[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]




    THE FUTURE OF U.S. FARM POLICY: FORMULATION OF THE 2012 FARM BILL

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

                                HEARINGS

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               ----------                              

                    MARCH 9, 2012, SARANAC LAKE, NY
                     MARCH 23, 2012, GALESBURG, IL
                  MARCH 30, 2012, STATE UNIVERSITY, AR
                     APRIL 20, 2012, DODGE CITY, KS

                               ----------                              

                           Serial No. 112-30

                               ----------                              

                                 Part 1

                               ----------                              






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



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











   THE FUTURE OF U.S. FARM POLICY: FORMULATION OF THE 2012 FARM BILL

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

                                HEARINGS

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                    MARCH 9, 2012, SARANAC LAKE, NY
                     MARCH 23, 2012, GALESBURG, IL
                  MARCH 30, 2012, STATE UNIVERSITY, AR
                     APRIL 20, 2012, DODGE CITY, KS

                               __________

                           Serial No. 112-30

                               __________

                                 Part 1

                               __________






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




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

                                _____

                  U.S. GOVERNMENT PRINTING OFFICE

74-371 PDF                WASHINGTON : 2012
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                        COMMITTEE ON AGRICULTURE

                   FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois         TIM HOLDEN, Pennsylvania
STEVE KING, Iowa                     MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas              LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas            JOE BACA, California
JEFF FORTENBERRY, Nebraska           DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio                   DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania         HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida            JIM COSTA, California
MARLIN A. STUTZMAN, Indiana          TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia                LARRY KISSELL, North Carolina
SCOTT R. TIPTON, Colorado            WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida        CHELLIE PINGREE, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  JOE COURTNEY, Connecticut
MARTHA ROBY, Alabama                 PETER WELCH, Vermont
TIM HUELSKAMP, Kansas                MARCIA L. FUDGE, Ohio
SCOTT DesJARLAIS, Tennessee          GREGORIO KILILI CAMACHO SABLAN, 
RENEE L. ELLMERS, North Carolina     Northern Mariana Islands
CHRISTOPHER P. GIBSON, New York      TERRI A. SEWELL, Alabama
RANDY HULTGREN, Illinois             JAMES P. McGOVERN, Massachusetts
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin
KRISTI L. NOEM, South Dakota

                                 ______

                           Professional Staff

                      Nicole Scott, Staff Director

                     Kevin J. Kramp, Chief Counsel

                 Tamara Hinton, Communications Director

                Robert L. Larew, Minority Staff Director

                                   ii

















                             C O N T E N T S

                              ----------                              
                                                                   Page

                         Friday, March 9, 2012

Gibson, Hon. Christopher P., a Representative in Congress from 
  New York, opening statement....................................     6
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, 
  opening statement..............................................     1
    Prepared statement...........................................     3
Owens, Hon. William L., a Representative in Congress from New 
  York, opening statement........................................     5
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................     6
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................     4

                               Witnesses

Ooms, Eric, dairy producer; Partner, Adrian Ooms & Sons, Inc., 
  Old Chatham, NY................................................     7
    Prepared statement...........................................     8
Rea, Neal, dairy producer; Chairman of the Board, Agri-Mark Dairy 
  Cooperative, Salem, NY.........................................    10
    Prepared statement...........................................    12
Verratti, Jeremy L., dairy and crop producer, Verratti Farms, 
  LLC, Gasport, NY...............................................    15
    Prepared statement...........................................    17
Ledoux, Michele E., beef producer, Adirondack Beef Company, 
  Croghan, NY....................................................    18
    Prepared statement...........................................    21
Eckhardt, Larry, vegetable, field crop, and beef producer; 
  President, Kinderhook Creek Farm, Inc., Stephentown, NY........    38
    Prepared statement...........................................    41
Osborn, Scott, wine grape producer; President, Fox Run Vineyard, 
  Inc., Penn Yan, NY.............................................    43
    Prepared statement...........................................    45
Child, Ralph, seed potato and leafy greens producer; Owner/
  Operator, Childstock Farms, Inc., Malone, NY...................    46
    Prepared statement...........................................    48
Sullivan, Adam F., apple producer; Orchard Foreman, Sullivan 
  Orchards, Inc., Peru, NY.......................................    51
    Prepared statement...........................................    53

                         Friday, March 23, 2012

Boswell, Hon. Leonard L., a Representative in Congress from Iowa, 
  opening statement..............................................    73
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, 
  opening statement..............................................    71
    Prepared statement...........................................    72
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................    77
Schilling, Hon. Robert T., a Representative in Congress from 
  Illinois, opening statement....................................    75
    Prepared statement...........................................    76

                               Witnesses

Erickson, David C., corn and soybean producer, Altona, IL........    78
    Prepared statement...........................................    80
Moore, Deborah L., corn, soybean, and beef producer, Roseville, 
  IL.............................................................    81
    Prepared statement...........................................    83
Mages, John, corn and soybean producer, Belgrade, MN.............    85
    Prepared statement...........................................    86
Gerard, Blake, rice, soybean, wheat, and corn producer, McClure, 
  IL.............................................................    87
    Prepared statement...........................................    88
Adams, Craig, corn, soybean, wheat, hay, and beef producer, 
  Leesburg, OH...................................................    94
    Prepared statement...........................................    95
Williams, John, sorghum, corn, wheat, and soybean producer, 
  McLeansboro, IL................................................   108
    Prepared statement...........................................   110
Asay, Gary, pork, corn, and soybean producer, Osco, IL...........   112
    Prepared statement...........................................   113
Davis, Terry, corn and soybean producer, Roseville, IL...........   118
    Prepared statement...........................................   120
Howell, David W., corn, soybean, pumpkin, and tomato producer, 
  Middletown, IN.................................................   122
    Prepared statement...........................................   124
Weber, Jane A., specialty crop producer, Bettendorf, IA..........   125
    Prepared statement...........................................   127

                         Friday, March 30, 2012

Crawford, Hon. Eric A. ``Rick'', a Representative in Congress 
  from Arkansas, opening statement...............................   141
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, 
  opening statement..............................................   139

                               Witnesses

Brantley, L. Dow, rice, cotton, corn, and soybean producer, 
  Brantley Farming Company, England, AR..........................   142
    Prepared statement...........................................   144
Veach, Randy, cotton, rice, corn, wheat, and soybean producer, 
  Manila, AR.....................................................   148
    Prepared statement...........................................   151
Combs, Paul T., rice, soybean, cotton, corn, and wheat producer; 
  President, Sunrise Land Company, Kennett, MO...................   153
    Prepared statement...........................................   155
Flowers, Jr., Richard Bowen, cotton, corn, soybean, wheat, and 
  rice producer, Clarksdale, MS..................................   159
    Prepared statement...........................................   160
Burch, Tim, cotton and peanut producer, Burch Farms, Newton, GA..   162
    Prepared statement...........................................   164
Hundley, David C., rice, corn, and soybean producer, Jonesboro, 
  AR.............................................................   173
    Prepared statement...........................................   174
Freeze, Thomas Michael ``Mike'', aquaculture producer; Co-Owner, 
  Keo Fish Farm, Keo, AR.........................................   176
    Prepared statement...........................................   178
Stewart, Dan, cow/calf producer, Mountain View, AR...............   184
    Prepared statement...........................................   185
Owen, John E., rice, soybean, corn, and cotton producer, John and 
  Annie Owen Farms, Rayville, LA.................................   186
    Prepared statement...........................................   188
Corcoran, Jr., Walter L., cotton, corn, peanut, soybean, grain 
  sorghum, and cow/calf producer, Eufaula, AL....................   191
    Prepared statement...........................................   193

                         Friday, April 20, 2012

Huelskamp, Hon. Tim, a Representative in Congress from Kansas, 
  opening statement..............................................   205
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, 
  opening statement..............................................   203

                               Witnesses

Harshberger, Gary, corn, wheat, milo, soybean, and cow/calf 
  producer, Dodge City, KS.......................................   206
    Prepared statement...........................................   208
Miller, Keith, wheat, sorghum, corn, soybean, and cow/calf 
  producer, Great Bend, KS.......................................   210
    Prepared statement...........................................   211
Vaughan, Dee, corn, cotton, sorghum, soybean, and wheat producer, 
  Dumas, TX......................................................   214
    Prepared statement...........................................   215
Neufeld, Scott, wheat, sorghum, canola, alfalfa, and cow/calf 
  producer, Fairview, OK.........................................   220
    Prepared statement...........................................   222
Swanson, Terry, corn, wheat, sorghum, sunflower, and cow/calf 
  producer, Walsh, CO............................................   226
    Prepared statement...........................................   227
Harper, Frank, corn, soybean, wheat, sorghum, and cow/calf 
  producer, Sedgewick, KS........................................   236
    Prepared statement...........................................   238
Hodgson, Kendall, wheat, soybean, corn, sorghum, alfalfa, and 
  cow/calf producer, Little River, KS............................   243
    Prepared statement...........................................   244
Giessel, Thomas ``Tom'' Gerard, wheat, corn, sorghum, soybean, 
  alfalfa, and cow/calf producer, Larned, KS.....................   246
    Prepared statement...........................................   247
Anderson, Woody, cotton and wheat producer, Colorado City, TX....   258
    Prepared statement...........................................   260
Hunnicutt, Zachary, corn, soybean, and popcorn producer, Aurora, 
  NE.............................................................   262
    Prepared statement...........................................   264

                                Appendix
   Compilation of Responses to Farm Bill Feedback Questionnaire, 2012


Ms. Maya.....................       275     Abate,                 275
                                             Christina.
Abbott, Debra................       275     Abersold,              275
                                             Barbara.
Abeyta, Santos...............       275     Abrahamson, Jon        276
                                             B..
Abrams, Beth.................       276     Acker, Bonnie..        276
Acker, Sheila J..............       276     Ackoff, Sophie.        277
Actor-Thomas, Roberta........       277     Acuzzo, Richard        277
Adams, Audrey................       278     Adams, Brenda..        278
Adams, Constance.............       278     Adams, Glory...        279
Adams, Joyce.................       279     Adams, Judith..        279
Adams, Lisa..................       279     Adams, Marina..        280
Adams, Martha................       280     Adams, Nancy...        280
Adams, Shirley...............       281     Adams, Tiffany.        281
Adamsky, Kathryn.............       281     Adell,                 281
                                             Balthasar.
Adels, Jonah.................       281     Adessa, Carolyn        282
Adirondack Council,..........       282     Adkin, John....        283
Adkins, Janet................       283     Adler, Stephen.        283
Agnew, Louis D...............       284     Aguilar, Ann...        284
Aguilar, Isabel..............       285     Ahmad,                 285
                                             Basheerah.
Ahmed, Maimoona..............       285     Ahring, Tracey.        285
Aiken, Debbra................       286     Ainslie, James.        286
Aja-Sigmon, Rev. David.......       287     Albach, Fred...        287
Albarado, Carrie.............       287     Albee, Robert..        287
Alcoba, Jaime................       288     Alexander, Dawn        288
Alexander, Elizabeth.........       288     Alexander,             288
                                             Simone.
Alexandra, Peseri............       288     Alford-Hodges,         288
                                             Suzanne.
Alioto, Michelle.............       289     Allemier, Mary.        289
Allen, Barbara...............       289     Allen,                 289
                                             Christina.
Allen, Diann.................       290     Allen, Jerrold         290
                                             E..
Allen, Jonathan..............       290     Allen, Lynn....        290
Allen, Marie K...............       291     Allen, Matt....        291
Allen, Mitchell..............       291     Allen, Trisha..        291
Allen, Whitney...............       291     Alloway, Dr.           292
                                             John.
Allred, Miriam...............       292     Almeida,               292
                                             Katherine.
 Altemose, Mike...............       292     Altman, Andrew.        292
Altman, Armand...............       292     Altom, Billy...        292
Alvarado, Jose...............       293     Alvarado, Jose         294
                                             D..
Alvarez, Ana.................       294     Alvarez,               294
                                             Margarita.
Alvarez, Veronica............       295     Amdahl, Erv....        295
Ame, Sharilyn................       295     American Jewish        295
                                             World Service,
                                             et al..
Ammirati, Gary...............       297     Amory, James...        297
Amsler, Laurie...............       298     Amyx, September        298
Anderson, Amy................       298     Anderson,              298
                                             Caroline.
Anderson, Carolyn............       299     Anderson,              299
                                             Christopher J..
Anderson, Dae................       299     Anderson,              299
                                             Elizabeth.
Anderson, Eric...............       299     Anderson, Gail.        300
Anderson, Glen...............       300     Anderson, Joy..        301
Anderson, Leonora............       301     Anderson,              301
                                             Marilyn.
Anderson, Mark...............       301     Anderson,              301
                                             Nathanial.
Anderson, Raymond............       302     Anderson,              303
                                             Regina.
Anderson, Robert.............       303     Anderson,              303
                                             Sharon.
Anderson, Shel...............       303     Anderson,              304
                                             Sylvia.
Andis, Corlissa..............       304     Andreas, Darian        304
Andrews, Caroline............       304     Andrews, David.        304
Andrews, Elaine..............       304     Andrews, Yvonne        305
Angel, Jan...................       305     Angell, Donald.        305
Angstadt, Karen..............       305     Angstreich,            306
                                             Natalie.
Anson, Jennifer..............       306     Anthony, Cheryl        307
Antone, Jamie................       307     Appel, Beth....        307
Applegate-Rodeman, Sally.....       307     Arbuckle, Lisa.        307
Arends, Lisa.................       308     Argue, Robert..        308
Arie, Alto...................       308     Arjuna, Shivani        309
Arlt, Andrew.................       309     Arman, Casey...        309
Armijo, Ken..................       310     Armstrong,             310
                                             Katharine.
Armstrong, Robin.............       310     Armstrong,             310
                                             Stanley.
Armstrong, Susan.............       310     Armstrong,             310
                                             Vivienne.
Armstrong, Wanda.............       311     Arnold, Gail...        311
Arnold, Laura................       311     Arns, Matt.....        311
Aronson, Adam................       311     Arpin, Nancy...        312
Arra, Melissa................       312     Artzt, Alice...        312
Arvidson, LTC Mark...........       312     Arwen, Elicia..        312
Jasmin Arzate................       313     John Asadourian        313
Ash, Muareen.................       313     Asher, Evelyn..        313
Ashley, Margaret.............       313     Ashton, Gerrard        314
Ashwood, Janice..............       314     Askew, Michael.        314
Association of Kansas Food          314     Atherlay, Mark.        317
 Banks.
Atkinson, Mary...............       317     Atwal, Gurunam.        317
Aubrey, Frances..............       317     Auerbach,              317
                                             Marisha.
Augello, Darcy...............       318     Aulicino,              318
                                             Richard.
Auman, Rick..................       318     Austin, Carol..        318
Austin, Lesley...............       318     Austin, Richard        318
Austin, Shelly...............       319     Avanti,                319
                                             Annemarie.
Avidor, Roberta..............       319     Ayers, Frank...        319
Ayers, Harold................       319     Ayoob, Carol...        320
Azagoh-Kouadio, Benoit.......       320     B., Tatiana....        320
Babb, Yvonne.................       321     Babin, Michelle        321
Babitch, Lia.................       322     Bach-Mitchell,         322
                                             Bonnie.
Backup, Peggy................       322     Bacon, Crystal.        323
Bacon, David.................       323     Bacon, Pat.....        323
Bacon, Taylor................       323     Bacon, Willard.        323
Baehr, Birke.................       323     Baehr, Patricia        324
Baer, Nancy..................       324     Baginski, Ron..        324
Bagwell, Hayley..............       324     Bahl, Freddah..        324
Bailey, B....................       325     Bailey, Larissa        325
Bailey, Marcia...............       325     Bailey, Melissa        325
Bailey, Tina.................       325     Bailey, Vicki..        325
Bailin, Bobbi................       326     Baird, Alta....        326
Baird, Martha................       326     Baise, Michael.        326
Baker, Anita.................       326     Baker,                 327
                                             Catherine.
Baker, Cynthia...............       327     Baker, Jennifer        327
Baker, Kathleen..............       327     Baker, Keith...        327
Baker, Melanie...............       327     Baker, Nancy...        328
Baker, Patricia..............       328     Baker Ingham,          328
                                             Rosalyn.
Baker-Trinity, Jennifer......       328     Bakhsh, Jeri...        328
Bakke, Susan.................       328     Balduff, Nora;         328
                                             on behalf of
                                             Lisa Hamler-
                                             Fugitt.
Baldwin, Mary................       331     Ballard, Bessie        331
Ballentine, Eusebius.........       331     Bandfield, Anna        332
Banham, Betty................       332     Banister, Gene.        332
Banks, Brian.................       332     Bannerman,             333
                                             Carter.
Bannion, Lynnet..............       333     Bansfield,             333
                                             Matthew.
Banta, Margaret G............       334     Barach, Daniel.        334
Barbara, Marsh...............       334     Barber, Kyle...        334
Barbero, Kiley...............       334     Bardo, Jeannine        334
Barile, Genevieve............       335     Barker, Cate...        335
Barker, Dwinna...............       335     Barksdale,             335
                                             Timothy R..
Barnett, Claire..............       336     Barnett, Tracy.        336
Barney, Tom..................       336     Barr, Debbie...        336
Barr, Roger..................       336     Barre, Lisha...        336
Barrio, Carlos...............       337     Barry, Barbara.        337
Barry, Kathryn...............       337     Barta, Kenneth.        337
Bartell, Bob.................       337     Bartell, Lee...        337
Bartels, Richard.............       338     Barton, Kathy..        338
Baruch, Duncan...............       338     Baruth, Alma...        338
Basche, Andrea...............       338     Basden, Stuart.        338
Basler, Jane.................       339     Bason, Carol...        339
Bastone, Virginia............       339     Batchelor,             339
                                             Annette.
Bates, Diane.................       339     Battreal,              340
                                             Jackie.
Bauer, Berenice..............       340     Bauer, Chante..        340
Bauer, Katya.................       340     Bauer, Leslie..        340
Bauer, Rachel................       341     Baum, Helen C..        341
Bauman, Gail.................       341     Baumann, Joseph        341
Baumgartner, Susan...........       342     Baumstein, Jenn        342
Baxter, Adrienne Moore.......       342     Baxter, Jessica        342
Bayes, Sandra................       343     Beach, Laura...        343
Beane, David.................       343     Beattie, George        343
Beaubien, Kathleen...........       343     Beaubier,              343
                                             Gretchen.
Beaudreau, Mallory...........       344     Beaulieu, Kathy        344
Beazlie, Janet...............       344     Beck, Daniel...        345
Beck, Marylin................       345     Becker, Diane..        345
Becker, Elaine...............       345     Beckman,               345
                                             Elizabeth.
Bednar, Deanne...............       345     Bedwell, Barry.        346
Bee, Dianne..................       349     Beebee, Kara...        349
Beers, Judy & Doug...........       349     Beetz, Alice...        349
Beg, Linda...................       349     Behrend, Bill..        350
Behrens, Carla...............       350     Behrens, Kate..        350
Beirise, Peggy...............       350     Belanger,              350
                                             Michelle.
Belgum-Blad, Daniel..........       351     Bell, Judith...        352
Bellini, Cynthia.............       353     Belseth,               353
                                             Stephanie.
Belveal, Barrett.............       353     Bembenek, Anne.        353
Ben-David, Roni..............       356     Bender, Emily..        357
Bender, Nancy................       357     Bendrah, Oebm..        357
Benedict, Crista.............       357     Benner, Al.....        358
Bennett, Allisa..............       358     Bennett,               358
                                             Matthew.
Bennett, Stacey..............       358     Bennett,               358
                                             Virginia.
Benoit, Peyton...............       359     Benson, Erle...        359
Benson, Gaynell..............       359     Benson-Merron,         359
                                             Josh.
Bent, Charles................       359     Bentley, Mary..        360
Berbatov, Dimitar............       360     Berd, Linda....        360
Bereczki, Patricia...........       360     Beresniewicz,          360
                                             Alex.
Berg, Abigail................       361     Berg, Pamela...        361
Berg, Paula..................       361     Berg, Peter....        361
Berger, By...................       361     Berger,                362
                                             Christine.
Berger, Janna................       362     Bergeron,              362
                                             Janice.
Bergman, Audra...............       362     Bergman,               362
                                             Deborah.
Berkowitz, Henry.............       363     Berlepsch,             363
                                             Janice.
Berman, Marcia...............       363     Berman, Susan..        363
Bernhardt, Hannah K..........       363     Bernson, Janet.        364
Bernstein, Simon.............       364     Berrt, Sharon..        364
Berry, Amanda................       364     Berry, Ana.....        364
Berry, Ben...................       365     Berry,                 365
                                             Catherine.
Berry, Michael...............       365     Berryhill, J.          365
                                             Ellen.
Best, Bill...................       365     Best, Cheryl...        366
Best, Vicki..................       366     Bethel, Linda..        366
Bethel, Skye Lindanne........       366     Beville, Ramona        366
Bianco, Sally................       367     Bias, Ronnie...        367
Bicking, Andy................       367     Bidstrup,              369
                                             Elaine.
Biedermann, Laurel...........       369     Biedron, Lauren        369
Bienvenu, Wendy..............       370     Biergiel, Jody.        370
Bierko, Elizabeth............       370     Bierle, Kory...        370
Bierma, Daniel...............       370     Biernbaum, John        371
Bigler, John.................       371     Bigman, Jeff...        371
Bilger, Mike.................       371     Biliske,               373
                                             Elizabeth.
Billbrough, Kelly............       373     Billings,              373
                                             Lauren.
Bingham, Charles.............       373     Bingham, John..        374
Birch, Harold................       374     Birdwell,              374
                                             Walter.
Bischoff, Jason..............       374     Bishop, Melissa        375
Bishop, Scott................       375     Black, Janet...        375
Black, Laurie................       375     Black, Paul....        375
Black, Sylvia................       375     Blackburn,             376
                                             Taneeka.
Blackowiak, Alloise..........       376     Blake, Carolyn.        376
Blakemore, Sally.............       376     Blanc, Kathleen        377
Blanchard, Lydia.............       377     Blank, Kathleen        377
Blanning, Nancy..............       377     Blau, Richard &        377
                                             Valarie.
Blaustein, Philip............       378     Blaustein-             378
                                             Rejto, Daniel.
Blauw, Donna.................       379     Blevins, Brenda        379
Blindow, Melissa.............       379     Bliss, Charles         380
                                             D..
Blitzstein, Lear.............       380     Blomquist,             380
                                             Laurel.
Blood, Larry.................       380     Bloom, Cheryl..        380
Bloom, William...............       381     Blovits,               381
                                             Jeffrey.
Blow, Elizabeth..............       381     Blumer, Jared..        381
Blyweiss, Megan..............       382     Bneolken, Mark.        382
Boatner, Natalie.............       382     Boaz-Shelley,          382
                                             Sarah.
Bobick, Roxanne..............       382     Bobo, Clare....        383
Bochantin, Leona.............       383     Bodde, Mary....        383
Boe, Catherine...............       383     Boeke, Diana...        383
Boettcher, Robert............       384     Bohr Jacob,            384
                                             Jill.
Boles, Samuel................       384     Bolognani,             384
                                             Christy.
Bolz, Mary...................       384     Bona, Victoria.        385
Bond, Elizabeth..............       385     Bond, S........        385
Bonilla, Michael.............       385     Bonini, Allen..        386
Bonk, Angela.................       386     Bonney, Patty..        386
Bonsignore, Andrea...........       386     Boone, Barbara.        386
Booth, Malcolm...............       386     Boothman-              387
                                             Shepard,
                                             Nicole.
Booz, Martha.................       387     Bordagaray,            387
                                             Margaret.
Border, Nathan...............       387     Bordin, Claudia        388
Boreyko, Andrew..............       388     Borgerding, Joe        388
Borgerding, Joyce............       388     Borkton,               388
                                             Raymond.
Borrell, Geraldine...........       388     Bosch, Michael         389
                                             Angelo.
Bosch, Pamela................       389     Bosschieter, H.        389
                                             Adam.
Bostian, Heather.............       389     Botticello,            389
                                             Luke.
Boucher, Victoria............       390     Bouillon,              390
                                             Dominique.
Boulay, Katherine............       390     Bourdon, Paul..        390
Bova, Steve and Cynthia......       391     Bowen, Andrea..        391
Bowen, Laura.................       391     Bowers, Kathryn        391
Bowler, Sarah................       392     Bowman, Andrew.        392
Bowman, Cecilia..............       392     Bowron, Alice..        393
Boyajian, Polly..............       393     Boyce, Nancy...        393
Boyer, Allen.................       393     Boylan,                393
                                             Elizabeth.
Boyle, Stephen...............       393     Boynton, Alanna        394
Braathen, Kent...............       394     Bracken-Hodge,         394
                                             Denise.
Bradbeer, Wilma..............       394     Bradeen, Jaska.        395
Braden, Les..................       395     Braden, Lynne..        395
Bradford, Kathryn............       396     Bradshaw,              396
                                             Eileen.
Brady, Susan.................       396     Brahmbhatt,            396
                                             Yasmin.
Brain, Amy...................       396     Brainerd, Tim..        396
Brake, Angie.................       397     Braley, Doris..        397
Brandariz, Anita.............       397     Brands, Carissa        397
Brandt, Emma.................       397     Brandt,                398
                                             Kimberly.
Brandt, Nancy................       398     Brannigan,             398
                                             Jeanne.
Brannin, Mike................       398     Bransford, Tami        398
Brantley, Lynn...............       399     Bratton,               399
                                             Katherine.
Braun, Joan..................       399     Braun, K.......        399
Braun, Stephan...............       400     Brauner, Jim...        400
Braun-Greiner, Kolya.........       400     Braverman,             400
                                             Jennifer.
Brazell, Denise..............       400     Brazil, Allison        400
Breeden, Robert..............       401     Brees, April...        401
Breneman, Nadine.............       401     Brennan, Don...        401
Brenner, Rick................       401     Brennick,              402
                                             Judith.
Bresnan, L...................       402     Bressie,               402
                                             Jeannine.
Bressler, Alexis.............       402     Breton, Nina...        403
Brewster, Marcie.............       403     Briand, Roger..        403
Brians, Ella.................       403     Brietzke,              403
                                             Adrienne.
Brigham, Cathy...............       404     Brigham, Daniel        404
Brill, Gail..................       404     Brines, Shannon        407
Brinkman, Kathi..............       407     Brinkmeier,            407
                                             Gail.
Broadhead, Susan.............       408     Brodersen,             408
                                             Bonnie.
Broerman, Kimberly...........       408     Bronkhorst,            409
                                             Dianne.
Brooke, Indee................       409     Brooks, Robert.        409
Brooks, Serena...............       410     Brooks, T.J....        410
Broome, Claire...............       410     Brouillet,             410
                                             Louis.
Broussard, James R...........       410     Browdy, Lisa...        411
Brower, Ryan.................       411     Brown, Angela..        411
Brown, Bonnie................       411     Brown, Cameron.        411
Brown, Carl..................       412     Brown, Carol...        412
Brown, Cynthia M.............       412     Brown, Gary....        413
Brown, Heather...............       413     Brown, Inga....        413
Brown, Jami..................       414     Brown, Jennifer        414
Brown, Kimberly..............       414     Brown, Nicole..        414
Brown, Roderick..............       414     Brown, Sheila..        414
Brown, Theresa...............       415     Brown, Victoria        415
Browne, R.J..................       415     Browne, Timothy        415
Browning, Brenda.............       415     Brown-Patrick,         416
                                             Lori.
Bruinsma, Patricia...........       416     Bruns,                 416
                                             Christina.
Bruynseels, Eric.............       417     Bruynseels, Leo        417
Bruynseels, Louise...........       417     Bryan, Alex....        417
Bryan, Marjory...............       418     Bryan, MaryAnn.        418
Bryant, Brit.................       418     Bryant, Ellen..        418
Bryant, Emily................       418     Bryant, Russell        419
Bryen, Bedzaida..............       419     Bryenton, Helen        419
Buchanan, Betty..............       419     Buchanan, Wade.        420
Buck, Cathy..................       420     Buck, Sherman..        420
Buckley, Alexis..............       421     Buckner, Paula.        421
Buczynski, Beth..............       421     Budde, Susan...        422
Buford, Jennifer.............       422     Buhn, Elise....        422
Buhr, Rita...................       422     Bulger, Michael        423
Bulleit, Jennifer............       423     Bullock,               423
                                             Lindsay.
Bultedaob, Jane..............       423     Bulten, Penny..        423
Bunker, Suzanne..............       423     Bunkers, Laurel        424
Burbridge, Jim...............       424     Burd, Melinda..        424
Burden, Henry................       424     Burden, Susan..        424
Burger, Janis................       424     Burgess, Ben...        425
Burgess, Sharron.............       425     Burkard, Peter.        425
Burke, Frances...............       425     Burke, Moira...        426
Burley, David................       426     Burnett, Retha.        426
Burns, Deborah...............       426     Burns, Edward..        427
Burns, George................       427     Burns, Jeff....        427
Burns, Scott.................       427     Buron, Sr.,            428
                                             IHHP, Michael
                                             R..
Burrell, Kelly...............       428     Burrow, Kathy..        428
Burrows, Mary................       428     Burstein, Alan.        429
Burstein, Mimi...............       429     Burton, Gerri..        429
Burton, Kate.................       429     Burwinkel, Mark        429
Bush, Jeff...................       430     Bush, Sarah....        430
Bushley, Bryan...............       430     Bushnell,              430
                                             Martha W.D..
Busler, Niles................       430     Buswell, Justin        431
Butler, Alison...............       431     Butler,                431
                                             Christin.
Butler, Elizabeth............       431     Butler, Lisa...        431
Butler, Rebekah..............       431     Butler, Shelby.        432
Butterfield, Lisa............       432     Buzzard, Lisa..        432
Byers, Robert................       432     Byrne, Dorothy.        432
Byrne, Mary Jane.............       433     C., M..........        433
C., R........................       433     Cabanaw, Judith        433
Cadorette, Sarah.............       433     Cady, Deborah..        433
Cafferata, Elisa.............       434     Caldwell, Ariel        434
Caldwell, Constance..........       434     Callaway, James        434
Callow, Tracy................       434     Calloway,              435
                                             Roderick.
Caltvedt, Lester.............       435     Calvani,               435
                                             Dorothy.
Camera, Christopher..........       435     Cameron, Annika        436
Cameron, Christopher.........       436     Cameron, Karen.        436
Cameron, Sally...............       436     Cammon, C.H....        436
Camp, David..................       437     Campbell,              437
                                             Benita.
Campbell, C. Martin..........       437     Campbell, Holly        438
Campbell, Sue................       438     Campbell, Susan        438
Camper, Cleraine.............       439     Canright, Mark.        439
Canter, Margaret.............       439     Cantor-Navas,          440
                                             Judy.
Cantwell, Pat................       440     Caplan, Elise..        440
Caponi, Nancy................       440     Capriotti-May,         440
                                             Carole.
Carden, Noel.................       440     Cardenas, Katie        441
Cardenas, Melina.............       441     Cardwell, Tonya        441
Carey, Anne..................       441     Carey, Doris...        442
Carlat, Theodore.............       442     Carlile, Andrew        442
Carlson, Drew................       442     Carlson, Gwenna        442
Carlson, Stacey..............       443     Carnahan,              443
                                             Florence.
Carney, Starr................       443     Carolan,               443
                                             Barbara.
Carolus, Kenneth.............       443     Caron, Dr.             444
                                             Lorraine.
Carosella, Deborah...........       444     Carosella, John        444
Carpenter, Amy...............       445     Carpenter, Sue.        445
Carr, Carol..................       445     Carr, Irene....        446
Carr, Sarah..................       446     Carrier,               446
                                             Cynthia.
Carrillo, Shekinah...........       446     Carroll, Linda.        447
Carroll, Mike................       447     Carroll, Scott.        447
Carroll, Susan...............       447     Carta, Andrea..        447
Carter, Beth.................       447     Carter, Kathy..        448
Carter, Marjorie.............       448     Cartwright,            448
                                             Marion.
Caruso, Beth.................       448     Casale, Kate...        449
Casper, Kim..................       450     Cassels, Jen...        450
Casteel, Tammy...............       450     Castellini,            450
                                             John.
Castillo, Julie..............       450     Castle, K.A....        450
Castleforte, Brian...........       451     Castner,               451
                                             Elizabeth.
Castro, Laura................       451     Catalina,              452
                                             Morgan.
Catalino, Anthony............       452     Catrambone,            452
                                             Elizabeth.
Caudill, Richard.............       452     Causey, Mark...        452
Cavender, Lisa...............       452     Caya, Toni.....        453
Cecena, Rebecca..............       453     Cecil, Emily...        453
Cederlind, Amy...............       453     Cenatiempo,            454
                                             Mona.
Center for Rural Affairs.....       454     Cerino, Noreen.        490
Cernie, Sally................       490     Chaisson,              490
                                             Barbara.
Chamberlain, Beverly L.......       490     Chamberlain,           491
                                             Donna.
Chamberlin, Erika............       491     Chambers, Dave.        491
Champagne, MarshaLee.........       492     Chang, Claire..        492
Chang, D.....................       492     Chang, Patricia        492
Chang-Zahn, Lizettea.........       492     Chapman, John..        493
Chapman-Renaud, Heidi........       494     Chappell, Sally        494
Charis, Barbara..............       494     Charnet, Tavia.        494
Chasan, Mark.................       495     Chasin, Barbara        495
Chatham, Matthew.............       495     Chattelle,             495
                                             Eugene.
Chauncey, Bonnie.............       496     Checca, Tim....        496
Chen, Rhonda.................       496     Chenette, Peter        496
Cheng, Tim...................       496     Cherry, Philip.        496
Chichester, Carol............       497
------------------------------------------------------------------------
Chico Country Day School Students:  Cardin, Troy...............       497       Hopson,              497
                                               Morgen.
  Hyder, Emily...............       497       Lane, Molly..        497
  Lantz, Lucas...............       498       Murray, Regan        498
  Nichols, Mikayla...........       498       Polosky, Ty..        498
  Schroth, Erika.............       498       Scott,               498
                                               Richard.
  Sunderman, Maddie..........       498       Winter,              499
                                               Sophia.
------------------------------------------------------------------------
Child, Robert................       499     Childs, Nat....        499
Chin, Caroline...............       499     Chiotis,               499
                                             Melissa.
Chirinos, William............       499     Choi, Etsuyo...        500
Chord, Melody................       500     Chorush, Evelyn        500
Christensen, Karen...........       500     Christensen,           500
                                             Margaret.
Christian Parks, Andrea......       501     Christopher,           501
                                             David.
Chun, Cynthia................       501     Church, Janet..        501
Church, Janice...............       501     Church, Rebecca        502
Churchill, Joe...............       502     Chval, Jessica.        502
Cipullo, Colette.............       503     Cirlone, Jane..        503
Clancy, Bonnie...............       503     Clark,                 503
                                             Bernadette.
Clark, Catherine.............       503     Clark, David...        503
Clark, Kevin.................       504     Clark, Maxine..        504
Clark, Pamela................       504     Clark, Sheri...        504
Clark, Thomas................       504     Clark, Tom.....        504
Clarke, David................       504     Clarke, Jen....        505
Clarke, Marcia...............       505     Clark-Kahn,            505
                                             Lisa.
Clary, Katelyn...............       505     Clary, Wanda...        505
Claus, Grace.................       506     Claus, Julia           506
                                             Ruth.
Clausen, Suzan...............       506     Clay, Gretchen.        507
Clay, Laura..................       507     Clement,               507
                                             Stephenie.
Clement, Valerie.............       507     Clement, Wade..        507
Clements, Charles............       508     Clemons, Teddy.        508
Climer, Donna................       508     Clough, Allison        509
Clough, Carter...............       509     Clowers, Amy...        509
Cloyed, Connie...............       509     Cobb, Dianne...        510
Cobine, Andrew...............       510     Cochran, Brenda        510
Cochran, Dasha...............       512     Cochran, Joyce.        512
Cochrane, Meg................       513     Cockerha, Joyce        513
                                             Marie.
Cockrell, Connie.............       513     Coffman, R. Ray        513
Cofrin-Shaw, Bryna...........       513     Cohen, Elana...        514
Cohen, Howard................       514     Cohen, Louisa..        514
Coil, Meghan.................       514     Colakovic,             514
                                             Dragan.
Colaprete, Miles.............       515     Colberg, Lesley        515
Colburn, Kendra..............       515     Cole, Debbie...        515
Coleman, Frank...............       516     Coleman, Laura.        516
Coleman, Maryalice...........       516     Coleman, Win...        516
Collar, Diane................       517     Collett, Monica        517
Colling, Sara................       518     Collins, Ann...        518
Collins, Kristi..............       518     Collins, Linda.        518
Collins, Preston.............       518     Collner, J.D...        518
Collomb, Janie...............       519     Colson, Richard        519
                                             E..
Colwell, Rev. Pat............       519     Comanar, Ann...        519
Combes, Maureen..............       519     Comfort, Mary          520
                                             (ID).
Comfort, Mary (MI)...........       520     Commerford,            520
                                             John.
Como, Samantha...............       520     Compston,              520
                                             Michael.
Conine, Dan..................       521     Conklin, Paul..        521
Conklin, Susan...............       521     Conley, Gail...        522
Connaughton, Hilary..........       522     Connell, Casey.        522
Conrardy, Joanna.............       522     Conroy, Peggy..        522
Constantine, Paul............       523     Constantino-           523
                                             Martin, Patti.
Contestabile, Gabriella......       523     Contreras, Emma        523
Cook, Christopher............       523     Cook, Don......        523
Cook, LTC Lenny..............       524     Cook, Margaret.        524
Cook, Michael................       524     Cooke, John....        525
Cooke, Katherine.............       525     Cooley, Monica.        525
Coolidge, Anita..............       525     Cooper, Barbara        525
Cooper, Caroline.............       525     Cooper, Deanne.        526
Cooper, Diane................       526     Cooper, John...        526
Cooper, Nancy................       526     Cooper, Orion..        527
Coram, Jessica...............       527     Coram, Shannon.        527
Corbett, Mary Lou............       527     Corbin, Linda..        528
Corcoran, Mary...............       528     Cordell, Ruth..        528
Corder-Agnew, Lonney.........       528     Cordova, Floyd.        528
Cordray, Janie...............       528     Cormier, Rick..        529
Cornell, Linda...............       529     Cornell, Sandy.        529
Cornia, Gina.................       529     Corrado, Susan.        529
Corzine, Nicole..............       529     Cosenza, Jules.        530
Cosgrave, Brona..............       530     Coshow, Jr.,           530
                                             Charles.
Cosimano, Pat................       530     Cost, Anita....        530
Costa, Demelza...............       530     Costanzo, Chris        531
Costello, Shawndeya..........       531     Cotter, Tish...        531
Cottle, Lawrence.............       531     Cotton, Andrew.        531
Cotton, Nancy................       532     Couche, Stephen        532
Coulon, Christian............       532     Council, Nina..        532
Courter, George..............       532     Cowen, Dave....        533
Cowles, Ph.D., Ann...........       533     Cowling, Janet.        533
Cox, Leslie..................       533     Cox, Linda.....        534
Cox, Maury...................       534     Coy, D. Sid....        535
Cpordas, Lowell..............       535     Craft, Delight.        535
Craft, Helen.................       535     Cragnolin,             535
                                             Janice.
Craig, Geraldene.............       536     Craig, Jan.....        536
Craig, Jason.................       536     Craig, Jean....        537
Craig, Karl..................       537     Craig, Kathy...        537
Craig, Margaret..............       537     Crail, Kimberly        537
Crain, Janet.................       537     Cramer, Dana...        538
Crandall, Lynn...............       538     Crandall, Neal.        538
Cravens, Joshua..............       538     Crawford               538
                                             O'Brien, Jana.
Creasy, Rosalind.............       539     Crew, Tsandi...        539
Crider, Rhonda...............       539     Crisco, Judy...        539
Crock, Steven................       539     Crocker, Joanna        539
Croft, Stan..................       540     Cronin, Terese.        540
Crosby, James................       540     Cross, Lynn....        540
Crouch, Sondra...............       540     Crowley, Dan...        541
Crump, Erin..................       541     Crump, Ruth....        541
Crusha, Connie...............       541     Crutchfield,           541
                                             Christine.
Cruz, Johnny.................       542     Crymes, Lili...        542
Csencsits, Brenda............       542     Cu, Helen......        542
Cuenod, Piliana..............       542     Cuffman, Nancy.        542
Cullipher, Annette...........       543     Cullum, Vernon.        543
Culver, Molly................       543     Cummings, Brian        544
Cummings, Nancy..............       544     Cummings,              544
                                             Thomas.
Cunningham, Carolyn..........       544     Cunningham,            544
                                             Gary.
Cunningham, James............       544     Cunningham,            545
                                             Paul.
Cunningham, Sarah............       545     Cupp, Jerry....        545
Curley, R.N., B.S.N., Darcie.       545     Curlin, Beth...        546
Currier, Constance...........       546     Curry, Harvey..        546
Curry, Kathy.................       546     Curry, Lori....        547
Cushing, Margaret............       547     Cushman, Robert        547
Cutter, Justin...............       547     Cutter, Karin..        547
Cuviello, Joe................       547     Cyr, Tim.......        548
d'Carrone, Louise............       548     D'Auria,               548
                                             Richard.
Daane, Tere..................       548     Dagg, Sarah....        548
Daigle, Abbie................       548     Dailey, Jim....        549
Dale, Barbara and Jim........       549     Dalenberg,             549
                                             Kathryn.
Dally, Leta..................       549     Dalmeida,              549
                                             Cathleen.
Dalton, Lynn.................       550     Daly, Judith...        550
Damian, Kevin................       550     Damman, Lauren.        550
Dancer Schwartz, Kat.........       550     Daniels,               551
                                             Jessica.
Daniels, M.A.................       551     Danielson, Amy.        551
Danielson, Teri..............       551     Dankerlin, L.          552
                                             Renee.
Danneman, Deb................       552     Dappert, Janis.        552
Darnall, Linda...............       552     Darner-Redburn,        552
                                             Debra.
Darrow, Susan................       553     Das, Ranjna....        553
Dashielle, Alegra............       553     Davenport,             553
                                             Riley.
Davidow, Soni................       554     Davidson,              554
                                             Kristina.
Davidson, Sheilah............       554     Davila, Manny..        555
Davis, Adrianne..............       555     Davis, Alice...        555
Davis, Carolyn...............       556     Davis, D.J.....        556
Davis, Diana Verne...........       556     Davis, Pastor          556
                                             Dick.
Davis, Karen K...............       556     Davis, Kathy...        557
Davis, Katrina...............       557     Davis, Liora...        557
Davis, Marilyn...............       557     Davis, Mary....        557
Davis, Nancy.................       557     Davis, Patricia        557
Davis, Rian..................       558     Davis, S.K.....        558
Davis, Terry.................       558     Davis, Ph.D.,          558
                                             Ronald G..
Davol, Catherine.............       558     Davol, Sarah...        558
Dawan-Newborn, Daaiyah.......       558     Dawkins, Hazel.        559
Dawley, Nancy................       559     Dawn, Shelton..        559
Dawson, Lorenzo..............       559     Day, Hannah....        559
Day, Karen...................       560     Dayvie, Liz....        560
Dazey, William...............       560     de Cuba,               560
                                             Natalia.
de Greve, Beatrix............       561     De Korne, Haley        561
de Lorenzo, Carolyn..........       561     De Nicola,             561
                                             Franco.
De Sa, Elizabeth.............       562     De Wys,                562
                                             Margaret.
Deacon, Linda................       562     Dean, Jeff.....        562
Dean, Joanne.................       562     Dearborn,              562
                                             Jeffrey.
DeBoer, Elisa................       563     DeCabooter,            563
                                             Maria.
DeCastro, Diana..............       563     DeDieu, Valda..        563
Deeds, Darla.................       564     Deems, Elanora.        564
Deen, Kara...................       564     DeFelice,              564
                                             Angela.
DeFilippo, Carly.............       565     Deif, Nadine...        565
Del Bosque, Joe..............       565     Del Grosso,            566
                                             Michael.
DeLamatre, Isaac.............       566     Delaney,               566
                                             Maureen.
Delar, Valerie...............       566     Delgadillo,            566
                                             Steve.
Delgado, Dru Ann.............       567     Delgado, Jr.,          567
                                             Victor.
Dell, E......................       567     DeLong, Kenneth        567
Delorey, Kathleen............       567     deLorge, Ann...        568
DelRosso, Carol..............       568     DeMaggio, Julie        568
Demetri, Darlene.............       568     Demi, Carol;           569
                                             Laura Lupovitz.
Deming, Linda................       569     DeMo, Charle...        569
Demuria, Gary................       569     Denenberg,             570
                                             Harold.
Dengel, William..............       570     Denham, Isabel.        570
Denis, Sarah.................       570     Denman, Sara...        570
Dennis, Marianne.............       570     Dennison, Jane.        570
Depew, Jerry.................       571     Depner, Stacie.        571
Derksen, Gloria..............       571     Deroko, Renee..        571
DeRolf, Kerstin..............       572     Deshotels,             572
                                             James.
Dessler, David...............       572     DeSutter, Randy        572
Detmers, Peggy...............       573     Dettlinger,            573
                                             Malisa.
Deutsch, Lauren..............       573     Devine, Carole.        573
Dezendorf, Andrea............       573     Di Tosti,              574
                                             Carole.
Diaz, Barbara................       574     Diaz, Daily....        574
Diaz, Margarita..............       574     Dibbell,               575
                                             Kenneth.
Dickerson, Babette...........       586     Dickerson, Sara        586
Dickinson, Nancy.............       586     Dickmann, Maria        587
Didrichsen, Susan............       587     Diehl, Cathy M.        587
DiGiacomo, Mark..............       587     Dillard, Jerry.        587
Dilley, Christopher..........       588     Dillon,                589
                                             Elizabeth.
Dillon, Sherry...............       589     Dilworth,              589
                                             Alexandra.
DiNardo, Judith..............       590     DiPuma, Susan..        590
Dirnbach, Boris..............       590     Disney, Ann and        590
                                             Walt.
DiVicino, Roseann............       591     Dixon, Meghan..        591
Djernes, Tami................       591     Dlugonski,             592
                                             Melba.
Dobbs, Michael...............       592     Dobkin, Joan...        592
Dobrow, Angel................       592     Dobsevage, Tina        593
Dobson, Kim..................       593     Dockery, Sean..        593
Dodson, Sara.................       593     Doell, Laura...        593
Doering, Amy.................       593     Doino, Mary....        594
Dolan, Elaine................       594     Dolan, Julia...        594
Doll, Rebecca................       594     Dombek, Betty          595
                                             J..
Domenick, Sarah..............       595     Donley, Blake..        595
Donnelly, Michael............       595     Donnelly,              595
                                             Robert.
Donohue, Jean................       596     Donovan, Elaine        596
Donovan, C.S.J., S.                 596     Doonan, Shelley        596
 ``Marguerite'' E.,.
Dorais, Terri................       596     Dorais, Tom....        597
Dorety, Naoma................       597     Dorfman, Ellen.        597
Dotter, Don..................       597     Dougherty, J.          598
                                             Kelly.
Doughty, Joyce...............       598     Douglas, Carol.        598
Douglas, Dianne..............       598     Douglas,               598
                                             Doretha.
Dowd, Therese................       598     Dowdy, Perry...        599
Dowell, Maria................       599     Downer, Kevin          599
                                             W..
Downey, John.................       599     Doyle, Margaret        599
Drake, Gillian...............       600     Drapkin,               600
                                             Christiane.
Drechsler, Anna..............       600     Drehfal, Anne..        600
Dreibelbis, Carol............       602     Dresher, Merlin        602
Dresner, Randi...............       602     Dressel, Gail..        603
Drew, Linda..................       603     Driscoll, Kelly        603
Drivon, Theta................       603     Droz, Ben......        604
du Bois, Julie...............       604     Duay, Federico.        604
Dubs, Thomas.................       604     Dudley,                604
                                             Rosemary.
Duffy, Connor................       604     Duffy, Merci...        605
Dugan, Michelle..............       605     Dugar, Alice...        605
Duggan, Eric.................       605     Dujon, Phyllis.        605
Duke, Kimberly...............       605     Dunaj, Michele.        606
Dunaway, Vicki...............       606     Dundee, Kathy..        606
Dungan, Allison..............       606     Dunham,                606
                                             Patricia.
Dunlap, Ginger...............       607     Dunleavy,              607
                                             Timothy.
Dunlop, Hollis...............       607     Dunn, Cheryl...        607
Dunn, Wesley.................       608     Dunnagan, Shawn        608
Duster, Jennifer.............       608     Duvall, Mary...        608
Dux, Clara...................       609     Dvorsky, Sandy.        609
Dybdahl, Ryan................       609     Dyer, Donna....        609
Dyer, Doug and Susanne Hesse.       610     Dyke, Robert W.        610
Dykoski, Dr. William ``Skip''       610     Dykstra, Pamela        610
Dyvine, Padma................       610     Dzialek, Iwona.        611
Eads, Claudia................       611     Earnst, John...        612
Easley, Faye.................       612     Easter, Anne...        612
Easterday, Cynthia...........       612     Eaton, Darla...        613
Eaton, Edna..................       613     Eaton, Kathleen        613
Eaton, Tyler.................       613     Eaton, M.D.,           613
                                             Christian T..
Ebel, Kenneth................       614     Eberle, Martha.        614
Ebright, Matthew.............       614     Echele, Alise..        614
Echevarria, Rebecca..........       615     Eckroth,               615
                                             Cynthia.
Edain, Marianne..............       616     Eddington, Anna        616
                                             Claire.
Eelstein, Amy................       617     Edgel, Lyn Eric        617
Edgett, Karin................       617     Ediger, Evelyn.        617
Edmonson, Michelle...........       617     Edmunds, Steve.        618
Edwards, Ann.................       618     Edwards, Karen.        618
Edwards, Mark V..............       618     Efraimson,             618
                                             Barbara.
Eichelberger, Carol..........       619     Eisbach, David.        619
El, Mira.....................       619     Elandt,                619
                                             Virginia.
Eldridge, Sara...............       619     Elfering,              619
                                             Marlene.
Elliott, Andrea..............       620     Ellis, Angele..        620
Ellis, Cathy.................       620     Ellis, Kathryn.        620
Ellis, Molly.................       620     Ellis, Zandra..        620
Elmore, James................       621     Embry, Obiora..        621
Emerson, Karen...............       621     Emery, Heather.        621
Emery, Jason.................       622     Emlinger, Wendy        622
Emrich, David................       622     Enfield, Susan.        622
Eng, Erica...................       622     Engdahl, Anna..        623
Engels, Lisa.................       623     England, Gail..        623
England, Kathleen............       623     England,               624
                                             C.E.C.,
                                             C.F.S.E.
                                             Thomas.
Engle, Richard...............       624     English,               624
                                             Carroll.
Engstrom, Doris..............       625     Enser, Suzanne.        625
Ensign, Diane................       625     Enzmann,               625
                                             Narcissa.
Epshteyn, Svetlana...........       626     Eran, Nadia....        626
Erceg, Julian................       626     Ergo, Dave.....        626
Erickson, Christine..........       626     Erickson, Sara.        626
Erlanger, Joan...............       627     Ernissee, Terri        627
Ero, Ivy.....................       627     Eschenlauer,           627
                                             Arthur.
Esquerra, Ronald.............       628     Essex County           628
Estrella, Susan..............       629      Soil and Water
                                             Conservation
                                             District.
Estrello, Angela.............       629     Etter, Leilani.        629
Ettinger de Cuba, Stephanie..       630     Evans, Alvin...        631
Evans, Dianne................       632     Evans, Jessica.        632
Evans, Joy...................       632     Evans, Morgan..        632
Evatt, Josephine.............       632     Evenson,               633
                                             Marilyn.
Everett, Beth................       633     Everett, Ed....        633
Fabing, Keith................       633     Facey, Laurel..        634
Fahsel, Brad.................       634     Fairchild,             634
                                             Kathy.
Fairweather, Erin; Sperling,        634     Farace, Robert.        635
 Timmy.
Farley, Candace..............       635     Farley, Eugene         635
                                             S..
Farmer, Fran.................       636     Farnsworth, Stu        636
Farrar, Alonna...............       636     Farrelly, James        636
Farrington, Carl.............       636     Farris, Patti..        636
Farris, S.N.S., Julie G......       636     Farrow-Bowen,          637
                                             Patricia.
Fasenfest, Harriet...........       637     Fassanella, Jim        637
Fath, Barbara................       637     Faurote,               638
                                             Jennifer.
Fauvell, Teresa..............       638     Favre, Tracy...        638
Fay, Bob.....................       639     Fazzi, Michael.        639
Fee, Penny...................       639     Feibel, Theodor        639
Feinberg, John...............       640     Feissel, John..        640
Feldt, Shela.................       640     Felger, Andrew.        640
Felix, Lindy.................       640     Felt, Brian....        640
Felter, Linda................       640     Felton, Susan..        641
Fenn, Suzanne................       641     Ferguson, Chris        641
Ferguson, Jim................       641     Ferrari, Gerard        642
Ferrell, David...............       642     Ferrier-               642
                                             Johnson, Donna.
Ferro, Kathy.................       643     Ferroggiaro,           643
                                             Suzanne.
Ferry, Rita..................       643     Feusner, Robin.        643
Fiedler, Alicia..............       643     Field,                 644
                                             Catherine.
Fies, M.D., Robert...........       644     Fifer, Nancy...        644
Fink, Penelope...............       644     Fink, Richard..        645
Finley, Mary Miho............       645     Finley-Shea,           645
                                             Barbara.
Finneran, Tom................       645     Finney, Vanessa        645
Fischel, Marya...............       646     Fischer,               646
                                             Elizabeth.
Fischer, Heather.............       646     Fisher, Barbara        646
Fisher, David................       647     Fisher, Karen..        647
Fisher, Melody...............       647     Fisher,                647
                                             Stephanie.
Fisher Kern, Madeleine.......       648     Fiske, Colin...        648
Fitch, Jr., Michael..........       648     Fitzgerald,            648
                                             Macleod.
Fitzner, Erin................       649     Flagg,                 649
                                             Gwendolyn.
Flanagan, Marianne...........       649     Flate, David...        649
Fleming, Judy................       649     Fleming, S.F...        650
Fletcher, Christine..........       650     Fletcher, Erin.        650
Fletcher, Ian................       651     Flickinger,            651
                                             Nathan.
Flitter, Danielle............       651     Florek, Janyse.        651
Flores, Margaret.............       652     Flores, Sharon.        652
Flores, Yomei................       652     Flournoy, Ruth.        652
Flynn, Ruthie................       653     Flynn, Sarah...        653
Foegen, Joseph...............       653     Fogarty, Dan...        653
Fogel, Jean..................       654     Fogel, Ken.....        654
Foley, Kyle..................       654     Folsom, Therese        654
Fonk, Ted....................       654     Fonooni, Candis        655
Fonti, Theesa................       655     Foote, Torie...        655
Forbes, Reese................       655     Ford, Leeann...        655
Ford, Steve..................       655     Forehand, Nancy        655
Forino, Christina............       656     Forlie, Kai            656
                                             Mikkel.
Formo, Aimee.................       656     Forster,               656
                                             Michael.
Fosdick, Helen...............       656     Foss, Pauline..        657
Fossett, Lee.................       657     Foster, Elaine.        657
Foster, Karen................       657     Foster, Michael        657
Foumberg, Leslie.............       657     Fowler, Sesame.        658
Fox, Agnes...................       658     Foy, M.A.,             658
                                             R.D., C.D.E.,
                                             Masha.
Frame, Kristen...............       658     Francis, Lelia         658
                                             Ann.
Franck, Faith................       659     Franco, Amy....        659
Frankel, Leroy...............       659     Frankenstein,          659
                                             Jean.
Franklin, Barbara............       659     Franklin,              660
                                             Cheryl.
Franks, Allan................       660     Franks, Jeanne.        660
Fraser, James................       660     Frazee, Christa        660
Frazer, Patty and Bob........       660     Frazier, Carol.        660
Frazier, Kimberly............       661     Frazier, Ruth..        661
Freckmann, Chad..............       661     Fredenthal,            662
                                             Ruth Ann.
Freedman, Luis...............       662     Freel, Susan...        662
Freeman, Geri................       662     Freeman,               663
                                             Jacqueline.
Freeman, Joseph..............       663     Freeman, Mary..        663
Freeman, Sandy...............       663     Freeman, Thomas        663
Freese, Jan..................       663     Freid, David...        664
Freitag, Lynn................       664     Freitas, Amanda        664
French, J....................       665     French, Jim &          665
                                             Lisa.
French, Rodney...............       666     Fretz, Lynne...        666
Friar, Susan.................       666     Fridgen, Pamela        666
Friedland, Fiona.............       666     Friedly,               667
                                             Krystal.
Friedman, Rebecca............       667     Friend, Doug...        667
Frisco, Christine............       667     Fritsch,               667
                                             Charles.
Frodel, Ann..................       668     Frompovich,            668
                                             Catherine J..
Fry, Marian..................       668     Frye, Mahala...        668
Fugitt, Christina............       669     Fuhrman, Andrea        669
Fullen, Charles E............       669     Fuller, Chris..        669
Fuller, Kathie...............       669     Fuller,                670
                                             Victoria.
Fulsome, Susan...............       670     Fulton, Will...        670
Fung, Sherman................       670     Funkhouser, Nan        670
Furrow, Eric.................       671     Gabriel, Sally.        671
Gabrielsen, Barbara..........       671     Gadsby,                671
                                             Patricia.
Gaffney, William.............       671     Gafouri, Yana..        672
Gagnon, Sandra...............       672     Gaignard,              672
                                             Theresa.
Gaines, Brenda...............       672     Gaines, Katrina        672
Galarneau, Louise............       672     Galas, Robin...        673
Gale-Gonzalez, Rebecca.......       673     Galen, Ron.....        673
Gallagher, Kevin.............       673     Gallaher, Peggy        673
Gallinger, Rob...............       673     Gallivan, Jason        674
Gallo, Paula.................       674     Gancher, Susan.        674
ganMoryn, Croitiene..........       674     Gannon, Dan....        675
Gannon, Peggy................       676     Gannon, Thomas.        676
Garcia, Celin................       676     Garcia, Joshua.        676
Gardiner, John...............       676     Gardner, Angela        677
Gardner, Arnie...............       677     Gardner, Elias.        678
Gardner, Gail................       678     Garlette,              678
                                             William.
Garms, Ellen.................       678     Garodia, M.D.          678
                                             Prachi.
Garrison, Grace..............       679     Garvett, Esther        679
Garza, Armando...............       679     Gasperini,             679
                                             Jennifer.
Gast, Paul...................       680     Gatz, Cheryl...        680
Gaus, Christine..............       680     Gautier,               680
                                             Roberto.
Gawlikoski, Jay..............       681     Geaci, Suzanne.        681
Gebhardt, Peter..............       681     Geist, Katrin..        682
Gemar, LaVerne...............       682     Gendron, Marya.        682
Genest, Karen................       682     Genin, Merideth        682
Gensheimer, Greg.............       683     George, Carol..        683
George, Chris................       683     George, Darien.        683
Georger, Michael.............       683     Geraci, Dr.            688
                                             Robert M..
Gerdes, Cynthia..............       686     Gershgorn,             686
                                             Laurie.
Gesch, E'Lonna...............       686     Geyer, Carol...        686
Ghicks, Patsy................       686     Ghirla, Leslie.        686
Giammattei, Victor...........       687     Gibbon, Barbara        687
Gibbons, Jo..................       687     Gibbs, Rozanne.        687
Gibellina, Glen..............       687     Gibson,                688
                                             Marshall.
Gibson, Michael..............       688     Giesy, Theo....        688
Gifford, Dawn................       688     Gifford,               689
                                             Richard.
Giglio, Bernadette...........       689     Gilbert, Marsha        689
Gilbert, Valerie.............       690     Gilchrist,             690
                                             Claire.
Gill, L.F.J..................       690     Gillanders, J.         690
                                             David.
Gillespie, Bob...............       690     Gillett, Erin..        691
Gilman, Christina............       691     Gilman, Steve..        691
Gilmore, Jamie...............       694     Gilroy, David..        694
Gilson, Erinn................       694     Gimmeson,              695
                                             Michael.
Ginn, Anne; on behalf of            695     Ginsberg,              697
 Susan Ellis Goodell.                        Caroline.
Giordano, Deborah............       697     Giorgi, Justin.        698
Giovannini, Karen............       698     Girvin,                698
                                             Jennifer.
Gish, Diedre.................       698     Given, Steve...        699
Givens, Nancy................       699     Givens, Roger          699
                                             G..
Givers, David................       699     Glascock,              699
                                             Katherine.
Glaser, Aviva................       699     Glaser, Jean...        704
Glaston, Joe.................       704     Glatter,               704
                                             Katherine.
Glaub, Ted...................       704     Gleason, Laura.        709
Gleeson, Donna...............       709     Gleeson, Karen.        709
Glennon, Allison.............       709     Glines, Jessica        709
Glomski, Catherine...........       710     Glos, Jackie...        710
Glover, April................       710     Gnat, Michael..        710
Gocher, Mary.................       710     Gockel, Galen..        711
Godich, Marcia...............       711     Goebel, Judy...        711
Goebel, Michael..............       711     Goeckermann,           711
                                             John.
Goedken, Martin..............       711     Goertz,                712
                                             Elizabeth.
Goetz, Linda.................       712     Goguen, Laurie.        712
Goldberg, Gary...............       712     Goldberg,              712
                                             Halina.
Goldberg, Sarah..............       712     Golden, Birdee.        713
Golden, Gabe.................       713     Goldenberg,            713
                                             Helen.
Goldenberg, Laura............       713     Goldman, Paul..        713
Goldsberry, Ray..............       714     Goldsmith,             714
                                             Bruce.
Goldsmith, Cathy.............       714     Goldstein, Joan        714
Golightly, Susan.............       714     Gomez, Carissa.        714
Gomez, Hilda.................       715     Gontard, Caren.        716
Gonzales, Anthony............       716     Gonzales,              716
                                             Christine.
Gonzales, Crystal............       716     Gonzales, Jr.,         716
                                             Frank.
Gonzalez, Aida...............       716     Gonzalez,              717
                                             Cynthia.
Gonzalez, Katie..............       717     Gonzalez,              717
                                             Nicole.
Gonzalez, William G..........       717     Good, Aimee....        717
Good, Philip A...............       718     Goodman, Anne..        718
Goodman, Arifa...............       720     Goodman, Ellen.        720
Goodman, Margaret............       720     Goodwater,             721
                                             Heather.
Goodwin, Karen...............       721     Gordon,                721
                                             Alexandra.
Gorko, Gloria................       721     Gornick, Janet.        721
Gorski, Joe..................       721     Goss, Harlyene.        722
Gosson, Grace................       722     Goubert, Debrin        722
Gouge, Deborah...............       722     Gouveia,               722
                                             Christine.
Gozdzialski, John............       722     Grabbe,                723
                                             Alexandra.
Grabow, Tom..................       723     Grace, Harry...        723
Graf, Richard................       724     Graff, Gail G..        724
Graham, Bonnie Jones.........       724     Graham, Diana..        724
Graham, Jon..................       725     Graham, Laura          725
                                             and Carl.
Graham, Nancy................       725     Grames,                725
                                             Patricia.
Grandstaff, Lisa.............       725     Granning,              726
                                             Anders.
Grant, Ann...................       726     Grant, Marsha..        726
Gratsch, Grace...............       726     Graves, Tammy..        726
Graves, Terrell..............       726     Graves, Jr.,           726
                                             Herbert
                                             ``Herb'' R..
Gray, Jeff...................       727     Gray, Mary.....        727
Gray, Natalie................       728     Gray, Pamela...        728
Gray, Pilar..................       728     Gray, Sue......        728
Gray, Sylvia Ruth............       729     Gray, Yuriko...        729
Graziano, Mary...............       729     Grebanier,             729
                                             Marian.
Grecchi, Giulio..............       729     Greco, Loris A.        730
Green, Carol.................       730     Green, David...        730
Green, Mary..................       730     Greenbaum,             731
                                             Dorian.
Greenberg, Joyce.............       731     Greene, Harry..        731
Greene, Jane.................       731     Greene, Vaughan        731
Greenia, Anne................       732     Greenland, Alan        732
Greenstein, Barry............       732     Greenstein,            732
                                             Cindy.
Greetham, Alex...............       733     Gregg, Sara....        733
Gregoire, Chris..............       733     Gregor, Carol..        733
Gregory, Andrew..............       733     Gregory, Claire        734
Gregory, Ellen...............       734     Gregory,               734
                                             Jennifer.
Gregory, T...................       734     Grey, Doris....        735
Greymoon, Deborah............       735     Grier, Audrey..        735
Griffin, Brwyn...............       735     Griffin, Hon.          735
                                             Robert T..
Griffin, Kasandra............       748     Griffin,               749
                                             Stephanie.
Griffith, Linda..............       749     Griffiths,             749
                                             Frances.
Griggs, Richard..............       749     Grimaldi, Lynne        749
Grimm, R.....................       749     Groell, Jacob..        750
Groen, Jen...................       750     Groff, Stan....        750
Grosch, Judy.................       751     Gross, Cheryl..        751
Gross, Dena..................       751     Grossman, Stacy        751
Grove, Earl..................       751     Grove, Jennifer        752
Grove, Nancy.................       752     Groves, Linda..        752
Grubaugh, Janet..............       752     Gruenstein,            753
                                             Catherine.
Guare, Sarah.................       753     Gubman, Joanna.        753
Gubman, Michelle.............       753     Guenther, Jean.        753
Guerra, Michael..............       754     Guerrero,              754
                                             Ricardo.
Gugich, George...............       754     Guignard,              754
                                             Lilace.
Guillemard, Claude...........       754     Gungor, Saniye.        754
Gunter, Karlene..............       754     Guntert, Alice.        755
Gustafson, Judi..............       755     Gustafson, Rae         755
                                             Ann.
Guston, Joseph...............       755     Guthie, Sharyn.        755
Gutierrez, Nancy.............       755     Guzzon,                756
                                             Georgina.
Gwartney, Abra...............       756     H., Jennifer...        756
Haas, Bill...................       757     Haber, Martha..        758
Hachey, Suzanne..............       758     Hachfeld,              758
                                             Christine.
Hacker, Cherie...............       758     Hackney, Laura.        758
Hadda, Ilse..................       759     Haddad,                759
                                             Stephanie.
Hadfield, Ron................       759     Hadley, Robert.        759
Hadlock, Mark................       759     Haff, Harry....        759
Hafiz, Saeeda................       760     Hage, Cassandra        760
                                             P..
Hager, Alexandra.............       760     Haggard,               761
                                             Gabrielle.
Haining, Alice...............       761     Hakun, Karen...        761
Hale, Jeanette...............       761     Hales, Jennifer        761
Hales, Jil...................       761     Halfaker, James        762
Hall, Anthony................       762     Hall, Camille..        762
Hall, Denny..................       762     Hall, Dr. John         762
                                             R..
Hall, Marianne...............       762     Hall, Michele..        762
Hall, Pamela.................       763     Hall, Sarah....        763
Hallett, Shannon.............       763     Hamer, Nancy...        763
Hamill, Janet and Geoffrey...       763     Hamilton, Bruce        764
Hamilton, Kerri..............       764     Hamilton, Laura        764
Hamilton, Tricia.............       764     Hamilton,              764
                                             William.
Hamlin, Deborah..............       764     Hamlin, Thomas.        767
Hamm, Louise.................       768     Hamman, Tami...        768
Hammerman, Sally.............       768     Hammersley,            768
                                             Ross.
Hampton, Holly...............       769     Hampton, Steve         769
                                             & Mary.
Hance, Judith................       769     Hand, Judith...        769
Handly, Neal.................       770     Hanna, Helen...        770
Hanneken, Avery..............       771     Hannemann,             771
                                             Tracy.
Hannigan, Margaret...........       771     Hannum, Joyce..        771
Hansard, Robert..............       771     Hansen, Amy....        772
Hansen, Jan..................       772     Hansen, Jeremy         773
                                             A..
Hansen, Jerry and Joyce......       773     Hansen, Matthew        773
Hansen, Mitch................       773     Hansen, Yvonne.        774
Hanson, Anne.................       774     Hanson, Laurie.        774
Hanson, Melissa..............       774     Hanson,                775
                                             Michelle.
Hanson, Paul R...............       775     Harad, Allyn...        776
Hardenbergh, Sabrina.........       776     Harder, Susan..        776
Hardy, Fran..................       777     Hardy, Ingrid..        777
Harkness, Jim................       777     Harmet, Lynn...        778
Harper, Katherine............       778     Harr, Terry....        779
Harris, Cathy................       779     Harris, Jack H.        779
Harris, John.................       779     Harris, Karen..        779
Harris, Melissa..............       780     Harris, Myra...        780
Harris, Peggy................       780     Harris, Rebecca        781
Harris, Sharon...............       781     Harrison, Megan        781
Harrison, Richard............       781     Harriss,               781
                                             Patricia.
Harrs, Maggie................       782     Hart, Carole...        782
Hart, Dannie.................       782     Hart, Jessica..        782
Hartke, Spring...............       783     Hartley, Kara..        783
Hartzell, Will...............       783     Harvest, Lucy..        783
Hasara, Michael..............       783     Hash, Zachary..        783
Haskamp-Gebhardt, Denise.....       784     Haskins, Mark..        784
Hatfield, Joyce..............       784     Hatfield, Laura        784
Hathaway, Ross...............       784     Hatok, Sharon..        784
Haugen, Robert...............       785     Hauter, Sonja..        785
Havener, Kevin...............       785     Havens, Adrian.        785
Hawkes, Courtney.............       785     Hawkey, Eileen.        785
Hawkins, Blanche.............       786     Hay, Mark......        786
Hayakawa, Mitsuko............       786     Hayden, Gerard.        786
Hayden, Jeannette & James....       786     Hayden, Sara...        787
Hayes, Aisha.................       787     Hayes, Kim.....        787
Hayes, Linda.................       787     Hayes, Michelle        787
Hayes, Tim...................       788     Haynes, M.P.A.,        788
                                             Michael W..
Haytmanek, Maryann...........       789     Hayward, James.        789
Hayward, Merle...............       790     Healy, Craigen.        790
Healy, Elizabeth.............       790     Healy, Robyn...        790
Hearsey-McComas, Peta........       790     Heart, Jewel...        790
Heathcote, Susan.............       790     Heaton, Kristi.        791
Hebel, Sylvia................       791     Hebenstreit,           791
                                             Lyn.
Heckel, Susan................       791     Hedlund, Laura.        791
Hedstrom, Dwayne.............       792     Hee, Wynnie....        792
Heehs, Jeff..................       792     Heeringa, Jamie        792
Heeringa, Kelsey.............       793     Heffelfinger,          793
                                             Reed.
Heft, Mary...................       793     Hegelman, Gena.        794
Hegeman, George..............       794     Heggestad,             794
                                             Susan.
Heidt, Jeff..................       794     Heil, Doris....        795
Heimdal, Kari................       795     Heinlein,              795
                                             Malley.
Heinlin, Donna...............       796     Heiwns, Rosalie        796
Held, Laura..................       796     Helle, Lynette.        796
Helliwell, Gigi..............       796     Helm, Hannah...        797
Hemenway, Gayle..............       797     Hemesath,              797
                                             Daniel.
Hemesath, Phil...............       797     Hendershott,           797
                                             Carmen.
Henderson, Ella..............       797     Henderson,             797
                                             Heather.
Henderson, Janice............       798     Henderson,             798
                                             Jeanette.
Henderson, John..............       798     Henderson,             798
                                             Nancy.
Henderson, Paige.............       799     Henderson,             799
                                             Sherry.
Hendricks, Kate..............       799     Hendrix, Jean..        799
Hendrix, Linda...............       799     Henriksen,             799
                                             James.
Hensley, Michelle............       799     Henson, Karen..        800
Hepner, April................       800     Herbert, Joseph        800
Herd, Nicole.................       800     Hernandez,             800
                                             Cynthia.
Hernandez, GlendaRae.........       800     Hernandez, Joe.        801
Hernandez, Michelle D........       801     Hernday, Ann...        802
Hero, Irmine.................       802     Herold, Annique        802
Herr, John...................       802     Herrick, P.A.,         803
                                             Nancy; Roger
                                             Morrison, M.D..
Herron, Amy..................       803     Herron, Andria.        803
Herron, Pamela...............       803     Hertz, Barbara         803
                                             J..
Hess, Don....................       804     Hess, Phyllis..        804
Hesse, Karl..................       804     Hewett, Suzette        805
Hibbard, Angela..............       805     Hicks, Alison..        805
Hicks, Brian.................       805     Hicks, Molly...        805
Hiebel, Harvey...............       806     Higgins, Alison        806
Higgins, Bruce...............       806     Higgins, Laurie        806
Higgins, Susan...............       806     Hiland, Mike...        806
Hilburn, Amanda..............       806     Hildebrand,            807
                                             Cindy.
Hildenbrand, Nita............       807     Hill, Allison..        807
Hill, Steve..................       807     Hinahara,              808
                                             Gabrielle.
Hinds, Sandra................       808     Hinely, Aren...        808
Hinely, Robert...............       809     Hinrichs, Brant        809
Hipp, Ruth...................       809     Hirsch, Russell        810
Hirschinger, Jerry...........       810     Hirschman,             810
                                             Wendy.
Hirth, Carol.................       810     Hirthler, Jamie        810
Hirtle, John.................       811     Hladun, Barbara        811
Hocevar, Michael.............       811     Hochanadel,            811
                                             Susan.
Hocking, Amy.................       811     Hodges,                811
                                             Claudine.
Hodges, Sueyama..............       812     Hodges, Susan..        812
Hoeke, Heinz.................       812     Hoff, Linda....        813
Hoffman, Antonia.............       813     Hoffman,               813
                                             Carleton.
Hoffman, Marc................       813     Hoffman,               813
                                             Pauline.
Hoffmann, Janet..............       813     Hoffmann, Kyle.        813
Hogan, Mary..................       814     Hogan, Sabrina.        814
Holbrook, Laura..............       814     Holbrook,              815
                                             Stephanie.
Holcomb, Bill, Margot & Scott       815     Holder, Chris..        815
Holder, Rebecca..............       816     Holeton, Kim...        816
Holford, Sharon..............       816     Holland, Del...        816
Holland, Sage................       816     Hollar, Jeffrey        816
Hollens, Kim.................       817     Holley, Eutrina        817
Hollingsworth, Elizabeth.....       817     Hollis,                817
                                             Christopher.
Hollis, Judith...............       817     Hollopeter,            818
                                             Alicia Joy.
Holloway, Wilbur.............       818     Holmes, Delores        818
Holmes, Diane................       818     Holmes, Tyler..        818
Holste, Nancy................       818     Holsten,               819
                                             Chandra.
Holt, Kendra.................       819     Holtey, Ana....        819
Holtz, James.................       819     Holtzman, Jake.        819
Holtzman, Margot.............       819     Holzman,               820
                                             Michael.
Holzworth, Kelly.............       820     Homer, Deanna..        820
Hommel, Kady.................       820     Hong, Yunie....        820
Honold, Wendy................       821     Hoobing, Stan..        821
Hood, Gregory................       821     Hoos, Margaret.        821
Hoover, Kim..................       821     Hope, Rev.             822
                                             Glenda.
Hopkins, Brittany............       822     Horan, Robert..        823
Horjus, Maika................       823     Horn, Jane.....        824
Horner, Deborah..............       824     Horsman, Joanne        824
Hosek, Ruth..................       824     Hotaling, Nancy        824
Houben, Evelyn...............       824     House, Dixie...        825
Houseal, Brian L.............       825     Houseman, Alan         826
                                             W..
Houseman, David..............       827     Houston, Susan.        827
Houston, Tanya...............       827     Houtakker,             827
                                             Catherine.
Hovis, Kris..................       828     Howard,                828
                                             Christine.
Howard, Dale.................       828     Howard, Lori...        828
Howard, Mike R...............       828     Howard, Vernon.        829
Howe, James..................       829     Howell, Amanda.        829
Howell, Jo Anne..............       829     Hoyle, James...        830
Hoyt, Alleyne................       830     Hoyt, Linda....        830
Hoyt, Robin..................       831     Hoyt, Virginia.        831
Hubbard, Eric................       831     Hubbard, Margot        831
Huber, Carolle...............       831     Hubler, Michael        831
                                             S..
Huck, Christie...............       832     Hudson, Amy....        832
Hudson, Charles..............       832     Hudson,                832
                                             Michelle.
Hufford, Joseph..............       833     Huff-Sandstrom,        833
                                             Athena.
Hugenschmidt, Kitty..........       833     Huggins,               833
                                             Abigail.
Hughes, Brother & Sister J.R.       833     Huh, Loma......        834
Huig, Gerrit.................       834     Huisenga,              834
                                             Joshua.
Huismam, Gene................       834     Hulbert, Ned...        834
Hulett, Lisa.................       835     Huls, Robbin...        835
Hulse, Dean..................       835     Hultgren, Karen        835
Humburg, Judith..............       835     Humphrey,              836
                                             Matthew.
Humphreys, Kim...............       836     Humphreys,             836
                                             Roberta.
Hundley, Sally...............       836     Hunt, Joni.....        836
Hunter, Amy..................       836     Hunter, Gene...        837
Huntington, Barbara..........       837     Hurd, Lindsey..        837
Hurley, Brion................       837     Hurst, Pauline.        838
Huston, Lisa.................       838     Hutchinson,            838
                                             Julie.
Hutchison, Amber.............       838     Hutchison, Leah        838
Hwoschinsky, Paul............       838     Hybner, Laura..        838
Hyde, Jennifer...............       839     Hyland,                839
                                             Margaret.
Ianarelli, Monica............       839     Iatrides, Joan.        839
Ickes, Henry.................       839     Ievins, Janet..        839
Ifert-Miller, Katie..........       840     Ihm, Mary Ann..        840
Ihrig, Glen..................       840     Ijams, Lucy....        840
Ingersoll, Kate..............       840     Inglima, Laura.        841
Ingraham, Claudia............       841     Ingram, Martha.        841
Ingram, Mrill................       841     Intilli, Sharon        841
Irish, Kenneth...............       842     Irons, Edie;           842
                                             Elanne Kresser.
Irvine, Jeffrey..............       842     Isely, Laura...        842
Isensee, Michael.............       843     Isse, Antonio..        843
Iyog, Carlo..................       843     Izaguirre,             843
                                             Celia.
Jack, Allison................       843     Jackson, Amy...        844
Jackson, Barbara.............       844     Jackson, David.        844
Jackson, Kent................       845     Jackson, Lisa..        845
Jackson, Martha..............       845     Jackson,               846
                                             Maureen.
Jacobs, Deborah (WI).........       846     Jacobs, Deborah        846
                                             (MN).
Jacobson, Elizabeth..........       846     Jacobson,              846
                                             Michael.
Jacobson, Sarah..............       847     Jacobson,              847
                                             Shirley.
Jacoby, Ben..................       847     Jaeger, Brian..        847
Jaffe, Kaitlin...............       847     Jagiello, Carol        848
Jaillet, Susan...............       848     Jamerson, Susan        848
James, Lauren................       848     James, Lynda...        848
James, Stacy.................       849     James-Cupp,            849
                                             Abigail
                                             ``Abbe''.
Jammer, Danette..............       850     Jankus, Murray.        850
Janowski, Jon................       850     Janson, Elaine.        851
Janus, Joan..................       851     Janzen, Gayle..        851
Jarvis, Michelle.............       852     Jasienowski,           852
                                             Cathy.
Jawa, Raj....................       852     Jay, Bonnie....        852
Jayne, John..................       853     Jeffries, Jamie        853
Jena, Joy....................       853     Jenkins, Nancy.        853
Jenkins-Sherry, Corliss......       854     Jenney, Dina...        854
Jennings, Barbara............       854     Jennings, Mimi.        854
Jennings, Susan..............       854     Jensen, Erin...        855
Jensen, Sharlene.............       855     Jerrells,              855
                                             Patricia.
Jervis, Lisa.................       855     Jevitt, Gar....        855
Jiannacopoulos, Julia........       856     Jimenez,               856
                                             Lizzette.
Jimmerson, Glinda............       856     Jitchotvisut,          856
                                             Donna M..
Johansson, Donald............       857     Johnson, Ann...        857
Johnson, Bettemae............       857     Johnson, Carol.        857
Johnson, Chris...............       857     Johnson, Dean..        857
Johnson, Elizabeth...........       858     Johnson, George        858
Johnson, K.L.................       858     Johnson, Karl..        858
Johnson, Kathryn (TX)........       858     Johnson,               859
                                             Kathryn (MN).
Johnson, Leslie..............       859     Johnson,               859
                                             Michael.
Johnson, Michele.............       859     Johnson, Robyn.        859
Johnson, Ron.................       861     Johnson, Sharon        862
Johnson, Tim.................       862     Johnston, Bud..        862
Johnston, Rona...............       862     Johnston, Signa        862
Johnston, Veronica...........       862     Johnston, Vicki        863
Johnston-Keane, Kathy........       863     Jones,                 863
                                             Alexander.
Jones, Anthony...............       863     Jones, Diane...        863
Jones, Kris..................       864     Jones, Marilyn.        864
Jones, Maxine & Ralph D......       864     Jones, McKenzie        865
Jones, Morgan................       865     Jones, Nancy...        865
Jones, Nina..................       865     Jones, Paula...        865
Jones, Rosemary..............       866     Jones, R.N.,           866
                                             Karen.
Jordan, Callie...............       866     Jordan, Camille        866
Jordan, John.................       866     Jordan, JoLynn.        867
Jordan, Melissa..............       867     Jordan, Michele        867
Jordan, Patricia.............       868     Jordan,                868
                                             Stephanie.
Joslin, Aaron................       868     Joslin, Harriet        868
Joy, Nancy...................       869     Joyce, Cheryl..        869
Jozef, Paul..................       869     Judd, Lilia....        869
Judge, Pandora...............       869     Judkins, Lyn...        870
Juhlin, Mailyn...............       870     Julia, Kathryn.        870
Jung, Courtney...............       870     Junge, Roxanne.        871
Jurczewski, Carol............       871     Justice,               871
                                             Cynthia.
Kaczerski, Wendy.............       871     Kafka, Mo......        871
Kagan, Lucy..................       871     Kagel,                 872
                                             Katharine.
Kaiser, Jessica..............       872     Kaiser, Natasha        872
Kakuk, Shawn.................       872     Kaley, Jeff....        873
Kalifowicz-Waletzky, Roslyn..       873     Kalish,                873
                                             Benjamin.
Kalita, Brad.................       873     Kalscheur,             873
                                             Sandra.
Kambak, Kim..................       874     Kania, John....        874
Kann, Barbara................       874     Kansas, Sharon.        874
Kaperick, Paul...............       875     Kaplan, Adam...        875
Kaplan, Anne.................       875     Kaplan, Barry..        875
Kapoor, Caitlin..............       875     Kapuler, Ph.D.,        875
                                             Alan.
Karabelnikoff, Sally.........       876     Karbaumer,             876
                                             Klaus.
Karen, Brown.................       876     Karhu, Vicky...        876
Karie, Piper.................       876     Karim, Samantha        877
Karnecki, Theresa............       877     Karnezis, Jason        877
Karr-Segal, Patricia.........       877     Kasbergen,             878
                                             Cornell.
Kasdin, Stefani..............       879     Kaseman,               879
                                             Stephen.
Kassner, Kathryn.............       879     Kastle, Lindsay        879
Kathy, Wallenta..............       879     Katinsky,              879
                                             Matthew.
Katz, Barb...................       880     Katzenmeyer,           880
                                             Paula.
Kaufman, Lucy................       880     Kavanagh,              880
                                             Andrew.
Kavanagh, Maureen............       880     Kawa, Judith...        881
Kaye, Sheila.................       881     Keane, Meghan..        881
Kearnon, Landis..............       881     Keasbey, Edie..        881
Keating, Suzanne.............       882     Kegerize, Carol        882
Kegler, Lori.................       882     Keller, Karen..        882
Kelley, Dorinda..............       882     Kelley, Erin...        883
Kellogg, Jane................       883     Kellogg, Tracey        883
Kelly, Ann...................       883     Kelly, C.......        883
Kelly, Daniel................       883     Kelly, Jessica         884
                                             and Kasey.
Kelly, Margaret..............       884     Kelly, Patricia        884
Kelly, Thomas................       884     Kelly, William         886
                                             H..
Kelly Wright, Monica.........       890     Kempe, Vickie..        890
Kennedy, Christy.............       890     Kennedy,               890
                                             Richard.
Kennedy, Samuel..............       890     Kennedy,               890
                                             Tangela.
Kennenwood, Evelyn...........       891     Kennis, Lois...        891
Kent, Diane..................       891     Kent, Rebecca..        891
Kent, Zach...................       891     Kepner, Susan..        891
Keramaty, Valery.............       892     Kerr, Susan....        892
Kershaw, Lucas...............       892     Kertess,               892
                                             Margaret.
Kidd, Chestina...............       893     Kierstead,             893
                                             Susan.
Kiger, Chip..................       893     Kilchenstein,          893
                                             Kim.
Kiley, Patrick...............       893     Killeen, Maggie        894
Killinger, Deborah...........       894     Killingsworth,         894
                                             Carol.
Kilpatrick, Michael..........       894     Kim, Julie.....        896
Kimball, Clark...............       896     Kimball,               897
                                             Marlene.
Kimble, Kim..................       897     Kim-Geyer,             897
                                             Raena.
Kimmes, Sarah................       897     Kimsey, Rebecca        897
King, Elisa..................       897     King, Gayle....        898
King, Jean...................       898     King, Melanie..        898
King, Richard................       898     King, Wes......        898
Kinnaman, Rasha..............       898     Kinnie, Yannick        899
Kintner, Christine...........       899     Kinziger, Paula        899
Kiplinger, Sutton............       899     Kipp, James....        899
Kiritsis, Justin.............       900     Kirkilis,              900
                                             Alexandra.
Kirkpatrick, Mark............       900     Kirsanow, Lily.        900
Kirsch, Alison...............       900     Kirschbaum,            901
                                             Saran.
Kirschenman, Merlin..........       901     Kirtz, Harold..        901
Kissel, John.................       902     Kitrel, Andrea.        902
Kitsmiller, Janet............       902     Kittredge, Kim.        902
Kittrell, Donna..............       902     Kjono, Pamela..        902
Klahn, Sandra................       903     Klauer, Helmut.        903
Kleckler, Jan................       903     Klee, Amy......        903
Klee, Marjorie...............       903     Kleihauer,             903
                                             Paula.
Klein, Ann...................       904     Klein, Henry...        904
Klein, John..................       904     Klein, Judith          905
                                             E..
Klein, Kirsten...............       905     Klein, Molly...        905
Kleinwolterink, Lisa.........       905     Kleisinger,            905
                                             Laurie.
Klemp, Kenneth...............       906     Kliewer, Dr.           906
                                             R.H..
Kline, Larry.................       906     Klock, Angel...        906
Kluson, Robert...............       907     Knight, Renee..        908
Knoll, Anne..................       908     Knollenberg,           908
                                             Kimberly.
Knox, Connie.................       908     Knox, Kate.....        908
Knuth, Margaret..............       909     Knutson,               909
                                             Rosemary.
Knutzen, David and Betty.....       909     Kocsis, Joan...        909
Koda, Sperie.................       909     Koegel, Amy....        910
Koelsch, Matthew.............       910     Koenig, Ron....        910
Kokai, Elaine................       910     Kolber, Regina.        910
Kollar, Susan................       911     Konigsbauer,           911
                                             Steve.
Konkus, Claudia..............       911     Koon, Kitty....        911
Koplo, Harv..................       911     Kopp, Marilyn..        911
Korn, Meryle A...............       912     Koschmeder,            912
                                             Teresa.
Kosek, Kate..................       912     Koshik, Debi...        912
Kovitz, Johanna..............       912     Kowalewski,            913
                                             Douglas.
Kowalski, Kelly Ann..........       913     Kozak, Michael.        913
Kozel, Constance.............       913     Kozlowski,             913
                                             David.
Kozma, John..................       914     Kraemer,               914
                                             Marylou.
Kraft, Diane.................       914     Kraker, Marylin        915
Kramer, Ann..................       915     Kramme, Joel...        915
Kran, Bruce..................       915     Kranz, Greta...        915
Krasner, Michael.............       915     Krause, C.E....        916
Kravitz, Harold..............       916     Kreiter,               916
                                             Clarence.
Krieger Cottingham, Rebecca..       916     Krivin, Susan..        917
Kromminga, Geri..............       917     Kronenberg,            917
                                             Esther.
Krosnoff, Cam................       918     Krueger, Dianne        918
Krueger-Jackson, Frances.....       918     Krug, Ryan.....        919
Kruger, Robert...............       919     Krupnick, Wendy        919
Kruse, Scott.................       919     Kuehl, William.        919
Kuhns, Sara..................       920     Kukla, Hilary..        920
Kukla, Pamela................       920     Kukuczka, Jerry        920
Kumiega, Walter..............       920     Kunde, Amy.....        921
Kunisch, Harold J............       921     Kurland, Mike          921
                                             and Miriam.
Kurtz, Steven................       921     La Course,             921
                                             Michael.
Lack, Deanna.................       922     Ladd, Barbara..        922
LaDuc, Ryan..................       922     Laduke, Shawn..        923
Lafaye, Michelle.............       923     LaFreniere,            924
                                             Jioanne.
Laing, Barbara...............       924     Lakoff, George.        924
Lam, Theresa.................       925     L'Amarca, Joe..        925
Lambert, Gwen................       925     Lambert, Kris..        925
Lambrecht, Ida...............       926     Lamers, Vanessa        926
Lamkin, Tara.................       926     LaMothe, Tanya.        926
Lampi, Michael...............       926     Lampman, Gary..        927
Lampman,R.N., Marilee........       927     Landes, Rosanne        927
Landfried, Lauren............       927     Landis, Molly..        928
Landon, Joann................       928     Landry, Arthur.        928
Landry, Gisele...............       929     Landusky, Paul.        929
Lane, Abbie..................       929     Lane, Craig....        929
Lane, Daryn..................       929     Lane, Ginny....        930
Langer, Ph.D., Barb..........       930     Langford,              931
                                             Charles.
Langham, Shannon.............       931     Langhans,              931
                                             Judith.
Langhorne, Elizabeth.........       931     Langteau,              931
                                             Margaret.
Lannin, Susan................       931     Lanton, Ruth...        932
LaPorta, Angela..............       932     Larimore, Anna         933
                                             Lee.
Larkin, Gloria...............       933     Larrabee, Sarah        933
Larrieu, John................       933     Larsen, Denise.        933
Larsen, Winifred.............       934     Larson, Linda..        934
LaSalla, Linda...............       934     Lasensky,              934
                                             Elizabeth.
 LaSister, Coy M.............       934     Laster, Jr.,           935
                                             Ira.
Lauchlan, Jennifer...........       935     Laudenslager,          935
                                             John.
Lauder, Maureen..............       935     Laughingheart,         936
                                             Angela.
Laughlin, Rose...............       936     Lavine, Suzanne        936
Law, Suzanne.................       936     Lawrance, Liana        936
Lawrence, Chris..............       936     Lawrence,              937
                                             Tracey.
Lawry, Trina.................       937     Layer, Linda...        937
Layne, Betty.................       937     Layne, Linda...        938
Lazarski, Steve..............       938     Le Du, Holly...        938
Lea, Andrea..................       939     Leaf, Lucy.....        939
Leahy, Michael...............       939     Leahy, Nancy           939
                                             and Gary.
Leanza, Victoria.............       939     Leard, Lane....        940
Leavy, Jacqueline............       940     LeBer, Richard.        940
LeBlanc, Elaine..............       940     Ledden, Dennis.        941
Ledoux, Michele E............       941     Lee, Anthony...        943
Lee, Gloria..................       943     Lee, Rena......        943
Lee-Andersen, Charlotte......       944     Lee-Hazelton,          944
                                             Cavana.
Legault, Tina................       944     Legene, Anne...        944
Lehecka, Emily...............       944     Lehman, Heather        945
Lehman, Marian...............       945     Lehman, Steve..        945
Lehrer, Silvia...............       945     Leigh, Avra....        945
Leigh, Gary..................       945     Leikas, Len....        945
Leite, Susan.................       946     Lemieux, Joseph        946
Lemke, Janie.................       946     Lemon, Edward..        946
Lemons, Christa..............       946     Lempart, Lukasz        947
Lenert, Heidi................       947     Lennox,                947
                                             Patricia.
Lentz, Kelly.................       947     Leon, Nick.....        948
Leonard, Billie..............       948     Leonard, Joan..        948
Leonard, Rita................       948     Leopold, Sam...        948
Lepore, Lorraine.............       948     Lescher, Gail..        949
Lester, Daniel...............       949     Lester, Laura..        949
Lester, Russ; Jennifer              949     LeVasseur,             950
 Moffitt.                                    Courtney.
Leve, Joslyn.................       950     Levin, David...        950
Levin, Deborah...............       950     Levin, Gordon..        950
Levin, Penny.................       951     Levine-Small,          951
                                             Donna.
Leviton, Peggy...............       951     Lewis, Corinna.        952
Lewis, Donald................       952     Lewis, Graham..        952
Lewis, Jill..................       952     Lewis, Lawrence        952
Lewis, Patrick...............       953     Lewis,                 953
                                             Priscilla.
Lewis, Vicki.................       953     Lewman,                953
                                             Marianne.
Leyton, Oliva................       954     Lia, Barry.....        954
Liang, Linda.................       954     Libert, Wendie.        954
Libow, Robin.................       954     Lichatz,               955
                                             Julianna.
Lichtenberg, Regan...........       955     Lieberman,             955
                                             Yehudit.
Lillie, Michael..............       955     Lilliquist,            955
                                             Michael.
Limperes, David..............       956     Lindekugel,            956
                                             Laura.
Lindenmayer, Justin..........       956     Lindow, Denise.        956
Lindstrom, Annie.............       956     Linebaugh,             956
                                             Andrea.
Lines, Julian................       957     Link, Noah.....        957
Linton, Adrian...............       957     Lipham, Rita...        958
Lipkin, Suzanne..............       958     Lish, Vicki....        958
Liston, Lynn.................       958     Littaua, Merci.        958
Littell-McWilliams, Kara.....       959     Little, Anthony        959
Livermore, Shanna............       959     Livingston,            959
                                             Helen.
Livingston, Richard..........       959     Livingston,            960
                                             R.D., Sally.
Lizanich, Beverly............       960     Lizer, Deja....        960
Lloyd, Jane..................       961     Lloyd, Kurt....        961
Loar, Anna...................       961     Lobdell, James.        961
LoBue, Margaret..............       961     Locker, Georgia        962
Lockhart, Trent..............       962     Lockington,            962
                                             Cory.
Lockspeiser, Diane...........       962     Loeffler,              962
                                             Edward.
Loftfield, Anne..............       962     Logan, Corinne.        963
Logan, Shane.................       963     Logan Smith,           963
                                             Kathleen.
Lohrmann, Sharon.............       965     Loken, Rebecca.        965
Lombardo, Robert.............       965     LoMonico,              965
                                             Scheryl.
Lomp, Donna..................       966     Long, David....        966
Long, Dwight.................       968     Long, Gloria...        969
Long, Holly..................       969     Long, John.....        969
Long, Valerie................       969     Longley, Toni..        969
Longley, P.E., B.C.E.E., Dr.        970     Loomis, Adam...        971
 Karl.
Loos, Jennifer...............       971     Lopes, Loren...        971
Lopez, Elleri................       972     Lopez, Laura...        972
Lopez, Stacia................       972     Lopez, Thomas..        973
L'Orange, April..............       973     Loren, Wen.....        973
Loring, Lloyd................       974     Lorio, Joe.....        974
Louise, Sabrina..............       974     Love, Kathryn..        974
Love Lippman, Arlene.........       974     Loveday, George        974
Low-Beer, Sheila.............       975     Lower, Stephan.        975
Lowery, Rebecca..............       975     Lowrance, Sanna        975
Lowrey, Emma.................       976     Lowry, Lyn.....        976
Lowry, Sarah.................       976     Lubetkin, Carol        976
Lubin, Jill..................       976     Luca, Michael..        977
Lucchesi, Krista.............       977     Luce, Barbara..        977
Luckert, Ursula..............       977     Lueders, Nancy.        977
Luib, Dr. Catherine..........       977     Luley, Caroline        978
Lumbard, Neil................       978     Lumpkin, Kirk..        978
Lundin, Rhonda...............       978     Lundy, Kathleen        978
                                             L..
Lunemann, Patrick............       979     Lung, James....        979
Lunn, Christopher............       980     Luongo, Joanne.        980
Lupher, Grant................       980     Luria, Mayra...        980
Luscomb, Deborah.............       980     Lussier, Marc..        980
Lutes, Essie.................       981     Luton, Harry...        981
Luttrell, Laura..............       981     Lux, Patricia..        982
Lux-Kosiewicz, Lynnea........       982     Luzwick, Aimee.        982
Lyle, Deborah................       982     Lynch, David...        982
Lynch, Jill..................       983     Lynch, Martha..        983
Lynch, Megan.................       983     Lynn, Marcy....        984
Lynn, Matthew................       984     Lynn, Meghan...        984
Lyon, Brenda.................       984     Lyon, Janet....        985
Lyons, Curt..................       985     Lyons, Shannon.        985
Ma, Charles..................       985     MacDonald, Joan        985
                                             and Wallace.
Macdonald, JoAnn.............       985     MacDonald, Leo.        985
MacDonald, Myra..............       986     MacDonald              986
                                             Hawke, Shaun.
MacDougall, Marie............       986     MacGregor, Adam        986
MacGregor, Susanna...........       986     MacKenzie,             987
                                             Therese.
MacLeod, Deb.................       987     MacLeod, Dianna        987
Maciborka, Margaret..........       987     Maciel,                987
                                             Christine.
Macy, Nancy..................       987     Maddox, Tia....        988
Mader, Monica................       988     Madigan,               988
                                             Carleen.
Madsen, Rebecca..............       988     Maehr, Jeff....        988
Maeroff, Rachel..............       989     Magee, Jon.....        989
Magiasis, Jimmy..............       990     Maglione,              990
                                             Jennifer.
Magnuson, Angela.............       990     Maguire, Jeanne        990
Mahamdi, Cynthia.............       990     Mahler,                991
                                             Margaret.
Mahoney, Kate................       991     Maille, Valerie        991
Main, Claudette..............       991     Maine, Gretchen        991
Mains, Donna.................       992     Maiurro,               992
                                             Christopher.
Major, Judy..................       992     Makarevich,            992
                                             Iggy.
Maker, Janet.................       993     Malcore, Anne..        993
Malin, Edith.................       993     Mallery, Robin.        993
Malloy, Janie................       993     Malnati, Peggy.        994
Malone, Ann..................       994     Manalili,              994
                                             Barbara.
Manalo, Paula................       994     Manasia, Florie        995
Mancuso, William.............       995     Mandel, Melissa        995
Mandell-Rice, Bonnie.........       995     Mangan, Niall..        996
Mann, Michelle...............       996     Mann, Patti....        996
Manno, Sarah.................       996     Mansell,               996
                                             Callista.
Mansfield, Steven............       996     Manus, Deborah.        997
Maquilan, Al Francis.........       997     Maram,                 997
                                             Nathaniel.
Marchioli, Marc..............       997     Marcus, Merle          997
                                             Ziporah.
Margolis, Jean...............       997     Mariano,               998
                                             Jennifer.
Marie, Lorraine..............       998     Marinkovich,           998
                                             Mart.
Mark, Carole.................       998     Marko, Lynne...        998
Markowicz, Bertha............       999     Markowitz,             999
                                             Laura.
Marks, Joan..................       999     Marner, Eugene.        999
Marsh, Mary..................       999     Marsh, Nancy...        999
Marshall, Carolyn............      1000     Marshall, Lisa.       1000
Marshall, Thomas.............      1000     Marsman, Amy...       1001
Martens, Brian...............      1001     Martens, Klaas.       1001
Martin, Amy..................      1001     Martin, Avril..       1002
Martin, Barbara (NY).........      1002     Martin, Barbara       1002
                                             (MA).
Martin, Byron................      1002     Martin, Cody...       1003
Martin, Emilie...............      1003     Martin, Holly..       1003
Martin, Jeff.................      1003     Martin,               1003
                                             Katherine.
Martindale, Gayla............      1004     Martin-Errick,        1004
                                             Rena.
Martino, Lisa................      1004     Martinovic,           1004
                                             Lisa.
Martucci, Janet..............      1004     Marvin, Tamar..       1004
Masanz, Timothy..............      1005     Masilko,              1005
                                             Michael.
Mason, Kathryn...............      1005     Mason, Kirby...       1005
Mason, Marilyn...............      1005     Mason, Richard.       1006
Masoner, Barbara.............      1006     Masters, Areta.       1006
Mastro, Jim..................      1006     Mastrostefano,        1006
                                             Cassandra.
Mateen, Haneefa..............      1007     Matejcek, Lynne       1007
Mateo, Beatriz Ivelisse......      1007     Mathews, Adam..       1008
Mathews, Christine...........      1008     Mathews,              1008
                                             Jennifer.
Mathews, Lillian.............      1008     Mathews,              1008
                                             Millard.
Mathis, Bruce................      1009     Matoian,              1009
                                             Richard.
Matsuda, Laurel..............      1010     Matthes, Janus.       1011
Matthews, Thomas.............      1011     Mattson, Judith       1011
Maurer, Scott................      1011     Maurer, Yevette       1011
Mawji, Debora................      1012     Maxon, Dawn....       1012
May, Andrew..................      1012     May, Emily.....       1012
May, Tammy...................      1013     Mayberry,             1013
                                             Sheila.
Mayer, Corey.................      1013     Mayer, Glenna..       1013
Mayerat, Robin...............      1014     Maynard-Bible,        1014
                                             Lisa.
Mayo, Nancy..................      1014     Mays, Linda....       1014
Mazer, Rochelle A............      1014     Mazeroll,             1014
                                             Heather.
Mazzaferro, Deb..............      1015     Mazzitello,           1015
                                             M.S.W.,
                                             L.I.C.S.W.,
                                             John.
McAdam, Gloria...............      1015     McAndrew, Dr.         1016
                                             Philip.
McArthur, Kris...............      1016     McAuliffe,            1016
                                             Cynthia.
McBride, Lynne...............      1016     McBride, M.....       1017
McBride, Virginia............      1017     McCabe, Jeff...       1017
McCabe, Jody.................      1017     McCabe,               1018
                                             Michelle.
McCaffrey, Marie.............      1018     McCague, Audrey       1018
McCammon-Hansen, Nancy.......      1018     McCann, Annika.       1019
McCann, Sheri................      1019     McCarron, Andy.       1019
McCarter, Maureen............      1019     McCarthy, Caly.       1019
McCarthy, James..............      1020     McCarthy,             1020
                                             Suzanne.
McCartney, Kim...............      1020     McCausland,           1020
                                             Rachel.
McChesney, Larry.............      1020     McClain, Mikel.       1021
McClave, Lois M..............      1021     McClave,              1021
                                             Richard.
McClave, Robin...............      1021     McClave, Scott.       1021
McCleave, Jeff...............      1022     McClellan,            1022
                                             Michael.
McClelland, Frances..........      1022     McClintock,           1022
                                             B.A..
McCluskey, Sue and Brian.....      1023     McConnell, Karl       1023
McCool, Melissa..............      1023     McCormack, Kim.       1023
McCormick, Sarah.............      1023     McCracken,            1024
                                             Gloria.
McCracken, Grant.............      1024     McCullah,             1024
                                             Connie.
McCullah, Dennis.............      1024     McCulley, Karen       1025
McCulloch, Martha............      1025     McDaniel, Abbi.       1025
McDaniel, Colleen............      1025     McDermott,            1025
                                             Pamela.
McDonnell, Margaret..........      1026     McFadden,             1026
                                             Miriam.
McFadden, Steven.............      1026     McFarland, Pat.       1026
McGill, Melissa..............      1027     McGillivary, M.       1027
McGinley, Kristine...........      1027     McGlashan,            1027
                                             Marie.
McGlynn, Richard.............      1027     McGowan,              1027
                                             Katherine.
McGowan, Laura...............      1028     McGrath,              1028
                                             Elisabeth Ann.
McGrath, Michelle............      1028     McGraw, Sarah..       1028
McGreevy, Donna..............      1029     McGregor, Molle       1029
McGuire, Donna-Christine.....      1029     McGuire, Mary..       1029
McGuire, Russell.............      1029     McHold, Sharon.       1029
McHugh, Patricia.............      1030     McIndoo,              1030
                                             Rachael.
McInerney, Matt..............      1030     McIntosh, Leah.       1031
McIntyre, Rene...............      1032     McKeen,               1032
                                             Katherine.
McKeown, Mary................      1032     McKiernan-            1032
                                             Allen, Genesis.
McKim, Mark..................      1033     McKinney,             1033
                                             Martha.
McKnight, M.S., R.D., L.D.,        1034     McLachlin,            1034
 Pat.                                        Mariella.
McLean, Alex.................      1034     McLean, L......       1034
McLellan, Dr. R.G............      1034     McLinden,             1034
                                             Robert.
McMahon, Betsy...............      1035     McManus, Dennis       1035
McManus, Megan...............      1035     McMichael, Ryan       1035
McMullin, Marnie.............      1036     McMurray, Jean        1036
                                             G..
McNabb, Patricia.............      1038     McNair, Amy....       1039
McNeely, Claire..............      1039     McPeak-LaRocca,       1039
                                             Trish.
McPhail, Tristian............      1039     McPhee, Marnie.       1039
McPherson, Holly.............      1040     McQuade, Pat...       1040
McSherry, Susan..............      1040     McTague,              1040
                                             Winston.
McTeer, Elizabeth............      1040     McVey, Jan.....       1040
McWaters, Trisha.............      1041     Mead, Morgan...       1041
Mead, Nathaniel P............      1041     Meader, Pao....       1041
Meadows, Anne................      1041     Meadows, Claire       1041
Meadows, Teri................      1042     Medina, A.E....       1042
Mednick, Hale................      1042     Medved, Lex....       1042
Meek, Leonor.................      1042     Meghani, Humera       1042
Meier, Diane P...............      1043     Meigs, Jane....       1043
Meisler, Miriam..............      1043     Mellentine,           1043
                                             Debra.
Melli, Rosemary..............      1043     Meltzer, Gwenn.       1044
Melvin, Nancy................      1044     Memhardt,             1044
                                             Joanne.
Mena, Patricia...............      1044     Menard, Marcy..       1044
Mendoza, Joseph..............      1045     Mensing, Max...       1045
Mercado, Elizabeth...........      1045     Merchant, Leone       1045
Merhar, Robert...............      1046     Merlino,              1046
                                             Lawrence.
Merook, Robyn................      1046     Merriman,             1046
                                             Edward.
Merton, Timothy..............      1046     Messick, Gene..       1047
Metz, John...................      1047     Meyer, Karen B.       1047
Meyer, Melanie...............      1048     Meyer, Patricia       1048
Meyer, Ronald................      1048     Micek, Ben.....       1048
Michaels, Alexis.............      1048     Michaels, Dale        1049
                                             Ekahi.
Michelli, Nancy..............      1049     Mickel, Kathy..       1049
Mickelson, Charles...........      1050     Middlebrook,          1050
                                             Melissa.
Middleton, David.............      1050     Miflin, Clare..       1050
Migeot, Christine............      1050     Mike, Jared....       1051
Milcarek, Thomas.............      1051     Milcowitz,            1051
                                             Robin.
Millard, Michael.............      1051     Miller,               1051
                                             Antoinette.
Miller, August...............      1052     Miller, Ben....       1052
Miller, David................      1053     Miller, Debra..       1053
Miller, Jennifer.............      1053     Miller, Jerre..       1053
Miller, Jessica..............      1053     Miller, Joan...       1054
Miller, Kathryn..............      1054     Miller, Kieru..       1055
Miller, Leah.................      1055     Miller, Linda..       1055
Miller, Lissa................      1055     Miller, Mark J.       1056
Miller, Nancy................      1056     Miller, Pam....       1056
Miller, Patricia.............      1056     Miller, Robert.       1056
Miller, Steve................      1057     Miller, Tamra..       1057
Miller, Tara.................      1057     Miller-               1057
                                             Nogueira,
                                             Ehren.
Miller-Stigler, Susan........      1058     Millete, Kari..       1058
Milliren, Pat................      1058     Millis, Henry..       1058
Mills, Andrea................      1058     Mills, Beverly.       1059
Mills, Igalious..............      1059     Mills, Kerry...       1059
Mills, Michael...............      1059     Mills, Saskia..       1060
Mills, Wanda.................      1060     Milosevich,           1060
                                             Karla.
Minde, Peter.................      1060     Minder, Marilyn       1060
Miotto, Madeline.............      1060     Mirabal, Tess..       1061
Mires, Rich..................      1061     Mitchel, Teresa       1061
Mitchell, Alexander..........      1061     Mitchell, Brent       1061
Mitchell, Clint..............      1061     Mitchell,             1061
                                             Edward.
Mitchell, Joan...............      1062     Mitchell, John.       1062
Mitchell, Robin..............      1062     Mitro, Eileen..       1062
Mittelberger, Alison.........      1062     Mittenberg,           1063
                                             Mike.
Mlynczak, Raymond............      1063     Moaton, Anthony       1063
Moe, Valerei.................      1063     Moellering,           1063
                                             Ph.D., Doug.
Mohbacher, Alex..............      1064     Mohen, Anthony.       1064
Molatch, Kathleen............      1064     Mole, Sally....       1064
Moller, Peter G..............      1065     Moller, Renee..       1065
Moloney, Kathy...............      1065     Moltzen, Kelly.       1065
Mondor, Shannon..............      1066     Mone, Carol....       1066
Money, Barbara...............      1067     Mongoven, Ann..       1067
Monjoy, Kim..................      1067     Monroe, Gloria.       1067
Monroe, Richard..............      1067     Monserrat,            1067
                                             Ariel.
Monson, Ruth.................      1068     Montano,              1068
                                             Julianne.
Montanus, Lisa...............      1068     Monteiro,             1068
                                             Darrin.
Montgomery, Chris Ellen......      1070     Montgomery,           1070
                                             Deborah.
Montgomery, Edith............      1070     Montgomery,           1070
                                             Lanelle.
Montgomery, Lynn.............      1070     Montgomery,           1070
                                             Patti.
Moodie, Jane.................      1071     Moody, Allen...       1071
Moomaw, Nathan...............      1071     Mooney,               1072
                                             Elizabeth.
Mooney, Len..................      1072     Moore, Alissa..       1072
Moore, Brian.................      1073     Moore, Carrie..       1073
Moore, Emilie................      1073     Moore, Emily...       1073
Moore, Lauren................      1074     Moore, Leslie..       1074
Moore, Lorraine..............      1074     Moore, Lynn....       1074
Moore, Michele...............      1075     Moore, Terri...       1075
Moorman, Rachel..............      1075     Moose, Mary           1075
                                             Etta.
Moran, Jana..................      1075     Morford,              1076
                                             Patrica.
Morgan, Alexandra............      1076     Morgan, Angel..       1076
Morgan, Bill.................      1076     Morgan,               1076
                                             Christopher.
Morgan, William..............      1077     Morgese,              1077
                                             Richard.
Morin, Toochis...............      1077     Morley, Robert.       1077
Morner, Gabriel..............      1077     Morotti, Gloria       1078
Morretta, Rosemary...........      1078     Morrigan,             1078
                                             McKenna.
Morris, Chrys................      1078     Morris,               1078
                                             Elizabeth.
Morris, Gary.................      1078     Morris, John...       1079
Morris, Mary.................      1079     Morris, Nancy..       1079
Morris, Peter................      1079     Morris, Shirley       1079
Morrison, Chad...............      1080     Morrison,             1080
                                             Cheryl.
Morrison, Daniel.............      1080     Morrison,             1081
                                             Leslie.
Morrison, M.D., Roger; Nancy       1081     Morrissey,            1081
 Herrick, P.A..                              Bernard C..
Morrissey, Christine.........      1081     Morrissey,            1081
                                             Doredn.
Morrow, Samantha.............      1082     Morse, Anne           1082
                                             Juniper.
Morse, Elizabeth.............      1082     Morse, Linda...       1082
Morse, Stacy.................      1082     Mosca-Clark,          1083
                                             Vivianne.
Moscarella, Linda............      1083     Moser, Rich....       1083
Moshier, Melanie.............      1083     Moskowitz,            1084
                                             Robert.
Moss, Andrew.................      1084     Mosser, Laura..       1084
Motenko, Stephanie...........      1084     Moton, Jerome..       1084
Moughalian, Sato.............      1085     Moulder, Linda.       1085
Moxley, Laurie...............      1085     Moyer, Wayne...       1085
Mucklow, David...............      1085     Mueller, Dawn..       1086
Mueller, George B............      1086     Mueller, Mark..       1086
Muhly, Ernest J.P............      1086     Mukasa, Haruko.       1087
Mulcare, James...............      1087     Muller, June...       1087
Muller, Kris.................      1087     Mulligan, Renee       1087
Mullins, Cathleen............      1088     Mullins, M.J...       1088
Muniz, Beatriz...............      1088     Murakami,             1088
                                             Hideyuki.
Murdoch, Terri...............      1088     Murdock, Sara..       1088
Murnen, Rian.................      1089     Murphree, Sandy       1089
Murphy, Brian................      1090     Murphy, Erica..       1090
Murphy, Joy..................      1090     Murphy, Maureen       1090
Murray, Juan.................      1090     Murti, Vasu....       1091
Musella, Chris...............      1093     Musil, Natasha.       1093
Mussen, Alan.................      1094     Mutch, Mary....       1094
Myer, Georgia................      1094     Myers, Connie..       1094
Myers, David.................      1094     Myers, Kermit..       1095
Myers, Rene..................      1095     Myers, Sheri...       1095
Mysliwiec, Renee.............      1095     Nachazel-Ruck,        1095
                                             Jane.
Nagel, Ulrike................      1096     Nagy, Alexandra       1096
Nakos, Aristides.............      1097     Nance, Kathy...       1097
Naramore, Raven..............      1097     Nardo, Lisa....       1097
Nardone-McDonough, Diane.....      1097     Nash, Charlene.       1098
Nash, Janet..................      1098     Nason, Robin...       1098
Nassar, Gretchen Brooks......      1098     Nather, Christy       1099
Nava, Camille................      1099     Naylor, Kelsey.       1100
Neal, Karen..................      1100     Needham, Kyle..       1100
Neeser, Tawni................      1100     Neher, Martia..       1100
Nehl, Helga..................      1101     Nehl, Jenna....       1101
Neifert, Terri...............      1101     Neiman, Carol..       1101
Nelms, Zachary...............      1102     Nelson, David..       1102
Nelson, Greg.................      1102     Nelson, Jon....       1103
Nestaval, Nancy..............      1103     Neuger, Judy...       1103
Neville, Marcy...............      1103     Newberry, James       1103
Newcomer, Ariana.............      1103     Newcomer, Dawn.       1104
Newell, Shellie..............      1104     Newmark, Leone.       1104
Newton, Cecelia..............      1104     Newton, Heather       1104
Newton, Joe..................      1104     Newton, Marilyn       1105
Nichols, Jeannie.............      1105     Nichols, Jenny.       1105
Nichols, William.............      1105     Nicholson,            1105
                                             Margaret
                                             ``Ka'imi''.
Nicholson, Norma.............      1106     Nicol, John....       1106
Nicola, Nikki................      1106     Nicolson, Anne.       1106
Niemann, Valerie.............      1107     Nienhaus,             1107
                                             Steven.
Nierrernard, Robert..........      1107     Nihart, Alison.       1107
Nikolaiev, Katherine.........      1107     Nishihara, June       1108
Noble, Denise................      1108     Noble, June....       1108
Nodell, Nancy................      1108     Noel, Susan....       1108
Nolen, Travis................      1109     Nordin, Kristof       1109
Nordmann, Katharina..........      1109     Nordquist,            1109
                                             Susan.
Norquist, Raun...............      1109     Norris,               1110
                                             Kaleopono.
Norris, Patricia.............      1110     Norris, Scott..       1110
Northrop, Kim................      1110     Norton, Dean...       1110
Nothdurft, Anja..............      1116     Notkin, Debbie.       1116
Notz, Phillip................      1116     Novell,               1116
                                             Christine.
Novick, Renae................      1117     Nowlin, Helen..       1117
Noyce, Michael...............      1117     Noyola,               1117
                                             Angelica.
Nudelman, Olga...............      1117     Null, Kathryn..       1118
Nunes, Sandy.................      1118     Nuschler, Jr.,        1118
                                             Gary.
O'Brien, Donald..............      1119     O'Brien,              1119
                                             Floretta.
O'Connell, Jen...............      1119     O'Connor,             1119
                                             Joseph.
O'Brien, Colleen.............      1119     O'Brien, James.       1120
O'Brien, Maureen.............      1120     O'Callaghan,          1120
                                             Patti.
O'Connell, Daniel............      1120     O'Connor, B....       1121
O'Connor, Lauretta...........      1122     O'Leary,              1122
                                             Cornelia.
O'Malley, Margaret...........      1122     O'Nan,                1122
                                             Elizabeth.
O'Neal, Julia................      1123     O'Neil, Rory...       1123
O'Neill, Patrice.............      1123     Oaden, Arthur..       1125
Oakes, John..................      1125     Oakes, Vinnie..       1125
Oberlin, Rebecca.............      1125     Oedel, Grace...       1125
Oehldrich, Jenny.............      1126     Oehler, Clark..       1126
Ogden, Alison................      1127     Ohlinger, Merle       1127
Ojeda, Alex..................      1127     Okun, Lewis....       1127
Olenik, Lance................      1128     Olexa, Emery...       1128
Olive, Diane.................      1128     Oliver, Lauren.       1128
Oliver, Leesa................      1129     Olivier, Paula.       1129
Olles, Amy...................      1129     Olsen, K.......       1130
Olsen, Karen.................      1130     Olsen, Lisa....       1130
Olson, Diane.................      1131     Olson, Judith..       1131
Olson, K.....................      1131     Olson, Kerwin..       1132
Olson, Lori..................      1132     Olson, Pam.....       1132
Onderdonk, Carole............      1132     Ordonez,              1132
                                             Elizabeth.
Ordway, Penny................      1133     Orecchio, C.N.,       1133
                                             H.H.C.,
                                             Christa.
Orfanakis, Nick..............      1133     Oriard, Pamela.       1133
Orlich, Dana J...............      1133     Orlinski,             1133
                                             Patricia.
Orlowsky, Mark...............      1134     Orr, Mary......       1134
Ortiz y Pino, Jerry..........      1135     Orton, Joan....       1135
Osborne, Tony................      1135     Oshiro, Alex...       1135
Oswald, Rudy.................      1135     Ott-Davis,            1135
                                             Kathleen.
Overall, Marie...............      1136     Overlock, Ashle       1136
Overstreet, Romy.............      1136     Overton,              1136
                                             Barbara.
Owens, Sheila................      1136     Oxborough,            1136
                                             Jennifer.
P., Miranda..................      1137     Pacifico,             1137
                                             Kimberly.
Padilla, Monica..............      1137     Page, Alice....       1137
Page, C. Jay.................      1137     Page, Nick.....       1138
Painter, Katherine...........      1138     Paisley, Lorna.       1138
Pakradooni, Jennie...........      1138     Palm, Laura....       1138
Palmer, Deborah..............      1139     Palmer,               1139
                                             Paulette.
Palmer, Reed.................      1139     Palmer, Tim....       1140
Palo, Nimai..................      1140     Palomino, R.N.,       1140
                                             Brita.
Palthe, Penni................      1140     Paltin, Sharon.       1141
Pancake, Colleen.............      1141     Panciera,             1141
                                             Jeffrey.
Pangborn, Della..............      1141     Papale, Victor.       1141
Papandrea, John..............      1142     Papell, Tom....       1142
Pappas, Nicholas.............      1142     Paprocki, David       1142
Papsdorf, Elizabeth..........      1142     Paquette, Wayne       1142
                                             M..
Parchen, Terra...............      1143     Parfrey, Laura.       1143
Paris, Bruno.................      1143     Paris, Danette.       1143
Parisi-Shaw, Eleanor.........      1144     Parisot, Debora       1144
Park, Soohyen................      1144     Parker, Deborah       1145
Parker, Jennifer.............      1145     Parker, Mary Jo       1145
Parker, Rana.................      1146     Parker, Richard       1146
Parker, Steve................      1146     Parker, Susan..       1149
Parker, Tammy................      1149     Parker                1149
                                             Stellato,
                                             Robert.
Parkes, Emmy.................      1149     Parman, Nancy..       1150
Parra, Pinito................      1150     Parrette, Joe..       1150
Parris, Jack.................      1150     Parry, Michael.       1150
Parsons, Patricia............      1150     Party, Deena...       1151
Pasekoff, Dorene.............      1151     Pasichnyk,            1151
                                             Richard.
Paskowicz, Dawn..............      1151     Pasquariello,         1151
                                             James.
Passmore, Joanne.............      1152     Pasternack,           1152
                                             JoAnn W..
Pastin, Susan S..............      1152     Patent, Greg...       1152
Patnode, Angela..............      1152     Patrick,              1153
                                             Cynthia.
Patterson, Donnyl............      1153     Patterson, Jona       1153
Patterson, Skye..............      1154     Pattison, Erik.       1154
Patton, Chris................      1154     Patton, Marlene       1154
Patton, Robert...............      1155     Pauker,               1155
                                             Morgaine.
Pauksta, Diana...............      1155     Paul, Brittany.       1156
Paul, Cherie.................      1156     Paul, Rosalie..       1156
Pauley, Stephen..............      1156     Pauls, Deborah.       1157
Paulson, Jerry...............      1157     Pawlacyk, Laura       1157
Paxton, Dr. Jack.............      1157     Paxton, Laramie       1158
Payne, Carol.................      1158     Payne, Lia.....       1158
Pea, Colleen.................      1159     Peachey, Sue...       1159
Pealstrom, Hannah............      1160     Pearlman,             1160
                                             Patricia.
Pearson, Donna...............      1160     Pearson, Ellen.       1160
Pearson, Michelle............      1160     Pearson, Rae...       1161
Pearson, Robyn...............      1161     Peck, Angela...       1161
Peck, Gloria.................      1161     Peck, Kevin....       1161
Pecoraro, Victoria...........      1161     Peel, Donna....       1162
Peele, Randy.................      1162     Peeler,               1163
                                             Patricia.
Peet, Joan...................      1163     Pehlke, Robert.       1163
Pelkey, Clare................      1163     Pelletier, John       1163
Pennington, Joni.............      1163     Pennington,           1164
                                             Sharla.
Perez, Leah..................      1164     Perez, Lilia...       1164
Perez, Martha................      1167     Perez, Veronica       1167
Perkins, Joseph..............      1167     Perkins, Karen.       1167
Perkins, Marie...............      1168     Pernyeszi, Joe.       1168
Pero, Joseph.................      1168     Perrette,             1168
                                             Julien Yannick.
Perricelli, Claire...........      1168     Perrin, Anne...       1168
Perrine, Nancy...............      1168     Perry, Heath...       1169
Perry, Linda.................      1169     Peters, Nancy..       1169
Petersen, Haley..............      1169     Petersen, Kelly       1170
Petersen, Sarah..............      1170     Peterson,             1170
                                             Andrew.
Peterson, Elizabeth..........      1170     Peterson,             1171
                                             Heather.
Peterson, Kelly..............      1171     Peterson, Lauri       1171
Peterson, Linda (CA).........      1171     Peterson, Linda       1171
                                             (OH).
Peterson, Mark...............      1172     Peterson,             1172
                                             Ronald.
Petruszak, Alexander.........      1172     Petty, Carlene.       1173
Pham, Irene..................      1173     Phelan, William       1173
Phelps, Benneth..............      1173     Phelps, Luellen       1174
Phillips, James..............      1174     Phillips, Susan       1174
Phinney, Cynthia.............      1174     Phipps, Holly..       1174
Phipps, JoAnna M.............      1175     Phipps, Leana..       1175
Phyle, Chad..................      1175     Picciuca,             1175
                                             Sebastiano.
Pickard-Richardson, Jana.....      1175     Picton, Rebecca       1176
Pieper, Christine............      1176     Pierce, Megan..       1176
Pierret, Dorothy.............      1176     Piersimoni,           1177
                                             Anna Marie.
Pieslak, Suzanna.............      1177     Pietro, Cheryl.       1177
Pile, Edward.................      1177     Pilon, Killeen.       1177
Pincince, Lucille............      1177     Pineda, Melisa.       1177
Pinedo, Damaris..............      1178     Pings, Martha..       1178
Pinkham, Carolyn.............      1178     Pinsky,               1178
                                             Charlotte.
Pintar, Matthew..............      1178     Pip, Reynolds..       1179
Piper-McClure, Amanda........      1179     Pisano, Tony...       1179
Pitcher, Patti...............      1179     Pitts, Cathie..       1179
Pizarro, Judy................      1179     Pjesky, Hope...       1180
Plain, Michelle..............      1180     Plaisance,            1180
                                             Desiree.
Plourde, Monica..............      1181     Plumb, Kate....       1181
Plummer, Donna...............      1181     Pocius, Felicia       1181
Podoll, Theresa..............      1182     Pohlschneider,        1182
                                             Margie.
Pokorny, Jeff................      1182     Poliquin,             1182
                                             Martha.
Pollard, Lisa................      1182     Pomeroy, Alaina       1183
Pomrenke, M.D., M.P.H.,            1198     Pontillo, Louis       1198
 M.A.T.S., Stefan.
Poole, Carol.................      1198     Pope, Anne.....       1198
Popolow, Robert..............      1198     Porter, Donald        1198
                                             J..
Porter, Karen................      1198     Porter, Maya...       1199
Portman, Anne................      1199     Posever,              1199
                                             Natalie.
Posey, Edye..................      1199     Potamites,            1200
                                             Katherine.
Potter, Erin.................      1200     Potter, Nancy..       1200
Potts, Clifton...............      1200     Poulsen,              1200
                                             Rebecca.
Powell, Michael..............      1200     Powell, William       1200
Powers, Ann..................      1201     Powers, Bruce..       1201
Powers, Heather..............      1201     Powers, Janet..       1202
Powis, Robin.................      1202     Poyant, Andrew.       1202
Prado, Jim...................      1202     Prather, Beth..       1202
Pratt, Christine.............      1202     Praus, Shannah.       1203
Pravda, Stewart..............      1203     Precopio, Donna       1203
Preston, Will................      1203     Price, Caitlin.       1203
Price, Jennifer..............      1203     Price, Ph.D.,         1204
                                             John.
Price, Judy..................      1204     Price, Kent....       1204
Price, Laurie................      1204     Price, Traer...       1204
Price, Wayne.................      1205     Priebe,               1205
                                             Elizabeth.
Priest, Wanda................      1205     Prileson, Eric.       1205
Prillaman, H. Bruce..........      1206     Prindle, Pamela       1206
Pringle, Bruce...............      1206     Pringle, Stacy.       1206
Prinz, Johni.................      1206     Pritchard,            1207
                                             Gralin.
Probasco, Brenda P...........      1207     Probst, Kelly..       1207
Prochaska, Tom...............      1207     Proctor, Chris.       1207
Proctor, Geraldine...........      1208     Proctor, John..       1208
Proffitt, Dennis.............      1208     Proffitt, Robin       1208
Propster, Diane..............      1208     Public, Jean...       1208
Puch, Debbie.................      1209     Puckett, Susan        1209
                                             Lang.
Puente, Martha...............      1209     Pugh, Rene.....       1209
Puhl, Debbie.................      1209     Purdon, Andrea.       1210
Putnam, Barbara..............      1210     Putz, Ph.D.,          1210
                                             Herbert.
Pyle, Pennie.................      1211     Quaid, Charlie.       1211
Quattro, Susanne.............      1211     Quattrochi,           1211
                                             Gina.
Quattrochi, Lisa.............      1211     Quest, M.A.....       1212
Quick, James.................      1212     Quillio, Susan.       1212
Quinn, Jennifer..............      1212     Quintal, Laurie       1212
Quirk, M.D., Ninu-Alexandri..      1212     R. de Miranda,        1213
                                             Ph.D., Yvonne.
Raabe, Seth..................      1213     Rabey, John....       1213
Rabkin, Sarah................      1213     Race, Adam.....       1214
Rachels, Raymur..............      1214     Rackley, Sean..       1214
Racoosin, Esther.............      1214     Radei, Alison..       1214
Rahbari, Carol...............      1215     Rains, Pat.....       1215
Raiser, A. Lynn..............      1215     Raisor, Kelly..       1215
Rajagopalan, Ravi............      1215     Raker, Suzanna.       1215
Rakowski, Katherine..........      1216     Ramaci, Lisa...       1216
Ramaker, Julianne............      1216     Ramirez, Maja..       1216
Ramos, Patricia..............      1216     Ramsay, Sylvia.       1217
Ramsburgh, John..............      1217     Ranauro,              1217
                                             Brandon.
Rand, Katherine..............      1217     Randall, Eliza.       1218
Randallo, Crystal............      1218     Ranney, Earl...       1218
Rapp, Neville................      1218     Raschke, Lisa..       1219
Raskin Rosenthal, Judith.....      1219     Rather, Sarah..       1219
Ratliff, Donna...............      1219     Raulerson,            1219
                                             Teresa.
Rawlings, Maureen............      1220     Ray, Cindy.....       1220
Ray, Darryl..................      1220     Ray, Hilary....       1220
Ray, Katrina.................      1220     Ray, Linda.....       1220
Ray, Susan...................      1221     Ray, Turner....       1221
Razza, Carl..................      1221     Reardib,              1221
                                             Patricia.
Reavey, Sandy................      1221     Record, Laura..       1221
Redding, Carmen..............      1222     Redig, Ann.....       1222
Redig, Robert & Kathy........      1222     Redman, Monique       1222
Redwine, Marilyn.............      1223     Reeck, Nancy...       1223
Reed, Anita..................      1223     Reed, Geoffrey.       1223
Reed, Jane...................      1223     Reed, Lois.....       1223
Reed, Rebecca................      1224     Reed, Robin....       1224
Reers, Michelle..............      1224     Rehorn, Rebecca       1224
Reichert, Christine..........      1225     Reid, Debra....       1225
Reida, Audrey................      1225     Reidy, Thomas..       1225
Reiff, Cheryl................      1225     Reiland, Jeanne       1225
Reilingh, Nick...............      1226     Reilly, Donna         1226
                                             Segreti.
Reilly, Erica................      1226     Reilly, Joanne.       1226
Reis, Jackie.................      1226     Reis, Matthew..       1226
Reischman, Shirley...........      1227     Rempas, Amy....       1227
Renea, Stephanie.............      1227     Rennacker, Ann.       1227
Repp, Sharon.................      1227     Respalje, Terri       1228
Rex, Linda...................      1228     Reyher, David..       1228
Reynaldo, Pilar..............      1228     Reynolds, Gary.       1228
Reynolds, Lisa...............      1228     Reynolds, Peter       1229
Rhea, Abagail................      1229     Rhoads,               1229
                                             Jennifer.
Rhoads, Kevin................      1229     Rhodes, Harry..       1229
Rhule, Dalia.................      1230     Riccio, Frank..       1230
Rice, David..................      1230     Rice, Ronda....       1230
Richard, Andrus..............      1231     Richard, Lester       1231
Richards, Vanessa............      1231     Richardson,           1231
                                             Debra.
Richardson, John.............      1231     Richardson,           1232
                                             Kevin.
Richel, Tamara...............      1232     Richison, Susan       1232
Richland, Shea...............      1232     Richmond,             1233
                                             Eileen.
Riddell, Sally...............      1233     Ridgard, Andrea       1233
Riersen, Louise..............      1234     Ries, Daniel...       1234
Ries, Shelley................      1234     Rietmann, Marie       1234
Riggins, Patricia............      1234     Riley, David...       1234
Riley, Diane.................      1235     Riley, Michelle       1237
Riley, Russell...............      1237     Riley, Pys. D.,       1238
                                             Inger K..
Rion, Michael................      1238     Rist, Julie....       1238
Ritchie, Steven..............      1238     Ritland,              1239
                                             Jessica.
Ritter, Cathy................      1239     Rittmeyer,            1239
                                             Wendy.
Ritzau, Kristin..............      1239     Rizoli,               1240
                                             Constance.
Robben, Carol................      1240     Robbins, Boz...       1240
Roberson, Ruth...............      1240     Roberson,             1240
                                             William.
Robert, Lisa.................      1241     Roberts, Dawn..       1241
Roberts, Dianne..............      1241     Roberts,              1241
                                             Katherine.
Roberts, Mason...............      1241     Roberts, Rachel       1242
Roberts, Teresa..............      1242     Robertson,            1242
                                             Patricia.
Robin, Vicki.................      1242     Robins, Rick...       1244
Robinson, Allie..............      1244     Robinson, Carol       1244
Robinson, D..................      1244     Robinson,             1245
                                             Frances.
Robinson, Gail...............      1245     Robinson,             1245
                                             Jeremiah.
Robinson, Kathleen...........      1245     Robinson,             1245
                                             Luetta.
Robinson, Lynn...............      1246     Robinson, Sean.       1246
Rocap, Kendra................      1247     Roche, Abby....       1247
Roche, Ken...................      1247     Roden, Greg....       1247
Rodgers, Laura...............      1247     Rodgers, Martha       1248
Rodgers-Clark, Bethany.......      1248     Rodman, Heather       1248
Rodriguez, Michael...........      1248     Roeck-                1248
                                             Akarkarasu,
                                             Iderah.
Roewe, Clarissa..............      1248     Rogers, Brianna       1249
Rogers, Terry................      1249     Rogers, Thomas.       1249
Rogowsky, Nina...............      1249     Roh, Kwanho....       1249
Rohrer, Cheryl...............      1250     Rojack, Carmen.       1250
Roland, Tanya................      1250     Roller, Sheryl.       1250
Roman, Nora..................      1250     Romano, Juliet.       1250
Romans, Lynne................      1251     Rome, Jonathan.       1251
Romero, Christina............      1251     Ronk, Anna.....       1251
Rontal, Howard...............      1251     Rooth, Thomas..       1251
Rose, Ammathyst..............      1252     Rose, Gail.....       1252
Rose, Hollis.................      1252     Rose, Sarah....       1252
Rose, Sheryl.................      1253     Rose, Victoria.       1253
Rose, M.D., Lawrence.........      1253     Rosen, Adele...       1253
Rosen, Andrea................      1253     Rosen, Barbara.       1253
Rosenberg, Diane.............      1254     Rosenberg, Jeff       1254
Rosenberg, Lisa..............      1254     Rosenthal,            1255
                                             Eleanor.
Rosenthal, Gregory...........      1255     Rosin, Carla...       1255
Ross, Angela.................      1256     Ross, Christy..       1256
Ross, Douglas................      1256     Ross, Jodi.....       1257
Ross, Ollie..................      1257     Ross, Robert...       1257
Rossi, Karen.................      1257     Roth, J. Ronald       1257
Roth, Stan...................      1258     Rothrock,             1258
                                             Janice.
Rothstein, Jennifer..........      1258     Rougeau, Pat...       1258
Rowan, Cathy.................      1259     Rowan, Thomas..       1259
Rowin, Sophia................      1259     Rowland, Karen.       1259
Rowlett, Kimberly............      1259     Rowley, Genny..       1260
Rowley, Marjorie.............      1260     Roy, Monika....       1260
Roy, Pam.....................      1260     Royal, Sharon..       1261
Royse-Flora, Roxanne.........      1261     Rubin, Deborah.       1261
Rubin, Mary-Beth.............      1262     Rubin, Melissa.       1262
Rubio, Gail..................      1262     Rubley, Ruby...       1262
Ruck, Claudia................      1262     Rucker, Kelly..       1262
Rudiger, Donna...............      1263     Rudnick, Luan..       1263
Rudnicki, Susan..............      1263     Rueb, John.....       1263
Ruf, Jonathan................      1263     Ruff, Victoria.       1264
Rufo, Lisa...................      1264     Ruiz, Chris....       1264
Rule, Colter.................      1264     Rumson, Rachel        1264
                                             Lyn.
Runnels, Marye...............      1265     Running, Shelly       1265
Runyan, Shannon & Kim........      1265     Ruprecht, John.       1266
Rush, Mackenzie..............      1266     Russ, Jeremy...       1266
Russ, Mark...................      1267     Russell, James.       1267
Russell, Julia...............      1267     Russell, Trevor       1267
Ryan, Anne...................      1268     Ryan, Donna....       1268
Ryan, Kate...................      1268     Ryan, Peter....       1268
Ryckebusch, Francoise........      1268     Saarikoski,           1268
                                             Kimberly.
Sabatini, Theresa............      1269     Sabol, Paul....       1269
Sackler, Laurie..............      1269     Sadler, Jim....       1269
Sadowsky, Jesse..............      1270     Sager, Thomas..       1270
Saito, Don...................      1270     Sakala, Steve..       1270
Salamon, Mark................      1271     Salans, Josh...       1271
Salazat, RayAnn..............      1271     Saleem, Teresa.       1272
Salomon, Mary................      1272     Salus, Penny...       1272
Salvage, Dr. Joyce...........      1272     Salz, Deborah..       1272
Sambor, Daniel...............      1273     Sample,               1273
                                             Christine.
Sampson, Kristina............      1273     Sampson, Rhys..       1273
Samuelson, Diane.............      1273     Sanborn,              1274
                                             Jennifer.
Sanchez, Marta...............      1274     Sandeen, Judith       1274
Sandel, Morris...............      1274     Sanders,              1274
                                             Jennifer.
Sanders, Julie...............      1275     Sanders,              1275
                                             Kendall.
Sangster, Wayne..............      1275     SanMiguel,            1275
                                             Dagny.
Santora, Sarah...............      1276     Santos, Janice.       1276
Santos, Omar.................      1276     Saravia, Jimena       1276
Sarbiewski, Stephen..........      1277     Sarnat, Marlene       1277
Sarraille, Marijeanne........      1277     Sarrazin, Tara.       1277
Sartor, Michelle.............      1277     Sasha, San Malo       1278
Satterwhite, Brian...........      1278     Sauer, Brian...       1278
Sauerhagen, Eric.............      1278     Saunders, Lois.       1278
Savarese, Christine..........      1279     Sawdon,               1279
                                             Rosemarie.
Sawtell, Cynthia.............      1279     Sawyer, Caryl..       1279
Saxton, Martha...............      1279     Saylor, Joni...       1279
Scalera, Lindsey.............      1279     Scanlon,              1281
                                             Deirdra.
Schad, Michael...............      1281     Schantz,              1281
                                             Cynthia.
Schechter, Alea..............      1281     Scheffler,            1282
                                             Bruno.
Schefter, Ken................      1282     Scheidler,            1282
                                             Jacob.
Schein, Donna................      1282     Schell, Sue....       1283
Schenkelberg, Doug...........      1283     Scherer, Amy...       1284
Scherick, Carol..............      1284     Schermer,             1284
                                             Robert.
Schiewe, Patricia............      1284     Schilk, Valerie       1284
Schiller, Lisa...............      1285     Schilling,            1285
                                             Francis.
Schlaff, Jarret..............      1285     Schlangen,            1285
                                             Alvin.
Schmall, Eric................      1285     Schmalstieg,          1285
                                             Linda A..
Schmidt, Donald..............      1286     Schmidt, Megan.       1286
Schmitt, Beth................      1286     Schmitt, James.       1286
Schmitz, Kristen.............      1286     Schneider,            1286
                                             David.
Schneider, Richard...........      1287     Schneiderhan,         1287
                                             Kelly.
Schoech, Dick................      1287     Schoenfeld,           1287
                                             John.
Schofield, Meg...............      1287     Schofield,            1287
                                             Stephen.
Scholes, Aaron...............      1287     Schonbeck, Mark       1288
Schoneman, Amy...............      1293     Schorr, Meagan.       1294
Schrack, Diane...............      1294     Schraven,             1294
                                             Hendrikus.
Schriebman, Judy.............      1295     Schroeder, Jack       1295
Schroeder, Theresa...........      1295     Schuch, Andrew.       1295
Schultz, Jennifer............      1295     Schwalb, Cindy.       1296
Schwartz, Amy................      1296     Schwartz,             1296
                                             Burton.
Schwartz, Elizabeth..........      1296     Schwartz, Jeff.       1296
Schwartz, Julie..............      1296     Schwartzenhauer       1297
                                             , Robbin.
Schwartzman, Tamsen..........      1297     Schwarz, Penny.       1297
Schwarzlander, Patricia......      1297     Schweizer,            1298
                                             Raphael.
Scofield, Shari..............      1298     Scott, Barbara.       1298
Scott, Cameron...............      1298     Scott, D.......       1298
Scott, Emily.................      1298     Scott, K.......       1298
Scott, Sherri................      1299     Scotto, James..       1299
Scrimenti, David.............      1300     Scripter, Marla       1300
                                             L. & Morris D..
Scudder, T...................      1300     Seales, Jessica       1300
Searle, Newell...............      1300     Sears, Cindy...       1302
Seaton, Anton................      1302     Seaver, Linda..       1302
Secretan, Lance..............      1302     Sedgwick, Sarah       1302
Seidel, Karl.................      1303     Seim, Michelle.       1303
Seiniger, Breck..............      1303     Seiz, Debra....       1303
Selby, Joy...................      1303     Sellars,              1304
                                             Stefanie.
Serra, Gabrielle.............      1304     Serveson, Susan       1306
Sessions, Robert.............      1306     Sessions,             1306
                                             Sharon.
Seth, Savita.................      1306     Sethi, Ankur...       1306
Sexton, Mike.................      1306     Seyferlich,           1307
                                             Helen.
Shaber, Anne.................      1307     Shaber, Joel...       1307
Shad, Conrad.................      1307     Shaffer,              1307
                                             William.
Shamley, Kendra..............      1307     Shanks, Linda..       1307
Shapiro, Sara................      1308     Sharp, Cynthia.       1308
Sharpe, Dora.................      1308     Sharpe, Michael       1308
Sharry, Jean.................      1309     Shaub, George..       1309
Shaub, Kimberly..............      1309     Shaver, Mel....       1310
Shaw, Justin.................      1310     Shaw, Norman...       1310
Shaw, S......................      1310     Shea, Shannon..       1310
Shearer, N. Lillian..........      1311     Shearon, Lynn..       1311
Sheeley, Harriet.............      1311     Sheely, Ted....       1311
Sheer, Stephen...............      1313     Sheffield, John       1313
                                             & Jane.
Sheldrew, Michael............      1313     Shelley,              1314
                                             Kathleen.
Shelly, Charles..............      1314     Shelton, David.       1314
Shelton, Melissa.............      1314     Shepard,              1315
                                             Marlene.
Sheresh, Richard.............      1315     Sherman,              1315
                                             Dorothy.
Sherman, Valerie.............      1315     Sherrill, Inga.       1315
Sheskin, Felisa..............      1315     Shields, Alice.       1316
Shin, Doorae.................      1316     Shindel, Marci.       1316
Shiner, Elaine...............      1316     Shoemaker,            1317
                                             Diane.
Shoemaker, Dorea.............      1318     Shollenberger,        1318
                                             Lori.
Shook, Cindy.................      1318     Shore, Billy...       1318
Shore, Michael...............      1320     Shortness,            1320
                                             Ernie.
Shottenhamer, Carol Lynne....      1321     Shoup,                1321
                                             Cassandra.
Shropshire, Lee..............      1321     Shudde, Gerry..       1321
Shumaker, Anita..............      1322     Shumsky, Sheryl       1322
Shunn, Brenda................      1322     Shuster, Anne..       1322
Shuster, Diana...............      1322     Shuster, Helen.       1323
Shute, Janet M...............      1323     Shyshka, Mary..       1324
Sial, Aisha..................      1324     Sibley, Kathryn       1324
Sicard, Kevin Gershom........      1324     Siebach, Sarah.       1325
Siebert, Arlie...............      1325     Siebert, Dan...       1326
Sieberts, Heidi..............      1326     Siegelbaum,           1326
                                             Heidi.
Sieger, Anja.................      1326     Sigmans, Dan...       1326
Sigstedt, Ling...............      1327     Silber, Susan..       1327
Silberschmidt, Amy...........      1327     Silliman,             1327
                                             Thomas.
Silva, Patricia..............      1327     Silva, Sandra..       1327
Silverman, Louise............      1328     Simkanin,             1328
                                             Dorothy.
Simmons, Connie..............      1328     Simmons,              1328
                                             Katrina.
Simmons, Keri J..............      1328     Simmons, Liz...       1329
Simms, Jeff..................      1329     Simoneaux, Lois       1329
Simonson, Audrey.............      1329     Simonson,             1329
                                             Michelle.
Simpkins, Dulcey.............      1330     Simpliciano,          1330
                                             James.
Simpson, Heather.............      1330     Simpson,              1330
                                             Meaghan.
Sims, Gina...................      1331     Sims, Sandra...       1331
Sims, Sascha.................      1331     Singer, Andrew.       1332
Singlestad, Kristy...........      1332     Sipe, Joy......       1332
Sittle, Cheryl...............      1332     Sively, Susan..       1333
Siverson, Nels...............      1333     Sketch, Mary...       1333
Skinner, Jennifer............      1333     Skjersaa, Su...       1333
Sklar, David.................      1334     Skog, Judy.....       1334
Skrdlant, Lindsey............      1334     Skybak,               1334
                                             Courtney.
Slabach, Ruth................      1334     Sladek,               1335
                                             Marianne.
Slayton, Deborah.............      1335     Sloane, Pam....       1335
Slobod, Ann..................      1335     Slocum, Ceciley       1335
Slomovits, Helen.............      1336     Slotnick, Quinn       1336
Slouthworth, William.........      1336     Slugg, Roger...       1336
Small, Sally.................      1336     Small, R.N.,          1337
                                             Marya.
Smith, C.M.S., Al............      1337     Smith, Barton..       1338
Smith, Bruce.................      1338     Smith, Carolyn.       1338
Smith, Cecily................      1338     Smith,                1339
                                             Christine.
Smith, Heather...............      1339     Smith, Jan.....       1339
Smith, Jeremy................      1340     Smith, Julianne       1340
Smith, Julie (WV)............      1341     Smith, Julie          1341
                                             (UT).
Smith, Kathy.................      1341     Smith, Kristine       1341
Smith, Laura.................      1342     Smith, Lee.....       1342
Smith, Leilani...............      1342     Smith, LeVar...       1342
Smith, Lori..................      1343     Smith, Lucy....       1343
Smith, Madleine..............      1343     Smith, Mary....       1343
Smith, Michele...............      1343     Smith, Polly...       1343
Smith, Robert A..............      1344     Smith, Sandy...       1346
Smith, Sheila................      1346     Smith, Shelby..       1346
Smith, Stacie................      1347     Smith, Stefanie       1347
Smith, Terra.................      1348     Smith, Theresa.       1348
Smith, Traci.................      1348     Smith, Tracy...       1348
Smith, Victor................      1348     Smith, Ph.D.,         1348
                                             Patryce A..
Smollett, Molly..............      1349     Snader, Gregory       1349
Snedic, Ruth.................      1349     Snider, William       1349
Snipes-Wells, Susan..........      1349     Snively, James.       1350
Snodgrass, Jerry.............      1350     Snow, Janet R..       1351
Snyder, Ann..................      1351     Snyder, Denise.       1351
Snyder, Patrick..............      1351     Sobczyk,              1352
                                             Patricia.
Sok, Stephanie...............      1352     Solomon, Linda.       1352
Sommers, Samantha............      1352     Soren, Joanna..       1352
Sossong, Mary................      1352     Sotelo, Roxanne       1352
Southard, Michael............      1353     Souza, David...       1353
Spangler, Lyn................      1353     Sparks, Suanne.       1353
Spear, R. Scott..............      1353     Speers, Laura..       1354
Speirs, Juanita..............      1354     Spence, Martha.       1355
Spencer, Brenda..............      1355     Spencer,              1355
                                             Melissa.
Spica, Sarah.................      1355     Spicer,               1355
                                             Patricia.
Spier, Carolyn...............      1355     Spillane,             1356
                                             Melanie.
Spinazzola, Linda............      1356     Spinks, Gayle..       1356
Spires, Alodie...............      1356     Spitaletto,           1356
                                             Katie.
Spitalnik, Meredith..........      1357     Spitz, Sarah...       1357
Spor, Linnie.................      1357     Spoto, Cathy...       1357
Spottiswoode, Michael........      1357     Sprague, Sarah.       1358
Spring, Tai..................      1358     Sprinkle, Judy.       1358
Srinivasa, Kunuthur..........      1358     St. Clair, Eric       1358
St. Clair, Janice............      1358     St. Pierre,           1359
                                             Marguerite.
Staas, Bonita................      1359     Stalter,              1359
                                             Matthew.
Stamps, Judith...............      1359     Stancil, Jeanne       1359
Stanley, Alan................      1360     Stanley, Sharon       1360
Stapler, Suzanne.............      1360     Stark, Karen...       1360
Starke, Dawn.................      1360     Starkman,             1361
                                             Phyllis.
Starr, Georgi................      1361     Starrett,             1361
                                             Evelynn.
Starzel, Mary Beth...........      1361     Stathatos,            1361
                                             Denise.
Stauffer, Michael............      1361     Stearns, Judy..       1361
Stebner, Michael.............      1362     Stedwell, Kegan       1362
Steger, Ralph................      1362     Steichen,             1362
                                             Florence.
Stein, Dr. Karen.............      1362     Steinberg, Anne       1363
Steinberger, Jillian.........      1363     Steiner, Steve.       1364
Steinfeld, Caroline..........      1364     Steinkamp,            1364
                                             Suzanne.
Stelse, Val..................      1364     Stenlund,             1365
                                             DeeAnn.
Stephan, Chris...............      1365     Stephen, David.       1365
Stephens, Gail...............      1365     Stephens, Greg.       1365
Stephenson, Laura............      1366     Stergis, Sharon       1366
Stevenson, Jan...............      1366     Stevenson, Jane       1366
Steward, Scott...............      1366     Stewart,              1367
                                             Barbara.
Stewart, Cynthia.............      1367     Stewart, Donna.       1367
Stewart, Lisa................      1367     Stiegmeier,           1367
                                             Donna.
Stillman, Ann................      1368     Stimac, Michael       1368
Stireman-Beyer, Alisha.......      1368     Stirling, Jenny       1368
Stith, Shirley...............      1369     Stockdale, Ann.       1369
Stockwell, Dr. Sarah.........      1369     Stokes, Marilyn       1369
Stolar, Sarah................      1369     Stoley, Janet..       1370
Stombock, Janora.............      1370     Stone, Beverly.       1370
Stone, Karen.................      1371     Stone, Mary....       1371
Stone, Michelle..............      1371     Stoneburner,          1371
                                             Carol.
Stones, Chuck................      1371     Stopek, Sara...       1372
Stopler, Marina..............      1372     Storlazzi             1373
                                             Torpey, Susan.
Storm, Michael...............      1373     Stormont, Kayla       1373
Stout, Mary Jo...............      1373     Stoute, Karen..       1373
Straley, Christine...........      1374     Strand, Sally..       1374
Strangio, Linda..............      1374     Straub Vorse,         1374
                                             Lindsay M..
Stredny, Diane...............      1374     Streitburger,         1375
                                             Jan.
Strle, Andrea................      1375     Strombom,             1375
                                             Amanda.
Strother, Christina..........      1375     Stubbe, Frieda.       1375
Stuckey, Melissa.............      1375     Sturdevant,           1376
                                             Jason.
Sturm, Jordan................      1376     Styrcula,             1376
                                             Kathleen.
Sudduth, Suzanne.............      1376     Suever, Mike...       1376
Sugarman, Lor................      1377     Sugarwala,            1378
                                             Laura.
Sukow, Gretchen..............      1378     Sullivan, B....       1378
Sullivan, Carol..............      1378     Sullivan,             1378
                                             Colleen.
Sullivan, Dr. Patrick........      1378     Sullivan,             1378
                                             Eileen.
Sullivan, Elaine.............      1379     Sullivan, Terry       1379
Sullivan, Thomas.............      1379     Sullivan, M.D.,       1379
                                             Robert.
Summerfelt, Robert...........      1379     Summers, Dakota       1380
Sumner, Jennifer.............      1380     Sundance,             1380
                                             Juniper.
Sundell-Guy, Cindy...........      1381     Sunderland,           1381
                                             Violet.
Suplee, Judy.................      1381     Supowitz, Terri       1381
Susan, Knose.................      1381     Suter, Nancy...       1382
Sutton, Beverley.............      1382     Sutton, Chelsea       1382
Sutton, Ellyn................      1382     Svirsky, Ph.D.,       1382
                                             Janet.
Svitko, Lin..................      1383     Swain, Edward..       1383
Swanson, Elaine..............      1383     Swanson, Joe...       1383
Swarthout, Elizabeth.........      1384     Swearingen,           1384
                                             Margaret.
Sweeney, Shelly..............      1384     Sweeny, Peter..       1384
Swegan, Janice...............      1384     Swicegood, Jane       1384
Swidler, Lawrence............      1385     Swift, Joan....       1385
Swinford, Sheila.............      1385     Switzer, Sharon       1385
Sword, Carol.................      1385     Sytsma, Emily..       1386
Sytwu, Renee.................      1386     Szamosi, Anna..       1386
Szymkowiak, Shannon..........      1386     Szymkowicz,           1386
                                             Raymond.
Tabili, Paul.................      1387     Tackett,              1387
                                             Benjamin.
Tackett, Paula...............      1387     Tacon, Juliette       1387
Takakjian, Elizaabeth........      1387     Takayama, Kai..       1388
Tallman, Viviane.............      1388     Tam, Lisa......       1388
Tanata, Nicole...............      1388     Tankersley,           1389
                                             Scott.
Tant, Christina..............      1389     Tapp, Yvette...       1389
Tarbox, Margaret E...........      1389     Tarlton, Bianca       1389
Tartaglia, Barbara...........      1390     Tarttier,             1390
                                             Bonnie.
Tate, Beverly................      1390     Tavoularis,           1391
                                             Melindria.
Taylor, Constance............      1391     Taylor, David..       1391
Taylor, Dean.................      1391     Taylor, Derek..       1391
Taylor, James................      1392     Taylor, Joshua.       1392
Taylor, Judy.................      1392     Taylor, Karen..       1392
Taylor, Kirk.................      1392     Taylor, Melvin.       1393
Taylor, Patricia.............      1393     Taylor, Ronni..       1393
Teeter, Martha...............      1393     Teixiera, John.       1393
Teller, Amy..................      1394     Tellez, Frank..       1394
Tenaglio, Robert.............      1395     Tengenber,            1395
                                             Myrtle.
Teninty, Sasha...............      1395     Terhaar, Tim...       1395
Terry, Clara.................      1395     Terry, John....       1395
Terziotti, Annette...........      1396     Tesch, Anna....       1396
Testa, Joseph................      1396     Tevelow, Carla.       1397
Tevlin, Michael..............      1397     Tewksbury,            1398
                                             Arden.
Thacker, Cheryl..............      1420     Thaw, Karen....       1420
Thayer, Gary.................      1420     Thema, Linda...       1420
Theodoru, George.............      1421     Theoharris,           1421
                                             Michele.
Theresa, Daley...............      1421     Thew, Janet....       1421
Thill, Randy.................      1421     Thistlethwaite,       1421
                                             Rebecca.
Thomas, Barbara W............      1422     Thomas, Ella...       1422
Thomas, Margaret.............      1422     Thomas, Mary...       1422
Thomas, Robert and Lillian...      1423     Thomason, Mary.       1423
Thompson, Ben................      1423     Thompson, Cindy       1423
Thompson, Colleen............      1423     Thompson, Gayle       1424
Thompson, Heather............      1424     Thompson, James       1424
Thompson, Linda..............      1424     Thompson, Scott       1424
Thompson, Tara...............      1424     Thompson-Bull,        1425
                                             Myra.
Thoms, Michelle..............      1425     Thor, D. Iris..       1425
Thorman, Tess................      1425     Thornburg,            1425
                                             Melanie.
Thornton, Sara...............      1426     Thrash, Deborah       1426
Thurston, Lynn...............      1426     Tibbits, Clark.       1426
Tidwell, Jackie..............      1427     Tiers, Sarah...       1427
Tiger, David.................      1427     Tildahl, Karla        1427
                                             and Brent.
Tillman, Terry...............      1427     Timbo, Aaron...       1427
Timer, Heidi.................      1427     Ting, Samuel...       1428
Tinkham, Nicole..............      1428     Tippens,              1428
                                             Rebecca.
Tirben, Helen................      1428     Titus, Ann.....       1429
Titus, Kathryn...............      1429     Tobias, Janet..       1429
Tobias, John.................      1429     Tobin, Cynthia.       1429
Todd, Alice..................      1429     Tokuda, Jasmine       1429
Tolley, Diane................      1430     Toman, Julie...       1430
Tomczyszyn, Michael..........      1430     Tomei, Barbara.       1430
Tonn, David..................      1430     Toolan,               1431
                                             Patricia.
Tormoen, Sandra..............      1431     Tosado, Stacey.       1431
Toshalis, Barbara............      1431     Tovey, Kathleen       1431
Townsend, Marjorie...........      1432     Townsend, Scott       1432
Toy, Alaric..................      1432     Tracey, Carmen.       1432
Tracy, Ellen.................      1433     Trafford, Susan       1433
Tragesser, Sharon............      1433     Tredeau, Rabia.       1433
Trenkamp, Gina...............      1433     Trice, Patricia       1433
Trick, Daniel................      1434     Trione, Kristy.       1434
Tripi, John..................      1434     Troiano,              1434
                                             Melissa.
Trotchie, Marcia.............      1434     Trott, Connor..       1435
Trotter, David Wesley........      1435     Trotter,              1436
                                             Kathleen.
Trotter, Jr., Thomas.........      1436     Trueblood,            1436
                                             Molly.
Truempy, Thomas..............      1437     Truitt, Darla..       1437
Trumpp, Leon.................      1437     Trupin, Joel...       1437
Tschaggeny, Camille..........      1437     Tubbs, Ann.....       1438
Tuccillo, Christina..........      1438     Tuck, Frederick       1438
Tucker, Jeffrey..............      1438     Tugadi, Denise.       1438
Tuggey, Victoria.............      1438     Tumak, Laura...       1439
Turnbull, Susan..............      1439     Turner,               1439
                                             Christiane.
Turner, Joan.................      1439     Turner, Warren.       1439
Turzo, Laura.................      1440     Two-Hawks, Rob.       1440
Tybahl, Malin................      1440     Tyler, Julia...       1441
Tyler, Lorrayne..............      1441     Tyll, Laura....       1441
Tyroler, S...................      1441     Tyson, Linda...       1441
Ufkin, Jim...................      1442     Uhe, Shawn.....       1442
Ujcic, Susan.................      1442     Unilever North        1442
                                             America.
Unsworth, Nathan.............      1444     Urban,                1444
                                             Stephanie.
Usher, Sharon................      1444     Ustjanauskas,         1445
                                             Ada.
Uusitalo, Kelly..............      1445     Valdes, Imena..       1445
Valenzuela, Abel.............      1445     Valenzuela,           1445
                                             Jacqueline.
Valikov, Ena.................      1446     van de Kamp,          1446
                                             Alexandra.
Van Derrick, Michele.........      1446     van Dommelen,         1446
                                             Annelies.
Van Hooser, Tracey...........      1446     Van Leeuwen-          1447
                                             Vega, Lesley.
Van Loo, Ginny...............      1447     Van Sicklen,          1447
                                             Isabel.
Van Soelen, Eileen...........      1447     Van Twyver,           1447
                                             Patricia.
Van Valin, Mary..............      1447     VanArsdale,           1448
                                             Nike.
VanBuskirk, Patrician........      1448     Vance, Patricia       1448
Vandegriff, Paulette.........      1448     Vanden, Greg...       1448
Vandenberg, Noelle...........      1449     Vanderhoof,           1449
                                             Jane.
VanderKnyff, Rick............      1449     VanDerzee,            1450
                                             Susan.
Vann, Naomi..................      1450     Varellas, Barb.       1450
Varner, Veronica.............      1450     Varvaro,              1450
                                             Carmela.
Vasquez, Jennifer............      1451     Vaughan, Carey.       1451
Vaughan, Laura...............      1451     Vaughan, Susan.       1451
Vaughn, Z....................      1451     Veal, Jennifer.       1452
Veghte, George Arthur........      1452     Venner, Marie..       1452
Venturelli, Ava..............      1452     Venugopalan,          1452
                                             Vasan.
Verbeke, Joelle..............      1453     Vergo, Bobbie..       1453
Vergun, Pam, Rob, Miko, and        1453     Vermeulen, Mary       1454
 Isaac.
Vidrine, Emily...............      1454     Viele, Daniel..       1454
Vierra, Dawn.................      1454     Viggiano, Alyse       1454
Vignocchi, John..............      1455     Villadoniga,          1455
                                             Richard.
Villamil, R.N., Mirtha L.....      1455     Villasenor,           1455
                                             Teresita.
Villavicencio, Lara..........      1455     Vincent, Karen.       1455
Virtudazo, Angela............      1456     Vitale, Ben....       1456
Vitiello, Ellyse Adele.......      1456     Vitovitch, Ann.       1456
Vizzard, T...................      1456     Vogt, Susan....       1457
Volk, Kevin..................      1457     Volk, Rachel...       1457
Volker, Molly................      1457     Vollinger,            1457
                                             Pamela Rose.
Vollmer, Max.................      1458     von Borstel,          1458
                                             Carol.
von Duering, Rebecca.........      1458     Vorass, Melany.       1458
Vorosmarty, Laszlo...........      1459     Voss, Carol....       1459
Voss-Andreae, M.D., Ph.D.,         1459     Vranka, Janice.       1459
 Adriana.
Vrazel, Caroline.............      1460     Vresilovic,           1460
                                             Kelly.
W., Marilyn..................      1460     W., Trisha.....       1460
Wade, Frances................      1460     Wade, Nancy....       1461
Wadkins, Terry...............      1461     Waggle, James..       1461
Wagner, Deborah..............      1461     Wagner, Mark...       1461
Wagner, Michael..............      1462     Wagoner, Robyn.       1462
Wahler, David................      1462     Walas, Diane...       1462
Waldecker, Karen.............      1463     Waldorf,              1463
                                             Matthew.
Wales, Charlotte.............      1463     Walker, Jamie..       1463
Walker, Jenny................      1463     Walker, Joan...       1463
Walker, Lee..................      1464     Walker,               1464
                                             Margaret.
Walker, Medoh................      1464     Wall, Maureen..       1464
Wallace, Bob.................      1464     Wallace,              1464
                                             Brigitte and
                                             John.
Wallace, Garry...............      1465     Wallace, James.       1465
Wallace, Margaret............      1465     Wallace, Ryan..       1465
Wallace, Sondra..............      1465     Wallack, Annie.       1465
Waller, Kathy................      1466     Wallin,               1466
                                             Nicholas.
Wallof, Hunter...............      1466     Walls, Judy....       1466
Walls, Karen.................      1466     Walmsley, Dora.       1466
Walsh, Caitilin..............      1467     Walsh,                1467
                                             F.S.P.A.,
                                             Sister Julia.
Walsh, Mary..................      1467     Walsman, Betty        1467
                                             Lou.
Walters, Marie...............      1467     Waltke, Pat....       1468
Walton, Jon..................      1468     Walvatne, Gary.       1468
Walzem, Lisa.................      1468     Wang, Ruby.....       1468
Ward, Albert.................      1469     Ward, Linda....       1469
Ward, Terri..................      1469     Wardell, Gerard       1469
Ware, Nicholas...............      1470     Warfield, Jason       1470
Warner, Dr. Carole A.........      1470     Warner, Sara...       1470
Warner, Tim..................      1470     Warner Nyren,         1471
                                             Sheree.
Warren, Bess.................      1471     Warren, Brandi.       1471
Warren, Penny................      1471     Warren, Peter..       1471
Warren, Ruby.................      1471     Warren, Tomi...       1472
Warshawer, Nancy.............      1472     Washburn,             1472
                                             Thomas.
Wassell, Kelly...............      1472     Wasser, Brent..       1473
Waterman, Paula Squire.......      1474     Waters, Julia..       1474
Waters, Kristine.............      1474     Watkins, Carl..       1474
Watkins, Paul................      1474     Watson, Bruce..       1474
Watson, Jan..................      1475     Watson, Jeri...       1475
Watson, Julie................      1475     Watson, Marilyn       1475
Watson, Paul.................      1475     Watson, Phil...       1475
Watters, Ann.................      1476     Watts, Nancy...       1476
Waugh, Ann...................      1476     Way, Nathan....       1476
Waymire Rooks, Cathy.........      1476     Weathersby,           1476
                                             Lynn.
Weatherup, Cat...............      1477     Weaver, Andrew.       1477
Weaver, Becca................      1477     Weaver, David..       1477
Webb, Gene...................      1478     Webb, Patricia.       1478
Webster, Jeff................      1478     Webster, Kevin.       1478
Weckman, Shannon.............      1479     Weeden,               1479
                                             Jennifer.
Weems, Darrell...............      1479     Weems, Patricia       1479
Weems, Tyson.................      1480     Wehmeyer,             1480
                                             Melanie.
Weigel, Edna.................      1480     Weiler, Donna..       1480
Weinberg, Larry..............      1480     Weinberg,             1480
                                             Leslie.
Weiner, Margaret.............      1481     Weingeist,            1481
                                             Carol.
Weinshilboum, Sharyl.........      1481     Weintrob, Chris       1481
Weisberg, Anna...............      1482     Weisman, Jean..       1482
Weiss, Charlie...............      1482     Weiss, Gabriel.       1482
Weiss, Gregg.................      1483     Weiss, Rike....       1483
Weiss-Fried, Nancy...........      1483     Welch, Kerri...       1483
Welland, P...................      1483     Wellington,           1484
                                             Carly.
Wells, Barbara...............      1484     Wells, Collin..       1484
Wells, Dawn Anne.............      1484     Wells, Jim.....       1485
Wells, Rachel................      1485     Wells, Ruth....       1485
Wells, Shannon...............      1485     Welsh, Mark....       1485
Welters, Sjon................      1486     Wend, Silvia...       1486
Wensman, Edwin...............      1486     Wentworth,            1486
                                             Rebecca.
Wenzlaff, Frederick..........      1486     Wermes, Sylvia.       1486
Werneke, Angela..............      1486     Wesley, Charles       1487
Wesley, Janette..............      1487     West, Eric.....       1487
West, Heidi..................      1487     West, Norman...       1488
West, Penny..................      1488     West, Sybil....       1488
West, Virginia...............      1488     Westberry,            1488
                                             Serena.
Westman, Tara................      1488     Weston,               1489
                                             Cathleen.
Wetmore, Les.................      1489     Whatcott, Kim..       1489
Wheeler, Wilma...............      1489     Whitaker,             1489
                                             William.
White, Billie................      1490     White,                1490
                                             Christine.
White, Denise................      1490     White, Jan.....       1490
White, Jennifer..............      1490     White, John....       1490
White, Karen.................      1491     White, Kathleen       1491
White, Leigh.................      1491     White, Lisa....       1491
White, Marcia................      1491     White, Shawn...       1492
White, Valerie...............      1492     White, Victory.       1492
Whited, Tamara...............      1493     Whitehouse,           1493
                                             Alton.
Whitehouse, Judy.............      1493     Whiteley, Nikki       1493
Whiteman, Pauline............      1493     Whitford, Erin.       1493
Whiting-Broeder, Pamela......      1494     Whitlow, Glenn.       1494
Whitman, Art.................      1494     Whitson, Andrea       1495
Whitt, Michael...............      1495     Whitten, Diane.       1495
Whittington, Linda...........      1496     Whittredge,           1496
                                             Karen.
Wholey, Louise...............      1496     Wiant, Jean....       1496
Wiberg, Daniel...............      1496     Wick, Volinda..       1496
Wickham, Allen...............      1497     Wicks, Debra...       1497
Wickwire, Meg................      1497     Widhalm, Evelyn       1497
Wiercioch, John..............      1498     Wight,                1498
                                             Christine.
Wilbur, Ken..................      1498     Wilcher, Maya..       1498
Wilcox, Dorothy..............      1498     Wilde, Lynn....       1498
Wilder, Flo..................      1499     Wilds, Eric....       1499
Wilhite, Alan................      1499     Wilke, Gail....       1499
Wilkerson, Chalice...........      1499     Wilkes, Samuel.       1499
Wilkins, JoAnne..............      1500     Wilkins,              1500
                                             Shannon.
Wilkinson, Carol.............      1500     Wilkinson,            1500
                                             James.
Will, Julianne...............      1501     Willey, Chris..       1501
Williams, Alice..............      1501     Williams,             1501
                                             Amanda.
Williams, Bernadette.........      1501     Williams,             1502
                                             Beverly.
Williams, Carol..............      1502     Williams, Cyndy       1502
Williams, D., (NC)...........      1502     Williams, D.,         1502
                                             (CA).
Williams, Debora.............      1503     Williams, Elsie       1503
Williams, Emelie.............      1503     Williams, Jacki       1503
Williams, Jenna..............      1503     Williams, Kelly       1503
Williams, Penelope...........      1504     Williams,             1504
                                             Precious.
Williams, Sara...............      1504     Williams,             1504
                                             Victoria.
Williamson, Andrea...........      1504     Williamson,           1505
                                             Theresa.
Willis, Diane................      1505     Willis, Judith.       1505
Willis, Paul.................      1505     Willis, Penny..       1505
Willis, Walt.................      1505     Willits,              1506
                                             Margaret.
Willmore, Yolanda............      1506     Wills, Rachel..       1506
Willson, Sean................      1507     Wilson, Ariel..       1507
Wilson, Connie...............      1507     Wilson, David..       1507
Wilson, Deborah..............      1507     Wilson, Delilah       1508
Wilson, Devin................      1508     Wilson, Doris..       1508
Wilson, Dorothy..............      1508     Wilson, Jan....       1509
Wilson, Jane.................      1509     Wilson, Joan...       1509
Wilson, John.................      1509     Wilson, Lindsay       1509
Wilson, Marc.................      1509     Wilson, Martha.       1510
Wilson, Robert...............      1510     Wilson, Stacie.       1510
Wilson, Ward.................      1510     Wilson-Seppa,         1510
                                             Regina.
Winegar, Ann.................      1510     Wingate, Sally.       1511
Winholtz, Betty..............      1511     Winn, Geoff....       1511
Winn, Trisha.................      1511     Winter, Sandra.       1511
Winzig, Francis..............      1512     Wirth, Randy...       1512
Wirzba, Norman...............      1512     Wise, Ken......       1512
Wiseman, Jowanda.............      1512     Wisniewski,           1512
                                             Jeanette.
Wiszowaty, Walter............      1513     Withers, Lon...       1513
Witowski, Helen..............      1513     Witte, John....       1513
Woehrlin, Molly..............      1513     Woelk, Nikki...       1513
Wojciechowski, Patricia......      1514     Wolbach, Nancy.       1514
Wolf, Jillian................      1514     Wolf, Todd.....       1514
Wolfe, Alissa................      1514     Wolfe, Ashley..       1515
Wolff, Dennis C..............      1515     Wolkowitz, Lee.       1515
Wollenman, Tommy.............      1515     Wollman,              1517
                                             Barbara.
Wolverton, Susan.............      1517     Won, Laetitia..       1517
Wood, Christine..............      1517     Wood, Emmy.....       1518
Wood, Kristine...............      1518     Wood, Stephanie       1518
Woodard, Sarah...............      1518     Woodbury, Nola.       1518
Woodruff, Margaret...........      1518     Woods, Kenneth        1519
                                             A. ``Jack''.
Woods, Lora..................      1519     Woods, Tara....       1519
Woodward, Jill...............      1519     Wool, Joel.....       1519
Woolley, Barbara.............      1519     Wootan, Cathy..       1520
Wootten, Ruth................      1520     Worman, Jenny..       1520
Worstell, Jim................      1521     Wright, Denise.       1521
Wright, Jeff.................      1521     Wright, Jim....       1521
Wright, Miki.................      1521     Wright, Nadine.       1522
Wright, Nancy................      1522     Wright, Wynetta       1522
Wrightsman, Dwayne...........      1523     Wrinn, Chris...       1523
Wroblewski, Robert...........      1523     Wurm, Jane.....       1523
Wurster, James...............      1523     Wuthrich,             1524
                                             Katherine.
Wyatt, Jeffrey...............      1524     Wyberg, Bryan..       1524
Wyland, Nancy................      1524     Wyman, Lois....       1524
Wymola, Phillip & Hannah.....      1525     Wynn, Steveanna       1525
Wyre, Peedee.................      1525     Xakellis-             1525
                                             Chapman, Mary.
Xavier, Zita.................      1525     Yadav, Sangita.       1526
Yaffe, Artemas...............      1526     Yahnke, Sr.,          1526
                                             Tom.
Yamaguchi, Lydia.............      1526     Yamashiro, Kyo.       1526
Yanish, Rev. M...............      1527     Yarbrough, Finn       1527
Yarrobino, Erin..............      1527     Yates, Sharon..       1527
Yates, Virginia..............      1527     Yee, Alejandra.       1527
Yoches, Jeff.................      1528     Yoder, David...       1528
Yon, Jac.....................      1528     Yoshida, Yuki..       1528
Youness, Andrea..............      1528     Young, Anne....       1528
Young, Carol.................      1529     Young,                1529
                                             Catherine.
Young, Jennifer..............      1529     Young, Julie...       1529
Young, Kristofer.............      1529     Young, Marc....       1530
Young, Matthew...............      1530     Young, S.......       1530
Young, Sharon................      1530     Young, Thomas..       1531
Young-Holt, Carol Lou........      1531     Yousef, Saad...       1531
Yuen, Eleu...................      1532     Yuenger, Arthur       1532
Yurchuck, Ruth...............      1532     Zak, Julie.....       1532
Zambrano, Michelle...........      1532     Zampieri, Janet       1532
Zang, Keith..................      1532     Zapotocny,            1533
                                             Douglas.
Zastrow, Jesse...............      1533     Zavala, Debra..       1533
Zawacki, Jenna...............      1533     Zecca,                1533
                                             Christine.
Zehr, Judy...................      1533     Zeineddine,           1534
                                             Shaddy.
Zelko, Michael...............      1534     Zenker,               1534
                                             Elizabeth.
Zerbel, Janet................      1534     Zeri, Natalie..       1535
Zerilli, Jamie...............      1535     Zeutzius, David       1535
Zezima, Carolyn..............      1535     Zhang, Adrienne       1535
Ziegler, Jacqueline..........      1535     Ziek, Barbara..       1536
Zigich, Linda................      1537     Zimmmerman,           1538
                                             Adam.
Zimmerman, Audrey............      1538     Zimmerman,            1538
                                             Cindy.
Zimmerman, Joan..............      1539     Zink, Tracey...       1539
Zirger, Jean.................      1539     Zito, Vincent..       1539
Zocher, Marc.................      1540     Zoeller,              1540
                                             Chetanaa.
Zondorgh, Honz...............      1540     Zorn, Gretta...       1540
Zourarakis, Ph.D., GISP, CMS,      1540     Zuber, Anne....       1540
 Demetrio P..
Zucchi, Robert...............      1541     Zuchowski, Pam.       1541
Zucker, Isabel...............      1541     Zuckerman,            1541
                                             Richard.
Zurakowski, Michele..........      1541     Zuyber, Chad...       1542
Form Letters *...............      1542* Editor's note: Where possible the form letters submitted have been
  attributed to the originating organization. Signatories to the letters
  are in alphabetic order. However, due to printing constraints the
  signatories are not listed in this Table of Contents.


