    [Senate Hearing 118-79]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 118-79

     CULTIVATING STEWARDSHIP: EXAMINING THE CHANGING AGRICULTURAL LANDSCAPE

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

                                    HEARING

                                   before the

                            COMMITTEE ON THE BUDGET
                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  June 7, 2023
                                   __________

               Printed for the use of the Committee on the Budget

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                               www.govinfo.gov

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    53-197                    WASHINGTON : 2023

                            COMMITTEE ON THE BUDGET

                   SHELDON WHITEHOUSE, Rhode Island, Chairman

    PATTY MURRAY, Washington             CHARLES E. GRASSLEY, Iowa
    RON WYDEN, Oregon                    MIKE CRAPO, Idaho
    DEBBIE STABENOW, Michigan            LINDSEY O. GRAHAM, South Carolina
    BERNARD SANDERS, Vermont             RON JOHNSON, Wisconsin
    MARK R. WARNER, Virginia             MITT ROMNEY, Utah
    JEFF MERKLEY, Oregon                 ROGER MARSHALL, Kansas
    TIM KAINE, Virginia                  MIKE BRAUN, Indiana
    CHRIS VAN HOLLEN, Maryland           JOHN KENNEDY, Louisiana
    BEN RAY LUJAN, New Mexico            RICK SCOTT, Florida
    ALEX PADILLA, California             MIKE LEE, Utah

                       Dan Dudis, Majority Staff Director
            Kolan Davis, Republican Staff Director and Chief Counsel
                       Mallory B. Nersesian, Chief Clerk
                      Alexander C. Scioscia, Hearing Clerk

                                C O N T E N T S

                                  ----------

                            WEDNESDAY, JUNE 7, 2023

                    OPENING STATEMENTS BY COMMITTEE MEMBERS

                                                                       Page
    Senator Sheldon Whitehouse, Chairman.............................     1
        Prepared Statement...........................................    34
    Senator Charles E. Grassley, Ranking Member......................     3
        Prepared Statement...........................................    36

                        STATEMENTS BY COMMITTEE MEMBERS

    Senator Debbie Stabenow..........................................    12
    Senator Ben Ray Lujan............................................    17
    Senator Alex Padilla.............................................    19
    Senator Tim Kaine................................................    21
    Senator Mike Braun...............................................    25
    Senator Jeff Merkley.............................................    28

                                   WITNESSES

    Mr. Brandon Willis, Assistant Professor, Department of Applied
      Economics, Utah State University...............................     5
        Prepared Statement...........................................    38
    Mr. Martin Larsen, Larsen Family Farm & Byron Area Farmers Group.     7
        Prepared Statement...........................................    41
    Mr. Brent Johnson, President, Iowa Farm Bureau...................     8
        Prepared Statement...........................................    46
    Mr. Bryan Sievers, Chief Operating Officer of Sievers Family
      Farms, and Director of Government Relations, Roeslein
      Alternative Energy.............................................    10
        Prepared Statement...........................................    50

                                    APPENDIX

    Responses to post-hearing questions for the Record
    Mr. Johnson......................................................    55
    Mr. Sievers......................................................    56
    Document submitted to the Record by Chairman Sheldon Whitehouse..    59

     CULTIVATING STEWARDSHIP: EXAMINING THE CHANGING AGRICULTURAL LANDSCAPE

                                  ----------

                            WEDNESDAY, JUNE 7, 2023

                                               Committee on the Budget,
                                                           U.S. Senate,
                                                        Washington, DC.
        The hearing was convened, pursuant to notice, at 10:00
    a.m., in Room SD-608 of Dirksen Senate Office Building, Hon.
    Sheldon Whitehouse, Chairman of the Committee, presiding.
        Present: Senators Whitehouse, Stabenow, Merkley, Kaine, Van
    Hollen, Lujan, Padilla, Grassley, Marshall, Braun, and R.
    Scott.
        Also present: Democratic Staff: Dan Dudis, Majority Staff
    Director; Dan Ruboss, Senior Tax and Economic Advisor and
    Member Outreach Director; Alexandra Gilliland, Climate Policy
    Expert.
        Republican Staff: Chris Conlin, Deputy Staff Director;
    Krisann Pearce, General Counsel; Jordan Pakula, Professional
    Staff Member.
        Witnesses:
        Mr. Brandon Willis, Assistant Professor, Department of
    Applied Economics, Utah State University
        Mr. Martin Larsen, Larsen Family Farm, & Byron Area Farmers
    Group
        Mr. Brent Johnson, President, Iowa Farm Bureau
        Mr. Bryan Sievers, Chief Operating Officer of Sievers
    Family Farms, and Director of Government Relations, Roeslein
    Alternative Energy

              OPENING STATEMENT OF CHAIRMAN WHITEHOUSE \1\
    ---------------------------------------------------------------------------

        \1\ Prepared statement of Chairman Whitehouse appears in the
    appendix on page 34.
    ---------------------------------------------------------------------------
        Chairman Whitehouse. Good morning. Let me call to order
    this hearing of the Senate Budget Committee entitled
    Cultivating Stewardship, Examining the Changing Agricultural
    Landscape. Now that our Ranking Member has had the opportunity
    to perform the vital political task of recognizing and greeting
    his fellow Iowans, we will proceed with opening statements from
    myself, and from Senator Grassley, followed by five minute
    statements by each of the witnesses.
        Your full written testimony will be made part of the
    record, so don't worry about that. And we would like to confine
    you to five minutes in your oral opening statement so that we
    can move to the question and answer phase. I believe we're
    going to have quite a considerable turnout for this hearing, so
    the quicker we get to questions, the happier the members, the
    happier the Chair.
        So, now Ranking Member Grassley, members of the Committee,
    witnesses and guests, welcome to our 13th Budget Committee
    Hearing. Today we return to our series on the economic toll of
    a changing climate. This time with a bipartisan hearing. Thank
    you very much Senator Grassley.
        With witnesses on both sides agreed to by both sides. We
    will hear from farmers on the front line about climate risks to
    the agriculture sector, the associated economic and budgetary
    costs, and the important steps we can take to help mitigate
    those costs. As we've highlighted in this series the ongoing
    climate crisis poses enormous threats to people's well-being on
    this planet, and to our industries, our livelihoods and our
    entire economy.
        Our nation's agricultural landscape is changing.
    Unpredictable weather has always been a challenge to raising
    crops and livestock, but farmers are seeing more frequent and
    extreme weather variability than ever before. Events that used
    to be considered anomalies now occur with increasing
    regularity.
        For decades California faced record-breaking droughts. This
    year California crops face record floods. Last year Kansas
    suffered a triple digit heatwave that killed thousands of
    cattle. This year Kansas is struggling with a drought, forcing
    farmers to abandon their wheat fields.
        In 2018, Hurricane Michael swept through Florida and
    Georgia, damaging cotton, pecan and poultry farms. Last year,
    Florida citrus farms hit historic production lows after twin
    hurricanes, Ian and Nicole. Atypical events are the new norm,
    leading to lower crop yields, lower livestock productivity,
    worst pests and disease, and reduced soil fertility.
        Consumers see the impacts of climate change on their
    grocery bills, and will continue to bear the brunt of lower
    crop yields, and increased production costs. As climate change
    affects food production in our country, it's also affecting
    food production around the world. The United States imports a
    third of our fresh vegetables, more than half our fresh fruit,
    and 94 percent of the seafood we consume.
        Global weather variability disrupting supply chains and
    global agricultural productivity will have far reaching effects
    on food prices and supply. U.S. government programs that
    protect growers and stabilize the agricultural economy move the
    costs of damaging weather to the federal government.
        The largest is the Federal Crop Insurance Program. In 2022
    the federal government spent over 15 billion dollars on that
    program, which included over 11.6 billion dollars in premium
    subsidies. Indemnities, what the government paid out to those
    affected in the last year were around 18 billion dollars.
        As climate change makes farming and raising livestock more
    unpredictable, that cost will continue to grow. Spending on
    other disaster assistance programs is also likely to grow as
    extreme weather events become more prevalent. In just three
    years of the Emergency Relief Program, the federal government
    has already disbursed more than 7.4 billion dollars to help
    agricultural producers.
        This is on top of the Wildfire and Hurricane Indemnity
    Program, which provided payments to farmers for losses caused
    by hurricanes and wildfires, and other natural disasters.
    Ranking Member Grassley and I agree that the agriculture sector
    can play a role in the climate solution. As we'll hear today,
    climate smart agriculture can drive down greenhouse gas
    emissions, such as methane. It can improve soil health and
    sequester carbon. And it can help make farms stronger in the
    face of a changing climate.
        Farmers know that climate smart practices, such as cover
    crops, no till, and diversification increase food production
    and make agriculture more resilient. Farmers like those here
    today are on the frontlines of building resilience and adapting
    to a changing agricultural landscape.
        Major agricultural corporations like Cargill warn that
    Midwestern production of some commodities like wheat and corn
    could drop by as much as 69 percent by the end of the century,
    absent significant emissions mitigation, or adaptation. Our
    collective future depends on getting it right on climate, and
    I'm delighted that we have these witnesses here today, and turn
    to my distinguished Ranking Member, Senator Grassley.

               OPENING STATEMENT OF SENATOR GRASSLEY \2\
    ---------------------------------------------------------------------------

