is 
probably not so much access to capital as it is to the 
competitive disadvantage you find yourself in because you are 
starting from a position of not being an economy-of-scale? Do 
you want to weigh in on that, Ms. Asherman?
    Ms. Asherman. I do. I will say that I think it is important 
to clarify that when we talk about small farmers, we need to 
clarify are we talking about small acreage or small gross 
sales? And there is a big difference between a commodity 
grower, a row crop grower, and a direct produce market grower.
    [Information supplied by Ms. Asherman is located on p. 
1369.]
    Mr. Crawford. Right. So this is illustrating the need for 
rural broadband. I think I take your point, Ms. Asherman. And 
let me just say that--and you do, you make a good point about 
the difference between gross sales versus acreage. And I am 
talking about sales really. I mean, your revenue generated from 
your efforts, not so much the size of the operation in terms of 
physical acreage but the impediments to being successful on the 
front end. And Mr. Brown alluded to this. You have to be this 
much better than your competitors to be able to get the capital 
you need, but you still start from a distinct disadvantage. To 
me, those are the things that we are going to have to wrestle 
with if we are going to move the needle on our aging farm 
population.
    With that, Mr. Chairman, I am going to yield back.
    The Chairman. Thank you very much.
    And now the gentlewoman from New Hampshire, Ms. Kuster, is 
now recognized for 5 minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman, and I 
apologize for not being available earlier. I want to thank our 
panel for being with us today. I am so grateful we are having 
this conversation.
    As it has been noted this morning, the average age of farm 
producers is 57 years old, and the most recent Agriculture 
Census in New Hampshire found that \1/3\ of our producers are 
over 65 years old, but only seven percent are under 35 years 
old. So that disparity is very troubling, especially in the 
long-term.
    I have yet to meet a farmer producer who isn't passionate 
about what they do. The work requires passion. Growing our food 
can be incredibly rewarding, but it is not an easy life by any 
means. And that is why Congress must do all we can to ensure 
that young and beginning farmers have the tools and support 
that they need to succeed. We are going to need them to 
continue the legacy of small family farms in America and to 
grow enough food to feed our nation and others around the 
world.
    We have to incentivize young people who are interested in 
agriculture, such as our speakers here today, because the 
challenges facing them are daunting. And as the next generation 
of farmers looks increasingly diverse, including women and 
people of color, including those from historically underserved 
communities, I think this will enrich our nation's agricultural 
sector tremendously.
    I am grateful there is an incredibly dedicated community of 
lenders in our state, as well as stakeholders who focus on 
education, training, and farm transition planning. We have 
great partners as well within the Farm Service Agency. But 
nevertheless, young, beginning, and underserved farmers still 
face barriers, including access to land and capital.
    Ms. Asherman, maybe it is because you are a New Englander 
at heart, but I really enjoyed your story and your testimony. 
And I was so struck by how you finally found farmland on 
Craigslist. Could you elaborate on the challenges you faced in 
finding affordable farmland and how having a pre-approval 
process for FSA direct farm ownership loans might have helped 
your situation?
    Ms. Asherman. Thank you for the question. I will say that I 
am fortunate, and in my area, affordable farmland is very 
available. I think that that is rare, and I know for a fact 
from my farming peers that that is not the case in all of the 
states and in all of the regions and even with all the regions 
within my State of Georgia. So in my case, finding affordable 
farmland was actually relatively easy.
    I think a pre-approval process would enable farmers to 
plan, and farmers are naturally planners. It is very difficult 
to be shopping for land, meet a landowner, make an offer, and 
then have to say, ``Oh, but by the way, I still have to go 
actually secure financing, so even though I have given you an 
offer, would you please wait and let me see if I can secure 
financing,'' and then have that financing process take several 
months.
    A pre-approval process would mean that you would be able to 
have a business plan where you actually know the maximum budget 
that you are going to spend on your land, be searching for a 
property within that number, and then when you find land, you 
can actually make an offer and you don't have to go then and 
secure financing.
    Ms. Kuster. Got it. Good. Well, I agree, a quick and 
streamlined process would be helpful.
    Mr. Tillman, just briefly here, thank you for raising the 
appeals point in your testimony. Can you describe this appeals 
process, and are there changes that we need to make?
    Mr. Tillman. I didn't quite hear you.
    Ms. Kuster. Mr. Tillman, did you hear my question?
    Mr. Tillman. I didn't quite understand the question. Would 
you repeat it, please?
    Ms. Kuster. You had referenced the appeals process, and I 
just wondered if you would describe that and if there is 
anything that we need to do to fix that in the upcoming farm 
bill.
    Mr. Tillman. The appeals process?
    Ms. Kuster. Appeals for denials of loans.
    Mr. Tillman. Yes. There needs to be some type of structure 
there in the appeals process. A lot of times----
    The Chairman. If I may, Mr. Tillman, the lady's time has 
expired, but if you would not mind submitting that in writing 
the really good idea you were about to express to----
    Mr. Tillman. I would appreciate that. That I would 
appreciate.
    [The information referred to is located on p. 1379.]
    Ms. Kuster. Thank you, Mr. Chairman. I yield back.
    The Chairman. Yes, ma'am. The gentleman from Georgia, Mr. 
Allen, is recognized for 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman and Ranking Member 
Thompson, for hosting this hearing today. And I want to thank 
our witnesses for taking time to talk about these important 
issues. Obviously, we are concerned about where agriculture is 
presently. It certainly--and it is a global problem. We know 
that there are a lot of threats out there. We just saw 
yesterday where the June CPI inflation report shows about a 9.1 
percent increase. And of course, one of the things that I get 
the most complaints about is if I am in the grocery store, 
people grab me and say, where is this going? Or if I am filling 
up my car at the gas station, they are saying--I mean, they 
walk up to me and say what are you going to do about this? And 
I can't imagine--well, I talk to businesses, and I know what 
you are going through on the farm. And frankly, there is not a 
lot in the farm bill to deal with this other than you just hope 
that commodity prices will keep pace with the inflation, which 
then if commodity prices keep pace, then the grocery store and 
the other things happen. So this is just this vicious cycle 
that we have to tackle. And certainly, the two ways to tackle 
that is discontinue the increase in money supply and quit 
spending government money. I mean, that is a recipe for 
inflation.
    So we can have this important farm bill oversight hearing 
on access to credit today, and I am glad that we are, but I 
know until we can get a handle on this economy and quit running 
it from the White House and let it be a market-driven economy 
so that we can get a handle on this, it is going to be 
difficult to predict what is out there.
    Obviously, we know in every industry that the average age 
of owners and operators and those in just about every business 
is almost over 58 years old. And we have to replace those 
folks. In fact, we have had, I don't know 11 million people 
disappear in the workforce. We don't know where they are. We 
don't know if they retired. We don't know what is going on.
    But I guess my first question to you, Mr. Brown, is can you 
elaborate on the recommendations that were given to USDA on 
behalf of new and beginning farmers and ranchers and 
specifically related to programs that could be included in the 
next farm bill?
    Mr. Brown. Absolutely. Thank you, Congressman Allen. I 
would first note that there is not an aligned and uniform 
definition for young, beginning farmers inside of the U.S. 
Department of Agriculture, and that is unfortunate because we 
need to understand who we are dealing with before we can shape 
meaningful programs around this group of very important 
farmers. And the recommendations that we made included access 
to capital, access to land, tools for transition, and 
information and customer service. All of these had well-
thought-out recommendations that we had formulated over about 
2\1/2\ years. Unfortunately, the USDA has acted upon zero of 
those initiatives. All of them are meaningful and helpful for 
our committee that represented young and beginning farmers, and 
I would ask that we have predictability going into the next 
farm bill. We have so much volatility throughout my operation, 
throughout the ag economy. If we know what we are dealing with, 
we can better shape.
    Mr. Allen. Yes.
    Mr. Brown. And as one of the other speakers noted, we can 
we can plan better.
    Mr. Allen. Yes.
    Mr. Brown. And that that provides us peace of mind. And 
let's not have a knee-jerk reaction here, but let's have a 
well-thought-out plan where farm families have the opportunity 
to do what we do best, and that is produce the best crops in 
the world.
    Mr. Allen. Exactly. And the last time we faced this kind of 
inflation was in the 1980s, and we know what that did to 
agriculture and to farmers.
    And, Mr. Brown and Ms. Asherman, I mean, how is this 
unpredictability impacting your decisions right now--and 
quickly; I have 24 seconds--on how you are going forward.
    Mr. Brown. Let me say that it is unprecedented for my 
operation. I have been involved in operations since I was 10 
years old, of course, but I have owned it for just the past 5 
years, and the volatility is very difficult. Fortunately, I 
bought through the Joint Financing Program, as I mentioned, FSA 
and Farm Credit, was able to secure some land before the 
massive inflation hit. But that doesn't mean that we are not 
going to face tremendous challenges in the future, so I am 
trying to keep my powder dry and prepare for the worst.
    Mr. Allen. Good. Thank you. Ms. Asherman, I am out of time.
    The Chairman. Thank you.
    Mr. Allen. If you would respond to this Committee in 
writing. I would appreciate it. With that Mr. Chairman, I yield 
back.
    The Chairman. Yes, please respond to him in writing. It 
would be very helpful.
    And now the gentlewoman from Illinois, Mrs. Bustos, who is 
also the Chair of the Subcommittee on General Farm Commodities 
and Risk Management, is now recognized for 5 minutes.
    Mrs. Bustos. Thank you, Chairman Scott. And I also want to 
say thanks to our Ranking Member for holding this important 
hearing. This has been enlightening. And we appreciate your 
time.
    As the Chairman said, I chair the Subcommittee on General 
Farm Commodities and Risk Management as part of the whole 
Agriculture Committee, and that has jurisdiction over crop 
insurance. So what I am especially interested in is how crop 
insurance and agricultural credit complement each other and how 
we can get these two programs to work better as we look at the 
2023 Farm Bill. We are in the middle of going across the 
country. Austin Scott is the Ranking Member on our 
Subcommittee, and he and I just got back from Arizona. We are 
going to be going to Minnesota later this month to Angie 
Craig's district and then to Ohio to Congresswoman Kaptur's 
district to really take in, what do we need to know?
    So for our panel here, any of our producer witnesses, why 
don't we start there, how has your buy-up of crop insurance 
impacted your access to credit, if at all? And whoever wants to 
take that, again, to the producers on the panel.
    Ms. Asherman. If I may, very quickly, I do not have crop 
insurance. And to my knowledge, I am too diversified to access 
those programs. So when I apply for credit or really when I go 
about my business and my farm planning, I have to take that 
risk and just own it.
    I will say that part of the reason I am so diversified is 
that provides its own level of insurance, and then I can lose 
any individual crop and not go under entirely for that year. 
But I and many producers like me do not benefit from crop 
insurance.
    Mrs. Bustos. So Ms. Asherman, then, a quick follow-up. What 
should we know as we go into the 2023 Farm Bill as it pertains 
to insurance for the line of ag that you are in? What would 
make things better for you and your colleagues?
    Ms. Asherman. I would say that just generally risk 
mitigation is a huge factor for all farmers of all sizes, 
scales, and complexities. And I believe that there is a way to 
offer crop insurance to diversified and smaller farms. I don't 
know off the top of my head the nuances of that, but I think 
crop insurance would be beneficial, and any risk mitigation 
would be beneficial.
    Mrs. Bustos. Okay. All right. Thank you. Well, we could 
talk maybe a little bit more offline as to how that might look.
    Again, back to my question about buying crop insurance and 
how that has impacted your access to credit if at all, anybody 
else have anything to add to that question?
    Okay. I am going to move on to the whole panel then. Do you 
see ways for crop insurance and ag credit to work better for 
young and beginning and underserved producers? That is to the 
whole panel.
    [Information supplied by Mr. Tillman is located on p. 
1381.]
    Mr. Brown. Congresswoman Bustos, thank you for your 
question. I will note that crop insurance is vital to our 
operation and ensuring that our risk is mitigated to a 
reasonable point. I haven't had to rely upon it myself 
fortunately. With a recent claim in 2012, we had horrendous 
drought in central Illinois and throughout the State of 
Illinois. And at that point, it came in very pivotal to the 
survival of our operations.
    So I would note that in the future as simplified as we can 
get crop insurance, I know we would like to cover yield as well 
as price, but it is an overly complex program at this point 
from my perspective.
    Mrs. Bustos. Okay. I am going to go ahead and move to my 
next question since nobody chimed in right away. So I want to 
switch gears to the value of property in today's market. So 
during the last farm bill--I have been involved with helping 
markup two farm bills now in my time here in Congress. But I 
was really proud to be able to work with Ranking Member 
Thompson on the inclusion of Farmers of Tomorrow Act (H.R. 
4513, 115th Congress). And what that did is it eased some of 
USDA's financing requirements on young farmers and veterans to 
help them access credit to buy land.
    Obviously, it is clear that more needs to be done in our 
next farm bill to keep up with the increasing property values. 
So just wondering, any thoughts that anybody on the panel has 
about this? And, Dr. Kauffman, if you can speak to the impact 
that high real estate values have on young, beginning, and 
underserved producers who are trying to get into farming?
    Dr. Kauffman. Well, just very quickly, in the interest of 
time, what I will say is that does present a barrier just in 
terms of cost. I think one suggestion might just simply be to 
evaluate what the risk profiles are of producers that would be 
consistent with the goals of this Committee. Crop insurance is 
of course important, but there could be other mechanisms that 
attempt to try to reduce those risks.
    Mrs. Bustos. Okay. Thank you. Sorry, we are out of time.
    The Chairman. Thank you.
    Mrs. Bustos. Thanks, everybody. Thanks, Mr. Chairman. I 
yield back.
    The Chairman. The gentleman from Alabama, Mr. Moore, is now 
recognized for 5 minutes.
    Mr. Moore. Thank you, Mr. Chairman, for holding this and 
for Ranking Member Thompson for--obviously, on the Committee.
    Mr. Brown, a couple of questions. We have a farm and we 
quit farming in 1980. The drought and armyworms kind of pushed 
us out. And so my cousin's son has kind of come back into that 
operation and he is trying to get it going. And what do you 
see--I have talked to Garrett a little bit about this, but what 
do you see as the largest barrier to entry for young farmers 
and obviously underserved producers? What do you see as some of 
the just--I know you had different set of sort of approaches 
you had to take and I think you had to navigate some pretty 
tough issues, but what do you see as the largest issue right 
now?
    [Information supplied by Ms. Asherman is located on p. 
1371.]
    Mr. Brown. Thank you, Congressman Moore. I would note that 
the biggest challenge for me in transitioning into the farm 
operation was the lack of communication and understanding 
throughout the generational divide but also in relation with 
our lenders and associated parties. It is important that we 
educate those that are entering the agricultural field and for 
us as young farmers to understand the options that are out 
there and the programs that are available.
    I think USDA, from my point of view, does a poor job 
educating on the programs that are out there and accessible. 
And with farm bills changing every several years, a lot of 
times those programs go away or are new out there, and we don't 
see them at the grassroots level for a decade or so. We hear 
about them by word of mouth rather than by direct FSA or county 
offices notifying us, so it is it is tough to be aware of all 
the programmatic changes. As I mentioned, consistency is key 
for us to understand what is out there for young farmers as far 
as access to capital.
    Mr. Moore. You said consistency is key. So I think with 
him, he has kind of spoken with a lot of the older farmers in 
the community, but his dad ended up going and cosigning the 
note to get him started. I think navigating through that 
process was just too difficult and it just took up too much 
time. So I will encourage you to--your granddaddy's tractor, do 
you know where it is still? You said you sold it.
    Mr. Brown. We do. It is still local at this point.
    Mr. Moore. We sold a 641 Ford four-cylinder diesel, my 
granddaddy's first tractor, and it is in the family now and 
totally refurbed, but they sold it in the 1980s. So just keep 
your thumb on.
    Mr. Brown. Thank you.
    Mr. Moore. Hopefully, you can get it back.
    Quick question, Dr. Kauffman. How does the current state of 
the farm economy influence access to credit generally but 
especially for young, beginning farmers? Because there are some 
uncertainties, obviously, with fuel and inflation. What do you 
see, going forward?
    Dr. Kauffman. What I would say is that farming is 
inherently a risky business, and that is true at any time. But 
in the environment that we are in right now, those risks are 
elevated, obviously, with commodity prices and the volatility 
there with input costs, with severe drought in many places. And 
so what I would say there is that for those that are already at 
higher risk and have higher risk profiles, that risk is 
probably a bit more elevated for those producers, and those 
tend to be those producers that have the least amount of equity 
then to absorb any potential shocks.
    Mr. Moore. Any suggestions on how we soften that landing?
    Dr. Kauffman. I think a recommendation would simply be to 
identify what the opportunities are to address those risks in 
the next farm bill. We have talked about crop insurance as one 
of those mechanisms. But again, there is a growing diversity of 
farm operations that reflect in many ways the diversity of 
production, and so adapting those programs and the processes to 
then again reflect the risk profile of those that are entering 
the business could be one step.
    Mr. Moore. Thank you. And with that, Mr. Chairman, I yield 
back.
    The Chairman. Thank you. And now the gentlewoman from the 
U.S. Virgin Islands, Ms. Plaskett, who is also Chair of the 
Subcommittee on Biotechnology, Horticulture, and Research, is 
now recognized for 5 minutes.
    Ms. Plaskett. Thank you so much, Mr. Chairman, and thank 
you for this very timely and important hearing that we are 
going to have. And I want to thank all of the witnesses who 
have been a part of the discussion thus far this morning. There 
has been so much information that has been shared, so many 
experiences. I am really grateful for it.
    Mr. Chairman, it is so interesting, just yesterday, at the 
lunch of the Congressional Black Caucus, one of the handouts 
that the caucus made available was some clips from the Dallas 
Morning News, which talks about Black Texas farmers push on 
USDA loan relief efforts, which have remained stalled in the 
courts. Some of the statistics that they shared in that were 
also startling and showed the difficulty that Black farmers 
have, and also all farmers of color have with loans. Knowing 
that, just looking at some of the statistics that they shared 
with us that, there are farmers who a CNN report said that the 
USDA rejected 42 percent of direct loan applications by Black 
farmers, 37 percent by Asian farmers. In 2021 in contrast, only 
nine percent of White farmers were denied loans last year 
nationally. This is not what happened in Pigford. This is what 
is still going on today.
    Another statistic, last year, 71 percent of Asian farmers 
and 61 percent of Black Farmers were rejected from direct 
loans, compared with 23 percent of White farmers who were 
denied loans. The statistics each year are very much the same. 
So talking about credit and access to credit for farmers, 
particularly young farmers as well, is really important.
    The questions that I have are related to this. Access to 
affordable farmland is a major challenge nationally, 
particularly for people of color, who today make up two percent 
of farmland owners. We know that owning the land is very vital 
and important to seeking loans and for credit. There has been a 
history of backlog of loan applications. If individuals are 
looking to lease land and purchase a farming entity in the next 
year, they must make decisions in a timely manner.
    So I wanted to ask the witnesses, do you find your current 
application process to be timely, allowing individuals to 
pursue their goals having land within a year's framework? I was 
going to ask that question to Mr. Willard Tillman or Ms. Dania 
Davy, if you all have found any information about this.
    Ms. Davy. What we heard consistently at the Federation of 
Southern Cooperatives/Land Assistance Fund through our monthly 
listening sessions is that the process of applying for a loan 
is so lengthy and burdensome as to discourage new and beginning 
farmers and ranchers of color and existing Black farmers from 
accessing the resources that they need from the Farm Service 
Agency. And that is part of why one of the solutions that we 
advocate for is a Black farmer financial institution that is 
modeled after the Farm Credit System in which the farmers 
themselves have an ownership stake in the credit process, as 
well as that decision-making. And we have also--to the 
preliminary remarks that you made, heard consistently the ways 
in which the debt burden that continues to handicap those 
farmers, those 17,000 socially disadvantaged farmers and 
ranchers of color that were promised that debt relief last year 
have also impacted their ability to access credit going into 
this year, and we fear that that will result in the next wave 
of land loss for socially disadvantaged farmers and ranchers of 
color.
    [Information supplied by Mr. Tillman is located on p. 
1381.]
    The Chairman. Yes.
    Ms. Plaskett. Thank you. Thank you so much. The other 
question I have, Ms. Asherman, thank you so much for being a 
part of the hearing this morning and for the work that you are 
doing. In 2017, the Census of Agriculture, 88 percent of 
farmers in my district in the U.S. Virgin Islands were over the 
age of 45. Can you speak about effective methods to educate and 
grow the future generation of farmers, as well as encourage 
their continued participation in the agricultural space?
    [Information supplied by Ms. Asherman is located on p. 
1371.]
    The Chairman. I think she is having a bit of difficulty.
    Ms. Plaskett. She is. And as I have gone over the time, 
thank you so much, Mr. Chairman. And if any of the witnesses 
are able to put their answers in writing, I would really 
appreciate it
    The Chairman. Sure.
    Ms. Plaskett. Thank you so much, and I yield back.
    The Chairman. Thank you for your cooperation.
    Ms. Asherman, staff has informed me that you are 
experiencing some connectivity issues, so if you would like to 
turn off your video, it seems that your video is interfering 
with your audio. So if you turn off your video and proceed with 
audio only, that might improve it, and we can hear your 
responses and respond. You are making valuable comments, and we 
want to hear from you. I apologize for the technical 
difficulties.
    And now the gentleman from Indiana, Mr. Baird, is 
recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman and Ranking Member 
Thompson. I really appreciate the opportunity to have this 
discussion, and I always appreciate the witnesses and their 
expertise and the information you can bring to us to help us 
make better decisions.
    I just have to make a comment, Mr. Chairman, that I am one 
of those farmers over 57\1/2\ years old, and I don't have any 
intentions of having one foot in the grave just yet. But 
anyway, I think that is an asset from the standpoint we can 
serve as mentors. We can serve as advisors. We can also be 
knowledgeable about some of these programs and can help young 
people get started in farming.
    One of the old adages is that the older farmers are 
probably long on assets but they are short on labor, but the 
younger farmer is short on capital and long on labor. So that 
combination of the older individual needing labor and the 
younger individual needing capital, I think we capitalize on 
that. And so I appreciate you allowing me to make those 
statements.
    So now we get down to the real issues. Dr. Kauffman, we 
have talked a lot about the extreme uncertainty in the global 
supply chain, as well as the rising cost of inputs, 
bureaucratic red tape. So I am particularly interested in EPA's 
recent decision to threaten the access to some of these crop 
protection tools, glyphosate, Dicamba, those kinds of things. 
And I know this is not necessarily in your wheelhouse, but it 
probably comes into some of the discussion with producers. So 
can you share any insight into how that uncertainty maybe 
impacts producers' decision-making if you will?
    Dr. Kauffman. Yes, thank you for the question. I can't 
speak to the specifics of the policy uncertainty around the 
EPA, but what I would say is just simply a comment on the 
anecdotes that we have received from producers that would 
reflect that idea that the volatility in those markets and the 
inability to secure inputs is of paramount concern, especially 
going into the fall as many producers would be going into 
renewal season.
    Mr. Baird. And so that ability to have--or that uncertainty 
adds to the inability to plan and look forward and so on, so it 
is really an asset when you can have your capital lined up and 
your inputs lined up.
    Dr. Kauffman. Yes, I would agree with that. Certainly being 
able to make decisions with confidence that you can secure the 
necessary inputs, going forward, is a pretty key part of the 
planning process.
    Mr. Baird. Thank you. Mr. Brown, do you have any comments 
in that regard?
    Mr. Brown. No, I will note that we had a bit of a 
workaround last year as we saw fertilizer prices, chemical 
prices, seed prices climbing through the fall into the winter, 
so we had the opportunity to work around and prepay a lot of 
our input costs last year. This year, we don't have much of a 
workaround. We see fertilizer just a tad bit coming off its 
highs at this point, but chemicals, fuel. Fuel is up two times 
over last year. So we are going to face the challenge of do we 
lock in our prepays before the end of the year or do we risk 
locking those in, in the springtime, and hoping that they have 
improved at that point.
    Mr. Baird. Thank you. Mr. Tillman, your observations, 
please?
    Mr. Tillman. No, I think that basically getting a 
comprehensive plan to just going from here to there is the key 
to all the success that you are going to have to have. You are 
going to have challenges as you go from here to there, so I 
think that reevaluating with the rising cost and expenses of 
everything, you basically have to revamp your whole plan.
    Mr. Baird. Thank you. Do any other witnesses have any 
comments in that regard? We have about 45 seconds.
    Ms. Asherman. I would just like to point out that one of 
the reasons that I believe beginning farmers are often doing 
things differently than our parents and our grandparents is to 
sort of mitigate some of the challenges that are happening, 
including becoming organic as a way of not having to deal with 
the potentially hazardous or unavailable inputs.
    Mr. Baird. Thank you, and I thank our witnesses for their 
comments. And with that, I yield back.
    The Chairman. Thank you, Mr. Baird.
    And now the gentlewoman from Washington, Ms. Schrier, is 
now recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman. Today, I would like 
to discuss some of the barriers that young, beginning, and 
underserved producers in my district face accessing credit. The 
2018 Farm Bill made really nice strides to improve financial 
assistance for young, beginning, disadvantaged producers by 
increasing loan limits and set-asides. But farmers in my 
district still need help in order to access these loans and 
opportunities for first-time farmers who often don't have 
generational knowledge. Mr. Baird alluded to that need for 
mentorship. Or if they don't have comfort navigating a local 
USDA office, these loans can sometimes just seem out of reach.
    Accessing these loans and programs also requires 
substantial time and a high degree of business and financial 
acumen that new, beginning, underserved farmers might not have. 
And navigating a Federal bureaucracy is daunting to say the 
least. And certainly knowing how to how to get the necessary 
technical assistance for these loans and other opportunities is 
also really challenging.
    So, for example, when one farmer in my district looked into 
Federal loans to help him buy land, he quickly came to the 
conclusion that the process was too tedious and strenuous to be 
worth considering, and he decided to use a private mortgage 
company instead. So what this meant is that he actually had to 
sell his house in order to afford the down payment on the land, 
and he used his personal credit lines to then pay for farm 
equipment, and that is a big risk. So for him and for others in 
my district, there is this pervasive sense that these programs 
are just not meant for them.
    So ultimately, there is this substantial unmet need for 
connecting farmers with the technical assistance that the USDA 
and FSA programs provide, particularly to ensure that these 
beginning farmers know what programs are out there, who they 
can talk to, and what assistance is available.
    Ms. Asherman, you talked about some of these challenges, 
and you talked about starting up your farm and that your 
eventual success with FSA was due to the right combination of 
persistence and good fortune. But your story also demonstrates 
how effective these loans are to get people started. Can you 
talk about how the USDA can better meet beginning producers 
where they are to provide technical assistance and let them 
know what loans or what other assistance they can provide?
    Ms. Asherman. Yes, I mean, well, I completely agree with 
everything you just said about feeling like the loans are just 
not for you, and so trying to decide is it even worth applying 
for them. I think that, I mean, it would be nice if the process 
were simpler and if we could mitigate that issue, but I do 
think that it is possible, and the benefits for new farmers to 
get to that next step, whether it is buying the tractor, buying 
the land, that capital is so important for especially first-
generation farmers who don't necessarily have inherited land or 
inherited equipment. So while the programs are very difficult 
to navigate, I do think it is a testament to the success of 
them, and the intention of them is very important.
    And if I can just say, relating to a point made earlier 
about how do we move the needle on the average age of farmers 
in this country, I really think it is not just making sure 
farms can transition. It is also making sure there are new 
farmers who did not come from farming, that new land is in 
production. I think that is so critical.
    Ms. Schrier. It is really interesting because we often talk 
about how we are losing that farmland, and so to be able to 
bring not just new farmers but new land into the question is an 
interesting one.
    I was going to ask also, you can kind of comment on 
whichever one you want, like the cumbersome paperwork and long 
processing times, if you could either talk about how the USDA 
could streamline this process or talk about this leap--so many 
of the young farmers in my district are leasing the land, so 
they never get the capital needed to like buy the tractor and 
get a foot up. If you want to comment either on----
    Ms. Asherman. Yes, I mean, I think that I see a lot of 
young farmers leasing because that is the easier thing to do. 
So in terms of getting started, getting access to the land, 
getting crops in the ground, getting cash flowing, leasing is 
so important, but it doesn't build long-term equity, and it 
doesn't provide secure land tenure. So ownership is really 
important.
    The Chairman. The lady's time has expired.
    And now the gentlelady from Florida, Mrs. Cammack, is now 
recognized for 5 minutes.
    Mrs. Cammack. Thank you, Mr. Chairman. And thank you to our 
witnesses for appearing before the Committee today.
    As someone who represents a rural district with a lot of 
young farmers, this is a really timely issue. So I will just 
jump right in.
    Mr. Brown, what was the process like when applying to 
multiple different loan programs at USDA? And specifically, can 
you elaborate on the inefficiencies that you saw during the 
application process? Do you think that the process itself could 
deter farmers from applying for the loans altogether? And I 
think we all know the answer, so if you could dig into some of 
the specifics, I would be appreciative.
    Mr. Brown. Absolutely. Thank you, Congresswoman. So it has 
been a mixed bag for me. The real estate loan process went 
fairly smoothly for me, largely based on the joint status of 
the loan being between FSA and Farm Credit, as I mentioned 
previously. That helped smooth the operation because the 
communication with Farm Credit was extremely fluid and helpful 
in regards to understanding what I was getting myself into.
    Now I have had two challenges with other USDA programs. The 
Conservation Stewardship Program, as we transitioned from one 
structure in our operation to another as a generation phased 
out, kicked me out of a conservation program per year and 
caused extreme frustration when I needed the revenue the most. 
And also the farm storage facilities loan I didn't apply for 
this year because it requires 3 years of ag production history. 
The problem is with the young farmer, we are growing at such a 
rapid rate to keep up with competition, I am expanding my grain 
storage to keep my costs on my operation down actually so I 
don't have to pay an elevator to store my grain. I would like 
to store it myself.
    Well, I picked up some ground and had 1 year of history, 
but it was such a substantial amount of ground that I needed 
that grain storage available. And I wasn't able to access the 
farm storage facilities loan because I didn't have 3 years of 
history. So I would encourage that to be addressed in the 
future as well.
    Mrs. Cammack. Were you finding that the levels of support 
were adequate?
    Mr. Brown. Absolutely not. The problem is farm real estate 
in my area is explosive. You have $20,000+ per acre land 
selling this year, which is up in some areas about 40 percent 
from last year alone. And also operating expenses are extremely 
high. So I don't use the operating note that is available 
through the FSA because the limits are unreasonably low for my 
operation.
    Mrs. Cammack. And I hear that all over the country, but 
thank you for that.
    Ms. Asherman, as a young farmer yourself, what gave you the 
confidence and security to utilize the USDA loans and trust you 
would have the ability to access the credit to start your 
operation? Is there any way--and as a small government 
conservative, I always say repeatedly that we just need to get 
government out of the way. Specifically, what can Congress be 
doing in helping build trust with our new farmers?
    Ms. Asherman. I do explain in my written testimony a little 
bit more detail on this, but I just--I read the FSA website, 
and I was like, ooh, this is for me, I meet these requirements. 
And then once I felt confident that I met the requirements, it 
was just, again, farmer stubbornness and persistence at working 
with my loan officers and chipping away at the process. And I 
honestly had no other alternative, and I had nothing to lose. 
So I was sort of at the point in my farming career where I was 
either going to stop farming because I did not want to be a 
tenant farmer any longer, or I was going to find a way to have 
my own farm. And if either of those--if I hadn't been able to 
find ownership opportunities, I probably wouldn't be farming 
today. So I just--it was stubbornness and I wouldn't say 
confidence except for once that first loan process went 
through, I do feel now like I understand how to navigate the 
process. I am more confident I can do it in the future. But 
that is because I had that first experience.
    Mrs. Cammack. Wonderful. Thank you so much. And with that, 
thank you, Mr. Chairman and Ranking Member, and I yield back.
    The Chairman. Thank you. And now the gentlewoman from Iowa, 
Mrs. Axne, is now recognized for 5 minutes.
    Mrs. Axne. Thank you, Chairman. And thank you to our 
witnesses for being here, I very much appreciate it. It is a 
really important topic, so I am glad we are having this 
hearing.
    Since coming to Congress, I have certainly made it a 
priority to help our family farms. I am a fifth-generation 
Iowan with family farm in my blood as well. Great to see our 
state next door being represented here, so I will have some 
questions for you. But I have done a lot of things from working 
to make sure that we didn't change the stepped-up basis that 
would really hurt our farmers, to securing disaster relief, to 
making sure that our operations can recover from the 
difficulties they have seen, and of course, addressing things 
like cattle market transparency so that smaller producers can 
actually get a fair shake. But we know that farming remains a 
viable option for many people but not for a lot of our new 
farmers to get involved.
    And so as has been mentioned here, we know that the average 
age of a farmer is nearly 60 years old, and \2/3\ of farmland 
is managed by someone who is older than 55. So as we continue 
to see these declines in rural population, we need to make sure 
that this upcoming farm bill offers support for those who want 
to move to rural America and start a new farming business. And 
I am seeing this every day of the week. I see people who want 
to be out in our rural communities and absolutely want to farm.
    We know that the 2018 Farm Bill made some notable 
improvements like increasing loan limits for FSA loans or 
establishing the Farming Opportunities Training and Outreach 
Program, but we have a lot to do. And so, of course, I have 
heard the biggest hurdle is simply the cost of land. We have 
seen in Iowa, of course, incredibly significant increases in 
the cost of the land. And you may have heard that just last 
month, a farm in northwest Iowa went for a record $25,000 per 
acre. We thought we were big-time. I remember about over a 
decade ago and it was $7,000 an acre. We thought oh, my 
goodness, so this is something else.
    So, Mr. Brown, my question, I am sure you have seen these 
similar trends next door. You are right next door to us in 
Illinois. And you noted in your testimony that you led working 
groups compiling recommendations on improving policies for new 
and beginning farmers, including that access to land. Are there 
some specific recommendations you can make to this Committee so 
that we can get you guys onto the land when we are looking at 
$25,000 per acre right now?
    Mr. Brown. I think, as I mentioned in my testimony, just 
keeping up with the rapid pace of change in agriculture is 
important. And you increased those loan limits in the last farm 
bill, they are going to have to be increased to be beneficial 
in this farm bill as well. Land costs will continue to escalate 
in my opinion, and cash rents obviously are going to keep up 
with that as well. So even if a farmer doesn't have access to 
purchasing the land at this point, they are going to have to 
have access to their operating note because their cash rents 
are going to go through the roof as well. So I think we have to 
look at both approaches in the future because they are both 
going to be instrumental to our survival.
    Mrs. Axne. Thank you for bringing that up. And I recently 
just heard when I was out doing a roundtable somebody say they 
are going to increase their rent. They have to. There is just 
no ifs, ands, or buts about it. So thank you for letting us 
know we have to address both of those sides of the coin.
    And, Ms. Asherman, at a roundtable I held in my district 
last year, a farmer relayed concerns that while these programs 
have been critical in helping many beginning farmers get 
started, they age out of them, and then they are stuck in the 
middle where they might not have the equity that that older 
farmer has to keep them established. So what can we do here in 
this middle world where we can develop some programs for our 
new farmers but we have those middle farmers who are falling 
off on a cliff when those opportunities stop for them?
    Ms. Asherman. Can you explain how they are aging out? I am 
not sure I understand.
    Mrs. Axne. Yes, well, the policy doesn't apply to them 
anymore as far as being able to get the grants for new farmers, 
but they are like--it is kind of just like a small business, a 
startup phase and then you move into the middle phase, you are 
trying to--farming is a small business so you are trying to 
keep that middle ground running while you grow your business 
and you have lack of access to capital because you don't 
necessarily have a strong running farm yet. So it is that 
middle ground where they can't get access to the loans. They 
are beyond just the new farmers, but they are not up at that 60 
year old farmer yet, and they are trying to make ends meet. 
What can we do for those folks in the middle?
    Ms. Asherman. I mean, I would say the policy needs to 
change to understand that there is a vast number of farmers 
with different experiences and different resources. So some 
people will come from a sixth-generation farm, and they are 
going to have automatic equity in that land that they have that 
they are keeping afloat. And then some people are going to 
start with nothing. I feel like I was in the sweet spot between 
having experience and having the ball rolling where I was too 
busy to apply for anything, but I am not sure. I am not sure.
    Mrs. Axne. So it sounds like something we should look at. 
Thank you so much.
    The Chairman. And thank you.
    And now the gentleman from Ohio, Mr. Balderson, is now 
recognized for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman, and thank you for 
this hearing today. My first question is for Dr. Nathan 
Kauffman. Dr. Kauffman, thank you for being here today. And my 
question to you is in your testimony, you talked about 
intensifying cost pressures that are being put on farmers. 
Despite these pressures, you say that agricultural credit 
conditions have remained strong. Cost pressures and access to 
credit are two major barriers to entry for young and beginning 
farmers. While these cost pressures are not having an impact on 
credit right now, do you anticipate that will change if the 
costs continue to rise?
    Dr. Kauffman. I do think that the risks are elevated in 
part because profit margins have been so strong and, generally 
speaking, input costs tend to rise as commodity prices also 
rise, so those profit margins could get squeezed. It wasn't 
that long ago prior to the pandemic that we were in an 
environment where those profit margins were low, so there are 
some possibilities that those risks could intensify in the 
coming year.
    Mr. Balderson. Okay. Thank you very much for that answer. 
If you didn't direct it that way, I was going to have you do a 
follow-up, but that is great, so thank you.
    My next question is for Ms. Asherman. Good morning, and 
thank you for being here. I want to shift to the topic of 
microloans. FSA's loan webpage describes these loans by saying 
they are designed to meet the needs of small and beginning 
farmers by easing some of the requirements and offer less 
paperwork. Ms. Asherman, in your testimony, you shared your 
experience obtaining a microloan and stated that the process 
was nearly identical to a direct operating loan. Can you 
describe in more detail what this process looked like for you?
    Ms. Asherman. Yes, I was really disappointed because I was 
busy and trying to take advantage of a microloan specifically 
for the expedited nature. Essentially, the paper, the documents 
that I had to fill out, which are all PDFs on FSA's website, 
for this operating microloan, which was a $50,000 loan, what I 
actually ended up filling out were all of the same documents 
for the standard direct operating loans. So, I mean, just the 
exact same paperwork and then my additional documents that I 
needed to supply cash flow projections, yield history, yield 
projections, all of that was to the same detail and extent that 
it was for me to purchase my land actually. And so there was 
really no paperwork difference for me last year when I was 
accessing a microloan.
    And when I asked my loan agent why that was and I sort of 
suggested that the microloans were supposed to be a less 
paperwork-heavy process, they said that because I was already 
in business and I already had this documentation, that they 
were going to need it. So essentially, I felt like my paperwork 
burden was actually increased because I am running a successful 
business instead of decreased because I have a successful 
business that I have shown I can repay a loan.
    Mr. Balderson. Thank you very much for that answer. And I 
want to do a follow-up, and I will start with you. I want to be 
conscious of the time. We are done pretty quick but, Ms. 
Asherman, I will ask you first since you are already right 
here. What changes to the microloan process or the FSA loan 
process in general do you think need to be made to make these 
loans more accessible for small and beginning farmers?
    Ms. Asherman. I am not sure what the paperwork should have 
been, but I think it seems like an implementation problem, at 
least at my local level. The concept seems great. I just don't 
know if it happened the way it was supposed to on the ground.
    Mr. Balderson. Okay. Thank you. Would anybody else like to 
add to that?
    Seeing none, Mr. Chairman, I yield back my remaining time. 
Thank you.
    The Chairman. Thank you. And now the gentleman from 
Florida, Mr. Lawson, is recognized for 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman, and also Ranking 
Member Thompson, and welcome to all of the panel to the 
Committee today.
    My first statement is centered around what Ms. Asherman 
mentioned in her testimony, that the high cost of student debt 
is a major challenge for new farming generation when accessing 
credit and building capital, especially for young farmers of 
color. Ms. Asherman, can you talk more about what the value of 
higher education was to you and other young farmers, in 
addition to your believing that Federal forgiveness of student 
loan debt for young, beginning, and underserved producers would 
be beneficial in your work? And what could this forgiveness 
program look like?
    Ms. Asherman. Yes, I mean, I definitely feel like a college 
education is a really important thing for all Americans who 
want to have it. It is where you become yourself and you 
identify what you want in life, and it gives you important 
skills. I definitely think that going into farming with a bunch 
of student debt would make it very difficult to succeed, if not 
even start. And to me it just seems like philosophically 
farming is so important and it is such a sacrifice and farmers 
work so hard and for so little reward, that there is an 
opportunity to incentivize the new generation of farmers to go 
into farming when they maybe didn't come from farming by 
offering relief for student debt. It seems like that could 
dovetail really well with rural development because I do think 
there are people who want to live in rural places, and I do 
believe rural places need more people who are motivated to work 
there. So to me, it just seems like there could be an 
incentivization to help make people choose farming.
    And I think it is worth asking the question, why do a lot 
of current farmers not want their children to go into farming? 
And I think the answer is because it is so risky and so 
challenging. And by going into farming, you are potentially 
going to go without a lot of basic things that most people get 
from their jobs, from their employers, safety nets. It is just 
very hard to choose it, and so there needs to be ways of 
helping people to choose farming, and I think that would be in 
the best interest of our country and in the future of food 
security.
    Mr. Lawson. Okay. Ms. Davy, I would like for you to--
because of your work at Alcorn State University and I have 
Florida A&M University agricultural program, I will ask you to 
comment on that. But what I first want to say is that the 
Chairman last year, we provided scholarships for students to 
help attract students to stay in agriculture, especially 
historically Black colleges. And so I would like to see if you 
want to comment in this area.
    Ms. Davy. Thank you for the question. As a matter of fact, 
the law students that are traveling with me this summer 
providing estate planning services to heirs property, 
landowners in Black farming communities, they were just 
learning about that program that is provided through the HBCUs 
and a partnership with USDA. And they said that they wish that 
they had learned about that because there are so many careers 
in agriculture that don't require being a farmer in particular. 
But I definitely think that the education, a college education 
gives any small business owner an advantage in navigating all 
of the bureaucracy and all of the financial planning and 
business planning that is required.
    I think that even though farming is a generational 
industry, you don't generally wake up and decide to become a 
farmer. It is usually something that you have inherited through 
the previous generations. But because of the widespread race-
based discrimination that Black farming communities have faced, 
there has been a tendency to discourage the next generation 
from going into agriculture. So I definitely think programs 
like those and partnerships with the HBCUs that can incentivize 
students to pursue careers in agriculture, as well as getting 
the opportunity to have their student loan debt forgiven, that 
would definitely make a huge difference.
    I know for myself, even as an attorney serving Black 
farmers, those grants that are available for serving as an 
attorney in those communities, it was very beneficial to me to 
have student loan forgiveness connected to that. So I would 
echo that recommendation.
    Mr. Lawson. Okay. Thank you very much. And I know I am 
getting ready to yield back, but that program is really working 
that the Chairman fought so hard for over the years. And I had 
a nephew to come out of that program and currently working with 
USDA.
    Mr. Chairman, I yield back.
    The Chairman. Yes, and thank you both. Ms. Davy, you hit it 
right on the mark. That is one of the reasons why we fought 
very hard, and now we are making that scholarship program 
permanent and we are adding $100 million for the 1890s land-
grant college scholarships at these schools. Thank you for 
recognizing that. And thank you, Mr. Lawson.
    And now we have the gentlewoman from Connecticut, Mrs. 
Hayes, who is also the Chairwoman of the Subcommittee on 
Nutrition, Oversight, and Department Operations. You are 
recognized for 5 minutes, Mrs. Hayes.
    Mrs. Hayes. Thank you, Mr. Chairman, and thank you to our 
witnesses for your testimony today.
    An overwhelming majority of farms in Connecticut's 5th 
District are small and family-owned farms. Property costs are 
rising across the country. The national farm real estate value 
averaged $3,380 per acre in 2021, up seven percent from 2020. 
Beginning farmers in my state are at an even bigger 
disadvantage. In 2021, the farm real estate value in 
Connecticut was an astounding $12,500 per acre, the fourth 
highest in the country.
    Ms. Asherman, I appreciate you sharing your story about 
starting your own small farm, which is similar to many of my 
constituents. Would increasing the cap on direct farm ownership 
down payment loans and counting those loans towards credit 
history help beginning farmers today in your opinion, and 
through your experiences?
    Ms. Asherman. Yes, I mean, I think that having FSA loans 
contribute to credit history is incredibly important, 
especially if USDA wants farmers to also be able to outgrow 
some of these programs and be able to stand on our feet with 
[inaudible]. I definitely think that would be helpful.
    Mrs. Hayes. Thank you. And I noticed that we heard from 
several witnesses and also, Mr. Tillman, in your testimony, you 
pointed out the lack of the pre-approval process for FSA loans 
slowing down the startup for beginning farmers. The process to 
obtain a loan can take up to 6 months, during which time a 
farmer could lose their opportunity to purchase land to non-
farm entities with access to commercial lending. We have seen 
just how tight the real estate market has been across all 
sectors, so I would imagine that it is equally as tight in the 
farming sector.
    Mr. Tillman, how often do you see farmers losing 
opportunities because they are kept waiting for a loan to much 
larger entities who have direct access to capital?
    Mr. Tillman. We see that quite a bit. We have an issue with 
timely transactions of the applications. A young lady, Norma, 
wanted to basically start a business and needed a loan. It went 
on for over 9 months. So each time that she located some land, 
before she could close the contract, she had to go do another 
one. So those are just some of the issues that basically young 
farmers have in getting into the thing.
    But in Oklahoma at this particular time, the land is so 
extremely high, based upon new investors and certain types of 
businesses that are moving into Oklahoma. It is basically put 
at a position whereas that a farmer has to really put 
everything on the line just to secure the land, not only having 
to go through the process of getting an operating loan enough 
to basically partially carry all the liabilities that come with 
that.
    And one other thing----
    Mrs. Hayes. Go ahead.
    Mr. Tillman.--that basically is here, that when a farmer--
we are talking about cow-calf operations, get into the 
Livestock Indemnity Program, which is a part of that, and based 
upon all the weather conditions and things that we basically 
have in Oklahoma, there are a lot of things that occur, whereas 
that the inventory of the liability is loss. And there is no 
way to recover, and the FSA wants you to have pictures and 
everything like that. But that needs to basically be addressed 
in some other kind of way that we can identify a way to--a 
clear path that this guy had this number of cows at this time. 
After a storm, he didn't have this many cows. And so that is an 
issue I would really like to have on the record there.
    Mrs. Hayes. Well, thank you so much for that. And I want to 
be respectful of the time, but I will ask one last question if 
you could submit it, anybody on the panel. I am particularly 
interested in how Congress can reduce barriers for 
underrepresented farmers, for young BIPOC minority farmers. I 
am from the State of Connecticut. Not all of our farms are on 
large land. We have fish farmers, we have small urban farmers, 
we have just some really creative things going on in the state 
that have not been accounted for in this industry. So anything 
you can offer in that area for how Congress can help, I would 
appreciate it.
    With that, Mr. Chairman, I yield back.
    [The information supplied by Mr. Tillman is located on p. 
1380.]
    The Chairman. Yes. And please do respond to Mrs. Hayes in 
writing because she is on to a very important point, and we 
appreciate you responding your recommendations in writing to 
Mrs. Hayes. Thank you.
    And now the gentleman from California, Mr. LaMalfa, is now 
recognized for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. Apologies for being 
out of the room, so many multiple committees and this, that, 
and the other. But I am glad to be able to take part here at 
the end.
    So I want to focus a question on rising interest rates, Dr. 
Kauffman, please. Just in straight terms, the borrowing power 
of producers at this point, what does that look like with these 
interest rates? What is your opinion on especially for entry 
level folks getting into agriculture when they may have to go 
pretty heavy on the borrowing in the beginning to secure 
equipment, land, inputs, et cetera?
    Dr. Kauffman. Yes, as a general comment, what I would say 
is that those farmers who are in most need of financing and 
maybe have the least amount of equity would then be most 
exposed to some of those increases because of the amount of 
leverage. I would say that, generally speaking, those interest 
rates are still quite low in a historical perspective, but they 
have been rising. And so it does represent an increased cost 
burden. I would say that it has not necessarily been the most 
significant comment about the concerns that we have heard that 
have been reflected more on input costs, fertilizer and 
chemicals, specifically.
    Mr. LaMalfa. Mr. Brown, as a producer, would you want to 
touch upon that a little bit, too?
    Mr. Brown. Absolutely. I would say rising interest rates 
are an issue for us as far as cash flow goes. That is probably 
my greatest pressure point on my balance sheet right now. I 
have a lot of pretty strong ratios. I have built up working 
capital in preparation for these higher input costs, and I am 
squirreling away as much as I possibly can. But higher interest 
rates, if I were to take out a real estate loan or continue to 
use operating money could create a cash flow issue for me.
    Mr. LaMalfa. Well, how is the price of land looking as far 
as the return on investment for--I am a farmer in my real life, 
too, northern California. We farm rice there, and the price of 
rice ground because of California's--it is not even realistic 
if you were just to walk in, especially as a young grower and 
trying to get a loan on that and get a return. What is that 
looking like in your home state as far as the production versus 
costs to service buying land.
    Mr. Brown. Yes, it doesn't pencil out right now. Land 
prices currently are up 40 percent from last year in my 
immediate area. Cash rent is quickly following. There is a lot 
of cash-rented acreage nearby.
    Mr. LaMalfa. Cash rent is probably pretty high, too.
    Mr. Brown. But yes, if one were to purchase, it would not 
pencil out in the long-term at $20,000 an acre.
    Mr. LaMalfa. So really what it looks like for me at home, 
so if you are not part of an already farming family and had 
that momentum maybe going back to land from the 1980s or the 
1950s or 1940s or whatever, I just don't see how a person comes 
in at an entry level. Yes, you are going to pay cash rent for a 
while, and maybe you are going to make some money at that. Talk 
about that a little bit.
    Mr. Brown. I think it is extremely difficult in the current 
environment. Me, as a young farmer, I am preparing for an 
eventual downturn, and I am hoping that I have the cash 
reserves there to strike at that opportunity. In the meantime, 
it is all about relationship-building, relationship with your 
landlords, relationship with your vendors to get everything 
priced as fairly as possible.
    Mr. LaMalfa. As a fellow farmer, what should we be focusing 
on in Washington, D.C.? In my notes here we are talking about--
we hear a lot about, it is Russia, it is the war, and all that, 
but I also look internally at some of the things we have done 
to make things cost more because we are not producing energy. 
What is your view of that from your field and what should 
Congress be doing?
    Mr. Brown. Energy in particular?
    Mr. LaMalfa. Yes.
    Mr. Brown. Is that your question?
    Mr. LaMalfa. American energy?
    Mr. Brown. Well, I take a look at what is going on around 
me, and there is a huge push for solar, and there are a lot of 
wind turbines popping up in central Illinois. My concern is 
good ag land is going out of production to facilitate some of 
those operations. And I myself, I have solar panels on top of 
both of my machine sheds, so I am not against solar power by 
any means, but I think we have to be cognizant about the long-
term impacts of taking up some of the blackest soil in the 
world with solar farms and wind energy. And every decision we 
need to make should be for the long-term.
    Mr. LaMalfa. Yes, Mr. Brown, same thing in California. We 
have some of the most productive ag land in the San Joaquin 
Valley that is being covered. And they are aggressively--the 
state wants to buy land and take it out for habitat because the 
water doesn't get from our storage to the fields these days, 
our tremendous Federal and state storage systems, and it is not 
anymore. We are taking hundreds of thousands of acres of land 
out. I like to tell people what we don't plant now is what you 
don't eat next year. It is going to be something else. You see 
food prices now. Anyway, hang in there. God bless you. Thank 
you, Mr. Chairman.
    The Chairman. Thank you.
    And now the gentleman from Illinois, Mr. Rush, is 
recognized for 5 minutes.
    Mr. Rush. I really want to thank you, Mr. Chairman. It has 
been quite an interesting hearing so far. And, Mr. Chairman, I 
want to start by asking the question of Ms. Davy. Ms. Davy, you 
have a very curious and insightful perspective [inaudible] 
Black farmers in the South and the stories that you have shared 
[inaudible] issue of Black farmers [inaudible] that they face 
[inaudible]. And I don't want to [inaudible], but we on the 
Agriculture Committee have a special and unique mission to try 
to help solve the problem of Black farmers in our nation. And I 
think that we need the political courage [inaudible] and the 
understanding that [inaudible] not going to be able to solve 
the agricultural mission in their entirety for the rest of the 
nation. Can you kind of share with us what [inaudible] Black 
farmers [inaudible] will be and how we are failing our nation's 
citizens by allowing [inaudible] Black farmers over the last 
couple of decades or even more than a couple of decades 
[inaudible]?
    Ms. Davy. Going all the way back to the enslavement of 
Africans, there was a particular expertise who are now known as 
African Americans brought to the field of agriculture. And so 
the expertise of agricultural production, of anticipating 
weather changes, and managing those businesses are very, very 
critical resources that have educated many farmers, not just 
within the African American community, but even during the 
1980s crisis. There were a lot of efforts by African American 
farmers to share with other farmers who were underserved about 
some of the ways in which they were able to navigate the U.S. 
Government, as well as staying in ownership and possession of 
their lands, despite many institutionalized attempts to 
dispossess them of that land ownership. And so the increasing 
loss of African American farmers from our agricultural system 
is a devastating tragedy to all farmers because of that wealth 
of knowledge, but also in particular for the African American 
community, that loss of wealth estimated in excess of over $300 
billion. Where African American farmland is lost, there is a 
significant loss of not just Black wealth but American wealth.
    And so it is a very important issue that we address, 
maintaining the existing African American farmers that we do 
have, but also incentivizing relationships for the next 
generation of Black farmers so that they can be those first 
responders for their communities. Black farmers are the first 
responders. We saw throughout the COVID crisis that in their 
communities, they were still feeding and providing food for 
their communities. And so we really think that it is important 
to make specific investments in Black farmers because they are 
extremely underrepresented. They continue to be 
underrepresented even in programs that are set aside based on 
socially disadvantaged farmer status. There have been ways in 
which African American farmers have set the foundation for many 
of the civil rights that we all enjoy today, and so it is 
imperative that we address this issue.
    Mr. Rush. Mr. Chairman, I don't think I have any more 
questions, so I yield back.
    The Chairman. Thank you, Mr. Rush.
    And now, ladies and gentlemen, we have reached the 
conclusion of the hearing. And I just want to say a big thank 
you to each of you. Your testimonies were so helpful, and we 
will look forward to continuing this dialogue. And you could 
tell from our Committee Members how seriously we are taking 
this issue. As we know, this falls in our domain here in the 
Agriculture Committee to see about our agriculture business, to 
make sure we are foremost and first in the world, quite 
honestly. And this is so important.
    So I want to thank you, Dr. Nathan Kauffman. Thank you very 
much. Ms. Dania Davy, thank you for your help. And Ms. Julia 
Asherman, thank you so much. Mr. Willard Tillman, thank you for 
your excellent testimony. And Mr. Adam Brown, thank you. You 
all were very helpful.
    This is a continuing process, and we are going to make sure 
that we have a firm foundation for moving forward with the next 
generation. But, as you see, it is going to take us staying on 
this case and making sure we get the help out there to our 
beginning farmers.
    And now with that, I would like to turn it over to the 
Ranking Member for his closing.
    Mr. Thompson. All right. Well, Mr. Chairman, thank you. It 
has been great to work with you on this hearing. Thank you to 
all of our witnesses, those that are in attendance and those 
that are attending virtually.
    American farmers are facing historical challenges, 
increased interest rates, they are just now starting to go up; 
increased input costs; a lack of access to crop protection 
tools; lack of affordable energy, diesel, propane, gasoline; 
9.1 percent inflation as of this week and growing. These are 
compounded for our young and beginning farmers and our 
underserved producers. Access to acreage, access to credit, 
that has been the focus of this hearing.
    So given the average age of American farmers at roughly 
57\1/2\ years, for America to maintain food security, we have 
to address each of these headwinds, including facilitating 
efficient access to credit for young, beginning, and 
underserved producers.
    And with that, once again, thank you for being a part of 
this, and thank you, Mr. Chairman. I yield back.
    The Chairman. And thank you, Ranking Member.
    And now, under the Rules of the Committee, the record of 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from our witnesses to any questions posed by a Member.
    This hearing of the Committee on Agriculture is adjourned. 
Thank you.
    [Whereupon, at 12:17 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letter by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
June 13, 2022

  President Joseph R. Biden,
  The White House
  Washington, D.C.

    Mr. President:

    Long before Russia's invasion of Ukraine, America's farm families 
and consumers were struggling with fractured supply chains, 
skyrocketing input costs, and historic levels of inflation, each of 
which continue to contribute to increased food prices and diminished 
inventories. U.S. consumers are experiencing the largest price increase 
in nearly 40 years, with the U.S. Consumer Price Index (CPI) for food 
rising by 9.4 percent between April 2021 and April 2022. According to 
the U.S. Department of Agriculture Economic Research Service (ERS), the 
cost of eggs increased 22 percent, beef increased by over 14 percent, 
and dairy product increased over nine percent.
    The war between Russia and Ukraine, two of the world's biggest 
suppliers of wheat and sunflower oil, further disrupted the global food 
system resulting in increased energy prices, fertilizer cost spikes and 
shortages, and worsening food shortages in developing countries. 
According to the Food and Agriculture Organization of the United 
Nations' (FAO) latest scenarios, the conflict could increase chronic 
undernourishment by an additional 18.8 million people by 2023.
    Despite these impending crises, your Administration has neglected 
to take serious action to increase American production. In fact, you 
have proposed massive new tax liabilities for farmers, and your 
regulatory agenda would further limit American farmers' ability to meet 
global food demand. America's agriculture sector is vital to 
alleviating global food crises, and we urge your Administration to take 
the following actions to strengthen that role.
Address Farm Input Costs:
    Historic inflation has significantly increased the cost of farm 
inputs, including energy and fertilizer costs. America's energy 
independence is compromised, which sends additional shockwaves through 
our already fractured supply chain. Producers are paying 115 percent 
more for diesel, while natural gas is up 202 percent. Fertilizer inputs 
such as nitrogen, phosphorus, and potassium increased 125 percent in 
cost from January 2021 to January 2022 and an additional 17 percent in 
the first 3 months of 2022.
    To provide immediate relief from the energy and fertilizer crisis 
plaguing the agriculture industry, we request you:

   Withdraw recently proposed revisions to the National 
        Environment Policy Act (NEPA);

   Allow phosphogypsum (PG) to be safely recycled in road 
        construction or other uses (which eliminates hundreds of 
        millions of dollars in compliance costs);

   Update the definition of critical minerals to include potash 
        and phosphate; and

   Take immediate steps to increase domestic energy 
        exploration, production, and transport, including increasing 
        oil and gas leasing on Federal lands and waters, expediting 
        pipeline permitting, and abandoning rulemakings designed to 
        discourage investment in American energy.
Stop WOTUS Changes:
    Recently proposed changes to the Waters of the United States 
(WOTUS) rules create enormous uncertainty for farmers, ranchers, and 
landowners. The underlying law is vague in defining what constitutes a 
Federal waterway, noting only they are ``navigable,'' which has 
historically resulted in egregious, nationwide land grabs by the 
government. In 2020, this was largely resolved with the Navigable 
Waters Protection Rule. However, your Administration thwarted that 
progress last year by reopening the WOTUS regulations, plunging 
producers into a regulatory red tape nightmare once again.
    To address this uncertainty, we respectfully ask your 
Administration to:

   Reverse its position and allow the overall objective of the 
        Clean Water Act to be realized: to restore and maintain the 
        integrity of the nation's navigable waters.
Refocus EPA on Sound Science:
    Exacerbating an already untenable position for American 
agriculture, the Environmental Protection Agency (EPA) has recently 
made decisions impacting the ability of producers to access crop 
protection tools necessary to combat pests and disease and improve soil 
health. These decisions include, but are not limited to, EPA's decision 
to prohibit the use of chlorpyrifos on food crops grown in the U.S., 
recent biological evaluations (BEs) and proposed interim decisions 
(PIDs) for a variety of crop protection tools, and the reversal of 
longstanding policy relating to Federal preemption. This 
Administration's decision to undermine its career scientists has 
created additional uncertainty for producers, leaving them without 
readily available alternatives for key planting decisions.
    The politicization of crop protection tools was further heightened 
in a May 2022 Solicitor General's brief in the case of Monsanto Company 
v. Edwin Harderman regarding the doctrine of Federal preemption. In the 
brief, which was submitted at the request of the Supreme Court, the 
Solicitor General surprisingly reversed course on the Federal 
Government's once consistent and scientifically-sound position 
regarding the labeling of pesticides. On May 23, 2022, fifty-four 
agricultural groups sent you a letter expressing their ``grave 
concern'' with the Solicitor General's brief and the ``change in long-
standing policy regarding the regulation and labeling of pesticide 
products relied upon by farmers and other users.''
    American farmers use glyphosate on roughly 40 percent of their 
acres, helping to enable higher productivity, greater yields, and 
improved soil quality. At this vital time when our producers are 
striving to feed a world threatened by food shortages and insecurity, 
this reversal of policy further undermines the ability of U.S. 
agriculture to meet global food needs.
    To return EPA to its science-driven, risk-based, Congressionally 
mandated review process for these and all other critical crop 
protection tools, we request the Administration:

   Rescind the EPA's August 2021 final rule revoking food 
        tolerances for chlorpyrifos;

   Proceed with reviewing current uses under the ongoing 
        registration review of this chemistry;

   Reassert EPA's clearly defined Federal preemption of crop 
        protection tools and immediately withdraw the Solicitor 
        General's current brief before the Court.
End Onerous Climate Rules:
    The war on agriculture has even expanded to other Federal agencies, 
most recently through the proposed Securities Exchange Commission (SEC) 
rule, ``The Enhancement and Standardization of Climate-Related 
Disclosures for Investors,'' issued on March 21, 2022. This rule, 
through so-called scope 3 emissions, would require farmers, regardless 
of size, to track and report data to the companies with which they 
work. Many small farmers do not have the time or resources to comply 
with such onerous requirements. During a time when this Administration 
purports to support deconsolidation in the agricultural system, this 
rule would result in the exact opposite.

   To prevent increased costs and risks for producers and 
        consumers, we request that your Administration withdraw this 
        harmful rule.

    In short, your Administration's Federal regulatory barriers and 
policies are undermining America's ability to meet the food and fiber 
needs of the globe by creating uncertainty for U.S. farmers and 
ranchers. We cannot afford to continue without a comprehensive plan to 
reverse course on this destructive agenda and address this crisis. We 
request that you immediately meet with Congressional Members to develop 
a plan that restores domestic production and allows American farmers to 
lower food prices at home and provide critical humanitarian aid abroad.
            Sincerely,
            
            

 
 
 
Hon. Kevin McCarthy,                 Hon. Glenn Thompson,
Republican Leader                    Republican Leader
                                     House Committee on Agriculture
 

                                     
                                     

 
 
 
Hon. Steve Scalise,                  Hon. Elise M. Stefanik,
Republican Whip                      Republican Conference Chair
 

                                     
                                     

 
 
 
Hon. Andy Harris,                    Hon. Austin Scott,
Ranking Member
Subcommittee on Agriculture
 Appropriations
 

 
 

 
 
 
Hon. Eric A. ``Rick'' Crawford       Hon. Scott DesJarlais
 

                                     
                                     

 
 
 
Hon. Vicky Hartzler                  Hon. Doug LaMalfa
 

                                     
                                     

 
 
 
Hon. Rodney Davis                    Hon. Rick W. Allen
 

                                     
                                     

 
 
 
Hon. David Rouzer                    Hon. Trent Kelly
 

                                     
                                     

 
 
 
Hon. Don Bacon                       Hon. Dusty Johnson
 

                                     
                                     

 
 
 
Hon. James R. Baird                  Hon. Chris Jacobs
 

                                     
                                     

 
 
 
Hon. Troy Balderson                  Hon. Michael Cloud
 

                                     
                                     

 
 
 
Hon. Tracey Mann                     Hon. Randy Feenstra
 

                                     
                                     

 
 
 
Hon. Mary E. Miller                  Hon. Barry Moore
 

                                     
                                     

 
 
 
Hon. Kat Cammack                     Hon. Michelle Fischbach
 

                                     
                                     

 
 
 
Hon. Robert B. Aderholt              Hon. Jodey C. Arrington
 

                                     
                                     

 
 
 
Hon. Andy Barr                       Hon. Cliff Bentz
 

                                     
                                     

 
 
 
Hon. Jack Bergman                    Hon. Stephanie I. Bice
 

                                     
                                     

 
 
 
Hon. Andy Biggs                      Hon. Mike Bost
 

                                     
                                     

 
 
 
Hon. Kevin Brady                     Hon. Larry Bucshon
 

                                     
                                     

 
 
 
Hon. Michael C. Burgess              Hon. Mike Carey
 

                                     
                                     

 
 
 
Hon. Jerry L. Carl                   Hon. Andrew S. Clyde
 

                                     
                                     

 
 
 
Hon. James Comer                     Hon. Dan Crenshaw
 

                                     
                                     

 
 
 
Hon. Warren Davidson                 Hon. Jeff Duncan
 

                                     
                                     

 
 
 
Hon. Neal P. Dunn                    Hon. Jake Ellzey
 

                                     
                                     

 
 
 
Hon. Pat Fallon                      Hon. A. Drew Ferguson IV
 

                                     
                                     

 
 
 
Hon. Virginia Foxx                   Hon. C. Scott Franklin
 

                                     
                                     

 
 
 
Hon. Bob Gibbs                       Hon. Kay Granger
 

                                     
                                     

 
 
 
Hon. Sam Graves                      Hon. Michael Guest
 

                                     
                                     

 
 
 
Hon. Brett Guthrie                   Hon. J. French Hill
 

                                     
                                     

 
 
 
Hon. Ashley Hinson                   Hon. Richard Hudson
 

                                     
                                     

 
 
 
Hon. Bill Huizenga                   Hon. Ronny Jackson
 

                                     
                                     

 
 
 
Hon. John Joyce                      Hon. Fred Keller
 

                                     
                                     

 
 
 
Hon. David Kustoff                   Hon. Darin LaHood
 

                                     
                                     

 
 
 
Hon. Jake LaTurner                   Hon. Billy Long
 

                                     
                                     

 
 
 
Hon. Frank D. Lucas                  Hon. Blaine Luetkemeyer
 

                                     
                                     

 
 
 
Hon. Lisa C. McClain                 Hon. Peter Meijer
 

                                     
                                     

 
 
 
Hon. Daniel Meuser                   Hon. Mariannette Miller-Meeks
 

                                     
                                     

 
 
 
Hon. John R. Moolenar                Hon. Blake D. Moore
 

                                     
                                     

 
 
 
Hon. Gregory F. Murphy               Hon. Dan Newhouse
 

                                     
                                     

 
 
 
Hon. Ralph Norman                    Hon. Steven M. Palazzo
 

                                     
                                     

 
 
 
Hon. August Pfluger                  Hon. Bill Posey
 

                                     
                                     

 
 
 
Hon. Guy Reschenthaler               Hon. Cathy McMorris Rodgers
 

                                     
                                     

 
 
 
Hon. Mike Rogers                     Hon. John W. Rose
 

                                     
                                     

 
 
 
Hon. Pete Sessions                   Hon. Adrian Smith
 

                                     
                                     

 
 
 
Hon. Jason Smith                     Hon. W. Gregory Steube
 

                                     
                                     

 
 
 
Hon. Claudia Tenney                  Hon. David G. Valadao
 

                                     
                                     

 
 
 
Hon. Ann Wagner                      Hon. Tim Walberg
 

                                     
                                     

 
 
 
Hon. Jackie Walorski                 Hon. Bruce Westerman
 

                                     
                                     

 
 
 
Hon. Robert J. Wittman               Hon. Steve Womack
 

                                 ______
                                 
Supplementary Material Submitted by Julia Asherman, Owner, Rag & Frass 
       Farms, LLC; on behalf of National Young Farmers Coalition
Date: July 22, 2022

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

  Re: A 2022 Review of the Farm Bill: The State of Credit for Young, 
            Beginning, and Underserved Producers before the U.S. House 
            of Representatives Committee on Agriculture

    The National Young Farmers Coalition (Young Farmers) thanks the 
U.S. House of Representatives Committee on Agriculture, and the 
Honorable David Scott, Glenn `G.T.' Thompson, for holding the hearing 
on July 14, 2022 to discuss the challenges facing young, beginning, and 
underserved producers in accessing credit.
    Please find below additional written testimony from witness Julia 
Asherman, Owner and Operator of Rag and Frass Farm in Jeffersonville 
Georgia, in response to questions posed during the hearing.
Insert 1
          Mr. Austin Scott of Georgia. . . .
          . . . How far do you have to travel to get to a farmers' 
        market, Ms. Asherman? Ms. Asherman?
          The Chairman. You may need to unmute, Ms. Asherman.
          Ms. Asherman. I am sorry, my internet is extremely slow. I 
        was trying to unmute. I drive 2 hours to my major market, and I 
        also sell on the farm and a half an hour away [inaudible] 
        market.
          Mr. Austin Scott of Georgia. . . . And as our farmers' 
        markets have closed, just like as our smaller meatpacking 
        facilities have closed throughout Georgia, it has made it that 
        much more difficult for our beginning, young, and small 
        farmers. . . .

    Thank you, Representative Scott, for your question and for your 
warm introduction. To clarify, I do not believe I have had the pleasure 
of showing you around my farm, I think you are mistaking another small 
farm in Gordon, GA (about 20 minutes from me) that you toured during a 
round table I participated in. I have had the pleasure of touring some 
staff of yours around my farm, but I would love to have you out to see 
our operation. You have an open invitation for anytime you are 
available.
    As I said in my testimony, I travel 2 hours for my main market, and 
I travel half an hour for my local market. What I would like to clarify 
is that I started to go to my further market, which is much bigger, in 
2015 because our local market was too small, it couldn't sustain our 
business. Now our bigger metro market subsidizes our smaller local 
market. Many direct market farmers travel 30 minutes to 2 hours to 
reach the best markets, in my case I had to be far away from my market 
to find affordable land. Conversely, farmers located close to great 
markets will often not be able to afford land. You can either have 
affordable land or proximity to markets, but you can rarely have both.
    Thankfully, because I direct market and I sell at smaller 
community-based markets which are operated by farmers, local 
nonprofits, or by local government, they are more nimble and resilient, 
and very close the end consumer we are selling to. I would say that 
USDA programs that support local markets and small-scale aggregation is 
incredibly important to this type of market's continued success, and by 
extension, the success of the farmers who rely on them. This type of 
market gives us a bit of resilience to supply chain disruptions or 
bigger market disruptions, and affords us the maximum margin for our 
products, which is key to most vegetable operations that are less than 
10 acres.
Insert 2
          Mr. Crawford. Well, and I don't want to get into a dynamic of 
        where we are talking about ``corporate farms,'' quote/unquote. 
        I am not here to try to paint a negative picture of economies-
        of-scale. We rely on those economies-of-scale. What I want to 
        do is to talk about how we get that young person. I mean, as I 
        said, I think you tend to be a little bit of an exception to 
        the rule when we see a continued upward trajectory in that age. 
        And then, on the other side of the spectrum, you look at Ms. 
        Asherman, who is on small acres and that is another success 
        story, again, probably a little bit of an exception. I am going 
        to ask Ms. Asherman to kind of weigh in on this as well. What 
        have some of the challenges been for you? It is probably not so 
        much access to capital as it is to the competitive disadvantage 
        you find yourself in because you are starting from a position 
        of not being an economy-of-scale? Do you want to weigh in on 
        that, Ms. Asherman?
          Ms. Asherman. I do. I will say that I think it is important 
        to clarify that when we talk about small farmers, we need to 
        clarify are we talking about small acreage or small gross 
        sales? And there is a big difference between a commodity 
        grower, a row crop grower, and a direct produce market grower.

    Thank you for the question. I believe this question is extremely 
important to address and also offer a huge opportunity for course 
correction in policy. Firstly, the key to addressing moving the needle 
on the average age of farmers is recognizing that there needs to be 
multiple angles and tactics to address this. One obvious place to start 
is we need policy that helps existing farmers transition their 
operations to the next generation within the family farm structure; 
this means legal support, financial planning and education, business 
support and training around the specific issue of farm succession.
    However, most of the U.S. population (close to 80%) lives in urban 
areas. This means the future farming generation cannot be expected to 
exclusively (or even mostly) come from rural communities, or come from 
farming families. Of course, wherever this is possible it must be 
supported, but the fact is there are more people being born and growing 
up in cities than in rural America, and that much of rural America is 
aging. Young people today often want to get out of the country and away 
from the farm. There needs to be policy in education, workforce 
development, and that incentives and supports young people to learn to 
farm and return to the country to farm. Without this step, there will 
not be enough farmers. We can't expect that all the doctors our county 
needs will be the children of doctors, and we can't expect that all the 
farmers will be the children of farmers, not while we have lost so many 
farms and farmers over the last century. The more farm bill policy can 
redirect young people to the support resources, encouragement, skills, 
and credit to buy farms or start new farms, the more we will see new 
farmers join the industry and succeed. This could have a huge benefit 
not only to the future of food security, but to the rural development, 
farming innovation, and strengthen the economy. In addition to existing 
farmland being preserved, we should be open to new farms popping up 
wherever the opportunities arise. There are many opportunities for 
small farms in many parts of the county.
    Farming is a skill that will always be honed by years of 
experience, but it is a skill that can be learned, like any other. It 
is a myth that that only those who grew up on farms can be successful 
farmers, and this is a myth we need to let go of immediately. Some of 
us are many generations removed from the farm, but nearly every human 
alive is descendant from farmers, and we have not adequately given good 
reasons for young people to choose farming over other, easier 
occupations.
    To lower the average age of farmers (and decentralize farms, making 
agriculture on the whole more resilient to ownership changes) we must 
support succession planning for existing farms, incentive farming 
overall, and open the doors to first generation farmers all at the same 
time.
    For your second question, I believe the biggest challenges for my 
farm was the steep learning curve, with little mentorship to get 
started. I spent many years working harder, not smarter, for lack of 
examples. I spent time reinventing the wheel instead of making strides.
    I think it is an oversimplification to assume smaller farms have a 
competitive disadvantage. A farm of any scale (micro to large) can be 
profitable and successful, or can go under. A key point of any farm's 
success is having the appropriate economy of scale--in labor, 
production, equipment, and capitalization. Being smaller can certainly 
afford certain challenges, but likewise being too large can as well; it 
all depends on if all the factors of you economy of scale make sense. 
In many ways I feel being a smaller farm has made me more successful, 
and more competitive, because I am not over-burdened by debt, I am not 
over capitalized. I am not beholden to huge payments that are hard to 
manage in a bad year. My biggest challenge as a farm is labor, which 
honestly is as much about being a vegetable farmer as it is about being 
a small farmer. I am not big enough to need certain planting equipment, 
but even if I was, harvest is still by and large by human hand . . . so 
the labor issue plagues vegetable farms of all acreages.
Insert 3
          Mr. Moore. . . .
          . . . but what do you see as the largest barrier to entry for 
        young farmers and obviously underserved producers?
          * * * * *
          Ms. Plaskett. . . . The other question I have, Ms. Asherman, 
        thank you so much for being a part of the hearing this morning 
        and for the work that you are doing. In 2017, the Census of 
        Agriculture, 88 percent of farmers in my district in the U.S. 
        Virgin Islands were over the age of 45. Can you speak about 
        effective methods to educate and grow the future generation of 
        farmers, as well as encourage their continued participation in 
        the agricultural space?

    Thank you for the questions, and since they are similar I will 
answer them together. The barriers are many and varied, and the policy 
needs to address each to really full serve young farmers.
    Land access is huge, and can be address by improving access to 
credit as has been discussed. I believe the other key is incentivizing 
both land owners and farmers. Can land owners be rewarded to rent or 
sell land to new farmers? Or to keep farm land undeveloped? Can young 
farmers be encouraged to stay (or go into) farming with affordable 
healthcare or education? Can learning to farm specifically, be more 
affordable and accessible?
    Currently, it is well known that to enter farming means large 
amounts of debt, stress, little financial return, physical or mental 
risks, no vacation, potentially no healthcare, and potentially taking a 
second job or relying on spousal income for basic benefits like 
retirement or health insurance. Can you pay for your kids to go to 
college? Possibly not without non-farm income. If this is the reality 
for many, and certainly a well-known possibility for most, why do it? 
Why choose farming over something else? This reality is what needs to 
change to make farming a viable choice.
Insert 4
          Mr. Davis. . . .
          . . . if new and beginning farmers do not have continued 
        access to ag-lending entities like the Farm Credit System, what 
        could the future of your operations look like, and do you see 
        it as a barrier to entering the field?

    For my farm, at the stage in my business I am in, not having access 
to credit would be devastating. I do not go into debt easily, so every 
loan I take at this point is very carefully considered for at least a 
year. I have worked hard with few resources to establish my business 
for enough years now that I need it to get easier and continue to get 
more efficient. Credit allows me to upgrade my equipment, replace it if 
necessary, and make real improvements to my infrastructure to reach a 
better economy of scale where I can be more profitable and efficient. I 
don't need to keep my head above water, I need to be able to swim and 
make progress. My farm is in its `teenage' years; it has gotten off the 
ground, survived and the ball is rolling, but I need to continue to 
reinvest so it can sustain us for the long haul of my career, maybe 
even for the next generation.
    Not having credit is a barrier to entry, and not having credit 
throughout the evolving life of a new farm business can be devastating 
too. Honestly, I am tired from years of running a farm. Now that I have 
a young child (6 months old) I see that it is not enough just for the 
farm to exist despite every sacrifice. It also needs to provide a 
decent quality of life for my family so that I want to do it for the 
rest of my career. To avoid burnout, the farming needs to get better 
and easier with age, and credit helps us to do that as we make smart 
investments in our infrastructure.
            Sincerely,

Julia Asherman,
Owner and Operator of Rag and Frass Farm.
                              [attachment]
Date: July 22, 2022

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

  Re: A 2022 Review of the Farm Bill: The State of Credit for Young, 
            Beginning, and Underserved Producers before the U.S. House 
            of Representatives Committee on Agriculture

    The National Young Farmers Coalition (Young Farmers) thanks the 
U.S. House of Representatives Committee on Agriculture, and the 
Honorable David Scott, Glenn `G.T.' Thompson, for holding this hearing 
to discuss the challenges facing young, beginning, and underserved 
producers in accessing credit.
    The National Young Farmers Coalition works closely with young 
farmers across the country to understand the challenges they are 
grappling with in pursuing their farming dreams, growing food for their 
communities, and stewarding our natural resources. Young farmers are 
passionate and resilient, managing increasingly severe climate change 
impacts, a pandemic, and economic pressures from inflation, highly 
competitive real estate markets, and the burden of debt--especially 
from student loans. Despite all of these challenges, they persist. But 
there are limits to this resilience.
Young Farmers Struggle to Access Capital & USDA Programs Are Not 
        Reaching Them
    Farming is a capital-intensive undertaking. The majority of current 
farmers identify as first-generation, meaning that they most likely did 
not inherit farmland, infrastructure, or equipment, and/or training 
from their families.\1\ Land, tractors, fencing, housing, and other 
farm infrastructure needed to grow a successful farm operation are 
extremely expensive, and when coupled with the burden of student loan 
debt, or lack of existing credit, access to capital can be a major 
barrier for building a successful farm career.
---------------------------------------------------------------------------
    \1\ National Young Farmers Coalition, Building a Future with 
Farmers II, 2017, www.youngfarmers.org/wpcontent/uploads/2018/02/NYFC-
Report-2017.pdf.
---------------------------------------------------------------------------
    In our previous two National Young Farmer Surveys of young farmers 
and ranchers around the country, we have heard that access to capital 
is consistently a challenge. It is also one of the key reasons that 
young people are leaving agriculture. For farmers of color, who have 
faced years of discriminatory lending, been subject to policies 
preventing them from building generation wealth, and been prevented 
from utilizing USDA programs, credit access is an even greater 
challenge.\2\
---------------------------------------------------------------------------
    \2\ GAO, ``Agricultural Lending: Information on Credit and Outreach 
to Socially Disadvantaged Farmers andRanchers Is Limited,'' July 2019, 
https://www.gao.gov/assets/gao-19-539.pdf and Vann R. Newkirk II, ``The 
GreatLand Robbery,'' The Atlantic, September 2019, www.theatlantic.com/
magazine/archive/2019/09/this-land-was-our-land/594742/.
---------------------------------------------------------------------------
    USDA's Farm Service Agency (FSA) offers low interest rate loans 
that are designed to make credit available to our nation's farmers and 
ranchers, but only a small percentage of young farmers are using these 
programs. In our 2017 survey, only five percent of current farmers 
listed USDA Farm Loan Programs as the most helpful policy, program, or 
institution to them. The FSA Operating Microloan is the most 
streamlined of the loan programs, but less than 20 percent of farm 
owners reported using the program. This was followed by the Farm 
Ownership Loan programs (13%) and Farm Operating Loan Programs 
(11%).\3\
---------------------------------------------------------------------------
    \3\ Building a Future with Farmers II.
---------------------------------------------------------------------------
    We must deliver equitable land access and transition policy change 
in this next farm bill, and improving access to credit is a critical 
component of this work. Without it, the diversity and resilience of our 
food and farming systems is at risk, and thus the security of our food 
supply. The early months of the pandemic clearly highlighted the 
incredible importance of smaller scale farms serving local and regional 
foodsheds. We need this new generation to be successful. We need 
farmers like Julia Asherman, Owner and Operator of Rag and Frass Farm 
in Jeffersonville Georgia to flourish, to grow fresh, high quality 
foods for their communities.
    But as you heard from Julia's testimony during last week's hearing, 
the difficulty of accessing credit, and thus the difficulty of finding 
secure land access, put young farmers on thin ice, forcing them to rely 
on luck and the sheer will to persist. We have outlined below some of 
the top challenges that young farmers face accessing credit and a 
number of policy solutions that we believe can help them succeed. These 
policy recommendations come from Young Farmers as well as our partners.
Key Credit Challenges Facing Young Farmers
   Competing in the real estate market

   Discrimination and disproportionate challenges for young 
        farmers of color

   Young farmers operate unique, diversified farm operations

   Access & paperwork burdens

   Lack of uniformity and application of programs in local 
        offices

   Access to housing

   Starting and growing a farm operation
Detailed Challenges & Policy Solutions
Competing in the real estate market
    Land values are rapidly increasing and the real estate market is 
incredibly difficult for young farmers to compete in. Farmers have seen 
steadily rising real estate values that are out of sync with what it is 
possible to produce on the land.\4\ In 2016, the ratio of real estate 
value to production value was the lowest it has ever been with $1 
dollar's worth of farm real estate generating just $0.16 in 
production.\5\ This dynamic has only been exacerbated since the COVID-
19 pandemic, with individuals looking to move out of urban areas and 
invest in rural real estate.\6\ Young farmers and ranchers are being 
outbid by cash purchases and land transactions that happen faster than 
they can access credit through FSA or other agricultural lenders.
---------------------------------------------------------------------------
    \4\ ``Farmland Value,'' USDA ERS website, accessed July 2022, 
www.ers.usda.gov/topics/farm-economy/land-use-land-value-tenure/
farmland-value.
    \5\ ``Farm Real Estate Pricey Compared to Income?,'' Agriculture 
Economic Insights, website, accessed July 2022, www.ageconomists.com/
2017/09/11/farm-real-estate-pricey-compared-income/.
    \6\ Liz Dunn, ``How `Fairy Tale' Farms are Ruining Hudson Valley 
Agriculture,'' New York Times, June 2022, www.nytimes.com/2022/06/09/
nyregion/hudson-valley-farms.html and Greta Moran, ``Beginning Farmers, 
Farmers of Color Outbid as Farmland Prices Soar,'' Civil Eats, January 
2022, https://civileats.com/2022/01/03/beginning-farmers-farmers-of-
color-outbid-as-farmland-prices-soar/.
---------------------------------------------------------------------------
    We have heard from numerous young farmers that FSA Land Ownership 
loan programs simply are not working for them in this real estate 
market. The waiting time and paperwork required, as well as the 
necessity for a legal description of the property, means that in 
practice these FSA loans are primarily accessible to farmers who can 
find a landowner willing to accept the delays of the FSA process. Some 
landowners--particularly retiring farmers without many savings--simply 
are not in a financial position to wait. This also has equity 
implications, given that 98 percent of U.S. farmland is owned by white 
individuals, and therefore white farmers are much more likely to have 
access to networks of landowners who they have a close relationship 
with or who will work with them through the FSA process.\7\
---------------------------------------------------------------------------
    \7\ National Young Farmers Coalition, Land Policy: Towards a More 
Equitable Farming Future, 2020, www.youngfarmers.org/land/wp-content/
uploads/2020/11/LandPolicyReport.pdf.
---------------------------------------------------------------------------
    Access to real estate matters. Land ownership provides the security 
that is critical for many of the long-term investments that farmers 
must make in soil health, infrastructure, and irrigation. Being able to 
plan on a timeframe over which farmers can realize a return from 
activities such as drilling a well, building soil organic matter, or 
pouring concrete in produce handling areas can significantly improve 
profitability, environmental impacts, and food safety. The stability 
that comes from land security can also have immense impacts on farmer 
mental health and resiliency in the face of the many challenges of 
farming.
    A 2018 USDA report found that farm real estate is a substantial 
share of total household wealth and is the most important source of 
equity used to secure loans. During periods of land appreciation, 
farmers who owned a greater share of their farmland--who tended to be 
older, more experienced farmers--gained more wealth and land than 
similar farmers who rented more of their land. Renters, unlike 
landowners, do not enjoy wealth gains from land price appreciation. 
Instead, rents usually rise along with land values, raising operating 
costs. The authors also found that, ``the gradual transfer of land 
between generations . . . may slow during periods of rapid 
appreciation.'' \8\
---------------------------------------------------------------------------
    \8\ Christopher Burns, Nigel Key, Sarah Tulman, Allison Borchers, 
and Jeremy Weber, Farmland Values, Land Ownership, and Returns to 
Farmland, 2000-2016, USDA ERS, Economic Research Report Number 245, 
February 2018.
---------------------------------------------------------------------------
    Given these challenges, it is urgent that Congress take action to 
improve the speed and accessibility of FSA loan programs to help young 
farmers compete in the real estate market. As Julia pointed out in her 
testimony, the current process is slow, with many steps going back and 
forth, and no pre-approval option.
Recommendations
   Establish clear processes and structures to implement a pre-
        approval mechanism for Farm Service Agency Direct Farm 
        Ownership Loans.

      Currently, farmers are required to provide a legal description of 
        the property they wish to receive financing for in order to 
        begin working with FSA--in practical terms, this means a 
        contract for purchase. The majority of sellers, however, will 
        refuse to sign a contract and forego other potential purchase 
        offers until they see proof of pre-approval or pre-
        qualification from buyers. This means that farmers who have 
        identified available land and may otherwise be ready to make 
        the purchase are unable to move forward and often lose out on 
        the opportunity. Most private lenders offer some form of pre-
        approval or pre-qualification, but FSA does not.
      FSA recognizes the seasonality of farming by allowing farmers to 
        make their loan payments on an annual basis and should extend 
        this understanding by offering a pre-approval mechanism that 
        would allow farmers to complete paperwork and begin the credit 
        access process in their down season so they are ready to jump 
        on a land opportunity at any time that it becomes available.
      In order to extend scarce funds and resources, FSA lending 
        currently leverages lending from private banks. Congress could 
        consider a similar model of partnership with private lenders 
        for creating the capacity to offer pre-approval.

   Index the Direct Farm Ownership Loan limit to rising land 
        values.

      In the 2018 Farm Bill, Congress increased the Direct Farm 
        Ownership Loan Limit to $600,000 and indexed Guaranteed Direct 
        Farm Ownership Loans to inflation. The farm bill does not, 
        however, address the rising land values for farmers depending 
        on the Direct Ownership Loan. In order to continue serving the 
        needs of young and economically distressed farmers as land 
        prices continue to rise, the Direct Farm Ownership loan limit 
        should be tied to regional farm real estate valuation. This 
        data could come from the annual ERS reporting on agricultural 
        real estate values and be geographically specific. In indexing 
        the loan limit to land values it is critical to maintain a 
        floor of $600,000.

   Allow Socially Disadvantaged and Economically Distressed 
        farmers who access credit elsewhere to refinance with FSA to 
        secure affordable, long-term financing.

      Accessing credit elsewhere may be more immediately helpful to 
        overcome the fast-paced demands of the current real estate 
        market, but these loans can burden farmers with high interest 
        rates down the road. By creating flexibility for Socially 
        Disadvantaged and Economically Distressed farmers to access 
        credit at the most accessible and fast-paced option, but then 
        allowing them to refinance with FSA at a later date, will set 
        them up for longer-term success and business viability.

   Increase FSA capacity & ensure FSA staff reflect the full 
        diversity of the communities they serve.

      Another critical aspect of ensuring that FSA programs continue to 
        meet demand and help farmers compete is to ensure that all 
        county offices are adequately staffed to meet producer needs 
        and that FSA county office staff reflect the full diversity of 
        the communities that they serve.
Discrimination and disproportionate challenges for young farmers of 
        color
    USDA's documented history of discrimination, particularly when it 
comes to lending, has contributed to the disparity in access to credit 
experienced by young farmers of color. The debt relief offered in the 
American Rescue Plan was a necessary and important step, but farmers 
are still waiting to see this funding be made available to them as a 
result of numerous legal challenges. While farmers with direct loans 
from FSA have been instructed to pause payments, those with guaranteed 
loans are left out and are at risk of default. Further, the longer that 
this current situation continues, the greater the threat of having to 
make all those delayed payments at some point, if the American Rescue 
Plan funding does not materialize.\9\
---------------------------------------------------------------------------
    \9\ See: https://www.gao.gov/assets/gao-19-539.pdf and https://
crsreports.congress.gov/product/pdf/R/R46768.

   FSA should explore and act on all options available to 
        protect guaranteed loan borrowers, including loan servicing, 
        restructuring actions, and buying back guaranteed loans, to 
        secure debt relief for Socially Disadvantaged and Economically 
---------------------------------------------------------------------------
        Distressed borrowers.

   Ensure robust accountability and transparency at the local 
        level in the civil rights process, including continuing to 
        collect relevant data on the Farm Service Agency's lending 
        outcomes, particularly as they relate to Socially Disadvantaged 
        and Economically Distressed farmers and ranchers.

   Expand funding for, and effectively implement, the Indian 
        Tribal Land Acquisition Loan Program and the Highly 
        Fractionated Indian Land Loan Program.

   Ensure that tenants in common have a clear path to 
        eligibility for direct or guaranteed farm ownership and 
        operating loans.

   Create a down payment grant program for Socially 
        Disadvantaged and Economically Distressed borrowers.

   Echoing the recommendations of the Federation of Southern 
        Cooperatives and Alcorn State University, create a Black farmer 
        financial institution modeled on Farm Credit to support and 
        resource these farmers.
Young farmers operate unique, diversified farm operations
    Young farmers are more likely to be farming using organic or 
sustainable practices; diversified; small-scale; focused on specialty 
crops; selling direct-to-consumer; first generation; and to be women, 
queer, or farmers of color.\10\ They are also increasingly likely to be 
farming in cooperative or non-family operations. The result is that 
young farmers run operations that may not look like traditional farm 
models that FSA loan officers are accustomed to. Additionally, given 
the high costs of land and other farming inputs, as well as a desire to 
be connected to their communities, many young farmers rely on elements 
of agritourism to support their farm operations.
---------------------------------------------------------------------------
    \10\ Building a Future with Farmers II.
---------------------------------------------------------------------------
Recommendations
   Ensure USDA programs support the diversified farm operations 
        that young farmers are running, including considering income 
        from agritourism as part of their overall financial picture.

      Agritourism income is not currently recognized by USDA loan 
        programs as eligible income, yet for many, this is an 
        incredibly important part of their overall financial viability 
        and a way to be more engaged with their communities. USDA 
        should recognize this income as part of young farmers' 
        financial position in considering providing financing to them.

   Invest in alternative lenders, such as CDFIs, to provide 
        more affordable financing options.

      CDFIs are trusted, community-based lending institutions that 
        often have flexibility to work with farmers. California 
        FarmLink, Self-Help Credit Union, Coastal Enterprises Inc., and 
        the Indian Land Capital Company are examples of organizations 
        providing flexible, accessible financing to farmers who know 
        and trust the organization. Increased funding and flexibility 
        for the Healthy Foods Financing Initiatives (HFFI) at both the 
        CDFI Fund and at USDA will help CDFIs to build their healthy 
        food lending work.

   Support cooperative and collective ownership models and 
        establish lending guidelines for farmer cooperatives.

      As farmers grapple with the challenges of accessing land, 
        patterns of ownership and access may look different than they 
        have in the past. Policies and programs should recognize 
        farmers' need for land security while supporting models of 
        cooperative and collective land ownership or working into 
        ownership over time, among other strategies.

   Ensure young farmer representation on county committees.

      County committees are important decision-making bodies at FSA and 
        should be inclusive of next generation farmers, particularly 
        Socially Disadvantaged and Economically Distressed farmers. 
        Reform the county committee process to increase inclusion by 
        clearly disseminating election guidelines, enforcing term 
        limits, and changing statute so that all farmers who are 
        eligible for USDA programs are eligible to run and vote in 
        county committee elections. These reforms should include 
        reporting to measure outcomes.
Access & paperwork burdens
    We have heard from our network that many farmers want to apply to 
FSA loan programs but do not have enough experience or income from 
farming to meet FSA's requirements. Likewise, they may start the 
process but be overwhelmed by the amount of paperwork involved. They 
may also be constrained by poor, or limited, credit history. FSA can 
help these farmers gain access to credit through simplified loan 
program offerings with lower lending limits and significantly reduced 
paperwork.

   Waive collateral and experience requirements for FSA 
        Microloan programs of $10,000 or less for small-scale farm 
        financing needs.

      While the USDA Microloan programs are incredibly helpful to 
        producers, there is still a need to help some small-scale 
        farmers begin to build credit and their relationship with FSA 
        as a lending institution. By waiving some of the collateral and 
        experience requirements for FSA Microloans of $10,000 or less, 
        the Agency can assist farmers in beginning the process of 
        building credit and accessing FSA programs with minimal 
        paperwork.

   Ensure FSA services are easily accessible online.

      Continued modernization and online accessibility of FSA services, 
        including remote loan servicing, is incredibly helpful to young 
        farmers. This helps to ensure that they can easily apply for 
        credit and understand their financial picture without traveling 
        in person to an FSA office. This may also allow them to work 
        with loan agents who better understand their operations, access 
        FSA services during the farming season when traveling to an 
        office in person is difficult, and generally have more ease of 
        access to credit.
Young farmers are burdened by existing debt, particularly student loan 
        debt
    Farming is a capital intensive and risky undertaking, and accessing 
credit for farming is already difficult. When saddled with thousands of 
dollars of student loan debt, many young farmers are denied loans to 
launch or grow their farm businesses. After land access, student loan 
debt is the most significant challenge to young farmers--we hear again 
and again that student loan debt is keeping young people from 
succeeding in agriculture.
Recommendations
   Establish a pilot Debt Consolidation and Buy-Out Program 
        within FSA, to facilitate refinancing and debt management for 
        Socially Disadvantaged and Economically Distressed farmers.

   Pass Federal legislation to help farmers manage their 
        student loan debt so they can better access capital for land 
        purchases.

   Establish guidelines so that potential Socially 
        Disadvantaged and Economically Distressed borrowers are not 
        restricted based on a previous debt write-down or other loss 
        within FSA's loan programs.

   Ensure that Socially Disadvantaged and Economically 
        Distressed borrowers who miss a payment are still eligible to 
        access FSA funds.

   Eliminate the waiting period for Socially Disadvantaged and 
        Economically Distressed borrowers resolving tax lien issues on 
        land.

      We have heard that farmers who are resolving tax lien issues on 
        land have been told to wait a period of years following the 
        clearing of title before they can access FSA programs. This 
        policy negatively impacts farmers who need to take every 
        opportunity they can to access land as quickly as possible. FSA 
        should inspect this practice and ensure it is removed as a 
        barrier.
Lack of uniformity and application of programs in local offices
    One challenge that young farmers face is lack of uniformity among 
local FSA office staff in program awareness and implementation. 
Increased FSA staff capacity, hiring FSA staff who reflect the full 
diversity of farmers they serve, providing increased training, and a 
focus on culturally-appropriate services will all help alleviate this.
    One particular example that we have heard is that alternative 
certification, used to help Indigenous producers access FSA programs, 
is unevenly applied and understood by FSA loan officers. We also know 
that the Land Contract Guarantee Program should be more widely 
utilized. It creates a helpful way for young farmers to access land 
without requiring them to work directly with a lender, yet this program 
has very low adoption.\11\ We have also heard from farmers about uneven 
adoption of the credit elsewhere test, with some FSA offices requiring 
paper documentation and others not. This creates confusing and 
inequitable standards for producers.
---------------------------------------------------------------------------
    \11\ In 2019, the National Sustainable Agriculture Coalition 
reported that only two land contract guarantee loans had been 
administered by FSA since 2012, https://sustainableagriculture.net/
publications/grassrootsguide/farming-opportunities/contract-land-sales/
#action.
---------------------------------------------------------------------------
    Solutions include additional government resources for coordination 
and accountability; increased resources to help farmers navigate USDA 
programs and bring complaints to higher levels of government; and 
continued funding of programs like the Heirs' Property Relending 
Program, that provide resources to community-based organizations to 
serve their members' needs directly.

   Establish a new office and coordinating position within the 
        FPAC mission area, focused on equitable access to land and 
        centering the needs of small-scale, beginning, urban, Socially 
        Disadvantaged, and Economically Distressed farmers.

      Implement high-level oversight at USDA to ensure there is 
        coordination among departments within the agency as well as 
        with other agencies across the Federal Government so that 
        programs are working together to facilitate transition and 
        access for young farmers.

   Increase training for FSA office staff.

      Ensu[r]e that FSA office staff are receiving robust training on 
        program implementation, specifically around programs that 
        impact young, Socially Disadvantaged, and Economically 
        Distressed producers.

   Increase support for the Beginning Farmer and Rancher 
        Coordinators.

      Having an identified Beginning Farmer Coordinator in every state 
        and a National Coordinator position in place has been extremely 
        helpful in elevating farmer complaints and challenges, and 
        seeing results in those challenges being addressed. Continued 
        funding and support for these coordinator positions is 
        critical, including increased national-level staffing.

   Continue funding cooperative agreements with community-based 
        organizations.

      Cooperative agreements with community-based organizations provide 
        critical additional capacity outside of USDA to help farmers 
        access and navigate USDA's programs. In 2020, National Young 
        Farmers Coalition received funding to help conduct outreach 
        about the CFAP 2 program. This program met a serious need among 
        young farmers, yet in our outreach to hundreds of farmers, we 
        learned that 50 percent had not heard of the program. Through 
        our outreach, we helped them apply and receive program funds, 
        increasing the capacity of USDA support to reach farmers. These 
        kinds of outreach efforts around FSA credit programs are 
        particularly important and should continue to receive funding.

   Provide continued, and increased, funding for the Heirs' 
        Property Relending program.

      Created in the 2018 Farm Bill, this program is a critical step in 
        providing funding to producers to address land and credit 
        challenges through trusted community-based organizations. This 
        adds additional, culturally-appropriate capacity to the USDA's 
        ability to reach producers. Congress and USDA should ensure 
        that the implementation costs these organizations shoulder are 
        eligible under the program and continue supporting them in 
        doing this important work.
Access to housing
    Lacking access to affordable farmland and, therefore, the ability 
to live on-farm, young farmers often rent housing near their leased 
farm property. Compounded by difficulty accessing land and credit, 
housing presents a significant challenge for new farm owners as they 
establish and grow their businesses. For farmers who are not farm 
owners, the challenge of housing can be especially acute. According to 
the National Rural Housing Coalition, 60 percent of the estimated three 
million farmworkers in the U.S. are in poverty--five times the national 
average.

   Ensure that the USDA FSA is coordinated with other agencies, 
        including Rural Development, to connect housing, land, and 
        credit access challenges.

      USDA programs should be coordinated and working together to 
        ensure that the various programs and loan products available to 
        farmers can help address the interconnected challenges of 
        access to land, housing, and credit.
Starting and growing a farm operation
    Access to capital is critically important, but debt is a burden 
that requires careful management. Farmers just starting out are faced 
with the need to invest in multiple aspects of their operations at 
once--with land often being the highest cost and priority. The Federal 
Government can help them by providing capital that considers their 
operations and needs holistically.

   Scale up existing programs to expand support for ``wrap 
        around capital'' that combine business technical assistance 
        with affordable financing.

      It is critical that farmers have assistance in demonstrating a 
        strong business plan in order to access credit. This is 
        particularly true for farmers who have been denied funding.

   Review the ability of FSA borrowers to build their credit 
        score as they are borrowing.

      As Julia pointed out in her testimony, despite repaying Federal 
        student loans and making payments on two current FSA loans, she 
        still did not have a credit score. She learned that apparently 
        Federal credit debt does not contribute to credit scores. This 
        means that regardless of her good standing on her loans, if she 
        were to go to a traditional lender, they may be unlikely to 
        lend to her, or they may offer her the highest interest rate on 
        the least favorable terms. This should be reviewed and 
        addressed so that young farmers can build credit while they are 
        paying back FSA loans.

   Ensure that farmers who pay off their FSA loans early are 
        not required to graduate from FSA loan programs.