 
   THE FUTURE OF U.S. FARM POLICY: FORMULATION OF THE 2012 FARM BILL

                              ----------                              


                         FRIDAY, MARCH 9, 2012

                          House of Representatives,
                                  Committee on Agriculture,
                                                  Saranac Lake, NY.
    The Committee met, pursuant to call, at 9:00 a.m. (EST), at 
the Sparks Athletic Complex, North Country Community College, 
23 Santanoni Avenue, Saranac Lake, New York, Hon. Frank D. 
Lucas [Chairman of the Committee] presiding.
    Members present: Representatives Lucas, Goodlatte, Conaway, 
Gibson, David Scott of Georgia, Owens, and Pingree.
    Staff present: John Goldberg, Tamara Hinton, Nicole Scott, 
Debbie Smith, Pelham Straughn, John Konya, Margaret Wetherald, 
Keith Jones, Mary Knigge, Jamie Mitchell, and Caleb Crosswhite.

 OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN 
                     CONGRESS FROM OKLAHOMA

    The Chairman. This hearing of the Committee on Agriculture 
entitled, The Future of U.S. Farm Policy: Formulation for 2012 
Farm Bill, will come to order. I'll speak into the microphone 
and try to make that work.
    Good morning, thank you all for joining us today for our 
first farm bill field hearing of 2012.
    Field hearings are one of the most important parts of the 
farm bill process. Not only do they allow the Members of our 
Committee to hear directly from farmers and ranchers, but they 
give us a chance to see the diversity of agriculture across 
this great country.
    These field hearings are a continuation of what my good 
friend and Ranking Member Collin Peterson started in the spring 
of 2010. Today we'll build upon the information we've gathered 
in those hearings as well as the 11 farm policy audits we 
conducted this past summer.
    We used those audits as an opportunity to thoroughly 
evaluate farm programs to identify areas where we could improve 
efficiency.
    The field hearings serve a slightly different purpose. 
Today we're here to listen.
    I talk to producers all the time back in Oklahoma. I see 
them in the feed store. I meet with them in my town hall 
meetings. And of course, I get regular updates from my boss, 
Linda Lucas, back on our farm in western Oklahoma. But the 
conditions and crops in Oklahoma are different from what you'll 
find in New York or Illinois or California, for that matter.
    That's why we hold field hearings, to meet farmers and 
ranchers from different regions who produce a broad range of 
products.
    New York is a fitting place to kick off these hearings 
because of the variety of food produced here.
    New York farmers produce a wide range of specialty crops 
that generate $1.34 billion annually and make up \1/3\ of the 
state's total agriculture receipts. New York ranks second in 
apple production, third in wine and grape juice production, and 
among the top vegetable producing states in the country. New 
York is also among the nation's top dairy states, and I'm 
pleased we'll hear from representatives of each of those 
commodities this morning.
    While each sector has unique concerns when it comes to farm 
policy, I'd like to share some of my general goals for the next 
farm bill. First and foremost, I want to give producers the 
tools to help you do what you do best and that is to produce 
the safest, most abundant, most affordable food supply 
literally in the history of the world.
    To do this we must develop a farm bill that works for all 
regions and all commodities. We've repeatedly heard that a one-
size-fits-all program will not work. The commodity title must 
give producers options so that they can choose the program that 
works best for them.
    And I'm also committed to providing a strong Crop insurance 
program. The Committee has heard loud and clear about the 
importance of crop insurance and we believe it is the 
cornerstone of the safety net. Today we hope to hear how we can 
improve crop insurance, especially for specialty crops.
    Last, we'll work to ensure that producers can continue to 
use conservation programs to protect our natural resources. I'm 
interested to hear how producers in this area of the country 
use the conservation programs. I'm particularly curious as to 
your thoughts on how to simplify the process so they are easier 
for our farmers and ranchers to use.
    Beyond those priorities, I know there are a number of 
universal concerns facing agriculture across the country.
    For instance, my producers in Oklahoma are worried about 
regulations coming down from the Environmental Protection 
Agency and how they must comply with those regulations.
    I'm also aware that the death tax is creating difficulties 
for farming operations. I want to hear how these Federal 
policies are affecting producers in the Northeast, but the main 
concern of our hearing will be how the farm bill affects 
specialty crops and dairy producers.
    While specialty crops do not participate in traditional 
commodity programs, there are other Federal programs that play 
an important role in helping American fruit, vegetable and 
nursery crop growers to stay competitive.
    These programs give specialty crop growers access to vital 
research programs and help protect their crops from pest and 
disease. Additionally, they provide assistance in maintaining 
and opening international markets and increasing consumption of 
the best fruits and vegetables in the world. I look forward to 
hearing your perspective on those programs.
    For dairy producers, the ongoing discussion of dairy reform 
is of particular importance. The recent decline in prices 
coupled with rising production costs have once again 
demonstrated the need to improve and modernize our dairy safety 
net. While I do not expect unanimity among dairy industry 
participants, we never get unanimity among farmers in general, 
I do encourage all industry participants, producers and 
processors alike, to find some level of consensus regarding the 
type of reform that is needed.
    The exact nature of the reform we include in the next farm 
bill will rely heavily on input we receive today and in future 
hearings. While there are several proposals that have been 
introduced, and we have had some level of agreement on a 
starting point for discussion, we do not claim to have all the 
answers.
    With your help and guidance, we would hope to develop a 
comprehensive package of reforms that are fiscally responsible 
and balanced with regards to size and region.
    Today we'll hear from a selection of producers. 
Unfortunately, we just don't have time to hear from everybody 
who would like to share their perspective, but we have a place 
on our website where you can submit your comments in writing to 
the House Agriculture Committee. You can find that--well, visit 
agriculture.house.gov/farmbill to find that place. And I 
believe we have, at the back of the room, some post cards that 
have that e-mail address on it so you can send your comments 
in.
    As I said before, we don't have an easy road ahead of us, 
but I'm confident that by working together we can craft a farm 
bill that continues to support the success story that American 
agriculture is.
    [The prepared statement of Mr. Lucas follows:]

Prepared Statement of Hon. Frank D. Lucas, a Representative in Congress 
                             from Oklahoma
    Good morning, and thank you all for joining us today for our first 
farm bill field hearing of 2012.
    Field hearings are one of the most important parts of the farm bill 
process. Not only do they allow Members of our Committee to hear 
directly from farmers and ranchers, but they give us a chance to see 
the diversity of agriculture across this great country.
    These field hearings are a continuation of what my good friend and 
Ranking Member Collin Peterson started in the spring of 2010. Today, 
we'll build upon the information we gathered in those hearings, as well 
as the 11 farm policy audits we conducted this past summer.
    We used those audits as an opportunity to thoroughly evaluate farm 
programs to identify areas where we could improve efficiency.
    The field hearings serve a slightly different purpose. Today, we're 
here to listen.
    I talk to producers all the time back in Oklahoma. I see them in 
the feed store and I meet them at my town hall meetings. And of course, 
I get regular updates from my boss back on our ranch. But the 
conditions and crops in Oklahoma are different than what you'll find in 
New York or Illinois or California.
    That's why we hold field hearings--to meet farmers and ranchers 
from different regions who produce a broad range of products.
    New York is a fitting place to kick off these hearings because of 
the variety of food produced here.
    New York farmers produce a wide range of specialty crops that 
generate $1.34 billion annually and make up \1/3\ of the state's total 
agriculture receipts. New York ranks second in apple production, third 
for wine and grape juice production, and is among the top vegetable 
producing states in the country.
    New York is also among the nation's top dairy producers. I am 
pleased we will hear from representatives of each of these commodities 
this morning.
    While each sector has unique concerns when it comes to farm policy, 
I'd like to share some of my general goals for the next farm bill.
    First and foremost, I want to give producers the tools to help you 
do what you do best, and that is to produce the safest, most abundant, 
most affordable food supply in the world.
    To do this we must develop a farm bill that works for all regions 
and all commodities. We have repeatedly heard that a one size fits all 
program will not work. The commodity title must give producers options 
so that they can choose the program that works best for them.
    I also am committed to providing a strong crop insurance program. 
The Committee has heard loud and clear about the importance of crop 
insurance and we believe it is the cornerstone of the safety net. 
Today, we hope to hear how we can improve crop insurance, especially 
for specialty crops.
    Last, we'll work to ensure that producers can continue using 
conservation programs to protect our natural resources.
    I'm interested to hear how producers in this area of the country 
use the conservation programs. I'm particularly curious as to your 
thoughts on how to simplify that process so they are easier for our 
farmers and ranchers to use.
    Beyond those priorities, I know there are a number of universal 
concerns facing agriculture across the country.
    For instance, my producers in Oklahoma are worried about 
regulations coming down from the Environmental Protection Agency (EPA) 
and how they must comply with those regulations.
    I'm also aware that the death tax is creating difficulties for 
farming operations. I want to hear how these Federal policies are 
affecting producers in the Northeast.
    But the main focus of our hearing will be how the farm bill affects 
specialty crops and dairy producers.
    While specialty crops do not participate in traditional commodity 
programs, there are other Federal programs that play an important role 
in helping American fruit, vegetable and nursery crop growers stay 
competitive.
    These programs give specialty crop growers access to vital research 
programs and help protect their crops from pest and disease. 
Additionally, they provide assistance in maintaining and opening 
international markets and increase consumption of the best fruits and 
vegetables in the world. I look forward to hearing your perspective on 
these programs.
    For dairy producers, the ongoing discussion of dairy reform is of 
particular importance.
    The recent decline in prices coupled with rising production has 
once again demonstrated the need to improve and modernize our dairy 
safety net.
    While I do not expect unanimity among dairy industry participants, 
I do encourage all industry participants--producers and processors 
alike--to find some level of consensus regarding the type of reform 
that is needed.
    The exact nature of the reform we include in the next farm bill 
will rely heavily on the input we receive today and in future hearings.
    While there are several proposals that have been introduced, and we 
have had some level of agreement on a starting point for discussion, we 
do not claim to have all of the answers. With your help and guidance, 
we would hope to develop a comprehensive package of reforms which are 
fiscally responsible and balanced with regards to size and region.
    Today, we'll be hearing from a selection of producers. 
Unfortunately, we just don't have time to hear from everybody who would 
like to share their perspective. But we have a place on our website 
where you can submit those comments in writing. You can visit http://
agriculture.house.gov/farmbill to find that place. You can also find 
that address on the postcards available on the table here.
    As I said before, we don't have an easy road ahead of us. But I'm 
confident that by working together, we can craft a farm bill that 
continues to support the success story that is American agriculture.

    The Chairman. With that, I turn to my Ranking Member today, 
a gentleman from Georgia, Mr. Scott, for his comments.

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

    Mr. David Scott of Georgia. Thank you very much, Mr. 
Chairman, and I'd just like to say, at the outset, what a 
wonderful part of the country this is. My first time into the 
Lake Placid, Saranac Lake area, and I must say it is a 
beautiful and very interesting visit. I certainly also want to 
say how great it is to be in the home and the districts of my 
fellow Representatives, Representative Owens and Representative 
Gibson, both of whom are just doing a marvelous job for you 
back in Washington.
    As the Chairman clearly stated, we're here to hear from 
you. This is very important for us to hear. We are engaging in 
this farm bill at a very, very challenging time. Because we not 
only have to go back through to the 2008 Farm Bill, but we have 
to do it at a time when we're also faced with significant 
budget constraints. At the same time, we want to hear on the 
many areas of dairy, conservation, specialty crops, which are 
very, very important for this area of New York.
    And also we want to hear from you about some of the 
regulations. All regulation is not bad, but at the same time we 
can sit in Washington in our wonderful offices and we can make 
great policy, but you have to let us know how it is working. We 
want to make sure that policies and regulations from the EPA 
and others are done in a way that allows our farmers and 
ranchers to be able to be productive, to be able to be 
profitable and not be over-burdensome. So we look forward to 
hearing from you on that.
    Again, Mr. Chairman, thank you very much, and we look 
forward to a wonderful hearing.
    The Chairman. The gentleman yields back, and as is the 
custom, we will listen to very brief opening statements from 
our two colleagues who represent New York on the House 
Agriculture Committee. I will first recognize Mr. Owens.

OPENING STATEMENT OF HON. WILLIAM L. OWENS, A REPRESENTATIVE IN 
                     CONGRESS FROM NEW YORK

    Mr. Owens. I thank you, Mr. Chairman. First let me say that 
I, and I think everyone in attendance here, is extraordinarily 
excited at this opportunity. This is unique and it allows 
northern New York and much of Vermont and other states that 
surround us to have an opportunity, as you said, to listen to 
the other side. And I think that that's very important.
    As I was explaining to some of the folks I was talking to 
before the hearing, this is unique in that we have the 
opportunity to talk to people from throughout the country. This 
is very important that we get all perspectives into this farm 
bill.
    You know, people don't recognize how important ag is in 
northern New York. It is an extraordinarily important part of 
what we do and what happens in our communities. It affects 
everything. It affects real property taxes, it affects the farm 
dealers. It has real impact on all of our lives on a daily 
basis.
    I can only tell you how thankful I am that you are here, 
that we are here collectively. And in particular, I'd like to 
thank Mr. Gibson for his participation and his assistance in 
this process. And let me also say that I hope that as we listen 
today, we take those skills back to Washington with us. Thank 
you very much.
    The Chairman. With that, the chair now recognizes Mr. 
Gibson.

      OPENING STATEMENT OF HON. CHRISTOPHER P. GIBSON, A 
            REPRESENTATIVE IN CONGRESS FROM NEW YORK

    Mr. Gibson. Thank you, Mr. Chairman, and let me just echo 
the comments of my colleague, Bill Owens. This is a historic 
day for this part of the state and indeed for our state in 
general. You know, the Chairman listed some of the data, that 
second in the nation with regard to dairy, second in the nation 
with regard to apples, third in the nation with regard to 
grapes, fifth in the nation with regard to specialty crops. We 
are a leader in the nation when it comes to farming in the 
agriculture sector of the economy.
    And what Bill Owens mentioned is absolutely correct, it's 
that we're here today to listen and to work together. And you 
turn on the news today, doesn't matter what channel that you 
happen to turn on, whether it's Fox or MSNBC, you hear all this 
negativity about the status of the country and the Democrats 
and Republicans won't work together. Let me just tell you that 
I really value my friendship and the work that I do with Bill 
Owens. What we're doing here today, with regard to farming, is 
critically important.
    As the Chairman mentioned, we're here today to make sure 
that we have the right input, because we're getting ready to 
write a bill this year that's going to impact this sector of 
the economy for the next 5 to 6 years and we need to get it 
right.
    And so, Mr. Chairman, thank you for--you're only doing four 
of these across the entire United States of America, and the 
fact that you chose to come here, right here to Saranac Lake 
and into the Adirondack region, that really means a lot to me, 
and I want to thank you personally and professionally. I look 
forward to this hearing. I yield back.
    The Chairman. The gentleman yields back his time.
    The chair would request that other Members submit their 
opening statements for the record so the witnesses may begin 
their testimony and to ensure there's ample time for questions.
    [The prepared statement of Mr. Peterson follows:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    As we begin writing the next farm bill, we will hear directly from 
farmers and ranchers across the country on the issues they face every 
day.
    Writing a new farm bill will not be an easy task most notably due 
to budget constraints. Everybody is being asked to do more with less 
and, it seems to me, that agriculture is being asked to cut even more 
than others.
    The agriculture economy is the shining success of our nation's 
economy. We should not let those outside of agriculture try to mess up 
the only part of the economy that's actually working.
    It is my hope that everyone in agriculture--producers in all 
regions, representing all commodities--come together. We need to be 
united to pass a good farm bill.
    I thank the witnesses for making the time to testify hear today.

    The Chairman. With that, I'd like to welcome our first 
panel of witnesses to the table: Mr. Eric Ooms, a dairy 
producer, Partner in Adrian Ooms & Sons, Incorporated, Old 
Chatham, New York. We also have Mr. Neal Rea, dairy producer, 
Chairman, Agri-Mark Dairy Cooperative, Salem, New York. We also 
have Mr. Jeremy Verratti, a dairy and crop producer, Verratti 
Farms, LLC, Gasport, New York. And with us also is Ms. Michele 
Ledoux, a beef producer, Adirondack Beef Company, New York.
    With that, Mr. Ooms, begin when you're ready, please.

STATEMENT OF ERIC OOMS, DAIRY PRODUCER; PARTNER, ADRIAN OOMS & 
                  SONS, INC., OLD CHATHAM, NY

    Mr. Ooms. Thank you. I would like to start by thanking the 
Chairman, and Congressmen Peterson, Gibson and Owens for the 
opportunity to testify here today.
    My father, two brothers and I are partners in a 450 cow 
dairy farm in Kinderhook, New York. We raise approximately 
1,800 acres of corn, alfalfa and various grasses for our own 
herd as well as for cash crops. In 2011, we erected a grain 
dryer and storage to further diversify our business. My wife, 
Catherine Joy, and I have two children, Arend who is 4, Grace 
who is 2, and it's my goal as a farmer and a dad that my kids 
have the same opportunities to work on a farm like I did with 
my dad.
    Dairy farming has been on a veritable roller coaster for my 
family and everyone else in the dairy industry for quite some 
time. Dairy prices in 2009 caused indescribable pain in the 
industry. I think you all know this. While the past 2 years 
brought considerably better dairy prices to farmers, high 
inputs have tempered the average dairy farmer's optimism. This 
year's forecast shows softening prices paid to farmers, but our 
inputs are not going down. In fact, the price of fuel is 
rising. This is very concerning.
    As we look forward, it's imperative to remember that we are 
now in a new paradigm of higher feed prices, so as policy 
makers and farmers, we need to keep this in mind as we build 
our farm business plans as well as formulate policy. It's also 
important to remember that while 2009 was a horrible 
experience, we cannot set policy for the next 5 years based 
solely on 1 year, but rather look at long-term trends. It is 
vitally important, as we go through this farm bill process, 
Congress not make things worse through their action or 
inaction.
    While there are some programs and structural pricing 
aspects that need to be changed, some programs are working for 
dairy farmers. For instance, the Federal Order System has been 
working. To dramatically change or eliminate the Federal Order 
System would result in pricing and market chaos that is not 
needed. EQIP has proven itself to be a valuable and effective 
program and funding should be maintained at adequate levels in 
the next farm bill. The vision of Capper-Volstead may have not 
worked a hundred percent perfectly, but overall, my cooperative 
has played a key role in helping my farm market my product as 
well as working with my neighbors in filling its market while 
balancing those farms' production. We need to protect this 
relationship.
    Credit is vital to any dairy farm. The cooperative 
structure of the Farm Credit System is in the long-term best 
interest of agriculture across the country. I urge no new 
regulatory burdens on Farm Credit. These are some policies that 
work reasonably well.
    Here are some items that could be reworked: In a perfect 
world with perfectly balanced budgets, we should work to 
improve MILC as a safety net. However, if we eliminate MILC, 
what are we putting in its place? Margin insurance programs 
have promise. LGM is very effective, although it has a critical 
flaw of being inaccessible due to severe under-funding. If MILC 
is eliminated, there must be something workable and equitable 
to replace it.
    Price discovery remains a concern. Theoretically, the CME 
and NAS Survey should work. However, with so little trading on 
the CME, producers are skeptical. Competitive pay price modeled 
after the former M-W could be a way to go here. USDA's recent 
rule on electronic price reporting is a step in the right 
direction. I appreciate the Committee's work in bringing this 
reform to reality. We will see in the next few months or years 
what tweaking is needed. The Price Support Program seems to 
have outlived its usefulness and it seems as though there is a 
national industry consensus to eliminate it. These savings 
could be used to bolster whatever safety net replacement 
vehicle the farm bill puts in place.
    There are also some initiatives that we are not doing that 
we should be doing, such as since the 1960s, California has 
been fortifying milk with higher solids, non fat. With study 
after study showing that kids are not getting enough calcium, 
this is a common sense idea that we should have been doing for 
years.
    The Dairy Security Act should be a major focus of farm bill 
discussions. Farm Bureau supports the Dairy Security Act 
because the supply management component of this proposal is 
voluntary. A voluntary supply management plan gives producers 
the freedom to make the best decision for their farm free of 
D.C. bureaucrats.
    Before I close, I would not be doing my job if I did not at 
least mention the need for labor in agriculture, not just 
dairy. In addition to the DOL's proposed regulations for youth 
labor, just need to point out if there is to be an E-Verify 
bill there needs to be an agricultural guest-worker component. 
Overall, we need immigration and H-2A reform. While this is not 
in the jurisdiction of the Agriculture Committee or the farm 
bill, I urge each of you as Members of Congress to remember 
that we have a choice in America to import labor or import 
food.
    I applaud those Members of the Committee like Congressman 
Gibson and Congressman Owens, who are working toward that end 
and would urge all of you to help us in this endeavor.
    Thank you again for giving me the opportunity to comment 
here today.
    [The prepared statement of Mr. Ooms follows:]

Prepared Statement of Eric Ooms, Dairy Producer; Partner, Adrian Ooms & 
                      Sons, Inc., Old Chatham, NY
    Good morning. I would like to start by thanking Chairman Lucas, 
Congressman Peterson, Congressman Gibson and Congressman Owens for the 
opportunity to testify here today.
    My name is Eric Ooms. My father, two brothers and I are partners in 
a 450 cow dairy farm in Kinderhook, NY. We raise approximately 1,800 
acres of corn, alfalfa and various grasses for our own herd as well as 
for cash crops. In 2011, we erected a grain dryer and storage to 
further diversify our business. My wife Catherine Joy and I have two 
children, Arend who is 4 and Grace who is 2. It is my goal as a farmer 
and a father that my kids have the same opportunities to work on the 
farm with their dad, like I did with mine.
    In my role as Vice President of New York Farm Bureau, I would like 
to thank the Committee for holding one of its farm bill field hearings 
here in the Empire State where the economic impact of agriculture is 
well over $4 billion to our state's economy. New York can boast about 
its diversity in food products as well as its national rankings for 
certain commodities. We are the second largest apple producer, third 
largest grape producer, fourth largest dairy producer and sixth largest 
vegetable producing state.
    In addition, New York has become the new hot destination for yogurt 
processing with our local milk supply and proximity to major east coast 
populations. You are probably familiar with the recent success stories 
of Greek yogurt manufacturers Chobani and Fage, but New York has also 
recently welcomed the international corporations of Alpina and Mueller 
to our Genesee Valley Agri-Business Park in Batavia. Our own Upstate 
Niagara Milk Cooperative is also revitalizing the former Kraft plant in 
St. Lawrence County for Greek yogurt production. All this yogurt 
activity brings opportunity for more sourcing of local milk which New 
York farmers hope to meet.
    I have been asked to talk about dairy policy as it pertains to the 
farm bill and I am happy to do so. Dairy farming has been a veritable 
roller coaster for my family and everyone else in the dairy industry 
for quite some time. Dairy prices in 2009 caused indescribable pain and 
suffering in the dairy industry, I think you all know this. While the 
past 2 years brought considerably better dairy prices paid to farmers, 
high inputs have tempered the average dairy farmers' optimism. This 
year's forecast shows softening milk and cheese prices paid to farmers, 
but our inputs are not going down. In fact, the price of fuel is rising 
. . . this is very concerning.
    As we look forward, it is imperative to remember that we are in a 
new paradigm of higher feed prices. So as policy makers and farmers, we 
need to keep this in mind as we build our farm business plans as well 
as formulate policy. It is also important to remember that while 2009 
was a horrible experience for all of us, we cannot set policy for the 
next 5 (or fifty) years based solely on one year, but rather look at 
long term trends.
    It is vitally important as we go through this farm bill process 
that Congress not make things worse through their action or inaction. 
While there are some programs and structural pricing aspects that need 
to be changed, some programs are working for dairy farmers (even if 
they are imperfect):

   The Federal Order System has been working and to 
        dramatically change or eliminate the Federal Order System would 
        result in pricing and market chaos that is NOT needed. I would 
        further add, that component pricing in the Federal Orders has 
        worked as well.

   In regards to the Federal pricing formula, the current Class 
        I price differentials are working. As a New Yorker, I would 
        always like to see them a little higher and would welcome 
        decoupling of Class I from manufacturing milk for price 
        determination. I do realize that this is not politically 
        realistic and would recommend Congress not adjust them 
        significantly.

   The continued inclusion and importance of dairy products in 
        the School Meals Program. There is no better source of calcium, 
        potassium, protein and vitamins A, D and B12. This 
        is a win for kids and farmers.

   The Environmental Quality Incentives Program (EQIP) has 
        proven itself to be a valuable and effective program that has 
        helped every dairy farmer in one form or another meet their 
        environmental regulatory obligations. These EQIP dollars are a 
        smart and cost-efficient investment of taxpayer money for 
        agriculture and the environment. EQIP funding should be 
        maintained at adequate levels in the next farm bill.

   The vision of the Capper-Volstead Act may have not worked 
        out 100% perfect, but overall my Cooperative has played a key 
        role in helping my farm market my product as well as working 
        with my neighbors in filling niche markets while balancing 
        those farms production. We need to protect this relationship.

   Credit is vital to any dairy farm. Over 65% of ag credit in 
        the Northeast is provided by the Farm Credit System. The 
        Cooperative structure of the Farm Credit System is in the long-
        term best interest of agriculture across the country. I urge no 
        new regulatory burdens on Farm Credit.

    Those are some of the policies and programs that work reasonably 
well. Here are some items that could be re-worked:

   Milk Income Loss Contract Program (MILC). In a perfect world 
        with perfectly balanced budgets, we should work to improve MILC 
        as a safety net for producers, but we are faced with real-world 
        fiscal issues where money does not grow on trees. If we 
        eliminate MILC, what are we putting in its place? Margin 
        insurance programs have promise, and the Livestock Gross Margin 
        insurance program (LGM) is very effective although it has the 
        critical flaw of being highly inaccessible due to severe under-
        funding. Many producers would like to take advantage of LGM 
        only to find themselves shut out of the program. If MILC is 
        eliminated, there must be something workable and equitable to 
        replace it.

   Price Discovery remains a concern. Theoretically, using the 
        Chicago Mercantile Exchange and National Ag Statistics Survey 
        should work; however with so little trading on the CME, 
        producers are skeptical, rightly or wrongly there is a real 
        lack of faith. A competitive pay price modeled after the former 
        Minnesota-Wisconsin pricing formula could be a way to go here. 
        USDA's recent rule on auditing and electronic price reporting 
        is a step in the right direction. I appreciate the Committee's 
        work in bringing this reform to reality and we will see in the 
        next few months or years what tweaking is needed.

   Dairy Price Support Program (DPSP). DPSP seems to have 
        outlived its usefulness and it seems as though there is 
        national industry consensus to eliminate it. The savings could 
        be used to bolster whatever safety net replacement program 
        vehicle the farm bill puts in place.

   Import assessment for dairy promotion. We certainly 
        appreciate the inclusion of a $.075 per cwt assessment on 
        imported dairy products in the most recent farm bill. I would 
        just remind the Committee that domestic producers are still 
        paying $.15 per cwt for the same promotion.

    There are also some initiatives that we are not doing that we 
should be doing:

   California Standards for Fluid Milk. Since the 1960's 
        California has been fortifying milk with higher solids non fat. 
        With study after study showing that kids are not getting enough 
        calcium, this is a common sense idea that we should have been 
        doing for years.

   Farm Savings Accounts. This tax strategy tool helps farmers 
        manage risk voluntarily by shifting income during profitable 
        years via tax-deferred deposits into a savings account for 
        withdrawal during less profitable years.

    To comment on the Dairy Security Act, a proposed bill to reform 
existing pricing and safety net policies which should be a major focus 
of farm bill discussions. Farm Bureau supports the Dairy Security Act 
because the supply management component of this proposal is voluntary. 
If an individual producer chooses to limit production and the Federal 
Government wants to incentivize this, that is the producer's decision 
and we support that. Earlier, I mentioned the rapid growth of the 
yogurt sector here in New York and the opportunity it brings for more 
sourcing of local milk. A voluntary supply management plan gives 
producers the freedom to make the best decision for their farm 
operation--whether that is to enroll in the voluntary supply 
management/margin insurance program or increase production to meet new 
market demand from yogurt processing.
    Before I close, I would not be doing my job if I did not at least 
mention the need for labor in agriculture (not just dairy). One of the 
most serious issues facing farmers today is the U.S. Department of 
Labor's (DOL) proposed youth agricultural labor regulations. Despite a 
re-proposal of the parental exemption, farmers have no indication that 
our concerns will be addressed. Also, the hazardous occupations orders 
are set to be finalized in August and the original proposal places 
serious restrictions on the activities youth can do on the farm--things 
that are safe and part of the learning process on farms. How these will 
be finalized is a major concern. It is important that the Committee 
remain vigilant on both these issues to protect our family farms.
    Similarly, if there is to be an E-Verify bill, there needs to be an 
agricultural guest-worker component. Overall, we need immigration 
reform and H-2A reform. While this is not in the jurisdiction of the 
Agriculture Committee or the farm bill, I urge each of you as Members 
of Congress to remember that we have a choice in America to import 
labor or import food. I applaud those Members of the Committee like 
Congressmen Gibson and Owens who are working toward that end and would 
urge all of you to help us in this endeavor.
    I know the road to a new farm bill is long and time is short. NYFB 
stands ready to help you and Committee staff craft a thoughtful and 
workable farm bill to serve our family farms. Thank you again for 
giving me the opportunity to comment here today. I would be happy to 
answer any questions you have at this time.

    The Chairman. Thank you.
    Mr. Rea, proceed when you're ready.