        \2\ Prepared statement of Senator Grassley appears in the appendix
    on page 36.
    ---------------------------------------------------------------------------
        Senator Grassley. Thank you very much Mr. Chairman. We're
    holding our 9th hearing on climate change. In each of these
    hearings I've taken an opportunity to remind everybody what the
    Budget Committee is about, so I urge the Committee to focus
    more on our country's unsustainable debt, and my reminding
    every opening of this Committee. That isn't going to stop
    today.
        However, I appreciate the Chairman holding this bipartisan
    hearing that will shine light on actions that farmers in Iowa,
    and across the nation, that these farmers are already taking to
    reduce emissions, and improve the environment. And remember the
    family farmers of America are only 2 percent of the population.
    They feed the other 98 percent in America, but they also export
    about one-third of production, so feeding people elsewhere on
    this globe.
        During my time in the Senate I discovered that finding a
    seemingly small area of bipartisan agreement can lead to
    lasting change for the sake of our constituents. So Mr.
    Chairman, I hope today's base of goodwill and camaraderie will
    serve as a springboard for our future work on bipartisan budget
    process reform.
        There are millions of family farmers across the country,
    and 86,000 in Iowa. While they may not ask for it, they deserve
    a pat on the back from the standpoint of what they do about
    global warming, and I thank the Chairman for making that very
    clear in his opening statement. Iowa has a global reputation as
    an agricultural powerhouse. We're a leading producer of pork,
    corn, soybeans and eggs. We feed and fuel millions of people
    around the world.
        From the farm to the fork, Iowa's agricultural abundance
    creates jobs in multiple sectors. The economic benefits of
    agriculture are easy to see throughout the food supply chain.
    But a farmer's relationship with the environment is often
    difficult for folks on the west and east coast to understand. I
    can tell you from personal experience, as a farmer myself, that
    farmers are the greatest stewards of their land.
        They know that it's good for the land. They know it's good
    for future generations. They know it's good for prosperity, and
    it's the right thing to do. From the use of no till, to cover
    crops, to precision agricultural technologies, farmers have
    proven that they place the highest priority on a healthy
    environment. That's because farming is often times a family
    business.
        Family farms want to make sure that they leave the land
    better for the next generation than when it was entrusted to
    their care, and often that next generation comes from within
    that very family. The first step to running a sustainable farm
    is for the farm to at least to be able to pay the bills, only
    then can a farmer implement practices that reduce emissions and
    improve soil health.
        When government adds red tape to farming operations, it can
    add costs, and in turn reduces the ability for farmers to add
    sustainable practices. And one of those regulations that the
    EPA's putting out, maybe will be halted now because of a recent
    Supreme Court decision last week, is waters of the U.S. The
    Iowa Farm Bureau put out a map of maybe during the Obama
    administration, but it would still be applicable in the Biden
    administration, that government regulation would affect 97
    percent of the land in the State of Iowa.
        And how can you farm if every time you go to the field
    you're having to worry about are you violating some regulation.
    That's just one example of a lot of government help that
    farmers don't need if they're going to be prosperous, and do
    for the environment what must be done.
        Today's panel is an impressive group from rural America.
    They illustrate that farmers are actively working to confront
    the impact of weather events like flooding and drought.
    Moreover, they're a testament to the fact that we can reduce
    emissions, improve soil conditions, increase crop yields, and
    yet run successful farming operation at the same time, and we
    can do it without destructive government regulations.
        So I'm going to take the rest of my time to introduce the
    two Iowans that are here. I probably don't do them justice with
    my short introduction, but I want to welcome Brent Johnson. He
    grows corn and soybeans on his family farm in Calhoun County.
    He's a precision agriculture expert, agronomist and certified
    crop adviser. He also happens to serve as President of the Iowa
    Farm Bureau.
        I've been a member of that organization for longer than
    you've been alive, 67 years, so I know that it's a good
    organization, and you're going to be a good spokesman for them.
    He was a 2020 recipient of the Iowa Department of Agriculture
    Land Stewardship, Environmental Leader Award. Few know Iowan
    farming better than Brent does.
        We also welcome Mr. Bryan Sievers who operates a grain and
    livestock farm in Scott County. Following two terms in the Iowa
    State Legislature he commissioned his anaerobic digester system
    in 2013. It processes beef cattle manure, food waste, and bile
    mass with nutrients, fertilizer and biogas. He is the Vice
    Chair of the American Bio Gas Council Board of Directors, and
    recently joined the Roeslein Alternative Energy to produce
    renewable natural gas from his digesters.
        Bryan exemplifies what it takes to be innovative and kind
    of all of the above approach to achieve energy security. And
    the other two people I won't introduce, but I want to welcome
    you as well.
        Chairman Whitehouse. Thanks very much Senator Grassley. I
    cannot improve on your introduction of your fellow Iowans, so
    let me just recognize also Brandon Willis, who is here
    testifying today, an Assistant Professor of Applied Economics
    at Utah State University. Prior to that he served as the
    administrator of the Risk Management Agency at the U.S.
    Department of Agriculture, and as senior advisor to the
    Secretary of Agriculture. Before that he was a Senate staffer,
    so welcome back Mr. Willis, thank you for being here. We look
    forward to your perspective as a former USDA official.
        And our last witness is Martin Larsen, a fifth generation
    farmer near Byron, Minnesota. The Larsen family was recently
    recognized as Olmstead County Farm Family of the year for their
    conservation work and community involvement.
        Mr. Larsen also works for the Olmstead County Soil and
    Water Conservation District, where he provides technical
    assistance to farmers, and manages a 40-acre test plot for
    building healthy soil. Mr. Larsen, thank you for being here,
    and we look forward to your testimony.
        Let me say you're all equally welcome, even if you're not
    Iowans, and as I close with my greetings, let me also recognize
    that the distinguished Chair of the Senate Agriculture
    Committee is with us, Senator Stabenow of Michigan. Thank you
    very much Debbie for being here, and with that let me turn
    first to Mr. Willis. Please proceed.

    STATEMENT OF BRANDON WILLIS, ASSISTANT PROFESSOR, DEPARTMENT OF
              APPLIED ECONOMICS, UTAH STATE UNIVERSITY \3\
    ---------------------------------------------------------------------------

        \3\ Prepared statement of Mr. Willis appears in the appendix on
    page 38.
    ---------------------------------------------------------------------------
        Mr. Willis. Chairman Whitehouse, Ranking Member Grassley,
    and members of this Committee. Thank you for allowing me to
    testify today. My testimony will focus on crop insurance.
        My name is Brandon Willis, I'm currently an Assistant
    Professor at Utah State University. I grew up on a sheep ranch
    in northern Utah. I spent several years in Washington, D.C. as
    you mentioned, where I worked as an agricultural staffer for
    former Senator Max Baucus, and then I went down to the
    Department of Agriculture where I worked in the Farm Service
    Agency, was a Senior Advisor to Secretary Vilsack, and oversaw
    the Crop Insurance Programs for four years as the administrator
    of the Risk Management Agency.
        In each of these roles I saw the impacts that Mother Nature
    could have on agriculture. I also witnessed the value of USDA's
    safety-net programs. We often discuss the financial impact of
    crop insurance, yet I also saw significant value in the peace
    of mind that it provides to producers struggling through
    challenging circumstances.
        Years ago Benjamin Franklin said, ``I have sometimes
    thought it might be well to establish an office of insurance
    for farms against the damage that may occur to them from
    storms, blights, insects, et cetera. A small sum paid by a
    number would repair such losses and prevent much poverty and
    distress.''
        Today we have that program. It is not perfect, yet it is
    the envy of many other nations because of the value and
    stability it provides. It's easy to overlook what we have, a
    well-ran program that allows farmers to farm, and Congress to
    focus on other issues, rather than constantly passing ad hoc
    disaster.
        Congress has set the program up to balance the unique
    strengths of the private and public sectors. The results are
    that farmers receive payments quickly, and the program has one
    of the lowest improper payment rates of any government program.
        When considering the impact of climate change on crop
    insurance it's worth noting that USDA has already adjusted how
    rates are determined by using a shorter time period to set
    rates. This will help the program adjust quicker than changing
    climate conditions.
        How will climate change impact crop insurance? Numerous
    reports have been written on the topic. The consensus is that
    that climate change has already impacted crop insurance costs,
    and will continue to impact them. However, the exact extent is
    subject to debate.
        A Stanford study from 2021 found that climate change has
    increased crop insurance expenses from 1991 to 2017 by
    approximately 19 percent. This research showed that increased
    costs, primarily due to heat and drought have risen due to
    climate change, leading to more crop losses and damages.
    However, the study also acknowledged some limitations, such as
    the challenges in precisely attributing specific weather events
    to climate change, and uncertainty surrounding future climate
    projections.
        USDA's economic research service analyzed the potential
    impacts of climate change. The study found that climate change
    is expected to raise a program's cost due to two main factors.
    First, increased insured value, and increased yield
    variability. As temperatures rise the insured value of crops is
    projected to increase as farmers aim to protect higher value
    crops from potential losses.
        Additionally, climate change is likely to result in more
    frequent and severe weather events leading to greater yield
    variability and increased insurance claims. The study also
    emphasized that that these projects are subject to
    uncertainties, such as the effectiveness of adaptive measures,
    and changes in farm management practices.
        The study examined two emission scenarios. The modern
    emission scenario predicted a gradual increase in greenhouse
    gas emissions, while the higher emission scenario represented a
    more rapid and extensive rise. The study estimated the moderate
    emission scenario would lead to a 3 percent increase in cost,
    while the higher emission scenario would result in a 22 percent
    increase.
        However, if farmer adaption isn't considered, the cost
    increase was projected at 10 and 37 percent, respectively. The
    stark differences and projected costs between scenarios where
    adaption takes place, and where adaption doesn't take place,
    highlight a need for all USDA programs, particularly crop
    insurance, to ensure that program rules do not inhibit the
    ability of farmer to adapt.
        Finally, what should Congress do to ensure crop insurance
    continues functioning properly during uncertain conditions?
    First, Congress needs to ensure that USDA continues to run the
    program in a way that allows farmers the flexibility to adapt
    to potentially changing conditions.
        Second, Congress must ensure USDA has the ability to hire
    and retain those employees who can properly oversee extremely
    complex insurance products. In conclusion, I would like to
    thank this Committee for the opportunity to be here today. I
    look forward to answering any questions you may have for me.
        Chairman Whitehouse. Thanks very much, Mr. Willis.
        Over to you Mr. Larsen.

                      STATEMENT OF MARTIN LARSEN,
          LARSEN FAMILY FARM AND BRYON AREA FARMERS GROUP \4\
    ---------------------------------------------------------------------------

        \4\ Prepared statement of Mr. Larsen appears in the appendix on
    page 41.
    ---------------------------------------------------------------------------
        Mr. Larsen. Thank you, Chairman Whitehouse, Ranking Member
    Grassley, and members of the Committee for the invitation to
    speak with you today. The Larsen family has been farming near
    Byron in southeast Minnesota for five generations. Parts of it
    have been in continuous ownership of my family for seven
    generations, and my son will be the eighth. He's sitting behind
    me here today.
        In addition to corn and soybeans, we raise food grade oats,
    barley, and forestry, including a sawmill. I also work off the
    farm for Olmstead County Soil and Water Conservation District.
    I was raised, as many farm kids are, and started helping with
    field work when I was 13. I worked on a farm after high school
    and put in my sweat equity.
        In 2010 I took on the decision making role as my father and
    uncle began phasing into retirement. I can share my experiences
    in farming in southeast Minnesota in my lifetime, and I am
    fairly alarmed at the frequency and distribution of adverse
    weather events in southeast Minnesota.
        We are experiencing broken weather records most years,
    potentially multiple, and records may be broken by large
    amounts. It may be from flooding, snow, cold, hot, dry, winter
    derechos, summer derechos, and all things in between. It feels
    something like this. If I put one hand in ice water and the
    other in the oven, I'm on average, an average temperature
    right? An average moisture.
        Weather data indicates we are getting wetter on average.
    However, these precipitation events often come in short
    duration, and that high intensity rain is too much for most
    soils to handle, which is leading to increased erosion and
    flash flooding, such as this spring.
        Much of my region received nearly six inches of rain in the
    second week of May, and not a drop since. The planted corn and
    soybeans were vulnerable, and many acres needed to be
    replanted. In fact, that's what I did Monday night prior to
    boarding the plane to come here yesterday.
        I recall the flooding in August of 2007 when the nearby
    community of Hokah received 15.1 inches of rain in 24 hours. At
    home I received just under 7. Historically annual precipitation
    in my area is a little over 30 inches. In a number of recent
    years, we have received nearly twice that. In May of 2013,
    which has probably shaped my farming practices more than any
    other event was a snowfall that took place in southern
    Minnesota in those first few days of May.
        We received nearly 14 inches of wet, heavy snow. We were
    supposed to be planting corn, but instead we were shoveling
    roofs to avoid collapse, rescuing new calves, and plowing out
    neighbors. This was my first widespread experience with
    accessing prevent planting coverage within USDA's Risk
    Management Agency Crop Insurance.
        Almost half of the region's crops were never planted. And
    of course, there are costs to these events. There's costs to
    our infrastructure, such as building collapse or floods. There
    are costs to our agricultural production, such as in 2019 there
    was a 50 percent reduction of yield in Olmstead County.
        Wildfire and hurricane indemnity plus program, as well as
    large crop insurance indemnities were accessed, so that we
    could bridge the enormous loss of production. There are costs
    to our soils due to the increased erosion. The soil is our most
    valued asset as a farmer, such as Bryan and I were discussing
    before the hearing here about land values, but that fertile
    soil only adds value to us when we can grow crops into it.
        And it is only a cost to the water bodies and communities
    when it moves downstream. Most importantly, there are costs to
    our mental health. No one wants to talk to a farmer who lost
    their Freestall Barn like I did in 2019, and had to find new
    homes for the cattle. They had to clean up the building and
    negotiate with the insurance company, and it clearly took its
    toll on him.
        Of course, this changed the way I farmed. Climate
    resiliency is now something I, and many other farmers in the
    region plan for. And we've integrated large scale farming
    practices to battle the extreme weather. It could be cover
    crops, but also changing from a corn and soybean rotation to
    multiple crops in our rotation.
        We meet as a binary of farmers group to discuss about these
    experiences, and that group is diverse, and covers not just
    small farmers, but large farmers as well.
        In conclusion, weather extremes will increase the risk for
    farmers, and their increased costs associated with reduced crop
    production, crop insurance indemnities and infrastructure
    damage, and encourage that the Committee to take these--my
    comments and my testimony into account, and thank you for
    having me here today.
        Chairman Whitehouse. Thank you Mr. Larsen. We turn now to
    Mr. Johnson.

