[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
HEARING TO REVIEW THE IMPLEMENTATION OF FEDERAL FARM AND DISASTER
PROGRAMS
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON
GENERAL FARM COMMODITIES AND RISK MANAGEMENT,
AND THE
SUBCOMMITTEE ON
LIVESTOCK AND FOREIGN AGRICULTURE,
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 19, 2019
__________
Serial No. 116-18
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Agriculture
agriculture.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
37-920 PDF WASHINGTON : 2020
COMMITTEE ON AGRICULTURE
COLLIN C. PETERSON, Minnesota, Chairman
DAVID SCOTT, Georgia K. MICHAEL CONAWAY, Texas, Ranking
JIM COSTA, California Minority Member
MARCIA L. FUDGE, Ohio GLENN THOMPSON, Pennsylvania
JAMES P. McGOVERN, Massachusetts AUSTIN SCOTT, Georgia
FILEMON VELA, Texas ERIC A. ``RICK'' CRAWFORD,
STACEY E. PLASKETT, Virgin Islands Arkansas
ALMA S. ADAMS, North Carolina SCOTT DesJARLAIS, Tennessee
Vice Chair VICKY HARTZLER, Missouri
ABIGAIL DAVIS SPANBERGER, Virginia DOUG LaMALFA, California
JAHANA HAYES, Connecticut RODNEY DAVIS, Illinois
ANTONIO DELGADO, New York TED S. YOHO, Florida
TJ COX, California RICK W. ALLEN, Georgia
ANGIE CRAIG, Minnesota MIKE BOST, Illinois
ANTHONY BRINDISI, New York DAVID ROUZER, North Carolina
JEFFERSON VAN DREW, New Jersey RALPH LEE ABRAHAM, Louisiana
JOSH HARDER, California TRENT KELLY, Mississippi
KIM SCHRIER, Washington JAMES COMER, Kentucky
CHELLIE PINGREE, Maine ROGER W. MARSHALL, Kansas
CHERI BUSTOS, Illinois DON BACON, Nebraska
SEAN PATRICK MALONEY, New York NEAL P. DUNN, Florida
SALUD O. CARBAJAL, California DUSTY JOHNSON, South Dakota
AL LAWSON, Jr., Florida JAMES R. BAIRD, Indiana
TOM O'HALLERAN, Arizona JIM HAGEDORN, Minnesota
JIMMY PANETTA, California
ANN KIRKPATRICK, Arizona
CYNTHIA AXNE, Iowa
______
Anne Simmons, Staff Director
Matthew S. Schertz, Minority Staff Director
______
Subcommittee on General Farm Commodities and Risk Management
FILEMON VELA, Texas, Chairman
ANGIE CRAIG, Minnesota GLENN THOMPSON, Pennsylvania,
DAVID SCOTT, Georgia Ranking Minority Member
AL LAWSON, Jr., Florida AUSTIN SCOTT, Georgia
JEFFERSON VAN DREW, New Jersey ERIC A. ``RICK'' CRAWFORD,
SALUD O. CARBAJAL, California Arkansas
RICK W. ALLEN, Georgia
RALPH LEE ABRAHAM, Louisiana
Mike Stranz, Subcommittee Staff Director
(ii)
Subcommittee on Livestock and Foreign Agriculture
JIM COSTA, California, Chairman
ANTHONY BRINDISI, New York DAVID ROUZER, North Carolina,
JAHANA HAYES, Connecticut Ranking Minority Member
TJ COX, California GLENN THOMPSON, Pennsylvania
ANGIE CRAIG, Minnesota SCOTT DesJARLAIS, Tennessee
JOSH HARDER, California VICKY HARTZLER, Missouri
FILEMON VELA, Texas TRENT KELLY, Mississippi
STACEY E. PLASKETT, Virgin Islands JAMES COMER, Kentucky
SALUD O. CARBAJAL, California ROGER W. MARSHALL, Kansas
CHERI BUSTOS, Illinois DON BACON, Nebraska
JIMMY PANETTA, California JIM HAGEDORN, Minnesota
Katie Zenk, Subcommittee Staff Director
(iii)
C O N T E N T S
----------
Page
Conaway, Hon. K. Michael, a Representative in Congress from
Texas, opening statement....................................... 3
Costa, Hon. Jim, a Representative in Congress from California,
opening statement.............................................. 5
Prepared statement........................................... 7
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, opening statement................................... 4
Rouzer, Hon. David, a Representative in Congress from North
Carolina, opening statement.................................... 7
Prepared statement........................................... 8
Thompson, Hon. Glenn, a Representative in Congress from
Pennsylvania, opening statement................................ 4
Vela, Hon. Filemon, a Representative in Congress from Texas,
opening statement.............................................. 1
Prepared statement........................................... 2
Witness
Northey, Hon. William, Under Secretary, Farm Production and
Conservation, U.S. Department of Agriculture, Washington, D.C.. 9
Prepared statement........................................... 11
Submitted questions.......................................... 47
HEARING TO REVIEW THE IMPLEMENTATION OF FEDERAL FARM AND DISASTER
PROGRAMS
----------
THURSDAY, SEPTEMBER 19, 2019
House of Representatives,
Subcommittee on General Farm Commodities and Risk
Management,
joint with the
Subcommittee on Livestock and Foreign Agriculture,
Committee on Agriculture,
Washington, D.C.
The Subcommittees met, pursuant to call, at 10:03 a.m., in
Room 1300 of the Longworth House Office Building, Hon. Filemon
Vela [Chairman of the Subcommittee on General Farm Commodities
and Risk Management] presiding.
Members present: Representatives Vela, Van Drew, Costa
(Chairman of the Subcommittee on Livestock and Foreign
Agriculture), Brindisi, Hayes, Cox, Harder, Bustos, Panetta,
Axne, Peterson (ex officio), Thompson, Austin Scott of Georgia,
Allen, Rouzer, Comer, Marshall, Hagedorn, Johnson, LaMalfa, and
Conaway (ex officio).
Staff present: Lyron Blum-Evitts, Malikha Daniels, Emily
German, Prescott Martin III, Isabel Rosa, Mike Stranz, Katie
Zenk, Matthew S. Schertz, Ricki Schroeder, Trevor White, Dana
Sandman, and Jennifer Yezak.
OPENING STATEMENT OF HON. FILEMON VELA, A REPRESENTATIVE IN
CONGRESS FROM TEXAS
Mr. Vela. This joint hearing of the Subcommittees on
General Farm Commodities and Risk Management and Livestock and
Foreign Agriculture entitled, Hearing To Review the
Implementation of Federal Farm and Disaster Programs, will come
to order.
Thank you and welcome to this joint hearing of the
Subcommittees on General Farm Commodities and Risk Management,
and Livestock and Foreign Agriculture. I am pleased to be
joined by my colleague and fellow Chairman, Mr. Costa, as well
as my esteemed Ranking Member, Mr. Thompson, and the Livestock
and Foreign Affairs' Ranking Member, Mr. Rouzer. Welcome also
to our Chairman, Collin Peterson, and my fellow Texan, Ranking
Member Mike Conaway.
This first joint hearing comes at a very important time for
farmers. USDA, and in particular, the Food Production and
Conservation mission area and the Farm Service Agency, is in
the middle of a huge job. FPAC and FSA are currently at the
helm of three critical but separate efforts to address the
needs of farmers, ranchers and rural communities in our
country. The Market Facilitation Program, which is meant to
assist those farmers most directly harmed by the
Administration's trade war, the expanded Wildfire and Hurricane
Indemnity Program, or WHIP+, which will aid in rural recovery
from natural disasters, and programs like ARC, PLC, DMC and
other supports within title I of the farm bill, which provide a
risk management framework for farmers and ranchers.
It is our job on this Committee to ensure that these
programs are structured and implemented in a way that can
quickly, efficiently, and most directly serve the farmers,
ranchers and small towns who need them right now. It is also
our job to ensure that these programs are implemented in a way
that is fair, transparent, and consistent with the law. We can
absolutely get farmers the help they need while still
conducting appropriate and necessary oversight.
I do have concerns about the path that USDA is on,
especially when it comes to staffing. I hear from farmers all
the time about understaffed local FSA offices. Resources at FSA
are stretched thin and I would like to hear today what plans
USDA has to make sure these resources are managed effectively.
On top of that, there are many media stories about software
glitches and unprepared staff struggling to process these
disaster payments.
It is clear that USDA wants to find efficiencies, but is
USDA prepared to make the changes needed to successfully
deliver these important services, even if that means
increasing, not decreasing, staff and resources?
I look forward to hearing your testimony today, Mr. Under
Secretary.
[The prepared statement of Mr. Vela follows:]
Prepared Statement of Hon. Filemon Vela, a Representative in Congress
from Texas
Thank you, and welcome to this joint hearing of the Subcommittees
on General Farm Commodities and Risk Management, and Livestock and
Foreign Agriculture. I'm pleased to be joined by my colleague and
fellow Chairman, Mr. Costa, as well as my esteemed Ranking Member Mr.
Thompson, and the Livestock and Foreign Affairs' Ranking Member Mr.
Rouzer.
Welcome also to our Chairman Collin Peterson and my fellow Texan,
Ranking Member Mike Conaway.
This first joint hearing comes at a very important time for
farmers. USDA, and, in particular, the Food Production and Conservation
mission area and the Farm Service Agency, is in the middle of a huge
job.
FPAC and FSA are currently at the helm of three critical but
separate efforts to address the needs of farmers, ranchers, and rural
communities in our country.
The Market Facilitation Program, which is meant to assist
those farmers most directly harmed by the Administration's
trade war;
The expanded Wildfire and Hurricane Indemnity Program, or
WHIP+, which will aid in rural recovery from natural disasters;
and
Programs like ARC, PLC, DMC and other supports within title
I of the farm bill, which provide a risk management framework
for farmers and ranchers.
It's our job on this Committee to ensure that these programs are
structured and implemented in a way that can quickly, efficiently, and
most directly serve the farmers, ranchers and small towns who need them
right now.
It's also our job to ensure that these programs are implemented in
a way that is fair, transparent, and consistent with the law. We can
absolutely get farmers the help they need while still conducting
appropriate and necessary oversight.
I do have concerns about the path that USDA is on, especially when
it comes to staffing. I hear from farmers all the time about
understaffed local FSA offices. Resources at FSA are stretched thin and
I want to hear today what plans USDA has to make sure these resources
are managed effectively. On top of that, there are many media stories
about software glitches and unprepared staff struggling to process
these disaster payments.
It's clear that USDA wants to find efficiencies, but is USDA
prepared to make the changes needed to successfully deliver these
important services, even if that means increasing, not decreasing,
staff and resources?
I look forward to hearing your testimony today, Mr. Under
Secretary.
Mr. Vela. I now recognize Chairman Peterson for an opening
statement.
You waive? I recognize Ranking Member Conaway for an
opening statement.
OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE
IN CONGRESS FROM TEXAS
Mr. Conaway. Thank you, Mr. Chairman. I appreciate you
holding this really important hearing and having us focus on
the way that USDA is going about its business of trying to help
farmers and ranchers in rural America across this country, at a
junction where it is really difficult where the Chairman
mentioned everything that is going on.
The process we have gone through the last 8 days on the CR
is shameful. It is one thing for China to use our farmers and
ranchers and rural America as a weapon against President Trump
and those trade negotiations, but it is entirely something else
to have the powers of this body be using those same good people
as leverage because you simply don't like President Trump.
Now, this Committee and the USDA have done yeoman's work
trying to make sure that rural America is protected, that we
eliminate the uncertainties that live out there. The way the
Majority has gone about this CR and taking the CCC funding
hostage is now using those folks as a weapon. Shame on us for
allowing that to happen. It should never have happened.
We are reducing this body to a terrible state. It is one
thing for one of our colleagues to list donors of President
Trump to try harass their businesses and hurt them financially.
It is entirely different for this body, this body, to do the
exact same thing with this funding mechanism that has always
gone forward without impediments.
Now, my colleagues on the other side of the aisle might say
that this has been done before, the restrictions placed on this
funding as a result of Blanche Lincoln and Vilsack's efforts
affected future promises, not the current promises that were
made at that point in time. These promises on the MFP payments,
the disaster relief, have been made, and for us to threaten
rural America that those payments would not go out under
regular order is terrible. Shame on us for getting to doing
that exact same thing.
My colleagues will say we fixed it, but you didn't. You
left restrictions on there. There is a report that USDA has to
do. In the face of all of the things that the Chairman said
they had to get done, now we have added another report due by
October 30 or 31 to that workload. Shame on us for doing that.
We have also not fully funded it. We have given it some
sort of date-certain funding as opposed to moving it to the $30
billion.
From now on, congratulations. From now on, as my Chairman
said yesterday on the radio, from now on, this process will now
be a weapon that both sides can use to their advantage. And
shame on us for doing that.
I yield back.
Mr. Vela. I recognize the Chairman, I recognize Mr.
Peterson.
OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE
IN CONGRESS FROM MINNESOTA
Mr. Peterson. I want to tell Members that haven't been here
29 years some of the history.
This was put in place by the Republican party in 2010, and
it was put in place, this restriction, because at that time,
the Republicans thought that Secretary Vilsack was using the
CCC to help Blanche Lincoln, who at the time was Chairman of
the Senate Agriculture Committee, in her reelection because
there was a disaster in Arkansas. And the Senate wouldn't do a
disaster bill because she was up for election.
What happened? What they did instead was they put a
limitation on Vilsack so that he couldn't use the CCC to do it.
You guys put it in place, not us.
Mr. Conaway. On basis?
Mr. Peterson. Well no, and so what has happened ever since
is the Appropriations Committee has waived that provision. They
didn't change it, but they waived it. Okay. So, this time it
became an issue. There wasn't a single Member on this
Committee, the Agriculture Committee, that had anything to do
with this, period.
And so, I object to making these kind of accusations that
our Members somehow or another were complicit in this. We were
not. And I found out this came from the Senate. It did not come
from the House. This whole brouhaha came out of the Senate.
My concern about this, and what I said on the radio
yesterday is, this is legitimate. There weren't a handful of
Members that understood what the CCC was before this all
started. And that is not just this latest dust-up. The
President using this fund for farmers has elevated this thing,
and so now I have had people talk to me from the liberal side
complaining about it. They never knew there was a CCC, never
knew how it operated. And then yesterday, the Freedom Caucus,
they are starting to weigh into this thing.
That is what I am concerned about. But, nobody on this
Committee had anything to do with that, and without this
Committee, this thing might have happened. It wasn't the House
that was pushing this, it was the Senate. That is where these
troubles usually start.
I just wanted to clear the record.
Mr. Vela. I now recognize the gentleman from Pennsylvania,
Ranking Member of the General Farm Commodities and Risk
Management Subcommittee, Mr. Thompson, for his opening remarks.
OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN
CONGRESS FROM PENNSYLVANIA
Mr. Thompson. Chairman Vela, Chairman Costa, thank you for
holding this important hearing regarding implementation of the
2018 Farm Bill provisions in disaster assistance. Thank you to
Under Secretary Northey for your leadership, for attending, and
for providing us an update on the status of these important
policies.
As those of us representing rural America know firsthand,
times are tough in farm country. Over the past few years, it
seems like there isn't a single region of the country that is
immune from Mother Nature's devastation.
Not only are producers having to grapple with extreme
weather, they are also being buffeted by bad markets and an
ever-changing landscape for global trade. Not to mention the
policy uncertainty coming out of Washington.
That is why it is so important to get the 2018 Farm Bill
completed without the threat of extensions which would only
have exacerbated the challenges facing farmers and ranchers.
I am very pleased with the timely rollout from USDA of the
key farm bill programs, despite having numerous other policies
to implement, which I am sure we will hear more about today.
The House Republicans were able to make some key targeted
improvements to the farm safety nets, which should not be
overlooked, and do not forget in conference, we were having to
negotiate against the Senate bill which would have cut $700
million out of the baseline of these critical programs. Talk
about kicking farms and farm families when they are down. It is
unconscionable to me that people would be advocating for the
erosion of the safety net at a time when producers are looking
for any lifeline available to keep their family farms in
business.
I am proud that we were able to hold the line and produce a
conference report that provides improvements to all title I
programs to the benefit of all crops and regions of the
country.
One additional area where Congress could act now to ease
the concerns of the agriculture community would be to act
swiftly to approve the United States-Mexico-Canada agreement,
USMCA, which made key improvements to NAFTA and is expected to
provide $2.2 billion in additional exports for our producers,
particularly for dairy, the main commodity produced in my
district.
Beyond the access that it provides, USMCA also sends a
signal to other trading partners currently in talks with USTR
that United States has the wherewithal to follow through on
commitments made, which will lead to other opportunities to
expand trade, just like what we saw with the agreement and
principle reached with Japan.
Congress must approve USMCA now, and failure to do so will
erode relationships between our negotiating partners, not just
for this Administration, but for all future Administrations as
well.
Thanks again for holding this joint hearing, and I look
forward to hearing from Under Secretary Northey about the
actions USDA is taking to aid our farmers and ranchers.
Mr. Vela. Thank you. I now recognize the gentleman from
California, Chairman of the Subcommittee on Livestock and
Foreign Agriculture, Mr. Costa.
OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN
CONGRESS FROM CALIFORNIA
Mr. Costa. Thank you very much, Mr. Chairman. I think it is
important that these two Subcommittees meet together this
morning. This hearing that deals with the review of the
implementation of the Federal farm and disaster programs is
fitting and appropriate, given the challenges that we are
facing today in farm country. And for all of the Members that
are participating, I thank you.
I also want to note that it was important that Chairman
Peterson clarify the history and the record as it relates to
these activities that were most recently involved with the
continuing resolution that we need to pass this week, and that
we need to obviously have a budget, because frankly, it is
irresponsible to shut down the government. I have always felt
it is irresponsible, and past actions by previous Congresses to
do just that for political agendas is inappropriate, period.
And certainly, the President learned that lesson the hard way
last year. At least, I hope he did.
The history of the CCC, which as Chairman Peterson pointed
out, is really not known by the majority of Members of Congress
until this last week. It is important to note, because frankly,
we should not be politicizing this. It is not part of this
Committee. My sense is it really came from the Senate as well,
but we have to deal with it.
What we are dealing with today is to talk about where the
safety net is. Where is the safety net for farmers and ranchers
and dairy people across this country? And as the Chairman of
the Subcommittee on Livestock and Foreign Affairs, I am very
interested in overseeing that the new Dairy Margin Coverage
Program that we worked so hard on in the reauthorization of the
last farm bill, and the Administration's Market Facilitation
Program is properly implemented. And that is why we have the
Secretary here today, in part.
The Dairy Margin Coverage signup for 2019 was set to end
tomorrow. Now, it is important that we give dairymen and -women
every opportunity to sign up for this program. We will be
asking the Secretary where we are in terms of that signup and
whether or not your numbers kind of coincide with the numbers
that I have heard. I hope there can be a little bit of
flexibility with that deadline tomorrow. This year, given that
we have a brand-new program, but at the same time, I know you
have the challenge, because we have the signup for the 2020
program. I am sympathetic to the challenge that the Department
is facing in that instance.