 STATEMENT OF NEAL REA, DAIRY PRODUCER; CHAIRMAN OF THE BOARD, 
             AGRI-MARK DAIRY COOPERATIVE, SALEM, NY

    Mr. Rea. Thank you. Chairman Lucas and House Agriculture 
Committee Members, thank you for allowing me to testify today 
about dairy policy as it impacts me, my family, my farm, and my 
cooperative.
    I'm Neal Rea. I own a dairy farm with my wife Carol, our 
two sons Thane and Travis, and our daughter-in-law Karen. Our 
dairy is located in Washington County, New York, and has been 
in our family for more than 200 years. It is because of the 
unselfish dedication of my family to the success of our dairy 
that I am able to serve as the Chairman of the Board for my 
cooperative, Agri-Mark, and on the Board of Directors for NMPF.
    Agri-Mark is a dairy cooperative here in the Northeast with 
more than 1,200 members in New York and the New England States. 
Our members are proud owners of McCadam cheese, an award-
winning cheddar produced in Chateaugay, New York, only a short 
distance from here. Our members also own our fabulous flagship 
brand, Cabot of Vermont. The 2012 Farm Bill is discussed at 
nearly every monthly Agri-Mark board meeting. Today's hearing 
is timely and greatly appreciated.
    First, I would like to share our farm experiences of 2009 
and the progression of events leading up to today. Our farm has 
very little new equipment. We rely on good used equipment which 
we maintain ourselves. We have milk cow facilities to house 
about 190 cows. Construction of these facilities was 
accomplished over many years with some approaching 45 years 
old. Our most recent addition was completed during the winter 
of 2010 and 2011. Our milking center is housed in our original 
stanchion barn.
    As 2009 progressed, we've joined the thousands of dairy 
farm operations that became victims of negative cash flow. Our 
milk checks were considerably less than the corresponding 
bills. There were tears, sleepless nights, frustration and 
tension. Carol's philosophy was, and still is, that we must pay 
for cows' feed, we must pay for electricity, and we must pay 
for herd health. All other creditors will be paid as possible. 
Some months we would only pay a hundred dollars on a bill that 
was over a thousand dollars. Our own pay was delayed by months. 
It was extremely difficult to face our agriculture supply and 
service providers with partial payments knowing they too had to 
borrow huge sums of money to cover their operating expenses and 
deficit income.
    When the situation became overwhelming, we went to Farm 
Credit for operating capital. This had a residual effect 
through much of 2010 and even into 2011 because of the need to 
pay back borrowed money. Our margins were squeezed.
    The difference between the farm milk price and feed cost 
are often referred to as dairy margins. These margins determine 
if a dairy can pay its bills and stay in business. Severely low 
or even negative margins in 2009 and 2010 made capital and land 
investments impossible. The average margin in 2009 was $3.66. 
Even when margins improved in 2010, they were insufficient to 
cover costs. Margins did a fair recovery to a degree in 2011 to 
$7.59, but are shrinking as we speak and are projected to be 
about $5.80 this year.
    Given this dire situation on our farm, I was extremely 
proud to be selected to the NMPF task force several years ago 
whose goal was to develop a new dairy policy for 2012 Farm 
Bill. I truly believe it was the affirmation of adversity that 
brought dairy farmers from New York and New England together 
with dairymen from all over the country to design policy that 
would provide a better safety net, reduce extreme volatility 
and cost less to government. I have gained friends and 
confidants from all across the country with the same goal.
    Margin protection is the key to a successful national dairy 
policy. This is exactly why Agri-Mark designed a marginal milk 
pricing plan, which later became a vital part of Foundation for 
the Future and eventually today's Dairy Security Act. Combined 
with an adequate Margin Insurance Program, dairy farmers will 
have a key management tool to navigate the current and future 
extreme farm milk and feed price volatility climates.
    Margin insurance should allow farmers to chose their level 
of participation as well as be affordable and encourage all 
sizes and types of operations to be protected. However, a break 
in premium for producers would be greatly appreciated.
    The secret ingredient, from my perspective, is compromise, 
consensus and commitment. Remarkably, farmers representing 
about 80 percent of U.S. milk production have come to a 
consensus, and we urge you to support the principles of the 
Dairy Security Act. Thank you for your attention.
    [The prepared statement of Mr. Rea follows:]

Prepared Statement of Neal Rea, Dairy Producer; Chairman of the Board, 
                 Agri-Mark Dairy Cooperative, Salem, NY
    Chairman Lucas, Ranking Member Peterson and House Agriculture 
Committee Members: thank you for allowing me to testify today about 
dairy policy as impacts me, my family, my farm, and my co-op.
    I am Neal Rea. My wife, Carol, and I own a dairy farm with our two 
sons, Thane and Travis, and daughter-in-law Karen. Our dairy is located 
in Washington County, and has been in our family for more than 200 
years. It is because of the unselfish dedication of my family to the 
success of our dairy that I am able serve as the Chairman of the Board 
for my cooperative, Agri-Mark and on the board of directors for 
National Milk Producers Federation.
    Agri-Mark is a dairy cooperative here in the Northeast with more 
than 1,200 members in New York and the New England states. We have many 
member farms north of us along the St. Lawrence River basin; from the 
Vermont border to Lake Ontario. Our members are the proud owners of 
McCadam cheese, an award winning cheddar produced in Chateaugay, NY--
only a short distance from here. Our members also own our fabulous 
flagship brand Cabot of Vermont.
    Very seldom does an Agri-Mark monthly board meeting conclude 
without the 2012 Farm Bill debate being mentioned, so on my own behalf 
as well as on the farmers I represent through Agri-Mark, we sincerely 
appreciate the House Agriculture Committee Members and staff traveling 
to New York to hear from dairy producers like myself.
    First, I would like to share our farm experiences from 2009, and 
the progression of events leading up to today's very timely House 
Agriculture Committee hearing. We have very little new equipment on our 
farm; we rely on good used equipment which we maintain ourselves. We 
have milk cow facilities to house about 190 cows. Construction of these 
facilities was accomplished over many years; some of our housing is 45 
years old. Our most recent addition was completed during the winter of 
2010/11. Our milking center is housed in the original stanchion barn; 
the equipment was used and expanded over the years to a current double 
9 herringbone.
    As the terrible conditions of 2009 played out (progressed) we 
became the victim of negative cash flow. Our milk checks were 
considerably less than the corresponding bills. There were tears, 
sleepless nights, frustration and tension. Carol's philosophy was and 
still is: we must pay for the cows feed, we must pay for electricity, 
and we must pay for herd health. All other creditors were on an 
allotment program. Some months we could only pay $100 on a bill that 
was over $1,000. Sometimes our own pay was delayed by months. It was 
extremely difficult to face your agriculture supply personnel with 
partial payments, knowing they themselves had to borrow huge sums of 
money to cover their own operating expenses and deficit income. When 
the situation became overwhelming, we went to Farm Credit for operating 
capital. This had residual effects through much of 2010, because of 
extended credit and the need to pay back borrowed money.
    Dairy farmers are a resilient breed, and I have a deeper 
appreciation for those who survived 2009.
    Margins (the difference between the feed costs and the milk price) 
became ever so important. This is exactly why Agri-Mark designed a 
program which later became a vital part of the National Milk Producers 
Federation's Foundation for the Future, which is now the basis for the 
Dairy Security Act.
    What has become clear to the dairy producer community from this 
extraordinary strain is that we need a combination of approaches to 
deal with the current situation. To address the underlying problems 
that caused this crisis and the many industry factors that contributed 
to its depth and protracted nature, we need to focus on solutions that 
avoid recurrences of this situation in the future.
    Toward that end, NMPF created a Strategic Planning Task Force to 
seek consensus across the dairy producer community and create a solid 
``Foundation for the Future.'' I and my co-op, Agri-Mark, have been an 
integral part of this process. The goal of the Strategic Planning Task 
Force was to analyze and develop a long-term strategic plan for 
consideration by the NMPF Board of Directors that would have a positive 
impact on the various factors influencing both supply and demand for 
milk and dairy products. It is extremely important to develop workable 
and realistic solutions that will garner broad support from dairy 
producers nationwide in order to unify behind an approach as this 
Committee begins to consider the next farm bill.
    I was extremely proud to be selected to the NMPF task force, 
designed to develop a new dairy policy for the 2012 Farm Bill. I truly 
believe it was the aforementioned adversity that brought dairy farmers 
from NY and Vermont together with dairymen from all over the country to 
design a dairy policy that would be less costly to the government and 
with the ability to correct the extreme volatility that caused the 
wreck of 2009. Throughout the process, I have gained friends and 
confidants from other major milk-producing regions of the country 
including New Mexico, California, Idaho, Michigan, Wisconsin, Nebraska 
and Indiana.

    Margin protection is the key to the success of a dairy policy. The 
secret ingredient from my perspective now is compromise, consensus and 
commitment.

    Rather than offering just one solution, dairy policy must be multi-
faceted: it must refocus existing farm-level safety nets; create a new 
program to protect farmers against low margins; and establish a way to 
better balance dairy supply and demand. I would like to touch on each 
aspect of this approach.

    1. Refocusing Current Safety Nets

      Both the Dairy Product Price Support Program and the MILC program 
        are inadequate protections against not just periodic low milk 
        prices, but also in confronting the destructively low profit 
        margins that occur when input costs, especially feed prices, 
        shoot up. The Dairy Product Price Support Program, in 
        particular, has outlived its usefulness and hinders the ability 
        of U.S. and world markets to adjust timely and effectively to 
        supply-demand signals.
      Discontinuing the Price Support Program (DPPSP) would allow 
        greater flexibility to meet increased global demand and shorten 
        periods of low prices by reducing foreign competition in the 
        marketplace. Additionally, shifting resources from the Price 
        Support Program toward a new margin protection program would 
        provide farmers a more effective safety net.
      As the Chairman and Ranking Member may recall, NMPF vigorously 
        defended the importance of the price support program, albeit 
        modified to make improvements in certain respects, in the 2008 
        Farm Bill process. But at the end of the day, it is clear that 
        the dairy product price support program is not the best use of 
        Federal resources to establish a safety net to help farmers 
        cope with periods of low prices and is not the most effective 
        way of achieving this goal.

       The DPPSP reduces total demand for U.S. dairy products 
            and
              dampens our ability to export, while encouraging more 
            foreign im-
              ports into the U.S.

                The price support program effectively reduces U.S. 
                exports, by diverting some of our milk flow into 
                government warehouses, rather than to commercial buyers 
                in other nations. It creates a dynamic where it's 
                harder for the U.S. to be a consistent supplier of many 
                products, since sometimes we have products to export, 
                and at other times, we just sell our extra production 
                to the government.

       The Program acts as a disincentive to product 
            innovation.

                It distorts what we produce, i.e., too much nonfat dry 
                milk, and not enough protein-standardized skim milk 
                powder and whole milk powder as well as specialty milk 
                proteins such as milk protein concentrate, that are in 
                demand both domestically and internationally. Because 
                the price support program is a blunt instrument that 
                will buy only nonfat dry milk--and because that's what 
                some plants have been built to produce, as opposed to 
                other forms of milk powder--it puts the U.S. at a 
                competitive disadvantage to other global dairy vendors.

       DPPSP supports dairy farmers all around the world and 
            disadvan-
              tages U.S. dairy farmers.

                Further aggravating measures, the current program helps 
                balance world supplies, by encouraging the periodic 
                global surplus of milk products to be purchased by U.S. 
                taxpayers. Dairy farmers in other countries, 
                particularly the Oceania region, enjoy as much price 
                protection from the DPPSP as our own farmers. Without 
                USDA's CCC buying up an occasional surplus of dairy 
                proteins in the form of nonfat dry milk, a temporarily 
                lower world price would affect our competitors--all of 
                whom would be forced to adjust their production 
                downward--and ultimately hasten a global recovery in 
                prices.

       The DPPSP isn't effectively managed to fulfill its 
            objectives.

                Although the DPPSP has a standing offer to purchase 
                butter, cheese and nonfat dry milk, during the past 12 
                years, only the last of that trio has been sold to the 
                USDA in any significant quantity. In essence, the 
                product that the DPPSP really supports is nonfat dry 
                milk. Even at times when the cheese price has sagged 
                well beneath the price support target, cheese makers 
                choose not to sell to the government for a variety of 
                logistical and marketing-related reasons, such as 
                overly restrictive packaging requirements. We have 
                tried to address these problems, but USDA has to date 
                been unwilling to account for the additional costs 
                required to sell to government specifications. Once 
                purchased, powder returning back to the market from 
                government storage also presents challenges, and can 
                dampen the recovery of prices as government stocks are 
                reduced.

       The price levels it seeks to achieve aren't relevant to 
            farmers in
              2012.

                Even though the $9.90 per hundredweight milk price 
                target was eliminated in the last farm bill, the 
                individual product price support targets: $1.13/lb. for 
                block cheese, $0.85 for powder, and $1.05 for butter--
                essentially will return Class III and IV prices around 
                $10/cwt. But in an era of higher cost of production, 
                that minimal price isn't acceptable in any way, shape 
                or form.

      In summary, discontinuing the DPPSP would eventually result in 
        higher milk prices for U.S. dairy farmers. By focusing on 
        indemnifying against poor margins, rather than on a milk price 
        target that is clearly inadequate, we can create a more 
        relevant safety net that allows for quicker price adjustments, 
        reduced imports and greater exports. As a result of our DPPSP, 
        the U.S. has become the world's balancing plant--and dairy 
        suppliers in other countries know this all too well. As time 
        marches on, so, too, must our approach to helping U.S. farmers. 
        It is because of this that America's dairy producers and coops 
        are focused upon a transitional process that shifts the 
        resources previously invested in the dairy product price 
        support program and the MILC program, to a new producer income 
        protection program.

    2. Dairy Producer Margin Protection Program

      As mentioned above, existing safety net programs (the price 
        support program, and the MILC program) were created in a 
        different era. Neither was designed to function in a more 
        globalized market, where not just milk prices, but also feed 
        costs and energy expenses, are more volatile and trending 
        higher. In the future, the solvency of dairy farms will depend 
        more on margins than just the milk price alone. In order to 
        address this dilemma, dairy farmers and cooperatives are 
        supporting a revolutionary new program called the Dairy 
        Producer Margin Projection Program. It will help insure against 
        the type of margin squeeze farmers experienced not only in 
        2009, and also at other points in the past when milk prices 
        dropped, feed costs rose--or both conditions occurred in 
        tandem.
      In developing the Dairy Producer Marge Protection Program, a few 
        important principles have been followed:

       Losses caused by either low milk prices or high feed 
            costs need to be cov-
              ered.

       A farmer's cost for basic protection must be kept low or 
            nonexistent.

       The level of protection available should be flexible, 
            and producers should
              be able to purchase a higher level of protection if they 
            choose.

       The program should be voluntary, national in scope, and 
            open to all dairy
              farmers, regardless of size.

       The program should not provide incentives to create 
            artificial over-produc-
              tion.

       The program must be easy to access by all producers 
            through a simple ap-
              plication process or through the assistance of their 
            cooperative.

    3. Market Stabilization

      Farmers have worked together since 2003, through the Cooperatives 
        Working Together (CWT) program, to address both the supply and 
        the demand sides of the equation that ultimately determines 
        milk prices. But more is needed.
      The Dairy Security Act contains a market stabilization program 
        that prompts dairy farmers, only when absolutely needed, to 
        adjust their milk output during periods of low margins.
      To prevent steep and prolonged price declines--the likes of which 
        we suffered from literally every day in 2009--the stabilization 
        program encourages farmers to trim their milk output. This 
        allows supply and demand to more quickly align, prevents 
        dramatic price volatility, and avoids a prolonged l-margin 
        environment. It also contains provisions that would make the 
        program export-sensitive, meaning that if the U.S. risks losing 
        its share of world dairy sales because of a misalignment of 
        prices, the market stabilization program will trigger back out.
      And it's also important to remember that in the absence of the 
        price support program, U.S. and world milk prices will 
        naturally be in much greater alignment.
      Now, this type of system is not for everyone, and the best part 
        is, it's voluntary. Only those producers who opt for the margin 
        protection program would have to reduce their output. Those who 
        don't want any government safety net won't be subject to the 
        stabilization program.

    All of these potential changes will ultimately require a new way of 
thinking about dairy economics. The dairy farmers I know recognize 
something has to be done before all the farms are gone and if there is 
one lesson to be learned from 2009; it's that change is needed.
    Thank you again for your time and attention.

    The Chairman. Thank you.
    Mr. Verratti, when you're ready.

   STATEMENT OF JEREMY L. VERRATTI, DAIRY AND CROP PRODUCER, 
                VERRATTI FARMS, LLC, GASPORT, NY

    Mr. Verratti. Thank you. Good morning. My name is Jeremy 
Verratti. I'm a dairy and crop farmer from Gasport, New York, 
in Niagara County. I received my 4 year bachelors of science 
degree in business administration from the University of 
Buffalo. I'm a member of the Asset Liability Committee at 
Cornerstone Community Federal Credit Union and an active member 
of the Lockport Alliance Church. I have also been a leader of 
the Young Cooperators Program at our dairy cooperative, Upstate 
Niagara, along with my late wife, Stephanie, who passed away in 
a car accident a bit over a year ago.
    Members of the Committee, thank you for giving me this 
opportunity to testify about the future of family farms in 
America. The farm policies that guide your formulation of the 
2012 Farm Bill will have a major impact on sustaining family 
farms such as ours.
    We are a fourth generation farm called Verratti Farms. At 
the moment, my father Dan, my two brothers Daniel and Ben, and 
I support our families by working on our farm. To help all of 
our families do all of the work on the farm, we have seven 
full-time employees and about two part-time employees. We milk 
over 450 cows. This means that there about 50 cows to generate 
enough income for each family that is depending on our farm for 
their livelihood.
    Our farm's main source of income comes from milking cows. 
We feed our cows corn and hay that we grow on our own farm. In 
addition, we generate cash by selling some of our corn, 
soybeans and wheat. We grow these crops on about 1,400 acres of 
land that our farm owns and rents.
    Verratti Farms has been recognized as a dairy of 
distinction for 20 years and has won various awards for the 
high quality of milk we produce. Our farm has been a member of 
a cooperative for decades. As our cooperative has grown, so has 
the markets for our milk, both in terms of geography and in 
terms of the numbers and types of customer.
    For example, instead of just selling fluid milk to retail 
chains in western New York, as we did successfully for decades, 
nowadays our cooperative sells many different products 
throughout the United States and overseas. Among these products 
are traditional dairy products such as yogurt, cottage cheese, 
chip dip and ice cream mix as well as a number of shelf-stable 
innovative products such as sports drinks and dairy-based 
alcoholic beverages. It is essential that the 2012 Farm Bill 
help cooperatives and farms such as ours continue to benefit 
from these growing markets for dairy products in the United 
States and overseas.
    The package of ideas called Foundation for the Future 
achieves this goal and is the basis for the Dairy Security Act. 
The package of ideas set forth in Foundation For the Future is 
being supported by National Milk Producers Federation and many 
others including myself, Verratti Farms, and my cooperative, 
Upstate Niagara.
    In my brief time with you today, I want to emphasize one of 
the essential policies advocated by the Foundation for the 
Future that should guide your formulation of the 2012 Farm Bill 
sustaining family farms such as Verratti Farms.
    Why do I care so much about sustaining family farms? Our 
farm in Gasport is now supporting its fourth generation of 
Verrattis. We want to stay dairy farmers and we want to stay in 
Gasport. Not only is western New York our home and a great 
place to live, but our family is heavily invested financially 
and emotionally in this farm that has been our home for 75 
years.
    Financially, here are some of the keys to sustaining family 
farms: In the long run, the price level of milk depends on 
demand growing for dairy products in the United States and 
overseas. But in the short run, from time to time, there are 
bumps in the road in pricing that cause great financial and 
emotional stress on family farms. Sometimes these bumps are the 
price we are paid for our milk, sometimes these bumps are the 
price we must pay for feed, fuel and fertilizer.
    A key part of the Foundation for the Future is to focus on 
the margin between milk prices and input cost such as feed. 
Margin insurance that is promoted and partially subsidized by 
the Federal Government would be very helpful in weathering 
these bumps in the road that disrupts normal market pricing. In 
fact, sometimes, as in 2009, these bumps are more like a 
boulder in the field you're plowing, a seismic shake, or even a 
widespread earthquake that threatens the foundation of an 
entire industry. As a young dairy producer, I will never forget 
the financial hardship of 2009.
    However, sustaining family farms is more than a matter of 
good financial policy. Sustaining family farms is a matter of 
good public policy in the broadest sense of the term. We must 
work to keep our farms in the communities they are in and we 
must do it now.
    Being widowed at the age of 26 changed my view of life and 
time. Time is short. God gives us days to work as farmers and 
He gives us days to work as elected officials. However, none of 
us knows how long that particular opportunity will present 
itself.
    I want to marry again, have children, and be able to raise 
those children around the farm. Members of this Committee, 
please move forward with meaningful change so that I may 
realize these dreams. Thank you for your time and attention.
    [The prepared statement of Mr. Verratti follows:]

  Prepared Statement of Jeremy L. Verratti, Dairy and Crop Producer, 
                    Verratti Farms, LLC, Gasport, NY
    My name is Jeremy Verratti. I am a dairy and crop farmer from 
Gasport, New York near Lockport.
    I received my 4 year Bachelor's of Science Degree in Business 
Administration from the University at Buffalo. I am a member of the 
Asset Liability Committee (ALCO) at Cornerstone Community Federal 
Credit Union and an active member of the Lockport Alliance Church.
    I have also been a leader of the Young Cooperators program at our 
dairy cooperative, Upstate Niagara, along with my late wife, Stephanie, 
who passed away in a car accident a bit over a year ago.
    Members of the Committee, thank you for giving me this opportunity 
to testify about the future of family farms in America. The farm 
policies that guide your formulation of the 2012 Farm Bill will have a 
major impact on sustaining family farms such as ours.
    We are a fourth generation farm, called Verratti Farms. At the 
moment, my father (Dan), my two brothers (Daniel and Ben), and I 
support our families by working on our farm. To help our families do 
all of the work on the farm, we have seven full-time employees and 
about two part-time employees.
    We milk over 450 cows. This means that there are about 50 cows to 
generate enough income for each family that is depending on our farm 
for their livelihood.
    Our farm's main source of income comes from milking cows. We feed 
our cows corn and hay that we grow on our own farm. In addition, we 
generate cash by selling some of our corn, soybeans and wheat. We grow 
these crops on about 400 acres of land that our farm owns and about 
1,000 acres of land that we rent.
    Verratti Farms has been recognized as a Dairy of Distinction for 20 
years and has won various awards for the high quality milk we produce.
    Our farm has been a member of a cooperative for decades. As our 
cooperative has grown, so have the markets for our milk--both in terms 
of geography and in terms of the numbers and types of customers.
    For example, instead of just selling fluid milk to retail chains in 
western New York as we did successfully for decades, nowadays our 
cooperative sells many different products throughout the United States 
and overseas. Among these products are traditional dairy products such 
as yogurt, cottage cheese, chip dip, and ice cream mix, as well as a 
number of shelf stable, innovative products such as sports drinks and 
dairy-based alcoholic beverages.
    It is essential that the 2012 Farm Bill help cooperatives and farms 
such as ours continue to benefit from these growing markets for dairy 
products in the United States and overseas. The package of ideas called 
``Foundation for the Future'' achieves this goal and is the basis for 
the Dairy Security Act.
    The package of ideas set forth in Foundation for the Future is 
being supported by National Milk Producers Federation and many others, 
including myself, Verratti Farms, and my cooperative, Upstate Niagara.
    In my brief time with you today, I want to emphasize one of the 
essential policies advocated by Foundation for the Future that should 
guide your formulation of the 2012 Farm Bill--sustaining family farms 
such as Verratti Farms.
    Why do I care so much about sustaining family farms? Our farm in 
Gasport is now supporting its fourth generation of Verrattis. We want 
to stay dairy farmers. And we want to stay in Gasport. Not only is 
Western New York our home, and a great place to live, but our family is 
heavily invested financially and emotionally in this farm that has been 
our home for 75 years.
    Financially, here are some of the keys to sustaining family farms.
    In the long run, the price level for milk depends on demand growing 
for dairy products in the United States and overseas.
    But in the short run, from time to time there are bumps in the road 
in pricing that cause great financial and emotional stress on family 
farms. Sometimes these bumps are the price we are paid for our milk. 
Sometimes these bumps are the price we must pay for feed, fuel and 
fertilizer.
    A key part of Foundation for the Future is to focus on the margin 
between milk prices and input costs such as feed. Margin insurance that 
is promoted and partially subsidized by the Federal Government would be 
very helpful in weathering the bumps in the road that disrupt normal 
market pricing. In fact, sometimes (as in 2009) these ``bumps'' are 
more like a boulder in the field you're plowing, a small seismic shake, 
or even a widespread earthquake that threatens the foundation of an 
entire industry. As a young dairy producer, I will never forget the 
financial hardship of 2009.
    However, sustaining family farms is more than a matter of good 
financial policy. Sustaining family farms is a matter of good public 
policy in the broadest sense of the term. We must work to keep our 
farms in the communities they are in and we must do it now.
    Being widowed at the age of 26, changed my view of life and time. 
Time is short. God gives us days to work as farmers and he gives us 
days to work as elected officials. However, none of us knows how long 
that particular opportunity will present itself. I want to marry again, 
have children and be able to raise those children around the farm. 
Members of this Committee, please move forward with meaningful change 
so that I may realize these dreams.
    Thank you for your time and attention.

    The Chairman. Thank you, Mr. Verratti.
    Ms. Ledoux, whenever you're ready.

STATEMENT OF MICHELE E. LEDOUX, BEEF PRODUCER, ADIRONDACK BEEF 
                      COMPANY, CROGHAN, NY

    Ms. Ledoux. Good morning, Mr. Chairman, Congressman Gibson, 
Congressman Owens, my Congressmen, and Members of the 
Committee. My name is Michele Ledoux and I am a beef producer 
from Croghan, New York.
    Before I begin, I'd like to thank you for traveling to the 
North Country to hold this field hearing on the farm bill. Most 
people don't think of New York when they think of agriculture, 
but it is one of the state's most important industries.
    I'm particularly grateful that Congressman Owens and 
Congressman Gibson are Members of the Agriculture Committee, 
especially as Congress begins to rewrite the farm bill this 
year. They are an important voice for this region, where 
agriculture is the driving force of our local economy.
    I appreciate the opportunity to testify on issues related 
to the livestock industry in upstate New York. My farm, the 
Adirondack Beef Company, is located outside of Croghan. It's a 
small village that may be best known as home of the American 
Maple Museum. During this time of the year, you can see steam 
rising from many sugar houses in and around the village. 
Croghan is located in Lewis County which has twice as many cows 
as people, though most are dairy with only about 800 beef cows 
in the county. This is not surprising. Nationwide, New York is 
the third largest dairy state, but ranks 34th for cattle 
production.
    With my husband Steve, son Jake, daughter Camille, our 
extended family and partner Ralph Chase, we operate a natural 
beef operation. We have not used any antibiotics or growth 
promotants for the past 12 years. We run approximately 50 
shorthorn brood cows, with an Angus bull, as a cow/calf 
operation. We calve out in the spring, market the feeder calves 
in the winter, and finish some for the direct-to-consumer and 
restaurant markets.
    Our family also raises natural lamb and pork. Our children 
have their own egg-laying operations and meat-bird business. 
This diversity allows us to offer a selection of meat products 
that consumers want when we sell at the farmers' market.
    Our farm is a member of the Pride of New York Program, the 
New York State Beef Producers Association and Adirondack 
Harvest, all organizations that help us with branding, 
marketing and promotion of our products. Our children are 
involved in both the Lewis County 4-H Youth Program and the 
Beaver River FFA Program. We hope that they can stay on the 
farm, but know that agriculture is a tough business for young 
people who have many other opportunities. The policies that you 
enact in Washington this year will help determine whether my 
son can make his living as a family farmer.
    As an aside, my daughter wants to be a large-animal 
veterinarian, helping to fill a shortage of these professionals 
in upstate farm communities. As a beef producer, I'm delighted 
there will be a new veterinarian in the pipeline. For Camille's 
sake, I hope you keep reauthorizing the Veterinarian Medicine 
Loan Repayment Program until she's ready for it.
    In addition to running our farm, both my husband and I have 
full-time jobs in ag-related industries. Steve works for Shur-
Gain, an animal feed company, and I work for the local Cornell 
Cooperative Extension office, for the past 26 years, where I am 
currently the Executive Director of Lewis County.
    I want to make it clear that I am not testifying on behalf 
of Cornell University or Cornell Cooperative Extension system, 
but as an independent beef producer who happens to work for 
extension. My hands-on farm experience makes me a better 
extension agent because I know firsthand what educational 
programs, resources and support are most relevant and needed 
for beef producers in our region. This is important because the 
Continuing Education Programs offered through Cornell 
Cooperative Extension and the New York State Department of 
Agriculture and Markets help us maintain a quality operation 
and a competitive edge.
    For example, my family has completed the Masters of Beef 
Advocacy and the Beef Quality Assurance Certification Programs. 
We also work with our veterinarian, Dr. Deanna Fuller, to 
attain our status as a bovine viral diarrhea and Johne's-free 
herd through the New York State Cattle Health Assurance 
Program. This program, sponsored by Agriculture and Markets and 
managed by the New York State Animal Health Diagnostic 
Laboratory at Cornell, ensures that ours is a clean, certified 
herd. It goes without saying that the livestock and dairy 
industries rely on a comprehensive and well-funded animal 
health network that conducts routine surveillance, monitoring 
and research to protect our herds from outbreaks and emerging 
diseases.
    Research, Education and Extension Programs at land-grant 
universities like Cornell are among the several farm bill 
programs that are of critical importance to the New York 
livestock industry. Farmers' Market Programs, that direct to 
consumer market, is a very important source of income for us. 
Our farm sells at the Central New York Regional Farmers' Market 
in Syracuse, and we also are considering starting a Community-
Supported Ag Program to support our local sales.
    We found that our consumers are willing to pay a premium 
for our natural beef. The higher prices we receive in farmers' 
markets allows us to cover the added costs of producing beef by 
these methods. Grants from the Farmers' Market Promotion 
Program to the Farmers Market Federation of New York has helped 
us with training and joint marketing. It's also supported 
region groups working on CSA models. In addition, cooperative 
extension is involved in these efforts by providing direct 
marketing training, seminars and workshops to farmers who have 
no experience selling to consumers.
    The Farmers Market Nutrition Program is an important source 
of income and a critical resource in helping expand farmers' 
markets into new areas. New York State has the most successful 
FMNP Program in the country and should serve as a model for 
other states.
    I urge you to reauthorize and fully fund the FMNP Program 
for both seniors and for WIC families. As the demand for local 
food grows, farmers' markets and other forms of direct sales 
have helped increase the viability and profitability of many 
farms like mine. Reauthorization and expansion of these 
programs should be a top priority in the farm bill.
    The 2008 Farm Bill finally included Permanent Disaster 
Assistance Programs that should be included, should be 
continued in 2012. Farmers need some assurance of protection 
when a catastrophic disaster strikes. Ad hoc assistance is too 
uncertain, especially in the current budget environment in 
Washington, D.C., and the state, and often takes too long to 
access.
    We took advantage of Disaster Programs when a drought hit 
our farm a few years ago. New York State most recently had to 
deal with flooding from Hurricane Irene and Tropical Storm Lee 
last summer. While my farm was not affected, I know many 
producers in other parts of the state who lost entire crops 
including forage for their herds. The New York State Soil and 
Water Conservation District and Cornell Cooperative Extension 
office stepped in to provide help, information and resources to 
farmers and citizens.
    As a beef producer, I know that the Livestock Indemnity 
Program and the Emergency Livestock Assistant Program are the 
most useful programs for me if disaster strikes and should be 
reauthorized in the farm bill. Programs in the farm bill that 
help beginning farmers as they are getting established are 
important when you consider the nation's aging farmer base. 
These programs provide resources, training, education, and 
loans for new farmers.
    I think of Casey Nelsen, an animal science major in his 
junior year of college, who has been up to our farm for the 
experience. He is not from a farm background but wants to farm 
when he graduates. Without support of the Beginner Farmer 
Programs, his barriers to entry would be difficult for him to 
overcome.
    Through my work with cooperative extension, we have posted 
a Beef 101 series of workshops for beginner beef farmers in 
such basics as vaccinations, fencing, equipment, worming and 
feeding. It has been such a success that it's been replicated 
in other parts of the state. The 2008 Farm Bill made the 
Beginner Farmer Program a mandatory program to ensure that it 
received funding every year.
    As you know, all the mandatory programs are zeroed out in 
the President's 2013 budget because their authorization expires 
at the end of the current fiscal year. Extension and 
reauthorization of this program would help provide new farmers 
with the resources they need to get started. In addition, 
training programs provided through the formula-based programs 
like Smith-Lever for extension and Hatch for research are vital 
sources of information for beginner farmers.
    The Chairman. Can you summarize, Ms. Ledoux?
    Ms. Ledoux. If you'll indulge me, the Department of Labor's 
youth labor regulations are not technically part of the farm 
bill, but several Smith-Lever Programs, including the 4-H Youth 
Development and Youth Farm Safety touch on these issues, and I 
ask that you think about the fact that we need to keep young 
teenagers participating in education and training to address 
these safety issues and those are very important. Thank you.
    [The prepared statement of Ms. Ledoux follows:]

Prepared Statement of Michele E. Ledoux, Beef Producer, Adirondack Beef 
                          Company, Croghan, NY
    Good morning, Mr. Chairman, Mr. Peterson, Congressman Gibson, 
Congressman Owens--my Congressman--and Members of the Committee. My 
name is Michele Ledoux. I am a beef producer from Croghan, New York. 
Before I begin, I'd like to thank you for traveling to the North 
Country to hold this field hearing on the farm bill--most people don't 
think of New York when they think of agriculture, but it is one of the 
state's most important industries. I am particularly grateful that 
Congressman Owens and Congressman Gibson are Members of the Agriculture 
Committee, especially as Congress begins to rewrite the farm bill this 
year. They are an important voice for this region, where agriculture is 
the driving force of our local economy. I appreciate the opportunity to 
testify on issues related to the livestock industry in Upstate New 
York.
    My farm--the Adirondack Beef Company--is located outside of 
Croghan, a small village that may be best known as the home of the 
American Maple Museum. During this time of the year, you can see steam 
rising from the many sugarhouses in and around the village. Croghan is 
located in Lewis County, which has twice as many cows as people--though 
most are dairy, with only about 800 hundred beef cows. This is not 
surprising: nationwide, New York is the third largest dairy state, but 
ranks 34th for cattle production.
    With my husband Steve, son Jake, daughter Camille, our extended 
family, and partner Ralph Chase, we operate a natural beef operation. 
We have not used any antibiotics or growth promotants for the past 12 
years. We run approximately 50 Shorthorn brood cows with an Angus bull 
as a cow/calf operation. We calve out in the spring, market the feeder 
calves in the winter, and finish some for the direct-to-consumer and 
restaurant markets. Our family also raises natural lamb and pork. Our 
children have their own egg laying operation and meat bird business. 
This diversity allows us to offer a selection of meat products that 
consumers want when we sell at farmers' markets.
    Our farm is a member of the Pride of New York program, the New York 
State Beef Producers Association, and Adirondack Harvest--all 
organizations that help us with branding, marketing, and promotion of 
our products. Our children are involved in both the Lewis County 4-H 
Youth Program and the Beaver River FFA Program. We hope that they can 
stay on the farm, but know that agriculture is a tough business for 
young people who have many other opportunities. The policies that you 
enact in Washington this year will help determine whether my son can 
make his living as a family farmer. As an aside, my daughter wants to 
be a large animal veterinarian, helping to fill a shortage of these 
professionals in Upstate farm communities. As a beef producer, I'm 
delighted that there will be a new veterinarian in the pipeline. For 
Camille's sake, I hope you keep reauthorizing the Veterinary Medicine 
Loan Repayment Program until she's ready for it!
    In addition to running our farm, both my husband and I have full 
time jobs in agriculture-related industries. Steve works for Shur-Gain, 
an animal feed company, and I have worked for the local Cornell 
Cooperative Extension office for the past 26 years, where I am 
currently Executive Director of the Lewis County office. I want to make 
it clear that I am not testifying on behalf of Cornell University or 
the Cornell Cooperative Extension System, but as an independent beef 
producer who happens to work for Extension. My ``hands on'' farm 
experience makes me a better Extension agent, because I know firsthand 
what educational programs, resources, and support are most relevant and 
needed for beef producers in our region. This is important because the 
continuing education programs offered through Cornell Cooperative 
Extension and the NY State Department of Agriculture & Markets help us 
maintain a quality operation and a competitive edge.
    For example, my family and I have completed the Master of Beef 
Advocacy and the Beef Quality Assurance Certification programs. We also 
work with our veterinarian, Dr. Deanna Fuller, to attain our status as 
a Bovine Viral Diarrhea- and Johnes-Free Herd through the New York 
State Cattle Health Assurance Program. This program, sponsored by 
Agriculture & Markets and managed by the New York State Animal Health 
Diagnostic Laboratory at Cornell, ensures that ours is a clean, 
certified herd. It goes without saying that the livestock and dairy 
industries rely on a comprehensive and well-funded animal health 
network that conducts routine surveillance, monitoring, and research to 
protect our herds from outbreaks and emerging diseases.
    Research, education, and extension programs at land-grant 
universities like Cornell are among several farm bill programs that are 
of critical importance to the New York livestock industry. Let me tell 
you about some others:
    Farmers Market Promotion Programs. The direct-to-consumer market is 
a very important source of income for us. Our farm sells at the Central 
New York Regional Farmers Market in Syracuse, and we are also 
considering starting a Community Support Agriculture (CSA) program to 
improve our local sales. We've found that our customers are willing to 
pay a premium for our natural beef.
    The higher prices we receive in farmers markets allow us to cover 
the added costs of producing beef by these methods.
    Grants from the Farmers Market Promotion Program to the Farmers 
Market Federation of New York have helped us with training and joint 
marketing; they have also supported regional groups working on CSA 
models. In addition, Cooperative Extension is involved in these efforts 
by providing direct marketing training, seminars, and workshops to 
farmers who have no experience selling to consumers. The Farmers Market 
Nutrition Programs is an important source of income and a critical 
resource in helping expand farmers' markets into new areas. New York 
State has the most successful FMNP program in the country, and should 
serve as a model for other states. I urge you to reauthorize and fully 
fund the FMNP program for both Seniors and for WIC families. As the 
demand for local food grows, farmers markets and other forms of direct 
sales have helped increase the viability and profitability of many 
farms like mine. Reauthorization and expansion of these programs should 
be a top priority in the farm bill.
    Disaster Assistance Programs. The 2008 Farm Bill finally included 
permanent disaster assistance programs that should be continued in 
2012. Farmers need some assurance of protection when a catastrophic 
disaster strikes. Ad hoc assistance is too uncertain--especially in the 
current budget environments in Washington DC and the states--and often 
takes too long to access. We took advantage of disaster programs when a 
drought hit our farm a few years ago. New York State most recently had 
to deal with flooding from Hurricane Irene and Tropical Storm Lee last 
summer. While my farm was not affected, I know many producers in other 
parts of the state who lost entire crops, including forage for their 
herds. The New York State Soil and Water Conservation Districts and 
Cornell Cooperative Extension offices stepped in to provide help, 
information, and resources to farmers and citizens. As a beef producer, 
I know that the Livestock Indemnity Program (LIP) and Emergency 
Livestock Assistance Program (ELAP) are the most useful programs for 
me--if disaster strikes--and should be reauthorized in the farm bill.
    Beginning Farmer Programs. Programs in the farm bill that help 
beginning farmers as they are getting established are important, when 
you consider the nations' aging farmer base. These programs provide 
resources, training, education, and loans for new farmers. I think of 
Casey Nelsen, an animal science major in his junior year of college, 
who has been up to help on our farm for the ``experience.'' He is not 
from a farm background, but wants to farm when he graduates. Without 
the support of the beginning farmer programs, the barriers to entry 
would be difficult for him to overcome. Through my work with 
Cooperative Extension, we have hosted a ``Beef 101'' series of 
workshops for beginner beef farmers on such basics as vaccinations, 
fencing, equipment, worming, and feeding. It has been such a success 
that it is being replicated in other parts of the state.
    The 2008 Farm Bill made the Beginning Farmer program a mandatory 
program, to ensure that it received funding every year. As you know, 
all the mandatory programs are ``zeroed-out'' in the President's 2013 
budget because their authorization expires at the end of the current 
fiscal year. Extension and reauthorization of this program will help 
provide new farmers with the resources they need to get started. In 
addition, training programs provided through the formula-based programs 
like Smith-Lever for extension and Hatch for research, are vital 
sources of information for beginning farmers.
    Country-of-Origin Labeling. Country-of-Origin Labeling (``COOL'') 
is an important program for both livestock producers and consumers. In 
my experience with direct sales, people want to know where their food 
comes from, to be sure that it is safe and healthy. Since the World 
Trade Organization has ruled that COOL requirements for beef and pork 
are not WTO-compliant, USDA needs to write rules that preserve the 
intent of COOL while conforming to our international trade agreements. 
We know that it is possible for COOL to be WTO-compliant, because other 
countries have successfully instituted COOL programs. Even apart from 
the farm bill, it is important that Congress instruct USDA to fix the 
problems with the U.S. system as soon as possible, so that producers 
across the country aren't harmed by retaliatory tariffs from Canada and 
Mexico.
    Youth Labor Regulations. Although the Department of Labor's youth 
labor regulations are not technically part of the farm bill, several 
Smith-Lever programs--including 4-H Youth Development and Youth Farm 
Safety--touch on these issues. If you will indulge me, I would like to 
tell you that the Labor Department's recent proposal to change the 
youth agricultural labor regulations threatens the operations of family 
farms. Youth safety on farms--because of the Smith-Lever programs I 
mentioned--has been improving.
    The DOL's proposal, however, cuts at the heart of family tradition 
by preventing young people from working on their family's farm. My 
children have been in the barn with us doing chores and learning 
responsibility since they were young. We have taught them how to work 
safely around machines and animals, so that they have grown up to be as 
safety-conscious as my husband and I. As a farm mother, I can tell you 
that the best way to ensure a future generation of farmers is to teach 
them safety while they are young, so that it becomes a lifelong habit.
    DOL's proposal, however, will prevent young teenagers from 
participating in the education and training programs that have been 
developed specifically to address safety issues. For example, the 
Cornell Cooperative Extension 4-H program sponsors a Tractor Safety 
Program each spring in many New York counties to teach young teenagers 
how to operate farm equipment safely. My 15 year old son will be taking 
the program this year. These are the kinds of educational programs that 
need to be supported and continued.
    Conclusion. In conclusion, I know that you will be faced with many 
difficult decisions as you write the farm bill this year. Mr. Chairman, 
I'd like to thank you and the Committee--especially Mr. Owens and Mr. 
Gibson--for giving me the chance to tell you about some of the programs 
that have helped my family and me run a successful beef operation in 
Upstate New York. I hope that you will take these views into 
consideration as you move forward.
    I would be please to answer any questions you have.

    The Chairman. Thank you.
    I now recognize myself for 5 minutes.
    Probably a good way to start this give-and-take questioning 
is to observe something that really comes clear in Ms. Ledoux's 
comments, and that is the challenges of the budget process.
    If we just were to extend the existing farm bill for 
another 5 years, we would be about $9 billion short. In the way 
the previous farm bill was put together, there was not a 
permanent stream of funding for all programs, as she correctly 
noted, and a number of those programs are not funded, even if 
the authorization is in force, we have that challenge.
    We also will be spending less money on the next farm bill, 
whether it's the $23 billion reduction in spending compared to 
the previous farm bill that was agreed to by the principals of 
the Agriculture and Senate Committee or the President's $32 
million proposed reduction, or the $40+ billion reduction 
suggested last year by the House Budget Committee, we'll have 
less money to spend. So that makes our challenges tougher 
trying to be responsible and keep the good things.
    That said, I must note, Ms. Ledoux, I'm always happy to see 
a fellow shorthorn producer, someone who is working also very 
hard to address some of the diseases and genetic issues, not 
just within our breed but within all breeds. That's responsible 
stewardship and that's part of our responsibilities.
    I would first start by asking this question, and my 
colleagues who served on these panels with me for a number of 
years know that by my nature as an ag economist, a western 
Okie, there are a few fundamental things I'm always very 
curious about. Can you tell me, for just a moment, about land 
prices in your particular areas, the farmland? Up, down, 
sideways, it's all being bought by developers? Just a quick 
observation.
    Mr. Ooms. Well, I'm in Kinderhook, which is just south of 
Albany. I can be parked at the Statue of Liberty in 2 hours on 
a Sunday morning.
    The Chairman. Oh, my goodness.
    Mr. Ooms. Land prices are down in our area, but land and 
farm land are not necessarily the same thing. But farm land 
that's developable is way down and some farm land, a good tract 
of farm land in our neighborhood, beautiful, it's great soil, 
about 80 percent tillable, went for $4,500 an acre. And there 
is some other land, if it's preserved and the development 
rights extinguished, you're talking between a $1,000 and $2,000 
an acre. That's what I would pay. I don't know exactly what 
others would pay. So, but land values are down because that 
$4,500 in 2008 would have been--$10,000 would have been pretty 
much in the ball park.
    The Chairman. Anyone else wish to comment?
    Mr. Rea. I'd like to make a comment. It depends pretty 
specifically on the region. We have an area just 30 miles away 
where it seems to be quite popular to have a lot of horse 
farms, and it's certainly escalated the value of land there. 
Our land right in our particular Washington County is pretty 
stable. We've--we've purchased farm land for about the same 
price recently as we did 10 years ago.
    Mr. Verratti. Not a lot of development pressure, but I know 
in our neck of the woods, in Niagara County, open ag land is 
limited. So open agriculture land, the rents are on their way 
up. As far as the prices in our particular county for purchase, 
they range between $2,000 and $3,000, depending on the quality 
of the acreage, but seem to be heading up in correlation with 
soybean and corn prices.
    Ms. Ledoux. Obviously, I'm in a more rural county, and it's 
about $800 to $1,000 for tillable land.
    The Chairman. Fair enough.
    For those of you who deal with the crop side of the 
equation, and we'll talk about dairy in just a moment, tell me 
your opinions, your observations about what you hear in regards 
to how present crop insurance works and where you'd like to go 
on the crop side.
    Mr. Ooms. Personal--personal opinion, we signed up for the 
catastrophic coverage that FSA requires and maybe someday we'll 
figure out the rest of it. So we don't really worry about it.
    The Chairman. Understandable answer. Yes.
    Mr. Rea. We have not used crop insurance in the past just 
because there would have to be a catastrophic loss to get a 
third of what you would lose, and we just haven't thought that 
that was a fair exchange for the premiums.
    Mr. Verratti. We do--the premiums seem to be cheap enough 
for us for catastrophic--the cat insurance that we have been 
signing up for it. Actually, particularly this year, roughly 2 
weeks ago, we had a crop insurance rep come in from ADM, and we 
are looking at it. It seems to be, because of the subsidy on 
that crop insurance, it seems to be very reasonable and at some 
lower reasonable levels for production on the crops side, we 
are looking at going in that direction.
    As far as the other sort of programs and payments, direct 
and countercyclical payments, not a big deal. They seem to be a 
drop in the bucket in the grand scheme of things with the 
increase in crop income. They don't seem to be very effective. 
It's money, we'll take it, but it's not a game changer.
    The Chairman. With that, my time has expired. I would now 
recognize the gentleman from Georgia, Mr. Scott, for 5 minutes.
    Mr. David Scott of Georgia. Thank you, Mr. Chairman, and 
let me just say that each of your testimony has been very, very 
interesting and very, very informative.
    I'd like to touch upon a couple of areas that I'm equally 
vitally concerned about, and that is the threats to our family 
farms. And I think each of you are certainly, you Mr. Verratti 
and Ms. Ledoux, I hope I pronounced that right, mentioned that. 
What are the one or two major threats that you see right now to 
the existence of our family farms? I think you went into a 
couple of those, but just for the record.
    Mr. Verratti. I'll go ahead and go first. That's a great 
question, Congressman Scott. I would say the two top for me 
would be milk pricing, which I addressed in my testimony. More 
specifically, the margin between your--the income from the milk 
and the expenses. I do the books. I'm kind of the account 
manager at the farm, which sometimes has caused me to grind my 
teeth, but it's been a generally good experience. But you're 
always going to have your labor and--and your feed at the very 
top of your expenses, so that's why there's so much discussion 
between the income from milk and the cost of feed. That margin 
is very, very important.
    Second thing would be regulation. I'd like to see less 
regulation on small businesses in general in this country, 
especially farms. For us specifically, we put a lot of money 
last year into CAFO, getting ourselves in line as far as 
regulations between manure quality, manure water quality, and 
these types of things.
    And I just want to continue to make the point that dairy 
farmers and farmers in general were the original recyclers. We 
invented sustainability, if I dare say so myself. We take a 
not-so-nice product from the back end of a cow and reuse it and 
make crops and--and move forward that way. And it's an 
important thing and I don't want to see that stifled by high, 
high amounts of regulation.
    Mr. David Scott of Georgia. Let me ask you real quickly 
about the Labor Department's proposed regulation dealing with 
child labor, I know that they put a parental exemption into it. 
Tell me what effect would this regulation, this new rule by the 
Labor Department regulating child labor affect a family farm?
    Mr. Verratti. It would definitely affect it. You saw in my 
testimony I look forward to raising my kids, God willing, on 
the farm. I was raised, I worked on the farm, I lived right on 
the farm since--my entire life. I would love to see that 
regulation go away just because I think it's a great way to 
train kids how to work, and to show them the business and to 
teach them a great work ethic.
    Mr. David Scott of Georgia. Now one of the things that 
we're looking at in this new farm bill is to be able to, in 
addition to our research grants that we give to our 
universities and colleges, that we can put some language in 
there that would allow some of this money to go into 
scholarships to give the young people who would go into 
agriculture related areas, which I think would be very helpful. 
Would that be helpful?
    Mr. Verratti. That would be fantastic, sir. I would love 
that.
    Mr. David Scott of Georgia. And before my time goes up, Ms. 
Ledoux, you--you--you made an interesting comment of you don't 
use antibiotics.
    Ms. Ledoux. Correct.
    Mr. David Scott of Georgia. And what's the result of that? 
That's--I mean, how do you treat your sick animals?
    Ms. Ledoux. First of all, we run a--a Vaccination Program 
for our animals, so we are--just like you would vaccinate your 
children, we vaccinate our cows. And so we have been very 
fortunate, that we look at our animals. We see them every day. 
And if we do have an animal that is sick, we will treat it with 
antibiotics, but we pull it out of the general population. And 
so it's not something that we would sell to our consumers.
    Mr. David Scott of Georgia. So----
    Ms. Ledoux. So I would not let that animal die----
    Mr. David Scott of Georgia. Right.
    Ms. Ledoux.--if it needed antibiotics.
    Mr. David Scott of Georgia. Well, I get a feeling that you 
may sense that there's something wrong with using antibiotics?
    Ms. Ledoux. No, absolutely not. I think, you know what? 
Everybody needs to do what is good for them. Our consumers 
would prefer animals that are antibiotic-free and no growth 
hormones.
    Mr. David Scott of Georgia. Right.
    Ms. Ledoux. And so that meets our consumers that we deal 
with. There's nothing wrong with using antibiotics.
    Mr. David Scott of Georgia. Very good. And Mr. Ooms, you 
mentioned in your testimony about EQIP, which I think is an 
extraordinarily important program that we've got to give 
incentives to ranchers and farmers so that we can keep the 
animal waste out of our rivers and streams.
    What impact do you believe would have if we cut--because 
there is a feeling in the new farm bill, as the Chairman 
mentioned, budgetary--and I mentioned in my opening comments, 
budgetary restraints, and there's a uniform figure maybe we 
have to cut things by ten percent. What would cutting the 
incentives by ten percent, what effect would that have on this 
excellent program?
    Mr. Ooms. Sure. If I could just, I have a 4 year old and a 
2 year old, and when my--when I was a kid--as far as the 
Department of Labor regulations, when I was a kid, my dad would 
take me on a Massey-Harris 33 with just the steel fenders, and 
you held on for dear life.
    My 4 year old goes with me on our 4850 John Deere, which is 
a 30 year old tractor with a cab, and I wouldn't even dare to 
take him on the other tractor. According to the Department at 
Labor regulations, my kids could--I realize mine are really 
small. I'm probably not legal anyway. But--the point--the point 
is, that they couldn't be on any power--they couldn't use any 
power equipment. That's a big concern.
    As far as EQIP, on our farm, the reason why EQIP is great 
is because we have--we are--we milk 400 cows and therefore we 
are a medium-sized CAFO in New York. New York has some of the 
leading CAFO rules in the country, and we've done a lot of 
storage and management, nutrient management on our farm. And 
EQIP has helped pay for the cash investment, but we've had a 50 
percent sweat investment in what--and some cash of our own. We 
just wouldn't be able to do some of these things because we're 
protecting everyone's environment, it's everyone's investment. 
And while we want a good environment, some of these things are 
reasonable, but we talk about profitability all the time, that 
if we had profitability, then we wouldn't need EQIP.
    Mr. David Scott of Georgia. So the bottom line is a ten 
percent cut, if we did that, would have a very devastating 
impact?
    Mr. Ooms. Yes, and I consciously mentioned EQIP in my 
testimony, but not any other funding for that reason, because 
EQIP is important.
    The Chairman. The gentleman's time has expired. The chair 
now recognizes the gentleman from Virginia, Mr. Goodlatte, for 
5 minutes.
    Mr. Goodlatte. Thank you--thank you Mr. Chairman, and I 
want to thank you for bringing the Committee to this beautiful 
part of New York State and it's a pleasure to be here. When I 
was Chairman of the Committee, prior to the writing of the last 
farm bill, we held a hearing in New York, but it was much 
further west, in the Finger Lakes region, and so it's great to 
see this part of New York. And such a great turn out here, too. 
This is a really good response from folks interested in 
agriculture here in New York.
    I want to say that, as has already been said, the financial 
pressures on the Agriculture Committee, in fact on the entire 
Congress, with regard to our entire budget with the fourth year 
in a row now that we're going to have deficits in excess of a 
trillion dollars, will--of necessity mean that we will have 
fewer resources when we work on this farm bill. So I want to 
focus on some of the things that we can do that, either don't 
cost as much money or cost some money but replace programs that 
might cost a lot more.
    One of those areas was mentioned by Mr. Scott and was 
mentioned by Ms. Ledoux, and just a--a moment ago by Mr. Ooms, 
and that's regulatory issues. I just introduced this--this week 
legislation to halt the effort of the EPA that affects some 
parts of New York, again, further west from here, but also the 
other five states in the Chesapeake Bay watershed, which 
includes my district in the Shenandoah Valley of Virginia, from 
usurping power from the states and imposing mandatory 
regulations in an area where the states have made considerable 
progress in reducing sedimentation and phosphorus and nitrogen 
going into the Bay and attempting to replace that with mandates 
for which they've done no cost-benefit analysis and no effort 
to make sure that this will actually help the Bay in any 
significant way. Which we certainly want to the do, but not at 
the expense of, in the Commonwealth of Virginia, an estimated 
$16 billion in cost to the state, to localities, to farmers, to 
other businesses, home builders, and so on.
    All of that is very important as are some of the other 
regulations we talked about here. But we can't do some of those 
things in the farm bill, because of the fact jurisdiction, for 
example, with the Chesapeake Bay, rests primarily with other 
committees. So we'll be working with Members in those 
committees to push forward on that.
    But in the farm bill, I want to ask what each of you do 
with regard to risk management. What kind of risk management 
practices, if any, do you currently implement in your dairy 
operations, in your beef cattle operation?
    We'll start and go right down the room.
    Mr. Ooms. Well, like I said earlier, we--we have the 
catastrophic coverage just because it's so cheap and you have 
to do it to get any program of any--any kind. But essentially, 
what we do for risk management is we have our corn spread out 
over 12 miles, so therefore the rainfall--we basically self-
insure on that. And we always try to have a buffer of feed from 
year to year. And, for instance, this year we're selling less 
feed because we didn't have as much feed from last year.
    And I mentioned in my testimony building a dryer and grain 
storage. That's a cushion for our dairy farm. One of the things 
that, in the dairy industry, with higher feed prices, there's 
an opportunity for us in the Northeast to grow our own crops, 
because we have natural rainfall, so we self-insure.
    Mr. Goodlatte. Do you use the RMA's Livestock Gross Margin 
Program?
    Mr. Ooms. No. And the only--the--the honest answer is no. 
And the reason why not is because it's so--I've heard the 
horror stories about trying to get into it. There is some real 
opportunity there, but--we have friends that have been in line. 
I have a friend that's a broker. He has 40 clients he was 
trying to get it for. This is somebody who does it 
professionally. He had 40 people in line, he got number one and 
number two on his priority list and that was it. So we are 
interested in that, but we haven't bothered because----
    Mr. Goodlatte. Okay. If you would address that too, Mr. 
Rea, and we'll go right down the row here, but I'm only going 
to be able to ask because of----
    Mr. Rea. Sure. Thank you. For risk management, we do 
forward contracting with either fuel or grain, depending on 
what the market situation is. We also have had a program in the 
past with--through our cooperative where we could forward 
contract some of our milk, but as far as LGM, we've not used 
that. And we do not use the futures market on selling our milk.
    Mr. Verratti. We do forward contract some of our expenses 
as far as some of input cost on feed, also at some point fuel. 
And we have forward contracted with a small program just simply 
through our dairy cooperative on roughly ten percent of what we 
produce. We did that in 2009 and 2010.
    However, as far as the RMA's Livestock Gross Margin 
Insurance Program, the complexity is there and I--I'm a guy 
that likes computers. I'm 27. I'd love to watch markets all 
day, but I have a dairy farm to run. And some of this stuff--I 
don't feel like paying people high amounts of money to consult 
on these different things to figure these programs out. So if 
it's simple and the premiums are reasonable, I'll use it.
    Mr. Goodlatte. Ms. Ledoux?
    Ms. Ledoux. Obviously I talked about the Livestock 
Indemnity Program, the Emergency Livestock Assistance Program. 
And they're available for beef producers if they need them. And 
you know, we had a lot of issues here in New York State that 
happened this past summer, and Soil and Water, and Cooperative 
Extension was there to assist people.
    Mr. Goodlatte. Thank you. Thank you, Mr. Chairman.
    This area of insurance is very complex unfortunately, but 
it also is an area where, because you can have participation by 
both the government with some of the cost of it and the 
producer with some of the cost, it may well be the fairest way 
to spread risk over a wide area with a lot fewer resources 
moving ahead. So we're going to have to devote a lot of effort 
to making it work in a fairer and more open and, I would say 
simple, but I know how complex it is because each crop is 
different in each part of the county, and people raise 
livestock differently in different places and the weather 
conditions are different in different places. So it will be a 
real challenge, but I think that's where we need to focus.
    The Chairman. The gentleman's time has expired. The chair 
now recognizes the gentleman from New York, Mr. Owens, for 5 
minutes.
    Mr. Owens. Thank you, Mr. Chairman.
    I want to echo Mr. Goodlatte's comments, that I'm glad my 
colleagues have gotten to see such a beautiful part of the 
world as part of their farm bill hearing adventure for this 
year.
    Mr. Ooms, I have to say that your comment, ``import labor 
or import food,'' I think that that's an extraordinarily 
succinct description of the crisis that we face in the farm 
labor area, and we would certainly like to have your permission 
to use that on an ongoing basis.
    Mr. Ooms. It's not copyrighted.
    Mr. Owens. Thank you. Thank you.
    A question to Mr. Ooms and to Mr. Verratti. We've talked a 
little bit about issues related to regulation. My question is: 
How do we strike a balance between the regulatory issues and, 
if you will, preserving clean water and other environmental 
issues? It seems to me that that's where we should be trying to 
go, is to reach a balance, and I'm wondering if you have any 
specific suggestion that you could offer to us that would help 
us reach that balance?
    Mr. Ooms. Go first.
    Mr. Verratti. Make it simple. If we can keep the water 
clean, the manure where it should be, I think everybody will be 
happy.
    Mr. Owens. My question is: How do you do that? I really 
want to know what you would recommend to actually accomplish 
that goal?
    Mr. Verratti. You're very quickly going to get above my pay 
grade, but the--the programs that are here now, we are very 
close to CAFO compliant on our farm. That program seems to 
work. We seem to see the benefits of the implementation as far 
as keeping some of the runoff from our silage piles where it 
should be, keeping the manure where it should be and not mixing 
with rainwater, these types of things.
    But we need to be able to spread manure on our fields and 
use that as fertilizer, and we need to have a place to go with 
it. And we desire to see the water clean and a lot of the other 
resources clean, but the--the regulation that we hear rumors of 
seems to be way more than that. So I guess what I'm saying is, 
the way--the things we're seeing in New York, as far as this 
specific system, seem to be okay. Much more regulation, way 
beyond the money that we should be spending, is more than I 
want to pay for.
    Mr. Ooms. I personally think, and we've had the opportunity 
in New York to, out of necessity, we've worked with a lot of 
environmental organizations to try to find ways we can get to 
the same place, because everybody wants clean water. But 
everybody also needs to eat, okay? And there's a mentality--I 
won't get specific. There's a mentality in some places in 
Washington, at EPA, what the heck, that the environment is for 
the environment and then ag is for the ag guys. And the fact 
is, we live in the environment and we need the environment. We 
have to protect the environment.
    As far as specific issues, I'm not trying to shill for a 
specific program, but EQIP has worked because our nutrient 
management plan, our CAFO situation, we didn't have to do CAFO, 
but we're to the point, like Verratti's, we're getting to the 
point where we need to. We have a nutrient management plan. 
There's a lot of things that we were doing already, we just put 
them on paper.
    But the fact of the matter is now, we always learn things 
when you do these types of things, but it cost time and money 
and effort, and just working through that process has been 
great. So I would hold up EQIP just because it's something 
we've talked about already and it really has had--everyone has 
skin in the game.
    Mr. Owens. Thank you.
    Mr. Rea, you testified that dairy farmers support the Dairy 
Security Act in the range of 80 percent. I'm curious as to 
where that statistic comes from?
    Mr. Rea. National Milk Producers Federation represents 31 
dairy cooperatives, and we think that that's about 80 percent 
of the total U.S. supply of milk.
    Mr. Owens. And do you think that if that were implemented 
that that would in effect give adequate stability to milk 
prices?
    Mr. Rea. I think the market stabilization plan, we have to 
realize that we all, now, from the discussions this morning, 
that we in our own industries have to take active roles in how 
we see the future playing out. And I think if dairy farmers 
take an active role in stabilizing the market, then I think we 
can make this work.
    Certainly, it's a lot different than what we've been 
accustomed to, with paying premiums for the insurance program, 
but if we can make the stabilization part of it work, I think 
we can be successful. There are no rules in there that say you 
have to reduce your production, but one way or another, if we 
can't bring the market into a balance with the supply, then 
we're going to be facing issues that we faced in 2009.
    Mr. Owens. Does anyone on the panel have any contrary view? 
I want to see if there's anybody who fits in the 20 percent.
    Mr. Ooms. I would just say as long as the supply management 
portion is voluntary, it's up to that farm to figure out what 
they want to do. I have concerns if it's mandatory, though my 
family has no intention to milk more cows. But if it's 
voluntary, you're going to get a Margin Insurance Program 
that's going to be subsidized on some level. That's a carrot-
and-stick approach and seems like a reasonable middle ground.
    Mr. Verratti. So much focus has been on milk price and 
we've seen in various years price be pretty nice and yet 
expenses be well over that. So changing it from price focus to 
margin focus is a big, big part of the Dairy Security Act.
    Mr. Owens. Thank you.
    Ms. Ledoux, I'm sorry, but my time has expired. I yield 
back.
    The Chairman. The gentleman's time has expired. The chair 
now recognizes the gentleman from Texas, Mr. Conaway, for 5 
minutes.
    Mr. Conaway. Well, thanks, Mr. Chairman, and it's great to 
be here. I want to thank the Chamber of Commerce for last 
night's snow. You may not be all that keen on it. We've had 19 
inches in west Texas, which was stunningly unusual and I missed 
all of it. So it's great to see the 1 inch of snow out there. I 
appreciate being here.
    Mr. Verratti, I'm a CPA by background, and so your angst 
with the business side of it is understandable. If we go to a 
Margin Insurance Program, is there a standard definition of 
margin, and can you walk me through what you believe, each of 
you, what components go into margin, in determining that?
    Mr. Verratti. To me, it's between the milk price we're 
being paid and the expense below that. Now the common one is 
feed, because that's generally the top. The big 3--my two 
biggest expenses are, everyday in the dairy, are labor and 
feed. So that's why they generally use that--and my definition 
would be between feed and some of the other high expenses and 
between the actual milk price we're getting paid.
    Mr. Conaway. But what are some of those other high 
expenses? I mean, do you amortize or depreciate the cost of 
your equipment?
    Mr. Verratti. Yes, equipment is a big one. The big ones for 
us are--fuel is huge, and we know that's going to be even 
bigger this year. Fertilizer for our crops. We are cash 
cropping some, but remember a lot of that fertilizer is being 
used to grow crops to feed our dairy cows.
    Mr. Conaway. Now would you want the regulations to require 
that that be netted against your--your margins so that your--
Mr. Owens talked about complicating regulations and this gets 
complicated--trying to figure out how you insure a margin, if 
there's no common definition of margin among the industry.
    Mr. Verratti. The difficulty is going to be, sirs, when you 
get into places, like I--I have a good friend in Arizona. He's 
buying in a lot more feed than I am. I can grow a lot of my 
feed here.
    Mr. Conaway. Right.
    Mr. Verratti. So the difficulty is going to be when you go 
across the nation, the difficulties from state to state or from 
region to region.
    Feed is a pretty good one in that, excuse me, purchased 
feed, because everybody needs to feed their dairy cows. As far 
as fertilizer, fuel, some of these other expenses, some of 
these places aren't using feed and fertilizer, they're buying 
all their feed in a truckload.
    Mr. Conaway. Sure. I represent a bunch of processors as 
well, and so obviously there's push back from those guys who--
and they say they represent the consumer, those kind of things. 
So as we walk through this change in--in this policy, most of 
us on the dais have friends on both sides of this issue and we 
generally try to stick with our friends. And so that's as about 
as funny as a CPA is going to get.
    So as we walk this path, your relationship with your 
processors is going to be an important tool as well.
    A couple of you mentioned using forward contracting. The 
CFTC, of which our Committee has jurisdiction of oversight for, 
has recently been writing extensive rules to implement the 
Dodd-Frank Act that affects commodities. And have you yet been 
seeing an increase in your cost or lack of availability, or 
have your folks that you're working with been communicating to 
you at all about what the impact the CFTC's new regulations are 
having on your ability to manage risks with the forward 
contracts?
    Mr. Verratti. In regards to your first comment, I'm 
involved with both a co-op and a processor all in one, and I am 
willing to be your friend. Even though you're a CPA, I'm 
willing to be your friend.
    No, all kidding aside, as far as the--the fix forward 
pricing within our co-op, that was a free program. It was 
simply, I believe, somebody who wanted to purchase milk from 
our cooperative or processor, depending on how you look at the 
definition, at an even keel throughout the year, so that was 
not something as far as this--this Gross Margin Program that 
you're discussing, so I would have no premiums from that. This 
program seemed to be complex for me at the time.
    Mr. Conaway. Mr. Rea, you mentioned--I'm sorry, Mr. Rea, 
you mentioned you forward contracted as well. Any impact from 
the CFTC's new rules?
    Mr. Rea. No, I don't think that affects our forward 
contracting of corn or fuel, but I have seen no impact.
    Mr. Conaway. Well, it hasn't been implemented yet, so it's 
still just a proposal for the most part, and I didn't know if 
you had been warned yet about any increases in your cost of 
doing business?
    Mr. Rea. I have not.
    Mr. Conaway. Okay. Mr. Ooms?
    Mr. Ooms. I just said we self-insure, but we do forward 
contract fuel and feed. I thought you were talking about USDA 
programs earlier. And we haven't--the only thing I have heard, 
the only concern I've heard, is to make sure that we are 
looking at it from a basis of, we're using this product on our 
farm and there's some talk about having a reserve for whatever 
you forward contract. And our deal has always been, we contract 
our urea always in December for delivery sometime in the 
spring, usually March, April, May. And we pay it as we get it, 
cash on delivery.
    I've heard that there's some talk, and if I'm stepping into 
a highly, hot issue, so be it, some talk about us having to 
back whatever we book. That would be a concern because we book 
feed sometimes 13, 16 months out and we don't have the cash on 
hand to pay for it. The urea is a little different because it's 
for the coming year. But I think part of the key is if you're 
an end-user of product, let us use it.
    Mr. Conaway. Our Subcommittee, which has regulatory 
jurisdiction and the Chairman of the full Committee will try to 
make sure the end-users are not impacted by these new 
regulations.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. The gentleman's time has expired. The chair 
now turns to the gentlelady from Maine, Ms. Pingree, for her 5 
minutes.
    Ms. Pingree. Thank you very much, Mr. Chairman, and thank 
you, too, Mr. Gibson and Mr. Owens, for welcoming us to their 
region of the country. And thank you all, really, for being 
here in this room and--and for all of the people who have come 
to testify. Really articulate, useful commentary for all of us, 
so thank you very much.
    I'm from Maine which has a small number of dairy producers, 
but pricing and margin issues are just as important to all of 
us and a huge concern, so I really appreciate the thoughts that 
you've brought to us today. But I want to address a slightly 
different issue. I'm interested in the local food and farming 
aspect of this.
    I've introduced a title to the farm bill. It's got about 70 
cosponsors, both--some on the Agriculture Committee, but a lot 
of people from around the country, all different regions, where 
people are seeing this huge growth in the interest in the 
market; both what consumers are interested in and then the 
opportunities available to farmers who sell more of their 
produce and dairy products and value-added products locally. So 
I want to address a few questions around that.
    I--as I said, I come from Maine, and because of this 
interest, we've seen the average age of our farmer going down 
and the number of farms and production growing up--going up. So 
to us it looks like a huge opportunity.
    I'll ask Ms. Ledoux a couple of questions, but if any of 
the rest of you are also interested in this, please feel free 
to comment.
    You mentioned in your testimony that you sell at the 
Central New York Regional Farmers' Market, but you're also 
considering starting a CSA, and that, for me, is particularly 
interesting. Can you tell us a little about some of the 
barriers that you face in your production in terms of scaling 
up? Are there other problems you deal with, with marketing 
chains or distribution networks in terms of expansion?
    Ms. Ledoux. We brand our meat in the sense that it's 
natural, and so we just decided that moving from doing the 
farmers' market, which has been great, but it ties up a 
Saturday. And so I have a 12 year old and a 15 year old at home 
who are very active on the farm, but we thought that the next 
step for us was to do a community supported ag, which would 
allow us to have them be involved in the farm, but not tie up 
every Saturday going to a farmers' market. And that's really 
why we felt the next move for us was to do the community 
supported ag.
    We have a good following down at the farmers' market down 
in Syracuse that are very interested in that, and they would 
like to have a steady supply of our meat and the other things 
that we could offer them, the eggs and things like that. So we 
just thought that was the next step up that worked out very 
well for our farm.
    Ms. Pingree. Anyone else on that?
    Mr. Ooms. Just about that you mentioned the Farmers' Market 
Nutrition Program, we have a lot of neighbors who participate 
and we are actually looking into the potential, being so close 
to New York City. That is always identified as something. It's 
just amazing how many people are using that to purchase food at 
markets. So I just know that from all my friends and neighbors 
who participate, that that is a key program.
    Ms. Pingree. Great. Great, certainly.
    Mr. Rea. I'd like to follow up a little bit. We're a little 
bit of a different animal, being a cooperative, but we've found 
the ability to have 1,200 of our members be farmer owned with 
our great Cabot brand and we get into stores with our farmers 
and they hand out samples. And we have a great relationship 
with our retailers, and it all comes from this farmer-owned and 
grassroots part of it.
    Mr. Verratti. Yes, and I would echo that. I love local--and 
people in our community that know me, that see me at church or 
at other organizations love to buy our product, talk to me 
about it, and I can educate on it--on it some, and--and it's a 
great relationship.
    Ms. Pingree. Thanks.
    Ms. Ledoux. And I guess if I was to follow up, people truly 
want to know where their food is coming from. They want to talk 
directly to that farmer. They want to look them in the face and 
they want to say, I bought this product from you. I want to 
know that you grew it or you raised it, and you took care of it 
from the beginning to where it was processed and--and brought 
that--you know, whatever that is, if it's a vegetable or it's 
meat, that they know that you were the one that was involved in 
it. And we can do that.
    Ms. Pingree. That's great. The chair mentioned that one of 
the big issues we're dealing with is budgetary constraints and 
what this new farm bill will look like. And I guess my 
particular interest is in figuring out, given the fact that 
this is where a lot of growth in the market is, where farmers 
are seeing huge opportunities, how do we make sure that some of 
the programs you've already been talking about, are there and 
available to farmers who want to expand into this market as 
we're sort of balancing out where our budgetary challenges are.
    So are there other things that you think, and I know some 
of them have already been mentioned today, even programs like 
EQIP or Farm Credit, are certainly critical, but in my brief 
time available, anything else you want to throw in there that 
you just think, when it comes to helping farmers sell more 
locally, is of great advantage?
    Ms. Ledoux. I mean, I guess I'm going--I'm going to put in 
my plug for Cooperative Extension and the Hatch Programs 
because they are directly working with farmers. They are 
directly out there talking with them. We are working with them, 
if it's telling them how to put in their vegetables, how to 
work with a small beef operation.
    I mean, the reality is most beef operations in the United 
States are 20 cows, and New York State lends itself to that 
size operations. They're talking to them about doing rotational 
grazing. They're talking with them about having a small 
livestock operation, whether it's sheep or hogs, and people 
want to get involved with that kind of direct marketing.
    Mr. Ooms. Applied research. Very simply, the Specialty Crop 
Block Grant is relatively new. It was an 2008 Farm Bill or the 
one before. And realize, you only have so much money in the 
world, you can't reinvent the wheel. But for future reference, 
I served on the New York Farm Viability Institute board and 
it's a farmer-led group that helps divvy up applied research 
dollars. And a lot of the grants that we're giving out are for 
new concepts or new ways even to help everyone though, but to 
help find new ways to skin the cat, I guess. So anything on 
applied research is always good because states have problems 
too.
    Ms. Pingree. Thanks. I think I'm out of time. Thank you.
    The Chairman. The gentlelady's time has expired. The chair 
now recognizes the gentleman from New York, Mr. Gibson, for 5 
minutes.
    Mr. Gibson. Thanks, Mr. Chairman, and I thank my colleagues 
for being here today and to say that this has been a very 
productive hearing already. In addition to what you've 
communicated this morning, we have detailed written statements 
from all of you and that's all going to be part of the record 
as we work through the farm bill for 2012, and I want to focus 
in on profitability.
    We've hit on this in a number of different dialogues, but 
I'd like to have the opportunity to get you on the record in 
some areas that I think would also potentially help with 
profitability. As I look at it--and of course I'm biased--I 
think we've got the smartest, hardest working farmers in the 
world.
    It's not an issue of knowledge. It's not an issue of work 
ethics. You guys work 24/7 and so we, I think it's incumbent 
upon us to really be looking at ways that we can ease the 
burden on you and to look to ways to facilitate your 
profitability. So let me throw out a few areas and then the 
panel can really just follow up. This is an opportunity to get 
you on the record.
    Regulations, specifically CAFO, if you have recommendations 
on how that might be revised. Conservation, tremendous way for 
us to balance, ensuring that we bequeath future generations an 
environment that we can be proud of at the same time that we're 
helping you with your profitability.
    We've mentioned EQIP here this morning. Might there be 
other ways to administer it? Is it best done in the NRCS or 
might we consider perhaps the FSA to administer that?
    We haven't talked too much about the Farmer-Rancher 
Protection Program, but I can tell you in our district this is 
really a valued program that has helped us on that score.
    Energy, are there ways--certainly we talked about margin, 
we talked about price for milk and how much you profit in the 
end, and energy has a certain component of this. And there have 
been programs, particularly with the photovoltaic and anaerobic 
digester, are these worthy and should we continue, and do you 
have recommendations on that end?
    Broadband, we're working really hard to expand rural 
broadband. Is that helping? And do you have recommendations on 
that? And finally, markets. Is there anything specific, 
creative ideas that you have that may help get your product out 
to other areas that, all of this inclining towards 
profitability. I'll throw that open to the panel.
    Mr. Rea. I'll take the first stab. Thank you for the 
question.
    Regulations, it just so happens that our farm is bumping 
right up against an area where we need to invest heavily in 
CAFO, and we are reluctant to do that and I think that's 
probably tempering our growth. You go from 200 cows to 201 
cows, all of a sudden you have to invest hundreds of thousands 
of dollars in--into the CAFO.
    If we could phase this in somehow, Congressman Gibson, to--
I mean, 20 cows isn't going to cover this cost of the CAFO, and 
we are in an area which, disappointing, has very little EQIP 
funds available. So everything has kind of taken on a new 
perspective when you have to pay for everything, whether you 
get any help or not through the government. And I'm not looking 
for help from the government, but I'm looking for ways where we 
can phase into this.
    We're seeing attrition in the dairy industry, so we know 
that we need to have increased production from farms that are 
going to be viable. And if there's a way we can kind of move 
into this, you know. We--we have dug a manure pit. We did it 
with our own excavator. And if you get 201 cows, you got to 
have an engineer that's going to engineer that manure pit. Our 
pit holds more, and you know, we need just a little common 
sense here as we go forward into it, because we would like to 
produce milk for the future and be profitable.
    Mr. Verratti. He's exactly right about, and I'll just talk 
about it, as far as CAFO. There's no doubt you're tempering 
growth with that--with that regulation just because it costs a 
lot more money, you get to certain sizes. I'm not sure what 
they are exactly, but I know that we're a medium CAFO, so we're 
going to have different regulations than--than Mr. Rea. So 
those regulations, all things shared, they cost money.
    So EQIP's a help, it's definitely--it's a program we've 
received money from. It's definitely a help. But it's difficult 
when you need such a large organization to ``bury'' some of 
those costs to be able to move on with productivity and 
profitability. So that's important.
    And you mentioned markets. I just think it's very important 
to allow us to continue to export as a nation. We need to be 
sending this milk overseas. We believe we have the most 
nutritious, best product in the world. And we want to be 
sending it out along with our--along with our discussion 
earlier about allowing it go to local markets also.
    Mr. Ooms. It's pretty--I try to answer questions, but that 
was pretty open-ended, so it's probably intended that way.
    I just want the panel to know that Congressman Gibson, 
before he was actually elected, said he wanted to spend time on 
a farm. And he's about, what, 3 miles from our place, so he 
came at quarter to 4:00 one morning and he ran the gamut. He 
milked cows and then he came back a couple months later 
because, he said, well, we milked cows with the machine, but I 
want to practice milking one manually because I'm in a cow 
milking contest. So we've got--I was going to bring the 
pictures for you, but we'll keep them for another time.
    As far as--I guess from my family's perspective is, we try 
to be reasonable. We try to work with people. And we have a 
Right To Farm Law in New York that says we have a right to farm 
in certain areas. That doesn't mean we have a right to do 
whatever we want. We still need to be a good neighbor. And I 
guess I just can't get over all the different regulations that 
come upon us.
    And the one that really gets me is: I make a choice to stay 
home on the farm. Somebody said earlier, they didn't get paid, 
I think it was the Chairman talking earlier about he didn't get 
paid until he went to work for someone else. And you know, I 
don't know if I should admit this or not, but I was 30 before I 
got paid on the farm. And it was only because I said to my dad, 
``Dad, I'm thinking about getting married here. So I'm going to 
be moving out. So I'm going to need to get paid.''
    And so my whole purpose of doing this was so I could--my 
kids could have the opportunities that I've had. And this is 
just one example. We are incorporated because that's just what 
makes sense for our business, so my kids legally couldn't work 
on the farm.
    Now, whoever is enforcing this, Hilda Solis can come and 
pry my kids out of the farm and barn all they want. We're going 
to do it until they do that. But just let us have the 
opportunity to be--and again, we want to work with the people. 
You mentioned--I could go on for hours.
    This is my last point, is: You mentioned the Chesapeake, 
the clean up of the Chesapeake, and see you're coming at it 
from a southern vantage point. I'll give the northern vantage 
point.
    Our New York State DEC, which we in ag and DEC don't always 
get along, it's saying to me, that we could remove all human 
life forms from the Chesapeake Bay area that New York--just 
covered in New York, I think it's 21 counties. It's a good 
swath. Not where I am. They could remove all human life form 
and the water still won't be clear, clean enough. You know, 
let's use a little common sense. And you know, again, none of 
us want dirty water, so I'll just--there you go.
    The Chairman. The gentleman's time has expired. The time 
for the first panel has expired. And I might note, Mr. Ooms, 
you could actually be an Okie if you want to come live with us 
some day too, by the way.
    Mr. Ooms. No way.
    The Chairman. With that, the Committee would like to thank 
the first panel for your insightful presentations and the 
questions and your answers, and you're dismissed. And we will 
ask the second panel to prepare to come forward.
    The Chairman. We will now hear from our second panel of 
witnesses.
    Mr. Eckhardt, whenever you're prepared, please begin.

 STATEMENT OF LARRY ECKHARDT, VEGETABLE, FIELD CROP, AND BEEF 
PRODUCER; PRESIDENT, KINDERHOOK CREEK FARM, INC., STEPHENTOWN, 
                               NY

    Mr. Eckhardt. Well, good morning, and thank you, Chairman 
Lucas, and other Members of the Committee for being here, and 
thank you for inviting me to offer some comments and ideas 
regarding the 2012 Farm Bill.
    My name is Larry Eckhardt, and I'm a farmer from 
Stephentown in Rensselaer County in eastern New York. I also 
provide crop consulting and planning services to farms in my 
area as a certified crop adviser.
    There are several pieces of the farm bill that are 
important to our farm and to vegetable growers in the state 
that I would like to highlight today.
    Some general farm bill concerns: The farms in our area, 
including our own farm, were hit really hard last year by 
tropical storms of the summer and fall. In trying to recover 
from this damage, I think it's important that the 2012 Farm 
Bill continue to include Permanent Disaster Assistance and 
Emergency Conservation Programs. These are very important to 
helping farmers recover after unimaginable disasters, whether 
through the replanting of trees, with the help of the Tree 
Assistance Program, or replacing soil and fixing fields that 
were washed away through help with the Emergency Conservation 
monies, ECP.
    We can't go back to ad hoc disaster assistance. Farmers 
need disaster assistance they can count on and which arrives in 
a timely manner. Programs that are sometimes years in getting 
financial assistance to farmers, like the SURE Program, are not 
very helpful in efforts and these types of programs would be 
better spent elsewhere.
    Conservation is also an important piece of the farm bill, 
and New York farmers have worked hard to meet extremely lofty 
Federal and state standards. As been said before, the 
Environmental Quality Incentives Program, EQIP, has provided 
critical funding and has helped leverage state and local monies 
to make sure farmers in the state continue to meet the ever 
increasing standards.
    During these difficult economic times, I know there are 
going to be cuts to the farm bill, so I think it's important 
for Congress to focus on its conservation efforts on working 
lands programs like EQIP and the Farm and Ranch Lands 
Protection Program. Over the other programs, like Land 
Retirement, keeping vital and productive lands in production 
and protecting the environment at the same time should be where 
goals, the goals where funds are limited.
    I would further suggest that the 2012 Farm Bill, that the 
role of NRCS be returned to its real and original purpose, and 
that's providing technical assistance to farmers for installing 
their needed practices, and leave the handling of the funding--
the funds for cost sharing the projects, to the FSA. NRCS 
personnel have time and again told me that they are not trained 
in administering the funding of conservation, they're trained 
to help farmers make conservation practices work. I agree and 
believe that the FSA is better trained in handling the funds 
for conservation programs.
    While mentioning FSA, I'd like to voice a strong opposition 
to the closing of local FSA offices in our region and around 
the country. These critical offices administer all the programs 
that are now in effect including insurance and other reporting 
and new requirements for farms to comply with programs. How can 
we do this with fewer offices and what little, if any, money is 
going to be saved? I'm all for saving, and I think everyone 
else is, but let's begin where it might make a difference. Not 
by eliminating the people and offices that, for us, are the 
front line, and for most real farmers are the real face of 
USDA.
    I move to some specialty crop specific concerns. New York 
is largely a state of dairy and specialty crops, and that's why 
it's important that the farm bill reflect the type of 
agriculture we have here in New York and around the Northeast. 
Specialty crops have been notoriously under-served in previous 
farm bill legislation and that's why it's so important that 
specialty crops was included in the 2008 Farm Bill and I hope 
will remain in the 2012 Farm Bill.
    The Specialty Crops Block Grants have been important to 
many farmers, both large and small, by supporting research, 
marketing and market development, and critical Pest Management 
Programs that help increase our profitability and our 
sustainability. The funds from other public sources for 
research and development in the area of specialty crops have 
been cut dramatically over the past 2 decades.
    These Specialty Crops Block Grants have made substantial 
contributions to new business development, new products, new 
and improved growing methods for the producers in New York. I 
hope for continued and perhaps increased funding for this 
important part of the new farm bill.
    I don't think it's any secret that crop insurance doesn't 
serve specialty crop farmers very well, especially not multi-
crop farms like my own. The devastating weather events of 2011 
have only served to highlight the need for some major changes 
in several areas.
    I would suggest a few ways for the farm bill to be more 
responsive to specialty crop risk management needs and they 
are: First, I'm not an economist or an actuary, I can only 
suggest some ideas for a crop insurance program that will meet 
our specialty crop needs. But we'll need to help the USDA 
figure out how to make them actuarially sound.
    I think Congress should instruct the USDA in the next farm 
bill to research and development with input from actual growers 
of specialty crops, risk management tools that will work more 
effectively for diverse crop farms. Being diversified helps 
manage our risks to a large degree, but as we saw last year, 
there are no options that work well in near complete or 
complete losses that help farmers get back on their feet.
    The Noninsured Disaster Assistance Program, known as NAP, 
is the only coverage offered for most nontraditional specialty 
crops. But in the event of a complete loss, it really only 
provides remuneration for \1/4\ or less of the lost crop. When 
there is a partial lost--loss in a crop, most often there is no 
coverage at all. There should be a buy up option so farmers can 
better protect themselves and manage their own risks.
    Although NAP is pretty cost effective, the record keeping 
can become overwhelming for farmers who have many crops, and on 
my case, maybe 30 or more. And record keeping should be 
streamlined so more farmers would participate and be eligible 
for disaster assistance programs. Other revisions such as sign 
up deadlines, acreage reporting, yield history, type of 
production, whether you're organic or conventional, multiple 
planting dates and training of loss adjusters would have to be 
addressed to make the program more appropriate for growers.
    And while we're talking about crop insurance, it seems it 
would just--we would pay less indemnification on insurance 
policies or NAP or at least more or would less frequently pay 
out if some of our rivers and streams were better maintained. 
We have seen extreme sediment deposits and obstructions in our 
many streams and tributaries caused by a lack of planned and 
routine care. Although allowing the trained NRCS staff to help 
farmers responsibly clear and shape these waterways to prevent 
widespread flooding, it would substantially benefit our farms 
and help mitigate the effects of the excessive rainfall in our 
communities in the future. This benefit can only be 
accomplished if the U.S. Corps of Engineers and the EPA are 
required to cooperate, perhaps through the 2012 Farm Bill.
    Some nutrition programs in the farm bill are also important 
to specialty crop farmers. The Fresh Fruit & Vegetable Snack 
Program for Schools and the Senior Farmers' Market Nutrition 
Program are two of the many programs that help link our farmers 
with the people who most need the access to fresh and healthy 
foods. Any program that supports local food purchases and helps 
develop new distribution networks will be a great benefit to 
both farmers like myself and the people who need the access to 
the food I grow.
    There are a number of provisions in the present farm bill 
for organic certification and research and is certainly an 
important piece of specialty crop agriculture, and I hope it 
continues. In this economy, I see many farmers using organic 
methods, but not able to spend enough money or commit the time 
to complete the certification. Instead, their focus, and that 
of many farms, has shifted to serving a market seeking out 
local foods.
    Whether it's certified organic, organically grown or grown 
conventionally, consumers want to know where their food is 
coming from and who grew those crops. Because of this, I think 
it's important for the 2012 Farm Bill to include funding for 
the programs that help all farmers who direct market, no matter 
what production techniques they use. This means developing food 
distribution networks, supporting the Farmers Market Promotion 
Program, supporting the food-based entrepreneurship programs 
and other grant opportunities. These programs help provide--
improve the vitality of all farms--family farms in the areas of 
the country.
    And finally, the proposed new regulations for food safety 
are due out soon and diversified farms like mine are concerned 
how this will change our business. Food safety begins on the 
farm and is certainly a primary concern on my farm. We work 
hard to ensure it every day in whatever way we can, but not 
knowing what is in these regulations and how hard it will be to 
comply with them scares me.
    If the farm bill can provide farmers assistance in meeting 
these new standards, whether with needed training on the ground 
assistance from USDA or tools to implement new procedures, this 
farm bill would certainly help in that effort.
    Thank you again for the invitation to speak today, and any 
questions, I would be happy to answer them.
    [The prepared statement of Mr. Eckhardt follows:]

 Prepared Statement of Larry Eckhardt, Vegetable, Field Crop, and Beef 
   Producer; President, Kinderhook Creek Farm, Inc., Stephentown, NY
    Chairman Lucas, Congressman Peterson, Congressman Owens, 
Congressman Gibson, and Members of the Committee, thank you for 
inviting me today to offer comments and ideas regarding the 2012 Farm 
Bill. My name is Larry Eckhardt and I'm a farmer from Stephentown, 
Rensselaer County, in Eastern New York State. I also provide crop 
consulting and planning services to farms in my area as a certified 
crop advisor.
    There are several pieces of the farm bill that are important to our 
farm and to the vegetable growers in the state that I would like to 
highlight for you today.
General Farm Bill Concerns
    The farms in our area, including our own farm, were really hit hard 
by the tropical storms of last summer and fall. In trying to recover 
from this damage, I think that it is important the 2012 Farm Bill 
continue to include permanent disaster assistance and emergency 
conservation programs.
    These are very important to helping farmers recover after an 
unimaginable disaster, whether through replanting trees with the help 
of the Tree Assistance Program (TAP) or replacing soil or fixing fields 
that were washed away through help from the Emergency Conservation 
Program monies (ECP). We can't go back to ad hoc disaster assistance; 
farmers need disaster assistance they can count on and which arrives in 
a timely manner. Programs that are sometimes years in getting financial 
assistance to farmers (like SURE) are not very helpful and the efforts 
in these types of programs would be better spent elsewhere.
    Conservation is an important piece of the farm bill and New York 
farmers have worked hard to meet extremely lofty Federal and state 
standards. The Environmental Quality Incentives Program (EQIP) has 
provided critical funding and has helped leverage state and local 
monies to make sure farmers in the state continue to meet ever-
increasing standards.
    During these difficult economic times, l know there will be cuts in 
the farm bill, so I think it is important for Congress to focus its 
conservation efforts on working lands programs, like EQIP and the Farm 
and Ranchland Protection Program, over the easement and land retirement 
type programs. Keeping vital and productive lands in production and 
protecting the environment at the same time should be our goals when 
funds are limited.
    I would further suggest for the 2012 Farm Bill that the role of 
NRCS be returned to its real and original purpose--providing technical 
assistance to farmers for installing needed practices--and leave the 
handling of the funds for cost-sharing these practices to FSA. NRCS 
personnel have time and again told me that they are not trained in 
administering the funding of conservation--they are trained to help 
farmers make conservation practices work. I agree and believe that FSA 
is better trained in handling the funds for conservation programs.
    While mentioning FSA, I'd like to voice strong opposition to 
closing local FSA offices in our region. These critical offices 
administer all the programs now in effect, insurance, reporting and any 
new requirements for farms to comply with programs--how can we do this 
with fewer offices? And what little, if any, money is saved? I'm all 
for saving, but let's begin where it might make a difference, not by 
eliminating the people and offices on the front lines, who, for most of 
the real farmers, are the face of the USDA.
Specialty Crop-Specific Concerns
    New York is largely a state of dairy and specialty crops, that's 
why it's important that the farm bill reflect the type of agriculture 
we have here in New York and the Northeast. Specialty crops have been 
notoriously under-served in previous farm bill legislation and that's 
why it was so important that a specialty crops title was included in 
the 2008 Farm Bill and I hope will remain in the 2012 Farm Bill.
    The Specialty Crops Block Grants have been important to many 
farmers, large and small, by supporting research, marketing and market 
development, and critical pest management programs that help increase 
our profitability and sustainability. The funds from other public 
sources for research and development in the area of specialty crops 
have been cut dramatically over the last 2 decades.
    These Specialty Crops Block Grants have made substantial 
contributions to new business development, new products and new and 
improved growing methods for producers in New York. I hope for 
continued, and perhaps, increased funding for this important part of 
the new farm bill.
    I don't think it's a secret that crop insurance doesn't serve 
specialty crop farmers well, especially not multi-crop farms like mine. 
The devastating weather events of 2011 have only served to highlight 
the need for some major changes in several areas. I would suggest a few 
ways for the farm bill to be more responsive to specialty crop risk 
management needs:

   First, I'm not an economist or an actuary. I can only 
        suggest some ideas for a crop insurance program that will meet 
        our specialty crop needs, but we need the help of USDA to 
        figure out how to make them actuarially sound. I think Congress 
        should instruct the USDA in the next farm bill to research and 
        develop, with input from actual growers of specialty crops, 
        risk management tools that will work more effectively for 
        diverse crop farms. Being diversified helps manage our risk to 
        a large degree, but as we saw last year, there are no options 
        that work well in near complete or complete losses to help 
        farmers get back on their feet.

   The Non-Insured Disaster Assistance Program (NAP) is the 
        only coverage offered for most nontraditional specialty crops, 
        but in the event of a complete loss, it really only provides 
        remuneration for a quarter or less of my lost crop. When there 
        is a partial loss, most often there is no coverage at all. 
        There should be a buy-up option so farmers can better protect 
        themselves and manage their individual risk. Although NAP is 
        pretty cost-effective, the record-keeping can become 
        overwhelming for farmers who have many crops--maybe 30 or 
        more--and recordkeeping should be streamlined so more farmers 
        would participate and be eligible for the disaster assistance 
        programs. Other revisions, such as sign-up deadlines, acreage 
        reporting, yield histories, type of production (organic or 
        conventional), multiple planting dates and training of loss 
        adjusters would have to be addressed to make the program more 
        appropriate for growers.

   While we're talking about crop insurance, it just seems we 
        would have to pay less indemnification on insurance policies or 
        NAP, much less frequently, if some of our rivers and streams 
        were better maintained. We have seen extreme sediment deposits 
        and obstructions in many of our streams and tributaries caused 
        by the lack of planned, routine care. Allowing the trained NRCS 
        staff to help farmers responsibly clear and shape these 
        waterways to prevent widespread flooding, it would 
        substantially benefit our farms and help mitigate the effects 
        of excessive rainfall on all our communities in the future. 
        This benefit can only be accomplished if the U.S. Army Corp of 
        Engineers and the EPA are required to cooperate, perhaps thru 
        the 2012 Farm Bill.

    Nutrition programs in the farm bill are also important to specialty 
crop farmers. The Fresh Fruit and Vegetable Snack Program for schools 
and the Seniors Farmers Market Nutrition Program are two of the many 
programs that help link our farmers with the people who most need 
access to fresh, healthy foods. Any program that supports local food 
purchases and helps develop new distribution networks will be a great 
benefit to both farmers like myself and the people who need access to 
the food I grow.
    There are a number of provisions in the present farm bill for 
organic certification and research and this is certainly an important 
piece of specialty crop agriculture. However, in this economy, I see 
many farmers using organic methods, but not able to spend the money or 
commit the time to complete their certification. Instead, their focus 
and that of many farmers has shifted to serving a market seeking out 
local foods.
    Whether it's certified organic, grown organically, or grown 
conventionally, consumers want to know where their food is coming from 
and who grew the crops. Because of this, I think it is important for 
the 2012 Farm Bill to include funding for programs that help all 
farmers who direct market, no matter what production techniques they 
use. This means developing food distribution networks, supporting the 
Farmers Market Promotion Program, supporting food-based 
entrepreneurship programs, and other grant opportunities. These 
programs all help improve the viability of all family farms in all 
areas of the country.
    And finally, the proposed new regulations for food safety are due 
out soon and diversified farms like mine are concerned with how this 
will change our business. Food safety begins on the farm and is 
certainly a primary concern on my farm. We work hard at ensuring it 
every day, in whatever way we can, but not knowing what is in these 
regulations and how hard it will be to comply with them scares me. If 
the farm bill can provide farmers assistance in meeting these new 
standards, whether with needed training, on-the-ground assistance from 
USDA, or tools to implement new procedures, this farm bill could 
certainly help that effort.
    These have been several of the issues of the upcoming farm bill 
that I think are most important to diversified vegetable farms like 
mine. Thank you again for the invitation to speak today and if you have 
any questions, I am always happy to answer them.

    The Chairman. Thank you.
    Mr. Osborn, you're recognized.

STATEMENT OF SCOTT OSBORN, WINE GRAPE PRODUCER; PRESIDENT, FOX 
                RUN VINEYARD, INC., PENN YAN, NY

    Mr. Osborn. Thank you. Good morning. Thank you for asking 
me to speak here today. I would like to thank you for taking 
the time to come all the way up here to listen to our thoughts 
on the upcoming farm bill.
    My name is Scott Osborn, and I own Fox Run Vineyards, which 
is a medium-sized winery in the Finger Lakes of New York. I 
have 50 acres of vinifera grapes which are the classic European 
varieties that I can grow due to the maritime influence of the 
large and deep Finger Lakes.
    I'm the current President of the New York Wine Industry 
Association and the past President of the Finger Lakes Wine 
Alliance, past President of the Seneca Lake Winery Association, 
and I was presented with an industry award from the New York 
Wine & Grape Foundation for my contributions to the New York 
wine industry. I'm also a member of Wine America and the New 
York Farm Bureau.
    The 2008 Farm Bill was historic in that for the first time 
ever specialty crops were officially recognized and supported 
in various ways. Grapes are a specialty crop, yet are the sixth 
largest dollar volume crop produced in the U.S. In New York 
alone, grapes, grape juice and wine generates more than $3.76 
billion in economic benefits to the State of New York. And the 
national industry generates more than a $162 billion for the 
American economy.
    For the new farm bill, my main concerns are crop insurance, 
research and market access programs. Crop insurance for grape 
growers is a big issue here on the East Coast. Although it has 
improved significantly in New York over the last 5 years, there 
are still a number of problems which need to be addressed.
    We are asking that you continue the premium subsidy to 
continue to get more buy in by growers. If you remove it and it 
costs too much, no one will participate.
    It would be nice if the harvest deduction was removed. 
Currently, grape growers are getting hit twice with this cost: 
Once when it is subtracted from the indemnity they get, and 
then again by the adjuster.
    This is a fee that is just charged grape growers for not 
picking their grapes. And every grape grower picks their 
grapes, so it is sort of problematic.
    The price per ton we are paid on a claim should be based on 
a 5 year average on either the contracted price or a regional 
average to reflect the real time market value as opposed to the 
current 10 year average. I also think that RMA and the USDA 
need to better educate their employees in other states where 
there is an emerging grape and wine industry, so they can 
understand the grape industry and they can be of help rather 
than an obstacle.
    We could use insurance for our new plantings. And this is 
something many people don't understand, we are a permanent 
crop, which makes us very different from other agriculture.
    Our installation costs are extreme. For example, it costs 
approximately $18,000 per acre to plant an acre of grapes, and 
it is around 4 years before the first harvest. We still have to 
farm it all this time, which runs $4,000+ per acre per year to 
farm, So the investment over 4 years is about $30,000 per acre. 
If you add in that we may be removing an under-performing 
variety and replanting for a more profitable variety, you are 
looking at, easily, a $50,000 investment per acre.
    If there's an environmental event which significantly 
damages or destroys the new vines, we have no way of recouping 
our investment. So some form of insurance would be a great help 
for that.
    In addition, moving the closing date for the MPCI, Multiple 
Peril Crop Insurance policies, to December 1st. The current 
date of November 20th is very close to the end of grape 
harvest, and in some cases people are still harvesting. Having 
an extra 10 days or so would be helpful by allowing the grower 
to make an intelligent decision rather than an impulse one.
    The specialty crop title of the farm bill was an important 
addition to the last bill, and I hope this remains. The 
Northeast is mostly made up of specialty crop producers, and 
this recognition is helpful to the success of farming in our 
area.
    The Specialty Crops Research Initiative, the Agricultural 
Research Service, IPM programs and block grants are all very 
important for grapes and other fruit and vegetable crops. A 
number of northern universities, through their grape breeding 
programs, have been able to develop grape varieties which can 
withstand subzero temperatures. This has allowed areas in the 
Northeast to develop a grape and wine industry that did not 
exist 5 years ago. The more funding towards research gives us 
more opportunities to develop our industry, providing more jobs 
and making our businesses more profitable and more competitive.
    The farm bill should continue to include export assistance 
programs such as the Market Access Program, which allows 
farmers to be competitive in a global market. Both the New York 
Wine & Grape Foundation and Welch's grape juice have received 
MAP funding in recent years, and this allows our wines and 
juice products from New York to expand current markets and 
explore new opportunities. Driving demand for our grape 
products directly helps farmers become more profitable.
    In summary, the last farm bill was a promising start, but 
needs to be continued and expanded so that specialty crops can 
contribute even more to the American agricultural economy.
    Thank you for letting me testify today.
    [The prepared statement of Mr. Osborn follows:]

Prepared Statement of Scott Osborn, Wine Grape Producer; President, Fox 
                    Run Vineyard, Inc., Penn Yan, NY
    Good morning! Thank you for asking me to speak here today. I would 
like to thank you for taking the time to come all the way up here to 
listen to our thoughts on the upcoming farm bill.
    My name is Scott Osborn and I own Fox Run Vineyards which is a 
medium sized winery in the Finger Lakes of New York. I have 50 acres of 
vinifera grapes which are the classic European varieties which I can 
grow because of the maritime influence of the Large and deep Finger 
Lakes. I am the current President of the New York Wine Industry 
Association, past President of the Finger Lakes Wine Alliance, Past 
President of the Seneca Lake Winery Association and was presented with 
the Industry Award from the New York Wine and Grape Foundation for my 
contributions to the New York Wine Industry. I am also a member of Wine 
America and the New York Farm Bureau.
    The 2008 Farm Bill was historic in that for the first time ever 
``specialty crops'' were officially recognized and supported in various 
ways.
    Grapes are a specialty crop yet are the 6th largest dollar volume 
crop produced in the U.S. In New York alone grapes, grape juice, and 
wine generates more then $3.76 billion in economic benefits to the 
state of New York, and the national industry generates more then $162 
billion for the American economy.
    For the new farm bill my main concerns are Crop Insurance, 
Research, and Market Access programs.
    Crop insurance for grape growers is a big issue here on the East 
Coast. Although it has improved significantly here in New York over the 
last 5 years there are still a number of problems which need to be 
addressed. We are asking that you continue the premium subsidy to 
continue to get more buy in by growers. If it costs too much no one 
will participate.
    It would be nice if the harvest deduction ($30) was removed. 
Currently grape growers are getting hit twice with this cost once when 
it is subtracted from the indemnity they get and then again by the 
adjuster.
    The price per ton we are paid on a claim should be based on a 5 
year average on either the contracted price or a regional average to 
reflect real time market value as opposed to the current 10 year 
average. I also think that RMA and USDA need to educate their employees 
in other states, where there is an emerging grape and wine industry, 
better so they can understand the grape industry so they can be of help 
rather then an obstacle.
    We could use insurance on our new plantings. We are a permanent 
crop. Our installation costs are extreme. For example it costs 
approximately $18,000 per acre to plant an acre of grapes. It is around 
4 years before you get your first harvest. We have to farm it all this 
time which runs $4,000+ an acre each year to farm. So the investment 
over 4 years is $30,000. If you add in that we may be removing an under 
performing variety and replanting for a more profitable variety you are 
looking at easily a $50,000 investment per acre. If there is an 
environmental event which significantly damages or destroys the new 
vines we have no way of recouping our investment. So some form of 
insurance would be a big help.
    Also move the closing date for MPCI (multiple peril crop insurance) 
polices to Dec. 1. The current date of Nov 20th is very close to the 
end of grape harvest and in come cases people are still harvesting. 
Having an extra 10 days or so would be helpful by allowing the grower 
to make an intelligent decision rather then an impulse one.
    The specialty crop title of the farm bill was an important addition 
to the last bill and I hope this remains. The Northeast is mostly made 
up of specialty crop producers and this recognition is helpful to the 
success of farming in our areas. The Specialty Crops research 
initiative, the Agricultural Research Service, IPM programs, and Block 
Grants are all very important for grapes and other fruit and vegetable 
crops. A number of Northern University's through their grape breeding 
programs have been able to develop grape varieties which can withstand 
subzero temperatures that have allowed areas in the North East to 
develop a grape and wine industry that didn't exist 5 years ago. So the 
more funding towards research gives us more opportunities to develop 
our industry providing more jobs and making our businesses more 
profitable and more competitive.
    The farm bill should continue to include export assistance 
programs, such as the Market Access Program (MAP), which allow farmers 
to be competitive in a global market. Both the New York Wine and Grape 
Foundation and Welch's grape juice have received MAP funding in recent 
years and this allows our wines and Juice products from New York to 
expand current markets and explore new opportunities. Driving demand 
for our grape products directly helps farmers become more profitable.
    In summary, the last farm bill was a promising start, but needs to 
be continued and expanded so that specialty crops can contribute even 
more to the American agricultural economy.

