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THE ECONOMIC IMPACT OF ASIAN

SOYBEAN RUST ON THE U.S. FARM

SECTOR

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON CONSERVATION, CREDIT,

RURAL DEVELOPMENT, AND RESEARCH

AND THE

SUBCOMMITTEE ON GENERAL FARM COMMODITIES

AND RISK MANAGEMENT

OF THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

APRIL 27, 2005

Serial No. 109–6

(

Printed for the use of the Committee on Agriculture

www.agriculture.house.gov

COMMITTEE ON AGRICULTURE

BOB GOODLATTE, Virginia, Chairman

JOHN A. BOEHNER, Ohio,

Vice Chairman

RICHARD W. POMBO, California

TERRY EVERETT, Alabama

FRANK D. LUCAS, Oklahoma

JERRY MORAN, Kansas

WILLIAM L. JENKINS, Tennessee

GIL GUTKNECHT, Minnesota

ROBIN HAYES, North Carolina

TIMOTHY V. JOHNSON, Illinois

TOM OSBORNE, Nebraska

MIKE PENCE, Indiana

SAM GRAVES, Missouri

JO BONNER, Alabama

MIKE ROGERS, Alabama

STEVE KING, Iowa

MARILYN N. MUSGRAVE, Colorado

DEVIN NUNES, California

RANDY NEUGEBAUER, Texas

CHARLES W. BOUSTANY, JR., Louisiana

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

JOHN R. ‘‘RANDY’’ KUHL, JR., New York

VIRGINIA FOXX, North Carolina

K. MICHAEL CONAWAY, Texas

JEFF FORTENBERRY, Nebraska

COLLIN C. PETERSON, Minnesota,

Ranking Minority Member

TIM HOLDEN, Pennsylvania

MIKE MCINTYRE, North Carolina

BOB ETHERIDGE, North Carolina

JOE BACA, California

ED CASE, Hawaii

DENNIS A. CARDOZA, California

DAVID SCOTT, Georgia

JIM MARSHALL, Georgia

STEPHANIE HERSETH, South Dakota

G.K. BUTTERFIELD, North Carolina

HENRY CUELLAR, Texas

CHARLIE MELANCON, Louisiana

JIM COSTA, California

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

EARL POMEROY, North Dakota

LEONARD L. BOSWELL, Iowa

RICK LARSEN, Washington

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

PROFESSIONAL STAFF

WILLIAM E. O’CONNER, JR., Staff Director

KEVIN J. KRAMP, Chief Counsel

JOHN HAUGEN, Communications Director

ROBERT L. LAREW, Minority Staff Director

(II)