      Young, Socially Disadvantaged, and Economically Distressed 
        borrowers should still have the opportunity to access FSA's 
        favorable interest rates even if they are able to pay off one 
        of their loans early. Early payment indicates building momentum 
        towards financial stability and success, something FSA programs 
        should continue to foster and encourage rather than shutting 
        the door on.
Support beyond credit
    Congress must make pathways to finance more widely accessible to 
young farmers and ranchers who have invested their time in building 
their farming skills rather than their net worth. We urge reframing the 
Federal Government's role in access to credit as an investment in the 
next generation of farmers, rather than simply lending funds that must 
be paid back. Above all, we urge Congress to think about how it can 
support young farmers holistically--credit is part of the answer, but 
not the entire solution. While debt can be an investment, it can also 
be an incredible burden.

   Direct significant funding to a new initiative that would 
        make USDA funding available to eligible entities, including 
        Tribes, municipalities, nonprofits, and cooperative entities 
        with priority for projects led by, and benefitting, Socially 
        Disadvantaged and Economically Distressed farmers and ranchers.

      This new initiative will be the first farm bill program to be 
        designed from the start to invest in secure, equitable access 
        to land for farmers. This will make funds available to 
        community-led projects that create equitable land access 
        outcomes and secure access to land for farmers who are growing 
        food for their communities. This program may take the form of a 
        long-term forgivable loan that incorporates support for 
        housing, infrastructure, farmer training, and land stewardship 
        practices. This funding should enable entities to act quickly 
        in the real estate market by having preemptive access to funds.

    As the average age of existing landowners and farmers increases and 
we face an impending transition of millions of acres of agricultural 
land, it is critical that Congress take action now to make this 
transition equitable and support the next generation of farmers and 
land stewards. The focus of the next farm bill must be on policies that 
enable equitable land access and transition, and access to credit is at 
the heart of this issue.
    Young Farmers would like to thank Chairman David Scott, and Ranking 
Member Glenn `G.T.' Thompson for convening this hearing to discuss the 
state of credit for young, beginning, and underserved producers, and 
for your consideration of this statement for the hearing record.
            Sincerely,
            
            
Holly Rippon-Butler,
Land Campaign Director,
National Young Farmers Coalition.
                                 ______
                                 
  Supplementary Material Submitted by Willard Tillman, Member of the 
                 Board, Rural Coalition/Coalicion Rural
Insert 1
          Ms. Kuster. You had referenced the appeals process, and I 
        just wondered if you would describe that and if there is 
        anything that we need to do to fix that in the upcoming farm 
        bill.
          Mr. Tillman. The appeals process?
          Ms. Kuster. Appeals for denials of loans.
          Mr. Tillman. Yes. There needs to be some type of structure 
        there in the appeals process. A lot of times----
          The Chairman. If I may, Mr. Tillman, the lady's time has 
        expired, but if you would not mind submitting that in writing 
        the really good idea you were about to express to----
          Mr. Tillman. I would appreciate that. That I would 
        appreciate.

    The process to file an appeal is outlined on the National Appeals 
Division is outlined on their website: https://www.nad.usda.gov/
content/file-appeal, including the following required information 
listed there:

          ``What your appeal request needs for processing:

      1.  A copy of the adverse decision from the Agency that is the 
            basis for your 
                appeal (if available).

      2.  A brief description of why you disagree with the Agency's 
            decision.

      3.  Appeal must be personally signed by the participant(s) 
            identified in the 
                adverse decision; it does not need to be notarized.

      4.  File your appeal request within 30 calendar days of receipt 
            of the Agen-
                cy's adverse decision.

          Appeal Request Form: An appeal request form can be downloaded 
        here.''
          Significantly, the Appeal Request Form includes the following 
        statement:

                  ``Reminder: You waive your right to appeal an adverse 
                decision if an appeal request is not filed within 30 
                calendar days of the date you received the adverse 
                decision.''

    Thus, many producers may have already lost their right to appeal a 
decision if they did not act almost immediately, before they may have 
been aware of the right to appeal.
    The process for review of appeals is outlined here: https://
www.nad.usda.gov/content/common-appeal-related-questions.
    The review is supposed to take place in less than 3 months but 
often takes longer. NAD does not have authority to enforce their 
decisions; this is left up to the agencies. In the case of operating 
loans, even if a farmer should win an appeal, and if even if FSA 
implemented that decision within 30 days, FSA has regulations that 
prohibit using information more than 90 days old, meaning the producer 
will have to resubmit an application, meaning that producer initially 
denied a loan due to agency mistakes is unfairly penalized for those 
mistakes, including being unable to get the loan until the next growing 
season.
    Adding to the complexity is the fact that NAD does not have 
authority to address civil rights complaints, or complaints that fall 
under the jurisdiction of the inspector general. There are filing time 
issues related to each type of appeal or complaint, and there is no 
clear guidance comparing the processes, the purposes of each, the 
timelines and deadlines for each, and how the processes relate to each 
other.
    Responses to complaints filed with the Assistant Secretary for 
Civil Rights or to the Inspector General are even slower, and in the 
latter case, a finding of fraud by the Inspector General may result in 
penalties for whomever committed fraud but does not provide a remedy to 
the producer injured by the fraud.
    Thus, historically underserved and socially disadvantaged producers 
in particular, are provided little timely and clear guidance into how 
to resolve they many barriers they continue face. These processes are 
long, and rarely result in a positive result for the producer. We urge 
the Committee to hold a fuller hearing on the intersection of these 
process.
    Most of all, we urge Congress to require annual reports that 
summarize the number of appeals and civil rights complaints annually 
filed, with a summary of how many were resolved and how many in favor 
of the agency, and how many in favor of the producer, and how promptly 
remedies were delivered.
    Please see Appendix 1 for a fuller discussion on the much wider 
list of factors that should be considered when evaluating the fairness 
of the lending process.
Insert 2
          Mrs. Hayes. Well, thank you so much for that. And I want to 
        be respectful of the time, but I will ask one last question if 
        you could submit it, anybody on the panel. I am particularly 
        interested in how Congress can reduce barriers for 
        underrepresented farmers, for young BIPOC minority farmers. I 
        am from the State of Connecticut. Not all of our farms are on 
        large land. We have fish farmers, we have small urban farmers, 
        we have just some really creative things going on in the state 
        that have not been accounted for in this industry. So anything 
        you can offer in that area for how Congress can help, I would 
        appreciate it.
          With that, Mr. Chairman, I yield back.

    The timely access to credit at the time a farmer needs it is 
essential to the success of almost any farming operation. Producers 
also need timely and fair access to the full range of related USDA 
programs for farmers as these programs help producers manage viable and 
sustainable operations and cash flow their loans.
    Yet participation in the full range of USDA programs for farmers 
remains elusive for the majority of historically underserved producers. 
The data to fully understand and address the disparities in program 
access and service delivery remains a primary barrier to measuring and 
implementing accountability for fair access to service.
    The largest number of discrimination claims settled with in the 
past 2 decades related to the discouragement of applications for USDA 
programs. To address this issue, in 2014 Farm Bill, Congress made 
mandatory the provision of a receipt for service to farmers to record 
all their requests for service and the agency response to their 
request, including an agency instruction on follow-up needed by the 
producer.
    The USDA National Appeals Division recognizes that FSA's employees 
have a greater understanding of program requirements. Administrative 
Law Judges recognize and understand that ``while a program participant 
is responsible for exercising due diligence in understanding the 
requirements of a program, NAD case decisions recognized that it is not 
reasonable to expect a program participant to have greater 
understanding of program requirements than FSA's own employees.[''] 
This is why receipt for service is so critical to understand what 
farmers are told by FSA staff. It is also important to note that the 
receipt for service reveals what the farmer was not told in terms of 
program benefits and services. It is also possible through receipts for 
service for the agency to ascertain how this treatment is the same or 
different from what other farmers were told at the same time.
    However, to this day, agencies routinely fail to provide the 
receipt for service to producers and discourage requests for this 
receipt. This Committee should review the use of the Receipt for 
Service and adopt new measure to assure compliance by all local offices 
that serve farmers.
    The fact that a minority farmer participates in a private or 
Federal loan program does not automatically equal meaningful, fair 
participation. Some farm credit transactions run afoul of consumer 
credit statutes and we can attest to such examples evincing lending 
irregularities and discrimination. Therefore, participation in harmful 
discriminatory lending transactions is more detrimental economically 
than straight forward credit denial, especially when the loan is over 
collateralized, and a personal residence security interest is mandated 
but is unnecessary to secure the loan in question. Minority farmers 
understand that agriculture is a high economic risk industry and their 
reliance on fairness in credit transactions must be guaranteed by the 
lenders offering various credit options.
    Farm lending, especially when directed by the government or 
guaranteed by the government, should be a consistent and evenly applied 
farm risk management toll. In accordance with 7 CFR 1779.63 and 7 CFR 
4279.281 the U.S. Department of Agriculture and the Small Business 
Administration must make sure that lending irregularities and 
discrimination is not a part of any loan guaranteed by the government. 
Minority farmers confront the same floods, droughts, and market 
fluctuations as non-minority farmers. Inequities and irregularities 
within farm lending sector should not be held in the same farm risk 
category as natural disasters.
    Preventing irregular and discriminatory lending practices--The 
current appeals and civil rights processes do not include a full review 
of critical loan transactional components that we have commonly found 
such as (a) excessive collateral requirements, (b) unwarranted late 
disbursement of loan funds, (c) misapplication or calculation of actual 
or average farm production, (d) evaluation of loan applications based 
the association of credit risk identified with third party non 
applicants, (e) directing or requiring borrowers to purchased equipment 
or inputs from entities related to the transactional lender, (f) 
suggesting or requiring under-funded or over funded annual crop loans 
with the intent to gravely impact repayment ability, (g) appraisals 
that either low ball or high ball the value of land, and which are 
conducted at times by parties or for who are not disinterested in the 
transaction, (h) denying or forcing loan servicing options that 
diminish annual farm operations and loan repayment ability and (i) 
forced graduation from FSA loans. While not exhaustive, this list is a 
compendium of discriminatory or irregular lending conduct that is 
prohibited by the Equal Credit Opportunity Act, the Fair Housing Act, 
and the Dodd Frank Unfair Deceptive and Abusive Practices Act. The 
appeals and civil rights processes must be amended to allow the full 
range of deceptive and discriminatory practices are considered in the 
investigation and consideration of appeals and complaints.
    The rising cost and low availability of land at present leaves 
historically underserved and beginning farmers and ranchers at a very 
vulnerable position in accessing they credit they need to enter 
farming, transition between generations, or to adapt their farming 
operation to change market and climate conditions. A loan provided 
early in the season, rather than after April each year, can make all 
the difference. Even the slow walking of completing an application, can 
leave a producer with the credit needed to secure a property, or to buy 
the inputs needed for a success production year.
Insert 3
          Ms. Plaskett. . . .
          * * * * *
          So I wanted to ask the witnesses, do you find your current 
        application process to be timely, allowing individuals to 
        pursue their goals having land within a year's framework? I was 
        going to ask that question to Mr. Willard Tillman or Ms. Dania 
        Davy, if you all have found any information about this.

    The application process for credit is often very challenging for 
producers and does not allow timely pursuit of goals or accessing land 
within a year's framework, particularly in areas where land is quickly 
rising in prices. Incoming producers, and especially historically 
underserved producers, are often hit with excessive collateral 
requirements, and many other irregular or discriminatory practices 
noted above. An inequitable funded loan will imperil the producer for 
years to come.
Insert 4
          Mrs. Bustos. . . .
          * * * * *
          Okay. I am going to move on to the whole panel then. Do you 
        see ways for crop insurance and ag credit to work better for 
        young and beginning and underserved producers? That is to the 
        whole panel.

    At present, many historically underserved producers produce crops 
poorly covered by existing crop insurance programs. A new 
microinsurance product is worth review. Producers are much more likely 
to use NAP or Livestock Indemnity which are critical to help the farmer 
pay loans in times of loss, or in the case of Livestock Indemnity, to 
replace collateral such as cattle when they are lost. Problems in the 
loss adjustment processes need to be addressed, including when loss of 
cattle washed away in flooding cannot be documented. An alternate 
process is needed. However, many times, the amounts paid out barely 
replace the cost of the insurance, also making the sale of products 
less beneficial to a crop insurance agent.
                               appendix i
March 3, 2019

  Hon. Gene L. Dodaro,
  Comptroller General,
  U.S. [Government Accountability] Office,
  Washington, D.C.

  Re: SEC. 5416. GAO Report on Credit Service to Socially Disadvantaged 
            Farmers and Ranchers

    Dear General Dodaro:
I. Introduction
    As the [Government Accountability] Office prepares to fulfill its 
duties under Section 5416 of Public Law 115-334, the 2018 Farm Bill, 
the undersigned organizations representing the agriculture lending 
interests of minority and socially disadvantaged farmers and ranchers 
encourage the adoption of methodologies that examine and evaluate farm 
lending policies having a negative impact on minority farmers and 
ranchers. The study's methodology should examine, from our perspective, 
and evaluate certain ``unique'' lending patterns, practices and 
policies that reliable sources, academic and legal, verifiably document 
as contributors to farm loan default, acceleration and foreclosure 
within the minority farming community.
    The undersigned organizations over the years have reviewed 
thousands of loan documents and assisted hundreds minority farmers with 
loan servicing options. Before and after Keepseagle, Love, and Garcia 
Pigford Farmer settlements, the undersigned organization labored with 
minority and socially disadvantaged family farmers and ranchers in the 
areas of farm credit applications, collateral requirements, and loan 
servicing. As a collective of over 100 years of experience in family 
farm foreclosure prevention and farm wealth transition, we know 
firsthand the consequences of late loans, disparate treatment and 
disparate impact in loan servicing and other hidden farming lending 
discriminatory policies and procedures.
    A history of loan service to our farmers gives us the knowledge and 
credibility to offer suggestions that will accommodate efforts to 
determine other appropriate details of the study's methodology. As you 
develop a methodology to gather and organize reliable report data to 
present to the House and Senate Agriculture Committee, consider farm 
loan practices from our practical and historical perspective. As 
delineated herein, our methodology suggestions find general acceptance 
in 7 U.S.C. 1983c which authorized the Secretary of Agriculture to 
implement pilot loan programs when there is a finding of loan program 
irregularities. This study is much needed as it will point out farm 
lending irregularities for the purpose of improving credit for all 
farmers. Farmers appreciate the fact that the legislative language 
mandates a product completion within 120 days of December 18, 1018, the 
execution date of the 2018 Farm bill.
II. Legislative Requirements
    The statutory language requiring of the study is general and 
purposely vague. We point out the vagueness of the language, not as a 
criticism, but to augment the necessity of a broader methodology that 
captures real irregularities faced by minority farm borrowers.

    Essentially, Section 5416. of Title V of the 2018 Farm Bill 
requires the Comptroller General of the United States to conduct a 
study to (A) assess the credit and related services provided by 
agricultural credit providers to socially disadvantaged farmers and 
ranchers; (B) to review the overall participation of socially 
disadvantaged farmers and ranchers in the services described in 
subparagraph (A); and (C) to identify barriers that limit the 
availability of agricultural credit to socially disadvantaged farmers 
and ranchers. Title 5416, Sec. 5416 of Public Law 115-334.

    The language's general reference to terms like access, 
participation rates and barriers by implication suggests that the 
functionality of the methodology encompasses the time, place, manner of 
access, and foreclosures that may violate Federal laws if the 
irregularities are found to be within the consumer protection 
prohibitions of statutes like the Equal Credit Opportunity Act (ECOA)--
15 U.S.C. 1691-691f, Fair Housing Act (FHA)--42 U.S.C. 3601-3631; Dodd 
Frank Unfair Deceptive and Abusive Practices Act (UDAP)--12 U.S.C. 
Section 5531(d).
    Even though not specifically mentioned, it is permissible that the 
study's methodology must be comprehensive to the extent that access, 
participation and barriers will be quantitatively and qualitatively 
articulated by examining or evaluating lending irregularities and 
discriminatory practices against relevant regulatory guidance of 
relevant consumer protection statutes. If a plain meaning 
interpretation of Section 5416 applies without permissible 
considerations, the data could be limited to the number of minority 
farm loans granted and denied and miss critical data on key issues such 
as lending patterns, policies and practices that have a disparate 
impact or serve as disparate treatment. Missing the real issues of farm 
loan irregularities and discriminatory terms and conditions may cause 
further extractions of land wealth from minority farmers while denying 
the same or similar viable, economically appropriate lending risk 
management tools offered to non-minority farmers and ranchers. We 
understand that not every aspect of a farm loan transaction can be 
studied. But critical irregularities must be studied. The Congressional 
intent of Section 5416 reveals that the results must inform and guide 
policy makers and practitioners on how to create program efficiencies 
while ensuring fair farm lending.
    Reviewing overall farm lending participation rates does not address 
associated issues of barriers to participation such as fair and 
equitable participation. The fact that a minority farmer participates 
in a private or Federal loan program does not automatically equal 
meaningful, fair participation. Some farm credit transactions run afoul 
of consumer credit statutes, and we can attest to such examples 
evincing lending irregularities and discrimination. Therefore, 
participation in harmful discriminatory lending transactions is more 
detrimental economically than straight forward credit denial, 
especially when the loan is over collateralized, and a personal 
residence security interest is mandated but is unnecessary to secure 
the loan in question. Minority farmers understand that agriculture is a 
high economic risk industry and their reliance on fairness in credit 
transactions must be guaranteed by the lenders offering various credit 
options.
    Farm lending, especially when directed by the government or 
guaranteed by the government, should be a consistent and evenly applied 
farm risk management toll. In accordance with 7 CFR 1779.63 and 7 CFR 
4279.281 the U.S. Department of Agriculture and the Small Business 
Administration must make sure that lending irregularities and 
discrimination is not a part of any loan guaranteed by the government. 
Minority farmers confront the same floods, droughts, and market 
fluctuations as non-minority farmers. Inequities and irregularities 
within farm lending sector should not be held in the same farm risk 
category as natural disasters.
III. Irregular and Discriminatory Lending Practices
    The data collected for analysis, under Section 5416, must include 
loan transactional components such as (a) excessive collateral 
requirements, (b) unwarranted late disbursement of loan funds, (c) 
misapplication or calculation of actual or average farm production, (d) 
evaluation of loan applications based the association of credit risk 
identified with third party non applicants, (e) directing or requiring 
borrowers to purchased equipment or inputs from entities related to the 
transactional lender, (f) suggesting or requiring under-funded or over 
funded annual crop loans with the intent to gravely impact repayment 
ability, and (g) denying or forcing loan servicing options that 
diminish annual farm operations and loan repayment ability. While not 
exhaustive, this list is a compendium of discriminatory or irregular 
lending conduct that is prohibited by the Equal Credit Opportunity Act, 
the Fair Housing Act, and the Dodd Frank Unfair Deceptive and Abusive 
Practices Act. These aspects must be studied.
IV. Develop a Methodology from Applicable Consumer Credit; Civil 
        Rights; Farm Credit Statutes and Regulations
    The goal of this study is to collect data on access to fair credit 
since the lack of access to fair credit is the same as a barrier to 
credit. We recommend that the study examines 8 (eight) standards.

  (a)  Effects Test.--The Equal Credit Opportunity Act and its 
            implementing regulations found at 15 U.S.C. 1691, and 12 
            CFR 1002, Regulation B, may prohibit certain credit 
            practices that are discriminatory in effect because the 
            practice or policy has a disproportionately negative impact 
            on a prohibited basis such as race, age, gender, etc. Under 
            the effects test, the policy or practice of the creditor 
            does not have the intent to discriminate. The lending 
            practice, under the effects test, appears to be neutral on 
            its face. It is the application of the policy or practice 
            that presents the irregular, discriminatory disparate 
            impact or disparate treatment problem for the minority or 
            socially disadvantaged farmer borrower. For example, the 
            lender informs non-minority similarly situated farm loan 
            borrowers on the best and lowest price seed, tractors or 
            fertilizer. Or the non-minority borrower may get detailed 
            information on where to find low priced farmland for 
            rental. In contrast, the minority farmer does not get the 
            same ``best source to purchase'' advice. Another example is 
            appropriate as is the ``best source to purchase'' example. 
            Consider a lender loan requirement specific to the minority 
            farmer where a refinance of personal residence using a USDA 
            guaranteed loan is mandatory for the closing of a farm 
            operating loan. Under the ``effects test'' a disparate 
            impact problem arises where, in contrast, the non-minority, 
            similarly situated farm borrower is not required to 
            refinance his personal residence and or use the personal 
            residence as collateral for a farm operating loan. It is 
            easy to see that the minority farmer, in these examples are 
            subjected to disparate treatment. Granted, some lender 
            policies or practices will pass muster if it meets a 
            legitimate business need of the lender that cannot 
            reasonably be achieved as well by means that are less 
            disparate in their impact. See Regulation B, 12 CFR Section 
            1002.2(c), (m), (n), (t) and (z).

  (b)  Deceptive and Abusive Lending.--Although less frequently, a 
            lender may subject a farm loan borrower to terms and 
            conditions that are designed to put the farmer out of 
            business. A farmer may be subjected to coercive tactics 
            whereby a farmer can be lured into a farm loan that is not 
            affordable or guaranteed to result in foreclosure. Lender 
            decisions to such abusive or deceptive tactics in loan 
            making or terms and conditions may violate the Dodd Frank 
            Unfair Deceptive and Abusive Practices Act (UDAP). In the 
            farming area, like other consumer credit, a UDAP claim can 
            be successful only when the lenders conduct shows the 
            following: ``(1) materially interferes with the ability of 
            a consumer to understand a term or condition of a consumer 
            financial product or service; or (2) takes unreasonable 
            advantage of--(A) a lack of understanding on the part of 
            the consumer of the material risks, costs, or conditions of 
            the product or service; (B) the inability of the consumer 
            to protect the interests of the consumer in selecting or 
            using a consumer financial product or service; or (C) the 
            reasonable reliance by the consumer on a covered person to 
            act in the interest of the consumer.[''] Dodd-Frank Wall 
            Street Reform and Consumer Protection Act, 12 U.S.C. 
            Section 5531(d).

  (c)  Residential Real Estate.--In order to obtain a farm operating 
            loan, a farmer may be required to offer his personal 
            residence as collateral for such loan. On its face the 
            offering of a personal residence can be a lender 
            requirement that is based on the credit risk of the 
            particular loan. However, Civil Rights statutes and 
            implementing regulations such as 24 CFR Section 100.130 (a) 
            prohibit a lender from imposing different terms or 
            conditions for the availability of loans or other financial 
            assistance because of race where the transaction is secured 
            by residential real estate. See 42 U.S.C. 3604(b); 24 CFR 
            Section 100.130 (a); and 24 CFR Section 
            100.130(b)(1)(2)(3).

  (d)  Excessive Collateral Requirements.--Whether minority farmers are 
            required more frequently than non-minority farmers to 
            tender excessive collateral in order to receive a farm loan 
            or to acquire meaningful loan servicing through workout and 
            loan modifications. See Regulation B, 12 CFR 1002.6(b)(4); 
            Regulation B 12 CFR 1002.2(n).

  (e)  Discriminatory Loan Terms and Conditions.--Whether minority 
            farmers more frequently than non-minority farmers receive 
            loan funds after April of any given crop year. Under the 
            guidance of 12 [CFR] 1002.6(b)(4) a lender cannot provide 
            two different systems of credit application, loan pricing 
            or loan servicing. See Regulation B, 12 CFR 1002.6(b)(4).

  (f)  Third Party Influence.--Whether minority farmer loan application 
            packages and lending decisions are unduly influenced by 
            third party entities such as equipment dealers, 
            agricultural input suppliers and or processors and millers 
            of raw agricultural products. See Regulation B, 12 CFR 
            1002.2(c); 12 CFR 1002.4(a)(b); and Unfair Deceptive 
            Abusive Practices Act_12 U.S.C. Section 5531(d).

  (g)  Lender Control Over Farmer Operations.--Whether farm lenders 
            more frequently exert control over the daily management of 
            minority farmer operations in terms of acreage planted and 
            equipment purchased. Unfair Deceptive Abusive Practices 
            Act_12 U.S.C. Section 5531(d).

  (h)  Intentional Lender Mistakes.--Whether certain lender decisions 
            are implemented with intent to cause irreparable damage to 
            the economic viability of minority farm operations. Unfair 
            Deceptive Abusive Practices Act_12 U.S.C. Section 5531(d) 
            (UDAP). We do not infer that every farm loan, whether USDA 
            Direct or USDA guaranteed, is made and designed with the 
            intent to defraud or damage the farming operations of 
            minority operators. But, history and experience, 
            nevertheless, inform us that such problems like this do 
            appear occasionally and have the intended effect of causing 
            harm and failure to minority farmer operations. Again, we 
            stress that these practices do not happen every day, but 
            our farmers tell when they exist, and the farmers tell us 
            when lenders make lending mistakes--intentionally or not. 
            Having made a compelling argument to the U.S. Congress 
            during the 2018 Farm Bill debate, the House and Senate 
            Agriculture Conference Committee, responded proactively to 
            provide a provision of ``equitable relief'' for farm loan 
            borrowers in those circumstances where a FSA farm loan 
            employee makes a mistake--knowingly or unknowingly--and 
            that mistake causes a borrower to be in noncompliance on a 
            USDA direct loan. Section 5304 of the 2018 Farm Bill 
            conference report gives the Secretary of Agriculture the 
            authority to offer a farm loan borrower a provision of 
            ``equitable relief'' when a decision of a farm loan officer 
            causes the borrower to be out of compliance with the loan 
            program. Noncompliance with a loan term or provision can 
            lead to default, acceleration, and foreclosure. The 
            ``equitable relief'' provisions of Section 5304 are far 
            afield from the fraud prevention provision of the UDAP. 12 
            U.S.C. Section 5531(d). Lender mistakes whether intentional 
            or not will cause economic damage to farm business 
            operations. We mention the presence of ``equitable relief'' 
            in Section 5304 to highlight the existence of a problem and 
            the necessity that the GAO study look into irregular 
            lending practices having a flavor of mistake or fraud. Sec. 
            5304 of Public Law 115-334.
V. Industry Specific Credit Transactions: Sugar Cane and Contract 
        Poultry
    Although not often implemented by the U.S. Department of 
Agriculture, 7 U.S.C. 1983c permits the Secretary of Agriculture to 
conduct pilot loan programs in areas of lending irregularities, such as 
those endemic to industries such as contract poultry and sugar cane 
production. The existence of pilot loan programs under 7 U.S.C. 1983c 
provides additional credibility to the research questions and 
methodologies that we suggest be made a part of this study. Our 
suggested approach makes a valid attempt to explain farm lending 
irregularities whether they be historical and race based or neutral 
loan making business decisions that have a disparate impact on minority 
farm loan borrowers. Upon the general applicability of 7 U.S.C. 1983c, 
we urge a methodology that informs the Secretary of Agriculture of the 
benefits of frequent, effective utilization of 7. U.S.C. 1983c when 
presented with a petition by a farm group showing that an area, or 
group of farmers are defaulting on loans on a consistent and increasing 
rate with a similar pattern or practice of lending or loan servicing. 
Under 7 U.S.C. 1983c, a petition from a farm group requires the 
Secretary to create a farmer Loan Pilot Project designed to prevent and 
restructure loans in the area of concern. FSA direct and private 
guaranteed lending in the contract poultry industry presents a good 
example of consistent farm lending irregularities. For example, in the 
years 2004-2007, approximately, we worked with Hmong organizations and 
producers, holding focus groups and other reviews of the difficulties 
faced by Hmong farmers who had relocated to northwest Arkansas near 
Fayetteville, to purchase poultry operations. We reviewed practices and 
called these to the attention of the Secretary of Agriculture. Many of 
the families included parents who entered the U.S. as refugees, and 
children who had worked in fields such as engineering. A group 
primarily from Wisconsin began to move to northwest Arkansas at the 
recommendation of respected people, who had served in public positions 
within USDA and elsewhere. They had some resources, and it appears the 
local real estate industry worked in cooperation with the banks to 
secure guaranteed loans to buy out poultry operations that were not 
economically viable for their former owners. The producers showed us 
that in many cases identical or nearly identical farm and home plans 
were submitted to the banks for approval, and farmers were told they 
could secure certain conservation benefits used by previous owners. The 
prices of the farms rose as more producers moved in, and in most cases 
the families were not aware of the additional costs they must incur 
before the integrators would allow them to enter production. The loans 
provided were proving highly risky, and many of the new producers lost 
their operations. The ``solution'' recommended at the national level 
after Rural Coalition and many other groups called for action, was to 
pressure the Natural Resources and Conservation Service to engage 
trainers from groups who worked as farm advocates to teach producers 
how to better meet the requirements of the poultry integrators. The GAO 
should review the loan portfolios in that region over the past 15 years 
to examine lending practices. Producers told us that the bankers, the 
real estate agents, and many others benefited. The producers are left 
with debts most likely still held by the Farm Service Agency.
    Minority and socially disadvantaged farmers and ranchers are often 
subjected to lending irregularities deemed ``nonbusiness credit risk'' 
loan terms and conditions. The following terms and conditions are 
deemed ``non business credit risk'' terms and conditions: (i) lender 
loan servicing mandate to sell borrowers existing income producing 
collateral and use the sales proceeds to buy new replacement collateral 
from a single tractor equipment source identified by the lender; (ii) 
farmer requirement to purchase a piece of farm harvesting equipment and 
immediately lease the equipment to a third party business; and (iii) 
consideration of the past bad debt of a parent or other family member. 
The outgrowth of these and related lending irregularities fosters 
barriers to meaningful access to farm credit for minority farmers.
VI. Effective Complaints Processing and Settlement
    We further note that the Farm Credit System lacks a specific system 
or methodology to act on civil rights complaints consistent with ECOA 
and related requirements and that one needs to be developed and 
implemented in order to assure fair implementation of guaranteed 
programs.
    We have attached correspondence * that we conducted with the Farm 
Credit Administration on behalf of a young African American producer in 
South Carolina, and correspondence between he and FCA in 2014. We also 
have correspondence and many documents on the case of a Hmong woman who 
had an operation in Missouri with her husband, and how she lost her 
operation after he passed away. In these cases and many others, 
producers come to us at a point when it is very difficult to save their 
operations.
---------------------------------------------------------------------------
    * Editor's note: this attachment did not include any attached 
correspondence. It has been reproduced herein as submitted.
---------------------------------------------------------------------------
    What is similar in all the cases we have mentioned is that there is 
substantial confusion not only for the guaranteed loan borrowers we 
have encountered, but also on the part of advocates, on how to secure 
the rights provided these borrowers under the Equal Credit Opportunity 
Act. The Farm Credit Administration has not included equal credit 
opportunity under the protected rights it lists on its website, and to 
file a discrimination complaint, producers are told to write to the FCA 
Office of Congressional Relations and Public Affairs. The questions 
asked and responses provided indicate there is no formal process to 
investigate claims under ECOA. There do not appear to be any statements 
or other information to tell farmers how to secure their rights. We 
urge you to review these attachments. The GAO study should examine what 
system FCA and the banks that make guaranteed farm loans should have 
and how producers should be informed of and assured their rights. Thus, 
producers who encounter unfair treatment lose valuable time trying to 
figure out the avenues of protection they do have. The GAO should 
consider what measures are necessary to correct these deficiencies and 
assure guaranteed lenders abide by ECOA in loan making and loan 
servicing.
    The study methodology should also take a look at the specific 
minority farmer lending practices within certain crops or industries 
such as poultry in Arkansas, North Carolina and elsewhere, vegetable 
crops in South Carolina and sugar cane crops in Louisiana. The study 
will be much more valuable if it examines the lending practices in 
these industries as related to African American, Hispanic, Hmong and 
other Asian Pacific American, and Native Americans borrowers. A 
specific portion of the inquiry should address how the details of loan 
transactions may have caused or contributed to the exodus of minority 
and socially disadvantaged farmers from specific farm industries in 
specific areas, and who benefited and who lost in these areas.
VII. The Need for a System of Compliance Monitoring
    Our Coalition has worked on the issue of compliance monitoring in 
direct lending and on the issue of equitable access to all Federal 
programs for farmers and ranchers for many years. In particular, we 
have worked to assure the data is available to understand patterns and 
barriers that interfere with the assurance of equitable access and 
opportunities. Since 1987, we have worked to secure authority for the 
collection and analysis of program participation data by race, gender 
and ethnicity at the national, state and county levels. The Agriculture 
Credit Act in 1987 required the calculation of target participation 
rates for lending to the county level for direct and guaranteed loans. 
Farm Service Agency and its predecessor, the Farmers Home 
Administration, has done so for years. These data are available to 
guaranteed lenders and the Farm Credit System. Over the years, in each 
farm bill we have added other authorities for data and documentation. 
Following the 2012 Census of Agriculture, we urged the National 
Agriculture Statistics Service to provide data to the county level on 
the demographics, economics and crop produced by race, gender and 
ethnicity. They complied, and this data is now available at https://
www.nass.usda.gov/Publications/AgCensus/2012/Online_Resources/
Race,_Ethnic
ity_and_Gender_Profiles/index.php.
    We have seen no evidence that the Farm Credit System and other 
guaranteed lenders have any system to evaluate their lending to 
minority producers as compared to other producers, or that they collect 
the data they would need to proactively monitor their compliance with 
ECOA.
    In 2011, Farm Credit Administration released for public comment a 
Proposed Operating and Strategic Planning Rule, 76 Fed. Reg. 101 (May 
25, 2011). Its recommendations were based on marketing practices 
related to addressing ``diversity'' in the marketing practices of the 
Farm Credit System Institutions, while avoiding the more central issue 
of compliance with ECOA. The following is an excerpt from our comments:

          The Rural Coalition, and other undersigned partners and 
        allies, submitted detailed recommendations with respect to the 
        proposed rule, which we share with you now as they are 
        pertinent to the current report and merit re-examination for 
        the outcomes achieved following the issuance of this rule:

          The Final Rule Should Require the Federal Credit System 
        Institutions to Engage Historically Underserved Farmers and 
        Community-Based Organizations that Serve Socially Disadvantaged 
        and Limited Resource Farmers in the Development of Their 
        Marketing Plans.

          According to Section 618.8440(b)(8), the marketing plans of 
        Farm Credit System institutions would have to include, at a 
        minimum, a description of the institution's chartered territory 
        by geographic region, types of agriculture practiced and market 
        segment and the strategies and the actions to ensure the 
        institution's products and services are equally accessible by 
        all farmers, with an emphasis on outreach to historically 
        underserved farming communities. Furthermore, the proposed rule 
        advises institutions to use an array of demographic 
        information, down to the county level, to identify the 
        characteristics and market segmentation of its territory (i.e., 
        Websites of the Census of Agriculture, the U.S. Census Bureau, 
        and the United States Department of Agriculture's Economic 
        Research Service).
          In addition to these sources, the Farm Credit System 
        institutions should also engage their state National 
        Agricultural Statistics Service (NASS) Directors to generate 
        data specific queries in order to obtain a deeper understanding 
        of the farmers that the institutions are mandated to serve.
          Additionally, institutions should also specifically work with 
        the USDA to obtain the annual application and participation 
        rate data mandated in Section 14006 of the 2008 Farm Bill, 
        including numbers and percentages, for each county or parish 
        and state in the United States, organized by race, gender and 
        ethnicity, from USDA's Farm Service Agency and Rural 
        Development programs. The Farm Credit should also look at this 
        authority and other more recent authorities to generate their 
        own data on participation in their programs.
          Section 618.8440(b)(8), also advises that the ``marketing 
        plans of institutions include grassroots outreach activities 
        and education efforts that market to underserved populations 
        regarding business and financial planning and leadership and 
        loan programs for persons who are creditworthy and eligible to 
        borrow.'' Although outreach to underserved farming communities 
        is an essential component of an institution's marketing plan, 
        the unique perspective and reality of the underserved farmer 
        should be incorporated in the developmental process of the 
        institution's marketing plan. Accordingly, the final rule 
        should require institutions to include historically underserved 
        farmers and community-based farming organizations that serve 
        socially disadvantaged and limited resource farmers in the 
        developmental process of the institutions' marketing plans.
          In preparing our Coalition's comments to this proposed rule, 
        we spoke to several members about the Farm Credit System and 
        there exists a universal perception that the Farm Credit System 
        institutions are not accessible to the underserved farmer and 
        have failed to conduct outreach to these communities to educate 
        them regarding the institutions' programs and services. In the 
        words of a long-time Latino farmer and advocate, ``the Federal 
        Credit System is further beyond the reach of the farmer than a 
        commercial bank, we never felt this was a source of 
        assistance.''
          Moreover, institutions should work to develop meaningful 
        relationships with the USDA Minority Farms Advisory Committee 
        authorized in the 2008 Farm Bill and now established, 
        community-based organizations that serve socially disadvantaged 
        and limited resource farmers, 1890 and 1994 Land-Grant Colleges 
        and Universities, and grantees under the 2501 Outreach and 
        Technical Assistance Program, as well as identify persons from 
        these committees, institutions and organizations to assist in 
        the development of marketing plans. Furthermore, the Farm 
        Credit System Diversity Workgroup should also identify members 
        from the aforementioned committees, institutions and 
        organizations to assist in the development of its programmatic 
        efforts to reach historically underserved farming communities. 
        The development of such relationships is essential if progress 
        is to be made in expanding credit to this growing market.
          As required by Section 4.19 of the Farm Credit Act, Farm 
        Credit System associations and institutions should continue to 
        tailor credit programs and services to address the needs of 
        Young, Beginning, and Small farmers and ranchers. Although 
        these programs do not have the explicit objective of advancing 
        customer diversity and inclusion, these programs should be used 
        as essential outreach portals to socially disadvantaged farmers 
        and ranchers. As mentioned in a previous section of these 
        comments, the current participation rate data of the USDA 
        Beginning Farmers and Ranchers Program serves as a cautionary 
        illustration of how well-intentioned programs can neglect the 
        needs of historically underserved farming communities, 
        especially if these communities are not included throughout the 
        program development process.
          Moreover, the final rule should emphasize the importance of 
        allowing institutions to use discretion in determining whether 
        farmers are creditworthy and eligible to borrow. If the Farm 
        Credit System institutions want to make significant strides in 
        serving historically underserved farming communities, these 
        institutions must recognize that their credit requirements 
        should not be rigidly enforced and should allow for case-by-
        case exceptions (i.e., waiver or lowering of collateral 
        requirements). The language ``creditworthy and eligible to 
        borrow'' should not be interpreted or implemented in such a 
        manner to undermine the spirit of the proposed rule, which is 
        to make the institutions more responsive to the needs to 
        historically underserved farming communities.

          The Final Rule Should Include Revisions to the Proposed 
        Rule's Working Definition of Diversity

          Throughout the proposed rule, diversity is purported to be 
        achieved through the inclusion of all individuals of varying 
        race, ethnicity, sexual orientation, age, disability, social 
        class, religious and ideological beliefs and not through a list 
        of demographic criteria.
          This working definition of diversity is problematic and 
        provides a loophole for institutions to avoid implementing a 
        marketing plan that actually promotes diversity and 
        inclusiveness within the institutions' borrower base. 
        Demographic criteria should be given equal weight in 
        determining whether institutions are in fact providing equal 
        access to credit to all farmers.
          Consequently, an institution's commitment to diversity and 
        inclusion cannot be ascertained by an institution's lofty 
        mission statement (as suggested by the Farm Credit 
        Administration's Request for Comments) rather by the 
        institution's actions and achievement of assessment benchmarks. 
        The final rule should include a revised definition of diversity 
        to address these concerns and should also assure that the 
        diversity includes actual borrowers or potential borrowers from 
        the socially disadvantaged community who actually understand 
        the issues, the history and the complexity of small rural 
        communities and their racial, ethnic and gender dynamics and 
        history.

          The Final Rule Should Require the Farm Credit System 
        Institutions and Diversity Workgroup to Make Their Final 
        Marketing Plans and Participation Rate Data Public

          The Farm Credit System Diversity Workgroup was established in 
        2006 to increase diversity awareness, promote understanding of 
        inclusiveness, and serve as a diversity resource within the 
        Farm Credit System. Since its inception, the Diversity 
        Workgroup is purported to have sponsored a diversity 
        conference, several trainings workshops, speakers, outreach and 
        communications. Despite the laudable efforts of the Diversity 
        Workgroup, the effectiveness of the Workgroup's efforts to 
        achieve a more inclusive workforce and borrower base must be 
        evaluated through various assessment and accountability 
        benchmarks. For example, some pertinent questions that must be 
        addressed by the Diversity Workgroup [and at the current time 
        by the Farm Credit System and lenders in General]:

      (1)  How many farmers from historically underserved farming 
            communities 
                have applied for and received loans from Farm Credit 
            System institutions;

      (2)  Are the institutions' borrower base reflective of the market 
            segmentation 
                of their chartered territories? If not, what specific 
            steps has the Workgroup 
                recommended to the institutions to ensure they adhere 
            to their mandate 
                of providing equal access to credit to all farmers.

          The final rule should require the Farm Credit System 
        institutions and Diversity Workgroup to make their marketing 
        plans as well as their assessment and accountability findings 
        public. Moreover, if there are egregious shortcomings in the 
        marketing plans efforts to respond effectively to the needs of 
        historically underserved farming communities, these plans must 
        be revised to address these gaps in services. In essence, the 
        institutions should view their marketing plans as fluid plans 
        that can be amended as necessary to be more responsive to the 
        institutions' diverse borrower base.
          . . . Farm Credit System institutions should take affirmative 
        steps to ensure that data systems are in place to record the 
        important demographic and participation rate data of all 
        borrowers to allow comparisons and track progress.

          The Final Rule Should Require Farm Credit System Banks and 
        Associations Board of Directors to Appoint Directors From 
        Historically Underserved Farming Communities or Community Based 
        Organizations that Serve Socially Disadvantaged and Limited 
        Resource Farmers

          Reiterating Farm Credit Administration Bookletter BL-009, the 
        proposed rule encourages all Farm Credit System Institutions' 
        Board of Directors to appoint directors to serve on the Board 
        that would further the aim of facilitating diversity, when 
        feasible. Again, the discretionary language of the proposed 
        rule (i.e., ``encourages'') will not bring about transformative 
        change in the corporate culture of the Farm Credit System 
        institutions. In order to bring about substantive change in the 
        corporate culture of these institutions, the final rule should 
        mandate that at least one appointment to the institution's 
        Board of Directors be a member from a historically underserved 
        farming community or a community-based organization that serves 
        socially disadvantaged or limited resource farmers.

    Now in 2019, we further recommend a review of racial, ethnic and 
gender diversity among the directors and staff of the lending 
institutions of the Farm Credit System.
    While some statutes have been updated since our recommendations in 
2011, we see no evidence FCA has changed their systems to comply with 
ECOA and to assure fair service to all borrowers and potential 
borrowers. The GAO report should address these fundamental issues of 
the ability of the Farm Credit System and guaranteed lenders to assure 
fair service to all producers, as ECOA requires them to do.
VIII. Conclusion
    The results and findings of a comprehensive study could assist 
lender and government agencies with the legal mandate to offer the same 
loan products and loan servicing options offered to each and every 
farmer regardless of social status. The success of highlighting 
irregular farm lending patterns, and lack of systems to address these 
patterns, will be instructive to all farmers, lenders and reduce the 
overall costs of farm lending transactions while preventing 
questionable or unlawful family farm foreclosures.
                                 ______
                                 
                          Submitted Questions
Response from Nathan S. Kauffman, Ph.D., Assistant Vice President, 
        Economist, and Omaha Branch Executive, Federal Reserve Bank of 
        Kansas City, Omaha Branch
Questions Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question 1. How can Congress reduce barriers for underrepresented 
farmers--for young, BIPOC, minorities farmers. I'm from the state of 
Connecticut. Not all of our farms are on large land. We have fish 
farmers, we have small urban farmers, and some really creative things 
going on in the state that have not been accounted for in this 
industry. How can Congress help these unique, nontraditional 
operations?
    Answer. Agricultural production in the United States includes a 
diverse representation of industries and farmers, many of which have 
differing goals, needs, and business models. The structure of large 
operations specializing in the production of standardized commodities, 
for example, may differ from the structure of smaller or non-
commoditized operations. Likewise, the needs of producers with varying 
backgrounds and experiences, including underrepresented farmers, may be 
unique relative to others in the industry. These differing structures 
and backgrounds can give rise to alternative perceptions of risk and, 
accordingly, the availability of credit. Understanding the differences 
across producers and operations, and how these differences may affect 
the availability and terms of credit support, may be a useful 
consideration for future policy.

    Question 2. Your testimony pointed out that land prices are rising 
in the Kansas City Fed Region. Would increasing the cap on FSA loans 
adequately address rising land costs? Should Congress look at adjusting 
regional equity in the upcoming farm bill to address the uneven cost of 
land in the United States?
    Answer. In recent years, farmland valuations in the Kansas City Fed 
region, and throughout the country, have increased significantly. In 
general, these increases have occurred alongside a sharp rise in 
agricultural commodity prices and gains in farm income. Regionally, 
farmland valuations also differ dramatically based on the returns 
generated by the land. The increases in incomes and wealth in recent 
years have placed borrowers in a strong financial position to make 
further investments in their operations, including the acquisition of 
land. Some borrowers, however, including young and beginning farmers, 
may not have sufficient resources to acquire farmland through 
traditional financing mechanisms, particularly in regions with highly 
productive farmland. Should Congress seek to address potential barriers 
to farmland ownership, particularly for segments of agricultural 
producers who may have fewer resources to acquire farmland, considering 
the limits on FSA loans may be a potential option. However, it may be 
important to consider other options that also facilitate entry into 
farming that do not require the purchase of farmland.
Response from Dania C. Davy, J.D., Board Representative, Socially 
        Disadvantaged Farmers and Ranchers Policy Research Center, 
        Alcorn State University; Director of Land Retention and 
        Advocacy, Federation of Southern Cooperatives/Land Assistance 
        Fund
Question Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question. How can Congress reduce barriers for underrepresented 
farmers--for young, BIPOC, minorities farmers. I'm from the state of 
Connecticut. Not all of our farms are on large land. We have fish 
farmers, we have small urban farmers, and some really creative things 
going on in the state that have not been accounted for in this 
industry. How can Congress help these unique, nontraditional 
operations?
    Answer. Black and other historically discriminated against and 
institutionally underrepresented producers (``HDAIU''), young 
producers, and diversified production operations have been consistently 
excluded from Federal farm policies which only further perpetuate the 
barriers these producers encounter in securing access to credit and 
markets and achieving competitive scale. To create policies that more 
adequately meet the needs of Black and HDAIU producers, Congress must 
continuously seek to better understand the challenges they face while 
simultaneously employing methods that improve the viability of their 
operations. With the increasing average age of producers, growing 
concerns about the climate, and increasing costs of growing and buying 
food, Black and HDAIU producers will continue to be critical first 
responders to the demands of their communities and the environment.
    To eliminate barriers experienced by Black and other HDAIU 
producers, Congress should improve the recognition of cooperatives in 
strengthening these operations' competitive market access, support the 
development of financial institutions owned and controlled by these 
groups, invest in HDAIU producer-centered research, and support the 
training and employment of a new generation of HDAIU technical 
assistance providers.
Cooperative Recognition
    Cooperatives continue to be a critical business model for Black and 
other HDAIU producers because they are uniquely designed to address 
numerous challenges these groups face in terms of size, infrastructure, 
and access to production resources. Unfortunately, many USDA agencies 
still do not fully appreciate the role of cooperatives in agribusiness 
success for Black and HDAIU producers. Congress should improve the 
recognition of cooperative farm, fish, and forest businesses in all 
government programs to help Black and other HDAIU producers 
democratically own and control infrastructure, secure inputs, and 
access markets necessary for competitiveness in their respective 
industries.
    Similarly, institutionalizing and investing in Black and other 
HDAIU producers' cooperatively owned financial institutions, comparable 
to the Farm Credit system, would dramatically increase credit access 
for these groups and drive competition in the agricultural lending 
industry which has historically proven ineffective at meeting the needs 
of Black and other HDAIU producers. Black and other HDAIU producers 
need control over the lending practices reflecting their unique 
histories, business needs, and diversified operations to increase the 
overall credit access and best lending practices to these groups.
HDAIU Producer-Centered Research
    Black and other HDAIU producers have been the subjects of many 
research projects; however, these producers have not always been 
involved in the design of these research projects or the implementation 
of the recommendations emerging from this research. This is, in part, 
why the Socially Disadvantaged [Farmer] & Rancher Policy Center 
(``Policy Center'') was established at Alcorn State University. The 
Policy Center has prioritized critical research needed to support HDAIU 
groups' access to credit--the bedrock of strong businesses. Congress 
should continue to support the Policy Center in these efforts by 
supporting funding for HDAIU producer-centered research. Further, 
Congress should strengthen its support for the implementation and 
institutionalization of the resulting research recommendations by 
supporting HBCUs, 1890 Land-Grant Universities and Community-Based 
Organizations with long-standing relationships with Black and other 
HDAIU producers to continuously improve outreach and education on best 
agricultural practices to help these producers make effective business 
decisions.
Increasing Black and HDAIU Technical Service Providers
    A byproduct of investing in HBCUs, 1890 Land-Grant Universities and 
Community-Based Organizations to conduct research on the needs and 
successes of these Black and HDAIU producers will be the increase of 
well-trained, technical service providers that reflect the communities 
that are being researched and served by this research. Investments in 
the training of Black and HDAIU technical service providers will also 
help reverse the trend of out-migration from farming, fishing and 
forestry communities by creating additional professional pathways to 
support the overall economic stability and success of Black and HDAIU 
producers and their communities.
Question Submitted by Hon. Salud O. Carbajal, a Representative in 
        Congress from California
    Question 1. Ms. Davy, It sounds like there is a history of some 
local Farm Service Agency offices abusing their powers.
    There is clearly reason for farmers and ranchers, particularly 
those who are of color, newcomers to the industry, or underserved to 
distrust these offices.
    How can Congress help build credibility and trust in USDA programs 
designed to benefit Young, Beginning, and Underserved farmer and 
ranchers?
    Answer. Congress can support the credibility and trust in USDA 
programs designed to benefit Young, Beginning, and Underserved 
Producers by ensuring adequate resources and requiring processes that 
highlight accountability, tracking critical data, and supporting 
partnerships with community-based organizations and HBCU institutions.
Accountability Breeds Trust
    Without acknowledging or creating a robust accountability process, 
distrust towards the Agency will likely persist. Identifying 
shortcomings in the Agency's Civil Rights Administrative processes, 
creating meaningful accountability practices, and implementing these 
accountability mechanisms are a necessary step in restoring public 
trust in the Agency.
    Accountability does not necessarily mean termination or loss of 
government employment benefits, although that should not be eliminated 
from available options for illegal behavior; instead, accountability 
might require institutional changes. For example, if numerous Civil 
Rights complaints are filed against a particular FSA office or agent, 
accountability could look like increased Civil Rights oversight from 
the Federal Agency for a period of 6 months to 1 year. This increased 
oversight could help the Federal Agency identify ongoing agent/leader 
development training needs and implementing a meaningful action plan 
for improving an office or agent's practices.
Comprehensive Data on Farm Service Agency Practices is Critical
    Better tracking of local FSA agent practices is critical for 
improving the access Young, Beginning and Underserved Producers have to 
USDA programs and loans. While FSA offices are required to provide 
every producer a receipt for service for any encounter with the office, 
this system has not rooted out problematic behaviors that continue to 
be reported against local FSA offices and agents.
    One solution is to develop ``Customer Satisfaction Surveys'' to 
accompany each encounter between a producer and their local FSA office. 
These Customer Satisfaction Surveys should capture, at minimum, the 
date, time, and location of the encounter; name, race, and gender 
identity of the FSA agent; name, race and gender identity of the 
prospective applicant; the loan/program the prospective applicant was 
seeking; the forms or documents they received; a rating the quality of 
assistance the prospective borrower received; any decision that was 
made by FSA on the application; if the producer withdrew their 
application, an explanation for their withdrawal; the length of time 
from initial encounter with FSA to receipt of loan/program approval/
denial decision; and the length of time from loan/program approval to 
receipt of the funds/program benefits. These criteria would help 
identify the FSA Agents and offices that are employing the best 
practices in serving Black and other HDAIU producers and those that are 
not. This data will help identify trends in racial inequities and 
critical interventions at the local level that can improve services to 
Black and HDAIU producers and their communities.
CBO/HBCU Partnerships
    USDA has announced several recent partnerships and cooperative 
agreements with community-based organizations, HBCUs and other 
institutions who have long-standing relationships with Black and HDAIU 
producers. Leveraging the existing relationships between community-
based organizations and HBCUs can help the Agency identify best 
practices for fostering favorable relationships with Black and HDAIU 
communities, identify shortcomings in Agency policies, and begin to 
support improved services being delivered to these groups.
    Question 2. Would more educational opportunities and resources on 
applying for loans through the Farm Service Agency be welcome? If so, 
would this be better received by USDA or nonprofits who work on these 
issues?
    Answer. Improved and Additional Educational Resources on Applying 
for Farm Service Agency Loans Appear Warranted

    Additional and improved educational opportunities and resources on 
applying for Farm Service Agency loans will always be welcome 
especially to the new and beginning farmers, ranchers, forest, and 
heirs' property landowners may not have had any interactions with Farm 
Service Agency (``FSA''). However, it should be noted that many 
producers, Black and other historically discriminated against, 
institutionally underrepresented producers (``HDAIU'') continue to 
report discrimination in the current FSA loan application processes. 
These reported experiences of discrimination persist despite the 
reporting Black and HDAIU producers participating in relevant 
workshops, trainings and technical assistance programs on FSA loan 
applications. Thus, despite increased education on the FSA loan 
application process, the reports of perceived and actual discrimination 
persistently plague the reputation of the FSA loan application and 
servicing that occurs at local offices.
Community-based Organizations, HBCUs and Cooperative Extension Programs 
        Appear Best Positioned to Design and Deliver Educational 
        Programs on Applying for Farm Service Agency Loans
    The community-based organizations, HBCUs, and cooperative extension 
programs that have the longest standing relationships with Black and 
HDAIU communities have consistently shown an ability to overcome many 
of these concerns by providing Black and HDAIU farmers, ranchers, 
forest, and heirs property landowners the necessary technical 
assistance to submit successful farm loan applications. Partnerships 
and cooperative agreements between the Agency and these institutions 
can leverage the strong relationships these institutions have developed 
with these communities that may serve to overcome unpopular reputation 
the Agency has in many Black and HDAIU communities.
Response from Julia Asherman, Owner, Rag & Frass Farms, LLC; on behalf 
        of National Young Farmers Coalition
Question Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question. How can Congress reduce barriers for underrepresented 
farmers--for young, BIPOC, minorities farmers. I'm from the state of 
Connecticut. Not all of our farms are on large land. We have fish 
farmers, we have small urban farmers, and some really creative things 
going on in the state that have not been accounted for in this 
industry. How can Congress help these unique, nontraditional 
operations?
    Answer. Thank you for the question, Representative Hayes. As you 
point out, what a farm might look like can vary tremendously. Building 
and changing food systems that reflect the needs of young farmers is 
going to require many different policy changes as many different levels 
of government. The more policy can be written to be flexible and 
inclusive, and put itself in the shoes of farmers, the better.
    Though the challenges facing young farmers are significant, many 
like me feel incredibly rewarded and fulfilled in growing food for our 
communities and stewarding natural resources. I'm a member of the 
National Young Farmers Coalition (Young Farmers). Through their latest 
National Young Farmer Survey report, Building a Future with Farmers 
2022,\1\ * they found that by and far, the majority of young farmers 
named that one of their farm's primary purposes for existing is 
stewarding and regenerating natural resources. In the report, Young 
Farmers names many policy proposals that center BIPOC farmers and would 
help uplift the next generation of producers as a whole. These policies 
are where you should look to for guidance.
---------------------------------------------------------------------------
    \1\ https://www.youngfarmers.org/22survey/.
    * Editor's note: the report is retained in Committee file.
---------------------------------------------------------------------------
    Reducing barriers for farmers like me could look like many things:

   Free farming education and more targeted and applicable 
        technical support (including business, financial, and legal 
        support for farmers).

   Investing in the tools and technology we will need in the 
        future, including smaller and more sustainable mechanization 
        (for example more sustainable tillage equipment found commonly 
        in Europe and the amazing specialized tools found in Japan--
        nearly impossible to find in the USA).

   Safety net programs especially tailored for us, not 
        excluding us.

   Helping our farms be more efficient.

   Helping us upgrade more food-safe infrastructure.

   Supporting markets of all sizes.

   Rewarding us for good stewardship of our land or combating 
        climate change.

   Creating protections for farms when we can't find or afford 
        the labor it takes to farm, similar to how there are crop 
        subsidies to protect farms from failing when the price is low.

   Investing in research, farmer round tables and think-tanks 
        specifically to assess what farmers that are left out need.

   Investing in programs that help make land affordable, and 
        that incentivize keeping farmland for farming.

    It is also worth considering what `success' in farming might look 
like. More and more I see farmers (especially full-time farmers without 
off-farm income) define this in the most basic terms: a good life with 
basic needs met (education, healthcare, family time, mental well-being, 
ability to `weather the storm', etc.). This tells me that farmers face 
much deeper needs than just growing and selling; it is a question of 
weighing the personal sacrifice. Since it takes decades to build a farm 
and nearly the same to learn the skills, it is a pretty huge commitment 
to even get decent at farming. Reducing barriers could simply mean 
using policy to create a culture where farmers are valued, celebrated, 
resourced, supported, and aren't being forced to choose between farming 
and our basic quality of life. It is very telling that a huge majority 
of American farmers rely on off-farm income or a spouse's health 
benefits to get by. What if policy helped create a safety net for the 
farmers themselves, not just for the crop or the price?
    I am not a BIPOC farmer, so I don't speak as a person of color, but 
my personal belief is that institutional racism (specifically the 
history of slavery and colonialism) is so completely linked to land and 
agriculture in this country that I do not see that any single policy 
will fix such deep and longstanding institutional inequity. I fully 
support programs that aim to specifically support BIPOC farmers, and 
alongside these policies at some point there needs to be larger 
accountability for hundreds of years of oppression and 
disenfranchisement in pursuit of the nation we have today.
    Wealth (especially land) is often inherited and passed generation 
to the next, and there has been an obvious ripple effect of inequity 
through the generations of black and indigenous people reaching back to 
before the founding of the country. To repair this legacy within 
agriculture, the policy must also reach deep into the nooks and 
crannies of all the issues that touch farming and land ownership: land 
access, property ownership, rural access, credit, food insecurity, 
health, education, wealth distribution, incarceration, and violence. 
Perhaps this is naive, but I would like to see reparations, or what I 
would consider basic `Federal accountability,' as a bipartisan American 
concept.
    There are two specific areas where I would like to provide more 
detail in my recommendations for how the government could help small-
scale, diversified farmers like me--designing FSA programs with us in 
mind; and improving relationships between farmers and their FSA 
offices.
Design FSA programs with small, complex farms in mind
    A `small' farm may gross $75,000+/acre on less than 10 acres and 
employ a bunch of local people, or a `large' farm could gross <$2,000/
acre on 500 acres, and employ no one (other than the farmer). Both 
could be profitable, or neither could be. One may be `small' and the 
other `large' but they can both have a significant impact on the local 
economy or supply chain. They are both critical and deserving of 
support. Size alone does not describe what is at stake.
    Often the smallest farms can be the most complex on paper, growing 
many different crops in a small area. Small can mean double and triple 
cropping systems, season extension, and complex rotations. This can 
make the farm plan especially tricky to translate to FSA program rules 
and software.
    One way that the government could help smaller farmers access 
programs, and help loan officer's ability to assist and deliver in a 
timely way, is to find a way to make the `translation' into FSA 
application software more applicable for small scale farms (by being 
able to group crops, adjust units from acres to row feet or square 
feet, etc.).
Improve relationships between farmers and their FSA offices
    The relationship between a farmer and their local USDA office is 
extremely important to navigating programs, or even knowing about them. 
Yet, large-scale farmers and farming models, primarily operated by 
white farmers, have been more heavily supported by USDA than others. 
This can help shed light on why young, BIPOC, and small-scale farmers 
are systematically left out, and more in need of support than ever.
    Farmers who are relying on crop insurance and subsidies are 
navigating those processes through close contact and reporting to local 
branch officers. Most smaller and diversified farmers, however, have 
zero crop insurance and get no subsidies or `deficiency payments' if 
the market fluctuates or yield is low (I am only this week learning I 
could be eligible for NAP insurance, and overall I consider myself 
fairly up to speed on USDA programs). These farmers who are outside the 
crop insurance/subsidy system are not reporting to FSA/USDA, and are 
not necessarily on the radar of a local USDA office, let alone forming 
a relationship with them. USDA, without having reason to interface, 
track, and understand these operations, can become very unaware of the 
extent to which these farms exist and have unmet needs.
    This not only means those farmers are operating with unmitigated 
risk, but any current or future program in which eligibility relies on 
producing commodity crops or showing crop insurance damages (most 
natural disaster relief, first round of pandemic relief) often excludes 
smaller, diversified, niche, and direct market producers outright, even 
if we are suffering losses too.
Conclusion
    To answer your question fundamentally, Representative Hayes, all 
farmers (but especially underrepresented farmers) need you, our 
government, to invest in us and our success. As you named, young 
farmers are out here innovating around, over, and under the challenges 
in front of them. It is critical that this next farm bill makes a 
historic investment in land access, market access, and access to 
credit. USDA recently announced $300 million in funding, with a broad 
eligibility framework, to support projects that will improve access to 
land, credit, and markets. We need more of this type of creative and 
flexible investment, to resource the people on the ground doing the 
hard work of trying to solve these challenges with the limited 
resources we have at hand. We need a farm bill that clearly sees and 
addresses these issues--most importantly land access.
Question Submitted by Hon. Salud O. Carbajal, a Representative in 
        Congress from California
    Question. Ms. Asherman, It was great to hear your story. I admire 
your determination in continuing to work towards building up your own 
farm despite obstacles and setbacks.
    What you said about student loans really stuck out to me. Beginning 
farmers are not alone in the burden of student debt but we should not 
allow this burden to restrict opportunities for farmers.
    Would some sort of program similar to Public Service Loan 
Forgiveness that forgives the student debt of farmers be beneficial to 
attracting more young people to this profession?
    Answer. Thank you for the question, Representative Carbajal, and 
for further consideration of this issue. I couldn't agree more with 
you, with one exception--I believe we are very much contributing to the 
nation's food supply. One of the effects of this pandemic is that the 
fragilities in our food and farming systems have been laid bare, 
exposing the critical need for more local and regional food sheds that 
are thriving and contributing to the health of served communities.
    But yes, to your specific question, a program of Federal debt 
forgiveness for farmers would be extremely beneficial, both for 
existing farmers who are struggling with student debt, and for future 
farmers who would see student debt as a barrier and not pursue 
agriculture as a result. There is a powerful incentive in debt 
forgiveness, this could certainly help illuminate the path towards 
farming for some, while signaling an increasing acknowledgement of 
farmers that is powerful.
    I believe that farming is a public service, as we are contributing 
to the public good by providing healthy, fresh, high-quality food and 
stewarding natural resources. I know that there are efforts to add 
farmers to PSLF, as well as to address the functional problems with 
this program. I support these legislative efforts. At the same time, I 
believe that we should do much more, and eliminate Federal and 
commercial student debt for all current borrowers.
    We also need more ways for young farmers to develop their knowledge 
and skills. We need more creative agricultural workforce development 
support from USDA, DOL, and from the states. Above all, I would 
recommend that any such program for farmers be re-imagined to be more 
tailored to farmers' needs and circumstances.
    For example, farmers are generally not government workers or 
employees of a nonprofit. We are often self-employed or in 
partnerships, and are often working regular `for profit' businesses. 
Some farmers work on `family farms' but are not always W2 employees. 
Farmers are notoriously independent and will likely want to maintain 
this freedom to work for oneself, so a policy to include farmers in 
Federal student debt forgiveness will need to accommodate this to be 
successful.
    In farming terms, 10 years to wait for debt forgiveness is an 
extremely long time. Many new farmers would have a difficult time 
starting farms let alone getting them to 10 years while making school 
debt payments. Those first few years of farming are when money is the 
tightest, capitalization is most intense, and the operation is 
extremely fragile. A 10 year waiting period would seem to defeat the 
purpose of supporting new and beginning farmers.
    I have heard that there are programs to relieve rural veterinarians 
of school debt, to encourage more people in this industry to practice 
in rural communities. I imagine this same concept could be extended to 
doctors and farmers both to aid in rural development and quality of 
life, and to incentivize people to choose to work where work needs to 
be done. Debt forgiveness programs for farmers can have the double 
benefit of alleviating a common barrier to entry (and success) and 
encouraging people to consider the career path over others.
Response from Hon. Adam Brown, Owner, B&B Farms; on behalf of Illinois 
        Farm Bureau
Question Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question. How can Congress reduce barriers for underrepresented 
farmers--for young, BIPOC, minorities farmers. I'm from the state of 
Connecticut. Not all of our farms are on large land. We have fish 
farmers, we have small urban farmers, and some really creative things 
going on in the state that have not been accounted for in this 
industry. How can Congress help these unique, nontraditional 
operations?
    Answer. August 31, 2022

    Honorable Congresswoman Hayes,

    I truly appreciate your interest pertaining to the barriers to 
entry for young, beginning, and small (YBS) farmers. Please find 
attached the complete set of recommendations from the USDA's Advisory 
Committee on Beginning Farmers and Ranchers (ACBFR) to Secretary 
Vilsack. I've enjoyed the pleasure of serving on this committee over 
the past few years and had the privilege to chair the Transition 
Working Group in crafting these suggestions. Particularly applicable to 
your question may be the section addressing the definition of a YBS 
being revised (Page 1) and the designation of the State Beginning 
Farmer and Rancher Coordinator as a full-time employee (Page 2). After 
building out these two administrative foundations at USDA, the 
remainder of the ACBFR's recommendations can be pursued. Some of these 
can be addressed administratively at the USDA, but others will entail 
Congressional action. Please know that I would be thrilled to continue 
to walk with you as we pave a more sustainable path for all YBS 
farmers. Feel free to contact me for any clarification or assistance. 
Thank you again for helping tomorrow's ag producers.
            All my best,

Adam.
                               attachment
Goal 1. Increase USDA's Ability to Effectively Service and Support the 
        Beginning Farmers and Ranchers.
1. Recommendations
    Designate Beginning Farmers and Ranchers as a top USDA priority. As 
the critically important next generation of agriculture, Beginning 
Farmers and Ranchers (BFR) face unprecedented challenges and 
unparalleled opportunities. It is imperative that BFRs have a strong 
network of resources and support available to them to ensure their 
success. USDA should establish clear Department-wide priorities, divert 
resources, and establish specific initiatives to guarantee the success 
of the next generation of farmers. We urge the USDA to designate BFRs 
as a national priority across the Department and deliver a clear 
message not only to the next generation of farmers and, ranchers, but 
also USDA staff, policymakers and stakeholders that supporting BFRs is 
a central part of their work. Identifying an action plan and 
establishing clear metrics for monitoring to ensure BFRs are fully 
accessing USDA programs is critical. It is also equally important to 
embed this work within the USDA's priorities focusing on advancing 
racial equity and addressing climate change, and we urge the Department 
to explicitly include BFRs in these other key priorities and 
corresponding initiatives.
    Develop a standard definition for a beginning farmer and rancher 
(BFR) that can be applied consistently across USDA programs and 
agencies. As members of the Advisory Committee on Beginning Farmers and 
Ranchers (ACBFR), we come from a wide variety of background and 
experiences. We sincerely appreciate the Departments commitment to 
helping new and beginning farmers and ranchers.
    We recognize and have heard testimony from the various USDA 
agencies regarding the many different programs and opportunities 
available to assist BFRs. However, one of the concerns that we have 
heard is that new and beginning farmers and ranchers are not aware of 
these programs and opportunities and that there are some 
inconsistencies from field office to field office, state to state, or 
agency to agency. It is partially because of these concerns that we are 
proposing the U.S. Department of Agriculture adopt a universal 
definition that can be applied unilaterally across agencies, states, 
and field offices. Ideally the definition is clear and concise enough 
to prevent varying interpretations and simple enough to allow an 
individual or entity to self-certify.
    Our intent is not to eliminate individuals from qualifying for USDA 
programs, grants, or other opportunities, but rather to give them an 
equal benchmark for competition. With that in mind the ACBFR has 
proposed the following definition for a New and Beginning Farmer and 
Rancher.
    Recommended Beginning Farmers and Ranchers definition: A beginning 
farmer or rancher is an individual who is actively engaged in 
management of a farm or ranch for not more than a cumulative of 10 
years since their 18th birthday.
    The term ``actively engaged'' was discussed at length in our 
committee due to its significant impact on limiting potential new and 
beginning farmers and ranchers from being eligible for USDA 
eligibility. For the purpose of this definition, we will defer to the 
current definition as defined by Congress in the 2014 Farm Bill 
(Federal Register 7 CFR Part 1400 RIN 0560-AI31, https://
www.federalregister.gov/documents/2015/12/16/2015-31532/payment-
limitation-and-payment-eligibility-actively-engaged-in-farming).
    While our hope is that the above definition helps to clarify what a 
BFR is, we also acknowledge that a new era of agriculture is emerging 
in the United States and that a one size fits all option may not fit 
our beginning farmer and ranchers. The ACBFR has discussed a variety of 
subcategories and would encourage the Department to develop funding 
opportunities, programs, and grants to target the
    Designate the State Beginning Farmer and Rancher Coordinators as 
full-time positions, provide additional resources to ensure success, 
and establish accountability mechanisms. Section 12304 of the 2018 Farm 
Bill establishes BFR Coordinators both at the national and state level 
to provide outreach and technical assistance to assist BFRs to 
participate in USDA programs. These positions carry a significant 
burden in helping USDA to improve outreach and targeted assistance to 
BFRs. Given the broad scope of these positions as directed in the farm 
bill: coordinating technical assistance; developing a State Plan to 
improve coordination, delivery, and efficacy of USDA programs; 
overseeing implementation of the State Plan; working with USDA outreach 
coordinators to coordinate outreach efforts to BFRs throughout the 
state; and coordinating partnerships and joint outreach efforts with 
other organizations serving BFRs; it would be difficult to effectively 
serve the needs of BFRs by staff designated as collateral duty.
    Additionally, developing a directive on Beginning Farmers and 
Ranchers would guide agencies toward action. The directive should 
establish coordinated policy for BFR outreach initiatives. If 
applicable, require agencies to formalize a working group 
representative and through the working group each agency would identify 
key program performance indicators to be included in a USDA annual 
plan.
    We also recommend that both the National and State Coordinators are 
provided sufficient resources to be successful and the full engagement 
of USDA Leadership to reinforce the importance of the work of these 
coordinators. Coordinators should establish and monitor performance 
metrics in their states, and clear action plans for improving BFR 
participation for under-performing states.
    Continued education and mentoring for Beginning Farmers and 
Ranchers. Currently the Beginning Farmer and Rancher Development 
Program has provided grants to organizations for education and 
mentoring of BFR's. We recommend a look at the programs and how they 
are being utilized to see where continued improvements can be made. We 
recommend a renewed focus of education and mentoring for BFR's in their 
third plus year of farming or ranching. Once BFR's overcome the 
challenges of startup they face the next phase of business growth and 
sustainability. Continued business education, resources and mentorship 
is critical in the development of building businesses that can be 
adaptable to withstand the volatility and unpredictability of 
agricultural markets.
    Continue to Utilize Virtual Tools to Better Serve Beginning Farmers 
and Ranchers. Over the past year, our entire country has faced the 
challenges of doing business in the face of the ongoing COVID-19 
pandemic. USDA has been successful in adapting technology to better 
serve farmers and ranchers in the era of social distancing by allowing 
employees to be available virtually, to offer document signing 
virtually and to communicate program availability across different 
platforms. Throughout the pandemic, USDA program sign ups were easily 
accessible and the use of virtual tools simplified the application 
process.
    We recommend that USDA continue to utilize and further develop 
virtual tools to help BFRs access information and allow for a more 
streamlined, timely and flexible application processes. In the past, 
there has been a stigma that working with USDA is a complicated and 
lengthy process. By utilizing more virtual tools, beginning farmers and 
ranchers can have access to the necessary information at their 
convenience and in a simplified format.
    Additionally, some farmers and ranchers continue to feel 
underserved and uncomfortable working with specific offices or specific 
USDA staff, usually after a negative interaction, or worse, explicit, 
or overt discriminatory treatment. By allowing virtual tools, including 
the ability of farmers to work with USDA staff beyond just their 
designated county office, farmers and ranchers would have access to 
necessary information and it may allow opportunity for a more 
comfortable working relationship. To increase the use of technology 
effectively and efficiently, we recommend continued investment for 
technology improvements on local levels to ensure employees have access 
to the needed technology in the field (laptops, cell-phones, secure 
broadband, etc.).
    Continuous Stakeholder Input. We also recommend that USDA continue 
the use of virtual listening sessions to reach as many BFR as possible 
and to ensure a robust and regular opportunity for stakeholder input 
and feedback into USDA programs and policies. We recommend that each 
State Beginning Farmer Coordinator convene regular listening sessions 
with farmers in their states or regions and that each Coordinator 
establish a state Beginning Farmer Working Group or Advisory Committee, 
comprised of BFRs, to ensure BFR concerns are embedded into state plans 
and USDA activities at the local level.
    Increase Data Collection and Performance Metrics to Monitor 
Beginning Farmer and Rancher Participation. We would like to recommend 
that there be a renewed focus on data analytics and metrics regarding 
the impact of BFRs on U.S. Agriculture and how to better serve BFRs. 
There is much diversity in scale of business, commodities, race and 
socioeconomics status of BFRs. We recommend a continued focus on 
collecting data to better analyze the effectiveness of programs, the 
implementation of new programs, how to better serve the underserved and 
how to improve program reach. We recommend more data reports focused on 
BFRs that can be shared with stakeholders.
    Develop a Comprehensive Digital Strategy for Connecting with 
Beginning Farmers and Ranchers. Currently the website www.farmers.gov 
and www.newfarmers.usda.gov are being utilized with a focus being 
streamlined towards www.farmers.gov. We recommend a focus on website 
analytics and a long-term digital strategy that includes an action plan 
to collaborate with other organizations to link websites and social 
media to better reach BFRs on different platforms.
Goal 2. Reduce Beginning Farmer and Rancher Capital Related Obstacles
2. Recommendations
    Improve the Beginning Farmer and Rancher customer experience as 
follows:

   Create or purchase both an app and online platform to 
        provide the following to applicants and guaranteed lenders:

     A full description of each program offered to BFRs 
            inclusive of a detailed description of all items needed to 
            constitute a complete application for each loan, grant, or 
            cost-share type.

     Allow applicants to submit all required data through 
            the applicable app or platform while also showing any 
            remaining items needed to allow the application to be 
            complete. If there are timetables required for submission 
            based upon the applicant type (direct borrower, standard 
            eligible lender, preferred lender, etc.), please have those 
            timetables displayed within the portal for the customer.

     Ensure the applicant (whether direct borrower or 
            guaranteed lender) is contacted in no more than four (4) 
            business days from the submission of the initial request to 
            ensure all parties are aware of what is needed to satisfy 
            all remaining needed items.

     Establish an estimated timeline to closing that could 
            be communicated to the borrower or guaranteed lender once 
            all required documents are provided. Going forward, monitor 
            and periodically update these estimated timelines based 
            upon all data obtained from actual loan closings.

   Allow all documents to be electronically signed via Docu-
        Sign or other similar software.

   Enable future required financial information to be entered 
        into a portal in the Moody's system utilized by the Farm 
        Service Agency (FSA) to then be uploaded by the applicable FSA 
        employee.

   Enable tax returns and other similar documents to be scanned 
        and uploaded to the FSA portal within the Moody's system.

   It is acknowledged the implementation of the above items 
        would require dedicated funds. It is respectfully requested 
        Congress be asked to allocate the needed monies to enable the 
        improved BFR experience.

   Implement ``Customer Experience Group'' initiatives with 
        farm loan employees nationwide to ensure equitable and quality 
        service and product knowledge are provided to BFRs.

    Encourage a cultural change to minimize the inconsistency of 
program understanding levels within the various FSA offices. Encourage 
the utilization of ``expert'' knowledge as a reference for specific 
crops to allow specialized FSA employees to cover larger areas in 
instances where the local knowledge may be limited for that commodity. 
Promoting collaboration with extension offices and similar local 
expertise can most effectively serve the customer. Additionally, 
timelines from loan application to closing should be used as a metric 
to determine where greater knowledge or efficiency may exist for the 
purpose of improving training.
    Establish procedures to ensure all personnel are trained in both 
current and emerging agricultural loan programs, both direct and 
guaranteed, specifically designed to serve all potential BFR 
applicants. Capture and analyze demographic information from each 
applicant willing to provide information to better understand future 
training opportunities.
    Utilize the implementation of Recommendation 1, Recommendation 2 
and Recommendation 3 only for the Beginning Farmer and Rancher programs 
initially to learn where the strengths and weaknesses may lie. This 
should allow for a more structured future roll-out for all FSA loan 
programs. This could also then be utilized for any non-FSA related 
programs benefitting the BFR group.
    Create a program whereby the student loan debt for farmers could be 
forgiven or restructured. Participants in the BFR program for a minimum 
of five (5) consecutive years could be forgiven or restructured at a 1% 
interest rate with any restructured debt having a 100% government 
guarantee.
Goal 3. Better Facilitate the Transfer of U.S. Ag Land and Operations 
        to BFRs
3. Recommendations
    Increase knowledge, capacity, and capability of FSA staff to 
administer all available programs consistently throughout the country. 
FSA provides a plethora of valuable program offerings and loan products 
to BFRs across the country. However, access to these programs is not 
always consistent between regional offices and states. For example, the 
Land Contract Guarantee Program is inaccessible in California and used 
in other states. USDA needs to ensure that field staff are aware of and 
trained in administration of programmatic offerings, including BFR 
loans which have been made accessible universally across all states and 
regions.
    Allow USDA contract transferability to farms that are changing 
structure or ownership, in which a BFR is party. As NRCS and FSA 
provide valuable conservation programs through EQIP, CSP, and CRP, 
these environmental contracts should be allowed to roll into new BFR 
ownership when the entirety of the controlled land is transferred, for 
instance, when the ownership goes through a structural change (i.e., 
Partnership of a father and son to Sole Proprietorship of the son) or 
the farm's ownership is bought (i.e., a new FEIN number as a father's 
business is sold to his daughter). While the new BFR owner would have 
to opt-in to the contract, two major advantages are present: the land 
would remain enrolled in a USDA conservation program that is 
benefitting the public good, and the new owner would not have to 
standby for the next application period.
    Distribute grants to qualified nonprofits to be used for succession 
planning services and educational programs. As the average age of the 
American farmer/rancher steadily increases, we note the importance of 
assisting BFRs as they delve into production agriculture. We further 
acknowledge that capable, qualified entities exist and are ready to 
support BFRs. Therefore, we recommend that the USDA award succession 
planning grants to these third-party entities, which can consult on 
farmland and operation transfers.
Goal 4. Facilitate the Access of Land by Beginning Farmers and Ranchers
4. Recommendations
    Retain stepped-up basis clause for intergenerational land 
transfers. Maintain the Federal capital gains tax rate at 20% or 
whatever level is broadly applicable across the country for a given 
intergenerational land transfer. Capital gains taxes are based on the 
change in the value of an asset, such as farmland, livestock, or 
timber, when that asset is sold compared to the value when the asset 
was acquired by the current owner. Retain the step-up in basis for 
capital gains tax at death and carryover of basis for intergenerational 
transfers of productive agricultural land. To reduce the capital gains 
tax expense, farmers and ranchers use stepped-up basis, which provides 
a reset for the basis during intergenerational transfers. In effect, 
upon the transfer of assets following a death, the basis is reset to 
the market value at the date of death. Following the adjustment, taxes 
can be levied only on gains realized by the individual during his or 
her ownership, not on gains realized prior to the step-up in basis. 
Given that the asset values in agriculture have appreciated 
significantly in recent years, when farmland is inherited, without a 
step-up in basis, BFRs would face significant capital gains taxes which 
could undermine the financial viability of the BFR inheriting the 
farmland.
    Any change in capital gains tax policy that eliminates, or scales 
back stepped-up basis could result in a massive tax burden on the 
agricultural sector. Any such changes should be carefully evaluated in 
terms of its impact on BFRs and accommodations made to reduce the 
impact of such changes on BFRs.
    Create a mechanism to help BFRs compete with reopened Conservation 
Reserve Program enrollment with higher rental payments. The recent 
reopened 2021 CRP enrollment with modified higher payments will make it 
difficult for BFR to compete with the government for land access. An 
alternative approach would be to use Working Lands Conservation 
Programs with BFR incentives for conservation practices to accomplish 
conservation goals on BFR ground. Another approach could be to provide 
reduced interest rates for loans under BFR loan program for 
implementing conservation practices.
Incentivize Land Access
   Forgive or drastically reduce the capital gains tax if an 
        experienced farmer agrees to sell farmland to a BFR at a 
        discounted market value that would be equal to the capital 
        gains due.

     The goal would be to lower the cost of land for the 
            BFR by offering the experienced farmer seller a break on 
            the capital gains he would normally be required to pay.

     The incentive would be that an experienced farmer 
            would not pay capital gains if they sold to a BFR. 
            Typically, experienced farmers work for decades to get to 
            the point where they can finally afford to sell or find it 
            advantageous to sell, only to see the government take a 
            portion of the land appreciation to a point it is not 
            advantageous, ends up being too costly to sell, or is too 
            costly for BFR to purchase.

     Additional benefit via tax credit or other financial 
            incentives to landowners who seek socially disadvantaged 
            farmers and farmers who belong to communities of color, 
            such as Black and African American, Hispanic and Latino, 
            Native American, Alaska Native and Indigenous, Asian 
            American, Native Hawaiian and Pacific Islander, Middle 
            Eastern, and North African persons as a successor for 
            purchasing the farm.*
---------------------------------------------------------------------------
    * Note--Eligibility for these recommendations would require BFRs 
and landowners to be considered ``actively engaged farmers'' under the 
2018 Farm Bill definition.

   Incentive to landowner to lease to BFR with additional 
        incentives to socially disadvantaged farmers and farmers who 
---------------------------------------------------------------------------
        belong to communities of color.*

     Lease terms would require a minimum 5 year 
            commitment.*

     Potential for subsidized lease executed via landowner 
            who 8would see subsidy to minimize risk associated with 
            leasing to BFR.*

   Create an incentive in the IRS Section 1031 Like-Kind 
        Exchange code for an experienced farmer who sells a farm to a 
        BFR then re-invests the proceeds of a sale into a similar-
        nature property to receive deferred capital gains tax.

     The seller would be granted 2 years, as opposed to 180 
            days in regular sales, to find the next property for which 
            the Like-Kind Exchange would be used.

     This could potentially be budget neutral, depending on 
            the increase in market prices and the loss of the use of 
            the money during the 2 years, given the capital gains would 
            be deferred into the second property but would eventually 
            be paid upon the sale of the second property.

   Utilize and promote current incentives to broaden land 
        access to BFRs from underrepresented communities to build 
        greater diversity in the BFR population.

   Interest rate subsidy for seller financing who sell to BFR 
        with additional incentives available to landowners who sell to 
        a socially disadvantaged farmer or farmer who belongs to a 
        community of color, as a buyer.*

   Land Contract Program is not administered in California.*

   More dedicated funding for nonprofit land-link/farm-link 
        state organizations, similar to state block grant 
        implementation, that are building these connections and 
        incentivizing finance structures that enhance land access. 
        Money dedicated to operation expenses and technical assistance 
        providers.*

   Enhance the role of farmer cooperatives for incentive-based 
        land access models, particularly when it comes to farmer 
        cooperatives' ability to access land programs and eligibility 
        for qualifying programs.*


 
                     A 2022 REVIEW OF THE FARM BILL

         (STAKEHOLDER PERSPECTIVES ON TITLE XI CROP INSURANCE)

                              ----------                              


                        WEDNESDAY, JULY 20, 2022

                  House of Representatives,
         Subcommittee on General Farm Commodities and Risk 
                                                Management,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 9:31 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Cheri Bustos [Chair of the Subcommittee] presiding.
    Members present: Representatives Bustos, Craig, Carbajal, 
O'Halleran, Lawson, Austin Scott of Georgia, Allen, Rouzer, 
Mann, Miller, Thompson (ex officio), and Baird.
    Staff present: Lyron Blum-Evitts, Carlton Bridgeforth, 
Kelcy Schanuman, Joshua Tonsager, Patricia Straughn, Trevor 
White, Erin Wilson, Samuel Rogers, and Dana Sandman.

  OPENING STATEMENT OF HON. CHERI BUSTOS, A REPRESENTATIVE IN 
                     CONGRESS FROM ILLINOIS

    The Chair. This hearing of the Subcommittee on General Farm 
Commodities and Risk Management entitled, A 2022 Review of the 
Farm Bill: Stakeholder Perspectives on Title XI Crop Insurance, 
will come to order.
    Welcome, and thank you for joining today's hearing. After 
brief opening remarks, Members will receive testimony from our 
witnesses today, and then the hearing will be open to 
questions. In consultation with the Ranking Member and pursuant 
to Rule XI(e), I want to make Members of the Subcommittee aware 
that other Members of the full Committee may join us today. We 
also will have a virtual component just so our witnesses know 
that.
    I want to thank all of you for joining us this morning. As 
co-chair of the Congressional Crop Insurance Caucus, I am 
excited to hold this hearing, which continues the Committee's 
work to gather input on how programs in the 2018 Farm Bill have 
been functioning.
    A month ago, we held a hearing with a panel of ag 
economists on farm programs and crop insurance. And at the 
time, many farmers in the Upper Great Plains were still trying 
to finish planting, given the extremely wet conditions. And 
farmers in the Southern Plains have mostly wrapped up winter 
wheat harvest, which is in full force in the Central and Upper 
Plains today. We continue to hear from producers about the 
impacts of high input costs and commodity price volatility in 
recent weeks.
    In addition to the hearings and meetings here in 
Washington, we have also been holding farm bill listening 
sessions out in the field, including ones hosted by 
Representative Tom O'Halleran in Arizona--Ranking Member Scott 
and I went out for that--and also by Congressman Jim Costa in 
California. And there are upcoming field listening sessions; 
one hosted by Congresswoman Kim Schrier in the State of 
Washington. She has one on Friday. And then we have one in 
Minnesota next Monday hosted by Congresswoman Angie Craig.
    The economic and growing conditions that farmers are 
experiencing are ever-changing, and they vary across the 
country. And that is why these sorts of hearings and other 
meetings are important to the work we are doing to understand 
what is happening on the ground for producers. Our attention 
today is specifically on the Federal Crop Insurance Program. 
This hearing will gather input on how risk management 
provisions in the 2018 Farm Bill have been implemented and how 
crop insurance programs have functioned for producers.
    Throughout the last two farm bill reauthorization 
processes, the message I heard loud and clear was, ``Do no harm 
to crop insurance.'' The program has been and continues to be 
central to risk management for producers across the country, 
and it has continued to grow and evolve to address the 
challenges and risks our producers are facing.
    We have a well-rounded panel that will include testimony 
from an approved insurance provider, a crop insurance agent, a 
developer of new products, and two producers with experience 
with the program. I want to thank all of our witnesses here 
today, both in person and virtually, for the testimony you will 
be providing.
    [The prepared statement of Mrs. Bustos follows:]

 Prepared Statement of Hon. Cheri Bustos, a Representative in Congress 
                             from Illinois
    Thank you to our witnesses and my colleagues for joining us this 
morning.
    As a co-chair of the Congressional Crop Insurance Caucus, I am 
excited to hold this hearing, which continues the Committee's work to 
gather input on how programs in the 2018 Farm Bill have been 
functioning.
    A month ago, we held a hearing with a panel of ag economists on 
farm programs and crop insurance, and at the time many farmers in the 
Upper Great Plains were still trying to finish planting given the 
extremely wet conditions.
    And farmers in the Southern Plains have mostly wrapped up winter 
wheat harvest, which is in full force in the Central and Upper Plains 
today.
    We continue to hear from producers about the impacts of high input 
costs and commodity price volatility in recent weeks.
    In addition to hearings and meetings here in D.C., we have also 
been holding farm bill listening sessions out in the field, including 
ones hosted by Representative Tom O'Halleran in Arizona and by 
Congressman Jim Costa in California. And there are upcoming field 
listening sessions hosted by Congresswoman Kim Schrier in Washington on 
Friday and one in Minnesota next Monday hosted by Congresswoman Angie 
Craig.
    The economic and growing conditions farmers are experiencing are 
ever-changing and they vary across the country, and that is why these 
sorts of hearings and other meetings are important to the work we are 
doing to understand what's happening on the ground for producers.
    Our attention today is specifically on the Federal Crop Insurance 
Program. This hearing will gather input on how risk management 
provisions in the 2018 Farm Bill have been implemented and on how the 
crop insurance program has functioned for producers.
    Throughout the last two farm bill reauthorization processes, the 
message I heard loud and clear was to do no harm to crop insurance. The 
program has been and continues to be a central risk management tool for 
producers across the country, and it has continued to grow and evolve 
to address the challenges and risks our producers are facing.
    We have a well-rounded panel that will include testimony from an 
Approved Insurance Provider, a crop insurance agent, a developer of new 
products, and two farmers with experience with the program.
    Thank you to each of our witnesses for the testimony you will be 
providing today.

    The Chair. I would now like to welcome the distinguished 
Ranking Member, the gentleman from Georgia, Mr. Austin Scott, 
for any opening remarks he would like to give.

  OPENING STATEMENT OF HON. AUSTIN SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    Mr. Austin Scott of Georgia. Thank you, Chair Bustos, for 
convening this important hearing to discuss the Federal Crop 
Insurance Program.
    Today, crop insurance stands as the cornerstone of the 
safety net for many of our producers, but the program as we 
know it did not come about overnight. The various forms of 
Federal crop insurance date back to the 1930s. It wasn't until 
1980 when critical reforms were made to create a public-private 
partnership that the foundation was laid for the program we 
have today. By leveraging the private-sector and incentivizing 
competition among companies, producers now have access to a 
dynamic system that provides our farmers with the highest level 
of service. Additional reforms in 1994 and 2000 further 
accelerated the growth of the program and collectively 
increased insurance acreage liability and coverage levels to 
where they are now.
    While crop insurance has been remarkably successful, it is 
not perfect. I hear from producers in the Southeast that higher 
levels of coverage are often too expensive to justify the cost. 
And many fruit and vegetable farmers in my area do not have 
crop insurance policies available to them, leaving them Non-
insured Crop Assistance Program, or NAP, as their only risk 
management option. I believe that in the next farm bill, one of 
the best investments this Committee can make is further 
enhancements to the crop insurance system that provide 
producers affordable options to increase coverage. Multiple 
policies such as Supplemental Coverage Option, Enhanced 
Coverage Option, Stacked Income Protection for upland cotton, 
Hurricane Wind Index, and margin protection are all geared 
toward helping farmers reduce the incredibly high deductible 
for insurance.
    We need to thoroughly examine these policies and determine 
if they are doing an adequate job of filling this gap. If not, 
what tweaks might be needed to provide higher levels of 
affordable coverage? Since 2017, Congress has provided 
additional assistance to producers in the form of ad hoc 
disaster aid. This aid has been a critical lifeline for many 
farmers in my district, particularly after the devastation 
caused by Hurricane Michael in 2018. However, the 
inefficiencies in delivery, the delay in funding and payments, 
and the uncertainty of if or when Congress may act underscores 
the benefits of the importance of having well-functioning 
insurance programs. Crop insurance delivers timely assistance 
in the wake of a disaster and provides a level of protection 
that farmers and their lenders can depend on.
    It is important to note that approximately 90 percent of 
the country's food supply comes from 12 percent of our farmers. 
At a time of instability and economic turmoil throughout the 
world, it is crucial that this Committee does everything it can 
to assist farmers and ensure they are around to put food on our 
tables.
    I am looking forward to hearing from our witnesses today. 
Their insights as part of the delivery system, product 
development, and use of the programs will provide valuable 
perspectives of the crop insurance industry. I want to say 
thank you to them for taking time out of their busy schedules 
to be with us here today.
    And, Madam Chair, I yield back.
    The Chair. Thank you, Mr. Scott.
    The chair would request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony and to ensure that there is ample time for questions.
    We are pleased to welcome five witnesses today. Our first 
witness is Mr. Bob Haney, the Chief Executive of AgriSompo, 
based in West Des Moines, Iowa, and he is testifying on behalf 
of the Crop Insurance and Reinsurance Bureau and the American 
Association of Crop Insurers.
    Our second witness today is Ms. Kathy Fowler, the owner of 
the Fowler Agency in Memphis, Texas, who is testifying on 
behalf of the Crop Insurers Professionals Association.
    Our third witness joining us today is Mr. Alex Offerdahl, 
the Crop Insurance Division Head of Watts and Associates in 
Billings, Montana.
    And our fourth witness is Mr. Tom Haag, the First Vice 
President of the National Corn Growers Association and a farmer 
from Eden Valley, Minnesota.
    And to introduce our fifth and final witness, I would like 
to yield to the distinguished Member from Georgia, Mr. Allen.
    Mr. Allen. Thank you, Madam Chair. And good morning, 
everyone. It is my pleasure to introduce my constituent and 
friend Lee Cromley. Lee is a sixth-generation farmer along with 
his brother Charlie in Brooklet, Georgia, right outside of 
Statesboro, Georgia--where they have farmed 2,500 acres of 
cotton and peanuts since 1983. He graduated from the University 
of Georgia, Go Dawgs, national champions, with a degree in 
agricultural and environmental sciences and has served on the 
Georgia Cotton Commission's Board since 2011. Along with 
Georgia Cotton Commission, he serves as a board member of 
Bulloch County Farm Service Agency and the Farmers and 
Merchants Bank of Statesboro, a committed community servant. 
Lee is also currently the Chairman of the Southern Cotton 
Growers and serves on the board of directors for the National 
Cotton Council of America. He and his wife Ann reside in 
Brooklet, and have three children. And, Lee, we look forward to 
your testimony here today. Thank you.
    The Chair. Thank you, Mr. Allen.
    Welcome again to all of our witnesses. We will now proceed 
with your testimony. You will each have 5 minutes. The timer 
should be visible to each of you, and it will count down to 
zero, at which point your time has expired. If you can please 
honor that, that would be great.
    Mr. Haney, we are going to start with you when you are 
ready.

         STATEMENT OF ROBERT ``BOB'' HANEY, EXECUTIVE 
 CHAIRMAN, AgriSompo, CHIEF EXECUTIVE OFFICER, AgriSompo NORTH 
                 AMERICA, SOMPO INTERNATIONAL 
          HOLDINGS LTD.; MEMBER, BOARD OF DIRECTORS, 
AMERICAN ASSOCIATION OF CROP INSURERS, WEST DES MOINES, IA; ON 
                 BEHALF OF CROP INSURANCE AND 
                    REINSURANCE BUREAU, INC.

    Mr. Haney. Thank you, Chair Bustos, Ranking Member Scott, 
and Members of this Subcommittee. Thank you for allowing me the 
opportunity to testify today on the importance of crop 
insurance and the vital role it plays in providing risk 
management to farmers and ranchers across the country. My name 
is Bob Haney, and I am currently the Executive Chairman of 
AgriSompo, one of the 13 approved insurance providers that 
sells and services crop insurance to farmers and ranchers 
across the country.
    I have been in the business since 1981, and our current 
company has a national footprint, serving the farmers in every 
state represented on this Subcommittee today. And we are 
committed to protecting the livelihood of the American farmers 
and ranchers so that they may help feed the world.
    I believe that crop insurance is the best tool available to 
farmers to protect against the natural perils that our farmers 
face because crop insurance provides a rapid response to 
natural disasters. Private companies like ours typically are 
able to deliver indemnity payments to farmers in fewer than 30 
days after a loss occurs. And the private-sector delivery of 
crop insurance also means that farmers get to choose the 
company and the local agent that can provide them and their 
family with the best service.
    Now, crop insurance is also a very big tent. Our industry 
protects farmers of all types and sizes and covers over 130 
different commodities, including the major row crops, specialty 
crops, organic crops, as well as dairy and livestock.
    The cost-share component with the Federal Government helps 
to keep crop insurance affordable for most farmers, while also 
ensuring the program is fiscally responsible. Over 40 years 
ago, a commission of public- and private-sector visionaries 
conceived the concept of protecting the farmer, wherein the 
farmer had skin in the game via a deductible and a paid premium 
discounted by the taxpayer and deploying the private-sector to 
capitalize on its innovation and competitive nature, all in the 
name of a secure national food supply. This three-legged-stool 
concept is the key to the success of the crop insurance 
program.
    Another key feature is that crop insurance is flexible. 
Farmers can tailor their coverage to fit the needs of their 
specific operations. And if a farmer or commodity organization 
doesn't believe there is an existing policy that works for 
their farm, those farmers can utilize what we call the 508(h) 
process to develop a product that does.
    Now, today, I would like to address three topics as we look 
ahead to the 2023 Farm Bill. First, I would like to begin, as 
the Committee continues to evaluate the intersection between 
agriculture and climate change, it is important to note that a 
farmer's first line of defense against climate change is crop 
insurance. There have been studies conducted that show that 
farmers who purchase crop insurance are more likely to 
undertake climate-smart agricultural practices than those who 
do not.
    As this Committee looks ahead to the farm bill, I would 
like to share the criteria by which we evaluate proposals in 
this area. First, it is critical that any intersection between 
climate-smart ag and crop insurance, that it maintain the 
actuarial soundness of the program. This is the underlying 
tenet of the program that maintains its integrity. Second, 
intersections between climate and crop insurance should be 
incentive-based and not place additional mandates on our 
farmers and ranchers. And finally, new climate initiatives 
should be funded on their own terms and not take money away 
from the core of the crop insurance program.
    In terms of meeting these criteria, we believe the 508(h) 
process is one tool that, when used responsibly, can enhance 
the intersection between climate and crop insurance. This 
process involves grower input, can lead to better coverages and 
possibly lower premiums, and is required to be, again, 
actuarially sound.
    Now, shifting gears to crop insurance and disaster 
assistance, the last several years have seen an increase in ad 
hoc disaster payments as unprecedented crises have hit our 
rural America. It is only prudent for this body to be looking 
at the next farm bill for ways to plug these gaps in our safety 
net. Our ask of this Committee is that you consider crop 
insurance as the primary tool for helping to fill those gaps 
where appropriate.
    Regarding disaster proposals, we would discourage the 
creation of any disaster program that would disincentivize 
farmers from purchasing crop insurance or that would directly 
compete with existing crop insurance products or products that 
are currently available in the private-sector. We actually 
don't want to see the creation of a program that would double 
pay farmers for the same loss. This would indirectly discourage 
the purchase of crop insurance and possibly lead to changes in 
farming practices that could lead to potential instances of 
fraud, waste, and abuse. And we would oppose the creation of a 
disaster package that is funded by cuts to the crop insurance 
program.
    Finally, given the multiple mentions in the testimony 
relative to 508(h), I would be remiss not to mention that we 
are working actively with the Risk Management Agency to ensure 
transparency and timeliness in the rollout of future products 
submitted through the 508(h) process. Our goal is to have a 
functional process to bring innovation to crop insurance and 
for the process to be as consistent with sound business 
practices that ensure that we continue to be stewards of the 
taxpayer dollars and in the crop insurance program.
    In conclusion, I would like to thank this Subcommittee for 
your support of crop insurance and for your willingness to 
learn more about the perspective of our industry. We stand 
ready to work with each of you as we head into the next farm 
bill.
    [The prepared statement of Mr. Haney follows:]

    Prepared Statement of Robert ``Bob'' Haney, Executive Chairman, 
  AgriSompo, Chief Executive Officer, AgriSompo North America, Sompo 
   International Holdings Ltd.; Member, Board of Directors, American 
 Association of Crop Insurers, West Des Moines, IA; on Behalf of Crop 
                             Insurance and 
                        Reinsurance Bureau, Inc.
    [Chair] Bustos, Ranking Member Scott, and Members of the General 
Farm Commodities and Risk Management Subcommittee--thank you for 
allowing me the opportunity to testify today on the importance of crop 
insurance and the vital role it plays in providing risk management to 
farmers across the country.
    My name is Bob Haney, and I am Executive Chairman of AgriSompo 
North America, one of the 13 Approved Insurance Providers that sell 
crop insurance policies to farmers and ranchers across the country. I'm 
also a farmer in Iowa. I've been in the crop insurance industry for 
more than 40 years and retired once, only to come back to lead 
AgriSompo and to continue work in an industry that I love and that I 
believe is of critical importance to American agriculture. Our company 
has a national footprint, so we serve farmers in every single state 
represented on this Subcommittee today. AgriSompo is also a member of 
the Crop Insurance and Reinsurance Bureau, the American Association of 
Crop Insurers, and National Crop Insurance Services.
    The Federal Crop Insurance Program was initially created in the 
1930's, but it wasn't until the development of the public-private 
partnership and the positive changes made by Congress in the 1990's and 
2000 that the program really became the cornerstone of risk management 
on the American farm. Farmers in 1980's and 1990's faced numerous 
challenges that were met by years of unreliable, untimely, and 
unbudgeted ad hoc disaster assistance. After spending billions in 
unbudgeted dollars, Congress decided that it was time to find a better 
way to help farmers across the country, so this body worked to make 
crop insurance more widely available and affordable to farmers and 
ranchers.
    One of the things that is critical to the success of this program 
is its ``three-legged stool'' design. The risk of these policies is 
shared by crop insurance companies such as AgriSompo, the farmers who 
pay a premium for the policy, and the Federal Government that helps to 
reduce the premium paid by farmers and helps to underwrite part of the 
risk for the policies. Each player has skin in the game, which helps to 
ensure the success of the program over the long-term.
    As an Approved Insurance Provider, we underwrite crop insurance 
policies--which means we share in bearing the risk of policies, so the 
taxpayer is not solely responsible for covering losses. We hire agents 
to sell policies and adjusters to assess and confirm losses. We invest 
in technology, training and services to ensure the highest integrity of 
the program. This investment helps to ensure one of the lowest improper 
payment rates amongst USDA programs.
    Crop insurance is a big tent. Our industry protects farmers of all 
types and sizes and covers 130 different commodities, including a 
significant number of specialty and organic crops. For those crops 
without individual policy coverage, Whole Farm Revenue insurance is 
available. And more recently, the program has been expanded to include 
dairy farmers and a more robust option for livestock producers.
    We believe that crop insurance is one of the best tools available 
to farmers to protect against Mother Nature because crop insurance is a 
rapid response solution to disasters and is a farmer's first line of 
defense against climate change. Private companies like mine are 
typically able to deliver indemnity payments to farmers in fewer than 
thirty days after a loss occurs--not months or years later. The 
private-sector delivery of crop insurance also means that farmers have 
a choice in who they do business with, and this choice ensures that a 
farmer is able to find an agent and a company that can provide them 
with the best service for their operation.
    The cost-share with the Federal Government helps to keep crop 
insurance affordable for most farmers, while also ensuring that the 
program is fiscally responsible. Although Federal crop insurance has 
been around since 1938, it wasn't fully utilized until almost 60 years 
later. During this time, natural disaster management typically came 
solely in the form of ad hoc disaster bills, which were slow in 
delivering assistance, very costly, and relied completely on taxpayers 
to fund. It was the legislation created in 1994, 2000 and 2014 that 
helped kick start involvement from the private-sector, made the program 
more actuarially sound, encouraged participation, and improved 
availability of coverage. With the continued bipartisan support for the 
public-private partnership crop insurance provides, farmers are able to 
receive a reliable and cost-efficient safety net to protect both 
themselves and the future of farming.
    Crop insurance is also flexible. Farmers can tailor their coverage 
to fit the needs of their specific operation. The program is 
continuously evolving and improving to the meet the needs of America's 
farmers and ranchers. Some recent advances have included cost-conscious 
hurricane endorsement policy to assist farmers who have been impacted 
by increasingly severe storms as well as an endorsement for farmers who 
choose to split-apply nitrogen on their field.
    If a farmer or commodity organization doesn't believe there is an 
existing policy that works on their farm, the Federal Government will 
actually provide significant reimbursement to them to develop a product 
that does through the 508(h) provisions in the Federal Crop Insurance 
Act. And most changes don't require a farm bill or any other 
legislation. It just requires an interested party to be willing to work 
with the Federal Crop Insurance Corporation Board to design a better 
product in an actuarially sound and marketable way.
    We know that crop insurance has not solved every problem that 
America's farmers have faced in recent years. The program simply isn't 
designed to address every type or cause of extreme loss. The program is 
also, by statute, prevented from covering some losses--such as those 
that occur after the harvest of a crop. But for those losses that can 
be appropriately covered by crop insurance--such as in-season commodity 
price decreases, yield losses due to Mother Nature, and even squeezes 
in farmer margins--there is no better way to get assistance into the 
hands of farmers in a timely fashion than through crop insurance.
    The bottom line is that the crop insurance program is successfully 
meeting the needs of thousands of farmers who can tailor their risk 
management needs to serve them best with the help of a local agent. 
This protection also represents a good value for America's taxpayers 
when compared to other alternatives for addressing losses incurred by 
American farmers.\1\
---------------------------------------------------------------------------
    \1\ More on the structure and benefits of crop insurance can be 
found in the attached one-pagers that are utilized by the Crop 
Insurance Coalition. This Coalition consists of a variety of farm 
organizations, agricultural lenders, ag input organizations, the crop 
insurance industry and conservation groups that support protecting and 
preserving Federal crop insurance.
---------------------------------------------------------------------------
Crop insurance complements climate-smart agriculture
    As the Committee continues its work in evaluating the intersection 
between agriculture and climate change, it is important to note that a 
farmers' best tool in defense against climate change is crop insurance. 
Crop insurance and climate-smart agriculture intersect in positive 
ways. For example, in order to be eligible for crop insurance, farmers 
must follow Good Farming Practices, as defined by local agronomic 
experts. Farmers who follow those Good Farming Practices that help 
mitigate climate change--like no-till farming and planting cover crops, 
for example--can see lower production costs, better soil health and 
increased yields, all of which can lower their crop insurance premiums 
and increase their production guarantees in an actuarially sound way. 
By promoting Good Farming Practices that can help lead to lower 
premiums, crop insurance helps complement healthy soil and improve 
conservation efforts. The Journal of Environmental Management published 
a peer-reviewed study that credited crop insurance with encouraging the 
adoption of conservation practices. In fact, one key takeaway from that 
study is that farmers who purchase crop insurance are more likely to 
undertake climate-smart agricultural practices than those who do not.
    The 508(h) process is another tool that can be used to enhance the 
intersection between climate and crop insurance. 508(h) allows for 
individuals or groups who would like to add additional insurance 
products into the marketplace a pathway for getting those products 
considered and approved by the Federal Crop Insurance Corporation Board 
of Directors. Products considered under this process are farmer-driven, 
actuarially sound, and follow sound insurance principles. Recent 
examples of products approved by the FCIC Board, which highlight the 
effectiveness of the 508(h) process in driving adoption of climate-
smart agriculture practices, include a policy to support split-
application of nitrogen and the Sprinkler Irrigated Rice Endorsement, 
with other climate-related policies currently under consideration.
    When Congress considers legislative proposals addressing the 
intersection between climate and crop insurance, we would like to share 
the criteria by which we will evaluate such proposals.