But, it has been tough in dairy country across the land. We
know with the large fluctuations and the amount of dairies that
have gone bankrupt and have been sold in every region of
America, and we certainly have lost our fair share in
California. I know dairymen and -women that have been there for
generations that now find themselves having to sell the dairy,
and it is tough. And it has economic ramifications in the
communities where those dairies have been.
Nationwide, though, the program, in terms of success has
triggered, I am told, over $1 billion in help--$\1/4\ billion,
excuse me. Let me correct that, $\1/4\ billion in help to dairy
farmers throughout the country, and that is good. That is
obviously what the intention was.
I have a difference with the Administration, with the
President, on this tariff war. I have been clear about that.
The President has said that farmers are better off with Market
Facilitation Program payments than they were with the access
they had to China before the trade war. In the USMCA we have
made some headway with Canada on that Class VII. I can tell you
the dairy market is very important for California and Mexico.
Yet, when I talk to farmers, it is not just my disagreement
with this that no one wins the tariff war, because everybody
has leverage. But farmers in California are feeling the pain of
it, and they agree. They think that it is important that they
have access to markets and they maintain those markets, and
they are very fearful when we lose these markets because of
this current trade war, we may never regain them. And that is a
concern I have.
The Market Facilitation Program and how those monies are
used for the payments really don't come close. I mean, the
example in dairy, 12 per hundredweight. I mean, you are
getting $16 to $18 per hundredweight, 12 , it is in the
margins. It may stave off a bankruptcy or a foreclosure by a
bank for a certain time period, but 12 per hundredweight is
not going to save a dairy.
I don't know what the USDA leadership thinks. I am
interested. I have a few questions on how the Market
Facilitation Program was set up and how you are implementing
it.
But, Chairman Vela, thank you for agreeing to host this
joint hearing with me. Secretary Northey, you have a farm
background. You know how difficult it is in farm country, and
we appreciate your participation here this morning to give us a
sense of--with your testimony--where we are going with this.
[The prepared statement of Mr. Costa follows:]
Prepared Statement of Hon. Jim Costa, a Representative in Congress from
California
Thank you for joining us today. I'm happy to hold this important
joint hearing with the General Farm Commodities and Risk Management
Subcommittee to evaluate the safety net the USDA provides for farmers.
In my role as Chairman of the Subcommittee on Livestock and Foreign
Agriculture, I am very much interested in overseeing the roll out of
the new Dairy Margin Coverage program and the Administration's Market
Facilitation Program, that are meant to help farmers of all types. The
Dairy Margin Coverage sign-up for 2019 ends on September 20th. About
\2/3\ of California dairy farms that have established production
history with USDA have signed up for Dairy Margin Coverage so far.
Nationwide, the program has already triggered over $\1/4\ billion in
help to dairy farmers this year.
When it comes to trade, the President has said that farmers are
better off with Market Facilitation Program payments than they were
with the access they had to China before the trade war. The farmers I
talk to disagree and the conversations I've had with USDA leadership
makes me think you might disagree as well. I've got a few questions to
ask about how that program was set up and how you're implementing it
now.
Chairman Vela, thank you for agreeing to host this joint hearing
with me. Under Secretary Northey, thank you for joining us. I look
forward to your testimony.
Mr. Costa. I now yield to the Ranking Member of our
Subcommittee, my Subcommittee, Mr. Rouzer, for any remarks he
wishes to make.
OPENING STATEMENT OF HON. DAVID ROUZER, A REPRESENTATIVE IN
CONGRESS FROM NORTH CAROLINA
Mr. Rouzer. Thank you, Mr. Chairman. I have a prepared
statement that I will just submit for the record, and I just
have a couple comments for the second time, because I am
interested in getting to the real meat of the matter here.
But first, it is important that we recognize just how
critical it is that we in agriculture stick together,
Republican and Democratic. It is unfortunate that so many of
our other colleagues that don't have the opportunity to
represent rural areas. The lack of understanding of agriculture
is significant. There is a wide gap there, and of course, that
is not uncommon around the countryside either. Most folks have
no idea where their food and fiber comes from. We take it for
granted every single day of our lives, and so, it is really
important that we as Republicans and Democrats on this
Committee stick together and promote and educate and cajole and
persuade as best we can our other Members of Congress so that
they will understand the nature and the gravity of what we are
doing here as it relates to production agriculture and clearly,
a country that can feed itself and clothe itself is in a very
enviable position. It enables us to be prosperous here at home,
and strong abroad as well.
The other thing I would like to mention--and I have been
around agriculture and these debates for a long time, going
back to my days on the Senate staff. And back then, I never
understood why we didn't have some type of--in addition to crop
insurance, some type of catastrophic fund of some sort so that
when these disasters hit, we are not waiting on Congress for 8
months or 12 months or 14 months or whatever it may be, but
have a program in place similar to what we have with FEMA where
Congress makes an appropriation every year, and you have it
there. And when a disaster hits, you have a base. And then if
you need to come back and supplement that Congress can.
And very clearly, as valuable as crop insurance is, you
take a situation in my home State of North Carolina, you have
economic losses year after year after year. That is the
hurricane of economics, so to speak, and then you have the
weather, hurricanes coming through that absolutely devastate
your areas. Farmers had millions and millions of dollars tied
up in the ground. Hurricane hits in early September, and they
don't even have an opportunity to get anything from that
investment. And meanwhile, it comes at a time when they have
lost all their equity due to the economic hardships that they
have faced over a period of time. And then it takes Congress
months to get any kind of disaster aid package across the
finish line, for a variety of reasons.
I just think we have to--and this has been an age-old
problem. We have to come up with a better solution than what we
have now. Crop insurance is very valuable. It is very helpful;
but, there are so many times we face when, it is just not quite
enough, and we have to have extra help. So, that is where we
are.
I look forward to your testimony, Mr. Northey, and look
forward to questions and answers.
Thank you. I yield back.
[The prepared statement of Mr. Rouzer follows:]
Prepared Statement of Hon. David Rouzer, a Representative in Congress
from North Carolina
Thank you, Chairman Vela, and special thanks to Under Secretary
Northey for being here to discuss the implementation of Federal farm
and disaster programs. House Republicans fought hard during the 2018
Farm Bill to strengthen the farm safety net at a time when producers
need all the help they can get.
Uncertainty is problematic for any business, but especially for our
farm families. Having a 5 year farm bill in place is critically
important to provide at least some degree of stability for an industry
that has always faced a wide variety of challenges and uncertainty.
In addition to the enhancements made to ARC, PLC, the Marketing
Assistance Loan, livestock disaster, and crop insurance, I was very
happy that a provision that I authored made it in the conference
report. Section 1104 of the 2018 Farm Bill ensures that producers who
farm multiple small tracts of land are eligible to benefit from the
farm safety net. I want to thank Ranking Member Conaway and his great
team for working with us during conference to ensure that provision was
adopted.
Despite the good work done on the farm bill, positive news has been
hard to find for farmers in North Carolina and the rest of the
Southeast. Our producers have been hammered by multiple hurricanes in
recent years. Hurricanes Matthew, Maria, Florence, Michael, and, of
course, most recently Dorian, devastated the agriculture sector
throughout the Southeast. This succession of storms has put enormous
strain on producers, and years of economic losses have consumed any
equity that farm families had. As we all know, farm income is down more
than 50% during the course of the past 6 years.
This is why it was so vital that Congress provided disaster
assistance to help folks recover. While ad hoc disaster programs are no
one's preferred choice to make ends meet, extraordinary times call for
significant measures and our producers are still in great need.
This underscores the need to constantly improve the insurance
policies available to producers and be more forward looking about
necessary coverage options.
The 2018 Farm Bill certainly took a step in that direction by
requiring that USDA look at options for providing additional coverage
for losses from tropical storms and hurricanes, and we should continue
to look for other improvements that will help reduce the need for ad
hoc assistance.
Mr. Northey, I want to commend you and the folks at FSA who learned
from lessons in 2017 and used that experience to make modifications to
WHIP+. Thank you for being here today and I look forward to your
testimony.
Mr. Vela. Thank you, each of you, for your views on the
current conditions facing agriculture in your state and across
this country. I would like to request that opening statements
by other Members be submitted for the record so the witness may
begin his testimony and to ensure that there is ample time for
questions.
We would like to welcome our witness, the Honorable Bill
Northey, Under Secretary for Farm Production and Conservation
at USDA. Mr. Northey is a fourth-generation farmer from Iowa,
and served as Iowa's Secretary of Agriculture from 2006 to
2018.
Under Secretary Northey, please begin when you are ready.
STATEMENT OF HON. WILLIAM NORTHEY, UNDER SECRETARY, FARM
PRODUCTION AND CONSERVATION, U.S. DEPARTMENT OF AGRICULTURE,
WASHINGTON, D.C.
Mr. Northey. Very good. Thank you. Chairman Vela, Chairman
Costa, Ranking Members Thompson and Rouzer, and distinguished
Members of the Committee, I am honored to be with you this
morning to discuss the work USDA has accomplished and continues
to deliver as we implement the 2018 Farm Bill.
Thank you for your leadership in providing the programs and
the funding authority that lets us support our nation's
hardworking farmers, ranchers, and forest stewards. I am
privileged to be the Under Secretary for FPAC, comprised of the
three farmer-facing agencies of FSA, RMA, and NRCS.
Since Congress passed and President Trump signed the 2018
Farm Bill into law last December, one of our highest priorities
has been implementing the Dairy Margin Coverage Program. Sign
up for DMC began June 17 and FSA began making payments for the
DMC on July 11. As of last evening, we had over 21,000
producers enrolled in the Dairy Margin Coverage Program, with
about $230 million being paid. To ensure that our producers
have enough time to enroll, we are extending the deadline from
September 20 to September 27, so 1 week.
Our FSA offices have and will continue to make the extra
effort to ensure producers are notified of the approaching
deadline. We have made phone calls and sent out post cards and
emails. Additionally, producer organizations and cooperatives
have been important partners in sharing program information and
deadlines, and we will continue to work with them to do so with
this new deadline.
FSA has implemented the 2018 Farm Bill changes to ARC/PLC
as well. ARC/PLC sign up began September 3 for the 2019
program, and will run through next March, and RMA has
implemented key crop insurance provisions, including multi-
county enterprise units, and providing insurance options for
grazing and harvesting of wheat. RMA will provide coverage for
hemp in crop year 2020.
On the conservation side, we have held sign-ups for
continuous enrollment CRP, and the Conservation Reserve
Enhancement Program, and FSA is planning a CRP general sign up
in December, with our CRP grassland sign up to follow that.
On September 3, we published an Announcement of Funds
Availability for the Regional Conservation Partnership Program,
and additionally, NRCS has implemented EQIP, CSP, and the
Agriculture Conservation Easement Program in accordance with
existing regulations as prescribed by the 2018 Farm Bill. New
regulations will be published soon for implementation of those
programs in Fiscal Year 2020.
This past year has tested the resilience of America's
farmers. Crop insurance, supplemental natural disaster
assistance programs, and short-term trade mitigation programs
have helped producers manage those challenges. To help
producers who were unable to plant crops or had significant
delays in planting, USDA increased some flexibility in some of
the program rules and its delivery by allowing earlier harvest
of cover crops on prevent plant acres, by extending the filing
deadline for acreage reporting, by providing EQIP cover crop
cost-share for prevent plant acres, and by deferring interest
charges on crop insurance premiums. We took these actions based
on comments we received from you, from farm organizations, and
directly from producers.
I also know there is a lot of interest in the
implementation of the supplemental disaster relief bill. Last
week, we announced FSA's WHIP+ Program, which provides payments
to producers for natural disasters occurring in 2018 and 2019.
We began accepting payments, but also included in that, in
addition to the WHIP+, are payments for milk loss, for stored
grain losses, and for 2017 peach and blueberry freeze losses.
In addition, all producers with flooding or excess moisture-
related prevent plant claims in 2019 will receive a top-up
payment of ten to 15 percent of their indemnity.
We are providing relief through the Emergency Conservation
Program, the Emergency Forest Restoration Program, and the
Emergency Watershed Program, which were provided $1.5 billion
in the disaster relief bill.
The Market Facilitation Program, part of President Trump's
support package for farmers, will provide up to $14.5 billion
in direct payments to agriculture producers who have been
affected by unjustified retaliatory tariffs on U.S. farm goods.
Sign up began July 29, and will run through December 6. As of
the beginning of this week, we have more than 346,000
applications, and $4 billion have been paid to producers.
In February 2018, USDA launched farmers.gov, a mobile-
friendly website, making it easier for producers to apply for
programs, process transactions, sign documents, and access
their information. They can also access a farm loan, a disaster
assistance discovery tool there, and we began accepting debit
card payments online as well. And there is more to come.
Before I close, I would like to acknowledge this
particularly challenging time, as you all have noted, for our
agricultural producers. At FPAC, our agencies are working hard
to ensure producers have what they need to help manage their
risks and their land.
I want to thank our thousands of USDA employees who serve
our nation's farmers, ranchers, and forest stewards daily, for
their hard work in implementing the 2018 Farm Bill and other
programs.
Again, thank you for the opportunity to testify this
morning. I would be happy to answer any questions.
[The prepared statement of Mr. Northey follows:]
Prepared Statement of Hon. William Northey, Under Secretary, Farm
Production and Conservation, U.S. Department of Agriculture,
Washington, D.C.
Chairmen Vela and Costa, Ranking Members Thompson and Rouzer, and
distinguished Members of the Committee, I am honored to be with you
this morning to discuss the work we have accomplished and continue to
deliver as we implement the 2018 Farm Bill, as well as how our programs
provide critical safety net support for our farmers, ranchers and
forest landowners when disasters hit and their livelihood is put at
risk.
As a farmer myself, I know first-hand how valuable these programs
are and how important it is that the USDA delivers them effectively,
efficiently, and using common sense.
Within his first month on the job, Secretary Perdue established the
farm bill-mandated Trade and Foreign Agricultural Affairs mission area,
centered on the work of the Foreign Agricultural Service. That created
an opportunity to establish a new common sense, farmer-facing mission
area, Farm Production and Conservation (FPAC). By bringing together the
sister agencies Farm Service Agency (FSA), the Risk Management Agency,
and the Natural Resources Conservation Service (NRCS), USDA now has a
single mission area that serves as a focal point for the nation's
farmers, ranchers, and forest stewards as they work to conserve land
for future generations and seek help in protecting their hard work and
investment from the effects of bad weather and unpredictable markets.
Together, the agencies work to support each other as we deliver our
programs to serve our customers.
The 2018 Farm Bill strengthened these partnerships in ways that
will allow them to do an even better job on behalf of our nation's
agricultural producers. We have been able to leverage the natural
connections, unique resources and vast network of dedicated employees
across the mission area agencies to implement the farm bill in a
unified effort. As a result, we are working more effectively and
efficiently than we could have if these agencies had to coordinate
their work across multiple mission areas. A good example of this is the
newly integrated nature of FSA and NRCS conservation programs that
previously operated independently without strong alignment. The new
mission area structure has helped to foster a level of communication
and collaboration that our employees had not seen in their decades of
working for those agencies.
As you are well aware, our farmers and ranchers across the United
States have faced--and continue to face--significant challenges from
natural disasters. While the farm bill helped us improve programs for
our producers, natural disasters continued to destroy crops and erode
valuable resources. In addition to our standing safety net programs,
the Additional Supplemental Appropriations for Disaster Relief Act of
2019 provided funding for new programs to help our hardest-hit farmers
recover. I would like to speak about our efforts to implement these
programs today as well.
Our agencies have a proven track record of delivering farm safety
net and resource conservation programs, but unfair trade retaliation
has affected the ability of our producers to sell their products
overseas at a fair price. As a result, we have taken essential steps to
mitigate those devastating impacts. Through the Market Facilitation
Program, outlined in President Trump's Support Package for Farmers
efforts, we have rolled out new tools to keep our rural economy and
agriculture sector afloat. In fact, average net cash farm income for
farm businesses is forecast to increase 11.4 percent to $81,900 in
2019.
Farm Bill Implementation
Last December, when Congress passed and President Trump signed the
Agriculture Improvement Act of 2018 (2018 Farm Bill) into law, our top
priority was to implement the programs quickly and effectively to meet
the needs of our struggling farmers.
The 2018 Farm Bill reinvented the Margin Protection Program for
Dairy (MPP-Dairy) as the Dairy Margin Coverage (DMC) Program, providing
a boost to coverage levels and a reduction in premiums. It is a
voluntary program that offers protection to dairy producers when the
difference between the national all-milk price and average feed cost
(the margin) falls below a certain dollar amount selected by the
producer. The program requires producers to contribute to this coverage
of their financial risk through a premium schedule scaled by production
levels.
Signup began on June 17, 2019 and on July 11, the FSA began making
initial payments, retroactive to January 1, to enrolled producers.
As of September 16, 20,647 dairy producers have enrolled in DMC.
Approximately $276.8 million has been paid out. Producers have until
September 20, 2019, to sign up. To help them understand their options
and make critical business decisions, we rolled out an online Dairy
Decision Tool developed in partnership one of our land-grant
universities--one of the many innovative ways we have been helping our
producers learn about their new options and make decisions. Efforts are
still underway in our FSA field offices to notify producers of the
approaching deadline, including personalized phone calls, postcards,
and emails by our staff and producer associations and cooperatives.
The farm bill also addressed concerns of dairy producers faced with
a decision between the Risk Management Agency's (RMA) Livestock Gross
Margin (LGM) insurance option and the last year of FSA's old MPP-Dairy
option. Instead of having to choose, dairy producers who elected to
participate in LGM in 2018 were able to retroactively participate in
the MPP-Dairy for 2018. This enrollment opportunity ended May 10. Over
400 (414) participants retroactively enrolled and nearly $8.15 million
has been paid to producers through this retroactive coverage.
While not a farm bill program itself, RMA's Dairy Revenue
Protection (DRP) insurance product works well with the new DMC to add a
layer of risk protection our producers need when covering the costs to
bring their products to market. During the several months since initial
sales started, DRP has covered over 37 billion pounds of milk, which
represents about 15 percent of total milk production.
For our crop producers, crop insurance is a vital part of the farm
safety net. RMA manages the Federal Crop Insurance Program, which
provides effective, market-based risk management tools to strengthen
the economic stability of agricultural producers. Total liability in
the program is more than $105 billion on more than 372 million acres
for crop year 2019. The farm bill recognized the importance of crop
insurance by further enhancing products and available options.
RMA has implemented key crop insurance provisions such as Multi-
County Enterprise Units, the Dual Use Option under Annual Forage, and
has provided expanded coverage for industrial hemp eligible for
coverage under Whole-Farm Revenue Protection. In addition, key
provisions related to veteran and beginning farmers and ranchers have
been implemented that make crop insurance more affordable with more
robust coverage for those just starting out in agriculture.
Providing effective risk management options for hemp producers was
an important part of the 2018 Farm Bill. Just last month, we announced
that RMA opened its Whole-Farm Revenue Protection policy to cover hemp.
For the 2020 crop year, hemp can be insured under this program provided
the producer has a contract and meets applicable Federal and state
regulations. Whole-Farm Revenue Protection allows coverage of all
revenue for commodities produced on a farm up to a total insured
revenue of $8.5 million.
To address initial concerns about developing eligible production
records to include hemp under WFRP policies, RMA proactively issued
guidance earlier this year that allows hemp to be grown without voiding
a producer's existing WFRP for 2019.