SUBCOMMITTEE ON CONSERVATION, CREDIT, RURAL DEVELOPMENT, AND RESEARCH

FRANK D. LUCAS, Oklahoma, Chairman

JERRY MORAN, Kansas

TOM OSBORNE, Nebraska,

Vice Chairman

SAM GRAVES, Missouri

MIKE ROGERS, Alabama

STEVE KING, Iowa

CHARLES W. BOUSTANY, JR., Louisiana

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

JEFF FORTENBERRY, Nebraska

TIM HOLDEN, Pennsylvania,

Ranking Minority Member

HENRY CUELLAR, Texas

MIKE MCINTYRE, North Carolina

BOB ETHERIDGE, North Carolina

ED CASE, Hawaii

LINCOLN DAVIS, Tennessee

STEPHANIE HERSETH, South Dakota

G.K. BUTTERFIELD, North Carolina

RYAN E. WESTON, Subcommittee Staff Director

SUBCOMMITTEE ON GENERAL FARM COMMODITIES AND RISK MANAGEMENT

JERRY MORAN, Kansas, Chairman

JOHN A. BOEHNER, Ohio,

TERRY EVERETT, Alabama

FRANK D. LUCAS, Oklahoma

WILLIAM L. JENKINS, Tennessee

TIMOTHY V. JOHNSON, Illinois

MIKE PENCE, Indiana

SAM GRAVES, Missouri

JO BONNER, Alabama

STEVE KING, Iowa

MARILYN N. MUSGRAVE, Colorado

RANDY NEUGEBAUER, Texas

CHARLES W. BOUSTANY, JR., Louisiana

K. MICHAEL CONWAY, Texas

JEFF FORTENBERRY, Nebraska

BOB ETHERIDGE, North Carolina,

Ranking Minority Member

JOHN T. SALAZAR, Colorado

JIM MARSHALL, Georgia

STEPHANIE HERSETH, South Dakota

G.K. BUTTERFIELD, North Carolina

CHARLIE MELANCON, Louisiana

JOHN BARROW, Georgia

EARL POMEROY, North Dakota

LEONARD L. BOSWELL, Iowa

RICK LARSEN, Washington

BEN CHANDLER, Kentucky

DAVID SCOTT, Georgia

JIM COSTA, California

TYLER WEGMEYER, Subcommittee Staff Director

(III)

(V)

C O N T E N T S

Page

Butterfield, Hon. G.K., a Representative in Congress from the State of North

Carolina, prepared statement ............................................................................. 4

Etheridge, Hon. Bob, a Representative in Congress from the State of North

Carolina, opening statement ............................................................................... 3

Holden, Hon. Tim, a Representative in Congress from the Commonwealth

of Pennsylvania, prepared statement ................................................................. 4

Lucas, Hon. Frank D., a Representative in Congress from the State of Oklahoma, opening statement .................................................................................... 1

Moran, Hon. Jerry, a Representative in Congress from the State of Kansas,

opening statement ................................................................................................ 2

Peterson, Hon. Collin C., a Representative in Congress from the State of

Minnesota, prepared statement .......................................................................... 4

WITNESSES

Bredehoeft, Neal, president, American Soybean Association, Washington, DC . 22

Prepared statement .......................................................................................... 83

Dlugosz, Steve, chairman, Independent Certified Crop Advisors, Indianapolis,

IN ........................................................................................................................... 26

Prepared statement .......................................................................................... 49

Glauber, Joseph, Deputy Chief Economist, U.S. Department of Agriculture ..... 6

Prepared statement .......................................................................................... 70

Jen, Joseph J., Under Secretary, Research, Education, and Economics, U.S.

Department of Agriculture .................................................................................. 5

Prepared statement .......................................................................................... 39

Jones, Jim, Director, Office of Pesticide Programs, U.S. Environmental Protection Agency ...................................................................................................... 8

Prepared statement .......................................................................................... 87

Thrift, Jim, vice president, regulatory policy and corporate relations, Agricultural Retailers Association, Washington, DC .................................................... 29

Prepared statement .......................................................................................... 55

Vroom, Jay, president, CropLife America, Washington, DC ................................ 24

Prepared statement .......................................................................................... 58

SUBMITTED MATERIAL

The Fertilizer Institute, submitted statement ...................................................... 94

(1)

REVIEW THE ECONOMIC IMPACT OF ASIAN

SOYBEAN RUST ON THE U.S. FARM SECTOR

WEDNESDAY, APRIL 27, 2005

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON

CONSERVATION, CREDIT, RURAL DEVELOPMENT, AND

RESEARCH, JOINT WITH THE SUBCOMMITTEE ON GENERAL

FARM COMMODITIES AND RISK MANAGEMENT, COMMITTEE ON

AGRICULTURE

Washington, DC.

The subcommittees met, pursuant to call, at 11:10 a.m., in room

1300 of the Longworth House Office Building, Hon. Frank D. Lucas

(chairman of the Subcommittee on Conservation, Credit, Rural Development, and Research) presiding.

Members present: Representatives Moran (chairman, Subcommittee on General Farm Commodities and Risk Management),

Jenkins, Conaway, Goodlatte [ex officio], Holden, Etheridge,

Herseth, Butterfield, Melancon, Pomeroy, and Peterson [ex officio].

Staff present: Brent Gattis, John Goldberg, Elizabeth Parker,

Ryan Weston, Tyler Wegmeyer, Callista Gingrich, clerk; Andy

Baker, John Riley, and Anne Simmons.