   If additional intersections are going to be explored, these 
        intersections should provide farmers with incentives, rather 
        than mandates or regulation, to adopt climate-smart 
        agriculture.

   Incentives must be designed so that insurance policy 
        premiums continue to be set at appropriate rates for the 
        integrity and success of the crop insurance program.

     By statute, crop insurance premiums must align with 
            the risk associated with the policy, and because of the 
            self-correcting nature of crop insurance, premiums adjust 
            to reflect farmers' individual risk and production.

     The methodology for setting premium rates inherently 
            takes climate into account. For example, premium rates are 
            determined from more recent years of loss experience, 
            thereby reflecting changes in weather and weather patterns. 
            The program performs well, with premiums continuing to 
            match indemnities paid to farmers, thereby ensuring the 
            financial stability of the program for farmers, taxpayers, 
            and the private-sector providers of policies.

     Agronomic data is critical to making changes to total 
            crop insurance premiums, whether those premium changes are 
            for climate-smart agriculture practices or other reasons.

     Lawmakers seeking to reward farmers for climate-smart 
            practices should first look to the flexible 508(h) process 
            that offers potential for new and creative solutions for 
            addressing the intersection of climate change and risk 
            management. It is important that farmers be incentivized in 
            the adoption of Good Farming Practices that are climate-
            smart and that the crop insurance program not be turned 
            into a policing mechanism for these practices. If 
            incentives are created, they should be evaluated to ensure 
            that they do not encourage practices that could harm yields 
            and that there are appropriate incentives available for 
            varying regions and crops.

   New climate initiatives should be funded on their own terms 
        and not take money away from the crop insurance program.

     Crop insurance is vital to America's farmers and has 
            been working well for them for over 80 years. It is a 
            critical tool for farmers as they adapt to the changing 
            climate pressures. Weakening the program in any way will do 
            more harm to farmers coping with climate change and will 
            only increase the need for ad hoc disaster programs.

     The program must be adequately funded in order to 
            continue to provide this timely and effective risk 
            management tool for farmers.
Crop insurance and disaster assistance
    Crop insurance provides certainty to farmers and their lenders and 
it is targeted directly to actual losses incurred by a farmer. If a 
farmer has a loss, they will typically receive a crop insurance payment 
within 30 days of a claim being finalized through an efficient private-
sector delivery system. By contrast, other types of assistance can 
often take a year, or oftentimes more than a year, after a disaster 
before a farmer receives a payment. Farmers get to choose their level 
and type of coverage, which provides a predictable financial backstop 
for lenders in times such as these where input costs are rising 
rapidly, and farmers are borrowing more to purchase these inputs.
    The last several years have seen a drastic increase in ad hoc 
disaster payments as unprecedented crises have hit rural America. As an 
industry, we are continuously evaluating where the gaps in the program 
exist and what we can do to help more farmers better manage their risk 
through the Federal crop insurance program. This has been particularly 
true in the last few years of turbulence. For example, as ad hoc 
assistance was required to address increasingly intense hurricanes, the 
Risk Management Agency developed and the industry implemented a simple, 
inexpensive coverage for hurricanes that is based on wind speed and can 
help to address the concerns of many southern farmers who have often 
felt that more traditional coverage is too expensive for their needs.
    Policies have also been developed to assist micro farms that are 
contributing to the diversification and strengthening of our supply 
chains and better options for our nation's livestock producers have 
been implemented. Existing margin insurance policies are also being 
evaluated to ensure the best coverage possible for farmers during these 
tumultuous times.
    This is not to say that crop insurance can solve every problem. 
However, if this Committee considers a permanent disaster program, this 
legacy of improvement should lead the Committee to pose several 
questions during the development of the next farm bill. Where are there 
gaps in the safety net? Can and should these gaps be filled by crop 
insurance? What gaps would not be appropriate to cover through the crop 
insurance program? How do you prevent overlap in payments between crop 
insurance and other programs? How do you ensure that any new programs 
that are created do not compete with the efficient and already-
successful program that is crop insurance?
    Regarding any proposals considered by this Subcommittee and the 
full House Agriculture Committee, we:

   Discourage any disaster assistance program that would 
        disincentivize farmers from purchasing crop insurance. Often 
        crop insurance and disaster programs work together through 
        purchase requirements to ensure that crop insurance 
        participation is encouraged. However, even the existing ad hoc 
        programs created by USDA and authorized by Congress, as they 
        are designed today, discourage farmers from purchasing the 
        highest levels of coverage available to them.

   Oppose double paying farmers for the same loss. In addition 
        to indirectly discouraging crop insurance purchases, a 
        duplicative policy design is not in the best interest of the 
        taxpayer or the farmer over the long-term.

   Oppose any disaster package that is funded by cutting crop 
        insurance.

   Encourage the use of the 508(h) process for the creation of 
        additional policies that can better address existing gaps. The 
        predecessors on this Committee understood the ever-changing 
        agricultural landscape and designed mechanisms within the crop 
        insurance program, including 508(h), that would help 
        agriculture adjust to changing times. These processes should be 
        protected and utilized moving forward.
Improvements to 508(h)
    Given the multiple mentions in this testimony of 508(h), I would be 
remiss not to mention that we are working actively with the Risk 
Management Agency and look forward to working with this Subcommittee to 
ensure transparency and timeliness in the rollout of future products 
submitted through 508(h) process. In the past, companies have been 
faced with the implementation of new crop insurance products at such a 
late date and with so little information that it has been difficult to 
support a successful product launch for our farmer customers. When new 
products are rolled out, we want to see successful product launches, 
and the best way to ensure success is to have transparency with the 
companies that will be responsible for underwriting, selling and 
servicing the product.
    For example, we recently implemented a 508(h) product that was 
released 2 months after our training programs were completed and just 
weeks before sales closing date. We spent hundreds of thousands of 
dollars to rework our IT systems and rushed to put out information on 
the product to our internal team, our agents, and our farmer customers. 
But because the product was rushed and companies, agents and our farmer 
customers were not comfortable with the product, we only sold 17 
policies this year.

    Ultimately, we want what is in the best interest of our farmer 
customers and the program, and we believe more transparency and 
timeliness in the 508(h) process is critical to those interests.
Concluding Remarks
    Crop insurance is the premier risk management tool for the American 
farmer. A number of factors combine to make crop insurance the 
cornerstone of many farmers' financial and risk management plans: the 
ability to tailor coverage to their own operation at a meaningful level 
and affordable price, the comfort of working with a local and trusted 
insurance professional and the knowledge that losses will be covered in 
a timely manner and before the banker comes to collect. Throughout 
time, these crop insurance benefits have accounted for the success and 
acceptance of the program and will continue to do so well into the 
future.
    Again, thank you for having me here today and for your continued 
support of the crop insurance program. I look forward to answering any 
questions you have, and I am happy to be a continuous resource for you 
during the upcoming farm bill discussions.
                              attachment 1
[Crop Insurance 101]
Protect, Preserve & Improve Crop Insurance
    In the coming year, we urge Congress to protect, preserve and 
improve the program:

   Keeping crop insurance affordable to farmers.

   Maintain the size and diversity of the risk pool by keeping 
        farmers of all sizes in the program.

   Maintain the efficient and effective private-sector delivery 
        of crop insurance.

   Work with farmers, agents, AIPs and USDA to identify 
        potential actuarially sound improvements to crop insurance.

   Crop insurance protects when disaster hits.

     In 2019, a record setting number of acres were not 
            planted due to flooding and excess moisture. As the 
            nation's premier risk management tool for farmers, crop 
            insurance protected farmers from losses associated with not 
            being able to plant their crop. Approved Insurance 
            Providers (AIPs) have already paid out almost $4.6 billion 
            in indemnities, with more payments expected in the coming 
            months.

     In 2018, more than $7.2 billion in indemnity payments 
            were made for disasters including hurricanes and drought, 
            all while some farmers are still waiting on their ad hoc 
            assistance dollars to arrive.

   Crop insurance is a successful public-private partnership, 
        and unlike other farm programs or ad hoc disaster assistance 
        that is 100% paid for by the taxpayer, crop insurance losses 
        are shared by farmers, private-sector companies, and the 
        government.

     Premium rates are set by the government and farmers 
            cannot be refused a policy.

     Crop insurance is a rapid response solution to 
            disasters. Private-sector delivery typically allows farmers 
            who have losses and have met their deductible to receive 
            indemnity payments in less than thirty days. Ad hoc 
            disaster assistance cannot be relied upon by lenders and 
            isn't delivered in a timely or precise manner.

   Crop insurance is purchased by farmers to protect against 
        yield and revenue losses due to natural disasters and single-
        year declines in prices. It is the only safety net available to 
        all types and sizes of producers in all regions.

     Crop insurance is a cost-share with farmers where 
            farmers pay a discounted rate for their crop insurance 
            premiums, which total $3.5 to $4 billion each year.

     On average, farmers meet a 27% deductible before they 
            receive a crop insurance indemnity payment.

     About 30% of crop insurance policies pay an indemnity 
            in an average year. It is not unusual for farmers to pay 
            their crop insurance bill for years without receiving an 
            indemnity payment.

   Crop insurance is critical to the rural economy. Without 
        crop insurance most producers simply cannot qualify for the 
        operating loans needed to plant a crop.

     Due to the extremely tight margins and incredible risk 
            in agriculture, regulators examining ag lending portfolios 
            typically insist borrowers have crop insurance to ensure 
            repayment of loans.

     Increasing the cost of farmer-paid premiums or 
            disqualifying some farmers from participating in the crop 
            insurance program will force farmers to decrease coverage, 
            making it more difficult to qualify for operating capital 
            and loans in the current ag economy.

     Crop insurance protects jobs, both on and off the 
            farm. Crop insurance enables farmers to rebound quickly 
            after disaster and allows producers to pay credit 
            obligations and other input expenses, such as fertilizer or 
            farm equipment.

   By statute, crop insurance is actuarially sound. That means 
        a large and diverse risk pool is needed to make premiums 
        affordable. Removing some farmers from the crop insurance risk 
        pool via means testing will impact the rates for every single 
        farmer still participating in crop insurance.

   Crop insurance has environmental benefits.

     Conservation compliance measures, including wetlands 
            protections and highly erodible lands protections, are a 
            requirement for receiving a discount in the purchase of 
            crop insurance.

     The 2018 Farm Bill included language to clarify that 
            planting soil-nurturing cover crops is allowed under crop 
            insurance policies.

   Crop insurance is nimble.

     Crop insurance improves each year to meet the needs of 
            all types of farmers.

     Where there are gaps in the program, USDA, 
            stakeholders and the private-sector have mechanisms 
            available to fill these gaps with meaningful risk 
            management tools.
                              attachment 2
[Premium Discount Cuts to Crop Insurance]
Oppose Cuts to Farmer Discounts for Crop Insurance
    There have been various proposals to cut the discount farmers 
receive when purchasing crop insurance. These proposals vary in the 
details, but are fundamentally flawed, regardless of how the cuts are 
structured.

   Any reduction in the discount for crop insurance will 
        increase the cost of crop insurance to farmers. Premium support 
        does not go to crop insurance companies or agents--it simply 
        keeps crop insurance affordable for farmers. According to a 
        national public opinion poll released in May 2016, nearly 80 
        percent of Americans said they supported giving farmers 
        discounts on insurance premiums and the vast majority agreed 
        that the current premium and deductible amounts absorbed by 
        farmers were appropriate.

   The alternative to affordable and viable crop insurance for 
        which farmers pay about $3.5 to $4 billion per year in premiums 
        is ad hoc disaster assistance that is 100% paid for by the 
        taxpayer and may not arrive until more than a year after the 
        disaster. Crop insurance is the only component of the farm 
        safety net that farmers can literally take to their banker, 
        thereby supporting the rural economy and protecting jobs on and 
        off the farm.

   Any increase in the cost of crop insurance will decrease 
        demand for the product and increase the likelihood for calls 
        for ad hoc disaster assistance. Economists can debate how much 
        of a decrease in demand will result from an increase in cost, 
        but the fundamental fact remains: if you increase the cost of 
        crop insurance for farmers, they will buy less crop insurance. 
        This is particularly true in the current environment of 
        historically low farm income and increased market volatilities.

   A recent study by Keith Coble and Brian Williams from 
        Mississippi State found that farmers are willing to pay out-of-
        pocket no more than four percent of the expected value of their 
        crop on crop insurance. So, as the cost of insurance increases, 
        purchase levels will decrease.

   As commodity prices decline and farmers' budgets tighten, an 
        increase in the cost of crop insurance is only more likely to 
        result in a decrease in crop insurance purchases. Recent 
        analysis found that reducing the aggregate subsidy rate by 14 
        percentage points could decrease the acres covered by crop 
        insurance by 17%, potentially further increasing the pressure 
        for ad hoc disaster assistance.

   As a reference point, recent analysis has shown that a ten 
        percentage point decrease in premium assistance would increase 
        the bill a typical Midwest grain farmer pays by 50% for a 
        policy at the 70% coverage level. On a policy with an 80% 
        coverage level, the farmer's bill would increase by over 30%.

   To gauge the impact of a reduction in the discount for crop 
        insurance, we have history to guide us. Premium discounts were 
        increased in 2000 with passage of the Ag Risk Protection Act 
        (ARPA). Prior to ARPA, both premium discounts for farmers and 
        crop insurance participation levels were much lower than they 
        are today.

------------------------------------------------------------------------
                                    1998 Crop Year      2018 Crop Year
------------------------------------------------------------------------
                    Acreage           181 million       369.9 million
              Total Premium          $1.8 billion       $10.0 billion
        Farmer Paid Premium          $929 million        $3.8 billion
         Premium Assistance          $946 million        $6.2 billion
                   Insured Liability$27.9 billion      $104.1 billion
------------------------------------------------------------------------
Source: USDA RMA, March 9, 2020.

                              attachment 3
Means Testing and Crop Insurance
    Federal crop insurance is, by statute, required to be actuarially 
sound. Over the long-term, every dollar of indemnities (payments to 
producers for losses) must be equal to the assigned premium. So when 
adjusted gross income (AGI) limits or premium support caps are proposed 
for farmers, what does that mean for farmers and crop insurance?

   Every single producer who purchases crop insurance will be 
        impacted. It might only be a small number of farmers who are 
        directly impacted by a premium subsidy cap or an AGI limit, but 
        don't be fooled--every single producer in the program will be 
        indirectly impacted. As limitations are placed on the discounts 
        for crop insurance, farmers will buy less crop insurance or not 
        buy it at all. The impact will be largest for lower risk 
        farmers, crops and regions. That will change the ``risk pool.'' 
        As the pool becomes more risky, the premiums for every farmer 
        in that risk pool are likely to increase.

   GAO analysis shows that a $40,000 premium support cap would 
        have affected 26% of total insured liability in the crop 
        insurance program in 2011. So while a premium subsidy cap might 
        only impact a small number of producers, it would put a very 
        large portion of crop production at risk.

   USDA has called a cap on premium support ``ill advised,'' 
        noting regions with high-value crops, large-acreage farms, and/
        or a higher risk of crop loss would be especially hard hit. 
        High-value crops would include such things as fruits and 
        vegetables and organic crops. Arizona, California, Georgia, 
        Hawaii, Louisiana, New Mexico, North Carolina, North Dakota, 
        South Carolina, South Dakota and Utah have all been identified 
        by USDA as shouldering disproportionate effects under a cap on 
        premium support.

   Whole-Farm Revenue Protection will also be 
        disproportionately affected. The average premium subsidy 
        nationwide for 2017 was $38,000, indicating that many policies 
        would be above a $40,000, or even $50,000 cap. In nine states, 
        the average premium subsidy is above $50,000 (California, 
        Delaware, Florida, Georgia, Louisiana, North Carolina, New 
        Jersey, South Carolina, and Texas).

   Any means testing proposal, whether an AGI limit or a 
        premium support cap, that has significant budget savings 
        directly translates into an increase in cost to farmers. A 
        dramatic increase in premium costs on a large percentage of 
        acres would inevitably lead to decreased participation in crop 
        insurance.

     To be clear, reduced participation in crop insurance 
            impacts every producer. Because crop insurance is required 
            by law to be actuarially sound, as the risk pool changes, 
            premium rates must change to reflect the risk. Reduced 
            coverage on a large number of acres will change the 
            riskiness of the overall pool, thereby altering rates for 
            everyone in the program. It's critical to remember that in 
            looking at risk pools it is not the number of farmers 
            impacted, but the number of acres impacted that will alter 
            premiums.

     Reduced participation can only lead to an increase in 
            calls for ad hoc disaster programs as farmers no longer 
            have the critical protection of crop insurance.
                              attachment 4
Oppose Cuts to the Private-Sector Delivery System for Crop Insurance
   Crop insurance is a successful public-private partnership. 
        The program is federally regulated and delivered by the 
        private-sector.

     Federal regulation ensures that farmers cannot be 
            refused protection and that companies cannot raise premiums 
            or impose special standards on any individual producer. 
            Premium rates are set by the government and are based on 
            actuarial soundness.

     Losses are shared by farmers, private-sector companies 
            and the government. The government, and therefore 
            taxpayers, also share in any gains.

     Private sector delivery allows farmers who have losses 
            and have met their deductible to typically receive 
            indemnity payments in less than thirty days, whereas ad hoc 
            disaster assistance or other government safety net programs 
            can take a year or more to provide assistance to farmers.

     According to a national public opinion poll released 
            in May 2016, voters agreed by a 20 point margin that 
            farmers and taxpayers were better served by private 
            companies delivering crop insurance instead of the 
            government.

   The private-sector delivery system has already absorbed 
        significant cuts through the 2008 Farm Bill and administrative 
        actions taken in 2011. These cuts are estimated to be $12 
        billion over a 10 year window.

     One such Administrative change already decreased the 
            targeted rate of return for crop insurance companies to 
            14%.

     This target rate is neither a guarantee nor a profit 
            for crop insurers. Profits are significantly lower than the 
            target rate of return.

     As in farming, the crop insurance sector will have 
            good years and bad years. The good years are particularly 
            important to help sustain the sector during the bad years.

   Proposals to cut the private-sector delivery system would 
        harm the rural economy and negatively impact service and timely 
        delivery of payments when there is a disaster.

     In order to deliver timely service, the crop insurance 
            industry employs thousands of professionals in rural 
            America. More than 20,000 licensed agents, certified claims 
            adjusters and company staff are committed to getting 
            farmers who have sustained losses and met their deductible 
            back on their feet quickly.

   Former USDA Farm and Foreign Agricultural Services Under 
        Secretary Michael Scuse might have said it best during the 
        devastating drought of 2012: ``To this day, I have yet to have 
        a single producer call me with a complaint about crop 
        insurance. This is a testament to just how well your agents, 
        your adjusters, the companies, and the Risk Management Agency 
        worked together in one of the worst droughts in the history of 
        this nation.''
                              attachment 5
Crop Insurance Myth vs. Fact: Beginning Farmers and Ranchers
          Myth: Crop insurance makes it more difficult for beginning 
        farmers and ranchers to enter the farming business.
          Fact: The 2018 Farm Bill maintained and expanded provisions 
        to make crop insurance an even better risk management tool for 
        beginning farmers and ranchers.

    More than 17,000 farmers used the beginning farmer and rancher 
benefits in crop insurance in reinsurance year 2021

   These farmers insured more than 5.2 million acres of 
        farmland.

   The beginning farmer and rancher benefits include a higher 
        premium discount and assistance in building a yield history 
        more quickly that is in line with what the land produced before 
        being operated by a beginning farmer or rancher.

   Almost every state already has beginning farmers and 
        ranchers utilizing these benefits.

   The ability of beginning farmers and ranchers to purchase 
        crop insurance can be linked to their ability to obtain credit 
        as well.
Beginning Farmer and Rancher Policies by County Reinsurance Year 2021


          Source: Risk Management Agency, USDA.
                              attachment 6
Crop Insurance Myth vs. Fact: Conservation
          Myth: Crop insurance encourages farmers to tear up ground.
          Fact: Overall, acres in production and erosion have 
        decreased. Additionally, the 2014 Farm Bill expanded the 
        conservation compliance provisions and Sodsaver provisions to 
        apply to crop insurance.

    Farmers must comply with highly erodible land conservation and 
wetland conservation provisions. They must certify that they will not:

     Produce an agricultural commodity on highly erodible 
            land without a conservation system;

     Plant an agricultural commodity on a converted 
            wetland; or

     Convert a wetland to make possible the production of 
            an agricultural commodity.

   These compliance provisions have been linked to the ability 
        to receive commodity programs since 1985, but the 2014 Farm 
        Bill relinked those provisions with eligibility for premium 
        support paid under the Federal Crop Insurance Program.

   In addition, the 2014 Farm Bill expanded a Sodsaver 
        provision which reduces the Federal crop insurance premium 
        discount available to landowners by 50 percent for 4 years on 
        any lands they convert from native prairie to cropland.

   The 2018 Farm Bill explicitly deemed cover cropping a ``good 
        farming practice'' when paired with an approved termination 
        date for the cover crop. The purpose of the provision was to 
        ensure that crop insurance would not discourage farmers from 
        adopting cover crop practices.

   A peer-reviewed study in the Journal of Environmental 
        Management found that crop insurance can actually be 
        complementary to the adoption of conservation practices. 
        Adoption rates of conservation practices like cover crops and 
        no-till are higher amongst growers who utilize crop insurance 
        versus those who don't.*
---------------------------------------------------------------------------
    * Crop insurance: A barrier to conservation adoption?--
ScienceDirect (https://www.sciencedirect.com/science/article/pii/
S0301479720311488?via%3Dihub).

   The charts below tell an entirely different story than the 
        myth suggests. The number of acres covered by crop insurance 
        has almost tripled since the 1990s--from fewer than 85 million 
        acres to more than 240 million acres today, while overall crop 
        acreage has decreased. Over the same period, USDA's Natural 
        Resources Inventory shows cultivated cropland has dropped from 
        349 to 329 million acres. In addition, erosion has decreased 
        significantly over that period.
Total U.S. Cropland Compared to Cropland with Buy-Up Crop Insurance


          Source: Risk Management Agency, USDA.
Erosion Rate on Cropland, by Year


          Source: Economic Research Service, USDA.
          Source: Natural Resources Conservation Service, National 
        Resources Inventory.
                              attachment 7
Crop Insurance Myth vs. Fact: Crop Insurance and the Budget
          Myth: Crop insurance is over budget.
          Fact: Crop insurance costs are currently well below budget.

    Annual crop insurance costs peaked in 2013 at $11 billion, mainly 
due to the devastating 2012 drought combined with the high value of 
crops at the time.

   According to the first CBO estimates provided after the 
        passage of the 2014 Farm Bill, the actual cost of crop 
        insurance has been around $11 billion under budget between 2014 
        and 2020.
Cost of Federal Crop Insurance


          Source: Congressional Budget Office.

   Crop insurance has consistently been under budget, but a 
        couple of clarifying points on the budget:

     First, there are several farm programs that are not 
            crop insurance. Crop insurance is, by statute, an 
            actuarially sound program that farmers pay for out of their 
            own pockets and is delivered efficiently and effectively by 
            the private-sector.

     The cost of crop insurance is driven not only by 
            disasters but by the cost of commodities. Like with any 
            insurance, the more valuable the item is, the more 
            expensive the insurance will be. As the value of 
            commodities rise and fall, so too will the cost to insure 
            them.

     The overall cost of crop insurance can also be reduced 
            by underwriting gains achieved by the government in years 
            of good performance with lower losses.

     The forward-looking budget estimates for the cost of 
            crop insurance, by and large, remain consistent from year 
            to year, as the Congressional Budget Office does not 
            attempt to make predictions about what Mother Nature will 
            do in any given year.
                              attachment 8
Crop Insurance Myth vs. Fact: Crop Types
          Myth: Crop insurance is only for big corn, soybean, wheat and 
        cotton farmers.
          Fact: Crop insurance is available for more than 125 crops and 
        to farmers of all sizes and in all 50 states.

    The number of acres of fruit, vegetables, and other specialty crops 
covered by crop insurance increased from 7.7 million acres in 2009 to 
about 10 million acres in 2020. That's an increase of 30% in just 
eleven years.

   Many specialty crops are insured at rates similar to row 
        crops such as corn, soybeans, wheat, and cotton. For example, 
        70% of apple and 71% of almond acres are insured, as well as 
        77% of cranberries.*
---------------------------------------------------------------------------
    * Editor's note: their is a discrepancy in the submitted one-pagers 
by Mr. Haney and the corresponding one-pagers on the Crop Insurance and 
Reinsurance Bureau, Inc. advocacy website Crop Types (https://
cropinsurance.org/wp-content/uploads/2022/05/2022-Crop-Insurance-Myths-
v.-Facts-Crop-Types.pdf) and Disaster Assistance (https://
cropinsurance.org/wp-content/uploads/2022/05/2022-Crop-Insurance-Myths-
v.-Facts-Disaster-Assistance.pdf). The chart entitled, Federal Crop 
Insurance Program Growth for Specialty Crops follows the chart 
entitled, Specialty Crops with the Highest Total Liabilities, 2020. In 
Mr. Haney's consolidated submission this chart is embedded in the 
Disaster Assistance one-pager's second bullet.
---------------------------------------------------------------------------
Specialty Crops with the Highest Total Liabilities, 2020


          Source: Risk Management Agency, USDA.
Federal Crop Insurance Program Growth for Specialty Crops


          Source: Risk Management Agency, USDA.
                              attachment 9
Crop Insurance Myth vs. Fact: Disaster Assistance
          Myth: Farmers don't need crop insurance, because when 
        disaster strikes, they can simply turn to ad hoc disaster 
        assistance.
          Fact: Crop insurance provides certainty to farmers and their 
        lenders that ad hoc disaster assistance cannot provide because, 
        by definition, ad hoc assistance is never a certainty and can 
        change from year to year. Crop insurance is the timeliest 
        component of the farm safety net, with payments made 
        immediately after a loss is incurred.

   If a farmer has a loss, they will typically receive a crop 
        insurance payment within 30 days of a finalized claim through 
        an efficient private-sector delivery system. Other types of 
        assistance can often take a year or more after a disaster 
        before a farmer receives a payment.

   Crop insurance payments are tied directly to the loss 
        incurred by a farmer and the coverage level purchased by the 
        farmer. The deeper the loss, the higher the indemnity payment a 
        farmer will receive.

   Crop insurance can provide coverage to more than 125 
        commodities every year and covers various types of losses. 
        Whole farm revenue protection is also available for those crops 
        that do not have an individual policy available. This gives 
        crop insurance more breadth and depth than any other component 
        of the farm safety net.

   Crop insurance is created to be flexible to meet the 
        changing needs of America's farmers and ranchers. Crop 
        insurance has the regulatory flexibility to make certain 
        adjustments mid-season to address extreme weather events. New 
        policies can be continuously developed to fill gaps identified 
        in the program's protection.

   Often, crop insurance and ad hoc disaster assistance work 
        together for farmers who purchase insurance to be eligible for 
        higher ad hoc assistance payments. Crop insurance purchase 
        requirements are also typically included in Congress's ad hoc 
        disaster assistance bills.
                             attachment 10
Crop Insurance Myth vs. Fact: Farm Income
          Myth: Most agricultural production comes from large farms 
        that can manage their own risk.
          Fact: Farmers of all sizes use crop insurance, and crop 
        insurance provides meaningful collateral to lenders when 
        farmers seek operating capital.

   Crop insurance enables farmers, both big and small, to 
        manage their risk in a way that helps them invest in and 
        improve their operations. Many farmers would not be able to 
        afford to do this if they were forced to self-insure and could 
        not qualify for loans.

   Including farms of all sizes in the crop insurance program 
        diversifies the risk of the program across a greater number and 
        variety of farms, which improves the actuarial soundness of the 
        overall program. This soundness is a benefit to all, including 
        taxpayers.

   During these uncertain times, crop insurance is even more 
        important to farmers looking to lenders for the operating 
        capital required to continue to farm. Lenders look at crop 
        insurance as a form of collateral for an operating loan, and it 
        can enhance a prospective borrower's capacity to qualify for a 
        loan.

   Although crop insurance payments are a small percentage of 
        some farmers' overall household income, in times of crop loss 
        and economic downturn, receiving a crop insurance indemnity 
        payment can make the difference between being able to continue 
        farming for another year or not.

          ``We utilize crop insurance when incidents happen that are 
        completely beyond our control. And we are thankful we have it 
        because it's saved our lives. Crop insurance has helped my dad 
        sleep better at night.''
                              Alicia Abendroth (New York Apple Farmer).
                             attachment 11
Crop Insurance Myth vs. Fact: Harvest Price
          Myth: Harvest price coverage eliminates all risk from farming 
        and is unnecessary.
          Fact: Even with the harvest price coverage, farmers must meet 
        a deductible for loss and pay a premium for harvest price 
        coverage. Risk still exists for these farmers. The harvest 
        price coverage simply provides these farmers with the 
        replacement value for their lost crop.

    The harvest price coverage in crop insurance policies provides 
protection on lost production at the higher of the price projected just 
before planting time or the price at harvest.

   There are two very practical and common scenarios in 
        agriculture that make harvest price coverage a critical risk 
        management tool.

     Harvest price coverage is critical to farmers who use 
            forward contracting as another means of mitigating their 
            risk. If there is a natural disaster that results in a 
            large drop in the production of a commodity, the price of 
            that commodity is likely to increase sharply. Many farmers 
            enter forward contracts before harvest to sell a portion of 
            their production at a set price. Usually, these contracts 
            pay the farmer for the production they deliver after 
            harvest based on harvest prices. If the farmer loses the 
            crop, they are still obligated to deliver under the forward 
            contract. But since the crop is lost, the farmer would have 
            to buy the commodity on the open market at the harvest 
            price or financially settle at the harvest price to meet 
            their contractual obligations. The purpose of harvest price 
            coverage is to provide the farmer with sufficient funds to 
            settle the forward contract. Without the harvest price 
            coverage, the farmer's loss would be indemnified at the 
            lower price projected at the start of the season.

     Harvest price coverage is critical to livestock 
            producers who grow their feed. Harvest price coverage 
            ensures these farmers will have the funds to afford the 
            higher feed costs when they need to purchase feed.

       Caleb Ragland, a farmer from KY, said, ``Harvest price 
            coverage in crop in-
              surance proved its importance during the 2012 drought on 
            my farm. 
              Having forward contracted much of my expected corn 
            production, I was 
              forced to buy back all my contracts, so I had enough corn 
            to feed my hogs. 
              Without the harvest price option, I would have faced a 
            devastating choice 
              between selling my hogs or paying the $2 a bushel 
            difference in my con-
              tracts and the current market price from my operation 
            budget.''

   Think of harvest price coverage like the replacement value 
        for car insurance, as explained in a popular insurance 
        commercial: *
---------------------------------------------------------------------------
    * Liberty Mutual, 2016 https://www.youtube.com/watch?v=5twwX-zoOv4.

     ``You totaled your brand-new car. Nobody's hurt, but 
            there will still be pain. It comes when your insurance 
            company says they will only pay \3/4\ of what it takes to 
            replace it. What are you supposed to do? Drive \3/4\ of a 
            car? Now, if you had . . . new car replacement, you'd get 
            your whole car back. I guess they don't want you driving 
            around on three wheels. Smart.''
                             attachment 12
Crop Insurance Myth vs. Fact: Improper Payment Rate
          Myth: Waste, fraud and abuse are rampant in crop insurance.
          Fact: According to the Risk Management Agency (RMA) at USDA, 
        the improper payment rate for crop insurance for fiscal year 
        2021 was 1.41percent, which is less than the average rate for 
        all government programs (4.67 percent). Actual fraud is only a 
        small fraction of improper payments in the program.

    All participants in crop insurance--farmers, agents, crop insurance 
companies, reinsurers, and taxpayers--are dedicated to detecting and 
eliminating fraud, waste, and abuse in the program.

   Crop insurance uses data mining to identify potential 
        improper payments and also uses spot-checking of the work of 
        insurance agents and adjusters.

   Because private crop insurance companies have money at stake 
        with every policy written, these companies also spend money on 
        training and monitoring.

   Actual fraud rates in the program are even lower than the 
        improper payment rate reported by RMA. Improper payments are 
        defined as over-payments, under-payments, and simple errors 
        such as inadequate documentation. The improper payment 
        designation does not necessarily include the existence of any 
        intent to defraud the government.

          Classification of Improper Payments Fiscal Year 2020
------------------------------------------------------------------------
                                  % of
       Types of Errors          Improper    Reason for Improper Payments
                                Dollars
------------------------------------------------------------------------
Production Reports--Support           26%  Production evidence did not
 Units                                      support unit structure
                                            certification.
Production Records--                  20%  Unacceptable, unverifiable,
 Acceptability                              and/or missing Production
                                            records.
Audit of Actual Production            18%  Production evidence did not
 History                                    match the actual yields
                                            certified.
Were Insurability Conditions          16%  Insurability criteria was not
 Met                                        met, did not meet the
                                            definition for insurability.
Share                                  8%  Incorrect share reported,
                                            records do not support
                                            reported share.
Production/Revenue to Count            4%  Transcription errors,
                                            production to count not
                                            determined correctly,
                                            allocation errors.
Uninsured Causes                       2%  Adjuster did not follow
                                            correct procedures for
                                            assessing uninsured causes
                                            of loss.
Certification Form                     2%  Incomplete certification
                                            form, certification form not
                                            completed.
Application Signature                  2%  Application not signed
                                            timely, not signed by
                                            someone with proper
                                            authority.
Additional Error types                 2%  All other errors.
------------------------------------------------------------------------

                             attachment 13
Crop Insurance Myth vs. Fact: Indemnity Payments
          Myth: Farmers get crop insurance indemnity payments every 
        year, and the program is so rich that farmers farm the program 
        instead of the ground.
          Fact: Farmers can pay crop insurance premiums year in and 
        year out without receiving a single indemnity payment. In fact, 
        on average, only about 30 percent of policies pay an indemnity 
        in any given year. Any farmer who tries to make a living 
        ``farming'' crop insurance isn't going to be in business very 
        long.

    Since 1989, crop insurance policies have covered nearly $2.1 
trillion in liabilities to guard against losses. During that same time, 
total premiums * for crop insurance were $189 billion, and farmers were 
paid $157 billion in indemnities. By statute, the loss ratio must be 
equal to or less than 1.0.
---------------------------------------------------------------------------
    * This includes farmer paid premium as well as the premium 
discount.

   Indemnity payments are made to farmers only when production 
        or price disruptions result in crop yields or revenues below 
        those guaranteed by the insurance contract. When production or 
        revenues are above those guaranteed by a crop insurance policy 
        purchased by a producer, an indemnity payment is not made, but 
        the farmer must still pay the premium due to the insurance 
---------------------------------------------------------------------------
        provider.

   Similar to weather risks, the cost of indemnities paid vary 
        from year to year. In 16 of the last 20 years, total crop 
        insurance premiums have exceeded indemnities paid to farmers.
Polices Earning Premium Compared to Policies Receiving Indemnity


          Source: Risk Management Agency, USDA.
Total Premium Compared to Total Indemnity


          Source: Risk Management Agency, USDA.
                             attachment 14
Crop Insurance Myth vs. Fact: Means Testing
          Myth: Means testing, such as adjusted gross income (AGI) 
        limits and premium assistance caps, will keep large, wealthy 
        farmers from receiving assistance they do not need.
          Fact: Reducing participation from any group of farmers will 
        change the premiums for all farmers because it will change the 
        risk pool. Crop insurance is, by statute, an actuarially sound 
        program, which means more participants and more acres in the 
        program, the more the risk will be spread--keeping premiums and 
        costs down for all participants.

   USDA has called a cap on premium support ``ill-advised,'' 
        noting regions with high-value crops (such as fruit, vegetable, 
        and organic crops), large-acreage farms, and areas with a 
        higher risk of crop loss would be hit especially hard. USDA has 
        noted that North Dakota, South Dakota, Texas, Minnesota, 
        California, Arizona, Mississippi, Utah, and Hawaii would all 
        bear a disproportionate share of the effects of a cap on 
        premium support.

   Keith Coble and Brian Williams, economists with Mississippi 
        State University, found that ``large farms are a less risky 
        sub-population in the insurance pool. Average per acre 
        indemnities decline rapidly for both corn and soybean acres as 
        the size of the insurance policy increases.'' Removing the less 
        risky farmers from the risk pool would drive up the costs for 
        everyone who remains in the program.

   Even though crop insurance opponents note that only a small 
        number of farmers would be affected by an AGI limit, it's 
        important to keep in mind that these farmers often farm a large 
        number of acres. It is the acres impacted by an AGI limit, not 
        the number of producers, that will drive changes to premiums 
        for all farmers. 
Distribution of Farms, Value of Production, and Farm Assets 2018


          Source: Economic Research Service, USDA.*
---------------------------------------------------------------------------
    * Editor's note: their is a discrepancy in the submitted one-pagers 
by Mr. Haney and the corresponding one-pagers on the Crop Insurance and 
Reinsurance Bureau, Inc. advocacy website Means Testing (https://
cropinsurance.org/wp-content/uploads/2022/05/2022-Crop-Insurance-Myths-
v.-Facts-Means-Testing.pdf) and Multiple Risk Management Strategies 
(https://cropinsurance.org/wp-content/uploads/2022/05/2022-Crop-
Insurance-Myths-v.-Facts-Multiple-Risk-Management-Strategies.pdf). The 
chart entitled, How Risk Pools Work follows the chart entitled, 
Distribution of Farms, Value of Production, and Farm Assets 2018. In 
Mr. Haney's consolidated submission this chart is embedded above the 
Multiple Risk Management Strategies one-pager's first paragraph.
---------------------------------------------------------------------------
How Risk Pools Work


                             attachment 15
Crop Insurance Myth vs. Fact: Multiple Risk Management Strategies
          Myth: Crop insurance discourages farmers from using other 
        risk management tools such as market hedging, cover crops and 
        off-farm income. The use of these other risk management tools 
        without crop insurance would be enough risk management for 
        farmers.
          Fact: Farming is risky, so farmers use a multitude of risk 
        management strategies to manage the enormous hazards they face 
        every year when they plant a crop. However, crop insurance is 
        the only risk management tool that farmers can literally take 
        to the bank to prove their ability to pay back annual operating 
        loans required to keep the farm going.

    Because each farm is unique, each farm's types of risk management 
strategies can vary, but crop insurance is a critical tool in a 
farmer's toolbox. Here are a few examples of the other risk management 
tools utilized by farmers:

   The use of market hedging has increased significantly since 
        2000, and approximately \1/4\ of all corn, soybeans, and wheat 
        are hedged.* Additionally, farmers of other commodities often 
        utilize production or marketing contracts to lock in prices for 
        their goods. USDA estimates that more than \1/3\ of the value 
        of all agricultural production is grown under contract, with 
        this risk management tool being most utilized in livestock, 
        dairy, sugar beets, fruit, and processing tomatoes.
---------------------------------------------------------------------------
    * Economic Research Service, USDA.

   Most farms in the United States already rely heavily on off-
        farm income to maintain their operations and carry the enormous 
        risk that comes with farming. According to USDA, recent 
        increases in total farm income ``largely reflect greater income 
        from off-farm sources, where the majority of farm households 
---------------------------------------------------------------------------
        earn most, if not all, of their income.''

   Cover crops were planted on more than 20 million acres of 
        U.S. farmland in 2020, a nearly 33 percent increase from 2017. 
        The 2018 Farm Bill also clarified the ability to plant cover 
        crops on acres that are insured through the Federal crop 
        insurance program. Planting cover crops can help manage risk in 
        a variety of ways, including the improvement of soil health and 
        an increased ability of soil to hold moisture in dry regions. 
        Cover crops are gaining popularity among producers as 
        information on benefits spread and carbon sequestration 
        contracts become more prevalent.
---------------------------------------------------------------------------
     2019-2020 National Cover Crop Survey, SARE, USDA.

   Conservation tillage practices are utilized on approximately 
        70 percent of soybean, 65 percent of corn, 67 percent of wheat, 
        and 40 percent of cotton acres in the United States. These 
        practices help manage risk by reducing topsoil erosion and 
        improving soil health.
---------------------------------------------------------------------------
     Economic Research Service, USDA.

   Clearly, the existence of crop insurance is not keeping 
        farmers from utilizing other risk management strategies. 
        However, cover crops and conservation tillage are not going to 
        be enough for lenders who are looking to pencil out operating 
        loans.
                             attachment 16
Crop Insurance Myth vs. Fact: Market Distortions
          Myth: Crop insurance is market distorting and discourages 
        farmers from following market signals.
          Fact: Markets do not respond to crop insurance; crop 
        insurance responds to markets. Crop insurance uses current-
        season market prices to determine coverage, losses, indemnities 
        and premiums.

   Crop insurance policies do not use an artificial price to 
        determine coverage, losses, indemnities, or premiums. As 
        designed today, crop insurance uses real-time tools such as 
        various commodity exchange prices to determine coverage, 
        losses, indemnities, and premiums. In other words, markets do 
        not respond to crop insurance; crop insurance responds to 
        markets.

     For example, if corn prices are comparatively higher 
            than soybean prices, crop insurance will reflect that 
            market dynamic. Crop insurance is a reflection of the 
            market and is available for all crops.

   Crop insurance is available to all types of farms in all 
        parts of the country, so the availability of crop insurance for 
        one commodity and not another is also not a determining factor 
        when farmers make planting decisions.

     More than 125 commodities are covered with individual 
            crop policies, from corn to cantaloupe to cotton. There are 
            more than 127,000 crop and county combinations for policies 
            across the United States, providing multiple options to 
            farmers.

     For commodities that do not have a commodity-specific 
            policy available in a given county, the 2014 Farm Bill 
            created a Whole Farm Revenue Policy that allows all farmers 
            of all commodities to have a crop insurance option.

   All crops get the same premium discounts for policies, so 
        crop insurance does not artificially incentivize the production 
        of one commodity over another commodity.

   Per the 2014 Farm Bill, new crop insurance products proposed 
        for sale must go through a consultation process specifically to 
        assess if there would be a detrimental impact on the marketing 
        and production of a commodity if a new policy is approved.

     The process for approving new crop insurance policies 
            requires approval by the Federal Crop Insurance Corporation 
            Board, which includes the Chief Economist at the USDA, 
            whose mission is to advise on the economic implication of 
            agricultural policies and programs.

   New technologies, data mining algorithms, and extensive 
        training and education programs for agents and adjusters are 
        all used to ensure crop insurance is being used properly as a 
        risk management tool and to identify fraudulent claims. These 
        rigorous checks on the program also help to ensure that farmers 
        are not farming for the program itself but for the market.

    The Chair. Thank you very much, Mr. Haney.
    Ms. Fowler, please begin when you are ready.

STATEMENT OF KATHY FOWLER, OWNER, FOWLER AGENCY, LLC, MEMPHIS, 
                TX; ON BEHALF OF CROP INSURANCE 
                   PROFESSIONALS ASSOCIATION

    Ms. Fowler. Good morning, Chair Bustos, Ranking Member 
Scott, and Members of the Subcommittee. My name is Kathy 
Fowler. I am a crop insurance agent from Memphis, Texas. I grew 
up on a farm and have been actively engaged in agriculture all 
my life. I am passionate about what I do, and I believe in the 
products that I sell to farmers and ranchers.
    I am grateful and honored to be in this room today 
testifying and proud to talk about the amazing success that 
crop insurance has had. I am testifying today on behalf of 
CIPA, an organization of crop insurance agents with a presence 
in each of the 50 states. CIPA's mission is to continue to 
improve crop insurance because we know the vital importance of 
U.S. agriculture. Agents talk to producers every day and they 
see firsthand the challenges that confront our farm and ranch 
families that we serve.
    Agriculture has always been a tough business, whether it is 
adverse weather conditions, volatile markets, or bad actors on 
the broad scene that plague our farmers. It is even tougher 
today. Actually, the stakes have never been higher, and the 
margins are tighter and tighter. I talk about trade wars, the 
pandemic, inflation, and other very real challenges. But what 
is far more real to me is when I sit down across from my desk 
and talk to a young farmer, who is distraught about the drought 
situation that we are enduring today and how do I figure out 
how to make a crop.
    Farmers and ranchers all across the regions consistently 
say we couldn't do without crop insurance. Crop insurance does 
more than just cover losses. It enables the producer to secure 
credit, to better market their crops, and to make the needed 
investments to improve their farm and ranch and build their 
soils. This is especially true for young and limited-resource 
farmers.
    So let's just take a look at some of the stats with the 
crop insurance. Since 2000, the farmer-paid premium has 
increased six-fold. We now insure 130 crops. The acres insured 
have risen from 200 million to 450 million acres, and the total 
protection has shot up from $35 billion to $200 billion. With 
this growth, our performance has remained consistent. The 
average loss ratio is well into the statutory requirement of 
1.0, actually meaning that this process and program is 
actuarially sound. A&O monies that are allocated for delivery 
have sharply declined as a percent of the total premium 
written.
    So what does this all really tell us in what we are doing? 
I think it proves two things. Number one is we have a really 
good product, and kudos to RMA and this Committee who have 
worked on this program, and also our delivery system through 
AIPs and crop insurance agents for taking care of business. 
These are great stats, and we are proud of our efficiency.
    But also we want to be clear where some problems exist. 
CIPA noted flawed design on the A&O cap and the 
disproportionate impact that it had on the specialty crop area. 
Thankfully, the issue has been addressed in the House ag 
approps bill, and I want to thank Chairman Bishop and Ranking 
Member Harris and many of you for working to patch these holes.
    With that, I want to respectfully present some dos and 
don'ts that might serve as a guide as you prepare for the 2023 
Farm Bill debate. Don't be tricked into pay limits and AGI 
means-testing on crop insurance under the idea that this will 
help small farmers because it won't. It will hurt them by 
raising their premiums and removing the good risk from the risk 
pool. Don't cut premium cost-share. Increasing premiums would 
move the crop insurance program backwards. Don't permit ad hoc 
disasters or permanent disasters to undermine crop insurance. 
You don't want to discourage producers from using their own 
risk tools. Don't try to mix policy objectives like climate 
into crop insurance. Crop insurance is meant to protect the 
farmer's profitability. When profitable, good conservation will 
follow.
    Let's talk about the dos. Do have high expectations of crop 
insurance and work with us in building the program to achieve 
even more. We certainly want you to support the 508(h) process 
which meets these changing needs. Do work to help farmers 
purchase higher levels of insurance. They need more coverage. 
Do fix the problem facing specialty crop areas and improve the 
use of crop insurance data for the benefit of farmers.
    Last, in closing, please make sure that we make a case for 
additional funds for the next farm bill. The ad hoc disaster 
was certainly needed, but the money can be better used. Write a 
budgeted investment. You can strengthen the farm safety net and 
crop insurance to benefit farmers, ranchers, and taxpayers. 
Thank you for what you do for this great nation, and I look 
forward to your questions.
    [The prepared statement of Ms. Fowler follows:]

Prepared Statement of Kathy Fowler, Owner, Fowler Agency, LLC, Memphis, 
       TX; on Behalf of Crop Insurance Professionals Association
    [Chair] Bustos, Ranking Member Scott, and Members of this 
Subcommittee, thank you for the opportunity to provide testimony today 
concerning the cornerstone of the farm safety net: Federal Crop 
Insurance.
    My name is Kathy Fowler, and I am an independent agent and 
business-owner from Memphis, Texas. The Fowler Agency was started in 
1988, and heading into our 35th sales year, we serve approximately 350 
farm and ranch families across roughly 40 counties primarily in 
Oklahoma and Texas. The Fowler Agency has served some farm families now 
for three generations and has more young farmers and ranchers than ever 
before.
    I am here today on behalf of CIPA--the Crop Insurance Professionals 
Association--the nation's top crop insurance agents. CIPA works hard 
every day to bring together all segments of the industry and our 
nation's farm and ranch families in order to improve, promote, and 
protect Federal Crop Insurance.
    CIPA agents write crop insurance in all 50 states, and we take 
great pride in our work. Our goal is to walk alongside our farmer and 
rancher customers, helping them through all of their critical financial 
and risk management decisions. While our job is certainly to counsel 
our farmer and rancher customers about risk management options under 
crop insurance, we believe our duty goes beyond this: at CIPA, we take 
a very holistic approach to helping our producers with all of their 
financial and risk management needs.
    Our focus and pride, individually and collectively as an 
organization, is doing our job the right way--fully knowing our 
customer's needs and the risk management options available to them and 
doing so with the highest ethical standards in order to meet each 
season's needs and to advance crop insurance for the future.
    I am honored and humbled to be here today. The role that our farm 
and ranch families play in providing for our country's basic needs is a 
vital one. And, in turn, the policies crafted by this Subcommittee and 
the full Committee on Agriculture that support our producers are also 
essential.
    It is a bit overwhelming for this farm kid from Memphis, Texas to 
appear before this important Subcommittee but I hope my testimony--
based on my 35 years of experience as an agent and a lifetime of 
experience as a producer interacting with hard working farm and ranch 
families--will be a help as you prepare for the upcoming farm bill 
debate.
Importance of the Farm and Ranch Sector and the Growth in Crop 
        Insurance
    We have come through a lot in the last few years.
    Through a period of extreme market volatility resulting from trade 
wars and the global pandemic, most Americans have become much more 
aware of the interconnectedness of the world--and the extraordinary 
importance of safeguarding fundamental sectors, including agriculture.
    U.S. farmers have endured this incredible volatility in amazing 
ways--carrying on and boosting productivity as a ``critical industry'' 
even when much of the world was shutting down.
    And, now, with a relatively poor crop in the Southern Hemisphere 
and the war in Ukraine threatening a global food crisis ahead, there 
can be no doubt that U.S. farm and ranch families will be called upon 
once again to step up to the plate and do all that we can to feed a 
growing and hungry world, while also clothing and fueling many both at 
home and abroad.
    [Chair] Bustos, Ranking Member Scott, and Members of this 
Subcommittee, I submit to you that Crop Insurance is the most important 
tool that our farm and ranch families have at their disposal for making 
the kinds of investments and taking on the level of risks that we all 
need them to in order to meet the growing demands the country and the 
world place on them and to carry on the legacy of their family farms 
and ranches.
    Crop Insurance empowers farm and ranch families to purchase 
equipment and inputs, to plant the seed, to nurture and harvest their 
crops, to raise their livestock, and to get to market with confidence 
because they have something as basic as insurance--something they would 
not have without Federal Crop Insurance. We have Federal Crop Insurance 
today because the risks of farming and ranching are so great that 
multiple peril crop insurance available to all comers would otherwise 
be prohibitively expensive and therefore unavailable.
    Very notably, crop insurance fills the role of providing collateral 
to agricultural lenders. Without crop insurance, agriculture would 
likely have to return to asset based lending which contributed to the 
farm financial crisis of the mid-1980s. We certainly do not want to 
repeat that crisis which impacted the economies of even the largest 
U.S. cities. Crop insurance is especially vital to young and beginning 
farmers and ranchers, socially disadvantaged producers, producers 
farming new crops, and producers farming or ranching in areas that 
frequently experience drought.
    Crop Insurance offers producers the ability to be more nimble and 
dynamic in dealing with a highly volatile market and in the face of an 
increasingly mercurial Mother Nature. Thanks to crop insurance, the 
American farmer and rancher is much better positioned to meet the 
challenges ahead in feeding, clothing, and fueling the country and a 
great many around the world.
    Crop Insurance's vital importance has not grown overnight. It has 
developed over time thanks in no small part to the steady leadership 
and stewardship of this Subcommittee and the full Committee on 
Agriculture.
    From its inception in 1938 until 1980, Federal Crop Insurance 
barely limped along.
    But, in 1980, when the House Agriculture Committee led the way to 
creating a public-private partnership with private companies and agents 
selling and servicing policies and private claims adjustors settling 
claims, crop insurance began its meteoric rise.
    The 1994 crop insurance reforms, advanced by this Committee, and 
the approval of revenue insurance by the Department of Agriculture in 
the mid-1990s continued to propel crop insurance forward.
    And, finally, the 2000 crop insurance reform legislation, also 
advanced by this Subcommittee and the House Agriculture Committee, 
became the legislative capstone of the remarkable achievement that 
Federal Crop Insurance is today.
    As I noted earlier, I am from Memphis, Texas which is also the 
childhood home of a former Chairman of the House Agriculture Committee, 
Rep. Larry Combest, who, along with the Ranking Member, Rep. Charlie 
Stenholm, worked hand in glove in leading the effort to develop and 
pass the 2000 crop insurance reform--making crop insurance more dynamic 
so it could better meet the ever changing needs of producers as they 
work to meet the ever changing needs of the country and the world.
    When that bill--the Agricultural Risk Protection Act of 2000--
passed, total premium under crop insurance was just over $2 billion, 
with 200 million acres insured and with total coverage or liability at 
around $35 billion.
    This year, farmers and ranchers will spend more than $6 billion out 
of their own pockets, to insure more than 450 million acres with what 
is now approaching $200 billion in total coverage or liability. Thank 
you all so much for serving on the Subcommittee and the Committee that 
made this happen. You are a part of a legacy that has saved millions of 
American farm and ranch families.
    The charts below illustrate this remarkable growth. It is something 
we, as CIPA--your boots on the ground--take a great deal of pride in. I 
hope it is also something that you will take great pride in and 
continue to steward this success story, going forward.

 
 
 
              Acreage                          Total Liability
 

                                     
                                     
Total Premium


    A couple of final points before I leave my introductory remarks.
    First, while indemnities in crop insurance are an important measure 
of protection and support provided to farmers and ranchers in their 
time of need, and while a timely and efficient indemnification of 
losses is also fundamental to companies and agents competing for 
producer business through exceptional service, it is not a good measure 
of the economic value of crop insurance to the farm sector or to our 
nation as a whole. Indemnities grossly understate the value of crop 
insurance to producers and the country.
    Nevertheless, I do provide the following chart that illustrates the 
nationwide indemnities paid, as well as the loss ratios over time. This 
chart illustrates that crop insurance has responded well in times of 
need, while also balancing out the needs of particular regions in any 
given year in order to meet the statutory loss ratio of 1.0 which is 
designed to protect the taxpayer who is also investing in crop 
insurance.
Yearly Indemnities and Loss Ratio


    But, again, this illustration is a low bar in terms of measuring 
crop insurance's overall value to producers and the country. The best 
measure of the actual full value of crop insurance is the broader 
economic impact of the producer investments protected and dollars 
leveraged in order for producers to sustain and improve their 
operations. This has value well beyond the farm to communities across 
the country.
    While CIPA does not currently have a quantitative assessment on 
this broader value, we believe economic analysis to measure the full 
effect of covering, through crop insurance, nearly $200 billion in 
producer investment that is at risk would be very useful indeed. What 
precisely has this protection done for agriculture in terms of 
advancing technology adoption, implement and storage sales, investment 
in conservation, and so on? We are confident that, in the end analysis, 
a powerful return on taxpayer dollars invested would be evidenced. As 
we near the 2023 Farm Bill debate, CIPA will work to ensure that the 
full benefit of crop insurance is quantified through expert economic 
analysis.
    Second, again, while not a good measure of the overall value or 
economic value of crop insurance, indemnities paid are a good measure 
of efficiency. Here, we believe it is remarkable that total indemnities 
paid consistently exceed total taxpayer cost.
    The following table compares total indemnities paid per year to the 
total Congressional Budget Office (CBO) costs associated with crop 
insurance (including premium cost-share, financial risk-sharing with 
private-sector companies, and administrative and operating (A&O) 
expense reimbursement over the past 10 years).

--------------------------------------------------------------------------------------------------------------------------------------------------------
   (Dollars in                                                                                                                               Average per
    Millions)         2012       2013       2014       2015       2016       2017       2018       2019       2020       2021      Total        Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
       CBO Cost       $4,810    $13,734     $8,244     $7,280     $4,157     $4,208     $6,445    $12,290     $9,358     $4,591    $75,117        $7,512
 CY Indemnities      $17,490    $12,108     $9,146     $6,345     $3,934     $5,445     $7,336    $10,682     $9,181     $9,586    $91,254        $9,125
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Thus, under crop insurance, we have a tailored risk-management tool 
that leverages investment in the farm and ranch and which, on a 
national basis, is consistently paying 20 percent more than the total 
taxpayer investment in the program. This is a remarkable record of 
success.
    Third, it is important to note the direct impact our crop insurance 
delivery system has on rural communities across the country. Based on 
industry data, more than 20,000 people are employed in the sales and 
servicing of crop insurance nationwide--including another 12,000 in 
office staff; some 5,000 claims adjusters; and more than 2,000 staff 
among the 14 current companies. This workforce dots the small- and mid-
sized communities throughout the United States. These are folks who 
keep rural communities economically viable not only by keeping farm and 
ranch families--who are often the economic lifeblood of rural 
communities--in business but by directly paying good salaries and 
wages, and good benefits, to thousands of employees.
    The data on crop insurance delivery also shows a remarkable 
positive trend toward greater efficiency. The chart below shows total 
A&O costs per acre and as a percentage of premium paid overtime. There 
are some problems in this area that simply must be addressed and 
addressed quickly--including the punitive impact of the 2011 cap on 
specialty crop policy A&O--but in the big picture it should not be 
overlooked that the agents, loss adjusters, and companies that deliver 
crop insurance to farmers and ranchers are doing so with incredible 
efficiency.
Total A&O Per Acre


Total Premium and Total A&O


Key Reasons for the Success of Crop Insurance
    As the Committee takes stock of the needs of producers and the 
policies that serve them, I want to briefly lay out three unique 
qualities of crop insurance that we, as CIPA, believe are critical to 
its success and serve as important guideposts for the future.

  1.  Crop insurance coverage is highly relevant to each farm and 
            ranch. When farmers or ranchers buy insurance, they tailor 
            coverage to the needs of the farm or ranch, and they know 
            they can rely on that contract. Crop insurance policies are 
            financial risk management tools that provide security and 
            peace of mind unique to each family farming or ranching 
            operation so that producers can take care of their land and 
            crops and make investments that will allow them to farm or 
            ranch better each year. Crop insurance is all-inclusive, 
            serving all farm and ranch families. Coverage is based on 
            each producer's own history and risk profile, and producers 
            control how much risk, and which risks they want to cover. 
            By including all comers into Federal Crop Insurance and by 
            avoiding arbitrary restrictions on participation, the crop 
            insurance risk pool is vastly improved and this, in turn, 
            results in lower premiums paid by all producers. Policies 
            such as pay limits and adjusted gross income (AGI) means 
            testing on crop insurance may, at first blush, sound 
            favorable to smaller producers but such policies result in 
            the loss of good risk in the risk pool, resulting in higher 
            premiums for all producers who are left in the pool. In the 
            end analysis, this would harm small farmers and ranchers.

  2.  Crop insurance is dynamic, changing to meet the needs of 
            producers. As of 2021, Federal Crop Insurance policies were 
            available on 130 crops, often with multiple kinds of 
            insurance options available relative to these crops. These 
            options are owing to the good work of a very high quality 
            Risk Management Agency (RMA) staff in Washington and Kansas 
            City and to the private-sector which has brought forward, 
            through the 508(h) process, many new and important risk 
            management products. Across Republican and Democratic 
            Administrations, the Office of Management and Budget (OMB) 
            has recommended ending the risk management development 
            process. This would be a terrible mistake that would hurt 
            every farmer and rancher in the country, especially those 
            seeking to improve the quality of their coverage. 
            Thankfully, Congress has time and again shown the greater 
            wisdom in rejecting OMB's recommendations. Without such a 
            process, we would not have revenue products, area-based 
            products, margin coverage, special endorsements that cover 
            unique perils, and many other products--especially for 
            specialty crops--that might otherwise have no coverage at 
            all. As the law is currently written, crop insurance is 
            able to continue to adjust in order to better meet needs of 
            all producers, regions, and crops. This has long been and 
            should remain the goal.

  3.  The delivery system is responsive. As an agent, I compete for 
            business with other agents in my area, some of whom are 
            fellow CIPA agents who may be listening to this hearing 
            today. Generally, we all are on a level playing field--
            selling the same products at the same price--and so our 
            means of competing for market share are purely based upon 
            service. Thus, the delivery system, whether among agents or 
            among the companies, is highly focused on providing the 
            best service and always improving--including through better 
            understanding of customer needs, better information on what 
            is available to address those needs, better technology, and 
            better flow of data that ultimately redounds to the benefit 
            of the producer customer. Congress has never had to 
            allocate dollars for system upgrades for crop insurance 
            delivery because the private-sector does this. Because of 
            the competitive nature of the business, we have continually 
            implemented upgrades to better meet the needs of more and 
            more producers. This model has worked so well that now crop 
            insurance data is being used in the delivery of Farm 
            Service Agency (FSA) programs, and is even being used as 
            farmers participate is carbon markets to reduce greenhouse 
            gas emissions. In short, this public-private partnership in 
            Federal Crop Insurance, that was first established by 
            Congress back in 1980 and which makes the industry compete 
            for the trust of the producers we serve, has proved to be 
            highly, highly successful and it is a model that is worth 
            building upon.

    However, as briefly noted earlier in my testimony, there is a very 
urgent and serious problem in the structure of A&O for specialty crop 
policies that must be addressed. This flawed structure has resulted in 
deep, deep cuts in A&O relative to specialty crop policies in 2021 and 
very likely in 2022 even as workload relative to specialty crops has 
increased dramatically. This problem is further explained in a one-
pager that is attached to this testimony.
    We are very pleased that targeted relief to address this problem 
was included in the House version of the Agriculture Appropriations 
bill for FY 2023 with the strong, bipartisan backing of Chairman 
Sanford Bishop (D-GA) and Ranking Member Andy Harris (R-MD) and many 
Members of the Agriculture Appropriations Subcommittee and of the House 
Committee on Agriculture. Thank you very much for your strong support 
of specialty crop farmers and the agents and loss adjustors who serve 
them.
    Marva Ulleland, a CIPA Board Member and agent with Northwest Farm 
Credit based in Spokane, Washington, was originally supposed to testify 
today, but a conflict prevented her from making the trip.
    Marva works among agents who write insurance on hundreds of crops 
throughout the western United States. Insuring specialty crops is 
complicated, and the labor and time involved to cover such a book of 
business is very intensive. Many of these customers are smaller, more 
specialized, and historically underserved producers. Yet, because of 
the flawed design of the Standard Reinsurance Agreement's cap and its 
disproportionate impact on specialty crop A&O, the crop insurance 
policies for these producers and crops are being deeply cut--beyond 
levels that are sustainable.
    In my agency, where we are mainly writing policies for larger row 
crops, the cuts in A&O per policy are at least mostly offset by rising 
overall premiums that translate into higher gross A&O before the deep 
factor (40% reduction in 2021--anticipated 55% reduction in 2022). We 
are still facing cuts but nowhere near the cuts being felt on specialty 
crop policies where prices and overall gross premium have not kept 
pace. If left unaddressed, I fear these cuts to specialty crop policies 
will greatly undermine the risk management delivery system for 
specialty crops and the producers who grow them. It is worth noting 
that overall A&O has been frozen at 2015 levels, despite inflation, 
meaning crop insurance is doing more and more for less in terms of real 
dollars.
    This is why CIPA has made it a priority to address this problem 
facing specialty crops. This is why we worked with Chairman Bishop, 
Ranking Member Harris, Rep. Jimmy Panetta (D-CA), Rep. Kat Cammack (R-
FL), and other Members on a tailored fix that simply puts specialty 
crop A&O back to its 2020 levels, before the run up in row crop prices. 
And this is why we are so grateful to Chairman Bishop and Ranking 
Member Harris for including the provision in their legislation. If this 
provision becomes law, it will provide a bridge to the next farm bill.
Needs Looking Forward to the 2023 Farm Bill
    As we look beyond the basic structural qualities of crop insurance, 
and more at the particular needs of producers and how we might meet 
those needs in the most constructive ways, we would first turn to the 
question of supplemental disaster assistance and the prospects for a 
standing disaster program, going forward.
    It is and always has been the policy of CIPA that the producer 
comes first. The whole reason we are able to participate in Federal 
Crop Insurance is based on the need to support and provide meaningful 
risk management tools to our nation's farmers and ranchers. Therefore, 
on matters of how and whether to provide supplemental assistance, we 
are deferential to the wisdom of Congress, and simply want to be 
available to assist in the design and delivery of any program.
    With that said, however, CIPA firmly believes that of the options 
available to Congress in the next farm bill--providing ad hoc disaster 
assistance, authorizing a permanent disaster program, or further 
strengthening crop insurance to increase participation rates at higher 
levels of coverage in order to close deductibles--history has shown 
that strengthening crop insurance is the best route for the farmer, 
rancher, and the taxpayer.
    In regard to recent ad hoc programs, CIPA appreciates that the 2017 
Wildfire and Hurricane Indemnity Program (WHIP), the 2018 and 2019 
WHIP+, and 2020 and 2021 Emergency Relief Program (ERP) have all 
generally been crafted to build upon crop insurance and rely on crop 
insurance data rather than disincentivizing or undermining 
participation in crop insurance, though there is always room for 
improvement here.
    My agency staff has spent countless hours with our farmers and 
ranchers helping them understand the calculations and put together the 
paperwork needed to receive all that they qualified for. This is true 
of all agents who have worked cooperatively with local FSA staff to 
help get the job done. This is not the job we are paid to do as crop 
insurance agents, nor do we receive any compensation or liability 
protection for our work in this area, but it is part of the service 
that agents provide to the farm and ranch families we serve because we 
feel it is our duty to help wherever there is a need. Similarly, during 
the pandemic, when most offices were shutting down, agencies remained 
opened to help producers make decisions under crop insurance and to 
navigate program rules for pandemic-related assistance.
    In any event, ad hoc disaster programs have evolved over time, and 
some iterations have been better than others. The recent and ongoing 
ERP implementation has had its share of anomalies, but since its roll-
out in late May the general consensus among farmers and ranchers has 
been positive in that their experience is that the ERP implementation 
has been much smoother than that of WHIP+. Here, too, however, there 
are some exceptions which Senators John Thune (R-SD) and Amy Klobuchar 
(D-MN) lay out well in their recent letter to the Department of 
Agriculture. We hope that these issues can be addressed to avoid 
unintended and inequitable outcomes for producers. Out of all of the ad 
hoc programs approved by Congress since 2017, the best administered was 
the prevented planting top-up program in 2019 where crop insurance 
simply used our own data and delivery system to make the additional 
payments.
    CIPA understands there are complications with each approach, and we 
certainly understand the importance of program integrity and ensuring 
the data and payments are correct. We also appreciate the trend toward 
using crop insurance data and delivery systems for the implementation 
of disaster programs, and would only ask that we be consulted in future 
deliberations as to how efficiencies and better accountability can be 
achieved.
    As to whether additional ad hoc support should be provided, CIPA 
would note that the political response by Congress in providing 
additional aid in response to natural disasters is consistent with what 
we perceive as a real need of producers on the ground.
    The business of farming and ranching is increasingly involving 
higher and higher stakes and tighter and tighter margins. With 
increasing frequency of severe weather and market volatility, most 
farmers and ranchers very much wish to reduce their deductibles with 
higher levels of coverage. Crop insurance is making great strides in 
this area with products such as the Supplemental Coverage Option, 
Enhanced Coverage Option, Stacked Income Protection Plan, Margin 
Protection, Hurricane and Wind Index, and so forth. And, one of the 
greatest areas of growth in crop insurance is coverage for our dairy 
farmers and livestock producers. Building anything worthwhile takes 
time and effort and this is true in the case of crop insurance. But 
CIPA believes strongly that continued investment and growth in crop 
insurance to optimize coverage for all producers, all crops, and all 
regions of the country is the best path forward for farmers, ranchers, 
and taxpayers. History demonstrates that this approach provides 
eminently greater certainty and control to producers in managing their 
risk than ad hoc disaster or even a permanent disaster program. Crop 
insurance is simply the fastest, most efficient way of indemnifying 
producers for their losses and ensuring that the indemnification is 
precisely tailored to those losses. Maintaining and strengthening 
premium support and the development of new and innovative policies to 
mitigate unique risks are two avenues to achieving stronger crop 
insurance.
    CIPA understands that funding will be a limiting factor in the next 
farm bill, just as it has been with every farm bill in the past. But we 
also believe that the cuts made in the 2014 Farm Bill that carried into 
the 2018 Farm Bill have rendered U.S. farm policy incapable of meeting 
the needs of U.S. producers.
    For this reason, CIPA supports strengthening the farm safety net to 
ensure that the 2023 Farm Bill is up to the task of supporting our 
nation's farm and ranch families--and the national security interest of 
food, fiber, and fuel independence.
    We support a strong Crop Insurance Title that helps farmers weather 
what Mother Nature and market volatility unleash. We support a stronger 
Commodity Title that provides a safety net to mitigate the impacts of 
high and rising foreign subsidies, tariffs, and non-tariff trade 
barriers. And we support a strong Conservation Title that provides 
conservation cost-share assistance to help producers continue to 
advance soil health, water and air quality, wildlife and wildlife 
habitat, and other important natural resource and conservation 
objectives. In regard to conservation, it is worth noting that farmers 
and ranchers must be profitable in order to carry out important 
conservation initiatives. Crop insurance is vital in this regard. There 
is from time to time a temptation to blur the lines between an 
actuarially sound Federal Crop Insurance and certain public policy 
objectives, such as promoting conservation. The prudent route is to 
keep crop insurance as purely insurance and address other public policy 
objectives separately. For instance, climate initiatives fit best 
within the conservation title to the farm bill. It is best not to mix 
program purposes because, in the end, it could weaken both mission 
areas rather thanstrengthen them.
    All titles to the farm bill are very important. However, combined, 
these three titles provide the basic safety net for farmers and 
ranchers, a safety net that still accounts for less than \1/4\ of 1 
percent of the total Federal budget. We believe our nation's farm and 
ranch families are a worthy investment and we would certainly support 
additional investments in these areas. A fully budgeted investment in 
these programs could very well obviate the need for future ad hoc 
assistance.
    The following chart demonstrates this budget reality, showing our 
average per year assistance to farmers in the past 5 years compared to 
the budget baseline going forward.
    In the case of Title [I], we believe a portion of the ad hoc 
dollars that were spent under the Market Facilitation Programs and the 
Coronavirus Food Assistance Programs could be allocated toward 
strengthening the Commodity Title. And, by the same token, we believe 
the roughly $3 billion per year that has been spent under the ad hoc 
programs of WHIP, WHIP+, and ERP could provide better, more equitable, 
and more reliable assistance if used to strengthen crop insurance.
Budget Baseline Reality


    Finally, moving beyond the topic of disaster assistance, we want to 
briefly touch on a few areas within crop insurance that we believe 
merit attention. These are outlined in the following bullets, and we 
look forward to working with you on these issues.

   We would specifically request that Whole Farm Revenue 
        Coverage be expanded. The current limit on coverage is too 
        narrow for the high-value specialty crops that use this 
        product. If the limit is maintained, it should be allowed to be 
        a band of coverage that can be placed at a lower level of 
        deductible.

   Relative to Prevented Planting (PP) coverage, many 
        improvements have been made but it still has problems. Care 
        must be taken to ensure the assistance is meaningful when 
        needed, but not excessive. It must work in prolonged drought 
        conditions (like those in CA currently) and in flooding 
        conditions alike with appropriate planting windows and dates.

   Regardless of budget allocations, we would encourage 
        Congress to continue to support a robust 508(h) submission 
        process. The 508(h) and other product development authorities 
        should be aggressively used to craft policies that provide all 
        producers, crops, and regions with optimal coverage, including 
        opportunities to close deductibles by purchasing higher levels 
        of coverage.
Conclusion
    Thank you again for this opportunity to offer testimony as you 
prepare for the 2023 Farm Bill.
    Again, I want to offer my sincere thanks for your careful 
stewardship and support of policies that support our nation's farm and 
ranch families.
    Please know how much we appreciate what you do.
    On behalf of all CIPA agents from all corners of our country--thank 
you and we look forward to working with you on strengthening Crop 
Insurance and U.S. farm policy.
                              [attachment]
Crop Insurance for Specialty Crops is At Risk
    The Problem: Crop insurance needs of specialty crop producers are 
growing--but resources to service specialty crop producers are 
plummeting. Crop insurance is the only safety net for specialty crop 
producers--but their closest advisors helping them manage rising risks 
are struggling to stay in the business. If left unaddressed, the 
squeeze is going to harm specialty crop producers because with 
diminished A&O the sales, servicing, and adjustment infrastructure will 
be badly damaged.
Specialty Crop A&O


    Background:

   The problem is the result of a flawed design in the 2011 cap 
        on administrative and operating (A&O) expense reimbursement 
        that affects the entire system.

   When commodity prices for major crops like corn, wheat, 
        soybeans, or cotton, go up, the factor used to squeeze A&O 
        under the cap goes down, affecting all crops and 
        disproportionately affecting specialty crops.

   Specialty crop A&O decreased $31 million in 2021, even as 
        premium and acres covered increased. It is expected to decrease 
        an additional $23 million in 2022--a 2 year decrease of 37%.

   In the near-term, this is harming the small businesses that 
        deliver crop insurance to specialty crop producers, who face 
        rising fixed costs. While year-to-year marginal changes are 
        expected, sharp downward swings like the current one are 
        extremely difficult to manage in a single year and impossible 
        to manage over a sustained period of time. For 2021 and 2022, 
        the average agency serving specialty crop clients would have 
        grown roughly 5% in sales and volume, but had their 
        compensation slashed by 37% only because of the flawed design 
        of the A&O cap.

   In short, the volatility marked by steep decreases for 
        specialty crop areas is not sustainable and needs to be fixed, 
        especially in the midst of current inflation.
Yearly A&O Savings from the Cap


    The Solution:

   Legislation is needed to stabilize specialty crop A&O back 
        to the 2020 benchmark level. This is a targeted fix that will 
        not affect other crops or parts of the crop insurance industry.

   This legislative solution will not reopen the Standard 
        Reinsurance Agreement (SRA), nor cause any disruption to the 
        business of crop insurance.

   The solution will claw back a tiny fraction of the savings 
        achieved by the cap since 2011 to fix the disproportionate 
        negative impact the cap is having on specialty crops.

   This solution will not make anyone whole--but it will help 
        save a vital risk management tool for specialty crop producers 
        and the thousands of people who advise specialty crop farmers, 
        help them manage risk, and adjust their claims.

    The Chair. Thank you very much, Ms. Fowler.
    Mr. Offerdahl, please begin when you are ready.

  STATEMENT OF ALEX OFFERDAHL, CROP INSURANCE DIVISION HEAD, 
            WATTS AND ASSOCIATES, INC., BILLINGS, MT

    Mr. Offerdahl. Thank you. Thank you for this opportunity to 
discuss farmer-driven innovation in the Federal Crop Insurance 
Program through a feature referred to as the 508(h) process. I 
am the managing partner at Watts and Associates, and we are an 
agricultural economic research firm that specializes in crop 
insurance and analysis tools for farmers.
    W&A has been one of the most active participants in the 
508(h) process since its inception. We work primarily with 
farmer producer groups to develop new insurance programs 
tailored to their needs, their crops, and their regions. We are 
proud to have developed a sizable number of the 508(h) programs 
that have become important components of the overall 508(h) 
program. Federal crop insurance has succeeded because its 
unique design is a partnership between government and private 
industry. And 508(h) is a perfect example of this partnership.
    The 508(h) process was first added to the Federal Crop 
Insurance Program in 1993 as a special avenue through which 
farmers could propose new ideas that could be directly 
incorporated into the insurance program. Innovation through 
508(h) is not a peripheral element of the program. Today, 86 
percent of the crop insurance policies that are sold originated 
as 508(h) proposals. Revenue insurance for example, the largest 
component of the current program, originated as a 508(h) 
experiment in the 1990s. Margin insurance, which adds coverage 
for shifting input costs, a program that already exists today, 
started in 2014 as a 508(h) experiment. Important coverages for 
dairies, for hurricanes, for cottonseed, pulse crops, hemp, 
livestock, and countless enhancements to the program to meet 
specific changing needs for producers all began under 508(h).
    The 508(h) process has several steps. To initiate a new 
product, a producer group or a crop insurance company will 
partner with a well-qualified team of developers to create a 
new program that is designed to solve a problem that the 
current program does not address. The proposed program has then 
been carefully vetted by the talented staff at the USDA Risk 
Management Agency to address any of the critical flaws that 
might be present in the design that could make it vulnerable to 
fraud, waste, and abuse. These have to be stamped out before a 
product can be put on.
    Underwriting, premium rates, and compliance are all subject 
to rigorous technical review, including review by independent 
outside actuaries, agronomists, and underwriters with 
experience in crop insurance design. The Federal Crop Insurance 
Corporation's board then meets with the submitters to quiz them 
on any outstanding issues before voting on whether or not to 
approve a new program. We, as submitters, acknowledge that the 
approval process can be difficult and complex, and there have 
been many adjustments, including in the 2018 Farm Bill, to 
improve this process and to make it more accessible for more 
producers. What you have done is working.
    We also need to respect the fact that the FCIC board has a 
special fiduciary responsibility to taxpayers, and their 
judgments on program design can affect the fairness to farmer 
customers and the stability of the agricultural markets we are 
looking to protect. If a proposal is approved by FCIC and it is 
implemented in the field, submitters are eligible for 
reimbursement of their expenses within reasonable bounds. This 
feature was added in 2000 to try and make it easier for 
producer groups to engage in this process and to solve their 
own problems proactively to make the program more adaptable to 
change. And it is working. Even under this system, if a product 
is never approved, the developers and the producer groups 
behind them are responsible for bearing the costs of 
development themselves.
    The 508(h) process is not perfect, and we will have some 
suggestions for improvements as this process proceeds. But 
overall, it has been a tremendous success, and some minor 
adjustments to an overwhelmingly successful program is 
certainly a nice place to be.
    So crop insurance today is a critical part of the 
agricultural safety net. It is relied on by farmers, by 
lenders, and by rural businesses in every part of the country. 
No USDA program reaches more farmers and more crops in more 
counties than crop insurance. Innovation through the 508(h) 
process has been a major factor in that success. Please 
continue what is working.
    [The prepared statement of Mr. Offerdahl follows:]

  Prepared Statement of Alex Offerdahl, Crop Insurance Division Head, 
                Watts and Associates, Inc., Billings, MT
    Thank you for the opportunity to provide testimony to the Committee 
regarding the Federal Crop Insurance program and the important role 
that farmer-driven innovation plays in it through a unique Federal Crop 
insurance Corporation (FCIC) feature referred to as the 508(h) Process.
    Watts and Associates, Inc. (W&A) is an agricultural economic 
research firm based in Montana, specializing in risk management 
solutions for American farm producers. We develop products for FCIC, 
insurance providers, and farm producer organizations. W&A has been one 
of the most active participants in the 508(h) Process since its 
inception. We work primarily with farm producer groups to develop new 
insurance programs tailored to their needs, crops, and regions. We are 
proud to have developed in a sizeable number of 508(h) programs that 
have become important components of the overall FCIC program. (See 
list, attachment A)
    Federal Crop Insurance has succeeded because of its unique design 
as a partnership between government and private industry. The 
government, through the USDA Risk Management Agency (RMA), assures that 
farmers are offered crop insurance coverage under fair and consistent 
terms, and FCIC provides a financial backstop through both subsidy, to 
make participation more affordable, and reinsurance, to protect against 
extraordinary losses in bad years. Private companies share in the 
financial risk and compete to provide the highest levels of service to 
farmers. Together, this system harnesses what government and business 
each do best.
    The 508(h) Process was first added to Federal crop insurance in 
1993 as a special avenue through which farmers could propose new ideas 
that, if they satisfied rigorous technical standards and met important 
risk management needs, could be incorporated directly into the FCIC 
system. Innovation through 508(h) is not a peripheral element of the 
crop insurance program, but rather has become part of its essential 
mainstream, giving Federal crop insurance a vitality and responsiveness 
central to its success. About 86% of the policies sold for coverage 
offered today began as, or have direct roots in, original 508(h) 
proposals. Revenue insurance, for instance, today the largest single 
type of FCIC coverage, began in the 1990s as a 508(h) experiment. 
Margin insurance, which adds coverage for shifting inputs costs, was 
likewise developed and approved under the 508(h) process in recent 
years. Important new coverages for dairies, hurricanes, cotton seed, 
pulse crops, hemp, livestock, and countless enhancements for specific 
grower needs, all began under 508(h).
    The 508(h) process has several steps. To initiate a new 508(h) 
product, a producer group or crop insurance company will partner with a 
well-qualified team of developers to create a new policy to solve 
problems that current offerings do not address. The development team 
creates all elements of the new program and presents it for 
consideration to the FCIC Board of Directors. The proposal is then 
carefully vetted by the Risk Management Agency's staff to assure there 
are no critical flaws in program design that would make it vulnerable 
to fraud, waste, or abuse. These experts assure that the proposal can 
be appropriately implemented with existing infrastructure, and that the 
premiums charged to producers are fair and reasonable. Underwriting, 
premium rates, and compliance are all subject to rigorous technical 
review, including review by independent outside actuaries, agronomists, 
and underwriters with experience in crop insurance design. The FCIC 
board then meets with the submitters to quiz them on any outstanding 
issues, before voting on whether to approve the new program for 
implementation.
    We, as submitters, acknowledge that the approval process is too 
long, difficult, and complex, despite many adjustments made along the 
way to improve it. But we also respect the fact that the FCIC Board has 
special fiduciary responsibilities where taxpayer funds are involved 
and where their judgments on product design can affect fairness to 
farmer-customers and the stability of related agricultural markets. We 
take these responsibilities very seriously and understand that their 
care and analytic rigor are an important benefit of the program.
    If a proposal is approved by FCIC and implemented in the field, the 
submitters are then eligible for reimbursement of reasonable 
development and maintenance costs. This feature was added by Congress 
in the 2000 Agricultural Risk Protection Act to encourage farm 
organizations to play a larger role in 508(h) by assisting them in 
bearing the financial risk of product development. Even under this 
system, if a product is never approved, the developers and the farmer-
partners bear the loss of their development costs. Total reimbursement 
for development and maintenance costs in 2020 was about $2.8 million, 
or about \3/100\ of 1 percent of the $9.8 billion in premiums generated 
that year, of which some 86% was written to policies rooted in 508(h) 
submissions.
    The 508(h) Process is not perfect. The high data standards imposed 
by the review process can make it difficult to create new policies for 
specialty, minor, or emerging crops. FCIC has imposed strict limits on 
the reimbursement of costs for maintaining and improving products after 
they are launched, making it difficult for developers to continue to 
invest in their ongoing success. Development teams could do a better 
job of engaging with crop insurance companies and with stakeholders to 
make them aware of forthcoming products and embrace their valuable 
input. Every new product introduces additional complexity and costs; 
when a new product is introduced and fails in the marketplace, there 
should be a clearer process to sunset it. Each of these challenges are 
worthy of consideration, but they represent minor adjustments to an 
overwhelmingly successful program.
    Crop insurance today is a central part of the agricultural safety 
net, relied on by farmers, lenders, and rural businesses in every part 
of the country, and reaching more crops and farmers than any other USDA 
program. It is a public and private partnership that has grown and 
evolved, continually innovating to better meet farmers' needs, and 
508(h) is the proven driver of that innovation. Again, I thank you for 
the opportunity to address the Committee and I will be happy to take 
any questions.
                              Attachment A

                               Selected Products Developed by Watts and Associates
----------------------------------------------------------------------------------------------------------------
                                                                                                    Cumulative
   Product (Offer Period)         Acres          Liability          Premium         Indemnity       Loss Ratio
----------------------------------------------------------------------------------------------------------------
Margin Protection (2016-       6,902,261.00     $4,724,770,131     $281,226,341      $41,355,130           0.147
 2021)
Popcorn Revenue (2012-2021)    1,966,185.00     $1,213,365,478      $87,753,003      $72,610,363           0.827
Area Popcorn (2015-2021)         133,071.00       $127,568,366       $9,323,908       $4,070,980           0.437
Specialty Soybeans (2010-      2,951,824.00       $940,798,362      $98,292,024      $56,014,325           0.570
 2021)
Dry Pea and Dry Bean          16,114,929.00     $4,269,363,801     $751,081,743     $807,870,089           1.076
 Revenue (2013-2021)
Enhanced Coverage Option       7,101,291.00       $409,498,137     $221,652,780      $46,928,524           0.212
 (2021)
                            ------------------------------------------------------------------------------------
  Totals *                    35,169,561.00    $11,685,364,275   $1,449,329,799   $1,028,849,411           0.710
----------------------------------------------------------------------------------------------------------------
* W&A developed additional programs not represented in these data. Specialty Corn and Canola programs were ceded
  to RMA for operation. Malt Barley Endorsement and Cottonseed Endorsement are both inexorably linked to
  underlying policies and therefore should not be represented as in insurance experience as if they are
  distinct. W&A's role in other product developments are contributors or as developers under contract to USDA
  Risk Management Agency are omitted from this listing.


    The Chair. Thank you, Mr. Offerdahl.
    Mr. Haag, you are now recognized for 5 minutes.

  STATEMENT OF TOM HAAG, FIRST VICE PRESIDENT, NATIONAL CORN 
              GROWERS ASSOCIATION, EDEN VALLEY, MN

    Mr. Haag. Chair Bustos, Ranking Member Austin Scott, and 
Members of the Subcommittee, thank you for the opportunity to 
testify today. My name is Tom Haag. I am a fourth-generation 
family farmer in south central Minnesota where my son and I 
grow over 1,700 acres of corn and soybeans.
    Federal crop insurance is a major pillar of risk management 
for the vast majority of corn farmers. Simply put, the public-
private partnership of crop insurance works and plays a 
significant role for agriculture in the wake of natural 
disasters. As growers sit down with their lenders and make 
plans for the upcoming crop year, we spend a good amount of 
time discussing our cost of inputs, crop rotations, and making 
our market strategies. We also work through the Federal crop 
insurance coverage options with our lenders and our crop 
insurance agents in order to purchase the policies that work 
best for our farms.
    In 2021, corn farmers bought more than 587,000 Federal crop 
insurance policies, insuring over $52 billion worth of 
liabilities. Nationwide, there was coverage on 83 million acres 
of corn with an additional 10 million acres that had companion 
endorsement policies. In my home state alone, Minnesota, were 
over 42,000 policies, which covered 8 million acres of corn. 
The bulk of corn growers purchase revenue protection, which 
protects lost revenue due to production loss, changes in price, 
or both. Built into these policies is important coverage 
against prices rising at harvest time. Corn growers also have 
access to Supplemental Coverage Option, the Enhanced Coverage 
Option, margin protection policies, and Whole-Farm Revenue 
Protection.
    Implementation of the farm bill has been very smooth. The 
Crop Insurance Title allowed for the enterprise units to 
include land across county lines and the creation of multi-
county enterprise units. Corn growers are pleased with the 
increased coordination between USDA agencies, including the 
Farm Service Agency, aligning deadlines for commodity programs 
with the crop insurance sales closing dates, and RMA working 
with the Natural Resources Conservation Service to allow cover 
crops as a qualifying good farming practice.
    The 2018 Farm Bill included direction for RMA to research 
and develop new policies, including the quality loss option. 
While it has not solved many of the issues that growers face 
when confronting quality losses such as vomitoxin and low test 
weights, we appreciate that the option is available. In 2020, 
RMA released the Hurricane Insurance Protection-Wind Index 
policy, which provides coverage on over 70 crops, including 
corn.
    Since the 2018 Farm Bill, agriculture has faced multiple 
weather patterns. During the planting season this year, growers 
across the Northern Plains had delays due to cold weather and 
wet weather. For many producers, droughts continue to be a 
major cause for concern this year. Approximately 30 percent of 
corn production is within an area experiencing drought 
conditions.
    When widespread disasters strike crop insurance companies 
are generally able to provide timely loss adjustments and to 
quickly process the bulk of indemnity payments. While 
individual growers are not made whole, crop insurance provides 
the tools and ability to recover and continue operating into 
the next year. NCGA and affiliated state associations continue 
to lead and partner with other entities for the creation of new 
risk management tools. We have been successful in developing 
policies, including the widely adopted trend-adjusted yield 
endorsement and the recent endorsement for corn growers who 
split-apply nitrogen.
    Last week, NCGA held our Corn Congress summer fly-in. Corn 
Growers stressed that our number-one priority for the farm bill 
is to protect crop insurance from the harmful budget cuts and 
reforms. The result of our nationwide survey shows that corn 
growers overwhelmingly choose the Crop Insurance Title as the 
most important, and that cuts to the Federal crop insurance 
would negatively impact our farming operations.
    In closing, we are grateful that the Agriculture Committee 
prevented attempts at harmful reductions to crop insurance. We 
appreciate your consideration of our views and the need for our 
producers to have effective and affordable risk management 
tools. Thank you.
    [The prepared statement of Mr. Haag follows:]

  Prepared Statement of Tom Haag, First Vice President, National Corn 
                  Growers Association, Eden Valley, MN
    Chair Bustos, Ranking Member Austin Scott, and Members of the 
General Farm Commodities and Risk Management Subcommittee, thank you 
for the invitation and opportunity to testify today.
    My name is Tom Haag. I am a fourth-generation family farmer in 
south-central Minnesota where my son and I grow more than 1,700 acres 
of corn and soybeans.
    I currently serve as the First Vice President of the National Corn 
Growers Association (NCGA). Founded in 1957, we are a farmer-led trade 
association that works with our affiliated state associations to help 
protect and advance corn growers' interests. The NCGA mission is to 
create and increase opportunities for corn growers and our vision is to 
sustainably feed and fuel a growing world.
    On behalf of the nearly 40,000 dues-paying corn farmers nationwide 
and more than 300,000 corn growers who contribute to corn promotion 
programs in their states, thank you for your public service and 
dedication to agriculture, rural America, and the farm economy.
    This morning, I will focus on the importance of Federal crop 
insurance to corn growers, highlight successes from the 2018 Farm Bill, 
and provide some early thoughts on the development of the next farm 
bill.
Importance and Use of Crop Insurance for Corn
    Federal crop insurance is a major pillar of risk management for the 
vast majority of corn growers. Simply put, the public private 
partnership of crop insurance works and plays a significant role for 
agriculture in the wake of natural disasters.
    Every year across the country, growers sit down with their lenders 
to strategize and make financial plans for the upcoming crop year. 
While we spend a good amount of time discussing the costs of inputs, 
crop rotations, and our marketing strategies, we also work through our 
coverage options under Federal crop insurance coverage.
    The role and responsibility of crop insurance agents in delivering 
the program is immense. We value the advice from our agents, who 
compete solely on service, as we purchase the policies and endorsements 
that best work for our farms and our risk profiles.
    These individual farmer, lender, and agent conversations about risk 
management add up. According to the Risk Management Agency (RMA) 
Summary of Business, in 2021, corn farmers bought over 587,000 Federal 
crop insurance policies, insuring over $52 billion in liabilities. 
Nationwide, these purchases meant that that there was much needed 
Federal crop insurance coverage on over 83 million acres of corn, with 
an additional 10 million acres that had companion and endorsement 
policies. In my home state of Minnesota alone, last year there were 
over 42,000 corn policies sold covering more than 8 million acres of 
corn.
    The bulk of corn growers purchase revenue protection, which 
protects against loss of revenue due to a production loss, change in 
price, or a combination of both. In 2021, revenue protection policies 
alone covered over 76 million acres of corn. Built into these policies 
is important coverage against prices rising at harvest time, which is 
critical coverage for farmers who forward sell their corn and other 
crops, as well as livestock producers who produce their own grain. As 
producers make decisions on their policies, they can choose to exclude 
harvest price protection. However, less than 600,00 acres of corn were 
covered under this type of exclusion last year. Yield protection 
policies, which protects against a production loss, covered an 
additional 4 million acres of corn in 2021.
    Corn growers also have access to many endorsements and options 
including several area wide policies. In 2021, over 4.4 million acres 
had coverage through the Supplemental Coverage Option (SCO) and 3.5 
million acres had coverage through the new Enhanced Coverage Option 
(ECO). The policies are optional endorsements where growers can pay for 
additional area-based coverage for a portion of their underlying crop 
insurance policy. While not at the scale of these revenue, yield, and 
area wide policies, corn growers also purchase margin protection 
policies, whole-farm revenue protection (WFRP) and the new hurricane 
insurance protection--wind index (HIP-WI).
Implementation of the 2018 Farm Bill
    During development, passage, and implementation of the 2018 Farm 
Bill, NCGA's top priority has been to maintain support for a robust 
crop insurance program. Both the House and Senate Agriculture 
Committees were able to defeat attacks to the program and also found 
ways to strengthen Federal crop insurance. Thank you for providing the 
certainty and predictability of this proven program.
    Overall, implementation of the farm bill and the crop insurance 
title in particular has been fairly smooth. RMA continues to be a great 
partner with producers and commodity organizations. Agency leadership 
and staff have open lines of communication with stakeholders and 
regularly engage with producer groups.
    A key provision in the crop insurance title is the allowance for an 
enterprise unit to include land across county lines and the creation of 
multi-county enterprise units. Corn growers advocated for these changes 
which enhanced program integrity and resulted in savings for the 
taxpayer and farmer. We were pleased that RMA immediately implemented 
these provisions.
    Corn growers are also pleased with results stemming from increased 
coordination between USDA agencies. The 2018 Farm Bill allows for 
producers to have an annual election between the major commodity 
programs, Agriculture Risk Coverage and Price Loss Coverage. Starting 
in 2021, the annual election deadline for these Farm Service Agency 
(FSA) programs are now aligned with majority of crop insurance purchase 
deadlines for row crops. The unified decision deadline and sales 
closing date of March 15 each year helps ease implementation for USDA, 
crop insurance agents, and ultimately producers.
    RMA has also continued to improve coordination and policies with 
the Natural Resources Conservation Service (NRCS). The crop insurance 
title specified that cover crops qualify as a good farming practice if 
the grower follows NRCS guidelines. This provision and successful 
implementation have resulted in decreased barriers, both real and 
perceived, for growers implementing this important conservation 
practice.
    USDA should be commended for their efforts to further reduce the 
reporting burden on producers. Corn growers appreciate the agencies' 
efforts to allow farmers to submit additional information 
electronically, which may reduce the number and length of in-person 
visits to crop insurance agents and FSA county offices. For example, 
during implementation of the recent Emergency Relief Program, FSA was 
able to use crop insurance data that was previously submitted to the 
department in order to streamline applications for phase one of the 
program.
    Unfortunately, data transfer and compatibility issues between USDA 
agencies continue to exist and can cause headaches and inequities for 
producers. NCGA supports the continuation of the Acreage and Crop 
Reporting Streamlining Initiative (ACRSI) and similar efforts to 
improve the farmer customer experience and create greater efficiency 
for multiple program delivery. The agencies are already working closer 
together and should continue to find additional ways to share common 
data, while maintaining strict producer confidentiality protections. 
For these efforts to be successful, USDA should also continue to work 
with external stakeholders including approved insurance providers, crop 
insurance agents, extension professionals, and producer groups.
Quality Losses and Hurricane Coverage
    The 2018 Farm Bill included direction for RMA to research and 
develop new policies including coverage for quality losses and 
hurricane coverage. Under certain abnormal circumstances, weather 
related challenges can cause and exacerbate quality issues for corn and 
other commodities that result in market discounts. In extreme cases 
growers may be unable to sell their grain. Common quality loss issues 
during corn production and harvest range from mycotoxins, such as 
aflatoxin and vomitoxin, to low test weights. Historically, crop 
insurance could compound these issues by reducing a producer's actual 
production history (APH) despite the farmer having normal or average 
production in terms of yields, even if a crop insurance indemnity was 
not triggered.
    RMA has developed and implemented the Quality Loss option (QL). 
Producers that chose the option are able to exclude the quality loss 
from an Actual Production History (APH) database.
    This option became available in 2021 and is offered at an 
actuarially sound premium rate. While the QL option has not solved many 
of the non-crop insurance issues that growers face when confronting 
quality losses, corn growers appreciate the option where it is 
available.
    In 2020, RMA released the Hurricane Insurance Protection--Wind 
Index (HIP-WI). The policy covers a portion of the deductible of the 
underlying crop insurance policy when a county is within the area of 
sustained hurricane-force winds. HIP-WI provides coverage for 70 
different crops, including corn, and is available in counties near the 
Gulf of Mexico, the Atlantic, and Hawaii.
    In 2021, corn growers covered 1.5 million acres and $212 million in 
liabilities through the HIP-WI endorsement. In the same year, according 
to the RMA summary of business, there were $83.7 million in indemnities 
for all eligible crops. The top five largest indemnities by crop 
included cotton, rice, sugarcane, corn and soybeans. Corn growers are 
appreciative of the efforts by Congress and the RMA to expand Federal 
crop insurance coverage to producers who experience these types of 
events.
Weather Related Disasters
    Since the 2018 Farm Bill was signed into law, agriculture has faced 
difficulties with too much and too little rain, as well as multiple 
unique weather events. As Congress intended, crop insurance provides 
farm owners and operators the ability to plan for and respond to 
weather-related loses outside of their control. Given the size and 
geographic footprint of corn acreage in the United States, weather 
related yield losses are likely to impact at least some corn growers 
each year.
    During this year's planting season, growers across the Northern 
Plains faced delays due to cold and wet weather. In some areas, corn 
growers were unable to access fields by the crop insurance final 
planting date. Under existing policies, producers who are unable to 
plant due to an insurable cause of loss may receive a prevented 
planting indemnity or receive a reduced insurance guarantee if they 
plant within the late planting period. Producers also have the 
flexibility to choose to plant a different crop with a later final 
planting date. Prevented planting is essential coverage during the 
critical planting season.
    Despite these early challenges with wet weather, most producers 
were able to plant a crop. USDA's National Agricultural Statistics 
Service (NASS) latest report on June 30, 2022, estimates that 89.9 
million acres of corn have been planted in the United States for 2022. 
This represents a much smaller reduction to corn acreage than 
previously forecast by USDA.
    For many producers, drought continues to be a major cause of 
concern and loss. As of July 12, 2022, the U.S. Drought Monitor 
estimates that approximately 30% of corn production is within an area 
currently experiencing drought conditions. This includes 98% of corn in 
Colorado, 96% in Texas, 78% in Louisiana, 76% in Kentucky and 70% in 
Tennessee.
    While many corn producing areas are currently experiencing some 
level of drought, there are notably areas of D3 extreme drought in 
Colorado, Nebraska, Kansas, and Iowa. Growers also face D4 exceptional 
drought in Kansas and Texas.
    In 2021, U.S. growers planted 93.4 million acres of corn, which 
produced over 15.1 billion bushels with a value estimated at $82.3 
billion. Widespread drought and intense heat impacted much of the corn 
belt during the growing season. Nationwide crop insurance indemnities 
to corn growers totaled $1.8 billion.
    During the 2020 growing season, corn growers across Nebraska, Iowa, 
Illinois, and Indiana suffered major losses due to the devastating 
derecho. The storm and accompanying damaging winds hit millions of 
acres of highly productive crop land in August before corn harvest 
could begin. Overall crop insurance indemnities to corn growers totaled 
$2.6 billion for the year.
    Corn production was also heavily impacted in 2019 by wet weather 
conditions during planting the season with flooding and excess moisture 
across the high plains and throughout the Missouri River Basin. The wet 
spring prevented many farmers from accessing flooded fields. 
Nationwide, 2019 set a record with over 19 million acres of cropland 
reported as prevented from being planted. This included over 11 million 
acres of corn that were reported as prevented from being planted. For 
2019, nationwide crop insurance indemnities to corn growers, including 
prevent planting coverage, totaled $4 billion.
    When widespread disasters like these strike, crop insurance 
companies are generally able to provide timely loss adjustments and to 
quickly process the bulk of indemnity payments. While individual corn 
growers are not made whole from their losses, crop insurance provides 
the tools and ability to recover and continue operating into the next 
crop year.
    Corn growers also appreciate RMA's responsiveness to producer 
concerns in the wake of disasters. For example, in 2021 RMA made 
permanent previous flexibility for producers with crop insurance to 
hay, graze or chop cover crops at any time and still receive 100% of 
the prevented planting payment. RMA updated this policy in part to 
support the use of cover crops, an increasingly important conservation 
practice if producers are unable to plant a row crop.
Crop Insurance Product Development
    Corn growers understand and appreciate that in order to meet the 
growing list of challenges and demands of tomorrow, Federal crop 
insurance policies must not be stagnant. NCGA policy on risk management 
clearly states that we, ``support the development of new and innovative 
risk management products to provide a wide array of tools to help 
producers manage price and yield risks.''
    NCGA and our affiliated states continue to lead and partner with 
other forward-thinking entities for the study and creation of new risk 
management tools. Whether through Federal research and development or 
private development and approval of Federal policies, NCGA and our 
state associations have been successful in developing policies that 
follow sound insurance principles and are actuarially appropriate. 
Examples of successful efforts include the widely adopted Trend-
Adjusted Yield Endorsement and the recent endorsement for corn 
producers who split apply nitrogen.
    Corn growers and producers of other commodities and specialty crops 
have all benefited from the ability for the Federal Crop Insurance 
Corporation Board to authorize and approve development of new products, 
endorsements, and options.
Future Farm Bill Recommendations
    Corn growers appreciate the work by this Subcommittee and the full 
Committee to review implementation of the 2018 Farm Bill. Last week, 
corn growers from across the country were in Washington, D.C. as part 
of our ``Corn Congress'' summer fly in. Throughout the week, corn 
growers stressed with their Members of Congress the important role that 
the farm bill plays in their lives and rural America. Our number one 
priority for the farm bill is to protect crop insurance from harmful 
budget cuts and reforms.
    The results from our recent nationwide survey of grower members and 
non-members provided key intelligence that backs up our policy stance. 
When asked, ``which of the farm bill titles are the most important to 
you?'' corn growers overwhelmingly chose the crop insurance title. In 
the survey work, growers also stressed that cuts to Federal crop 
insurance, would negatively impact their farming operations.
    As a grassroots and member driven association, NCGA and our state 
affiliates are continuing to do our homework so we can provide 
additional recommendations as the Committee turns its' attention to 
developing and negotiating the next farm bill. Our grower led Action 
Teams met last week and held discussions on USDA programs and policies 
as we continue to develop additional recommendations for accessible and 
defensible risk management tools.
    In the ramp up to the farm bill, NCGA continues to engage in 
multiple broad-based coalitions on potential recommendations. As a 
steering committee member of the Food and Agriculture Climate Alliance 
(FACA), NCGA is involved in the FACA's farm bill working groups. This 
coalition work includes a working group focused on exploring proposals 
and limitations of potential climate policy in the crop insurance, 
commodity, and credit titles heading into the 2023 Farm Bill. NCGA also 
continues to be involved with the AGree Economic and Environmental Risk 
Coalition (E2 Coalition) that focuses on recommendations for 
agriculture data and reducing policy barriers to conservation practice 
adoption.
    While crop insurance continues to be our top farm bill priority, 
NCGA is also focused on strengthening the producer safety net, 
supporting voluntary conservation programs, and bolstering the 
international market development programs. We look forward to sharing 
more specific NCGA policy priorities and coalition recommendations in 
the months ahead.
Closing
    Hearings like today's are important opportunities for users of USDA 
programs to accurately explain and defend the programs to fellow 
growers, taxpayers, and other interests. We understand that the 
complexity of the farm economy and Federal policies require constant 
education of Members of Congress on the importance and structure of the 
safety net.
    NCGA will continue to highlight lessons we have learned from the 
past, including when some groups and Members have pushed the mistaken 
belief that crop insurance programs should be significantly reduced or 
reformed. We are grateful that leaders from the Agriculture Committees 
have stood up and prevented these previous attempts at harmful 
reductions to crop insurance.
    In closing, NCGA recognizes the difficult task ahead for the 
Committee to develop the next farm bill. We understand that there will 
be continued budget challenges and varied approaches to confronting the 
many current issues impacting agriculture. We appreciate your 
consideration of our views regarding crop insurance programs and the 
need for producers to have access to effective and affordable risk 
management tools.

