[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]

HEARING FOR THE PURPOSE OF RECEIVING TESTIMONY FROM THE HONORABLE
THOMAS J. VILSACK, SECRETARY, U.S. DEPARTMENT OF AGRICULTURE

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

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTEENTH CONGRESS

SECOND SESSION
__________

FEBRUARY 14, 2024
__________

Serial No. 118-19

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

U.S. GOVERNMENT PUBLISHING OFFICE

57-377 PDF WASHINGTON : 2024

COMMITTEE ON AGRICULTURE

GLENN THOMPSON, Pennsylvania, Chairman

FRANK D. LUCAS, Oklahoma DAVID SCOTT, Georgia, Ranking
AUSTIN SCOTT, Georgia, Vice Minority Member
Chairman JIM COSTA, California
ERIC A. ``RICK'' CRAWFORD, Arkansas JAMES P. McGOVERN, Massachusetts
SCOTT DesJARLAIS, Tennessee ALMA S. ADAMS, North Carolina
DOUG LaMALFA, California ABIGAIL DAVIS SPANBERGER, Virginia
DAVID ROUZER, North Carolina JAHANA HAYES, Connecticut
TRENT KELLY, Mississippi SHONTEL M. BROWN, Ohio
DON BACON, Nebraska SHARICE DAVIDS, Kansas
MIKE BOST, Illinois ELISSA SLOTKIN, Michigan
DUSTY JOHNSON, South Dakota YADIRA CARAVEO, Colorado
JAMES R. BAIRD, Indiana ANDREA SALINAS, Oregon
TRACEY MANN, Kansas MARIE GLUESENKAMP PEREZ,
RANDY FEENSTRA, Iowa Washington
MARY E. MILLER, Illinois DONALD G. DAVIS, North Carolina,
BARRY MOORE, Alabama Vice Ranking Minority Member
KAT CAMMACK, Florida JILL N. TOKUDA, Hawaii
BRAD FINSTAD, Minnesota NIKKI BUDZINSKI, Illinois
JOHN W. ROSE, Tennessee ERIC SORENSEN, Illinois
RONNY JACKSON, Texas GABE VASQUEZ, New Mexico
MARCUS J. MOLINARO, New York JASMINE CROCKETT, Texas
MONICA De La CRUZ, Texas JONATHAN L. JACKSON, Illinois
NICHOLAS A. LANGWORTHY, New York GREG CASAR, Texas
JOHN S. DUARTE, California CHELLIE PINGREE, Maine
ZACHARY NUNN, Iowa SALUD O. CARBAJAL, California
MARK ALFORD, Missouri ANGIE CRAIG, Minnesota
DERRICK VAN ORDEN, Wisconsin DARREN SOTO, Florida
LORI CHAVEZ-DeREMER, Oregon SANFORD D. BISHOP, Jr., Georgia
MAX L. MILLER, Ohio

______

Parish Braden, Staff Director

Anne Simmons, Minority Staff Director

(ii)

C O N T E N T S

----------
Page
Bacon, Hon. Don, a Representative in Congress from Nebraska,
submitted article.............................................. 134
Crawford, Hon. Eric A. ``Rick'', a Representative in Congress
from Arkansas, submitted article............................... 128
DesJarlais, Hon. Scott, a Representative in Congress from
Tennessee, submitted article................................... 132
Finstad, Hon. Brad, a Representative in Congress from Minnesota,
submitted report............................................... 154
Hayes, Hon. Jahana, a Representative in Congress from
Connecticut:
Submitted chart.............................................. 170
Supplementary information.................................... 170
Rose, Hon. John W., a Representative in Congress from Tennessee,
submitted press release........................................ 169
Scott, Hon. David, a Representative in Congress from Georgia,
opening statement.............................................. 3
Soto, Hon. Darren, a Representative in Congress from Florida,
submitted letter............................................... 172
Thompson, Hon. Glenn, a Representative in Congress from
Pennsylvania, opening statement................................ 1
Prepared statement........................................... 2
Submitted chart.............................................. 105
Submitted fact sheet......................................... 105
Submitted report............................................. 110

Witness

Vilsack, Hon. Thomas ``Tom'' J., Secretary, U.S. Department of
Agriculture, Washington, D.C................................... 4
Prepared statement........................................... 6
Supplementary material....................................... 173
Submitted questions.......................................... 175

HEARING FOR THE PURPOSE OF RECEIVING TESTIMONY FROM THE HONORABLE
THOMAS J. VILSACK, SECRETARY, U.S. DEPARTMENT OF AGRICULTURE

----------

WEDNESDAY, FEBRUARY 14, 2024

House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Committee met, pursuant to call, at 10:00 a.m., Room
1300, Longworth House Office Building, Hon. Glenn Thompson
[Chairman of the Committee] presiding.
Present: Representatives Thompson, Lucas, Austin Scott of
Georgia, Crawford, DesJarlais, LaMalfa, Rouzer, Kelly, Bacon,
Johnson, Baird, Mann, Feenstra, Miller of Illinois, Moore,
Cammack, Finstad, Rose, Molinaro, De La Cruz, Langworthy,
Duarte, Nunn, Alford, Van Orden, Chavez-DeRemer, Miller of
Ohio, David Scott of Georgia, Costa, McGovern, Adams,
Spanberger, Hayes, Brown, Davids of Kansas, Slotkin, Caraveo,
Salinas, Perez, Davis of North Carolina, Tokuda, Budzinski,
Sorensen, Vasquez, Crockett, Jackson of Illinois, Pingree,
Carbajal, Craig, Soto, and Bishop.
Staff Present: Justin Benavidez, Parish Braden, Halee
Fisher, Tim Fitzgerald, Benjamin Goldey, Justina Graff, Harlea
Hoelscher, Josh Maxwell, Samuel Rogers, Patricia Straughn,
Chris Stottmann, Jennifer Tiller, Erin Wilson, John Konya, Kate
Fink, Anetra Harbor, Ashley Smith, Michael Stein, Katherine
Stewart, and Dana Sandman.

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

The Chairman. Good morning, everyone. The Committee will
come to order. After brief opening remarks, Members will
receive testimony from our witness today, and then the hearing
will be open to questions.
Good morning once again, and welcome to today's hearing to
receive testimony from the Secretary of Agriculture. I thank my
colleagues for participating and my friend, Secretary Vilsack,
for his time. We have a lengthy hearing ahead of us, so I will
be brief in my remarks.
For nearly 3 years, I have traveled across the country to
hear from farmers, ranchers, foresters, rural communities, and
everyday consumers. Many, many of our colleagues on both sides
of the aisle have joined me for those travels. The message that
we have heard from those folks was very clear. They need the
government to work for them, not against them. These men and
women have struggled with fractured supply chains, considerable
input costs, relentless inflation, natural disasters, volatile
markets, and labor shortages, each consistently worsened by
ill-conceived half-baked Executive action.
In what seemingly is a daily occurrence, taxpayer dollars
are being sent to every corner of the country, yet nothing has
changed. We are not producing more fertilizer. We are not
reducing the cost of production. We are not making food more
affordable. However, we are burdening the taxpayer. We are
losing ground on the world stage, and we are a net agricultural
importer. We are less independent, less resilient, and less
competitive.
Now, the farm bill is the best opportunity that exists to
course-correct. Now, I have been clear in my intent. Congress
can and must craft a bipartisan farm bill that aligns the farm
safety net with the needs of producers, expands market access
and trade promotion opportunities, strengthens program
operations to demand transparency and accountability to the
taxpayers, and helping our neighbors in need, but doing so
without indiscriminate expansion of our nutrition safety net.
However, there remain significant headwinds to Congress'
success. It is virtually impossible to create a robust and
resilient farm safety net without significant investment.
Considerable opportunities exist within our jurisdiction to not
only fund the safety net, but fund a substantial number of
shared bipartisan priorities. And I continue to implore my
Democratic colleagues to think in earnest about these
priorities, priorities that can be funded without cutting a
SNAP benefit or eliminating the important conservation programs
that we have all come to appreciate.
Washington, D.C. is filled with rhetoric and armchair
pundits. People go out of their way to work against you. Folks
think a farm bill is impossible, that politics will prevail
over good policy, that the dysfunction surrounding us has
consumed us. Every comment intensifies my commitment to the
American farmer. I am on your side. I am your champion, and I
will never stop fighting for you.
[The prepared statement of Mr. Thompson follows:]

Prepared Statement of Hon. Glenn Thompson, a Representative in Congress
from Pennsylvania
Good morning, and welcome to today's hearing to receive testimony
from the Secretary of Agriculture. I thank my colleagues for
participating and my friend, Secretary Vilsack, for his time. We have a
lengthy hearing ahead of us, so I will be brief in my remarks.
For nearly 3 years, I traveled across the country to hear from
farmers, ranchers, foresters, rural communities, and everyday
consumers. Their message was clear: they need the government to work
for them, not against them.
These men and women have struggled with fractured supply chains,
considerable input costs, relentless inflation, natural disasters,
volatile markets, and labor shortages, each consistently worsened by
ill-conceived, half-baked Executive action.
In what seemingly is a daily occurrence, taxpayer dollars are being
sent to every corner of the country, yet nothing has changed. We are
not producing more fertilizer. We are not reducing the cost of
production. We are not making food more affordable. However, we are
burdening the taxpayer. We are losing ground on the world stage. We are
a net agricultural importer.
We are less independent, less resilient, and less competitive.
A farm bill is the best opportunity that exists to course correct.
I have been clear in my intent: Congress can and must craft a
bipartisan farm bill that aligns the farm safety net with the needs of
producers, expands market access and trade promotion opportunities,
strengthens program operations to demand transparency and
accountability to the taxpayer, and reinforces not only the importance
of helping our neighbors in need, but doing so without indiscriminate
expansion of our nutrition safety net.
However, there remains significant headwinds to Congress' success.
It is virtually impossible to create a robust and resilient farm
safety net without significant investment. Considerable opportunities
exist--within our jurisdiction--to not only fund the safety net, but
fund a substantial number of shared, bipartisan priorities. I continue
to implore my Democratic colleagues to think, in earnest, about those
priorities, priorities that can be funded without cutting a SNAP
benefit or eliminating the important conservation programs we have all
come to appreciate.
Washington, D.C. is filled with rhetoric and armchair pundits.
People go out of their way to work against you. Folks think a farm bill
is impossible. That politics will prevail over good policy. That the
dysfunction surrounding us has consumed us.
Every comment intensifies my commitment to the American farmer: I
am on your side. I am your champion. And I will never stop fighting for
you.

The Chairman. And with that, I yield to my good friend and
distinguished Ranking Member, Mr. Scott.

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

Mr. David Scott of Georgia. Well, thank you, Mr. Chairman,
for holding this hearing today. And I certainly welcome our
distinguished Secretary Vilsack. The very last time that
Secretary Vilsack sat before this Committee as a witness in
March of last year, I spoke of beginning the farm bill process
in earnest. Now, nearly a year later, we are still working
towards our shared goal of passing a strong, effective, and
bipartisan farm bill. And I hope that the testimony of
Secretary Vilsack will provide our Committee with the help in
getting us closer to that shared goal.
Changes in Republican leadership, potential government
shutdowns, and the inability to pass the agriculture
appropriations bill have each injected uncertainty into this
process and, unfortunately, slowed our work. I do not envy you,
Mr. Chairman. You are doing what you can to navigate these
turbulent waters. And I want to give you credit. You have
continued to meet and discuss policy priorities with me, with
our House Agriculture Democrats, and our staff, and we
appreciate that. To aid these efforts and reinforce that House
Democrats want to get a farm bill done, we published our farm
bill priorities and our principles last week. Our principles
should not surprise anyone who has been following the work of
this Committee.
Our principles are this. We want to reduce hunger. Hunger
is a serious problem in our nation. And we want to strengthen
our American farmers. We are losing farms, particularly family
farms, at a staggering rate. We want to invest in sustainable
agriculture, revitalize rural America, lower costs for farmers
and families, and improve equity. I know we can do this by
working together because I know, Mr. Chairman, we have been
together for quite a while on this Committee. And I know you
care just as much as I do about our nation's farmers. And we
work together on that, have been working together on that for
many years. And I know we can do this by working together.
So let's put aside, first and foremost, this proposal to
cut SNAP benefits. Whether you call it a cut or a reduction of
future benefits, Democrats oppose it. We will not cut SNAP.
Now, I understand that my Republican colleagues are concerned
about spending. Let me make a few points here. At least you are
concerned about spending when it comes to SNAP. But because the
economy has improved, benefits and need for the program has
decreased. The CBO is now expecting SNAP to cost $67 billion
less over the next decade than originally expected. That is
important as we go into this negotiation.
Let's also put aside the proposal to take IRA (Pub. L. 117-
169) conservation or energy funding away from its intended
purpose. Robbing Peter to pay Paul is not going to result in an
effective farm bill. These IRA programs are oversubscribed, so
we should not take funding from them to pay for other farm bill
priorities. We Democrats feel strongly about this.
So let me close by saying that we do want a bipartisan
bill. We want to see our bipartisan priorities funded, but we
need to continue the funding process. We in agriculture need
more funding, but we need also to continue to work together to
find that funding. Over the past 20 years, bipartisan farm
bills have succeeded when Republicans and Democratic leadership
made the farm bill a priority and provided outside resources to
the Agriculture Committee.
I look forward to hearing from you, Mr. Secretary, and to
working with my colleagues and my good friend, Chairman
Thompson on building a bipartisan bill that strengthens our
safety net programs for our farmers and the hungry families
they feed. It is a tall task, but we are up to accomplishing
it, and we can do it together.
And please pardon my cold. I yield back.
The Chairman. I thank the gentleman.
The chair would request that other Members submit their
opening statements for the record so our witness can begin his
testimony and to ensure that there is ample time for questions.
I am very, very pleased to welcome back to the Committee
our witness for today, USDA Secretary Tom Vilsack. Mr.
Secretary, thank you for joining us. We are now going to
proceed your testimony. You will have 5 minutes. The timer in
front of you will count down to zero, at which point your time
has expired.
Secretary Vilsack, please begin when you are ready.

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

Secretary Vilsack. Mr. Chairman, thank you very much to you
and to the Ranking Member, Representative Scott. Thank you for
the opportunity to be here today, And thanks to all Members of
this Committee for their service.
Mr. Chairman, I read with interest a recent article that
you published in Agri-Pulse titled, It's Time to get Serious
about Revitalizing Rural America. Your opening comments today
summarized that article.
I thought it would be helpful to perhaps put in context
some of the information that I have that suggests that we are
in fact serious about revitalizing rural America. First of all,
let me begin by indicating that the last 3 years of net cash
farm income were record-setting, the best 3 years in the last
50 years in this country. This year's income projected at just
below historical norms will make it the best 4 years in recent
history. It has also allowed for our farmers to have
significant liquidity as they deal with challenging times.
Our rural unemployment rate is now at a lowest rate in 35
years. Our rural employment has returned to pre-pandemic
levels, and the clean energy jobs are helping to lead the way
rural poverty is down. And in fact, in 55 counties that
historically were persistently poor are no longer in that
category because of activities and work being done in those
counties to improve economic opportunity.
For the first time in 10 years, rural populations have
grown, more people coming into rural America than leaving. Real
wage growth in 2023 exceeds inflation by nearly two percent.
And speaking of inflation and food inflation, it is headed
down. Grocery store price inflation year over year is at 1.3
percent, the lowest it has been since 2021. And our Economic
Research Service predicts that food-at-home prices will in fact
decrease in 2024.
I have several concerns that I want to share with the
Committee. They have to do with the loss of farmers and farms,
the loss of farmland, and the heavy concentration of farm
income. In 1981, then-Secretary Bob Bergland raised concerns
about the efforts and focus on production and its impact on the
number of farms in this country. Since he raised that warning
in 1981, we have lost 536,543 farms. We have lost over 165
million acres of farmland. Now, to give you a sense of how many
farmers that is, that is every farmer today in South Dakota,
North Dakota, Minnesota, Wisconsin, Illinois, Iowa, Nebraska,
Colorado, Oklahoma, and Missouri. The farmland represents all
the landmass of Florida, Georgia, North Carolina, South
Carolina, Maryland, and almost all of Virginia.
Farm income has been extraordinarily concentrated with the
top seven percent of farms, those who generate more than
$500,000 in sales on an annual basis over the last 5 years
getting 85 percent of the income, which meant that 93 percent
of farms, nearly two million farms, had to share 15 percent.
These are serious issues, and I think it is important for us to
reset the notion that the only option in American agriculture
is to get big or get out. It is time for us to do better for
our small- and mid-sized farming operations, those 93 percent
that share 15 percent of income that are surviving for the most
part by taking a second job.
I think we need to create for our farm families ways in
which the farm, not the farmer, can create additional income.
More new and better market opportunities and more income
streams is a strategy that we are investing in at USDA,
climate-smart agriculture and forestry commodities providing a
value-added opportunity, as well as participation in ecosystem
markets, a new income stream for farms; sustainable aviation
fuel and other bioproduct manufacturing from agricultural
waste, creating another commodity opportunity; renewable energy
production not only to lower costs, but also to assist rural
electric cooperatives as they transition from fossil fuel-based
generation; new competitive meat and poultry markets with over
400 investments already being made.
And speaking of fertilizer, as you did in your comments,
Mr. Chairman, I need to tell you that in four states we are in
fact producing more fertilizer in Florida, Missouri, Alabama,
and Montana. There are 40 projects that we have invested in,
construction underway in the other 36, and there will be more
coming.
So, Mr. Chairman, I acknowledge the importance of the farm
bill, but I think we also need a budget. We need the ability to
utilize the Commodity Credit Corporation with flexibility, and
we need to preserve the Inflation Reduction Act conservation
funding. All of these are valuable tools in order to continue
the momentum that has been building for markets, jobs, and
better income for rural Americans and for our farm families.
[The prepared statement of Secretary Vilsack follows:]

Prepared Statement of Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S.
Department of Agriculture, Washington, D.C.
Thank you, Chairman Thompson, Ranking Member Scott, and Members of
the Committee for the opportunity to come before you today to provide
an update on the state of rural America, and the work the U.S.
Department of Agriculture (USDA) has been doing over the past 3 years
of the Biden-Harris Administration.
USDA's work touches every community, and nearly every landscape,
across the entire country. The People's Department provides safety nets
to farmers, nutrition assistance to some of our country's most
vulnerable citizens, support for renewable clean energy, firefighters
to keep our communities safe, food safety inspections--and much, much
more. It is an honor to lead this department, and I am excited to share
with you some of the progress we have made over the past 3 years to
support America's farmers and ranchers, create opportunity in rural
areas, improve USDA's processes and customer service, and protect
forests and other natural resources. In order to capture that progress,
it is important to discuss where we started at the beginning of this
Administration, and then look at how far we have come.
Every year, USDA's Economic Research Service (ERS) publishes a
report called ``Rural America at A Glance.'' The Rural America at a
Glance report published in November 2021 captured the state of rural
America in late 2020 and early 2021, which of course was at the height
of the COVID-19 pandemic. At the time, ERS wrote that people in rural
or less densely populated areas might be less resilient than urban and
suburban communities to shocks from the pandemic, and they could face
greater challenges with recovery since they already experienced greater
economic challenges accessing products, services, or commuting to work.
Much of the report explored how a relative lack of broadband access in
particular, and the prevalence of persistently poor communities among
America's rural areas, might also contribute to the challenges these
communities face during recovery. Of the 353 counties classified as
experiencing persistent poverty at the time, 301 were in non-
metropolitan areas. In the months leading up to the pandemic, only 72
percent of rural residents and only 63 percent of rural residents in
persistent poverty counties had moderate- or high-speed broadband
available in their census blocks, the report found.
While the pandemic put rural challenges under a microscope in ways
that made it easy to see exactly what needed to be addressed, these
challenges predated COVID-19. The report noted that over the decade
leading up to its publication, the rural population declined 0.6
percent while the urban population grew 8.8 percent. The picture was
much bleaker for rural counties with persistent poverty, whose
populations declined by 5.7 percent. The report also noted that the
average annual employment growth rate prior to the pandemic in rural
areas was so low that rural America still had not recovered from the
Great Recession by 2019. So, while unemployment remained somewhat
steadier in rural areas compared to urban areas during the pandemic,
ERS' outlook for rural America at the time of the report had not been
hopeful for years due to longstanding systemic issues, and they did not
predict a strong turnaround.
However, the 2023 Rural America at a Glance report, published this
past November, paints a much brighter picture. This report notes that
the rural population is growing again after a decade of overall
population loss, with growth of approximately \1/4\ percent from 2020
to 2022. It also showed that rural employment levels and annual growth
rates have nearly returned to those seen in the years prior to the
pandemic. In particular, the emergence of the clean energy economy is a
growing employment sector, with clean energy jobs employing more than
243,000 workers in non-metropolitan counties in 2021, and those jobs
have continued to grow through our investments since. The rural
population is also experiencing a decline in poverty. In 2021, 9.7
percent fewer non-metropolitan counties experienced persistent poverty
(county-level poverty rates of 20 percent or higher over the last 30
years) compared with a decade earlier.
Certainly, these are not real-time statistics, nor is it possible
to record all of the factors that contribute to improving circumstances
in rural areas. Even so, we know that some factors are likely to have
contributed and continue to do so in the period following what was
captured in the latest report. First, net farm income has been at an
all-time record high in recent years.
Specifically, farm income over the 2021-2023 period represents the
highest level of farm income in the last 50 years--with 2022 attaining
a record high and net cash farm income for 2023 being one of the best
years on record at 16 percent above average for the last 2 decades. We
saw that the bulk of that income has been driven by the market, namely
high commodity prices and the 3 highest years on record for
agricultural exports, and not by farm safety net payments. And while
the first farm income forecast of 2024 indicates net farm income this
year will return to prior levels that are slightly below these historic
levels for farm income, this forecast underscores the critical
importance of USDA's ongoing work to help foster prosperity for
producers and the communities they love by supporting an economy that
grows from the bottom up and the middle out, and by creating new market
opportunities that promote competition in the marketplace that can help
combat low prices and high input costs. At the end of the day, a strong
farm economy inarguably contributes to a strong rural economy and makes
rural communities a more attractive place to live--and we are doing
everything within our control to focus our efforts on enhancing
economic resiliency.
The historic years of farm income mirror the stronger economy that
President Biden and his economic team have advanced coming out of the
pandemic; the U.S. economy grew 3.1 percent over the past year while
adding 2.9 million jobs and with core inflation moving back down to the
pre-pandemic benchmark over the last 6 months. And thanks to strong
wage gains and higher job growth than expected, more families are
benefitting. As a result, our policies have contributed to wages,
wealth, and employment that are higher now than they were before the
pandemic. This is just a snapshot of the steady improvement we have
seen under this Administration, with the economy adding 14.8 million
jobs overall with 2 full years of unemployment under four percent.
Another factor benefitting rural communities is an unprecedented
investment to improve and modernize infrastructure. From water and
waste treatment to electric power and telecommunications services to
modernized schools and hospitals, the Biden-Harris Administration and
USDA have been laser-focused on bringing rural community infrastructure
and services into the 21st century. Since the beginning of this
Administration, we have also been able to connect nearly 600,000 people
across 35 states and territories to high-speed internet. This much-
needed infrastructure is improving the quality of rural life and making
it possible for more people to enjoy the beauty of rural America.
Despite this good news, we are all aware that systemic challenges
remain, and we have yet to see rural areas reach their full potential.
Rural poverty has declined in most, but not all, rural counties. Food
insecurity also remains more common in rural areas than suburban areas.
And, even with higher farm income, farming still remains an
incredibly risky business. Given tightening conditions and high
interest rates, compounded with rising production costs, it is
increasingly difficult for some farms to be able to meet short-term
debt commitments. We also know that over half of farm households had
negative farm income, and 84 percent of farm families obtain the
majority of their income from off the farm.
Over the past several decades our economy has been focused on
efficiency and productivity with businesses across the spectrum--
manufacturing, retail, services, technology, agriculture--
consolidating. Case in point, U.S. agriculture policy has,
counterintuitively, encouraged a system that inherently shrinks
opportunity, rather than grows it. The ``get big or get out'' paradigm
established under Secretary Butz in the 1970s instructed bigger farms
to expand, and the consolidation that followed significantly reduced
the viability of small- and mid-sized farming operations. All farmers
strive to be efficient, but our current system supports production of
limited crops at an enormous scale. That kind of system demands a need
for bigger farms, but fewer farmers. This concept of shrinking
opportunity isn't theoretical--it's proven. Since 1981, we have lost
437,000 farms and 141 million acres of farmland--that's equivalent to
the landmass of Florida, Georgia, Maryland, North Carolina, and South
Carolina combined.
Having fewer farmers predictably has led to high concentration of
income. Despite record-breaking farm income, in recent years, typically
about seven percent of U.S. farms receive 85 percent of overall farm
income, which means the remaining 93 percent of our farms share only 15
percent of farm income. On top of this, farmers are receiving less of
the food dollar today than ever before.
It is clear that we are at a pivotal moment today, where we have
the ability to choose a more expansive set of options to create, not
diminish, opportunity. USDA is using the American Rescue Plan Act
(ARPA), Bipartisan Infrastructure Law (BIL), and Inflation Reduction
Act (IRA), as well as the Commodity Credit Corporation (CCC), to take a
comprehensive approach to create opportunity for rural communities and
invest in farmers, ranchers, and small businesses. While some of these
investments are still nascent, we are beginning to see the fruits of
this expansive policy framework that adds value for farms of every
shape and every size and is designed for the real needs of rural
America.
The Biden-Harris Administration's historic investments in
infrastructure and new market opportunities have provided USDA with a
powerful set of tools for restructuring our food and agriculture
economy so small- and mid-sized producers get a fair shake, catalyzing
strong rural economies where people have the opportunity and tools they
need to build a good life in the communities they love.
Through the President's Investing in America agenda, we are
supporting projects to lower input costs for rural producers and
businesses, which increases their net income and improves their bottom
line. In 2023, we provided funding for projects that will help farmers
and rural small businesses reduce their energy costs--in some cases up
to 100 percent--with over 2,000 investments totaling over $397 million,
most of which were made possible by IRA funding for the Rural Energy
for America Program (REAP). We also began addressing the strain placed
on producers by higher fertilizer costs driven by Russia's war of
aggression against the people of Ukraine thanks to the flexibility
offered by the CCC. For example, a grant in Wisconsin is helping a
dairy farm convert manure to fertilizer through the construction of a
nutrient concentration system that reduces greenhouse gas emissions. We
are investing $900 million in solutions like these to increase, or
otherwise expand, the manufacturing and processing of fertilizer and
nutrient alternatives in the United States. In a short period of time,
USDA has already announced $166 million in investments to 40 American
companies, with many more to come.
We are also giving producers new options to manage their land and
creating new, climate-focused markets. With funding made available
through the IRA, USDA has enrolled more farmers in voluntary
conservation programs than at any point in history. In 2023, USDA
enrolled nearly 5,300 additional producers in conservation programs and
awarded 5,287 IRA applications for a total of $391 million. Even with
those awards, the agency still had 5,986 applications on hand going
into this Fiscal Year 2024. In our core farm bill programs, we're also
seeing great producer interest. Since 2021, the Grassland Conservation
Reserve Program (CRP) has enrolled a historic 6.8 million acres on over
10,000 farms. These programs are supporting farmers, important stewards
of our land, in the work they are doing to provide productive and
sustainable lands.
USDA is also increasing market opportunities for producers to sell
their products. We are strengthening local and regional food systems
and providing producers with more options to market their products.
USDA invested millions to help businesses stay in operation or build
new processing capacity in 2023 as part of the Biden-Harris
Administration's $1 billion commitment to expand meat and poultry
processing capacity for small- and mid-sized processors. Because of
investments like these, a company in Bidwell, Ohio will be able to
increase their processing facility by 50 percent, and another company
in Mills County, Iowa will expand processing capacity by 1,500 head of
cattle per day and employ up to 800 workers. Through the Meat and
Poultry Processing Expansion Program and the Meat and Poultry
Intermediary Lending Program, USDA has awarded funding to 66 entities
across the country, creating 4,207 jobs and increasing processing
capacity by 337,770 shackle spaces.
USDA has also capitalized on its role as a major food buyer. In
Fiscal Year 2023, 63 percent of USDA's purchases for domestic nutrition
programs came from small businesses. This is an increase of eight
percent over Fiscal Year 2022. With this increase, USDA is creating
more opportunities to bolster rural communities, support small
businesses, and connect small- and mid-sized farmers to new markets.
USDA signed Local Food Procurement Agreements with 50 states, 35
Tribes, and three territories to purchase local food for food banks,
schools, and other nutrition assistance programs. One such agreement in
Oklahoma is identifying and reaching out to underserved producers to
provide them with an opportunity to distribute their food to local
underserved communities, helping to expand economic development for
both the producers and communities they serve. These programs create
jobs, lower costs for consumers, and help farmers and ranchers attain
fairer prices by giving them options closer to the farm and making our
food supply chain more resilient. They also complement the important
role USDA plays in reducing hunger and promoting health through our
full suite of Federal nutrition assistance programs. From rural areas
to cities and towns across the country, USDA reached one in four
Americans with healthy food, nutrition education, and other related
resources in 2023.
And for the rural Americans who do not have the tools to take
advantage of these opportunities, this Administration launched the
Rural Partners Network, which brings a whole of government approach to
delivering technical assistance and resources. This allows us to lift
up rural communities with a focused approach and ensure the people who
are looking to take advantage of these opportunities are able. Through
Rural Development programs such as ReConnect and Emergency Rural Health
Care Grants we are expanding access to high-speed internet and helping
rural communities maintain access to healthcare, two critical resources
for thriving rural communities. In 2023 alone, USDA helped more than
250,000 people in rural communities access affordable, high-speed
internet benefitting over 11,000 farms, 7,300 rural businesses, and
nearly 500 educational facilities. Additionally, thanks to 806 grants
provided to health care institutions under this Administration, more
than 22 million people have greater access to health care and
nutrition, which is critical for not only emergency needs but also to
ensure access to primary care, rehabilitation, and long-term care for
millions of Americans.
We are also working hard to bring a whole of USDA approach to
address other systemic issues, such as lack of equity and inclusiveness
in our programs, to make USDA a great place to work and to do business.
USDA's Equity Commission has made recommendations that are informing
USDA's policy decisions so that the Department's programs, services,
and decisions reflect the values of equity and inclusion. We
acknowledge we have not done enough to provide all farmers and ranchers
an equal chance of success and prosperity and are actively working to
change that. As of the beginning of this month, USDA has helped more
than 37,000 farmers and ranchers who were in financial distress stay on
their farms and keep farming, thanks to resources provided through
Section 22006 of the IRA. At the same time, under the guidance of our
Deputy Secretary, USDA has modernized its processes. For example, we
have greatly improved the Farm Service Agency's (FSA) loan application
processes to better serve farmers, in part through lessons learned from
Farm Loan Borrower Relief Program implementation. USDA has streamlined
FSA loan applications from 29 pages to 13, dramatically reducing the
amount of time it takes to apply for a loan and making the process less
onerous. In addition, in December 2023, USDA announced an online,
interactive, guided application that can simplify the direct loan
process for the more than 26,000 customers who apply each year and make
it more accessible for those in remote areas or who may not have time
to leave their operations and visit an FSA office. We have also
recently added the option for FSA borrowers to make payments on their
loans online and will continue to modernize our systems to make it
easier for producers to manage their loans and time. Additionally, we
are also making great progress in rebuilding our workforce. USDA
agencies have increased their use of recruitment and retention
incentives to bring pay more in line with market levels. As a result,
more candidates are accepting job offers--and we are especially proud
of how well this is working with pathways hires at FSA and the Natural
Resource Conservation Service (NRCS).
If we are going to create an agriculture system that works for the
many and the most, I believe the answer is a holistic approach. Not one
focused just on bushels per acre, but one that also measures success as
rural families being able to pay their bills, preserving our lands, and
making their communities a place our children and grandchildren can
call home. Producers of all kinds should be able to make a living and
support their families through farming, not just those with the biggest
operations. As decision makers in USDA and Congress, we should use the
market, climate-based tools, and food systems to create new income
opportunities and value for producers and rural communities.
I welcome this opportunity to discuss these important issues with
you further and help you learn more about the great successes and
progress we have seen in the last year. In turn, I urge you to bear in
mind that we have a choice before us. We can continue on the path that
this Administration has taken that leads to an even better and stronger
rural America, or we can hold tight to the old model and continue a
system that limits opportunities for producers and rural communities.
At this critical moment, are you okay with losing another 400,000 farms
in the next 30 years? What would it take to ensure our young people can
see a future for themselves in agriculture and in rural America? I
worry that turning back will further entrench consolidation, fragile
food supply chains, nutrition insecurity, and high barriers to entry
into agriculture. It will also likely perpetuate trends we are already
seeing, including loss of farmland, and generational poverty. Together,
we can tackle these critical issues and create a healthy, equitable,
and sustainable food system that strengthens our farms and our rural
communities for generations to come.