Implementing the 2018 Farm Bill also required RMA to quickly update
its Annual Forage insurance policy to offer a Dual Use Option, which
the agency began offering for the 2020 crop year in May for select
counties of six Great Plains states. Producers who select this option
can insure their small grains crop with both an Annual Forage Policy
for grazing and a multi-peril Small Grains Policy for grain.
NRCS, RMA, and FSA also developed new guidelines and policy
provisions for the treatment of cover crops, which add more flexibility
in determining the date when cover crops must be terminated in order to
remain eligible for crop insurance. Producers can now be assured that
their insurance will take effect at time of planting the insured crop.
Cover crop management practices are covered by Good Farming Practice
provisions, and the guidelines are no longer a requirement for
insurance take effect. This effort is another example of the three FPAC
agencies working together to provide more flexibility to farmers and
ranchers.
The 2018 Farm Bill also made changes to another set of critical
risk management tools: the FSA-administered Agriculture Risk Coverage
(ARC) and Price Loss Coverage (PLC) programs. ARC is an income support
program that provides payments on historical base acres when actual
crop revenue declines below a specified guarantee level. PLC provides
payments on historical base acres when the effective price for a
covered commodity falls below its effective reference price, set by
Congress in the Bill. Covered commodities include wheat, oats, barley,
corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola,
safflower, flaxseed, mustard seed, crambe, sesame seed, dry peas,
lentils, small chickpeas, large chickpeas, peanuts and, added in 2018,
seed cotton.
Though much of the main structure of the ARC and PLC programs was
retained in the 2018 Farm Bill, a few mandatory and discretionary
changes were made, and FSA has readily implemented those. The 2019 ARC/
PLC enrollment began September 3, 2019 and will run through March 15,
2020. The 2020 ARC/PLC enrollment will begin Oct. 7, 2019, and run
through June 30, 2020. Enrollment for subsequent years (2021-2023),
will begin Oct. 1 of each year and run through March 15 of the
following year.
Access to credit is critical when commodity prices are low or
market forces impact a producer's margins. FSA's Marketing Assistance
Loans are critical tools for keeping our rural economy strong and our
farmers continuing to farm. Marketing Assistance Loans provide
producers interim financing at harvest time to meet cash flow needs
without having to sell their commodities when market prices are
typically at harvest-time lows. The 2018 Farm Bill increased loan rates
for all loan commodities except minor oil seeds, wool, mohair, honey,
peanuts and upland cotton. These loans are critical in certain
commodities and certain regions where private lenders or processors may
require producers to utilize them as a prerequisite to obtain secondary
financing.
While crop insurance is designed to cover a majority of crops, not
all producers or crops are eligible for effective coverage. The FSA's
Noninsured Crop Disaster Assistance Program, or NAP, provides financial
assistance to producers of non-insurable crops when low yields, loss of
inventory or prevented planting occur because of natural disasters. FSA
implemented farm bill provisions to strengthen this vital option. For
example, buy-up coverage under NAP is now part of permanent program
authorization. Basic coverage has a payment limitation of $125,000 per
person or legal entity, while the payment limitation for buy-up
coverage is a separate $300,000. Service fees to apply for coverage
have increased, while the premium amounts for buy-up NAP coverage
remained unchanged. Beginning, limited-resource and targeted under-
served producers remain eligible for a waiver of the NAP service fee,
and qualified veteran farmers and ranchers are now eligible for a
service fee waiver and premium reduction if they meet certain criteria.
In another example of how FPAC agencies have been working together
to integrate program options for our producers, beginning in 2020, NAP
indemnity payments may be collected in addition to RMA's Whole-Farm
Revenue Protection indemnity payments when a producer is insured under
both plans.
Implementation of our conservation programs has been right on track
as well. Sign-ups for continuous Conservation Reserve Program (CRP) and
Conservation Reserve Enhancement Program were held June 3 to August 23,
2019. FSA is still planning a CRP general signup in December 2019, with
a CRP Grasslands signup to follow.
NRCS' Environmental Quality Incentives Program, Conservation
Stewardship Program and Agricultural Conservation Easement Program have
continued operating under current regulations consistent with new farm
bill provisions, ensuring customers had no lapse in service. Interim
rules and associated policies are under development in preparation for
fall (tentatively October) publication and fiscal 2020 program
delivery.
NRCS has made progress on implementing new provisions under the
farm bill, including the Feral Swine Eradication and Control Pilot
Program, a joint project with the Animal and Plant Health Inspection
Service (APHIS) that directs $75 million to help control the runaway
feral swine population plaguing much of the country. NRCS accepted
project proposals June 20 to August 19. NRCS also announced $25 million
available for On-Farm Conservation Innovation Trials, including a Soil
Health Demonstration Trial. Through On-Farm Trials, NRCS and partners
will collaborate to encourage the adoption of innovative practices and
systems on agricultural lands. Sign-ups ran from May 15 to July 15,
2019.
And just recently, NRCS announced that it is accepting proposals
for the Regional Conservation Partnership Program. Currently, we have
375 active RCPP projects with close to 2,000 partners. Partners are
leveraging nearly $1 billion in NRCS investmen[t] with close to $2
billion in non-NRCS dollars.
Disaster Assistance
Over the past year, USDA has responded to challenges that tested
the resilience of American farmers, bringing together safety net
programs with new initiatives to create economic conditions in which
they can prosper. With the help of crop insurance, natural disaster
assistance, and short-term trade mitigation programs, many producers
are managing the stresses of these difficult times.
As you know, many producers were unable to plant crops by a crop
insurance final planting date or have experienced significant delays in
planting that may affect their production outcomes. On August 27, FSA
published its first crop acreage data report for 2019, which includes
information on crops planted, prevented from planting and failed acres
through August 22, 2019. Agricultural producers reported they were not
able to plant crops on 19.56 million acres in 2019, which marks the
most prevented plant acres reported since FSA began releasing the
report in 2007.
These are challenging times for farmers, and USDA is here to help--
by increasing flexibility in both program rules and delivery.
Our actions have included: Deferring interest charges on crop
insurance premiums for 2 months; extending the deadline to file acreage
reports in 13 states that were heavily impacted; updating the haying
and grazing date for producers who planted cover crops on prevented
plant acres; offering special sign-ups in ten states through the
Environmental Quality Incentives Program for assistance to plant cover
crops; and providing a minimal payment through MFP for cover crops with
the potential to harvest.
More than 8,900 applications were received in the ten states that
offered a special signup through the Environmental Quality Incentives
Program for assistance to plant cover crops or implement other disaster
recovery practices. Of those, it is anticipated that over 2,200
contracts will be funded on over 300,000 acres with an investment of
over $13 million.
As of September 2, RMA has paid roughly $2.2 billion in claims
related to prevented planting for the 2019 crop year.
We are truly taking a cross-agency, customer-focused approach to
make sure producers get the help they need.
Disaster Relief Act of 2019
We also know there is a lot of interest in how USDA will implement
its share of the Additional Supplemental Appropriations for Disaster
Relief Act of 2019. Congress provided a total of $19 billion in
assistance through the Disaster Relief Bill, including $3 billion to
address agricultural losses.
USDA's WHIP+ builds on the successes of the 2017 Wildfires and
Hurricanes Indemnity Program (WHIP), authorized by the Bipartisan
Budget Act of 2018. It will provide payments to eligible producers who
suffered eligible crop, tree, bush and vine losses resulting from
hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms
and wildfires that occurred in the 2018 and 2019 calendar years. In
addition, assistance will be provided to producers who experienced milk
losses, on-farm stored commodity losses, were prevented from planting
in 2019, or whose harvested wine grapes were adulterated.
We are chomping at the bit to implement this disaster aid package,
and will do so in an equitable manner, working with state leadership to
identify where the losses and needs are located in order to best serve
our fellow Americans in need of a helping hand.
In addition to the appropriations provided for crop losses, the
same Act also provided nearly $1.5 billion in funding for the Emergency
Conservation Program (ECP), the Emergency Forest Restoration Program
(EFRP) and the Emergency Watershed Protection Program (EWP).
ECP and EFRP, administered by FSA, provide financial and technical
assistance to agricultural producers, ranchers and forest landowners
with farmland (ECP) and nonindustrial private forestland (EFRP) for
rehabilitation expenses when damaged by natural disaster events, such
as flooding, hurricanes, tornados, wildfire and drought. Congress
provided $558 million for ECP and $480 million for EFRP. As of August
2019, $276.8 million in ECP assistance and $19.2 million in EFRP
assistance was provided to help landowners recover from natural
disasters.
EWP, administered by NRCS, helps local communities recover after a
natural disaster strikes. The program offers technical and financial
assistance to help local communities relieve imminent threats to life
and property caused by floods, fires, windstorms and other natural
disasters that impair a watershed. As of July 2019, over $528 million
in assistance was provided to states to help communities recover from
disasters. In late July, NRCS announced an additional $200 million in
funding for 11 weather-affected states.
Trade Mitigation
The Market Facilitation Program, part of President Trump's Support
Package for Farmers, will provide up to $14.5 billion in direct
payments to agricultural producers who have been affected by
unjustified retaliatory tariffs on U.S. farm goods. FSA opened signup
July 29, 2019 and it runs through December 6, 2019. As of September 16,
nearly 260,000 applications have been filed, $3.81 billion has been
paid to producers and the webpage had 194000 visits. In the 2018 MFP,
USDA helped more than 590,000 producers with $8.6 billion in assistance
provided.
Farm Production and Conservation and Customer Service
We have taken great strides at USDA toward making our programs
faster, friendlier and easier. In February 2018, USDA launched
farmers.gov, a dynamic, mobile-friendly public website combined with an
authenticated portal where customers can apply for programs, process
transactions and manage accounts. Since its creation, we've been
working to expand the self-service options available to producers. Some
of those highlights include:
H-2A Visa Program page and interactive checklist tool that delivers
a custom checklist with application requirements, fees, forms and
timeline built around a producer's hiring needs.
Farm Loan Discovery Tool that helps farmers find information on
USDA loans that best fit their operations. Farmers who are looking for
financing options to operate a farm or buy land can answer five simple
questions about what they are looking to fund and how much money they
need to borrow. After submitting their answers, farmers will receive
information on farm loans that best fit their specific needs. The loan
application and additional resources also will be provided.
My Financial Information enables a USDA customer to view loans and
financial information.
Disaster Assistance Discovery Tool that walks each producer through
five simple questions for a personalized list of USDA disaster
assistance programs that might meet their business needs.
And we just announced last month that FSA is expanding its payment
options to accept debit cards and automated clearing house debit.
This is just the beginning of a multi-phased roll-out of new
payment options for USDA customers. Ultimately, payment option
flexibility will be extended to allow farmers and producers to use
debit cards and ACH debit payments to make payments for all FSA
programs, including farm storage facility loan repayments, farm loan
facility fees, marketing assistance loan repayments, Dairy Margin
Coverage (DMC) administrative fees and premiums and Noninsured Crop
Disaster Assistance Program (NAP) fees.
Conclusion
Before I close, as I've described all the hard work that's being
done in FPAC, it would be remiss of me not to thank our thousands of
USDA employees who are working diligently to implement the 2018 Farm
Bill and who work to serve our nation's farmers, ranchers and
forestland owners daily.
Again, thank you for the opportunity to testify this morning. I
would be happy to answer any questions at this time.
Mr. Vela. Thank you. Members will be recognized for
questioning in order of seniority for Members who were here at
the start of the hearing. After that, Members will be
recognized in order of arrival. I appreciate the Members'
understanding.
I now recognize myself for 5 minutes.
Mr. Northey, having just passed the farm bill, one of my
primary concerns is assuring that all the programs we paid for
are fully and accurately administered. I know this is a
priority for you, as well, and providing excellent customer
service for farmers and ranchers. I am aware that you have made
a significant investment in a comprehensive workload analysis
to determine the number of staff required for optimal
efficiency, giving states the ability to make decisions
regarding staff placement and office leases, for example.
Right now, we know that field office staffing is down from
11,000 in 2003 to about 8,500 employees currently. What is the
target number of employees contained in the workload analysis,
and are we even close?
Mr. Northey. Overall, certainly one of the staffing--what
the staffing model has allowed us to do to be able to look at
those areas where we are the most short in staff, and for us to
be able to fill those areas first. We are targeting every
dollar that we have in salaries and expense from appropriations
to be able to use that for staffing levels.
Ideally, the model says we should have a lot more folks
than what we have right now. We have a lot of work that is
being done out there.
I don't know that we will ever have the funding to be able
to get back to the levels we were in staffing 8 or 10 years
ago. We are going to be as efficient with those staff as we
can. We are right now staffed across our three agencies about
90 percent of what our ceiling is, about what the dollars are
that we have for each of those agencies, and we are working
hard to get that closer to the 100 percent.
We are working to staff up. We certainly have burdened
those folks with several activities, including activities in
excess of the farm bill activities that you have had. But these
are important programs to deliver. We have looked at trying to
improve our software as well to be able to make sure that that
works as easily as we can make it. As we looked at delivering
the Market Facilitation Program, we looked at trying to make
that as easy for our producers, as well as our staff, to be
able to deliver. I think some of those things are helping.
Certainly, some online activities--we don't expect all
producers to use our services online, but having access to that
allows producers to sign some documents, save some miles coming
in, and save some time at the counter as well.
Mr. Vela. What is that staff ceiling number?
Mr. Northey. The staff ceiling number is about, I can get
those numbers exactly for you, but it is about 10,000 for FSA,
and we are around 9,000 right now for FSA.
Mr. Vela. Fair enough.
One last question. Can you explain the rationale for the
timing of the Agricultural Risk Coverage and Price Loss
Coverage election and enrollment process? As I understand it,
farmers and landowners can go to their FSA county office today
and make the election for 2019 and 2020. However, they can only
enroll for the 2019 program right now, because enrollment for
2020 does not begin until October 7. Is that the best way to
describe the situation, or maybe more open-ended, can you
describe what is happening in that regard?
Mr. Northey. It is. We are taking sign up for 2019 right
now. We will start sign up for 2020 in the midst of this, and I
don't remember that date. I believe it is October, and so we
will have folks that will be able to come in and sign up for
both, but right now, we are taking that 2019 sign up.
That sign up will continue through March.
Mr. Vela. Thank you.
I now recognize the Chairman of the full Committee, Mr.
Peterson, for 5 minutes.
Mr. Peterson. Thank you, Mr. Chairman.
I have a couple questions, but one of the things you said
has me concerned, that you are going to have crop insurance for
hemp, and I guess that was ordered in the farm bill or
something, or in some place?
I have been investigating this, and I am going to be doing
more in the next couple of weeks, but I don't see how in the
world you are going to come up with a product for hemp, given
what I have found out about it. Do you think you are going to
be able to do this?
Mr. Northey. Certainly, you handed out the challenge. The
challenge is coming up with a product that fairly represents
the risk, understanding how it should be priced.
Mr. Peterson. Good luck.
Mr. Northey. Right now, what we will offer for sure is the
ability to include it in whole farm revenue protection. That is
a policy that includes all crops on a farm, and in that case,
we typically will just work with folks that have a history of
growing it. And so, in that case, we would have some previous
revenue from that farm.
There are some folks that are looking at coming up with
individual policies. They are diving in to some of the
information coming from those areas where they have been
growing hemp.
Mr. Peterson. Well, after my next 3 weeks of the
exploration, I will have a report for you. Okay?
The question I have is about the staffing situation. As I
understand it--and I don't understand it. Apparently, I have
heard that you guys asked under the budget for additional
resources or positions or something, or that the budget said
that you should have additional positions or resources. But
then when you asked for the appropriation, you did not include
that.
Going back in history, we had 11,500 people working at FSA
offices in 2004. Today, we have 8,500. I would argue we have
more work today than we had in 2004. In my area, I have people
now that have turned their offices into kind of a part-time
office and the CED, like in my county where I go, is now
spending a day or 2 a week in the county next door because they
have turned it into a part-time office that I think is only
open a couple days a week. When he comes down from that other
county to staff it, I think he even brings people from that
other office with him, to staff it at the time.
This county that has gone part-time is a completely
agricultural county. There is nothing else there in the county,
and I don't understand how all this happens. But my concern is
that we don't have the staffing out there that we need. And I
don't know if you asked for it and didn't get it, or whether
you have some other plan going on here that we are not up to
speed on. I don't see how this is going to work. Do you have
some magic bullet here that I don't know about?
Mr. Northey. There certainly is no magic bullet in being
able to serve all the needs out there. We do use as much
technology as we can, but, the budgeting process is a
challenging process. It is about making lots of choices. You
all deal with it as well, and being able to look at where you
have funds available. We sure gladly would use more folks if
there were more dollars to be able to get more folks.
Mr. Peterson. Did you ask for more dollars, did the
Administration ask?
Mr. Northey. And lots of proposals inside and outside, and
certainly, we have our process of being able to sort through
the priorities at USDA and through the President's budget, as
well as you all have your priorities and what you need to work
through.
We are looking to do everything we can to stretch the
resources that we are given as far as we can.
We do have----
Mr. Peterson. I am sure you are.
But you also have this Optimally Productive Office report
that Accenture is doing something? They are doing some kind of
study of your offices.
Mr. Northey. Yes.
Mr. Peterson. But that hasn't been completed yet, as I
understand it.
Mr. Northey. Yes, that is ongoing. We actually do time
studies all the time to be able to understand what programs are
taking the most time, what offices and areas are seeing an
increase in time.
Certainly, one of those challenges are disaster programs.
Those occur infrequently. You can't really staff for those, so
you end up really challenged in areas where you have disaster
on top of the other programs.
But this is a way for us to be able to measure the workload
at each of those offices, look across the state, for example,
across Minnesota, and see which offices are the most short in
staffing and make sure that we staff there first with the
available people that we have.
Mr. Peterson. Well, somehow or another, we are going to
have more people in these offices if we keep having disaster
programs and facilitation programs. The workload for the new
dairy program, I mean, it is a lot of things we didn't have
before. And these studies, give me 1 more minute.
We were up on the northern border because the Customs and
Border Patrol did a study of the time, the people going across
the border and all this stuff. And they went and closed my
borders there on a U.S. highway. They went from closing at
10:00 p.m. to 4:00 p.m. in the afternoon.
I have people working on both sides of the border, now
Canada is at midnight and we are at 4 o'clock in the afternoon,
so people come to work and can't get back home. It is just
crazy. And it was one of these studies that did that, that
caused them, they claim, to make these changes. And they have
nine places in North Dakota that have like 20 percent of the
crossings that we have, they left them open until 10 o'clock. I
don't know.
I am skeptical of all these studies, but, I hope we can
work together to get more people out there, because I think we
are short.
Mr. Northey. I appreciate that.
Mr. Peterson. Thank you. Thank you, Mr. Chairman.
Mr. Vela. I now recognize the Ranking Member of the full
Committee, Mr. Conaway, for 5 minutes.
Mr. Conaway. Thank you, Mr. Chairman. I appreciate that.
I share Chairman Peterson's concerns over hemp. I am
worried we have opened Pandora's box.
As an example, as I understand it, if a hemp plant is
stressed through drought or lack of water, the THC levels
skyrocket, and so we are going to be insuring an illegal
product if we are covered by crop insurance. And so, lots of
unanswered questions in that.