    The Chair. Thank you Mr. Haag.
    Mr. Cromley, who is with us virtually, you can begin when 
you are ready.

  STATEMENT OF LEE CROMLEY, GEORGIA STATE CHAIRMAN, AMERICAN 
                 COTTON PRODUCERS, BROOKLET, GA

    Mr. Cromley. Thank you, Madam Chair and Ranking Member 
Scott, for the opportunity to speak to you today. Thank you for 
all the good work you do for agriculture. I am Lee Cromley from 
Brooklet, Georgia. I am a sixth-generation farmer, farming with 
my brother Charlie. We farm 2,500 acres of cotton and peanuts. 
Our farm is located west of Savannah about 60 miles off the 
Atlantic Coast, which puts us in the target of hurricanes on a 
fairly regular basis. I am testifying today on behalf of the 
members and growers of National Cotton Council.
    Crop insurance is an absolute necessity for cotton 
producers. Improving the risk management options for producers 
has been a top priority for the cotton industry for many, many 
years. A key component of crop insurance is the public-private 
partnership between the government and private companies that 
offer products, as well as the agents who service these 
policies.
    In the current economic climate [inaudible] essential tools 
to counteract these challenges is a must for any cotton grower. 
One of our industry's great achievements was the creation of 
the Stacked Income Protection Plan for upland cotton. STAX is 
an essential risk management tool for many producers and should 
be protected as the upcoming farm bill is developed.
    In the fall of 2016, the Southeast received tremendous 
amounts of rainfall just prior to harvest due to Hurricane 
Matthew. Many producers in the region experienced substantial 
quality discounts for lint and seed. We are grateful that in 
2018 RMA aligned cotton quality loss calculations with other 
commodities by changing the deductible to a trigger set at ten 
percent, thus allowing growers to fully capture the amount of 
quality loss.
    In 2020, excessive rainfall and extended periods of 
overcast skies caused the splitting of our cotton seed inside 
the fiber, leading to major quality discounts for Georgia 
growers. The quality loss adjustment created by USDA Farm 
Service Agency for 2018 and 2019 was bureaucratic with many 
implementation challenges. It is vital that when phase 2 of the 
Emergency Relief Program for quality losses is developed, 
producers like me and others who suffer quality losses due to 
seed coat fragments are eligible for this assistance.
    Georgia cotton growers lost [inaudible] due to the 
devastating impacts from Hurricanes Matthew, Irma, and Michael. 
These producers saw record crops wiped away in an instant due 
to the powerful forces of Mother Nature. After these storms, 
RMA created the Hurricane Insurance Protection-Wind Index. This 
product is an affordable risk management option for many 
growers who are at risk yearly due to their proximity to the 
coast.
    While we are grateful to RMA for the creation of this new 
hurricane product, additional improvements are needed to make 
this more effective. Growers who have suffered losses from 
tropical storms and depressions are ineligible for the 
hurricane policy. Tropical storms and other events like this 
can have damaging winds, while also leaving devastating amounts 
of rainfall, causing flooding that would decimate a cotton 
crop, especially near harvest.
    RMA should also hopefully create a multi-peril crop 
insurance product that gives growers credit for the crop that 
is in the field instead of only crediting growers for their 
annual production history. For example, in 2018, growers in 
Georgia, Florida, and Alabama were expecting record to near-
record cotton yields until Hurricane Michael. Unfortunately, 
growers were only compensated on the APH information well below 
actual yields on the farm. Growers should have an option to 
purchase a product that will insurance the actual crop value of 
the farm.
    In the past, there have been proposals that would impose an 
arbitrary means test to crop insurance or limit the amount of 
premium discount a producer can receive. I strongly urge you to 
oppose any attempt to implement any proposals along these 
lines. Limiting access to these products would cause some 
producers to completely exit the insurance market, which in 
turn would alter the risk pool and potentially increase the 
premium rates across the board.
    I am grateful for the opportunity to testify today. We look 
forward to working with the Committee to address the necessary 
improvements discussed in today's hearings, and I will be happy 
to answer any questions at the appropriate time. Thank you so 
much.
    [The prepared statement of Mr. Cromley follows:]

  Prepared Statement of Lee Cromley, Georgia State Chairman, American 
                     Cotton Producers, Brooklet, GA
Introduction
    Good morning, I am Lee Cromley, from Brooklet, GA. I am a sixth 
generation farmer along with my brother Charlie, and we farm 2,500 
acres of cotton and peanuts.
    I am also actively involved with the National Cotton Council, a 
Georgia State Chairman of the American Cotton Producers, Second Vice-
President of Cotton Council International, former President and 
Chairman of Southern Cotton Growers, and Vice-Chairman of the Georgia 
Cotton Commission.
    The National Cotton Council (NCC) is the central organization of 
the United States cotton industry. Its members include producers, 
ginners, cottonseed processors and merchandizers, merchants, 
cooperatives, warehousers, and textile manufacturers. A majority of the 
industry is concentrated in 17 cotton-producing states stretching from 
California to Virginia. U.S. cotton producers cultivate between 10 and 
14 million acres of cotton with production averaging 12 to 20 million 
480 lb bales annually. The downstream manufacturers of cotton apparel 
and home furnishings are in virtually every state. Farms and businesses 
directly involved in the production, distribution and processing of 
cotton employ more than 115,000 workers and produce direct business 
revenue of more than $22 billion. Annual cotton production is valued at 
more than $5.5 billion at the farm gate, the point at which the 
producer markets the crop. Accounting for the ripple effect of cotton 
through the broader economy, direct and indirect employment surpasses 
265,000 workers with economic activity of almost $75 billion. In 
addition to the cotton fiber, cottonseed products are used for 
livestock feed and cottonseed oil is used as an ingredient in food 
products as well as being a premium cooking oil.
Crop Insurance Overview
    Grower access to a strong and fully accessible suite of crop 
insurance products that producers can purchase to tailor their risk 
management to their specific needs to address yield and price 
volatility within the growing season is a critical component to manage 
yield and revenue risks on the farm. A key component of crop insurance 
is the public-private partnership between the government and the 
private companies that offer the products, as well as the agents who 
service the policies.
    Crop insurance is an absolute necessity for cotton producers. 
Improving the risk management options for producers has been a top 
priority for the cotton industry for many years. The Council has long 
supported methods that would make higher levels of insurance coverage 
more affordable. There is no worse place for a producer to find 
themselves than having invested in a crop all year only to realize 
their overall yield or revenue has fallen to a point at or near their 
insurance guarantee. In the current economic climate of higher input 
costs, access to the essential tools to counteract these challenges is 
a must for any cotton grower. Over the years, with the help of Congress 
and USDA's Risk Management Agency (RMA), crop insurance participation 
has grown substantially. In 2021, 10.8 million acres of upland cotton 
were protected by some form of crop insurance. This represents more 
than 97% of all upland acres.
Stacked Income Protection Plan (STAX)
    Area and county wide policies are also giving producers additional 
options to manage production risks. One of our industry's great 
achievements was the creation of the Stacked Income Protection Plan 
(STAX) for upland cotton. STAX is a crop insurance product for upland 
cotton that provides coverage for a portion of the expected revenue in 
a grower's production area, most often your county. STAX may be 
purchased as a stand-alone policy, or in conjunction with another 
policy referred to as a ``companion policy.'' Companion policies may 
include Yield Protection, Revenue Protection, Revenue Protection with 
the Harvest Price Exclusion, and any of the Area Risk Protection 
Insurance policies.
    STAX remains a critical tool since cotton's reestablishment as a 
covered commodity through Area Revenue Coverage (ARC) and Price Loss 
Coverage (PLC) with the formation of the seed cotton program in the 
2018 Bipartisan Budget Act. With the passage of the 2018 Farm Bill, 
cotton producers, beginning with the 2019 crop, were prohibited from 
enrolling seed cotton base acres in ARC or PLC if STAX was purchased. 
This option created a choice with most producers choosing to enroll 
their seed cotton base acres in PLC instead of purchasing STAX. 
However, there are many growers across the Cotton Belt who do not have 
historic seed cotton base acres to enroll in PLC and STAX is an 
effective and affordable option for these producers.
    In 2022, with the recent uptick of commodity prices, including 
cotton lint and cottonseed, many growers with seed cotton base acres 
declined to enroll in ARC or PLC and purchased STAX. On my farm in 
Georgia, I have bought STAX every year on farms where there is no seed 
cotton base. This year, I purchased STAX on all my farms. STAX is an 
essential risk management tool for many producers and shallow loss 
programs like STAX should be protected as the upcoming farm bill is 
developed.
Quality Loss
    In the fall of 2016, South Carolina, North Carolina, Virginia, and 
parts of Georgia, including my farm, received tremendous rainfall just 
prior to harvest due to Hurricane Matthew. For many of these producers, 
yields were in line with their annual production history (APH), but the 
harvested cotton had severe quality issues, resulting in severe market 
discounts. At the time, cotton's base policy included a quality loss 
adjustment, but the provision included a 15% deductible and with 
quality losses in excess of 15% incorporated into the production to 
count, thus lowering a producer's yield for insurance purposes. Many 
growers in the Southeast were not familiar with the specific 
calculations of the quality loss adjustment ed since it was rarely 
used. Many producers in this region experienced substantial quality 
discounts for lint and seed, yet due to the quality deductible and 
relatively shallow quantity losses, received no benefit from the 
quality loss adjustment. We are grateful that in 2018 RMA aligned 
cotton quality loss calculations with other commodities by changing the 
deductible to a trigger set at 10%, thus allowing growers to fully 
capture the amount of quality loss.
    In addition, in the 2018 Farm Bill, Congress directed RMA to 
enhance the quality loss provisions. This option became available for 
the 2021 crop year and allows pre-quality production amounts to be used 
to establish the APH instead of post-quality production amounts.
    In 2020, excessive rainfall and extended periods of overcast skies 
caused the splitting of the cottonseed inside the fiber leading to 
major quality discounts for Georgia growers. The Quality Loss 
Adjustment (QLA) created by USDA Farm Service Agency (FSA) from 2018-
2019 was bureaucratic with numerous implementation challenges that 
placed the responsibility on reporting quality losses on merchandizers 
and gins. Moreover, restrictive quality loss thresholds as well as 
prohibitions on producers who had a WHIP+ claim and a crop insurance 
indemnity from participating made QLA ineffective for many producers. 
It is vital that when Phase 2 of the Emergency Relief Program (ERP) for 
quality losses is developed, producers like me and others who suffered 
quality losses due to seed coat fragments are eligible for assistance.
Hurricane Insurance Protection-Wind Index (HIP-WI)
    According to the University of Georgia College of Agriculture and 
Environmental Sciences, Georgia's cotton growers lost $1.1 billion due 
to the devastating impacts from Hurricanes Matthew, Irma, and Michael. 
These producers saw record crops wiped away in an instant due to the 
powerful forces of Mother Nature.
    After these storms, RMA created HIP-WI that covers a portion of the 
deductible of the underlying crop insurance policy when a county, or 
adjacent county, is within the area of sustained hurricane-force winds. 
The coverage provided by HIP-WI can be combined with the Supplemental 
Coverage Option (SCO) and the Stacked Income Protection Plan (STAX) 
when acreage is also insured by a companion policy.
    HIP-WI provided coverage for 70 different crops including cotton 
and is available in counties in the vicinity of the Gulf of Mexico and 
the Atlantic, as well as Hawaii. This product is an affordable risk 
management option for many growers who are at risk yearly due to their 
proximity to the coast.
    While we are grateful to RMA for the creation of HIP-WI, additional 
improvements are needed to make it more effective. Growers that 
suffered losses from tropical storms and/or depressions are ineligible 
for HIP-WI since the product is exclusive to hurricanes. Tropical 
storms or other events can have damaging winds while also leaving 
devastating amounts of rainfall causing flooding that will decimate a 
cotton crop especially near harvest.
    RMA should also create a multi-peril crop insurance product that 
gives growers credit for the crop that is in the field instead of only 
crediting growers for their annual production history (APH). In 2018, 
growers in Georgia as well as the Wiregrass region of Alabama and the 
Florida Panhandle were expecting record to near-record cotton yields 
until Hurricane Michael, one of the most powerful hurricanes ever to 
hit the United States. Instead of receiving indemnities on crops that 
were yielding 1,000 to 1,500 pounds an acre, growers were only 
compensated on APH information well below the actual yields on the 
farm. Growers should have an option to purchase a product that will 
insure their expected crop value.
    APH looks back at a grower's history over a 10 year production 
window to determine the insurable value of the crop. However, producers 
continue to see annual improvements in their crop yields due to 
constant improvements in crop technologies and more efficient 
production practices, many of which contribute to soil health. These 
improvements often cause the yield data in a grower's APH to lag or 
underestimate the farm's current yield potential. These continual 
improvements should be captured in today's crop insurance products.
Oppose Arbitrary Means Testing or Limitations
    In the past, there have been proposals that would impose arbitrary 
means tests to crop insurance or limit the amount of premium discount a 
producer can receive. I strongly urge you to oppose any attempt to 
implement any proposal along these lines. While we believe these limits 
should not apply to any farm program benefits, crop insurance is 
categorically different. Limiting access to these products would cause 
some producers to completely exit the crop insurance market. Their 
exodus from the program would in turn impact all remaining producers 
who purchase crop insurance by altering the risk pool and potentially 
increasing the premium rates across the board.
Conclusion
    In closing, the NCC is grateful for the role Congress and RMA have 
played in making crop insurance a functioning and affordable option for 
the vast majority of U.S. cotton producers. When disasters have arisen 
or areas for improvement in crop insurance have surfaced, the 
Agriculture Committees as well as USDA have responded to ensure crop 
insurance continues to be a critical part of the portfolio for cotton 
growers for years to come.
    We are grateful for the opportunity to testify, and we look forward 
to working with the Committee to address the necessary improvements 
discussed in today's hearing. I will be happy to answer any your 
questions.

    The Chair. Thank you, Mr. Cromley.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between the Majority and the 
Minority Members. You will each be recognized for 5 minutes in 
order to allow us to get through as many questions as possible. 
As a reminder, please keep your microphones muted whether you 
are with us virtually or here so we can minimize any background 
noise and make sure that we pay attention to our business at 
hand.
    I am going to start by recognizing myself for 5 minutes 
with questions.
    Mr. Offerdahl, I will start with you. As a developer who 
has gathered data, put together product proposals, and gone 
through the submission process for new risk management options, 
can you please talk about how the Federal Crop Insurance 
Corporation reviews proposed products and the sort of 
considerations they have to make in evaluating and approving 
those proposals? And just as a follow-up to that, if I can make 
this a two-parter--you want me to wait till the second part?
    Mr. Offerdahl. No, ma'am. I will try and----
    The Chair. Okay, second part, can you also talk about the 
confidentiality requirements that are in place as products are 
reviewed and whether you think confidentiality is required?
    Mr. Offerdahl. Okay. So thank you very much for your 
question. First, to talk about the data that is required in the 
submission process, generally, the best ideas for new crop 
insurance products come from producers themselves. They are the 
ones who best understand the risks that they are facing and the 
limitations of the current products. So typically, a new 
product development process starts with a phone call from a 
producer who has a specific problem they are looking to solve. 
From there, the first task is to try to determine if crop 
insurance is the best way to address this problem. And in a lot 
of situations, it is not. There are other things that producers 
can do to manage their risk or to address the problem. But 
occasionally, it turns out that crop insurance is the best way 
to address that problem. From there, there is a wealth of data 
available, whether it be historical data captured by the 
National Agricultural Statistics Service or ERS or data 
captured by the Risk Management Agency itself. But in a lot of 
sources, it is also university data or data from other places. 
These have to be pulled together and then used to develop a 
full submission that meets the standard of actuarial soundness. 
And this is a critical concept within crop insurance because 
there are private companies that are sharing risk with the 
Federal Government. It is very important that we can quantify 
the risk that these policies impose.
    From there, it becomes a process of writing insurance 
contracts and assuring that the purpose of the policy is met 
with the language that is put into it. The 508(h) approval 
process involves both presenting to the Risk Management Agency 
staff, and within the Federal bureaucracy, you will not find a 
more qualified, talented group of people. And they run us 
through the rigor of all of the sort of questions and concerns 
that might come up before we even take the first step in the 
process.
    From there, it is submitted to the Federal Crop Insurance 
Corporation, a board of experts and farmers, who will consider 
the merits of the program. If they like what they see, it goes 
out to expert reviewers. These are usually actuaries or 
academics who have no incentive to see these programs approved. 
And they will provide an awful lot of comments and questions 
and concerns. And not until those are all fully addressed can 
we go back to FCIC and ask for approval in those programs.
    So the process has multiple steps. We talk about it as a 
process of checks and checks and checks and balances because it 
is critically important that we not put something out there 
that changes people's incentives. Instead, we are looking to 
improve the program.
    So to your second part of your question where you were 
talking about confidentiality, the program makes provision for 
confidentiality, and the developers themselves are the ones who 
choose whether or not that confidentiality is to be maintained. 
Historically, and clearly, RMA staff and FCIC, everyone within 
that process maintain strict confidentiality themselves. They 
absolutely respect the submitter's right to keep a product 
confidential or not. And that is because a lot of the data and 
pieces of the program that go in are confidential themselves, 
and some of this is proprietary information from private 
companies, and they don't want any individual farmer's 
information to be distributed.
    But when it comes down to the basic concept of the program 
and what it is looking to achieve, there is a lot of runway 
required. These companies, these agents, the producers 
themselves need to understand what the program is, what is 
coming down the pipe, and what they can expect for future risk 
management needs. The principal benefit of crop insurance 
against disaster or other programs is predictability, 
understanding what sort of coverage can be available to you and 
how it will operate. And if a program is in development and it 
is rushed through or if it is released to insurance providers 
or companies too quickly, unfortunately, they won't be ready to 
do a good job of servicing it. So my belief is that 
confidentiality has been taken too seriously by most developers 
and that a more inclusive development process benefits 
everyone.
    The Chair. All right, thank you, Mr. Offerdahl. You know 
what, I have only got 42 seconds left, and it would require 
more time than that.
    Mr. Offerdahl. Apologies. I am sorry.
    The Chair. No, that is okay. It was very thorough, though. 
I will give you credit for that.
    I will now yield to our Ranking Member, Mr. Austin Scott of 
Georgia.
    Mr. Austin Scott of Georgia. Thank you, Madam Chair.
    And after Hurricane Michael, I was one of those that met 
with the different people in the Administration, and the 
concept of pre-funding disaster relief was actually one the 
things that was part of that discussion. And it came because 
there was a lot of damage in areas where there really wasn't a 
crop insurance program. Pecan orchards, for example, there was 
not a program that was affordable. And when we met with the 
Administration, we were told that the existing Tree Assistance 
Program, which would provide about $15 per tree, was adequate, 
and it simply isn't.
    And so when we talk about pre-funding a disaster program, 
it is not intended to replace crop insurance. There certainly 
are traditional commodities where crop insurance works quite 
well, but there are a lot of other groups where crop insurance 
doesn't work at all. And we saw those significant losses from 
Hurricane Michael, and had we not had disaster relief, I think 
a lot of our people wouldn't be farming today.
    So it is intended to work in conjunction with the crop 
insurance system, not in lieu of it. And for traditional 
commodities there has always been the discussion that you would 
not be eligible for those funds if you did not purchase crop 
insurance up front. But we all know there are simply crops out 
there that there are no insurance programs that work for.
    With that said, Ms. Fowler, in your testimony you talked 
about the adverse impact the cap on administrative and 
operating expenses is having on agents, particularly on those 
that primarily sell and serve specialty crop policies. If left 
unaddressed, what do you believe the impact will be on growers 
for these agents who write the policies?
    Ms. Fowler. Thank you for your question, Mr. Scott. The 
specialty crop area, as actually what I have testified earlier, 
we have now 130 crops. And that is where the crop coverage has 
really been enhanced is in that specialty crop area. They are 
very unique. They are very tailored to what the options are in 
that area. And actually, with the inflation rate, this problem 
started quite some time ago, and we have moved along. But 
currently, we need to have some extra inputs in that area just 
simply so that we can have enough staff, enough agents trained, 
specialized folks in that area to come across and address these 
specialty crop needs.
    Mr. Austin Scott of Georgia. Well, one of my concerns is in 
the development of new products. If you are developing new 
products, you probably have some additional expenses in 
administration as those new products are coming to market, with 
uncertainty in what it is going to cost to operate.
    Mr. Cromley, in your testimony, you mentioned a very 
staggering statistic. In 2021, 10.8 million acres of upland 
cotton were protected by some form of crop insurance. This 
represents more than 97 percent of all upland acres. How did 
the National Cotton Council work with USDA's Risk Management 
Agency to increase crop insurance participation?
    Mr. Cromley. [inaudible] question, Mr. Scott. I think 
probably the most--my first impression is the high risk in 
growing a cotton crop. I mean, it is obvious that all growers 
just about have to have crop insurance in some form to survive 
in today's environment. So that will be my first comment. 
Second, National Cotton Council and cotton farmers have for 
years worked with the organizations that have been mentioned 
here before. The new products that come online are targeted----
    Mr. Austin Scott of Georgia. I think we are having a rural 
broadband issue there. The point is that 97 percent of upland 
cotton is now insured, and it has not been that high in the 
past. And I do think that the association, the agents have done 
a good job of having the growers understand the value of the 
insurance. I do hope there is a way that, looking forward after 
2018, what he testified was absolutely accurate. The yields 
that were above the ground were significantly higher than the 
10 year average had been. And I hope that, as we push forward, 
we are able to find a way to give producers the ability to step 
up if you will the coverage to actually reflect the pre-harvest 
value of it.
    Madam Chair, my time is out. We have obviously got some 
rural broadband to work on in southeast Georgia. And with that, 
I yield back.
    The Chair. And a lot of other places as well. Thank you, 
Mr. Scott.
    I will now recognize the gentleman from California, Mr. 
Carbajal, for 5 minutes.
    Mr. Carbajal. Thank you, Madam Chair, and thank you to all 
the witnesses for joining us today.
    California has more agriculture production than any other 
state. A significant amount of this production comes from my 
district, where some of the most delicious specialty crops are 
grown, including strawberries, avocados, blackberries, and 
more.
    Whole-Farm Revenue Protection is the only insurance product 
available nationwide, which ensures the entire revenue of a 
farm's operation, including specialty crops and livestock. With 
its unique diversification discount, it is in theory a forward-
thinking product for diverse producers and those looking to 
diversify. However, in practice, the program is inhibited by 
burdensome paperwork requirements, unclear costs, and 
disillusionment from both farmers and insurance agents.
    Ms. Fowler, is there a role for our Congress to help 
streamline program access? And how can insurance providers do 
more to educate agents and the market about this product?
    Ms. Fowler. Thank you so much for your question. And yes, 
it is an extremely complicated program. And yes, it is very 
hard to be straightforward with that program. I think we can 
actually come in and make improvements. I think it is a very, 
very valuable program for your specialty crop people there in 
California. But yes, it does need more improvement, and I think 
we could all work together with RMA. And I know they have 
overcome several challenges and changing some limits for that 
product also.
    Mr. Carbajal. Thank you, Ms. Fowler, and sorry, I might 
have been inadvertently said mister initially, so I apologize 
for that.
    Ms. Fowler. It is okay.
    Mr. Carbajal. It is an indisputable fact that climate 
change has caused severe weather events across our nation. 
California knows this all too well with prolonged drought and 
increasing severe wildfires year round for that matter. Climate 
change is making it more difficult for farmers to reliably grow 
our nation's food supply. Thankfully, growers are resilient and 
not easily discouraged. But the Federal Government must make 
sure farmers are insured for tough times.
    Mr. Haag, where do you see the program going over the next 
5 to 10 years, especially given the impact climate change is 
having on farmers? Are there specific ag sectors that we need 
to focus on to encourage more participation within crop 
insurance?
    Mr. Haag. Thank you for that question, Senator. At NCGA, it 
is always important that we cover our goals that we would like 
to have for corn, plus to make sure our other crops, no matter 
if we grow in our state or your State of California that are 
protected because of how important it is for those individual 
farmers to have that safety net or the tool in their toolbox. 
We just got to continue to push forward and making sure that 
the other politicians that don't appreciate crop insurance, 
that we can convince them how important it is for the farmers 
because with our inputs right now, we have to have that safety 
net or that tool in order to continue farming in the next 
years. So I would say it is just as a matter of the commodities 
we are still working together and pushing forward for a strong 
crop insurance program.
    Mr. Carbajal. Thank you, Mr. Haag. And you demoted me by 
calling me a Senator.
    Thank you. Madam Chair, I yield back.
    The Chair. All right. Thank you very much, Mr. Carbajal.
    At this time, I will yield to Mr. Allen from Georgia for 5 
minutes.
    Mr. Allen. Thank you, Madam Chair, and good afternoon, 
everyone and panelists. And thank you for giving us your time 
today.
    The issue we are discussing obviously is crop insurance, 
and it has never been more timely. Commodity prices overall are 
high right now, but for many farmers, the cost of doing 
business has increased at a faster rate. According to a study 
conducted in April by Dr. Don Shurley, Professor Emeritus of 
Cotton Economics at the University of Georgia, while cotton 
prices are 20 percent higher than 1 year ago, production costs, 
both variable and fixed, have risen over 30 percent during the 
same time span. Dr. Shurley has also documented an inflation 
rate for the price of items used in farming at a significantly 
higher rate of inflation than the national average.
    As we write the next farm bill, we must analyze this 
problem our farmers have faced in recent years. It reminds me 
of the early 1980s. Their profit margins are disappearing, the 
issue is not sustainable, and we must reckon with it.
    Ms. Fowler, can you speak to what Congress can do to ensure 
we are not undermining the current crop insurance program? And 
is there any way Congress can help promote participation?
    Ms. Fowler. Thank you for your question. Yes, I think so. 
There are some additional products that we can take a look at, 
but yes, we need to have greater levels of coverage. We need to 
be able to participate at a higher level of coverage that is 
affordable, especially when the margins are so skinny out there 
at this point in time. And I think if we can look at that and 
maybe increase the baseline to the budget and be creative in 
the new farm bill, that would be very helpful to producers for 
higher levels of coverage.
    Mr. Allen. Now, for our farmers to be able to borrow the 
funds necessary for production ag, obviously, you have to have 
crop insurance. Do you require crop insurance?
    Ms. Fowler. Some lenders do require crop insurance, but 
actually lenders like crop insurance. I mean, they can see what 
the crops--they are there with cash flow rather than an asset 
lending base that we had back in the 1980s.
    Mr. Allen. Okay. Do we have Mr. Cromley on? Lee, we got to 
fix our broadband down in rural Georgia, don't we, my friend?
    Mr. Cromley. Absolutely.
    Mr. Allen. Mr. Crowley, in your testimony you mentioned the 
need for higher levels of insurance coverage at a more 
affordable rate. What ideas have been discussed for a cost 
efficient coverage program for the benefit of all of our 
farmers? Have we been in discussions about that through Farm 
Bureau and the other ag agencies to try to rectify this 
problem?
    Mr. Cromley. There have been ongoing discussions about this 
throughout all the industry, and I think the current situation 
just underscores the fact that with all the increases that you 
referred to, increases in all costs, our fertilizer costs have 
doubled, seed costs have gone through the roof, fuel and 
everything that fuel touches. So our margins are just 
unbelievably small right now.
    And the problem that concerns me with crop insurance is 
with this tight margin, something is going to have to give in 
order for this to work. [inaudible].
    Mr. Allen. I have about a minute and 20 seconds left, Mr. 
Cromley, you attended a farmer roundtable in Statesboro, 
Georgia, recently, and at that roundtable, I saw a lot of fear 
in the room not only with what you are having to deal with as 
far as inflation today but what it is going to look like 
tomorrow. In other words, as I understood it, it was hard to 
even tie down a price on fertilizer. And I am hearing the same 
thing, by the way, in the construction industry, which I was a 
part of, and other industries. So where are we right now? Are 
you continuing to see the price of the things you need--and of 
course, there is some regulatory resistance against the 
products you use to harvest and to get the yields required. 
What are you seeing right now?
    Mr. Cromley. I think you are exactly right in your 
comments. I think uncertainty and volatility are probably words 
that would describe the countryside right now, at least where I 
am. There is just so much uncertainty about everything, and 
that goes back to crop insurance a little bit from the 
standpoint that crop insurance is one thing that can give us 
some stability, some predictability. And so that is why it is 
really even more important now than ever. I think some premium 
discounts always would be something we could look at and other 
things to make it a little more affordable. As I was saying 
earlier, I think crop insurance might be one of those things 
that some people are forced to not participate in as margins 
get tighter, and I hope that is not the case. But yes, I think 
it is reaching that point, that level of concern.
    Mr. Allen. Okay. Well, listen, thank you so much. Thanks to 
all of our witnesses. And, Madam Chair, I yield back.
    The Chair. Thank you, Mr. Allen.
    I now recognize Mr. Lawson from the State of Florida, who 
is with us, virtually for 5 minutes.
    Mr. Lawson. Thank you very much, Madam Chair, and to you 
and Ranking Member Scott for holding this meeting. And I would 
like [inaudible] all our participants to our meeting today.
    Federal crop insurance is an incredibly successful public-
private partnership that stands as the primary safety net for 
U.S. producers. However, among producers and crop insurance 
companies, we have heard how complicated and time-consuming it 
can be to insure specialty crops. And we have a lot of 
specialty crops in Florida with many of these consumers being 
small and just historically underserved producers. In your 
testimony, Ms. Fowler, you mentioned that cuts in 
administrative operation, pro-policy pay method unfairly 
impacts specialty crop producers. In addition to increasing the 
A&O to 2020 level, what else can Congress do to address this 
gap and incentivize crop insurance companies to work with 
specialty producers?
    Ms. Fowler. I think making those adjustments in the 
specialty crop area is a start and a great place to be. I would 
encourage to make it easier for participation with those agents 
to get staffed up not only through technology but skilled staff 
members that can reach out to more people. And also, the 
specialty crop area is so unique and so driven toward that 
farmer's own individual operation, and if we can continue to 
tweak these products and make them more straightforward so they 
are understandable and you know exactly where you are going to 
be, I think there is a lot of opportunity to continue to grow 
that area.
    With all due respect, once again, the specialty crop area 
is an area that has increased tremendously, and there is a lot 
of work to make sure that you individualize that coverage. So I 
would look forward to the opportunity to help in that area.
    Mr. Lawson. Okay. Thank you very much. And, here in Florida 
we always plan for hurricanes. It is hurricane season. Mr. 
Cromley, you mentioned that how Hurricane Insurance Protection-
Wind Index does not provide coverage for losses due to tropical 
storms even when devastating winds and rain caused damage. Do 
you believe that tropical storm damage should be included in 
the protection of a wind index? Is there any different program 
that you may feel better that needs to cover these losses?
    Mr. Cromley. Thank you, sir. I think the hurricane product 
is a good product. I was glad to see it. It is something that, 
like I say, I am 60 miles from the coast, so it was critical 
for me to consider this product.
    We had an example--I can give you an example in Texas where 
a grower was a mile or 2 outside the hurricane zone and had 
tremendous loss because he was that close, but yet he didn't 
qualify. He had tremendous wind, tremendous rain, tremendous 
damage, but because it was not hurricane-level damage, he was 
out. And I don't think that was the intent of the program. I 
think the program could be changed just a little bit to where 
damage would be not necessarily wind but actual damage could be 
measured and determine the level of loss. So I would hope that 
is something that you would consider. Hurricane winds are 
devastating and terrible, but there are tropical storms and 
things that are just as devastating at times.
    Mr. Lawson. Okay. Does anyone else want to comment on that? 
What about you, Ms. Fowler?
    Ms. Fowler. Yes, the hurricane coverage has been a great 
product that has come into play. I don't write any of that 
currently, but I have a lot of agent friends that have written 
a lot of hurricane insurance coverage. And the producers like 
that, and it has been good coverage, especially for that 
certain peril.
    Mr. Lawson. All right. Madam Chair, I yield back.
    The Chair. All right. Thank you very much, Mr. Lawson.
    At this point, I will yield to the gentlewoman from 
Illinois, Mrs. Miller, for 5 minutes.
    Mrs. Miller. Thank you, Madam Chair and Ranking Member 
Scott. This is an important topic, and I assure everyone that 
our number-one priority is protecting crop insurance as our 
number-one risk management tool.
    So I have a question any of the witnesses can answer. Can 
any of the witnesses explain the dangers of using crop 
insurance rates as a tool to change farmers' behaviors, likely 
in the name of climate change, or incentivize certain practices 
that have yet unproven yield benefits?
    Mr. Haag. Thank you for that question, Representative. At 
NCGA that--you mentioned how strong that we want to make sure 
crop insurance stays right where it is at. I had a tough time 
understanding a couple of your little points there that you had 
made because of my older age here. I guess my hearing is not as 
great as it was once, but could you repeat just the one with 
crop insurance and maybe some fraud that you were talking 
about?
    Mrs. Miller. So I am concerned about the danger of using 
crop insurance rates as a tool to change farmers' behaviors, 
such as the climate change, and incentivizing certain practices 
that as of yet have unproven yield benefits.
    Mr. Haag. Okay, right. As of right now, I am not able to 
talk a lot about that, but I can say as far as NCGA is 
concerned we want to make sure that we are strong this way, 
that we are not making farmers change--if there is going to be 
problems with the new laws with climate change or whatever, 
that is going to have to be weighed just down the road, I mean, 
my opinion to see what happens. We continue to look into that. 
But as of right now, we have not talked an awful lot about 
changes that way from crop insurance, the way we have it now to 
where it might be down the road. Maybe I am not helping you, 
but that is where we see it going right now, that we are not 
looking that far down the road.
    Ms. Fowler. Thank you, and thank you for the question. 
Actually, I think I addressed that a bit earlier as far as crop 
insurance is concerned. Crop insurance was set out to protect 
the profitability of the farmer. And I think at this point in 
time that is where we need to stay focused. You don't want to 
get too strung out on too many different things and then you 
just water down the crop insurance product. And we need to 
stick true with the practices that we currently have, and we 
need to cover the profitability. We have reinsurance contracts 
out there with real reinsurance companies, and I think they are 
going to want to understand how to mitigate that risk.
    Mrs. Miller. Thank you. And then, Ms. Fowler, as an 
experienced crop insurance agent that has seen the program 
evolve over time, can you speak to the growth of the program 
and how it has provided you the opportunity to start a business 
and create job opportunities in a town like Memphis, Tennessee?
    Ms. Fowler. Okay. Thank you once again for the question. 
But it is Memphis, Texas, with a population of about 2,500, so 
rural America at its best. But yes, it has been incredible to 
see this program evolve. It has been incredible to watch 
producers who have had this crop insurance and have had 
stability within their family operations. I am now insuring 
down to the second and third generation with those producers. 
So it has been great. I have 19 employees in three offices, and 
we are engaged. We do everything we can. Sometimes it is pretty 
skinny out there with all the different things that we want to 
deal with and that we help producers when they come in. But 
also in turn, we get involved in the community. We get involved 
with community pieces whether it be with FFA projects, whatever 
the community might need. And so it is great to see that and 
have that opportunity.
    Mrs. Miller. That is great. Thank you. And quickly, this is 
for any of the witnesses. What are the potential impacts if the 
U.S. were to completely forego the private-sector delivery 
system, as we have seen proposed by some and revert to a 
government-run insurance program through FSA? What would you 
say to someone who champions this type of proposal?
    Ms. Fowler. Once again, I will be glad to step up. We work 
closely with FSA. FSA has their programs, we have our programs, 
and quite frankly, we need each other out there and we need to 
be able to work together. But once again, that program was 
delivered years and years without a lot of participation, and I 
think crop insurance has its own absolute track record, the 
success record that we have today. And one thing is that we can 
deliver timely payments in order for a producer to have cash 
flow and get back to the bank and start and go again.
    Mrs. Miller. Thank you so much.
    The Chair. Thank you, Mrs. Miller.
    I will now yield to Mr. Mann from the State of Kansas for 5 
minutes.
    Mr. Mann. Great. Thank you, Chair Bustos, for having this 
hearing, you and Ranking Member Scott, and to all our 
panelists. And we are 14\1/2\ months out from this current farm 
bill expiring. Crop insurance will be my highest priority and I 
think should be the highest priority so far as production 
agriculture goes for this Committee.
    Kansas farmers have told me repeatedly that as we look at 
crop insurance in the next farm bill, let's use a scalpel and 
not a sledgehammer. Let's make some tweaks, let's work to 
improve it, but let's acknowledge that what we have is a good 
program and it is a successful public-private partnership that 
I would argue to my last breath to anyone is good for 
producers. It is good for rural communities. It is also good 
for our consumers to have a constant food supply all over this 
country.
    I do also think we need to acknowledge that we are in an 
era of record high input prices, and the safety net that 
currently exists, was designed to withstand a fall from, say, 
10. But when you double, quadruple input prices and that same 
producer is falling from 40, I think we need to really discuss 
is the safety net the appropriate height off the ground so to 
speak moving into this farm bill?
    I have a handful of questions. I will start with you, Ms. 
Fowler, and thank you for being here. In my view, one of the 
key features of crop insurance is the ability for private 
entities to craft policies to address risks or cover new 
commodities. The process which you refer to in your testimony, 
the 508(h) process, is well-supervised and allows the Federal 
Crop Insurance Corporation Board to control new product 
approvals without OMB interjection. Can you explain why it is 
crucial that the FCIC has autonomy over Federal crop insurance?
    Ms. Fowler. Well, the FCIC actually is the background to 
the crop insurance. That is who actually writes the policies, 
they write the procedures for the background for the insurance 
there. But actually, I believe you were visiting about falling 
the 40. We really need some additional participation at higher 
levels, and the extra products that have come from the 508(h) 
process, whether it be the SCO, STAX, ECO, all of those 
products are great products, and they are just beginning to 
evolve. We have just now started with those products, and I 
think if we have some additional price support and 
participation with those, those products will really help us. 
They are already set in place and can make a timely payment.
    Mr. Mann. Great. Well, one last question for you, Ms. 
Fowler. As you know, up until 2015, the Risk Management Agency 
adjusted the overall A&O cap annually for inflation, and it has 
remained stagnant since. Can you discuss what impact that has 
had on crop insurance agencies across the country?
    Ms. Fowler. Yes, once again, thank you for that question. 
Yes, we do everything we need to do. We go out, we help 
farmers, but yet, I am conscious of what those expenses are. 
And I have a highly skilled staff. And you just don't say walk 
away for 6 months, and we will see you back. I mean, it takes a 
year to train any type of staff or team member within my 
agency. So yes, we try to do more with less. We use technology, 
we try to be very efficient, we try to be thorough to start 
with. But yes, I am very conscious of that. And, those folks, 
we live in rural America, they have home payments, house 
payments, they got kids going to school, so it is important 
that I try to stay static and do the best job I can at managing 
expenses, especially in this year where we are looking at a lot 
of losses.
    Mr. Mann. Yes, and I think we have to acknowledge that the 
program has to work for the producer, but it also has to work 
for the insurance agents that are delivering that product and 
are boots on the ground, so thank you for that.
    Last question that is for you, Mr. Haag. As you know, 
Federal crop insurance policies can be improved with additional 
product development and innovation such as the trend yield 
adjustment, which has been very beneficial for corn producers. 
What are some specific steps that National Corn Growers 
Association has taken to ensure risk management tools are 
evolving to continue to meet the needs of producers today and 
into the future?
    Mr. Haag. Thank you for that question there, 
Representative. It is important that the core quality that we 
use right now, the corn maturity is everything, that we are 
raising that much more corn so that adjustments are very 
important, going up to make sure that you are covered with the 
rate, with the other percentage you want to use. So that trend 
yield is very important because if we have 4 good years in a 
row, you have 4 good years of a base there, a fifth year, and 
all of a sudden you have a poor year coming in there, that is 
going to help you when you have that poor year going--and up 
there--so you are going to get paid back on respectable money. 
Yes, it does come down like it has, but in a year or 2, you are 
going to get back to normal where you don't have that--hope you 
don't have that drought for 2 or 3 years in a row to do that. 
So that trend yield, it is important, and that is one of the 
bigger things I think has had a big plus with corn growers to 
make sure that they have--to taking crop insurance on, that it 
is more beneficial for them in the end.
    Mr. Mann. Great. Great. Thank you. I see I am past my time. 
Thank you.
    The Chair. All right. Thank you very much, Mr. Mann.
    Ranking Member Thompson, are you settled in enough for me 
to yield to you for a second? Sorry to throw this at you so 
quickly.
    Mr. Thompson. Absolutely.
    The Chair. All right.
    Mr. Thompson. Thank you.
    The Chair. The Ranking Member of our full Committee, I will 
now yield to you for 5 minutes.

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

    Mr. Thompson. Thank you very much. Thanks for your 
patience, Madam Chair. As you know, I like to be here at the 
beginning, not at the end of these, so my apologies to our 
witnesses. But thank you so much for testifying and for your 
written testimony.
    Madam Chair, Ranking Member Scott, thank you both for 
calling this important hearing, and I apologize to you and the 
witnesses for my tardiness, but I wasn't able to make the 9:30 
start time on late notice, so thank you for accommodating me.
    Since becoming a Republican leader of the House Agriculture 
Committee, I have embarked on what I am calling a perpetual 
barnstorming tour that has taken me to more than 40 states to 
hear directly from the producers. On these journeys, the most 
commonly mentioned piece of Federal policy is our crop 
insurance program. I have heard firsthand from numerous farmers 
how crop insurance saved them from bankruptcy following a 
disaster.
    But its purpose goes well beyond helping producers in the 
wake of a loss. Crop insurance provides a base level of 
reliable risk management that helps keep the economic engine of 
rural America running in good years and, quite frankly, in bad. 
Without crop insurance, lenders would not be able to provide 
the levels of credit to the farmers necessary to operate a farm 
in today's high-cost environment, and producers would not have 
the ability to make investments in their operation to take 
advantage of new technologies and practices. I have even been 
told that crop insurance is often what stands between us and 
the 1980-style farm financial crisis, which was so severe it 
even wreaked havoc on the economies of some of our largest 
cities because crop insurance provides collateral to lenders 
and obviates the need for asset-based lending.
    The key selling point for me on crop insurance is the 
framework of the public-private partnership between the 
government and approved financial providers, agents, and 
farmers. This partnership allows USDA to set fair prices for 
coverage, companies to compete on service, and farmers to have 
skin in the game. The result is a program that is fair to the 
taxpayer, reliable for farmers, and provides job opportunities 
in rural communities for agents and loss adjusters.
    The numbers tell the success story well. Since the 
Agricultural Risk Protection Act (Pub. L. 106-224) was passed 
in the year 2000, insured acreage has more than doubled and the 
value of crops insured has increased almost six-fold from $35 
billion to nearly $200 billion. Now I am sure we will--we have 
heard in discussion today about the ad hoc assistance that has 
been provided outside of crop insurance, and I have been 
supportive of those efforts in the immediate term to give 
additional help to farmers suffering devastating losses. But I 
do not believe this will remain a viable option for an extended 
period of time, and we must proactively look at how crop 
insurance can be improved to cover these losses.
    Today's hearing provided a valuable opportunity to solicit 
the firsthand experiences of farmers on the ground dealing with 
these losses and the perspectives from those within the 
industry that can help guide this Committee during the 
development of the 2023 Farm Bill.
    And finally, I want to touch on climate and the push by 
some to hijack crop insurance program to carry out a half-baked 
environmental experiment. This must stop before irreparable 
harm is done to a farmer's most critical risk management tool. 
Let me be clear. This isn't an ideological concern. I support 
efforts to expand and improve our conservation work. But crop 
insurance already provides clear incentives to be good stewards 
of the land. The more a farmer can increase their yields or 
mitigate losses, the better their coverage options will be.
    And we don't need to cherry-pick certain practices that 
might only work in specific regions of the country and use crop 
insurance to try and force all farmers into adopting the 
practice. We already provide nearly $6 billion per year in 
locally led incentive-based conservation programs through title 
II of the farm bill. That is the appropriate place to have 
these conversations, not in title XI crop insurance. Now, I am 
confident if the data supports it and agronomic conditions 
allow it, farmers will naturally gravitate towards adoption of 
the practices best for their farms. We don't need to use crop 
insurance as a carrot, or worse, as a stick to force their 
hand.
    Madam Chair, thank you again for convening this hearing, 
and thank you to our five witnesses for agreeing to be here 
this morning.
    And I may have come in late, but I got a chance to go 
through your written testimonies last night, and I do have a 
few questions. First, let's start with Mr. Haney and Ms. 
Fowler. Every farm bill cycle we have to battle critics who 
attempt to impose limitations or means testing on crop 
insurance. And one of these organizations, the National 
Sustainable Ag Coalition, just released a report examining the 
impact of a variety of these proposals that show that they 
would cut premium assistance by up to 30 percent.
    Mr. Haney or Ms. Fowler, could you explain the impact 
proposals such as these would have on the viability of the 
program overall? In particular, what impact would this have on 
specialty crop producers, which are typically ensuring high-
value crops?
    Ms. Fowler. Thank you for that--go ahead.
    Mr. Haney. No, go ahead, Kathy, please, by all means.
    Ms. Fowler. Okay. Thank you, Congressman Thompson, for 
that. I can give it to you pretty short and straight, absolute 
nonstarter. And simply put is that you start taking people out 
of the risk pool, it takes all of us to keep the loss ratio 
under the statutory 1.0 percent. And we have been able to 
manage, and we have been able to do that, but we need all 
people in the pool, and we need to make sure that everybody's 
engaged, because otherwise, this program doesn't work.
    Mr. Thompson. Ms. Fowler, thank you.
    Mr. Haney, go ahead.
    Mr. Haney. Thank you, Congressman. And I couldn't say it 
any better than Ms. Fowler has. At the end of the day from an 
actuarial perspective, if you start removing those larger bulk 
premiums at the top end, it will have a dramatic effect on the 
smaller producers and the smaller premiums. They will have to 
carry if you will the load of the loss ratios. And Ms. Fowler 
is 100 percent correct. It will have a dynamic effect if that 
is done.
    Mr. Thompson. Very good. I like how she summed it up as a 
nonstarter.
    Mr. Offerdahl, as you are aware, I have expressed an 
interest in exploring options for a safety net based on margin 
to address the squeeze producers find themselves in with sky-
high input costs. The success of the Dairy Margin Coverage 
Program is what spurred my interest in this topic. Can you 
briefly explain how the margin protection insurance policy you 
developed works? And do you foresee opportunities to expand the 
availability of that policy in the future?
    Mr. Offerdahl. Yes, and respectfully from my first answer 
very briefly, the Margin Protection Program is designed to 
protect people from decreases in commodity prices, decreases in 
yield, or increase in input costs. A program has been available 
for a handful of crops since 2016, and the crops for which it 
is available are the ones where we had the best data. It is a 
508(h) experiment that has been highly successful, but at this 
point, participation is only about 6,000 policies a year. It is 
a bit more expensive because it enjoys a lower subsidy rate 
than other crop insurance programs as an experiment, but there 
are tremendous opportunities to expand it nationwide rather 
than just core Midwest states and a handful of crops.
    Mr. Thompson. Very good. Well, thank you for that. Mr. Haag 
and Mr. Cromley, could you speak to the relationship you have 
with your crop insurance agent, and how has the service 
provided by your agent differed from that of the Farm Service 
Agency, particularly throughout the pandemic? Mr. Haag, why 
don't you go first?
    Mr. Haag. I think it is much easier talking with our crop 
insurance agents. They have a better understanding of what 
happens out on the farm. The FSA are good people that work in 
the offices, but they don't get a chance to get out to the 
farms to see how your operation is running and just get the 
little technical things about how things work. So working 
through an agent, in my opinion--and that is what we do--it is 
much easier. It is much better. He understands our farm program 
and our farms and we get the best advice from him.
    Mr. Thompson. Very good. Thank you.
    Mr. Cromley, any comments?
    Mr. Cromley. I would echo that in the sense that our agent 
is involved in agriculture. He farms some. He is aware of the 
issues. He knows the challenges. FSA people are great, they are 
great, but they are not the same level of participation, not 
the same level of understanding of the challenges we face. So 
that public-private relationship is just absolutely critical to 
all of us I believe.
    Mr. Thompson. Well, once again, I want to thank you for 
that Mr. Cromley. And, once again, thank you to all of our 
witnesses, and thank you to our Chair and Ranking Member for 
this Subcommittee hearing, much appreciated. And I yield back.
    The Chair. Thank you, Mr. Thompson. And thank you for being 
so good at being part of our Subcommittee hearings. We 
appreciate your attendance and your participation in all this.
    I want to thank our witnesses, the three who are here in 
person, the two who were with us virtually. We have Mr. Haney, 
Ms. Fowler, Mr. Offerdahl, Mr. Haag, and Mr. Cromley, and we do 
appreciate it. Thank you also to everybody for accommodating 
the time change. The First Lady of Ukraine is addressing the 
House and the Senate at 11 o'clock, so we will be heading over 
there. And obviously, Ukraine is very, very important from an 
agricultural perspective as well, so we appreciate you 
accommodating that.
    Before we officially close out, I am going to yield to our 
Ranking Member, Mr. Scott, for any closing comments he may 
have.
    Mr. Austin Scott of Georgia. Thank you, Madam Chair.
    You mentioned Ukraine. I do want to bring up the fact that 
the Russians are actually sending rockets into the wheat fields 
there and setting them on fire. I think that the world probably 
for the first time since the 1940s may watch as a ruthless 
individual in Vladimir Putin uses food or lack thereof as a 
weapon of war, which reiterates the fact that we in this 
country need to make sure that we are taking care of our 
producers.
    So while most Americans think about food as a jar of peanut 
butter or a loaf of bread, those of us on this Committee and in 
this room realize that it is the peanut farmer and the wheat 
farmer that actually grows the crop that allows us to go into 
the grocery store and buy the food that we need.
    Ninety percent of our food supply, I will say that, again, 
90 percent of our food supply in this country comes from 12 
percent of the farmers. The proposals that come before this 
Committee by groups on the far right and the far left that 
would effectively disincentivize those farm families to 
purchase crop insurance are detrimental to the whole ag 
industry and the food supply in this country. If you take the 
best risk out of the system--and our farmers, our large farmers 
are the best risk that we have, they are buying crop 
insurance--then you are going to raise the premium on everybody 
else and make it unaffordable.
    I hope as we go forward, I look forward to writing the next 
farm bill and keeping the focus on the food supply of the 
United States. We do not need to be dependent on foreign 
sources of food.
    With that, Madam Chair, I yield.
    The Chair. Thank you to our Ranking Member. And again, 
thank you to all of our witnesses.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions that were posed by a Member.
    This hearing of the Subcommittee on General Farm 
Commodities and Risk Management is adjourned.
    [Whereupon, at 10:55 a.m., the Subcommittee was adjourned.]


 
                     A 2022 REVIEW OF THE FARM BILL

                              (BROADBAND)

                              ----------                              


                      THURSDAY, SEPTEMBER 15, 2022

                  House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:03 a.m., in Room 
1300 of the Longworth House Office Building and via Zoom, Hon. 
David Scott of Georgia [Chairman of the Committee] presiding.
    Members present: David Scott of Georgia, Adams, Spanberger, 
Hayes, Brown, Pingree, Kuster, Bustos, Plaskett, O'Halleran, 
Carbajal, Lawson, Craig, Harder, Axne, Schrier, Panetta, 
Bishop, Davids, Thompson, Hartzler, LaMalfa, Allen, Rouzer, 
Bacon, Johnson, Baird, Jacobs, Balderson, Cloud, Mann, 
Feenstra, Cammack, Fischbach, Flores, and Finstad.
    Staff present: DeShawn Blanding, Lyron Blum-Evitts, Emily 
German, Josh Lobert, Ashley Smith, Michael Stein, Paul Balzano, 
Caleb Crosswhite, Josh Maxwell, Ricki Schroeder, and Dana 
Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. The Committee, of course, now is in order. 
And I want to welcome and thank everyone for joining us today 
at our hearing, which is entitled, A 2022 Review of the Farm 
Bill: Broadband. After brief opening remarks, Members will 
receive testimony from our witnesses today, and then the 
hearing will be open for questions.
    So, today, we are here to discuss the collaborative 
efforts. And I want to emphasize that word because we will not 
be successful if all of our combined Federal agencies, our 
state agencies are all not working together to make sure that 
the $65 billion that we have appropriated is sufficiently and 
effectively distributed and working. And for that effort to be 
successful, USDA must be able to work with the National 
Telecommunications and Information Administration, NTIA; and 
the Federal Communications Commission, FCC, in awarding this 
$65 billion in broadband funding and examine the role that 
these agencies play in achieving our goal of 100 percent full, 
nationwide connectivity for our rural communities. And rural 
broadband is so critical for our rural areas, not only in terms 
of the distribution of the funding, but to finally establish 
rural broadband it will be a huge economic benefit to our rural 
communities.
    The COVID-19 pandemic highlighted the necessity of reliable 
broadband as workplaces and businesses migrated online and 
healthcare facilities and schools have transitioned to 
telehealth and distance learning. In response, Congress made 
substantial investments in broadband funding to existing and 
newly established Federal broadband programs dispersed across 
multiple Federal entities. That is why I say the key word is 
collaborative, working together. This is the key for success, 
to finally bring rural broadband to our rural communities.
    And of those investments, the bipartisan Infrastructure 
Investment and Jobs Act (Pub. L. 117-58) made the largest 
Federal broadband investment in our nation's history, totaling 
$65 billion for broadband programs at FCC, NTIA, and USDA, the 
primary agencies that administer existing broadband deployment 
grant programs. And as we move forward now toward our 2023 Farm 
Bill, we must understand how these agencies plan to communicate 
and collaborate to effectively reach our shared goal of 100 
percent nationwide coverage. And this is why we established 
procedures for interagency coordination among USDA, NTIA, and 
FCC in the 2018 Farm Bill, and we must continue to engage with 
each other to ensure effective coordination, evaluate the 
agencies responding, and address any problems, any barriers 
that may exist.
    Rural broadband will continue to be a major focus of this 
Committee. We take great pride in being able to finally, as a 
Committee, make sure that our rural communities have the 
necessary funding. We previously held a Committee hearing to 
examine any barriers to our broadband connectivity and 
solutions and opportunities to overcome any impediments.
    Ranking Member Thompson, my good friend, and I also 
introduced the Broadband Internet Connection for Rural America 
Act (H.R. 4374), which would make crucial and significant 
investments in the USDA broadband program to expand broadband 
in our rural communities. And always, I would like to thank my 
good friend, the Ranking Member, for his bipartisan 
cooperation. We did it together, Ranking Member Thompson, and 
your willingness to work with me on this issue, and I 
appreciate that, Ranking Member. Thank you.
    We are always thankful to be joined by Under Secretary 
Torres Small, my good friend. We are so delighted to have her. 
And she is playing a critical role in making sure that we have 
this coordination, which is the key to our success. And we are 
grateful to hear from our second panel as well of outstanding 
witnesses. Your combined experiences and interactions with 
these agencies will help us get a clearer scope of how 
broadband deployment is working on the ground. And we look 
forward to your testimonies. Thank you.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning and thank you for joining us. Today we are here to 
discuss the collaborative efforts of the USDA, the National 
Telecommunications and Information Administration (NTIA), and the 
Federal Communications Commission (FCC) in awarding broadband funding 
and examine the role these agencies play in achieving our goal of 100% 
nationwide connectivity.
    Broadband is a critical tool for rural development, but 
inaccessibility to high-speed internet remains a major barrier for 
rural communities. The COVID-19 pandemic highlighted the necessity of 
reliable broadband as workplaces and businesses migrated online, and 
health care facilities and schools transitioned to telehealth and 
distance learning.
    In response, Congress made substantial investments in broadband 
funding to existing and newly established Federal broadband programs 
dispersed across multiple Federal entities. Of those investments, the 
bipartisan Infrastructure Investment and Jobs Act made the largest 
Federal broadband investment in our nation's history, totaling nearly 
$65 billion for broadband programs at FCC, NTIA, and USDA, the primary 
agencies that administer existing broadband deployment grant programs.
    As we move toward the 2023 Farm Bill, we must understand how these 
agencies plan to communicate and collaborate to effectively reach our 
shared goal of 100% nationwide coverage, which is why we established 
procedures for interagency coordination among USDA, NTIA, and FCC in 
the 2018 Farm Bill. We must continue to engage with each other to 
ensure effective coordination, evaluate the agencies' responses, and 
address any barriers that may exist.
    Rural broadband will continue to be a major focus of this 
Committee. We previously held a Committee hearing to examine barriers 
to broadband connectivity and solutions and opportunities to overcome 
those impediments. Ranking Member Thompson and I also introduced the 
Broadband Internet Connections for Rural America Act which would make 
crucial and significant investments in the USDA broadband program to 
expand broadband in rural areas. As always, I'd like to thank the 
Ranking Member for his bipartisan cooperation and willingness to work 
with me on this issue.
    We are always thankful to be joined by Under Secretary Torres Small 
and grateful to hear from our second panel of witnesses. Your combined 
experiences and interactions with these agencies will help us get a 
clearer scope of how broadband deployment is working on the ground. I 
look forward to your testimonies.

    The Chairman. And with that, I would now like to welcome my 
distinguished Ranking Member, the gentleman from Pennsylvania, 
whom I enjoy so much working with, and we did it together, Mr. 
Thompson. You are recognized for your opening statement.

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

    Mr. Thompson. Well, Mr. Chairman, thank you, and thank you 
for just being a great partner in our work on broadband. And 
thank you to this Committee, completely unified in advancing 
the bill that we did that was thoughtful and, quite frankly, 
would have been very, very effective in bridging the digital 
divide in rural America. And quite shame on those who control 
the House floor for not giving us an opportunity to at least 
have a vote, right? And you and I worked hard to try to get 
that vote to occur.
    The Chairman. Yes, we did.
    Mr. Thompson. We were not successful, but I will address 
the alternative here in just a bit of what was passed, which 
was insufficient for rural America.
    As we have heard across multiple hearings this Congress, 
the need for better broadband connectivity in rural America is 
immense. In the past, I have talked about the checkerboard of 
connectivity in my home State of Pennsylvania, with some 
communities well-served, while their neighbors, sometimes just 
down the road, down the street struggled to download their 
emails.
    While broadband access used to be a luxury, today, internet 
connectivity is essential. It is essential for performing daily 
activities. Life is increasingly conducted more and more 
through the internet, and modern living requires constant, 
reliable internet access to fully participate. Quite frankly, 
rural America, or as I like to call it, essential America, 
deserves to have the opportunity to compete for jobs, for 
economic opportunities, for educational opportunities, for 
healthcare access, all the things that come when we bridge the 
digital divide.
    So it is unacceptable this quilt patch approach that we 
have taken for many years. And it was time to stop that--I 
don't believe what was passed out of the House and was signed 
into law will do that, but I do believe in what we put together 
and worked together in a bipartisan way would have accomplished 
that.
    To address this need, the Federal Government has committed 
tens of billions of dollars once again over the past 15 years 
to fund new broadband systems across the country. The 
bipartisan infrastructure bill alone provided a staggering $42 
billion for broadband infrastructure just last summer. It is 
important to point out, and I think everyone in this room would 
agree, USDA and RUS in particular is the point to bridge the 
digital divide in rural America. And for those who don't know 
and are listening, USDA only got $2 billion. I don't have a lot 
of trust in NTIA or FCC. They received significant dollars back 
under the stimulus in 2010, and they failed to bridge the 
digital divide. That is just based on facts and observations.
    But I am a big, big believer and really thankful for our 
witnesses we have here today from USDA. Today's multiple 
Federal agencies, including USDA, NTIA, the FCC, and Treasury, 
are each individually responsible for distributing billions in 
broadband aid under their purview. Coordinating the 
distribution of those funds is essential. Far too often we have 
seen huge appropriations become insufficient through wasteful 
spending, inadequate oversight, poor planning, duplicative 
application where they go in and rebuild things that were built 
before versus reaching out to that last mile. And it will take 
a concerted effort between USDA--I actually believe it is going 
to take a better investment than $2 billion in USDA--and 
certainly better concerted effort between USDA, NTIA, and the 
FCC, to ensure these taxpayer funds do not meet a similar fate.
    And I remain disappointed that USDA was largely excluded 
from playing its essential role, and a role that it plays very 
effectively. We see evidence of that each and every year in 
more of a piecemeal approach in bringing broadband and its 
unparalleled understanding and reach into rural communities. It 
is the best situated agency to help rural providers serve their 
communities, yet my colleagues in the Senate made a different 
choice, choosing instead to create a new series of programs 
that comes with new bureaucracy and, quite frankly, new 
administrative costs that takes away from actually achieving 
all the--making that investment in resulting in full 
connectivity.
    And so in addition to focusing on coordination, we must 
also ensure these new programs are accessible, they are 
efficient, and they are effective for rural service providers. 
As these new agencies wade into the difficult work of bridging 
the digital divide, it is critical they focus on the unique 
needs of rural communities.
    Thank you to Madam Under Secretary for again being with us 
to talk about rural broadband. I have always appreciated the 
work the Rural Utilities Service does for our rural Americans. 
And thank you to our witnesses on the second panel. I look 
forward to hearing from each of you.
    I would be remiss if I didn't share my utter disappointment 
and, quite frankly, shock that representatives from the Federal 
Communications Commission and the National Telecommunications 
and Information Administration declined the invitation to 
testify today. Their absence is noted, and it illustrates their 
indifference towards the needs of rural Americans and our rural 
communities.
    Mr. Chairman, once again, I really appreciate you and our 
friendship and the work that we have been able to do together 
to advance good, strong bipartisan legislation to bolster 
USDA's broadband programs, and I look forward to working with 
you in the upcoming farm bill to continue our work in 
strengthening rural connectivity.
    With that, I yield back.
    The Chairman. Well, thank you, Ranking Member, I appreciate 
your comments.
    The chair would request that other Members submit your 
opening statements for the record so witnesses may begin their 
testimony and to ensure that there is ample time for questions.
    Yes, and, Members, please mute yourselves. We have very 
important business to do. We are asking our agencies to 
coordinate, and we have to coordinate with the microphone. So 
please, let's mute ourselves until you come on and are 
recognized.
    And now, I am pleased to welcome our first panelist. And 
this is a great person who has done great work here in 
Congress, and now she is the Under Secretary for Rural 
Development at the U.S. Department of Agriculture, Hon. Xochitl 
Torres Small. Welcome.

         STATEMENT OF HON. XOCHITL TORRES SMALL, UNDER 
      SECRETARY FOR RURAL DEVELOPMENT, U.S. DEPARTMENT OF 
  AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY CHRIS McLEAN, 
            LL.M, J.D., ACTING ADMINISTRATOR, RURAL 
                    UTILITIES SERVICE, USDA

    Ms. Torres Small. Thank you so much, Chairman Scott, thank 
you, Ranking Member Thompson, and thank you, Members of the 
Committee. It is a joy to get to speak with you here today.
    As you know, high-speed internet is a utility essential to 
modern life. It is also a cornerstone of rural economic growth. 
It is not news to rural America, but everyone now knows the 
ugly truth when it comes to high-speed internet. So far, most 
of rural America has been left in the slow lane. In the middle 
of COVID, I got a call from a school superintendent in rural 
New Mexico, and he was at his wit's end doing everything he 
possibly could to make sure his rural kids didn't get left 
behind in the middle of the pandemic. And the truth was that 
families, hardworking families in Hondo just didn't have the 
resources they needed, didn't have the internet they needed to 
keep their kids online. Today, we are all reckoning with that 
reality.
    And because the situation is flatly unacceptable, Congress 
and President Biden have acted. Now--and we have heard this in 
your opening statements--agencies across the Federal Government 
have to work together to do something that is both essential 
and very difficult, bring connectivity and speed to rural 
America.
    Last month, Secretary Vilsack announced the Department was 
investing the first tranche of the last round of ReConnect, 
$401 million to provide access to high-speed internet, within 
that were multiple investments in rural places in New Mexico. 
And once completed, households in that very school district I 
mentioned will be able to get 100 megabytes per second, 
symmetrical internet service.
    Now, you know as well as I do we can't lay fiber overnight, 
and the Federal Government can be a slow train. When I was in 
Congress, the work of agencies, that implementation side of new 
laws and appropriations, too often felt like a black box. My 
commitment to you today is that the process of delivering high-
speed internet to communities in need will not be opaque. It 
can't be. I have heard your comments in your opening 
statements, and I want to inform you on what we are doing with 
what we have now because it is too important. It has to be a 
team effort. It is the work of communication, the work of 
partnerships, the work of coordination. And let's be honest, 
sharing with one another across government silos hasn't been a 
strength historically.
    That is why USDA Rural Development is proud to serve as a 
critical coordinator for Federal rural work. Through efforts 
like the Rural Partners Network, we are making sure that 
investments like the bipartisan infrastructure law reach rural 
America. We are working together across Federal Departments to 
be better partners in place-based work, to build a better front 
door to the Federal Government, and to make Federal programs 
easier to access.
    When it comes to the historic investment in high-speed 
internet, coordination must be a way of life. That is why we 
meet with the FCC, NTIA, and the Treasury on a biweekly basis 
and, frankly, regularly more often, both to establish a regular 
cadence of communication and to work through those sticky 
issues. We are learning to lean in to those sticky challenges.
    We are also working with state legislators and state 
agencies providing trainings, connecting with other agencies 
and, most importantly, asking questions about how we can be 
better partners. I promise you, this is much more than a stack 
of MOUs. We are keenly aware of both the importance of the work 
and the historic nature of this moment.
    We are in the early stages of an economic recovery from a 
global pandemic, but the promise and the initial work of high-
speed internet is already making a difference, delivering 
speeds that are high enough to be long-lasting. I truly cannot 
think of a better time to deliver such powerful economic 
infrastructure to the communities that produce so much of 
America's food and energy.
    Going forward, I ask for your candor, and I will give you 
mine. I will ask for flexibility when possible, too. We owe our 
best efforts to the people of rural America because I think we 
can all agree that when we invest in rural America, we are 
investing in all of our prosperity. Through this work, 
especially when we are really working together, Congress and 
the Biden Administration are sending a message to rural America 
that we get it. We know the slow lane is unacceptable, and we 
are here to be true partners in building better futures for our 
nation.
    By delivering on this promise, we are bearing witness that 
rural matters. Thank you for your time, thank you for your 
collaboration, and I look forward to your questions.
    [The prepared statement of Ms. Torres Small follows:]

 Prepared Statement of Hon. Xochitl Torres Small, Under Secretary for 
  Rural Development, U.S. Department of Agriculture, Washington, D.C.
    Chairman Scott, Ranking Member Thompson, and Members of the 
Committee, thank you for the opportunity to come before you today to 
discuss the state of high-speed internet in rural America, and the 
United States Department of Agriculture Rural Development's role in 
supporting connectivity across the country. Reliable, high-speed 
internet is no longer a luxury--it is a utility essential to modern 
life. It is also the cornerstone of rural economic growth--supporting 
education and healthcare as well as business and industry.
    But, as need for high-speed internet becomes more ubiquitous, 
between 6 and 12 percent of Americans lack access to high-speed 
internet, and rural residents are almost twice as likely as urban 
counterparts to have insufficient access to broadband.\1\ This gap 
widens significantly in communities of color and low-income families--a 
gap that was impacted particularly sharply during COVID-19 when the 
pandemic drove school and business online.\2\
---------------------------------------------------------------------------
    \1\ https://www.americanprogress.org/article/rural-broadband-
investments-promote-inclusive-economy/.
    \2\ https://www.americanprogress.org/article/rural-broadband-
investments-promote-inclusive-economy/.
---------------------------------------------------------------------------
    The value of high-speed internet cannot be understated--it has the 
potential to transform rural life as we know it. High-speed internet 
strengthens connections within communities, as well as between rural 
America and the rest of the nation, providing new markets for rural 
business and giving people the ability to create and sustain rural 
economies. It allows communities to tap into external markets and 
regionalize economic opportunity, all while opening doors for rural 
students, healthcare facilities, and patients. It also helps foster 
much-needed collaboration in rural areas as communities try to respond 
and adapt to extreme weather, shifting markets and systemic barriers.
    That's why I am grateful for President Biden's leadership and 
Congress' continued support for high-speed internet in rural America. 
The Bipartisan Infrastructure Law provides $65 billion to expand rural 
broadband, including $2 billion for Rural Development's ReConnect 
program. The President's Fiscal Year 2023 budget proposes an additional 
$600 million in investment into ReConnect, and I am deeply appreciative 
that the House has approved $450 million for FY23. If appropriated, I 
look forward to partnering with Congress as Rural Development 
administers these funds and supports high-speed internet in rural 
America.
Supporting Rural Economies
    Broadband is make-or-break for rural America, connecting businesses 
to both domestic and international markets, and giving communities the 
tools they need to collaborate and share best practices. High-speed 
internet also affects local business decisions every day--it 
significantly impacts the decisions of larger firms considering 
relocation to a remote area,\3\ and small local businesses as they work 
to expand and increase online sales. High-speed internet is also 
strongly tied to economic development and job growth across the 
country, benefits that could be felt deeply in rural areas. Independent 
economic modeling shows that there is a strong correlation between both 
job growth and GDP when broadband becomes more widely available.\4\
---------------------------------------------------------------------------
    \3\ https://www.researchgate.net/publication/
310466805_Broadband_Internet_and_New_Firm_
Location_Decisions_in_Rural_Areas.
    \4\ https://www2.deloitte.com/content/dam/Deloitte/us/Documents/
process-and-operations/us-charting-a-path-to-economic-growth.pdf.
---------------------------------------------------------------------------
    Rural Development, in close coordination with other Federal 
partners, is working to close the digital divide in rural America, to 
meet the goal of the Biden-Harris Administration to connect all 
Americans to reliable, affordable high-speed internet, and to ensure 
that the opportunities provided by high-speed internet services are 
available to all. In the first two rounds of funding, Rural 
Development's ReConnect program has provided more than $1.5 billion to 
181 projects to increase broadband service. These projects will serve 
nearly 300,000 households nationwide. Part of the success of ReConnect 
can be attributed to its deep investment in administrative support for 
technology and staffing, which broadens the reach of the program to 
include the least connected communities.
    In the Spring, Rural Development closed its largest-ever 
application window for the third round of ReConnect program funding. 
This will provide more than $1 billion in broadband funds to rural 
communities, including $401 million in already disbursed high-speed 
internet funds. Recently, we opened the fourth ReConnect program 
application window as part of distributing a historic investment in 
broadband funding provided by the Bipartisan Infrastructure Law for 
broadband programs operated by Rural Development. These investments are 
momentous and represent significant strides toward closing the digital 
divide and ensuring that all rural Americans can participate in the 
global economy.
Sustaining Rural Communities
    The Biden-Harris Administration and Secretary Vilsack strongly 
support the desire of rural residents to live their entire lives in the 
place they call home. I hear from rural people that access to 
healthcare and education are integral to achieving that goal, and high-
speed internet can increase access to both.
    Health care, elder care, childcare, and behavioral care are 
critical to rural America, helping families remain in rural areas 
through all stages of life. Yet, healthcare in rural areas faces 
significant challenges. Even though approximately 20 percent of 
Americans live in rural areas, barely \1/10\ of physicians practice 
there and 61.5% of all Primary Medical Health Professional Shortage 
Areas in the United States are in rural areas.\5\ COVID-19 brought the 
critical need for access to care into very sharp focus--lack of access 
to care costs lives. Telehealth insurance claims rose 8,000 percent, 
driving a deeper wedge between rural and urban care.\6\ As COVID swept 
the country, it proved to be nearly twice as fatal for rural Americans 
as for urban Americans.\7\
---------------------------------------------------------------------------
    \5\ https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport.
    \6\ CAP report.
    \7\ https://www.cidrap.umn.edu/news-perspective/2021/09/rural-
americans-more-likely-die-covid-19.
---------------------------------------------------------------------------
    To increase access to healthcare in rural communities, Rural 
Development operates the Distance Learning and Telehealth (DLT) Grant 
Program and the Community Connect Grant Program. DLT aims to increase 
the adoption and use of telemedicine technology to provide(?) to offer 
opportunities for improving rural care in the future. Community Connect 
provides funding for public entities to get access to high-speed 
internet service for the purpose of delivering educational, healthcare, 
and public safety opportunities to their communities. In some cases, 
applicants have helped place telemedicine carts at rural hospitals, 
rural health clinics, and rural penitentiaries for healthcare and 
behavioral healthcare purposes. Paired with the nearly $2 billion in 
ReConnect funding through the Bipartisan Infrastructure Law, Rural 
Development is working to ensure that even the most unserved residents 
have access to telehealth services in their home.
    In addition to healthcare, access to education remains a 
significant challenge for rural communities. This challenge was 
exacerbated during the COVID-19 pandemic, as schools shifted to a 
virtual learning environment. Rural communities also cannot thrive 
unless families have access to education for their kids, and COVID-19 
drove home exactly how critical high-speed internet is to a modern 
education. During the pandemic, as schools shifted to a virtual 
learning environment, the already-existing ``homework gap'' widened 
dramatically between students with access to high-speed internet and 
those without. During the pandemic rural students were twice as likely 
to not have the technology they needed to complete their homework, and 
those without high-speed internet often resorted to doing coursework in 
parking lots to avoid falling behind. The repercussions of this 
learning environment will have consequences beyond the pandemic, 
especially as schools and institutions of higher education increase 
their use of digital learning strategies--students without broadband or 
appropriate technology were roughly a half a grade level behind their 
peers,\8\ impacting post-secondary success and workforce readiness.\9\
---------------------------------------------------------------------------
    \8\ https://www.washingtonpost.com/education/2022/06/17/student-
internet-access-rural/.
    \9\ https://quello.msu.edu/wp-content/uploads/2020/03/
Broadband_Gap_Quello_Report_
MSU.pdf.
---------------------------------------------------------------------------
    To increase access to education in rural communities, DLT and 
Community Connect provides support to rural schools to expand virtual 
learning capacity. DLT helps rural communities use telecommunications 
to connect to each other and to the world, overcoming the effects of 
remoteness and low population density. For example, this program can 
link teachers and in one area to students in another. Community Connect 
provides financial assistance to applicants, like schools, that will 
provide broadband service in rural, economically challenged communities 
where service does not exist. The impact of both programs is more 
students connected to the resources they need to learn, advance 
academically, and complete their education in the place they call home.
Oversight & Coordination
    At Rural Development, we understand that high-speed internet cannot 
be deployed in rural and remote areas without tackling existing 
challenges. To address these challenges, Rural Development is working 
in close partnership with other Federal agencies, states, local 
governments, Tribes, and Congress to ensure seamless deployment of 
reliable, affordable high-speed internet.
    Particularly during the deployment of the Bipartisan Infrastructure 
Law funds, close and careful coordination is critical to preventing 
duplication of funding. Although USDA, the Federal Communications 
Commission (FCC), and the National Telecommunications and Information 
Administration (NTIA) are the three primary Federal agencies charged 
with broadband deployment, more than half of the fifteen Federal 
departments have some responsibility for broadband funding.\10\ 
President Biden has made coordination a top priority, convening 
standing meetings between agency senior staff to coordinate on access, 
affordability, and avoiding overbuilding. In addition, last month USDA, 
Treasury, NTIA, and FCC signed a data sharing memorandum of 
understanding to develop consistent reporting processes and share yet 
more information with each other about broadband projects.
---------------------------------------------------------------------------
    \10\ https://www.gao.gov/assets/gao-22-104611.pdf.
---------------------------------------------------------------------------
    It is also essential that Rural Development projects are serving 
their proposed service territory, that providers are meeting their 
build-out requirements, and that we continue to monitor broadband 
deployment to ensure efficient build-out. Once an award is approved, 
USDA takes a multifaceted approach to monitor the progress of the 
construction. Award funds are advanced only for specific projects that 
have been approved for funding. Our national office staff monitors the 
progress of the advances and ensures that the construction conforms to 
the approved application. In addition, USDA has a general field 
representative (GFR) in each region throughout the country who visits 
the project and inspects construction that is being completed. Awardees 
are also required to submit reports providing that all proposes 
premises are actually served and submit a final report when all 
construction has been completed. The GFR then conducts field visits to 
make sure that the premises are getting served.
    The Rural Development model focuses on funding community-driven 
projects, awarding funds to providers who do not overpromise and 
underdeliver, all while bringing affordable high-speed internet to the 
families and businesses in rural America who need it the most.
Conclusion
    These programs demonstrate remarkable success in the drive to 
sustain and create rural economies in a coordinated and collaborative 
way. Rural businesses, healthcare providers and schools know what works 
for them, and Rural Development aims to support their successes and 
their goals by improving access to reliable affordable high-speed 
internet.
    Rural Development is poised to meet and expand our commitment to 
high-speed internet deployment in rural America. I look forward to 
working with this Committee to support this mission.

