[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

HEARING TO REVIEW THE STATE OF THE RURAL ECONOMY

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

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

SECOND SESSION

__________

FEBRUARY 24, 2016

__________

Serial No. 114-43

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

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COMMITTEE ON AGRICULTURE

K. MICHAEL CONAWAY, Texas, Chairman

RANDY NEUGEBAUER, Texas, COLLIN C. PETERSON, Minnesota,
Vice Chairman Ranking Minority Member
BOB GOODLATTE, Virginia DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma JIM COSTA, California
STEVE KING, Iowa TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama MARCIA L. FUDGE, Ohio
GLENN THOMPSON, Pennsylvania JAMES P. McGOVERN, Massachusetts
BOB GIBBS, Ohio SUZAN K. DelBENE, Washington
AUSTIN SCOTT, Georgia FILEMON VELA, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas MICHELLE LUJAN GRISHAM, New Mexico
SCOTT DesJARLAIS, Tennessee ANN M. KUSTER, New Hampshire
CHRISTOPHER P. GIBSON, New York RICHARD M. NOLAN, Minnesota
VICKY HARTZLER, Missouri CHERI BUSTOS, Illinois
DAN BENISHEK, Michigan SEAN PATRICK MALONEY, New York
JEFF DENHAM, California ANN KIRKPATRICK, Arizona
DOUG LaMALFA, California PETE AGUILAR, California
RODNEY DAVIS, Illinois STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida ALMA S. ADAMS, North Carolina
JACKIE WALORSKI, Indiana GWEN GRAHAM, Florida
RICK W. ALLEN, Georgia BRAD ASHFORD, Nebraska
MIKE BOST, Illinois
DAVID ROUZER, North Carolina
RALPH LEE ABRAHAM, Louisiana
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington
TRENT KELLY, Mississippi

______

Scott C. Graves, Staff Director

Robert L. Larew, Minority Staff Director

(ii)

C O N T E N T S

----------
Page
Bost, Hon. Mike, a Representative in Congress from Illinois,
submitted letter............................................... 61
Conaway, Hon. K. Michael, a Representative in Congress from
Texas, opening statement....................................... 1
Prepared statement........................................... 4
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, opening statement................................... 5

Witness

Vilsack, Hon. Thomas ``Tom'' J., Secretary, U.S. Department of
Agriculture, Washington, D.C................................... 6
Prepared statement........................................... 8
Submitted questions.......................................... 62

HEARING TO REVIEW THE STATE OF THE RURAL ECONOMY

----------

WEDNESDAY, FEBRUARY 24, 2016

House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Committee met, pursuant to call, at 10:00 a.m., in Room
1300 of the Longworth House Office Building, Hon. K. Michael
Conaway [Chairman of the Committee] presiding.
Members present: Representatives Conaway, Neugebauer,
Goodlatte, Lucas, King, Thompson, Austin Scott of Georgia,
Crawford, DesJarlais, Gibson, Hartzler, Benishek, LaMalfa,
Davis, Yoho, Walorski, Allen, Bost, Rouzer, Abraham, Moolenaar,
Newhouse, Kelly, Peterson, David Scott of Georgia, Costa, Walz,
McGovern, DelBene, Lujan Grisham, Kuster, Nolan, Bustos,
Maloney, Kirkpatrick, Plaskett, Graham, and Ashford.
Staff present: Bart Fischer, Callie McAdams, Jackie Barber,
Matt Schertz, Mollie Wilken, Scott C. Graves, Skylar Sowder,
Stephanie Addison, Faisal Siddiqui, John Konya, Anne Simmons,
Liz Friedlander, Matthew MacKenzie, Mike Stranz, Nicole Scott,
and Carly Reedholm.

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

The Chairman. Good morning. We call this hearing of the
Committee on Agriculture on the state of the rural economy, to
come to order. I would ask Rodney Davis to open us with a
prayer. Rodney?
Mr. Davis. Thank you, Mr. Chairman. Please, if you will,
bow your heads.
Thank you, Lord, for allowing us to come together today in
these walls of this great institution that was built up around
Your teachings. And as a practicing Catholic, I know one of the
prayers that we always do together, I would ask each of you to
join us in reciting the Lord's Prayer.
Our Father, who art in Heaven, hallowed be thy name. Thy
kingdom come, thy will be done, on Earth, as it is in Heaven.
Give us this day our daily bread. And forgive us our
trespasses, as we forgive those who trespass against us. Lead
us not to temptation, but deliver us from evil. For thine is
the kingdom, the power, and the glory, for ever and ever. Amen.
The Chairman. Thank you, Mr. Davis. Mr. Secretary, welcome.
Glad you are here this morning. I am pleased to welcome
Secretary Vilsack to join us in this annual hearing to assess
the economic conditions in farm country. Again, Mr. Secretary,
thank you for joining us for the eighth time, seventh time,
quite a lot of them.
In the sense of the situation, it is fair to say that
American farmers and ranchers are falling on very hard times
right now. Worse yet, I don't really see a light at the end of
the tunnel.
To quantify what I am talking about, consider these facts:
The 2 year drop in net farm income that occurred between 2013
and 2015 marks the second largest drop on record, behind only
the drop that occurred between 1919 and 1921. Moreover, the 3
year drop in farm income from 2013 to 2016 marks the third
largest on record, behind the drops of 1918 to 1921, and 1929
to 1932, two of the worst periods in American agriculture
history. From 2013 to 2015, net farm income is expected to drop
by a staggering 54 percent. Over the 3 year period from 2013 to
2016, net farm income is expected to drop even more, by 56
percent.
While conditions on the farm are certainly different today
than they were back in the early years of the 20th century,
these statistics still put into context what American
agriculture is going through right now, and just how
problematic a sustained downturn could be. In addition, as
history has repeatedly demonstrated, these conditions in farm
and ranch country have ramifications not only for farm and
ranch families, but also for rural communities and the national
economy as a whole. In short, we have a very serious problem
unfolding right now in rural America.
The farmers that I talk to from across the country tell me
that they are very concerned that they do not see the kind of
circumstances that are going to come along and end this
downturn anytime soon. They are also concerned that even as the
prices they receive plummet, the prices they are paying for
inputs remain as high as ever. As Chairman of this Committee,
my concern goes out to every farmer and rancher in the country,
wherever they farm or ranch, and whatever they produce. But I
have to confess that I really have a very special concern for
those farmers and ranchers who not only fully share in today's
economic downturn, but who never shared much in the economic
boom that preceded the current bust. Of course, I speak of
those farmers and ranchers who never saw a big run up in
prices, and maybe none at all, or the farmers and ranchers who
did see the run up in prices, but never had a commodity to sell
due to natural disasters.
It is an accurate appraisal to say that a lot of farmers
and ranchers from across the country are living on loans or
burning up equity these days, but none more than the farmers
and ranchers who never had an opportunity to build equity
before these hard times came along. The best solution for this
problem is for prices to turn around, but as I indicated
earlier, farmers and ranchers I talked to are very skeptical
that that will happen anytime soon.
For Congress's part, I believe it is our duty and
responsibility to hold the line on the farm bill and crop
insurance--to draw a hard line against attacks that would
undermine these laws and further jeopardize our nation's
farmers and ranchers. The Administration's budget, which
proposes a 20 percent cut to crop insurance, as well as an
attack upon crop insurance last fall during the negotiation of
the bipartisan budget agreement, are not helpful. But I very
much appreciate what Secretary Vilsack has done to come down on
the side of the farmer and the rancher in these kind of
debates.
For the Administration's part, I believe there are at least
five things in the Administration's power that would make a big
difference for America's farmers and ranchers. First, oppose
further cuts to the farm safety net provided by farm bill
programs and crop insurance. Second, initiate WTO challenges
against the high and rising foreign subsidies, tariffs, and
non-tariff barriers that are key culprits in the current
economic crisis and conditions on our farms and ranches. Third,
withdraw the Waters of the U.S. regulation that threatens to
federally regulate every ditch in the country, effectively
gutting any exemption for agriculture. Fourth, persuade Senate
Democrats to support voluntary labeling of biotech crops, and
pass a Federal preemption of state and local biotech labeling
regimes. I know, Mr. Secretary, that you are very much
committed to getting this solved. And fifth, use your authority
under the law to designate cottonseed as an oilseed for
purposes of the farm bill.
On this last issue, you and I have spoken extensively. We
have exchanged papers. At the bottom, the stumbling block that
stands in the way in our view of you taking action to deal with
this growing crisis in the Cotton Belt is your lawyers, and
your lawyer's belief in a lack of legal authority. Your lawyers
point to a Supreme Court case that essentially held that law
cannot be interpreted in a manner that would contradict a
decision that was made by Congress.
This legal analysis would be spot on if we were asking you
to include cotton lint under the farm bill, but that is not
what we are asking for. We are simply asking for you to include
cottonseed. As you know, the two are not the same thing, even
though they come from the same plant. Including cottonseed
under the farm bill is not including lint by another name.
While Congress did consider the appropriate policy for
cotton lint in the 2014 Farm Bill, Congress never considered
the question of whether to include or exclude cottonseed as a
part of ARC or PLC. Instead, we left that decision to you.
Therefore, were you to honor the bipartisan, bicameral request
of more than 100 Members of Congress, and designate cottonseed
as an oilseed, you would not be contradicting the law and you
would have our full backing.
I don't have to tell you that the acres planted to cotton
are now at their lowest levels in 108 years, excluding 1 year
in the early 1980s when the government forced set-asides. We
also know this is not due to bad management on the part of farm
families. This is due in large part to the actions taken by the
Chinese and Indian Governments over which our farmers have
absolutely zero control.
There is a very real decision to be made here. Will the
United States allow foreign governments to steal our cotton
production, just as they stole textile mills, or will we stand
up and say, ``No not this time. China and India, we will
challenge your subsidies and stand by America's farmers until
true free and fair trade is restored.'' Producers of other
commodities should beware. The same thing could be happening to
you.
It all boils down to whether you stand by farmers and
ranchers when they are under economic assault by foreign
governments.
[The prepared statement of Mr. Conaway follows:]

Prepared Statement of Hon. K. Michael Conaway, a Representative in
Congress from Texas
I am pleased that Secretary Vilsack could join us for this annual
hearing to assess the economic conditions in farm country. Thank you
for joining us, Mr. Secretary.
In assessing the situation, it is fair to say that America's
farmers and ranchers are falling on some very hard times right now.
Worse yet, I don't see the light at the end of the tunnel.
To quantify what I am talking about, consider these figures:
The 2 year drop in net farm income that occurred from 2013 to 2015
marks the second largest drop on record, behind only the drop that
occurred from 1919 to 1921.
Moreover, the 3 year drop in net farm income from 2013 to 2016
marks the third largest on record behind the drops from 1918 to 1921
and 1929 to 1932, two of the worst periods in U.S. agriculture history.
From 2013 to 2015, net farm income is expected to drop by a
staggering 54 percent. Over the 3 year period from 2013 to 2016, net
farm income is expected to drop by even more: a whopping 56 percent.
While conditions on the farm are certainly different today than
they were back in the early years of the 20th Century, these statistics
still put into context what American agriculture is going through right
now and just how problematic a sustained downturn could be.
In addition, as history has repeatedly demonstrated, these
conditions in farm and ranch country have ramifications not only for
farm and ranch families but also for our rural communities and the
national economy as a whole.
In short, we have a very serious problem unfolding right now in
rural America.
The farmers that I talk to from across the country tell me that
they are very concerned that they do not see the kind of circumstances
that are going to come along and end this downturn any time soon. They
are also concerned that even as the prices they receive plummet, the
prices they are paying for inputs remain as high as ever.
As Chairman of this Committee, my concern goes out for every farmer
and rancher in the country, wherever they farm or ranch, whatever they
produce. That is the job of a Chairman.
But, I confess that I have a very special concern for those farmers
and ranchers who are not only fully sharing in today's economic
downturn but who never shared much if any of the economic boom that
preceded the current bust. Of course, I am speaking of those farmers
and ranchers who never saw as big a run up in prices, or maybe none at
all, or the farmers and ranchers who did see the run up in prices but
never had a commodity to sell due to natural disasters.
It is an accurate appraisal to say that a whole lot of farmers and
ranchers from across the country are living on loans or burning up
equity these days, but none more than the farmers and ranchers who
never had opportunity to build equity before these hard times came
along.
The best solution for this problem is for prices to turn around.
But, as I indicated earlier, farmers and ranchers I talk to are very
skeptical that this will happen anytime soon.
So, what can we do?
For Congress' part, I believe it is our duty, our responsibility to
hold the line on the farm bill and crop insurance, to draw a hard line
against attacks that would undermine these laws and further jeopardize
our nation's farmers and ranchers.
The Administration's budget, which proposes a 20 percent cut to
crop insurance as well as the attack upon crop insurance last fall
during negotiation of the Bipartisan Budget Agreement are not helpful.
But, I very much appreciate that Secretary Vilsack has mainly come down
on the side of the farmer and rancher in these kinds of debates.
For the Administration's part, I believe that there are at least
five things within the Administration's power that would make a big
difference for America's farmers and ranchers.
First, oppose further cuts to the farm safety net provided by the
farm bill and crop insurance.
Second, initiate WTO challenges against the high and rising foreign
subsidies, tariffs, and non-tariff trade barriers that are key culprits
in the current economic conditions our farm and ranch families face.
Third, withdraw the Waters of the U.S. regulation that threatens to
federally regulate every ditch in the country, effectively gutting any
exemption for agriculture.
Fourth, persuade Senate Democrats to support a Federal preemption
of state and local biotech labeling regimes. I know, Mr. Secretary,
that you are very committed to this.
And, fifth, use your authority under the law to designate
cottonseed as an oilseed for purposes of the farm bill.
Mr. Secretary, on this last issue, you and I have spoken
extensively. We have exchanged papers. At bottom, the big stumbling
block that stands in the way of your taking action to deal with a
growing crisis in the Cotton Belt is, your lawyers say, a lack of legal
authority.
Your lawyers point to a Supreme Court case that essentially held
that a law cannot be interpreted in a manner that would contradict a
decision that was made by Congress.
This legal analysis would be spot on if we were asking you to
include cotton Lint in the farm bill. But, that is not what we are
asking for. We are asking for you to include cottonseed. As you know,
the two are not the same even though they are from the same plant.
Including cottonseed under the farm bill is Not including cotton lint
by another name.
While Congress did consider the appropriate policy for cotton Lint
in the 2014 Farm Bill, Congress never considered the question of
whether to include or exclude cottonseed as part of ARC or PLC.
Instead, we left that decision to you. Therefore, were you to honor the
bipartisan, bicameral request of more than 100 Members of Congress, and
designate cottonseed as an oilseed, you would not be contradicting the
law and you would have our full backing.
I don't have to tell you that acres planted to cotton are now at
their lowest levels in 108 years, excluding 1 year in the early 1980s
when the government forced set-asides. We also know that this is not
due to bad management on the part of farm families. This is due in
large part to the actions of the Chinese and Indian Governments over
which our farmers have absolutely zero control.
There is a very real decision to be made here. Will the United
States Government allow foreign countries to steal our cotton
production just as they stole our textile mills, or will we stand up
and say, ``No, not this time. China and India, we will challenge your
subsidies and stand by America's farmers until truly free and fair
trade is restored''. Producers of other commodities should beware. The
same thing could happen to you.
It all boils down to whether we are going to stand by our farmers
and ranchers when they are under economic assault by a foreign
government.
I yield to my friend and Ranking Member, Mr. Peterson, for his
opening statement.

The Chairman. I now yield to my friend, the Ranking Member,
for any comments that he might have.

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

Mr. Peterson. Thank you, Mr. Chairman, and welcome back to
the Committee, Mr. Secretary. I have lost count of the number
of times that you have been here in the last 7 years, Mr.
Secretary. We always appreciate your time and your advocacy for
those of us in rural America. And I also look forward to your
testimony today.
As the Chairman indicated, we are taking a look at the
rural economy today, and the Committee takes on this review
annually and for the past few years, we have been able to point
at strong farm prices as one of the reasons for the rural
economy's success.
While the rural economy generally remains strong, folks are
getting concerned, as the Chairman pointed out, about the
potential long-term impacts of the deteriorating prices that we
have seen. Of course, this is why those of us on the
Agriculture Committee worked so hard to pass the farm bill, and
why we do it every 5 years. But, I do have some concerns with
the current bill because we didn't get as high target prices as
I wanted, but with these low prices, this also points out why
the bill's safety net is so important.
It is also worth noting the importance of crop insurance,
and despite what critics will lead you to believe, the crop
insurance program is effective and a responsive tool for
farmers. I hope this Committee will remain united against calls
for cutting the program.
And last, I just want to personally thank you for your
paying attention to the avian influenza situation that we had
last spring, and you did an outstanding job in responding to
it. Your agency was right there working with us. Dr. Clifford
and APHIS and so forth, we had our glitches, but they did an
outstanding job and you stepping up to the plate and using your
authority to deal with that was very much appreciated. We are
hoping, and keeping our fingers crossed, that we won't have
another episode of that this spring. So I just want to
personally thank you for that, and the folks in my area that
were involved very much appreciate what you have done.
So with that, there are a lot of issues that Members will
want to raise today, so let's get started, and I yield back.
The Chairman. I thank the Ranking Member. The chair would
request other Members submit their opening statements for the
record so the witness may begin his testimony to ensure there
is ample time for our questions.
I would like to welcome to our table the Honorable Tom
Vilsack, Secretary of the U.S. Department of Agriculture.
Secretary Vilsack, please begin when you are ready.

STATEMENT OF HON. THOMAS ``TOM'' J. VILSACK, SECRETARY, U.S.
DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

Secretary Vilsack. Mr. Chairman, thank you very much, and
to you and to Congressman Peterson and the Members of this
Committee, I appreciate the opportunity to visit with you this
morning. I look forward to the opportunity to visit about
issues that matter to you and to your constituents and the
people that I care about in rural America.
Tomorrow, we have our Outlook Forum, which is an annual
event in which we review the circumstances surrounding the farm
country and rural economy. What we are going to learn tomorrow
is what most of the Members, if not all of the Members, of this
Committee are fully aware of, which is we are seeing a
combination of a slowing global economy, particularly in China,
which obviously reduces demand for product; a strong dollar,
which is a reflection of the strong American economy, which
makes our goods a bit less competitive in global markets,
combined with record harvests here and elsewhere, have
resulted, as the Chairman indicated, in lower farm income and
revenue.
The extent of that lower farm income is mitigated in part
by lower input costs in the form of low interest rates and
energy costs. Farm values have declined a bit. They have
declined moderately over the last year or so. But debt to
equity ratios still remain extraordinarily strong and stable,
significantly different than periods of time when we were faced
with a significant farm crisis.
We would expect and anticipate to see increased borrowing,
which will place some greater reliance and stress on our loan
programs at FSA, particularly our loan guarantee program. The
safety net is in place, and is, for the most part, working the
way it was intended: $5.2 billion in payments were made last
year to over 900,000 producers, and it is expected that
payments from our safety net programs will increase this year.
The rural economy at large is improving in part because of
the diversification that has been supported by the farm bill
that was passed in 2014. This is reflected in the fact that we
are now seeing lower unemployment and poverty rates are coming
down significantly, especially in the last 2 years. This has
been helpful to farm families who are struggling with lower
farm income, because they also have the opportunity for off-
farm income.
I found it interesting and I share with the Committee this
fact that the median farm family total income, which would
include farm and non-farm income, reached a record level this
year at over $81,000.
We recognize the stress in some commodity areas, and we are
focused on increasing demand for American product here through
the promotion of the bioeconomy, and through expanded trade
opportunities. That is why we believe, as I hope most, if not
all, of the Members of this Committee believe that it is
important for Congress to act to pass the Trans-Pacific
Partnership Trade Agreement. According to the American Farm
Bureau Federation report that was issued yesterday, that will
add an additional $4.4 billion annually in additional farm
income. It will expand American exports of farm products by
$5.3 billion. This is part of an overall economic boost that we
will receive from doing business with the Asian countries,
improving our overall exports by over $350 billion, and our
overall income to Americans by $130 billion on an annual basis.
This, combined with opening up opportunities in Cuba, a
market which American agriculture should dominate, should help
us increase demand for product and begin getting ourselves back
on strong footing.
I certainly appreciate the Chairman's comments about
cotton. I would say, Mr. Chairman, with respect, it is not
lawyers. It is not lawyers that prevent me from doing what you
would ask me to do. It is an oath that I took. It is an oath
that I took at the time I took this job, which was to follow
the Constitution and the laws of this country. Based on my
understanding of the current circumstance and based on my
understanding of the crafting of the farm bill, the reality is
that Congress made a decision not to specifically include
cottonseed in a list of other oilseeds under the other oilseed
provision that you have made reference to. That decision
basically made it impossible for me to do what you are asking
me to do. Certainly, the Congress could reopen the farm bill
and address it then, or Congress could remove the prohibition
that currently exists under the Commodity Credit Corporation in
the appropriations bill that was passed by Congress that
prevents me from using CCC to provide assistance and help. Or
we would work collaboratively together to work on a cost-share
program with reference to ginning that you and I have talked
about, Mr. Chairman, which we are still willing to do if the
industry is willing to accept this.
Fourteen percent of cotton was basically protected under
the STAX Program, over $300 million in payments were made. We
have made efforts under our Marketing Loan Assistance Program.
We have also created an opportunity for certificates to be used
in lieu of collateral for loans, all of which is helping to
mitigate the consequences of very low prices, of which we are
very, very aware.
So I look forward to an opportunity to visit with the
Committee on this issue and a multitude of other issues.
[The prepared statement of Mr. Vilsack follows:]