Mr. Northey, on the implementation side, in the 2014 Farm
Bill, we allocated some extra $100 million specifically for
implementation of the farm bill. Collin and I at the last final
days of that effort worked really hard to get, we wound up
maybe $15 million. The Senate was willing to go to zero, and
Collin and I fought for some additional monies to help you get
that.
Can you talk to us a little bit about where the stresses
and strains are with respect to the implementation of the 2018
Farm Bill, and what areas you might need some help in?
Mr. Northey. Thank you. Certainly, the $100 million was
beneficial and used and needed, and mostly used for software
and outreach, some additional staffing as well.
In this case, having $15 million, we needed to go and use
some of our other resources to do some of the IT work, and some
of the staffing. We had some other activities we were working
on that we needed to prioritize the farm bill implementation.
Certainly needed to do the IT work for that, and so, we would
reallocate resources to be able to try and get that done.
Mr. Conaway. Can you talk to us about any specific area of
the 2018 Farm Bill, where the choke points are right now
remaining at this point?
Mr. Northey. Yes. The farm bill was our priority, so we
pulled things away from the other things that we were doing,
other modernization of some of our software and other kinds of
things.
We haven't slowed any of the farm bill process down, but we
had some ideas about other things that we were going to do that
we needed to be able to use the resources for the farm bill.
It is our priority to get out, and that is the number one
activity.
Mr. Conaway. But, what I am hearing, though, is you got
other areas that should have been attended to in moving forward
on your normal course of business that have suffered as a
result of the lack of resources that our Senate colleagues were
willing to pitch in.
I want to publicly thank Chairman Peterson for his help on
trying to get the $15 million that we got. It was hard to do,
and dramatically short of the $100+ million that was allocated
in 2014.
Mr. Northey, I thank you for your work and the team you
have in place. They work hours they don't get compensated for.
They are incredible warriors on behalf of producers in this
country. They are neighbors with those folks. They live next
door to them, and FSA offices that I have visited, the folks
love what they are doing and they go above and beyond what
would normally be expected of a Federal employee to make sure
that, to the extent that they can, that our farmers and
ranchers are getting access to these programs that Congress has
put in.
Please convey our thanks to them for their hard work and
their continued hard work, moving forward.
With that, Mr. Chairman, I yield back.
Mr. Peterson. Mr. Chairman, would the gentleman yield?
Mr. Conaway. Yes, sir.
Mr. Peterson. I just need 30 seconds.
I forgot to ask you, you created this new business center
apparently, that now is in the process for hiring. As I
understand it now, the CED and the county and the county
committee for FSA, they used to be able to hire people there
locally. But now, as I understand it, they send this to this
business center, and there is one person here in D.C. that has
to approve that before it is sent back to the county for them
to hire somebody.
I don't think any of us here think that is a good idea to
have Washington decide who should be hired in local FSA office.
Would you look into that?
Mr. Northey. Sure.
Mr. Peterson. I mean, that is what I was told.
Mr. Northey. The decision is still made locally, and in the
State Directors, State SEDs have the authority to be able to
decide what offices those go into as well.
But we can----
Mr. Peterson. They apparently fill out an electronic form,
and that form gets sent to D.C., and then the person looks at
it for uniformity, and if it is not uniform, they kick it out
and it doesn't go back to the county. I don't understand why we
are letting someone in Washington make decisions about who
should be hired in a local county. If you could give me an
answer, I would appreciate it.
Thank you, Mr. Chairman.
Mr. Vela. I now recognize the Ranking Member of the
Subcommittee, Mr. Thompson.
Mr. Thompson. Mr. Chairman, thank you so much. Mr. Under
Secretary, good to see you again. Thank you for your leadership
and your service. Please extend my appreciation to all the
hardworking folks in USDA that are under your responsibility. I
appreciate what they do. We obviously need, and our family
farms depend on, that level of professionalism to be able to
connect them with the resources that, quite frankly, this
Committee makes available through our work with the farm bill
authorizations and reauthorizations.
I want to start out a little bit on dairy. You mentioned
about 21,000 farms are signed up for the Dairy Margin Coverage,
which I read was about 70 percent of the registered dairy
operations. What is FSA doing, specifically, to ensure that the
remaining operations are fully aware of the potential
advantages to participate in a new program? I appreciate the 1
week extension, obviously.
Mr. Northey. You bet.
We certainly got a lot of partners in reaching out to
farmers. Last year, the sign-up for the Margin Protection
Program was just a little over 21,000 as well. We are actually
about 80 farmers short right now of where we were in sign up in
2018, with 2 days of sign up to go. We think likely we will end
up by the end of this week, and certainly by the end of next
week, at more sign up for this program than we did for MPP.
But as you suggest in the question, there are other
producers out there that have participated in the past. Maybe
they are not in business. Maybe they decided not to participate
in this. Other producers that have dairy operations as well
that are not participating, and we are trying to reach out to
those, make sure that they understand the value of this
program, how it works a lot better for our larger producers
than it once did. It still ensures up to the 5 million pounds,
but it works much easier for our larger producers. Certainly,
we have some small producers that historically have not
participated, and we are making sure that we reach out to them.
Phone calls, emails, postcards, everyone got at least two
postcards over this sign-up period. They have been contacted
through their marketing organizations as well, whether it is a
co-op or they are part of an association. We have worked with
them all to reach out as well.
We have done all that we can. We will continue to do that
the next week, and we are hearing good reports that a lot of
folks know. I assume we will see a significant bump in the next
couple days, but it is important still to be able to give folks
another week to make sure that if they have lost track of the
date, that we get a chance to be able to touch in one more time
and get them in to be able to make that conscious choice.
Mr. Costa. Would the gentleman yield?
Mr. Thompson. Sure.
Mr. Costa. I think there is bipartisan support here. I
don't know if you need a letter from us, but that flexibility,
as I said in my opening comments, it is important for the
Department to exercise.
And so, what you are saying is that you are exercising that
flexibility, but it is important, notwithstanding all the
efforts you have made that you indicate you will be
entertaining until the end of the month or whatever time
period, makes sense.
Mr. Northey. Right now, we are announcing today that
extension for 1 week, and so from the 20th to the 27th. We do
have to watch about getting much later than that, because we
need to have sign ups start for the Dairy Margin Coverage
Program for 2020 that first week of October, and we need to be
able to get folks completed in this sign up period. So, that is
our intention right now.
Mr. Thompson. And each of us have a responsibility as well.
I know the month of August, and it continues today, I take
every opportunity, whether it is a Farm Bureau legislative
session on a farm, I was at the All-American Dairy Show on
Saturday in Harrisburg, about 2,400 head of cows there with
kids showing them. The Dairy Summit, Secretary Perdue joined me
for, just to encourage our farmers to sign up. This is a
product that does work for everyone. It is affordable, and I
appreciate it.
In the few seconds I have left, and I am not really looking
for a response, but I do want to reach out to the Department on
our other big crop that I have in my district, and that is
hardwoods. Our hardwoods have been hit hard with this tariff
situation, yet there has been no relief. I think there are two
things. We need to look at, first of all, we need to get these
tariff deals done. That is a priority, but if anything extends
for any period of time and there is a second round, we got to
look at how we help these hardwoods. They have been at the tip
of the spear of losses, and for those in the business that have
contracts on our National Forests, or Army Corps of Engineer
lands, one of the simple solutions is just to extend the
contracts they may have for another 24 months, because they are
being forced to harvest when the market, they are harvesting at
one level and their market is not there.
But, that is something I will follow up with the
appropriate folks at USDA on.
Thank you.
Mr. Northey. Very good. Thank you.
Mr. Vela. I now recognize the Chairman of the Livestock
Subcommittee, Mr. Costa, for 5 minutes.
Mr. Costa. Thank you again, Mr. Chairman.
As I said in my opening comments, I don't really believe
anyone wins trade wars, because everybody has leverage, and
whether it is part of their strategy or for political reasons,
certainly the Chinese recognize that. And the leverage they
have chosen to use in not buying U.S. agricultural products has
really hurt farm country. Of course, at any point in time, and
the President is correct, the Chinese have been bad actors and
this has been for 20 years, both as it relates to industrial
theft as copyright issues, and even when we have won in the
World Trade Organization, they haven't complied. They have been
bad actors, and that was recognized in the Obama Administration
and the Bush Administration before that. There have been
different strategies used to try to deal with it.
Certainly, they can buy more agricultural products because
they need them and they have the money, but this is part of a
strategy. You are not the trade ambassador. I don't hold you to
that responsibility, but let me just tell you, when we are
talking about California and specialty crops, a $50 billion a
year ag industry in California, of which 44 percent, more or
less, is dependent upon trade, it is hitting hard throughout
the country, but especially in California. Pistachios, almonds,
beef, citrus, table grapes, walnuts, plums, cherries, avocados,
face now over 50 percent tariffs on exports to China. The
California Walnut Commission estimates that their industry will
lose nearly $100 million annually due to the Chinese trade
dispute, and meanwhile, California farmers, to my numbers that
we have come up with, have received about $80 million in total
payments in the first Market Facilitation Program. You know,
that doesn't cut it. I mean, you can go down the list: 3 a
pound for almonds, 6 a pound for cherries. I mean, we think we
have lost about 30 a pound on the almond market, 3 doesn't
come close.
I talked earlier about the 12 per hundredweight on dairy.
Nationwide, the dairy industry estimates that they have lost
more than $2.3 billion in revenue since the trade war began,
and they have received about $200 million in the first round.
Beyond these losses, we are losing market share, as I said
earlier, to our competitors, and those relationships are tough
to rebuild after, hopefully, we get past this.
While I mentioned it is not your job to negotiate the
treaties, the President said that he was making farmers more
than whole, and the farmers are doing better than if China were
buying. As I said, California farmers disagree with that.
Mr. Under Secretary, do you agree with the President? Will
the second round of trade aid make farmers more than whole, and
are they better off with this than they would be with access to
China's market or other markets?
Mr. Northey. Everybody is working for a better trade
situation, not only for the products we were exporting, but the
products we were struggling to export. That is where the real
gain will be.
Our Market Facilitation Program was a bridge to get to
that. It is certainly hard in that Market Facilitation Program
to deliver exactly what a producer lost.
Mr. Costa. Well, it is not possible.
Mr. Northey. It is not.
Mr. Costa. But, $16 billion, is that the current number
with the two programs so far, or it is going to increase?
Mr. Northey. It will be $14.5 billion for the----
Mr. Costa. And you are spreading that around the whole
country and in the Midwest, and you are talking about sorghum
and wheat and corn and important commodities. The California ag
industry is $50 billion. You try to spread $16 billion across
the country and you talk about different states, I know farmers
don't want subsidies. We have gone through this a whole lot
over the last 20 years of farm programs. They want access to
markets. They want level, fair trade, and with 44 percent of
California's agriculture depending upon trade, I mean, it is
the reason we need to get this USMCA agreement completed,
because it is so important to our country, as well as to our
neighbors to the north and to the south.
What is the implementation going to be in this next round?
Mr. Northey. We are still getting sign up for participation
in this program up until December 6. We have told all producers
that the first 50 percent of this second round of MFP is
guaranteed. We will look to see whether the second and third
payments are needed. If we get a trade deal, then we will
reevaluate. We certainly hope that we get a trade deal before
this----
Mr. Costa. But it doesn't make up for the loss of markets.
Mr. Northey. No.
Mr. Costa. Okay.
Mr. Northey. It certainly is a support for producers. It is
important to be able to have something, and I think it is a
recognition by the Administration how important trade is to
agriculture. And it is a great reminder, and an appreciation
for the role of trade and why there needs to be an active
participation, and trying to get to that trade deal that is
better on the other side.
Mr. Costa. Thank you.
Mr. Northey. Thank you.
Mr. Vela. I now recognize the Ranking Member of the
Livestock and Foreign Agriculture Subcommittee, Mr. Rouzer.
Mr. Rouzer. Thank you, Mr. Chairman, and Mr. Under
Secretary, thank you for being here with us today. I, too, want
to commend the entire team at USDA and all those FSA employees
out there that are working really hard, as well as all the
other employees at USDA. They do a lot of very, very important
work very, very well, and in many cases, with limited resources
too.
I want to focus in on the Disaster Relief Act. Roughly $3
billion, those of us in the Southeast worked really, really
hard, including my friend here to my left, Mr. Scott, on
getting this disaster relief package across the finish line.
What do you expect to pay for the losses in 2018? Do you
have an estimate of what that is going to consume, and then a
follow up to that is how much of that money do you think is
going to be block-granted to the states? If you can talk about
your plans and thoughts on that as well?
Mr. Northey. It is a challenge to estimate what actual
losses were, as we did in 2017 as well. Certainly, it is likely
between $\1/2\ billion and $1 billion in losses that occurred
from the hurricanes in 2018. We know that there was some
coverage that was covered by crop insurance, but this is to top
up some of the crop insurance losses as well, to try and cover
some of those other losses.
For block grants, we are still in discussions with the
states as they continue to bring forward their thoughts in what
block grants should cover. As you all outlined in the disaster
bill too, this isn't designed to top up existing programs. This
is designed to cover those things that are not covered in
existing disaster programs, or in WHIP itself. And so, maybe
timber and other kinds of things.
We are still in conversations. It will be in the several
hundred-million-dollar range, but it will depend what their
proposals are, and what they conclude those losses are. And
then, of course, the real proof is when you go out to the
producers and how many producers have losses and are interested
in signing up.
We don't have a set number of what that dollar amount will
be. Certainly, it is going to be very important to many of the
producers.
Mr. Rouzer. To follow up to that, when a producer goes in
and he files his application, how long do you think it is going
to take to turn that around?
Mr. Northey. Well, depends how complex that application is,
and we already have some producers that have completed
applications. And so, in some cases, it is fairly
straightforward. They have the information from their crop
insurance information last year, and so they are able to
complete it very quickly. In other cases, we have producers
that have not participated in farm programs before, and so they
have to establish eligibility first. They have to go get some
of that information, and so there are other additional
challenges for some producers out there. They don't have
acreage reports to be able to look at history and to compare
history to what the losses were in that year.
For the most part, we think it is going to be fairly quick
for most producers, but there will be some of the applications
that will be more complex or cover things that have more
questions and require more information from the producer.
Mr. Rouzer. What about the timing of the payment, though,
once that application is complete, everything is done
correctly, et cetera? Are we looking at a month, or 2 weeks, or
2 months?
Mr. Northey. Right now, we are still making some final
changes in software on that payment mechanism, so that should
start pretty soon. And once a producer completes that
application, it should be certainly within 2 weeks that they
would be able to get a payment for that application, and
hopefully less than that.
Mr. Rouzer. Just for your awareness, and I don't know
necessarily that this is why it spread, but I have gotten some
feedback from producers that when they go to the FSA office,
they are told that they have absolutely no idea what they are
going to be eligible for, and maybe that is just a situation as
it relates to the application process itself. But you know,
producers walk out of there pretty dejected when they don't
have any idea and they are told they are not sure what they are
going to be able to receive. I don't know if that is an
education issue in some of these offices where the employees
have not been brought up to speed on exactly what is entailed
in the disaster program, but I have heard that, so I just want
to make you aware.
Mr. Northey. I would love to be able to hear about those
cases and where we can get more information out. For the most
part, many of the places where that program is being
implemented is around hurricanes and where areas that are very
familiar with the software, since the software we are using is
very similar to software and criteria that we used in the 2017
program. For many cases, we have a lot of folks that had some
experience implementing that program as well before, but then
we have been able to have training. I sure would love to find
out if there are some places that we missed that we need to be
able to get more touch to some of our employees out there. We
have both online and in-person training, train the trainer as
well, and we need to make sure that it is such that when a
producer comes in, they have competent, capable, and interested
person across the counter to be able to help them walk through
that application.
Mr. Rouzer. My office will follow up with you on that.
Thank you very much. I yield back.
Mr. Northey. Thank you.
Mr. Vela. I now recognize Mrs. Hayes from Connecticut.
Mrs. Hayes. Thank you, Mr. Chairman, for holding this
hearing, and thank you, Under Secretary, for being here.
I represent Connecticut, and my questions are specifically
about our dairy farmers. We have about 80,000 working acres of
dairy farms, which account for about 4,000 jobs, so much
smaller than some of the other districts that we have heard
about, but I think that is the cause for so much of the concern
in my community.
In 2018 in Connecticut, we had about--actually, we had 110
licensed dairy farmers, and as of Monday when my staff checked,
only 66 of those farms had applied for the Dairy Margin
Coverage. For a program that is guaranteed to provide
protection and support in those margins, why do you think
enrollment is not higher?
Mr. Northey. I don't know in those cases. Certainly,
outreach has been tried. In some cases, I don't know how
Connecticut specifically compares to what its sign up was for
MPP a year ago, and whether there are some producers that
choose not to participate, there are certainly groups of
producers that choose not to participate in any program at all.
I, again, don't know specifically in Connecticut. I was on
a beautiful dairy farm, modern and wonderful dairy farm in
Connecticut a few months ago, and I know we have been reaching
out to producers, both by postcards and emails and phone calls
to be able to let producers know about it. We have another week
to be able to reach out to folks. If you hear of reasons or
producers that have not been contacted or not aware, we
certainly want to be able to make sure that they are aware and
understand.
This is a great program. This is a program that is going to
be very constructive. Right now, we know they will actually
make money in 2019 because of that, but most importantly, in
the long-term, this is a great risk management program. For a
small amount of money for the future, a producer can know that
they have a protected margin in that program. And so, we are
seeing about half the producers sign up for 5 years of the
program, a little short of half of the producers, and
certainly, many of the folks that have signed up for previous
programs are signed up. We continue to lose some dairy farms in
all parts of the country, so compared to the long-ago history,
we have less participation than what we have in some of those
producers with historical production. In some cases, some of
them were not able to stay in business, and we think we have
reached out to all the folks, but we are glad to continue----
Mrs. Hayes. Well, we have seen that in Connecticut.
Mr. Northey. Pardon?
Mrs. Hayes. We have seen it in Connecticut that some of
these farms have gone under and they are not able to stay in
production. And I agree with you that this is a great program.
But, as I am hearing you talk about just ways of outreach, I
know in my district specifically in Connecticut 5, broadband is
tremendously unreliable. If we are using email as a method to
communicate with people, I know on my staff, we have gone out,
we have done roundtables. I have met with farms. I would have
loved to have joined you on a farm just to really be face to
face and talk to people and say this is what is available,
because I fear that people are missing out on the opportunity
because they don't know that it exists. If there is anything
that Members of Congress can do to help you, because it sounded
like when the Chairman asked about have you asked for increased
staff, it didn't sound like a hard yes. But, I think that is
something that we would all be willing to support, because I
know it is life and death for my community that there are
people on the ground to assist them in the process. If there is
anything that we can do, I would love to engage in that
process, because I think that when we have these large
conversations, the small farmers feel left behind and are
afraid of what the next step is or where they fall in this
conversation. I think it is critically important.
I know we go to the places where there are the most people
and we make the most impact, but farming covers all
communities, as you well know.
Mr. Northey. Absolutely, and thank you for--many Members
have done a great job in their own communication out to
constituents as well as mentioned it at public events, reminded
folks. We will give folks another week, another opportunity to
be able to remind them that the deadline is a week from
tomorrow.