    The Chairman. And thank you, Under Secretary Torres Small, 
for your excellent testimony.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. And you will be recognized for 5 minutes each in order 
to allow us to get to as many questions as possible.
    And now once again, please, please keep your microphones 
muted until you are recognized so that we can minimize 
background noise and get through our hearing in a very 
respectful way. Thank you.
    And now I recognize myself for our first 5 minutes.
    Under Secretary Torres, with this money, this $65 billion 
that we have gotten for this program going out through several 
different agencies, oftentimes these agencies compete with one 
another. All kinds of problems develop that slow down or make 
an impediment of getting the money out, not only with the 
Federal agencies having to coordinate, but then you have your 
state agencies to coordinate as well. Treasury Department, 
Commerce Department, NTIA, USDA, FCC, I think we about got 
every letter in our alphabet here. So tell me, what agreements, 
what procedures need to be put in place to ensure that this 
broadband $65 billion in resources across all these agencies 
are effectively utilized to reach our goal in finally 
connecting our rural communities?
    Ms. Torres Small. Thank you so much, Mr. Chairman, for that 
question. And it is the big question: $62 billion is a huge 
investment, and the only way we reach the places we need to is 
if we coordinate. I will be very honest with you. It is hard. 
There are silos. People are used to working within their 
agencies. But there are also benefits in terms of certain 
community members are used to working with Rural Development or 
used to working with FCC or used to working with NTIA, and so 
we are learning how to reach different people. And it is that 
required coordination. We are also learning from each other. 
So, for example, NTIA helped with some of our outreach early on 
with Tribal communities, and we also helped provide some 
support in reviewing some of their applications.
    One of the biggest challenges we have learned is that our 
work--one of the hard parts is timing, making sure that our 
programs and the timing for our windows of application is 
aligned with timing for other programs. And it is going to 
become even more of a challenge when we are also working with 
the states. That is why we are trying to get out ahead of the 
game when it comes to states. We are meeting directly with 
state legislators and providing trainings on what ReConnect is 
so that they can find ways to supplement or do something 
different from what ReConnect does, and also with state 
agencies. So those are some of the ways we are trying to work 
together.
    And I will turn it over to Acting Administrator Chris 
McLean if you have anything you want to add about it.
    Mr. McLean. Oh, thank you very much. Thank you. Thank you. 
The tradition of working across agency boundaries and working 
with state regulatory agencies is something that is very 
familiar to the Rural Utilities Service. We have been in the 
telecommunications finance business since 1949, and we have had 
to work with leveraging FCC Universal Service support, working 
with state regulatory authorities through our financing. So we 
are very proud of working together across agency lines. And, as 
the Under Secretary said, coordination sometimes is difficult. 
We have three--Treasury, NTIA, FCC, and ourselves, four 
different agencies with infrastructure money, and we have four 
separate statutes. We have to be faithful to our statutes. But 
we work really hard to resolve any disagreements or de-conflict 
our investments with each other.
    The Chairman. And let me just ask you, do you have an 
interagency plan of what are the specific roles of each of our 
Federal agencies, and a plan of connecting and making sure 
there is a smooth transition of getting the funding down to 
each of the states?
    Ms. Torres Small. This is a really, really good question 
because what we have are our interagency agreements in terms of 
coordination. And with emerging technology like high-speed 
internet, it does require some flexibility. You have seen in 
terms of the conversations that we have regularly with Congress 
about speeds, for example, and different technologies. The 
flexibility is really crucial there, and it will become all the 
more crucial when we are coordinating with states as well. So 
our priorities are regular coordination, that cadence, key 
guiding posts in terms of what we are doing, and then being 
flexible with each other.
    The Chairman. Thank you very much. And now, the gentleman 
from Pennsylvania, Ranking Member Thompson, you are recognized 
for your 5 minutes.
    Mr. Thompson. Thank you, Mr. Chairman.
    Under Secretary Torres Small, good to see you again. Thank 
you for your work. Mr. McLean, thank you for your longstanding 
work as well, much appreciated.
    Under Secretary, as you know, USDA, FCC, NTIA, and Treasury 
entered into this interagency agreement in May of 2022, to 
collaborate on Federal broadband programming and funding. Can 
you share any insight on the current collection and reporting 
of data and metrics related to broadband deployment between 
agencies? And have you run into any unexpected coordination 
challenges?
    Ms. Torres Small. I appreciate that you asked for the 
challenges because that is how we learn from these things, 
right? When it comes to the information collection, I think our 
different strengths are really well-suited. So Rural 
Development's specific strength of when there is a conflict 
with a map, for example, we have to provide directly to each 
home, we have to make sure that each home within that service 
area has the ability to access that service. And so being able 
to identify on the ground whether or not that happens gives us 
data that we can then share with NTIA for NBAM (National 
Broadband Availability Map), and then also making sure that FCC 
has access to it.
    We also go the other way, so as we look at different 
awards, making sure we have the data about where those awards 
are covering and how that interacts with our programs. So it 
has to go the other way. And the challenges really do circle 
around timing. So as we put out our rules, we have to make sure 
we know what other awards are going to be coming down the 
pipeline during that time. And for ReConnect 4, I think it was 
a really good example of how we learned that lesson. So we were 
very specific on RDOF, for example, and whether entities were 
ready to authorize, those awards were ready to authorize, which 
is a key step in the process. And so in ReConnect 4, we 
specifically said if they were made ready to authorize by this 
point, we would work to avoid overbuild. But having that 
clarity was really valuable, and that was a lesson learned.
    Mr. Thompson. Very good. Well, FCC is--the way they have 
done their mapping in the past--and maybe that has changed, I 
certainly hope it has. And I think your part of that and 
coordination can be a force for good on this. I mean, the FCC 
by Census zone would make two egregious errors in the past. I 
am not sure what the current process is. But, if they found 
that there were one or two entities within a Census zone that 
had broadband connectivity, they would color the entire map as 
served, excluding everyone else. It may be a hospital, may be a 
school, a university, and leaving out the large portion of the 
district from being eligible from these funds and development. 
And then the even more egregious one was the wording that said 
if the conditions exist by which connectivity should be 
occurring an area is served, despite the fact that no one in 
that Census zone was served. And that is just two of the errors 
that I think that the FCC made. So, I am appreciative of the 
fact that you will be at the table on this because I believe 
the FCC needs adult supervision and needs supervision of people 
that understand rural America. I would be much more comfortable 
if you all were at the tip of the spear on this versus in the 
relationship that you have.
    But, as you know, the USDA currently employs nearly 100,000 
employees across more than 4,500 locations. Comparatively, NTIA 
and FCC retain almost 2,100 employees combined. Their resources 
aren't near as extensive in order to have the penetration into 
rural America the way our USDA professionals do. However, since 
2020, 13 new broadband programs have been authorized and funded 
by Congress, none of which are administered by USDA. Shame on 
Congress. Shame on Administrations for allowing that to occur. 
Can you comment on why USDA's scope and scale really are best 
suited to deliver broadband programs to rural America? And why 
is it so critical that USDA remain an integral player in 
broadband deployment?
    Ms. Torres Small. Ranking Member Thompson, thank you so 
much for lifting up our staff at Rural Development and in USDA. 
It is absolutely a fundamental piece of who we are, having 
people living in the communities that we serve. And it is rare 
across the Federal Government, and that is why we have been 
asked to lead things like the Rural Partners Network because 
that takes real connection with community so that we can listen 
to them and learn from them. And that is why we are a 
fundamental part of the solution when it comes to high-speed 
internet because each situation is different. The geography, 
how do you get behind the nooks and crannies of mountains or 
how do you lay fiber on the sea floor? And having that specific 
expertise as well as the partners on the ground is a crucial 
picture that we bring to the table.
    Mr. Thompson. Very good. Thank you, Mr. Chairman.
    The Chairman. The gentlewoman from North Carolina, Ms. 
Adams, who is also the Vice Chair of the Committee on 
Agriculture, is now recognized for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman, for hosting today's 
hearing. Thank you as well to the Ranking Member.
    Under Secretary Torres Small, it is good pleasure to have 
you here with us today. Service is the rent we pay, and it 
gives me great pleasure to know that you are keeping your rent 
paid up with all of the great work that you are doing.
    We have discussed at length the bipartisan infrastructure 
law, and our last farm bill, to make significant investments in 
broadband, particularly in rural broadband. In my State of 
North Carolina, I am proud that our Governor Roy Cooper 
announced $206 million in grants from funding that we here in 
Congress provided to expand internet access for rural 
communities. Eighty-five thousand households will now have 
access to high-speed internet. More than 2,000 businesses will 
also have it.
    But it is more than just businesses that need this access. 
It is our rural schools, too. So, Madam Under Secretary, can 
you discuss what these investments will mean for our K-12 and 
institutions of higher education in rural areas?
    Ms. Torres Small. Thank you so much, Congresswoman. And it 
is wonderful to see you and for your focus on education because 
our kids in rural places are our future, and if we can make 
sure they have good education, it gives them a chance to build 
their best opportunities hopefully in the rural communities 
where they live. And when it comes to high-speed internet, that 
is fundamental to that. So ReConnect's program, one of the 
requirements is that within a service area, every address has 
to be eligible to receive service, so you are not skipping 
schools or houses, and that is crucial because we certainly 
hear on the ground stories of internet service lines that go 
all the way except for that last house that is really hard to 
reach or that last location. So that is one way that we reach 
education is by connecting every address within so that both at 
the school and kids' homes, they can do their homework at home, 
is possible.
    The other way is other programs within Rural Development. 
So we have the Distance Learning and Telemedicine Program, 
which helps provide some of the infrastructure, the hardware 
for using that high-speed internet so that schools, applicants 
can receive funding to be able to get the best technology that 
allows their students to learn and prepare for careers in 
computer science, for example. So there is an in to learn. You 
can broaden your horizons in a rural place if you can connect 
with people all across the world.
    Ms. Adams. All right. Thank you.
    Ms. Torres Small. So those are two ways that we are 
working.
    Ms. Adams. Thank you. I do agree. And it is absolutely 
essential. It is life changing.
    I have also heard from rural schools what happens when they 
aren't able to provide powerful internet connections to their 
students. They miss out on research opportunities, jobs, and a 
whole lot more. So, Madam Under Secretary, most states have a 
research and education network that provides high-speed 
internet access to schools, but not all schools are hooked up 
to those networks, and during our push to connect rural areas, 
what do you think we should do to ensure that our rural HBCUs 
and MSIs and Tribal colleges can access these critical 
networks?
    Ms. Torres Small. That is a great question. And I would 
love to follow up with you about specific outreach that we can 
do to HBCUs if they are lacking that high-speed internet 
connection right now because one of our focuses at Rural 
Development has been how do we reach out to potential partners? 
How do we make sure folks know how to navigate the ReConnect 
process, which can be challenging, and know about the other 
resources that are available as well? So I would love for us to 
be able to follow up with you to talk about how we can 
intentionally reach out to HBCUs.
    [The information referred to is located on p. 1528.]
    Ms. Adams. Okay, great. Well, we will look forward to that. 
And thank you so much for being here and for your work.
    And, Mr. Chairman, I yield back the balance of my time.
    The Chairman. Thank you.
    And now the gentleman from California, Mr. LaMalfa, is 
recognized for 5 minutes.
    Mr. LaMalfa. Thank you again, Mr. Chairman.
    Under Secretary, welcome. Thank you. Thank you for both 
attending today. Nice to see you. We wanted to point out that, 
recently, Rural Development awarded a $40 million ReConnect 
grant to the Volcano Telephone Company in Pine Grove, 
California, just not too far from my own district, but 
certainly the issues are common to a lot of eastern California 
and Sierras. It will help boost the high-speed internet in 
those mountainous areas and help with smoke detection, which is 
something that is very critical in our state, as well as your 
home state with so much wildfire.
    And so with this technology and with this ability to better 
detect smoke and its density for health reasons, or an early 
jump perhaps on fire, what do you think we can do to even 
better utilize the current programs we have to monitor these 
disasters as they occur, in order to expedite emergency 
responses and better warn people about health warnings from 
dense smoke like that? So, it seems like we are on a good path. 
What can we do to accelerate this, do you think?
    Ms. Torres Small. Thank you so much, Congressman LaMalfa. 
It is such a pleasure to see you.
    And I got the chance to talk with Volcano Telco, and I was 
so impressed with this fourth-generation private ISP that is 
located in the community they serve. They talked about being 
really connected so that if internet service goes down because 
of a wildfire or other reasons, they have people knocking on 
their door. I mean, that is how accountable they are, and it 
makes a real difference. I asked them specifically about speeds 
because they really are that last, last mile in the frontier, 
and how important is a high speed for them. And they 
specifically identified the video monitoring for smoke because 
that video monitoring in remote areas has to go up to a cloud 
for storage, so it requires not only download speeds but upload 
speeds to upload that to storage so they can identify where and 
keep running where the potential smoke is. So it was really 
helpful to understand that that speed is really valuable even 
that far out.
    In terms of how we can better utilize this program to do 
things like that, the other thing they mentioned was 
integrating--making sure that electric wires, working with 
rural electric co-ops or other electricity providers so that 
they know when to shut off the power if they are in danger of 
wildfire or spreading a wildfire in the case of large winds. So 
I think that there are some other opportunities there to 
increase safety through high-speed internet.
    Mr. LaMalfa. Yes, the wires are indeed a critical issue in 
our forested areas like that.
    Can you speak a little about how USDA, FCC, and NTIA all 
have their own data mapping and do not necessarily follow the 
same methods of collection of that data. So recent legislation 
that we have passed here that included the Broadband DATA Act 
(Broadband Deployment Accuracy and Technological Availability 
Act (Pub. L. 116-130)) to help better simplify this information 
and require information sharing. And you talked about the 
cross-pollination between agencies. So how do we ensure that 
those areas are mapped correctly since we have these differing 
methods and then we don't have inaccuracies from the different 
styles of--are they that much different to begin with?
    Ms. Torres Small. There are some differences. I think each 
iteration is getting better, and we are working together much 
better as well. I remember when I was in Congress, the Census 
tract issue was the bane of my existence because out in the 
West, you have big states, you have big land, and a Census 
tract is not an accurate area of measurement for whether or not 
you have high-speed internet. That is changing. It is work, 
though. We are learning a lot from states and their mapping 
efforts. And Georgia is a key example where there has been some 
really exciting progress, and we are sharing that information. 
So NBAM with NTIA has been really good about sharing 
information and collecting it. And so frankly, our different 
ways of collecting information has been helpful with NBAM 
because we are able to get information in different ways, 
cross-reference it, cross-check it on a mapping platform.
    As we look to FCC and the fabric that they have, as well as 
the updates, we are working there as well. I mentioned we all 
have different relationships with different people. They are 
used to working with different agencies. And so we helped get 
out the word for the deadline for internet service providers to 
make sure they were providing information to FCC for the 
creation of their maps.
    Mr. LaMalfa. I am sorry. I am running out of time. Do you 
have concerns that linking with these other sources could 
somehow harm your own data mapping? Do you have any concerns 
about that?
    Ms. Torres Small. That is a really good question. I would 
love to follow up with you to see if there are--just to ask 
generally to my team. None have risen to me because we are 
sharing really well and because we are using multiple sources 
of information, and last, because we have that ground-checking 
capability so if there are conflicts about the different 
mapping, we can go on the ground and check to see if that 
service--but I will get back if we find any others.
    [The information referred to is located on p. 1528.]
    Mr. LaMalfa. Okay. And also check to see do you have any 
concerns that might slow down the USDA's current process on its 
own funding? And then I will just leave that there. So thank 
you. Thank you, Mr. Chairman.
    The Chairman. Sure.
    The gentlewoman from Maine, Ms. Pingree, is now recognized 
for 5 minutes.
    Ms. Pingree. Thank you very much, Mr. Chairman, and thank 
you so much for having this important hearing. And thank you, 
too, Madam Under Secretary. We are so pleased to have you in 
that position and before our Committee today and working hard 
on this really important topic to rural states like mine.
    Some people don't think about New England being rural, but 
Maine is considered one of the most rural states in the nation, 
and we have a lot of distance between internet service 
providers. We have some of the slowest speeds and lack of 
availability, so this has been plaguing us for a long time, and 
our state is very interested in repairing the problem.
    One thing I have dealt with quite a bit are the issues 
around the ReConnect Program. When you have a small community 
as we do--and I represent over 100 small communities, many of 
them under 10,000 people, under 5,000 people--there is rarely 
the level of staffing that is needed. And what we hear very 
often is that it is a part-time employee, maybe a volunteer for 
the town that is trying to deal with very extensive and 
complicated reporting requirements. So can you talk to us a 
little bit about technical assistance provisions that are in 
place and how we can do more or what you are doing now to 
really give ground-level support to those communities who need 
to be getting the access to these programs that we are funding?
    Ms. Torres Small. Congresswoman Pingree, thank you so much 
for that question. Technical assistance is one of the key 
opportunities and, frankly, challenges when it comes to serving 
rural places. If you have a volunteer mayor or a part-time 
clerk, it is really hard to apply for all these grants. And 
then if you catch that car, then you have to drive it in terms 
of the reporting requirements. So one, we are working to make 
it more simple; but two, we are also working on technical 
assistance. And Rural Development is using some of the 
administrative funds from the bipartisan infrastructure law to 
increase and to build upon that great staff structure that 
Ranking Member Thompson mentioned. And that is crucial when it 
comes to reaching those hard-to-reach places.
    Also, in your bipartisan bill to authorize ReConnect, I 
really appreciate the work that Chairman Scott and Ranking 
Member Thompson put in for broadband connectors, recognizing 
the need for continued investment in technical assistance, so 
we really appreciate that you are continuing to see that. And I 
will note that NTIA is also investing significantly in 
technical assistance. We are coordinating to make sure that 
technical assistance doesn't overlap but rather supports each 
other. They are focusing mostly on interacting with state 
agencies and state broadband offices, and our technical 
assistance is more focused on the providers, the internet 
service providers.
    Ms. Pingree. I just want to follow up a little bit because 
it is an issue I have brought up previously. It is an issue we 
have been hearing about over the years. We have been told that 
there are some technical assistance people that are called 
general field representatives that are meant to be there to 
help and support, but we often get the feedback that there 
aren't enough, that they are spread over a wide range. I don't 
know how many states each GFR covers. But again, I feel like 
every time I have this conversation--and I have great faith in 
you accomplishing this--we hear like, oh, that is going to 
come, we are working on it. Can you talk at all about anything 
else you might need? Should there be more language in the farm 
bill?
    I guess I will just emphasize again if our main goal here--
and everybody on this Committee talks about rural America. We 
are all so supportive of doing more for rural America. But just 
as you acknowledged in the beginning, and I appreciate that you 
are talking about small communities that really need on-the-
ground kind of technical assistance and need to have the 
ability to apply for and then manage these funds in. Do you see 
this happening in the near future? Do we need to write language 
in the farm bill? What can we do to just assure it really comes 
to be?
    Ms. Torres Small. Thank you for holding our feet to the 
fire on this. It is something we need to deliver. And the first 
thing I will note, the administrative funds in the bipartisan 
infrastructure law really were helpful in terms of helping us 
work to set up more technical assistance. We have hired more 
GFRs as a result of that. But one of the challenges is hiring 
and creating the right position descriptions and making sure 
that it truly does result in bringing someone on board, and 
that is a place where I would like to have a deeper dialogue.
    I will turn it over to the Acting Administrator for any 
additional points.
    Mr. McLean. No, thank you very much. And staffing is always 
an issue for us. We are a remarkably small agency that does a 
remarkable amount of work. There is at any given time about 100 
or 20 telecom staffers that are delivering this massive 
program. We are very, very proud of that work. We have about 25 
or so GFRs in telecom and about 23 or so in electric at any 
given time, and that is to cover the whole country. So we are 
not able to have a GFR in every single state, but we try to 
maximize our outreach. We use contract support. We have had 
webinars to try to help communities.
    [The information referred to is located on p. 1529.]
    The Chairman. Unfortunately, the gentlewoman's time has 
expired, but that is very valuable information. Please 
communicate it in writing to us.
    Ms. Pingree. Thank you.
    Mr. McLean. Thank you, Mr. Chairman.
    Ms. Pingree. Thank you.
    The Chairman. We are after smooth sailing to get this here, 
so please get that to her.
    And now I recognize the gentleman from North Carolina, Mr. 
Rouzer, for 5 minutes.
    Mr. Rouzer. Thank you, Mr. Chairman.
    And, Ms. Torres Small, great to see you and, Administrator, 
thank you for being here as well. All of my life, I heard about 
haves and have nots, and I have decided over the last 5 to 10 
years that those in the have category have high-speed internet 
access, and those who are in the have-not category are without 
it. It bridges racial divides, demographics, and really, it is 
all geography. Just like many other Members of Congress, I have 
a lot of communities that have good access, and I have a lot of 
communities that do not have good access. And it is a critical, 
critical piece of infrastructure, as we all know.
    So quick question, just overall basics, your overall 
portfolio, how much is--if you look at all the programs, how 
much is grant, how much is loan, and how much is loan 
guarantee?
    Ms. Torres Small. Oh, that is that is a great question. So 
in terms of ReConnect, the most recent round, ReConnect 4, $150 
million is available for loans, and the max request is $50 
million. For a 50 percent loan, so 50-50 grant-loan 
combination, up to $150 million is available for loans, and 
$150 million is available for grants. And then there is 100 
percent grants. And so there is $150 million available as a 
set-aside for all full grant applications, and then there is 
also a set-aside for Tribes, persistent poverty areas, some 
have-nots, socially vulnerable communities, as well as Alaska 
Native corporations. And then there is also a separate set of 
set-asides of $200 million for project-serving areas where 90 
percent of households lack sufficient access to broadband.
    Mr. Rouzer. How much is loan guarantee? Are we doing much 
in the area of loan guarantee?
    Ms. Torres Small. Not in high-speed internet but in other 
programs it is a fundamental part, so B&I loan guarantee, for 
example, and facilities.
    Mr. Rouzer. Sure. Well, broadband is a tricky subject 
because technology changes so rapidly. I think fiber is going 
to be a critical component for some time to come. How do you 
make your judgments on investments as it relates to very 
rapidly changing technology?
    Ms. Torres Small. That is such a great question. And it is 
that emerging technology piece that makes it challenging to 
navigate. We focus primarily on speed, what is the build-out 
speed that you can get to based on the technology. There is 
also some statutory limitations, so ReConnect requires us to 
refer to a law that talks about fixed broadband, terrestrial or 
wireless, and so that limits some of our flexibility. In the 
first two rounds of ReConnect, we tried to use as much 
flexibility as we could in some emerging technologies but 
didn't have many takers, frankly. So for ReConnect 4, we are 
focusing on the speed build-out and the technologies where we 
have had interest. But it is an open dialogue, it is changing 
conversation, and we would love to continue that conversation 
with you.
    Mr. Rouzer. So with regard to ReConnect, the program has a 
number of administrative burdens, which make it a little 
difficult, time-consuming, and cumbersome for some--or actually 
many providers from what I hear. So the program requires--and 
this is an example. The program requires the provider to submit 
significant information regarding non-funded service areas. It 
also requires all environmental approvals to be obtained in 
sequential order rather than filed and reviewed concurrently. 
How are you all working through these burdens? And doesn't it 
make sense to streamline this and have these objectives 
reviewed concurrently?
    Ms. Torres Small. Thank you so much, Congressman. And I 
will say a little bit and then pass it over to Administrator 
McLean. We absolutely have to work to make it as accessible as 
possible, recognizing that these are big projects that require 
sophisticated administration. The information about outside 
areas that aren't funded but are covered helps us support those 
maps that we were just talking about and make sure we are 
navigating the overbuild situation, making sure that we are 
doing as much as we can to leverage what we have to reach the 
places that are unreached.
    When it comes to environmental reviews, there has been a 
real learning curve. The first two rounds of ReConnect, we were 
casting a broader net, frankly, than what the law called for in 
terms of both timing and when it was necessary to do 
consultation. So we have shifted the timing there, and we think 
we have the appropriate match, but there is still work to be 
done.
    In terms of sequential environmental reviews, I will pass 
it over to Acting Administrator McLean.
    Mr. McLean. Thank you very much. And another thing about 
round 1 and round 2 was the effect of the pandemic, 
particularly in those early months when it was a total 
lockdown. Historic preservation offices were closed at Tribal 
level and state level, so environmental review just elongated. 
So we worked very hard to try to expedite environmental review 
as much as possible. But it is it is a point well-taken and----
    [The information referred to is located on p. 1529.]
    The Chairman. The gentleman's time has expired. Sorry about 
that. If you could communicate your thoughts in writing to us 
it would be great.
    Mr. McLean. Thank you.
    The Chairman. And now the gentlewoman from New Hampshire, 
Ms. Kuster, is recognized for 5 minutes.
    Ms. Kuster. Thank you, Mr. Chairman. I so appreciate the 
Committee holding this important hearing on access to broadband 
communication in our rural communities.
    Compared to even just a generation ago, the services and 
tools available to us now with the click of a button are 
absolutely remarkable and essential. Essential government 
services, medical check-in, school courses, and job training 
are all accessible at the time and place of our choosing. 
Reliable, affordable, high-speed broadband service is what 
makes those things possible. And while it brings incredible 
benefits, it also exacerbates the gap for those who do not have 
access to the service or simply cannot afford it.
    We have talked for many years, and I have been a proud 
Member of Mr. Clyburn's Rural Broadband Task Force. Finally, I 
am so excited that Congress is matching our words to our 
actions. In the past 2 years, we have enacted targeted programs 
and made historic investments to bridge the digital divide. 
This includes efforts not only aimed at building the physical 
infrastructure to support broadband networks, but to ensure 
that this essential service is affordable to our rural, 
hardworking families. Some of those programs have already begun 
disbursing funds and connecting communities. The remaining are 
being stood up now as we speak.
    Just last week, I am proud to announce that New Hampshire 
received $66 million in broadband funding under the American 
Rescue Plan (Pub. L. 117-7) Capital Projects Fund, bringing the 
total to $122 million to help connect more than 24,000 Granite 
State homes and businesses to affordable high-speed internet. 
It will be crucial for the agencies administering these 
programs to communicate and coordinate so that the investments 
are effective and efficient and reaching the greatest number of 
my constituents.
    And that is why I am pleased that we enacted legislation in 
the 2020 Consolidated Appropriations Act (Pub. L. 116-93) to 
create a new office of the NTIA tasked with tracking and 
coordinating broadband deployment and funding in programs all 
across the government. We also required USDA, NTIA, and FCC to 
enter into a memorandum of understanding to ensure they are 
sharing data about their respective broadband deployment 
programs. All this builds on the progress that we all fought so 
hard for in the 2018 Farm Bill, boosting grants and loans for 
broadband infrastructure by $350 million per year. And as we 
look ahead to writing the new farm bill next year, I am 
determined to build upon these critical winds and further 
enhance USDA's broadband programs.
    Madam Under Secretary, great to be with you. You mentioned 
the Distance Learning and Telehealth Grant Program that is such 
an important component of expanding broadband. Could you 
comment--I know you have done a lot of travel and talked to 
applicants--on the feedback you have heard? Is there anything 
that we need to do legislatively to help further streamline the 
process and support applicants [inaudible] pointed out?
    Ms. Torres Small. Congresswoman Kuster, I lost the last 
part of your question, but I think you are asking about how we 
can streamline programs like the Distance Learning and 
Telemedicine Program to----
    Ms. Kuster. If you need--sorry to interrupt. If you need 
anything for us to do legislatively to help you streamline 
those programs.
    Ms. Torres Small. Thank you so much for that question. It 
is a crucial piece. One of the things we hear regularly across 
our programs that can be hard and that was done in our high-
speed internet funding is providing no match grants when 
available. It has helped us reach the most socially vulnerable, 
the persistent poverty counties. It is really crucial, and also 
allowing us some flexibility in the tools that we provide. But 
for some specific commentary on the Distance Learning and 
Telemedicine, I will turn it over to Administrator McLean.
    Ms. Kuster. Thank you.
    Mr. McLean. The Distance Learning and Telemedicine Program 
is one of our most popular programs across the board. We 
consistently have more applications than we have funding 
available to be able to meet those needs. And it is always 
heartbreaking to have to leave projects still on the table. But 
fortunately, Congress year after year has been able to provide 
us support, and we do appreciate that.
    Ms. Kuster. Great. One quick question and maybe you will 
need to submit in writing, but I strongly concur with your 
sentiments about how access to reliable telehealth services 
helps ease the provider gap in our rural communities and 
wondering if you could share insights that you have heard about 
how USDA broadband programs have opened up new telehealth 
options.
    Ms. Torres Small. Someone even went so far as to say it is 
a recruitment tool. A nurse who was trying to get other folks 
to apply to her rural hospital said once they were able to get 
the technology that worked with high-speed internet to be able 
to reach more people in their homes, the workforce was just 
more excited to be there because they could better do their 
job.
    [The information referred to is located on p. 1529.]
    The Chairman. Thank you.
    Ms. Kuster. Thank you. I yield back.
    The Chairman. The gentleman from Georgia, Mr. Allen, is now 
recognized for 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman, and thank you for 
hosting this hearing. And, Madam Under Secretary, thank you for 
your attendance this morning.
    Obviously increasing broadband--well, actually completing 
broadband to all rural Americans has been my top priority here 
in Congress. There is nothing that holds back rural America 
from continued economic development than broadband and cell 
service.
    Since I was first elected, there has been a major broadband 
build-out, but we saw apparent shortfalls in that during the 
COVID pandemic, particularly with education, and then the 
ability for people to actually get the job done when they were 
in living in rural America.
    Right now, for the first time, it appears that funding may 
not be the most pressing issue. More than $147 billion in 
Federal funding has been dedicated to broadband in the last 4 
years alone. This is a lot of money, and it is time for us to 
take account on exactly where in the heck the money is.
    To that point, I am disappointed that the Federal 
Communications Commission and the National Telecommunications 
and Information Administration are not represented in this 
hearing today. Of all the committees in Congress, there is no 
question that the House Agriculture Committee is the one most 
in tune with the needs of rural America. I urge the leadership 
of this Committee to convene a separate hearing in the future 
where we can hear from the leadership of these agencies as 
well.
    I said earlier that I believe at this moment funding is not 
necessarily the number one concern that Congress should have. 
Instead, it should be broadband mapping. In July of last year, 
I led a bipartisan, bicameral group of Georgia lawmakers in 
sending a letter to the FCC requesting an update on 
implementation of the Broadband Deployment Accuracy and 
Technological Availability Act (Pub. L. 116-130), which was 
signed into law last Congress. Additionally, we requested that 
they integrate data from the Georgia Broadband Map Program into 
their new mapping program.
    Unfortunately, since Chairwoman Rosenworcel is not 
represented here today, I cannot ask her about the 
implementation of the DATA Act (Pub. L. 113-101). Madam Under 
Secretary, do your agencies rely on FCC maps to distribute 
broadband funds?
    Ms. Torres Small. Thank you so much, Congressman, for 
making high-speed internet a top priority and for your focus on 
mapping. It is a crucial part of how we need to coordinate 
across the Federal Government and, as you mentioned, with 
states that have had some of the most cutting-edge approaches 
to mapping.
    When it comes to Rural Development, we are intimately 
involved in providing information for both NTIA's NBAM map, as 
well as the FCC's map that they are constructing. And we use 
NBAM to help as part of the process for identifying our service 
areas for our awards. We have multiple components of the 
process. So we use the maps for a desktop review, then the 
second part is allowing service providers to weigh in to say 
no, actually we cover this area, and here is the data to show 
that, and then we are on the ground----
    Mr. Allen. How do you find these maps to be?
    Ms. Torres Small. For that I will refer to Acting 
Administrator McLean.
    Mr. McLean. Yes, thank you very much. Well, over time the 
maps have improved. The reference to Census block mapping 
didn't provide much granular data, so the mapping material that 
we have had historically and that we use now, they are 
informative, they are a starting point, but they are not 
dispositive for RUS's work. As the Under Secretary said, we 
have what is called a service area validation process where our 
applicants will proclaim to the world where they are going to 
propose service. We will open up a 45 day comment period where 
we will allow service providers to tell us what they are 
providing, and we will check that. We will verify that and, if 
necessary, we will send field staff out to the area to be able 
to double-check that.
    Mr. Allen. Well, my home State of Georgia Broadband Map 
Program is the gold standard in the nation's broadband maps. It 
precisely maps out the availability of broadband services to 
every home and business in the state. Other states are 
following Georgia's lead in implementing similar programs. So 
we have the maps. We know the needs in Georgia. And of course, 
Madam Under Secretary, I believe you were in Georgia recently 
meeting with broadband providers, including my constituent, 
Steven Milner, with whom I have worked on many broadband 
rollout projects in my district. Could you provide us an update 
on how those meetings went and what your takeaway was? And I am 
out of time. You can submit that answer in writing. I would 
appreciate that. With that, Mr. Chairman, I yield back.
    [The information referred to is located on p. 1530.]
    The Chairman. Yes, thank you.
    And now the gentlewoman from Illinois, Mrs. Bustos, who is 
also the Chair of the Subcommittee on General Farm Commodities 
and Risk Management, is recognized for 5 minutes.
    Mrs. Bustos. All right. Thank you, Mr. Chairman.
    I know that rural broadband is obviously a very important 
issue for everybody on this Committee. And I see it this way. 
Fortunately, Congress has been investing in programs to 
ReConnect. And so we have been able to deliver under the Under 
Secretary's leadership and under the Biden Administration these 
crucial investments. And let me just give you a quick example. 
We have $14 million that went to Jo-Carroll Energy, which is a 
rural electric co-op in the Congressional district that I 
represent. They have been able to expand their fiber broadband 
and go into 3,000 additional households. That is a big deal 
where I am from. They are now able to serve on top of that ten 
educational facilities and a healthcare facility just with that 
funding. And so I know USDA recently announced $1 billion for 
ReConnect round 4 that comes out of our bipartisan 
infrastructure law.
    So, Under Secretary Torres Small, great to see you. Thank 
you for being here today. Can you talk about how this new round 
of the ReConnect Program is different from previous rounds? And 
in other words, what has changed?
    Ms. Torres Small. Thank you so much for that question. And 
we really are learning things in every stage of ReConnect. We 
are also trying to build to provide some consistency or at all 
possible for our applicants, while applying lessons learned. So 
one of the places where we have seen a difference in terms of, 
well, the change from statute for round 4 of ReConnect is the 
service area. So the statute requires that--it used to require 
90 percent being served. Now, it requires 50 percent unserved. 
And so that is a change that we have made pursuant to the 
statute.
    That being said, Congress also included a set-aside for 90 
percent unserved so we can continue to prioritize reaching the 
hardest-to-reach places. And so we are working hard to get out 
information about that change. A change that we made 
specifically was that we work to make sure that not only is 
their infrastructure in the ground, but that it is affordable. 
And so we worked to--in the previous round, there were extra 
points for participating in an FCC Affordability Connectivity 
Program. Almost everyone who was eligible to receive those 
points took advantage of it. So we went ahead and made it 
mandatory this next round, to work with the FCC Affordable 
Connectivity Program. And so what that means is that in areas 
where we are helping fund a service, people could get access 
with a $30 plan for high-speed internet. And that can be truly 
transformative.
    Mrs. Bustos. Yes, let me--because I know we just have a 
couple of minutes here, and I would like to get onto another 
topic. I know we are talking about rural broadband, but are you 
in a position where you can talk about the importance of rural 
connectivity as it pertains to rural cellular? I can talk about 
actually my own household, my neighbors, we have a district 
where we have access to broadband but not necessarily to cell 
service that allows us to have easy phone conversations on our 
cell lines. And, it gets in the way of emergency services, 
precision agriculture, and just household cell service. So 
wondering if there are activities currently underway at USDA 
Rural Development to help expand access to rural cell service, 
and if you can touch on that for our remaining minute and a 
half.
    Ms. Torres Small. I will speak very quickly and then turn 
it over to the Acting Administrator. The statute does limit--we 
can't take into account cellphone service when determining 
whether or not broadband exists. But one part of our priority 
points include wholesale broadband services, and that can mean 
building infrastructure that others could use. And so when it 
comes to building a cell phone tower that requires that 
backhaul of fiber to then connect to that tower, and so with 
wholesale broadband services, there is an ability to also 
invest in both the radio technology as well as cell phone 
service. Acting Administrator McLean?
    Mr. McLean. Yes, thank you very much. In addition, we do 
have loan authority to finance mobile wireless, and we do have 
loan authority to finance emergency communications and 911 
access, but we don't have a grant program to match that. But 
the point is very, very well taken. Cellular dead zones are 
deadly zones when it comes to public safety and emergency 
communications.
    Mrs. Bustos. Yes, they really are. My husband is the 
Sheriff of Rock Island County, which is a little more urban 
than some of the other counties I represent. And I know our 
sheriffs talk about these dead zones. And you think about when 
you need to communicate in a time where there is something 
tragic going on, you don't want your deputies out there not 
being able to communicate with their radio operators or their 
other deputies. So, we can explore this a little bit more, but 
I am hoping that we can in the future and make this more 
accessible.
    Thank you very much. I yield back.
    The Chairman. The gentleman from Indiana, Mr. Baird, is now 
recognized for 5 minutes.
    Mr. Baird. Thank you, Mr. Chairman and Ranking Member, for 
holding this important hearing. As you know, and it has already 
been talked about here today, but precision agriculture really 
needs and utilizes broadband in addition to telehealth and 
telecommunication and education, so it is very important that 
we do this. And so I guess the thing that I would like to ask 
is, Madam Under Secretary, you did a great job explaining how 
USDA monitors the broadband deployment and to make sure that we 
have efficient and complete build-out. So can you explain to me 
or address how the general field representatives and how 
important they are to make sure that we get this build-out done 
efficiently and we have the right kind of information to help 
our local entities apply for some of these funds?
    Ms. Torres Small. Congressman Baird, thank you so much for 
that question. Our general field representatives are crucial, 
and they are a unique part of Rural Development. It is people 
living in the places they serve. Lately, I have had the chance 
to travel and do outreach to two communities that currently 
don't have high-speed internet. And when I have a general field 
representative there, they know the providers that are around 
the table. They know how to work with communities that--what 
they know is that they don't have high-speed internet, and they 
are trying to figure out what that next step is. And so that 
ability to help navigate these really high-tech, challenging, 
complicated issues is crucial. And they are working hard, 
whether it is trying to make sure that the environmental 
reviews are happening quickly, or whether it is going back and 
forth. And I was talking to a general field representative just 
the other day, he is really proud that there has been so many 
awards in his region, but now he has got to process all of 
those awards. And because we really care about efficiency, it 
is reimbursements, so that processing of the award is high 
touch. It takes a lot of energy. So it is a crucial component 
of who we are at Rural Development, and it is something that we 
need to continue to make sure it is a strong part of our 
identity.
    Mr. Baird. I think that you just illustrated an important 
point. If those individuals really understand where the money 
can come from and the different sources and the requirements 
who are applying for those, I think it just makes it more 
efficient and extends your capabilities right out in the rural 
community. So I am glad that you have those field 
representatives, and I hope you can train more in case you need 
them for additional help.
    One other area that I would like to mention, I know USDA--
and I appreciate it--keeps a close watch on the funds and where 
they are going, yet I have heard from some of my people and 
recipients about the frustration in accessing their funds. In 
fact, sometimes their construction activity has been delayed 
because they couldn't get access to the funds they have been 
approved for. So what changes can Congress or what can we do to 
better balance the need for robust oversight and yet at the 
same time make sure we can expedite the construction process?
    Ms. Torres Small. That is a great question and one that I 
would love to continue to work with you to try to resolve 
because it is a balance, right? How do we make sure that the 
money is being used effectively and efficiently, while also 
making it easy and quick for deployment? One of the changes we 
have made is allowing ISPs to purchase the materials before the 
environmental review is complete so that they can plan, 
especially with some of the challenges we are seeing there. But 
there is still work to do. And another change is in the 
environmental review process. Again, that coordination, that 
timing of when we need to be doing outreach, and then also 
working to make sure that we are communicating that quickly 
with the ISP.
    Acting Administrator McLean, do you want to add anything?
    Mr. McLean. No, thank you very much. And I appreciate the 
comments about the general field representatives. They are 
absolutely the foundation of our work. We had one of our GFRs 
say that it is not a job, it is a lifestyle. I mean, it is 
really rewarding to be able to see their work. Yes, 
environmental review is a challenge. And it is about capacity. 
It is about having enough staff to be able to process those 
procedures. And we have to be able to complete the 
environmental review before we can release funds and before 
construction can start under the statutes that we have to 
enforce, the Endangered Species Act, National Environmental 
Policy Act, and the Historic Preservation Act. And we value and 
respect those statutes, but we work very hard to be able to get 
the funds out as quickly as possible.
    The Chairman. Thank you.
    And now the gentleman from California, Mr. Carbajal, is 
recognized for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chairman. And thank you to all 
the witnesses and my friend, Under Secretary Torres Small for 
being here today.
    Broadband access is required to participate in the modern 
economy. As such, we must make sure every single American has 
access to reliable high-speed internet. Broadband allows people 
to access education, healthcare, employment, the online 
marketplace, and much, much more. Congress has made significant 
investments over the last decade to expand broadband. Recently, 
the bipartisan infrastructure law provided $65 billion in 
broadband funding. I am heartened to see the progress USDA and 
other agencies make as they continue to roll out this funding, 
and I look forward to working with you as we bring more 
communities online.
    Under Secretary Torres Small, can you describe how USDA is 
doing outreach to communities who lack broadband access and 
help make them aware of funding opportunities. Within these 
communities, is the USDA able to provide technical assistance 
or are more resources needed?
    Ms. Torres Small. Thank you so much, Congressman Carbajal. 
It is wonderful to see you. And it is such a great question, 
this theme about technical assistance, and how do we make sure 
we are reaching communities that aren't the usual suspects who 
already know how to navigate our programs. One of the things we 
are doing--and I recognize the irony in this--is webinars, so 
that way folks can--they don't have to travel to learn about 
it. And our Innovation Center has been very helpful in making 
sure we are providing really comprehensive training on those 
webinars. But you have to have high-speed internet to access 
that, so we also have our robust staff on the ground, over 450 
offices across the United States and folks who are used to 
going out and traveling.
    I just drove 4 hours to visit a Navajo chapter that had not 
received a ReConnect grant, and we paired them with someone 
nearby who had and had a conversation about what it was like to 
take that next step from we know we don't have high-speed 
internet, what do we do next? So being able to have validators 
who have navigated a tough process, be able to help walk 
through an applicant about future opportunities is a great way 
to do that. That takes time, that takes staff, that takes a lot 
of travel across really rural places and dirt roads. And that 
is why investing--that is why our GFRs are so crucial.
    Mr. Carbajal. Thank you. I would encourage you to also look 
at natural facilitators that already exist or folks who 
interface with many of those underserved communities. There are 
already a lot of vehicles there that could be a win-win by 
partnering to multiply the education, the information that is 
being attempted to be disseminated.
    Under Secretary, can you also elaborate on the successes of 
the Community Connect Grant Program and the Distance Learning 
and Telehealth Grant Program? Do you think these programs can 
be improved to benefit more people?
    Ms. Torres Small. Thank you so much for that. One quick 
thing on existing facilitators, it is such a crucial point. 
What it makes me think of is in our water environmental 
programs, our circuit riders, and then also the relationship we 
have with RCAP, so other people on the ground who have other 
relationships, they are trusted partners in the community.
    When it comes to distance learning and telemedicine, it is 
a crucial part of the mix. Having the internet infrastructure 
on the ground or on the poles is one thing. You also have to 
have the technology to be able to use it. And one of the places 
I see that the most is in rural hospitals because you are able 
to reach people who then don't have to drive miles just to get 
the healthcare they need. And it also allows opportunities in 
terms of clinics to do a lot more preventative work. And when I 
think especially about obstetrics, like what does it mean to 
start your life in the rural community you want to call home 
and be able to have that prenatal care, the ability to go 
directly and provide service directly into a home through--a 
Distance Learning and Telemedicine Grant can be really 
powerful.
    Acting Administrator McLean, do want to add anything there?
    Mr. McLean. Thank you very much. And one of the areas that 
we have observed growing interest in distance learning and 
telemedicine has been in telepsychology and teleconsultations 
and also treatment of addiction or prevention through 
prescription monitoring. So it is a very exciting technology, 
and you get better health results in rural communities because 
you are able to connect using telemedicine.
    Mr. Carbajal. Thank you. I also want to draw your attention 
to maybe an alternative point of view. We oftentimes think of 
reaching the home, but even if we could connect with one center 
in their community so they don't have to drive miles away, but 
they could go to a center that is technologically equipped for 
them to have those consultations, I would encourage you to look 
at that as a possibility.
    Mr. Chairman, my time has expired.
    The Chairman. The gentleman from Ohio, Mr. Balderson, is 
now recognized for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman. Thank you for being 
here today, Madam Under Secretary. It is good to see you again.
    During your last visit to the Committee, I expressed my 
concerns regarding the significant changes to the 
Infrastructure Investment and Jobs Act made to the ReConnect 
Program's underserved threshold. As you know, the 
infrastructure bill only requires 50 percent of households to 
be underserved instead of 90 percent. Building on that, I am 
concerned that without using the FCC's maps, a significant 
amount of ReConnect funding could go to areas that are already 
considered served or even to areas that will be funded by the 
FCC's RDOF program or the NTIA's BEAD (Broadband Equity, 
Access, and Deployment) program. With this in mind, can you 
tell me specifically how USDA is going to prevent duplication 
in phase 4 of ReConnect?
    Ms. Torres Small. Thank you so much for that question. It 
is a crucial component, how do we make sure we are leveraging 
our resources as efficiently as possible? So in terms of--we 
are following the statute, right, that has a 50 percent 
unserved, but we are also making sure that we are getting the 
word out about the set-aside of non-match grant that goes to 90 
percent unserved and so prioritizing reaching the most unserved 
through that means as well.
    We talked earlier in this hearing about the importance of 
timing when it comes to different awards, and so we are working 
carefully in coordination to forecast when our windows will be 
open and identify--you mentioned RDOF, for example, what the 
timing is for when they will declare certain projects ready to 
authorize. And that is something we have done very 
intentionally in ReConnect round 4 is say when we will consider 
an RDOF award and when we will not. And so if it has been ready 
to authorize by a specific date, then we will not consider an 
area that is covered by an RDOF award.
    Mr. Balderson. Thank you. My next question would be you may 
be aware that in a recent GAO report, ReConnect was identified 
as one of the 133 Federal programs administering broadband 
support--excuse me. With all of these new COVID-era programs 
how do you coordinate with the NTIA, the FCC, and other 
agencies to ensure ReConnect funds are not duplicated or 
overbuilding other programs?
    Ms. Torres Small. That is crucial to this work. And there 
are challenges. We talked about the silos and just folks being 
used to always doing one thing and knowing who to call within 
their agency, and we have to now change that so that we know 
who to call across the agency. The MOUs are of course the 
foundation for that, but they cannot be the end of it. We have 
biweekly meetings to set up that regular cadence of 
communication, but also we are working hard to reach out to 
each other proactively whenever there is a sticky situation.
    We have also worked to reach out for opportunities, too, so 
combining on webinars for outreach so we can provide 
information on both programs, sharing staff for review of 
applications. And to speak a little bit more specifically, I 
will turn it over to Acting Administrator McLean.
    Mr. McLean. Yes, thank you very much. The key is to sharing 
data in real time. We share our applicant data as well as our 
award data with our colleagues across the Federal agencies as 
soon as it is available. Coincidentally, this afternoon, I am 
having a meeting with my colleagues in NTIA, Treasury, and FCC, 
so we have regular coordination. And we do work on cases 
individual to de-conflict applications. None of the Federal 
agencies want to pay for the same thing twice. Now, there will 
be cases where we might not be able to de-conflict because we 
have to be true to our statutes. We are faithful to the laws 
that this Committee has endorsed, but to the extent we can work 
with our colleagues in other Federal agencies and eventually 
across state lines when the BEAD money goes through the states, 
we will engage fully and be transparent and open with all of 
our data.
    Mr. Balderson. Thank you, sir. And thank you, Under 
Secretary.
    I can't see my clock, Mr. Chairman, so I will yield back my 
time. Thank you.
    The Chairman. All right. Thank you.
    And the gentlewoman from Washington, Ms. Schrier, is now 
recognized for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman.
    And welcome, again, to my friend, Under Secretary Torres 
Small. It is so good to see you again.
    I would like to touch on a few issues with you quickly. As 
you know, my district in Washington State benefits greatly from 
the rural broadband programs authorized in the farm bill, and I 
am so happy that we can talk about them today because they are 
critical, as we have seen during pandemic. We also have a lot 
of players in Washington State. We have an excellent state 
broadband office. We have public utility districts who have 
invested heavily, local municipalities, private partners, and 
more. And I have heard from those entities but also from 
several my colleagues today about this concern about the USDA, 
NTIA, and the FCC all communicating to ensure there is no 
duplication around programs and that not only can these 
programs be utilized to their fullest extent, but also that 
they can be additive and really amplify each other's benefits. 
And so I was not going to ask a question about this but rather 
just emphasize what several of my colleagues have pointed out, 
that that coordination is critical.
    I did have a question though about, in addition to the 
coordination, are there gaps or places where Congress can be 
helpful in aiding with the streamlining in the upcoming farm 
bill?
    Ms. Torres Small. Thank you so much, Congresswoman Schrier, 
for that. The coordination is crucial. And the requirement that 
we share data has been incredibly helpful. And as Acting 
Administrator McLean mentioned, noting that it is real time and 
making sure that data is really real time is really valuable. 
The other piece that we have learned in terms of timing is the 
announcements of our awards and when windows will be open and 
working to coordinate better there, so I think it is a place 
where we would like to have an open dialogue.
    In addition, there are opportunities with the fact that we 
have different players in this space. There are different 
relationships. There are different people who are used to 
accessing those streams of funding. But ways that we can better 
learn from each other is something I am really interested in 
pursuing.
    Acting Administrator McLean, do you have anything to add 
there?
    Mr. McLean. No, I think that was very well stated. In terms 
of the flexibility is very useful to us. We have multiple 
programs which we administer, sometimes with year-to-year 
changes in the requirements, and the ability to transfer funds, 
we were able to pull some IIJA money forward to be able to fund 
out of round 3. That was a very useful tool. But we are limited 
to do future pulling forward money because they have different 
requirements. So that is something I think to bear in mind is 
the flexibility that the agencies have and the Department has 
to be able to move money to where it is needed most.
    Ms. Schrier. Thank you. I think we will have to continue to 
work on this to make sure we get this right because it is such 
a big investment and so important in our districts.
    Also, I know there have been some concerns about 
coordination around the ReConnect Program and specifically the 
middle mile infrastructure to ensure that the rural areas are 
getting the attention they need both in unserved areas and 
underserved areas, and having a coordinated approach with 
shared mapping and accurate mapping would help these efforts. 
So, Madam Under Secretary, in the time you have remaining, can 
you talk about how your office plans to incorporate the new FCC 
map that has been announced as you consider USDA programs?
    Ms. Torres Small. Thanks so much. So, as you know, we 
currently use the NTIA NBAM as part of our desktop review when 
we determine where service areas are and then of course, we 
allow ISPs to challenge that and then we, if necessary, get on 
the ground to determine that. But we are also supporting the 
FCC in creating their map, which NTIA will later rely on to 
distribute the BEAD money. So I have just made an announcement 
in multiple venues with ISPs because the deadline for their 
time to submit information for the creation of map was coming 
up, and I was just saying, please don't forget, this is why it 
is important and so leveraging our relationships to make sure 
that they are doing that. So that mapping collaboration is 
crucial.
    You also mentioned middle mile, and this is absolutely 
true. I was just in a meeting with multiple rural electric--or 
telco cooperatives, and they were talking about, well, 
ReConnect doesn't fund middle mile. But sometimes if you create 
the service area in a way where you are connecting two places, 
you can build-out where you otherwise wouldn't. That being 
said, there are places where you need middle mile and you can't 
ultimately reach a final house. And so we have been forecasting 
that to state agencies because--sorry.
    The Chairman. Thank you. I am sorry. We are trying to get 
everybody in.
    Ms. Schrier. Thank you.
    The Chairman. Votes are going to be coming up quickly. We 
have a second panel. We want to accomplish it all.
    Ms. Schrier. I yield back.
    The Chairman. The gentleman from Kansas, Mr. Mann, is 
recognized for 5 minutes.
    Mr. Mann. Thank you, Mr. Chairman. I will turn that down a 
little bit.
    I represent the First District of Kansas, 63 primarily 
rural counties in the western central part of the state. In my 
part of the country, we greatly rely on broadband to connect 
our communities to one another and to the rest of the world 
with telehealth, a lot of things we talked about this morning, 
precision agriculture, and a plugin to global markets, which is 
what our producers are dealing with every single day.
    So many Americans and Kansans are still unserved and 
underserved, and we should make sure our taxpayer dollars are 
being spent judiciously on existing programs and that the goals 
set by the USDA and/or the FCC must be realistic and be able to 
be met with by providers. What checks are in place to ensure 
that the USDA implements its programs as efficiently and cost-
effectively as possible? And do you feel like we are stretching 
these dollars as far as we possibly can to reach as many people 
as we possibly can?
    Ms. Torres Small. It is so important. Because this is a 
historic investment, we have to make sure it goes in the right 
places. And Rural Development is unique in this work. We were 
talking earlier about that delicate balance of--because we are 
a reimbursement program. It is unlike other programs out there. 
We reimburse for existing expenses, and so that makes sure that 
we are applying it efficiently and that we are truly 
documenting that every house and address within that service 
area can be served. But it does mean you have to administer 
that award in a different way, and that is that is time 
intensive. So that is one of the balances were walking.
    The other point you mentioned was what is realistic, right, 
in terms of the speed? I am guessing you might be thinking of 
in ReConnect round 3, we changed the threshold to 100 down, 20 
up, which is higher than it was previously, and then the build-
out to 100 megabytes per second symmetrical. We talked about 
some of the reasons why that is valuable, right, that upload 
speed so that rural people can be creators as well as users, 
and also for things like precision ag or smoke detection, being 
able to upload to the cloud.
    We also found that it was desirable. We had more 
applications in ReConnect round 3 than in both other two rounds 
combined. So we are seeing ISPs really step up to this 
challenge, and it is exciting.
    Mr. Mann. Great, thank you. Second question for you again, 
Madam Under Secretary. We have heard from numerous stakeholders 
how difficult it is to provide broadband services. And, as you 
know, USDA, FCC, NTIA all have their own data mapping. And we 
talked about this a little bit earlier. And they don't 
necessarily follow the same collection methods. This is near 
and dear to me because when I was lieutenant governor of our 
state, the FCC produced a map that was inaccurate. We then had 
to go and partner with the Farm Bureau to challenge their bad 
work product and show them how it was inaccurate when they are 
the ones that produced the bad work product in the first place. 
Of course, we talked about this earlier; but, Congress has 
passed the Broadband DATA Act to help better simplify the 
information, require information sharing. How does RUS ensure 
that those communities are mapped correctly in the first place 
and that the data is integrated into the broader FCC maps? I 
know you talked about that a little bit earlier, but could you 
expand upon how do we do a better job of making sure that we 
have accurate maps in the first place?
    Ms. Torres Small. It is such a good question, and I would--
it is two parts. It is making sure that the awards that we 
administer truly reach the people that need it and making sure 
that from those awards that truly reach those, that information 
gets to the maps because the maps are crucial in terms of 
deciding where you could create a plan or you could plan to 
serve in the future, right? It is the vision of what is 
possible. So we have a desktop review that right now uses NBAM 
as well as other mapping tools to identify whether or not the 
claimed service area is right. Then we allow internet service 
providers to challenge that. If they say, hey, actually, we 
serve that and then we wade through their challenges to see if 
they are providing the data to back that up. And then if there 
is still a conflict, we will go on the ground and prove it up. 
And then we send that information to NTIA for NBAM to continue 
to improve their mapping.
    To talk about the fabric and the FCC, I will shift briefly 
over to Acting Administrator McLean.
    Mr. Mann. Yes.
    Mr. McLean. I encouraged the trade associations and our 
borrowers to engage with the FCC on their mapping process to 
make sure that the data is accurate. And we are moving in the 
FCC's mapping initiative to what they call the challenge 
portion where there can be a dialogue back and forth between 
community service providers about where the service is to make 
that map as good as it can be. But again, at RUS we look at the 
best information that is available, but then we go further by 
providing opportunities for service providers to comment, we 
validate those comments, and then, if necessary, we will send 
people to the field to look.
    The Chairman. The gentleman from California, Mr. Panetta, 
is recognized for 5 minutes.
    Mr. Panetta. Thank you, Mr. Chairman. I appreciate this 
opportunity to talk about such an important area with such an 
educated and intelligent witness as the Under Secretary. Thank 
you very much for being here, Under Secretary, again, as well 
as appreciate your visit out to the district recently as well.
    Obviously, as you saw in my district on the Central Coast 
of California, access to reliable broadband internet is an 
absolute necessity for our students, for our farmworkers, for 
our patients, for our businesses, especially in districts like 
mine but also districts all across rural America. And I think, 
unfortunately, you have seen a lot of challenges.
    Now, fortunately, this Congress and your Administration has 
begun to take action. The American Rescue Plan funded 
localities and local ISPs with projects for broadband in rural 
communities. We created the Emergency Broadband Benefit, now 
the Affordable Connectivity Program to subsidize the cost of 
service for families. And most notably, we passed the 
bipartisan Infrastructure Investment and Jobs Act, which is 
going to make a huge investment in broadband, including $42.5 
billion just in broadband infrastructure.
    Now, there are issues, though, in getting that funding to 
rural communities, as you have heard about and as you know well 
about. And one of the main issues that really complicates 
things is that there are over a dozen Federal definitions of 
rural. This becomes an issue when these definitions are also 
used to distribute these types of resources. As you heard my 
colleague Ms. Schrier talk about the ReConnect Program as one 
of those programs that uses the rural definition to determine 
eligibility, but that is kind of difficult in districts like 
mine because what we have seen is that none of those Federal 
dollars that we continue to fight for gets down into our 
communities, especially my community, which, as you know, is a 
rural community. And that has got to change. And hopefully 
looking ahead to the next farm bill, we can think carefully 
about standardizing eligibility for Rural Development programs 
in a way that is more inclusive for the needs of rural 
communities like yours and mine.
    There is obviously frustration, especially at the local 
level, because sometimes they are counted as rural, sometimes 
they are counted as non-rural. And the complexity of those 
definitions can lead to wasted time for our local leaders who 
are seeking very thoroughly in checking the boxes, filling out 
the applications, funds for these types of programs. What is 
the USDA doing to address this issue that is very frustrating 
for all of us at all levels? And what can Congress start to 
think about in looking at the 2023 Farm Bill to bring clarity 
to these types of issues when it comes to the definitions of 
rural?
    Ms. Torres Small. That is such a good question. And one of 
my favorite parts of this job is getting to see the whole--what 
rural looks like in different places all across the country. 
And it is very different. It is very diverse. And our 
regulations and statutes don't always acknowledge that 
diversity across rural America.
    As we have conversations about how we make it simpler to 
navigate, but also whether we change the rules of eligibility 
for what rural is, and we are happy to provide technical 
assistance with that, we have also got to recognize that 
changes in eligibility would also impact who is applying for 
the loans and grants and that the vast majority of our programs 
are oversubscribed. So conversations about eligibility also 
mean who is competing for already limited funds.
    But it is a huge need, and we see it. I remember when I was 
a staffer for Senator Udall and we were trying to help out a 
rural place, we got this rubric of all of Rural Development's 
programs. And it is, which one--are you rural in this one 
versus this one versus this one, right? And it can be hard, 
especially if you have a volunteer mayor or not the resources.
    So the other way we are trying to address this is through 
technical assistance and navigators. So I think we have to have 
a dual approach here, which is advancing with what we have 
right now and making sure that we help navigate the complex 
programs, but then also trying to simplify them as much as 
possible.
    Mr. Panetta. And then in our role coming up here in the 
farm bill, is there--I mean, besides continuing these types of 
conversations, is there anything that we should be tracking in 
your expertise?
    Ms. Torres Small. For that, the big thing is, as we 
consider eligibility, what does that mean for oversubscribed 
programs? In addition, I will turn it over to Acting 
Administrator McLean if you have anything else to add.
    Mr. McLean. Yes. And I think what is rural is almost a 
metaphysical kind of question because----
    Mr. Panetta. Please don't respond that way to my local 
mayors.
    Mr. McLean. But we look at the statutes that Congress 
enacts as resource allocation decisions, and they direct us in 
those populations.
    The Chairman. Unfortunately, the gentleman's time has 
expired. Now, the gentlelady from Minnesota, Mrs. Fischbach, is 
recognized for 5 minutes.
    Mrs. Fischbach. Thank you, Mr. Chairman. I appreciate the 
opportunity. And thank you for being with us today, Madam Under 
Secretary. And I just got a question. The FCC recently rejected 
long form applications for the biggest winners of the agency's 
recent RDOF program round. Numerous areas in my district have 
held large tracts of Census blocks that were initially approved 
for build-out under the RDOF program that were later rejected. 
But Todd County in my district in particular had broad swaths 
of areas sectioned off for build-out that many months later are 
now back to square one due to the recent announcement. Can you 
speak to the importance of properly vetting applicants to 
ensure that they can deliver on the promises that they make 
while applying for taxpayer funding?
    Ms. Torres Small. Thank you so much, Congresswoman. And, 
this is some of the timing challenges that we were talking 
about before in terms of coordination, but it also is an 
opportunity, right? As you mentioned, we have to make sure that 
the investments that we make truly can be delivered. And we 
certainly have seen that the RDOF awards from the previous 
Administration, there are multiple steps. And that last step 
of--or the next step of being ready to authorize is a crucial 
one to make sure that a promise is truly deliverable in terms 
of the time frame that is allowed within the RDOF component.
    The way Rural Development does it is by being a 
reimbursement-based service. So as they are implementing, that 
is when they receive the award. And again, there is a balance 
there to make sure that it is as easy to administer as possible 
and as un-burdensome as possible for the recipient. But that is 
how we currently navigate that, making sure that a recipient is 
able to deliver on their promises. We also have a 5 year build-
out, which I think is a realistic build-out time that also 
recognizes the urgency of the situation.
    Mrs. Fischbach. And thank you for that answer. And for 
rural areas, including Todd County and many other counties in 
my area, this broadband development is necessary for the 
modernization and development of their community, and it helps 
bring families back to the areas, it helps attract businesses, 
it helps farms create efficiency in their operation, and it 
really helps spur infrastructure development. Broadband 
development, in essence, is about building strong rural 
communities.
    And I am sorry about the buzzing.
    Can communities concurrently be eligible for USDA 
assistance under the ReConnect Program while a long form RDOF 
application is pending?
    Ms. Torres Small. That is a really good question. And this 
is again the timing piece that we were talking about earlier. 
So recognizing that RDOF awards have multiple stages, including 
ready to authorize, and that is the step that we have paid the 
most attention to. The timing for the ReConnect round 3 took 
some coordination in terms of figuring out how to disburse 
those awards. For ReConnect 4, we have been really clear. There 
is a lesson learned there, and specifically said if a project 
was not declared ready to authorize by a specific date, we 
would consider those areas.
    For any additional information, I will give it to Acting 
Administrator McLean.
    Mr. McLean. Yes, I mean, that is exactly the point is where 
do we draw the line and we are drawing the line on the opening 
of the application window. If you are ready to authorize, you 
are taken care of by RDOF, but we don't want to pull all those 
territories off of the map for opportunities. We also make our 
applicants commit, that if they are an RDOF recipient and an 
RUS recipient, that we don't pay for the same thing twice. We 
can level up those RDOF awards, and we work carefully, again, 
to de-conflict. But, I would encourage those communities to 
apply to round 4 because I think it is an extraordinary 
opportunity.
    Mrs. Fischbach. All right. Well, thank you. And maybe we 
will follow up with more specifics with you at a later time. 
But thank you both for your perspectives, and there is 
certainly information and lessons to be learned from that. So 
thank you very much.
    And with that, I yield back, Mr. Chairman.
    The Chairman. The gentleman from Georgia, Mr. Bishop, is 
recognized for 5 minutes.
    Mr. Bishop. Thank you, Mr. Chairman. Thank you for being 
here today, Under Secretary, and for the Department's recent 
investments in both rural healthcare, as well as the new round 
for ReConnect funding.
    We have heard of issues with the system for management 
award or the general application intake system. What 
improvements has the Department made to streamline and improve 
the application intake and the review of applications to get 
resources to communities in a timely manner? I know that Ms. 
Pingree had asked about staffing needs earlier, and I think 
that she was cut off in that answer, but if you could address 
that with also the additional resources? What changes have been 
made in personnel, presumably staffing, or what changes do you 
plan to make to address the increased workload? And finally, we 
have heard some aspects of the application process that can be 
burdensome, for example, of the submission of all of the 
financial documents for very large providers, which overburdens 
them. What changes have been made, what changes are being 
considered to address these burdens or the issues that we have 
heard from our applicants?
    Ms. Torres Small. Thank you so much, Congressman Bishop. It 
is wonderful to see you, and I really appreciate your in-depth 
questions. When it comes to the online platform, ReConnect was 
established in 2019, and we have created an online platform 
from there that continues to be improved. There were some bugs 
at certain points that we had to work through, and so we are 
working through that. In fact, we adjusted the schedule so that 
there would be reliability in terms of the application portal 
for this current round that is open. So we feel positive about 
where we are now. And in talking with recent applicants, we got 
good feedback on the maps that are integrated into the online 
portal. They said it was actually much easier than in previous 
rounds in terms of identifying where their proposed internet 
service area would be. So we are making improvements, and there 
are still improvements to be made.
    Do you have anything you want to add in terms of the online 
portal?
    Mr. McLean. No, I just want to say that this highlights 
where those administrative dollars have been so valuable to us 
because we have been able to create the most modern of IT 
systems with the ReConnect funding. And we walk through the 
applicants step by step, and it makes it difficult to proceed 
to the next step if you don't do the first step right. And so 
that reduces errors.
    And I am very, very proud to report that between rounds 3 
and rounds 4--I mean, rounds 2 and rounds 3 of our ReConnect 
awards, we experienced a 39 percent drop in review times and a 
33 percent drop in failed or incomplete applications, in part 
because of that outreach that we have done and trying to create 
a system that prevents you from making mistakes and submitting 
an incomplete application. So we are making progress. We are 
learning, as the Under Secretary said, from each one of these 
experiences and trying to apply in each rounds continuous 
process improvement.
    Mr. Bishop. Are you increasing your staffing?
    Ms. Torres Small. Yes. So again, to the administrative 
funds that were included in the bipartisan infrastructure law, 
that made a huge difference because we were able to both bring 
on contractors immediately to help address some of the 
environmental review challenges and opportunities and then also 
think longer-term about how we bring people on. And being able 
to do both at the same time is really crucial. We have a large 
portion of our workforce, 38 percent, that is eligible to 
retire, and so we have to think about succession plans. How do 
we make sure we are bringing people on who can learn from these 
experts in the field----
    Mr. Bishop. Let me ask you--excuse me. My time is 
expiring--what Congress can do, the authorizing Committee and 
the Appropriations Committee, to help continue to improve the 
program moving forward?
    Ms. Torres Small. Continued support of our robust staff in 
Rural Development that includes state and area offices, as well 
as the support in the national office and headquarters is 
crucial, and help in hiring issues.
    Mr. Bishop. Thank you very much for that succinct answer. 
My time has expired, and so I yield back, Mr. Chairman, 16 
seconds.
    The Chairman. The gentleman from Iowa, Mr. Feenstra, is 
recognized for 5 minutes.
    Mr. Feenstra. Well, thank you, Chairman Scott and Ranking 
Member Thompson. And, Under Secretary Torres Small, thank you 
so much for your testimony. Thank you for being here. Again, I 
greatly appreciate it. I remember your comments from the last 
time you were here, and I am very grateful that you took the 
time out to be here again.
    I think just listening to your testimony and your questions 
and answers, broadband is largely technical, and there are a 
lot of technical issues that happen. There are also innovations 
that are happening in this technology space. My district is the 
second largest rural district in the country. It is very, very 
big, very vast, and a lot of small communities and so forth. 
And when you talk about telehealth, this is very critical. 
Also, precision farming is really gaining a lot of ground. So 
how do we look at the next farm bill and what innovations can 
we do or would you say, hey, we should address as we move 
forward in this sector?
    Ms. Torres Small. That is such a great question because to 
me it speaks to the need to connect high-speed connectivity to 
the equipment that we use to leverage that. I would also add 
that it is an opportunity to invest more in place-based work 
because as we look at what are the unique factors of a rural 
place that make it the perfect place for precision ag or the 
perfect place for this type of manufacturing that requires this 
connectivity, it needs to be based in the community where it 
exists. And so looking at--place-based work requires strong 
technical assistance, requires strong presence in the field, 
and I think those are some of the opportunities we have to 
collaborate on in the future.
    Mr. Feenstra. Do you see, as we move forward with the 
different grants that are out there, and we talked about a lot 
of them, ReConnect and stuff, that we should put a bigger or a 
larger emphasis on--you talked about upload and download speeds 
earlier. Do you think that we should put more emphasis on that 
because we just see that is the future? My great fear is, is 
that we are putting things, whether it be fiber in the ground 
and stuff like that, that that could be problematic, and it 
could be, I mean, on upload and download speeds, if we look 5 
years out and stuff like that. I mean, what are your thoughts 
there?
    Ms. Torres Small. Yes, future proofing is really hard with 
an emerging technology, right? We have to kind of guess where 
the puck is going. That is why we have been very intentional 
about the 100 up, 100 down symmetrical speed. But we also need 
to have an open dialogue about technologies and about necessary 
speeds. The thing that is helpful when it comes to--we are 
technology neutral, but when it comes to fiber specifically is 
that you can build upon it. Different technologies can often 
leverage on it. But we need to continue to have a dialogue 
there.
    Mr. Feenstra. So just switching lanes just a little bit. So 
we have a land-grant university in my district, Iowa State 
University, that does great outreach, extension outreach and 
things like that. Is there an avenue that we could promote or 
push programs or the agenda through extension, through land-
grant universities, and things like that?
    Ms. Torres Small. Absolutely. There are a few things that 
immediately come to mind in terms of the Swiss Army knife that 
is all the programs that Rural Development has. The Rural 
Innovation Stronger Economies Program is a really exciting one 
for how we integrate education and workforce opportunities with 
outreach in a specific community.
    Also, I think in terms of working with land-grant 
institutions, I think there are always opportunities for them 
to participate in or to apply for Community Facilities Grants 
and Loans, for example, as well as the Distance Learning and 
Telemedicine.
    Mr. Feenstra. Yes, I would agree. I mean, there are a lot 
of things that we can do there. I have one final question. And 
I am not sure if you know this or not. So in March 23, 2020 
obviously, we passed the Broadband DATA Act, and there was 
obviously, we had to create the maps. You talked about the maps 
earlier. Do you have any sense of when those maps will be 
completed? There is a lot of discussion out there right now and 
everybody sort of like I would love to know the maps. And do 
you have any idea on that?
    Ms. Torres Small. The information I have on it is that the 
window for when the ISPs had to provide information to the FCC 
ended earlier this month, I think September 2 was the date, and 
we were helping push to get that done. The next phase is a 
really important phase where internet service providers can 
challenge that information so that we can ground truth it a 
bit. And that is the information that I have in terms of where 
they are at.
    Mr. Feenstra. Okay. Well, Under Secretary, I appreciate 
your time and thank you for your input, I am very grateful. 
Thank you again. I yield back.
    The Chairman. The gentlewoman from Iowa, Mrs. Axne, is now 
recognized for 5 minutes.
    Mrs. Axne. Thank you, Mr. Chairman. And thank you, Under 
Secretary Torres Small. We are so thrilled to have you here. 
And thank you, Mr. McLean, for being here. Your work is greatly 
needed in states like Iowa. You just heard from my colleague, 
and of course this is very important for our state, so thank 
you for all the work that you do.
    And, Under Secretary, thanks for coming to Iowa. I know you 
know our state and how important it is to make sure that we 
have that last mile connected. I have been working on this 
issue since I was in state government under three different 
governors, and we are trying to close in, in Iowa, so I am 
going to ask you a little bit about the mapping, how we are 
working on that nationally, but also how we are coordinating 
with other states because so many of our states have been 
working on these things for so long, but we seem to just have 
the little bits and pieces we can't figure out. And that is the 
part that really is where the rubber hits the road.
    So Representative Feenstra just brought up mapping. And I 
know we are making some progress there. You mentioned that. 
Because this week the FCC is finally taking challenges to the 
improved maps Congress asked them to do under the Broadband 
DATA Act, and those maps should help. And the challenge process 
is key to getting community input on where they do and don't 
have service, of course. But one of the issues I have heard 
about is there is just a wide range of different maps that we 
are using for different programs. And I know those FCC maps 
aren't complete yet, but once those challenge processes are 
done that you just mentioned, how are you at the USDA planning 
to work with the FCC and the NTIA to make sure all these 
Federal programs are aligned, that we are using the best 
possible information, and we are working together to target 
that funding?
    Ms. Torres Small. That is such a great question. And it is 
a challenge when it comes to the different maps and making sure 
that we are staying on track, that we are using the best thing 
we have right now as we try to create the next best thing. And 
that is part of what we are doing when it comes to Rural 
Development, but right now we use NBAM, which provides a lot of 
information and incorporates a lot of information from state-
based maps, for example, for that desktop review. But the way 
that we are also working to make it better is when we get 
better information from the challenge process that we have or 
the on-the-ground testing that we have that goes back into that 
map to improve it for the future.
    We anticipate, as FCC develops its map, recognizing that 
that challenge process is really crucial, and there will be 
information that has been gleaned from NBAM to inform that 
challenge process, that we will continue to collaborate to 
provide more information to improve all of the mapping 
resources that we have.
    I will go ahead and pass it to Acting Administrator McLean.
    Mr. McLean. Yes, thank you. [inaudible].
    Mrs. Axne. Well, thank you for that. And I couldn't agree 
with you more because those telcos have done a great job. And 
my goodness, they are consistently upgrading services to ensure 
that their rural customers get exactly what other folks are 
getting. So I am glad to hear this is being worked on. We 
absolutely need to make that happen.
    Let's move to the state. As you know, in Iowa and many 
other states, but we got $200 million of the American Rescue 
Plan to use that funding for broadband expansion in the state. 
The money is going out now. We are starting to work on that, 
right? I know the state is going to be getting even more money 
from the infrastructure law. So we have funding, it is coming, 
and we are going to make this last step happen.
    In light of that, though, we talked about the Federal 
coordination. What is happening to coordinate with the states 
and the telcos and everything that we have in a great state 
like Iowa?
    Ms. Torres Small. That coordination is crucial. I have been 
at a state broadband conversation in Alabama talking to state 
legislators. We have been doing outreach specifically to state 
legislators as they think about how they create their programs, 
specifically talking about what ReConnect does so we can look 
at ways that they could complement it. And one of the big 
things that they have talked about is middle mile because 
ReConnect doesn't specifically do that.
    We have learned, too. A state broadband agency contacted 
us, and the first time they contacted us, they had a little bit 
of trouble. Finally, we were connected thanks to Congress, to 
their Representative. And through that, we realized, oh, we 
also have to do outreach to broadband agencies. And so now we 
are doing trainings with broadband agencies. So it is a 
learning process, but it has gotten much better.
    Mr. McLean. Thank you. And I would encourage the state 
agencies to use the data that we put out. We try to be as 
transparent as possible. All of our applications through the 
service area validation process are publicly available, so they 
are seen, they are open. And then all of our awards are well-
known, so that is contributing to that information. We would 
look forward to working with the states to make sure that we 
can coordinate our programs together.
    Mrs. Axne. Thank you.
    The Chairman. The gentlelady from Florida, Mrs. Cammack, is 
now recognized for 5 minutes.
    Mrs. Cammack. Well, thank you, Mr. Chairman. And thank you 
to all of our witnesses and the Ranking Member for hosting this 
very, very important hearing today. I feel like this is one of 
the areas where we can come together as Republicans and 
Democrats and really work to deploy this critical broadband 
across America.
    So I will just jump right in to a series of questions here. 
Madam Under Secretary, we have heard from numerous stakeholders 
about how difficult it is to provide broadband service to areas 
when mapping and data accuracy are inefficient and 
insufficient. As you know, USDA, FCC, and NTIA all do their own 
data mapping and do not necessarily follow the same collection 
methods. The same could be said for the states as well. 
Congress has passed legislation, including the Broadband DATA 
Act, to help better simplify this information and require 
information sharing. How does RUS ensure that these communities 
are mapped correctly and that the data is integrated into the 
broader FCC maps?
    Ms. Torres Small. Thank you very much for that question. We 
are a ready helper in this work. So although we have a separate 
process for validating our awards to ensure that for our 
mandate that area of service can truly connect to each address 
within them, we also are working to make sure that we are 
getting that information to NTIA and FCC. One of the ways that 
we are doing that is we have the desktop review of NBAM, and as 
we get information about the accuracy of that, we send it back 
directly to them, so it is real-time updates.
    We are also working hard to make sure that the service 
providers are helping strengthen those maps, too, so for the 
FCC map that is the fulfillment of the legislation you 
mentioned, we were out on the road, the Acting Administrator 
and I, reaching out to all of our contacts, all of the ISPs 
saying, don't forget the deadline, the deadline is coming up. 
And now that we are in that challenge part of the phase, that 
is crucial because that is how you ground truth, those claims 
about service. And so we are getting out the word again about 
the importance of making those challenges. So we will continue 
to work carefully and continue to provide feedback about what 
we are seeing on the ground to strengthen mapping writ large.
    Mrs. Cammack. Well, and as a follow-up to that, the State 
of Florida, for example, has their own mapping initiative 
underway. How is the Federal Government working to pair up and 
match up with these maps that the states are producing, as well 
as private providers, and what are some of the other issues 
that you may have or concerns or challenges in linking the USDA 
broadband programs with other agencies like FCC and NTIA and 
these state maps? And how is this slowing down the USDA's 
current process in administering broadband funding?
    Ms. Torres Small. So I don't want to overstep our role at 
Rural Development when it comes to the inputs for the maps. But 
I will state that the work, for example, that has happened in 
Georgia for mapping that has really showed a great improvement 
in terms of knowing what is on the ground has helped inform the 
Federal work that is being done now for mapping.
    When it comes to Rural Development specifically, I think we 
have been able to leverage the multiple types of information 
that we have really well because we have that desktop review 
that utilizes all of that information. But we also just don't 
take that for granted. We allow folks to challenge it. And 
then, if it is necessary, we ground truth it as well. That can 
be a long process, so I suppose in the future if information 
was perfect, we could shorten that process. But until then, it 
is really important. And frankly, we don't always ground truth 
if we can resolve the information from the get-go, and that has 
allowed us to be more efficient. But that being said, our 
priority is having that right information, and so when there is 
a conflict, we spend that extra time to make sure we are 
delivering the money as efficiently as possible.
    Mrs. Cammack. So, to that point, and this will be my final 
follow-up because I am running short on time, I hear 
continuously from various stakeholders, and we have heard in 
past hearings that the lengthy process, the approval process 
for broadband loan applicants, it is too long. So how long is 
it taking on average for broadband funding to get out the door 
once the application window closes? And what can we do to 
expedite those funds getting out the door?
    Ms. Torres Small. This is the balance that we have been 
talking about. So we have a 5 year build-out, and that is the 
main--and just to answer your question quickly, the main thing 
is that ReConnect has a 5 year build-out. But we reimburse for 
expenses so that----
    [The information referred to is located on p. 1530.]
    The Chairman. Yes, if you can follow up, that is a good 
question, with Mrs. Cammack in writing.
    And now the gentleman from Arizona, Mr. O'Halleran, for 5 
minutes.
    Mr. O'Halleran. Thank you, Mr. Chairman and Ranking Member 
Thompson, for hosting today's hearing on rural broadband. I 
want to also thank Under Secretary Torres Small and the 
witnesses for being here today.
    First of all, I would like to start off by giving a special 
thanks to the Under Secretary for her recent visit out to the 
district. We really enjoyed having you out there. I am glad we 
share the same goal of 100 percent connectivity that all 
Americans, no matter their ZIP Code, deserve high-quality and 
reliable broadband. Connectivity ensures access to essential 
services, making it easier for patients to receive the care 
they need, students to participate in online learning, and 
small businesses to compete in the increasingly digital and 
global marketplace.
    Broadband is essential for rural communities to thrive in 
the modern economy, which is why it is so urgent that we bring 
broadband to the hardest-to-reach and underserved areas. And 
ReConnect has been a successful program, and we look forward to 
more of that.
    I want to go back, though, to some of the issues. We have 
been working on mapping now, went through the whole process of 
getting it moving along a few years ago. And now we are at a 
point in time when we--the last number of Members have 
identified mapping as a continuing issue. I am very concerned 
that we have an enforcement mechanism to not go back to the 
times when we didn't have mapping kept up to date.
    I also have a big concern that the agencies and how they 
are coordinating this process are going to do that. And the 
ground truthing piece of this, we can't move ahead unless we 
have enough availability to go out into that field and identify 
clearly that this is what is happening and enforce the 
companies to be able to do this in an appropriate way so we 
don't go through this time and time and time again.
    So, Under Secretary, could you comment on that, please?
    Ms. Torres Small. Thank you so much, Congressman. It is a 
pleasure to see you. And thank you for your advocacy for 
underserved areas. You represent some of the most rural places 
in the country, and I know that ground truthing is 
exceptionally important in the places that you serve. That is 
why Rural Development's field structure is so crucial. I love 
how many times we said GFR, or general field representative, in 
this hearing because they are the folks who are making sure 
that the maps are accurate and that we are truly reaching the 
people who don't have access to high-speed internet right now, 
the people in the farthest-flung places across our country.
    So continuing to invest in that structure is crucial. The 
administrative funds as part of the bipartisan infrastructure 
law was crucial for that. And it provides that accountability 
piece that you mentioned, Congressman, about making sure that 
the maps continue to be updated and are reflecting the reality 
on the ground.
    Mr. O'Halleran. Thank you, Under Secretary. A follow-up to 
that, we know that it didn't work in the past. What have we 
learned from that? And do you have the personnel to be able to 
address these issues and the coordination with the FCC and 
others to be able to overcome the mistakes of the past?
    Ms. Torres Small. I think we have all learned that Census 
blocks aren't the accurate description of the reality. And so 
having people on the ground, being able to verify when 
necessary, is really valuable.
    Staffing continues to be a challenge for Rural Development, 
both in terms of the hiring process, in terms of the funding 
for staffing, and then also in terms of finding qualified 
people. Now that there are so many people working in high-speed 
internet, it is a competitive field, and so that is a challenge 
as well. So those are the lessons that we are learning and the 
challenges that we are trying to navigate to continue to be 
better at reaching the hardest-to-reach places.
    Mr. O'Halleran. Thank you very much. I also want to 
emphasize the importance of outreach to our local communities. 
You mentioned that a little bit. And I know you have stressed 
that time and time again. That is why you have been out in the 
field so much. But the underlying aspects of this are real. And 
people right now--we, as Congress, should be able to be out 
there all the time, making sure we are educating the public as 
much as possible. But what type of programs can we anticipate 
on a large scale for the public to be able to understand not 
only the programs but the timing mechanisms and all the other 
planning that is going to go into that?
    Ms. Torres Small. The outreach is crucial. That is why 
President Biden's Rural Partners Network is really exciting, 
focusing efforts in places that need it most.
    Mr. O'Halleran. Thank you, Mr. Chairman. I yield back.
    The Chairman. Could you please respond in writing? The 
gentleman's time is up, and we have a hard stop with votes 
coming.
    [The information referred to is located on p. 1530.]
    The Chairman. The gentleman from Florida, Mr. Lawson, is 
now recognized for 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman, for you and Ranking 
Member Thompson for having this hearing, Under Secretary Torres 
Small, for joining us today. I appreciate your staff working 
diligently with our office on a number of Rural Development 
projects, and I look forward to hosting you in the district 
real soon.
    Under Secretary, on September the 6th, the winner for the 
fourth round ReConnect funding opened for grant application 
submission until November 2. Once this round of ReConnect 
funding closes, how long do you expect it to take for USDA to 
review and then award grant funding for applications?
    Ms. Torres Small. Thank you so much for that question and 
for your advocacy for rural America. I really appreciate the 
chance to get to work with you.
    When it comes to the awards process for ReConnect, we are 
making great strides in terms of getting awards out as quickly 
as possible. And you can look at ReConnect 3 as an example of 
that. We are releasing awards on a rolling basis as quickly as 
we can so that projects can start running. And that is why we 
are releasing that information in tranches. Also, we have been 
able to get out money quicker because we intend to make awards 
with the bipartisan infrastructure law through ReConnect this 
year, this fall, which is very exciting.
    When it comes to ReConnect round 4, we anticipate having 
that same track of releasing those awards as soon as we have. 
Now, we spent a lot of time talking about this three-step 
process where we have the desktop review of an area in terms of 
eligibility, then it is the challenge process, and then, if 
necessary, the ground truthing. That does take some time, and 
that is why being able to announce projects on a rolling basis 
is a helpful way to let folks know as quickly as possible when 
an award has been made.
    Acting Administrator McLean, do you want to add anything to 
that?
    Mr. McLean. Yes, thank you. And, of course, to be very 
honest, we will know once we get the application window closed 
as to how many applications we receive because that is a big 
driver of how long it takes to be able to go through the 
applications. As the Under Secretary mentioned earlier, round 3 
of ReConnect attracted more applications than round 1 and round 
2 combined. And so it was a big task, but yet we were able to 
accelerate our record of approval and our pace of approval. And 
we look forward to replicating that for round 4.
    Mr. Lawson. Well, that is really great news when you talk 
about round 3, what is really happening, so that means the word 
is getting out. And so I think that my next question will be 
with over a dozen agencies in the program charged with program 
development and interagency communication it is essential, how 
did the USDA--what are they doing to enhance communication 
coordination with the different programs and agencies?
    Ms. Torres Small. Yes, coordination with this many agencies 
and this level of unprecedented investment just has to be a way 
of life. And so that means reflecting on those MOUs and making 
sure they are integrated into all of the work that we do, 
whether that is talking about timing for getting out our 
programs, whether that is navigating awards and service areas, 
or whether that is navigating how we do technical assistance, 
for example, with NTIA's upcoming investment in technical 
assistance. It is also a chance to learn from each other, and 
that is what we are learning on the ground as well, using each 
other's networks to reach new partners and also each other's 
expertise to better administer our programs.
    Mr. Lawson. Okay, my colleague Mr. O'Halleran was talking 
about some of the mapping, and so I just wanted to say how will 
USDA Rural Development use the new maps to better allocate 
Federal funds in order to limit over-building and ensure 
connectivity for all rural residents?
    Ms. Torres Small. For that, I will allow my Acting 
Administrator to respond.
    Mr. McLean. Yes, well, thank you very much. I think our 
highest priority is--and our scoring matrix focuses our 
resources on those areas that need it the most. And that is 
where we are putting a great deal of energy and outreach. And I 
think that this round of funding has some of the most 
advantageous scoring criteria for underserved areas, and we are 
looking forward to a robust response in round 4.
    Mr. Lawson. Okay, thank you very much. Great to see you 
guys again.
    And, Mr. Chairman, I yield back.
    The Chairman. Thank you very much. And, Under Secretary 
Torres Small, thank you. And, Acting Administrator McLean, 
thank you for joining us today. And having concluded all our 
questions for the first panel, you are now excused. And the 
Committee will take a brief 2 minute recess here to allow our 
first panel to leave and our second panel of witnesses to take 
their seats. Thank you.
    [Recess.]
    The Chairman. The Committee will come to order. And without 
objection, question time for Members for our second round will 
be 3 minutes to allow us to get to as many Members as possible 
before votes are called. We have a hard stop when votes are 
called on the floor, and we appreciate your cooperation.
    Let me introduce our first witness for our second panel. 
And this is Ms. B. Lynn Follansbee--I got that right, thank 
you--who is the Vice President of Strategic Initiatives and 
Partnerships for USTelecom.
    And our second witness is Hon. Tarryl Clark, who is the 
First District Commissioner in Stearns County, Minnesota. And 
she is testifying today on behalf of the National Association 
of Counties.
    And our third and final witness for this panel is Mr. 
Garrett Hawkins, who is the President of the Missouri Farm 
Bureau and is testifying on behalf of the American Farm Bureau 
Federation.
    Welcome to all of our witnesses. And you will each be 
recognized for your 5 minutes, and the timer should be visible 
to you. Once the yellow button comes on, that is caution. You 
will have a minute left and will count down from the 3 minutes, 
at which point your time will have expired.
    So let us get started. Ms. Follansbee, please begin when 
you are ready.

STATEMENT OF B. LYNN FOLLANSBEE, J.D., VICE PRESIDENT STRATEGIC 
   INITIATIVES AND PARTNERSHIPS, USTELECOM, WASHINGTON, D.C.

    Ms. Follansbee. Chairman Scott, Ranking Member Thompson, 
and other distinguished Members of the Committee, thank you for 
the opportunity to testify today. My name is Lynn Follansbee, 
and I am Vice President of Strategic Initiatives and 
Partnerships for USTelecom, the national trade association 
representing network providers, innovators, suppliers, and 
manufacturers committed to connecting the world through the 
power of broadband. Our diverse membership ranges from large 
publicly traded corporations to local regional companies and 
cooperatives.
    The COVID-19 pandemic clearly illustrated that high-speed 
broadband is the cornerstone of American life, connecting 
people to education, healthcare, employment, and virtually 
every aspect of our daily lives, while also ensuring our 
nation's economic security. USTelecom members actively 
participate in all Federal programs that support the deployment 
of broadband, including the Rural Utilities Service's ReConnect 
Program. We applaud the Committee for holding today's hearing. 
This is an important discussion as we look closely to how items 
adopted as part of the 2018 Farm Bill have impacted the 
deployment of rural broadband. It is also important to review 
how the U.S. Department of Agriculture works with other Federal 
agencies towards achieving one of our nation's top priorities, 
closing the digital divide.
    In order to do this interagency coordination among all 
Federal agencies that touch the broadband space is an absolute 
necessity. The Infrastructure Investment and Jobs Act programs 
provide a significant amount of money for broadband deployment, 
and there is a clear need for close coordination across all 
agencies involved.
    USTelecom recommends that policymakers require early 
reporting by states that administer broadband funding programs, 
particularly those funded by NTIA, and that data should be 
included in the FCC's broadband data collection maps. 
Similarly, agencies such as RUS should be sharing with the FCC 
their data about where they have provided grants and loans so 
that all agencies have complete information about all currently 
funded broadband projects, whether completed or not in order to 
avoid duplication and avoid government waste.
    USDA and other agencies must also align on the current 
definition of broadband. Having different deployment programs 
utilizing different speed minimums creates an inconsistent 
standard for broadband deployment. In the same vein, USDA must 
work directly with all Federal agencies to ensure consistent 
requirements related to supply chain, including the application 
of Buy America requirements.
    In addition to coordinating with other agencies, there are 
improvements RUS should be making to its ReConnect Program to 
create clear processes so there is greater transparency. 
Despite some changes, there also continue to be rules in place 
that limit participation by some applicants. USTelecom urges 
RUS to consider alternatives to its current rules on liens 
affecting collateral. Aligning with other Federal broadband 
programs and requiring a letter of credit would enable more 
carriers to participate, particularly larger companies who 
serve the most rural and remote customers in the nation.
    Although the ReConnect Program has admittedly evolved and 
had multiple successful rounds of its grant program, curiously, 
the ReConnect Program is still operating as a pilot program. In 
the upcoming farm bill, Congress should consider whether it 
intends to formalize the program, and if so, consider the 
program's current role in conjunction with available funds at 
other agencies.
    I also have the privilege of serving as the Vice Chair of 
the Mapping Working Group for the FCC's Precision Ag Task 
Force, which provides advice and recommendations to the FCC and 
USDA on how to assess and advance deployment of broadband on 
unserved and underserved agricultural lands. The task force 
working groups have done extensive research and developed 
recommendations that address current challenges. I applaud this 
Committee for its role in the creation of the Precision Ag Task 
Force as part of the 2018 Farm Bill. The task force is in its 
second 2 year term and has already made some excellent 
recommendations, which will no doubt have an impact on the 
advancement of precision ag.
    Key recommendations adopted thus far include compiling the 
FCC's broadband data collection effort with NASS, or the 
National Agricultural Statistical Service cultivated land data, 
so farmers can know where there is both fixed and mobile 
providers serving the ag and rural domains, including Native 
American ag lands.
    Increase incentives and subsidies at the local and national 
level to substantially increase connectivity, enhance both 
download and upload high-speed standards to meet the 
applications used in precision ag, improve collaboration 
between Federal agencies, and remove regulatory barriers and 
align their existing and individual file management, increase 
digital access to education and training for individuals 
engaged in farming, and place a priority on developing 
precision ag cybersecurity. These thoughtful and detailed 
recommendations reflect only a sliver of the hard work 
volunteer members of the task force are doing on a weekly 
basis.
    USTelecom and our members stand ready to work with the 
Committee, Congress, and Administration to connect all 
communities once and for all and close the digital divide.
    [The prepared statement of Ms. Follansbee follows:]

    Prepared Statement of B. Lynn Follansbee, J.D., Vice President 
  Strategic Initiatives and Partnerships, USTelecom, Washington, D.C.
Introduction
    Chairman Scott, Ranking Member Thompson, and other distinguished 
Members of the Committee, thank you for the opportunity to testify 
today. My name is Lynn Follansbee and I am Vice President, Strategic 
Initiatives and Partnerships for USTelecom, the national trade 
association representing network providers, technology innovators, 
suppliers and manufacturers committed to connecting the world through 
the power of broadband. Our diverse membership ranges from large 
publicly traded communications corporations to local and regional 
companies and cooperatives--all providing advanced communications 
services to urban and rural communities and everywhere in between.
    The COVID-19 pandemic clearly illustrated that high-speed broadband 
is a cornerstone of American life, connecting people to education, 
healthcare, employment and virtually every aspect of our daily lives 
while ensuring our nation's economic security. USTelecom members 
actively participate in all Federal programs that support the 
deployment of broadband, including the Rural Utilities Service (RUS) 
Rural eConnectivity (ReConnect) Program. And under the current 
contributions system, our members provide a significant portion of the 
funds for the Federal Communications Commission's (FCC) Universal 
Service Fund (USF) programs. USTelecom welcomes the opportunity to 
provide thoughts on how interagency coordination can best foster 
efficient use of all broadband deployment funding while maximizing 
governmental efforts to close the digital divide. We also appreciate 
the chance to offer some suggestions for improvement to the ReConnect 
program itself.
    We applaud the Committee for holding today's hearing. This is an 
important discussion as we look closely at how items adopted as part of 
the 2018 Farm Bill have impacted the deployment of rural broadband. It 
is also important to review how the U.S. Department of Agriculture 
(USDA) works with other Federal agencies toward achieving one of our 
nation's top priorities--closing the digital divide. Addressing 
challenges related to the deployment of broadband infrastructure is 
critical to connecting all communities, especially in rural areas.
Interagency Coordination is a Necessity
    USTelecom and its members strongly support the cross-agency effort 
to ensure that all Americans have access to high-speed broadband, and 
agree that coordination of all Federal agencies' programs is crucial to 
achieving this goal.
    The Infrastructure Investment and Jobs Act programs provide a 
significant amount of money for broadband deployment and there is a 
clear need for close coordination across all agencies involved. To 
ensure the best use of these critical funds, USTelecom recommends that 
policymakers require early reporting by states that administer 
broadband funding programs, particularly those funded by NTIA. This 
information on the areas that will be served by the funded projects 
will help avoid duplication or overbuilding and should be included in 
the FCC's Broadband Data Collection (``BDC'') maps.
    In adopting the Broadband DATA Act, Congress expressed a clear 
intent to ensure there is good data showing where there is service and 
where there is not--not only to close the digital divide, but also to 
ensure that scarce government resources are not spent on overbuilding. 
The recent agreement between the FCC, NTIA and USDA further advances 
this objective by requiring those agencies to share information about 
broadband availability and ``consider basing the distribution of funds 
for broadband deployment . . . on standardized data regarding broadband 
coverage.'' \1\ As we move forward to fully connect the nation, it is 
essential that all Federal and state agencies that support broadband 
deployment initiatives should align goals and rely on the BDC maps.
---------------------------------------------------------------------------
    \1\ 47 U.S.C.  1308(b)(3).
---------------------------------------------------------------------------
    Unfortunately, RUS has not always included FCC deployment data when 
making grants under the ReConnect program which has led to some 
wasteful overbuilding. With the Broadband Data Collection maps nearly 
completed, we are on the verge of having much more accurate data to 
guide these critical government investments. USTelecom urges the USDA, 
and all other agencies distributing funding, to prioritize policies 
that ensure government resources are coordinated and targeted to avoid 
spending funds on the same project.
    USDA and other agencies must also align on the current definition 
of broadband. Having different deployment programs utilizing different 
speed minimums creates an inconsistent standard for broadband 
deployment. Finally, to further support a coordinated effort to connect 
all Americans, USDA must work directly with all Federal agencies 
administering broadband funding to ensure consistent requirements 
related to supply chains for broadband equipment across all programs, 
including the application of Buy America requirements.
The ReConnect Program Should Be Improved
    All state and Federal Government broadband programs, including 
ReConnect, should narrowly direct resources to those communities that 
the BDC maps identify as having no service. Ensuring precious broadband 
funding is not wasted on overlapping projects is the only way we can 
reach 100 percent connectivity. Specifically, RUS should create clearer 
processes for both its applications and coverage challenges so there is 
greater transparency. Often, the results of coverage challenges are 
vague, or never made known at all, leaving providers wondering whether 
to proceed with a new build or upgrade to an existing network.
    Additionally, despite some changes, there continue to be rules in 
place that limit participation by some applicants. For example, USDA's 
current rules require the grant to be superior to all other liens 
affecting the collateral. USTelecom urges RUS to consider alternatives, 
such as a letter of credit in the event there are liens on the 
underlying property or portions thereof. Such a change would enable 
more carriers to participate, particularly larger companies who serve 
the most rural and remote customers in the nation. Likewise, Section 
7.4 of the RUS Grant Agreement does not allow an awardee to make 
distributions without RUS's consent while it is receiving grant funds. 
This appears to prohibit public companies from making distributions to 
its shareholders, thereby potentially limiting the company's ability to 
exercise its usual business practices and/or meet obligations to its 
shareholders. RUS should either clarify that this is not the case or 
change its rules to allow publicly held companies to participate.
    Although the ReConnect program has admittedly evolved and had 
multiple successful rounds of its grant program, curiously ReConnect is 
still operating as a ``pilot'' program. In the upcoming farm bill, 
Congress should consider whether it intends to formalize the program 
and, if so, consider the program's current role in conjunction with 
available funds at other Federal agencies.
Precision Agriculture Task Force
    I also have the privilege of serving as Vice Chair of the Mapping 
Working Group for the FCC's Precision Ag Task Force which provides 
advice and recommendations to the FCC and USDA on how to assess and 
advance deployment of broadband on unserved and underserved 
agricultural land. The Task Force's working groups focus in greater 
detail on specific issues related to Precision Agriculture, including 
Accelerating Broadband Deployment on Unserved Agricultural Lands; 
Mapping and Analyzing Connectivity on Agricultural Lands; Examining 
Current and Future Connectivity Demand for Precision Agriculture; and 
Encouraging Adoption of Precision Agriculture and Availability of High-
Quality Jobs on Connected Farms. Each of these working groups has done 
extensive research and developed recommendations that address current 
challenges.
    I applaud this Committee for its role in the creation of the 
Precision Ag Task Force as part of the 2018 Farm Bill. The Task Force 
is in its second 2 year term and has already made excellent 
recommendations to the Commission which will no doubt have an impact on 
the advancement of Precision Agriculture which helps farmers have more 
successful crops that ultimately feed all of our families.
    The report adopted by the Task Force in its first term had 
recommendations to:

   Improve Federal broadband maps and consistently validate 
        user experiences by building on the FCC's Broadband Data 
        Collection effort to combine it with existing agricultural maps 
        such as the NASS Cultivated Land data should be used to 
        determine the base map extent for determining Cultivated Land 
        area for the continental U.S. to reveal for farmers where there 
        is both fixed and mobile providers serving the agricultural and 
        rural domains, including Native American agricultural lands;

   Increase incentives and subsidies at the local and national 
        level to substantially increased to drive deployment of 
        connectivity, with an overarching goal of deploying future-
        proof networks and enable Precision Agriculture deployment in 
        to new areas of technology;

   Enhance both download and upload high-speed standards to 
        meet the technology needs in agriculture and identify, 
        implement, and/or strengthen policies to facilitate use of low, 
        mid, and high-band spectrum for Precision Agriculture 
        applications;

   Improve collaboration between Federal agencies and remove 
        regulatory impediments to implement a common set of performance 
        targets and standards that reflect the specific needs of 
        Precision Agriculture, including build-out requirements for 
        croplands and ranch lands. Multiple performance targets 
        tailored for specific Precision Agriculture use cases--
        specifically USDA, NASS, Farm Service Agency (FSA), Risk 
        Management Agency (RMA), Natural Resources Conservation Service 
        (NRCS) and other agencies should align their existing and 
        individual file management systems to have the capability to 
        receive electronic data layers that are commonly created 
        through the normal course of farm operations.

   Increase digital access to education and training for 
        individuals engaged in farming to meet the increased demand for 
        skilled workers that will result from the continuing adoption 
        of Precision Agriculture; and,

   Place a priority on developing Precision Agriculture cyber 
        security specialists by the USDA, and Department of Homeland 
        Security in recognition that agriculture is critical and 
        essential infrastructure and malicious acts should be treated 
        accordingly.

    These thoughtful and detailed recommendations reflect only a sliver 
of the hard work volunteer members of the Task Force are doing on a 
weekly basis to bring technology to crop lands and ranches to enhance 
the success of American agriculture workers.
Conclusion
    The challenges associated with rural broadband connectivity require 
an enduring private and public sector commitment and partnership. Thank 
you for holding this hearing today and for the opportunity to share 
some thoughts with you today. USTelecom and our members stand ready to 
work with the Committee, Congress, and the Administration to connect 
all communities and, once and for all, close the digital divide.

    The Chairman. Thank you very much, Ms. Follansbee.
    And now, Commissioner Clark, please begin when you are 
ready.

 STATEMENT OF HON. TARRYL CLARK, COMMISSIONER, FIRST DISTRICT, 
               STEARNS COUNTY, MINNESOTA; CHAIR, 
           TELECOMMUNICATIONS AND TECHNOLOGY POLICY 
          STEERING COMMITTEE, NATIONAL ASSOCIATION OF 
                    COUNTIES, ST. CLOUD, MN

    Ms. Clark. Thank you, Mr. Chairman, Ranking Member 
Thompson, and distinguished Members of the Committee. I 
appreciate the opportunity to testify today. My name is Tarryl 
Clark, and I serve as First District County Commissioner for 
Stearns County, Minnesota. I am also representing the National 
Association of Counties in my role as the Chair of the 
Telecommunications and Technology Committee.
    Counties play a major role in broadband deployment efforts 
within our communities, especially those in rural regions. We 
serve key roles as partners, funders, policymakers, data 
aggregators, and conveners for promoting high-speed internet 
access and broadband deployment across our communities. The 
lack of reliable broadband in our rural communities is a major 
economic barrier and an issue of socioeconomic equality. 
Without access to high-speed internet, many of our rural and 
underserved communities are becoming increasingly isolated and 
left behind. For those in small communities, broadband can 
serve as a lifeline, connecting students to their homework, as 
well as gaining degrees, connecting sick patients to medical 
consultation locally unavailable, and having important business 
opportunities, including precision agriculture.
    I am here today to underscore the central role that 
counties play in broadband deployment and accessibility efforts 
and how a strong intergovernmental partnership and 
collaboration will help us continue to work together to close 
the digital divide.
    As we have witnessed, COVID-19 exacerbated the already dire 
digital divide in rural America. We urge Congress to continue 
to fund broadband deployment geared specifically to rural 
communities. To be clear, we have seen great progress so far. 
Counties applaud the efforts in the American Rescue Plan Act to 
fund the deployment of high-speed internet access across the 
country. We also appreciate and continue to engage with the 
U.S. Department of Agriculture's ReConnect Program, whose goal 
is to target much-needed broadband access to rural communities. 
These historic Federal investments show the need for Federal 
support in broadband investments for unconnected and rural 
communities continues to be a top priority for America's 
counties.
    Beyond ARPA, the bipartisan infrastructure law also is 
offering vital resources to ensure access to high-speed 
internet to local governments. However, a continued focus on 
broadband infrastructure grants programs that are accessible, 
flexible, and respectful of the local decision-making authority 
is needed to connect rural America.
    Given the elevated Federal role in broadband deployment 
efforts, counties appreciate the increased coordination and 
collaboration across multiple Federal agencies. As we review 
the progress we have made so far and keep an eye on the future, 
we believe the following principles can help to continue to 
steward broadband deployment efforts across the country.
    First, streamline the grant application process, which is 
especially crucial for rural counties that may not have the 
personnel or fiscal resources when applying for grants that 
support broadband deployment.
    Second, programs should support broadband investments that 
prioritize high-speed internet that will provide dependable 
internet access for the long run. High-speed internet access 
continues to constitute a character providing reliable, 
affordable, and accessible service for our rural communities to 
benefit the most.
    Third, prioritize communities with no access to 
infrastructure, which includes areas that have yet to receive 
final approval for Federal funding in regards to building a 
viable broadband network in order to continue to proactively 
address the lack of connectivity in rural America.
    Finally, leverage local expertise and resources, which 
offer an unparalleled level of knowledge when setting 
requirements and parameters in Federal programs. This includes 
quantitative and qualitative data, mapping efforts, and 
community testimony. We urge our Federal partners to consider 
and value these resources for assisting in determining the 
level of need for our rural communities.
    Moving forward, we want to ensure we meet our collective 
goal of 100 percent connectivity across rural America, which is 
not only vital to the success of these communities, but also 
our nation. A strong Federal-state-local partnership is needed. 
We believe in consultation with counties, the 2023 Farm Bill 
provides a unique opportunity to further address the dire 
connectivity needs of our nation's rural counties to ensure 
they are resilient and future-ready communities.
    We appreciate your attention. I want to thank you again for 
this invitation and look forward to working together to close 
the digital divide faster and more efficiently.
    [The prepared statement of Ms. Clark follows:]

Prepared Statement of Hon. Tarryl Clark, Commissioner, First District, 
  Stearns County, Minnesota; Chair, Telecommunications and Technology 
Policy Steering Committee, National Association of Counties, St. Cloud, 
                                   MN
    Chairman Scott, Ranking Member Thompson, and distinguished Members 
of the Committee, thank you for the opportunity to testify on the 
importance of broadband and high-speed internet connectivity in our 
rural communities, and the role of county governments in helping to 
connect our most unserved and underserved residents across the country.
    My name is Tarryl Clark and I serve as the First District 
Commissioner in Stearns County, Minnesota and Chair of the National 
Association of Counties Telecommunications and Technology Policy 
Steering Committee. Stearns County is home to approximately 160,000 
residents who rely daily on the availability of high-speed internet to 
connect to remote work, education and telehealth services. Across our 
county, we boast a community whose backbone is the work of our rural 
communities and farmers, who depend on high-speed internet for uses as 
wide ranging as precision agriculture to modern participation in online 
commerce. Yet as demonstrated most recently by the COVID-19 pandemic, 
we are witnessing a connectivity gap that has left our rural residents 
out of reach from high-speed internet infrastructure and critical 
services. This lack of reliable broadband is a major economic barrier 
and an issue of socioeconomic equality.
    Counties play a major role in broadband deployment efforts within 
our communities. We serve key roles as partners, funders, policymakers, 
data aggregators, and conveners for promoting high-speed internet 
access and broadband deployment across our community. As partners and 
funders, counties work to connect our residents to high-speed internet 
services through strong public-private partnerships and the utilization 
of Federal grant opportunities. We rely on a system of 
intergovernmental coordination with our Federal and state counterparts 
to achieve the collective mission of closing the digital divide.
    As a testament to this role, and through the passage of the 
American Rescue Plan Act (ARPA) and implementation of the Coronavirus 
State and Local Fiscal Recovery Fund (Recovery Fund), counties have 
invested direct funds into critical broadband infrastructure and 
services through the ARPA Recovery Fund. Counties have also directly 
addressed issues of internet affordability and the ``homework gap,'' 
through direct aid and support for our residents ranging from public 
WiFi and hotspots to outreach efforts that support expanded 
collaboration with community anchor institutions.
    Counties also play a critical role as policymakers of broadband 
deployment within our jurisdictions. As stewards of public rights-of-
way and other public property access points, counties work together 
with internet service providers on a regular basis to streamline 
broadband deployment and access for our residents, while retaining 
local authority for public assets that are held in trust to benefit the 
local community. Counties support smart policies such as ``dig once'' 
and ``future-proofing'' broadband infrastructure and deployment efforts 
to ensure that our residents have access to ongoing and reliable high-
speed internet services.
    Finally, counties serve as data aggregators and conveners in 
broadband deployment efforts. Counties across the country have engaged 
in efforts to collect quantitative and qualitative data at the local 
level to determine the true state of connectivity and demonstrate 
community need for investments in high-speed internet connectivity. We 
also convene public partners and community stakeholders on a regular 
basis.
    The role of broadband in rural communities today cannot be 
overstated. In fact, ``broadbandification'' of the country can be seen 
as very similar to the rural electrification movement of the 20th 
century, where the Federal Government played a critical role in serving 
our rural communities when the economic incentive to extend the grid 
was not present. There is a large opportunity for intergovernmental 
partnerships and coordination to continue with the different USDA 
broadband programs currently under review ahead of the 2023 Farm Bill.
    As Congress begins negotiations around the 2023 Farm Bill, counties 
urge lawmakers to include provisions that will continue to advance our 
shared goals of closing the digital divide across America and providing 
rural communities with the resources they need to be resilient and 
future-ready in the 21st century. America's counties agree on the 
following recommendations:

   COVID-19 exacerbated the already dire digital divide in 
        rural America, and counties urge Congress to continue to fund 
        broadband deployment geared specifically to rural communities.

   The Bipartisan Infrastructure Law (BIL) is offering vital 
        resources to ensure access to high-speed internet to local 
        governments. However, a continued focus on broadband 
        infrastructure grant programs that are accessible, flexible, 
        and respectful of local decision-making authority is needed.

   To ensure we meet our collective goal of 100 percent 
        connectivity across rural America, counties support a stronger 
        Federal-state-local framework.

    COVID-19 exacerbated the already dire digital divide in rural 
America, and counties urge Congress to continue to fund broadband 
deployment geared specifically to rural communities.

    Our lives and futures have become inextricably tied to technology. 
Without access to high-speed internet, many of our rural and 
underserved communities are becoming increasingly isolated and left 
behind.
    The COVID-19 pandemic laid bare the digital divide in our country 
for rural communities, who are at a particular disadvantage in 
receiving adequate broadband service due to their remote location and 
lower population density. For these rural communities, broadband can 
serve as a lifeline, connecting students to online degrees and 
connecting sick patients to medical consultations locally unavailable.
    Congress made historic investments into America's counties with the 
passage of the American Rescue Plan Act (ARPA) and Bipartisan 
Infrastructure Law (BIL). Combined, both vital pieces of legislation 
have bestowed counties with the flexibility to invest in infrastructure 
networks targeted toward unserved and underserved households across the 
country. Counties have a large role to play in helping to steward these 
Federal resources and ensuring local communities receive access to 
high-speed and reliable internet service.
    As these historic Federal investments show, the need for Federal 
support for broadband investments in our unconnected and rural 
communities continue to be a top priority for America's counties. Both 
ARPA and BIL are offering vital resources in the form of direct fiscal 
aid to local governments. However, coupled with provisions in the farm 
bill, specifically resources through the U.S. Department of 
Agriculture's ReConnect Program, counties have been able to take major 
and necessary steps to close the digital divide. Counties urge that the 
focus on rural connectivity in the current farm bill be carried over 
into the 2023 iteration to support our continued efforts in broadband 
infrastructure.

    The Bipartisan Infrastructure Law (BIL) is offering vital resources 
to ensure access to high-speed internet to local governments. However, 
a continued focus on broadband infrastructure grant programs that are 
accessible, flexible and respectful of local decision-making authority 
is needed.

    The Bipartisan Infrastructure Law (BIL) is currently offering the 
nation an unparalleled opportunity to close the digital divide and 
provide accessible and affordable internet access for all rural 
Americans. The BIL's devotion of $65 billion towards broadband 
deployment, digital equity and internet affordability initiatives 
provides the opportunity for well-guided Federal dollars to reach every 
unserved and underserved community across the country.
    Counties are actively executing the mission of BIL's broadband 
goals by working with our state partners to implement the Broadband 
Equity, Affordability, and Deployment (BEAD) program, promote the 
Affordable Connectivity Program (ACP) to eligible households and 
communities within our jurisdictions, and developing digital equity 
plans in coordination with states to ensure our communities have the 
digital skills and support needed to thrive in a 21st century society.
    As we continue to focus on connecting our rural communities to 
high-speed internet, the farm bill's existing broadband infrastructure 
programs stand as significant opportunities to close the digital 
divide. Specifically, in our experience when implementing these Federal 
programs related to broadband, counties offer the following 
recommendations:

   Streamlined application processes: To ensure that rural 
        communities can and will participate in broadband 
        infrastructure grant programs, a streamlined application 
        process is needed. Counties play a large role in helping local 
        providers apply for Federal dollars, and the farm bill can 
        continue to support rural communities by providing as many on-
        the-ground resources as possible to support grant applications 
        and streamline application requirements while ensuring projects 
        meet the goals of delivering high-speed internet service.

   Prioritizing high-speed internet: To best meet the needs of 
        rural residents, Federal programs should encourage broadband 
        deployment projects that offer technological solutions that 
        best fit a community's needs, while also prioritizing projects 
        that promise the most reliable and high-speed service. This 
        balance will ensure that communities retain the utmost 
        flexibility to utilize the technologies that best meet the 
        geographic and topological conditions of a particular community 
        while ensuring that all broadband projects provide reliable and 
        ongoing service that sufficiently constitutes high-speed 
        internet.

   Prioritizing communities with minimal access to broadband 
        services: Counties support Federal funding being allocated to 
        areas with no broadband infrastructure, including areas that do 
        not currently have projects with final approval to use Federal 
        dollars to deploy broadband infrastructure that meets the 
        minimum definition of high-speed internet. Our rural 
        communities cannot miss this palpable moment to connect every 
        unserved resident to high-speed internet that will be 
        accessible and affordable for the foreseeable future.

   Leveraging local expertise and resources: Using local tools, 
        such as community broadband mapping, can play a large role in 
        helping our Federal partners identify where broadband is most 
        needed. This unique data will help shed light on the true state 
        of connectivity across the country, especially in rural 
        regions. Counties, along with the Federal Communications 
        Commission (FCC), will be able to adequately adopt the new 
        national standard and utilize these findings to address our 
        nation's connectivity issues.

    To ensure we meet our collective goal of 100 percent connectivity 
across rural America, counties support a stronger Federal-state-local 
framework.

    As important partners in the intergovernmental process, county 
leaders are most interested in serving in all capacities necessary to 
help close the ongoing digital divide in our rural communities. 
Counties that represent our rural residents recognize acutely that the 
ongoing divide leads to an unacceptable outcome for rural Americans, 
and the farm bill offers a unique opportunity to bring broadband 
infrastructure into focus for our rural communities.
    As prudent stewards of Federal dollars and diligent collaborators 
with internet service providers, counties can help play a central role 
in the implementation of Federal broadband programs geared towards 
rural America.
    This work to close the digital divide in counties across the 
country is ongoing and is truly a joint goal among Federal, state and 
local partners. For example, in my state of Minnesota, we have 
developed our Border-to-Border Broadband Development Grant Program 
initiative, which prioritizes high-speed internet services for our most 
unserved communities across the state. This state initiative requires 
robust coordination with local government partners to ensure we are 
meeting our residents' needs.
    Another example of this intergovernmental partnership is with the 
authorization of ARPA. In Stearns County, have dedicated over $16 
million to connect our residents to broadband that will ultimately 
provide fiber-to-the-premises to almost every household in our county. 
This project will ultimately require leveraging the efforts and funds 
from every township within our jurisdiction as well as ready-and-
willing internet service providers in our county to drive this project 
to completion.
    These are just two examples of how the intergovernmental 
partnership is critical in solving the technology divide in our nation. 
As important ground-level partners in our nation's intergovernmental 
system, counties can deploy the resources needed to make meaningful 
progress on rural broadband expansion, with a strategic focus on 
supporting rural communities.
Conclusion
    Chairman Scott, Ranking Member Thompson, and distinguished Members 
of the Committee, thank you again for the opportunity to testify today.
    Counties recognize that today, reliable, fast and affordable high-
speed internet is a fundamental part of ensuring our residents can 
achieve healthy, safe and fulfilled lives.
    We appreciate the efforts that have been brought forward thus far 
to address the current lack of connectivity in our rural communities 
and look forward to working with you to achieve our shared goal of 
closing the nation's digital divide.

    The Chairman. And thank you, Commissioner Clark.
    And now, Mr. Hawkins, please begin when you are ready.