    The Chairman. Thank you.
    Mr. Child, you may begin when you're ready.

    STATEMENT OF RALPH CHILD, SEED POTATO AND LEAFY GREENS 
  PRODUCER, OWNER/OPERATOR, CHILDSTOCK FARMS, INC., MALONE, NY

    Mr. Child. Thank you, Mr. Chairman.
    My name is Ralph Child. I'm a fourth-generation produce 
farmer from Malone, New York. I grow 300 acres each of seed 
potatoes and leafy greens. I am active in the Empire State 
Potato Growers and the National Potato Council. Both 
organizations are active members of the Specialty Crop Farm 
Bill Alliance, a coalition of more than 100 specialty crop 
associations, companies and cooperatives across the U.S.
    I want to highlight the importance of several key issues 
included in the farm bill and a couple of issues that, while 
beyond the scope of the farm bill, remain critical to my 
continued success as a specialty crop grower in upstate New 
York.
    Prior to the 2008 Farm Bill, the needs and concerns of the 
specialty crop producers were not considered while establishing 
national farm policy. The inclusion in the 2008 Farm Bill of 
specialty crop programs designed to improve industry 
competitiveness was an important first step in making modern 
farm programs accurately reflect the mix of agriculture in the 
United States. Importantly, specialty crop producers requested 
Federal support for industry programs that were designed to 
maintain and improve competitiveness and not to provide 
compensation to growers nor to distort the specialty crop 
marketplace.
    Research is critically important to our industry's ability 
to continue to improve our productivity and to make nutritious 
fruits and vegetables available to consumers as economically as 
possible. The 2008 Farm Bill established two important programs 
that are producing research results that meet key needs for 
growers. The Specialty Crop Research Initiative provides 
competitive funding for multi-disciplinary, multi-state 
research projects that address critical industry needs. These 
are large projects that cover problems in a multi-state area.
    Since specialty crop production is so regionally diverse, 
Congress also wisely included the Specialty Crop Block Grant 
Program in the 2008 Farm Bill to address local needs. This 
program, as administered by the State Departments of 
Agriculture, is meeting the priorities of smaller growers like 
me whose needs for research and technical assistance might 
otherwise be overlooked.
    Increased access to foreign markets is also vital to the 
overall health of the industry. Many of our global competitors 
are able to produce and deliver specialty crops in a more cost 
effective way due to assistance from their own governments. 
Programs that enable U.S. producers to gain a foothold in a 
developing market are essential to growing our business 
domestically and contributing to a strong economy. The Market 
Access Program allows U.S. growers to do just that.
    MAP funds have enabled potato growers in the United States 
to market and export potatoes and potato products to 
significant economies all over the world, including the top 
export markets of Japan, China, Korea, and Mexico. U.S. potato 
industry is able to complement the funding it receives through 
MAP with other trade promoting programs including the Technical 
Assistance for Specialty Crops Program.
    TASC is crucial to maintaining market access in the face of 
sanitary and phytosanitary issues that can threaten to block 
U.S. specialty crops from critical markets. The value of TASC 
to the specialty crop industry cannot be overstated.
    Like any part of agriculture, and perhaps even more so, 
specialty crops are susceptible to plant pests and disease. 
Pests and disease can cut yield, hurt quality, and if the pest 
is a quarantined pest or a highly regulated pest, it can 
completely close off markets for our products.
    An example of a regulated pest that has the potential to 
wreak havoc on market access and devastate our local economy is 
the golden nematode. Since the quarantine is working, we are 
able to conduct business without serious consequences. With 
proper pest and disease programs, many of these issues can be 
identified early and possibly avoided altogether.
    A significant step forward for our industry in the 2008 
Farm Bill was the increased investment in the U.S. Department 
of Agriculture's Animal and Plant Health Inspection Service. 
The Plant Pest and Disease Management and Disaster Prevention 
Program allows APHIS to address plant pests early and 
proactively.
    Although it is not addressed directly in the farm bill, I 
do want to call the Committee's attention to need for adequate 
appropriations for the APHIS line item that funds the Golden 
Nematode Program in New York. That funding is important both to 
New York growers as well as to potato growers across the U.S.
    Finally, with the expected movement in the 2012 Farm Bill 
towards reliance on insurance products and away from direct and 
countercyclical payments, there needs to be a thoughtful 
discussion about crop insurance needs in the specialty crop 
industry. For specialty crop growers, annual planting decisions 
are based upon market indicators. There is a significant risk 
of distorting or destabilizing markets when incentive exists to 
make planting decisions based on crop or revenue insurance 
instead of those market indicators. I hope the Committee will 
look closely at the potential market distorting impacts of 
insurance programs using price or revenue loss triggers.
    Major policy strides were made in the 2008 Farm Bill for 
specialty crops, and we hope to build on those strides in the 
2012 Farm Bill. However, without a skilled agricultural work 
force, the best farm bill policies will not have their intended 
effect. The specialty crop industry is labor intensive and 
programs like mandatory E-Verify, without an agricultural 
worker program, would have extraordinarily negative 
consequences to growers like me.
    Since I farm close to the northern border, I understand 
firsthand the consequences of an enforcement-only immigration 
policy. I currently participate in the H-2A Program out of 
necessity, not because I think it is a viable long-term option. 
Any desire to further invest in my business is dampened by 
concerns about the long-term direction of immigration policy. I 
urge you to work with your colleagues in the House of 
Representative to approve a comprehensive immigration policy 
that provides an opportunity for existing agricultural workers 
to earn a legal status, creates a viable Guest Worker Program, 
and secures our nation's borders.
    Thank you for the opportunity to address this Committee. I 
respectfully request that the entirety of my remarks, which are 
more specific on key issues, be included in the record.
    [The prepared statement of Mr. Child follows:]

    Prepared Statement of Ralph Child, Seed Potato and Leafy Greens 
      Producer; Owner/Operator, Childstock Farms, Inc., Malone, NY
    My name is Ralph Child. I grow 300 acres each of seed potatoes and 
leafy greens in Malone, New York. I am active in the Empire State 
Potato Growers and the National Potato Council. Both organizations are 
active members of the Specialty Crop Farm Bill Alliance (SCFBA)--a 
coalition of more than 100 specialty crop associations, companies, and 
cooperatives across the United States. I want to highlight the 
importance of several key issues included in the farm bill and a couple 
issues that while beyond the scope of the farm bill remain critical to 
my continued success as a specialty crop grower in Upstate New York.
    Prior to the 2008 Farm Bill, the needs and concerns of specialty 
crop producers were not considered while establishing national farm 
policy. The inclusion in the 2008 Farm Bill of specialty crop programs 
designed to improve industry competitiveness was an important first 
step in making modern farm programs accurately reflect the mix of 
agriculture in the United States. Importantly, specialty crop producers 
requested Federal support for industry programs that were designed to 
maintain and improve competitiveness and not to provide compensation to 
growers nor to distort the specialty crop marketplace.
    Research is critically important to our industry's ability to 
continue to improve our productivity and to make nutritious fruits and 
vegetables available to consumers as economically as possible. 
Improvements in our nation's health are directly linked to expanding 
the availability and consumption of more fruits and vegetables. The 
2008 Farm Bill established two important programs that are producing 
research results that meet key needs for growers. The Specialty Crop 
Research Initiative (SCRI) provides competitive funding for 
multidisciplinary, multi-state research projects that address critical 
industry needs. These are big projects with big promise to solve big 
problems. Since specialty crop production is so regionally diverse, 
Congress also wisely included the Specialty Crop Block Grant (SCBG) 
program in the 2008 Farm Bill to address local needs. This program as 
administered by the state departments of agriculture is meeting the 
priorities of smaller growers like me whose needs for research and 
technical assistance might otherwise be overlooked.
    Increased access to foreign markets is also vital to the overall 
health of our industry. Many of our global competitors are able to 
produce and deliver specialty crops in a more cost effective way due to 
assistance from their own governments. Programs that enable U.S. 
producers to gain a foothold in a developing market are essential to 
growing our businesses domestically and contributing to a strong 
economy. The Market Access Program (MAP) allows U.S. growers to do just 
that. MAP funds have enabled potato growers in the United States to 
market and export potatoes and potato products to significant economies 
all over the world, including the top export markets of Japan, China, 
Korea, and Mexico. The U.S. potato industry is able to complement the 
funding it receives through MAP with other trade promoting programs 
including the Technical Assistance for Specialty Crops (TASC) program. 
TASC is crucial to maintaining market access in the face of sanitary 
and phytosanitary issues that can threaten to block U.S. specialty 
crops from critical markets. The value of TASC to the specialty crop 
industry cannot be overstated.
    Like any part of agriculture and perhaps even more so, specialty 
crops are susceptible to plant pests and disease. Pests and disease can 
cut yield, hurt quality, and if the pest is a quarantine pest or a 
highly regulated pest, it can completely close off markets for our 
products. An example of a regulated pest that has the potential to 
wreak havoc on market access and devastate our local economy is the 
Golden Nematode. Since the quarantine is working, we are able to 
conduct business without serious consequences. With proper pest and 
disease programs, many of these issues can be identified early and 
possibly avoided altogether. A significant step forward for our 
industry in the 2008 Farm Bill was the increased investment in the U.S. 
Department of Agriculture's Animal and Plant Health Inspection Service 
(APHIS). The Plant Pest and Disease Management and Disaster Prevention 
program allows APHIS to address plant pests early and proactively. 
Although it is not addressed directly in the farm bill I do want to 
call the Committee's attention to the need for adequate appropriations 
for the APHIS line item that funds the Golden Nematode Program in New 
York. That funding is important both to New York potato growers as well 
as potato growers across the U.S.
    Finally, with the expected movement in the 2012 Farm Bill toward a 
reliance on insurance products and away from direct and counter 
cyclical payments, there needs to be a thoughtful discussion about the 
crop insurance needs in the specialty crop industry. For specialty crop 
growers, annual planting decisions are based upon market indicators. 
There is a significant risk of distorting or destabilizing markets when 
an incentive exists to make planting decisions based on crop or revenue 
insurance instead of those market indicators. I hope the Committee will 
look closely at the potential market distorting impacts of insurance 
programs using price or revenue loss triggers.
    Major policy strides were made in the 2008 Farm Bill for specialty 
crops and we hope to build on those strides in the 2012 Farm Bill. 
Without a skilled agricultural workforce, the best farm bill policies 
will not have their intended effect. The specialty crop industry is 
labor intensive. A skilled labor force on a seed potato and leafy green 
farm is not very accessible to begin with and programs like mandatory 
e-Verify without an agricultural worker program would have 
extraordinarily negative consequences to growers like me. Since I farm 
close to the northern border, I understand firsthand the consequences 
of an enforcement--only immigration policy. I currently participate in 
the H-2A program out of necessity, not because I think it is a viable 
long-term option. Any desire to further invest in my business is 
dampened by concerns about the long-term direction of immigration 
policy. A flexible, realistic, and market-based agricultural guest 
worker program would enable me to more effectively do what I do best. I 
urge you to work with your colleagues in the House of Representatives 
to approve a comprehensive immigration policy that provides an 
opportunity for existing agriculture workers to earn a legal status, 
creates a viable guest worker program and secures our nation's borders.
    Thank you for the opportunity to address this Committee. I 
respectfully request that the entirety of my remarks which are more 
specific on key issues, be included in the record.
Specialty Crop Research Initiative
    The specialty crop industry accounts for half the farm gate value 
of plant-based agriculture in the United States. While many of our 
global competitors enjoy state subsidization, U.S. producers prefer 
support and funding for essential programs that enable the industry to 
be competitive at home and in foreign markets. The Specialty Crop 
Research Initiative (SCRI) has emerged as an essential tool to foster 
competitiveness. In the U.S. potato industry for example, $2,381,759 
provided by an SCRI grant allowed researchers from USDA's Agricultural 
Research Service in Ithaca and cooperators from across the country to 
develop and implement management strategies for Potato Virus Y as well 
as the eradication of necrotic variants of the virus that were 
introduced into the United States. Other research priorities have also 
been addressed through SCRI, including Zebra Chip research with project 
leaders in Texas and the development of varieties of potatoes with 
lower acrylamide as a result of research directed from Wisconsin. The 
program has been so successful and universally popular in the specialty 
crop industry that specialty crop producers recommend increasing the 
funding to $100 million per year of mandatory funds. Under current farm 
law, SCRI is not included in baseline funding and will not continue in 
the next farm bill unless action is taken to address funding. The 
effectiveness of SCRI could be improved by allowing greater flexibility 
in the administration of the program. Specific improvements include 
reduction of the 100 percent matching requirements, increasing 
stakeholder input, the inclusion of Federal and state marketing orders 
and commissions for consideration, and review by industry stakeholders 
for relevance prior to the scientific review.
Specialty Crop Block Grants
    The Specialty Crop Block Grant (SCBG) program is also of critical 
importance to the specialty crop industry by empowering regionally-
specific research to be conducted on a state-by-state and multi-state 
basis. In 2011, there were ten projects valued at a total of just over 
$1 million awarded in the state of New York, including extensive 
partnerships with researchers at Cornell University. Nationwide, about 
$55 million for the SCBG projects will be available in 2012. The 
program's effectiveness is clearly understood by the specialty crop 
industry, and with a few minor improvements could be even more 
responsive to the needs of the industry, including grower-level 
projects, strengthened definitions and the use of designated funds 
according to those definitions, increased emphasis on competitiveness 
and expansion of multi-state projects. Based on this experience, the 
specialty crop industry supports increasing funding by $5 million per 
year. This would translate to $350 million in mandatory funding over 5 
years.
Market Access Program
    The specialty crop industry is heavily reliant upon a robust export 
economy for continued success in the United States. For example, one in 
six rows of potatoes grown in the country today are destined for 
foreign markets, or more than double the amount we exported in 2000. 
One of the most important tools in this success story is the Market 
Access Program (MAP), which provided $6.1 million in funding for the 
U.S. Potato Board, the national marketing and promotion organization 
for the U.S. potato industry. Since 2000, potato exports to countries 
targeted with MAP funds has grown by 68%. Exports are a major reason 
that the agricultural economy has been so strong in recent years and a 
much-needed bright spot during the current national economic downturn. 
Not only does it make economic sense as an investment, it also allows 
U.S. growers to more effectively compete with their global competitors, 
many of whom enjoy significant advantages in the form of subsidization. 
As you might expect, MAP enjoys an immense level of popularity within 
the specialty crop industry and the Alliance fully supports continued 
mandatory funding at the current level of $200 million per year.
Technical Assistance for Specialty Crops
    Considering the significant stake that the specialty crop industry 
has in the export market, the industry is always looking out for 
technical barriers to trade that can close down markets for sanitary 
and phytosanitary reasons. The Technical Assistance for Specialty Crops 
(TASC) program is the vehicle to address these trade barriers in a 
timely fashion. TASC was originally designed to be a nimble and 
effective way to help the private sector resolve technical barriers to 
trade. These barriers can emerge unexpectedly and require fast action 
to prevent market closures and trade disruptions in established 
markets. Given the value and effectiveness of TASC, the Alliance 
recommends continued mandatory funding at $9 million per year.
Plant Pest and Disease Management and Disaster Prevention
    Commonly referred to as Section 10201, the Plant Pest and Disease 
Management and Disaster Prevention program in the 2008 Farm Bill allows 
funds to be used for early plant pest detection and surveillance, for 
threat identification and mitigation of plant pests and diseases, and 
for technical assistance in the development and implementation of 
audit-based certification systems and nursery plant pest risk 
management systems. This program is highly effective and allows USDA's 
Animal and Plant Health Inspection Service to address potential pest 
and disease issues proactively rather than reactively. Section 10201 is 
currently funded at a level of $50 million per year and the Alliance 
recommends $75 million in mandatory funding per year.
National Clean Plant Network
    The National Clean Plant Network (NCPN), or Section 10202, is a 
program also administered by USDA's Animal and Plant Health Inspection 
Service under which a partnership of clean plant centers are organized 
to provide high quality asexually propagated plant material free of 
targeted plant pathogens and pests that cause economic loss to protect 
the environment and ensure the global competitiveness of specialty crop 
producers. NCPN is funded through 2012 at $5 million per year but does 
not have baseline funding in the next farm bill. The Alliance 
recommends mandatory funding of $10 million per year for the National 
Clean Plant Network.

    The Chairman. They will indeed be included in the record, 
and thank you, Mr. Child.
    Mr. Sullivan, begin whenever you're ready.

STATEMENT OF ADAM F. SULLIVAN, APPLE PRODUCER; ORCHARD FOREMAN, 
               SULLIVAN ORCHARDS, INC., PERU, NY

    Mr. Sullivan. Good morning, Mr. Chairman, distinguished 
Members of the Committee. I'd also like to recognize 
Congressmen Bill Owens and Chris Gibson, and thank you both on 
behalf of the industry. If you could please let Ranking Member 
Peterson know that a grower from upstate New York wore purple 
so that the Minnesota Vikings can get the stadium passed, I 
would be most appreciative.
    I appreciate the opportunity to speak to you today about 
the impact of the 2008 Farm Bill and priorities for 2012 
legislation. My name is Adam Sullivan of Sullivan Orchards, and 
I'm a fourth-generation apple grower from Peru, New York. Due 
to the time constraints, I'd like to encourage all of you, if 
you have not had the opportunity, to review and read the 
written testimony that I have submitted.
    The written testimony provides excellent detail of many 
issues facing and impacting growers across this country in 
which the farm bill has been very effective in assisting 
growers, whether it is the Specialty Crop Research Initiative, 
which is playing a critical role in slowing down the damage 
caused by the newly invasive brown marmorated stink bug, or the 
Tree Assistance Program which help growers, many of whom are 
located in the Champlain Valley, recover losses from 
catastrophic tree loss sustained from an early thaw followed by 
extensive cold weather, which in turn killed the trees.
    Today I'd like to spend the remainder of my time teaching 
you about three specific issues regarding the farm bill. These 
issues are the Market Access Program, crop insurance and, of 
course, labor.
    Exports are extremely important to the apple industry with 
nearly 30 percent of the fresh crop destined for overseas 
markets. The export market is critical for the Empire variety, 
which is the second most grown variety in New York State. 
Empires are exported throughout the European Union, recently as 
far as Singapore, to name a few, and all thanks to MAP funding.
    The apple industry strongly supports the Market Access 
Program which has helped level the playing field as we compete 
with countries such as China and Chile who have a much lower 
cost of production. MAP is a public-private partnership with 
growers contributing $2 for every Federal dollar the industry 
receives. While my company only exports a small portion of our 
crop, every apple exported is one less apple I have to battle 
shelf space for.
    Now I'd like to change gears and tell you a brief story. In 
1983, on a Saturday afternoon in late August, about 3 o'clock 
in the afternoon, a storm fell over the orchard and we could 
hear the hailstones pinging off the metal roof. I remember 
seeing my father watch as the stones piled in the driveway. 
After about 5 minutes it stopped. Dad went out to evaluate the 
crop. He came back ``annoyed'' that this had happened, but the 
crop was salvageable. Then 5:30 came, and the real storm began.
    I don't remember how long it lasted, but I remember him 
staring out the window with my mother consoling him. It was 
determined that a tornado landed less than a mile away and 
pummeled the apples. I was 6. The crop was so severely 
destroyed that mom and dad were only able to sell one load of 
juice. That year's crop fermented on the orchard. The real 
kicker was that he didn't have crop insurance. It took them 
more than a decade, through hard work and God's good will, that 
they got the orchard financially secured again.
    The second issue I'd like to discuss is the Federal Crop 
Insurance Program. Over the years, the industry has worked 
closely with USDA's Risk Management Agency. As a result, 
significant improvements to the apple policy have been made, 
such as fresh fruit buyout, specific grades and a list of what 
actually constitutes a defect.
    Crop insurance is an excellent tool to help the grower 
manage risks. With farming, challenging weather is part of the 
deal and crop insurance makes the grieving process a little 
easier. Input costs are so high today, the margin so tight, 
that a grower could not back--excuse me--a grower could not 
come back from a loss suffered like my parents without crop 
insurance.
    Last, most importantly, I would like to discuss labor. 
Clinton County, which is where Sullivan Orchards is located, 
has more cows than people. The youngest full-time employee at 
Sullivan Orchards is 35 and he's sitting here before you today. 
The next youngest employee is 58.
    The younger generation is not coming to work in agriculture 
in Peru. Due to our climate, soils, and I like to believe, 
skills, the Champlain Valley is known for growing the highest 
quality McIntosh apples, and I see many of you eating them 
today.
    The Champlain Valley harvest is approximately 1 million 
bushels of Macs in a 4 week window. Unfortunately, there is not 
a local work force to harvest a crop. As a result, our farm and 
all the apple growers in the region have relied on the Jamaican 
H-2A Program.
    For approximately 30 years, the program has worked for 
Sullivan Orchards. We have the same men returning year after 
year. Last year marked the 25th season for James Hahn who was 
the last of the original men.
    Since I returned to the farm, and even prior to that time, 
there has been constant rhetoric about the need for an 
efficient Guest Worker Program. We are no closer now then we 
were 10 years ago. Instead, we are threatening people with E-
Verify, scaring growers using the only legal Guest Worker 
Program, and are taking away health insurance from our Jamaican 
guest workers.
    The subject of immigration reform has been talked to death. 
I understand it is an election year, and I understand that 
unemployment is high. I understand that immigration is a very 
sensitive issue. Unfortunately, myself and the other growers in 
the Champlain Valley don't have an alternative way to get the 
crop grown and harvested.
    We need an effective Guest Worker Program. I depend upon 
the men coming year after year. They plant the trees. They 
operate the tractors. They mow the orchard floor. They know the 
fields. They go to the local church. They purchase groceries at 
the local Grand Union. They buy clothes at the local store. 
They pay Federal and state taxes. They are as much a part of 
the success of Sullivan Orchards as I am, my father is, or 
Gramp was.
    The time for rhetoric is over and action needs to be taken 
concerning a Guest Worker Program. Let's get an effective Guest 
Worker Program passed for 2012 for all commodities, including 
dairy.
    Thank you for the opportunity to speak. I will be happy to 
answer any questions, and enjoy those Macs.
    [The prepared statement of Mr. Sullivan follows:]

    Prepared Statement of Adam F. Sullivan, Apple Producer; Orchard 
               Foreman, Sullivan Orchards, Inc., Peru, NY
    Good morning, Chairman Lucas, Ranking Member Peterson, and 
distinguished Members of the Committee. I would also like to recognize 
Congressmen Bill Owens and Chris Gibson and thank you both on behalf of 
the industry. It is great to have two New Yorkers on this important 
Committee and we look forward to working with both of you on the new 
farm bill.
    Thank you for the opportunity to speak today about the impact of 
the 2008 Farm Bill and priorities for the 2012 legislation. My name is 
Adam Sullivan of Sullivan Orchards and I am a 4th generation apple 
grower from Peru, New York. My Great Grand-father started the farm with 
a handful of cows, some apple trees, a few vegetables and potatoes--a 
good Irishmen. When ``Gramp'' took over, he sold all the cows to grow 
strictly apples, which is how the farm remains today. My father and 
mother are still the primary stakeholders and participate in much of 
the functions of the orchard. I returned to the orchard in 2003 to 
serve as the orchard foreman and run the day to day activities.
    From New York to Washington State and Michigan to California the 
industry is comprised of independent business owners, many of whom are 
third or fourth generation. We strongly support programs that build 
long-term competitiveness, drive innovation and grow demand of our 
products. Apple growers and the produce industry are not seeking a 
government farm program to support grower income or market prices. That 
would not be in the best interest of my business or our industry. The 
2008 Farm Bill made a number of important strides toward each of these 
goals.
Research
    Research and extension activities supported by USDA provide the 
apple industry with a competitive edge by enabling the introduction of 
new cultivars, implementation of improved pest management strategies, 
genomics and plant breeding and science-based improvement of food 
safety.
    One of the most successful programs of the 2008 Farm Bill is the 
Specialty Crop Research Initiative (SCRI), which provides funding for a 
variety of research programs throughout the specialty crop industry. 
For apple growers, this program played a critical role in slowing down 
the damage caused by the newly invasive Brown Marmorated Stink Bug 
(BMSB).
    The SCRI funded a 3 year, $5.7 million research grant involving 
over 50 scientists and ten research institutions nationwide to develop 
methods to control this destructive pest. The research has already 
yielded significant benefits. Information provided to growers from SCRI 
researchers resulted in a dramatic reduction in losses in 2011. 
U.S.Apple estimates that information from SCRI researchers saved apple 
growers alone at least $35 million in 2011--that is over six times the 
amount of the total 3 year grant. Much more research needs to be done 
to develop a long term solution to the BMSB problem, but this research 
project alone promises to save agriculture from potentially billions of 
dollars of losses nationwide.
    This is only one example of the impressive return on investment 
that the SCRI has provided during its first 4 years. Advances made in 
SCRI research projects on mapping the apple genome, mechanizing orchard 
practices such as pruning and harvesting, and prevention of other 
disease and insect pest threats promises to result in even greater 
savings to agriculture that translates into a direct benefit to the 
U.S. economy and U.S. jobs.
    Another important program is the National Clean Plant Network, 
which serves as the single nationally-certified source of plant 
material free of potentially devastating diseases and pests. Enabling 
the nursery industry to produce clean plants is of critical importance 
because a number of serious diseases can enter into the United States 
through nursery stock. Once such pests and diseases become established 
in a region it is very difficult to eradicate them.
    A strong commitment to research is critical to the future of the 
apple industry, but the benefits of a strong and coordinated research 
program flow directly into the U.S. economy.
Crop Insurance
    The apple industry is one of a handful of specialty crops that 
participates in the Federal Crop Insurance Program. Over the years, the 
industry has worked closely with USDA's Risk Management Agency (RMA) 
and as a result, significant improvements to the apple policy have been 
made. USApple and the RMA collaborated to provide growers with an 
insurance program that better addresses the unique needs of the 
industry. Just this past season, Hurricane Irene came for a visit. The 
storm damaged our fresh fruit production through hail stones piercing 
the fruit and wind knocking apples into each other causing bruises. 
Nine inches of rain fell with 50 mph wind gusts blowing trees over. 
Through having the Fresh option with our crop insurance policy, 
Sullivan Orchards is able to recoup some of our loss.
    No crop insurance program will make a grower devastated by a 
natural disaster financially ``whole,'' but it will allow them to 
survive a devastating loss and continue to support the economic engine 
of rural America. Let me be clear, crop insurance enables me to manage 
risk, but it should never be designed in a way that distorts the market 
or encourages sub-par production. The apple industry is also concerned 
that as discussions in Washington, D.C. have moved to further expand 
crop insurance programs, there will be additional requirements 
attached, such as cross compliance with other Federal programs. What we 
need is less government regulation, not more.
Tree Assistance Program
    When severe weather occurs, apple growers can experience not only 
lost crops, but damaged or destroyed trees. That is exactly what 
happened in 2004 when a January thaw of December's heavy snow fall, 
followed by 30 below zero temperatures, caused moisture in the ground 
to freeze and snap roots of more than 30,000 trees in Clinton County.
    The replacement cost alone for those trees, was estimated at nearly 
$3 million, and when you add the lost crop revenue, the total loss is 
much greater. This was also a multi-year loss, as new trees take 3 to 5 
years to produce fruit. The Tree Assistance Program (TAP) offered a 
lifeline by providing funds to growers to partially offset the cost of 
tree replacement. However, securing those funds was a tough lift and it 
was only because there was a large disaster bill already moving through 
Congress that TAP funds were allocated.
    That is why the apple industry urged Congress to include mandatory 
funding for TAP in the 2008 Farm Bill. This program is a success and 
must be maintained and expanded if possible to reach more growers.
Export Programs
    Exports are extremely important to the apple industry, with nearly 
30% of the fresh crop destined for overseas markets. While our company 
only exports a small portion of our crop, a strong export market 
strengthens domestic prices for growers nationwide. For many growers in 
New York, the export market represents a significant portion of their 
business.
    The apple industry strongly supports the Market Access Program 
(MAP), which has helped level the playing field as we compete with 
countries such as China and Chile that have a much lower cost of 
production.
    As a direct result of the MAP program funding, New York companies 
have been able to identify and supply key importers in Singapore--who 
are looking for new products for their stores and for the past three 
seasons they have been stocking apples from New York State. Growers and 
shippers from New York would not be able to conduct activities or 
develop a market such as this without the support of MAP funds that 
allowed us to bring buyers to the U.S. to meet with suppliers. MAP also 
funded sampling programs in supermarkets to educate consumers in 
Singapore about apples and their unique flavors. MAP is a public-
private partnership, with growers contributing $2 for every Federal 
dollar the industry receives.
    The Technical Assistance for Specialty Crops (TASC) is another 
important farm bill program which provides funds to resolve 
phytosanitary and technical barriers that prohibit or threaten access 
to a foreign market. The New York apple industry used TASC funds to 
maintain an important foot-hold in the Israeli market when pest and 
disease concerns threatened to shut down the market. The U.S. Apple 
Export Council worked with Cornell University to develop new pest 
mitigation guidelines which allowed trade to continue without 
interruption.
    I would also like to take this opportunity to thank Congressman 
Owens for introducing H.R. 3914 to amend the Apple Export Act. This 
bill would eliminate the USDA inspection requirement for bulk apples 
into Canada. The requirement, which dates back to 1933, is no longer 
necessary or required by the Canadians. If passed, this bill will save 
money and time for the grower and, in the process, increase exports.
Nutrition Programs
    Programs like the Fresh Fruit and Vegetable program are a win-win 
for the apple industry and the children that are served. This highly 
successful national program reaches more than four million low-income 
elementary school children, many of them in New York City. Apples have 
consistently been one of the most popular fruits in the program.
    The program is popular with parents, students and educators alike. 
Many of the students who participate take what they learn home with 
them by asking their parents to buy fresh fruits and vegetables. There 
is a bipartisan focus on reducing the rate of childhood obesity and 
diabetes through improved nutrition and this program accomplishes those 
goals.
Marketing Programs
    The 2008 Farm Bill includes a number of important marketing 
programs which have proven beneficial to the apple industry both in New 
York and nationally. The Specialty Crop Block Grant program focuses on 
regional and local priorities to improve the competitiveness of 
specialty crop producers. Nationally, the apple industry has utilized 
these grants for food safety programs as well as marketing initiatives 
and state programs including ``Pride of New York.''
    The Value-Added Grant program is also helping growers here in the 
north country. Red Jacket Orchards, which is located in Geneva, 
received such a grant which they used to expand their operation and 
create new jobs in the process.
Labor--Our #1 Issue
    I would be remiss if I did not raise the issue of agricultural 
labor and the concerns that apple growers have from coast-to-coast as 
to whether they will have adequate labor to pick the crop. In other 
parts of the country you hear a lot about migrant workers but we here 
in the Champlain Valley are a little different.
    Clinton County has more cows then people. The youngest full time 
employee at Sullivan Orchards is 35 and he is sitting before you today. 
The next youngest employee is 58. The younger generation is not coming 
to work in agriculture in Peru.
    Due to our climate, soils, and I like to believe skills, the 
Champlain Valley is known for growing the highest quality McIntosh 
apples. Unfortunately, the harvest window for McIntosh lasts only 4 
weeks. The Champlain Valley harvests approximately 1 million bushels in 
this 4 week window. As stated earlier, there is not a local work force 
to harvest the crop. Most migrant workers do not want to travel to this 
area because of the short work period.
    As a result, our farm and most all of the apple growers in this 
part of New York have relied on the Jamaican H-2A program. It is not 
uncommon to have the same workers return for 10 or even 20 years. The 
program, while expensive and bureaucratic, has supplied us a reliable 
and consistent workforce and up until about 2 years ago it worked 
pretty well.
    In August of 2010, just as we were gearing up for harvest, the 
program came to a standstill and workers were delayed in arriving 
because the U.S. Government began questioning the legitimacy of 
voluntary fees which had always been paid by the workers to the 
Jamaican Central Labor Organization (JCLO) to pay for health insurance, 
and liaison services provided by the JCLO to the workers. The JCLO also 
coordinated a program for workers to send money home at no charge if 
they chose. The JCLO is affiliated with the Jamaican Government and the 
program and voluntary fees had been in place since the 1990s. When the 
Department of Labor began questioning these services and specifically 
the fees, we almost lost our workers. Finally, due to the intervention 
of a number of senior Members of Congress, an agreement was reached 
that no fees would be taken out and the workers arrived.
    This ``compromise'' is still in effect and we are now getting our 
workers on time. However, they are coming without health insurance and 
if they want to send money home, they have to pay exorbitant fees 
through Western Union. I have had workers come to me and express 
concern that they no longer have health insurance. They don't 
understand--and neither do I--why our government would take that right 
away from them.
    Though the program is mostly working again, I have strong concerns 
about what will happen if mandatory E-Verify legislation is passed 
without agricultural labor reforms and suddenly all of agriculture is 
forced into the H-2A program at once. Currently, the program only 
supplies about 50,000 of the estimated one million agriculture workers 
needed in this country. Sullivan Orchards has been in this program for 
over 30 years, and I can tell you first hand that it does not have the 
capacity to double let alone increase twenty-fold without major 
reforms. What the industry needs is a stable, adequate, able and 
predictable supply of agricultural labor able to participate legally in 
the U.S. workforce.
    Thank you for allowing me the opportunity to testify before this 
Committee. These discussions and the reauthorization of the farm bill 
offer an exciting opportunity to further improve important specialty 
crop programs and support increased growth and competiveness of the 
apple industry.

    The Chairman. Thank you, Mr. Sullivan.
    I now recognize myself for 5 minutes.
    Your memories of going to the field after the catastrophe 
reminds me of being a 7 year old and following my father to the 
wheat field nearest the house one night and watching him stand 
in that field with his flashlight and realizing every stalk was 
broken over and that quiet walk back. Even as a 7 year old, 
like yourself, there are some things you remember forever. The 
fact that he said nothing for 2 days made a great impression on 
me. That said, that's what we're here about, and that's what 
we're here to try to address.
    Mr. Eckhardt, let's begin with you. You mentioned the SURE 
Program and you talked about your experiences. Could you expand 
on that just a little bit, and not only your experience with 
SURE, but expand for a bit on where you think the money would 
be better spent, perhaps you think the money would be better 
spent somewhere else?
    Mr. Eckhardt. Right. I think as we look at eligibility for 
coverage under certain programs, the paperwork and record 
keeping trail, along with whether or not SURE will be released, 
is just so burdensome that many people back away from any 
insurance coverage whatsoever. I mean, it may be that the only 
reason they sign up for CAT for their field crops or for NAP 
for their vegetable crops is that their banker may require that 
they have some type of coverage.
    But when it gets right down to push come to shove, for 
instance, with NAP, the first 50 percent of your loss is yours. 
You take it in the shorts for 50. If you have 51 percent loss, 
you will get indemnification for one percent. Do you understand 
what I'm saying?
    So when you look at the calculations, and SURE Program has 
some of the same issues, only it's usually 2 years later that 
those funds start to become available, and through the process 
of qualification and the review by the county committees and 
the FSA county and state committees, that you get some 
indemnification through the SURE Program.
    My seed company really is looking to get paid that year for 
the seed I bought from them, not 2 years later. My fertilizer 
company wants their money sometimes up front. When we look at 
these kind of indemnification programs that are that long in 
getting funds back to those people who have had losses, 
sometimes catastrophic losses, it just isn't working.
    You know, what could we spend it better on? Perhaps on some 
type of process or policy NAP process, that would allow the 
grower to purchase a higher level of coverage. Much like we 
have in the crop insurance programs. NAP would, for lack of a 
better term, I call it NAP Plus. But these would be things that 
we could tweak to this program to make it so that it's more 
acceptable.
    And the other thing is, is it's very difficult when you try 
to put together what is referred to as APH, actual production 
history, for your farm. You know, you produce potatoes or sweet 
corn or whatever, you have to come up with documentation year 
after year to justify that.
    So it's--it's extremely difficult and time consuming for 
the producer and those people in the FSA and the crop insurance 
people to come up with speciality crop insurance that's going 
to work. SURE has it. It just is too time consuming and too 
late.
    The Chairman. Switching gears for a moment, gentlemen. I'd 
be honest, if I did not admit this to you, I would not be 
honest. The northwest half of the great State of Oklahoma is 
what I represent. And when I stand up in front of this 
building, I can see more trees than there are in my entire 
Congressional district, so understand I think they're amazing 
things, these trees.
    Could you tell me for a moment about your experiences with 
the Tree Assistance Program, TAP, if anyone has experience?
    And by the way, I like trees. I'm not opposed to trees. I 
just don't have any.
    Mr. Sullivan. I think it was 2003 or 2004. Don't hold--hold 
me to the actual year it happened. We had an extensive snowfall 
in December and then we had a wonderful January thaw, which was 
nice. I mean, it went from 20 below up to into the nice 30 
and 40. It was a nice, nice, nice little break. But then 
January decided to come back with full vengeance and froze up 
the ground, which in turn snapped the roots and killed the 
trees.
    So in the Champlain Valley, we had close to 30,000 trees 
that--that snapped off at--in the root system and the trees had 
to be removed and replaced. And so we did the Tree Assistance 
Program. It helped. It assisted, and I mean, it didn't pay for 
the loss by no means, but I mean it was extra money that was 
certainly needed and it was nice.
    The Chairman. This, of course, is one of the many reasons 
we have these hearings. I come from an area where this is not 
really utilized, but obviously it is an important program.
    Mr. Sullivan. It has its place, of course--I didn't get 
into it in my speech, and I'm glad to hear that we're really 
trying to be financially and fiscal responsible. All these 
policies are great to have and regulations are great and the 
Tree Assistance Program is great. But the $30,000 that we got 
from putting--from the Tree Assistance Program, it was nice. It 
helped. I'm not going to say no, because it's there.
    But if it wasn't there, I am still going to be farming. I 
mean, call me thick-headed and dumb, I mean, but I'm still 
going to make a go of it. That I think it's more important as 
you're doing the farm bill that you look and you say is it 
worth putting my kids and everybody else's kids here further in 
debt for giving a little Band-Aid aid or is it better that 
maybe we don't put the money out there.
    The Chairman. Your insights are very appreciated. My time 
has expired. I now recognize the gentleman from Georgia for 5 
minutes. Mr. Scott.
    Mr. David Scott of Georgia. Thank you very much, Mr. 
Chairman.
    Seems to me that the two most pronounced areas of great 
challenge to the specialty crop industry here is the need for 
crop insurance because no area of agriculture is more 
susceptible to storms and weather conditions than specialty 
crops. And the other one is your challenge with labor because 
it's labor intensive. It's getting out there, picking and 
harvesting these crops. So let me start off with the crop 
insurance.
    Mr. Eckhardt, I think you probably hit some of this: How 
many lenders now require crop insurance, and would this be the 
way to go, that lenders require the growers to have insurance 
if they lend them money for their operating cost?
    Mr. Eckhardt. I don't think I've ever been told by a lender 
that I was not going to get a loan if I didn't have crop 
insurance.
    Mr. David Scott of Georgia. Okay.
    Mr. Eckhardt. But you can tell by body language and 
interest rate just how important they make that: It would be a 
great idea, Mr. Eckhardt, to have some crop insurance. And 
you're nodding your head like this, going, yes, you're 
absolutely right.
    So to say that in some writing some place, crop insurance 
was required by my lender, I don't think I've ever seen that. 
And if it is, what the big print giveth, the little print 
taketh away. But I still think that as we go forward, it 
certainly gives them the option to say this person has some 
coverage should there be a catastrophic loss and we might 
actually ask to be named as one of the people who receive those 
funds.
    Mr. David Scott of Georgia. Do you think that with us in 
Washington, in Congress, as we develop policy, that some kind 
of way that we approach with this farm bill some effort to 
require that?
    Mr. Eckhardt. Well, perhaps--perhaps through a--if it was 
required by a lender, the farm bill could look at how there 
might be a reduced interest rate to that grower who's borrowing 
operating or capital funds, a reduced interest rate if you do 
have some type of workable crop insurance. But it needs to be 
something that's actually going to pay you something if you 
have a loss.
    Mr. David Scott of Georgia. Right. All right. Now let's 
turn to the labor issue, because, Mr. Sullivan, I really think 
that you hit the nail on the head here with this. Because we 
can no longer continue to hide from this issue. If we do not 
address the labor issue for specialty crops, how devastating 
would this be? I mean, we've another Farm--we got this farm 
bill. I mean, there may be some things we could do with this, I 
don't know. We certainly can bring that discussion up, but this 
farm bill comes around every 4 years. How urgent is this 
problem to develop a Guest Worker Program for specialty crop 
producers?
    Mr. Sullivan. I think Mr. Child has probably a pretty good 
example on how urgent the, if you don't mind telling your 
experience with--a couple of years ago, about the H-2A Program 
and how our government decided to take it upon themselves to 
invoke rules that nobody knew about to not allow the men to get 
in here.
    Mr. David Scott of Georgia. I did want to get to that 
because, Mr. Child, I was getting to you next. And as you 
respond to this, you said securing the borders, and that was 
the only reference that you made in your testimony to what 
might be judged upon as dealing with this immigration issue. I 
want to ask you that, but I also wanted to ask you which 
borders? Are you talking about Canadian border?
    Mr. Child. I do live near a high priority enforcement zone 
on the Canadian border, but I fully recognize most of the 
people that are coming into the country to work are coming in 
on the southern borders. The fact that I live so close to the 
border, with a border patrol station in my town, just makes me 
very vulnerable to enforcement.
    I think it was back in 2004 was the last year that I hired 
crews from labor contractors that were green-carded people. 
It's a pretty well known fact that approximately 70 percent of 
the migrant workers in agriculture are probably here with 
forged documents. And we might as well bring out the facts and 
tell it straight.
    I currently use the H-2A Program which Mr. Sullivan alluded 
to that he uses--for his Jamaican work force. I still hire 
Mexican workers for my vegetable farm.
    The H-2A Program has allowed me to have a continuity from 
one year to the next without concerns about enforcement from 
Immigration, but the Administration, through the Department of 
Labor, has been quite difficult. There are a lot of hoops to 
jump through.
    Mr. David Scott of Georgia. Right?
    Mr. Child. It's been really frustrating the last couple of 
years, where the rule changes from one year to the next, make 
it quite difficult, and----
    Mr. David Scott of Georgia. Let me just--I know my time is 
getting around the Chairman's back. I don't want him to cut me 
off. But may I make one suggestion that might be helpful, is 
that you get these specialty crop block grants coming down 
through your state, and you also--we also have Specialty Crop 
Research Initiative, and you have some excellent universities 
and research groups here. It might be useful to do some 
documentation, engage in some study of this impact of the labor 
issue with the specialty crops in this region. And it could 
qualify for that, to begin to give us in Washington more 
substantive information and credibility on how we move forward 
with this, because, I assure you, I grew up on a farm. I used 
to come up. Matter of fact, I used to come up here a long time 
ago when I was a kid, in around Utica. And they used to have a 
lot of bean picking up there then. I don't know if they still 
do. And even back then, it was migrant labor coming up from the 
south, and they used to have what they called bean camps up 
here.
    So you're very unique in this regard, and it could be a 
wise utilization of your block grants to get some information 
on this. Thank you, sir.
    The Chairman. The gentleman's time has expired. The chair 
now recognizes the gentleman from Virginia for 5 minutes.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    I'd like to follow up on the questions of the gentleman 
from Georgia, again, on the issue of the H-2A Program and Guest 
Worker Programs in general.
    I have, in the last few Congresses, introduced legislation 
to reform the H-2A Program to change the adverse effect wage 
rate, which seems like a bureaucrat's dream, to the prevailing 
wage rate which it seems like most businesses pay their workers 
based upon what the prevailing wage is in--in the marketplace. 
It also would reform a number of these other issues.
    Unfortunately, it's also not something that will come up in 
the farm bill because it's the Judiciary Committee's 
jurisdiction. But since I am a Member of the Judiciary 
Committee, I can be helpful in that regard, and I would love to 
hear some of the particular problems that you had here in the 
last 2 years with the H-2A Program.
    One example that I've heard, from my apple growers in the 
Shenandoah Valley, has been that they have no ability to 
determine whether or not the worker can actually do the work of 
climbing a ladder and picking apples. In fact, when they 
attempted to determine that the people they were going to be 
hiring would indeed climb a ladder, they were told that they 
were imposing a requirement that was inappropriate.
    This kind of problem really makes a program which was 
struggling to begin with, the H-2A Program, even more 
unworkable and why I think it needs to be reformed. But Mr. 
Child, Mr. Sullivan, any of you want to jump in and talk about 
the experience you've had lately in dealing with the workers 
you need under the H-2A Program?
    Mr. Child. Yes, there are a few hurdles that have come up 
in the last couple years. A lot of times with this program 
we're being regulated by multiple agencies, both at the Federal 
and state level. In the past, the H-2A Program required a 
certain--required that the producer provide housing for the 
workers, but left the inspection of the housing up to the state 
departments of health.
    That changed a couple years ago where, then before you 
could receive certification, the inspection of the housing had 
to be done at that time. Since you have to apply so far ahead 
before your date of need for the workers, that meant going out 
in the snow banks and working on the labor camp just to get 
certification rather than having the facilities ready when the 
workers arrived, and that's been a bit of a hardship.
    I have heard horror stories. Some of my colleagues in Idaho 
have had some very bad issues along those lines, where for very 
minor, not even what you would normally consider infractions, 
they're denied a housing permit. And then that backs up the 
whole process and you have to start all over again.
    Some of the regulations may have good intent, but the way 
they're administered is really off base.
    Mr. Goodlatte. Agreed. Let me, since I'm going to be 
limited in time here.
    Mr. Child. Okay.
    Mr. Goodlatte. Let me shift over to another topic I'd like 
to raise that we haven't had a lot of discussion about, and 
that's the conservation programs. And I'll give Mr. Eckhardt 
and Mr. Osborn an opportunity to tell us about which of those 
programs producers in this part of the world take part in and 
what conservation programs we should focus on with the limited 
resources we have.
    Mr. Osborn. I just want to add something just from the last 
on the H-2A, and that is for a small producer like me, H-2A 
doesn't work. It's too expensive and when I need three 
employees for 1 week and then a month and a half later I need 
ten, the H-2A doesn't fit. And there are a lot of small grape 
growers and specialty crop producers that H-2A just doesn't 
work, so there's nothing there for us to get the extra help 
that we need.
    In terms of conservation, we've worked with the Soil and 
Water. We've got our drainage ditches put in. Those are all 
very effective. The Cooperative Extension and their help in 
bringing and letting us know what is available to us in terms 
of education and the programs like mulching and things like 
that that help our conservation are all very effective. I mean, 
I appreciate everything that's being done.
    Mr. Eckhardt. The EQIP Program is critically important, but 
it also has a component that the producer contributes. There 
are other matching funds that might be available from state or 
local municipalities, so that when you look at the funding for 
EQIP, as we tweak the program to make it work better, 
especially in the specialty crops, I think there are lots of 
opportunity to leverage other programs to fund that.
    I think the critical part is, is we are all 
conservationists at heart. We want to have something left for 
our children and our grandchildren to farm. But if we don't 
have these critical programs and practices in place, in some 
cases there may not be much left, and the environment is 
important to us.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    The Chairman. The chair now recognizes the gentleman from 
New York, Mr. Owens for 5 minutes.
    Mr. Owens. Well, thank you, Mr. Chairman.
    Gentlemen, thank you for testifying today.
    It seems to me that the two issues we're hearing most about 
are crop insurance and farm labor issues. I know that certainly 
with Mr. Sullivan we've had many, many conversations about this 
as it goes, and some cases go back to your father in the 1980s, 
when we were having those same discussions.
    In terms of the crop insurance issue, is there some 
analysis, that you've seen that's out there, that would give us 
a good road map to establishing a workable crop insurance 
program? Obviously understanding it may have to be modified 
regionally, and may also have to be modified in terms of the 
type of agricultural program we're facing. It just strikes me 
that we've had a lot of conversation about it, but when you 
look at the crop insurance programs, it's not clear to me that 
there is in fact an analysis that we could utilize to really, 
in a major way, revamp these programs to make them more 
functional.
    Mr. Eckhardt. You're asking for a template that we can 
apply across the board, with specialty crops, with field crops 
like corn, soybeans, wheat, cotton. I think it's going to be a 
group effort to come up with a--we have a base, and I look at 
that base as being, like the NAP Program, for those programs 
that do not have any insurance, and the possibility of having 
more crops added to the insured programs rather than relying on 
NAP. But as a template, I think it's going to have to come down 
to a consensus among specialty crop growers, region by region, 
what works. And I think that looking at some of the things that 
don't work and tweaking them to get them so they do work.
    I wish I could say I had a template, and be able to hand it 
to the Committee and say, here, this will work. This is my idea 
as how it's going to work. I have some ideas, but it is not a 
template, but it is some ideas on how we can tweak it and make 
it work better. It's very difficult because there are so many 
thousand of specialty crops that we would have to include in 
something like that.
    Mr. Owens. Well, let's start with the ideas that you do 
have, and let's lay them out and then get some analysis done to 
determine whether or not that works.
    One of the things that struck me in your testimony, when 
you talked about and having read about this before, is if you 
have a 51 percent loss but you have, in effect, a deductible of 
50 percent and you're getting paid one percent, it hardly makes 
sense, I would think in most cases, to buy the insurance.
    Mr. Eckhardt. That's correct. And I think when you look at 
specialty crop growers and NAP insurance in general, whether it 
be for a hay crop for dairy farmers, I mean, if you wanted NAP 
insurance on your hay in 2012, you're already too late, because 
you had to sign up by the 30th of September in 2011 to have 
that crop insured.
    To me, the first step is changing sign up dates. I mean, 
just like Ralph said, to be able to look at the market 
situation just prior to planting or planning to plant and say 
okay, this crop, that crop, going to dropped, but you had to 
buy it or at least sign up for the insurance 6 months ago, kind 
of odd.
    But also, what I would refer to as NAP Plus, where you 
would actually, as an individual grower, choose to buy 
additional insurance, maybe insure it to 65 percent, so you had 
a 35 percent loss, and then you would have indemnification kick 
in, you know. It's $250 per crop, per county, up to a maximum 
of three crops. Okay, let's move it to a situation where you 
would pay $500 or maybe a thousand, and you, as an individual, 
would be able to choose that based on your need for protection.
    Mr. Owens. Thanks. Want to move to the labor issue for just 
a minute. I'm curious, from all of the panelists, whether or 
not they would support a program that would provide for the 
allowance of individuals currently in the country, potentially 
illegally in the country, to obtain a work visa? Is that 
something that the farm community would support?
    Mr. Eckhardt. Oh, yes. I mean, for us it would be a--I 
don't have any migrant workers right now. My work force is 
almost entirely locals and especially teenagers.
    You know, we're just holding our breath on how we're going 
to farm in 2012 if I can't hire my teenagers. First of all, 
we're one of the few employment opportunities for them. But the 
biggest concern for us always is the fact that they're in 
school until the end of June. They go back to school at the end 
of August or early September, and what do I do to get crops 
planted and what do I do in the fall to finish the harvest?
    And having some--a few people available just for that short 
period of time would be extremely helpful. Just like the H-2A 
doesn't work. I mean, we need something that will work, and I 
think anything you can do to help us with that.
    Mr. Owens. Mr. Child, looks like you have a comment.
    Mr. Child. Yes, yes, I would like--I would like to speak in 
favor of that type of movement. I'm not talking about a fast 
track to citizenship. Most of these people do not care to 
become citizens of the U.S., or if they do, that option could 
be there. But I don't think it should be fast tracked. It's not 
what the workers are interested in, nor is it politically going 
to happen.
    But we do have a trained work force in the country, and to 
start all over with new workers just to have a legal status 
would also be burdensome. I think there should be a provision 
to give these people that are currently here, illegally or not, 
the opportunity to stay and work in the country. They are doing 
the jobs that most Americans choose not to do.
    Mr. Owens. I'd like to go back to Mr. Ooms' statement, we 
either import labor or we import food. I yield back, Mr. 
Chairman.
    Mr. Osborn. Just a quick----
    The Chairman. The gentlemen, may finish. Yes, please.
    Mr. Osborn. Quick comment on that. One, the government 
doesn't have the infrastructure to do the paperwork for a new 
work force, if you kicked everybody out. So to have the ability 
to get legal working papers for people who are already in the 
country, who are already working would be an excellent thing to 
have.
    Mr. Owens. Thank you very much.
    The Chairman. The gentleman's time has expired. The chair 
now turns to the gentleman from Texas, which should be noted 
for the record, are amazed when they see the number of trees we 
have in Oklahoma in the third district. Mr. Conaway is 
recognized for 5 minutes. And a response before his 5 minutes 
begins.
    Mr. Conaway. Exactly. I actually--I gave the previous 
Chairman, Mr. Goodlatte, a picture of myself standing by the 
city limits signs of the city of No Trees, Texas, so in 
addition to snow this morning, there are even trees in it as 
well.
    Mr. Sullivan, I couldn't help but notice the name Isabella 
on, or Isabel, on your pink and white tote that you brought in, 
and much--and then your comments about the debt that we're 
laying on them and the struggles that we have across this 
entire country as to how we hand off the legacy, of the 
American legacy, to her--I'm assuming it's your daughter--to my 
grandchildren. I have seven grandkids, that legacy of debt that 
we are on the path to do that.
    I offered up the last farm bill, 2008, an amendment in 
Committee that would have said if you only get--if your check, 
your maximum check, that you get from the non-crop insurance 
portion of the support system is $100 or less, that you 
wouldn't get it. That the payments would have to be more than 
$100 or we wouldn't pay you.
    And we had a pitched battle in the Committee how cruel that 
was for me to argue that, that $100 was the difference between 
making it and breaking it on a farm. And in your comment, that 
the $30,000 for the Tree Assistance Program, while helpful, had 
you not had it you would still be growing apples today.
    And as we look at these programs, we need to focus on which 
ones--because we can't afford them all, what are those that are 
really the make/break kinds of issues involved. We fought them 
all the way down to $25 a check, so that, if the check is less 
than $25, which it costs USDA $30 to write each check, you 
don't get it.
    We stripped about $6 billion out of the Crop Insurance 
Program over the last couple of years. And I want to know if 
any of you have seen an impact on the private delivery system, 
that I think most of us support, where you've got private folks 
selling the insurance, doing the adjustments and working with 
you on those programs. Have you seen an impact yet from that 
reduction of some $6 billion from the crop insurance side?
    Mr. Osborn. I would just like to talk about the paperwork. 
Doing the--the grape--insuring grapes is, and I don't know 
about other crops, but when my insurance agent comes to talk to 
me about the crop insurance, he--he says what level do you 
want? Do you want 95 percent, 90s all the way down to 60, 50 
percent? And then I say, well, what's it going to cost? He 
goes, well, I don't really know because RMA hasn't really told 
us yet. I have a good idea.
    I mean, 5 years ago, they had no knowledge. Now they sort 
of have an idea, and they'll get up a quote and they'll say, 
here's your quote. And I'll say, okay, I'll take the 75 
percent, that one.
    Well, then that goes to RMA, and then they come back and 
say this is the price. And I only get one shot on that. If I 
don't like the price, then I--I don't get insured, or I have to 
take it. The insurance agents not having a clear picture of 
what the cost of that insurance is going to be is problematic.
    Mr. Sullivan. We're pleased with the Crop Insurance 
Program. USApple worked with RMA and the crop insurance 
providers to work to improve the apple policy. You will have 
some apple growers who say they're not happy with it, of 
course, and there's minor glitches in the system. But I mean, 
overall, it's a very functional program.
    As for how you save $6 billion----
    Mr. Conaway. No, no. We've already done that. I'm just 
saying what impact has that had? Have you seen the impact?
    Mr. Sullivan. Well, no, I have absolutely no idea. I did--
people in Kansas City at the RMA office are a great group of 
individuals. I worked with them and just appreciate the hard 
work that they do at that office. And they're really working 
very, very hard for the growing community.
    It may not seem that way, and you've got a lot of actuarial 
people in there who can do circles with numbers in there. But I 
mean, it's a good group. And I think as you're doing the Crop 
Insurance Program, you've got to get their insight in it. I 
mean, they've got oodles of experience.
    I mean, I want to tell you, yes, we need to be--color of 
the apples, I'm going to tell you that's a green apple versus a 
red apple, and we need to get some of the loss end of it. But 
when it comes to the number ends of it and how stuff is going 
to work on the actuarial thing, you really need to get RMA's 
involvement in there.
    Mr. Conaway. Mr. Eckhardt?
    Mr. Eckhardt. In delivery, I think that the private 
insurance company people have done a reasonably good job, even 
with some of the cuts that we've seen. I still say that our 
biggest issue is the fact that we have--if it's apples, an 
apple--have we got apples or we have grapes.
    But when you come to a diversified farm like my own, where 
we may have close to 30 crops or those people who are growing 
nontraditional crops like hops or, here in the Northeast, 
arugula or Belgian endive or the list just starts--goes from A 
to Z, arugula to zucchini, if you want to call it that.
    It's just one of the issues that perhaps the best people 
that have the best knowledge of the crops grown in that area is 
the FSA County Committee, and their input, and growers' input 
into what is a good yield, what's a good price, how can we 
insure this crop, would probably be best, a good way is spend 
some time with those people.
    Mr. Conaway. Thank you. Mr. Chairman.
    The Chairman. The gentleman's time has expired. The chair 
now turns to the gentlelady from Maine, Ms. Pingree, for 5 
minutes.
    Ms. Pingree. Thank you very much, Mr. Chairman.
    Thank you again to another wonderful panel for your 
articulate thoughts. I do want to take a quick aside here so 
this doesn't get lost, is follow-up on one of the dairy things.
    I didn't know before that Representative Gibson had entered 
into a cow milking contest, and I just want to challenge him 
here in his home district. I do have a blue ribbon and a red 
ribbon from a politician's cow milking contest and would ask if 
we can have a little match-up.
    The Chairman. The gauntlet is thrown down.
    Ms. Pingree. Exactly. Maine against New York.
    But thank you very much. As I said, I mentioned earlier 
that one of my interests on the aspects of local food and local 
production in the growing market there, but I also support all 
of my colleagues' questions on crop insurance.
    In the bill that I submitted, we asked the USDA to analyze 
this problem, because I do think there are a lot of good ideas 
and data out there. There are good thoughts from actuaries, 
farmers themselves, and I do think having a whole farm crop 
insurance program--Mr. Eckhardt, you've had a lot of good ideas 
for us today--but it would be very beneficial to many of the 
farmers that I represent. And I think we could resolve this 
issue with a little bit of resources put behind it and then 
provide something that would really be useful to many of the 
farms and the farms that are actually growing today.
    I also represent a lot of organic growers and as many of 
you in the room know, organic growers have to pay a premium, 
but then a reduced price when they recover anything from crop 
insurance, which is completely backwards and upside down. So I 
think there's an opportunity there, particularly, again, with 
this being a fast-growing market and a lot of investment being 
made in organic production today.
    So just to the panel generally, and any of you who have 
thoughts on this, as I mentioned, I'm interested in how we 
spend our resources on programs that allow you to expand in the 
local food market, to use more CSA, farmers' markets.
    Many of you have already talked about some of the areas 
where you're benefiting or using some of the programs that are 
out there. One thing I'm interested in is that there are about 
2,000 Farm-to-School Programs around the country that are 
providing more local foods for schools, also universities and 
hospitals. That's a great market and a local market.
    And I know there are some barriers there, and so I'm 
interested in that, but also just any of your input on these 
particular programs and where we should be directing our 
resources. I'll just open it up to any of you.
    Mr. Osborn. I'm a big proponent of local, just to talk a 
little bit about marketing, marketing to the American consumer, 
that buying local is important, not only from knowing where 
their food is coming from, but what the impact is.
    For every bottle of wine that you buy local, you return 
$10.60--or $10.05 to the local community. When you buy a wine 
from another country, you return 67 cents. So the impact of 
buying local is huge, and I don't think the American public 
really understands that, and I think that's probably the most 
important thing we need to do.
    The other is people have to understand the difference in 
cost. I had a Chilean grape grower in visiting last year, and 
he said to me, said, Scott, how much do you pay your vineyard 
help? And I said, well, I give them $10, $12 an hour plus 
medical benefits. And he sat there and looked at me, and he 
goes, wow, I pay mine, $8 a day.
    I can't compete with $8 a day. And I think the American 
public needs to understand that everybody needs a good living 
and we just can't compete with these people, and they shouldn't 
buy their products that are basically exploiting the workers.
    Ms. Pingree. Thank you for that. And I do think it helps to 
emphasize that this is a--this is a jobs issue, and especially 
in many of our local communities and certainly an economic 
benefit, so thank you for that. Go ahead.
    Mr. Child. One comment on encouraging local marketing: The 
State Specialty Crop Block Grants are a good avenue for that.
    In New York State, over the past few years, approximately 
20 percent of that block grant money has gone into marketing 
and promotion, much of which is on a, probably, a local type 
scale. It also has helped fund improvements at the Hunts Point 
Terminal market in New York City for those producers that 
choose to market there. So that is one approach that the 
Federal Government can help on that line.
    Mr. Eckhardt. And the research for the nutrition portion of 
it, especially when we talk about School Lunch Program, as we 
try to get more local products into our schools, collaborating 
with people so that we can use products. An apple is an apple 
from--if your school is right here locally and you produce 
apples locally, they should be able to use those local apples.
    The Vegetable Growers Association, along with several other 
groups, are trying to make cookies that go into School Lunch 
Programs. How do you make butternut squash into a really good 
nutritious cookie that kids want to eat? Like, you put 
chocolate chips in it.
    But the idea is that we try to come to these research 
things to help with School Lunch Programs and what makes 
children want to eat nutritious things. They have to taste 
good, they have to look good, they have to be good for them.
    Ms. Pingree. Okay. Thank you. I'm out of time, but thank 
you very much.
    The Chairman. The gentlelady's time has expired. We now 
turn for the final 5 minutes allotment to the gentleman from 
New York, Mr. Gibson.
    Mr. Gibson. Well, thanks, Mr. Chairman, and I thank the 
panel.
    It's just been very detailed, a productive testimony. I 
also want to take the opportunity on behalf of my colleague, 
Bill Owens, to thank our hosts here today, that the North 
Country Community College, very proud of this institution. 
Indeed, number one in the state, 22 in the nation.
    A few comments, and then I'll throw out the questions for 
the panelists. But it's certainly some discussion here this 
morning about our situation with deficit and debt, and I keenly 
appreciate what has been communicated this morning.
    It's so important, though, that we take a comprehensive 
approach to this, a thoughtful comprehensive approach, as we go 
about that very serious question in recognizing the fact that, 
even in the last 5 years there have already been significant 
savings in this area. And the fact that when you look at it in 
total outlays, you're talking \1/2\ of 1 percent of outlays 
into a sector of our economy that's so vitally important.
    Absolutely, we need to scrutinize every single program to 
make sure we're doing what's right, but we also recognize no 
farms, no food. We need to get this right or we're going to end 
up growing food overseas. So certainly appreciate that's not to 
negate anything that's been said here today, but just that how 
important it is we get that balance right.
    I want to make a few comments. This testimony, I deeply 
appreciate all that was communicated here.
    Disaster relief: we were hit very badly by a storm, 
including up here in the North Country, in August. And having 
the Emergency Conservation Program, the Emergency Watershed 
Program available to us, it took some fight to get that funding 
there, but it helped us in terms of debris removal, money for 
fences, for reimbursement there, and cleaning out streams.
    And Mr. Chairman, just say that going forward, I think it's 
important we budget for this because this was a situation we 
were at zero balance and it took us a couple of months to fight 
our way to get that money available. As we think about this 
bill, that we think about paying that forward, in making sure 
that those programs are available to us.
    But we also know that even after that assistance was 
available, we ran up against this insurance, so no farmer was 
made whole. And you know, Bill Owens put a marker down that we 
should pick up and continue to work, and he said, well, what 
would that template look like?
    And I've got here today a couple folks who work on my ag 
advisory panel who are also part of the New York Farm Bureau, 
Julie Suarez and Eric Ooms, and I'd ask that we think about is 
there some way that New York could work on a proposal that may 
flesh this out in greater detail, that we can get into the 
national narrative. Something to think about. Certainly, I have 
no tasking authority over you, but just to say that maybe we 
can work together on that to provide a recommendation.
    The next thing is, Mr. Eckhardt mentioned that NRCS, he was 
talking about the EQIP Program and that he thought it may be 
administered in the FSA. Mr. Chairman, that I just want to tell 
you that I move all about the 137 towns in my district. I do 
hear that quite often.
    I just want to submit it, that I want to reinforce and 
affiliate myself with the remarks of Mr. Eckhardt. And 
something to think about, it's really just a common sense 
approach, and recognize that this is looked at differently in 
different parts of the country. But here, we like to have our 
foot soldiers out and working issues, and then the folks who 
are helping facilitate, those are the ones who are helping with 
the paperwork. And that's sort of the view here in upstate New 
York as it relates to how we delineate duties.
    I might also say that it might be worth looking at, we're 
talking about bureaucratic reorganization, that we also 
consider the labor issue that we've talked about so much. And I 
know, Mr. Sullivan, we worked with you, you've come down to 
D.C. I appreciate that. We've worked with Mr. Owens, the New 
York delegation, as we try to sort through this. I wonder if 
that program, H-2A, isn't better administered in the USDA 
instead of the DOL. I think we might have more empathy in 
trying to solve the problem if it was the same folks who come 
from the farming community. Something to think about.
    I want to affiliate myself with remarks of Mr. Eckhardt in 
terms of FSA closings. You know, as the guy who was a soldier 
for many years, I think we should be looking to the 
headquarters in D.C. Before we come out here. You know, we have 
offices that have two people in it, but those two personnel are 
so vitally important to the farmers all throughout the 
community. And as we look to consolidate, I would say are there 
savings first that we can get in the headquarters before we 
come out to where we're actually providing the services?
    Organic was mentioned. I want to say today I had Mike 
Kilpatrick here. He's about 24 years old. He's an incredible 
young man, bright future ahead of him. Took a really hard hit 
in this storm. He represents the future, I think. He's just a 
representative of the future of organic farming in our area.
    We need to support him. And I'd ask Mike Kilpatrick, since 
we weren't able to get you as a witness here today, if you 
could provide your recommendations--I'd ask, Mr. Chairman, if 
we could submit that for the record for consideration.
    [The information referred to is located on p. 894.]
    Mr. Gibson. And I'm sorry about the lengthy statement, but 
I did want to make these points. And I just want to ask the 
panelists for--we haven't gotten on the record yet as far as 
the energy programs and broadband. These are just other areas 
where we can try to help the profitability in extending the 
reach of our agricultural community. I'd ask that--we've had 
some farmers in our district take advantage of the energy 
incentives, none of which were in the USDA, somewhere in 
Treasury, to help with photovoltaic--to help drive down energy 
costs. I'd ask for any kind of comment from the panelists.
    The Chairman. And a prompt answer would be appreciated.
    Mr. Osborn. Which kind of answer? A short one?
    I think there should be more funds devoted to help either 
with tax credits or something for alternative energy. You know, 
at this point in time, I'm considering working out a solar 
project. I'd like to have the whole farm to be solar. But it's 
pretty hard to work out the numbers to come up with $150,000 to 
put in a solar thing. To wait for tax credits down the road is 
problematic.
    I'm working with a leasing company. If I can get the lease 
prices down, below what my cost of utility would be, I would do 
that.
    But I just want to address the FSA closings. In Yates 
County, we're losing our FSA office, and it's going to be 
tragic. There are a lot of Mennonites in our county and these 
folks use horse and buggy, and for them to have to now travel 
25 to 30 miles in a horse and buggy is really problematic. And 
we only have two people in the office, and they're very, very 
effective. And they're very communicative, they stay on top of 
every farmer, and we know exactly what's going on. And to lose 
that is going to be tragic in Yates County.
    Mr. Eckhardt. Just real quick, probably the most important 
crop that every farm in this area of the Northeast produces is 
their children. And without the ability to put these young 
people in a position of responsibility for working on our 
farms, whether they're our own kids or our neighbors', we've 
had three generations of young people that have worked for us: 
Their grandparents, their parents and now the kids are working 
for us. And I think as we go forward, if we're going to have 
anybody take over in agriculture, we've got to have young 
people involved in agriculture, and we can't exclude them. A 14 
year old with a size 15 shoe at 6 1" is not an infant.
    The Chairman. The gentleman's time has expired, the panel's 
time has expired. The chair would like to note that before we 
adjourn it has been my custom to allow the Members whose 
district we are in a closing comment. Not all of us are 
fortunate enough to live in New York State and we are 
scattering to the airports very shortly. Mr. Owens, 2 minutes, 
sir.
    Mr. Owens. Thank you, Mr. Chairman.
    First, again, thank you to all of you for attending today. 
Thank you to the panelists.
    I want to say that from my perspective, I enjoyed listening 
and learning today. This is very important to all of us to 
bring back to Washington. I also want to say as we talk much in 
Washington about buy America, this is the penultimate product 
to be purchased in America. And Mr. Osborn, your suggestion 
that we buy America, particularly in the wine area, where 
you're competing with other countries at a cheaper price, I 
think we all should take that to heart. We also should focus on 
that when we're going into Wal-Mart and other places and we're 
picking up foreign made products.
    Thank you very much, Mr. Chairman.
    The Chairman. The gentleman yields back. I would note to 
all of our good folks participating in the back of the room 
today in this hearing, anyone watching or listening, you can 
visit the House Agricultural Committee's website to learn more 
about the 2012 Farm Bill. In addition, you may submit comments 
to be considered a part of the Committee's field hearing 
record. Your comments must be submitted using the website 
address by May 20, 2012, and that is http://
agriculture.house.gov/farmbill. Look it up on our website.
    Under the rules of the Committee, the record for today's 
hearing will remain open for 30 calendar days to receive 
additional material and supplemental written responses from 
witnesses to any questions posed by a Member.
    This hearing of the Committee on Agriculture is adjourned.
    [Whereupon, at 11:57 a.m. (EST) the Committee was 
adjourned.]


   THE FUTURE OF U.S. FARM POLICY: FORMULATION OF THE 2012 FARM BILL

                              ----------                              


                         FRIDAY, MARCH 23, 2012

                          House of Representatives,
                                  Committee on Agriculture,
                                                     Galesburg, IL.
    The Committee met, pursuant to call, at 9:00 a.m. (CDT), in 
the Gymnasium, Building F, Carl Sandburg College, 2400 Tom L. 
Wilson Boulevard, Galesburg, Illinois, Hon. Frank D. Lucas 
[Chairman of the Committee] presiding.
    Members present: Representatives Lucas, Conaway, Hultgren, 
Schilling, and Boswell.
    Staff present: Bart Fischer, Tamara Hinton, John Porter, 
Matt Schertz, Nicole Scott, Debbie Smith, Pelham Straughn, John 
Konya, Margaret Wetherald, C. Clark Ogilvie, and Caleb 
Crosswhite.

 OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN 
                     CONGRESS FROM OKLAHOMA

    The Chairman. This hearing of the Committee on Agriculture 
entitled, The Future of U.S. Farm Policy: Formulation of the 
2012 Farm Bill, will come to order.
    Good morning and thank you all for joining us today for 
this farm bill field hearing. And I would like to thank 
Congressman Schilling for hosting this hearing here in 
Illinois.
    These field hearings are a continuation of what my friend 
and Ranking Member Collin Peterson started in the spring of 
2010. Today, we will build upon the information we gathered in 
those hearings, as well as 11 farm policy audits we conducted 
this past summer.
    We used those audits as an opportunity to thoroughly 
evaluate farm programs to identify areas where we could improve 
efficiency.
    The field hearings serve a slightly different purpose 
though. Today, we are here to listen.
    I talk to producers all the time back in Oklahoma. I see 
them in the feed store and I meet with them at my town hall 
meetings. And of course I get regular updates from my boss back 
home on the farm. Yes, that is Linda Lucas. But the conditions 
and crops in Oklahoma are different than what you will find 
here in Illinois.
    And one of the reasons we hold field hearings is to get a 
sense of the diversity of agriculture across this great 
country.
    Let me tell you--in some ways, Illinois and my home state 
of Oklahoma could not be more different. Back home--and I say 
this respectfully--back home, we do not measure our soil in 
feet and our rain in inches like you do here. That is called a 
little bit of envy.
    The broad range of agricultural production makes our 
country strong, and it also creates challenges when you are 
trying to write a single farm bill to support so many different 
regions and so many different commodities.
    While each sector has unique concerns when it comes to farm 
policy, I would like to share some of my general goals for the 
next farm bill.
    First and foremost, I want to give producers the tools to 
help you do what you do best, and that is produce the safest, 
most abundant, most affordable food supply in the world.
    To do this, we must develop a farm bill that works for all 
regions and all commodities. We have repeatedly heard that a 
one-size-fits-all program will not work. I can tell you from 
experience that what works here in Illinois will not work as 
well for my constituents in Oklahoma. So the commodity title 
must give producers options so that they can choose the program 
that works best for them.
    I am also committed to providing a strong crop insurance 
program. The Committee has heard loud and clear about the 
importance of crop insurance and we believe it is the 
cornerstone of the safety net. Today, we hope to hear how we 
can improve crop insurance.
    And last, we will work to ensure that producers can 
continue using conservation programs to protect our natural 
resources. I am interested to hear how producers in this area 
of the country use the conservation programs. I am particularly 
curious as to your thoughts on how to simplify the process so 
they are easier for farmers and ranchers to use.
    Beyond those priorities, I know there are a number of 
universal concerns facing agriculture across the country.
    For instance, my producers in Oklahoma are concerned and 
worried about regulations coming down from the Environmental 
Protection Agency and how they must comply with those 
regulations.
    I am also aware that the death tax is creating difficulties 
for farming operations. And I want to hear how these Federal 
policies are affecting producers here.
    Today, we will hear from a selection of producers. 
Unfortunately, we just do not have time to hear from everybody 
who would like to share their perspective. But we have a place 
on our website where you can submit those comments in writing. 
You can visit agriculture.house.gov/farmbill to find that 
place. And you can also find the address on the postcards 
available on the table here.
    As I said before, we do not have an easy road ahead of us. 
But I am confident that by working together, we can craft a 
farm bill that continues to support the success story that 
American agriculture is.
    [The prepared statement of Mr. Lucas follows:]

Prepared Statement of Hon. Frank D. Lucas, a Representative in Congress 
                             from Oklahoma
    Good morning, and thank you all for joining us today for this farm 
bill field hearing. I'd also like to thank Congressman Schilling for 
hosting this hearing here in Illinois.
    These field hearings are a continuation of what my good friend and 
Ranking Member Collin C. Peterson started in the spring of 2010. Today, 
we'll build upon the information we gathered in those hearings, as well 
as the 11 farm policy audits we conducted this past summer.
    We used those audits as an opportunity to thoroughly evaluate farm 
programs to identify areas where we could improve efficiency.
    The field hearings serve a slightly different purpose. Today, we're 
here to listen.
    I talk to producers all the time back in Oklahoma. I see them in 
the feed store and I meet them at my town hall meetings. And of course, 
I get regular updates from my boss back on our ranch. But the 
conditions and crops in Oklahoma are different than what you'll find 
here in Illinois.
    One of the reasons we hold field hearings is to get a sense of the 
diversity of agriculture across this great country.
    Let me tell you--in some ways, Illinois and my home state of 
Oklahoma couldn't be more different. Back home, we don't measure our 
soil in feet and our rain in inches like you do here.
    The broad range of agricultural production makes our country 
strong, but it also creates challenges when we're trying to write a 
single farm bill to support so many different regions and commodities.
    While each sector has unique concerns when it comes to farm policy, 
I'd like to share some of my general goals for the next farm bill.
    First and foremost, I want to give producers the tools to help you 
do what you do best, and that is to produce the safest, most abundant, 
most affordable food supply in the world.
    To do this we must develop a farm bill that works for all regions 
and all commodities. We have repeatedly heard that a one-size-fits-all 
program will not work. I can tell you from experience that what works 
here in Illinois won't work as well for my constituents in Oklahoma.
    So the commodity title must give producers options so that they can 
choose the program that works best for them.
    I also am committed to providing a strong crop insurance program. 
The Committee has heard loud and clear about the importance of crop 
insurance and we believe it is the cornerstone of the safety net. 
Today, we hope to hear how we can improve crop insurance.
    Last, we'll work to ensure that producers can continue using 
conservation programs to protect our natural resources.
    I'm interested to hear how producers in this area of the country 
use the conservation programs. I'm particularly curious as to your 
thoughts on how to simplify that process so they are easier for our 
farmers and ranchers to use.
    Beyond those priorities, I know there are a number of universal 
concerns facing agriculture across the country.
    For instance, my producers in Oklahoma are worried about 
regulations coming down from the Environmental Protection Agency (EPA) 
and how they must comply with those regulations.
    I'm also aware that the death tax is creating difficulties for 
farming operations. I want to hear how these Federal policies are 
affecting producers here.
    Today, we'll be hearing from a selection of producers. 
Unfortunately, we just don't have time to hear from everybody who would 
like to share their perspective. But we have a place on our website 
where you can submit those comments in writing.
    You can visit agriculture.house.gov/farmbill to find that place. 
You can also find that address on the postcards available on the table 
here.
    As I said before, we don't have an easy road ahead of us. But I'm 
confident that by working together, we can craft a farm bill that 
continues to support the success story that is American Agriculture.

    The Chairman. And with that, I would like to turn to my 
colleague, my senior Democratic Member at the hearing today, 
for any opening statement that he may offer. The gentleman from 
Iowa, Mr. Boswell.

OPENING STATEMENT OF HON. LEONARD L. BOSWELL, A REPRESENTATIVE 
                     IN CONGRESS FROM IOWA

    Mr. Boswell. Well, thank you, Mr. Chairman, and thank all 
of you for being here. I am not trying to stand in for the 
Ranking Member Collin Peterson, but I am very pleased to be 
here.
    This will probably surprise our Chairman, I do not think so 
though--might embarrass him. But I think we have an excellent 
Chairman of the Agriculture Committee that is committed to 
making it the best we can make it. And I like what he just 
said, I want to repeat it in my own words.
    You know, everybody in this country--everybody in this 
country--has a vested interest in agriculture. We all eat. And 
we are not making more land, we are making a lot more people. 
And I will comment just very briefly, but what we all get, 
whether it is that guy or lady in downtown New York or L.A. or 
Dallas or wherever, is the most plentiful, least expensive, 
safest food in the world. Make no mistake about it. Does not 
seem like it when you go to the grocery store, but that is 
true. Just check it out. So we are all invested in it and we 
ought to be appreciative of that and remember how important it 
is to all of us. And that is something I think we all need to 
be promulgating constantly, so I hope you will do that.
    It is kind of neat for me to be back in Galesburg, it has 
been a long time. I came here one time with a Farm Progress 
Show. Now that takes you back a few years, some of you. Was 
anybody here at the Farm Progress Show? Well, I had just gotten 
out of spending a career in the military, come home and started 
farming again and I bought me a motorcycle, and I brought about 
six guys on motorcycles to Galesburg and we arrived--it has 
been a number of years ago--pouring down rain and muddy on the 
grounds and everything. And here I am on a two-wheeler trying 
to get around and find a place to park where when you put the 
kickstand down, it will not just sink.
    [Laughter.]
    Mr. Boswell. But so much for that. It was a good experience 
and I feel some real affection for it and you do a lot of 
things here like we do, just a little bit west of here.
    Chairman Lucas made a comment about his soils and so on 
from Oklahoma. Well, I spent a lot of time at Fort Sill, not 
too far from him--a lot of time. I have some stewardship over 
some land. We measure topsoil by the inch as well. So everybody 
thinks Iowa's topsoil it is feet. Well, some places it is and 
some places it is here in Illinois, but not everywhere.
    The farm program is very important to us and I am just 
going to close here and just say this: there is room for 
everybody in this. You know, I was in the state legislature on 
the Agriculture Committee and got very involved. I came back to 
do what I love to do and that is agriculture. We have gone 
through a time when there is production agriculture, 
sustainable agriculture, organic agriculture, so on. And there 
has been a lot of head bumping over it. Let me tell you this is 
what I think, I think there is room for all of us. We can stop 
that, we do not need to do that. The farmers' markets are 
growing like crazy, people want that. The population growth is 
unbelievable. We are going to be stressed to be able to provide 
food and fiber for the people of this world. There is room for 
all of us. So let's work together and let's make it the best we 
can.
    And I certainly agree that the safety net is what we are 
probably going to be focused on. I think I will be interested 
in what you have to say so that we understand. You know, 
Federal crop insurance is available, affordable and so on, and 
make it work.
    So I am just very pleased to be here, Mr. Chairman, I want 
to thank you. I am glad to be in my colleague's district, I 
appreciate it. I am anxious to hear what you have to tell us so 
we can do the best we can with the leadership of the Chairman 
here to bring forth a farm bill.
    The Chairman. The gentleman from Iowa yields back his time 
and I appreciate those very thoughtful words, and we now turn, 
as is my custom when we are doing a field hearing, to the 
Member who represents the district that we are in. You would be 
impressed at how hard and diligently he worked to help make 
sure that the Agriculture Committee came to his district, the 
gentleman from Illinois, Mr. Schilling is recognized.

OPENING STATEMENT OF HON. ROBERT T. SCHILLING, A REPRESENTATIVE 
                   IN CONGRESS FROM ILLINOIS

    Mr. Schilling. Thank you, Mr. Chairman.
    First, I would like to start out, this week the Illinois ag 
community lost a very special woman and I wanted to dedicate 
this opening statement to her. Maralee Johnson was an effective 
voice for the Illinois Beef Association. Her kindness and 
passion were always appreciated and her efforts for beef 
producers across this state will be remembered. Our strongest 
thoughts and prayers go out to her family. And with that, this 
one is for Maralee.
    First, I want to thank Chairman Lucas for holding this farm 
bill hearing. I also want to welcome my colleagues, Congressmen 
Boswell, Conaway and Hultgren. Thank you for coming and welcome 
to the Illinois 17th District.
    This district is blessed with some of the most fruitful and 
productive soil in the world. In fact, when it comes to the 
value of sales for corn and soybeans, we rank 14th out of 435 
Congressional Districts. We host the Farm Progress Show every 
other year. We are home to ag manufacturers John Deere and 
Caterpillar and are among the leading districts for livestock 
in the country. In short, we are an agricultural powerhouse.
    I cannot tell you how much our community appreciates the 
opportunity to be one of four locations throughout this great 
nation to discuss the next farm bill. It is good to see that we 
have some friends from Iowa, Indiana, Ohio, Minnesota in 
attendance with us today as well.
    Before we get started, I also want to thank the fine folks 
at Carl Sandburg College for opening up their doors for this 
event. I especially want to thank President Lori Sundberg, 
Julie Van Fleet, Bill Gaither, Aaron Frey, Robin DeMott, Mary 
Ann Nelson, Anthony Law of the campus security, Bobby 
Frederick, my ag specialist and the countless others who helped 
set this up. Many thanks to the Knox County Sheriff's 
Department and the Galesburg Police Department as well.
    I also want to recognize a great leader in the community, 
the Mayor of Galesburg, Mayor Sal Garza. We really appreciate 
all the efforts that he helps with our community to bring and 
liven up our economics here.
    Again, I want to welcome all of our farmers, producers, 
guests and witnesses here today. I have the honor of 
representing Deb Moore from Roseville, Dave Erickson from 
Altona, Gary Asay from Osco and Terry Davis from Roseville, all 
of whom are here to testify today.
    I look forward to hearing from all of you about the 2008 
Farm Bill, how it has been effective and how we can improve the 
future or ag.
    Before we get to the testimony, I wand to address the issue 
of bipartisanship and offer insight to the question that almost 
all of you are asking. Can Congress get a farm bill done this 
year? In the spirit of Mark Twain, reports of the death of 
bipartisanship have been greatly exaggerated. After all, it was 
this Congress that passed the three free trade agreements, 
repealed the onerous 1099 tax reporting requirement, passed the 
VOW to Hire Heroes veterans jobs bill, passed the STOCK Act, 
passed a 4 year FAA reauthorization, and passed a defense bill 
that will promote workload and jobs for Rock Island Arsenal. 
All of these laws were bipartisan, I might add.
    Do we have our work cut out for us? Absolutely. But this is 
a bipartisan Committee and we will work together to produce a 
farm bill that works great for America. We have an economy 
struggling to regain its footing and a budget crisis to solve. 
Fortunately, ag has been very, very bright for us; yet, we know 
the economic production and cycles in ag require us to plan for 
the future.
    At $136.3 billion in 2011, ag exports have never been 
higher, and according to the USDA, for every $1 billion in ag 
exports, that provides for 8,400 related jobs for men and women 
here and across America. That is why it is so important that 
the next farm bill continue to allow producers to do what they 
do best. At a time when rural populations are looking for new 
ways to grow our communities, our voice must be stronger than 
ever and I believe this Committee is up to the task.
    With that, Mr. Chairman, I look forward to listening to our 
farm panels today. I yield back.
    [The prepared statement of Mr. Schilling follows:]

  Prepared Statement of Hon. Robert T. Schilling, a Representative in 
                         Congress from Illinois
    Thank you Mr. Chairman.
    The Illinois Ag Community lost a very special woman this week and I 
want to dedicate this opening statement to her.
    Maralee Johnson was an effective voice for the Illinois Beef 
Association. Her kindness and passion were always appreciated--and her 
efforts for beef producers across this state will be remembered.
    Our strongest thoughts and prayers go to her family. And with that, 
this one is for Maralee.
    I want to thank Chairman Lucas for holding this farm bill hearing. 
I also want to welcome my colleagues, Congressmen, Boswell, Conaway and 
Hultgren.
    Thank you for coming and welcome to Illinois' 17th District.
    This District is blessed with some of the most fruitful and 
productive soil in the world. In fact, when it comes to the value of 
sales of corn and soybeans, we rank 14th out of 435 Congressional 
Districts.
    We host the Farm Progress Show every other year, are home to ag 
manufacturers John Deere and CATERPILLAR, and are among the leading 
districts for livestock in the country.

    In short, we are an agricultural powerhouse.

    I can't tell you how much this community appreciates the 
opportunity to be one of the four locations throughout this great 
nation to discuss the next farm bill. It's good to see that we have 
some friends from Iowa, Indiana, Ohio and Minnesota in attendance today 
as well.
    Before we get started, I also want to thank the fine folks of Carl 
Sandburg College for opening up their doors for this event. I 
especially want to thank:

    President Lori Sundberg,

    Julie Van Fleet,

    Bill Gaither,

    Aaron Frey,

    Robin DeMott,

    Mary Ann Nelson,

    Anthony Law of Campus Security,

    And countless others who helped set up this great venue.

    Many thanks to the Knox County Sheriff's Department and the 
Galesburg Police Department as well.
    Again, I want to welcome all of our farmers, producers, guests and 
witnesses here today.
    I have the honor of representing Deb Moore from Roseville, Dave 
Erickson from Altona, Gary Asay from Osco and Terry Davis from 
Roseville--all of whom are here to testify today.
    I look forward to hearing from all of you about how the 2008 Farm 
Bill has been working and how we can improve things for the future of 
Agriculture.
    Before we get to testimony, I want to address the issue of 
bipartisanship and offer insight to the question that almost all of you 
are asking . . . ``Can Congress get a farm bill done this year?''
    In the spirit of Mark Twain, reports of the death of bipartisanship 
have been greatly exaggerated.
    After all, It was THIS Congress that:

    passed the THREE FREE TRADE AGREEMENTS,

    repealed the onerous 1099 tax reporting requirement,

    passed the VOW to Hire Heroes veterans' jobs bill,

    passed the STOCK ACT,

    passed a FOUR-YEAR FAA reauthorization

    and passed a Defense bill that will promote workload and jobs at 
    the Rock Island Arsenal.

    All of these laws were bipartisan I might add.
    Do we have our work cut out for us? Absolutely. But this is a 
bipartisan Committee and we will work together to produce a farm bill 
that works for America.
    We have an economy struggling to regain its footing, and a budget 
crisis to solve. Fortunately agriculture has been a very bright spot, 
yet we know the economic and production cycles in agriculture require 
us to plan carefully for the future.
    At $136.3 billion dollars in 2011--ag exports have never been 
higher. And according to USDA--every $1 billion in AG exports provides 
for 8,400 related jobs for men and women here in America.
    That is why it is so important that the next farm bill continue to 
allow producers to do what they do best.
    At a time when rural populations are looking for new ways to grow 
our communities, our voice must be stronger than ever and I believe 
this Committee is up to the task.
    With that Mr. Chairman, I look forward to listening to our farm 
panels today.

    The Chairman. Thank you, Congressman Schilling, for 
yielding back.
    The chair would request that other Members submit their 
opening statements for the record so the witnesses may begin 
their testimony, and to ensure there is ample time for 
questions.
    [The prepared statement of Mr. Peterson follows:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    As we approach the current farm bill's expiration date, we will 
hear directly from farmers and ranchers across the country on the 
issues they face every day.
    Writing a new farm bill will not be an easy task. Everybody is 
being asked to do more with less, and, it seems to me, that agriculture 
is being asked to cut even more than others. I'm particularly troubled 
by the House Republican budget released this week which, in addition to 
massive cuts to agriculture and nutrition programs, includes 
reconciliation instructions asking our Committee to make unrealistic 
budget cuts. I just don't see how we can make these cuts and then turn 
around to write a strong farm bill.
    The agriculture economy is perhaps the only part of our nation's 
economy that has remained strong over the last few years. It is amazing 
to me that those outside of agriculture are trying to mess this up.
    Passing a farm bill this year or even next year if it comes to 
that, is going to be incredibly difficult. We need producers of all 
regions, representing all commodities, to work together to get a new 
farm bill across the finish line.
    I thank the witnesses for making the time to testify hear today.

    The Chairman. I would like to welcome our first panel of 
witnesses to the table--Mr. David C. Erickson, corn and soybean 
producer, Altona, Illinois; Ms. Deborah L. Moore, corn, 
soybean, and beef producer, Roseville Illinois; Mr. John Mages, 
corn and soybean producer, Belgrade, Minnesota; Mr. Blake 
Gerard, rice, soybean, wheat, and corn producer, McClure, 
Illinois; and Mr. Craig Adams, corn, soybean, wheat, hay, and 
beef producer--you are a busy man--Leesburg, Ohio.
    Mr. Erickson, please begin when you are ready.

  STATEMENT OF DAVID C. ERICKSON, CORN AND SOYBEAN PRODUCER, 
                           ALTONA, IL

    Mr. Erickson. Thank you. My name is David Erickson, I am a 
Knox County farmer from Altona, Illinois. And as a life long 
resident here in Knox County, I want to welcome the Committee 
and in particular Chairman Lucas, Ranking Member Peterson, all 
the other Members of the Committee. We appreciate your 
commitment to come here to our community for this hearing. And 
in particular, I want to thank Congressman Schilling for his 
persistence in not only serving the district, but in making 
sure that this all-important hearing is here, as well as the 
work of his staff. Thank you very much.
    My wife Nancy and I operate a corn and soybean farming 
operation and a farm management business that serves absentee 
landowners. Our businesses are truly family owned and 
established through the work of the previous two generations of 
our families. We continue to enjoy the involvement of three 
generations of our families in production agriculture and work 
with multi-generations of landowners through our farm 
management business. We are extremely optimistic about the 
future of agriculture.
    I believe that farm businesses should be rewarded for their 
work in the global marketplace and that we need to continue to 
support efforts to open, develop and further expand markets for 
agricultural products and commodities, both domestically and 
globally. The impacts that these products have had here locally 
is beyond question. Agricultural exports support jobs here at 
home and particularly when we add value through enhancing our 
basic commodities.
    I urge Congress to continue to support trade agreements and 
initiatives that provide increased access, improved acceptance 
and fair trade policies for U.S. agriculture. Congress has an 
important job ahead of it.
    As farmers, we protect and enhance our environment because 
we know the importance of sustained rich soil and clean water 
that supports our family and our consuming public. Some current 
conservation programs are over-burdened with rules and 
procedures and do little to impact programs except use up 
limited budget allocations. I urge Congress to consider 
simplifying, consolidating our current conservation programs to 
allow for the most effective use of those funds budgeted for 
these efforts.
    As a taxpayer, I want Congress to cut spending, reduce 
waste and improve results with our investment. I believe that 
the Federal budget deficits must be eliminated and debt 
reduced. I feel strongly that agriculture should do its part to 
help Congress in this endeavor.
    I know that much of the discussion to date about the farm 
bill has led to proposed elimination of direct payments. While 
I understand the need for change, I also must report how direct 
payments in our farming operations are beneficial and 
effective. Without the assistance of any other government 
programs, we invested these direct payments back into our 
farming operation to reduce soil erosion, improve drainage, 
limit nutrient runoff and manage price risk. We made effective 
use of those dollars and taxpayers reap the rewards with a 
safe, abundant, low cost supply of food and fiber.
    I understand the importance of Federal crop insurance as a 
part of risk management and I know that too much emphasis also 
on any single approach can be dangerous. Federal crop insurance 
should provide risk coverage for crop losses but not for poor 
marketing and overall risk management. Farming is a risky 
business. We need tools to help us manage these risks but those 
risks can never be totally eliminated.
    I urge you to consider streamlining farm program paperwork. 
A vast majority of Illinois farmland is owned by someone other 
than who physically operates it. Absentee landowners are 
reaching the end of their desire to comply with all the 
requirements of farm program participation. Their frustration 
will only lead to lower participation and the increased 
likelihood of cash only rental arrangements that do nothing but 
compound the risk already that farmers must bear.
    I encourage your continued work to complete the farm bill 
legislation this year and to make it a 5 year program that does 
not rely on temporary extensions. No aspect of the commodity 
title fits all operations or regions, but I trust you to work 
diligently to craft legislation that provides flexibility for 
the inherent diversity that encompasses U.S. agriculture.
    I thank you for the privilege to address the Committee and 
appreciate the great efforts involved in bringing this hearing 
to my home.
    Thank you.
    [The prepared statement or Mr. Erickson follows:]

  Prepared Statement of David C. Erickson, Corn and Soybean Producer, 
                               Altona, IL
    My name is David C. Erickson. I am a Knox County farmer from 
Altona, Illinois. As a life-long Knox County resident, I want to extend 
a warm welcome and sincere appreciation to Chairman Lucas, Ranking 
Member Peterson and all the Members of the Committee for bringing this 
most important Field Hearing to Galesburg. I applaud your efforts to 
seek input from constituents on the important issues facing agriculture 
policy and your willingness to bring the inner workings of Congress to 
the people in their home communities. I also want to recognize the 
efforts of Congressman Schilling and his staff for their persistence in 
serving the 17th Congressional District in Illinois and in hosting the 
Committee in the District for this important Farm Policy Hearing. I am 
very proud of Knox County and hope that you will find the people here 
friendly, engaged and thoughtful just as I have.
    My wife, Nancy, and I operate a corn and soybean farming operation 
and manage farmland for absentee landowners with our farm management 
business. Our businesses are truly family owned and were established 
through the work of the prior two generations in our families. We 
continue to enjoy the involvement of three generations of our families 
in production agriculture and work with multiple generations of active 
landowner participation in our farm management business. We are 
extremely optimistic about the future of the agriculture industry and 
are confident in the ability of the agriculture industry to support a 
significant portion of our local, state and national economy.
    After college and a 4 year experience as a high school and 
community college teacher, I began to farm full-time in 1984 with the 
1985 crop year being my first full season. Production and prices have 
certainly changed considerable from that era of sub $2 corn, sub $5 
soybeans and idled acres (set aside) of 10% to 20% very common. Through 
many years of involvement in leadership positions in agriculture 
organizations, I have had the opportunity to participate in Farm Policy 
discussions and have been actively involved with farm bills since 1990. 
The change from one farm bill to the next has been mostly evolutionary, 
but looks rather revolutionary from a rearview perspective. I enjoy 
farm policy discussions and still find the process as interesting as it 
was to me that first time.
    I believe that farm businesses should be rewarded for their work in 
the global marketplace. I continue to support the efforts to open, 
develop and further expand markets for all agriculture commodities both 
domestically and globally. I know that historical efforts to limit 
production to improve prices only hurt U.S. production capabilities and 
encouraged our competitors. I have no doubt that through research, 
development and challenging competition, farmers will meet the growing 
needs and tastes of the world population. We are a country of many 
resources and our ability to effectively use those resources will be 
paramount to our future and that of our neighbors throughout the world. 
Agricultural exports support jobs here at home particularly when we add 
value to those basic commodities through processing and enhancements. 
U.S. agriculture must be allowed to participate in the growing global 
marketplace. I urge Congress to continue to support trade agreements 
and initiatives that provide increased access, improved acceptance and 
fair trade policies for U.S. agriculture products and commodities.
    Congress must limit unnecessary and burdensome regulations that 
increase costs, reduce productivity and decrease opportunities for 
current and future generations. Something as simple as protecting young 
people from the threat of workplace accidents or abusive working 
conditions can lead to over-regulation that sacrifices developing a 
strong work ethic in our youth. Young people must be allowed to learn 
how to work and work safely or we risk losing an effective, motivated 
workforce in future generations. Work on the family farm is rewarding 
and builds life lessons that lead to future successes for young people. 
Employers have long recognized the strong work ethic of young people 
from rural areas as a positive skill for future employees. Regulations 
protect us in everyday life, but when overused, serve no purpose to a 
productive society.
    We must be prudent stewards of our natural resources. Farmers 
protect and enhance our environment, because they know the importance 
of sustaining the rich soil and clean water that supports their family 
and the consuming public. I feel that conservation programs are 
important to the farm policy decisions that we make. Some current 
conservation programs are overburdened with rules, procedures and 
standards that do little to impact the programs except to use up 
limited budget allocations. Congress must not lose sight of the 
positive impact that past voluntary incentive conservation programs 
have provided. I urge Congress to consider simplifying and 
consolidating current conservation programs to allow for the most 
effective use of funds budgeted to these efforts.
    As a taxpayer, I want Congress to cut spending, reduce waste and 
improve results with our investment. I believe that Federal budget 
deficits must be eliminated and debt reduced. I feel strongly that 
agriculture should do its part to help Congress achieve those goals.
    I know that much of the discussion to date about the new farm bill 
has lead to the proposed elimination of direct payments. While I 
understand the need for change, I must also report to you how direct 
payments in our farming operations were beneficial and cost effective. 
As farmers and farmland owners, we used those payments to implement 
conservation plans, develop needed grassed waterways, utilize grid soil 
sampling to manage nutrient use, invest in equipment upgrades for 
conservation and no-till farming while also developing risk management 
marketing practices. Without the assistance of any other programs, we 
invested these direct payments back into our operation to reduce soil 
erosion, improve drainage, limit nutrient run-off and manage price 
risk. We made effective use of those dollars and taxpayers reap the 
rewards of a safe, abundant, low cost supply of food and fiber.
    A reasonable safety net must still be a part of the farm bill to 
ensure that production agriculture can withstand the inevitable 
variability in prices and production, neither of which are in our 
complete control. I understand the importance of Federal Crop Insurance 
as a part of risk management, but I also know that too much emphasis on 
any single approach to risk management is dangerous. We have not used 
Federal Crop Insurance because the associated cost has not calculated 
into a sound business decision for us. We have worked to improve our 
financial stability, we are fortunate to have long term relationships 
for land rental and our environment has produced fairly consistent 
yields. There may have been times when we might have received insurance 
payments, but those payments would pale in comparison to the 
accumulated cost of premiums over the years. Federal Crop Insurance 
should provide risk coverage for crop losses, but not for poor 
marketing and overall risk management. Farming is a risky business 
subject to weather, price, political, trade, speculation and other 
influencing factors. We need tools to help us manage these risks, but 
those risks can never be nor should be totally eliminated.
    I urge you to consider streamlining farm program paperwork and the 
near endless amount of information that must be provided. A vast 
majority of Illinois farmland is owned by someone other than who 
physically operates the land. Absentee landowners are reaching the end 
of their desire to comply with all of the requirements for farm program 
participation. Their frustration will only lead to lower participation 
or increase the likelihood of cash only rental arrangements which only 
compounds the risk that farmers must bear.
    I encourage your continued work to complete the farm bill 
legislation this year and to make it a 5 year program that does not 
rely on a temporary extension. All the programs contained within the 
legislation must have the ability to plan for the future and know that 
a multi-year farm bill is the key to that confidence. No aspect of the 
commodity title fits all operations or regions. I trust you to work 
diligently to craft legislation which provides flexibility for the 
inherit diversity that encompasses U.S. agriculture.
    I thank you for the privilege to address the Committee today and 
appreciate the great efforts required to bring this important hearing 
to my home.

    The Chairman. Thank you, Mr. Erickson.
    Ms. Moore, you may begin when you're ready.