Prepared Statement of Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S.
Department of Agriculture, Washington, D.C.
Mr. Chairman and Members of the Committee, I am pleased to have
this opportunity to discuss the state of agriculture and the rural
economy in the United States. For more than 7 years, I have had the
honor and privilege of serving as Secretary of Agriculture. I've
traveled to all 50 states and heard from farmers, ranchers and
Americans far and wide, from all walks of life about the impact that
USDA's staff, programs and services have on their lives. I could not be
more proud of the work the men and women of USDA do each and every day.
We have laid the foundation over the past 7 years to foster that
innovation and to provide assistance to regions that need it most
during times of adverse economic conditions. Today, the state of the
agricultural economy remains sound despite lower commodity prices, and
the innovation of American agriculture will continue to flourish and
create economic opportunity across rural America.
U.S. Economy Is Recovering
Policies pursued by President Obama after the collapse of the U.S.
economy in the Great Recession helped the U.S. economy recover jobs and
strength over the past 7 years. U.S. GDP is rising, and the national
unemployment rate continues to decline. The U.S. agricultural sector
has been a bright spot in the economy and played a major role in its
recovery. Agriculture has made significant contributions to our trade
balance by increasing exports to record high levels. We have added more
agricultural-related jobs under this Administration, with one in twelve
U.S. jobs currently supported by our agriculture sector; and our
nutrition program programs have both helped children and families get
the food assistance they need to be healthy and provided important
employment and training opportunities to help adults move toward self-
sufficiency. The Administration's focus on economic recovery over the
past 7 years has helped the majority of farm households improve their
financial condition, and we can expect that to continue as farm incomes
face increased pressure from lower commodity prices. Between 2010 and
2015, median farm household income increased by more than 40 percent as
farm households seized opportunities to increase off-farm income.
During that period the median value of off-farm earned income also rose
by 46 percent and nearly tripled for off-farm unearned income. Larger,
commercial farms are more dependent on farm income for the majority of
their household income. Those households benefited most from the recent
commodity price highs several years ago, but are also more vulnerable
to declining commodity prices and diminished returns from farming. In
2016, USDA forecasts additional increases in median farm household
income across all farm types (residence farms, intermediate farms, and
commercial farms), including increased off-farm income and on-farm
income.
Net Farm Income Under Pressure, But Balance Sheet and Land Prices
Remain Historically Favorable
The current combination of the stronger dollar and relatively high
global production has led to a large drop in expected 2015 and 2016 net
farm income, relative to the 2011 through 2014 period. USDA expects
real net farm income to be the lowest since 2002. There is some
slowdown in land values, but these values have fallen modestly from
recent record highs. However, the debt to asset ratio for U.S.
producers is still near record lows indicating that the farm balance
sheet is strong.
Although a strong dollar benefits U.S. consumers purchasing
imported goods, it makes U.S. exports appear more expensive to
customers and our products less competitive relative to exports by
other countries. In particular, the currencies in countries such as
Brazil, Argentina, and Russia have fallen dramatically against the U.S.
dollar. Moreover, global food commodity production has been at or near
record highs since 2013. Globally, countries have built substantial
stocks relative to use for most of the major cereals and oilseeds. In
addition, the United States is projected to maintain peak output for
meat and dairy products in 2016. Increased meat and dairy production
this year is expected to be accompanied by falling wholesale prices for
all meat and most dairy products. That will tend to lower retail prices
for those goods, but also will lower cash receipts for most livestock
and dairy producers.
Farm Safety Net Is Working But Gaps Remain
As falling global commodity prices continue to depress farm income,
there is the risk of negative impacts on farm equity, debt, and land
prices. However, the current farm safety net is structured to provide
important support for many crop and dairy farmers during a downturn.
Last year, USDA enrolled 1.76 million farmers in the new
Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs
by conducting an unprecedented education campaign. ARC and PLC are a
part of the farm-safety net, providing assistance only when there are
year-to-year crop revenue or commodity price downturns. To date, ARC
and PLC have provided over $5.2 billion in financial assistance for
crop year 2014, to more than 900,000 farms. In addition, more than half
of all dairy farms in the U.S.--over 23,000--have enrolled in the new
Margin Protection Program for Dairy (MPP-Dairy). This voluntary program
provides financial assistance to participating farmers when the
margin--the difference between the price of milk and feed costs--falls
below the coverage level selected by the producer. USDA paid dairy
producers over $400,000 in calendar year 2015 to provide financial
support during times of lower margins.
Cotton producers are experiencing lower market prices and that the
current safety net is not providing enough protection for producers. We
want to help, but we will have to work with Congress to overcome the
legal barriers that stymie more aggressive action.
The 2014 Farm Bill indefinitely extended the Farm Service Agency's
livestock disaster programs and the Tree Assistance Program. Since the
passage of the farm bill, these programs have paid producers over $5.8
billion to recover from natural disasters, including drought and
wildfires.
USDA worked with crop insurance companies to educate farmers and
ranchers about the new conservation compliance requirements in the 2014
Farm Bill and as a result, over 98 percent of Federal crop insurance
participants provided the documentation necessary to comply with those
requirements and maintain their benefits. We also strengthened the
Federal crop insurance program to include new support for beginning
farmers and producers of specialty crops including fruits and
vegetables. The new Whole Farm Revenue plan will be offered in all
counties in the United States in 2016.
The farm bill included several reforms to the Federal Crop
Insurance Program; however, there remain further opportunities for
improvements and efficiencies. The President's 2017 budget includes two
proposals to reform crop insurance, which are expected to save $18
billion over 10 years. This includes reducing subsidies for revenue
insurance that insure the price at the time of harvest by ten
percentage points and reforming prevented planting coverage. These
reforms will make the program less costly to the taxpayer while still
maintaining a quality safety net for farmers.
Access to credit remains a critical issue for producers, in
particular for small and beginning farmers and ranchers. Since 2009,
USDA has provided approximately 237,000 loans totaling over $33 billion
to farmers and ranchers. We expanded credit by lowering the Farm
Service Agency (FSA) Emergency Loan interest rate and working with the
Small Business Administration to extend nearly $7 million in SBA
emergency credit for rural small businesses.
In recent years, USDA has responded to outbreaks of swine enteric
coronavirus disease and highly pathogenic avian influenza. USDA
responded quickly to the unprecedented outbreak of Highly Pathogenic
Avian Influenza (HPAI) last winter and spring, working closely with
industry, contractors, and states to depopulate nearly 50 million
turkeys and chickens to stamp out the disease. USDA worked with trading
partners to regionalize trade restrictions and reopen export markets
for poultry and egg markets as quickly as possible. USDA also worked
closely with USTR in developing and bringing a successful WTO challenge
to India's AI restrictions on poultry and other products, obtaining
critical findings in 2015 that India's measures failed to regionalize,
were not based on international standards, and were more trade-
restrictive than necessary. And we redoubled our efforts to develop a
comprehensive HPAI preparedness and response plan for 2016 and beyond.
USDA and the poultry industry as a whole learned a lot of lessons
during the 2015 outbreak of highly pathogenic avian influenza, and as a
result, will be better prepared should the virus resurface in 2016,
Commitment To Increase Opportunities for Producers and Revitalize Rural
Communities
When I became Secretary of Agriculture, we recognized that a spark
was needed to make rural communities places where businesses--farm and
non-farm alike--want to innovate, grow, and create more good paying
jobs. That is why we focused our efforts on increasing exports and
taking advantage of the emerging bioeconomy, including biomanufacturing
and advanced biofuels, local and regional food systems, broadband, and
telemedicine. Our efforts not only supported the most productive
agricultural sector in the world, but also assisted rural communities
to be places where all businesses, farm and non-farm alike, prosper and
create jobs. A more robust and diversified rural economy helps
agricultural producers and rural residents alike by providing more
resiliency in times when the farm economy is in a downturn.
Trade Affected by Slowing Global Economy, But Trade Agreements Offer
Opportunities
Part of our strategy to create a diversified rural economy is to
expand the country's reach around the world by creating increased
opportunities to export our agricultural products. In Fiscal Year (FY)
2015, American agricultural producers achieved $139.7 billion in
exports, the third highest year on record and up 45 percent from FY
2009. Agricultural exports totaled over $911 billion for the period FY
2009 through FY 2015, the best 7 year stretch in history. In addition,
agricultural exports have increased in volume, demonstrating an
increasing global appetite for American-grown products.
USDA has worked hard to open new markets worldwide for farm and
ranch products. Trade agreements, like those with Panama, Colombia and
South Korea, create opportunities for trade growth. U.S. agricultural
exports to these three countries grew by nearly 28 percent, from $7.6
billion in FY 2012, when the trade agreements were first going into
effect, to $9.7 billion in FY 2015, supporting approximately 73,000
American jobs. U.S. agricultural exports to all U.S. FTA partners grew
from $15.5 billion in 1994 to $56.9 billion in 2015, a nearly four-fold
increase in 20 years.
U.S. farmers are facing unprecedented competition amid a slowing
global economy and appreciating dollar. That's why it is important for
Congress to approve the Trans-Pacific Partnership (TPP). When
implemented, the TPP agreement, with 11 Pacific Rim countries
representing nearly 40 percent of global GDP, will provide new market
access for America's farmers and ranchers by lowering tariffs and
eliminating other barriers. American agriculture needs the good deal
laid out in the TPP agreement to bolster its position in the light of
stiff competition and the state of the world economy. We are committed
to working closely with Congress to obtain support for this historic
deal so that our businesses can sell more rural-grown and rural-made
goods around the world, and more American workers can compete and win.
Agricultural exports support farm income, which translates into more
economic activity in rural areas. It is estimated that for each dollar
of agricultural exports, another $1.27 in business activity is
stimulated.
Closer to home, another important market for U.S. agriculture is
Cuba. USDA is proposing to establish an in-country presence in Cuba to
cultivate key relationships, gain firsthand knowledge of the country's
agricultural challenges and opportunities, and develop programs for the
mutual benefit of both countries. U.S. agricultural exports have grown
significantly since trade with Cuba was authorized in 2000. Since the
implementation of the Trade Sanctions Reform and Export Enhancement Act
(TSRA) in 2000, the United States has exported nearly $5 billion in
agricultural and food products to Cuba. Cuba's geographical proximity
and demand for U.S. products makes it a natural market. In fact, from
2003 to 2012, the United States was the leading agricultural exporter
to Cuba. A more open and normalized trade relationship with Cuba will
benefit both countries and help address the competitive disadvantages
that U.S. agricultural products currently face in this market. USDA's
Economic Research Service (ERS) analysis suggests that greater
liberalization could lead to higher and more diversified sales to Cuba,
similar to what the United States exports to the Dominican Republic, a
country with similar population and per capita income. U.S.
agricultural exports to the Dominican Republic averaged $1.1 billion a
year between 2012 and 2014, compared to $365 million to Cuba. Moreover,
the United States exports a broad range of agricultural products--beef,
turkey, breakfast cereals, and fresh apples--to the Dominican Republic
that Cuba does not currently import in sizable amounts.
USDA devotes significant resources to promote U.S. agricultural
trade and open new overseas markets for U.S. products. With 96 percent
of consumers living outside the United States, the only way U.S.
agriculture can continue to grow and prosper is to ensure that U.S.
producers can compete in the global marketplace. Between 2009 and 2015,
U.S. companies participating in USDA-endorsed trade shows reported
total on-site sales of more than $1.7 billion and more than $8.7
billion in 12 month projected sales. An independent study found that
U.S. agricultural exports increase $35 for every market development
dollar expended by government and industry. Since 2009, USDA has also
helped challenge 2,098 sanitary and phytosanitary, technical, and other
barriers to the export of American agricultural products, helping to
spur record exports of American agricultural products. For example, we
have removed unfair restrictions to help farmers export more U.S.
apples to China, a market with an estimated value of nearly $100
million per year, and expanded market access for U.S. beef in Japan,
Mexico, Hong Kong, the Dominican Republic, Ecuador, Uruguay, and
Colombia. Total U.S. beef and beef product exports reached a record
$6.8 billion (1.2 billion tons) in FY 2014. We work closely with USTR
to vigorously enforce our international trade agreements, such as
through our ongoing WTO challenge, together with New Zealand, to
Indonesia's import restrictions on horticultural products, poultry,
beef, and other products. We will continue to work with you and the
U.S. agricultural community to open new markets and level the playing
field for U.S. farmers and ranchers.
Investments in the Rural Economy Create Economic Opportunities for
Everyone
We have recognized rural opportunities beyond agriculture by making
historic investments in rural communities, making them more attractive
to non-farm businesses and talented hard-working individuals looking to
get ahead. USDA has sought to revitalize rural areas and diversify our
nation's agriculture by making significant investments in rural
infrastructure. Since 2009, we invested a total of $13.3 billion in new
or improved infrastructure in rural areas through 10,623 water
projects. These improvements helped nearly 18 million rural residents
gain access to clean drinking water and better waste water disposal.
Modernized electric service was delivered to more than 5.5 million
subscribers and over 180,000 miles of electric lines were funded. We
helped nearly 103,000 rural small businesses grow, creating or saving
an estimated 450,000 jobs between FY's 2009 and 2015. Since 2009, USDA
assisted more than 1.1 million rural families to buy or refinance a
home, helping 141,000 rural Americans become homeowners in FY 2015
alone.
We also saw the need to provide increased opportunities to allow
everyone to share in the prosperity of the growing economy. So we
targeted our efforts to the poorest communities, invested in new and
beginning farmers, and supported our veterans, which have increased
opportunities for hard working Americans. Our efforts are bearing
fruit. Over the last 5 years unemployment rates in rural areas have
fallen fairly consistently in rural areas, declining by a full
percentage point or more in each of the last 2 calendar years. These
efforts have contributed to the employment gains in rural America that
have happened since 2009 and have led to increased economic activities
in high poverty communities.
USDA's place-based efforts are making sure that the programs that
help alleviate the impact of poverty are available and accessible even
in the poorest and persistently poor areas. In 2016, we expanded the
StrikeForce Initiative to four additional states to include a total of
970 counties, parishes, boroughs, and census areas in 25 states and
Puerto Rico. We know that place-based efforts work and we have seen
StrikeForce bring economic opportunity directly to rural Americans
where they live and help rural communities leverage their assets. In
2015, in StrikeForce target areas, USDA partnered with more than 1,000
organizations to support 56,600 investments that directed more than
$7.5 billion to create jobs, build homes, feed kids, assist farmers and
conserve natural resources in some of the nation's most economically
challenged areas. Since the initiative was launched in 2010, USDA has
invested more than $23 billion in high-poverty areas, providing a
pathway to success and expanding the middle class.
New and beginning farmers and ranchers are a fundamental part of
the agricultural marketplace and are needed to carry on America's
strong legacy of agriculture productivity. However, according to the
2012 Census of Agriculture, their numbers are continuing a 30 year
downward trend. To reverse this trend, we need to equip the next
generation of farmers and ranchers with the tools they need to succeed.
Under the leadership of Deputy Secretary Krysta Harden, USDA has
increased access to our programs by collaborating with partners and
improving customer service to increase opportunities for all sizes,
segments, and types of farmers and ranchers to break down the barriers
they face during the first 10 years of business. For example, USDA
initiated a microloan program that has provided more than 16,800 low-
interest operating loans, totaling over $373 million to producers
across the country, and has recently expanded to include farm ownership
loans. We have also developed an innovative web tool and conducted
other outreach activities, to help support key groups, like veterans,
women, the socially disadvantaged, as well as facilitate
intergenerational transfer of farms and ranches. To ensure the success
and sustainability of beginning farmers and ranchers, USDA has created
an agency priority goal that will publicly share USDA performance goals
and progress in support of new and beginning farmers.
Rural America Needs a Strong Biobased Economy
USDA continues to lead the way for renewable energy by supporting
the infrastructure needed to grow the new energy economy. Since 2009,
Rural Development has supported over 15,000 renewable energy projects
to help producers and rural businesses save energy and increase their
profitability and increase the production of renewable fuels. The
Department has helped thousands of rural small businesses, farmers and
ranchers improve their bottom lines by installing renewable energy
systems and energy efficiency solutions, which will generate and save
more than 9.4 billion kilowatt-hours--enough energy to power 820,000
American homes annually. Under expanded authority provided by the 2014
Farm Bill, we are working to expand the number of commercial
biorefineries in operation that produce advanced biofuels from non-food
sources through the Biorefinery Assistance Program. This focus on
renewable energy has resulted in support for the construction of six
advanced biofuels production facilities, over 2,200 wind and solar
renewable electricity generation facilities, and 93 anaerobic digesters
to help farm operations capture methane to produce electricity.
USDA recognizes that the bioeconomy has the potential to create
unprecedented growth in the rural economy, by creating opportunities
for the production, distribution and sale of biobased products and
fuels. Therefore, we made available $100 million in grants under the
Biofuel Infrastructure Partnership (BIP), nearly doubling the number of
fueling pumps nationwide that supply renewable fuels to American
motorists, such as E15 and E85. Twenty-one states are participating in
the BIP, with matching funds from state and private partners, providing
$210 million to strengthen the rural economy and increase the demand
for corn and agricultural commodities used in the production of
biofuels. We are also proud of our effort to partner with the
Department of Energy and Navy to create advanced drop-in biofuels that
will power both the Department of Defense and private sector
transportation throughout America.
We also took new steps to support biobased product manufacturing
that promises to create new jobs across rural America--including adding
new categories of qualified biobased products for Federal procurement
and establishing reporting by Federal contractors of biobased product
purchases. The more than 2,200 products that have received
certification to display the USDA Certified Biobased Product label are
creating and increasing consumer and commercial awareness about a
material's biobased content as one measure of its environmental
footprint. We released a study of the bioeconomy last year and found
the biobased products industry generates $369 billion and four million
jobs each year for our economy. Biobased products industries directly
employ approximately 1.5 million people, while an additional 2.5
million jobs are supported in other sectors. Shifting just 20 percent
of the current plastics produced into bioplastics could create 104,000
jobs. Environmentally, the increased use of biobased products currently
displaces about 300 million gallons of petroleum per year--equivalent
to taking 200,000 cars off the road.
Local and Regional Food Systems Create Opportunities for Agriculture
and Communities
This Administration has taken unprecedented steps to open the doors
of USDA to new stakeholders and to adapt to changing consumer demands
that impact agriculture. One of those changes has been the growing
consumer interest in buying local--in supporting local farms and
ranches with their food purchases. The value of local food sales has
grown to at least $12 billion in 2014 from $5 billion in 2008, and some
industry sources estimate that sales could hit $20 billion by 2019. At
USDA, we recognize that this consumer interest is an opportunity for
agriculture, and that strong local and regional food systems can help
meet many goals. They harness the entrepreneurial innovation of small
and medium-sized family farms and help them succeed in rural America;
they drive the creation of new food businesses that in turn create
jobs; and they are a strategy to connect low-income consumers with
healthy food options in areas where they are currently under-served.
Between 2009 and 2014, USDA invested more than $800 million in more
than 29,100 local and regional food businesses and infrastructure
projects. In FY 2015 alone, USDA directly supported nearly 10,000 farms
and ranches, food entrepreneurs and communities through local food-
related projects. In addition, USDA has made expanding SNAP recipients'
access to fresh fruits and vegetables through farmers' markets a
priority in recent years. Between 2008 and 2015, the number of farmers'
markets and direct marketing farmers that accepted SNAP rose from about
750 to almost 6,500. Over $19 million in SNAP dollars was spent at
farmers' markets in 2015, up from $4 million in 2008. This is a win-win
for both farmers and SNAP participants.
We Must Continue To Reduce Hunger and Improve the Health and Nutrition
of Our Nation's Children
The Administration continues its strong support for the
Supplemental Nutrition Assistance Program (SNAP). SNAP kept at least
4.7 million people, including nearly 2.1 million children, out of
poverty in 2014. SNAP has been shown to have long-term benefits as
well. Recent research indicates that for low-income individuals access
to SNAP in early childhood led to a 16 percentage point decline in the
likelihood of obesity as an adult and an 18 percentage point increase
in the likelihood of completing high school. The Budget also supports
WIC, ensuring that the program can serve all eligible applicants.
Because hunger does not take a vacation during the summer months
when school meals are unavailable, we have expanded the Summer EBT for
Children demonstration pilots over the last 2 years, and the
President's FY 2017 Budget proposes to stand up a permanent, nationwide
program. Rigorous evaluations of Summer EBT pilots demonstrate the
program effectively reduces food insecurity and improves nutrition. In
tandem, we have expanded the Summer Food Service Program. In total,
summer meals sites have served over 1.2 billion meals to low-income
children since 2009.
Schools around the country have made tremendous progress in
improving the nutritional quality of school meals. During the 2014-2015
school year, over 97 percent of schools successfully met the nutrition
standards by serving meals with more whole grains, fruits, vegetables,
lean protein and low-fat dairy, and less sodium and fat. I am pleased
the Senate Agriculture Committee passed a bill that ensures progress
will continue to improve our children's diets and urge Congress to
reauthorize Child Nutrition Programs for our young people without
delay.
Fostering Innovation Increases Productivity and Protects the Health of
Our Citizens
We must continue to innovate to keep U.S. agriculture competitive.
Long-term agricultural productivity growth relies on innovation through
research funded by both public and private sectors. Innovations in
animal/crop genetics, chemicals, equipment, and farm organization all
result in American farmers producing more with less. In recent years,
USDA scientists and university partners have developed new ways to deal
with the influenza virus in pigs; increased milk production with fewer
resources; created innovative and effective ways to manage pests;
supported innovations in irrigation technologies resulting in water
savings and improved nitrogen use efficiency; and increased
profitability of farmers and livestock producers despite droughts and
increasing temperatures. Studies have shown that every dollar invested
in agricultural research returns between $10 to $20 in economic
benefits to the nation.
USDA has facilitated the adoption of new technologies by
streamlining the process for making determinations on petitions
involving biotechnology. These improvements provided more rapid and
predictable availability of biotechnology products to farmers,
ultimately providing technologies to growers sooner and more choices to
consumers. In FY 2015 alone, USDA reviews found safe genetically
enhanced varieties of potato, corn, soybean, cotton, and alfalfa. USDA
estimates that the cumulative number of actions taken to deregulate
biotechnology products based on a scientific determination that they do
not pose a plant pest risk will increase from a cumulative total of 82
actions in FY 2009 to an estimated cumulative total of 126 actions in
FY 2017.
Since 2009, USDA has worked to safeguard America's food supply,
prevent foodborne illnesses and improve consumers' knowledge about the
food they eat. For example, USDA adopted a zero tolerance policy for
raw beef products containing six strains of shiga-toxin producing E.
coli, giving products that test positive for any of these strains the
same illegal and unsafe status USDA has long given products testing
positive for E. coli O157:H7. Additionally, USDA set tougher standards
for Salmonella and new standards for Campylobacter on poultry
carcasses, and developed the first ever Salmonella and Campylobacter
standards for chicken parts, which are more commonly purchased than
whole carcasses. Together, USDA estimates these new standards will
reduce illnesses by about 75,000 annually, and help the agency meet
Healthy People 2020 goals. The total number of illnesses attributed to
USDA-regulated products fell nearly 11 percent from 2009 to 2015, which
equates to more than 46,000 avoided illnesses on an annual basis.
A Healthy and Prosperous America Relies on the Health of Our Natural
Resources
America's farmers, ranchers and landowners have led the way in
recent years to conserve and protect our soil, water and wildlife
habitat. With the help of farm bill programs, USDA partnered with a
record number of producers since 2009 to create not only a cleaner,
safer environment, but to create new economic opportunities. We have
enrolled a record number of private working lands in conservation
programs and implemented strategies--such as landscape-scale efforts--
to restore our forests and clean our water supply. A new model for
conservation investment established by the 2014 Farm Bill for the
Regional Conservation Partnership Program (RCPP) has allowed USDA to
leverage $800 million to support 115 high-impact conservation projects
across the nation that will improve the nation's water quality, support
wildlife habitat and enhance the environment.
USDA is also helping rural America respond to a changing climate.
While U.S. agriculture and resource management have long histories of
successful adaptation to climate variability, the accelerating pace and
intensity of climate change presents new challenges. For example,
increases in atmospheric carbon dioxide, rising temperatures, and
altered precipitation patterns are already affecting agricultural and
forestry productivity. To address this challenge, we are helping
farmers, ranchers, and forest land owners respond to these challenges
in many ways. USDA's Regional Climate Hubs are developing and deliver
science-based, region-specific information and technologies to
agricultural and natural resource managers across the U.S. The Hubs are
also providing technical support, regional assessments and forecasts,
and outreach and training to enable climate-informed decision-making.
By partnering with farmers, ranchers, rural land owners, and other
stakeholders we can improve the resilience of farm and forestry systems
to the challenges posed by climate change
Using the authorities provided in the 2014 Farm Bill, we have
developed a strategy to reduce net emissions and enhance carbon
sequestration by over 120 million metric tons of CO2
equivalent (MMTCO2e) per year by 2025. The strategy,
outlined in ``The Building Blocks for Climate Smart Agriculture and
Forestry,'' builds on USDA's history of cooperative conservation to
support resilience to extreme weather, reduce greenhouse gas emissions,
and increase carbon storage. Through this initiative, we will encourage
actions that promote soil health, improve nutrient management, and
conserve and enhance forest resources on private and public lands. In
addition, USDA will redouble efforts to improve energy efficiency,
develop renewable energy, and use biomass both as a liquid fuel and to
contribute to heating, cooling, and electric needs.
USDA's approach to climate change is practical, results-driven, and
recognizes that efforts to address climate change fit within USDA's
broader mission of rural development, food security, and conservation.
Conclusion
Mr. Chairman and Members of the Committee, thank you for this
opportunity to speak briefly about the current state of the rural
economy in the United States. Rural Americans have shown over the past
year their resolve and their willingness to embrace innovation--and I
believe that the same tools that kept the rural economy resilient over
the course of challenging year will help rural America continue to
drive the economy forward.