   STATEMENT OF J. GARRETT HAWKINS, PRESIDENT, MISSOURI FARM 
           BUREAU, JEFFERSON CITY, MO; ON BEHALF OF 
                AMERICAN FARM BUREAU FEDERATION

    Mr. Hawkins. Good afternoon, Chairman Scott, Ranking Member 
Thompson, and Members of the Committee. My name is Garrett 
Hawkins. I am a fifth-generation farmer and a cattleman from 
Appleton City, Missouri, which is about an hour and a half 
south of Kansas City. Agriculture runs deep in my family's 
roots as our extended family raises everything from livestock 
to row crops to dairy production. I am also a husband and 
father and I am proud to serve as the President of the Missouri 
Farm Bureau and certainly appreciate the opportunity to provide 
input on rural broadband deployment across rural America.
    Deployment of this technology is critical for stimulating 
and revitalizing the rural economy. It is essential to modern 
agriculture, to the farmers and ranchers who grow our food, and 
for the quality of life for rural Americans. I see the need for 
broadband every day in rural communities as I travel all across 
the state. One family I was with the other night shared with me 
that they live just 1 mile past the city limit of a very urban 
area here in Missouri and still don't have access to high-speed 
internet. Other families I know use the technology not just for 
precision agriculture but for basic online marketing, as well 
as education.
    I recently visited with another fellow farmer from southern 
Missouri, who was thrilled to see fiber optic line being run 
just a few miles from his farm. Maybe, he said, they will come 
my way in a year or so.
    In Missouri, we have taken action to bring more broadband 
to rural communities. In 2017, Farm Bureau convened the 
Missouri Broadband Working Group. This group was comprised of 
over 120 stakeholders from all industries that formed 
recommendations that were taken to our governor and 
Congressional delegation. As a result, our governor established 
the Office of Broadband within our Department of Economic 
Development. This happened because of collaboration.
    In addition, we have advocated for the Missouri Broadband 
Grant Program, which provides financial assistance to providers 
who are seeking to deploy broadband in underserved and unserved 
areas. Over the years, the program has grown, and Missouri 
recently approved a $265 million investment into the grant 
program via our state's share of the American Rescue Plan Act 
funds.
    Although we have made significant strides, the work is far 
from finished. Our state is already laying the groundwork for a 
successful rollout of the Broadband Equity Access and 
Deployment Program, which was passed as a part of the IIJA. As 
an organization, we continue to advocate that our state direct 
adequate funding for the deployment of broadband to our 
unserved ag areas.
    Knowing where adequate services exist is critical to 
crafting sound policies related to deployment. Missouri's 
Office of Broadband will be addressing this challenge head on 
by allocating our Federal dollars for a statewide mapping 
initiative.
    I also have the privilege of serving on the FCC's Precision 
Agriculture Connectivity Task Force. Today's farmers and 
ranchers, we use precision ag techniques to make decisions that 
impact everything from fertilizer to the amount of water that 
is needed for our crops to the amount and type of herbicides 
that are applied. These are just a few examples of how farmers 
are using connectivity to bump yield, improve environmental 
impact, and increase profitability. Beyond specific on-farm 
needs, rural communities need access for healthcare and 
government services, education, and business opportunities.
    The upcoming farm bill is an important opportunity for this 
Committee to continue the work that USDA is already doing in 
the broadband space, including but not limited to the ReConnect 
Program. In fact, the reason why I am not in Washington, D.C., 
today is because our friends at Rural Development are hosting a 
ReConnect workshop here in the Farm Bureau building in 
Jefferson City.
    In the 2018 Farm Bill, Congresswoman Hartzler worked with 
us to pass an amendment to set the minimum build-out speed for 
USDA-funded broadband programs. We appreciate the Committee's 
work as well to better direct coordination and interoperability 
among programs administered by USDA, the FCC, and NTIA, and we 
want this cooperation to continue moving forward.
    As more precision equipment becomes available, we must make 
sure that we are prioritizing the build-out of projects that 
will take us into the future. Truly, that is what this really 
needs to be about is building a network, a system that will be 
future-proof for those of us in agriculture in rural America.
    Farm Bureau appreciates the Committee's interest in rural 
broadband. Thank you again for the opportunity to testify on 
this important issue on behalf of our farmers and ranchers, and 
I look forward to your questions.
    [The prepared statement of Mr. Hawkins follows:]

  Prepared Statement of J. Garrett Hawkins, President, Missouri Farm 
     Bureau, Jefferson City, MO; on Behalf of American Farm Bureau 
                               Federation
    Good morning, Chairman Scott (D-GA), Ranking Member Thompson (R-PA) 
and Members of the Committee. My name is Garrett Hawkins, and I am a 
fifth-generation farmer from Appleton City, Missouri, and the third 
generation in my family to own and operate the farm on which we live 
today. Agriculture runs deep in our extended family and spans 
livestock, row crop, and dairy production. I am a proud husband and 
father, and I serve as President of Missouri Farm Bureau (MOFB). I 
appreciate the opportunity to provide input on the necessity of rural 
broadband deployment and its importance across rural America.
    Deployment of broadband technology is a critical link in 
stimulating and revitalizing the rural economy. Rural broadband is 
essential to modern agriculture, the farmers and ranchers who grow our 
food and the quality of life for rural Americans. While most Americans 
take broadband for granted, according to the Federal Communications 
Commission (FCC) nearly 19 million Americans lack access to broadband. 
This is not distributed evenly, 17% of rural Americans lack access to 
broadband, compared to only 1% of urban Americans. Keep in mind that 
the statistic referenced above is only an estimate, as FCC's data 
collection and mapping processes are viewed as unreliable by many 
experts in the broadband field. Regardless, the number of people in 
rural America that lack access to broadband is discouraging. Farm 
Bureau members have recognized the urgent need to deploy broadband in 
rural communities and have elevated broadband access and affordability 
as a priority due to its impact on their daily lives.
    In Missouri, we have taken strong action to bring broadband to more 
rural communities. In 2017, Missouri Farm Bureau convened the 
``Missouri Broadband Working Group.'' This group was comprised of over 
120 stakeholders from all industries that formed legislative and 
regulatory recommendations that were ultimately taken to our Governor 
and Congressional delegation. As a result, Missouri's Governor 
established the Office of Broadband within our Department of Economic 
Development. This office is responsible for keeping their finger on the 
pulse of all things broadband in Missouri. The creation of this office 
would not have been possible without the collaborative efforts of Farm 
Bureau, our state Departments of Agriculture and Economic Development, 
and the University of Missouri.
    In addition, we successfully advocated for the Missouri Broadband 
Grant Program, which provides financial assistance to providers who are 
seeking to deploy broadband in underserved and unserved areas. Over the 
years, this program has grown, and in 2022 Missouri legislators 
approved a $265 million investment into the grant program via the State 
of Missouri's share of the American Rescue Plan Act (ARPA). This 
program would fund new broadband projects across the state in unserved 
and underserved communities, which the bill defines as areas lacking 
25/3 Mbps. Additionally, in 2020, the Missouri legislature passed 
legislation supported by MOFB that would allow our Department of 
Economic Development's Community Improvement District and Neighborhood 
Improvement District programs to be used to facilitate broadband 
deployment within special districts.
    Although we have been able to make significant strides in our 
state, the work is far from finished. Farm Bureau continues to advocate 
for strong investment to support broadband deployment in rural 
communities. Our state is already laying the groundwork for a 
successful rollout of the Broadband Equity, Access & Deployment (BEAD) 
program and the Digital Equity Act (DEA), which were passed as part of 
the Infrastructure Investment and Jobs Act of 2021 (IIJA). Missouri 
Farm Bureau, Missouri's Department of Economic Development, and other 
partners such as the University of Missouri Extension will be engaged 
in a full statewide tour and plan to hear from local communities to 
address real world challenges as we deploy programs. As an organization 
we are advocating that the state direct adequate funding for the 
deployment of broadband internet service to unserved agricultural 
areas.
    Knowing where adequate broadband services do and do not exist is 
critical to crafting sound public policies related to broadband 
deployment in rural areas. Missouri's Office of Broadband will be 
addressing this challenge head on by allocating recently approved ARPA 
funds for a statewide mapping initiative.
    The ability of the Federal Communications Commission (FCC) and all 
other relevant agencies to utilize accurate broadband coverage maps is 
crucial. Last Congress, Farm Bureau advocated for the passage of the 
Broadband Deployment Accuracy and Technological Availability Act 
(Broadband DATA Act). This bipartisan and comprehensive bill improves 
the accuracy of broadband coverage maps and better directs Federal 
funds for broadband build-out. Specifically, it requires the FCC to 
improve the accuracy and granularity of its maps by establishing a 
serviceable location fabric, which will serve as a baseline for served, 
underserved and unserved broadband areas, an outcome that Farm Bureau 
policy supports. We are pleased to see the FCC is making progress on 
these new maps and look forward to their expected release by the end of 
the year.
    Farmers and ranchers depend on broadband just as they do highways, 
railways and waterways to ship food, fuel and fiber across the country 
and around the world. Many of the latest yield-maximizing farming 
techniques require broadband connections for data collection and 
analysis performed both on the farm and in remote data centers. 
However, 18% of U.S. farms have no access to the internet, according to 
the USDA report, ``Farm Computer Usage and Ownership, 2021.''
    I serve as part of the FCC's Precision Agriculture Connectivity 
Task Force Accelerating Broadband Deployment on Unserved Agricultural 
Lands Working Group. America's farmers and ranchers embrace technology 
that allows their farming businesses to be more efficient, economical 
and environmentally responsible. Today's farmers and ranchers are using 
precision agricultural techniques to make decisions that impact the 
amount of fertilizer they need to purchase and apply to their fields, 
the amount of water needed to sustain crops, and the amount and type of 
herbicides or pesticides needed. These are only a few examples of how 
farmers use broadband connectivity to achieve optimal yield, improve 
environmental impact and maximize profits.
    Beyond specific on-farm needs, rural communities need access to 
health care, government services, and educational and business 
opportunities. For many rural communities, access can only be gained by 
using broadband services and sophisticated technologies that require 
high-speed connections. The coronavirus pandemic only exacerbated and 
made more apparent the need for broadband in rural communities as 
employees shifted to working from home, school districts closed and 
resorted to distance learning platforms, and patients sought health 
care through telemedicine platforms.
    The upcoming farm bill is an important opportunity for this 
Committee to continue the good work that USDA is already doing in the 
broadband space, including but not limited to the ReConnect Program. In 
the 2018 Farm Bill, Missouri Farm Bureau successfully worked with 
Congresswoman Vicky Hartzler (R-MO) to pass an amendment that set the 
minimum build-out speed for USDA-funded broadband programs at 25/3 
Mbps. We also appreciate the Committee's directive in the last farm 
bill to better coordinate interoperability among broadband programs 
administered by USDA, FCC, and NTIA.
    Precision agricultural equipment requires a wireless broadband 
connection for data collection and analysis performed both on the farm 
and in remote data centers. As more precision equipment becomes 
available, farmers and ranchers cannot take full advantage of 
technologically advanced equipment if they do not have access to 
wireless broadband in the field and on the ranch. A 2021 study, ``The 
Future of American Farming: Broadband Solutions for the Farm Office, 
Field, and Community,'' released by the Benton Institute for Broadband 
Society and sponsored by the United Soybean Board, found that to meet 
the growing demand among farmers for both upstream and downstream 
speeds, networks must be capable of 100/100 Mbps service. Upload speeds 
are sometimes more important to farmers and ranchers since they often 
need to upload data at faster speeds than they need to download items.
    As the Committee and agencies contemplate future broadband needs, 
MOFB and the American Farm Bureau Federation recommend the agency 
coordinate closely with the USDA Rural Utilities Service as well as the 
FCC Precision Agriculture Connectivity Task Force to support the 
interests of rural communities and agriculture.
    As Congress and the Administration implement programs that support 
the deployment of broadband to rural communities, please consider the 
following principles.

   Improve Data Accuracy & Mapping: We continue to advocate for 
        additional mapping and the use of more granular data sets when 
        determining which areas are eligible for Federal (and state) 
        funding.

   Plan for the Future: When awarding broadband projects, we 
        should consider speeds that account for teleworking and remote 
        education needs, rather than just recreational use of 
        broadband.

   Foster Local, State, and Federal Partnerships: Close working 
        relationships between local, state, and Federal partners are 
        critical to maximize the use of funds available for broadband 
        deployment. Various entities that deploy broadband should work 
        together in order to ensure the needs of rural America are 
        being met.

   Focus on Precision Agriculture: Too often, Federal programs 
        do not take into account the specific needs of agriculture and 
        rural America when developing programs that incentivize 
        deployment. Agriculture as a whole has the potential to be a 
        strong beneficiary of rural broadband services, and it will be 
        important to take these needs into account. Access to broadband 
        and data services can result in more data-driven decisions on 
        the farm, if the technology is available.

    Farm Bureau appreciates the Committee's commitment to expanding 
broadband to all of rural America. Broadband is essential to modern 
agriculture, the farmers and ranchers who grow our food and the quality 
of life for rural Americans. Thank you again for the opportunity to 
testify on an issue so critically important to the individuals Farm 
Bureau represents. I look forward to answering any questions the 
Committee has on this important matter.

    The Chairman. And thank you very much. And to each of our 
very distinguished three witnesses, we want to thank you for 
your excellent testimony.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between the Majority and 
Minority side. You will be recognized for 3 minutes each in 
order to allow us to get in as many questions as possible 
before votes are called on the floor.
    And also as I remind our Members, please keep your 
microphones muted until you are recognized in order to minimize 
background noise.
    And now I recognize myself to start with 3 minutes.
    And Ms. Follansbee and Commissioner Clark, as you well 
know, our 2018 Farm Bill established the FCC Precision 
Agriculture Task Force of which you both are members. And the 
task force adopted a series of recommendations, including 
improving Federal broadband maps, interagency collaboration, 
and prioritizing development of precision agriculture, 
cybersecurity specialists at USDA, among many others. Following 
the task force adoption of this report and its recommendations, 
let me ask you, have you all received any updates of the status 
of those recommendations? And have the agencies been working to 
implement those recommendations?
    Ms. Follansbee. I will go first. Thank you very much, 
Congressman, for your question.
    The Chairman. Yes, please.
    Ms. Follansbee. As a current member of the task force, I 
can't speak for the FCC and USDA on their behalf, but I can let 
you know that the task force is ongoing and it is actively 
working on a weekly basis. There are groups meeting weekly to 
work on additional recommendations and encourage further 
development of ideas that can improve precision agriculture.
    The Chairman. Okay. And Commissioner Clark, I believe, 
next.
    Ms. Clark. Thank you, Mr. Chairman. I would have to second 
what Ms. Follansbee just said in terms of the committee, but as 
it relates to the work we are doing at NACo, each of those in 
the groups that you referenced have been working with us, and 
we appreciate that ongoing commitment to doing so.
    The Chairman. Very good because we have so many agencies 
involved. And this is the greatest part of our challenge. If we 
are able to keep our agencies working in collaboration with 
each other, it is going to smooth this process. And so I am 
glad to hear that you all have received an update on it and 
that you are working to improve those areas.
    And I see that my time is rapidly closing. And so now I 
recognize the gentlewoman from North Carolina, Ms. Adams, who 
is also the Vice Chair of our Committee on Agriculture. You are 
recognized for 3 minutes.
    Ms. Adams. Thank you, Mr. Chairman, again, for hosting this 
hearing, and to our witnesses, thank you for your testimony.
    Ms. Clark, in your testimony, you discussed how COVID-19 
exacerbated the digital divide, particularly as it pertains to 
the homework gap. As an educator for over 40 years and a Member 
of the Education and Labor Committee, I am committed to 
ensuring that each and every student can access the internet at 
home so we can close this homework gap once and for all. So, 
Ms. Clark, can you discuss the role that local governments play 
in deploying high-speed internet and what a more robust 
Federal-state-local framework might look like?
    Ms. Clark. Mr. Chairman and Congresswoman Adams, thank you. 
Thank you for your commitment and your work on that. Certainly, 
as a mom and now a grandmother, I very much appreciate those 
efforts.
    This has been a really critical area. We saw it in 
particular in rural communities, but we also saw it in 
historically underserved urban areas as well. So most counties, 
many counties across the country have utilized, whether it was 
CARES Act (Pub. L. 116-136) or ARPA (Pub. L. 117-7) funds, have 
worked with school districts to try to help with making sure 
that they have the tools for the students to be able to do the 
homework the way they need to and while they have been doing 
remote learning to do that as well. Unfortunately because so 
many areas still don't have sufficient broadband, it can be 
really hard. Like I was thinking about one of my county's 
childcare providers who has kids of her own and they have an 
egg business as well, and they just can't get enough speed so 
as to be able to have everybody doing it at the same time. Or 
in my district where we have a large number of immigrants and 
refugees, if you have several kids that are trying to do 
homework at the same time, you need a high enough speed.
    So counties right now across the country are partnering 
with those districts and utilizing and trying to leverage 
resources so that we can get that high-speed affordable 
internet to as many of our school kids as quickly as possible. 
But your continued help is needed on that front, so thank you.
    Ms. Adams. Well, thank you very much. You actually answered 
my second question I have for you in terms of any roadblocks 
you may have. But Mr. Hawkins, do you have any information on 
about why we need to ensure that all farmers can make use of 
the precise technologies? I only have a few seconds.
    Mr. Hawkins. For us to compete in today's global 
marketplace, we need access to technology. And truly as I think 
about how to bring the kids home to the farm, Congresswoman, 
technology is the key. Technology is key to opening up more 
markets on the farm, better access to technology. But clearly 
in our rural communities I can't bring my kids home if the 
community has died around us. And so truly broadband is that 
thread of life through the community out to [inaudible].
    Ms. Adams. Thank you, sir. Thank you, and I yield back.
    The Chairman. Thank you very much. And now the gentleman 
from Indiana, Mr. Baird, is recognized for 3 minutes.
    Mr. Baird. Thank you, Mr. Chairman and Ranking Member. I 
really appreciate the opportunity to visit with these witnesses 
today, and I really appreciate their expertise.
    Mr. Hawkins, I really appreciate your interest in cattle 
and being a farmer and then I think you really touched on 
something that is important. The only way we are going to get 
these young people back to the farm is if we got high-speed 
internet and the technology so they can get on the phone or 
whatever they need to do.
    But in that vein, I wanted to ask you what you thought 
about what the upload speeds need to be for an average family 
in rural America, and does this need to change for farmers 
utilizing precision agriculture? So just a quick idea of what 
your thoughts are for download/upload speeds.
    Mr. Hawkins. Well, thank you for the question, Congressman. 
It is hard to wrap your arms around what is the ideal speed. 
What we continue to say is that the bandwidth has to be 
reliable and robust from the standpoint of being future-proof. 
In agriculture, as we look at the incorporation of precision 
technology, we need the ability to upload massive amounts of 
data in very rapid fashion.
    Just the other day at our agritourism conference here in 
Missouri, a young farmer displayed a drone and how he uses the 
drone to map his agritourism operation, as well as to use it 
for a chemical application to control weeds as well as pests. 
And again, as he thinks about cameras and his ability to scan 
and monitor the farm, you got to be able for that data to be 
able to transfer quickly, especially when we are working with 
third parties.
    I would also say anecdotally, I am looking at exploring and 
using a new innovative forage technology on the farm that one 
of the keys will be that I have connectivity in a robust 
fashion so that the company that is providing this forage 
technology can monitor to make sure the equipment is working 
effectively. And so truly, the farm of the future has to be 
connected, and truly, the future is now, sir. So truly, at 
least 100 is what we say megabit per second is truly what we 
need to be shooting for. My rural hospital says the same thing, 
that they need 100 up, 100 down in order to do telemedicine in 
a way that is truly a good experience for the provider as well 
as the patient.
    Mr. Baird. Thank you for that insight. And, Tarryl, I see 
you nodding your head, but we are about out of time, so I 
assume that means you think that is an appropriate speed, too. 
I got to tell you that at one time in my life, I was a County 
Commissioner as well and I enjoyed that time very much.
    Ms. Clark. Yes, sir.
    Mr. Baird. I appreciate what you are doing. I yield back.
    The Chairman. Thank you. The gentlewoman from Ohio, Ms. 
Brown, is recognized for 3 minutes.
    Ms. Brown. Thank you, Chairman Scott, for holding this 
incredibly important hearing on the future of broadband.
    While access to reliable and affordable broadband internet 
has long been the standard for many across the U.S., there are 
still millions of people, including my constituents in Ohio, 
who continue to struggle with unreliable connections and 
unaffordable rates. As workplaces and classrooms migrated 
online during the pandemic, the digital divide became apparent. 
I am proud that my colleagues and I passed legislation this 
Congress that included broadband funding to address the digital 
divide. The broadband appropriations in the bipartisan 
infrastructure law are one of the largest Federal broadband 
investments in history, and I look forward to building on our 
success.
    So my question is for Ms. Follansbee. In your testimony, 
you spoke to the value of factoring in user experience as we 
work to bring broadband access to all corners of the country. 
Can you explain why that is important for policymakers and 
those administering these programs to consider?
    Ms. Follansbee. Yes, thank you, Congresswoman, for your 
question. The user experience is essentially the customer 
experience, right? And we are trying to close the digital 
divide. We are attempting to make sure that everybody has the 
same type of service in the sense that folks have access to 
education, they have access to telehealth, they have access to 
precision ag applications. All of that is important. So we need 
to ensure that all of the country has at least some broadband 
and focus on the need to future-proof that network so that, 
going forward, the speeds can build. It is a scalable 
situation. Obviously, our members are building a lot of fiber 
with the BEAD money that is coming through NTIA, and we believe 
that will bode well for the future.
    Ms. Brown. Thank you for your answer. Commissioner Clark, 
as a former county council member myself, I know the important 
role that the county governing bodies play in the success of 
programs like these, especially where there are smaller 
municipalities within their jurisdiction. Can you speak to the 
partnership between county governments and USDA and other 
agencies, and are there areas for improvement?
    Ms. Clark. Thank you so much. Yes, actually, the FCC, USDA, 
NTIA, and others have been coming and working with us to help 
with the educational process but listening to the barriers, a 
number of which Members have talked about today. You brought up 
some of our most rural areas as well, and I can tell you using 
my county as an example, almost all of our townships are also 
leveraging their ARPA funds with ours, while we then also try 
to go apply for state and Federal funds to keep growing it so 
we can get all those areas covered. So really that local, 
state, Federal components are just critical, and we just need 
to keep working at it.
    The Chairman. Thank you.
    Ms. Brown. My time has expired. Thank you, Mr. Chairman.
    The Chairman. Thank you, Ms. Brown.
    And now the gentleman from Pennsylvania, our distinguished 
Ranking Member Thompson, is recognized for 3 minutes.
    Mr. Thompson. Well, Mr. Chairman, thank you so much. My 
apologies. I had to step out of the hearing room, but my 
appreciation to the second panel for their local service and 
everything that they do, especially in the space of bridging 
the digital divide.
    So I have a question for Mr. Hawkins. As you may know, last 
July, this Committee passed unanimously H.R. 4374, the 
Broadband Internet Connections for Rural America Act, which 
consolidates the ReConnect Program in the 2018 Farm Bill rural 
broadband programs. As we approach the next farm bill, how can 
we make these rural broadband programs more efficient and more 
effective for rural America?
    Mr. Hawkins. Well, thank you, Ranking Member Thompson, for 
the question and your continued leadership in this space along 
with the Committee.
    I have a couple of thoughts. Something that we would love 
to see more of in Missouri is more cooperation across 
territories to make sure that service is getting provided. And 
maybe in some cases it may be a rural electric co-op that then 
works with an investor-owned utility where their service areas 
butt up against each other. And maybe the co-op is providing 
broadband but the IOU has no interest in it. We want to see 
incentives for out-of-the-box thinking and cooperation to make 
sure that these dollars are stretched as far as they can and 
that service is provided in an efficient manner, so let's be 
creative.
    And then I would also say, an experience or a concern that 
we have had is the accountability on the back side. Once awards 
are made, making sure that those providers who are receiving 
these dollars are held accountable to provide the service that 
they said they are going to provide and do it in a timely 
fashion. So we have communicated, for instance, to the FCC that 
when a provider doesn't follow through, that maybe they need a 
second-in-line approach, that whoever was next in line, they 
have the second-best application, maybe those dollars should go 
there. Or if a state has shown leadership and established an 
Office of Broadband and has processes in place to handle those 
dollars, maybe those dollars should be given to that state to 
then allocate to make sure that those unmet needs are taken 
care of. But certainly, those are a couple of items that I 
would consider and hope you consider during the next farm bill.
    Mr. Thompson. Very good. Well, I will just encourage any of 
our witnesses that would want to weigh in, in writing. 
Obviously, the ReConnect Program is still operating as a pilot. 
And I would love to hear from you why it is important for 
USDA's broadband programs to be statutorily authorized, the 
importance of that certainty, going forward.
    But in the consideration of time, I will ask a reply from 
that, a future reply.* And, Mr. Chairman, I yield back.
---------------------------------------------------------------------------
    * Editor's note: the responses to the information referred to are 
located: for Ms. Follansbee, p. 1531; Ms. Clark, p. 1531; and Mr. 
Hawkins, p. 1532.
---------------------------------------------------------------------------
    The Chairman. Thank you, Ranking Member.
    And now the gentleman from Florida, Mr. Lawson, is 
recognized for 5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman.
    The Chairman. Three minutes.
    Mr. Lawson. Thank you, Mr. Chairman. You said 5 or are you 
saying 3?
    The Chairman. I say 3.
    Mr. Lawson. Okay.
    The Chairman. Thank you.
    Mr. Lawson. Thank you.
    In my home State of Florida, 96 percent of our population 
has access to broadband and only about seven or eight percent 
of Floridians in the rural areas have that access. The numbers 
are even lower in the rural counties in north Florida in 
Gadsden County. My home county was only about 13 percent of the 
residents have broadband while 89 percent of the households 
could receive it.
    The question is to the panel--when Congress is considering 
broadband funding legislation for counties like Gaston, why is 
it necessary that Congress not only fund projects that expand 
connectivity and infrastructure for broadband but also fund 
projects that address affordability, barriers of residence? And 
that is for the whole panel.
    Ms. Follansbee. I will start. Thank you, Congressman, for 
your question. Yes, there are several pieces to the deployment 
of broadband. There is access, which is what you are talking 
about, the initial ability to get broadband, and then there is 
affordability. And there is also something called adoption, 
which is getting folks to sign up for it. Fortunately, in the 
IIJA there are funds to not only increase deployment but also 
they created the Affordable Connectivity Program, which has 
been very successful in expanding the ability of folks with low 
incomes to be able to afford their broadband service. And 
adoption also is part of the program and will require 
additional work, but I think all three of those things have 
been addressed, and we look forward to seeing the programs 
implemented to achieve those goals.
    Mr. Lawson. Did anyone else want to speak to that?
    Ms. Clark. Sure, Mr. Chairman, and, Congressman. This is a 
really big issue. The ACP is going to be a big help. We are 
working actually on bringing providers who are going to receive 
funds through our county and can show that they are having that 
program available to residents. But in addition, we are finding 
a fair amount of rural areas that are experiencing something 
that one of our residents talked about, which is I am now 
paying for satellite. It is $120 a month. They say it is 
unlimited, and yet we start getting metered and shut down and 
my child can't even get homework and I can't run my business. 
We are hearing these kinds of stories around the country. So 
that affordability piece needs to be actually available to 
folks. So we want to keep working to have the ACP available 
throughout the country and for it to be real for all of our 
residents.
    Mr. Lawson. Thank you, Mr. Chairman. Do I still have a 
minute?
    The Chairman. No, I am afraid we are out. Thank you, Mr. 
Lawson.
    Mr. Lawson. With that, I yield back.
    The Chairman. Yes. And now the gentlelady from Minnesota, 
Mrs. Fischbach, is recognized for 3 minutes.
    Mrs. Fischbach. Three minutes? I will have to talk quick. 
Thank you, Mr. Chairman.
    Well, you know what, then I will go first to Commissioner 
Clark, who actually I was honored to serve with in the 
Minnesota Senate. And I will resist calling you Senator Clark 
but Commissioner Clark. You mentioned in your written testimony 
Minnesota's Border-to-Border Grant Program, which continues to 
be widely popular among providers and local governments, and 
you and I have both worked on this program, I am sure, in our 
time in the Senate for both state and local governments. But 
what lessons can we learn from this program, and what can we 
bring to the next farm bill reauthorization?
    Ms. Clark. Thank you, Congresswoman, for that question and 
for your work. It is an easier program for our internet service 
providers to apply for. It has been an easier program for 
counties and other local governments to also approach. So 
streamlining, streamlining processes is part of that, making it 
easier. Particularly you brought up Todd County earlier, for 
our smaller counties to actually be able to get in the door and 
have an opportunity to receive these funds.
    One of the approaches that we think is important would be 
to have kind of a single entry point, and so trying to figure 
out which place to go to federally or which program, streamline 
the application, make it so you can come in a portal and you 
really can be able to access the funds that meet your county's 
needs so that a county like Todd, who is really unserved, can 
actually deal with that, right? So the Border-to-Border Program 
we are hearing from smaller internet providers is that actually 
is a pretty doable program to approach. Let's make that happen 
on the Federal level, too.
    Mrs. Fischbach. Thank you very much. And maybe if any of 
the other panelists would want to just add. I have a minute 
left if anybody wants to add to those thoughts? All right. I 
don't hear anyone. So, Mr. Chairman, I will yield back my 49 
seconds. Thank you.
    The Chairman. Thank you very much.
    And Mrs. Flores is recognized for 3 minutes if she is 
connected. We have been able to get her connected. Okay. Mrs. 
Flores, are you able to get connected? Okay. If she does, you 
can interrupt me on my closing. And you can also, Mrs. Flores, 
submit your questions in writing, and we will make sure we get 
to you.
    I really appreciate everybody's cooperation here. We have 
votes pending. I appreciate everybody cooperating with the 
shortened time. And we appreciate our witnesses taking the time 
to really give us some valuable information. And thanks once 
again.
    But before we adjourn and I give my closing statement, good 
to have you back here in person. The Ranking Member got here in 
person.
    Mr. Thompson. Good to be out of the virtual world and back 
in the real world.
    Why, Mr. Chairman, thank you so much, once again, for your 
overall partnership as we advance the issues facing rural 
America or, as I like to say, essential America and 
specifically on the topic of broadband. I thought we had great 
witnesses today. I was very disappointed with the first panel 
once again, that NTIA and the FCC were so disrespectful to the 
people of rural America where they did not accept the 
invitation to testify today since they have a significant 
outreach.
    But I think we heard a lot of good things. I think it 
reaffirmed the great work that we as a full Committee, unified, 
had done in terms of, we heard about the need for a circuit 
rider position. We heard about mapping issues. And certainly 
within the bill that we advanced, there was some grant funding 
specifically to allow local entities to determine where the 
gaps were in the digital divide. So it just reaffirmed the work 
that this Committee is doing in the space of rural broadband, 
that we are right on target.
    The Chairman. Yes, we are.
    Mr. Thompson. And that is much appreciated, really 
encouraging USDA and Rural Utilities Service, who unfortunately 
has been allocated to a partnership role, but it looks like a 
minor role, certainly from a dollar perspective--when you look 
at $65 billion or whatever it was and USDA gets $2 billion of 
those dollars. I think that it demands that we as a Committee 
have a strong oversight role that we need to exercise in terms 
of bridging the digital divide in essential or rural America. 
And that these partners, the witnesses we have heard from, 
local government, key stakeholders, we look forward to working 
with them and performing that role and certainly encouraged 
USDA and specifically the Rural Development and Rural Utilities 
Service to exercise some oversight as well of the other two 
partners on this.
    And with that, thank you for the hearing, and I yield back.
    The Chairman. And thank you. And, Ranking Member, I want to 
really, sincerely thank you. You and I decided early on at the 
very beginning that it was our top priority for our rural 
areas. It is a point of survival for our rural areas not just 
in terms of agriculture but in terms of the survival of many of 
our small, rural towns. We are losing too many of them. I was 
born in a rural town over in Aynor, South Carolina. You cannot 
get much more rural than there. And this bill means a lot. And 
I appreciate--thank you for our joint partnership on this. We 
couldn't have done it without your help and my help and working 
together.
    And I want to thank my Committee because both Democrats and 
Republicans on this Committee, we said finally we are going to 
get rural broadband in place. And now we are depending upon--as 
you all are working with all the different agencies. Now is 
collaboration. It is working together. We got $65 billion here. 
We are ready to go. And we appreciate all of our witnesses 
coming in and helping us to make sure that we have the FCC, the 
USDA, the NTIA, all of these other organizations at the Federal 
level. And then they have to work in collaboration with the 
state level. So we got a monumental task here, but this hearing 
is getting us off to a good start.
    So we want to hear from everyone if there are areas where 
there is not collaboration, if there are things we can do in 
Congress to make sure we can smooth the paths and make sure 
everybody is working in good coordination, that is the way we 
are going to get done. Our rural communities are depending upon 
us, and we are going to succeed.
    So once again, thank you. God bless you. And now I think I 
have to take care of this business.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions posed by a Member. And thank you 
once again for helping us to get to the floor. They are about 
to call votes now. Thank you.
    This hearing of the Committee on Agriculture is adjourned.
    [Whereupon, at 1:07 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letter by Hon. Rick W. Allen, a Representative in Congress 
                              from Georgia
July 09, 2021

  Hon. Jessica Rosenworcel,
  Acting Chairwoman,
  Federal Communications Commission,
  Washington, D.C.

    Dear Acting Chairwoman Rosenworcel:

    We write to request quarterly updates from the Federal 
Communications Commission (FCC) on the development of a comprehensive, 
user-friendly dataset on broadband availability that considers input 
from state and local governments, Tribal nations, and consumers, 
supplementing information that the FCC gathers from carriers. On March 
16, 2021, the FCC announced \1\ the launch of this initiative, and we 
look forward to receiving an update on the status of its rollout. We 
also write to request a specific timeline of when you expect this 
project to be completed and for new and updated FCC broadband maps to 
be publicly available.
---------------------------------------------------------------------------
    \1\ https://www.fcc.gov/news-events/notes/2021/03/16/running-start-
new-broadband-maps.
---------------------------------------------------------------------------
    As you noted in your announcement, the accuracy of the broadband 
maps provided by the FCC have long been in question. One of the biggest 
concerns we hear from telephone cooperatives, electric membership 
cooperatives, and private companies is that FCC mapping, from which 
distribution of Federal grant and loan dollars is based, is inadequate 
and incorrect.
    We applaud your action to implement the Broadband Deployment 
Accuracy and Technological Availability (DATA) Act, which is an 
important step towards providing a more granular, publicly available, 
and comprehensive look at internet access in America. We urge you to 
include data from the Georgia Broadband Map program \2\ in the dataset 
used to develop these updated FCC maps. We also request an answer in 
writing as to whether you intend to use this data.
---------------------------------------------------------------------------
    \2\ https://broadband.georgia.gov/maps.
---------------------------------------------------------------------------
    As requested, please provide a written response to the following:

  1.  Please provide Congress with quarterly, written updates on the 
            status of the rollout of new FCC broadband mapping.

  2.  Please provide a timeline of when exactly we should expect new 
            and updated FCC broadband maps to be publicly available.

  3.  Please confirm in writing if you will integrate data from the 
            Georgia Broadband Map program into your new mapping 
            program.

    Thank you for your attention and for your service.
            Sincerely,
            
            

 
 
 
Hon. Rick W. Allen,
Congressman
 




 
 
 
Hon. Jon Ossoff,                     Hon. Raphael G. Warnock,
Senator                              Senator
 

                                     
                                     

 
 
 
Hon. Earl L. ``Buddy'' Carter,       Hon. Sanford D. Bishop, Jr.,
Congressman                          Congressman
 

                                     
                                     

 
 
 
Hon. A. Drew Ferguson IV,            Hon. Austin Scott,
Congressman                          Congressman
 

                                     
                                     

 
 
 
Hon. Andrew S. Clyde,                Hon. Jody B. Hice,
Congressman                          Congressman
 

                                     
                                     

 
 
 
Hon. Barry Loudermilk,
Congressman
 

CC:

FCC Commissioner Brendan Carr
FCC Commissioner Geoffrey Starks
FCC Commissioner Nathan Simington
                                 ______
                                 
 Supplementary Material Submitted by Hon. Xochitl Torres Small, Under 
    Secretary for Rural Development, U.S. Department of Agriculture
Insert 1
          Ms. Adams. . . .
          I have also heard from rural schools what happens when they 
        aren't able to provide powerful internet connections to their 
        students. They miss out on research opportunities, jobs, and a 
        whole lot more. So, Madam Under Secretary, most states have a 
        research and education network that provides high-speed 
        internet access to schools, but not all schools are hooked up 
        to those networks, and during our push to connect rural areas, 
        what do you think we should do to ensure that our rural HBCUs 
        and MSIs and Tribal colleges can access these critical 
        networks?
          Ms. Torres Small. That is a great question. And I would love 
        to follow up with you about specific outreach that we can do to 
        HBCUs if they are lacking that high-speed internet connection 
        right now because one of our focuses at Rural Development has 
        been how do we reach out to potential partners? How do we make 
        sure folks know how to navigate the ReConnect process, which 
        can be challenging, and know about the other resources that are 
        available as well? So I would love for us to be able to follow 
        up with you to talk about how we can intentionally reach out to 
        HBCUs.

    USDA also has the Distance Learning & Telemedicine Program which 
supports connection to the internet and equipment to deliver distance 
learning programs. This is an excellent program used by many schools. 
It will help with providing distance education curriculums. A different 
Rural Development Program, Community Facilities Program is another 
resource for HBCU's and MSIs. These programs in their broad scope 
enhance educational institutions' connection to the internet.
Insert 2
          Mr. LaMalfa. I am sorry. I am running out of time. Do you 
        have concerns that linking with these other sources could 
        somehow harm your own data mapping? Do you have any concerns 
        about that?
          Ms. Torres Small. That is a really good question. I would 
        love to follow up with you to see if there are--just to ask 
        generally to my team. None have risen to me because we are 
        sharing really well and because we are using multiple sources 
        of information, and last, because we have that ground-checking 
        capability so if there are conflicts about the different 
        mapping, we can go on the ground and check to see if that 
        service--but I will get back if we find any others.

    USDA follows a trust but verify approach to review applications. 
The applications are checked to verify that the proposed service areas 
meet the non service el[i]gibility requirements.
Insert 3
          Ms. Pingree. I just want to follow up a little bit because it 
        is an issue I have brought up previously. It is an issue we 
        have been hearing about over the years. We have been told that 
        there are some technical assistance people that are called 
        general field representatives that are meant to be there to 
        help and support, but we often get the feedback that there 
        aren't enough, that they are spread over a wide range. I don't 
        know how many states each GFR covers. But again, I feel like 
        every time I have this conversation--and I have great faith in 
        you accomplishing this--we hear like, oh, that is going to 
        come, we are working on it. Can you talk at all about anything 
        else you might need? Should there be more language in the farm 
        bill?
          * * * * *
          Mr. McClean. No, thank you very much. And staffing is always 
        an issue for us. We are a remarkably small agency that does a 
        remarkable amount of work. There is at any given time about 100 
        or 20 telecom staffers that are delivering this massive 
        program. We are very, very proud of that work. We have about 25 
        or so GFRs in telecom and about 23 or so in electric at any 
        given time, and that is to cover the whole country. So we are 
        not able to have a GFR in every single state, but we try to 
        maximize our outreach. We use contract support. We have had 
        webinars to try to help communities.

    No additional information to add.
Insert 4
          Mr. Rouzer. So with regard to ReConnect, the program has a 
        number of administrative burdens, which make it a little 
        difficult, time-consuming, and cumbersome for some--or actually 
        many providers from what I hear. So the program requires--and 
        this is an example. The program requires the provider to submit 
        significant information regarding non-funded service areas. It 
        also requires all environmental approvals to be obtained in 
        sequential order rather than filed and reviewed concurrently. 
        How are you all working through these burdens? And doesn't it 
        make sense to streamline this and have these objectives 
        reviewed concurrently?
          * * * * *
          Ms. Torres Small. . . .
          In terms of sequential environmental reviews, I will pass it 
        over to Acting Administrator McLean.
          Mr. McLean. Thank you very much. And another thing about 
        round 1 and round 2 was the effect of the pandemic, 
        particularly in those early months when it was a total 
        lockdown. Historic preservation offices were closed at Tribal 
        level and state level, so environmental review just elongated. 
        So we worked very hard to try to expedite environmental review 
        as much as possible. But it is it is a point well-taken and----

    No additional information to add.
Insert 5
          Ms. Kuster. Great. One quick question and maybe you will need 
        to submit in writing, but I strongly concur with your 
        sentiments about how access to reliable telehealth services 
        helps ease the provider gap in our rural communities and 
        wondering if you could share insights that you have heard about 
        how USDA broadband programs have opened up new telehealth 
        options.
          Ms. Torres Small. Someone even went so far as to say it is a 
        recruitment tool. A nurse who was trying to get other folks to 
        apply to her rural hospital said once they were able to get the 
        technology that worked with high-speed internet to be able to 
        reach more people in their homes, the workforce was just more 
        excited to be there because they could better do their job.

    The Distance Learning and Telemedicine program helps rural 
communities use the unique capabilities of telecommunications to 
connect to each other and to the world, overcoming the effects of 
remoteness and low population density. For example, this program can 
link teachers and medical service providers in one area to students and 
patients in another. The broadband programs such as ReConnect provide 
the necessary and underlying broadband infrastructure that makes 
connection to the internet possible.
    A year ago, USDA funded 86 projects through the Distance Learning 
and Telemedicine (DLT) grant program. The program helps rural education 
and health care entities remotely reach students, patients and outside 
expertise. These capabilities make world-class education and health 
care opportunities accessible in rural communities. The ability to use 
telehealth resources is critical, especially now during a global 
pandemic.
    One example is in Georgia, where the Morehouse School of Medicine 
Inc. will use a $997,194 grant to purchase interactive 
telecommunications, distance learning and telemedicine equipment. 
Equipment will be installed in service hubs in two counties in west-
central Georgia. It will be used to provide a variety of health care 
services to residents in underserved rural areas of nine counties 
across the state. These services include mental health and substance 
abuse treatment and counseling; clinical services; referrals for 
specialty care; health education and career development to schools; and 
chronic disease diagnosis, treatment and management, including COVID-
19.
Insert 6
          Mr. Allen. Well, my home State of Georgia Broadband Map 
        Program is the gold standard in the nation's broadband maps. It 
        precisely maps out the availability of broadband services to 
        every home and business in the state. Other states are 
        following Georgia's lead in implementing similar programs. So 
        we have the maps. We know the needs in Georgia. And of course, 
        Madam Under Secretary, I believe you were in Georgia recently 
        meeting with broadband providers, including my constituent, 
        Steven Milner, with whom I have worked on many broadband 
        rollout projects in my district. Could you provide us an update 
        on how those meetings went and what your takeaway was? And I am 
        out of time. You can submit that answer in writing. I would 
        appreciate that. With that, Mr. Chairman, I yield back.

    I greatly appreciated the opportunity to meet with stakeholders in 
Georgia and across the country to identify ways to continue to improve 
ReConnect and to use the funds as efficiently as possible to reach the 
hardest to serve areas. One of the key takeaways from the conversation 
in Georgia was from a broadband provider, who noted that sometimes we 
have to collaborate, or in his words ``find a dancing partner,'' to 
make an investment in hard to reach places work.
Insert 7
          Mrs. Cammack. So, to that point, and this will be my final 
        follow-up because I am running short on time, I hear 
        continuously from various stakeholders, and we have heard in 
        past hearings that the lengthy process, the approval process 
        for broadband loan applicants, it is too long. So how long is 
        it taking on average for broadband funding to get out the door 
        once the application window closes? And what can we do to 
        expedite those funds getting out the door?
          Ms. Torres Small. This is the balance that we have been 
        talking about. So we have a 5 year build-out, and that is the 
        main--and just to answer your question quickly, the main thing 
        is that ReConnect has a 5 year build-out. But we reimburse for 
        expenses so that----

    Once the application window closes, we proceed with our evaluation 
process which takes into account the project eligibility, scoring, 
technical and financial review of the applications, and verifications 
of broadband service within the proposed service Territory. This 
process generally takes 3-4 months from the time of submittal of all 
applications to an award decision. After the award is made and once all 
legal documents have been executed and the award closing has been 
completed--recipients have 5 years to complete their projects. Funding 
is advanced or reimbursed on an as needed basis through this 5 year 
period.
Insert 8
          Mr. O'Halleran. Thank you very much. I also want to emphasize 
        the importance of outreach to our local communities. You 
        mentioned that a little bit. And I know you have stressed that 
        time and time again. That is why you have been out in the field 
        so much. But the underlying aspects of this are real. And 
        people right now--we, as Congress, should be able to be out 
        there all the time, making sure we are educating the public as 
        much as possible. But what type of programs can we anticipate 
        on a large scale for the public to be able to understand not 
        only the programs but the timing mechanisms and all the other 
        planning that is going to go into that?
          Ms. Torres Small. The outreach is crucial. That is why 
        President Biden's Rural Partners Network is really exciting, 
        focusing efforts in places that need it most.
          Mr. O'Halleran. Thank you, Mr. Chairman. I yield back.
          The Chairman. Could you please respond in writing? The 
        gentleman's time is up, and we have a hard stop with votes 
        coming.

    Focused Outreach is led by the Rural Partners Network. The Rural 
Partners Network (RPN) is an all-of-government program that helps rural 
communities find resources and funding to create jobs, build 
infrastructure, and support long-term economic stability on their own 
terms. RPN leadership is Under Secretary for Rural Development Xochitl 
Torres Small, Farah Ahmad, Deputy Under Secretary for Rural Development 
and Lee Jones, Executive Director for the Rural Partners Network. RPN 
has a wide group of Federal department partners. This includes the 
White House, USDA, Departments of Treasury, Interior, Commerce, Health 
and Human Services, Housing and Urban Development, Labor, 
Transportation, Energy, Education, Veteran Affairs; and EPA, SBA 
Appalachian Regional Commission, Consumer Financial Protection Bureau, 
Social Security Administration, Delta Regional authority, Denali 
Commission, [Northern] Border Regional Commission, and Southeast 
Crescent Regional Commission.
    Through the Rural Partners Network, rural people and communities 
benefit from collaborative partnerships among an association of Federal 
agencies, staff and programs. USDA Rural Development (RD) is leading 
the Rural Partners Network in collaboration with 20 Federal agencies 
and regional commissions through the Rural Prosperity Interagency 
Policy Council, co-led by the White House Domestic Policy Council and 
USDA.
    Through the Rural Partners Network (RPN), the Biden-Harris 
Administration is taking action to transform the way the Federal 
Government partners with rural communities to spur inclusive, 
sustainable economic growth. The RPN creates an alliance of Federal 
agencies and civic partners working to expand rural prosperity through 
job creation, infrastructure development, and community improvement. 
The RPN will improve equitable access to Federal programs and funding, 
and help drive local economic development. With the RPN, Federal 
agencies are renewing their commitment to rural communities by 
expanding interagency collaboration and providing targeted staffing, 
tools, and resources.
                                 ______
                                 
  Supplementary Material Submitted by B. Lynn Follansbee, J.D., Vice 
      President Strategic Initiatives and Partnerships, USTelecom
Insert
          Mr. Thompson. Very good. Well, I will just encourage any of 
        our witnesses that would want to weigh in, in writing. 
        Obviously, the ReConnect Program is still operating as a pilot. 
        And I would love to hear from you why it is important for 
        USDA's broadband programs to be statutorily authorized, the 
        importance of that certainty, going forward.
          But in the consideration of time, I will ask a reply from 
        that, a future reply.

    Given the advent of the once in a generation infrastructure funding 
for broadband it is important that the relevant agencies that oversee 
broadband funding take a holistic approach to the deployment, support 
and coordination of their broadband programs to ensure that government 
resources are not spent twice in the same area. One important piece of 
this coordination is for USDA and other coordinating entities to have a 
firm understanding of the ReConnect program projects that exist, as 
well as those that are underway. With the program's ``pilot'' 
designation come's less certainty about the future of the program for 
participants and government institutions alike.
                                 ______
                                 
 Supplementary Material Submitted by Hon. Tarryl Clark, Commissioner, 
 First District, Stearns County, Minnesota; Chair, Telecommunications 
   and Technology Policy Steering Committee, National Association of 
                                Counties
Insert
          Mr. Thompson. Very good. Well, I will just encourage any of 
        our witnesses that would want to weigh in, in writing. 
        Obviously, the ReConnect Program is still operating as a pilot. 
        And I would love to hear from you why it is important for 
        USDA's broadband programs to be statutorily authorized, the 
        importance of that certainty, going forward.
          But in the consideration of time, I will ask a reply from 
        that, a future reply.

    The USDA has a clear and important role to play in the 
``broadbandification'' of our country. As the saying goes, the USDA 
knows rural America best. Similar to the role that the agency played in 
rural electrification throughout the early 20th century, there is a 
clear need for the USDA to continue to work as a steward for high-speed 
internet services for our rural communities that remain unconnected due 
to a lack of market incentive to build out internet infrastructure in 
remote or rural areas. The ReConnect Program has offered a key 
opportunity for local governments and other entities to directly apply 
for funds to build out high-speed networks in these target areas. 
Counties strongly support a continuation of the ReConnect Program 
through long-term authorization of the program and associated 
appropriations.
    Counties similarly believe the USDA may have other opportunities to 
expand its authority and role in rural broadband deployment through 
programs that have been historically initiated in the farm bill. For 
example, the Middle Mile Infrastructure Program authorized in the 2018 
Farm Bill has yet to be appropriated funds. The middle mile, or 
``backbone'' of internet infrastructure offering interconnection 
between communities and an ability for open access to the network, is 
an essential component of broadband buildout that should be prioritized 
further. The USDA can supportive middle mile connectivity goals.
    It is important for the USDA, in any future role in broadband, to 
coordinate closely with other Federal agencies as the collective desire 
to close the rural digital divide is pursued. This includes 
coordination with the National Telecommunications and Information 
Administration (NTIA), the U.S. Department of [the] Treasury 
(Treasury), and the Federal Communications Commission (FCC).
                                 ______
                                 
  Supplementary Material Submitted by J. Garrett Hawkins, President, 
   Missouri Farm Bureau; on Behalf of American Farm Bureau Federation
Insert
          Mr. Thompson. Very good. Well, I will just encourage any of 
        our witnesses that would want to weigh in, in writing. 
        Obviously, the ReConnect Program is still operating as a pilot. 
        And I would love to hear from you why it is important for 
        USDA's broadband programs to be statutorily authorized, the 
        importance of that certainty, going forward.
          But in the consideration of time, I will ask a reply from 
        that, a future reply.

    The ReConnect Program has become a key component in USDA's effort 
to expand broadband across rural America. Since its inception, it has 
been consistently funded by Congress, even receiving a significant 
investment through the Infrastructure Investment and Jobs Act. While 
the program is the highest funded USDA broadband program, it continues 
to operate as a pilot program while other USDA broadband programs are 
authorized and examined through the farm bill.
    Farm Bureau policy supports the ReConnect program and we believe it 
is critical to periodically examine how it is working, how it can be 
improved, and whether it is appropriately meeting its intended goal. 
Expanding access to broadband across rural America is a multiyear 
effort and requires significant investment. Statutorily authorizing 
programs provides certainty and consistency for those utilizing the 
program. It allows for users to prepare long-term and provides a better 
opportunity for stakeholder input on the efficacy of the program.
    Every 5 years, Farm Bureau works with Congress to pass a new farm 
bill to meet the challenges of an ever-changing world and ensure that 
critical programs continue to work for farmers and ranchers and for 
rural communities working to stay competitive. The 2023 Farm Bill 
provides a ripe opportunity to provide statutory authority for the 
ReConnect Program.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Xochitl Torres Small, Under Secretary for Rural 
        Development, U.S. Department of Agriculture
Question Submitted by Hon. Gregorio Kilili Camacho Sablan, a Delegate 
        in Congress from Northern Mariana Islands
    Question 1. Under Secretary Torres Small, in your written 
testimony, you mentioned that the Bipartisan Infrastructure Law 
provides $2 billion for Rural Development's ReConnect program. These 
funds are intended to expand broadband services and infrastructure in 
rural and remote areas, like my district, the Northern Mariana Islands. 
Could you confirm how much ReConnect funding your Department has 
awarded to the Northern Marianas and other U.S. Territories?
    Answer. For the first 3 ReConnect funding rounds, there were three 
awards in U.S. Territories: one in Puerto Rico for $8,783,260, one in 
Palau for $34,991,340, and one in Guam for $29,767,352.

    Question 2. Under Secretary Torres Small, under the National 
Telecommunications and Information Administration's new Broadband, 
Equity, Access, and Deployment Program, states and Territories will 
create and submit a proposal on how to utilize broadband funding. Has 
your Department at all engaged broadband agencies at the Territory 
level to inform their plans and accommodate the unique needs of their 
rural and remote areas?
    Answer. USDA co-chairs the ABI which spans across many Federal 
agencies looking at a number of areas such as pole attachments, 
environmental concerns and permitting on Federal lands to name a few. 
In addition, USDA, through MOUs, meets bi-weekly with the FCC, NTIA and 
Treasury to ensure that we are all working together to clearly identify 
the areas where Federal awards are approved for broadband service to 
ensure that we are not duplicating efforts. Through these engagements, 
we are aware that FCC and NTIA have been engaging with state and 
Territorial governments on preparing to apply for funds under the 
Broadband, Equity, Access, and Deployment Program.
Question Submitted by Hon. Jimmy Panetta, a Representative in Congress 
        from California
    Question 1. The mapping tool in the environmental section of 
ReConnect's application process allows applicants to designate proposed 
zones to be utilized in the deployment process. Applicants' responses 
determine what documentation and environmental reviews must be 
subsequently completed. According to the Rural Utility Service, a lack 
of locational specificity in submitted construction plans could cause 
the application system to request additional, unnecessary environmental 
reviews.
    For example, if a large area is marked off for fiber deployment 
instead of a single, narrow route, the applicant must submit relevant 
environmental documentation for entire zone--regardless of where fiber 
cables are eventually installed. Completing extraneous reviews will 
needlessly cost applicants time and resources--especially for those 
small communities that lack the resources needed to gather this data 
and map these spaces.
    Under Secretary Torres Small, do you think the application process 
could be more accessible or streamlined?
    Answer. Yes, although we have been making strides in improving the 
environmental review process, there is still room for improvements. 
USDA is working to fully automate the environmental review process 
which will make it easier for applicants to use. Environmental reviews 
are a necessary part of construction to ensure that all possible 
efforts are being made to address environmental concerns and that 
awardees are following applicable laws.

    Question 1a. How does USDA-RD address these complaints?
    Answer. With regards to the Environmental Review process, the 
ReConnect applications process is refined as we learn lessons and 
feedback is obtained from each round. From ReConnect Round 1 to 
ReConnect Round 4, considerable effort has been made to streamline the 
environmental procedures and add environmental review resources. This 
resulted in significant improvement in the time required for the review 
process. We have recognized the cost of necessary environmental reviews 
by an awardee by explicitly noting that environmental pre-application 
costs are includable with certain other application costs as part of a 
ReConnect award.
    This illustrates USDA's dedication toward continuous improvement in 
the application process. It is also a reflection of suggestions from 
Members of Congress and feedback from rural communities and applicants.

    Question 2. There are many broadband programs at the Federal level, 
and many agencies tasked with broadband programs. The FCC plays a large 
role in providing data to support USDA's efforts.
    Congress passed the Broadband DATA Act to improve broadband maps, 
and we need everyone on the same page to make them as useful as 
possible.
    How are agencies across the Administration working together to 
share data and ensure we have solid data to inform our decisions?
    Answer. USDA, NTIA, Treasury and FCC collaborate on broadband data. 
These agencies have entered into a Memorandum of Understanding to share 
this information. Through this collaboration, our goal is to ensure 
that Federal dollars from each agency are not duplicating each other's 
efforts.

    Question 2a. How does it collaborate with stakeholders outside the 
Federal Government?
    Answer. USDA continuously seeks input from stakeholders through 
listening sessions, outreach, stakeholder events and webinars. The team 
of RUS Telecom General Field Representatives serving all states provide 
direct local contact on the ReConnect and other USDA broadband 
programs. In addition, Rural Development has 47 state offices with 
numerous additional offices within each state. The state staff are also 
direct points of contact with stakeholders throughout rural America. We 
also collaborate with State Broadband Offices. RUS makes special effort 
to collaborate with Tribal Governments and Native American communities 
working with the USDA Tribal Relations Team Lead & Tribal Coordinator.

    Question 3. As I mentioned, differing rural definitions can create 
challenges and confusion for the rural areas that are caught in the 
middle. Sometimes they are counted as rural, and sometimes they are 
counted as non-rural.
    Leaders from these places find that there is significant 
disagreement over whether they are designated as rural. The complexity 
of the rural definitions leads to frustration and wasted time for rural 
leaders who seek to access Federal programs and resources.
    Under Secretary Torres Small, what is USDA doing to address this 
issue?
    Answer. The rural definition for ReConnect is a statutory 
requirement. To implement this requirement, USDA has developed a GIS 
layer identifying the non-rural areas that are not eligible for the 
funding. This layer can be accessed on the ReConnect webpage.

    Question 3a. What can we do in Congress, in the 2023 Farm Bill, to 
bring clarity to these rural leaders and make USDA Rural Development 
programs more accessible to communities stuck in the middle?
    Answer. As the rural definition is a statutory requirement, 
Congress can further define and clarify the exact definition of rural 
area in the FY 2023 Farm Bill.

    Question 4. My constituents have faced the issue of an inadequate 
rural definition for years.
    Under Secretary Torres Small, why do you think it has taken this 
long for the contradiction among rural definitions to come to a head?
    Answer. Although there are differing statutory requirements for 
many Rural Development programs, the rural definition for ReConnect has 
been constant since the beginning of the program. USDA ensures that the 
statutorily required rural definition is clearly defined in the 
ReConnect regulation and all of our outreach activities.

    Question 4a. Why, if we know it's leaving behind our rural 
communities like the ones I represent, has USDA not administratively 
changed the way these rural definitions impact programs as important as 
ReConnect?
    Answer. USDA respects the role of Congress in defining rural. We 
cannot change statutory requirements and look forward to any 
discussions that Congress would like to have with USDA to further 
develop this definition.

    Question b. Do you need Congressional action to make this fix?
    Answer. Congress has defined rural in each farm bill for each Rural 
Development Program. As rural area is defined in statute, Congressional 
action would be necessary to change the definition.
Question Submitted by Hon. Troy Balderson, a Representative in Congress 
        from Ohio
    Question 1. Under Secretary Torres Small, I am concerned that 
without using the FCC's maps, a significant amount of ReConnect funding 
could go to areas that are already considered served, or even to areas 
that will be funded by the FCC's RDOF program or the NTIA's BEAD 
Program. Can you tell me, specifically, how USDA is going to prevent 
duplication and overbuilding in ReConnect 4 when the program will not 
be using the same broadband maps as BEAD or RDOF?
    Answer. We share your concerns regarding Federal funds and 
understand the responsibility of being good stewards of taxpayer 
dollars. USDA collaborates closely with our Federal partners, such as 
the Federal Communications Commission (FCC), the Department of 
Commerce's National Telecommunications Information Administration 
(NTIA) and Economic Development Administration, and the Department of 
[the] Treasury (Treasury), to coordinate Federal broadband funding 
efforts. On June 25, 2021, USDA, FCC, and NTIA, signed an interagency 
agreement to share information and coordinate on the distribution of 
Federal broadband funds USDA shares data with the NTIA to inform their 
National Broadband Availability Map (NBAM), which helps inform Federal 
funding decisions. NTIA built and updates NBAM with information 
provided by USDA, FCC, states, local governments, Tribal governments, 
owners and operators of broadband networks, educational institutions, 
nonprofits, and cooperatives. USDA is a co leader with NTIA on the 
American Broadband Initiative (ABI) Federal Funding Workstream group, 
which consists of more than 25 Federal agencies sharing strategies for 
increasing efficiency in government broadband programs.
    Per our speed standards, USDA does not fund projects where there is 
sufficient access to broadband or in an area that has already received 
Federal financial assistance to fund sufficient access to broadband. As 
the FCC releases their Data Fabric, this fabric will also be used as 
part of the USDA's Service Area Validation process that is the final 
step in determining if broadband service is present in an area.

    Question 2. Under Secretary Torres Small, as you know, a lot of 
precision agriculture technologies use a broadband connection. These 
technologies will require a strong wireless connection to be able to 
operate properly in the field. How are you working with the FCC and the 
NTIA to ensure that farmers will have access to robust wireless 
broadband that will allow for them to deploy state-of-the-art precision 
agriculture technologies?
    Answer. USDA is an active participant in the FCC Precision 
Agriculture Task Force, provides expert consultation on precision 
agriculture, and follows the rapid development of precision agriculture 
and its broadband needs.
    As wireless technologies continue to evolve USDA will work with our 
Federal partners to ensure sufficient bandwidth/frequencies are 
available for precision agriculture.
Question Submitted by Hon. Michael Cloud, a Representative in Congress 
        from Texas
    Question 1. Based on the ReConnect program's Evaluation Criteria, 
can you tell me off the top of your head what the average score--as 
determined by the program's evaluation criteria--has been for 
applicants who were awarded money from the program?
    Answer. Each funding category is scored separately and does not 
compete against each other. For Round 3, the average score for 100% 
grants: 77.24; the average score for 50/50 combo: 70.5; the average 
score for 100% grant for Tribal government and SVC: 105.93.

    Question 2. How did USDA go about assigning point values in 
ReConnect's Evaluation Criteria?
    Answer. As all projects are different, we tried to balance the 
scoring criteria to be fair to all. We also took into account 
administrative directives to prioritize the hardest to serve areas in 
rural America.

    Question 3. In the Evaluation Criteria, what were the 
recommendations provided to USDA on rurality being at least 100 miles 
from a community with a population of over 50,000? My hometown of 
Victoria has roughly 67,000 people, but some would argue that our 
county is rural and contains communities that lack access to service 
with speeds of 25/3 mbps.
    Answer. Over the years, we have discovered that although rurality 
of an area is very important there is no perfect answer in addressing 
it. In order to connect the areas hardest to reach without government 
investment, USDA decided to establish two ways for a community to 
qualify as rural. First, communities can qualify if they are low 
density. Second, areas can qualify if they are somewhat more dense, but 
significantly removed from a larger population. This allowed us to 
serve distressed areas such as Alaskan/Tribal villages because they 
tend to be more dense in a small area of the village,. With the two 
options, we believe we are reaching the most rural areas.

    Question 4. In ReConnect's Evaluation Criteria, what was the reason 
for prioritizing local governments, nonprofits, and cooperatives over 
privately-owned, local utility providers? There are several of these 
providers in my district who have a long history of building reliable 
broadband networks, but they are at a disadvantage based on the 
Evaluation Criteria.
    Answer. We are endeavoring to reach the hardest to serve places, 
connecting people where profit may not necessarily be a motivating 
factor. Historically the majority of ReConnect awards have gone to 
private companies and this was a way for USDA to encourage more 
participation on the part of nonprofits, county, state, and Tribal 
governments.
Response from B. Lynn Follansbee, J.D., Vice President Strategic 
        Initiatives and Partnerships, USTelecom
Question Submitted by Hon. Eric A. ``Rick'' Crawford, a Representative 
        in Congress from Arkansas
    Question. I've heard from several companies that a lack of access 
to broadband has significant impacts on many aspects of their business. 
For example, Tyson Foods has a significant presence in my district, and 
as with many agribusinesses, has many facilities in primarily rural 
areas across the country. Those facilities are not immune from poor 
internet and often face challenges with tasks as simple as operating 
scanners, querying databases, and joining Zoom calls. This impacts 
productivity, can cause delays, and generally makes doing business in 
these rural areas more difficult. Could you speak to the challenges 
businesses face with poor access to broadband in rural areas, and the 
effect these hurdles can have on the broader community?
    Answer. In this day and age all businesses, including farmers rely 
on internet connected devices to run their businesses. Whether it is 
for traditional purposes such as inventory, shipping, accounting, 
employee communication or precision agriculture applications, it is 
nearly impossible to run a business large or small without internet 
connectivity. In an increasingly digital economy even the most rural 
business can compete nationally and globally, but only when they are 
connected with the highest broadband speeds. Instead of measuring the 
effectiveness of broadband grant programs only by the total number of 
locations served, a component of success must also be connecting the 
unconnected in order to ensure even the most remote communities are 
served.
Response from Hon. Tarryl Clark, Commissioner, First District, Stearns 
        County, Minnesota; Chair, Telecommunications and Technology 
        Policy Steering Committee, National Association of Counties
Question Submitted by Hon. Eric A. ``Rick'' Crawford, a Representative 
        in Congress from Arkansas
    Question. I've heard from several companies that a lack of access 
to broadband has significant impacts on many aspects of their business. 
For example, Tyson Foods has a significant presence in my district, and 
as with many agribusinesses, has many facilities in primarily rural 
areas across the country. Those facilities are not immune from poor 
internet and often face challenges with tasks as simple as operating 
scanners, querying databases, and joining Zoom calls. This impacts 
productivity, can cause delays, and generally makes doing business in 
these rural areas more difficult. Could you speak to the challenges 
businesses face with poor access to broadband in rural areas, and the 
effect these hurdles can have on the broader community?
    Answer. The effect of a lack of connectivity in our rural 
communities has a distinct impact on the ability for businesses to 
thrive. As our economy continues to digitize and internet access is a 
necessity for competition, rural businesses continue to fall behind as 
high-speed internet infrastructure fails to reach our most unserved 
communities. This ongoing dilemma has led to a ``brain-drain'' in many 
of our rural communities, as businesses and human capital are 
incentivized to relocate to areas with better access to high-speed 
internet infrastructure to promote business growth. There has become an 
overwhelming need for rural communities to be equally treated with a 
level of service that will allow for businesses to actively participant 
in the digital economy without disruption. This necessitates a high 
standard of network performance for both wireline and wireless 
connectivity--as oftentimes, for agribusiness in particular, 
connectivity in the home is equally as important as connectivity in the 
field.
Response from J. Garrett Hawkins, President, Missouri Farm Bureau; on 
        Behalf of American Farm Bureau Federation
Question Submitted by Hon. Eric A. ``Rick'' Crawford, a Representative 
        in Congress from Arkansas
    Question. I've heard from several companies that a lack of access 
to broadband has significant impacts on many aspects of their business. 
For example, Tyson Foods has a significant presence in my district, and 
as with many agribusinesses, has many facilities in primarily rural 
areas across the country. Those facilities are not immune from poor 
internet and often face challenges with tasks as simple as operating 
scanners, querying databases, and joining Zoom calls. This impacts 
productivity, can cause delays, and generally makes doing business in 
these rural areas more difficult. Could you speak to the challenges 
businesses face with poor access to broadband in rural areas, and the 
effect these hurdles can have on the broader community?
    Answer. Broadband is important to our farms and businesses in many 
ways. Farmers and ranchers rely on broadband access to manage and 
operate successful businesses, the same as small businesses do in urban 
and suburban America. Access to broadband is essential for farmers and 
ranchers to follow commodity markets, communicate with their customers, 
gain access to new markets around the world and, increasingly, for 
regulatory compliance. Additionally, some small business accounting 
programs require us to download the latest tax data to do payroll and 
prepare our taxes. We use broadband to place orders for inputs and 
often, if a connection is available, can check availability and pricing 
in real time. We would not be in business without access to broadband, 
and we cannot compete with businesses in more urban areas if we don't 
have connectivity.
    One family I know operates a soil testing lab with customers 
worldwide. Until recently, they struggled to find affordable, reliable 
broadband service. They were paying hundreds of dollars a month for 
sub-par broadband to barely run their business. However, with the 
advancements and investments that have been made over the past few 
years, they are now able to access reliable service at their farm and 
at their lab, making it easier to conduct their global business.
    Other families I know use online marketing tools to market their 
products throughout the country. Farms and agribusinesses utilize 
broadband every day to make their business model a success. Whether it 
is a business that provides an agricultural service to a local 
community or a company that ships products all over the country, this 
service is critical to our everyday life.


 
                     A 2022 REVIEW OF THE FARM BILL

      (STAKEHOLDER PERSPECTIVES ON TITLE II CONSERVATION PROGRAMS)

                              ----------                              


                      TUESDAY, SEPTEMBER 20, 2022

                  House of Representatives,
                 Subcommittee on Conservation and Forestry,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:04 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Abigail Davis Spanberger [Chair of the Subcommittee] 
presiding.
    Members present: Spanberger, Pingree, Kuster, O'Halleran, 
Panetta, Schrier, LaMalfa, Allen, Johnson, Moore, and Thompson 
(ex officio).
    Staff present: Paul Babbitt, Lyron Blum-Evitts, Kelcy 
Schaunaman, John Konya, John Busovsky, Ricki Schroeder, 
Patricia Straughn, and Dana Sandman.

     OPENING STATEMENT OF HON. ABIGAIL DAVIS SPANBERGER, A 
            REPRESENTATIVE IN CONGRESS FROM VIRGINIA

    The Chair. This hearing of the Subcommittee on Conservation 
and Forestry entitled, A 2022 Review of the Farm Bill: 
Stakeholder Perspectives on Title II Conservation Programs, 
will come to order. Welcome, and thank you for joining today's 
hearing. After brief opening remarks, Members will receive 
testimony from our witnesses today, and then the hearing will 
be open for questions. In consultation with the Ranking Member 
and pursuant to Rule XI(e), I want to make Members of the 
Subcommittee aware that other Members of the full Committee may 
join us today.
    Good morning and thank you so much for being at this 
hearing. I am excited for today's hearing, emphasizing 
stakeholder perspectives on farm bill conservation programs. 
American farmers and producers have a long history of being 
among the best stewards of our land, and promoting conservation 
practices as a way of protecting our environment for 
generations to come. Ensuring that they have the tools they 
need to best take care of the land for today and for future 
generations is critical to the policy decisions that we make in 
this Committee. And I hope that we can use today's conversation 
as an opportunity to listen and learn from our producers and 
growers about what they need as we head into drafting the 2023 
Farm Bill.
    As part of today's hearing, we will hear how our 
conservation programs are currently working for producers, how 
investments in conservation programs are addressing our 
resource needs, and how these programs can be utilized to help 
address the climate crisis. I am pleased that we are hearing 
from producers, conservation professionals, and advocates who 
understand today's evolving challenges from water scarcity to 
increased input costs in raising everything from cattle to 
wheat. I appreciate that today's witnesses have taken the time 
away from their important work to discuss the current state of 
farm bill conservation programs so that we can make informed 
policy decisions that will make the programs easier for 
producers to use to address their resource concerns while also 
providing environmental, social, climate, and overall economic 
benefits. I am eager to hear from our witnesses.
    [The prepared statement of Ms. Spanberger follows:]

 Prepared Statement of Hon. Abigail Davis Spanberger, a Representative 
                       in Congress from Virginia
    Good morning, and welcome to today's hearing. I am excited for 
today's hearing emphasizing stakeholder perspectives on farm bill 
conservation programs. American farmers and producers have a long 
history of being among the best stewards of our land and promoting 
conservation practices as a way of protecting our environment for 
generations to come. Ensuring that they have the tools they need to 
best take care of the land, for today and for future generations, is 
critical to the policy decisions that we make in this Committee. I hope 
that we can use today's conversation as an opportunity to listen and 
learn from our producers and growers about what they need as we head 
into the drafting of the 2023 Farm Bill.
    As a part of today's hearing, we will hear how our conservation 
programs are currently working for producers, how investments in 
conservation programs are addressing our resource needs, and how these 
programs can be utilized to help address the climate crisis.
    I am pleased that we are hearing from producers, conservation 
professionals, and advocates who understand today's evolving 
challenges--from water scarcity to increased input costs--in raising 
everything from cattle to wheat. I appreciate that today's witnesses 
have taken the time away from their important work to discuss the 
current state of farm bill conservation programs--so that we can make 
informed policy decisions that will make the programs easier for 
producers to use to address their resource concerns while also 
providing environmental, social, and climate benefits.
    I am eager to hear more from our witnesses.

    The Chair. I would now like to welcome the distinguished 
Ranking Member, the gentleman from California, Mr. LaMalfa, for 
any opening remarks he would like to give.

  OPENING STATEMENT OF HON. DOUG LaMALFA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. LaMalfa. Thank you, Madam Chair, I appreciate it.
    I am glad we got a chance one more time to discuss the 2018 
Farm Bill Conservation Title. The Title II programs are 
voluntary and incentive-based, providing direct benefits to 
producers, their operations, and the land itself. The delivery 
of the farm bill's conservation programs is a proven model that 
we know works and will continue to be important for the long-
term success of our farmers, ranchers, growers, and the rural 
areas nationwide.
    Since the 1985 Farm Bill, conservation programs have 
continued to evolve to better support American agriculture with 
some of those significant reforms in just the past two 
reauthorizations. This includes program consolidation and 
streamlining, which have improved the delivery of conservation 
programs by making them simpler and easier for the producers to 
navigate.
    The Committee has worked hard to keep these programs 
producer-first while protecting mandatory funding for essential 
programs. As this Committee begins crafting the next 
Conservation Title, I am hopeful we can build on these reforms 
and maintain the emphasis in support for working lands, 
programs, and farm infrastructure.
    Since the beginning of this Congress, there has been a lot 
of attention placed on environmental regulations, soil health, 
and ways that farm conservation programs can help sequester 
more carbon. Through a variety of recent actions, significant 
new funding for so-called climate-smart activities and several 
main farm bill conservation programs has been made available or 
will be soon.
    Specifically, this includes a $3.5 billion Climate-Smart 
Practices Pilot Program USDA is currently administering. This 
funding is being released unilaterally and comes with no 
mandate, direction, or authorization from Congress on how to 
actually distribute it. In addition, this new funding comes on 
top of the most recent reconciliation package passed last 
month, which provided roughly $20 billion for four conservation 
programs.
    So since it is not clear how this new funding will be 
obligated or specifically utilized by the Department, this 
Committee must conduct oversight as USDA administers an 
enormous amount of taxpayer dollars, especially with a new farm 
bill on the horizon. In light of this, the House Agriculture 
Committee must be mindful of this massive amount of funding 
before amending programs and making policy changes that 
reorient conservation programs more towards climate mitigation.
    Make no mistake, USDA conservation programs do provide 
numerous environmental benefits, including for soil health. 
However, no one natural resource concern should be prioritized 
over others, considering all the benefits and good work these 
programs presently support. Instead, Congress can't lose focus. 
It must maintain our support for the long-held promises of 
Title II programs to meet our broad environmental and 
conservation goals and the needs of the producers.
    I would like to thank all of our witnesses for 
participating today. We look forward to the testimonies and a 
thorough conversation on Title II. Madam Chair, I yield back. 
Thank you.
    The Chair. I now recognize Ranking Member Thompson of the 
full Committee for any opening comments he would like to make.

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

    Mr. Thompson. Madam Chair, Ranking Member, thank you both 
for holding this hearing. This is the work this Committee 
should be doing as we prepare for the next farm bill. I am 
excited to hear from stakeholders about what is working and 
what isn't and to hear more about what direction the title 
should take.
    Now, I have been a longtime supporter of our farm bill 
conservation programs. I was honored to serve as Chairman of 
this Subcommittee during the 2014 Farm Bill process. And we can 
all be proud of the bipartisan work we did in this title in 
both 2014 and 2018. But I have to tell you, folks, the way the 
Majority and this Administration have gone on an unprecedented 
spending spree with little to no input from Republicans and 
stakeholders have led to a situation where I think could 
endanger the bipartisan support of this title. And just the 
last month, Democrats have spent nearly $20 billion on 
conservation programs, and then the Biden Administration has 
doubled down and spent $3.5 billion from the CCC on projects to 
make our food system align with corporate climate agendas.
    These actions are not good for the long-term viability of 
these programs. I hope that in the next Congress we can truly 
evaluate the funding needs for these programs, paired with an 
evaluation of the ability to effectively and judiciously 
deliver these funds to farmers. After making this evaluation, 
we can talk about what the real needs are for the title.
    Now, I don't feel bound by the amount of funding or to the 
specific program allocation passed in the partisan Inflation 
Reduction Act (Pub. L. 117-169). I especially am worried about 
the earmarking of all the new money just for climate rather 
than letting the locally-led process work.
    Let me talk about some of my goals for the title. First, 
the producer should be at the center of any discussion. We want 
the Conservation Title to work for the producer and help not 
only provide environmental outcomes, but also good economic 
sense. We should also ensure that these programs are easy for 
producers to understand and access. We should look at ways to 
streamline and simplify our conservation programs. We should 
improve upon those aspects in CSP and RCPP, but the 
Conservation Reserve Program should be a part of that 
discussion.
    Second, I will not prioritize climate over every other 
natural resource concern, period.
    Third, I would like to see innovative solutions, whether 
that is emphasizing technology such as precision agriculture 
like we have done in the PRECISE Act (H.R. 2518, Producing 
Responsible Energy and Conservation Incentives and Solutions 
for the Environment Act), or Mr. Davis's NO EMITS Act (H.R. 
2508, Naturally Offsetting Emissions by Managing and 
Implementing Tillage Strategies Act of 2021) or my own SUSTAINS 
Act (H.R. 2606, Sponsoring USDA Sustainability Targets in 
Agriculture to Incentivize Natural Solutions Act of 2021). We 
as a party will be the party of solutions.
    Fourth, we should emphasize working lands. Republicans have 
emphasized working lands programs for the last 2 decades, even 
before it became popular in the conservation community. EQIP 
has been the workhorse and most popular of all programs, and we 
should be judicious in any changes we make to EQIP.
    Fifth, we should look at ways to improve our conservation 
delivery system. The Technical Service Provider Program is 
broken, and we should look at ways to improve that program to 
ensure that we have enough technical capacity on the ground or, 
quite frankly, in the fields.
    Sixth, we should ensure private working forest lands are a 
part of our Conservation Title. And I will look for innovative 
ways to include working forests into these programs.
    In closing, I look forward to hearing from our witnesses. 
We have a great panel of witnesses today, and I look forward to 
continued oversight of these programs to evaluate how these 
programs can continue to provide the conservation benefits it 
has for decades and hopefully can do that in a bipartisan way. 
I believe we can and I look forward to that instead of what has 
happened over the last 2 years.
    And with that, Madam Chair, thank you, and I yield back.
    The Chair. Thank you very much, the Ranking Member of the 
full Committee, and thank you for always coming to our 
hearings, participating, and continuing to be so focused on 
this title and the programs that are a part of it.
    I am pleased to welcome our witnesses to the Subcommittee 
on Conservation and Forestry of the full Agriculture Committee 
today. Our first witness today is Mr. Michael Crowder, who is 
the President of the National Association of Conservation 
Districts.
    Our next witness is Ms. Nicole Berg, who is the President 
of the National Association of Wheat Growers.
    Our third witness is Ms. Lori Faeth, who is the Senior 
Director of Government Relations at the Land Trust Alliance.
    And our fourth and final witness today is Mr. Shayne Wiese, 
a rancher from Iowa, and he is testifying today on behalf of 
the Iowa Cattlemen's Association and the National Cattlemen's 
Beef Association.
    Thank you all for joining us today. You will each have 5 
minutes to deliver your testimony. There is a timer that should 
be visible in front of you, and it will count down to zero, at 
which point your time has expired.
    Mr. Crowder, please begin when you are ready.

 STATEMENT OF MICHAEL CROWDER, PRESIDENT, NATIONAL ASSOCIATION 
          OF CONSERVATION DISTRICTS, WASHINGTON, D.C.

    Mr. Crowder. Thank you, Chair Spanberger, Ranking Member 
LaMalfa, Ranking Member Thompson. Thank you for the opportunity 
to join you today to discuss farm bill conservation programs. 
My name is Michael Crowder, and I serve as President of the 
National Association of Conservation Districts.
    NACD represents America's 3,000 conservation districts 
across the nation and the 17,000 men and women who serve on 
their governing boards. Conservation districts are local units 
of government that coordinate with many partners at all levels 
to help millions of cooperating landowners and operators 
implement conservation practices. Producers are on the 
frontlines of maintaining global food security and protecting 
our country's natural resources. Conservation districts play a 
critical role in achieving these goals by providing producers 
with the resources and assistance they need to implement 
effective conservation practices and enhance their operations.
    If there is just one message I want you to take away from 
my testimony today it is that voluntary, locally-led incentive-
based conservation works. USDA conservation programs have 
helped producers and private landowners across the country 
reduce soil erosion, enhance water quality, air quality, reduce 
carbon emissions, and so much more on millions of acres. These 
benefits extend well beyond the farm and have improved the 
environmental health of entire communities and regions.
    Earlier this year, NACD established a Farm Bill Task Force, 
for which I chair, to assess conservation programs and to help 
Congress with development of the upcoming farm bill. Like NACD, 
our task force represents a wide range of agricultural 
operations, social demographics, and regions from across our 
country. The task force has held nearly a dozen meetings, 
during which members have shared their perspectives on 
administration of conservation programs and suggestions to 
improve them. The task force has also developed NACD's farm 
bill principles to guide the development of our policy 
recommendations and have submitted these 11 principles as part 
of my testimony today.
    Throughout our meetings, members frequently express the 
need to support locally determined priorities. Our country's 
vast private lands differ greatly in respect to natural 
resources, production systems, and environmental conditions. 
This diversity requires strong, knowledgeable local leadership 
and the ability to adapt conservation programs to best fit 
producers' operations. We believe providing maximum flexibility 
to enable locally-led approach and limiting nationwide carve-
outs will best facilitate the success of conservation programs 
in all parts of the country.
    The task force has also raised concerns with one-size-fits-
all policies. EQIP allows producers to select between more than 
160 eligible conservation practices. This allows Midwest row 
crop farmers to implement cover crops or no-till, while 
Louisiana or California rice farmers can adopt practices to 
increase irrigation efficiencies. To be successful, producers 
need access to a comprehensive suite of conservation systems 
and practices.
    Members of the task force also expressed a desire for 
Congress to examine conservation practice payments rates. With 
rising costs of labor and inputs, we need to ensure that 
producers are compensated fairly and that the payment rates 
reflect the real-time cost of implementing practices.
    We also identified a need to simplify conservation programs 
and make their application process as simple and as clear as 
possible. NACD has heard from stakeholders across the country 
that navigating the CSP and RCPP programs can be complicated 
and cumbersome from both a producer standpoint and from 
administrative perspectives.
    I would be remiss if I didn't mention conservation 
technical assistance. CTA is the bedrock of our conservation 
delivery system. The successful administration of these 
critical USDA conservation programs relies on effective 
conservation planning, a strong conservation workforce, and 
other resources that are supported by conservation technical 
assistance. As this Committee works to develop the 2023 Farm 
Bill, NACD looks forward to working on a bipartisan basis to 
support and strengthen these programs.
    Thank you for the opportunity to testify this morning, and 
I very much look forward to your questions. Thank you.
    [The prepared statement of Mr. Crowder follows:]

Prepared Statement of Michael Crowder, President, National Association 
              of Conservation Districts, Washington, D.C.
Introduction
    Chair Spanberger, Ranking Member LaMalfa, and Members of the 
Subcommittee--thank you for the opportunity to join you today to 
discuss farm bill conservation programs.
    My name is Michael Crowder and I serve as the President of the 
National Association of Conservation Districts (NACD). I have been the 
General Manager of the Barker Ranch in Eastern Washington State for 22 
years and graduated from Purdue University with a master's degree in 
wildlife science and a bachelor's degree in natural resources and 
environmental science. Since 2002, I have been a partner of my third-
generation family farm in Indiana, as well as an owner of farmland and 
conservation easements in Illinois.
    I have spent my entire career working on conservation, agriculture, 
and wildlife science issues. On the Barker Ranch, we work closely with 
the Natural Resources Conservation Service (NRCS) on wetland 
conservation easements and wildlife habitat, as well as other practices 
such as prescriptive grazing, riparian fencing, and irrigation water 
management. I also served as an Adjunct Professor at Washington State 
University Tri-Cities for 8 years and taught classes in wildlife 
science, ecology, and wetland restoration at both graduate and 
undergraduate levels.
National Association of Conservation Districts
    NACD represents America's 3,000 conservation districts, their 
respective state and territory associations, and the 17,000 men and 
women who serve on their governing boards. Conservation districts are 
local units of government established under state law to help 
administer natural resource management programs and are the essential 
local component of our country's conservation delivery system. 
Districts work closely with Federal and state conservation agencies to 
help millions of cooperating landowners and agriculture producers 
protect land and water resources across the United States. NACD's 
mission is to promote voluntary, locally adapted conservation efforts 
and the responsible management of natural resources on all lands by 
supporting locally led conservation districts and their associations 
through grassroots advocacy, education, and partnerships. Working in 
close coordination with our national partners at NRCS, the National 
Association of State Conservation Agencies (NASCA), the National 
Conservation District Employees Association (NCDEA), and the National 
Association of Resource Conservation and Development Councils 
(NARC&DC), we strive to empower and equip local conservation districts 
to be the leader and voice for conservation within their communities.
    If there was one message I would want you to take away from my 
testimony today, it is that voluntary, locally led, incentive-based 
conservation works. USDA's working lands conservation programs have 
helped producers and private landowners across the country reduce soil 
erosion, enhance water and air quality, restore and protect land and 
wildlife habitats, reduce carbon emissions, and conserve water on 
millions of acres. These benefits extend well beyond the lands on which 
conservation practices are applied, and have improved the environmental 
health of entire communities and regions. Private landowners have taken 
advantage of the many different forms of assistance offered by these 
programs--including cost-share, land rental, incentive payments, and 
conservation technical assistance--to adopt and maintain effective 
conservation practices.
    It is also important to recognize the demand for and availability 
of farm bill conservation programs. Currently, only about \1/3\ of the 
applications producers submit for USDA working lands conservation 
programs are accepted and funded each year. That means approximately 
seven out of ten farmers who want to invest in the long-term health of 
their operations, maximize the efficiency of their inputs, increase 
profitability, and improve the environment in their communities are 
unfortunately turned away.
    The recently passed Inflation Reduction Act (IRA) provides historic 
investments in these oversubscribed, voluntary, and incentive-based 
conservation programs. Although I do wish this funding could have been 
provided on a bipartisan basis, NACD looks forward to working with both 
sides of the aisle throughout the development of the 2023 Farm Bill to 
ensure that this funding is allocated appropriately and has a positive, 
long-term effect on conservation. The IRA currently provides 
substantial funding for USDA conservation programs over the next 4 
years, which may pose administrative challenges for USDA and their 
partners. The 2023 Farm Bill provides Congress with an important 
opportunity to spread these conservation investments over a longer 
period of time, and to consider innovative ways to improve and 
modernize our conservation delivery system.
Conservation Technical Assistance
    Conservation technical assistance (CTA) is a bedrock of our 
conservation delivery system. While funding for NRCS programs is 
critical to helping producers implement effective conservation 
practices on working lands across the country, the successful 
administration of these programs relies on effective conservation 
planning, a strong conservation workforce, and other resources that are 
supported by CTA. In order to transform the historic IRA conservation 
investments into meaningful, on-the-ground conservation, CTA must now 
play an even larger role. It was critical that the IRA included $1 
billion for CTA to provide these important resources. Trained technical 
staff will also be critical to providing sound planning, guided 
decision-making, and support for the design and implementation of 
conservation systems and practices at the field level. These technical 
staff play an enormous role in helping landowners implement targeted 
practices to achieve meaningful, on-the-ground results.
    While NRCS requires strong staffing capacity to administer 
conservation programs, we also believe that Federal technical 
assistance funding can leverage state and conservation district 
resources to extend the reach of trained personnel with local expertise 
in agricultural operations and natural resource conservation. The 
17,000 local conservation district supervisors across the country play 
a critical role in connecting landowners to Federal conservation 
programs and providing technical assistance to guide program 
administration, facilitate conservation planning, and help producers 
implement the most effective practices. There are also additional 
conservation partners that can be leveraged to ensure that producers 
are provided with the technical support they need in all areas of the 
country.
Farm Bill Task Force
    Earlier this year, NACD began its 2023 Farm Bill policy development 
process by establishing a Farm Bill Task Force. I am proud to serve as 
the Chair of this task force. Like NACD, the Farm Bill Task Force 
consists of members representing a wide range of agricultural 
operations, social demographics, and regions from across our country. 
The diversity of the Task Force will help to ensure a comprehensive 
review of Federal conservation programs and facilitate thoughtful 
consideration of policy changes to strengthen their administration. 
Overall, our mission is to help craft a 2023 Farm Bill that supports 
locally led conservation and supports producers in voluntarily 
implementing the best conservation practices on their lands.
    In April, NACD's Farm Bill Task Force published a set of broad 
policy principles to guide the development of our farm bill policy 
recommendations. These principles are attached as part of my written 
testimony. Several of these principles are fundamental to NACD's 
mission. For example, our first principle; ``The Locally Led, Voluntary 
Incentive-Based Conservation Model Works,'' reflects one of NACD's core 
beliefs. The task force also felt very strongly about including a 
principle focused on supporting diversity, equity, and inclusion in the 
upcoming farm bill. This principle reinforces our belief that farm bill 
conservation programs should be available to and accessible by people 
from all backgrounds and areas of our country. As producers continue to 
experience significant disruptions caused by market conditions, 
international conflict, and climate change, the Farm Bill Task Force 
also felt it was important to include a principle stating that 
agricultural operations need to be economically viable for our 
conservation model to be successful. With rising uncertainty, we also 
need to ensure that producers are provided a proper safety net.
    NACD maintains a longstanding commitment to mitigate the serious 
threats posed by climate change and recognizes that conservation 
districts will continue to play a critical role in advancing solutions. 
Last year, NACD established a Climate Action Task Force to identify and 
support policies to expand the adoption of conservation practices that 
bolster resilience, reduce carbon emissions, and improve the health of 
ecosystems across the country. The task force found that providing 
additional support for conservation planning and technical capacity is 
critical to helping districts and landowners implement these 
conservation practices. To further support this goal, our Farm Bill 
Task Force adopted a principle supporting a 2023 Farm Bill that ensures 
farmers, ranchers, and forest owners are provided with the resources 
they need to implement and maintain practices that mitigate the impacts 
of climate change.
    These principles also support an increase in conservation funding, 
a commitment to the working lands conservation programs, working to 
address climate change, effective education of and outreach to 
producers, and addressing administrative barriers in farm bill 
conservation program application processes, among other priorities. The 
Farm Bill Task Force has held nearly a dozen meetings, during which 
members have shared their perspectives on the administration and 
effectiveness of USDA conservation programs. Although the task force 
has not yet released final 2023 Farm Bill policy recommendations, I am 
happy to share some of the sentiments and suggestions that have been 
raised during our meetings, and outline some of NACD's existing policy 
positions. However, I will note that the perspectives I provide today 
do not represent the final, official positions of NACD's Farm Bill Task 
Force. NACD looks forward to providing comprehensive 2023 Farm Bill 
policy suggestions in the coming months.
2023 Farm Bill Policy
    Throughout our Farm Bill Task Force discussions, members often 
expressed that specific carve-outs and limitations of practices within 
USDA conservation programs pose challenges for locally led conservation 
efforts. From Maine to Hawaii, and Alaska to Puerto Rico, America's 
vast private lands differ greatly in respects to their natural 
resources, production systems, and environmental conditions. This 
diversity requires strong local leadership and the ability to adapt 
conservation programs to best fit producers' farms, ranches, or 
forestlands. Providing maximum flexibility to enable a locally led 
approach and limiting nationwide carve-outs will best facilitate the 
success of Federal conservation programs in all parts of the country.
    The task force also raised concerns with ``one-size-fits-all'' 
policies within Federal conservation programs. The Environmental 
Quality Incentives Program (EQIP) allows producers to select between 
more than 150 eligible conservation practices. This allows Midwest row 
crop farmers to implement cover crops or no-till, while Louisiana rice 
farmers can adopt practices to increase irrigation efficiency. We need 
producers to have access to a comprehensive suite of conservation 
systems and practices that can facilitate incremental improvements 
across distinct operations and environments.
    Members of the task force also expressed a desire for Congress to 
examine conservation practice payment rates, and the methodology NRCS 
uses to determine rates across all programs. With rising prices, we 
need to ensure that producers are compensated fairly and that payment 
rates reflect the real-time costs of implementing practices over the 
course of multi-year contracts. This is particularly important to 
consider in the context of supporting beginning and socially 
disadvantaged farmers.
    Below, I have provided additional perspectives that reflect NACD's 
existing policy and some of the Farm Bill Task Force's preliminary 
suggestions regarding specific USDA conservation programs. Again, it is 
important to note that these views do not represent NACD's final 2023 
Farm Bill policy recommendations.
Environmental Quality Incentives Program
    The Environmental Quality Incentives Program (EQIP) is currently 
the most popular and locally adaptable working lands program in NRCS' 
conservation toolbox. Considering its importance, NACD encourages this 
Committee to carefully consider any proposed changes to the program. We 
firmly believe that EQIP's success can be largely attributed to the 
program allowing local work groups and state technical committees to 
prioritize local natural resource concerns and identify the most 
effective practices to address them. Carve-outs within EQIP--even those 
targeting important conservation concerns and other issues--often make 
the program less flexible for producers in different parts of the 
country. While these carve-outs do help to address important resource 
concerns and can produce positive results, they often produce the 
unintended consequence of eroding the local decision-making process led 
by conservation districts. NACD strongly believes that local input and 
expertise must inform the prioritization of resource concerns within 
EQIP, as opposed to mandating nationwide priorities and requirements.
    In the 2018 Farm Bill, Congress authorized Conservation Incentive 
Contracts (CIC) within EQIP, which have great potential to expand the 
adoption of effective climate-smart and drought resilience practices. 
While this new subprogram has only been fully available to producers 
this year, NACD believes that Congress should provide more direction 
for the program in the upcoming farm bill. Overall, we believe that the 
simplicity and on-farm scalability of the CIC program, paired with its 
longer-term contracts, provide great opportunities to help producers 
implement meaningful conservation practices.
Conservation Reserve Program
    The Conservation Reserve Program (CRP) has been an essential tool 
in USDA's conservation tool belt for decades. Now, 37 years after the 
program was established, we believe Congress should evaluate its role 
to ensure that the program properly fits into a modern-day conservation 
title. Following recent economic challenges and disruptions to 
international food production, Congressional leaders have raised valid 
points regarding the inclusion of prime farmland in the program. While 
NACD does not support removing existing CRP acres, we must ensure that 
the focus of the program continues to be enrolling only the most 
environmentally sensitive land and buffers that facilitate continued 
agriculture production on adjacent farmland.
    NACD also believes that the program should expand producers' 
ability to utilize haying and grazing, and that emergency haying and 
grazing should be evaluated to ensure that it meets producers' critical 
forage needs in a timely manner, and without harming resources. We also 
need to ensure that the program is as locally led as possible, and that 
the enrollment supports producers' overarching conservation systems. 
CRP has been administered at the national level since the inception of 
the program and has provided a growing number of nationally defined 
administrative and statutory options for producers. Looking forward to 
the 2023 Farm Bill, we need to ensure that CRP provides adequate 
support for each state's unique needs.
Conservation Stewardship Program
    NACD is a strong advocate for the Conservation Stewardship Program 
(CSP) and has longstanding policy supporting the program. CSP plays a 
critical role in maintaining and improving existing conservation 
systems by encouraging producers who have already adopted conservation 
on their lands to implement additional conservation practices that 
complement existing efforts and improve the efficiency of their 
operations as a whole.
    However, our members have heard from administrators, partners, and 
producers across the country that the program can be extremely 
complicated and cumbersome from both a producer standpoint and from an 
administrative perspective. While the program has many positive 
qualities--including rewarding early adopters with payments and 
eligibility--producers have also expressed that the effectiveness of 
individual state and local offices plays an outsized role in 
facilitating a producer's participation in the program. Considering, it 
may be worthwhile for Congress to explore simplifying CSP's application 
process.
Regional Conservation Partnership Program
    NACD and our Farm Bill Task Force members recognize the significant 
conservation benefits provided by the Regional Conservation Partnership 
Program (RCPP). When the RCPP was first proposed, stakeholders 
expressed concerns that projects could lack local involvement, and that 
some projects may not address the most appropriate local resource 
concerns. Today, a significant number of conservation districts are 
involved in RCPP projects as both sponsors and core partners with other 
organizations. The program's ability to leverage non-Federal resources, 
including staff and funding, has also increased conservation 
opportunities for our agricultural producers across the country. 
However, many partners have expressed that the program needs to be 
simplified and streamlined to reduce complexity and improve 
administration. One common critique of the program is that it takes too 
much time for accepted RCPP projects to break ground. NACD looks 
forward to working with partners and Congress to explore ways to 
expedite project implementation.
P.L. 83-566
    NRCS' Watershed and Flood Prevention Program, commonly referred to 
as P.L. 83-566, authorizes local partners to plan and install watershed 
protection and improvement projects in watersheds across the country. 
The program has become an increasingly important tool in helping rural 
communities adapt to weather volatility, create climate resilience, and 
reduce risks posed by catastrophic weather events. The additional $50 
million in mandatory annual funding provided by the 2018 Farm Bill 
allowed NRCS and project sponsors to better plan and administer 
projects in many parts of the country. Conservation districts are an 
important partner in the administration of this program and have 
sponsored most of the P.L. 83-566 projects throughout the country. NACD 
supports the program and looks forward to working with partners to 
ensure that the P.L. 83-566 receives the funding and support it 
requires. As thousands of dams across the country reach or exceed their 
designed lifespans, it is also critical that we support NRCS' Watershed 
Rehabilitation Program in the 2023 Farm Bill.
Conclusion
    The historic conservation funding included in the IRA has provided 
us with an unprecedented opportunity to strengthen agricultural 
operations, bolster resilience, reduce harmful emissions, and improve 
the quality of our water, land, and air. It is critical that we work on 
a bipartisan basis to develop a 2023 Farm Bill that supports strong and 
stable conservation policy, helps our producers, and protects the 
environment for all Americans. Farm bill conservation programs are 
critical to our nation's food security, biodiversity, and the 
sustainability of our farms, ranches, and forests. This farm bill 
provides a once in a generation opportunity to strengthen conservation 
efforts on our working agricultural landscapes.
    The historic funding in IRA also raises new administrative 
challenges. Overcoming these challenges will require close coordination 
between USDA, Congress, states, producers, and partners, including 
conservation districts. These new investments will also necessitate 
strengthening our Federal and local conservation workforces. As this 
Committee and Congress work to develop the 2023 Farm Bill, I would like 
to reemphasize that voluntary, locally led conservation works, and is 
the most viable way to support America's producers and protect our 
environment. NACD looks forward to working with Members of this 
Committee and all stakeholders to find ways to enhance the delivery of 
USDA conservation programs through the conservation title of the 2023 
Farm Bill.
    Again, thank you for the opportunity to testify today. I look 
forward to your questions.
                               Attachment
NACD Farm Bill Principles


Principle 1: The Locally-Led, Voluntary Incentive-Based Conservation 
        Model Works
    NACD strongly believes in the locally-led, voluntary, incentive-
based model for addressing natural resource concerns; not a one-size-
fits-all regulatory scheme. Farm bill conservation programs should be 
locally-led and resource-driven with sufficient flexibility to direct 
funding to local priorities and concerns. Program priorities, rules, 
and policies should be tailored and adapt to the natural resource needs 
of states and local areas. Local conservation district boards, local 
working groups, and state technical committees are essential to 
identifying local needs, maximizing conservation benefits, and setting 
priorities for program delivery.
Principle 2: Increase Conservation Title Funding in the Farm Bill
    Farm bill conservation programs are key to addressing natural 
resource concerns like water quality and quantity, soil health, clean 
air, climate change, habitat protection, and more. Moreover, these 
locally-led, voluntary, incentive based programs increase the 
productivity of producers' operations and strengthen food security. 
Unfortunately, due to a lack of resources, these programs are unable to 
accept the vast majority of producers who apply to participate. 
Increased mandatory funding for the conservation title is critical to 
sustaining our nation's working lands and building a resilient food 
supply. NACD believes these proven, science-based programs need robust 
new funding.
Principle 3: Diversity, Equity, and Inclusion
    Technical and financial assistance should be available to all 
agriculture producers, and barriers that prevent historically 
underserved producers from accessing these tools should be addressed. 
The farm bill should help historically underserved farmers, ranchers, 
and forest stewards access these resources by supporting effective 
program outreach, advanced payments, increased payment rates, 
regulatory and programmatic flexibilities, and other tools that 
incentivize and encourage participation. Outreach, program rules, and 
program policies for underserved communities should be prioritized and 
tailored to these communities.
Principle 4: Commitment to Working Lands
    Landscapes across the nation vary in their resource concerns, and 
farm bill conservation programs must continue to meet the specialized 
needs of the agricultural producers who work these lands. Given that 
food security is directly tied to national security, programs must 
provide technical and financial assistance to implement or maintain 
conservation practices on working lands that produce much needed food, 
fiber, forest products, and fuel while at the same time protecting our 
natural resources.
Principle 5: Technical Assistance and Conservation Planning are the 
        Bedrock of the Conservation Model
    Technical assistance and conservation planning are critical tools 
and the first steps in evaluating producers' resource needs. NRCS, with 
assistance from partners such as conservation districts, helps 
agricultural producers plan and apply conservation practices on the 
land. They develop conservation plans; plan, design, lay out, and 
install conservation practices; and inspect completed practices for 
certification. The farm bill must provide sufficient funding for 
technical assistance to deliver a full complement of science-based 
technical services to farm bill conservation program applicants and 
participants.
Principle 6: Agricultural Operations Need to be Economically Viable
    In order for the locally-led, voluntary, incentive-based model to 
be successful, NACD believes agricultural operations need a strong 
safety net, robust marketing opportunities, and supportive farm policy. 
Without viable agricultural operations, districts will not be able to 
help install conservation practices on the ground. The farm bill must 
adapt to the agriculture production environment and work for each facet 
of the nation's diverse agriculture industry.
Principle 7: Climate Change
    Climate change is threatening communities around the world and 
governments are prioritizing the development and implementation of 
policies to quickly address this serious issue. U.S. farmers, ranchers, 
and private forest landowners are on the frontlines of climate change. 
More frequent storms, longer droughts, larger wildfires, and more 
damaging floods pose serious threats to communities across the country, 
hurt producer's bottom lines, and threaten our food supply.
    These producers, with the help of partners such as conservation 
districts, are uniquely positioned to be part of the solution and in 
many cases have already adopted conservation practices that promote 
resource sustainability, resiliency, carbon sequestration, and protect 
ecosystems. However, the vast majority of producers who step forward to 
implement these practices by applying to participate in voluntary USDA 
conservation programs are turned away because of insufficient 
resources. Congress should ensure that farmers, ranchers, and forest 
owners are provided with the resources they need to maintain and 
implement practices that mitigate the impacts of climate change.
Principle 8: Farm Bill Education and Outreach is Necessary
    NACD believes conservation education is a necessary tool to drive 
more conservation adoption. If producers are not aware of the tools 
available to them, then the adoption of conservation practices will 
suffer. This is especially the case with beginning, socially 
disadvantaged, and limited resource farmers. NACD supports language 
within each Title II program directing technical assistance to advance 
local conservation adoption and outreach.
Principle 9: Streamline and Simplify Conservation Programs/Application 
        Process to Reduce Administrative Burdens
    Conservation programs and the application process should both be 
simple and easy to understand. Administrative burdens that 
disincentivize program participation and impair the timely adoption of 
conservation practices within the appropriate agriculture production 
cycle should be eliminated. Requirements that complicate the 
conservation delivery system, create lengthy approval processes, or 
take time away from NRCS staff, prevent producers with the greatest 
resource needs from applying for conservation programs.
Principle 10: Forestry
    NACD supports a forestry title that addresses the unique 
complexities of forestry on nonindustrial, private forest land, and the 
effective management of Federal and state forest lands. NACD encourages 
an expansion of technical assistance and outreach to nonindustrial 
private forest owners, especially landowners not currently engaged in 
conservation or implementing a management plan on their lands. Land 
mangers require support to ensure the full suite of management tools 
are available to improve the health and sustainability of our nation's 
forests and mitigate the threats posed by wildfires across the country. 
NACD also supports addressing issues identified by state forest 
resource assessments and state wildlife action plans, and supporting 
agroforestry through the farm bill.
Principle 11: New Approaches and New Technologies
    Working lands conservation is not a static concept, but is 
constantly changing and adapting as new technologies are introduced and 
partnerships are formed. As such, the farm bill should reflect new 
developments in conservation, including those made in urban 
agriculture, drone technology, water conservation, and precision 
application.

    The Chair. Thank you very much, Mr. Crowder.
    Ms. Berg, please begin when you are ready. You have 5 
minutes.