The Chairman. Secretary Vilsack, thank you for your
important testimony today.
At this time, Members will be recognized for questions in
the order of seniority, alternating between Majority and
Minority Members and in order of arrival for those who joined
us after the hearing convened. You will be recognized for 5
minutes each in order to allow us to get to as many questions
as possible.
And I will recognize myself for 5 minutes.
Mr. Secretary, I wanted to talk on a specific issue or
question a specific issue to begin with that fits in the topic
of regulations and the cost that they impose on both farmers
and consumers. So let's talk about Prop 12. Mr. Secretary, you
and I have discussed this issue. Preliminary data from a
pending study at USDA's Office of the Chief Economist shows
that prices of certain pork products have risen as much as 41
percent since the implementation of Proposition 12. A 2023
study found that the costs associated with Prop 12 are, quote,
``widespread and extensive,'' end quote. That same study
expressed that, quote, ``These costs have a more severe impact
on smaller independent operations, and that distresses placed
upon the entire production and marketing chain will lead to
ever-increasing consolidation and concentration of the
industry,'' end quotes.
Now, we appreciate that the Biden Administration sided with
the industry during the Supreme Court case. As we all know, the
Supreme Court has weighed in on this matter and asked Congress
to act. When thinking about the stated goals of this
Administration in your very own testimony to serve small
producers, can you speak to the economic harms from Proposition
12? And, quite frankly, if pork prices are going up for
consumers and costs are going up for producers, who is winning
here?
Secretary Vilsack. Mr. Chairman, I don't want to take you
all the way back in our history, but I am going to, in response
to your question to the Articles of Confederation. If you
remember, when we began as a republic, we had basically a
theory and structure that states would basically govern their
own activities within their borders. What we found after
several years of that experiment was chaos. And I think,
frankly, that is where we are potentially headed.
The reality is this, that when each state has the ability
to define for itself and for its consumers exactly what farming
techniques or practices are appropriate, it does create the
possibility of 50 different sets of rules and regulations,
which obviously creates serious concerns for producers because
they have no stability, and they have no certainty.
I am not sure that this Congress is going to be able to
pass legislation, with due respect. But I would suggest that if
we don't take this issue seriously, we are going to have chaos
in the marketplace because there is nothing preventing any
state from doing what California did.
Now, why did the Supreme Court decide what they decided?
They decided it because they believed that each and every
producer had their own choice to participate in this market.
They basically said it didn't violate the commerce clause
because it didn't discriminate against any particular producer.
Well, the problem, I think, is that it didn't anticipate the
impact of 12 percent of the market changing the rules on the
entire market. And I think that there is risk of that occurring
all across the country.
Having said that, it is a little bit difficult, however, to
create consistency within this Congress and within this country
on this issue of states' rights, because if you apply this
standard, then you are going to have to discuss some of the
more difficult issues, social issues, guns, abortion, et
cetera. So I don't envy the Congress trying to figure this out.
I will tell you, though, that if Congress doesn't figure it
out, there is going to be chaos.
The Chairman. Yes, I know, hearing from smaller producers,
the larger producers that were prepared to go into that market
have found that the volume that they prepared for is not there
in California, so they are dumping product into other states,
crowding out small producers. There is a lot of implication.
Mr. Secretary, in your testimony and comments around the
country, you often lament about farms getting larger, about how
many are forced to get big or get out. And I will be frank. I,
too, share this concern, but not because of the concentration
of farm income amongst these operations, but because of the
concentration of risk borne by these full-time family farms.
They have been forced into achieving economies-of-scale to be
able to survive or to grow large enough for the next generation
to have room to return to the family farm. These farms might
have more to gain when times are good, but they also have more
to lose when times are bad, which is why we need to make sure
the safety net works for them, too.
Unfortunately, you have taken it upon yourself to utilize
USDA to transform American agriculture through the unfettered
use of the CCC or rewriting the rules on disaster aid programs
to reorient assistance to small and part-time farmers at the
expense of the full-time family farms. The truth is much of the
consolidation you lament is a direct result of costs that are
constantly rising amid softening commodity prices, putting the
squeeze on margins.
And when I travel the country and talk to producers, many
of the additional costs they are bearing are a direct result of
the actions taken by this Administration. Between Department of
Labor rules that have made the H-2A program almost unworkable
and driven up the cost of labor, the EPA's war on crop
protection tools, or even the threat of financial regulations
that will increase cost of banking. As the Biden Administration
is contributing to the expansion of these farming operations,
many decisions with the aim of transforming any sector of the
American economy is not the role of unelected bureaucrats, Mr.
Secretary, but rather, those ideas should be debated in
Congress, and no amount of tinkering around the edges at USDA
will stop that.
Seeing that my time has expired, I now recognize----
Secretary Vilsack. Mr. Chairman, can I have a minute to
respond to that please?
The Chairman. Yes, sir.
Secretary Vilsack. First of all, you mentioned the CCC. I
just want you to know that we have basically followed the
charter that was established by Congress in the establishment
of the CCC. And we have not, as was the case in the previous
Administration, jeopardized the capacity of that fund to be
able to do its farm bill payments.
Second, you mentioned the disaster assistance program. I
would just simply say, when we advised Congress that there was
a $10-$12 billion bill due to assist producers across the board
for disasters in 2022, Congress appropriated $3 billion. You
gave us 30 percent of what we needed. So we had a choice of
basically doing it the way we did before when we had all the
money and the resources to be able to cover all of the
producers, or provide an opportunity for 80 percent of the
producers to receive slightly more. This included those family
farmers you just talked about.
So if I had to do it over again, I would do it the same way
because I think it is helpful to help those smaller producers.
Why? Because they didn't receive the lion's share of the $19
billion of indemnification that was paid through crop insurance
and other mechanisms.
So with all due respect, if you want the disaster programs
to work, then we have to have the resources to be able to do
what you want us to do, which is to make everybody whole.
The Chairman. And, Mr. Secretary, I appreciate that. In the
great times that we have spent meeting together, I will just
reinforce what I have said before. Work with us on those
issues. I can't control what happened in the past. I couldn't
even control what happened in 2022, but I did have more
opportunity today as Chairman.
So with that, I recognize the Ranking Member for his
questions.
Mr. David Scott of Georgia. Thank you, Chairman Thompson. I
really appreciate that.
Secretary Vilsack, both my Democratic and Republican
colleagues certainly want to pass a bipartisan farm bill. And
the year's extension is giving us more time to work out our
differences, and we are negotiating through those now. But I
know that Chairman Thompson and I feel the same about this. We
definitely want a bipartisan farm bill.
I hear from my nation's farmers quite regularly that they
want and need certainty. They want and they need new markets.
And in that regard, I want to thank you for creating RAPP. And
RAPP means Regional Agriculture Promotion Programs. It helps
our commodities farmers, and certainly, it helps groups like
our soybean farmers and others to be able to navigate the
challenges we are facing today.
And for those of you who may be listening to this hearing
across the nation, Secretary Vilsack, could you share with us
and the nation your thoughts on this, why a bipartisan bill
passed this year is very vital and very important and why it
has got to be done?
Secretary Vilsack. Well, Representative Scott, I think it
is fair to say that every farmer, every rancher, and everyone
who lives in rural America depends in large part on the farm
bill programs. A farm bill is more than that. It is a rural
development bill. It is a conservation bill. It is a nutrition
bill. It is a research bill. It is a trade bill. It is a risk
management bill. It is a broad opportunity to say to rural
America and to American agriculture that we care, that we are
investing in their future, and we are providing stability.
The failure to have a farm bill creates uncertainty, and
that uncertainty makes it very difficult for producers to make
decisions about their operations, to decide whether or not they
are going to diversify their crop, to decide whether or not
they are going to take advantage of new crop insurance. By the
way, we have had 12 new policies and 15 new modifications to
crop insurance just in the last 3 years. Do they take advantage
of those or not?
It is very difficult for land-grant universities, minority-
serving institutions that rely on the direction of the farm
bill and the Research Title to know whether or not they can
move forward with critical research, which obviously will
impact and affect things. It is difficult for those in the
Chamber of Commerce and economic development offices across the
counties to know whether or not they need to plan for new
opportunities. I mean, the bottom line is we have to get it
done.
Mr. David Scott of Georgia. Right. Let me get to another
question which is very important. Mr. Vilsack, I know you
testified to your commitment to getting IRA dollars out the
door so our farmers and rural communities can benefit from
these investments, and I want to applaud you for those efforts
and dedication. But can you give us an update on where things
stand?
Secretary Vilsack. Yes, 99.8 percent of the money that was
set out in the IRA for 2023 was obligated. EQIP, 2,812
landowners received contracts, nearly 8,000 applications. The
easement program, 69 producers received assistance, 250
applications.
Mr. David Scott of Georgia. Yes, my time is getting a bit
short here. Let me also ask you, did you meet your spending
goals last year?
Secretary Vilsack. Absolutely, because the goal was to get
the money out the door.
Mr. David Scott of Georgia. And are you on target to spend
all you have planned for this year?
Secretary Vilsack. Yes, because the demand is there.
Mr. David Scott of Georgia. And are you still hiring more
staff, or has hiring plateaued?
Secretary Vilsack. Because of the money and resources in
the IRA, we are able to continue to increase NRCS, over 1,500
new people working in NRCS. And we have expanded through
technical assistance, cooperative agreements, additional help,
and assistance.
Mr. David Scott of Georgia. Thank you. And I just want to
personally thank you for the great work you have done with me
and many of the Members on this Committee and making sure our
1890s Student Scholarship Program is now permanent, and it
passed in a very strong bipartisan way into the farm bill, and
we are making that scholarship permanent. Hopefully, that
addresses some of the concerns that you expressed about making
sure that we have farmers for generations to come. Thank you.
The Chairman. I thank the gentleman and now recognize the
distinguished gentleman, the Chairman emeritus from Oklahoma,
Mr. Lucas, for 5 minutes.
Mr. Lucas. Which is a polite way of saying the old guy.
Welcome, Mr. Secretary. And kind of in that role, you have
had an outstanding career, too. You have been Secretary, what,
10 of the last 14 years?
Secretary Vilsack. Going on 11.
Mr. Lucas. Going on 11, that is pretty amazing to have been
around that long in what sometimes is a challenging agency
directing policy, so your imprint is in a lot of places. And I
am impressed, and I congratulate you for that. And I know that
every Administration is different. The Obama Administration is
certainly different than the Trump Administration. And in some
ways the Biden Administration is different even than the Obama
or Trump Administrations.
But that said, Mr. Secretary, it has always been clear to
me that the strongest policies that come out of this Committee
and the most important programs administered by USDA are built
on the belief that support and relief programs must be tied to
crop production. When this Committee or your agency stray from
that principle, we begin to walk down an unsustainable and a
very concerning path.
When you last appeared before this Committee, I raised
concerns about your agency's design and implementation of phase
two of the Emergency Relief Program for 2021 crop year and
called for a return to the ERP phase one methodology. You said
that your agency would learn from their experiences during the
first iteration of ERP and would factor it into the
administration of the next. Well, based on the reports that I
am hearing from my producers in Oklahoma, ERP 2022 has proven
to be no better than its predecessor at delivering support to
those who suffered the greatest crop losses.
So my question to you today is exactly where those lessons
your agency learned from the administration of 2021 ERP
program--what were those lessons, and how did it change the
approach in 2022? And while you are thinking about that, as a
follow-up, what did your agency learn from the ERP 2022
rollout? And what are some of the changes that we can expect to
see in future programs administered?
Secretary Vilsack. Well, one change would be for Congress
to give us the resources we asked for. I mean, when you give us
30 percent of what we ask for, when we tell you that that the
damages are $10-$12 billion and you basically appropriate $3
billion, you put us in a tough spot.
Mr. Lucas. But, Mr. Secretary, when you change the program
so that you screw up the delivery and screw up the 30 percent,
it makes it difficult to come back and ask for the other 70.
Secretary Vilsack. It didn't screw up at all. In fact, 82
percent of producers received more assistance and help than
they would have based on what you have articulated.
Mr. Lucas. But my producers back home who actually raise
the food and fiber that feed the country, who put the resources
on the shelf that the Federal credit cards, the SNAP program
benefits buy, tell me the resources are not going to production
where the losses were.
Secretary Vilsack. That is not true. That is not true. In
fact, I will be happy to provide you the specific numbers of
producers in your state that receive benefits in major
commodity production.
Mr. Lucas. But, Mr. Secretary, is the goal to give
resources to address the disasters by following production, or
is the goal to pick out who is actually farming so that those
of a preferred category in the rules benefit more from disaster
relief than others?
Secretary Vilsack. Well, Representative, you can't
basically cherry-pick one program. You have to look at it in
the totality. When you look at all of the resources that your
producers received, including the crop insurance payments, the
majority of which went to the people you are talking about,
which is a very small subset of the producers that we are
talking about.
Mr. Lucas. I know, Mr. Secretary, what my producers are
telling me. Let's change subjects for just a moment. I
understand that there is discussion about USDA's Direct and
Guaranteed Loan Programs so that there has been some discussion
that Congress should for the first time authorize the
conversion of guaranteed loans to direct loans based primarily
on a decision by the Secretary that such loans are distressed.
What would your approach be to ensuring that such conversions
would be, I will say, rare and limited?
Secretary Vilsack. Well, I can assure you that we are going
to--whatever we do with this effort will not jeopardize the
financial stability of our loan portfolio.
Mr. Lucas. But the tradition of this Committee and policy
has been that the guaranteed loans caused financial
institutions to put skin in the game, that there was
potentially a higher standard and a greater degree of potential
success in the programs by going the guaranteed route as
opposed to direct loans. If we simply shift bad direct loans--
sorry, bad guaranteed loans over to direct loans, one, we are
bailing out banks; and two, we are disincentivizing being
cautious and prudent loan officers.
Secretary Vilsack. Well, I think the goal of any effort
would be to try to keep farmers on the land. I think that is
the key here. We are not trying to kick folks off the land. We
want to keep them on the land if at all possible.
Mr. Lucas. But, Mr. Secretary, we should not create
situations where people will not be able to succeed and fail.
That is terrible thing to do to fix.
Secretary Vilsack. Fair enough, but that is not who we are
talking about.
Mr. Lucas. I yield back, Mr. Chairman.
The Chairman. I thank the gentleman.
I now recognize the gentleman from California, Mr. Costa,
for 5 minutes of questioning.
Mr. Costa. Thank you very much, Mr. Chairman, Ranking
Member, and Members of the Committee. Mr. Secretary, it is
always good to have you here.
And clearly, we are focused on the reauthorization of the
farm bill. We do it every 5 years. It equals a reestablishment
of our priorities in terms of ensuring that America's safety
net for the production of food and fiber with farmers,
ranchers, dairymen and -women, and our farmworkers, as well as
those who are food-insecure, benefit from that safety net.
Let me just speak that in California, obviously, the
largest agricultural state where over half the nation's fruits
and nuts and vegetables are produced, 20 percent of the dairy
products, 400 different commodities, this farm bill is critical
and it is important. We must get this done this year.
Investments made, though, in the previous Congress, I
think, are critical to note. The Bipartisan Infrastructure Law
(Pub. L. 117-58), the Inflation Reduction Act are all key
funding methodologies that help America's agriculture economy.
In California, as an example, over $1.15 billion for improved
water storage in the San Joaquin Valley, $500 million to
prepare aging dams and ensure safety, $1 billion for rural
water projects, $56 million for Regional Conservation
Partnership programs.
But I want to talk about specifically, Mr. Secretary, the
importance of these investments. I have heard that the previous
President, who is running again, if reelected wants to impose
ten percent tariffs across the board and 60 percent tariffs on
Chinese goods. Given our importance of exporting agricultural
products, I think this will just go back to resulting in a
trade war. Would you care to comment on this and the pending
impacts?
Secretary Vilsack. Well, I don't think there is any
question that the last time tariffs were assessed and the way
they were assessed, they caused great stress in the
countryside, significant impact on the market. Thirty percent
of our product is sold in exports, and a significant percentage
of that goes to China.
Mr. Costa. Well, and everybody has leverage when you start
a tariff war.
Secretary Vilsack. I am sorry, what?
Mr. Costa. Everybody has leverage when you start a tariff
war.
Secretary Vilsack. Well, absolutely. And that is one of the
reasons why the CCC was drained because you basically----
Mr. Costa. Right, $45 billion under the previous
Administration, I think you have spent $15 billion by
comparison, right?
Secretary Vilsack. That is correct. That is correct.
Mr. Costa. Let me move on to the disaster relief. You
talked about 30 percent and the supplemental appropriations.
What would you like us to do going forward? Because the $2.8
billion or you said $3 billion in disaster aid obviously didn't
cover the disasters in 2023. What recommendation would you make
for the future budget and the reauthorization of the farm bill?
Secretary Vilsack. Two recommendations, one adequately and
fully fund disaster assistance if it is ad hoc. Two----
Mr. Costa. That is the bottom line, isn't it?
Secretary Vilsack. Well, it is a lot of money, but it is
important to----
Mr. Costa. But if you want to provide the disaster relief,
you have to provide the funding?
Secretary Vilsack. That is correct. That is correct. You
have to provide the full money. And then second, I think it is
important to have a conversation about how to create a
structure and system that is less ad hoc and more permanent
from a disaster assistance program. I think, Mr. Chairman, I
think you are interested in doing that, and I think there is
some logic and some reason for that discussion.
Mr. Costa. And the Inflation Reduction Act--and I believe
that those monies have gone for good purposes under the Natural
Resources Conservation Services, as you pointed out, to a
number of programs that, frankly, are oversubscribed. But there
was some talk about taking those funds and putting them for
other purposes. What would the Administration's view be on the
farm reauthorization measure?
Secretary Vilsack. We feel very strongly that you got to
maintain those resources because of the demand and because the
resources that are available to all farms, not to a subset of
our American agriculture. It is important for us to continue to
invest in conservation, and it is very, very evident that the
countryside wants these resources because, as you indicated,
they are significantly oversubscribed.
Mr. Costa. Oftentimes under the USDA, the forestry title
gets, I think, overlooked with climate change and the impacts
of fires throughout the West. The importance of reauthorization
of the farm bill and addressing the hazardous fuels reduction--
and we have a bipartisan bill that would save our sequoias.
What is your focus on how we deal with this challenge that we
have in forests across the country?
Secretary Vilsack. The Congress made a good down payment in
the Bipartisan Infrastructure Law, which is allowing us to
focus on hazardous fuel reduction in the West in particular.
Mr. Costa. But we need to do more?
Secretary Vilsack. It is a down payment. You need to
continue to fund that effort.
Mr. Costa. Okay. My time has expired. There is an issue in
climate-smart partnerships, and I want you to continue to focus
on that. It benefits a lot of individual folks that are
participating in that climate-smart effort. I yield back the
balance of my time.
The Chairman. I thank the gentleman and now recognize Mr.
Austin Scott from Georgia for 5 minutes of questioning.
Mr. Austin Scott of Georgia. Secretary Vilsack, you were
the Secretary in 2010, correct?
Secretary Vilsack. Yes, sir.
Mr. Austin Scott of Georgia. And in 2010, SNAP was
approximately 67 percent of USDA funding, and 33 percent of
USDA funding went to other sources, whether it be farming
commodity production or conservation. Is that correct?
Secretary Vilsack. I don't have those specific numbers, but
I am sure that you do, Congressman, so I will acknowledge----
Mr. Austin Scott of Georgia. Well, thank you. And so, as I
understand it today--and I expect you will have these numbers--
that approximately 80 percent would go to SNAP and
approximately 20 percent would go to all of the other
expenditures of USDA. Is that correct?
Secretary Vilsack. I don't know whether that is correct or
not, Congressman, but I will----
Mr. Austin Scott of Georgia. You are kidding me.
Secretary Vilsack. For the sake of this conversation----
Mr. Austin Scott of Georgia. You are the Secretary of
Agriculture, and you don't know what the pie chart of your
budget looks like?
Secretary Vilsack. I don't know the specific--I know that a
significant percentage of our budget is focused on nutrition
assistance of a multitude of different programs. It is not just
SNAP, it is also WIC, it is the School Lunch Program, it is the
assistance of food----
Mr. Austin Scott of Georgia. I am talking about food and
nutritional programs being 80 percent.
Secretary Vilsack. Okay. Well, that is more than SNAP.
Mr. Austin Scott of Georgia. And food nutritional programs
were included in the 67 percent before.
Secretary Vilsack. Okay.
Mr. Austin Scott of Georgia. Okay. But you understand what
I am getting at?
Secretary Vilsack. Sure. Yes, absolutely.
Mr. Austin Scott of Georgia. So that leaves 20 percent
instead of 33 percent for conservation, production agriculture,
all the other things that the USDA does, just simple math. Less
than ten percent of your total USDA funding now is going to go
to production agriculture. Is that correct?
Secretary Vilsack. Congressman, I don't know if that is
correct or not. What is the point? Just get to your point.
Mr. Austin Scott of Georgia. Well, my question for you is
what percentage of what you receive at the USDA should actually
go to production agriculture? My point is you talk about the
loss of the family farm where starving farmers don't get to
plant the food to feed hungry people.
Secretary Vilsack. Well, the reality is it is not about
planting food. We are doing a great job of that. American
farmers are the best in the world with that. We have seen a
remarkable increase in productivity with inputs basically
maintaining and actually there is wonderful----
Mr. Austin Scott of Georgia. Secretary, let me read
something to you from a----
Secretary Vilsack.--chart today right here that shows the
productivity.
Mr. Austin Scott of Georgia. Well, it is my time, so let me
read this to you from a good, good farmer. This isn't someone
that inherited. This is someone who built their own family
farm. ``This year reminds me a lot of the early 1980s. I had a
bit more optimism in my 20s than in my 60s, making plans on
which piece of land to sell off and get stable for the bumpy
ride for agriculture.''
Secretary Vilsack. We had record income in the last 3
years, Congressman. We had record income. But the problem is--
--
Mr. Austin Scott of Georgia. No, sir, you did not.
Secretary Vilsack.--that the income was concentrated.
Mr. Austin Scott of Georgia. 2021 and 2022 were good, but
2023 was bad. You have glossed over----
Secretary Vilsack. No, it wasn't----
Mr. Austin Scott of Georgia.--the 2023 number.
Secretary Vilsack. No, no. No, no. It was not bad. It was
actually above the historic average. The 3 years total----
Mr. Austin Scott of Georgia. It was a significant fall-
off----
Secretary Vilsack. Best 3 years in 50 years for sure. I
think the best years from a net cash income ever, so----
Mr. Austin Scott of Georgia. Secretary Vilsack, have you
talked talk to any farmers about----
Secretary Vilsack. I have talked to more famers----
Mr. Austin Scott of Georgia.--how much fertilizer costs,
about how much----
Secretary Vilsack.--than you have, sir.
Mr. Austin Scott of Georgia.--diesel costs, about the cost
of land rent because of what you have----
Secretary Vilsack. Net cash farm----
Mr. Austin Scott of Georgia.--done with solar subsidies and
everything else?
Secretary Vilsack.--income, highest ever, highest ever. The
problem is it is concentrated in the hands of the large
operators. And I have nothing against production agriculture
and large operators. We need them. The question is, what are we
doing about the other----
Mr. Austin Scott of Georgia. Secretary Vilsack----
Secretary Vilsack.--the other 93 percent?
Mr. Austin Scott of Georgia. Secretary Vilsack,
approximately 90 percent of the food supply comes from about
ten percent of the farms in this country.
Secretary Vilsack. I don't think that is quite accurate,
but go ahead.
Mr. Austin Scott of Georgia. Well, what would you say was
accurate with it?
Secretary Vilsack. I think it is in the neighborhood of 85
percent or so.
Mr. Austin Scott of Georgia. Eighty-five percent then comes
from ten percent of the farms? That is 85 percent of the food
supply for the American citizens.
Secretary Vilsack. And they----
Mr. Austin Scott of Georgia. Now, your President and your
Vice President don't seem to mind being dependent on foreign
sources of energy, but I can assure you, the American citizens
don't want to be dependent on foreign sources of food.
Secretary Vilsack. Congressman, they are your----
Mr. Austin Scott of Georgia. We don't. And we are
importing----
Secretary Vilsack.--President and Vice President as well.
Mr. Austin Scott of Georgia.--more food than we ever have
in this country.
Secretary Vilsack. We are producing more oil than any other
country in the world. What are you talking about?
Mr. Austin Scott of Georgia. We are importing more food. We
are importing more food----
Secretary Vilsack. Well, you--no, no, no. Nope, nope, nope,
wait a minute. Wait a minute. Let's be----
Mr. Austin Scott of Georgia.--than we ever have in this
country.
Secretary Vilsack. Let's be clear about this. Let's be
clear about what we are importing, okay? The major driver of
the imports: horticulture. Horticulture, okay?
Mr. Austin Scott of Georgia. We are importing more food----
Secretary Vilsack. And we are----
Mr. Austin Scott of Georgia.--than we ever have in the
history of the country.
Secretary Vilsack. We are importing it because we like to
have choice all year long. It is not that we are importing it
because we need it to feed ourselves.
Mr. Austin Scott of Georgia. Secretary Vilsack, you can
justify the actions all----
Secretary Vilsack. But it is true.
Mr. Austin Scott of Georgia.--all you want to.
Secretary Vilsack. It is----
Mr. Austin Scott of Georgia. Have you been to the grocery
store lately?
Secretary Vilsack. Absolutely.
Mr. Austin Scott of Georgia. What does food cost today
versus what it did before the American Rescue Plan and the
Inflation Reduction Act, as you call it?
Secretary Vilsack. Well, the good news is--and I alluded to
it----
Mr. Austin Scott of Georgia. There is no good news there.
Secretary Vilsack. Food inflation is down. Grocery store
price inflation year over year is 1.3 percent, the lowest it
has been since 2021, and ERS predicts that it is going to
decrease this year in 2024.
Mr. Austin Scott of Georgia. If it falls another 25
percent, it will be back where it was before y'all got there.
The Chairman. The gentleman's time has expired.
Now I am pleased to recognize the gentleman from
Massachusetts, Mr. McGovern, for 5 minutes.
Mr. McGovern. Thank you, Mr. Chairman. I don't think it is
a radical idea to want a farm bill that supports small- and
medium-sized farms, that supports conservation. And I don't
think it is a radical idea to insist on a farm bill that
doesn't increase hunger in America.
And let me just say to the gentleman who just spoke, we can
support our farmers and hungry families at the same time. This
is not an either/or situation.
And I am grateful, Mr. Secretary, to you and to Deputy
Under Secretary Dean for all that you have done to improve food
security in this country, especially when it comes to improving
food security for kids over summer months and making school
meals healthier and more accessible, which is good for our kids
and is good for our farmers, and, by the way, will save us a
lot of money in healthcare costs down the road. My Republican
friends complain about the cost of some of these programs. They
don't talk about the savings and avoidable healthcare costs
that result by investing in these nutrition programs. So we can
save money by doing this.
I also want to associate myself with the remarks of the
Ranking Member, Mr. Scott, and his comments on SNAP. The bottom
line is the benefit, let's be honest, is inadequate. And we
want a bipartisan farm bill, but what my Republican friends are
proposing would cut SNAP by $30 billion and then prevent future
increases.
A little bit of a history lesson here, before the pandemic,
SNAP on average was about $1.40 per person per meal. Then the
pandemic came and, Mr. Secretary, you, thankfully, using your
authority that Congress asked you to use, plus some emergency
benefits, it was bumped up to about $2.40 on average per person
per meal. Then some of these emergency benefits expired. And
now it is down to about $2.08 per person per meal.
Everywhere I go, I am told by organizations that deal with
people who are food-insecure, it is not enough, it is not
enough to be able to put healthy food, nutritious food on the
table. And yet my friends here are advocating not only a cut,
but preventing any future updates in terms of increases. It
doesn't make any sense to me.
I would say to my Republican friends that you are barely
hanging on to your majority by your fingernails. Look at the
results of last night's election in New York. Your majority has
been ineffective, and what you are doing and what you are
advocating is highly unpopular. People do not want you to
follow MAGA extremists off a cliff. They want you to focus on
helping struggling families instead to be able to put
nutritious food on the table. They want us to work together on
a farm bill that supports our farmers and supports struggling
families. And yet what we are seeing here is what we have seen
on almost every piece of legislation that has come before this
House, a move to the extreme when it comes to programs that
benefit the most vulnerable.
Now, Mr. Secretary, some on this Committee complained that
you increased SNAP benefits during the pandemic. I don't think
anyone here, I don't think, truly believes that SNAP benefits
should be based on the cost of a food plan that would now be 50
years old. Can you explain why you reevaluated the Thrifty Food
Plan? Did you just decide that on your own, or did Republicans
and Democrats in Congress tell you to do that?
Secretary Vilsack. In the 2018 Farm Bill, the direction
from Congress was that USDA was to consider cost-conscious
healthy diets for families on low- and moderate-income. They
specifically directed us to use the following: current dietary
guidance, consumption patterns, food composition data, and
current food prices. We essentially followed that to the T. We
used the scientific process of calculating the impact and
effect on the Thrifty Food Plan base foundation for SNAP, and
we concluded that it required an increase.
Mr. McGovern. And what would the theoretical impacts be to
holding the Thrifty Food Plan to the cost of the 2021 plan for
another 20, 30, 40 years?
Secretary Vilsack. You would eventually have a food plan
that did not adequately meet the need of families who are
struggling financially.
Mr. McGovern. My friends complain about the cost of
groceries at the supermarket, and yet they are advocating
policies that will make it more difficult for people to be able
to afford those groceries. This doesn't make sense, investing
in these programs--and, again, I applaud you for your
leadership on this. Investing in these nutrition programs are
not only the right thing to do because we should care about
people, all people, not just those with deep pockets, but it
will also save our healthcare system a boatload of money in the
future, also help our farmers. And I thank you for your
leadership, and I yield back my time.
The Chairman. I thank the gentleman from Massachusetts.
Before I recognize Mr. Crawford, I do want to submit for
the record a document that uses CBO scores on exactly what is
being proposed with providing article 1 direction in terms of
completing the Thrifty Food Plan evaluation consistent with how
it has been done the past except for this past time. As CBO's
records, it shows the benefits level. Quite frankly, there is
no intent to cut current benefits. And this talks about if that
proposal would go forward, what the benefits would be in the
future.
Mr. Costa. Well, Mr. Chairman, we should do a whole hearing
on that because we respectfully disagree with your conclusion.
The Chairman. Well, this is CBO's conclusion. I am not
making things up. The facts are the facts. And so I will submit
this, be willing to share this with any Member that would like
to have a personal copy of it as well.
[The information referred to is located on p. 105.]
The Chairman. I am now pleased to recognize the gentleman
from Arkansas, the land of rice and ducks, Mr. Crawford for 5
minutes.
Mr. Crawford. Thank you, Mr. Chairman.
Thank you, Mr. Secretary, for being here. How often do you
interact with the President's Council of Economic Advisers?
Secretary Vilsack. I am sorry, how often?
Mr. Crawford. How often do you interact with that council?
Secretary Vilsack. I actually interacted with the chair
yesterday.
Mr. Crawford. Really?
Secretary Vilsack. Yes.
Mr. Crawford. I would suggest that y'all probably aren't
singing from the same hymnal because you just said that
inflation was on a downward trajectory when in fact the Council
of Economic Advisers just said that grocery stores are actually
causing inflation to increase. And that was a statement as
recently as February 1. In fact, here is an article I am happy
to share with you. Biden Takes Aim at Grocery Chains Over Food
Prices.\1\ So it says here, ``President Biden has begun to
accuse stores of overcharging shoppers as food costs remain a
burden for consumers and a political problem for the
President.'' He coined the phrase--I don't know that he coined
it, but he used the phrase ``shrinkflation'' to describe how
packaging, basically, smaller portions in a bag charging the
same price for is having an impact on prices at the grocery
store as well.
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\1\ Editor's note: the article referred to is located on p. 128.
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So, these accusations and charges and things of this nature
about the evil Republicans just don't hold water. I think
probably you should go revisit the Council of Economic Advisors
and maybe y'all will get on the same page because we are
hearing mixed messages now from you and from the Council of
Economic--there wasn't a question there, Secretary.
Last year, when you testified before the Committee, I asked
you about the adverse effect wage rate. And you mentioned at
the time that your preferred solution for the AEWR was to pass
the Farm Workforce Modernization Act of 2021 (H.R. 1603, 117th
Congress). And we all know that the bill had significant issues
that were unrelated to the adverse effect wage rate that kept
it from becoming law, so I don't think that was necessarily the
answer to the problem.
So since you were here last year, my friend Mr. Davis and
I, who have been leading the Agriculture Labor Working Group,
we have been hearing from everyone, and everyone has talked
about--and when I say everyone, I am talking about stakeholder
groups, ag employers across the country that have come in to
share their concerns. And the prevailing sentiment was that the
adverse effect wage rate continues to be a huge problem. It is
an impediment to the efficient functioning of the H-2A program.
Georgia, for example, has seen a more than 20 percent increase
in the AEWR in the last 2 years, completely unsustainable. So
do you agree that Congress needs to reform AEWR in such a way
as to ensure predictable and sensible wage levels for H-2A
employers?
Secretary Vilsack. I think it makes sense for Congress to--
with their problems with the Farmworker Modernization Act to
fix that and pass it because it would create stability, it
would create a range, it would create predictability in the
system.
Mr. Crawford. Let me ask you this, changing subjects real
quick here. As you know, in many USDA programs, especially in
Rural Development, there are costly and time-consuming
environmental processes that ultimately end in the project
being a categorical exclusion from NEPA. The current system is
a barrier to entry to potential borrowers, lenders, and
grantees to participate in the system, and when they do, they
often spend much time and money to meet paperwork requirements.
All of it keeps funds from being deployed in rural America.
The Department of Energy has already issued rules to make
charging stations and solar projects categorically excluded
within the DOT and the Department of Homeland Security then
adopted for their departments.
My question is what steps is USDA taking to implement the
statutory categorical exclusions listed in the Fiscal
Responsibility Act (Pub. L. 118-5), specifically loan
guarantees? And if no action has been taken yet, when can we
expect actions to be taken by USDA to implement those
provisions?
Secretary Vilsack. We use categorical exclusions on a
regular basis in our programs. When there is an opportunity to
use it, we do use it. I am particularly aware of how often we
use it in the Forest Service in order to move processes along.
Mr. Crawford. Okay.
Secretary Vilsack. Eighty-five percent of the activities
that we have done in our Forest Service the last 3 years use
CE, so we are not opposed to using it. We actually look for
opportunities to use it.
Mr. Crawford. I hope that is true because I have some
constituents that are highly concerned with that.
Let me shift gears again. Hopefully, I can get an answer on
this question. Your comments last month, you said, quote,
``Here is the problem. Reference prices help a subset of
farmers,'' end quote. These comments worry many farmers across
my district, across the country, putting in the hard work of
feeding and clothing the world. And to be clear, when I say
farmers in this context, I mean those who are producing our
food and fiber at scale.
You focused a lot of your attention on climate, but when
you talk about farmers, you often talk about USDA's role in
protecting what I would call more hobby farmers. These are
folks I certainly care about, and I don't believe they should
be completely ignored by USDA programs, but many of them are
not full-time farmers or truly dependent on income from the
farm to keep them financially afloat.
And alone, our country in the world can't be dependent on
their output, which is less than 20 percent of all agricultural
production. You acknowledged that earlier in your statement. So
my time has run out, but I will yield back.
The Chairman. The gentleman's time has expired.
I now recognize the gentlelady from Virginia, Ms.
Spanberger, for 5 minutes.
Ms. Spanberger. Thank you very much, Mr. Chairman. And
thank you, Secretary Vilsack, for being here.
I come from Virginia where our number one private industry
is agriculture. And I had a bit of a visceral reaction when the
gentleman talked about hobby farmers and those who don't make
farming their full-time income because I represent so many of
those farmers. And the reason that farming may not be their
full-time income is because they can't afford to do it. We have
small generational family farms that, frankly, many of the
conservation programs have helped the farmers I represent save
and make more productive.
And I will give a specific example. I was out visiting a
farm in Caroline County, and a farmer said he has 1,000 acres
of cereal rye, and he did a testing. This is last year. And
they found rye roots 7 deep. And that was after 34 days
without rain. He said that cover crop usage and their use of
no-till practices, the cover crop land never gave up an inch.
His soil is rich. His ability to produce on that land is made
possible, according to the farmer, by his usage of conservation
programs that are made possible because of these Federal
programs.
So I am grateful that you are here to speak to a whole
variety of issues. And I am proud that we were able to invest
in conservation programs at USDA through the Inflation
Reduction Act because, in fact, we know that there are so many
more farmers like the one I just mentioned who want to
participate in these programs that lower input costs, increase
their bottom line, and make farming possible in communities
like those that I represent. But so many are turned away
because of lack of funding.
So I am pleased to see that, according to a new USDA report
on funding IRA implementation, Virginia has already received
nearly $8 million in funding that goes directly to farmers
across our Commonwealth who want them to increase their
productivity, improve wildlife habitats, improve air and water
quality, and help farmers stay farmers.
So could you please elaborate on USDA's progress in getting
IRA conservation dollars to farmers and producers? And
specifically, has the law helped these programs reach more
producers?
Secretary Vilsack. Well, clearly, the answer to your
question is yes. It has obviously increased the reach of the
programs. There is still a great deal to do. We have increased
the number of people working at NRCS. We have entered into
cooperative agreements so that we have a broader reach so that
those who might not be able to understand they qualify for the
program are finding out about the program, or assisting in
guiding them into participating.
And let me just simply say that roughly 85 to 88 percent of
farmers in this country today require off-farm income to be
able to keep the farm. So with all due respect, it is not about
hobby farmers. It is about folks who love what they are doing
and, frankly, would like to be able to do more of it, but they
don't have the income streams that support it so they have to
have an off-farm job. And to me, the key here is creating
opportunities for that farm to generate more revenue.
You mentioned cover crops. That is an opportunity,
potentially, for that farm to qualify for ecosystem service
market payments.
Ms. Spanberger. Yes.
Secretary Vilsack. But now instead of just a crop, they are
going to get an environmental payment. There are a multitude of
other strategies here that we are investing in, and
conservation and investments in conservation are critically
important to allowing those income streams to occur.
Ms. Spanberger. And that is what I hear time and time again
from the producers I represent.
So in that vein, how can Congress continue supporting USDA,
whether through statutory flexibility, you mentioned additional
staffing. What else needs to happen to expedite these funds
getting out the door?
Secretary Vilsack. Well, first, a budget that doesn't
require us to cut staff. Second, maintaining the IRA funding,
and----
Ms. Spanberger. And, sir, you said it before, but could you
just remind everyone how much staff do you have to cut because
of the budget challenges?
Secretary Vilsack. Well, the House Agriculture
appropriations talked about an 18 percent cut to our budget, so
you can do the math.
Ms. Spanberger. Yes, thank you. Please continue.
Secretary Vilsack. Maintain the IRA funding. Let's get a
budget, pass a farm bill so there is certainty in terms of the
programs. And, to a certain extent, continue to support our
efforts on the climate-smart because that is also tied to the
conservation activities and programs. We saw tremendous demand
for that and tremendous interest in it.
Ms. Spanberger. And just in closing, related to some of the
challenges at the grocery store, I received a message from a
darling constituent who, speaking of our extraordinary country,
said, I for one still find it amazing that you can buy a
pineapple in January for $1.29 on sale at the grocery store,
truly an incredible country.
Thank you for serving this incredible country.
Mr. Chairman, I yield back.
The Chairman. The gentlelady yields back.
I now recognize Mr. DesJarlais from Tennessee for 5
minutes.
Mr. DesJarlais. Thank you, Mr. Chairman. And, Secretary
Vilsack, thank you for always coming and visiting with us.
With the record influx of illegal crossings at the southern
border, I was wondering what steps you are taking to mitigate
potential strain on the SNAP program.
Secretary Vilsack. Well, people coming across the border
don't qualify for SNAP and aren't participating in SNAP.
Mr. DesJarlais. From the USDA Food Nutrition Service SNAP
policy on non-citizen eligibility, it says non-citizens
eligible with no waiting period, and there is about 13, but I
will just read a few: qualified alien children under 18 years
of age, so anyone under 18 qualifies without a waiting period;
refugees admitted under section 207; victims of trafficking and
trafficking victims under the Act of 2000, and unfortunately,
there is a lot of them; asylees under section 208. And, I mean,
you would have to agree that almost everyone coming into the
country is either seeking refugee status, asylum status, or
under 18, so how can you say that this is not going to put a
strain on the SNAP program?
Secretary Vilsack. Because the fact that they are seeking
asylum doesn't mean that they qualify. They have to be granted
asylum.
Mr. DesJarlais. We have 42 million people on SNAP now. We
have had roughly ten million crossing over, most of them
seeking asylum. That will come due, so as we plan a 5 year farm
bill, we need transparency in order to make sure people are
taken care of.
Secretary Vilsack. [inaudible] go down, sir.
Mr. DesJarlais. There has been a shortfall to go this year
in funding for the SNAP program. There has been fraud that if
you go to social media--you got to love social media. I did it
this morning. I said, what is the fraud rate in the SNAP
program? The very first thing that pops up says 1.5 percent.
Then I go to the past year, and I would like to introduce this
into the record. I would ask unanimous consent. This article
from The Hill in September of 2023, Fraud is gobbling up one-
fifth of SNAP benefits; Congress must act to stop it.\2\ That
1.5 percent is 11.5 percent, ten times more than what we are
led to believe if you read social media.
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\2\ Editor's note: the article referred to is located on p. 132.
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So I am not trying to be confrontational, Mr. Secretary.
And we have had lively discussions in this Committee that
Republicans apparently don't care about people who care about
food hunger. We do. I am just saying that to plan this
effectively, we need to address these issues that are real. You
can say that people don't receive SNAP benefits, but your own
USDA says that they do. And you can say the fraud is low, but
those numbers are not correct, and that was exposed this year.
Secretary Vilsack. No, let's be clear about this. I am
saying that people who are not here legally are not allowed to,
or are, participating in SNAP. I will acknowledge that we have
work to do on fraud, but I will tell you, it is our partners
who have work to do. It is the states who administer these
programs. It is the states that we are encouraging them to get
back to interviewing folks. States are resisting that. I just
recently sent a letter to a number of Governors encouraging
them to do a better job of overseeing this program. So I agree
with you that we need to make sure that we are keeping an eye
on fraudulent activities.
Mr. DesJarlais. I am just afraid hungry Americans are not
going to receive the benefits they need if we don't address
this issue. It is real. I have been imploring different
agencies, including USDA, to get real numbers and transparency.
I hope that some of my letters and questions will be answered.
I kind of want to finish on a more fun note. We have talked
about the walking horse industry in Tennessee before, you and
I, and it is my understanding that there is a proposed rule
that is currently being reviewed by OMB. And, we had hoped that
the PAST Act supporters and the industry could come to
agreement on how to best move forward. But now that is not
really the impact. I am curious. Have you ever been to the
Walking Horse Celebration in Shelbyville?
Secretary Vilsack. I have not been to the----
Mr. DesJarlais. Okay. This summer, Chairman Thompson, and
he just left--Rep. Jonathan Jackson joined John Rose and I at
the stable, and I think it is fair to say--not to put words in
the Chairman's mouth--he was a skeptic, probably a PAST Act-
supporter, maybe Jonathan, too. But they had a really great
experience, and they inspected for themselves. They both rode
walking horses, and the walking horses could handle both of
these guys, and they are pretty big fellas. So I would love to
invite you down, let you go for a ride. It is really smooth. I
think you will smile as big as the Chairman did. And I know
that the celebration will be coming this summer, so I would
like to give you a standing invitation to join us, come look at
it for yourself.
Thoroughbreds were dropping dead on the tracks at all three
major races, at the Preakness, the Belmont, and the Kentucky
Derby. I have never seen a walking horse drop dead. And the
PAST Act is just that. It is living in the past. There was
problems years ago. They have been corrected, and I would love
for you to come and see it and see what a wonderful industry
this is.
I yield back.
The Chairman. The gentleman yields back. And I would have
to say it is a pretty smooth ride actually, a large animal that
was a little intimidating to crawl on, but it was a good ride.
I am now pleased to recognize Ms. Caraveo from Colorado for
5 minutes of questioning.
Ms. Caraveo. Thank you, Chairman Thompson and Ranking
Member Scott, for hosting today's hearing.
In particular, given that it has been, I think, 6 months
since we were in this room, 6 months of delay because of the
dysfunction and Congress' inability to do its very basic jobs,
and that interfering with incredibly important discussions that
producers and consumers and I think all of our districts have
been waiting for us to have in particular around the farm bill.
And so thank you, Mr. Secretary, for being here this morning.
As you know, Congress did make incredible investments in
the Inflation Reduction Act before the 118th to expand clean
energy in rural America. We appreciate your work and your
listening to rural Americans when designing the USDA programs.
I know in Colorado I have heard overwhelming interest in the
IRA rural energy programs, which include REAP, PACE, and the
Empowering Rural America Program, or New ERA. These grant
programs represent jobs and economic growth in my district. And
I was very pleased to see recently projects in Platteville and
Longmont selected for the New ERA program.
Because of the popularity of these programs, the reality is
that they are dramatically oversubscribed, as we have heard
today. New ERA, for example, is four times oversubscribed,
which I believe shows how important this program is to electric
cooperatives across the country, regardless of politics, and
how important it is for our cooperatives to see this kind of
long overdue investment. It is great to see this and to
highlight the excitement of rural co-ops across the country.
So, Mr. Secretary, for New ERA, can you share an update on
how we might see applications start to move forward in the
process?
Secretary Vilsack. We are in the process of completing the
evaluation of approximately 70 projects of the number that was
submitted, as you indicated, it was a very popular program and
oversubscribed, in an effort to try to determine which of these
programs are feasible from a technical standpoint and from a
financial standpoint. Once those evaluations are done, those
projects will be ranked. And then we will basically compare
those rankings to the resources that are available and begin a
more detailed conversation to assert whether or not in fact the
project is worthy of commitment.
I think our goal is to try to get awards sometime later
this year. In the meantime, we are aggressively promoting the
REAP program, over 5,000 REAP grants already awarded. We are
going to see awards on a quarterly basis, and you will see PACE
awards here sometime this spring.
Ms. Caraveo. I really appreciate that update. It is clear
that USDA agencies, staff, and officials have expended a huge
amount of effort and time to get these programs up and running,
and program applicants have spent a lot of time and capital to
write and submit applications. Considering that, could you
estimate the implications and costs for USDA and the applicants
of reopening and amending these programs at this stage where
USDA has already received and begun to review applications?
Secretary Vilsack. Well, I don't think--we are not in a
circumstance, I think, where you reopen unless there is
additional resources that become available. Then, we would be
happy to take a look at what additional projects could
potentially be funded. But we have a limited resource, and we
are working within the constraints of those resources.
Ms. Caraveo. Thank you. I appreciate that.
Switching gears, I would like to join my colleagues in
reiterating the importance of strong nutrition programs at the
USDA. Last week, I had county commissioners here from my
district who shared the steady increase they have seen since
the pandemic that is unprecedented with no sign of slowing
down. In fact, SNAP applications in one of the largest counties
in my district are up 26 percent. They are not down. And so I
think it is very important to remember the implications of
SNAP. And when we talk about, first of all, who gets SNAP, 96
percent of SNAP participants are U.S. citizens, only four
percent are not citizens, and three percent of those are lawful
permanent residents. And, most importantly for me as a
pediatrician, 42 percent of SNAP recipients are children.
Children, like the ones that I saw in clinic every day where
\2/3\ of the kids that I saw did not have enough to eat, and
were it not for SNAP, would not have anything to eat.
So can you quickly expand more on the impact of SNAP on
families and the children that we always purport to care about
in this Congress?
Secretary Vilsack. Well, there is research that indicates
that the SNAP program is one of the most if not the most
effective anti-poverty program that we have. There is also
research to show that when you essentially provide adequate
SNAP benefits, families purchase more nutritious food and have
better health outcomes for their children.
Ms. Caraveo. I thank you for the support that you give to
those children with your work every single day. And thank you
once again for answering those questions. I yield back.
The Chairman. Ms. Caraveo, thank you very much.
I now recognize gentleman from North Carolina, Mr. Rouzer,
for 5 minutes.
Mr. Rouzer. Thank you, Mr. Chairman.
Just a note about large farms versus small farms, it is
only the larger farms that can survive the onslaught of the
government--Federal, state, and local--so the smaller ones go
out of business and the bigger ones get bigger because it is
the only way they can survive. Anyhow, commentary there.
Mr. Secretary, chicken plants across the country have been
operating at higher speeds for more than 25 years through the
FSIS line speed waivers, as you know well. Under President
Clinton, a study allowed 20 poultry plants to operate
evisceration lines up to 175 birds a minute. Plants invested,
therefore, millions in technology, grew their partner farms to
supply the poultry needed, and maintained worker safety and
inspection standards all the same.
Now, these positive pilot results led to the new poultry
inspection system. Today, 47 plants operate under this system.
Farms all across North Carolina have built operations to
support increased capacity, and plants have designed staffing
and facility needs around these speeds. Now, OSHA data from
1994 to 2019, when substantial line speed increases were put in
place, shows illness and injury down 91 percent, evidence that
faster line speeds don't compromise worker safety.
Now, a 2020 proposed rule incentivizes more plants to adopt
these improved processes and new technologies while increasing
speeds but was repealed by this Administration. Instead, your
agency informed companies with line speed waivers that to keep
them they were required to, quote, ``opt in'' to a study on
worker safety being conducted outside of the agency.
Now, I want to point out to the Committee that this was a
sole-source contract and not a competitive bid, and no member
of the study team is from a land-grant institution with
knowledge of the chicken industry, but instead are associates
of the University of California system. Now, a member of that
study team testified in front of OSHA against a company
participating in the study and has vocally critiqued a number
of other plants. Considering the work of other team members and
the information requested before each plant visit that far
exceeds the scope of the study, there is a clear bias against
the industry and leads any objective observer to the conclusion
this is a ``gotcha'' operation.
Mr. Secretary, real quickly, can you submit, and are you
willing to submit in writing, how much is being spent for the
study, the source of that funding, and how the team members
were selected? And why are they all associated with the
University of California?
Secretary Vilsack. Be happy to respond to questions, but I
think it is fair to say that there is litigation that is
essentially driving a lot of this effort. Issues were raised
concerning worker safety as a result of this line speed, and
this is a process of trying to make sure that we get the right
data, the significant data to be able to support whether the
line speeds are, in fact, a result of additional worker injury
or not. If they are not, then obviously, line speeds are going
to continue. If they are, then there is going to have to be
some adjustment. But we just don't have all of the data we
need, and that is the reason why we have entered into an
agreement with the producers. This is not a situation where
they were--they had the choice. They had the choice. And these
plants chose to participate in this study.
Mr. Rouzer. Yes, they chose to participate in the study and
in good faith, and it has turned into something that they
didn't anticipate. Aren't you concerned----
Secretary Vilsack. Well, that is----
Mr. Rouzer.--about a bias study here given the
circumstances?
Secretary Vilsack. I don't think you should prejudge the
study. The study hasn't been concluded yet.
Mr. Rouzer. Well, the old adage----
Secretary Vilsack. Why don't you wait to see what the study
is?
Mr. Rouzer. Pardon me, but the old adage personnel is
policy certainly applies here.
Now, I got to move on quickly to another matter. USDA is
currently developing the next set of Dietary Guidelines, and
this is specific to alcohol. Federal law requires that
scientific and medical knowledge support any changes to the
Dietary Guidelines on the consumption of alcohol. How is the
technical committee process ensuring that this mandate is
followed? Have you been following that?
Secretary Vilsack. I haven't, and it is my understanding
that this is outside of the Dietary Guideline conversation.
Mr. Rouzer. Well, alcohol has always been included in
Dietary Guidelines, but this takes it outside of the scope of
Dietary Guidelines. That is the issue.
Secretary Vilsack. Well, I think that in an effort to try
to make sure that there is a deeper review and dive on this
issue, I suspect, for future Dietary Guidelines.
Mr. Rouzer. Well, I just mention this. There are a lot of
growers around the country that produce a product that is used
for adult beverages that have a great interest in this, and I
would like to follow up with some written questions as well.
I yield back, Mr. Chairman.
The Chairman. The gentleman yields. I am now pleased to
recognize the Congresswoman from Illinois, Ms. Budzinski, for 5
minutes.
Ms. Budzinski. Thank you, Mr. Chairman. And thank you,
Secretary, for joining us here today and engaging with us on a
host of really important issues. I want to just take a moment
to say, again, thank you so much for joining me last summer at
the Farm Progress Show in Decatur, really appreciated you
joining me there for that.
Last fall, as a response to what I had heard from farmers
in my district in central and southern Illinois, I led a letter
with Congresswoman Pingree and Congressman Costa, along with
all the Democrats on the Committee, outlining our shared
priority to protect the Inflation Reduction Act climate-smart
conservation funds. These funds, as you know, have provided a
historic investment into our farms and have already served many
rural farmers in my home State of Illinois.
I was also very excited to see that 100 percent of the
obligated IRA dollars made it into the hands of farmers in
Illinois. And to my colleagues, I would encourage you to
explore the new Inflation Reduction Act data visualization tool
that the USDA put out yesterday to see the difference that the
IRA has made in your home states.
I also want to take a moment to celebrate the release of
the 2022 Ag Census yesterday. Champaign County in the 13th
Congressional District, my district, was a top ten producer of
both corn and soybeans in the United States.
So number one, my question, a central theme of my first
term has been creating opportunity. I had bills to improve land
access, to increase research funding at USDA, and to expand
markets for farmers, all of which I hope will be a part of the
farm bill base text. Secretary Vilsack, can you speak to how
the Inflation Reduction Act funding for climate-smart
conservation has created opportunities for farmers?
Secretary Vilsack. Well, I think the bottom line is I think
farmers understand what they need to do to improve soil health
and water quality, and I think they are deeply interested in
doing more of this, but they need help and assistance. And I
think that is why they responded as they did to the additional
resources of the Inflation Reduction Act, over-subscribing all
of the programs. We saw a tremendous initiative with our
Regional Conservation Partnership Program, which is really
large-scale landscape activity, where we saw over $1 billion of
requests for a limited sum, about $400 million. So the farmers
are responding by saying, ``Give us more, help us do more of
this, we are anxious.'' And we saw the same reaction to the
Climate-Smart Agriculture Partnership Initiative, where we can
create commodities that are utilizing conservation programs,
and the result of that then provides a market opportunity for
them, a value-added market opportunity.
Ms. Budzinski. Thank you. And I just had another question
on EQIP. In 2022, almost three out of every four EQIP
applications, as you know, across the country were denied, and
only about half of all those approved applications got funded.
And so I consistently hear from farmers in my district that
they want better access to these conservation programs. Is
farmer demand meeting or even exceeding expected outlays of IRA
money to bridge this gap?
Secretary Vilsack. It is exceeding the resources that are
available. I think there are two issues here. One is making
sure that you have adequate staff and adequate technical
assistance to help the farmers decide what they need to do. And
then two is making sure the resources are there. And recently,
a third issue has cropped up, which is trying to figure out
ways in which we can speed up the process. And NRCS has
streamlined the process. They have looked at ways in which they
can have pre-approval so that resources can get into the field
more quickly than in the past. So I think it is a combination
of all three of those things to try to meet the need. But if
you take resources away from the IRA, obviously, that is going
to impact and affect our ability to do more work.
Ms. Budzinski. Thank you. Thank you, and I yield back, Mr.
Chairman.
The Chairman. The gentlelady yields back. I now recognize
the gentleman from Mississippi, Mr. Kelly, for 5 minutes.
Mr. Kelly. Thank you, Mr. Chairman.
Mr. Secretary, I first want to say I concur with almost
everything Mr. Rouzer said about the poultry. In 2022, at your
direction, USDA informed poultry companies with line speed
waivers that to continue to reap the benefits of operating at
higher speeds, bringing more chicken to the market during
historic inflation and record-high food prices, they had to opt
in to this Pulse study, a study being conducted by researchers
whose bodies of work evidence significant bias against the
chicken industry. Yet when reading from USDA's Food and Safety
Inspection Service constituent update of July 29, 2022, it
says, ``Establishments with a current line speed waiver must
agree to participate in the study and provide worker safety
data in order to receive a modified waiver.'' That update
directly contradicts the narrative that plants were allowed to
opt into this study on a voluntary basis.
USDA demands that they participate in order to keep their
higher line speeds. A decision would be hard for plants to make
since they placed orders months in advance and would risk
taking a significant amount of supply offline if they went back
down to slower speeds. The companies that have continued with
their waivers have since been subject to researchers in their
plants, who are going far beyond their intended purpose of
determining what threat if any increased line speeds posed to
worker safety.
Mr. Secretary, can you explain why your Department lauded
this waiver participation as voluntary when it clearly is not
voluntary?
Secretary Vilsack. There is litigation, Congressman, and
essentially, in an effort to try to avoid a complete shutdown
by a court order of line speed increases, we basically created
the opportunity for folks to continue to convince the court
that this was a good-faith effort to make a determination
whether or not there were unsafe practices involved. So if we
had done what you are suggesting, essentially, what would have
happened is judges would have shut us down. And this happened
in our pork line speed issue. Judges will enjoin the use of
line speed, and everybody would have had to slow their lines
down. So you tell me. Would you have preferred everybody
slowing their lines down, or would you have preferred creating
an option for people to continue at the line speeds that they
had invested in?
Mr. Kelly. I would prefer to have a researcher that is not
in there to do something opposite of what they are intended to
do.
Secretary Vilsack. Don't assume the outcome of this study
until it occurs.
Mr. Kelly. I would just tell you, I spent a lot of years in
the Army, and when an inspector comes in, they generally find
what they are looking for if they are looking for certain
things, whether it is there or not. And I can just say from
experience that an IG inspection could be either good or bad
depending on the intent of the inspector.
Next question, though, Mr. Secretary, I have heard from
many producers about constant challenges with the H-2A program
regarding regulations and rules issued by the Department of
Labor, one of which was issued almost a year ago requiring
employers to pay varying wage rates to H-2A workers based on
their daily job function. This rule has put the potential to
double wage rates for employers, not to mention at a huge
regulatory burden to try to track the work of every employee
throughout the day through each task that they do. Did the
Department of Labor consult with USDA on this rule?
Secretary Vilsack. We have an ongoing conversation about
rules relating to farm labor, and I think the reason this rule
is structured the way it is, is because there was a general
wage rate being applied to a variety of jobs, some of which
required significant qualification and were much more complex.
And so I think the effort by the Labor Department was to try to
respond to the value of that service.
Mr. Kelly. Yes, but they kind of went overboard here. So
small farms are at a high disadvantage here. I guess we are
trying to put them out of business. You are out there, and you
are picking up potatoes, digging sweet potatoes or loading them
on the truck, and they need you to drive a pickup truck to the
store to pick up a part. And all of a sudden, you get
classified at the rate of a truck driver at $40 an hour instead
of $20 hour. And driving a pickup truck is not driving a big
truck, but they still classify you as a truck driver, and so
you have to be paid that wage for the remainder of the day and
the remainder of time that you work there. You do see where
this could be very confusing and very hard on small operations.
Secretary Vilsack. Well, that is one of the reasons why it
would have been helpful if you all would pass the Farm
Workforce Modernization Act. Then you wouldn't have had to deal
with this.
Mr. Kelly. But we didn't make this rule. But we didn't make
this rule.
Secretary Vilsack. Well, you did in a sense. In a sense,
you made it by not creating the opportunity for a structured,
stable, secure, predictable system.
Mr. Kelly. I would just say, as the Secretary of
Agriculture, it seems to me that anyone with even a layman's
understanding of farming would have flagged how problematic and
how burdensome this rule is to our small operators. And they
literally cannot compete because of over-burdensome
regulations. When you have to track every task that a worker
does every day, we will have more people tracking their tasks
than we do actually doing the work.
And with that, Mr. Chairman, I yield back.
The Chairman. The gentleman yields back. I am now pleased
to recognize the gentlelady from Maine, Congresswoman Pingree,
for 5 minutes.
Ms. Pingree. Thank you very much, Mr. Chairman. Thank you
so much, Mr. Secretary, for being here today. I really
appreciate all the things you have been talking to us about and
your very thoughtful answers. And I, as a Member of the
Appropriations Committee, just want to thank you for reminding
everyone in the room that passing an appropriations bill is
critically important. If we are all going to talk about the
importance of getting a farm bill done, we have to remember
that we need the funding for your agency as well and that the
18 percent cut that was proposed is ludicrous. So I am counting
on my good friend, Mr. Bishop, for fixing all that before we
take it to the floor, but let's just hope we can eventually get
that to the floor.
We have been talking a lot about climate change and
disaster resilience and really what I see now as this extreme
weather that all of us are facing and our farmers are facing.
And you were very kind to come and visit us in Maine last month
right after we had had some horrendous storm in December that
caught our forestry and farming folks off guard and really
impacted our state with the flooding and the high winds. One of
the farmers we showed you some pictures of was Chuck Noyes, a
dairy farmer in Albion, Maine. He lost two buildings and a
roof, and his insurance does not cover rebuilding the barn, and
he is not sure if he is going to get the roof replacement.
But a few days after you visited, we had two more storms
back-to-back that really impacted our coastline, so that was
our working waterfronts and our fishing community, more
significant damage.
And I like to remind people, this wasn't the only bad
weather we have had. We had frost that destroyed our fruit
crops in the spring. We had wet weather in the summer that left
hay that couldn't be harvested or in such poor condition that
our dairy farmers and livestock farmers have to supplement the
diet this winter with increased grain and corn silage. This is
going to continue to impact our farmers.
And I just want to talk a little bit about the tools you
are trying to provide to help farmers to be more resilient. We
all want to make sure there is disaster relief aid, and we
appreciate your request for more of that because it is getting
more and more expensive. But so much of what you are doing is
to try to prevent the disasters that we are facing in terms of
how farmers deal with drought and flooding. And so can you talk
a little bit about what the work you are doing is to help
farmers have more resilient fields and to deal with some of
this adverse weather?
Secretary Vilsack. Well, I would say there are three or
four steps that we are taking. First of all, we continue to
focus some of our research efforts on figuring out exactly what
works and what doesn't work in the field to basically create a
more resilient farming operation and certainly would encourage
continued investment in our research initiatives.
Second, the Climate-Smart Agriculture Commodity Initiative,
141 projects across the United States, all major commodities,
looking at 205 different practices to determine the viability
of those practices in terms of resiliency and sustainability. I
think we are going to learn a lot from that experience. We have
nearly 100 universities, minority-serving institutions involved
and engaged in that effort, and we are now beginning to see a
lot of interest in that.
We have mentioned today a number of times the IRA and the
investments in conservation, whether it is the EQIP or CSP or
from a large-scale landscape basis, the Regional Conservation
Partnership Program. That also is, I think, significant. We are
also using our risk management tools to encourage more cover
crop activity by providing incentives for the use of cover
crop, and this most recent Ag Census indicates that that is
beginning to work as we see an expansion of cover crop
activity. So it is across-the-board efforts to try to make sure
that we are a good partner with farmers, ranchers, and
producers.
Ms. Pingree. Yes, thank you for that. And I do want to say,
I know it comes up often, people criticize your use of the CCC,
Commodity Credit Corporation, and having that flexibility.
Sometimes it is talked about like it is a sacred cow, but I
really appreciate how you are putting it to beneficial use, as
you said, doing the kinds of research and the projects at all
different scales around the country so people really have the
examples of what to do, so thank you for that.
One more specific question on the Organic Market
Development funding, I know you have talked a lot about how you
get farmers extra income, and growing organic produce or
organic food for the market is often that. I am really pleased
to see that the USDA is providing ten Organic Market
Development grants to address gaps in the organic market like
processing, transporting, and consumer markets. Can you tell us
a little bit about the demand for the program, where the
funding for the program is coming from, and how we can support
more of that organic market work?
Secretary Vilsack. There are, I think, two initiatives. The
American Rescue Plan Act of 2021 (Pub. L. 117-2) provided
resources for us to establish an Organic Marketing Assistance
Program. The application period for that program is still
available I think through October of this year. There has been
quite a bit of interest in that to assist farmers in terms of
offsetting the cost of marketing.
And then, as you indicated, we really wanted to take a look
at trying to right size if you will the supply and demand of
organic opportunities across the country. And so we have
awarded a number of entities resources to be able to tell us,
how do we create demand? How do we make sure that the demand is
being created where the supply is? Or conversely, how do we
create the supply where we already have demand so that we
basically right size?
We have also created a transition program, making it easier
for people who want to become organic producers to be able to
do so with mentoring, with assistance on conservation costs
associated with the transition, and with some risk management
opportunities as well. So it is a combination.
Ms. Pingree. Thank you. I have gone over my time. Those are
great answers. And I appreciate the Chairman indulging that
extra minute. Thank you so much, Mr. Secretary.
The Chairman. I thank the gentlelady. I now recognize the
gentleman from Nebraska, Mr. Bacon, for 5 minutes.
Mr. Bacon. Thank you, Mr. Chairman, and welcome here to Mr.
Secretary. I appreciate you being here today.
I have two questions. One is cybersecurity, and then a
follow-up on trade. A first on cybersecurity. There was a
recent article published in the Joint Force Quarterly kind of
weaponizing wheat. It was written by an Air Force Lieutenant
Colonel Scheuerman, and he assesses the security status of
America's food supply, and his findings are disturbing.
So, Mr. Chairman, I would like to submit that for the
record, this article.
The Chairman. Without objection.
[The article referred to is located on p. 134.]
Mr. Bacon. In the article, Lieutenant Colonel Karl
Scheuerman identifies agricultural cybersecurity as one of the
most pressing threats to our agriculture. Russia is a top cyber
adversary known for targeting cloud infrastructure, for
example. We have had cyber attacks on industry leaders like
JBS, who are seeing state-sponsored attacks that have caused
real-world effects targeting critical infrastructure like grain
storage facilities.
So, Mr. Secretary, I have been working on a bill for a
couple of years called the American Agriculture Security Act of
2024. It establishes research centers at our American land-
grant institutions across the nation with a purpose of
researching physical and biological cyber threats to American
agriculture. These centers would be structured and operated
like the UARCs that we see used by the DOD, and they have shown
a lot of promise with our military.
So, Mr. Secretary, what is your take? Would this move us in
the right direction for helping provide better cybersecurity?
Or what else can we be doing to protect our farmers?
Secretary Vilsack. Well, Representative, it will if it is
adequately funded. It is not enough to set up a center unless
you have the resources behind it. But I think you are right to
put a spotlight on this. And certainly land-grant universities
are already doing some of this, perhaps not as in coordinated
fashion as they need to.
At USDA, we are really focused on making sure that the
private-sector is hardening their assets, hardening their IT
against these kinds of attacks? Obviously, you mentioned JBS.
When something like that happens, our role and responsibility
is to evaluate the impact on the market of a disruption, a
significant disruption, which we did in that case, and to
convene the industry to remind them of the importance of
investing in protection. There is an interagency effort in this
Administration to sort of focus on cybersecurity and on AI in
particular and taking a look at the entirety of our portfolio
from food safety to SNAP bias to market manipulation to trade
policy. It is all-encompassing.
Mr. Bacon. Now, our DOD runs something similar with the
UARCs, and it has been very successful. You are right; they
have to be funded.
My second question is on trade. If I had to provide the
number one feedback or maybe criticism of the Administration
that I hear from Nebraska producers--and I believe would be in
your home state as well in Iowa--is we don't hear much from the
Administration on trade. In fact, I very seldom hear the
President discussing trade at all. And just like Iowa, Nebraska
is very dependent on beef, pork, corn, wheat, sorghum exports.
So could you tell us, what is the Administration doing, and,
hopefully clearing up the misperception if anything?
Secretary Vilsack. Sure. Well, first of all, it was
mentioned by Representative Scott the establishment of the
Regional Ag Promotion Program, nearly $1 billion being invested
at the request of Senator Stabenow and Senator Boozman, a
bipartisan request to invest in trade. Focusing on
diversification of our market opportunity, we are over-reliant
on our top four markets from an ag perspective, and so we want
to put resources to increase our presence, our promotions, and
our partnerships in a number of countries, particularly in
Southeast Asia, number one.
Number two, I think the focus people have on when they
define trade, they talk about it in terms of trade agreements.
I mean, the reality is you don't have trade promotion
authority, so it is very difficult to imagine a trade agreement
being negotiated when the people we are negotiating with
realize that there are 535 folks who can negotiate again. So
without trade promotion authority, that is an issue.
So in the meantime, we are working on trying to reduce
barriers. And I can tell you that roughly $21 billion of trade
opportunities have been created or maintained as a result of
wins looking at reducing trade barriers. The UK and wood
pellets and biomass; Canada and the clean fuel regulation;
Mexico and potato access; Japan, beef quota, higher-blend
ethanol availability; India, preservation of apples, expanded
cherry access; the Philippines, expanded access to pork; China,
almonds and almond hulls recently; Argentina, apples and pears;
Israel, processed meat and eggs. There are a whole series of
things that have occurred over the last 3 years. The cumulative
impact and effect of them is either to protect or to expand
trade opportunities.
So that is what we are up to. We are expanding trade
missions and considering reverse trade missions where we bring
people from other countries here in the U.S. So it is a
combination of many things that don't necessarily get
headlines, but are particularly effective in terms of trade.
Mr. Bacon. Thank you. As you know, the Iowa farmers and
Nebraska farmers, we like to feed the world. Thank you. I yield
back.
The Chairman. I thank the gentleman from Nebraska. I am now
pleased to recognize the gentlelady from Washington State,
Congresswoman Gluesenkamp Perez.
Ms. Perez. Thank you, Mr. Chairman. And thank you, Mr.
Secretary, for being here.
We actually just had Under Secretary Torres Small visit our
district. And to Representative Bacon's point, we actually had
a really productive conversation around trade and foreign
access to our apple growers.
So our state, Washington State, particularly on the west
side, is dominated by much smaller producers. Right now, we
only have 5,700 farms. Their average size is about 158 acres,
so much smaller. We are losing a lot of our small- and medium-
sized producers, as you might be familiar with. And, at the
same time, I am seeing really troubling reports that, on
average, the American consumer, about 40 percent of the fresh
fruits and vegetables they consume are from overseas or from
our trade partners here. So this together paints a really
troubling picture that our smaller producers are really in
trouble and getting squeezed out of the market.
And I want to make sure that we have a farm system that
allows the small- and medium-sized farms to thrive. They
shouldn't have to depend on agritourism or value-added
propositions like a solar farm to survive in my view. These are
really important ventures on their own merits, but they
shouldn't be necessary for farmers that want to continue and
pass on their farm to the next generation.
So I am asking just what are your thoughts on this? What is
the USDA currently doing to support the stability and viability
of these small- and medium-sized producers, and how can
Congress be a better partner in this work?
Secretary Vilsack. Congresswoman, I would be happy to come
to your office and give you a rather extensive discussion about
what we are doing. Climate-Smart Agriculture Commodity
Initiative, helping smaller-sized producers get a value-added
proposition; having farmers qualify for ecosystem service
markets, and when they do the right conservation and there is a
conservation benefit and a greenhouse gas reduction or carbon
being sequestered, they are getting paid for it; the use of the
Renewable Energy for America Program to reduce the cost of
electricity and maybe even producing excess electricity, which
could be combined with their neighbors to provide a transition
for the rural electric cooperative, creating a new energy
commodity; expanded access to processing, local processing,
over 400 projects invested by USDA in the last 3 years;
focusing on local and regional food purchasing agreements. We
have provided your secretary, your commissioner, your director
of agriculture in Washington with millions of dollars,
encouraging them to have direct connection and contracts with
local producers, small producers to be able to provide those
fruits and vegetables for schools and for the food banks, using
our procurement dollars as well for that purpose. Reducing
fertilizer costs with investing in new fertilizer capacity in
the U.S.
So there is a broad array of strategies, and the goal here
is to create new income streams so it is not just the commodity
that they are selling that they have to survive on because the
reality is they also have an off-farm job. That is how they are
surviving. The question is, do we have to have the farmer have
the off-farm job, or can we figure out the way the farm can
have three or four different sources of income simultaneously?
I would be more than happy to show you the investments that we
have made, the extent particularly as a state, in Washington
specifically.
Ms. Perez. Yes, we are very excited about some new growth
in processing in particular, so thank you for the support
there.
I wanted to change gears just a little bit and talk about
another really important issue for my district, NAAQS, so
effectively addressing the wildfire crisis, it requires forest
management activities, including removing trees and other low-
value material. Timber sales, working in conjunction with other
tools like prescribed burns, habitat restoration and
reforestation where appropriate will ensure that we can have
safe and resilient forests while growing rural economies.
Last week, the EPA updated PM2.5 NAAQS rule,
which will significantly tighten air quality standards. I am
concerned about the impact this new rule will have on our
forest product industry and our ability to conduct prescribed
burns. When I burn the bacon, it is probably reaching air
quality standards that might trigger in my house. And so we
lost 731 acres in the Gifford Pinchot, and I want to make sure
that we are utilizing every tool at our disposal.
Could you speak to how USDA and EPA are working together to
promote the use of prescribed fire? And generally, how can we
be better partners when tackling the wildfire crisis?
Secretary Vilsack. We entered into an MOU with the EPA to
avoid a restriction on the use of prescribed fire as it relates
to that particular regulation. So that was a result of
negotiations and recently concluded in a signed MOU. Also, we
have our Wildfire Crisis Strategy where we are investing
resources from the infrastructure law in the IRA into more
hazardous fuel reduction. And finally, we are creating market
opportunities for that wood by developing cross-laminated
timber projects and by focusing on wood innovation.
Ms. Perez. Thank you, Secretary. I yield back.
The Chairman. I thank the gentlelady. I now recognize the
gentleman from South Dakota, Mr. Johnson, for 5 minutes of
questioning.
Mr. Johnson. Thanks, Mr. Chairman. Thanks, Mr. Secretary,
for being here. You and I have had productive conversations in
the past about the fact that managed forests are healthy
forests, and unmanaged forests are tinderboxes. Unfortunately,
I think for a lot of different reasons, we have seen the volume
of timber sales decrease. The last information I saw was that
80 different units had failed to meet their harvest targets in
the last 5 years.
And, the Black Hills National Forest, this is important to
us. We were proud to host the first Federal timber sale in
1899. We have been dealing with these issues for a long time.
What can we do together to better provide these forests the
treatment that they need?
Secretary Vilsack. Well, I think there are two issues here.
One is the forest itself, and I think our Wildfire Crisis
Strategy is directly designed to increase activity where it
needs to be increased in order to reduce the risk of
catastrophic fire, and so continuing to invest in that system
is important. You provided a down payment with your Bipartisan
Infrastructure Law. That is going to take us through a couple
of years, but, as you know, this is going to take a decade or
more of commitment. So that is number one.
Number two is making sure that we also have activities for
our mills. I know that that has been an issue particularly in
the Black Forest area, which is why we are literally
transporting wood from the western states to that mill in South
Dakota so that it maintains viability. We are continuing to do
that.
Mr. Johnson. And I do want to give you kudos for that, Mr.
Secretary. When I had first heard the concept, the idea that
there would be timber from elsewhere brought in, I thought
there is no way the bureaucracy is going to make that happen.
And the fact that it has happened, I think, is a testament to
you and your team. I think Chris French and others have done a
good job of telling me that you all want to get these things
done, these things meaning more timber sales, more treatments
so we can have healthier forests. I think there are still
just--it seems like there are a lot of holdups. It feels like
there is some bureaucracy maybe further down the food chain,
and so I am going to continue to look forward to working with
you and your team to do what we can to maybe hit more of the
center of the target.
I also want to talk a little bit about high-path. I mean,
obviously, this country has got a lot of great poultry
producers. And in South Dakota, we have a lot of turkeys, we
have a lot of pheasants. We have seen, as a country, 81 million
dead birds as a result of high-path. I mean, I think it is a
terrible situation, just devastating the industry and
devastating to these growers that, as of right now, are the
only real solution when we have an outbreak is a total depop.
Talk to us a little bit, Mr. Secretary, about are we getting
closer to developing a vaccine solution that would not unduly
harm trade so that we can have some alternative to total depop?
Secretary Vilsack. Representative, you have asked a pretty
tricky question there by adding that trade piece because there
is clearly a distinction between if you are a broiler and the
broiler industry, that is a concern. If you are in the turkey
industry or the egg-laying industry, you are in a different
place.
Here is where we are with vaccines. I would say we are
probably 18 months or so away from being able to identify a
vaccine that would be effective for this particular HPAI that
we are dealing with now. The problem, of course, is it mutates,
and so you have to basically create ultimately a vaccine that
is available for all strains, right? So there is that issue.
The second issue is how do you deliver the vaccine? Do you
deliver it in a way that is efficient and effective and less
expensive or is an injection required? Well, when you are
talking about hundreds of thousands of birds, that is
difficult, so we are trying to develop that process for
distributing the vaccine.
Then the other issue is whether or not you can get to a
point where, by vaccinating, you can distinguish between a bird
that has been vaccinated versus a bird that is actually sick,
and we are working on that. So we have work to do. There is a
commitment to get it done. There is a commitment to begin the
conversation on the trade side, to begin asking our trading
partners, how do you feel about this, what are your concerns
about it, so that we eventually, sometime down the road, get to
a point where I think you want us to be. But it is going to
take--it is very complex, and it is going to take some time.
Mr. Johnson. So you are talking 12 to 18 months?
Secretary Vilsack. Twelve to 18 months just to get the
vaccine for this particular type, not that is true for every
type. We still have work to be done on how to actually
administer it, and we are nowhere near being able to do it from
a standpoint of the impact of trade. We would have a
circumstance where, if we vaccinated today, I think we would
have a number of our trading partners saying we are not
interested in your chickens.
Mr. Johnson. Thanks, Mr. Chairman. I yield back.
The Chairman. The gentleman yields back. I am now pleased
to recognize Ms. Adams from North Carolina for 5 minutes of
questions.
Ms. Adams. Thank you, Mr. Chairman, and thank you as well
to the Ranking Member.
Good morning, Secretary Vilsack.
Secretary Vilsack. Good morning.
Ms. Adams. Thank you for coming back to testify. I do
appreciate the opportunity to speak with you. I appreciate the
range of issues that you have raised today, and I want to
follow up on them again, equity in USDA and in agriculture,
USDA's purchasing power, addressing competition, and
distributing resources to distressed and disadvantaged farmers
via the IRA.
But I especially appreciate you naming food insecurity as
an issue because I want to address something that we have been
hearing in and around this Committee as we approach a farm
bill. Recent pay-for proposals have suggested that requiring
the Thrifty Food Plan be held cost-neutral in future
evaluations would save something like $30 billion over a 10
year projection. These proposals have been accompanied by a
talking point that that says not a single recipient of SNAP
will lose benefits. I worry that that is not true. Pulling cuts
from future benefits and calling them savings, concluding that
there will be no cuts I think it is just disingenuous.
The Thrifty Food Plan is the backbone of SNAP as it helps
to determine the amount of dollars that our neighbors who are
enrolled in the program get each month as they face the harsh
reality of inflation in the grocery checkout. In my district,
participants in my Adams Hunger Initiative, who represent over
30,000 people on SNAP, celebrated the long-overdue reevaluation
of the Thrifty Food Plan in 2021 and they fear any threats to
keeping Thrifty up to date in perpetuity could spell trouble.
I understand that during previous Thrifty Food Plan
revaluations, an administrative decision was made to hold them
cost-neutral. And so the consequences of this decision resulted
in absurd assumptions about how low-income families would have
to stretch their food budgets. For example, prior to 2021, the
Thrifty Food Plan assumed a weekly diet of a family of four
would include 12 pounds of potatoes, 25 pounds of milk, 20
pounds of orange juice, 5 pounds of fresh oranges, and I don't
think any of us could reasonably eat a diet consisting
substantially of potatoes, milk, oranges for long periods of
time, let alone get our children to do that.
So my question is how would holding future Thrifty Food
Plan revaluations cost-neutral impact the ability of the
Thrifty and therefore SNAP benefits to be based on a realistic
food plan? And could it undermine our ability to improve the
diet of SNAP participants by making it more and more difficult
for them to afford more expensive, but critical foods like
fruits and vegetables?
Secretary Vilsack. The only data point I have,
Congresswoman, is the fact that when we basically looked at the
Thrifty Food Plan based on what actually is happening for
American families at the grocery store, based on data that was
specific, that was based on the scanner activities and
information, what we saw was that we were under-funding, if you
will, the foundation of the SNAP program to the tune of 20+
percent. So I think the challenge and the problem is if you try
to maintain a steady course, you are essentially going to
transition away from looking at what is happening at that
particular time in grocery stores. And over time, you are going
to create a benefit that will not adequately support the
families that need the help.
Ms. Adams. Okay. Well, thank you, sir. So switching gears a
little bit, I am pleased to see the ongoing commitment to the
1890 and 1994 land-grant universities included in your work on
NextGen and your letters to Governors with Secretary Cardona
about land-grant funding, because, for too long, these
institutions have been under-funded. So can you discuss briefly
how you would ensure that 1890s are being brought to the table
in conversations about future research, education, and
extension priorities?
Secretary Vilsack. We have taken a look at ways in which we
can incorporate historic black colleges, universities, and for
that matter, all minority-serving institutions and many of our
programs. They have taken full advantage of the Climate-Smart
Commodity Partnership Initiative. You mentioned the NextGen
program. Our Scholars Program is at record levels of
participation. We have increased research. We have established
more Centers of Excellence at HBCUs. Most recently, the
precision nutrition effort at Southern University, we are
looking at the possibility of establishing a veterinarian
school at the Eastern Shore of Maryland. And so there are, I
think, a lot of exciting opportunities for us to continue
investing. We obviously need a budget, and we need a farm bill
to be able to continue to do that.
Ms. Adams. Great. Well, thank you very much. As a proud
HBCU graduate 1890, 40 year professor at an HBCU, I appreciate
all of your support. Thank you very much.
Mr. Chairman, I yield back.
The Chairman. The gentlelady yields back. I now recognize
the gentleman from Iowa, Mr. Feenstra, for 5 minutes of
questioning.
Mr. Feenstra. Thank you, Mr. Chairman, and thank you,
Secretary Vilsack, for being here. You and I have a lot of
commonalities, obviously, you being our Governor for many
years. And so I just want to talk about what is happening in
Iowa a little bit, what I am hearing. I was in Buena Vista
County, talked to the 250 pork producers on Friday evening. And
I am hearing this all over. And you noted it. The first
question that was talked about from our Chairman was Prop 12.
And my question is, what are you hearing from our trading
partners like Canada and other trading partners? Is the USDA
concerned about trade disputes through USMCA? Is this going to
be a big issue because of Prop 12?
Secretary Vilsack. Congressman, it has been raised in our
conversations with the Canadian Minister. They want to have
some clarity and some indication of kind of how we are
responding to this. Obviously, we are in the relatively early
phases of all of this. I will tell you that we are looking at
ways in which we can help and assist the pork industry. We know
it is under a lot of stress, as you do.
Mr. Feenstra. Yes.
Secretary Vilsack. We recently purchased roughly $100
million of pork products in our feeding programs using the CCC
and section 32. The good news is we have seen a significant
increase in pork exports.
Mr. Feenstra. Yes.
Secretary Vilsack. But there is obviously a lot of work
still to do to try to help and assist them.
Mr. Feenstra. Yes.
Secretary Vilsack. I think we are going to go through a
bumpy period here where farmers have to basically make a
decision about whether they are going to participate in that
market or whether they are going to be more localized. I think
that is one of the reasons why we focused on building a local
and regional food system so that you have an option, that you
don't necessarily have to participate in a national system----
Mr. Feenstra. Right.
Secretary Vilsack.--that you actually have the opportunity
to sell directly to your school, sell directly to an
institutional purchaser like a university or a college. You
have many of them in your district.
Mr. Feenstra. Yes. Yes. And that is exactly right. I just
want it on the forefront that this Prop 12 and we have to do
our work, right in Congress. We have to pass something to
preempt it.
And you hit on something with trade. I mean, trade to me
is--when you start looking at our corn commodity and we are
growing so much extra corn, obviously, that goes to ethanol,
but that gets hurt by trade. We have a lot of pork going to
Mexico and stuff. And yet, I look at the Administration and say
we haven't had any new free trade agreements in the last 3
years. I mean, where do you see--I mean, how can USDA help on
the free trade agreements, and how can we expand export
markets? Because to me, we are doing amazing things growing the
product, but we don't have places for it to go. And that being
said, there is a lot of competition. We are seeing a lot of our
competitors claiming some of the export markets that we used to
have.
Secretary Vilsack. Well, I would say a couple of things.
First of all, one of the reasons why the competition is steeper
is because folks in the past, in our competition, invested more
fully and completely in their infrastructure and allowed them
to essentially squeeze the difference and the gap that we once
had. Fortunately for us, we have the Bipartisan Infrastructure
Law that is going to allow us to reclaim that competitive edge,
number one.
Number two, the reality is I have a hard time understanding
the focus on trade agreements when I am pretty confident--and
maybe I am wrong about this--but do you believe that you can
pass trade promotion authority in this Congress? You haven't
been able to pass a budget. You haven't gotten a farm bill
through. Can you pass trade promotion authority? And if you
can't, why not? And I think the reason why not is because
people have an attitude about trade that requires us to rebuild
people's trust in trade. Farmers understand it. They absolutely
understand it, not the rest of the country.
Mr. Feenstra. No, and it is a huge deal. I just looked at--
I was in the UK. They are doing individual trade agreements on
ag with Kansas and other states and stuff like that. I just
wish our Federal Government was a little more engaged,
Katherine Tai, we have talked about and stuff like that, and--
--
Secretary Vilsack. We are engaged. But it is not just trade
agreements. It is breaking down barriers.
Mr. Feenstra. Yes.
Secretary Vilsack. And I mentioned this earlier. A lot of
trade wins have occurred, don't get the headlines, but they
have occurred. We have $21 billion of trade wins in the last 3
years.
The other issue is China. And let's be honest about this. I
spoke to the co-op entity yesterday, and I asked them to
identify their number one customer, and then I asked this
question. If you started criticizing your number one customer
how long would you be able to have that number one customer?
Mr. Feenstra. Right. Good point. Hey, I got one more
question for you. When we think of high-path, African Swine
Fever, and foot-and-mouth, obviously, going back to hogs--I got
17 seconds left--do you feel confident that we are prepared? I
mean, this is----
Secretary Vilsack. I do.
Mr. Feenstra. Okay.
Secretary Vilsack. I do. I do. I do because we have good
people assuring it doesn't get into the country, and we have
good people who are doing the research and the vaccine and all
of that.
Mr. Feenstra. Okay.
Secretary Vilsack. So, we are going to have it in
Manhattan, Kansas at our NBAF, and I am confident.
Mr. Feenstra. Good. Thank you.
The Chairman. The gentleman's time has expired. I now
recognize the gentlelady from Texas, Congresswoman Crockett,
for 5 minutes of questioning.
Ms. Crockett. Thank you, Mr. Chairman. And thank you, Mr.
Secretary, for your time.
There are a lot of things that you have been asked today,
and you clearly have a lot on your plate, so I am going to
stick to one subject matter that is crucial to all families
that House Democrats are committed to upholding in this farm
bill, nutrition. At the USDA, you award billions of dollars
annually to support the nutritional needs of Americans from all
walks of life. I especially want to commend your repeated
commitment across USDA leadership to supporting nutrition
programs that serve all Americans regardless of their
circumstances. But with so much on your plate, there are some
things that can fall through the cracks. In particular, I am
referring to GusNIP and produce prescription programs. These
programs provide critical assistance to Americans that need to
stretch their SNAP dollars further and those that face medical
complications from poor nutrition.
But in each of these programs, not all fruits and
vegetables are treated the same. Under current USDA policy,
fresh fruits and vegetables receive more favorable
consideration than frozen despite the best science showing no
nutritional difference. I am concerned by this because we know
that frozen is often better for folk who most need nutrition
assistance because it keeps for longer and provides more
variety. Now, I have no issue with fresh, so don't get me
wrong, but if we want these programs to be accessible and be
accessible for as many people as possible, we should have
parity between fresh and frozen.
That is why I introduced the bipartisan SHOPP Act (H.R.
3127) with Congressman Alford, which now has 22 House
cosponsors and four supporters in the Senate. And if I recall
correctly, when Congressman Rose asked you about the lack of
parity on fresh and frozen in these programs last year, you
said you would get back to us.
So my question, Mr. Secretary, is whether you will commit
to increasing equity in these programs by evaluating
establishing parity between fresh and frozen fruits and
vegetables in GusNIP and the Produce Prescription Program?
Secretary Vilsack. Congresswoman, I am happy to commit to
encouraging those who use our nutrition programs to consider
and to participate in fruit and vegetable consumption. I would
be more than happy to talk to you about what parity means and
how it would act and react in terms of our Prescription Produce
Program, for example, where we are working with pediatricians
and physicians, how it would work with our GusNIP program where
we essentially provide resources, how it would work at farmers'
markets where it probably wouldn't because it is mostly fresh
fruit and vegetable. There isn't any frozen vegetables
available, so when you promote a farmers' market, are you
suggesting we not promote the farmers' market because it
doesn't have frozen?
Ms. Crockett. No, what I would say is that I have a
district where 20 percent of my district live at or below
poverty. And because of that, my district probably in a
disproportionate way is in more need of access to fruits and
vegetables. But what we typically see is in underserved
communities they don't necessarily have the big grocers, so I
don't--I have so many food deserts in my district. And so what
happens is they don't necessarily always have grocery stores,
and if they do have grocery stores, those grocery stores don't
necessarily have fresh fruits and veggies. So if it is a matter
of I can use my SNAP benefits so that I can get fresh broccoli,
but the only place that I can go to maybe is the convenience
store that is down the street and the convenience store has
frozen broccoli, why is it that I can't go to the convenience
store? What is going to happen is I am now put into a situation
where I now have to go to an area in which they have fresh
fruits and veggies instead of being able to use----
Secretary Vilsack. I am more than happy to work with you on
that issue. That is a slightly different issue and has slightly
different responses. One is basically taking a look at what
convenience stores have to offer in order to be able to qualify
for the SNAP program. The other aspect of this is how we might
be able to use the Healthy Food Financing Initiative that
supports corner stores, creating broader access to healthier
foods, how we might be able to work together to make sure that
frozen vegetables are part of what they are able to provide.
Ms. Crockett. And I thank you for that. I use that as just
a general example, but overall, even if it is another grocery
store, I would want people to be able to choose frozen because
some of those grocery stores don't necessarily have, I would
say, the most appetizing fresh food sometimes.
But I am going to move on to another issue that is
specifically super important to Texas, and that is the Summer
EBT program. For whatever reason, my home State of Texas is
having some problems standing that up, and I would like if you
could update me on what other states are refusing to feed
children during the summertime.
Secretary Vilsack. There are 14 states, and we will get you
a list. Nebraska just recently decided to come into the
program, so 14 states.
Ms. Crockett. Thank you.
The Chairman. The gentlelady yields back. I am now pleased
to recognize the gentleman from Kansas, Mr. Mann, for 5 minutes
of questioning.
Mr. Mann. Thank you, Mr. Chairman. And, Secretary, thank
you for being here this morning.
As you know, I represent the big first district in Kansas,
the number one beef, sorghum, and wheat-producing district in
the country. As the Subcommittee Chairman for the Livestock,
Dairy, and Poultry Subcommittee here, I am concerned with
several proposed rules that would impose nonsensical and costly
regulations on ag producers in my district and across the
country, from USDA's Packers and Stockyards rules, which extend
well beyond the bounds of Congressional intent and ignore legal
precedent, to the new USDA Food Safety Inspection Service's
Salmonella regulatory framework, which has left the industry
scrambling for answers. My view is the Federal Government
should either support producers or get out of their way. I look
forward to working with my colleagues to craft and maintain
sound, comprehensive livestock policy that honors the work of
every link of the animal agriculture supply chain.
Mr. Secretary, first question, on January 24 APHIS sent a
final rule out to OMB that would require electronic
identification ear tags for animal disease traceability and as
a requisite for official interstate movement of certain cattle
and bison. And I understand the goals here. I guess my question
is what are USDA's plans for mitigating the cost to producers
and other entities like sale barns to comply with the rule?
Secretary Vilsack. Well, this is really, I think, an
investment to support and preserve market opportunities because
if we have a problem and we can't trace it back quickly, it
destroys the entire market. So I would think that this is a
relatively small cost associated with this. And the reality is
if Congress wants to provide us the resources to provide
reimbursement, more than happy to do that. But this is a very
important, I think, market-protective measure to ensure that we
can respond quickly to an outbreak, whatever it might be, to be
able to isolate, quarantine, and prevent an entire market
destruction.
Mr. Mann. Yes, and I agree. We just got to think through
how does that impact our producers on the ground?
Second question, as we work to prevent animal disease
outbreaks here at home, we also have to protect the U.S. food
supply against introduction of diseases from our trading
partners. The USDA recently issued a final rule allowing for
the importation of beef from Paraguay, despite Paraguay's long
history of foot-and-mouth disease. Does Paraguay, in your view,
have the necessary means to fund its foot-and-mouth disease
mitigation measures, and how will USDA ensure there is no lapse
in safety mitigation measures in Paraguay?
Secretary Vilsack. We spent 8 years looking at this issue.
I have a lot of faith and confidence in the people that work
for APHIS. There have been multiple audits of their system. We
are convinced that their system is equivalent in terms of their
ability to detect, their ability to quarantine, their ability
to respond quickly. We also have put a series of conditions on
the importation. The beef can't come from a facility that has
ever, ever had any FMD. It can't come from a region that has
had FMD last year. It is inspected both before and after
slaughter. So we are confident that we have a system that that
will ensure protection. And I think I have to have confidence
in the APHIS folks when they tell me after 8 years of study
they are equivalent.
Mr. Mann. Okay. Last question is likely, I am sure you know
the EPA recently proposed a rule that would impact the effluent
limitation guidelines and standards for meat and poultry
processing facilities. By EPA's own estimates, this rule could
potentially close between 16 and 53 meat, poultry, and
rendering facilities. Meanwhile, USDA has spent hundreds of
millions of dollars to expand meat and poultry processing
capacity. Did the EPA consult with USDA on the impacts of this
rule prior to its publication, and how do you plan to engage
with the EPA on this moving forward?
Secretary Vilsack. We provided information and data in an
effort to try to bolster the least restrictive option. There
are three options, as you know, that they have proposed. We
provided information in an effort to try to bolster the least
restrictive option that they have identified.
Mr. Mann. Yes, big picture, it is frustrating for me, and
taxpayers when we are spending all this money to try to improve
capacity and enhance capacity, which we should. At the same
time, the EPA is putting on regulations. I understand that it
is the EPA and not the USDA. We are pushing on the door on one
side and pulling on it on the other.
Last question with the last 30 seconds, one thing I am
really passionate about is our Food for Peace program and the
notion of using American-grown commodities to feed hungry
people around the world. Can you speak to the importance of
using U.S.-grown commodities in our international food aid
programs, which is obviously also authorized in the farm bill?
Secretary Vilsack. Well, it is a critical component of the
McGovern-Dole. It is a critical component of Food for Progress.
It is a critical component of the Bill Emerson Trust if we get
it replenished. So it is obviously a very significant tool that
we have to try to address global food insecurity.
Mr. Mann. Yes, I agree. Thank you, Mr. Chairman. I yield
back.
The Chairman. The gentleman yields back. I now recognize
the gentleman from California, Mr. Carbajal, for 5 minutes of
questioning.
Mr. Carbajal. Thank you, Mr. Chairman. And thank you,
Secretary Vilsack, for being here.
If anybody knows the Federal Government and the USDA and
even Congress, it is you, and so I really appreciate your
wisdom and your leadership in the capacity that you are in.
I also understand why you are so smart. You have a former
staffer of mine that you hired, Erin Sandlin, so I definitely
know you are in good hands.
Secretary Vilsack, I represent what many people call
Paradise on Earth, the Central Coast of California, where
agriculture is the number one industry. When I meet with the
growers and producers in my district, they consistently bring
up labor shortages. I believe we agree that finally getting the
bipartisan Farm Workforce Modernization Act enacted into law is
essential and that there are also additional tools that would
help farmers with their labor challenges, including many that
are within USDA's purview. How can we support producers through
the farm bill to address labor shortages? And could investments
in research like mechanization or future workforce development
be helpful?
Secretary Vilsack. Well, I think a lot of producers are
looking at robotics in an effort to try to make their systems
more efficient. I think in the meantime, we have started at
USDA a Farm Labor Stabilization Initiative, a pilot. We took
$65 million from the American Rescue Plan, we put it on the
table, and we asked producers of all sizes, large and small,
what would they do with this resource to recruit and retain a
workforce from the Northern Triangle countries and Mexico? We
were actually impressed with the reaction and response to this.
We got applications from entities that wanted just a couple of
workers to entities that wanted hundreds of workers. And each
and every single one of them, we also gave them options of a
very basic program or sort of a silver and gold program where
the working conditions, the wage levels, and so forth would be
significantly higher. I expected that the base program would be
the more popular program in terms of application. It turns out
that, no, people were more interested in the silver and gold
programs. We had far more applications in that space. So it is
important, I think, for us to take a look at what we learned
from that experience and maybe that can help inform policy in
the future.
Mr. Carbajal. Thank you. Mr. Secretary, climate change
continues to be an issue for farmers and growers throughout the
country. As you may recall, last year at this time, atmospheric
storms hit the Central Coast of California, leaving an
estimated $2.4 billion in damages and crop loss. Once again,
the Central Coast was hit with storms earlier this month. What
disaster reforms can Congress do in this upcoming farm bill to
help protect producers against climate change?
Secretary Vilsack. Well, I think there are a couple things.
I think, obviously, we are going to learn a lot from the
Climate-Smart Agricultural Commodity Initiative in terms of
strategies, conservation programs that farmers can use to make
their farms more resilient and so would encourage learning from
that experience and also preserving the IRA resources,
conservation resources.
I think the Chairman is right in his concern about disaster
and trying to get away from the ad hoc programs that we have
had in the past. Sometimes, they are adequately funded, and
sometimes, they are not. To have a more permanent disaster
assistance program would provide some predictability and
stability in that area and I would certainly look forward to
working with everyone to try to figure out what that looks
like.
In addition, I think it is important for us to look at crop
insurance. I think it continues to be a very important
mechanism. We have seen an expansion, a significant expansion
of the number of policies, the number of commodities that are
now covered by crop insurance that weren't a couple of years
ago, modifications to the programs, ways in which the risk
management tool can be used to encourage the kinds of actions
and steps on the farm that create greater resilience, so I
think there are a combination of things that we need to
probably look at.
Mr. Carbajal. Thank you. I will just say that crop
insurance needs to also make sure that it grows in the areas of
specialty crops, which oftentimes are left behind.
Secretary Vilsack. And that is where we have seen
significant expansion recently.
Mr. Carbajal. Thank you. As you mentioned in your testimony
that food insecurity remains more common in rural areas than in
the suburban areas. Can you address the misconception that SNAP
is a program predominantly used in cities, and elaborate how
SNAP supports rural communities and combats food insecurity in
those regions?
Secretary Vilsack. Well, there is no question that poverty
is not concentrated in one part of the country. There are many,
many remote areas and rural areas of very significant and deep
poverty. In fact, the persistently poor counties, the majority
of persistently poor counties, counties that have experienced
more than 20 percent of poverty over decades, are located in
rural communities. And so there are a series of programs--I see
the time is up, but there are a series of programs that we have
identified, trying to address those issues.
Mr. Carbajal. Thank you, Secretary Vilsack. Mr. Chairman, I
yield back.
The Chairman. The gentleman's time has expired. I now
recognize the gentlelady from Illinois, Mrs. Miller, for 5
minutes of questioning.
Mrs. Miller of Illinois. Secretary Vilsack, I am sure you
have seen by now countries all over Europe are facing protests
from farmers because left-wing governments are trying to
destroy the ag industry to advance the climate change agenda.
These farmers are tired of top-down policies intended to
appease the left's climate cult, which make it harder for them
to farm and feed the world.
The Biden Administration has taken similar steps to push
this radical climate scam. From reentering the Paris Climate
Agreement to the EPA trying to make it harder for farmers to
use pesticides to Biden's attack on American fossil fuels, this
Administration's policies threaten our farmers. The agriculture
industry needs the ability to access affordable diesel,
nitrogen, fertilizer, and pesticides. President Biden puts that
ability in jeopardy. In a report published last week by the
Buckeye Institute, they estimate Biden's climate policies will
increase farm costs by approximately 34 percent and increase
grocery prices drastically for Americans.
To make matters worse, Mr. Secretary, you traveled to the
U.N. Climate Change Conference and told attendees that the USDA
wants to quantify and track carbon sequestration and greenhouse
gas emissions of farmers. Mr. Secretary, are you aware of the
report from the Buckeye Institute estimating Biden's climate
policies will increase farm costs by 34 percent and thus
increase grocery prices?
Secretary Vilsack. I am not aware of that study, but I am
aware of the reaction of the farm community to our Climate-
Smart Commodity Partnership Initiative, which is fundamentally
different than what is happening in Europe. It is fundamentally
different.
Mrs. Miller of Illinois. Sir, I can tell you----
Secretary Vilsack. It is voluntary----
Mrs. Miller of Illinois.--I am actually a farmer in
Illinois.
Secretary Vilsack. It is----
Mrs. Miller of Illinois. I can tell you the majority of
farmers are not on board with this climate cult agenda.
Secretary Vilsack. We had 1,000----
Mrs. Miller of Illinois. And that the Biden Administration
is wildly incentivizing these policies, and I can tell you, if
all things were equal, farmers would rather plant corn than put
a solar panel on the best farm ground in the world.
Secretary Vilsack. That is not what this is, ma'am. That is
not what this is, Congresswoman. This----
Mrs. Miller of Illinois. So, sir, John Kerry said we can't
get to net zero. We don't get this job done unless agriculture
is front and center as part of the solution. Do you agree with
John Kerry that we have to get farmers to net zero?
Secretary Vilsack. I agree that that is an opportunity for
farmers to make more money and for small- and mid-sized
producers to actually stay on the farm.
Mrs. Miller of Illinois. Okay. This is a disaster for
farmers when you are incentivizing them to put----
Secretary Vilsack. Farmers want this.
Mrs. Miller of Illinois.--solar panels on the best farm
ground in the world.
Secretary Vilsack. Well----
Mrs. Miller of Illinois. What is this going to do to our
ability to feed people? Not only that, those solar panels do
nothing but help our adversary China. And going by the climate
cult's own practices, China is using coal to produce these
solar panels. And we don't have a reclamation plan. And not
only that, it is messing up--when farmers are in competition or
have to rent their land and you have people that are getting
subsidies from the government making three times as much as a
farmer makes, of course, you have some farmers that are signing
up. The profit margin is so narrow on farms, you are forcing
farmers into this. Look what is happening in Europe. And what I
want to know is who is standing up for the farmers? Who is
advocating for the farmers? Have you ever discussed agriculture
or climate policy with John Kerry?
Secretary Vilsack. Well, of course I have, and I have also
discussed it with farmers. We had----
Mrs. Miller of Illinois. Oh, what was your discussion
with----
Secretary Vilsack. Well, let me answer the----
Mrs. Miller of Illinois.--John Kerry, sir?
Secretary Vilsack. Ma'am, I am happy----
Mrs. Miller of Illinois. I would like to know what you
discussed with John Kerry.
Secretary Vilsack. I am happy----
Mrs. Miller of Illinois. Because you are advocating for the
farmers. We need you to advocate for farmers----
Secretary Vilsack. I am.
Mrs. Miller of Illinois.--and for the people that have to
turn around and buy the food at inflated prices if these
radical policies are put in place.
Secretary Vilsack. Our program is voluntary. It is
incentive-based. It is market-driven. It is precisely what the
Food and Agriculture Alliance, which is made up of----
Mrs. Miller of Illinois. Okay.
Secretary Vilsack.--80 large organizations, Farm Bureau,
National Farmers Union, every major commodity group has
requested----
Mrs. Miller of Illinois. In Europe----
Secretary Vilsack.--destruction of----
Mrs. Miller of Illinois.--the rug has been----
Secretary Vilsack. This is not Europe.
Mrs. Miller of Illinois.--pulled out on the farmers----
Secretary Vilsack. Ma'am, this is not Europe.
Mrs. Miller of Illinois.--because they----
Secretary Vilsack. This is not Europe. This is completely--
--
Mrs. Miller of Illinois. Okay.
Secretary Vilsack.--different than Europe.
Mrs. Miller of Illinois. No one is on the side of American
farmers but----
Secretary Vilsack. You need to----
Mrs. Miller of Illinois.--this Committee.
Secretary Vilsack. You need to learn about this.
Mrs. Miller of Illinois. The Biden Administration has done
everything in their power to attack the family farm. We are not
going to let you jeopardize our nation's food supply for the
climate change agenda.
Secretary Vilsack. That is not true. That is not true. We
are doing what farmers have asked us to do. You need to sort of
study up on this because it is not in Europe. It is not--it
is----
Mrs. Miller of Illinois. Sir, I am a farmer.
Secretary Vilsack.--completely opposite of Europe.
Mrs. Miller of Illinois. The farmers want policies, okay.
Thank you, and I yield back.
The Chairman. The gentlelady's time has expired. I now
recognize the gentleman from Georgia, Mr. Bishop, for 5 minutes
of questioning.
Mr. Bishop. Thank you very much, Mr. Chairman.
Mr. Secretary, as you know, fuel and energy expenses are
still at historic highs, and producers in Georgia's 2nd
District are concerned with how the farm safety net will
perform now that commodity prices are falling while input costs
remain elevated. But 700 small businesses and ag producers have
found relief through USDA's Rural Energy for America Program,
the REAP program, just last year alone. These energy efficiency
improvements and renewable energy investments are helping
farmers and business owners across rural America lower their
energy costs. Can you talk about the impact of this program on
operating margins for our farmers and our ranchers, and what
about small business owners in rural areas like those in
Georgia's 2nd Congressional district?
The second question has to do with rural development, one
of my top priorities, so thank you for highlighting the
investments in water and sewer infrastructure in your
testimony. You also recognize USDA's Emergency Rural Health
Care grants as a program that is vitally helping more
communities maintain access to healthcare with over 800 grants
reaching more than 22 million people. Can you tell us what the
Administration has learned and what trends you have seen
related to both infrastructure and in healthcare and what
suggestions or lessons you can share with Congress from the
Emergency Rural Health Care grants that we can implement moving
forward?
Finally, Mr. Secretary, you identified the impact of
potential cuts in our annual appropriations. If we are not able
to enact 4 year bills for Fiscal Year 2024 at the levels in the
Bipartisan Budget Agreement, we could be looking at
sequestration or a full-year continuing resolution. With such a
tough environment, can you tell us what is at stake, the impact
of sequestration to mothers and children who rely on USDA food
assistance, to our farmers and our ranchers across the country,
to our producers who rely on technical assistance from
extension agencies, from NRCS, and to those who have housing or
business loans with the USDA? And what about the impact of a
full-year continuing resolution?
Secretary Vilsack. I will try to respond to all three of
those questions.
On the REAP program, we have had over 5,000 grants awarded.
Many of these grants not only reduce the cost to a producer or
to a small business, but they also, for producers, create an
income source. What is interesting about this is--so a Rhode
Island producer who has basically invested in a renewable
energy program where he is selling excess energy on the grid,
so it not only reduces his cost, but also creates a new income
source. We want to obviously see more of that. And again, it is
voluntary. People can apply for it if they wish, and we are
excited about the opportunity to see more grants in the future.
On healthcare, listen, this is about basically continuing
to invest in our Community Facilities Program and our
telemedicine program, our ability to basically help and assist
small communities equip or build hospital complexes and/or
provide services, levels of services through telemedicine.
These are two very popular programs. The emergency care program
was funded through the pandemic assistance. To the extent that
you wanted that to continue, that would require an additional
appropriation. But in the meantime, at the very least, continue
to fund the Community Facilities Program because that is a
tremendously flexible opportunity.
On the budget, yes, I understand--I am getting the budget--
I think I am doing a pretty good job here actually. On the
budget, look if you cut the budget, you have less services, you
have less people. It is really that simple. You didn't expect
me to be that quick.
Mr. Bishop. What is the impact of a full-year continuing
resolution or for sequestration?
Secretary Vilsack. Well, the problem with the continuing
resolution, I mean, it is essentially the same because you are
not going to get--if you get a continuing resolution based on
the debt ceiling deal, you are going to see a reduction in the
overall budget, and so therefore, you are going to see a
reduction in services and a reduction in people. I mean, it is
just that simple.
We are operating right now--historically, we have received
less of the nondiscretionary defense spending than many of the
other agencies, so whenever we receive a reduction or a
flatline budget, it really stresses things.
Mr. Bishop. The backlog on SNAP applications in Georgia,
the state is failing to meet the application processing
timeline requirements. Can you commit to working with us to try
to give states more flexibility such as eliminating the face-
to-face interview to clear the backlog and making backlogs more
transparent to the applicants so that they know that they may
have to wait months in order to get the benefit?
Secretary Vilsack. With respect, that is not the answer.
The answer is not to sacrifice integrity of the program. Those
face-to-face interviews are very important. It is for Georgia
to use the resources they have available to have the staff
adequately to run the program, and that is what we have asked
Governor Kemp to do.
Mr. Bishop. Thank you, Mr. Secretary.
The Chairman. The gentleman's time has expired. I now
recognize the gentleman from Alabama, Congressman Moore, for 5
minutes.
Mr. Moore. Thank you, Chairman Thompson and Secretary
Vilsack. Good to see you again. I would like to first thank you
for being here today and for the work that the Department of
Agriculture does for our farmers, ranchers, and foresters
across America.
As I am sure you know, farm programs and safety net
programs are important to Alabama agriculture. Improvements to
our nation's farm policy and ensuring timely farm bill
reauthorization is certainly a top priority of mine and the
producers that I represent in lower Alabama. Much like my
colleagues here today and you as well, I look forward to seeing
a timely farm bill authorization, increasing reference prices,
and sharing programmatic integrity for SNAP and other Federal
assistance programs and promoting wood product industries are
top priorities for me in the reauthorization process and the
livelihood of those I represent.
Wiregrass producers in western Alabama are struggling to
stay whole after a serious drought in recent months. Peanut
producers are feeling a pinch of slimmer-than-ever margins and
are only met with resistance by our Democratic counterparts
when any suggestion is made to adjust Title I to meet the needs
of modern-day production. It is disappointing that these
producers do not feel supported by the current Administration
we have in place and who would rather play favorites with ERP,
grab every tax dollar they can for SNAP, and pander to radical
social environmental justice agendas. It seems the agency is
putting politics before policy, and quite frankly, our farmers,
ranchers, foresters in rural communities certainly deserve
better.
The first question I have is Executive action at the
Environmental Protection Agency, General Services
Administration, Department of the Interior have recently been
announced which are adverse or do not consider the work of your
agency and its constituents. Secretary Vilsack, how are you
making a good-faith attempt to give agriculture a voice across
this Executive Branch?
Secretary Vilsack. Well, I have an ongoing relationship
with the Secretaries of each one of those departments, and we
are in constant communication about policies and issues that
they are adopting that may have an impact on agriculture, and
we provide input. I am certainly not going to be in a position
to tell them what they should do in their department. I don't
want them telling me what I should do in my department. But we
do provide input. We do provide data. We do provide the
consequences of what they are considering on American
agriculture. That is our job. And then once a decision is made
by another department, to the extent that we can, we use the
resources of USDA to try to mitigate the consequences of that.
Mr. Moore. I have heard the most terrifying words are, ``We
are from the government, and we are here to help.'' And when I
listen to you, as the Department head of Agriculture, the USDA,
it seems like you are battling the Department of Labor for
production of food or you are battling maybe the EPA to get
them off the backs of local producers. And so would that be
true, Mr. Vilsack, that probably the most terrifying words that
you ever hear is, ``We are from the government, and we are here
to help?''
Secretary Vilsack. Let me say something about that. Yes,
you know what, and I think government does help. When the
farmers--the crop insurance programs, the disaster assistance
programs, the ARC, the PLC, the wide variety of programs that
you are discussing in the farm bill, that is government
helping. I think that the challenge is we want to make sure the
government is helping and is efficient in the way that are
helping.
Mr. Moore. And to your defense, I think you are trying to
do the job. Sometimes, I don't agree with the policies that are
implemented, and I certainly am not a big friend of some of the
environmental stuff that is going on. But it seems like to me
that your own government is your biggest issue sometime in
trying to actually help the producers in America. And, I
appreciate you being in the fight for us. I hope you will
continue that. I am sure you will. But for me it--more so when
I listen to you talk about the Department of Labor, these
regulations that you have to try to jump through these hoops so
we can have food on the tables of American consumers, to me, I
almost start to understand that the battle you are in is the
same battle we are in many days here is how to stop the
bureaucracy and take care of the people.
And so let me do one more question here, sir. I got one
question. I am running out of time. So this past June, the
Department announced SNAP's error rate, a rate that measured
overpayments and underpayments. This announcement included an
overpayment rate of 9.54 percent, which amounts to roughly $30
million a day. Certainly, that would be an insult, Mr. Vilsack,
to our taxpayers. What concrete, serious, and forward-thinking
steps are on the horizon?
Secretary Vilsack. States basically administer the program.
We are working with state Governors to make sure that they
understand they need to get back to a more disciplined effort
in terms of SNAP. We sort of relaxed the flexibilities or
created flexibilities during the pandemic, and we are now
asking them to go back to the ordinary work of administering
SNAP, which involves, to Representative Bishop's question,
face-to-face interviews, which I think will be helpful to
restore integrity in the program. So we are encouraging
Governors. And Governors, if they fail to respond, there are
sanctions that can essentially be put in place. We are
concerned about this, and we should be.
Mr. Moore. Yes, we should. Thank you, Mr. Secretary. Mr.
Chairman, I will yield back.
The Chairman. The gentleman yields back. I am now pleased
to recognize the gentleman from Florida, Mr. Soto, for 5
minutes of questioning.
Mr. Soto. Thank you, Mr. Chairman. And thank you,
Secretary, for being here today. I know it has been a long
morning, and your thoughtful and candid answers to an onslaught
of questions just reminds us that American agriculture is in
good hands with your leadership.
I visited ranchers, growers, and farmers across central
Florida, as well as food banks and food pantries, and they
spoke with one voice, which is can you please pass a farm bill?
We have talked about how food inflation has dropped in half and
continues to go down, but there is more work that we need to
do. Is it your opinion that if we pass the farm bill, that
would help in continuing to lower food costs in the nation?
Secretary Vilsack. Yes, unless it involves restricting the
utilization of the Commodity Credit Corporation. That is a tool
that we use to help food banks deal with the increased need
that is out there.
Mr. Soto. So we need to continue to support programs like
that, and we will continue to see food prices decline for the
American consumer?
Secretary Vilsack. Correct.
Mr. Soto. In Florida, we have hurricanes that have only
gotten worse over the years with climate change. Hurricane Ian
recently led to over $1 billion in agricultural losses. We have
passed out of this House a bipartisan disaster block grant
authority. This is the top priority for Florida Farm Bureau. Do
you think this would help going forward--I know the Senate
didn't pass it yet--especially to help both the ranchers and
particularly citrus as we face these increasing storms?
Secretary Vilsack. We will be happy to administer it if it
gets passed. Right now, we don't have the authority to do that.
I know Florida is anxious to have it. If that is the wish of
Congress, we will certainly follow it and do whatever we can to
make sure it is administered properly.
Mr. Soto. And, Mr. Secretary, we want to give you that
authority.
Also representing cattle country, I just wanted to stress
the importance of continuing to invest in the National Vaccine
Bank. That has come up several times for several different
types of livestock. We have the largest herd in the nation in
Deseret Ranch in our area, along with many other ranches and
cow-calf operations, so that is really important.
I have also visited places like Second Harvest in central
Florida, our food bank that had to spend $2.5 million last year
to fill the TEFAP gap. How critical to feeding America's
families is The Emergency Food Assistance Program?
Secretary Vilsack. Well, it is essential. It is an
essential tool that, when demand goes up or there is a regional
tragedy that occurs, it is an opportunity for us to be able to
respond quickly, to provide the resources for those food banks
to meet the need. So it is critically important.
Mr. Soto. Well, I have seen both seniors, children, the
disabled, our veterans coming to these food banks to get
healthy, nutritious food, and the TEFAP program has been
absolutely critical for us.
In addition, we are, after many years, finally turning the
corner in Florida citrus. I appreciate your dedication over the
years both under the Obama Administration, now under the Biden
Administration to work with us on this research and development
funding. We are seeing great advancements with new herbicides
and pesticides that are helping out with new trees, especially
injection. So I wanted to thank you for the waiver that you all
provided to allow these areas to go forward.
How critical is it for us to continue to make sure we have
U.S.-grown citrus, whether it is orange juice from Florida or
eating fruit from California and other areas, to protect
America's vitamin C source?
Secretary Vilsack. Well, I think it is connected to the
health and welfare of Americans and specifically American
children. We are trying to encourage more fruits and vegetable
consumption and, obviously, to the extent that we do so, it
would be nice if we can provide them something that is produced
here in the U.S.
Mr. Soto. Well, we are going to try to dig deep to get this
done.
The last thing I want to talk about is in my family's
native island of Puerto Rico, along with many other
Territories, they are under the NAP program, trying to move
them to the SNAP program. First, Mr. Chairman, I would like to
introduce a bipartisan letter from Representative Jenniffer
Gonzalez-Colon and myself, just talking about the needs of the
NAP program.
The Chairman. Without objection.
[The letter referred to is located on p. 172.]
Mr. Soto. Thank you. There has been some debate about
whether there needs to be legislation or just funding to
convert NAP to SNAP. Do you happen to have any opinion on that
or any advice on how we proceed going forward?
Secretary Vilsack. Well, I think there is legislation that
is required, but I think, more importantly, is making sure that
Puerto Rico in particular is prepared for that transition. It
is not a simple process to administer the SNAP program, and we
have been working with officials in Puerto Rico to get them to
a point where they are ready, willing, and able to administer
the program effectively so their folks won't fall through the
cracks.
Mr. Soto. Well, we are absolutely thrilled by that. In
central Florida, one in four of my constituents are fellow
Puerto Ricans. We care deeply about what is happening on the
island, as well as supporting our local growers, ranchers in
cattle, citrus, blueberry, and strawberry country and making
sure no central Florida family goes hungry. So I appreciate
your leadership, Mr. Secretary, and thanks for being here.
Secretary Vilsack. Thank you.
The Chairman. The gentleman yields back. I am now pleased
to recognize gentleman from Minnesota, Mr. Finstad, for 5
minutes of questioning.
Mr. Finstad. Thank you, Chairman Thompson, and thank you,
Secretary Vilsack, for being here today and for your testimony.
I am a proud fourth-generation farmer of southern
Minnesota, excited to be raising the fifth, and just really
proud of the fact that I am part of a very honorable profession
that really is called to feed and fuel the world and to help
support our communities, families, and really the country as a
whole.
Recently, your department released several concerning
reports related to the current state of the farm economy. As
you know, USDA's most recent projections found that the United
States will experience an ag trade deficit of over $30.5
billion this year. Last week, USDA's--your Economic Research
Services forecast that in 2024 net farm income will drop by
almost $40 billion. This is after close to a $30 billion
decline in 2023.
You should already be aware of who was leading the USDA the
last time the farm income fell 2 years in a row. As a matter of
fact, you oversaw 4 consecutive years of decreased farm income
from 2012 to 2016. That is quite the resume. As I meet with
producers across the 21 counties I represent in southern
Minnesota, they are worried about a repeat performance with
multiple years of decreased income. Yet today, you have
downplayed farm income falling by 27 percent. Maybe you can
stand to lose 27 percent of your income, Mr. Secretary, but the
farmers I represent cannot.
My producers are dealing with compounding effects of
increased input costs, interest rates, supply chain challenges,
and burdensome regulations, creating a highly leveraged
financial environment in farm country. The hypocrisy of this
Administration knows no bounds, and a prime example is your
shifting positions on the ideal farm size in less than a
decade.
Every one of us that is not a farmer is not a farmer
because we have farmers. We delegate the responsibility of
feeding our families to a relatively small percentage of this
country. If you look at 85 percent of what is grown in this
country, it is raised by 200 to 300,000 people. That is less
than \1/10\ of 1 percent of America. Those are your words from
a 2016 Congressional hearing, Mr. Secretary. Yet in your
testimony today you coldly dismiss these same family farms, who
are the backbone of their rural communities as they work every
day to feed and fuel the world.
In the last 8 years, you seem to have forgotten that the
small number of producers you now demonize are responsible for
80 percent of the production. All Americans and Members of
Congress should want to help small producers. I just think you
don't have much appreciation for the operations that provide a
majority of the food in this country with tight margins and
greater risk.
Farmers have continued to produce more with less by
adopting innovation and increasing efficiencies, not because
the government tells us to do it, but to remain competitive, to
take care of our land, and to pass our farms down to the next
generation.
As farmers do every day for planning purposes, I did some
back-of-the-napkin math. Effective reference prices are $4.01
for corn, $9.26 for soybeans. December corn is $4.67 and
November soybeans are $11.62. If we look at the break-even, it
is about $5.10 for corn, $12 for soybeans. It doesn't take a
mathematician to figure out reference prices as they stand
today are really irrelevant. If crop prices were to fall to the
level needed to trigger these reference prices and the safety
net, farmers would be facing bankruptcy. So due to that fact,
crop insurance is the number one risk management tool we have
for farmers to succeed from working with their lender to making
marketing decisions that really help us plan for farming of the
future.
Moreover, FSA loan-size limitations have not kept up with
rising prices of farmland and these farm inputs. The current
cap makes it more difficult for farmers, especially beginning
farmers, to access FSA guaranteed loans for land purchases and
operating expenses.
Mr. Chairman, I would like to submit into the record an
October 2023 study prepared by Texas A&M examining farm policy
and its impact on farm families.
The Chairman. Without objection.
[The report referred to is located on p. 154.]
Mr. Finstad. Mr. Secretary, you closed your testimony today
by saying we can continue on the path that this Administration
has taken that leads us to an even better and stronger rural
America. I don't know about you, but if collapsing farm
incomes, worsening trade deficits, increased regulatory burdens
are your version of a better and stronger rural America, I
think most farmers, including myself, would like to find a
different path and, quite frankly, we call it hogwash.
I will proudly stand up for farmers against the so-called
leadership at USDA and across the Biden Administration looking
to tear them down. Farm and food security is national security,
and good farm policy isn't written by D.C. bureaucrats for D.C.
bureaucrats. It is written by farmers in rural America for
farmers in rural America.
So, Mr. Secretary, actions speak louder than words, and
your track record speaks for itself.
Mr. Chairman, I have no questions, and I yield back.
The Chairman. The gentleman yields back. I now recognize
the gentleman from New Mexico, Mr. Vasquez, for 5 minutes of
questioning.
Mr. Vasquez. Thank you so much, Mr. Chairman.
Secretary Vilsack, thank you for being here today and for
your testimony. Thank you for what you and the Department do
for our farmers, our farmworkers, our ranchers, our ranch
hands, and our ranch managers. I just want to make it clear
that agriculture doesn't happen without the workers. And that
is not just the owners, but that is the folks that are working
the lands.
Expanding access to nutrition programs in New Mexico is one
of my top priorities. And New Mexico has the highest
participation in SNAP in the nation. One in 40 New Mexicans
rely on programs such as SNAP and WIC to have the basic
nutrition to go to work and go to school. Children and families
are hungry in our state, and they need food to thrive.
Now, the irony in this, Secretary, is that we work hard, we
wake up early, we put food on the table for the rest of the
nation, and yet we are the ones who need these food assistance
programs the most. We struggle with food insecurity. One in
five children in my district faces hunger, and without access
to this critical nutrition, parents cannot focus on going to
work or going to school.
Now, I recently heard from Sophia, a mother in Las Cruces,
who goes to school while working full-time to ensure she can
feed her family. Since the expanded SNAP benefits expired, she
has struggled to feed her family while continuing her
education. So it is clear to me that SNAP and WIC, when it
comes to the entire equation of feeding our nation, are
critical to strengthening food security for this country and
strengthening our families.
Secretary Vilsack, what more could we do to make sure that
families like Sophia's, who are directly in charge of being the
next generation of folks who are putting food on our tables,
can have food security in one of the poorest states in the
country?
Secretary Vilsack. Well, I think, first of all, making sure
that you are adequately funding the WIC program you mentioned.
To the extent that that WIC program is under-funded, that would
mean fewer people would be able to access it.
I think, second, making sure that there are not
restrictions on the SNAP program that would make it more
difficult for people to qualify or more difficult for people to
get the benefit that they need to provide supplemental
assistance.
I think, third, making sure that states understand the
importance of taking steps to ensure that those who are
qualified for the program actually participate. Unfortunately,
sometimes there are circumstances and situations where states
don't make a concerted effort to sign people up or to get
people to participate in the program.
And then I would say, in addition, making sure that the
states that you are most concerned about are fully and
completely focused on implementation of the Summer EBT program,
which is going to provide additional resources to families for
free and reduced lunch for children in school. I would say
those are pretty significant opportunities as well to provide
help.
Mr. Vasquez. Thank you, Secretary. And I will just say one
of the things that I have enjoyed most about serving on this
Committee, along with my colleagues on the other side, is the
bipartisan committee that we have set up to help modernize the
farmworker system that we have for folks in this country,
including H-2A and H-2B, of which we should have some
recommendations for the rest of our colleagues, but also before
your department and the Administration, that helps some of
those both domestic producers and immigrant producers, the
folks who are working at these very hard jobs, be able to have
the opportunity to put food on the tables of Americans, so
thank you for that.
The other question I have is a little bit different. But
you were recently in my district. You were in Albuquerque's
South Valley. We were announcing a monumental investment in
broadband for rural communities, $40 million for the State of
New Mexico. Secretary, how can we make sure that those dollars
are being spent in an efficient way that truly delivers the
connectivity that rural communities need, including small and
medium producers that can now take their businesses online and
produce niche products that can help support rural economies?
What are the plans for the Administration in terms of oversight
and administration of these rural broadband dollars?
Secretary Vilsack. Well, each of the projects that are
awarded resources have a team at USDA that follows the
construction, the implementation of the grant to ensure that
things are done in a proper way and a timely way. And so I can
guarantee that that will take place for every one of the
projects that we award resources to.
I think the other issue, of course, is that there are other
programs outside of USDA that I think are very important to
keep an eye on, and that is the resources that are being
provided to states and state Governors to basically fill in the
gaps. Our program primarily is focused on improving the level
of service that is available so that people actually have
meaningful broadband access. We do serve underserved areas, but
we also make sure that the level of service is adequate so that
more than one person can be downloading something in a home,
for example.
Mr. Vasquez. Mr. Secretary, thank you for your investment
in New Mexico. Thank you, Mr. Chairman. I yield back.
The Chairman. I thank the gentleman and now recognize the
gentleman from Tennessee, Mr. Rose, for 5 minutes.
Mr. Rose. Thank you, Chairman Thompson, and thanks to
Ranking Member Scott for holding the hearing, and thank you,
Secretary Vilsack, for being with us today. As time is limited,
I will dive right in.
The Tennessee walking horse industry is a special industry
that, frankly, is extremely important to my constituents and
one that I value personally. Last summer during a farm bill
listening session tour that Representative DesJarlais and I
hosted in Tennessee, I, along with Representative DesJarlais,
joined by Chairman Thompson and also Representative Jonathan
Jackson, visited a walking horse stable facility.
The Walking Horse Celebration is a time-honored tradition
in Tennessee that began in 1939. Over 2,000 horses compete to
be crowned the World Grand Champion, which is always crowned
the Saturday night before Labor Day. I see you are writing that
down. This year's celebration will be held August 21 through
August 31 in Shelbyville, Tennessee. Mr. Secretary, I would
like to extend a personal invitation for you to attend this
unique event and experience firsthand this long-standing
Tennessee tradition. Mr. Secretary, schedule permitting, would
you be willing to consider attending this year's celebration?
Secretary Vilsack. Be happy--they don't put me in charge of
my schedule, Congressman. It would be chaotic if they did. But
I am happy to make sure that folks are aware of your kind
invitation and will certainly take it into consideration.
Mr. Rose. And I invite you because, as part of my visits to
the celebration in recent years, I have had the opportunity to
take a look at what your staff is doing there to inspect the
horses, and it is really quite something, the efforts, the
lengths that are taken to make sure that these horses are
treated humanely and fairly. And so I just think it would be
useful to you to see that and then compare and contrast that to
what happens elsewhere in the equine industry, the lack of
equivalent oversight that is going on with respect to other
shows, with respect to other breeds. So I would encourage you
to consider coming. I think it would be insightful to you to
have a sense for the scope of that inspection process.
I want to shift gears. I was extremely alarmed to read the
December 20, 2023, press release from the U.S. Attorney's
Office for the Southern District of Mississippi announcing that
a USDA employee named Ella Martin was sentenced to 35 months in
prison for using her USDA position to create fraudulent
warranty deeds with the intent to deprive the actual owners of
the real estate of the use and benefit of their property.
Mr. Chairman, I ask unanimous consent to have the text of
the press release entered into the record.
The Chairman. Without objection.
[The press release referred to is located on p. 169.]
Mr. Rose. Mr. Secretary, what specific policies and
procedures has USDA implemented in light of this development to
strengthen internal controls and prevent similar fraudulent
activity like this from occurring in the future?
Secretary Vilsack. Every time something like this occurs,
our Inspector General gets engaged and involved and basically
gives us activities or steps that could be taken to ensure that
there is not a repeat situation. We obviously are very
interested in making sure it doesn't happen again. And so we
institute training. We institute new guidance. We institute
oversight to make sure that these kinds of activities don't
occur on a regular basis.
Mr. Rose. Mr. Secretary, recently, USDA published the
organic livestock and poultry standards final rule that sets
new standards for organic livestock and poultry production,
including standards relating to animal welfare for the first
time. Previously, the Agriculture Marketing Service stated that
the Organic Foods Production Act (Pub. L. 101-624, Title XXI--
Organic Certification) did not, quote, ``authorize the animal
welfare provisions,'' close quote. This sudden change in
statutory interpretation leads me to believe this action could
be interpreted as arbitrary and capricious. Secretary Vilsack,
can you further explain why USDA changed their interpretation
of this statute?
Secretary Vilsack. I think it is important from a brand
perspective that we do what we can to ensure that the organic
brand remains a high-value brand. I think there is a certain
expectation from the consuming public when they pay
significantly more for organically produced items, that they
are produced in an appropriate way. And I think it is a
reflection of consumer expectation and what the industry itself
is requesting.
Mr. Rose. Thank you. I appreciate that insight. And I don't
think I can make it through this question, so I think I will
just yield back the balance of my time.
The Chairman. The gentleman yields back. I am now pleased
to recognize the gentlelady from Ohio, Congresswoman Brown.
Ms. Brown. Thank you, Chairman Thompson, and thank you for
holding this hearing today. And, Secretary Vilsack, thank you
for being here. It is great to see you again.
We are months past our original deadline to get the farm
bill done and now just months away from our new deadline. As
mentioned by my colleagues, it has been 6 months since our last
full hearing in this Committee, and I, too, am glad that we are
getting back to business because it is past time to get
serious.
So, Secretary Vilsack, as Ranking Member of the General
Farm Commodities, Risk Management, and Credit Subcommittee, I
appreciate the emphasis in your testimony on small- and mid-
size farming because we know that our traditional farm programs
need to work for everyone, not just the biggest players.
Given that the average age of the American farmer is
increasing each year, promoting the growth of small-, mid-
sized, and urban farms is an effective way to bring new,
younger faces into the industry. So can you talk more about
which of the USDA's efforts for small-, mid-size, and urban
farms are specifically targeted to or beneficial for new
producers into the agricultural space?
Secretary Vilsack. Well, there are a couple. I mean, first
of all, we have 17 urban center initiatives in 17 cities across
the United States to encourage urban agriculture. We have
placed a Farm Service Agency office in each one of those 17
cities so that all of the programs that a farmer would have,
wherever they are located, are available to those urban
farmers.
NRCS is also engaged in providing and ensuring that all the
conservation programs, from hoop houses to extended growing
seasons, things of that nature, are available to those urban
systems.
I think we are also looking at ways in which we can promote
market opportunities. That is why we invest in Farmers' Market
Promotion Programs. That is why we have our local agricultural
marketing effort, which provides resources to farmers to value-
add if they produce a product. It is why we are focused on
ensuring local food purchasing agreements. When states purchase
product for food banks or for schools, they are doing business
with local, small-, mid-sized producers. It is why we track
that information. It is why we are also using our emergency
resources, emergency funds for food assistance resources to
funnel into that local and regional food system.
And the reason for it is simple. When you go to the grocery
store, the farmer gets roughly 15 of every food dollar that is
spent. The net of that is about 7 to the farmer. But when they
sell to a local direct-to-consumer opportunity, they can get
50 to 75 of the food dollar. So it is a way of helping those
small- and mid-sized operators have a market that is more
designed for their capacities.
So there is research that we are also investing in. There
are systems to help those farmers transition to organic and a
high-value proposition if they are interested in that. We also
have a local and regional food system, a set of 12 centers
across the country that are providing the assistance and help
to those who want to establish a local and regional food
system. So there are a multitude of efforts underway to help
folks, regardless of where they are located.
Ms. Brown. Thank you very much. I would also like to touch
on the topic of food assistance, particularly because there are
more than 82,000 households reliant on SNAP benefits within my
district, representing one of the largest concentrations in the
country. When it comes to this upcoming farm bill, there has
been a lot of noise about the Thrifty Food Plan. Specifically,
some Republicans have suggested we hold future reevaluations of
the Thrifty arbitrarily cost-neutral in an effort to save
money.
So, Secretary Vilsack, what would the theoretical impacts
be to holding the Thrifty to the costs of the 2021 plan for
another 20, 30, or 40 years? And, most importantly, how would
it impact SNAP recipients?
Secretary Vilsack. Well, I believe that essentially it
would result in us getting a benefit, as was the case in
waiting 45 years to do what we did recently that inadequately,
if you will, meets the requirements and the modern day needs of
a family. I think what we found when we redid the SNAP Thrifty
Food Plan, consistent with the 2018 Farm Bill, was that the
information that we were funneling into the system was not
aligned with what was actually happening in the real world. And
that is why we used real-world data, real-world examples and
information to better inform the system, and that is why
Congress directed us to do that. And it resulted in a 20+
percent increase in the overall floor of SNAP.
Ms. Brown. Well, thank you. It is clear in the upcoming
farm bill two essential objectives must be met. We must strive
to both strengthen and expand our long-standing agricultural
programs, while simultaneously ensuring the protection of our
nation's critical nutrition assistance. So I really hope my
Republican colleagues are listening and will join Democrats in
putting producers and people over politics.
And with that, Mr. Chairman, I yield back.
The Chairman. The gentlelady yields back. I am now pleased
to recognize the gentlelady from Texas, Congresswoman De La
Cruz, for 5 minutes of questioning.
Ms. De La Cruz. Thank you, Mr. Chairman, and thank you,
Secretary, for being here today.
As you know, Texas is one of three states that grows and
mills sugarcane. And I am proud to say that in my district,
Texas 15, which is in deep south Texas where McAllen, Texas,
is, the sugar industry provides good jobs, and it provides
economic opportunity and growth for our community.
Unfortunately, it has been incredibly challenging for our
sugar mills in our area due to the lack of water. This is in
large part caused by the 1944 Water Treaty with Mexico (Treaty
Series 994, Utilization of Waters of the Colorado and Tijuana
Rivers and of the Rio Grande). Are you familiar with that water
treaty?
Secretary Vilsack. I am not specifically familiar with that
specific treaty. I am familiar with water----
Ms. De La Cruz. Well, let me share with you how important
this treaty is. And under this treaty, Mexico is supposed to
give United States farmers 350,000 acre-feet of water every
year. Mexico has failed to do this. I am proud to tell you that
I stand with my farmers and ranchers and have worked in a
bipartisan manner to pass a House resolution that had
overwhelming bipartisan support. And what that House resolution
did was ask Mexico to give us our water that is so deeply,
deeply needed. We are in the 4th year of a current 5 year cycle
where Mexico is deficient over 760,000 acre-feet of water. This
is simply unacceptable, and it is causing lots of harm and hurt
to our farmers and ranchers in our area.
Given the current water situation that is really out of our
farmers' control, we are suffering right now deficiencies in
water which is basically having the farmers sow less crop than
what they are able to send. What I am asking you to do today is
to help us in south Texas, help our farmers and ranchers
because our sugar mill companies in south Texas are saying that
due to this lack of water, they are going to have to close. Let
me ask you this. How do you feel about knowing that there are
sugar mills in south Texas that are about to close due to this
lack of water?
Secretary Vilsack. Well, I think it is important for us to
have a focus on this issue of water, not just specifically for
the sugar mills, but for farmers and ranchers and producers
across the United States, and particularly in the western part
of the U.S. It is one of the reasons why we established our
Western Water Initiative, which I probably should make sure
your staff is aware of, if they aren't already, which is really
focused on sustaining agricultural productivity, taking a look
at ways in which we can protect both surface water and
groundwater, restoring range lands and forest lands in terms of
water utilization, and responding to disruptions.
Ms. De La Cruz. Let me reclaim my time----
Secretary Vilsack. Sure.
Ms. De La Cruz.--Mr. Secretary, because it is such an
important issue. And like my colleague across the aisle said,
we don't want to play partisan politics with our farmers and
ranchers. Food security is national security, and I would like
your commitment to stand with me and our farmers and ranchers
and meet with and talk with Secretary Blinken about Mexico's
lack of abiding to the 1944 treaty. Can I have your commitment
to stand with the ranchers and farmers and speak to Secretary
Blinken about this treaty?
Secretary Vilsack. I am happy to take a look and learn more
about this and get back to you, Congresswoman. I think that is
fair.
Ms. De La Cruz. Thank you. I greatly, greatly appreciate
it, and my office will follow up with you on this important
topic.
With that, I yield back.
The Chairman. The gentlelady yields back.
I am now pleased to recognize the gentlelady from Hawaii,
Congresswoman Tokuda, for 5 minutes of questioning.
Ms. Tokuda. Mahalo, Mr. Chairman. And, first of all,
Secretary Vilsack, just a big thank you to the USDA for all the
responses that have come forth as a result of the wildfires in
Lahaina. I know you have not been able to come and visit yet,
but please, we welcome you to do so. We had significant damage,
over 6,300 acres burned and razed as a result of the fire. We
lost heads of cattle, equipment: $23 million in damage may not
seem like a lot in some communities, but it is very big for
ours. So again, thank you, but we do know that there is a lot
of work that needs to be done, a lot more funding for
disasters. After Lahaina, we have seen so much more, and so we
need to start funding these efforts so that you and your teams
can do good work in the community.
The hard part about going almost last is a lot of questions
have been asked already, so I will try to jump to some
different ones that have not been touched on yet. I wanted to
talk a little bit about our need to continue our ongoing
commitment to the 1890 and 1994 land-grant universities. As you
know, I remain committed and concerned about access to
scholarships and resources for Asian American, Native Hawaiian,
and Pacific Islander students. And I know we have discussed
this, Mr. Secretary, before when you spoke to our Congressional
Asian Pacific American Caucus. However, I reiterate the need
for Congressman Sablan's AANAPISI Opportunity Act (H.R. 2783)
of which I am an original cosponsor. And so what is your
position on establishing grants to support Asian American and
Pacific Islander-centered agricultural research and
scholarships for AANHPI students? And what steps has the
Department taken to support AANHPI farmers as well?
Secretary Vilsack. We have included those students in our
NextGen Initiative, which is designed to provide resources to
minority-serving institutions across the board, to fund
scholarships, internships, fellowships, and things of that
nature. That is $262 million from the American Rescue Plan that
has been circulated or provided in a series of grants. We have
also made sure that our Office of Partnership, basically, as it
administers the Scholars Program, ensures that it is
administered in a holistic way. And I think you will see that
there are actually more grants and more scholarships that have
been awarded recently.
Ms. Tokuda. Thank you for that. And I would just reiterate
as well--and we have spoken about this before that as we do
outreach to these particular communities, we need to be
conscious about the best way and most effective way to reach
out to them, oftentimes, too, considering language, access, and
barriers that may be particular issues, cultural barriers as
well. And so to the extent that that can be aggressively
integrated into your outreach so we can make sure that those
individuals, those students have access, are able to
participate actively, I would appreciate that.
Secretary Vilsack. We have a very extensive process now
where we are trying to convert a lot of our information into
multiple languages to make sure that information is more
readily available to a broader scope of individuals.
Ms. Tokuda. Thank you. And somewhat along those lines, when
I take a look at and we talk about indigenous agriculture--by
the way, if you are able to join us in Hawaii, we can really
expose you to some of the uniqueness of Native Hawaiian and
Pacific Islander traditional farming practices and techniques,
crops that for us might be--they are staple crops for us,
specialty crops to others. But on this particular issue, I
often see in my home state and in my district how challenging
it can be for my producers, including Native Hawaiian
producers, to access USDA programs in the first place.
Mr. Secretary, underrepresented and underserved producers
have been calling on the Department to pilot a navigator
program to help them navigate USDA's systems and processes for
some time now. What is your position on the need for and the
effectiveness of such a pilot program to be able to connect up
our farmers, ranchers, and producers with the support and help
that is available that they need but is right now very
inaccessible to them in the way it is being offered?
Secretary Vilsack. Well, both the Farm Service Agency
office and the NRCS have engaged in the signing of a series of
cooperative agreements similar to what you have outlined. Farm
Service has over 30 of these agreements. NRCS has over 100 of
them with organizations and entities designed to provide
outreach to historically underserved producers to make sure
that they are aware of programs and to help guide them through
whatever the application process needs to be. So that is
already taking place in both of those agencies.
Ms. Tokuda. I would humbly suggest and I am glad to see
that these cooperative agreements are in place. But for many of
us that represent communities with high populations, for
example, I am specifically talking about AANHPI communities--
let's just make sure that the individuals we are actually
contracting with, that the method in which we are outreaching
to them through these individual groups are the most effective
possible. So I welcome further communication with you on this
because at the end of the day, I want to make sure my farmers,
ranchers, and producers can actually engage with the USDA in a
meaningful way.
I have a number of other questions relating to natural
disasters and rural health, I know, Mr. Chairman, an interest
you and I both share in terms of making sure that food is
viewed as medicine and we can help our rural communities, so we
will submit that for the record. Thank you, Mr. Chairman.
The Chairman. I thank the gentlelady. I am now pleased to
recognize the gentleman from California, Mr. Duarte, for 5
minutes of questioning.
Mr. Duarte. Thank you, Mr. Chairman, a big thank you. Thank
you to the Secretary. [inaudible]. I had just a month ago best-
of-breed growers in my district with very established farm
families, almond, walnut, winegrape growers, diversified, long-
term families call me into a meeting with bankers talking about
a farm liquidity crisis, a farm borrowing crisis in the Central
Valley. Almond prices have been low for a long time.
Pistachios, walnuts are through the floor. Winegrapes are
entire glut right now greatly due to a lack of exports.
But nonetheless, anything you can do, Mr. Secretary, with
the Consumer Financial Protection Bureau to loosen the screws a
little bit on ag lending is going to be very, very important.
Anything you can do with the Farm Credits to make sure that ag
lenders can get their growers through this crisis because if
you look at the aggregate numbers, American farm values and ag
revenues are down tens of billions of dollars in the last
couple of years. In specialty crops in California a lot of
these high export crops, it is disproportional pain. And so
please look at ag lending. Look at farm liquidity. It is a
crisis.
The crisis stems greatly from trade deals, from trade, and
not necessarily lack of trade deals. Yes, there is a lot we can
do there. But the retaliatory agricultural tariffs from China,
India, and Turkey--those are the big pieces of the pie chart--
are really what is causing, in my opinion, the agricultural
crisis today, the commodity gluts, the low prices, and the low
farm returns.
I am carrying a bill, but I believe you have it within your
power to look at the Commodity Credit Corporation. My bill is
called Foreign Retaliatory Agricultural Tariffs Supplement.
Simply use the Commodity Credit Corporation fees instead of
some of the other programs that are elevating farmers under low
prices to simply supplement back the retaliatory ag tariffs
being put on farm exports. If we export almonds, it is a 25
percent tariff to China. Supplement that back to the exporter,
get it down to the grower, and that would alleviate the gluts
that are killing farm returns right now today.
And so I would very much like to connect with you or
anybody in your trade group on an F-RATS proposal. We just won
a 5 year World Trade Organization lawsuit against China's
retaliatory ag tariffs, and those ag tariffs are still in
place, and they are really crushing American agriculture, so I
would invite you to look at that.
I also want to look at--I have worked in some plant
biotechnology over the years. Gene editing is a brave new
frontier in plant biotech and plant improvement and solving a
lot of the long-term sustainability problems and challenges
that we have in growing crops, especially clonal crops like
grapes and almonds where it is not easy to breed new seed each
year.
There are people--you have Under Secretary for Market
Services, Jenny Moffitt, in your group, who I am getting a lot
of feedback on, is really restricting the types of CRISPR
editing that can be done in plants and still qualify for the
biopesticide exclusions. It is really not the realm of USDA to
be delving into these pesticide exclusions. That is really an
EPA area. But I would invite you to take a look at that and
make sure that America maintains its leadership in plant
biotechnology, especially in the CRISPR gene editing area. It
is incredibly important. I think 37 Nobel laureates just signed
a joint letter encouraging the EU to maintain leadership in
this field. I would hate to see America give up our leadership
in biotechnology, which we have established over many years.
And fourth--I am not letting you talk much today, but you
have had a lot of that. At least I am not breaking your chops
too hard. The fourth thing I would want to talk about is the
crop insurance and using the example of the citrus producers in
California as a case. We got the Oriental and the Queensland
fruit flies that infest California citrus, causing huge
marketing problems with their crop, huge movement problems
within our fresh crop and citrus. And I really want to make
sure that our crop insurance programs allow for marketability
losses due to exotic pest infestations and disease
infestations, as well as catastrophic weather events and other
losses. These things cost farmers the same loss of returns and
revenue as catastrophic weather events, and they are often
almost all the time out of the control of the farmers
themselves.
Thank you for listening. I am sure you will have something
to say for the next person. Thank you, Mr. Secretary. Thank
you, Mr. Chairman. I yield back.
The Chairman. The gentleman yields back. Now I am pleased
to recognize the gentlelady from Minnesota, Congresswoman
Craig, wishing her a very happy birthday to begin with and----
Ms. Craig. What a way to spend a birthday. This is
fantastic.
The Chairman. There you go.
Ms. Craig. Thank you, Mr. Secretary, for making my
birthday----
The Chairman.--is recognized for 5 minutes of questioning.
Ms. Craig. Thank you so much, Mr. Chairman. And thank you
for being here, Secretary Vilsack. It is a great honor to be
here with you on my birthday.
So from your own visit to Minnesota 2 weeks ago to Deputy
Secretary Torres Small's visit in 2021, I know that you and
your team at USDA have been great partners in working to
support family farmers and rural economies in Minnesota and
across the country, so thank you for that partnership. I know
you have put some miles on yourself over the last 3 years, and
we appreciate your dedication to family farmers.
I have a few questions. I won't let you get off as easy as
my colleague there, so I am going to get right to it.
First of all, we have a unique opportunity in front of us
to get sustainable aviation fuel off the ground and in places
like my district in rural America into this emerging market
that we fought for in the Inflation Reduction Act. I know you
are enthusiastic, and I want to thank you so much for your
support of renewable fuels over the years and for your
championship of SAF. It does not go unnoticed by my family
farmers and by myself.
However, it is frustrating to hear that there is still some
uncertainty about the updated GREET model. I know the President
has a goal of hitting 35 billion gallons of SAF by 2050, which
is laudable, yet we are still waiting on a determination from
the interagency working group on GREET modeling. So let me just
push you here. How have the discussions been in that
interagency working group to update the model? And can we
expect those updates to be announced on March 1, as originally
directed in the December guidance from Treasury? And if not,
when should we expect them?
Secretary Vilsack. Conversations have been positive in
terms of expanded access to feedstocks to produce SAF, and I am
confident that there is a genuine desire on the part of all the
agencies and the White House to meet that March 1 deadline.
Ms. Craig. Excellent. That is a great answer. Thank you.
I know that you will see this soon, but I am leading a
bipartisan, bicameral letter with 25 of my colleagues on the
issue. It will be sent to members of the working group at the
end of the day today. And please know that there are American
farmers that have been unable to scale up their production
because they are waiting on this guidance, and we certainly are
looking forward to it and hopefully by that March 1 timeline.
My second question is about the grassland Conservation
Reserve Program, CRP. We know it is an absolute critical
program that supports farmers and the work that they do to
sustain the lands that they farm. And thank you for your
remarks in your opening statement there.
My home State of Minnesota is eighth in the country for the
number of acres enrolled and third in annual rental payments
for the program. So I know there is an ongoing conversation
about turning CRP into a dollar-based program. Given the rising
costs of land, how do you foresee this impacting CRP's
effectiveness if that happened?
Secretary Vilsack. What is interesting about the grasslands
part of the CRP program is we are now at a record level of
enrollment. There is a lot of activity and a lot of interest in
the grassland, and we have continually seen that each year in
terms of the signup. There is still robust interest in CRP, and
I would anticipate and expect that it is going to continue.
I think there will be an interesting intersection of
climate-smart activities and ecosystem service markets and the
potential opportunities for CRP to be integrated into that
system. But I think, right now, we are excited about the
opportunities, and we continue to see a lot of interest in it.
And, we are sensitive to making sure that the rental rates are
in a situation where they don't necessarily encourage or
discourage the use of productive farmland for productivity and
nonproductive land for going into CRP.
Ms. Craig. I think I have just enough time to sneak in one
more question. I know the farm bill is on top of everybody's
mind--it is certainly on mine as well--and that American ag is
at a crossroads. It is just essential that we continue to
improve the farm safety net. What should legislators be keeping
in mind as we look to strengthen the farm safety net in the
farm bill from your perspective, Secretary Vilsack?
Secretary Vilsack. Well, I think the challenge is to find
the resources to strengthen the safety net without necessarily
jeopardizing the capacity of nutrition assistance to do what it
needs to do and without taking resources away from
conservation, which benefits a broad array of producers. I
think that is the challenge, and I think there is a creative
way to do that that doesn't necessarily limit SNAP and doesn't
necessarily take money from the IRA. I think that is the key.
Ms. Craig. I couldn't agree with you more. And with that,
Mr. Secretary, thank you. And I yield back.
Secretary Vilsack. Happy birthday.
Ms. Craig. Thank you.
The Chairman. I thank the gentlelady for sharing her
birthday with us today. And I am pleased to recognize the
gentleman from Iowa, Representative Nunn, for 5 minutes of
questioning.
Mr. Nunn. Well, thank you very much, Mr. Chairman. Thank
you, Secretary of Agriculture, for being with us today.
Unfortunately, we are talking to farmers who are facing
larger-than-expected year-to-year losses, in fact, a drop in
net income in 2024 alone. This is one of the largest drops of
nearly $40 billion that everyday farmers across the country are
facing. In fact, it is down 25 percent just from last year.
So let's get directly to it. Look, the reality is that
taxpayers have invested over $500 million in the expansion of
biofuels. And I appreciate my colleague on the other side of
the aisle, Congresswoman Craig. We have worked together on this
issue. But at the same time, taxpayers under this
Administration have also put $40 billion into electric vehicle
infrastructures through the Inflation Reduction Act.
So let's begin here. Our home State of Iowa, biofuels
produced in our home state provide Americans with cheaper and
cleaner fuel. Mr. Secretary, we could both agree to that. Is
that right?
Secretary Vilsack. Yes.
Mr. Nunn. Is it true that biofuels reduce greenhouse gas
emissions and have a lower carbon footprint when compared with
traditional fuels?
Secretary Vilsack. Yes.
Mr. Nunn. Do you believe that America's energy independence
is a priority for national security?
Secretary Vilsack. Sure.
Mr. Nunn. So here we are in a situation where we are now
putting $40 billion directly into a competition of an electric
vehicle system that directly funds one of our key competitors,
that of China. Are you aware of the fact that China uses child
slave labor for the production and elicitation of a number of
the critical minerals necessary to build batteries?
Secretary Vilsack. That is why we are focused on investing
in battery production here in the U.S.
Mr. Nunn. But we haven't done that yet.
Secretary Vilsack. Well, we are doing it.
Mr. Nunn. So here, Mr. Secretary, I would like to talk
about where some of our additional competition comes from, and
that is in our export markets. When we talk about foreign
competitors, let's talk about Brazil. Last year, the U.S.
exported 1,600 million bushels of corn. Additionally, the U.S.
exported 1.25 billion gallons of ethanol to that same market.
But, Mr. Secretary, is it not also true that Brazil has
increased their tariffs on U.S. ethanol 18 percent last year?
Secretary Vilsack. That is true.
Mr. Nunn. And, as a result, the United States is now
importing nearly 40 million bushels?
Secretary Vilsack. I don't know what the exact number is,
but I am sure you do.
Mr. Nunn. It certainly makes it harder for Iowa farmers
when we are competing in a tariff environment, I would ask the
Administration to look into this and be able to push back on
our competitors, not just Brazil, but around the world.
Secretary Vilsack. And we do. We do.
Mr. Nunn. Mr. Secretary, you also agree that a lack of
access to global markets is harming the U.S. biofuel industry?
Secretary Vilsack. No, I don't agree with that because we
have actually----
Mr. Nunn. So us not being able to sell to foreign countries
is not harming U.S. farmers?
Secretary Vilsack. We actually are seeing an increase in
activity on the export side of biofuels. We have seen in Japan,
Japan recently----
Mr. Nunn. Not nearly enough to make up for what we are
losing in markets like Brazil, like Africa----
Secretary Vilsack. Your question suggested that we weren't
doing any of that, and that is just not accurate.
Mr. Nunn. Mr. Secretary, there are 87,000 farmers in our
home state. The average farmer is 57. In fact, most of those
farmers are approaching an age where they are going to be over
70 years old. We don't expect any other industry to have to not
only have a 25 percent loss in revenue over last year without
providing some onramps and some incentives from our own Federal
Government.
So here is what I would like to ask of us. Please join with
this Committee, as we have done in the farm bill, to provide
onramps for new farmers, nontraditional farmers, veteran
farmers. These are things that not only help grow Iowa's
economy, but help keep us competitive around the world.
Secretary Vilsack. Well----
Mr. Nunn. And I will also say that some of the conservation
practices that are coming out of Iowa are a model not only for
the U.S., but are ones that the USDA could learn from. And
right now, working with USDA, while I appreciate the individual
groups, is a top-down-only approach. And I see some folks in
the audience today with ``Pass Goldie's Act.'' USDA has
consistently fallen short in enforcing puppy mills in Iowa, now
ranked as one of the worst in the country. In fact, our local
law enforcement have asked USDA for support, and time and time
again, they have made it difficult. That is part of what is in
this farm bill.
So, Mr. Secretary, as we work together on a farm bill, I
hope that your agency and this Committee continues to listen to
Iowa farmers who are leading the charge on this, not just in
biofuels, but in our best practices across the board. And so,
Mr. Secretary, I will end where we started here. When it comes
to what this Administration has committed to and you have done,
is this effort for year-round E15 that you committed to this
Committee last year going to be ready in 2024?
Secretary Vilsack. I think we are going to have E15 year-
round. I don't know what year. I don't know if it is 2024 or
2025. If it is 2025, I am reasonably confident that we will see
access to E15----
Mr. Nunn. I appreciate that----
Secretary Vilsack. Let me finish.
Mr. Nunn.--Mr. Secretary, but the reality has been----
Secretary Vilsack. Let me finish. Let me finish,
Congressman.
Mr. Nunn.--that you consistently----
Secretary Vilsack. Let me finish.
Mr. Nunn.--promise this and here we are----
Secretary Vilsack. No, no----
Mr. Nunn.--years in the making?
Secretary Vilsack. No----
Mr. Nunn. No, I have 8 seconds left, and I just want to
highlight this, Mr. Secretary. It is important that not only do
we work together, but we follow through on our commitments that
we make to Iowa farmers.
Secretary Vilsack. We are following through.
Mr. Nunn. With that, Mr. Chairman----
Secretary Vilsack. It is not----
Mr. Nunn.--I yield back.
Secretary Vilsack. It is not fair to mischaracterize what
we are doing here, Congressman. That is just not fair. That is
not Iowa.
Mr. Nunn. Mr. Secretary----
Secretary Vilsack. I will tell you what, that is not----
Mr. Nunn.--2024----
Secretary Vilsack.--what we do in Iowa.
Mr. Nunn.--you made that commitment that we would be able
to be E15 year-round. Is that correct?
Secretary Vilsack. Well, we are going to----
The Chairman. The gentleman's time has expired.
Secretary Vilsack.--be E15 year-round. We are.
Mr. Nunn. You just told me 2025 or sometime in the future.
Secretary Vilsack. Well, we will be E15. And I will tell
you, we are the best Administration for ethanol in the history
of this country, and I can guarantee you----
Mr. Nunn. That is only because of Iowa farmers and others
who have led the charge on this.
Secretary Vilsack. [inaudible]----
Mr. Nunn. And I am glad you are responsive to them, but
that is a huge part. Let's give----
The Chairman. The gentleman's time has expired.
Mr. Nunn.--credit to the farmers on this. Thank you.
The Chairman. I will recognize the gentlelady from
Connecticut, Congresswoman Hayes, for 5 minutes.
Mrs. Hayes. Thank you, Mr. Chairman. Got it nice and chilly
in here for you, Secretary Vilsack, so you guys had to heat it
up. Thanks for being here again to talk to us. It is no
surprise. You already know what I am going to ask about. But
before I begin my questions, I just want to make note of the
fact that we saw a chart earlier from the Republicans that
showed that their class neutrality plan would not cut SNAP
benefits. I think it is pretty basic math to say that, as more
people are accessing these programs and it is growing, if we
are not continuing to invest in them, that is in essence
cutting SNAP benefits. You can call it whatever you want.
But we pulled data from the CBO's May baseline that refutes
that account, so I have another chart that I would like to
introduce into the record to show that if we keep the Thrifty
Food Plan cost-neutral--this is the Republicans' plan; this is
the Democrats' plan--benefits will be decreased. I would like
to enter that into the record, Mr. Chairman.
The Chairman. Without objection.
[The information referred to is located on p. 170.]
Mrs. Hayes. Thank you. Secretary Vilsack, as you know, SNAP
is the leading anti-hunger program in the nation. And according
to the Center on Budget and Policy Priorities, the program
reduces food insecurity by 30 percent. I have heard several
times in this hearing that food is national security, so I
would hope that we would be trying to feed more people, not
less here in America.
And to do that, we have heard a lot about the data and how
it is collected. SNAP administrators provide application
assistance, answer client questions, and offer verification
guidance for SNAP applicants. Throughout the pandemic, as you
mentioned earlier, there was lots of flexibility, and SNAP
administrators were stretched beyond capacity as they worked to
ensure families were fed.
Now, as we are looking at how do we improve these programs,
as of April 2023, states and towns struggled to fill over
833,000 open positions for the employees who actually do this
work.\3\ I have concerns about that because I don't want us to
look at the program as ineffective or inefficient because of
staffing or administrative concerns.
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\3\ Editor's note: Mrs. Hayes submitted a clarification to her
statement (supplementary information), it is located on p. 170.
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So, Secretary Vilsack, what have you heard from state
agencies about obstacles to recruiting and retaining SNAP
administrators?
Secretary Vilsack. I think most of the agencies have asked
for some kind of relaxation. And the concern is, we are
providing $5.7 billion to states across the country to
administer these programs. And I think it is important and
necessary for them to do what they need to do, to be able to
recruit the staff necessary to administer these programs
properly without necessarily cutting corners because when you
cut corners, it risks the integrity of the program. So we are
encouraging folks to get back to normal business. We appreciate
the importance of flexibility, but I think there is a balance
between flexibility and making sure that the resources we are
providing them are being used adequately and appropriately to
staff these programs.
Mrs. Hayes. I couldn't agree more. Last week, I introduced
the SNAP Administrators Retention Act (H.R. 7285), which would
allow states to receive 100 percent of the costs associated
with hiring and retaining staff to run these programs.
Additionally, it aligns the wages of the state SNAP
administrators with Federal wages. These are commonsense
solutions to improve access to SNAP, prevent backlogs, and feed
real people.
Secretary Vilsack, on February 8, the USDA sent letters to
states, including my State of Connecticut, expressing concern
about the decline in several key benchmarks of state
administration of SNAP. I heard you say earlier, people don't
know about the benefits, they don't have access to them, they
are not really sure how to go about getting them. Can you
please elaborate on how the Food and Nutrition Service plans to
collaborate with states to improve program efficiency?
Secretary Vilsack. We continue to provide technical
assistance to states as they grapple with particular issues. We
also have the Employment and Training Program, the SNAP-
Education Program. There are a variety of ways in which we are
providing assistance to states in the administration of this
program. The challenge, I think, is that some states basically
don't--they are not as aggressive as they need to be to make
sure that people who qualify for the program actually sign up
for the program. So we basically keep track, and if we see
somebody that is below par, we basically encourage them to step
up their activities. Sometimes it is with seniors, sometimes it
is language issues, sometimes it is just making sure that the
word gets out and you don't create too many barriers to
participation.
Mrs. Hayes. Well, thank you for that. And like you, I agree
that the government does work. We can make it work. I can tell
you when a storm hits and FEMA comes, people are happy to see
the government. I have a piece of legislation closing the
college hunger gap, which does exactly that. When students
apply for FAFSA, they would know if they were eligible for a
program like SNAP. And we are all--it is one government. We
have the ability to communicate across agencies, and I think we
could do a better job of doing that.
Thank you so much for your time today. Mr. Chairman, I
yield back.
The Chairman. The gentlelady's time has expired. I am now
pleased to recognize the gentleman from Indiana, Mr. Baird, for
5 minutes of questioning.
Mr. Baird. Thank you, Mr. Chairman. And thank you,
Secretary Vilsack, for being here today. My first question
deals with getting some idea where you think you are in
drafting the implementation of the SUSTAINS Act (Pub. L. 117-
328, Division HH--Agriculture). That is a public-private
partnership program. That will bring private dollars into the
conservation program. So where do you think we are on that
issue?
Secretary Vilsack. I have had a number of conversations
with individuals in the investment bank world that would
potentially be interested in promoting additional conservation
investments. And we are providing opportunities for them to
understand the various programs. I think there is some interest
in this, and I think it is also reflected in participation in
the Climate-Smart Commodity Partnership Initiative. We have a
broad array of food interest, retail interest, nonprofit
interest, as well as foundation interest in that program.
Mr. Baird. Excuse me. And continuing on in that vein, so to
speak, the IRA conservation funding is limited to practices
that are climate-smart, which we have mentioned earlier, as
defined by USDA staff. And that makes roughly 30 to 70 percent
of the conservation practices ineligible in some states for IRA
conservation funding. And from my vantage point, this removes
the locally-led producer-first nature of these programs and
allows USDA staff in Washington, D.C., to choose which natural
resource concerns can be addressed in Indiana or elsewhere.
So, Mr. Vilsack, since IRA funding is limited to climate-
smart practices, how can you ensure that the locally-led nature
of conservation programs won't be lost? And how important is
the locally-led component of conservation programs?
Secretary Vilsack. I don't think they are being lost,
Congressman. I think we are seeing tremendous interest and
participation by farmers and ranchers and producers across the
board. That is why these programs have all been oversubscribed.
We literally have thousands of applications for the resources
that are available above and beyond the resources that are
available, so there is tremendous interest in this. So I don't
think we are leaving anybody behind in this process. And I
think people at the local level are fully engaged. Additional
resources are going into personnel and cooperative agreements
to get the word out. We are very pleased with the way in which
the countryside has responded to this.
Mr. Baird. I think that is an important issue, the fact
that the locals participate and have input into the kind of
programs they are interested in. And I think we need to make
sure we carry that on through and follow up on that kind of
activity, so thank you. I yield back, Mr. Chairman.
The Chairman. The gentleman yields back. I am now pleased
to recognize the gentleman from North Carolina, Mr. Davis, for
5 minutes of questioning.
Mr. Davis of North Carolina. Thank you so much, Mr.
Chairman. And good afternoon, Mr. Secretary. Thank you so much
for coming before the House Agriculture Committee today.
I would like to first amplify that in rural North Carolina
and rural America we continue to rely greatly on Rural
Development, in particular, new fire trucks, getting those out
into communities that often rely heavily on volunteer
departments. Telehealth services, that is huge for our rural
communities. I am also looking at ways to continue to help with
economic support to small businesses. So I just want to
continue to lift that up.
Where I would like to spend a little bit more time today is
in particular looking and talking about broadband. Broadband,
in terms of the long-term success of eastern North Carolina,
much of rural America depends on access, making affordable
access. My question is can you provide insight into the
challenges that remain in bridging the digital divide and
especially, as we are talking, getting this out into rural
communities?
Secretary Vilsack. Well, I think the challenge is making
sure that, first and foremost, the states do the job of
utilizing the resources that are now being made available to
them under the Bipartisan Infrastructure Law to expand access
to broadband in areas that currently are underserved or
unserved.
Second, I think it is important for us to make sure that,
as we are expanding access, that we are doing it in a way that
has meaningful broadband access, that it provides the kinds of
upload and download speeds that will allow a family, for
example, to have the ability to have somebody download--more
than one person at a time.
I think it is important as well that we continue to fund--
and you mentioned telemedicine--distance learning, that we
continue to fund the tools that will allow institutions to
utilize this expanded access to broadband in a way that then
expands educational opportunities or healthcare opportunities
in small and remote areas.
And then finally, I think we are going to continue to look
at the technology necessary to make sure that it gets to the
most remote of areas. Sometimes it is not physically or
financially feasible to have particular technologies. And then
there is a workforce issue and making sure that we have
adequate number of people who are qualified to install and to
maintain these systems. So it is a combination of all that.
Mr. Davis of North Carolina. And, Mr. Secretary, as a
follow-up here, do you have any sense of a time in which we
will see significant coverage across rural America?
Secretary Vilsack. Well, I can tell you that, based on the
recent survey that we concluded and published yesterday, we
have seen an increase in access among American farms and
ranches. About 78 percent of farms and ranches report basically
access to broadband, and that is up from 75 percent. I think
you are going to see rather dramatic increases over the course
of the next 3 to 5 years as the resources that have been made
available under the infrastructure law are fully obligated and
ultimately result in the construction and implementation. I
mean, you are seeing it now with our ReConnect program. We have
basically gotten resources out the door. There are over 100
projects that we have announced awards for that are moving
forward. You are going to see progress on those. And I think
you are going to see states aggressively use the resource that
is now available to them under the Commerce Department and the
FCC's efforts.
Mr. Davis of North Carolina. Mr. Secretary, I have another
question. The issue of hunger, in particular in the military,
it has been receiving a lot of attention lately in the recent
months thanks to the tireless work of advocates and
organizations on the ground. When I look at the 2022 National
Defense Authorization Act (Pub. L. 117-81), it included a new
basic needs allowance for lower-income service members, which
will help to address the issue. It is reaching fewer service
members than we would hope, but, my question to you, are there
any steps in particular that USDA or Congress you believe
should take in order to address food insecurity, in particular
with our military families?
Secretary Vilsack. We have an ongoing effort with the
Department of Defense to institute this program and to make
sure that families are aware of the capacity to qualify for
these programs. I would like the opportunity, Congressman, to
get back to you with what recommendations the folks who have
been working directly with the Department of Defense have about
any improvements to the effort. Obviously, we are deeply
concerned about making sure that those who serve us, that they
can fully utilize the programs that we have, so let me get back
to you.
Mr. Davis of North Carolina. Thank you, and I yield back,
Mr. Chairman.
The Chairman. The gentleman's time has expired. I am now
pleased to recognize the gentleman from New York, Mr.
Langworthy, for 5 minutes of questioning.
Mr. Langworthy. Thank you, Mr. Chairman. Secretary Vilsack,
I appreciate you being here once again as we continue to craft
an effective farm bill that supports our family farmers and
reduces the regulatory burdens of this Administration.
But before I get into that, I want to bring your attention
to an issue that is still impacting my district in rural
upstate New York. As you may recall, just about a year and a
half ago in December of 2022, Winter Storm Elliott ravaged my
district in western New York and across the southern tier. And
this was a once-in-a-generation storm that brought
unprecedented blizzard-like conditions and subzero temperatures
to the western New York community. Winter Storm Elliott also
wreaked havoc on the dairy industry, resulting in the closure
of dairy plants and extensive dumping of milk. Farmers in my
district faced the grim reality of being unable to have their
milk collected and delivered, compounding an already dire
situation.
I do recall that USDA set up a Milk Loss Program, and I
appreciate the efforts that the Department has made with the
rollout of milk loss payments to producers in my district.
However, I understand there is also a pending component of the
program to reimburse cooperative loss. And, as you know, dairy
cooperatives play a vital role in strengthening and supporting
the well-being of family farm operations in my district and
nationwide.
And with that, Mr. Secretary, I was wondering if you had an
update or a timeline that you can share today on when those
cooperative losses will be made available and if the Department
has made any progress on that? I am interested in anything this
Committee can do to support you in this effort and help move
this along.
Secretary Vilsack. Let me get a specific answer to that
question. Congressman, as I sit here today, I don't know
specifically about the status of that. I thought you were going
to ask me about the Dairy Margin Coverage Program, and I have a
response to that question, but not to this one.
Mr. Langworthy. Well, I mean, our farmers have been without
payment for almost a year and a half now, and this is
ridiculous. It is concerning to me that we have had no
reimbursement for cooperative losses that have been made at
all. And equally troubling is the lack of communication to
producers in my district regarding a timeline or updates prior
to today's hearing. So it is really important that we get this
information to share with our constituents. And it is important
to me that our farmers feel that they have been communicated
with, and they have been left in the dark at this point by the
Department.
Our agricultural producers, they are already struggling
with this Administration's egregious green agenda and the
regulatory policies that are causing our energy prices to
skyrocket, and it has put farmers' backs against the wall. And
this can also run them right out of business. So, all I ask you
to do today is to expeditiously use all the tools that the
Department has to get an answer and get these payments moved
forward. And I think that is a very important step for the
farmers in my district.
Now, moving on to a different topic, Mr. Secretary, last
year, Dr. George Koob, the Director of National Institute of
Alcohol Abuse and Alcoholism, suggested in an interview that
the next version of our Dietary Guidelines for Americans might
change the definition of moderate alcohol consumption to just
two alcoholic drinks per week for men and women. Now, that
would be a dramatic change from the current definition of up to
two drinks per day for each man and woman, which is included in
the DGA's release of December 2020. Does the USDA share Dr.
Koob's suggestion that drinking more than two beers a day is
excessive? And if so, can the USDA point to any new scientific
studies released since December 2020 that would justify such a
dramatic change in that definition of moderate consumption?
Secretary Vilsack. Frankly, our focus on the Dietary
Guidelines is on the dietary guidelines and not things that are
necessarily outside are being considered outside of the Dietary
Guidelines. We want to make sure that it is science-based.
Whatever is decided needs to be science-based, and that is why
you set up a system with experts. You give experts the
information. They make decisions based on the preponderance of
the evidence. We want to make sure that that system is
followed, whether it is alcohol or any other aspect of our
diets. We want to make sure it is science-based. That is what I
am committed to doing.
Mr. Langworthy. Okay. Mr. Secretary, well, I understand
this process is developing the 2025 Dietary Guidelines. That is
well underway right now. I just ask that any recommendations
based on sound science and not the usual regulatory overreach
that we have seen by this Administration?
And my additional question I am not going to have enough
time for, I am going to submit to you in writing. And, Mr.
Chairman, I yield back.
Mr. Miller of Ohio [presiding.] The gentleman yields back.
The gentlelady from Kansas, Ms. Davids, is now recognized for 5
minutes of questions.
Ms. Davids of Kansas. Thank you. And thank you, Secretary
Vilsack, for being here today. I am very proud and happy to get
the chance to serve as the Representative for the Kansas 3rd
District. And my district is comprised of rural, urban,
suburban, exurban. It is a pretty diverse district. And I do
think we serve as an excellent example of the critical role
that USDA plays, frankly, in every community across the
country. Kansas farmers and producers in my view are some of
the best in the world and would love actually to extend an
invitation for you to come and visit us to see some of the
innovative and certainly important work that they are doing out
there.
In addition to my role on the Agriculture Committee, I also
serve on the Small Business Committee and Transportation and
Infrastructure Committee. And through those roles, I really
have had the chance to work on supply chain issues from quite a
few different angles. Strengthening the agriculture supply
chain is important for all Americans, particularly for our
farmers and producers as they are providing food for folks.
And I know that the USDA is doing a lot of work on this.
There are tons of USDA employees who have taken steps to
strengthen our agriculture supply chains as we recover from
some of the recent challenges we have been seeing. And I am
particularly grateful for some of the USDA food inspectors and
the folks who are taking the time to make sure that meat and
poultry processing are happening in a safe and effective way.
So I want to say that the progress that we have seen, which
is a testament to the hard work of producers, processors,
truckers, the intermodal workers, so many different people, we
haven't seen the grocery costs that folks are dealing with come
down for consumers in the way that, frankly, a lot of people
need and would depend on. It remains a top concern for a lot of
folks in my district, high grocery costs.
And I did get the chance to discuss this with Deputy
Secretary Torres Small this past fall and would love to hear
from you about some of the specific actions that USDA has been
taking to increase the resilience of the agriculture supply
chains to help bring down those costs for folks.
Secretary Vilsack. Well, let me give one example, an
initiative that we are working with the Department of
Transportation to make sure that we are doing a good job of
understanding the flow and deciding or identifying where there
may be barriers in the supply chain and the flow of goods from
here to there that create additional cost or additional
disruptions that can result in supply shortages, which in turn
result in increased cost. We have an initiative with the
Department of Transportation to basically share data and
information and analyze that information so that we can
identify problems.
We also have an effort with the Department of
Transportation to take a look at the supply of containers so
that we know where there may be potential problems with
container supply that we can in turn make sure that adequate
containers are available to basically move product. That is one
area. And then there is also the area--sometimes we forget the
role that a particular disease or problem might result in terms
of food costs. I am thinking about HPAI, the avian influenza,
and the impact and effect it has on eggs. When there is an
outbreak, when there is an expansion of HPAI for the migratory
bird population, well, we are working with the industry to try
to figure out ways in which we can minimize that. But when it
occurs, egg prices go up because it impacts the supply of eggs.
So there are a multitude of challenges with reference to food
prices.
Ms. Davids of Kansas. Yes, and I appreciate that there are
a multitude of issues. I do have a couple more questions. I
will submit them in writing. And the only thing I would say is
I would love to work with you and your team on finding any
hiccups that might exist in those interagency, inter-department
agreements that you have when you are looking at things like
supply chains.
Thank you so much. I yield back my time.
The Chairman [presiding.] The gentlelady yields back. I am
now pleased to recognize the gentleman from Missouri, Mr.
Alford, for 5 minutes of questioning.
Mr. Alford. Thank you, Mr. Chairman. I appreciate that.
Thank you, Mr. Secretary, for being here. I think you will be
glad to know that since we last met here a year ago, I boned up
on pesticides. I am a freshman. I am learning every day about
the ag industry and how we can help our farmers, ranchers,
producers in Missouri.
I have been learning a lot lately about SNAP. And I want to
be clear that I truly believe, Mr. Secretary, we live in the
greatest nation known to man. If someone is truly hungry, can't
work, we should help them on a temporary basis. And I know
Representative Moore has touched on the SNAP overpayments, but
I want to clarify just a few things with you today, Mr.
Secretary. Each day in America there are $30 million in
overpayments in SNAP, $11 billion a year. Do you consider
trying to eliminate overpayments, waste, abuse, and fraud as
making cuts to the SNAP program or taking food away from those
who rightly qualify for the program?
Secretary Vilsack. No.
Mr. Alford. Thank you for that answer. Supplemental
Nutritional Assistance Program is supposed to be a temporary
help for those who are truly in need. And of course, we know
the N stands for nutrition. Yet the second most common SNAP
purchase is sweetened drinks, $680 million, I believe, in 2022.
Today, the obesity rate in America is nearly 40 percent,
putting strain on an already stressed Medicare system. So, Mr.
Secretary, how do I go home to the 4th Congressional District
of Missouri and explain to my constituents and taxpayers there
why we are doing this? Why are we funding to worsen the obesity
crisis in America?
Secretary Vilsack. Well, Congressman, I think you have to
kind of dive deep into the utilization of those products. What
you are going to find, I think, in many cases is that that is a
substitute for caffeine, a less expensive substitute for
caffeine, with coffee and tea being more expensive. And many
families basically use it for that purpose.
What we try to do in the SNAP program is provide education.
We try to provide strategies for stretching that food dollar in
a way that focuses on proper nutrition without stigmatizing
those who are on SNAP.
Mr. Alford. Well, Mr. Secretary, I in no way want to
stigmatize anyone, but clearly, the educational portion of this
is not working. Our obesity rate is climbing through the roof.
We are at a financial crossroads now with Medicare and Social
Security, but this obesity issue I think can be directly
related in part to poor nutrition in America, and part of that
because of the Supplemental Nutritional Assistance Program.
Secretary Vilsack. Well, the challenge I think is--I don't
believe you are suggesting is, I hope you are not--that it is
only poor people that are obese or it is only
Mr. Alford. No, sir, I am not.
Secretary Vilsack. Okay.
Mr. Alford. No, sir.
Secretary Vilsack. Well, then, the question then becomes
what can we do as a country not necessarily stigmatizing or
setting aside one group of people, but recognizing the obesity
issue is something that is across the income levels, across
race, across the entire country.
Mr. Alford. I do appreciate that.
Secretary Vilsack. And that is----
Mr. Alford. That is a great answer. We have to focus in on
that. But taxpayers should not be paying to make America more
obese in my opinion.
Secretary Vilsack. Taxpayers----
Mr. Alford. Recently, Democratic Representative Jonathan
Jackson and Don Davis and I filed the FAIR Labels Act of 2024
(H.R. 7130, Fair and Accurate Ingredient Representation on
Labels Act of 2024) to ensure consumers are fully informed and
know the difference between meat from an animal and protein
grown in the lab or a petri dish. What is the USDA doing to
inform and protect consumers when it comes to making them aware
of what the truth is behind the sources of protein?
Secretary Vilsack. We are working on labeling to make sure
that they properly represent the product, the characteristics
of the product. We are working on labeling, just as we are
working on the product----
Mr. Alford. How soon will that come out, sir?
Secretary Vilsack. I don't want to give you a specific
timeline because I am not confident as I sit here that I know,
but I will certainly get that to you. We are working on it.
Mr. Alford. Okay. Thank you.
Secretary Vilsack. We are working--I will tell you, though,
that our priority is Product of the USA label, get that through
the process because we do recognize people were taking
advantage of that label, and consumers' expectations are not
being met. There is misrepresentation there. We want to make
sure that when you go to the grocery store, you see something
Product of the U.S., you know that everything was done----
Mr. Alford. Good, let's work together on that, sir.
Finally, should citizens of adversarial nations, including
Russia, China, Iran, Cuba, be allowed to purchase any land
including farmland in the United States of America?
Secretary Vilsack. That is a tough question, and I will
tell you why----
Mr. Alford. You have 20 seconds to answer it.
Secretary Vilsack. Well, I will tell you what, let me put
it this way. It is a tough question. I think the amount of land
that is being purchased by those folks is minimal. I think
people have this feeling that it is a lot of the land. It is
not.
Mr. Alford. I say one outhouse is too many for a member of
an----
Secretary Vilsack. Well, maybe----
Mr. Alford.--adversarial nation to buy in our precious
sovereign land----
Secretary Vilsack. Here is the problem, sir. Here is the
problem. You also want to sell product to those people, some of
those people. So when I am talking to the Chinese Ag Minister,
one of the first things he brings up is this whole notion of
Syngenta, Arkansas, and so forth. They are our number one
customer.
Mr. Alford. Can you go to Russia and buy land?
Secretary Vilsack. Forget Russia. I am talking about China.
I am----
Mr. Alford. Can you go to China?
Secretary Vilsack. I am talking about China.
Mr. Alford. You can't have a sponsor, but they have to have
51 percent----
Secretary Vilsack. No, you can't.
Mr. Alford.--sponsorship.
Secretary Vilsack. And that is how I responded. But the
reality is that----
Mr. Alford. I have gone over my time. I do thank you for
being here.
Secretary Vilsack. That is our number one----
Mr. Alford. Thank you.
Secretary Vilsack.--customer. We have to be sensitive to
that.
Mr. Alford. Thank you.
The Chairman. The gentleman's time has expired.
I am now pleased to recognize the gentlelady from Oregon,
Congresswoman Salinas, for 5 minutes of questioning.
Ms. Salinas. Thank you, Chairman Thompson. And thank you,
Secretary Vilsack, for your leadership at U.S. Department of
Agriculture. I just want to make a few clarifying points, given
my colleague from Missouri I think has some things mistaken.
USDA ERS research has actually shown that SNAP participants
purchase foods at rates similar to non-participants, and
studies that actually track the impact of SNAP on the physical
health of those recipients find that it is linked with improved
nutritional outcomes, lower healthcare costs, and improved
current and long-term health.
And nutrition incentives, as I am sure you are familiar
with, or what we call Double Up Bucks, those provided via
GusNIP are far more effective and productive. And would your
agency be willing to discuss how Congress might work together
to actually expand those programs?
Secretary Vilsack. Absolutely. We are excited about those
programs, and we appreciate the money that came from the
American Rescue Plan to do so to expand the programs.
Ms. Salinas. Thank you. Okay. Now on to some of my
questions for Oregon. Revitalizing rural America is of
particular importance to Oregon's 6th district, my district,
and since taking office, I have consistently heard from rural
towns and communities, as well as local producers and
landowners that all have a similar message. They are finding it
really hard to access the resources the Federal Government has
to offer and really because they may not have the wherewithal
to complete complex grant applications or follow up with
reporting requirements.
Unfortunately, the Rural Partners Network, which was
established to help communities with precisely this problem,
has not yet expanded to Oregon. And that is part of the reason
that I intend to soon introduce the Rural Partnership and
Prosperity Act (H.R. 7444), which was introduced over on the
Senate side by Senators Casey and Fischer (S. 3309). The
legislation would build on the Rural Partners Network via
project and technical assistance grants.
Putting that all aside for right now though, could you just
speak to the genesis of the Rural Partners Network and why it
is so critical to provide that technical assistance to our
rural communities so they can actually access programs intended
precisely for them?
Secretary Vilsack. That program is really designed and
specifically focused on persistently poor areas of the country,
areas that have had a high poverty rate for decades, and it is
designed to provide sort of intense care, intensive care, and a
coordinated Federal Government response to the persistent
poverty. We have asked for additional resources from Congress
to expand that program. To date, you all have not provided us
those additional resources.
Having said that, as a second wave of effort, we are
expanding significantly the technical assistance grants that we
are providing with some of our programs. In other words, we are
setting aside resources to create technical assistance for
those communities that need that so that we are trying to
expand it that way. We are using cooperative agreements.
The other issue that we face is the match requirement.
Oftentimes, communities would love to be able to participate,
but they get discouraged because of the match requirements. So
we are looking at ways in which we can distinguish between
communities that are capable of making the match and those that
aren't.
Ms. Salinas. Thank you. The Inflation Reduction Act
included $100 million for Wood Innovation Grants. Communities
throughout Oregon have benefited from these grants, and I have
introduced bipartisan legislation to actually increase access
to the program. Can you speak to how these grants can help
develop markets for forest products, as well as providing your
overall evaluation of the success of the program?
Secretary Vilsack. Well, it identifies ways in which wood
products can be used in creative ways. I think it is one of the
reasons we have seen an expansion of the cross-laminated timber
or mass timber effort. It started with a grant from one of
those programs, and now we have over several hundred, if not
over 1,000 of these tall buildings now being constructed in the
United States. So we give these grants in order to identify
market opportunities in order to be able to showcase how wood
can be used creatively. And we are seeing a pretty robust
interest in these innovation projects. We are making grants
every year, and we are seeing an up-tick, if you will, of
interest in wood and wood products.
Ms. Salinas. Thank you. And as the Ranking Member on the
Forestry Subcommittee, I am particularly concerned by the
dangers posed by increasingly intense wildfire events. And as
was mentioned, just several years ago in 2020, my state had its
most destructive and deadly wildfire season ever. And I fear
unless dramatic investments are made in prevention and
mitigation, we will see another catastrophic fire season in
Oregon and across the West.
As you know, the Bipartisan Infrastructure Law and the
Inflation Reduction Act provided significant resources in the
form of both new authority and new funding to the Forest
Service. Can you speak to how these authorities are better
enabling the agency to implement the 10 year strategy to
address the wildfire crisis?
Secretary Vilsack. We have been able to target and be able
to get adequate resources to remove hazardous fuel from
firesheds and from landscapes that we know have high-risk
potential.
Ms. Salinas. Thank you.
Secretary Vilsack. There is a much more extensive answer to
that, but that is the best I can do it in 5 seconds.
Ms. Salinas. Thank you. And that is my time. I yield back.
The Chairman. The gentlelady yields back. I am now pleased
to recognize, also from Oregon, Congresswoman Chavez-DeRemer
for 5 minutes of questioning.
Mrs. Chavez-DeRemer. Thank you, Mr. Chairman. Good to see
you, Mr. Secretary, and thank you for coming to testify today.
I know it has been a long day.
I have heard from an alarming number of constituents
concerned about illegal vehicular camping occurring with the
Deschutes National Forest in my district. These activities are
not only taking away vital public resources from my
constituents, but also leading to lasting environmental damage.
Around Phil's Trailhead and along China Hat Road, there have
been numerous reports of unsanctioned bonfires, trash dumping,
and burning, drug usage, dumping of human waste, trespassing
onto adjacent private property, as well as violent crime
throughout.
Not only is there a concern that there is no concrete plan
of action to address these concerns, but also I am told that
local volunteer organizations that are trying to work with the
Forest Service will no longer be deployed due to safety
concerns. Do you believe the current citation system is
effective, or are stronger enforcement mechanisms needed to
ensure that those that are trespassing will be held accountable
and stop the damage from getting worse?
Secretary Vilsack. Well, I think we need to look into that
particular set of issues. I am more than happy to do that.\4\
Thanks for bringing it to our attention. If there needs to be
stronger enforcement, we will also obviously take a look at
that. But in the meantime, let's figure out what we can do with
the specific concerns that you have expressed.
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\4\ The information referred to is located on p. 174.
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Mrs. Chavez-DeRemer. So you will commit to work with my
office and the local agencies to find the solutions that are
workable for us both?
Secretary Vilsack. Sure.
Mrs. Chavez-DeRemer. Thank you. I would also like to note
that my office is aware of the Northwest Forest Plan Federal
Advisory Committee planning session that recently happened in
Eugene, Oregon. The FAC was established to bring in different
perspectives to amend the Northwest Forest Plan. I would hope
that our office would be seen as a partner in any discussions
involving our Northwest forest areas and will be involved in
any future correspondence.
But moving on, it was recently discovered that a Chinese
billionaire--now I know my colleague mentioned these about
foreign ownership of U.S. farmland after an $85 million
purchase and nearly 200,000 acres of timberland in Oregon went
unchecked for nearly 10 years. Ownership of U.S. farmland by
foreign adversaries not only makes U.S. farmers and ranchers
uneasy about our nation's food security, but it also poses
serious concerns about the ability for the next generation of
farmers to access land and begin farming and ranching for
themselves.
I heard your answer previously, but, Mr. Secretary, do you
believe that there are effective enforcement mechanisms
existing within the USDA currently to ensure foreign land
ownership does not go unchecked, or are more enforcement
abilities needed within the USDA or another agency?
Secretary Vilsack. More is needed because right now, we
have a self-reporting system. There are over 3,000 county
recorder offices in the country. It is very difficult for USDA
to monitor all 3,000 county recorder offices for deeds that are
being filed. So I think there is a need for a conversation
about precisely how far folks want to go to be able to know
what transactions are taking place. Do you want a public
database where every transaction of real estate in this country
will be funneled into a single database that the Federal
Government will have access to?
Mrs. Chavez-DeRemer. Well, certainly to go unchecked. And
in this particular case, the purchaser was tied to the Chinese
Communist Party, and that is why I questioned that.
Secretary Vilsack. Sure.
Mrs. Chavez-DeRemer. So I do hope that we can move further
on this issue. I have a specific letter in to your office
asking that.
So let's move on. I want to highlight that in Oregon wheat
growers rely heavily on utilizing the Columbia Snake River
system, as 90 percent of Oregon wheat is exported and over 60
percent of all U.S. wheat is transported through the river
systems to markets overseas. This transportation method not
only is safe and efficient, but it also is cost-effective. Mr.
Secretary, if the Lower Snake River dams were to be breached
and we lose this valuable transportation system, do you believe
we will be able to continue to transport this volume of wheat
to meet the global market demands?
Secretary Vilsack. I think Congress has the ability to
determine whether or not a dam is going to be breached, and so
you would obviously have the ability to stop that if there was
a problem with agriculture.
Mrs. Chavez-DeRemer. But do you believe that if this
transportation is so valuable----
Secretary Vilsack. It is.
Mrs. Chavez-DeRemer.--would we be able to continue to
transport the wheat volume if those Lower Snake dams were
removed?
Secretary Vilsack. Well, I would assume that you wouldn't
let that happen.
Mrs. Chavez-DeRemer. I won't have time for this next
question on some labor questions, so I will submit it for the
record, Mr. Chairman. And with that, I yield back my time.
The Chairman. The gentlelady yields back. I now recognize
the gentleman from Illinois, Mr. Jackson, for 5 minutes.
Mr. Jackson of Illinois. Thank you, Chairman Thompson.
Great to see you again and glad we have reconvened.
Once again, Secretary Vilsack, I am honored to call you the
Secretary of Agriculture. I can rest well knowing there is
something in Washington that is working exceedingly well, and
that is your advocacy on behalf of all of Americans and our
food security.
Specifically, I would like to ask you about research has
shown that individuals in rural areas and small towns
participate in SNAP at higher rates than individuals in urban
areas. Additionally, USDA's Economic Research Service recently
found that SNAP benefit spending disproportionately increased
economic outputs in rural areas when compared to SNAP economic
output in urban areas. Can you address the misconception that
SNAP is a program predominantly utilized in cities and
elaborate on how SNAP supports rural communities and combats
food insecurity in rural areas?
Secretary Vilsack. Congressman, I think there are a lot of
misconceptions about SNAP, and I think it stems from who people
think are on SNAP. I think people find it surprising that a
significant number of people on SNAP are actually working. I
think most people outside of those of us who know about the
program think that it is all about people that aren't working.
In fact, it is people that are working. I think the belief that
there are a lot of folks who are able-bodied and should be
working.
The reality is that is a relatively small percentage of the
SNAP population. I don't think people realize that senior
citizens are a population in SNAP. People with disabilities are
in SNAP, working families are in SNAP, and a lot of children
are involved in that SNAP program. So I think it starts and
begins with the misunderstanding about who is receiving the
benefits of SNAP. And then from that you begin to think that
that must be an urban-centric group of people, but it is
absolutely not. It is across the country. It is wherever
poverty is, and poverty is everywhere.
Mr. Jackson of Illinois. And so a follow-up question on
that, you have heard the practice of corporations actually
steering people to these benefits on SNAP. Could you elaborate
on that?
Secretary Vilsack. There have been in the past companies
that have suggested or have encouraged or have made available
information about programs. I don't know if they are
aggressively suggesting people sign up, but making them aware
of. And I think that is part of the challenge. I mean, it is a
balance.
Mr. Jackson of Illinois. So can we conclude that there is a
struggle for American workers, and food insecurity is a major
issue within the country?
Secretary Vilsack. There is no doubt that there are many,
many, many working poor, working poor with an emphasis on
working, people who are working a part-time job, multiple part-
time jobs, or a full-time job at a minimum wage. And you know
this. If you raise the minimum wage, you would reduce the SNAP
population by a significant amount.
Mr. Jackson of Illinois. A follow-up question regarding the
economic benefits of SNAP. The USDA has been very successful in
getting more small businesses to participate in SNAP. Is there
anything Congress needs to do to support this work? Can you
elaborate more on how SNAP is benefiting our farmers,
retailers, and the overall economy, in addition to servicing
low-income households?
Secretary Vilsack. Well, the reality is if people have the
ability to buy more product at a grocery store, they are going
to do it. And when they do it, it means that everybody in that
supply chain, from the person who stocked it, to the person who
packaged it, to who processed it, who produced it, who
transported it, those jobs are all connected. And if you look
at some of the major retailers, you will find that a
significant percentage of their business is SNAP-oriented. So
if you take SNAP and you reduce it or you eliminate it, you are
obviously going to impact not just the poor families that are
receiving it, but you are also going to impact all those people
whose jobs are somewhat dependent on it.
Mr. Jackson of Illinois. Are there any other comments that
you care to make before I yield back my time, Mr. Secretary?
Secretary Vilsack. There a lot of comments I would like to
make, but I think I will just pass.
Mr. Jackson of Illinois. Well, I would like to say once
again, Mr. Vilsack, thank you for your many, many years of
service and your knowledge. And let it be recorded that you
have gone through this Committee numerous times. You have taken
all these questions really without notes. And you have been in
for 3 hours. You have gone without lunch, once again, as you
fight for American families. And thank you for your service
again.
Chairman Thompson, I yield back my time.
The Chairman. The gentleman yields back. I now recognize
the gentleman from California, Mr. LaMalfa, for 5 minutes.
Mr. LaMalfa. Thank you, Mr. Chairman.
Thank you, Secretary, for your time and effort here today
and what you do. I can't let that dam removal bit on the system
that Mrs. Chavez-DeRemer was talking about go by. Yes, that
will be very devastating for the shipping of crops in that
area, as it has been devastating in my northern California area
with the removal of the Klamath dams partly underway now and
the filth and stink and stench and muck that is moving down the
Klamath River ostensibly to be helping fish, the wildlife that
has been wiped out there. The fish, you see hundreds of dead
fish in the photos and deer that have been trapped out there
the Fish and Game (California Department of Fish and Wildlife)
had to shoot, all sorts of things going on with that.
And then also on the hit list--and that is devastating
agriculture in the Klamath Basin, as well as the water being
taken away from the Scott and Shasta Rivers down below. Also
the Eel River, where there is a dam slated to--on the hit list
there that will devastate part of wine country. So dam removal
is not something that Congress controls. Otherwise, we would
have put a stop to that. It is runaway agencies and
environmental groups.
So the issue with forestry in my district in the West, we
have suffered the Camp Fire a few years ago: 85 people lost
their lives in the Paradise area. And then the Dixie Fire a
couple years later, a million-acre fire, in addition to the
many hundreds of thousands of acres of fire, individual 100,000
acre fires. As you know, in the whole West, it is millions per
year.
So the issue comes down to what is Forest Service doing and
the other entities--but we are talking about Forest Service--on
Federal lands to get the job done? I know they, a couple years
ago, put out a concept of 20 million over 10 years of forest
treatment. Well, they have about 200 million acres in their
purview. So that would mean 2 million acres per year, over 200
million acres. That would take 100 years to cover that if they
were actually doing that.
So we have given tools in past farm bills and are trying to
enhance that in this current farm bill with more categorical
exclusions to help move the ball, but they haven't taken
advantage of it. As of recently, it only put a handful of them
out to move that. We have good demonstrations. We had a Tahoe
project some years ago that, when wildfire hit that, the fire
basically stopped where that treatment had happened, other
areas where treatment happened on private lands.
So, Secretary, what can we do to get the Forest Service to
act and stop the lengthy delays in the project planning process
and use these categorical exclusions as we are trying to
advance more so in the farm bill and make larger areas, 10,000,
15,000 acres, which is a drop in the bucket on the millions of
acres?
Secretary Vilsack. Well, first of all, Congressman, 85
percent of the work that is being done is being done under the
CE effort, so we are utilizing that tool on our ongoing,
regular, consistent basis.
Mr. LaMalfa. It looks good, but 85 percent of how much?
Secretary Vilsack. Well, 85 percent--well, last year, I
think we did 4.2 million acres. And not every acre of land,
obviously, is the same, so what we have been able to do is
identify where the risks are the highest. We have established
about 250 priority firesheds, where we are providing resources
for treatment because we see that as the highest risk. And each
year, we are making the mark and meeting the mark that we set
for treatment. And then we are following up in areas that had
been devastated in the past with reforestation efforts.
Mr. LaMalfa. But part of the problem is that in certain
situations, burned acres are counted as treatment, and so----
Secretary Vilsack. No----
Mr. LaMalfa.--when you are looking at the overall volume
that we have to do, we have millions of acres we have to get
done and chip--what I am getting at is we have to have the
private-sector--we have to use all possible tools, Good
Neighbor Authority, we need Tribes, we need local governments,
we need cooperation and not just----
Secretary Vilsack. All that is being done.
Mr. LaMalfa.--slow----
Secretary Vilsack. All those tools are being used in a very
extensive way.
Mr. LaMalfa. But to the volume, I am talking pace and
scale. We have to scale it up dramatically or we are going to
keep burning millions.
Let me shift quickly to the climate-smart. I am looking at
some of the figures on that. First of all, on the goals, what
are we hoping to reach? That is a 5 year program, right?
Secretary Vilsack. Correct.
Mr. LaMalfa. Okay. And it was funded by the IRA, right?
Secretary Vilsack. No. It was funded by----
Mr. LaMalfa. Well, there was a kick-in of money towards
that from the IRA, right?
Secretary Vilsack. No.
Mr. LaMalfa. CCC. All right, thank you. But there was an
influx of dollars to--anyway, what I am getting at, I see the
stated goal of 60 million metric tons of CO2. What
is our baseline? What percent of the atmosphere right now is
CO2?
Secretary Vilsack. I don't know what the percent is. The
idea here is isn't so much the specific amount. It is learning
what works and what doesn't work so that we can make sure that
in the future we are using resources, conservation resources in
the most effective----
Mr. LaMalfa. Okay. Tell me this then, because farmers are
going to have to change practices to participate, and they
could be frozen out----
Secretary Vilsack. No, no, no.
Mr. LaMalfa.--if everybody is doing this. I am a farmer in
my real life, too. I farm rice. And so basically, if
CO2 tie-up means no-till, I do not have that as an
option, whereas my neighboring crop might have no-till as an
option, I don't. So we are going to be left behind. Farmers
like the current conservation programs that are out there, EQIP
and the others, but this new one here is going to require them
to jump through hoops in order to maybe be competitive or not.
So just can you just close on that, and I will yield?
Secretary Vilsack. Can I----
Mr. LaMalfa. Go ahead.
Secretary Vilsack. Do you want me to respond?
Mr. LaMalfa. Please. Please, Secretary.
Secretary Vilsack. It is voluntary. It basically creates an
opportunity for us to learn what works and what doesn't work.
And it doesn't necessarily put people at a competitive
disadvantage at all because you also have the regular
conservation programs that they are utilizing. And it is not
requiring them to go through a series of hoops. In some cases,
it is actually paying them for what they are already doing. But
the idea here is to measure, monitor, and verify the results so
that we know what works and what doesn't work so that we don't
invest in what doesn't work.
Mr. LaMalfa. Okay. The CO2 number is .04 percent
in the atmosphere. I yield back.
The Chairman. Okay.
Mr. LaMalfa. Thank you.
The Chairman. The gentleman's time has expired. I now
recognize the gentleman from Illinois, Mr. Sorensen, for 5
minutes.
Mr. Sorensen. Thank you, Mr. Chairman.
As the only meteorologist in Congress, I knew the answer to
that. I couldn't help you, Mr. Secretary, sorry. But thank you
for taking the time. I know it has been a long day. And as a
meteorologist who worked in western Illinois for so long, I
tracked many of the storms that went over Mount Pleasant, Iowa.
I did want to talk about what producers back home are
talking about. They have underscored the need for regionally
specific data to help them identify the right conservation
practices for them that will improve soil health, build
resilience, and sequester more carbon, quite simply, being
smart with respect to changing climate.
My bipartisan bill, Advancing Research on Agricultural
Climate Impacts Act of 2023 (H.R. 5160), or ARACI, will help
the USDA develop a standardized methodology to monitor and
inventory regional soil carbon. It also establishes a national
soil carbon network so that farmers can access local data
without disclosing proprietary information to determine which
practices work best to improve soil health. Of the $20 billion
in Inflation Reduction Act conservation funding, $300 million
is designated to improve soil carbon measurement. So could you
provide details on how the $300 million has been spent thus far
to address soil carbon MMRV?
Secretary Vilsack. It has been set up in a multitude of
ways, Congressman, to establish basically not only a soil
carbon monitoring network, which is a series of pilots, a
series of locations across the country where we can do exactly
what you are asking us to do, to learn regionally what the
differences might be.
We are also setting up a greenhouse gas emission network to
do similar work. We are going to take information, try to
figure out are there better ways to manage the data, better
ways to use technology, better ways to use artificial
intelligence, and so forth, to be able to analyze the
information. And from that, we want to be able to convert that
into better tools and models for producers across the country
to be able to utilize so that they have a better sense for
their farm, for their operation what works and what doesn't
work. So there is a rather coordinated effort within USDA in a
number of mission areas to essentially use these resources to
get data, to analyze the data, and convert it into meaningful
tools for producers.
Mr. Sorensen. I want to turn to the interest in solar for
just a moment on agricultural land specifically, our
agrivoltaics. This is rapidly increasing as we strive to
achieve our renewable energy goals. However, I represent some
of the most fertile land in the world. I have producers today
that say, ``What are we supposed to do when we have an offer
for $1,200 an acre for solar on our farms?'' Mr. Secretary, can
you elaborate on some of the reasons why it is essential that
we develop sound regional guidance that identifies the best
practices for where we put solar in agriculture?
Secretary Vilsack. Well, I think it is an opportunity for
nonproductive land to be more productive, and so identifying
where that is and encouraging the location. One of the things
we are doing with our PACE and New ERA program was to have a
series of listening sessions to address this issue of where
does it make sense to have large-scale solar operations, and
where doesn't it make sense so that people are sensitive to
this.
I think it is also an issue of technology. What we are
learning now is that people are beginning to look at a
different configuration of solar farms so that you could
essentially have a solar farm and a livestock operation
simultaneously.
Mr. Sorensen. Right.
Secretary Vilsack. So I think there is a combination of
things that we need to be doing here.
Mr. Sorensen. There is so much ahead and the all-of-the-
above approach is important. Thank you, Mr. Secretary.
I want to conclude with this. Today, there is a significant
concern regarding the impact that proposed cuts by the House
GOP to the IRA conservation funding and Thrifty Food Plan
reevaluation will have on both small-town businesses and our
farm families. To my colleagues and my families back home,
raiding programs that invest in high-demand conservation and
nutrition initiatives like SNAP do not achieve a bipartisan
farm bill, but instead they hurt the people who are struggling
today.
Senate Majority Leader Chuck Schumer has committed to
finding billions of dollars outside of the Senate Agriculture
Committee's jurisdiction to help us pass a bipartisan farm bill
in the Senate. I urge my colleagues to bring this. Working
families across our country depend on it. Family farmers depend
on it. Kids depend on it. And, Mr. Secretary, it is my hope
that we can get a bipartisan farm bill across the finish line
because it is that important.
And, Mr. Chairman, I yield back.
The Chairman. The gentleman yields back. I now recognize
the gentleman from Wisconsin, the cheese king of Congress, Mr.
Van Orden----
Mr. Van Orden. That is correct.
The Chairman.--for 5 minutes.
Mr. Van Orden. Write that down, Mr. Secretary. Thank you,
Mr. Chairman. Thanks for coming. It has been a very long day.
And so what I would like to do is I just--I am a freshman,
so I am at the tail end of everything. So I just solicited a
bunch of my constituents, so these questions are coming
directly from my constituents. The first one is going to come
from Organic Valley, which is headquartered in La Farge,
Wisconsin. It is not some left coast thing. That is from the
middle of my district. It is awesome. And here is what they
want to ask you.
Secretary Vilsack, dairy is an economic engine for the
upper Midwest and provides bountiful nutrition for millions of
Americans. We are very glad that the House passed the Whole
Milk for Healthy Kids Act (H.R. 1147), which is awesome. We
need more milk options for schools and making sure that they
can have whole milk if they choose to. I am really interested
in solving the problems and leveraging private industry to make
investments in dairy.
One of the efforts USDA offers is the Dairy Business
Innovation Initiative, and these initiatives convene farmers,
industrial partners, academia to tackle production, processing,
marketing, and the marketing needs of the dairy industry
specific to each initiative's coverage area. Focused on
enhancing the capacity and vitality of the dairy industry, the
programs offer grants to industry participants.
We would like to know how strong is the demand for the
DBIs? And can you tell us how many projects are funded? That is
the first part. How many applications are received, the second
part. How much funding is requested by companies and farmers
applying, and how we are measuring the effectiveness of each
DBI?
Secretary Vilsack. I think I understand the question.
Mr. Van Orden. Yes.
Secretary Vilsack. And if I don't and I don't answer it, we
will be glad to get the answer.
Mr. Van Orden. Very well.
Secretary Vilsack. I believe there are four of these in the
country.
Mr. Van Orden. Yes.
Secretary Vilsack. We allocated $20 million to each of the
four.
Mr. Van Orden. Yes.
Secretary Vilsack. And they make decisions based on where
those resources need to be allocated.
Mr. Van Orden. Okay.
Secretary Vilsack. So they would have the information in
terms of the number of grants and specific investments.
Mr. Van Orden. Okay.
Secretary Vilsack. So, we don't control--once we give the
resources to the innovation center, it is the innovation center
that makes the determination.
Mr. Van Orden. So if we could get that information from
these guys later, or if you could help us do that, I would
appreciate it greatly.\5\
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\5\ The information referred to is located on p. 173.
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Here is the next one. We heard from our organic dairy
farmers and organic milk buyers that the Federal Milk Marketing
Orders offer no benefit or value for organic milk and have no
bearing on day-to-day organic milk prices. The most recent FMMO
hearings that concluded this past month did not review a
proposal to exempt organic milk from pooling obligations,
leaving hundreds of organic farmers frustrated and
disappointed. Is the USDA willing to hear a proposal and
establish a hearing on the role of organic milk in the Federal
Milk Marketing Orders?
Secretary Vilsack. I mean, the challenge is the
underpinning of a Milk Marketing Order is participation by
dairy producers. And I think it is a complicated question they
are asking that would require us to kind of think about ways in
which it wouldn't necessarily compromise or jeopardize the
traditional dairy producer if we were to set up a separate
program. We will see what happens with the Federal Milk
Marketing Order hearing that just concluded.
Mr. Van Orden. Yes.
Secretary Vilsack. Over 12,000 pages of transcript now
being reviewed.
Mr. Van Orden. And, sir, I have a couple more through the
guy, so this is from our hog producers. They are losing an
average of $30 per head due to high input costs. What can the
USDA do to support our hog producers to ensure that they can
pass on these operations to the next generation?
Secretary Vilsack. We continue to purchase pork through our
surplus programs. We continue to promote pork exports. I mean,
that is two ways of providing assistance and help.
Mr. Van Orden. Okay. And then where do you stand on Prop 12
in California?
Secretary Vilsack. Where do I stand on it?
Mr. Van Orden. What are your thoughts? I know it went to
the Supreme Court and said Congress should act. I agree with
the Supreme Court. We should be acting.
Secretary Vilsack. The problem is that essentially every
state can do this, and I think it is chaotic. It is going to be
chaotic.
Mr. Van Orden. Okay. And then the Wisconsin Farm Bureau
would like us to highlight, the change in dairy pricing for me
has negatively affected dairy farmers across the country, and
Wisconsin is losing about one dairy farm a day. Many of my
constituents are asking the USDA to use their emergency powers
to change the dairy pricing formula from the ``average of'' to
the ``higher of.'' No one has testified in opposition to
changing this formula. The USDA is considering making the
change through the FMMO hearing process that just concluded. We
talked about that. Unfortunately, they are on step 5 of 12 in
the process. Dairy farmers can't wait till 2025. Do you support
accelerating this process?
Secretary Vilsack. I am not prepared to answer that
question because I need to have a better understanding of
exactly what you are asking.
[The information referred to is located on p. 174.]
Mr. Van Orden. Okay.
Secretary Vilsack. What I would do is give you this, which
will provide you some information on how we are helping the
dairy industry----
Mr. Van Orden. Okay.
Secretary Vilsack.--the pretty significant amount of help
that we are----
Mr. Van Orden. Well, thank you, sir. And, Mr. Chairman, I
have several more questions I would like to enter for the
record. They are coming from our corn growers.
The Chairman. Without objection.
[The questions referred (Questions 3-5) to are located on
p. 221-222.]
Mr. Van Orden. All right. Thank you very much, sir, and I
yield back. Thank you for your time.
The Chairman. You are welcome. Now I am pleased to
recognize the gentlelady from Michigan, I have to say an early
cosponsor of Whole Milk for Healthy Kids, Congresswoman
Slotkin, for 5 minutes of questions.
Ms. Slotkin. Thank you, Mr. Chairman. You are almost done.
You are getting down to the dregs of us here, so almost out.
Mr. Secretary, you have answered it in a couple different
ways, but just to put a sharper point on it, my questions have
to do with this concept of foreign ownership of American land,
farmland. Last time you were here in March I asked you about
this. You pushed back that, in a state like Michigan, the
majority of foreign land is owned by the Canadians by far, the
Dutch, folks who are our friends. But since then, the GAO and
others have come out I think you have heard a bipartisan
concern about adversarial states, a very small handful of
states who we could have a potential problem with down the
road.
Myself and Representative Feenstra from this Committee put
together something that we tried to make real, which is that
when a foreign entity from an adversarial country tries to buy
farmland, they would just go through a national security
review. This is exactly what happens if farmland right now
wants to be sold to a foreign country of any kind next to a
military base. I am from the Department of Defense. So we have
a process, but it is just very limited.
How do you think about a process where we wouldn't be
clamping down and saying ``No'' unilaterally, but there would
be a national security review of the sale to foreigners of
farmland?
Secretary Vilsack. Yes, I have suggested that USDA ought to
be part of the CIFIUS (Committee on Foreign Investment in the
United States) process, which is an extension of your question.
I think that would be fine.
Ms. Slotkin. Okay. And part of that bill is giving you a
seat at the table on CIFIUS, which is our long-standing
process. I think it would be great if there was a bill that you
liked, and then we could push forward since I do think it is a
bipartisan issue.
The second question, from Michigan, our tagline now is we
are the most diverse agricultural state in the country with
regular access to water, right? That is our dig at California.
And because of that, you know that we have cherry farmers,
stone fruit farmers, asparagus, mint, we have a ton of smaller
farmers, not monocropping. And the number one issue they raise
with me when I sit with them is the cost, reliability, and
availability of labor, right? Our kids don't go and work on
farms anymore in the summer in the same ways. So getting that
H-2A program is vital for our farmers.
And they keep talking to me about the mandatory increases
in the wages for those coming to work on their farms, not that
they don't want people to make decent wages, but how are we
asking them to increase year over year when their profits
aren't going up, right, just kind of basic bake sale math? We
have talked with the Secretary of Labor about this. But can you
confirm, do you have any tools in your toolkit as the Secretary
of Agriculture that would be able to provide waivers, for
instance, for our smallest farms, for little guys who just
can't afford these increases?
Secretary Vilsack. We don't have that, but what we did do
is create this farm labor stabilization pilot with $63 million
from the American Rescue Plan and put it out there for
producers of all kinds and all sizes and all states. We got
over 300 applications for assistance. And we are in the process
of trying to figure out, among those 300 operations, who is
going to get resources. And what struck me in connection with
this was that most of the people applying wanted to have a
higher threshold in terms of wage levels, in terms of
healthcare, in terms of housing for their employees. We
expected them to go in sort of at the base level where the
costs would be significantly less, but we had more applications
at the higher level, which I thought was interesting.
Ms. Slotkin. Yes. But that program is closed, right? There
is not a relief program for current small farmers?
Secretary Vilsack. We don't have anything available as you
suggested.
Ms. Slotkin. Okay.
It is just hard, as someone who is in the Executive Branch
and a national security person, to understand that there is
literally no special authority to make very, very rare
decisions for the Secretary of Agriculture or the Secretary of
Labor, all these folks. You can understand how farmers feel
like it is a bureaucratic answer that, ``Well, we can't do
anything, we can't do anything.'' Are you sure there is not a
special authority that you have for waivers or to do something
more on this issue? Have you looked at every legal possibility?
Secretary Vilsack. I have.
Ms. Slotkin. Okay.
Secretary Vilsack. And I will tell you why it is
frustrating to have these questions asked.
Ms. Slotkin. Yes.
Secretary Vilsack. Because you all had the ability to get
this solved, and farmers had the ability to get this solved by
supporting the Farm Workforce Modernization Act of 2021, which
would have capped a level, but it didn't get through. Why
didn't it get through? Politics.
Ms. Slotkin. Yes. And I am a cosponsor of that bill. Okay.
Well, thank you for your attention to the issue, and thanks for
being here. I yield back.
The Chairman. The gentlelady--and for the record, it did
pass out of the House.
Secretary Vilsack. I know it did with a bipartisan vote,
bipartisan vote, and it had a majority of Members of the
Senate----
The Chairman. And it got hung up in the Senate.
Secretary Vilsack. It is frustrating.
The Chairman. Unfortunately, some of the more difficult
points were just a few, were not addressed in the Senate.
I am now pleased to recognize the gentleman from Ohio, Mr.
Miller, for 5 minutes.
Mr. Miller of Ohio. Thank you, Mr. Chairman and Ranking
Member. And, Mr. Secretary, it is good to see you again. I
remember the first comments you gave me that I am usually the
last person to go here, and you are a very patient young man.
Well, I got to tell you, Mr. Secretary, you are a very patient
Secretary, so thank you.
Agriculture is one of Ohio's largest industries, and our
state ranks 9th in the nation in the number of farms. However,
I have heard firsthand from farmers and livestock producers in
my Congressional district and through local leaders in my
Agriculture Advisory Council key concerns impacting farm
economies throughout the northeast Ohio region. More troubling
is the U.S. Department of Agriculture's most recent farm income
forecasts released just last week, indicating a 25.5 percent
decrease in farm income from 2023. And I know that was touched
on earlier.
Major priorities I have heard resound from our region's
farmers include strengthening the farm safety net, ensuring
viable access to risk management tools, incentive-based
conservation initiatives, innovative technology, research,
expanding biofuels, trade market promotion, safeguarding animal
health, USDA meat inspection partnerships, robust career
technical education, including training tools to lift the
underserved, and key areas to strengthen Ohio's farm economy.
I have several questions, including the rising agricultural
trade deficit of $30 billion and loss of trade opportunities
expanding crop markets through sustainable aviation fuels,
including my bipartisan, bicameral Farm to Fly Act of 2023
(H.R. 6271/S. 3637) and critical GREET modeling updates, and on
behalf of the Ohio Department of Agriculture, concerns related
to cost-share partnerships in meat inspections. If we are not
able to cover all of my questions today, which I know that we
are not, I am going to submit them. But I would respectfully
ask if you guys could give us a response in writing.
So trade, while international trade is critical to Ohio and
United States agricultural producers, USDA's most recent
outlook for the U.S. agricultural trade signaled the
agricultural trade deficit nearly doubled last year, rising to
$30 billion, straining the ability of U.S. producers to meet
global food demands. The USDA report detailed trade losses as
driven by reductions in grain and feed livestock, poultry, and
dairy exports. For this reason, I am working with several of my
colleagues, including Representatives Duarte, Craig, and
Feenstra, on a letter to you and Ambassador Tai seeking strong
U.S. leadership in global agricultural trade.
Mr. Secretary--finally, I get to the question. I am out of
breath. So, Mr. Secretary, for roughly 60 years, the U.S. ran
an agricultural trade surplus, while that is no longer the
case, and over 30 major U.S. farm organizations through the
President's Export Council have called to expand export market
opportunities for United States food and agriculture. Can you
please detail your plans to address this trade deficit and
empower American producers to remain leaders in the global
trade market?
Secretary Vilsack. We recently announced our regional
Agricultural Promotion Program designed to expand opportunities
in some of the lesser-known market opportunities, which we
think will allow us to diversify so we are no longer as totally
reliant on China. The reality is, when the Chinese economy
suffers, basically, exports suffer. When our economy is
stronger than any other economy in the industrialized world,
our consumers are able to purchase more, the world's consumers
are able to purchase less. That impacts exports.
The fact that we, for too many years, ignored our
infrastructure needs, allowed our competitors to catch up with
us, now we are trying to address the infrastructure needs. That
is also part of it. But we did put this RAPP program together
in an effort to try to invest in more presence, more trade
missions, more promotions, more ability to get the word out
about U.S. products. I think we will be cost-competitive, and I
think you are going to continue to see an up-tick in exports.
We did have record years in exports the last couple of years,
and I expect and anticipate that we will get that surplus back,
but it is going to take a year or two.
Mr. Miller of Ohio. Yes, and thank you for that detailed
answer. And I know you look at this through this lens--and I am
speculating, so I shouldn't speak for you or anybody else--but
with trade comes national security implications in terms of
strengthening our relationships with foreign countries. And all
I ask is that we continue to explore any of those opportunities
as the world is how it is right now, and looking to strengthen
our relationships with just people around the globe, I think,
is extremely beneficial.
I am just going to go right into what I talked about
earlier about agriculture and meat inspection cost-share. I am
just going to go right to the question, Mr. Secretary. Given
the critical nature of broadening meat inspection capabilities,
which I understand has been a priority to this Administration,
what options is USDA considering providing the maximum 50
percent reimbursement to state meat inspection programs?
Secretary Vilsack. Well, if we have a budget, we are in a
position to do more, so pass a budget.
Mr. Miller of Ohio. Well, I am going to go ahead and say
that is going to be an impossible task right now.
Secretary Vilsack. Okay.
Mr. Miller of Ohio. Second--actually, we are out of time,
Mr. Secretary. I have the questions. I will submit them to you.
Thank you for your time, and thank you for your patience.
Mr. Chairman, I yield back.
The Chairman. The gentleman yields back. I now recognizes
the gentleman from New York, Mr. Molinaro, for 5 minutes of
questioning.
Mr. Molinaro. Thank you, Mr. Chairman.
And thank you, Mr. Secretary. I was happy to have you visit
the east part of upstate New York's 19th Congressional
District. I would welcome you back to the west part of upstate
New York's 19th Congressional District, Cornell, I think, and a
lot of rural communities would love to have you visit.
I come from a local government background, and I continue
to hear from municipal leaders and community leaders about the
lack of access to technical assistance for rural development
grants through the USDA. You kind of addressed this, I think,
in a good-natured way. I would like to return to the question
though. By nature, rural development grants are intended to
support rural communities. And of course, in many cases, they
don't have the technical expertise or the staff or even the
time to fulfill those grant application requirements.
So right now, the USDA, as you know, continues to announce
new pools of funding available for everything from energy to
infrastructure, manufacturing, and beyond, but the fundamental
problem still exists. I think you recognize that small
municipalities and farmers don't have the capacity to access
these programs. And, sadly, funding is being distributed
unevenly and in many ways inefficiently. Could you discuss with
us why would USDA announce new initiatives, some authorized,
some not, without having the capacity to assist farmers and
municipalities? And how might that be remedied?
Secretary Vilsack. Well, with due respect, Congressman, I
don't think that is accurate. I think we have invested through
expanded cooperative agreements and contracts with a number of
organizations and entities that are helping farmers all across
the country being able to access programs and assist them in
basically applying for programs.
Mr. Molinaro. Yes, I don't think that this is anecdotal. It
is certainly not in New York. Farmers have consistently seen
the inability to access that technical assistance.
Secretary Vilsack. Well, we have literally over 100
organizations that we are contracting with on NRCS, 30
organizations that we are contracting with FSA, so the
assistance is there and the help is there. We are also, as part
of a number of the new initiatives we have set aside, as I said
earlier, a series of resources to be able to provide for
technical assistance.
And plus, I was a mayor of a small town, so I came from a
local government background also. And what I do know is that
many, many states have regional economic development councils,
councils of government that basically provide that service. I
am surprised that New York doesn't have those kinds of regional
local government assistance programs to basically help with the
grant writing. Have you--I mean, I don't know if--I can't
imagine that New York doesn't have those----
Mr. Molinaro. New York does not have an institution for
municipal assistance when it comes to grant writing. But I am
heartened to hear that you don't believe there is additional
need to meet those new initiatives. I just would say again
that, without question, farmers and communities have
consistently said this to me, certainly now in this role, but I
experienced it as a county executive and village mayor myself.
But----
Secretary Vilsack. Let me also say we are simplifying the
process. We have cut the application process, for example, for
loans in half. We have created a loan assistance program. We
are using technology on our website to maybe make it a little
bit easier, so we have simplified the program.
Mr. Molinaro. I appreciate that. I would encourage then the
continued earnest look at making those greater efficiencies.
And certainly, we will communicate where we think in the state,
certainly in New York, there are some concerns.
I did want to ask at least one other question. One area of
obvious concern for us in upstate New York is as it relates to
our dairy farms and fair milk pricing. With the recent
conclusion of the FMMO hearing, farmers are anxiously waiting
for final determination from the USDA with some optimism that
the Class I mover will be restored to the ``higher of'' the
pricing system. Can you provide to us any insight as to the
next steps for the USDA and estimated timeline for a decision
announcement?
Secretary Vilsack. An analysis of over 12,000 pages of
transcript, hundreds of exhibits needs to be analyzed and
reviewed by their folks at USDA, and the economists and so
forth at USDA. That is going to take some time, but our
expectation is that we are going to try to get this done this
year.
Mr. Molinaro. So your estimation is sometime within the
next 10 to 11 months?
Secretary Vilsack. Sooner than that probably.
Mr. Molinaro. Okay. I certainly would follow up as it is of
concern to obviously many farmers across America, but upstate
New York is struggling in this space as well.
With that, I will submit some additional questions, Mr.
Secretary. Again, you have an open invitation to visit the west
end of upstate New York. The folks at Cornell would love to see
you.
Secretary Vilsack. Thank you.
The Chairman. The gentleman yields back. I am now pleased
to recognize the gentlelady from Florida, Congresswoman
Cammack, for 5 minutes of questioning.
Mrs. Cammack. Well, thank you, Mr. Chairman. Thank you, Mr.
Secretary, for coming before the Committee.
I will jump right into it. As my colleagues and I, here on
this Committee, have repeatedly said, ``Food security is
national security,'' and it is important that we do everything
we can to support and protect American-grown products. Now, as
you know, unfair competition from foreign imports is a growing
problem for our producers. And specifically in Florida, without
seasonal or perishable protections, this is a growing concern.
We know that Mexico has unfair schemes targeting Florida
producers specifically. And I know that many of my colleagues
have raised similar issues on everything from peaches and honey
and apple juice from China to seafood from Russia, all of which
is ending up in American schools.
So, specifically, what is USDA doing to ensure that
American-grown products are being served in American schools?
And is there a requirement for American-grown products to be
used in schools?
Secretary Vilsack. There is a requirement that food that we
purchase has to be produced and processed and every aspect of
it being done in the U.S.
Mrs. Cammack. Okay. Now, what are you doing to ensure that
that is in fact happening? Because, as I have just laid out, we
are finding products from all over the world, from Russia and
China, et cetera, in our school systems.
Secretary Vilsack. Well, if you want to give us information
about the specific schools, we will be more than happy to take
a look at that specific circumstance. We have a process in
which we, through our Food and Nutrition Service, do the best
we can to ensure that the purchases are being made are
consistent with the rules and regulations of FNS.
Mrs. Cammack. So I will tell you what, by the end of the
quarter, you and I can have a conversation, and I will make
sure my team gets the data to yours, and we can go through
that.
[The information referred to is located on p. 173.]
Secretary Vilsack. Right. I would be very interested in the
names of the school districts that you have alluded to so that
we could take a deeper dive into that particular area.
Mrs. Cammack. Okay.
Perfect. Now, moving on, according to FSA staff, as of
February 9, there are currently 1,550 applications for ECP
assistance with the USDA that are either approved and not paid,
not approved, or still pending in the wake of Hurricanes Ian
and Idalia. Now, you and I have chatted about this offline, but
it has been a year and a half since Hurricane Ian and 6 months
since Idalia. While the local FSA staff has been very helpful,
the few that we have and we know that that is also an issue--
the ability to process these applications in the aftermath, it
is, simply put, just inadequate, and it is unacceptable. Mr.
Secretary, can you explain the delays in our producers getting
the assistance when they need it the most?
Secretary Vilsack. We are doing the very level best we can
to get the resources out. I mean, I know that you wanted to
ensure that the state would be allowed to do this block grant
process. And you know what, if you authorize it, if Congress
creates the opportunity for this, we will be more than happy to
utilize that program. But in the meantime, we are doing the
best we can with the resources that we have.
Mrs. Cammack. Well, and I will say there are certain
flexibilities and liberties that you as Secretary can take to
make programs a little bit more flexible and get the money out
the door faster, so I would encourage you to utilize that
authority.
In your written testimony, you mention that the Biden
Administration's historic investments have allowed USDA the
opportunity to ensure small- and mid-sized producers get a fair
shake. Those are your words. However, other agencies in this
Administration are proposing burdensome regulations and, if
finalized--and some of them already have been--that will
regulate these very producers that you are saying that you want
to protect, it is going to regulate them out of business. Some
examples of the regulations include Waters of the U.S., or
WOTUS as we call it; the effluent limitation guidelines and
standards for meat and poultry products; animal waste air
emissions reporting; the politicization of crop protection
tools; the SEC climate disclosure rule, just a few. Heck, I had
the Administrator of the EPA tell me to my face point blank
that he had no idea what contour terracing was or vegetative
filter strips were. And yet his agency is mandating them for
the producers that we are here to try to protect and support.
So, Mr. Secretary, from my vantage point it appears as
though other agencies in this Administration are playing in
USDA's sandbox, and they are wanting to dictate what producers
grow and how they do it. So instead of advocating for farmers
and ranchers as intended, USDA is laser-focused on expanding
and funding policies related to what they believe to be
climate-smart. Now, you have testified multiple times,
including before this very Committee, that you don't want other
agencies to tell you how to do your job. Yet at every other
opportunity, other agencies are telling our farmers and
ranchers how to do theirs.
So you end your written testimony asking if we are okay
losing another 400,000 family farms in the next 30 years.
However, over-regulation by the other agencies in this
Administration outside of USDA, they are on the path to do
exactly what your testimony is outlining. So instead of idly
standing by, I would encourage and implore you to take a very
active role within this Administration of which you serve to
advocate for farmers and ranchers not only in your Department,
but across the other agencies that are pushing our producers
out of business.
With that, Mr. Chairman, I am over my time. I yield back.
The Chairman. The gentlelady's time has expired. Seeing no
other questions to be asked by Members, before we adjourn
today, I want to offer my closing comments. Ranking Member
Scott had an unavoidable conflict and was not able to be here
for his closing comments.
First, Mr. Secretary, I want to thank you for joining us
today. Quite frankly, your mastery of the tremendous width and
breadth of the issues of agriculture, which is the industry
itself, it is so complex. There is so much there. And I know
you are to be commended and appreciated for your mastery of
that information. I think we share the same goal, that, at the
end of the day, we want a highly effective farm bill. I think
the case has been made for that. You have made the case for
that. Every Member on this Committee I talk with makes the case
for that.
And I think we have worked together to achieve from a
policy perspective that end goal. Where we disagree perhaps is,
quite frankly, we have to find a way to pay for it. And so it
is kind of a pipedream to--and it would be a shame, the good
bipartisan work that we have done. I want to thank our Members
for participation--we had almost everyone--and thank our staffs
for doing such a great job of putting this together.
I do question whoever is in charge of the heat in the room,
I don't know about you, but I am about frostbitten here.
So as I close, there are a few points I want to make. I
heard a number of times about, quote, ``the inability to pass a
farm bill.'' And I just have to say agriculture policy, the
agriculture industry takes teamwork, and we all need to be
working as a team. And, quite frankly, there are probably a lot
of reasons why we haven't got a farm bill done, let alone the
fact that this farm bill needs to pass--has to be--the Senate
has to take action and reconcile. That is hanging out there,
and I don't know how soon they are going to be ready.
But, that said, we are still waiting on USDA technical
assistance. We have at least a dozen requests that have been
submitted at least 6 months ago. We are still waiting. And we
have gotten great technical assistance, but they are still
pending from USDA, and we need to have that technical
assistance to make sure that we are on track with great policy,
highly effective policy. CBO has come along, but they still
have their work that they need to complete. And by law, we
can't really proceed without them.
And then, quite frankly, we have a syndrome that is going
on in this Committee and I would say in the Executive Branch,
we have funding denial. And I will come back to that. For the
record, this Committee has not been idle. Each Member here has
been invited to the countryside to hear from the very people
that we are charged to represent. And I have been very
appreciative and thankful for the bipartisan participation that
we have done over the past 3 years, thousands of miles,
meetings, roundtables, visits, as was illustrated today, on-
farm, seeing agriculture in action. And that is how you build a
great farm bill. You make it tri-partisan. It is Democrats,
Republicans, and quite frankly, the industry, and those are the
voices that we have brought to the table. We have actively
engaged our Members in a bipartisan way, have actively engaged
in roundtables and discussions to build a bipartisan product
when it comes to policy.
We have also heard today a lot of cherry-pick data points,
and there is a lot of data out there to pick from, I get that,
but attempts to paint the farm economy as positive, the
Department's own analysis shows a very different story. And
when you spend time with as many different farmers and
ranchers, key stakeholders in rural America, it is a different
story today. They are struggling.
I have also gathered that this Administration continues to
demonize farmers, frankly, of all sizes in cases where they do
not subscribe to a far-left climate agenda. Now, I think
hopefully everybody in this room and most people watching know
that, I appreciate the fact that our farmers and ranchers,
quite frankly, are climate champions. We don't give them credit
for what they do already. And I am all in favor of--and knowing
that American agriculture can be defined as science,
technology, and innovation. It is not static. It is dynamic,
and we will move it forward. And we will move forward with this
farm bill.
But the fact is that, to do that, there are good ways to do
that and there are ways that really aren't helping the American
farmer. Instead, this Administration is embracing continued
inflation, record costs for production. And I appreciate that
some of the things we have talked about have come down a little
bit, but they are not down to where they were to that in past
years and really what leads to the destruction of the
agriculture landscape. I guess that is a complex way of saying
the loss of those family farms that we have all noted that have
gone out of business and the threats to lose more in the
future.
I also heard that a historically uneventful market basket
update has been proudly manipulated to solely allow Democrats
to increase the welfare state. And the recently submitted chart
for the record from my colleague is disingenuous. Using a
distortion of CBO's data really is partisanship at best. For
those who will take the time--and it is not like there hasn't
been ample opportunity to read the proposal--by the way, the
only credible proposals put forward for funding this farm bill,
which includes being prescriptive, providing Article 1
authority in terms of--and not in an abusive way of how a
future Thrifty Food Plan is evaluated.
I heard so many times the word cuts when it comes to that
proposal for being prescriptive for the Thrifty Food Plan. What
is disingenuous is the leading factor in terms of hunger for
many families that are struggling really in poverty is the cost
of living, the impact of inflation, and just other factors,
supply chain disruptions, things that would drive up the cost
of living. Cost-of-living adjustments is not being taken away
in this proposal. That is the primary driver of increased costs
and financial burden on these families. It is disingenuous. And
that is being nice. I can think of a few other words of saying
that our proposal makes cuts.
And a lot of talk about USDA's climate-smart pilot, which,
quite frankly, would be better done not by using CCC, which
should be there to directly help our farmers who are challenged
financially, I would say that fits much better under what has
been rolled out by USDA under ``research.'' And I am pretty
confident there is a bipartisan consensus, we need to invest
more in research. I mean, we are still way ahead of our
competitors around the world, but they are spending more on an
annual basis, and they will soon catch us. And that is not
where we want to be with American agriculture. So I would say a
better route would have been to work with us through the
Research Title.
Quite frankly, it is a unilateral insertion of USDA into
the private marketplace, costing billions in taxpayer dollars
with zero metrics for success and zero transparency and a self-
imposed fiscal cliff. And that includes the IRA monies, 2031,
whatever is not spent, we hope it is all spent in an
accountable way as an investment, not just to get it out the
door. All those remaining dollars go away. The proposal we put
on the table means that by rolling it into the farm bill base,
that money for conservation would be there for farm bills in
2050 and 2055. It would continue to grow and increase
investments.
I am also frustrated by the fact of the lack of an answer,
but we will follow up personally with you on this. When asked
about the SUSTAINS Act, you talked about the interest. Well, we
know there is interest because that is how we built that piece
of legislation that President Biden signed, and that was 14
months ago. And if we are really serious about getting
investments into conservation, then we will want to bring the
private-sector to the table and I think will come in a big way.
But that is not going to happen until the regulations for
implementation are written. And in 14 months, at a time where
we all know that conservation is so important, it is too long.
To my friends on the other side of the aisle,
unfortunately, your leadership has been hesitant to share with
you how my proposed funding framework will actually help meet
your priorities. For example, your number one priority is to
reduce hunger. I agree that is incredibly important. And the
proposal, which I freely admit is a budget gimmick--I don't
understand how CBO gets $30 billion out of this--but it allows
us to provide SNAP to populations--we could actually expand
SNAP to populations that for decades have had limited or no
access to SNAP. So we actually can increase access to people
that have not been eligible for it. And, quite frankly, we
maintain it once again, the cost-of-living adjustments, which
means we are not cutting benefits. There is no intent to cut
benefits. I think that is exactly what reducing hunger means,
that expansion, and to do that and to be able to have that kind
of a pay-for.
And also what seems to not be translating is that if we put
this in place, the next Administration--and there will be at
some point a future Administration that may be more inclined. I
hope not because I am a big supporter, as you know, of the
Nutrition Title--that may be inclined to decimate individual
SNAP benefits. Our proposal for funding would prevent that from
occurring because it would be prescriptive, staying within the
lines.
Now, we have almost unanimous support for the doubling of
MAP and FMD, market access for our constituents directed by
Congress instead of at the whims of any Administration. All
Members appreciate the depth and breadth of conservation
programs, and we will reinvest the IRA to continue the great
work of our original conservationist, the farmer. But we want
to do that for more than a 10 year window. Research and
scholarships are given--scholars will be made available to
ensure our institutions have the tools to thrive.
So the list goes on and on. I would like to insert into the
record a list of Democratic priorities I have here somewhere--
here it is--sent to me by the New Dem Coalition. It is just one
example of the litany of requests that we are trying to
accommodate. This is a list of 125 bills or priorities, and it
does carry a significant price tag, billions of dollars. And it
will require the ability to move mandatory dollars into our
current baseline.\6\
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\6\ Editor's note: the fact sheet referred to is located on p. 105.
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So which is it? For all my colleagues, do you want your
priorities funded or not? We need to be at the table not just
on building great policy, which I think we have done over the
past number of years. We have to be at the table figuring out
how we fund those because without the funding, they are not
going to be a reality.
The funding framework I proposed is very thoughtful,
balanced, and will not disrupt existing programs or benefits. I
would argue in the long run they are actually going to be
beneficial for expanding the benefits that we see under these
programs. And the leadership, each and every person in your
leadership, says that these will not work--well, your
leadership says that these will not work, so, quite frankly,
send me your realistic pay-fors because blaming the Speaker
does not offer a real solution for our farmers, small or large,
or rural America.
And with that, under the Rules of the Committee, the record
of today's hearing will remain open for 10 calendar days to
receive additional materials and supplemental written responses
from the witness to any question posed by a Member.
This hearing of the Committee on Agriculture is adjourned.
[Whereupon, at 3:01 p.m., the Committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Chart by Hon. Glenn Thompson, a Representative in Congress
from Pennsylvania
Myth: Republicans are cutting SNAP.
Fact: In 2021, the Biden Administration completed an unchecked
update to the Thrifty Food Plan--which added $256 billion to the farm
bill baseline--now presents an opportunity for Congress to revisit its
initial intent as seen in the 2018 Farm Bill, and garner savings on the
official scorecard. To be clear, the Republican proposal does not cut,
decrease, or impact SNAP benefits.
Background: Section 4002 of the 2018 Farm Bill directed USDA to
update the Thrifty Food Plan--the market basket utilized to calculate
SNAP benefits--every 5 years. Although CBO projected that provision to
be cost neutral-based on more than 4 decades of precedent--the Biden
Administration manipulated the methodology and avoided commonsense
procedures, adding \1/4\ of $1 trillion to the SNAP baseline. Putting
modest guardrails on future updates of the TFP, while leaving the
annual cost-of-living adjustment in place, not only creates savings on
the CBO scorecard, but prevents any future Administration from
utilizing the TFP process to decimate benefits.
Does this look like a cut?