The Chairman. Thank you, Secretary, for being here. I
didn't intend to go here, but Mr. Secretary, I wasn't in those
rooms with Chairman Lucas and Ranking Member Peterson. I wasn't
there, but I don't think there was any reference to cottonseed,
period, during the farm bill negotiations. None. To rely on
something that didn't happen, you have been misled. I just
don't think that that was the case. Cottonseed didn't come up
until these dire consequences arose, until it was shown in the
STAX Program, only 14 percent of cotton was covered by STAX.
That was nowhere near what folks thought it was going to be. It
is not working.
The cottonseed thing, to my references, came up late last
year as a potential to put seed under the program and not lint.
I don't think you are arguing that seed and lint are the same
thing. They come from the same plant, but this idea that
somehow there was a negotiation on seed specifically during the
farm bill negotiations, I believe, is incorrect.
Secretary Vilsack. Mr. Chairman, can I respond?
The Chairman. Sure, yes, sir.
Secretary Vilsack. First of all, in putting together the
ARC and PLC programs, there was obviously a decision to remove
cotton from those programs. I think everybody acknowledges
that. Within the law, essentially there are provisions that
define the opportunity for the Secretary to include additional
oilseeds as crops as they evolve. That listing of other
oilseeds includes a variety of other oilseeds. It includes
sunflower seeds, rapeseeds, canola seeds. Clearly, Congress
could have also included cottonseed in that list. They did not.
That is an issue.
Second, the industry came to us when we were crafting the
risk management program under STAX and requested oilseed to be
included in that risk management program.
So those two facts, Congress didn't include it in the list
and the industry asked us to include it in the risk management
program, indicate what the intent was at the time.
Now if Congress wants to reopen the farm bill, then
obviously you will have to deal with the issue of the cost,
which is one of the motivating reasons why all of this was
established----
The Chairman. I appreciate that, Mr. Secretary. That was a
discussion you may have had or may not have had with cotton
folks then. That is not a discussion that Congress had. Are you
arguing that the list of oilseeds included is exclusive and
that you have no discretion?
Secretary Vilsack. No, what I am arguing is that that list
and that provision is set up for oilseeds that arise during the
course and between farm bills----
The Chairman. Where are you getting that interpretation?
Secretary Vilsack. Because that is the way in which this
provision has been interpreted and utilized since its
inception.
The Chairman. Okay, so it wasn't new to the 2014 Farm Bill?
Secretary Vilsack. We have used this before, not for seeds
that have existed, Mr. Chairman, but seeds that have come up in
between farm bills to allow us the flexibility----
The Chairman. So sunflower seeds are brand new. They didn't
exist before 2008? We gave you the discretion in order to use
that discretion to look at new circumstances, and----
Secretary Vilsack. Not in this particular circumstance. You
gave me the discretion to use it if something crops up that was
under----
The Chairman. Something cropping up like an unexpected
economic impact that the 2014 Farm Bill didn't anticipate?
Secretary Vilsack. No.
The Chairman. That wouldn't be unexpected?
Secretary Vilsack. No, that is why we have CCC and that is
why it was unfortunate that Congress put the prohibition in the
omnibus budget bill that restricts me from using CCC. I am more
than happy to do that. Remove that prohibition and we can set
up a program to help cotton farmers in the interim, and then
you can revisit this issue specifically when you debate the
next farm bill.
The Chairman. But for the restrictions on CCC, that was
included in 2011 in response to things that the agency did in
2010, you could list cottonseed as an other oilseed?
Secretary Vilsack. I couldn't list cottonseed but we could
create a program that would provide help and assistance in the
interim.
The Chairman. All right, and there are no other programs
that you can do without that?
Secretary Vilsack. The other issue that we talked about was
the cost-share program----
The Chairman. And why have you not done that?
Secretary Vilsack. Well, because you have indicated to us
that you weren't interested in us pursuing that.
The Chairman. But you have already decided that you know
what we are interested in and not interested in. If you have
the sole discretion to do the cost-share program----
Secretary Vilsack. I don't, sir. I don't.
The Chairman. Why?
Secretary Vilsack. You have to give me that discretion.
The Chairman. How?
Secretary Vilsack. You have to give me that direction,
because you excluded it from the previous----
The Chairman. I don't think cottonseed was discussed in the
2014 Farm Bill.
Secretary Vilsack. You had the opportunity and it was
certainly discussed in terms of establishment of the risk
management program, when we were specifically told to include
cottonseed in that program.
Look, Mr. Chairman, the easiest thing to do right now is
not for us to continue to have this discussion, but for us to
figure out a way in which that prohibition in CCC could be
removed, because that would allow us the most immediate way of
providing help and assistance, in addition to the cost-share
beginning.
The Chairman. Well, I have had some preliminary discussions
with the Appropriations Committee. There are some historical
issues with respect to the use of that discretion that gave
rise to why that restriction has been in there since 2012, and
anyway, my time has expired. We will have a second round,
perhaps.
Mr. Peterson, 5 minutes.
Mr. Peterson. Thank you, Mr. Chairman.
I want to switch gears, Mr. Secretary, and I know the CRP
sign up has been going on for some time. I guess it is going to
end in a week or so. Do you have any kind of a read on how that
has developed and kind of where we are at with that? Do you
have any information about----
Secretary Vilsack. It is going to be quite competitive,
based on the cap that has been established for CRP. We
anticipate and expect it to be quite competitive. We also are
going to see competition in terms of the grassland section of
CRP as well.
Mr. Peterson. Grassland?
Secretary Vilsack. Yes.
Mr. Peterson. What do you mean by competitive?
Secretary Vilsack. Well, I would say we have roughly 2
million acres of opportunity, and we think we are probably
going to get requests that would exceed potentially that 2
million acre threshold. So in that sense, it is competitive so
we are going to have to focus our efforts on highly erodible.
Focus our efforts on maintaining the continuous programs, which
are very popular, so that we maximize the benefit and use of
this program to the extent we can, based on the cap.
Mr. Peterson. One of the problems we had when we wrote the
farm bill is we wrote it when prices were good. That is always
a problem. And it was also a problem with CRP, because we had
people leaving CRP because they thought they could make more
money farming it and renting it. In my part of the world, we
had shelter belts taken out and all kinds of other stuff going
on that I tried to warn people about.
But my concern is, we have seen an increase of use of
continuous, and that is good. Minnesota, we are one of the top
ones in using continuous. But the biggest part of that is the
CP-23, the wetlands restoration thing, and that is the reason
that is being used so much is because the ones that want to
stay in CRP, that is what they have had to do in order to get
back into the program.
But one of my concerns is that the way we have structured
this, we have tilted too much towards this highly erodible and
using specific kinds of seeds and so forth that are very
difficult to establish. I can personally attest to that. And so
my concern is, and we had a hearing on this, that we are going
to focus too much of the CRP in certain areas because of the
criteria that we have established with this. And one of the
reasons CRP, in my opinion, has been so successful is it has
been spread out in big tracts all over the place. And that
happened because the original program was not a conservation
program. The original program was a supply reduction program,
because we had low prices, especially in wildlife, that is why,
in my opinion, it has been so successful.
I am worried about what is going on now, though, that we
are going to be concentrating this stuff too much in certain
areas, and if there is not going to be CRP in other areas
because it doesn't meet the highly erodible and whatever other
criteria we have. And we have guys plowing up perfectly good
cover, and some of it needs to be restored. But why we are
plowing up stuff that is perfectly good, we have no weeds in
it, it doesn't make any sense.
I don't know if we have any discretion in how you do this,
but I hope that we can approach this in a way that we can keep
a fair amount of this stuff spread out and not get this too
concentrated as you are doing the process. That you don't do
everything just based on the EBI, that there has to be some
discretion there.
Secretary Vilsack. Congressman, I appreciate the suggestion
and I will certainly take that back and make sure that our team
understands and appreciates what you just pointed out, which is
the need for this program to be available in all parts of the
country that really want it to be utilized. It is a fair point.
Mr. Peterson. Now the grassland, I understand there has
been, what, a million acres offered under grassland?
Secretary Vilsack. Yes, I don't remember what the exact
acreage is, but I know that there is quite a bit of interest in
it.
Mr. Peterson. Yes, so do you have any more specifics about
that, or any----
Secretary Vilsack. Just what I have----
Mr. Peterson.--suggestions? There has been a lot of
interest?
Secretary Vilsack. It is a lot of interest, and
understandable, because we have adjusted the rental rates now
so that it is obviously attractive, more attractive than it has
been for a while.
Mr. Peterson. All right. Thank you, and I appreciate your
being willing to take a look at that.
Thank you. I yield back.
The Chairman. The gentleman yields back.
Mr. Neugebauer, for 5 minutes.
Mr. Neugebauer. Thank you. Secretary Vilsack, it is good to
have you here, and I appreciate your coming back again to speak
to our Committee.
I would say this from my perspective, and from my
Congressional district. Your remarks about the state of the
rural economy are a little bit overstated, since we don't feel
that same situation in west Texas.
I want to associate myself and have associated myself with
the Chairman on the issue of the cottonseed. But one of the
things I wanted to go back to is in a letter, I believe you
alluded to a letter 100 of us sent you back in December and we
encouraged the USDA to take any policy actions that could have
a stabilizing effect on the U.S. cotton industry. And on
February the 11th, you testified before the Appropriations
Committee and mentioned the possibility of providing some
assistance to help with cotton ginning. Where are we on that?
Secretary Vilsack. Well, if it is something the industry is
interested in having us pursue, and it is something that
Members of Congress want us to look at, we would establish a
cost-share program. We would have a discussion, obviously,
about the percentage of the cost-share. In my discussions with
some Members of Congress, we suggested a 50 percent cost-share,
which would be about $150 million. It could be more than that.
And we would establish and go to OMB for permission and
authority to get this set up, and we would try to get it set up
as quickly as possible and provide resources to the gins or the
producers, depending on how we need to structure it in a way
that does not create any kind of trade implications that would
be negative to the industry.
Mr. Neugebauer. What is keeping us from implementing it?
Secretary Vilsack. We have received indications from some
folks that it is not something that the industry wanted us to
do at this point in time, but if they do, and you are telling
me they do, then we would be happy to go back and start that
process.
Mr. Neugebauer. I think there is a little bit of a
misunderstanding. I think one of the things that some people
thought you were talking about that, obviously they were
promoting the cottonseed issue. They thought you were trying to
substitute that. Where we are, and I hope you understand that
in cotton country, it is a severe issue. We have producers now
that are not talking about how much of their equity they are
willing to put into the next crop. We have producers that are
sitting down with their bankers right now and the question of
whether or not they are going to get to plant a crop, is
whether they can continue to farm. And so as those 100 of us
wrote you that letter, we were trying to paint a picture that
we need for you to use every tool that is available to you as
the Secretary of Agriculture to do that, and so my feedback
from the industry is if that is one of the tools in the
toolbox, let's get that tool out of the box. But we are not
necessarily giving up on you sitting down at the table and
discussing other tools that we might be able to do, because it
is a very serious issue for the cotton industry.
Secretary Vilsack. We are happy to do this. This is also
the reason why we allowed for certificates to be used in lieu
of the cotton as collateral for our loans, our marketing loans.
We did do that. That is going to provide some small bit of
relief, but we would be happy to go back and start that process
now. It would be helpful if we could get an indication from the
industry precisely what they think in terms of the technique
and the details of how this would work on the ginning so that
we would be assured that we get as much help to producers as we
possibly could. That would be helpful. We have not received
that kind of feedback, but we are more than happy to sit down
with the industry tomorrow to begin that process.
Mr. Neugebauer. I think they would be extremely helpful,
but I also want to reiterate, I think that we need to look at
other tools that you may have as Secretary, because as you
know, this legislative process isn't always a real quick
process, and a lot of these farmers don't have 6 months or a
year for us to work out some of these issues. They need for
some kind of response on an immediate basis, really.
Secretary Vilsack. That is why having the CCC flexibility
would be helpful, because that is something we could use fairly
quickly. I would say in response to the Chairman's comments
about why we have that, fair enough, but I am not going to be
around, so why tie the hands of the next Secretary? Why not
give the next Secretary the benefit of the doubt, or place
restrictions on it so that it is used primarily for the things
you want it to be used for, but a blanket prohibition makes it
really hard to do this job in light of falling commodity
prices.
Mr. Neugebauer. My time has expired, Mr. Chairman.
The Chairman. The gentleman's time has expired.
Mr. Scott, 5 minutes.
Mr. David Scott of Georgia. Thank you. Secretary Vilsack,
welcome.
I think we need to look at this from the standpoint of the
cotton farmer right now, and we have a crisis in cotton
farming. It is a very, very serious situation.
So let me see if we can point out a direction here. First
of all, we can't solve the problem of the oilseed, because we
would have to open up the farm bill and go into that. So we
have to put that aside. Now we have two other options here. We
can go with the CCC, or we can go with the cost-share and the
ginning. Is that correct?
Secretary Vilsack. Or you could do both the CCC and the
ginning.
Mr. David Scott of Georgia. Wonderful.
That is what I think we really, really need to do. My
cotton farmers in Georgia this year are farming in 2015,
280,000 acres less, less than they did before, so there is a
real crisis here, and if we could use this hearing to send a
message of security to the farmers who may be listening in that
you as the Agriculture Secretary, we as the Agriculture
Committee, we have the farmers' back.
Now here is the other issue. The other issue is if we go
down this road with these two programs, we've got a timing
issue. Cotton planting is now for the next year. So can you
explain to us if we use both of these, your indications, and I
have talked with you before about this, says that you are
willing to do this, but only a year. Are you still of that
mind, because we need a much longer duration of whatever help
we give the cotton farmers, more than a year.
Secretary Vilsack. Well, Congressman, we are willing to
work to put together a plan that creates a bridge between now
and the time that you all take up the next farm bill and decide
how to allocate these scarce resources that you will have
available at that time to fashion a farm bill. So we are more
than happy to talk about multi-year opportunities, and the CCC
fix would obviously create that flexibility. In terms of the
ginning, we have to obviously get the information and data from
the mills, and we would be getting that probably this spring,
so we would try to move as expeditiously as possible to get
payments to folks.
Second, I would encourage producers that are working with
bankers that are a bit skeptical about all this to basically
make sure that they understand that there are guaranteed loan
programs at FSA that could potentially reduce that stress or
that concern on the part of the banker, and hopefully they
would utilize our programs to provide the credit to put a crop
in the ground.
Mr. David Scott of Georgia. Okay, and let me ask you, if we
go with the CCC, what kind of timeframe, because I am very much
concerned about making sure that our cotton farmers realize
that we will be getting help to them in time. If we went with
CCC, what would be the steps we need to do? How long would it
take before the deal is in place to give security to the
farmers?
Secretary Vilsack. Obviously first it depends on how
quickly you all can remove the prohibition, whether you have to
do that through an appropriations process or whether you could
do that in some bill that is going through the Congress.
Assuming that this is the direction that you all want us to
take, I am going to go back to our team and basically say let's
put together a plan that could potentially be triggered as soon
as, if and when, Congress acts.
Now one thing we were thinking about doing in this space is
the transition payment program that was in place in 2014 and
2015 that was restricted by Congress to 2014 and 2015. That is
something we could look at that we already have set up.
Sometimes when you set up programs, you have technology issues.
You have FSA training issues, and that takes a little time. But
we try to get it done as quickly as we possibly could.
Mr. David Scott of Georgia. Well, I would be very
interested, and I know several Members on the Committee would
be very interested in helping to speed the process along in
getting that prohibition removed on the CCC.
Now what about the ginning and the cost-sharing? How long
and what would that process be?
Secretary Vilsack. That does require us to have information
from the mills, which we will get this spring and we would
anticipate shortly thereafter would be able to make payments.
Mr. David Scott of Georgia. Okay. Well, I----
Secretary Vilsack. Assuming we get the details worked out
with the industry to make sure that as we set this up, that the
resources and help gets to the producer to the extent we can do
that, and to the extent that we do it in a way that doesn't
create trade implications that would be negative to cotton.
Mr. David Scott of Georgia. Well thank you, Mr. Secretary.
As you know that we, Georgia, is the number two cotton
producing state in the nation next to Texas, so we are very
concerned about that, and I certainly appreciate the
opportunity working as quickly as we can in assisting you in
any kind of way to bring these two, the CCC and the cotton
ginning cost-share to fruition quickly.
Thank you, sir.
The Chairman. The gentleman's time has expired, and Mr.
Lucas, 5 minutes.
Mr. Lucas. Thank you, Mr. Chairman.
Mr. Secretary, one kind of long point and two quick points.
I would like to comment on a couple of programs that are near
and dear to my heart that are really important to rural America
and preserving our resources. That is the Public Law 83-566 and
the Small Watershed Rehabilitation Program, close and dear to
my heart. I think they are very important to preserving our
resources.
In last year's budget request, Fiscal Year 2016, the
President's own document referenced the program as helping
communities to adopt the changes in natural resources
conditions, minimize the impact of natural disasters through
the broad authorities provided by the program, a strategic
combination of land treatment, structural measures, floodplain
amenities that would be used to help communities create a more
resilient infrastructure and natural resource system. I
couldn't have said it better myself than the Administration
said. I was a little surprised and I won't deny disappointed to
see that there was no funding included in the President's
budget proposal for this year. Could you talk for a moment
about the Small Watershed Upstream Flood Control Program, P.L.
83-566, and the rehabilitation program, and why they matter?
Secretary Vilsack. Why they matter?
Mr. Lucas. Why they are important, why they matter. I think
they do. I believe you do, too.
Secretary Vilsack. Well first of all, I would say they
matter because you think they matter. I recognize----
Mr. Lucas. You are a wise Cabinet Secretary, sir.
Secretary Vilsack. Look, they matter for a number of
reasons. One, because of the complexity of our land, because of
the way in which it has evolved over time, because of the
impact of changing climates, intense weather patterns, weather
variability, there is an ever-changing landscape that creates
risks. And to the extent that you have programs, big and small,
to help you manage those changes, it is helpful.
The challenge, of course, is how you fit all of the needs
into a confined budget that has parameters that have been fixed
from the top and basically filtered down and limit the
appropriations process.
Mr. Lucas. Absolutely, Mr. Secretary, and for my
colleagues' benefit, those who may not have focused on the
program, we are talking about building relatively small earthen
dams, interlocking systems to manage floods to keep soil and
water in place to allow it to meter through to protect human
life, property, and wildlife. The program began back in the
1940s, very successful.
On that note, Mr. Secretary, let me step over to another
topic, and I would be remiss now at approximately 7 years into
your tenure as Secretary of Agriculture if I didn't laud you.
Your help during the 2012 and 2013 and 2014 Farm Bill process
was very important in working with both this Committee and the
other committee on the other side of campus, so to speak, to
overcome some really difficult circumstances. We went through
some challenges, all of us on this Committee, and working with
you and your good folks to finally achieve the Agricultural Act
of 2014. And I appreciate that, and I laud you for that.
But I have to conclude by simply saying in respect to my
constituents back home and what my colleagues here are noting,
there are some real challenges going on in certain sectors of
agriculture back home. Cotton is one of those situations where
we worked with every insightful group to try and address the
WTO ruling, to try and craft something that would work within
the general framework of the farm bill. It was a tough process,
and unfortunately as is demonstrated back home, it wasn't a
perfect result. We vest you and the very, very bright people
that you choose down at the Department to help you implement
the law with a great deal of discretion. I would urge you to
look at the situation as it pertains to cottonseed and to try
to, in whatever way you can, use that discretion to the maximum
benefit of the folks back home that both you and I represent. I
know you will do what you can legally. I am not an attorney,
but I believe the way the language is put together, there are
really bright attorneys out there who can achieve that
necessary flexibility.
But with that, again, thank you for your efforts on the
farm bill, and I know you will do whatever you can.
Secretary Vilsack. Mr. Chairman, you had a difficult job,
obviously, and anybody who was part of that process, and it was
made more difficult by the fact that you all had committed to
providing a savings of, as I remember, $23 billion, and that
required some very difficult choices to be made.
At the same time, there were concerns from an international
trade perspective which is one of the reasons why we are where
we are. We are going to continue to look for ways in which we
can provide help and assistance, as you all feel very strongly
about your oaths, I feel very strongly about the one I took.
Mr. Lucas. I would simply say in regards to the 2014 Farm
Bill, the old adage about it is not your enemies that will get
you, it is your friends sometimes is entirely true.
With that, Mr. Secretary, I yield back, Mr. Chairman.
The Chairman. The gentleman yields back.
Mr. Costa, 5 minutes.
Mr. Costa. Thank you very much, Mr. Chairman and Ranking
Member, for holding this important hearing. Mr. Secretary, I
want to commend you for your years of service to our country
and to American agriculture. We have not always agreed, but you
have always been willing to try to be there to solve problems
both for the two farm bills that we have worked on, and the
implementation of those farm bills.
I have a series of questions I want to ask you, but I am
struck by the numbers. In 1954, the average age of an American
farmer was 48 years of age. Today, the average age of an
American farmer is 59 years of age. And what we see is with
2\1/2\ percent of America's population directly involved in the
production of food and fiber, a comfort level that is alarming
to me that Americans take their food, their food products for
granted. It is a national security issue and we don't treat it
like a national security issue. The fact of the matter is that
American farmers and ranchers and dairymen produce the most
cost-effective, healthiest food anywhere in the world that
allows the rest of our country to be able to have a healthy
diet and go about their business. And frankly, we have to do a
better job of highlighting the importance of the security of
America's food production, as we talk about a host of issues.
Whether it is economic conditions in our rural communities,
whether we talk about the trade agreements, whether we talk
about the dairy industry, or whether we talk about cotton, as
many of my colleagues have mentioned in their earlier comments
and questions.
Mr. Secretary, can you please explain to me, and I want to
make it local for a moment just briefly, with the drought
conditions that we are facing in California. You are not in
control of the water, Federal water systems or the state water
systems, but what additional aid that the USDA is undertaking
to provide emergency assistance for farmers during this
drought, really briefly, because I have a couple of other
questions.
Secretary Vilsack. Disaster assistance for livestock
producers, additional emergency conservation funding,
additional resources for rural development for the development
of municipal water systems, those would be three things.
Additional research that is allowing us to do better jobs with
irrigation and seed technology that is going to allow us to
produce crops with less water.
Mr. Costa. Well, we appreciate that and we may be looking
at La Nina conditions sadly next winter, and we may need more
help.
Rural definitions are a problem for many of us who have
districts, and you have been to my district several times, and
I thank you for meeting with farmers and ranchers and dairymen
and women, dealing with communities. The Valley is pretty
rural, but we have some population centers that are several
hundred thousand people or more, and the communities within
those counties that have a large city are unfortunately
impacted because they don't qualify under the rural definition.
Could you speak to that for a moment?
Secretary Vilsack. Two things we were attempting to do to
try to deal with that issue. One is our Business and Industry
Loan program. We are now allowing for investments in those
communities, if we can show that there is a direct benefit to
smaller rural areas, so we provided some flexibility in that
program.
Second, we are working now looking at our portfolio to see
if there is ways in which our water and loan portfolio we could
use this as flexibly as possible to attract additional private-
sector investment in communities that often don't get
attention.
Mr. Costa. All right, quickly. California was $54 billion
last year at the farmgate, the dynamic, diverse, 300
commodities in our agricultural industry. We farmers obviously
are proud of that fact, and a lot of people don't realize that
of all of those 300 commodities, dairy is the number one
effort. I want to thank you and the USDA's efforts to assist
California in the last farm bill. We gave the opportunity and
California dairymen voted by \2/3\ to join the Federal
Marketing Order. Can you update us on the current status on
that effort?
Secretary Vilsack. Information is being produced to make
sure the transcript is accurate. That will then allow the
parties to essentially brief it. A decision will be made, and
assuming the decision is to move forward, the referendum will
take place shortly thereafter.
Mr. Costa. I appreciate that. The dairy industry, as you
know, is cyclical and right now we are in a downturn with $12
per hundredweight milk prices and $14-$16 per hundredweight
input costs, and it is very tough.
Let me finally ask you, because out of that agricultural
production, a lot of it in California is exported. It is $20.4
billion last year. The negotiations on the economic analysis on
a sector-by-sector benefit to American agriculture. Can we
expect these analyses to be completed prior to the finalization
before we vote on the TPP, these trade agreements?
Secretary Vilsack. I believe they will be, and there are
already analyses available, whether it is the Peterson
Institute or the recent Farm Bureau evaluation which was
announced yesterday.
Mr. Costa. We are going to need that information, Mr.
Chairman, and as we make our own evaluations on whether or not
we are going to vote for that measure at the end of this year.
And we appreciate that information, Mr. Secretary. Thank you.
The Chairman. The gentleman's time has expired.
Mr. King, for 5 minutes.
Mr. King. Thank you, Mr. Chairman. I thank you, Mr.
Secretary, for your testimony and your responses to the
questions here. I am not going to add anything about cotton,
just to lead this, and but I would like to go just to a number
of things, and as a very, very large percentage of the avian
influenza that hit this country was not only Iowa, but was my
district specifically. It was something like 74 percent of the
State of Iowa that was hit was in my district, and somewhere in
the 60s overall for a while, at least, was a national measure
of the layer loss that we had.
I want to say that I believe that the way the USDA has
handled the turkey loss in AI has been, generally speaking, the
strategy for it has been adequate, and the things that we have
learned from that will make us better, going forward. But I
believe the disposal, for example, of turkeys and the
composting in the building APHIS manages it and handles it
well. We add to that the things that we learned, we are perhaps
prepared for another disaster of that nature.
However, with regard to the layers, I wanted to ask you
about if you have made any changes in your strategy of disposal
of layers where we may have as many as five million birds on a
location that need to be disposed of very, very quickly. That
seemed to be the biggest problem that cropped up in this huge
loss that we had. Have you made any adjustments there in
policy?
Secretary Vilsack. I would say we have, because we want to
do it within a 24 hour period of time, so we are trying to
speed up the process, and then second, we want to pre-position
assets in terms of knowing whether landfills are available or
other disposal methods on the farm, which we have been able to
use in states where we think there is a potential for this to
reemerge. So we are better prepared today than we were,
obviously, when this hit last year.
Mr. King. Thank you. I just wanted to bring that up for the
sake of us having a focus on that component, which was the most
difficult, I believe, of all that we faced.
The formula on the indemnity payments has been brought to
my attention multiple times by layers that the data that has
been used on that by APHIS is older data, back as far as 2010
and 2011, from the BEA. And so has that been brought to your
attention in the past, and have you taken any steps or
considered bringing that up to modern data and readjusting your
formulas for our layers on indemnity?
Secretary Vilsack. Congressman, we have made changes to
that indemnification process, and we will always be open to
additional, more current data to make sure we are doing the
right thing.
I would caution that we want to make sure that it continues
to be an indemnity effort as opposed to an insurance effort. I
think if it is to be an insurance effort, that is something
that you all have to decide when you craft the next farm bill.
Mr. King. I would say putting together insurance on this is
a very difficult proposition. We have looked at that as a means
of representing my constituents, and if somebody can present a
good formula for that, I am very interested. It didn't go as
smoothly as I had thought it might, or hoped it might, I should
say.
But then have you changed the formula? Because one of the
things they are asking is that if you move from the 2002 to
2001 formula to up just 1 year even to the 2003 to 2012
formula, it would change that gross margin deduction from an 85
percent margin down to an 80.5 percent margin. That would be a
significant difference to our producers, just to move up 1
year. Is that something that you have done or considered?
Secretary Vilsack. Changes have been made, Congressman, and
I will get you the specifics on exactly how, but we made an
effort to try and listen and adjust based on the information
that was being provided to us by the industry.
Mr. King. And I will provide you a fuller set of questions
here, too, that will be helpful in responding to that, and I
appreciate that.
It is my sense that we have a pretty good handle on PEDv.
Is that also your sense?
Secretary Vilsack. I am sorry, on what?
Mr. King. A pretty good handle on PEDv virus?
Secretary Vilsack. Yes, although, with these things they
can crop up at any point in time.
Mr. King. That is exactly what I hoped to hear, that our
attention is on that so that we remain prepared. I think we
have done a reasonable job of reacting to it and overcoming
that challenge.
Then also I wanted to point out to you and to this record
that we have contract growers, they are turkey producers, that
still remains a collections of claims against one of the
contractors that did some of the recovery work in my district,
and I don't know how broad this goes, and so as some of these
claims get put into place where there is either a claim with
APHIS or the contractor, and that is not definitive sometimes
on who has the responsibility for that. And I wanted to bring
this to your attention, because I believe a list is coming to
me very soon that aggregates these claims. I don't think it is
a huge situation, but it is huge to the people that are
affected by it, and I would ask for your cooperation on that,
and perhaps collaboration, if we could get that resolved and
close the books on the avian influenza in my district.
Secretary Vilsack. Get us the list, Congressman. We will
work with you.
Mr. King. I will do that, and I thank you for your
testimony. I thank the Chairman, and I yield back the balance
of my time.
The Chairman. The gentleman's time has expired.
Mr. McGovern, for 5 minutes.
Mr. McGovern. Thank you, Mr. Chairman, and Secretary
Vilsack, this being the last year of your term, I want to take
this opportunity to thank you for your incredible service. In
particular, I want to thank you for the recent announcement
that you and the White House made that would expand the summer
feeding program, to get more kids into the summer feeding
program, and I am grateful for that. But more importantly, lots
of poor children and their families are grateful for that.
And we are talking about the rural economy here today, and
while the overall economy is getting better, there are a lot of
families still struggling, and in rural areas that SNAP is
still a big issue. We have had many, many, many, many, many
hearings on SNAP in this Committee, but one of the issues that
has come up in the hearings on SNAP is the need to better
connect veterans with nutritious foods. And we know veterans,
especially older veterans, suffer from a range of nutrition
related health conditions, such as diabetes, high blood
pressure, and heart disease, and these are conditions that can
be treated, if you will, by increasing consumption of fruits
and vegetables.
So I would love to work on better connecting veterans with
farmers' markets, perhaps through an incentive program where
veterans receive vouchers at VA clinics to use for farmers'
markets, or why not hold farmers' markets at VA clinics? And
there are a lot of straightforward, simple steps that we can
take to better connect the dots, and I hope that we can work
with you and your Department on that.
But second, and as I mentioned, we have had many hearings.
I think we have had 11 eleven hearings on SNAP in this
Committee, and I am not quite sure where they are all leading
to, but something is up. And we have heard talk about block
grants, we have heard talk about more onerous work
requirements, but most recently, a leading Republican
introduced a bill that would let states drug test the poor as a
condition to receiving SNAP. Similar laws in Florida and
Georgia have been struck down as unconstitutional, and there is
a growing body of evidence that shows that states with narrower
drug testing laws in the books are spending thousands of
dollars to identify very few drug users. In fact, those
receiving public assistance actually test positive for illicit
drugs at a lower rate than the general population. It is
interesting note that there is no requirement that corporate
CEOs who receive government grants or subsidies be tested.
There is no requirement that Members of Congress be tested.
Maybe there should be a requirement that Members of Congress be
tested. Maybe that might explain why we are doing some of the
things that we are doing around here. But I am concerned that
this bill is nothing more than another attempt to demonize poor
people and has no basis in reality, and I am not sure how
quickly we are going to see this, but I figure that we have
this opportunity here today. I would like to ask you to comment
on this bill and receive your advice and guidance as we move
forward.
Secretary Vilsack. Congressman, first of all, on the
veterans issue I would encourage you to take a look at the
Farmers' Market Promotion Grant Program and the Food Nutrition
Incentive Program that were established under the 2014 Farm
Bill as potential avenues today to finance what is a pretty
good idea, and the idea of having farmers' markets at VA
clinics is an interesting one, and I will take that back to our
team.
As I indicated to the Congressman Aderholt, when he
proposed this in our Appropriations hearing, this is not
something that will significantly impact and affect the help
and assistance that folks who are addicted need. It will also
be quite damaging to the children of family members who might
be negatively impacted by this. I am not sure what the problem
is and I am not sure that it solves any problem, but it does
indeed create a stigma and it could, as you indicated, create a
slippery slope in terms of precisely how many programs we are
going to bring within this umbrella.
A more effective way of dealing with this issue, from my
perspective, is taking a look at expanding prevention and
education, expanding first responders' ability to respond to
overdose situations so that lives can be saved, providing more
medical assistance, treatment opportunities, and particularly,
specifically expanding access to services in rural areas.
Seventy-six percent of the shortage areas for behavioral
science and substance abuse and mental illness treatment exist
in rural areas. It is an area that requires attention and
requires resources, and also calling upon the entire community,
including the faith-based community, to help us create an
atmosphere and an attitude in rural areas where people can feel
free to acknowledge they have challenges and a problem, and to
be able to get help and assistance and support through AA and
Narcotics Anonymous and so forth. These are things I think
would be more beneficial if we are really interested in trying
to help these people.
Mr. McGovern. Let me just say thank you for heading up the
President's efforts to deal with the opiate and substance abuse
crisis that is going on in this country. We are all grateful
for your leadership in that as well.
I yield back.
The Chairman. The gentleman's time has expired.
Mr. Austin Scott, 5 minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman.
Secretary Vilsack, thank you for meeting with the Georgia
delegation yesterday, and prior to that meeting, I was with
another man who was in a similar position who is now retired,
and he said that any time he wanted to submit something to the
Committee with a statement, that it had to go up the chain and
be approved by the Administration. Have you experienced that
same system, if you will, with the Administration, that if you
are going to present something to the Committee that it has to
be approved by people outside of your office?
Secretary Vilsack. You mean the responses I am giving
today?
Mr. Austin Scott of Georgia. Yes, sir.
Secretary Vilsack. No.
Mr. Austin Scott of Georgia. Thank you for that.
As respectfully as I can say it, I have serious concerns
about some of the statements in what you have said. Today, the
state of the agricultural economy remains sound, despite lower
commodity prices. Those are, to me, very much inconsistent. The
Administration's focus on economic recovery over the past 7
years has helped the majority of farm households improve their
financial condition, and we expect that to continue as farm
income faces increased pressure from lower commodity prices.
And as we faced increased pressure from lower commodity prices,
that certainly hurts our financial condition, doesn't it? It
seems that if we want to expand the summer feeding program, and
I am not familiar with the details of that, but I do know that
many of our kids, when school is out, they don't have food. And
if that is consistent with your authority, then we should take
care of the kids. My church does that. We have backpacks for
kids. The teachers put it together, the principals put it
together at the end of the school year because we are concerned
about our kids not having food when they go home.
And then we have an issue like cotton, which is so
important to the area that I represent, and it seems to me in
reading the things that you do have the flexibility to do what
we have been asking for with regard to cottonseed, and it just
seems consistent with the Administration that if it is
something that they want or if it is some of their supporters,
they will bend over backwards to make it happen. Cotton is a
red state product, and our farmers, when we have a profit, the
government takes 50 percent of it. When we die, the government
takes 50 percent of our land. Now we are asking for a little
bit of help just to get through some tough times. I would just
appreciate if you would use the same flexibility to support our
cotton farmers as is being used to do the other things, like
expanding the summer feeding program.
Secretary Vilsack. I have statutory authority to expand the
summer feeding program. It is a mandatory program. I have that
authority. The authority I don't have is the EBT program, which
we are asking this budget to have authority to do. So we are
asking Congress for permission to expand, but we are not
expanding in that vein because we don't have permission to do
it. That is the issue.
Mr. Austin Scott of Georgia. How are lower commodity prices
good for the farm economy?
Secretary Vilsack. Well----
Mr. Austin Scott of Georgia. That is what your statement
says.
Secretary Vilsack. No, that is not what we are saying,
Congressman. That is a misstatement of what we are saying and a
mischaracterization of what we are saying. I think what we are
saying is that we wanted to make sure that people do not feel
that we are in the same circumstances that we were in the
1980s, because we are not.
Mr. Austin Scott of Georgia. Mr. Secretary----
Secretary Vilsack. And we are not, because there is a
stronger safety net. We are not because the debt to equity
ratio is much stronger, much more stable. We are not because of
the level of bankruptcy filings. If you look at the data, it is
going to suggest to you that we are in a softened period, no
question. We want to increase demand. That is why trade
agreements are important.
Mr. Austin Scott of Georgia. Mr. Secretary, I am sorry. I
am down to 1 minute and I need to reclaim that time.
In 2016, you forecast additional increases in median
income, farm household income across all farm types, but at the
same time, we are fighting these commodity crises. And I want
to get to a specific with the USDA and EPA, and this is the
case whether USDA has very much done their job, and I
appreciate it.
Ms. McCarthy a couple of weeks ago, I asked her a question
about some of the chemicals that you have approved. You have
done your job. You have approved new biotech traits to give
farmers a leg up on weed resistance challenges. Have you spoken
with the counterparts at the EPA and asked them why they
haven't or when potentially they will? We start planting in a
couple of weeks.
Secretary Vilsack. We are in a situation where we have a
convoluted framework when it comes to biotechnology crops, if
that is what you are asking about, Congressman. I want to make
sure I am answering your question.
Mr. Austin Scott of Georgia. It is not the crop, it is the
chemicals that we use on it.
Secretary Vilsack. Oh, okay. We are in constant contact
with them, encouraging them and explaining the impact that
their decisions may or may not have on folks in the
countryside. Obviously, I don't run that agency so I can't
dictate to that agency, but I can certainly encourage them, and
we do.
Mr. Austin Scott of Georgia. I am out of time. If I could
make one final point? Secretary Vilsack, the people in the USDA
know when we plant cotton. Your people know about agriculture.
You know when we plant cotton. Ms. McCarthy had no idea when
cotton was planted. She doesn't know that we need these
products now, and so that is where we could use some help there
is getting the EPA to go ahead and approve the products that
you have already approved. We are starting to plant in a couple