 STATEMENT OF NICOLE BERG, PRESIDENT, NATIONAL ASSOCIATION OF 
                  WHEAT GROWERS, PATTERSON, WA

    Ms. Berg. Chair Spanberger and Ranking Member LaMalfa, 
thank you for the opportunity to testify today before the 
Subcommittee. I am Nicole Berg, a fourth-generation farmer from 
Paterson, Washington. I work in partnership with my father and 
my brothers, and we grow dryland irrigated winter wheat, blue 
grass seed, field corn, sweet corn, sweet peas, green beans, 
and alfalfa. I currently serve as President of the National 
Association of Wheat Growers, a federation of 20 state 
associations and other industry partners.
    In my area in Washington, conservation is essential to our 
farming operation, living and farming in the driest area in the 
world that grows cereal grains. With only 6" of rainfall a 
year, conservation farming helps us maintain soil moisture and 
efficient use of natural resources. EQIP has helped us put in a 
fertilizer tank containment system and install irrigation water 
management equipment on our irrigated farmland. We utilize CRP 
on our dryland acres to create contours in the field, 
protecting the soils from wind erosion. In our dry, windy 
climate, we take multiple actions to protect the soil from 
erosion, including the use of no-till.
    The 2018 Farm Bill maintained a strong commitment to 
voluntary, incentive-based conservation programs. The NRCS 
programs continue to be oversubscribed with less than \1/2\ of 
all applicants receiving NRCS funding nationwide. Reviewing 
wheat growers' use of NRCS programs between 2018 and 2021, 
wheat farmers entered over 7,500 contracts. Over the same 
period, there were 5,000 valid applications from wheat growers 
that went unfunded.
    There is continued demand and need for voluntary 
conservation programs in the farm bill, and we must make sure 
that the programs continue to be flexible and allow farmers to 
maintain economic viability in their farming operations.
    The benefits of the farm bill conservation programs are 
significant in terms of the environmental benefits and the 
assistance to farmers. The technical assistance, planning and 
engineering, and financial assistance in the form of cost-share 
or incentives provide farmers with the knowledge and economic 
incentive to make a change in their operation or maintain a 
conservation practice. Some of the challenges for wheat growers 
in utilizing conservation programs are typically diversifying 
the crops grown, low rainfall, complexity of programs, and 
transparency of the program requirements.
    Included in my written testimony is a list of concepts for 
the next farm bill, and I will highlight just a few. First, we 
would like to improve the flexibility of conservation programs 
and expand conservation opportunities to early adopters and 
conservation management systems. Wheat is grown in almost every 
state in the U.S., but the crop rotations, climate, varieties 
of wheat, variety across each state, they vary differently. As 
you develop farm bill policy, please remember that one size 
does not fit all when it comes to conservation.
    Second, clearly articulate program changes so farmers 
understand farm bill modifications and other administration 
changes. As policies are developed through the farm bill 
reauthorization process or even administration changes programs 
are implemented, these changes should be transparent and 
clearly articulated to farmers.
    Third, recognize the diversity of cropping systems, 
benefits of crop rotations, and timing of planting. Over the 
past 2 years, USDA offered a Pandemic Cover Crop Program that 
provides a discount to crop insurance for planting cover crops. 
When this program was introduced, winter wheat producers were 
not eligible for the program because the cover crop had to be 
planted over the winter, the same time our wheat is in the 
ground.
    Fourth, review cost-share rates and payment limits due to 
the rising cost of inputs. The cost of farming has increased, 
and it will continue to do so. While commodity prices have 
decreased recently, input costs remain high, with farmers 
facing higher costs in all areas of their operation, and the 
decision to adopt conservation practices can depend on the 
financial assistance the farm bill programs provide.
    Fifth, expand training and mentoring and encourage 
retention of USDA field employees. The last few years have been 
difficult with the changes to the programs in the 2018 Farm 
Bill, some of which were substantial, maintaining through the 
COVID-19 and training new staff and the challenge of leadership 
in FSA offices.
    In conclusion, Wheat Growers support continued access to 
voluntary incentive-based conservation programs in the farm 
bill. Wheat Growers, the environment, and society have 
benefited from these programs through improved water quality 
and quantity, air quality, soil health, and habitat. These 
would not be possible without the financial and technical 
assistance that the farm bill conservation programs provide.
    Thank you again for the opportunity to testify.
    [The prepared statement of Ms. Berg follows:]

 Prepared Statement of Nicole Berg, President, National Association of 
                      Wheat Growers, Patterson, WA
    Chair Spanberger and Ranking Member LaMalfa, thank you for the 
opportunity to testify today before the Conservation and Forestry 
Subcommittee of the House Agriculture Committee on behalf of the 
National Association of Wheat Growers (NAWG). I am Nicole Berg, 
President of the National Association of Wheat Growers and a fourth-
generation farmer, working in partnership with my father and brothers 
on our family farm in Paterson, Washington. This year my nephews 
returned to the farm and are joining us in working on the family farm. 
On our operation, we grow dryland and irrigated winter wheat, blue 
grass seed, field corn, sweet corn, sweet peas, green beans, and 
alfalfa. I just recently ended my time on the Benton County 
conservation district, after over 10 years of serving on the board. In 
2020, I was appointed to the Federal Crop Insurance Corporation Board 
of Directors, and I also serve on the Community First Bank Board of 
Directors.
    NAWG is a federation of 20 state wheat grower associations and 
industry partners that work to represent the needs and interests of 
wheat producers before Congress and Federal agencies. Based in 
Washington, D.C., NAWG is grower governed and works in areas as diverse 
as Federal farm policy, environmental regulation, the future 
commercialization of emerging technologies in wheat, and uniting the 
wheat industry around common goals. Our members feel it is important to 
provide testimony before the Conservation [and Forestry] Subcommittee 
of the House Agriculture Committee today as we reflect on the programs 
authorized under Title II of the Farm Bill. The conservation title of 
the farm bill plays an important role in establishing and funding 
voluntary, incentive-based conservation programs.
    Conservation is essential to our farming operation. Living and 
farming in the driest area in the world that grows cereal grains--with 
only 6" of rainfall a year--conservation farming helps us maintain soil 
moisture and efficiently use our natural resources. Our farm used 
several different conservation programs over the years and while we see 
the benefits of participating in the programs, there are also 
challenges. The Environmental Quality Incentives Program (EQIP) helped 
us put in a containment fertilizer tank on the farm. This helps us 
protect the environment in case of any accidental spill which would be 
contained based on the design of the tank. The extra storage has also 
allowed us to manage through the high fertilizer prices and supply 
chain issues over the past 2 years. We also utilized the program to 
install irrigation water management equipment on our irrigated 
farmland. This new equipment allows us to have a more targeted water 
application and only use water where it is needed by managing water 
application in real time, mapping the soils and assessing the water 
needed. Prior to installation of this technology, we were only able to 
measure water capacity once a week. Real time water application 
assessment is, much more efficient, resulting in water savings. In my 
area of Washington State, we have hurricane to tropical storm force 
winds that blow across the farm, and we take multiple actions to 
protect our soil from erosion. We utilize the Conservation Reserve 
Program (CRP) on our dryland acres to create strip or contour farming 
with strips of CRP in the field, protecting the soils from wind 
erosion. We also practice no till farming on our dryland and irrigated 
operations.
Wheat Growers' Use of Conservation Programs.
    The 2018 Farm Bill maintained the strong commitment to voluntary, 
incentive-based conservation programs. The [Environmental] Quality 
Incentives Program (EQIP), the Conservation Stewardship Program (CSP), 
the Conservation Reserve Program (CRP), and the Regional Conservation 
Partnership Program (RCPP) have been utilized by wheat growers across 
the county. Reviewing wheat growers' use of the Natural Resources 
Conservation Service (NRCS) delivered programs over the last few years, 
we found that wheat growers predominantly use the EQIP and the CSP, 
with a few growers working through RCPP projects. Between 2018 and 
2021, wheat farmers entered over 7500 contracts with NRCS through these 
conservation programs. Looking at the use of these programs across all 
states, several of the top conservation practices wheat growers are 
adopting through the programs include cover crops, pest management, 
nutrient management, tillage management, terraces and grassed 
waterways. The flexibility and local decision making included in the 
farm bill conservation programs is vital to their success. The specific 
actions that individual wheat farmers take under those practices can 
very across their specific operations. The way I manage my farm in 
Washington state, the crops in the rotation, the timing of planting, 
the weather conditions, the crop protection tools, and nutrient 
management strategies will vary from wheat farmers along the east coast 
in Virginia, or Texas or South Dakota.
    Wheat farmers transitioned from traditional tillage to no-till by 
using CSP which provides support for growers to be able to purchase 
specialized drills for no till wheat planting. Growers can also 
transition to different spray nozzles to reduce spray drift during 
pesticide applications. Conservation programs aid in the transition to 
new technologies, GPS aided precision technology that allows us to be 
more efficient in our farming operations.
    The EQIP continues to be popular with wheat growers by allowing 
growers to undertake specific conservation practices, develop 
management plans or utilize the new longer term incentive payments. 
EQIP has been the most flexible program, allowing growers to utilize 
one or multiple practices that make sense for their operation.
    The CRP is an important option for growers in Washington State, but 
within our Association, can be controversial depending on the area of 
the country. Farmers do not want to compete with the Federal Government 
when renting land, and we must make sure that beginning farmers and 
ranchers have access to affordable land and CRP is often cited as 
competition for these new farmers. Focusing on enrolling 
environmentally sensitive, highly erodible land in CRP should allow for 
the protection of fragile lands at risk of erosion and allowing other 
lands to be farmed. The changes made in the 2018 Farm Bill lowered 
rental rates, capped cost-share for seed and eliminated financial 
assistance for mid contract management. Each of these changes added 
costs to farmers to participate and with all these costs going up, the 
program is not getting the same interest from farmers it once did.
    The benefits of the farm bill conservation programs are 
significant. The technical assistance, planning and engineering and 
financial assistance in the form of cost share or incentives, provide 
farmers with the knowledge and economic incentive to be able to make a 
change in their operation or maintain a conservation practice. Some 
conservation practices have an unknown impact on the farming operation 
or are too costly to undertake without financial assistance. The 
programs also provide substantial environmental benefits, helping to 
mitigate the impacts of climate change, providing healthier soil, clean 
air, clean water and improved habitat.
    Some of the challenges for wheat growers in utilizing conservation 
programs is typically the diversity of the crops grown, low rainfall, 
complexity of programs and transparency of the program requirements (or 
changes from year to year). Growers are diversifying their farming 
operations and that diversity of crops and management systems can make 
implementing a conservation practice on an entire operation difficult. 
The low rainfall areas and dryland operations have limited options when 
participating in conservation programs. The diversity of small grains 
planted in northern regions and conservation crop rotations should be 
reviewed to make sure growers have continued access to conservation 
programs.
    Many wheat farmers undertook the switch to no-till many years ago, 
investing in new equipment and managing their operations to protect the 
soil from wind and water erosion. Today, some of those same growers are 
seeing herbicide resistant weeds on their operation that could require 
different management strategies that may include tillage to eradicate 
the weeds. Growers must have continued access to a variety of 
herbicides and other crop protection tools to help maintain long term 
conservation practices.
    Conservation programs also getting increasingly complex. The 2018 
Farm Bill included significant changes to CRP and the changes to the 
program have not been transparent during the implementation. Additional 
outreach and education on the program changes and opportunities for 
growers is needed to aid in program enrollment. In addition to outreach 
for growers, we encourage USDA to ensure that Farm Service Agency (FSA) 
and NRCS have full understanding of the programs and any changes that 
are made to the program prior to sign-up. Some program changes are 
happening on an annual basis, making it difficult for both staff and 
growers to keep up with the changes.
    The farm bill conservation programs continue to be popular, with 
less than \1/2\ of all applications receiving NRCS funding. Wheat 
growers are no exception, with more wheat growers seeking assistance 
through the farm bill conservation programs than can be funded. Between 
Fiscal Years 2018 and 2021, there were 3,000 valid, applications for 
EQIP by wheat growers that went unfunded. Over that same period there 
were over 2,000 valid, applications for CSP by wheat growers that went 
unfunded. Additional applications through RCPP also went unfunded over 
those years. Clearly there is continued demand and need for voluntary 
conservation programs of the farm bill, but we must make sure that 
programs provide flexibility and allow growers to maintain economically 
viable farming operations.
Benefits of Growing Wheat
    Wheat production across the United States is varied, from the 
climate, soil, rotations and most importantly the type of wheat and 
end-use markets for the wheat produced. As a crop that is primarily 
destined for the food supply the quantity and quality of the wheat we 
produce is equally important. The six classes of wheat have a variety 
of end-uses--whether it is pizza, pasta, bread, cakes, or crackers--
each product has characteristics that rely on a different type of wheat 
and a different protein content in the wheat and flour. Some wheat--
winter wheat--is planted in the fall and harvested in the following 
summer and some--spring wheat--is planted in the spring and harvested a 
few months later in the summer.
    There are several benefits of growing wheat. Wheat improves soil 
quality, protects the soil from erosion and reduces weed pressure when 
added to a crop rotation. Winter wheat provides living plant cover over 
the winter months. The wheat straw residue left on the field provides a 
durable residue cover to protect the soil from wind and water erosion. 
In certain regions, winter wheat can be added to a corn-soy rotation 
adding a third crop over the 2 years and providing a living cover over 
winter and additional economic revenue from adding a wheat crop. Due to 
the war in Ukraine, USDA has been working in areas of the country to 
expand double cropping by increasing the flexibilities and 
applicability of crop insurance for double cropping counties.
    Like many areas of U.S. agriculture, wheat growers are producing 
more with less. Over the last 100 years, wheat yields have increased 
3\1/2\ times with about \2/3\ the acres in production. There is not a 
commercially available genetically modified wheat and we have not had 
the level of research and advancement in wheat research that other 
crops have experienced over the last 25 years. Wheat growers depend on 
different management strategies including diverse crop rotation, 
conservation practices, research and breeding including new hybrid 
wheat varieties, and crop protection tools. Technical assistance from 
Land-Grant University wheat research programs, extension programs, USDA 
and conservation district employees, and private agronomists are needed 
to make these systems work and allow growers to make ongoing 
improvements to their cropping systems.
    Wheat growers value the long-term productivity of the soil and 
natural resources that sustain our farming operations. Climate-smart 
and regenerative agriculture cropping systems for wheat production must 
recognize the environmental and economic realities of individual farms, 
be regionally specific, provide for enhanced productivity or resource 
use efficiency and support the principles of soil heath including 
minimizing soil disturbance, providing soil cover through crop residue, 
increasing diversity, maximizing the time with living roots and when 
applicable, incorporating livestock--all as appropriate for individual 
farms. We acknowledge that not all practices will work for all wheat 
growers and any policies must be flexible and recognize the uniqueness 
of each farming operation and the climate conditions and production 
systems of that operation.
    As we look to develop new conservation, climate-smart, or 
regenerative agriculture policy and programs, these approaches must 
work in partnership with individual farms and help growers balance the 
economics with environmental and societal benefits by incentivizing new 
approaches and management systems. To foster long-term environmental 
benefits, farmers should also be incentivized to maintain and enhance 
these management practices over time. Regenerative agriculture systems 
on our operations means that wheat growers strive to:

   Maintain an economically viable and productive farming 
        operation to pass to future generations.

   Maintain and build soil health.

   Enhance resource use efficiency.

   Utilize crop protection tools when necessary to treat weed, 
        pest and disease infestations, combat weed resistance and 
        manage conservation tillage systems.

   Provide societal benefits such as sequestering carbon, 
        improving water quality, controlling soil erosion, and reducing 
        overall inputs and energy use all while growing healthy, 
        nutritious food
Preparing for the Next Farm Bill
    Looking to the next farm bill, NAWG members are discussing 
recommended changes to the conservation programs. NAWG does not yet 
have specific policy recommendations finalized, but we are actively 
getting feedback and looking at policy options. Some of the elements of 
the programs that we have discussed so far are what might be considered 
the fundamental building blocks for the conservation title of the next 
farm bill:

   Maintain the voluntary, incentive-based conservation 
        programs

   Improve the flexibility of the conservation programs

   Clearly articulate programmatic changes, so farmers 
        understand farm bill modifications or other administrative 
        changes

   Expand conservation opportunities for early adopters of 
        conservation management systems

   Recognize the diversity in cropping systems, benefits of 
        crop rotations and timing of planting

   Use the conservation title of the farm bill to deliver 
        conservation assistance

   Avoid expansion of conservation compliance requirements

   Review cost-share rates and payment limits due to the rising 
        cost of inputs

   Expand training and mentoring for USDA field employees

   Reliable access to crop protection tools is needed to 
        maintain conservation systems

    As outlined earlier in this testimony, wheat growers and other 
crop, livestock and forest landowners are seeking assistance through 
the voluntary conservation programs and there is a backlog of more 
growers seeking assistance than funding (and staff time) available. We 
recognize that the Inflation Reduction Act added a significant amount 
of funding to these programs and hopefully that backlog will be 
addressed, and we urge Congress to continue the commitment to 
voluntary, incentive-based conservation programs in the next farm bill.
    Wheat is grown in most states in the U.S., but the crop rotations, 
climate and varieties of wheat vary greatly across the states. There 
are six different classes of wheat, with winter wheat making up the 
majority of the wheat grown in the U.S. For conservation programs to 
work well in each of these regions and states, they programs must 
provide a variety of options and be flexible to work within different 
types of farming operations. Dryland farming practices are lacking in 
conservation options because we have already adopted no till and 
several other practices. Conservation programs should be looking 
towards the next technology, innovation and practice to expand the 
conservation opportunities for early adopters of conservation 
management systems such as no till. Growers that adopted conservation 
tillage or no till several years ago are looking for the next option. 
As you develop farm bill policy, please remember that one size doesn't 
fit all when it comes to conservation (or even wheat production). 
Farmers need a variety of program and conservation practice options to 
allow them to find the conservation approach that makes economic and 
environmental sense for their operation.
    As policies are developed through the farm bill reauthorization 
process, or even administrative changes to programs are implemented, 
those changes should be transparent and clearly articulated to growers. 
Explanations of programs and policy changes should be clear for growers 
to understand what elements have changed and why alterations were made. 
Some changes may impact a grower's eligibility, payment or cost share 
rates, or ranking during the application process. Helping growers 
understand the changes will ease any enrollment and manage expectations 
on all sides.
    The conservation programs should be used to deliver conservation 
assistance and new requirements for conservation compliance, or 
additional conservation requirements on commodity programs should not 
be included in the farm bill. Voluntary incentive-based programs work 
the best for delivering and encouraging conservation practice adoptions 
and we urge Congress to maintain this system of conservation delivery.
    The costs of farming are increasing. As farmers we are getting more 
efficient in producing a greater yield on fewer acres in production, 
but the costs of doing business are increasing. Land, equipment and 
repair costs, input supplies, fuel, seeds and labor costs are all 
increasing, as are our health insurance and other traditional business 
costs. Commodity prices have experienced unprecedented volatility in 
recent months. Winter wheat prices soared from $7.32 in February to 
$13.45 in mid-May, then crashing back down to $8.19 in early July. This 
volatility has never been seen before and threatened the marketing 
infrastructure in place for farmers. While commodity prices have 
decreased, input costs have remained high. These high prices also carry 
over into the adoption of conservation practices.. These high prices 
also carry over into the adoption of conservation practices. With 
farmers facing higher costs in all areas of their operations, the 
decision to adopt conservation practices can depend on the financial 
assistance that farm bill programs provide. The cost share rates of the 
conservation programs, where limited in the statue, should be reviewed 
and the payment limits in statute should also be reviewed. Several of 
these provisions have been in place for decades, through many Farm 
Bills and are not reflective of the costs of doing business on the 
farm. Growers are managing larger acreage to become more efficient and 
spread their operation costs over a greater acreage on the farm.
    Conservation programs must provide options for growers of diverse 
cropping systems and be flexible to work within those systems. Farmers 
are diversifying their crop rotations and producing different crops for 
a variety of reasons, whether to meet market demands, keep their ground 
covered throughout the year or experiment with systems, but the policy 
set by the farm bill must be flexible enough to recognize these 
continued changes and USDA must be have the ability to deliver the 
programs in a manner specific to each farming operation.
    Cover crop programs must recognize the timing of planting of crops, 
including winter wheat. Over the past 2 years, USDA offered a pandemic 
cover crop program that provided a $5 per acre discount on crop 
insurance for planting cover crops. When this program was introduced in 
2021, winter wheat producers were not eligible for the program, because 
the cover crop had to be planted over winter--the same time that our 
wheat was in the ground, and cover crops that were planted at other 
times of the year were not eligible. Changes have been made to the 
program to recognize the different timing of cropping systems and that 
cover crops may be planted outside the winter timeframe.
    The last few years have been difficult for most office employees 
and USDA field office staff are no different. However, with the changes 
to programs from the 2018 Farm Bill, some of which were substantial--
managing through [COVID-19], training new staff and the change of 
leadership in FSA state offices--the pressures in many field offices 
have placed added stress on staff. USDA field office staff have 
traditionally been very customer service focused and working 
cooperatively with farmers, but we are now seeing employees that don't 
have the training and understanding of the programs and local farming 
operations. We encourage USDA to increase the training and mentoring of 
the new employees to maintain that strong working relationship with 
farmers.
    In conclusion, wheat growers support continued access to the 
voluntary, incentive-based conservation programs of the farm bill. We 
have benefited from the programs through the implementation of new 
management systems, technology and approaches to more efficiently use 
natural resources and become more efficient in our operations. We also 
believe the environmental and natural resource benefits of the programs 
are significant, improving water quality and quantity, air quality, 
soil health and habitat. However, the programs are becoming more 
complex while wheat growers' operations are also becoming more 
diversified and may be facing new management challenges. Innovation in 
agriculture is also rapidly developing new options for producers and 
staff must continue to say abreast of the changes in agriculture and 
conservation programs should adapt to these new options for growers. 
Staff training on programs and local cropping systems is needed to 
implement the flexibility established in the farm bill conservation 
programs. Wheat growers value the ability to work with USDA and the 
House Agriculture Committee on the development and implementation of 
these important programs and we look forward to the reauthorization of 
the farm bill.

    The Chair. That was perfect timing, Ms. Berg.
    Ms. Berg. I have good staff.
    The Chair. Thank you so much for your testimony. And I now 
recognize Ms. Faeth for 5 minutes.

          STATEMENT OF LORI FAETH, SENIOR DIRECTOR OF 
          GOVERNMENT RELATIONS, LAND TRUST ALLIANCE, 
                        WASHINGTON, D.C.

    Ms. Faeth. Great. Thank you, Chair Spanberger, Ranking 
Member LaMalfa, Members of the Subcommittee, and Ranking Member 
Thompson. It is an honor to testify on behalf of the Land Trust 
Alliance and our 950 member land trusts. We are the voice of 
voluntary private land conservation, unifying the American 
ideals premised on initiative, landowner empowerment, and 
individual private property rights. Our members work with 
willing landowners, including farmers, ranchers, and foresters 
to conserve their land. This not only allows landowners to 
fulfill their goals, it also boosts rural economies and ensures 
working lands remain in family hands.
    Land trusts have a long history of partnering with the USDA 
to help landowners utilize farm bill conservation programs. 
This partnership is vital to ensuring that working lands 
continue to produce food and fiber, provide habitat, protect 
watersheds, and serve as part of the climate solution. Working 
agricultural and forest lands are central to our nation's 
productivity and food security.
    Unfortunately, we are losing working lands at an alarming 
pace, which is why the farm bill conservation easement programs 
are so critical. While all the farm bill conservation programs 
are important, the easement programs, like the Agricultural 
Conservation Easement Program, are the only ones that offer 
voluntary incentives to ensure working lands are not converted 
to other uses in the future. The money generated from the 
easement enables the landowner to pay off debt and reinvest in 
their farm or ranch. In addition, it can often make it easier 
for the landowner to resist outside development pressure and 
transfer the property to the next generation. Farm bill 
easement programs are a good investment and make a significant 
contribution to the economy.
    The Alliance works through our Farm Bill Working Group to 
understand how farm bill programs are working and to develop 
recommendations for statutory and administrative changes. Our 
working group is comprised of more than 100 land trust 
practitioners from across the country, who utilize farm bill 
easement programs to help landowners conserve their lands. They 
bring firsthand experience to our recommendations.
    The Alliance celebrated the passage of the 2018 Farm Bill, 
which increased funding for ACEP. We thank you for what was 
accomplished in that bill. And although you provided a 
substantial increase in funding, it is still not meeting the 
demand from willing landowners who want to conserve their 
working lands with an easement. We strongly support an increase 
in funding for the ACEP program in the 2023 Farm Bill to meet 
this demand.
    Beyond much needed funding, the 2018 Farm Bill included 
important policy provisions to make the program more effective 
and efficient, such as flexibility with the match requirement 
and removing the onerous ALE Plan requirement. The Alliance 
urges Congress to retain these important provisions and to 
provide additional clarification of intent through report 
language.
    In addition, we believe there is a need to make the 
certified entity application and enrollment process work more 
efficiently. This will leverage agency resources and provide a 
more efficient and streamlined path to conserving working 
lands. We further recommend recognizing certified entities 
across all NRCS easement programs.
    ACEP is a crucial tool for conserving farms and ranches but 
does not address working forested lands. We recommend enhancing 
the Healthy Forest Reserve Program to establish a standalone 
forest conservation easement program that ensures private 
forest land remains intact and in production, allowing them to 
continue providing the numerous benefits to rural and urban 
communities. Conservation of our working forest lands is 
critical, and funding for forest conservation easements must be 
in addition to funding for ACEP.
    The Land Trust Alliance supports the Regional Conservation 
Partnership Program. It is a key tool for land trust to help 
protect farm and ranch lands, grasslands, wetlands, and 
forested lands. We want to see consistency in how easements are 
implemented whether through ACEP or RCPP. There is concern from 
the land trust community about the time it takes to get an 
easement approved through that program. We believe that only 
one easement has been closed under RCPP in the 4 years since 
the last farm bill was signed. Our Farm Bill Working Group 
continues to meet and explore options on ways the 
administration of this program can be improved, and we hope to 
work with this Committee to ensure that goal.
    While I focused my testimony on the protection of working 
farmland, ranchland, and forestland, the Alliance supports all 
the programs in the Conservation Title. These investments 
provide a comprehensive portfolio of programs, enabling our 
farmers, ranchers, and forest landowners to be the best 
possible caretakers of our soil and water resources while 
sequestering carbon and providing food, fiber, wildlife 
habitat, and the clean air that we breathe. The Alliance is 
happy to provide our complete set of 2023 Farm Bill 
recommendations and looks forward to working with the Committee 
to draft a strong bill that will ensure the future of our 
working lands. Thank you.
    [The prepared statement of Ms. Faeth follows:]

    Prepared Statement of Lori Faeth, Senior Director of Government 
            Relations, Land Trust Alliance, Washington, D.C.
Alliance Overview
    On behalf of our 950 member land trusts, the Land Trust Alliance 
appreciates the opportunity to participate in this hearing and share 
lessons learned from the implementation of the 2018 Farm Bill and 
recommendations for the 2023 Farm Bill.
    Founded in 1982, the Land Trust Alliance (the Alliance) is a 
nonprofit corporation and national land conservation organization based 
in Washington, D.C., that works to save the places people need and love 
by strengthening land conservation across America. We are the voice of 
private land conservation, unifying the American ideals premised on 
personal initiative, landowner empowerment and individual private 
property rights. Our members have worked with enthusiastic landowners, 
including farmers, ranchers and foresters, in their communities to 
voluntarily conserve more than 61 million acres of land across our 
country, boosting rural economies by helping to keep working lands in 
working hands.
    Land trusts have a long history of partnering with the U.S. 
Department of Agriculture (USDA) to help landowners utilize farm bill 
conservation programs. This partnership is vital to ensuring that 
working lands--farms, forests and ranches--continue to produce food and 
fiber, provide habitat, protect watersheds and serve as part of the 
climate solution.
Why the Farm Bill Is So Important
    The farm bill conservation programs, taken in total, are the 
largest single Federal source of funding for private land conservation. 
Farm bill programs create significant opportunities for land trusts to 
permanently protect working farm and ranch lands, grasslands, wetlands 
and forests.
    Central to our nation's productivity and food security are our 
working agriculture and forest landscapes and the stewards of those 
lands. Unfortunately, we are losing working lands at an alarming pace, 
which is why the farm bill conservation easement programs are so 
critical. While all the farm bill conservation programs are important, 
easement programs are the only ones that offer voluntary incentives and 
cultivate partnerships to ensure working lands are not irrevocably 
converted to other uses in the future. The Alliance recognizes the 
value of these programs, such as the Agricultural Conservation Easement 
Program (ACEP), as a critical tool for farmers, ranchers and foresters 
who want to ensure their working lands are forever in family hands. The 
easement programs enable land conservation organizations and state and 
local governments to work with landowners to exercise their private 
property rights in the best interest of them and their families. They 
are also an excellent investment in food security, an important tool 
for addressing climate change, and they make a significant contribution 
to our economy.
    In 2018 Colorado State University issued a report on a study 
assessing the economic impact of the Agricultural Conservation Easement 
Program-Agricultural Land Easement (ACEP-ALE) (and predecessor 
programs) from 2009-2017. The report showed that in addition to 
leveraging state and private funding, landowners with an easement were 
more likely to change their agricultural practices to improve things 
such as crop rotation and irrigation. In addition, the $80 million 
investment in ACEP-ALE to conserve more than 129,000 acres of farm and 
ranch land created 1,102 jobs and generated $174 million in economic 
activity across the state. Every NRCS easement dollar invested Colorado 
generated $2.19 in direct, indirect and induced spending.
    Earlier this year, the Montana Association of Land Trusts released 
a report, ``Working for Montana Agriculture,'' which showed similar 
results. The report evaluated the economic impact of the 92 ALE 
easements in Montana since the implementation of the 2014 Farm Bill. 
The $109 million ALE investment in these easements protected 289,000 
acres of farm and ranch land, yielded $182 million in economic 
activity, and supported 1,057 jobs, largely in rural Montana.
    These programs are matched with other funding sources to compensate 
willing landowners for the value of a perpetual easement, thus ensuring 
the lands will never become a strip mall or housing development. 
Instead, the lands will remain in agriculture, securing their ability 
to provide food, fiber, plant and wildlife habitat and healthy 
watersheds for our nation. The money generated from an easement enables 
the landowner to pay off debt and reinvest in their farm or ranch. In 
addition, it can often make it easier for the landowner to resist 
outside development pressures and transfer the property to the next 
generation. Farm bill easement programs are a good investment for our 
country.
Farm Bill Lessons Learned
    The Alliance celebrated the passage of the 2018 Farm Bill, which 
increased funding for ACEP from $250 million/year to $450 million/year. 
We thank you for taking this action. This increase in funding rectified 
a budgetary gimmick used in the 2014 Farm Bill whereby funding was cut 
in half in the last year of the bill. While it was a substantial 
increase in funding, it is still not currently meeting the demand from 
willing landowners who want to conserve their working lands with an 
easement.
    Beyond much-needed funding, the 2018 Farm Bill included important 
policy provisions to make the program more effective and efficient. One 
key provision of the 2018 Farm Bill allows landowner donations and 
expenses to satisfy the ACEP-ALE match requirement. This was extremely 
important to states such as Kansas, Texas and Alabama that lack 
meaningful statewide conservation programs, making it challenging to 
secure the required match. This has allowed meaningful participation 
from these states. Unfortunately, the Natural Resources Conservation 
Service (NRCS) did not fully follow through with Congressional intent 
and made cash match a national ranking criteria, thereby giving 
projects with a cash match an unfair advantage.
    Another key provision was removing the requirement for an ALE plan. 
While requiring an ALE plan may have sounded good, it ignored the fact 
that ACEP-ALE easements are perpetual real estate transactions. 
Management practices can and must change as landowners work to maintain 
working lands in an ever-changing world. In addition, NRCS did not 
implement the ALE plan requirement consistently, and, in many cases, 
state NRCS staff were demanding very prescriptive plans as part of this 
real estate transaction. Many important farm and ranch lands went 
unprotected because landowners did not want the Federal Government 
telling them how to run their operations through a required and 
approved plan. Congress recognized this and removed the ALE plan 
requirement in the 2018 Farm Bill. Unfortunately, when NRCS published 
the final ACEP rule it gave states the authority to make an ALE plan a 
state-ranking criteria, which undermines Congressional intent.
    The Alliance strongly encourages Congress to retain these important 
provisions and to provide clarification of intent through report 
language. Ensuring the agency doesn't create administrative barriers 
and burdensome procedures is even more important with the much-needed 
infusion of funding from the recently signed Inflation Reduction Act 
(IRA).
2023 Farm Bill
    In 2017, the Alliance created the Farm Bill Working Group (FBWG), 
which is now comprised of more than 100 land trust practitioners from 
across the country who utilize farm bill easement programs to help 
landowners conserve their lands. The FBWG played a strong role in the 
development of the Alliance's 2018 Farm Bill recommendations and in 
monitoring implementation through comments on rulemaking and navigating 
hurdles as they arose. We have been gearing up for the 2023 Farm Bill 
and earlier this year began socializing our updated recommendations. 
Our 2023 Farm Bill recommendations reflect lessons learned from the 
implementation of the 2018 Farm Bill and are forward-thinking as we 
strive to meet challenges we face today, including increased food 
security concerns and the impacts of a changing climate.
Funding
    As previously stated, we strongly support a significant increase in 
funding for the ACEP-ALE program. The IRA provides an increase in 
funding for ACEP over the next 4 years. The 2023 Farm Bill provides 
Congress with an important opportunity to spread these conservation 
investments over a longer period of time and avoid a post-FY26 steep 
drop-off in funding.
Retain Farm Bill 2018 improvements
    As mentioned earlier, we must maintain important improvements that 
were made in the 2018 Farm Bill, including matching funds flexibility 
and removal of the onerous ALE plans.
Clarify Certification process and benefits
    We also recommend enhancements to make the certified entity 
application and enrollment process work more efficiently. Certified 
entities were established in the 2008 Farm Bill, yet to date there are 
fewer than seven certified entities. We recommend clarifying the 
certification application and enrollment process and ensuring that 
accredited land trusts have a streamlined path to certification. 
Congress should make clear that the certification designation results 
in greater efficiency for program delivery with less direct agency 
involvement in all easement acquisition processes. We further recommend 
recognizing certified entities across all NRCS easement programs. This 
recognition could go a long way toward streamlining and accelerating 
the pace of getting critical conservation projects done.
Reduce barriers faced by historically underserved landowners
    The Alliance strongly supports efforts to increase access to farm 
bill conservation programs for historically underserved landowners. We 
recommend strengthening this work by providing set-asides in ACEP for 
beginning, limited-resourced and socially disadvantaged farmers. ACEP, 
unlike other programs in the Conservation Title, has no such provisions 
to ensure these farmers have a fair shot at funding. In addition, a 
reduction in the match requirement or increased government share for 
land trusts working with these specific landowners would create a 
greater incentive for entities to work with landowners who might not 
otherwise participate in farm bill programs.
Enhance Healthy Forest Reserve to establish a Forest Conservation 
        Easement Program
    ACEP-ALE is a crucial tool for conserving farms and ranches but 
does not address working forested lands. Private forests comprise 58 
percent of all forested land in the U.S. While the total area of 
forestland in the U.S. has been largely stable historically, private 
forests now face significant threats, mainly from conversion to housing 
and urban development. We recommend enhancing the Healthy Forest 
Reserve Program by creating a stand-alone Forest Conservation Easement 
Program that ensures private forestland remains intact and in 
production, allowing them to continue providing numerous benefits to 
rural and urban communities. Conservation of our working forestlands is 
critical to the future of our country and funding for forest 
conservation easements must be in addition to funding for ACEP.
Ensure the Regional Conservation Partnership Program (RCPP) works for 
        easements
    The Land Trust Alliance has fully supported the Regional 
Conservation Partnership Program (RCPP) in past Farm Bills and will 
continue to do so. RCPP is a key tool for land trusts to help protect 
farm and ranch lands, grasslands, wetlands and forested lands and 
provides much needed flexibility for specialized easements not 
available through ALE or Wetland Reserve. Land trusts want to see 
consistency in how easements are implemented whether through ACEP or 
RCPP. One way would be to ensure certified entities have the same 
benefits in ACEP and RCPP. There is also a concern from the land trust 
community regarding the time it has taken to get easements approved 
through RCPP. To our knowledge, only one easement has been fully closed 
under RCPP in the 4 years since the last farm bill was signed. Our Farm 
Bill Working Group continues to meet and explore options to improve the 
administration of RCPP and we hope to work with this Committee to 
ensure that goal.
Exempt ACEP from the Adjusted Gross Income (AGI) limitation
    Unlike other conservation or financial assistance payments, 
compensation for the purchase of a conservation easement is not a 
subsidy payment but a conveyance of a private real property right. This 
means the landowner must give up something of value in exchange for the 
program payment. The Alliance encourages exemption from the AGI 
limitation for ACEP. Doing so would eliminate a bureaucratic barrier to 
bringing projects to closure. In addition to being cumbersome, the 
limitation prevents critical and sensitive lands from being protected. 
Focus should be on the protection of working lands, not the current 
owner.
Conclusion
    While I have focused most of my testimony on the protection of 
working farmlands, ranch lands and forestlands, I would be remiss if I 
did not reiterate my introductory comments in support of all the 
programs in the Conservation title. These investments provide a 
comprehensive portfolio of programs enabling our farmers, ranchers and 
forest landowners to be the best possible caretakers of our soil and 
water resources while providing food, fiber, wildlife habitat, carbon 
sequestration and clean air. In your deliberations of the 2023 Farm 
Bill and consideration of the implications of the IRA funding for these 
programs, we hope to continue to work with you in a bipartisan manner 
to strengthen the efficiency and effectiveness of the Conservation 
title programs to benefit our nation's working lands and the private 
land stewards of these resources. The Alliance is happy to provide our 
complete set of 2023 Farm Bill recommendations and looks forward to 
working with the Committee to draft a strong bill that will ensure the 
future of our working lands.

    The Chair. Thank you very much, Ms. Faeth.
    And, Mr. Wiese, I welcome you here as someone who 
represents many wonderful cattle farms. It is a pleasure to 
have you join us. I work so frequently with the Virginia 
Cattlemen's Association, so I look forward to your testimony, 
and thank you for being here.

 STATEMENT OF SHAYNE WIESE, MANAGER, OPERATIONS, WIESE & SONS: 
                GOOD DOIN' BULLS; MEMBER, IOWA 
           CATTLEMEN'S ASSOCIATION; MEMBER, NATIONAL 
           CATTLEMEN'S BEEF ASSOCIATION, MANNING, IA

    Mr. Wiese. Well, good morning, Chair Spanberger, Ranking 
Member LaMalfa, and Members of the Subcommittee. My name is 
Shayne Wiese, and I am honored to join you today. I am the 
fifth generation of my family's cattle ranch in west central 
Iowa, and we specialize in the production of high-quality 
Hereford bulls to sell to commercial cow-calf producers.
    But beyond our production focus, our operation has a strong 
conservation history. Wiese & Sons, my family's cattle ranch, 
is even a past winner of the NCBA's Environmental Stewardship 
Award.
    I am proud to represent NCBA and the Iowa Cattlemen's 
Association today. Cattlemen graze livestock on approximately 
666 million acres across the United States, nearly \1/3\ of our 
nation's continental landmass. We strive to maximize the 
environmental, economic, and social sustainability of our 
operations. Through voluntary conservation programs, ranchers 
will continue to reach our shared conservation goals.
    Conservation programs are one of the most visible and 
consistently important portions of the farm bill for cattle 
producers across the country. Many cattle producers' only nexus 
to farm bill-related services occur at their local NRCS and FSA 
offices. The 2018 Farm Bill created opportunities for cattle 
producers across the country but also new challenges.
    Cattle producers employ various conservation practices, 
many of which were put in place by using NRCS programs such as 
EQIP. One important feature of EQIP has been its focus on 
livestock operations, and we appreciate the 50 percent funding 
designation for livestock-related practices in the 2018 Farm 
Bill. Federal funds spent on conservation are a good investment 
in our country's natural resources, and it is vital to ensure 
that livestock producers have access to these valuable 
resources for grazing and feeding management.
    While the intent of EQIP is to make conservation funding 
and technical assistance as accessible to all producers, 
barriers to entry often disincentivize producers from using 
NRCS programs. Recently, my family's cattle ranch applied to 
receive EQIP cost-share funding, but after months of waiting, 
we gave up and completed a water infrastructure project without 
the assistance of the USDA. I see many other opportunities for 
our ranch to improve the land and environment with EQIP 
funding. By creating additional hurdles for producers that want 
to use these programs, the Committee and USDA limit access 
while also limiting the government's ability to record our 
environmental improvements. I urge the Committee to support 
initiatives in the farm bill that allow NRCS programs to 
further innovation and commonsense land management.
    Flexibility is key to ranchers' use of conservation 
programs. Ensuring that producers have the freedom to 
effectively manage their land goes beyond EQIP, stretching to 
other conservation programs like CRP. CRP has the potential to 
provide significant environmental benefit but currently fails 
to maximize its value. Changes made in the 2018 Farm Bill limit 
our ability to effectively manage CRP acreage with grazing.
    Congress and the Administration have made clear their 
interest in integrating climate-smart practices in the 
agricultural industry. Grazing is a valuable tool in maximizing 
carbon sequestration, but it is not a tool that we are able to 
use on CRP acreage without penalty. Livestock graze mature, 
stagnant grasses and allow regrowth of green, carbon-capturing 
plants. Our ranch took some land out of CRP and transitioned it 
into our cattle rotational grazing system recently. We have 
seen improvements on all pastures due to more grazing options. 
Grazing access to CRP acreage will promote more opportunity for 
beginning ranchers to graze responsibly and provide existing 
pastures more rest and recovery during drought years. 
Furthermore, grazing should be included as a CRP mid-contract 
management tool. Cattle and other forms of livestock can and 
should be the sustainable solution to managing CRP acreage.
    USDA's voluntary conservation programs have been a great 
asset to cattle producers, and it is important that these 
programs are implemented in a practical, producer-friendly, and 
voluntary manner for years to come. Ranchers across the country 
maintain open spaces, healthy range lands, provide wildlife 
habitat, and we feed the world.
    I appreciate the opportunity to visit with you today. Thank 
you for your time, and I would welcome any questions you have.
    [The prepared statement of Mr. Wiese follows:]

Prepared Statement of Shayne Wiese, Manager, Operations, Wiese & Sons: 
    Good Doin' Bulls; Member, Iowa Cattlemen's Association; Member, 
           National Cattlemen's Beef Association, Manning, IA
    Good morning, [Chair] Spanberger, Ranking Member LaMalfa, and 
Members of the Subcommittee. My name is Shayne Wiese, and I'm honored 
to join you today. I am the fifth generation of a cattle operation in 
west central Iowa that specializes in the production of high quality, 
productive Hereford bulls for commercial cow-calf producers. But beyond 
our production focus, our operation has a strong conservation history. 
Wiese & Sons are advocates for on-farm conservation and have utilized 
cover crops, CRP, water filtration buffers, and erosion reduction 
practices for decades. Wiese & Sons is a past winner of NCBA's 
Environmental Stewardship Award, which recognizes operations that go 
above and beyond to effectively manage not only their cattle, but their 
natural resources as well.
    I am proud to represent the National Cattlemen's Beef Association 
and Iowa Cattlemen's Association today. The National Cattlemen's Beef 
Association is the nation's largest and oldest national trade 
association representing the U.S. beef cattle industry, with other 
250,000 producers represented through both direct membership and 44 
state affiliate associations. The Iowa Cattlemen's Association is an 
affiliate of NCBA, and represents nearly 8,000 producers and friends of 
the beef cattle industry through membership and its 97 county affiliate 
associations.
    U.S. cattle producers own and manage considerably more land than 
any other segment of agriculture--or any other industry for that 
matter. Cattle producers graze cattle on approximately 666.4 million 
acres across the United States--nearly \1/3\ of our nation's 
continental landmass. Additionally, acreage used to grow hay, feed 
grains, and food grains add millions more acres of land under 
cattlemen's stewardship and private ownership. Some of the biggest 
challenges and threats to our industry come from the loss or conversion 
of our natural resources. The livestock industry is threatened daily by 
urban encroachment, natural disasters, and government overreach that 
makes our stewardship harder--if not impossible. Since our livelihood 
is made on the land, through the utilization of our natural resources, 
being good stewards of the land not only makes good environmental 
sense; it is fundamental for our industry to remain strong. We strive 
to maximize the environmental, economic, and social sustainability of 
our operations, and it is through voluntary conservation programs that 
ranchers will continue to be a proud partner with the government to 
reach our environmental conservation goals.
    Conservation programs are one of the most visible and consistently 
important portions of the farm bill for cattle producers across the 
country. Many cattle producers' only nexus to farm bill-related 
services occurs at their local NRCS or FSA office. Building and 
maintaining robust voluntary conservation resources must remain a top 
priority for USDA. The 2018 Farm Bill sent a strong signal to 
agricultural producers across the country that voluntary conservation 
is a top priority, we appreciate this Committee's commitment to 
continually improving these vital programs. Implementation of the 2018 
Farm Bill created opportunities for cattle producers across the 
country, but also new challenges. I'm excited to discuss those 
opportunities and challenges with you today.
    Cattle producers pride themselves on being good stewards of our 
country's natural resources. Cattle producers employ various 
conservation practices, many of which we put in place by utilizing NRCS 
programs, such as the Environmental Quality Incentives Program (or 
EQIP). EQIP is designed to assist producers in implementing 
conservation practices that will enhance the health of grazing lands, 
improving water quality, improving soil quality, and reducing soil 
erosion. One important feature of EQIP has been its focus on livestock 
operations, and we appreciated the 50 percent funding designation for 
livestock-related practices in the 2018 Farm Bill. Because crop 
production receives significant value from other working lands 
programs, like CSP, a livestock carve-out for EQIP funding ensures that 
resources are equitably distributed among producers. Federal funds 
spent on conservation are a good investment in our country's natural 
resources and the sustainability of agriculture and wildlife, and it is 
vital to ensure that livestock producers have access to these valuable 
resources for grazing and feeding management.
    While the intent of EQIP is to make conservation funding and 
technical assistance accessible to all producers, barriers to entry 
often disincentivize producers from utilizing NRCS programs. Recently, 
I applied to receive EQIP cost-share funding for a water infrastructure 
project on my operation. After months of waiting with no approval, I 
finally gave up and completed the project without assistance from USDA. 
I see many other opportunities on our ranch to improve the land and 
environment with EQIP funding but simply do not have the confidence in 
the process to apply again. We could improve upon soil-health-building 
grazing practices, provide more erosion control, and promote cleaner 
water sources. I would rather budget responsibly and pay for it 
ourselves to help the ranch be environmentally progressive than wait 
for assistance and lose valuable time. I am not alone in this. Ranchers 
care about the environment and their livestock, and any improvement on 
the land is something we are unanimously proud of. By creating 
additional hurdles for producers that want to utilize these programs, 
the Committee and USDA limit access to these programs while 
simultaneously limiting the government's ability to record our 
environmental improvements. I urge the Committee to support initiatives 
in the farm bill that allow NRCS programs to support innovation and 
commonsense land management.
    It is clear through my experience with NRCS and FSA that lack of 
funding for practice implementation is not an issue. Especially when it 
comes to EQIP, the 50 percent livestock carve-out is effective in 
ensuring that necessary monies are available. The most significant 
challenge for producers who want to take advantage of working lands 
programs is the inefficiency in technical assistance availability and 
funding distribution that allow us to accomplish a project. While this 
hurdle was acknowledged by Congress in the 2018 Farm Bill, few of the 
policies focused on increasing functionality.
    Flexibility is key to ranchers' utilization of conservation 
programs. Ensuring that producers have the freedom to effectively 
manage their land goes beyond EQIP, stretching to other conservation 
programs like the Conservation Reserve Program (or CRP). CRP has the 
potential to provide significant environmental benefit, but currently 
fails to maximize its value. Changes made in the 2018 Farm Bill limit 
our ability to effectively manage CRP acreage with grazing. Livestock 
graze mature, stagnate grasses and allow regrowth of green, carbon-
capturing plants. Our ranch took some land out of CRP and transitioned 
it into our cattle rotational grazing system recently. We have seen 
improvements to all pastures due to more grazing options. We have 
successfully reduced the need for synthetic fertilizers near that land 
base and have seen less weed pressure with more green grass growth. If 
we allow more CRP grazing, we will promote more opportunity for 
beginning ranchers to graze animals responsibly and provide existing 
pastures more rest and recovery during drought years. This will be 
especially beneficial in areas where pasture is scarce and livestock 
production is rapidly dwindling like my home state of Iowa. 
Furthermore, mid-contract management within CRP includes carbon-
emitting prescribed burns that are dangerous on drought years, spraying 
herbicides that terminate good and bad plant species, or tilling up the 
soil and reseeding which contradicts soil health improvements. Cattle 
and other forms of livestock can be the sustainable solution to 
managing CRP without the negative impact on the ecosystem while also 
helping ranchers economically.
    Congress and the Administration have made clear their interest in 
building a climate-smart economy, including the integration of climate-
smart practices into the agricultural industry. Grazing is a valuable 
tool in maximizing carbon sequestration but is not a tool that we are 
able to use on CRP acreage. This policy not only limits our ability to 
effectively manage our land but contradicts the Administration's 
climate-related priority. By allowing cattle to graze CRP acreage 
without a reduction in payment, we could greatly increase interest in 
CRP contracts, while simultaneously maximizing environmental value and 
economic benefit.
    Voluntary conservation programs work because they are voluntary. 
Our operation has had success in using USDA conservation programs, but 
just because this system works for us does not mean it's right for 
everybody. Continuing to fund voluntary conservation programs, while 
keeping them voluntary, is critical to their continued success. A one-
size fits all approach that accompanies top-down regulation does not 
work in the cattle industry. If these programs or practices were to 
become mandatory, the rules and regulations that farmers and ranchers 
would be subjected to would make it harder for them to utilize the 
unique conservation practices that help their individual operations 
thrive.
    As policymakers consider the sustainability of the U.S. 
agricultural industry, environmental sustainability is only one leg of 
a three-legged stool. Cattle producers strive to balance environmental 
sustainability with economic viability and social consciousness--
maintaining this balance is key to ensuring our long-term success. 
Economic prosperity, social awareness, and voluntary conservation go 
hand-in-hand and we are always looking for new, innovative conservation 
programs that will have tangible benefits for the environment and help 
to improve our ranching lands. USDA's voluntary conservation programs 
have been a great asset to cattle producers, and it is important that 
these programs are implemented in a practical, producer friendly, and 
voluntary manner for years to come to ensure that cattle producers will 
continue to have the ability to do what we do best--produce the world's 
safest, most nutritious, abundant, and affordable protein while 
operating in the most environmentally friendly way possible. Ranchers 
across the country maintain open spaces, healthy rangelands, provide 
wildlife habitat and feed the world. Together we can sustain our 
country's natural resources and economic prosperity, ensuring the 
viability of our way of life for future generations. I appreciate the 
opportunity to visit with you today. Thank you for your time, and I 
welcome any questions you have.

    The Chair. Thank you very much for your testimony, Mr. 
Wiese.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. You will be recognized for 5 minutes each in order to 
allow for us to get to as many questions as possible. Please 
keep your microphones muted until you are recognized in order 
to minimize background noise.
    And I now begin by recognizing myself for 5 minutes. And I 
want to begin with you, Mr. Wiese. I appreciated your testimony 
very much. And one of the things in your written testimony and 
again in your spoken testimony, you talk about some of the 
hurdles that you and your family experienced on your ranch. 
Could you just give us a brief rundown of what are some of 
those hurdles and how they preclude you from being able to use 
these programs in the ways that you would want to optimally?
    Mr. Wiese. Of course, thank you. For us, when we are 
deciding how to manage our cattle, we got to think of three 
things, and one is the environment, our cattle, our business, 
and even, I guess, our social life, our family life. So, some 
of the hurdles with like EQIP and CRP is just flexibility and 
timeliness. The EQIP program I referenced in my testimony, we 
were in a drought and we needed water infrastructure. We have 
to water our cattle. And, our biggest dilemma with it was I 
applied and we waited and waited. And finally, we just had to 
bite the bullet and do it. I am one of the spoiled few in the 
cattle business that has a generational ranch that is set up 
with land, resources, and capital, so I can do that process of 
just buying that outright. Beginning ranchers and farmers don't 
have that in this current state of the business. So that was 
probably the main thing is just the timeliness of EQIP.
    In terms of CRP, we are really, really big fans of it, but 
always having that worry of penalty if we do have to emergency 
graze or hay and our county isn't approved for that, that is a 
hit to the business. It is a cash-flow hit. So I think anything 
that provides flexibility for business, anything that allows 
better grazing management from a cattle perspective, that is a 
win-win for everybody. The environment benefits, the producer 
benefits, and we benefit because we don't have the stress of 
dealing with drought or running out of grass and having to feed 
really expensive hay.
    The Chair. Yes. And you know you have the benefit of the 
regrowth of that grass as you graze on other fields.
    You also talked about just the overall benefits and how you 
view the program and the environmental, economic, and social 
sustainability of your operations. And I appreciated that 
commentary because so much of what it is that we are focused on 
with the Conservation Title, these voluntary programs, they are 
meant to do just that. They are meant to create opportunities 
for producers to be able to invest in their land, get support 
in kind of taking on new projects and programs that they might 
otherwise not be able to pursue that can have all of these 
significant benefits.
    I hear you on just the timeliness of a response because you 
make an excellent point. If someone doesn't have the capital at 
the ready and you are constantly questioning how much and when 
do we just sort of pull the plug on the application and move 
forward doing what needs to be done?
    One of the consistent concerns that we heard from all of 
the witnesses related to technical assistance and the CSP 
program, so I was wondering, Mr. Crowder, perhaps because you 
were the first to bring it up probably because you were the 
first to speak, could you speak to that a little bit? Notably, 
the Ranking Member also mentioned the shortcomings that we see 
in that program. What are some of the suggestions that you 
would bring to the Committee in terms of--is it an issue of 
resources? Is it an issue of training? Is it an issue of 
prioritizing the workforce? What are some of the things you 
would want us to know? Sorry, I think you need to turn your 
microphone on.
    Mr. Crowder. I am sorry.
    The Chair. Thank you.
    Mr. Crowder. In May we had a conservation careers----
    The Chair. Yes, thank you for being here for that then.
    Mr. Crowder. Yes. And we talked about the importance of the 
workforce. And during the hearing, the Committee recognized 
that in order to address our current and future conservation 
needs, we have to bring new generations forward. And at this 
point, I would like to plug that we have 13 members of our 
next-generation leadership institute right next door, so we are 
doing our part. But we have to bring those new folks forward to 
the workforce. We have worked with Chief Cosby and others at 
the NRCS on conservation technical assistance grants to make 
sure we put boots on the ground. And we are doing a lot of work 
in the field to make sure that we have people in line to fill 
those positions at districts and at the NRCS.
    The Chair. Thank you very much. And as my time comes to a 
close, I just want to thank Ms. Berg for bringing the numbers 
to the table in terms of the 7,500 contracts that have been 
given but the 5,000 unfunded for wheat growers across the 
country who have applied for programs. I think for all of us 
looking at what is the demand on the ground, we frequently say 
they are oversubscribed and under-funded but noting that a 
significant number of growers across the country want to 
participate and want to benefit from these programs and simply 
can't I think is a good call to action for us into the future.
    Thank you. My time has expired. And I now recognize Ranking 
Member LaMalfa for 5 minutes.
    Mr. LaMalfa. Thank you again, Madam Chair.
    Mr. Crowder, you mentioned in your testimony the importance 
of forest management on Federal, state, and private land. 
Please elaborate on how the farm bill programs can help support 
forest health. I find it interesting as I came into the 
building, somebody was having a seminar down the hall about 
wildfire. And this points out in this brochure, which covers a 
broad area even around the world, but the highlight at the top 
is the 1 million acre Dixie Fire, which occurred in my district 
last year, 1 million acres, 1 with six 0's behind it. I mean, 
that is many, many square miles of land. So can you please 
speak to us how the conservation programs that are in the farm 
bill or that could be improved in the next farm bill would be 
helpful on what indeed are catastrophes like this?
    Mr. Crowder. I would mention that Nicole and I live in 
Washington State, so we share your fear of wildfires at all 
times. Matter of fact, we have the smoke from California, 
Oregon, Washington. So we understand the fear of living that, 
and I have had the fire bombers come right over my house. So I 
understand.
    Mr. LaMalfa. Ironically, that same smoke plume was making 
it all the way back here. You can see in New York, and they 
were talking about, don't go outside these days for health 
purposes for people who normally do exercise.
    Mr. Crowder. Absolutely, sir. But as far as--NACD supports 
our forest health completely. We have a Forestry Resource 
Policy Group that we work with the Forest Service and the NRCS. 
And we have a lot of work going on with good neighbor 
authority, good forest health practices. The Inflation 
Reduction Act had approximately $5 billion for forestry work.
    And as we go forward with the 2023 Farm Bill, we want to 
help in every way possible to make sure that forest health 
becomes the forefront. We cannot have the fires that we have 
had. I have lived in Washington State for 20 years. The first 
10 years we had very few fires. In the last few years, they are 
bigger, earlier. It is terrifying. So anything that we can do 
to help with forest management practices, help with at the 
local district level, we have programs like Firewise that we 
used on my ranch where you come and evaluate and make sure that 
you get dead timber away from any combustibles, away from the 
house.
    So there is a lot of work that is currently being done, but 
so much more that we can do to make sure that these giant fires 
are more controllable in the future. And if climate change or 
then more heat and dryness that we are seeing over the years 
continues, we are going to be fighting this for years to come.
    Mr. LaMalfa. Indeed, no matter what weather terminology you 
want to attribute it to, if we are going through a heat cycle, 
then we need to be doing more on forest management with the 
right amount of trees per acre that it can sustain with the 
available water underground, as well as snowfall and such.
    Mr. Crowder. Yes, sir.
    Mr. LaMalfa. So let me shift to Mr. Wiese, correct? In 
speaking to this topic here, I think I sense some frustration 
with the limitation of the livestock producers' ability to 
manage grazing on their acreage or even coming back to the 
forestry side of it and other Federal lands, getting the 
permits, I don't know how much that affects you in Iowa. But 
Federal land permits for grazing have really, really tightened 
up and we have seen this happen at the same time as fire. Fire 
acres have increased. Mr. Crowder has kind of mentioned that, 
too, is that we are seeing the number, a big fire used to be 
four digits or even five digits. Now, six digits is becoming 
routine. Touch on the grazing frustrations you might 
acknowledge for us on getting those grazing lands.
    Mr. Wiese. Thank you.
    As he was speaking of managing timber and things along 
those lines, I immediately went to cows. We can use cattle and 
livestock as tools. It is an awesome sight to see when cattle 
take brown, stagnant, mature grass, timber, whatever it is, 
they eat it, they clear it out, and the green regrowth that 
appears from that is beautiful. And I think on a forestry side 
of things, cattle and livestock are a great solution. And it 
doesn't have to be a long graze that can inhibit the grassland. 
It just needs to be a short, intensive rotation that can clear 
that out and everybody wins in that solution, the environment, 
the cattle, the business. Livestock are an incredible tool that 
we can use to help combat wildfire, promote photosynthesis to 
improve carbon sequestration. The cattle can be a tool, they 
aren't a hindrance, and I want to drive that fact.
    Mr. LaMalfa. Indeed, I have seen ideas of having a pilot 
program where we will do some grazing on some land and see what 
the fire suppression effects of that are. Like I don't know, we 
need to be doing a pilot program where we can actually tell, 
you can see any place where a fire occurs or there is grazing 
right up to the fence, the fire stops where there was no 
grazing, big time. So thank you for that.
    And I will yield back, Madam Chair.
    The Chair. Thank you very much. Those questions were very 
interesting, as were the answers.
    The Chair now recognizes Ms. Pingree for 5 minutes.
    Ms. Pingree. Thank you, Madam Chair. Thank you for having 
this hearing. It is such an important time to be discussing 
these programs as we look into the farm bill. And thank you to 
all the people testifying today, I really appreciate all of 
your thoughts. I am going to start with Ms. Faeth from the Land 
Trust Alliance. First, I just want to thank you generally for 
Land Trust Alliance. I come from the State of Maine, and they 
have played such an important role in all sizes of communities 
to preserve land that is important to those communities. And I 
just so much appreciate that you are there.
    But I do want to specifically talk about the farmland, and 
you talked about losing farmland. This was part of your focus. 
And I did see a report from American Farmland Trust that showed 
from 2001 to 2016 our nation lost or compromised 2,000 acres of 
farmland, ranchland every day. So that is just a staggering 
number, and we know it is getting worse, not better.
    So you talked a little bit about some of the conservation 
programs and the speed. What else can you say that you haven't 
already done that we could be doing in the farm bill to improve 
this? I know that funding is key, so feel free to mention that 
again, but any other things you want to talk about?
    Ms. Faeth. Thank you. Yes, the conservation easement 
programs are really critical. And that is, as I mentioned, the 
one tool that will allow willing landowners as landowners who 
want to ensure that their working farm or forested lands 
remained in working lands in perpetuity. They are the key to 
food security in our country, and to conserving farms and 
ranches and slowing down that pace of conversion, so increased 
funding is something obviously that we are advocating for.
    Other things would be simplifying and streamlining the 
certified entity application enrollment process. There are two 
changes that Congress could do as part of the 2023 Farm Bill, 
by clarifying the process to become a certified entity in 
statute, and recognizing certified entities across all easement 
programs. And we are talking with the agency about some 
administrative changes as well, so, you know making those 
programs work more effectively will require both statutory and 
administrative changes.
    The staffing issue, the capacity issue at NRCS and across 
the Federal Government is part of the problem for getting these 
dollars out on the ground to conserving farms, ranches, and so, 
we encourage you to be thoughtful about that as you go forward.
    And then clarification in the 2023 Farm Bill about some of 
the things that were achieved in the 2018 Farm Bill either in 
statute or report language, like around things like the ALE 
Plan, removing that onerous provision in the 2018 Farm Bill and 
the way matching funds are handled will help streamline the 
programs as well. Thank you.
    Ms. Pingree. Sure. Those are really, really helpful, and it 
would be great if you do follow up with more details to all of 
us. I think we are all interested in this.
    I also was interested, you mentioned something about 
including forestry, a forest health set-aside. Do you want to 
talk a little bit about that, too? I thought that was an 
important idea. And so many of us have forest lands in our 
district. Maine is the most forested state in the nation with a 
lot of private forest land, so that is a big interest to us.
    Ms. Faeth. Sure, thank you. In the 2018 Farm Bill, one of 
the things that wasn't addressed is the gap to provide an 
easement opportunity for working forested lands, so we are 
proposing enhancing the existing Healthy Forests Reserve 
Program to establish a new program called the Forest 
Conservation Easement Program. It would be a sister program to 
ACEP where there would be forestland easements, those would be 
entity-held easements, and then forest reserve easements 
focused on endangered species and restoration of those lands. 
And those would be U.S.-held easements. We think this is a 
much-needed and important complement to the farm bill 
conservation programs. We would like to see mandatory funding.
    We want to be really, really clear that in making sure that 
there is a working program for working forested lands that we 
are not attempting to limit or reduce dollars for conservation 
on our farms and ranches. So we believe that any funding for a 
Forest Conservation Easement Program must be in addition to the 
funding for ACEP, and I would be happy to provide more 
information.
    [The information referred to is located on p. 1583.]
    Ms. Pingree. Great. And thank you for that. I absolutely 
agree with you. We can't take money away from the farmland 
preservation.
    Mr. Crowder, you already covered this quite a bit, but I 
know it keeps coming up about the staffing issues. And I am 
glad to hear you are mentioning young recruits. I don't have a 
lot of time, but anything else we need to do to support NRCS 
and having the capacity that it needs?
    Mr. Crowder. One of the big things is the direct hire 
authority for NRCS. That is critical that we get boots on the 
ground, and that always comes back to conservation technical 
assistance so we can do partnership work with districts and 
other organizations that can be those boots on the ground 
besides the NRCS folks.
    Ms. Pingree. Great. Well, I am very supportive of both of 
those things. So I will yield back. Thank you very much, Madam 
Chair.
    The Chair. Thank you so much.
    The Chair now recognizes Mr. Allen for 5 minutes.
    Mr. Allen. Good. Chair Spanberger and Ranking Member 
LaMalfa, thank you for holding this hearing today. And to our 
witnesses, thank you for being here and sharing with us as 
well.
    I would like to begin my remarks by recognizing our 
American farmers. They are the greatest conservationists in the 
world, and it is only with their lead that we can continue to 
protect our natural resources and habitats while also 
continuing to feed the world.
    Mr. Wiese, I know a little bit about what you are dealing 
with. My dad managed the Georgia Hereford Farm right outside of 
Augusta, Georgia, when he returned from World War II. I was 
born and raised on that farm, and in fact I have a picture of 
my dad standing with their champion bull in the sales barn. And 
at that time that bull was purchased, I believe, by a big farm 
in the Midwest. Any chance that you all bought a bull in 1949 
outside of Augusta, Georgia?
    The Chair. I recommend the witness just say yes.
    Mr. Wiese. I would love to find that answer for you.
    Mr. Allen. Yes. I want to know the answer.
    Mr. Wiese. [inaudible].
    Mr. Allen. Yes, and I have never could--I can't remember 
what my dad said that thing sold for, but it was a champion 
bull. But, I also understand what you are going through today. 
I mean, we have the White House combined with my colleagues, 
who are a real threat to the family farm today. And in the name 
of this climate god or this new world religion, while it is 
very clear in the first chapter of the scriptures that we know 
who is actually in charge of the climate, and of course, we 
know the planet is warming, but nobody can tell me what we are 
doing and how we are putting our economy and our farms at risk 
trying to bring that temperature down and how much they can 
bring it down, but that is another subject.
    But you mentioned the CRP program and the flexibility. I 
have had the same problem. Is it Mr. Crowder? I have heard 
frequent complaints from my timber farmers that the CRP is too 
inflexible. And if landowners were provided the option to 
substitute land that is already under CRP contract with the 
same acreage of similarly environmental sensitive land, would 
there be cause for concern?
    Mr. Crowder. Mr. Allen, NACD supports CRP immensely. But I 
would say that we support that the most environmentally 
sensitive ground is prioritized. So prime farm ground would be 
of less priority in CRP. In Washington, we have some issues 
where CRP is oversubscribed in some counties due to sage grouse 
initiatives, and that is one thing that it is more of a 
localized issue. But CRP is a great tool for farmers.
    Mr. Allen. It is, but we have to make it more flexible for 
them because things change.
    Mr. Crowder. I agree.
    Mr. Allen. You put these things in a program for a long-
term, but I have had problem after problem, people wanting to, 
for example, use the pine straw, people wanting to do other 
things. Like they have property that they need to flip and they 
were willing in this case to even give more property to CRP, 
but the government turned them down. And so we have to figure 
out in this next farm bill how to make that more flexible.
    Ms. Berg, if EQIP funds were allowed to be used to help pay 
for precision ag technology, would this help farmers address 
natural resource concerns and deliver environmental benefits 
according to the purpose of the program?
    Ms. Berg. Absolutely. EQIP is definitely a tool that 
farmers need out there to help integrate precision agriculture 
and technology to help manage the natural resources and promote 
soil health in our farming practices.
    Mr. Allen. All right. And, of course, I want to talk about 
the feral hog problem, but, first, Mr. Wiese, I got to ask you, 
I mean, what kept you from being able to get the water from the 
ground or wherever to water your cattle? And I don't know, are 
you all irrigated out there or--so you are dryland? Okay. Well, 
in Georgia we have to irrigate. But anyway, what was the 
holdup? I mean, was it the Federal Government?
    Mr. Wiese. Well, we water on a lot of ponds.
    Mr. Allen. Yes.
    Mr. Wiese. And ponds were running dry.
    Mr. Allen. Yes.
    Mr. Wiese. So we were looking to run a water line to make 
an extra tank into that particular pasture, and the holdup was 
just the process. We applied, did all the paperwork.
    Mr. Allen. Who did you apply to, the state or----
    Mr. Wiese. The state.
    Mr. Allen. Okay.
    Mr. Wiese. We waited and we waited and nothing ever came 
about of it. And we have to water livestock, so we just went 
ahead and bit the bullet and did it.
    Mr. Allen. Yes.
    Mr. Wiese. And, again, it wasn't ideal, but it is what we 
had to do.
    Mr. Allen. All right. It sounds like you need some 
leadership in the State of Iowa. All right. Well, I yield back, 
Madam Chair.
    The Chair. The chair now recognizes Mr. Panetta for 5 
minutes.
    Mr. Panetta. Thank you, Madam Chair, Ranking Member, I 
appreciate this opportunity to have this type of discussion 
with these experts to talk about many of our Federal 
conservation programs, especially when it comes to protecting 
our farmlands and developing effective conservation practices.
    I hail from the Central Coast of California, the area that 
I represent. And obviously, we have plenty of not just 
agriculture but specialty crops, including 50 percent organic 
crops within that. Obviously, with the unique makeup of our 
agricultural landscape comes unique conservation challenges, 
especially when it comes to access to technical information and 
the up-front cost. Yet, there is still plenty, plenty of work 
to do as we approach next year's farm bill to ensure that all 
growers, especially those left out of the status quo like my 
specialty crop producers, that they are included in these types 
of very, very important conversations.
    Now, as we look to better protect our environment, of 
course, I firmly believe and I think most people around this 
dais firmly believe that farmers have a huge role to play, as 
well as our government, so that we can provide the resources, 
the knowledge, the intellect that is critical in regards to the 
support that is necessary for our farmers and ranchers, 
especially those that are most impacted by the threats of 
climate change and environmental degradation.
    Now, I would also like to obviously highlight the fact that 
the IRA, the Inflation Reduction Act, provided close to $20 
billion in direct support for the USDA's conservation programs 
within NRCS, a long overdue investment that will hopefully help 
our producers. And I look forward to continuing to work with 
this Committee, with the Department of Agriculture so that we 
can make sure that all farmers are able to benefit from these 
types of solutions.
    Mr. Crowder, obviously, you talk about certain programs, 
and you focus on obviously conservation, technical assistance, 
and you hit on EQIP quite a bit in that. Obviously, I hear 
often with my specialty crop producers, one size does not fit 
all. And I think we understand that, and we believe that. Can 
you explain why programs should remain voluntary so that it is 
important and how it contributes to the success of the NRCS 
conservation programs?
    Mr. Crowder. Well, in our opinion, the voluntary aspect is 
the key. The government is not coming in telling any farmer 
what they need to do. The impacts that you get for these 
farmers to do water quality work, quantity work, benefits not 
only those farmers but the neighbors, the community, and the 
millions of acres that have gone on. It creates an environment 
that is good for the United States.
    So one thing that comes to mind for your area and others is 
the access to the historically underserved. And one thing that 
I have been working on and talk to Chief Cosby and others is 
the signatory authority for conservation programs. And 
historically, you have Black farmers in the Southeast, you have 
Tribal members, Pacific Islanders and others, Latinos that 
can't sign the conservation programs because they don't have 
access to clear title to their farm. So that is one aspect that 
we are working on. But EQIP and other conservation programs are 
just key to making sure that producers have the access to the 
programs that they need to be successful.
    Mr. Panetta. Okay. Mr. Wiese, directing my questions 
towards you, obviously, the 2018 Farm Bill I would say 
empowered livestock producers to be better stewards of our 
natural resources. If given the chance, what would you want to 
see in the 2023 Farm Bill that would help us build on this 
work?
    Mr. Wiese. Thank you. I think, in reference to the 2018 
Farm Bill, there was a lot of good, but there were a couple of 
hurdles. For example, in terms of emergency haying and grazing 
CRP ground, if we hit a D3 drought, the ability to emergency 
graze and hay became more limited due to making sure there was 
proper amount of residual grass. So they swapped it over to 
payment per head. And by doing that, it almost formed inflation 
within the cattle business and just drove up the price of hay. 
So, we think we need to take a flexible approach where we have 
more options to graze, maybe reduce the penalty for grazing 
because that promotes better mid-contract management instead of 
taking a tractor and spraying chemical or promoting burning of 
CRP ground, we can use cattle to do that for us. I think we 
just need to take a holistic approach where again, the 
business, the cattle business, the conservation is there, the 
social aspects, the thing is there where all of it works 
together, so very subtle things. And obviously, I am not 
familiar with specifications, due to my occupation, but I think 
anything that helps promote young cattlemen and cattlewomen and 
farmers and ranchers in general to have a business improvement 
and still make conservation a priority would be a win for 
everybody.
    Mr. Panetta. Fair enough, thank you. Thanks to all the 
witnesses. Madam Chair, I yield back.
    The Chair. Not seeing a Minority Member on, we are going to 
go to Ms. Schrier next for 5 minutes.
    Ms. Schrier. Thank you, Madam Chair, and welcome to all of 
our witnesses. I am particularly delighted to have two 
witnesses, Ms. Berg and Mr. Crowder, from my home State of 
Washington. It is wonderful to see you today. And you have both 
been excellent consultants and advisors for me and my staff.
    I am excited to talk about these programs, which are so 
popular in my district because of their flexible, local-first 
approach, which really serves the diversity of Washington 
agriculture well.
    Look, I don't think we need to reinvent the wheel here. 
What we need are commonsense adjustments to ensure that these 
programs are serving our producers and their land well. And as 
funding for these programs increases, I think we need to find 
ways to decrease the burden on our farmers and growers and also 
on conservation districts. I have heard from producers that the 
application process for these programs is complicated, and 
applying can feel like a full-time job in itself. And this is 
particularly frustrating given the low success rates of these 
applications. In fact, in 2020, only 30 percent of EQIP and 32 
percent of CSP applications were accepted in Washington State.
    So for farmers who are already busy, applying to a 
complicated oversubscribed program is just not the best use or 
an appropriate use of their limited time. So that is why many 
farmers depend on their local conservation districts for 
assistance, which puts pressure on them. They partner with NRCS 
and serve as the boots on the ground to make these programs 
work.
    Mr. Crowder, I have a couple questions for you, and then I 
would like to pivot to Ms. Berg. First, what can Congress do to 
support conservation districts who are not only implementing 
projects but also assisting farmers with applications and doing 
outreach to their communities about what services they provide?
    Mr. Crowder. Good to see you again, Congresswoman Schrier.
    NACD has a fantastic working relationship with USDA NRCS, 
but one thing I have talked about already but I can't talk 
about enough is the conservation technical assistance and the 
conservation technical assistance grants that we implement 
through the NRCS funding throughout districts. And that has 
gone to 50 states and three U.S. Territories. And in the last 4 
years, we have distributed about $50 million to districts 
directly towards staffing to help NRCS put boots on the ground 
to make sure those conservation plans are written for those 
conservation programs. So that is one thing that I would say 
that we do a very good job of working with NRCS on.
    Ms. Schrier. Thank you, and thank you for pointing out the 
need for staffing. Now, specifically with the application 
process, is there anything that we can do as we head toward the 
next year's farm bill for USDA and Congress to do to just 
simplify the application process to make it easier on farmers?
    Mr. Crowder. As far as NACD's farm bill principles, one of 
our principles is clarifying and simplifying the application 
process. So we are happy to work with this Committee, the full 
Agriculture Committee, and NRCS to make sure the applications 
for those programs are streamlined. You have so much money that 
is coming forward through farm bill, IRA, and infrastructure 
that it just simply has to be an easier process for farmers to 
make sure that their applications are processed, going forward. 
And we are happy to work with this Committee and others to do 
that at NACD.
    Ms. Schrier. Thank you. Last, I just want to highlight some 
challenges experienced by those using the CRP, which enrolls 
over 1.4 million acres in Washington State, which supports 
wildlife--you talked about the sage grouse--and reduces soil 
erosion.
    Ms. Berg, you mentioned in your testimony that recent 
changes to the program like reducing cost-sharing and how 
rental rates are calculated, compounded by staffing shortages, 
made the most recent signup period even more complicated than 
normal. You also mentioned the need for additional training. 
What else can be done? How would you do this kind of training? 
What can we do in Congress to change these programs and make 
them better?
    Ms. Berg. Thank you for the question, Congresswoman. And I 
do think that there can be some changes set forth in the CRP 
program. One thing happened a couple years ago. There was over 
200 different changes to the program, and ever since then, we 
have had a problem in our state like interpreting the rules of 
the program, what are your expectations, laying out the 
expectations. And then also, I talked about staffing and trying 
to get the staff out to the farms or onto the CRP land and help 
us understand certified stands, how can we make the CRP a well-
rounded part of our business plan? I don't have much time, so I 
will make it short.
    Ms. Schrier. Thank you. I yield back.
    The Chair. The chair now recognizes Mr. Johnson for 5 
minutes.
    Mr. Johnson. Thank you, Madam Chair. I will start with Mr. 
Crowder. And I think we have seen just incredible improvements, 
cover crop usage by American producers up 50 percent in recent 
decades. We have seen conservation tillage up 30 percent in 
recent decades. I certainly have seen a number of those 
evolutions on the ground in South Dakota.
    So, Mr. Crowder, to what extent do we feel like it has been 
farm bill programs, conservation programs that have really 
driven that adaptation? Or are there other factors primarily to 
credit for that?
    Mr. Crowder. Well, I would say the farm bill programs are 
certainly the driving force for that. There are billions of 
dollars and millions of landowners that participate in that. A 
caveat is only 30 percent of the applications are funded, so 
there has to be a better avenue to fund those applications. We 
have to simplify the applications and make sure more of them 
are funded. Now, we have a lot of money coming from Inflation 
Reduction Act that will address that, and we will see, going 
forward, with the 2023 Farm Bill how that is incorporated or if 
it is incorporated and see how that money affects the 
conservation that goes on to the ground.
    Mr. Johnson. So outside of the fact that only 30 percent 
are getting selected, what is the next largest barrier to 
further adoptation of these conservation practices?
    Mr. Crowder. Boots on the ground. We need more NRCS folks 
and more district folks and more people that helped write 
conservation plans and process those applications. If your 70 
percent are not getting funded, not getting done, we have to 
make sure those conservation plans are ready on these fields, 
and districts stand ready to help with that. There will be a 
lot of money coming forward here in the next 4 years for that, 
so if those conservation plans are ready, you can use those 
parallel tracks of Inflation Reduction Act money and farm bill 
money to put that conservation on the ground.
    Mr. Johnson. So I recently had a farm bill conservation 
roundtable in South Dakota, and I was surprised at the number 
of producers who told me at that round table that they felt 
like there had been so much turnover at NRCS and that so many 
of the new hires didn't really understand the conservation 
practices. They weren't really able to provide the level of 
technical assistance and advice that these producers were 
seeking. Mr. Crowder, do we hear that elsewhere or was that 
more of a localized problem?
    Mr. Crowder. No, sir, you will see that everywhere. And the 
Great Recession through COVID is real, and it is not just NRCS, 
it is McDonald's. Every business you deal with, you will see 
that. But I know Chief Cosby and NRCS are working very hard to 
bring in a direct hire authority. It would certainly help that. 
We need to help NRCS get those folks on the field. They need to 
go to my farm and Nicole's farm and Mr. Wiese's farm and make 
sure they understand the processes that it takes, what the 
farmer needs. So they need to understand how to write those 
programs, but also why us farmers, why us ranchers, why we need 
that.
    So yes, I agree with you, there are challenges at the local 
field office, but we know that and we are working on that. And 
I know the NRCS is working on that very hard to make sure that 
we address the needs of farmers and ranchers and producers.
    Mr. Johnson. Ms. Berg, with the minute I have left, any 
reactions to any of my questions or Mr. Crowder's statements?
    Ms. Berg. Just my reaction, you asked the question, are we 
seeing the technical assistance challenges across the 
countryside in the wheat industry? Absolutely. That is one of 
the biggest complaints we hear through our association is the 
lack of technical assistance, boots on the ground. And then 
when they do get boots on the ground, we have actually tried to 
approach them and say, ``Hey, let's do some mentoring, get some 
of these new staff members out to the farm. Let's go kick some 
dirt. Let's get them to understand the new technologies and the 
up-and-coming technologies that we would like to implement on 
our land.'' And some of these folks just need some training and 
need some help with some training.
    Mr. Johnson. Very good. Mr. Wiese, anything you want to 
add?
    Mr. Wiese. Thank you. Quickly, I think one thing we need to 
also consider is trying to avoid multi-county conservation 
offices. I know in Iowa there are a couple of counties that 
have to double dip or offices that have to double dip via 
counties, and I can only imagine in larger states like New 
Mexico or South Dakota where they have to travel very far to 
get to their NRCS office, that is a hindrance in terms of 
knowledge, too. Funding, I agree with everything we have 
stated. We have to get boots on the ground, inform everybody, 
and have less variability amongst offices.
    Mr. Johnson. Thank you very much. Madam Chair, I yield 
back.
    The Chair. The chair now recognizes Mr. O'Halleran for 5 
minutes.
    Mr. O'Halleran. Thank you, Madam Chair, Ranking Member, for 
holding this hearing today. I appreciate the opportunity to 
hear more from our stakeholders and their experience with Title 
II conservation programs.
    Conservation of our nation's natural resources continues to 
be a top priority of mine in the upcoming farm bill. And it 
should be no surprise to anybody that we are having a problem 
with getting personnel out in the field. We have gone through 
cuts after cuts after cuts over multiple years, and seeing that 
number decrease at the expense of conservation, of the rancher, 
the farmer, and others who need these programs with enough 
personnel to make them effective.
    With the current conditions in the Colorado River Basin, 
Arizona continues to experience the worst drought in the past 
1,200 years, very detrimental to our agriculture industry. And 
I fully expect the conditions may worsen considerably before 
they get better, which is why these conservation programs are 
even more important to farmers and ranchers in my district. We 
must provide farmers and ranchers the tools they need to 
continue to do good work and be good stewards of the land.
    Mr. Crowder, farmers in my district tell me that they are 
making big changes to farms that increase resilience to extreme 
weather like drought takes a lot of time, often multiple 
seasons. What do you see as the best tools in the toolbox of 
the NRCS programs for addressing the length of time it takes to 
implement these changes?
    Mr. Crowder. Well, if I understand your question correctly, 
is--so can I have you clarify your question as far as the 
length of time? Is that how long it takes to get from 
application to on-the-ground conservation work?
    Mr. O'Halleran. Exactly. Thank you.
    Mr. Crowder. Yes. Simply, that is more people on the 
ground. That is more people writing applications. And I don't 
want to sound like a broken record today, but direct hire 
authority for more employees at the NRCS and conservation 
technical assistance dollars NACD and other applicants. It is a 
process, and the government has an oversight to make sure that 
those funds are approved appropriately and that they are put on 
the ground appropriately, but we have been doing this a long 
time. NRCS has been doing this a long time. They they know what 
needs to be done as far as the practices on the ground. There 
are 167 practices, and we have priorities on that. And local 
working groups are great about prioritizing the highest needs 
in each area. So simply more people will help get conservation 
on the ground quicker.
    Mr. O'Halleran. Thank you. And a follow-up, Mr. Crowder, 
from your experience, what program would you say is best 
positioned to help farmers in regions experiencing drought? And 
are there any adjustments that we could include in the next 
farm bill to improve upon this program and any other programs 
do you see need vast improvement?
    Mr. Crowder. Yes, sir. NACD, we support all of the 
conservation programs, but EQIP is the workhorse of the 
traditional conservation programs. CSP rewards early adopters, 
and you can take it to the next level. But EQIP is a program 
that can help with irrigation efficiencies and on and on, so 
that would be the workhorse of the conservation programs.
    Mr. O'Halleran. Thank you very much. And I am going to end 
my remarks by just saying that I don't think any of us on this 
Committee are surprised by the fact that we need more personnel 
in the field, more people working faster to be able to get to 
the point where we are able to address the large amount of need 
out there on our farms and ranches across our country and 
conservation across our country.
    And with that, Madam Chair, I yield.
    The Chair. Thank you very much. In coordination with the 
Ranking Member, we are going to do a second round of questions. 
As of right now, it is the Ranking Member and I who are 
interested in another round. If any other Members want to 
express interest, please do let us know. But we are going to 
begin with Ranking Member LaMalfa. I recognize you for 5 
minutes.
    Mr. LaMalfa. Thank you again.
    Ms. Berg, good to catch up with you here on the Committee. 
We obviously see the water issue in the West is very acute. And 
so we have had water conservation titles in the past in the 
farm bill. What do you see that we need to improve upon in 2023 
to make--we need to talk about water infrastructure, certainly, 
but when we are talking on the conservation side, what can we 
do to make our water go farther so agriculture can continue to 
thrive and be at the table to receive more water?
    Ms. Berg. Thank you for that question. I do have an 
irrigated farm and do have concerns about water and water 
levels. One of the things that I think that we could do through 
these Title II conservation programs through NRCS is do a 
better job of how do we document water savings. So if we did an 
irrigation conversion from like real flood irrigation to like a 
drip irrigation, there is water savings. So how can we move 
forward and have more of an inventory control through NRCS on 
how are we saving, what are we saving, and not just necessarily 
acres treated. And so I think that that could help us have a 
better picture of where are we saving water, how do these 
conservation programs----
    Mr. LaMalfa. Are you diplomatically saying that farmers 
don't get a lot of credit for when they do something better 
like saving water or have more conservation practices that 
maybe produce less smoke when burning off stubble and things 
like that? Or do you think we need a little more credit for 
that? Is that kind of what you are saying?
    Ms. Berg. I absolutely think we need more credit for that.
    Mr. LaMalfa. Yes. Yes. I have noticed that myself in 
farming. Let's talk a little bit about the, I think it alluded 
to by Mr. Allen earlier, too, that we are having some problems 
with not enough of the--well, some of the staff that that deals 
directly with these programs understanding the system of 
farming and whether it is rotational practices, maybe not 
standard practices as they see it. What do you think we need to 
improve through the NRCS and others to help them have the 
flexibility installing the practices on their land that are 
actually tailored to what they need instead of maybe what the 
book says?
    Ms. Berg. And that is a great question because farming, as 
you know, each year is different. Each season is different. And 
it is not in a book somewhere. And so I think through training 
and some mentoring programs and whether it is through an 
association like ours that can filter down to other state 
associations and try to get some training and get those staff 
people out to the farms. I mean, I have always told anybody, if 
you want to come out to the farm and drive the tractor or 
combine, I will let you do it for free. And so get them out 
there and have them understand the practices and the 
technologies and where we want to go in technology because----
    Mr. LaMalfa. Internships on the farm maybe? Is that what 
you are saying?
    Ms. Berg. Yes, that is right.
    Mr. LaMalfa. Yes. Okay. So I guess what we are really 
looking at is that sometimes you are running into inflexibility 
or lack of knowledge and so you got a hard-and-fast rule that 
doesn't allow the type of things that would be actually 
beneficial and towards the goals of the conservation but also 
help the farmers thrive, and you are finding that you are 
running into a wall sometimes?
    Ms. Berg. Yes, like a good example would be the CRP 
program. And so you have a 10 year contract for CRP, you 
planted your CRP, you got it up, and then let's say you get 
into a drought situation. And so you are in this drought, your 
CRP is dying, and you don't really have much, whether it is 
technical assistance, financial assistance to help reestablish 
those plants that you planted, so then the farmers are led--now 
what? Now I am in trouble. I have no flexibility in the 
program, and I need to make sure that I either get it 
established or I have to pay it back. And so that becomes very 
difficult for farmers. And so there needs to be ways, 
especially when you have natural disasters, whether it is fire, 
wind, however you want to like categorize it. And so there 
definitely needs to be more flexibility in the programs and a 
little bit more assurances through quality assurances across 
state lines on how can we make these and how is it not one size 
fits all?
    Mr. LaMalfa. Interesting, yes, because it is through no 
fault of their own but the conditions, maybe it is drought, 
maybe some other natural disaster, hurricane or whatever, 
tornado, earthquake where I am from, that could change their 
ability to fulfill as they would have desired to deal with, and 
all of a sudden they are in trouble. Well, I appreciate that. 
That gives us something to go with here. So please, anybody on 
the panel that was--you are nodding your head, too--send your 
thoughts along as I have run myself out of time here. But as we 
formulate the next farm bill and these conservation programs, 
help us to build in the flexibility and adaptability.* Nobody 
is trying to work around the program or take advantage of it in 
a malicious way. It is just things do happen. So thank you. I 
yield back.
---------------------------------------------------------------------------
    * Editor's note: the responses to the information referred to are 
located: for Mr. Crowder, p. 1583; Ms. Faeth, p. 1584; and Mr. Wiese, 
p. 1585.
---------------------------------------------------------------------------
    The Chair. Thank you, I now recognize myself for an 
additional 5 minutes. And I just want to do some follow-up with 
some straightforward questions that I am asking more for the 
record than for anything else as we move into the future. Mr. 
Crowder, you have talked a lot about direct hire authority. Can 
you just give us a brief rundown of what that would mean and 
why that matters?
    Mr. Crowder. Madam Chair, I don't have the numbers in front 
of me but it is 700 to 1,000 NRCS employees that they are down. 
They have filled 500 or 600 a year, but the attrition rate--
they are not gaining on attrition rate. So we have to have that 
authority through the NRCS to make sure that they can very 
quickly fill positions throughout the United States to make 
sure that those field offices are full.
    And the other issue is not just direct hire authority but 
the amount that they are paying the folks in Washington State, 
a new employee would make $24,000 more if they worked for the 
State of Washington than the NRCS. So they are losing engineers 
and other specific employees because there is not enough funds 
there to compete with the private or other Federal agencies.
    The Chair. So it sounds like that needs to be a continued 
conversation about pay structure, pay bands, as well.
    And now, Mr. Wiese, I am going to go to you with a bit of a 
follow-up. You said something in an answer I think it was to 
Mr. Allen's question where you were talking about the short 
intense graze and like what you have seen in terms of dead 
grass, worrisome terrain just getting eaten up and then new 
growth come in. Could you just speak to that a little bit? For 
those who maybe don't spend time either working the land with 
cattle or their crops in their district are not necessarily 
livestock and they don't spend a lot of time on ranches, could 
you just sort of walk through how some of these programs in the 
day-to-day function, and I am talking really like 101 
discussion, again, for the record, how they facilitate what it 
is that you do with the added benefit of carbon sequestration 
and support to soil and also allow you to keep the waterways 
clear.
    Mr. Wiese. Thank you. I think cattle are underappreciated 
for their value to upcycle nutrients. They are taking fiber, 
cellulose in the plants and digesting it, which we cannot do, 
and they are turning it into a nutritious protein source for 
us. And while they do that, they are providing nutrients back 
into the soil to promote organic matter and prosperity.
    So, for us in terms of rotating cattle, there is a lot of 
benefit in terms of what they call take half, leave half in 
terms of plants. So how our cattle ranch operates is we turn 
cattle in to a pasture. It is a lot of visual appraisal and 
making sure that we don't graze it down to the dirt. And after 
about anywhere from 5 to 10 days, we move them to a different 
pasture. And it is a constant cycle depending on the growing 
season. If you have cool season grasses versus warm season 
grasses, you have to adjust that all year long. And we truly 
are promoting that the root systems to go deeper. We are 
promoting green leaf blades to emerge to capture sunlight. That 
is key in carbon sequestration. And it is really not that 
complicated if you look at it just from a cattleman's 
perspective. It doesn't have to be this real scientific 
process.
    So I would invite anybody if they would love to come 
witness this at our cattle operation, we intensively graze as 
long as we can fall, spring, summer grazing, and it is 
something I think a lot of young cattlemen and -women can 
integrate into their business to become more profitable.
    The Chair. It is quite a sight to really spend time on a 
cattle operation and to see exactly what you are talking about, 
and even going back to your opening comments in terms of the 
balance of environmental benefits and benefits to the 
operation, social benefits, all the rest, even just the ability 
to know where your cattle are at any given time and be able to 
rotate them through smaller pastures. The folks on the ground 
have been just so vital. And I thank all of the cattlemen 
across Virginia who have spent a lot of time educating me on 
the benefits that their work has to the local economy, culture, 
society, and ultimately to our food sources.
    The Ranking Member has a dueling hearing, has excused 
himself, so I am going to continue forward towards adjournment. 
And he is foregoing a closing statement but again conveys his 
appreciation, as do I. Thank you. To follow up on what Ranking 
Member LaMalfa was saying, I do want to thank all of our 
farmers. I think that farmers do need a lot more credit, as do 
foresters, for the work that they do to protect our natural 
resources, the work that they do looking after the land and 
frankly, the work that they do to feed our fellow Americans.
    I want to thank all of you for being here today. You have 
provided really thoughtful insights regarding the USDA's 
conservation programs. And certainly, as we look ahead to the 
2023 Farm Bill, we want to make sure that we are informing any 
changes, adjustments, modifications to these programs based on 
what is working, what is not working. And I think that we have 
all heard very loud and clear timelines, responsiveness, 
flexibility, hiring flexibility, recognition that different 
areas, regions, and in fact, types of crops produced really 
might dictate the needs for flexibility so that producers on 
the ground can make the most of these programs.
    Your thoughts on what is working and is not working is so 
helpful to us as we try to make these policies stronger, as we 
work to ensure that they do work for producers, and as we are 
looking to find on-farm efficiencies, boost the bottom line for 
producers, and make sure that we have an eye on combating the 
climate crisis with nature's--well, the first conservationists, 
who, of course, are our nation's farmers and producers.
    So with that, I would like to thank you all for your time 
today. And under the Rules of the Committee, the record of 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from the witnesses to any questions posed by a Member.
    This hearing of the Subcommittee on Conservation and 
Forestry is now adjourned.
    [Whereupon, at 11:33 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    Supplementary Material Submitted by Michael Crowder, President, 
             National Association of Conservation Districts
Insert
          Mr. LaMalfa. . . . So I guess what we are really looking at 
        is that sometimes you are running into inflexibility or lack of 
        knowledge and so you got a hard-and-fast rule that doesn't 
        allow the type of things that would be actually beneficial and 
        towards the goals of the conservation but also help the farmers 
        thrive, and you are finding that you are running into a wall 
        sometimes?
          * * * * *
          Mr. LaMalfa. . . . So please, anybody on the panel that was--
        you are nodding your head, too--send your thoughts along as I 
        have run myself out of time here. But as we formulate the next 
        farm bill and these conservation programs, help us to build in 
        the flexibility and adaptability.

    NACD believes that providing flexibility within USDA conservation 
programs allows producers to implement the most effective conservation 
practices that best fit their unique locations and operations. For 
example, EQIP permits producers to select between more than 150 
eligible conservation practices, which allows Midwest row crop farmers 
to implement cover crops or no-till, while Louisiana rice farmers can 
adopt practices to increase irrigation efficiency.
    NACD's Farm Bill Task Force has identified some areas within 
Federal conservation programs where additional flexibility may improve 
outcomes for producers. For example, the task force believes that CRP 
should provide more flexibility for producers to utilize haying and 
grazing in order to meet needs in a timely manner. Generally, NACD 
believes that encouraging a locally informed and led approach across 
all conservation programs will provide producers with the flexibility 
to best meet their needs and put good conservation practices on the 
ground.
                                 ______
                                 
  Supplementary Material Submitted by Lori Faeth, Senior Director of 
               Government Relations, Land Trust Alliance
Insert 1
          Ms. Pingree. Sure. Those are really, really helpful, and it 
        would be great if you do follow up with more details to all of 
        us. I think we are all interested in this.
          I also was interested, you mentioned something about 
        including forestry, a forest health set-aside. Do you want to 
        talk a little bit about that, too? I thought that was an 
        important idea. And so many of us have forest lands in our 
        district. Maine is the most forested state in the nation with a 
        lot of private forest land, so that is a big interest to us.
          Ms. Faeth. Sure, thank you. In the 2018 Farm Bill, one of the 
        things that wasn't addressed is the gap to provide an easement 
        opportunity for working forested lands, so we are proposing 
        enhancing the existing Healthy Forests Reserve Program to 
        establish a new program called the Forest Conservation Easement 
        Program. It would be a sister program to ACEP where there would 
        be forestland easements, those would be entity-held easements, 
        and then forest reserve easements focused on endangered species 
        and restoration of those lands. And those would be U.S.-held 
        easements. We think this is a much-needed and important 
        complement to the farm bill conservation programs. We would 
        like to see mandatory funding.
          We want to be really, really clear that in making sure that 
        there is a working program for working forested lands that we 
        are not attempting to limit or reduce dollars for conservation 
        on our farms and ranches. So we believe that any funding for a 
        Forest Conservation Easement Program must be in addition to the 
        funding for ACEP, and I would be happy to provide more 
        information.

    The Alliance believes that the current Agricultural Conservation 
Easement Program is oversubscribed and under-funded. This is the reason 
why we will advocate for additional funds for ACEP. Currently, 
forestland is only eligible through the Regional Conservation 
Partnership Program. Outside of that, forestland is only allowed in 
ACEP when it is incidental to the prime farmland or grasslands of 
special significance priorities within the Agricultural Land Easement 
Program. Recognizing the threat to our productive farms is real, it is 
important that the ACEP funding is fully consumed within the priorities 
of the program. Redirecting any of the ACEP funds specifically to 
forest interests would undermine the effectiveness and unmet needs of 
these programs.
    We believe our nation's prime forest resources are under a similar 
threat to development and subdivision as our prime farm and ranchlands. 
The Healthy Forest Reserve Program is typically deliberated within the 
forestry title where it is in contention with a huge number of public, 
state, and private forestry authorities, and only receives 
discretionary funding authority which has been minimal in recent years. 
We believe moving the HFRP authority into the conservation title, 
expanding it to include a component for entity-held easements, and 
providing mandatory funding can fill the forestry portfolio gap in 
conservation. Hopefully, with the infusion of IRA funding and the 
significant role forests play in overall climate and environmental 
health, the Committee will be able to take up this proposal without 
reducing the current farm bill mandatory funding levels for ACEP.
    The Forest Conservation Easement Program (FCEP) would be a 
successor to and an expansion of the existing Healthy Forests Reserve 
Program. FCEP's purpose is to keep private forest land in forest use 
through conservation easements that purchase development rights from 
private landowners to prevent conversion to non-forest uses while 
maintaining working forests, a key strategy for protecting the U.S. 
forest carbon sink.
    FCEP is designed to: (1) significantly improve and enhance the 
ability of the NRCS to effectively conserve working forests at scale 
through conservation easements; (2) prioritize keeping forests as 
forests, which will continue to provide a multitude of environmental, 
economic, and societal benefits; (3) help landowners restore, enhance 
and protect habitat for at-risk species while increasing carbon 
sequestration; and (4) provide landowners with two proven options for 
placing voluntary conservation easements on their land, with one held 
by the Federal Government and one held by eligible entities and land 
trusts. It accomplishes this via two program components: Forest Land 
Easements (modeled after Agricultural Land Easements under ACEP) and 
Forest Reserve Easements (as the successor to the Healthy Forests 
Reserve Program).
    The creation of FCEP will not modify ACEP and must not take money 
away from ACEP. The NRCS easement programs are an important tool for 
conserving our working lands and must be adequately funded. We believe 
Congress should significantly increase funding for ACEP in the 2023 
Farm Bill while establishing and funding, at a meaningful level, the 
Forest Conservation Easement Program.
Insert 2
          Mr. LaMalfa. . . . So I guess what we are really looking at 
        is that sometimes you are running into inflexibility or lack of 
        knowledge and so you got a hard-and-fast rule that doesn't 
        allow the type of things that would be actually beneficial and 
        towards the goals of the conservation but also help the farmers 
        thrive, and you are finding that you are running into a wall 
        sometimes?
          * * * * *
          Mr. LaMalfa. . . . So please, anybody on the panel that was--
        you are nodding your head, too--send your thoughts along as I 
        have run myself out of time here. But as we formulate the next 
        farm bill and these conservation programs, help us to build in 
        the flexibility and adaptability.

    Yes, the whole process for ACEP and RCPP easements has become 
cumbersome in approving and closing easements. What used to be a 6-8 
month process is now well over 18 months which is difficult for our 
farmers and ranchers to comprehend. Many of our member land trusts hold 
many more easements than those acquired through USDA funding. We think 
the Agricultural Land Easement program should provide as much 
flexibility as possible to the more experienced land trusts. One way to 
do that is through clarifying the certified entity program to 
streamline the implementation of entity-held easements for land trusts 
who meet certain criteria. Since being introduced into the farm bill in 
2008, only six entities have received certified status. We believe 
there is great opportunity to increase the number of trusted partners 
who meet certification criteria and leverage NRCS resources to help 
more landowners conserve their working lands. We believe that the 
certification process and the benefits that certified entities receive 
could be clarified and streamlined.
    In addition to that, we would like to see certified entities 
recognized across all NRCS easement programs including the Regional 
Conservation Partnership Program (RCPP). We believe RCPP is a logical 
place to allow more flexibility, especially with certified entities who 
have a proven track record of success in the program.
    Thank you for your time. We would be glad to provide additional 
information on any of the questions.
                                 ______
                                 
Supplementary Material Submitted by Shayne Wiese, Manager, Operations, 
 Wiese & Sons: Good Doin' Bulls; Member, Iowa Cattlemen's Association; 
             Member, National Cattlemen's Beef Association
Insert
          Mr. LaMalfa. . . . So I guess what we are really looking at 
        is that sometimes you are running into inflexibility or lack of 
        knowledge and so you got a hard-and-fast rule that doesn't 
        allow the type of things that would be actually beneficial and 
        towards the goals of the conservation but also help the farmers 
        thrive, and you are finding that you are running into a wall 
        sometimes?
          * * * * *
          Mr. LaMalfa. . . . So please, anybody on the panel that was--
        you are nodding your head, too--send your thoughts along as I 
        have run myself out of time here. But as we formulate the next 
        farm bill and these conservation programs, help us to build in 
        the flexibility and adaptability.