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

CBO Details About Baseline Projections for Selected Programs.
Supplemental Nutrition Assistance Program May 2023, March
2020 Outlooks.
______

Submitted Fact Sheet by Hon. Glenn Thompson, a Representative in
Congress from Pennsylvania

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Farm Bill Endorsements
The House Agriculture Committee has a long tradition of bipartisan
cooperation, which is the key ingredient to passing a farm bill into
law. We are pleased that the Committee is working to advance the goal
of a farm bill that supports agricultural producers, invests in rural
communities, supports American nutritional needs, and boosts American
agricultural competitiveness. The New Democrat Coalition's Farm Bill
Task Force \1\ will continue to collaborate with the Agriculture
Committee, House Leadership, and other stakeholders to produce a strong
and bipartisan package that meets the needs of American agricultural
producers and consumers. Building off of our five core policy
priorities \2\ for a farm bill, the New Dems will work to ensure that a
final farm bill includes the following endorsed legislation led or co-
led by New Dem Members:
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\1\ https://newdemocratcoalition.house.gov/policy/task-forces/farm-
bill.
\2\ https://newdemocratcoalition.house.gov/media-center/press-
releases/new-dems-endorse-five-core-policy-principles-for-the-farm-
bill.

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1. Invest in rural communities and rural broadband.

H.R. 4351,\3\ Rep. Stacey Plaskett (VI-AL)--Broadband
Internet for Small Ports Act. This bipartisan bill would
prioritize broadband grant and loan applications from small
ports in rural areas to be equal to those that are
developed with the participation of a nonprofit or
philanthropic organization.
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\3\ https://www.congress.gov/bill/118th-congress/house-bill/4351

H.R. 5203,\4\ Rep. Jennifer Wexton (VA-10)--AGRITOURISM
Act. This bipartisan bill establishes an office within the
Department of Agriculture to promote agritourism activities
and businesses.
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\4\ https://www.congress.gov/bill/118th-congress/house-bill/5203.

H.R. 1450,\5\ Rep. Derek Kilmer (WA-06)--Treating Tribes
and Counties as Good Neighbors Act. This bipartisan bill
revises the Good Neighbor Authority program to modify the
treatment of revenue from timber sale contracts under good
neighbor agreements to require Indian Tribes and counties
to retain revenue generated from timber sales under a good
neighbor agreement; and allows states, counties, and Indian
Tribes to use such revenue for authorized restoration
projects on non-Federal lands under a good neighbor
agreement.
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\5\ https://www.congress.gov/bill/118th-congress/house-bill/1450.

H.R. 2386,\6\ Rep. Derek Kilmer (WA-06), Rep. Annie Kuster
(NH-02)--Community Wood Facilities Assistance Act of 2023.
This bipartisan bill would strengthen and modernize the
Community Wood Energy and Wood Innovation Grant Program and
the Wood Innovations Grant Program.
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\6\ https://www.congress.gov/bill/118th-congress/house-bill/2386/
all-info.

H.R. 3238,\7\ Rep. Suzan DelBene (WA-01), Don Beyer (VA-
08), Jimmy Panetta (CA-19)--Affordable Housing Credit
Improvement Act. This bipartisan bill would amend Title 12
to increase LIHTC resources to address the urgent need for
additional affordable housing supply and economic
development in rural areas.
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\7\ https://www.congress.gov/bill/118th-congress/house-bill/3238/
cosponsors.

H.R. 2787,\8\ Rep. Terri Sewell (AL-07)--Rural
Decentralized Water Systems Reauthorization Act. This
bipartisan bill expands and strengthens the existing USDA
Rural Decentralized Water Systems Program to support low-
and moderate-income households' installation or upgrade of
water well and wastewater systems.
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\8\ https://www.congress.gov/bill/118th-congress/house-bill/2787.

H.R. 3809,\9\ Rep. Don Davis (NC-01), Rep. Angie Craig
(MN-02), Rep. Abigail Spanberger (VA-07)--Cybersecurity for
Rural Water Systems Act. This bipartisan bill would expand
the successful rural water circuit rider program to include
cybersecurity technical assistance and authorize funding to
hire a cybersecurity circuit rider for all 50 states.
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\9\ https://www.congress.gov/bill/118th-congress/house-bill/3809.

H.R. 5113,\10\ Rep. Derek Kilmer (WA-06)--REACH Our Tribes
Act. This bipartisan bill implements GAO recommendations
that USDA consult with Tribes on budgets and the farm bill,
share data on funds provided to Tribes, and streamline
economic development applications.
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\10\ https://www.congress.gov/bill/118th-congress/house-bill/5113.

H.R. 4713,\11\ Rep. Derek Kilmer (WA-06)--Rural Hospital
Technical Assistance Program Act. This bipartisan bill
codifies a rural hospital technical assistance program
under Rural Development.
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\11\ https://www.congress.gov/bill/118th-congress/house-bill/4713.

2. Address the modern nutritional needs of Americans and provide
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innovations for program efficiency.

H.R. 5048 \12\ (117th Congress, Reintroduction Expected),
Rep. Annie Kuster (NH-02), Rep. Jimmy Panetta (CA-19)--SNAP
Act of 2021. This bill allows for verbal signature for SNAP
forms via telephone.
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\12\ https://www.congress.gov/bill/117th-congress/house-bill/5048.

H.R. 652,\13\ Rep. Julia Brownley (CA-26), Rep. Annie
Kuster (NH-02)--Zero Food Waste Act. This bill directs the
Environmental Protection Agency to establish a grant
program to study and reduce food waste.
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\13\ https://www.congress.gov/bill/118th-congress/house-bill/652.

H.R. 4185,\14\ Rep. Kim Schrier (WA-08)--The Expanding
Access to (EAT) Healthy Foods from Local Farmers Act. This
bill will improve TEFAP by providing emergency feeding
organizations with better access to fresh, healthy food. It
will also create a permanent home for much of the work USDA
is currently piloting through the Local Food Purchase
Assistance Cooperative Agreement Program.
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\14\ https://www.congress.gov/bill/118th-congress/house-bill/4185.

H.R. 1230,\15\ Rep. Andre Carson (IN-07)--Food Deserts
Act. This bill would create USDA-funded, state-operated
revolving funds that will issue low-interest loans for the
operation of grocery stores in food deserts. The bill
ensures that recipients of these loans, including
nonprofit, for-profit and municipal entities, can provide
affordable, healthy food, including fresh produce and
staples like milk, bread, and meat.
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\15\ https://www.congress.gov/bill/118th-congress/house-bill/1230.

H.R. 3183,\16\ Rep. Josh Harder (CA-10), Rep. Jimmy
Panetta (CA-19), Rep. Jim Costa (CA-21), Rep. Kim Schrier
(WA-08)--EATS Act of 2023. This bill permanently expands
SNAP eligibility to college students.
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\16\ https://www.congress.gov/bill/118th-congress/house-bill/3183.

H.R. 706,\17\ Rep. Shontel Brown (OH-11)--SNAP Access for
Medically Vulnerable Children Act of 2023. This bill would
improve the Excess Medical Expense Deduction to include
children that suffer from one or more chronic conditions.
Under this bill, SNAP households could deduct allowable
expenses over $35 incurred by a sick child and, as a
result, may qualify for a higher SNAP benefit.
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\17\ https://www.congress.gov/bill/118th-congress/house-bill/706.