                      STATEMENT OF BRENT JOHNSON,
                    PRESIDENT, IOWA FARM BUREAU \5\
    ---------------------------------------------------------------------------

        \5\ Prepared statement of Mr. Johnson appears in the appendix on
    page 46.
    ---------------------------------------------------------------------------
        Mr. Johnson. Good morning, Chairman Whitehouse, Ranking
    Member Grassley, and distinguished members of the Committee. My
    name is Brent Johnson. I'm a fifth generation farmer from
    Calhoun County, Iowa, and a certified crop adviser of 25 years.
        I founded my own independent crop consulting business where
    I've worked with thousands of farmers to meet their goals on
    over 1 million acres. I'm also the 14th President of the Iowa
    Farm Bureau representing 154,000 members. The United States
    leads the world in production and innovation.
        U.S. agriculture has always been the forefront of that
    innovation. America's farmers know that agriculture is a part
    of the solution to our climate challenges. On my farm we have
    implemented precision ag technology to provide our crops with
    precise levels of nutrients, exactly when and where its needed.
        In conservation tillage practices have evolved over time to
    include strip till, no till and cover crops. While the auto
    industry continues to test driverless cars, my tractors have
    autonomously done the driving on my farm for 15 years.
        My job of driving the tractor has been replaced by my job
    of making sure that the implement pulled by the tractor is
    working correctly and efficiently.
        Planter technology tells me exactly where I've placed every
    kernel of corn, the moisture content of the oil, and even
    adjust the planting population automatically. Sprayers have the
    ability to identify weeds, and spray them independently from
    the crops. I can utilize imagery from drones or satellites to
    monitor my crops, and if needed, make adjustments in real time.
        I can use telematics to virtually connect different farm
    implements, so they can work together. Every pass through the
    field is spatially recorded with multiple layers of
    information, and that data is automatically sent back to my
    farm office for further analysis.
        I have been fortunate to travel the world promoting U.S.
    agriculture, while also talking with farmers from across the
    globe, and I can assure you that Iowa farmers are literally the
    best at what they do. It is wellknown that Iowa is a
    world leader in agriculture production, but we're also early
    adopters and leaders when it comes to proven conservation
    practices.
        In terms of protecting the environment, Iowa ranks first
    nationally in Conservation Reserve program (CRP) acres as a
    percentage of area, as well as first in the use of buffer
    strips, grass waterways, filter strips, pollinator habitats,
    bio reactors, saturated buffers and constructed wetlands.
        We rank third in no till acres, and first in conservation
    tillage. Iowa also has nearly 3 million acres of cover crops
    and over 506,000 terraces that stretch over 85,000 miles. In
    terms of protecting our water, farmers have reduced phosphorus
    lost by 27 percent. Nitrogen use has not increased on Iowa
    farms since the 1980's, and now the use of that vital nutrient
    is also starting to trend down.
        These advancements are possible because of technology
    improvements in machinery, genetics, and a new horizon of
    biologicals and seed treatments that will help farmers continue
    to increase production, while simultaneously improving the
    environment.
        As you can see, farmers are certainly doing their part.
    Personally, I'm really proud of the progress that agriculture
    has made, and I'm amazed at the speed of adoption and depth of
    innovation that is bred on farms across this country. Our
    history shows a track record of progress that is hard wired
    into the soul of farmers.
        Like mine, most farms in Iowa are true, multi-generational
    family farms. Iowa producers are active participants in
    government and voluntary programs, but burdensome regulation
    will drive consolidation, remove creativity and innovation, and
    ultimately impede sustainability progress. My ask of you is to
    help us continue to make progress in sustainability.
        Help us by advancing technology. Help us by funding
    research. Help us by allowing multi-generational farmers, who
    are literally the best in the world, do their job even better
    for years to come. Thank you.
        Chairman Whitehouse. Thank you very much Mr. Johnson. Mr.
    Sievers.

    STATEMENT OF BRYAN SIEVERS, CHIEF OPERATING OFFICER OF SIEVERS
     FAMILY FARMS, AND DIRECTOR OF GOVERNMENT RELATIONS, ROESLEIN
                         ALTERNATIVE ENERGY \6\
    ---------------------------------------------------------------------------

        \6\ Prepared statement of Mr. Sievers appears in the appendix on
    page 50.
    ---------------------------------------------------------------------------
        Mr. Sievers. Good morning Chairman Whitehouse, Ranking
    Member Grassley, and the Senate Budget Committee. Thank you for
    offering me the opportunity to discuss new stewardship
    practices that farmers are implementing on their farms and
    ranches, are leading the way, and are changing agricultural
    landscape.
        My name is Bryan Sievers. My wife Lisa and I operate a
    diversified grain and livestock farm in eastern Iowa. We own
    and operate a 2,400 head beef cattle feed lot, and raise corn,
    soybeans, hay, winter wheat, cover crops, and native prairie
    grasses on approximately 2,000 acres.
        Along with our partner, Roeslein Alternative Energy, we
    also own and operate an on farm anerobic digester, which
    processes the livestock manure from our cover crops, to produce
    renewable energy and sustainable, natural, renewable
    fertilizers for our farmland.
        The relationships we've established with Roeslein
    Alternative Energy, and its founder Rudy Roeslein, along with
    organizations such as the American Bio Gas Council. Solutions
    from the land, the Iowa Smart Agriculture Group, Iowa State
    University, and Penn State University's Grass to Gas Grant
    Program, and a large number of conservation and wildlife
    organizations, veterans' groups, and commodity trade
    organizations, will help grow the opportunities to enhance
    stewardship in our farming and livestock operations in the very
    near future.
        This coalition has increased significantly as scientific
    study of anaerobic digestion has demonstrated the benefits from
    biomass harvest and processing of winter hearty cover crops,
    such as cereal rye, along with the biomass feedstocks from our
    new, or previously established native prairie, along with a
    more traditional feedstocks, such as swine, dairy, and beef
    cattle manure and food waste.
        These recent advances in science, research and
    technologies, coupled with the new federal incentives, will
    allow the anaerobic digestion industry to grow significantly in
    the near future. The growth will allow the agriculture sector
    to provide significant, yet practical solutions to enhancing
    soil health, water and air quality, food security, energy
    security, environmental and ecological services, wildlife
    habitat restoration, and carbon sequestration efforts.
        If I told you there was a way to increase farm
    sustainability and urban recycling, reduce municipal costs, and
    produce renewable energy in many different forms, plus fossil
    fuel free fertilizers, would you say it's worth supporting? All
    of this and more is what anaerobic digestion technology offers.
    And we need to do more to embrace it.
        Putting it on par with other renewables from a policy
    standpoint, but also recognizing that these anaerobic digestion
    systems offer communities so much more than just renewable
    energy. Digesters are unique in being able to produce an all of
    the above set of solutions with respect to energy production,
    while also returning all of its organic inputs back to the soil
    to improve soil health including soil carbon, organic matter,
    fertility, microbial activity, ecological services and wildlife
    habitat.
        Anaerobic digestion is unique with this ability to provide
    multiple benefits, including economic security, energy
    security, food security and fertilizer security, while also
    addressing our changing climatic conditions. While enhancing
    the health of our soils, our water and our natural resources, a
    growing bio gas and anaerobic digestion industry can also
    provide vibrant, exciting new ways for rural economic growth,
    development and job creation, using recent advances in the
    technology of anaerobic digestion of organic feedstocks.
        There are few policies that can help ensure Americans can
    benefit from these wide ranging solutions, which stem from a
    circular approach to agricultural production. While
    approximately 500 farm based anaerobic digesters have been
    built in the U.S. so far, we see the opportunity for at least
    8,000 more systems to be built.
        The energy and conservation titles of the 2023 Farm Bill,
    including the Rural Energy for America Program (REAP) Program
    and its under-utilized technologies reserve are key to this
    deployment, and need full funding. Cuts to the grants, or loans
    portion of the REAP Program will reduce rural investment in
    jobs and sustainability.
        Farmers and small businesses around the United States
    believe the REAP Program is a model for public, private,
    partnering, which promotes rural economic development and
    environmental stewardship with common sense flexibility.
    Finally, we recognize that many of the Senate Budget Committee
    members will also be active in Farm Bill deliberations, and we
    ask you to support and incentivize Farm Bill changes that allow
    the use of CRP acres as a feedstock for on farm anaerobic
    digestion.
        The current policy on CRP acres has not kept pace with
    innovation. We also ask that winter hardy cover crops, such as
    cereal rye, are recognized by Congress as a cellulosic
    feedstock under the renewable fuel standard, so they can be
    fully and fairly utilized in anaerobic digestion systems, and
    provide renewable transportation fuel.
        Mr. Chairman, our ask of the Senate Budget Committee and
    Congress is simple. Evolve our policies in these ways to keep
    up with the innovations in agriculture, modern stewardship of
    our lands, and renewable energy production, so our industry can
    deliver multiple economic benefits and ecosystem services to
    Americans.
        Mr. Chairman, Ranking Member Grassley, thank you again for
    the opportunity to provide this testimony, and I look forward
    to answering any questions you might have.
        Chairman Whitehouse. Well Mr. Sievers, your pitch to
    members of the Ag Committee could not be more timely with
    Chairman Stabenow here in order to take advantage of her being
    here what I'm going to do is swap my time for her time, so I
    will go back into the line and recognize first Chairman
    Stabenow, then Ranking Member Grassley, and on through the list
    of the rest of the attendees, and I'll plug myself in in
    Senator Stabenow's spot. So with that, let me turn to the
    distinguished Chair of the Ag Committee.