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

Mr. LUCAS. This hearing of the Subcommittee on Conservation,

Credit, Rural Development, and Research and the Subcommittee

on General Farm Commodities and Risk Management to review the

economic impact on Asian soybean rust on the U.S. farm sector will

come to order.

I do first want to express my appreciation to the panelists and

ask your indulgence and tolerance. We have just come from the

floor of the House and the nature of the body that we are a part

of, the floor business of a greatest importance. And also to express

my appreciation to the ranking member of the Agriculture Committee, Mr. Peterson for being here with us today.

Today’s joint subcommittee hearing on Asian soybean rust, it is

not often that we call a joint hearing and even rarer that we do

so because of a fungus. However, it is not unusual for American

farmers to deal with adverse growing conditions. U.S. producers

are currently trying to sort their way through a myriad of information to learn how to best deal with soybean rust.

Asian soybean rust is not a new fungus, it was first known in

Japan in the early 1900’s. It has made a steady march across the

globe. Many Asian countries have been dealing with soybean rust

2

for years, while those in South America have only been battling it

for the past couple of years.

As we have prepared for this hearing during the last few weeks,

it is become clear that there are numerous sources of information

regarding soybean rust. We want to get the best information out

for our producers as quickly as we possibly can. It is important to

note that soybean rust, the thing about it is that you can’t stop it.

You can only hope to contain it. Now that it is here, U.S. farmers

like those the world over must deal with it. We are not going to

have a hard frost in Florida that will kill the soybean rust and the

wintering kudzu.

Our primary purpose for this hearing is to give our producers

clear guidelines regarding how to combat rust in a timely and effective manner. We also want to make sure that the USDA’s instructions for complying to the farm bill’s best management practices

are met. And I think that we will see that the weather patterns

and the timeliness with which producers react, the soybean rust

outbreaks will become the major factor in how greatly U.S. soybean

production could be affected by rust. The Brazilians have coexisted

fairly well with soybean rust and even increased production

through the proper use of fungicide. We should be able to learn

more from their battles about how best to minimize the affects of

rust.

Members will have the chance to ask what fungicides work best

and how they should be applied, what type of input costs to expect.

They will also see testimony that is trying to determine how much

fungicide is needed throughout the United States is a very tricky

question and we have a great panel of witnesses today and I look

forward to hearing them.

And I now turn to my colleague, the subcommittee chairman for

General Farm Commodities for his opening statement. Mr. Moran.

OPENING STATEMENT OF HON. JERRY MORAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS

Mr. MORAN. Mr. Chairman, thank you very much for those remarks and thank you for working with our subcommittee to have

hold this hearing today. I think this is a significant issue that we

base in all of agriculture and has consequences for our farmers

across the country. I have known Kansans who raise about 2.5 million acres of soybeans each year are having anxiety about what the

consequences are of soybean rust and I am pleased that we will

hear from USDA and the private sector today to know what our response has been in this country to the discovery of soybean rust in

Louisiana some months ago now.

I was in Louisiana last year and met with the Louisiana State

commissioner of agriculture, as well as FSA and RMA officials. One

of my concerns from the very beginning is that we cooperate as the

Department of Agriculture to make certain that our farmers have

the necessary information so that should rust, Asian rust be discovered, they have the ability to respond and know that FSA is there

in regard to the financing of farming operations, that risk management is there in regard to the crop insurance issues, that EPA and

other entities involved in the use of fungicides would provide the

necessary information that those who perform research in the agriVerDate 11-SEP-98 11:34 Jun 02, 2005 Jkt 021219 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\HEARINGS.109\109-6 HAGRI PsN: HAGRI
3

culture sector are there with the right answers for farmers across

the country.

I have been pleased to date to hear reports about USDA’s cooperation and their working together to see that a united front is

provided for our agriculture sector. I also would remind the members of the committee that next Wednesday, May 4, the subcommittee on General Farm Commodities and Risk Management will conduct a hearing with RMA officials at which I would expect that the

crop insurance aspects of this could be raised with RMA at that

time.

I thank the chairman for working with me to cooperate to see

that this hearing is held today and I appreciate the ranking members, Mr. Holden and Mr. Etheridge for their cooperation as well.