of weeks.
Secretary Vilsack. They go through their process,
Congressman, and we will encourage them to speed up as best
they can.
The Chairman. The gentleman's time has expired.
Ms. DelBene?
Ms. DelBene. Thank you, Mr. Chairman.
Thank you, Mr. Secretary, for being with us today. I really
appreciate it. And I also want to thank you and your staff for
coming out to my district and meeting with so many of our
farmers. I just met with some of them earlier this week, and
they continue to comment about how much they appreciate you
coming out and talking with them.
As you know, I introduced a bill last Congress that was the
basis for the SNAP employment and training pilot programs that
were in the farm bill, and the end result was the $200 million
program that you have started. Washington State has had a
fantastic success with its E&T program, and it has helped
participants achieve self-sufficiency and part of the criteria
we wrote for awarding these programs was making sure that we
had folks like the programs that Washington State put in place
in mind.
I wondered if you could comment on the breadth of the
various proposals that are moving forward right now, and any
impacts you see on E&T, going forward.
Secretary Vilsack. It is a 3 year program and we are in the
process of ensuring prompt implementation. The ten pilot
projects basically are looking at different aspects. There are
some aspects that are looking at how additional assistance and
financial assistance might allow for transition into a job so
that you don't lose benefits. Some are looking at ways in which
those who face barriers, transportation barriers, for example,
could be assisted. Others are looking at ways in which folks
could be trained for the jobs that are actually existing in an
improved economy so that they can take advantage of those new
job opportunities. Some are taking a look at ways in which the
veterans can be assisted and helped. So it is a broad spectrum
here. We are trying to identify best practices so that those
best practices can then be implemented in all 50 states, so we
do a much better job of using the resources that are being
provided.
The sad reality today still is that states don't use all of
the 50/50 money in terms of the employment and training. They
are happy to use the 100 percent Federal money, but when it
goes to putting a little skin in the game, fewer states than we
would like are willing to do that.
Ms. DelBene. Do you know what we could do to incentivize
folks to do more there?
Secretary Vilsack. Well, you can say that it is a joint
responsibility, and it is in our best interest to put people to
work in jobs that matter, and it is in our best interest and
their best interest to try to get them to a point where they
don't need as much assistance, but states are dealing with
their budget challenges as well, and this is unfortunately not
as high a priority for some states as it ought to be, in our
view.
Ms. DelBene. Thank you.
Moving to a different subject, last year's fire season was
one of the worst in recent memory for the Pacific Northwest. We
have to end fire borrowing, and each time this happens, the
Forest Service ends up transferring many funds away that are
used to help maintain our forests. And you have been an
outspoken supporter of the Wildfire Disaster Funding Act, which
I and many other parties have cosponsored. We know how badly
this reform is needed, and so I just wondered from your
perspective, what do we need to do to get past this stalemate
and move forward?
Secretary Vilsack. Well, I don't intend to transfer the
monies. We spent 62 percent of our budget last year fighting
fires. This is a problem that everybody in Congress understands
needs to be fixed. It just needs to get done. And the reality
is by not getting it done, we are robbing opportunity. We are
reducing job opportunities. We are making it difficult for
mills to stay in existence. We are making it difficult for
people to enjoy the forests in the way in which all of us would
want them to enjoy. We have bailed them out. We bail folks out
year after year after year, so I have instructed the Forest
Service to do what they can to spend the money in the hopes
that Congress, you all have appropriated the right amount, but
if you haven't, you need to fix this problem. We are not a fire
department. We are the Forest Service.
Ms. DelBene. Well thank you. I agree with you. I think we
need to fix this problem soon. I appreciate your help in doing
that.
One last quick question. One issue that was brought up when
you visited my district was the lack of crop insurance for
aquaculture, and I know your staff recently met with one of the
Tribal chairmen from my district who asked that question, and I
just want to ask for your commitment to continue working with
us to ensure that this very critical and overlooked aspect of
our agriculture system is protected in the future.
Secretary Vilsack. We are and it is very consistent with
the fact that in this Administration, we have expanded the
number of crop insurance products or number of crops covered by
crop insurance, and we have also significantly improved the
reimbursement levels for some of our high value specialty
crops.
Ms. DelBene. Thank you.
I yield back, Mr. Chairman.
The Chairman. The gentlelady yields back.
Mr. Goodlatte, 5 minutes.
Mr. Goodlatte. Thank you, Mr. Chairman. Welcome, Mr.
Secretary.
I want to ask a question on behalf of my colleague, Mrs.
Lummis from Wyoming. In 2013, the GAO Trails Maintenance Report
confirmed that the U.S. Forest Service has over $314 million in
deferred trails maintenance. Do you believe that it is
important for Congress to weigh in on this framework that the
Forest Service is developing that will address National Forest
System trail concerns in a comprehensive manner?
Secretary Vilsack. Yes, but it is going to require
resources, which means you need to fix the fire budget.
Mr. Goodlatte. And could volunteers help improve trails in
a significant portion of the George Washington National Forest?
Secretary Vilsack. There were, in this Administration, over
600,000 volunteers have already been encouraged to participate
in those kinds of activities. We also have the 21 CSC program,
which a providing nearly 11,000 additional folks, including
returning veterans. The reality is that we could do a lot more
if we had stability and certainty in terms of our budget. We do
not have that because of the fire suppression costs. It has to
get fixed, Congressman. I don't know how many times I have to
say that it has to get fixed. Otherwise, you will be having
this conversation with the next Secretary, and the next
Secretary, and the next Secretary until there is no trail
maintenance costs because it is going to be eaten up by the
fire budget.
Mr. Goodlatte. Well, we certainly understand that, and we
could go deeper into that, too, in terms of the
Administration's policy with regards to harvesting timber,
because that is one of the best tools to avoid the kind of
catastrophic fires that we have been experiencing.
Secretary Vilsack. We have harvested 20 percent more timber
in this Administration than in previous Administrations, and we
would be able to do more if you fixed the fire budget.
Mr. Goodlatte. We encourage you to keep doing that, and do
it in a way that you can market that timber so that you can
raise some money to continue to harvest more and fix the
trails.
But we will take your advice to heart. We understand the
nature of that problem.
I want to talk to you about two other issues. One I know is
of importance to you and you are familiar with. We understand
that USDA's Biofuels Infrastructure Partnership will be
providing $100 million in grant funds for the installation of
biofuel blender pumps in 21 states. Considering that for the
last 10 years, consumers have already been forced to foot the
bill for the higher levels of ethanol blended into their
gasoline, is it fair to ask them to pay another $100 million in
order to prop up the ethanol industry?
Secretary Vilsack. Twenty-one states participate in this
program. They match the $100 million with $120 million in
commitments. We anticipate and expect over 5,000 additional
distribution sites being put in those 21 states, so there is a
lot of interest in this program.
Mr. Goodlatte. I know, but it is also not market forces
determining this. It is the government determining how this
money is going to be spent. I just mentioned that the ethanol
industry already benefits from a unique mandate which
essentially forces the American people to buy their product;
therefore, I fail to see any reason to actually increase the
amount of support this industry is given.
Secretary Vilsack. Well, 450,000 jobs that are directly or
indirectly affected by this industry, the fact that gas is less
expensive because of it, the fact that we have better----
Mr. Goodlatte. Mr. Secretary, I would challenge----
Secretary Vilsack. There are a multitude of benefits.
Mr. Goodlatte.--whether gas is less expensive because of
it. Gas is less expensive right now because of international
production of gas----
Secretary Vilsack. That is also part of it, Congressman.
You can't deny the fact that study after study shows that this
industry has indeed over time reduced the cost of gas to
consumers.
Mr. Goodlatte. Actually, no I don't agree with that,
because the----
Secretary Vilsack. University of California-Davis did a
study----
Mr. Goodlatte. Mr. Chairman, the time is mine. Let me just
say in response to that, Mr. Secretary, that the fact of the
matter is that there have been a number of occasions in the
past few years when because of the demand imposed by these
ethanol mandates on corn production has caused the price of
corn to spike, and because consumer driving habits have
changed, the amount of oil consumed for that purpose that has
dropped. The net effect has been that the industry has had to
buy RINs, had to buy credits in order to be able to stay in the
market. And those credits are, in fact, causing on some
occasions both the price of food and the price of fuel to go up
at the same time.
Secretary Vilsack. There is no correlation, Congressman, on
the food costs. That is just not accurate. And the reason it is
not accurate is because we have increased corn production, and
farmers get today, unfortunately, a fairly small amount of the
food dollar, about 18. There is no correlation between food
cost increases and ethanol. That is----
Mr. Goodlatte. I strongly disagree, but let me get one more
question in, if I may.
Farmers in my district have contacted me about letters they
have received from the NRCS which claim that the farmer
received ``improper payments from NRCS conservation programs.''
I understand that the situation arose after USDA discovered
discrepancies with farmers data universal numbering system,
DUNS number, and current registration in the System of Award
Management, SAM database. And I am told that this system has
been in place since 2011, but that the USDA has just recently
begun to verify if a farmer's DUNS number is correct, and SAM
registration is current. Will a producer really have to pay
back many years of conservation program payments?
Secretary Vilsack. We have created a number of waiver
programs and are working with producers who feel that this is
inaccurate or unfair, and we have, on two different tranches,
have millions of dollars of assistance has been provided,
Congressman. So there is a waiver process. There is a process
for the farmer to raise questions about the fairness of this,
and if it is unfair, we won't do it.
Mr. Goodlatte. Thank you. I am glad to hear that. We agree
on that.
Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired.
Ms. Kuster, 5 minutes.
Ms. Kuster. Thank you, Mr. Chairman, and thank you,
Secretary Vilsack, for being with us. I want to also commend
you on your leadership on the heroin crisis, and just remind my
colleagues that we have a co-chaired bipartisan task force to
combat the heroin epidemic in particularly rural economies. My
State of New Hampshire has been hit very hard. We have a number
of bills that we are going to be recommending, and I would love
to be able to run that by you and your staff, and engage with
you as we go forward.
A couple of quick questions. One that I hear often in New
Hampshire, as I go around visiting my farmers and holding
roundtables, is about the Margin Protection Program, and the
particular issue for us, we are sort of at the end of the
pipeline, if you will. This happens to us in energy and it is
happening to us in the cost of feed so that the equation
between the price for milk and the cost of feed, we are being
squeezed very, very hard in New England and in New Hampshire in
particular. I am just wondering if you have any comment on
that, and how this program is going generally. I understand 50
percent of dairy farmers are participating. Do you have any
feedback on how it is going?
Secretary Vilsack. A small number of farmers received
payments last year. Depending upon what happens, the farmers
with $8 and $7 protection may see some payments this year, it
is expected. I think there is a need, as Congress considers the
new farm bill, to discuss the current state, which does not
give us the flexibility and the ability to regionalize those
feed costs. I think under the circumstances as we listen to
folks, that is something that should be addressed in the next
farm bill, or if there is an opportunity to address it before,
fair enough. But it is not something we can do from a
regulatory perspective, but it is something that I think is a
fair concern. There are significant differences in feed costs,
and that needs to be factored into the program in order for it
to work.
And you are correct, roughly 50 percent of producers are
participating, and of that 50 percent, about 55 percent
purchased higher coverage, the $6, $7, $8 coverage.
Ms. Kuster. Great, so I will follow up with colleagues
about that regional difference on the feed costs.
The other role that I have as co-chair of the Congressional
Biomass Caucus, and we did have the EPA Administrator in here,
and I had the chance to ask her about considering biomass as a
renewable fuel, and what that means for our rural communities
and timber interests, et cetera. Could you comment on any
additional members as I know USDA has been a strong supporter.
I really appreciate that. Anything else that you might add
about biomass and the future for the biomass industry in our
rural communities?
Secretary Vilsack. Well, biomass studies have been
conducted by the Department of Energy showing that there is a
significant amount of opportunity here, a billion tons, is the
most recent estimate. And we are looking at ways through our
biomass centers, which are research centers throughout the
entire country, to look for ways in which we could create the
appropriate supply chain for each region of the country,
whatever their specific biomass opportunity is, that they can
access it and utilize it.
We are also investing in resources through the section 9005
program, which is advanced biofuel production, providing
assistance to about 320 companies to produce biofuel from
biomass, and we are also continuing to look for opportunities
to invest in our loan guarantee program, section 9003, in a
variety of different feedstocks so that we have a broad range.
The last thing I would say is, there is tremendous
opportunity for the Defense Department in terms of biofuel. The
Navy wants to have \1/2\ of their fuel basically being biobased
and domestically produced. I was privileged enough to be on a
destroyer, watching it being refueled with beef tallow fuel out
in the Pacific Theater just a couple of weeks ago, so there are
terrific opportunities.
The last thing is commercial aviation is also extremely
interested in this fuel, and there are roughly 40 airports that
sell 90 percent of the jet fuel, and they are extremely
interested in doing this because of the emissions, and the
benefit from the emissions to meet international standards.
That is a 17 to 19 billion gallon market opportunity for us.
Ms. Kuster. That is great.
Secretary Vilsack. So there are plenty of opportunities.
Ms. Kuster. Wonderful, and one last quick question, and a
quick plug for your rural development program. It has been
fantastic in higher education, community colleges, affordable
housing, homeless veterans. We are using it every chance we
get, and a shout out to Ted Brady in your operation who covers
Vermont and New Hampshire, doing a fantastic job.
I wanted to ask you about the affordable housing in rural
communities. We have legislation. We are working with your
staff, but I just want my colleagues essentially to know about
a bill. There is a program that is coming to an end, and we ran
into a situation of folks who were going to lose their
affordable housing, and we are working with you. We do need
legislation, going forward, and I will stay in touch with you
and stay in touch with my colleagues to make sure that rural
communities continue to have access to affordable housing.
Secretary Vilsack. It is multi-housing and part of that
problem has been solved by the budget process, but the other
part is that as multi-family housing that has received
assistance from USDA has their loans paid off----
Ms. Kuster. Yes.
Secretary Vilsack.--those units basically will go out of
the system, and we expect and anticipate 75 percent of those
units could potentially be out of the system in the next 10 to
15 years----
Ms. Kuster. That is my fear.
Secretary Vilsack.--beginning in the very near future. So
it is an issue----
Ms. Kuster. We need to change the incentives to try to keep
people in that program.
Secretary Vilsack. Create a voucher system.
Ms. Kuster. Thank you very much, Mr. Chairman.
The Chairman. The gentlelady's time has expired.
Mr. Crawford, for 5 minutes.
Mr. Crawford. Thank you, Mr. Chairman.
Mr. Secretary, as you know, China is forecast to hold over
60 million bales of cotton in reserves in 2016, six times the
level they held before implementing their reserve program 5
years ago. Despite their reckless actions, India's own minimum
support price has now resulted in India overtaking China as the
world's largest cotton producer. And if that weren't bad
enough, Turkey has seemingly concluded their purely retaliatory
anti-dumping case against the U.S. that clearly violates the
WTO procedure. All of this leading to the lowest cotton
plantings in the United States in 108 years, with the exception
of 1 year in the 1980s. and if that wasn't bad enough, add
insult to injury, China is now dealing with their huge
stockpile by shrinking their imports from 24\1/2\ million bales
in 2011 to an estimated 5 million bales in 2016. That is an 80
percent drop.
Yet in February, on February 11, in an appearance before
the Appropriations Committee, you said you were refusing to
help cotton growers because you don't want to ``create
difficulties for the industry relative to trade.'' I find that
statement to be outrageous. Do you share our concerns that your
refusal to act threatens U.S. cotton production and the very
trade you say you are trying to protect?
Secretary Vilsack. Congressman, that refers to the fact
that Brazil brought a WTO case against us based on our cotton
program as it existed before. They are very, very skeptical of
anything we do in this space, so you have to be careful that
you don't encourage Brazil to yet file another case. Their
case, which they won, exposed us to potentially $800 to $900
million of retaliation against crops throughout the entire
agricultural sector so yes, I am concerned about that, and I
should be. That is part of my job.
Mr. Crawford. In your view, do China's and India's----
Secretary Vilsack. That is not to suggest that I am not
sympathetic with you in terms of your concerns about China.
They are legitimate, and India.
Mr. Crawford. Do you think China and India's actions with
respect to cotton violate their commitments in the WTO, and if
so, what is USDA and USTR doing about it?
Secretary Vilsack. Well, I think that the Trade
Representative's office is very acutely aware of this. It has
expressed concerns to both India and China, and the fact that
they are, potentially, they are already bringing cases in a
number of areas indicates a willingness to take these folks on.
There is a limitation in terms of the number of cases that
they can handle from a staffing perspective, and we are
certainly going to continue to encourage them to put pressure,
and will continue to put pressure on China. They are very
difficult to deal with in a lot of areas, not just cotton.
Mr. Crawford. Understood. Perhaps your Department could use
further counsel on trade issues, given your comments to the
appropriators. In fact, the lack of a top trade advisor in the
Department was contemplated by this Committee in the farm bill.
That is why we authorized your Department the appointment of an
under secretary of trade. Why haven't you appointed one yet?
Secretary Vilsack. Congress has requested on two separate
occasions that we study the issue, which we are in the process
of following the Congressionally mandated direction.
Mr. Crawford. Okay, let me switch gears. My colleague, Mr.
Goodlatte, referenced the DUNS and SAM issue, and I appreciate
your response to that. I would like to go a little further and
say that the loss of payments on those contracts has created a
huge cash flow problem for many of the farmers across the
country, and some of them are in trouble with their lenders.
Can we get your assurances today in writing so that they can
provide the affected farmers and their lenders with some piece
of mind on that issue?
Secretary Vilsack. Congressman, over $24 million has been
funneled through this waiver process, and that is the process
that we are using to make sure that we are doing this properly.
Mr. Crawford. I understand that, but in the interim, you
have lenders that are starting to having to carry their
farmers. We have farmers that are trying to make payments and
they are $80,000 short because they haven't been paid. Is there
something, even a piece of paper, that you could provide those
farmers that they could go to their bankers and say we are
good?
Secretary Vilsack. Congressman, if you give me the names of
those farmers, I will be happy to take a look and make sure
that whatever we are doing does not jeopardize a situation for
an unreasonable----
Mr. Crawford. I would be happy to give you the names of
those farmers, and a written response from you would, I am
sure, allay their concerns.
With that, I yield back.
The Chairman. The gentleman yields back.
Mr. Walz, 5 minutes.
Mr. Walz. Thank you, Mr. Chairman, and Mr. Secretary, thank
you for being here. More importantly, thank you for being a
strong voice in rural America, and I understand my colleague,
Mr. King, already addressed the issue of avian flu, but it is
important to pass on to you how appreciative we are in the
response last year, catastrophic, economically, and
psychologically to our communities out there, and your
willingness to get on the front-end, we have a lot of people
feeling more confident that come spring, should we experience
it again, we are ready. So I am grateful for that.
I want to go back to an issue that is near and dear to my
heart, and a little contrast to my colleague from Virginia, is
biofuels. We are very proud of the industry. You created
markets for our growers out there. You created homegrown,
American fuel. You have created jobs where someone can go from
Preston High School to get a degree at the University of
Minnesota in engineering and chemistry, and come back home and
work and produce fuel jobs in those communities.
I understand that if the desire to seek clearer burning
fuels isn't a priority, based on the science. You may ignore
that, but the fact of the matter is, the vast majority of us do
see that as a need. When I go down there and I see these
plants, I see the jobs there, I see the trucks coming in with
the market for the local producers. One thing I don't see is a
U.S. Naval carrier battle group protecting the shipping lanes
down there like we see when we import oil, and we need to have
an honest conversation. The facts that you were giving were
correct on the reduction of the import of foreign oil,
reduction in carbon emissions, the number of jobs being
created. And the fact of the matter is access barriers to the
market have been created with artificial blend walls and the
inability for people to make a choice at the pump. If I want to
turn it to E15 and I want to use that, we can get there.
So I would like you to use the remainder of my time,
Secretary, because you have proven this not just in rhetoric,
but you have created jobs out there by your leadership in this.
What is your vision and what is the state of the biofuels
industry now, and where do you see us in 10 years down the
road, assuming we can give the certainty that every market
should expect from us, and biofuel is no different?
Secretary Vilsack. Congressman, the ability to maintain a
strong and vibrant rural economy is dependent on our capacity
to diversify and to create new opportunities to complement
production of agriculture and exports, which has been the
traditional way of supporting rural America.
In my lifetime, agricultural production has increased by
170 percent, even though the inputs have been relatively
stable. That is producing 170 percent more on 26 percent less
land, with 22 million fewer farmers. The challenge that we have
in rural areas is that as we were getting fewer and fewer
farmers and becoming more efficient with production of
agriculture, we didn't overlay that with a complimentary
economy that would allow folks to live, work, and raise their
families in small communities. We are now doing that, and part
of that is the bioeconomy, and what you have mentioned is the
biofuel piece of this. There is also the bioenergy piece of it
where we are seeing people converting biomass into energy. We
are seeing dairy producers creating digesters that are
producing methane and converting it into power. We are
beginning to see chemicals and materials being produced, and we
are beginning to see manufacturing come back in small towns.
You complement that with a local and regional food system and a
creative use of conservation, and you have more stimulation
going on in your economy.
The biofuel industry has been helpful, not just in the
Midwest now, it is now expanding to the Northwest. There is
very great interest in the commercial aviation piece of this.
As I mentioned earlier, it is happening in the South with woody
biomass and with perennial grasses. It is even beginning to
percolate a little bit in Texas and Oklahoma. I am surprised
that Texas was one of the aggressive users of this biofuel
blender pump program. In fact, they might have been the largest
recipient in terms of dollars.
So it is something people like. It is something people
want. It is helping to create jobs. It is, in fact, reducing
the cost of gas over time. It is reducing emissions. During the
last 15 years, it has taken 124 million car-equivalent
emissions off the road that otherwise would have been on the
road. It is reducing our trade deficit. It is helping to reduce
our reliance on foreign oil. By no means the only reason we are
reducing it, but it is part of the reason. And it is helping to
diversify the economy. It is creating the jobs that so many
producers today, if you look at the way in which farm income is
generated, part of it is generated from the farm and a good
part of it is also generated from off-farm income. And so many
families have a spouse or the farmer themselves who are
employed, and the result is that is why the median family farm
household income is high, even though our farm income has come
down. And you have to kind of look at the data, that it is
beginning to work and we want to make sure we continue to
expand those opportunities.
Mr. Walz. Thank you for that, and we appreciate it. I yield
back.
The Chairman. The gentleman's time has expired.
Mr. DesJarlais, for 5 minutes.
Mr. DesJarlais. Thank you. Thank you, Mr. Secretary, for
appearing before us so often.
I wanted to acknowledge that one of our great leaders in
Tennessee Farm Bureau, Lacy Upchurch, is retired. I know you
had a lot of respect for Lacy, and we are happy to welcome the
new President of the Tennessee Farm Bureau, Jeff Aiken, to
Washington. I had the opportunity to visit with him earlier
this morning, and he and I share a similar concern. We know
that the USDA website has a mission statement of help rural
America thrive, but we both share the concern in the
President's new budget. After the ag community essentially in
an attempt to do their part in cutting spending, Washington
gave up direct payments, is now seeing the President propose a
20 percent cut to crop insurance. How do you feel about the
President's proposal, and have you spoken with him about it?
Secretary Vilsack. Well part of the proposal is focused on
prevented planting concerns that have been raised by both
Government Accountability Office, who is your Congressional--
and by our own Inspector General. And so it is appropriate and
necessary for us to be responsive to the concerns that are
raised by these oversight and accountability organizations when
they raise concerns about how that program is being run, and
the cost to taxpayers.
The second area has to do with price harvest loss issues
and the amount of subsidy for that. It is currently at 62
percent. The President suggested that perhaps it would be
appropriate at 50 percent, a fair deal to taxpayers, farmers,
and insurance, and all of this is in the context of a very
constrained budget. The budget I am working with today, from an
operating standpoint, is less that it was the first full year
the President submitted a budget. When you place artificial
restrictions and caps on budgets, you have to make choices. So
if it is not in that space, is it in the conservation space you
want me to make that choice? Is it in the farm loan space you
want me to make that choice? Is it in the rural development job
creation space you want me to make that choice? Is it in the
food safety place you want me to make that choice? It is
ultimately about these choices, and they are not easy. They are
very difficult, and you all understand that because you have to
make choices throughout the entire budget, and you have to
prioritize. Obviously, everyone has a different set of
priorities, and that is what makes this process interesting to
watch. And you all will speak, you will create a budget, and
the next Secretary will live with that budget.
But the reality is, it is less than it was, but yet I can
show you that we are doing record amounts of work on virtually
every mission area.
Mr. DesJarlais. Shifting to the Waters of the U.S. for a
minute. We know that 31 states and organizations have filed a
lawsuit against the rule. Associations who represent rural
America, like the Farm Bureau, National Cattleman's, National
Corn Growers, National Pork Producers, U.S. Poultry and Egg
Association, just to name a few, basically organizations that
share the USDA's mission of helping rural America thrive are
all calling for the Administration to scrap this rule, start
over, and develop a rule with meaningful input from state and
local stakeholders.
What input did the USDA have on this rule or provide on the
rule?
Secretary Vilsack. We have an advisory process in which we
advise EPA on our view of the impact and effect of what they
are considering. Obviously, we don't dictate what a sister
agency does. And obviously, courts are going to decide based on
the injunction that currently is in place. What is going to
happen with that rule.
Mr. DesJarlais. Are you supportive of EPA's rule in its
current form?
Secretary Vilsack. I would say this. I think there is a lot
of misunderstanding about what the rule is and what the rule
isn't, which is why I encouraged the Administrator to get out
and encouraged her teams to get out and visit with farmers and
have farmers be able to see what it covers and what it doesn't
cover.
Mr. DesJarlais. And she was here in this Committee, as you
probably know, just a week or 2 ago. Gina McCarthy, is that who
you are referring to?
Secretary Vilsack. I am sorry, what?
Mr. DesJarlais. Were you referring to Gina McCarthy getting
out?
Secretary Vilsack. Yes.
Mr. DesJarlais. Okay.
Secretary Vilsack. And her teams to basically create a
situation in which farmers could bring information about their
individual operations to EPA personnel so that they could say
this is in, this is out, because there is some confusion. It is
a very difficult circumstance and I understand that farmers are
very, very concerned. And if there was more communication,
there might be a little less concern.
Mr. DesJarlais. Okay. Well, it is pretty clear that they
have spoken, the 31 lawsuits, all the organizations that have
brought this forward. It is not very clear. Just the definition
of a ditch could take an hour to go through. So I mean, it is
not clear and you have the President's ear on this, and we
would hope that representing the ag community, you would be on
the side of all the stakeholders who have spoken so loudly to
have this rule scrapped, and let's start over because it was
not done in a proper fashion through the rulemaking process.
I thank you for your time.
The Chairman. The gentleman's time has expired.
Ms. Lujan Grisham, 5 minutes.
Ms. Lujan Grisham. Thank you, Mr. Chairman, and Mr.
Secretary, it is nice to have you before the Committee again. I
appreciate, as always, your efforts for rural economic
development investments, and given the nature of my state and
our current economic condition, which is severe, and I
appreciate all those investments and all that you are doing.
But I really want to talk about what more we could do,
given the fact that nine counties out of the 33 counties in my
state have above 20 percent poverty, and that poverty rate has
been persistent over a 30 year period. Given that, recognizing
that we have those issues and conditions around the country, in
2009, we wanted ten percent of those rural economic development
investments to go to these areas of persistent poverty. That
expired in 2013. So I am interested really in two things. Did
that mandate or set aside, how do we want to identify that, did
that have an impact, and if it did, do we need to maybe do that
again? And if it didn't, what things do you think and do you
recommend that we could be doing, because in spite of those
economic development efforts, New Mexico and others are still
really lagging behind. I want to work with every stakeholder
and every policymaker to make sure that New Mexico gets what it
needs to end this persistent poverty in our rural and frontier
areas.
Secretary Vilsack. Congresswoman, what we measure, we do.
What we create as goals, we strive to accomplish. The goal of
ten percent, we actually at USDA decided that that was not
ambitious enough. We looked at 20 percent initially of
resources being spent in those counties that have been dealing
with persistent poverty. I can tell you that as of last year,
22 percent of our resources were invested in those counties,
and now we are focused on potentially moving that up.
We also have created StrikeForce, which ensures that we
have a coordinated effort within USDA to make sure that we are
working with community building organizations to identify the
current needs as it is as seen at the local level, not based on
what we think is appropriate. And as a result of StrikeForce in
over 900 counties, $23.6 billion has been invested in 190,000
different investments, everything from single family housing
loans to conservation efforts, farm loans.
We then extended that effort through the Rural Council the
President set up, the first ever, and now we are focused not
just on creating economic opportunity, but also trying to
mitigate the impacts of poverty through our Rural Child Poverty
Initiative. We are taking a look at best practices in terms of
a two generation approach. We just had a conference with the
National Association of Counties officers and officials, NACo,
and we have challenged 100 counties to work with us to create
programs and strategic plans----
Ms. Lujan Grisham. Great, and the hard part is, and I don't
disagree with any of your statements about the StrikeForce,
about meeting and exceeding your goals, but looking at the
outcomes just in my backyard, they are not there. And we have
been cost shifting as a state to the counties who I think I
have convinced in my state to declare behavioral health
emergencies in their local areas to see if we can't trigger a
larger public health emergency in the state, because I haven't
gotten any Federal support to deal with that, and the state
support is gone. We are the only state in the country, which is
not your issue, per se, at all, that doesn't have a behavioral
health infrastructure anymore. It is completely gone. So do you
see a way to take this StrikeForce idea and to leverage that
with other Federal investments, given your relationship and
expertise in rural economic development?
Secretary Vilsack. That is what we are doing with the Rural
Council. We have telemedicine cooperatives with HHS. We have a
Veterans' Blue Button Initiative with the Veterans Affairs. But
I would say on the mental health behavioral service area, we do
fund mental health clinics through USDA through the Community
Facility Grant Loan Program, and in fact, we funded $23 million
worth of those in the last couple of years. So it may be
something we can work with you on.
Ms. Lujan Grisham. That sounds great. I will definitely,
and I have just a few seconds left, work with you on that, Mr.
Secretary, so thank you very much.
I also want to encourage you to, I hope, reach a favorable
decision to help New Mexico's dairy producers, given our dairy
loss related to the huge snowstorm that we had in early
January. The state declared an emergency and we have written to
you as a delegation, and we are hoping for a favorable reply as
soon as possible.
Secretary Vilsack. Your producers qualify for the disaster
assistance program, and the way in which that turned out, they
can actually qualify in either 2015 or 2016. Secretarial
designation isn't going to be providing the kind of help that
you all want, but there is an administrative process that you
all can go through in terms of building and equipment losses.
So we will be glad to work with you on that.
Ms. Lujan Grisham. Thank you, Mr. Secretary, and thank you,
Mr. Chairman. I yield back.
The Chairman. The gentlelady's time has expired.
Mr. Benishek, 5 minutes.
Mr. Benishek. Thank you, Mr. Chairman. Thank you, Mr.
Vilsack, for being here today.
I just want to touch on a few things. You have had a wide
variety of issues discussed here today, but I want to talk a
little bit about the Forest Service. Believe me, I agree with
you on the emergency fire spending. That is a problem we have
to fix. But I still question how sales within the forest are
conducted and done that could be done better. I spend a lot of
time in rural Michigan. We have three Federal forests, and I
talk to people who work in the forest all the time. I
understand that you could have better budgets. One of my
problems understanding it is that when you sell trees, you make
money, and yet there is no money in sales. That is the argument
I have heard before from the Forest Service.
But the people that actually do the harvesting, the
contractors, the loggers, they tell me that they can't get a
sale done because of the way the sales are let. I mean, there
is too big of a project. There is not enough smaller projects
so that the average logger in the area can actually do the
project, and a lot of the sales just don't get done for reasons
like that, not so much the lack of funds, but just the lack of
adequate planning of the sale. Can you comment about that, Mr.
Vilsack?
Secretary Vilsack. Well, we actually have increased sales
and our goal is higher this year than last year. Our goal was
higher last year than the year before, and we have been making
a steady increase in the number of board feet that are being
treated.
Mr. Benishek. One of my forests has seen that, but the
other two forests haven't.
Maybe it is a local person, I don't understand why, for
example, like I told you, they are trying to sell a thousand
acre sale. Well, the guys that do these bids, they can't do a
thousand acre sale. They don't have that many guys to do it.
They can't comply with all the rules. Is there a way it could
be done so that the local loggers could actually bid on these
jobs?
Secretary Vilsack. We can work with you on this issue. I
would say that many of these contracts, you mentioned staffing
and you might not think that that is an issue, but it actually
is. There is staffing involved in all of these contracts. There
are analyses that have to be done, and the reality is we--
because of the fire budget, we have reduced the staffing of
that team, of that staff, in order----
Mr. Benishek. Oh, I understand that, and believe me, I
would be willing to work with you on----
Secretary Vilsack. Well that is the problem.
Mr. Benishek.--on fixing these silos of money so that you
can actually use the money that you get from a sale to actually
continue to do more work on that.
Secretary Vilsack. There is a 50 percent reduction in the
staff, Congressman, a 50 percent reduction in the staff.
Mr. Benishek. No, I agree that we need to fix the fire
issue. But what I am telling you is that this example that I
gave you of a bid being left that nobody in the area can
actually bid on. The way that they proposed that bid, the staff
didn't make it in a way that people that actually do the
logging in the area could bid on it. So that's not really not
having staff, that is the staff not doing it right.
Secretary Vilsack. That is why I say I would be happy to
work with you on that issue. I mean, that is a fair concern,
and if we are not structuring these in a way that fits the
terrain or fits the forest, then that is a problem on us and I
am happy to take that back.
Mr. Benishek. Well, I would really like to work with that,
because I hear that all the time, to tell you the truth. That
is the issue. Not the issue that they are not getting bids, but
the bids aren't working.
I just want to bring up one more thing. Does the Forest
Service have a line item, as I understand it, for land
acquisition? Isn't there a way that we could use that money a
little bit smarter than acquiring more land Secretary Vilsack?
Secretary Vilsack. To acquire more land?
Mr. Benishek. Yes.
Secretary Vilsack. Well, there are some folks who don't
want us to acquire a lot of land.
Mr. Benishek. I think we should manage the land you have
instead of acquiring more. Do you know what percentage of that
line item in the budget is actually being used?
Secretary Vilsack. It is a really small amount. It is a
really small amount in terms of the overall budget. It is a
very, very small amount, and oftentimes, the only time it is
used is basically in fills so that it makes sense----
Mr. Benishek. Yes, and I understand that kind of stuff, but
I would like a little more detail. Maybe your staff can provide
that for me, going forward, okay, in the next month or
something. Okay.
Secretary Vilsack. We will get you that.
Mr. Benishek. Thank you. I am out of time.
The Chairman. The gentleman yields back.
I now recognize Mr. Davis, for 5 minutes.
Mr. Davis. Thank you, Mr. Chairman. Mr. Secretary, great to
see you again. Thanks for being here.
This past November, the FDA published guidance on voluntary
labeling of products of biotechnology, and once again, affirmed
the government's position that there is no scientific
justification for government interest in mandating on package
labeling of products in biotech. The food industry has recently
announced the development of a voluntary smart label,
specifically designed to provide consumers with this
information. I assume the USDA is consistent with the FDA's
position in support of voluntary labeling?
Secretary Vilsack. Congressman, we are working with the
industry to try to resolve the dilemma that we are facing in
the very, very near future with the implementation of the
Vermont law. That is going to create chaotic circumstance and
situation, and it requires some kind of adjustment and some
kind of national approach to this so we don't have 50 different
state efforts and we don't have individual companies like
Campbell's making the decision that we are going to go ahead
and do what we want to do. We want some standardization of
this. So I don't want to be cute about this, but I think that
what the FDA has resolved is fine, but the reality is we are
confronted with this circumstance that could create real chaos
in the market. We need to get this thing fixed.
Mr. Davis. Well you answered both of my follow up
questions. I completely agree with you. I think we do need a
national standard, and I am willing to work with you and your
agency to help make that argument as we move forward, so thank
you on that.
Secretary Vilsack. Here is the biggest point that Congress
is going to have to decide. I don't think there is any question
that people can probably reach an agreement that there needs to
be some kind of time period between now and fill the blank, 2
years, 3 years, 5, whatever the time period is, in which the
industry will do the job of educating consumers about how they
can access information about what is in their food. A 1-800
number, a website, the smart label. At the end of that period,
what happens? If there is consumer understanding and
acceptance, you don't need to worry about what is on the
package. If there is not, what happens, and that is the issue
that ultimately has to be decided.
Mr. Davis. I agree with you, and I appreciate your
comments, Mr. Secretary.
I am going to move on to another subject. Last week, I
asked Administrator McCarthy about the progress that EPA is
making to establish the new ag related standing committee of
the Science Advisory Board, which as you know, was enacted as
part of the 2014 Farm Bill. Now the Administrator informed me
that as recently as 2 weeks ago, EPA met with the USDA to
finalize that standing committee. I just wanted to make sure
you were aware of the Administrator's commitment as the EPA
consults with you, and also members of this vital committee,
the ag community needs the USDA to weigh in with its expertise
and guidance, and I look forward to partnering with you to
finalize that process.
Now my last line of questioning is in regards to
pesticides. Federal laws dictate that the USDA serve as an
important advisor to the EPA in the regulation of pesticides.
Historically, your agency and their expertise and advice has
been evident in the actions the EPA has taken to evaluate
pesticides and their uses. USDA's perspective and knowledge of
production agriculture, truly, Mr. Secretary, is critical.
However, it is concerning to hear from the farm community,
because they express increasingly urgent concerns about EPA's
failure to meaningfully consider your expertise, advice, and
opinions, especially during the formal interagency review. Can
you give us a quick summary of how do you interact with the EPA
when we deal with issues such as the neonicotinoid seed
treatment on soybean production?
Secretary Vilsack. It is a situation where our technical
experts and their expertise communicate to EPA the concerns
with whatever EPA is proposing and suggesting, and basically
advising what we believe will be the impact and effect in the
countryside on what they are considering, and encouraging them,