                     STATEMENT OF SENATOR STABENOW

        Senator Stabenow. Thank you so much. And thank you, Mr.
    Chairman, and Ranking Member, for doing this really important
    hearing. It's so great to see all of you, and I get excited
    listening to the innovation and research and the things that we
    can continue to do, and of course Senator Grassley is a senior
    member of the Committee, a very important voice as we are
    drafting the 2023 Farm Bill.
        I also want to give a shout out to Iowa farmers, no
    questions, congratulations on leading the way. Michigan farmers
    are pretty good too though, I would just say. We're working
    hard as well. But from my perspective, and I know for all of
    you, I mean nobody is impacted more by what's happening on the
    weather from the climate crisis than farmers. Nobody else has
    to get up every morning and look at the weather and figure out
    what's going on, like all of you have to do.
        And it is very concerning to me as we watch this going
    forward, so I appreciate all of your leadership. We know across
    the globe that climate crisis has slowed the growth of
    agriculture productivity. And meeting with farmers around the
    world I certainly have those conversations.
        Extreme weather events destroying crops with alarming
    frequencies. We know the fires, the droughts, the floods in
    Michigan where we grow a lot of specialty crops, a lot of fruit
    trees. We've certainly seen climate driven weather that brought
    the buds on the cherry trees out in February, and then a deep
    freeze in March, and wipeout the crop.
        And so we see this over and over again. And in Michigan,
    frankly, Lake Superior is now one of the five fastest warming
    lakes in the world, which for us is a pretty frightening thing
    to see as well. We know that the crisis has taken a costly toll
    on farmers, which is why I appreciate the Budget Committee
    doing this hearing.
        Financial blows, personal heartbreak, unpredictable weather
    destroying their crop, and we have in fact had as our major
    risk management tool, federal crop insurance. And so, I know
    this is widely used. There are other important pieces of the
    Farm Bill, but this is widely used.
        And we know, and Mr. Willis, I appreciate your work and all
    your many hats over the years, but the USDA has noted that
    costs are going up, and if we don't get our arms around this
    and get, you know, aggressively focusing and supporting your
    efforts, they're going to continue to go on.
        And frankly it's not enough just to assist farmers after
    there's a storm or a drought. We do that. We have put 90
    billion dollars in the last few years, Mr. Chairman, into
    disaster assistance, which is related to what's happened around
    trade with China, or COVID.
        We're good at putting it in after. We need to be supporting
    on the front end, and that's why what we did last year was so
    significant in the investments we did with what we have dubbed
    climate smart agriculture, and climate smart forestry, which is
    what all of you are doing. I mean that's what we're talking
    about, doubling down so more people can sign up for
    Environmental Quality Incentives Program (EQIP).
        More people can sign up for Regional Conservation
    Partnership Program (RCPP), or use, you know, CRP and so on.
    That's really what we're doing. The other thing that we did,
    and also we added more money to REAP. I was so pleased to hear
    you talk about that, very, very important for growers, and we
    need to make sure we're keeping that there.
        In the transition to clean renewable energy for our rural
    electric co-ops, which is a very significant piece of what we
    are doing around reducing costs, and reducing pollution. We
    also passed our bipartisan Growing Climate Solutions Act, which
    our Chairman was a significant partner in getting done, which I
    hope is going to make sure that USDA is going to help provide
    more market incentives, and innovative approaches to deal with
    carbon sequestration and so on.
        All of that to say let me move to a couple of questions. So
    glad to see farmers on the panel, and Mr. Larsen let me ask.
    You talked about the importance of planning for climate
    resiliency through crop diversification. So I wonder if you
    might talk more about that. Do you think it's important for
    Congress to explore policy options to help farmers wanting to
    diversify their operations, or do you think at this point it's
    just a matter of making those choices?
        Mr. Larsen. Yeah. Thank you. So, there's a couple ways to
    look at that from my perspective, and one is that crop
    diversity puts vulnerable times for yield production at
    different times of the year. So in the corn belt, and the grain
    belt we see that July makes the corn, August makes the beans.
    What time of year makes the oats? Like my oat crop, which right
    now is they're making grain.
        And oats frankly don't care about a dry August because
    they're in the grain bin, and they're getting processed in the
    food, so that's one way to manage risk from a farmer's
    perspective. From a policy perspective, we need to look at the
    ease of transition from a farmer who's looking at growing a
    crop outside of corn and soybeans, and the ease in which they
    can implement that.
        So in my area we have very good Actual Production History,
    (APH's) on corn and soybeans. That is our proven yields on corn
    and soybeans. But if we were to step outside of those proven
    yields into a crop we haven't grown before, such as oats, or
    something else, we don't have that protection of a good APH. So
    we need some kind of bridge programs to get us into growing
    something different.
        Or we also need to look at the market side of it too, so
    that there is opportunities, grants, et cetera to go to the
    market side of what we can grow in the corn belt. Because we
    grow corn and soybeans doesn't mean that we can't grow a
    plethora of other crops. We can. If that market existed, and
    profitability was there, risk mitigation from a farmer's
    perspective was there, we would do it.
        Senator Stabenow. Thank you. If I might just have just very
    quickly Mr. Willis, and we can follow-up on this. But you
    talked about crop insurance, and making sure that we don't have
    policies prohibiting the ability of farmers to adapt to climate
    change. And I wondered are there things we need to be doing to
    make it easier to use crop insurance, and at the same time
    adapt to the conservation practices that we want to have
    happening?
        Mr. Willis. First of all, let me just say thank you for
    everything you have done, and continue to do for agriculture.
    You've been a tremendous Chair, and I appreciate it. You've
    been a champion.
        Senator Stabenow. Thank you.
        Mr. Willis. You had a Farm Bill provision on cover crops. I
    think that was a very positive thing, and I think USDA
    obviously doing what they can on cover crops. It's an ever
    evolving issue. The other panelists have talked about all the
    innovating things they are doing, and so I don't think there's
    a simple answer. I think the simple answer is well Congress has
    oversight, and I would exercise that, and make sure that USDA
    is keeping up with the newest practices, so that farmers never
    have to make a decision between crop insurance, and doing
    something beneficial for the environment.
        Senator Stabenow. Thank you, Mr. Chairman. I very much
    appreciate your letting me go first today, and I'm running over
    to the Agriculture Committee now, where we have a hearing going
    on, so thank you.
        Chairman Whitehouse. Very happy to do it. Now I turn to my
    Ranking Member, and a distinguished Senior. Have you chaired
    the Agriculture Committee also?
        Senator Grassley. No. It's my third committee, and I'm way
    down on seniority. Yes, that's right. Yeah.
        Chairman Whitehouse. So from Ag to Ag you're doing very
    well here Mr. Sievers. Ranking Member Grassley.
        Senator Grassley. Anyway, I think you answered my first
    question because it's going to be how long your family has been
    farming. You said fifth generation. You went into the
    innovative practices that you've done. I think you've touched
    on this a little bit, but I'd like to have you emphasize for
    the Committee how precision agriculture increased your crop
    yields, and at the same time protected the environment.
        Mr. Johnson. Yeah. Thank you Senator. Yeah. So I am a fifth
    generation farmer. Actually my great, great grandfather
    established our farm in 1893, so and he came from a farm in
    Germany, so our family history in agriculture goes back multi,
    multi generations.
        So, as far as adopting precision agriculture on our farm,
    it's become a necessity, you know, when it comes to management
    of agriculture. So as many of the panelists have described
    already, the risks are great, and growing, so the ability to
    make progress to me starts with measurement and management.
        So, if I can't measure it, I can't make progress. So the
    ability to adopt precision agriculture, you know, we've walked
    through the steps as technology has come through the
    generations. When I was a little kid technology meant how much
    tillage could you do? And I remember being in a tractor with a
    plow, and to be a good farmer you had to turn your fields
    black, because that's the technology that we had.
        Fast forward, my family adopted conservation tillage, and
    now as I started farming we've adopted strip tillage, and no
    tillage, and so the progress comes with technology
    advancements, and that also includes the ability for the seed
    in genetics to be able to handle that, and the ability to
    manage machinery properly, and find those efficiencies.
        And so to measure what's happening in the field, understand
    where the parts of the field can actually do better than
    they're doing today, and other parts of the field that, you
    know, we don't need to spend so much money or time, or inputs
    on because the potential just isn't there. It allows me to
    focus dollars, and that allows me to then manage my risk in a
    way to manage these inputs.
        Agriculture has so many aspects about it that are not in
    our control, and when you do find those things the best
    managers take those opportunities and manage those as best you
    can, and for me precision agriculture has allowed me to
    increase my yields, while reducing my inputs, so my efficiency
    numbers have actually been growing.
        There is a measurement that some farmers use that's the
    nitrogen use efficiency number. The old rule of thumb used to
    be it takes 1.2 pounds of nitrogen to produce a bushel of corn.
    Through precision agriculture I have found parts of my field
    where I have been able to reduce that number down to a half of
    a pound of nitrogen per bushel.
        It's not everywhere in the field, so when I find those
    areas I can manage that properly, and so that's where precision
    agriculture for me plays a huge impact into risk mitigation,
    and my ability to do my job even better next year.
        Senator Grassley. Mr. Sievers, let's talk about anaerobic
    digesters. What are the ecological benefits provided by them,
    and how do you anticipate bio gas being used in the future as
    part of the what you call all of the above energy strategy.
        Mr. Sievers. Thank you, Senator. I'll give you the short
    answer when it comes to ecological services first. Really
    that's the benefits that humans derive from nature or natural
    resources, and you know, more specifically the goods and
    services that are provided by those natural resources or nature
    from those ecosystems.
        And so, I can give you an example, and this is where the
    real aha moment came for me when I implemented anaerobic
    digestion was that as we evaluate the grid soil sampling that
    we've conducted on our farm for many years. We obviously
    noticed that our soil organic matter levels had bottomed out if
    you will, in that three and a half to four percent range back
    around 2010 and '11.
        When we started using the material that comes out of our
    digesters, which is what we referred to as digestate, and we
    use that as our soil amendment to help improve our fertility to
    meet the needs of our corn, soybean crops, we noticed within
    five years our organic matter contents were starting to go back
    up.
        You know, that reverses a 150 year trend, and that was
    rather significant. When you could take organic matter contents
    at 3 and a half to 4 percent and increase those to the low 5
    percent range, in just 5 to 7 years after implementing that
    practice. That was significant. Those are benefits that are
    going to be paid forward for many, many generations. That's an
    ecological service, and a benefit we have provided to the
    public.
        How do you measure and monetize that? That's the challenge.
    That's where we think carbon credits come into play. So that's
    one area where I've, you know, been able to identify and
    recognize the benefits from using the fertilizers that we
    produce right on our own farm. We've eliminated essentially
    synthetic fertilization for our crops on almost 2,000 acres,
    and not just our 2,000 acres, but actually another 1,500 acres
    in our neighbor's farms and fields around our facility as well.
        In the future I think there's several pathways. One is to
    be able to use bio gas as a renewable--as you scrub that and
    clean it up, and produce renewable natural gas it becomes an
    alternative to potentially bio diesel, or renewable diesel.
    There are certainly cost advantages to renewable natural gas as
    compared to diesel fuel. We see costs that are in the range of
    40 to 50 percent less on a per unit MMBtu unit, so there's
    certainly some real economic benefits to using the renewable
    natural gas.
        But we also understand that there's challenges to using
    renewable natural gas, however, being able to use our existing
    pipeline system for that renewable natural gas is a tremendous
    benefit that can be provided. We have an extensive well-
    connected natural gas pipeline system in this country. Let's
    use it through the utilization of renewable natural gas.
        But even more importantly, we can also see bio gas used as
    what we can an intermediate, or bio intermediate in the
    production of bio diesel, or renewable diesel, or even ethanol.
    So and for Iowa, for example, where we have the 43 ethanol
    plants, and about 10 different bio diesel plants, that input of
    bio gas can help drive down the carbon intensity of those
    renewable fuels as well, so it's very flexible in the benefits
    that can be derived, it can be used as an input on the supply
    side in the production of other renewable liquid transportation
    fuels.
        It can also be used directly as a liquid renewable
    transportation fuel, but then finally another option is to use
    it as electricity as a way to fuel electricity for electric
    vehicles. That certainly is controversial right now. We had
    hoped that there would be an electric renewable identification
    numbers (eRINs) proposal coming from the EPA under the set
    rule. It does not look like that's going to be forthcoming in
    the June 14 Renewable Fuel Standard (RFS) announcement, but we
    do anticipate that there would be continued work.
        And we think that the electricity provides options to bio
    gas producers who are isolated. They are maybe have stranded
    assets where they can't access a pipeline with their bio gas
    renewable natural gas. And when you look at the number of
    digesters that are currently on farms right now, close to 500
    that I mentioned earlier, the vast majority of those are still
    producing electricity with their bio gas.
        And so, being able to utilize that electricity for that
    particular purpose would save significant investment for those
    farmers by being able to produce electricity from the bio gas.
    So that's still an option that I think we need to keep in mind,
    and we hope that the EPA can move forward with a very fair and
    equitable approach to integrating eRINs and bio gas from on
    farm and/or digesters.
        But right now, the pathway for bio gas is certainly through
    renewable natural gas, and/or used as a bio intermediate in the
    production of other renewable transportation fuels.
        Senator Grassley. Thank you, Mr. Chairman.
        Chairman Whitehouse. You are most welcome Senator Grassley.
    Next is Senator Lujan.