Thank you, Mr. Chairman.

Mr. LUCAS. Thank you, Mr. Chairman.

And the chair now turns to the ranking member of the subcommittee on General Farm Commodities and Risk Management,

Mr. Etheridge for any opening statement he might have.

OPENING STATEMENT OF HON. BOB ETHERIDGE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH

CAROLINA

Mr. ETHERIDGE. Thank you, Mr. Chairman and both you and

Chairman Moran for holding the hearing and doing it jointly. I

want to thank both of you. Asian soybean rust poses a great threat

to our Nation’s soybean production and it is appropriate, I think

this subcommittee has a joint hearing today as we plan our defense

on an issue that could have a significant impact on soybean production in America. As we do this, we need to be remindful as we work

on budget issues that we not cut the R&D money, the research

money that would fund and help deal with these issues and I hope

we can talk about that today as well.

North Carolina ranks only 17th in soybean production, but my

district farmers grow more soybeans than any other crop. The district ranks only fourth in our State soybean production. However,

if we look at North Carolina, it is one of the largest consumers of

soybeans and soybean meal in the whole Nation. So our livestock

industry is a tremendous soybean consumer and those farmers are

focused on anything that impacts soybean production and consequently the price but our consumers certainly our focused because it will have a significant impact on the cost of food.

So I believe that we are looking at, in this whole issue of soybean

rust. And unfortunately, I have a markup going on at the very

same time in the Homeland Security Committee so I will miss a

good part of the hearing, but I can assure you I plan to read and

look at the material and hope I get back in time to ask some of

the questions. So I appreciate the witnesses taking your time to be

here today. I trust that my colleagues will do the adequate job

which I know they will in asking the appropriate questions to get

this on the record.

Thank you, Mr. Chairman.

Mr. LUCAS. Thank you.

And the Chair wishes to thank the gentleman for his comments

and to note also that in addition to the ranking member, we have

4

the chairman of the full committee here today. Mr. Goodlatte,

thank you for joining us, sir, and I think that just reflects the importance of this issue.

With that, the Chair would now like to request that other members submit their opening statements for the record so that the witnesses may begin their testimony and to ensure that we have

ample time for questions.

[The prepared statements of Members follows:]

PREPARED STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF MINNESOTA

I would like to thank Chairmen Lucas and Moran as well as their ranking members, Congressmen Holden and Etheridge for holding this important hearing today.

I am hopeful that this hearing as well as actions by growers, producer groups and

government entities at the State and Federal level will continue to educate and motivate soybean farmers to stay on top of this issue.

Given the importance of the soybean industry in Minnesota as well as other parts

of the country, I would hope that the Federal Government would make surveillance

and education efforts a priority. The impacts of Asian rust on soybean production

could potentially impact the bottom lines of not only soybean farmers, but livestock

producers and the soybean crushing industry.

Education and outreach efforts continue to be major tools in helping producers to

deal with this disease. There is a lot information out there on Web sites and in

media outlets, not all of it may be accurate. We owe it to our producers to ensure

that USDA, EPA, our land grant and other universities as well as State Departments of Agriculture have adequate resources to help producers determine fact from

fiction and take the best course of action on their farms.

I also want to thank the witnesses from the crop protection side of this issue who

have joined us today. The crop protection companies and those who will advise

farmers and help apply those products are going to play a key role in this fight.

PREPARED STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN CONGRESS FROM

THE COMMONWEALTH OF PENNSYLVANIA

I would like to thank Chairman Lucas. Chairman Moran, and Ranking Member

Etheridge for holding this hearing on Asian Soybean Rust.

I am especially concerned about this issue because my home State of Pennsylvania is in the soybean growing region of the United States. At 41 bushels per acre

in 2003, the State had some of the Nations best yields, tying for second place in

the country. The biggest soybean growing areas in Pennsylvania are in the central,

south central and southeastern portions of the State, including my district.

I am alarmed about the effect soybean rust could have on our farm economy. Unfortunately, there is not much we can do to completely erase Asian Soybean Rust

from our fields.