Mrs. Hayes. Have you used public radio?
Mr. Northey. We have used radio and we have had our----
Mrs. Hayes. Because my farmers love the radio. Well, not my
farmers, your farmers too, I am sure. But with the radio I
communicate with them a lot, and I know I send out mailers and
people don't really read them. I am just thinking of anything
that we could do to make sure the information is shared.
Mr. Northey. I am glad to continue to reach out and do
whatever we can to make sure that people hear about it.
Mrs. Hayes. Thank you.
Mr. Northey. Thank you.
Mr. Vela. I now recognize Mr. Scott.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. I
suppose my friend and colleague Congressman Bishop's district
probably had more ag losses from 2018 than I did, but I believe
that I am second of the 435 Members of the House with regard to
the losses from storms for 2018.
We know the old saying, the bigger you are, the harder you
fall. Certainly, we recognize that is the case in agriculture.
The payment for WHIP, the upper payment limit was reduced from
$900,000 to $250,000 for the 2018 storms. It was $900,000 for
2017. Can you tell me why that reduction was made, just
briefly?
Mr. Northey. Certainly, in discussions, both internal as
well through across government, we had several conversations
looking at how many folks would hit payment limits, as well as
managing the dollars, recognizing that there is a limited
number of dollars to be able to cover not only losses in 2018
and losses up until now in 2019, but for the balance of 2019 as
well. We don't know what further losses might be.
Mr. Austin Scott of Georgia. Absolutely, and that brings me
to the second point, and forgive me, on a 5 minute clock, I
want to move fairly quick.
We put $3 billion in. That $3 billion was for the 2018
storms, and just for the other Members' knowledge, now that the
2019 storms are going to be paid out of that $3 billion amount
that was allocated for 2018, can you tell me how much you
estimate the 2019 losses to be?
Mr. Northey. We are going to agree here, no more
hurricanes, right? No more disasters, but as you say, it is the
balance of 2019, up until now, and going forward as well.
Mr. Austin Scott of Georgia. What are the losses to date to
be paid out of the $3 billion?
Mr. Northey. We haven't had a large number of losses to
date.
Mr. Austin Scott of Georgia. We had the Midwest floods.
Mr. Northey. What was that?
Mr. Austin Scott of Georgia. The Midwest floods, do we not
have an estimate on that yet?
Mr. Northey. Much of the Midwest floods, the actual
coverage will be through crop insurance, either prevent plant
through crop insurance or other crop losses through crop
insurance, so we will see a few payments going there, but most
of the WHIP payments will go to hurricane areas.
Mr. Austin Scott of Georgia. There is almost $1\1/2\
billion left over from the 2017 disaster payments, is that
correct?
Mr. Northey. There is.
Mr. Austin Scott of Georgia. Just for the Committee's
knowledge, I have asked that the 2017 money be appropriated for
the storms of 2018 and 2019.
Forgive me, Mr. Secretary. I know I am moving fairly fast.
I have a lot of things I want to bring to your attention.
The USDA gave an estimate on November 29, 2018 of the total
losses for 2018 to date. The USDA requested a total of $1
billion for Alabama, California, Florida, Georgia, Hawaii,
North Carolina, South Carolina, and Virginia. We have not seen
any updated estimates for the 2018 storms. Are you aware of any
updated estimates from your economists for 2018 since November
29, 2018?
Mr. Northey. I am not. If there have been, I have not seen
what a number would be.
Mr. Austin Scott of Georgia. I am not either, and that
concerns me greatly.
And I, again, apologize for moving so fast, but for
example, and I have the breakdown by commodity group by state.
Your economists, USDA's economists, said that the Georgia
cotton loss was $260 million. Indemnity estimate was $111
million, and $148 million would end up as the net uninsured
loss. According to our ag institutions, the University of
Georgia, the land-grant institutions and their economists,
while you have $260 million in that slot, we show it as $550
million.
I can go down to pecan trees. You show it as $70 million.
We show it as $260 million. Again, these are land-grant
institution economists that we have provided this information
to the USDA and asked for updated estimates on what the losses
are.
My concern is when Congressman Bishop and I were arguing
for the $3 billion for the storms, we had the information from
the land-grant institutions. Georgia, Florida, North Carolina,
and we could not get the USDA to move off of the $1 billion
request. We effectively forced it, if you will, to the $3
billion, and to this date, almost a year later, my farmers have
not received any payments yet from the storms, as you know. Not
your fault at all, but I don't understand why the estimates
have not been updated from November of last year when we know
they are not accurate. And I, quite honestly, think the $3
billion will end up falling very short of what the actual
losses were. I am talking about uninsured losses for the 2018
crop year, now we are taking 2019 storms out of it, while at
the same time, we have $1\1/2\ billion sitting over there in a
lockbox that can't be touched.
Any help from the Administration in moving that 2017 money
into whatever we do in a continuing resolution or
appropriations process so that it can be used for the 2018 and
2019 storms, it is money that has already been appropriated. It
just can't be used. But I am very concerned, and I appreciate
you. I appreciate your experience in agriculture. I am
concerned with the USDA's economists' estimates. I am
concerned, and I would suggest that this cannot take a year the
next time somebody goes through a storm the way the State of
Georgia did. My people would not be farming today but for a
loan program through the Georgia Development Authority that
Governor Deal and the state legislature did in a special
session, and then Brian Camp in our state legislature came back
in and put more money in it, and they should not have to do
that. But for them, my people would not be farming today.
I look forward to the updated estimates from USDA's
economists. Thank you, sir.
Mr. Vela. I now recognize Mr. Cox from California.
Mr. Cox. Thank you so much, Mr. Chairman. Great to have you
here today, Under Secretary Northey.
I have a question regarding the Pima Competitiveness
Program. As you know, Pima cotton is not eligible for the
traditional farm bill safety net programs, and one of the farm
bill provisions important to many California cotton producers
is the extra long staple, the ELS, or Pima competitiveness
program (Special Competitive Provisions for Extra Long Staple
(ELS) Cotton). And just like the majority of farmers and
ranchers in my district, cotton producers are being harmed by
the trade war with China, resulting in naturally lost markets,
and pretty quickly declining market prices.
My office and others have been working with the USDA and
the cotton industry to make some needed updates to the Pima
program, which the Secretary heard about from some growers in
my area during his recent visit to California a couple months
ago.
But it is my understanding that the needed changes to the
program are being held up by the OMB, so what can you and the
Secretary do to help us get this done, and how can this
Committee be helpful? Our Pima growers are suffering, and with
this year's crop currently being harvested, we need those
program updates as soon as possible.
Mr. Northey. I appreciate that. I am restricted from
conversations about activities at OMB and the actual proposals,
but we continue to evaluate the inclusion of other varieties
within that formula that would potentially impact the support
through that program.
Mr. Cox. Okay. I mean, anything that this Committee could
be doing ourselves?
Mr. Northey. Just continue to provide information about why
there should be adjustments to that program from the point-of-
view of your producers is always valuable.
Mr. Cox. Okay. Then I have a question regarding the Dairy
Margin Coverage Program, and organic dairy farms are also
eligible for the program. And I would like to hear about any
specific outreach you have done to reach this section of the
industry?
Mr. Northey. We have reached out to all sorts of trade
groups and trying to be able to reach out to their producers.
We certainly can get you the information about what our touch
has been specifically to organic dairy producers. But, their
associations have been involved as well, and their marketers
have been involved in reaching out to their producers,
recognizing that they qualify for that program as well.
We can get information about what has gone out. I am not
personally as familiar with each of those outreach efforts.
Mr. Cox. Okay. That is all I have, and I yield my time.
Thank you so much.
Mr. Northey. Thank you.
Mr. Vela. I now yield to Mr. Marshall. Sorry, I now yield
to Mr. Hagedorn, for 5 minutes.
Mr. Hagedorn. Thank you, Mr. Chairman. Under Secretary,
nice to see you again.
I would just like to focus a little bit on the Market
Facilitation Program, and some of the farmers out there,
especially in southern Minnesota, have questions. I know you
have answered this in the past, but I thought maybe it would be
good to revisit it, as to why maybe people in counties in my
district are receiving $60 or $70 per acre, whereas in other
parts of the country could be upwards of maybe $150 an acre. It
can vary based on ZIP Codes and counties and could be
neighboring counties getting different numbers for the same
crops. Could you just maybe go over that a little bit again,
and help us with that and how the calculations were made?
Mr. Northey. I can. Thank you, Congressman.
The formula that was figured out to figure out, as you
remember, we established the criteria for the payment for the
Market Facilitation Program during planting, so we wanted to be
able to not incent the growing of one crop versus another, so
that is why we went to a county payment rate for whatever a
producer was planting, they would get the same payment rate.
And we would not influence those planting decisions. But then
we had to figure out what that payment rate would be, and we
looked at those crops that were grown in each of those counties
and how those crops were being impacted by the trade. Some
crops are being impacted by the trade tariffs to a greater
degree than others. They, in some cases, export more of their
products. In some cases, export more of it to China where we
have had some issues. Obviously, in the first round, you saw
some difference between corn and soybeans because they are
impacted differently. Certainly, cotton is one of those that is
impacted greatly. Some of the other products are impacted to a
greater or smaller degree.
What ends up in that final payment is the mix of the crops
that are grown in that county, and the impact on the value of
those crops based on the loss of the markets to both tariffs
and historical non-tariff barriers as well. The Chief
Economist's office looked back over the last 10 years to be
able to look at when we had higher trading years and what non-
tariff barriers might have been added through the years as
well.
And so, the differences, there are some places where the
average acre in that county, which is the mix of acres in that
county, have a higher impact per acre than others in other
counties.
Mr. Hagedorn. I appreciate you clearing that up again.
I know these subjects that I am about to bring up don't
necessarily directly impact you, but you have some fine folks
behind you that you all go back and talk to the Secretary and
report to the White House and others. What has been going on in
farm country for 5 and 6 years with the low commodity prices,
high input costs, it is tough and it is having a cumulative
effect as we go through the trade negotiations.
There have been some good things done, and people miss
that. Regulatory reform, the things that the Administration has
taken on with some of the folks up here on the Hill, that has
been excellent. Getting rid of that high cost energy and having
U.S. energy independence, which is important to agriculture.
The tax reform bill was good for our farmers. Obamacare and the
Affordable Care Act, that has really crushed them, and we need
to do better there and get that down.
But on trade, my message is this. They understand that
China has been cheating, and we have to do something. But they
really want it solved as fast as possible, and I know that you
are working on it, and the trade rep and the President and
everybody else is committed to that. And so, we just continue
to encourage to get a result as fast as possible that is good
for the whole country.
Second, on biofuels, you got to keep working in that area.
I know they are looking at making some announcement hopefully
in the near future, whether it is buying back the gallons. But
we need that program implemented the way that Congress
intended. You can't let the bureaucrats and others decide that
they are going to reinterpret the statutes. We should be
following the law of the land, and I hope we can get that
worked out because it is critically important for our corn and
soybean farmers in southern Minnesota.
And last, this is just something to make sure that you stay
apprised on. This African swine flu that has really crushed
things in China, maybe half their hogs, obviously demand for
soybeans would be down. We can't have that here, and I know you
are working hard, the whole Department is, to make sure that we
keep it out of the United States, keep it out of North America.
But that would be devastating to farmers in an array of areas.
And so, I appreciate your attention to that.
Thank you.
Mr. Northey. Thank you.
Mr. Vela. I now recognize Mr. Van Drew.
Mr. Van Drew. Thank you, Mr. Chairman, and welcome, Under
Secretary. It is good to see you. I am from southern New
Jersey, which is a lot different than northern New Jersey.
When Secretary Perdue was before the full Committee in
February, he told us he didn't think a second round of trade
payments would be necessary or likely, but we, obviously, are
in the midst of a second round.
I want your opinion. Do you think at this point, from what
you hear from the people you speak to; because, you are going
to have to be ready. Do you think a third round of payments is
likely at this point?
Mr. Northey. I am still hoping that the second and third
payments of the second round are not necessary, because we are
back to a better trade environment in the short-term. Right now
we are focused on being able to make these payments now for
producers. I did not believe there was a likelihood of a second
round. I thought it sounded to me that we were very close in
agreement, and that certainly would have been preferable for
everybody. But when an agreement could not be reached, it was
important to be able to stand up for the producers, be able to
support producers in this challenging time.
Mr. Van Drew. Of course. I agree.
Mr. Northey. I don't know. I wouldn't----
Mr. Van Drew. I just hoped you had some inside info.
Mr. Northey. No.
Mr. Van Drew. No.
There are significant differences between the 2018 Market
Facilitation Program, the MFP, and the 2019 edition of the MFP.
Most notable is the approach towards how payments are
calculated, which is based on actual production last year, but
this year is on a per acre basis. Can you offer the rationale
or the reasoning or the decision making why that was done?
Mr. Northey. That is a great question. In 2018, we
established the Market Facilitation Program going into harvest,
when we would be very close to be able to have harvest numbers,
and we could look at actual production as producers could bring
that information in to their FSA office and be able to provide
that information.
As we looked at 2019, we looked at a crop that was growing,
or in some cases, not even planted yet. We wanted to make sure
and not influence that planting decision, so we needed to be
able to have a producer that was considering between two crops
just look at what the market asked for, not look at a Market
Facilitation Program payment, which would have been different
than the first time around if we had instituted that in 2019.
We wanted to go to an acre payment to be able to provide
that continuity, and yet, predictability that there was support
for producers that were impacted by the trade situation in
2019.
And so, that is why we went to the acre payment in 2019.
Certainly, one of the criteria for both programs was to make it
pretty straightforward for a producer to be able to come up
with the information that they needed to comply, make it as
straightforward as possible for our offices as well to be able
to deliver it, because we were adding that onto the work that
was being done in our offices and the work that a producer
needed to go through. I think both met that test, even though
they were delivered differently, because they were delivered at
different times of the production year.
Mr. Van Drew. And you believe by using that combination,
varying on the circumstances, you achieve the maximum accuracy?
Mr. Northey. I think so. It is a challenge to be able to
predict what market impacts are of trade disruptions. The chief
economists did a great job of being able to analyze that, get
the information back. Certainly, there will always be
disagreements of whether that was enough or not or whether it
was balanced the right way. But I think we did, and then to be
able to deliver it the way that we did also minimized the
disruptions that the payment could have caused if we had gone
commodity by commodity payment.
Mr. Van Drew. Okay. This trade aid has created a situation,
as you know, where some farmers are getting direct payments
while others, like a lot of fruit and vegetable growers,
particularly in my area, have to hope that the USDA's purchase
of their products will be large enough to move their whole
market.
Can you share why some of the commodities that were
impacted by the trade war received MFP payments, while others
received purchases?
Mr. Northey. As we looked at the commodities that were
being impacted, you can look at certainly some of the specialty
commodities that were being impacted. For some of them, we
could replace that demand by creating new demand by buying them
and having them offered through food banks. Hopefully that even
creates additional customers in the future. In other
commodities, that wasn't possible or we couldn't supply enough
if it was dairy or pork. We did some purchases, but we also
needed to make some direct payments. Of course, we didn't have
any way with the larger commodities, cotton or corn or
soybeans, to be able to offer purchase and have a place for
those all to go.
It made sense to be able to use the purchases wherever it
could make sense to be able to offer that through other
outlets, hopefully creating additional customers, and then
provide direct payments to those that we were not able to
provide purchases to.
Mr. Costa [presiding.] The gentleman's time has expired.
Mr. Van Drew. Thank you, Mr. Under Secretary.
Mr. Northey. Thank you.
Mr. Costa. I thank the gentleman.
The chair will now recognize the gentleman from Georgia,
Mr. Allen.
Mr. Allen. Thank you, Mr. Chairman, and Mr. Under
Secretary, thank you for being here today.
We have already heard a lot about the situation in Georgia
with the disaster, and crops being in direct path of the
hurricane, and the losses from infrastructure and communities
just devastated. It took a long time, but we now have a
disaster relief package, and through this process I continue to
hear from my constituents not only the need for immediate
disaster assistance, but also the concerns of fixing the
problems they experienced when signing up for the previous WHIP
Program.
To this, Mr. Under Secretary, what has FSA done to ensure
that the new WHIP+ Program is being implemented effectively and
efficiently throughout all the local FSA offices?
Mr. Northey. As we have made sure that our staff is well-
trained in the program, we have made some IT improvements as
well in the way that the program operates, including the
payment mechanism being hooked directly to the program
mechanism, so that allows a little more efficiency in the
offices.
It is a challenge for producers when we are looking at
individual losses, and that is the way this program was
designed, to be able to look at individual losses. If you and I
are across the fence from each other and you suffered a 60
percent loss, I suffered a 40 percent loss, and yet we are in
the same neighborhood, we will pay based on the relative loss.
And that requires a certain amount of paperwork. Often that
information is already available from the crop insurance
records. Again, that loads fairly quickly into the WHIP
Program.
Mr. Allen. Okay.
Mr. Northey. Where we end up----
Mr. Allen. Can you define relative loss?
Mr. Northey. Pardon?
Mr. Allen. How does relative loss work, are you balancing
out the losses across a certain area, or how does that work?
Mr. Northey. We take each individual operation's loss. We
don't take a regional loss, we take an individual operation's
loss, and then we take into account what that operation
received for crop insurance payments as well, and then we have
a formula to be able to have a higher amount coverage than crop
insurance, but never more that what a full guarantee for crop
insurance would have been.
No producer in this case, even with these payments, is
going to be better off than they would have been had they had a
crop, especially those producers that had a really good crop
coming, and we had that in some cases. They will only be
insured or they will only be covered, or we only compare
against what their expected normal crop would have been.
Mr. Allen. All right, and I understand this became
available last Wednesday. Is that correct?
Mr. Northey. It did, yes, on the 11th.
Mr. Allen. Okay, and you did comment about the software,
and when will the software be readily available to the FSA
offices?
Mr. Northey. It is out there now and they are working. We
have seen some applications back. Certainly, if you hear any
different, I would love to be able to hear about that.
Mr. Allen. Okay.
Mr. Northey. But it is out there working. We had it
available for folks. We are not now yet for those first
operations making those payments. That will occur within the
next few weeks.
Mr. Allen. Right.
Mr. Northey. Once that happens, then we will start making
payments as soon as----
Mr. Allen. In addition to the WHIP+ Program, I worked
tirelessly to secure disaster assistance for our blueberry
growers who suffered losses in the 2017 late season freeze.
When do you think that the provision that was included in the
disaster relief package made available funds to expanded
coverage of the previous 2017 WHIP package? When will growers
expect to receive this and how will this be distributed?
Mr. Northey. Yes. That sign up started last week as well,
so that started on the 11th as well. I assume we have producers
that as soon as they are aware of that are coming in the
office. Again, that is using the 2017 program, so the 2017
software, payment limits, other things of 2017, and that is
already available and we should have producers certainly
possibly signing up for that program right now.
Mr. Allen. Well, speaking of the trade situation, when
Secretary Perdue came to his first hearing here, I said then,
``Farm income was down 55 percent,'' and this was before we
ever got into trade negotiations. And I said, ``What are we
going to do about these low commodity prices?'' And he said we
have bad trade deals. I don't know what the answer is.