    STATEMENT OF DEBORAH L. MOORE, CORN, SOYBEAN, AND BEEF 
                    PRODUCER, ROSEVILLE, IL

    Ms. Moore. Good morning. I would like to start by thanking 
Chairman Lucas, Congressman Peterson, Congressman Schilling, 
and the other Members of the Committee for the opportunity to 
testify here today.
    My name is Deb Moore. I farm near Roseville in western 
Illinois with my husband, Ron, and his brother, Larry. We farm 
about 2,000 acres of corn and soybeans and have a beef cattle 
operation.
    I thank you for the opportunity to talk about the value and 
importance of farm programs to operations like ours. For more 
than 30 years, we have been active family farmers who are 
concerned about caring for our land and sharing our farm story. 
I was actually born and raised in Chicago suburbs and moved to 
the farm after marrying Ron, who is a third generation Warren 
County farmer.
    Farmers like us face many challenges and opportunities in 
today's global marketplace. We must continue to become more 
efficient and also manage more risk. As crop prices have 
increased over the last couple of years, so have expenses. We 
must find ways collectively to manage these risks.
    From 2010 to 2011, our income increased 50 percent but our 
expenses increased 58 percent. Our major expenses each year are 
cash rent, fertilizer, seed and crop protectants. All of these 
have doubled in cost over the last few years. Last year, we 
purchased all of our farm inputs for our 2012 crop, a full year 
before that crop will need to be harvested.
    Another major challenge we face is educating consumers 
about agriculture and the importance of our industry to food 
production and the economic well-being of our country. I am 
involved with Ag in the Classroom programs and Illinois Farm 
Families.
    Illinois Farm Families invited Chicago moms to have their 
questions about food and farming answered by Illinois farmers. 
After making their own judgment about our methods and 
procedures, they share their experience using social media.
    I share this information with you because it is important 
for you to know as we educate consumers about agriculture, they 
gain a better understanding of why it is important for tax 
dollars to be used for agriculture. When consumers see for 
themselves how we care for our animals, the land, the 
environment, and gain a better understanding of how agriculture 
bolsters the national economy, we see more support for U.S. 
agriculture in the Federal budget.
    My family believes that farm programs play an important 
role in underpinning the strength of the farm economy, which 
supports the overall U.S. economy. The importance of an 
effective safety net for farm income has grown with the rise in 
cost of farm inputs. We recognize that in the present budget 
environment, farm programs are a target of interest from either 
groups that oppose them in principle or who want to use those 
funds for other projects.
    Let me review five of the farm bill titles and my position:
    In the commodity title, we support risk management 
proposals and other programs that enable us to better manage 
risk, maintain planting flexibility, avoid restructuring of 
existing crop insurance programs, and are compliant with 
current U.S. WTO commitments.
    We use Federal crop insurance, marketing loans, futures and 
options, hedge-to-arrive contracts to protect our financial 
investment in times of extreme volatility of commodity prices 
and input costs.
    Let me also add that credit for new farmers is important to 
the future of agriculture. With the expenses we face, it would 
be very difficult for a new farmer to secure enough credit to 
take over an operation from an existing farmer.
    In conservation, we support practices on working land. We 
would like to reduce the acreage cap on CRP in order to achieve 
budget savings and allow U.S. producers to respond to growing 
demands.
    Conservation projects that protect the environment are 
extremely important to farmers. Our farm is 30 percent no-till, 
70 percent minimum-till.
    We have relied on cost share programs that reduce erosion 
through stream bank restoration, CRP waterways and dry dams. 
But there are not enough resources to do all the necessary 
work.
    In energy, we support reauthorization and funding for 
Biodiesel Fuel Education Program and Biobased Market Program 
and would like to see reauthorization of the Bioenergy Program 
for Advanced Fuel.
    In research, we would like to see the Agriculture & Food 
Research Initiative reauthorized and funding maintained for 
research at land-grant universities to help us better manage 
production challenges.
    For trade, we need reauthorization and funding for the 
Foreign Market Development Program and the Market Access 
Program and continue Food for Education and food aid programs.
    Again, let me emphasize that I strongly support these and 
other titles be part of the 2012 Farm Bill, including support 
for commodity programs, conservation, research, energy, export 
promotion and food assistance programs.
    I thank you very much.
    [The prepared statement of Ms. Moore follows:]

    Prepared Statement of Deborah L. Moore, Corn, Soybean, and Beef 
                        Producer, Roseville, IL
    Good morning. I would like to start by thanking Chairman Lucas, 
Congressman Peterson, Congressman Schilling, and other Members of the 
Committee for the opportunity to testify here today.
    My name is Deb Moore. I farm near Roseville in western Illinois 
with my husband, Ron, and his brother, Larry. We have about 2,000 acres 
of corn and soybeans and a feeder cattle operation with 200 acres of 
pasture. I am a member of the Illinois Soybean Association and the 
Illinois Farm Bureau. Ron and I are also members of the corn and beef 
associations.
    I want to thank you for the opportunity to be here today to talk 
about the value and importance of farm programs to modern U.S. 
agriculture operations like ours. For more than 30 years, we have been 
active family farmers who are concerned about both caring for the land 
and sharing the farm story with the public. I was actually born and 
raised in suburban Chicago and moved to the farm after marrying Ron, 
who is a third generation Warren County farmer. Both of his 
grandfathers farmed in Warren County. We like to tell our sons' friends 
that there are more steers per square mile than there are people in 
Section 5 of Roseville Township.
    Farmers like us face many challenges and opportunities in today's 
global marketplace. As we continue to become more efficient and grow 
food for the world on the same number of acres, we must be innovative 
and also manage more risk. As crop prices have increased over the last 
couple of years, so have expenses. We must find ways collectively to 
manage such challenges.
    Currently our only income is from the farm. With higher commodity 
prices has come a higher input cost. From 2010 to 2011, our income 
increased 50 percent, but our expenses increased 58 percent. Our major 
expenses each crop year include cash rent, followed by fertilizer, seed 
and crop protectants. Fertilizer expenses have more than doubled in the 
last 4 years, crop protectants costs are up 30 percent, cash rent, seed 
and fuel have doubled in cost over the last few years. I would also add 
that we have not increased our production acres during this time 
either, only the expense per acre of planting the crop. In the fall of 
2011, we purchased our seed, fertilizer and crop protectants for the 
2012 crop, a full year before that crop will be harvested. We pay for 
crop expenses a year ahead to guarantee supply and prices.
    We do what we can to manage the financial risk as much as possible, 
but every year is different. Weather, disease and prices play a major 
role in our profitability. High commodity prices are of absolutely no 
use to us if we lose a crop to extreme weather conditions. One storm 
can wipe out an entire crop and jeopardize a farm in a matter of 
minutes. We have had several wind storms that have taken down buildings 
and flattened our crops. In those situations, we had to run the combine 
in one direction with a reel to harvest most of our crop. We were 
luckier than many other farmers, we still had a crop to harvest but the 
expense increased greatly with added fuel and additional wear on the 
machinery.
    Another major challenge we face is in educating consumers about 
agriculture and the importance of our industry to food production and 
the economic well-being of our country. I taught school when we were 
first married and then stayed home to raise our three sons. I did go 
back to teaching for 8 years while the boys were in college to help pay 
their tuition. My teaching position was eliminated 2 years ago, but I 
still have a passion for teaching others about farming. I am involved 
with the Ag in the Classroom program and have hosted multiple school 
field trips, participated in classroom visits, and hosted urban 
teachers to our farm.
    I also have become involved with Illinois Farm Families, a group 
that focuses on a different way of communicating with consumers than in 
the past. Illinois Farm Families are actively seeking a dialogue with 
urban consumers about food and farming concerns.
    In this last year, Illinois Farm Families invited Chicago-area moms 
to see a variety of farms and get their questions answered. More than 
70 interested moms applied for the program and nine were chosen to 
spend the year touring Illinois farms. I am one of the farm mom 
hostesses spending time with these field moms while they tour our 
farms. Each tour allows the moms to dig into food and farming topics 
and make their own judgments about our methods and performance. After 
the tours, the moms share their experiences with others using social 
media.
    Last summer, my family was one of five Illinois farm families 
featured in an online program where consumers watched a video tour of 
our farm to learn about farming. We know more than 135,000 Illinois 
consumers viewed the farmer videos, many of whom we still communicate 
with through e-newsletters. In June, we will host the field moms for a 
closer look at our family farm.
    I share this information with you because it is important for you 
to know that as we educate consumers about agriculture, they gain a 
better understanding of why it is important for tax dollars to help 
support agriculture. When consumers see for themselves how we care for 
the land, our animals and the environment and gain a better 
understanding of how agriculture bolsters the national economy and 
feeds their own families as well as those around the world, we see more 
support for making sure U.S. agriculture is a wise investment in the 
Federal budget.
    My family believes that farm programs play an important role in 
underpinning the strength of the farm economy which supports the 
overall U.S. economy. The importance of an effective safety net for 
farm income has grown as the rising cost of farm inputs has 
increasingly pressured farm profitability. We recognize that, in the 
current budget environment, farm programs are a target for interests 
that either oppose them in principle or want to fund other priorities. 
I am willing to accept our fair share of budget costs, but in 
proportion with other programs that may be explored for budget cuts. 
Our family supports ways to make farm programs more efficient, 
effective and defensible.
    Let me review five of the farm bill titles and my position:

   Commodity title. We support Risk Management proposals and 
        other programs that enable us to better manage risk, maintain 
        planting flexibility, avoid restructuring of the existing crop 
        insurance program, and are in compliance with current U.S. 
        World Trade Organization (WTO) commitments.

    We use Federal Crop Insurance (Revenue Assurance), hail insurance, 
        market loans, futures and options and Hedge-to-Arrive contracts 
        to protect our financial investment in times of extreme 
        volatility of commodity prices and input costs.

    Our farm usually takes loans out every year for corn and soybean 
        production to help with cash flow. We get our loans through our 
        local Farm Service Agency office and the Commodity Credit 
        Corporation.

    Let me also add that credit for new farmers is important to the 
        future of agriculture. With the expenses we face, it would be 
        very difficult for a new farmer to secure enough credit to take 
        over an operation from an established farmer. Farmers borrow 
        more money each year than most Americans will borrow in a 
        lifetime.

   Conservation title. We support programs for conservation 
        practices on working lands. We would like to reduce the acreage 
        cap on the Conservation Reserve Program (CRP) in order to 
        achieve budget savings and allow U.S. producers to respond to 
        growing demand.

    Conservation projects are extremely important to farmers. We 
        emphasize conservation projects that protect the environment. 
        Our farm is 30 percent no-till and 70 percent minimum till. But 
        there are not enough resources to do all of the necessary work.

    We have relied on the cost share programs available through USDA 
        and the Illinois Department of Agriculture. We have done stream 
        bank restoration to reduce erosion on pasture land and have CRP 
        waterways to reduce field level erosion on 200 acres. We also 
        installed seven dry dams on 140 acres to reduce erosion and 
        improve productivity.

   Energy title. We support reauthorization and funding for the 
        Biodiesel Fuel Education Program and Biobased Market Program 
        and would like to see reauthorization of the Bioenergy Program 
        for Advanced Biofuels.

   Research title. We would like to see the Agriculture & Food 
        Research Initiative (AFRI) reauthorized for competitive 
        research grants and funding maintained for research at land-
        grant universities. I believe that we need to continue 
        investing in research with Illinois universities to advance 
        research that can help us better manage production challenges. 
        We need public funding and researcher support to maintain a 
        comprehensive researchprogram.

   Trade title. We need reauthorization and funding for the 
        Foreign Market Development (FMD) Program at $34.5 million 
        annually and the Market Access Program (MAP) at $200 million 
        annually and continue Food for Education and food aid programs.

    Again, let me emphasize that I strongly support these and other 
titles be part of the 2012 Farm Bill, including support for commodity 
programs, conservation, research, energy, and export promotion and food 
assistance programs.
    That concludes my comments today. I look forward to working with 
you and other Members of the Committee as you write the next farm bill. 
I would be happy to answer any questions you may have. Thank you for 
your time.

    The Chairman. Thank you.
    Mr. Mages, whenever you are prepared, you may begin.

 STATEMENT OF JOHN MAGES, CORN AND SOYBEAN PRODUCER, BELGRADE, 
                               MN

    Mr. Mages. Mr. Chairman, Members of the Committee, I want 
to thank you for letting me testify today. Ranking Member 
Peterson is actually my Congressman in my district in 
Minnesota.
    My name is John Mages and my wife, Cindy, and I farm in 
central Minnesota near Belgrade. We farm 1,200 acres of corn 
and soybeans.
    If I had to sum up my views on the next farm bill, it would 
be as follows:
    Pass a 5 year farm bill this year.
    Give farmers a menu of policy options to choose from.
    Be sure that every one of those options has protection 
against long periods of low prices.
    Do not change the pay limit or AGI rules again.
    And above all, do not do anything to hurt crop insurance.
    We need a 5 year farm bill for the same reason we need 
long-term tax policy. We need to be able to go to the banker 
and be able to make plans for the future.
    Farmers need a choice, because it is obvious to almost 
everyone that you cannot squeeze the same crop into the same 
program and make it work for all crops. If the farm bill does 
not work for all crops, then I think the chances of it passing 
Congress and becoming law are low.
    This past week, I made the rounds on Capitol Hill with 
fellow farmers from seven states growing nearly every crop and 
I want each one of them to have a policy that works for them as 
well as one that works for myself. Whatever options farmers 
have to choose from, there needs to be a mechanism to deal with 
the long-term low prices.
    None of you wants to be in Washington writing emergency 
assistance legislation because the farm bill was not designed 
to handle a financial crisis.
    On pay limits and AGI, the new rules that just came out 
about 2 years ago, I know this sort of thing is cast off as 
being friendly for the family farmer, but these rules are now 
hitting the family farmer. More and more of those advocating 
these kind of rules seem like the real goal is to adjust the 
real farm policy. Now they want to put these rules on crop 
insurance. I doubt any home, business or car owner would want 
his identity means tested or his pay limited because of the 
measure of his loss.
    Finally, do not hurt crop insurance. I know this is the 
mantra these days, but we do need to make sure, for example, 
that revenue programs do not duplicate crop insurance, which 
would hurt us. But supplement it by helping to ease parts of 
the farmer's deductible which can get high in some parts of the 
country, especially if the producer's actual production history 
lags.
    Thank you again for inviting me and I will look forward to 
your questions.
    [The prepared statement of Mr. Mages follows:]

Prepared Statement of John Mages, Corn and Soybean Producer, Belgrade, 
                                   MN
    Chairman Lucas, Ranking Member Peterson, Members of the Committee, 
thank you for this opportunity to appear before the House Agriculture 
Committee to share our views on the 2012 Farm Bill.
    My name is John Mages and I am a corn and soybean farmer from near 
Belgrade, Minnesota in Stearns County. I am also President of the 
Minnesota Corn Growers Association.
    I believe that farm policy designed to support a strong and dynamic 
U.S. agriculture sector is vital. Federal Crop Insurance and the farm 
policies that have been in place for more than a decade have generally 
served this nation and producers well. I am proud to stand by a policy 
that has been under budget for the past 10 years, accounts for only 
about one quarter of one percent of the Federal budget, guarantees 
American consumers the lowest grocery bills, as a percentage of 
disposable income, of any consumer in the world, and constitutes the 
one bright spot in our economy and our nation's balance of trade.
    However, I understand that budget and other pressures may require 
that a new approach be taken in the 2012 Farm Bill and, as such, I 
would like to set out the policy priorities of Minnesota producers like 
me.
    First and foremost, please do no harm to Federal Crop Insurance, 
which should be preserved, protected, and strengthened. We strongly 
oppose any further legislative or administrative cuts to Federal Crop 
Insurance, and we oppose carrying conservation compliance or other 
rules applicable to the farm bill over to this critical risk management 
tool that we as producers help pay for. We also believe that 
improvements to Actual Production History (APH), continued availability 
of enterprise units, and the ability to stack supplemental area-wide 
coverage on top of individual coverage can all work to help erase at 
least a part of a producer's deductible.
    Second, the triggering mechanism under farm policy needs to be 
updated to provide tailored and reliable protection in the event of 
multiple-year low prices such as we experienced in the late 1990s and 
early 2000s. Price protection over multiple years is the main point of 
a farm bill because it is the one thing that Federal Crop Insurance is 
not designed to do. We need price protection under any option a 
producer might be given in the farm bill. If there is not price 
protection and prices collapse, we will see a repeat of what we saw in 
the mid 1980s and late 1990s which is a financial crisis followed by 
very costly and inefficient ad hoc disaster assistance.
    Third, it is apparent that farmers need options in the 2012 Farm 
Bill. It is clear, for example, that revenue programs may work for some 
producers, but not for others. Even among producers who like the idea 
of a revenue program, there is a split on whether it should be done on 
a national, state, crop reporting district, county, or on an on-farm 
level. Within Minnesota alone, there is probably a rough geographic 
line where producers may prefer area wide revenue on one side and on-
farm revenue on the other, while some Minnesota producers may prefer a 
price-based option instead. We think allowing producers to choose from 
options in order to best meet the risks they face on their farms is a 
good approach.
    Whatever options are made available in the 2012 Farm Bill, they 
should be plain and bankable, tailored to losses and, thus, defendable, 
and built to weather prolonged periods of low prices. Toward this end, 
we generally feel that the 2011 Farm Bill proposal that you developed 
last fall met these goals.
    Fourth, since the farm bill options under discussion would only 
kick in to cover actual loss situations, whether revenue or price 
losses, it seems that arbitrary payment limits and means tests for 
producers should be eliminated. It is one thing to limit or means test 
Direct Payments paid on historical bases and yields but it makes no 
sense to do this against revenue or price losses that a farmer sustains 
on his operation. Farm policy is intended to help U.S. producers 
compete against heavily subsidized and protected foreign competitors 
and arbitrary rules frustrate this goal rather than advance it.
    Fifth, we very much need a 5 year farm bill passed into law this 
year. The prospect of having to make plans, secure loans, and plant 
under a short term extension or no law at all is not a good one for 
producers.
    Thank you once again for the opportunity to offer testimony on the 
crafting of the 2012 Farm Bill.

    The Chairman. Absolutely, thank you.
    Mr. Gerard, begin whenever you are ready, sir.

   STATEMENT OF BLAKE GERARD, RICE, SOYBEAN, WHEAT, AND CORN 
                     PRODUCER, McCLURE, IL

    Mr. Gerard. Chairman Lucas, Members of the Committee, good 
morning and thank you for inviting me to testify today.
    The Chairman. Pull your microphone up just a little closer, 
sir. These things seem to be very directional.
    Mr. Gerard. My name is Blake Gerard and I am from Alexander 
County in Illinois, the southernmost county in the State of 
Illinois. I am a rice, soybean, corn and wheat producer. I 
appreciate the opportunity to come here today and give you my 
top five priorities for the 2012 Farm Bill.
    The first of which being I would like to see us pass a 5 
year farm bill this year. We farmers are businessmen and we 
depend on the stability and certainty of long-term farm policy.
    Second, we farmers need a choice of policy options. 
Producers of some crops face different risks than producers of 
other crops. In fact, sometimes producers of the same crop 
coming from different regions of the country face different 
risks. We have an opportunity right now to craft a farm bill 
that will address the risks on the farm. It is not so easy for 
me to go home and craft my risk to match farm policy. The 
proposal that was developed last fall would have worked for all 
producers, from my perspective.
    Third, each farm policy option that we present to producers 
needs to have price protection that will address periods of 
prolonged low prices. This is the very purpose of the 
origination of the farm bill, but what has happened since the 
2008 Farm Bill was enacted, the production costs have increased 
significantly to the point that they are not adequate to 
prevent a financial crisis in the agriculture industry if 
prices were to collapse, such as they did in the late 1990s. 
Target price and loan rates are much too low at this point to 
be relevant. The ACRE program has not worked, as evidenced by 
current participation rates. Direct payments, while they have 
been helpful, cannot respond to a collapse of prices. Along 
with that, crop insurance is not designed to work effectively 
in prolonged periods of low prices.
    Okay, fourth, the farm bill should not change payment 
limitations. We just made major changes in the last farm bill, 
which were not fully implemented up until 2 years ago, and I am 
competing in a global marketplace with competitors that benefit 
from rising subsidies and protectionist tariffs, while at the 
same time funding for my farm bill has decreased to record low 
levels.
    And fifth, I would like to see crop insurance strengthened 
to where it will work equitably for all commodities. 
Fortunately, I can say as a corn and soybean producer that crop 
insurance is working effectively for me. But for my rice 
enterprise, crop insurance has not been working effectively and 
I think we need to put all hands on deck to focus on improving 
crop insurance to where it can work effectively for all 
commodities.
    The bottom line for me is when I look at the farm policy 
options that are on the table today, from my rice enterprise, 
the revenue program totally does not work. My risks on my rice 
enterprise are price risks and production cost risks. I need a 
price-based safety net.
    Then when I analyze it and I step over to my corn and 
soybean production and I look at the options that are on the 
table, I am concerned about the current revenue programs that 
are in place, that are on the table today because there is 
still yet no price-based protection in these programs that are 
offered. In other words, if we get into a period, which I feel 
like we will with the cyclical nature of agriculture, of 
prolonged low prices, the revenue guarantee under the current 
revenue programs that are proposed will fall along with those 
low prices. At that point, we have no safety net. At that 
point, we will have people requesting ad hoc disaster 
legislation, which is not fiscally responsible, it is not fair 
to the American farmer or the American taxpayer.
    So summing it up, let me just say this; I feel like the 
proposal that was put together last fall by this Committee, 
with what you had to work with, the time frame you were working 
in and the funding level that you had to work with, you did a 
very effective job putting a proposal together that will work 
for all producers. And also it saved money, a significant sum 
of money, for the American taxpayers. You offered up a program 
that gave the producers a choice and both choices, the revenue 
program and the price-based program had a price protection 
built into it. I think we are on the right track and I think we 
need to stay on that track.
    I appreciate the opportunity to come here and express my 
beliefs today. Thank you very much.
    [The prepared statement of Mr. Gerard follows:]

  Prepared Statement of Blake Gerard, Rice, Soybean, Wheat, and Corn 
                         Producer, McClure, IL
Introduction
    Chairman Lucas, Ranking Member Peterson, and Members of the 
Committee, thank you for holding this hearing concerning farm policy 
and the 2012 Farm Bill. I appreciate the opportunity to offer testimony 
on farm policy from the perspective of a diversified grain producer.
    My name is Blake Gerard. I raise rice, soybeans, wheat, and corn in 
Alexander and Union counties in southern Illinois and I have been 
farming on my own now for 16 years. I am the fourth generation in my 
family to farm this land and this is my 13th year to farm rice in 
Illinois. I am also co-owner in a seed conditioning facility that does 
contract seed production, conditioning, packaging & warehousing. All of 
our soybeans are raised for seed along with about 75% of our rice. In 
addition to my farm and seed business, I also serve as the commissioner 
for the East Cape Girardeau/Clear Creek Levee & Drainage District, the 
Illinois Crop Improvement Association and am a member of the USA Rice 
Producers' Group Board of Directors.
Importance of Agriculture and Cost-Effective Farm Policy
    U.S. agriculture shares a certain amount of pride for what we do 
for the nation's economy. Agriculture still matters.
    Over the course of the current economic downturn, here is an 
excerpt of what objective sources ranging from the Federal Reserve to 
The Wall Street Journal had to say about what America's farmers and 
ranchers have been doing to help get our nation back on track and 
people back to work:

        ``In 2010, rural America was at the forefront of the economic 
        recovery . . . `[R]ising exports of farm commodities and 
        manufactured goods spurred job growth and income gains in rural 
        communities . . . If recent history holds true, rural America 
        could lead U.S. economic gains in 2011.' Federal Reserve of 
        Kansas City, 2010 report.''

        ``Growers' improved lot is rippling out to other industries.'' 
        The Wall Street Journal, October 12, 2010.

    We read the same kinds of reports during the last recession when 
the manufacturing sector was in crisis:

        ``Farm Belt Is Becoming a Driver for Overall Economy . . . The 
        present boom is proving that agriculture still matters in the 
        U.S. Rising farm incomes are helping to ease the blow of the 
        loss of manufacturing jobs in Midwest states . . . `The farm 
        sector is a significant source of strength for the U.S. 
        economy,' says Sung Won Sohn, chief economist of Wells Fargo 
        Bank . . . Although farmers themselves are a tiny part of the 
        population, they have an outsize impact on the economy because 
        farming is such an expensive enterprise. A full-time Midwest 
        grain farmer often owns millions of dollars of equipment and 
        land, and spends hundreds of thousands of dollars annually on 
        supplies.'' The Wall Street Journal, December 17, 2003.

    And, for those old enough to remember the 1980s, publications such 
as The Economist recalled the impact on the rest of the economy when 
agriculture was not doing well:

        ``The 1990s were so good [for Chicago] partly because the 1980s 
        had been so bad. `Everything that could possibly have gone 
        wrong did' says William Testa, the senior economist at the 
        Federal Reserve Bank of Chicago. The region was hit by a 
        crushing combination of high energy prices, a strong dollar, 
        high interest rates, and a farm recession.'' The Economist, May 
        12, 2001

    Last year alone, U.S. farmers and ranchers spent nearly $320 
billion in communities across the country to produce agriculture 
products valued at some $410 billion. Put in perspective, the value of 
total U.S. agriculture production was greater than the 2010 GDP of all 
but 25 nations, and total production cost was greater than all but 28. 
And, according to the Department of Agriculture, U.S. agriculture is 
expected to positively contribute $26.5 billion to the U.S. balance of 
trade in Fiscal Year 2012 after having contributed over $40 billion 
just the year before.
    And, one of the reasons we are here today, I expect, is because 
while U.S. agriculture is critically important to America, farm policy 
is also critically important to U.S. agriculture.
    Without farm policy, U.S. producers would be unilaterally exposed 
to global markets distorted by withering high foreign subsidies and 
tariffs, and have no comprehensive safety net. In fact, DTB & 
Associates issued a report last fall, similar to the study on tariffs 
and subsidies developed and maintained by Texas Tech University (http:/
/www.depts.ttu.edu/ceri/index.aspx.), which found that:

        ``U.S. subsidies . . . have dropped to very low levels in 
        recent years. In the meantime, there has been a major increase 
        in subsidization among advanced developing countries . . . 
        Since the countries involved are major producers and consumers 
        of agricultural products, the trade-distorting effects of the 
        subsidies are being felt globally. However, because the run-up 
        in subsidies is a recent development, and because countries 
        have not reported the new programs to the WTO or have failed in 
        their notifications to calculate properly the level of support, 
        the changes have attracted little attention. We believe that 
        when trade officials examine these developments, they will 
        discover clear violations of WTO commitments.''

    This aggressive increase in foreign subsides and tariffs might also 
explain why foreign competitors worked to derail WTO Doha Round 
negotiations, causing then Chairmen and Ranking Members of the Senate 
Finance Committee and House Ways & Means Committee to register their 
opposition to pursuing a lopsided agreement against the U.S. interests:

        ``Since the WTO Doha Round was launched in 2001, we have 
        supported the Administration's efforts to achieve a balanced 
        outcome that would provide meaningful new market access for 
        U.S. agricultural products . . . particularly from developed 
        and key emerging markets. Unfortunately, the negotiating texts 
        currently on the table would provide little if any new market 
        access for U.S. goods, and important developing countries are 
        demanding even further concessions from the United States.'' 
        Ways & Means Committee Chairman and Ranking Member Rangel and 
        McCrery and Finance Committee Chairman and Ranking Member 
        Baucus and Grassley.

    Moreover, while many successfully negotiated trade agreements have 
promised market access gains for agriculture, much of what was promised 
has yet to materialize or is continually threatened by artificial 
sanitary, phytosanitary (SPS) and other non-tariff barriers. This is 
why programs such as the Market Access Program and Foreign Market 
Development Program are of vital concern to the rice industry and must 
be reauthorized in the 2012 Farm Bill. It has not gone unnoticed that 
budget reductions currently being considered (such as the elimination 
of the Direct Payment) will result in a dollar for dollar loss in farm 
income. Producers must be provided the tools not only to attack these 
obstacles to trade but to increase exports through market promotion and 
thereby increase farm income through increased open and fair trade.
    But, beyond even these barriers that are imposed by foreign 
competitors are barriers to exports imposed in whole or in part by the 
U.S. Government. For example, rice was completely excluded from the 
free trade agreement negotiated with South Korea, foreclosing for the 
foreseeable future any new market access for U.S. rice producers in 
that country. Iraq, once a top export market for U.S. rice, has 
instituted restrictive specifications on rice imports that have led to 
a 77 percent drop in sales of U.S. rice to that country. In the pending 
Trans Pacific Partnership (TPP) negotiations, Japan has indicated an 
interest in joining. The U.S. rice industry supports Japan joining the 
negotiations, but only if additional market access for U.S. rice into 
Japan is part of the agreement. Our industry cannot support an 
agreement where market access for our product is categorically off the 
negotiating table. Another market that has the potential to become a 
top five export market almost immediately is Cuba. Unfortunately, the 
U.S. Government maintains restrictions on our agricultural exports to 
this country. Cuba was once the number one export market for U.S. rice 
prior to the embargo and we believe it is potentially a 400,000 to 
600,000 ton market if normal commercial agricultural exports are 
allowed to resume.
    In total, U.S. rice exports to date for the current marketing year 
are down 24 percent compared to last year.
    And, while the rice industry is still a long ways off from having a 
crop insurance product that is relevant to rice producers, the general 
need for Federal involvement in insuring crops where losses are highly 
correlated is also obvious, as even the American Enterprise Institute 
has admitted:

        ``The empirical evidence on the viability of either area-yield 
        or multiple-peril crop insurance seems clear. When normal 
        commercial loading factors are applied, the premiums required 
        by insurers to offer an actuarially viable private crop 
        insurance contract are sufficiently high to reduce the demand 
        for such contracts to zero . . . Thus, private markets for 
        multiple-peril crop insurance are almost surely infeasible, and 
        the weight of the empirical evidence indicates that area-yield 
        contracts are also not commercially viable . . .'' American 
        Enterprise Institute, ``The Economics of Crop Insurance and 
        Disaster Aid,'' 1995.

    Fortunately, for the American taxpayer, in addition to all of these 
justifications on why we have a farm policy in this country, we can add 
to the list at least one more reason: farm policy is cost-effective.
    In fact, U.S. farm policy has operated under budget for over a 
decade and accounts for only \1/4\ of 1 percent of the total Federal 
budget. Not including additional cuts scheduled under sequestration, 
U.S. farm policy has, to date, been cut by about $18 billion over the 
past 9 years, including in the 2004 and 2010 Standard Reinsurance 
Agreements (SRAs), the FY2006 reconciliation package, and the 2008 Farm 
Bill.
    In the most recent 5 years, average funding for U.S. farm policy, 
based on real funding levels, including crop insurance, was $12.9 
billion per year, which is 28% less than the previous 5 year average of 
$17.9 billion and 31% less than the average of $18.8 billion that 
incurred in the preceding 5 years. In the current year, the 
Congressional Budget Office (CBO) estimates that crop insurance policy 
will cost slightly more than the current commodity policies. And 
according to CBO projections for the next 10 years the estimated annual 
cost for commodity policy in the farm bill is $6.6 billion on average 
(before the expected reductions are made as part of this farm bill 
process), while the estimated annual cost for crop insurance policy is 
$8.8 billion on average. With the current suite of crop insurance 
policies not working effectively for rice producers, this puts our 
industry at a further disadvantage and highlights the need to maintain 
an effective commodity policy in the farm bill that will work for rice.
    Funding of that portion of farm policy that assists rice producers 
has declined from $1.2 billion a decade ago to about $400 million 
annually, with this amount largely reflecting Direct Payments.
    Meanwhile, U.S. consumers are paying less than 10% of disposable 
income on food, less than consumers in any other nation.
    This is why I believe so firmly that future cuts must focus on 
areas of the budget outside of farm policy that have not yet 
contributed to deficit reduction yet comprise a significant share of 
the Federal budget. This is also why I would urge lawmakers to reject 
cuts to U.S. farm policy that would exceed the level specified by the 
House and Senate Agriculture Committee Chairs and Ranking Members in 
their letter to the Joint Committee on Deficit Reduction last fall.
2008 Farm Bill Review
    The Food, Conservation, and Energy Act of 2008 (the Farm Bill) 
continued the traditional mix of policies consisting of the non-
recourse marketing loan, loan deficiency payments, and the direct and 
countercyclical payments. The farm bill also included the addition of 
Average Crop Revenue Election (ACRE) as an alternative to counter 
cyclical payments for producers who agree to a reduction in direct 
payments and marketing loan benefits. The bill also added Supplemental 
Revenue Assurance (SURE) as a standing disaster assistance supplement 
to Federal crop insurance.
    The 2008 Farm Bill made very substantial changes to the payment 
eligibility provisions, establishing an aggressive adjusted gross 
income (AGI) means test and, albeit unintended by Congress, resulting 
in the very significant tightening of ``actively engaged'' requirements 
for eligibility. USDA was still in the process of implementing many of 
the provisions of the 2008 Farm Bill in 2010, and the final payment 
eligibility rules were only announced in January of that same year, a 
mere 2 years ago. As a consequence, we are still adjusting to the many 
changes contained in the current farm bill, even as Congress considers 
the 2012 Farm Bill.
    Regarding ACRE and SURE, frankly, neither policy has proved much 
value to rice farmers. Specifically, in the first year of ACRE signup, 
only eight rice farms representing less than 900 acres were enrolled 
nationwide. With changes, this revenue program may provide more value 
for some rice growing regions like California. And SURE has provided 
little, if any, assistance to rice producers, including those producers 
in the Mid-South who suffered significant monetary losses in 2009 due 
to heavy rains and flooding occurring prior to and during harvest, or 
the significant losses last year as a result of spring flooding in the 
Mid-South. SURE's inability to provide disaster assistance for such 
catastrophic events further highlights the continuing gap in available 
programs designed to help producers manage or alleviate their risk.
    Regarding the traditional mix of farm policies, the nonrecourse 
marketing loan, loan deficiency payment, and countercyclical payments 
have not yet provided payments to rice farmers under the 2008 Farm 
Bill. The new price paradigm has, as a practical matter, greatly 
limited the protections afforded to producers under these farm policy 
features. In fact, if the protections provided were ever to trigger for 
rice farmers, the protections would help stem some of the economic 
losses but, frankly, not enough to keep most rice farms in business 
through even a single year of severely low market prices.
    As such, whatever its imperfections, the Direct Payment alone has 
assisted rice producers in meeting the ongoing and serious price and 
production perils of farming today.
    For rice producers, as for most other producers, the existing 
levels of price protection have simply not kept pace with the 
significant increases in production costs, costs such as energy and 
fertilizer that are exacerbated by escalating government regulations. 
It is for this reason that rice farmers believe strengthening farm 
policies in the 2012 Farm Bill would be helpful in ensuring that 
producers have the ability to adequately manage their risks and access 
needed credit.
Crop Insurance
    Risk management products offered under Federal Crop Insurance have 
been of very limited value to rice producers to date due to a number of 
factors, including artificially depressed actual production history 
(APH) guarantees, which I understand is also a problem for many other 
producers; high premium costs for a relatively small insurance 
guarantee; and the fact that the risks associated with rice production 
are unique from the risks of producing many other major crops.
    For example, since rice is a flood-irrigated crop, drought 
conditions rarely result in significant yield losses as growers simply 
pump additional irrigation water to maintain moisture levels to achieve 
relatively stable yields. However, drought conditions do result in very 
substantial production cost increases as a result of pumping additional 
water. As such, what rice farmers need from Federal crop insurance are 
products that will help protect against increased production and input 
costs, particularly for energy and energy-related inputs. For example, 
fuel, fertilizer, and other energy related inputs represent about 70 
percent of total variable costs.
    In this vein, many in the rice industry have been working for over 
the past 4 years now to develop a new generation of crop insurance 
products that might provide more meaningful risk management tools for 
rice producers in protecting against sharp, upward spikes in input 
costs. I serve on a rice industry task force that has been working to 
develop and improve crop insurance products for rice, and although the 
objective was to gain approval from the Risk Management Agency (RMA) of 
at least two new products that could be available to growers in time 
for the 2012 crop year, this has not materialized. But, it is important 
to stress that even if these products had become available this year, 
we do not believe that they would have put rice producers anywhere near 
on par with other crops in terms of the relevance that crop insurance 
has as a risk management tool.
    As such, rice producers enter the 2012 Farm Bill debate at a very 
serious disadvantage, having only a single farm policy that effectively 
works and that farm policy being singled out for elimination.
2012 Farm Bill
    With the foregoing as a backdrop, the U.S. rice industry developed 
a set of farm policy priorities in September of last year to guide us 
during consideration of the 2012 Farm Bill. The U.S. rice industry is 
unified in its firm belief that farm policy designed to support a 
strong and dynamic U.S. agriculture sector is absolutely vital. We also 
believe that the planting flexibility provided under the 1996 Farm Bill 
and the countercyclical policies that have been in place for more than 
a decade now have served this nation and its farmers well. In 
particular, as we noted earlier, the 1996 Farm Bill's Direct Payments 
have provided critical help to rice farmers--offering capital farmers 
could tailor to their unique needs. We are very proud to stand by this 
farm policy.
    However, given budget pressures and other considerations facing 
Congress that have caused policymakers to consider altering this 
approach in favor of more directed and conditioned assistance, we 
developed the following priorities:

   First, we believe the triggering mechanism for assistance 
        should be updated to provide tailored and reliable help should 
        commodity prices decline below today's production costs, and 
        should include a floor or reference price to protect in multi-
        year low price scenarios.

   Second, as payments would only be made in loss situations, 
        payment limits and means tests for producers should be 
        eliminated.

   Third, Federal crop insurance should be improved to provide 
        more effective risk management for rice in all production 
        regions, beginning with the policy development process.

    More specifically relative to each of these points, we believe 
that:
Price Protection is a Must
    Given price volatility for rice is the primary risk producers face 
that they do not have other good means of protecting against, with 
price fluctuations largely driven by global supply and demand; given 
rice is one of the most protected and sensitive global commodities in 
trade negotiations, thus limiting access to a number of key markets; 
given costs of production have risen to a point where the current $6.50 
(loan rate)/$10.50 (target price) assistance triggers are largely 
irrelevant, we believe the first priority should be to concentrate on 
increasing the prices or revenue levels at which farm policy would 
trigger so that it is actually meaningful to producers, and would 
reliably trigger should prices decline sharply.
    The reference price for rice should be increased to $13.98/cwt 
($6.30/bu). This level would more closely reflect the significant 
increases in production costs for rice. And we believe this reference 
price should be a component of both the price-loss policy and the 
revenue-loss policy to ensure downside price protection.
Options for Different Production Regions
    In addition, there should be true options for producers that 
recognize that a one-size-fits-all approach to farm policy does not 
work effectively for all crops or even the same crop such as rice in 
different production regions.
    In the Mid-South and Gulf Coast production regions, a price-based 
loss policy is viewed as being most effective in meeting the risk 
management needs of producers. Specifically, this policy should include 
a price protection level that is more relevant to current cost of 
production; paid on planted acres or percentage of planted acres; paid 
on more current yields; and take into account the lack of effective 
crop insurance policies for rice.
    In the California production region, although the existing revenue-
based policy still does not provide effective risk management, efforts 
to analyze modifications which will increase its effectiveness 
continue. Since rice yields are highly correlated between the farm, 
county, crop reporting district, and state levels, we believe the 
revenue plan should be administered for rice at either the county or 
crop reporting district level to reflect this situation rather than 
lowering guarantee levels to use farm level yields. By setting loss 
triggers that reflect local marketing conditions, delivering support 
sooner, and strengthening revenue guarantees that account for higher 
production costs as well as the absence of effective crop insurance, 
California rice producers are hopeful that an effective revenue program 
can be developed.
    While I have focused on the need for a choice for rice producers in 
different regions, this also applies for producers of most other 
grains. I support having policy options available for corn, soybeans, 
and wheat, which I produce, and believe that both a price-based policy 
and a revenue-based policy should be offered as options for these 
crops.
    Whatever is done should be plain and bankable. The current SURE has 
too many factors and is not tailored to the multiple business risks 
producers face--it is not plain. The current ACRE, while offering 
improved revenue-based protection, is complicated by requiring two loss 
triggers; providing payments nearly 2 years after a loss; and provides 
no minimum price protection--it is not bankable. The marketing loan and 
target prices are plain and bankable--unfortunately the trigger prices 
are no longer relevant to current costs and prices.
    Whatever is done should be tailored and defendable. We believe it 
makes sense to provide assistance when factors beyond the producer's 
control create losses for producers. We generally think more tailored 
farm policies are more defendable. For this reason, we like the thought 
of updating bases and yields or applying farm policies to planted 
acres/current production and their triggering based on prices or 
revenue, depending on the option a producer chooses. However, policy 
choices should not result in severe regional distortions in commodity 
policy budget baselines from which reauthorized commodity policies must 
be developed.
    Whatever is done should be built to withstand a multi-year low 
price scenario. Whether in a revenue-based plan, or a price-based plan, 
reference prices should protect producer income in a relevant way in 
the event of a series of low price years. Ideally, this minimum could 
move upward over time should production costs also increase, this being 
of particular concern in the current regulatory environment.
    Whatever is done should not dictate or distort planting decisions. 
Direct payments are excellent in this regard. SURE or similar whole 
farm aggregations tend to discourage diversification, which could be a 
problem for crops like rice. Any commodity specific farm policy that is 
tied to planted acres must be designed with extreme care so as to not 
create payment scenarios that incentivize farmers to plant for a farm 
policy. Whatever is done should accommodate history and economics and 
allow for proportional reductions to the baseline among commodities. 
Some commodities are currently more reliant on countercyclical farm 
policies (ACRE/CCP) while others are receiving only Direct Payments in 
the baseline. Generally, the least disruptive and fairest way to 
achieve savings across commodities would be to apply a percentage 
reduction to each commodity baseline and restructure any new policy 
within the reduced baseline amounts.
    There have been concerns raised about higher reference prices 
distorting planting decisions and resulting in significant acreage 
shifts including for rice. We are unaware of any analysis that shows 
significant acreage shifts resulting from the reference price levels 
included in the 2011 Farm Bill package. In fact, for rice specifically, 
a reference price of $13.98/cwt that is paid on historic CCP payment 
yields and on 85% of planted acres results in a reference price level 
well below our average cost of production, so I find it hard to imagine 
why someone would plant simply due to this policy given these levels.
Pay Limits/Eligibility Tests Should Be Eliminated
    The likely outcome of new farm policy is that it will provide less 
certainty for the producer (a likely decrease or elimination of Direct 
Payments). Since it will likely be designed to provide assistance only 
in loss situations, the second priority is that the policy should not 
be limited based on arbitrary dollar limits. Assistance should be 
tailored to the size of loss. A producer should not be precluded from 
participating in a farm policy because of past income experience. Any 
internal limits on assistance should be percentage-based (i.e., 25% of 
an expected crop value) and not discriminate based on the size of farm.
Crop Insurance Should Be Maintained and Improved
    Although crop insurance does not currently work as well for rice as 
it does for other crops, the third priority would be to improve 
availability and effectiveness of crop insurance for rice as an 
available option. I would also support improvement to the product 
development processes (we have struggled with two 508(h) submissions 
for over 4 years and are still not completed with the process), and to 
the APH system such that any farmer's insurable yield (pre-deductible) 
would be reflective of what that farmer actually expects to produce. In 
no case should the crop insurance tools, which are purchased by the 
producer, be encumbered with environmental/conservation regulation or 
other conditions that fall outside the scope of insurance.
2011 Budget Control Act Efforts
    Although the details of the 2011 Farm Bill package that was 
prepared by the House and Senate Agriculture Committees in response to 
the Budget Control Act were not disclosed, based on discussions and 
reports we believe that that package at least represents a good 
framework on which to build the 2012 Farm Bill. The 2011 package 
included a choice of risk management tools that producers can tailor to 
the risks on their own farms, providing under each of those options 
more meaningful price protection that is actually relevant to today's 
production costs and prices. It also included provisions to improve 
crop insurance and expedite product development for under-served crops 
such as rice.
    We are concerned that effective support for rice producers under 
the price-based option was set well below cost of production that late 
changes to the revenue-based option minimized its potential as an 
effective risk management tool for rice producers, and that pay limits 
and AGI rules would still serve as an arbitrary constraint upon U.S. 
competitiveness, globally. Still, even with these areas for 
improvement, the U.S. rice industry very much appreciates the Members 
and staff who put enormous time and effort into what we believe 
represents a good blue print for ongoing farm bill deliberations and we 
thank you.
    Again, thank you for this opportunity to offer my testimony. We 
certainly look forward to working with you on an effective 2012 Farm 
Bill we can all be proud of.

    The Chairman. Thank you very much. And thank you in 
particular for the kind comments about the October-November 
discussion. Apparently not everybody in America quite agrees 
with that, but thank you.
    Mr. Adams, you can begin whenever you are ready, sir.

 STATEMENT OF CRAIG ADAMS, CORN, SOYBEAN, WHEAT, HAY, AND BEEF 
                     PRODUCER, LEESBURG, OH

    Mr. Adams. Chairman Lucas and Members of the Committee, 
thank you for holding this hearing on U.S. farm policy and the 
formulation of the farm bill.
    I am Craig Adams, and my family has been in production 
agriculture starting as sharecroppers for at least four 
generations in southern Ohio, and have grown our business to 
1,700 acres, of which 900 are owned. We have a diversified 
operation raising corn, soybeans, wheat, hay, pasture, 
commercial beef cows, and kids. My wife is an educator and we 
have three children still in school.
    Because of the 1980s farm crisis, poor yields, 18 percent 
interest and no functional crop insurance, I am the only 
Wilmington College agriculture graduate of 1979 still engaged 
in full time production. All of us who started farming in this 
time frame are survivors of or near bankruptcy. Without the 
1985 Farm Bill and a community bank that believed in young men 
with dreams, I would not be here today.
    With high commodity prices and an over-extended Federal 
budget, there is a push to eliminate or substantially reduce 
government support of agriculture. I believe everyone receiving 
Federal USDA dollars should share equally in reductions. During 
the late 1990s, there was a public outcry over Congressionally 
approved crop disaster payments.
    Crop insurance in its current form is the most effective 
answer to short crop years. Any producer who desires an 
effective risk management tool can purchase crop insurance. 
Agriculture will accept reductions in FSA programs for crop 
insurance to survive. Independent companies servicing 
independent agents who dispense advice to farmers using 30 to 
40 year historic yield databases to get true production 
patterns, not weather fluctuations, helping mitigate premium 
increases stemming from catastrophic loss. We need an insurance 
program that is affordable to all producers across the United 
States.
    Commodity markets are cyclical and our self-produced food 
is a national asset. If all risk is removed I fear some of the 
unintended consequences could be the loss of affordable 
insurance for U.S. farmers.
    Spring is the time of renewal, with baby animals entering 
the world and crops peaking through the warm soil seeking the 
sun's energy. Be like a farmer, Chairman Lucas, and nurture 
this farm bill to passage.
    Thank you.
    [The prepared statement of Mr. Adams follows:]

Prepared Statement of Craig Adams, Corn, Soybean, Wheat, Hay, and Beef 
                         Producer, Leesburg, OH
    Chairman Lucas, Congressman Peterson, and Members of the Committee 
thank you for holding this hearing on the future of U.S. farm policy 
and the formulation of the 2012 Farm Bill.
    I am Craig Adams, am my family has been in production agriculture 
starting as sharecroppers for at least four generations in southern 
Ohio and have grown our business to 1,700 acres of which 900 are owned. 
We have a diversified operation raising corn, soybeans, wheat, hay, 
pasture, commercial beef cows, and kids. My wife Kim is an educator 
with a master in curriculum supervision. We have two children in 
college and one in middle school.
    Because of the 1980's farm crises, poor yields, 18% interest, and 
no functional crop insurance, I am the only Wilmington College 
agriculture graduate of 1979 still engaged in full time production. All 
of us who started farming in this time frame are survivors of or near 
bankruptcy. Without the 1985 Farm Bill and a community bank that 
believed in young men with dreams, I would not be here today.
    With high commodity prices and an over extended Federal budget, 
there is a push to eliminate or substantially reduce government support 
of agriculture. I believe everyone receiving Federal USDA dollars 
should share equally in reductions. During the late 1990's there was 
public outcry over Congressionally approved crop disaster payments. 
Crop insurance in its current form is the most effective answer to 
short crop years. Any producer who desires an effective risk management 
tool can purchase crop insurance. Agriculture will accept reductions in 
FSA programs for crop insurance to survive. Independent company's 
servicing independent agents whom dispense advice to farmers using 30-
40 year historic yield databases to get true production patterns, not 
weather fluctuations, helping mitigate premium increases stemming from 
catastrophic loss. We need an insurance program that's affordable to 
all crop producers across the U.S. Commodity markets are cyclical and 
our self-produced food is a national asset. If all risk is removed via 
shallow loss I fear the unintended consequence could be the loss of 
affordable insurance.
    Spring is the time of renewal, with baby animals entering the world 
and crops peaking through the warm soil seeking the sun's energy. Be 
like a farmer Chairman Lucas and nurture our farm bill to passage.
            Thank you,

Craig Adams.

    The Chairman. Thank you, Mr. Adams.
    I now recognize myself for 5 minutes and I would start by 
observing, Mr. Erickson, I promise you in the House of 
Representatives all spending is going down this year. And that 
is part of the challenge we face on this Committee, whether we 
have $23 billion less or $33 billion less or $40+ billion less 
to spend when we put that next 5 year farm bill together, that 
is one of the challenges that we face.
    I have a question though, being an old wheat and cattle guy 
from western Oklahoma, that I have to ask the panel. And my 
colleagues are always tired of this after awhile. But tell me 
in a snapshot, what are land prices doing in your core areas, 
the last 2, 3, 4 years? Up, down, sideways, stable?
    Mr. Erickson. Dramatically higher and not all driven by 
agricultural prices, but in fact you have to look at the larger 
picture of the economy and lack of investment opportunities for 
those people who have been conservative in their approach to 
their personal finances invested into their future and now have 
the opportunity to invest into something larger at a rate of 
return that is better than they can find at the local bank.
    So I think it is driven perhaps more by the opportunity to 
invest and some current tax laws than it is by its ability to 
pay for itself as farmland, that is for sure.
    The Chairman. I see the exact same thing at home, 10 years 
ago, 5 years ago, it was to have a place to go hide on the 
weekends or a place to hunt. Now it is a safe place to put your 
money.
    Ms. Moore, your area.
    Ms. Moore. A few months ago there was some land that sold 
in the Roseville area and it was $12,000 an acre and a farmer 
bought it. No, that does not cash flow but----
    The Chairman. No.
    Ms. Moore.--as Mr. Erickson said, it is an investment. At 
$12,000 an acre, that is a big investment.
    The Chairman. Exactly.
    Mr. Mages.
    Mr. Mages. Mr. Chairman, in our area in Minnesota, I am in 
central Minnesota and there has been land sales in the $5,000 
to $6,000 range, which seems like a bargain compared to 
Illinois evidently. But some land in Minnesota is a few 
thousand dollars higher, but it is driven by the farmer 
basically. You know, years ago, it was a 1031 exchange that 
drove the land sales and today it is the farmer and for the 
reasons like Mr. Erickson said also. They look at it as a place 
to put their money because the return in the bank or whatever 
is a lot lower.
    Thank you.
    Mr. Gerard. And in southern Illinois, we are seeing the 
exact same thing, rapid escalation in land prices from both the 
investor and from the farmer. Not too many years ago, we were 
buying land for $2,000 to $3,000 an acre in our area and 2 
weeks ago, we had one 10 miles up the road that sold for $7,700 
an acre, which is phenomenal for Alexander County, Illinois. So 
same story.
    The Chairman. Mr. Adams.
    Mr. Adams. Mr. Chairman, I must be living in a depressed 
part of the world. I jokingly say we can look out our back door 
and see Appalachia and we can look north about four counties 
and see the Corn Belt. Our prices have generally increased in 
southern Ohio. Two weeks ago, I had a friend purchased a farm 
for $3,400 an acre, about 95 percent tillable, had not been 
farmed for several years. It is in that mid to low $3,000 to 
$3,700-$3,800 an acre in southern Ohio. Now you go two counties 
to north central Ohio and you are talking $5,000 to $7,000 an 
acre for crop ground.
    The Chairman. You have to remember, being an Okie, I live 
between my friends in Texas and my friends in Kansas, so I 
see--we will not flatter them at this moment here.
    [Laughter.]
    Mr. Boswell. Mr. Chairman, will you yield a moment?
    The Chairman. I would yield to Mr. Boswell for a moment.
    Mr. Boswell. What do you suppose you and I would do, you 
have your ranch down there, if we were cow/calf operators, some 
crops, if somebody wanted to come to your place or mine and 
offer us $10,000 or $12,000, we would probably say come on in, 
let us talk.
    The Chairman. Then my wife would take me aside and explain 
to me why I could not do that, Leonard; yes, exactly. But yes, 
absolutely.
    Another question. One of the topics of great discussion as 
we work on options in the next farm bill, as we try to craft 
this concept of insurance, both revenue and traditional 
weather, yield issues, and we take into consideration all the 
other factors that drive farm policy. You are a very diverse 
group of farmers obviously.
    Tell me, when you make your decisions about what to plant, 
how much of it is soil and past growing history, how much of it 
is what the insurance rates are, how much of it is what kind of 
demand the Renewable Fuel Standard creates? Tell me about how 
you make your decisions in your diverse operations, about what 
to produce. And as Chairman, that light is yellow, but you can 
go a little longer with me. Whoever is brave, step up.
    Mr. Mages. Mr. Chairman, the way we do it, I guess 
basically we are corn and soybeans and it is economics. We 
plant about \2/3\ corn and \1/3\ soybeans and we do that on a 
rotational basis. It seems to work out pretty well, so that is 
one of the reasons. And the corn, we seem to make a little more 
money on corn and the risk is a little bit less on corn for 
some reason, weather risk in our area. Soybeans tend to have 
issues with high alkaline soils and things like that. So that 
is what makes our decision.
    Mr. Erickson. We have a corn and soybean rotation and we 
look at our business from a holistic approach. Not only does 
the rotation provide for we think better opportunities for 
revenue generation, but we also think it allows us to manage 
risks, both from weather, diseases, other pests that might 
attack the crop. So we tend to look at a long-range approach 
there and have the opportunity with long-term landlord 
relationships to keep those in place. So we make our decisions 
based on what works best for our operation and the signals in 
the marketplace tells us.
    Mr. Adams. Mr. Chairman, we raise basically a 50/50 ratio 
of corn and soybeans. Back in 2008 when corn prices took off 
upward, we messed up our rotation and when the end of the year 
was over, soybean acres had been purchased up similar to what 
they are doing right now, should have stayed with what we are. 
Wheat is not competitive in that kind of a rotation. We do some 
different things because of the cow/calf operation, things like 
that for forage. But the wheat is basically a conservation tool 
and it also allows us to rebuild waterways, terraces and things 
like that.
    Mr. Gerard. Mr. Chairman, where I farm, we have variable 
soil types, so I guess the primary, the first consideration is 
soil type. We have some soils that are solely suited for rice 
where we cannot really rotate, it is continuous rice 
production. We have other soils where we can rotate rice and 
soybeans. And then on the third soil type, we can rotate corn, 
wheat, soybeans. We have much more flexibility. So on those 
acres that we do have flexibility, the first thing I look at is 
what is going to reap me the best net income and the market 
will dictate what we plant on those acres. Fortunately we have 
that flexibility.
    One thing that really is irrelevant to my consideration is 
the safety net that is provided based on the target price or 
loan rates because what was proposed last fall is support to 
help keep us in business, but still yet, it is below cost of 
production. So there is no influence from the safety net or 
target price proposed, has really no bearing on what I am going 
to plant. Crop insurance the same.
    The Chairman. So basically what you are telling me is what 
I have always known and what I have tried to explain to my 
colleagues back east; and that is, a typical farmer has to be 
an outstanding agricultural economist and calculate all these 
things every time to survive, and also a pretty darn good soil 
scientist based on his or her property and property history.
    Thank you very much. I now recognize my friend from Iowa 
for 5 minutes, Mr. Boswell.
    Mr. Boswell. Thank you, Mr. Chairman, I appreciate the 
dialogue you just had, that was helpful.
    There is quite a lot of concern, as the Chairman mentioned, 
about the adjustments we will have to make, and I want you to 
understand and appreciate that his and our colleagues' worked, 
we tried to have that super committee action before the last 
holiday and it did not happen. But I think you need to know 
that of all the committees that were asked to bring their 
resolve to that super committee, the one that succeeded was the 
Agriculture Committee. So back to that whole comment about 
bipartisanship, we feel good about that.
    We talked for some time about how we will step up and take 
a hard look at what we can--set our priorities. We know we will 
have to make an adjustment. We would like to do it, you would 
like to do it rather than having somebody sitting at a desk in 
some far away place deciding for you. So I am very appreciative 
and complimentary that we came up with that $23 billion. That 
is a lot.
    But then I think it is fair, we have to talk about some of 
this. Now the rest of you step up to the plate and do your part 
before you come back to us. There is a lot of discussion, lot 
of concern. I am an old soldier, I spent a career in the 
military and I am lucky to be here, very lucky. And I am big on 
defense, but when we have a Secretary of Defense stand up and 
say we might need to make some adjustments here. And I am on 
the Eisenhower Commission which is setting up the memorial, I 
was asked to do that some years ago and it is not an easy thing 
to do. You might see something on the news on it.
    But I made a comment some years ago about the military 
industrial complex and what it might do to us and I think we 
are faced with some of that. You are going to hear a lot of 
debate on this and I just want you to know a little bit of 
background. Chairman Lucas and Ranking Member Peterson, and Ms. 
Stabenow and Pat Roberts over in the Senate side stepped up to 
the plate and so we have to deal with that. So you will hear a 
lot about it and things will be discussed on that probably, if 
you just stop and think about it, it will probably end up going 
to a conference committee and be worked out there. So I just 
want to say this to you so you know that this debate is going 
to take place and it will probably be fairly lively.
    Having said that, if you want to comment, fine, but I am a 
big advocate for alternative fuels and have been for a long, 
long time. I was still in uniform years ago on a NATO 
assignment when we had the 7 day war and the big fuel crisis 
and I was in a foreign country. Amazed me what people just like 
us will do if you cannot get fuel for your car, your delivery 
truck or your tractor. It is amazing. So I have really been 
engaged in alternative fuels--all the above. And I have really 
been enthused about what we can grow out of the ground and turn 
into fuel and turn around and grow it again next year and so 
on.
    Seeing what we have done in production yields and so on in 
our lifetime, I guess I am the oldest one on the panel up here. 
I am not waving that flag, but I remember when I came back from 
the Army, I had been gone for 20+ years, came back and I was so 
anxious to get into row crops and I was getting ready to plant 
and my father came out and he dug around down the row and he 
said, ``How much are you planting, what kind of seed count?'' 
And I do not remember what it was. He said, ``You cannot do 
that, you cannot do that.'' And I told him why I thought I 
could and so on. So we watched it very close and I did not want 
to spend a lot of time on it, then he came back and crawled up 
on the combine when the harvest was going on and of course it 
was coming out pretty full and he said, ``How much is this 
yielding?'' We did not have the fancy gadgets we have now but I 
said, ``It is probably about 125 to 135 bushels to the acre, 
probably.'' I said, ``Why don't you just go into the elevator, 
it is all going across the scales, just go in there, we just 
finished that 80 over there, and check it.'' So he was gone 
quite a bit and he come back and he said, ``It is making 
that.'' He just shook his head.
    But look what we can do now. Look what some of you have 
done. So I do not know this question about, can the livestock 
sector exist with us doing a successful domestic ethanol 
industry, for example? I would like to hear your comments on 
that, just briefly, anybody and everybody. Can we do this?
    Mr. Erickson. I think so.
    Mr. Boswell. And I will tell you what I think when we get 
to the end. Go ahead.
    Mr. Erickson. Thank you. I think that we can and we have 
demonstrated that we have been able to thus far. Our ability to 
increase yields without sacrificing soil loss or nutrient 
mismanagement, I will call it. We also have to recognize the 
key role that alternative fuel production plays in providing 
feedstocks for livestock. We must have a strong livestock 
industry here at home. Not only does it provide excellent food 
for our own people, but we are able to add value by processing 
those things locally.
    But I think the alternative fuels market has also provided 
us the opportunity to provide feedstocks at a lower cost. 
Today's DDG provide a big percentage of rations for hog 
operations, swine diets and have significantly reduced the cost 
of just corn base. When you are looking at $6+ corn, the DDG 
provides a very economical alternative to the diet for swine. 
So I think we have been able to accomplish both.
    Mr. Mages. Congressman, I think it is a very workable 
system. You know, in the past 10 years, the demand for ethanol 
has increased dramatically, ten percent of the nation's fuel 
basically is ethanol now. And with that 14 billion gallons of 
ethanol being produced, it comes from approximately 5 billion 
bushels of corn, but we are raising a tremendously larger 
amount of corn than we did in the past and on the same amount 
of land. And we are also doing it with using less fertilizer 
and we are doing it in a fashion that is very friendly, 
environmentally friendly to the land.
    So I think the future of ethanol looks bright. I think with 
the livestock sector they are still a big customer, one of the 
biggest customers and through the DDGs and through the 
livestock, the value-added livestock, but also we get the 
nutrients from the livestock to put back on the land. And it is 
a tremendous circle of economic success.
    Mr. Boswell. In respect to the rest of the Members, I am 
going to stop here, maybe we can come back to it later, but 
that little red light means I have used up my time for this 
round.
    But I think we can too and I appreciate it. Just nod your 
head, do you think we can do it? Or shake your head this way--
okay, we think we can do it.
    I want the rest of you to know, media and so on, we feel 
like we can do this. We can continue to take steps to get out 
of bondage to OPEC and so on. So anyway, so much for that. I 
just wanted to see what you thought about it.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired.
    I now recognize the gentleman from Texas, who I would note 
for the record has even fewer trees than I have in my district 
in Oklahoma, Mr. Conaway.
    Mr. Conaway. Thank you, Mr. Chairman. It is good to be 
here. We measure our rain in hundredths of inches and we are 
proud to get \5/100\ of an inch from time to time. Thank you 
all for being here this morning.
    I chair the Subcommittee on General Farm Commodities and 
Risk Management and while things that are going on at the CFTC 
are not directly related to what we are going to do these 
coming months in this farm bill, Ms. Moore, you mentioned that 
you bought your inputs last year for the 2012 crop.
    Can you walk me through basically how you did that and the 
rest of you, have you seen yet impacts of the CFTC's rulemaking 
on your ability to do that at a price that makes sense for you?
    Ms. Moore. Even before we finish our harvest, our seed 
salesmen are at our door trying to get our order for next year 
because seed is at such a premium for certain seed numbers, 
that if we can use those seed numbers, we really have to book 
them. We have the option of paying for them, but of course, it 
is at a reduced rate if we pay for it earlier than if we pay 
for it later next fall.
    Mr. Conaway. Okay, so you are not using futures contracts, 
you are actually buying them directly from the----
    Ms. Moore. We buy our seed.
    Fertilizer costs, most of the time they are predicting they 
are going up so we will book and pay for our fertilizer.
    Mr. Conaway. And how do you do that?
    Ms. Moore. Through our local co-op.
    Mr. Conaway. Okay, so you are relying on the co-op to be 
able to provide those services to you?
    Ms. Moore. Yes.
    Mr. Conaway. Have they talked to you about increased 
prices? Do any of the rest of you use futures markets to hedge?
    Mr. Mages. Yes, I do, Congressman.
    Mr. Conaway. Are you seeing anything yet from the impact of 
the rulemaking on the CFTC?
    Mr. Mages. I am not familiar with that.
    Mr. Conaway. Okay.
    Department of Labor has recently stepped into your business 
with respect to, I will not call them children, but young 
people working on farms. Where should those decisions be made 
about how do you regulate, how do you take responsibility for 
children working on farms?
    And maybe help us understand how old were you when you 
first started meaningfully working on your properties.
    Mr. Erickson. I am not sure how meaningful it was, but I am 
a graduate of a half day kindergarten and I know after a half 
day kindergarten, I used to sit on the tractor and I thought I 
was driving, but I think it was a way to keep me occupied while 
my dad fed hay to the cows.
    I think that the problem with some of these--and I alluded 
to it in my written testimony--the problem with some of these 
regulations is they appear before they are thought through. And 
if given the opportunity for people who have an understanding, 
beginning in Congress like the gentlemen before us today, if 
this Committee had had an opportunity to comment on some of 
those regulations before they had been introduced, I am sure 
that you would have been able to shed light to those regulatory 
agencies to say, hey, I think you need more information here.
    It is important to keep young people safe in working on the 
farm, but it is also important that we grow that work ethic in 
our young people and employer after employer will tell you the 
importance of that work ethic in young people today. And I 
think that is what makes us such a good workforce in the 
Midwest.
    Mr. Conaway. Ms. Moore.
    Ms. Moore. I think the responsibility should be with the 
parents. My husband told me when he was 8, he started raking 
hay and doing that. And when our oldest son was 8, I looked at 
him and said, ``Do you really think Steve is ready?'' And he 
agreed that no, maybe at that time he was not ready. But our 
boys all worked on the farm just building fence or raking hay 
or doing whatever needed to be done, when it was age 
appropriate, and that was our decision. And I can tell you that 
when they went out to college or went looking for jobs and 
people found out that they grew up on a farm, their eyes kind 
of light up, like oh somebody who knows how to work. That has 
been a real plus. They come back and say, ``Mom, they like that 
I grew up on a farm. You know, they think that I have learned 
how to work.'' And I think that we instill that in our children 
and I think that is really important.
    Mr. Conaway. Yes, the struggle is going to be obviously you 
making a decision for your children to work on your farm.
    Ms. Moore. Right.
    Mr. Conaway. The restrictions should be different than 
someone who lives near and they are going to be using children 
who are not theirs, but still age appropriate. How do you put 
in place the protections that are appropriate but also allow 
the flexibility to children whose parents do not actually own 
the land or are actually farming, to be that labor in the 
summer time that they need to learn that work ethic.
    Ms. Moore. Well, I think the parents of the children should 
have that.
    Mr. Conaway. Sure.
    Ms. Moore. So if they said yes, I think my child is mature 
enough and responsible enough to do that job on the farm, that 
they should have the ability to say yes.
    Mr. Conaway. My experience was not on the farm but it was 
on a drilling rig. And I had the same experience, while I 
worked on a drilling rig as a roughneck, I did not really think 
with either one of my boys that was a good idea. So I mean, it 
was my decision, my call to make there.
    Mr. Chairman, I yield back.
    The Chairman. I would simply note, like many people in this 
room, I started at a young age with my father and grandfather. 
And when I got to work for the neighbor as a teenager, that was 
wonderful, I got paid.
    [Laughter.]
    The Chairman. Wonderful.
    I turn to the gentleman from Illinois for his 5 minutes.
    Mr. Hultgren. Thank you, Mr. Chairman. Thank you all for 
being here. This has already been very informative.
    I just want to briefly say, before I get started, it is 
such a privilege to be serving on the Agriculture Committee, 
thank you, Mr. Chairman. It has been such a great learning 
experience for me. My district is just east, it starts a little 
bit north of here in Henry County and then goes east all the 
way over to DuPage County. But great to be here today.
    I also know, Congressman Schilling and I, it has been a 
wonderful little over a year that we have been serving out in 
Washington, D.C., but we also really appreciate the opportunity 
to work with our Senators here from Illinois. Specifically, I 
just want to recognize a couple of guys who are here from 
Senator Kirk's office, who just do a great job on ag policy--
Rob Johnson and also Randy Pollard, along with Senator Kirk's 
ag advisory group is here as well. We got to meet with them for 
a few minutes before. So we all know Senator Kirk is doing 
great and we want him back in Washington quickly, and he is 
still passionate about serving people here in Illinois. So glad 
you guys are here. But again, thank you all for being here.
    A couple of quick questions and a lot of stuff has already 
been covered, but I wanted just to talk with Mr. Erickson 
briefly about exports. I was very excited with, as Congressman 
Schilling said, the passage of the free trade agreements. I 
wondered if you could talk more specifically how you would see 
that impacting your family farm.
    Mr. Erickson. We have the advantage in this part of 
Illinois that we have a strong domestic demand for commodities 
and we also have the ability to export via river 
transportation. I will not even go into all that because that 
is a whole other topic.
    But exports have clearly been a driving force. When I first 
started farming in 1985, I think we had the feeling generally 
that we could control production, and therefore, control price. 
In the meantime, our competitors decided that if they are not 
going to do it, we will. And I think that we have finally come 
around to the fact, quite some time ago, that competing in the 
global marketplace is what we are all about and we obviously 
need to work here at home first. Exports clearly provide a lot 
of opportunities, not only for the producers, but the 
developers of products, the value-added, the transportation 
industry, the construction industry, and the list goes on and 
on that supports those export markets.
    Mr. Hultgren. Thanks. I agree with you as well. Along with 
serving on the Agriculture Committee, I also serve on the 
Transportation Committee and so I am really helping try to get 
a farm bill passed and also a surface transportation bill 
passed. I see how important our canals are, our rivers are, our 
roads are, our rails are. All of these are interconnected 
clearly and impact other industries, such as agriculture. So we 
need to make sure that we get some things done on the farm bill 
but also on the transportation bill.
    Ms. Moore, I wondered if I could ask you briefly, you 
talked in your testimony about the difficulty of securing 
credit especially for new farmers. I wonder, how hard is it to 
get started, for a new farmer to get started these days in this 
economy? And do you have any suggestions that would help 
prospective farmers or things that we should keep in mind as we 
work on the 2012 Farm Bill?
    Ms. Moore. Well, with the changes in the banking industry, 
for a new farmer to go in without much collateral, it is almost 
impossible for them to get the kind of money that we are 
talking about.
    Several years ago, it might have been a little easier, but 
as costs have gone up, they need to borrow more and more to get 
started. If there is a program that would support a young 
farmer and back them and give them some security at hopefully a 
lower interest rate too. But it is mostly getting the 
collateral backing for that loan that really could be a 
stumbling block for a lot of producers to get started.
    Mr. Hultgren. Mr. Gerard, in your testimony you said ``If 
all risk is removed via shallow loss, I fear that the 
unintended consequences could be the loss of affordable 
insurance.''
    I wonder if you could elaborate on that possible unintended 
consequences and why you believe a shallow loss program would 
not be beneficial.
    Mr. Adams. Congressman, I am sorry, but I think that was my 
testimony.
    Mr. Hultgren. Was that yours? I am sorry.
    Mr. Adams. My intent was on the shallow loss, I misstated, 
shallow loss or other changes in the insurance program that 
would increase cost to the farmer. The concern is that if you 
have an indemnity payment every year, then your premiums are 
going to go up. That was the concern.
    Mr. Hultgren. Okay.
    Mr. Adams. It is with the loss ratio. You know, do no harm, 
it is working right now, is the concept; yes.
    Mr. Hultgren. Okay, thank you.
    Real quickly if I could sneak one in. It just turned red.
    Let me get back to Mr. Erickson real quickly. You talked 
about the importance of direct payments. We have also heard so 
much about the importance--maybe a greater importance--of crop 
insurance right now. Obviously, many would like to have both.
    I wonder if quickly, if you could say is there a way that 
you could do without direct payments if crop insurance was 
strengthened?
    Mr. Erickson. I think my testimony led us to discuss the 
fact that direct payments, while under attack for a number or 
reasons currently, I think they were a good investment and I 
think my feeling has always been that you have to have personal 
responsibility for your own business and the things that you 
are responsible for. And I think the direct payments put the 
onus on the producer and the landowner to make sure that those 
payments were properly used and that those payments went to 
things that I outlined, which included risk management.
    In our operation, we do not utilize Federal crop insurance. 
And the reason that we do not is that we have had the 
opportunity to become financially stable. We have used those 
direct payments as a way to do marketing programs that have 
reduced price risk and the premium and reward from the Federal 
crop insurance has not worked for us. That is not to say that 
it is not a good program and it does have a place in risk 
management. I was just hopefully shedding light on the fact 
that there is opportunity for flexibility for all of the 
program.
    Mr. Hultgren. That is helpful. My time has expired. Thank 
you, Mr. Chairman, I yield back.
    The Chairman. The gentleman's time has expired. We now turn 
to Mr. Schilling for his 5 minutes.
    Mr. Schilling. Thank you, Chairman.
    Mr. Erickson, it is interesting, you brought up a little 
bit about regulation and before I got going, I had a meeting 
with Senator Kirk's ag advisory board and I was telling them 
the story of how we had a meeting with Ms. Jackson, and it was 
kind of interesting because what happened was we were talking 
about the masks that they were trying to force the farmers to 
wear and one of my colleagues had asked, do you know how much 
they cost. And she says well, no, I do not. Are they $50, are 
they $500, are they $5,000. And anyway, as this thing went on 
and on, it was both Democrats and Republicans alike that were 
kind of going after her and I was sitting there thinking--I was 
kind of feeling sorry for her and then I remembered that she 
was with the EPA.
    [Laughter.]
    Mr. Schilling. But one of the things that is really 
critical is that we all want clean air, clean water. And any 
time you come in and you try to get some of this over-
regulation under control, you get attacked. And I think it is 
imperative when they are trying to regulate farm dust and 
things like that, we have really got to keep a good eye and 
keep this under control because those all end up being more 
inputs and cost to people that do not necessarily need to be 
there.
    But what I wanted to start out, Mr. Erickson, do you 
think--I want to talk about crop insurance because that is the 
number one thing I continually hear as I go throughout the 
district. But do you think more parity in crop insurance 
premiums in Illinois would make you more likely to purchase 
crop insurance?
    Mr. Erickson. Crop insurance is all about risk/reward, just 
like any insurance is. I would give full review to what the 
opportunities provided for our business and how it could 
potentially lay off risk, and what the potential reward was 
down the line. And I think that is the importance of keeping 
the flexibility in crop insurance in the mixture, that it is a 
sound program that does not become overly subsidized or overly 
regulated. If you try to fix it too much, you might actually 
hurt the parts that work the best for the majority of people.
    So I am not being critical of the program, but I just think 
that it could be dangerous if we try to make too many changes 
there to fix everyone's problem, and in effect you have a 
costly program that maybe does not suit all at any cost.
    Mr. Schilling. An unintended consequence basically.
    Mr. Erickson. Yes.
    Mr. Schilling. I have heard quite a bit about the re-rating 
issue from producers in the district who believe that the MRAs 
approach is just the beginning in addressing a long-standing 
rate issue here in Illinois. And basically would encourage the 
process to continue.
    Five minutes goes so fast. I want to try to get to Ms. 
Moore here.
    You mentioned too much emphasis on any single approach, 
which is great. So I am going to flip over to Ms. Moore.
    In your testimony on risk management, you mentioned that 
you utilize the revenue assurance to protect against loss, 
which is basically what we talked about here, which I think is 
great. But one of the things that I think that you are doing a 
really awesome job on and I just want you to kind of touch on, 
and I applaud your work here in Illinois with the Farm Families 
and your educational efforts on farm policy because I think 
that is something that is critical, that we can get outside of 
our farm communities and educate people.
    Can you just highlight some of your most successful 
practices for us, Ms. Moore, on educating folks about the farm 
bill?
    Ms. Moore. Well, probably the latest is Illinois Farm 
Families where we have sat down with mostly moms, we think that 
moms are the most influential, and sat down with them and 
answered their questions. And this month, we did a tour to a 
hog facility with them and while we are on the bus, we talk. So 
those are our times. And one of the questions was, ``Tell me 
about farm subsidies.'' Well, that is all they hear, that is 
all they have in their mind about the farm bill, they did not 
understand all the titles that are involved. So I had the 
opportunity to explain to them everything that was encompassed 
in the farm bill and they said, ``Oh, so it is more than just 
paying some money to farmers.'' So we did get that dialogue and 
they did understand how much of it is including the nutrition 
programs and the SNAP program and got them to see.
    But every time I talk to consumers and they hear farm bill, 
oh, you mean subsidies. And that is all that they are hearing. 
So we need to do our part to let them know there is a lot more 
to this farm bill than just subsidies.
    Mr. Schilling. Very good. You know, I appreciate that 
answer because part of our job on this Committee is to make 
really the strongest arguments for rural America I believe, and 
just the importance of the farm bill to our colleagues. We have 
a lot of colleagues who do not truly understand what is going 
on with ag.
    I can see I am running out of time, but I really appreciate 
everyone being here. Thank you. I yield back, sir.
    The Chairman. Thank you, Mr. Schilling.
    One last observation or one question. Mr. Boswell and I 
have been discussing a point up here and I would recognize him 
to make a quick inquiry of the panel on this policy point.
    Mr. Boswell. Thank you, Mr. Chairman.
    Something we are hearing some talk about as we talk about 
the Federal crop insurance and so on, is conservation 
compliance. A lot of talk across the country and a lot across 
my state, a lot of people think we are all flat, but you know, 
we have a lot of highly erodible ground and so on. I would like 
to hear your response, there is not too much land and it has to 
have some conservation practice put on it. So should this be 
something we should be considering as we talk about Federal 
crop insurance? Should the producers be required to be in 
compliance?
    The Chairman. Should it be a mandatory requirement, that's 
the question back east. No not participating in the program if 
you are not vested in the conservation programs--not voluntary. 
There is a big difference there. Whoever, anybody.
    Mr. Mages. Mr. Chairman, I think conservation compliance 
does not belong in crop insurance. I think crop insurance is 
something that we pay for part of it and, say you had a problem 
one year and you have a big crop insurance payment coming in, 
and for some reason they do a compliance check in the back 40 
and you did something wrong years ago and you are out of 
compliance. And now the banker is waiting for his money or you 
are waiting to pay the bills and now they are going to refuse 
to pay. So for all of them reasons, I think compliance should 
not be an issue with crop insurance.
    Mr. Erickson. I almost hate to say this. I would differ in 
the fact that I think regardless of how we feel about them as 
producers, subsidy or incentive that we are provided 
financially from the government may entitle us to fall within 
the framework of certain programs. In our scenario, we have 
done conservation programs without government funding, but that 
is not the case for everyone. If we want to provide subsidy in 
any regard, in my estimation, it may come at a cost. And I do 
think we have a responsibility to farm responsibly. I think the 
vast majority of farmers do. But I also can understand the need 
for programs to be designed so that there is a certain amount 
of accountability for those who want to participate.
    That is a pretty wide area I guess.
    Mr. Boswell. I think you both made valid remarks. And 
perhaps if we go into this and I am quite confident we are 
going to hear about it. And by the way, for whatever it is 
worth to you, the land I have stewardship over, I complied 
before we had all this set aside business and I did not--I had 
already done it. That is beside the point.
    I think some of our folks--we are back to we all have an 
investment in agriculture, whether you are in the city or 
wherever--are going to bring this up, so we might need some 
expertise, Mr. Chairman, if we get to that point on how to 
qualify or design it where it would----
    The Chairman. Very valid point, Mr. Boswell, and this 
question takes us to the very core issue of what a farm bill 
is. When in a time that 75 percent of all farm bill spending in 
the last 5 years go to the social nutrition programs, some in 
my district refer to them as the feeding programs, perhaps when 
all the bills are added up for this year and last year, 80 
percent of all farm bill spending will be the feeding programs. 
Is it still a farm bill when we become that small a portion. 
And by the same token, is the farm bill, part of the farm bill 
intended to help us meet the food and fiber needs of this 
country and the world, or is it a tool with which to compel us 
to follow other people's guidelines about how we should live on 
our land.
    Those are all big philosophical discussions that will be 
sorted out on the floor or in the Committee and certainly on 
the floor of the United States House.
    You look like, Mr. Adams, you have some insights to lay on 
us. You will get to finish this.
    Mr. Adams. Well, Mr. Chairman, in response to Mr. Boswell, 
as a producer I would be willing to have linkage between crop 
insurance and conservation if recipients of food feeding 
programs would submit themselves to drug tests and things of 
that nature to be able to qualify.
    [Applause.]
    The Chairman. On that thought----
    [Laughter.]
    The Chairman.--the time for this panel has expired and we 
thank you for your insights.
    And we now call our second panel of witnesses to the table.
    [Brief pause.]
    The Chairman. The hearing will return to order and I would 
like to thank all of not only our participants in the hearing 
today but the folks who are with us today and who may be 
observing this process, and remind you once again everyone can 
visit, and anyone can visit, the House Agriculture Committee 
website to learn more about the 2012 Farm Bill process. 
Additionally, anyone is welcome to submit comments to be 
considered as a part of the Committee farm bill field hearing 
record. Your comments must be submitted using the website 
address by May 20, 2012, so it can be incorporated in the 
permanent record. That address is agriculture.house.gov/
farmbill. 
    With that, I would like to welcome our second panel of 
witnesses to the table. Mr. John Williams, sorghum, corn, 
wheat, and soybean producer from McLeansboro, Illinois; Mr. 
Gary Asay, pork, corn, and soybean producer, Osco, Illinois; 
Mr. Terry Davis, corn and soybean producer, Roseville, 
Illinois; Mr. David W. Howell, corn, soybean, pumpkin--pumpkin? 
This is going to be a good diverse topic--pumpkin, and tomato 
producer, Middletown, Indiana. By the way, my grandfather was 
born in Miami County, Indiana 113 years ago. And Ms. Jane 
Weber, specialty crop producer, Bettendorf, Iowa.
    And as Chairman, you can offer comments as you go along, it 
is one of the privileges that are left.
    Mr. Williams, please begin when you are ready.

 STATEMENT OF JOHN WILLIAMS, SORGHUM, CORN, WHEAT, AND SOYBEAN 
                   PRODUCER, McLEANSBORO, IL

    Mr. Williams. Good morning. I would like to thank you for 
giving me the opportunity to sit here before you today to 
discuss the impact of the next farm bill, and what it will have 
on our operation.
    I farm at home with my mom, dad, my son, and my daughter in 
Hamilton and White Counties near McLeansboro, Illinois, where 
we grow grain sorghum, corn, wheat, and soybeans. Grain sorghum 
is an integral component in our rotation and is a crop I use as 
a foundation for defense. I am blessed geographically to be 
able to sell our grain sorghum at a premium of 30 to 70 over 
corn each year. It is less expensive to plant and is more 
resilient to varying weather conditions, whether they be wet or 
dry. It is a dependable crop and has been a staple on our farm 
now for four generations.
    As a farmer, I realize the vast impact this one piece of 
legislation has on our day-to-day operations, and I want to 
ensure farmers benefit from the next farm bill. So I applaud 
you for holding this hearing today, and thank you.
    On our farm, I plan defensively and understand the upside 
and downside of risk. I have seen what can happen to friends 
and neighbors when they do not plant for risk, which 
underscores the need for meaningful risk management tools that 
farmers can utilize. With that said, I firmly believe that the 
number one goal for the next farm bill should be ``do no harm'' 
to Federal crop insurance.
    I believe a personal T-yield system, which would allow a 
farmer's APH to more accurately reflect his yield potential, 
would be a more productive way to improve the APH.
    I would also encourage RMA to include sorghum in the trend-
adjusted yield pilot program. It is inequitable to allow 
competing crops to have trend-adjusted yields while sorghum 
farmers' APHs are left unadjusted.
    Crop insurance is a safety net in a time of disaster. It is 
also an integral part of our overall marketing strategy. 
Because of revenue protection insurance, I can market 
aggressively and still be protected against market shifts. I 
remember having a glut of grain in the 1980s and I do not want 
to be caught in a position like that again where it affects our 
bottom line.
    In the 1980s with high interest rates and low grain prices, 
our crop was worth less than it cost to produce it. While 
interest rates are not the problem today, the cost of basic 
farm inputs has skyrocketed over the last 2 years. That is why 
it is critical to have some protection in the next farm bill 
against a steep drop in commodity prices, since input prices 
are sticky and slow to follow declining commodity prices.
    Whether that protection is a reference price system or a 
revenue-based system, it is important that it be in the new 
farm bill safety net and farmers have the option to choose what 
fits their operation and risk appetite the best. In a revenue-
based program, it is critical to have a reference price and 
plug yields. The reference price will protect against a long-
term, large commodity price drop and plug yields will help in 
times of consecutive years of yield losses.
    As for ACRE and SURE, these programs are not widely used in 
our area because they are too complex. I would have rather gone 
with a guaranteed route that direct payments provided. But 
given the situation, any new program that results from the next 
farm bill should be simple and transparent.
    With that said, sorghum is an agronomically important crop 
to our farm and likewise to those in the Sorghum Belt. However, 
it is not always the primary crop for many farmers and is 
extraordinarily sensitive to any incentives that are created in 
the farm program. No matter which form of policy is pursued, I 
believe special care must be taken to encourage crop diversity 
and to avoid a monoculture system that rejects agronomics in 
favor of farm policy incentives.
    And finally, I support the continuation of a farm bill 
energy title. As I mentioned earlier in my testimony, I sell my 
grain sorghum at a premium by rail. The market is limited to my 
area but stands to improve by generating competition through 
the biofuels industry which already has created a positive 
economic impact in the High Plains area. This Bioenergy Program 
for Advanced Biofuels from Section 9005 of the 2008 Farm Bill 
should be continued as it incentivizes eligible biofuel 
producers to use non-conventional feedstocks such as sorghum.
    Thank you again and I welcome your questions.
    [The prepared statement of Mr. Williams follows:]

Prepared Statement of John Williams, Sorghum, Corn, Wheat, and Soybean 
                       Producer, McLeansboro, IL
Introduction
    I would like to thank the House Committee on Agriculture for the 
opportunity to submit testimony on the next U.S. farm bill and its 
impact on my operation. I am honored to be here and be asked to present 
my views.
    My name is John Williams. I farm with my father and son near 
McLeansboro, Illinois, in Hamilton and White Counties where we raise 
grain sorghum, corn, wheat and soybeans. Grain sorghum is a crop I use 
as a foundation for defense. It is less expensive to plant and much 
more adaptable to varying weather conditions. Grain sorghum has proven 
itself as an integral component in my rotation, providing a resilient, 
dependable crop each year on my third-generation family farm.
    My partners and I appreciate the work put forth by this Committee 
in developing the next farm bill and look forward to working with the 
Committee to craft this set of vital farm policy. Because it is an 
integral part of my operation, my testimony will focus on multiple 
areas of farm policy as they relate to sorghum's safety net.
Protect Federal Crop Insurance
    On my operation, I plan defensively and understand the upside and 
downside of risk. I have seen what can happen to friends and neighbors 
when they do not plan for risk, underscoring the need for meaningful 
risk management tools that producers can utilize. Therefore, my first 
priority is to ``do no harm'' to Federal Crop Insurance, and I feel the 
program should be built upon in the following ways:

   The APH methodology should be reformed and county T-yield 
        system improved so as to reduce the impact of local weather 
        phenomena and allow the producer's insurable yield (pre-
        deductible) to reflect what the producer and his lender would 
        actually reasonably expect to produce in that year. I believe a 
        personal T-yield system, which would allow a producer's APH to 
        more accurately reflect his yield potential, would be a 
        productive way to improve APH.

   I would also support improvement to the product development 
        processes so that there would be a clear pathway to bring new 
        policies, like one for sweet sorghum or high biomass energy 
        sorghum, to market.

   In no case should the crop insurance tools, which are 
        purchased by the producer, be weighed down with environmental 
        regulation or other conditions that fall out of the scope of 
        insurance.

   I would encourage RMA to include sorghum in the trend 
        adjusted yield pilot program. It is inequitable to allow 
        competing crops to have trend adjusted yields while sorghum 
        producers' APHs are left unadjusted.
2012 Farm Bill
    Crop insurance is a safety net in a time of disaster but it also is 
an integral part of my overall marketing strategy. Because of revenue 
protection insurance, I can market aggressively and still be protected 
against market shifts. I remember having a glut of grain in the 1980s 
and I don't want to be caught in a position like that again where it 
affects my bottom line.
    In the 1980s, with high interest rates and low grain prices, my 
crop was worth less than it cost to produce it. While interest rates 
are not the problem today, the cost of basic inputs has skyrocketed 
over the last 2 years. That is why it is critical to have some 
protection in the next farm bill against a steep drop in commodity 
prices; I know input prices are sticky and slow to follow declining 
commodity prices.
    Whether that protection is a reference price system or a revenue 
based system, it is important that it be in the farm bill safety net 
and producers have the option to choose what fits their operation and 
risk appetite the best. In a revenue based program, it is critical to 
have a reference price and plug yields. The reference price will 
protect against a large commodity price drop and plug yields will help 
in times of consecutive years of yield loss.
    With that said, sorghum is an agronomically important crop to my 
farm and likewise to those in the Sorghum Belt. However, it's not 
always the primary crop for many producers, and is extraordinarily 
sensitive to any incentives that are created in the farm program. No 
matter which form of policy is pursued, special care must be taken to 
encourage crop diversity and rotation on the farm and avoid a 
monoculture system which rejects agronomics in favor of farm policy 
incentives. Based on both experience and a producer's understanding of 
the program, I suggest the following:

   A farm bill should not dictate or distort planting 
        decisions. Direct payments are excellent in this regard. SURE 
        or similar whole farm aggregations tend to discourage 
        diversification, which could be problematic for sorghum. Any 
        commodity specific program that is tied to planted acres must 
        be designed with extreme care to avoid creating payment 
        scenarios that incentivize farmers to plant crops with higher 
        inherent value to maximize payments rather than making the 
        wisest possible agronomic decisions.

   A program should be simple and bankable. The recently 
        expired SURE program had too many factors and was not tailored 
        to the multiple business risks producers face--it was not 
        simple. The current ACRE, while offering improved price-based 
        protection, is based on the state's income, not the farm's--it 
        is not bankable, especially in some of the large states where 
        sorghum thrives. The current loan and counter cyclical programs 
        are simple and bankable--unfortunately the 2008 price levels 
        are no longer relevant given current production costs. It is 
        important to me to have a simple, bankable program to take to 
        my lender, should disaster strike my crop.

   A farm bill should be targeted and defensible. It makes 
        sense to provide assistance when factors beyond the producers' 
        control create losses.

   A farm bill should be built to withstand a multi-year low 
        price scenario. Whether in a revenue loss plan, or a price-
        based countercyclical plan, it will be important to have a set 
        minimum price that serves as a floor or reference price to 
        protect producer income in a relevant way in the event of a 
        series of low price years. Ideally, this minimum could move 
        upward over time should production costs also increase.

   A farm bill should allow for transitional and fair 
        reductions to the baseline for all crops. Generally, the least 
        disruptive and most fair way to achieve savings across 
        commodities would be to apply a percentage reduction to each 
        commodity baseline and structure any new program within the 
        reduced baseline amounts.

    The sorghum industry has seen firsthand the impact farm policy can 
have on planting decisions made by producers.
    Specifically evaluating certain revenue proposals, it seems that 
without yield plugs, in a situation with 2 consecutive years of loss, 
the protection quickly drops to a point where the program would have 
little value and would provide almost no protection for my farm. This 
component is necessary to ensure equity among crops because sorghum is 
grown in region with such high yield variability.
    Additionally, a revenue policy in conjunction with the potential 
use of adjusted yields for certain commodities could eliminate the 
important element of risk involved in growing a crop. This would create 
a situation that would greatly distort planting intentions because a 
farmer may be inclined to plant for the largest revenue guarantee as 
opposed to the most prudent agronomic choice.
    Finally, direct payments, while not necessarily tied to a specific 
crop being planted, have proven to be a WTO compliant, efficient 
payment for producers. It is one of the few parts of the current safety 
net bankers have certainty with and will provide financing for our 
producers. However, if the Committee decides to move away from this 
program, it makes it that much more important that successor policies 
be bankable.
Eliminate Dated Pay Limits
    Given the likely possibility that a new farm program would have 
less certainty for the producer (a likely decrease or elimination of 
direct payments) and will therefore be designed to provide assistance 
only in loss situations, the program should not be limited based on 
arbitrary dollar limits, i.e., assistance should be tailored to the 
size of loss. A producer should not be precluded from participating in 
a farm program because of past income experience. Any internal program 
limits on assistance should be percentage-based (i.e., 25 percent of an 
expected crop value) and not discriminate based on the size of farm.
Build Incentives for Sorghum Production into Conservation and Energy 
        Titles
    Sorghum is a highly water efficient crop that works well in various 
rotation systems, spanning from southern Texas to South Dakota. It 
thrives in drought prone areas because, whereas other crops will die 
during a period of prolonged water stress, sorghum will become dormant 
and thrive again upon taking in moisture. And while I rarely experience 
prolonged drought myself, this ability to make a crop under highly 
water deficient conditions allows sorghum to fit easily into farms 
where water is becoming scarcer each year.
    As such, it would be beneficial to strengthen the principles of 
water conservation language in the Ag Water Enhancement Program (AWEP) 
of the 2008 Farm Bill to more specifically encourage planting sorghum 
and other water saving crops. Currently, the program allows incentives 
for switching to lower water intensity crops, but a vast majority of 
payments are going to other projects. There is also place for water 
conservation language in existing Conservation Security Program (CSP) 
and Environmental Quality Incentive Program (EQIP) language, and water 
conservation options should be strengthened wherever practical. Using 
farm bill conservation programs as a transitional support, farmers will 
be able to economically justify switching higher value crops to lower 
water intensity crops over time.
    Additionally, grain, sweet and high biomass forage sorghums are all 
used to produce ethanol under economically viable biofuels 
technologies. I support the continuation of a farm bill energy title 
and specifically encourage continuing the Bioenergy Program for 
Advanced Biofuels from Section 9005 of the 2008 Farm Bill. Section 9005 
allows incentive payments to eligible biofuels producers that use non-
conventional feedstocks, such as sorghum. It has had positive economic 
impact on the Sorghum Belt and served as a water savings incentive 
where aquifers are already depleted.

    The Chairman. Thank you.
    Mr. Asay, you may proceed whenever you are ready.

STATEMENT OF GARY ASAY, PORK, CORN, AND SOYBEAN PRODUCER, OSCO, 
                               IL

    Mr. Asay. Good morning, Chairman Lucas and Members of the 
Agriculture Committee. I am Gary Asay, a farmer from Osco, 
Illinois. Along with my wife, I farm 300 acres of corn and 
soybeans and raise about 9,000 hogs a year. I am licensed to 
sell crop insurance and Livestock Gross Margin insurance.
    Like all pork producers, in the next farm bill, I would 
like to see provisions that help me maintain and strengthen my 
competitiveness. I do not want unwarranted and costly 
provisions that will make it harder for me to compete.
    The U.S. pork industry would like Congress to address 
several issues in the next farm bill, including feed 
availability, comprehensive disease surveillance, new foreign 
market access, risk management, and government intervention 
into the markets. I want to focus my testimony on the latter 
two.
    The U.S. pork industry has seen rapid growth in exports 
over the past decade. It is now exporting more than 25 percent 
of production. Because of that growth and an increased 
likelihood of a foreign animal disease outbreak in the U.S., 
the potential for a catastrophic drop in hog prices is greater 
than ever. Such a drop would adversely affect the U.S. economy 
which garners $35 billion in GDP annually and 550,000 jobs for 
the U.S. pork industry. Producers need better risk management 
tools to protect their operations. USDA has such a tool, a 
program similar to the one for crop farmers called Livestock 
Gross Margin insurance. But it reaches far too few pork 
producers and covers too few hogs.
    Congress and the USDA need to make funding and program 
changes so the program provides inexpensive catastrophic 
insurance coverage. Congress should remove the program's $20 
million cap, $16 million of which is now used for the dairy 
industry and $3 million is used for hogs. Also, USDA should 
lift the 30,000 head limit on the amount of hogs that can be 
insured. These limits are out of step with today's pork 
industry. Last year, only 206,000 hogs were covered. With the 
U.S. pork industry marketing more than 100 million hogs in a 
year, it is clear that the current LGM program affords very 
limited protection to U.S. pork producers. Congress should 
strongly urge USDA to work with pork producers to develop a 
catastrophic insurance product that is more in keeping with 
today's pork industry needs.
    Another issue I would like to raise is government's 
intervention in the buying, selling, and raising animals and 
how that would adversely affect pork producers' 
competitiveness. Mandates, whether pushed by lawmakers or 
activists, must not stand in the way of market-based demands. I 
know some lawmakers continue to discuss banning packer 
ownership of livestock, eliminating forward contracts and 
limiting the number of hogs covered by a contract. I do not 
believe pork producers would be well-served by having Congress 
dictate or eliminate certain types of contracting mechanisms. 
Doing so would force the livestock industry to revert to an 
inefficient system used more than a half century ago.
    Today's U.S. pork industry has a wide variety of marketing 
and pricing methods, including contracts to meet the 
challenging needs of a diverse marketplace. Economics should 
determine the structure of the pork production and processing. 
No economic research has ever shown that structure or marketing 
practices of the industry has harmed producers or consumers. 
Until such research exists, Congress should not impose 
limitations on packer ownership of production, producer 
ownership of packing or marketing contracts.
    Likewise, Federal mandates on production practices, 
including ones that dictate animal housing, would add to 
producers' costs and weaken the competitiveness. That is why 
pork producers oppose Egg Products Inspection Act Amendments, 
House Resolution 3798, which would dictate the size of cages 
for laying hens. The bill would amend the Federal food safety 
law. If imposed on imports, food safety laws must meet the 
World Trade Organization's equivalency principle, which 
requires countries to recognize each other's science-based 
measures as acceptable, even if they are different, as long as 
an equivalent level of protection is provided.
    But the supporters of H.R. 3798 admit that the standards in 
the bill are arbitrary, they are not based on science that 
protects and improves food safety and public health. If imposed 
on imported eggs, they would not meet the World Trade 
Organization's equivalence principle.
    For Congress to intervene in production practices for any 
livestock species with arbitrary standards devoid of scientific 
justification is extremely dangerous precedent for domestic and 
international commerce. The bottom line on the farm bill, 
Congress should craft legislation to help farmers like me 
remain competitive and should avoid provisions that make us 
less competitive.
    [The prepared statement of Mr. Asay follows:]

  Prepared Statement of Gary Asay, Pork, Corn, and Soybean Producer, 
                                Osco, IL
Introduction
    Gary Asay is a farmer from Osco, Ill. Along with his wife, he runs 
Asay Farms, which consists of 300 acres split between corn and 
soybeans. He also raises about 9,000 hogs a year for Cargill and is 
licensed to sell crop insurance and Livestock Gross Margin insurance.
    He serves on the board of directors of the National Pork Producers 
Council, which is an association of 43 state pork producer 
organizations and is the voice in Washington for the nation's 67,000 
pork producers.
    Like all pork producers, in the next farm bill Asay would like to 
see provisions that help him maintain and strengthen his 
competitiveness vis-a-vis foreign competitors; he does not want in the 
bill unwarranted and costly provisions and regulations that will make 
it harder for him to compete in the global marketplace.
The Next Farm Bill
    There are several issues pork producers believes Congress should 
address in the next farm bill that could help the U.S. pork industry 
and farmers like him.

    1. Enhancing programs that keep feed grain prices competitive with 
        the rest of the world would be very beneficial. Feed comprises 
        60-70 percent of my input cost of producing a market hog. (Each 
        market pig consumes approximately 10.5 bushels of corn and 200 
        pounds of soybean meal--that's about 4 bushels of soybeans.) 
        But the rapid development of the corn-based ethanol industry, 
        together with other factors, is threatening the U.S. pork 
        industry's competitiveness and the survivability of producers 
        like me. The markets have rationalized demand for corn over 
        time, but the potential for short-term dramatic price swings, 
        as well as localized feed shortages, has jeopardized the 
        industry's competitiveness and reliability as a domestic food 
        supplier and as an exporter.

    Following passage of the Energy Independence and Security Act 
        (EISA) of 2007, which included a Renewable Fuels Standard 
        (RFS2) that quickly accelerated the mandated production of corn 
        ethanol, pork producers struggled to adjust to rapidly 
        escalating prices and increased volatility in grain markets. 
        This resulted in a reduction in hog production. Congress 
        allowed the long-standing tax subsidies for corn ethanol to 
        expire at the end of last year. But the ethanol industry 
        continues to seek further government support for expanding 
        ethanol markets, calling for the blend rate to be increased 
        from 10 to 15 percent ethanol in motor vehicle fuels, subsidies 
        to finance construction of ethanol pipelines and other 
        infrastructure and adjustments to the RFS2 that would allow 
        corn ethanol to qualify as an advanced biofuel and expand its 
        production mandate.

    The debate over Federal renewable fuels policy has been playing out 
        over continually increasing pressure on domestic and worldwide 
        grain reserves. The 2011 crop, affected by weather conditions 
        in various parts of the Corn Belt, including the loss of 
        significant acreage because of flooding, delayed planting 
        because of wet conditions, drought and excessively hot summer 
        temperatures, came in below initial expectations, with corn 
        reserves at times during the year reaching record lows. That 
        caused tremendous volatility in grain markets, prompted 
        speculative buying and increased the risk of localized corn 
        shortages. Projections for the 2012 crop year show little 
        improvement in total corn reserve carry over, enhancing the 
        financial risk faced by pork producers, who must compete 
        against subsidized users of corn for increasingly difficult to 
        obtain supplies of corn.

    Pork producers have asked Congress and the Obama Administration to 
        consider a variety of responses, including reactivating the 
        Inter-departmental Livestock Task Force to help identify 
        policies to avert a feed-related crisis in the livestock 
        industry, reforming the Conservation Reserve Program to put 
        more land in production and to allow the penalty-free early 
        release of the least environmentally sensitive acres in the 
        event of a feed crisis and making available to producers all 
        USDA and Federal emergency programs and loan guarantees to help 
        them purchase feed should they encounter regional grain 
        shortages. Additionally, the U.S. pork producers support H.R. 
        3097, the Renewable Fuel Standard Flexibility Act, which 
        creates a safety valve that makes short-term adjustments to the 
        RFS in the event of a grain crisis to ensure adequate supplies 
        of feed is available for producers.

    Research and development also are needed to find other energy 
        alternatives, such as using animal manure and fat and biomass, 
        including switchgrass and corn stover. Pork producers want to 
        emphasis the right balance is needed to meet the needs of fuel 
        and feed security.

    2. Developing a world-class disease surveillance system is vital to 
        the continued viability of the U.S. pork industry. The outbreak 
        of H1N1 in 2009 demonstrated the interrelationship of human and 
        animal health when combating new and emerging diseases. From 
        that experience, the U.S. pork industry learned that a more 
        Comprehensive and Integrated Surveillance System (CISS) is 
        needed to ensure the capture of data about a broader range of 
        diseases. The industry began working collaboratively with 
        USDA's Animal and Plant Health Inspection Service (APHIS) and 
        the Centers for Disease Control and Prevention (CDC) to develop 
        a CISS. CDC supports the CISS, and APHIS's Veterinary Services 
        (VS) program has embraced this concept and included 
        comprehensive surveillance as a major objective in its 
        strategic plan, VS-2015. Completion of CISS is critical to 
        maintaining the pork industry's disease-free status, which is 
        critical to maintaining and expanding our exports.

    Disease surveillance is the foundation of disease prevention and 
        preparedness. The threat of new and emerging diseases continues 
        to grow, with scientists continually warning the public and 
        animal health authorities about prevention and preparedness. 
        One of the more grim aspects of these warnings is that many of 
        these diseases are zoonotic and are originating in wildlife and 
        domestic animals. The CISS is designed to provide an ``early 
        warning system'' and to allow for development of response plans 
        in advance of an epidemic. The U.S. pork industry currently is 
        collaborating with APHIS on a pilot project to test 
        implementation of a CISS and to determine how it can be 
        connected to an animal traceability system. Currently, the most 
        significant shortcoming is funds to build the infrastructure to 
        accommodate a more robust system of surveillance. In 2009, the 
        emergency supplemental appropriation, which made funds 
        available to CDC for managing the H1N1 crisis, also provided 
        $25 million to APHIS/VS for swine influenza surveillance. Of 
        that amount, approximately $17 million remains unused, money 
        that could be used to support a surveillance system covering 
        new and emerging diseases would also support the infrastructure 
        for CISS. Although the pork industry has been working 
        cooperatively with APHIS and the agency has committed to 
        developing a CISS, the President's USDA budget for fiscal 2013 
        inexplicably proposed a reduction of $2.6 million for swine 
        disease surveillance. The justification for the decrease is 
        inconsistent with USDA's commitment and the requirements for 
        implementing a CISS. The ability to expand surveillance to 
        include other diseases will increase exports. Reducing 
        surveillance provides other countries the justification to 
        restrict U.S. exports because of inadequate surveillance data.

    U.S. pork producers also support USDA's animal traceability system. 
        An effective traceability system is critical to the national 
        animal health infrastructure and is required for certification 
        by the World Organization for Animal Health (OIE). The ability 
        to quickly trace diseased and exposed animals during a foreign 
        animal disease outbreak would save millions of animals, lessen 
        the financial burden on the industry and save the American 
        taxpayer millions of dollars. With support from all sectors of 
        the pork industry, approximately 95 percent of pork producer's 
        premises already are registered under the USDA livestock 
        identification program. Premises identification is the key to 
        meeting a goal of tracing an animal back to its farm of origin 
        within 48 hours, which would allow animal health officials to 
        more quickly identify, control and eradicate a disease, to 
        prevent the spread of a disease or to make certifications to 
        our trading partners about diseases in the United States.

    3. Expanding markets to U.S. pork products increases producers 
        bottom line and contributes significantly to the U.S. economy, 
        prompting job growth and increasing the U.S. gross domestic 
        product. Pork represents 44 percent of global meat protein 
        intake. far more than beef and poultry, and world pork trade 
        has grown significantly in the past several years. The extent 
        of this increase in global pork trade in the future will hinge 
        heavily on continued efforts to increase agricultural trade 
        liberalization.