However, I hope this hearing will help us to look at options that may be available

in case of an outbreak of soybean rust. I am very interested to hear the steps USDA

and others are taking to aid our farmers in becoming more educated about soybean

rust. I also hope to hear about what we can do to help our farmers prevent soybean

rust from ruining their crops in the future.

I look forward to hearing from our witnesses.

PREPARED STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF NORTH CAROLINA

Mr. Chairman, thank you for holding this important hearing.

Mr. Chairman, in these difficult times, soybeans have sustained many farmers

across the Nation. As soybeans become a critical part of biodiesel fuel, food aid, animal feed, and other critical items, the price has risen, and farmers have produced

accordingly.

Acreage has expanded in recent years, and has profoundly expanded in parts of

the country such as my home State of North Carolina. Rust, one of the most insidious invasive species to impact farming in the United States cannot be easily contained because it is airborne and can easily infect crops great distances away.

I thank the chairman for holding this important hearing and will strongly support

any action taken by this committee to control the spread of soybean rust in the

United States.

5

Mr. LUCAS. Now we would like to invite already at our table the

first panel, Dr. Joseph J. Jen, Under Secretary for Research, Education, Economics, USDA, Washington, DC. He is accompanied by

Dr. Matt Royer, Senior Program Analyst for APHIS Pest Detection

and Management Programs, and Mr. Burleson Smith, USDA Special Assistant for Pest Management Policy. We also have Dr. Joseph Glauber, Deputy Chief Economist, USDA here in Washington,

DC, as well as Mr. Jim Jones, Director of the Office of Pesticide

Programs, U.S. Environmental Protection Agency here in the

USDA.

And the Chair would now like to recognize Dr. Jen for his comments.

STATEMENT OF JOSEPH J. JEN, UNDER SECRETARY, RESEARCH, EDUCATION, AND ECONOMISTS, U.S. DEPARTMENT

OF AGRICULTURE

Mr. JEN. Mr. Chairman and members of the subcommittees, it is

my pleasure to appear before you to discuss the issue of soybean

rust and to represent the Research, Education, and Economics mission area agenccies of the USDA.

The REE agencies are at the center of the research system supporting the food and agriculture sector. They have a proud history

over many decades of finding solutions to the challenges confronting farmers, ranchers and others involved in agriculture, resulting

in a high return on the Federal investment to our Nation which enjoys a plentiful, affordable, and safe food supply. This remarkable

history of success continues today yielding new knowledge, technologies, statistics, and analysis for effectively addressing today’s

problems and building the scientific and technological foundation

for addressing tomorrow’s problems and opportunities.

A most notable example of addressing today’s problems relates to

the recent arrival of soybean rust on our shores. For some time, scientists have been saying that this plantdisease would inevitably arrive in the United States, carried by winds from South America

where the disease has been residing for several years.

REE agencies, their partners in other USDA agencies, the research and scientific community, State departments of agriculture,

and soybean industry organizations have been preparing for this

anticipated event that became a reality last November in Louisiana. There have been 29 confirmed cases in nine States in 2004,

and a few cases of kudzu in Florida so far in 2005.

Effective management and control of soybean rust relies on early

detetion, correct identification, and proper and timely application of

fungicides. Starting in 1998, REE agencies have played a critical

leadership role with the ultimate goal of providing producers with

effective disease management options.

For example, ARS scientists have developed a real time rapid detection test that has been adopted by APHIS. It will provide a

quick, easy, and accurate means to detect soybean rust as part of

a national surveillance system. Over 20,000 soybean lines from the

USDA Soybean Germplasm Collection at Urbana, Illinois have

been evaluated in preliminary screening, none of which exhibits

broad spectrum resistance. Among those soybean lines, 800 commercial quality lines are under further study in intermediate trials.

6

CSREES has been at the forefront of training first detectors. In

June 2004, a regional soybean rust teleconference attracted nearly

1,000 participants who grow or service 9 million acres of soybeans.