Obviously, lots of people have been impacted by these
negotiations, but then again, the reason that we have terrible
trade deals is we have an election in this country every 2
years, and people who are in public service don't want to take
the risk of trying to fix these things.
And so, this President has taken it on and I just pray that
we can get a quick resolution to this thing, and have a fair
free trade, because our farmers can compete with anybody in the
world.
Mr. Costa. The gentleman's time has expired.
The chair will now recognize the gentlewoman from Iowa,
Congresswoman Axne. Welcome.
Mrs. Axne. Thank you. Thank you, Chairman and Ranking
Members. Thank you for the opportunity to join this joint
Subcommittee hearing on disaster recovery, and thank you, Under
Secretary Northey, for being here. You know it is always great
to see you.
As a fellow Iowan, you know as well as I do how devastating
severe flooding can be, and how long the recovery process can
take for our communities. Southwest Iowa, as you know, is still
reeling from the massive flooding that occurred this past
spring. Entire towns, such as Hamburg and Pacific Junction in
my district went completely underwater, and have been estimated
to lose billions of dollars in damages, and of course,
agricultural losses throughout Iowa.
But we all know that risk isn't over. In fact, western Iowa
is currently experiencing another round of potentially severe
flooding. I have been closely monitoring the situation and
spoke with emergency management coordinators last night. But
the current situation further underscores the urgency of what
we are talking about here today. And when I traveled the
district and, you and I have worked on this together and saw
the damages in the spring, of course, what I was impressed with
was the resiliency of Iowans. Of course, we didn't wait for the
government to come in and do the job. We got to work themselves
and they helped one another start that really difficult and
long road to recovery.
Church congregations were putting out meals for those who
didn't have one. Neighbors helped muck out each other's
basements, and farmers, of course, donated hay to each other
for their cattle to graze.
But the bottom line is, is that while Iowans got to work,
we need to ensure that the Federal Government does its job. I
heard from a lot of Iowans that said they didn't know what
resources were out there, what the deadlines were, and how they
could sign up. As you know, I invited this past June, Leo
Ettleman, a producer from my district, to testify before a
Subcommittee hearing, and he told us about the challenges that
he and others are facing in obtaining the necessary information
and resources through the flood recovery process.
I am grateful that the President was quick to declare a
disaster emergency and that Congress was able to pass our
disaster supplemental. However, it is very clear to me that we
need to do a better job of providing a streamlined set of
processes and procedures that can go into effect immediately
following a disaster. We have both talked about this issue.
I have some specific questions that I hope that the USDA
can help us with. Under Secretary Northey, I know you have long
experience with flood recovery in Iowa in the Secretary of
Agriculture during our floods of 2008 and 2011, we worked
together when I was part of the sustainability task force to
address that in 2008. Do you agree that it is important for the
USDA to have prompt and effective communications with those
that are affected by flooding?
Mr. Northey. I certainly do, and it is a challenge. They
are often very busy doing other things. Sometimes even the
communication tools are down, whether it is internet or phones
or other things. And so, it is a challenge to be able to
communicate with folks, so we have to be even more aggressive
in letting them be able to have easy access to that
information.
Mrs. Axne. And during your tenure at the USDA, what steps
have you taken to improve USDA's communication to farmers
affected by floods?
Mr. Northey. We do extra outreach and training for staff
that find themselves in a disaster situation. Sometimes in that
area, some of those folks have dealt with emergency
conservation programs before, and other programs that help
clean up after a flood or pick up debris or rebuild fences. But
in some cases, we have folks that have not been experienced
with that, so sometimes we will send in jump teams as well from
other areas to bring into those areas. They will have their
experience and that outreach work, be able to go to community
organizations, work with those existing outreach even through
churches, but certainly through extension agents and
cooperatives and other business partners out there that can
help us reach out to producers. There are many different ways
we are looking at trying to do the same thing on the NRCS side
and providing maybe even almost more of a permanent jump team
that can come in from outside to be able to help when we have
disasters. In that case, it is the Emergency Watershed
Protection Program, an infrastructure support program that is
unique, that is different than our other tools, but we need
people with experience, if possible, to be able to help folks
locally implement those programs.
Mrs. Axne. Well, I am so glad to hear you talk about this
jump team, because you and I have talked about some of the
issues we face trying to get communication to folks who were
kayaking into their homes, and we talked about mail was being
sent to them. Well obviously, that doesn't work out, or the
fact that folks didn't think we needed congregational meals
because we hadn't requested them. That is because the cattlemen
stepped in, Farm Bureau, et cetera.
Last question: Would you be willing to commit to work with
my office on ways to help streamline that process and the
communication between USDA and the folks on the ground?
Mr. Northey. You bet. I would be very glad to.
Mrs. Axne. I am looking forward to it. Thank you.
Mr. Costa. I thank the gentlewoman. Her time has expired,
and we all are sympathetic about the challenges that the states
that have been subject to the flooding of the Mississippi
River, and the impacts it has created there have been hard hit,
those communities, and we appreciate your noting that, and all
the good work you are doing.
The chair will now recognize the gentleman from Kentucky,
Mr. Comer, for 5 minutes.
Mr. Comer. Thank you, Mr. Chairman, and Under Secretary
Northey, it is great to have you back to the Committee. You are
doing a tremendous job at USDA, and I applaud Secretary Perdue
and the team he has put together. I just wanted to say that,
and appreciate your good work and your friendship.
I don't need to tell you, and it has been mentioned several
times today, about the flooding conditions and the terrible
planting season that we had. In western Kentucky, I represent
four counties on the Mississippi River, very small counties in
geographic area. But one of the counties, Hickman County, had
over 8,000 acres that didn't get planted in anything. And I
know that was the case in many areas of the United States along
the river. And because of the terrible planting season, no
doubt yields are going to suffer. Large amounts of acres
weren't planted. When the August crop production report came
out, a lot of farmers were surprised at the report that were
projected on the fall harvest, and as a result, corn prices and
other commodities went down quite a bit overnight.
Can you describe what caused the differences in those
reports, and also how farmers, grain elevators, and users of
commodities can manage the price risk that they face in
response to sudden changes in prices?
Mr. Northey. It is really a big challenge in a year like
this trying to get numbers right. We still don't yet know what
the production levels will be out there. It partly depends on
when the frost is and how much time there is for the rest of
the season. We know it is uneven, production across the
country. We certainly know that we have a lot of prevent plant
acres. Across the country, we normally get about 2 or 3 or 4
million acres that are prevent plant. This year it is 19
million acres that are prevent plant across the country.
As time has worked out, folks have looked at the acreage
numbers. That was one of the concerns that folks had, and
generally have believed that that fairly represents the actual
amount of corn acres out there. There is still a lot of
discussion of what the production levels should be, and I am
certainly not in the production prediction business. We are
there to be able to respond after that.
But risk management tools, there are a lot of great ones.
Through the companies, certainly crop insurance is one of the
most important risk management tools that folks participate in,
and then the revenue coverage has been very valuable to
producers and we see high levels of participation in that.
Mr. Comer. Well thank you.
My next question and last question will be about hemp. I
know that that has come up a couple times today, and as you
know, when I was Commissioner of Agriculture, we were the first
state, Kentucky, to implement a hemp program. It has been a
huge success story. We have processors that are all over the
state. Most of the newer ones are located in my Congressional
district. We are very happy about that, and it has just been a
great success story.
As we move forward, I know that Senator McConnell put
language in the--in Congress to require USDA to have hemp crop
insurance, and I share Chairman Peterson's concerns about what
that type of crop insurance product will look like. I just
wanted to mention two things, and I have had several
discussions with people at USDA. But I just want to go on the
record with two things that I hope that the final product looks
like or doesn't have.
Number one, I don't want a product that creates absolutely
no risk for the farmers which would encourage over-production.
I think that is the concern that Chairman Peterson and Ranking
Member Conaway have, as do I. And second, we don't want a
product that is ripe for fraud. And I have always said that the
best Federal crop insurance product that would prevent fraud
would be one that says you can only insure what you have a
contract to sell, whether that is tobacco or hemp; because, the
overwhelming majority of farmers are honest. They utilize the
crop insurance program. We need the Federal Crop Insurance
Program. But there are always a few bad actors here and there,
and I don't want to see a situation where a farmer has a
contract to sell 30 or 40 acres of hemp, but they plant 100 or
200 acres of hemp. Because hemp is a very expensive crop to
produce.
I just wanted to go on the record and express my concerns.
I appreciate the work that you all are doing on industrial
hemp. I know it is a lot to digest. We went through it in
Kentucky, and you can put a bunch of zeroes on it, and that is
what you all are going through now at USDA. But anything that I
can do or my office can do to work with you on that final
product, as you know, we are more than willing to do that. But
I do appreciate the work you are doing and just wanted to
express my concerns.
Mr. Chairman, I yield back.
Mr. Costa. The gentleman's time has expired, and your
concerns are recognized. Thank you.
Mr. Northey. Thank you.
Mr. Costa. The chair will now recognize the gentleman from
California who represents a great part of the California
Central Coast, Congressman Panetta.
Mr. Panetta. Thank you. Thank you, Mr. Chairman, Ranking
Member Thompson, and of course, Under Secretary Northey. Thank
you very much for being here. I appreciate not only your time
today, your preparation for being here, but also your service.
Thank you very much.
As you heard, I come from the Central Coast of California,
and in California, as you know well, we of course have a lot of
agriculture. But unfortunately, we have some wildfires as well.
And, last year the California delegation and I joined with my
colleagues in sending a letter to the appropriators requesting
that WHIP include assistance for grape growers and other
producers whose harvests were tainted by wildfire smoke, the
smoke taint, as you know well. And I got to say, I was pleased
to hear this year of reports that WHIP+ is getting off to a
pretty good start, and I know that a lot of my wine grape
growers in California, who were affected by last year's
wildfires and the smoke taint are actually pretty pleased with
how that is going, so that is good to hear.
But as we continue to roll out WHIP+ and FSA offices
continue to do that, are you and your agency taking any
specific steps to reach out to farmers who have been tainted or
impacted by the smoke taint to ensure that they are aware of
the assistance that they might be eligible for through this
program?
Mr. Northey. I believe that there is outreach. I don't know
what that is, Congressman, and we certainly can make sure that
that is true, and certainly will be glad to work with you to
make sure that we are working with the organizations often,
whether it is the wineries or others that can help us reach out
to those producers. We want to make sure, since it has not been
covered in the past in a sufficient way at all, that they are
aware that there is now coverage for that.
Mr. Panetta. Outstanding. Thank you very much. I appreciate
that offer and we will take you up on that.
Another thing that we also have in California is obviously
we have organic crops and specialty crops, and a lot of
producers in my district, they face a lot of barriers utilizing
the USDA's crop insurance options, including whole farm revenue
protection and the non-insured crop disaster assistance
program, NAP. Given that crop insurance and the participation
by these farmers is limited to access disaster relief, are
there any steps being taken by your agency to make sure that
the crop insurance, or NAP, is more accessible to organic and
specialty crop producers?
Mr. Northey. Certainly, it is available and we see some
good participation, especially in specialty crops. Of course,
NAP is available where there is not a crop insurance product
for folks, and we see good participation in those specialty
crop areas. Whole farm revenue protection is a great option for
many of those farms with a diversified mix of crops that are
hard to individually account for, but they can account for the
revenue across that mix of crops.
We see participation. We, certainly, provide outreach to
encourage folks to be a part of it. We are hearing that they
are good tools for many producers, always looking at ways that
they can be better tools for producers, but are a very
important mix of our products for those producers who are not
producing common commodities in other places.
Mr. Panetta. Yes, understood, and I appreciate your
recognition of that.
In regards to that, have you heard of, or are you
implementing, any sort of continuing education requirements or
any training for producers to make sure that they understand
exactly how this works?
Mr. Northey. We do provide outreach to producers and
producer organizations. Certainly, our staff is available to be
at other meetings to be able to share information as well,
whether it is a grower meeting about something completely
different, they can also--our staff will share information. We
also, and this is delivered through private crop insurance
agents, and those agents are often very active in the outreach
that is done around those products as well. They will go ahead
in service. They will be the ones that will make the
connection, at least on whole farm revenue protection. The NAP
is delivered through our FSA offices, and our county executive
directors or others in that office will participate in some of
those conversations at larger events, outreach, field days,
other kinds of things.
Mr. Panetta. Good. Thank you very much, Mr. Under
Secretary. I yield back.
Mr. Costa. The gentleman yields back, and the chair will
now recognize the gentleman from Kansas, the Jayhawk State,
Congressman Marshall.
Mr. Marshall. Well thank you, Mr. Chairman, and good
morning, Mr. Under Secretary. Thank you so much for being here
today.
I want to talk just for a second about high quality alfalfa
and the Dairy Margin Coverage Program. Now, if I know anything
about farming, it is alfalfa. I grew up, my main job in the
summers from age 14 to 18 was hauling hay, and I always really
kind of didn't look forward to those alfalfa days, because they
were heavy bales, 90 to 100 pounds, and I remember complaining
to my grandfather about the weight of those bales. And he said,
``Look, we grow high quality alfalfa here, and those momma cows
that are pregnant are going to love this high-quality protein
they are getting. It is like molasses to them, and that is what
got those cows through those hard winter days in Kansas.''
As I understand it, we are working on this new Dairy Margin
Coverage Program, and the price of that type of alfalfa is a
little bit more expensive. How is FSA integrating in the
information into the DMC formula? Is that going to help us have
a more accurate effect on the cost side of this equation?
Mr. Northey. It is. I grew up in Iowa baling small squares
of alfalfa hay, but ours was beef quality hay, not dairy
quality hay. I certainly know the wonderful smell of alfalfa in
the summer.
We did include, as the farm bill suggested, we should look
at the price of high-quality hay and compare that to the
average hay price that we were using in that Dairy Margin
Coverage formula before, everyone is very familiar. You have
the milk price and you subtract the feed costs, and the margin
is what we are insuring. If that cost of feed by using dairy
hay or high-quality hay is a little higher, your margin is a
little narrower, and you will trigger a payment a little
earlier.
We did, after looking at that and seeing that there is an
additional cost, we included in the hay portion of that feed
cost 50 percent high quality hay and 50 percent all-hay price.
And so that has narrowed the margin a little bit and allowed a
more fair representation of what a dairy producer was actually
seeing for their feed costs, and certainly, makes it an even
better tool for producers to be part of that Dairy Margin
Coverage Program.
We have seen times where that premium quality hay will jump
in price because of a shortage. That was not being covered
before. That is a partial compensation now for those producers,
and I think that is an improvement of that program.
Mr. Marshall. Great. I appreciate your efforts on that.
I want to talk about just a great job my FSA officers are
doing back home. Now, maybe Kansans just don't complain as much
as other states, but I am not getting many complaints, and I
want to shout out to my executive director and a good friend,
David Shem, as well as all those other FSA officers. And as a
producer myself who interacts with those people once a year, I
think they are doing an incredible job. They have already
processed 112,000 applications for the Market Facilitation
Program, and 30,000 applications so far for the MFP payments
for 2019. I appreciate the great work that they are doing.
One of the things that they are starting to ask me
questions about is updating the IT systems between Risk
Management Agency and the Farm Service Agency, and the producer
data could be shared across agencies. Can you give us an update
on how that is coming along, the Acreage Crop Reporting
Streamlining Initiative, and a timeline when you think that
might be available to producers?
Mr. Northey. We continue to make progress there to be able
to allow information. Right now, we have producers that are
able to certify their acres at Farm Service Agency and have
that information automatically transfer into their crop
insurance agent, and vice versa. It is not where it needs to be
in the longer-term, and we are also looking at improving the
overall acreage reporting process, too. Right now, much of that
is still paper driven at the counter, so to be able to put this
together in a better electronic form would make it an easier
process for producers at the counter, but also potentially
decrease the number of contacts a producer needs to be able to
make, because we have the information at FSA and it can
automatically go to a crop insurance agent.
We are making small steps. In the meantime, we are trying
to get our programs out, and so we are looking to be able to
make some bigger steps in the future.
Mr. Marshall. Quickly, my last question has to do with
WHIP, the Wildfire Hurricane Indemnity Program. Certainly, we
understand what it typically covers. One of the concerns of my
producers is on farm-stored commodities and the other thing I
am hearing about is pivots, the irrigation pivots under water,
8, 10 of water, and there is no type of coverage for them at
a cost of several hundred thousand dollars. Any thoughts on
either of those?
Mr. Northey. On farm-stored commodities that were impacted
by flooding are being covered, not within WHIP itself, but
within the disaster program. That sign up started last week as
well. And so, we have producers going in, just provide
information about what a producer had for that stored
commodity, whether it is hay or whether it is grain that has
been lost, and we will cover 75 percent of the loss of that.
Mr. Costa. The--go ahead. Are you done?
Mr. Northey. And for irrigation pivots, we have some pieces
to be able to touch that. Typically, that has been covered
through casualty insurance rather than through our disaster
programs, but we have some pieces of EQIP in some cases, ECP in
some cases, but mostly has been covered in regular casualty
insurance.
Mr. Marshall. Thank you. I yield back.
Mr. Costa. The gentleman's time has expired.
The chair will now recognize the gentleman from South
Dakota, Congressman Johnson.
Mr. Johnson. Thank you, Mr. Chairman.
I feel like I would be remiss if I didn't start with a
thank you. Of course, we have had a wet year. That has come out
time and time again as we have been talking about disaster
response, but you know, Bill, you were so good at being willing
to have conversations with us earlier in the spring about
moving that haying and grazing date for cover crop. USDA did
it. I could tell it took some work on your end to get it done;
but, on behalf of South Dakota, thank you, because there are a
lot of us who are a lot better off because of that flexibility
that USDA showed, that leadership that you showed. So, thank
you.
I want to talk about CRP sign up. The last general sign up
for CRP was in the final days of the Obama Administration, and
from a South Dakota perspective, we only had a couple selected,
even though there were thousands of applicants. I think that
was because EBI pushed acres away from traditional areas. And
so, I just wanted to get your thoughts on that about EBI, if
any amendments or evolutions of that are needed, and if there
are any particular pieces of advice I should give my producers
in South Dakota as they look toward the next CRP sign up?
Mr. Northey. Well, you are right we are scheduled for
December for the next CRP sign up. One of the additional
challenges CRP had in the last sign up is there are few acres
that were able to be accepted. The cap was very tight to the
number of acres that were available. We will likely see a lot
more acres available this time around. We have expiring acres
this year, and then for sign up in December, since that starts
in October of 2020, we will have expiring acres in September
30, 2020 as well. And so, that is a large number of acres that
expire at that time.
I think we will see a lot larger sign up than we have seen
for many years. That will provide certainly more room for many
producers. I assume there will be a lot of interest as well.
The Environmental Benefits Index will be available to
everybody. We are looking at making some adjustments. The next
one will look just like this last one, so if there are
concerns, we are certainly glad to be able to hear that. I
don't know some of the specifics on whether it targeted other
areas, so certainly glad to be able to talk through that if
there are some additional concerns, and what that EBI will look
like. But that Environmental Benefits Index will be available
publicly, so each producer will be able to look at it and
decide whether they want to plant a warm season grass instead
of a cool season grass, or a native.
Mr. Johnson. When you talk about EBI being the same, is it
going to be the exact same mechanism or will it be
fundamentally the same?