if there is going to be a significant impact for them to
reassess their approach. It is advisory, obviously, it is not
dictating. It is advisory. So we have that constant
communication. Sometimes, depending upon the nature of the
issue, may elevate to the senior staff if there is a very
serious disagreement or a serious concern, and at times, it can
also elevate even higher. But it is a process of communication
at various levels.
Mr. Davis. Well specifically in regards to the recent
release that the EPA put out in regards of the benefits
analysis for seed treatments on soybeans, did that get elevated
to the senior staff level? Were there concerns at the USDA? Do
you feel your expertise was actually utilized in this release?
Secretary Vilsack. That is a difficult question for me to
answer. It is not something that was discussed with me, but it
may very well have elevated to the senior staff and been
resolved at the senior staff level. Or basically, sometimes we
have to agree to disagree.
Mr. Davis. Well, I am out of time. I yield back whatever
balance I don't have.
The Chairman. The gentleman yields back his time.
Mr. Allen, 5 minutes.
Mr. Allen. Thank you, Mr. Chairman, and thank you, Mr.
Secretary, for being here this morning. Thank you also for
meeting with our Georgia Members here, and in the Senate,
yesterday.
I just wanted to clarify one thing that Congressman Scott
had asked you about the cost-share program. For some reason
yesterday, and I wrote it in my notes, but we were talking
about $300 million yesterday, and you mentioned $150 million
today. Could you clarify what you think that program might
benefit?
Secretary Vilsack. I mentioned both figures yesterday, $300
million is the total cost we estimate of ginning costs.
Mr. Allen. Okay.
Secretary Vilsack. And $150 million would be the 50 percent
cost-share that had been discussed.
Mr. Allen. All right, good. Thanks for clarifying that.
Also, since our meeting yesterday, I met with dozens of our
colleagues both here on the Committee and also with our
colleagues over in Appropriations, and our industry leaders,
and the first thing that I would like to ask you is you
mentioned that the appropriators took away your broad authority
to provide assistance under section 32 of the CCC Charter Act.
When did they do that, and why did they do that?
Secretary Vilsack. They have been whittling away at that
for the last couple of years. I think there were concerns about
the way in which we were utilizing that authority to help
farmers and producers during difficult times for particular
segments and particular aspects of agriculture, so they have a
blanket restriction. The reality is that when you have a
blanket restriction, you have situations like this where there
is a need for flexibility and I don't have it.
And I would also say, Congressman, as I said earlier, it is
fine if they have concerns about me, but they have to
understand that this appropriations bill is more likely going
to be impacting the next Secretary, so they ought to at least
give the next Secretary the flexibility.
Mr. Allen. Exactly, and of course, that has been since
Fiscal Year 2012 that it has included a rider preventing you
from using that, and in talking to the appropriators, many of
them believe that it was because of a Senate race in Arkansas
and providing assistance there, is there any truth to that?
Secretary Vilsack. There were farmers who were suffering
significant problems in the State of Arkansas and in
surrounding areas, and this was an effort to try to provide
help and assistance at the request of those producers and at
the request of Members who represented them in Congress, which
is not different than what is happening today in cotton.
Mr. Allen. And this was not a direct request of Senator
Blanche Lincoln's failed 2010 Senate reelection bid?
Secretary Vilsack. She was the chair of the Agriculture
Committee, and obviously she made a request in her capacity as
the chair, and as a Senator.
Mr. Allen. Okay. Now the other thing that I am having a
hard time doing in talking with you and I will try one more
time, but I have carried the conversation we had back to our
industry leaders and members and colleagues on the Committee,
and we have this difference of opinion as far as cotton is
concerned. Obviously lint is part of cotton. We export 80
percent of our lint. Cottonseed is part of it, and we export
less than ten percent of cottonseed. It is my understanding,
and this is testimony by a former Chairman here, that you said
that Congress expressly removed the eligibility of cotton for
ARC and PLC assistance. It is true that upland cotton is no
longer a covered commodity, but that completely misses a major
point. The prior designation of upland cotton as a covered
commodity only impacted cotton lint. Cottonseed has never been
a covered commodity.
Secretary Vilsack. When we were structuring the STAX
program, the industry requested that STAX cover cottonseed.
Mr. Allen. Do we have evidence of that? Can you get me
evidence of that?
Secretary Vilsack. Well I can get you the folks at RMA to
do that.
Mr. Allen. Okay, because I can't seem to find anybody
that----
Secretary Vilsack. Well, hindsight is always 20/20, and the
reality, let's be candid here. The reality is that at the time
this farm bill was being put together, everyone was operating
under the assumption and belief that they needed to save $23
billion, and choices and issues had to be factored, and it was
a lot of give and take. And cotton was also faced with the
Brazilian cotton case, and the retaliation that faced us as a
result of that.
Mr. Allen. I understand.
Secretary Vilsack. And decisions were made to create this
program, and there was no effort at the time to include
cottonseed in the list of all of the other oilseeds that were
known at the time. We have already expressed a willingness to
help the cotton industry, if I believed in good faith that I
have the ability to do this, I would do it. I do not believe in
good faith I have that ability.
Mr. Allen. Well, what we believe is we expressly gave you
the authority to designate other oilseeds at your discretion.
Secretary Vilsack. You gave me the authority in situations
where oilseeds crop up in between farm bills that were not
fully appreciated and not aware of. We have never, ever
exercised this particular provision in the way that you are
asking us to exercise.
Mr. Allen. Well, you have to give me more to go on, because
I am having a very difficult time explaining that to my farmers
back home who are going out of business.
Secretary Vilsack. Well, we will----
Mr. Allen. Thank you. I yield back.
Secretary Vilsack.--be happy to help them if you give us
the permission and the capacity.
The Chairman. The gentleman's time----
Secretary Vilsack. You can reopen the farm bill----
The Chairman. The gentleman's time has expired.
Mr. Bost, 5 minutes.
Mr. Bost. Thank you, Mr. Chairman. Thank you, Mr.
Secretary, for being here.
I am going to go down a little bit different road. We
actually in the State of Illinois and everyone along the
Mississippi River had the wonderful opportunity at Christmas
and New Year's to have what some people would consider not a
real good gift and not a real happy New Year, in the fact that
the Mississippi rose to the 1993 levels, but did it in about
1\1/2\ or 2 weeks. When it did that, it blew through an area in
deep southern Illinois known as the Len Small levee, and
pictures are worth a thousand words, so I am going to show you
what we got and the sand that moved through, and the
devastation. This was all productive farmland prior to that
levee break. Some of the area they had as much as 1", most of
it, 3 to 5 of sand that moved, this, as you can see, is an
irrigation system that was actually buried and wadded up.
Now that being said, the reason why I am wanting to show
you those is because in August of 2015, you declared 87
counties in Illinois an agricultural disaster in a letter to
Governor Rauner. Also in that letter, you outlined the systems
available to producers in Illinois who may be affected and
noted that each claim would be treated on a case-by-case basis.
Mr. Chairman, without objection, I would like to submit
this letter to the Secretary and put it into the record.
[The information referred to is located on p. 61.]
Mr. Bost. Now believe me, because I work with these people
all the time. Farming in a floodplain is tough, and with that
being said, my question is will the same assistance that was
provided in 2015 disaster declaration be available to producers
in the affected areas of my district that experienced this
flood, and I know that is pending on the governor's
declaration, and how can the rural development help these
communities that are in this situation?
Secretary Vilsack. The governor can make this request, and
then we have been turning around these requests very quickly.
So we would await the governor's request. I would be happy to
have our staff take a look at whether or not a Secretarial
designation from me, which is not necessarily dependent on the
governor's request, can be done. I don't know that it can, but
we would be glad to look at that.
I would say there are two or three places where we could
provide some help. I think NRCS could potentially be helpful.
There are obviously loans, disaster loans that are available to
producers. There is also the issue of what kind of crop
insurance protection they have, and the impact and effect that
this is going to have on their ability to plant a crop in 2016,
and what kind of protections may be afforded. And in terms of
rural development, I will have our folks reach out to you. I am
trying to think of the program within Rural Development that
would be helpful. I think NRCS and FSA are probably more likely
to be helpful.
Mr. Bost. Okay.
Secretary Vilsack. But there may be something that Rural
Development can do, but my guess is it is primarily NRCS and
FSA.
Mr. Bost. And kind of just following up on that, we know
that obviously crop insurance, if they can get crops out at all
this year, but crop insurance is actually going to go up
because of this. Is there anything that they can be done to get
relief from a potential increase for that insurance to try to
bring that area back? Do you know that?
Secretary Vilsack. Well, there is that ability, I will be
happy to check with RMA about that.
Mr. Bost. Okay, if you just work with our staff to try to
figure it out?
Secretary Vilsack. Yes, I will be happy to ask about that.
Mr. Bost. And I am going to just say thank you for your
work on GMO and what we had to deal with out of this Committee
and what we moved as far as the problems that can exist with
each state that is labeling out there. And we are hoping that
this gets all the way through and we can actually stop it, but
what happens if we don't get something done before July 1?
Secretary Vilsack. Vermont law goes into effect. Food
processing entities will have to think whether they want to
segregate their supply chains and incur costs, or whether they
want to do business or reduce access to product. And other
states, obviously, are considering this, and frankly, the
answer and whatever is done needs to recognize that this is not
the first and only and last time that we are going to be
dealing with things like this. Folks are going to raise issues
about how crops are raised all the time, so we have to have
some kind of mechanism, the smart label answers this, to be
able to rapidly adjust to whatever consumers are interested in
knowing, but doing it in a way that doesn't convey the sense
that the product is unsafe, because it is not. There are
hundreds, hundreds of studies to the effect that it is not
unsafe.
Mr. Bost. I appreciate working with you, and with that, I
yield back.
The Chairman. The gentleman yields back.
Mr. Rouzer, 5 minutes.
Mr. Rouzer. Thank you, Mr. Chairman. Mr. Secretary, thank
you very much for being here, and I also want to quickly thank
you for your help in working with us on lean meats as it
related to the Dietary Guidelines.
Two things I want to raise with you, and both are of great
concern to me. Speaking of lean meats, pork, the other white
meat, I understand the Humane Society filed a suit against USDA
over the sale of that trademark. It is also my understanding
that USDA may now be considering a settlement agreement with
the Humane Society. As I understand the way this has played
out, Humane Society filed the suit. The case was initially
dismissed on the basis of a lack of standing. Then the D.C.
Circuit reversed that ruling, but USDA did not appeal or
otherwise exhaust any of the natural defenses that you
typically would pursue. Was that a decision made by USDA, or
was that made by the Department of Justice, or where was USDA
in the mix on this?
Secretary Vilsack. It was a decision made in concert with
the industry.
Mr. Rouzer. So now has the industry been in----
Secretary Vilsack. Industry has been involved in
discussions about how to structure this in such a way: the
issue has to do with the payment for that trademarked phrase
that is no longer being used. There is a question about the
check-off dollars being used in that way, and the industry is
now working with the Humane Society in between the timeframe
that has been granted by the court to try to figure out how to
do this in a way that is satisfactory to all parties.
Mr. Rouzer. Well who suggested the settlement? Where did
that come from? I can't imagine the industry suggested the
settlement.
Secretary Vilsack. Well, I don't know that that is
necessarily correct. The industry is interested in getting this
resolved.
Mr. Rouzer. Well, I can certainly understand that. I guess
the part that concerns me a little bit is there seems to be a
tendency, and this is not just related to this specific case,
but across the board where someone files suit and then rather
than pursuing every legal option available, we just settle.
That is the overarching concern that I have across the board.
Secretary Vilsack. You may be right about other cases, but
I don't think that that is the situation here. I think the
circumstances are that you have a situation where payments were
being made, multi-million dollar payments were being made for
something that was no longer being used, and legitimate
questions were raised about that, and so in an effort to try to
get matters resolved and get those monies continuing to promote
the industry, the folks are in the process of discussing how
this can be structured in a way that makes sense. It doesn't
invite legal challenge.
Mr. Rouzer. Moving on to another issue, cotton. You have
heard a lot about cotton today. I am not going to belabor the
point, other than saying that my producers back home are really
struggling. In fact, I met with a group of cotton farmers last
week. Their situation is quite concerning, and of course, all
of agriculture is struggling as it relates to commodity prices
and the weather, et cetera.
Where I have an even broader concern, though, is as it
relates to fighting back with these other countries, our
farmers feel like they are the punching bag. When is the United
States Government--when are we going to fight back as it
relates to domestic supports that are provided in other
countries, for those countries that we are competing against?
That is a real frustration all across the country, and
particularly in my district. When is the last time we had
pursued a challenge against domestic supports by another
country?
Secretary Vilsack. Well, there is a case pending. Issues
have been raised with China about poultry, but I would be happy
to get you the list of cases that have been raised or the
issues that have been raised.
Look, we have had 7 of the best years cumulatively of ag
exports in the history of the country, and we are aggressively
pursuing more opportunities, and we are convinced that the
Trans-Pacific Partnership will provide us incredible
opportunities, and reopening our opportunities in Cuba. So we
are constantly looking for ways to expand the market, and when
we think there is a problem, the passage of the recent customs
bill is a reflection of you all expressing a desire for more
enforcement, and you are going to continue to see more cases
that have been brought in this Administration, not necessarily
in agriculture regards, but the entire economy than any
previous Administration.
Mr. Rouzer. We are not just opening markets, but it is
important for us to go on offense and challenge some of these
other countries the way they like to challenge us.
Mr. Chairman, I yield back my time.
The Chairman. The gentleman's time is yielded back.
Mr. LaMalfa, 5 minutes.
Mr. LaMalfa. Can I defer, please?
The Chairman. Mr. Newhouse, for 5 minutes.
Mr. Newhouse. Thank you, Mr. Chairman, and thank you, Mr.
LaMalfa.
Mr. Secretary, as everyone is singing your swan song, I
don't know if it is totally unprecedented for the next
Administration to keep a current Secretary, so just to put my
2 in there for your performance. I appreciate working with you
over the last 7 years.
A couple of questions real quickly. Earlier this month, I
noticed that APHIS published a Notice of Intent to revise its
biotech regulations and complete an environmental impact
statement, an EIS, which is required under the NEPA for such
changes.
I have to tell you, first of all, that the Notice of Intent
seemed somewhat vague. It wasn't clear what commodities or
technologies were intended to be regulated. Under the notice,
things previously unregulated would potentially fall under
regulation, such as the seedless watermelons, for one example.
Could you tell me what prompted this regulatory revision, and
how a systemic revision can be expected to be in it? And as a
follow up to that, I was very concerned that there was only 30
days given for a comment period, and as you well know,
something of this importance I would hope it could have as much
time as possible for stakeholders to weigh in. Would you
consider perhaps extending that 30 day period?
Secretary Vilsack. This has to do with plant pest risk
assessment section of the biotech regulations that USDA is
involved in. We had proposed a set of changes many, many, many
years ago that has sort of languished, and so we decided to
withdraw that proposal and start the process again to give
people an opportunity to refresh their comments, as they had
provided previous comments. We provided a list of alternative
options. One of those options has to do with trying to make
this process as efficient as possible. We heard concerns from
the industry that we take a good deal of time, and we have
reduced that time from 90 months to about 13 months on average
now. We have reduced the backlog, but there is still a desire
for greater efficiency. So to the extent that we have already
passed on a technology, the question is why should we have to
reevaluate that same technology if it is in a different crop?
That is a question, and a legitimate one for comment.
As far as the comment period is concerned, we were always
open. If we see that there is a significant interest in this
and there is a lot of demand, we have in the past been willing
to provide additional time, and that may very well happen in
this case. I don't want to commit to it, but it may very well
happen.
Mr. Newhouse. Well thank you very much.
On the GMO issue, I would just add my ditto to Mr. Bost's
comment and appreciate your support on working on behalf of
making sure we have a clear movement forward, something that
will prevent us from having a patchwork of regulations around
the country. So thank you very much for your work on that
issue.
Let me talk a little bit about forest certification
programs. Last September, the EPA published an interim
recommendation for environmental standards, as well as
ecolabels for use in Federal procurement. Their recommendation
for lumber excludes several of what we see as credible
standards, including the SFI, which is Sustainable Forestry
Initiative, and the ATFS, the American Tree Farm System. I
don't have to tell you that across the United States, a huge
percentage of the forest area is covered under those two
systems. In my home state, 95 percent of the forests are
covered under those. I can tell you I was disappointed to learn
of this recommendation, and asked what kind of determination or
without consultation by USDA should we see in the future. Is
the USDA going to stand up for these certification programs?
Could you provide us with an update on how you plan to educate
the DOE as well as the EPA about these certification programs?
Secretary Vilsack. Congressman, I will be happy to ask our
team to give you a full briefing on the process that is in
place. If you see that it is not robust enough, I am sure that
you will be able to tell us that. I can commit to you that we
make every effort to try to make sure that EPA is aware of our
views on certain things and what we think the likelihood would
be of the impact in the field. Obviously, it is a sister agency
and frankly, I don't necessarily want, and I don't think you
want the EPA to tell me what I should be doing, do you?
Mr. Newhouse. Absolutely not, but I would be hopeful that
you would engage with those two other agencies and educate them
as to the importance of those programs.
Secretary Vilsack. Fair enough.
The Chairman. The gentleman's time has expired.
Mr. Newhouse. Thank you, Mr. Chairman. I appreciate it.
The Chairman. Mr. Kelly, 5 minutes. I am sorry, Mr.
LaMalfa, 5 minutes. Sorry about that.
Mr. LaMalfa. Thank you, Mr. Chairman, parachuting in here.
Mr. Secretary, thank you for appearing again with us here
today, and your dedication to doing so in past hearings.
An issue we have a lot, especially, it is important up in
our district is the Resource Advisory Committee known as RAC.
There is an appointment process which is important for the
funding for RAC work to be done on forestry and other land
management issues, which is really important for secure rural
schools, for example, in our area. And so what we find is that
the RAC committees, some of them don't have enough members on
them because the appointment process hasn't been fulfilled to
reach a quorum. They have to have a quorum to make decisions on
the allocation of funding, so it delays the process for what
Forest Service needs to get done, and the BLM, et cetera. Are
you aware of that? Is there some way we could goose this
process along a little bit to get to RAC appointees so they can
have quorums in doing their good work?
Secretary Vilsack. Congressman, I basically approve all
those appointments, and from time to time as I am approving
them, I notice that there are categories that are not filled
because there is no nomination or no recommendation for the
local area. I can't give you an example. There may be a request
for a Native American representative, or there may be a request
for an engineer, or there may be a specific request the way the
RAC is set up.
Mr. LaMalfa. Do you have any flexibility where let's just
say the Happy Camp, California, may not have a lot of engineers
and for the area that that RAC would cover, for example. Is
there flexibility or do you need a legislative fix to allow
some more flexibility? Do you find you are bound by that a
little bit?
Secretary Vilsack. That is a very good question, and I
don't know the answer to that question, but I will take it back
and find out.
Mr. LaMalfa. Please.
Secretary Vilsack. It has been frustrating to me because
sometimes I will check off six names, but there are eight other
categories that are not----
Mr. LaMalfa. Yes, and I understand that they want a little
diversity or all different types of input. I suppose maybe we
could narrow that down or broaden it to be public members--go
ahead.
Secretary Vilsack. I don't know that it is our regulation
that sets up the categories. I am not sure about that, and that
is what I will check.
Mr. LaMalfa. Okay. I would love to help on that a little
bit.
And generally on Forest Service issues here, again, we have
had a lot of fire in northern California. You visited Trinity
County here about 2 years ago, and we had, in 2014, a
devastating fire up in Siskiyou County as well. We are just now
getting to where they are putting out salvage contracts here in
early 2016 for a 2014 fire. The process of doing the study and
some of the background involved has taken so long that the
value of the wood there for salvage, and it is a very modest
project, four percent of the 200,000+ acres is what we are
talking about is what the project is, and the value of the wood
goes away month by month with infestation of bugs and other
things that happen to the burnt trees. So can you see a way we
can expedite more? It seems like it is a reinvention of the
wheel every time we have a salvage, like oh, we never heard of
that. We better study it to death. And I am not saying you,
sir, but there is a process here that is very cumbersome that
doesn't allow us to get out there and get on this, get the
value out, and get the forest recovered. You see it on private
lands. You can fly over it on the checkerboard pattern of
private versus public lands. They are out there. They are
recovering the forest. They are replanting. Our Federal lands
are the ones suffering. It is the next tinderbox as the brush
builds up and the old dead wood still stays there.
I will stop. Can we help you in any area on that, or do you
see a remedy?
Secretary Vilsack. I am a broken record on this. First and
foremost, it is about staffing, and the reality is a 50 percent
reduction in staff because we are transferring money to put
fires out.
Mr. LaMalfa. We are working on that, sir. We will
allocate----
Secretary Vilsack. We have been working on it for years,
Congressman. We need to get it done this year.
Mr. LaMalfa. Yes. Bipartisan support to do it----
Secretary Vilsack. Great. That will be a happy day for me.
Second, we have looked at ways in which we can streamline
the analysis, the NEPA process and all that kind of stuff that
has to go into any kind of Federal action. We actually have
streamlined that process and we are continuing to look for more
efficiencies in that process. And in reference to Trinity
County, I know that we just did enter into a fairly significant
contract there. I was told just 2 days ago about that.
Mr. LaMalfa. Yes. This is the one in western Siskiyou, but
we just need help to be able to do it the same season. Ideally,
you should be able to have a protocol you would follow
immediately after a fire when the last embers are out that we
are in there starting just like on private land. So anything we
can do, please follow up and I would love to have the answer on
that RAC question as well, and see what we need to do there.
Thank you. I yield back, Mr. Chairman.
The Chairman. The gentleman's time is yielded back. Trent,
it is your turn. Sorry about that.
Mr. Kelly. Mr. Secretary, I stayed here for 2 hours and 15
minutes, and I am basically going to ask you some of the same
questions that other people have asked you.
It is more of an impassioned plea, and it is more of
leadership, because I respect you tremendously, and I know that
you can get to the right answer to do the right thing. And I
wouldn't have stayed here and asked something if I didn't feel
like the whole farm industry of my state depends on your
decision, Mr. Secretary, that is yours to make. And quite
frankly, I think that you are wrong in the way that you read
the Supreme Court, and I am a lawyer and I understand those
things. I understand. I had JAG officers as a commander in the
guard who will tell me I can't do things, when I know, in fact,
that it is their interpretation of the law, but their
interpretation is wrong and I can go and do the research behind
that to show that is not the only interpretation, and that is
not the right interpretation. I know also as a former district
attorney that we would argue over rules of evidence where I
would have briefs on cases which the circuit court judge had
found something and then the higher court ruled to reverse or
affirm.
And Mr. Secretary, all I ask you to do is to open your mind
and go back and relook, because, clearly, the industry may have
intended for cottonseed or not intended, but I don't care what
the industry thinks. What the statutory construction goes to is
not what the industry thought. What the statutory construction
goes to is what Congress thought. Not what the industry
thought, which is a separate incident, but what Congress
thought. And Mr. Secretary, I can truly say that I believe that
Congress when they said other oilseeds and allowed you the
authority to do that, I don't think that they thought about
cotton one way or the other. I think at that time the only way
they thought about cotton was in lint. And Mr. Secretary, they
have given you the power to do this, in this statute as it is
written, where it says other oilseeds, and it did not
explicitly rule out cotton. Now the industry may have talked
about that, but the Congress and the committees in Congress did
not. And Mr. Secretary, all I am asking you to do is go back.
You have the authority. And right now, timeliness is of the
essence. If this doesn't happen quickly; and the other
recommendations that you have aren't going to get us there.
They are not quick enough, and I have had many, many officers
over the years tell me that an 80 percent solution on time is
better than a 100 percent solution 10 minutes after it works.
And 10 minutes is too long. If we do this in August, if we do
this in April, it is past the point to have an impact on my
farmers.
Back in the district this week, I went and spoke at the
peanut buying point in Memphis, Tennessee, and I talked to a
lot of my peanut farmers one-on-one. And it is not just cotton
that is impacted. It is impacting my peanut farmers right now
because one of the most important or the most profitable places
that you can make right now was peanuts. But right now I have
cotton farmers growing peanuts because it is profitable, which
depresses the price of my peanuts, which means now my peanut
farmers are suffering from the same thing.
Mr. Secretary, again, I respect you and I think you are
doing the right thing, and I think you got to that conclusion
by looking at the law. The only thing I will ask you, Mr.
Secretary, is please relook at it, because I know that you have
the authority and I know what Congressional intent was at the
time, and you can get to either as most legal arguments, and
you and I as lawyers understand that. You can get to the right
answer if you choose to, Mr. Secretary, and as a plea from my
farmers in Mississippi, I am asking you at least reopen and
relook and give them an opportunity to make the sale.
And for your comments, Mr. Secretary?
The Chairman. The gentleman yields?
Mr. Yoho, 5 minutes.
Mr. Yoho. Thank you, Mr. Chairman, and Mr. Secretary, I am
going to sound like a broken record, I guess, but I do
appreciate your being here today.
As you know, the subject of GMOs come up often. It is
relatively hot. It is a relatively hot topic, and not all for
the good. It seems that there are surprisingly large groups of
folks that prefer the ostrich approach to science and feeding a
growing world. Granted, some, like our European friends, are
taking the anti-GMO position in a fairly blatant effort to
obstruct trade and harm American farmers and ranchers. Others
are doing so because they just don't know any better. The rest
may honestly believe that the GMOs are harmful, even though
pretty much everything they and their families eat is the
product of genetic modification. Humans have been crossbreeding
plants and animals over thousands of years, and modern science
just expedites that process.
What concerns me, however, is that the USDA, United States
Department of Agriculture, doesn't seem to be a champion of the
results of that science. And heck, I was in a briefing with
Melinda Gates, and she sang the praises of GMOs and highlighted
the fact that we can't feed the world or America's hungry, much
less get them the needed increase in levels of vitamins and
essential nutrients without the GMOs. If we want global
security and stability, make sure people's bellies are full.
You have agencies like the Agricultural Research Service
and the National Institute of Food and Agriculture, not to
mention our land-grant universities, leading the charge for
scientific advancement in the food and science industries in
agriculture. Under your direction and the funding provided by
the hardworking American taxpayers, we should be celebrating
the safety and the increased benefits of these GMOs, and if
not, maybe we should stop funding these. We can't feed a world
with just organic farm and farm plots. Not that there is
anything wrong with them, there just aren't enough of them.
And given all that, Mr. Secretary, when can we expect you
and the U.S. Department of Agriculture to be the biggest
cheerleaders for the sound science in feeding the world's poor,
and help stave off this hunger epidemic that is going to come
when we hit nine billion people in the world?
To fend off the false narratives coming out of the media,
we are funding all this stuff but we are not seeing the
results. We are not seeing, not just you, but the USDA, the
scientific community, our land-grant universities standing up
and championing this. What are your thoughts on that?
Secretary Vilsack. Congressman, I am just trying to collect
myself, because what you have just outlined is just completely
incorrect.
Mr. Yoho. Okay. How is that? Explain that.
Secretary Vilsack. Because no one in the Capitol of
Washington, D.C. has been more of an advocate for genetically
modified technologies in agriculture than me. So I don't know
what you are reading or what you are not reading. I don't know
if you don't know about the fusses that we have with the
Chinese over their regulatory system that I have been
consistently fighting for 7 years. I don't know if you don't
know about the 7 hours of meetings I had trying to broker a
compromise on the issue of labeling. I don't know if you aren't
aware of the fact that I was the co-chair of the Biotech
Partnership when I was governor with Governor Johanns at the
time, promoting this technology. I don't know if you don't know
about all of the public comments I have made about the safety
of this, including a comment that I made recently at the
Appropriations Committee where factcheck.org wondered why I
said there were hundreds of studies outlining the safety of
biotechnology, only to find out that, actually, I was wrong,
because there were literally thousands. I don't know what you
are talking about.
Mr. Yoho. Okay. Let me interrupt here, because there is a
lot I don't know, granted, but what I can tell you is----
Secretary Vilsack. You shouldn't state that we are not
championing this when we, in fact, are.
Mr. Yoho. Well let me give you an example. The papaya that
was genetically modified for the ringspot virus in the
University of Florida was done over 10 years ago, and we are
still waiting for it to get released. It is just now getting
ready to be released because of the narrative from the
environmental groups and the EPA saying well we are not sure
this is safe, but the studies were done. We should be up here
in the government saying, ``Hey, wait a minute,'' and go back
to the EPA and say, ``Hey, we have done the research. We know
this is safe.'' Then it is the same with so many of these other
products. We did a teleconference call the other night, and
people are saying you guys have taken away the ability to label
GMOs and we had to correct them. And I agree with the standards
that you are talking about, but I want to hear the USDA in the
press when they attack beef and beef is bad and this and that.
Secretary Vilsack. We have been. In fact, when I came into
this office, there was a backlog of biotech regulatory actions.
We have erased that backlog. So that is just not even accurate.
It is not even close to being accurate.
Mr. Yoho. I disagree with you on that. I mean, if you look
at that----
Secretary Vilsack. Well, you are wrong, with all due
respect----
Mr. Yoho. I yield back. I am over time.
The Chairman. The gentleman yields back.
Mr. Thompson, 5 minutes.
Mr. Thompson. Thank you, Chairman. Mr. Secretary, it is
good to see you. I will try not to be a broken record. I can't
even find a needle for my record player anymore.
So I want to say, first of all, I had hosted just a couple
of weeks ago an event in the district, trying to make it more
efficient for the great people working at NRCS and Rural
Economic Development. We did an event and called it Finding
Funding Opportunities Outreach event, and it really did well. I
want to put a plug in for Gary Reed from my area from NRCS, a
USDA employee. He did a great job coming out. We tried to make
it one-stop shopping, so we had a room full of people. There
were township supervisors and community leaders and healthcare
folks looking at all the different programs that are available
through USDA, trying to make it easier for folks to navigate
and Gary did a great job. So thank you for that and your
support of those programs.
I just want to check in, as you know, the 2014 Farm Bill
gave the Forest Service a lot of tools to help the agency
better manage the National Forests, including some of the
challenges we have. We did that through the categorical
exclusions, dealing with insects, disease treatment
designations, as well as reauthorization of both stewardship
contracting, good neighbor authority. Any thoughts on how the
Forest Service is doing with these tools? How is that working
out?
Secretary Vilsack. Congressman, I have information in front
of me here and I hope it is accurate, but if you take a look at
the time period from 2001 to 2008, we did 1,144 million board
feet in Pennsylvania of treated wood. From 2009 to 2015, we
have done 23,134 million board feet. So we are continually
looking for ways in which we can increase activity.
Mr. Thompson. And the board feet have been going up.
Obviously, as Chairman of the Subcommittee, I track that very
close across the country, but specifically in the Allegheny
National Forest. When you talk about across Pennsylvania, it is
ANF. That is the forest. Any thoughts in break down? I know a
lot of that increase has been in stewardship contracting, and
that is important because that is how we go after undergrowth.
That is how after the invasive and non-invasive species,
diseases, the lifeblood and local jobs to do that, rely a lot
on local contractors. But there is a distinct difference in the
economic value, and in the long-term management of the forest,
when you divide it between stewardship contracting and green
stick. I think green stick production is still lacking. And I
recognize you don't need to revisit the staffing issue, we
brought that up and identified the number of foresters that we
have lost, retirements in the Forest Service. We certainly
recognize that, but any thoughts in terms of just where that
number is, and the distinction between stewardship contracting
and green stick production?
Secretary Vilsack. Stewardship contracting agreements are
providing roughly 30 percent of the timber volume.
Mr. Thompson. Our goal, with the Committee, was work with
you to help increase that number, and stewardship contracting
as well, but we want green stick to----
Secretary Vilsack. What are you thinking is--I don't know
if it is appropriate, Mr. Chairman, if I ask a question?
Mr. Thompson. I would love it.
Secretary Vilsack. What do you think an appropriate ratio
is?
Mr. Thompson. Well, more, just given the status of where we
are----
Secretary Vilsack. You mean less stewardship and more----
Mr. Thompson. No, we want to see them both increase, but we
don't want the stewardship contracting, which has been really
good and has increased, but we also need to make sure that we
are putting the resources on the ground, the boots-on-the-
ground, and getting the regulatory barriers. That is why we did
the things with the categorical exemptions, giving you more of
those tools, trying to take the target off your back from these
environmental groups that are not achieving their mission. They
are actually ruining our forests. They are allowing them to
decay. We are allowing stands of timber, until we get around to
harvest them, we have gone past the point of value in the other
living entities, and they will start to decay and lose value. I
think that is the goal. There is a lot of frustration. I know
Members of the Committee, and I, are fans of the Forest
Service. I take the opportunity to stop in and thank the folks
working in the Forest Service wherever I travel.
Secretary Vilsack. One thing I have noticed in the last
couple of years is that there is now a better collaborative
spirit in many of the forests across the United States. I think
people are recognizing precisely what you have said, which is
that people have to get along here in order to get work done,
and that there has been too much delay in the fussing and
fighting that has been associated with the forests, and that
has damaged the forests. Hopefully we are going to see more
collaboration and more quick contracting and more stewardship
and more activity, and more demand for the wood products that
we are producing.
Mr. Thompson. Thank you.
The Chairman. The gentleman's time has expired.
Mr. Secretary, I know you are getting close to your hard
stop, and I certainly appreciate you being here this morning.
Let me ask you one other question real quick, and then I
will make some closing remarks and you can flee the
jurisdiction. But, thank you for being here this morning. I
appreciate it.
I have had a multi-year disagreement with Navy Secretary
Mabus, in particular, with his greening up the Navy, the extra
costs associated with that program that DOD is absorbing at a
point in time where our pilots aren't being able to fly as much
as they need. There are a lot of readiness issues out there,
just operational maintenance and things going on. We
specifically included a provision in last year's NDAA that said
the Navy cannot buy drop-in biofuels if the costs are not
competitive with conventional fuels. Now, I understand that
USDA has weighed, in using your CCC authorities, to buy-down or
do whatever you are doing to buy-down those costs, so that it
looks like the Navy is buying this jet fuel, algae-based jet
fuel or whatever, at something approaching what it would cost
for normal fossil fuel-based jet fuels. Is that a misstatement
on my part, a misunderstanding on my part? Is that what you all
are doing?
Secretary Vilsack. There was an agreement between the
Department of Energy, the Department of Agriculture, and the
Department of Defense, several years ago, to try to encourage
this industry, and we all pledged a certain level of resource
to this effort. So what you have indicated is probably
accurate. I am not sure how much assistance we provided, but we
probably provided some assistance.
The Chairman. Yes, at least in 2014 it was $161 million. We
think it is $170 million this year. That last number is one
that was told to me. I don't have it. Maybe it is a pledge,
but----
Secretary Vilsack. I don't think it was that much.
The Chairman.--if you would take this one for the record,
because I caught you flat-footed, and this is not a ``gotcha''
session. We had enough of that today already. But take it for
the record, because I am concerned that you guys might have
been used to help the Navy get around a NDAA restriction that
we put in there, and you certainly don't want to do that.
Mr. Secretary, I don't know if you are the longest-serving
Agriculture Secretary, but you are one of the longer serving
Agriculture Secretaries. The 14 months I have been in this
slot, you have worked hard at developing a relationship with me
and I have reciprocated. And we built that. I never intended
for the cotton thing to be personal at all, and we just have a
disagreement. I took an oath as well, and your thought that I
would be asking you to break your oath, I disagree with that. I
would never ask you to break your oath and do something that
was wrong or against the rules. I have good lawyers on my team
that are telling me you have all the authority you need to do
that, and you have good lawyers on your team telling you that
you don't. We always stick with the lawyers we pay. I got that,
but I did not ask you to break your oath by any stretch of the
imagination, and that was never intended.
We have some cotton guys out there that are hurting, and
you know that. You are sympathetic to their issues. I disagree
with my colleague, Mr. Yoho. You are one of the best champions
out there for biotechnology labeling. You had me at your home
at dinner one night and this subject came up out of the blue
long before it became a hot topic, and you were already working
on a solution to try to figure out how we can do this labeling
thing so that we can get the consumer the information they
want. It is not a food safety issue. In other areas you have
done it really well. We just have a disagreement.
My good friend, Mr. Kelly, was a lot better at expressing
our desire to try to keep working on this cotton thing, because
of the issues that are going on, but I do appreciate your 7
long years and however much time you have left in your tenure.
You have done a great job. I am proud of the FSA and the work
they do in implementing our farm bills. I am proud of what your
team does, and there are some choices going out there. You guys
made a choice that you wanted to plus up spending somewhere
else in the farm bill. You want to take it out of crop
insurance. Those are just differences of opinion on the
circumstances. We have cut your budget. You have divided
government, you have this dust up between the White House and
us, and while I am not aware of the USDA overreaching its
boundaries or going beyond its charters to do things that upset
the rules, but certainly there are agencies out there that do
that. And, we are in tough times. We have $19 trillion of debt
and we can't afford to do everything we want. I did not ask you
under any circumstance to break your oath. I never would. And I
appreciate the hard work you have put in all these years, the
sacrifices you and your wife have made to serve agriculture and
rural America the way you have done. You have done a great job.
We just simply have a disagreement on an important issue that,
all politics are local. I represent a bunch of cotton guys, and
if this thing were going on in corn in Iowa, who knows what
might be happening.
I appreciate your efforts and would echo Mr. Kelly's
comments. My public comments for the last 3 months on this
issue have been very circumspect in trying to make sure I
didn't do anything that made it more difficult for you to get
to the conclusion that we want, that you dig your heels in, in
a way that makes this unworkable and not happen. None of my
public comments have ever done anything but simply say, ``Look,
we have to get to an answer. I don't care who gets credit for
it. This is the designation that we want.''
I appreciate your understanding this morning, 2\1/2\ hours
of give and take, and I appreciate that and your service.
Ranking Member Peterson also wishes you well. Under the
rules of the Committee, today's record of the hearing will
remain open for 10 calendar days to receive additional
material, supplemental written responses from the witness to
any questions posed by a Member. This hearing of the Committee
on Agriculture is adjourned.
[Whereupon, at 12:38 p.m., the Committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Letter by Hon. Mike Bost, a Representative in Congress from
Illinois
August 12, 2015