                       STATEMENT OF SENATOR LUJAN

        Senator Lujan. Thank you Mr. Chairman, and to our Ranking
    Member for this hearing, and I want to thank everyone for
    making time and coming out today as well. Now crop insurance is
    an important risk management tool that farmers and ranchers
    across this nation rely on to ensure their livelihoods, and not
    put at risk when adverse weather impacts that year's crops.
        I am excited to be working with several other members of
    this Committee on strengthening these programs for the Farm
    Bill. Now today however, I want to focus on how climate change
    impacts our farming and ranching communities, and the resulting
    cost challenges. I have argued that many federal programs were
    not drafted with dry states like New Mexico in mind, but that
    is a conversation for a different day, and for a different
    Committee.
        Producers in New Mexico are already seeing firsthand how
    their coverage is being impacted by long-term drought through
    policies such as the One in Four Rule, which removed a
    producer's coverage when they were experiencing prolonged
    periods of drought.
        As you all know the One in Four Rule is written for I think
    one state in particular, down in the southeastern part of our
    beautiful country. It's a little wetter down there than it is
    for where I come from. I'm grateful that the rule has since
    been temporarily waived for some western states, but farmers
    and ranchers will face similar challenges in the future as
    extreme droughts only grow as a problem.
        Now, Mr. Willis, yes or no, as climate change patterns
    persist will the current risk management tools, such as the
    Federal Crop Insurance Program remain an important safety net
    for the farmers and ranchers?
        Mr. Willis. Yes.
        Senator Lujan. My follow-up there comes from a perspective
    of farmer to farmer issue. As climate change patterns persist
    our farmers and ranchers must be provided with the support and
    tools they need to combat climate change, while ensuring the
    health of their operations.
        Just as important though, as information sharing and
    promotion, especially as new techniques and resources are made
    available. Now Mr. Larsen, I appreciate in your testimony that
    you mentioned the importance of farmer to farmer learning, and
    how that has helped the farmers and ranchers in your community
    adopt soil health practices.
        Mr. Larsen, how can farmer to farmer education help farmers
    not only improve the climate resiliency of their own
    operations, but in turn lower USDA program costs?
        Mr. Larsen. Thanks. You know the Byron Area Farmers Group
    started meeting at the local restaurant, just a few handfuls of
    us. And we started sharing our experiences in good and bad,
    right? And you know, 2013 was our first experiences in our
    region with cover crops.
        We didn't know if they would plug our tile lines. You know,
    the rumors were just as strong as the benefits, right? So,
    about 2015-2016 the small handful started to grow to 28 to 50
    of us meeting now, this year. In fact, we just met on Monday as
    well, Monday afternoon.
        And that information sharing is so important. Now, I work
    for the Conservation District for the local government, and
    farmers have some apprehension when a government employee of
    any size, of any levels says I'm from the government and I'm
    here to help, right? We kind of clam up a little bit. So,
    farmer to farmer is important because many of us grew up
    together, we farmed together our whole life.
        And we can share openly what we're doing. And especially
    when there's a purpose of meeting, and that's to share our
    conservation stories, our no till, our alternative crops, our
    cover crops experiences because it takes the edge off of that
    fence row pressure, that is one farmer looking over the fence
    at the other farmer, and wondering what they're up to.
        So we can share with, you know, our guard down so to speak.
    And it does lower the cost from a federal perspective because
    the more we're doing on the ground level, the grass roots
    level, the more that that can foster. Because we're talking
    about, you know, change. You know, we would like change at a
    great scale, right?
        But grass roots change is where a lot of change starts. And
    it could start at a restaurant in Byron, in southeast Minnesota
    in that information sharing. Now it does take knowledgeable
    staff from whether it be USDA or local government, or other
    agencies to help us study, so that we know which practices are
    most beneficial for the environment, beneficial for us as
    producers.
        And there is companionship with technology. The two don't
    isolate one another. The two can work together, but in some
    cases technology isn't enough to reach the goals that we want,
    and in some cases soil health alone isn't enough to reach the
    goals we want, so it is a combination of all these factors,
    including the small groups of farmers and fostering those
    groups, and adding energy to them.
        Senator Lujan. I appreciate that. And Mr. Chairman, I just
    wanted to share one observation from home. As you know, home
    for me is in New Mexico, western state. It's a little dry down
    there on a good day. And the drought has been hitting us
    horribly over the last few years.
        But what we've also seen as a result of climate, Mr.
    Chairman, is the forests are drier longer. It's not just that
    they're dry up on the surface, but all of that spongy, really
    good stuff that falls from the trees and whatnot, it's usually
    wet, and the fire rolls on top of it if a fire hits.
        This year what we saw is it was so dry the fire duck
    underneath the ground, not through a tree root, would just duck
    under that canopy and shoot. You didn't know where it was going
    to pop back up as well. So while drought is a major concern to
    us as well.
        The other side of this is once you have an episode like
    that, or it's so dry that all the good stuff dries up, and is
    not holding the dirt back anymore, what a normal rainfall can
    be turns into a hundred or 500 year episode, and that mountain
    shed, that water shed, instead of it holding back that water
    it's like a ice rink. Once that water hits it, it goes. And
    it's just devastating.
        And right now we're seeing farmers, producers all over New
    Mexico that are impacted by what I just described, being
    devastated when we're blessed with rain. And it's just it's
    terrifying to see, so I really want to thank you for this
    hearing as well, and I want to thank the witnesses for coming
    in. This is a very serious issue, and one that matters to New
    Mexico, western states, but all of America and around the
    world. Thank you Chairman, thank you to our Ranking Member.
        Chairman Whitehouse. Well thank you, Senator Lujan. I don't
    think you could have teed up a better segue for your colleague
    from California than you just did, so with that let me turn to
    Senator Padilla.

                      STATEMENT OF SENATOR PADILLA

        Senator Padilla. I think that might even have been
    intentional. This 10 X, 20 X, however you want to scale up, but
    that's precisely an issue starting with when forest fires act
    like brush fires. You can just imagine the devastation. But
    thank you all for participating in today's hearing.
        As members of this Committee we need to obviously consider
    the economic impacts of extreme weather events holistically,
    including the many indirect costs to the agricultural industry.
    And I want to lead by referencing farm workers, who often bear
    the brunt of indirect costs associated with extreme weather
    events, which includes, but is not limited to severe storms,
    floods, droughts, wildfire, and extreme heat.
        You know, we saw this in California when recent flooding
    devastated large swaths of strawberry fields in the towns of
    Pajaro and Watsonville. It was farm workers who waded through
    flooded fields, or were forced to go without pay, are still
    being forced to go without pay because of lost crops.
        Mr. Willis, how often and to what extent do you believe
    federal agencies and programs factor in the incorrect costs of
    climate change in the agricultural industry such as loss of
    livelihoods, exposure to various health threats, and lost
    productivity?
        Mr. Willis. I want to make sure that I understand the
    question, so I don't answer it incorrectly. How often does a
    crop insurance program take those things into account? Is that
    the question, sir?
        Senator Padilla. Yeah. That's just that specific program,
    but programs in general, departments and agencies in general.
        Mr. Willis. I think every program is a little bit
    different. The crop insurance is very focused on the value of
    the crop and trying to compensate for that, but other crops of
    the Department of Agriculture I think have a broader purpose to
    them, to be very blunt on that, but the crop insurance really
    doesn't take those into account.
        What it does do though, I think is provide a lot of
    confidence for those growers who, you know, if you don't have
    crop insurance, you're going to make some decisions, letting
    people go off, et cetera, but you might take a much harsher
    reaction than crop insurance. So I think it provides somewhat
    of a buffer financially for producers, and benefits the other
    industries involved, and the other people involved.
        Senator Padilla. In the example I gave is when the floods
    right, that leads to lost crops, so therefore less of a need
    for the workforce to harvest. And what happens is the results
    are those individuals and those families that go without wages,
    but the community in general, goes with a declining tax base
    because of weather, same on the drought side of the equation.
        So any thoughts or suggestions on how to improve these
    federal programs to be more effective reaching out to workers
    and their greater community that relies on seasonal, or even
    permanent agricultural jobs?
        Mr. Willis. The best answer I can give you is probably
    USDA, and they have individuals, probably need to continue to
    do outreach for those sectors. That's a little out of my area
    of expertise, and that's about all I would dare say sir.
        Senator Padilla. Well I appreciate the honesty. But sadly I
    think it's a little out of the expertise, or the attention of a
    lot of federal employees because of the programs, the agency
    that they work in. A follow-up question on a more specific
    topic. California proudly produces 80 percent of wine in the
    United States, and single handedly is the fourth largest
    producer globally.
        But the vineyards, winery operations, and the jobs in the
    communities that they support are now routinely facing the
    threats of wildfires, and trying to deal with the impacts of
    wildfire smoke, which creates an ashy taste known as smoke
    taint, when absorbed into the grape.
        For growers in the northeastern part of the country,
    they're looking up at the skies right now, and looking at the
    smoke coming in from Canada. The impact of smoke isn't always
    predictable. It depends on how long the smoke lingers. The
    variety of the grape, and a number of smoke events, which is
    why Congress provided the Department of Agriculture four and a
    half billion dollars to research the impact of smoke exposure
    on grapes and wines.
        So Mr. Willis, for an industry that generates more than 170
    billion dollars in annual economic activity, and by one
    estimate suffered 3.7 billion dollars in losses in 2020 alone,
    do you believe Congress can do more to assist researchers to
    help protect this vital industry?
        Mr. Willis. I'm going to talk about crop insurance because
    one of the advantages of crop insurance is you do not have to
    wait every five years for a Farm Bill. USDA has the authority
    to adjust those programs to take into account new problems that
    are, you know, coming about, and they have a shorter timeline.
        And so, I do think there are things they can do to address
    those types of situations, and I think crop insurance is a good
    tool because they can take the data, they can take the
    research, they don't have to wait for a Farm Bill, they can
    adjust the policy so that it provides--and so it's more
    responsive.
        Senator Padilla. Thank you, and then I know my time is up,
    Mr. Chairman. I just have one follow-up item. I know the
    general topic of crop insurance has come up, including with
    Senator Stabenow, who Chairs the Agricultural Committee, but
    can you comment specifically on how it works for specialty
    crops which are different than non-specialty crops obviously?
        Mr. Willis. Certainly. Crop insurance started strong in the
    Midwest over time. There has been a significant effort there.
    There was when I was there, and I know there still is, to try
    to make crop insurance continually work better for specialty
    crops, fruits and vegetables.
        I think somebody in your shoes continually to encourage
    USDA to talk to those groups, to do those listening sessions in
    areas. There is improvement that needs to be made, but I can
    tell you from the seat I used to have it is challenging to know
    exactly what to do because the risks they suffer are not the
    same risks that the Midwest suffers.
        Senator Padilla. And they're called specialty crops. Thank
    you Mr. Chair.
        Chairman Whitehouse. Senator Kaine.