H.R. 4103,\18\ Rep. Shontel Brown (OH-11)--EBT Act. This
bill would make permanent a temporary protection from new
transaction fees first established in the 2018 Farm Bill.
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\18\ https://www.congress.gov/bill/118th-congress/house-bill/4103.

H.R. 1763,\19\ Rep. Jimmy Panetta (CA-19)--Military Family
Nutrition Act of 2023. This bipartisan bill would remove
the military's basic allowance for housing from income
calculations used to determine SNAP eligibility.
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\19\ https://www.congress.gov/bill/118th-congress/house-bill/1763.

3. Provide farmers, ranchers, and other landowners who feed and fuel
our nation with certainty from diversified income streams
and greater supports to beginner, young, and socially
---------------------------------------------------------------------------
disadvantaged producers.

H.R. 6003 \20\ (117th Congress, Reintroduction Expected),
Rep. Annie Kuster (NH-02)--Veteran and Beginning Farmers
Assistance Act. This bipartisan bill extends through FY
2028 and makes other changes to a technology transfer
program for assisting agricultural producers in rural
areas. Among the changes, the bill (1) incorporates a
specific focus on beginning, socially disadvantaged, and
veteran farmers and ranchers; and (2) expands the scope of
the assistance to include improving farm viability,
strengthening supply chains, and increasing resilience to
extreme weather through conservation practices.
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\20\ https://www.congress.gov/bill/117th-congress/house-bill/6003.

H.R. 4127,\21\ Rep. Jimmy Panetta (CA-19), Rep. Jim Costa
(CA-21)--Fair Access to Agriculture Disaster Programs Act.
This bipartisan bill changes the adjusted gross income for
USDA disaster programs, including exempting the $900,000
AGI limitation for the Emergency Assistance for Livestock
and Farm-Raised Fish Program (ELAP), Livestock Forage
Disaster Program (LFP), Livestock Indemnity Program (LIP),
Tree Assistance Program (TAP), and the Noninsured Crop
Disaster Assistance Program (NAP) for producers that get
75% of their income from farming or related farming
practices.
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\21\ https://www.congress.gov/bill/118th-congress/house-bill/4127/
text.

H.R. 4059,\22\ Rep. Elissa Slotkin (MI-07), Rep. Jimmy
Panetta (CA-19)--To include phosphate and potash on the
final list of critical minerals of the Department of the
Interior. This bipartisan bill will require DOI to add
Potash and Phosphate to the 2022 Critical Minerals list and
ask for permitting reform recommendations to increase
domestic production of the two minerals.
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\22\ https://www.congress.gov/bill/118th-congress/house-bill/4059/
text.

H.R. 1697,\23\ Rep. Don Davis (NC-01)--Promoting Precision
Agriculture Act of 2023. This bipartisan bill would
establish a partnership between the Federal Government and
the private-sector to create voluntary interconnectivity
standards and prioritize the cybersecurity needs for
precision agriculture technologies.
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\23\ https://www.congress.gov/bill/118th-congress/house-bill/1697.

H.R. 4173,\24\ Rep. Salud Carbajal (CA-24), Rep. Abigail
Spanberger (VA-07), Rep. Jim Costa (CA-21)--Advancing
Automation Research and Development in Agriculture Act.
This bipartisan bill would provide $20 million in annual
mandatory spending to establish a new, standalone program
that prioritizes mechanization and automation for specialty
crops. Such retraining could particularly emphasize
retraining production-oriented employees to operate and
maintain newly created machinery and systems to ensure the
workforce of tomorrow will be ready to operate the farms of
tomorrow.
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\24\ https://www.congress.gov/bill/118th-congress/house-bill/4173.

H.R. 3815,\25\ Rep. Chrissy Houlahan (PA-06)--Protecting
Mushroom Farmers Act. This bipartisan bill would require
the U.S. Department of Agriculture (USDA) to conduct a
study on the benefits of providing crop insurance for
mushroom farmers. This study would analyze various threats
to production, such as inclement weather and pests uniquely
harmful to mushrooms, and their impact on farmers' ability
to grow mushrooms and maintain profitability.
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\25\ https://www.congress.gov/bill/118th-congress/house-bill/3815.

H.R. 3755,\26\ Rep. Chrissy Houlahan (PA-06)--The
Industrial Hemp Act of 2023. This bipartisan bill would
create a separate classification for industrial hemp and
establish a framework that punishes bad actors.
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\26\ https://www.congress.gov/bill/118th-congress/house-bill/3755.

H.R. 3904,\27\ Rep. Angie Craig (MN-02)--Crop Insurance
for Future Farmers Act. This bipartisan bill supports young
and beginning farmers by expanding the definition of a
beginning farmer by 5 years. The current Farm Service
Agency definition gives ``Beginning Farmer'' status to
someone with 5 crop years or less and allows them to
qualify for a 10% subsidy. This legislation expands that
definition to the first 10 years and provides a 15% subsidy
for the first 5 years, with the remaining 5 years going
back down to a 10% subsidy. This additional subsidy will
help lower barriers to farming and make it more affordable
for newcomers.
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\27\ https://www.congress.gov/bill/118th-congress/house-bill/3904.

H.R. 5381,\28\ Rep. Kim Schrier (WA-08)--RNGR Support Act
of 2023. This bipartisan bill would codify and authorize
the RNGR program with its own budget line item and funding
and allow RNGR to serve as a convener of nursery, tree
improvement, and tree planting interests nationwide.
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\28\ https://www.congress.gov/bill/118th-congress/house-bill/5381.

No Bill Number, Rep. Gabe Vasquez (NM-02). Intends to file
the Ranching Without Red Tape Act to cut down on permitting
requirements for ranchers, and to introduce categorical
exclusions for ranchers to make minor range improvements
like fencelines, wells, and stock tanks without having to
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renegotiate their permits.

4. Ensure farmers and ranchers have access to world class research
and the resources necessary for successful trade promotion
and marketing in order to expand international markets.

H.R. 648,\29\ Jimmy Panetta (CA-19), Kim Schrier (WA-08),
Jim Costa (CA-21)--Agriculture Export Promotion Act of
2023. This bipartisan bill increases funding for export
promotion programs.
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\29\ https://www.congress.gov/bill/118th-congress/house-bill/648.

H.R. 679,\30\ Rep. Kim Schrier (WA-08), Rick Larsen (WA-
02)--To amend the Agricultural Research, Extension, and
Education Reform Act of 1998 to authorize the Secretary of
Agriculture to waive the matching funds requirement under
the specialty crop research initiative, and for other
purposes. This bipartisan bill would allow the Secretary of
Agriculture to waive the Specialty Crops Research
Initiative matching funds requirement.
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\30\ https://www.congress.gov/bill/118th-congress/house-bill/679.

H.R. 4135,\31\ Rep. Kim Schrier (WA-08), Rep. Deborah Ross
(NC-02)--AG RESEARCH Act. The AG RESEARCH Act provides $1
billion in mandatory funding over 5 years ($200 million
annually) plus an additional $1 billion authorization of
appropriations over 5 years for the Research Facilities
Act. The RFA funding will support competitive grants to
land-grant universities and non-land-grant colleges of
agriculture for facility construction, alteration,
acquisition, modernization, renovation, or remodeling.
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\31\ https://www.congress.gov/bill/118th-congress/house-bill/4135.

5. Recognize the Important Role the agriculture and forestry sector
continues to have on our local environment and the
opportunity the farm bill provides to build upon historic
investments in carbon sequestration and sustainable land
management, expand jobs in communities, and most
importantly, enhance and protect our food supply chain from
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the field to America's dinner table.

H.R. 3424,\32\ Rep. Annie Kuster (NH-02)--Forest
Conservation Easement Program Act of 2023. This bipartisan
bill would provide mandatory funding to purchase
development rights via conservation easements from private
and Tribal landowners. This program would replace and
expand the Healthy Forest Reserve Program and offer
flexibility in two easement options.
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\32\ https://www.congress.gov/bill/118th-congress/house-bill/3424.

H.R. 5051,\33\ Rep. Abigail Spanberger (VA-07)--Rural
Energy for America (REAP) Modernization Act of 2023. This
bipartisan bill would modify and provide additional funding
for the REAP program, and focus it on greenhouse gas
emission reduction.
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\33\ https://www.congress.gov/bill/118th-congress/house-bill/5051.

H.R. 2791\34\ (117th Congress, Reintroduction Expected),
Rep. Stacey Plaskett (VI-AL), Rep. Darren Soto (FL-09)--
Renewable Energy for Puerto Rico and the U.S. Virgin
Islands Act. This bipartisan bill creates a grant program
at the U.S. Department of Agriculture (USDA) for renewable
energy development in Puerto Rico and the U.S. Virgin
Islands.
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\34\ https://www.congress.gov/bill/117th-congress/house-bill/2791.

H.R. 3478,\35\ Rep. Sean Casten (IL-06), Rep. Elissa
Slotkin (MI-07)--Conservation Opportunity and Voluntary
Environment Resilience (COVER) Program Act. This bipartisan
bill creates a Good Steward Cover Crop Program to subsidize
farmers who use cover crops.
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\35\ https://www.congress.gov/bill/118th-congress/house-bill/3478.

H.R. 2429,\36\ Rep. Susie Lee (NV-03)--Open Access
Evapotranspiration Data Act. This bipartisan bill directs
the U.S. Geological Survey (USGS) to establish an Open
Access Evapotranspiration (OpenET) Data Program under which
the USGS shall provide for delivering satellite-based
evapotranspiration data to advance the quantification of
evaporation and consumptive water use. The bill defines
Evapotranspiration as the process by which water is
transferred from the land to the atmosphere by evaporation
from soil and other surfaces and transpiration from plants.
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\36\ https://www.congress.gov/bill/118th-congress/house-bill/2429.

H.R. 4018,\37\ Rep. Jim Costa (CA-21)--Headwaters
Protection Act. This bipartisan bill would make
improvements to the Watershed Protection Program and
reauthorize the program.
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\37\ https://www.congress.gov/bill/118th-congress/house-bill/4018.

H.R. 3867,\38\ Rep. Joe Morelle (NY-25), Rep. Chrissy
Houlahan (PA-06)--Spotted Lanternfly Research and
Development Act. This bipartisan bill would designate the
Spotted Lanternfly (SLF) as a high priority research and
extension initiative under the National Institute of Food
and Agriculture (NIFA). High priority designation would
authorize the Secretary of Agriculture to make competitive
grants available to colleges and universities for research
projects related to the mitigation of the SLF.
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\38\ https://www.congress.gov/bill/118th-congress/house-bill/3867.

H.R. 1645,\39\ Rep. Kim Schrier (WA-08)--Biochar Research
Network Act of 2023. This bipartisan bill establishes a
National Biochar Research Network to test the impact of
biochar across various soil types, application methods, and
climates to learn more about its capacity to benefit
farmers and the environment.
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\39\ https://www.congress.gov/bill/118th-congress/house-bill/1645.

H.R. 3990,\40\ Rep. Kim Schrier (WA-08)--Forest Data
Modernization Act. This bipartisan bill would modernize
data collection efforts of the USFS Forest Inventory and
Analysis (FIA) program to meet the needs of forestry
stakeholders to access standardized, high-quality data to
support sustainable forest management decisions.
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\40\ https://www.congress.gov/bill/118th-congress/house-bill/3990.

H.R. 4017,\41\ Rep. Jim Costa (CA-21)--Conservation
Improvement Act of 2023. This bill amends the Conservation
Reserve Program to increase participation and provide
producers with additional conservation tools.
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\41\ https://www.congress.gov/bill/118th-congress/house-bill/4017.

H.R. 5044,\42\ Rep. Andrea Salinas (OR-06)--Timber
Innovation for Building Rural Communities Act. This
bipartisan bill requires the USDA to establish a platform
for measuring, monitoring, verifying and reporting data
about the carbon impacts from forest management and wood
products, and establishes pilot programs for
demonstrations.
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\42\ https://www.congress.gov/bill/118th-congress/house-bill/5044.

H.R. 5043,\43\ Rep. Andrea Salinas (OR-06), Rep. Sean
Casten (IL-06)--Healthy Soils Healthy Climate Act of 2023.
This bill provides funding to expand the On-Farm Trials for
soil health through EQIP's Conservation Innovation Grants.
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\43\ https://www.congress.gov/bill/118th-congress/house-bill/5043.

H.R. 4327,\44\ Rep. Jim Costa (CA-21)--Converting our
Waste Sustainably (COWS) Act. This bipartisan bill would
create a standalone program for alternative manure
management conservation practices for dairy producers, and
support additional practices to help reduce methane
efforts.
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\44\ https://www.congress.gov/bill/118th-congress/house-bill/4327/
all-actions.

H.R. 3442 \45\ (117th Congress, Reintroduction expected),
Rep. Kim Schrier (WA-08)--National Prescribed Fire Act of
2021. This bipartisan bill would invest in hazardous fuels
management by increasing the pace and scale of prescribed
burns, create a technically skilled preseason controlled
burn workforce, and streamline smoke regulations in winter
months to reduce catastrophic fires and smoke in the
summer.
---------------------------------------------------------------------------
\45\ https://www.congress.gov/bill/117th-congress/house-bill/3442.

New Dems also believe that the Agriculture Committee should reject
efforts to undermine key nutrition programs like the Supplemental
Nutrition Assistance Program (SNAP), The Emergency Food Assistance
Program (TEFAP), the Commodity Supplemental Food Program (CSFP) and
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC). In particular, efforts that would make sweeping changes to
program eligibility or benefits would be counterproductive to the goal
of a bipartisan farm bill that can pass into law. It is imperative that
Americans not lose access to critical supports that keep them and their
families fed, healthy, and contributing to society.
Finally, we ask the Committee to oppose efforts to cut funding, or
otherwise undermine, critical Title II programs and technical
assistance within the U.S. Department of Agriculture (USDA). We ask you
to recognize the high demand for these programs among producers--and
the critical work our farmers, ranchers, and landowners are doing to
positively contribute to their local environment and community health--
by rejecting efforts to undermine these investments.
______

Submitted Report by Hon. Glenn Thompson, a Representative in Congress
from Pennsylvania
California's Proposition 12 and its Impacts on the Pork Industry \1\
---------------------------------------------------------------------------
\1\ Research report furnished to the National Pork Producers
Council. The views and opinions expressed here are solely those of the
author and do not represent views or opinions of any other
organization, regardless of affiliation.
---------------------------------------------------------------------------
Revised October 5, 2023
Barry K. Goodwin, Ph.D.
Executive Summary
This report provides a high-level overview of issues surrounding
California's Proposition 12. A challenge to the proposition reached the
U.S. Supreme Court, where the Court issued a decision on May 12, 2023,
that upheld the California law. As of Jan. 1, 2024, all breeding swine
farms will need formal Proposition 12 certification for wholesale
buyers and distributors to sell pork into the California market. Pork
products already in storage can be distributed until December 31, 2023,
although any pork produced after July 1, 2023 must be compliant. Among
other things, the proposition imposes new space requirements for
breeding sows. All covered pork products sold in California, with few
exceptions, must be sourced from the offspring of sows that have been
provided at least 24 square feet of usable floor space for each sow,
regardless of where the hogs are produced. Because California produces
only a small amount of the pork sold there, the proposition will impose
space requirements on hog producers across the nation. The costs of
these restrictions are widespread and extensive. Farmers face the costs
of renovation or the construction of new facilities. These costs are
made more significant by recent extreme increases in building costs.
Farmers will also face losses in productivity as they move to new
production and management systems. This lost productivity will be
especially acute in the short run, as the new systems are mastered. The
new production systems will lead to increased stress on breeding sows,
which in turn will lead to lower fertility and embryo survival rates.
The industry must maintain identity preservation and market
segmentations. This will involve considerable changes in the logistics
of pork product distribution. For many reasons, these costs will have a
more severe impact on smaller, independent operations. These operations
tend to be less efficient and have lower profit margins. Smaller
operations also have less access to the credit needed to finance
renovations and new construction. Thus, one important outcome of
Proposition 12 will be an increase in the exit of smaller hog
operations. The pork industry will become more concentrated with fewer
but bigger farm operations. The stresses placed upon the entire
production and marketing chain will also favor larger processors,
thereby leading to ever-increasing consolidation and concentration of
the industry. To the extent that certain segments of the consuming
market are willing to pay a premium for pork raised in accordance with
Proposition 12, producers choosing to adopt the required production
measures may realize new market opportunities through premiums for
compliant production. However, the free market will address these
issues without the mandates and costs imposed by Proposition 12, and
thus an optimal solution would have been to allow the marketplace to
allocate products that are differentiated by production practices.
Contents
The Costs of Proposition 12

Renovation and New Construction Costs
Producer Experiences

Producer A (Ohio)
Producer B (Iowa)
Producer C (Indiana)
Producer D (Pennsylvania)
Summary of Producer Opinions

Costs and Farm Size
Reductions in Available Space and Throughput
Farm Productivity Declines
Regulatory Overhead
Market Segmentation Costs

Processor Premiums
Concluding Remarks
California's Proposition 12 and its Impacts on the Pork Industry
Proposition 12, the ``Prevention of Cruelty to Farm Animals'' Act,
was approved by California voters in 2018 and its provisions for hogs
will become effective on January 1, 2024. Implementation and
enforcement of the law was complicated by delays in the release of
final regulations describing details of the regulations and a
``prohibitory writ of mandate'' that temporarily stayed public and
private enforcement of the Act. On May 11, 2024, the U.S. Supreme Court
issued a writ of certiorari to the U.S. Court of Appeals for the Ninth
Circuit in which they supported the defendants and upheld the
proposition.\2\ The case, brought by the National Pork Producers
Council NPPC) and the American Farm Bureau Federation (AFBF), argued
that Proposition 12 violated the ``Dormant Commerce'' clause of the
Constitution that prohibits legislation that discriminates or
excessively burdens interstate commerce.
---------------------------------------------------------------------------
\2\ National Pork Producers Council et al. v. Ross et al., Case No.
20-55631 (9th Circuit Court of Appeals, 2021). The petitioners argued
that the proposition had the ``practical effect of controlling commerce
outside the State,'' even when those laws do not purposely discriminate
against out-of-state interests.
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The Act proposes to ``prevent animal cruelty by phasing out extreme
methods of farm animal confinement, which also threaten the health and
safety of California consumers and increase the risk of food-borne
illness and associated negative fiscal impacts on the State of
California.'' The new regulations mandate that all pork sold in
California, with limited exceptions, must be sourced from the offspring
of sows that have been provided at least 24 square feet of usable floor
space for each smv. Enclosures must be sufficiently large enough to
allow sows to turn around without touching the sides of the enclosure.
The regulations apply to any breeding pigs over 6 months of age and to
all whole pork meat marketed in the state, regardless of where it was
produced. The regulations exclude comminuted products containing more
than just pork and pork used in processed food products.
The next steps for industry and for legislative actions involving
animal welfare are unclear. Many legislative options are focused on
preventing a 50 state patchwork of conflicting state welfare laws. As I
discuss in this paper, the proposition will certainly bring about
significant changes to the structure of the pork industry. The
proposition will likely lead to renovation of existing hog farm
facilities and new construction of facilities that are compliant with
the proposition. The pork industry will need to segregate pork products
on the basis of compliance with the proposition. This segregation will
lead to increased marketing costs and will complicate the logistics of
pork marketing practices.
A limited number of exemptions apply to Proposition 12. The
restrictions do not apply for animals involved in transportation,
research, during individual treatments, and at slaughter. The space
requirements are also waived for 5 days prior to the expected farrowing
date, while sows are nursing, and temporarily during breeding
activities. It is also waived for hogs being treated by a licensed
veterinarian. These exemptions are limited to a maximum of 6 hours per
day, not to exceed 24 total hours over a 30 day period.
The limited nature of these exemptions has important implications
for breeding, farrowing, and nursing efficiency. These restrictions
will likely decrease the effectiveness of insemination services and
will likely diminish the overall health of recently farrowed piglets.
In a presumed effort to improve the welfare of sows, animals will be
intermingled to a much greater degree than is currently the practice.
As is true of most livestock animals, efforts to establish social
dominance when put into groups will lead to increased morbidity and
mortality, something even the state of California admits. Producers
that have adopted production practices consistent with the proposition
have already realized lower conception rates, lower farrowing rates,
and increased non-productive sow days. These effects have been
demonstrated in the research findings of animal scientists as well as
in the experiences of those farms with Proposition 12 compliant
facilities.\3\ As is often the case with such mandates, efforts to
promote the health and welfare of gestating sows appear to have the
opposite effect.
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\3\ See, for example, L.J. Johnston and Y.Z. Lee, 2013,
``Performance and Well-Being of Sows Housed in Pens Retrofitted from
Gestation Stalls,'' Journal of Animal Science, 91: 5937-5945.
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At present, California has a population of 39.2 million people, or
about 12% of the U.S. population. In December of 2021, California had a
hog inventory of about 85,000 head. In comparison, the U.S. had a hog
inventory of 74.9 million head, implying that California only has about
0.11% of the nation's total hog and pig inventory.\4\ Figure 1
illustrates the numbers of hog producing operations across the U.S. The
relative lack of hog production in California is notable. California
represents a growing market, with its population expanding by 5.1%
between 2010 and 2021.
---------------------------------------------------------------------------
\4\ Statistics taken from the USDA's National Agricultural
Statistics Service quick stats database.
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The consumption of pork products is not homogeneous across
different ethnic groups. Figure 2 illustrates total expenditures on
pork products by different demographic groups in the U.S. Consumption
is especially high for Hispanic and Asian ethnic groups. California's
population is diverse and ever evolving, with Hispanics or Latinos
accounting for 40.2% of the population and Asians accounting for 15.3%
of the population.\5\ These factors reinforce the importance of
California as a destination market for pork products produced across
the U.S. Nearly all pork consumed in California is produced outside of
the state.
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\5\ Population statistics taken from the U.S. Department of
Commerce's Census Bureau.
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As of February 2021, it was estimated that only about 4% of
existing U.S. hog farm facilities conformed to the Proposition 12 space
requirements, although the proposition has spurred the building and
renovation of compliant facilities.\6\ The industry standard sow
housing stalls currently average 14-20 square feet. Proposition 12 will
bring about significant disruptions and adjustments in the U.S. pork
industry and will require extensive renovation or new construction to
provide facilities that conform to the proposition's requirements.
---------------------------------------------------------------------------
\6\ See McCracken, C. ``US Pork Supply Chain Locked in Limbo as
Producers Await Legal Ruling,'' Rabobank Research, February 2021.
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Proposition 12 also has important implications for international
commerce. The U.S. Meat Export Federation (USMEF) has noted that
Proposition 12 presents significant logistical challenges for pork
exporters using California's port infrastructure and cold storage
facilities. The USMEF noted that in 2020, 2.977 million metric tons of
pork, valued at $7.72 billion, and representing 29% of total U.S. pork
production was exported, with almost 50% of exports transiting through
California ports.\7\ The Canadian Pork Board filed an amicus curiae
brief with the U.S. Supreme Court on October 21, 2021, arguing that
Proposition 12 has disruptive effects on international commerce and
violates the U.S.-Mexico-Canada Free Trade Agreement (USMCA) as well as
provisions of the WTO.\8\
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\7\ See the July 9, 2021 letter from Dan Halstrom to Elizabeth Cox,
available online at https://www.usmef.org/downloads/USMEF-Prop-12-
Comments-7-12-21.pdf.
\8\ See https://www.supremecourt.gov/DocketPDF/21/21-468/198155/
20211029124644558_21-468acCanadianPorkCouncil.pdf. The brief notes
that, in 2020, Canada exported more than 300,000 metric tons of pork to
the U.S.
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In addition to the Supreme Court case, the North American Meat
Institute (NAMI) filed a petition challenging the constitutionality of
the proposition.\9\ These challenges were in part also based upon
presumed violations of the Commerce Clause of the U.S. Constitution,
where it was argued that California's regulations have a negative
impact on the interstate commerce of other states. The regulations will
also create obstructions to competition from pork producers outside of
California. The petition was supported by 20 states, who filed amicus
curiae briefs in support of the litigation. On February 26, 2021, NAMI
unsuccessfully filed a petition with the U.S. Supreme Court to overturn
Proposition 12.
---------------------------------------------------------------------------
\9\ See North American Meat Institute v. Becerra, Case No. 2:19-CV-
08569-CAS (FFMx), United States District Court, C.D. California,
October 4, 2019. The appeal was denied on November 22, 2019.
---------------------------------------------------------------------------
California's Proposition 2, which expanded space requirements for
egg-laying hens, withstood similar legal challenges. As Proposition 2
demonstrated, these propositions most certainly have impacts on
interstate trade and the methods of production in other states. The
prominence of cage-free egg production rose substantially across the
U.S. as egg producers undertook structural changes to accommodate the
space requirements.
The objective of this article is to review the impacts and to
estimate the costs associated with implementation of Proposition 12.
Many of these costs, such as the costs associated with renovation of
existing facilities and construction of new facilities, are apparent.
However, other costs that. will affect the pork industry are less
obvious. For example, I note the potential impacts that. the new space
requirements will have on the efficiency of breeding and the physical
well-being of sows. Many of these costs have been considered in
existing evaluations of Proposition 12.
However, other subtle cost changes have received less attention in
the existing studies of Proposition 12. To the extent that the
Proposition creates a bifurcation of the market with pork products
segmented into those that are compliant and those that are not, the
entire marketing chain from processors to retailers will be tasked with
preserving the identity of pork products and effectively segmenting the
market to identify those products that are compliant from those that
are not.\10\ Past efforts at preserving the identity of differentiated
basic commodities such as corn and rice have proven to be both
expensive and difficult to maintain. These costs have both short-term
and long-term implications. A likely outcome in the long run will be
widespread adoption of production practices that conform to Proposition
12. Because such changes necessarily apply to long-lived assets in the
form of production facilities, full adjustment of the industry to
Proposition 12 is likely to take several years.
---------------------------------------------------------------------------
\10\ As one anonymous industry representative noted, this will
require doubling the number of stock-keeping units (SKUs) that the
industry will have to manage throughout the marketing chain.
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The Costs of Proposition 12
Proposition 12 will bring about fundamental changes in the
structure of the U.S. pork industry. Consumers in some states, with
California being a leading example, are becoming increasingly sensitive
to animal welfare issues. This has been shown to be especially true
among younger consumers, who typically express greater concerns for
animal welfare and environmental externalities.\11\ However, consumers
may not fully comprehend the nature and finer points of livestock
production systems or the likely impacts of legislated actions meant to
improve animal welfare.\12\ As existing facilities are replaced as a
normal course of business, it is likely that new designs that conform
to the types of animal welfare considerations reflected in Proposition
12 will be implemented, even if such facilities are significantly more
expensive.
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\11\ For example, researchers in Norway found that young consumers
tended to be significantly more concernedwith sustainability and animal
welfare (Norwegianscitechnews.com, 11-2022).
\12\ Proposition 12 also imposes space requirements for veal calves
(43 square feet) and egg-laying hens (1 square foot). The support of
consumers for any specific restriction, such as that applying solely to
hogs, is unclear and it is possible that consumer concerns about
specific production practices may be dominated by only certain types of
animals, such as veal calves and hens.
---------------------------------------------------------------------------
A major source of the costs of adjustment to such regulatory
changes relates to the uncertainty that these changes introduce to the
industry. California's animal welfare regulations have been upheld, but
the legislative actions of other states as well as those of the U.S.
Congress remain unclear. Uncertainty, by its very nature, introduces
tangible costs to any business operation. Alongside efforts to have the
restrictions overturned were several attempts to delay implementation
of the space requirements. The conditions imposed by Proposition 12
will be fully enforced beginning in January of 2024, though any pork
produced after July 1 must meet the conditions of the proposition. Many
farmers and much of the industry were hesitant to commit to such
fundamental changes if the likelihood and timing of the space
requirements were unclear. However, this uncertainty has been resolved
and many producers are already renovating existing facilities and
constructing new hog barns in order to conform to the proposition. The
implications for market demand and supply in the future are largely
unknown. This uncertainty includes consumer preferences for Proposition
12 compliant pork products. The additional willingness to pay for
compliant products is unknown and the overall impact on pork supply
likewise remains unclear.
Renovation and New Construction Costs
Renovation and new construction represent major irreversible
commitments requiring very significant investments. These costs are
exacerbated by the very active and volatile nature of construction
industries in the U.S. Building material costs increased significantly
as the U.S. economy emerged from pandemic quarantines. A February 22,
2022, Fortune article noted that lumber prices experienced a 227%
increase between August 2021 and February 2022, though prices have
returned to long-run normal levels since.\13\ Building materials have
realized considerably volatility in recent years. Crude oil, which is
an important ingredient in many construction materials, has risen by
over 250% since mid-2020. Figure 3 contains an illustration of real
prices of important building materials.\14\ The extreme volatility of
prices for building materials is apparent. Huge swings in lumber prices
were experienced, suggesting the possibility of the bubble noted by the
Fortune author. Asphalt prices, which are important in the construction
of roofing materials and paved surfaces, reflect the tremendous
increases in oil prices. Nearly all the relevant building materials are
at exaggerated levels relative to normal long-run price levels. Lumber
is an important exception although just a year ago lumber prices were
several times higher than current levels.
---------------------------------------------------------------------------
\13\ L. Lambert. ``We're In Another Lumber Bubble,'' Fortune,
February 22, 2022, available online at https://fortune.com/2022/02/22/
new-lumber-bubble-price-spike-british-columbia-board-feet/ (accessed
May 15, 2022).
\14\ Building materials prices were taken from the Bureau of Labor
Statistics' producer price indexes. The indexes were deflated using the
consumer price index from the same source and are normalized to a value
of 1.0 in January of 2004.
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Renovation and new construction typically require long-term credit.
Interest rates have risen significantly in recent months, adding to the
costs of renovation or new construction in order to comply with
Proposition 12. In August of 2023, the USDA Farm Service Agency
interest rate for direct farm operating loans was 4.875%.\15\ In May of
2021, this rate was 1.75%. The average bank prime loan rate rose from
3.25% in March 2022 to its current (August 2023) level of 8.25%. For a
$15 million loan financed for 10 years, this 5% change adds $4.48
million to total payments. Figure 4 illustrates the average 15 year
fixed mortgage rate for U.S. banks. Current levels surpass anything
realized in recent history.
---------------------------------------------------------------------------
\15\ It should be noted that these USDA guaranteed loans have a
limit of $400,000, which is a small proportion of the total costs of
constructing a new hog barn.
---------------------------------------------------------------------------
An important but less obvious cost associated with renovating or
constructing hog facilities arises from the irreversible nature of
construction. That is, in addition to the obvious cost of materials,
any new construction imposes a loss of option value for the investor.
If the restrictions associated with Proposition 12 are changed at some
future date, it is possible that facilities that were made to be
compatible with Proposition 12 may not satisfy the new
requirements.\16\ Further to this same point, because the imposition of
restrictions always has negative impacts on efficiency, relaxing of the
restrictions may leave producers that did invest in new facilities at a
competitive disadvantage.\17\
---------------------------------------------------------------------------
\16\ For example, Rule 901:12-9-02 of the Ohio Administrative Code
requires group housing for all pregnant sows by 2025 but allows for
breeding sow placement in individual stalls until pregnancy is
confirmed. Farmers have transitioned to the new standards in facility
design, but their new facilities will not satisfy the requirements of
Proposition 12.
\17\ An important engineering result--the Le Chatelier Principle--
holds that the imposition of restrictions on a profit-maximizing
producer will always lead to lower profits (or at least no higher
profits).
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I surveyed industry experts, academic research, and discussed costs
with several producers that had already converted their facilities to
be compliant with Proposition 12. It is important to recognize that the
costs of new construction and conversion of existing facilities vary
widely according to individual circumstances. Although the costs are
largely consistent across the alternative sources discussed below, each
case had its own unique conditions.
According to Hog Slat, Inc., as of August 2023, a newly constructed
shallow pit design farm that is Proposition 12 compliant would cost
$2,100-$2,800 per sow.\18\ An equivalent deep pit design would cost
approximately $2,600-$3,200 per sow. These cost figures do not include
excavation, utilities, roads, or wells. The costs of renovating an
existing farm to be compliant using only the existing barn space would
be $170-$750. This does not include the loss in throughput that such a
conversion would entail. Going from 18 ft\2\ to 24 ft\2\, for example,
necessarily results in a loss of throughput of about 25-30%.\19\ If a
farmer instead decides to add additional barn space to keep throughput
constant, the costs will be about $450-$850 for a shallow pit design
and $650-$1,050 for a deep pit design. There is significant variation
in what is being done by individual growers. Likewise, the starting
point in terms of equipment vintage and condition means that the costs
of conversion will differ significantly across farms.\20\
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\18\ Hog Slat, Inc. is a major producer and construction
coordinator for hog barns and associated facilities. Costs were
supplied by Mr. David Herring, who is Vice President and founder of the
firm.
\19\ Crate sizes vary across different facility arrangements, but a
typical arrangement is 2 ft. by 7 ft. or 14 sq. ft. At a sow price of
$48/cwt. (October 2, 2023), a 5,000 sow operation would suffer $324,000
in lost throughput per cycle.
\20\ Mr. Herring noted that renovation and conversion could range
in comparison terms from a ``Geo to a Cadillac.''
---------------------------------------------------------------------------
Renovation may be more costly than new construction due to
demolition, removal, and disposal costs and depending on the age and
condition of the facilities. Other estimates put the cost of new
gestation space at about $2,150 per space for Proposition 12 compliant
facilities as compared to $1,500 for standard gestation stalls--a 43%
difference in cost.\21\ Construction of a new facility covering the
farrow to wean period of production has been estimated to be about
$3,600 to $4,000 per sow. About 75% of that cost is associated with the
facility while 25% applies to land and infrastructure. Facilities that
are compliant with Proposition 12 are estimated to cost about 22% more
than conventional facilities. These costs vary substantially according
to the size of the operation. The above estimates apply to an operation
size of 5,200 sows. However, smaller operations will pay considerably
more per animal. A farm of 1,000 animals will have costs that are about
15% higher per animal. These costs are about 10% higher for a farm of
2,600 sows. This suggests that construction of a new deep pit design
facility that will allow 5,200 hogs to have the space requirements
mandated by Proposition 12 will cost about $16.6 million, not including
land and infrastructure (Herring, 2023 and the author's calculations).
---------------------------------------------------------------------------
\21\ Cost estimates taken from Compeer Financial presentation,
``Financial Cost of Proposition 12,'' October 25, 2021, and from
personal communication via email with David Herring, Vice President of
Hog Slat Incorporated, on August 16, 2023.
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Producer Experiences
To gain more specific information regarding compliant new
construction and renovation, I spoke with four producers that had
adopted Proposition 12 compliant production practices through
construction of new facilities and/or renovation of existing
facilities.\22\ Specific names and details of those interviewed are
withheld to maintain the anonymity of individuals.
---------------------------------------------------------------------------
\22\ Discussions with producers took place in August 2023.
---------------------------------------------------------------------------
Producer A (Ohio)
Producer A is in the process of breaking ground on a Proposition 12
compliant hog operation. This producer will operate two adjacent 2,500
hog farms, for a total of 5,000 sows. The budgeted amount and expected
cost for this new construction is $10 million. This does not include
any land or excavation costs. They initially considered renovation with
space being added to maintain throughput. This would have cost $3.3
million, or about $665 per sow. An important consideration in any
decision of whether to convert is the premiums that a processor might
offer for pork that is certified to be ``Proposition 12 Compliant.''
The costs of conversion must be weighed against the premiums, if any,
that compliant pork products will earn. This producer reported a wide
range of premiums that largely varied with the length of the production
contract.\23\ Premiums for compliant hogs typically ranged from $6-$10
per head. This producer had heard of premiums as low as $4 per head and
as high as $15 per head.
---------------------------------------------------------------------------
\23\ Nearly all hogs in the U.S. are produced and marketed under
contracts with processors.
---------------------------------------------------------------------------
Producer B (Iowa)
This producer is tearing down an existing facility and building a
new facility. A new gestation barn would cost about $1,700 per sow for
standard technologies and $2,300 per sow for compliant facilities,
though it was noted that a standard cost for new construction was
$4,000 per sow. Remodeling could have been accomplished for $1,000 to
$1,200 per sow if no additional space were to be added. This also
results in a 30% reduction in throughput, which must be added to the
cost of conversion. If new space was added to maintain the same level
of throughput, the cost would be about $1,550 to $1,700 per sow. If
productive assets are liquidated to make room for new technologies, the
opportunity cost of lost production must also be considered. Put
differently, a grower that foregoes conversion does not bear the cost
of conversion but also is able to continue to produce using current
assets.
Producer C (Indiana)
This producer was an early adopter of Proposition 12 compliant
technologies. They converted their facilities in January of 2022. Their
farm houses 10,000 sows. Their facilities were converted to be
compliant, and they did not have any new construction. They estimated
the costs to be about $3,000 per sow for new construction at the time
that they undertook facility conversions. Their facilities already had
loose sow housing systems, and in that case, the cost of conversion was
only $150 per sow, again demonstrating that the costs of converting
existing facilities to be compliant with the proposition depends
significantly on the starting point for any such conversions. They also
noted the value of manure as fertilizer on their farm. Any temporary or
permanent decrease in the size of the operation would cause a modest
loss of revenue from the value of manure. At the margin, they realized
about $80,000 from manure sales each year on their 10,000 sow farm.
This producer expressed strong concerns that the proposition should not
be viewed as a change that results in an overall decrease in the health
of sows. As I discuss in detail below, the group housing that
Proposition 12 will bring about often raises concerns about morbidity,
mortality, and decreased farrowing due to sow aggression in group pens.
This grower was adamant that any direct link between sow health and the
proposition should be interpreted with caution.
Producer D (Pennsylvania)
This producer manages a very large scale of production--about
40,000 sows--that has been converted to Proposition 12 compliant
technologies. They offered very precise estimates of the costs of
conversion of existing facilities, noting that the cost depends on the
starting point prior to conversion. If converting at the pre-implant
stage of production in crates that already meet the 24 sq. ft.
requirement, the costs were $81.19 per sow (on 24,126 sows where
conversion cost $1,958,890). For facilities at the pre-implant stage of
production with existing stalls of 21 sq. ft., the cost of conversion
was $207.71 per sow (for 17,760 sows with a total cost of $3,689,000).
For forms at the pre-implant and post-implant stages of production;
which accounted for 11,200 sows and with 20.5 sq. ft., the cost was
$2,500,000, or $223.21 per sow. This farmer did not have to convert any
fully crated farms but they were quoted $1,000 per sow for such
conversions. All such costs significantly depend upon the starting
point and the amount of preparation work required. For new facilities,
this producer estimated cost of $3,500-$4,000 per sow, depending upon
excavation and permitting cost.
Summary of Producer Opinions
Several points emerge from the preceding discussions with growers
that have already changed their operations to be compliant with
Proposition 12 or that are in the process of making the conversion. The
first is that there is a very wide range of costs associated with
making production changes to make an operation's hog output compliant
with the proposition. The costs of building a new gestation barn with
technologies that are compliant generally ranged from $3,600-$4,000 per
sow, although such costs do not include demolition, roads, wells,
utilities, land, excavation, and permitting costs. These costs are
likely to vary widely according to location and the existing
facilities, if any. In addition, construction costs have risen
significantly since these producers undertook construction and
renovation. If we assume a conservative 12.5% increase in the costs of
materials and labor for new construction, a facility that is fully
Proposition 12 compliant would cost about $4,500 per sow.\24\
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\24\ The final demand construction producer price index rose by
about 15% between January 2022 and August 2023.
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Renovation of existing facilities is also costly and, in some
cases, may cost more than building new facilities. Remodeling an
existing farm to be compliant with the proposition generally costs a
grower about $1,000 per sow, though depending on existing facilities,
the costs could be less than $100 per sow. However, once again, the
costs vary widely according to the existing facilities, especially the
size of existing crates. If a farm is at the standard size of sow
crates (14-21 sq. ft.) and if no new construction occurs, the farm will
realize a reduction in throughput of about 30%. For example; a 2,500
hog farm of the typical size would have to reduce its throughput to
about 1,665 because of the lost floor space.
To put these costs into context, consider construction of a 5,000
sow farm, which is a common size for a commercial hog farm. According
to the preceding discussions; this would cost about $18-$20 million. At
current interest rates (assume 6%) and if the farm's facilities have a
lifetime of 10 years (and an accompanying loan with a 10 year term),
the farm would have a loan payment of $222,000 per month and would pay
$26.64 million over the life of the loan. In comparison, a conventional
farm with non-compliant facilities would cost about $3,000 per sow.
Under the same loan terms, the farm would have a monthly payment of
$166,531 and the farmer would pay $19.9 million over the life of the
loan. The differences are substantial and illustrate the impact of high
interest rates.
Costs and Farm Size
The differences in construction costs across different sized hog
farms have important implications for how the industry will be impacted
by Proposition 12. Smaller farms will he more constrained by access to
capital and thinner margins. Figures 5 through 7 illustrate some
important differences in the financial situations of different sized
hog farms.\25\ The USDA segments farms according to annual sales. The
diagrams illustrate financial conditions for the following categories
of total annual farm sales--less than $100,000, $100,000-$249,999,
$250,000-$499,999, $500,000-$1 million, and over $1 million. The farms
considered are those for which their principal designation is as a hog
farm, meaning that the largest share of farm's value of production is
attributable to hogs.
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\25\ Statistics taken from the ARMS Data Analysis Resource (https:/
/my.data.ers.usda.gov/arms/data-analysis).
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The financial condition of a business operation is heavily
influenced by the availability and cost of borrowed capital. Figure 5
illustrates the leverage position (total debts over total assets) in
the top panel and the rate of return to equity in the bottom panel.
Each portion of the panels represents the development of financial
indicators across different economic classes of farms and the green bar
represents the average value over the 1995-2019 period. The first block
applies to all farms and then moving left to right, across increasingly
larger (by sales) classes of farms.
Hog operations tend to be much more highly leveraged than is the
case for other types of farms. According to the Economic Research
Service of the USDA, the debt to assets ratio for all U.S. farms
averaged about 8.2% in 2020. In contrast, the 2020 debt to asset ratio
for farms specializing in hog production is 22.5%. This demonstrates
the fact that hog farms tend to be more dependent on borrowed capital
than farms in general and that the leverage ratio tends to increase
with farm size. This is not surprising in that the high debt to asset
ratio reflects the fact that hog form facilities require a substantial
up-front capital investment and therefore hog farms require borrowed
capital to a greater degree than farms in general.
The lower panel of Figure 5 contains the rate of return to equity
for hog farms of various economic classes. The return to equity on hog
farms tends to be progressively lower for smaller farms, as reflected
in the value of production. This suggests that smaller farms realize a
lower return to investments and therefore will likely realize less
favorable terms of credit. This has important implications for the
ability of farms to undertake the significant capital investments that
conformity to Proposition 12 would require.
Figure 6 presents net farm income and the farms' operating profit
margin. Again, the financial standing of smaller farms tends to be much
less favorable than is the case for larger farms. The drop is
especially substantial when considering the smallest category of
farms--those with annual sales of less than $100,000. This smallest
category of farms tends to have net incomes that are close to zero and
operating profit margins that are significantly negative. Again, this
suggests that the smallest hog farms will be the least able to
undertake the changes that would make facilities conformable to
Proposition 12.
Finally, we consider two measures of hog farm efficiency. The first
is given by the ratio of net cash income to total cash expenses. The
second focuses on feed efficiency and is given by the ratio of
livestock sales to total feed expenditures. In both cases, the smallest
category of farms tends to be significantly less efficient, both in
terms of the total operation and in terms of feed efficiency. Overall
farming efficiency tends to be moderately higher as farm size
increases. In contrast, feed efficiency is similar across all economic
classes of hog farms except for the smallest farms, which are
substantially less efficient.
The review of hog farm financial conditions provides several
important insights that arc all consistent in the implication that
smaller farms will be impacted much more significantly than larger hog
farms. The statistics reveal that hog farms are much more highly
leveraged than farms in general and therefore are more dependent on
credit markets for their survival. Hog farms will be affected by recent
interest rate increases much more than other types of farms. Adopting
production processes and methods that are compatible with the
requirements of Proposition 12 will require substantial access to
borrowed capital. As noted above, the total investment involved in the
construction or renovation of facilities that conform to the space
requirements will be several million dollars, making access to credit a
critical variable in the long-run survival of hog farms. Creditors will
consider these financial ratios and variables when evaluating loans and
these evaluations are likely to be especially negative for the smallest
hog farms. These farms have the lowest relative incomes and profit
margins. The statistics also demonstrate that the smallest farms tend
to besignificantly less efficient: both in terms of overall returns
over expenses and in terms of theefficiency of hog feeding.
These economic facts have important implications for how
California's Proposition 12 is likely to impact the U.S. hog sector.
Concern over the economic viability of small and limited resource farms
continues to be an important factor shaping U.S. agricultural policy.
The sectoral changes that Proposition 12 is likely to trigger will be
unfavorable for smaller hog farms, who will have less access to credit
and who will be less able to undertake the investments necessary to
bring facilities into compliance with the space requirements of the
proposition. This will hasten the concentration of the hog farming
industry, with smaller farms exiting the sector, leaving a U.S. hog
industry that has fewer but larger farms. Those farms with thin
margins, which tend to be the smallest operations, will be the first to
exit the industry. Likewise, efficiency differences that favor larger
operations will play a role in smaller farms being the first to exit
the industry.
According to the 2017 Agrcultural Census, there are 58,180
independent hog farmers. These independent farmers had 24.9 million
hogs in inventory. Contractors and integrators and contract growers
numbered 8,259 and had 47.5 million hogs in inventory. Independent
growers with more than 2,000 hogs numbered 2,462 and had 22.2 million
hogs in inventory. In contrast, of the farms operated by contractors or
contractees, 5,862 farms had 2,000 or more hogs in inventory and
accounted for 29 million hogs. These statistics demonstrate that hog
farms with production contracts tend to be larger and account for a
larger share of hog production (inventory) than independent growers. It
is likely that the processors/integrators will be a driving force in
encouraging facility changes that conform to the proposition. I have
shown that larger farms tend to be more efficient and more profitable.
Thus, an obvious inference to emerge from this consideration of the
2017 census statistics suggests that the proposition will likely push
more farms to adopt production contracts. The proposition will
therefore hasten the transition from independent to contract growers.
Finally, a subtle cost factor that favors larger growers pertains
to delivery practices and the associated segregation of compliant and
non-compliant hogs. Larger growers can deliver larger loads of hogs
that are consistent in terms of their adherence to the requirements of
Proposition 12. A processor is better able to keep hogs segregated
according to their compliance when a large grower delivers a
significant volume of hogs. It may be more difficult to maintain
segregation when a processor is accepting numerous smaller loads of
hogs from a collection of small growers. This may influence the
premiums paid for hogs produced in compliance with the proposition.
Large growers may receive higher premiums because it is easier for
processors to take delivery and maintain segregation.\26\
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\26\ This point was raised by one of the large growers that I
interviewed for this study.
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Reductions in Available Space and Throughput
An obvious cost that will be borne by hog producers pertains to the
fact that an operation of a given size will suffer a reduction in
output when facilities are renovated to make the necessary space
available to sows. This space must be taken from existing uses.
According to a recent report by Rabobank, if stocking density is
reduced to meet the proposition's space requirements, production flows
will drop by at least 25%.\27\ This naturally implies a reduction in
herd sizes and a flood of new construction to meet the requirements.
According to the Rabobank report, to comply with Proposition 12, at
least 15% of U.S. hog producers will need to convert to the new
facility requirements.
---------------------------------------------------------------------------
\27\ See McCracken, C. ``US Pork Supply Chain Locked in Limbo as
Producers Await Legal Ruling,'' Rabobank Research, February 2021.
---------------------------------------------------------------------------
These changes will bring about costs associated with lost stall
space, which will reduce the overall output of facilities of a given
size that choose to convert. Estimates made by an anonymous industry
observer suggested that if there is no change in the size of a
gestation barn, renovations to make the facility compliant with
Proposition 12 will require a 25% reduction in the size of the sow
herd, a 6% reduction in the farrowing rate, and a 0.67 pig reduction in
pigs weaned per sow. These changes result in an additional cost of
$17.59 per pig because of reduced pig throughput. The extent to which
the processors and integrators agree to offer premiums for hogs grown
under the new requirements will be a major factor in determining the
adoption of the new production techniques.
Farm Productivity Declines
Although the space requirements are intended to improve the welfare
of pigs and hogs, there are many reasons to be concerned that changes
in sow housing arrangements will bring about added stress to the
animals. The existing science does not support the intentions of the
regulations--hogs will be worse off under the new restrictions. Mixing
animals together as would be common in many of the conversion
scenarios, will induce stress as animals compete for dominance and
feed. Animals are likely to fight, therefore causing increases in
morbidity and mortality. This in turn will also negatively impact
fertility and embryo survival rates. Competition for social dominance
in the new production methods is expected to increase sow mortality by
3-5%. The requirements of the proposition have limited exemptions for
sows undergoing breeding and this will necessarily increase the amount
of time that sows are housed together.
Research indicates that conversion to Proposition 12 compliant
production practices could bring about a drop in farming rates of 6-
10%. Feed costs will rise due to a drop in the productivity of sows.
These costs are estimated to he $0.72 per sow per unproductive day, or
an additional 5 pounds of feed per day for an additional 35 days. These
changes imply an additional cost per pig of $0.13-$0.22. Changes in
reproduction rates will decrease the number of pigs born per sow by
0.65 pigs, representing a cost of $2.46-$3.79 per pig.
Johnson and Li (2013) found that 97.6% of sows in stalls produced a
litter but only 92.2% of sows in group pens farrowed a litter.\28\
Similarly, 90.8% of sows in stalls completed the relevant study as
compared to only 84.2% of sows in large pens. Sows were removed from
the study due to poor milk production and poor reproductive
performance. Sows were also removed due to morbidity and mortality
losses, largely due to animal aggression. Large pens that did not
permit animals space to retreat realized the largest effects of sow
fighting.
---------------------------------------------------------------------------
\28\ L.J. Johnston and Y.Z. Lee, 2013, ``Performance and Well-Being
of Sows Housed in Pens Retrofitted from Gestation Stalls,'' Journal of
Animal Science, 91: 5937-5945.
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Although experience with these new production methods is limited,
one can be certain that conventional housing arrangements represent the
economic optimum, at least at the time the facilities were constructed.
Therefore, there are reasons to conclude that productivity will suffer
because of the proposition.
Productivity will also suffer because new production and management
systems take time to master. Hemsworth and Coleman (2011) found that
the skill of stock people can affect the performance and health of
sows.\29\ David Herring of Hog Slat, the leading facility construction
firm, estimated that production costs could increase by 5-8% in the
short run, until the new techniques are mastered by producers.\30\ An
anonymous producer that had adopted the new technology noted that the
learning period was much more expensive than they had expected and that
there is an inherent increase in the need to manage gestation animal
care in going to a higher percentage of sows in pens versus individual
stalls. Producers also noted that difficulties in mastering the new
techniques were very dependent on the quality of the hired staff.
---------------------------------------------------------------------------
\29\ P.H. Helmsworth and G.J. Coleman. 201. ``Stockperson Behavior
and Animal Behaviors,'' Human-Livestock Interactions: The Stockperson
and the Productivity and Welfare of Intensively Farmed Animals, 2nd
Edition CABI, Wallingford, UK, pp. 103-119.
\30\ Personal communication via email, April 11, 2021.
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Regulatory Overhead
The adoption and enforcement of new regulations always involves
additional regulatory costs. These costs will be borne by both
producers and consumers of pork. The enforcement process remains
unclear in many respects but is likely to involve auditors working as
third parties or on behalf of the California Department of Food and
Agriculture (CDFA), the regulatory agency responsible for enforcing the
restrictions of the proposition. The CDFA and California State
Department of Public Health have been jointly tasked with promulgating
the rules and regulations for the implementation of the proposition.
California's Health and Safety Code (HSC) Section 25993.1 states that a
business owner or operator must rely in good faith upon a written
certification by their supplier that pork was not derived from an
animal confined in a manner inconsistent with the proposition. The
California code provides for a $1,000 fine and 180 days of
incarceration for a violation of the proposition.
The current draft rule of the CDFA describes a certification
process that will be carried out by the CDFA or by a certifying agent,
who must be accredited by the CDFA. The regulations also require that
each producer and handler of pork hold a valid certification and that
any pork handler selling meat in California must be registered. The
proposition requires that all shipping invoices, bills of lading, and
shipping manifests for all shipments of whole pork meat entering the
state or transported within the state for commercial sale in California
shall include the statement ``California 24+ Compliant.'' These
additional requirements, taken as a whole, suggest rather substantial
increases in the cost of trading pork products.
One can imagine that the proposition will create a new industry of
third-party agents providing certification. This industry will
certainly involve costs that will be borne by California pork consumers
and producers providing pork to the California market. This regulatory
overhead is commonly referred to as ``deadweight costs'' by economists.
That is, costs that do not reflect benefits. From a scientific
perspective, the welfare of hogs will not be appreciably improved by
the restrictions and may, in fact, be diminished. California consumers
and pork buyers elsewhere may realize some benefit from the knowledge
that the pork that they are enjoying was derived from pigs that had
extra space. However, as previously noted, the restrictions also apply
to egg-laying hens and veal calves and the precise motives underlying
voters' intentions are unclear. Of course, third-party certification
agents will benefit from the new demand for their services.
These costs will be shared by pork consumers, retailers,
processors, and producers. It has been noted that a bifurcation of the
market whereby pork commands a premium in California but is made
cheaper outside of the state is likely to emerge in the short run. A
considerable volume of pork that is currently shipped to California
will instead be channeled to consumers in other states, thereby
lowering the price outside of California. Likewise, considering the
considerable volume of pork that is exported from the U.S., import
markets may also realize lower prices.\31\ High market segmentation
costs (discussed next) will likely encourage widespread adoption of the
standards as it may be cheaper overall to adopt the new standards for
all pork than to maintain separate markets for certified and non-
certified pork.
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\31\ The USDA's Foreign Agricultural Service (FAS) estimates that
26% of the projected U.S. production of 12.8 million tons will be
exported in 2021. See ``Livestock and Poultry: World Markets and
Trade,'' USDA-FAS, April 9, 2021.
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The difficulties imposed by Proposition 12 on the retailing
industry are illuminated in a recent response from the McDonalds' Board
of Directors to a letter to shareholders from financier Carl Ichan. Mr.
Ichan's letter asked the firm to commit to sourcing its pork from
suppliers that abide by Proposition 12's standards regardless of the
law's status. The response stated:

``McDonald's only sources approximately 1% of U.S. pork . . .
Mr. Icahn has asked for new commitments . . . requiring all of
McDonald's U.S. pork suppliers to move to `crate-free' pork and
set specific timeframes for doing so. The definition of `crate-
free,' conjured up by the Humane Society of the United States
(HSUS), is so obscure that it represents an extremely niche
market comprising less than 0.1% of U.S. pork production. This
presents a challenge of supply. What Mr. Icahn is demanding
from McDonald's and other companies is completely unfeasible.
Based on current estimates, McDonald's would require at least
300-400 times the animals housed today in `crate-free' systems
to keep our supply chain running. It also presents a cost
challenge. McDonald's today pays a premium to purchase group-
housed pork in accordance with our 2012 commitment. Sourcing
from this niche market . . . would significantly increase those
costs, placing a burden on all aspects of our business, our
supply chain and McDonald's customers, while lacking the broad
support of industry experts . . . his campaign would have one
certain outcome: a greater financial burden on customers.['']
\32\
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\32\ https://www.nationalhogfarmer.com/news/mcdonalds-responds-
icahns-call-eliminating-gestation-crates.
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Market Segmentation Costs
A bifurcated marketplace necessarily means that different qualities
of a commodity that may not be obvious to the consumer must be
identified and preserved throughout the marketing chain. Pork produced
from pigs raised on operations that satisfy the space requirements of
Proposition 12 must be identified and kept separate throughout the
entire marketing chain, from farm, to processor, wholesaler, and
retailer. Any agent in the marketing chain must be able to identify and
keep separate ``certified'' pork products, under penalty of law. A
concerned consumer must have confidence that the pork that they are
purchasing is sourced from operations that satisfy the space
requirements. Outside of a package label, consumers have no way of
discerning how the hogs that were processed into the pork products on
grocery shelves was produced.
At the processor level, logistical difficulties arc likely to arise
as compliant and noncompliant hogs are taken to the plant for
processing. The product must remain separated throughout all stages of
processing and eventually through packaging, wholesaling, and
retailing. It is likely that processors, especially large ones, may
find it more efficient to accept only one type of hog compliant or non-
compliant. This could close or complicate access to local markets for
certain producers, increasing their own logistical costs. This could
also force producers to adopt compliant production practices in order
to have access to the relevant processors. These logistical
complications may be especially acute for small producers, many of
which lack the means to simply adopt new technologies. These
complications could lead to a geographic bifurcation where local plants
only accept hogs produced with compliant (or non-compliant)
technologies. It is relevant to note that hogs, as a commodity, arc
costly to ship, making the location of plants an important factor in
the economic well-being of local producers.
This type of identity preservation may be especially difficult and
costly for operations that utilize bulk pork commodities. By their very
definition, such bulk commodities are typically homogeneous in quality
and may be highly processed prior to reaching the end consumer. Large-
scale food service operations often purchase very large amounts of
lower valued trim cuts, which may be commingled from a variety of
sources. For such operations, it will be costly to identify and segment
pork derived from hogs produced under the restrictions of Proposition
12.
The difficulties associated with maintaining identity preservation
have been demonstrated in the cases of corn and rice. A form of
genetically modified corn, known as Starlink, was not approved for
human consumption, and therefore had to be kept, separate from other
corn hybrids. A similar case arose for MIR-162, a genetically modified
corn hybrid from Syngenta that was not approved for sale in China. It
proved impossible to prevent these corn hybrids from being commingled
in the overall corn supply. Significant economic losses were realized
by the companies that manufactured the corn seed as well as throughout
the marketing chain. Prices to farmers dropped when portions of the
global market for commodity corn were closed due to commingling.
Numerous product recalls occurred, and agents throughout the marketing
chain realized significant economic losses due to the loss of important
markets for corn and commodities that were made from corn.
Questions arise in such cases as to who carries the liability
associated with violations of the regulations. It may be difficult to
ascertain exactly who is responsible for the loss of identity
preservation in cases of commingling or other inadvertent violations of
the space requirements. The logistics associated with ensuring that all
pork sold in California satisfies the proposition are complex. Such
complexity adds to the basic costs of business for merchants selling
pork in California and for processors and wholesalers supplying pork to
California. It is difficult to assign value to this additional
logistical burden, but the costs are most certainly substantial.
Processor Premiums
To this point, I have focused attention on the costs of making the
changes necessary to bring individual farms into compliance with the
space requirements mandated for sows by California's Proposition 12.
Because of the prominence of the California pork market and the fact
that pork production in California is minuscule relative to its
consumption, it is likely that many farms will have to undertake
renovation of existing facilities or construction of facilities that
are compliant with the proposition as existing facilities age out and
are replaced by new construction. I have also noted the changes in
market structure that will occur in response to the Supreme Court's
upholding of Proposition 12. Pork products will need to be
distinguished by whether (or not) they are compliant with the
proposition. The market will be bifurcated according to production
technologies. Growers will need additional compensation to encourage
the long-term investments that the proposition demands.
Herein lies a potential opportunity for compliant growers, albeit
one that the free-market is best suited to address. Food product
labeling that provides details regarding production practices (e.g.,
``cage-free,'' ``free-range,'' ``organic,'' etc.) may offer producers
new opportunities to differentiate their product.\33\ Some producers
that have adopted production practices that are compliant with
Proposition 12 report premiums of $6-$10 per head, though the industry
is still negotiating premiums and industry-wide standards have yet to
be established. One producer noted that premiums tended to vary with
the length of the production contract, with longer contracts generating
higher premiums. Tyson and Hormel, two major pork processors, have
already announced that they will comply with Proposition 12.
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\33\ For example, Goodwin, Marra and Piggott (2016) found that food
products labeled as being ``GMO-Free'' cost an average of 73% more than
products lacking such a certification. See B.K. Goodwin, M.C. Marra,
and N.H. Piggott, ``The cost of a GMO-free market basket of food in the
United States,'' AgBioForum 19, No. 1, 2016.
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However, mandating all producers to comply, and therefore forcing
all consumers and industries in the entire marketing chain to comply,
would unnecessarily impose costs across the entire economy. The freedom
to choose product attributes is a hallmark of the free-market system
and legislation that enforces the opinions and attitudes of special
interests on everyone eliminates this choice and imposes costs on the
entire market. As the quote from McDonalds notes, a certain outcome of
Proposition 12 is a greater financial burden on customers.
Concluding Remarks
Proposition 12 stipulates that pork sold in California must be
sourced from sows that have at least 24 square feet of space in
breeding and finishing facilities. While the restrictions were to be
implemented on January 1, 2022, litigation temporarily delayed its
enforcement. The Supreme Court upheld the proposition and the
constraints become fully binding in 2024. As of Jan. 1, 2024, all
breeding swine farms will need formal Proposition 12 certification for
wholesale buyers and distributors to sell pork into the California
market. Pork products already in storage can be distributed until
December 31, 2023, although any pork produced after July 1 must be
compliant. Producers already in compliance can self-certify until
December 31, at which point they must be certified by an auditor
approved by the California Department of Food and Agriculture. Market
impacts will be gradual as pork already in the marketing chain will be
gradually exhausted.
The proposition will be costly to the production and marketing
chain for pork in the U.S. At present, only about 4% of facilities
satisfy the space requirements, though many growers are undertaking the
investments necessary to produce compliant pork products. The
uncertainty surrounding the implementation and enforcement of the
proposition led to a ``wait and see'' attitude by many in the pork
producing sector, but this uncertainty has now been resolved. Although
the details regarding implementation and enforcement have been
resolved, uncertainty still exists as to whether additional states will
adopt their own unique regulations and therefore whether producers will
be forced to comply with a 50 state patchwork of laws.
Renovation and new construction costs run into several millions of
dollars for the typical hog operation. Estimates of the cost of new
construction vary considerably but mostly ranged from $3,600-$4,000 per
sow in 2021. If we assume a 12.5% increase in the costs of materials
and labor for new construction, a new facility that is fully
Proposition 12 compliant would currently cost about $4,500 per sow.
Estimates of the cost to renovate existing facilities to be compliant
with the proposition vary widely and depend largely on the starting
point for the renovation. It may cost as little as $100 per sow or as
much as $1,000 per sow. In some cases, depending on the vintage of
existing facilities, it may be more costly to renovate than to build
new barns. Recent increases in the costs of construction and credit
have made renovation and new construction of compliant facilities even
more costly.
The impact of Proposition 12 will not be homogeneous across all hog
producers. In the short run, the market will be segmented and supplies
of pork in California will be constrained. This will result from a
shortage of compliant pork. At the same time, noncompliant pork that
once was sold in California will be relegated to the rest of the U.S.
market, depressing prices of pork everywhere except California, where
pork prices will rise substantially. Given the delays in resolving
legal challenges and in enforcing the regulations, these effects will
be modest. New construction will likely consider the increased space
requirement in new facility designs and in the long run much of the
industry is likely to become compliant with these restrictions.
As I have noted, the extent to which consumers comprehend animal
welfare issues and recognize the differences across different types of
livestock and production systems is unclear. More specifically,
consumers may not fully understand the nuances associated with
different livestock animals and their space needs. As is often the
case, regulatory initiatives that are promoted by special interests may
not be consistent with sound scientific evidence and the extent to
which voters arc able to separate emotional rhetoric from sound
scientific evidence is questionable.
The costs of the restrictions are widespread and extensive. Farmers
face the costs of renovation or the construction of new facilities.
These costs are currently exacerbated by significant increases in
building costs and the cost of credit. Farmers will face losses in
productivity as they move to new production and management systems.
This lost productivity will he especially acute in the short run, as
the new systems are mastered. The new production systems will lead to
increased stress on breeding sows, which in turn will lead to lower
fertility and embryo survival rates. The industry will be required to
maintain identity preservation and market segmentations. This will
involve considerable changes to the logistics of pork product
distribution.
These costs will have a more severe impact on smaller, independent
operations. As I have shown, these operations tend to be less efficient
and have lower profit margins. Smaller operations also have less access
to the credit needed to finance renovations and new construction. Thus,
one important outcome of Proposition 12 will be an increase in the exit
of smaller hog operations. The pork industry will become more
concentrated with fewer but bigger farm operations. The stresses placed
upon the entire production and marketing chain will also favor larger
processors, thereby leading to ever-increasing consolidation and
concentration of the industry.
This document provides a high-level summary of the expected impacts
of California's Proposition 12. Much greater research is needed to
address the impacts of the proposition on heterogeneous farm
operations, packers, wholesalers, and retailers. More in-depth
empirical research is needed to quantify the impacts of the regulations
and the long-term adjustments that the industry will realize. The costs
of the proposition will be significant and will impact the entire
marketing chain.
Figure 1. County-Level Counts of Hog Producing Establishments
Hog Operations: 3rd Quarter of 2020

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Bureau of Labor Statistics.
Figure 2. Evolution of Pork Consumption by U.S. Ethnic Groups

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: U.S. Consumer Expenditure Survey.
Figure 3. Price Indexes of Important Construction Materials
Real Price (January 2004 = 1.0)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Bureau of Labor Statistics.
Figure 4. 15-Year Fixed Mortgage Rates (Average of All U.S. Banks)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Federal Reserve Economic Data (FRED) System, St.
Louis Federal Reserve Bank.
Figure 5. Financial Condition Differences by Hog Farm Size (Economic
Class)
A. Debt to Asset Ratio

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

B. Rate of Return to Equity

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Unpublished Summary Statistics from the ARMS Survey
of USDA.
Figure 6. Financial Condition Differences by Hog Farm Size (Economic
Class)
A. Net Farm Income

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

B. Operating Profit Margin

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Unpublished Summary Statistics from the ARMS Survey
of USDA.
Figure 7. Financial Condition Differences by Hog Farm Size (Economic
Class)
A. Economic Efficiency

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

B. Feed Efficiency

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Unpublished Summary Statistics from the ARMS Survey
of USDA.
______

Submitted Article by Hon. Eric A. ``Rick'' Crawford, a Representative
in Congress from Arkansas

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://www.nytimes.com/2024/02/01/us/politics/biden-food-prices.html]
Biden Takes Aim at Grocery Chains Over Food Prices
President Biden has begun to accuse stores of overcharging
shoppers, as food costs remain a burden for consumers and a
political problem for the President.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

The economics and politics of grocery prices continue to
weigh on shoppers even as the rate of inflation is falling.
Credit. Brittany Greeson for The New York Times.

By Jim Tankersley,\1\ an economics reporter in Washington who covers
policy from the White House.
---------------------------------------------------------------------------
\1\ https://www.nytimes.com/by/jim-tankersley.

---------------------------------------------------------------------------
Feb. 1, 2024

President Biden, whose approval rating has suffered amid high
inflation, is beginning to pressure large grocery chains to slash food
prices for American consumers, accusing the stores of reaping excess
profits and ripping off shoppers.
``There are still too many corporations in America ripping people
off: price gouging, junk fees, greedflation, shrinkflation,'' Mr. Biden
said last week in South Carolina.\2\ Aides say those comments are a
preview of more pressure to come against grocery chains and other
companies that are maintaining higher-than-usual profit margins after a
period of rapid price growth.
---------------------------------------------------------------------------
\2\ https://www.whitehouse.gov/briefing-room/speeches-remarks/2024/
01/28/remarks-by-president-biden-at-a-political-event-at-south-
carolinas-first-in-the-nation-dinner-columbia-sc/.
---------------------------------------------------------------------------
Mr. Biden's public offensive reflects the political reality that,
while inflation is moderating, voters are angry about how much they are
paying at the grocery store, and that is weighing on Mr. Biden's
approval rating ahead of the 2024 election.
Economic research suggests \3\ the cost of eggs, milk and other
staples--which consumers buy far more frequently than big-ticket items
like furniture or electronics--play an outsize role in shaping
Americans' views of inflation. Those prices jumped more than 11 percent
in 2022 and five percent last year, amid a post-pandemic inflation
surge that was the nation's fastest burst of price increases in 4
decades.
---------------------------------------------------------------------------
\3\ https://www.nber.org/papers/w26237.
---------------------------------------------------------------------------
The rate of increase is slowing rapidly: In December, prices for
food consumed at home were up by just over one percent, according to
the Labor Department.\4\ But Administration officials say Mr. Biden is
keenly aware that prices remain too elevated for many families, even as
key items, like gasoline and household furnishings, are now cheaper
than they were at their post-pandemic peak.
---------------------------------------------------------------------------
\4\ https://fred.stlouisfed.org/series/CUSR0000SAF11.
---------------------------------------------------------------------------
And yet there is a general belief across Administration officials
and their allies that there is little else Mr. Biden could do
unilaterally to force grocery prices down quickly.
``It's hard to figure out what the short-term policy response is in
this situation,'' said Bharat Ramamurti, a former economic aide to Mr.
Biden and an author of a report on grocery-price inflation that the
progressive Groundwork Collaborative in Washington published on Friday.
``When you have something that is driven in part by supply
disruptions, what can you actually do to put downward pressure on
prices?'' he said.
The Federal Trade Commission is reviewing--and widely expected to
block--a merger between two large grocery-store chains, Kroger and
Albertsons. Opponents of the deal say it would reduce competition and
allow the merged company to charge shoppers higher prices. But blocking
that deal would do little to address the current price pop.
A Kroger executive on Thursday welcomed Mr. Biden's increased focus
on grocer profits, insisting that the merger would reduce costs for
customers.
``We agree with President Biden: Too many grocers in America have
increased margins in contrast to Kroger, who have reduced our margins
consistently for nearly 20 years to save customers billions,'' said
Keith Dailey, Kroger's group Vice President of Corporate Affairs and
Chief Sustainability Officer. ``Through our merger with Albertsons,
Kroger will lower prices for even more of America's consumers.''
A new analysis from the White House Council of Economic Advisers
suggests that elevated profit margins among large grocery retailers
could be contributing to the stubbornly high price of food on store
shelves. The analysis, which relies on Quarterly Financial Reports data
from the Census Bureau, found that food and beverage stores had
increased their margins by about two percentage points since the eve of
the pandemic, reaching their highest level in 2 decades.
Much of that increase came in 2021 and 2022, around the time that
other retailers--like clothing and sporting goods stores--also saw
profit margins jump. Grocery-store margins have stayed elevated, the
analysis finds, even as other retailers' margins have fallen back to
more normal levels based on recent history.
``President Biden has made clear that as input prices fall,
corporations should pass those savings on to consumers,'' Michael
Kikukawa, a White House spokesman, said this week.
Mr. Biden made a similar point last fall in a post on the social
media platform X.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://twitter.com/JoeBiden/status/
1730247565537390998?ref_src].

But the White House analysis also implies that increased grocery
profit margins do not come close to accounting for the price spikes
that grocery shoppers have experienced under Mr. Biden's tenure.
Grocery store margins are rising
Operating profit margin by type of retailer

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Notes: Operating margin defined as sales, receipts and
operating revenue as a share of operating expenses. Data shown
as four-quarter rolling average.
Source: Council of Economic Advisers.
By The New York Times.

Other research suggests additional forces--like consumer demand and
supply-chain disruptions--are a much bigger factor in the price
increases. A bout of avian flu caused egg prices to spike \5\ last
year, for example. And food producers, like soft-drink manufacturers,
have continued to raise prices \6\ even as their costs have declined,
leading to heady profit margins.
---------------------------------------------------------------------------
\5\ https://fred.stlouisfed.org/series/WPU017107.
\6\ https://www.nytimes.com/2023/12/11/business/economy/profit-
margins-inflation.html.
---------------------------------------------------------------------------
Researchers from the Federal Reserve Bank of Kansas City found last
year \7\ that strong job growth in the U.S. economy, and the wage gains
associated with a tight labor market, were key contributors to grocery-
price increases. Processed foods, like candy bars, account for \3/4\ of
recent grocery price increases, the researchers found.
---------------------------------------------------------------------------
\7\ https://www.kansascityfed.org/research/economic-bulletin/tight-
labor-markets-have-been-a-key-contributor-to-high-food-inflation/.
---------------------------------------------------------------------------
The tight labor market, they said, had resulted in higher costs for
producing and distributing those foods, ``which have been passed on to
consumers.''
Mr. Biden's Administration has tried several efforts to soothe
grocery price pressures,\8\ particularly on the supply side. The
Agriculture Department has spent hundreds of millions of dollars to
help companies expand in the meatpacking industry, which is dominated
by a handful of large players.
---------------------------------------------------------------------------
\8\ https://www.nytimes.com/2021/12/25/business/biden-
inflation.html.
---------------------------------------------------------------------------
The department also changed its calculations of Federal food
assistance benefits and adjusted them for inflation, effectively
increasing the value of food stamps for many low-income Americans. Mr.
Ramamurti and his co-authors, Elizabeth Pancotti and Clara Wilson,
calculate those increases have more than outweighed the increased cost
of groceries for 40 million families in recent years.
In an interview, Ms. Pancotti said the consumers feeling the most
pain from high food prices were the ones who earned just enough money
not to qualify for the food-stamp program, which is known as SNAP.
``You have this huge chunk of people in the middle who are low-
income, but not impoverished enough to get SNAP benefits, and paying 25
percent more'' for groceries, she said. ``At the end of the day, it
just doesn't reach enough people.''
The commission is also considering enforcement actions \9\ under a
nearly 90-year-old law, the Robinson-Patman Act, which requires
suppliers of retail goods to offer the same terms to every retailer
they sell to. Supporters of those enforcement actions say they would
drive down prices at smaller grocers, by ensuring they can buy items
for the same cost as large retailers.
---------------------------------------------------------------------------
\9\ https://www.nytimes.com/2023/05/29/opinion/inflation-groceries-
pricing-walmart.html.
---------------------------------------------------------------------------
Politically, though, big grocers make the most appealing target for
Mr. Biden. Aides are discussing how he can ramp up pressure on large
chains in the weeks and months to come.
``Americans, we're tired of being played for suckers,'' the
President said in South Carolina. ``And that's why we're going to keep
these guys--keep on them and get the prices down.''

Jim Tankersley \10\ writes about economic policy at the White
House and how it affects the country and the world. He has
covered the topic for more than a dozen years in Washington,
with a focus on the middle class. More about Jim
Tankersley.\11\
---------------------------------------------------------------------------
\10\ https://www.nytimes.com/by/jim-tankersley.
\11\ https://www.nytimes.com/by/jim-tankersley.
---------------------------------------------------------------------------
A version of this article appears in print on Feb. 3, 2024,
Section B, Page 1 of the New York edition with the headline:
Biden Aims To Decrease Prices Paid For Groceries.
______

Submitted Article by Hon. Scott DesJarlais, a Representative in
Congress from Tennessee

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

The views expressed by contributors are their own and not the view of
The Hill

[https://thehill.com/opinion/finance/4224015-fraud-is-gobbling-up-one-
fifth-of-snap-benefits-congress-must-act-to-stop-it/]
Fraud is gobbling up one-fifth of SNAP benefits; Congress must act to
stop it
By Andrew McClenahan and Dawn Royal, Opinion Contributors--09/28/23
9:30 a.m. ET

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
istock.

As the nation embarks on the essential task of crafting this year's
farm bill, a pressing matter demands our immediate attention:
fortifying program integrity within the Supplemental Nutrition
Assistance Program (SNAP).
The urgency to tackle fraud and abuse within this vital social
safety net cannot be overstated. While SNAP remains a lifeline for
millions of vulnerable Americans, its effectiveness and sustainability
hinge on our ability to uphold a high standard of anti-fraud measures.
SNAP has long stood as a cornerstone of our nation's commitment to
alleviating hunger and supporting low-income families. It extends
crucial aid to over 40 million individuals monthly, providing them
access to affordable and nutritious food. Nevertheless, recent reports
and studies have raised valid concerns about the prevalence of
fraudulent activities within the program. These activities not only
undermine its intended purpose but also erode public trust in
government welfare programs.
Efforts to combat fraud and abuse within SNAP should transcend
party lines. They reflect a shared responsibility to ensure the
efficient and effective use of taxpayer dollars. By allocating
resources toward program integrity measures, we can guarantee that
those genuinely in need receive assistance, while deterring those who
seek to exploit the system for personal gain.
One of the most immediate challenges is the issue of EBT skimming,
whereby criminals pilfer benefits from deserving SNAP recipients and
convert them to cash or make bulk purchases at major retail outlets.
Although card skimmers have long plagued ATM and credit card users,
this issue has recently evolved into a nationwide epidemic directly
targeting our most vulnerable citizens. While credit and debit cards
now incorporate advanced chip technology to thwart criminals attempting
to misuse ``white plastic'' materials, such as hotel keys, for
fraudulent purposes, SNAP remains vulnerable.
The safeguarding of vulnerable citizens commences with rigorous
identity verification. As attested by the United Council on Welfare
before Congress, SNAP stands as the last major government assistance
program lacking effective identity verification tools used globally.
Outdated rules, regulations, and a lax approach to anti-fraud measures
have led to international fraud organizations, terrorist groups, and
foreign nation-states taking advantage.
Transnational criminals can reprogram credit card point-of-sale
devices to mimic legitimate retailers. They employ massive bot attacks,
similar to distributed denial of service attacks on websites, to
conduct balance inquiries using scripted PIN numbers. The accounts with
matching cards and PIN numbers are promptly drained.
Another pertinent and substantial concern revolves around the
trafficking of SNAP benefits, whereby recipients themselves exchange
their benefits for cash or non-food items. This not only diverts
resources from their intended purpose, but also defeats the purpose of
the program, jeopardizing the health and well-being of program
beneficiaries.
The adage that ``it takes two to tango'' holds true here--
trafficking cannot occur without willing recipients and retailers.
According to USDA reports and activities, eliminating dishonest
retailers from the pool of 250,000 stores nationwide would require
nearly 3 decades. But the means and authority to begin vetting
retailers is lacking and must be provided through legislation.
The 2018 Farm Bill made strides in addressing this issue, but more
action is needed. More stringent penalties for traffickers and better
data sharing among Federal and state agencies can establish a stronger
deterrent against such fraudulent activities.
Technology plays a pivotal role in modernizing and enhancing
program integrity efforts. Investment in advanced data analytics and
digital verification systems can help detect anomalies and patterns
indicative of fraud. Through technological leverage, we can streamline
administrative burdens for both recipients and program administrators
while significantly bolstering our ability to identify and prevent
fraud, including identity fraud originating abroad.
This was the objective of the National Accuracy Clearinghouse, a
proven project that had been set to roll out to all states by the end
of 2021. Regrettably, the USDA chose an alternative pilot program that
is set to conclude in 2027.
We possess the ability to utilize data to diminish application
fraud, expedite benefits distribution to qualified individuals, and
maintain SNAP's status as the most effective government assistance
program. In the aftermath of the fraud that plagued pandemic relief
programs, Congress bears the responsibility to safeguard this
initiative. This entails enhancing information sharing and coordination
to create a more comprehensive and accurate assessment of an
individual's benefit eligibility, reducing the potential for fraudulent
claims to slip through the cracks.
Recently, the USDA Food and Nutrition Service disclosed the payment
error rate (PER) for all states. The PER forms a component of the
accountability checks and balances to ensure that state and county SNAP
agencies accurately determine eligibility and benefit amounts.
Regrettably, the national PER hit an all-time high this year at
11.54 percent, meaning that there is $34 million in overpayments daily.
Preventing this waste from funding our adversaries isn't a matter of
partisanship--it's a duty we all share as Americans.
Lastly, states must receive the funds and means to detect, prevent,
and prosecute fraud. This becomes challenging when the USDA allocates
only 0.05 percent of its budget to program integrity.
As legislators deliberate the components of this year's farm bill,
addressing program integrity within SNAP must retain a central position
in discussions. This year's farm bill provides an opportune moment to
reaffirm our commitment to combating fraud and abuse within SNAP,
ensuring its continued service as a lifeline for those in need.
Let us seize this moment to enact substantive reforms that
reinforce program integrity, underscoring our unwavering dedication to
a fair and equitable society for all.

Andrew McClenahan and Dawn Royal are board members of the
United Council on Welfare Fraud, the national professional
organization of Federal, state, and county welfare fraud
directors, investigators, analysts, and recovery specialists.
______

Submitted Article by Hon. Don Bacon, a Representative in Congress from
Nebraska

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://ndupress.ndu.edu/JFQ/Joint-Force-Quarterly-111/Article/
Article/3569549/weaponizing-wheat-how-strategic-competition-with-
russia-could-threaten-american/]

Joint Force Quarterly 111, 4th Quarter, October 2023
Weaponizing Wheat: How Strategic Competition With Russia Could Threaten
American Food Security
By Karl A. Scheuerman, Joint Force Quarterly 111

Lieutenant Colonel Karl A. Scheuerman, USAF, wrote this essay
while a student at the Dwight D. Eisenhower School for National
Security and Resource Strategy. It won the 2023 Secretary of
Defense National Security Essay Competition.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Mt. Hood and wheat fields near Dufur, Oregon, November 23,
2017 (Courtesy Jim Choate).

In the history of warfare, belligerents have often targeted food
supplies to force opponents into submission. However, in America's wars
over the last century, threats to domestic food security have been
minimal. In many ways, the United States enjoyed insulation from combat
conditions overseas that could have otherwise disrupted the country's
ability to feed itself. Complacency in relative isolation from
disruptive food shocks is no longer a luxury the United States can
afford. We are now in an era of increased globalization, where food
supply chains span the oceans. In addition, America faces the renewed
rise of strategic competition as China and Russia seek to replace U.S.
power across the globe. Given these new realities, timely evaluation of
potential vulnerabilities to American food production is necessary.
Among rising strategic competitors, Russia has explicitly
demonstrated a clear willingness to target food systems. In its current
war against Ukraine, the Russian military has relentlessly attacked
wheat supplies and production. Yet despite the critical importance
wheat plays as the foremost American dietary staple, its production is
indeed vulnerable to disruption should Russia choose to act. While a
full-scale conventional war with Russia is unlikely because of nuclear
deterrence, the Kremlin has repeatedly demonstrated a willingness to
disrupt foreign interests over the past several years, from election
interference to trade wars. Targeting the U.S. wheat industry could
become another preferred option for the Kremlin to wage adversarial
competition at a level below the threshold of armed conflict. Given the
emerging global security environment, the U.S. Government should
reevaluate current policies to ensure the resilience of the wheat
industry against this threat.
Wheat Is King in America
Grain plays an enormous role in feeding the world. Approximately 47
percent of all human caloric intake today comes from grains, and the
United States is a significant contributor to global grain supplies.\1\
According to the United Nations (UN) Food and Agriculture Organization,
the United States is the second largest grain producer in the world
(behind only China), producing over 450 million metric tons, which
represents 15 percent of the worldwide supply.\2\ Of all grains the
United States produces, Americans consume more wheat than any other,
making it the country's most essential food staple.\3\ U.S. farmers
raise greater volumes of corn and soybeans, but most of those
commodities are used for livestock feed and biofuels.\4\ Due to wheat's
central role in the American food system, consumer demand for products
derived from wheat is ``relatively stable and largely unaffected by
changes in wheat prices or disposable income,'' according to the U.S.
Department of Agriculture (USDA).\5\ As shown in figure 1, demand for
wheat in the United States continues to grow. Thus, wheat represents a
worthwhile case study in evaluating U.S. resiliency to food disruption
in the context of strategic competition, specifically with Russia.
---------------------------------------------------------------------------
\1\ Krishna Bahadur K.C. et al., ``When Too Much Isn't Enough: Does
Current Food Production Meet Global Nutritional Needs?'' PLoS ONE 13,
no. 10 (October 23, 2018), https://doi.org/10.1371/
journal.pone.0205683.
\2\ ``FAOSTAT: Crops and Livestock Products,'' Food and Agriculture
Organization of the United Nations (FAO), March 24, 2023, https://
www.fao.org/faostat/en/#data/QCL.
\3\ ``Wheat Sector at a Glance,'' U.S. Department of Agriculture
(USDA), May 5, 2023, https://www.ers.usda.gov/topics/crops/wheat/wheat-
sector-at-a-glance/.
\4\ ``Feedgrains Sector at a Glance,'' USDA, May 17, 2023, https://
www.ers.usda.gov/topics/crops/corn-and-other-feedgrains/feedgrains-
sector-at-a-glance/.
\5\ ``Wheat Sector at a Glance.''
---------------------------------------------------------------------------
Figure 1. U.S. Wheat Food Use, 1989/99-2022/23

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

(F) Denotes a forecast.
Source: USDA, National Agricultural Statistics Service: USDA
World Agricultural Board.

Some may find it hard to envision a scenario where the United
States would experience wheat shortages. However, recent examples of
modern countries suffering significant wheat production losses exist.
Russia, the world's largest wheat exporter, suffered extensive drought
and wildfires in 2011 and lost \1/3\ of its national wheat crop as a
result.\6\ China, the global leader in wheat production, suffered wheat
crop losses of up to 16 percent between 2000 and 2018 due to pests and
pathogens.\7\ Another breadbasket of the world, Ukraine, will likely
see its 2022-2023 wheat output decline by 41 percent compared to the
previous year because of the Russia-Ukraine war.\8\
---------------------------------------------------------------------------
\6\ Steve Baragona, ``2011 Food Price Spikes Helped Trigger Arab
Spring, Researchers Say,'' Voice of America, December 13, 2011, https:/
/www.voanews.com/a/article-2011-food-price-spikes-helped-trigger-arab-
spring-135576278/149523.html.
\7\ Qingqing Zhang, et al., ``Wheat Yield Losses from Pests and
Pathogens in China,'' Agriculture, Ecosystems, and Environment 326
(March 2022), https://doi.org/10.1016/j.agee.2021.107821.
\8\ ``World Agricultural Production,'' USDA, July 2022, https://
apps.fas.usda.gov/PSDOnline/Circulars/2022/07/production.pdf.
---------------------------------------------------------------------------
Implications of Domestic Wheat Shortages
If America were to experience wheat shortages, the implications
would be significant. As the United States is the third largest wheat
exporter on the global market, a drop in U.S. supplies would negatively
impact world food prices.\9\ Following the decline in Russian wheat
exports in 2011, food prices spiked and contributed to dramatic
instability in countries dependent on imports, helping give rise to the
Arab Spring.\10\ Trade partners, including key allies such as Japan and
South Korea, who rely on U.S. wheat imports would likely feel the pinch
most acutely in countering Russian and Chinese influence.
---------------------------------------------------------------------------
\9\ ``FAOSTAT.''
\10\ Baragona, ``2011 Food Price Spikes Helped Trigger Arab
Spring.''
---------------------------------------------------------------------------
But significant domestic concerns could pose a greater risk. In
1906, journalist Alfred Henry Lewis presciently stated, ``There are
only nine meals between mankind and anarchy.'' Unlike any other
commodity, food is the one we cannot survive without. If interruptions
to the food supply occurred, the public's confidence in future
availability might begin to erode, spreading fear. Those now living
below the poverty line would suffer the most, but even the broader
citizenry could start losing confidence in the government's ability to
provide basic needs, fueling an already tense and polarized domestic
political climate.
If disruptions affected U.S. wheat production, food substitutes
would play a role in softening the impact. However, given wheat's
primacy in our food system, the volume of substitutes needed could pose
major challenges. A national grain reserve, similar in concept to the
Strategic Petroleum Reserve, would be a logical buffer to mitigate
shortages, but unfortunately, no such reserve exists. Despite producing
more grain than any other country on earth, China has established a
national reserve that reportedly now contains at least 2 years' worth
of grain supplies should the country need it.\11\ The United States has
previously tried establishing a national grain reserve, most recently
with the Bill Emerson Humanitarian Trust. However, the trust sold off
its commodity holdings in response to food price spikes resulting from
the 2008 financial crisis and now only holds cash reserves to help pay
for famine relief needs abroad.\12\
---------------------------------------------------------------------------
\11\ Jamie Critelli and Gustavo Ferreira, ``Does China Have Enough
Food to Go to War? Practical Indicators for U.S. Military and Policy
Makers,'' Military Review 102, no. 4 (July-August 2022), 91.
\12\ ``The Bill Emerson Humanitarian Trust,'' U.S. Agency for
International Development, https://www.usaid.gov/news-information/fact-
sheets/bill-emerson-humanitarian-trust.
---------------------------------------------------------------------------
Should a worst-case scenario arise where the entire annual U.S.
wheat harvest failed, existing stocks would quickly evaporate if
current consumption levels remained constant. In the last crop year of
2021-2022, American farmers produced 1,646 million bushels of wheat,
while domestic demand (comprised of human food use, animal feed, and
seed) for the year totaled 1,117 million.\13\ After factoring in
exports and the previous year's residuals, the remaining stock of U.S.
wheat after the previous crop year was 669 million bushels, and this is
expected to decrease further next year to its lowest levels since 2007-
2008 (table 1).\14\
---------------------------------------------------------------------------
\13\ The U.S. wheat crop year runs June through May. See Andrew
Sowell and Bryn Swearingen, ``Wheat Outlook: November 2022,'' USDA,
November 14, 2022.
\14\ Ibid.

Table 1. U.S. Wheat Supply, Crop Year 2021-2022
Quantity (million bushels)
------------------------------------------------------------------------

------------------------------------------------------------------------
Beginning stocks 845
Production 1,646
Imports 95
Total supply........ 2,587
Domestic demand 1,117
Exports 800
Total demand........ 1,917
Ending stocks....... 669
------------------------------------------------------------------------
Source: Andrew Sowell and Bryn Swearingen. ``Wheat Outlook: November
2022.'' USDA Economic Research Service.