Hon. Bruce Rauner,
Governor,
State of Illinois,
Springfield, IL.

Dear Governor Rauner:

Thank you for your letter of July 23, 2015, requesting a disaster
designation for Illinois counties that suffered losses due to excessive
rain and flooding that has occurred in 2015.
The Department of Agriculture reviewed the Loss Assessment Reports
and determined that there were sufficient production losses in 87
counties to warrant a Secretarial natural disaster designation.
Therefore, I am designating 87 Illinois counties as primary natural
disaster areas due to damage and losses caused by excessive rain and
flooding that occurred during the period of June 1, 2015, and
continuing. Those counties are:

Adams, Fulton, Logan, Randolph,
Alexander, Gallatin, McDonough, Richland,
Bond, Greene, McLean, Rock Island,
Brown, Grundy, Macon, St. Clair,
Calhoun, Hamilton, Macoupin, Saline,
Carroll, Hancock, Madison, Sangamon,
Cass, Hardin, Marion, Schuyler,
Champaign, Henderson, Marshall, Scott,
Clark, Henry, Mason, Stark,
Clay, Iroquois, Massac, Tazewell,
Clinton, Jackson, Menard, Union,
Crawford, Jasper, Mercer, Vermilion,
Cumberland, Jefferson, Monroe, Wabash,
DeKalb, Jersey, Montgomery, Warren,
DeWitt, Johnson, Morgan, Washington,
Douglas, Kane, Peoria, Wayne,
DuPage, Kankakee, Perry, White,
Edwards, Knox, Piatt, Whiteside,
Effingham, La Salle, Pike, Will,
Fayette, Lawrence, Pope, Williamson,
Ford, Lee, Pulaski, Woodford.
Franklin, Livingston, Putnam,

In accordance with section 321(a) of the Consolidated Farm and
Rural Development Act, additional areas of your state are named as
contiguous disaster counties. Those counties are:

Boone, Cook, McHenry, Stephenson,
Bureau, Edgar, Moultrie, Winnebago.
Christian, Jo Daviess, Ogle,
Coles, Kendall, Shelby,

In addition, in accordance with section 321(a) of the Consolidated
Farm and Rural Development Act, counties in adjacent states are named
as contiguous disaster areas. Those states, counties, and numbers are:

Contiguous counties in Adjacent States:

Indiana (10)

Benton, Knox, Newton, Sullivan, Vigo,
Gibson, Lake, Posey, Vermillion, Warren.

Iowa (7)

Clinton, Jackson, Louisa, Muscatine, Scott.
Des Moines, Lee,

Kentucky (5)

Ballard, Crittenden, Livingston, McCracken, Union.

Missouri (15)

Cape Lewis, Mississippi, Ralls, St. Louis
Girardeau, City,
Clark, Lincoln, Perry, St. Charles, Ste.
Genevieve,
Jefferson, Marion, Pike, St. Louis, Scott.

A Secretarial disaster designation makes farm operators in primary
counties and those counties contiguous to such primary counties
eligible to be considered for certain assistance from the Farm Service
Agency (FSA), provided eligibility requirements are met. This
assistance includes FSA emergency loans. Farmers in eligible counties
have 8 months from the date of a Secretarial disaster declaration to
apply for emergency loan. FSA considers each emergency loan application
on its own merits, taking into account the extent of production losses
on the farm, and the security and repayment ability of the operator.
Local FSA offices can provide affected farmers with further
information.
Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Hon. Thomas ``Tom'' J. Vilsack,
Secretary.
______

Submitted Questions
Response from Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S.
Department of Agriculture
Questions Submitted by Hon. K. Michael Conaway, a Representative in
Congress from Texas
Question 1. The farmers and ranchers I am talking to are facing
very difficult times, and those that aren't yet are very nervous about
the direction things are headed. What analysis, if any, has USDA done
to look at the challenges farmers are having in securing credit for the
upcoming crop year?
Answer. USDA continually monitors both the financial health of US
farmers and farm sector credit availability. Here is our current
assessment:
An overall decline in commodity prices in calendar year 2015
resulted in a second consecutive year of lower net farm income. Overall
cash receipts fell $43.6 billion from 2014 levels (^8.7 percent). The
largest dollar declines were for dairy (^28.1 percent), hogs (^25.1
percent), and corn (^15.6 percent). Production expenses fell for the
first time since 2009, but the decline was only 2.0 percent. The
largest declines in expense items were for fuel and feed costs, which
declined by $10.8 billion (12.8 percent). Labor, interest, and property
tax expenses increased by 8 percent. Total Direct Farm Program payments
for 2015 were up 10.4 percent from 2014 ($1 billion) and at the highest
level since 2010. Recent Federal Reserve Bank surveys of agricultural
bankers indicate cropland values in many central Corn Belt regions have
declined around three percent year-over-year. Irrigated and ``good
farmland'' values have fallen more slowly or held steady. Through the
third quarter of 2015, overall lender credit quality appears to be
good, though bankers were expecting a decrease in loan performance.
Although off-farm income can provide a substantial cushion, a second
year of reduced commodity prices and farm incomes is constraining
working capital, contributing to an increased demand for non-real
estate credit. While farms overall have strong balance sheets with low
debt-to-asset ratios, a majority of the farm debt is held by farms with
over $500,000 in farm sales. These larger farms, which tend to be more
indebted, are more likely to face liquidity constraints. Here are some
key points.

While overall financial conditions remain strong, farm
financial risk indicators such as the debt-to-asset ratio are
expected to rise slightly in 2015, reflecting increased
financial pressure. Declining farm sector assets primarily
result from a modest decline in farmland value as well as
higher debt. Equity is expected to erode by 4.8 percent, the
first drop since 2009. However, as a matter of perspective,
debt-to-asset ratios are not at levels seen during the farm
financial crisis of the early 1980's.

On an ongoing basis, USDA economists analyze several data sources
to keep abreast of any changes in farm financial health including:

USDA's Economic Research Service (ERS) develops both current
estimates and forecasts of future farm income which are
reported on a semi-annual basis and made available at http://
www.ers.usda.gov/topics/farm-economy/farm-sector-income-
finances/2016-farm-sector-income-forecast.aspx.*
---------------------------------------------------------------------------
* Editor's note: the referenced documents are retained in Committee
file.