Mr. Northey. It will be fundamentally the same.
Mr. Johnson. Okay. So, now as we look at, because it has
just been a record wet year, and good grief, we had some
counties in South Dakota that got another 8" or 10" last week.
These folks just can't buy a break. Some of them have been into
a number of years of prevent plant already. Of course, they
know they need another option for that continuously wet ground.
CRP, is that much of an option for them? Is there any kind
of a preference that is given to prevent plant type acres for
enrollment into CRP?
Mr. Northey. There is not a preference, per se, in looking
back and seeing what was prevent planted the previous years,
but it is certainly likely that those areas would qualify,
especially for wetland program acres. And we have that through
a program that is out there. We have a Wetland Reserve Program
as well, and so sometimes connected directly to that general
enrollment, but often connected in other ways. I would
encourage folks to go both to their FSA, but their NRCS office
as well, and have those conversations if they have an area that
they have lost to too much water for several years and are
thinking about that area is costing them too much to farm.
There are some programs that will make good use out of that and
good areas for public benefit out of that that they can retain
ownership and be able to have some program participation in
that.
Mr. Johnson. Well, Mr. Chairman, I would just close by
noting how good it feels to have somebody in this position who
really understands what it is like to work hard outdoors, what
it is like to have dirty hands, what it is like to sit down and
try to figure out how do you run an operation with the kinds of
really tight margins that modern production agriculture has.
You are doing a good job, sir, in large part because you get
it. Thank you.
Mr. Northey. Thank you.
Mr. Costa. Well, I thank the gentleman from South Dakota.
There are a number of us who still actively farm, so I
appreciate that.
The last Member, and we will close the hearing following
his 5 minutes, is the gentleman from California who represents
a nice part of northern California, Congressman LaMalfa.
Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate it, and
for having this hearing today to be able to go over these
matters. Under Secretary Northey, I really appreciate you being
here and the good work you are doing over there, so thanks.
I will get through this. I am just about last, but just
quickly. We grow a lot of amonds in California, or almonds. We
say amonds. I have to clarify for those who----
Mr. Costa. The old amond joke.
Mr. LaMalfa. Yes. I won't tell the joke, but we still have
an undistributed fund in the Market Facilitation Program from
last fall. There was $63 million that was set aside by USDA for
almond producers: $25 million of it has been distributed,
leaving about $38 million that hasn't been issued for various
reasons, some of it having to do with particular level of
record-keeping and farm records that hadn't really been kept.
My understanding, you already have in place for 2019 a remedy
for that, so we do appreciate that. The growers appreciate
that.
Is there a way to recapture for the 2018 crop the still
undisbursed $38 million and catch up on some of those needs
that are still left behind?
Mr. Northey. For our numbers, our projections of what our
spending would be for 2018, there were certainly reasons,
whether payment limits or AGI or other kinds of reasons folks
did not participate in that program. We have some that
participate at greater levels than what the dollars were, some
were at less. What we waited for is for folks to come in and
apply, and we certainly have the dollars available to do that.
It is not a set aside of a certain amount of dollars for a
certain crop, and I just encourage folks to come in and
participate in this year's program. It is based on acres. It is
certainly easier for some producers than a production-based
program was for them, and certainly, we look forward to having
those folks all participate in this year's program.
Mr. LaMalfa. Right. Can we apply the acres test to the 2018
for those that didn't have the farm records on that basis so we
can again capture some of that that was left behind for those
losses?
Mr. Northey. We don't have any mechanism to go back and
look at that. Sign up has closed on that and we are not looking
back at change. I know it was a challenge to implement that
program for lots of producers, as well as for us.
Mr. LaMalfa. Certainly in the timeframe and such, right?
Yes.
Mr. Northey. To be able to get that done, yes.
Mr. LaMalfa. All right, but you would still encourage them
to come in and apply, and maybe those records could be built or
something found satisfactory.
Mr. Northey. Participate: The sign up for 2018 has closed.
Mr. LaMalfa. Yes, it has.
Mr. Northey. But, the signup for 2019 is now open until
December 6.
Mr. LaMalfa. Okay. December 6, okay. Thank you.
And then in the area of the PLC, Price Loss Coverage, as it
applies to rice and/or others that are applicable, but in rice
particularly, the crop year being what it is, producers may not
receive a payment until November or December, even though the
marketing year ends in the summer, in July typically. What is
being done to help with the timely issuance of payments to
those producers, especially since the cash flow can be an issue
for some?
Mr. Northey. I don't know when the marketing year ends and
when our information is available, so typically for us to be
able to make an ARC or a PLC payment, we need last year's
production and the marketing years average prices.
We can check on rice and be glad to be able to work through
that and be able to get that information to you, but I am
assuming the timing is as early as it can be, considering when
we are able to get that information on production and price. If
it can be earlier and we can legally do it, we sure would love
to be able to do it. I assume that is why it is that way, but I
don't know in particular----
Mr. LaMalfa. Yes, typically the harvest will land in early
to mid fall, and it wouldn't be too long after that you would
have certified production amounts. And so, it would seem that,
taken in context with the marketing of that crop the following
year, we are just looking for ways to speed up that timeline
for the PLC to be available, because again, cash flow is a
problem with all that. It is basically a year behind.
Mr. Northey. Yes.
Mr. LaMalfa. Is that something you think can be----
Mr. Northey. We will certainly look at it. The price that
we look at for PLC and ARC is the marketing year following that
production. Often, just like the corn and soybean payments, we
will make for ARC and PLC in October will be based on the
prices from last harvest until this late this summer, this
fall.
Mr. LaMalfa. Does it have to be the entire crop have that
done, or can it be on a more individual farmer basis, or----
Mr. Northey. It is the entire crop. The average for the
crop, not for the producer.
Mr. LaMalfa. All right.
Mr. Northey. But I still will have to, Mr. Congressman, I
have to check on rice. I am less familiar with the mechanics of
rice, and if there is something we can do in a more timely
way----
Mr. LaMalfa. We would be happy to have that. Thank you, and
I will yield back, Mr. Chairman.
Mr. Costa. The gentleman's time has expired. If you could
please get back not only on the other commodities to the
gentleman, but to the Committee as well, that would be
appreciated.
Mr. Northey. I would be very glad to.
Mr. Costa. All right. We have come to a close, but before
we adjourn, I would invite Ranking Member Thompson to make any
closing remarks that he may desire.
Mr. Thompson. Mr. Chairman, thank you for this hearing. I
appreciate the fact that our two Subcommittees came together,
it is very timely. Secretary Northey, thank you.
We work really hard on this Committee to make sure we are
doing the right things by American farm families, and that is
evidenced by the programs that we put forward and authorize
within the farm bill. And so, I just take great confidence to
have somebody with your background, your experience, and quite
frankly, your confidence executing those programs. And so,
thank you for what you have done.
I yield back.
Mr. Costa. Well, we thank the Ranking Member of the
Subcommittee, and I know I speak for Congressman Vela, we do
appreciate the efforts to bring both Subcommittees together for
this important hearing today, and our staff who worked hard to
put this together as well for both Subcommittees.
I will now recognize my Subcommittee's Ranking Member, Mr.
Rouzer, for any closing comments he might like to make.
Mr. Rouzer. Well thank you, Mr. Chairman, and Mr. Under
Secretary, I too thank you for being here. We appreciate the
work that you and the many great employees all across USDA do,
and certainly appreciate your attention to the detail of
implementation of our disaster assistance programs. That is
just so critically important. This is a very fragile time, very
precarious time for many in production agriculture,
particularly those that have been forced to endure multiple
natural disasters. For example, in my district we had Hurricane
Matthew in 2016 and then followed up by Hurricane Florence in
2018, and then low commodity prices on top of that for an
extended period of time as well. It has been probably one of
the most challenging times in agriculture, and throughout the
country in general, but specifically for these areas that have
been hit so hard by our natural disasters.
I really appreciate your time and attention and follow
through on that, and look forward to continuing to work with
you to address those needs.
Mr. Chairman, I yield back. Thank you.
Mr. Costa. All right. The gentleman yields back, and Under
Secretary Northey, we appreciate the time that you spent this
morning with both Subcommittees and the testimony that was
given and the questions that you answered. Clearly, if there is
any follow up, both Subcommittees will reach out to you and the
Department. We thank Secretary Perdue. As was noted by almost
every Member, I believe, it is tough times in farm country, and
regionally, looking across the country and from a combination
of natural disasters that have taken place almost in every
region of the country, to commodity prices that have been
impacted by a lot of factors, including this trade war that is
taking place. American farmers, ranchers, dairymen and -women
are struggling to survive, and clearly, as I say everywhere I
go, food is a national security item. A lot of folks take it
for granted. Nobody does it better than the American farmer
every day, putting food on America's dinner table at the most
highest quality and at the most cost-effective price anywhere
in the world. And we do it so well, we can produce more than we
can consume, and therefore, the trade issues are critical.
But the fact of the matter is that we must remind ourselves
that with less than five percent of the nation's population
directly engaged in the production of food and fiber, that this
is a critical issue for all Americans, and we must do
everything we can to ensure that we provide stable markets to
ensure that all of the American agriculture can make it through
these difficult times. Because as we know, nobody does it
better than the American farmer.
I will close this hearing. The record for today's hearing
will remain open for 10 calendar days to receive any additional
material and supplemental written responses from witness to any
question posed by a Member.
At this point, this joint hearing is now adjourned. I thank
the Members of both Subcommittees.
[Whereupon, at 12:17 p.m., the Subcommittees were
adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Questions
Response from Hon. William Northey, Under Secretary, Farm Production
and Conservation, U.S. Department of Agriculture
Joint Questions Submitted by Hon. Filemon Vela, a Representative in
Congress from Texas; Hon. Glenn Thompson, a Representative in
Congress from Pennsylvania
Question 1. Please provide the Committee with the current number of
FSA county field office employees for each state, distinguishing
between permanent full-time and temporary full-time employees.
Answer.
FSA County Office Non-Federal (CO) Permanent and Temporary Full-Time
Employment as of 10/4/19
------------------------------------------------------------------------
Total County
County Office County Office Office Non-
Non-Federal (CO) Non-Federal (CO) Federal (CO)
State Permanent Full- Temporary Full- Permanent and
Time ** Time Temporary Full-
Time
------------------------------------------------------------------------
Alaska 4 0 4
Alabama 127 10 137
Arkansas 144 13 157
American Samoa 1 0 1
Arizona 20 2 22
California 89 29 118
Colorado 95 4 99
Connecticut 11 1 12
Delaware 8 1 9
Florida 59 13 72
Georgia 206 19 225
Guam 2 0 2
Hawaii 9 3 12
Iowa 446 19 465
Idaho 73 2 75
Illinois 390 7 397
Indiana 259 0 259
Kansas 370 16 386
Kentucky 206 0 206
Louisiana 97 8 105
Massachusetts 11 1 12
Maryland 50 1 51
Maine 20 0 20
Michigan 167 0 167
Minnesota 292 6 298
Missouri 302 5 307
Mississippi 147 0 147
Montana 152 5 157
North Carolina 233 9 242
North Dakota 200 6 206
Nebraska 290 7 297
New Hampshire 11 2 13
New Jersey 18 1 19
New Mexico 41 4 45
Nevada 9 2 11
New York 103 3 106
Ohio 230 1 231
Oklahoma 190 12 202
Oregon 53 1 54
Pennsylvania 118 7 125
Puerto Rico 0 0 0
Rhode Island 3 1 4
South Carolina 96 12 108
South Dakota 229 14 243
Tennessee 168 10 178
Texas 462 11 473
Utah 36 2 38
Virginia 116 3 119
Virgin Islands 0 0 0
Vermont 16 2 18
Washington 67 4 71
Wisconsin 226 0 226
West Virginia 44 2 46
Wyoming 37 0 37
-----------------------------------------------------
Total........... 6,753 281 7,034
------------------------------------------------------------------------
** Does not include permanent part-time staff.
FSA County Office Federal (GS) Permanent and Temporary Full-Time
Employment as of 10/4/19
------------------------------------------------------------------------
Total Federal
Federal (GS) Federal (GS) (GS) Permanent
State Permanent Full- Temporary Full- and Temporary
Time Time Full-Time
------------------------------------------------------------------------
(4) (5) (col. 4 + col. 5
= col. 6)
------------------------------------------------------------------------
Alaska 0 0 0
Alabama 21 0 21
Arkansas 63 0 63
American Samoa 0 0 0
Arizona 9 0 9
California 31 0 31
Colorado 20 0 20
Connecticut 4 0 4
Delaware 1 0 1
Florida 17 0 17
Georgia 35 0 35
Guam 0 0 0
Hawaii 10 0 10
Iowa 81 0 81
Idaho 25 0 25
Illinois 55 0 55
Indiana 34 0 34
Kansas 62 0 62
Kentucky 68 0 68
Louisiana 40 0 40
Massachusetts 6 0 6
Maryland 7 0 7
Maine 16 0 16
Michigan 36 0 36
Minnesota 69 0 69
Missouri 54 0 54
Mississippi 45 0 45
Montana 25 0 25
North Carolina 34 0 34
North Dakota 59 0 59
Nebraska 64 0 64
New Hampshire 3 0 3
New Jersey 2 0 2
New Mexico 14 0 14
Nevada 3 0 3
New York 42 0 42
Ohio 35 0 35
Oklahoma 80 0 80
Oregon 19 0 19
Pennsylvania 32 0 32
Puerto Rico 28 27 55
Rhode Island 0 0 0
South Carolina 23 0 23
South Dakota 58 0 58
Tennessee 37 0 37
Texas 90 0 90
Utah 19 0 19
Virginia 25 0 25
Virgin Islands 1 0 1
Vermont 12 0 12
Washington 16 0 16
Wisconsin 58 0 58
West Virginia 24 0 24
Wyoming 12 0 12
-----------------------------------------------------
Total........... 1,624 27 1,651
------------------------------------------------------------------------
Question 2. Please provide your projected number of FSA county
field office employees both permanent full-time and temporary full-time
for each state, for the 4th Quarter of FY 2020.
Answer. FSA uses the Optimally Productive Office (OPO) tool to
inform staffing decisions. It provides dynamic data and analysis built
on more than 600 million data points to help leaders in the field and
at headquarters make decisions to better serve farmers and ranchers.
The productivity tool provides data that informs leaders on the varying
levels of productivity across offices and programs. The demand forecast
tool provides a view of estimated future workload to help leaders
better plan for future work. The location analysis tool provides
leaders with data that informs where offices could be best located to
optimize customer service and employee experience. Together, these
tools allow USDA leadership to use a data-driven approach in
determining where to place staff and locate offices in order to
efficiently and effectively serve farmers and ranchers. Since staffing
decisions are informed by these dynamic factors as well as the impacts
of attrition, competition for talent, and changing technology and
processes, we are unable to project what the needs will be by state in
the 4th quarter of FY 2020.
Question 3. Please provide the Committee with the optimal number of
``unrestricted'' FSA field office employees for FY 2020 as determined
by the Optimally Productive Office tool for each state.
Answer. The OPO toolset described in Question 2 shows the
unrestricted staffing level as of October 4, 2019 is 11,644 nationwide;
however, similar state level data is unavailable.
Question 4. Please provide the Committee with the staff ceiling
numbers for FY 2020 given to each State Executive Director.
Answer. Until a full year FY20 budget is provided, states will
retain the hiring levels provided for FY 2019.
Question 5. Please provide the current number of FSA county offices
by state, distinguishing between those that are open full-time (daily,
Monday through Friday) and those open part-time.
Answer.
Number of Full-Time and Part-Time Farm Service Agency County Offices as
of 10/15/19
------------------------------------------------------------------------
Number of Full- Number of Part-
State Time County time County Grand Total
Offices Offices
------------------------------------------------------------------------
Alabama 44 1 45
Alaska 2 0 2
American Samoa 1 0 1
Arizona 8 0 8
Arkansas 52 0 52
California 30 0 30
Colorado 32 6 38
Connecticut 5 0 5
Delaware 2 1 3
Florida 30 0 30
Georgia 54 12 66
Guam 1 0 1
Hawaii 4 0 4
Idaho 29 0 29
Illinois 82 11 93
Indiana 73 2 75
Iowa 97 0 97
Kansas 94 2 96
Kentucky 64 0 64
Louisiana 35 2 37
Maine 12 1 13
Maryland 19 1 20
Massachusetts 7 0 7
Michigan 47 2 49
Minnesota 69 5 74
Mississippi 63 0 63
Missouri 92 2 94
Montana 46 2 48
Nebraska 67 4 71
Nevada 6 0 6
New Hampshire 5 0 5
New Jersey 6 0 6
New Mexico 20 4 24
New York 37 2 39
North Carolina 65 7 72
North Dakota 51 0 51
Ohio 60 6 66
Oklahoma 58 1 59
Oregon 21 1 22
Pennsylvania 37 1 38
Puerto Rico 7 2 9
Rhode Island 1 0 1
South Carolina 33 1 34
South Dakota 55 0 55
Tennessee 58 1 59
Texas 168 5 173
Utah 18 1 19
Vermont 8 1 9
Virgin Islands 1 0 1
Virginia 41 0 41
Washington 23 2 25
West Virginia 23 0 23
Wisconsin 51 4 55
Wyoming 17 0 17
-----------------------------------------------------
Grand Total..... 2,031 93 2,124
------------------------------------------------------------------------
Question 6. According to press reports and anecdotal information,
USDA has reduced FSA field office staff totals from 11,000 in 2008 to
8,700 currently. Please verify this information.
Answer. We are unable to separate out the different types of FSA
staff going back to 2008. However, we can provide on-board staff as of
September 30 each year. The following table sets out staffing numbers
for each fiscal year less the mission support function series that
correspond with positions transferred to the FPAC Business Center on
October 14, 2018.
----------------------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
----------------------------------------------------------------------------------------------------------------
Farm Service 12,706 12,148 11,189 10,330 9,798 10,166 10,530 10,132 9,516 9,596
Agency
----------------------------------------------------------------------------------------------------------------
Question 7. Please provide the amount of late payments you have
made in FY 2019 and FY 2020, listed by program, including interest
paid.
Answer.
FSA/CCC FY 2019 All Fiscal Months
(Prompt Payment Interest (PPI))
------------------------------------------------------------------------
Payment Request
Accounting Program Description Amount Interest Amount
------------------------------------------------------------------------
Economic Adjustment Assist.--Upland $8,885,074.68 $14,586.94
Cotton
Cotton Ginning Cost-Share Program $823.00 $7.79
Livestock $12,083.00aster Progra$120.88
Non-Insured Assistance Program $10,307.31$146.13
Authorized
Biomass Crop Assistance--Technical $77,519.25 $234.17
Assist.