Applying a ``time-to-survive'' analysis to the hypothetical worst-
case scenario, which measures the maximum duration that supply could
match demand (assuming the previous domestic demand level held constant
and exports were canceled), existing domestic wheat stocks would last
only about 7 months.\15\ Unlike other industries, agriculture does not
have the option of surging production when a crisis arises as it is
constrained by annual growing seasons. The United States could not
replenish its wheat stocks with domestic production until the next
summer harvest season.
---------------------------------------------------------------------------
\15\ The ``time-to-survive'' metric for measuring supply chain
resilience is attributable to David Simchi-Levi, William Schmidt, and
Yehua Wei. For further details, see David Simchi-Levi, ``Find the Weak
Link in Your Supply Chain,'' Harvard Business Review, June 9, 2015,
https://hbr.org/2015/06/find-the-weak-link-in-your-supply-chain.
---------------------------------------------------------------------------
Food shocks and price spikes resulting from the COVID-19 pandemic
and Russia's war in Ukraine have helped Washington realize our food
system's fragility. The latest National Security Strategy under
President Joe Biden cites food security as one of the top five shared
global challenges. It highlights global initiatives the United States
is currently leading, including efforts to urge other states to commit
to ``keeping food and agricultural markets open, increasing fertilizer
production, and investing in climate-resilient agriculture.'' \16\
These efforts are worthwhile, but America must ensure its increased
focus on global food insecurity does not turn a blind eye to potential
vulnerabilities in domestic food production that a disruptive adversary
such as Russia could exploit.
---------------------------------------------------------------------------
\16\ National Security Strategy (Washington, D.C.: The White House,
October 2022), 29, https://www.whitehouse.gov/wp-content/uploads/2022/
10/Biden-Harris-Administrations-National-Security-Strategy-10.2022.pdf.
---------------------------------------------------------------------------
Moscow's Increasingly Disruptive Actions
Over the past 2 decades, while the Russian Federation has enjoyed a
resurgence of economic growth and global influence under Vladimir
Putin's leadership, the Kremlin has demonstrated a repeated willingness
to undermine U.S. interests. The reasons for this approach are rooted
in what has become characterized as the Primakov doctrine, which
``posits that a unipolar world dominated by the United States is
unacceptable to Russia.'' \17\ In operationalizing the Primakov
doctrine, Russia has been conducting a hybrid war in part to
``fo[r]ment chaos, create distrust in U.S. institutions, and target the
preexisting divisions in the country.'' \18\ Through these actions,
Russia has earned a reputation as a perilous threat ``with the goal of
overturning key elements of the international order.'' \19\
---------------------------------------------------------------------------
\17\ Eugene Rumer, ``The Primakov (Not Gerasimov) Doctrine in
Action,'' Carnegie Endowment for International Peace, June 5, 2019,
https://carnegieendowment.org/2019/06/05/primakov-not-gerasimov-
doctrine-in-action-pub-79254.
\18\ Sarah Jacobs Gamberini, ``Social Media Weaponization: The
Biohazard of Russian Disinformation Campaigns,'' Joint Force Quarterly
99 (4th Quarter 2020), 10, https://ndupress.ndu.edu/Portals/68/
Documents/jfq/jfq-99/jfq-99_4-13_Gamberini.pdf.
\19\ National Security Strategy, 23-25.
---------------------------------------------------------------------------
There is no shortage of examples illustrating why Russia is now
characterized this way. The United States has attributed several
significant cyber attacks \20\ targeting American industry and
governmental organizations to Russia in recent decades.\21\ The Kremlin
has also gone to great lengths to interfere with the democratic process
Americans cherish. The clearest example of this approach was during the
2016 Presidential election. According to the U.S. Intelligence
Community and Department of Justice investigations, the Kremlin
directed extensive information warfare operations to influence the
election outcome, resulting in distrust among the U.S. citizenry in the
reliability of our electoral system.\22\
---------------------------------------------------------------------------
\20\ The term cyber attack in today's lexicon is vague and holds
multiple meanings. For the purposes of this essay, the term refers to
computer network intrusions and disruptions. This contrasts with other
forms of information warfare, such as influence operations, that
leverage communications networks to influence targeted audiences.
\21\ GRIZZLY STEPPE--Russian Malicious Cyber Activity (Washington,
D.C.: Department of Homeland Security [DHS] and Federal Bureau of
Investigation [FBI], December 29, 2016), 4, https://www.cisa.gov/sites/
default/files/publications/JAR_16-20296A_GRIZZLY%20STEPPE-2016-
1229.pdf; Jason Healey, ed., A Fierce Domain: Conflict in Cyberspace,
1986 to 2012 (Vienna, VA: Cyber Conflict Studies Association, 2013),
205-207; ``Dragonfly: Western Energy Companies Under Sabotage Threat,''
Symantec, June 30, 2014, https://symantec-enterprise-
blogs.security.com/blogs/threat-intelligence/dragonfly-energy-
companies-sabotage; Andy Greenberg, ``The Russian Hackers Playing
`Chekhov's Gun' With U.S. Infrastructure,'' Wired, October 26, 2020,
https://www.wired.com/story/berserk-bear-russia-infrastructure-hacking/
; ``Tactics, Techniques, and Procedures of Indicted State-Sponsored
Russian Cyber Actors Targeting the Energy Sector,'' Cybersecurity and
Infrastructure Security Agency (CISA), March 24, 2022, https://
www.cisa.gov/uscert/ncas/alerts/aa22-083a; ``Russian SVR Targets U.S.
and Allied Networks,'' National Security Agency, CISA, and FBI, April
2021, https://media.defense.gov/2021/apr/15/2002621240/-1/-1/0/
csa_svr_targets_us_allies_uoo13234021.pdf; ``Statement by Deputy
National Security Advisor for Cyber and Emerging Technology Anne
Neuberger on SolarWinds and Microsoft Exchange Incidents,'' The White
House, April 19, 2021, https://www.whitehouse.gov/briefing-room/
statements-releases/2021/04/19/statement-by-deputy-national-security-
advisor-for-cyber-and-emerging-technology-on-solarwinds-and-microsoft-
exchange-incidents/.
\22\ Background to ``Assessing Russian Activities and Intentions in
Recent U.S. Elections'': The Analytic Process and Cyber Incident
Attribution (Washington, D.C.: Office of the Director of National
Intelligence [ODNI], January 6, 2017), https://www.dni.gov/files/
documents/ICA_2017_01.pdf; Robert S. Mueller, Report on the
Investigation Into Russian Interference in the 2016 Presidential
Election (Washington, D.C.: Department of Justice, March 2019).
---------------------------------------------------------------------------
Russia is now also seeking to undermine the U.S.-led global
economic system. Suffering from unprecedented Western sanctions as
punishment for its war in Ukraine, Russia is countering with its own
strategies to establish a global economy that excludes the West. Not
only have the Russians cut natural gas supplies to Europe, but they are
also replacing access to Western marketing by increasing trade with
China, India, and other countries. Russia has also been championing its
own alternative to the SWIFT international financial messaging
system.\23\
---------------------------------------------------------------------------
\23\ Alexander Marrow, ``Russia's SWIFT Alternative Expanding
Quickly This Year, Says Central Bank,'' Reuters, September 23, 2022,
https://money.usnews.com/investing/news/articles/2022-09-23/russias-
swift-alternative-expanding-quickly-this-year-says-central-bank.
---------------------------------------------------------------------------
These examples demonstrate Russia's repeated attempts to undermine
American strength and interests. Outcomes from these efforts have
resulted in various levels of success in sowing seeds of domestic chaos
to destabilize U.S. society. Should the Kremlin succeed in
significantly disrupting Americans' ability to sufficiently access
cheap and convenient food, the impact could become far more intense
than what Russia has achieved to this point.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Combine reloads wheat into bunker for further transportation
during harvest near Krasne, Ukraine, July 5, 2019 (United
Nations Food and Agricultural Organization).
Experienced Cereal Killers
While their attempts to disrupt U.S. interests in the post-Cold War
era have yet to target food directly, the Russians have found it a
preferred tactic elsewhere. In fact, during their current war in
Ukraine, attacking wheat storage and production has been a top
priority, and they have done so with remarkable efficacy. Ukraine is
one of the world's most productive breadbaskets, producing over 85
million metric tons of wheat annually.\24\ Ukraine was the world's
fourth largest wheat exporter on the global market during the 2021-2022
crop year.\25\ Recognizing Ukrainian grain as a critical center of
gravity, Russian forces have employed a relentless multifaceted
strategy to destroy that element of the Ukrainian economy.
---------------------------------------------------------------------------
\24\ ``FAOSTAT.''
\25\ ``Production, Supply, and Distribution,'' USDA, https://
apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery.
---------------------------------------------------------------------------
The first element of this strategy is the theft of Ukrainian
agricultural machinery. Since the early weeks of the war, media outlets
have reported multiple instances of Russian forces ransacking Ukrainian
grain stocks, shipping their contents back to Russian territory and
sending it to Russian cargo vessels for export to global Russian
trading partners.\26\ Some estimates claim that millions of tons of
grain from eastern Ukraine have been seized, triggering nightmares of
the Soviet-induced Ukrainian famine of 1932-1933.\27\ Russians looted
farm machinery dealerships and stole combines, tractors, and
implements.
---------------------------------------------------------------------------
\26\ Declan Walsh and Valerie Hopkins, ``Russia Seeks Buyers for
Plundered Ukraine Grain, U.S. Warns,'' New York Times, June 5, 2022,
https://www.nytimes.com/2022/06/05/world/africa/ukraine-grain-russia-
sales.html.
\27\ Susanne A. Wengle and Vitalii Dankevych, ``Ukrainian Farms
Feed Europe and China. Russia Wants to End That,'' Washington Post,
September 1, 2022, https://www.washingtonpost.com/business/2022/09/01/
russia-attacks-ukraine-farm-economy/.
---------------------------------------------------------------------------
The second component of the Russian strategy to eliminate Ukrainian
wheat is destruction. Not only have battles prevented farmers in
certain regions of eastern Ukraine from tending to their fields, but
Russian forces have also laid waste to Ukrainian cropland by burning
vast acreages across the Donetsk, Mykolaiv, and Kherson regions.
Russian bombing and missile strikes have destroyed the logistical
infrastructure essential to wheat production and delivery, including
irrigation systems, grain elevators, and port terminals. Seeking to
damage Ukraine's ability to recover from the conflict, Russia went so
far as to target Ukraine's National Gene Bank located in Kharkiv, which
served as the country's seed bank, housing some 160,000 specimens of
plant and crop seeds.\28\
---------------------------------------------------------------------------
\28\ Ibid.
---------------------------------------------------------------------------
A third pillar of the Russian strategy undermining wheat production
in Ukraine has focused on Ukraine's ability to export its grain. In the
early days of the war, the Russian naval blockade of Ukraine's Black
Sea ports strangled Ukrainian exports, cutting off essential means for
Kyiv to participate in global markets. Agricultural commodities are
Ukraine's top exports, including $4.61 billion worth of wheat alone in
2020.\29\ Blockading the Black Sea ports was painful for Ukraine and
the many countries relying on Ukrainian wheat to feed their
populations, contributing to damaging global food price spikes and
inflation over the ensuing months. Not until August 2022 did Russia
agree to lift the blockade, based on a tenuous agreement brokered with
assistance from the UN and Turkey. Even since the initial agreement,
the Kremlin has unilaterally suspended it once and has threatened not
to renew the deal.\30\
---------------------------------------------------------------------------
\29\ ``Ukraine,'' Observatory of Economic Complexity (OEC), https:/
/oec.world/en/profile/country/ukr.
\30\ Amanda Macias and Gabriel Cortes, ``Ukraine Agriculture
Exports Top 10 Million Metric Tons Since Ports Reopened Under UN-Backed
Black Sea Grain Initiative,'' CNBC, November 3, 2022, https://
www.cnbc.com/2022/11/03/russia-ukraine-war-black-sea-grain-initiative-
agriculture-exports-hit-milestone.html.
---------------------------------------------------------------------------
Ukraine's experience during the current Russian invasion reveals
the lengths to which Russia is willing to go to intentionally attack
wheat production and supplies, even when that grain is a vital
component of the local and global food system. Based on this precedent,
the United States and its allies must be prepared to defend against the
variety of tactics Moscow could employ to attack wheat production
elsewhere.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Secretary of State Antony Blinken participates in roundtable
discussion on food security and Vision for Adapted Crops and
Soils with agricultural leaders from public and private
sectors, in New York City, August 4, 2023 (Department of State/
Chuck Kennedy).
Russia's Emergence as a Global Food Power
Competition between Washington and Moscow that is centered around
grain is nothing new. Following the U.S. Civil War in the 1860s, cheap
American wheat flooded global markets for the first time, pushing
Russian wheat exports out of Europe. The U.S.-Russian grain trade
rivalry was a key factor in conditions that ultimately ushered in World
War I.\31\ Wheat has continued to play a major, albeit behind the
scenes role in U.S.-Russian relations ever since.
---------------------------------------------------------------------------
\31\ Scott Reynolds Nelson, Oceans of Grain: How American Wheat
Remade the World (New York: Basic Books, 2022).
---------------------------------------------------------------------------
When Putin became President in 2000, Russia relied on imports to
meet half its domestic food needs. Prioritizing food security, the
Russian President has since successfully executed initiatives to boost
food production, and grain has been a critical focus. By 2017, Russia
had become the world's top wheat exporter, and the Kremlin has no plans
to cede its pole position. Despite unprecedented sanctions from the
West as punishment for its war in Ukraine, Russia still has plenty of
buyers for its wheat exports in the Middle East and Asia as it strives
to outproduce and out-compete American farmers.\32\ Even China began
importing Russian wheat this year after previously placing a ban on it
due to concerns about the presence of a crop disease (dwarf bunt
fungus).\33\ The Kremlin's agriculture minister is now on a mission to
increase the value of agricultural exports by 50 percent by 2024.\34\
---------------------------------------------------------------------------
\32\ Michael Hogan and Gus Trompiz, ``Russian Wheat Sales Climb as
Buyers Seek Lower-Cost Options,'' Business Recorder, April 9, 2022,
https://www.brecorder.com/news/40166176/russian-wheat-sales-climb-as-
buyers-seek-lower-cost-options.
\33\ Laura He, ``China Lifts Restrictions on Russian Wheat
Imports,'' CNN, February 25, 2022, https://www.cnn.com/2022/02/25/
business/wheat-russia-china-intl-hnk/index.html.
\34\ Nastassia Astrasheuskaya, ``Russia Starts to Sow Seeds of
`Wheat Diplomacy,' '' Financial Times, September 2, 2021.
---------------------------------------------------------------------------
Recent global supply chain disruptions from events such as the war
in Ukraine and the COVID-19 pandemic have highlighted Moscow's
privileged position in terms of food security. Russia is the world's
top exporter of not only wheat but also fertilizer.\35\ Given its
relative strength in this area and a demonstrated willingness to attack
Ukrainian wheat, attacking the domestic American wheat industry could
become a viable option in Russia's arsenal of hybrid warfare tactics
against U.S. interests. Specific strategies Russia could employ to
target U.S. wheat production can be organized into four categories of
attack:
---------------------------------------------------------------------------
\35\ ``Wheat,'' OEC, https://oec.world/en/profile/hs/wheat; Joana
Colussi, Gary Schnitkey, and Carl Zulauf, ``War in Ukraine and Its
Effect on Fertilizer Exports to Brazil and the U.S.,'' Farmdoc Daily
12, no. 34 (March 17, 2022), https://farmdocdaily.illinois.edu/2022/03/
war-in-ukraine-and-its-effect-on-fertilizer-exports-to-brazil-and-the-
us.html.

cyber attacks targeting grain storage and transport
---------------------------------------------------------------------------
infrastructure

restricting fertilizer exports to U.S. and/or global markets

manipulating international wheat markets

agricultural biowarfare.

The following sections will explore each of these options in depth.
Disruption Option 1: Cyber Attacks Targeting Grain Infrastructure
Among the cyber-security industry, many consider Russia to be the
most capable and stealthiest of America's cyber adversaries. In
addition to the notable intrusions mentioned earlier, suspected Russian
adversary groups have earned their reputation for several reasons,
including developing sophisticated malware that employed novel command
and control techniques, exhibiting rapid breakout times, and leading
the way in targeting cloud infrastructure.\36\
---------------------------------------------------------------------------
\36\ Alex Drozhzhin, ``Russian-Speaking Cyber Spies Exploit
Satellites,'' Kaspersky Daily, September 9, 2015, https://
usa.kaspersky.com/blog/turla-apt-exploiting-satellites/5945/; Adam
Meyers, ``First-Ever Adversary Ranking in 2019 Global Threat Report
Highlights the Importance of Speed,'' CrowdStrike, February 19, 2019,
https://www.crowdstrike.com/blog/first-ever-adversary-ranking-in-2019-
global-threat-report-highlights-the-importance-of-speed/; CrowdStrike
2022 Global Threat Report (Austin, TX: CrowdStrike, 2022), 25, https://
irp.cdn-website.com/5d9b1ea1/files/uploaded/Report2022GTR.pdf.
---------------------------------------------------------------------------
Cyber attacks crippling the food industry are not unprecedented.
For example, suspected criminals successfully compromised the network
of JBS S.A., a global meat processing company, hampering livestock
slaughter operations and causing wholesale meat prices to spike.\37\
Should the Kremlin set its sights on disrupting the U.S. wheat industry
via cyber means, a likely approach would be targeting the
infrastructure used for grain transport and storage, specifically the
grain storage elevators throughout wheat production regions. These
facilities comprise an essential component of the Nation's food system,
which the Department of Homeland Security (DHS) has identified as 1 of
the 16 sectors of critical infrastructure.\38\ Farming cooperatives
operating grain elevators increasingly leverage automation technologies
to handle loading and unloading functions. If an adversary gained
remote access to the industrial control system (ICS) network
environment, they could shut down operations, preventing grain
transportation to trade markets and food processors.
---------------------------------------------------------------------------
\37\ Jacob Bunge and Jesse Newman, ``Ransomware Attack Roiled Meat
Giant JBS, Then Spilled Over to Farmers and Restaurants,'' Wall Street
Journal, June 11, 2021, https://www.wsj.com/articles/ransomware-attack-
roiled-meat-giant-jbs-then-spilled-over-to-farmers-and-restaurants-
11623403800.
\38\ ``Food and Agriculture Sector,'' CISA, https://www.cisa.gov/
food-and-agriculture-sector.
---------------------------------------------------------------------------
Russian state-sponsored adversaries are known to have successfully
targeted a critical infrastructure ICS environment, causing kinetic
effects. A cyber unit within the Russian military was responsible for
the attack on the Ukrainian power grid, resulting in nearly \1/4\
million Ukrainians losing power for about 6 hours.\39\ A similar attack
chain methodology could disrupt control systems for other sectors of
critical infrastructure, such as grain storage facilities.
---------------------------------------------------------------------------
\39\ ``Russian State-Sponsored and Criminal Cyber Threats to
Critical Infrastructure,'' CISA, May 9, 2022, https://www.cisa.gov/
uscert/ncas/alerts/aa22-110a; Andy Greenberg, Sandworm: A New Era of
Cyberwar and the Hunt for the Kremlin's Most Dangerous Hackers (New
York: Doubleday, 2019), 52-53.
---------------------------------------------------------------------------
A less sophisticated means of attack on grain elevators would be to
infect the traditional computer networks operating at these facilities
in attempts to affect operations. This has already happened on several
occasions. Between the fall of 2021 and early 2022, six U.S. grain
cooperative elevator facilities experienced ransomware attacks on their
business networks that inhibited processing as some were forced to
adjust to manual operations. Recognizing the threatening trend, the
Federal Bureau of Investigation (FBI)'s Cyber Division issued a Private
Industry Notice to assist grain cooperative organizations better
prepare their defenses.\40\ The FBI's report also noted the potential
for an impact on commodities trading and stocks that could result in
food security and inflation concerns.
---------------------------------------------------------------------------
\40\ Jonathan Reed, ``Ransomware Attacks on Agricultural
Cooperatives Potentially Timed to Critical Seasons,'' Security
Intelligence, September 14, 2022.
---------------------------------------------------------------------------
Another potential cyber attack against the wheat industry that
could lead to severe outcomes would be a more typical intrusion into
agriculture industry business networks. Large agriculture firms have
not been immune from network intrusions aimed at stealing intellectual
property. Unlike the other attacks mentioned, where the objective is to
perform sabotage or shut down a network for ransom, cyber-security
firms have noted that intellectual property theft intrusions targeting
agriculture firms are on the rise.\41\
---------------------------------------------------------------------------
\41\ ``Hacking Farm to Table: Threat Hunters Uncover Rise in
Attacks Against Agriculture,'' CrowdStrike, November 18, 2020, https://
www.crowdstrike.com/blog/how-threat-hunting-uncovered-attacks-in-the-
agriculture-industry/.
---------------------------------------------------------------------------
Should Russian-aligned adversaries gain access to sensitive
agriculture industry data, they could facilitate further disruptive
strategies. For example, stolen documents and data could be altered and
then leaked publicly, delivering damaging false messages like the
hackers who doctored data stolen from Pfizer to undermine public trust
in vaccines.\42\ Similarly, grain pathology and trade experts note that
false claims of wheat crop disease would have dramatic adverse effects
on American grain exports.\43\ Undermining American interests related
to global trade introduces additional options at the Kremlin's disposal
for disrupting U.S. wheat production.
---------------------------------------------------------------------------
\42\ Sergiu Gatlan, ``Hackers Leaked Altered Pfizer Data to
Sabotage Trust in Vaccines,'' Bleeping Computer, January 15, 2021,
https://www.bleepingcomputer.com/news/security/hackers-leaked-altered-
pfizer-data-to-sabotage-trust-in-vaccines/.
\43\ Peter Mutschler, et al., Threats to Precision Agriculture,
2018 Public-Private Analytic Exchange Program (Washington, D.C.: DHS
and ODNI, 2018), https://doi.org/10.13140/RG.2.2.20693.37600; Dr.
Douglas G. Luster, interview by author, November 16, 2022.
---------------------------------------------------------------------------
Disruption Option 2: Restricting Fertilizer Exports
The United States is a net exporter of food. As such, some assume
the country is self-sufficient in meeting domestic food needs. However,
that conclusion is tenuous because American agriculture depends on
imports of foreign synthetic fertilizer. Less than one percent of U.S.
farmland is organic.\44\ Farming the remaining 99 percent involves
conventional methods. One characteristic of conventional agriculture is
the ``extensive use of pesticides, fertilizers, and external energy
inputs.'' \45\ Despite the United States having a relatively robust
fertilizer production industry, it does not currently provide for all
domestic farming needs. According to the USDA, ``The United States is a
major importer and dependent on foreign fertilizer and is the second or
third top importer for each of the three major components of
fertilizer.'' \46\
---------------------------------------------------------------------------
\44\ ``Organic Farming: Results from the 2019 Organic Survey,''
USDA, October 2020, https://www.nass.usda.gov/Publications/Highlights/
2020/census-organics.pdf.
\45\ ``Sustainable Agriculture,'' USDA, https://www.nal.usda.gov/
legacy/afsic/sustainable-agriculture-definitions-and-terms.
\46\ ``USDA Announces Plans for $250 Million Investment to Support
Innovative American-Made Fertilizer to Give U.S. Farmers More Choices
in the Marketplace,'' USDA, March 11, 2022, https://www.usda.gov/media/
press-releases/2022/03/11/usda-announces-plans-250-million-investment-
support-innovative.
---------------------------------------------------------------------------
The three primary fertilizer nutrients required to grow crops are
nitrogen, phosphorus, and potassium. Nitrogen fertilizer is derived
from the Haber-Bosch process, which uses natural gas for fuel to
extract nitrogen from the air to form ammonia. Phosphorus fertilizer
comes from mining of nonrenewable phosphate rock. Potassium fertilizer
is derived from mining nonrenewable potash. As of 2021, the United
States imported 12 percent of its nitrogen, nine percent of its
phosphate, and 93 percent of its potash.\47\ While America imports
these materials from many friendly states, some come from less-trusted
trading partners. This is especially true of potash. Russia and its
close ally, Belarus, combine to provide 12 percent of America's
potassium requirements and more than 15 percent of total U.S.
fertilizer imports (figure 2).\48\
---------------------------------------------------------------------------
\47\ Colussi, Schnitkey, and Zulauf, ``War in Ukraine and Its
Effect on Fertilizer Exports to Brazil and the U.S.''
\48\ Ibid.
---------------------------------------------------------------------------
Figure 2. Fertilizer Import Dependence by Country

Share of Imported and Domestic Share of Imports from Russia and
Produced Fertilizer by Country, 2019 Belarus by Country

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Cited in ``Impacts and Repercussions of Prices
Increases on the Global Fertilizer Market.'' USDA Foreign
Agricultural Service. June 30, 2022. https://www.fas.usda.gov/
data/impacts-and-Repercutions-prices-increases-global-
fertilizer-market.

Should Russia choose to disrupt wheat production by stopping potash
exports, America would need to find ways to ramp up domestic mining and
production or close the gap by increasing imports from friendly trade
partners such as Canada, which already supplies 83 percent of potash
used in the United States. A more significant cause for concern is that
Russia is the world's largest fertilizer exporter when considering all
fertilizer components and is responsible for over 15 percent of total
global fertilizer exports.\49\ Leveraging that influence, Russia could
attempt to manipulate availability on the global market, resulting in
worldwide price shocks that would cascade to American consumers and
place additional pressure on poorer countries already suffering from
food security challenges.
---------------------------------------------------------------------------
\49\ Daniel Workman, ``Top Fertilizers Exports by Country,''
World's Top Exports, 2022, https://www.worldstopexports.com/top-
fertilizers-exports-by-country/.
---------------------------------------------------------------------------
Russian impacts on global fertilizer trade have already contributed
to financial instability. Fertilizer prices tripled after the beginning
of the war in Ukraine because Russia limited exports. These limits
included restrictions on exports of natural gas, which, as noted, is a
crucial component for producing nitrogen fertilizer.\50\ Russia also
shut down an ammonia fertilizer pipeline from its Volga region to a
Black Sea port to further restrict global supplies.\51\ The USDA
characterized the situation as ``Putin's price hike on farmers.'' \52\
These events contributed to soaring food costs, leading to the highest
inflation rates in the United States in 4 decades.\53\
---------------------------------------------------------------------------
\50\ Jackie Northam, ``How the War in Ukraine Is Affecting the
World's Supply of Fertilizer,'' NPR, September 28, 2022, https://
www.npr.org/2022/09/28/1125525861/how-the-war-in-ukraine-is-affecting-
the-worlds-supply-of-fertilizer.
\51\ Emma Farge, ``UN Pushes for Global Fertilizer Price Cut to
Avoid `Future Crisis,' '' Reuters, October 3, 2022, https://
www.reuters.com/markets/commodities/un-pushes-global-fertilizer-price-
cut-avoid-future-crisis-2022-10-03/.
\52\ ``USDA Announces Plans for $250 Million Investment.''
\53\ ``Global Inflation Forecast to Rise to 7.5% by the End of
2022, Driven by Food, Fuel, Energy, and Supply Chain Disruption,
Observes GlobalData,'' GlobalData, July 29, 2022, https://
www.globaldata.com/media/business-fundamentals/global-inflation-
forecast-rise-7-5-end-2022-driven-food-fuel-energy-supply-chain-
disruption-observes-globaldata/.
---------------------------------------------------------------------------
In late 2022, the UN warned that if fertilizer prices were not
reduced, the world would face a ``future crisis'' of food availability.
UN officials have since worked to convince Russia to increase
fertilizer output.\54\ Thanks to rebounding global fertilizer
production, fertilizer price fears have dampened for the near term.\55\
Nevertheless, the situation demonstrates how the Kremlin can leverage
its fertilizer superiority to harm the interests of not only the United
States but also the world. Unfortunately, fertilizer availability is
not the only way Moscow can flex its muscle in undermining American
wheat production. Undercutting U.S. grain exports is another area where
the American wheat industry is vulnerable to Russian meddling.
---------------------------------------------------------------------------
\54\ Farge, ``UN Pushes for Global Fertilizer Price Cut.''
\55\ Russ Quinn, ``Global Fertilizer Market Update,'' DTN
Progressive Farmer, March 8, 2023, https://www.dtnpf.com/agriculture/
web/ag/news/crops/article/2023/02/28/usda-ag-outlook-changes-coming.
---------------------------------------------------------------------------
Disruption Option 3: Undercutting U.S. Wheat Exports in Global Markets
America's farmers have historically benefited from growing more
wheat than the country consumes and being able to sell excess grain to
overseas markets. In crop year 2021-2022, the United States exported
$7.3 billion of wheat, making it the world's third largest wheat
exporter, behind Russia and Australia.\56\ According to the USDA, in
the early 2000s, the United States was responsible for roughly 25
percent of the world's wheat exports, but that dominance has dwindled
now to 13 percent.\57\ America's share of global wheat exports has
shrunk over the past 20 years as Russia has strengthened its position
as the world's wheat superpower.
---------------------------------------------------------------------------
\56\ ``Production, Supply, and Distribution.''
\57\ ``Wheat: Overview,'' USDA, April 3, 2023, https://
www.ers.usda.gov/topics/crops/wheat/.
---------------------------------------------------------------------------
Increasing international competition in wheat trading has strained
U.S. wheat exports in recent years, and this trend is expected to
continue. Competition from Russia, especially in African and Middle
Eastern markets, poses a significant challenge.\58\ Russia has shown it
is willing to use food trade as a tool of diplomatic force. When
Bulgaria ceased transiting Russian gas to Europe, Turkey agreed to
facilitate its transit in exchange for receiving wheat imports from
Russia. Elsewhere, Russia sold wheat to Iran as part of a deal to help
sell Iranian oil. Moscow willingly enters commodity trade markets even
if it means undercutting its allies, as Iran experienced this year when
Russia discounted its steel exports and grabbed Iranian market
share.\59\ Wheat industry analysts expect Russia to continue pushing
boundaries to secure access to wheat export markets, especially in
regions with rapid population growth, like southeast Asia.\60\
---------------------------------------------------------------------------
\58\ ``Wheat 2021 Export Highlights,'' USDA, https://
www.fas.usda.gov/wheat-2021-export-highlights.
\59\ ``Iran Sees No Benefit from Ukraine War as Russia Undercuts It
on Steel and Oil,'' Middle East Eye, June 23, 2022, http://
www.middleeasteye.net/news/iran-russia-ukraine-no-benefit-from-war-
undercut-oil-steel.
\60\ Astrasheuskaya, ``Russia Starts to Sow Seeds of `Wheat
Diplomacy.' ''
---------------------------------------------------------------------------
Waging information warfare would be another scheme the Kremlin
could employ to win in export markets. As mentioned, crafting and
communicating a hoax that falsely claims American wheat supplies are
contaminated with disease would cause buyers to seek alternative
sources.\61\ Rules over grain disease quarantines can be a sensitive
political subject between traders, even without misinformation
campaigns. When coupled with stolen and altered data derived from a
coordinated cyber intrusion, the United States would have difficulty
eliminating concerns about the quality of American wheat stocks.
---------------------------------------------------------------------------
\61\ Michael O. Pumphrey, interview by author, November 15, 2022.
---------------------------------------------------------------------------
Complicating the issue is that prior incidents of contaminated U.S.
wheat exports could strengthen Russian hoax claims. The Soviet Union
and several other countries complained of dirty, rotting, and insect-
ridden U.S. grain in the 1980s.\62\ In the mid-1990s, the USDA had to
institute a regulatory program to certify wheat shipments were free of
fungal disease after a Karnal bunt outbreak in the United States.\63\
Recent research suggests that the Environmental Protection Agency
scientific integrity and transparency failures related to pesticide use
have eroded global trust and are undermining U.S. agricultural
exports.\64\
---------------------------------------------------------------------------
\62\ ``Soviets Say U.S. Grain Exports Are Dirty, Decaying, and
Insect-Ridden,'' Los Angeles Times, June 2, 1985, https://
www.latimes.com/archives/la-xpm-1985-06-02-fi-15167-story.html.
\63\ Gary Vocke, Edward W. Allen, and J. Michael Price, The
Economic Impact of Karnal Bunt Phytosanitary Wheat Export Certificates
(Washington, D.C.: USDA Economic Research Service, August 2010),
https://www.ers.usda.gov/webdocs/outlooks/39643/8713_whs10h01_1_.pdf?v=
1741.
\64\ Nathan Donley, ``How the EPA's Lax Regulation of Dangerous
Pesticides Is Hurting Public Health and the U.S. Economy,'' Brookings
Institution, September 29, 2022, https://www.brookings.edu/research/
how-the-epas-lax-regulation-of-dangerous-pesticides-is-hurting-public-
health-and-the-us-economy/.
---------------------------------------------------------------------------
If Russia succeeds in taking global wheat export markets from the
United States, American farmers will undoubtedly be threatened. With
less market access and increasing input costs, the incentive for
growing the preeminent American staple crop would dwindle, resulting in
lower output and production capacity. Such an outcome, combined with
other disruptive options identified in this essay, could accelerate
Russian aims of undermining U.S. global power.
Disruption Option 4: Agricultural Bioterrorism
Another vector for attacking U.S. wheat production, and one
carrying potentially the broadest impact, would be a Russian attack
involving pests or pathogens designed to damage crops. Such an attack
would likely be done covertly to provide plausible deniability. Before
the Biological and Toxin Weapons Convention of 1972 (BWC), several
countries, including the United States, developed and maintained
offensive biological weapons research programs.
Many historians and scientists claim that while other signatories
to the BWC ceased their offensive biological weapons programs after the
convention went into effect in 1975, the Soviet Union secretly
continued its program despite being a signatory to the treaty. Research
has shown that the Soviet program was the longest and most
sophisticated the world has ever seen, beginning in 1928 and lasting
until at least 1992. Its scope was massive, involving over 65,000
workers.\65\ A specific component of Soviet biological warfare research
operated under the code name Ekologiya and focused on developing
pathogens that would kill animals and plants, including crops such as
wheat. It eventually became the largest ever offensive biowarfare
project focused specifically on agriculture.\66\
---------------------------------------------------------------------------
\65\ Milton Leitenberg, Raymond A. Zilinskas, and Jens H. Kuhn, The
Soviet Biological Weapons Program (Cambridge, MA: Harvard University
Press, 2012), 698-700.
\66\ Anthony Rimmington, The Soviet Union's Agricultural Biowarfare
Programme: Ploughshares to Swords (Cham, Switzerland: Palgrave
Macmillan, 2021).
---------------------------------------------------------------------------
Should the Russians choose to conduct a biological attack against
American grain crops, wheat rust could likely be the weapon of choice.
Wheat rusts are a type of fungus belonging to the genus Puccinia that
can affect different parts of the wheat plant. Also known as ``the
polio of agriculture,'' it has been the worst wheat disease in history,
capable of causing catastrophic crop failures. During the first half of
the 20th century, rust destroyed \1/5\ of America's wheat crops in
periodic epidemics.\67\ Before the BWC outlawed offensive biowarfare
programs, many countries sought to weaponize wheat rust because of its
potent effects in targeting crops. Relative to other biological agents,
it remains viable for an extended period of time under cool storage (2
years) and spreads quickly after release.\68\ In addition, plant rust
fungal spores are easily dispersed, durable to withstand transportation
and transmission, and easy to produce in sufficient quantities. If the
specific variety of targeted wheat is known, attackers could use
tailored strains of wheat rust that would have the greatest likelihood
of successfully killing and spreading while protecting their own crop
with specific strain-resistant varieties.\69\
---------------------------------------------------------------------------
\67\ ``Rust in the Bread Basket,'' The Economist, July 1, 2010.
\68\ Rimmington, The Soviet Union's Agricultural Biowarfare
Programme, 26.
\69\ Dr. Don Huber, interview by author, November 11, 2022.
---------------------------------------------------------------------------
According to some claims, the Soviet program did not stockpile
anti-agricultural weapons like wheat rust but maintained several
facilities ``equipped as mobilization capacities, to rapidly convert to
weapons production should the need arise.'' \70\ A historian of the
Ekologiya program described one of the project's main facilities as
possessing the world's largest ``unique collection of fungal pathogens
against wheat.'' \71\ Another facility, the Scientific Research
Agricultural Institute in Gvardeyskiy, Kazakhstan, was reportedly a key
testing site for newly developed anticrop (including antiwheat)
pathogens in greenhouses measuring a total area of 100 square
meters.\72\ In total, four separate program facilities maintained
laboratories focusing on rust species research.\73\
---------------------------------------------------------------------------
\70\ Kenneth Alibek, ``The Soviet Union's Anti-Agricultural
Biological Weapons,'' Annals of the New York Academy of Sciences 894,
no. 1 (1999), 18-19.
\71\ Rimmington, The Soviet Union's Agricultural Biowarfare
Programme, 49.
\72\ Ibid., 84.
\73\ Ibid., 144.
---------------------------------------------------------------------------
Project Ekologiya has several implications for the security of U.S.
wheat production today. First, the Russian Federation inherited the
offensive Soviet biological weapons program and its decades of
research, development, and technological capability. While the Kremlin
claims the program ended after the Cold War and that it has since
complied with the BWC, the United States argues otherwise. In 2021, the
State Department reported the following: ``The United States assesses
that the Russian Federation maintains an offensive BW program and is in
violation of its obligation under Articles I and II of the BWC. The
issue of compliance by Russia with the BWC has been of concern for many
years.'' \74\
---------------------------------------------------------------------------
\74\ ``2021 Adherence to and Compliance with Arms Control,
Nonproliferation, and Disarmament Agreements and Commitments,''
Department of State, April 15, 2021, https://www.state.gov/2021-
adherence-to-and-compliance-with-arms-control-nonproliferation-and-
disarmament-agreements-and-commitments/.
---------------------------------------------------------------------------
Not only is there a possibility Russia has maintained a biological
weapons program with agricultural components, but a second implication
for U.S. national security is that conventional American farming is
potentially vulnerable to biological attack because intensive farming,
as practiced today, ``involves limited diversification of crop and
cultivar genetics over large areas,'' helping create ``an ideal
environment'' for new pest establishment and spread.\75\ As small,
diversified farms have been overtaken by today's larger farming
operations for the sake of profit and efficiency, the United States has
inadvertently made its crops potentially more vulnerable to biological
attack. Some experts note that pests and the plant diseases they can
carry would be ``an ideal means of waging `asymmetric' war'' in
scenarios that fall below the threshold of conventional armed
conflict.\76\
---------------------------------------------------------------------------
\75\ Don M. Huber et al., Invasive Pest Species: Impacts on
Agricultural Production, Natural Resources, and the Environment, Issue
Paper No. 20 (Ames, IA: Council for Agricultural Science and
Technology, March 2002), https://www.iatp.org/sites/default/files/
Invasive_Pest_Species_
Impacts_on_Agricultural_.htm.
\76\ Jeffrey A. Lockwood, Six-Legged Soldiers: Using Insects as
Weapons of War (New York: Oxford University Press, 2009), 242.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Wheat fields in midsummer in Ukraine, Oblast Lviv, July 19,
---------------------------------------------------------------------------
2012 (Courtesy Raimond Spekking).

Exacerbating the problem is that our germplasm seed banks are
potentially insufficient in possessing the diversity required to
rebound from a devastating biological event. New varieties with
resistance would be essential in a successful attack scenario because
wheat rust can persist over the winter and remain viable to infect the
following year's crop. During the Cold War, germplasm collections were
better stocked and more robust to ensure resilience against known
pathogens. Those efforts have fallen behind in recent decades.\77\ For
example, a new strain of wheat stem rust emerged in Uganda in 1998,
commonly known as Ug99.\78\ Since then, scientists have evaluated
roughly 200,000 wheat varieties for natural resistance to Ug99. Less
than ten percent demonstrated adequate resistance.\79\ Not until 2017
did researchers discover a gene that provided resistance to Ug99,
making it possible to develop wheat varieties naturally capable of
surviving the disease.
---------------------------------------------------------------------------
\77\ Huber, interview.
\78\ The term Ug99 is now used in a more generic sense to include
the original variant along with new associated genetic variants
(``races'').
\79\ Ravi P. Singh, et al., ``The Emergence of Ug99 Races of the
Stem Rust Fungus Is a Threat to World Wheat Production,'' Annual Review
of Phytopathology 49, no. 1 (September 8, 2011), 465-481.
---------------------------------------------------------------------------
It should be noted that debate exists around the degree of risk
posed by a supposed lack of biodiversity. Some wheat pathology experts
argue that concerns of insufficient biodiversity in American wheat
crops are overblown. While wheat as a species is a monoculture grown in
vast quantities across the United States, there are many dozens of
commercial wheat varieties grown today, providing a reasonable degree
of genetic diversity within the species to mitigate massive impacts
from disease or pest outbreaks.\80\
---------------------------------------------------------------------------
\80\ Dr. Tim Murray, interview by author, March 7, 2022.
---------------------------------------------------------------------------
Although fungi are the most likely form of intentional biological
threat to wheat due to the relatively ease with which they can multiply
and spread, other pathogens like viruses and bacteria can also affect
grain crops. Defending against viruses is problematic. Treatments
against viruses are generally not as effective as using chemicals to
control fungi and bacteria. Disturbingly, the Soviet biowarfare program
reportedly included a facility based in Uzbekistan, the Central Asian
Scientific-Research Institute of Phytopathology, that ``focused on
viral diseases of wheat.'' \81\ These claims are corroborated by a
declassified 1977 U.S. Defense Intelligence Agency report stating that
the Soviet antiplant biowarfare program conducted work on wheat and
barley mosaic streak viruses.\82\
---------------------------------------------------------------------------
\81\ Rimmington, The Soviet Union's Agricultural Biowarfare
Programme, 50.
\82\ Ibid., 126.
---------------------------------------------------------------------------
Another intentional wheat industry disruption scenario could
involve the malicious introduction of wheat parasites that carry
harmful bacteria. For example, Rathayibacter tritici is a bacterium
that infects wheat via parasitic nematodes to cause a toxic gumming
disease.\83\ While not currently present in the United States,
introducing the associated nematode vectors to American wheat crops
could at least result in wheat export quarantines, as trade partners
would balk at accepting potentially contaminated grain shipments.\84\
---------------------------------------------------------------------------
\83\ Jungwook Park, et al., ``Comparative Genome Analysis of
Rathayibacter Tritici NCPPB 1953 with Rathayibacter Toxicus Strains Can
Facilitate Studies on Mechanisms of Nematode Association and Host
Infection,'' The Plant Pathology Journal 33, no. 4 (August 2017), 370-
381, https://doi.org/10.5423/PPJ.OA.01.2017.0017.
\84\ Murray, interview.
---------------------------------------------------------------------------
Biological attack against wheat production could also be an
attractive objective for an adversary like Russia because of the costs
imposed by recovery. Pests and pathogens can disperse and reproduce at
dramatic rates, providing the potential to wreak havoc across vast
amounts of American farmland. For example, a small outbreak of Karnal
bunt in the American Southwest in 1996 resulted in $250 million in
damages.\85\ In Texas, the cost of mitigating effects on agriculture
from nonnative fire ants is more than $1.2 billion annually. Expenses
for protecting crops from a nonnative insect carrying Pierce's Disease
that has plagued California grapevines since 1989 are also
substantial.\86\ Beyond just the recovery costs, pathogen outbreaks
could also easily lead to trade embargoes as destination countries
resist the risk of importing contaminated U.S. wheat. Thus, a
widespread infestation damaging American wheat crops ``could lead to
potential economic losses of immense proportions.'' \87\ A former
member of the Soviet biological weapons program agreed, citing
antiagricultural biological weapons as ``particularly suitable'' for
disrupting a target country's economy.\88\
---------------------------------------------------------------------------
\85\ Lila Guterman, ``One More Frightening Possibility: Terrorism
in the Croplands,'' The Chronicle of Higher Education, October 26,
2001, https://www.ph.ucla.edu/epi/bioter/croplandsterrorism.html.
\86\ Lockwood, Six-Legged Soldiers, 245-248.
\87\ Rimmington, The Soviet Union's Agricultural Biowarfare
Programme, 3.
\88\ Alibek, ``The Soviet Union's Anti-Agricultural Biological
Weapons,'' 219.
---------------------------------------------------------------------------
Intentional infestations targeting agriculture for nefarious
purposes are not without precedent. Analysts strongly suspect manmade
causes behind a debilitating outbreak of the fungus Moniliophthor
perniciosa, also known as witches' broom disease, among cocoa fields of
Bahia, Brazil, beginning in 1989.\89\ Potentially motivated by the
perpetrator's desire to destroy the chocolate industry to punish its
wealthy landowners, the suspected attack nearly exterminated the area's
cocoa plantations over the following decade. By 2001, ``Brazil went
from being the world's third-leading cocoa producer to being the
13th.'' \90\ Given this potential for covert bioterrorism to exact
large economic costs to a country's agricultural industry, Russia could
consider it as an increasingly attractive option as strategic
competition with the United States escalates.
---------------------------------------------------------------------------
\89\ Marcellus M. Caldas and Stephen Perz, ``Agro-Terrorism? The
Causes and Consequences of the Appearance of Witch's Broom Disease in
Cocoa Plantations of Southern Bahia, Brazil,'' Geoforum 47 (June 2013),
147-157.
\90\ Joanne Silberner, ``A Not-So-Sweet Lesson from Brazil's Cocoa
Farms,'' NPR, June 14, 2008, https://www.npr.org/2008/06/14/91479835/a-
not-so-sweet-lesson-from-brazils-cocoa-farms.
---------------------------------------------------------------------------
Risk Analysis
Risk is a function of likelihood and consequence and can be
mathematically described as Risk = Likelihood of an Event Consequence
(loss due to the event).\91\ To aid in measuring likelihood and
consequence of the four attack strategies Russia could employ to target
U.S. wheat production, an expert survey was conducted. Data was
collected from 30 participants in the United States who are
professionals with expertise in fields related to the wheat industry,
including farming, academia, information technology, and global trade.
Due to the potential security concerns of identifying the experts in
the survey, it was decided that all participants would remain
anonymous. The survey asked each participant to assess the likelihood
and consequences of the four Russian disruption scenarios: cyber
attacks targeting grain infrastructure, restricting fertilizer exports,
undercutting U.S. wheat exports, and agricultural bioterrorism.\92\
Participants assessed the likelihood of each scenario using a 5-point
Likert scale converted to the following percentages to enable
calculations (table 2). Participants assessed consequence using the
following 5-point Likert scale based on expected economic losses
ranging from less than $1 million to more than $20 billion (table 3).
Survey results for likelihood and consequence are captured in figures 3
and 4 and risk scores are presented in figure 5. Calculated mean scores
for likelihood and consequence for each attack scenario are found in
table 4.
---------------------------------------------------------------------------
\91\ Ortwin Renn, ``Concepts of Risk: An Interdisciplinary
Review,'' GAIA--Ecological Perspectives for Science and Society 17,
nos. 1-2 (March 2008).
\92\ Participants were provided with the following additional
clarification: ``Cyber attacks targeting grain storage/transport
infrastructure could include the following actions: ransomware attacks
against grain cooperative or port business networks; intrusions into
industrial control systems networks involved in grain storage or
transport.'' Participants also were provided: ``Undercutting U.S. wheat
exports in global markets could include the following actions: short-
term price manipulations or subsidies to domestic wheat production to
make Russian wheat exports more competitive in global markets; applying
further diplomatic pressure on potential trade partners; spreading
false claims about the health and quality of U.S. grain.''

Table 2. Likert Scale With Associated Percentages for Measuring
Likelihood
------------------------------------------------------------------------
Scale Likelihood Percentage Chance
------------------------------------------------------------------------
1 Very unlikely 0
2 Unlikely 25
3 Even chance 50
4 Likely 75
5 Very likely 100
------------------------------------------------------------------------

Table 3. Likert Scale With Associated Dollar Cost Ranges for Measuring
Consequence
------------------------------------------------------------------------
Scale Consequence
------------------------------------------------------------------------
1 Less than $1 million
2 $1 million to $100 million
3 $100 million to $1 billion
4 $1 billion to $20 billion
5 More than $20 billion
------------------------------------------------------------------------

Figure 3. Survey Results for Likelihood of Disruption Scenarios
Likelihood

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Figure 4. Survey Results for Likelihood of Disruption Scenarios
Consequence

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Figure 5. Chart of Disruption Scenario Risk Score

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Table 4. Mean Results of Likelihood and Consequence Responses
------------------------------------------------------------------------
Scenario Likelihood (Mean) Consequence (Mean)
------------------------------------------------------------------------
Cyber attacks 3.83 2.67
Restricting fertilizer 3.69 3.08
Undercutting U.S. 3.41 2.96
exports
Bioterrorism 2.55 3.17
------------------------------------------------------------------------

Table 5. Calculated Economic Risk Cost for Each Attack Scenario
----------------------------------------------------------------------------------------------------------------
Consequence
Scenario Likelihood (millions) Risk (millions) Rank
----------------------------------------------------------------------------------------------------------------
Cyber attacks 0.71 $600 $424 4
Restricting fertilizer 0.67 $1,583 $1,065 2
Undercutting U.S. exports 0.60 $863 $520 3
Bioterrorism 0.39 $3,304 $1,282 1
----------------------------------------------------------------------------------------------------------------
Note: Numbers are rounded.

Further refinement of the results was conducted to ultimately
generate a more robust measurement of overall risk for each scenario.
To calculate an overall likelihood percentage, the sum of response
percentage values (as shown in table 2) was divided by the total
available percentage of all responses. To calculate the dollar value
associated with the overall consequence score, the mean score for each
scenario was assessed as a percentile within the associated dollar
range (as shown in table 3).
To then calculate the final risk for each scenario, the calculated
likelihood percentage was multiplied by the consequence dollar value to
determine the overall amount of risk in terms of dollar cost, as shown
in table 5.
Limitations in this study include those intrinsic to Likert scale
surveys (for example, not able to capture all opinions, subjective
results, etc.) and the small sample size of expert participants.
Another limitation of this study is the inherent biases of the
participants who come from a range of professional backgrounds related
to the wheat industry. Therefore, deeper analysis is needed to provide
more robust risk measurements of wheat industry disruption scenarios.
Still, results from this survey point to potential prioritization in
policy considerations to address the threat of potential Russian
disruption of the U.S. wheat industry.
Cultivating Resilience
The United States must act to ensure resilience of domestic wheat
production, storage, and transportation to mitigate the risks outlined
above. First, additional research is needed to measure domestic food
security risks more accurately. A Likert survey of experts like the one
conducted in this study that encompasses a greater number of experts
and uses finer granularity in the scales would be beneficial. A Delphi
study could also serve to identify a stronger consensus of risk to the
U.S. wheat industry from potential Russian action.\93\ Beyond improving
the survey, policymakers and wheat industry leaders should consider the
following measures, which are listed in prioritized order to address
risks from highest to lowest based on the expert survey results shared
above.
---------------------------------------------------------------------------
\93\ The Delphi method is a structured technique used to achieve
consensus among experts by conducting multiple rounds of questions. For
further information, see Bernice B. Brown, Delphi Process: A
Methodology Used for the Elicitation of Opinions of Experts (Santa
Monica, CA: RAND, 1968), https://www.rand.org/pubs/papers/P3925.html.
---------------------------------------------------------------------------
USDA: Proactively Defend Against Biological Warfare Targeting Crops
by Ensuring Sufficient Genetic Diversity of American Grains. Industrial
wheat breeding has helped increase yields over the past century, but
some argue that this has come at the expense of genetic diversity:
``Modern breeding techniques narrowed the genetic base of germplasm
used to develop varieties for cultivation.'' \94\ Genetic uniformity in
modern wheat crops means greater potential vulnerability to new
pathogens. Ensuring a source of genetic variation in wheat is essential
for disease resistance. Landrace wheats play a vital role in doing so.
Landraces are premodern grains that developed naturally over millennia
while adapting to local environmental conditions. Many landraces were
lost during the 20th century as farmers abandoned them in favor of
modern varieties championed in the Green Revolution.\95\ Due to their
wide variety, landraces do not possess the genetic bottleneck of modern
hybrid wheats.
---------------------------------------------------------------------------
\94\ John Lidwell-Durnin and Adam Lapthorn, ``The Threat to Global
Food Security From Wheat Rust: Ethical and Historical Issues in
Fighting Crop Diseases and Preserving Genetic Diversity,'' Global Food
Security 26 (September 2020).
\95\ The full extent of the landrace variety loss since the Green
Revolution is unknown. For further explanation, see Maria R. Finckh, et
al., ``Cereal Variety and Species Mixtures in Practice, With Emphasis
on Disease Resistance,'' Agronomie 20, no. 7 (November 2000), 813-837.
---------------------------------------------------------------------------
Landraces typically produce yields lower than modern wheats, which
can seemingly put them at odds with rising global food demands.
Nevertheless, they serve a critical role in preserving genetic
diversity to ensure American wheat crop resilience should new pathogens
wreak havoc on modern varieties. It is also worth noting that landrace
wheats are reported to have better yields and higher quality attributes
than modern varieties ``under organic and low-input farming systems.''
\96\
---------------------------------------------------------------------------
\96\ Abdullah A. Jaradat, Wheat Landraces: Genetic Resources for
Sustenance and Sustainability (Washington, D.C.: USDA Agricultural
Research Service, n.d.), https://www.ars.usda.gov/ARSUserFiles/
50600000/products-wheat/AAJ-Wheat%20Landraces.pdf.
---------------------------------------------------------------------------
Landraces can and have been preserved in seed banks, which is
worthwhile, but there are limitations in preserving them this way.
Landraces are heterogeneous, meaning that individual specimens of the
plant's spikes stored in banks do not necessarily possess all the
genetic diversity in the landrace variety. In addition, most biologists
agree that active cultivation of landraces is essential to preserve
cultivation knowledge.\97\ Given these circumstances, USDA should find
ways to collaborate with American farmers and researchers to
incentivize and ensure sufficient production levels of landrace wheats.
---------------------------------------------------------------------------
\97\ Lidwell-Durnin and Lapthorn, ``The Threat to Global Food
Security from Wheat Rust.''
---------------------------------------------------------------------------
USDA and DHS: Prepare for Adequate Response to Biological Attack
Against U.S. Wheat Crops. USDA-National Institute of Food and
Agriculture and the Department of Homeland Security established the
National Plant Diagnostic Network (NPDN) during growing fears of
bioterrorism following 9/11 and the 2001 anthrax attacks.\98\ The NPDN
serves as a network of diagnostics laboratories across the country that
help rapidly identify plant disease and pest outbreaks. Since its
establishment, funding and support for the NPDN have begun to
erode.\99\ As the original sponsoring agencies, USDA and DHS should
evaluate the current state of the program to make sure its capabilities
are sufficiently resourced to perform adequate early monitoring and
detection of a biological attack against domestic crops.
---------------------------------------------------------------------------
\98\ For more information about the National Plant Diagnostic
Network, see https://www.npdn.org/.
\99\ Murray, interview.
---------------------------------------------------------------------------
In addition to shoring up early warning capabilities, USDA should
also review the agriculture industry's preparedness to respond to
bioterrorism. If an outbreak of disease against U.S. wheat crops
occurs, agrochemical suppliers will need to deliver treatments to limit
damage. However, supply chains for pesticides can be brittle, as was
the case during the COVID-19 pandemic.\100\ Further analysis of
domestic pesticide treatment inventories and supply chains would help
identify what is needed to boost the resilience of U.S. farms in a
worst-case scenario.
---------------------------------------------------------------------------
\100\ Tom Polansek, `` `Off the Charts' Chemical Shortages Hit U.S.
Farms,'' Reuters, June 27, 2022, https://www.reuters.com/markets/
commodities/off-charts-chemical-shortages-hit-us-farms-2022-06-27.
---------------------------------------------------------------------------
USDA: Pursue and Encourage Alternatives to Conventional Fertilizer.
The American wheat industry's reliance on conventional fertilizer has
become increasingly challenging due to rising prices, global supply
disruptions, and environmental costs. Greater emphasis is needed on
adopting renewable fertilizers. While multiple solutions may be
required to fill the gap, transitioning American agriculture to a more
sustainable and regenerative approach is key.\101\ The Biden
Administration has tried moving on this front and recently announced
$500 million in funding for boosting domestic fertilizer production
that is ``independent, innovative, and sustainable.'' \102\ This effort
is worthwhile to help transition the United States off foreign
fertilizer dependence. It does not, however, preclude the need to
continue transitioning to more sustainable and regenerative
agriculture.
---------------------------------------------------------------------------
\101\ According to the USDA, sustainable agriculture is defined as
practices that ``are intended to protect the environment, expand the
Earth's natural resource base, and maintain and improve soil
fertility.'' For more information, see ``Sustainable Agriculture,''
USDA, https://www.nifa.usda.gov/topics/sustainable-agriculture.
\102\ ``Biden-Harris Administration Makes $500 Million Available to
Increase Innovative American-Made Fertilizer Production,'' USDA,
September 27, 2022, https://www.usda.gov/media/press-releases/2022/09/
27/biden-harris-administration-makes-500-million-available-increase.
---------------------------------------------------------------------------
One facet of sustainable agriculture that would help provide a
viable alternative to synthetic fertilizers is the greater use of cover
crops. Growing the same monoculture crop in the same field for years on
end, as most conventional U.S. farmers do, damages the soil microbiome
as the same nutrients are depleted over time. Conventional agriculture
deals with this problem by applying large amounts of synthetic
fertilizer to the soil. When cover crops are added to crop rotation,
the cover crop plants naturally fertilize and rejuvenate soil health.
Furthermore, a growing body of scientific research shows that yields
from sustainable agricultural systems are comparable to that of
conventional systems.\103\
---------------------------------------------------------------------------
\103\ For a summary of this research, see The Fertilizer Trap: The
Rising Cost of Farming's Addiction to Chemical Fertilizers
(Minneapolis: Institute for Agriculture and Trade Policy, November 8,
2022), 11, https://www.iatp.org/the-fertiliser-trap.
---------------------------------------------------------------------------
The downside to cover crops is the inability to grow a desired crop
(for example, wheat) for that growing season, which would reduce
overall American wheat output. Options exist to compensate for drops in
annual grain yields that would result from the broader use of cover
crops. Addressing all options is beyond the scope of this essay, but
one example is choosing cover crops that can act as cash crops that
produce food and simultaneously amend the soil. An example of this
would be cover crop legumes, which fix nitrogen to the soil that would
be available for the next season's wheat.
Funding is another limiting factor and will be necessary to
incentivize American farmers to widely adopt the use of cover crops.
Sustainable agriculture receives little government funding compared to
industrial agriculture. The most recent farm bill (a package of
legislation Congress passes every 5 years to support U.S. agriculture)
provided less than seven percent of its funding for conservation
practices.\104\ USDA can increase funding for cover crop implementation
by reducing farm bill spending in other areas overdue for adjustment,
like conventional corn subsidies.\105\
---------------------------------------------------------------------------
\104\ ``Farm Bill Spending,'' USDA, https://www.ers.usda.gov/
topics/farm-economy/farm-commodity-policy/farm-bill-spending/.
\105\ Tara O'Neill Hayes and Katerina Kerska, ``PRIMER: Agriculture
Subsidies and Their Influence on the Composition of U.S. Food Supply
and Consumption,'' American Action Forum, November 3, 2021, https://
www.americanactionforum.org/research/primer-agriculture-subsidies-and-
their-influence-on-the-composition-of-u-s-food-supply-and-consumption/.
---------------------------------------------------------------------------
USDA: Establish a National Strategic Grain Reserve. As previously
noted, if Russia succeeded in some capacity to disrupt U.S. wheat
production, resulting in domestic grain shortages, no current national
wheat reserve exists to reduce the ensuing effects. Given how essential
grain is to the U.S. food supply and the increasing probability of
climate change's impact on global grain production, a strategic grain
reserve makes sense. The need for a reserve has risen in recent times.
For instance, droughts in 2012 affected corn production to such an
extent that the United States had to import corn from Brazil, a
surprising development for America as the world's leading corn
producer.\106\ Converting any remaining funds within the Bill Emerson
Humanitarian Trust into a physical grain reserve and supplementing it
by redirecting funding from conventional commodity crop subsidies could
provide this much-needed resilience in our national food security.
---------------------------------------------------------------------------
\106\ Howard Schneider, ``In Sign of Growing Clout, Brazil's Corn
Helps Hold Up U.S. Market,'' Washington Post, November 18, 2012.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Ukrainian President Volodymyr Zelensky, right, walks with
Minister of Infrastructure Oleksandr Kubrakov during visit to
Chornomorsk Sea Trade Port to watch Turkish-flagged dry cargo
ship Polarnet loaded with grain for export, July 29, 2022, in
Chornomorsk, Odesa Oblast, Ukraine (Ukrainian Presidential
---------------------------------------------------------------------------
Press Office/Ukraine Presidency/Alamy Live News).

State and Commerce Departments: Encourage Import-Dependent
Countries to Boost Domestic Food Production to Minimize Exposure to
Russian Grain Trade Manipulation. Having export markets available to
American wheat not only can be lucrative for farmers and commodity
traders but also can undermine efforts in those destination countries
to develop greater self-sufficiency in food production. The United
States will always need to produce more wheat than it consumes on
average because this helps buffer against the effects of unforeseen
production shortfalls regardless of the cause. It also assists trade
partners in meeting their food requirements when they experience
unexpected shortages or find themselves in positions where they cannot
realistically become fully self-sufficient in their own food
production. However, in a world where Russia is a global food power and
can use inputs and commodities as weapons to win concessions, allies
and partners should be encouraged to reduce their dependence on foreign
food sources. Although this could reduce U.S. wheat exports in the long
run, it would, more importantly, mitigate Russia's ability to exploit
vulnerable countries to enhance their Great Power status.
DHS: Harden Information and Operational Technology Networks Used
for Grain Production, Storage, and Transportation. Cyber security
remains a challenge for organizations across all industries, but
implications for breaches to critical infrastructure networks such as
those in the grain industry are more severe and require greater
attention to ensure proper security practices. For wheat industry
organizations' information technology and operational technology
networks, like other industries, known best practices provide the
greatest defense against cyber attacks. However, many businesses fail
to implement the full range of best practices due to limitations in
understanding and the failure of company executives to invest
appropriately in network defense.
Wheat industry leaders can leverage the National Institute of
Standards and Technology cyber-security framework for guidance.\107\
Taking this proactive approach to network defense will limit exposure
to disruptive intrusions like the ransomware attacks that recently
plagued Midwestern grain elevators.
---------------------------------------------------------------------------
\107\ For more information, see ``Cybersecurity Framework,''
National Institute of Standards and Technology, https://www.nist.gov/
cyberframework.
---------------------------------------------------------------------------
Conclusion
As a rival in strategic competition and as the emerging food
superpower, Russia is uniquely positioned to disrupt U.S. wheat
production, storage, and delivery. Moscow has already demonstrated its
intentions to attack U.S. interests in adversarial competition at
levels below armed conflict, and future attempts to do so could
realistically involve targeting the American wheat industry. As the
most important food staple in America, wheat supply degradation could
have significant consequences for domestic food security and, by
extension, trust in the U.S. Government. Should Russia pursue such a
strategy, its tactics could range from cyber attacks on grain
infrastructure to manipulating global fertilizer and wheat export
markets to covert antiagriculture biowarfare.
To mitigate these threats, American policymakers should consider a
range of policy options. First, further research is needed to measure
risks of Russian disruption to the U.S. wheat industry. Results would
more accurately prioritize policy considerations. In the meantime,
prioritized policy considerations should include:

improving biodiversity in U.S. wheat production

ensuring sufficient resourcing for detection and response to
a biological attack against U.S. crops

enhancing sustainable agriculture to reduce dependence on
imported fertilizer

establishing a national grain reserve

reducing global exposure to Russian grain trade manipulation

encouraging the improved implementation of cyber security
best practices throughout the wheat industry.

With an increased focus on reducing food system vulnerabilities,
U.S. leaders and the world's citizens can reap a harvest of improved
global security. JFQ
______

Submitted Report by Hon. Brad Finstad, a Representative in Congress
from Minnesota
Examining Farm Size & Payment Limits
Prepared for and funded by: Southwest Council of Agribusiness

Prepared by: Bart L. Fischer, Joe L. Outlaw

October 2023

Explosive growth in productivity over the last 100 years--coupled
with extraordinary innovation in mechanization--has meant that fewer
and fewer people are needed to feed, clothe, and fuel our nation.
Perhaps no one has captured this sentiment better than U.S. Secretary
of Agriculture Tom Vilsack, when at a Congressional hearing in February
2016 he said:

``Every one of us that is not a farmer is not a farmer
because we have farmers. We delegate the responsibility of
feeding our families to a relatively small percentage of this
country. If you look at 85 percent of what is grown in this
country, it is raised by 200,000 to 300,000 people. That is
less than \1/10\ of 1 percent of America.
``But the other 99 percent of us can be lawyers and doctors
and Peace Corps volunteers and economists and people that work
for government and all of the other occupations because we
never think about, well, gee, do I have to actually grow the
food for my family? No. I go to the grocery store and get it.
``So, I am free to do whatever I want to do with my life.
That is an incredible freedom that we take for granted in this
country. It is not true in most of the countries in this world.
And then when we go to the grocery store, we walk out of it
with more money in our pocket as a percentage of our paychecks
than anybody else in the world.'' \1\
---------------------------------------------------------------------------
\1\ https://www.govinfo.gov/content/pkg/CHRG-114hhrg20558/pdf/CHRG-
114hhrg20558.pdf.

The U.S. has been on this path of fewer but larger farms since the
beginning of the last century. Data from the 1920 Census indicated
there were 6,448,343 farms with an average farm size of 148.2 acres.\2\
According to the 2017 Census of Agriculture, in 2017 there were
2,042,220 farms with an average farm size of 441 acres.\3\ Not only has
average farm size been growing, it is also resulting in a shift in the
composition of farms. One of the pioneers in all of agricultural
economics, Earl Heady, from Iowa State University, predicted this 40
years ago:
---------------------------------------------------------------------------
\2\ 1920 Census of Agriculture. Accessed at https://
agcensus.library.cornell.edu/census_year/1920-census/.
\3\ 2017 Census of Agriculture. Accessed at https://
www.nass.usda.gov/Publications/AgCensus/2017/Full_Report/
Volume_1,_Chapter_1_US/usv1.pdf.

``We are heading towards a bimodal farm distribution wherein
we will have a rather large number of part-time, retirement,
and similar farms where it is not chiefly size economies which
tie them to the land, but the utility they realize from the set
of satisfaction derived from country living and a smaller
number of larger farms which dominate the nation's food and
fiber production.'' \4\
---------------------------------------------------------------------------
\4\ Heady. Discussion: Purposes and Uses of Economics of Size
Studies in Economies of Size Studies: A collection of papers presented
August 3-4, 1983, at a workshop at Purdue University sponsored by NCR-
113 (Farm Financial Management Committee, Farm Foundation and USDA
Center for Agricultural and Rural Development.

Heady's observations have materialized as reflected in Figure 1.
According to USDA's Economic Research Service (ERS), ``Most farms are
small, but the majority of production is on larger farms.'' \5\ ERS
also noted that small-scale operators depend on off-farm income while
large-scale farms derive almost all of their income from the farm. It
is important to note here that 98% of farms, irrespective of size, are
family owned and operated. ERS has observed that most of the
``nonfamily'' enterprises operate in high-value specialty crops (e.g.,
wine grapes) that are not impacted by Title [I] farm program payment
limits (although they too are impacted by payment limits on other
programs, most notably ad hoc disaster assistance). Moreover, many in
the ``small'' and even ``midsize'' category are in fact part-time,
retirement, or lifestyle farms that fundamentally do not rely upon the
farm income to continue.
---------------------------------------------------------------------------
\5\ https://www.ers.usda.gov/data-products/ag-and-food-statisitcs-
charting-the-essentials/farming-and-farm-income/.
---------------------------------------------------------------------------
Figure 1. Median income of farm households, by income source and farm
type, 2021
Percent of U.S. farms or production

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

GCFI = annual gross cash farm income before expenses.
Note: Nonfamily farms are those where the majority of the
operation is not owned by an operator and their relatives.
Components may not sum to 100 percent because of rounding.
Source: USDA, Economic Research Service and USDA, National
Agricultural Statistics Service, Agricultural Resource
Management Survey. Data as of December 1, 2022.

Heady's observations also have significant policy implications.
Namely, who is the farm bill--and the farm safety net in particular--
intended to benefit? In remarks during a March 16, 2023, hearing before
the Senate Committee on Agriculture, Nutrition, and Forestry, Secretary
Vilsack testified that ``our policies have ensured an increasingly
abundant food supply, growth in farm size and consolidation has put
extreme economic pressure on small and medium sized farms and our rural
communities . . . . We must ask ourselves: do we want a system that
continues to force the big to get bigger and the small and underserved
to get out or do we want a build a more innovative system?''
This statement by Secretary Vilsack appears to be a reaction to the
answer to a question from a reporter by President Trump's Secretary of
Agriculture, Sonny Perdue at the World Dairy Expo in Madison, Wisconsin
on October 1, 2019. It was reported he said ``get big or get out'',
however transcripts from the event indicate the reporter used this
quote in a follow-up question rather than being said by Secretary
Perdue. Secretary Perdue's quote that was labeled ``get big or get
out'' is summarized below.\6\
---------------------------------------------------------------------------
\6\ Heemstra (accessed at https://drgnews.com/2019/10/09/us-ag-
secretary-setting-the-record-straight-about-get-big-or-get-out-claim/).

``The 2018 Farm Bill will stem the flow of that. Now, what we
see obviously, is economy of scale having happen[ed] in
America, big get bigger and small go out, and that's kind of
what we've seen here. It's very difficult in the economy of
scale, with the capital needs, and all the environmental
recommendations, and everything else today, to survive milking
---------------------------------------------------------------------------
40, 50, 60, or even 100 cows.''

The United States has grappled with this small-farm versus large-
farm debate for decades. Congress has invested a significant amount of
resources in helping small, beginning, socially-disadvantaged, limited
resource, and veteran producers get started in production agriculture.
Congress has also significantly curtailed access to the farm safety net
via means testing, actively engaged determinations, and payment limits.
In this report, we delve into these topics, examining economies of size
in production agriculture and exploring the implications of payment
limits in particular.
Economies-of-Size in Agriculture: An Economic Review
The topic of economies-of-size in agriculture is one of the most
researched areas in agricultural economics (Madden; \7\ Shertz; \8\
Hall and LeVeen \9\). In general, economies-of-size studies have
attempted to discern the relationships between the size of a firm and
the unit cost of a commodity (Harrington).\10\ Anyone who studies
production economics or economics in general has been trained that all
cost relationships can be expressed in terms of unit cost curves of a
single or composite product for various firm sizes. This is important
because the long-run average cost (LRAC) curve is the envelope of the
short-run average cost (SRAC) curves (Figure 2).
---------------------------------------------------------------------------
\7\ Madden. Economies of Size in Farming. AER-107. Washington,
D.C.: Economic Research Service, U.S. Departmentof Agriculture, 1967.
\8\ Shertz. Another Revolution in U.S. Farming. USDA: AER Report
#441, 1979.
\9\ Hall and Leveen. Farm Size and Economic Efficiency: The Case of
California. American Journal of Agricultural Economics 60 (1978): 589-
600.
\10\ Harrington. Purposes and Uses of Economies of Size Studies in
Economies of Size Studies: A collection of papers presented August 3-4,
1983, at a workshop at Purdue University sponsored by NCR-113 (Farm
Financial Management Committee, Farm Foundation and USDA Center for
Agricultural and Rural Development.
---------------------------------------------------------------------------
Most agricultural economists have been trained that the shape of
the LRAC curve is more in line with Figure 3, meaning that there is a
range of output where it is beneficial to a producer to increase
output. There has always been the thought that the LRAC curve turns up
at some level of output (seen in Figure 3) making it less profitable to
continue to increase size.
Recent studies indicate that the LRAC cost curve may actually be L
shaped which would mean that farm economics would dictate greater
expansion of output does not result in lower per unit profits (Duffy;
\11\ Hallam \12\). It is also difficult to blame farmers for increasing
the size of their operations given that productivity growth is the
principal factor responsible for 80 percent of the sector's post-war
growth (Pardey and Alston).\13\
---------------------------------------------------------------------------
\11\ Duffy. Economics of Size in Production Agriculture. Journal of
Hunger & Environmental Nutrition, 2009 July 4 (3-4): 375-392.
\12\ Hallam. Economies of Size and Scale in Agriculture: An
Interpretive Review of Empirical Measurement. Review of Agricultural
Economics, Vol. 13, No. 1, January 1991.
\13\ Pardey and Alston. Unpacking the Agricultural Black Box: The
Rise and Fall of American Productivity Growth.Journal of Economic
History, Vol. 81, No. 1 (March 2021).
---------------------------------------------------------------------------
Figure 2. Long-run average cost curve (LRAC) is the envelope of short-
run average cost curves (SRAC)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Figure 3. Theoretical Shape of the Long-run Average Cost (LRAC) Curve

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

In a summary by USDA-ERS economists, structural change in livestock
production facilitated productivity growth, cost reduction, and
increased international competitiveness, while in crops, labor-saving
substitution and technical change have been important.\14\ Nigel Key
(also with USDA-ERS) found that larger farms in the Midwest are more
productive than smaller farms.\15\ In addition, he found that policies
focused on large farms would have increased aggregate total factor
productivity more than 32 times more than similar policies targeting
the smallest farms. His results support the notion that it is the
increase in size that has kept the U.S. in its place as a low-cost
producer of corn and soybeans.
---------------------------------------------------------------------------
\14\ MacDonald, Hoppe and Newton. Tracking Consolidation in U.S.
Agriculture presented at Farm Size and Productivity: A Global Look.
Washington DC, February 2-3, 2017 (accessed at https://
www.farmfoundation.org/wp-content/uploads/attachments/1942-Session 1
MacDonald Hoppe Newton.pdf).
\15\ Key. Farm Size and Productivity Growth in the United States
Corn Belt. Food Policy, 84 (2019): 186-195.
---------------------------------------------------------------------------
By any account, increasing efficiency and size has also facilitated
enormous increases in productivity, with the benefit accruing to
consumers. Perhaps it has become trite to say the U.S. food supply is
the safest, most abundant, and most affordable in the world, but it is
an important truth, and it is inexorably connected to the productivity
of U.S. farms.
Economies-of-Size and Profitability
The percent of farms and land in farms gathered in the ARMS survey
and published by USDA is presented in Table 1 by sales class. Many have
seen this data so often that we are numbed to the implications of what
the economic sales class means. This means that farms that sell between
$1,000 and $9,999 represent 51 percent of all farms and work a little
more than nine percent of the land. What gets lost in this is that
sales class is a very different thing from farm profit.

Table 1. Percent of Farms and Land in Farms Along with Average Farm Size
by Economic Sales Class, U.S., 2021.
------------------------------------------------------------------------
Number of Land in Farms Average Farm
Farms (%) (%) Size (Acres)
------------------------------------------------------------------------
$1,000-$9,999 51.0 9.3 81
$10,000-$99,999 30.5 20.8 304
$100,000-$249,999 6.7 14.7 973
$250,000-$499,999 4.4 14.3 1,448
$500,00[0]-$999,999 3.5 15.4 1,942
$1,000,000 or more 3.9 25.5 2,920
--------------------------------------------
Total.................... 100.0 100.0 445
------------------------------------------------------------------------
Source: Farms and Land in Farms 2021 Summary (February 2022) USDA,
National Agricultural Statistics Service (accessed at https://
www.nass.usda.gov/Publications/Todays_Reports/reports/fnlo0222.pdf).

The actual profit margin (what is left after expenses are paid) in
U.S. agriculture varies by crop, year, and farm. As noted by
Langemeier, the profit margin for Western Indiana corn growers averaged
6% over the 2015-19 period and was projected to be 3.6% and 3.4%,
respectively for 2020 and 2021.\16\ Even if you assume a more
optimistic 10% profit margin on $100,000 annual gross sales for a farm,
that only leaves $10,000 profit for the farm in a year.
---------------------------------------------------------------------------
\16\ Langemeier (accessed at https://ag.purdue.edu/commercialag/
home/sub-articles/2020/09/measuring-farm-profitability/).
---------------------------------------------------------------------------
Table 2 takes the data from Table 1 and multiplies the economic
sales classes by 10% to translate into a proxy for farm profits. While
each individual has their own level of income they would need to live
on from farming, it is quite apparent that you have to get close to
$500,000 in sales to return a profit level that would be in the area of
what most would call a living wage (or $50,000). While this example
would yield a living wage (by this definition), that is far from the
full story. To be clear, we are talking about a scenario where $500,000
is being put at risk--and crop production is a very risky enterprise--
in hopes of earning $50,000.
It should be clear that those ``farmers'' operating with receipts
that are not capable of sustaining their families rely upon outside
sources for income. In most cases, these are people who are living
their best life as described by Earl Heady above. Why does it matter?
It doesn't as long as policies are not designed to reward those living
a lifestyle while hurting those actually trying to earn a living from
agriculture.

Table 2. Percent of Farms and Land in Farms Along with Average Farm Size
by Farm Profitability, U.S., 2021
------------------------------------------------------------------------
Number of Land in Farms Average Farm
Farms (%) (%) Size (Acres)
------------------------------------------------------------------------
8$100-$9990 51.0 9.3 81
8$1,000-$9,9990 30.5 20.8 304
8$10,000-$24,9990 6.7 14.7 973
8$25,000-$49,9990 4.4 14.3 1,448
8$50,00[0]-$99,9990 3.5 15.4 1,942
8$100,000 or more0 3.9 25.5 2,920
--------------------------------------------
Total.................... 100.0 100.0 445
------------------------------------------------------------------------
Source: Farms and Land in Farms 2021 Summary (February 2022) USDA,
National Agricultural Statistics Service (accessed at https://
www.nass.usda.gov/Publications/Todays_Reports/reports/fnlo0222.pdf).

Economies-of-Size and Terms of Trade
There is another facet to economies-of-size that needs to be
considered in this discussion. When producers of a commodity are known
as the low-cost producer, this generally goes hand-in-hand with having
taken advantage of economies-of-size to lower production costs.
Economies-of-size can affect international competitiveness and changes
in terms of trade (Hallam).\17\
---------------------------------------------------------------------------
\17\ Hallam. Economies of Size and Scale in Agriculture: An
Interpretive Review of Empirical Measurement. Review ofAgricultural
Economics, Vol. 13, No. 1, January 1991.
---------------------------------------------------------------------------
Even though farmers in the U.S. have been consolidating and
increasing the size and scale of operations, the share of exports for
many commodities has been declining as countries around the world
increase the size and scale of their operations in order to compete
with U.S. farmers. Figure 4 shows how the U.S. share of world trade has
declined over the past 50 years. Even with a tremendous boost in
productivity in the U.S., the share of world exports has declined for
most of the major crops.
So what? Think of what would have happened if the United States
hadn't been consolidating and becoming more completive on the LRAC cost
curve. The results would be considerably worse, both for American
producers (in terms of market share) and for consumers world-wide.
Figure 4. U.S. Share of World Trade by Major Commodity, 1979/71 to
2022/23

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Data was obtained from USDA-FAS, Production, Supply
and Distribution PS&D online database (accessed at https://
apps.fas.usda.gov/psdonline/app/index.html - /app/advQuery).

Consider the loss in share relative to Brazil's increase in trade
shares for corn and soybeans (Figures 5 and 6). Brazil currently
exports more corn and soybeans than the United States; however, this is
a new phenomenon in corn while Brazil's trade share surpassed the U.S.
for soybeans somewhere around 2015. There are plenty of economic and
policy reasons why this has occurred, including their relatively small
domestic use of corn and soybeans, but one additional thing to consider
is the relative size of operations in Brazil (and the relationship
between size and cost competitiveness). Figure 7 provides a comparison
of the percentage of farms by size in each of the countries. More
research is needed here; however, it is interesting and noteworthy that
in Brazil nearly 50 percent of their operations are over 1,000 acres,
while in the United States 50 percent of the operations are below 100
acres.
Figure 5. U.S. and Brazil Corn Export Shares

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: Data was obtained from USDA-FAS, Production, Supply
and Distribution PS&D online database (accessed at https://
apps.fas.usda.gov/psdonline/app/index.html - /app/advQuery).
Figure 6. U.S. and Brazil Soybean Export Shares

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Source: STRATFOR. Accessed at https://worldview.strakor.com/
article/us-brazil-farm-size-comparison.
Policy Considerations
The farm safety net--including the permanent disaster programs--are
all based on per-unit or per-acre payment rates that scale with the
size of losses. This makes sense given that mitigating risk is the
underlying purpose of these programs. While payments are calculated
based on the magnitude of the loss, payment limits are then applied as
a final step before USDA issues payments. Importantly, payment limits
do not entitle a producer to a payment of that magnitude; rather, it
simply limits the amount of losses for which the producer can receive
assistance--meaning that any losses exceeding the payment limit are
borne entirely by the producer.
History of Payment Limits
Payment limits first appeared in the 1938 Farm Bill, limiting
producers to $10,000 per person per year. Modern-day payment limits
trace their roots to the 1970 Farm Bill, which implemented a $55,000
payment limit for each of the annual programs for wheat, feed grains,
and cotton in crop years 1971, 1972, and 1973--for an effective payment
limit of $165,000 if producers grew all three crops. The 2018 Farm Bill
imposes a limit of $125,000 per person or legal entity (with the
exception of joint ventures and general partnerships) for ARC and PLC.
Several other programs are also subject to payment limits as noted in
Table 3.

Table 3. Summary of USDA Program Payment Limits
------------------------------------------------------------------------
Per person or Legal
Entity (or producer for
Program Payment Type TAP) Per Year
Limitation Amount 2019
Through 2023
------------------------------------------------------------------------
Commodity Programs
Price Loss Coverage (PLC) and Agricultural \1\ $125,000
Risk Coverage (ARC)--other than peanuts
Price Loss Coverage (PLC) and Agricultural \1\ $125,000
Risk Coverage (ARC)--peanuts
Conservation Programs
Conservation Reserve Program (CRP)--annual $50,000
rental payment and incentive payment
Emergency Conservation Program (ECP)--per \2\ $500,000
disaster event
Emergency Forest Restoration Program (EFRP)-- $500,000
per disaster event
Conservation Stewardship Program (CSP) $200,000
Environmental Quality Incentives Program $450,000
(EQIP)
Agricultural Management Assistance (AMA) $50,000
Disaster Assistance Programs
Livestock Forage Disaster Program (LFP) \4\ $125,000
Noninsured Crop Disaster Assistance Program \3\ $125,000/$300,000
(NAP)
Tree Assistance Program (TAP) \5\ 1,000 acres
------------------------------------------------------------------------
[\1\ Decouples the combined $125,000 payment limit for PLC, ARC, from
Loan Deficiency Program (LDP) and Market Loan Gain (MLG) for covered
commodities and peanuts. Beginning with crop year 2019, LDP's and
MLG's are no longer subject to Payment Limitation or Payment
Eligibility provisions, including ``actively engaged in farming'' and
`cash-rent tenant' provisions for covered commodities and peanuts. ARC
and PLC payment are subject to a combined annual limitation of
$125,000.]
[\2\ ECP payment limitation is increased from $200,000 per disaster
event to $500,000 per disaster event.]
[\3\ A separate maximum payment limitation is provided of $125,000 on
NAP payments for losses to crops with catastrophic coverage and a
$300,000 maximum payment limitation on NAP payments for losses to
crops with buy-up coverage.]
\4\ The $125,000 payment limitation applicable to Emergency Assistance
for Livestock, Honey Bees, and Farm Raised Fish Program (ELAP) was
removed in 2019. The $125,000 payment limitation applicable to
Livestock Indemnity Program (LIP) was removed in 2017.]
[\5\ TAP no longer has a dollar limitation; however, there is a per
program year acreage limitation of 1,000 acres.]

Source: https://www.fsa.usda.gov/Assets/USDA-FSA-Public/
usdafiles/FactSheets/payment-elligibility-limitations-
factsheet.pdf.
Editor's note: the table, as embedded in the submitted
document, omitted the table notes. The table notes have been
included herein from the linked fact sheet.

While payment limits have historically been focused on Title [I],
the 1981 Farm Bill added a $100,000 limit for disaster payments for
wheat, feed grains, upland cotton, and rice for each of the 1982
through 1985 crop years. More recently, the 2014 Farm Bill established
permanent baseline for several disaster programs, including the
Livestock Forage Program (LFP), the Emergency Assistance for Livestock,
Honeybees and Farm-Raised Fish Program (ELAP), the Livestock Indemnity
Program (LIP), and the Tree Assistance Program (TAP). While all of
these were initially payment limited in some form, following successive
natural disasters, Congress has chosen to relax the payment limitations
for these programs, as reflected in Table 4.

Table 4. Recent Payment Limit Changes for Disaster Programs
------------------------------------------------------------------------
Bipartisan Budget
Disaster Programs 2014 Farm Bill Act of 2018 2018 Farm Bill
------------------------------------------------------------------------
Livestock Forage Combined Combined $125,000 $125,000
Program (LFP) $125,000 limitation
Emergency payment limitation; no cap No payment
Assistance for limitation; on ELAP spending limitation;
Livestock, total annual no cap on
Honeybees and cap of $20 ELAP spending
Farm-Raised Fish million on
Program (ELAP)
Livestock ELAP No payment No payment
Indemnity Program spending limitation limitation
(LIP)
------------------------------------------------------------------------
Tree Assistance Separate No payment No payment
Program (TAP) $125,000 limitation; maximum limitation;
payment of 1,000 acres maximum of
limitation; 1,000 acres
maximum of
500 acres
------------------------------------------------------------------------
Source: author compilation.

Payment Limits in Context
Have payment limits kept up with inflation?

As noted above, modern-day payment limits trace their roots to the
1970 Farm Bill with a $55,000 payment limit for each of the annual
programs for wheat, feed grains, and cotton in crop years 1971, 1972,
and 1973. Figure 8 illustrates the magnitude of that payment limit
($55,000 for a single program/crop) were it in place today and indexed
for inflation. In fact, that $55,000 payment limit would be $413,247
today, more than three times larger than the current combined payment
limit of $125,000 per person or legal entity applying to all covered
commodities eligible for ARC and PLC. If the limits from the 1970 Farm
Bill were combined for a producer growing all three crops (i.e.,
$165,000), the payment limit today would be just over $1.2 million.
Again, this doesn't mean a producer is entitled to a payment of $1.2
million; it simply means that any losses up to $1.2 million could be
covered. Instead, under current law, any losses beyond $125,000 are
borne entirely by the producer.
Figure 8. Initial 1970 Farm Bill Payment Limit ($55,000) Indexed for
Inflation

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Aren't payment limits good for small farms?

While we've long heard arguments that payment limits help smaller
producers, evidence of that actually being the case is harder to come
by. Instead, payment limits tend to simply limit support available for
larger producers. There are certainly exceptions. In the case of ad hoc
assistance that is provided as a finite amount of funding allocated to
USDA--for example, the funding provided for implementing the Emergency
Relief Program--the payment limit could funnel more support to smaller
producers by leaving larger full-time producers to face more exposure
on their own. But, importantly, in the farm bill debate, these
arguments that payment limits help small producers really hold very
little water. We examined CBO scores for the last several farm bills
and see virtually no case where the imposition of payment limits freed
up significant additional funding for programmatic improvements for
smaller farms.

With means testing and actively engaged requirements, what purpose
does the payment limit serve?

USDA dedicates 558 pages in its ``short reference'' to explaining
eligibility rules and limitations. Importantly, producers must qualify
as actively engaged in farming to be eligible for assistance, including
(1) making a significant contribution to the farming operation of
capital, equipment, or land, or a combination thereof; (2) making a
significant contribution to the farming operation of active personal
labor, active personal management, or a combination thereof; (3)
sharing in the profits or losses from the farming operation at a level
that is commensurate with the person or entity's contributions to the
operation; and (4) their contributions to the farming operation must be
at risk for loss, with the level of risk commensurate with the person
or entity's claimed share of the farming operation. Beyond that,
producers must also certify that their 3 year average Adjusted Gross
Income (AGI) is less than $900,000 to be eligible for programs like ARC
and PLC. With these provisions in place, what purpose does the payment
limit serve? Beyond that, in light of the focus on risk management,
this question becomes even more acute. On the one hand, Congress is
providing tools to help producers mitigate risk; on the other, they are
completely undermining those tools with payment limits that become even
more binding as the losses mount, a topic we explore in detail in the
following section.
Effectiveness of Payment Limits
In the 2014 Farm Bill, Congress abandoned the Direct Payment
program, which made decoupled payments to producers regardless of
market conditions. Unfortunately, this shift in policy focus to the
provision of risk management tools did not come with a corresponding
discussion on the appropriate role of payment limitations. For example,
if producers only receive assistance when they face market losses, does
it make sense to apply a payment limit that completely undermines the
efficacy of the programs themselves (especially in light of all of the
other requirements that a producer must meet to be eligible in the
first place).
In fact, the payment limit is a regressive policy tool. As the loss
grows deeper, the payment limit results in a smaller and smaller share
of the loss being indemnified, as illustrated in Figures 9 through 11
and Tables 5 through 7 for wheat, corn, and cotton, respectively. For
example, in Figure 9, if the marketing year average price for wheat is
$5.33/bu (or 3% below the $5.50/bu Reference Price for wheat) and
assuming a 41.5 bu/ac yield (equal to the national average PLC yield)
along with an 85% payment factor, the $125,000 payment limit would
allow for a full payment on over 20,000 acres. What if the loss is
deeper--say a marketing year average price of $4.13/bu (or half-way
between the Reference Price and Loan Rate for wheat)? In that case, a
producer would be limited to support on just 2,571 acres.
This is illustrated even more clearly in Table 5. If the average
wheat price for the marketing year fell to $2.94/bu (equal to the Loan
Rate), the payment limit would have the effect of reducing support by
91% compared to what producers would have otherwise received on a
15,000 acre operation. But, that only impacts large farms right? Well,
in fact, a fairly small- to standard-sized wheat operation of 3,000
acres would see their support reduced by more than 50% due to the
payment limit. So, the idea that the payment limit protects smaller- or
mid-sized operations just doesn't add up. To add insult to injury, the
payment limit is most binding when the support is most needed.
As noted in Figure 12 and Table 8, this dynamic is even more
pronounced for ARC. Using corn as an example, we assume a county
average yield of 180 bu/ac and project the crop year 2025 benchmark
average price using the latest WASDE price forecast. At a marketing
year average price of $3.64/bu (which would barely trigger a payment
under PLC), a 3,000 acre corn farm enrolled in ARC would be limited to
support on just 890 acres. The payment limit would have the effect of
reducing support by 70% compared to what producers would have otherwise
received in that scenario.
Figure 9. Wheat Acres Receiving Full PLC Payment by Marketing Year
Average Price

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Table 5. Reduction in PLC Payments for Wheat due to Imposition of
$125,000 Payment Limit

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Figure 10. Corn Acres Receiving Full PLC Payment by Marketing Year
Average Price

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Table 6. Reduction in PLC Payments for Corn due to Imposition of
$125,000 Payment Limit

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Figure 11. Cotton Acres Receiving Full PLC Payment by Marketing Year
Average Price

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Table 7. Reduction in PLC Payments for Cotton due to Imposition of
$125,000 Payment Limit

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Figure 12. Corn Acres Receiving Full ARC Payment by Marketing Year
Average Price

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Note: assumes stable county yields of 180 bu/ac using a
projected benchmark price for crop year 2025.
Table 8. Reduction in ARC Payments for Corn due to Imposition of
$125,000 Payment Limit

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Payment Limit Considerations in the Next Farm Bill
Given other checks and balances, are payment limits even
needed? Arguably, if the objective is ensuring that assistance
is not provided to those who are not actively engaged (or at
risk) in farming or to those who are high-income individuals,
the United States already has tools in place to prevent those
individuals from qualifying--namely very robust means testing
and actively engaged determinations. To that end, it's
reasonable to argue that the payment limits make no sense at
all, particularly if the point of the farm safety net is to
make risk management tools available to producers who are not
otherwise disqualified.

Absent common-sense improvements to payment limits, the need
for ad hoc assistance will continue. It seems counterintuitive
to limit the assistance available via ARC or PLC only for
Congress to have to step in with ad hoc assistance. If a goal
of the next farm bill is to obviate the need for ad hoc
assistance, then expanding payment limits to fit the reality of
production in 2023 is warranted. Either the farm safety net is
designed to work for all growers or pressure will remain to
provide ad hoc assistance (subject to separate payment limits,
as has been the case for the last several years). If
policymakers want to avoid ad hoc assistance, then safety net
payments need to be proportional to loss.

Assistance in the farm safety net is already proportional to
losses. Long gone are the days where farmers get money simply
for being farmers. The safety net is now designed to provide
assistance only in times of loss when market returns are below
historic norms. As we've noted above, the payment limit
significantly impacts on the efficacy of this safety net
because of its regressive effect. There is a wisdom in letting
payment size scale with losses.

Payment limits should be adjusted to reflect inflation and
the long-run costs of farming. In the 1970s when the $165,000
payment limits were first introduced, a new cotton stripper or
grain harvester would have cost less than $50,000. Today, when
the combined limit is $125,000, such machines cost close to $1
million. For family businesses committed to farming, the
margins are incredibly thin considering the risks involved. In
some regions, the margins are thinner and the risks are
greater, meaning farms have grown larger to lower their average
costs and remain competitive. While a pure inflation index is
unlikely, the limits should be adjusted given this reality.

If payment limits remain, some common-sense improvements are
needed. While we think a conversation about eliminating payment
limits is warranted, we are under no illusion that is
politically feasible. With that said, recent disaster packages
have provided a roadmap for additional common-sense
improvements to payment limits in Title [I] of the next farm
bill. For example, flexibility with the permanent disaster
programs was highlighted in Table 4. In addition, the Wildfire
and Hurricane Indemnity Program Plus (WHIP+) imposed a payment
limitation of $125,000 per person or legal entity for all 3
crop years (2018, 2019 and 2020) but doubled the limit to
$250,000 for each of the crop years (with an overall limit of
$500,000 for all 3 crop years) if 75% of income was derived
from farming, ranching, or forestry.\18\ WHIP+ borrowed the 75%
waiver concept from a provision in the 2002 Farm Bill whereby a
producer was exempt from the AGI means test if more than 75% of
their income came from farming, ranching, or forestry. In
addition, the Coronavirus Food Assistance Program (CFAP)
applied the 75% waiver to an AGI means test of $900,000 and
imposed a payment limit of $250,000 which they allowed to
expand up to $750,000 depending on the number of individuals
involved in the entity and their contribution of active
personal management and active personal labor.\19\
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\18\ https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/
FactSheets/2019/wildfire-and-hurricane-indemnity-program-
plus_whip_august_2020.pdf.
\19\ 7 CFR 9.7(e).
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______

Submitted Press Release by Hon. John W. Rose, a Representative in
Congress from Tennessee

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[https://www.justice.gov/usao-sdms/pr/three-sentenced-federal-court-
conspiring-steal-usda-mortgaged-houses]
Press Release
Three Sentenced to Prison for Conspiring to Steal USDA-Mortgaged Houses
Wednesday, December 20, 2023

For Immediate Release

U.S. Attorney's Office, Southern District of Mississippi

Natchez, Miss.--Three individuals were sentenced for their
respective roles in a scheme to steal houses from the United States
Department of Agriculture.
Barry Martin, 47, of Georgia was sentenced to 46 months in prison;
Fiesta Kagler, 59, of Georgia, was sentenced to 46 months in prison;
and Ella Martin, 69, of Jayess, Mississippi, a former USDA employee,
was sentenced to 35 months in prison.
According to court documents, the defendants conspired to identify
and steal USDA-mortgaged properties. The targeted properties were
mortgaged through the Brookhaven office of USDA Rural Development, an
agency which helps rural residents buy or rent safe, affordable
housing, especially low and very low income individuals. As an employee
of that office, Ella Martin had access to a list of abandoned,
foreclosed, nearly-foreclosed, or similarly distressed USDA-mortgaged
properties and would create fraudulent warranty deeds designed to
convey ownership of those properties to her co-conspirators and others.
The fraudulent deeds included forged signatures from former homeowners,
including at least one deceased individual. The fraudulent deeds were
then filed in Chancery Courts around Mississippi with the intent to
deprive the actual owners of the use and benefit of the properties and
to deprive the United States Government of the actual value of the
properties.
All three defendants will be required to pay restitution, which
will be determined at a separate hearing.
U.S. Attorney Todd W. Gee and Special Agent in Charge Dax Roberson
of the USDA Office of the Inspector General (OIG) made the
announcement.
The USDA OIG and the Federal Bureau of Investigation investigated
the case.
Assistant U.S. Attorney Kimberly T. Purdie prosecuted the case.