                       STATEMENT OF SENATOR KAINE

        Senator Kaine. Thank you Mr. Chairman. Thank you for
    calling this hearing, and to the witnesses for coming. I'm
    frustrated because I'm not on the Ag Committee. I wish I was.
    Ag and Forestry is the number one industry segment in Virginia.
    Most people would think it was high-tech or ship building, and
    those are big industries, but ag and forestry is still number
    one.
        Our state suffers, the primary climate challenges we suffer
    in Virginia are sea level rise in the eastern portion of
    Virginia. And then extreme rain events that aren't changing the
    amount of rain we get annually, it's just coming in much more
    violent episodes, rather than kind of smoothed out over the
    course of the year.
        But I actually want to take advantage of you for a
    different reason because you're all experts in farming. If I
    talked to my Farm Bureau and farmers around Virginia. The
    number one issue that they bring up these days is immigration
    reform. They bring up boy it's really hard to hire the people
    that we need. So let me just start there. How important is a
    workforce from other parts of the world, other countries, the
    United States, to having a successful American agriculture
    economy?
        Mr. Sievers. If I might?
        Senator Kaine. Yeah.
        Mr. Sievers. Senator, thank you. Certainly there are
    industries within agriculture that are very dependent,
    certainly the dairy, swine industry have become very dependent
    on immigrant labor. But on the other hand I think it varies,
    certainly by region, and operation. When I look at our own
    operation I actually take a lot of pride in the fact that the
    six full-time employees that we have on our farm all grew up in
    the area, and probably wouldn't be farming themselves if it
    weren't for a job opportunity that we provided on our farm for
    them.
        So I think that that sentiment, or approach to job creation
    is very important. We need to make sure we're providing jobs
    for the people in our communities, whether they be immigrants,
    or people that might have been born and raised on that farm,
    and may have gone elsewhere, if not for that job opportunity.
        So the immigrant labor is very important, but we need to
    make sure that those job opportunities exist.
        Senator Kaine. That, and Mr. Johnson, I see you're the
    President of the Iowa Farm Bureau, and I know the national
    federation of farm bureaus, the U.S. Federation has a strong
    position in favor of significant reforms to the H2A program,
    maybe even doing something different because it's gotten so
    cumbersome for farmers.
        In addition to that, some additional focus on work visas.
    And I think the National Federation has taken the position that
    if we just enforce, like using E-Verify, or things like that,
    without doing significant revisions to work visas in the H2A
    program, we could have a significant negative impact on
    agriculture. Is that similar to the experience that you would
    have in Iowa?
        Mr. Johnson. So the experience in Iowa, first of all you're
    correct in your comments. The experience in Iowa for farmers,
    for most ag producers in Iowa, immigrant labor is important at
    an arm's length. They're employed at the processor level, some
    of those things.
        Senator Kaine. Right. Which is a sizeable industry in Iowa?
        Mr. Johnson. Absolutely. Absolutely, not diminishing it,
    but as far as farmers employing immigrant labor directly within
    Iowa, the business structures that we have don't require that
    at the processor level. Now I have had many conversations in
    the American level, the American Farm Bureau level as well. I
    actually went down to Arizona, and saw some of the lettuce
    fields, and some of those things, and to see that migrant labor
    come across and watch them come to the fields, understand what
    they're doing.
        And then the Port of Yuma actually, I think there's 15,000
    immigrants that come and go every day through that one single
    port. So immigrant labor is very important to those folks,
    clearly. But you know, the dairy industry, and Mr. Sievers is
    correct. It's regional, and it's industry, so I think it's a
    wide, broad topic.
        If you talk about labor to any fraction of any company
    anywhere, labor is a concern right now, and that includes labor
    from immigrant work force.
        Senator Kaine. I agree with you. There's no one thing
    that's going to fix these labor challenges. You know, America's
    birth rate is not going to dramatically change, and if it did
    we wouldn't see anything for 20 years, so I think immigration
    is a piece of it. There are others as well. Mr. Larsen, how
    about from your perspective in Minnesota?
        Mr. Larsen. Well it's a little outside of my wheelhouse. I
    do not hire anyone to help me get my work done. I'm kind of a
    one man show.
        Senator Kaine. You're kind of like our John Tester
    colleague here right.
        Mr. Larsen. Yeah. Jack of all trades and master of none.
    But I can say from my region, and my perspective that farmers
    do rely, it's particularly the dairy industry relies on some
    help from outside the borders of the U.S. And it actually has
    gotten much harder for the co-ops who supply us our inputs to
    hire help, and to have good applicators, to have good people on
    their team.
        So they have actually accessed outside of U.S. borders now
    too for help. And I do think that it will remain an important
    topic to continue to help us, particularly my dairy farmer
    friends, to keep help, you know, in their parlors and in their
    barns.
        Senator Kaine. Mr. Chair, could I ask if Professor Willis
    could answer the question too, just from your perspective as a
    professor of agricultural economics, how important is the
    immigrant labor force as part of having a healthy agricultural
    economy in this country?
        Mr. Willis. Obviously, it's huge. I can tell you I grew up
    on a sheep ranch. We had an individual from Peru herd the
    sheep. It was in a sheep camp up in the mountains all the time.
    And since my dad passed away I don't have a sheep ranch
    anymore, but it's a huge burden for the sheep producers who I
    talk to day to day. I think, you know, at the risk of putting
    some out of business quite frankly because of the challenges
    they face on that.
        Senator Kaine. Well it's my hope that we as a Congress will
    listen to our employers, who are all telling us they're having
    a hard time hiring, and we'll find a way to do some things in
    immigration reform, particularly focused on work visas, work
    related immigration that will enable an American economy to
    really rocket ahead.
        We just have an Infrastructure Bill, who's going to build
    it? We've just done a Manufacturing Bill. Who's going to make
    it? Immigration isn't the only solution--I think it's part of
    it. I appreciate you all coming here today, and thanks for your
    answers. I yield back, Mr. Chair.
        Chairman Whitehouse. Thanks, Senator Kaine. For my question
    let me turn first to Mr. Willis, as to whether climate smart
    agriculture is starting to show an effect in crop insurance
    claims?
        Mr. Willis. Specifically things just as cover crops, sir?
    Yeah. I mean there was a study put out recently, I think that
    looked at some potential benefits to cover crops as it related
    to prevent plant. I think we're kind of at the early stages of
    data that could, you know, of really great data.
        I know USDA has the pandemic cover crop program, and they
    would have the ability to align, yield data with those who
    utilize that as well. And so, I think we're at the beginning of
    some interesting things. I don't know that I dare say much more
    than that as far as you know, the benefits yet, but listening
    to the panelists it's very impressive to hear what they are
    doing, and the impacts it's having on their operations.
        Chairman Whitehouse. And again, on crop insurance we're
    seeing in the news State Farm and Allstate abandoning
    California. We're hearing about Florida coverage difficulties,
    and frankly defaults as insurance companies go bankrupt. What
    are the lessons for the Federal Crop Insurance Program that we
    should extract from that current news?
        Mr. Willis. I think the lesson is they need to stay on top
    of things. First of all, I have a tremendous amount of respect
    for those who oversee the crop insurance program. They've done
    a great job. I think their job is going to become more
    challenging in the future. You can see the last few years, it
    has become more challenging, even from the time that I left
    there. They're going to have to be ahead of the curve, have new
    programs that address new situations.
        They recently introduced a program a few years back for
    hurricane wind loss. Things like that are examples of where
    they need to be ahead of--to the extent they can, ahead of
    things so that we don't have major disasters that are not
    covered.
        Chairman Whitehouse. Yeah. And their colleagues in the
    flood insurance programs are going to have the same problems to
    see that we see very much in Rhode Island as a coastal state.
    Mr. Larson, most of the harvesting in Rhode Island is done from
    the sea, and when I go out with fisherman, trawlers, I hear
    things like this is not my grandfather's ocean anymore, or
    things are getting weird out there Sheldon.
        And you say in your testimony things aren't the way they
    used to be. Would you elaborate a little bit on what you mean
    by that?
        Mr. Willis. I think that there is widespread agreement in
    my region that we can just we can say that with some level of
    comfort. And it may be talking to our parents or their parent's
    generation if they're still alive, and so I just never recall
    anything like this before. That's pretty simple right? We can
    understand that. We can relate to that because those are our
    family members and our community members.
        Chairman Whitehouse. Yeah. This was a guy who started out
    working on his grandfather's boat, so same experience of passed
    on knowledge.
        Mr. Willis. Yeah. But then there's also, you know, the
    data. I am a data person. And, you know, we look at that as
    well, and that shows a pretty strong trend to that same phrase.
    And in December of last year, December 16th, we had our winter
    derecho. We had never recorded a tornado in the state of
    Minnesota prior to that in December, and we had over 20.
        And as my son and I were hunkered down in the house, and as
    it shook with 70 mile an hour winds that evening, and such
    widespread damage across the region to buildings, to CHS, our
    local co-op, it really resounded. Like no one had experienced
    that. No one had experienced the warm temperatures earlier that
    day that were similar to what we feel here today in D.C., and
    we were experiencing that in our winter in Minnesota.
        So I guess that's what I mean by that widespread agreement,
    that these are our experiences that are occurring, and what we
    need to manage and farm around, and that's what I mean. Thank
    you.
        Senator Whitehouse. Yeah. Mr. Johnson, you mentioned the
    danger of ill-fitting regulations squelching innovation and
    progress. Is it your view that well-crafted incentives can be a
    powerful and positive influence?
        Mr. Johnson. I think progress is always made better with
    carrots instead of sticks. Now voluntary incentive based
    programs have made a lot of positive progress in agriculture,
    in the entire history of the industry as this country has been
    known. And as I've said before, you know when I was a kid, and
    Mr. Grassley was a young, Farm Bureau member back then, you
    know our family was plowing our fields.
        And the progression of practices through the years, and
    through the generations were something that was inherently
    built, bred, and innovative on farms across the entire country.
    Just it's natural to a farmer to want to make progress, to want
    to do better, to want to be more efficient.
        And if you remove that incentive through burdensome
    regulations, my focus changes to meeting a regulation instead
    of meeting innovation, instead of finding new opportunities
    that maybe nobody has even thought of yet, so how can you
    regulate something that's a brand new idea.
        So that's where my comments are based on.
        Chairman Whitehouse. Yeah. That makes a lot of sense.
        Mr. Johnson. To not stifle new ideas and future progress.
        Chairman Whitehouse. I'm going to recognize Senator Braun
    in a second, but while he gets squared away let me ask Mr.
    Sievers. You've been a member of the partnership for climate
    smart commodities. That has been a success I gather?
        Mr. Sievers. Well we're still actually going through due
    diligence with USDA.
        Chairman Whitehouse. Okay.
        Mr. Sievers. So we'd like to speed that process up, but we
    understand there's a lot of scrutiny that's going to be placed
    on that program as it evolves and develops. Roeslein
    Alternative Energy, our partner, was awarded an 80 million
    dollar climate smart commodities grant last fall, and we think
    we're getting very close. We just actually had a call with
    folks at USGA and RCS here about a week ago, and they provided
    a timeline, so we hope that within 30 days we'll have a grant
    agreement in front of us that we can review, and then sign, and
    then get moving forward.
        But yeah, we're really looking forward to that because of
    the ecological services that we think it can provide, we're
    going to start to integrate and provide incentives for
    producers to adopt practices such as seeding cover crops on
    their farmland, and then potentially being able to use that
    feedstock as well as that from native prairie as a feedstock
    for anaerobic digestion, so.
        Chairman Whitehouse. Okay. Well there's going to be a
    period after the hearing closes when if you want to add
    something in writing, you're welcome to. So if you would like
    to expand on your recommendations for that program please don't
    hesitate to do so. If you're satisfied with your comments here
    today that's fine also, and now Senator Tester has been
    mentioned as perhaps the leading farmer in the Senate, and now
    I'm turning to I think the leading forester in the Senate,
    Senator Braun.