    The U.S. pork industry exported in 2011 more than $6 billion of 
        product, which supported more than 50,000 jobs. And the trade 
        agreements with Colombia, Panama and South Korea approved last 
        fall, when fully implemented, will boost U.S. pork exports to 
        those countries by a combined $772 million, add $11 to the 
        price producers receive for each hog marketed and generate more 
        than 10,000 U.S. pork industry jobs. It is estimated that U.S. 
        pork prices were $55 per hog higher in 2011 than they would 
        have been in the absence of exports.

    It is important to emphasize the need to strengthen the ability of 
        U.S. agriculture to compete in the global marketplace. But the 
        downside of growing exports is, of course, the larger economic 
        impact on producers and the U.S. economy should there be any 
        disruption in trade. Pork producers understand this dynamic and 
        recognize that it would be devastating for the U.S. pork 
        sector.

    4. Protecting producers against disruptions in trade is paramount. 
        Produces like Asay need better risk-management tools to protect 
        their operations should exports markets ever be interrupted by 
        a serious animal disease outbreak in this country.

    Such tools are needed now, more than ever. Outbreaks of devastating 
        foreign animal diseases such as foot and mouth, classical swine 
        fever and African swine fever are increasing around the world. 
        The increased presences of disease, along with increasing 
        international travel and trade that move diseases around the 
        world, have created an unprecedented risk to the U.S. pork 
        industry.

    According to a recent study, revenue for the combined beef and pork 
        industries would fall by billions of dollars annually as a 
        result of a foreign animal disease outbreak. The recent free 
        trade agreements with Colombia, Panama and South Korea as well 
        as economic growth in China will lead to continued pork export 
        expansion. But if these export markets are lost and livestock 
        producers are forced to bear the resulting financial harm, 
        there will be thousands of bankruptcies in rural America. 
        Further, USDA is expected to change its traditional approach to 
        dealing with foreign animal diseases from ``stamping out'' to 
        one that includes vaccinating and, potentially, living with 
        diseases for an undetermined time.

    There is a simple solution to the elevated risk in livestock 
        production. USDA has been running a pilot insurance program for 
        hog producers called Livestock Gross Margin (LGM). The program 
        is designed to protect hog producers from systemic risk much as 
        crop insurance programs do for crop producers. The program now 
        is ready for prime time and should be allowed to take on this 
        role. To structure the program to provide inexpensive, 
        catastrophic coverage, Congress would need to remove the $3 
        million cap on swine insurance.

    The $3 million limit on spending has caused USDA to severely 
        restrict the number of head that any one producer can insure. 
        In fact, last year just 205,883 hogs were covered; in 2010, 
        only 263,454 hogs were covered. With the U.S. pork industry 
        marketing more than 110 million hogs a year, it is clear that 
        the current LGM program has little benefit to pork producers.

    The limit on coverage--Congress capped the program for all species 
        at $20 million ($16 million is used by the dairy industry), and 
        USDA set a coverage limit of 30,000 head--is a new development 
        for USDA's Risk Management Agency (RMA) because there is no 
        upper limit on the number of crop acres that can be insured 
        under other RMA policies. There is nothing in the Federal Crop 
        Insurance Act that allows RMA to engage in social engineering 
        of this type. [n fact, the Agriculture Risk Protection Act of 
        2000 states the following:

     Eligible producers:

      Any producer of a type of livestock covered by a pilot program 
            under this subsection that owns or operates a farm or ranch 
            in a county selected as a location for that pilot program 
            shall be eligible to participate in that pilot program.

    The limit on the insurable livestock farm size is unfortunate for 
        two reasons. First, the livestock industry is evolving toward 
        larger production units, and these larger units are essentially 
        prohibited from using the product as a catastrophic policy to 
        cover their output in excess of the numerical limits. Second, 
        the existence of a limit is divisive, potentially pitting 
        smaller units against larger ones.

    Additionally, LGM for swine now is available only for a 6 month 
        period. This is not enough coverage to protect against drought 
        or to downsize an operation. This is easily fixed, and a policy 
        that insures for one year is feasible. This policy would roll 
        over every month so producers always have one year of insurance 
        coverage.

    The owners of LGM have indicated that they are willing to make the 
        changes described above if the $3 million limit is eliminated 
        and the policy is allowed to move beyond pilot status.

    Finally, companies and agents selling LGM are reimbursed based on 
        the premium paid by the producer rather than on the number of 
        policies. Total administration and operation (A&O) 
        reimbursement for companies and agents is set at 22.2 percent 
        of the producer premium. This means that a catastrophic policy 
        that sells at $1 per hog for 500 hogs would have a total A&O of 
        $111. This A&O needs to be split to cover the company's costs 
        and the agent's costs. A typical reimbursement for selling a 
        crop insurance policy is from $500 to $700. This percentage-
        based A&O policy for livestock makes it economically infeasible 
        for the agent to sell catastrophic policies or to sell to 
        smaller producers. One easy remedy is to allow the agent to 
        choose between reimbursement based on a percent of the premium 
        or a fixed per-contract amount.

    Today, because of the growth in exports of U.S. pork products and 
        the increased chances of a foreign animal disease outbreak, the 
        potential for a catastrophic drop in hog prices is greater than 
        ever. And the stakes for the U.S. economy, which garners $35 
        billion annually in gross domestic product and 550,000 jobs 
        from the U.S. pork industry, also are great.

    The U.S. pork industry has done much to protect itself, including 
        increased biosecurity on farms, implementation of a national 
        swine identification program and calls for a comprehensive 
        disease surveillance system, but it needs more. Pork producers 
        encourage Congress to urge USDA to develop a catastrophic 
        insurance product that is more in keeping with today's swine 
        industry needs.

    5. Protecting the environment is a top priority of the U.S. pork 
        industry. Pork producers are committed to running productive 
        pork operations while protecting the environment and exceeding 
        environmental regulations. Pork producers have fought hard for 
        science-based, affordable and effective regulatory policies 
        that meet the goals of today's environmental statues. For 
        producers to meet these costly demands while maintaining 
        production, they believe that the Federal Government must 
        provide through conservation programs of the farm bill. such as 
        the Environmental Quality Incentives Program (EQIP), cost-share 
        support to help them defray some of the costs of compliance.

    The EQIP program has not provided pork producers with enough 
        support to meet all the challenges we face related to 
        conservation and the environment. Producers like Asay, who has 
        used the program, would like to see the scope of projects 
        covered by the program widened.

    Pork producers take a broad view of what it means to be 
        environmentally responsible farmers and business people, and 
        they have embraced the fact that their pork processing 
        operations must protect and conserve the environment and the 
        resources they use and affect. They take this responsibility 
        with the utmost seriousness and commitment. and it is in that 
        spirit that producers would make major contributions to 
        improving their practices through a conservation title of the 
        farm bill.

    Investing in research also is critical to the U.S. pork industry. 
        Producers rely on it for improving swine genetics, testing and 
        deploying new and improved animal vaccines, improving the 
        usefulness of energy production by-products such as distillers 
        dried grains and for further increasing animal productivity. 
        Research also can assist in monitoring diseases and preventing 
        a disease outbreak.

    6. Dictating how the U.S. pork industry buys, sells and raises its 
        animals would severely cripple the competitiveness of pork 
        producers. Mandates--whether pushed by lawmakers or activists--
        must not stand in the way of market-based demands. Producers 
        understand that the issue of banning packer ownership of 
        livestock or eliminating forward contracting continues to be 
        discussed. However, they do not believe that the U.S. pork 
        industry will be well served by having Congress eliminate 
        certain types of contracting mechanisms. This only forces the 
        livestock markets to revert to an inefficient system used more 
        than half a century ago in which livestock were traded in small 
        lots and at prices determined in an open-market bid system. 
        This system was inefficient and makes no economic sense in 
        today's economy. Today, the U.S. pork industry has developed a 
        wide variety of marketing and pricing methods, including 
        contracts, to meet the changing needs of a diverse marketplace.

    Economics should determine the structure of pork production and 
        processing, including the ownership of both. No economic 
        research ever has shown that either the structure or marketing 
        practices of the industry have harmed producers or consumers. 
        Until such research exists, Congress should not impose 
        limitations on packer ownership of production, producer 
        ownership of packing or marketing contracts.

    Likewise, Federal mandates on production practices, including ones 
        that would dictate animal housing systems, would add to 
        producers' costs and weaken the U.S. pork industry's 
        competitiveness vis-a-vis foreign competitors. It is for those 
        reasons that producers oppose the ``Egg Products Inspection Act 
        Amendments'' (H.R. 3798), which would dictate the size of cages 
        for laying hens.

    The bill would amend a Federal food-safety law. If provisions of 
        that law are imposed on imported products, they must meet the 
        World Trade Organization's equivalency principle, which 
        requires governments to recognize other countries' science-
        based measures as acceptable even if they are different from 
        their own, so long as an equivalent level of protection is 
        provided.

    But proponents of H.R. 3798 have admitted that the standards in 
        this bill are arbitrary and were part of a negotiated 
        settlement between an industry group and an animal activist 
        group; they are not based on science that protects and improves 
        food safety and public health. If imposed on imported products 
        (eggs, in this case), they would not meet the WTO's equivalence 
        principle.

    The U.S. pork industry has no doubt that activist groups and 
        special interest groups will be watching this farm bill debate 
        and will attempt to push their particular agendas, which would 
        add regulations to our business practices. Lawmakers must be 
        cautious about allowing these issues to be added to the 2012 
        Farm Bill--a piece of legislation that has been aimed for the 
        past 65 years at maintaining the competitiveness of the U.S. 
        agriculture and livestock sectors.

    The U.S. pork industry has developed and implemented strict 
        standards for animal care and judicious use guidelines for use 
        of animal drugs. These standards and guidelines are now part of 
        the industry's pork quality assurance and transport quality 
        assurance programs. These require producers and handlers to be 
        trained and certified to care and transport our animals with 
        the utmost care and concern. Pork producers do not believe that 
        Congress should legislate on these issues as part of the 2012 
        Farm Bill.

    Congress should craft a farm bill that helps farmers like Gary Asay 
remain competitive in the domestic and world markets.

    The Chairman. Thank you, Mr. Asay.
    Mr. Davis, proceed whenever you are ready.

STATEMENT OF TERRY DAVIS, CORN AND SOYBEAN PRODUCER, ROSEVILLE, 
                               IL

    Mr. Davis. Hello. Good morning, my name is Terry Davis, a 
corn and soybean farmer from Warren County, in Roseville, 
Illinois. Good morning, Mr. Chairman and Members of the House 
Agriculture Committee gracious enough to come before us today 
and those in attendance here today to listen to this important 
discussion. Today, we all share one commonality, this is our 
America. I wish to welcome everyone here today to my America, 
as I live only about 30 miles from this site. To describe this, 
I will use a line from the song by Irving Berlin, ``God Bless 
America, land that I love, stand beside her and guide her.'' I 
come here this morning to tell you how I stand beside my part 
of America, not only to provide for my family but to provide 
this country with a plentiful, healthy, sustainable food 
supply; and hopefully raise enough extra that I can share my 
bounty with others around the world. And I ask you here today 
to be the guide, guide her to share my philosophy with the rest 
of the world.
    I will comment on a story that I will share. Go back to 9/
11/2001. I was traveling to an ethanol plant meeting, the 
formation of a group we were having and I received a phone call 
that we could not meet that day because something had happened 
in New York City and Washington, D.C. I did not yet know at 
that time what that was.
    Later that afternoon, I had the opportunity to receive a 
phone call from my wife that was waiting in an hour and a half 
long line at a gas station to get gasoline for her car because 
of what was going on that day. I was headed to a meeting that 
afternoon, happened to drive by a gas station, saw the line, 
told my wife if that was the last tank of gas she was ever 
going to get, she was better off to come home, because the 
grocery truck would not make it to the store tomorrow morning. 
But to my shock, as I drove to that meeting that afternoon, 
there was no one at the grocery stores, everybody was at the 
gas stations buying gasoline.
    And the reason I think this important for this discussion 
today is that energy was important to us, yes; but why have we 
forgotten about food? If it comes down to a tank of gasoline or 
a loaf of bread, I know which line I am going to be in.
    I would like to talk about the conservation title today. 
This title is often understated in its importance to the 
overall farm bill and I feel it is one of the most critical to 
its overall mission. I served as the Association of 
Conservation District's President here in Illinois and I had a 
column that I used every month to talk about the things that I 
felt were important for the Soil and Water Conservation 
District. I closed that column every month with this closing. 
``As always, remember that this is God's handiwork we are 
entrusted to watch over. Let us make him proud.''
    We all farm the land, we survive off of the bounty of our 
land, but we are just stewards of that land and we are allowed 
the privilege of being the caretakers of the land that we work 
during our lifetime. American agriculture is being tasked with 
a mission never before seen in modern history, that is the need 
to feed and protect more people with limited and in some cases 
dwindling natural resources. Every day in this country more 
land is converted for non-agricultural uses while all the while 
trying to feed a growing population. I am not advocating a 
moratorium on non-ag uses of the productive working land of the 
United States, but refocusing on what is of greater importance; 
cropland, animal production, forestry needs rather than 
development for social uses.
    A strong underlying safety net is going to be necessary for 
creating a sustainable food supply. We need a strong 
commodities title along with a crop insurance program utilizing 
current programs and funding with a few tweaks. I feel that 
this underlying support should come from Federal farm programs 
to ensure that any raw input commodity producer receives enough 
support to ensure that they will again next year be able to 
raise production because of the alteration of this year's 
production, or due to weather or financial condition. This 
level should cover variable costs and protect against 
significantly lower commodity prices and a little bit more.
    The farm bill provisions are intertwined and work together 
to be much more successful than any title will individually. A 
comprehensive, robust title I for commodities ensures continued 
sustainable domestic food supply. A vibrant renewable energy 
title can not only provide energy sources here at home but also 
create environments for natural resource conservation while 
allowing producers to generate income and provide an outlet for 
excess production. This excess production we will always need. 
As before, we have used loan rates and government sponsored 
storage to keep extra production. Today, we have the ability to 
allow farmers to hang onto those reserves and convert them into 
renewable energy sources if not needed as a fuel source. But if 
that crop is never raised, it will never be available if 
needed. A secure, adequately funded conservation title will 
create those opportunities.
    I thank you for this opportunity to be before you this 
morning and look forward to your questions. Thank you.
    [The prepared statement of Mr. Davis follows:]

     Prepared Statement of Terry Davis, Corn and Soybean Producer, 
                             Roseville, IL
    Good morning Chairman Lucas, distinguished Members of the House 
Agriculture Committee, House staff, the other invited panel members and 
all others here in attendance today we all share one commonality this 
is OUR AMERICA. I wish to welcome everyone to my America, as I only 
live about 30 miles from this site, and to describe this I will use a 
line from the song by Irving Berlin; ``God Bless America, Land that I 
love. Stand beside her, and Guide her''. I have come here before you 
this morning to tell you of how I stand beside my part of America, not 
only to provide for my family but to provide this country with a 
plentiful, healthy, sustainable food supply and hopefully raise enough 
extra that I can share my bounty with others around the world.
    I come before you this morning to share from my perspective, a 
perspective that recognizes the importance of a strong equitable 2012 
Farm Bill. This perspective does not want to rewrite farm bill policy 
totally, but rather celebrate its successes and build upon and those 
successes and hopefully craft a new 2012 Farm Bill that addresses the 
needs of the next 5 years and reviews and retires no longer pertinent 
addressed items. This bill has many titles expressed under its banner, 
but I feel that they are all intertwined and dependent upon each other 
for successful implementation of this farm bill. I do not feel that any 
title within the farm bill is any more important than another title; it 
is only with fair deliberation, implementation, and adequate 
appropriation that any farm bill effort will accomplish its goal. That 
goal is of GUARANTEEING the same goals that I have set for myself, to 
provide this country with a plentiful, healthy, sustainable food supply 
and then produce enough extra that I can share my bounty with others 
around the world. I recognize that this task becomes a little more 
complicated at the national level. I also realize that numerous, 
different segments of the populous want to have inclusions in this farm 
bill; but I feel strongly that the goal here in the farm bill is to do 
what government can to make sure that every American has adequate 
access to something to eat and then to have access to the food, energy 
and fiber materials that we need to exist and prosper.
    The area I would like to focus your attention to right now is the 
conservation title. This title often understated in its importance to 
the overall farm bill but I feel it is one of the most critical to its 
overall mission. I have had the opportunity to serve the association 
that speaks for the Soil and Water Conservation Districts here in 
Illinois as its President and as part of my duties was to write a 
monthly column for the organization's newsletter. I closed that column 
every month with this closing, ``As always, Remember that this is God's 
handiwork we are entrusted to watch over. Let's make him proud''.
    I am a Christian, but maybe for sake of this day more important is 
the fact that we are all just stewards that are allowed the privilege 
of being the caretakers of the land we work on during our lifetimes. 
American agriculture is being tasked with a mission never seen before 
during modern history, that of a need to feed and protect more people 
with limited and in some cases dwindling natural resources. Every day 
in this country more land is converted for non agricultural uses all 
the while trying to feed a growing population. I am not advocating a 
moratorium on non ag uses of the productive working land of the USA but 
refocusing on what is of greater importance; cropland, animal 
production, forestry needs rather than development for social uses.
    We only need to look back into our country's history to see how 
important conservation has become. It began a a desire to protect 
things that were unique or in someone's opinion important to protect. 
Our National Park System and other Federal public lands as well as 
state and local public land holdings recognize that resources need 
preserving for future generations. Now as it becomes apparent that the 
working lands of this country are finite and that we need to protect 
them. The challenge here is that we cannot just lock them away but have 
to use them sustainably. The conservation accomplishments that have 
been achieved by this country are nothing short of spectacular, but 
vigilance and continued efforts are paramount to the survival of the 
human species as we wish it to be. Once our natural resources are lost 
our prosperity also will be lost. Conservation for me on my farm means 
this: Preservation of the natural resources not only for my benefit but 
to preserve the ability to utilize those by future generations and by 
using the conservation title of the farm bill in conjunction and along 
with other titles within the farm bill to secure and preserve a stable, 
sustainable food, fiber, and renewable energy supply.
    To understand the working lands let us look back to the 1930's This 
country was trying to rebuild itself as for the first time in our 
country's history we had a large segment of the population that finally 
did not have to work the land for themselves but could have someone 
else furnish those needs for them while they enjoyed prosperity through 
the financial markets. Then that bubble burst in 1929 and sent many 
scrambling back to feed themselves. A result of that was accelerated 
damaging of new marginal lands in production. The lack of understanding 
that marginal lands means just that marginal, the Dust Bowl resulted 
and many more people found themselves struggling to just survive. Throw 
in Mother Nature creating a drought. Hugh Bennett came along and 
championed for working land as some say Theodore Roosevelt did for 
public land preservation. The result being the formation of the Soil 
Conservation Service. As I look at drought indicators today I realize 
that the results of the formation of SCS are what separates the Dust 
Bowl Days from what we experience today. Thus this conservation title 
is very important in the protection of the working lands of the USA. We 
do not need to extensively rewrite this title in the next farm bill but 
continue to focus on what are the critical needs. In my estimation NRCS 
and the EQIP program needs further funding and expansion. This is a 
very efficient and effective way to get conservation on the ground. I 
believe many other programs needs can be accomplished through EQIP and 
allowing prioritization to fit financial budgets. There is an attitude 
currently that since EQIP is receiving funding those funds can be 
rediverted to under-funded special interest programs and this has to be 
curtailed. The NRCS EQIP system already is set up to allow states to 
cater the funding to localized needs thus improving effectiveness of 
monies spent.
    There does need to be a conservation compliance component to 
complement production safety nets. Production agriculture is changing 
and there needs to be compliance to guarantee sustainability and to 
protect the accomplishments that the millions of Federal assistance 
dollars that have already been spent on have achieved. I have noticed 
that as farms get bigger, operations become more specialized, with 
farmers many times not even seeing the land only the tractor operators. 
These operators only have one mission, that is to do what they are 
instructed. The farmer producer may not even be aware of a problem 
occurring until confronted by some outside entity or agency. 
Conservation compliance is the strongest tool in the farm bill to 
ensure good stewardship and wise use of Federal funds.
    A strong underlying safety net is priority one to creating a 
sustainable food supply. The tools of choice are a strong commodities 
title along with a crop insurance program utilizing current programs 
and funding with a few tweaks. All crops need to have a insurance 
program developed around them, including livestock. This underlying 
support should come from Federal farm program funding to ensure that 
any raw input commodity producer receives enough support to ensure that 
they will try again the next year if their production falters because 
of weather or financial conditions. This level should cover variable 
costs and protect against significantly lower commodity prices and 
little more to limit government exposure and allow efficient producers 
to determine who farms the land not who has the best crop insurance 
protection. Livestock producers could be included by a similar 
insurance plan limiting coverage to cost of feed inputs. Producers 
should be allowed to buy up insurance protection to higher levels but 
that risk should not be financed or underwritten by the Federal budget 
but rather an unsubsidized function by private insurance companies and 
risk assessed and rated accordingly by the insurance industry.
    Farm bill provisions are intertwined and working together will be 
much more successful than any title individually. A comprehensive, 
robust title I for commodities ensures a continued sustainable domestic 
food supply. A vibrant renewable energy title can not only provide 
energy sources here at home but create environments for natural 
resource conservation while allowing producers to generate income and 
provide an outlet for excess production. This extra production will 
always be in reserve in case there is a need to use it as a food 
source. But if that crop is never raised it will never be available if 
needed. A secure, adequately funded conservation title will create 
opportunities and preserve and protect natural resources for continued 
future utilization.
    Once we have created this plentiful food supply we need to be able 
to allow all Americans some kind of access to it. Current food aid 
provisions are sometimes abused and probably need attention to weed out 
fraud and abuse. If there were only certain types of purchases that 
could be made would help ensure proper use of funds. Stories like those 
of persons buying soda with Federal food aid assistance and then 
recycling unopened soda cans in automated can recyclers for the cash 
generated by the cans is an example of misuse of a valuable system to 
society.
    Thank you for allowing a taxpayer to comment on this subject. To 
achieve these goals we only need to keep refocusing on what is first 
priority and what financial resources we are willing to commit to 
achieve those goals. Current farm bill programs have accomplished so 
much for the safety and prosperity of the United States. Hopefully the 
2012 Farm Bill will further allow America to be the proud beacon of 
hope for the rest of the world.
    I close my testimony as I did for my informational column:

        ``As always, Remember that this is God's handiwork we are 
        entrusted to watch over.

        Let's make him proud.''



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


        

    The Chairman. Thank you, Mr. Davis.
    Mr. Howell, you may proceed.

   STATEMENT OF DAVID W. HOWELL, CORN, SOYBEAN, PUMPKIN, AND 
                TOMATO PRODUCER, MIDDLETOWN, IN

    Mr. Howell. Good morning. My name is David Howell. I am 
honored to be here this morning to testify.
    I am a farmer from Middletown, Indiana. My wife and I 
started our family farm in 1971. It is our vision that our 
children will be able to carry on. Our family farm is 
approximately 7,000 acres, more than 90 percent of which is 
leased. We grow corn, soybeans, about 500 acres of jack 
o'lantern pumpkins and about 500 acres of processing tomatoes. 
Our tomato production is under contract to a company called Red 
Gold, Inc., an Indiana tomato processing company.
    We are seeking a modification of Federal law that restricts 
Midwestern farmers from growing fruits and vegetables on 
program acres.
    The issue: since 1996, the farm policy has generally 
prohibited production of fruits and vegetables on base acreage. 
However, this was not significant until the 2002 Farm Bill, 
which made soybeans a program crop. This change meant that 
virtually all of the quality farmland in states like Indiana 
and Illinois now have a program base.
    The problem is two-fold.
    First, program restrictions. For example, our farm has been 
personally affected by the prohibition on growing fruits and 
vegetables. Our family is in transition to the next generation 
from my wife and me. We began our processing tomato operation 
in the early 1990s and established our personal production 
history over the years. The regulations as they stand now serve 
to limit the abilities of my children to diversify their 
farming enterprise with specialty crops. In essence, the 
prohibition on planting fruits and vegetables are protecting my 
wife and me from our own children. This seems contrary to any 
goal of encouraging young farmers. Additionally, we are needing 
to change our business structure to ensure an orderly 
generational transfer. When we do, however, our producer 
history will be lost.
    Second, fear of base acreage loss. We have struggled to 
rent ground for growing processing tomatoes and pumpkins over 
the years. In the Midwest, most family farms rely on rented 
acres to grow their crops. I have found that the landlords 
fear, and rationally so, that future base recalculations will 
result in loss of base acres on their farms if they rent for 
processing tomato production.
    H.R. 2675, the Farming Flexibility Act of 2011, would fix 
this twofold problem by allowing an acre-for-acre opt out from 
the program acreage for production of fruits and vegetables for 
processing. Also, it would declare a policy that vegetable 
production for processing on program base acres will not cause 
future loss of base acreage.
    I realize that some in the fresh produce industry do not 
agree with me. They make two basic point. And let me address 
those.
    They suggest that the 2002 Farm Bill restrictions do not 
present a real problem. And that is wrong.
    First, it is a problem because of the restrictions. As we 
attempt to pass along our operation to the next generation, our 
producer history will be lost. And it harms the traditional 
industry that provides safe and economical food to a population 
in need of better nutrition.
    Second, as a threat to base acreage, I and my landlords 
have lost base acres clearly.
    Third, it is a threat to my market. As times goes on, about 
five percent of Midwest vegetable producers stop growing 
vegetables each year. That means that each year, it will be 
harder for our processor market to stay in business because 
they cannot contract for enough production. This year is the 
first time that some of them were not able to contract for 
their production capacity. Eventually, we will lose those 
processors, and the canned vegetable market will be taken over 
by imports.
    Italians can put tomatoes on the East Coast cheaper than 
California canners. South America is already exporting a range 
of vegetables into these states, such as corn, asparagus, and 
tomatoes could not be far behind.
    Clearly, this is a real problem.
    Opponents of H.R. 2675 also claim that it would somehow 
hurt fresh produce producers. And this is also wrong. It would 
not hurt the producers.
    First, it is against the law for us to use or produce to 
sell to the fresh produce market and production would have to 
be for processing only. Penalties for the program are very 
high.
    Second, vegetables for processing are not the vegetable 
varieties produced for fresh market anyway.
    Third, H.R. 2675 would just take us back to the 1996 Farm 
Bill situation prior to the inclusion of oilseed acreage. Under 
the 1996 Farm Bill and even before that, the Midwestern 
processing industry was getting smaller, not expanding.
    There is no way that this would hurt the fresh produce 
producers.
    A final couple of points. I realize and support that direct 
payments may be eliminated in the next farm bill. If that is 
done, we submit that the restrictions on producing fruits and 
vegetables should be eliminated altogether. And obviously, the 
fruit and vegetables we grow for processing go to nearby 
processing facilities, which means jobs in rural America. This 
is important throughout the Midwest.
    Finally, the Federal Crop Insurance Program for specialty 
crops have not received the same refinement and upgrades as 
have traditional commodity crops and should be scrutinized to 
offer reasonable protection for the growers of our nation's 
food supply.
    Thank you for coming to the Midwest to hear us.
    [The prepared statement of Mr. Howell follows:]

  Prepared Statement of David W. Howell, Corn, Soybean, Pumpkin, and 
                    Tomato Producer, Middletown, IN
Introduction
    Good morning. My name is David Howell. I am honored to present 
testimony today.
    I am a farmer from Middletown, Indiana. My wife and I started our 
family farm upon returning home from college, and it is our vision that 
our children and their families will successfully transition what we 
sacrificed and worked hard to establish. Our family farms approximately 
7,000 acres, of which more than 90% is leased. We grow corn, soybeans, 
pumpkins and about 500 acres of processing tomatoes. Our tomato 
production is under contract with Red Gold, Inc., an Indiana tomato 
processing company.
    We are seeking a modification of Federal law that restricts 
Midwestern farmers from growing fruits and vegetables on program acres. 
I am here as one family farmer, but we do concur totally with the 
position of the American Fruit and Vegetable Processors and Growers 
Coalition (AFVPGC).
The Issue
    Since 1996, farm policy generally has prohibited the production of 
fruits and vegetables on base acreage. However, this was not a 
significant problem until the 2002 Farm Bill made soybeans a program 
crop. This change meant that virtually all of the quality farmland in 
states like Indiana now have program base.
    The problem is twofold.
    First, program restrictions. For example, our farm has been 
personally affected by the prohibition on growing fruits and 
vegetables. Our family is in transition to the next generation from my 
wife and me. We began our processing tomato operation in the early 
1990's and established our personal production history over the years. 
The regulations as they stand now serve to limit the abilities of my 
children to diversify their farming enterprise with specialty crops, 
not enhance them as any good agricultural policy would attempt to do. 
In essence, the prohibition on planting Fruits and Vegetables are 
protecting my wife and me from our own children entering the very 
enterprise that will help ensure their success because there is no 
mechanism for them to either earn their own producer history or have my 
producer history transferred to them, even though we have been 
continuously engaged in growing processing tomatoes for nearly 20 
years. This seems contrary to any goal of encouraging young farmers to 
seek alternative crops and provide a more sustainable future, both 
economically and environmentally. Additionally, we are needing to 
change our business structure to ensure an orderly generational 
transition. When we do, however, our producer history will be lost.
    Second, fear of base acreage loss. We have struggled to get rented 
ground for growing our processing tomatoes and pumpkins. In the 
Midwest, most family farms rely on rented acres to grow their crops. I 
have found that landlords who I have approached fear, and rationally 
so, that future base recalculations will result in loss of base acres 
on their farms if they rent it to me for processing tomato production. 
This means that my ability to rotate crops as a good IPM practice and 
to fulfill my traditional contract obligation to Red Gold is severely 
restricted.
    H.R. 2675, the Farming Flexibility Act of 2011, would fix this 
twofold problem by allowing an acre-for-acre opt out from the program 
acreage for production of fruits or vegetables under contract for 
processing. Also, it would declare a policy that vegetable production 
for processing on program base acres will not cause future loss of base 
acreage.
    I realize that some in the fresh produce industry do not agree with 
me. They make two basic points. Let me address those.
    They suggest that the 2002 Farm Bill restrictions do not present a 
real problem. That is wrong.

   First, it is a problem because of the restrictions. As we 
        attempt to pass along our operation to the next generation, our 
        producer history will be lost, because it is not transferable. 
        What my wife and I worked hard to establish under the rules 
        will simply vanish and the ability to lease production acres 
        for fruits and vegetables for processing will artificially be 
        hindered, not by a free market determination, but by a 
        protectionist decree that offers no actual protection but harms 
        a traditional industry that provides safe and economical foods 
        to a population in need of better nutrition.

   Second, this is a threat to base acreage. I have lost base 
        acreage, some of my landlords have lost base acreage, and that 
        has happened to my neighbors who grow vegetables. This base 
        acreage experience is why my landlords generally will not let 
        me grow vegetables on leased land and in some cases 
        specifically prohibit the production of fruits and vegetables 
        because of this issue. My colleagues who grow vegetables are 
        facing the same thing. Most family farms have significant 
        production on leased land.

   Third, this is a threat to my market. As time goes on, about 
        five percent of Midwest vegetables producers stop growing 
        vegetables each year. That means that each year, it will be 
        harder for our processor market to stay in business because 
        they cannot contract for enough production. This year is the 
        first time that some of them were not able to contract for 
        their production capacity. Each year this will get worse. 
        Eventually, we will lose processors, and the canned vegetables 
        market will be taken over by imports.

     Italians can put tomatoes on the East Coast cheaper 
            than California canners. South America is already importing 
            a range of other canned vegetables, such as corn and 
            asparagus.

    Clearly, this is a real problem.
    Opponents of H.R. 2675 also claim that it would somehow hurt fresh 
producers. This is also wrong.

   H.R. 2675 is narrowly tailored. It would not hurt fresh 
        producers.

     First, it would be against the law for us to grow 
            vegetables for fresh markets. H.R. 2675 would only allow 
            opt out for FAV production FOR PROCESSING. The production 
            would have to be for processing.

       Penalties for program violations are very heavy--I would 
            be crazy to intentionally violate program rules. (Penalties 
            are equal to twice the per acre value of the tomato crop 
            produced in violation.)

     Second, vegetables for processing are not the 
            vegetable varieties produced for fresh anyway. My family 
            has been growing processing tomatoes for 20 years and, even 
            though it has been legal to sell them to fresh markets, we 
            never have.

       They are the wrong variety--not right for the fresh 
            market.

       So, there is no market for them.

       Where there is no market, there is no market 
            distribution system.

     Third, H.R. 2675 would just take us back to the 1996 
            Farm Bill situation prior to the inclusion of oilseed 
            acreage. Under the 1996 Farm Bill and even before that, the 
            Midwest processing industry was getting smaller, not 
            expanding.

     There is no way that this would hurt fresh producers.

    A couple final points. I realize that Direct Payments may be 
eliminated in the next farm bill. If that is done, we submit that the 
restriction on producing Fruit and Vegetables should be eliminated 
altogether. Of course, the fruit and vegetables we grow for processing 
go to nearby processing facilities, which means jobs in rural areas. 
This is important throughout the Midwest. Here in Illinois, there is a 
LIBBY'S facility that produces canned pumpkin, pumpkin pie filling and 
pumpkin bread from the pumpkins produced by 70 farmers on 8,000 acres. 
These pumpkin products have seen periodic shortages in recent years due 
to several factors, one of which is the company's difficulty in 
contracting enough acres. So, Farm Flexibility is critically important. 
The Federal Crop insurance programs for specialty crops have not 
received the same refinement and upgrades as have the traditional 
commodity crops and should be scrutinized to offer reasonable 
protection for the growers of our nation's food supply.
    Thank you for your consideration of our views.

    The Chairman. Thank you, Mr. Howell.
    Ms. Weber, please begin whenever you are ready.

     STATEMENT OF JANE A. WEBER, SPECIALTY CROP PRODUCER, 
                         BETTENDORF, IA

    Ms. Weber. Chairman Lucas, Representative Boswell, and 
distinguished Members of the Committee, I appreciate the 
opportunity to speak today about the impact of the farm bill 
from the perspective of a small farmer. My name is Jane Weber 
of Weber Farm, row crop farmer, specialty crop producer, and 
farmers' market vendor from Scott County in east central Iowa. 
I serve as a Soil and Water Conservation District Commissioner 
in my county to conserve the soil and improve water quality. 
There are several parts of the 2012 Farm Bill that are 
important to our farm, specialty crop producers, and 
conservation.
    First, the conservation title: the farmland in our area as 
well as my own farm historically benefitted from locally-led, 
incentive-based conservation practices of CRP, EQIP and various 
other conservation programs. Producers rely on the NRCS for 
technical help to develop conservation plans, design 
conservation practices, make wetland determinations, and 
provide guidance on highly erodible lands. Weber Farm has 
installed contour buffer strips, filter strips, grass 
waterways, tiling, and farmstead windbreak. Conservation 
technical assistance, funded by the NRCS, is critical to 
conservation practices getting installed through Soil and Water 
Conservation Districts in Iowa and to farm bill programs being 
implemented. Workloads in the USDA Service Centers remain high 
for conservation programs, while funding for CTA remains 
critically low. Without technicians, NRCS and SWCDs cannot 
deliver conservation programs.
    Four years ago the Cedar and Iowa Rivers flooded along with 
the Mississippi River, devastating the towns of Cedar Rapids, 
Iowa City, Columbus Junction and Oakville in eastern Iowa, 
along with the cropland in the water's path. Where conservation 
structures were not in place, soil was carried downstream along 
with the floodwaters. However, where two, three or more 
conservation practices occurred on farmland, the water damage 
was not as significant. Less soil and water left the area. In 
other words, the conservation practices worked.
    Last year, it was the Missouri River that flooded in 
western Iowa. More conservation practices installed before a 
disaster may protect our valuable resources from disaster. In 
the spirit of making the most economical choice, Congress 
should adequately fund conservation today to avoid the 
increased costs of repair tomorrow and in the future.
    Second, the nutrition title: as a farmers' market vendor, I 
participate in the Senior Farmers' Market Nutrition Program 
that provides fresh locally grown produce to low income seniors 
at the farmers' markets. This program has increased the 
profitability of producers and is appreciated by the consumers. 
Each year, I have inquiries from senior citizens on how to 
obtain vouchers and I have observed how the seniors frugally 
utilize them to stretch throughout the season. As Iowa's 
population is aging, I am seeing more demand for participation 
in the Senior Farmers' Market Nutrition Program. as well as an 
increasing need per person. In these economic times, seniors 
with fixed incomes are having difficulty eating nutritiously. 
Just as good nutrition helps all of us maintain good health, it 
would be cost-effective to help these seniors eat more fresh 
fruits and vegetables for better nutrition to keep them 
healthy.
    Third, the horticulture title: specialty crops are an 
important part of agriculture that allow farmers to diversify. 
Specialty Crop Block Grants try to help increase this 
competitiveness of specialty crops. In our state, they have 
supported educational efforts on food safety, research by our 
universities and marketing efforts that encourage consumers to 
choose locally grown products. I have written and received 
grants for two organizations. I have also served on a grant 
review board in our state. The grant process needs to be 
simplified so that more farmers' markets may access funds for 
marketing efforts to encourage consumers to buy fresh produce. 
These markets are the front lines in the direct marketing of 
specialty crops.
    A strong conservation title is important for our production 
agriculture. NRCS and SWCDs are the key delivery system at the 
local level. The availability of program funding and the CTA 
allow the implementation of conservation practices as long-term 
investments in the protection of our natural resources.
    Farm policy also must consider the growing consumer 
interest in fresh, healthy local food and provide access for 
low income populations. Specialty crop producers need a mix of 
programs aimed at enhancing profitability and an innovative 
marketing strategy to promote specialty crops and to educate 
consumers. The importance of passing the farm bill before break 
allows agencies to be prepared and producers to plant and make 
informed business decisions.
    Thank you.
    [The prepared statement of Ms. Weber follows:]

     Prepared Statement of Jane A. Weber, Specialty Crop Producer, 
                             Bettendorf, IA
    Chairman Lucas, Ranking Member Peterson, and distinguished Members 
of the Committee, I appreciate the opportunity to speak today about the 
impact of the Food, Conservation, and Energy Act of 2008 from the 
perspective of a small farmer. My name is Jane Weber of Weber Farm--row 
crop farmer, specialty crop producer, and farmers' market vendor--from 
Scott County, in east central Iowa. I serve as a Soil and Water 
Conservation District Commissioner in my county to conserve the soil 
and improve water quality. There are several parts of the 2012 Farm 
Bill that are important to our farm, specialty crop producers, and 
conservation.
Conservation Title
    The farm land in our area as well as my own farm has benefited from 
the locally-led, incentive-based conservation practices of the 
Conservation Reserve Program (CRP), Environmental Quality Incentives 
Program (EQIP), and various other conservation programs. Producers rely 
on the Natural Resources Conservation Service (NRCS) for technical help 
to develop conservation plans, design conservation practices, make 
wetland determinations, and provide guidance on highly erodible land 
(HEL). Weber Farm has installed contour buffer strips, filter strips, 
grass waterways, tiling, and a farmstead windbreak. Conservation 
Technical Assistance (CTA) funded by NRCS is critical to conservation 
practices getting installed through Soil and Water Conservation 
Districts (SWCDs) in Iowa and to farm bill programs being implemented. 
Workloads in USDA Service Centers remain high for conservation programs 
while funding for CTA remains critically low. Without technicians, NRCS 
and SWCDs can not deliver conservation programs.
    To protect our lakes and clean up our creeks and rivers from 
sediment and nutrient delivery, conservation programs are integral to 
improving water quality. As an IOWATER volunteer that participates in 
spring and fall snapshot water samplings in our county for 9 years, I 
have seen the results identify conservation needs in the community that 
our SWCD was able to help alleviate with conservation practices cost 
shared with landowners. As an Iowa Watershed Improvement Review Board 
(WIRB) member, I have seen the partnerships of NRCS, DSC, EPA 319, and 
WIRB work together to improve water quality in projects throughout our 
state.
    Four years ago the Cedar and Iowa Rivers flooded along with the 
Mississippi River devastating the towns of Cedar Rapids, Iowa City, 
Columbus Jct., and Oakville in eastern Iowa along with cropland in the 
waters' path. Where conservation structures were not in place, soil was 
being carried downstream along with the flood waters. However, where 
two, three, or more conservation practices occurred on farmland the 
water damage was not as significant. Less soil and water left the area. 
In other words, the conservation practices worked.
    Last year it was the Missouri River that flooded in western Iowa. 
While the 2012 Farm Bill needs to address Emergency Conservation 
Program (ECP) as it funds the technical assistance and rehabilitation 
of farmland after a natural disaster, more conservation practices 
installed before a disaster may protect our valuable resources from 
disaster. In the spirit of making the most economical choice, Congress 
should adequately fund conservation today to avoid the increased costs 
of repair in the future.
Nutrition Title
    As a farmers' market vendor I participate in the Senior Farmers' 
Market Nutrition Program that provides fresh, locally grown produce to 
low income seniors at the farmers' markets. This program has increased 
the profitability of producers and is appreciated by the consumers. 
Each year I have inquiries from senior citizens on how to obtain 
vouchers and I have observed how the seniors frugally utilize them to 
stretch throughout the season. As Iowa's population is aging, I am 
seeing more demand for participation in the Senior Farmers' Market 
Nutrition Program as well as an increasing need per person. In these 
economic times, seniors with fixed incomes are having difficulties in 
eating nutritiously. Just as good nutrition helps all of us maintain 
good health, it would be cost effective to help these seniors eat more 
fresh fruits and vegetables for better nutrition to keep them healthy.
    I also participate in the Supplemental Nutrition Assistance Program 
(SNAP) utilizing an electronic bank transfer (EBT) wireless machine at 
the farmers' markets. Many of the farmers' market vendors who tried 
this program at the onset have discontinued due to the cost of 
transactions for SNAP. A client could buy a $.35 zucchini making the 
transaction fees higher than the purchase. A vendor actually would lose 
money after paying the monthly fees and transaction fees that are not 
allowed to be reimbursed. If all the costs and transaction fees 
involving the SNAP could be reimbursed, more vendors would participate 
in the program. However, it may not be cost effective as I have had a 
month where the monthly fees were higher than the total sales for SNAP 
as well. It would take more consumer education to make this program 
more beneficial to all concerned.
Horticulture Title
    Specialty crops are an important part of agriculture that allow 
farmers to diversify. Specialty Crop Block Grants try to help increase 
the competitiveness of specialty crops. In our state they have 
supported educational efforts on food safety, research, and marketing 
efforts that encourage consumers to choose locally grown products. I 
have written and received grants for two organizations, the Mississippi 
Valley Growers' Association, Inc. and the Iowa Farmers' Market 
Association. I have also served on the grant review board in our state. 
The grant process needs to be simplified so that more farmers' markets 
may access funds for marketing efforts at their local level to 
encourage consumers to buy fresh produce. These markets are the front 
lines in the direct marketing of specialty crops. The current grant 
process has become more difficult for a farmers' market to obtain. A 
professional grant writer and/or administrator is needed so 
universities and other organizations with access to grant writers are 
more likely to apply and consequently, receive the grants.
Conclusion
    Many farm bill programs have an impressive success rate. A strong 
conservation title is important for production agriculture. NRCS and 
SWCDs are the key delivery system at the local level. The availability 
of program funding and CTA allow the implementation of conservation 
practices as long-term investments in the protection of our natural 
resources.
    Farm policy must consider the growing consumer interest in fresh, 
healthy, local food and provide access for the low income population. 
Specialty crop producers need a mix of programs aimed at enhancing 
profitability and an innovative marketing strategy to promote specialty 
crops and to educate consumers. The importance of passing the farm bill 
before break allows agencies to be prepared and producers to plan and 
make informed business decisions.

    The Chairman. Thank you.
    I now recognize myself for 5 minutes.
    Mr. Asay, let us visit for a moment. You not only are a 
producer of feed grains, but you are a consumer of feed grains. 
And one of the issues that has come up time and time again in 
my home area in the northwestern half of Oklahoma is the 
question about having enough grain for beef cattle and pork and 
poultry operations. Tell me what your observations in the last 
few years have been. Are we meeting the demand, along with our 
needs for energy production, are we meeting the demand of our 
livestock industries in this country?
    Mr. Asay. Mr. Chairman, the last 2 years, we have had some 
tight carryovers. There have been some concerns for pork 
producers at times about feed availability. We have made it 
through the last couple of years without any major problems. 
Pork producers have done a lot of change in diets, use a lot of 
DDGS to substitute for corn and soybean meal in the diets to 
help get through in these periods and help make the adjustments 
needed. But there is still concern that sometimes if we have an 
extremely short crop that the availability of feedstuffs may be 
limited if we do not have some kind of adjustment in the fuel 
standard.
    The Chairman. Putting your other hat on, Mr. Asay, as a 
grain producer as well as a feeder, the number of acres in the 
CRP program, I think reflecting grain prices in the re-
enrollments, are coming down slowly. Does that concern you as a 
grain producer if your fellow farmers around the country are 
taking the signal it is time to produce more and putting some 
higher quality land back into production?
    Mr. Asay. It ultimately could put some pressure on the 
grain prices, but the market is the one making the decision for 
producers to bring that out, so I believe it is reacting to 
market factors.
    The Chairman. Since CRP is, after all, a voluntary 
participation program you bid into and stay with a 10 year 
contract.
    Let us touch on one other subject, Mr. Asay, and then I 
will turn to some of your colleagues on the panel.
    You mentioned H.R. 3798. Some folks describe that as a bill 
attempting to take a negotiated agreement between a trade group 
in one region and an animal rights group, and impose it on the 
rest of the country. Is that a fair assessment?
    Mr. Asay. I would agree on that assessment. It's fairly 
scary to producer animals to have two groups try to set some 
standards on a regulatory issue. I would rather see market 
factors influence how animals were raised in this country.
    The Chairman. Fair enough.
    Mr. Williams, in your statement, you discuss the importance 
of having a reference price and a plug yield built into any 
revenue-based program. Could you expand a little bit more on 
that, why that matters?
    Mr. Williams. The reason it matters is because if you have 
consecutive bad years, 3 or 4 bad years of either drought or 
excessive wet weather, as your yields, your personal yields go 
down, every year your guarantees keep going down. So the plug 
yield would be something like a county T-yield or something of 
that nature, and the price would be somewhere along the revenue 
price of the crop insurance yield that would be there to 
coordinate with the plug yields to keep your dollar--your 
revenue guarantees level.
    The Chairman. Thank you for that very clear and 
understandable explanation for the record. This is a topic 
being much discussed in the hallways of Congress these days.
    Ms. Weber, you mentioned conservation and your involvement. 
I must tell you as a Member of Congress who represents the part 
of the great country that probably was more centered in Mr. 
Steinbeck's book in the 1930s than any other--and we will not 
discuss what we think of that in northwest Oklahoma, but that 
is a whole different subject--we too are very fond of voluntary 
conservation programs. We too are very fond of the upstream 
flood control programs and are very focused on rehabilitating 
those structures. The chief challenge we have, as was alluded 
to several times today, is with the number of dollars available 
to us coming down, the tough decisions that we have to make to 
meet our part of the overall deficit reduction efforts that the 
United States House is prioritizing.
    Could you expand for just a moment on why, as you so 
clearly pointed out in your testimony, why conservation is a 
long-term investment that benefits not just tomorrow but 
decades from now?
    Ms. Weber. The key word right now is----
    The Chairman. And that is called baiting a witness 
actually, for the record.
    [Laughter.]
    Ms. Weber. The key word is sustainability; whether it is in 
specialty crops or other types of production agriculture, 
sustainability. The only way you are going to have 
sustainability is if you have that good topsoil to produce the 
product. And if it is going downstream in weather-related 
events and causing hypoxia in the Gulf and whatever, we are not 
going to have sustainability. We have to keep the ground where 
it is, you have to keep the rain where it falls in order to 
have sustainability and good production agriculture.
    The Chairman. Well put. If I did not know better, I would 
think you were a constituent of the 3rd District of Oklahoma.
    I now turn to the outstanding--my time has expired--to the 
gentleman from Iowa for his 5 minutes. Mr. Boswell.
    Mr. Boswell. Well, thank you, Mr. Chairman. It has been an 
interesting presentation. Thank you all very, very much. I told 
the Chairman I would give up some of my time to continue that 
last question about conservation compliance and so on. So you 
may want to comment about that.
    But I think that is an interesting point there, Ms. Weber, 
and I appreciate you coming here representing, seems to me like 
reading your statement, all aspects of agriculture really, not 
just one--specialty crops and production farms and so on at 
your family operation.
    Kind of brings out the point we may have said earlier, I 
have said so often, we are not making more land, we are just 
making a lot more people and how are we going to take care of 
that as we go down the road. And I think you are kind of 
thinking about that apparently from what you have said.
    I go back to you, Mr. Howell, you talk about your family 
operation and so on and wanting to take some of your program 
land out to put it in specialty crop. We have not had a lot of 
discussion about that, but I have a feeling that quite a few 
Members of our Committee would probably object to that, but I 
do not know that, we have not talked about it I do not think, 
have we, Mr. Chairman, at all? So this is an interesting point.
    It seems to me like if I go back to my days when we were 
starting farmers' markets and so on, that this was one way to 
get people to grow specialty crops. They were not going to have 
somebody like me at that time, it was about all I could do, 
capable of doing, to row crop. But a lot of people said well, I 
think I will set this 20 acres aside and use my equipment and I 
will just produce a whole lot of onions or a whole lot of this 
or a whole lot of that. Kind of got that situation stated. So 
we may have a whole new discussion going on here, I do not 
know.
    You have been raising tomatoes a long time and you make 
your point: how do we not go back, we are bumping heads again, 
Mr. Chairman, where we have people wanting to do different 
types--what I have said, there is room for everybody because of 
the population growth and need for food. How do we do that?
    Mr. Howell. Well, it was not an issue until the 2002 Farm 
Bill, when they made soybeans one of the program crops. Before 
that, we used the soybean ground and we were free to use that 
for production of vegetables. When they changed that and added 
that in as a program crop, that is when it went out of hand. So 
it is not really--it is a relatively current short-term 
problem, but it needs to be rectified.
    Mr. Boswell. Let us just dialogue for a minute, maybe it is 
a short-term problem and it will solve itself, I do not know. 
It is interesting, I guess we may hear more about it if this is 
indicative of what we will hear in other places. But you know, 
the farmers' markets have become a very successful thing, and 
to start out it was just seasonal and now a lot of places it is 
year round. And I am not sure how they get the produce there in 
all cases, but nevertheless, it is very, very popular. People 
want it, obviously. And then we see what the market is for 
corn, beans, wheat and so on. There does not seem to be any 
problem there, particularly as we have some of it going into 
fuels, alternatives, and that nature. I am just not sure how we 
get there without destroying something that I think across the 
country they are pretty proud of, and that is people that are 
going out and doing the fruits and vegetables and bringing it 
to town and selling it fresh on the farmers' market.
    Mr. Howell. I have to apologize, I am not sure I understand 
exactly where you are going. If you are thinking I am against 
my colleague to the left----
    Mr. Boswell. I am not sure either.
    Mr. Howell.--I would like to have that part eliminated for 
both the fresh and the processing and I think that would be 
fine. And my suggestion is if you take direct payments away, 
why there is really no incentive, in my view, to keep that 
restriction on. Again, it just happened in the 2002 Farm Bill 
when they did that.
    Mr. Boswell. Ms. Weber, would you care to make any comment 
in this discussion?
    Ms. Weber. Basically, for specialty crop producers--let me 
take for an example a muscatine grower in Iowa that produces 
watermelons. They need a 10 year change on the crop. I mean 
with most of things we grow, there is maybe a 3 year rotation. 
So you have to have other acreage to rotate it with. So they 
are renting other people's property and like he is saying, 
without the soybean ground to rotate to, if that was not clear, 
he did not have that ground to rotate to any more because that 
was part of the program. Is it that it?
    Mr. Howell. Well, that is part of it. We have to be 
responsible growers, we have to rotate our crops and so we have 
to have 3 years out before we can grow a tomato crop. And so we 
need--I am not sure where the discussion is going again, but we 
need to have that extra ground to--soybeans and corn in a way, 
even though we raise a lot of them, are a vehicle to allow us 
to raise the corn and soybeans and then when you penalize the 
landowners for letting us grow those vegetable crops, nobody is 
going to win.
    Mr. Boswell. I yield back.
    The Chairman. The gentleman yields back. And I would note, 
if you listen to my friends on both the left and the right, the 
direct payment issue may take care of itself soon.
    With that, I recognize the gentleman from Texas for 5 
minutes.
    Mr. Conaway. Thank you, Mr. Chairman.
    Mr. Davis, I appreciate your opening comments reflective of 
what a food shortage would look like, because most Americans 
take it for absolute granted that--well first off, most 
Americans think food just shows up at the grocery store by 
magic. They do not appreciate the hard work and sweat equity 
and the risks that you and your colleagues on the panel and I 
suspect most folks in this room, take every day and every year. 
There is this reliance that you put on a rational, fully 
resourced safety net working constantly in terms of trying to 
figure out what the best one is and it is in a constant state 
of flux.
    Previous hearings, we have had people talk about farm 
labor, we talked a little bit about child labor, but farm labor 
in general. None of you mentioned that in your testimony. Are 
you adequately, have a workforce that is adequate to meet your 
needs, and that is not an issue in your area? Any of you?
    Mr. Davis. Myself, with my family operation, both my 
children are becoming involved with the operation. My son has 
grown up on the farm and is now home today taking care of 
things while I am here with you.
    I think we need, for continuation of development of ability 
to create something, we need that early training program. We 
send our children to school when they are 5 and 6 and 4 even 
but now we are saying that a child cannot learn how to work 
until they are 16 or 18.
    Mr. Conaway. I guess I was asking comments for adults, 
maybe the specialty crop guys, Mr. Howell and Ms. Weber, do you 
have an adequate workforce to harvest your crops at the right 
points in time?
    Mr. Howell. No, sir. I think that is a problem with all of 
agriculture, if you really look under the covers. If you think 
about the seed industry where detasseling is done, if you think 
about the meat processing area where there is need for workers, 
livestock producers in the confinement facilities. There is a 
bad shortage, significant shortage and growing shortage of 
people able and willing to do the work. And I know it is not 
you gentlemen's responsibility in this Committee, but the whole 
issue of the undocumented workers and the immigration policies 
is really presenting a problem particularly for the 
horticulture, but across the board. And it is a train wreck 
getting ready to happen. Everybody wants to play by the rules 
and we do play by the rules, but there is a problem that we 
just need to face up to and provide us with an adequate supply 
of documented labor one way or another through a program that 
will let us harvest the crops. In the southern states, Georgia 
and those areas, and the Arizona issues, there are problems on 
both sides. But agriculture is running out of hand labor.
    Mr. Conaway. Can anybody give us an example of where--the 
regulatory burden that you have to cope with. We can all talk 
about regulations, but specific regulations that you are having 
to deal with that are either new and/or antiquated that cost 
you money and can you give us some specificity with respect to 
those regulations that you think are no longer necessary or 
were not necessary to begin with?
    Mr. Davis. Regulations, one that comes to mind, I 
understand that the Secretary has taken this under advisement 
to make a change right now, but something as simple as a cover 
crop on cropland. That if I do not plant a program crop to that 
cropland as its first crop, it becomes ineligible for program 
payments. So if I was to seed a rye grass crop on a cornfield 
and when I went into my FSA office to sign up for a farm 
program, that I would state that I have it seeded to rye now as 
a cover crop, that becomes my crop acreage for that year. Also, 
vegetables are ineligible, there are cover crops in turnips and 
radishes right now that are very beneficial to the ground, 
great reduction in the necessity of tillage, but because those 
crops are planted, it technically makes those crops ineligible 
for farm program payments, just based on the rules. So that is 
one regulation.
    Another regulation that does come into play that I and my 
family, we work closely with my in-laws, I am allowed to have 
my children operate machinery on my farm, but I cannot have my 
nephew come onto my farm and operate the same machine, even 
though he has the same experience, because we do not have the 
same relationship.
    Another area that has come into mind of regulations, 
workmen's comp back on the farm has become a serious 
consideration for me if I bring in outside labor. That is more 
of a state issue with the Illinois workmen's comp law, but that 
is another regulation that is coming.
    And also, additionally--we could go on and on--but spraying 
of farm pesticides looks to be an issue that is coming to a 
head here very shortly that will restrict me.
    Mr. Conaway. Thanks.
    It would be interesting, Mr. Chairman, if we could find who 
in the Department of Labor actually wrote the farm labor laws, 
rules and regulations, to see if they have ever even been on a 
farm or could spell farm.
    (Laughter.]
    Mr. Conaway. Thank you, Mr. Chairman, I yield back.
    The Chairman. The gentleman's time has expired.
    The chair now recognizes the gentleman from Illinois, Mr. 
Hultgren for 5 minutes, please.
    Mr. Hultgren. Thanks again, Mr. Chairman.
    I mentioned a little bit earlier just the gratitude that I 
have had of working with our Senators, I mentioned a couple 
people from Senator Kirk's office. Also, it has been a 
privilege to work with Senator Durbin's office. I also wanted 
to recognize I think Brad Middleton and also Bart Ellefritz are 
here from Senator Durbin's office. So thank you so much. Also 
glad that our acting Director of Agriculture, a good friend of 
mine, former colleague in the Illinois House, Bob Flider is 
also here as well, so thank you so much for being here today, 
and all your work.
    Again, I want to thank the panel for your information, it 
has been very helpful.
    A few questions. Mr. Williams, I wondered if you could--you 
have expressed in your testimony frustration over both the SURE 
and the ACRE programs. I wondered if you would be able to 
elaborate a little bit on these issues and speak to how you 
might recommend that we could simplify these and make them more 
beneficial, more useful.
    Mr. Williams. With the ACRE program, as I understand it, 
back--and I also alluded to the fact that I remember back in 
the 1980s when the prices were very low, the ACRE program would 
have worked very well. But we have been blessed to have more 
exports so our prices have risen higher, the ACRE program just 
was not feasible, it did not pay the producer.
    My experience with the SURE program, we have been paid 
throughout that. Whenever you get a yield loss and you draw 
crop insurance revenue from we will say 2008 crop year, then 
you will come back in 2009 and receive payment through SURE the 
following year. In my personal case, we farm in two counties, 
we did have a SURE loss in Hamilton County, but the crop was so 
great in White County that it kicked out the Hamilton County 
loss that was ineligible. To me--a lot of our landlords carry 
crop insurance as well and so because we were blessed to have a 
great crop in one county, but we were unfortunate in another 
county, the county that had the loss, we should have received 
the payment on that. And to me, that does not seem right. I 
realize the average was there and for us farming in both 
counties, we were all right. But the landlords were penalized 
because of our success in the other county. So to me, that was 
not very fair or equitable.
    Mr. Hultgren. Thank you.
    Mr. Asay, you spoke about the importance of developing a 
disease surveillance system and the work that the pork industry 
has done in conjunction with USDA's APHIS and also Centers for 
Disease Control. I wonder if you might be able to talk a little 
bit about the Comprehensive and Integrated Surveillance System 
and give us an update on your progress on that.
    Mr. Asay. We are working to try to update the system. There 
is a lot of work that has been done in the event a foreign 
animal disease does come to this country, as to what agencies 
have jurisdiction over various aspects. At one point, it was 
thought that we would destroy the animals and then bury those 
animals to try to control disease, but we have seen in other 
countries that has not worked--England and South Korea, for 
example. If we were to bury animals, we would have to get okay 
from the EPA at those sites, that those sites could handle 
that. So now it looks like we have to vaccinate and control 
with vaccine the disease. First off, you would have to have 
enough vaccine for that disease on hand to control that. And 
also you would have to live with the disease for a number of 
years in order to get it under control again.
    But we are working, trying to get all the agencies to work 
together and I believe right now, the first agency that would 
have control would be the Department of Homeland Security to 
make sure it was not a terrorist act. And after they ensure 
that, then it goes on to the next one. So there are a lot of 
steps involved, a lot of agencies involved, a very complicated 
matter.
    Mr. Hultgren. I wonder if you could give us an update on 
the pilot program USDA has been running with hog producers 
called the Livestock Gross Margin, LGM.
    Mr. Asay. Okay. Actually there was a pilot program created 
in Iowa a few years ago, in 2008 it expanded to some other 
states and last year it just expanded to the 48 continental 
states. It was set up--it is a program that uses futures prices 
to set the expected margins and uses the price of the hogs 
minus the cost of the feed with various formulas, and ensures 
that margin there. That is the concept, and it works for 
producers at times. It has helped in the management but there 
is a lot of cost involved in this and we would like to see some 
changes where it can insure larger operations and, as I 
mentioned, there were 200,000 hogs insured in the past year. I 
personally worked with producers to sell about 10 to 15 percent 
of that insurance. It has been a struggle working with agencies 
sometimes to try to clarify things also on this product.
    Mr. Hultgren. My time has expired. I did just want to 
mention real quickly, Mr. Howell, I appreciate your information 
and discussion on the Farming Flexibility Act of 2011, 2012, 
H.R. 2675. I know I am a cosponsor along with Congressman 
Schilling and Congressman Johnson here from Illinois, and I 
know that would be something very beneficial to Midwestern 
farmers and Midwestern families.
    So my time is up, but thank you so much for the discussion. 
We certainly will be talking about that some more.
    Mr. Asay. Well, thank you for your help.
    Mr. Hultgren. I yield back.
    The Chairman. The gentleman's time has expired.
    The chair now recognizes for the final 5 minutes of 
questions, the gentleman from Illinois, Mr. Schilling.
    Mr. Schilling. Thank you, Mr. Chairman.
    What I would also like to point out is that what is nice 
about the Agriculture Committee is that this is truly a red, 
white, and blue Committee, it is not Democratic or Republican. 
And also, a good friend of ours, Lieutenant Governor Simon has 
a couple of her folks here, Christina Rogers and Laura Kissell, 
we appreciate them being here today also.
    I want to go back to Gary, your comment here on a question 
that Mr. Hultgren was asking. Do you have some suggestions on 
how Congress can strengthen the Livestock Gross Margin 
insurance?
    Mr. Asay. Okay, there are various aspects there. I just 
recently learned that the loss ratio on the LGM has been in the 
neighborhood of .33 to .37. There were some changes this year 
in the crop insurance program to try to get corn and soybeans 
closer to the 1.00 loss ratio. If we can somehow get that loss 
ratio improved, that would improve the aspects of the producer 
making that work for them to actually better protect them for 
the premium invested in that.
    Also, one other aspect: This insurance is only available on 
the last Friday, business Friday, every month from 
approximately 4:30 p.m. until 8:00 p.m., the following 
Saturday. Not many crop insurance agents or producers want to 
mess with trying to figure out the margin and the premium on 
the weekend. That has been a limiting factor also.
    Mr. Schilling. Very good.
    And then can you further tell the story of conservation and 
its part of your operation? Can you basically elaborate further 
on how programs such as EQIP can be strengthened for us?
    Mr. Asay. Yes. I have benefitted from EQIP funds in the 
past, it has helped me invest in manure-hauling equipment. The 
manure spreader that I use has a controller on it and a monitor 
where I can control how much manure, how many gallons go on per 
acre. I also test the soil and the manure for an analysis and 
use the crop usage to determine how much manure I apply. It has 
also helped me with windbreaks on the farm to try to protect 
the wind from blowing through. Also for manure containment 
facilities. I think it is a very good program out there and we 
possibly need to look in some areas to expand a little bit to 
better help livestock producers.
    Mr. Schilling. Very good.
    And then, Mr. Davis, recently, there was a nice article in 
the Galesburg Register-Mail where a local farmer, David Serven, 
who actually is here today, said ``Crop insurance to me is the 
safety net we need to keep there.'' I am hearing this from the 
majority of farmers that I talk to.
    My time is almost up, but what are your thoughts on 
strengthening crop insurance here in Illinois, sir?
    Mr. Davis. The thoughts of Mr. Asay there on the 
realignment of the loss ratio I think would be very beneficial 
to crop insurance usage here in Illinois. My county and my own 
instance, my loss ratio is .25. If 1.0 is loss equals payback 
for the premium I am paying, I am paying substantially more for 
my insurance than I ever hope to be able to get back because I 
do have a low loss. So if that could be addressed.
    Another area is if, as I heard mentioned here just a moment 
ago, that direct payments might be curtailed in some way, 
shape, or form, there does need to be a safety net somewhere 
and if this crop insurance program is an area where we could 
regain that footing to put in that floor for support, the most 
important thing is that crop gets raised next year, not the 
crop you are raising this year that is lost, but raising that 
crop next year.
    Mr. Schilling. Very good.
    With that, I yield back my time, Chairman.
    The Chairman. The gentleman yields back his time. The time 
has expired for this panel.
    Before we adjourn, I would like to invite Mr. Boswell, 
followed by Mr. Schilling, to make any closing comments or 
remarks that they might have. Mr. Boswell.
    Mr. Boswell. Well, thank you, Mr. Chairman. I kind of 
measure how did I think things go on if I had what I know right 
now, would I have come to this meeting. Yes, I would.
    It has been good to be here in Galesburg and Carl Sandburg 
College. I want to thank all of you for participating today and 
it has been meaningful. I think our staff has got a lot of 
notes we are going to have to digest but it has been worth 
coming here and, Mr. Chairman, I want to thank you for this and 
Mr. Schilling for being our host, I appreciate it. Thank you 
very much.
    The Chairman. The gentleman yields back and I now recognize 
our host, Congressman Schilling, for any closing remarks he 
might have.
    Mr. Schilling. Yes, I truly want to thank you, Mr. 
Chairman, for just recognizing the great Midwest for who we 
are, and just giving us the opportunity to have what I call the 
final 3 feet, the farmer to actually have their say. I think 
one of the most important things that we look at is from the 
Midwest and across the country when it comes to ag is that we 
want the farmers to have the input. We do not want folks that 
have really nothing to do with farming making the decisions on 
how the farm bill is going to come out.
    And I think the biggest take-away that I got today out of 
this is that, number one, we need a 5 year bill so that we can 
give certainty to our farmers and allow them to just know what 
cards are on the table and then, number two, I think of course 
is the strong crop insurance.
    But I just want to thank everyone who participated, the 
folks that set up, also the Agriculture Committee, the folks 
from Washington that took time out to be with us today. But 
just want to say thank you very much, everyone.
    The Chairman. The gentleman yields back his time and I 
would recognize myself to note that I appreciate not only 
Congressman Schilling, but both of your Illinois Members, for 
the good work that they do on the Committee. And of course, our 
friends at Carl Sandburg College for hosting and helping work 
with us to make this possible, and the community for turning 
out today to listen to what some folks outside of rural America 
consider to be the least exciting topic, but yet it is the most 
important subject matter for all of our futures and all of our 
children's futures.
    And with that again, let me state one more time for the 
record, that anyone may submit comments to be considered as a 
part of the Committee's farm bill field hearing record, this 
will be a part of the permanent record. Comments submitted to 
the address agriculture.house.gov/farmbill by May 20, 2012 will 
be incorporated in a permanent part of the record. It is 
important that we have not just our expert witnesses today, but 
everyone out there who is interested put their stake into this 
process.
    With that, I would also note that we, working as a 
Committee together, have a very challenging process ahead of 
us. We intend to get you a farm bill that we can all support, 
that you can live with, that maybe you will not just survive 
but have a chance to thrive with. But it is going to be a 
challenging process. It is going to be a very challenging 
process.
    And with that, under the rules of the Committee, the record 
of today's hearing will remain open for 30 calendar days to 
receive additional material and supplemental written responses 
from the witnesses to any question posed by a Member.
    This hearing of the Committee on Agriculture is adjourned.
    [Whereupon, at 11:25 a.m. (CDT), the Committee was 
adjourned.]


   THE FUTURE OF U.S. FARM POLICY: FORMULATION OF THE 2012 FARM BILL

                              ----------                              


                         FRIDAY, MARCH 30, 2012

                          House of Representatives,
                                  Committee on Agriculture,
                                              State University, AR.
    The Committee met, pursuant to call, at 9:00 a.m. (CDT), in 
the Riceland Hall, Arkansas State University, 201 Olympic 
Drive, State University, Arkansas, Hon. Frank D. Lucas 
[Chairman of the Committee] presiding.
    Members present: Representatives Lucas, Neugebauer, 
Stutzman, and Crawford.
    Staff present: Bart Fischer, Josh Mathis, Matt Schertz, 
Debbie Smith, Heather Vaughan, John Konya, Nathaniel Fretz, 
Anne Simmons, and Jamie Mitchell

 OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN 
                     CONGRESS FROM OKLAHOMA

    The Chairman. This hearing of the Committee on Agriculture 
entitled, The Future of U.S. Farm Policy: Formulation of the 
2012 Farm Bill, will come to order.
    Good morning, and thank you all for joining us today for 
this farm bill field hearing--which is a very important 
distinction, I might add. And I would like to thank Congressman 
Crawford for hosting us today.
    These field hearings are a continuation of what my good 
friend and Ranking Member Collin Peterson started in the spring 
of 2010. Today, we will build upon the information we gathered 
in those hearings, as well as the 11 farm policy audits we 
conducted this past summer. We used those audits as an 
opportunity to thoroughly evaluate farm programs to identify 
areas where we can improve efficiency. The field hearings serve 
a slightly different purpose. Today, we are here to listen.
    I talk to producers all the time back home in Oklahoma. I 
see them in the feed store, I meet with them at my town hall 
meetings and, of course, I get regular updates from my personal 
boss, Linda Lucas, back on the farm. But the conditions and 
crops in Oklahoma are different than what you will find here in 
Arkansas.
    In New York, we heard how specialty crop producers and 
dairy producers utilize farm programs. In Illinois, we heard 
about the importance of crop insurance for corn and soybean 
producers. Today, we will hear from a wide variety of producers 
from across the Southeast. I expect we will hear a different 
perspective than we got in the Northeast and the Midwest. That 
is why it is so important that we offer a choice of policy 
options. The broad range of agricultural production makes our 
country strong, but it also creates challenges when we are 
trying to write a single farm bill to support so many different 
regions and commodities.
    While each sector has unique concerns when it comes to farm 
policy, I would like to share some of my general goals for the 
next farm bill. First and foremost, I want to give producers 
the tools to help you do what you do best and that is produce 
the safest, most abundant, most affordable food supply in the 
world. To do this, we must develop a farm bill that works for 
all regions and all commodities.
    I recognize that the challenges that you face here in the 
Southeast are different than the conditions facing producers in 
Illinois or New York. I also recognize that even within 
commodities, different programs work better for different 
regions. That is why it is vitally important that the commodity 
title give producers options so they can choose the program 
that best works for them.
    I am also committed to a strong crop insurance program. Now 
I know that crop insurance, while a valuable tool for many 
producers, does not work as well for producers down here. That 
is why offering an array of programs is important and why we 
must work with the Risk Management Agency to improve crop 
insurance products for rice, peanuts and other crops that do 
not have higher buyout levels.
    Last, we will work to ensure that producers can continue 
using conservation programs to protect natural resources. I am 
interested to hear how producers in this area of the country 
use the conservation programs. I am particularly curious as to 
your thoughts about how to simplify the process so they are 
easier for farmers and ranchers to use.
    Beyond those priorities, I know there are a number of 
universal concerns facing agriculture across the country. For 
instance, my producers in Oklahoma are worried about 
regulations coming down from the Environmental Protection 
Agency and how they must comply with those regulations. I am 
also aware that the death tax is creating difficulties for 
farming operations. I want to hear how these Federal policies 
are affecting producers here.
    Today, we will hear from a selection of producers. 
Unfortunately, we do not have time to hear from everyone who 
would like to share their perspective. But we have a place on 
our website where you can submit those comments in writing to 
be added to the record. You can visit agriculture.house.gov/
farmbill, to find that form. And you can also find an address 
on the postcards available on the tables that are here.
    As I said before, we do not have an easy road ahead of us, 
but I am confident that by working together, we can craft a 
farm bill that continues to support the success story that is 
American agriculture.
    And with that, I would like to recognize our host for any 
opening comments he might make. The gentleman from Arkansas, 
Mr. Crawford.

    OPENING STATEMENT OF HON. ERIC A. ``RICK'' CRAWFORD, A 
            REPRESENTATIVE IN CONGRESS FROM ARKANSAS

    Mr. Crawford. I thank the Chairman.
    I want to start by acknowledging our FFA chapters that are 
here, and if I could get them to stand. The chapters that we 
have checked in are Batesville, Weiner, Harrisburg and Manila. 
Thank y'all. This is the future of agriculture.
    [Applause.]
    Mr. Crawford. Thank you for being here, good morning, and 
thank all of you for joining us. We are pleased to have this 
third of four farm bill hearings here in Arkansas. Great honor 
to be here and we are very thankful to our Committee Chairman 
and to the Members who have taken time to come and 
participate--Congressman Neugebauer from Texas and Congressman 
Stutzman from Indiana, all of whom are my colleagues on the 
Agriculture Committee.
    As we know, agriculture is the number one industry in our 
district here in the First District of Arkansas--from the 
Delta, cotton, rice, soybeans, wheat, peanuts and aquaculture, 
and up into the Ozarks, poultry, cattle, dairy, timber 
products. Annually, agriculture in Arkansas is a $16 billion 
economic juggernaut, employing over 260,000 Arkansans. And like 
every industry, Arkansas agriculture comes with a fair share of 
risk and uncertainty.
    In these tough economic times, farmers and ranchers know 
the impact of high fuel prices as an input cost. When fuel 
costs rise, farmers feel the pinch more than most. Farmers also 
deal with uncertainty caused by unpredictable weather, volatile 
markets and a continued need for investments in technology. On 
top of all those challenges, farmers are constantly wrestling 
with a myriad of regulations coming from Washington and no 
agency embodies that better than the Environmental Protection 
Agency. Farmers in our district live off the land, they raise 
their families and earn an honest living by taking care of our 
natural resources. If anyone understands the importance of 
preserving our environment for future generations, it is 
certainly those who derive their livelihood from the land on 
which they live, and from the water that they use.
    With all the challenges our agriculture community already 
faces, they should not have to worry about burdensome new 
regulations that only serve to cripple American agriculture. 
Sound farm policy must incorporate all the tools that America's 
farmers and ranchers need to continue to produce the world's 
safest, most abundant and affordable food supply, and the 2012 
Farm Bill must take that into account. It also must take into 
account the diverse models of production throughout the United 
States. Unlike what some of my colleagues in Congress may 
think, there is no one-size-fits-all policy that will work. 
Agriculture here in Arkansas, and across the South, is vastly 
different than say Iowa or Illinois. And therefore, we need 
carefully crafted policy that accounts for the differences in 
cost, risk and production models. I know I am preaching to 
choir here and we are not here to do the talking, we are here 
to do the listening. So with that, I want to just really 
quickly acknowledge some of the witnesses that are from 
Arkansas and I am proud to represent them in Congress.
    I will start by welcoming Dow Brantley from England, 
Arkansas; Mississippi County producer Randy Veach; representing 
the cattle industry, cattle producer Dan Stewart from Mountain 
View, Arkansas; Mike Freeze is an aquaculture producer from 
Keo, Arkansas; and last but not least, a friend of mine, cotton 
farmer, also an ASU grad, David Hundley.
    We are pleased to welcome each of you. Thank all of you for 
being here, and we look forward to this hearing. With that, I 
yield back to the Chairman.
    The Chairman. The gentleman yields back.
    The chair would request that other Members submit their 
opening statements for the record so that the witnesses may 
begin their testimony and to ensure that there is ample time 
for questions.
    With that, I would like to welcome our first panel of 
witnesses to the table. Mr. L. Dow Brantley, rice, cotton, 
corn, and soybean producer, Brantley Farming Company, England, 
Arkansas; Mr. Randy Veach, cotton, rice, corn, wheat, and 
soybean producer, Manila, Arkansas; Mr. Paul T. Combs, rice, 
soybean, cotton, corn, and wheat producer, Sunrise Land 
Company, Kennett, Missouri; Mr. Bowen Flowers, cotton, corn, 
soybean, wheat, and rice producer, Clarksdale, Mississippi; and 
Mr. Burch, cotton and peanut producer, Burch Farms, Newton, 
Georgia. Clearly, gentlemen, you are a diverse bunch of 
producers.
    With that, Mr. Brantley, please begin whenever you are 
ready.

 STATEMENT OF L. DOW BRANTLEY, RICE, COTTON, CORN, AND SOYBEAN 
              PRODUCER, BRANTLEY FARMING COMPANY,
                          ENGLAND, AR

    Mr. Brantley. Chairman Lucas and Members of the Committee, 
I would like to welcome you again to the State of Arkansas; and 
Congressman Crawford, thank you for convincing the Chairman 
that Jonesboro was the place to hold this hearing. Thank you 
again for holding this hearing on the reauthorization of the 
farm bill. I am honored to have the opportunity to offer 
testimony before the Committee----
    The Chairman. Mr. Brantley, if you do not mind, swing that 
microphone towards you.
    Mr. Brantley. Is that better?
    I am honored to have the opportunity to offer testimony 
before the Committee concerning my views on current farm policy 
and the changes needed.
    My name is Dow Brantley. My farm is located in central 
Arkansas near the community of England. We grow rice, cotton, 
corn, soybeans and I farm in partnership with my father, 
mother, two brothers and our families. Due to the hard work of 
my grandparents and parents, our family farm has grown from 
just a few hundred acres in 1946 to around 8,500 acres in row 
crop production today. I am pleased to serve as Chairman of the 
Arkansas Rice Federation and the Arkansas Rice Producers' Group 
as well as a board member for many other agribusiness 
associations in the state, but I offer my testimony today from 
my perspective as a farmer, and not on behalf of any one 
organization.
    As I stated earlier, my farm is diversified, but rice is 
one of our primary focuses. It is worth noting that Arkansas 
grows rice on approximately 1.3 to 1.5 million acres each year, 
which is nearly \1/2\ of the entire U.S. rice crop. Rice 
product, transportation and processing play important roles in 
the state by providing thousands of jobs in what is referred to 
as the Mississippi River Delta. Rice is the state's second 
highest value commodity and the top agricultural export.
    The bigger challenges facing the U.S. rice industry are 
challenges over which farmers have no control. They are 
decisions taken by governments--our own Federal Government and 
the governments of nations around the world. Some examples 
include:
    Brazil's export program that provides $60 per ton export 
subsidy for rice to Central America, Haiti, Nigeria and to the 
U.S.
    Thailand's intervention price program is the equivalent of 
$10.00 per bushel, while the U.S. market price, here in the 
U.S., is around the $6.00 per bushel range.
    India, one of the world's top rice exporters, subsidizes 
the cost of fertilizer and other inputs for its farmers.
    Iraq's unreasonable import specifications have contributed 
to a 77 percent drop in sales of U.S. rice to that country.
    Access for U.S. rice was excluded from the so-called South 
Korea Free Trade Agreement because they consider it a sensitive 
crop.
    China has yet to accept imports of U.S. rice as a result of 
China's lack of phytosanitary requirements.
    And the U.S. Government continues an embargo that was put 
into place more than 50 years ago against trade with Cuba, once 
the number one export market for U.S. rice.
    These trade policies and the increased cost of inputs, 
especially fuel and fertilizer, over which the U.S. farmer has 
no control, cannot be covered by a one-size-fits-all program.
    The U.S. rice industry is seeking risk management tools 
that will allow rice farmers to secure their production loans 
and to repay loans should forces over which they have no 
control lead to an increase in input costs or decline in rice 
prices which makes U.S. rice less competitive.
    Not providing such a policy option threatens not only U.S. 
farmers who grow rice, but thousands of Americans who 
transport, process and market U.S. rice across the nation and 
around the world.
    Crop insurance as a whole has not worked on my farm or many 
others like ours in Arkansas. Our farm is 100 percent 
irrigated, and on average our yields are very consistent. Our 
financial problems occur with higher production costs due to 
irrigation or as a result of a weather event in the fall that 
disrupts our harvest and affects the quality of our crops. 
These circumstances cannot be hedged.
    I believe Congress should reauthorize the farm bill this 
year for at least 5 years.
    I understand that the budget situation facing this 
Committee is a key consideration in the development of the farm 
bill. These budget pressures, coupled with the outcome of the 
U.S.-Brazil WTO case means some farm policies must be modified 
to satisfy both budget constraints and specific trade 
objectives.
    Some key components of the farm bill should be maintaining 
planting flexibility that began with the 1996 Farm Bill and the 
countercyclical policies that have been in place for more than 
a decade now.
    Given the aforementioned budget pressures and other 
considerations facing Congress, I believe that the following 
priorities represent the needs of producers for crops here in 
the Mid-South:
    First, the trigger levels for assistance should be updated 
to provided tailored and reliable help should commodity prices 
decline below today's production cost and should include a 
floor or reference price to protect multi-year low price 
scenarios.
    Second, as payments would only be made in loss situations, 
payment limits and means tests for producers should be 
eliminated, or at a minimum not tightened any further.
    And third, the Federal Crop Insurance Program should be 
improved to be a more effective risk management for all crops 
in all production regions, beginning with the policy 
development process.
    We support the funding of our land-grant universities 
through the research title, particularly the formula funding 
like the Hatch and Smith-Lever Acts that enable our 
universities to deliver initiatives that are so important to 
our states.
    In summary, I appreciate the work of this Committee in 
crafting the 2008 Farm Bill, and more recently the 
recommendations developed last fall with your counterparts in 
the Senate. I know developing this next farm bill will present 
its own set of challenges, especially from inadequate budget 
authority and international trade obligations.
    Based on my experience in working with the rice and cotton 
industries and the Arkansas Farm Bureau, I know they will work 
closely with this Committee to ensure that we have an effective 
farm policy. It is critical that we maintain provisions that 
allow us to be competitive in world markets and provide support 
in these times of low prices.
    Thank you for the opportunity for me to present my views 
today.
    [The prepared statement of Mr. Brantley follows:]

Prepared Statement of L. Dow Brantley, Rice, Cotton, Corn, and Soybean 
            Producer, Brantley Farming Company, England, AR
Introduction
    Chairman Lucas, Ranking Member Peterson, and Members of the 
Committee, thank you for holding this important hearing on the re-
authorization of the farm bill. I am honored to have the opportunity to 
offer testimony before the Committee concerning my views on current 
farm policy and the changes needed.
    My name is Dow Brantley. My farm is located in central Arkansas 
near the community of England. We grow rice, cotton, corn, and 
soybeans. I farm in partnership with my father, mother, two brothers 
and our families. Due to the hard work of my grandparents and parents, 
our family farm has grown from just a few hundred acres in 1946 to 
around 8,500 acres in row crop production today. I am pleased to serve 
as the Chairman of the Arkansas Rice Federation and the Arkansas Rice 
Producers' Group, as well as a board member for many other agribusiness 
associations in the state, but I offer my testimony today from my 
perspective as a farmer, and not on behalf of any one organization.
Industry Overview
    As I stated earlier, my farm is diversified, but rice is one of our 
primary focuses. It is worth noting that Arkansas grows rice on 
approximately 1.3 to 1.5 million acres each year, which is nearly half 
of the entire U.S. rice crop. Rice production, transportation and 
processing play important roles in the state by providing thousands of 
jobs in what is referred to as the Mississippi River Delta. Rice is the 
state's second highest value commodity and the top agricultural export. 
Nationally, the U.S. rice industry contributes $34 billion in annual 
economic activity. It provides jobs and income for not only rice 
producers and processors, but also for all involved in the value chain, 
contributing 128,000 jobs.
    About 85 percent of all the rice that is consumed in the U.S. is 
produced domestically.
    Despite significant trade barriers to exports, the U.S. remains the 
largest non-Asian exporter of rice and the third largest exporter 
worldwide.
    Rice fields are flooded during the growing season to provide water 
that the plants need and to help control weeds. While drought during 
the growing season adds to the cost of maintaining the flood and 
certainly adds to the labor required to check irrigation pumps and keep 
levees intact, we do not lose a rice crop due to drought.
Global Challenges of U.S. Rice Industry
    The bigger challenges facing the U.S. rice industry are challenges 
over which rice farmers have no control. They are decisions taken by 
governments--our own Federal Government and the governments of nations 
around the world. Here are some examples:

    1. Brazil's PEP (Petrobras Environmental Program) program provides 
        a $60 per ton export subsidy for rice shipped to Central 
        America, Haiti, Nigeria and to the U.S. All are traditional 
        U.S. rice markets.

    2. Thailand's Intervention Price is buying rice from Thai farmers 
        at the equivalent of $10 per bushel. The U.S. market price is 
        in the $6.00 per bushel range. And U.S. rice faces Thai rice in 
        world markets every day.

    3. India, one of the world's top rice exporters, subsidizes the 
        cost of fertilizer and other inputs for its farmers.

    4. Iraq's recent tender specifies rice varieties grown in Thailand 
        and Vietnam, but not in the U.S. Thailand's unreasonable 
        demands have led to a 77 percent drop in sales of U.S. rice to 
        the country.

    5. South Korean negotiators, at the eleventh hour, demanded that 
        rice be excluded from the so-called Korea Free Trade Agreement 
        because they considered rice a ``sensitive crop.'' U.S. 
        negotiators agreed to the exclusion.

    6. China has yet to accept imports of U.S. rice as a result of 
        China's lack of phytosanitary requirements.

    7. Japan's desire to join the Trans Pacific Partnership has caused 
        the rice industry to question the impact of the TPP on rice 
        trade within that group of nations.

    8. There have been no recent country updates as required by the 
        WTO, which brings into question the level of engagement by the 
        Administration in enforcing the trade issue.

    9. While the U.S. has extended trade and travel status with Vietnam 
        and China, countries which were our enemies in the 1960s and 
        1970s, we have not restored normal travel and trade relations 
        with Cuba where the U.S. Government continues an embargo that 
        was put into place more than 50 years ago.

    The biggest risk to the U.S. rice industry is not crop failure, but 
our own government's trade policies and the trade policies of foreign 
governments, which are either condoned or ignored by our government. 
These trade polices and the increased costs of inputs, especially fuel 
and fertilizer, over which the U.S. rice farmer has no control, cannot 
be covered by a one size fits all farm policy.
    The U.S. rice industry is seeking risk management tools that will 
allow rice farmers to secure their production loans and to repay the 
loans should forces over which they have no control lead to an increase 
in input costs or a decline in rice prices which make U.S. rice less 
competitive.
    Not providing such a policy option threatens not only U.S. farmers 
who grow rice, but the thousands of Americans who transport, process 
and market U.S. rice across our nation and around the world.
2008 Farm Bill Review
    The 2008 Farm Bill continued the traditional mix of policies 
consisting of the non-recourse marketing loan, loan deficiency payment, 
and the direct and countercyclical payment. While the countercyclical 
payment and marketing loan have been helpful in the past, they have 
recently been overwhelmed by the cost of production. If crop prices 
drop sharply most producers, including myself, will be in dire 
financial straits by the time these policies make payments. However, 
the marketing loan also plays a key role in the orderly marketing of 
crops for both producers and our marketing cooperatives, especially for 
rice and cotton. This policy should be continued without being 
encumbered by limitations on how much of a commodity a producer can 
place under loan. The direct payment, whatever its imperfections, has 
assisted rice producers in meeting the ongoing and serious price risk 
of farming in today's environment. It is a bit ironic that the Federal 
Government has been sending signals to the agriculture community that 
we should shift our policies towards those that are green box and WTO 
friendly, such as direct payments. The rice industry heeded those 
instructions in previous farm bills, and we, more than any other 
commodity, will be severely impacted by the loss of the direct payment 
unless Congress works with us to find a workable policy solution.
    The new policies created in the 2008 Farm Bill included the 
addition of Average Crop Revenue Election (ACRE) as an alternative to 
countercyclical payments for producers who agree to a reduction in 
direct payments and marketing loan benefits. The bill also added 
Supplemental Revenue Assurance (SURE) as a standing disaster assistance 
supplement to Federal crop insurance.
    The support mechanisms within ACRE do not provide an adequate farm 
policy for rice farmers or others in the Mid-South when compared to the 
DCP program. As evidence by the lack of sign ups, ACRE has not proven 
to be a viable alternative for Southern agriculture. In my home county, 
we have 1,650 producers, and not one has elected to choose ACRE. I 
understand that only one producer in the entire state of Arkansas has 
enrolled 20 acres in ACRE. Specifically, in the first year of ACRE 
signup, only eight rice farms, representing less than 900 acres, were 
enrolled nationwide. A one-size-fits-all policy will not work, but a 
regional or crop-based policy could provide the assurance that rice 
farmers will be able to endure the challenges they face.
    SURE has provided little, if any, assistance to row crop producers, 
including those producers in the Mid-South who suffered significant 
monetary losses due to heavy rains and flooding occurring prior to and 
during harvest and spring flooding.
    I recognize the challenge facing Congress to make improvements in 
this program. Without increased baseline spending authority, there will 
be no funds to continue the policy in the next farm bill much less make 
the necessary improvements for it to be an effective disaster relief 
mechanism. However, I do not support reallocating existing spending 
authority from current farm policy to apply to SURE.
Crop Insurance
    Crop insurance, as a whole, hasn't worked on our farm or many 
others like ours in Arkansas. Our farm is 100 percent irrigated, and on 
average, our yields are very consistent. Our financial problems occur 
with higher production costs due to irrigation or as the result of a 
weather event in the fall that disrupts our harvest and affects the 
quality of our crops. These circumstances can't be hedged.
Conservation
    My family has participated in several conservation initiatives over 
the years. Initiatives such as the Environmental Quality Incentives 
Program (EQIP), Wetlands Reserve Program (WRP), and Conservation 
Reserve Program (CRP) have helped us conserve our natural resources and 
become better stewards of the land. Conservation initiatives such as 
the Conservation Stewardship Program (CSP) can lead to improved 
environmental and conservation practices, however I believe that this 
program is not succeeding in the way it could. Of all the conservation 
initiatives offered by USDA, the CSP might have the most potential in 
terms of producing the desired environmental results that are 
beneficial to both the environment and the farmer. This initiative is a 
win-win for everyone, but it has been vastly under-funded. The CSP has 
been hampered by overly restrictive payment limitations contrived by 
USDA regulators, and I do not believe the statute supports the 
restrictions. Because the CSP regulations limit payments to an 
``agricultural operation'' and because the payment limits are so low, 
most farmers do not have the opportunity to enroll all of their land, 
even if their land would otherwise be eligible. In order to enroll more 
land in CSP, a producer is required to have more than one agricultural 
operation. This is a very costly and inefficient way for a producer to 
operate (e.g., multiple loans, multiple operating accounts, multiple 
sets of operating records, etc.). Again, this probably has something to 
do with the level of funding, but it would seem to me that an 
initiative that produces benefits for both the environment and the 
producer would warrant more funding. With that being said, conservation 
initiatives should not serve as the primary delivery mechanism for farm 
policy and should not come at the expense of our farm policies.
Payment Limitations/Means Testing
    The 2008 Farm Bill also made very substantial changes to the 
payment eligibility provisions, establishing an adjusted gross income 
(AGI) means test and, a very significant tightening of ``actively 
engaged'' requirements for eligibility. In my opinion, the USDA over-
stepped the intent of Congress in key payment eligibility provisions 
and issued regulations that are overly complicated and restrictive.
    These changes have not only been expensive, but they have required 
our farm to make changes in our day-to-day operations that do not make 
good business sense. FSA's financing rules, active personal management 
rules and the decision by USDA to allow FSA and NRCS to operate under 
different actively engaged rules, are a few examples of the problems 
that we are facing. Sound farm policy provisions are of little value if 
commercial-size family farming operations are ineligible for benefits. 
While I oppose any artificial payment limitations, I advocate 
administering the current provisions within the intent of Congress and 
strongly oppose any further restrictions.
2012 Farm Bill
    I believe Congress should reauthorize the farm bill this year.
    I understand that the budget situation facing this Committee is a 
key consideration in the development of the farm bill. These budget 
pressures, coupled with the outcome of the U.S.-Brazil WTO case means 
some farm policies must be modified to satisfy both budget constraints 
and specific trade objectives.
    Some key components of the farm bill should be maintaining planting 
flexibility that began with the 1996 Farm Bill and the countercyclical 
policies that have been in place for more than a decade now.
    Given the aforementioned budget pressures and other considerations 
facing Congress, I believe that the following priorities represent the 
needs of producers for crops here in the Mid-South:

   First, the trigger levels for assistance should be updated 
        to provide tailored and reliable help should commodity prices 
        decline below today's production costs, and should include a 
        floor or reference price to protect in multi-year low price 
        scenarios.

   Second, as payments would only be made in loss situations, 
        payment limits and means tests for producers should be 
        eliminated, or at a minimum not tightened any further.

   Third, Federal crop insurance should be improved to provide 
        more effective risk management for all crops in all production 
        regions, beginning with the policy development process.
Price Protection is Key
    The development of farm policy should be focused on providing 
producers with price protection, not just for price moves during the 
growing year, but for multiple years of price declines as we saw occur 
in the late 1990's. Those that hold out crop insurance as the 
centerpiece of farm policy certainly don't understand the nature of 
farming in my area. Crop insurance can't, and it was not designed to, 
provide price protection across multiple years. Adequate price 
protection is the most critical component of the next farm bill and 
must be included in any policy option.
    The first priority should be to concentrate on increasing the 
prices or revenue levels at which farm policy would trigger so that it 
is actually meaningful to producers, and would reliably trigger should 
prices decline sharply.
    The reference price for rice should be increased to $13.98/cwt 
($6.30/bu). This level would more closely reflect the significant 
increases in production costs for rice on my farm. And this reference 
price should be a component of both the price-based option and the 
revenue-based option to ensure downside price protection.
    The existing price trigger levels have simply not kept pace with 
the significant increases in production costs. It is for this reason 
that I believe strengthening U.S. farm policy would be helpful in 
ensuring that producers have the ability to adequately manage their 
risks and access needed credit.
Options for Different Production Regions
    I believe that farm policy must be designed to give producers 
options of what policy will work best for a farmer based on our mix of 
crops and our growing region. I consider my farm to be rather 
diversified, growing four of the major program crops. We are fortunate 
to farm in an area where we have the ability to rotate among several 
crops. Not all production regions have that ability and may be limited 
to just one or two crops that can be profitably produced. Because of 
this great diversity across American agriculture we need policy options 
that I can use to tailor the best risk management tools possible on my 
farm.
    Using rice as an example, here in the Mid-South I can rotate up to 
three other crops with my rice, whereas rice producers on the Gulf 
Coast have in most cases only one other crop rotation option, and yet 
in California rice producers have in most cases only one cropping 
choice, rice. Due to a host of differences in market prices, production 
costs, yields, marketing patterns, and uses, there is the potential for 
a properly designed revenue-based policy to work for rice growers in 
California, while I know that for my rice enterprise here in Arkansas I 
need a price-based policy. But I would like the opportunity to evaluate 
both price-based and revenue-based options for my other crops to see 
which will best fit my situation. Each crop has very different pricing 
and marketing options.
Plain and Bankable Policies
    The current SURE has too many factors and is not tailored to the 
multiple business risks producers face--it is not plain. The current 
ACRE, while offering improved revenue-based protection, is complicated 
by requiring two loss triggers; providing payments nearly 2 years after 
a loss; and provides no minimum price protection--it is not bankable. 
The marketing loan and target prices are plain and bankable--
unfortunately the trigger prices are no longer relevant to current 
costs and prices.
Planting Flexibility
    Any commodity specific farm policy that is tied to planted acres 
must be designed with care so as to not create payment scenarios that 
incentivize farmers to plant for a farm policy. Whatever is done should 
accommodate history and economics and allow for proportional reductions 
to the baseline among commodities. Some commodities are currently more 
reliant on countercyclical farm policies (ACRE/CCP) while others are 
receiving only Direct Payments in the baseline. Generally, the least 
disruptive and fairest way to achieve savings across commodities would 
be to apply a percentage reduction to each commodity baseline and 
restructure any new policy within the reduced baseline amounts.
    There have been concerns raised about higher reference prices 
distorting planting decisions and resulting in significant acreage 
shifts, including for rice. Based on my understanding of the reference 
price levels included in the Agriculture Committees' package last fall, 
a reference price for rice of $13.98/cwt that is paid on historic CCP 
payment yields and on 85% of planted acres results in a effective price 
level well below my average cost of production, so I find it hard to 
imagine why I would plant simply due to this policy given these levels. 
As I have noted earlier, we have a very diverse cropping mix, and my 
planting decisions are based on a number of economic, agronomic, and 
marketing factors, but farm policy that sets support levels below costs 
of production is not a factor in planting decisions.
Research
    We support the funding for our land-grant universities through the 
research title, particularly the formula funding like the Hatch and 
Smith-Lever that enable our universities to deliver initiatives so 
important to our states. These initiatives are not only matched 7:1 
with state dollars but finance important efforts on key issues at the 
state level like herbicide resistance, water quality, profitable and 
sustainable production practices and 4-H.
Conclusion
    In summary, I appreciate the work of this Committee in crafting the 
2008 Farm Bill and, more recently, the recommendations developed last 
fall with your counterparts in the Senate. I know developing this next 
farm bill will present its own set of challenges especially from 
inadequate budget authority and international trade obligations.
    Based on my experience in working with the rice and cotton 
industries and the Arkansas Farm Bureau, I know they will work closely 
with this Committee to ensure that we have an effective farm policy. It 
is critical that we maintain provisions that allow us to be competitive 
in world markets and provide support in times of low prices. Our 
industries will evaluate different delivery systems as necessary to 
accomplish these goals.
    Thank you for the opportunity to present my views today and I will 
be happy to respond to any questions.

    The Chairman. Thank you.
    Mr. Veach, you may proceed whenever you are ready.

   STATEMENT OF RANDY VEACH, COTTON, RICE, CORN, WHEAT, AND 
                  SOYBEAN PRODUCER, MANILA, AR

    Mr. Veach. Thank you, Mr. Chairman, Members of the 
Committee, and Congressman Crawford for bringing this field 
hearing here to Arkansas. We really appreciate the opportunity 
to testify before you.
    I am a farmer from Mississippi County, Arkansas. I am a 
cotton, rice, soybean, wheat, and corn farmer, predominantly 
cotton. I farm with my wife, my son Brandon, and his wife. 
Brandon is a fourth generation farmer and we farm some land 
that my grandfather cleared and started farming. This is my 
42nd crop, so I have been farming for a pretty good while.
    I want to commend this Committee and for your leadership, 
Mr. Chairman, in putting forth a bill before the Joint 
Committee on Deficit Reduction. I think it needs to be noted 
that this was the only Committee that did put forth a bill, and 
we commend you on that.
    I also serve as President of Arkansas Farm Bureau and I 
neglected to say that earlier.
    We must, as a country, get our house back in order. And 
agriculture is ready to do our part. But we cannot balance our 
Federal budget on the backs of agriculture. We cannot cut our 
domestic support to the point where we lose our safety net. I 
believe that the farm bill should be crafted to benefit all 
sectors of agriculture. Farmers and ranchers risk it all every 
year to feed, clothe, and shelter our nation and the world.
    It is also very important to have a good farm bill that 
will protect our rural communities. Our rural communities 
depend upon agriculture and agriculture depends upon our rural 
communities.
    Commodity programs should take into consideration commodity 
and regional differences which, Mr. Chairman, you mentioned 
awhile ago. A one-size-fits-all approach will not work for all 
regions and all commodities.
    Agriculture is our state's largest industry, as Congressman 
Crawford talked about. We bring an impact of more than $9.4 
billion, a direct impact, and then an indirect impact of $16 
billion. And 20 percent of all the jobs in the State of 
Arkansas are directly related to agriculture. Arkansas is 
number one in rice, number two in catfish and broilers, and 
number three in cotton.
    Agriculture must have a workable risk management program. 
These programs consist of a combination of commodity programs 
and crop insurance. Historically, commodity programs provided 
price risk protection and crop insurance covered yield risk. In 
much of the South, our yield risk is mitigated by irrigation, 
about 80 percent of all row crops are irrigated in Arkansas. 
But this also greatly increases our input cost. That is the 
reason that crop insurance participation is lower in the Mid-
South than other parts of the country. Arkansas agriculture 
needs a traditional program that provides price protection as 
well.
    The current marketing loan program, with increased loan 
rates that reflect current prices, and a countercyclical 
program with higher target prices calculated on planted acres 
and current historic yields, would provide price protection.
    Maintaining the marketing loan program is extremely 
beneficial to all crops. We use the marketing loan program 
extensively to help reach a higher price for our commodities, 
and cotton and rice use it very much. Prices are cyclical. I 
remember back in the 1970s I sold soybeans for $12.00 a bushel. 
In 2001, we sold soybeans for $4.00 a bushel. So prices are 
cyclical and we need that price protection.
    2011 was a year of difficult and diverse weather. Flooding, 
followed by drought and again flooding. And Chairman Lucas, I 
think the drought was even more extensive in your state, and 
the opportunity to irrigate is not as good as it is in our 
state.
    Arkansas growers, through drought, did not have the losses 
that other states had, but we had a lot of losses due to 
flooding. That is another example that a one-size-fits-all 
program does not work effectively for our regions.
    One point I wanted to make on flooding was that there is a 
gap that we have in flood insurance. Crops that are stored on-
farm in storage in those facilities does not have the 
opportunity to have insurance protection. The Federal 
Government does not offer any protection for flooded grain in 
stored bins and private industry does not either. So this is 
something that needs to be addressed in the farm bill. I think 
that there was also not an opportunity for a lot of those 
producers to get the grain out of those bins and get them to 
the market so they could pay off their marketing loans. I think 
within Subtitle B, Marketing Assistance Loans and Loan 
Deficiency Payments, the Secretary should have the ability to 
extend the marketing assistance loans due to federally declared 
disasters.
    You know, I know there is a public perception regarding 
direct payments. But I feel that I must caution you on an 
overnight elimination of this program, and what it would do to 
agricultural states' economy. For example, eliminating direct 
payments would have a $243 million impact on Arkansas 
immediately, which is 1,952 jobs. This change will affect 
operating loans and rental agreements as well. Federal crop 
insurance alone will not replace the loss protection direct 
payments provide. Higher marketing loans--higher target prices 
will replace some of that money and some of that protection 
that will be lost by these direct payments.
    We also support Congressman Peterson's bill when it comes 
to dairy that offers a voluntary gross margin insurance 
program. I think that we have also put one similar to this in 
the State of Arkansas in place, and it has worked very 
successfully. But I think this is also a reason that we need to 
get a farm bill this year.
    Research: we oppose any cuts in research funding. Our 
increase in production is directly related to successful 
research and our land-grant universities do a tremendous job.
    Conservation: we want to maintain the conservation 
practices and programs, current funding on that. EQIP, it is 
especially important that we maintain the current funding level 
in EQIP. EQIP is one of those programs that helps not only row 
crops but livestock production as well.
    I will sum up by saying in conclusion, it is a benefit to 
our country to have a diverse agriculture industry. The farm 
bill should be crafted to support all sectors of agriculture.
    I appreciate the hard work of this Committee to ensure that 
farmers and ranchers have a safety net that works for their 
region and their commodity during times of decreased prices and 
difficult weather, and allows our farmers to continue to 
provide the safest, most abundant, and least expensive food 
supply in the world.
    Thank you.
    [The prepared statement of Mr. Veach follows:]

   Prepared Statement of Randy Veach, Cotton, Rice, Corn, Wheat, and 
                      Soybean Producer, Manila, AR
    Mr. Chairman and Members of the Committee, my name is Randy Veach, 
a row-crop producer from rural Mississippi County, which is the largest 
row crop county in the nation. I raise cotton, rice, corn, wheat and 
soybeans. I farm with my son Brandon, who is the fourth generation to 
farm the ground cleared by my grandfather and father. This will be my 
42nd crop.
    I am serving my fourth term as President of Arkansas Farm Bureau, 
the state's largest agriculture advocacy organization with more than 
220,000 member families.
    I commend this Committee, with your leadership Mr. Chairman, for 
putting forth a bill to the Joint Committee on Deficit Reduction. 
Agriculture was the only Committee that put forward a proposal, and you 
should be congratulated for that.
    We must as a nation get our house in order, and agriculture is 
ready to do it part in that effort. We feel across-the-board cuts are 
the fairest way to reduce our country's spending. We cannot balance the 
Federal budget on the backs of agriculture, and the cuts should not be 
so severe that eliminate the safety net that helps ensure adequate 
supplies of food and fiber. I feel, in fact, that agriculture is 
critical to our national security.
    I believe the next farm bill should be crafted to benefit all 
sectors of the agriculture community and all regions of the country. I 
also believe it should be passed this year. Farmers and ranchers risk 
it all to feed, clothe and shelter our nation and the world. A one-
size-fits-all approach will not work for all regions and all 
commodities. Farm programs should take into consideration commodity and 
regional differences.
    Agriculture has a national impact of agriculture is $170 billion. 
It is our state's largest industry with a direct impact of more than a 
$9.4 billion and an indirect impact of more than $16 billion. We 
exports more than $2 billion in agricultural products each year. 
Arkansas ranks number one in rice, number two in catfish, broilers, and 
number three in cotton.
    Agriculture must have workable risk management programs. These 
programs consist of a combination of Commodity Programs and Crop 
Insurance. Historically, commodity programs provided price risk 
protection and crop insurance covered yield risk. In Arkansas our yield 
risk is mitigated by irrigation (we are 80 percent irrigated for row 
crops). However, this greatly increases our input costs. That is the 
reason crop insurance participation is lower in the Mid-South than 
other parts of the country.
    Arkansas agriculture needs a traditional program that provides 
price protection.
    The current marketing loan program, with increased loan rates that 
reflect current prices and a countercyclical program with higher target 
prices calculated on planted acres and current historic yields, would 
provide price protection.
    Maintaining the marketing loan program benefits all the crops, as 
recent high prices of cotton, cotton placed under the CCC loan have 
been steadily declining since the 2007 crop. The Mid-South accounts for 
approximately 50 percent of cotton placed under loan. This is a perfect 
time to increase loan rates, as commodity prices are up, as well as our 
inputs (fuel, fertilizer, crop protectants, etc.) Prices are cyclical, 
and these high prices are not sustainable.