Updated December 20, 2023.
______

Submitted Chart by Hon. Jahana Hayes, a Representative in Congress from
Connecticut
SNAP Average Baseline Benefits Estimation

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

______

Supplementary Information by Hon. Jahana Hayes, a Representative in
Congress from Connecticut
On Wednesday, February 14, 2024, Representative Jahana Hayes (CT-
05) made a series of remarks to The Honorable Thomas J. Vilsack,
Secretary, U.S. Department of Agriculture. During her remarks she
stated that, ``[A]s of April 2023, states and towns struggled to fill
over 833,000 open positions for the employees who actually do this
work.'' She would like to amend the record to state, ``According to
AFSCME, in April 2023, the impact of the pandemic on the state and
local government workforce remained acute, with states and towns
struggling to fill 833,000 open positions.'' *
---------------------------------------------------------------------------
* Editor's note: the information referenced is from the AFSCME
letter, dated June 9, 2023, that follows.
---------------------------------------------------------------------------
attachment
June 9, 2023

Committee on Agriculture
U.S. House of Representatives
Washington, D.C.

Dear Representative:

On behalf of the 1.4 million members of the American Federation of
State, County and Municipal Employees (AFSCME) and our members who
administer benefits of the Supplemental Nutrition Assistance Program
(SNAP), I urge you to support and strengthen the structure, integrity
and capacity of SNAP as you develop the farm bill.
SNAP is a powerful and successful tool to ensure that all Americans
can afford healthy food--it is a lifeline for 41 million Americans
including students, veterans, disabled Americans, children, families
and seniors. We note it is a safety net nutrition program, not an
employment program. SNAP has been an effective tool to combat hunger,
poverty and improve economic conditions for both individuals and
communities. In communities, it serves as an economic engine,
generating between $1.50 and $1.80 for every dollar invested.
Beginning in March 2020, states and counties used temporary SNAP
flexibility to provide emergency benefit supplements, maintain benefits
to households with children missing school meals, and ease program
administration during the pandemic. These options allowed states to
deliver more food assistance to struggling families, helped manage
intense administrative demands, and ensured that participants
maintained much-needed benefits all while radically shifting their
operations to respond to a public health emergency. In fiscal year (FY)
2021, SNAP participation averaged 41.5 million beneficiaries, up by
nearly 5.8 million over the pre-pandemic year FY 2019.\1\
---------------------------------------------------------------------------
\1\ https://frac.org/blog/new-data-snap-benefit-redemptions.
---------------------------------------------------------------------------
With these factors in mind, AFSCME recommends the following to
strengthen SNAP:

Ensure access to full SNAP benefits by preserving the merit-
staffing requirement for eligibility determination.

AFSCME members who are SNAP state and county eligibility workers
help constituents access nutrition benefits. Federal law requires that
``merit staff'' public employees conduct the essential work of SNAP to
screen for eligibility and determine benefit levels. This includes
providing application assistance, answering client questions about
missing information, pursuing missing information, and providing
verification guidance. Merit staff are civil service government workers
who act as honest brokers to deliver benefits and services
professionally, efficiently and effectively. Merit systems at the
Federal, state and local levels require hiring, advancement, demotion
and discipline based on merit and competence. Merit staff conduct the
people's business according to transparent standards, free from
political influence and without fear of arbitrary management action or
retaliation. Merit-based personnel systems are resilient and can help
safeguard decisions to grant or deny an important nutrition Federal
benefit from political whims.
Merit staffing ensures that SNAP beneficiaries receive the help
they need from a skilled professional workforce, that recipient data
remains private, and that eligibility determinations are based on
qualifications rather than profit or other motives.
AFSCME strongly opposes allowing states to expand non-merit staff
for SNAP administration, including allowing states to contract out
staffing to record or accept client information, conduct interviews and
handle client complaints regarding case eligibility and benefits.
Congress should not permit states to hire non-merit staff to screen for
eligibility, provide application assistance, answer client questions
about missing information, pursue missing information, and provide
verification guidance. We oppose permanent, expanded changes such as
those proposed in the Emergency SNAP Staffing Flexibility Act of 2021
(H.R. 6203) because it would decimate merit-staffing requirements,
undermine program integrity and waste limited taxpayer resources.
Experiments with the outsourcing of merit-staffed work in Texas and
Indiana proved to be a waste of taxpayer dollars and a drain on good,
local jobs that pay better than privateers who rarely provide essential
benefits, including health care and retirement.\2\ Outsourcing has
resulted in none of the promises of improved performance, efficiency or
cost savings. In fact, it has harmed struggling families, seniors and
the disabled, and compromised the integrity of the program itself. As
Stacy Dean, Deputy Under [S]ecretary for Food, Nutrition and Consumer
Services, United States Department of Agriculture (USDA), noted in
testimony before the House Agriculture Committee's hearing in 2022,
these harmful impacts were ``disastrous and ended up making service
worse and states had to pull back from it. So experience would suggest
it's a pretty risky endeavor to shift the roles as we've experienced
them for the past 4 decades.''
---------------------------------------------------------------------------
\2\ Center for Public Policy Priorities, ``Updating and Outsourcing
Enrollment in Public Benefits: The Texas Experience,'' November 2006,
http://library.cppp.org/files/3/CPPP_PrivReport_(FS).pdf; Center for
Public Policy Priorities, ``News Release: New Report on Texas' Troubled
Outsourcing Experiment Tells Cautionary Tale for Sister States,''
November 13, 2006, http://library.cppp.org/files/3/
privatizationrelease_CH.pdf; David Super, ``Indiana Court Autopsies
Welfare Privatization Effort,'' Balkinization, August 3, 2012, https://
balkin.blogspot.com/2012/08/indiana-court-autopsies-welfare.html; Matea
Gold, Melanie Mason, and Tom Hamburger, ``Indiana's Bumpy Road to
Privatization,'' Los Angeles Times, June 24, 2011, http://
articles.latimes.com/2011/jun/24/nation/la-na-indiana-privatize-
20110624.

---------------------------------------------------------------------------
Increase necessary administrative funds.

It is essential that SNAP has adequate program staff to determine
eligibility in a timely manner so that families can access the
nutrition assistance they need. In April 2023, the impact of the
pandemic on the state and local government workforce remained acute,
with states and towns struggling to fill 833,000 open positions. In
addition, many merit staff who make SNAP eligibility decisions also
work on Medicaid eligibility determinations. The unwinding from the
public health emergency resulted in an unprecedented increase in
workload responsibilities and warrants additional workforce training
and resources. AFSCME recommends increasing the administrative match
for SNAP from 50% to 75%. This increase will help pay competitive
wages, provide adequate training and support workers to prevent
backlogs, and improve consumers' access to needed benefits.

Allow administrative flexibilities, not outsourcing, to improve
efficiency.

During the pandemic flexibilities that improved the consumer
experience included easing interview requirements, streamlining methods
for electronic signatures, extending certification periods and
simplifying reporting requirements. These should be allowed to
continue. Administrative flexibility is not privatization or
outsourcing. We oppose proposals to waive merit staffing, for example,
during pandemics and other health emergencies, seasonal workforce
cycles, temporary staffing shortages, and weather or other natural
disasters. Given the current staffing shortage, the focus should be on
strengthening the program in a sustainable way that upholds its
integrity and access.
SNAP is a countercyclical program designed to respond to periods of
high demand and adjust when demand wanes. As such, program
administration should also be designed to accommodate these cycles.

Extend SNAP's entitlement structure to Puerto Rico and other U.S.
Territories.

U.S. Territories, including Puerto Rico, receive a capped block
grant from the Nutritional Assistance Program (NAP). This structure is
unlike SNAP and the program is not able to serve all eligible people
who apply. Other major Federal nutrition programs--including the
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC) and child nutrition programs including school meals programs--
operate the same in Puerto Rico as in the states. We urge you to
provide the U.S. citizens in Puerto Rico with full access to the SNAP
program and not the block grant under NAP.
Summary
Thank you for your efforts to continue to ensure that SNAP meets
the needs of those in need and is administered by professional, merit-
staffed state and county employees. We are counting on you to maintain
current SNAP merit-staffing requirements to fully enable the program's
ability to serve our nation's most vulnerable families.
Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Edwin S. Jayne
Director of Federal Government Affairs.
______

Submitted Letter by Hon. Darren Soto, a Representative in Congress from
Florida
February 2, 2022

Hon. Rosa L. DeLauro, Hon. Patrick Leahy,
Chair, Chairman,
House Committee on Appropriations, Senate Committee on Appropriations,
Washington, D.C.; Washington, D.C.;

Hon. Kay Granger, Hon. Richard C. Shelby,
Ranking Minority Member, Vice Chairman,
House Committee on Appropriations, Senate Committee on Appropriations,
Washington, D.C.; Washington, D.C.

Dear Chairwoman DeLauro, Chairman Leahy, Ranking Member Granger and
Vice Chairman Shelby:

We write to respectfully request your assistance with securing
additional funds for the Nutrition Assistance Program (PAN) as you
continue working towards reaching a deal for the Fiscal Year 2022
omnibus spending bill.
As you are aware, Puerto Rico does not participate in the national
Supplemental [Nutrition] Assistance Program (SNAP). Instead, Puerto
Rico has NAP, a capped block grant that currently serves over 1.5
million of my constituents. Due to limited funding, we have had to turn
to Congress on multiple [occasions] seeking an [increase] in funds to
accommodate changes in demand related to emergencies, including the
ongoing COVID-19 emergency.
Most recently, Section 1103 of the American Rescue Plan, Public Law
117-2, provided $1 billion for nutrition assistance programs in Puerto
Rico, American Samoa and the Northern Mariana Islands.\1\ Of these,
Puerto Rico obtained $966,120,000, which are set to expire in June
2022. Unless Congress appropriates additional funds for NAP, Puerto
Rico will revert back to the base block grant amount while still
grappling with the pandemic.
---------------------------------------------------------------------------
\1\ Public Law 117-2. https://www.congress.gov/117/plaws/publ2/
PLAW-117publ2.pdf.
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To help mitigate the challenges [stemming] from the pandemic, as
well as serving needy constituents during these trying times, we
respectfully request the amount of $1 billion for the NAP program to
continue providing assistance to needy families during the emergency
period. As we work towards a transition to SNAP, we must secure
resources that will get us support the imminent need in Puerto Rico.
Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Hon. Jenniffer Gonzalez-Colon, Hon. Darren Soto,
Member of Congress Member of Congress

______

Supplementary Material Submitted by Hon. Thomas ``Tom'' J. Vilsack,
Secretary, U.S. Department of Agriculture
Insert 1
Mrs. Cammack. . . .
So, specifically, what is USDA doing to ensure that American-
grown products are being served in American schools? And is
there a requirement for American-grown products to be used in
schools?
Secretary Vilsack. There is a requirement that food that we
purchase has to be produced and processed and every aspect of
it being done in the U.S.
Mrs. Cammack. Okay. Now, what are you doing to ensure that
that is in fact happening? Because, as I have just laid out, we
are finding products from all over the world, from Russia and
China, et cetera, in our school systems.
Secretary Vilsack. Well, if you want to give us information
about the specific schools, we will be more than happy to take
a look at that specific circumstance. We have a process in
which we, through our Food Nutrition Service, do the best we
can to ensure that the purchases are being made are consistent
with the rules and regulations of FNS.
Mrs. Cammack. So I will tell you what, by the end of the
quarter, you and I can have a conversation, and I will make
sure my team gets the data to yours, and we can go through
that.

USDA would welcome any specific data.
Insert 2
Ms. De La Cruz.--Mr. Secretary, because it is such an
important issue. And like my colleague across the aisle said,
we don't want to play partisan politics with our farmers and
ranchers. Food security is national security, and I would like
your commitment to stand with me and our farmers and ranchers
and meet with and talk with Secretary Blinken about Mexico's
lack of abiding to the 1944 treaty. Can I have your commitment
to stand with the ranchers and farmers and speak to Secretary
Blinken about this treaty?
Secretary Vilsack. I am happy to take a look and learn more
about this and get back to you, Congresswoman. I think that is
fair.

USDA is committed to support efforts of the U.S. Department of
State as needed.
Insert 3
Mr. Van Orden. . . .
. . . One of the efforts USDA offers is the Dairy Business
Innovation Initiative .
* * * * *
Secretary Vilsack. And they make decisions based on where
those resources need to be allocated.
Mr. Van Orden. Okay.
Secretary Vilsack. So they would have the information in
terms of the number of grants and specific investments.
Mr. Van Orden. Okay.
Secretary Vilsack. So, we don't control--once we give the
resources to the innovation center, it is the innovation center
that makes the determination.
Mr. Van Orden. So if we could get that information from these
guys later, or if you could help us do that, I would appreciate
it greatly.
* * * * *
Mr. Van Orden.. . . Many of my constituents are asking the
USDA to use their emergency powers to change the dairy pricing
formula from the ``average of'' to the ``higher of.'' No one
has testified in opposition to changing this formula. The USDA
is considering making the change through the FMMO hearing
process that just concluded. We talked about that.
Unfortunately, they are on step 5 of 12 in the process. Dairy
farmers can't wait till 2025. Do you support accelerating this
process?
Secretary Vilsack. I am not prepared to answer that question
because I need to have a better understanding of exactly what
you are asking.

The Federal Milk Marketing Order (FMMO) program regulates organic
and conventional milk identically because the Agricultural Marketing
Agreement Act of 1937, as amended, classifies milk based on form and
use, not on farm production method. FMMOs require conventional and
organic milk processors to pay the same classified price for milk based
on its end use--fluid milk, soft products, or storable products.
A proposal was submitted to treat organic milk differently within
the FMMOs during the request for proposals in June 2023, in
anticipation of the August 2023 hearing. Because the hearing was
related to pricing formulas, the organic milk proposal was excluded
from the hearing notice, a decision the Administrative Law Judge
presiding over the hearing upheld.
At any time, interested persons can submit a proposal to amend the
FMMOs in accordance with the regulations at 7 CFR 900.3. All proposals
should fully address the submission requirements outlined in 7 CFR
900.22. Once a proposal has been submitted, USDA will consider the
proposal and determine whether a hearing should be held.
Insert 4
Mrs. Chavez-DeRemer. . . .
. . . I have heard from an alarming number of constituents
concerned about illegal vehicular camping occurring with the
Deschutes National Forest in my district. These activities are
not only taking away-from vital public resources from my
constituents, but also leading to lasting environmental damage.
Around Phil's Trailhead and along China Hat Road, there have
been numerous reports of unsanctioned bonfires, trash dumping,
and burning, drug usage, dumping of human waste, trespassing
onto adjacent private property, as well as violent crime
throughout.
Not only is there a concern that there is no concrete plan of
action to address these concerns, but also I am told that local
volunteer organizations that are trying to work with the Forest
Service will no longer be deployed due to safety concerns. Do
you believe the current citation system is effective, or are
stronger enforcement mechanisms needed to ensure that those
that are trespassing will be held accountable and stop the
damage from getting worse?
Secretary Vilsack. Well, I think we need to look into that
particular set of issues. I am more than happy to do that.

The Deschutes National Forest (DNF) recognizes the challenges posed
by unauthorized encampments and the associated environmental and public
safety concerns. Addressing these issues is a high priority for the
Forest Service, and we are actively working to mitigate the impacts in
areas such as Phil's Trailhead and China Hat Road.
Staff regularly patrol these areas, enforce regulations, and
conduct clean-up operations to address issues such as trash dumping,
unsanctioned fires, and natural resource damage. Homelessness, however,
remains a complex societal issue that cannot be fully resolved by the
Forest Service alone. We collaborate with local and Federal partners--
including the Deschutes County Sheriff's Office, City of Bend, and the
Bureau of Land Management-on community-driven strategies to address the
broader challenges of unauthorized encampments.
To enhance our response, we are also focusing on fire prevention
education, volunteer safety, and leveraging partnerships with
organizations like the Public Land Stewards. Volunteer safety is
paramount, and we ensure that no volunteers or employees are deployed
in conditions where safety risks cannot be mitigated.
Our enforcement capabilities are limited by law, which restricts
our ability to remove individuals or their belongings without a Federal
Magistrate's court order. While we continue to issue tickets for
violations, these measures do not provide a direct mechanism for
resolving long-term encampments.
The current citation system provides a framework for addressing
violations, but it has significant limitations in effectively deterring
unauthorized long-term camping and mitigating its associated impacts.
Issuing tickets for violations like resource damage or exceeding stay
limits is a vital enforcement tool; however, it does not address the
root causes of these encampments or provide immediate relief from the
environmental and public safety issues your constituents have raised.
More robust enforcement mechanisms may be necessary to ensure
accountability and prevent further degradation of public lands. This
could include policy changes that streamline the process for removing
individuals and their property from unauthorized campsites when
violations occur.
______

Submitted Questions
Response from Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S.
Department of Agriculture
Questions Submitted by Hon. Glenn Thompson, a Representative in
Congress from Pennsylvania
Question 1. Many of the questions the current Dietary Guidelines
Advisory Committee (DGAC) is studying are so granular that many are
lacking sufficient evidence and, thus far, are having to be eliminated
or are resulting in limited evidentiary conclusions. I am concerned
this reality, as has happened with past DGACs, may result in the DGAC
making recommendations based on analytical tools versus empirical
evidence, such as food pattern modeling, that, while useful when
studying consumption patterns, do not meet the evidentiary standard
required for the Dietary Guidelines to establish nutrient or food group
recommendations. How will USDA ensure that DGAC recommendations are
based solely on dietary reference intakes and other proper scientific
evidence rather than unproven tools as they seek to comment on the
preponderance of the scientific evidence as required by statute?
Answer. The 2025 Dietary Guidelines Advisory Committee (DGAC) is
charged with reviewing the scientific evidence on nutrition and health
to develop a scientific report for HHS and USDA, which will provide
advice and recommendations to help inform the development of the
Dietary Guidelines for Americans, 2025-2030. To examine the evidence,
the Committee is using three approaches: data analysis, food pattern
modeling, and systematic reviews. Each approach has its own rigorous,
protocol-driven methodology, and plays a unique, complementary role in
examining the science.
The 2025 DGAC's work in food pattern modeling explores the types of
flexibilities that may or may not exist in dietary patterns. Of note,
the National Academies of Sciences, Engineering, and Medicine (NASEM)
recommended the Secretaries of USDA and HHS ``enhance food pattern
modeling to better reflect the complex interactions involved,
variability in intakes, and range of possible healthful diets''. The
2025 DGAC's expanded food pattern modeling analyses, including a new
analytic approach to diet simulations, are responsive to the NASEM
recommendations for advancing the Dietary Guidelines development
process.
The food pattern modeling analysis involves hypothetical scenarios
specifically related to ensuring the dietary patterns included in the
Committee's advice meet the Dietary Reference Intakes, but this
analysis alone does not equate to advice. The findings of the food
pattern modeling analyses will be synthesized and put into context
related to the Committee's findings from systematic reviews and data
analyses. Findings from all three approaches will inform the
Committee's advice and recommendations to HHS and USDA in its
scientific report.

Question 2. Federal spending on USDA FNS' Supplemental Nutrition
Assistance Program (SNAP) totaled over $110 billion in 2023. Currently,
when a retailer store is audited, receipts are manually hand reviewed,
a time-consuming and inefficient procedure. Recognizing this challenge,
I understand USDA is conducting a Proof of Concept (POC) that uses
Optical Character Recognition (OCR), an application of artificial
intelligence. This initiative aims to streamline the auditing process
by automating the review of a sample (limited to 1000) of FNS receipt
and invoice data. FNS uses this data to demonstrate how the existing
manual process can be automated, saving staff time, ensuring accurate
review, and detecting difficult patterns. The goal of this POC will
pave the way for a review system that (1) has an automated workflow and
learns from analyst feedback (2) can incorporate known SNAP fraud
patterns, identify new fraud patterns, and visualize alerts on these
patterns on retailer invoices and receipts. Can you provide an update
on the POC and any plans for scaling this effort into a fully
operational production system that ensures SNAP funds are going only to
families in need?
Answer. SNAP integrity is of the utmost importance to USDA and
continues to be one of the USDA Food and Nutrition Service's (FNS) most
critical responsibilities. In the oversight of more than 260,000
participating retailers, FNS constantly strives to deter and root out
all types of fraud in SNAP. FNS continually looks to innovate and
strives to stay ahead of bad actors who would violate program rules by
utilizing the latest anti-fraud technology and techniques. The Proof of
Concept (POC) for Optical Character Recognition (OCR) is anticipated to
begin testing by the end of Spring 2024. In the event the POC
demonstrates the anticipated efficiencies, full implementation would be
pursued by the end of the calendar year As suggested, OCR technology
introduces several opportunities to modernize practices and provide the
agency with tools to strengthen Program Integrity initiatives.

Question 3. The Department has stated they are supportive of all
forms of fruits and vegetables in feeding programs yet, publicly
continue to push the narrative that that ``fresh is best,'' more
beneficial, and that if you aren't serving or eating fresh, you're not
eating ``healthy.'' For example, in 2023, GusNIP awarded 86% of its
grant funding to fresh-only programs, and in November 2023, the
Department put out this press release \1\ * equating fresh food to
healthy and cheaper foods to less healthy. ``USDA is delivering on its
promise to bolster food and nutrition security for underserved
communities,'' said USDA Chief Scientist and Under Secretary for
Research, Education and Economics Dr. Chavonda Jacobs-Young.
``Investments like this enable people to afford and eat healthy fresh
fruits and vegetables so they don't have to make a choice between
healthy eating and cheaper less healthier options.'' The goal of many
of these feeding programs is to increase nutrition access and reduce
food insecurity by meeting families where they are, and the reality is,
sometimes fresh produce may not be feasible or available. In fact,
research shows that when a consumer has access to all forms of fruits
and vegetables, consumption increases. What is the department doing to
educate and help consumers understand the value of including additional
forms of produce in their diet, and for example, how frozen can fit
into a healthy lifestyle? As these are taxpayer-funded feeding
programs, frozen can be a cost-effective option, especially since its
long shelf-life results in less food wasted, thus extending recipients
dollars. What is the department doing to work with the GusNIP TA center
to encourage grocers to promote frozen as a choice for all consumers?
---------------------------------------------------------------------------
\1\ https://www.usda.gov/media/press-releases/2023/11/13/usda-
nutrition-incentives-improve-access-healthy-food.
* Editor's note: entries annotated with are retained in Committee
file.
---------------------------------------------------------------------------
Answer. All foods have a place in a healthy dietary pattern. Across
the NIFA portfolio of grant programs, Congressional authorizing
legislation may emphasize specific crops or food groups, and may also
provide National Institute of Food and Agriculture (NIFA) with broad
discretion when implementing grant programs. As one example, the
authorization for the GusNIP Produce Prescription Program, 7 U.S.C.
7517(c), directs that to be eligible to receive a grant, projects must
prescribe fresh fruits and vegetables.
The legislative language for the GusNIP Nutrition Incentive
Program, 7 U.S.C. 7517(b), provides NIFA with broad discretion to
support projects that increase the purchase of fruits and vegetables.
In the GusNIP Nutrition Incentive Program, fruits and vegetables are
defined as any variety of frozen, canned, dried, or fresh; whole or cut
fruits and vegetables; without added sugars, fats or oils, and salt
(i.e., sodium).

Question 4. The Infrastructure Investment and Jobs Act provided the
U.S. Forest Service over $2.8 billion for the National Forest System to
carry out wildfire risk reduction and ecosystem restoration activities.
You've had nearly 3 years to begin implementation and I've been hearing
from various constituents that it is not making its way to the ground.
Can you share with us how many communities you've protected with the
hazardous fuels reduction projects, like installing fuel breaks, as
authorized in IIJA? How many acres have been treated using the
emergency authority?
Answer. The Bipartisan Infrastructure Law (BIL) provided $1.4
billion for hazardous fuels treatments, of which we will have allocated
$848M by the end of Fiscal Year (FY) 2024. The Forest Service and
partners are making significant progress in implementing the Wildfire
Crisis Strategy. Since the rollout of the strategy, we have now
invested in the treatment of over a million acres across the 21
Wildfire Crisis Strategy landscapes alone and accomplished 4.4 million
acres of hazardous fuel treatments across the entire National Forest
System (NFS) last year, an all-time record in the agency's history. Our
work under the strategy is beginning to reduce risk to approximately
550 communities, 2,500 miles of power lines, and 1,800 municipal
watersheds, as well as many other values the public depends on and
cares about.
Since the passage of the BIL, USDA has exercised the emergency
authority that Congress provided in the law to provide for more
efficient forest management decisions in emergency circumstances and we
have designated over 27 million acres of NFS lands for expedited
analysis, decision-making, and implementation. Since that time, the US
Forest Service has approved 43 emergency actions covering up to 1.2
million acres. Thirty-seven projects are currently being reviewed and
are at various stages of completion. Six projects have signed decisions
authorizing up to 295,605 acres with implementation underway. As of
this hearing we have completed treatments on approximately 24,000 acres
using the emergency authority.
With continued investments from Congress, we will be able to build
upon the work we have already accomplished. USDA is committed to
continuing to ramp up the pace and scale of our hazardous fuel
reduction and forest management treatments to confront the crisis,
using every tool and authority at our disposal. We must also continue
to find ways to invest in our wildland firefighters, who are not only
critical to our suppression activities but also for fuels management
work on a year-round basis. It is important that we have resources that
go to our land and forests, as well as the people who protect them.

Question 5. As you know, a robust timber industry is critical to
addressing the wildfire crisis. However, we continue to see declining
levels of timber harvest across the National Forest System. Based on
information we received from the U.S. Forest Service, over 80 units
failed to meet their timber targets over the last 5 years. Mr.
Secretary, can you please tell us how you are working diligently to
increase the level of timber volume sold across National Forest System
lands?
Answer. In FY 2023, the Forest Service demonstrated its commitment
to forest resilience and local economies by selling 3.144 billion board
feet (BBF) of timber (5,894 thousand hundred cubic feet (MCF)), marking
one of the highest output periods in recent decades. The agency has
sold an average of 3.08 BBF (5,730 MCCF) annually over the past 5
years. In FY 2023, the Forest Service sold 246 MCF of biomass,
maintaining an average annual sale of 228 MCF over the past 6 years.

Question 5a. The U.S. Forest Service received significant
investments from the IRA and IIJA. Can you please provide the Committee
with a detailed breakdown of which projects have included timber
harvests?
Answer. Multiple provisions of the Infrastructure Investment and
Jobs Act and the Inflation Reduction Act benefit our timber management
program. These funds are additive to our already existing program of
work and act as a force multiplier to accomplish more on-the-ground
activities so that we can have a robust timber sale pipeline into the
future. Funds from IIJA/IRA are used to perform such activities as NEPA
planning, sale designation and marking, and numerous other presale
activities that contribute to the pipeline of timber sales across the
agency. We do not track IRA and IIJA funding specific to timber
harvests.

Question 6. Mr. Secretary, I think we all operate under the
impression that Categorial Exclusions allow projects to go from
proposal to completion faster given the lack of environmental effects.
However, I continue to hear from my constituents that projects using
Categorial Exclusions have taken years to complete. For example, in
Region One, one project using a CE took more than 4 years to compete
and another took more than 6 years. Can you explain to us why projects,
especially those that are less than 3,000 acres, can take a half decade
or more to complete?
Can you tell me what the U.S. Forest Service is doing to avoid
lengthy delays throughout the project planning process?
Answer. From Fiscal Years 2019-23, the Forest Service averaged 146
days to complete a Categorial Exclusions (CE). This time is less than
the 158 day average it took the Forest Service to complete a CE in
Fiscal Years 2014-18. The Forest Service is getting faster at
completing CEs. There will be outliers in any large data set that bring
with them unique situations and requirements, especially given that the
Forest Service completes over 1,000 CEs annually. Projects occasionally
are put on hold for a variety of reasons, such as shifting priorities,
intervening events like wildfires, or at times upon the request of the
project applicant.
We are incorporating efficiencies at every stage of the planning
process. The Forest Service's focus is on training, information
sharing, community building, standardization, contracting, use of
additional CE categories, CE adoption under the new Section 109 of
NEPA, determination of NEPA adequacy, and programmatic agreements in
order to expedite the review.

Question 7. Mr. Secretary, it is well known that compliance with
the Cottonwood decision is actively delaying hazardous fuel treatments,
keeping the potential for dangerous wildfires higher, for longer. We've
heard from the U.S. Forest Service that adhering to the Cottonwood
decision will force current forest restoration projects to pause for 5
to 10 years and cost the agency millions of dollars in re-consultation
fees. Further, the Obama Administration is on record stating that a
finalized forest plan is not an ongoing action and does not allow for
discretionary involvement. Can you confirm that it is your position
that a statutory fix for the Cottonwood decision is needed?
Answer. Prior to the passage of the Consolidated Appropriations Act
of 2018 (P.L. 115-141) in which Congress provided the Forest Service a
temporary safe harbor from Cottonwood-related litigation, forest
restoration projects were expected to be delayed for 5-10 years and
cost the agency millions of dollars in re-consultation efforts. Since
the expiration of the initial five-year safe harbor provision in March
2023, the Forest Service has faced-s and continues to face increased
litigation risks and potential project implementation delays. The
Forest Service continues to spend time and resources addressing plan-
level consultation and working to develop Biological Assessments for
various species. The Forest Service's recent experience concerning
plan-level reiniations has been that such reinitiation efforts
typically do not result in any change to Land Management Plan (LMP)
direction or additional conservation benefits beyond what is reflected
in the reinitiation of consultation that occurs for ongoing projects.
The Forest Service has not delayed any restoration projects since
passage of the 2018 Consolidated Appropriations Act solely because of
failure to reconsult on newly listed species at a plan level. After a
LMP is revised and associated consultation occurs, the Forest Service
continues to perform project-level consultation for all existing and
newly listed species and critical habitats and feels this is the
appropriate level of consultation that should be undertaken.
USDA continues to highlight the importance of the National Forest
Management Act's incremental decision-making process for periodic and
project-specific decision-making with the Services and the great
ecological benefit such an approach can have. The Forest Service also
continues to highlight the implications of Cottonwood-style litigation
that could hinder the accomplishment of the administration's broader
natural resource management objectives. USDA continues to seek out
solutions that will allow for timely decision-making, while maintaining
the important wildlife protections afforded by the Endangered Species
Act and would welcome the opportunity to work with Congress on a
legislative language related to Cottonwood.

Question 7a. In your view, how has the Cottonwood decision made
western communities more vulnerable to wildfire?
Answer. During the initial 5 year safe harbor provision the Forest
Service did not face a risk of delayed forest restoration projects
solely because of failure to reinitiate plan-level consultation
regarding newly listed species or critical habitat. The social, human,
and environmental effects of proposed projects and activities continue
to be analyzed at the project level, including any necessary
reinitiation of consultation.

Question 8. Mr. Secretary, it is my understanding that litigation
has impacted timber sales across the National Forest System with over
1.8 billion board feet impacted. 1.8 billion board feet is enough
timber to build over 100,000 single family homes. Is that correct?
Answer. Yes.

Question 8a. Can you tell me what the U.S. Forest Service is doing
to avoid litigation?
Answer. The Forest Service strives to operate in a collaborative
manner to reduce litigation. The pre-decisional administrative review
(``objections'') process also helps to resolve conflicts and reduce
litigation. The Agency provides training based on new and existing case
law to provide support to employees and improve the quality of our
project planning and decision-making and ultimately be more successful
when litigated. Additionally, we engage with partner agencies in
information sharing and project support to ensure there is a consistent
approach to project planning.

Question 9. A concern I often hear about is that agencies provide
excessively detailed NEPA analyses to ensure their decisions will not
be litigated. Mr. Secretary, can you provide us with an update on the
department's compliance with the amendments to NEPA from the Fiscal
Responsibility Act of 2023?
How has the department streamlined environmental documentation as a
result? Have you complied with the new deadlines as outlined in Section
107(g)?
Answer. The Forest Service is complying with the requirements of
Sections 106, 107, 108, 109, and 111 of NEPA, where applicable. The
Agency engaged with the Council on Environmental Quality (CEQ) in 2023
to share information on E-NEPA (Section 110).
The Forest Service is focused on compliance with Section 109 (CE
Adoption). We are currently consulting with seven Federal agencies
regarding the adoption or lending of 18 CE categories. The CE
categories the Forest Service is seeking to adopt will assist with
compliance for broadband infrastructure support, telecommunications,
range and grazing operations, mining support activities, and
transportation projects.
For example, The Department of Commerce has several CE categories
for which the Forest Service is requesting adoption, which will allow
telecommunication infrastructure to be documented with a CE vs. an EA.
This could reduce the timeline for environmental compliance for some
telecommunication projects by over a year. In addition, it was recently
announced that the Bureau of Land Management is adopting a permit
streamlining policy already in use by the Forest Service and the Navy
that will help BLM to approve geothermal exploration projects faster.
The Forest Service is currently gathering information in support of
reporting EAs and EISs that exceed deadlines associated with Section
107(g) of the FRA.

Question 10. Recently, the U.S. Forest Service initiated an
unprecedented effort to review and amend all land management plans for
units of the National Forest System, 128 plans in total, to ``include
consistent direction to conserve and steward existing and recruit
future old-growth forest conditions and to monitor their condition . .
.''. Mr. Secretary, what has been the leading cause of loss of ``old
growth'' forests over the last 2 decades? How does amending these
forest plans address the biggest threat to ``old growth'' forests? How
will this policy help the U.S. Forest Service implement this
Administration's own 10 year Wildfire Crisis Strategy, which calls for
a three-fold increase in forest restoration projects?
What portion of the newly identified ``old growth'' forests are
already included in roadless and/or wilderness areas? Do current forest
plans already contain provisions and restrictions regarding ``old
growth'' conservation?
Answer. According to our recently completed Threat Analysis, the
biggest threats to old growth over the past 2 decades have been
wildfires (^712,000 acres), insects, and diseases (^182,000 acres). The
proposed amendment would implement strategies to foster resiliency to
these threats and drive proactive stewardship and forest management
actions to retain old-growth forest conditions across national forests/
grasslands and complement the agency's wildfire crisis strategy.
Healthy, climate-resilient old-growth forests store large amounts of
carbon, increase biodiversity, reduce wildfire risks, enable
subsistence and cultural uses, provide outdoor recreational
opportunities, and promote sustainable local economic development.
Land management plans are made up of a suite of plan components
designed to address a multiple-use framework to ensure ecological
integrity, and to provide for social and economic sustainability. Many
land management plans throughout the National Forest System contain
plan components that speak to the management of old-growth forest
conditions and reflect the management objectives and desired conditions
of a particular forest or grassland. This results in a multitude of
approaches toward the management of old-growth forest conditions.
The table below shows estimates of old-growth forests across
various special land designations. On Forest Service-administered land
about 55% of the old growth is in wilderness or inventoried roadless
and about 45% is in general forest. For the BLM about 20% is in
wilderness and inventoried roadless. See the table below for more
details.

----------------------------------------------------------------------------------------------------------------
Old Growth Total Forest Land
Agency & Land Allocation -------------------------------------------------------------------------------
Million Acres SE% Percent Million Acres
----------------------------------------------------------------------------------------------------------------
NFS 24.7 1 144.3
Wilderness *.................. 4.1 3 16.6 23.4
Inventoried Roadless Area..... 9.4 2 38.1 37.0
National Monument............. 0.1 26 0.4 0.6
Other......................... 11.1 2 44.9 83.3
BLM 8.3 3 34.2
Wilderness.................... 0.5 11 5.9 1.6
Wilderness Study Area......... 1.2 7 14.4 3.3
National Conservation Lands *. 0.8 8 10.1 2.2
Other......................... 5.8 4 69.6 27.1
-------------------------------------------------------------------------------
Total BLM & NFS............. 33.1 1 178.5
----------------------------------------------------------------------------------------------------------------
* Forest Service Wilderness includes both Wilderness and Wilderness Study Areas. National Conservation Lands
include National Monument, National Conservation Area, and other similar designations, collectively referred
to as NM/NCAs

Question 11. USDA's Climate Risk Viewer identifies several ways in
which climate resiliency is already incorporated in USFS planning and
NEPA. Secretary Vilsack, what specific gaps in existing policy and
practices have you identified that fail to address the risks and
threats to old growth? Additionally, under the proposed action how will
the U.S. Forest Service balance other environmental aspects, namely
enhancing and conserving wildlife habitat, that may not be analogous
with old growth directives?
Answer. It may be the case that, in some circumstances, existing
old-growth policies and practices are effectively conserving old-growth
conditions in the face of climate-induced threats. Putting a national
framework in place that is responsive to local conditions/diversity is
the logical step to take to validate and improve status quo management.
The mature and old growth Threat Analysis highlighted the need for
additional proactive stewardship actions to protect mature and old
growth under certain conditions. In other situations, no action is
needed. We are continuing to analyze the Threat Analysis and Inventory
to develop guidance on identifying situations in which management
actions are appropriate. The Agency will use the National Environmental
Policy Act environmental impact statement process to evaluate the
potential impact of the proposed action and alternatives on relevant
resource issues, such as wildlife habitat.

Question 12. Mr. Secretary, the U.S. Forest Service has over 27,000
permanent employees--with over 26,000 in regional and field offices.
I've heard from my constituents that these field offices are still not
adequately staffed, despite guidance from the White House that the
agencies must return to the office. Can you please tell us how you
monitor whether employees in the field are returning to the office?
What measures are in place to ensure the information you receive is
accurate?
Can you please provide the Committee with the management direction
the U.S. Forest Service has provided its employees regarding returning
to the office?
Answer. As with most managerial matters, first-line supervisors are
responsible for ensuring that their team members know the location of
their duty station and the requirements for performing their duties in
person. Employees and supervisors are also responsible for entering
their hours worked in the agency's time and attendance system based on
the location of their work. For Forest Service employees assigned to
public-facing positions (such as a ranger station), the duty station in
most instances is the location of the public-facing position. In those
types of positions, most of the employee's duties may be performed only
onsite, where direct, in-person communications can occur between
members of the public and the employee. Approximately 80% of Forest
Service employees are currently working in person at their duty
stations.
As before the pandemic, Forest Service employees must receive prior
written approval from their supervisors for some type of leave, such as
sick or annual leave, to be absent from their duty stations. Forest
Service supervisors can readily verify that in-person personnel are
reporting to their duty locations as required, using essentially the
same procedures as before the pandemic. At the start of each day,
supervisors ensure that their team members are present and accounted
for at their duty stations. Typically, the process involves seeing team
members at their assigned desks, during check-ins, and regularly
scheduled meetings. Forest Service management has informed public-
facing personnel, e.g., those who routinely interact with the public,
that they need to report to their duty stations on a regular basis. As
a result of this policy, over 80% of Forest Service personnel are
performing their duties in person, just as they were pre-pandemic.
Forest Service management has also informed personnel assigned to the
Washington Office that regular in-person attendance is required and has
directed supervisors to coordinate their employees' in-person and
telework days to maximize in-person collaboration.

Question 13. The National Forest System, established under the
Organic Administration Act of 1897, was designed to allow for
multifaceted economic use of lands within the system, including water
conservation and the provision of a continuous timber supply. The U.S.
Supreme Court and subsequent Congressional actions have reinforced this
multi-use principle, emphasizing that national forests are to be
managed for a variety of uses, not solely for preservation purposes.
Given the critical role of national forests in supplying valuable
mineral and energy resources, which contribute significantly to the
U.S. economy and job growth, it is imperative that land management
plans foster rather than hinder access to these resources. Especially
in light of the current mineral supply chain challenges and energy
reliability concerns, ensuring access to these resources is paramount
for national security and economic stability. Can you assure us that
the updates to the USFS land management rule will not obstruct the
exploration, development, and utilization of mineral and energy
resources on National Forest System lands, thus maintaining the forest
system's economic and strategic contributions to the nation?
Answer. It is our understanding that your question refers to the
proposed National Old Growth Amendment for the Conservation and
Stewardship of Old Growth Forest Conditions. The proposed amendment is
not a Federal Rulemaking but rather is a proposed amendment to all 128
Land Management Plans throughout the National Forest System. The intent
is to foster the long-term resilience of old-growth forest conditions
and their contributions to social, economic, and ecological
sustainability across the National Forest System as part of the
agency's overall multiple-use and sustained-yield mission. The proposed
amendment contains proposed plan components to prevent the degradation
of old-growth conditions and to enable conservation and proactive
stewardship within old-growth forest conditions. The amendment is
expected to operate prospectively, will not impact valid existing
rights, and will comply with all applicable statutes and regulations,
including those related to mineral and energy development.

Question 14. Currently, the U.S. economy is heavily reliant on
foreign sources for many minerals. Permitting delays have exacerbated
the problem. These delays plague the minerals industry throughout
project development, but there is a unique difficulty on U.S. Forest
Service lands because early-stage, small-scale exploration activities
must be authorized through a plan of operations as opposed to a more
streamlined notice-level process as allowed by the USFS' sister land
management agency, the Bureau of Land Management (BLM). Under 43 CFR
Subpart 3809, BLM utilizes a 15 day timeframe for determining whether a
notice is complete, and the operator may conduct notice-level
operations once it has submitted the required financial guarantee. In
contrast, exploration projects on USFS lands can wait years to secure
necessary approvals. Does the Forest Service intend to promote
consistency with the BLM when the agency updates its locatable mineral
regulations later this year?
Answer. Yes, the Forest Service is seeking consistency with the
BLM. The Forest Service is currently undergoing a regulatory revision
of 36 CFR 228A, which governs the occupancy and use of National Forest
lands in connection with mining--including prospecting, exploration,
development, mining, processing, and reclamation. These regulations
have not seen any significant revisions since they were adopted in
1974. As a result, there are many inconsistencies with the BLM's 3809
regulations. One of the many goals the Forest Service has in
modernizing these regulations is to bridge the gap between the BLM 3809
regulations and the Forest Service 228A, which includes clear criteria
for when notice-level operations can occur or when a plan of operations
is required. The Forest Service anticipates this regulatory change will
facilitate the efficient process of over 240 operations each year.

Question 15. On December 5, 2023, the Administration released the
Draft National Strategy for Reducing Food Loss and Waste and Recycling
Organics. Despite the immense contributions of the rendering industry
in preventing and diverting wasted food from disposal, with more than
54 billion pounds of organic loss and waste upcycled by renderers each
year, the Draft National Strategy did not mention rendering a single
time. Secretary Vilsack, can you explain to the Committee why rendering
is omitted from your Draft National Strategy?
How does the Administration expect to meet its goals of cutting
food loss and waste in half, without rendering?
Answer. On June 12, 2024, the Administration released the final
National Strategy for Reducing Food Loss and Waste and Recycling
Organics (National Strategy) after carefully reviewing the more than
10,000 comments received in response to the draft Strategy. The
National Strategy drives progress toward the National Food Loss and
Waste Reduction Goal to reduce the loss and waste of food by fifty
percent by 2030. USDA, EPA, and FDA appreciate the role that organics
recycling, including rendering, plays in reducing food loss and waste.
In response to comments on the draft Strategy, the final National
Strategy includes a definition of rendering and added reference to
rendering in Objective 3, ``Increase the recycling rate for all organic
waste.'' We will be looking for additional opportunities to reference
rendering's important role as a food waste management pathway.

Question 16. There seems to be a trend of this Administration
excluding rendering from its efforts to reduce food loss and waste. In
October 2023, EPA scrapped its Food Recovery Hierarchy below and
replaced it with a Wasted Food Scale, notably removing rendering from
this framework. Secretary Vilsack, can you explain what input USDA
provided to EPA in their transition from Food Recovery Hierarchy to
Wasted Food Scale?
Does the USDA support EPA's decision to remove rendering in the
Wasted Food Scale?

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Editor's note: the graphics were pulled from: https://
www.epa.gov/sustainable-management-food/wasted-food-scale;
https://www.epa.gov/land-research/field-bin-environmental-
impacts-us-food-waste-management-pathways.
Answer. USDA was not involved in EPA's development of the Wasted
Food Scale.

Question 17. The Environmental Protection Agency (EPA) has
published an Advanced Notice of Proposed Rulemaking title Potential
Future Regulation for Emergency Release Notification Requirements for
Animal Waste Air Emissions Under the Emergency Planning and Community
Right-to-Know Act (EPCRA). This proposal could reverse the 2019 rule
that exempted reporting of animal waste air emissions which received
wide support from the agriculture industry and first responders.
Secretary Vilsack, how have you collaborated with the EPA as they
consider a new rulemaking under EPCRA?
How are you responding to the small producers concerns about this
proposal's additional burdens on their operations?
Answer. USDA continues to provide an advisory perspective on
agricultural matters before the EPA. I will note that the biggest
complaints that I hear from small livestock producers are making sure
that we are ensuring a level playing field, creating more processing
capacity, and fighting industry consolidation that is striping profits
from our livestock producers.

Question 18. Research and promotion programs--commonly referred to
as checkoffs--promote and provide valuable research and information for
the commodity they cover. These programs are voluntarily created by
producers, financed by producers, and directed by producers through
their boards. We have recently seen unprecedented attacks by animal
rights activists and anti-agriculture groups to dismantle checkoffs as
we know them. Mr. Secretary, can you talk about how these programs are
formed and discuss the oversight mechanisms the USDA Agricultural
Marketing Service (AMS) enforces for checkoffs?
Answer. Since 1966, Congress has authorized industry-funded
research and promotion (R&P) boards to provide a framework for
agricultural industries to pool their resources and combine efforts to
develop new markets, strengthen existing markets, and conduct important
research and promotion activities. The Agricultural Marketing Service
(AMS) provides oversight, paid for by industry assessments, which helps
ensure fiscal accountability and program integrity. Standing up new
check offs and considering the impact of legislative changes that would
could these programs are funded with taxpayer dollars.
To initiate a national research and promotion program, proponents
must submit a proposal to USDA. A complete proposal should include: (1)
industry analysis; (2) justification; (3) objectives; (4) impact on
small business; (5) evidence of industry support for the program; and
(6) the text of the proposed order. If determined to be a complete
proposal, AMS publishes a proposed rule in the Federal Register. In
addition, the establishment of a new research and promotion program
requires a referendum.
AMS oversees 22 research and promotion boards that empower farmers,
ranchers, and agricultural businesses. The board members, which are
appointed by the Secretary of Agriculture, and boards' staff direct and
carry out programs and day-to-day board management responsibilities.
Every R&P program's mission is to maintain and expand the markets for
its commodity. AMS provides oversight and ensures fiscal
responsibility, program efficiency, and fair treatment of participating
stakeholders. In order to apply and enforce the legislative and
regulatory provisions of checkoff acts and orders and promote
consistency in oversight of all commodity promotion and research
programs, AMS and the boards follow written and approved guidelines
(Guidelines for AMS Oversight of Commodity Research and Promotion
Programs--https://www.ams.usda.gov/sites/default/files/media/
RPGUIDELINES
092015.pdf).
In short, AMS provides oversight and direction to industry-funded
and managed commodity research and promotion programs that broaden and
enhance national and international markets for various commodities.

Question 19. The Consolidated Appropriations Act, 2023 extended the
registration review deadline for over 700 pesticides registered under
FIFRA and directed EPA to take into account feedback from USDA when
developing mitigation measures for these crop protection tools. This
language was included as a direct result of growing concerns that EPA
was ignoring feedback from USDA scientists. Secretary Vilsack, can you
talk about how the consultation process between the EPA Office of
Pesticide Programs and the USDA Office of Pest Management Policy has
improved since the passage of this provision?
Answer. OPMP continues to engage with EPA in a variety of ways.
OPMP participated along with EPA, the DOI, and Commerce in the first,
in-person public meeting of the FIFRA-Endangered Species Act
Interagency Working Group. OPMP also helped to coordinate the
Memorandum of Understanding between FPAC and EPA's Office of Chemical
Safety and Pollution Prevention. In addition, OPMP continues to provide
suggestions for more workable mitigation options and other potential
areas of refinement for EPA's assessments, we continue to participate
in workshops, and we are co-leading with EPA a workshop to help
identify additional mitigation options and supporting data/information.

Question 20. Under the Herbicide Strategy recently proposed by the
Environmental Protection Agency (EPA), farmers across the country would
need to implement costly mitigation measures as a requirement to use
herbicides. In comments on this proposal, the USDA estimated it could
cost as much as $5.5 billion for corn growers in Iowa, Illinois, and
Nebraska. Given that this cost estimate is for just one commodity grown
in just three states, the nationwide cost of implementation is bound to
be much higher. I understand that USDA has been actively engaging with
EPA on this strategy. Secretary Vilsack, can you detail the
interactions between USDA and the EPA on this strategy, specifically as
it relates to the cost of implementation?
Answer. Through OPMP, USDA has raised with EPA its concerns around
the potential costs of EPA's efforts to agriculture. We have documented
our concerns on the impact via public comments on EPA's proposal as
well as in-person conversations and discussions. USDA has also provided
alternative proposals that may lessen the impacts on our grower
stakeholders.

Question 21. The Environmental Protection Agency (EPA) recently
proposed the Vulnerable Species Pilot Project which takes a draconian
approach to pesticide restrictions, prohibiting producers from using
pesticides in the ranges of the 27 selected species unless a producer
implements at least four mitigations measures from a short list. Many
of these selected mitigations are not appropriate for producers and
have a high cost of implementation. In comments on this proposal, USDA
predicted these areas could affect more than 3.1% of all cropped,
forested, and pastured areas in the United States. Further, EPA has
committed to expanding this pilot beyond the 27 selected species.
Secretary Vilsack, can you detail how USDA has engaged with the EPA on
the Vulnerable Species Pilot Project?
Answer. USDA has engaged with EPA on the Vulnerable Species Pilot
Project (VSPP) by providing detailed public comments on the proposal
and encouraging EPA to address the issues above. We know that, since
the release of the VSPP, EPA has provided an update to the VSPP that
addresses many, but not all, of the concerns raised (or describes how
they will be addressed). We believe that EPA's active efforts to refine
any Pesticide Use Limitation Areas will reduce some impact on growers.

Question 22. Secretary Vilsack, as you know, USDA leads many of the
Federal efforts managing invasive species and wildfire risks. The use
of pesticides are important tools in these efforts to control invasive
pests and weeds that threaten our forests, prairies, wetlands and the
native species and rural communities that reside there. Has USDA
considered what impacts recent EPA proposals--such as the Herbicide
Strategy and Vulnerable Species Pilot Project--would have on the
Department's ability to use pesticides for these vital land management
efforts?
Answer. USDA has considered the potential impacts of EPA's ESA-
related proposals to pesticide users; all users will be impacted to
varying degrees. Estimating impacts on USDA's land management efforts
is impossible at this time with the level of information we have on
EPA's proposals, i.e., we don't know the mitigation expectations for
the use of any individual pesticide, and we wouldn't have that
information until chemical-specific draft decisions are released. We
will work actively with EPA during the re-evaluation of individual
chemicals and during the implementation phase to help minimize impacts
on USDA land management efforts.

Question 23. The 2018 Farm Bill authorized the Agriculture Advanced
Research and Development Authority (AGARDA) pilot program to develop
technologies and research tools for long-term agricultural research.
Since then, AGARDA has received $1 million in both FY 2022 and FY 2023
to get the pilot started; however, the program has still not been
implemented and the strategic plan was just released last year.
Secretary Vilsack, can you provide a status update on AGARDA and
explain where the money appropriated has gone?
Answer. The limited initial discretionary annual appropriations
provided for AGARDA has been used to support staff to develop the
AGARDA Strategic Framework and host listening sessions to engage with
partners and stakeholders. Funding constraints prevented us from
dedicating a specific FTE to this initiative. About $2 million from FY
2022 and 2023 appropriations have been obligated to support a high-
risk, high-reward, pilot projects. However, until AGARDA is properly
resourced, this program cannot be implemented to make these the further
advancements and innovation in agriculture that were envisioned when
this was included in the 2018 Farm Bill. American investment in public
agriculture research and development has fallen behind, a decision
that, left uncorrected, will impact the clothes we wear, food we eat,
air we breathe, and the innovations we can achieve.

Question 24. According to the Animal and Plant Health Inspection
Service (APHIS), only 20% of the Regulatory Status Review (RSR)
timelines in FY 2023 were completed within the regulatory timeframe set
forth by the SECURE Rule amendments to 7 CFR Part 340. Secretary
Vilsack, what steps are the Department taking to ensure that RSR
evaluations are completed within the specified timeframe moving
forward? Will you commit to devoting the time and resources necessary
to hasten these reviews?
Answer. APHIS is working hard to bring the completion of Regulatory
Status Reviews into greater alignment with the target timeframes in 7
CFR 340. In FY 2024, APHIS made several improvements, including:

Establishing a review team to identify and implement time-
saving process improvements.

Prioritizing recruitment and staff development for the work
unit performing the evaluations.

Completing the first phase of an information management
system that enables more efficient tracking of key steps for
pending Regulatory Status Review requests.

With these efforts, in the first half of FY 2024, APHIS completed
30 Regulatory Status Reviews (twice the number in completed in FY
2023), with over 60 percent of these reviews meeting the target
timeframes under 7 CFR 340.

Question 25. The recent Executive Order on Safe, Secure, and
Trustworthy Artificial Intelligence indicates that catalyzing AI
research across the United States as a priority for the Federal
Government. Prior to this Executive Order, the USDA National Institute
of Food and Agriculture was already establishing itself as a leader in
this space by partnering with the National Science Foundation to launch
five agricultural-focused AI Institutes across the country. Secretary
Vilsack, what is the Department's plan for these AI Institutes moving
forward? What additional steps will USDA take to ensure that the United
States remains a leader in agricultural focused AI research?
Answer. Moving forward, the AI institutes will prioritize engaging
stakeholders and addressing the social acceptance of AI technologies in
agriculture. This includes fostering open dialogues, addressing ethical
concerns around data privacy and fairness. The institutes will
encourage cross-disciplinary research collaborations to tackle complex
agricultural challenges holistically. They will identify and work on a
wide range of research topics--from foundational AI to specific
applications and sustainable practices. Efforts will be made to build
new multidisciplinary communities and develop the workforce needed for
an AI-powered revolution in agriculture through educational programs
and training initiatives. NIFA will continue to strengthen partnerships
and collaboration with the Agricultural Research Service (ARS). This
joint effort aims to address research gaps, leverage expertise, and
align efforts towards sustainability and food security. By implementing
these strategies focusing on stakeholder engagement, multidisciplinary
research, workforce development, and strategic partnerships, the AI
institutes intend to position the United States as a leader in
responsible AI adoption for transforming agriculture and food systems.
We remain committed to advancing this crucial endeavor. USDA will
continue making investments in AI institutes, which is vital to
position the United States as a global leader in foundation AI research
tailored for transforming agriculture and food systems while
prioritizing equitable practices.

Question 26. Our system of farm conservation has been extremely
successful because it is producer-first, voluntary, incentive-based
and, importantly, locally-led. Mr. Secretary, I continue to hear
concerns from producers and stakeholders because IRA conservation
funding is limited to so-called climate-smart practices. By restricting
IRA conservation funding just to activities deemed climate-smart by the
Department, a significant number of existing practices--some 30-70%
depending on the state--cannot receive funding despite the proven
natural resource benefits. How are you working to ensure the locally-
led component of farm bill conservation programs is not lost?
Can you commit to doing more to protect the locally-led, voluntary,
and incentive-based nature of farm bill conservation programs?
Answer. The locally-led process does and will continue to drive
NRCS's work. The IRA provides significant funding to NRCS for its
conservation efforts, and the statute directs NRCS to use IRA funds for
or to prioritize climate mitigation purposes. While IRA focuses on
climate mitigation efforts, many climate mitigation practices have
significant co-benefits, and the locally-led process, starting with
local workgroups and the State Technical Committees, assists State
Conservationists with prioritizing local resource concerns for general
farm bill funding that includes the wide array of soil, water, air,
plants, and animals resource concerns. States have the flexibility to
utilize numerous fund pools and establish local priorities through the
locally-led process. Whenever possible, the agency has identified
opportunities to maximize the impact of this funding, within its
authority, in providing multiple conservation benefits while directly
reducing greenhouse gas emissions and increasing carbon storage
associated with agricultural production. I should add that these
climate practices in IRA are our most popular with producers and the
data backs that up. Just look at the tremendous demand for these
practices in FY 2023, when the IRA made $850 million available for
climate-focused conservation, and the applications NRCS received
totaled a staggering $2.8 billion.\2\
---------------------------------------------------------------------------
\2\ https://www.usda.gov/media/press-releases/2023/09/19/usda-sees-
record-interest-conservation-and-clean-energy-programs.
---------------------------------------------------------------------------
These are voluntary, farmer friendly, and locally-led projects and
practices and USDA is fully committed to helping producers with this
work that in the long run can improve their soil, prevent erosion, earn
farmers more money, potentially create new revenue streams, and
increase their productivity.

Question 27. Mr. Secretary, a letter was recently sent to you by
several Senators and Representatives requesting that waste storage
facilities, biogas capture facilities, livestock feed management and
waste separation facilities not be eligible for IRA conservation
funding. What is USDA's position on this request?
Answer. On February 27, 2024, the USDA responded to the referenced
letter stating that we evaluate all practices designated as climate-
smart mitigation activities using a rigorous science-based, systematic
process including compelling scientific literature, critical review of
the best available evidence, and expert knowledge and experience.
According to the U.S. Environmental Protection Agency's Inventory
of Greenhouse Gas Emissions and Sinks, in 2022 U.S. livestock farms
emitted approximately 46 percent of the U.S. agriculture sector's
greenhouse gas emissions. USDA support for improved livestock manure
and feed management technologies not only benefits farmers but also
provides public benefit by reducing emissions. USDA works to ensure
activities supported by its programs do not result in harmful localized
impacts. When USDA supports voluntary farmer-implemented conservation,
safeguards are in place to ensure public safety and environmental
performance.

Question 27a. How will IRA funding be made available in the future
for similar kinds of infrastructure or livestock-related conservation
practices? Can USDA commit to the Committee that livestock producers
will be given fair consideration and will receive contracts through IRA
funding?
Answer. The Inflation Reduction Act (IRA) is authorized through
September 2031. We anticipate that IRA and farm bill funding for
infrastructure or livestock-related conservation practices may continue
to be sustainable under flagship conservation programs, such as the
Environmental Quality Incentives Program (EQIP). Through EQIP, NRCS
provides agricultural producers with one-on-one assistance to plan and
implement conservation improvements on livestock operations. Yes, USDA
will commit that livestock producers will be given fair consideration
and receive contracts through IRA funding.

Question 28. We've heard loud and clear from producers and
stakeholders that RCPP agreements are extremely difficult to get
approved due to an overly arduous process. Mr. Secretary, what
specifically is USDA doing to help improve the administration of RCPP?
Answer. NRCS has identified ways to streamline and simplify RCPP,
ease the burden on employees and partners, and help maximize
flexibility for partners to leverage their investments with NRCS
resources and capabilities. Through a concerted effort since the start
of this Administration, USDA has taken steps to address those concerned
with RCPP using guidance, feedback, and expertise from partners,
employees, leadership, and stakeholders, NRCS has identified several
improvements that the agency expects to implement in the months and
years ahead such as:

Streamlining RCPP agreements and moving to one programmatic
agreement to begin implementing the RCPP projects awarded under
the Fiscal Year 2024 notice of funding opportunity. This will
allow partners to more quickly begin implementation of their
RCPP projects.

Entrusting program management and negotiation to the State
Conservationists, who lead NRCS programs in each state, further
encouraging the locally-led process and ensuring the necessary
technical needs and costs were realized before project proposal
submission.

Establishing parameters and expectations for easement
negotiations, including availability of easement deed templates
and established program processes to reduce partnership
agreement negotiation and implementation timeframes.

Improving RCPP guidance and training, ensuring RCPP policies
and procedures are communicated in a uniform and consistent
manner.

Enhancing existing business tools to improve the user
experience while beginning development of new business tools
that, through integration and automation, will reduce the time
required for agreement negotiation, processing obligations, and
making payments to partners.

The RCPP improvements are coming at a critical time, as they will
strengthen NRCS's ability to implement the Inflation Reduction Act,
which provided $4.95 billion in additional funding for the program over
5 years.

Question 28a. As we move forward with a new farm bill, how can
Congress help improve the program?
Answer. We ask that Congress continue to support us while we work
to make positive changes for the American people. There is already an
RCPP improvement effort underway that includes updates in this year's
RCPP funding opportunity, as part of an ongoing effort to streamline
NRCS conservation programs and efficiently implement the Inflation
Reduction Act.

Question 29. Since ``no net loss'' of wetlands was adopted as a
national goal in 1977, it has seen support from both Democratic and
Republican Administrations. Has the Biden-Harris Administration
reaffirmed this long-standing goal or refined the goal to express a
goal for ``net gain'' in wetlands? What is your Administration doing to
prioritize and support voluntary restoration of wetlands to mitigate
wetland losses?
Answer. NRCS has been supporting the voluntary restoration of
wetlands since the Wetlands Reserve Program began in 1992. The
Agricultural Conservation Easement Program (ACEP) was enacted as part
of the 2014 Farm Bill. Wetland Reserve Easements (WRE) through ACEP
allow private and Tribal landowners to protect, restore, and enhance
wetlands that have been previously degraded due to agricultural uses.
Through Fiscal Year 2023, NRCS has closed on 15,322 ACEP-WRE and
predecessor program easements covering 2,842,078 acres.
On September 28, 2023, the Biden-Harris Administration Announced a
historic $3 billion dollars for climate-smart \3\ practices on
agricultural lands through the Investing in America agenda. NRCS
identified priorities for ACEP investments under the Inflation
Reduction Act.
---------------------------------------------------------------------------
\3\ https://www.usda.gov/media/press-releases/2023/09/28/biden-
harris-administration-makes-available-historic-3-billion.
---------------------------------------------------------------------------
In Fiscal Year 2023, NRCS enrolled 42 Wetland Reserve Easements
through the Inflation Reduction Act. In fiscal year 2024, NRCS expanded
the priority areas for ACEP Wetland Reserve Easements, prioritizing:

Eligible land with soils high in organic carbon,

Eligible lands that will be restored to and managed as
forests like bottomland hardwood forests,

Eligible lands in existing forest cover that will be managed
as forests,

Several geographically specific priorities (i.e., former
cranberry bogs, wet meadows, and ephemeral wetlands in
grassland ecosystems).

The Wetland Mitigation Banking Program \4\ ** (WMBP) also supports
the development of mitigation banks for the restoration, creation, or
enhancement of wetlands to compensate for unavoidable impacts to
wetlands at another location. WMBP supports critical wetland
restoration and protection while also expanding options for producers.
These projects allow us to collaborate with states, local governments,
and other qualified partners to restore, create, and enhance wetland
ecosystems.
---------------------------------------------------------------------------
\4\ https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/
programs/farmbill/?cid=nrcs
eprd362686.
** Editor's note: the hyperlink results in an Error 404. The link
for the Wetland Mitigation Banking Program on NRCS's site is: https://
www.nrcs.usda.gov/programs-initiatives/wmpb-wetland-mitigation-banking-
program.

Question 30. The Migratory Bird Resurgence Initiative (MBRI) within
the Environmental Quality Incentives Program has been a great success
in the Prairie Pothole Region and the Pacific, Mississippi, and Central
Flyways by creating habitat for migrating birds on private lands. Do
you support the continuing and prioritizing of funding for this
important initiative?
Answer. NRCS continues to be committed to supporting this important
initiative. For the second time, in the spring of 2024, NRCS announced
that it would be accepting applications from agricultural producers for
enrollment in a special Environmental Quality Incentives Program (EQIP)
sign-up. NRCS is investing at least $12 million to support agricultural
producers through the EQIP-MBRI, helping to protect and improve natural
resources and habitat for migratory birds and other avian species in
the Prairie Pothole Region and targeted areas of the Pacific,
Mississippi, and Central Flyways.

Question 31. Mr. Secretary, by statute, the Rural Energy for
America Program is limited to ``agricultural producers and small
businesses.'' How has this limitation impacted the ability for
agricultural producers to participate in the program through a member-
owned cooperative?
Answer. The existing statute creates challenges for agricultural
cooperatives (and farmers) wanting to use the REAP program.
Agricultural cooperatives can only participate in the REAP program if
they qualify as a small business as defined by SBA.

Question 31a. Do you, as the Secretary of USDA, have the ability to
adequately define the term ``small business'' for the purposes of this
program to address those concerns?
Answer. USDA continues to evaluate this.

Question 32. Siting for solar energy is becoming a bigger and
bigger issue for my district. Solar developers are outbidding farmers
for good, highly productive farmland. This has a lasting impact on
local economies that depend on agricultural production. As you know
farmland not only produces the food, fuel, and fiber this country
needs, but also provides tremendous conservation benefits like cleaner
air and water and habitat for wildlife. What is or what can the
Department do to ensure that we don't lose our most valuable and
productive farmland to solar developments?
Answer. While renewable energy is growing rapidly, it remains less
than one percent of the loss of farmland nationally, while 99 percent
of farmland loss is driven by suburban expansion. Federally funded
projects--including wind and solar projects--must be evaluated for
significant impact on farmland and alternative sites to minimize the
use of Federal funds on unnecessary conversion of farmland to
nonagricultural uses must be considered. This is legally required under
the Farmland Protection Policy Act and guided by the USDA Natural
Resource Conservation Service as part of the environmental review
process. In 2022, 32 Federal agencies evaluated projects that combined,
could potentially reach roughly \1/100\ of 1 percent (0.014 percent) of
farmland, and approximately \3/1000\ of 1 percent (0.003 percent) of
prime or unique farmland. That annual scale is comparable to findings
from the last 15 years.

Question 33. Mr. Secretary, it has been roughly 2 years since USDA
announced $3.1 billion for 141 Climate-Smart Partnership projects, and
it is my understanding that implementation began in late Spring 2023.
We've heard from many stakeholders that it's been slow getting projects
off the ground. How much money has gone out the door, and how much of
that has reached farmers, ranchers, or foresters?
Answer. As of February 2024, USDA had finalized agreements for over
130 agreements ranging from $250,000 to $90,000,000 focused on
expanding climate-smart markets. Many of these projects have already
started enrolling producers. Based on the ambitious targets USDA has
set with these projects, in 2023, nearly 2,000 producers were enrolled
in the Partnerships for Climate-Smart Commodities initiative,
encompassing nearly 2 million acres. The USDA expects to see these
numbers continue to grow rapidly, estimating at least 50,000 farms
reached in the next 5 years, encompassing more than 25 million acres of
working land engaged in climate-smart production practices like cover
crops, no-till, nutrient and manure management, as well as pasture and
forest management.

Question 33a. Are you on track to reach the stated goal of an
emissions reduction of 60 million metric tons of CO2?
Answer. Yes, USDA is working with partners on expanding climate-
smart markets through Partnerships for Climate-Smart Commodities
projects that we estimate will result in these reductions. In producing
climate-smart commodities, a broad range of climate-smart practices
across different types of commodities is being applied, and we're
learning from projects on how to scale these practices across thousands
of farms. These include soil health practices, such as no-till, cover
crops, and intensive grazing that sequester carbon; practices that
reduce methane emissions, like manure management practices, covering
lagoons, and alternative wetting and drying on rice; and fertilizer
management practices, including using enhanced efficiency fertilizers
to reduce nitrous oxide emissions. These projects plan to also test
innovative approaches to measure and monitor the climate benefits from
these practices, and the approaches include testing innovative
measurement technologies, leveraging satellite data, employing
blockchain, developing new data collection systems, and scaling
estimation methods to provide credible greenhouse gas benefits at low
cost.

Question 34. Mr. Secretary, the Security Exchange Commission plans
to release the final rule for its climate disclosure proposal in April
2024. Since the SEC initially proposed the rule, it has received
significant backlash, specifically on the question of SEC's authority
to require companies to disclose scope three emissions. How have you
worked with the Chairman to relay the detrimental impacts this rule
would have on the United States agriculture industry?
Answer. USDA engaged with the Chairman and SEC staff to communicate
the potential implications and concerns regarding their climate
disclosure rule. At the time the proposed rule was being considered,
USDA provided feedback on options under consideration, including
concerns around the potential burden of Scope 3 reporting requirements.
On March 6, 2024, the SEC adopted final rules to enhance and
standardize climate-related disclosures by public companies and in
public offering. The final rules will provide more consistent,
comparable, and reliable information about the financial effects of
climate-related risks on a registrant's operations and how it manages
those risks. SEC noted that ``while many investors today are using
Scope 3 information in their investment decision making, based upon
public feedback, we are not requiring Scope 3 emissions disclosure at
this time.'' We will continue to follow the developments of greenhouse
gas emissions and climate-related financial risk regulation and ensure
that SEC is informed on the implications of potential approaches on the
suppliers of agricultural and forestry commodities.

Question 35. On December 19, 2023, the Rural Utilities Service
issued a correction notice in the Federal Register, amending the Notice
of Funding Opportunity (NOFO) for the Community Connect Program for
Fiscal Year 2023. This correction extended the application window to
February 20, 2024, and notably altered the definition of an eligible
Proposed Funded Service Area, shifting from areas lacking broadband
service of 25/3 Mbps to those lacking service of 10/1 Mbps, aligning
with the 2018 Farm Bill requirements.
We have heard from stakeholders who have expressed concerns that
this correction has adversely affected entities' eligibility, leading
to wasted time and resources in their application process. Can you
provide insights into the events that prompted the corrective notice to
the March 20th NOFO, and what measures can the Department implement in
the future to prevent such occurrences, ensuring that rural communities
do not expend valuable time and resources on ineligible applications
for USDA programs?
Answer. Unlike the 2018 Farm Bill broadband program, the agency did
not realize that the Community Connect program's definition of
broadband service was fixed at 10/1 Mbps, without the ability to revise
the minimum level of service. The FCC's definition of broadband service
was 25/3 Mbps at the time, and the agency mistakenly attempted to align
the definition with them but did not apply. Once the error was known,
the agency was quickly required to reverse course. Going forward with
the program, the flexibility to define broadband would allow USDA to
adjust the definition of broadband to be consistent with consumer
demand and the FCC changes in the definition of broadband. Note that
the FCC changed the definition of broadband service to 100/20 Mbps in
March 2024 and has adopted a long-term goal of 1 Gbps/500 Mbps, and so
the Community Connect program is drastically out of step with the rest
of the Federal Government and the industry.

Question 36. Mr. Secretary, USDA has consistently increased the
build-out speeds in the ReConnect Program since its inception. Most
recently, in Rounds 3 and 4, entities must now deliver symmetrical 100/
100 speeds, up from 25/3 speeds in Rounds 1 and 2. This symmetrical
speed mandate seems to diverge from the statutory directive that the
ReConnect Program maintains ``technological neutrality'' and avoids
favoring any particular technology. Could you provide us with the
reasoning behind the Department's decision to institute a universal
symmetrical speed requirement, seemingly favoring fiber optic networks
while potentially undermining the technological neutrality principle?
Can you share with us what specific data the department relied upon
to determine that retail broadband customers require symmetrical
broadband speeds?
Answer. The symmetrical 100/100 build-out speed was chosen to
fulfill the Congressional mandate to ``future proof'' the investment in
rural broadband infrastructure. Early build-out investments in rural
broadband infrastructure were based on the definition of broadband at
that time. This was 10/1. Broadband demand has expanded well beyond
that definition. It is important that current broadband infrastructure
investments, the so-called ``once in a lifetime'' opportunity, meet
current and future consumer needs. Data on consumer broadband
subscriptions show a dramatic and rapid ship to high-speed broadband.
In addition, the rapid advancement of precision agriculture
technology is creating a rapid increase in on-farm need for high-speed
broadband. The nature of precision agriculture broadband relies on
upload as well as download speeds. Symmetric high-speed broadband is a
vital tool enabling the agriculture sector to fully utilize the
benefits of precision agriculture.
Finally, 100/100 symmetric broadband is an important component
supporting emergency communications in rural areas.
The build-out speed requirement is based on current and future
customer needs, including precision agriculture and emergency
communications. This is a technology-neutral approach. Any type of
technology that meets this standard can be supported. Significant
advances in fixed wireless technology put the 100/100 symmetric
standard within its reach.
The 100/100 symmetric standard is consistent with the FCC proposed
``long-term speed goal of 1 Gbps/500 Mbps to give stakeholders a
collective goal towards which to strive--a better, faster, more robust
system of communication for American consumers.'' [https://
docs.fcc.gov/public/attachments/DOC-400675A1.pdf]

Question 37. Mr. Secretary, as you know, there have been concerns
about staffing challenges within the USDA, particularly in the Rural
Development Office based in Washington, DC. In previous hearings, you
mentioned that USDA Rural Development is facing 'difficult strategic
decisions' regarding budget and staffing. Could you elaborate on these
challenges and outline your strategy to address them, ensuring that
Rural Development has the necessary staff to effectively carry out its
mission?
Answer. Since 2010, the staffing in Rural Development has been
declining as the programs have increased exponentially. Based on a
study done in 2020, the optimal staffing level for RD is 6,800 FTE to
support the necessary loan, grant-making, and servicing needs across
RD. Due to budget considerations, we are requesting 4,671 FTE in the
2025 Budget. Between regular appropriations averaging $48 billion in
program level in the last 3 years, IRA funding supporting $12.2 billion
in budget authority, and the $2 billion provided in the Bipartisan
Infrastructure Bill, RD is struggling to deploy this unprecedented
funding levels with the same amount of people for the last 3 years.
Additionally, RD struggles to provide the much-needed continued
servicing and support of the recipients of the RD funding provided
year-over-year. USDA is also focusing on supporting disadvantaged
communities that need additional assistance from the Federal
Government. The 2025 budget is requesting a modest increase to continue
to support our regular program. For the supplemental programs we
received, with the authorities provided in the law, we are able to
provide the administrative support to deploy the supplemental programs,
however, the continued servicing and support to our customers remains a
challenge. RD is also evaluating their IT processes and developing a
full business case analysis in several areas to determine the most
cost-effective and efficient automation available towards streamlining
our automation solutions. We will continue communications with Congress
indicating our progress on delivering the funding provided.

Question 37a. In your testimony, you mention the Rural Partners
Network, which was created to provide full-time Federal staffers on-
the-ground in certain rural communities to assist the community in
applying to Federal programs by providing technical assistance.
Can you elaborate on the number of Federal staff that you have
selectively placed in certain rural communities? How has this
expenditure on staff impacted the department's ability to meet the
strategic challenges you just outlined?
Answer. The Rural Partners Network was launched in April 2022 with
the express purpose to address the needs of distressed rural
communities that have long been challenged by substantial under-
investment through Federal resources. RPN is a recognition that the
Federal Government can do more to support these communities. The
addition of the Federal staff we have hired to support the identified
communities and the collaboration amongst 25+ Federal agencies has led
to increased visibility and access to Federal programs. For example, in
Fulton County, Kentucky, local leadership leveraged RPN to address
long-standing challenges in the transportation space leading to
significant investments from the Department of Transportation. It is
one thing to make opportunities available to rural communities, but if
we are seeking to assist a small community with a part-time Mayor and a
town clerk, there is also a need to assist with significant capacity
challenges. RPN exists to fill and strengthen those capacity gaps.
Specifically, we have hired 36 staff supporting 36 multi-
jurisdictional networks across the country. That same staff also
supports additional distressed rural communities in the states in which
they reside to connect these communities to appropriate resources.
While they are USDA employees, this staff serves as excellent
ambassadors to Federal programs beyond just USDA and have directly
leveraged over $300 million in assistance to RPN communities. Given the
value proposition, this staff positively impacts USDA's ability to meet
our strategic challenges, while also supporting our Federal partners'
efforts to address needs in underserved communities. We have received
requests from additional communities and would love an opportunity to
implement RPN in more places, with consideration for smart expansion
based on budget and needs.

Question 38. Mr. Secretary, the Rural Innovation Stronger Economy
(RISE) Grant Program has been quite popular as it helps rural
communities foster job creation and support new businesses. However,
there remains a pressing concern among my constituents regarding
existing workforce challenges. Sectors such as telecommunications,
water and wastewater services, electric services, health care, and
other key community services are experiencing a scarcity of prospective
employees.
As we work on drafting the upcoming farm bill, what strategies do
you envision to more effectively address these current workforce
challenges we see in rural America?
Answer. The Rural Innovation Stronger Economy (RISE) Grant Program,
launched in the last farm bill, has experienced high demand since
inception, however, the challenges to the program have been funding
levels and oversubscription. The RISE program received a portion of
authorized funding in Fiscal Years 2021, 2022, and 2023 with no funding
in FY 2024. There were 16 awards made out of nearly 400 applications in
those years.
The RISE program provides funding for collaborative regional
stakeholder projects addressing current workforce challenges in rural
areas. In particular, RISE helps secure funding for innovative
programs, which results in providing a solution to one of the key
workforce challenges in rural areas, high-paying jobs. Additionally,
with an aging population in rural areas, shortages of highly skilled
labor continue to occur. Programs such as RISE help address innovative
regional planning and implementation to provide high-paying jobs and to
train rural citizens in skilled employment.

Question 39. In October 2023, the USDA and the Small Business
Administration signed a memorandum of understanding (MOU) focused on
aspects such as capital access and support for businesses in rural
America, reminiscent of a previous MOU from early 2018 that lapsed last
year. Could you highlight the lessons learned from the 2018 MOU,
discuss how both agencies aim to enhance their collaborative efforts,
and provide us with your expectations on the anticipated benefits this
collaboration will bring to rural America?
Answer. The 2018 MOU did not take advantage of all the potential
synergies across the Department of Agriculture, and its focus was
limited to the Rural Development mission area.
The 2023 MOU expanded upon the previous MOU by including more
mission areas and agencies explicitly in the MOU thereby providing more
opportunities for collaboration across both agencies. There is a table
of synergies where USDA and SBA can strengthen their partnerships and
break down silos to provide greater access to capital and opportunities
in rural America.
Right now, USDA is making sure small businesses in Rural Partners
Network (RPN) community networks can take advantage of SBA's HUB Zone
programs. Our expectations are that through the MOU, USDA and SBA will
take advantage of the existing synergies. We also expect more
opportunities for cooperatives to have access to SBA products and tools
to support rural communities.

Question 39a. The recently signed MOU in October delineates
potential synergies between the USDA and the Small Business
Administration in the realm of lending. While collaboration is crucial,
I want to emphasize the significance of USDA's lending programs,
specifically tailored to our farmers. Can you assure that these
programs will not be compromised by the involvement of another agency,
and commit to ensuring their continued effectiveness?
Answer. The focus of the MOU is providing access to capital to
rural small businesses that are uniquely at a disadvantage. The MOU
will also help cooperatives access SBA products since their business
structure limits the eligibility for SBA programs. The MOU serves to
complement USDA programs rather than as a substitute for USDA programs
that lend to our farmers.
Questions Submitted by Hon. Austin Scott, a Representative in Congress
from Georgia
Question 1. Mr. Secretary, as you know, Section 1005 of the
American Rescue Plan was intended to provide loan forgiveness to
``socially disadvantaged'' borrowers, based solely on race and
ethnicity and irrespective of any other factors. In response to the
filing of Holman v. Vilsack, a court opinion dated July 8, 2021
declared a nationwide injunction on all debt forgiveness in which the
judge concluded that USDA was unable to prove that the loan forgiveness
failed to meet the necessary tests, that the ``Plaintiff has shown a
substantial likelihood that he will prevail on his claim that Section
1005 violates his right to equal protection under the law'' and that
``the remedy chosen and provided in Section 1005 appears to fall well
short of the delicate balance accomplished when a legislative enactment
employs race in a narrowly tailored manner to address a specific
compelling governmental interest.''. Ultimately, Section 1005 was
repealed via the Inflation Reduction Act and the case is moot, yet the
legal rationale for the injunction remains valid. One would think your
Department would consider this court ruling in the development of
future efforts that provide relief based on racial and ethnic factors,
yet it seems that your Department is doubling down.
Answer. USDA makes all efforts to ensure that its actions are
consistent with the law.

Question 2. In the Extending Government Funding and Delivering
Emergency Assistance Act (P.L. 117-43) Congress provided funding to
cover losses due to a litany of disasters occurring in 2020 and 2021.
In order to ensure equity amongst producers who paid substantial
premiums for insurance and risk management coverage vs. those that did
not, Congress instructed USDA that any calculation utilizing crop
insurance indemnities should utilize net indemnities (i.e., ``minus any
premiums or fees paid for such coverage'') rather than gross
indemnities. This essentially resulted in a premium rebate that was
provided to all producers. Yet in the assistance for 2022 losses
provided by the Disaster Relief Supplemental Appropriations Act, 2023
(P.L. 117-328), USDA decided to arbitrarily exclude white males from
receiving this premium rebate despite no material changes in the
statutory text. Mr. Secretary, in the absence of direction from
Congress and in light of the court's opinion in Holman v. Vilsack,
please explain your rationale for this clearly discriminatory
administrative decision. Mr. Secretary, I continue to hear from family
farmers in my district about the failure of the 2022 Emergency Relief
Program for Production Agriculture. Farmers were already anticipating a
lower level of disaster assistance for their losses due to lack of
funding, only to learn that USDA in D.C. had implemented a new
methodology for ERP that would only pay a fraction of what was already
a partial payment on losses. If Congress approves disaster assistance
funding for crop year 2023, do you anticipate USDA using the same ERP
structure as in 2022?
Answer. USDA can deliver more assistance to disaster-affected
producers when available funding more closely aligns with uncovered
losses. If Congress authorizes additional disaster assistance funding
for crop year 2023, USDA will carefully consider that statutory
authority and the funding provided in designing disaster assistance.
As I have shared with many others on this Committee, for disasters
occurring during the calendar years 2020 and 2021, Congress authorized
$10 billion in emergency relief funding to assist agricultural
producers impacted by wildfires, droughts, hurricanes, winter storms,
and other eligible disasters. Yet, in early conversations about the
need for 2022 emergency relief assistance, USDA informed Congress that
the estimated disaster-impacted producers incurred at least $10 billion
in uncovered losses. Actual numbers are closer to $12 billion in
uncovered losses.
Given that available funding for crop losses (approximately $3.2
billion) was substantially less than the estimated costs to adequately
cover 2022 disaster losses, USDA designed a program within those
funding constraints and within the statutory authority.
USDA used its discretion to design a program to deliver more
benefits to the majority of producers. The end result was a more
advantageous, equitable distribution of the limited funds to more
producers in need of assistance. Specifically in your home state of
Georgia, the ERP 2022 progressive factoring option resulted in more
advantageous than the flat factor for 75% of Georgia program
participants, approximately 3,212 producers.

Question 3. I saw the USDA press release yesterday where you
announced yet another new conservation program hiring additional staff
for USDA. Small, medium, and large size growers, as well as lenders,
community banks, and farm credit, are telling me and my staff that the
current 2018 Farm Bill programs are not functioning effectively with
the increased input costs of production farmers have experienced. Your
own staff has issued reports, both before the Holidays and recently,
that demonstrate a continued slide in net farm income and an
agricultural trade deficit. We are going to lose a generation of
farmers unless we shift from climate initiatives to a focus on
production agriculture. You have the resources to work with the
Committees on how to increase reference prices, and where to find
funding, for farmers that are producing our food and fiber. Will you
ask your staff to spend more time on how to address the financial
situation of production agriculture versus how to expand climate
initiatives?
Answer. Thank you for your question, I expect the press release you
recently saw was related to the February 12, 2024 announcement that
USDA was hiring staff to help with the record numbers of applications
from farmers, ranchers, and rural small businesses that are seeking
USDA funding for clean energy projects under the Rural Energy for
America Program \5\ (REAP). Those new positions were funded by the IRA
and are necessary to ensure that our nation's small-, medium-, and
large-size producers, rural businesses, and communities are able access
the historic IRA funding to make clean energy improvements at their
farms, ranches, and businesses that will help them to lower energy
costs, bring in new streams of income, and also address climate change.
It is a false dilemma to think that acting on climate change and
supporting those IRA programs is not also helping farmers financial
bottom lines.
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\5\ https://www.rd.usda.gov/programs-services/energy-programs/
rural-energy-america-program-renewable-energy-systems-energy-
efficiency-improvement-guaranteed-loans.
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With respect to farm income USDA has taken unprecedented actions to
level the playing field so that our small and mid-sized farmers can get
a fair price for their products, while making billions of dollars in
transformative investments through the ARP and IRA to create new
markets and new income opportunities for family farmers so it is not
simply the old proposition of get big or get out. USDA will continue to
focus its efforts on helping these producers by enhancing economic
resiliency and robust price competition, increasing our farmers' and
ranchers' earnings, increasing the ability to compete, and keeping
farming viable and rural communities thriving.
Questions Submitted by Hon. Doug LaMalfa, a Representative in Congress
from California
Question 1. Mr. Secretary, domestic competitiveness is very
important for all producers. In your trade agenda, with Under Secretary
Taylor, you've stated trade should benefit everyone, but specialty
crops especially are facing import pressures and problems with domestic
competitiveness. Besides RAPP, what can the USDA do to enhance domestic
product competitiveness against imports?
Answer. On November 9, 2023, USDA announced the Specialty Crops
Competitiveness Initiative (SCCI) as part of a larger effort to support
specialty crop producers. The objective of SCCI is to better focus USDA
resources and identify needs to support the competitiveness of U.S.
specialty crops in domestic and international markets, minimize costs,
manage pests and diseases, strengthen supply chains, and support
climate outcomes. Senior USDA officials have held roundtable meetings
to meet directly with specialty crop stakeholders in Arizona,
California Colorado, Florida, Georgia, Michigan, Pennsylvania, and
Washington State. Currently, USDA is reviewing comments on the Request
for Information, published in the Federal Register that closed on March
8, 2024.
Utilizing a portion of Commodity Credit Corporation (CCC) funding,
the Foreign Agricultural Service (FAS) developed a $100 million
initiative designed to address the unique export challenges of the
specialty crop sector and provide support to overcome them. The effort,
known as the Assisting Specialty Crop Exports Assisting Specialty Crop
Exports (ASCE) initiative, will complement, but not replicate, support
already provided through the Market Access Program (MAP) and the
Technical Assistance for Specialty Crops (TASC) program. This
initiative is an opportunity for FAS to partner with the specialty crop
industry beyond the provision of grants, by leveraging the depth and
breadth of USDA's expertise to address foreign trade barriers. We will
match that expertise with specific industry-identified bottlenecks.
USDA will design projects based on industry feedback. Funds will be
directed to organizations that can deliver the education, the data
collection, or the research needed to address the export barriers
identified.

Question 2. Mr. Secretary, the Emergency Relief Program had
different implementation approaches from 2021-2022, putting California
producers at a disadvantage. Changing process is difficult for
producers and the payments are so low many producers found the process
not worth it. How can the USDA create more certainty for producers
impacted by disasters?
Answer. For disasters occurring during the calendar years 2020 and
2021, Congress authorized $10 billion in emergency relief funding to
assist agricultural producers impacted by wildfires, droughts,
hurricanes, winter storms, and other eligible disasters.
In early conversations about the need for 2022 emergency relief
assistance, USDA informed Congress that the Department estimated
disaster-impacted producers incurred at least $10 billion in uncovered
losses. Actual numbers are closer to $12 billion in uncovered losses.
Given that available funding for crop losses (approximately $3.2
billion) was substantially less than the estimated costs to adequately
cover the disaster losses for 2022, USDA designed a program within
those funding constraints.
USDA can deliver additional assistance to disaster-affected
producers when available funding more closely aligns with uncovered
losses. Permanent disaster authority and funding would provide
certainty for producers that additional resources are available to
reduce the impact of uncovered losses when unexpected disasters occur.

Question 3. Mr. Secretary, the current labor shortage continues to
be a big issue for farmers across the country and in my district,
especially for the specialty crop industry. Although your agency does
not have direct jurisdiction on the H-2A temporary worker program, the
USDA can further the advancement of mechanization and automation
research and development.
Answer. See response to LaMalfa Question 3a.

Question 3a. What conversations have your Administration had on the
topic and is anything being done to further mechanization research and
development?
Answer. Title VII, Section 7610 of the Agriculture Improvement Act
of 2018 includes a request to identify programs of the USDA that
accelerate the development and use of automation or mechanization in
the production or processing of specialty crops. USDA has six such
programs in the Agricultural Marketing Service, the Agricultural
Research Service, and the National Institute of Food and Agriculture.
The USDA Economic Research Service submitted a report to Congress in
2020 describing these programs (https://www.ers.usda.gov/publications/
pub-details/?pubid=958
27).
USDA has leveraged several opportunities provided by Congress to
accelerate the development and use of automation or mechanization in
the production or processing of specialty crops. The Agricultural
Marketing Service (AMS) provides a variety of services to establish the
quality and availability of agricultural products for U.S. consumers
and market opportunities domestically and internationally for U.S.
agricultural producers. Support for rural America and the Nation's
agricultural sector is provided, in part, through a variety of AMS-
managed competitive and non-competitive grant programs, including the
Specialty Crop Block Grant Program (SCBGP). The SCBGP is a non-
competitive grant program, which provides funds (approximately $72.3 M
in FY 2024) to state departments of agriculture to enhance the
competitiveness of specialty crops. Promoting new research and
development is one of seven key outcomes and performance measures under
the SCBGP, which USDA actively monitors and evaluates as part of an
annual performance report. Legislative authority is provided under
section 101 of the Specialty Crops Competitiveness Act of 2004 (7
U.S.C. 1621 note) and amended under section 10107 of the Agriculture
Improvement Act of 2018, Public Law 115-343 (the farm bill).
Under the SCBGP, State Departments of Agriculture have utilized
funding to administer a wide range of projects promoting mechanization
and automation efforts, including unmanned aerial systems/drone
technology, precision agriculture, and artificial intelligence.

Question 3b. Has your agency identified any ways in which your sub
departments can implement these strategies?
Answer. See response to LaMalfa Question 3a.

Question 4. Mr. Secretary: Recently, the EPA finalized a proposal
that will lower the National Ambient Air Quality Standards (NAAQS) for
Particulate Matter 2.5. Additionally, USDA just concluded a comment
period for a proposal that would implement a land management plan
change to all national forests specifically for old growth. States in
the West like California have tremendous fuels treatment needs and this
new standard could significantly limit the number of windows available
for land managers to conduct essential prescribed burns to prevent
future catastrophic wildfires.
Given the catastrophic impact of wildfire in the West, can you
discuss what kind of impact EPA's new rule as well as a new-found focus
on old growth will have on other Forest Service priorities such as the
10 year strategy for confronting the wildfire crisis?
Answer. We believe the proposed amendment will provide more
certainty, which will facilitate, rather than hinder, implementation of
the Wildfire Crisis Strategy and other priorities.