CSREES has also been instrumental in establishing a National

Plant Diagnostic Network of strategically located university-based

laboratories that support AHIS laboratories facilitating rapid and

accurate detection. Additionally, through CSREES support of system extension grants, Cooperateive Extension continues to play a

vital role in getting the word out to farmers and other stakeholders

in our soybean producing States.

In September 2004, ERS published an article on the economic

risks of soybean rust in the United States in its publication, Amber

Waves. The article indicates that the economic effects of the pathogen’s entry into the United States could vary considerably depending on growing conditions, the severity and threat of the disease,

and producers’ responses. This analysis presented to policy makers

and the soybean industry was information to make more informed

decisions in responding to the detection of soybean rust in 2004.

Our agency will continue in aggressive and comprehensive soybean rust research and education strategy. The attached addendum

provides more detailed information on REE activities to combat

soybean rust. I look forward to discussing this issue further with

the members of the subcommittees.

Thank you.

[The prepared statement of Mr. Jen appears at the conclusion of

the hearing.]

Mr. LUCAS. Thank you, Dr. Jen.

Dr. Glauber.

STATEMENT OF JOSEPH GLAUBER, DEPUTY CHIEF

ECONOMIST, U.S. DEPARTMENT OF AGRICULTURE

Mr. GLAUBER. Mr. Chairman and members of the subcommittee,

thank you for the opportunity to be at today’s hearing on soybean

rust and its implications for U.S. agriculture.

As many of you are aware, on March 15, Secretary Johanns unveiled USDA’s interactive soybean rust Web site as part of a national soybean rust plant disease surveillance and monitoring network. The purpose of this Web site is to help ensure farmers and

producers have easy access to the best information and guidance on

soybean rust.

Since Asian soybean rust was first discovered in the continental

U.S. in November of last year, U.S. soybean futures markets have

taken a wait and see attitude. While future markets have shown

increased volatility in recent months, most of this volatility has

been in the 2004 crop contracts and less in the new crop contracts

and can be largely attributed to market expectations concerning

Brazil and China, not soybean rust in the United States. This

shouldn’t be surprising. It is early in the soybean growing season

and to date observations indicate that soybean rust is confined to

isolated areas of over wintering kudzu in central Florida.

As the growing season unfolds, however, much of the market’s

focus will be on the monitoring of the hundreds of soybean sentinel

plots throughout the soybean growing regions in the U.S. market

reactions will largely reflect the extent and severity of the disease.

7

On March 30, USDA published its annual prospective plantings report. For the Nation as a whole, soybean producers intend to plant

73.9 million acres in soybeans in 2005, down 1.3 million acres from

last year’s record high levels. This decline was less than many in

the trade had expected and reflects changes in both economic conditions, as well as the threat of soybean rust. The largest percentage decline from 2004 levels were in States where soybean rust had

been detected in 2004, Florida, Louisiana, Alabama, Georgia, and

South Carolina.

The survey also showed that the awareness of soybean rust was

high, nearly 90 percent of the farms intending to plant soybeans

were aware of soybean rust, an indication that the vast majority

of soybean farms are prepared to combat rust if necessary. Of these

farms, 5.4 percent reported that because of soybean rust, they

would reduce the number of soybean acres planted in 2005. Again,

most of these farms were located in the areas where soybean rust

had been detected last fall.

Based on Brazil’s experience, we know that where the disease is

found, producers can and will manage the disease. Average costs

have been estimated at $25 to $30 per acre. Put this in perspective

for a farmer with an expected soybean yield of 50 bushels per acre,

this adds roughly 50 to 60 cents per bushel to their cost. However,

for someone with an average yield of only 30 bushels per acre, the

added per bushel cost could top $1. For some producers, particularly those producers in low yielding regions, these costs may force

them to seek more profitable cropping alternatives.

Crop insurance can provide protection producers. Soybean rust is

considered a covered peril under the crop insurance policy. However, producers must follow good farming practices. USDA’s risk

management agency encourages affected producers to seek and follow recommendations of agricultural experts such as extension

agents and certified crop consultants to control soybean rust. RMA

also recommends that insured producers document the date of discovery of the disease, any recommendations received from agricultural experts, and actions taken regarding the application of appropriate control measures.