November 11, 2022

    Dear Rep. LaMalfa and Members of the House Agriculture Subcommittee 
on Conservation and Forestry:

    Agricultural producers, and specifically cattle producers, are 
often multi-generational. This means that we understand the land on 
which we operate, and how to improve efficiency, almost better than 
anyone. National conservation practice standards do well to take this 
into account, allowing flexibility for producer innovation and specific 
on-farm needs. However, lack of local personnel means that NRCS is 
unable to effectively implement these practices in a timely manner.
    As stated in my written testimony, I approached NRCS seeking cost-
share assistance for implementation of a water infrastructure project 
and gave up after a months-long waiting game. Often, when a farmer or 
rancher seeks cost-share, it's for a necessary project on their 
operation. In these instances, a producer does not have the luxury of 
waiting months to hear back from USDA.
    During the hearing, Ms. Berg from the National Association of Wheat 
Growers stated, ``Farming, as you know, is . . . each year's different. 
Each season's different. And it's not in a book somewhere.'' The same 
sentiment applies to cattle producers. We welcome opportunities for 
USDA staff to visit our farms and ranches; it's critically important 
for them to understand why some practices make more sense for producers 
to implement than others. For example, burning CRP for mid contract 
management on my farm would not have been a viable option for me this 
year. We're in the middle of a drought--why not encourage grazing as a 
management practice instead?
    Increases in personnel and reducing paperwork burdens are key to 
ensuring that NRCS can respond to cost-share applicants in a timely 
manner and provide more direct support through technical assistance to 
producers. As the Committee begins to work on the next farm bill, I 
urge Members to consider policies that will provide local staff as much 
flexibility as possible.
            Respectfully,

Shayne Wiese,
Rancher,
Iowa Cattlemen's Association,
National Cattlemen's Beef Association.
                                 ______
                                 
       Submitted Statement by Environmental Defense Fund, Et Al.*
---------------------------------------------------------------------------
    * Environmental Defense Fund, National Audubon Society, Theodore 
Roosevelt Conservation Partnership, and Trout Unlimited.
---------------------------------------------------------------------------
    The above-named conservation organization appreciate the 
opportunity to submit written testimony to the Conservation and 
Forestry Subcommittee after the productive hearing of September 20, 
2022 on reauthorization of the Farm Bill's Conservation Title. Our 
organizations are actively working with producers in the Colorado River 
Basin to both sustain their agricultural operations in the face of 
water scarcity and to improve working lands' resilience to drought. The 
overwhelming consensus from the September 20th hearing was the 
importance of meeting producers' needs with the reauthorization of the 
Conservation Title. Our organizations also support this focus. 
Particularly, we write today to emphasize the need expressed during the 
September 20th hearing:

   to reduce administrative barriers to producers' access to 
        conservation title programs; and,

   to increase effective, relevant technical assistance for 
        producers.

Below, we make several specific recommendations for the Subcommittee's 
consideration on both of these points.
    In addition, as Representative Tom O'Halleran (D-AZ, 1st Dist) 
raised during the hearing, drought is detrimental to Arizona's 
agricultural industry. Farmers and ranchers in Arizona and other 
western states need help with drought resilience practices. As hearing 
witness Nicole Berg, President, National Association of Wheat Growers, 
recounted as one example, drought can impact wetland plants growing on 
enrolled CRP (Conservation Reserve Program) acres, and producers need 
technical assistance in re-establishing good habitat conditions post-
drought. We believe that the Farm Bill's Conservation Title must 
include a focus on programs that can help farms, ranches, and private 
forest lands:

   be sustainable and adaptable to long-term droughts and 
        hotter and drier climates.
I. Producers' Needs in the West.
    The western United States' farms, ranches, and private forest lands 
are confronting new challenges that require immediate and long-term 
attention. It is undeniable that agriculture and forestry practices 
have inherent risks. But in recent years, the increasingly extreme 
weather patterns have become harsher and much more difficult to 
predict. This has increased the need for rapid mitigation and 
adaptation in the face of changing conditions. This is especially true 
in the Colorado River Basin, which has become hotter and drier relative 
to other parts of the West and is facing a more severe stored water 
shortage as a result.
    Farming and ranching in the Colorado River Basin provide a 
significant source of food supply for the entire country, and forests 
serve as the primary source of clean water and natural storage in the 
Basin's headwaters. However, higher temperatures and prolonged and 
extreme droughts in the Basin over the past 2 decades have exacerbated 
wildfire dangers in public forests and private lands, forced a number 
of ranchers to reduce herd size or exit ranching altogether, and 
required farmers to navigate significant threats from dry soils, pests, 
fires, and freezes, among others.
    Both farming and forestry systems need to build substantial drought 
mitigation and resilience to the changing conditions and realities of a 
hotter, drier climate. The Department of the Interior has a presence 
and role to help allocate and manage limited water supplies throughout 
the West. But Interior's programs alone are not enough to provide the 
drought mitigation and resilience that farming, ranching and forestry 
require to adjust to the changing conditions seen in the West. The Farm 
Bill's Conservation Title also plays an important role. Specifically, 
we urge the Subcommittee to:

   maintain Conservation Title baseline funding;

   maintain the Inflation Reduction Act's Conservation Title 
        funding through covered programs to support climate-smart 
        practices;

   maintain and improve implementation of the 2018 Farm Bill's 
        western-facing provisions; and

   provide drought resilience assistance to producers.
II. Key Concepts for Improving Producers' Access to Conservation Title 
        Funding and Technical Assistance.
    The 2018 Farm Bill created a highly-successful example of efficient 
delivery of applied conservation to producers with partners through the 
Conservation Innovation Grants' (CIG) new On-Farm Conservation 
Innovation Trials \1\ program. The $25 million in annual funding to the 
On-Farm Conservation Innovation Trials program goes directly to 
partners, which in turn provide technical assistance and payments to 
producers to implement innovative approaches on their lands. In 
contrast to the Regional Conservation Partnership Program (RCPP), the 
CIG On-Farm Trials program has rolled out smoothly, minimized 
administrative burdens on NRCS staff, partners, and producers, and has 
already created a track-record of success. In addition, the statutory 
authority for the CIG On-Farm Trials program is a model for amending 
the RCPP to reduce the complex administrative barriers and burdens of 
RCPP.
---------------------------------------------------------------------------
    \1\ https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/
programs/financial/cig/?cid=
nrcseprd1459039.
---------------------------------------------------------------------------
    RCPP, Regional Conservation Partnership Program: The new 
Salesforce-supported RCPP portal for application submission launched 
since the passage of the 2018 Farm Bill has added to the workload and 
time required to apply to RCPP. More significant, however, than the 
barriers to the application are the significant delays and time 
required to finalize funding award contracts between partners and the 
NRCS, particularly around the provision of Technical Assistance. 
Renewals of prior, successful RCPP proposals were given a streamlined 
process to receive a second round of funding under the 2018 Farm Bill, 
but instead encountered years-long delays. In short, RCPP, since the 
2018 Farm Bill, has increased administrative burdens on NRCS staff and 
partners alike, and, has failed to offer a streamlined approach to 
getting financial and technical assistance to producers. Our 
conservation organizations have proposed RCPP amendments to adopt the 
CIG On-Farm Trials contracting and administrative vehicles to 
streamline RCPP and enhance delivery of technical and financial 
assistance to producers. We look forward to discussion of these 
proposed amendments.
    P.L. 83-566, Watershed and Flood Prevention Operations: The 2018 
Farm Bill recognized the years-long process required to initiate and 
complete a required Watershed Plan before project implementation and 
construction for a ``P.L. 83-566'' project under the Watershed and 
Flood Prevention Operations program. An approach tried under the 2018 
Farm Bill was to authorize the Secretary to grant a discretionary 
waiver of a Watershed Plan where a Plan is ``unnecessary or 
duplicative,'' such as where environmental and cultural resource 
compliance activities have been completed by another Federal agency. 
Report language describes this waiver as intended to be used ``. . . 
for work which is categorically excluded from more significant USDA or 
other Federal agency review, or where adequate planning has already 
been conducted.'' No waivers have been awarded under this 2018 Farm 
Bill provision (as far as we are aware), and the availability of P.L. 
83-566 authority under RCPP has been under-utilized for such activities 
as small-scale stream restoration to promote drought resilience or 
multi-benefit irrigation efficiency projects with watershed health and 
drought resilience benefits. Modernizing the P.L. 83-566 statutory 
authority to prioritize these types of projects and resilience outcomes 
is another priority for improving program delivery to producers, 
especially in the West.
    Stand Alone Conservation Innovation Grant (CIG) On-Farm Trials: 
Make the CIG ``On-Farm Trials'' a fully-funded, stand-alone program on 
par with RCPP ($300 million/year) with a focus on reducing producers' 
risk from extreme weather events. This approach would fund and amplify 
partners' abilities to provide technical assistance, and in the West, 
specifically support priorities such as: range restoration/drought 
resilience through nature-based solutions; soil health improvement; and 
multi-stakeholder project planning/enhanced Technical Assistance for 
multi-benefit WME (Water Management Entity) irrigation system 
efficiency modernization. Support for the latter would produce projects 
that meet the statutory sideboards of ``watershed-wide water 
conservation,'' or ``fish and wildlife habitat benefits,'' or 
``environmental drought mitigation.'' In particular, CIG's could focus 
on solutions that bridge the economic gap between up-front transition 
costs and long-term economic benefits of adopting the types of 
practices outlined above to reduce producers' risk from extreme weather 
events, including flood, drought, and wildfire.
III. Key Concepts for Improving Producers' Resilience to Drought.
    CREP Drought Pilot: The 2018 Farm Bill created a drought CREP 
authority in Section 2202(e) (``Drought and Water Conservation 
Agreements'') to allow compensation for producers' reduction in 
consumptive water use. The Farm Service Agency (FSA) determined in its 
NEPA review that the FSA would not implement this discretionary 
authority. As drought conditions have deepened in the Colorado River 
Basin, Klamath, and other areas of the West, the importance and 
timeliness of this 2018 authority has become apparent. As western 
states consider actions to reduce consumptive water use, launching a 
CREP drought pilot could become a priority even before 2023 Farm Bill 
reauthorization. The CREP drought pilot should also potentially include 
more flexible arrangements to encourage CREP participation, such as 
expanding eligible land enrollment to encompass dryland agricultural 
uses or water-conserving crops, and to transition the CREP-enrolled 
lands to alternative agricultural or management uses that are 
sustainable over the long-term in light of water scarcity.
    Water Management Entities: The 2018 Farm Bill created a new EQIP 
provision authorizing ``water management entities'' (WME) to enter into 
EQIP contracts with NRCS to implement ``watershed-wide'' projects that 
``effectively conserve water'' and ``provide fish and wildlife habitat 
or provide for drought-related environmental mitigation'' through 
modernization of irrigation water delivery infrastructure. (codified at 
16 U.S.C. 3839aa-2(h)). Unfortunately, this new provision not only 
remains unsupported by technical assistance but there is little policy 
guidance on qualifying project types or how WME's can apply for EQIP 
funds. Based on a survey by Trout Unlimited and the Theodore Roosevelt 
Conservation Partnership of WME participants, other barriers include 
NRCS' failure to develop a streamlined application process, requiring 
applicants to obtain signatures from all water users/landowners within 
WME boundaries to support the application, and generally a lack of NRCS 
capacity/expertise in implementing the program.
    Water Conservation Practices: The 2018 Farm Bill directed the NRCS 
to make available to producers ``water conservation'' practices through 
EQIP, such as ``water conservation scheduling, soil moisture 
monitoring, transition to water-conserving crops, water-conserving crop 
rotations, or deficit irrigation.'' (16 U.S.C. 3839aa-2(h)). This 
directive remains unsupported by technical assistance. In addition, 
there is no policy guidance on qualifying EQIP conservation practice 
standards, or a call for CIG proposals, for example, to develop new 
conservation practice standards to implement the enumerated water 
conservation practices.
    Forestry Title_Prioritize Nature-Based Solutions: The Forestry 
Title presents opportunities to advance drought resilience strategies 
such as science-based forest management through reauthorization and 
increased funding for the Watershed Condition Framework, and nature-
based approaches, including restoration of source water wetlands and 
riverscapes. With regard to the Water Source Protection Program, the 
2023 Farm Bill could reauthorize the program, could specifically 
include stream, riparian, and wetland restoration within the definition 
of ``forest management activities'' under 16 U.S.C.  6542(e)(1), and 
reduce the match requirement to enhance program participation and 
accessibility.
    Rural Development Title_Nature-Based Approaches for Drought 
Resilience: While not in this Subcommittee's jurisdiction, we mention 
the opportunity to work with the Rural Development Title to align some 
drought resilience goals. The Rural Development Title establishes, 
amends, and reauthorizes programs administered by the Rural Development 
agency within USDA. Rural Development Title programs include, among 
other things, financial and technical assistance for rural water and 
wastewater infrastructure and rural economic development. One potential 
area of drought resilience alignment would be to amend rural water and 
waste wastewater programs to include green and natural infrastructure 
projects, and expanding the rural water circuit rider program to 
include technical support for natural infrastructure.
Conclusion
    We appreciate the Subcommittee's focus on reauthorization of the 
Conservation Title with producers' needs at its center. We hope this 
written testimony is helpful to the Subcommittee, particularly for 
meeting the needs of producers in the West. Our organizations look 
forward to working with Members and staff of the Subcommittee to 
further develop these key concepts and associated elements to support 
the drought resilience of working lands in the West.
                                 ______
                                 
                           Submitted Question
Question Submitted by Hon. Tom O'Halleran, a Representative in Congress 
        from Arizona
Response from Lori Faeth, Senior Director of Government Relations, Land 
        Trust Alliance
    Question. Ms. Faeth, in your testimony, you focused on your support 
of easement programs. You also referenced a 2018 report form Colorado 
State University that showed that landowners with an easement were more 
likely to change their agricultural practices to improve things such as 
irrigation.
    Could you explain how easements can help preserve groundwater?
    Answer. Our member land trusts acquiring and supporting USDA's 
easement programs set priorities for preserving the agricultural land 
and the opportunity for the land to continue in production not only 
economically but also environmentally for future generations.
    There is a great example of how easements can help preserve 
groundwater in the Williamson Valley in Arizona. The owner of Bar 
Triangle Ranch has placed an NRCS easement over 640 acres of his 
property. His goal is to place the entire 6,000 acre ranch under an 
agricultural easement, and he is working with the Central Arizona Land 
Trust to do so. The easement ties the water rights to the land, meaning 
it will be forever a part of the ranch and cannot be severed or 
transferred. That means the surface and ground water will be in place 
to the benefit of agriculture and the habitat. The benefits of 
easements are even evident on ranches with relatively low water use 
because it prevents the ranch from being converted to a higher water 
use such as a commercial or industrial property. There are other 
examples of easements protecting groundwater across the West and the 
country.
    Where irrigation is integral to the agriculture production system, 
we are supportive of continued improvement in the irrigation system's 
infrastructure and management to promote efficient water use for 
operation. Programs like Environmental Quality Incentives Program and 
Conservation Stewardship Program can be used to improve the efficiency 
and use of irrigation water delivery. We believe landowners of eased 
lands should have priority access to these programs.


 
                     A 2022 REVIEW OF THE FARM BILL

            (TITLE XII--DEPARTMENT OPERATIONS AND OUTREACH)

                              ----------                              


                      THURSDAY, SEPTEMBER 29, 2022

                          House of Representatives,
      Subcommittee on Nutrition, Oversight, and Department 
                                                Operations,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 9:31 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Jahana Hayes [Chairwoman of the Subcommittee] presiding.
    Members present: Hayes, McGovern, Brown, Carbajal, Lawson, 
Kuster, Panetta, DesJarlais, Baird, Cloud, Cammack, Finstad, 
and Thompson (ex officio).
    Staff present: Caitlin Balagula, Amar Nair, Lisa Shelton, 
Katherine Stewart, Caleb Crosswhite, Patricia Straughn, 
Jennifer Tiller, Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. JAHANA HAYES, A REPRESENTATIVE IN 
                   CONGRESS FROM CONNECTICUT

    The Chairwoman. This hearing of the Subcommittee on 
Nutrition, Oversight, and Department Operations entitled, A 
2022 Review of the Farm Bill: Title XII--Department Operations 
and Outreach, will come to order.
    Welcome, and thank you for joining today's hearing. After 
brief opening remarks, Members will receive testimony from our 
witnesses today, and then the hearing will be open to 
questions. Thank you to the Under Secretary and to the 
Administrator for joining today's hearing, which is another in 
our series of hearings to review the 2018 Farm Bill and prepare 
for the 2023 Farm Bill. I appreciate you both taking the time 
to be here and offer your expertise. I especially thank you for 
being here in person.
    During this hearing, we will hear from the USDA about the 
implementation of the 2018 Farm Bill provisions and the impact 
on Department operations and outreach programs like the 
Beginning Farmers and Ranchers Development Program. This is 
also an opportunity to learn how the COVID-19 pandemic and 
other events over the past 4 years have impacted the Department 
and these important programs. Today's testimony will be 
critical as we craft the 2023 Farm Bill and will help to ensure 
that we do so with an eye on how the structure and operations 
of USDA impact our nation's farmers, ranchers, and all those 
the Department serves.
    USDA is comprised of 29 agencies and offices with more than 
100,000 employees. And there are more than 4,500 USDA offices 
in the U.S. and across the world. Ensuring that Congress 
properly funds, supports, and oversees USDA operations so that 
the Department operates effectively, meaning both that it is 
fully staffed and its programs operate properly, is critical to 
maintaining the American food supply and feeding our nation for 
years to come. It is also critical to ensure that USDA's 
external-facing operations are running smoothly, and that USDA 
farm programs are reaching all of our country's producers, 
which is where the outreach programs serve a crucial role.
    We know our nation's producers are getting older. As of 
2017, more than \1/3\ of America's farmers were 65 or older. 
The average age of producers in the U.S. is about 58, up from 
previous years in the Agricultural Census, a continuing trend 
we have been seeing for some time. In Connecticut 5, which is 
my District, 32 percent of farmers are 65 or older, so we are 
doing slightly better than the nation as a whole. But, like the 
country, we are still in dire need of more new and beginning 
farmers.
    To strengthen the future of agriculture in America, it is 
important that USDA programs are accessible to all producers. 
Supporting our new and beginning farmers who are in the first 
10 years of operation is key to cultivating the future of 
American agriculture. Encouraging more people from every 
background to go into farming is also key to ensuring we have a 
strong agricultural system for many decades to come. That is 
why USDA outreach to underserved communities like farmers of 
color, women, veterans is critical to ensuring these 
communities have the resources they need to succeed.
    According to the 2017 Census of Agriculture, only 1.7 
percent of all producers identified as American Indian or 
Alaska Native, 0.6 percent identified as Asian, 1.3 percent as 
Black or African American, 0.1 percent as Native Hawaiian or 
other Pacific Islander, 0.8 percent as more than one race, and 
3.3 percent as Hispanic, Latino, or Spanish origin. Only about 
11 percent of farmers served in the military, and about 36 
percent of producers are women. We can and we must do better.
    I look forward to hearing more today about the programs 
that perform outreach into these communities, including the 
Outreach and Assistance for Socially Disadvantaged and Veteran 
Farmers and Ranchers Program, also known as Sec. 2501 Program 
and the Beginning Farmers and Ranchers Development Program, and 
how they support today's producers while cultivating the next 
generation of farmers.
    I want to thank again the Members and the witnesses for 
joining us today. I sincerely look forward to hearing today's 
testimony about the importance of USDA outreach programs and 
the status of Department operations issues, like staffing, IT, 
and much more.
    [The prepared statement of Mrs. Hayes follows:]

 Prepared Statement of Hon. Jahana Hayes, a Representative in Congress 
                            from Connecticut
    Thank you to the Under Secretary and to the Administrator for 
joining today's hearing, which is another in our series of hearings to 
review the 2018 Farm Bill and prepare for the 2023 Farm Fill. I 
appreciate you both taking time out of your schedules to us with your 
expertise.
    During this hearing, we will hear from USDA about the 
implementation of 2018 Farm Bill provisions and the impact on 
Department operations and outreach programs, like the Beginning Farmers 
and Ranchers Development Program. This is also an opportunity to learn 
how the COVID-19 pandemic and other events over the past 4 years have 
impacted the Department and these important programs.
    Today's testimony will be critical as we craft the 2023 Farm Bill, 
and will help to ensure that we do so with an eye on how the structure 
and operations of USDA impact our country's farmers, ranchers, and all 
those the Department serves.
    USDA is comprised of 29 agencies and offices with more than 100,000 
employees, and there are more than 4,500 USDA offices in the U.S. and 
across the world. Ensuring that Congress properly funds, supports, and 
oversees USDA's operations so that the Department operates 
effectively--meaning both that it is fully staffed and that its 
programs operate properly--is critical to maintaining the American food 
supply and feeding our nation for years to come.
    It is also critical to ensure that USDA's external-facing 
operations are running smoothly and that USDA's farm programs are 
reaching all of our country's producers, which is where the outreach 
programs serve a crucial role.
    We know our nation's producers are getting older. As of 2017, more 
than \1/3\ of America's farmers were age 65 or older. The average age 
of producers in the U.S. is about 58, up more than a year from the 
previous Agricultural Census, continuing a trend we have been seeing 
for a long time.
    In CT-5, my District, 32 percent of farmers are 65 or older, so we 
are doing slightly better than the nation as a whole, but like the 
country at-large, we are still in dire need of more new and beginning 
farmers.
    To strengthen the future of agriculture in America, it is important 
that USDA programs are accessible to all producers. Supporting our 
beginning farmers--farmers who are in their first 10 years of 
operation--is key to cultivating the future of American agriculture.
    Encouraging more people from every type of background to go into 
farming is also key to ensuring we have a strong agricultural economy 
for many decades to come. That is why USDA's outreach to underserved 
communities--like farmers of color and women and veteran farmers--is 
critical to ensuring these communities have the resources they need to 
succeed.
    According to the 2017 Census of Agriculture, only 1.7 percent of 
all producers identified as American Indian or Alaska Native, 0.6 
percent identified as Asian, 1.3 percent as Black or African American, 
0.1 percent as Native Hawaiian or other Pacific Islander, 0.8 percent 
as more than one race, and 3.3 percent as of Hispanic, Latino, or 
Spanish origin. Only about 11 percent of farmers served in the military 
and about 36 percent of producers were women. We can do better!
    I look forward to hearing more today about the programs that 
perform outreach to these communities, including the `Outreach and 
Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers 
Program'--also known as the 2501 Program--and the Beginning Farmer and 
Rancher Development Program, and how they support today's producers 
while cultivating the next generation of farmers.
    Thank you again to our Members and witnesses for joining us today. 
I sincerely look forward to hearing today's testimony about the 
importance of USDA outreach programs and the status of Department 
operations issues, like staffing, IT, and much more.

    The Chairwoman. Unfortunately, our Ranking Member from 
Nebraska, Mr. Bacon, is unable to join us today. We wish him 
well and hope that he is feeling better. I am sure that he will 
be tuned in, and if he has questions, he will reach out. I now 
recognize Chairman Scott if he is here for any opening comments 
that he would like to make. I don't believe the Chairman is 
here, so I will recognize the Ranking Member, Mr. Thompson, if 
you would like to make any opening remarks.

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

    Mr. Thompson. Well, good morning, everybody. And thank you, 
Chairwoman Hayes, for hosting this hearing to discuss the 
Miscellaneous Title of the farm bill. And while Title XII is 
literally a large title that includes a variety of provisions, 
we are focused today on a few select provisions that impact 
Department operations and outreach. And as we prepare for the 
next farm bill, it is important to ensure young, beginning, 
socially disadvantaged, and veteran farmers know about and have 
access to USDA programs and the benefits they provide.
    If we are serious about restoring a robust rural economy, 
it is important to evaluate the programs and outreach that 
impact our farmers, ranchers, foresters, and those living in 
rural America, or, as I like to call it, essential America 
because everything that a family needs--and whether they live 
down a country lane or in a densely populated city, those 
things that are essential come from that part of our nation and 
families, the hardworking families that provide it.
    And I look forward to hearing from USDA about how they are 
implementing some of the new positions and existing programs 
authorized in the 2018 Farm Bill. I would like to thank Under 
Secretary Jacobs-Young and Administrator Ducheneaux for taking 
the time to be with us today. Dr. Jacobs-Young, I look forward 
to having you back before the Committee to talk about the 
important work you are spearheading in the Research, Education, 
and Economics mission area as well.
    So, with that, Madam Chairwoman, thank you so much, and I 
yield back.
    The Chairwoman. Thank you, Mr. Thompson.
    The chair would request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony and to ensure there is ample time for questioning.
    Today, we are joined by two witnesses from USDA. Our first 
witness is Dr. Chavonda Jacobs-Young, the Under Secretary for 
Research, Education, and Economics, or REE, and Chief Scientist 
at USDA. Prior to being confirmed as REE Under Secretary, Dr. 
Jacobs-Young served in various roles at USDA for 2 decades, 
including most recently as Administrator for USDA's 
Agricultural Research Services from 2014 to 2022. Dr. Jacobs-
Young holds a B.S., an M.S., and a Ph.D. from North Carolina 
State University and was the first Black woman in the U.S. to 
earn a doctorate in wood and paper science.
    Our second witness is Mr. Zach Ducheneaux, the 
Administrator of the Farm Service Agency at the U.S. Department 
of Agriculture. Mr. Ducheneaux previously served as the 
Executive Director of the Intertribal Agricultural Council, an 
organization he worked at for over 2 decades. His family 
operates a fourth-generation ranch in the Cheyenne River Sioux 
Reservation.
    Welcome to our witnesses today. We thank you so much for 
being here. We will now proceed to hearing your testimony. You 
will each have 5 minutes. The timer should be visible to you 
and will count down to zero, at which point your time has 
expired. Dr. Jacobs-Young, please begin when you are ready. You 
have 5 minutes for testimony.

STATEMENT OF HON. CHAVONDA JACOBS-YOUNG, Ph.D., UNDER SECRETARY 
                 FOR RESEARCH, EDUCATION, AND 
ECONOMICS AND CHIEF SCIENTIST, U.S. DEPARTMENT OF AGRICULTURE, 
                        WASHINGTON, D.C.

    Dr. Jacobs-Young. Chairwoman Hayes, Ranking Member Bacon, 
and Members of the Committee, thank you for the opportunity to 
come before you today to discuss Title XII of the farm bill. As 
Under Secretary for the United States Department of 
Agriculture's Research, Education, and Economics mission area, 
I am excited to be here today to discuss REE's equity and 
outreach efforts.
    The REE mission area is rooted in partnerships, 
partnerships with technical assistance providers, including the 
Cooperative Extension System, that gives producers the tools 
they need to adapt as they feed the world; with institutions to 
support the next generation of agricultural scientists; and 
with Congress to ensure that decision-makers have the tools 
they need to support farmers or ranchers across the country.
    Production agriculture requires constant innovation and 
adaptations as farmers and ranchers pursue climate-smart 
solutions to extreme weather, rural businesses seek markets, 
and underserved communities seek trusted partners to tackle 
systemic issues. Outreach and access to information underpins 
each of these objectives, and when appropriately resourced, REE 
is well-positioned to be a partner in providing timely 
outreach, research, training, extension, and economic analysis 
to support informed decisions.
    The challenges faced in agriculture, human and animal 
health, food supply, and conservation are immense, and helping 
producers tackle these issues is critical. We must meet those 
challenges head on and need a robust and diverse agricultural 
workforce to do so and leverage existing partnerships to help 
achieve that outcome. First, this means ensuring that the REE 
workforce feel supported and able to carry out their mission to 
provide outreach to producers. REE faced significant staff 
losses over the past 5 years, and rebuilding that capacity is a 
key priority for the mission area. It has never been more 
critical to restore our employees' voices and support their 
efforts to advance the agency's mission.
    The President and Secretary have both been very clear: This 
new workforce must look like America, particularly to ensure 
that we are conducting equitable outreach to producers. 
Investing in inclusion, diversity, and inspiring future 
generations through formal and informal learning is critical 
for the future. As an agricultural scientist myself, I know 
that talent must be inspired, nurtured, and advanced across the 
country if the United States is to maintain its global 
leadership in science and technology.
    That is why Secretary Vilsack recently announced $250 
million for minority-serving institutions that create career 
development opportunities in agriculture through the From 
Learning to Leading: Cultivating the Next Generation of Diverse 
Food and Agriculture Professionals, and we call it the NEXTGEN 
program. This competitive program opportunity made possible 
through investments provided in the American Rescue Plan Act 
(Pub. L. 117-2), ARPA Section 1006, as amended by Section 22007 
of the Inflation Reduction Act (117-169), is aimed at 
attracting, inspiring, and retaining diverse and talented 
students at minority-serving institutions for careers in food, 
agriculture, and related disciplines with an emphasis on 
Federal Government sector employment.
    USDA is dedicated to ensuring equity across its agencies 
and developing a diverse workforce. At REE we know that 
supporting 1890 land-grant universities is vital to make a 
strong, life-changing impact towards Secretary Vilsack's 
vision. In Fiscal Year 2021, the National Institute of Food and 
Agriculture administered 16 programs specifically for minority-
serving institutions, with over $250 million in funding and 
over $974 million in total grant awards to 1890 institutions in 
the past 5 years.
    The Beginning Farmer and Rancher Development Program is a 
key component of NIFA's Title XII outreach. This program 
provides unique educational training and assistance and 
outreach opportunities to help ensure that there will be a next 
generation of farmers and ranchers, regardless of age or 
production choice.
    In my time leading REE and in my 20 years in Federal 
service, I have had the opportunity to travel across the 
country and meet with many of the people we serve. I have 
witnessed states in every region of the country and many of 
your districts meeting with the people you represent. They are 
optimistic about the future of agriculture, and so am I. 
President Biden, Secretary Vilsack, and REE are poised to 
support transformation in agriculture. We can meet and expand 
our commitment to leveling the playing field for farmers and 
ranchers as they work to feed the world, and I look forward to 
working with the Subcommittee and full Committee to support 
this mission.
    [The joint prepared statement of Ms. Jacobs-Young and Mr. 
Ducheneaux follows:]

 Joint Prepared Statement of Hon. Chavonda Jacobs-Young, Ph.D., Under 
 Secretary for Research, Education, and Economics and Chief Scientist, 
  U.S. Department of Agriculture, Washington, D.C.; Zach Ducheneaux, 
  Administrator, Farm Service Agency, U.S. Department of Agriculture, 
                            Washington, D.C.
    Chairwoman Hayes, Ranking Member Bacon, and Members of the 
Committee, thank you for the opportunity to come before you today to 
discuss Title XII of the farm bill with a specific focus on the 
Department's equity and outreach efforts. As the Under Secretary for 
the United States Department of Agriculture's Research, Education, and 
Economics (REE) mission area and the Administrator of the Farm Service 
Agency, we have seen the commitment of our staff across the nation, 
from our employees who work directly with Indian Country to our staff 
working in the Deep South, each coast, and many places in between. We 
have witnessed, firsthand, our employees' commitment to providing 
equitable access to and delivery of USDA programs and services 
including our farm loan programs, standing and ad hoc disaster 
assistance programs, partnerships with Minority-Serving Institutions, 
and commitment to developing a diverse workforce.
    Production agriculture requires constant innovation and adaptation 
as farmers and ranchers pursue climate-smart solutions to extreme 
weather, rural businesses seek new markets, and underserved communities 
seek trusted partners to tackle systemic issues. Access to information 
and outreach underpins each of these objectives, and REE and FSA are 
well-positioned to be partners in providing timely research, tools, 
extension, and technical support producers need.
    We know that family farms and ranchers want to stay on their land, 
like they often have for generations. That's why we are pleased that 
President Biden and Secretary Vilsack are strongly committed to 
supporting equitable outreach to producers, which we believe will 
define agriculture for coming decades. In August, the Department 
announced availability of up to $550 million in American Rescue Plan 
Act funding to support projects that enable underserved producers to 
access land, capital, and markets, and train the next diverse 
generation of agricultural professionals. These provisions aim to help 
ensure underserved producers have the resources, tools, programs, and 
technical support that they need to succeed.
National Institute of Food and Agriculture (NIFA)
    The challenges facing agriculture, human and animal health, food 
supply and conservation are immense, and helping producers tackle these 
issues is critical. We must meet those challenges head on and need a 
robust and diverse agricultural workforce to do so and leverage 
existing partnerships to help achieve that outcome.
    First, this means ensuring that the REE workforce feels supported 
and able to carry out their mission to provide outreach to producers. 
REE faced significant staff losses over the past 5 years, and 
rebuilding that capacity is a key priority for the mission area. 
Rebuilding capacity will improve our ability to support the nation's 
farmers, producers, and consumers from the farm to the dinner table. 
It's never been more critical to restore our employees' voices and 
support their efforts to advance the Agency's mission. The President 
and Secretary have both been very clear--this new workforce must look 
like America, particularly to ensure that we are conducting equitable 
outreach to producers. Investing in inclusion, diversity, and inspiring 
future generations through formal and informal learning is critical for 
the future. As an agricultural scientist myself, I know that talent 
must be inspired, nurtured, and advanced across the country if the 
United States is to maintain its global leadership in science and 
technology. That's why Secretary Vilsack recently announced $250 
million for Minority-Serving Institutions that create career 
development opportunities in agriculture for the From Learning to 
Leading: Cultivating the Next Generation of Diverse Food and 
Agriculture Professionals (NEXTGEN) program. This competitive funding 
opportunity, made possible through investments provided in the American 
Rescue Plan Act (ARPA) Section 1006, as amended by Section 22007 of the 
Inflation Reduction Act, is aimed at attracting, inspiring, and 
retaining diverse and talented students at minority-serving 
institutions for careers in food, agriculture, and related disciplines, 
with an emphasis on Federal Government sector employment. USDA is 
dedicated to ensuring equity across its agencies and developing a 
diverse workforce at all levels.
    At NIFA, we know that supporting 1890 Land-grant Universities is 
vital to making strong, life-changing impact toward Secretary Vilsack's 
vision. In Fiscal Year 2021, NIFA administered 16 programs specifically 
for Minority Serving Institutions with over $250 million in funding; 
and over $974 million in total grant awards to 1890 Institutions in the 
past 5 years. Our 1890 Scholarship program has also invested over $19 
million to support undergraduates majoring in food and agriculture-
related degree programs to increase the Next Gen Workforce in food and 
agriculture. In addition to the scholarships, NIFA also provided $6 
million in support of four Centers of Excellence and more than $20 
million in recent capacity-building grants, ensuring our 1890 
Institutions will continue to make major advancements in research, 
education and Extension. In May, we announced another $4 million 
investment in two additional 1890 Centers of Excellence.
    The Beginning Farmer and Rancher Development Program is also a key 
component of NIFA's Title XII outreach. This program provides unique 
educational, training assistance and outreach opportunities to help 
ensure there will be a new generation of farmers and ranchers--
regardless of age or production choice. During Fiscal Year 2021, NIFA 
awarded over $50 million for 85 newly funded grants and 55 continuation 
Beginning Farmer and Rancher Development Program projects. NIFA is also 
home to the Enhancing Agricultural Opportunities for Military Veterans 
Program, which provides grants to nonprofit organizations to increase 
the number of military veterans gaining knowledge and skills through 
comprehensive, hands-on and immersive model farm and ranch programs. 
The program encourages the development of training opportunities 
specifically designed for military veterans. AgVets projects offer 
onsite, hands-on training and classroom education leading to a 
comprehensive understanding of successful farm and ranch operations and 
management practices. Projects may also offer workforce readiness and 
employment prospects for service-disabled veterans as well.
Farm Service Agency
    As we continue to increase and improve access to programs and 
services, FSA has identified and taken advantage of opportunities to 
advance equity through our programs and services. We began by 
establishing an Equity Officer position which sits in the 
Administrator's Office. This position provides guidance and the 
equitable review of the Agency's overall programs and services, 
including farm program and farm loan program implementation, along with 
agency efforts focused on supporting and uplifting urban agriculture, 
beginning farmer and ranchers, heirs' property and fractionated land 
issues, and Justice40. The Justice40 Initiative aims to ensure that 
Federal investments benefit communities that are marginalized, 
underserved, and overburdened by the effects of climate change and 
underinvestment. The Equity Officer also helps guide the Administrator 
in ensuring our County Committees approach their work with an equity 
lens; supporting diverse hiring, recruitment, and retention; and 
improving the customer experience of all producers who seek assistance 
from the FSA. In addition to the Equity Officer, FSA will have six 
equity analysts working in our Outreach Office. These individuals will 
also work with the Equity Officer and FSA Outreach Director as they 
work to integrate into their respective Deputy Administrator areas at 
FSA. Collectively they will:

   conduct data analysis to ensure programs are administered 
        equitably;

   participate in the development of programmatic policies and 
        procedures to avoid unintended consequences in program outreach 
        and delivery; and

   provide detailed analyses of recruitment and retention 
        efforts to ensure the continuation of the best work force in 
        the Federal Government.

    We've already mentioned FSA's Outreach Office. This office plays a 
crucial role in coordinating and implementing our Agency-wide 
activities. These include not just our outreach efforts but also our 
technical assistance, education, and producer engagement efforts. The 
FSA Outreach Office also administers millions of dollars in cooperative 
agreements and partnerships with stakeholders. Our goal is to increase 
producer participation in FSA programs, with targeted outreach to 
underserved producers and communities including minority, young, and 
beginning farmers, ranchers, landowners, and operators who have not 
participated in or have received limited, and sometimes, zero benefits 
from FSA programs. This level of targeted outreach will improve and 
increase access to and participation in FSA, and even other USDA 
agencies' programs.
    One of the many ways we have implemented targeted outreach is 
through our work across FSA to support beginning farmers and ranchers. 
At FSA, and throughout USDA, we understand that ensuring the success of 
beginning farmers and ranchers is critical to the future of the 
agriculture industry. USDA has a long history of recruiting and 
supporting the next generation of farmers and ranchers, especially the 
viability of beginning farmers and ranchers. FSA supports this work by 
providing dedicated staff to support field employees in reaching new 
farmers, providing ongoing trainings to employees, creating educational 
materials targeting beginning farmers, and by collaborating with 
agencies to reduce barriers to program participation.
    This work is underscored by the announcement of our most recent 
land access program--the Increasing Land, Capital, and Market Access 
Program, through which FSA will administer up to $300 million in grants 
and cooperative agreements as authorized by the American Rescue Plan 
Act Section 1006, as amended by Section 22007 of the Inflation 
Reduction Act. Through this program FSA will fund land access projects 
that help underserved producers by increasing their land access, 
capital access, and/or market access.
    We'll conclude with this: what we have provided is only a brief 
look into the work we are doing at FSA to ensure equity and increase 
and improve outreach. We have a full suite of projects and programs 
that are either currently in the works or will soon be established to 
meet the diverse needs of our producers and stakeholders. Whether we 
are addressing Taxpayer Education, utilizing Limited English 
Proficiency tools to connect with producers, or expanding our programs 
to meet the needs of urban and suburban producers, FSA is excited about 
the incredible work our dedicated staff at headquarters and across the 
nation conduct daily to reach current and future FSA and USDA 
customers.
Conclusion
    In our time leading our respective agencies, we have had the 
opportunity to travel across the country and meet with many of the 
people we serve. We have visited states in every region of the 
country--including in many of your districts--and met with the 
producers and communities you represent. They are optimistic about the 
future of agriculture, and so are we. President Biden, Secretary 
Vilsack, our mission areas, and the rest of the team at USDA are all 
poised to support a transformation in agriculture--through which we can 
meet and expand our commitment to leveling the playing field for 
farmers and ranchers as they work to feed the world. I look forward to 
working with the Subcommittee and full Committee to support this 
mission.

    The Chairwoman. Thank you.
    Mr. Ducheneaux, when you are ready, you can begin your 
testimony. You have 5 minutes.

   STATEMENT OF ZACH DUCHENEAUX, ADMINISTRATOR, FARM SERVICE 
    AGENCY, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

    Mr. Ducheneaux. Thank you. Chairwoman Hayes, Ranking Member 
Bacon, Members of the Subcommittee, it is truly an honor and a 
privilege to appear before this august body as your Farm 
Service Agency Administrator and to visit about the work that I 
have the further honor and privilege to lead. I am Zach 
Ducheneaux, and I have been in this role since February of 
2021. Prior to this, I was the third generation on my family's 
ranch on the Cheyenne River Sioux Reservation, and I am proud 
to have raised the fourth generation on the ranch and even 
prouder to have recently welcomed the fifth generation to that 
same place where my ancestors lived and produced food since 
time immemorial.
    As a former rancher and a lifelong advocate for underserved 
people, I have approached my work at the FSA with a personal 
understanding of where we have room for improvement and also 
some of the places where, through partnerships, we can double 
and triple the impact of our work, particularly in underserved 
communities. By bringing new producers and partners into the 
fold, we can move towards the goals that we all should share, 
to help producers access more and better markets, to build 
resilience, to mitigate the market impacts that linger after 
what we hope is a once-in-a-generation pandemic, to quickly 
recover from the more frequent and more severe natural 
disasters, and to be part of a climate solution through a 
strength that is inherent in diversity of people, production, 
ideas, and solutions.
    I have had the good fortune to visit with our FSA employees 
across the country, and in every county office, I have tried to 
take time to listen and gain more understanding of the passion 
that drives them as they work tirelessly to deliver our ad hoc 
pandemic and disaster assistance programs, to say nothing of 
their normal role in providing vital standing programs and 
services. I have witnessed firsthand many of our employees' 
commitment to providing equitable access to and delivery of 
USDA programs and services across rural, urban, and suburban 
communities. Looking ahead, my goal is to weave the ethic of 
equity into the DNA of the Farm Service Agency so that it is 
organic in every interaction we have with producers, every 
program we deliver, and every service we provide.
    I would be doing a great disservice if I didn't use a 
portion of this time with you to thank our staff for their 
tireless efforts and to encourage all of you to do the same the 
next time when you are back in your district, driving by one of 
our over 2,100 county offices. I am pleased to share some of 
the work with you that we are doing now.
    First, equity starts at the top. That is why under the 
leadership and guidance of Secretary Vilsack we have 
established an Equity Officer position in the Administrator's 
office. Latrice Hill brings decades of experience to this role 
and significant expertise, and I look forward to working with 
her to make sure that my office is helping to guide the 
equitable review of every aspect of our work.
    In addition, we will also have six equity analysts working 
in the outreach office who will work with the Equity Officer 
and the Outreach Director to bring this important effort closer 
to the producers through immersion in each of our Deputy 
Administrator areas here at the Farm Service Agency. That 
outreach office also plays a critical role in coordinating and 
implementing agency-wide activities. These include not just our 
own outreach efforts but also support technical assistance, 
education, and producer engagement efforts through millions of 
dollars in cooperatives agreements, partnerships with 
stakeholder groups of all kinds.
    Our goal is to increase producer participation in our 
programs, with targeted outreach to underserved producers and 
communities, including women, veterans, minority, young and 
beginning producers who have not participated in or receive 
limited and sometimes zero benefits from our programs.
    Currently, at the direction of Congress, the office is at 
various stages of implementing historic levels of agreements, 
programs, and opportunities in the next fiscal year that will 
have hundreds of millions of dollars of impact. Of note, 
Section 1006 of the American Rescue Plan Act authorized over $1 
billion for the Secretary of Agriculture to provide assistance 
and support for underserved producers through technical 
assistance and cooperative development training. From this 
funding, FSA has established the Increasing Land, Capital, and 
Market Access Program, providing up to $300 million to work 
with stakeholder groups and advanced system changing solutions 
to improve access to land capital and markets for underserved 
producers.
    Because our workforce should reflect the producers we serve 
and the next generation of leaders that we hope to cultivate, 
we have expanded our use of special hiring authorities and 
implemented several new recruitment efforts. This year, FSA is 
funding scholar and intern programs with targeted outreach to 
our 1890 and 1994 land-grant institutions, in addition to our 
existing Pathways Student Internship Program, where 
participation has also markedly increased in the last year.
    There are many more efforts underway that I hope to visit 
with you about, and I thank you again for the opportunity to be 
here in front of this body.
    The Chairwoman. Thank you both so much for your testimony.
    At this time, Members will be recognized for questioning in 
order of seniority, alternating between Majority and Minority 
Members. You will each be recognized for 5 minutes in order to 
allow us to get to as many questions as possible. Please keep 
your microphones muted until you are recognized so that we can 
minimize background noise.
    I now recognize Chairman McGovern. You have 5 minutes for 
questioning. You may begin.
    Mr. McGovern. Well, thank you very much. And thank you to 
our witnesses for joining us today. And Chairman Hayes, again, 
thank you for convening this hearing.
    Title XII doesn't often get the spotlight, but it gets to 
the heart of how we can build a more just and inclusive food 
system. How ambitious we are about empowering farmers, 
especially those who are new to agriculture or have 
historically not had a seat at the table, will be a key measure 
of whether the next farm bill is a success.
    So, I want to focus my time on USDA's outreach efforts. And 
I appreciate that both of our witnesses affirmed that it is a 
priority for the Department. In August, I hosted my annual 
district farm tour, visiting over a dozen Massachusetts farms 
over 2 days and hearing directly from our farmers. Something 
that came up at every farm was the challenge of applying to 
USDA or state programs. Farmers, especially small farmers, have 
so much on their plate. And even if they are perfect candidates 
for a USDA grant or cooperative agreement, even if they know 
about the existence of a program, they may not have the 
capacity to engage in the application process.
    So, I have two questions for both of you. First, could you 
please elaborate on the ways that USDA is working to expand 
outreach efforts, especially to small, independent, diversified 
operations, beginning farmers, and socially disadvantaged 
farmers? And second, do you believe that there are holistic 
changes that we can incorporate into the next farm bill to 
expand programming accessibility?
    Dr. Jacobs-Young. Thank you for the question, 
Representative McGovern. And yes, it is so important for us to 
be on the ground and working and witnessing the producers and 
learning from them what their highest priorities are. We have 
been very fortunate to receive funding from Congress that has 
supported us in our efforts to increase the amount of technical 
assistance and outreach that we give to these small farmers. I 
just spent last Monday, Monday of last week, I did a small 
conference, a small farmers conference in Hattiesburg, 
Mississippi, talking to a group of small farmers and learning 
from them what their highest priorities are. And you are 
absolutely correct. And these organizations that we are 
partnering with, with new funding, are helping us reach out to 
those farmers to learn more about the programs and services 
that we have at USDA and providing that technical assistance 
and bridging the gap between their day-to-day experiences and 
the services that they are eligible for. And so, I think that 
that is a very important point. And I know the Administrator 
here with his agency are doing a lot of work on the ground, and 
so I am going to turn to the floor to Zach.
    Mr. Ducheneaux. Thank you. Very good question. My 
background is in outreach and technical assistance. And the 
reality is many of our stakeholders do not have the capacity to 
leverage the trust that they have built in their communities of 
stakeholders to help them get into our programs. You are 
exactly right. Our programs often miss folks that are ideally 
situated to be those that we serve.
    One of the things that we are doing to address that is to 
engage in multiyear agreements with these cooperators so that 
they know that they will be able to bring that staff on that 
can help us with that outreach effort, retain them, and train 
them as we work to meet producers where they are at, at the 
agency. We are streamlining our processes. We are reducing the 
size of our farm loan application, which is critical to 
producers being able to get in there and participate 
meaningfully. And we are exploring all of the flexibility that 
we can within all of our programs in order to try to meet the 
need of those particular producers, who we should be reaching 
out more to serve.
    Mr. McGovern. Thank you very much. I yield back, Madam 
Chairwoman.
    The Chairwoman. Thank you, Chairman McGovern.
    I now recognize the gentleman from Pennsylvania. Mr. 
Thompson, you have 5 minutes for questioning.
    Mr. Thompson. Thank you, Madam Chairwoman. Administrator 
Ducheneaux, thank you so much for your leadership and for your 
staff. As I travel around the country from time to time, I stop 
in and cold call FSA offices. I don't really introduce myself 
until I find out what they think. But then I always take the 
time to thank them for what they do, all of our USDA offices. I 
appreciate that staff.
    I would like to discuss the role of the FSA county 
committees. From my perspective, my constituents and people I 
talk with across the country generally like having some of 
these decisions made at the local level rather than relying on 
a state officer or, worse yet, Washington having to adjudicate 
issues that they may have. Can you speak to the role that FSA 
county committees play in delivering FSA programs, and do you 
have thoughts on the Equity Commission's recommendation that 
USDA should consider termination of the county committee 
system?
    Mr. Ducheneaux. Thank you, Ranking Member Thompson. As I 
have gone around the country in the last year and a half, I 
have been a staunch proponent of participation in this 
opportunity. To me, in the county committee system, I see an 
opportunity for our producers to be a meaningfully part of the 
process of delivery of our programs and services. The 
challenges in some of our communities where producers don't 
have historic access to those programs, they are not able to 
get on the ballot and get selected to serve there. We are 
working with our counterparts and the Deputy Administrator for 
Field Operations to examine how we can improve outreach to 
producers so that they are aware of that opportunity to serve 
and share in that. I don't think that exists anywhere else in 
the Federal Government, so it is really a unique opportunity 
that we should capitalize on.
    With respect to the Equity Commission's recommendation, I 
haven't seen it verbatim, but I understand that it asks about 
an analysis of what a world without county committees would 
look like. And the work that the Equity Commission is engaged 
in is at the direction of Congress, and their job is to take an 
outside look at the realities of the delivery of services all 
across the Department. And I think they are even reaching 
broader than that, looking across the Federal Government to see 
how the work and equity can be amplified.
    Given that, and the fact that it is chartered by Congress, 
we will give every recommendation that they make due 
consideration and try to find a way to improve the work that we 
do to get at the ultimate end goal for all of us, which is 
equitable participation, equitable delivery of services, and 
equitable representation on the county committees.
    Mr. Thompson. Yes, which I see--eliminating county 
committees, that eliminates opportunities for people, more 
diverse individuals to be a part of those positions, you 
concentrate power at the state level, or here in Washington, it 
is just counterintuitive to what this--I find it hard to 
believe the Equity Commission came up or is even talking about 
that as a proposal.
    I would be remiss if I didn't recognize the role that land-
grant universities play in creating the next generation of 
agriculturalists and providing outreach to the agriculture 
industry. I had the privilege over the past couple of weeks of 
visiting a couple of schools, one on the East Coast, one in 
Texas, and it is just impressive, the amount of the quality of 
individuals, not just the faculty, but certainly with students, 
graduate and undergraduate.
    So, while some states have only one land-grant university, 
other states have two or three. Under Secretary, can you talk 
about how these land-grant universities coordinate with USDA to 
ensure producers in every corner of every state can be reached?
    Dr. Jacobs-Young. Absolutely. In recognizing our 
partnership with USDA and the land-grant university system, we 
were actually created to be partners, long-term partners over 
150 years ago. And the big jewel we have in the United States 
that I have talked with many international colleagues about is 
the Extension Service. So, we conduct research. ARS, NIFA 
provide funding for research. Land-grant universities produce a 
lot of research. And Extension Service and the partners and the 
cooperatives that they have take all of that research and they 
translate it into tools that people can use. And so, it is a 
beautiful system when it is properly resourced and it works, 
that we have I would say the full supply chain of conducting 
the research and disseminating it to the producers in every 
corner of this country.
    Mr. Thompson. Yes, it seems like while some program and 
research stays within the halls of the university at the end of 
the day, that is not agricultural research. It almost without 
exception goes for the greater good. So, thank you so much.
    Dr. Jacobs-Young. Right.
    Mr. Thompson. Thank you, Madam Chairwoman.
    The Chairwoman. Thank you, Ranking Member Thompson.
    I now recognize the gentleman from California, Mr. 
Carbajal. You have 5 minutes for questioning.
    Mr. Carbajal. Thank you, Madam Chairwoman. And thank you, 
Dr. Jacobs-Young and Administrator Ducheneaux, for your 
testimony today. And thank you for the great work you do for 
our country, day in and day out.
    USDA offers so many beneficial programs and grants to 
farmers and ranchers. These programs aren't very helpful if 
people don't know about them. I am glad to hear about the work 
being done through the Beginning Farmers and Ranchers 
Development Program. It is obviously very vital that we prepare 
the next generation of farmers, especially for beginning, 
underserved, and veteran farmers. However, it is equally 
important that existing farmers and ranchers are also aware of 
the programs and resources available at the USDA.
    Administrator Ducheneaux, Section 12306 of the 2018 Farm 
Bill provided additional support for veteran farmers across 
USDA programs, including FSA down payment loans, reduced 
interest rates on guaranteed loans, and increased coverage 
under the Emergency Assistance for Livestock, Honeybees, and 
Farm-Raised Fish Program, ELAP. I know that is a mouthful. 
Earlier this year, FSA issued a final rule implementing some of 
those adjustments. Can you please speak to any improved 
outcomes that you have seen for veterans as a result? And are 
there other ways that Congress and USDA can better support 
veteran farmers and producers?
    Mr. Ducheneaux. Yes, sir, and thank you for the question. 
This one is really near and dear to me. My father was a veteran 
of the Marine Corps, and I have had a chance to work with a lot 
of the veteran farmers and ranchers across the country. I 
worked very closely with Gary Matteson at the National Veteran 
Farmer Coalition. One of the challenges that we have with 
regard to serving underserved populations like veterans, 
minorities, and what have you, we don't have any programs 
within FSA that are specifically designed for their unique 
circumstances. We will set aside some of our funding for those 
programs, but they still have to come in the door and qualify 
just like everybody else, on the same terms as everybody else.
    And with respect to veterans, sir, we did make those 
announcements about the ELAP program. And I am not going to go 
through the whole jargon there that you did, but I agree that 
is a challenging mouthful to say. We had a veteran call us. He 
is a Vietnam veteran. And he said, ``You did this additional 
benefit to veterans.'' And this is in our forage hauling that 
we announced last year to help producers mitigate the impacts 
of the drought. He said, ``But, I am being told I don't 
qualify.'' So, I thought, well, that seems like a really simple 
fix. So, I went to work, and I worked with OGC and the 
Department, and it turns out we can't fix that. There is a 
statutory prohibition that limits our ability to address 
veteran issues in those programs. They have to be a veteran 
within the last 10 years, have to be no more than 10 years in 
farming or brand new to farming. So, for some of the existing 
veterans, it is really challenging to participate. But we guide 
our staff to treat everybody as though we need them in the 
building to work. We are pushing our boundaries for inclusion 
and not exclusion, so we were able to find other ways to help 
veterans who don't meet those three criteria in that section of 
the code.
    Mr. Carbajal. Thank you. Administrator Ducheneaux, can you 
also speak to the current outreach FSA does to existing farmers 
to make them aware of the programs and the resources offered by 
USDA, especially after a major piece of legislation like the 
farm bill is signed into law? And how can Congress help improve 
this outreach?
    Mr. Ducheneaux. Absolutely. As we have started our work 
with the guidance of Secretary Vilsack, we were told to engage 
with stakeholders early and often. And as you saw through the 
pandemic assistance programs and the Emergency Relief Program 
that we have administered in the last year and a half, we did 
reach out to stakeholders very early, got them involved in the 
process for building those programs. And I think that we have 
demonstrated that there is a lot of satisfaction there. That 
doesn't mean that all the work is done. As I mentioned in my 
oral testimony, there is a lot of work to do yet. We continue 
to look for opportunities to engage with Congress and our 
stakeholder groups to improve our outreach and get it down 
there at a more granular level.
    Mr. Carbajal. Thank you. I am going to ask this last 
question, but I know I am running out of time, so if you could 
submit something in writing, I would appreciate it. 
Administrator Ducheneaux, when conducting outreach to 
individuals, whether farmers, ranchers, or someone else seeking 
assistance from USDA, do you have a program to employ someone 
like promotoras that serve Latino communities? I don't know if 
you are familiar with that concept.
    The Chairwoman. Thank you, Mr. Carbajal. Mr. Ducheneaux, if 
you can submit that question, we will make sure that you get 
it.
    Mr. Carbajal. Thank you.
    The Chairwoman. Thank you.
    I now recognize the gentleman from Indiana, Mr. Baird, who 
is joining us virtually. You can unmute and ask your questions. 
You have 5 minutes.
    Mr. Baird. Thank you, Madam Chairwoman. I really appreciate 
the opportunity to have this discussion. And I really 
appreciate Under Secretary Jacobs-Young for her new appointment 
and look forward to working with her in the future.
    So, my question really deals with the fact that she and I 
are both graduates of the undergraduate land-grant system and 
fully understand and appreciate and recognize the importance 
the system plays in educating our next generation of 
agriculture and training our next generation of farmers and 
ranchers.
    So, Madam Under Secretary, are there any specific programs 
or topics mentioned under the Beginning Farmers and Ranchers 
Development Program that you would like to see prioritized in 
the 2023 Farm Bill as we work through that?
    Dr. Jacobs-Young. Thank you, Representative Baird, and 
thank you for taking time to meet with me earlier this month.
    The Beginning Farmers and Ranchers Development Program, as 
you all are aware, is so critically important to helping us 
create an agriculture enterprise that is climate-smart, robust, 
culturally responsive, equitable, and most importantly, 
resilient and enables our farmers and producers to be 
economically successful. The Beginners Farmers and Ranchers 
Development Program has been critically important in 
recognizing--and we just had a question about the veterans--
recognizing that there are many who are serving in the military 
who returned to their homes, and the rural economies have 
disproportionate number of military folks represented in the 
military. And so, we want to be able to help those folks 
reintegrate back into the United States. If they want to return 
to farming, we want to help them. And if they are new to 
farming, we want to help them in that case, too. So, there are 
some special programs that support the veterans, that support 
underrepresented groups and organizations. And so, we want to 
make sure that we have a five percent set-aside for our 
veterans so that we can make sure that we can support them to 
come back into farming or to enter farming.
    We have NIFA's Agency AgVets Program (Enhancing 
Agricultural Opportunities for Military Veterans) that supports 
farming no matter how many years they have been in farming. So 
that is a different program than Beginning Farmers and 
Ranchers. And then we have the AgrAbility Program that really 
is important for helping our disabled farmers stay on the land 
and continue to be successful, and that helps provide assistive 
technologies, I mean, all these cases, being able to help with 
financial planning and overall just to increase economic, 
environmental, and social sustainability of those farms. And 
so, we are just very thankful. And we are here to support 
Congress as you prepare the next farm bill with technical 
assistance and being able to provide any information that is 
needed to draft that new, important piece of legislation.
    Mr. Baird. I really appreciate your perspective on that. 
And I do think it is important for helping our veterans that 
are interested in this kind of a program and maybe agriculture 
to move back into the civilian world. And this kind of a 
program can be very helpful. And I think from their perspective 
being out on the land and being in agriculture would be a real 
asset, so I certainly appreciate your perspective on that, and 
I appreciate your willingness to work with us to make sure we 
get that portion of the next farm bill correct. So, thank you 
very much, Under Secretary.
    I would like to move to Administrator Ducheneaux then and 
talk about this outreach program for beginning farmers and 
ranchers. And, the 2018 Farm Bill, as you have already 
mentioned, said to create a team of state beginning farmer and 
rancher coordinators. So, could you elaborate on the 
implementation of that program and how you feel that is going?
    Mr. Ducheneaux. Yes, sir. We have a beginning farmer and 
rancher development coordinator, or beginning farmer and 
rancher coordinator rather in the agency. Sarah Campbell is 
doing good work, working across the Department to make sure 
that we are coordinating efforts with our friends at NIFA, 
Rural Development, and what have you. The work that is so 
critical to beginning farmers and ranchers is getting them in 
the door, getting them that first interaction. And oftentimes, 
we don't have the chance to get that second impression. Many of 
these folks need that second impression, so it is important 
that we develop the capacity of our cooperators so that they 
can stay out there and advocate on our behalf.
    Mr. Baird. I really think you hit on a key issue there. 
Sometimes looking at the Farm Service Agency or some of the 
programs that are available, and if you go on the website, you 
could get lost. So, I think it is really beneficial that we 
have people to help some of these beginning young farmers get 
started and get active.
    And, one of the things that I see going on in the present 
time is some of these folks that want to know where their food 
is coming from, so it is the only opportunity that I have seen 
in my years to have young farmers get involved because they can 
go into this specialty, either foods or specialty crops 
provided to a local restaurant or something, so FSA's help 
there would be good.
    The Chairwoman. The gentleman's time has expired
    Mr. Baird. I am sorry. Thank you, and I yield back.
    The Chairwoman. Thank you so much, Mr. Baird, although I 
was enjoying listening.
    Mr. Baird. Didn't mean to bother you.
    The Chairwoman. I now recognize the gentleman from 
California. Mr. Panetta, you have 5 minutes for questioning.
    Mr. Panetta. Thank you, Madam Chairwoman. I appreciate that 
and always appreciate the questioning of my good friend, or 
statement of my good friend, Mr. Baird from Indiana.
    Look, let me let me thank you, Madam Chairwoman, for 
holding this hearing today. Obviously, we have had a lot of 
hearings on the farm bill, and this type of discussion on how 
the USDA and its agencies execute Congressional policies and 
interact with our consumers, with our farmers, with our 
ranchers, and our partners is absolutely critical. And I think 
it has been made clear just from the short time of this hearing 
that at our two witnesses today represent two of the agencies 
at USDA that really are at the heart and soul of that type of 
implementation, from training and transitioning our beginning 
farmers and ranchers, to staffing our USDA offices around the 
country, to reducing food waste. The leadership and strategic 
direction that our witnesses provide to American agriculture is 
absolutely paramount.
    And so, we obviously know that there have been challenges, 
especially with staffing during the pandemic, but also the 
difficulties of setting up a new Administration, to providing 
adequate technical assistance to local FSA offices, to 
supporting many of the programs that this Congress and 
Administration have rolled out. But those growing pains can be 
positive if we continue to work through it and if we continue 
to have discussions like this where we know that we have to 
work together and we know that we have to listen to the people 
we represent, especially our farmers, farmworkers, and 
producers and what they need and what they expect of the USDA.
    Now, obviously, when we talk about equity and outreach, we 
have to talk about everybody responsible for producing our 
agriculture, our farmers and our farmworkers, our essential 
farmworkers. And Mr. Ducheneaux, first of all, let me 
congratulate you on your excellent decision to--on your recent 
choice for chief of staff. Obviously, that is something that is 
going to help not just you, not just your office, but going to 
help all of American agriculture. So good on you for that.
    But I also understand that the FSA is standing up a pilot 
program, and part of that work will help us address our labor 
shortage, something that I think everybody in this hearing, 
everybody on the Agriculture Committee, and a lot of people in 
USDA understand. And so, we have to improve our labor standards 
for our farmworkers especially. Can you talk about this 
program's pilot that obviously deals with the labor shortage 
but also improves our standards for farmworkers?
    Mr. Ducheneaux. Yes, sir. And, as you are well aware, there 
are people that know a lot more about this than I, but I am 
very well-prepared by those folks. As we travel the countryside 
and look at the realities of our food system that have been so 
clearly laid bare by the pandemic, we saw grocery stores that 
didn't have shelves full of meat when there are cows grazing 5 
miles away. We saw produce shelves empty. And this 
Administration has really taken an interest in addressing what 
causes those shortages because food shortage is a national 
security issue.
    One of those that we hear about every time we go out and 
talk with a producer or stakeholder group is farm labor. The 
lack of farm labor is a challenge. Rather than sit back and 
gnash our teeth about the program, the Secretary went to work 
and found a solution, and he is working with our farmworker 
groups to identify ways to streamline and assist with getting 
H-2A visa workers in the country to do this work. And we are 
using $65 million of ARPA funding to get at that through the 
stakeholder agreements. We had three listening sessions 
yesterday to ensure that we are getting it as close to right as 
possible. But it is important to note, another of the strengths 
of this Administration is that we don't mind making an 
adjustment if we don't get it exactly right the first time. And 
we have demonstrated that in the last year and a half as we 
roll out some of our other innovative programs in the disaster 
realm.
    Mr. Panetta. Look, I think you know the H-2A program right 
now, unfortunately, is the only game in town when it comes to 
ag labor, and so I appreciate you leaning into this issue, and 
I also appreciate the fact that you understand the emergency 
aspect of this issue and that basically, our producers, our 
farmers need those farmworkers. And obviously, we have to 
ensure the proper standards for those farmworkers as well. So, 
thank you for your work on this, and, more importantly, thank 
you for your continued work on this.
    Madam Chairwoman, I yield back.
    The Chairwoman. Thank you, Mr. Panetta.
    I now recognize the gentleman from Tennessee joining us on 
the platform. Mr. DesJarlais, you have 5 minutes for 
questioning. Please unmute and begin your questions.
    Mr. DesJarlais. Thank you, Madam Chairwoman.
    Administrator and Under Secretary, I just was curious 
whether you had a strategy to deal with the crisis at the 
southern border in terms of the influx of several million 
illegal immigrants, many who will be applying for SNAP benefits 
under either asylum or because they are under 18.
    Mr. Ducheneaux. Thank you, Congressman DesJarlais. It is a 
good and important question in these times. I think it is 
important to note that people with full bellies are satisfied 
and happy and contribute to the society. And when we have folks 
that are hungry, the American people have always stood up and 
helped to feed them. And it is no less important to feed those 
folks that are trying to get into this country to be part of 
the system than it is to feed those that are overseas or in our 
own rural and urban communities.
    Mr. DesJarlais. Okay. Do you have any kind of numbers yet? 
We are getting ready to write a farm bill, and we have to fund 
the program. Do you have any numbers for us in terms of how 
many asylum seekers there are or how many children that we will 
be needing to feed?
    Mr. Ducheneaux. Sir, I do not have any of those numbers, 
but I do have faith in the American farmers and ranchers to be 
able to stand up to the challenge and feed them.
    Mr. DesJarlais. Okay. Who could get that number for me? 
Because we have gone through this a few times in this 
Subcommittee. And you agree that it is going to put a strain on 
the program, correct?
    Mr. Ducheneaux. Sir, I don't have the numbers, and that is 
a little bit outside of the bailiwick of the Farm Service 
Agency, but I can work with our friends at the Food and 
Nutrition Service to ensure that you get those numbers.
    [The information referred to is located on p. 1619.]
    Mr. DesJarlais. Okay. Under Secretary, do you have anything 
that you would like to add to my concerns regarding this 
problem?
    Dr. Jacobs-Young. I would like to add that I think that we 
should definitely take this back to the Department and work to 
submit some responses for the record. Administrator Ducheneaux 
and myself, we are not the experts in this area. However, we 
have lots of experts at the Department, and we would be happy 
to provide some responses for the record.
    Mr. DesJarlais. I would appreciate that. Thank you both for 
your attendance, and I yield back.
    The Chairwoman. Thank you, Mr. DesJarlais.
    I now recognize the gentleman from Florida. Mr. Lawson, you 
have 5 minutes. Please unmute and begin your questioning.
    Mr. Lawson. Thank you very much. And welcome, everyone, to 
the Committee. I have a question that is centered around some 
of the things that Congressman Thompson talked about. Veterans 
make up 70 percent of agricultural producers with Florida 
leading as one of the top five states for producers with 
military service. The 2018 Farm Bill amended the definition of 
veteran, promised to give them the same benefit as beginning 
farmers and ranchers. Madam Under Secretary, have these updates 
to Section 12306 increased the enrollment and participation of 
veteran producers in USDA programs?
    Dr. Jacobs-Young. Thank you for your question, sir. So, one 
of the things I know from the mission area that I am the Under 
Secretary for in terms of the National Institute of Food and 
Agriculture, we have significant investments in terms of 
support for our veteran farmers. And it is for those who are 
beginning farmers and ranchers, and it is support for those who 
have been in the farming or ranching industry for quite some 
time. And working to ensure that we can expand awareness and 
access and remove barriers to our programs and services, we 
have been working with many different cooperative organizations 
to really just help echo some of the work that we are 
conducting both internal to USDA with our land-grant partners 
and our Extension Service. And so, we are putting all hands on 
deck to be able to reach the people who can benefit from the 
services because with the status of our farmers' average age 
58, some of us resemble that remark. We recognize that if we 
don't have a pipeline primed and prepared to come onto the 
lands and continue to grow the food and to raise the animals 
and provide the fiber and fuel that we all enjoy, which enables 
me to sit here at this table today, that we will be in trouble 
in terms of protecting the food supply for our country. And so, 
the veterans are an incredibly important piece of this puzzle, 
and so we are more than excited about some of the new 
investments that Congress has entrusted us with, and we want to 
do the best we can to ensure that all people know about what is 
available to them and that it is as efficient and effective as 
possible.
    Mr. Lawson. Okay. Thank you very much. And earlier, you 
mentioned about land-grant universities as a lifeline for 
agricultural research, innovation, and development. These 
institutions educate the next generation of farmers, ranchers, 
and citizens and really form the backbone of our nation's 
network of agricultural extension and experiments.
    The Chairman of this Committee, and I, have worked a great 
deal in providing scholarship funding to HBCUs to educate 
farmers and to get young farmers involved in agriculture.
    And so, the question would be the agriculture youth 
organization coordinators were hired in 2019 to build awareness 
among youth in agriculture and engage with land-grant 
universities. Under Secretary, could you expand upon what sort 
of projects the coordinators have been engaged in with land-
grant universities to make this successful?
    Dr. Jacobs-Young. So, sir, I would like a clarification. 
Are we talking about the liaisons to the 1890 institutions?
    Mr. Lawson. Yes. How have they played a role since we are 
talking about the research that the land-grant institutions are 
doing? And then at the same time--my time might run out--but 
agriculture has provided scholarship funding to educate young 
people at HBCUs in order for them to get a bigger interest in 
farming and stay in agriculture industry?
    Dr. Jacobs-Young. Yes, absolutely. So, I know--in the 
interest of time--so on last Tuesday, I had an opportunity to 
visit Alcorn State University and meet with our 1890 scholars, 
our USDA 1890 scholars, and many of them are off on their way 
to a professional career in agriculture. And I wish I had more 
time because I would tell you about some of the exciting things 
that we shared, and that was all worked through the 1890 
liaison who is stationed there at Alcorn State University that 
helps recruit and retain and helps train and helps provide 
internship opportunities by working back with the Department. 
So those coordinators are extremely important, those liaisons. 
We call them the 1890 liaisons. They are critically important 
for helping us prepare the next generation of students out of 
the 1890 institutions.
    Mr. Lawson. Madam Chairwoman, as I yield back, I think this 
is something that we need a little bit more elaboration on in 
your Committee. I yield back.
    The Chairwoman. Thank you, Mr. Lawson. And I would agree, 5 
minutes is not enough time to hear about all the exciting 
things that are happening at these land-grant institutions.
    I now recognize the gentleman from Texas, Mr. Cloud. You 
have 5 minutes for questioning.
    Mr. Cloud. Thank you, Madam Chairwoman, I appreciate it. 
Thank you all for being here today. And I just wanted to start 
off by thanking Administrator Ducheneaux for helping us with 
the redfish issue we had after the Texas freeze. I know there 
is still an issue going on with the pricing. But, first of all, 
I just wanted to say I was visiting the farms 3 weeks ago, 
things are still going, and so really appreciate the help with 
getting that wrapped into ELAP.
    Now, my understanding is there is still some discrepancy on 
the pricing issue. And we are waiting, I guess, on the FSA to 
kind of respond at this point and to give their analysis. Do 
you know when we could expect that? Is there a timeline on 
that?
    Mr. Ducheneaux. Yes, so the redfish producers exercised 
their appeal rights to go to the National Appeals Division to 
seek a determination on whether or not we used the right 
information. We got that NAD appeal determination this summer, 
and we are working on getting back to Mr. Ekstrom and the 
redfish folks here in the next couple of weeks with our answer.
    Mr. Cloud. Okay. Well, I appreciate it. Thanks so much.
    When I am talking to our folks in the ag industry, the 
thing that I hear most often--other than things on, ``Hey, next 
year's farm bill''--still have to do with staffing issues in 
Texas in the FSA offices. And so, I was wanting to see if we 
can get an update and ask for an update. And then we had a 
phone call and then we were going to get some--we were 
expecting a letter would be provided after that phone call, and 
we hadn't received any information yet from that. So, I was 
just wondering where the bottleneck is at the moment. Is it in 
recruiting? Is it training? Do we have retirements? I guess, in 
the perspective of our ag workers, what is taking so long to 
get this issue solved?
    Mr. Ducheneaux. Well, as of just yesterday, we were at 95 
percent fully staffed. And when you consider that that is over 
10,000 employees just in the Farm Service Agency, there is some 
attrition as folks go out and it takes time to onboard.
    Mr. Cloud. Sure.
    Mr. Ducheneaux. So, honestly, a five percent gap isn't that 
bad when you think about the----
    Mr. Cloud. Is everybody back in the office working?
    Mr. Ducheneaux. Everybody is back in the office. We 
continue to monitor local COVID realities and take steps to 
keep folks safe, but every office is open. You may not get to 
see the smile on faces in a few places because we will wear a 
mask when there is community spread, but the offices are back 
open. The biggest challenge that we see in retaining staff is 
the workload doesn't match the compensation. We are asking our 
folks to do yeoman's work, working overtime, and oftentimes, 
the wages that they receive in exchange for that time don't 
match the responsibility or the importance of the work, sir.
    Mr. Cloud. Okay. Are you looking into ways to automate 
processes as well? And some of that can be done through 
technology and updating old systems. I know government is 
notably--and this isn't just your agency, this is everywhere--
just--[inaudible] behind when it comes to----
    Mr. Ducheneaux. Yes. I am a big fan of automation, but I am 
bridging that generation where the folks older than me, they 
want a person in front of them to talk to, and that is critical 
that we maintain that county office presence. But at the same 
time, if we take advantage of technology, we can streamline the 
processes. We are taking our farm loan application, for 
example, down from around 35 pages, a lot of which doesn't 
matter anyway, down to about 12 pages and getting to the meat 
of the issue so that we can better use not only the producer's 
time but also our employees' time. And we are taking the 
lessons we learned in deploying the. Emergency Livestock Relief 
Program and the Emergency Relief Program phase 1 where we are 
using information we have already got to deliver those programs 
to producers out there in the countryside.
    Mr. Cloud. One other challenge I heard that I wanted to 
bring up was just the issue of cross-agency jurisdictions that 
happen a lot. There are three or four examples, and maybe we 
can get you some of these in writing. But, for example, the 
plains cotton farmers said they would get a form from the ERP 
in the mail and then when they would try to verify the 
information for accuracy, FSA would say that your insurance 
provider had to make that corrected information, but then they 
go to the RMA and RMA says, no, that is FSA's. And so, it 
leaves the farmer stuck in limbo there. And we have three or 
four examples of other things like that where it is cross-
agency jurisdiction, which ends up being the farmer versus the 
bureaucracy. At least that is how they feel, and just trying to 
get an answer and move forward for them is difficult sometimes.
    Mr. Ducheneaux. Yes, sir. And, as with any new approach, 
there are growing pains, and we are interested in seeing all of 
those realities and making adjustments as we go out. But if you 
would give me the list of those, I will make sure that we get 
some attention to them.
    Mr. Cloud. Thank you very much.
    Mr. Ducheneaux. Thank you, sir.
    Mr. Cloud. Thank you, Madam Chairwoman. I yield back.
    The Chairwoman. Thank you, Mr. Cloud.
    I now recognize the gentlewoman from Ohio. Ms. Brown, you 
have 5 minutes. Please unmute and begin your questioning.
    Ms. Brown. Thank you, Chairwoman Hayes, for hosting this 
timely hearing as Congress continues to prepare for farm bill 
reauthorization.
    Many of the programs and agency-wide initiatives that we 
have discussed in hearings this year rely on strong 
departmental operations and effective outreach. It is vital 
that we continue to support these efforts. So, Dr. Jacobs-
Young, how does the USDA measure the impact of its outreach 
grants and the activities those grants fund beyond the numbers 
of producers' reached, number of grants, and dollars awarded?
    Dr. Jacobs-Young. Thank you for your question. And most 
recently, Secretary Vilsack announced the $250 million NEXTGEN 
program. And in that program where we are working specifically 
with minority-serving institutions, we are asking on each one 
of those applications for robust evaluation plans. We also plan 
to engage with each one of the applicants who are selected for 
awards throughout the tenure of those award processes. And so, 
we want to be able to work cooperatively with the minority-
serving institutions that will receive the $250 million in 
funding.
    So now let's talk a little bit about the question: how do 
we know we have been successful? I think that is what I hear 
you saying. And one of the things that I would love to see as 
an agency administrator, when I was Administrator for the 
Agricultural Research Service, continuing to look at our 
demographics, and the higher you get to the executive and what 
we call the GS scale in government, the numbers decreased. So 
let me say we see a lot of diversity at the certain GS level, 
and then the higher you go, we see those numbers reduced.
    And so, for me as an Administrator or now as Under 
Secretary, to me, the success is when I look across my staff 
and I look at my staff at all levels and they look like 
America. And so that is why I think it is so important, 
Congresswoman, that you get to see people that look like me, 
that get to see people who look like the Administrator, and 
that get to see people who look like America in leadership 
roles so that we can encourage them to continue. So, whether 
they--I just talked to a group of fifth graders this Monday in 
Denver. And let's just say talking to a whole room of fifth 
graders is a bit challenging, but Congresswoman Hayes has been 
in this position before, I am sure. Keeping their attention was 
a full-time job. But I hope that those kids walked--there were 
a group of Brown, lovely, lovely kids of color. And I hope that 
they walked away with an idea that they can be me because I 
can't be here forever. And I am hoping that if I convinced even 
one or two of those children to continue their education in 
agriculture and at least 75 percent of them to continue to go 
on to college and to grad school, then I would have been 
successful. But I will see it and I will know it when I see it 
in the numbers that we experience in our agencies across the 
country.
    Ms. Brown. Thank you so much.
    Mr. Ducheneaux, in your testimony you mentioned about the 
work of the equity officer, equity analysis analyst, and the 
Justice40 initiative in combating discrimination within the 
agriculture sector. What metrics are you using to assess the 
success of these positions and efforts?
    Mr. Ducheneaux. Thank you very much for the question. As a 
former Executive Director of an organization that participated 
in some of these agreements, I can tell you that it is 
rigorously and frequently that the USDA asks for information 
about the success and outcomes for our cooperators, oftentimes, 
more than their capacity will allow. It is why capacity 
development for our cooperators is so important.
    But if you want to look at an example of how that can 
happen and how Federal investment in knowing better 
information, you need look no further than the National 
Agricultural Statistics Service. In 2002, they made a concerted 
effort to get out there and do a better accounting of Indian 
Country. The Navajo Nation went from one producer magically to 
tens of thousands of producers because they made the effort and 
they got out there and tracked it. So that Federal investment 
leveraged into better information, just like the information 
with the cooperators will. Many of our cooperators who have 
been able to develop that additional capacity also have stepped 
now into tracking outcomes and program participation on behalf 
of the Federal Government, for instance, tracking loan 
participation rates, loan success rates, conservation program 
success rates, and even import investment leveraging of 
capital.
    Ms. Brown. Well, thank you. I see, Madam Chairwoman, that 
my time has expired. So, with that, I want to thank the 
witnesses for their testimony before us today, and I will yield 
back.
    The Chairwoman. Thank you, Ms. Brown. I will just say that 
you are speaking my language when you are talking about ag 
programs in schools. I would like to see more of those programs 
offered to students much sooner, much younger because we can 
capture their creativity and their innovation. And, like you 
said, they will begin to believe that they can, too, be engaged 
in agriculture and see themselves in these roles.
    I now recognize the gentlelady from Florida, Mrs. Cammack. 
You have 5 minutes. Please unmute and begin your questioning.
    Mrs. Cammack. All right. Well, thank you, Chairwoman Hayes, 
Ranking Member Bacon. And I will just jump right into it. Thank 
you to you both for appearing before the Committee today.
    Administrator Ducheneaux, thank you for highlighting the 
work of the Farm Service Agency. Now, as you continue to 
explore ways to serve producers, how is the Department thinking 
about ways to improve technology needed to ease the burdens 
related to reporting and program enrollments, et cetera? That 
has been a common comment and complaint that we have heard 
amongst our FSA folks.
    Mr. Ducheneaux. We get that same complaint as we go out and 
talk to producers in the countryside and our county office 
staff as well. Every program that we roll out, we have to do a 
Paperwork Reduction Act and a time burden analysis, and we are 
working to bring those down and working to streamline our 
programs. And we are really taking the lessons learned, as I 
mentioned previously, from the Emergency Relief Program where 
producers receive that pre-populated form and are able to sign 
and verify, commit to the 2 years of linkage that we are 
required in the statute, and receive the benefits that they are 
entitled to.
    In the Emergency Livestock Relief Program, we actually used 
information that we had using the Livestock Forage Disaster 
Program and acreage reports and simply made a payment to 
producers that were eligible for that program with no paper 
transactions at all. And the challenge is to do so in a way 
that maintains program integrity because it is important to 
fulfill our role as stewards of the taxpayer dollar as we 
deliver these programs and ensure that they get where Congress 
intended them to go as we do this.
    The Livestock Forage Program is one that we are looking 
specifically at, how can we automate that so that when the 
Drought Monitor triggers that disaster assistance, we should be 
able to automatically make the payment like we did with the 
Emergency Livestock Relief Program. So, we are trying to find 
that balance between streamlining but maintain program 
integrity because we want to make sure that we are being good 
stewards of the money.
    Mrs. Cammack. Right. Thank you for that. And while we are 
on the subject of FSA, Administrator, the county committees, as 
you know, are a direct link between the farm community and the 
Department of Agriculture. And my colleague, Ranking Member 
Thompson, brought up earlier USDA's Equity Commission recently 
recommended that USDA seriously consider termination of the FSA 
county committee system to, quote, ``design a more equitable 
alternative for all farmers.'' Now, I am concerned by the many 
claims and reporting that county committees are responsible for 
minority farmers not being able to access loans. That is 
serious. But it is also my understanding that the county 
committee does not have any say in the loan approval process. 
Is that the case? Yes?
    Mr. Ducheneaux. That is the case.
    Mrs. Cammack. Okay. So, they have no say in the approval 
process. So, as Administrator, then what are you doing to 
ensure that the Equity Commission members have an educated 
understanding about what the county committees can and cannot 
do?
    Mr. Ducheneaux. That is a very good question.
    Mrs. Cammack. Thank you.
    Mr. Ducheneaux. We have participated at every opportunity 
with the members of the Equity Commission. But we have to 
understand that we are working to overcome decades and 
generations of when that was actually the case, when county 
committee members did weigh in on loan applications. Those are 
very recent changes in the grand spectrum of time of this, but 
the county committees are integral in the delivery of the 
billions of dollars of programs that we administer annually. 
They are responsible for making determinations about producer 
eligibility and making assessments about prices in that 
particular region.
    Mrs. Cammack. Right
    Mr. Ducheneaux. So, it is important that they are truly 
representative of those that are producing.
    Mrs. Cammack. Well, and I am running short on time, so I am 
sorry to cut you off a little bit there. When was the change 
made?
    Mr. Ducheneaux. I don't know that off the top of my head, 
but I will get it to you. It is sometime in the last few 
decades.
    [The information referred to is located on p. 1619.]
    Mrs. Cammack. Okay. So, I mean, decades. Okay. There has 
clearly been time to educate these committee members about the 
fact that they are not the final say or a part of the approval 
process, so it kind of seems to me that USDA, with this 
recommendation, is throwing the baby out with the bath water. 
And I got to tell you, I am speaking with producers all up and 
down my State of Florida, and we have just been battered by the 
worst hurricane in Florida's history. As you know, Florida is 
home to over 300 specialty crops, and it is the number two 
economic driver of our state. So, we have real serious 
challenges. And our FSA committees, those county committees are 
a key part to the Agriculture Committee as a whole, but they 
will be a major component to recovery.
    So, I think the last thing that they want to hear is that 
the FSA or USDA in the days and weeks after this disaster is 
possibly going to do a wholesale reconfiguration of how these 
agencies they have relied on will work moving forward based 
on--and I am just going to call a spade a spade here. It seems 
like virtue signaling and some woke ideology. But I would like 
to continue this conversation. I know my time has expired, so 
in the interest of doing what is best for the these county 
committees and our producers around the country, I will follow 
up with you later, but thank you.
    And, Madam Chairwoman, I yield back.
    Mr. Ducheneaux. I would appreciate the follow-up. Thank 
you.
    The Chairwoman. Thank you, Mrs. Cammack.
    I now recognize myself for 5 minutes.
    Before I begin my questions, I first want to say to 
Administrator Ducheneaux, you spoke to my heart when you said 
people with full bellies contribute to our communities because 
that is really where I see my role in this work. Yesterday, as 
many of you know, the White House convened a conference on 
hunger, and farmers will be critical to any plan that we have 
moving forward to address hunger and food security issues in 
this country. So, I think that this hearing is both timely and 
relevant to the work that has to be done.
    I have said since the day I came to Washington, hungry kids 
don't learn. I know that, and that can extend to any other 
community on any other topic. But we must be invested in 
feeding people in this country. And the idea that we have so 
many farmers and ranchers locally who are not being utilized is 
something that we have to really look at differently.
    Dr. Jacobs-Young, in my district, only nine percent of 
farmers are younger than 35, and \1/3\ are older than 65, which 
aligns closely to the long-term trends. So, I know how critical 
it is, as I said before, to get more younger, beginning farmers 
involved in agriculture and to share the importance of programs 
like Beginning Farmers and Ranchers Development Program. What 
changes to the 2018 Farm Bill have improved access, and has 
NIFA received more applications as a result? If not, what 
should we be doing differently as we move forward?
    Dr. Jacobs-Young. Thank you for the question, Chairwoman 
Hayes. So, the number of applications received by the Beginning 
Farmers and Ranchers Development Program is one that I will 
have to provide following this hearing today.
    I do want to talk a little bit about in your home state, 
some of the work that has been happening with the Beginning 
Farmers and Ranchers Development Program, working with the 
University of Connecticut Extension Service, and they are 
working with a program called Solid Ground (Solid Ground, a 
Program for New Farms and Farmers). And I love that--well, I 
don't know if we want it so solid. We need it a little bit 
aerated, soft, and tilled at some points. But Solid Ground 
program where they are working with the beginning farmers to do 
expert training, they are setting up peer networks, that they 
are doing things like technology, awareness, building robots, 
which helps them after they harvest their production to be able 
to reduce the amount of loss that is experienced, and so really 
being able to introduce them to some of the technology. And 
then importantly as well, they are talking about farmer 
wellness. And this is something I had a chance to talk to the 
small farmers about last Monday because if we don't take care 
of ourselves, if we don't look at our diet and our nutrition 
and we are not healthy, we are not going to be at our best 
either. And so, this program also looks at farmer wellness. And 
so, I think that those are some very important facets.
    What I will say is we just want to thank you all for the 
support that we have received for this program because it has 
been so helpful, and it has engaged so many across the country 
to really do this important work of making sure that those who 
venture into farming can be successful. And so that is 
something that I just want to thank you all for, for your 
support with that, and we will follow up with those numbers for 
the record.
    The Chairwoman. Thank you for that. And you can take me 
down a rabbit hole on this one because I have seen at many of 
our VOAG training programs where young people who are 
interested in technology didn't realize that drone research 
could contribute to agriculture, and it was a way that they can 
have gainful employment in the field in just so many different 
areas, so very excited to hear you shout out my state.
    In my last minute, I have a question for you, Mr. 
Ducheneaux. As of 2017, only five percent of farmers in the 
U.S. were Black, Latino, Hispanic, Asian, Native or Pacific 
Islander, or identified with multiple races. In my district, it 
is only about 2 percent. Without reaching these communities who 
make up more than 40 percent of our country, we are going to 
really struggle to address the need for more farmers. Given the 
urgency of this issue, do the Farm Service Agency and the 2501 
Program work together to support farmers of color and farmers 
with prior military service?
    Mr. Ducheneaux. Thank you, ma'am. All things being equal 
over the span of time, we wouldn't even be sitting here talking 
about equity. But the fact of the matter is that nearly 40 
percent of this country is minority, less than 12 percent, 
actually 11 point something percent are minority farmers. So, 
there is tremendous inequity just in who is farming. But, if 
you take a closer look at the numbers, there is a disparity of 
about two percent in farm program payments between farmers that 
aren't farmers of color and farmers that are. We have to reach 
those farmers and at least bring equity to the proportion of 
program participation and the proportion of existing farmers 
while we work to increase opportunity for producers so that our 
farming population can better represent our national 
population.
    The Chairwoman. Thank you, sir. We all benefit when we have 
honest conversations and commit to finding solutions to these 
problems. And I think that is where we have to go from here.
    Seeing no other Members on the platform or in the Committee 
room, I will now--oh, I probably should have yielded back for 
my question. I don't know. Usually, I am over there.
    I want to thank our witnesses for taking the time to join 
us today. We really appreciate your time and expertise. I will 
ask that you--there are so many other things that I would have 
loved to hear about. We had some questions from Mr. Carbajal, 
Mr. DesJarlais, Mr. Cloud, Mrs. Cammack, and even myself that I 
would love to follow up on. This really requires a much more 
extensive conversation because I truly believe that we have the 
ability and the capacity to close these gaps and do better 
moving forward. Your insights on the 2018 Farm Bill provisions 
related to USDA Department operations and outreach programs and 
the impact of COVID-19 on the Department and its programs and 
everything else mentioned here today will inform us as we begin 
the process of drafting the 2023 Farm Bill.
    We have really just seen how incredibly important our 
agricultural sector is not only to our country but to the 
global economy. We have seen that amplified over the last few 
years, and I think more people are hyperaware of the role that 
local farmers and ranchers play. And as legislators, I think we 
are hyperaware of what we have to do to support this industry.
    Working together, we can ensure that the structure and 
operations of the Department serves farms and ranches of all 
sizes. That is very important to me because in my State of 
Connecticut I deal with many smaller farmers for who one bad 
season, one missed crop, one bad market, and they are out of 
business for good. So, we really have to make sure that our 
programs reach farmers of all sizes from the largest that we 
have in our country to the smallest family farms that that we 
serve.
    So, I thank you again, Under Secretary Jacobs-Young and 
Administrator Ducheneaux, for your expertise in these areas and 
your commitment to the work that you do. I think that your 
presence here really speaks volumes just about the subject of 
this hearing, that we are trying as a country and as an 
Administration to expand our efforts to reach into other 
communities, to close the gaps that we know exist. So, it is 
very important. It is very important that you are representing 
the Department and that you bring such unique and varied 
experiences, and that your work will help guide it and inform 
us moving forward.
    I guess that serves as my closing statement. Our Ranking 
Member isn't here but our--I am sorry, my Ranking Member isn't 
here, but the Ranking Member of the full Committee, Mr. 
Thompson, is here, so I welcome you to give closing remarks if 
you would like.
    Mr. Thompson. Well, no, just thank you so much for your 
continued service and your leadership. This was a good hearing, 
good information. One of the things I would like to follow up 
with you, one, this entire issue is I would love to have the 
data from the root cause analysis the USDA must have done in 
order to come to the conclusion for the actions that they have 
taken, really using the data to look at what are the variables 
of why some succeed and some don't succeed, even in just having 
access. Is it some systemic race issue from decades ago? How 
much of a role does the size of the farm operation, the access 
to capital? There are just so many things out there. And I am 
sure, given the amount of money and emphasis that USDA has 
taken, there has to be a really good root cause analysis that 
has been done other than just looking at demographics of the 
industry. And so that would be great. Thank you for your 
continued leadership.
    And, Madam Chairwoman, thank you for the hearing.
    The Chairwoman. Thank you, sir. Thank you for joining us. 
You are always such a tremendous contributor to all of the 
hearings on this Committee.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any of the questions posed by a Member.
    This hearing of the Subcommittee on Nutrition, Oversight, 
and Department Operations is now adjourned.
    [Whereupon, at 10:51 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Supplementary Material Submitted by Zach Ducheneaux, Administrator, 
          Farm Service Agency, U.S. Department of Agriculture
Insert 1
          Mr. DesJarlais. . . .
          Administrator and Under Secretary, I just was curious whether 
        you had a strategy to deal with the crisis at the southern 
        border in terms of the influx of several million illegal 
        immigrants, many who will be applying for SNAP benefits under 
        either asylum or because they are under 18.
          * * * * *
          Mr. Ducheneaux. Sir, I do not have any of those numbers, but 
        I do have faith in the American farmers and ranchers to be able 
        to stand up to the challenge and feed them.
          Mr. DesJarlais. Okay. Who could get that number for me? 
        Because we have gone through this a few times in this 
        Subcommittee. And you agree that it is going to put a strain on 
        the program, correct?
          Mr. Ducheneaux. Sir, I don't have the numbers, and that is a 
        little bit outside of the bailiwick of the Farm Service Agency, 
        but I can work with our friends at the Food and Nutrition 
        Service to ensure that you get those numbers.

    Although this matter is not within the purview of FSA, FSA 
conferred with USDA's Food and Nutrition Service (FNS) on this question 
and provides in response the latest data relevant and available from 
FNS, which is from Fiscal Year 2019. A total of 37.2 million 
individuals received Supplemental Nutrition Assistance Program (SNAP) 
benefits on average each month in FY 2019. The citizenship breakdown of 
these individuals is as follows:

   33.9 million (91.1%) are U.S.-born citizens;

   1.9 million (5.0%) are naturalized U.S. citizens;

   295,000 (0.8%) are refugees, asylees, or individuals given a 
        stay of deportation; and

   1.1 million (3.1%) are other noncitizens--e.g., a legal 
        permanent resident with 40 quarters of work (which is typically 
        10 years of work history), military service, 5 years legal U.S. 
        residency, disability, or under age 18.

   Included in the above groups are 2.5 million U.S. citizen 
        children who are living with non-citizen adults (adults may or 
        may not be SNAP participants).
Insert 2
          Mrs. Cammack. Okay. So, they have no say in the approval 
        process. So, as Administrator, then what are you doing to 
        ensure that the Equity Commission members have an educated 
        understanding about what the county committees can and cannot 
        do?
          * * * * *
          Mrs. Cammack. . . . When was the change made?
          Mr. Ducheneaux. I don't know that off the top of my head, but 
        I will get it to you. It is sometime in the last few decades.

    I appreciate your question regarding FSA County Committee 
involvement in reviewing farm loan program applications. While since 
removed, Sec. 332 of the Consolidated Farm and Rural Development Act 
(Con Act) established county committees at the former Farmers Home 
Administration (FmHA) and Sec. 333(2) established the requirement that 
those FmHA committees certify farm loan eligibility in writing. In 
October of 1994, Public Law 103-354 subsequently removed sections 332 
and 333(2), which in turn removed farm loan eligibility certification 
authorities from the county committees.
    Several notices have since clarified the role of county committees 
in this process, particularly as the FmHA and the Agricultural 
Stabilization and Conservation Services (ASCS) merged into the current 
Farm Service Agency (FSA). Notably:

   FC-5 dated 11/9/95 required that former ASCS State Executive 
        Directors (SEDs) delegate all authorities held by FmHA County 
        Committee to ``Ag Credit Team'' members with loan approval 
        authority. (Note: this change took place after a portion of the 
        former FmHA merged with former ASCS to form FSA, and the former 
        FmHA teams with loan approval authority--known as Ag Credit 
        Teams--became the loan approval officials in FSA).

   FC-158 dated 12/24/97 eliminated requirement of former FmHA 
        Committees to determine eligibility for guaranteed loan 
        requests.

   FC-205 dated 8/5/98 replaced FC-158 and eliminated the 
        requirement for former FmHA Committees to determine eligibility 
        for both direct and guaranteed loan requests.

   FLP-37 dated 3/11/99 replaced FC-205 and eliminated former 
        FmHA Committees from borrower training as well as direct and 
        guaranteed loan eligibility based on Civil Rights Action team 
        recommendation.

    Since these changes, no FSA County Committees or their historic 
predecessors have had authorities to determine eligibility for farm 
loan programs or approve farm loans.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Chavonda Jacobs-Young, Ph.D., Under Secretary for 
        Research, Education, and Economics and Chief Scientist, U.S. 
        Department of Agriculture
Question Submitted by Hon. Jahana Hayes, a Representative in Congress 
        from Connecticut
    Question 1. The long-term national trend shows that American 
producers and farmers are getting older on average. As the agriculture 
industry continues to deal with rising temperatures and rising costs, 
it is important we continue to elevate agriculture as a viable and 
sustainable career for the next generation.
    I'm proud to see the Agricultural Youth Organization Coordinator is 
supporting young adults who are invested in the agriculture industry. 
How early does the coordinator suggest engaging with K-12 children and 
how can these children be supported through a pipeline of programs 
through adulthood?
    Answer. The 2018 Farm Bill established the position of Agricultural 
Youth Organization Coordinator to promote the role of youth-serving 
organizations and school-based agricultural education. The Office of 
Partnerships and Public Engagement's (OPPE) team supports the Youth 
Coordinator in building youth awareness of the reach and importance of 
agriculture across a diversity of fields and disciplines.
    The first few years of life lay the foundation for resilient, safe, 
healthy, and economically secure children. Access to high-quality 
child-care and early learning opportunities strengthens this foundation 
and directly supports the success and well-being of rural families. 
USDA Rural Development encourages continued investment in high-quality, 
affordable child-care and early learning opportunities as a critical 
component of building and strengthening economic prosperity in rural 
communities.
    USDA's child nutrition programs help ensure that children receive 
nutritious meals and snacks that promote their health and educational 
readiness. The USDA Farm to School Program joins schools, farms, and 
community organizations across the country to positively impact kids 
from pre-K through high school and plays an important role in getting 
healthy, locally grown foods onto children's trays. This fiscal year, 
USDA will award Farm to School Grants through a competitive process 
that provides bonus points to projects operated by and serving 
communities that are underserved, marginalized, or adversely affected 
by poverty and inequality. We know from research that if children get 
that solid start, they will pay more attention in school, they will be 
less likely to arrive late to school, and they will be less likely to 
not go to school at all. As a result, they are more likely to perform 
better and, in fact, over the length of their school years, they are 
more likely to graduate from high school.
    From grade school to graduate school, the USDA National Institute 
of Food and Agriculture funded programs to promote education in the 
food and agricultural sciences. From Learning to Leading the Next 
Generation of Diverse Food and Agriculture Professionals Program 
(NEXTGEN) will enable 1890 institutions, 1994 institutions, Alaska 
Native-serving institutions and Native Hawaiian-serving institutions, 
Hispanic-serving institutions and insular area institutions of higher 
education located in the U.S. territories, to build and sustain the 
next generation of the food, agriculture, natural resources, and human 
sciences workforce including the future USDA workforce primarily 
through providing student scholarship support, meaningful paid 
internships, fellowships, and job opportunity matching, and also 
facilitating opportunities to learn the processes and pathways leading 
to training and employment in the Federal sector.
    USDA offers Federal internship and employment opportunities for 
current students, recent graduates, recent veterans, and those with 
advanced degrees. We also offer internships for students with 
disabilities, and partner with third party internship programs 
including: The Thurgood Marshall College Fund (TMCF); the Hispanic 
Association of Colleges and Universities (HACU); The American Indian 
Higher Education Consortium (AIHEC); The High School Equivalency 
Program (HEP); and The College Assistance Migrant Program (CAMP). USDA 
also partners with several student organizations to provide a range of 
programs to assist youth to meet and exceed their potential and unlock 
countless career paths in agriculture.

    Question 1a. Is the coordinator ensuring that children from 
underserved communities are also included in agriculture education?
    Answer. Within the Office of Partnerships and Public Engagement's 
the Youth Coordinator position is closely aligned with our education 
initiatives and programs serving the 1890 historically Black land-grant 
colleges and universities, 1994 Tribal land-grant colleges and 
universities, and Hispanic-serving institutions. The Youth Coordinator 
will work closely with the USDA Liaisons that advise and assist 
communities, students, faculty, universities and colleges, farmers, 
ranchers, foresters, and others on USDA programs and initiatives and to 
build a pipeline of students studying agriculture and entering USDA. 
USDA liaisons develop and maintain partnerships with key USDA 
stakeholders to enhance outreach between USDA stakeholders and USDA 
agencies, mission areas, and staff offices. This alignment fosters 
OPPE's coordination and collaboration efforts across USDA to better 
prepare underserved students and ag professionals for success. This 
supports USDA's historic commitment to root out generations of systemic 
racism; center equity in decision-making and policymaking; have a 
diverse, modern, and inclusive workforce; lower barriers to access; and 
ensure USDA programming is inclusive of all employees and all 
customers.
Response from Zach Ducheneaux, Administrator, Farm Service Agency, U.S. 
        Department of Agriculture
Question Submitted by Hon. Salud O. Carbajal, a Representative in 
        Congress from California
    Question. Administrator Ducheneaux, when conducting outreach to 
individuals, whether farmers, ranchers, or someone else seeking 
assistance from USDA, do you have a program to employ someone like 
promotoras that serve Latino communities? I don't know if you are 
familiar with that concept. Promotores de salud, also known as 
promotoras, is the Spanish term for ``community health workers''. 
Promotores are trusted members of their community who help individuals 
navigate health care or teach the community about resources, like where 
to get vaccinated and why. Would something like this be beneficial to 
help Latino and other minority communities access USDA programs and re-
build trust?
    Answer. Currently, the Farm Service Agency has a team headquartered 
in Washington, D.C., as well as State Outreach Coordinators and County 
Office Coordinators, who work to provide outreach, education and 
technical assistance. Each staff member across FSA is also responsible 
for providing these resources as well. FSA has a network of over 2,000 
Service Centers around the country to work closely within the 
communities they serve. In addition, the USDA has Beginning Farmer and 
Rancher Coordinators at the national and state levels who specifically 
focus on helping new farmers gain access to USDA's valuable resources. 
As USDA works with new and beginning farmers, these coordinators also 
focus on making sure their services are available in multiple languages 
to make sure all potential customers can understand and ultimately take 
advantage of the resources that USDA has to offer for the next 
generation of farmers and ranchers. USDA also has an array of 
cooperative agreements to support technical service providers, who 
provide instrumental hands-on technical assistance in communities where 
they have built strong relationships and trust at the local level. 
While USDA does not have promotoras, we will continue to look for ways 
to enhance our efforts and work within UDSA and through our cooperative 
agreement partners to ensure we have individuals in place to provide 
equitable service. I appreciate your question and also welcome the 
opportunity for continued discussion and collaboration to make sure the 
farmers, ranchers, and farmworkers you represent have the knowledge and 
resources they need to access USDA programs and services.