Question 4a. Regarding the PM2.5 ru[l]ing, have the
agencies discussed how to address prescribed fire on private lands?
Answer. The EPA strengthened the primary (health-based) annual fine
particulate matter (PM2.5) National Ambient Air Quality
Standard (NAAQS) from 12 micrograms per cubic meter to 9 micrograms per
cubic meter. The stronger standard may affect burners of wildlands
regardless of land ownership whether Federal, state, Tribal, local, or
private land. Since the EPA released the Notice of Proposed Rulemaking
(NPRM) in early 2023, the USDA, Forest Service, EPA, DOI, and CDC have
been discussing potential implications of the revised NAAQS at
leadership to staff levels. On November 9th of 2023, EPA Administrator
Michael S. Regan, DOI Secretary Deb Haaland, USDA Secretary Tom Vilsack
and Director of CDC Mandy Cohen announced a Memorandum of Understanding
\6\ (MOU) to further their joint work to protect communities from the
impacts of wildfire smoke, while promoting land management practices
that reduce the risk of large, severe wildfires which includes
strategic use of prescribed fire (Biden-Harris Administration Agencies
Sign Interagency Agreement to Address Wildfire Risk and Protect
Communities from Smoke D The White House \6\).
---------------------------------------------------------------------------
\6\ https://www.whitehouse.gov/briefing-room/statements-releases/
2023/11/09/biden-harris-administration-agencies-sign-interagency-
agreement-to-address-wildfire-risk-and-protect-communities-from-smoke/
.
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The Forest Service, EPA, DOI, and CDC released a joint workplan
outlining wildland fire-related priorities the agencies will focus on
for fiscal years 2024-2025. This workplan, which had activity starting
in 2023, specifically builds on concerns about the implementation of
the new standard for all landowners that use prescribed fire on
wildlands. One of the joint exercises, a multi-day tabletop effort held
in Georgia in January 2024, highlighted the specific challenges for
private landowners who use prescribed fire and how Federal, state, and
local forestry, air quality, and public health agencies will need to
work together to ensure continued use of prescribed fire under the
revised PM2.5 standard. As the standard is now effective,
the EPA, USDA, Forest Service, DOI, and CDC are continuing the work to
evaluate implementation of the standard, efficient application of
pertinent existing Clean Air Act regulations that affect prescribed
fire use and to work together to build tools to support an alignment of
land management and air quality objectives.

Question 4b. What measures are in place to ensure we can use
prescribed fire regardless of jurisdiction?
Answer. As part of the aforementioned MOU and workplan, the
application of the EPA's Exceptional Events Rule \7\ (EER) (Treatment
of Air Quality Monitoring Data Influenced by Exceptional Events D U.S.
EPA \7\) will be an important tool for maintaining wildland prescribed
fire use for all jurisdictions under the revised annual
PM2.5 standard. After meeting provisions of the Rule, the
EPA allows for exclusion of data influenced by prescribed fires on
wildland in the context of an action of regulatory significance. Such
actions include initial area designations, which is currently ongoing
following the final NAAQS revision. Thus, states may seek exclusion
through the EER for data influenced by prescribed fires on wildland,
consistent with the EER, for purposes of the initial area designations
process. The EPA and other signatories to the MOU have developed
several tools and approaches to make the EER process as efficient as
possible to aid in this monitoring data being subsequently excluded for
purposes of initial area designations. The MOU has facilitated
productive conversations with EPA and we are exploring frameworks that
will allow state, local, and Tribal air managers to avoid the burden of
unneeded analysis, have needed data readily available, and other
efficiencies that meet the needs of air managers while avoiding
creating a disincentive for the use of prescribed fire on wildlands
regardless of jurisdiction.
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\7\ https://www.epa.gov/air-quality-analysis/treatment-air-quality-
monitoring-data-influenced-exceptional-events.

Question 5. Mr. Secretary: The Fish and Wildlife Service recently
proposed an updated policy and new rule for management of the National
Wildlife Refuge System focused on Biological Integrity, Diversity, and
Environmental Health (BIDEH). In the section of the proposal entitled
``Management activities and uses with potential to ensure biological
integrity, diversity, and environmental health,'' FWS proposes to ban
native predator control, the use of genetically engineered organisms,
and agricultural uses, except where required by statute or other
limited reasons. Farmers and ranchers are an important part of the
refuge system, and indeed the FWS website says ``Cooperative
agriculture--partnering with farmers and ranchers to meet wildlife
management objectives--is a long-standing practice on national wildlife
refuges.'' You have testified before this Committee and given speeches
expressing concern about farms getting pushed out of business in recent
years.
Was USDA consulted about these proposals in its capacity as part of
the Federal Government's coordinated, risk-based system to ensure that
new biotechnology products are safe for the environment and human and
animal health?
Answer. USDA's APHIS was not consulted as part of the Coordinated
Framework. USDA welcomes the opportunity to collaborate with the
Service as it determines next steps and as contemplated in the U.S.
Coordinated Framework for the Regulation of Biotechnology, which
describes how Federal agencies will work together to ensure the safety
of biotechnology products.

Question 5a. Was USDA consulted about the impact that removing
agriculture from the Refuge System could have on family farms and rural
communities?
Answer. USDA's APHIS was not consulted on this rule.

Question 6. Mr. Secretary, I continue to be concerned about Buy
American requirements in school meals. American dollars should support
American-produced food products. U.S. farmers produce some of the
safest and most nutritious food worldwide for our families and children
while creating American jobs. I have a bill to tighten some of these
requirements and sent a letter with my colleagues about the
requirements in your proposed school meals rule.
Can you commit that any final rule on school meals will tighten Buy
American requirements and close the current loopholes that allow
overseas fruits and vegetables that could be bought from farmers in my
district?
Answer. The Biden-Harris Administration shares your commitment to
prioritizing American products in the school meal programs. Under the
National School Lunch Act, all schools participating in Federal school
meal programs are required to purchase domestic commodities and
products ``to the maximum extent practicable.'' Implementing guidance
provides two exceptions under which schools may purchase non-domestic
foods:

(1) When a product is not produced or manufactured in the U.S. in
sufficient and reasonably available quantities of a
satisfactory quality; or,

(2) When the cost of the U.S. product is significantly higher than
the foreign product.

Recently proposed regulations entitled ``Child Nutrition Programs:
Revisions to Meal Patterns Consistent with the 2020 Dietary Guidelines
for Americans \8\'' would strengthen Buy American requirements for
school meals and would make it easier for schools to buy locally grown
foods.
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\8\ https://www.fns.usda.gov/cn/fr-020723.
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In order to further strengthen the Buy American provision, USDA
proposed to institute a five percent ceiling on the non-domestic
commercial foods a school food authority may purchase per school year.
By proposing to institute a five percent cap, USDA is balancing the
intent of the Buy American provision to support American farmers and
ranchers while also recognizing that there are times when purchasing
domestic foods is not practicable for schools.
Furthermore, the proposed regulations would make it clear that
schools can use a geographic preference to procure local food for
school meals.
USDA Foods in Schools purchases about 2 billion pounds of food from
American farmers each year, which makes up about 15 to 20 percent of
the food served in the National School Lunch Program. All USDA Foods
must be domestically produced.
Additionally, the USDA Department of Defense Fresh Fruit and
Vegetable Program (USDA DoD Fresh) helps schools to use USDA Foods
entitlement dollars to buy fresh domestic produce, offering schools a
variety of U.S.-grown whole and pre-cut fresh fruits and vegetables. In
Fiscal Year 2023, more than 42,000 schools placed orders for weekly
deliveries of American-grown fresh fruits and vegetables through USDA
DoD Fresh spending over $552 million in support for domestic fruits and
vegetables.
Questions Submitted by Hon. Trent Kelly, a Representative in Congress
from Mississippi
Question 1. The states of the Lower Mississippi Valley, especially
my home state, experienced historic conversion of wetlands to produce
the food and fiber necessary to feed and clothe our nation. The broad
suite of USDA conservation programs, especially the Wetlands Reserve
Easements, are popular with our producers and benefit society broadly.
What is your Administration doing to ensure significant funding
continues to flow to this region for producers to voluntarily restore
wetlands?
Answer. NRCS is updating its processes around easement acquisition
activities including appraisals and land surveys to enroll land into
easements. NRCS plans to encourage procurement of land surveys earlier
in the acquisition timeline, such as when an application has been
tentatively selected for an ACEP-WRE enrollment. NRCS is also
increasing its use of partnerships to assist with acquiring the land
surveys and has simplified the review process for producer-acquired
land surveys. This will speed up the time it takes producers and
landowners to enroll.
These improvements are the first step in an ongoing effort to
streamline ACEP and ensure that significant funding can flow to the
region through easier and convenient utilization of the program. The
improvements will also strengthen implementation of the Inflation
Reduction Act, which included 1.4 billion in additional funding for
ACEP over 5 years.
NRCS annually announces additional funding opportunities through
the Wetland Reserve Enhancement Partnership (WREP). The purpose of WREP
enrollment is to target and leverage resources to address high-priority
wetland protection, restoration, and enhancement objectives through
agreements with states.

Question 2. Inflation Reduction Act funding was intended to support
climate-smart conservation practices and help level the playing field
for historically underserved producers to adopt these practices. My
state, along with the other Southern states, has the greatest
proportion of producers in the U.S. How much of the IRA funding and in
what proportion has been provided for climate-smart practices and
historically underserved producers in our region?
Answer. NRCS has continued to reach out and interact with the
historically underserved groups. In addition to this targeted outreach,
NRCS has been looking at ways to streamline programs and reduce
barriers to program participation. Below is a table showing the amount
of IRA funding for CSP and EQIP at a national level and in the
Southeast Region. The states included in the Southeast region are
Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi,
North Carolina, South Carolina, Tennessee, Virginia, and the Caribbean
Area.

------------------------------------------------------------------------
Percent HU
Location Program Obligations Obligations
------------------------------------------------------------------------
National CSP IRA $170,963,915 22.3%
EQIP IRA $147,539,391 39.5%
Southeast CSP IRA $60,415,217 30.0%
EQIP IRA $41,590,976 50.9%
------------------------------------------------------------------------

Through the Rural Energy for America Program, in FY 2022 and FY2024
so far, the Rural Development has obligated over $362 million to
projects serving historically underserved producers across the country,
which represents nearly 4% of the program. For the States of North
Carolina, South Carolina, Kentucky, Tennessee, Georgia, Florida,
Alabama, Louisiana, Mississippi, Oklahoma, Arkansas, and Texas a total
of over $122 million has been invested in underserved communities.
Projects by underserved producers score higher and are prioritized
by our Technical Assistance providers for outreach and support to
underserved communities.

Question 3. Thank you for USDA's leadership in promoting voluntary
and incentive-based climate-smart agriculture programs. Robert Bonnie,
Under Secretary for Farm Production and Conservation, has made the case
that technology will be critical to ensuring farmers can reduce
greenhouse gas emissions while maintaining global food supplies. Bonnie
has noted that some climate-smart practices are dependent on the use of
herbicides. Secretary Vilsack, how is USDA working with EPA to ensure
that growers have access to safe and effective pesticide tools to
continue to utilize climate-smart agriculture practices and meet our
sustainability goals?
Answer. The USDA is led in pesticide policy by the Office of Pest
Management and Policy (OPMP) and the Natural Resources Conservation
Service (NRCS), which actively works with the Environmental Protection
Agency (EPA) on the registration of new active ingredients and
pesticide registration review. OPMP and NRCS coordinate Departmental
activities and services regarding the development, availability, and
use of economically and environmentally sound pest management tools and
practices.

USDA provides EPA with the most accurate data available to
help ensure that pesticide decisions are based on modern,
realistic agricultural practices.

USDA reviews and responds to proposed pesticide risk
mitigation strategies.

USDA conducts surveys and analyzes available data to answer
pest management-related research questions.

USDA communicates with stakeholder groups regarding pest
management-related decisions and policies.

On February 6, 2024, the USDA signed a memorandum of understanding
(MOU) with the EPA. This MOU describes how EPA can reference NRCS
conservation practices so that growers who voluntarily perform those
practices can meet pesticide label requirements.

Question 4. Congress directed the EPA to consult with USDA and ESA-
FIFRA Interagency Working Group members to develop measures to reduce
the effects of pesticides on listed species and their critical
habitats. Secretary Vilsack, how did EPA reach out to USDA when
developing the new ESA work plan, work plan update, the Vulnerable
Species Pilot, and the Herbicide Strategy? EPA has mentioned that they
are working with NRCS regarding voluntary conservation efforts in their
ESA mitigation efforts. Secretary Vilsack, can you give the Committee
some idea of what EPA and NRCS are working on? How do we ensure that
NRCS programs continue to be voluntary?
Answer. As part of the IWG, USDA had the opportunity to provide
comment on the ESA workplan. USDA and EPA staff have regular calls to
discuss pesticide issues, including the ESA workplan and its
implementation.
The U.S. Environmental Protection Agency (EPA) and U.S. Department
of Agriculture (USDA) signed a memorandum of understanding (MOU) to
better align EPA's strategies for protecting endangered species from
pesticides with USDA's National Resources Conservation Service (NRCS)
voluntary and incentive-based producer conservation practices. This
coordination will help EPA meet its obligations under the Endangered
Species Act (ESA) while increasing flexibility for the agricultural
community and keeping safe, effective pest management tools in farmers'
hands. As part of the review process for the MOU, USDA worked to ensure
that the MOU clearly states that NRCS programs must remain voluntary.
NRCS and USDA will continue to maintain that position in the
development of any additional guidance materials on the MOU.

Question 5. The Office of Pest Management Policy works well with
EPA. Still, sometimes, their comments are not addressed by the EPA
during the registration and reevaluation process for pesticides. How
are you working with the Administrator of the Environmental Protection
Agency to ensure that during the interagency process that OPMP data and
information is included?
Answer. OPMP is constantly working to ensure that our data and
information are included in decision-making by providing clear and
transparent information in such a way as to be most useful and easily
understood by EPA at all levels. We also provide that information
through public processes to ensure that that information is in the
public record should laws or policies change in the future.

Question 6. Formaldehyde is an essential building block in
chemistry with various uses that are essential to keeping America's
meat, poultry, crop protection, and aquaculture products safe. These
uses are especially important for the Mississippi aquaculture industry,
which produces 65% of the nation's catfish. Aquaculture operations use
formaldehyde to control fungi and prevent deadly bacterial infections.
Pork and poultry producers use formaldehyde products to prevent viruses
and bacteria, including protecting against a catastrophic outbreak of
African Swine Fever. The EPA is undertaking a risk evaluation for
formaldehyde under TSCA and FIFRA. I've heard concerns from agriculture
stakeholders who worry that unreasonable regulations not based on sound
science will threaten these vital uses. Secretary Vilsack, has the EPA
engaged with USDA to discuss the formaldehyde risk evaluation? Given
the impact of agriculture and food safety, will you commit to ensuring
USDA is voicing the concerns of the ag community during the interagency
process?
Answer. We share your interest in ensuring farmers have access to
tools that help keep America's meat, poultry, crop protection, and
aquaculture products safe. When other Departments or Agencies pursue
significant rulemaking, USDA actively engages in the interagency review
process established by Executive Order 12866. There are currently no
EPA rules on formaldehyde in the interagency review process. On March
15, 2024, EPA released the draft risk evaluation under TSCA for
formaldehyde for public comment. This is the next step in a process
that could result in regulations in 2026. EPA also released for public
comment the draft risk assessment under FIFRA on April 19, 2024. USDA
provided comments during the FIFRA public comment periods that EPA will
consider as it revises the assessment and we will be actively engaged
in the interagency review of any regulations that flow from this risk
assessment.

Question 7. Mr. Secretary, Congress approved over $18 billion in
conservation dollars through the Inflation Reduction Act of 2022. I
hear from my constituents back home about a lack of conservation
funding actually getting to working lands programs and producers on the
ground. For legislation passed over 2 years ago, can you explain to the
Committee why the Department is taking so long to get these funds out
to the countryside and how you intend to get those funds on the ground
faster and more effectively?
Answer. Recently, NRCS has experienced unprecedented demand for
conservation from farmers and ranchers, with applications outpacing
available funding. Even with Inflation Reduction Act funding, NRCS had
significant unmet producer demand for conservation through the
Environmental Quality Incentives Program (EQIP) and the Agricultural
Conservation Easement Program (ACEP).
Please refer to our February 13, 2024, press release,\9\ which
talks about how NRCS made record investments in private lands
conservation in fiscal year 2023 thanks to historic resources made
available by President Biden's Inflation Reduction Act, the largest
investment in climate action in history. I can assure you that we are
getting these conservation investments to our working lands programs
and to producers on the ground who are eager to sign up for these
climate practices. That said as I shared at the hearing, we have seen
demand for these climate practices and our working lands programs in
IRA and the farm bill far outstrip the funding Congress provided. We
will continue to work with farmers, ranchers, and forestland owners on
the ground to help them both protect natural resources and enhance
production.
---------------------------------------------------------------------------
\9\ https://www.nrcs.usda.gov/news/biden-harris-administration-
makes-record-investment-in-private-lands-conservation-as-part-of.
---------------------------------------------------------------------------
For Fiscal Year 2023, NRCS has also released data showing its
investment of over $2.8 billion in financial assistance for
conservation and supported more than 45,000 contracts, more than any
year in the agency's 89 year history. The agency obligated 99.8 percent
of all available FY 2023 Inflation Reduction Act financial assistance
funds to farmers, ranchers, and forest landowners across America and is
on track to have robust producer participation in 2024.
The agency has also released updated state-by-state data\10\
showing where investments went in FY 2023 for the farm bill and
Inflation Reduction Act. Minnesota alone had 175 IRA contacts in FY
2023 totaling $9.8 million in conservation funding covering over 77
million acres. There were also additional investments through farm bill
conservation funding.
---------------------------------------------------------------------------
\10\ https://www.nrcs.usda.gov/resources/data-and-reports/rca-data-
viewer.

Question 8. Mr. Secretary, Congress appropriated $3 billion of ad
hoc disaster assistance for crop losses from the 2022 crop. Can you
explain to the Committee why it's taken the Department almost a year to
implement the program and why the Department structured the program in
such a way that producers who suffered significant losses aren't
getting adequate help due to the payment reduction factors?
Answer. The rollout timing of ERP 2022 was due to the
Administration's efforts to incorporate key enhancements from lessons
learned through the administration of ERP Phases 1 and 2. Specific
enhancements include but are not limited to, implementation of a multi-
track process to provide all disaster-affected participants with access
to relief simultaneously in lieu of phased delivery, inclusion of
additional substantial beneficial interest (SBI) holders on prefilled
applications, and development of an automated process supporting
updates to prefilled applications as new or updated crop insurance and
Noninsured Crop Disaster Assistance Program (NAP) records are
available. Enrollment began October 31, 2023. An ending date has not
been announced.
For disasters occurring during the calendar years 2020 and 2021,
Congress authorized $10 billion in emergency relief funding to assist
agricultural producers impacted by wildfires, droughts, hurricanes,
winter storms, and other eligible disasters.
In early conversations about the need for 2022 emergency relief
assistance, USDA informed Congress that the Department estimated
disaster-impacted producers incurred at least $10 billion in uncovered
losses. Actual numbers are closer to $12 billion in uncovered losses
for 2022 disasters. However, Congress chose to only provide $3.2
billion in funding for uncovered crop losses and an additional $494.5
million for uncovered livestock losses.
Given that available funding for crop losses (approximately $3.2
billion) was substantially less than the estimated costs to adequately
cover the disaster losses for 2022, USDA designed a program to deliver
more benefits to the majority of producers within those funding
constraints. USDA made every effort to incorporate lessons learned from
our previous disaster programs and glean important input from
producers, commodity groups, members of Congress, and other stakeholder
groups before opening the program for applications. The end result was
a more advantageous, equitable distribution of the limited funds to
more producers in need of assistance. Specifically in your home state
of Mississippi, the ERP 2022 progressive factoring option resulted in
more advantageous than the flat factor for 76% of Mississippi program
participants, approximately 2,135 producers.

Question 9. Mr. Secretary, in light of the recent Federal court
case impacting the use of the herbicide dicamba, is your office of
pesticide programs communicating with the EPA to make sure they
understand the critical situation this court ruling makes for growers
who have purchased this product for the growing season and are
requesting that the EPA issue a flexible existing stocks order on this
for 2024 use?
Answer. Yes, our Office of Pest Management Policy is communicating
with EPA on this issue. We were happy to see that EPA is allowing over-
the-top dicamba product to move through channels of trade for use
during the 2024 growing season using its existing stock provisions,
though we are hearing that some clarity is needed around that policy
for distributers. We will stay abreast of this important issue as we
know this situation is of critical concern to soybean and cotton
growers.

Question 10. Mr. Secretary, could you provide insights into how
agricultural industries can lead the way in implementing strategies to
address environmental concerns within the agriculture sector while
ensuring reliable agricultural production?
Answer. Maintaining and improving productivity of U.S. agriculture
is critical for both feeding the world and continuing to be responsible
environmental stewards. The U.S. agricultural sector has and will
continue to lead the way through practicing the following strategies
that both address environmental concerns while also continuing to
maintain productivity.

Maintain and improve soil health--reducing emissions and
enhancing soil carbon sequestration;

Improved nitrogen management--implementing the 4 R's of
nitrogen management, reducing nitrous oxide emissions, and
protecting water quality;

Livestock partnerships--reducing potent methane emissions
from manure and protecting water quality;

Improved grazing--reducing emissions, building or
maintaining soil carbon stocks, and improving animal
production;

Agroforestry, forestry, and wildlife--building and
maintaining carbon stocks in perennial biomass and soils;

Restoration of disturbed lands--reducing erosion and
improving the quality of previously mined or degraded lands to
increase soil and perennial biomass carbon stocks;

Energy, combustion, and electricity efficiency--reducing
emissions from agricultural operations and infrastructure
through reduced energy and fossil fuel use;

Wetlands--restoring wetlands to enhance carbon storage in
soils and vegetation;

Alternate wetting and drying irrigation systems in rice--
reducing methane emissions from rice fields through irrigation
and water management.
Questions Submitted by Hon. Don Bacon, a Representative in Congress
from Nebraska
Question 1. It is our understanding that USDA currently reports in
its USDA's Cropland Data Layer database a single number for converted
grassland acres. Because this single number does not differentiate
between acres rotated from perennial cover into crops and those acres
converted from native grassland or range into row crops, it is
difficult to distinguish between the two types of acreage. This could
have future implications with foreign trading partners whose policies
might not capture the differences in acreage if the USDA cannot
differentiate between the data.
What is the USDA's rationale for reporting this single number for
converted grassland acres?
Has the USDA considered changing the reporting to differentiate
between the two types of acreage mentioned above?
Answer. The Census of Agriculture and published official
statistics, which are based primarily on surveys, are considered the
authoritative sources when measuring and reporting pasture/grassland
and crop acreage via the NASS Quickstats (https://
quickstats.nass.usda.gov/) database. NASS does not report on land
conversions or differentiate between acres rotated from perennial cover
into crops and those acres converted from native grassland or rangeland
into row crops. However, rotational/conversion analysis can be
performed by either industry or affiliated USDA agencies using
published NASS data.
The USDA NASS Cropland Data Layer (CDL) is a land cover
classification based on satellite imagery that is derived using USDA/
FSA Common Land Unit as training data and published annually. The
purpose of the CDL is to provide supplemental planted acreage estimates
to the NASS Agricultural Statistics Board for major commodities. The
accuracy is excellent for large area row crops but much lower for
grasslands. The CDL identifies planted/tilled crops for the growing
season and does not inform on land cover/land use change or land
conversions. Additionally, NASS does not provide data services to
analyze land cover or land use change; it publishes what was planted
during the growing season via the CDL. The NASS data portal of
CroplandCROS (https://croplandcros.scinet.usda.gov/) can be used for
change analysis or visualization by data users.
NASS does not use the CDL to produce any reports/statistics on
grassland/cropland conversions. There is a historical catalog of CDL
data, so it is likely users/industry have attempted to derive their own
calculations of grassland conversion, such as ``Recent land use change
in the Western Corn Belt threatens grasslands and wetlands'' https://
www.pnas.org/doi/full/10.1073/pnas.1215404110 from 2013 and
``Accuracy, Bias, and Improvements in Mapping Crops and Cropland across
the United States Using the USDA Cropland Data Layer'' https://
www.mdpi.com/2072-4292/13/5/968 from 2021.
It is very challenging to accurately identify perennial grasses vs.
pasture/grasslands using satellite imagery. Definitionally it is
difficult to identify via satellite whether a unit of land is pasture/
grassland used for farming intentions with or without the presence of
livestock or simply native grasses. Thus, the CDL is not the best
indicator of pasture/grazing land, albeit it is highly accurate for the
identification of major commodities. Determinations of land conversions
are left to the researchers for their reporting based on the available
datasets.
In summary, NASS does not report on land conversions or
differentiate between acres rotated from perennial cover into crops and
those acres converted from native grassland or rangeland into row
crops. The CDL is not well suited for that purpose.

Question 2. Mr. Secretary, about a year and half ago (November
2022), USDA proposed to cut the amount of milk in the WIC program, so
pregnant women, nursing mothers, infants, toddlers and young children,
would each get less milk and dairy. Since then, bipartisan House
Members sent a letter urging you not to go forward with that milk cut.
The House Agriculture Appropriations bill includes a provision that
would ensure any changes to the WIC food package would not cut milk.
I've heard USDA say that increases in WIC participation will
increase milk sales in WIC. But USDA's own analysis of the proposed
rule shows a net-decrease (cut) in redemptions for WIC's milk/dairy
category: which would translate into a $25 million increase per year
decrease in milk redemptions and at least a $7.5 million per year
decrease in cheese redemptions. That demonstrates this cut in milk and
dairy in WIC is real and will have real consequences for WIC moms and
their children. But this isn't about milk sales. This is about cutting
the amount of milk for each mother, infant and toddler in the WIC
program and harming their nutrition. Milk is one of the top items
redeemed in WIC and one of the items fully utilized. And there is
survey data showing that 76% of WIC moms oppose this cut, including 20%
who say they would not re-enroll and another 34% unsure if they would
stay in the WIC program if this cut goes forward.
Can you tell the Committee if you still plan to go forward with
cutting milk in USDA's final rule modifying the WIC food package?

USDA Proposed Changes to WIC Food Package Overall Milk/Dairy
------------------------------------------------------------------------
USDA
Proposed Rule
Maximum +/- Proposed
Participant Category Current WIC Monthly Rule Compared
Allotment Allotment to Current
(MMA) for Rule
Milk
------------------------------------------------------------------------
Children 1 year (12 through 16 quarts 12 quarts 4 quarts
23 months)
Children 2 through 4 years 16 quarts 14 quarts 2 quarts
Pregnant 22 quarts 16 quarts 6 quarts
Partially (Mostly) & Fully 22 quarts 16 quarts 6 quarts
Breastfeeding
Postpartum 16 quarts 16 quarts No change
------------------------------------------------------------------------

Answer. By law, USDA is required to conduct scientific reviews of
the WIC Food Packages and update them, as needed, to reflect the latest
nutrition science and public health needs, while also recognizing the
supplemental nature of the package.
Although the intention of WIC is to provide a variety of under-
consumed nutrients in supplemental amounts, the current WIC food
packages provide more than a supplemental amount of milk, amounting to
85 to 128 percent of the total dairy recommended by the Dietary
Guidelines. The National Academies of Sciences, Engineering, and
Medicine (NASEM) recommended--and USDA proposed--modest decreases in
the amount of milk provided to align with the supplemental nature of
the program. At the proposed levels, WIC would still provide milk
equivalent to 71 to 96 percent of the total amounts of dairy
recommended by the Dietary Guidelines.
The Department anticipates the comprehensive set of changes made in
this final rule align with nutrition science and consumer preferences
and will result in more participants fully redeeming their food
benefits. For example, the proposed rule would provide more flexibility
for states to authorize a variety of container sizes allowed for
yogurt. Paired with these added flexibilities, we still expect USDA to
spend around $900 million on dairy products per year in WIC. Put in
context, the decrease we estimated in spending on milk and cheese
represents only about 2% of WIC's annual spending on dairy overall.
USDA is committed to modernizing the WIC program to best serve
participants and maximize the reach of the program's proven benefits.
USDA anticipates that our efforts to modernize WIC, coupled with
efforts to create a more appealing food package, will increase WIC
participation, and subsequently help more families access dairy
benefits as well as other nutritious foods.

Question 3. Crop production is a key part of my district's economy,
and we depend on exports to keep demand strong. Secretary, we
appreciate your clear acknowledgement of the importance of trade in the
announcement of the Regional Ag Promotion Program. As you know, the
Market Access Program and the Foreign Market Development program are
also vital tools to bolster current market access and find new
opportunities. It is my view that the RAPP program is supplemental to
the MAP and FMD programs, and should not serve to replace the
longstanding investments that MAP and FMD have cultivated over time.
Could you share your views about the importance of export promotion
in general?
Do you agree that RAPP is supplemental to MAP and FMD, given that
there are different markets targeted in RAPP as well as different
parameters in place for eligibility?
Answer. Export promotion is vitally important for the success of
American farmers. Trade promotion investment helps keep existing
markets open and creates access to new markets. Exports to these
markets provide income directly back to U.S. farmers and producers. For
decades, USDA's Market Access Program (MAP) and Foreign Market
Development (FMD) program have been very successful in expanding U.S.
exports to markets across the globe. A study on the economic impact of
these programs determined that the U.S. agricultural export value
increased by $24 for every dollar invested in export market
development. These programs provide a significant boost to the U.S.
agricultural industry, which in turn helps strengthen the economy not
just in rural communities, but across the entire United States.
Successful market development takes time and significant resources,
however, MAP and FMD funding has remained level since 2006. The new
Regional Agricultural Promotion Program (RAPP), which is utilizing the
critical CCC funds, is designed to complement MAP and FMD by supporting
eligible projects that enable exporters to break into new markets and
increase market share in growth markets. Market diversification is an
important tool for maximizing growth opportunities for U.S.
agriculture, and to hedge the risk of market contraction and general
volatility in the global marketplace. Given the significant investment
necessary to open and develop new export markets, RAPP will help
provide that start-up capital so that American exporters can diversify
their markets and create new opportunities. RAPP encourages exporters
to establish, build, and grow their presence in regions like South and
Southeast Asia, Latin America and the Caribbean, and Africa, markets
with growing middle classes and increased demand for U.S. products.

Question 4. Corn exports are a key part of my district and the
Cornhusker State's economy and corn growers are not unique among other
U.S. agriculture commodities in facing challenges with expanding access
in export markets. For example, corn exports to our key customers have
dropped in recent years, and Brazil has claimed market share. As you
are well aware, once market share has been lost, it is fairly difficult
to get back. Obviously, I am acutely aware of USTR's primary role in
negotiating trade agreements or other trade initiatives.
However, can you share how USDA is working with USTR to underscore
the need for a proactive approach so that our competitors do not
continue to gain market share and capture opportunities that would have
otherwise been ours?
Additionally, how is USDA working to resolve SPS and technical
barriers?
Answer. Last year, USDA worked with USTR, foreign governments,
international organizations, and our private sector partners to reduce
and eliminate trade barriers for U.S. exports, preserving more than
$6.4 billion in overall U.S. agricultural exports. USDA continues to
actively work together with USTR to prevent market share loss. USDA
continues to raise specific trade concerns for sanitary and
phytosanitary (SPS) and technical barriers to trade during annual
committee meetings, as well as through official USG comments to the
WTO.
In addition, USDA provides trade capacity building to current and
emerging trading partners to promote international trade and open
markets for U.S. agricultural exports--creating predictable and
transparent trade environments favorable to U.S. agricultural exports.
USDA oversees projects that help U.S. trading partners understand and
implement science-based international SPS standards and practices, as
well as managing projects that address technical barriers to trade and
trade facilitation. USDA collaborates with domestic and international
experts to help build the institutional regulatory capacity of our
trading partners to expand and ensure predictable market access for
U.S. exporters.

Question 5. New export market opportunities exist all around the
globe and will play a critical part in the years to come as our export
markets shift.
In your opinion, where are some areas of the world that present
potential for U.S. agriculture exports, particularly beef, pork, corn,
and soybeans?
Answer. USDA remain laser-focused on expanding trade and market
opportunities for U.S. food and agricultural products and building on
significant wins under the Biden-Harris Administration to break into
new markets. Since 2021, we have actively engaged with trading partners
to reduce tariff and non-tariff barriers for more than $21 billion of
U.S. agricultural exports.
USDA is also investing in a variety of initiatives to boost U.S.
exports to a variety of global markets, with an emphasis on markets
with large and growing middle-class populations. The $1.2 billion USDA
investment to implement the Regional Agricultural Promotion Program
(RAPP) complements other traditional export market development and
promotion programs to enhance exporters' ability to diversify into new
markets and increase market share in growth markets.
When it comes to U.S. pork and pork exports, USDA works closely
with U.S. industry representatives to understand and identify key
markets with growth and export potential for U.S. products. Beyond
maintaining traditional markets such as Mexico, Canada, Australia, and
China, we see opportunity for export growth of U.S. pork to countries
such as the Dominican Republic and Central American countries and
hopefully South Africa and Jamaica once barriers can be removed.
Similarly, in addition to the goal to maintain market share in our
traditional beef markets of South Korea, Japan, Mexico, Canada, and
now, China, we also see opportunity for U.S. beef in markets such as
Indonesia, Vietnam, and the Philippines, which have burgeoning
populations and high middle-class growth. We also think Africa presents
opportunities for U.S. beef.
With respect to corn and soybean exports, USDA is actively working
to maintain markets for corn in countries such as Mexico, Japan, and
China. Soybean exports are also being maintained in China, the EU, and
Mexico. With USDA's new RAPP specifically targeting Africa, we view
this as an opportunity to build momentum for U.S. beef, corn, and
soybean exports to the region.

Question 6. Mexico is the number one destination for U.S. corn
exports, and in fact 47.5% of our total corn exports go to our southern
neighbor. As you know, Mexico's biotech ban on certain uses of biotech
corn has already had an impact on U.S. corn exports and it threatens to
upend market access to our most important customer if Mexico's corn
decree is fully implemented. We appreciate the work of USTR and USDA in
launching the dispute settlement process under USMCA.
How has USDA been coordinating with USTR to ensure that the U.S.
position is successful, and that the panelists can vividly see that the
science is on our side?
Answer. Addressing this issue through the USMCA dispute resolution
process is a top priority for the U.S. Department of Agriculture (USDA)
and the Office of the United States Trade Representative (USTR). Under
the USMCA, we and our partners have jointly agreed to maintain science-
based measures to protect human, animal, and plant life and health. For
decades, our system has ensured that commercialized biotech-improved
products are as safe as conventional counterparts--and it will continue
to do so. This USMCA dispute is currently in active litigation, and
USDA is working very closely with USTR to ensure U.S. corn growers have
full and fair access to the Mexican market.

Question 7. Kenya presents a market access opportunity for
agricultural exports, including corn and soybeans. Kenya's view of
biotechnology has shifted in recent years, perhaps providing an
opportunity for access. I understand access for biotechnology products
depends on the Kenyan court system, but simultaneously, the U.S.'s
trade talks with Kenya can also tackle barriers related to ag biotech.
How is USDA working with USTR to capitalize on this momentum in
order to create tangible benefits for American growers?
When do you expect negotiations to conclude?
Answer. USDA is committed to working alongside USTR to emphasize
science and risk-based decision making amongst trading partners. While
market access for agricultural biotechnology products is reliant upon a
positive outcome from the court system in Kenya, USDA is also working
continuously to facilitate connections between U.S. industry and Kenyan
counterparts.
Over the past few years, USDA has funded approximately $186,000 of
Market Access Program (MAP), Foreign Market Development (FMD), and
Emerging Markets Program (EMP) projects in Kenya, supporting the work
of our agricultural commodity and trade association cooperators. In
2024, pending the Government of Kenya's approval, the U.S. Grains
Council anticipates fulfilling a 60 metric ton shipment of dried
distillers' dried grain with solubles (DDGS) containing products of
agricultural biotechnology under USDA's Quality Samples Program (QSP);
with this first shipment, potential customers will be able to discover
the benefits of U.S. DDGs. Through engagements and programs, such as
the QSP, MAP, EMP, FMD, or USDA's new Regional Agricultural Promotion
Program (RAPP), USDA will continue to capitalize on momentum created by
trade talks to support opportunities for growers of agricultural
biotechnology products.
USDA continues to work alongside USTR on the U.S.-Kenya Strategic
Trade and Investment Partnership (STIP). The agriculture team is making
tremendous progress and is working hard to improve bilateral trade for
all agricultural stakeholders. We are looking forward to a positive
outcome in the near future.

Question 8. Taiwan is an important trading partner and regional
ally of the United States. The U.S.-Taiwan Initiative on 21st Century
Trade is a step in the right direction to embolden our relationship. I
understand that trade discussions with Taiwan are still active but are
likely to address agricultural issues like biotechnology and pesticide
maximum residue levels. How is USDA ensuring that market access
opportunities present in Taiwan will be harnessed throughout
discussions on this initiative?
Answer. The discussions around the U.S.-Taiwan Initiative on 21st-
Century Trade are indeed active. The United States is pursuing high-
standard commitments to enhance market access for American farmers,
ranchers, workers, and businesses. For example, we are seeking
disciplines to ensure that sanitary and phytosanitary measures are
science-based, and developed and implemented in a transparent,
predictable, and non-discriminatory manner. These provisions are
intended to provide tools to tackle a wide range of barriers to safe,
wholesome U.S. agricultural products, and thereby increase access to
the Taiwan market for U.S. agriculture.
In addition to bilateral efforts with Taiwan and other partners,
USDA aims to create more opportunities for market access for U.S.
agricultural products through international organizations such as Codex
Alimentarius and the World Trade Organization. USDA, along with other
government agencies, is working to achieve the best possible outcomes
for American farmers, ranchers, and producers.

Question 9. In the 2022/2023 marketing year, the U.S. exported 1.25
billion gallons of ethanol, equivalent to 423 million bushels of corn.
Ethanol imports offer several advantages to foreign customers who are
seeking fuel options that are less carbon intensive. The U.S. has
historically exported ethanol into Brazil. However, Brazil applied a 16
percent tariff on ethanol imports in 2022 that rose to 18 percent last
month, which has essentially closed off market access for the U.S. How
is USDA prioritizing market access opportunities for ethanol and
working to address Brazil's trade action?
Answer. USDA continues to support U.S. ethanol market access
opportunities through engagement and programs, such as the Market
Access Program (MAP), Foreign Market Development (FMD), and USDA's new
Regional Agricultural Promotion Program (RAPP). USDA actively engages
our foreign counterparts around the world to resolve both tariff and
non-tariff trade barriers, including in coordination with the U.S.
industry to resolve issues they are facing.
USDA continues to actively engage with Brazil, in coordination with
the Office of the U.S. Trade Representative, to address the restrictive
tariff imposed on U.S. ethanol. This engagement has included
government-to-government dialogues and meetings. USDA has also actively
engaged with Brazilian regulators on their low carbon fuel policy,
RenovaBio, seeking technical corrections that will allow U.S. ethanol
to be certified under the program. Through these and other engagements,
and despite exports dropping more than 99 percent to Brazil, 2023 was a
record year for U.S. ethanol exports, valued at over $3.8 billion, an
increase of three percent from 2022. Volume-wise, U.S. ethanol exports
amounted to over 5.4 billion liters in 2023, a nine percent increase
from nearly 5 billion liters in 2022.

Question 10. USDA's Foreign Agricultural Service and its Brussels
Office support U.S. agriculture on a myriad of new regulations coming
out of the European Union's Farm to Fork policy. Importantly, the
European Parliament rejected legislation to cut the use of pesticides
in the EU and also passed legislation on a regulatory approach for new
genomic techniques. At the same time, the EU is banning neonicotinoid
use, even on imports, based on environmental criteria in third
countries, not food safety. The environmental conditions and pest
pressures in the United States or Kenya or Vietnam have no similarity
to those in the European Union. With European farmers calling on their
policy makers to force farmers around the world to follow the same
strict requirements as European farmers and agribusinesses, what is the
prospect of maintaining the EU as an export market and ensuring that
European regulations do not act as unwarranted trade barriers. What
more can USDA do, in cooperation with industry, to ensure regulations
are science based, non-discriminatory and taken for legitimate food
safety, plant health and animal health reasons?
Answer. Maintaining market access to the European Union for
America's farmers is a key priority for USDA. USDA teams in Washington
work closely with our agricultural attaches in Brussels and at the
national level in EU Member States to monitor the complex and evolving
regulatory landscape in Europe and alert our growers and ranchers of
upcoming issues that may result in trade issues. USDA is committed to
addressing technical or sanitary and phytosanitary trade barriers such
as burdensome requirements related to reductions in pesticide maximum
residue levels, contaminant maximum levels, labeling, or certification
requirements which otherwise may negatively impact our specialty and
commodity crop producers from shipping high-quality products overseas.
USDA agencies work closely with our interagency partners,
including, the U.S. Environmental Protection Agency (EPA), and the Food
and Drug Administration (FDA), as well as others, to ensure that
regulations are science-based and taken for legitimate reasons. USDA
engages bilaterally with the EU partners with USTR at the World Trade
Organization (WTO) in support of U.S. agricultural producers and
exporters.
The United States Codex Office (USCO), located in USDA,
participates in the development of international food safety and
commodity standards. USCO works with USDA agencies and interagency
partners to build support for U.S. policy positions and to counter
policies that are not based on sound science, completed risk
assessments, and reflective of international norms.
In addition to efforts within the EU, USDA supports projects
designed to counter EU regulatory influence in third countries. Some
countries apply hazard-based approaches to regulation based on the end
market for their exports (e.g., the EU) or because of a lack of
technical knowledge or enforcement of international risk-based
practices and measures. USDA works with third countries to strengthen
their use of science and risk in regulatory development and their
engagement in the rules-based trading system. This work will continue
and expand under the new Assisting Specialty Crop Exports (ASCE)
initiative.

Question 11. Mr. Secretary, I am concerned about growing foreign
threats to agriculture like ownership of farmland, acquiring American
agricultural technology, or stealing innovations and research from
companies and universities. The recent House Select Committee on
Strategic Competition with China suggested the Secretary of Agriculture
should be added to CFIUS as voting member. What is the role of USDA
across government in countering foreign threats to agriculture and what
agencies at USDA are currently responsible?
Answer. As a result of discussions between USDA and the Treasury
Secretary, USDA's role in CFIUS has grown. Each week, Treasury sends
the USDA Office of Homeland Security CFIUS Program (OHS/CFIUS) a Case
Log listing new and active CFIUS cases, as well as a Directorate of
National Intelligence (DNI) Summary of each new case the Committee has
started to review that week. Within 5 business days of receipt, USDA
must assess these summaries for agricultural equities. If there are
agricultural interests, USDA notifies Treasury that it would like to
review the full case filing. With respect to such cases, USDA becomes a
full participant in the CFIUS review process, evaluating if there is a
national security risk and, if so, if that risk can be mitigated. USDA
has been operating under this structure for approximately 18 months.
Last year there were over 400 CFIUS cases filed at Treasury and
reviewed at USDA.
Within the Department, CFIUS work is led by a small team in the
Office of Homeland Security. However, CFIUS work is done in conjunction
with the Office of the General Counsel, the Office of the Secretary,
and subject matter experts, as appropriate, from across the Department
to best inform each case to which we are party. USDA can provide a wide
range of expertise in cases related to agriculture, agribusiness,
forestry, rural utilities or housing, or any other such issue area that
falls under the Department's purview.

Question 11a. How can (What actions have been taken and how can)
USDA more proactively engage industry and land-grant universities to
help analyze, identify, counter, and mitigate potential threats to
agriculture?
Answer. Engaging industry and land-grant universities in analyzing,
identifying, countering, and mitigating threats to agriculture requires
a whole-of-government approach. USDA shares resources available from
the U.S. law enforcement and intelligence community with USDA
stakeholders. USDA is committed to protecting USDA investments in
science, technology, and innovation. International cooperation can
accelerate discoveries that contribute to the health and well-being of
the American people, while informing and working to solve global
challenges. However, cooperation should be conducted in a manner that
is mutually beneficial, while protecting USDA investments and,
subsequently, U.S. economic and national security.
Finally, USDA has funded research with industry partners and land
grant universities to study and address emerging threats to
agriculture. This includes research on plant pests, diseases, and
invasive species.

Question 11b. What additional resources and/or authority is needed
to proactively address current and future threats?
Answer. USDA OHS needs resources to support its sector risk
management responsibilities and an authority. We have asked for funding
to support the Food and Agriculture Critical Infrastructure Sector, one
of the 16 Critical Infrastructure sectors. USDA is open to engaging
more on this topic. USDA has reviewed with great interest the
authorities and subsequent resources provided to the National Science
Foundation (NSF) in the CHIPS and Science Act of 2022 (H.R. 4346),
including, but not limited to, establishment of a Research Security and
Policy office within the Office of the NSF Director with at least four
full-time staff (Section 10331-10332). The office is charged with
coordinating all research security policy issues across NSF which
includes identifying and addressing potential security risks that
threaten research integrity and other risks to the research enterprise;
developing research security policy and best practices; conducting
outreach and education activities for recipients on research policies
and potential security risks; educating NSF program managers on
evaluating for potential security risks; communicating reporting and
disclosure requirements; performing risk assessments of NSF proposals
and awards using analytical tools to assess nondisclosures of required
information; establishing policies to ensure compliance with NSPM-33;
and conducting or facilitating due diligence with regards to
applications for NSF R&D awards. The CHIPS and Science Act authorizes
the NSF Office of Research Security and Policy, in coordination with
the NSF OIG, to conduct risk assessments, including through the use of
open-source analysis and analytical tools, of research and development
award applications and disclosure to NSF (Section 10336).

Question 12. Mr. Secretary, I understand how important it is to see
food security as national security, and as such I have been a strong
supporter of the ``three-legged stool'' of animal health. Can you
please outline any areas of risk the Department sees as we look to
ensure foreign animal diseases like African Swine Fever, Foot-and-Mouth
Disease, and others do not enter the United States?
Answer. We appreciate Congress' support for the new animal health
programs in the last farm bill. Those have already yielded many
benefits for us in identifying new techniques for detecting and
responding to animal health emergencies. We know the diseases that you
mention are circulating throughout the world and that is why those new
programs are so important. They build on and enhance the work we
already do.
APHIS has a strong system of overlapping safeguards in place and
works every day to mitigate or eliminate risk of introducing high-
consequence foreign animal diseases. From the regulations that limit
imports from countries where diseases are present to the extensive
surveillance network, including the National Animal Health Laboratory
Network, which looks for and detects possible diseases, APHIS works to
keep that risk offshore. APHIS also invests in state, Federal, and
industry partnerships to ensure that diseases are recognized as quickly
as possible and that producers are familiar with biosecurity practices
that can protect their livelihoods.
Further, the agency's Smuggling and Interdiction and Trade
Compliance program explores domestic pathways for ways illegal goods
may be smuggled or moved. Just as important is the strong partnership
we have with U.S. Customs and Border Protection, whose agents and
detector dogs, all trained by us, serve as the front-line defense,
looking at passengers and cargo for pathways for pests and diseases and
ensuring compliance with our science-based regulations.
The farm bill programs you mentioned have been a great tool in
helping us prepare for foreign animal diseases. APHIS has invested
nearly $40M through the National Animal Disease Preparedness and
Response Program (NADPRP) to support over 180 projects that help
stakeholders identify potential risks and prepare to respond to the
most critical animal health threats facing livestock industries today.
It allows APHIS and its partners to enhance our capacity to respond to
foreign animal diseases like African Swine Fever and Food and Mouth
Disease.
Separate from the authorizations that the Committee has been
focused on for the farm bill, it is critical for you to understand that
the discretionary annual appropriations for APHIS to address, prevent,
and potentially respond to foreign animal diseases is vital to our
response on animal health. As are the discretionary appropriations to
support ARS and NIFA related to animal health matters. This Committee
has followed closely our work in APHIS to mitigate the outbreak of
highly-pathogenic avian influenza in the poultry industry since the
first case of HPAI was confirmed in a commercial flock in February
2022. That immediate response, veterinary expertise, and work to
educate the industry on biosecurity is dependent on our dedicated APHIS
employees that rely on discretionary annual appropriations as well as
some uses of the CCC.
Lastly, many on the Committee has been closely involved or at least
closely followed the work to authorize and establish the new National
Bio and Agro-Defense Facility (NBAF) in Manhattan, Kansas, an effort
that has been underway for some 17 years. This state-of-the-art maximum
biocontainment (BSL-4) facility will be able to study high-consequence
zoonotic diseases affecting large livestock and will serve as a
national asset to help protect against the threat and potential impact
of serious animal diseases. The NBAF facility will serve as a ``One
Health'' national and international resource, offering capabilities for
training, research and development, surveillance, prevention, and
response to emerging infectious diseases. However, the upkeep and
maintenance of this facility will be critical in continuing USDA's
foreign animal disease work.

Question 13. In July 2023, President Biden said: ``Mark my words:
the next 20 years, farmers are going to be providing 95% of all the
sustainable airline fuel.'' I know you agree with this vision--you have
spoken often about the promise of SAF as a new market for U.S.
agriculture . . . as one part of a biobased economy where each farm can
become a center of entrepreneurship that is focused on sustainable
agricultural practices that the market values. This vision of
homegrown, clean SAF produced by American agriculture is one that I
think all of us on this Committee can get behind. That is why I am so
puzzled by the situation with the Administration's guidance on tax
credits for SAF. In December, the Treasury Department named Argonne
National Lab's GREET model as a secondary model for calculating tax
credits for sustainable aviation fuel production. But, rather than use
the model developed by the independent Argonne National Lab, the
Administration is unnecessarily changing the GREET model, causing
delays that are slowing private investment and inserting updates that
seem to be intended to prevent American farmers from getting credit for
investments in the very sustainable ag practices that the
Administration claims to support. Will the Administration meet its
deadline of March 1 to have the GREET model update completed and will
the section 40B SAF tax credit be usable by SAF producers on that day?
Answer. We anticipate that the Biden-Harris Administration will
issue a Sustainable Aviation Fuel (SAF) notice as part of the Investing
in America agenda. The notice will catalyze innovation in the aviation
industry, incentivize the production of cleaner, more sustainable
aviation fuels, and help make the United States a leader in
decarbonizing the aviation industry. The Treasury Department's Notice
will provide important clarity around eligibility for the SSAF tax
credit that was established in the Inflation Reduction Act. The SAF tax
credit incentivizes the production of SAF that achieves a lifecycle GHG
emissions reduction of at least 50% as compared with petroleum-based
jet fuel.

Question 13a. Please explain how the GREET model update will
continue to deliver value to farmers by accurately crediting
conservation practices and emissions reductions from regenerative
farming, climate smart agriculture, and carbon capture and storage--all
techniques that could massively lower carbon emissions, if adopted?
Answer. As part of this effort, the U.S. Department of Agriculture
(USDA) and other Federal Government agencies (EPA, DOT/FAA, and DOE)
will jointly announce the 40B GREET 2024 model. This model provides
another methodology for SAF producers to determine the lifecycle GHG
emissions rates of their production for the purposes of the SAF tax
credit. The 40B tax credit also incorporates a USDA Pilot Program to
encourage the use of Climate-Smart Agriculture (CSA) practices for SAF
feedstocks. We are taking this path because we want to recognize the
climate benefits of these CSA practices and encourage their adoption,
but also recognize there is additional work to do to assess
verification mechanisms, empirical data, and modeling. Incorporating
CSA practices into the production of SAF provides multiple benefits.
These include lower overall GHG emissions associated with SAF
production, improved accuracy of overall carbon intensity estimation,
sustainable production of domestically-produced aviation fuel, and
increased adoption of farming practices that are associated with other
environmental benefits, such as improved water quality and soil health.

Question 13b. What steps is USDA taking to ensure that the GREET
modeling update that is underway uses the same rigorous science on
which the model is based and does not manipulate the model to deliver a
predetermined outcome, such as excluding ag-based biofuels from
eligibility for the SAF credit?
Answer. The modified version of GREET released in conjunction with
the April 30, 2024, SAF tax credit guidance incorporates new data and
science, including specific new modeling of key feedstocks and
processes used in aviation fuel and certain categories of indirect
emissions. It integrates other categories of indirect emissions--such
as crop production and livestock activity--in addition to land use
change emissions informed by GTAP-BIO. The modified GREET model also
integrates key greenhouse gas emission reduction strategies such as
carbon capture and storage, renewable natural gas, and renewable
electricity.

Question 14. Mr. Secretary, the Agricultural Marketing Service
(AMS) Livestock Mandatory Reporting (LMR) is important to cattle
producers who use this data as a base price point when pricing cattle.
About 99% of pricing formulas use data from LMR. When the data is
unavailable from this service, chaos and uncertainty occur in the
cattle market. During the 2013 shutdown, and again in the recent near
shutdown last fall, LMR was deemed unessential and went dark for 7
days. Thankfully, we averted a shutdown this past fall, however your
department informed our offices that you were going to repeat this
decision in the event of another government shutdown. While we can
agree that government shutdowns are not the answer to our fiscal
problems, hanging Nebraska's cattlemen out to dry is not the answer
either. Why was your department so willing to cause such deep
disruption to the markets when it was so easily foreseeable and
avertable?
In the event of a future government shutdown, can I get your
commitment to do your part to ensure that the United States government
continues to provide essential services to America's farmers and
ranchers like LMR?
Answer. The Agricultural Marketing Service's Market News
activities, including Livestock Mandatory Reporting, are 100% funded
with annually appropriated funds and legally could not and cannot
continue during a government shutdown without further action from
Congress. AMS would ask that LMR packers continue to submit data
voluntarily through the Mandatory Price Reporting System and historical
reports would continue to be available. I should add that across-the-
board government shutdowns and simply the threat of a shutdown are
incredibly disruptive. At USDA alone as many as 50,000 workers could be
furloughed, hurting USDA operations in every county in the country. Far
beyond these AMS report matters it must be stressed how disruptive a
shutdown is and that there are real consequences to real people in a
real way.
Questions Submitted by Hon. Mike Bost, a Representative in Congress
from Illinois
Question 1. Protecting U.S. farmland from being gobbled up by
foreign adversaries is a matter of national security. As of December
2022, foreign investors held an interest in over 43.4 million acres of
U.S. agricultural land.\11\ This is up 3.4 million acres from 2021.
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\11\ https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/
EPAS/PDF/2022_afida_an-
nual_report_12_14_23.pdf.
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Last month, the Government Accountability Office (GAO) released a
report which found that USDA has not been accurately recording foreign
investment data and that USDA has not been sharing the data it does
have in a timely manner.\12\ This is a national security risk in more
ways than one.
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\12\ https://www.gao.gov/products/gao-24-106337.
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By sharing data with the Committee on Foreign Investment in the
United States (CFIUS) only once a year, USDA is creating space for
foreign bad actors to go unnoticed for months. This is particularly
concerning with foreign investments near military installations, like
Scott Air Force Base in my district, the headquarters of the U.S.
Transportation Command. This military base oversees all transportation
for the Department of Defense.
Another concern of mine with foreign investment in U.S.
agricultural land is the number of acres that are being converted to
non-agricultural uses, like solar energy. From the foreign investment
data that USDA did collect for my district, more than half is being
repurposed for solar panel development or non-agricultural uses.\13\
While I am not opposed to solar energy in general, I am opposed to
taking prime farmland out of production for the sake of solar panels.
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\13\ https://www.fsa.usda.gov/programs-and-services/economic-and-
policy-analysis/afida/agricultural-foreign-investment-disclosure-act-
afida/index.
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All in all, I believe there needs to be more oversight on foreign
investment in U.S. agricultural land and that USDA needs to be more
detailed in both their data collection and communication skills with
other agencies. That being said, I respectfully request responses to
the following questions:
Has USDA reviewed the GAO's report recommendations and what actions
will the Department take to address these issues? Do you have an
anticipated timeline for their implementation?
Answer. GAO made six recommendations, including that USDA share
detailed and timely Agricultural Foreign Investment Disclosure Act
(AFIDA) data with CFIUS agencies, improve reliability of AFIDA data,
and assess its ability to adopt an online submission system and public
database. USDA generally agreed with GAO's recommendations and noted
the need for financial assistance.
In the FY 2024, full-year budget, AFIDA received $1 million in
funding. We are appreciative of this funding, but also note that the
total Farm Production and Conservation--Business Center (FPAC-BC) funds
were reduced to provide for AFIDA. Those funds that were reduced
account for staff and expenses for the FPAC-BC as a whole. Further, the
$1 million is insufficient to complete implementation for the build-out
of a modern solution that allows FPAC's efficient management of AFIDA
filings. Without an additional appropriation of funding sufficient for
the development and maintenance of an online filing portal and funding
for IT staffing, it will be difficult to provide more real-time filings
to meet the mandate of Sec. 773 of the Consolidated Appropriations Act,
2023. Part of that mandate involves creating and maintaining an online
filing portal; the other part involves development of a public AFIDA
database. The first step in developing an online filing system involves
ensuring we are collecting the appropriate data. USDA convened an
internal, inter-agency working group in 2023 to develop a new AFIDA
form that is more precise and more accurately captures leaseholds and
impacts of foreign investment as a first step in portal creation. The
proposed form was published in the Federal Register in December 2023
and the comment period closed in February 2024. We are assessing
comments.

Question 2. Additionally, can you speak to the role that USDA
currently plays in being consulted on foreign investment reviews at
CFIUS? Do you think further coordination between USDA and CFIUS is
warranted?
Answer. As a result of discussions between the USDA and the
Treasury, USDA's role in CFIUS has grown. Each week, Treasury sends the
USDA Office of Homeland Security CFIUS Program (OHS/CFIUS) a Case Log
listing new and active CFIUS cases, as well as a Directorate of
National Intelligence (DNI) Summary of each new case the Committee has
started to review that week. Within 5 business days of receipt, USDA
must assess these summaries for agricultural equities. If there are
agricultural interests, USDA notifies Treasury that it would like to
review the full case filing. With respect to such cases, USDA becomes a
full participant in the CFIUS review process, evaluating if there is a
national security risk and, if so, if that risk can be mitigated. This
status is also reflected in CFIUS language in the Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies Fiscal
Year 2024 Appropriations Bill.
Questions Submitted by Hon. Dusty Johnson, a Representative in Congress
from South Dakota
Question 1. Mr. Secretary, I appreciate your comments regarding the
Administration's work on vaccination for highly-pathogenic avian
influenza (HPAI). As you continue working on this important matter, I
would like to bring to your attention a letter I sent along with five
of my colleagues to you regarding the potential for platform vaccine
technology to help quickly develop new vaccinations. Has your
Administration considered the use of platform vaccine technology to
combat the spread of HPAI? Would the use of this technology alter the
timeline for deployment, or future response to other strains of HPAI?
Answer. We are always looking at ways to strengthen animal health
outcomes and platform vaccine technology may be an effective tool for
vaccination. While the intent of the platform approach is to
standardize some of the materials and manufacturing to expedite some of
the regulatory requirements, it is still critical to demonstrate the
safety and efficacy of these products. USDA has already licensed
several platform technologies.
Vaccines manufactured using this technology are promising with
regard to the speed with which the product is made available to the
market. It could work similarly for highly-pathogenic avian influenza
but will require some additional studies to demonstrate the
effectiveness in the field as well as in providing efficient delivery
systems that factor in how poultry is produced in this country.

Question 2. As you know, USDA approved the regulatory framework for
platform technologies during your previous tenure as Secretary. Beyond
highly pathogenic avian influenza (HPAI), what opportunities are there
for UDSA to engage more significantly with the private sector to
optimize platform technologies in USDA's work on foreign animal disease
surveillance and prevention? Can you commit to such collaboration and
engagement, so we are utilizing all resources and technologies at our
disposal to help protect all sectors of our livestock industry?
Answer. We are always happy to meet with our stakeholders and learn
more about their innovative ideas. We have previously met with
companies that produce platform technologies to learn more about them
and how they can help protect animal health. One thing we have told
them to consider is the tool Congress gave us in the last farm bill.
The National Animal Disease Preparedness and Response Program could be
a great resource for vaccine developers to partner with states,
universities, or industry on projects that could demonstrate the
importance of this technology or further continue its development.
Vaccine developers are welcome to submit proposals, which we consider
through a competitive program subject to available funding.

Question 3. Mr. Secretary, new export market opportunities exist
all around the globe, and will play a critical part in the years to
come as our export markets shift. In your opinion, where are some areas
of the world that present potential for U.S. agriculture exports?
Answer. Diversifying export market opportunities is important for
maximizing growth for U.S. farmers, ranchers, and foresters, as well as
to hedge the risk of market contraction and general volatility in the
global marketplace. While we remain committed to our established
customer base around the world, we are also setting our sights on new
growth opportunities in places like Africa, Latin America, the Middle
East, and Southeast Asia. Africa especially has untapped market
potential with the 2019 ratification of the African Continental Free
Trade Area and a drive towards more integrated trade on the continent.
By 2050, one in four people on the planet will be on the African
continent. That is huge untapped potential. Likewise, countries in
Latin America, the Middle East, and Southeast Asia who are experiencing
rapid GDP growth, expanding middle classes, urbanizing populations, and
increasingly modern food retail systems are prime markets for
establishing lifelong consumers of U.S. food and agricultural products.
USDA is also investing in a variety of initiatives to boost U.S.
exports to a variety of global markets, with an emphasis on markets
with large and growing middle-class populations. The $1.2 billion USDA
investment to implement the Regional Agricultural Promotion Program
(RAPP) complements other traditional export market development and
promotion programs to enhance exporters' ability to diversify into new
markets and increase market share in growth markets.

Question 4. Mr. Secretary, in the 2022-2023 marketing year, the
U.S. exported 1.25 billion gallons of ethanol. These exports offer
several advantages to foreign customers who are seeking renewable fuel
options. The U.S. has historically exported ethanol into Brazil.
However, Brazil applied a 16% tariff on ethanol imports in 2022 that
then rose to 18% last month--essentially closing off market access for
the U.S. How is USDA prioritizing market access opportunities for
ethanol and working to address Brazil's trade action?
Answer. USDA continues to support U.S. ethanol market access
opportunities through engagement and programs, such as the Market
Access Program (MAP), Foreign Market Development (FMD) program, and
USDA's new Regional Agricultural Promotion Program (RAPP). USDA
actively engages our foreign counterparts around the world to resolve
both tariff and non-tariff trade barriers, including in coordination
with the U.S. industry to resolve issues they are facing.
For example, in 2023, FAS tirelessly worked to expand U.S. ethanol
market access to Japan in the update to their biofuels policy so U.S.
ethanol can meet 100 percent of the market, an increase from a market
share of roughly 66 percent. Efforts also included obtaining
legislative recognition on land use and biodiversity criteria under
Canada's Clean Fuel Regulation (CFR), maintaining nearly $3 billion of
U.S. ethanol and biodiesel exports by removing potential trade barriers
for U.S. participation under the CFR and establishing a new blending
program in Panama which should lead to increased U.S. ethanol exports
and serve as a global example for new biofuels policies. Vietnam and
India also lowered their import tariffs on ethanol which will increase
price competitiveness of U.S. ethanol for increased exports. Additional
efforts, including in coordination within the U.S. government
interagency, continue on these and other markets to support increased
emphasis on U.S. biofuels in a variety of international forums to
provide further weight to our U.S. biofuels requests.
USDA continues to actively engage with Brazil, in coordination with
the Office of the U.S. Trade Representative, to address the restrictive
tariff imposed on U.S. ethanol. This engagement has included
government-to-government dialogues and meetings. USDA has also actively
engaged with Brazilian regulators on their low carbon fuel policy,
RenovaBio, seeking technical corrections that will allow U.S. ethanol
to be certified under the program. Through these and other engagements,
and despite exports dropping more than 99 percent to Brazil, 2023 was a
record year for U.S. ethanol exports, valued at over $3.8 billion, an
increase of 3 percent from 2022. Volume-wise, U.S. ethanol exports
amounted to over 5.4 billion liters in 2023, a 9 percent increase from
nearly 5 billion liters in 2022.
Questions Submitted by Hon. Tracey Mann, a Representative in Congress
from Kansas
Question 1. Thank you for your comments regarding the importance of
animal disease traceability. As we discussed, I am supportive of USDA's
electronic identification rulemaking as it would enhance our ability to
rapidly trace diseases and outbreaks in cattle and bison covered in
official USDA interstate movement. However, I am concerned that
agricultural producers in Kansas and across the country would be
responsible for the cost. APHIS currently provides free EID tags and
financial assistance for related infrastructure to prepare for
compliance efforts with the regulation. Is USDA open to offsetting
costs to producers through the Animal Health Technical Services account
where voluntary EID tags are currently funded?
Will USDA use other funding resources, such as the National Animal
Disease Preparedness and Response Program, to pay for the rulemaking?
Answer. In response to the concerns that you have heard from
producers, the Committee passed FY 2024 Agriculture Appropriations bill
included $10 million for the purchase of Electronic Identification
(EID) tags and related infrastructure. USDA is hopeful that the final
FY 2024 Appropriations bill will include necessary resources to help
USDA to provide tags to producers free of charge to jump-start efforts
to transition to this new system and help enable the fastest possible
response to animal disease. The science is clear that traceability is
necessary for controlling both fast-moving diseases, like foot-and-
mouth disease, as well as slower-moving diseases, like bovine
tuberculosis and brucellosis. This system will allow us to not only
show our trading partners proof of where animals have been, thus
protecting export markets, but it also helps guarantee rapid response
in the event of an animal disease emergency.

Question 2. With more than $166 billion in Federal funding directed
to broadband in the last 5 years, how will USDA ensure that the money
will not duplicate--and will compliment--existing funding
opportunities?
Answer. USDA meets regularly and on an ad hoc basis with the FCC/
NTIA/Treasury to ensure that Federal dollars are spent in the most
efficient way possible. Additionally, USDA shares information with our
Federal partners regarding the awards made under our programs to enable
other agencies to take those awards into consideration to ensure
projects do not overlap or overbuild existing services already made
available.

Question 3. The private-sector regularly works to support farmers
who voluntarily implement conservation practices or choose to try new
conservation practices. For example, General Mills recently
commissioned a study that found that for every $1 contributed towards
regenerative agriculture in the Cheney Lake Watershed, approximately $5
in additional economic value is generated. How can USDA continue to
leverage the private sector's work and findings in its own work?
Answer. Through its technical and financial assistance programs,
USDA is leveraging work already being done by the private-sector and
incorporating its research and learnings into USDA's ongoing efforts.
The Agricultural Conservation Easement Program provides financial
and technical assistance to help conserve wetlands and sustain their
benefits to terrestrial and aquatic wildlife. We have multiple
initiatives to improve water quality. For example, in California,
through the Bay Delta Initiative, USDA and its local partners are using
snowmelt information from differing geographic locations within the
Bay-Delta Plan to address critical water quantity, water quality, and
habitat restoration needs of the Bay Delta region by implementing
voluntary conservation on private lands.
Questions Submitted by Hon. Randy Feenstra, a Representative in
Congress from Iowa
Question 1. Does USDA have any information on the impact Prop. 12
will have on increasing consolidation in the pork industry?
Answer. No, USDA does not currently have research which examines
how Proposition 12 may impact consolidation within the pork industry.

Question 2. NAHLN funding is vital to safeguarding our nation's
food supply. This funding provides for state of the art testing
capabilities, enhancing biosecurity, and increasing U.S. emergency
preparedness. What started with 12 laboratories has now grown to over
60 through this program. What is USDA doing to ensure this network is
focused on innovative solutions to animal health threats especially
during this time of immense growth?
Answer. NAHLN is the backbone of our surveillance detection network
and is key to our ability to rapidly detect and respond to foreign
animal diseases. The new animal health programs in the previous farm
bill gave APHIS a dedicated stream of funding from the Commodity Credit
Corporation to enhance this critical network. Since the farm bill
program began, we have provided almost $30 million to the network above
the appropriated amount.
Each year we solicit project ideas from these laboratories and fund
the most promising ones. Past projects have standardized the
interoperability of communication between the labs and USDA and
increased the capacity of the network in detecting disease. The yearly
funding stream allows the laboratories to help us identify gaps in our
animal health testing capabilities and innovative and promising
solutions, strengthening the labs themselves and our overall animal
health surveillance abilities.
Additionally, we have funded five NAHLN laboratories to represent
their regions in providing risk assessment and assay development to
address potential pathogens threatening animal agriculture. We have
also set up working groups across laboratories that have enhanced
collaboration across the network. Some examples:

The NAHLN Methods Technical Working Group, made up of
diagnosticians from both NAHLN laboratories and the National
Veterinary Services Laboratories reference laboratories,
evaluates new technologies to support a response to potential
emerging diseases. Methods comparisons help to identify the
best tools for surveillance and response for high-consequence
animal diseases.

The NAHLN Exercises and Drills Working Group engages NAHLN
laboratories, their state government representatives, and
industry partners in preparedness exercises at the local level
while supporting similar activities at the regional and
National level.

Question 3. New export market opportunities exist all around the
globe and will play a critical part in the years to come as our export
markets shift. In your opinion, where are some areas of the world that
present potential for U.S. agriculture exports, particularly corn and
pork?
Answer. The U.S. Department of Agriculture (USDA) remains laser-
focused on expanding trade and market opportunities for U.S. food and
agricultural products and building on significant wins under the Biden-
Harris Administration to break into new markets. Since 2021, we have
actively engaged with trading partners to reduce tariff and non-tariff
barriers for more than $21 billion of U.S. agricultural exports.
USDA is also investing in a variety of initiatives to boost U.S.
exports to a variety of global markets, with an emphasis on markets
with large and growing middle-class populations. The $1.2 billion USDA
investment to implement the Regional Agricultural Promotion Program
complements other traditional export market development and promotion
programs to enhance exporters' ability to diversify into new markets
and increase market share in growth markets.
USDA is committed to supporting export opportunities for U.S. pork
exports. USDA works closely with U.S. industry representatives to
understand and identify key markets with growth and export potential
for U.S. products. Beyond maintaining traditional markets such as
Mexico, Canada, Australia, and China, we see opportunity for export
growth of U.S. pork to countries such as the Dominican Republic,
Central American countries, and hopefully South Africa and Jamaica once
barriers can be removed.

Question 4. Mexico is the number one destination for U.S. corn
exports, and in fact 47.5% of our total corn exports go to our southern
neighbor. As you know, Mexico's biotech ban on certain uses of biotech
corn has already had an impact on U.S. corn exports and it threatens to
upend market access to our most important customer if Mexico's corn
decree is fully implemented. We appreciate the work of USTR and USDA in
launching the dispute settlement process under USMCA. How has USDA been
coordinating with USTR to ensure that the U.S. position is successful,
and that the panelists can vividly see that the science is on our side?
Answer. Addressing this issue through the USMCA dispute resolution
process is a top priority for the U.S. Department of Agriculture and
the Office of the United States Trade Representative (USTR). Under the
USMCA, we and our partners have jointly agreed to maintain science-
based measures. For decades, our system has ensured that commercialized
biotech-improved products are as safe as conventional counterparts--and
it will continue to do so. This USMCA dispute is currently in active
litigation, and USDA is working very closely with USTR to ensure U.S.
corn growers have full and fair access to the Mexican market.

Question 5. What actions has the USDA taken, such as assigning a
director and others, to support AGARDA?
Answer. USDA is uniquely poised to lead development of
transformative technologies, research tools, and products through
advanced research on long-term and high-risk food and agriculture
challenges. The science team across USDA has experience,
infrastructure, and a proven record of innovative accomplishment. As
climate change fuels a hotter, drier future, we must do more to ensure
producers have the tools to continue producing the safest and most
abundant food supply in the world. USDA believes it is critical that we
support high-risk, high-reward agricultural innovation research that
can help to address major challenges in agriculture and forestry
systems at USDA through the AGARDA pilot program. Our vision is to
construct a scalable organization, pending appropriation from Congress
in the coming fiscal years.With current funding, we are in a planning
posture. This has involved engaging with partners and stakeholders,
listening, and planning a pilot project. Once AGARDA is properly
resourced, this program can further advance innovation in agriculture.

Question 6. In 2015 we had a devastating outbreak of HPAI, and here
we are again entering year 3 of an HPAI outbreak unfortunately breaking
new records of HPAI cases. What are the proactive steps USDA is taking
to answer the questions that still remain unanswered about this virus?
Have you put together a plan that addresses all the concerns that are
ultimately needed to eliminate this virus?
Answer. We know a lot about this virus: where it comes from, how it
spreads, and how to address it. While the outbreak has had a
devastating impact on producers throughout the country, the good news
is that we know how to eliminate the virus from commercial facilities
and our efforts work. In March 2022, we had 51 outbreaks in commercial
facilities. In February 2024, we had just seven. We know the virus is
largely transmitted by wild birds. While our epidemiological
investigation does sometimes identify farm-to-farm spread, the most
common source of infection is from wild birds. This is why we have so
heavily stressed biosecurity at these facilities. There are simple
measures producers can take to harden their biosecurity and to
dramatically reduce the risk of infection. In the event a farm does
become infected, we have standardized processes in place to quickly
eradicate the disease and to get affected farms back into production as
quickly as possible.
We know that improvements to biosecurity can be expensive for
producers to make, so we are making sure producers understand the role
the Farm Service Agency (FSA) can play. They have resources that may be
helpful to poultry producers seeking to enhance their biosecurity,
specifically their structural biosecurity (e.g., physical construction
and maintenance of coops, pens, poultry houses, farm areas). FSA offers
direct and guaranteed loans to promote, build, and sustain family
farms. Among many other uses, these loans can assist poultry producers
with implementation of biosecurity measures for their operations.

Question 7. Small and beginning farmers, especially those without
inherited land have started to feel the pressure of increased interest
rates. According to the Kansas City Fed, rates were more than a full
percentage point higher than average rates last year and stayed between
eight and nine percent. That rate hike can see all margin squeezed away
even if they are able to access land. Would tax policy set by Congress
that would reduce interest rates on producers by 1% have a positive
impact on young, beginning and socially disadvantaged farmers?
Answer. The Department is willing to engage in conversations with
the U.S. Department of Treasury, which has the institutional expertise
in tax policy, and your office to better understand your proposals and
its potential impacts.

Question 9. How does USDA, specifically APHIS, work with other
countries animal disease traceability agencies to prevent African Swine
Fever or Foot-and-Mouth Disease from coming into the United States? And
what can Congress or USDA look to improve upon when it comes to
ensuring foreign animal diseases do not enter through our ports?
Answer. APHIS has strong partnerships with our foreign trading
partners and that is an important part of our ability to keep foreign
animal diseases out of this country. These relationships are especially
critical when determining whether and under what conditions imports can
safely occur. We exchange technical information about the animal health
status and veterinary infrastructure in these countries that allow us
to make informed decisions about what to import and what risk
mitigation measures we need to put in place to allow imports to come in
safely. In the case of a disease like foot-and-mouth, this may mean the
responses we get from a trading partner result in an analysis that
determines there is no safe way to import an animal or animal product.
The previous farm bill gave APHIS brand new tools to fight foreign
animal diseases, in particular, the National Animal Disease
Preparedness and Response Program (NADPRP). NADPRP gives APHIS
additional resources to work with its partners to expand the reach of
its animal health programs and to identify and fill in gaps in our
existing preparedness and response capabilities. Under NADPRP, APHIS
provides funds to states, universities, industry organizations, Tribal
partners, and other eligible entities to support projects that help
prevent and prepare for the most serious animal diseases that threaten
U.S. livestock, poultry, and related industries. The program has been a
great success and our state, university, and other partners have
provided hundreds of project suggestions over the years, far exceeding
the level of funding available for these projects. In the last two
NADPRP funding opportunities, APHIS has only been able to fund 57% of
the project proposals submitted by our partners.
Questions Submitted by Hon. Mary E. Miller, a Representative in
Congress from Illinois
Question 1. During your testimony, you said you have had
discussions about agriculture and climate change with John Kerry. What
did you and John Kerry discuss regarding farmers and Climate Change?
Answer. As part of the Biden-Harris Administration's commitment to
combat climate change, the Department is focused on advancing
investment in climate-smart agriculture, food systems, and forest
management.

Question 2. Have you had any discussions about farming and
agriculture with John Podesta? What have you and John Podesta discussed
regarding the agriculture industry?
Answer. See answer to Bost Question 2.
Questions Submitted by Hon. Brad Finstad, a Representative in Congress
from Minnesota
Question 1. As you are aware, EPA has been taking a novel approach
to come into compliance with the endangered species act. They have the
ESA workplan, the Herbicide Strategy, the Vulnerable Species Pilot
Program. We have heard from several grower groups that since none of
these actions are considered rulemakings, EPA has not provided
responses to comments, despite the enormous cost this will mean for
producers. It would seem that these action bypass peer review and the
coordinated interagency review process that should normally happen.
Given that EPA is seemingly cutting out public participation, what
role, if any, is USDA playing?
Answer. USDA, through the Office of Pest Management Policy, is
encouraging EPA to respond in writing to public comments. In addition,
OPMP will be co-hosting a workshop with EPA to help identify additional
mitigation measures that are needed so that all growers are able to
comply with EPA's expectations, as well as identify information and
data available to support those measures.

Question 2. Since EPA is applying the mitigations using the FIFRA
framework, not under the ESA. FIFRA requires EPA to complete cost-
benefit analysis for their actions. Are you aware if EPA is consulting
with your Chief Economist on what these proposed mitigations--like
taking land out of production--will cost growers?
Answer. USDA's OPMP, under the Office of the Chief Economist, has
provided information to EPA proactively on the expected impacts of
EPA's proposals to growers, including the potential for financial and
land use impacts.

Question 3. Mr. Secretary, I know that you are considering the best
way to implement the SUSTAINS Act. A number of Minnesota companies,
including General Mills and others, are very interested in how this law
will be implemented. Organizations like General Mills have been working
on sustainability issues for a long time, including providing multiple
grants to Minnesota organizations to do things like train certified
crop advisors and provide farmer to farmer soil health education.
Without clear information on program implementation, companies are
curious whether their conservation work would be more impactful through
the SUSTAINS Act or if continued efforts outside of the Department
would be more impactful. Their insights could be very valuable to USDA
as you continue to navigate this space.
Can you please provide an update on what the plan is for
implementation of the SUSTAINS Act and how do you intend to engage with
private industry as you make implementation decisions?
Answer. Over the next several months, USDA will engage stakeholders
to seek feedback on the best way to leverage the SUSTAINS Act through
new conservation public-private partnerships. We will be holding
listening sessions with a range of stakeholders, including private
industry representatives. The Department wants to understand
stakeholder interest in leveraging conservation funds through SUSTAINS
as we aim to develop a program that maximizes benefits for producers
and conservation outcomes.

Question 4. Mr. Secretary, as you mentioned before the Committee,
the states carry out nutrition programs authorized through the farm
bill. However, as you know, USDA holds final accountability for
ensuring that benefits reach the intended beneficiaries. In 2022,
SNAP's error rate was nearly 12 percent. Meanwhile, approximately \1/
20\ of 1 percent of the annual nutrition budget is spent on program
integrity. It is Congress' expectation that your department works with
states to ensure taxpayer confidence in these programs is upheld rather
than passing the blame.
Mr. Secretary, do you agree that USDA should do more to prioritize
investments in integrity measures for USDA's nutrition programs?
Answer. USDA is deeply committed to ensuring program integrity and
good stewardship of taxpayer dollars. We have taken aggressive action
to modernize and strengthen SNAP, including protecting the program from
any threats to its integrity. USDA takes our oversight and monitoring
role of state SNAP performance seriously. Rather than passing the
blame, we work collaboratively with states to support, build, and
maintain high-quality SNAP programs that offer strong customer service
and program integrity.
USDA is also working aggressively to help states accelerate their
progress on reducing payment errors. To be clear, error is not
synonymous with fraud. Rather, the SNAP Payment Error Rate is a measure
of how accurately states determine eligibility and benefit amounts. The
SNAP Quality Control system, which involves both state and Federal case
reviews to assess payment accuracy, is among the most robust quality
control systems across Federal programs. In addition to continuing to
strengthen the SNAP Quality Control System, USDA has doubled down on
our work with state partners to decrease payment errors by tackling the
issues at their root cause-including through ongoing engagement with
states on error analysis and targeting corrective actions.
Beyond USDA's efforts to work with states to improve payment
accuracy, USDA has proposed additional investments in Federal oversight
of retailers to ensure program integrity. We agree that additional
investments would enhance USDA's efforts to prevent and combat SNAP
fraud and more robustly support state actions to ensure program
integrity. In fact, USDA's FY 2024 budget requested much-needed funding
to do just that, including: a ``strike force'' of retailer
investigators for improved oversight of the more than 260,000 retailers
authorized to redeem SNAP benefits and other activities that promote
retailer integrity efforts; State-of-the-Art Systems for SNAP Retailer
Management; enhanced system security and data encryption capabilities
to address evolving cyber-security threats; and other modernization and
benefit theft fraud prevention efforts.
Unfortunately, Congress did not fully fund these requests--despite
the fact that the required funds would not have counted towards the
discretionary caps. Instead, the specific SNAP line-item that would
have funded these efforts only received a minimal increase,
insufficient to meet our program integrity needs and thereby hampering
our ability to tackle fraud head-on. We have requested these proposals
again for FY 2025 to support USDA's fight against SNAP fraud in any
form and welcome your support. These investments would strengthen
crucial pieces of our robust fraud prevention efforts and help USDA
fulfill our deep commitment to program integrity and good stewardship
of taxpayer dollars--a goal we all share.

Question 4a. What steps has USDA taken, including investments in
asset verification systems, to ensure bad actors are prevented from
defrauding the American taxpayer and stealing benefits from the
intended individuals in need?
Answer. USDA is committed to combatting SNAP fraud in any form,
including recipient fraud, retailer fraud, and SNAP benefit theft
through card skimming, card cloning, or other fraudulent methods. Those
who defraud SNAP are committing a serious crime that takes advantage of
low-income families. While the vast majority of SNAP benefits are used
as intended--to supplement the food budgets of eligible families in
need--we do not tolerate any fraud in our programs. USDA works closely
with state and Federal partners, law enforcement, SNAP retailers, EBT
processors, and other industry experts to protect SNAP benefits and
combat SNAP fraud. We are continuously innovating to ensure program
integrity--striving to stay ahead of those who would violate program
rules and utilizing the latest anti-fraud technology and techniques.
We work collaboratively with states to support, build, and maintain
high-quality SNAP programs that offer strong customer service and
program integrity. While Medicaid requires states to implement Asset
Verification Systems (AVS) for determining some types of Medicaid
eligibility, SNAP does not have a similar requirement and instead
prioritizes using documentary evidence and other data-matching systems.
SNAP state agencies have some discretion when verifying resources.
However, all states must verify any resource information that appears
to be questionable. State agencies use documentary evidence, such as
bank statements, as the primary source of verification. If documentary
evidence cannot be obtained or if the verification provided is
insufficient, the state may require a collateral contact. There are a
number of challenges associated with AVS that may not make it suitable
for SNAP-specifically, not all financial institutions participate in
AVS, and the results are not available in real-time, which may affect
application timeliness. USDA has instead prioritized targeted fraud
prevention efforts that more effectively promote program integrity, as
follows.
USDA has a robust team of highly-trained data analysts and
investigators dedicated to preventing and prosecuting retailer fraud
and trafficking. In our oversight of more than 260,000 participating
retailers, we constantly strive to deter and root out all types of
fraud in SNAP. USDA monitors all SNAP retailers in a variety of ways
including, for example, via undercover investigations and the
monitoring of transactions for anomalous activity. In FY 2022, USDA
conducted nearly 9,000 investigations, took action against more than
4,000 retailers, and permanently disqualified nearly 1,000 retailers.
USDA also provides significant support to our state partners in
fulfilling their responsibilities to prevent, detect, and eliminate
fraud. For example, USDA developed the SNAP Fraud Framework in 2018, a
toolkit of evidence-based strategies that combines data analytics with
best practices from industry to empower states to detect and prevent
fraud. To date, USDA has provided approximately $18.9 million in SNAP
Fraud Framework Implementation grants to 34 state agencies to support
their fraud prevention, detection, and investigation efforts. For
example, Texas developed an automated fraud data analytics model that
allows investigative staff to identify households that may be engaging
in SNAP fraud, and Colorado received grant funding to develop a
database that contains all transaction information from EBT cards to
inform analytic-driven decision-making. USDA has also undertaken
several other initiatives over the last decade aimed at supporting
states in implementing business process reengineering and improving
client education and data analytics activities to prevent recipient
fraud.
Additionally, FNS is taking aggressive action to combat card
skimming, card cloning, and other methods of stealing SNAP benefits,
which can be devastating for victims who rely on their benefits to feed
their families. USDA and our state partners are working quickly to help
SNAP participants harmed by these crimes, catch the perpetrators
involved, and prevent future theft, so we can ensure that households in
need can use their benefits to put food on the table and taxpayer
dollars are appropriately used. Specifically, USDA is encouraging
states to enhance card security, including by providing technical
assistance to any SNAP state agency interested in adopting chip-enabled
cards, and advancing national standards for higher security SNAP EBT
cards. USDA is also piloting mobile contactless payments in SNAP in
five states, which has the potential to help protect families from
having their SNAP benefits stolen because of card skimming. Notably,
USDA is using innovative new tools to identify fraud through real-time
monitoring of SNAP transactions. For example, USDA is piloting an
application that collects SNAP transaction details in real-time, which
could help us identify and prevent fraud and EBT card skimming earlier.

Question 4b. In FY22, USDA awarded grants to 16 states, including
Minnesota, to evaluate their use of third-party databases to verify
earned income. Can you provide an update on how USDA's deployment of
these pilots has strengthened program integrity, including in relation
to earned income verification?
Answer. In the Consolidated Appropriations Act, 2021, Congress
provided the USDA with funding intended to improve states' ability to
verify household earnings via third-party income databases for SNAP
purposes. Using this funding, USDA issued a total of 21 grants to
states to support these efforts in Fiscal Years 2020 through 2023. As a
condition of these grants, SNAP state agencies provided qualitative and
quantitative information to USDA about their experiences using third-
party income databases (TPIDs) to verify earned income. Through this
effort, USDA gathered information about state processes and procedures
for accessing and using TPID data and the impacts of TPID access on
program administration and access. This project helped USDA support
states in improving wage and salary information verification,
recognizing that this is a long-standing driver of payment errors, as
well as procedurally based denials of SNAP applications and delays in
providing benefits to eligible households. USDA also issued a Request
for Information (RFI) in May 2022 to obtain information to further
inform a national strategy for enabling access to TPID data.
In October 2023, USDA awarded a national contract to Equifax and
Experian to provide third-party employment and earned income
verification data services to SNAP state agencies. This contract, known
as the SNAP Earnings Verification Service (EVS), is an optional,
nationwide resource working to provide participating state agencies
with access to third-party databases to verify applicants' and
participants' employment and earnings. USDA expects that real-time
access to current earned income information will reduce administrative
burden and improve customer service while also improving payment
accuracy. USDA continues to regularly meet with states to answer
questions and offer technical support.
Questions Submitted by Hon. Mark Alford, a Representative in Congress
from Missouri
Question 1. Agricultural biotechnology is a cornerstone of U.S.
agriculture, enabling us to produce food and agricultural products with
less land, less water, and reduced emissions. Unfortunately, APHIS's
current system of permitting for the interstate, lab-to-lab movement
for certain engineered microorganisms is burdensome and creates
significant delays. This stifles innovation. Do you commit to work with
Congress on a more streamlined, risk-proportionate approach to allow
for intra-organizational movement of certain engineered microorganisms
across state lines?
Answer. We recognize the importance of microbe research to
industry, academia, and American agriculture. In recent years, APHIS
has made great strides in modernizing the biotechnology regulatory
process. The agency continues to commit significant resources to this
effort while ensuring safety and accountability under the Plant
Protection Act.
More recently, APHIS has engaged with industry and academia to
better understand the challenges they face and additional regulatory
flexibilities they seek related to working with modified microbes.
Based on this feedback, in October 2023, APHIS updated its permit guide
\14\ *** to allow unlimited interstate movement-for up to three years-
of specific microorganisms to all facilities listed on the permit that
have demonstrated the capacity to safely contain these microbes. APHIS
also enabled applicants to include multiple species of microorganisms
in one permit application to reduce administrative burden. In addition,
in March, APHIS began allowing a new permit flexibility that allows
developers to include multiple destination locations in biotechnology
import permits.
---------------------------------------------------------------------------
\14\ https://www.aphis.usda.gov/biotechnology/downloads/draft-brs-
microbe-permit-guide.pdf.
*** Editor's note: the hyperlink results in an Page Not Found
error. The link for the updated Guide for Submitting Permit
Applications for Microorganisms Developed Using Genetic Engineering
Under 7 CFR Part 340 on APHIS's site is: https://www.aphis.usda.gov/
sites/default/files/brs-microbe-permit-guide-revised-draft.pdf.
---------------------------------------------------------------------------
In the near future, APHIS looks forward to seeking input from
stakeholders regarding pathways to commercialize modified microbes by
publishing a request for information in the Federal Register or hosting
listening sessions. With this effort, we are focused on eliciting new
ideas and approaches to better serve companies working with these
products.

Question 2. Biobased products play an important role in our
national security, reliability of our supply chains, and markets for
agricultural producers. I introduced the Biomanufacturing and Jobs Act
alongside my colleague Rep. Angie Craig to improve USDA's BioPreferred
Program and further encourage the purchase and use of biobased
products. Developing biobased products and processes will also support
the U.S. in competing against countries with more established
bioeconomies.
Can you share your perspective on USDA's role in educating agencies
on proper procurement, and how USDA's work on biobased products impacts
our economic and national security while fostering a competitive
agriculture bioeconomy in the U.S. and globally?
Answer. The growing bioeconomy has the potential to create
unprecedented growth in the rural economy and create a higher level of
self-sufficiency for farming and rural communities. USDA programs
support development of a more robust rural economy and assist rural
businesses and cooperatives expand, gain increased access to capital,
leverage existing market opportunities, and facilitate competitive
markets. The BioPreferred' Program supports and encourages
the purchase of biobased products and has the ability to spur economic
development, increase jobs, and provide new markets for farm
commodities. The program provides biobased product manufacturers with
market opportunities for their biobased products and increases the
purchase and use of biobased products in the Federal Government. In
addition to economic impacts, substituting renewable agricultural
feedstock for petroleum-based products can help us reduce our
dependence on petroleum as well as increase the potential to reduce
greenhouse gas emissions.
USDA looks to continue to build the program and ensure its long-
term success and will remain committed to providing leadership,
direction, integration, and coordination of the biobased program for
USDA and the Federal Government. We will maintain ongoing efforts to
develop new training programs for Federal Procurement Officers and
improve reporting and tracking of biobased product purchases. The
program intends to expand outreach efforts to make sure we are
communicating with manufacturers and vendors and disseminating
information to other agencies who work with manufacturers and vendors.
We also believe a key to the development and successful implementation
of an affirmative biobased procurement program is through promotion,
education, and technical assistance.

Question 3. The American bioeconomy provides vital opportunities
for growers in my district and across the country, while also powering
important investments across the nation in manufacturing. Can you share
how the USDA BioPreferred program is working to help these important
growers and manufacturers capture a premium in the market?
Answer. With the goal of increasing the development, purchase, and
use of biobased products, USDA's BioPreferred' Program
strives to be the Federal Government's official advocate and market
accelerator for biobased products. The Program's primary goals are to
spur economic development; create new markets for farm commodities;
increase the development, purchase, and use of biobased products;
create new jobs; support people in rural communities; promote
innovation; and contribute to a growing and thriving bioeconomy. The
Program requires Federal agencies and contractors to give purchasing
preference to biobased products. The USDA BioPreferred Program also
includes a certification and labeling initiative for biobased products
to be labeled with the USDA Certified Biobased Product Label. More than
2,400 companies spanning all fifty states participate in the Program.
From farm and field all the way through the manufacturing process, the
expanding market for biobased products creates jobs and helps support
economic growth in rural America.
The USDA Certified Biobased Product Label helps to create and
expand markets for biobased products by making them stand out to
consumers, particularly for those consumers with a desire to purchase
products that positively impact climate change and promote healthier
indoor and outdoor environments. The label and other promotions by USDA
help to establish new markets for biobased products and increase market
share for these products, helping farmers, manufacturers, and
investors.

Question 3a. How many products are currently certified and in the
pipeline?
Answer. There are currently 8,400 USDA Certified Biobased Products
with about 250 applications in the screening and testing stages.
Products take about 60 days to go through the BioPreferred Program's
screening, undergo testing, and obtain certification. On average, the
BioPreferred Program receives approximately 115 new applications each
month.