              November Average Cash Price Reported by USDA
------------------------------------------------------------------------
     Crop            1981           1991          2001          2011
------------------------------------------------------------------------
 Cotton (lb)           63.00          62.40          30.77         90.40
  Rice (cwt)            9.83           7.58           4.23         14.40
Soybeans (bu)           6.00           5.42           4.18         11.50
------------------------------------------------------------------------

    As you will see, 2001 was a very difficult year for agriculture. 
The ``three-legged stool'' approach saved agriculture during the low 
prices. The marketing loan and countercyclical program protected our 
farmers against those times of low prices.
Cotton
    Total value of cotton production in Arkansas totals $694.5 million. 
Cotton is more than lint. Cottonseed production was 5.3 million tons 
and equates to $118 million. It is used primarily by the livestock 
industry with 50 percent used by dairy farmers.
    U.S. farmers planted 14.4 million acres of cotton in 2011. This was 
an increase of 34 percent from the previous year. Mid-South plantings 
were just less than 2.5 million acres, a 29 percent increase.
    2011 was a year of difficult and diverse weather; flooding, 
followed by drought, and back to flooding.
    Abandonment rates were up 34 percent. The highest since USDA began 
reporting both planted and harvested area in 1909. The Southwest 
growers were unable to harvest 60 percent of their cotton area. As you 
know, Mr. Chairman, Oklahoma registered the largest abandonment, 83 
percent of planted area being a total loss. I contend Arkansas growers, 
through irrigation, didn't have the losses that our western neighbors 
experienced.
    This is another example of why a one-size-fits-all program will not 
work effectively for all regions.
    While flooding delayed planting in the Mid-South, our losses were 
in yield, not abandonment. Arkansas cotton production experienced a 107 
lb. decrease compared to 2010. The average price in 2010 for cotton was 
$.89 lb. If you calculate the price of cotton with 107 lb. decrease it 
equates to an average $95.23 reduction per acre.
    Due to the spring floods, for the first time, we witnessed an issue 
that needs to be addressed. Flood insurance is not offered to cover 
grain stored ``on-farm.'' With more grain stored on farm, we need the 
Federal flood insurance to cover on-farm grain stored in bins.
    Another issue that was witnessed for the first time was grain in 
the loan was unable to be delivered due to the flood. The Secretary 
could not extend the provisions of the loan due to Section 1203(b). I 
suggest amending Subtitle B, ``Marketing Assistance Loans and Loan 
Deficiency Payments'' Section 1203(b) Extension Prohibited, by either 
eliminating Section 1203(b) Extension Prohibited or establishing a 
criteria for the Secretary to have the ability to extend the marketing 
assistance loans due to Federal Declared disasters.
    I understand public perception regarding direct payments, but I 
feel that I must caution you on the overnight elimination of this 
program and what it would do to the economy of several agricultural 
states. For example, the elimination of DP would have a $243 million 
impact on Arkansas' economy, and equates to an average of $40 per acre 
in eastern Arkansas. In Iowa, the reduction is $473 million, Illinois 
$418 million and Texas $390 million. This will be an immediate 
reduction of the state's agricultural economy. This change will affect 
operating loans, rental agreements and also reduce land values. An 
immediate elimination of direct payments will cause Mid-South farmers 
higher risk due to larger operation loans with less collateral. That 
will increase pressures on agriculture lenders. I would caution the 
Committee about a complete and overnight overhaul of farm programs. 
That could affect markets, crop rotation, our state's agriculture 
economy, and have unintended consequences in the marketplace.
    Federal crop insurance will not replace the lost protection now 
provided by direct payments. Higher marketing loan rates and higher 
target rates will help provide the price protection needed by farmers.
Dairy
    For the record, I want to express our support for Congressman 
Peterson's bill to eliminate the dairy price support program and the 
Milk Income Loss Contract program and to use the funding associated 
with those programs to offer a voluntary gross margin insurance program 
for dairy farmers.
    Arkansas Farm Bureau lead an effort 3 years ago to create a 
successful state program that assisted our dairy industry.
    The main reason for this was to assist our dairy farmers during the 
toughest of times, as the national program did not work and needed an 
overhaul. Congressman Peterson's bill is the overhaul the dairy 
industry needs to survive.
Research
    We oppose any cuts to research funding. We recognize the key role 
that agricultural research plays in making and keeping the farm sector 
competitive, profitable and responsive to the country's changing food, 
feed and fiber needs.
    Our increase in production is directly related to successful 
research. Research is an invaluable investment for agriculture and the 
nation. Land-grant universities provide unbiased research that farmers 
and ranchers rely on to make informed decisions.
    We support the funding for our land-grant universities through the 
research title, particularly the formula funding like the Hatch and 
Smith-Lever that enables our universities to deliver programs so 
important to our states.
    These Federal investments are not only matched 7:1 with state 
dollars, but finance programs on key issues at the state level, like 
herbicide resistance, water quality, 4-H, as well as profitable--and 
sustainable--production practices.
    A pressing research issue is pigweed control in cotton and the 
issue of glyphosate resistance.
Conservation
    Funding for conservation practices and programs to help farmers and 
land owners comply with Federal environmental regulations should be 
maintained. I contend EQIP is the most beneficial conservation program, 
as it helps all sectors of agriculture and should remain at current 
funding levels.
    We support the current conservation programs, given the fiscal 
considerations and increasing worldwide demand for food; we strongly 
support the ``working lands'' programs over the land retirement 
programs. The five conservation programs without baseline beyond FY 
2012 should not be extended by cutting funding elsewhere.
Payment Limitations/AGI
    We oppose any changes to the current payment limitations or means 
test. To be viable, we must recognize realistic economies of scale to 
justify the large capital investment associated with farming.
Credit
    We support the enhancement of the Emergency Loan Program to assist 
farmers and ranchers during declared disasters. We feel that the 
eligibility requirements should be modified for the program to meet the 
needs of our farmers. We propose eliminating the 30 percent loss and 
the two lender credit denial requirements.
Specialty Crop
    We support our specialty crop farmers and encourage assistance on 
research, food safety, marketing and promotions.
Livestock
    We favor maintaining a livestock title.
    In conclusion, our country needs a diverse agriculture industry. 
Rural America counts on agriculture; in fact it is the primary economic 
engine for our rural communities. At the same time, agriculture counts 
on those rural communities. Anything that weakens our rural communities 
has an negative impact on agriculture. So, in that way, we have a co-
dependent relationship.
    The farm bill should be crafted to support all sectors of 
agriculture. I appreciate the hard work of this Committee to help 
ensure farmers and ranchers have a reliable safety net that works 
during times of decreased prices and difficult weather, and one that 
fits their region and their commodity. With that in place, U.S. farmers 
will continue to provide the safest, most abundant, and most affordable 
food supply in the world.
    Thank you. And God bless America.

    The Chairman. Thank you, Mr. Veach.
    Mr.Combs, you may proceed when you are ready.

 STATEMENT OF PAUL T. COMBS, RICE, SOYBEAN, COTTON, CORN, AND 
  WHEAT PRODUCER; PRESIDENT, SUNRISE LAND COMPANY, KENNETT, MO

    Mr. Combs. Thank you. Chairman Lucas, Congressman Crawford, 
Congressman Neugebauer, and Congressman Stutzman; thank you for 
holding this hearing today and for allowing me the opportunity 
to testify.
    My name is Paul T. Combs and our farms produce corn, 
cotton, wheat, soybeans, and rice in the Missouri Bootheel. My 
family is also in the farm equipment business with dealerships 
in southeast Missouri and northeast Arkansas.
    I want to start out by thanking Chairman Lucas and Ranking 
Member Peterson for the work they did in putting together a 
farm bill last fall that would have served farmers and the 
taxpayers well. I appreciated your efforts because you put 
together a farm bill that worked for all farmers rather than 
picking winners and losers. I also appreciated your work 
because it was clear that you were not driven by personal 
ideology of what farm bills should look like in concept, but 
instead, what actually works with producers on the ground. And 
finally, I thought it was extremely important that you did not 
forget the lesson of 1998 where there was inadequate protection 
in the event of low prices. That mistake was costly to farmers 
and the taxpayers alike, and I hope it is not repeated.
    It happens that what I so appreciate about the work you did 
last fall is my main message about what the 2012 Farm Bill 
should look like. The 2012 Farm Bill should not pick winners 
and losers by forcing all farmers into a policy that works for 
some, but not for others. Forcing everyone into a revenue 
program would have that effect.
    The 2012 Farm Bill should offer producers a menu of options 
that meaningfully address the risks they face on their farm. 
Price-based and revenue-based options and a STAX option for 
cotton producers makes good sense.
    The next farm bill should also meet what should be the 
lowest common denominator in any farm bill, and that is to be 
there when the bottom falls out on prices. Some people in 
Washington, and even some of my fellow producers, forget the 
basic economic lesson that what goes up usually comes down. 
Every one of us will regret being a part of a farm bill that 
would ignore this basic economic lesson. Revenue protection 
without some minimum price protection such as you included in 
the 2011 package would repeat the grave mistakes of the past if 
we see prolonged periods of low prices. This sort of policy 
would fail farmers.
    The 2012 Farm Bill should offer producers a little 
certainty at a time when there is little certainty. That means 
enacting a 2012 Farm Bill in 2012 rather than kicking the can 
down the road a year and leaving us to wonder what policy will 
be beyond next year. It also means letting the ink dry on 
substantial payment limitations and means testing reforms 
included in the 2008 bill. If Washington is serious about 
global competitiveness, it would do best to lose this sort of 
social engineering that holds us back from competing against 
heavily subsidized and protected foreign competition.
    Last, Ranking Member Peterson has, time and time again, 
suggested that crop insurance may one day be all we producers 
have left. I hope that is not the case because crop insurance 
does not work as well for farmers in this area, as it does for 
Iowa corn and bean farmers where the typical coverage is 80 or 
85 percent of revenue.
    In the case of rice, roughly \1/2\ of our production is in 
CAT and the other \1/2\ is at the 60 percent yield coverage. We 
as an industry have been trying to change this for 4 years but 
have so far been unsuccessful. Our industry will keep working 
on it, but if the two policies that we have pending are 
improved, we are still a long way off from being where 
producers in the Midwest are relative to crop insurance.
    So the bottom line is we are entering the farm bill debate 
at a huge disadvantage as one of the main things that works for 
us is the direct payment and that is the one thing that is 
going to be eliminated under this bill.
    Fortunately, Mr. Chairman and Mr. Peterson, you know this 
well and you have worked with our industry to ensure that rice 
farmers are not left out in the cold in this farm bill process. 
And for that, we all thank you very much. We are grateful to 
both of you.
    Thanks once again for taking the time to be here today and 
for the opportunity to hear perspectives of producers like 
myself.
    [The prepared statement of Mr. Combs follows:]

 Prepared Statement of Paul T. Combs, Rice, Soybean, Cotton, Corn, and 
      Wheat Producer; President, Sunrise Land Company, Kennett, MO
Introduction
    Chairman Lucas, Ranking Member Peterson, and Members of the 
Committee, thank you for holding this hearing concerning farm policy 
and the 2012 Farm Bill. I appreciate the opportunity to offer testimony 
on farm policy from the perspective of a producer who comes from an 
area that produces many different crops and where we have a number of 
cropping options.
    My name is Paul T. Combs. I raise rice, soybeans, cotton, corn, and 
wheat in Dunklin and Pemiscot counties in the Missouri Bootheel. In 
addition to our farming operation, my family and I also own and operate 
farm equipment dealerships in both Missouri and Arkansas.
    I recently completed two terms on the board of the Federal Reserve 
Bank of St. Louis. I also serve on several boards and committees for 
farm organizations, including the USA Rice Federation.
Effects of Strong Farm Policy
    As a producer who is involved in both production agriculture and as 
an agribusiness supplier, I come to the table with a somewhat unique 
perspective.
    As a producer, I need long-term certainty in Federal farm policy 
that will allow me to make business planning decisions on my farm. For 
this reason, I believe it is imperative that Congress pass a 5 year 
farm bill this year, not a short-term extension that leaves me in limbo 
as to what policy will be in place. We are trying to grow our farm by 
purchasing land when opportunities arise. We are trying to improve our 
marketing options by expanding on-farm storage capacity so we can 
better market our crops. These types of decisions require not only 
long-term policy, but policy that will allow us to tailor our risk 
management options to the needs of our farm.
    As an agribusiness owner, I see firsthand the impact that 
uncertainty and inadequate farm policy can have on producers when it 
comes to their decisions about investing in new equipment for their 
farms. Right now prices are decent for most of the crops in our area, 
but we all know how cyclical commodity prices are, and every grower 
needs a policy that will provide some downside price protection if (and 
likely when) we see a steep decline in commodity prices. Without this 
type of certainty, farmers, like any businessperson, will take steps to 
minimize their exposure to risk, resulting in a pullback in investments 
for their farm. This pullback starts first with their suppliers of 
inputs (equipment, grain storage facilities, fertilizer) and then 
begins to impact the majority of businesses in rural America. We've 
seen this cycle play out over and over and I hope we will not repeat 
the mistakes of the past by putting in place a farm policy that assumes 
good prices are here to stay, and then we find out it is ill-equipped 
to deal with the decline in prices that is sure to come.
    Effective farm policy gives producers the confidence we need to 
continue to invest in our farms and the confidence that lenders need to 
extend the financing to producers to make these investments. During my 
time on the Federal Reserve board, I saw the importance of not 
hindering this access to credit.
2008 Farm Bill Review
    The traditional mix of farm policies that were continued in the 
2008 Farm Bill including the nonrecourse marketing loan, loan 
deficiency payment, and countercyclical payments have not triggered for 
most crops due to the current market price levels. Yet the cost of 
inputs have increased in step with the rise in commodity prices so the 
current levels of price protection afford very limited protection to 
producers. However, I would note the importance of maintaining the 
existing marketing loan which plays an important role in marketing of 
our cotton and rice in particular.
    As such, whatever its imperfections, the Direct Payment alone has 
assisted producers in meeting the ongoing and serious price and 
production risks of farming today.
    Because the Direct Payment has been singled out for elimination in 
the next farm bill, I believe that we must strengthen the remaining 
policies in the 2012 Farm Bill to ensure that producers have the 
ability to adequately manage their risks and access needed credit.
Crop Insurance
    The current suite of risk management products offered through 
Federal Crop Insurance has provided limited value to producers in the 
Mid-South.
    What farmers need from Federal crop insurance are products that 
will help protect against increased production and input costs, 
particularly for energy and energy-related inputs. Because crop 
insurance does not cover the margin risk that some producers face, we 
must work to develop a new generation of crop insurance products that 
will provide more meaningful risk management tools that will aid in 
protecting against sharp, upward spikes in input costs. I am aware that 
the rice industry is currently pursuing development of such a product, 
but it is important to stress that even if a new product is approved 
this year, it takes several years to conduct a pilot to ensure the 
policy is functioning properly. And it will be a long road to explain 
the new product to producers and encourage evaluation of the policy, 
particularly in areas like mine where we have not historically seen 
high levels of participation in crop insurance. The bottom line is that 
even if crop insurance is made effective one day for rice and other 
crops currently under-served, insurance cannot replace the need for 
farm policy under the farm bill for any crop.
Conservation
    Conservation policies play an important role in production 
agriculture by providing financial cost-share and technical assistance 
to producers in their continual efforts to conserve water, soil, air, 
and wildlife habitat. I support maintaining a strong conservation title 
in the farm bill, in particular one that emphasizes working lands 
conservation incentives, but not at the expense of the commodity 
policies.
    Voluntary, incentive-based, and science-based conservation 
initiatives are needed, as is technical assistance. The Conservation 
Security Program (CSP), Conservation Stewardship Program (CSP), and the 
Environmental Quality Incentives Program (EQIP) are important working 
lands initiatives that assist producers with protection of the 
environment and conservation of natural resources and should be 
reauthorized.
    Rice producers in my area were some of the early participants in 
the original CSP and we saw real benefits from this and the other 
conservation initiatives.
    I support the efforts undertaken last fall by the Agriculture 
Committees to streamline and consolidate the conservation title as part 
of the Select Committee process, and I urge you to continue with this 
approach in developing the conservation title in the 2012 Farm Bill.
    I would like to note that rice farming is one of the few commercial 
enterprises that actually promotes wildlife habitat and improves 
biological diversity.
    Since the very nature of rice production requires that fields be 
flooded for many months of the year, evidence shows unequivocally that 
it plays a vital role in supporting common environmental goals, such as 
protecting freshwater supplies and providing critical habitat for 
hundreds of migratory bird species.
    Without rice farming, wetland habitats in the United States would 
be vastly reduced. A loss of this magnitude would have a disastrous 
effect on waterfowl and a host of other wetland-dependent species.
    The clear and positive benefits that commercial rice production has 
for migratory birds and other wildlife species contribute not only to a 
more interesting and diverse landscape, but also provide economic 
benefits that support local economies and create jobs.
    By providing an environment favorable to wildlife advancement, rice 
production clearly generates positive benefits to the economy and 
society.
Farm Bill 2012
    Farm policy should be designed to support a strong and dynamic U.S. 
agriculture sector.
    As noted earlier, the 1996 Farm Bill's Direct Payments have 
provided critical help to farmers in the Mid-South--offering capital 
farmers could tailor to their unique needs.
    However, given the pressure to move away from this policy to more 
countercyclical policies, I support the following priorities:

   The triggering mechanism for assistance should be updated to 
        provide tailored and reliable help should commodity prices 
        decline below today's production costs, and should include a 
        floor or reference price to protect in multi-year low price 
        scenarios.

   Second, as payments would only be made in loss situations, 
        payment limits and means tests for producers should be 
        eliminated.

   Third, Federal crop insurance should be improved to provide 
        more effective risk management for rice in all production 
        regions, beginning with the policy development process.
Price Protection Is Imperative
    Given the price volatility for the crops I produce, and the fact 
that most crops in my area are irrigated, most of the risk that I face 
is on prices, not necessarily production. This is very true for my 
rice, which is fully irrigated, but most of my others crops are 
irrigated as well. To address this primary risk, I believe providing 
effective levels of price support for all crops should be the central 
focus of this farm bill, and honestly this is what farm policy has 
historically been focused on and that should continue.
    I hear some contend that a revenue-based policy with no reference 
or floor price is the right approach to take in this farm bill and is 
all that is needed when coupled with crop insurance. It seems to me 
that this approach is flawed in several ways. First, this assumes that 
crop insurance works equally well for all crop and regions, which I can 
assure you is not the case today. Second, this assumes that we won't 
face another 1998 through 2002 scenario where we have good commodity 
prices that quickly fell to catastrophic levels dues to global factors. 
Third, this assumes that if commodity prices fall then input costs will 
decline in sync and proportional to the decline in prices. I have to 
say that if history is any guide, then I believe all three of these 
assumptions will prove wrong. And by not planning now for this type of 
scenario, we are setting ourselves up for another situation where farm 
policy will not be equipped to respond to this price decline. The 
result will be a significant economic downturn in rural America, 
followed by calls for Congress to provide additional economic 
assistance in a time of large Federal budget deficits and debt.
    In addition, what happens if the price of only one or two 
commodities decline sharply? I can't imagine that input costs are going 
to decline in this scenario, so producers of these crops are forced to 
deal with a severely depressed price environment where our options are 
to either stop producing all together, or shift into the other crops 
with higher prices. This could have severe implications to the 
infrastructure for the crops with depressed prices and reduced 
production. We have seen this occur in some areas with both rice and 
cotton infrastructure and I believe we can ill-afford a farm policy 
that would not provide us with effective down side price protection to 
forestall any further contraction of these industries.
    For example, based on the farm bill process last fall, I believe 
the reference price for rice should be increased to $13.98/cwt ($6.30/
bu). This level would more closely reflect the significant increases in 
production costs for rice. And this reference price should be a 
component of both the price-loss policy and the revenue-loss policy to 
ensure downside price protection.
Producer Choice
    In addition, there should be true options for producers that 
recognize that a one-size-fits-all approach to farm policy does not 
work effectively for all crops or even the same crop in different 
production regions.
    Here in the Mid-South where I farm, a price-based loss policy is 
viewed as being most effective in meeting the risk management needs, 
again largely due to our consistent production as a result of large 
investments in irrigation infrastructure and being blessed with 
adequate water resources. Specifically, this policy should include a 
price protection level that is more relevant to current cost of 
production; paid on planted acres or percentage of planted acres; paid 
on more current yields; and take into account the lack of effective 
crop insurance policies for many crops in my area.
    Using rice as an example, this is a crop grown in a fairly limited 
geographic area, yet there are distinctions between growing regions 
that make a difference in what policy will work best for rice. In the 
California production region, although the existing revenue-based 
policy still does not provide effective risk management, efforts to 
analyze modifications which will increase its effectiveness continue. 
Since rice yields are highly correlated between the farm, county, crop 
reporting district, and state levels, we believe the revenue plan 
should be administered for rice at either the county or crop reporting 
district level to reflect this situation rather than lowering guarantee 
levels to use farm level yields. By setting loss triggers that reflect 
local marketing conditions, delivering support sooner, and 
strengthening revenue guarantees that account for higher production 
costs as well as the absence of effective crop insurance, California 
rice producers are hopeful that an effective revenue option can be 
developed.
    While I have focused on the need for a choice for rice producers in 
different regions, this also applies for producers of most other 
grains. I support having policy options available for corn, soybeans, 
and wheat, which I produce, and believe that both a price-based policy 
and a revenue-based policy should be offered as options for these 
crops.
    I indicated earlier that I am also a cotton producer. I want to 
encourage the Committee to include the cotton industry's area wide, 
risk management proposal in the new farm bill. It has been designed to 
fit the new budget constraints, while providing a reasonable and 
sustainable safety net for cotton producers. While it is certainly not 
perfect and is not comparable to our current policy, it represents the 
substantial reform necessary to provide a basis to resolve the 
longstanding Brazil WTO case. It does fit the cotton industry's 
situation far better than the revenue plans designed by Midwestern 
interests for grains and oilseeds. And it preserves the marketing 
assistance loan, with modifications, that is so important to our entire 
industry. It is imperative that the Brazil case be resolved by the end 
of 2012 to eliminate any possibility that Brazil will impose the 
prohibitively high tariffs authorized by the WTO. Retaliation in the 
form of high tariffs will disrupt U.S. exports and adversely impact 
U.S. businesses across the board.
    Bankability--SURE is not tailored to the multiple business risks 
producers face. ACRE, while offering revenue-based protection, is 
complicated by requiring two loss triggers; providing payments nearly 2 
years after a loss; and provides no minimum price protection--it is not 
bankable. For example, on farms I enrolled in the ACRE program I just 
received this month the ACRE payments for the 2010 crop. This is not a 
policy I can take to a lender and show that it will provide a 
meaningful and timely safety net. The marketing loan and target prices 
are plain and bankable--unfortunately the trigger prices are no longer 
relevant to current costs and prices.
    Defendable--It makes sense to provide assistance when factors 
beyond the producer's control create losses for producers. I believe 
that tailored farm policies are more defendable. For this reason, 
updating bases and yields or applying farm policies to planted acres/
current production and their triggering based on prices or revenue, 
depending on the option a producer chooses. However, policy choices 
should not result in severe regional distortions in commodity policy 
budget baselines from which reauthorized commodity policies must be 
developed. Whatever is done should allow for proportional reductions to 
the baseline among commodities.
    Building a safety net to withstand multi-year low prices--Whether 
in a revenue-based plan, or a price-based plan, reference prices should 
protect producer income in a relevant way in the event of a series of 
low price years. Ideally, this minimum could move upward over time 
should production costs also increase, this being of particular concern 
in the current regulatory environment.
    No distortion of planting decisions--Any commodity specific farm 
policy that is tied to planted acres must be designed with care so as 
to not create scenarios that incentivize farmers to plant for a farm 
policy. As I have followed the current farm bill debate since last 
fall, I am amazed at some of the assertions about a price-based policy 
distorting planting decisions and resulting in large acreage shifts. 
The price levels that I understand were developed last year and how 
they were factored based on acreage and yield percentages would have 
meant they were well below our costs of production for all crops. This 
idea that maintaining a price-based policy is somehow distorting, and 
that a revenue-based policy that is based off historically high prices 
is non-distorting is misleading.
Payment Limitations and Means Testing
    I strongly oppose any further reduction in the payment limit and 
adjusted gross income (AGI) levels provided under the current farm 
bill. Payment limits have the negative effect of penalizing viable 
commercial size, family farms the most when crop prices are the lowest 
and support is the most critical. To be a viable farm, we must use 
economies of scale to justify the large capital investment costs 
associated with farming today. It is essential that producers maintain 
eligibility for all production to the non-recourse loan. Arbitrarily 
limiting payments results in farm sizes too small to be economically 
viable, particularly for rice, cotton, and grain farms across the 
Sunbelt. The current payment limit and AGI provisions have created 
significant paperwork burdens and costs to producers to comply and 
remain in compliance. As oppressive as these limits are, at a minimum 
Congress should not make any further reductions or limits that further 
penalize commercially viable farms.
2011 Efforts for Submission to the Joint Committee on Deficit Reduction
    I believe that the package prepared for recommendation for the 
Budget Control Act of 2011 is a good framework on which to build the 
2012 Farm Bill. The choice of risk management tools that producers can 
tailor to the risks on their own farms, providing under each of those 
options more meaningful price protection that is actually relevant to 
today's production costs and prices. I appreciate the hard work of the 
House and Senate Agriculture Committees and their staff to address the 
budget constraints you are under, while working in a bicameral and 
bipartisan fashion to achieve workable solutions for the farm bill.
Conclusion
    Again, thank you for your leadership and for the opportunity to 
offer my testimony this morning. I look forward to working with you and 
your staff as we move forward in this process. I would be happy to 
respond to any questions you might have.

    The Chairman. Thank you, Mr. Combs.
    Mr. Flowers, proceed when you are ready.

STATEMENT OF RICHARD BOWEN FLOWERS, Jr., COTTON, CORN, SOYBEAN, 
                   WHEAT, AND RICE PRODUCER,
                         CLARKSDALE, MS

    Mr. Flowers. First, I would l like to offer my thanks to 
Chairman Frank Lucas and Members of the Committee for the 
chance to provide input on the importance of an effective and 
flexible farm policy. My thanks are also extended to 
Congressman Rick Crawford for hosting today's hearing. My name 
is Bowen Flowers and I operate a diversified family farm 
partnership in and around Clarksdale, Mississippi, which is 
about 150 miles south of Jonesboro. My crop mix includes 
cotton, corn, soybean, wheat, and rice.
    Mr. Chairman, I understand the daunting task facing this 
Committee with the development of new farm legislation. Budget 
pressures will mean addressing a broad array of interests and 
priorities with less money. In my opinion, agriculture is 
willing to take a proportionate contribution to deficit 
reduction, but efforts to impose inequitable reductions on 
agriculture should be strongly opposed.
    With respect to production agriculture, I encourage this 
Committee to take into consideration the diversity of 
production practices, cost structures and risk profiles. A one-
size-fits-all farm program cannot address this diversity, and I 
hope that the eventual farm bill will offer a range of programs 
structured to address the needs of the different commodities 
and production regions.
    I also urge the Committee to complete the farm bill this 
year, in advance of the expiration of the current legislation. 
We need some certainty regarding farm programs as we look at 
the long-term investments necessary to keep our farming 
operations economically viable.
    Although my operation has a diversified mix of crops, I 
consider cotton my primary crop. As you are well aware, cotton 
faces the additional challenge of resolving an ongoing trade 
dispute with Brazil. In that dispute, a WTO panel found fault 
with cotton's marketing loan and target price. In preparing for 
the expedited farm bill debate, cotton producers had to make 
some difficult policy decisions. To that end, the National 
Cotton Council has proposed dramatic changes to upland cotton 
programs by eliminating the target price and introducing a 
formula that will allow the marketing loan to adjust lower in 
times of low prices. In place of the target price as well as 
the ACRE program and the direct payment, the cotton industry is 
proposing a revenue-based insurance product that will address a 
level of risks for which current insurance products do not 
offer affordable options.
    I strongly support the industry's proposal known as STAX, 
and hope the Committee looks favorably on this option when 
crafting the next farm bill. I commend the National Cotton 
Council for developing this area-wide revenue-loss crop 
insurance program. It should be noted since this is a crop 
insurance program, producers would be required to pay part of 
the cost of such coverage. Covering up to 95 percent of revenue 
is especially important in my region, based on high cost of 
inputs and thin margins. Several years of five percent or more 
revenue losses would be economically devastating to my 
operation.
    While I am a diversified producer, it is important to note 
that cotton production is the most single significant economic 
driver in my area. It means jobs on the farm, in gins, 
warehouses and through the production and processing cotton 
cycle. The spin-off impact on rural communities in the Delta, 
for input suppliers, equipment dealers, and others is also 
significant. Even a moderately sized city such as Clarksdale is 
very dependent on agriculture. Therefore, a viable cotton farm 
policy is especially critical to our rural area.
    Mr. Chairman, I would also like to voice my concerns about 
the efforts to further tighten payment limits or impose 
arbitrary means tests. Effective farm policy must maximize 
participation without regard to size or farm income.
    In conclusion, I will touch briefly on two final points.
    First, crop insurance is a critical tool for effective risk 
management. I personally purchase crop insurance coverage on my 
crops. With the STAX product, the cotton industry is proposing 
to broaden the menu of insurance choices. I encourage all 
existing products be maintained as well.
    Second, conservation programs were strengthened in the 2008 
Farm Bill, and I hope these programs will continue to provide 
workable options for Mid-South farming operations.
    Thank you again for the opportunity to offer these comments 
and I will be happy to answer questions at the appropriate 
time.
    [The prepared statement of Mr. Flowers follows:]

    Prepared Statement of Richard Bowen Flowers, Jr., Cotton, Corn, 
           Soybean, Wheat, and Rice Producer, Clarksdale, MS
    First, I would like to offer my thanks to Chairman Frank Lucas, 
Ranking Member Collin Peterson, and Members of the Committee for the 
chance to provide input on the importance of an effective and flexible 
farm policy. My thanks are also extended to Congressman Rick Crawford 
for hosting today's hearing. My name is Bowen Flowers and I operate a 
diversified family farm partnership in and around Clarksdale, 
Mississippi, which is about 150 miles south of Jonesboro. My crop mix 
includes cotton, corn, soybeans, wheat and rice.
    Mr. Chairman, I understand the daunting task facing this Committee 
with the development of new farm legislation. Budget pressures will 
mean addressing a broad array of interests and priorities with less 
money. In my opinion, agriculture is willing to make a proportionate 
contribution to deficit reduction, but efforts to impose inequitable 
reductions on agriculture should be strongly opposed.
    With respect to production agriculture, I encourage this Committee 
to take into consideration the diversity of production practices, costs 
structures and risk profiles. A one-size-fits-all farm program cannot 
address this diversity and I hope that the eventual farm bill will 
offer a range of programs structured to address the needs of the 
different commodities and production regions.
    I also urge the Committee to complete the farm bill this year--in 
advance of the expiration of the current legislation. We need some 
certainty regarding farm programs as we look at the long-term 
investments necessary to keep our farming operations economically 
viable.
    Although my operation has a diversified mix of crops, I consider 
cotton my primary crop. As you are well aware, cotton faces the 
additional challenge of resolving an ongoing trade dispute with Brazil. 
In that dispute, a WTO panel found fault with cotton's marketing loan 
and target price. In preparing for the expedited farm bill debate, 
cotton producers had to make some difficult policy decisions. To that 
end, the National Cotton Council has proposed dramatic changes to 
upland cotton programs by eliminating the target price and introducing 
a formula that will allow the marketing loan to adjust lower in times 
of low prices. In place of the target price, as well as the ACRE 
program and the direct payment, the cotton industry is proposing a 
revenue-based insurance product that will address a level of risks for 
which current insurance products do not offer affordable options.
    I strongly support the industry's proposal, known as STAX, and hope 
the Committee looks favorably on this option when crafting the next 
farm bill. I commend the National Cotton Council for developing this 
area-wide revenue-loss crop insurance program. It should be noted that 
since this is a crop insurance program, producers would be required to 
pay part of the cost of such coverage. Covering up to 95% of revenue is 
especially important in my region based on high cost of inputs and thin 
margins. Several years of 5-10% revenue losses would be economically 
devastating to my operation.
    While I am a diversified producer, it is important to note that 
cotton production is the most significant economic driver in my area. 
It means jobs on the farm, in gins, warehouses and on through the 
production and processing cotton cycle. The spin-off impact on rural 
communities in the Delta and other regions for input suppliers, 
equipment dealers and others is also significant. Even a moderately-
sized city such as Clarksdale is very dependent upon agriculture. 
Therefore a viable cotton farm policy is especially critical to our 
rural economy.
    As a cotton farmer, I understand that my ability to produce a crop 
will be dependent on strong demand for my product. The U.S. cotton 
industry sells both to domestic textile mills as will as international 
mills, and both markets are extremely important. Fortunately, the 2008 
Farm Bill included programs that benefit both markets.
    In the case of U.S. textile mills, the 2008 farm law introduced the 
Economic Adjustment Assistance Program. The program is a success story 
that is revitalizing the U.S. textile manufacturing sector and adding 
jobs to the U.S. economy. The program provides a payment to U.S. 
textile manufacturers for all upland cotton consumed. The payment rate 
from August 1, 2008 through July 31, 2012, is 4 cents per pound of 
cotton used, and will be adjusted to 3 cents per pound beginning on 
August 1, 2012. I encourage the continuation of this important program 
in the new farm law.
    In addition, the continuation of adequately funded export promotion 
programs, including the Market Access Program (MAP) and Foreign Market 
Development (FMD) Program, are important in an export-dependent 
agricultural economy. Individual farmers and exporters do not have the 
necessary resources to operate effective promotion programs which 
maintain and expand markets--but the public-private partnerships 
facilitated by the MAP and FMD programs, using a cost-share approach, 
have proven highly effective and have the added advantage of being WTO-
compliant.
    Mr. Chairman, I would also like to voice my concerns about efforts 
to further tighten payment limits or impose arbitrary means tests. 
Effective farm policy must maximize participation without regard to 
size or farm income. Artificially limiting benefits is a disincentive 
to economic efficiency and undermines the ability to compete with 
heavily subsidized foreign agricultural products. I appreciate the 
pressures from some in Congress for even more restrictive limits, but I 
would like to remind the Committee that the 2008 Farm Bill contained 
significant changes with respect to payment limitations and payment 
eligibility. In fact, the 2008 farm law included the most comprehensive 
and far-reaching reform to payment limitations in 20 years. The 
limitations were made more restrictive, and the adjusted gross income 
test was substantially tightened. As part of the 2012 Farm Bill, I urge 
this Committee to not impose any further restrictions on payment 
eligibility including lower limits or income means tests.
    In conclusion, I will touch briefly on two final points. First, 
crop insurance is a critical tool for effective risk management. I 
personally purchase crop insurance coverage on my crops. With the STAX 
product, the cotton industry is proposing to broaden the menu of 
insurance choices. I encourage all existing products be maintained as 
well. Second, conservation programs were strengthened in the 2008 Farm 
Bill, and I hope those programs will continue to provide workable 
options for Mid-South farming operations.
    Thank you again for the opportunity to offer these comments. I will 
be happy to answer questions at the appropriate time.

    The Chairman. Thank you, Mr. Flowers.
    Mr. Burch, whenever you are ready to proceed.

   STATEMENT OF TIM BURCH, COTTON AND PEANUT PRODUCER, BURCH 
                       FARMS, NEWTON, GA

    Mr. Burch. Good morning, Mr. Chairman and Members of the 
Committee. My name is Tim Burch. I am a native of Baker County, 
Georgia which is located in the southwest part of the state. My 
father, brother, and I run a diversified farming operation. We 
have approximately 500 acres of peanuts, 1,500 acres of cotton 
and 150 head of cattle. I have been farming for 37 years and 
live on the farm of my grandparents. I serve on the Georgia 
Peanut Commission and I am an alternate to the National Cotton 
Council. I also am active in Georgia Farm Bureau.
    It is critical that Congress pass a 5 year farm bill. 
Farmers, agribusiness, and financial institutions need as much 
certainty as possible in an industry that has a very large 
number of variables impacting profits and losses.
    When I began farming, the peanut industry was driven by a 
Federal supply management peanut policy. In 2002, peanut 
growers met with the House Agriculture Committee leadership and 
asked the Committee to move our program policy from the peanut 
quota program to a marketing loan type program. This marketing 
loan program is what we have today. It has been very successful 
for our industry. We support the current program as included in 
the 2008 Farm Bill but we recognize that there is significant 
effort to eliminate direct payments. All of our policy analyses 
assume that direct payments are eliminated. For the last 
several farm bills, peanut producers have relied on the 
University of Georgia's National Center for Peanut 
Competitiveness for farm policy economic analyses. The Center 
has 22 U.S. representative peanut farms established and 
maintained by the Center. As farm organizations, Members of the 
House and Senate, as well as public institutions offered farm 
policy concepts for the 2012 Farm Bill, the Center would 
analyze each proposal, including multiple scenarios through the 
22 U.S. representative farms dispersed throughout the peanut 
belt.
    What was evident with each of these alternative or revenue 
type programs is that they did not work on the 22 
representative farms. I recognize that some organizations 
believe that a one-size-fits-all revenue program will work for 
the U.S. agricultural economy. I do not agree. Our cost 
structure and equipment needs alone are significantly different 
than that of the Midwest and our peanut producers require very 
specialized equipment. Why do these revenue proposals not work 
for peanuts?
    First of all, there is no consideration for irrigated 
versus non-irrigated production practices. There are 
significant yield differences for peanuts--at 1,100-1,400 
pounds, based on Risk Management Agency's data and the U.S. 
peanut representative farms. The Center's 2011 preliminary data 
indicates that the yield differences could reach 3,000 pounds 
and higher per acre in Georgia. National Agricultural 
Statistics Service county yields do not separate out the 
differences between irrigated and non-irrigated peanuts.
    Second, there is no revenue insurance program for peanuts.
    Third, peanuts do not have any source of predicted harvest 
price.
    Peanuts do not and will not have a futures market like 
other row crops.
    The Rotterdam price series with appropriate conversion 
formula for peanuts is the best source. Our own U.S. Government 
used the Rotterdam price series during the GATT trade 
negotiations and the USDA Foreign Agricultural Service reports 
that price series.
    Utilizing NASS-CRD and NASS county yields will not work for 
peanuts. None of the six Georgia representative farms analyzed 
triggered on either the CRD criteria or the county level using 
existing NASS yields. No CRD district that has one of the 
Center's representative peanut farms outside of the Southeast 
would trigger a payment. Peanuts have a greater variability of 
yield within a county and CRD than any other crop excluding 
cotton.
    An Olympic average does not work to protect a farm from a 
period of depressed prices or weather related depressed yields.
    Given the 2011 peanut season, none of the non-irrigated 
producers who had between no yield and 1,000 pounds would have 
been helped by any of the proposed revenue proposals.
    If we eliminate direct payments, what will work for the 
peanut producers? After conferring with the Center over the 
last 9 months, we believe producers need a policy choice to 
manage risk, including revenue protection, price protection and 
crop insurance. I support producers having a choice between a 
countercyclical type program with a trigger price of $534 per 
ton and a revenue program. The Center believes this target 
price will serve as protection during periods of low prices. 
USDA estimates that the market price for peanuts is over $1,200 
per ton. I can assure you, just as any peanut producer or major 
buyer of peanuts would, that $534 target price will not 
increase peanut production or acreage. Please also note that we 
have to rotate peanuts and if our rotation gets out of sync 
then costs escalate and yields decline.
    At the same time, peanut producers need a revenue program 
that is a real viable choice for producers. This should include 
a reference price of $534 per ton and a world market price 
determined by the Rotterdam price analysis.
    Mr. Chairman, you and other Members of the Committee were 
successful in reforming payment limitation rules in the 2008 
Farm Bill. Working with agricultural groups and Members of 
Congress not on the Agriculture Committee, I believe the 
reforms in the 2008 Farm Bill were equitable, and I ask that 
the current adjusted gross income rules and payment limitation 
restrictions be continued in the 2012 Farm Bill.
    In closing, I appreciate the opportunity to testify before 
the Committee today. You have a difficult task as you attempt 
to reconcile a crisis in our Federal budget while assuring that 
America has an adequate and safe food supply.
    Thank you.
    [The prepared statement of Mr. Burch follows:]

  Prepared Statement of Tim Burch, Cotton and Peanut Producer, Burch 
                           Farms, Newton, GA
    Good morning, Mr. Chairman, Members of the Committee. My name is 
Tim Burch. I am a native of Baker County, Georgia which is located in 
the southwest part of the state. My father, brother and I run a 
diversified farming organization. We have approximately 500 acres of 
peanuts, 1,500 acres of cotton and 150 head of cattle. I have been a 
farmer for 37 years and live on the farms of grandparents. We are a 
family farm with a long, proud history. In addition, I am involved in a 
cotton gin and warehouse as well as a peanut buying point, warehouse 
and peanut shelling facility with 87 other growers in Georgia. Our 
agribusiness was founded on the principle that family farmers had to 
join together to market their products in order to have a future.
    I serve on the Georgia Peanut Commission and am an alternate to the 
National Cotton Council. I also am active with the Georgia Farm Bureau.
    I appreciate the opportunity to testify today on The Future of U.S. 
Farm Policy: Formulation of the 2012 Farm Bill. Our family's livelihood 
is based on agriculture and farm policy.
    It is critical that Congress pass a 5 year farm bill. Farmers, 
agribusinesses and financial institutions need as much certainty as 
possible in an industry that has a very large number of variables 
impacting profits and losses. A 5 year farm bill allows all segments of 
agriculture the opportunity to achieve the economic impact that all of 
us desire.
    When I began farming, the peanut industry was driven by a Federal 
supply-management peanut policy. In 2002, peanut growers met with the 
House Agriculture Committee leadership and asked the Committee to move 
our program policy from the peanut quota program to a marketing loan 
type program. This marketing loan program is what we have today. It has 
been very successful for our industry. We support the current program 
as included in the 2008 Farm Bill but we recognize that there is a 
significant effort to eliminate direct payments. All of our policy 
analyses assume that direct payments are eliminated. For the last 
several farm bills, peanut producers have relied on the University of 
Georgia's National Center for Peanut Competitiveness (Center) for farm 
policy economic analyses. The Center has 22 U.S. Representative Peanut 
Farms established and maintained by the Center. As farm organizations, 
Members of the House and Senate as well as public institutions offered 
farm policy concepts for the 2012 Farm Bill, the Center would analyze 
each proposal, including multiple scenarios through the 22 U.S. 
Representative Farms dispersed throughout the peanut belt.
    What was evident with each of these alternative or revenue type 
programs is that they did not work on the 22 Representative Farms. I 
recognize that some organizations believe that a one size fits all 
revenue program will work for the U.S. agricultural economy. I do not 
agree. Our cost structure and equipment needs alone are significantly 
different than the Midwest with our peanut producers requiring very 
specialized equipment. Why don't these revenue proposals work for 
peanuts?

   There is No Consideration for irrigated versus non-irrigated 
        production practices. There are significant yield differences 
        for peanuts--at least 1,100-1,400 lbs.--based on Risk 
        Management Agency (RMA) data and the U.S. Peanut Representative 
        Farms. The Center's 2011 preliminary data indicate that the 
        yield differences could reach 3,000 lbs. and higher per acre in 
        Georgia. National Agricultural Statistical Service (NASS) 
        county yields do not separate out the differences between 
        irrigated and non-irrigated peanuts.

   There is NO revenue insurance program for peanuts--all 
        proposals use revenue insurance as the core part of their 
        program where a producer is covered at the 65-85% level. 
        Peanuts had a GRIP yield insurance program but no peanut 
        farmers used it so RMA has discontinued the program. This 
        implies county yield based programs do not work for peanuts.

   Peanuts do not have any source for a predicted harvest 
        price.

   Peanuts DO NOT and WILL NOT HAVE A FUTURES MARKET like other 
        row crops. Multiple land-grant university studies and efforts 
        by the U.S. Department of Agriculture have all concluded that a 
        futures market is not an option for peanuts.

   The Rotterdam price series with appropriate conversion 
        formula for peanuts is the best source. Our own U.S. Government 
        used the Rotterdam price series during the GATT trade 
        negotiations and the USDA Foreign Agricultural Service reports 
        that price series.

   Utilizing NASS-CRD and NASS-County yields WILL NOT work for 
        peanuts. None of the six Georgia Representative Farms analyzed 
        trigger on either the CRD criteria or the county level using 
        existing NASS yields. No CRD district that has one of the 
        Center's Representative Peanut Farms outside the Southeast 
        would trigger a payment. Peanuts have a greater variability of 
        yields within a county and CRD than other row crops excluding 
        cotton.

   An Olympic average does not protect a farm from a period of 
        depressed prices or weather related depressed yields.

   Given the 2011 peanut season, none of the non-irrigated 
        producers who had between no yields to 1,000 lbs would have 
        been helped by any of the proposed revenue proposals.

    If we eliminate direct payments, what will work for peanut 
producers? After conferring with the Center over the last 9 months, we 
believe producers need a policy choice to manage risk--Revenue 
Protection, Price Protection and Crop Insurance. I support producers 
having a choice between a countercyclical type program with a target 
price of $534 per ton and a revenue program. The Center believes this 
target price will serve as protection during periods of low prices. 
USDA estimates that the market price for peanuts is over $1,200 per 
ton. I can assure you, just as any peanut producer or major buyer of 
peanuts would, that a $534 per ton target price WILL NOT increase 
peanut production or acreage. Please also note that we have to rotate 
peanuts and if our rotation gets out of sync then costs escalate and 
yields decline.
    At the same time, peanut producers need a revenue program that is a 
real, substantive choice for producers. This should include a Reference 
Price of $534 per ton and a world market price determined by a 
Rotterdam price analysis.
    In addition, to Producer Choice, our growers must have access to a 
full range of workable and useful crop insurance products in order to 
compete for acreage. Working toward these goals, the nation's peanut 
farmers came together 2\1/2\ years ago to begin work with private 
industry and RMA to develop a viable insurance program for peanuts. 
This new program proposal is very much like the successful revenue 
insurance policies for cotton and corn as well as several other crops. 
This new peanut policy would take a farmers average production history 
and let the farmer insure a percentage of it according to what the 
farmer needs to have guaranteed. This part is not changed from the 
present program, but what is different is that the farmer will be 
assured to receive what the peanuts are actually worth if he has a 
shortfall in production and not some arbitrary amount set in stone 
months before planting time. The farmer will receive payment on what 
the peanuts are worth at a certain period of time during the year, so 
farmers know whether they can afford to plant. It is critical that we 
have the support of RMA and the House Agriculture Committee to get the 
peanut crop insurance program viably priced and implemented in 2013. I 
would hope that the changes Congress makes for crop insurance, in the 
2012 Farm Bill, would be to improve the programs and not harm crop 
insurance products.
    I indicated earlier that I am also a cotton producer. I want to 
encourage the Committee to include the cotton industry's area wide, 
risk management program in the new farm bill. It has been designed to 
fit the new budget constraints, while providing a reasonable and 
sustainable safety net for cotton producers. While it is certainly not 
perfect and is not comparable to our current program, it represents the 
substantial reform necessary to provide a basis to resolve the long-
standing Brazil WTO case. It does fit the cotton industry's situation 
far better than the revenue plans designed by Midwestern interests for 
grains and oilseeds, and it preserves the marketing assistance loan, 
with modifications, that is so important to our entire industry. It is 
imperative that the Brazil case be resolved by the end of 2012 to 
eliminate any possibility that Brazil will impose the prohibitively 
high tariffs authorized by the WTO. Retaliation in the form of high 
tariffs will disrupt U.S. exports and adversely impact U.S. businesses 
across the board.
    Mr. Chairman, you and other Members of the Committee were 
successful in reforming payment limitation rules in the 2008 Farm Bill. 
Working with agricultural groups and Members of Congress not on the 
Agriculture Committee, I believe the reforms in the 2008 Farm Bill were 
equitable. I ask that the current adjusted gross income rules and 
payment limitation restrictions be continued in the 2012 Farm bill.
    In closing, I appreciate the opportunity to testify before the 
Committee today. You have difficult task before you as you attempt to 
reconcile a crisis in our Federal budget while assuring that Americans 
have an adequate, safe food supply.
    Thank you.

    The Chairman. Thank you, Mr. Burch.
    And for any of you in the audience who ever thought you 
wanted to be a witness, now comes the fun part--you get to 
answer questions from the Committee. With that, I recognize 
myself for 5 minutes.
    Mr. Brantley, some have suggested that using a reference 
price established in law would result in producers planting for 
the government program. Those same folks suggest that a 5 year 
Olympic average price in a revenue program has no impact on 
current planting decisions.
    Can you elaborate on the factors you consider when you make 
your cropping decisions and the role that reference prices 
would play in those decisions?
    Mr. Brantley. The role of the reference price as I see it, 
or the view that I see that I looked at last fall, determining 
whether we would grow more acres than is sustainable here in 
Arkansas, is just not feasible. The $13.98 target price, that 
figure that was given to us last fall, in all reality, you have 
to look at it on a whole-farm basis, 85 percent times your 
countercyclical yield, which in Arkansas is about 70 percent of 
your normal yield, is well below the cost of production. So 
those that say the target price reference price in that area, 
the $13.98, would increase production are just, in my opinion, 
dead wrong. Our true cost of production is in the $14.00 range. 
If you average that across all the U.S., the Olympic average, 
if commodity prices were high for a long time and then prices 
fell, yes, that would work. But what if it is the other way 
around.
    I can see the Olympic averages creating more acres than the 
target price.
    The Chairman. So the goose should always be careful when 
talking about the gander, huh?
    Mr. Veach, I understand that Arkansas Farm Bureau recently 
made a decision to dissent from the American Farm Bureau 
policy. Can you talk about some of the reasons that the 
Arkansas Farm Bureau determined it could not support the SSRP 
proposal? And to your knowledge, along with that, is the 
Arkansas Farm Bureau the only state that disagreed with this 
approach?
    Mr. Veach. Yes. The SSRP program is a deep loss crop 
insurance program that triggers on regions. And that just 
really does not work, especially for some of our commodities 
here in Arkansas. We wanted the opportunity to speak to this 
Committee and to our Congressional delegation on what we feel 
like is a more workable plan for Arkansas agriculture, taking 
into consideration those regional and commodity differences. 
And to do that, it was for us to dissent from the American Farm 
Bureau policy that is supporting the deep loss regional trigger 
approach. And so we feel like that we need a more diverse type 
of farm bill that will take into consideration these regional 
and commodity differences.
    Now we did not take that lightly. We deliberated on that 
for a good long while, but we felt like it was extremely 
important, for us to represent the producers in our state, that 
we would dissent from that program.
    The Chairman. Fair enough.
    Mr. Combs, regarding the package the Committee developed 
last fall, I remember reading an article where it was suggested 
that a price option would cause rice acres in this country to 
explode by 5 or 10 million acres. Do you agree with that 
assessment? And why?
    Mr. Combs. I think that article was put out by people 
talking from their position and that was a different commodity 
and, no, it is not going to result in an explosion. Like Mr. 
Brantley pointed out, the plan that you had put forward, the 
Committee put forward, only offered that price protection on 85 
percent of your planted acres and then on historic yields. So, 
farming is a lot--and the machinery business--if it was easy, 
everybody would be doing it. And that is not the case with this 
program.
    The Chairman. Fair enough.
    Mr. Burch, based on the analysis that the peanut industry 
has done through the University of Georgia, could you discuss 
if a revenue type shallow loss program would work for peanuts?
    Mr. Burch. No, sir, it would not, on the fact that it does 
not distinguish between irrigated and non-irrigated. There is 
such a variability. On my own farm this past year, I had as 
good an irrigated yield as I have ever had at an additional 
cost. There was a 3,200 pound yield difference between my 
irrigated and dryland crop this year. So not taking that into 
consideration, it would not work.
    The Chairman. Fair enough.
    Mr. Flowers, my last question, my time is about to expire. 
Did I understand you basically to say that commodity title 
resources should follow production? That is a pretty amazing 
concept for some of the folks that we serve with back East to 
understand.
    Mr. Flowers. We had a lot of hard decisions to make, since 
cotton was kind of pointed out in the Brazil case, the target 
prices were pointed out in the case and the marketing loans. 
That is the reason we kind of came up with the STAX program to 
take care of that situation.
    The Chairman. I just could not help but note what I 
understood your comment to be, resources should follow the 
production. There are a lot of folks we serve with who want to 
use the farm bill to do everything imaginable in the way of 
directing resources. We will talk about that again in a moment.
    My time has expired. I now turn to the gentleman from 
Texas, who actually has fewer trees than I have in the 3rd 
District of Oklahoma. Mr. Neugebauer for 5 minutes.
    Mr. Neugebauer. Thank you, Mr. Chairman, and thank you for 
having this hearing. I appreciate Mr. Crawford encouraging the 
Committee to come to Arkansas, he is a great Member and I am 
enjoying serving with him. We appreciate you all sending him to 
help us do some great work for our country.
    You know, one of the things since I have been in Congress, 
this is my fifth term, I have been working a lot on crop 
insurance. In fact, in the 2008 Farm Bill, we had a concept 
that we had approved and passed out of our Committee. 
Unfortunately, the Speaker of the House, Ms. Pelosi, decided to 
take that out of the farm bill. But I have reintroduced what is 
called the Crop Risk Options Plan Act of 2011 and some of you 
may or may not have seen that. And basically it talks about 
taking a GRP or a GRIP policy and putting it on top of a multi-
peril to give producers some flexibility. Because one of things 
I know, as Mr. Brantley pointed out, farming today is big 
business. And in order to be competitive in the global economy, 
unfortunately, it is more and more difficult for smaller 
producers to do that. And so as you get into these large 
operations, very diverse, it takes more and more capital and 
more and more loans to do that. In order to make those 
businesses viable, we need a very strong and effective crop 
insurance, risk management for our producers.
    One of the things that I think is an important part of that 
is having the flexibility. For example, talking about the 
regional trigger, the trigger for my crop bill is a county 
trigger, which we think is more reflective of the conditions, 
and not the region. Depending on how you draw geographical 
regions, the ability to have different conditions within those 
regions is very probable. Generally in a county, I think it is 
easier to be more reflective.
    One of the things I wanted to talk about, because we keep 
hearing the price, some kind of a price protection, yield 
protection, within these risk management policies. One of the 
things we are going to be faced with is we are going to be 
given a certain amount of money, our Committee is, to craft a 
farm policy. So what I want to do is leave as much flexibility 
in there. So one of the things I wanted to ask you to comment 
on is when we look at being able to add some additional 
features to this, obviously that increases the scoring. So 
should we make, for example, some of these things options 
instead of a mandatory part of the policy. So if a producer 
wanted to buy price protection, for example, he could choose--
he or she could choose to do that or not. And that would impact 
the cost of the policy, and the same way with some additional 
yield protection. Should that be something that we are thinking 
about or considering as we begin to look at the crop insurance? 
And what is your feeling about, for example, having a county 
trigger?
    Mr. Brantley.
    Mr. Brantley. I believe an option is exactly what we are 
asking for, I think all of us would agree here at this panel. 
An option of a price over revenue is exactly what we need.
    Help me here, Mr. Combs, if you do not mind.
    Mr. Combs. Well, we would like the price protection and 
then also our industry is trying to develop a formula that 
would also offer input cost protection. And it would be--and 
the more options you can have on it, in theory, the lower it 
should score. I mean if the producer wanted that level of 
coverage, they should be able to purchase it. But we have to 
have the help of RMA to get these policies approved. You know, 
we have been beating our head against the wall for 4 years and 
we had two concepts and we still have not gotten them approved.
    Mr. Neugebauer. That is one of my frustrations as well. The 
thing about what we set out to do with our bill was to take 
existing products so we did not have to go out in the field and 
test those. So it is basically just giving them the authority 
to take existing products basically and combine those.
    So, when you start talking about those options, obviously 
it increases the cost of those, but when I look around this 
table we see a lot of folks that have different commodities. 
And so what we want to be able to do is allow you to determine, 
for those particular commodities, what is the best option for 
you. And not necessarily tie you into one policy to try to 
manage the total farm operation.
    Mr. Combs. I understand that, but existing crop insurance 
products have not been successful in the rice industry. That is 
the point that we would drive home.
    Mr. Neugebauer. Those are the changes that I think we are 
going to need to look at. So thank you very much, Mr. Chairman.
    The Chairman. The chair now recognizes the gentleman from 
Arkansas, Mr. Crawford, for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman.
    Mr. Veach, I want to direct my first question to you. As a 
result of budget cutting and political environment and the 
Brazilian WTO case against cotton, the cotton industry came up 
with the STAX plan to serve as a primary risk management tool 
for cotton growers. Can you give some detail as to whether this 
type of coverage would work for Arkansas cotton producers?
    Mr. Veach. I think that the STAX program, for a lot of the 
cotton industry, cotton producing areas, would work very well. 
And it would work in Arkansas as well, but I think with the 
amount of irrigation that we have and how we mitigate that risk 
in irrigation, that we need a little more protection in price. 
I think that one of the best ways of doing that is if we have 
these options. It has to be a viable option, and I think that 
producers could decide if that program is the one that works 
best for them, or if more of a price-based type program would 
work better for them. I think those options have to be very 
viable options. It cannot be just an option. It has to be one 
that really provides a safety net. If we have options to 
provide a safety net, then we have the opportunity to pick 
which one of those works best for that particular commodity on 
that particular type farmer's ground.
    I think that we are not looking at great diversity in 
programs. I do not think we can have a whole large assortment 
of programs to pick from, but I think that we can--if the 
Committee can come to some--where that we can have very viable 
options, a couple, two or three, that producers can use the 
choice to do that.
    But I think the STAX program works very well for a lot of 
producers, but some maybe would rather have more price 
protection.
    Mr. Crawford. Each of the witnesses gave some comments 
about crop insurance and particularly as it applied to rice and 
some specific issues there. I want to switch gears just a 
little bit and talk about conservation.
    And I will kind of direct this to each of you, but I will 
start with Mr. Brantley. This Committee is going to need to 
take a serious look at lowering the acreage cap with the CRP 
and also deciding the future purpose of the program. Given the 
increased demand for grain, high crop prices, and increasing 
land values, what do you see as the future role of CRP and what 
changes would you like to see in the program?
    Mr. Brantley. I do not participate in the CRP program, so 
to suggest changes, I do not know that I can answer that. But 
conservation programs are very important to me and my family on 
our farm, EQIP being the number one program. Water, we talk 
about irrigation here on this panel, water storage is critical 
for a rice crop here in Arkansas, so the EQIP program, I think 
for me, should be first and foremost when we talk about 
conservation programs. I do realize CRP is a big part of 
conservation, plays a very important role. But I could not make 
any recommendations today.
    Mr. Crawford. Mr. Combs.
    Mr. Combs. I share Dow's thoughts. I mean our farms 
participate in EQIP and the Conservation Security Program and 
the Migratory Bird Habitat Program and WRP. So we are in four 
conservation programs and I think they are very important for 
both our farms for conservation and then for other stakeholders 
in the country, because they provide benefits for water fowl 
and wildlife and other things.
    But CRP is not a big deal in the Delta and so I feel more 
confident to comment on these programs than I would be on the 
CRP.
    Mr. Crawford. Okay. And the reason I used CRP as an 
example, just strictly as an example, it has just been around 
for what, 25 years now, and so in general terms----
    Mr. Combs. It is a big deal to a lot of people, it is just 
not on--we are pretty tied to the NRCS office in our county, 
but we are just not as much on CRP.
    Mr. Crawford. Mr. Flowers, any input on that?
    Mr. Flowers. CRP has been a good product in the Mississippi 
Delta. There has been a lot of land going into CRP and WRP. 
Like everybody else, we are 80 percent irrigated and a lot of 
the land that is not irrigated has been put in CRP for 
wildlife. Something I would like to see, we are starting to 
have some water issues and we want to conserve our water for 
future generations and one thing I would like to see is maybe 
developing a CRP program where we could impound water and use 
that for irrigation.
    Mr. Crawford. Okay.
    Mr. Flowers. EQIP has been very important to our area also.
    Mr. Crawford. Excellent. Mr. Burch, last word on that.
    Mr. Burch. I just do not see CRP as being critically 
important in a time that we are needing to maximize our 
production to feed this world.
    Mr. Crawford. Excellent. Thank you. I yield back.
    The Chairman. The gentleman yields back.
    The chair now turns to the gentleman from Indiana for his 5 
minutes.
    Mr. Stutzman. Thank you, Mr. Chairman, and I want to thank 
each of you for being here today.
    Being a fourth generation farmer from Indiana, it is great 
to sit here and listen to you all and your stories and your 
experiences. And I believe that we in agriculture have a great 
opportunity to lead in our nation's capital. And I appreciate 
the Chairman's leadership on leading in the negotiations last 
year with the Committee, the super committee, that was designed 
to fix our country's problems, which I believe the Chairman did 
the right thing in putting a bill together and crafting a bill 
and being prepared. That is what farmers do, we are always 
prepared for the worst and we are always trying to be prepared 
for the best as well. But we focus on the worst probably more 
than anything.
    I have just a couple of questions, and really for any of 
you, because you are--two of you are from Arkansas and the 
others from other parts of the South here. You know, being a 
farmer, I remember going into the bank with my father and I 
always hated sitting on the farmer's side of the desk. I always 
wanted to be on the banker's side. Well, today, I would rather 
be on the farmer's side. The bankers, they have kind of taken 
it on the chin lately.
    Has credit availability changed for you all and how have 
your experiences been with access to credit and the experiences 
that you have. And what you may see with your neighbors around 
your communities and the challenges, what experiences are 
people facing right now in your communities.
    Maybe we can start with Mr. Burch and just go right down 
the line.
    Mr. Burch. Well, in my area it is pretty much like I am 
sure it is all over the United States, the people that do not 
need to borrow have ready access to money. And the people that 
need it are having trouble getting it. So it just depends on 
your collateral situation. It is very tight for people that 
have marginal operations.
    Mr. Stutzman. Mr. Flowers.
    Mr. Flowers. I am a director on a bank and it is really 
important for us, we would like to see some kind of crop 
insurance that the farmers in our area can afford and take 
advantage of. I know the banks want to make sure that they have 
pretty good collateral and stuff. Our problem is we do not have 
the deep losses, but the losses between the deep losses and 
what it actually costs to produce is where we have our 
problems. So that is kind of what we look at. So that would be 
very helpful if we had some kind of coverage that would take 
care of that.
    Mr. Combs. Typically in agriculture, credit is available 
when times are good. And that is what we are seeing now. And 
so, credit will tighten up when the prices decline and that is 
why the farm bill is so important, because when credit does 
tighten up, we need protections that can be offered in farm 
policy in order to ensure that that credit still flows. I am 
not saying that there is no lack of credit right now, because 
there could be in individual cases, but everybody is wanting to 
lend money to farmers today, compared to the late 1990s.
    Mr. Veach. I think that if direct payments are done away 
with, it is going to affect the lending quite a bit, especially 
loans to rice producers and cotton producers in the fact that 
you are going to lose what is a guarantee up front, but you are 
going to have a certain amount of dollars coming in on that 
operation. And those producers will have to be able to show 
through their cash flow and the collateral that they can pay 
that loan back without that direct payment. And that computes 
out to $100 an acre or so for rice and $30 and $40 an acre on 
cotton. And if you compute that out in rice in the State of 
Arkansas on actual planted acres, you are looking at probably 
at least close to $50 an acre now that you are going to have to 
show to your lender that you can get by without that. And that 
is going to be a big factor in getting loans.
    Mr. Brantley. I would echo Mr. Veach's comments. The loss 
of direct payments will make it very difficult. One thing to 
note is how important our community banks are versus our larger 
banks. The community banks understand us, they know us well, 
they know farming, they know the risks. It is vitally important 
that we keep those community banks in our neighborhoods and 
keep them around versus large corporate banks who just strictly 
look at the number and not necessarily a name or understand the 
risk.
    Mr. Stutzman. Mr. Brantley, real quick, we have the warning 
light here, but could you give us a quick example. Rice seems 
to be the one that you are most concerned about, across the 
table here, about protection. Is that right? Cotton, Mr. 
Flowers mentioned cotton as well. I mean, do you think there is 
room for us focusing on those two particular crops? Do the 
other crops need the direct payment program behind them?
    Mr. Brantley. Rice is the most important on our farm. Yes, 
I think direct payment would fit my farm best for all crops, 
but rice being the most important because it is the most 
politically traded commodity in the world, compared to the 
other commodities.
    Mr. Stutzman. Right. Thank you.
    The Chairman. The chair will yield to the gentleman from 
Indiana 30 seconds, and would the gentleman yield to the 
Chairman?
    Mr. Stutzman. Yes, sir.
    The Chairman. Mr. Flowers, you said you are on the board of 
directors of a bank. My bankers tell me in Oklahoma, and I 
assume it is the same across the country, that they are in a 
more rigorous period of examination by the bank examiners. Long 
gone are the days when it was just a simple process. It is now 
a really horrendous process and that in every farmer's loan 
file, not only do you have copies of participation in the farm 
bill, but you also have to have all your crop insurance records 
and all those things to prove that you are covering all your 
bases. Is that your observation?
    Mr. Flowers. That is definitely, we are going through more 
and more rigorous examinations in the bank. First thing we look 
at is what the direct payments are, what crops have you already 
sold and what kind of insurance you have.
    The Chairman. So it does not necessarily matter how great 
your record is and how much confidence your banker has in you. 
If he or she does not have all of those records in your file to 
show the examiner, then the examiner comes down on the loan 
officer, which causes complications. So for a variety of 
reasons, these tools are absolutely necessities. Correct, sir?
    Mr. Flowers. That is correct. The days of just knowing who 
you are dealing with are over. You have to have everything 
documented and every ``i'' dotted and crossed every ``t''. You 
are correct.
    The Chairman. Absolutely. Any additional questions for this 
panel?
    [No response.]
    The Chairman. Seeing no additional questions from the 
Committee for the panel, I would like to thank you for your 
insights and your expertise. And you are dismissed, gentlemen.
    As they are stepping away from the table and our next group 
of witnesses in panel two are preparing to come forward, I 
would like to introduce them. Mr. David C. Hundley, rice, corn, 
soybean producer, Jonesboro, Arkansas; Mr. Mike Freeze, 
aquaculture producer, Keo Fish Farm, Keo, Arkansas; Mr. Dan 
Stewart, cow/calf producer, Mountain View, Arkansas; Mr. John 
E. Owen, rice, soybean, corn, and cotton producer, John and 
Annie Owen Farms, Rayville, Louisiana; and Mr. Walter Corcoran, 
Jr., cotton, corn, peanut, soybean, grain sorghum, and cow/calf 
producer, Eufaula, Alabama.
    As they are setting up, once again, I thank the previous 
panel for those very thoughtful statements and very insightful 
answers to our questions. That is what this is all about.
    Swing that microphone around towards you there, Mr. 
Hundley, and whenever you are ready, you may begin.

    STATEMENT OF DAVID C. HUNDLEY, RICE, CORN, AND SOYBEAN 
                    PRODUCER, JONESBORO, AR

    Mr. Hundley. Chairman Lucas, Congressman Crawford, and 
other Members of the Committee and guests, my name is David 
Hundley. I am a producer from Bay, Arkansas and I am also the 
general manager for JHM, Inc., a third generation diversified 
agricultural business that includes a cotton gin and a grain 
elevator located in the First District. Thank you for holding 
this hearing at my alma mater, Arkansas State University and in 
the First Congressional District of the great State of 
Arkansas, and for this opportunity to testify before you 
regarding farm policy issues.
    According to a recent study released by the University of 
Arkansas, agriculture is the single largest industry in the 
State of Arkansas, and the First Congressional District is by 
far the most diverse in the state with several different 
diverse crops being produced here, all contributing over $17 
billion of value added to the Arkansas economy. That is 
17 cents of every dollar that is generated in Arkansas of value 
added. The contribution of the agriculture sector as a 
percentage of GDP in Arkansas is greater than in any other 
contiguous state, as well as the average for the Southeast 
region of the United States. The Arkansas agriculture sector, 
as a percentage of GDP is 10.73 percent and Arkansas is in the 
top ten states in the production of ten agricultural 
commodities.
    An economically viable agriculture is essential for the 
United States of America to remain the greatest country in the 
world. The farm bill should be written for the good of the 
country and not for the purpose of garnering votes for re-
election. In my opinion, we need smart policy that meets the 
following criteria:
    The 2012 Farm Bill should recognize the contribution of the 
American farmer and work to preserve the farmer and farm family 
by providing tools to manage risk, access credit, and ensure 
the ability to create and maintain our farming population.
    Farm programs should not favor the production of one 
commodity over another. Farm programs should work for all 
commodities and protect farmers against the unique risks 
associated with each commodity and various methods of 
production, such as irrigated production.
    Farm programs should be fair and available to all producers 
regardless of size, commodity grown, income, or business 
structure. Means testing is not a fair or effective policy. 
Setting such tests would be detrimental to the family farms of 
Arkansas.
    The farm bill should help farmers deal with the myriad 
regulations that they currently face from multiple government 
agencies. Many existing regulations put American producers at a 
disadvantage to their foreign counterparts. On environmental 
issues, farmers are land stewards that should be recognized for 
their efforts to preserve the land for production and 
conservation. Incentives to preserve the land work.
    Congress should recognize that farmers receive very little 
funding when compared to the nutrition components of the farm 
bill. Any increase in funding for nutrition programs should not 
be offset by cutting programs dedicated to American farmers. We 
cannot bite the hand that feeds us.
    Risk management tools should be uniquely tailored for each 
crop. A one-size-fits-all program will not work, especially in 
this region of the country. We need risk management tools for 
protection against all risk including yield loss, price 
declines, and input cost spikes. Without such a safety net, 
lenders will not be willing to risk capital and credit will not 
be available for farmers to operate.
    Today, I am respectfully asking that we lay aside partisan 
politics and engage the great base of knowledge and skills 
possessed by the American farmer to craft a sound farm policy 
that is based on real economic principles. While most farmers 
are supportive of the current farm bill commodity programs, it 
is clear that Congress wants to transition to a new safety net 
risk management approach and away from direct payments, 
regardless of the underlying commodity price. We need a new 
safety net risk management approach. I believe the safety net 
programs, including the direct payment program should be tied 
to actual production costs of in-year production. Safety nets 
should offer less in the good years and more in the lean years. 
It needs to be a program that promotes efficiency to growing 
progressive farmers, while not ignoring small family farms who 
garner that same efficiency by engaging the entire family and 
utilizing off-farm income. We are all American farmers and 
neither should be admonished or admired through class warfare 
more or less than the next.
    In summary, the producers and citizens of Arkansas require 
a strong agriculture industry to provide for their existence 
and to contribute to the strength of American agriculture. I 
believe that the entire country would be better served if the 
base of knowledge and skills of the American farmer were 
engaged in a serious discussion about the best ways to 
construct a new out-of-the-box approach to really sound farm 
policy. Their very existence today versus the opportunities 
that Mother Nature provides on an annual basis is testament to 
our ability to constantly adapt on a minute's notice. The 
greatest threat today remains the monopolization of all the 
industries that we as farmers rely on to purchase our daily 
inputs. These monopolies have the ability to reduce their per 
unit cost while at the same time the general public calls for 
American agriculture to remain small family farmers.
    Mr. Chairman, it has been my honor to be part of this 
discussion and I want to thank you for holding this hearing in 
the First Congressional District of the great State of 
Arkansas.
    [The prepared statement of Mr. Hundley follows:]

    Prepared Statement of David C. Hundley, Rice, Corn, and Soybean 
                        Producer, Jonesboro, AR
    Chairman Lucas, Congressman Crawford, other Members of the 
Committee and guests, my name is David Hundley. I am a producer from 
Bay, Arkansas and I am also the General Manager for JHM, Inc. a third 
generation diversified agricultural business that includes a cotton gin 
and grain elevator located in the First District. Thank you for hosting 
this hearing in the First Congressional District of the Great State of 
Arkansas, and for the opportunity to testify before you regarding farm 
policy issues at my Alma Mater--Arkansas State University.
    According to a recent study released by the University of Arkansas, 
Agriculture is the single largest industry in the State of Arkansas and 
the First Congressional District is by far the most diverse in the 
state with cotton, grain, poultry, catfish, baitfish, livestock, sweet 
potatoes and forest products all contributing over $17 billion of value 
added to the Arkansas economy. That is 17 of every dollar generated in 
Arkansas of value added. Arkansas agriculture provides 275,435 jobs 
which is one in six of all jobs. The contribution of agriculture sector 
as a percentage of GDP in Arkansas is greater than in any contiguous 
state as well as the average for the Southeast region of the United 
States. The Arkansas Agriculture sector as a percentage of GDP is 
10.37%. Arkansas is in the top ten states in the production of ten 
agricultural commodities.
    Arkansas agriculture is responsible for generating jobs in all 20 
industries in the North American Industry Classification System used 
for economic analysis. Employment in the top five NAICS industries 
total 197,599 jobs which accounts for 72% of all jobs in Arkansas being 
generated by agriculture. The value being generated in these top five 
industries total $12,274 Million. I believe it is obvious that 
Agriculture is vital to the Great State of Arkansas as well as the 
United States of America and it is imperative that the integrity this 
industry is preserved with sound Farm Policy as there has never been a 
great nation without a strong and sound agriculture sector.
    An economically viable agriculture is essential for the United 
States of America to remain as the greatest country in the world. In my 
opinion, we need smart policy that meets the following criteria.

    1. The 2012 Farm Bill should recognize the contribution of the 
        American farmer and work to preserve the farmer and farm family 
        by providing tools to manage risk, access credit, and ensure 
        the ability to create and maintain our farming population.

    2. Farm programs should not favor the production of one commodity 
        over another. Farm programs should work for all commodities and 
        protect farmers against the unique risks associated with each 
        commodity and various methods of production, such as irrigated 
        production.

    3. Farm programs should be fair and available to all producers 
        regardless of size, commodity grown, income, or business 
        structure. Means testing is not fair or effective policy. 
        Setting such tests would be detrimental to the family farms in 
        Arkansas.

    4. The farm bill should help farmers deal with the myriad of 
        regulations that they currently face from multiple government 
        agencies. Many existing regulation put American producers at a 
        disadvantage to their foreign counterparts. On environmental 
        issues, farmers are land stewards and should be recognized for 
        their efforts to preserve the land for production and 
        conservation. Incentives to preserve land work.

    5. Congress should recognize that farmers receive very little 
        funding when compared to the Nutrition components of the farm 
        bill. Any increase in funding for nutrition programs should not 
        be offset by cutting programs dedicated to American farmers. We 
        cannot bite the hand that feeds us.

    6. Risk management tools should be uniquely tailored for each crop. 
        A one size fits all program will not work, especially in this 
        region of the country. We need risk management tools for 
        protection against all risks including yield loss, price 
        declines, revenue declines, and input cost spikes. Without such 
        a safety net, lenders will not be willing to risk capital and 
        credit will not be available for farmers to operate.

    America today is made up of largely urban society and these urban 
born, urban raised citizens take their daily food & fiber for granted. 
Most of these same urbanites take the American Agricultural system for 
granted and spend countless dollars fighting to over regulate and 
destroy the same system that sustains their daily existence. While the 
average American spends less of their disposable income than many other 
developed countries on an excellent and ample supply of food they do 
not understand that a 60 pound bushel of wheat that is worth $6 to an 
American Farmer makes approximately 100 loaves of bread which sell for 
an average of $3 per loaf. The American Media's misconception that a $1 
bushel rise in the price of wheat causes bread to increase in price by 
50% cannot be part of the policy process. Can this person be involved 
or effective in creating a sustainable viable agriculture policy? The 
average cost of the newest John Deere cotton harvester is over 
$600,000. A farmer that needs to add an additional harvester should not 
have to navigate a myriad of USDA regulations to justify its existence.
    Today I am respectfully asking that we lay aside partisan politics 
and engage the great base of knowledge and skills possessed by the 
American Farmer to craft a sound Farm Policy that is based on real 
economic principles. While most farmers are supportive of the current 
farm bill commodity programs, it's clear that Congress wants to 
transition to a new safety net risk management approach and away from 
direct payments regardless of the underlying commodity price. I believe 
safety net programs, including the direct payment program should be 
tied to actual production costs and actual in year production. Safety 
nets should offer less in the good years and not limited to an 
arbitrary limit in the lean years. It needs to be a program that 
promotes efficiency to growing progressive producers while not ignoring 
small family farms who garner that same efficiency by engaging the 
entire family and utilizing off farm income. We are all American 
Farmers and neither should be admonished or admired through class 
warfare more or less than the next.
    In summary, the producers and citizens of Arkansas require a strong 
agricultural industry to provide for their existence and to contribute 
to the strength of American Agriculture. I believe that the entire 
country would be better served if the base of knowledge and skills of 
the American Farmer were engaged in a serious discussion about the best 
ways to construct a new out of the box approach to really sound Farm 
Policy. Their very existence today versus the opportunities that Mother 
Nature provides on an annual basis is testament to our ability to 
constantly adapt on a minutes' notice. The greatest threat today 
remains the monopolization of all the industries that we as farmers 
rely on to purchase our daily inputs. These monopolies have the ability 
to reduce their per unit cost while at the same time the general public 
calls for American Agriculture to remain small family farmers.
    Mr. Chairman, It has been my honor to be a part of this discussion 
and I want to thank you for holding this hearing in the First 
Congressional District of the Great State of Arkansas.

    The Chairman. Thank you.
    Mr. Freeze, begin when you are ready, after you swing that 
microphone around--yes.

          STATEMENT OF THOMAS MICHAEL ``MIKE'' FREEZE,
     AQUACULTURE PRODUCER; CO-OWNER, KEO FISH FARM, KEO, AR

    Mr. Freeze. My name is Mike Freeze and I have been an 
Arkansas fish farmer since 1983. I am Co-Owner of Keo Fish 
Farms which has 1,300 acres of ponds in which we produce hybrid 
striped bass and sterile triploid grass carp for live sales 
nationally and internationally.
    I would like to thank Chairman Lucas and my own Congressman 
Rick Crawford and the remaining Members of the House Committee 
on Agriculture for allowing me to address you about national 
issues that impact aquaculture in the United States.
    For aquaculture facilities that ship live product 
nationally, our number one regulatory issue is the Lacey Act. 
Written in 1900 and amended numerous times, including in the 
2008 Farm Bill, the Lacey Act prohibits the international and 
interstate trafficking of illegally obtained wildlife and fish 
or parts thereof. When the Lacey Act was written, aquaculture 
was practically non-existent, yet today our domesticated fish 
are regulated as if they were taken from the wild. Of 
particular concern is that that Lacey Act elevates the 
violation of even misdemeanor state regulations to Federal 
felonies simply because over $350 of domesticated product has 
entered interstate commerce. Penalties for a Lacey Act 
violation begin at $100,000 and 4 months incarceration in a 
Federal penitentiary. This scenario is analogous to a $50 
speeding ticket being elevated to a $100,000 speeding ticket 
simply because you are driving on an interstate highway.
    I am enclosing with my written testimony a copy of a report 
by the National Agricultural Law Center entitled, Aquaculture 
and the Lacey Act, in which author Elizabeth Rumley states, 
``The Act should be amended to exempt domestically produced 
aquatic species.''
    Next, I would like to talk to you about aquaculture's 
reliance upon the services provided by USDA/APHIS Wildlife 
Services and Veterinary Services. Fish-eating birds are 
protected by the Migratory Bird Treaty Act and Wildlife 
Services' verification as to the intensity and degree of bird 
depredation at a particular aquaculture facility is a 
requirement for U.S. Fish & Wildlife Service to issue a Bird 
Depredation Permit to that facility. It would be impossible for 
the private sector to address these depredation issues without 
Wildlife Services' direct involvement.
    Veterinary Services animal health inspection and 
certification allow America's aquaculturists to market their 
live aquatic animals nationally and internationally. Once 
again, it is impossible for the private sector to address such 
health certification issues that are codified in the national 
and international law as requiring a Veterinary Services' 
health certificate.
    I understand in this time of budgetary constraints that 
tough decisions have to be made. But our industry should only 
have to take their proportional share of any funding decreases. 
In the case of Wildlife Services, the entire aquaculture line 
item of $1,063,000 in the Fiscal Year 2013 President's budget 
was deleted at the request of APHIS without any stakeholder 
input.
    As you probably know, imported seafood contributes 
significantly to our national trade deficit and reducing USDA 
support to our industry will only cause this $10 billion 
imbalance to increase.
    Catfish farming and processing is a significant part of the 
American aquaculture industry. The last several years have been 
challenging for catfish producers and processors. Higher input 
costs are impacting the industry and reducing its ability to 
meet demand. According to USDA statistics, catfish processing 
and overall fish inventory are down 35 and 25 percent 
respectively from the previous year. While there are multiple 
insurance products and Federal programs to protect crops and 
livestock from market fluctuations, the catfish industry lacks 
a tool to reduce the risk of volatility caused by rising input 
costs or depressed market values.
    I would urge the Committee to consider instructing the USDA 
Risk Management Agency to include catfish and other food fish 
within the Livestock Gross Margin and Livestock Risk Protection 
insurance programs. These insurance programs allow farmers and 
ranchers to purchase insurance policies to protect against 
price and input cost volatility.
    The 2008 Farm Bill included instructions for the USDA to 
establish a voluntary fee-based inspection and grading program 
for catfish. The USDA catfish inspection rule remains a top 
priority for the catfish industry and the American public. The 
Committee's past and continued support on this issue is greatly 
appreciated.
    USDA has undertaken a thorough process for the 
implementation of this new responsibility. The comment period 
closed on June 24, 2011, and of the 280 comments posted, 84 
percent urged FSIS to include all imported and domesticated 
catfish in the new regulations currently under consideration. A 
broad definition of catfish is imperative to effective 
inspection of catfish and catfish like products. Should USDA 
make the unwise decision of including the more narrow 
definition of catfish, more than 95 percent of all catfish like 
imports will remain uninspected upon entry into the U.S. 
market. Gentlemen, this is not a trade issue, this is a food 
safety issue. And the American public deserves the 
implementation of this rule at the earliest possible date, 
using the broad definition, which includes the three families 
typically consumed as food.
    Additionally, the aquaculture industry has serious concerns 
about FDA's proposed rule that would significantly change 
regulations regarding unapproved drugs found in food products. 
The FDA released this proposed regulation on January 25, that 
would provide a simplified approval process for persons 
requesting the import of food items containing residues of 
animal drugs that are unapproved in the U.S. I believe that 
U.S. consumers should have confidence that food products are 
safe. There is great concern that this proposed rule signals a 
move by the Administration towards allowing drugs to be used by 
foreign producers that are prohibited in the United States. And 
I would strongly urge the Committee to oppose this move by the 
Administration.
    Finally, one issue that impacts all farmers is the closing 
of county FSA offices across the United States according to 
criteria established in the 2008 Farm Bill. While the closing 
of most of these offices is justified, occasionally a county 
office with a moderate to heavy workload meets the closing 
criteria while an adjacent office with a lighter workload does 
not. Recent incentives for FSA employees to retire just prior 
to the determination of which FSA county offices met the 
closing criteria has exacerbated this issue. Therefore, I would 
respectfully ask the Committee to consider enacting emergency 
legislation that would allow each state FSA committee to 
exchange the closing of one county office for another county 
office, as long as the total number of offices closed within 
that state remains the same.
    Thank you, gentlemen.
    [The prepared statement of Mr. Freeze follows:]

   Prepared Statement of Thomas Michael ``Mike'' Freeze, Aquaculture 
               Producer; Co-Owner, Keo Fish Farm, Keo, AR
    My name is Mike Freeze and I have been an Arkansas fish farmer, 
since 1983. I am Co-Owner of Keo Fish Farm along with my business 
partner, Mrs. Martha Melkovitz. Our farm has 1,300 acres of ponds in 
which we produce hybrid striped bass and sterile triploid grass carp 
for live sales nationally and internationally.
    I would like to thank Chairman Lucas, my own Congressman Rick 
Crawford and the remaining Members of the House Committee on 
Agriculture for allowing me to address you about national issues that 
impact aquaculture in the United States.
    For aquaculture facilities that ship live product nationally, our 
number one regulatory issue is the Lacey Act. Written in 1900 and 
amended numerous times, including in the 2008 Farm Bill, the Lacey Act 
prohibits the international and interstate trafficking of illegally 
obtained wildlife and fish or parts thereof. When the Lacey Act was 
written, aquaculture was practically non-existent, yet today our 
domesticated fish are regulated as if they were taken from the wild. Of 
particular concern, is that the Lacey Act elevates the violation of 
even misdemeanor state regulations to Federal felonies simply because 
over $350 of domesticated product has entered interstate commerce. 
Penalties for a Lacey Act felony violation begin at $100,000 and 4 
months incarceration in a Federal penitentiary. Thus, what may be a 
misdemeanor state violation in both of the two states involved, is 
immediately elevated to a Federal felony offense, simply because state 
boundaries were crossed. This scenario is analogous to a $50 speeding 
ticket being elevated to a $100,000 speeding ticket simply because you 
are driving on an interstate highway.
    The U.S. Fish and Wildlife Service is one of the agencies that 
enforce the Lacey Act and their enforcement division has historically 
applied this act to the international and interstate movement of 
private aquacultural products. In part this is because the U.S. Fish 
and Wildlife Service does not recognize the private ownership of 
aquacultural products. In March of 1990, a USFWS enforcement memorandum 
placed a low priority on using the Lacey Act against aquacultural 
producers except in instances where disease transmission or non-
indigenous fish species were involved. Unfortunately, this memorandum 
has long since been forgotten. I am enclosing a copy of a report by the 
National Agricultural Law Center entitled ``Aquaculture and the Lacey 
Act'' in which author, Elizabeth Rumley states: ``The Act should be 
amended to exempt domestically produced aquatic species''.
    Next I would like to inform you about aquaculture's reliance upon 
the services provided by USDA/APHIS Wildlife Services and Veterinary 
Services. Wildlife Service's assistance with wildlife depredation at 
aquaculture facilities is essential because such wildlife are often 
protected by Federal regulations. In the case of avian depredation, 
piscivorous birds are protected by the Migratory Bird Treaty Act and 
Wildlife Services verification as to the intensity and degree of avian 
depredation at a particular aquaculture facility is a requirement for 
the U.S. Fish & Wildlife Service to issue a Bird Depredation Permit to 
that facility. It will be impossible for the private sector to address 
these depredation issues without Wildlife Services' direct involvement.
    Veterinary Services aquatic animal disease inspection and control 
programs are vital to protecting American aquaculture. Veterinary 
Services' international programs and their interactions with OIE member 
nations ensure that our aquacultural products are regulated in a 
scientific manner. Without Veterinary Services essential animal health 
inspections and certifications, America's aquaculturists will not be 
able to market their live aquatic animals nationally and 
internationally. The negative economic impacts from such a loss of 
business may actually cause many aquacultural businesses to fail. Once 
again, it will be impossible for the private sector to address such 
health certification issues that are codified into national and 
international law as requiring a Veterinary Services' health 
certificate.
    Fish farmers have worked for many years with USDA and Congress to 
secure line item aquaculture funding for both of these agencies as only 
these two agencies can provide the essential services listed above. We 
understand that in this time of budgetary constraints that tough 
decisions have to be made, but our industry should only have to take 
their proportional share of any funding decreases. In the case of 
Wildlife Services, the entire aquaculture line item of $1,063,000 in 
the FY 2013 President's Budget was deleted at the request of APHIS, 
without any stakeholder input.
    As you probably know, imported seafood contributes significantly to 
our national trade deficit, and reducing USDA support to our industry 
will only cause this imbalance to increase. Currently, 84% of U.S. 
seafood is imported and the U.S. seafood trade deficit has doubled 
since 1989, reaching $10 billion in 2010. Therefore, I am respectfully 
asking your assistance in restoring aquaculture's line item funding for 
these two agencies back to historic levels.
    Catfish farming and processing is a significant part of the 
American aquaculture industry. The last several years have been 
challenging for catfish producers and processors. Similar to other 
sectors of the livestock industry, catfish producers are faced with 
extraordinarily high feed and energy prices. These higher input costs 
are impacting the industry and reducing its ability to meet demand. 
According to USDA statistics, catfish processing and overall fish 
inventory are down 35 and 25 percent respectively, from the previous 
year's reporting. While there are multiple insurance products and 
Federal programs to protect crops and livestock from market 
fluctuations, the catfish industry lacks a tool to reduce the risk of 
volatility caused by rising input costs or depressed market values.
    I would urge the Committee to consider instructing the USDA Risk 
Management Agency (RMA) to include catfish and other food fish within 
both the Livestock Gross Margin (LGM) and Livestock Risk Protection 
(LRP) insurance programs. These insurance programs allow farmers and 
ranchers to purchase insurance policies to protect against price and 
input cost volatility. Catfish and other food fish farmers would 
benefit from access to these existing insurance products, allowing them 
to purchase a product to protect against unexpected increases in feed 
costs or drops in market pricing.
    In addition, ``The Food, Conservation and Energy Act of 2008'' 
included instructions for the USDA to establish a voluntary fee based 
inspection and grading program for catfish. The USDA catfish inspection 
rule remains a top priority for the catfish industry and the American 
public. The Committee's past and continued support on this issue is 
greatly appreciated. According to Import Refusal data and also FDA 
Import Alerts, certain drugs and chemicals have been found in catfish 
imported from China, Thailand and Vietnam and have resulted in the 
following import refusals for Fiscal Year 2010:

------------------------------------------------------------------------
               Country                   Refusals for Fiscal Year 2010
------------------------------------------------------------------------
                  China                                    22
               Thailand                                     4
                Vietnam                                    30
------------------------------------------------------------------------

    USDA has undertaken a thorough process for the implementation of 
this new responsibility, including extensive public comment. The 
comment period closed on June 24, 2011, and of the 280 comments posted 
on the USDA's Food Safety and Inspection Service (FSIS) official 
comment site, 84 percent, or 234 postings, urged the agency to include 
all imported and domestic catfish in new regulations currently under 
consideration by FSIS. The proposed rule offers two options for the 
definition of catfish and seeks public comment. One option is to define 
``catfish'' as including all species in the order Siluriformes, with 
the three families typically consumed as food, including Ictaluridae, 
Pangasius and Clariidae. A broad definition of catfish is imperative to 
effective inspection of catfish and catfish-like products. Should USDA 
make the unwise decision of including the more narrow definition of 
catfish, more than 95% of all catfish-like imports will remain 
uninspected upon entry into the U.S. market. This is not a trade issue, 
this is a food safety issue and the American public deserves the 
implementation of this rule at the earliest possible date, using the 
broad definition, which includes the three taxonomic families of fish 
that are typically consumed as food.
    Additionally, the aquaculture industry has serious concerns about 
FDA's proposed rule that would significantly change regulations 
regarding unapproved drugs found in imported food. The FDA released a 
proposed regulation on January 25th that would provide a simplified 
approval process for persons requesting the import of food items 
containing residues of animal drugs that are unapproved in the U.S. The 
industry agrees with the FDA's advisory committee, the Veterinary 
Medicine Advisory Committee, that any drugs used to treat animals that 
Americans will consume should be based on food safety protections 
currently employed by FDA to regulate drugs used by U.S. farmers. I 
believe that U.S. consumers should be confident that the foods they eat 
are safe. There is great concern that this proposed rule signals a move 
by the Administration towards allowing drugs to be used by foreign 
producers that are prohibited in the United States. I would strongly 
urge the Committee to oppose this move by the Administration.
    Finally, one issue that impacts all farmers is the closing of 
county FSA offices across the United States according to criteria 
established in the 2008 Farm Bill. While the closing of most of these 
offices is justified, occasionally a county office with a moderate to 
heavy work load meets the closing criteria, while an adjacent office 
with a lighter work load does not. Recent incentives for FSA employees 
to retire just prior to the determination of which FSA county offices 
met the closing criteria has exacerbated this issue. Therefore, I would 
respectfully ask that the Committee consider enacting emergency 
legislation that would allow each State FSA Committee to exchange the 
closing of one county office for another county office as long as the 
total number of offices closed within that state remains the same.
                               Attachment
National Agricultural Law Center, University of Arkansas
An Agricultural Law Research Project
Aquaculture and the Lacey Act
by
Elizabeth R. Springsteen
March, 2010
www.NationalAgLawCenter.org
A National AgLaw Center Research Publication
Aquaculture and the Lacey Act
Elizabeth R. Springsteen
Staff Attorney
National Agricultural Law Center
    Aquaculture includes the cultivation of aquatic species for human 
consumption as well as for recreational or ornamental purposes. The 
practice has a long history, tracing back through ancient Chinese 
records indicating that carp was raised more than 4,000 years ago and 
hieroglyphics in the tombs of the Pharaohs describing tilapia farming 
in ancient Egypt. However, fish culture in the U.S. has a much more 
limited history, beginning in the mid 1800s when Federal and state 
hatcheries were built to raise sportfish species to stock public and 
private waters. Attempts to commercialize aquaculture for food purposes 
did not begin until the 1950s, with channel catfish farming in the 
Mississippi Delta region. From those small beginnings it has become an 
extensive industry, bringing in yearly nationwide revenue of $1.5 
billion, according to the 2007 Census of Agriculture.
    The practice of aquaculture is regulated at various levels of 
government, with state and local authorities generally regulating 
activities and issuing permits dealing with zoning, building, land and 
water use, waste discharge, and aquaculture production practices and 
species. Not surprisingly, each state's division of regulatory 
responsibility and authority among their agencies or offices, as well 
as the resulting regulations themselves, are all very different. They 
have each been influenced by unique state socioeconomic histories and 
the ecological differences between states. As a result, state 
aquaculture regulation is a bewildering mosaic of species regulations, 
with little to no consistency between geographic locations.
    At the Federal level, agencies responsible for different areas of 
regulation include the FDA, USDA, EPA, Fish and Wildlife Service 
(``FWS''), Army Corps of Engineers and National Oceanic & Atmospheric 
Administration (``NOAA'').
History and Provisions of the Lacey Act
    One major statute with the potential to severely affect aquaculture 
is the Lacey Act, 18 U.S.C.  41-48, a Federal statute passed in 1900 
to protect wildlife. It was originally intended to combat hunting to 
supply commercial markets, the interstate shipment of unlawfully killed 
game, the killing of birds for the feather trade and the introduction 
of harmful invasive species. The Lacey Act applies to all ``wild'' 
animals, specifically including fish and amphibians, even when those 
animals have been ``bred, hatched, or born in captivity.'' It is 
unlawful to ``import, export, transport, sell, receive, acquire or 
purchase'' any fish or wildlife ``taken, possessed, transported, or 
sold'' in violation of laws or regulations (state, Federal or foreign) 
that are fish or wildlife related. In 2008, plants were added to the 
scope of the Act.
    One of the ways in which the Lacey Act can be triggered is by the 
violation of a Federal regulation. If this happens, the offender can be 
prosecuted under the Lacey Act even if no interstate shipment takes 
place. For example, the Endangered Species Act is a Federal statute 
that protects certain species. If an individual ``transport[s], 
sell[s], receive[s], acquire[s], or purchase[s]'' a creature that has 
been ``taken, possessed, transported, or sold'' in violation of that 
law, that person may be prosecuted under either the Endangered Species 
Act or the Lacey Act--even if they do not cross a state line.
    However, the Lacey Act is also triggered when a state or Federal 
law regarding fish or wildlife is violated by a product that has been 
part of interstate commerce. Each state has its own protected, 
prohibited, restricted or approved exotic or game species lists, 
established by a state department of natural resources, fish and game, 
environmental protection or agriculture, and the creatures on the list 
can vary widely from one state to the next. For an example in this 
situation, consider Minnesota. As of this writing, in Minnesota it is 
illegal to transport ``prohibited invasive species'' on a public road, 
and violation subjects the offender to a $250 civil penalty or a 
misdemeanor (up to 90 days and/or $1,000). As a result, a company based 
in Minnesota who transports one of these species to another part of the 
state may only be prosecuted under the state law. A company based in 
another state who transports one of these species on a Minnesota road, 
however, may be prosecuted under the Lacey Act. This is important, 
especially considering the disparity between the state and Lacey Act 
penalties.
Lacey Act Penalties
    Penalties for violating the Lacey Act are severe. If an individual 
``knew'' or ``was generally aware of'' the illegal nature of the 
wildlife and the value of the wildlife was over $350, he may be 
prosecuted and convicted under the Act's felony provisions. If that 
happens, the penalty is up to 5 years in prison and/or a $250,000 fine 
($500,000 in the case of an ``organization,'' including a business).
    Misdemeanor prosecution may occur in two situations. The first is 
if the defendant takes/possesses/transports/sells the prohibited 
wildlife ``without exercising due care.'' ``Due care'' means ``that 
degree of care which a reasonably prudent person would exercise under 
the same or similar circumstances. As a result, it is applied 
differently to different categories of persons with varying degrees of 
knowledge and responsibility'' (Senate Report 97-123). Generally, due 
care requires the judge to ask him or herself if the defendant, when 
trying to follow the law, applied as much thought, planning and 
prevention as would a normal, reasonable person in their situation. 
It's important to remember that, as stated above, the amount of ``due 
care'' a person must show changes depending on their knowledge and 
responsibility level. As a result, an aquacultural producer 
transporting their products across state lines will probably be held to 
a higher standard of care than a child who is transporting his pet 
goldfish during a cross-country move.
    The second way in which a misdemeanor may be prosecuted under the 
Lacey Act is if the defendant knew about the illegal nature but the 
value of the wildlife was less than $350. It's important to note, 
however that prosecutors may aggregate, or combine, violations for 
charging purposes. Combining the violations can increase the value of 
the wildlife, and potentially elevate the offense from misdemeanor to 
felony status. Misdemeanor penalties are up to a year in prison and/or 
$100,000 fine ($200,000 for organizations).
    Further, false labeling of wildlife transported in interstate 
commerce is also criminalized, regardless of intent. If the products 
have a market value of less than $350, false labeling is a 1 year/
$100,000 misdemeanor, but if the value is greater than $350, the 
offender may be charged with another 5 year/$250,000 felony.
Federal Enforcement of the Lacey Act
    Federal enforcement of the Lacey Act is triggered in two 
situations. First, it is triggered when Federal law is violated, even 
if no interstate commerce takes place. For example, if an individual 
possesses a creature that is illegal to possess under Federal law, the 
Lacey Act may be enforced. Second, it is triggered when a state law 
regarding fish or wildlife is violated by a product that has been part 
of interstate commerce. Each state has its own protected, prohibited, 
restricted or approved exotic or game species lists, established by a 
state department of natural resources, fish and game, environmental 
protection or agriculture, and the creatures on the list can vary 
widely from one state to the next. For an example in this situation, 
consider Minnesota. In Minnesota it is illegal to transport 
``prohibited invasive species'' on a public road, and violation 
subjects the offender to a $250 civil penalty or a misdemeanor (up to 
90 days and/or $1,000). As a result, a company based in Minnesota who 
transports one of these species to another part of the state may be 
prosecuted under the state law. A company based in another state who 
transports one of these species on a Minnesota road may be prosecuted 
under the Lacey Act.
    How does this affect aquaculture? Imagine that a single fish (or 
even fish egg)--legal to possess in Wisconsin--is inadvertently loaded 
with a 2,000 lb. truckload of other fish that had been sold to an 
aquaculture producer in Minnesota. This single fish is on the Minnesota 
prohibited list. Once the truck crosses the state line, it is stopped 
by the Minnesota DNR, searched, and the prohibited fish is found. Both 
the Wisconsin seller and the Minnesota buyer may be prosecuted under 
the Lacey Act, and what would have been a maximum penalty of 90 days 
and/or $1,000 from the state of Minnesota has now turned into a 
potential year in Federal prison and up to a $100,000 fine. Moreover, 
the seller may also be charged with false labeling (for failing to 
include the prohibited fish in the list of the shipment's contents), 
adding up to another 5 years and/or $250,000 to the sentence.
Minimizing Risk
    The risks associated with the Lacey Act can, of course, be 
minimized by only shipping products in-state. However, this is not a 
reasonable or feasible option for many producers. For those producers 
involved in interstate shipment of aquacultural products, the only 
advice that may be helpful is to check, doublecheck and document every 
step taken to ensure that regulated species are not transported, 
because your freedom and livelihood might depend on convincing a judge 
or jury that you exercised due care in trying to prevent it. 
Aquaculturists can access the Injurious Species List, as authorized by 
the Lacey Act, by visiting http://www.fws.gov/fisheries/ans/
ANSInjurious.cfm. The National Agricultural Library is working on a 
nationwide compilation of information describing species that are 
regulated by the states, and it is located at http://
www.invasivespeciesinfo.gov/laws/statelaws.shtml. This compilation is 
still a work in progress, so aquacultural producers should still check 
with the Aquaculture Coordinator in the destination state or their 
state for regulated species information. Visit http://www.nasac.net/ 
for Coordinator contact information.
    For more information on the legal aspects involved in aquaculture 
operations, please visit the National Agricultural Law Center's 
``Aquaculture'' reading room, located at http://
www.nationalaglawcenter.org/readingrooms/aquaculture/.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



Example 1
    Question: Producer A sells an unlabeled load of diploid black carp 
    to Producer B. Diploid black carp may be possessed in Arkansas. 
    However, it is on the Federal invasive species list, so it may not 
    be transported across state lines.
Charges
    Against A: Trafficking
    Against B: Trafficking
Example 2
    Question: Producer A sells a load of catfish to Producer B, but it 
    is labeled ``whitefish.''
Charges
    Against A: False Labeling
    Against B: None
Example 3
    Question: Producer A sells a load labeled ``catfish'' to Producer 
    B, and a black carp is included in the shipment.
Charges
    Against A: False Labeling & Trafficking
    Against B: Trafficking
Example 4
    Question: Producer A sells a load labeled ``catfish'' to Trucker in 
    AR. A black carp is included in the shipment. Trucker drives the 
    shipment to AL, and sells it to Producer B.
Charges
    Against A: False Labeling
    Against B: Trafficking
    Against Trucker: Trafficking
Example 5
    Question: Producer A sells a load labeled ``fishfish'' to Producer 
    C. Possession of ``fishfish'' is legal is AR and WI, but illegal in 
    IL, where Trucker is pulled over.