                       STATEMENT OF SENATOR BRAUN

        Senator Braun. Thank you Mr. Chairman. That's how I got
    started as a tree farmer back in the late 80's, and fell in
    love with that, and then inevitably got involved in row crops,
    and had the blessing of starting with a few acres where I
    wanted to build a home someday, and then found out it had a
    timber resource on it, and as soon as I bought it, it was land
    locked.
        I got access to it, and the loggers called me, wanted to
    help me out with my trees. So, I took the Perdue short course
    and learned a lot about silviculture in a short period of time.
    This is an excellent topic, cultivating stewardship. I've been
    doing it my entire life. You actually, I think have more
    opportunity on the farm, but there's a lot in the forest as
    well.
        I want to ask the two farmers here. I've been involved in
    Wetlands Reserve Program (WRP), CRP, EQIP, all that stuff over
    the years. I haven't done much recently because I started just
    incorporating that naturally into the practice of managing the
    woods or farm ground. I notice often, especially now, that
    farming has gotten a lot more corporate.
        I remember the days when you could put with direct inputs a
    corn crop out for $140.00, soybeans for 70.00. Board of Trade
    has been nice to farmers, but look at input costs. Look at how
    much more complicated it is. And when you're trying to weave
    land management and stewardship into it, I think it's gotten
    kind of complicated.
        What I'd like to hear from Mr. Larsen and Mr. Sievers would
    be farmers by nature are conservationists, and we went through
    some periods where I don't think it was paid attention to,
    decades ago. I don't know of any farmer that doesn't want to
    keep his dirt on his ground. Then, on the other hand, you have
    something like waters of the U.S. It's been ping-ponging back
    and forth.
        And right after I got in the Senate I had a dust up with a
    local conservation officer chasing somebody down on their back
    farm, and maintaining a ditch that hardly ever has any water in
    it. That's kind of a metaphor for sometimes the good the
    government can do, and then when it becomes overbearing.
        If you would each, weigh in on how that tug of war has been
    an issue on your own farm. I'll start with Mr. Sievers, and
    then I'd like to hear from Mr. Larson as well.
        Mr. Sievers. Thank you, Senator. Thank you for all you've
    done for forestry, and for advocating for forestry as a
    critical natural resource for the United States. Our family has
    implemented, I think just about every conservation program
    through the USDA that I can think of.
        We've implemented field borders and buffer strips, and
    grass waterways, and terraces. We've implemented no till and
    site specific farming practices as Mr. Johnson has talked
    about. More recently obviously, when we built our anaerobic
    digester, and commissioned that in 2013, we received a
    $500,000.00 REAP Grant for that project to be built and
    constructed.
        We received a $300,000.00 EQIP Grant for that for some of
    the storage of either the manure before it goes into the
    digester, or for the digestate once it comes back out. So I've
    been a huge advocate of those kinds of conservation programs,
    and would continue to do so as well going forward.
        I'm probably not going to weigh in on waters of the United
    States as much because it's really not an issue that's
    addressed to us, but I think that protecting our water quality
    is extremely important, but I also think property rights is a
    valuable and noble cause to embrace as well.
        And so, doing things on our farm that improve water quality
    by capturing any excess nitrate nitrogen for example, by
    utilizing cover crops, by making sure--by filter strips are
    another way to capture any excess nitrates that night run off
    that field in the event of an untimely rain.
        Senator Braun. Let me ask you this. Do you think farmers
    would do as much of that without the help from the federal
    government on that particular stuff? Would it be in your own
    best interest to do it? It sounds like you haven't been
    impacted much by the regulations that have come along with it
    in other areas. There are stipulations in terms of how that
    works, but do you think farmers would employ those practices
    otherwise?
        Mr. Sievers. Yeah. I think farmers would be willing to
    employ those practices because of what you just described, the
    reverence that we have for our soil.
        Senator Braun. Yes.
        Mr. Sievers. And keeping that soil in place. The problem is
    how do you monetize or quantify the loss of that soil to the
    public, and to that farmer, and that's where the incentives
    really help because they can help monetize the value of that
    soil, staying on your farm rather than going into a creek or
    river or stream.
        Senator Braun. Thank you. Mr. Larsen.
        Mr. Larsen. On our own farm, and you know it's something
    that the Byron Area farmers we talk about is like being ahead
    of the curve, so to speak, on conservation. So all these
    programs that, you know, you've discussed we enroll in many of
    them. I appreciate that you bring up forestry. I really take
    that to heart. I try to plant 1,000 trees a year in marginal
    productive areas.
        I do have a sawmill. I know how to fell trees. So that's
    one side. The forestry definitely cannot be forgotten, and I
    appreciate that. And there's programs to support that as well.
    In regards to your specific point about the tug of war, and I
    kind of walk the line because I work for a conservation
    district, right?
        So, but I'm also a farmer. I own a tiling machine, you
    know, I install my own drain tile and of course wetland laws
    that come into play with that. But I experienced those wetland
    laws from the other side, at the conservation district too. I
    witnessed these water protection laws from the other side.
        So, from a farmer, you know, I think we really need to look
    at that from the perspective of being ahead of the game, but it
    is hard to be ahead of the game when we see that we need to
    learn how to be ahead of the game. So that's where the programs
    really come in to help us. And in Olmstead County, where is the
    county where I farm and then work, I think the county is ahead
    of the game because they took 3 million dollars of American
    Rescue Plan Act (ARPA) funding, and dedicated it towards local
    soil health funding.
        And because I work at the conservation office we wrote that
    program, but the most important goal of that program was the
    efficient delivery, so that a farmer could do everything he
    needed to do to get that funding right here on his phone, and
    it could be out on the tractor, he could take the pictures he
    needed to get his payment from it, and upload them, and start
    the payment process.
        So that an efficient delivery is really important. So I do
    see, you know, the ying and the yang, or the balance of things
    just because of my perspective of working both sides.
        Senator Braun. Thank you. Keep up your good stewardship,
    and I found that I've actually had a better return on managing
    my forest ground than my farm ground, once you get used to the
    nuances of it. A lot of farmers don't pay attention to that
    component of it. Thank you.
        Chairman Whitehouse. Senator Merkley. Thank you Senator
    Braun.