USDA conducts the annual Agricultural Resource Management
Survey (ARMS) to access the current financial condition of
farmers and ranchers. The ARMS provides farm-level information
on household income, farm finances including liquidity,
solvency, and debt capacity, and wealth. Results of the ARMS
can be accessed at http://www.ers.usda.gov/data-products/arms-
farm-financial-and-crop-production-practices/tailored-reports-
---------------------------------------------------------------------------
farm-structure-and-finance.aspx.*

USDA staff utilize Federal Reserve Bank surveys to access
the availability of credit to farmers. (See, for example:
https://www.kansascityfed.org/research/indicatorsdata/
agcreditsurvey/articles/2016/5-12-2016/banker-comments-10th-
district-4-12-2016.) Also, internal data on participation in
direct and guaranteed loan programs provides information on
farmers currently receiving FSA loans as well as those with
loans outstanding.*

Examples are listed below of recent analyses undertaken by USDA
which have utilized these data sources to look at the challenges
farmers may face in securing credit:

Mounting Pressure in the U.S. Farm Sector, Federal Reserve
Bank of Kansas City March 2016. http://www.kansascityfed.org/
research/agriculture/agoutlook/articles/mounting-pressure-in-
us-farm-sector.*

America's Diverse Family Farms: 2015 Edition, USDA, Economic
Research Service, December 2015. http://www.ers.usda.gov/
publications/eib-economic-information-bulletin/eib-146.aspx.*

Changing Structure, Financial Risks, and Government Policy
for the U.S. Dairy Industry, ERR-205, U.S. Department of
Agriculture, Economic Research Service, March 2016. http://
www.ers.usda.gov/publications/err-economic-research-report/
err205.aspx.*

Annual Report on Term Limits for FSA's Direct Loan Program.
USDA, Farm Service Agency, September 2015. http://
www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/NewsRoom/
eFOIA/pdfs/term_limits_report_Sept_2015.pdf.*

Question 2. Secretary Vilsack, last year you were asked about the
sterile fruit fly production facility in Edinburg, Texas, and you
responded that the facility was in a category of USDA facilities in
most need of repair. How much has USDA requested in the 2017 budget to
renovate or replace this facility?
Answer. While USDA has not requested any specific funding in the
2017 budget to replace this facility, APHIS is reviewing the condition
of all of its facilities for consideration in future planning.

Question 3. Secretary Vilsack, 2 weeks ago when we met with EPA
Administrator McCarthy, several of our questions related to the
willingness of EPA to consult with USDA when developing regulations.
The Administrator went to great lengths to suggest that the
relationship between EPA and USDA is a positive one, but failed to
provide any concrete examples of how those consultations resulted in
significant changes to EPA's proposals.
Can you tell us how it is that EPA's consultation with USDA on the
revised worker protection standard rule resulted in the inclusion of
the designated representative provision? This provision was not in the
proposed rule, nor was it in the final rule submitted to the House
Agriculture Committee last May, yet it was in the final rule published
later in the summer.
Answer. In addition to USDA comments provided to the Office of
Management and Budget (OMB) consistent through the interagency review
process governed by Executive Order 12866, the worker protection
standard rule required formal consultation between EPA and USDA under
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). This
FIFRA process between EPA and USDA was undertaken prior to OMB 12866
review. Comments submitted during the interagency review process are
provided to the Office of Information and Regulatory Affairs (OIRA) and
are considered pre-decisional and deliberative. OIRA then incorporates
those comments into the materials provided to the rulemaking agency or
department.

Question 4. Mr. Secretary, what comments did you provide EPA and
the Army Corps on the WOTUS rule during the interagency review? Will
you provide the Committee with specific comments that USDA provided on
the rule? Further, and perhaps more importantly, do you think EPA and
the Army Corps took into consideration USDA concerns? What evidence do
you have that they actually took any of USDA's concerns into
consideration?
Answer. USDA provided comments on the Clean Water Rule to the
Office of Management and Budget (OMB) from October 2013 through May
2015 consistent with the interagency review process governed by
Executive Order 12866. Comments submitted during the interagency review
process are provided to the Office of Information and Regulatory
Affairs (OIRA) and are considered pre-decisional and deliberative. OIRA
then incorporates those comments into the materials provided to the
rulemaking agency or department.
The final rule reflects USDA input and concurrence through both
informal and EO 12866 interactions. The final rule includes important
agricultural provisions, such as waters being used for normal farming,
ranching and silvicultural activities are not considered categorically
jurisdictional as adjacent waters. The final rule also reflects
longstanding EPA and Army Corps practices on agricultural land, such as
providing that waters of the United States do not include artificially
irrigated areas that would revert to dry land should irrigation cease.

Question 5. Secretary Vilsack, in recent years, EPA has had to rule
on several waiver requests to the Renewable Fuel Standard (RFS). Their
recent adjustments to the RFS have basically reflected current market
conditions. This band aid approach is not sustainable, and it is
obvious that the RFS needs to be reformed. Do you have any
recommendations on how the RFS can be improved? Do you think another
agency or department, other than EPA, would be better suited to handle
the RFS waiver process? Could USDA handle this process?
Answer. The Clean Air Act requires the Environmental Protection
Agency (EPA) to set the RFS volume requirements annually. Prior to the
EPA setting the standards through a notice-and-comment rulemaking
process with opportunity for public comment, USDA meets with the EPA
and provides data and market information as part of the process in
determining proposed and final volumes. In testimony before the Senate
Energy and Public Works Committee, EPA indicated their plan to return
to timelier rule makings that will provide more certainty for
participants. USDA will continue to provide information and feedback as
the rule making process continues.

Question 6. The Department originally estimated that Conservation
Compliance would affect a very limited number of producers. No one was
supposed to be made ineligible in 2016. Can you confirm that 100% of
producers who want to buy insurance in 2016 will not be made ineligible
because of conservation compliance issues?
Answer. Conservation compliance only impacts the ability of
producers to receive premium support and does not impact producers'
eligibility to purchase crop insurance. However, some producers may
have made the choice to forego premium support in order not to comply
with conservation compliance. RMA worked with NRCS, FSA, our private
partners, and commodity groups to inform farmers and ranchers about the
new conservation compliance requirements. Any farmer or rancher that
did not have an AD-1026 on file received three letters and at least one
phone call. As a result, over 98 percent of crop insurance customers
complied with the provisions. Most of the remaining two percent are
likely retired, deceased, or operating under a different entity. RMA
has implemented several exemptions to ensure beginning farmers and
those who are new to USDA programs, as well as those that have formed
new entities, do not lose premium subsidy. To date, over 1,000
exemptions have been granted by RMA. In addition, FSA has granted 24
individuals and entities relief for timely filed AD-1026 due to
extenuating circumstances so far for reinsurance year 2016.

Question 7. Secretary Vilsack, your testimony recognizes six
biofuel refineries funded through USDA energy programs producing
advanced biofuels. Are any of these facilities producing advanced
biofuels on a commercial scale? What other products are they producing?
Answer. All six biorefineries are expected to produce advanced
biofuels on a commercial scale. One of the biorefineries will produce
engineered biochar in addition to advanced biofuel and another will
produce amino acids and alanine in addition to advanced biofuel.

Question 8. Secretary Vilsack, in a Memorandum of Understanding
(MOU) between USDA, the Department of Energy, and the Department of the
Navy, USDA pledged $170 million of CCC funds towards developing and
supporting the commercial biofuel industry, particularly for the use in
national defense. Can you tell me (1) what is the specific authority,
other than the very broad CCC Charter Act authority, you used to
obligate such funds, and (2) how much of the CCC funds have been spent
to date and on what--did this money go towards promoting feedstocks or
was it used for capacity building?
What is the current difference in price that USDA is paying between
the price per gallon for conventional fuels and these biofuels? Does
the Department have procedures in place to control expenditures when
energy prices drop, when prices for conventional fuels are
significantly lower than they have been historically? With the current
price levels for conventional fuels, are there procedures that prevent
USDA from covering a disproportionate share of the cost of alternative
fuels for the Department of Defense's alternative fuel purchases?
Answer. Farm-to-Fleet was announced in December 2013 and
incorporates the acquisition of biofuel blends into regular Department
of Defense (DOD) domestic solicitations for jet engine and marine
diesel fuels. The Navy seeks to purchase JP-5 and F-76 advanced drop-in
blended biofuels ranging from a minimum blend of ten percent to a
maximum blend of 50 percent ethanol with conventional fuels. The
Defense Logistics Agency Energy (DLA Energy), which awards fuel
contracts on behalf of the Navy, is responsible for announcing
solicitations, evaluating and awarding contracts, and overseeing fuel
procurement and delivery. DLA Energy determines which fuels are cost
competitive and makes final determinations on procurement.
The Credit Commodity Corporation (CCC) makes assistance available
through Farm-to-Fleet to eligible biofuel suppliers that successfully
bid in a DOD solicitation for jet engine and marine diesel fuels. A
supplier must use feedstocks that are renewable and produced in the
United States in order to be awarded a contract under Farm-to-Fleet.
To date, DLA Energy has awarded one contract under the Farm-to-
Fleet program. That contract requires AltAir Fuels to deliver 77.66
million gallons of a marine diesel biofuel blend at a price of $2.1544
per U.S. gallon. DLA Energy and CCC share the cost for this fuel--to be
paid when AltAir delivers the fuel to the Navy--with DLA Energy paying
$1.995825 per U.S. gallon and CCC paying $0.158575 per U.S. gallon.
CCC's total commitment of funds under the AltAir agreements is
approximately $12.315 million. The amount remaining under the original
MOU, after adjusting for years that there was sequestration, is
approximately $153.7 million. The MOU is still valid, and this amount
remains available for use under the MOU.
No CCC funds have been used for capacity building, and funds are
not tied to specific facilities.

Question 9. Regarding last year's outbreak of avian influenza,
indemnification payments are currently calculated on the 10 year
average for the years 2002 through 2011. Data was available from last
year for the years 2003 through 2012, but it was not used by USDA. Why
is APHIS not relying on the most recent BEA data for the 10 year
average of undistributed corporate profits for farms and food and
beverage and tobacco products industries?
Answer. The updated 2012 Bureau of Economic Analysis (BEA) data,
which is updated once a year, came out after the outbreak had started.
APHIS used the most recent data available at the beginning of the
outbreak.

Question 10. Secretary Vilsack, what measures is APHIS taking to
provide indemnity payments for HPAI on a uniform basis? For example,
how does APHIS decide when it updates its indemnity formula
assumptions? Further, how does APHIS establish the cutoff point for
farmers receiving indemnity under an old versus updated indemnity
calculation? And, Mr. Secretary, what has been APHIS' policy with
respect to indemnity payments for contract farmers to date?
Answer. When the 2014-2015 Highly Pathogenic Avian Influenza (HPAI)
outbreak began, APHIS realized that it did not have specific authority
to provide indemnity payments to contract growers. APHIS developed an
interim rule that now allows the agency to pay contract growers that is
modeled after the split that already existed in the Agency's
regulations for Low Pathogenic Avian Influenza (LPAI). APHIS has
examined the indemnity calculator and revised it based upon the input
it has received from industry. For example, APHIS increased the number
of weeks' worth of eggs for which it would provide compensation based
upon updated data it received from the poultry industry. In that case,
APHIS provided, to ensure uniformity, retroactive indemnity payments to
producers who had been affected during the outbreak. As USDA considers
additional changes to how it determines values for indemnity payments,
the Department will make a decision on when these changes become
effective. The level of data currently available and how the changes
can be made in a uniform manner are some of the considerations that
factor into this decision.

Question 11. How does APHIS expect to change its HPAI payment
policies going forward under the recently proposed Interim Rule (APHIS-
2015-0061) regarding how indemnity payments are paid to owners versus
contractors? Further, does APHIS expect to revise its HPAI
indemnification formula in light of the recently proposed Interim Rule
(APHIS-2015-0061)?
Answer. The interim rule creates a formula that will allow APHIS to
split such payments between poultry and egg owners and parties with
which the owners enter into contracts to raise or care for the eggs or
poultry based on the proportion of the production cycle completed.
APHIS is reviewing its indemnity formula, but the overall indemnity
determination is separate from the interim rule on the allocation of
the total indemnity between the owner and the contact grower.

Question 12. How have APHIS' HPAI indemnity payment practices
differed between farmers affected by HPAI versus those affected by Low
Pathogenic Avian Influenza?
Answer. Prior to the Interim Rule, APHIS was limited in its ability
to pay contract growers as the authority for payments for HPAI
indemnity were limited to those who actually own the bird. Under the
LPAI regulations, APHIS did have the authority to provide split
payments to both owners and contract growers. The Interim Rule gave
APHIS the same authority for HPAI as it previously had for LPAI to
allow a split of indemnity payments in situations where owners had a
contract grower raising poultry.

Question 13. As recently as last March, the Farm Service Agency
assumed the fair market value for laying hens to be $19.61 per bird
under the Livestock Indemnity Program, while at the same time, APHIS
was only assuming a fair market value of just over $4 per bird for its
HPAI payments. How do you explain and justify such a significant
disparity between the determinations of the two agencies?
Answer. APHIS indemnity payments and FSA Livestock Indemnity
Program payments are fundamentally different. For APHIS, the purpose of
indemnity for HPAI is to encourage quicker disease reporting to help
the Agency stamp out or stop the spread of the disease, by paying
producers for the destruction of layers as part of the disease response
efforts. Payments under LIP reflect weather-related disasters, and thus
the calculation of a gross value for layers recognizes that often the
disaster has destroyed the physical facilities in which capital-
intensive layer production occurs. As such, producers are implicitly
compensated for costs incurred while production is not occurring
because of the disaster, which can be many months until facilities are
rebuilt, bird population restored, and production begun.

Question 14. Secretary Vilsack, at our July 22nd oversight hearing
last year, my colleague Mr. Lucas asked how USDA had spent the $100
million in Title I implementation funding we included in the farm bill.
At the hearing, you stated that you would provide a written breakdown
of how that money was spent, but the Committee has not received that
from USDA. Can you provide us with a detailed accounting of how that
money was spent?
Answer. The 2014 Farm bill provided $100 million in mandatory
funding for the Farm Service Agency (FSA) to implement programs under
Title I. The farm bill funding was subject to sequestration,
accordingly, the amount of funding available to FSA after sequestration
was $95.2 million. Funding has been used to hire temporary employees;
develop educational and information technology tools for the
implementation of Agriculture Risk Coverage (ARC), Price Loss Coverage
(PLC), and the Noninsured Disaster Assistance Program (NAP); support
operational costs, i.e., travel and training for temporary staff
implementing these programs; and conduct outreach, through cooperative
agreements, with universities and state extension services. As of
September 30, 2015, $59.8 million has been obligated as follows:

----------------------------------------------------------------------------------------------------------------
Obligations through 12/31/ Planned Obligations for 1/
Item 2015 1/16 through 9/30/2016 Total Budget Authority
----------------------------------------------------------------------------------------------------------------
Temporary Employees/Overtime $29,945,695 $20,697,241 $50,642,936
Travel/Training $596,905 $6,078,485 $6,675,390
Operating Expenses $1,681,620 $2,908,652 $4,590,272
Information Technology $21,556,587 $5,753,606 $27,310,193
Extension and Education $5,994,319 $5,681 $6,000,000
Activities
-------------------------------------------------------------------------------
Total......................... $59,775,126 $35,443,665 $95,218,401
----------------------------------------------------------------------------------------------------------------

Question 15. Mr. Secretary, there is a timeline included in the
June 30 and September 30 ACRSI reports the Committee received. Have
there been any changes to this timeline since those reports were
submitted? Can you give us an updated timeline of ACRSI, and when do
you envision it will be completed?
Answer. Since September 30, 2015, there are no changes to the
timeline included in the ACRSI report submitted by FSA to the
Committee. Planning for the 2016 Spring Expansion 2016 is currently
underway and on track for deployment in May 2016.

Question 16. As part of the 2014 Farm Bill, USDA was instructed to
inform the House and Senate Agriculture Committees on whether it had
reached ``substantial completion'' of ACRSI. The report submitted to
the Committees on June 30 indicated that so far, this program is only
operating in ``pilot'' form in 30 counties in Illinois and Iowa. The
subsequent report submitted on September 30 outlined a phased expansion
to 15 states in the fall of 2015. It has been reported that it will be
rolled out nationwide for 13 crops in 2016. Is this correct, and if so,
will this rollout be in the spring or fall? If this funding is granted
by the House and Senate Agriculture Committees, how do you intend to
use the remaining $10 million tied to substantial completion of ACRSI?
Answer. The 2016 Spring Expansion expands ACRSI to include 13 crops
in all 50 States. USDA is currently evaluating lessons learned and
obtaining stakeholder feedback and will use this information, in
addition to results of the 2016 Spring Expansion, to identify and
prioritize additional functionality needed to determine the most-
effective use of the remaining $10 million. This information will be
provided to the House and Senate Agriculture Committees later this
summer, following the completion of the spring acreage reporting
period.

Question 17. In the current dispute over the sale of Pork. The
Other White Meat, has USDA evaluated what the impact of the Court of
Appeals decision will be on other check-off programs under the
management of USDA?
Answer. This case remains in litigation, and it would be premature
to discuss its impacts.

Question 18. Please describe the decision-making process that USDA
undertook to understand these considerations prior to entering into
settlement negotiations, and the specific determination that USDA
reached.
Answer. USDA is not discussing settlement with Plaintiff Humane
Society of the United States (HSUS). HSUS and USDA previously discussed
settlement in the fall of 2015, but those discussions concluded with a
joint filing with the Court on December 23, 2015, and are not ongoing.
In that joint filing, USDA announced its plans to conduct a review and
valuation of the four trademarks, and HSUS stipulated to dismissal with
prejudice of a significant part of its lawsuit. On April 20, 2016, USDA
decided to approve, based on the valuation of the four trademarks by an
independent expert and other factors, continuing $3 million payments
under the 2006 asset purchase agreement between the National Pork Board
(Board) and the National Pork Producers Council (NPPC). As part of its
review, USDA directed the Board to contract for an independent
valuation of the current value of the trademarks. USDA, in consultation
with the Board, identified Stout Risius Ross (SRR) as the most
qualified company. SRR concluded that, as of January 1, 2016, the
investment value of the four trademarks is between $113 million and
$132 million using the cost approach, one of several acceptable and
recognized approaches for determining valuation.
Consistent with the district court's direction, HSUS and NPPC
submitted valuations for consideration as part of the review. After
evaluating the valuations submitted by HSUS and NPPC, USDA deemed SRR's
range of $113 million to $132 million to be the most reliable estimate
of the value of the trademarks. On April 20, 2016, the Board, NPPC, and
HSUS were notified of USDA's decision to approve the $3 million payment
under the terms of the agreement.

Question 19. Please describe how USDA views the National Pork
Board's independence and autonomy under the Pork Promotion, Research
and Consumer Information Act of 1985 (``Pork Act'')?
Answer. The Board administers the Pork Checkoff Program under the
Pork Act, with oversight from USDA. This means that the Board
determines projects in accordance with the Pork Promotion, Research,
and Consumer Information Act of 1985 (7 U.S.C. 4801-4819) (Pork Act)
and Pork Promotion, Research, and Consumer Information Order (7 CFR
1230) (Order) issued thereunder. It is first the responsibility of the
Board to determine the projects to fund and submit them to USDA for
approval. It is then within USDA's oversight role to ensure that
activity funded with checkoff dollars is in accordance with the Pork
Act, Order and regulations, and USDA and government policies and
guidelines.

Question 20. What are the respective roles of the National Pork
Board and USDA under the Pork Act?
Answer. The Pork Act authorizes the Board to administer the Pork
Checkoff Program, including entering into contracts and engaging in
plans and projects--all within the oversight authority of the Secretary
of Agriculture.

Question 21. Please describe, in detail and with citations to the
specific legal authority, the Secretary of Agriculture's powers under
the Pork Act, or otherwise, to direct the National Pork Board to
undertake specific actions?
Answer. The Pork Promotion, Research, and Consumer Information Act
of 1985 (7 U.S.C. 4801-4819) states that the Secretary has oversight of
the Board and all expenditures. All Board funding expenditures are
subject to advance approval by USDA. For example, section 1619(a)(2) of
the Pork Act states that the ``Board shall prepare and submit to the
Secretary, for the approval of the Secretary, a budget for each fiscal
year . . .'' Section 1619(a)(3) states that ``[n]o plan, project, or
budg-
et . . . may become effective unless approved by the Secretary.''

Question 22. If the National Pork Board reaches a decision to honor
its current contractual arrangement with the National Pork Producers
Council for the sale of Pork. The Other White Meat, what authority does
USDA hold to reverse or otherwise deny that action?
Answer. On April 20, 2016, USDA decided to approve continuing
annual payments of $3 million under the terms of the agreement.

Question 23. If the National Pork Board decides to end the review,
or otherwise indicates that it wants to stop settlement talks with the
Plaintiffs, will USDA honor that desire?
Answer. Settlement talks are not ongoing with the Plaintiffs, and
the review has concluded with USDA's decision to approve continuing
annual payments of $3 million under the terms of the agreement.

Question 24. If the National Pork Board decides, after the review
has been conducted, to continue to honor the contract for the sale of
the Pork. The Other White Meat, will USDA allow that?
Answer. On April 20, 2016, USDA decided to approve continuing
annual payments of $3 million under the terms of the agreement based on
its review.

Question 25. USDA has ordered the National Pork Board to retain a
trademark valuation firm and begin the process of reviewing the value
of the Pork. The Other White Meat trademarks. Who is paying for the
valuation to be conducted? Who provided the names of the trademark
evaluation firms? Who selected the vendor?
Answer. The Board paid for the valuation. USDA provided a list of
potential contractors to the Board and, after discussions with the
Board, identified Stout Risius Ross (SRR) as the most qualified
company.

Question 26. Once the trademark valuation report is submitted to
the USDA, who will undertake the ``review'' of the Pork. The Other
White Meat Purchase Agreement? Who are the senior officials that will
ultimately make a decision on whether to continue performing under the
purchase agreement or not? Does the authority to make that decision
rest solely with the National Pork Board? If not, why not?
Answer. SRR submitted its trademark valuation report to USDA on
March 30, 2016. After reviewing the valuation and other relevant
materials, the Agricultural Marketing Service, exercising oversight
authority delegated by the Secretary, made the decision to approve
continuing annual payments of $3 million under the terms of the
agreement on April 20, 2016.

Question 27. On February 24, 2016, Secretary Vilsack testified to
this Committee that the decision to enter into a settlement agreement
with the Humane Society of the United States and other Plaintiffs/
Petitioners was (1) made in concert with the pork industry; (2) that
the pork industry has been involved in discussions concerning the
settlement and ``review''; (3) that the industry ``is now working with
the Humane Society'' to ``figure out a way to do this that is
satisfactory to all parties'' and to resolve the litigation through
settlement discussions.
Please state who the specific organizations and/or individual
representatives of the pork industry are that Secretary Vilsack
referred to in his testimony?
Answer. Soon after HSUS filed suit, USDA representatives reached
out by telephone to Board staff to discuss the lawsuit and potential
options and have held additional meetings to update the Board since
that date. Further, USDA and DOJ attorneys have had discussions with
attorneys representing NPPC.

Question 27a. Please provide the Committee with copies of any and
all communications, including but not limited to phone records, e-
mails, notes, letters, calendar appointments, or other filings between
USDA or the Department of Justice and the Plaintiff/Petitioners
regarding the decision to settle this lawsuit.
Answer. There has been no settlement of the lawsuit and settlement
talks are not ongoing with the Plaintiffs. The review has concluded
with USDA's decision to approve continuing annual payments of $3
million under the terms of the agreement.

Question 27b. Please provide the Committee with copies of any and
all communications, including but not limited to phone records, e-
mails, notes, letters, calendar appointments, or other filings between
USDA or the Department of Justice and the pork industry regarding the
desire of the pork industry to settle this lawsuit as claimed by
Secretary Vilsack.
Answer. Since the inception of the litigation, USDA has provided
updates to Board staff and gathered information regarding the
trademarks from the Board. In addition, USDA has invited Board
representatives to the Court hearings. To USDA's knowledge no Board
staff or Board members attended the hearings.

Question 28. On March 5, 2016, at Pork Forum, both the National
Pork Board and the National Pork Producers Council unanimously passed
resolutions, cosponsored by every state delegate body in attendance,
which strongly disagree with the decision of USDA to enter into a
settlement agreement with HSUS and with USDA's decision to direct the
National Pork Board to conduct a review of the Pork. The Other White
Meat sale.
Does USDA recognize any organizations other than the National Pork
Board, the National Pork Producers Council, or the various state Pork
Producer Councils as official representatives of the U.S. pork
industry? If so, who or what are these organizations?
Answer. USDA recognizes a number of pork organizations, including
those listed and many others, as representing the interests of members
of the U.S. pork industry. However, there is no such specific list of
``official representatives.'' Specifically related to the Pork Checkoff
Program, USDA only officially recognizes State Pork Producer
Associations as being eligible to nominate producers to the Board and,
besides the Board itself, directly receive Pork Checkoff collections.

Question 29. In light of the overwhelming opposition of the U.S.
Pork industry to USDA's unilateral decision to cease defending the
National Pork Board's contract and to enter into settlement discussions
with HSUS and other plaintiff/petitioners, what authority does the
National Pork Board hold to end the ``review'', or otherwise indicate
that it wants to stop settlement talks with the Plaintiffs, and defend
and honor its contract for the purchase of Pork. The Other White Meat?
Answer. Settlement talks are not ongoing with the Plaintiffs, and
the review has concluded with USDA's decision to approve continuing
annual payments of $3 million under the terms of the agreement.

Question 30. The National Pork Board's March 5, 2016 advisement
states that USDA ``entered into settlement discussions with HSUS. While
USDA has not shared the terms of settlement being discussed with NPB,
USDA has withheld approval of the annual payment to NPPC in 2016.''
Please explain Secretary Vilsack's testimony that settlement was made
in concert with the pork industry and that the pork industry had been
engaged in the settlement discussions with HSUS?
Answer. USDA is not discussing settlement with HSUS. HSUS and USDA
previously discussed settlement in the fall of 2015, but those
discussions concluded with a joint filing with the Court on December
23, 2015, and are not ongoing. In that joint filing, USDA announced its
plans to conduct a review of the trademark valuation, and HSUS
stipulated to dismissal with prejudice of a significant part of its
lawsuit. On April 20, 2016, USDA approved continuing annual payments of
$3 million under the terms of the agreement based on its review of the
valuation and other factors. The Board, HSUS, and NPPC were notified of
the decision.

Question 31. The National Pork Board's March 5, 2016 advisement
states that ``USDA has directed NPB to contract for another valuation
of the trademark and expects to make a determination regarding approval
of the 2016 payment by the middle of June.'' Please explain Secretary
Vilsack's testimony that the pork industry requested the settlement to
be entered into and the valuation of the trademarks value to be
conducted?
Answer. USDA directed the Board to contract with an independent
expert to determine the present-day value of the trademarks. NPPC
specifically asked to be allowed to submit materials for consideration,
and USDA invited both NPPC and HSUS to submit such materials. Both
parties submitted valuations.

Question 32. Considering the apparent conflict between the pork
industry's decision to vigorously defend the contract and USDA's
decision to enter into a settlement agreement with HSUS, is the
National Pork Board authorized to retain independent counsel to
represent the interests of that organization and the U.S. pork
industry? If not, why not?
Answer. USDA, the only defendant named in the lawsuit, has approved
continuing annual payments of $3 million under the terms of the
agreement. The agency is prepared to defend that decision going
forward.
Question Submitted by Hon. Dan Benishek, a Representative in Congress
from Michigan
Question. During the recent, ``State of the Rural Economy''
hearing, we discussed several aspects of the Forest Service budget.
Specifically, I would like to better understand the percentage of the
USDA-FS budget utilized for land acquisition each year over the last 10
years, as well as the amount in dollars.
In addition, please provide a breakout, if possible, of where the
land acquisition projects were funded in FY16, as well a short
justification for each project.
Answer. The percentage of the Forest Service appropriations
dedicated to land acquisition over the previous 10 years is, on
average, less than one percent. The table below includes the percentage
of the agency's budget utilized for land acquisition each year over the
last 10 years, as well as the specific dollar amount.