    Charges: No Lacey Act violation, as long as the load was correctly 
    labeled. Trafficking provisions do not apply to interstate shipment 
    if the shipment is en route to a state in which the fish or 
    wildlife or plant may be legally possessed.

    The Chairman. Thank you.
    Mr. Stewart, whenever you are ready.

 STATEMENT OF DAN STEWART, COW/CALF PRODUCER, MOUNTAIN VIEW, AR

    Mr. Stewart. I would like to thank the Committee for this 
opportunity to speak at the hearing today.
    My name is Dan Stewart. I have been a member of the 
Arkansas Cattlemen Association for over 20 years, and have 
served on their board. I am the current President of the Stone 
County Cattlemen and served in that office several times. I am 
a long time member of the Farm Bureau, and served on the Board 
of Directors of the Arkansas Limousin Organization. I live up 
in the hills of Stone County, Arkansas on a farm my family has 
worked and owned for over 100 years and there has always been 
cattle raised on that farm for as long as I can remember.
    One of my first memories is my grandpa sitting me up on the 
back of his big old Hereford bull. I tried that later as a 
teenager at a rodeo with a whole lot less success. I try my 
best to help my grandson to have the good memories of growing 
up on a farm and to know the responsibilities and work that 
comes with helping produce the food for our country and the 
world. I borrowed money and bought my first herd of cattle at 
the age of 16.
    Compared to many others our operation is small, but when I 
looked at the demographics I guess I am pretty much what you 
could call the average cattle producer. The average age of a 
farmer is 57 years old and the majority by far of the cattle 
producers have 100 or less head of cattle in their herd. I feel 
small farms and ranches are the heart and soul of our 
communities and have a far greater value to our country than 
just the quantity of animals that they produce.
    Most producers I know pretty much have a no-nonsense 
attitude when it comes to their cattle operations. If something 
works, they keep it. If it does not, they will try something 
else. If it ain't broke, don't fix it. So my suggestions to you 
are fairly simple.
    First of all, we need easy access to the programs that the 
government offers. It can be a real burden to drive long 
distances to apply for programs or to sign papers. The road 
systems in our part of the state are not always straight and 
smooth. It is more than just the distance as the crow flies. 
Not everyone has a computer or affordable access to the 
Internet.
    One of the programs that I take very personally is the 
disaster assistance programs. A little over 4 years ago, one of 
the longest track tornadoes on record started at Atkins, 
Arkansas and left a continuous path of destruction nearly to 
the Missouri state line, well over 100 miles long. The track of 
this tornado went from one end of my farm to the other, 
destroying all my fences, barns, and damaging and nearly 
destroying our home. The very next morning, the CED from our 
Farm Service Agency was out checking on the broken farms in his 
area. That is why we need local offices staffed with people 
that know the farmers and the land in their communities. The 
counties that were affected by this storm were declared a 
disaster area and we received financial assistance to reimburse 
us for some of our expenses in rebuilding. Without that help, I 
am not sure what we would have done.
    Another thing I feel is important to cattlemen is the 
conservation programs that help us preserve and protect our 
natural resources. This is even more important with the 
increasing concerns from the EPA and other environmental 
agencies.
    As a cattle producer and a user of feed, I am against any 
subsidies for ethanol. I think these subsidies have 
artificially raised corn prices to the point that it has really 
affected the livestock industry. Ethanol should stand on its 
own.
    I would like to see our marketing system kept as free as 
possible, but guard against anyone taking undue advantage of 
that system.
    To sum this all up, basically what I am saying is when we 
are affected by natural disasters and forces beyond our 
control, be there with the tools and the help we need to get 
back to the point that we can continue to be productive. Give 
us the guidance and assistance we need to protect our soil and 
water, the most valuable resources that we have. Keep rules and 
regulations to a minimum, but when there are mandates and rules 
that prevent the use of our land or the ability to produce an 
income from it, we should be properly compensated.
    Let us continue to do the job that we should be doing, and 
that is to produce the safest, most wholesome, and abundant 
food supply in the world.
    Thanks again for this opportunity.
    [The prepared statement of Mr. Stewart follows:]

Prepared Statement of Dan Stewart, Cow/Calf Producer, Mountain View, AR
    First of all I would like to thank the Committee for this 
opportunity to speak at this hearing today.
    My name is Dan Stewart and I've been a member of the Arkansas 
Cattlemen Association for over 20 years, and have served as a State 
Board Representative. I am the current President of the Stone County 
Cattlemen and served in that office several times, I'm a long time 
member of Farm Bureau, and served on the Board of Directors of the 
Arkansas Limousin Organization. I live up in the hills of Stone County 
Arkansas on a farm my family has worked and owned for over 100 years, 
and there has been cattle raised on this farm for as long as I can 
remember.
    One of my first memories is of my grandpa sitting me upon the back 
is his big old Hereford bull. (I tried that later as a teenager at a 
rodeo with a lot less success.) I try my best to help my grandson to 
have good memories of growing up on a farm and to know the 
responsibility, and work that comes with helping produce the food for 
our country and the world. I borrowed money and bought my first herd of 
cattle at the age of 16.
    Compared to many others our operation is small and I wondered why I 
was invited here to speak today, but when I looked at the demographics 
I guess I'm pretty much what you'd call the average cattle producer. 
The average age of a farmer is 57 years old and the majority by far of 
cattle producers have 100 or less head of cattle in their herd. I feel 
that small farms and ranches are the heart and soul of our communities 
and have a value to our country far greater than just the quantity of 
animals that they produce.
    Most producers I know pretty much have a no nonsense attitude when 
it comes to their cattle operation. If something works they keep it, 
and if it doesn't they try something else, if it ain't broke don't fix 
it, so my suggestions to you are fairly simple.
    First of all we need easy access to the programs that the 
government offers. It can be a real burden to drive long distances to 
apply for programs or sign papers. The road system in our part of the 
state is not always straight and smooth. It's more than just distance. 
Not everyone has a computer or affordable access to the Internet.
    One of the programs I take very personally is disaster assistance. 
A little over 4 years ago one of the longest track tornadoes on record, 
started at Atkins, Arkansas and left a continuous path of destruction 
nearly to the Missouri state line, well over 100 miles long. The track 
of this tornado went from one end of my farm to the other, destroying 
all my fences, barns, and damaging and nearly destroying our home. The 
very next morning the CED from our Farm Service Agency was out checking 
on the broken farms in his area. That's why we need local offices 
staffed with people that know the farmers and the land in their 
community. The counties that were affected by the storm were declared a 
disaster area and we received financial assistance to reimburse us for 
some of our expenses in rebuilding, without that help, I'm not sure 
what we would have done.
    Another thing I feel is important to cattlemen is the conservation 
programs that help us preserve and protect our natural resources. This 
is even more important with the increasing concerns from the EPA and 
other environmental agencies.
    As a cattle producer and a user of feed I am against any subsidies 
for ethanol. I think these subsidies have artificially raised corn 
prices to the point it has really affected the livestock industry. 
Ethanol should stand on its own.
    I would like to see our marketing system kept as free as possible, 
but guarded against anyone taking undo advantage of that system.
    To sum this all up basically what I'm saying is, when we are 
affected by natural disasters and forces beyond our control, be there 
with tools and the help we need to get back to the point we can 
continue to be productive. Give us the guidance and assistance we need 
to protect our soil and water, the most valuable resources we have. 
Keep rules and regulations to a minimum, but when there are mandates 
and rules that prevent the use of our land or the ability to produce an 
income from it we should be properly compensated.
    Let us continue to do the job we should be doing, that is to 
produce the safest, most wholesome, and abundant food supply in the 
world.
            Thank you again for this opportunity,

Dan Stewart.

    The Chairman. Thank you.
    Mr. Owen, again, when you are ready, sir.

  STATEMENT OF JOHN E. OWEN, RICE, SOYBEAN, CORN, AND COTTON 
       PRODUCER, JOHN AND ANNIE OWEN FARMS, RAYVILLE, LA

    Mr. Owen. Chairman Lucas, Members of the Committee, thank 
you for holding this hearing. I appreciate the opportunity to 
offer testimony on the 2012 Farm Bill. My name is John Owen and 
I raise rice, corn, soybeans, and cotton in northeast Louisiana 
where my wife Anne and I have been farming together for 30 
years. I also serve as President of the Louisiana Rice Growers 
Association and on several boards of the USA Rice Federation.
    America's farmers can be proud of what we do. We have 
helped carry our nation through not one, but two economic 
recessions in the past 12 years. We have reduced our country's 
trade deficit, we have ensured that Americans spend less of 
their disposable income on food than anyone else in the world. 
We contribute to national security by producing our own food 
and fiber here at home and by feeding and clothing much of the 
world. And I firmly believe that the U.S. farm policy that we 
will discuss here today, a policy that costs a fraction of one 
percent of the entire Federal budget, is essential to 
continuing our success.
    In short, U.S. agriculture is important to America and farm 
policy is important to U.S. agriculture.
    Mr. Chairman, I have to admit I do not have a great deal of 
confidence in Washington these days. But I must say that you 
and your Ranking Member, Mr. Peterson, and your counterparts in 
the Senate demonstrated last year that not everything in that 
town is broken.
    When my wife and I were talking about my testimony for this 
hearing and the kind of farm bill we would write this year 
under the kind of constraints that you were facing last year, 
we finally added it all up and concluded that it would look a 
whole lot like what you and Mr. Peterson developed last fall. 
All the key elements were there.
    You started off by acknowledging that what works for the 
farmers that you heard from last week in Illinois may not work 
for Anne and me in Louisiana. We have different crops, a 
different region and different risks. So importantly, you did 
not try to shove us all into some neat policy box that looks 
great in Washington, but falls apart on the farm. I really 
thank you for that.
    Another thing you did was to make sure that farmers were 
not sold a bill of goods. Out of all the options that a 
producer could choose from in the 2011 bill that you put 
together, there was protection built into each of them to make 
sure that if prices fell through the floor, there would not be 
a crisis in farm country because a producer was allowed to pick 
a false choice.
    I have seen a lot of revenue proposals out there, and 
nearly all of them do not have any price protection in them. If 
prices collapse, the revenue the producer is guaranteed 
collapses right along with it. I do not think all the producers 
realize this across the country. But I am relieved that you 
foresaw the problem and did something to prevent it.
    On top of these extremely important things, both producer 
choice and price protection, you also worked to improve crop 
insurance, including nudging the USDA along to quickly develop 
some risk management products that might hold out some hope for 
rice producers, who have not had great success with crop 
insurance in the past. And you also decided to let the ink dry 
on payment limits and AGI rules that were written just 2 years 
ago. Every one of these things is important to Anne and my 
farm.
    But I want to say one other thing. I know you took a lot of 
unfair flack for defending the rice provisions of the 2011 
bill. Your standing up for us does not go unnoticed in rice 
country. We greatly appreciate that you recognized that all we 
came to the table with was the direct payment, and that was 
going to be gone. So you worked with us to give us a decent 
alternative that we can still take to our banker and get a 
loan.
    In my 30 years in production agriculture, I have watched 
farm policy evolve through five farm bills. The best 
legislation built on previous farm policy and made adjustments 
that were improvements and updates, but not radical shifts in 
policy. I urge you to keep this in mind as you move forward 
drafting our next farm bill.
    The bottom line is, I believe--and maybe more importantly 
my banker believes--the 2011 package that you put together 
serves as an excellent framework for you to develop the 2012 
Farm Bill.
    Thank you for allowing me this time to testify.
    [The prepared statement of Mr. Owen follows:]

  Prepared Statement of John E. Owen, Rice, Soybean, Corn, and Cotton 
           Producer, John and Annie Owen Farms, Rayville, LA
Introduction
    Chairman Lucas, Ranking Member Peterson, and Members of the 
Committee, thank you for holding this hearing concerning farm policy 
and the 2012 Farm Bill. I appreciate the opportunity to offer testimony 
on farm policy from the perspective of a diversified producer.
    My name is John Owen. I raise rice, soybeans, corn, and cotton in 
Richland Parish in northeastern Louisiana and I have been farming in 
partnership with my wife Anne for thirty years. In addition, I serve as 
President of the Louisiana Rice Growers Association and on several 
boards and committees of the USA Rice Federation, including the USA 
Rice Producers' Group.
Importance of Agriculture and Cost-Effective Farm Policy
    The U.S. agriculture sector should be proud of our contributions to 
the U.S. economy. In a time of economic downturn, agriculture producers 
have managed to remain profitable, create new jobs, and provide 
consumers in the U.S. and all over the world with a safe and abundant 
supply of food and fiber.
    While U.S. agriculture is critically important to America, farm 
policy is also critically important to U.S. agriculture.
    I would urge lawmakers to reject cuts to U.S. farm policy that 
would exceed the level specified in the letter by the House and Senate 
Agriculture Committee Chairs and Ranking Members to the Joint Committee 
on Deficit Reduction last fall. I am concerned that an attempt to write 
a farm bill with budget reductions greater than the $23 billion 
proposed last year will result in farm policy that is inadequate to 
meet the risk management needs of producers.
2008 Farm Bill Review
    The 2008 Farm Bill continued the traditional mix of policies 
consisting of the non-recourse marketing loan, loan deficiency 
payments, and the direct and counter cyclical payments. This past farm 
bill made substantial changes to the payment eligibility provisions, 
establishing an aggressive adjusted gross income (AGI) means test and 
significant tightening of ``actively engaged'' requirements for 
eligibility. The 2008 Farm Bill also included the addition of Average 
Crop Revenue Election (ACRE) as an alternative to counter cyclical 
payments for producers who agree to a reduction in direct payments and 
marketing loan benefits. The bill also added Supplemental Revenue 
Assurance (SURE) as a standing disaster assistance supplement to 
Federal crop insurance.
    To be honest, neither ACRE or SURE has proved much value for the 
crops I grow on my farm. With some changes, a revenue-based policy may 
be workable for some crops in some growing regions. But for crops that 
I produce, I haven't seen a revenue-based proposal yet that would be 
effective in the Mid-South. And particularly as it relates to rice 
production in my part of the country, forcing me to depend on a revenue 
policy for risk management will leave me with little to no price 
protection, which is the main risk I face in rice. SURE has provided 
little, if any, assistance to producers in the Mid-South who suffered 
significant monetary losses in 2009 due to heavy rains and flooding 
occurring prior to and during harvest, or the significant losses last 
year as a result of spring flooding in the Mid-South. SURE's inability 
to provide disaster assistance for such catastrophic events further 
highlights the continuing gap in available policies designed to help 
producers manage or alleviate their risk.
    Whatever its imperfections, the Direct Payment alone has assisted 
producers in meeting the ongoing and serious price and production 
perils of farming today. Direct payments have provided critically 
important capital to farmers that they could tailor to their unique 
needs. This capital was used to help finance production costs, cover 
shallow losses, and purchase crop insurance or to make capital 
improvements to farming operations. While other options to direct 
payments are being considered, we believe it will be very difficult to 
improve upon their effectiveness.
    I believe we must focus on strengthening farm policies in the 2012 
Farm Bill to help ensure that all producers have the ability to 
adequately manage their risks and access needed credit.
Crop Insurance
    Crops grown in the Mid-South have traditionally been under-served 
by crop insurance. As a result, we have on average lower coverage 
levels and higher premium costs for most of our crops. This situation 
has been improving in recent years, but we are still far from the day 
when I as a Mid-South producer can say that crop insurance is the most 
important part of farm policy for me. In fact, I think it is 
inappropriate to believe that crop insurance can ever be the sole 
policy producers rely on for risk management. Crop insurance is 
designed to cover production shortfalls or price declines in a single 
year. It is not designed to protect against price declines over 
multiple years. And I find myself asking the question, and let me be 
clear I hope we don't see this happen, but if crop prices decline again 
in a scenario like we saw in the late 1990's how effective is crop 
insurance going to be then? If corn prices are $2.50/bushel and soybean 
prices are $5.00/bushel it is clear that a crop insurance revenue 
policy is not going to be of much help to me as a producer with prices 
at these levels.
    From a rice grower's perspective I have additional concerns about 
crop insurance. The risk management products offered under Federal Crop 
Insurance have been of very limited value due to a number of factors, 
including artificially depressed actual production history (APH) 
guarantees, which I understand is also a problem for many other 
producers; high premium costs for a relatively small insurance 
guarantee; a lack of convergence between the cash and futures prices 
for rice; and the fact that the risks associated with rice production 
are unique from the risks of producing many other major crops.
    What rice farmers like I need from Federal crop insurance are 
products that will help protect against increased production and input 
costs, particularly for energy and energy-related inputs. For example, 
fuel, fertilizer, and other energy related inputs represent about 70 
percent of total variable costs.
    As such, rice producers enter the 2012 Farm Bill debate at a very 
serious disadvantage, having only a single farm policy that effectively 
works and that farm policy being singled out for elimination.
Commodity Futures Market
    Another risk management tool that is becoming more important for me 
as a producer is the use of the commodity futures market to hedge my 
price risks for the crops I produce. As we see the coming changes in 
the farm bill, I think the ability to effectively use the futures 
market to price and market our crops will become imperative. Today I 
have the ability to hedge the corn and soybeans I produce, but with 
rice I am limited in the opportunity to hedge the crop due to issues 
with the rice futures contract. The contract has suffered from a lack 
of convergence between cash prices and the futures prices, and in some 
cases there has been a negative basis as wide as $4/cwt. For the other 
crops I produce, I am able to hedge my prices successfully, but for the 
rice we grow, I am unable to do so.
2012 Farm Bill
    First and foremost, I believe that the 2012 Farm Bill should be 
reauthorized this year.
    I know that due to budget restrictions, it will be necessary to 
write the upcoming farm bill with fewer resources than have been 
available in the past. Furthermore, some farm policies must be modified 
to satisfy specific trade objectives as a result of the U.S.-Brazil WTO 
case. The continuation of a multi-legged stool that includes the 
marketing loan, countercyclical payments and the best mix of risk 
management tools for producers.
    I believe that the planting flexibility provided under the 1996 
Farm Bill and the countercyclical policies that have been in place for 
more than a decade now have served this nation and its farmers well. In 
addition, the non-recourse marketing loan still serves an important 
function by allowing producers the ability to utilize the loan for the 
marketing of their crops. This is particularly important in both the 
rice and cotton industries.
    Given the aforementioned budget pressures and other considerations 
facing Congress, I believe that the following priorities represent the 
needs of producers in crops here in the Mid-South:

   First, the triggering mechanism for assistance should be 
        updated to provide tailored and reliable help should commodity 
        prices decline below today's production costs, and should 
        include a floor or reference price to protect in multi-year low 
        price scenarios.

   Second, as payments would only be made in loss situations, 
        payment limits and means tests for producers should be 
        eliminated, or at a minimum not tightened any further.

   Third, Federal crop insurance should be improved to provide 
        more effective risk management for all crops in all production 
        regions, beginning with the policy development process.
Price Protection is Key
    I believe the main purpose of farm policy is to provide protection 
in the event of price declines, which are beyond the control of 
producers. As noted earlier crop insurance can't provide this 
protection across multiple years, and only protects against price 
declines within a growing season. My understanding of the farm bill 
package developed last fall by this Committee and your counterparts in 
the Senate is that it included reference prices at levels more relevant 
to today's cost of production and this reference price would provide a 
floor for both a price-based option and a revenue-based option. I think 
this is the most critical component of the next farm bill and must be 
included in any policy option.
    To use rice for an example, price volatility is the primary risk 
producers face that they do not have other good means of protecting 
against, with price fluctuations largely driven by global supply and 
demand. Rice is one of the most protected and sensitive global 
commodities in trade negotiations, thus limiting access to a number of 
key markets. Costs of production have risen to a point where the 
current $6.50 (loan rate)/$10.50 (target price) assistance triggers are 
largely irrelevant. So I believe the first priority should be to 
concentrate on increasing the prices or revenue levels at which farm 
policy would trigger so that it is actually meaningful to producers, 
and would reliably trigger should prices decline sharply.
    The reference price for rice should be increased to $13.98/cwt 
($6.30/bu). This level would more closely reflect the significant 
increases in production costs for rice on our farm. And this reference 
price should be a component of both the price-loss policy and the 
revenue-loss policy to ensure downside price protection.
Options for Different Production Regions
    Another important concept that I believe should be reflected in the 
next farm bill is producer choices or options. It is easy to see that 
not only are there significant differences in the policy needs of 
various crops, but there are different risk management needs for the 
same crop in different growing regions.
    Whether it is the rice or corn on my farm in northeast Louisiana, I 
have a different view of what policy will work best on my farm relative 
to corn in Iowa or rice in California. Again, using rice as an example, 
here in the Mid-South and the Gulf Coast production regions, a price-
based policy is viewed as being most effective in meeting our risk 
management needs. Specifically, this policy should include a price 
protection level that is more relevant to current cost of production; 
paid on planted acres or percentage of planted acres; paid on more 
current yields; and take into account the lack of effective crop 
insurance policies for commodities like rice.
    However, my friends producing rice in California have analyzed the 
potential for a revenue-based policy that could work better in their 
area to provide effective risk management. Efforts to analyze 
modifications which will increase the effectiveness of revenue plan 
continue. Since rice yields are highly correlated between the farm, 
county, crop reporting district, and state levels, a revenue plan 
should be administered for rice at either the county or crop reporting 
district level to reflect this situation rather than lowering guarantee 
levels to use farm level yields. By setting loss triggers that reflect 
local marketing conditions, delivering support sooner, and 
strengthening revenue guarantees that account for higher production 
costs as well as the absence of effective crop insurance, California 
rice producers are hopeful that an effective revenue option can be 
developed.
    Different perils confront producers of different crops. Producers 
need a choice, just as producers were also allowed choices in the 2008 
Farm Bill. A necessary part of providing a real choice is to ensure 
that each option, revenue-based or priced-based, provides effective 
protection in the event of price declines, particularly in multiyear 
low price scenarios.
Tailored and Defendable Policy
    I believe it makes sense to provide assistance when factors beyond 
our control create losses. Generally more tailored farm policies are 
more defendable. For this reason, I like the thought of updating bases 
and yields or applying farm policies to planted acres/current 
production and their triggering based on prices or revenue, depending 
on the option a producer chooses.
Planting Flexibility
    Direct payments are excellent in this regard. SURE or similar whole 
farm aggregations tend to discourage diversification, which could be a 
problem for farms in my area and across the Mid-South where we tend to 
have very diversified farms. Whatever is done should accommodate 
history and economics and allow for proportional reductions to the 
baseline among commodities. Some commodities are currently more reliant 
on countercyclical farm policies (ACRE/CCP) while others are receiving 
only Direct Payments in the baseline. Generally, the least disruptive 
and fairest way to achieve savings across commodities would be to apply 
a percentage reduction to each commodity baseline and restructure any 
new policy within the reduced baseline amounts.
    I know there have been concerns raised about higher reference 
prices distorting planting decisions and resulting in significant 
acreage shifts including for rice. I have not seen analysis that shows 
significant acreage shifts resulting from the reference price levels 
included in the 2011 Farm Bill package. In fact, for rice specifically, 
a reference price of $13.98/cwt that is paid on historic CCP payment 
yields and on 85% of planted acres results in a reference price level 
well below my average cost of production, so I find it hard to imagine 
why someone would plant simply due to this policy given these levels.
Crop Insurance Should Be Maintained and Improved
    Although crop insurance does not currently work as well for rice as 
it does for other crops, the third priority would be to improve 
availability and effectiveness of crop insurance for rice as an 
available option. I would also support improvement to the product 
development processes (we have struggled with two 508(h) submissions 
for over 4 years and are still not completed with the process), and to 
the APH system such that any farmer's insurable yield (pre-deductible) 
would be reflective of what that farmer actually expects to produce. In 
no case should the crop insurance tools, which are purchased by the 
producer, be encumbered with environmental/conservation regulation or 
other conditions that fall outside the scope of insurance.
2011 Budget Control Act Efforts
    Although the details of the 2011 Farm Bill package that was 
prepared by the House and Senate Agriculture Committees in response to 
the Budget Control Act were not disclosed, based on discussions and 
reports I believe that package at least represents a good framework on 
which to build the 2012 Farm Bill. The 2011 package included a choice 
of risk management tools that producers can tailor to the risks on 
their own farms, providing under each of those options more meaningful 
price protection that is actually relevant to today's production costs 
and prices. It also included provisions to improve crop insurance and 
expedite product development for under-served crops such as rice.
    I would note that the effective support for rice producers under 
the price-based option was set well below cost of production and that 
late changes to the revenue-based option minimized its potential as an 
effective risk management tool for any rice producers, and that pay 
limits and AGI rules would still serve as an arbitrary constraint upon 
U.S. competitiveness globally. Still, even with these areas for 
improvement, I want to express my appreciation to the Members and staff 
that put enormous time and effort into what I believe represents a good 
blue print for ongoing farm bill deliberations.
    Thank you for this opportunity to offer my testimony today and I 
will be pleased to respond to any questions.

    The Chairman. Thank you, Mr. Owen.
    Mr. Corcoran, whenever you are ready.

      STATEMENT OF WALTER L. CORCORAN, Jr., COTTON, CORN,
          PEANUT, SOYBEAN, GRAIN SORGHUM, AND COW/CALF
                     PRODUCER, EUFAULA, AL

    Mr. Corcoran. I would like to thank Chairman Lucas and the 
Members of the Committee for the opportunity to provide my 
views on U.S. farm policy. I would also like to express my 
gratitude to Congressman Rick Crawford for hosting this very 
important hearing.
    My name is Walt Corcoran from Eufaula, Alabama. Along with 
my brother, nephew and our wives, we operate a diversified 
family farming operation in both Georgia and Alabama. Our 
principal crops include cotton, corn, peanuts, soybeans, and 
grain sorghum. We also manage a 500 head cow/calf operation. 
The majority of my crop production is dryland with about \1/3\ 
irrigated using surface water.
    A sound and stable farm policy is critically important to 
the economic viability of U.S. agriculture. I fully support the 
Committee's commitment to conclude a farm bill in 2012. It is 
critically important to provide certainty to those of us 
involved in production agriculture since we make long-term 
investment decisions based in part on Federal farm policy.
    The 2008 Farm Bill has worked very well for my operation. 
The combination of marketing loan, direct payment, and 
countercyclical payments have provided a good safety net. I 
appreciate the budget pressure facing this Committee and all of 
Congress. Those pressures will lead to reduced funding for the 
next farm bill and I want to stress that agriculture is willing 
to contribute an equitable share to deficit reduction. But I 
encourage this Committee to fight efforts to impose a 
disproportionate burden on farm programs.
    In addition to budget pressures, the cotton industry faces 
a unique challenge in resolving the longstanding dispute with 
Brazil. Because of these challenges, the National Cotton 
Council has proposed an innovative revenue-based crop insurance 
program known as STAX. This product replaces the direct and 
countercyclical payments for cotton; thus, directly addressing 
one of the programs found to be at fault in the WTO dispute. In 
the opinion of the U.S. cotton industry, this structure will 
best utilize reduced budget resources, respond to public 
criticism by directing benefits directly to growers, and builds 
on the existing crop insurance programs.
    The findings of the WTO case also require that changes be 
made in the marketing loan for upland cotton as part of the 
development of the 2012 Farm Bill. I also encourage this 
Committee to follow the industry's recommendation to introduce 
a formula for determining the marketing loan level. That 
formula will allow the marketing loan to adjust lower in times 
of lower prices. The loan rate for a crop will be determined in 
the fall prior to planting the crop and will have a range from 
52 to 47.
    The House and Senate Agriculture Committees' proposal to 
the Joint Budget Committee recognized the fact that because of 
the diversity of crop needs, a one-size-fits-all approach is 
not practical. I encourage your Committee to continue this 
approach in your deliberations and tailor the various programs 
to fit the needs and constraints of the individual commodities.
    Farmers understand that agriculture is an extremely risky 
endeavor, but we also understand that effective risk management 
is the key to long-term viability.
    Like the vast majority of farming operations across the 
Cotton Belt, crop insurance and risk management tools are 
critically important to my economic livelihood. Given the 
diversity of weather and production practices, the menu of 
insurance choices should be diverse and customizable, thus 
allowing for maximum participation and the most effective 
coverage. I have crop insurance on most of my crops. Last year, 
because of the severe drought, it provided a measure of risk 
protection that was critical to my farming operation. I 
strongly urge that crop insurance not be weakened during this 
farm bill.
    In 2008, the introduction of enterprise unit pricing gave 
us one more option for insuring against risks that are beyond 
our control. I encourage the continuation of this option.
    Mr. Chairman, thank you for the opportunity to make these 
brief comments.
    [The prepared statement of Mr. Corcoran follows:]

 Prepared Statement of Walter L. Corcoran, Jr., Cotton, Corn, Peanut, 
       Soybean, Grain Sorghum, and Cow/Calf Producer, Eufaula, AL
    Good morning. I would like to thank Chairman Lucas, Ranking Member 
Peterson, and Members of the Committee for the opportunity to provide 
my views on U.S. farm policy. I would also like to express my gratitude 
to Congressman Rick Crawford for hosting this very important hearing. 
My name is Walt Corcoran, Jr. from Eufaula, Alabama. I along with my 
brother, nephew and our wives, operate a diversified family farm 
operation in both Georgia and Alabama. Our principal row crops include 
cotton, corn, peanuts, soybeans and grain sorghum. We also manage a 500 
head cow/calf herd. The majority of my crop production is dryland with 
about \1/3\ of my acreage using surface water irrigation.
    A sound and stable farm policy is critically important to the 
economic viability of U.S. agriculture--I appreciate the dedication and 
diligent work of this Committee during last fall's attempt at a joint 
deficit reduction package. While that effort did not advance a farm 
bill conclusion I fully support the Committee's commitment to conclude 
a farm bill in 2012. It is critically important to provide certainty to 
those of us involved in production agriculture since we make long-term 
investment decisions based on Federal farm policy.
    The 2008 Farm Bill has worked very well for my operation. The 
combination of the marketing loan, Direct Payments and Counter-cyclical 
Payments has provided a good safety net, and in recent years, has 
required minimal Federal spending. I appreciate the budget pressures 
facing this Committee and all of Congress. Those pressures will lead to 
reduced funding for the next farm bill. I want to stress that 
agriculture is willing to contribute an equitable share to deficit 
reduction, but I encourage this Committee to fight efforts to impose a 
disproportionate burden on farm programs. We support your Committee's 
recommendation of $23 billion in budget savings as an equitable 
contribution to deficit reduction.
    In addition to budget pressures, this Committee is well aware that 
the cotton industry faces the unique challenge of resolving the long-
standing trade dispute with Brazil. Because of these challenges, the 
National Cotton Council has proposed an innovative revenue-based crop 
insurance program known as STAX. This product replaces the direct and 
countercyclical payments for cotton, thus directly addressing one of 
the programs found to be at fault in the WTO dispute. In the opinion of 
the U.S. cotton industry, this structure will best utilize reduced 
budget resources, respond to public criticism by directing benefits to 
growers who suffer losses resulting from factors beyond their control, 
and build on the existing crop insurance program, thus ensuring no 
duplication of coverage and allowing for program simplification.
    The findings in the WTO case also require that changes be made to 
the marketing loan for upland cotton as part of the development of the 
2012 Farm Bill. I also encourage this Committee to follow the 
industry's recommendation to introduce a formula for determining the 
marketing loan level. That formula will allow the marketing loan to 
adjust lower in times of low prices. The loan rate for a crop will be 
determined in the fall prior to planting the crop and be set equal to 
the average of the AWP for the two most recently completed marketing 
years provided the 2 year moving average falls within a set maximum of 
$0.52 and a minimum level of $0.47.
    Other existing features of the upland cotton marketing loan should 
be retained in the next farm bill. These include an effective 
determination of the Adjusted World Price for purposes of loan 
redemption in times of low prices. as well as the provision of storage 
credits should the loan redemption price fall below the loan rate.
    The House and Senate Agriculture Committee proposal to the Joint 
Budget Committee recognized the fact that because of the diversity of 
crop needs, a one-size-fits-all approach is not practical. I encourage 
your Committee to continue this approach in your deliberations and 
tailor the various programs to fit the needs and constraints of the 
individual commodities.
    Farmers understand that agriculture is an extremely risky endeavor, 
but they also understand that effective risk management is the key to 
long-term viability. While the goal of farm programs is not to 
completely remove the risk associated with farming, farm programs 
should strive to provide opportunities for effective risk management.
    Like the vast majority of farming operations across the Cotton 
Belt, crop insurance and risk management tools are critically important 
to my economic livelihood. Given the diversity of weather and 
production practices, the menu of insurance choices should be diverse 
and customizable, thus allowing for maximum participation and the most 
effective coverage. I have crop insurance coverage on most of my crops. 
Last year, because of the severe drought conditions, it provided a 
measure of risk protection that was critical to the economic viability 
of my farming operation.
    I strongly urge that crop insurance not be weakened during this 
farm bill. In today's environment of volatile prices and high input 
costs, effective risk management has never been more important.
    In 2008, the introduction of enterprise unit pricing gave producers 
one more option for insuring against those risks that are beyond their 
control. I encourage the continuation of that option in the 2012 Farm 
Bill.
    Mr. Chairman, my brief comments do not provide an exhaustive look 
at the many important programs included in the current farm 
legislation. That said, there are a couple or others I would point out. 
Assistance for our U.S. textile mills was introduced in the 2008 Farm 
Bill, and I encourage that program to be continued in the next farm 
law. In recent years, conservation programs have become increasingly 
important and I hope those programs will remain useful options. Thank 
you for the opportunity to offer these, and I look forward to the 
opportunity to answer questions at the appropriate time.

    The Chairman. Thank you, sir. And I now recognize myself 
for 5 minutes.
    Mr. Owen, in your written statement you said, ``It is 
inappropriate to believe that crop insurance can ever be the 
sole policy producers rely upon for risk management.'' Sole 
policy. Expand just--and you did a good job in your testimony. 
Expand just a little bit more on that if you would for the 
record.
    Mr. Owen. Well, the main problem with using crop insurance 
as the sole basis risk management is that crop insurance cannot 
protect you against a multi-year low price scenario such as we 
experienced in the late 1990s. The indemnities for crop 
insurance or the triggers are set in the winter and they are 
generally based off Chicago Board of Trade futures, and when 
those prices are low, then you have a product that provides no 
protection from the beginning. So without an underlying 
reference price, either countercyclical or through a revenue 
assurance policy offered through the government that is 
economically viable, then crop insurance is not a long-term 
safety net for agriculture in the Mid-South, or as far as I can 
see, anywhere in the country.
    The Chairman. Very insightful plan, sir.
    Mr. Stewart, you mentioned the importance of disaster 
programs. So as a fellow cattleman, I ask this question and if 
you do not mind me asking, have you participated in any of the 
livestock disaster programs offered under the 2008 Farm Bill--
the Livestock Forage Program or the Livestock Indemnity 
Program?
    Mr. Stewart. What I have participated in is the NAP, the 
non-insured disaster program. The LA--there are a lot of 
letters and acronyms and it is almost like learning a new 
language.
    The Chairman. Yes.
    Mr. Stewart. But we did not qualify. It is pretty hard to 
qualify in that Livestock Forage Program, so we did not. But I 
have received payments from the NAP Program, which is the non-
insured. And as far as the Livestock Indemnity Program, I do 
keep records of losses in case I would qualify, but so far I 
have personally been lucky enough that I have not had to use 
the LIP program.
    The Chairman. One other question, Mr. Stewart. You 
mentioned ethanol just a moment ago. From your perspective as a 
cattleman, some would argue, with 45, maybe 50 percent of the 
corn crop on average in the last couple of years going through 
the ethanol cookers, that it has no real effect on the supply 
of corn or the availability of feed. What do you think of that 
comment that some people make.
    Mr. Stewart. Well, that seems to be hard to believe. I do 
not think the corn crop as a whole has gone up that much. 
First, they were talking about the distiller's grain, but it 
seems like that has not--we have not been able to utilize that 
as a feed source like we were once led to believe.
    The Chairman. On the previous panel, my colleague from 
Arkansas noted about the Conservation Reserve Program and we 
are seeing in some of the re-enrollments the acres come down, 
which of course, CRP is a voluntary conservation program and I 
am a great believer in voluntary conservation programs, by the 
way, for the record. But as those CRP acres come down, that 
seems to imply that producers are assessing grain prices and 
determining we have to have more production. My cattlemen, pork 
producers, poultry people, and turkey people at home tell me in 
a pretty straight-forward way that the feed supplies have been 
really tight the last 2 years. Do you see that when you buy 
your 20 percent pellets?
    Mr. Stewart. Yes, I do, sir.
    The Chairman. So we have to have more grain. You would 
agree with that statement.
    Mr. Stewart. Yes, in order to keep the price where we can 
afford it. You know, if you have the money, you can buy it, but 
it makes it tough. And I know right now, cattle prices are 
good, but as we all know, they do not last.
    The Chairman. Exactly. Exactly. Looks like my time is about 
to expire.
    I now turn to the gentleman from Texas for 5 minutes, Mr. 
Neugebauer.
    Mr. Neugebauer. Thank you, Mr. Chairman.
    Mr. Hundley, you mentioned that you were opposed to means 
testing. A lot of folks are opposed to large farming operations 
getting farm payments. I think in your testimony, you said it 
would be detrimental to the family farms in Arkansas. Do you 
want to elaborate on that?
    Mr. Hundley. Yes. I think as you see from the previous 
panel and this panel, the one thing that lenders and people 
that extend credit like right now is the guarantee that a 
deficiency payment provides. Not so much the deficiency 
payment, but the guarantee. And I think means testing in itself 
is almost a failed attempt to regulate a failed policy. You 
know, the safety net that we need needs to be a safety net that 
is available to every farm on every acre on every crop, 
regardless of their size or their business structure. And I 
think from that standpoint is what I referred to as means 
testing would be detrimental to Arkansas farmers if it was just 
you draw a line in the sand and say okay, you get it, you do 
not.
    Mr. Neugebauer. Mr. Owen, you mentioned that reform to crop 
insurance you thought would be an integral part of the next 
farm bill. One of the things that we are going to have to do is 
make choices because in this budget environment we feel like we 
are going to be obviously dealing with a smaller amount of 
funds to put together a good comprehensive farm policy in the 
future.
    Of the current policy that we have; in other words, talking 
about looking at the baskets we have now, in your operation, 
what do you think is the most important farm program that 
exists today that we should work really hard to preserve. If 
you had to pick one. And I know that is difficult and I am not 
saying we are going to have to do that, but I am just trying--
we are going to have to prioritize this and we are trying to 
get your thoughts.
    Mr. Owen. It is not as difficult as you would imagine. For 
my operation, countercyclical program is by far the most 
important and the most defendable to the city people. Having a 
meaningful reference price that we can take to a bank to get 
financed, having a loan program that we can use to aid our 
marketing is the most important. We need price protection and 
we need yield protection. Price protection has to come from the 
countercyclical type program. Yield protection should come from 
insurance. And the most important factor by far though to my 
operation is a countercyclical program with a reference price 
that is meaningful.
    Mr. Neugebauer. You know, one of the things that we have 
seen is the countercyclical payments have actually performed 
extremely well over the last few years, and that is the way the 
program was designed, was when the price was low obviously you 
had that safety net. But in many commodities, for the last few 
years obviously, countercyclical payments have not come into 
play. So that is a program--unfortunately that is one of the 
programs that we have had trouble with the WTO. So obviously 
that is something we will have to address.
    Mr. Stewart, in this environment where we have just come 
out of in Texas some pretty severe droughts and some other 
parts of the country, what are some of the biggest challenges 
for the cow/calf producer today?
    Mr. Stewart. Well, like you say, regardless of whether you 
attribute it to global warming or weather cycles or what, but 
it seems like we are in a system of extremes. In our area, we 
can have floods, massive floods all spring. Summer gets here 
and we do not get another drop until next winter. And that 
seems to be one of the biggest challenges as far as our forage 
production.
    Other issues--like most farmers and ranchers, we like to 
look ahead and plan for the worst. And there are environmental 
issues that possibly will be out there. Some of them, like the 
dust issue, they say that was just a myth, but it concerns a 
lot of farmers. And I would like to see some assurance that 
stuff like that will not affect us in the future.
    Mr. Neugebauer. I yield back, Mr. Chairman.
    The Chairman. The gentleman yields back.
    The chair now recognizes the gentleman from Arkansas, Mr. 
Crawford, for 5 minutes.
    Mr. Crawford. Real quick, we were talking with Mr. Stewart. 
I want to talk about something that has been brought to my 
attention by a number of folks. The testimony you gave 
regarding your experience as a child and just kind of 
describing the family dynamic on your farm.
    The Department of Labor issued a proposed regulation in 
regards to children working on farms, and to my knowledge, no 
ag group obviously supported that initial proposal. But since 
the backlash, the Department has said they will repropose the 
regulation involving the parental exemption section only. Have 
you read anything about that? And what would be the impact on a 
family farm like yours if they were to tell you that you could 
not allow your children to participate in production 
agriculture?
    Mr. Stewart. Well, I personally think it would be 
devastating to the family farm, because at an early age, my 
thought is you need to instill a love for farming. Farming in 
our area especially is more than just an economic thing. It is 
a way of life and something that you have to really want to do 
because at times it is tough. And if you do not love what you 
do, you are not going to stay in it. And if you instill that in 
your children and grandchildren at an early age, we can 
continue to have our family farms.
    Mr. Crawford. Excellent, thank you.
    Mr. Freeze, the Arkansas fish growing industry has been in 
decline for the past few decades. Can you talk about some of 
the factors that have contributed to that decline? And in 
crafting the next farm bill, what would the suggestions be to 
address those issues?
    Mr. Freeze. Well, of course, the rising input cost, your 
increase in feed and increase in energy costs, et cetera. They 
affect the aquaculture industry or fish farms just like they do 
other farmers. But probably this unlevel playing field that was 
referred to with the seafood inspection is one of the big 
issues. I think this Committee tried to correct that in the 
2008 Farm Bill, but it has been almost 4 years now and still 
the inspection of catfish coming into the United States has not 
been transferred from FDA to FSIS. FSIS started inspections and 
we are wondering how much longer this is going to take.
    So other than that, some of the regulatory issues that I 
talked about. I mean, I know all farmers feel as if they are 
over-regulated but I think if you will add it up, for a fish 
farmer, we are regulated by something like 30 to 40 different 
state and Federal agencies. And it is just a real problem.
    Mr. Crawford. Thank you.
    In the time I have left, Mr. Hundley, many of the Members 
of this Committee see farmers as the best stewards of the land 
and I think certainly those Members that are present would 
agree with that. But the EPA seems to think differently about 
that. Congress has given producers the tools through cost-share 
programs and voluntary incentive-based programs to improve 
water, soil and air quality. Can you talk about the importance 
of conservation programs in dealing with potential regulations 
that we may be seeing with respect to EPA?
    Mr. Hundley. I need to think about how to say this. When 
you mention EPA, one of the problems, you say that there are 
programs to help us mitigate some of those regulations. What I 
see right now, it seems that we have an agency that is out 
there making rules and trying to enforce rules that have 
sidestepped even the Committee or even Congress sometimes. It 
seems like, for instance, the fuel containment deal. I mean 
just all of a sudden, here it comes. I don't want to look a 
gift horse in the mouth on some of these programs that we have 
to help offset these, but you know, we feel that the EPA is 
over-reaching sometimes and we feel like you all should have 
some input before it ever comes to us as an implementation of a 
law.
    Mr. Crawford. Okay. A little time left.
    Mr. Corcoran, you want to comment on that with respect to 
EPA on your farm?
    Mr. Corcoran. Just as he was saying, they over-reach. I 
think they are implementing or putting rules on us before we 
know what is going on. As far as point source pollution in our 
state. We had a big problem with trying to regulate--I think it 
is everywhere--the waters under the Clean Water Act, trying to 
regulate the nozzle as a point-source source of pollution. They 
are far over-reaching regulations and we need to rein them in 
somehow.
    Mr. Crawford. Mr. Owen, final thought.
    Mr. Owen. Well, first of all, I would say that farmers are 
the original active environmentalists, instead of being 
environmental activists. And EPA does need to be reined in. We 
are excellent stewards of the land and I would put our record 
up against any country as far as the way we take care of our 
land, the way our pesticides are regulated, the way we use our 
pesticides. We have a fabulous track record and we do not need 
further regulation.
    Mr. Crawford. Thank you. I yield back, Mr. Chairman.
    The Chairman. The gentleman's time has expired.
    The chair now recognizes the gentleman from Indiana, Mr. 
Stutzman, to conclude the questions for this panel. You are 
recognized for 5 minutes, sir.
    Mr. Stutzman. Thank you, Mr. Chairman.
    As we all know, there is plenty of volatility in 
agriculture. As we see yesterday corn prices were down, today 
corn and soybean prices are up 30 cents and 50 cents, just due 
to crop reports. You know, we see a lot of volatility. Many 
folks out East do not understand those challenges. We are 
always trying to play--we have to play two sides of the game. 
You have input costs and then you have your commodity prices 
that affect us.
    I appreciate Congressman Crawford so much. Being a corn and 
soybean farmer from northern Indiana, rice is really a new crop 
to me. I do not understand the complexities that you all face. 
And one of the comments that Mr. Owen, you had in your 
testimony, I would like to direct this question to Mr. Owen and 
Mr. Corcoran. In your testimony, Mr. Owen, you cite ``What rice 
farmers like I need from Federal crop insurance are products 
that would help protect against increased production and input 
costs, particularly for energy and energy-related inputs. For 
example, field fertilizer and other energy-related inputs 
represent about 70 percent of total variable costs.''
    I know for myself as a corn and soybean farmer, I have 
about the exact same situation for us. It is volatility in the 
input side. Can you give me an idea--we are seeing a lot of 
volatility in the corn and soybean markets. What are you seeing 
on the rice side? I just have not followed those prices. What 
is different about rice from corn and soybeans?
    Mr. Owen. Well, first of all, rice has been working 
towards, for the last 4 years with RMA trying to develop a 
policy that would provide us with rising input protections in 
fuel and fertilizer primarily. And the main thing that is 
different about rice is the cost of running irrigation pumps. 
When we have a drought scenario--and you have a 100 horsepower 
motor on average in the Mid-South, 100 horsepower motor turning 
24 hours a day trying to keep water on 100 acres of rice. Well, 
most rice farmers are farming 750 to 1,500 acres of rice in 
their rotational mix. That is a significant consumption of 
diesel. And also when we have fertilizer price spikes such as 
in 2008, it just runs your production cost through the roof. So 
we are working with RMA to try to develop a product for rice, 
which may very well work for corn and soybeans after it is 
developed and up, but this is a pilot program that we are 
trying to get through and developed. But I would say the amount 
of diesel and electricity required to run irrigation systems in 
drought periods is our main cost of running up our fuel.
    Mr. Stutzman. And Mr. Corcoran, if you could talk a little 
bit about the price of rice and how that market works.
    Mr. Corcoran. I am not a producer of rice.
    Mr. Stutzman. Oh, I am sorry, you are cotton. I am sorry 
about that.
    Mr. Owen and Mr. Hundley, if you could maybe comment on 
that.
    Mr. Hundley. Excuse me, the question again?
    Mr. Stutzman. We see a lot of volatility in corn and 
soybeans and I am a northern Indiana farmer and as Mr. Stewart 
mentioned, ethanol has obviously played a huge impact in those 
prices. Could you talk about the rice market? Do you see the 
same volatility and what are the factors that affect the price 
of rice.
    Mr. Hundley. I think one of the things that I see with rice 
is we do not have--the futures market is not an effective place 
to hedge. Where you as a corn farmer, I mean, you can go in and 
daily trade corn or soybean futures as an effective hedge, and 
in rice, we do not have that.
    I have some opinions of why that is, but I do not know if 
it is true. A lot of the end-users do not use hedging as an 
effective tool. So I think that is the biggest difference.
    Mr. Owen. Mr. Stutzman, we are taking some steps and 
working with CME and the rice industry to try to improve 
convergence in futures. Another difference is rice is--you 
know, the United States only grows about three percent of the 
world's rice crop. However, we are the third or fourth largest 
exporter of rice. And 96 percent, or 95 percent of the rice 
grown in the world is consumed where it is grown. So the five 
percent that is left for export can be extremely volatile in 
price. Currently we are dealing with countries that are 
subsidizing their exports, India, Thailand and Brazil at this 
point. So that changes the dynamic a little bit.
    And rice is an expensive crop to grow. Hopefully we will 
get these things ironed out with the ability to hedge rice like 
we use futures for corn and soybeans and wheat and cotton, but 
we are not there yet. But we are working on it.
    Mr. Stutzman. Well, my wife for some reason keeps putting 
more rice on our plate at home, so you must be getting to her, 
so we are trying to do our part and help consume the rice crop.
    Mr. Owen. It is good for you.
    Mr. Stutzman. It is good for you. With that, I will yield 
back, Mr. Chairman.
    The Chairman. The gentleman's time has expired, all time 
has expired.
    Before we begin the process of concluding this hearing, I 
would like to take just a moment once again to thank 
Congressman Crawford for working very diligently to suggest the 
quality of hearing we could have and the different perspectives 
we could bring together. You were absolutely right, Rick, about 
that.
    And I would also like to thank Arkansas State University 
for these wonderful facilities. Rarely do we have this quality 
of a facility to have a field hearing in; thank you very much, 
staff, faculty, administration for that.
    And also, and I much attribute this to the fact that he was 
an old House Member before he went to that other body on the 
other side of the building in Washington, D.C., I would like to 
note on behalf of the Committee a very special appreciation to 
Arkansas's own Senator Boozman for coming and spending a half a 
day with us. As a Member of the Senate Agriculture Committee 
and a representative of this great ag state, he is just as 
concerned and focused as we are all here today on trying to 
figure out the things we need to determine so as to craft that 
next farm bill. So raise your hand, John, you cannot hide over 
there. Senators are Senators, you know.
    [Applause.]
    The Chairman. And with that, I would like to invite the 
gentleman from Arkansas, Mr. Crawford, to offer any closing 
remarks that he might have.
    Mr. Crawford. I thank the Chairman for his work in leading 
the Agriculture Committee in the House of Representatives. I 
want to say a particular word of thank you to the staff, the 
Committee staff, who do the hard work and the heavy lifting. 
They have done a wonderful job and I also want to thank the 
staff here at ASU for hosting us today.
    From the testimony we have heard this morning, it is 
obvious that our farmers face many challenges. I am encouraged 
though that as the Agriculture Committee begins the task of 
writing a new farm bill, that we will be able to protect 
farmers here in Arkansas and the Mid-South and across the 
country.
    So last, let me encourage everyone who did not get a chance 
to have their comments heard, that we do want to hear from you, 
you can submit your written comments for the record up until 
May 20, you can do that online at www.house.agriculture.gov/
farmbill. That is a tough one to remember, get with us after 
the hearing and we will be glad to write that down for you. 
Again, you have until May 20 to submit your comments and we do 
want to hear from you. Your opinion is very important.
    Thank you so much, everyone for being here. And with that, 
I yield back to the Chairman.
    The Chairman. The gentleman yields back.
    Any other closing comments from my colleagues?
    [No response.]
    The Chairman. Seeing none, thank you all again for being 
here today. I think we have heard some truly valuable input 
today and I would like to especially thank our witnesses for 
their time and their willingness to answer questions to the 
extent they have.
    As I said when we started, there are some challenges that 
vary by region and we need to tailor farm policy to reflect 
those unique requirements. I think it is also true farmers and 
ranchers across the country share some of the same experiences. 
So whether you raise fish in Arkansas or cotton in Mississippi 
or peanuts in Georgia, corn in Alabama or rice in Missouri and 
Louisiana, you want the same things. You want smart policies 
that allow you to keep producing food and fiber for America. 
Your input is important as a piece of this puzzle in putting 
together a farm bill that works for all farmers in all regions, 
all parts of the country.
    Once again, as my colleague Congressman Crawford said, if 
you want to submit comments, opinions and have it included in 
the official record, go to agriculture.house.gov/farmbill and 
fill out that form and send it back to us. Your perspective is 
vital to the process and I thank you all for participating 
today.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 30 calendar days to receive 
additional information and supplementary written responses from 
witnesses to any question posed by a Member.
    This hearing of the United States House Committee on 
Agriculture is adjourned. Thank you.
    [Whereupon, at 10:53 a.m. (CDT), the Committee was 
adjourned.]


   THE FUTURE OF U.S. FARM POLICY: FORMULATION OF THE 2012 FARM BILL

                              ----------                              


                         FRIDAY, APRIL 20, 2012

                          House of Representatives,
                                  Committee on Agriculture,
                                                    Dodge City, KS.
    The Committee met, pursuant to call, at 9:00 a.m. (CDT), at 
the Magouirk Conference Center, 4100 W. Comanche, Dodge City, 
Kansas, 67801, Hon. Frank D. Lucas [Chairman of the Committee] 
presiding.
    Members present: Representatives Lucas, Conaway, and 
Huelskamp.
    Staff present: Bart Fischer, Matt Schertz, Nicole Scott, 
Heather Vaughan, Suzanne Watson, John Konya, and Caleb 
Crosswhite.

 OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN 
                     CONGRESS FROM OKLAHOMA

    The Chairman. This hearing of the Committee on Agriculture 
entitled, The Future of U.S. Farm Policy: Formulation of the 
2012 Farm Bill, will come to order.
    Good morning. Thank you all for joining us today for our 
final farm bill field hearing. Congressman Huelskamp, thank you 
for hosting us in your district. I like doing things in the 
neighborhood, coming from just across the line to the south, 
and I want to thank all of our witnesses for joining us today 
and extend a particular welcome to Scott Neufeld, who's come up 
from my great State of Oklahoma. I'll talk about him a little 
later.
    This hearing is a continuation of a process that started in 
the spring of 2010. Today, we'll build upon the information 
we've gathered in those hearings, as well as the 11 farm policy 
audits we conducted this past summer.
    We used those audits as an opportunity to fairly evaluate 
farm programs to identify areas where we could improve 
efficiency.
    The field hearings serve a slightly different purpose, 
though. Today, we're here to listen. I talk to producers all 
the time back in Oklahoma. I see them at the feed store; I meet 
them in my town hall meetings; and of course, I get regular 
updates from my boss, Linda Lucas, back home on the ranch. Yes, 
those of you who know Linda understand exactly what I mean by 
that, but I can tell you that the past three field hearings 
have demonstrated the tremendous diversity of agriculture in 
this country.
    We started in New York, where the farming operations tend 
to be smaller, and there are probably more trees in one acre 
than you have in most counties in the Big First District of 
Kansas, Tim. We learned how farm policy affects specialty crop 
growers and dairy producers in the Northeast.
    Next was Illinois, where we saw vast corn and soybean 
fields and heard how crop insurance is a critical risk 
management tool for farmers in the Corn Belt.
    In Arkansas, we saw quite a few irrigated fields, and yes, 
as a western Okie, I was a little envious of that, and we heard 
why crop insurance isn't quite as effective of a risk 
management tool in the Southeast.
    Today, we'll hear from a wide variety of producers who will 
no doubt have a different perspective than we got in those 
other regions. That's why it's so important that we offer a 
choice of policy options. The broad range of agricultural 
production in our country is what makes our country strong, and 
it also creates challenges, when we're trying to write a single 
farm bill that supports so many different regions and 
commodities.
    While each sector has unique concerns when it comes to farm 
policy, I'd like to share some of my general goals for the next 
farm bill. First and foremost, I want to give producers the 
tools to help you do what you do best, and that is produce the 
safest, most abundant, most affordable food supply literally in 
the history of the world.
    To do this, we must develop a farm bill that works for all 
regions and all commodities. It has to take into account the 
diversity of agriculture in America. Even within commodities, 
different programs work better for different regions, and 
that's why it's virtually important--vitally, I should say, 
important that the commodity title give producers options so 
they can choose the program that works best for them, whether 
it is by protecting revenue or price.
    I'm also committed to providing a strong crop insurance 
program for our producers. The Committee has heard loud and 
clear the importance of crop insurance, and it will be the 
backbone of our safety net. We will look for areas to improve 
crop insurance as we move forward.
    Last, we will work to ensure that producers can continue 
using conservation programs to protect our natural resources. 
I'm particularly curious as to your thoughts on how to simplify 
the process so they are easier for our farmers and ranchers to 
use.
    Beyond those priorities, I know there are a number of 
universal concerns facing agriculture across the country. For 
instance, my producers in Oklahoma are worried about 
regulations coming down from the Environmental Protection 
Agency, the EPA, and how they must comply with those 
regulations. I'm also aware that the death tax is creating 
difficulties for farming operations. I want to hear how these 
Federal policies are affecting producers here.
    Today, we'll be hearing from a selection of producers. 
Unfortunately, we don't have time to hear from everybody who 
would like to share their perspectives, but we have a place on 
our website where you can submit your comments in writing. You 
can visit agriculture.house.gov/farmbill to find that form. You 
can also find the address on postcards that are available 
around the room, I believe.
    As I said before, we don't have an easy road ahead of us, 
but I'm confident that by working together, we can craft a farm 
bill that continues to support the successful story that 
American agriculture is; and with that, I would turn to our 
host, my colleague from the House Agriculture Committee, Mr. 
Huelskamp, for any comments he might offer.

 OPENING STATEMENT OF HON. TIM HUELSKAMP, A REPRESENTATIVE IN 
                      CONGRESS FROM KANSAS

    Mr. Huelskamp. Well, thank you, Mr. Chairman. I'm pleased 
and honored to host this field hearing for the House 
Agriculture Committee, not far from my home town of Fowler and 
not far from our family farm. I appreciate you and Congressman 
Conaway and others that have taken the time and effort to hear 
what producers think about the farm bill, and what a fantastic 
place to be here and hear that, in the region once known as the 
Great American Desert.
    The pioneers turned it into one of the most productive 
agriculture areas in the world with hundreds of thousands of 
acres of wheat and corn and milo and soybeans, even cotton, and 
millions of head of cattle and pigs, and not to mention ethanol 
and dairy production.
    We do this in a time of mixed news: A lingering and 
devastating drought throughout much of the Plains, high 
commodity prices and record exports, matched with high cost for 
inputs and machinery and even a land price boom, an aging 
producer population and labor shortages, a slew of expensive 
government regulations from the EPA, USDA, Departments of Labor 
and Transportation.
    Additionally, we're all aware of the financial situation in 
Washington. Overspending has led to a massive debt problem. As 
America's farmers and ranchers, we will do our fair share, I 
believe, to solve this problem, but so should the more than 80 
percent of the farm bill spending for food stamps and other 
welfare programs, and we also expect Washington to do with 
less: Less regulation, less mandates, and less control over our 
way of life.
    Writing farm policy is especially difficult because there 
are so many variables affecting agriculture: Market volatility, 
monetary policy, international competition, the weather, and of 
course, new regulations out of Washington. With these in mind, 
the next farm bill must be designed with maximum flexibility 
and effective risk management for our farmers and ranchers as 
we feed a growing and hungry world.
    In order to meet these goals, it's absolutely critical that 
we actually listen and learn from the concerns and common sense 
of America's farmers and ranchers, so let me again thank you 
all for coming to share your thoughts with the Committee and I 
look forward to hearing from you today.
    The Chairman. Thank you, Congressman Huelskamp.
    The chair requests that other Members submit their opening 
statements for the record, so that witnesses may begin their 
testimony and ensure that there's ample time for questions.
    With that, I'd like to welcome our first panel of witnesses 
to the table: Mr. Gary Harshberger, a corn, wheat, milo, 
soybean and cow/calf producer, Dodge City, Kansas; Mr. Keith 
Miller, a wheat, sorghum, corn, soybean and cow/calf producer, 
Great Bend, Kansas; Mr. Dee Vaughan, a corn, cotton, sorghum, 
soybean, and wheat producer, Dumas, Texas; Mr. Scott Neufeld, 
cotton--sorry--wheat, sorghum, canola, alfalfa, cow/calf 
producer from Fairview, Oklahoma; and indulge me for a moment, 
as the Chairman of the Committee, to note that while he didn't 
put it in his bio, he and his wife Brenda and their two kids 
were recently named the Oklahoma Farm Bureau Family of the 
Year. I think that's very impressive and thank you, Scott, for 
bringing the real boss of your operation, Brenda, with you 
today also.
    With that, Mr. Terry Swanson. Mr. Swanson is a corn, wheat, 
sorghum, sunflower, and cow/calf producer from Walsh, Colorado, 
and with that, let's turn to, appropriately, our friend from 
Dodge City. You may begin.

STATEMENT OF GARY HARSHBERGER, CORN, WHEAT, MILO, SOYBEAN, AND 
               COW/CALF PRODUCER, DODGE CITY, KS

    Mr. Harshberger. Good morning. Is this on? Good morning, 
Chairman Lucas, Representative Huelskamp, and Representative 
Conaway. Welcome to western Kansas. Kansas's First 
Congressional District is the number one agriculture producing 
Congressional district in the nation. It's my honor to sit 
before you today and offer my perspective on farm policy as the 
Committee shapes the next farm bill. Thank you for holding this 
hearing in Kansas and thank all of you for being here.
    My name is Gary Harshberger. I'm a fourth generation Ford 
County farmer. After graduating college in 1987, I returned to 
the family farm. However, I can proudly say that I started 
farming roughly about the age of 10. Today we raise corn, milo, 
wheat, soybeans, and some cattle. I currently serve as Chairman 
of the Kansas Water Authority. I serve on the Bonanza Bioenergy 
board as well as the Arkalon Energy board of directors.
    I know that ag programs have done more than their fair 
share to reduce Federal spending and yet this bill will be 
written with much less money. Thank you for your efforts in 
trying to develop a farm package that works and can sustain 
farmers through the next 5 years. My testimony today will focus 
on five critical areas as they relate to my operation.
    First of all, while this Committee does not have 
jurisdiction over this particular area, I must share my concern 
with over-regulation. On one hand, the government wants to cut 
farm production--protection--cut farm protection, and on the 
other, it wants to saddle us with costly regulations proposed 
by out-of-touch politicians and bureaucrats. The child labor 
laws stemming from the Department of Labor, as well as diesel 
engine regulations coming from the EPA, are just two examples 
of regulatory burdens that cost my farm and consumers money.
    Over-regulation is cumbersome and costly and presents more 
of a threat to our nation's agriculture than possibly would the 
farm bill.
    On to the farm policy. I know this Committee has heard from 
producers across the U.S. that crop insurance is the most 
important program to protect in the next farm bill. I would 
like to echo that fact. The impact of the recent drought is a 
testament to the uncertainty farmers face each year, and the 
need to rely on crop insurance can never be more clear.
    There are many ways to strengthen the program, such as a 
personal T-yield system to current APH methodology, allowing a 
producer's APH's to more accurately reflect his yield 
potential. I would like--I would also like to see a better 
system in place for insuring limited irrigation practices.
    As water supplies diminish and water conservation practices 
are adopted, crop insurance should reflect this trend. RMA 
needs to be encouraged to implement the proposed limited 
irrigation crop insurance programs for 2013.
    Finally, please keep crop insurance tools purchased by 
producers protected from environmental compliance requirements 
or other--any other payment limitations that limit conditions 
that do not belong tied to insurance.
    There have been many policy avenues that have been offered 
by the commodity title. Shallow loss and deep loss have both 
been discussed. I believe a new program should protect yield 
and price in some form, as well as allow for flexibility. If 
revenue--if a revenue-type program is used, I believe a minimum 
price yield and plug--minimum price and plug yield should be 
included in a revenue-based program. My input prices have 
dramatically increased since the time I began farming. 
Recently, we have enjoyed higher commodity prices and positive 
profit margins. However, historically, this shows that this 
will not last, as input costs will increase until they meet or 
exceed the costs of production.
    Last year, for instance, I just saw a $48,000 increase in 
the price of a combine. I feel a price--I feel a minimum price 
will protect against a large drop in commodity prices and plug 
yields will help in times of consecutive years of yield loss, 
such as in a drought.
    A farm bill should provide assistance when I suffer losses 
beyond my control. I need a simple program in case of--in case 
my operation suffers a disaster. ACRE and SURE did not provide 
the efficiency and simplicity farmers needed, and while current 
loan countercyclical programs are simple, production costs have 
continued to rise, making 2008 levels no longer relevant to the 
realities of costs today.
    Water conservation is something I'm very passionate about. 
Last year's drought has dramatically affected the water supply 
in my region, as many others tied to the Ogallala Aquifer.
    We need to build stronger incentives for producers to plant 
less water-intensive agriculture commodities; strengthen 
existing programs like AWEP, where dollars are already being 
used towards water conservation; and allow use of conservation 
practices that use new technologies currently eligible within 
the NRCS's conservation stewardship program, all of which can 
benefit groundwater conservation.
    Last, I support the continuation of the farm bill energy 
title. It's imperative our country sustains the national--our 
national--our national security. Programs in the energy title, 
like the Bioenergy Program for Advanced Biofuels, have been 
positive for the U.S. I am proud that I produce local grains 
that go to local ethanol plants and contribute to renewable 
fuel sources that reduce our dependence on foreign oil and 
putting billions of dollars back into our local economies 
instead of sending them overseas.
    Many people talk today about cutting the energy title from 
the farm bill, and some even question the Renewable Fuel 
Standard in general. We have to remember that energy policy has 
been instrumental in maintaining our markets for our grain, as 
input prices and regulations have continued to increase 
tremendously. Cutting the legs out from underneath ethanol or 
biofuels at this time would be catastrophic.
    In closing, I'd like to reiterate that crop insurance is 
critical. I believe that the commodity title should be as 
simple as possible, as to allow producers flexibility for what 
works best in their region and on their farm. Finally, water 
and biofuels are critical to our local economies, and programs 
in the conservation and energy titles that benefit us in 
producing domestic biofuels and sustaining our water should be 
supported.
    Thank you, and I welcome any questions.
    [The prepared statement of Mr. Harshberger follows:]

Prepared Statement of Gary Harshberger, Corn, Wheat, Milo, Soybean, and 
                   Cow/Calf Producer, Dodge City, KS
Introduction
    It is my honor to sit here today before the House Committee on 
Agriculture and offer my perspective on farm policy as the Committee 
shapes the next farm bill. Thank you for holding this hearing in 
Kansas, and thank you Chairman Lucas and Congressman Huelskamp for 
being here.
    My name is Gary Harshberger. After college, I returned home to my 
family operation in Ford County and started farming in 1988 where we 
grow corn, milo, wheat and soybeans, and we also raise cattle. I serve 
as Chairman of the Kansas Water Authority and serve on the Bonanza 
Bioenergy and Arkalon Energy board of directors. Water and renewable 
energy can offer a sustainable future and are two areas I am 
particularly passionate about.
    I know that ag programs have done more than their fair share to 
reduce Federal spending and yet this bill will be written with much 
less money. Thank you for your efforts in trying to develop a farm bill 
package that works and can sustain farmers through the next 5 years. My 
testimony will focus on five critical areas as they relate to my 
operation.
Cumbersome Regulations
    Over-regulation has become a significant threat to the family farm. 
Although I understand this Committee does not have jurisdiction over 
this particular area, it is necessary that I share my discontent with 
what is happening at the farm level today. A couple of examples to 
highlight my concern are the Department of Labor's proposed child labor 
laws as they relate to agriculture and the diesel engine regulations 
coming through the Environmental Protection Agency. If the U.S. hopes 
to stay competitive with the rest of the world, it cannot continue to 
add more regulatory burdens on family farms like mine. These cost my 
farm and consumers money and disrupt the family farm work ethic on 
which this country was founded.
Federal Crop Insurance
    Even though producers across the U.S. have echoed Federal Crop 
Insurance as the most important program to protect in the next farm 
bill, I must place emphasis on it myself because it is crucially vital 
to my farming operation. The impact from the recent drought is a 
testament to the unknown certainty producers' face each growing year, 
and many are able to continue farming this year because of their 
investment in crop insurance.

   Improvements are needed in APH methodology and the county T-
        yield system. A producer's insurable yield should reflect what 
        he and his lender actually expect to produce in a given year. 
        APH could be improved by using a personal T-yield system, which 
        would allow a producer's APH to more accurately reflect his 
        yield potential rather than the county's yield potential.

   I would like to see a better system in crop insurance for 
        limited irrigation. Right now insurance is all or nothing. 
        There needs to be a viable policy in Federal crop insurance to 
        have limited type irrigation practices. There has been talk 
        about this at the state level, but nothing has been developed 
        yet. This type of policy would allow producers to raise feed 
        while using less water.

   Please keep crop insurance tools purchased by the producer 
        protected from environmental compliance requirements or other 
        payment limit conditions that do not belong tied to insurance.
Commodity Title
    Many avenues have been offered for a commodity title in the next 
farm bill, and while proposals have focused on either a shallow loss 
type program or a deep loss type program, I hope that our new program 
protects yields and price in some form. I have not looked at how all 
these different options would impact my farming operation, but I did 
like the concept of being able to choose between policies, an 
opportunity that I understand was in the fall draft of the farm bill.
    If a revenue type program is used, I believe a minimum price and 
plug yields should be included in a revenue-based program. My input 
prices have dramatically increased since the time I began farming, and 
while we have enjoyed higher commodity prices, history shows they will 
not last. In order to protect my investment, I feel a minimum price 
will protect against a large commodity price drop and plug yields will 
help in times of consecutive years of yield loss, which I may soon face 
if the current drought continues.
    Without yield plugs, a scenario may be created where the program 
has little value to dryland in this area and can no longer offer 
protection to my farm if two consecutive years of yield loss are 
realized. Therefore, I feel this component is necessary in a revenue-
based program.
    A farm bill should provide assistance when producers suffer losses 
beyond their control. I need a simple program to take to my banker in 
case my operation suffers a disaster. ACRE is based on the state's 
income, and I could suffer a total loss due to an isolated weather 
event and never trigger a payment. The SURE program was very 
complicated and slow to pay when we did have a loss. The current loan 
and countercyclical programs are simple, but production costs have 
continued to rise making the 2008 price levels no longer relevant to 
the realities of costs today.
    A set minimum price is needed to protect producer income in the 
event of a multi-year low price situation. Ideally, this minimum could 
move upward over time should production costs also increase.
Conservation Title
    Last year's drought has dramatically affected the water supply in 
my region and many others tied to the Ogallala Aquifer south of here. 
As an irrigated farmer, water is something I am very passionate about. 
Every drop of water is valuable and should be utilized toward its best 
economic return, but when meters are over pumped and very little 
recharge to the aquifer through rainfall takes place, lasting damage to 
our water supply results.
    Programs in the 2008 Farm Bill like the Agriculture Water 
Enhancement Program (AWEP) under the Environmental Quality Incentives 
Program (EQIP) targeted dollars toward water conservation and have laid 
the groundwork for more focused programs, but I feel these programs 
stand to be strengthened by providing stronger incentives to producers 
to plant less water-intensive agricultural commodities. The 
Conservation Security Program (CSP) is another existing program where 
water-savings language can be applied.
Energy Title
    I support the continuation of a farm bill energy title. It is 
imperative our country sustains our national security, and produces as 
much of our fuel in the U.S. as possible. I am a believer in the ``all 
of the above approach.'' The energy title has helped to continue to 
expand biofuels production outside the Corn Belt and outside of 
traditional feedstocks. Programs in the energy title like the Bioenergy 
Program for Advanced Biofuels have been positive for the U.S. I am 
proud that I produce local grain that goes into local ethanol plants 
and contributes to a renewable fuel source that will lessen dependence 
on foreign oil.
    Many people talk today about cutting the energy title of the farm 
bill, and some even question the renewable fuels standard in general. 
We have to remember that energy policy has been very valuable in 
helping to maintain markets for our grain as input prices and 
regulations have continued to increase tremendously.
Conclusion
    In closing I would like to reiterate that crop insurance is 
critical. I believe that the commodity title should be as simple as 
possible and bankable. If there ends up being several different complex 
proposals, then I would hope that I have the flexibility to choose 
based upon my own operation. Finally, water and biofuels are critical 
to our local economies, and programs in the conservation and energy 
titles that benefit us while producing domestic biofuels and sustaining 
our water should be supported. Thank you.

    The Chairman. Thank you.
    Mr. Miller, you may begin when you're ready.

 STATEMENT OF KEITH MILLER, WHEAT, SORGHUM, CORN, SOYBEAN, AND 
               COW/CALF PRODUCER, GREAT BEND, KS

    Mr. Miller. Mr. Chairman, Ranking Member, and the Members 
of the Committee, thank you for the opportunity to join us 
today and share some thoughts about the necessity of an 
economic safety net for farmers and how possible improvements 
to the current program would allow us to achieve these goals.
    I currently farm in the middle of Kansas, Great Bend, 
Kansas, and serve on the board of directors of Kansas Farm 
Bureau and am the past Chairman of the United States Meat 
Export Federation, but I'm here today under my own steam and 
grateful for the opportunity to share my thoughts with you.
    Mr. Chairman, please allow me to thank you publicly for 
having Representative Huelskamp host this hearing here in the 
great city of Dodge City, and we're glad that he did that for 
us, so we appreciate that, Tim.
    Crop insurance is an important part of my operation and it 
is imperative to it. Protection enhancement of crop insurance 
programs ranks as the number one priority from a long list of 
farm organizations throughout the United States, and I cannot 
agree more. Agriculture is a highly erratic industry and is 
influenced by many variables, and some are beyond a producer's 
control. We can control seed, fertilizer, and those types of 
inputs, but we cannot control the weather and the markets. 
Simply put, during the development of the 2012 Farm Bill, crop 
insurance must be a priority.
    Enterprise units would allow farmers to access quality 
coverage at a lower rate. These units are being used in certain 
areas to--and we're having trouble with the irrigated and the 
dryland differential because it currently, if you insure under 
one, you have to be for both. We need more flexibility in that 
program.
    Limited irrigation should be a focus of the new program and 
we should look for ways that we can do that in the new farm 
bill. Limited irrigation will only help conserve the water 
supply which is so very limited here in the United States.
    Declining yields is another problem that we're having with 
our crop insurance, and it's because of the excessive amount of 
drought years and crop failures. Under the current situation, 
the production history will go down and it will increase costs 
to our consumers through their premiums. We need to find a 
better way of keeping the crop in that system.
    Improving data collection: Like many others, the data is 
very, very important in the technology on my farm. It only 
seems right that we should improve the data collection that FSA 
and RMA are using, especially tying crop insurance together 
with our other reporting services, so we would encourage you to 
work on that.
    Reform: as you know, the cuts in crop insurance for the 
last few years have been between $12 and $20 billion. 
Additional cuts would likely increase the premiums to our 
producers and make it unable for a lot of producers to be able 
to purchase that. We simply cannot afford additional cuts in 
today's high risk marketplace.
    Let me switch gears, Conservation: I live right next to the 
Cheyenne Bottoms and conservation is a very, very important 
part of my operation. I currently use EQIP in several different 
ways to try and limit the amount of erosion in our area and 
preserve that wetland.
    Regulation, as you know, has been a major part of our 
problem coming from the--from D.C. The CAFO regulations, EPA 
regulations, Clean Water Act, all them have been giving us a 
lot more new regulations coming down and we're having trouble 
meeting all those regulations, and we sure would encourage you 
to try and limit them.
    Exports: I couldn't tell you enough about exports and 
global economy and how the amount of opportunities we have 
there. The Market Access Program is crucial for that to stay in 
business. The multi-year impact of increased market development 
spending is equal to $35 in agriculture export gains for every 
dollar expended. That's a 35:1 return on investment. That is 
crucial for the future of the United States to keep that 
program intact.
    So in closing, I would encourage you to read my entire 
written testimony, because there are a lot more facts and 
figures that are in that, and I sure thank you for the 
opportunity for me to be able to share my thoughts with you as 
a Committee.
    [The prepared statement of Mr. Miller follows:]

Prepared Statement of Keith Miller, Wheat, Sorghum, Corn, Soybean, and 
                   Cow/Calf Producer, Great Bend, KS
    Mister Chairman, Ranking Member Peterson, and Members of the 
Committee, thank you for the opportunity to join you today to share 
some thoughts about the necessity of an economic safety net for farmers 
and how some possible improvements to the current program will allow us 
to achieve this goal.
    I'm a third generation farmer who grew up on the same farm where I 
currently live in rural Barton County, Kansas. When I started farming 
with my wife in 1976, my father was farming 400 acres and raised a few 
hogs. Since then, the farm has grown to over 7,500 acres and is a 
diversified grains, alfalfa and cattle operation.
    All of my daughters and sons-in-law work on the farm at various 
times, and my daughter, Dara, and her husband, Jason, work there full 
time throughout the year. Whenever I'm away from the farm, I can count 
on my family to ensure that things run smoothly with respect to the 
day-to-day business on our farm.
    I've been fortunate to have the opportunity to serve in a host of 
leadership capacities, in my community, my county, my state, and even 
internationally.
    Our family is deeply involved in our church, where I serve on the 
church council and I've had the good fortune to serve on my local 
school board for a number of years, including a stint as President, 
when we shepherded a major bond issue to pay for school improvements.
    I currently serve on the board of directors of Kansas Farm Bureau, 
and am a past Chairman of the United States Meat Export Federation.
    But I'm here today under my own steam, grateful for the opportunity 
to share my thoughts about the next farm bill and eager to engage the 
Committee in this important dialogue.
    Mister Chairman, please allow me to begin by publicly thanking my 
own Congressman, U.S. Representative Tim Huelskamp for his leadership 
in the Big First U.S. House District of Kansas, and for arranging this 
field hearing today in Dodge City.
Safety Net/Crop Insurance
    Our family is deeply committed to agriculture and to rural America. 
My wife, Connie, and I raised our daughters and run our farm with an 
eye to the future generations of our family who will help feed, fuel 
and clothe the world from our lands.
    Stability through the use of effective risk management tools is 
imperative for our operation. Protection and enhancement of crop 
insurance programs ranks as the number one priority for a long list of 
farm organizations in the 2012 Farm Bill process. I could not agree 
more.
    Agriculture is a highly erratic industry influenced by a multitude 
of variables beyond the producer's control. Farmers can use top quality 
seed, fertilizer, chemicals and best management practices, and still 
not be able to control the weather or the markets. Profit margins in 
the industry are such that it is critical that farmers have access to a 
strong, viable and flexible risk management program.
    Simply put, during the development of the 2012 Farm Bill, crop 
insurance must be a priority.
    In fact, there are several possible improvements that I would urge 
the Committee to consider that would allow the program to better meet 
the needs of producers in Kansas and across the nation.
Enterprise Units
    Enterprise units allow farmers to access quality coverage at a 
lower premium rate. The program should be made permanent, but 
unfortunately, given the diversity between irrigated and dryland acres, 
the concept doesn't work as well as it could. To address this situation 
I would recommend introducing additional flexibility within the program 
to allow producers to designate enterprise units by practice; 
specifically, differentiating between irrigated acres and dryland 
acres.
    In drought years, this differentiation would have allowed us to 
receive indemnity payments on the dryland acres while continuing to 
attempt to bring a crop to fruition on our irrigated acres.
Limited Irrigation Products
    Given our focus on the future we routinely look for ways to 
maximize production while conserving water. One option I would 
encourage the Committee to support is the concept of a limited 
irrigation insurance product. Currently, producers have only two 
choices: They must declare acres either irrigated or non-irrigated. An 
irrigated designation implies application of adequate water to produce 
the crop but also requires planting at higher population rates.
    Properly developed, a limited irrigation product would encourage 
conservation by allowing producers with limited or declining water 
supplies to plant lower populations and set a lower yield goal while 
maintaining insurance coverage at better than dryland levels.
Declining Yields
    Many parts of the nation have now endured successive years of 
disaster events. Under our current structure these consecutive bad 
years result in declining Actual Production History and subsequently 
increasing producer premiums.
    Alternatives should be explored to rectify this situation and could 
include the use of a personal `T' yield in addition to the adoption of 
a higher yield plug to allow a producer's insurable yield to reflect 
what he hopes to produce in a given year.
Improving Data Collection
    Like many operations, we have aggressively implemented technology 
on our farm. It seems only natural to continue to encourage the 
implementation of technology at FSA and RMA as well as on the farm 
allowing greatly improved accuracy in reporting and eventually adding 
the potential for real time data collection.
    We believe the 2012 Farm Bill should continue to encourage agencies 
to embrace technology to better serve producers and allow for more 
efficient delivery of all farm programs and indemnity payments.
Reform Wisely
    As you're well aware, recent cuts to crop insurance and the 
renegotiation of the SRA have resulted in $12 to $20 billion in 
savings. Additional cuts will likely result in increased premiums to 
producers or reductions in the products available or the level of 
service companies are able to provide. We simply cannot afford 
additional cuts in today's high risk marketplace.
    American agriculture relies on a strong safety net, delivered 
efficiently and effectively through the current public-private 
partnership. Producers across the nation are concerned and opposed to 
this notion that crop insurance delivery could be managed and delivered 
through an existing Federal agency.
    In addition, in no case should the crop insurance tools, which are 
purchased by the producer, be encumbered with environmental regulation, 
conservation requirements, or other conditions that fall out of the 
scope of insurance. They should also not be subject to payment limits 
or means testing, doing so would defeat the purpose of the programs and 
reduce their effectiveness in ensuring that producers, no matter how 
small or large have equal access to risk management tools and an equal 
opportunity to continue to operate their farms.
Conservation
    Let me switch gears and visit briefly about the importance of 
conservation. My farm is literally just a stone's throw from Cheyenne 
Bottoms. It's the largest marsh in the interior of the United States 
and was designated a Wetland of International Importance in 1988.
    The area is considered the most important shorebird migration point 
in the western hemisphere. Approximately 45% of the North American 
shorebird population stops at the Bottoms during spring migration. 
Because of our farm's proximity to this special place, those of us in 
Barton County understand and value the importance of conservation.
    Farm bill conservation programs help producers enhance soil and 
water quality, improve wildlife habitat, can assist with compliance 
with Federal and state environmental rules, protect agricultural and 
grass lands and provide various other benefits.
    Working lands programs, in my opinion, provide the most bang for 
the buck. Chief among those is the Environmental Quality Incentives 
Program which seems to the best and most effective way to implement 
multiple conservation practices. Whatever you can do to preserve EQIP 
funding and programs should be a top priority.
    On my farm, I take advantage of the benefits offered in EQIP three 
different ways: Terracing of my fields, waterways and water 
conservation. In addition, I have many acres enrolled in the 
Conservation Reserve Program.
Regulation
    Federal regulations are increasingly costly for the U.S. economy, 
including for farmers and ranchers. And here, if you'll allow me, I'd 
like to tip my hat to Congressman Huelskamp for his work keeping this 
issue in the consciousness of the Congress.
    In the last year alone, Federal regulators have finalized 
regulations that ask farmers to draw up oil spill prevention plans for 
their operations, apply for Clean Water Act permits for certain 
pesticide applications and report certain air emissions. Unless the 
courts rule otherwise, farms and ranches will likely be regulated for 
greenhouse gas emissions, and the Environmental Protection Agency (EPA) 
is proposing that Concentrated Animal Feeding Operation (CAFO) owners 
report sensitive information on their operations to Federal regulators. 
Given the wide application, cost and burden of Federal regulations, it 
is critical that the process by which they are proposed and finalized 
be open, transparent and fair to all, particularly the regulated 
community.
Research
    As you know, the world population is exploding. In any best case 
estimate, agricultural production must produce 70 to 100% more by 2050. 
Current efforts are likely to yield only a 40% increase in our 
production by that time. We have significant work to do.
    Federal programs must encourage both public and private investment 
in efforts that will produce new information to improve soil, 
environmental and socioeconomic conditions and allow producers to 
continue to produce high quality, affordable food on a shrinking land 
base.
    We must also strive to improve the acceptance and implementation of 
technology in agriculture. Our competitive advantage in world markets 
will be maintained only through the continued support and encouragement 
of technological advancements. To that end, our partners in the biotech 
industry should be encouraged to cooperatively develop protocols for 
products as they come off patent to allow producers to access and 
implement cost effective practices on their operations.
Exports
    I think we can all agree that in today's global economy, our 
government needs to be a full-fledged partner in helping expand and 
enhance agricultural export opportunities. The Market Access Program of 
the existing farm bill works and should be retained.
    Agriculture's trade surplus was nearly $30 billion 2 years ago. 
It's forecast to be $24.5 billion this year. Agriculture is still one 
of the few sectors of the American economy to enjoy a trade surplus, 
and without it, the overall U.S. trade deficit would be even worse.
    The multi-year impact of the increased market development spending 
is equal to $35 in agricultural export gains for every additional $1 
expended. That's a 35:1 return on investment.
    The Market Access Program protects American jobs and increases farm 
income. Every billion dollars in U.S. farm exports supports about 8,400 
American jobs. Given that U.S. farm exports are forecast to be $131 
billion this year, more than a million Americans can trace their jobs 
to these exports, thanks in no small measure to MAP and related 
programs that have boosted U.S. agricultural exports.
    And finally, the Market Access Program is a great example of a 
successful public-private partnership. It is administered on a 
reimbursable cost-share basis, specifically targeting small businesses 
and farmer co-operatives. While government's an important partner in 
his effort, industry contributions are now pegged at more than 60% of 
total annual spending on market development and promotion, up from 
roughly 30% only 2 decades ago.
Conclusion
    I manage my farm with a focus on longevity and sustainability. We 
appreciate the partnership we have with the Federal Government and 
programs to ensure stability in our efforts to produce food, fiber and 
fuel. The 2012 Farm Bill provides new opportunities to further define 
that partnership and to continue to protect and ensure that Americans 
and consumers around the world have access to safe and affordable food.
    Thank you for the opportunity to share our thoughts and our 
operation with you today. Should you ever find yourself in Barton 
County, Kansas, please, by all means, stop by for a cup of coffee.

    The Chairman. Thank you.
    Mr. Vaughan, you may begin when you're ready.

 STATEMENT OF DEE VAUGHAN, CORN, COTTON, SORGHUM, SOYBEAN, AND 
                   WHEAT PRODUCER, DUMAS, TX

    Mr. Vaughan. Mr. Chairman, Members of the Committee, thank 
you for holding this hearing here today. My name is Dee Vaughan 
and I am a corn, cotton, sorghum, soybean and wheat producer 
from Dumas, Texas. I currently serve as President of the 
Southwest Council of Agribusiness, an organization comprised of 
17 farm groups, 30 lending institutions, and about 70 main 
street businesses in Texas, New Mexico, Oklahoma, Colorado, and 
also here in Kansas.
    I want to begin by thanking this Committee for working hard 
to develop a consensus farm bill this last fall that not only 
would have met the needs of all producers and all regions and 
all crops, but have done so in a way that would have saved over 
$23 billion for the taxpayers. I believe this year's farm bill 
process should build upon the excellent work that was done last 
fall.
    There is one particular aspect of your work that I want to 
especially thank you for, and that is your focus on price 
protection. If Washington is truly serious about saving 
taxpayer dollars and less government intervention, price-based 
protection in the farm bill is the way to go about it.
    Think about a farm bill that provides meaningful price 
protection relative to today's production costs and price 
situation that could still end up not costing the taxpayer a 
dime for this protection over the next 5 years.
    Conversely, if history is any guide, you can be sure that a 
farm bill built on price protection, if needed, will prove to 
be the cheapest of the alternatives that have been presented 
before you. In short, a price-based farm bill policy that only 
kicks in when it is absolutely necessary is the conservative, 
fiscally responsible, and market-oriented approach that we 
should be striving to achieve.
    It seems that much of the farm bill discussion has centered 
on revenue-based options, but there are concerns about this 
route. First, I think there has been enough bad PR about direct 
payments over the last few years that producers want to avoid 
receiving any kind of a payment unless it is absolutely 
necessary. I also think there is concern about the fact that no 
policy should be so rich that it drives up input costs and land 
costs, not to mention the criticism.
    Second, I think there is a big concern that revenue 
approaches cut off help to producers just when they need it the 
very most, when revenue really drops, mainly due to prolonged 
periods of low prices. That's exactly when producers need farm 
policy most, and that's exactly when revenue approaches offer 
the least protection.
    Third, while I agree that revenue does not exactly 
duplicate what crop insurance does, there is at least some 
crossover, especially in the minds of the public and especially 
in the minds of the critics of the farm bill and crop 
insurance. It is important to remember in this exercise that we 
must pass a good farm bill, but we must also be able to defend 
it later.
    In my view, what was so important about what you did last 
fall is that you ensured that even if a producer chose a 
revenue option, there would be price protection for that 
producer if the bottom fell out, price-wise. You also worked to 
protect crop insurance from harm, which is a top priority as 
applied by farmers from across the country, and I totally 
agree. Whatever you do, please do not harm crop insurance. 
Proposals to link conservation compliance and to impose a 
payment limit cap on crop insurance are thinly veiled attempts 
to kill insurance for farmers. No question about it.
    From my perspective, at least, the Supplemental Coverage 
Option included in your plan of last fall could serve very well 
as the revenue component of the farm bill and do so without the 
negatives that I've mentioned about the revenue options.
    In closing, I firmly believe that if you ask rank and file 
farmers, no matter the crop, no matter the region of the 
country, the vast majority of them would tell you that if they 
were writing the farm bill, they would ensure that there is 
real price protection and that crop insurance would not be 
harmed in the process, but improved.
    Maybe it's the West Texan in me, but I tend to think that 
the right answer is usually the plain one. Washington should 
keep it simple. We rely on crop insurance for what it does 
best: Protect against production risk. We need an equally 
effective policy that provides protection against low prices 
over a sustained period of time such as we experienced in the 
late 1990's and early 2000's. While shallow losses can be 
devastating if they're repetitive, the risk producers fear most 
is a drop in commodity prices to below cost of production that 
lasts for several years.
    Thank you for the opportunity to present my views on the 
2012 Farm Bill and I look forward to answering any questions.
    [The prepared statement of Mr. Vaughan follows:]

Prepared Statement of Dee Vaughan, Corn, Cotton, Sorghum, Soybean, and 
                       Wheat Producer, Dumas, TX
    Mr. Chairman, Ranking Member Peterson, Members of the Committee, 
thank you for holding this hearing, and the important work you are 
doing to craft a good farm bill.
    My name is Dee Vaughan and I farm just about 200 miles southwest of 
here near the town of Dumas, Texas. I grow all the major row crops that 
work well in the Texas Panhandle--chiefly corn, cotton, sorghum, wheat 
and soybeans. I have been fortunate in the past number of years to get 
to serve in a number of leadership positions in farm and commodity 
organizations--including serving as President of the National Corn 
Growers Association from 2003 to 2004.
    I currently serve as President of the Southwest Council of 
Agribusiness, an organization comprised of 17 farm groups, including 
producers of cotton, corn, wheat, grain sorghum, rice, peanuts and 
cattle; 30 lending institutions; and about 70 main street businesses in 
Texas, New Mexico, Oklahoma, Colorado, and here in Kansas.
    I want to begin by thanking this Committee--earnestly thanking 
you--for working so hard to develop a consensus farm bill last fall 
that not only would have met the needs of all producers, regions, and 
crops in this country but would have done so in a way that would have 
saved taxpayers $23 billion. I believe we as farmers can all be proud 
of the fact that our rural representatives and agricultural leaders in 
Washington were able to come together in this way--a real contrast to 
how it appears other areas are working (or not working) in our nation's 
government. In short, I believe this year's farm bill process should 
build upon the excellent work that you did last year.
    There is one particular aspect of your work that I want to 
especially thank you for and encourage you in, and that is your focus 
on price protection. Plain and simple, a collapse in commodity prices 
is what keeps me up at night, and that is the risk I think this farm 
bill should address. Happily, this approach is also the most cost 
efficient. If Washington is truly serious about saving taxpayer dollars 
and about less government intervention, price-based protection in a 
farm bill, as a compliment to crop insurance, is the way to do it.
    Think about the prospect of a farm bill that provides meaningful 
price protection relative to today's production costs and price 
situation that could still end up not costing taxpayers a dime over the 
next 5 years. If the only thing title I of the next farm bill provided 
producers was this kind of price protection, this no cost scenario is a 
real possibility. Conversely, if a price-based farm policy did cost 
money, if history is any guide, you can be sure that it will prove to 
be the cheapest of all the alternatives.
    Easy to understand, bankable price protection is not a unique 
concept to me or anyone else and it certainly is not an unproven one. 
But it does feel a bit novel amidst all the other complicated proposals 
that are floating around out there which I'd be surprised if more than 
a handful of people could actually explain to you if asked. But worse 
than being complicated, these ideas--which all center on a revenue 
guarantee based in part on a 5 year Olympic Average (OA) price--offer 
farmers no real price protection and we know from experience that that 
alone is a big problem.
    The SWCA, which is made up of the major producer organizations from 
five states as well as dozens of lenders, suppliers and processors, has 
made price protection a key priority. This organization is unique in 
that it brings a lot of diversity and experience to the table via the 
leaders from these regional organizations, many of whom have served as 
officers in national commodity organizations. This past Fall, our group 
propounded a priorities document which is attached to this testimony in 
its entirety. With respect to the price protection, it stated the 
following:

        ``The priority in redesigning a countercyclical policy should 
        be to protect against deep and persistent price declines. 
        Whether achieved through a countercyclical revenue policy or a 
        price-based policy, the policy must provide effective 
        protection across commodities, and be reliable and bankable to 
        the producer. The marketing loan for commodities should also be 
        maintained and rates raised where practicable in order to 
        reflect today's costs of production.''

    Of the systemic risks (those beyond the control of the farmer) 
which farmers face, prolonged periods of low prices would be most 
devastating to the economy and is most worrisome to SWCA members--
producers, lenders and agribusinesses alike. Production losses are 
being addressed well by crop insurance. Single year revenue losses are 
being addressed well by crop insurance. But if a series of events like 
a strengthened dollar, above average yield worldwide, and a slowdown of 
Asian economies struck, causing corn and sorghum prices to decline to 
$3.00, beans to $7.00, wheat to $4.00, rice to $11.00 and cotton to 
$.65, our current farm policy would be ineffective and rural economies 
would suffer.
    The SWCA does not, and I do not believe a 5 year Olympic Average of 
price or revenue as a target provides adequate protection in this 
situation either.
    A 5 year rolling average price-trigger can offer assurance in the 
first and second year of a price decline, but by the third year the 
protection is severely eroded. And, of course, our experience from 1997 
to 2006 would confirm that prices can remain below cost of production 
for multiple years.
    The current debate reminds me of the 1995/1996 timeframe when 
economists assured us all that we had hit a new plateau of prices and 
that growing world demand for food and fiber would keep prices high.
    In 1995, the season average price for corn hit $3.24--an all time 
high. But over the next 4 years, prices fell to $2.71 in 1996; to $2.43 
in 1997; to $1.94 in 1998; and to $1.82 in 1999--that is a 44% collapse 
in prices over 4 years that was absolutely devastating, and that I 
expect most of us up here today would not have survived had it not been 
for the ad hoc Market Loss Payments that was provided beginning in 
1998.
    How would have a 5 year Olympic Average price safety net have fared 
during these times? Well it would have peaked in 1998 at $2.55, but 
then trailed off over the next 4 years to $2.07 in 2001, and then $1.92 
in 2002 and 2003. That is not what I, or my banker, would have 
considered adequate price protection.
    In 2010, the season average price for corn hit $5.40--a new all 
time high. But what if we shed 44% over the next 4 years just as we did 
in the late 1990's? How will farmers fare with corn prices at $3.02. I 
can tell you for this farmer and the community of Dumas, Texas, the 
answer would be not well.
    The current 5 year Olympic Average for corn relevant to 2012 is 
$4.55, which sounds like an attractive safety net. But if that safety 
net is allowed to trail down over a couple years back to the mid $3.00 
range or lower, then it is no longer helpful, and I expect farmers 
would be seeking ad hoc assistance again.
    Now I can tell you I am thrilled prices are still strong in the 
2011 marketing year and 2012 planting season, and I am hopeful they 
remain this way--but I am not confident they will. So bottom line, I 
think building in more relevant protection while prices are high is 
good insurance should prices go south again, as history has shown they 
most likely will.
    If one defines conservatism, fiscal responsibility, and market 
orientation by the traditional measures of how much something costs and 
how often it intervenes, price-based farm policy that only kicks in 
when it is absolutely necessary is the conservative, fiscally 
responsible, and market-oriented approach.
    Regarding revenue program alternatives, specifically those targeted 
at ``shallow losses,'' I would note just a few concerns. First, I think 
there has been enough bad PR from Direct Payments that producers want 
to avoid receiving any payment unless it is absolutely necessary. I 
also think there is concern that no policy should be too rich so that 
it drives up input costs and land rents, in addition to the criticism. 
Second, I think there is a big concern that revenue approaches cut off 
help to producers just when they need it most: when revenue really 
drops, mainly due to a prolonged period of low prices. That's exactly 
when farmers need farm policy most and that's exactly when revenue 
approaches fold-up tent. Third, while I agree that revenue does not 
exactly duplicate what crop insurance does, there is at least some 
crossover and, in the minds of the public and especially the critics, 
any effort to say there is no duplication between the two will be 
regarded, however falsely, as merely parsing words. It is important to 
remember in this exercise that we must not just pass a farm bill but we 
must also one day defend it as well.
    In my view, what was so important about what you did last fall is 
that you ensured that even if a producer chose a revenue approach, 
there would be price protection for that producer if the bottom ever 
fell out. You also worked to protect crop insurance from harm, 
something that so many farmers across the country say is there absolute 
top priority.
    I want to add my voice to the chorus and say, whatever you do, 
please do nothing to harm crop insurance. Proposals to link 
conservation compliance and to impose a pay limit on crop insurance are 
thinly veiled attempts to kill insurance for farmers. Period.
    From my perspective, at least, the Supplemental Coverage Option 
included in your plan of last fall could serve very well as the revenue 
component of the farm bill and could do so without any of the negatives 
of the other revenue approaches that I just laid out.
    In closing, let me just say this: I firmly believe that if you 
asked rank and file farmers in the country, no matter what the crop or 
region of the country, nine out of ten of them would tell you that if 
they were writing the farm bill, they would ensure that there is real 
price protection because that is the one thing crop insurance is not 
designed to take care of, and that crop insurance should be not just 
not harmed, but improved upon.
    It may be the West Texan in me but I tend to think that the right 
answer is usually the plain one. Washington should keep it simple. We 
rely on crop insurance for what it does best, protect against 
production and in-season price risk. We need an equally effective 
policy that provides protection against low prices over a sustained 
period of time such as was experienced in the late 1990's through the 
mid-2000's. While shallow losses can be devastating if they are 
repetitive, the risk that producers fear most is a drop in commodity 
prices to below cost of production lasting for several years.
    Thank you for the opportunity to present my views on the 2012 Farm 
Bill. I will be pleased to answer any follow-up questions you may have.
                               Attachment
October 12, 2011

    Dear Member of Congress:

    The Southwest Council of Agribusiness (SWCA) is a coalition of more 
than 100 businesses standing with producer organizations from Texas, 
New Mexico, Oklahoma, Kansas and Colorado to promote agriculture and 
policies that support this most important and fundamental of 
industries.
    Understanding that our nation's current fiscal situation, and the 
super committee process designed to address it, may force an early 
reconsideration of the policies of the 2008 Farm Bill, the SWCA offers 
the following for your consideration.
Budget Issues
    The members of the SWCA believe that farm policy designed to 
support a strong and dynamic U.S. agriculture sector is vital to our 
nation's economy and security interests. We also believe the current 
mix of policies has proven a great success by reducing government 
expenditures while providing a foundation for our nation's farmers to 
diversify and create and grow markets, commerce, and jobs to emerge as 
one of the few bright spots in the current dismal economy.
    Accordingly, as Congress considers any revisions to these important 
policies, we would ask that you carefully consider three important 
overarching facts along with our specific recommendations:

        First, stable agricultural policy makes for a strong 
        agricultural economy. In 2000, a time of great instability and 
        uncertainty, the U.S. value of farm sector production had 
        stagnated at $218.4 billion with little optimism for a 
        recovery. However, since the 2000 crop insurance bill, the 2002 
        Farm Bill, and subsequent improvements, farm sector production 
        value and other measures have shown steady growth, reaching a 
        net record $411.5 billion in 2011. Total net value added to the 
        economy from agriculture is also forecast to reach a new high 
        of $157 billion in 2011. As Washington seeks to provide greater 
        economic certainty through reform of the tax code, regulatory 
        relief, and other measures in order to fix all that is broken 
        in the economy, injecting uncertainty in the one sector of the 
        economy that is not broken seems especially imprudent.

        Second, stable agricultural policy costs taxpayers less. From 
        1999 to 2001, the government spent an average of $22.4 billion 
        to shore up the floundering agricultural sector, which had been 
        injured by, among other things, lost trade, a strong dollar and 
        strong worldwide crop production. Over the last decade, this 
        has changed. For example, from 2009 to 2011, annual spending 
        will average $11.6 billion--roughly \1/2\ of the amount being 
        spent 10 years earlier. When markets turn again, it will be 
        more cost effective to have stable and predictable policy in 
        place to address the losses rather than work on an ad hoc basis 
        to provide costly disaster assistance.

        Third, our growing world needs a strong and dynamic U.S. 
        agricultural sector. The global population is expected to rise 
        from seven billion to nine billion people by 2050, and so we 
        must become more productive on the world's limited arable land. 
        U.S. agriculture today leads the way in this regard, getting 
        more out of every acre of soil than any other nation, and doing 
        so in a sustainable way. We must not abandon this model.

    Because of these critical facts, we strongly oppose cutting the 
agricultural budget beyond the level that would otherwise be cut under 
sequestration, which essentially mirrors the level of cuts recommended 
by the bipartisan Simpson-Bowles Commission. Agriculture has 
consistently come in under budget over the past decade, and has made 
significant contributions to deficit reduction both in its mandatory 
policies (e.g., the 2008 Farm Bill and the 2010 crop insurance 
negotiation) and in discretionary funding accounts. We also strongly 
believe that the policies to achieve these savings should be developed 
by the House and Senate Agriculture Committees.
    While the SWCA considers all areas of the farm bill important, and 
specifically supports areas such as research funding and the FSA 
guaranteed loan programs, we are focusing our comments on the principal 
funding areas most likely to be affected should the super committee 
process address farm policy.
Federal Crop Insurance and Title I Farm Policy
    Since our nation's very beginning, we have had Federal policies in 
place to promote strong U.S. agricultural production. These policies 
have helped the U.S. agricultural sector become the most productive, 
dynamic, conservation-minded and diverse agricultural sector in the 
history of the world. Below are some specific policy recommendations we 
provide to ensure we do not break with this important tradition that is 
also a cornerstone of our economy and security.

    1. Any countercyclical element of farm policy that would replace 
        the current countercyclical program, direct payments, SURE, and 
        ACRE, in whole or in part, must effectively work for all staple 
        commodities and producer