Question 3b. How have those products been treated in the Federal
procurement space?
Answer. Products in the BioPreferred' Program support
the strategic goal of creating a market for biobased products through
mandatory government-wide purchasing requirements. The Program's
central registry and online catalog now includes 139 product categories
representing over 8,900 biobased products and allows Federal
contracting and procurement officials to locate and compare products
that meet the mandatory procurement requirements.
Federal Service and Construction contractors are required to report
their biobased product purchases annually. In FY 2023, these
contractors reported purchases of biobased products from 130 distinct
categories with a total reported spend of $64 million. Executive Order
14081, Advancing Biotechnology and Biomanufacturing Innovation for a
Sustainable, Safe, and Secure Bioeconomy, requires additional Federal
agency reporting to the Office of Management and Budget, The
BioPreferred Program looks forward to agency purchasing results from
other procurement vehicles.

Question 3c. How many USDA BioPreferred products are included in
Federal procurement catalogues--not just at USDA but across the
government?
Answer. Currently, there are approximately 8,285 USDA Certified
Biobased Products and 8,900 biobased products that qualify for Federal
purchasing listed in the USDA BioPreferred Program's online catalog.
Both GSA Advantage! and DoD FedMall offer biobased products in
their environmental aisles. The BioPreferred Program strongly
encourages Program participants to obtain a GSA schedule contract to
take advantage of these markets for their products. Through our website
and newsletters, we also encourage Federal buyers to make purchases
through these resources.

Question 4. The University of Missouri's Agricultural Experiment
Station performs cutting-edge research over 14,000 acres, and houses
the Bradford Research Farm, one of the largest concentrations of
research plots for crops and soils in Missouri. To ensure that
agricultural innovation developed at our universities support our
farmers, on-farm trials are essential. Secretary Vilsack, how can NRCS
programs like the Conservation Innovation Grants under EQIP better
support the use of innovative research that will increase yields and
efficiencies, while also reducing emissions?
Answer. The Conservation Innovation Grants (CIG) program stimulates
the development, adoption, and evaluation of innovative conservation
approaches. The CIG program, both Classic and On-Farm Conservation
Innovation Trials (OFCIT) has a history of projects led by
universities. OFCIT in particular includes farmer field trials and
incentive payments to encourage the adoption of innovative conservation
approaches like the ones described above. In FY 2023 we removed the
match requirement for OFCIT to make it easier for entities to
participate in the CIG program.

Question 5. Mr. Secretary, as you know, the U.S. has long enjoyed a
trade surplus in agricultural goods. However, in recent years we have
been losing that advantage. Recent USDA projections have forecasted a
record trade deficit of $30.5 billion for the fiscal year 2024.
Enforcing existing trade agreements is crucial to supporting market
access for our ag producers.
On that front, I know your department has been working to reopen
markets to U.S. poultry products in both China and Columbia. For China,
trade has been blocked from a large number of states due to stated
concerns about HPAI (Highly Pathogenic Avian Influenza) despite the
fact that there are existing bilateral agreements governing the Hi-Path
protocols with which the U.S. is compliant. For Columbia, we understand
that Columbia has stopped issuing import permits for all poultry
products but have not provided official notification of market closure.
Could you briefly give us an update on your department's efforts
and progress towards reopening these markets?
Answer. USDA has been working diligently to facilitate exports
globally and continues to press forward to remove as many barriers to
trade as possible. With regards to Colombia, you are correct that in
August 2023, Colombia did restrict the import of poultry, egg, and
genetic products due to HPAI concerns. This was viewed as a deviation
from the 2012 regionalization agreement under the U.S.-Colombian Trade
Promotion Agreement. In February of 2024, agreements were reached by
both the Colombian and U.S. Governments, completely reopening the 10th
largest market globally for poultry, estimated in value at over $100
million annually.
In October and November 2023, the People's Republic of China (PRC)
updated registration lists for the first time since 2022, including new
facilities which are preparing to ship ``cooked paws''. There are still
31 U.S. states that are under HPAI-related restrictions. However, as of
March 2024, the PRC has not removed state-level HPAI import suspensions
on multiple states that already meet the criteria for HPAI freedom
under the 2020 bilateral protocol. The PRC remains the second leading
market for U.S. poultry exports, despite serious challenges related to
HPAI-based restrictions. In 2022, U.S. poultry export sales totaled
nearly $1.1 billion, making PRC the second largest foreign market for
U.S. poultry and poultry products, following Mexico. To date, APHIS-
Beijing has now submitted HPAI release letters and supporting documents
for 27 U.S. states that are eligible to export according to the terms
of the protocol.
Questions Submitted by Hon. Derrick Van Orden, a Represntative in
Congress from Wisconsin
Question 1. Dairy Business Innovation Initiative: Secretary
Vilsack, dairy is an economic engine for the upper Midwest and provides
bountiful nutrition for millions of Americans. I'm so glad the U.S.
House passed the Whole Milk for Healthy Kids Act in December--we need
more milk options for schools and children, less chalk water more real
milk. I am really interested in solving problems and leveraging private
industry to make investments in dairy. One of the efforts USDA offers
is the Dairy Business Innovation Initiative. These initiatives convene
farmers, industry partners, and academia to tackle production,
processing, and marketing needs of the dairy industry specific to each
initiative's coverage area. Focused on enhancing the capacity and
vitality of the dairy industry, the program offers grants to industry
participants.
I'd like to know how strong is the demand for the DBI's. Can you
tell me how many project are funded, how many applications are
received, how much funding is requested by companies and farmers
applying, and how are we measuring the effectiveness of each DBI?
I hear good things about the one in Wisconsin, so I'm interested
these public-private investments that grow dairy innovation and trade.
Answer. The Dairy Business Innovation (DBI) Initiatives support
dairy businesses in the development, production, marketing, and
distribution of dairy products. DBI Initiatives provide direct
technical assistance and subawards to dairy businesses, including niche
dairy products, such as specialty cheese, or dairy products derived
from the milk of a dairy animal, including cow, sheep, and goat milk.
In 2023, AMS awarded $23 million in awards to support dairy
businesses and producers under the DBI program. The funds were awarded
to the four current DBI Initiatives according to the formula mandated
in the appropriation: $1.8 million was awarded to the California State
University Fresno and $7 million each was awarded to the University of
Tennessee, Vermont Agency of Agriculture, Food & Markets, and the
University of Wisconsin. The DBI Initiatives provide technical
assistance to dairy businesses and use at least 50% of the award
funding for subawards to dairy businesses. The DBI Initiatives'
approach of providing both technical assistance and subawards to dairy
businesses serves as a unique and effective model by facilitating the
development of critical relationships with local dairy producers and
processors to support their on-the-ground needs.
Since 2019, which was the DBI Initiatives' first year of funding,
the initiatives have funded over 600 subaward projects from over 1,800
applications received, representing over $64 million in funding to
support the growth of dairy businesses in the 40 states the DBIs serve.
Each initiative designs its subaward program to meet the needs
identified in the region. More information is available in the Dairy
Business Initiatives Report to Congress here: https://www.ams.usda.gov/
sites/default/files/media/DBIReporttoCongress.pdf.
AMS works with the initiatives to gather information on the impact
of the technical assistance the initiatives are providing as well as
subaward data, including accomplishments, impacts, and success stories.
Recently, AMS conducted listening sessions with the initiatives to
standardize the collection of data that aligns with what the
initiatives are collecting from their subaward recipients. This data
standardization helps AMS to better understand and quantify program
impacts. These initiatives are helping diversify the dairy product
markets and promoting marketing and innovation benefiting work for
producers in 40 states.

Question 2. Organic FMMO: I've heard from organic dairy farmers and
organic milk buyers that the Federal Milk Marketing Orders offer no
benefit or value for organic milk and have no bearing on day-to-day
organic milk prices. The most recent FMMO hearings that concluded this
past month did not review a proposal to exempt organic milk from
pooling obligations, leaving hundred of organic farmers frustrated and
disappointed. Is USDA willing to hear a proposal and establish a
hearing on the role of organic milk in the Federal Milk Marketing
Orders?
Answer. The Federal Milk Marketing Order (FMMO) program regulates
organic and conventional milk identically because the Agricultural
Marketing Agreement Act of 1937, as amended, classifies milk based on
form and use, not on farm production method. FMMOs require conventional
and organic milk processors to pay the same classified price for milk
based on its end use-fluid milk, soft products, or storable products.
A proposal was submitted to treat organic milk differently within
the FMMOs during the request for proposals in June 2023, in
anticipation of the August 2023 hearing. Because the hearing was
related to pricing formulas, the organic milk proposal was excluded
from the hearing notice, a decision the Administrative Law Judge
presiding over the hearing upheld.
At any time, interested persons can submit a proposal to amend the
FMMOs in accordance with the regulations at 7 CFR 900.3. All proposals
should fully address the submission requirements outlined in 7 CFR
900.22. Once a proposal has been submitted, USDA will consider the
proposal and determine whether a hearing should be held.

Question 3. U.S. corn growers are not unique among other U.S.
agriculture commodities in facing challenges with expanding access in
export markets. For example, corn exports to our key customers have
dropped in recent years, and Brazil has claimed market share. As you
are well aware, once market share has been lost, it is fairly difficult
to get back. Obviously, I am acutely aware of USTR's primary role in
negotiating trade agreements or other trade initiatives. However, can
you share how USDA is working with USTR to underscore the need for a
proactive approach so that our competitors do not continue to gain
market share and capture opportunities that would have otherwise been
ours? Additionally, how is USDA working to resolve SPS and technical
barriers?
Answer. Last year, USDA worked with USTR, foreign governments,
international organizations, and our private sector partners to reduce
and eliminate trade barriers for U.S. exports, preserving more than
$6.4 billion in overall U.S. agricultural exports. USDA continues to
actively work together with USTR to preserve market share. USDA
continues to raise specific trade concerns for sanitary and
phytosanitary (SPS) and technical barriers to trade during annual
committee meetings, as well as through official USG comments to the
WTO.
In addition, USDA provides trade capacity building to current and
emerging trading partners to promote international trade and open
markets for U.S. agricultural exports--creating predictable and
transparent trade environments favorable to U.S. agricultural exports.
USDA oversees projects that help U.S. trading partners understand and
implement science-based international SPS standards and practices, as
well as managing projects that address technical barriers to trade and
trade facilitation. USDA collaborates with domestic and international
experts to help build the institutional regulatory capacity of our
trading partners to expand and ensure predictable market access for
U.S. exporters.

Question 4. New export market opportunities exist all around the
globe, and will play a critical part in the years to come as our export
markets shift. In your opinion, where are some areas of the world that
present potential for U.S. agriculture exports, particularly corn?
Answer. The U.S. Department of Agriculture (USDA) remains laser-
focused on expanding trade and market opportunities for U.S. food and
agricultural products and building on significant wins under the Biden-
Harris Administration to break into new markets. Since 2021, we have
actively engaged with trading partners to reduce tariff and non-tariff
barriers for more than $21 billion of U.S. agricultural exports.
USDA is also investing in a variety of initiatives to boost U.S.
exports to a variety of global markets, with an emphasis on markets
with large and growing middle-class populations. The $1.2 billion USDA
investment to implement the Regional Agricultural Promotion Program
(RAPP) complements other traditional export market development and
promotion programs to enhance exporters' ability to diversify into new
markets and increase market share in growth markets.
When it comes to U.S. pork and pork exports, USDA works closely
with U.S. industry representatives to understand and identify key
markets with growth and export potential for U.S. products. Beyond
maintaining traditional markets such as Mexico, Canada, Australia, and
China, we see opportunity for export growth of U.S. pork to countries
such as the Dominican Republic and Central American countries and
hopefully South Africa and Jamaica once barriers can be removed.
Similarly, in addition to the goal to maintain market share in our
traditional beef markets of South Korea, Japan, Mexico, Canada, and
now, China, we also see opportunity for U.S. beef in markets such as
Indonesia, Vietnam, and the Philippines, which have burgeoning
populations and high middle-class growth. We also think Africa presents
opportunities for U.S. beef.
With respect to corn and soybean exports, USDA is actively working
to maintain markets for corn in countries such as Mexico, Japan, and
China. Soybean exports are also being maintained in China, the EU, and
Mexico. With USDA's new RAPP specifically targeting Africa, we view
this as an opportunity to build momentum for U.S. beef, corn, and
soybean exports to the region.

Question 5. Mexico is the number one destination for U.S. corn
exports, and in fact 47.5% of our total corn exports go to our southern
neighbor. As you know, Mexico's biotech ban on certain uses of biotech
corn has already had an impact on U.S. corn exports and it threatens to
upend market access to our most important customer if Mexico's corn
decree is fully implemented. We appreciate the work of USTR and USDA in
launching the dispute settlement process under USMCA. How has USDA been
coordinating with USTR to ensure that the U.S. position is successful,
and that the panelists can vividly see that the science is on our side?
Answer. Addressing this issue through the USMCA dispute resolution
process is a top priority for the U.S. Department of Agriculture (USDA)
and the Office of the United States Trade Representative (USTR). Under
the USMCA, we and our partners have jointly agreed to maintain science-
based regulations to protect human, animal, and plant life and health.
For decades, our system has ensured that commercialized biotech-
improved products are as safe as conventional counterparts--and it will
continue to do so. This USMCA dispute is currently in active
litigation, and USDA is working very closely with USTR to ensure U.S.
corn growers have full and fair access to the Mexican market.

Question 6. In the 2022/2023 marketing year, the U.S. exported 1.25
billion gallons of ethanol, equivalent to 423 million bushels of corn.
Ethanol imports offer several advantages to foreign customers who are
seeking fuel options that are less carbon intensive. The U.S. has
historically exported ethanol into Brazil. However, Brazil applied a 16
percent tariff on ethanol imports in 2022 that rose to 18 percent last
month, which has essentially closed off market access for the U.S. How
is USDA prioritizing market access opportunities for ethanol and
working to address Brazil's trade action?
Answer. USDA continues to support U.S. ethanol market access
opportunities through engagement and programs, such as the Market
Access Program (MAP), Foreign Market Development (FMD), and USDA's new
Regional Agricultural Promotion Program (RAPP). USDA actively engages
our foreign counterparts around the world to resolve both tariff and
non-tariff trade barriers, including in coordination with the U.S.
industry to resolve issues they are facing.
For example, in 2023, FAS tirelessly worked to expand U.S. ethanol
market access to Japan in the update to their biofuels policy so U.S.
ethanol can meet 100 percent of the market, an increase from a market
share of roughly 66 percent. Efforts also included obtaining
legislative recognition on land use and biodiversity criteria under
Canada's Clean Fuel Regulation (CFR), maintaining nearly $3 billion of
U.S. ethanol and biodiesel exports by removing potential trade barriers
for U.S. participation under the CFR. Establishment of a new blending
program in Panama, should lead to increased U.S. ethanol exports and
serve as a global example for new biofuels policies. Vietnam and India
also lowered their import tariffs on ethanol which will increase price
competitiveness of U.S. ethanol for increased exports. Additional
efforts, including in coordination within the U.S. government
interagency, continue in these and other markets to support increased
emphasis on U.S. biofuels in a variety of international forums to
provide further weight to our U.S. biofuels requests.
USDA continues to actively engage with Brazil, in coordination with
the Office of the U.S. Trade Representative, to address the restrictive
tariff imposed on U.S. ethanol. This engagement has included
government-to-government dialogues and meetings. USDA has also actively
engaged with Brazilian regulators on their low carbon fuel policy,
RenovaBio, seeking technical corrections that will allow U.S. ethanol
to be certified under the program. Through these and other engagements,
and despite exports dropping more than 99 percent to Brazil, 2023 was a
record year for U.S. ethanol exports, valued at over $3.8 billion, an
increase of 3 percent from 2022. Volume-wise, U.S. ethanol exports
amounted to over 5.4 billion liters in 2023, a 9 percent increase from
nearly 5 billion liters in 2022.
Questions Submitted by Hon. Lori Chavez-DeRemer, a Representative in
Congress from Oregon
Question 1. The U.S. is facing skyrocketing labor costs due to the
Adverse Effect Wage Rate and Prevailing Wage calculations, and some
Oregon farmers are struggling to keep up. Many of the producers in the
Pacific Northwest farm specialty crops, which can be very labor
intensive. Many of these producers have utilized the H-2A program for
the last several years. However, I have heard from producers that as
the rates continue to raise year over year, it no longer makes
financial sense to participate in H-2A and feel backed into a corner.
As you know, the Department of Labor sets the adverse effect wage rates
and implemented the March 2023 Final Rule for its new adjustments.
While I acknowledge that the Farm Workforce Modernization act could
help address many of our ag labor challenges, we are still at the
deference of Federal agencies when they make new rules. Mr. Secretary,
should USDA be consulted or at all involved in future DOL rulemaking
regarding H-2A or the ag workforce, given the innate understanding of
agriculture practices?
Answer. USDA understands the need for a strong labor pool for
farmers. That's why USDA announced the Farm Labor Stabilization and
Protection Pilot Program, investing up to $65 million in American
Rescue Plan funding to support and safeguard the food supply chain.
With regard to rulemaking, USDA has been engaged on DOL and DHS H-
2A rulemakings and will continue to be so engaged in the future.

Question 2. Secretary Vilsack, as you know drought continues to be
a major challenge for irrigation districts and other water users across
Oregon. Central Oregon has been the epicenter of prolonged drought in
recent years and would have been more impacted without the investments
made in irrigation modernization through the P.L. 83-566 program. I
especially appreciate the time and resources NRCS has dedicated to
improving water management in the Deschutes Basin but want to stress
that the urgency to implement additional conservation projects is
higher than ever with the Habitat Conservation Plan (HCP) mandated
winter releases for the Oregon Spotted Frog getting ready to triple in
5 years. Unfortunately, shifting and sometimes layered processes and
requirements, along with staff turnover and increasing demand on the
program, has resulted in delays in completion of some watershed plans
and implementation of others. Can you commit to working with me to
improve the transparency as changes are being made to the P.L. 83-566
program and informing my office when significant changes to the process
or requirements are made that will affect the timing of approvals of
plans or funding?
Answer. Yes, USDA is committed to working with you to improve the
transparency as changes are being made to the P.L. 83-566 program,
otherwise known to many as the Watershed Protection and Flood
Prevention Operations Program (WFPO), and informing you when
significant changes to the process are made. I will also note that with
Oregon and other state's tremendous successes with P.L. 83-566/WFPO and
the investments made in the Bipartisan Infrastructure Law, we have seen
a tremendous growth in interest and demand across the country for this
locally led program to protect and restore watersheds.

Question 2a. Additionally, can you provide an overview of the
factors and process involved with deciding whether to outsource
environmental or watershed planning analysis and documentation rather
than handling it inhouse?
Answer. Internal and external factors influence document
preparation decision-making. Internal factors include organizational
structure, goals, and funding. External factors include community and
partner capacity, engagement, and a project sponsor's desire as part of
a collaborative effort to improve natural resources within their county
which is a key component to the locally-led planning process.
As part of locally-led planning efforts, specifically P.L. 83-566
Watershed Planning, NRCS utilizes partnerships with individuals,
organizations, communities, and agencies to leverage resources. NRCS
evaluates its ability to implement multiple programs by assessing
staffing capacity, which includes different types of personnel. The
agency draws on in-state personnel, regional and shared resource staff,
and also leverages contracting and partnership agreements where
possible to support watershed planning efforts.
Questions Submitted by Hon. David Scott, a Representative in Congress
from Georgia
Question 1. Housing has become increasingly unaffordable for lower-
and middle-income families, especially for socially disadvantaged
groups. USDA's Single Family Housing Guaranteed Loan Program was
designed to help those families own a safe, decent primary residence in
rural America. Unfortunately, too many families are not able to take
advantage of this program.
USDA may have some administrative flexibility to make the Single
Family Housing Guaranteed Loan Program more accessible. USDA's handbook
lists four compensating factors that can be considered when looking at
a loan application. HUD, however, allows a lender to consider many more
compensating factors.
Will USDA allow lenders to consider factors similar to HUD and how
quickly can USDA make this adjustment to the handbook?
Answer. Yes, USDA is in the process of adding two more compensating
factors to the Single Family Housing Guaranteed Loan Program Handbook,
also known as the 3555 Handbook. The two compensating factors are like
some of HUDs, and once added, lenders will be able to consider them
when underwriting USDA-guaranteed loans. The review/clearance process
for making changes to the 3555 Handbook takes approximately 3 to 9
months. We expect the new compensating factors, and a significant
increase in the front-end ratio (aka PITI ratio), to become effective
by August 2024.

Question 2. The income cap of 115% has not kept up with rising
housing prices. In August 2023, USDA implemented a new income limit
table for Puerto Rico. New income eligibility limits will allow a one-
to-four-person household with an income of $39,550 or a five-to-eight-
person household with an income $52,200 to apply to our programs across
all rural areas in Puerto Rico. Does USDA have the authority to
implement new income limits for all states to allow more people to
qualify for rural home loans?
Answer. USDA is restricted to the ``respective levels'' established
by HUD, 42 USC 1437a(b)(2)(D), which requires consultation between the
two agencies when establishing the income ceilings for the Direct
Single-Family Housing (SFH) programs. Each year HUD releases its 1-8
person household income limits. These income limits are provided to
Rural Development (the Agency) for its single and multi-family housing
programs. The Agency then uses the HUD income limits to establish the
two-tier structure for all SFH programs. Since implementation of the
two-tiered structure in 2019, access to the Direct SFH programs has
expanded in most areas, and is well received by our customers,
partners, and program staff. However, that was not the case for Puerto
Rico.
In Puerto Rico, households with income levels just above the
poverty line continued to be ineligible for Section 502 Direct SFH
assistance because they exceeded the low-income limit, even with the
two-tier structure that was established in 2019.
For example, prior to the August 2023 change, a four-person
household with two full-time wage earners at the prevailing minimum
wage ($8.50 per hour) earning $35,360 per year exceeded the highest 1-4
person low-income limit (San Juan at $28,000), by over $7,000.
Therefore, the Agency consulted with HUD and recommended a
different approach for determining the Puerto Rico income limits to
remove this inequity. The resulting formula is as follows:

1-4 Person Household Low-Income Limit

The greater of:

HUD's banded incomes for the 1-4 person limit; or

Annual household income for two full-time wage earners
at the prevailing
minimum wage.

5-8 Person Household Low-Income Limit

The greater of:

HUD's banded incomes for the 1-4 person limit; or

Annual household income for two full-time wage earners
at the prevailing
minimum wage, plus 32%.

Implementation of this approach resulted in significant increases
for all municipalities in Puerto Rico. It is important to note that
while this change provides significant increases for Puerto Rico, it is
still approximately $10,000 less than the lowest income limits for any
of the Contiguous U.S. States, Alaska, and Hawaii.

Question 3. Mr. Secretary, you have been very public in suggesting
that perhaps you could use the CCC (Commodity Credit Corporation) as a
means to address the growing demand from commodity groups for
strengthening the farm safety net through an increase in references
prices, perhaps in a similar way as you used CCC fund to create RAPP
(Regional Agricultural Promotion Program) as a compliment to the MAP
(Market Access Program) and FMD (Foreign Market Development) programs.
Have you confirmed with USDA's Office of General Counsel that the
CCC Charter Act provides you will sufficient authority to achieve this
goal?
Answer. At USDA we are willing to work with Congress to find ways
to utilize the resources of the Commodity Credit Corporation to address
concerns Congress has relative to reference prices. As I have said all
along in order for there to a farm bill, it is necessary for Members of
the Committee to come together in a bipartisan manner and to be
creative when it comes to how they can use the resources within the CCC
at their instruction and direction to be able to provide the relief and
assistance they're looking for to bolster our safety net.
The Regional Agricultural Promotion Program (RAPP) and the recent
assistance on international food aid programs are a demonstration of
this willingness and a way to address challenges related to trade and
food insecurity impacting U.S. farmers and the international community.
I have not indicated that the Commodity Credit Corporation Charter Act
could or would be utilized to increase statutory reference prices,
rather that USDA is available to look at potential programs and review
the CCC authority. One item of clarity, RAPP is completely separate
from preexisting farm bill programs.

Question 3a. Are you envisioning creating something that would
operate completely separate from the PLC (Price Loss Coverage) and ARC
(Agriculture Risk Coverage) programs or something that would work in
tandem with these programs.
Answer. I would like to be clear that I am offering USDA to work
with the Agriculture Committees to find ways that the CCC could be
utilized to address concerns that Congress may have with the safety
net. Then we can work with General Counsel to understand if the
authorities can support Congress' needs and solutions.

Question 3b. Currently, only farmers with base acres can
participate in the PLC (Price Loss Coverage) and ARC (Agriculture Risk
Coverage) programs. If you want to use the CCC to help supplement these
programs, would you tie your assistance to base acres? Do you believe
it is fair to use CCC funds for a program that only provides assistance
to growers of a commodity depending whether or not they have base
acres?
Answer. I would like to be clear that I am offering USDA to work
with the Agriculture Committees to find ways that the CCC could be
utilized to address concerns that Congress may have with the farm bill.

Question 4. Last October, the Administration put forth its
supplement appropriations request which included $2.8 billion in
disaster aid for farmers and livestock producers affected by natural
disasters in 2023. That was more than 3 months ago. Does the
Administration still stand by that number; is that sufficient to meet
the need out in farm country?
Answer. The updated cost of operating an ERP-type program for 2023
is $11.15 to $12.28 billion. The new projected ERP gross payments are
based on RMA's estimated Track 1A outlays which are then extrapolated
to Track 1B/NAP and Track 2. This updated amount includes $2.17 billion
to refund all eligible producer premiums and fees.

Question 5. The last time the Risk Management Agency (RMA) provided
for an inflation adjustment to the Administrative and Operating (A&O)
reimbursement cap since 2015. The Consolidated Appropriations Act of
2023 Joint Explanatory Statement included language encouraging RMA to
provide for an inflation adjustment for A&O reimbursements to account
for fluctuations in the cost of servicing crop insurance policies. Has
USDA looked into reinstituting an inflation adjustment to the A&O cap
administratively? If not, what are the impediments to doing so?
Answer. Without specifying in law that the A&O cap should be
adjusted for inflation annually, the A&O reimbursement rates can't be
changed without a renegotiation of the SRA. They are a financial term
of the SRA. The report language from the Consolidated Appropriations
Act of 2023 does not supersede the requirements in section 508(k)(8) of
the Federal Crop Insurance Act (FCIA; 7 U.S.C. 1508(k)(8)). The Federal
Crop Insurance Act requires that any renegotiation be done in a manner
that, to the maximum extent practicable, is budget-neutral with regard
to A&O payments and underwriting gains. Any future renegotiation would
focus on ensuring the program is administered in an equitable manner
while maintaining budget neutrality, as required by law.
Since it is a financial term, the inflation factors for the 2011-
2015 reinsurance years were negotiated and incorporated in the third
SRA draft issued on June 10, 2010, and were further detailed in the
``Future SRA Provisions'' attachment, which can be found on the RMA
website News Archives (usda.gov). RMA did not unilaterally create or
implement these factors as they must be part of a renegotiation under
section 508(k)(8) of the FCIA. Any subsequent communications from RMA
regarding inflation factors were informational in nature and only
reported on the prior negotiated factors for 2012-2015.

Question 6. Given the complementary intramural and extramural
programs of the Agricultural Research Service (ARS) and the National
Institute of Food and Agriculture (NIFA), along with the data collected
and research being done at National Agricultural Statistics Service
(NASS) and the Economic Research Service (ERS), what is the role of the
Office of the Chief Scientist in guiding and developing AgARDA?
Answer. As directed by the 2018 Farm Bill, AGARDA shall be a
component of the Office of the Chief Scientist. Supporting the Chief
Scientist, the Office of the Chief Scientist (OCS) will lead
implementation of AGARDA. OCS will engage with internal and external
stakeholders to search for partners at all levels of the organization
and to inform AGARDA program priorities. OCS will conduct a landscape
scan, analysis, and report of high-risk/high-reward USG R&D
organizations to understand best practices to help develop AGARDA
program infrastructure.

Question 7. Has AgARDA received sufficient funding to commence a
pilot project in FY 2024 as outlined in the AgARDA Strategic Framework
released by USDA? How will the Office of the Chief Scientist utilize
any additional funding to support cutting edge research through AgARDA?
Answer. With current limited discretionary funding, we remain in a
planning posture until provided additional funds to support this
effort. This has involved engaging with partners and stakeholders,
listening, and planning a pilot project. The AgARDA Strategic Framework
released in 2023 outlines the imperative for a new approach to deliver
disruptive breakthrough discoveries for agriculture and details a
strategic framework for how the program will be executed when
appropriated funding is received at the authorized level plus
contingencies for various other funding levels.
Questions Submitted by Hon. Alma S. Adams, a Representative in Congress
from North Carolina
Question 1. Fully utilizing the historic conservation investments
in the Inflation Reduction Act (IRA) is a priority for me and many of
my colleagues. But those funds are at risk of being misused for
purposes that not only damage the environment, but also harm rural
communities, threaten public health, and disadvantage small farmers. If
IRA funds are used to subsidize biogas and waste storage facilities
that are primarily used by large industrial facilities, that
incentivizes concentration and consolidation in the livestock industry
and makes it more difficult for small farmers to compete in the
marketplace. Moreover, this misuse of funds would perpetuate
environmental injustice by disproportionately impacting communities of
color and low-income communities with pollution, health risks, property
devaluation, and other ill effects. This appears to be out of step with
the environmental and economic purposes of the IRA and the Biden
Administration's vision of investing in underserved communities to grow
the economy from the bottom up.
How does the Natural Resources Conservation Service's decision to
include waste storage facilities (313), roofs and covers for biogas
capture facilities (367), feed management for livestock (592), waste
separation facilities (632), and anaerobic digesters (366) as Climate-
Smart Agriculture and Forestry (CSAF) Mitigation Activities support
underserved communities?
Answer. Manure management is a major source of methane within the
agriculture sector and is therefore an important opportunity for
climate change mitigation. When compared to a typical liquid storage
system or uncovered lagoon, the identified practices eligible for IRA
funds are expected to provide methane emissions reduction benefits.
USDA evaluates all practices designated as climate-smart mitigation
activities using a rigorous science-based, systematic process including
compelling scientific literature, critical review of the best available
evidence, and expert knowledge and experience. USDA support for
improved livestock manure and feed management technologies not only
benefits farmers, but also provides public benefit by reducing
emissions from these activities. Livestock manure management practices
can only be funded through the IRA for specific purposes:

To implement a Composting Facility (Code 317), which can
lead to reduced methane emissions from the increased higher
temperatures and more aeration during composting.

To implement a Compost-Bedded Pack system, under the
practice Waste Storage Facility (Code 313), which can lead to
reduced methane emissions resulting from the added carbonaceous
bedding material and regular tilling to promote composting.

To install a cover to capture biogas from anaerobic lagoons
or liquid storage systems, under the practice Roofs and Covers
(Code 367), which can lead to reduced methane emissions as
biogas is captured and either flared or used as a natural gas
substitute.

To install an Anaerobic Digester (Code 366), which can
reduce emissions by capturing biogas and combusting it for
energy generation or flaring it.

To install a Waste Separation Facility (Code 632), which
removes solids from manure streams to potentially reduce
methane generated from the storage lagoon.

NRCS conducts site-specific environmental evaluations for
conservation projects. As part of this, NRCS uses an Environmental
Justice Evaluation Procedure Guide Sheet to assess whether the action
would have disproportionate and adverse environmental or human health
effects on low-income, minority, or Tribal populations and whether
there is a need for additional consultation or community outreach to
affected and interested parties.

Question 1a. Are these uses of funds consistent with the goals of
the IRA and with Biden Administration policies including Executive
Order 14036: Promoting Competition in the American Economy and
Executive Order 14096: Revitalizing Our Nation's Commitment to
Environmental Justice for All?
Answer. Yes, NRCS conducts site-specific environmental evaluations
for conservation projects. NRCS uses an Environmental Justice
Evaluation Procedure Guide Sheet to assess whether the action would
have disproportionate and adverse environmental or human health effects
on low-income, minority, or Tribal populations and whether there is a
need for additional consultation or community outreach to affected and
interested parties.

Question 1b. If you determine that these uses of funds are not
consistent with the goals of the IRA and the President's economic and
environmental commitments, will you direct NRCS to revise its list of
eligible conservation practices?
Answer. Practices are reviewed when any significant changes are
made to the NRCS conservation practice standard and when significant
scientific findings published in peer-reviewed scientific literature
are acquired. If it is determined that a practice is no longer expected
to provide climate-smart mitigation benefits, it would be removed from
the list.

Question 1c. When deciding to include mitigation activities as
CSAF, how does NRCS consider the impacts of including those practices
on consolidation, local air and water pollution, and public health
outcomes?
Answer. NRCS evaluates the activities to determine if they are
expected to provide net climate-smart mitigation benefits. Public
health, environmental justice, water pollution, and many other concerns
are considered as part of the NRCS conservation planning process.

Question 2. The Biden Administration has quickly implemented a
dozen or more programs that are investing in resilient local and
regional food supply chains. By your Administration's design, these
investments have reached a diverse range of farmers, processors, and
distributors that are supplying high quality, locally produced foods to
food insecure communities across the nation. These investments have
spurred on-farm investments for small growers to scale to wholesale
markets for the first time and their products have reached the most
rural and vulnerable populations that are not easily served by existing
networks. Investments such as the Meat and Poultry Processing Expansion
Program, Food Supply Chain Guaranteed Loan Program, and Resilient Food
Systems Infrastructure Program have and will greatly increase the
availability of domestic food products. USDA's Commodity Procurement
Team has led a successful cooperative agreement program utilizing
Commodity Credit Corporation funds that state agencies have utilized to
purchase local produce, meat, and dairy for distribution in food
security networks.
How is your Administration going to support the market growth for
this influx of ongoing supply?
Answer. The Food System Transformation Framework-USDA's more than
$4 billion commitment to developing a fair, competitive, distributed,
and resilient food system-is increasing local and regional capacity to
gather, process, move, and store food within local and regional food
systems to provide more options for producers to create value-added
products and sell locally, which will support new economic
opportunities and job creation in rural communities. While many of the
programs and initiatives supporting the Food Systems Transformation
Framework are leveraging one-time funding authority, these programs are
working together to develop and grow market opportunities for the long
term.
The Regional Food Business Centers (RFBCs), for example, are
partnering with organizations to deliver technical assistance to aid
diverse small- and mid-sized farms and food businesses to take
advantage of new market opportunities created by the Local Food
Purchase Assistance (LFPA) and Local Food for Schools (LFS) programs
and leverage their new connections and capacity into future contracts.
The LFPA and LFS programs are creating demand and market pull-through
for small- and mid-sized producers to scale into. The Organic Market
Development Grants are helping build the infrastructure the domestic
organic sector needs to meet current demand as well as developing new
market opportunities. RFSI allows states to invest funds in supply
chain coordination to improve connections between producers,
processors, and markets, and the three AMS Local Agriculture Market
Programs (LAMP) AMS administers are used to build capacity and develop
important new market channels.
Rural Development (RD) provides access to capital and technical
assistance resources that create new and better market opportunities
for agricultural producers and the food supply chain. RD programs
complement and enhance market development programs and activities
provided by other USDA agencies, such as the Agriculture Marketing
Service (AMS) and Food and Nutrition Service (FNS). RD is actively
coordinating with AMS on their new Regional Food Business Centers, for
instance, that provide `hub' services to local and regional food supply
chains for whom RD can provide capital in the form of grants and loans
to help them grow, access new markets, and contribute to a strong and
resilient food system. Further, we will coordinate with AMS on projects
supported through their Resilient Food Infrastructure Program, Organic
Marketing Development Program, and the suite of Local Agriculture
Marketing Programs (including RD's own Value-Add Producer Grant), to
make sure investment-ready businesses have access to the capital,
technical assistance and grants that RD provides.
Rural Development, through its National Fund Manager, Reinvestment
Fund, has greatly expanded the Healthy Food Finance Initiative (HFFI),
which provides access to fresh, healthy foods in underserved
communities through the development of food retail stores and supply
chain enterprises. A priority of the program is to support local and
regional food production and create viable market outlets for the
growing influx of fresh and healthy agricultural products, in rural and
urban communities.
RD's programs provide funding for the critical infrastructure that
creates the environment in which farm and food businesses can grow and
thrive. Foundational rural community infrastructure provided by RD,
such as housing and community facilities, in addition to high-speed
internet, electric, and transportation infrastructure, and other
utilities and services, are necessary for a growing and thriving food
system.
Centerpiece RD business programs such as the Business & Industry
Guaranteed Loan program, Intermediary Relending Program, Meat and
Poultry Intermediary Lending Program, Rural Business Development
Grants, Rural Cooperative Development Grants, and Value-Added Producer
Grants are just some of the examples of RD business programs that
provide capital and services to agriculture food supply chain
businesses as they scale and grow their markets.

Question 2a. Are there plans to coordinate these domestic products
into public institutions and existing commodity procurement channels at
USDA?
Answer. USDA is making significant investments in growing
institutional markets for local and regional producers. Local Food
Purchase Assistance Cooperative Agreement Program (LFPA) uses non-
competitive cooperative agreements to provide up to $900 million of
American Rescue Plan (ARP) and CCC funding for state, Tribal, and
territorial governments to purchase foods produced within the state or
within 400 miles of the delivery destination to help support local,
regional and underserved producers. Through the Local Food for Schools
Cooperative Agreement Program (LFS), USDA is also investing up to $200
million to assist states in food assistance purchases of domestic local
foods for distribution to schools. LFS will further the success of
permanent programs like the Patrick Leahy Farm to School Program, which
provides grants for training and technical assistance, planning,
purchasing equipment, and other activities to increase local food
procurement for school meal programs and expand educational agriculture
and gardening programming.

Question 3. Historically underserved producers, and particularly
those who are Black, Indigenous and People of Color (BIPOC), have not
been afforded the same opportunities to access specialized financial
and technical support that would increase opportunities to access and
capital that benefit the growth and success of their farm operations.
USDA launched the Increasing Land, Capital, and Market Access
(Increasing Land Access) Program to help underserved producers by
increasing land, capital, and market access. Last year USDA awarded
approximately $300 million through this program, and while this is a
step in the right direction, underserved producers still face
challenges. From discrimination to misinformation, BIPOC producers
still face barriers in directly accessing financial and technical
assistance and it is clear further investment in this area is necessary
for a resilient food system.
How important is it for Congress to continue to fund this program,
and others like it, to bridge the gap for BIPOC producers?
Answer. It is important to continue to offer the Increasing Land
Access program and programs like it. It provides community leaders with
an opportunity to creatively solve problems based on their specific
needs.

Question 3a. And what else can USDA do to ensure that these
producers have increased access to USDA programs that should be
equitably delivered to all producers?
Answer. USDA has continued to make investments in staffing for
field offices, training, expanding views on the various types of
agriculture and knowledge of the practices, culturally and
linguistically appropriate resources, and grants and agreements
designed to address the needs of producers can lead to a broader and
more equitable access. Further, reviewing of policy to ensure there are
no unintended barriers to participation. Recently, the Equity
Commission released its final report (link--https://www.usda.gov/
equity-commission/reports),\15\ which contains an important set of
recommendations for agricultural policy, some of the items are USDA
administrative changes that we have already begun to implement;
however, many are statutory recommendations that the Committee should
consider.
---------------------------------------------------------------------------
\15\ Editor's note: retained in Committee file are: Interim Report
2023--Recommendations made to the U.S. Department of Agriculture to
advance equity for all; USDA Response to Equity Commission Interim
Report; A New Path Forward: A Progress Report on the Implementation of
the Equity Commission's Recommendations--Update 2024; Final Report
Recommendations Made to the U.S. Department of Agriculture To Advance
Equity for All.
---------------------------------------------------------------------------
Questions Submitted by Hon. Sharice Davids, a Representative in
Congress from Kansas
Question 1. American farmers have worked hard to respond to the
immediate challenges of pandemic recovery, supply chain disruptions,
and the Russia-Ukraine conflict. How is the USDA working to support
increased production and ultimately, lower retail food prices?
Answer. USDA has done significant work on a Food System
Transformation Framework--USDA's more than $4 billion commitment to
developing a fair, competitive, distributed, and resilient food
system--is increasing local and regional capacity to gather, process,
move and store food within local and regional food systems to provide
more options for producers to create value-added products and sell
locally, which will support new economic opportunities and job creation
in rural communities. While many of the programs and initiatives
supporting the Food Systems Transformation Framework are leveraging
one-time funding authority, these programs are working together to
develop and grow market opportunities for the long term.
The Regional Food Business Centers (RFBCs), for example, are
partnering with organizations to deliver technical assistance to aid
diverse small- and mid-sized farms and food businesses to take
advantage of new market opportunities created by the Local Food
Purchase Assistance (LFPA) and Local Food for Schools (LFS) programs
and leverage their new connections and capacity into future contracts.
The LFPA and LFS programs are creating demand and market pull-through
for small- and mid-sized producers to scale into. The Organic Market
Development Grants are helping build the infrastructure the domestic
organic sector needs to meet current demand as well as developing new
market opportunities. Resilient Food System Infrastructure program
allows states to invest funds in supply chain coordination to improve
connections between producers, processors, and markets, and the three
AMS Local Agriculture Market Programs (LAMP) AMS administers are used
to build capacity and develop important new market channels.
Rural Development (RD) provides access to capital and technical
assistance resources that create new and better market opportunities
for agricultural producers and the food supply chain. RD programs
complement and enhance market development programs and activities
provided by other USDA agencies, such as the Agriculture Marketing
Service (AMS) and Food and Nutrition Service (FNS). RD is actively
coordinating with AMS on their new Regional Food Business Centers, for
instance, that provide `hub' services to local and regional food supply
chains for whom RD can provide capital in the form of grants and loans
to help them grow, access new markets, and contribute to a strong and
resilient food system. Further, RD coordinates with AMS on projects
supported through their RFSI Organic Marketing Development Program, and
the suite of Local Agriculture Marketing Programs (including RD's own
Value-Add Producer Grant), to make sure investment-ready businesses
have access to the capital, technical assistance and grants that RD
provides.
Rural Development, through its National Fund Manager, Reinvestment
Fund, has greatly expanded the Healthy Food Finance Initiative (HFFI),
with funding from the American Rescue Plan Act. HFFI provides access to
fresh, healthy foods in underserved communities through the development
of food retail stores and supply chain enterprises. A priority of the
program is to support local and regional food production, and create
viable market outlets for the growing influx of fresh and healthy
agricultural products, in rural and urban communities.
RD's programs provide funding for the critical infrastructure that
creates the environment in which farm and food businesses can grow and
thrive. Foundational rural community infrastructure provided by RD,
such as housing and community facilities, in addition to high-speed
internet, electric, and transportation infrastructure, and other
utilities and services, are necessary for a growing and thriving food
system.
Centerpiece RD business programs such as the Business & Industry
Guaranteed Loan program, Intermediary Relending Program, Meat and
Poultry Intermediary Lending Program, Rural Business Development
Grants, Rural Cooperative Development Grants, and Value-Added Producer
Grants are just some of the examples of RD business programs that
provide capital and services to agriculture food supply chain
businesses as they scale and grow their markets.

Question 2. How is the lack of a multiyear farm bill impacting
USDA's ability to strengthen agricultural supply chains?
Answer. Producers and rural businesses do not have a guarantee that
they will be able to access programs later this year that they need to
strengthen the supply chain. There is also the uncertainty around what
investments Congress may make in programs that support efforts to
create new markets, expand processing, and support new income streams
for farmers.

Question 3. I want to recognize the United States Department of
Agriculture's work to expand investments in conservation and support
the development of new conservation practices. This work is
complementary to the work famers and producers have been doing to
protect their land for years. One example is work being supported by
General Mills in the Cheney Lake Watershed and Wichita. By helping
farmers implement new practices, many of their yields and incomes
improved.
How do you intend to continue to leverage the work already being
done by the private sector and incorporate their research and learnings
into USDA's ongoing efforts?
Answer. Through our technical and financial assistance programs,
USDA is leveraging work already being done by the private sector and
incorporating the latest research and learnings into USDA's ongoing
efforts.
One leading example is with our new Partnerships for Climate-Smart
Commodities, where USDA has instituted a learning network so we can
synthesize lessons-learned from the various projects. In addition, we
also seek to leverage private sector input for our working lands
programs when we seek public input on our conservation practice
standards in the national Handbook of Conservation Practices. USDA also
partners with the private section in our Conservation Innovation Grant
(CIG) program that supports the development of new tools, approaches,
practices, and technologies to further natural resource conservation on
private lands. CIG has allowed us to take private-sector research and
ideas to advance them with on-farm trials to support more widespread
adoption of innovative approaches, practices and systems on working
lands.

Question 4. Pursuant to the United States Department of Agriculture
(USDA) rulemaking in 2020, to obtain an Animal Welfare Act license,
commercial dog breeders or dealers must pass a pre-license inspection
demonstrating compliance with regulations. Applicants are permitted
three opportunities to pass. I have seen examples of pre-license and
re-license inspections where when an applicant fails--for example
because of improper veterinary care, inadequate food and water, or
unsanitary conditions--the USDA will allow the applicant to correct the
violations then conduct a follow-up inspection on the spot.
Stakeholders have raised concerns that applicants are failing pre-
license inspections then passing pre-license inspections in the same
day. How would you respond to concerns that the implementation of this
new rulemaking makes it too easy for those who show an inability to
comply with the regulations to obtain a license?
Furthermore, what are you doing or what will you do to ensure that
the USDA's licensing requirements are being enforced more
appropriately?
Answer. USDA takes the health and welfare of animals very
seriously. The licensing rule put in place in 2020 requires all
facilities to demonstrate full compliance with the Animal Welfare Act
before USDA can issue or renew their license. Accordingly, there can be
zero violations or noncompliances during these pre-license inspections.
In some cases, a noncompliance we identify is easily correctible.
Examples of this include ensuring food is properly covered or proper
storage of cleaning supplies. In these cases, where corrective actions
can be taken quickly, swift re-inspection may be utilized. These pre-
license inspections are not intended to be punitive but to help the
licensee understand their full range of responsibilities under the Act
so they may come into full compliance with the Act.
To ensure licensing requirements are being enforced, licensees are
subject to random, unannounced inspections. In the case USDA identifies
and cites violations during these inspections, the licensee is subject
to reinspection and potential enforcement action under the Act to bring
the facility into compliance.

Question 5. In August, the United States Department of Agriculture
issued a proposed rule to strengthen regulations on the Horse
Protection Act, as the agency committed to do back in 2010 during an
Office of Inspector General audit. Concerns have been raised that
without these revisions, unscrupulous horse trainers continue to
``sore'' horses, forcing them to perform an unnaturally high-stepping
gait that wins prizes by inflicting pain on their front legs and
hooves. The proposed rule draws upon the January 2021 National
Academies of Sciences, Engineering, and Medicine report and its
recommendations for reforms. In November 2023, I joined 125 of my
colleagues in sending a letter (attached) urging you to quickly
finalize the rule and ensure it is at least as strong as the 2017 final
rule that USDA withdrew. Can you share an update on the status of this
long-awaited rule, which has received more than 115,000 supportive
public comments?
Answer. We share your concerns about the welfare of these horses
and the importance of stronger regulations under the Horse Protection
Act. We are in the process of finalizing this important rule and expect
action soon. We will share more information with your office when we
are able to.
attachment
November 20, 2023

Hon. Thomas ``Tom'' J. Vilsack,
Secretary,
U.S. Department of Agriculture,
Washington, D.C. 20250

Re: Horse Protection; Amendments to the Horse Protection Regulations
[Docket No. APHIS-2022-0004]

Dear Secretary Vilsack,

We are writing to express our strong support for the above-
referenced rule proposed on August 21, 2023, and urge the USDA to act
expeditiously to finalize it. As supporters of the Prevent All Soring
Tactics Act, H.R. 3090, we are pleased that the proposal includes key
elements consistent with the PAST Act to strengthen enforcement of the
Horse Protection Act (HPA), and encourage you to ensure that other
needed reforms contained in the PAST Act are included in the final
rule.
The existing HPA regulations have not been sufficient to put an end
to the cruel and illegal practice of soring, in which unscrupulous
trainers deliberately injure the legs and hooves of certain breeds of
horses by mechanical and chemical means to create an exaggerated, high-
stepping gait known as the ``Big Lick'' that wins ribbons at some horse
shows. For example, between 2017 and 2022, on average annually, more
than 40 percent of horses tested by APHIS at competitions tested
positive for prohibited substances used to sore horses or temporarily
numb them to mask their pain during inspection. Despite the agency's
best efforts at enforcement under the current regulations, soring
remains rampant.
The USDA committed to rulemaking to abolish the current Designated
Qualified Person (DQP) licensing system in its 2010 response to an
audit issued by the USDA Office of Inspector General. Additionally, in
multiple Federal Register notices, the USDA stated the agency's plans
to consider banning the pads and chains used as part of the soring
process. We agree with your conclusion reached in 2016: ``The
Department believes that 38 [now 45] years has been more than enough
time for the gaited horse industry to reform its training practices to
comply with the Act.'' In 2021, the USDA issued a press release that it
would be pursuing a new proposed rule expeditiously as a top regulatory
priority, and Congress has repeatedly urged the agency via
appropriations provisions to move forward with new regulations to end
horse soring.
We urge the USDA to ensure that the final rule to improve
enforcement of the HPA contains three important provisions consistent
with the PAST Act, which currently has bipartisan support by 218 House
cosponsors, passed the House by a 304-111 vote in 2022, and has been
endorsed by hundreds of stakeholder groups and individuals, including
the American Horse Council and 70 other national and state horse
groups, the American Veterinary Medical Association, American
Association of Equine Practitioners, the state veterinary organizations
of all 50 states, National Sheriffs' Association, Association of
Prosecuting Attorneys, animal protection groups, and key individuals in
the walking horse show world. Additionally, in public opinion polls
conducted in 2020 in Kentucky and Tennessee (the states where soring is
most prevalent), respondents across all categories--political
affiliation, gender, age and geographic region of each state--voiced
resounding support for the PAST Act's reforms (78% in KY and 82% in
TN). There is a consensus--among all but the scofflaws associated with
soring who want to continue committing heinous cruelty, cheating to win
unfair advantage at horse shows, and profiting from it, and their
handful of defenders--that these key reforms are urgently needed:

Eliminate Industry Self-Policing: Eliminate the industry
self-policing system that is based on DQP licensing programs
sponsored by Horse Industry Organizations (HIOs) and replace it
with USDA-licensed, trained, and assigned independent
inspectors who will be monitored by and accountable to the
agency for enforcement of the Horse Protection Act. The
industry self-policing system has been a failure, rife with
conflicts of interest. This was recognized and documented in
the USDA Inspector General's 2010 audit of the Horse Protection
Program, and replacement of the HIO/DQP model with a system of
inspectors licensed and supervised directly by the Department
was the first recommendation of that audit. Such a USDA-
overseen system is consistent with the provisions of the PAST
Act, which the Congressional Budget Office reviewed in November
2022 and estimated would have an insignificant effect on direct
spending. All inspections must be conducted by experienced
examiners relying on science and evidence in an unbiased manner
overseen by the agency.

Ban Incentives to Sore Walking Horses: Immediately prohibit
the use of equipment associated with soring on the specific
breeds known to be subjected to soring. The veterinary
community and leading horse industry groups have called for an
end to the use of ``action devices'' (including chains),
``performance packages'' (also called stacks and pads),
weighted shoes, wedges, hoof bands, and other devices that are
not used specifically for protective or therapeutic purposes as
prescribed by a licensed accredited veterinarian. They have
concluded that this equipment plays an integral part in the
soring of these breeds and is an incentive to sore the horse.
These devices can cause pain and damage to the horse's hoof,
exacerbate the pain of chemical irritants applied to the legs,
facilitate concealment of other objects that produce pain, and
cause the horse's hoof to strike the ground at an abnormal
angle and with excessive force. This prohibition should include
exemptions for pads and wedges prescribed for therapeutic
purposes by licensed accredited veterinarians as described
above.

Apply the Rule to Tennessee Walking Horses, Racking Horses,
and Spotted Saddle Horses: These three breeds have a documented
history of soring and an ongoing problem with soring that
justifies prohibiting certain practices, devices, and
substances because of how they are used in those three breeds.
Spotted Saddle Horses should be included because they too are
victims of soring.

These reforms will not destroy these breeds in the gaited horse
industry, as you may hear from opponents of the proposed rule, but will
instead save the industry from imploding because of the bad actors who
continue to abuse horses at the expense of the breeds' reputation. Only
approximately 10% of all Tennessee Walking Horses are shown in the Big
Lick classes for which horses are subjected to soring to compete. While
this segment of the industry has declined tremendously in recent years
due to increased public awareness of soring--with plummeting attendance
at shows, cancellation of corporate and charitable sponsorships, and
falling sale prices for horses and breeding fees--competition in the
other classes that involve the rest of the breed is growing. These
important regulatory changes, consistent with the PAST Act, will allow
those who are trying to play by the rules to finally be free of the
stigma that soring brings on the whole industry.
We commend the USDA for proposing a strong rule and urge you to
prioritize the finalization and publication of the rule. As the agency
committed in 2010 to promulgate rules to strengthen enforcement of the
HPA, regulatory action is long overdue and must be completed as
expeditiously as possible. Every day that the regulatory reforms needed
to fulfill the intent of the HPA and bring about an end to soring are
delayed, thousands of horses are subjected to chronic, abject cruelty.
We implore you not to allow any further unwarranted delay.
Thank you for your consideration.
Sincerely,

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Questions Submitted by Hon. Jill N. Tokuda, a Representative in
Congress from Hawaii
Rural Healthcare
Question 1. As a Representative of one of the most rural and remote
districts in the country, I frequently hear from constituents who are
concerned by the limited access to basic health care and mental health
services in their communities. This is why I restarted the
Congressional Bipartisan Rural Health Caucus, of which many of my
colleagues on the House Agriculture Committee--including Chairman
Thomspon--are Members.
In your testimony, I was pleased to hear about the important
investments the Biden Administration is making through the USDA to
ensure that more than 22 million Americans have greater access to
health care and nutrition.
In your response to Congressman Bishop's question about steps that
Congress could take to invest more into rural healthcare, you
highlighted three key programs: the Community Facilities program, the
ReConnect program, and the Emergency Rural Health Care Grants program.
Unfortunately, my home state of Hawai`i has not receive any funding
from the Emergency Rural Health Care Grants program or ReConnect and
has also struggled to leverage Community Facilities funding to support
rural healthcare facilities.
Has the USDA conducted a review of awardees of these programs and
where these resources are being directed and for what purposes?
Answer. USDA continues to evaluate where program dollars are going,
and is working to ensure that they are going to the communities that
need them the most. I will ensure that the Rural Development State
Director for Hawaii examines this issue.

Question 2. Has the USDA developed any recommendations for changing
these programs, including as it relates to funding and statutory or
regulatory barriers? If so, what are those recommendations, and how
might those help improve participation in and access to these programs?
Answer. USDA broadband programs are substantially oversubscribed.
This results in eligible projects not being funded due to resource
limits. For example, ReConnect Round 4 received nearly three times as
many applications (258) as awards (89). Funding requests were 2.4 times
the funds available ($2.9 billion vs. $1.7 billion).

Question 3. What is the USDA doing to expand stakeholder outreach,
ensure greater diversity in award administration, and provide
applicants and grantees with the technical assistance needed to
leverage these resources and others to help expand access to rural
health care?
Answer. USDA conducts numerous outreach webinars to promote and
assist in applications to its broadband programs.
General Field Representatives (GFRs) serve as the primary local
outreach contacts for RUS Telecommunications programs. In FY 2023, GFRs
participated in a total of 173 virtual and in-person outreach events to
promote broadband programs. These events included exchanges with
telecommunications providers, healthcare providers, educational
institutions, local governments, economic development organizations,
Members of Congress, regional planning organizations, Tribal entities,
and other state and Federal agencies.
In FY 2023, 33 outreach events were held with broadband
organizations including the Colorado Broadband Office, FL DEO Broadband
Office, Georgia Municipal Association (Broadband Summit), Missouri
Office of Broadband Deployment, Ohio Rural Broadband Connectivity
Event, Tennessee Broadband Accelerate Program, and the Utah Broadband
Confluence.
Several events were held with other agencies that fund broadband
projects such as the National Telecommunications and Information
Association (NTIA) and the Federal Communications Commission (FCC).
Outreach events were also held with Members of Congress such as
Congressman Thompson's Ag Summit, Congresswoman Leger Fernandez's
Broadband Amplification event, Congressman Kilmer's WA-06 Grants
Workshop, and Congresswoman Stansbury's Federal Grants Workshop.
Many outreach events were specific to Tribal communities. These
include meetings with the Alaska Federation of Natives Annual
Convention, BTA Overview for Tribal Entities, Calista Native
Corporation, and Cheyenne River Sioux Tribe Telecommunications
Authority.
Other outreach events included meetings with individual program
stakeholders, congressional offices, interagency partners, telecom
associations, and events that were specific to the ReConnect Program.
Indigenous Traditional Ecological Knowledge
Question 4. The USDA 2022 Equity Action Plan released in commits
the department to increasing the use of Indigenous Traditional
Ecological Knowledge (ITEK) into its programs, including by hiring
additional ITEK experts.
I am aware that the NRCS already recognizes ITEK in some of its
programs. Yet Native American Tribes and Native Hawaiian stakeholders
find it difficult to update and incorporate this ITEK throughout USDA's
conservation programs.
Please provide an update on the status of USDA's ITEK hiring
initiatives. What steps have been taken by USDA to fill ITEK expert and
other Tribal-related positions and improve such hiring processes?
Answer. In 2021, the USDA Office of Tribal Relations coordinated
with the Office of Human Resource Management to issue a department-wide
memorandum on Recruiting and Hiring Tribal Relations Positions
Advisory. This memorandum provides guidance on hiring procedures and
solicitation standards for agency adoption on USDA Tribal-facing
positions and positions on or near Indian reservations. Multiple USDA
agencies have utilized these standards in solicitations for Tribal-
related positions at the national and local levels, and USDA agencies
continue exploring avenues for strengthening hiring of (Tribal) subject
matter experts.

Question 5. What steps could this Committee take to ensure that
Tribes and other indigenous stakeholders can fully use ITEK in USDA
programs and services, including conservation initiatives?
Answer. USDA actively works to elevate indigenous knowledge in
conservation initiatives, and examples of such steps are referenced
under the White House memorandum on Guidance for Federal Departments
and Agencies on Indigenous Knowledge.
USDA Natural Resources Conservation Service provides conservation
planning and funding assistance through recognized conservation
practice standards. NRCS recognizes a process for incorporating
indigenous knowledge in conservation planning through the Indigenous
Stewardship Methods Evaluation, Conservation Evaluation and Monitoring
Activity.\16\ Additionally, NRCS now maintains an internal Indigenous
Practices team to provide internal coordination on the adoption of
indigenous knowledge in recognized conservation practice standards,
amidst related considerations. For public transparency and to provide
maximum accessibility for producers to utilize recognized conservation
practices, these standards are published online.\17\
---------------------------------------------------------------------------
\16\ https://www.nrcs.usda.gov/sites/default/files/2022-10/
FY23_CEMA%20222_Indigenous
%20Stewardship%20Methods%20Evaluation.pdf.
\17\ https://www.nrcs.usda.gov/resources/guides-and-instructions/
conservation-practice-standards.
---------------------------------------------------------------------------
Where Tribes have the internal infrastructure to take on the full
administration of a conservation project, including engineering, that
Tribe may seek an Alternative Funding Arrangement for either of two
conservation programs. Such Alternative Funding Arrangements may
include practices that are outside the scope of recognized conservation
practice standards; however, these additional administrative
requirements may be challenging to implement.
USDA's National Institute of Food and Agriculture (NIFA) is
encouraging applicants to include ITEK in their grant proposals when
appropriate. NIFA recognizes the contributions indigenous communities
have made to advancing environmental sustainability and responsible
stewardship of natural resources. A new statement has been added to
Request for Applications as a strategy to increase applications
benefitting Tribal nations and remedy imbalances in support for Tribes.
Finally, the U.S. Forest Service has incorporated ITEK into its
practices through numerous actions. These include initiating a review
of current forest land management plans to introduce early engagement
with Tribes in developing related projects, incorporating indigenous
knowledge in nearly half of co-stewardship agreements, and updating
policies to include indigenous knowledge as a component of Best
Available Scientific Information, leading to an update of regulatory
definitions within land management planning rules.
Where Tribes or Tribal representatives provide culturally sensitive
information to USDA as matter of record, USDA is also required to
prioritize public transparency and accountability under the Freedom of
Information Act. This conflicting priority presents challenges to how
USDA recognizes the Tribal ownership of knowledge, particularly when
the presentation of this knowledge becomes incorporated into a Federal
record.
Natural Disasters
Question 6. Last August, the island of Maui experienced the
deadliest wildfires in modern U.S. history. In addition to the loss of
more than 100 people and the destruction of the town of Lahaina, the
fires razed more than 6,300 acres of agricultural land, with
agricultural damage estimated at more than $23 million.
I want to thank the USDA for its response to the fires to date. As
Lahaina and the greater island of Maui look to rebuild, the USDA will
continue to be a critical partner. I look forward to continuing to work
with you and your staff to ensure these communities can take advantage
of the available resources and expertise at USDA.
Last October, the Biden Administration put forth a supplemental
appropriations request, which included $2.8 billion in financial
assistance for farmers and agricultural producers affected by natural
disasters in 2023. That was more than 3 months ago.
Does the USDA have an updated disaster supplemental request for
calendar year 2023? And if so, what additional financial assistance or
program flexibilities is USDA seeking since the last request?
Answer. The updated cost of operating an ERP-type program for 2023
is $11.15 to $12.28 billion. The new projected ERP gross payments are
based on RMA's estimated Track 1A outlays which are then extrapolated
to Track 1B/NAP and Track 2. This updated amount includes $2.17 billion
to refund all eligible producer premiums and fees.
Questions Submitted by Hon. Nikki Budzinski, a Representative in
Congress from Illinois
Question 1. President Biden's U.S. biotechnology and
biomanufacturing Executive Order seeks to advance these industries by
coordinating resources and strategic planning across the Federal
Government. USDA outlined a Biomanufacturing Strategy in March 2023,
including a focus growth of sustainable feedstocks and innovation
through public private-partnerships and research priorities.
Can you share an update on the Executive Order at USDA?
Answer. In the coming weeks, USDA expects to release ``Building a
Resilient Biomass Supply: A Plan to Enable the Bioeconomy in America,''
one of the key USDA deliverables under the EO. From our work developing
this plan, we have found that U.S. biomass supplies are abundant and
can be well positioned for biobased product manufacturing if
improvements are made and farmers are provided with incentives to
produce biomass while reducing risk. We are also recognizing the
importance of researching and deploying improved biomass crops, taking
advantage of woody biomass residuals, and further developing markets
for biobased products such as through USDA's BioPreferred Program.
USDA also expects to release in the coming weeks a plan developed
by USDA. EPA and FDA to update, streamline, and clarify their
regulations and oversight mechanisms for products of biotechnology. We
are identifying processes and timelines to implement regulatory reform
as part of a whole-of-government approach to the regulation of
biotechnology products, especially in modified plants, animals and
microorganisms, human drugs, biologics, and medical devices.

Question 1a. How can USDA's biobased product and renewable energy
efforts encourage innovation in the U.S. and meet the Administration's
bold goals?
Answer. The Bold Goals Report delivered in March 2023 under the
Bioeconomy EO establishes three priority areas for long-term research
goals for food and agriculture innovation: (1) improve sustainability
while increasing productivity; (2) increase food nutrition, quality,
and consumer choice; and (3) protect plants and animals against
environmental stresses. USDA's efforts in biobased product
manufacturing and renewable energy contribute directly to the Bold Goal
of improving sustainability while increasing productivity. Specific
efforts making this contribution include: developing the next
generation of biomass feedstocks and cover crops; improving access and
utilization of woody biomass for biobased products; investing in
resilient infrastructure capacity for biobased manufacturing;
supporting new and better markets for biobased products; promoting
climate-smart practices to enhance productivity and sustainability of
biomass feedstocks; and providing stakeholder outreach and technical
assistance to ensure the resilience of biobased supply chains.

Question 2. Mr. Secretary, as I know you agree, the bioeconomy is a
top area of growth for our country. It's providing important
opportunities for growers in my district and across the country--and
powering important investments across the nation in manufacturing. Can
you talk to me about how the USDA BioPreferred program is working to
help these important growers and manufacturers capture a premium in the
market?
Answer. With the goal of increasing the development, purchase, and
use of biobased products, USDA's BioPreferred' Program
strives to be the Federal Government's official advocate and market
accelerator for biobased products. The Program's primary goals are to
spur economic development; create new markets for farm commodities;
increase the development, purchase, and use of biobased products;
create new jobs; support people in rural communities; promote
innovation; and contribute to a growing and thriving bioeconomy. The
Program requires Federal agencies and contractors to give purchasing
preference to biobased products. The USDA BioPreferred Program also
includes a certification and labeling initiative for biobased products
to be labeled with the USDA Certified Biobased Product Label. More than
2,400 companies spanning all fifty states participate in the Program.
From farm and field all the way through the manufacturing process, the
expanding market for biobased products creates jobs and helps support
economic growth in rural America.
The USDA Certified Biobased Product Label helps to create and
expand markets for biobased products by making them stand out to
consumers, particularly for those consumers with a desire to purchase
products that positively impact climate change and promote healthier
indoor and outdoor environments. The label and other promotions by USDA
help to establish new markets for biobased products and increase market
share for these products, helping farmers, manufacturers, and
investors.

Question 2a. How many products are currently certified and in the
pipeline?
Answer. There are currently 8,400 USDA Certified Biobased Products
with about 250 applications in the screening and testing stages.
Products take about 60 days to go through the BioPreferred Program's
screening, undergo testing, and obtain certification. On average, the
BioPreferred Program receives approximately 115 new applications each
month.

Question 2b. How have those products been treated in the Federal
procurement space?
Answer. Products in the BioPreferred' Program support
the strategic goal of creating a market for biobased products through
mandatory government-wide purchasing requirements. The Program's
central registry and online catalog now includes 139 product categories
representing over 8,900 biobased products and allows Federal
contracting and procurement officials to locate and compare products
that meet the mandatory procurement requirements. Federal Service and
Construction contractors are required to report their biobased product
purchases annually. In FY 2023, these contractors reported purchases of
biobased products from 130 distinct categories with a total reported
spend of $64 million. Executive Order 14081, Advancing Biotechnology
and Biomanufacturing Innovation for a Sustainable, Safe, and Secure
American Bioeconomy, requires additional Federal agency reporting to
the Office of Management and Budget.

Question 2c. How many USDA BioPreferred products are included in
Federal procurement catalogues--not just at USDA but across the
government?
Answer. Currently there are approximately 8,285 USDA Certified
Biobased Products and 8,900 biobased products that qualify for Federal
purchasing listed in the USDA BioPreferred Program's online catalog.
Both GSA Advantage! and DoD FedMall offer biobased products in their
environmental aisles. The BioPreferred Program strongly encourages
Program participants to obtain a GSA schedule contract to take
advantage of these markets for their products. Through our website
(biopreferred.gov \18\) and newsletters, we encourage Federal buyers to
make purchases through these resources as well.
---------------------------------------------------------------------------
\18\ Editor's note: the link embedded in the document is to a
USDAGCC sharepoint site. It had been redacted.

Question 3. Will the Administration meet its deadline of March 1 to
have the GREET model update completed and will the section 40B SAF tax
credit be usable by SAF producers on that day?
Answer. The Biden-Harris Administration plans to issue a
Sustainable Aviation Fuel (SAF) notice as part of the Investing in
America agenda. The notice will catalyze innovation in the aviation
industry, incentivize the production of cleaner, more sustainable
aviation fuels, and help make the United States a leader in
decarbonizing the aviation industry. The Treasury Department's Notice
will provide important clarity around eligibility for the SAF tax
credit that was established in the Inflation Reduction Act. The SAF tax
credit incentivizes the production of SAF that achieves a lifecycle GHG
emissions reduction of at least 50% as compared with petroleum-based
jet fuel.

Question 4. Please explain how the GREET model update will continue
to deliver value to farmers by accurately crediting conservation
practices and emissions reductions from regenerative farming, climate
smart agriculture, and carbon capture and storage--all techniques that
could massively lower carbon emissions, if adopted?
Answer. As part of this effort, the U.S. Department of Agriculture
(USDA) and other Federal Government agencies (EPA, DOT/FAA, and DOE)
will jointly announce the 40B GREET 2024 model. This model will provide
another methodology for SAF producers to determine the lifecycle GHG
emissions rates of their production for the purposes of the SAF tax
credit. USDA is examining options for encouraging the use of Climate
Smart Agriculture (CSA) practices for SAF feedstocks more broadly. We
are taking this path because we want to recognize the climate benefits
of these CSA practices and encourage their adoption, but also recognize
there is additional work to do to assess verification mechanisms,
empirical data, and modeling. Incorporating CSA practices into the
production of SAF provides multiple benefits. These include lower
overall GHG emissions associated with SAF production, improved accuracy
of overall carbon intensity estimation, sustainable production of
domestically-produced aviation fuel, and increased adoption of farming
practices that are associated with other environmental benefits, such
as improved water quality and soil health.

Question 5. What steps is USDA taking to ensure that the GREET
modeling update that is underway uses the same rigorous science on
which the model is based and does not manipulate the model to deliver a
predetermined outcome, such as excluding ag-based biofuels from
eligibility for the SAF credit?
Answer. The modified version of GREET incorporates new data and
science, including specific new modeling of key feedstocks and
processes used in aviation fuel and certain categories of indirect
emissions. It integrates other categories of indirect emissions--such
as crop production and livestock activity--in addition to land use
change emissions informed by GTAP-BIO. The modified GREET model also
integrates key greenhouse gas emission reduction strategies such as
carbon capture and storage, renewable natural gas, and renewable
electricity.

Question 6. I understand that there has been a positive stakeholder
response to the launch of USDA's Increasing Land, Capital, and Markets
Access program. I have cosponsored the bipartisan Increasing Land
Access, Security, and Opportunities Act (S. 2340, H.R. 3955), which
would continue the work of this USDA program and provide funding to
community-led land access solutions across the country.
I know that this program is currently being rolled out and projects
are beginning to get underway. Can you speak to the efforts that USDA
has taken to establish this program and the community response?
Answer. The community response has been extensive, lots of
creativity and innovation in the agreements we received that will
really address needs around land, market, and capital access. The
proposals were excellent, and the need exceeded the funding that was
available. To evaluate the over 160 projects, an outside panel of
twenty was convened. They ranked the projects and then 50 were
selected. The complexity of the program has offered an expansive list
of actions and activities to help in this space which has resulted in
extensive research and work to develop guiding principles and policy to
support recipients. These national, regional, or local projects cover
the whole country. Projects also work with multiple underserved
communities. In addition to expanding opportunities for existing
farmers, this program helps build the next generation of farmers and
ranchers.

Question 7. Would tax policy set by Congress that would reduce
interest rates on producers by 1% have a positive impact on young,
beginning and socially disadvantaged farmers?
Answer. The Department is willing to engage in conversations with
the U.S. Department of Treasury, which has the institutional expertise
in tax policy, and your office to better understand your proposals and
its potential impacts.

Question 8. Competition has been a key piece of your agenda. Just
as producers price shop for seed, fertilizer and other inputs, they
also shop for credit. Do you think added competition in the ag lending
space would be beneficial to interest rates offered to producers?
Answer. USDA is supportive of policies and practices that encourage
robust participation in the agricultural lending space. Numerous
lending options create an environment of healthy competition that leads
to innovative credit products tailored to the specific needs of an
individual, an industry, and a community. FSA Farm Loan Programs fill
an important role in the lending community, with particular emphasis on
funding opportunities for beginning farmers and historically
underserved farmers. FSA's direct and guaranteed loan programs support,
and often work in partnership with, traditional credit resources from
banking institutions, credit unions, and the Farm Credit system. FSA
also recognizes the increasingly important role of other non-
traditional lenders, such as insurance companies, farm input suppliers,
and equipment manufacturers. The many options for prospective borrowers
to choose from can create an environment where loan costs and interest
rates are kept as low as possible in many situations. However, FSA
recognizes there are still regions where lending options are limited.
In these areas, sometimes referred to as ``credit deserts'', FSA may be
the only significant agricultural lender. To ensure all producers have
reliable access to credit regardless of where they farm, the
Administration has included legislative language in the FY 2025
President's Budget that would remove a cap on the number of years a
producer could use FSA direct loan programs.
Questions Submitted by Hon. Jasmine Crockett, a Representative in
Congress from Texas
Question 1. Right now, USAID feeds over 50 million impoverished,
malnourished individuals around the world each year through the Food
for Peace program. There have been some suggestions to change the
administrative structure of Food for Peace that would shift
responsibility of implementation to USDA. Mr. Secretary, you talked in
your testimony about the good work you are doing to overcome the
existing staffing issues at USDA. So I have a couple questions:
Would you want to take over the administration of the Food for
Peace program from USDA?
What would the impact be on staffing need?
Is USDA prepared to staff up in countries around the world to
accomplish such an expansion?
Answer. USDA is not seeking any additional authority or
responsibility for administration of the Food for Peace Program under
Title II of the Food for Peace Act. USDA supports USAID's continued
administration of that program. USAID has the experience, expertise,
and adequate staffing levels to implement the Food for Peace Program.

Question 2. Mr. Secretary, thank you for your commitment to
addressing this global hunger crisis. As you know, the number of food
insecure people has more than doubled in the past 4 years due to COVID-
19, supply chain disruptions, extreme weather events, and increasing
geopolitical conflicts. And American agriculture stands ready to assist
those in need. That's why I was pleased to see USDA announce $1 billion
through the Commodity Credit Corporation to purchase U.S. grown
commodities to support those most in need. I was surprised to hear,
however, that Ready to Use Therapeutic Foods (RUTF) is not eligible for
procurement through this funding. RUTF is a lifesaving, and cost-
effective treatment given to children suffering from the most serious
form of malnutrition, known as ``wasting''. It's made from U.S. grown
peanuts, milk, soy and sugar and sourced from 28 states. Will you
commit to review and reconsider the authorities you are using under the
Charter Act--specifically by leveraging authorities under Section
5(c)--and to provide flexibility in the list of commodities deemed
eligible under the program?
Answer. The $1 billion international food aid program relies on the
authority of section 5(d) of the CCC Charter Act (15 U.S.C. 714c(d))
for the purchase and removal of surplus commodities. RUTF is not
designated a surplus commodity, although some of its ingredients may be
in surplus. This authority was selected because of the flexibilities it
affords to USDA, such as coordinating with USAID to address the widest
variety of global food security needs, as well as its responsiveness to
domestic commodity surpluses.
While RUTF is not utilized in USDA's international food assistance
programs, it is a critical tool in USAID's humanitarian nutrition
programs. USAID has increased its support for wasting treatment
programs, and procurement of RUTF, in recent years, and building on
this experience has developed a multi-year strategic approach to
continue this support.

Question 3. Mr. Secretary, can you provide the rationale of USDA
for prohibiting certain retailers, such as vending operators and micro
markets, that meet all current stocking and other criteria despite
there being no statutory restriction?
Answer. USDA values its partnership with more than 260,000 U.S.
retailers authorized to accept Supplemental Nutrition Assistance
Program (SNAP) benefits. The diversity of SNAP retailers ensures that
program participants have a variety of shopping options, catering to
different preferences and needs. A retailer must meet several criteria
to be authorized for SNAP, including meeting minimum stocking
requirements for staple food items including cereals, fruit,
vegetables, meat, and dairy. Additionally, SNAP-authorized retailers
must be able to continuously meet SNAP payment performance functions
like providing detailed receipts and allowing refunds and product
returns for SNAP transactions. Additionally, there are integrity
requirements for authorized retailers that include ensuring that only
eligible SNAP foods are purchased using SNAP benefits and monitoring
locations to prevent SNAP violations. USDA considers all retailer
applications against our requirements and does not have any policies
explicitly prohibiting vending operators and micro markets.
Questions Submitted by Hon. Chellie Pingree, a Representative in
Congress from Maine
Inflation Reduction Act Forestry Funding
Question 1. The Inflation Reduction Act (IRA) provided $450 Million
to incentivize forest landowners to access voluntary carbon markets,
and the United States Forest Service has begun accepting applications
for a portion of this funding. Can you provide an update on where you
are with implementing the remaining provisions? Particularly how you're
working through partnerships with state agencies, nonprofit
organizations, local governments, Tribes, and universities?
Answer. The IRA, specifically Subtitle D, Sec. 23002, Competitive
Grants for Non-Federal Forest Landowners, expanded the Forest Service's
ability to support innovative projects that engage non-industrial,
private forest landowners, including underserved landowners, in
emerging private markets for forest resilience and climate mitigation.
The IRA also established an initiative to provide payments to
landowners to implement voluntary practices that enhance forest
resilience and mitigate climate change.
The Forest Service has created a series of competitive funding
opportunities to implement this authority, which were launched in 2023
and will continue to have sign-ups for their funding opportunities
later this year in 2024. The agency is funding a variety of projects in
different types of locations with different types of recipients.
Applicant eligibility is governed by statute, as discussed below.

IRA Sections 23002(a)(2) and 23002(a)(3)

The Forest Service has provided funding to enhance small landowner
participation in emerging carbon markets in several ways, consistent
with the foregoing authority.

Grant Funding for Small Landowner Participation in Emerging
Carbon Markets. The Forest Service announced its first funding
opportunity in August 2023; eligible applicants included
states, Tribes, local governmental entities, universities, and
nonprofit and for-profit entities. The agency received 76
proposals for funding totaling $528 million. In March 2024, the
Forest Service announced it had accepted proposals totaling
$116 million in grants supporting 20 projects that engage
underserved landowners and small-acreage forest landowners in
emerging carbon markets. Participating in these emerging carbon
markets will unlock private capital for forest landowners and
result in more resilient forests. Funded projects benefit
forests in 37 states and Puerto Rico. A total of $34 million in
grant funding is available; the final deadline for proposals
under $2 million is August 21, 2024.

Investments in Technical Assistance through State and
Territorial Forestry Agencies. The Forest Service allocated $29
million to state and territorial forestry agencies to enhance
technical assistance for underserved forest landowners. State
forestry agencies deploy over 3,000 foresters to educate and
serve more than 500,000 private forest landowners per year.
These certified foresters help these landowners establish
management plans to guide reforestation and other land
management activities and address threats to forest resilience
from natural disasters, pests, and disease. States and
territories maintain partnerships with conservation districts,
nonprofit entities, institutions, and extension agencies to
deliver forestry education, technical assistance, and
professional advice to underserved forest landowners. This
targeted outreach helps underserved forest landowners navigate
emerging carbon market opportunities, establish land management
plans, and implement practices to improve forest resilience
while meeting landowner objectives.

Grant Funding for Tribal Participation in Emerging Carbon
Markets. In February 2024, the agency announced a $20 million
funding opportunity for federally recognized Tribes and Alaska
Native corporations and villages to participate in emerging
carbon markets for climate mitigation and forest resilience.
The application deadline for this opportunity is August 21,
2024. The Forest Service is providing targeted technical
assistance--both directly and through partnerships with the
National Indian Carbon Coalition and First Nations Development
Institute--to Tribes and Alaska Native corporations and
villages considering this funding opportunity.

IRA Sections 23002(a)(1) and IRA 23002(a)(4)

This authority created new opportunities for the Forest Service to
provide funding to landowners to implement forest resilience and
climate mitigation practices. This summer, the Forest Service will
announce funding opportunities for the following cost-share and payment
programs:

Provision 1 (Climate Resilience/Mitigation Cost-Share
Programs). State and territorial forestry agencies will be
eligible to apply for competitive grants to administer programs
to issue cost-share payments to forest landowners for practices
that enhance forest resilience and mitigate climate change.

Provision 4 (Carbon Sequestration/Storage Payment Programs).
Expanded eligibility will allow nonprofit applicants as well as
states and territories to apply for competitive grants to
administer programs to issue payments to forest landowners to
sequester and store carbon.

The Forest Service has developed an implementation strategy for
these initiatives that engages a diversity of partners. The agency
anticipates a robust response from state and territorial forestry
agencies to the upcoming announcements of these two funding
opportunities. States will be encouraged to collaborate with partners
such as conservation nonprofit entities and underserved landowner
organizations to design and implement successful state cost-share
programs, and nonprofit applicants will be encouraged to coordinate
with states and leverage partnerships to provide quality customer
service to landowners.
Fresh Produce Access through USDA Procurement Programs
Question 2. What is the Department doing to bolster access and
improve the variety of fruits and vegetables offered through Federal
procurement programs. Are there any legislative or regulatory barriers
to address to strengthen the fruit and vegetable procurement process?
Answer. Over the course of the Biden-Harris Administration USDA has
seeking out resource enhancements to simplify and streamline access to
contracting information for businesses interested in selling their
products and services to USDA. Few on this Committee may know that USDA
purchasing actually extends well beyond agricultural commodities. Last
fiscal year, in FY 2023, the Department awarded contracts to nearly
12,000 businesses from a wide range of industries for $4.9 billion in
food, $4.2 billion in services, $1.7 billion in Information Technology
contracts, a half a billion in goods, and nearly a half billion in
construction contracts.
With respect to our work to strengthen the fruit and vegetable
procurement process, our new Local Food Purchase Assistance Cooperative
Agreement Program (LFPA) is using non-competitive cooperative
agreements to provide up to $900 million of ARP and CCC funding for
state, Tribal and territorial governments to purchase foods produced
within the state or within 400 miles of the delivery destination to
help support local, regional and underserved producers. This work is
helping to maintain and improve food and agricultural supply chain
resiliency, and ensuring that we are going to procure and distribute
local and regional foods and beverages that are healthy, nutritious,
unique to their geographic areas, and that meet the needs of the
population. The Department would be glad to further engage with you and
your office to discuss some barriers we have experienced in the
procurement process for fruits and vegetables.
Testing for Water Contaminants Rural Communities
Question 3. As you may know, Per- and polyfluoroalkyl substances
(PFAS) contamination in drinking water is a national issue. Rural
communities have historically been overlooked by Federal investments
when it comes to addressing drinking water challenges, especially those
who are dependent on private wells. What specific programs does USDA
have in place that can directly help rural homeowners who rely
exclusively on private wells to test for and mitigate harmful
contaminants like PFAS?
Answer. Through USDA RD Single Family Housing Repair Loans and
Grants (also known as the Section 504 Loan and Grant Program), very
low-income homeowners in rural areas who are unable to finance
necessary repairs through other sources may obtain direct loans or
grants to repair, improve, or modernize homes, or to remove health and
safety hazards. Testing for PFAS may be considered part of the need to
assess repairs and would be an eligible expense.
Also, through the Rural Home Loans (502 Direct Loan Program), loan
funds can be used to help low-income people or households build,
repair, renovate, or relocate a home, or to purchase and prepare sites,
including providing water and waste treatment equipment. Again, testing
for PFAS may be considered as part of the need to assess repairs and
would be an eligible expense.
RD's Water and Environmental Programs do not have a program that
can assist with private well testing. Currently, our Decentralized
Water Systems Grant Program provides grants to nonprofits that in turn
provide loans and grants for decentralized water and waste services
such as testing and well replacement.
Additionally, water utilities can seek financing through the Water
and Waste Direct program to extend centralized water services to
homeowners whose wells have been impacted by PFAS.
Questions Submitted by Hon. Salud O. Carbajal, a Representative in
Congress from California
Question 1. Congress appropriated $1.3 million through USDA for the
National Academies of Science, Engineering and Medicine to assess
research on alcohol consumption and health outcomes that were not
addressed in the 2020 Dietary Guidelines. Please explain why USDA
supports two separate work streams to serve the same purpose in
developing recommendations specific to alcohol consumption--one by the
National Academies and a second by the SAMHSA-led interagency working
group.
Answer. In early 2022, the Interagency Coordinating Committee on
the Prevention of Underage Drinking (ICCPUD), asked the Substance Abuse
and Mental Health Services Administration (SAMHSA), as the convener of
the ICCPUD, to initiate work on alcohol consumption and health as part
of a broader scientific review and annual ICCPUD report. SAMHSA is
responsible for providing administrative and operational support for
ICCPUD under authority delegated by HHS. As ICCPUD's work was getting
under way, Congress mandated USDA to enter into a contract with NASEM
to review evidence on alcoholic beverages and health, per the 2023
Consolidated Appropriations Act.
While both the NASEM and ICCPUD studies will address the
relationship between alcoholic beverages and health, there are key
distinctions between the two, including the types of outcomes being
examined and the methods being used to conduct the studies.
Specifically, the NASEM study will use systematic reviews to
examine evidence on the relationship between alcohol consumption and
health outcomes, while the ICCPUD study uses modeling to estimate
risks. Thus, these two studies will provide complementary evidence to
inform HHS and USDA as the Departments develop the next edition of the
Dietary Guidelines. Importantly, neither the NASEM or ICCPUD studies
will provide recommendations on alcohol consumption.
Both projects will include opportunities for public participation
and external scientific peer review and will be complete by the end of
December 2024. The table below provides a comparison of the two
studies.

------------------------------------------------------------------------
Study Purpose Methods
------------------------------------------------------------------------
NASEM--Review of evidence on To review, The NASEM
alcohol and health. evaluate, and study involves
https:// report on the the conduct of
www.nationalacademies.org/our- current systematic
work/review-of-evidence-on- scientific reviews
alcohol-and-health. evidence on the
relationship
between alcohol
consumption and
the following
health outcomes:
1. growth,
size, body
composition,
and risk of
overweight and
obesity
2. risk of
certain types
of cancer
3. risk of
cardiovascular
disease
4. neurocogniti
ve health
5. risk of all-
cause mortality
6. post-partum
weight loss
7. human milk
composition and
quantity
8. infant
development
milestones,
including
neurocognitive
development
------------------------------------------------------------------------
ICCPUD--Alcohol intake and To generate The alcohol
health study. evidence on intake and health
https:// weekly thresholds study will use
www.stopalcoholabuse.gov/ to minimize the following
research-resources/alcohol- health risks by methods to
intake-health.aspx. modeling cause- generate evidence
specific absolute on weekly
risk curves based drinking
on disease-, thresholds to
injury-, and minimize health
condition- risks:
specific relative
risk curves from Lifetim
cohort studies e risk modeling
from conditions to estimate the
that are thought lifetime risk
to be causally of death and
related to disability for
alcohol use different
(e.g., liver levels of
cirrhosis and average alcohol
cancer). consumption
This approach Model
aligns with the cause-specific
current practices absolute risk
of the Centers curves based on
for Disease disease-,
Control and injury-, and
Prevention, the condition-
World Health specific
Organization, and relative risk
the Institute for curves
Health Metrics Cohort
and Evaluation, studies from
when estimating conditions that
the burden of are thought to
disease be causally
attributable to related to
alcohol use. alcohol use
(e.g., liver
cirrhosis and
cancer)
------------------------------------------------------------------------

Question 2. Please explain USDA's role in overseeing and evaluating
alcohol recommendations developed by the SAMHSA-led working group.
Answer. USDA and our Dietary Guidelines partners at HHS serve in a
liaison role, where we provide information, as needed, as subject
matter experts on the Departments' needs for our development of the
next edition of Dietary Guidelines. USDA and HHS will consider the
findings from ICCPUD's Alcohol Intake and Health study,, along with the
NASEM findings, when developing recommendations related to alcohol for
the 2025-30 Dietary Guidelines for Americans.

Note: Since the hearing on February 14, 2024, ICCPUD has
continued to make progress on its Alcohol Intake and Health
Study. Specifically, ICCPUD has solicited public feedback on
the study's scientific methodology in the Federal Register and
held a public annual stakeholder meeting to provide an update
on the study and provide an opportunity for public feedback.
Importantly, neither the ICCPUD study nor the NASEM study will
provide recommendations on adult alcohol consumption. Rather,
ICCPUD and NASEM each will provide a report with findings to
HHS and USDA for consideration as the Departments develop the
next edition of the Dietary Guidelines for Americans.

Question 3. Will USDA actively review and assess recommendations
developed by the SAMHSA-led interagency working group and how will USDA
work with HHS to ensure that any recommendations are developed free of
conflicts of interest?
Answer. USDA notes that following the hearing on February 14, 2024,
ICCPUD has continued to make progress on its Alcohol Intake and Health
Study. Specifically, ICCPUD has solicited public feedback on the
study's scientific methodology in the Federal Register and held a
public annual stakeholder meeting to provide an update on the study and
provide an opportunity for public feedback. Importantly, neither the
ICCPUD study nor the NASEM study will provide recommendations on adult
alcohol consumption. Rather, ICCPUD and NASEM each will provide a
report with findings to HHS and USDA for consideration as the
Departments develop the next edition of the Dietary Guidelines for
Americans.

Question 4. Federal law requires that the preponderance of
scientific and medical knowledge must support changes to the existing
Dietary Guidelines recommendations. No changes can be made without
clearly showing that the preponderance of scientific and medical
knowledge supports each change. How is the SAMHSA-led technical
committee ensuring that this mandate by Congress is followed as it
reviews research and drafts recommendations?
Answer. The Alcohol Intake and Health studies will be completed by
experts with experience conducting meta-analyses, relative risk
estimates, and systematic reviews related to alcohol intake and health.
The studies will assess the current, best, and most applicable
scientific evidence on the relationship between consumption of alcohol
and health outcomes using methodological approaches that are grounded
in rigorous scientific evidence and follow best practices. More
information about the methods and study protocols are available on
ICCPUD's website.\19\ Additionally, the methods and findings from the
review of the evidence on alcohol intake and health will undergo a
rigorous review process, including scientific external peer review and
opportunities for public comment. HHS and USDA will ensure that the
Dietary Guidelines recommendations will be based on the preponderance
of scientific and medical knowledge.
---------------------------------------------------------------------------
\19\ https://www.stopalcoholabuse.gov/media/pdf/Alcohol-Intake-and-
Health-Methodology-for-Public-Comment.pdf.

Question 5. How is USDA ensuring that the scientific review process
underway by the SAMHSA-led working group mirrors the Dietary Guidelines
Advisory Committee process in its research procedures and protocols,
commitment to transparency, preclusion of conflicts of interest and
willingness to invite comment from interested public stakeholders?
Answer. To ensure transparency and opportunity for public comment,
ICCPUD has created multiple opportunities for public comment on the
Alcohol Intake and Health Study, as well as a public meeting with
interested stakeholders as part of the annual ICCPUD Stakeholders
meeting. First, ICCPUD solicited public comments during the summer of
2024 on the scientific methodology and study protocols of the Alcohol
Intake and Health Study. This request for comment was posted to the
public docket OASH maintains on the Dietary Guidelines. Second, there
will be an opportunity in late 2024 for public comment on the draft
study outcomes. In addition, on August 7, 2024, the ICCPUD convened its
annual stakeholders meeting which was open to the public. During this
meeting, ICCPUD members provided updates on the Alcohol Intake and
Health Study. It is also worth noting that information is updated on
the ICCPUD website to ensure transparency throughout the process. The
findings will also undergo a rigorous external review process that will
include scientific peer review and opportunities for public comment.
Further, all Technical Review Subcommittee members and external
subject matter experts involved in the Alcohol Intake and Health Study
are required to declare sources of funding (direct or indirect) and any
connection (direct or indirect) with the tobacco, alcohol, cannabis, or
pharmaceutical industries, including any connection (direct or
indirect) with any entity that is substantially funded by one of these
organizations. This process is included in the 2023 ICCPUD
Comprehensive Plan. Biographies and financial disclosures for the
members of the Scientific Review Panel are available on ICCPUD's
website.

Question 6. Will the work of the National Academies and
recommendations developed by the SAMHSA-led interagency group be
considered for inclusion in the 2025 Dietary Guidelines? If not, please
explain how any alcohol policies will be reported to consumers, the
medical community and interested stakeholders.
Answer. The NASEM study pre-publication report is expected December
2024. The ICCPUD Technical Review Subcommittee findings will be
published as part of the ICCPUD's 2025 Report to Congress on the
Prevention and Reduction of Underage Drinking as required by Congress.
This timeline will allow for both projects to be considered in the
development of guidance on alcoholic beverages and health to be
included in the next edition of the Dietary Guidelines.

Question 7. Will alcohol policies and recommendations remain part
of future Dietary Guidelines or will they be part of a separate process
and which agency will lead that effort?
Answer. USDA and HHS have not made plans to exclude alcohol
consumption and health from future editions of the Dietary Guidelines
for Americans.

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