----------------------------------------------------------------------------------------------------------------
USDA Forest Service Land Adjustment Percentage of Land
Fiscal Year Appropriations Allocation Adjustment Appropriations
----------------------------------------------------------------------------------------------------------------
FY16 $5,680,346,000 $64,601,000 1.1
FY15 $5,073,246,000 $48,666,000 0.9
FY14 $4,896,611,000 $44,654,000 0.9
FY13 $4,556,651,000 $50,666,000 1.1
FY12 $4,845,876,000 $53,701,000 1.1
FY11 $5,096,746,000 $33,982,000 0.6
FY10 $5,315,256,000 $64,822,000 1.2
FY09 $6,107,566,000 $50,866,000 0.8
FY08 $5,039,428,000 $43,091,000 0.8
FY07 $4,697,796,000 $46,667,000 0.9
----------------------------------------------------------------------------------------------------------------

The table below includes a breakout of where the land acquisition
projects were funded in FY16, as well a short justification for each
project.

------------------------------------------------------------------------
National Forest/
Amount State Project Justification
------------------------------------------------------------------------
$1,000,000 AZ Coconino National Fossil Creek: Protect
Forest watersheds, minimize
soil erosion, and
rehabilitation of
landscape
$2,800,000 CA Shasta-Trinity Castle Crags: climate
National Forest change resilience and
watershed protection
$200,000 CA Pacific Crest California Southwest
National Scenic Desert: recreational
Trail access and viewshed
$1,100,000 CA Eldorado National Royal Gorge:
Forest recreational access to
wilderness area;
diverse habitat for
wildlife facing climate
change
$700,000 CA Six Rivers Hurdygurdy: recreational
National Forest access, watershed
protection and wildlife
habitat
$800,000 CO Roosevelt Toll Properties:
National Forest wilderness access,
watershed protection
for drinking water
supply for Denver, and
wildlife habitat
protection
$5,000,000 CO Rio Grande Upper Rio Grande: water,
National Forest history, and working
lands anchored by the
Rio Grande River
$3,900,000 FL Osceola National Florida-Georgia Longleaf
Forest Pine Initiative: Red-
cockaded Woodpecker
habitat and fresh
drinking water supplies
$1,625,000 ID Caribou-Targhee High Divide: public
National Forest access to existing
Federal land, and
protects animal and
fish migration
corridors linking
Yellowstone National
Park to Idaho and the
Frank Church Wilderness
in Montana.
$425,000 ID Frank Church High Divide: public
River of No access to existing
Return Federal land, and
Wilderness protects animal and
fish migration
corridors linking
Yellowstone National
Park to Idaho and the
Frank Church Wilderness
in Montana.
$2,500,000 ID Sawtooth National High Divide: public
Forest access to existing
Federal land, and
protects animal and
fish migration
corridors linking
Yellowstone National
Park to Idaho and the
Frank Church Wilderness
in Montana.
$2,300,000 ID Sawtooth National High Divide: public
Forest access to existing
Federal land, and
protects animal and
fish migration
corridors linking
Yellowstone National
Park to Idaho and the
Frank Church Wilderness
in Montana.
$1,800,000 MI Ottawa National Great Lakes Northwoods:
Forest protection of watershed
of Lake Superior,
drinking water supply
and recreation
$2,175,000 MN Chippewa National Minnesota Northwoods:
Forest recreational access and
watershed protection
$515,000 MN Superior National Minnesota Northwoods:
Forest recreational access,
wildlife habitat and
watershed protection
$2,070,000 MO Mark Twain Current River:
National Forest recreation access to
Current River, wildlife
habitat and watershed
protection
$1,525,000 MT Beaverhead- High Divide: public
Deerlodge access to existing
National Forest Federal land, and
protects animal and
fish migration
corridors linking
Yellowstone National
Park to Idaho and the
Frank Church Wilderness
in Montana.
$200,000 MT Beaverhead- High Divide: public
Deerlodge access to existing
National Forest Federal land, and
protects animal and
fish migration
corridors linking
Yellowstone National
Park to Idaho and the
Frank Church Wilderness
in Montana.
$1,250,000 NC Pisgah National North Carolina
Forest Threatened Treasures:
recreational access,
viewshed and water
protection
$440,000 NC Uwharrie National North Carolina
Forest Threatened Treasures:
recreational access and
wildlife habitat
$840,000 OR Umatilla National Pacific Northwest
Forest Streams: commercial and
recreational anadromous
fisheries and wildlife
habitat
$550,000 OR Wallowa-Whitman Pacific Northwest
National Forest Streams: commercial and
recreational anadromous
fisheries and wildlife
habitat
$1,635,000 TN Cherokee National Tennessee Mountains:
Forest recreational access and
healthy watersheds
$2,320,000 UT Uinta-Wasatch- Wasatch Watersheds-
Cache National Bonneville Shoreline
Forest Trail: access and
protect viewshed
$1,990,000 VA/WV Jefferson Rivers of the
National Forest Chesapeake: protection
of water quality
upstream of the
Chesapeake Bay
$3,000,000 WA Pacific Crest NST National Trails System:
public access and
viewshed protection
$1,000,000 WY Bridger-Teton Upper Gros Ventre--Kohl:
National Forest recreational access to
the Wild and Scenic
Gros Ventre River;
wildlife corridor
$1,025,000 WY Bridger-Teton Greater Yellowstone
National Forest Area: access to
recreation and cultural
sites; protection of
wildlife corridor
-------------------
$44,685,000...
------------------------------------------------------------------------

In addition, land acquisition funding is used for ``cash
equalization'' in cases where land values are not equivalent and the
Forest Service includes money along with the land exchanged. Additional
land acquisition funds are used to acquire critical inholdings as well
as to acquire key parcels for priority recreational access as follows:

------------------------------------------------------------------------

------------------------------------------------------------------------
$250,000 Cash Equalization (Up to 20 exchanges as needed)
$2,000,000 Critical Inholdings 17 parcels)
$8,000,000 Priority Recreational Access (5 parcels)
$9,666,000 Administrative Costs
-------------------
$19,916,000.....
------------------------------------------------------------------------

Questions Submitted by Hon. Steve King, a Representative in Congress
from Iowa
BEA Data Questions
Question 1. For the first deduction from gross margin (currently
84%), why is APHIS not relying on the most recent BEA data for the 10
year average of undistributed corporate profits for farms and food and
beverage and tobacco products industries?
Answer. The updated 2012 BEA data, which is updated once a year,
came out after the outbreak had started. APHIS used the most recent
data available at the beginning of the outbreak.

Question 2. Why is APHIS deducting ``dividends'' from gross margin
to arrive at retained earnings?
Answer. APHIS is not deducting dividends from gross margins to
arrive at retained earnings. APHIS uses the Bureau of Economic Analysis
estimates of undistributed corporate profits, commonly called retained
earnings, as a basis to determine the amount of gross margin that is
allocated back to the bird value. Undistributed corporate profits do
not include dividends, because no money is invested back into the
capital assets of the company--including the birds--until after
individual owners and taxes are paid.

Question 3. Exactly what items is APHIS accounting for by relying
on BEA data for this deduction?
Answer. APHIS references BEA data not to make deductions, but to
determine what portion of the operating margin historically would
become retained earnings by farms and food manufacturing firms.
Additional Deduction Questions
Question 4. Why does the indemnification formula include an
additional deduction of 6% to cover debt retirement, capital
improvements, research and development, and asset valuation?
Answer. In cases of egg-laying hens, these formulas are used to
determine the amount of net income that ultimately would be used to
improve the asset (or bird) value. In doing so, historical information
from the BEA shows that \1/5\ of net income becomes retained earnings,
and the Agency believes that about \1/2\ of retained earnings would be
used to increase asset value.

Question 5. On what data is APHIS relying to arrive at a deduction
amount equal to 6%?
Answer. APHIS uses BEA historical data to make its determinations
about the asset value of egg-laying hens.
Inconsistent Indemnity Payments Questions
Question 6. What measures is APHIS taking to provide indemnity on a
uniform basis? For example:
How does APHIS decide when it updates its indemnity formula
assumptions?
Answer. APHIS has previously updated its indemnity calculator when
it has received new information and statistics from viable sources
about its calculations. In the case of the 2014-2015 outbreak, APHIS
updated the calculator to reflect additional information, presented by
industry, about the length of time for which egg-laying hens produce
eggs. For the sake of uniformity, APHIS provided retroactive indemnity
payments to producers who had been affected during the outbreak.

Question 6a. How does APHIS establish the cutoff point for farmers
receiving indemnity under an old versus updated indemnity calculation?
Answer. In the example from the previous answer, APHIS provided
retroactive payments to producers when it updated the indemnity
calculator. As USDA considers additional changes to how it determines
values for indemnity payments, the Department will make a decision on
when these changes become effective. The level of data currently
available and how the changes can be made in a uniform manner are some
of the considerations that factor into this decision.

Question 7. What has been APHIS' policy with respect to indemnity
payments for contract farmers to date?
Answer. APHIS was limited in its ability to pay contract growers as
the authority for payments for HPAI indemnity were limited to those who
actually own the bird. Under its Low Pathogenic Avian Influenza (LPAI)
regulations, APHIS did have the authority to provide split payments to
both owners and contract growers. APHIS issued an Interim Rule, on
February 9, 2016, which gives APHIS the same authority for HPAI as it
already had for LPAI to allow a split of indemnity payments in
situations where owners had a contract grower raising poultry.

Question 8. How does APHIS expect to change its payment policies
going forward under the recently proposed Interim Rule (APHIS-2015-
0061) regarding how indemnity payments are paid to owners versus
contractors?
Answer. The interim rule creates a formula that allows APHIS to
split such payments between poultry and egg owners and parties with
which the owners enter into contracts to raise or care for the eggs or
poultry based on the proportion of the production cycle completed.

Question 9. Does APHIS expect to revise its indemnification formula
in light of the recently proposed Interim Rule (APHIS-2015-0061)?
Answer. APHIS is considering changes to its indemnification
formula, but not as a result of the Interim Rule.

Question 10. How have APHIS' indemnity payment practices differed
between farmers affected by HPAI versus those affected by Low
Pathogenic Avian Influenza?
Answer. Prior to the Interim Rule, APHIS was limited in its ability
to pay contract growers as the authority for payments for HPAI
indemnity were limited to those who actually own the bird. Under the
LPAI regulations, APHIS did have the authority to provide split
payments to both owners and contract growers. The Interim Rule gave
APHIS the same authority for HPAI as it previously had for LPAI to
allow a split of indemnity payments in situations where owners had a
contract grower raising poultry.
Additional Questions Concerning APHIS's Compensation Process
Question 11. What attempts has APHIS made to produce compensation
equations to compensate all poultry producers, especially turkey
producers?
Answer. APHIS' indemnity compensation formulas account for the
different markets between different segments of the poultry industry.
Turkey producers, for example, are compensated using formulas that
account for the costs of raising turkeys and the market for turkey meat
and products.

Question 12. What attempts has APHIS made to produce protocols to
compensate producers for the full economic cost of the process of
dealing with Avian Influenza outbreaks, including downtime loss while
the flocks are depopulated.
Answer. While we strive to minimize downtime, APHIS will not pay
for downtime losses as these payments would be outside the scope of the
purpose of indemnity. Indemnity is paid to producers to compensate them
for the value of the animals destroyed as part of an animal disease
outbreak and is intended to encourage early reporting and active
participation of producers. Providing downtime loss is more in line
with a traditional disease insurance program.
Questions Submitted by Hon. Jeff Denham, a Representative in Congress
from California
Question 1. The President's budget once again targets the vital
U.S. crop protection program, making drastic cuts and undermining the
program that was laid out in the 2014 Farm Bill. What is USDA doing to
ensure that the farm bill does not get administratively reopened, and
that the program does not get altered in ways that run counter to what
Congress approved?
Answer. Our proposal to reduce the premium subsidy on revenue
coverage that provides protection for upward price movements at harvest
time would provide a savings to the taxpayer, yet still provide
meaningful assistance for the producer. Our proposal to reform
prevented planting coverage would address Office of Inspector General
and the Government Accountability Office findings and would help to
improve program integrity in the prevented planting program. The
proposal represents a proactive response to oversight concerns and
further facilitates an equitable partnership.

Question 2. Despite the Risk Management Agency's (RMA) continued
assertions to the contrary, specialty crop insurance agents have been
financially constrained under the current Standard Reinsurance
Agreement (SRA). They continue to express to me ongoing concerns they
have over the inequities it created.
With a new SRA on the horizon, what efforts will RMA make to reach
out and work with insurance agents to ensure farmers do not face
dwindling coverage options?
Answer. Since 2010, before the current Standard Reinsurance
Agreement (SRA) took effect, the average Administrative and Operating
expense subsidy (A&O) for specialty crops in California increased
significantly--from $1,783 per policy in 2010 to $2,915 in 2015. The
number of crop insurance agents in California has remained stable
throughout this time period.
Also since 2010, the insurance coverage options available to
growers have expanded to include several additional specialty crops,
such as olives and pistachios. Whole Farm Revenue Protection, which
covers virtually any crop, has been enhanced and expanded to all
counties in California. Coverage has also been added for apiculture and
pasture, rangeland, and forage. Revenue coverage has been extended to
oranges, strawberries, and cherries.
The SRA is a financial agreement between the Federal Crop Insurance
Corporation and the Approved Insurance Providers (AIPs) who take risk
on the insurance policies sold. In addition, there are certain aspects
of program delivery included in the SRA that both parties give careful
consideration and due diligence to assure farmers and ranchers are
adequately serviced. In the past when an SRA has been subject to
change, RMA has made such changes available on its website for comment.
As with any potential program change or issue, RMA is open and willing
to listen to comments, suggestions or concerns to assure an efficient
and effective Federal crop insurance program for our nation's farmers
and ranchers.

Question 3. Secretary Vilsack, I often hear concerns from the farm
community about EPA's repeated failure to meaningfully consider USDA's
expertise, advice and opinions, especially during formal interagency
review of pesticides--both conventional and biological.
Please explain how USDA engages with EPA, both formally and
informally, and how you can ensure that engagement becomes more
productive, meaningful, and most importantly, evident to the public.
In particular, can you describe for the extent to which USDA
expertise is being valued and included in EPA's recent actions related
to treated seeds and biopesticide reviews?
Answer. The USDA Office of Pest Management Policy (OPMP) was
established to provide for the effective coordination of agricultural
policies and activities within USDA related to pesticides and of the
development and use of pest management tools, while taking into account
the effects of regulatory actions of other government agencies
including EPA. OPMP works with the staff at EPA's Office of Pesticide
Programs (OPP) to respond to informational requests related to
agricultural pest management. As part of EPA's registration review,
OPMP provides benefits information when dockets open, reviews published
preliminary risk assessments, and provides comments on proposals
presented by EPA on various subjects, including seed treatment,
resistance management, and other topics. We continue our efforts for
more productive, meaningful, and effective engagement. All our comments
are included in the public EPA regulatory dockets. The Directors of
OPMP and OPP interact on a regular basis. However, staff level
interactions occur nearly daily. The Director of OPMP represents USDA
interests in pesticide issues on EPA's Pesticide Policy Dialogue
Committee, which is a federal advisory committee.

Question 4. Secretary Vilsack, in your testimony you touch on how
your agency has been working to address unfair trade barriers and
restrictions that impact ag access to foreign markets. Has your agency
being working with USTR to address the ongoing international trade
issues the U.S. almond industry is facing, particularly with India? If
so, can you elaborate on the progress of your efforts?
Answer. USDA works in collaboration with USTR to address barriers
facing California almond exports. For example, USDA worked with USTR to
lead efforts at bilateral and multilateral levels to address one of the
European Union's pesticide regulations and its impact on U.S.
agricultural exports. Based on these efforts, the Commission took steps
to maintain a pesticide maximum residual level (MRL) for an orchard
treatment widely used by the U.S. almond industry. Our intervention in
this matter protected over $1.9 billion in almond exports to the
European Union, most of which come from California. This intervention
also protected an additional $1 billion in other, non-almond tree nut
exports to the European Union.
With respect to India, at the U.S.-India Trade Policy Forum and
during subsequent travel to India this past fall, USDA Under Secretary
Scuse reinforced USTR's request to eliminate the tariff on in-shell
almonds, which is currently 35 rupees per kilogram (24/pound). USDA
continues to make the argument to India that eliminating the almond
tariff would benefit Indian food processors and consumers, and help
curtail smuggling.
On other issues, USDA and USTR resolved the wholesale and retail
packaging and stickering issue with the Food Safety and Standards
Authority of India (FSSAI). During the October 2015 Trade Policy Forum,
FSSAI clarified that labeling requirements for bulk in-shell almond
shipments can be addressed by stickers at the port of importation,
helping to facilitate U.S. almond exports. USDA continues to request
that FSSAI recognize ``lot ID's'' for entire non-retail consignments
instead of requiring details on individual bins. USDA has been working
closely with Indian Customs officials to ensure that customs documents
(e.g.: No Objection Certificate) are not misused by almond importers to
breach contracts.

Question 5. Secretary Vilsack, in your testimony it is mentioned
that USDA has a goal to publicly share its performances goals and
progress in support of new and beginning farmers. When can the public
expect to see this?
Answer. USDA has created new, Agency Priority Goal (APG) based on
USDA-wide metrics, to increase access and opportunities for Beginning
Farmers and Ranchers (BFR). The goal and associated reports on USDA's
performance are currently available on both the www.usda.gov/newfarmers
and www.performance.gov sites.
This goal states that by September 30, 2017, USDA will increase
access to key BFR programs, which will result in increasing investments
to BFR by a value $5.6 billion over 2 years. Within existing resources,
USDA will expand opportunities for BFR through targeted outreach and
increased technical assistance, resulting in increasing new and
beginning farmer and rancher participation in key programs by 6.6
percent over the goal term. Increased investments to the next
generation of farmers and ranchers will contribute to growing their
value, and support economic development and stability in their
communities, both through increased opportunity and support for
longevity of new operations.
This complements a larger body of work aimed at expanding
opportunities presented by USDA to new and beginning farmers. Over the
past seven years, USDA has engaged its resources to support a strong
next generation of farmers and ranchers by improving access to land and
capital; building new markets and market opportunities; extending new
conservation opportunities; offering appropriate risk management tools;
and increasing our outreach, education, and technical support. As an
example, in October 2015, USDA updated our virtual front door for the
next generation of farmers and rancher to access USDA resources--
www.usda.gov/newfarmers--to serve more diverse audiences and provide
even more connections to supportive programs for new farmers. USDA has
also engaged stakeholders on the critical issue of access to land--a
top challenge identified by beginning farmers and ranchers. The
Department continues to explore additional ways to support the next
generation of farmers and ranchers.
Question Submitted by Hon. Doug LaMalfa, a Representative in Congress
from California
Question. To follow up on my question in regards to the Resource
Advisory Committee (RAC) appointment process, it is important that we
find out why exactly these vacancies are not being filled and how we
can fix this so these RACs can fulfil their responsibilities. You
mentioned there are spots that are not filled due to lack of
categorical requests, such as an engineer. Do you have any flexibility
to waive these criteria requirements in order to expedite the approval
process so members can fulfill their responsibilities? What tools can
you use to help fill these vacancies more rapidly?
Answer. Each Secure Rural Schools Resource Advisory Committee (RAC)
is established pursuant to section 205 of the Secure Rural Schools and
Community Self-Determination Act of 2000 (SRS Act) (16 U.S.C. 7125),
and in accordance with the provisions of the Federal Advisory Committee
Act (FACA), (5 U.S.C., App.2).
In accordance with the SRS Act, each RAC must be comprised of 15
members who provide balanced and broad representation from within each
of three specialized categories of interests required by the Act.
Members also must reside within the state(s) in which the RAC is
organized. To the extent practical, the membership of each of the three
categories must include residents in the vicinity of the National
Forest for which the committee provides advice.
In accordance with the SRS Act, members and replacements are
appointed to 4 year terms or reappointed for an additional 4 years. The
Secretary of Agriculture makes the decision to appoint from among the
qualified candidates submitted.
The requirements for representation are statutory. We do not have
the flexibility to waive the specialized categories for which RAC
members can qualify under the SRS Act. In accordance with the SRS Act,
each RAC shall be comprised of 15 members who provide balanced and
broad representation from within each of the following three categories
of interests specified in the Act:

a. Five persons who represent:

1. Organized labor or non-timber forest product
harvester groups;
2. developed outdoor recreation, off-highway vehicle
users, or commercial recreation activities;
3. Energy and mineral development, or commercial or
recreational fishing interests;
4. Commercial timber industry; or
5. Federal grazing permits or other land use permit
holders or represent non-industrial private forest land
owners within the area for which the committee is
organized.

b. Five persons who represent:

1. Nationally recognized environmental organizations;
2. Regionally or locally recognized environmental
organizations;
3. dispersed recreational activities;
4. Archaeological and historical interests; or
5. Nationally or regionally recognized wild horse and
burro interest groups, wildlife or hunting
organizations, or watershed associations.

c. Five persons who represent:

1. State elected office (or a designee);
2. County or local elected office;
3. American Indian Tribes within or adjacent to the
area for which the committee is organized;
4. Area school officials or teachers; or
5. affected public-at-large.
Question Submitted by Hon. David Rouzer, a Representative in Congress
from North Carolina
Question. Last September, the EPA published Interim Recommendations
for environmental standards and ecolabels for use in Federal
procurement. EPA's recommendation for lumber excludes several credible
standards that are widely used in the United States, including the
Sustainable Forestry Initiative (SFI) and American Tree Farm System
(ATFS) standards. Across the United States, more than 82 million acres
of forestland are certified to either the Sustainable Forestry
Initiative (SFI) or the American Tree Farm System (ATFS). This
represents more than 70 percent of all certified forests in the United
States. In North Carolina, 94 percent of the states certified forests
are managed to SFI or ATFS standards. These forests provide a renewable
timber resource, clean water, wildlife habitats, and numerous other
public benefits. They also support thousands of jobs. I was
disappointed to learn that this recommendation, along with a prior
lumber determination by the Department of Energy, was made without
consultation with the USDA. USDA not only has expertise in forest
management and forest products, but has publicly stated that SFI and
ATFS standards can be used to verify sustainability of forest products.
I am hopeful that USDA will engage with DOE and EPA and work with them
to change their current programs to recognize all three credible forest
certification standards. Can you provide us an update on how you plan
to work with and encourage EPA and DOE to recognize these forest
certification programs for procurement purposes?
Answer. The U.S. Department of Agriculture's (USDA) Natural
Resources and Environment Mission Area has met with EPA's Office of
Chemical Safety and Pollution Prevention to discuss the interim
recommendations. EPA's Standards Executive plans to reach out to the
Sustainable Forestry Initiative (SFI), the American Tree Farm System
(ATFS) and other forestry stakeholders regarding review of forestry
labels and their alignment with Federal policies guiding EPA's use of
voluntary consensus standards and private-sector conformity activities.
USDA also plans to provide relevant, existing analysis to inform EPA's
decision making for the lumber/wood category, going forward.
Questions Submitted by Hon. Dan Newhouse, a Representative in Congress
from Washington
Question 1. Secretary Vilsack, I want to thank you for your work on
GMO labeling and the time you have invested in trying to find a
solution that prevents a potentially devastating patchwork of state and
local labeling laws from taking effect. The House Committee on
Agriculture has also spent a great deal of time working on what we
believe is a strong, bipartisan bill to resolve the patchwork issue--a
bill that was approved by almost \2/3\ of the U.S. House. Can you tell
me what you think will happen if we don't get something enacted before
the July 1st labeling compliance deadline in Vermont?
Answer. As Congress considers the path forward on this complex
issue, I will continue to provide technical assistance to prevent the
potential economic impact of a patchwork of state and local labeling
laws. I am convinced that the segregation systems necessitated by such
state and local labeling laws will have a cost and food companies have
an incentive to pass on as much of this cost to consumers as they can.
Some companies may decide that they want to segregate product for trace
back. Some companies may also want to have separate warehouses,
auditing systems, and the like While there has been progress in the
conversation, I understand an issue remains as to whether or not the
chosen method of providing the product information is useful to the
consumer. Regardless of the potential mechanism (e.g., QR code, 1-800
number, web-based system, etc.), some believe there needs to be an
assessment of whether a substantial number of consumers find the
mechanism useful to determine whether it is desirable to put
information on the package itself. To address the overarching issue,
congressional action is needed.

Question 2. Secretary Vilsack, to follow up on a question I asked
during the hearing with you, last September, EPA published interim
recommendations for environmental standards and ecolabels for use in
Federal procurement. EPA's recommendation for lumber excludes several
credible standards that are widely used in the U.S., including the
Sustainable Forestry Initiative (SFI) and American Tree Farm System
(ATFS) standards. Across the United States, more than 82 million acres
of forestland are certified to either these two systems. This
represents more than 70 percent of all certified forests in the United
States and 95 percent in my home state of Washington. I was
disappointed to learn this recommendation, along with a prior lumber
determination by the Department of Energy, was made without
consultation with the USDA. The Department of Agriculture not only has
expertise in forest management and products, but has publicly stated
that SFI and ATFS standards can be used to verify sustainability of
forest products. I am hopeful USDA will engage DOE and EPA and work
with them to change their current programs to recognize all three
credible forest certification standards. Can you provide us an update
on any plans you have to interact with and educate EPA and DOE about
these forest certification programs?
Answer. The U.S. Department of Agriculture's (USDA) Natural
Resources and Environment Mission Area has met with EPA's Office of
Chemical Safety and Pollution Prevention to discuss the interim
recommendations. EPA's Standards Executive plans to reach out to the
Sustainable Forestry Initiative (SFI), the American Tree Farm System
(ATFS) and other forestry stakeholders regarding review of forestry
labels and their alignment with Federal policies guiding EPA's use of
voluntary consensus standards and private-sector conformity activities.
USDA also plans to provide relevant, existing analysis to inform EPA's
decision making for the lumber/wood category, going forward.
Question Submitted by Hon. Suzan K. DelBene, a Representative in
Congress from Washington
Question. Last September, the EPA published Interim Recommendations
for environmental standards and ecolabels for use in Federal
procurement. The EPA's recommendation for lumber excludes several
standards that are widely used in the United States, including the
Sustainable Forestry Initiative (SFI) and the American Tree Farm System
(ATFS) standards. Across the United States, more than 82 million acres
of forestland are certified to either the Sustainable Forestry
Initiative (SFI) or the American Tree Farm System (ATFS). This
represents more than 70 percent of all certified forests in the United
States. In Washington State, 95 percent of the states certified forests
are managed to SFI or ATFS standards. To what extent was this
recommendation, along with a prior lumber determination by the
Department of Energy, made in consultation with USDA? It's my
understanding that USDA has publicly stated that SFI and ATFS standards
can be used to verify the sustainability of forest products. Can you
provide us an update on how you plan to work with EPA and DOE on these
forest certification programs?
Answer. The U.S. Department of Agriculture's (USDA) Natural
Resources and Environment Mission Area has met with EPA's Office of
Chemical Safety and Pollution Prevention to discuss the interim
recommendations. EPA's Standards Executive plans to reach out to the
Sustainable Forestry Initiative (SFI), the American Tree Farm System
(ATFS) and other forestry stakeholders regarding review of forestry
labels and their alignment with Federal policies guiding EPA's use of
voluntary consensus standards and private-sector conformity activities.
USDA also plans to provide relevant, existing analysis to inform EPA's
decision making for the lumber/wood category, going forward.

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