Biomass Crop Assistance--Annual $72,237.00 $1,420.46
Rental
Biomass Crop Assistance--Cost-Share $8,390.00 $9.79
Non-Insured Assistance Program $1,008,180.00 $42,983.92
NAP Loss Adjuster--$0.00y $20.09
NAP Loss Adjuster--$0.00l $6.28
Livestock$190,990.00Program $5,581.34
Emerg. Assist. Livestock$603,964.00 $7,223.00
(ELAP)
Tree Assistance Program $58,097.00 $716.70
Livesto$1,332,580.00gram $28,546.74
Geographic Disadvantaged Program $1,592.49 $26.18
Price Loss Co$4,090,208.00m $28,741.26
Agricultural Risk Coverage Program-- $1,164,134.16 $14,030.30
County
Agricultural Risk Coverage-- $132,118.00 $13,506.32
Individual
Loss Adjuster S$0.00--TAP $16.68
Loss Adjuster T$0.00--TAP $3.91
Geographic Disadvantaged Program $907.82 $29.55
Geographic Disadvantaged Program $11,121.39 $182.05
Geographic Disadvantaged Program $63,991.42 $764.27
Supplemental Revenue Assistance $0.00 $9,853.97
Program
Wildfires and Hurricanes Indemnity $3,692,650.00 $6,906.73
Program
Geographic Disadvantaged Program $3,540.77 $2.44
Market Facilitation Program--Crops $37,155,886.00 $1,032,611.41
Market Facilitation Program--DAHG $2,032,378.00 $34,163.96
Market Facilitation Program-- $366,967.00 $12,094.71
Specialty Crops
TMP/MPF 2019 Non-Specialty Crops $721,644.30 $26,420.93
TMP/MPF 2019 Speciality Crops $21,451.78 $556.64
TMP/MPF 2019 Livestock $3,200.00 $1,908.81
TMP/MPF 2019 Non-Speciality Crops-- $0.00 $7.37
A
Grasslands Reserve Program $1,185,526.00 $8,212.75
CRP--Cancel $32,068.00 $3.22
CRP--Emergency Forestry Annual $6,547.00 $377.91
Rental
CRP--Emergency Forestry Annual $4,622.00 $16.76
Rental
CRP Payment--Annual Rental $1,476.00 $34.54
CRP Payment--Annual Rental $1,244,967.00 $26,660.17
CRP Old Unpaid Contracts $12,838.50 $292.48
Auto CRP--Cost-Shares $14,012,690.00 $104,496.90
CRP Incentive $874.00 $15.42
CRP Common Incentive $14,887.00 $17,451.85
Emergency Forestry Restoration $117,102.00 $525.03
Program
Emergency Forest Restoration $186,232.00 $1,667.72
Stafford
CRP--Chesapeake Bay Incentive $0.00 $454.81
Emergency Conservation Program $1,437,076.00 $4,700.44
Emergency Conservation Program FY17 $1,098,162.00 $4,469.30
Emergency Conservation Program $1,591,288.00 $4,984.07
Stafford
ECP Cost-Share FY 2018 $8,020,742.00 $36,026.49
Loan Deficiency$0.00tils, Dry $0.00
Loan Deficiency$0.00and Cotton $0.00
Miscellaneous Expense $72,130.54 $1,117.66
AMA Organic Cost-Share--Crops $1,500.00 $4.54
CCC Organic Cost-Share--Crops $390,721.43 $2,366.41
CCC Organic Cost-Share--Livestock $63,822.09 $345.71
CCC Organic Cost-Share--Wild Crops $2,653.00 $12.99
CCC Organic Cost-Share Fees-- $105,955.00 $692.37
Handling
Organic Cost-Share Fees--St. Org. $2,687.25 $22.44
Pgm. Fees
Margin Protection Program--Dairy $70,520.00 $7,770.48
Margin Protection--Dairy $563,352.60 $510.52
Dairy Margin Coverage--Premium $1,891,587.72 $2,138.48
Repayments
Dairy Margin Coverage Program $4,307.06 $429.07
Interest--Cotton, Special Loan $14,078.93 $4.82
------------------------------------
Total............................ $93,872,449.49 $1,509,237.07
------------------------------------------------------------------------
FSA/CCC FY 2020 Fiscal Month 1
(Prompt Payment Interest (PPI))
------------------------------------------------------------------------
Payment Request
Accounting Program Description Amount Interest Amount
------------------------------------------------------------------------
Non-Insured Assistance Prog. $73,855.00 $5.39
Authorized
Non-Insured Assistance Program $11,310.00 $6,836.92
Livestock Indem$0.00Program $1,101.57
Emerg. Assist. Livestock Bees $0.00 $487.85
(ELAP)
Price Loss Cover$19,733.00m $1,754.92
Agricultural Risk Coverage Prog.-- $41,185.00 $1,423.56
County
Supplemental Revenue Assistance $0.00 $6,971.83
Program
Market Facilitation Program--Crops $116,030.00 $1,643.35
Market Facilitation Prog.-Specialty $61,584.00 $113.43
Crops
TMP/MPF 2019 Non Specialty Crops $635,277.08 $40,600.37
TMP/MPF 2019 Speciality Crops $4,125.96 $1,968.69
TMP/MPF 2019 Livestock $0.00 $2,014.13
TMP/MPF 2019 Non-Speciality Crops-- $0.00 $66.01
A
Grasslands Reserve Program $116,952.00 $957.89
CRP Payment--Annual Rental $10,519.00 $204.30
Auto CRP--Cost-Shares $20,682.00 $85.66
Emergency Forestry Restoration $10,792.00 $182.43
Program
Emergency Forest Restoration $149,105.00 $819.85
Stafford
Emergency Conservation Program $228,101.00 $1,881.07
Emergency Conservation Program FY17 $12,979.00 $58.25
Emergency Conservation Program $155,770.00 $367.78
Stafford
ECP Cost-Share FY 2018 $1,047,978.00 $5,952.05
Loan Defic$63,980.17tils, Dry $23.61
Loan Deficien$772.00and Cotton $32.07
Miscellaneous Expense $0.00 $2.79
Dairy Margin Coverage Program $883.14
------------------------------------
Total............................ $2,780,730.21 $76,438.91
------------------------------------------------------------------------
Question 8. Please provide an accounting for the amount currently
being spent on leasing vacant or underutilized physical office space,
broken out by leases on offices with no employees and the offices that
are only occupied part time by appointment only.
Answer. As of October 15, 2019, the Farm Service Agency has 187
offices that are either zero-person offices or part-time offices. The
total annual rent cost for these offices is $8,716,753. Of these 187
offices, there are 94 offices with zero personnel. The annual rent cost
for the zero-person offices is $4,606,487. Additionally, FSA has 93
offices that are occupied part-time by appointment only. The annual
lease cost for operating these offices is $4,110,266. The lease term
for all FSA offices vary, but generally a lease may be terminated with
120 day notification to the lessor.
------------------------------------------------------------------------
Office Classification Number of Offices Rent Cost
------------------------------------------------------------------------
Zero-person Offices 94 $4,606,487
Part-time Offices 93 $4,110,266
-------------------------------------------
Total Zero-person & Part- 187 $8,716,753
time Offices.............
------------------------------------------------------------------------
Questions Submitted by Hon. Jim Costa, a Representative in Congress
from California
Question 1. One of the farm bill provisions important to many
California cotton producers and other cotton growers in the Far West
region is the Extra Long Staple (ELS) or Pima Competitiveness Program,
since Pima cotton is not eligible for the traditional farm bill safety
net programs. Just like our friends in other parts of the cotton belt
that produce upland cotton and are being harmed by the tariff situation
with China, Pima cotton producers are also suffering due to lost market
in China and quickly declining market prices. My office and others have
worked with USDA and the cotton industry to make some needed updates to
the Pima program and I'm very appreciative of Secretary Perdue's
support on this. He heard about the need for this from some growers in
my district when he was visiting my district a few months ago. However,
it is my understanding the needed changes are being held up by OMB so
what can you and the Secretary do to help get this done and how can
this Committee be helpful?
Answer. USDA has been working closely with OMB to resolve PAYGO
issues associated with updating some of the program parameters. We
anticipate resolution of this issue soon.
Question 2. I am hearing from my constituents of staffing shortages
at local Farm Service Agency (FSA) offices and delayed receipt of
Market Facilitation Program (MFP) payments. Can you please explain the
payment system in place for MFP payments? What is being done to ensure
efficient delivery of payments?
Answer. The MFP application system calculates payments based upon
eligible acreage multiplied by an established county MFP rate for non-
specialty crop commodities, and by the established rate for the
applicable specialty crops. In the case of livestock, the applicant's
ownership share interest in production as recorded in the MFP
application system is multiplied by the applicable payment rate for the
livestock commodity. A payment record is generated once the approval
date is recorded in the MFP application system. Nightly payment sweeps
are conducted. Payments that are successfully pushed to the National
Payment Service are to be certified and signed the next business day.
Field offices have been instructed to record County Committee approvals
the same day in the MFP application system. Complete applications are
to be reviewed and approved within 30 days of receipt in a County
office to avoid prompt pay interest payments.
Delays in payments can occur if an applicant has not provided all
of the required payment eligibility forms, such as a payment limitation
farm operating plan or Adjusted Gross Income certification. County
office staff follow up with MFP applicants as time permits to obtain
the necessary documentation to record current payment eligibility
statuses.
Question 2a. What is being done to address reports of staffing
shortages at FSA offices given the simultaneous rollout of the new
disaster programs, Dairy Margin Coverage, other farm bill programs, and
MFP?
Answer. FSA has adjusted to handle the FY19 increased workload in a
number of ways. Significant training was done to prepare staff for the
new provisions of the 2018 Farm Bill which allows them to more
confidently and efficiently serve customers. Ad hoc program workload
was addressed in several ways. Technology improvements like automated
payments reduced data entry. Temporary employees as well as jump teams
were also used to meet the ad hoc program demand. Mechanisms like
appointments and registers help staff manage the flow of customers. In
addition, utilizing Risk Management Agency and the Authorized Insurance
Providers (AIPs) to deliver prevented planting disaster payments as
part of the supplemental disaster program shifted work from FSA
offices.
Question 3. If a dairy operation signed up for the 5 year discount
in Dairy Margin Coverage and then goes out of business between now and
2023, they aren't required to pay the remaining premiums for future
years. Is that correct?
Answer. Yes, if a DMC participating dairy operation dissolves
between now and 2023, the dairy operation is not required to pay the
remaining premium fee from the date of dissolution and for the future
years in the contract.
Question 4. What specific work has USDA done to inform farms that
never participated in the Margin Protection Program about their options
under Dairy Margin Coverage?
Answer. USDA performed significant outreach before and during the
DMC enrollment and coverage election period signup which included press
releases, publications and FSA County Office newsletters. Additionally,
in coordination with agriculture organizations including farm credit,
farm bureau, and ag extension, FSA provided information and support in
promotion of the DMC program. FSA County Offices were authorized to
perform additional outreach as needed and promote the program
throughout their county area.
Question 5. In addition to or in place of the Market Facilitation
Program, have there been any discussions at USDA about spending some
trade aid money on domestic market development so farmers have
additional places to sell products in the future?
Answer. The trade mitigation assistance is focused on helping
farmers adjust to disrupted markets caused by retaliatory tariffs. One
part of this strategy is to help producers develop existing and find
new overseas markets for their products. Therefore, there has been no
discussion of domestic marketing programs in the context of this trade-
related assistance.
Question 6. Given that dairy farmers have more tools available now
given Dairy Margin Coverage and the new Risk Management Association
insurance options, how are you working to demonstrate how these two
types of risk management options can be used together?
Answer. Moving forward, FSA and RMA will work towards developing
documents on the attributes of the three USDA dairy risk management
programs and complete a side by side comparison of the individual
program details.
Questions Submitted by Hon. Collin C. Peterson, a Representative in
Congress from Minnesota
Question 1. In the statement of managers for the 2018 Farm Bill, we
asked you to ``conduct outreach to eligible operations through repeated
contacts and multiple modes such as mailings, phone calls and local
meetings, and to collaborate with state licensing boards, cooperatives,
producer groups, institutions of higher education, and other
stakeholders to thoroughly inform producers of their operations' new
affordable options under DMC, MPP credit or refund values, and the new
safety net options provided under DMC.''
Would you submit a detailed written summary of the outreach efforts
FSA has undertaken including number of contacts made by each method and
overall percentage of operations reached for the hearing record?
Answer. Although an independent, authoritative registry of eligible
dairy operations throughout the country is unavailable, so a percentage
of operations reached cannot be provided, USDA developed a multi-
faceted outreach strategy to ensure producers were aware of their
options under the Dairy Margin Coverage program. USDA performed
significant outreach before and during the DMC enrollment and coverage
election period signup which included press releases, publications and
FSA County Office newsletters. Additionally, in coordination with
agriculture organizations including farm credit, farm bureau, and ag
extension, FSA provided information and support in promotion of the DMC
program. FSA County Offices were authorized to perform additional
outreach as needed and promote the program throughout their county
area. County Offices regularly informed dairy operations on DMC by use
of the GovDelivery electronic newsletter. Additionally, county staff
made calls to dairy operations reminding them of program deadlines and
held DMC information meetings separately or in coordination with the
affiliated dairy agricultural organizations. FSA will continue to
employ the strategies outlined below during future enrollment periods
as well.
The FSA Administrator, Outreach Coordinator and Deputy
Administrator for Farm Programs held three separate dairy industry
stakeholder calls with over forty stakeholders on the following dates:
Call 1: 4/22/19
Call 2: 6/14/19
Call 3: 9/9/19
Summary of letters and post cards mailed in 2019 for dairy
programs:
MPP:
1. Retroactive LGM-MPP--Signup postcard to LGM dairy operations that
did not participate in MPP informing of MPP sign-up. 300
postcards mailed to this target audience.
2. Limited MPP--For 2018 MPP partial year contracts, 468
informational sessions were conducted by FSA County Office
staff, that covered MPP, along with DMC and LGM.
Additionally, news releases were distributed at the state
and national levels through the Agency's county specific e-
mail lists. As a result, there were 296 applications for
MPP received.
3. MPP Repayments--Letter informing dairy operations of their
specific MPP repayments amounts for cash or credit. 14,404
mailed.
DMC:
1. Notification Letter to MPP-Dairy participants of 2019 DMC sign
up. 28,703 mailed.
2. Reminder post card to dairy operations not enrolled in DMC. 9,795
mailed.
3. Receivable letter to dairy operations with unpaid premiums. 3,604
mailed.
Key Updates:
2019 Enrollment:
23,269 producers have signed up for the program.
10,040 producers signed a 5 year contract.
9,157 producers applied $30 million in credit from
their Margin Protection Program for Dairy participation to
DMC.
For Tier One, 99.3% of producers elected 95% coverage.
For Tier Two, 98.6% of producers elected 95% coverage.
2020 Enrollment (as of November 4, 2019):
3,103 producers have signed up for the program.
For Tier One, 99.2% of producers elected 95% coverage.
For Tier Two, 98.8% of producers elected 95% coverage.
Comms/Outreach Analytics for DMC campaign:
69,770+ page views for dairy-related news releases,
blogs and webpages.
376,200+ emails opened with dairy-related information.
3,220+ earned media articles with an audience reach of
more than 10.7 million people.
622,400+ impressions on USDA and FPAC-managed social
media accounts
38,800+ visits to the DMC Decision Tool.
150 participants in June 17 webinar.
468 targeted outreach meetings were carried out as of
Sept. 30, 2019.
Question 2. We have an issue where FSA loan officers have approved
loans for young operators using shared facilities, only then to be told
that they don't qualify under DMC rules. What are you doing to make
sure that new and beginning farmers have access to DMC and your program
rules aren't in conflict and are county committees being used to give
guidance on whether this is a new operation and not an effort to game
the system?
Answer. DMC and Farm Loan Programs are administered under separate
authorizing statutes, and these statutes have differences in
determining a producer's eligibility for each. The DMC program allows
new and beginning farmers the opportunity to establish a new production
history depending on when they started to commercially market milk. FSA
does have limitations on multiple producer operations. County Executive
Directors (CEDs) are trained on producer eligibility and other
requirements for DMC. They work with County Committees, which
determines a dairy operation's eligibility for the DMC program based on
separate and distinct operating criteria. In the case of
intergenerational transfers, a producer is able to participate in DMC
and also obtain a farm loan.
Assisting beginning farmers and ranchers has been a priority of
Secretary Perdue for 3 years. We encourage you to provide us with
specific cases of farmers who have been unable to utilize DMC due to
shared facilities operations to assess what may be done.
Questions Submitted by Hon. Anthony Brindisi, a Representative in
Congress from New York
Question 1. What concerns, if any, are you hearing from farmers
about the program, concerns that may be keeping them from signing up
for the program? If so, what are your plans for addressing such issues?
Answer. USDA is aware not all dairy operations have chosen to
participate in the DMC program. While robust outreach efforts were
implemented to encourage DMC participation, some producers decided not
to participate due to declining government support and religious
considerations. USDA will continue to communicate and encourage
participation from all dairy operations.
Question 2. With 2019 DMC sign-ups now closed, can you share a bit
about the outreach work that FSA has done to encourage all producers to
sign up for the program, even those that had not been in the Margin
Protection Program?
Answer. USDA performed significant outreach before and during the
DMC enrollment and coverage election period signup which included press
releases, publications and FSA County Office newsletters. Additionally,
in coordination with agriculture organizations including farm credit,
farm bureau, and ag extension, FSA provided information and support in
promotion of the DMC program. FSA County Offices were authorized to
perform additional outreach as needed and promote the program
throughout their county area.
Question 3. With the 2020 sign-up not far away, do you anticipate
any changes being made to the process based on how this year's process
went?
Answer. The Dairy Margin Coverage (DMC) enrollment and coverage
election period for 2020 is currently open until December 13, 2019. DMC
enrollment process for 2020 is unchanged from 2019, and FSA is planning
to employ similar outreach strategies to inform producers of their
coverage options under the program We issued a news release at the
commencement of signup on October 7 and we will continue to make
departmental notifications to the dairy industry, individually notify
producers through postcards and letters, as well as use our GovDelivery
platform to notify producers, in addition to efforts made at the local
levels through our County Offices to ensure producers are well informed
about the signup process for 2020.
Question Submitted by Hon. TJ Cox, a Representative in Congress from
California
Question. I have a question regarding the Dairy Margin Coverage
Program, and organic dairy farms are also eligible for the program. And
I would like to hear about any specific outreach you have done to reach
this section of the industry?
Answer. USDA performed significant outreach before and during the
DMC signup which included press releases, publications and FSA County
Office newsletters. Additionally, in coordination with agriculture
organizations including farm credit, farm bureau, and ag extension, FSA
provided information and support in promotion of the DMC program. FSA
County Offices were authorized to perform additional outreach as needed
including organic producers and promote the program throughout their
county area.
Question Submitted by Hon. Doug LaMalfa, a Representative in Congress
from California
Question. In the area of the PLC, Price Loss Coverage, as it
applies to rice and/or others that are applicable, but in rice
particularly, the crop year being what it is, producers may not receive
a payment until November or December, even though the marketing year
ends in the summer, in July typically. What is being done to help with
the timely issuance of payments to those producers, especially since
the cash flow can be an issue for some?
Answer. The Agricultural Act of 2014 established the timing of ARC
and PLC payments, which shall be made beginning October 1, or as soon
as practicable thereafter, after the end of the applicable marketing
year for the covered commodity. The Agriculture Improvement Act of 2018
retains this provision. Based on stakeholder input during the
implementation of the 2014 Act, the price that all short and medium
grain rice receives outside California is used for the calculation of
the final marketing year average price for this program. This data is
available by the end of October, several months earlier than final
price data from California, which allows ARC and PLC payments to be
made in November, consistent with the statute.