                      STATEMENT OF SENATOR MERKLEY

        Senator Merkley. Thank you, Mr. Chairman, and thank you all
    for bringing your expertise to bear. I go and do a town hall,
    and I'll put my 36 counties each year, and beforehand meet with
    the local elected officials of that country, and the city
    officials. And just before COVID I was very surprised in the
    very southeast corner of my state, in an area that's extremely
    rural, and extremely allergic to any form of government
    involvement. It was requested that I get them help with
    monitoring wells.
        And I nearly fell out of my seat because this is a place
    where it would be like the last thing anyone would ever ask for
    is government oversight. And so, I said I'm kind of stunned at
    the question. Give me more background, and they said well
    listen, we've always been against any form of government
    oversight, but we lost three feet on our groundwater last year
    on top of many, many dozens of feet losses over previous years,
    and we're all going to be out of business soon if we don't
    monitor our groundwater use.
        And we need help figuring that out.
        It's both the drought in many parts of Oregon that has been
    persistent over a long period of time now. It's also the
    reduced snow pack. The cascades have approximately 20 feet less
    snow pack on average than they did 90 years ago. This year was
    a good snow pack year, but that's an anomaly.
        So, in your all's experience are we seeing a growing
    concern about climate impacts in terms of groundwater recharge,
    and dropping levels of groundwater in the places that you come
    from? I'm just quick surveying your sense of this as an issue.
        Mr. Larsen. Quick survey of southeast Minnesota is we do
    not have a groundwater supply problem, we have a groundwater
    quality problem, and a lot of work is being done in regards to
    nitrates, and nitrate sequestration, and the eroding zone of
    rural crops.
        Senator Merkley. Okay. Anyone else have groundwater issues,
    or not really in your parts of the country?
        Mr. Johnson. I'm from northwest Iowa, and when we've been
    experiencing droughts, but I'm from a very, very, flat part of
    the state, and so our groundwater, we don't irrigate. We don't
    have any of those issues that change our practices.
        Senator Merkley. Okay.
        Mr. Sievers. Thank you, Senator. And I'd have to say I echo
    the comments that Mr. Larsen and Mr. Johnson just said. In
    eastern Iowa it's more a water quality issue that we want to
    continue to monitor and make sure we keep excess nutrients out
    of our ground.
        Senator Merkley. Well my ag world is very jealous. We also
    have a nitrates problem in different parts of the state, but
    when your wells are dropping dramatically, and you can't afford
    to keep drilling deeper, you're looking at the kind of the
    foundation of the community at risk, so a huge concern.
        I wanted to turn, Mr. Johnson, to the organic farming.
    Oregon is at the forefront of organic farming. And the recent
    data from the National Agriculture Statistics Services shows
    that Oregon doubled its acreage within a few years between 2008
    and 2021. What role does organic farming industry have in
    perhaps being a positive force in helping to address some of
    the climate change issues?
        Mr. Johnson. Well, first of all organic farming--there is a
    fraction of Iowa agriculture that is growing in the organic
    productions systems as well, and I know many farmers across the
    state actually who are farming I'll say traditionally, for the
    lack of a better description, versus organically. And they're
    adopting organics as well, so they run in both modes of farming
    operations.
        I think they're doing that as a market opportunity, and
    also as a risk mitigation opportunity for their own personal
    operations. There are benefits to both systems to be quite
    frank about it. I'm what you would consider probably a
    relatively conservative farming operation.
        I've adopted strip till and no till, so I can conserve some
    of the water resources that you were just talking about. I can
    manage nutrients better, and take care of pests, whether it's
    weeds or insects, a little bit better in some of those. And
    there's tools in that system that allows me to do that very
    efficiently.
        And then there's the market segment of organic farming,
    which seems to be an opportunity for other people. And I
    can't--I don't farm in that system, but I know farmers who do,
    and you know, they spend a lot of time in their fields, and
    they do, they have a lot of passes, and it's more labor
    intensive. And so, there's good and bad, and ying and yang in
    both systems, and I frankly see it as a diversification
    opportunity.
        Senator Merkley. Thank you. Mr. Chairman, do I have time
    for another question?
        Chairman Whitehouse. Sure.
        Senator Merkley. So we have a big nursery industry in
    Oregon, and there's constant concern about the ability to ship
    plants, and make sure that they're healthy throughout, and not
    have anything get banned. And what we're seeing is a lot of
    pests that are spreading. Is the climate problems accelerating
    that?
        And I'll just give you one example. It isn't nursery
    related, but the--we didn't use to have much of a pine beetle
    problem in Oregon, but now we have a huge problem with it
    because mainly the impact of drought has meant that the trees
    have less sap to fight off the beetles, and then the longer,
    warmer summer season means that the pine beetles can go through
    two generations of infestation rather than one.
        But are there--are you seeing other pest issues that are
    aggravated by in our more traditional ag sector by the climate
    impacts? To whomever has any insights.
        Mr. Larsen. I guess I can't specifically say because it's
    outside of my knowledge base about the effect that climate
    change has had on some of our significant pest issues. But what
    I can say is that it absolutely needs to be on the radar
    because for example, emerald ash bore has cost our cities and
    our communities millions of dollars to remove dead ash trees,
    or soon to be dead ash trees.
        So it's not just limited to that one insect of our
    experiences, but it absolutely needs to be on the radar because
    of the potential cost it has to communities, including rural
    land owners that have to remove a few trees around their house
    because they're dead now, so.
        Chairman Whitehouse. I'm going to recognize Senator
    Grassley now for a few additional questions, and then if no one
    else has come we'll close the hearing. Senator Grassley.
        Senator Grassley. For Mr. Larsen, I heard you talk about
    how you meet regularly with a lot of other farmers. Does that
    involve the pooling of their resources to better market their
    oats, or do you have organizations beyond just your regular
    meeting of fellow farmers?
        Mr. Larsen. So, so far we are still very loosely held. That
    is we do not have an entity that we meet under, but we are
    pooling resources, and that could be equipment to get the work
    done. You brought up oats, it may be to plant the oats. It may
    be to harvest the oats, and to market them together, so that we
    have a strength in numbers.
        And you know, I think that was kind of the basis of farmers
    getting together was to, you know, leverage what we have
    together rather than on our own. And it's also again, the
    knowledge sharing that comes with it with something specific.
        But the resources are very important, especially when a
    farmer is considering something, so they're not ready to take
    the leap into buying new equipment, which would be quite
    costly, but the neighbor has that equipment in the group per
    se, and can be hired to get that done.
        They can experience it. They can go through some cropping
    seasons, and see if it's a good fit for them. You know,
    equipment and financing new equipment for conservation
    practices, or climate related practices, climate farming
    practices is an opportunity because that funding, you know,
    it's a leap again.
        Like if we're thinking about something different, if we
    want to learn about it, we need that equipment to do it, and
    funding for it outside of our farmer group is something we
    should look into.
        Senator Grassley. Mr. Willis, I've heard you mention crop
    insurance in your opening statement, and to a couple questions
    that have been asked of you, so I want to ask about President
    Biden's USDA estimates that crop insurance premiums subsidies
    would increase somewhere between 3 and a half percent to 22
    percent by the end of the century due to climate change.
        A broad range, which is extrapolated from using unrealistic
    RCP, 8.5 scenario. What factors do you believe will cause the
    greatest increase in crop insurance premiums subsidies as this
    century evolves?
        Mr. Willis. I'm not sure it will be that much different
    than what has increased in the last 20 years, and not all of
    those things are actually bad. One of those will be crop
    prices, as prices, you know, the value of what you insure
    increases, the insurance is going to cost a little bit more.
        The other thing is increased yields. Obviously, that one
    right there is something that has you know, increased the
    liability historically. The study brought that a little bit
    into question moving forward, but the program naturally will
    cost a little bit more over time just because the value of the
    crops, if it weren't that way, we would have, you know,
    bankruptcies in rural America if it didn't increase a little
    bit.
        But it would be value of the crops, and it would be acreage
    in large part.
        Senator Grassley. Maybe one other question for anybody that
    can speak to it, and this comes from my reading business papers
    that have suggested when it comes to selling carbon credits,
    and getting income from it, I've read of one African country,
    west African country and I read of people in Ecuador that have
    been able to make money selling carbon credits.
        So why aren't we getting advantage, or making any income
    from carbon credits for those things that we've already done
    like no till cover crop, minimum till, and anything else you
    can do that sequesters carbon? Or what you're doing, for
    instance, in your digester as an example. Is there an answer to
    that, or is it just rhetorical?
        I don't mean it to be a rhetorical question, but it might
    be a rhetorical question.
        Mr. Sievers. Well I think that's an excellent question,
    Senator, and thank you for asking that. I've been advocating
    for that. I was a member of the Governor's carbon sequestration
    task force here a couple of years ago, and it's an evolving
    industry, so there's a lot of answers that haven't been
    provided yet, a lot of questions. A lot more questions than
    answers, certainly in the whole carbon credits arena.
        But I advocate, as you've just indicated, that a baseline
    for that effort to create the value of those carbon credits is
    absolutely the most important part. It's just like Mr. Johnson
    said. You have to be able to measure before you can monitor and
    monetize, and once you start measuring, well where do we start
    measuring?
        And I've just half seriously jokingly said it's when I park
    the mobile plow 25 years ago. Maybe that was a good place to
    start to create my baseline, and in so doing the monetization
    of our carbon credits on our farming operation would be far
    greater than maybe the $20.00 or $30.00 an acre that are being
    proposed.
        You know, they might be upwards of several hundred dollars
    an acre when you aggregate and stack those additional carbon
    credit benefits. And what we've really started to see the
    acceleration of those benefits to ourselves once we implemented
    the anaerobic digesters.
        And the utilization of livestock manure and biomass, and
    therefore the advocation that I have been certainly in favor of
    is we need more livestock to be able to monetize more carbon
    credits, so that we need fewer livestock.
        And so in Iowa, and in the upper Midwest, I think that
    that's a revelation we're going to come to at some point that
    more livestock will actually enhance the ability for farmers to
    sequester and capture carbon and create more value in the
    credits there.
        Senator Grassley. Isn't it a little ironic that you're
    asking for a situation you described based upon previous
    practices, and it's not here, but it's here for people in
    Africa and Ecuador to benefit from it. It just doesn't make
    sense.
        Mr. Sievers. Right.
        Senator Grassley. So if there's a market out there for
    that, why isn't there a market for what you're talking about?
        Mr. Sievers. I couldn't agree more.
        Chairman Whitehouse. And that's a very useful question to
    end on. I'd offer two observations. One, the offsets market has
    been loaded up with fake offsets, which doesn't mean that there
    aren't real ones out there. It just means that there's been a
    terrible experience with fake offsets, or double counted
    offsets, or misunderstood offsets.
        It doesn't necessarily mean that they were fraudulent, but
    they were ineffectual at a minimum, and I think some were
    probably even fraudulent. So the market was started off on a
    bad footing.
        We tried in the Growing Climate Solutions Act to give the
    U.S. Department of Agriculture a mechanism to look at what
    actually really works, and is entitled to a proper offset, so
    that the farmer can get the benefit from taking the step that
    the USDA has identified.
        Highly localized thing, we sort of were thinking that it
    might go like the old farm agents who know the county, know the
    farms, know the locality, and could provide good credentialing
    of the climate effects, the sequestering effects, whatever, of
    different practices so that in fact at the end of the day the
    farm does get the reward.
        The USDA has not with great alacrity, picked up the Growing
    Climate Solutions Act problem, despite the fact that it passed
    about two years ago now I think, so that would be a good place
    to put a little bit of attention, I think, on like where are
    they with that. What offsets are credible, and how should they
    be scored because it is useful to our question, Mr. Johnson,
    about incentives.
        If you're going to be paid to do something that you want to
    do anyway, that's a good outcome, and if it encourages better
    behavior and more behavior of that kind, so much the better. So
    I'm going to wrap up.
        Thank you very much again, Ranking Member Grassley, for
    making this a bipartisan hearing. I can't help but note that as
    we sit here in this hearing we are under air quality warnings
    in Washington, D.C.
        The air quality warnings in New York City right now are so
    bad that we are I think only behind New Delhi in terms of
    global bad air quality. It's coming from wildfires. They're
    coming from Canada. They relate to combustibility that we've
    talked about already in forests, it tracks back to the changes
    in the climate that we are experiencing as a result of fossil
    fuel emission.
        So, it's happening in real life right around us, even as we
    sit in this air-conditioning room in this Senate chamber. And I
    would close by asking unanimous consent that we put into the
    record the report that was done by the Commodities Futures
    Trading Commission during the Trump administration, actually,
    with excellent leadership by the former risk manager for
    Goldman Sachs, a firm that has to know quite a lot about risk
    and get it right quite a lot.
        Who was actually a witness of ours in an early hearing, Bob
    Letterman, and supported by a very powerful array of American
    corporate interests, including particularly agricultural
    interests, and I think putting that report from the Trump
    administration into the record would be a useful way to close
    out.\7\
    ---------------------------------------------------------------------------
        \7\ Document submitted by Chairman Whitehouse appears in the
    appendix on page 59.
    ---------------------------------------------------------------------------
        Chairman Whitehouse. So with that I will thank the
    witnesses. We have a little bit of time, like a day. All right.
    24 hours for any member who wants to ask additional questions
    to all of you to get those things in writing. We'll get them to
    you. We would ask that you respond in a week if you do get such
    questions.
        You can take Mr. Sievers, my question about your
    partnership program as a question if you care to answer
    further, you're most welcome to. Let me thank you for bringing
    your experience here again, for a guy from a state, most of
    whose harvesting comes from the ocean, this has been very
    helpful to hear, so thank you very much.
        [Whereupon, at 11:53 a.m., Wednesday, June 7, 2023, the
    hearing was adjourned.]

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