Lastly, I note that while participation in th crop insurance program is high in most parts of the country, many soybean producers

are insured at minimal coverage levels, particularly in those areas

that currently face the highest risk of soybean rust. For example,

in 2004, 89 percent of planted acres in Louisiana were enrolled in

the crop insurance program; however, more than two-thirds of this

acreage was enrolled at the CAT level. This would suggest that

many of these producers could suffer significant losses but still not

meet the deductible on their insurance policy. I might note that

that is 2004 data. We do not yet have sign up data for 2005.

That concludes my testimony. I look forward to answering your

questions.

[The prepared statement of Mr. Glauber appears at the conclusion of the hearing.]

Mr. LUCAS. Thank you, Doctor.

The Chair now turns to Mr. Jones.

8

STATEMENT OF JIM JONES, DIRECTOR OF PESTICIDE PROGRAMS, OFFICE OF PREVENTION, PESTICIDES AND TOXIC

SUBSTANCES, U.S. ENVIRONMENTAL PROTECTION AGENCY

Mr. JONES. Good morning, Chairman Lucas and Chairman

Moran, and members of the subcommittee. I welcome the opportunity to talk to you this morning about EPA’s efforts to prepare

for and minimize the potential impact of soybean rust for U.S. soybean producers.

EPA is responsible for evaluating and registering pesticides so

that effective means of pest control are available which meet the

Federal Insecticide, Fungicide, and Rodenticide Act and the Federal Food, Drug, and Cosmetic Act Safety Standards.

In attempting to make these determinations, EPA requires literally dozens of studies to evaluate a pesticide’s potential impact

on public health and the environment. In addition, EPA establishes

tolerances for pesticide residues on food and feed. Known throughout most of the rest of the world as maximum residue limits or

MRL’s, tolerances are the legal limit of a pesticide on a food item.

The pesticide registration and tolerance setting process typically

takes about 21⁄2 years for a new active ingredient and a little over

1 year for registering a new food use to a previously registered active ingredient. Some pest situations, however, won’t wait that

long. Therefore, Congress has authorized an emergency exemption

process outlined in section 18 of FIFRA. Under this provision, other

Federal agencies or an authorized State official may request that

EPA allow growers the use of an unregistered active ingredient or

an additional use of a registered pesticide to respond to emergency

conditions. EPA works very hard to evaluate emergency exemption

requests within 50 days or perhaps more importantly before the

emergency conditions actually exist.

Underpinning both full registrations and emergency exemptions

is our rigorous assessment of the potential risks imposed by using

pesticide products. Before an emergency exemption can be granted,

EPA must conduct risk assessments for dietary exposure, occupational exposure, and environmental impacts.

In a typical year, EPA receives approximately 500 emergency exemption requests from State and Federal agencies. Virtually all of

these requests involve the use of a single pesticide active ingredient on a particular crop, although there are often multiple States

involved.

Soybean rust was first brought to EPA’s attention in 2002 by our

colleagues at USDA. Due to the dearth of pesticides registered in

the United States in the time and the likelihood this disease could

have potentially devastating effects on U.S. soybean producers, we

immediately began working with the USDA, our State partners,

pesticide manufacturers, and soybean producers to change that situation.

Due to the potential magnitude of a possible soybean rust infestation, EPA became convinced of the wisdom of authorizing multiple active ingredients to control soybean rust. Working with the

USDA, soybean producers, manufacturers, and the States, we identified products for which either full registration or section 18 emergency exemptions were feasible.

9

By the time soybean rust first appeared in the United States in

November of 2004, EPA had already approved section 18 exemptions for three active ingredients used in six unused products in 25

States. Today, just 5 months later, there are nine active ingredients approved for use in soybeans to control rust, developing 19 different in use products in 32 States. Four of these nine active ingredients are registered for use in soybeans and five have been authorized under our emergency exemption program.

Recently, EPA has received additional emergency exemption requests involving five active ingredients that aren’t currently registered for any use in the United States. Because these are chemicals that EPA has not previously reviewed for any other use, EPA

must be creative in evaluating the safety of these products and the

time needed for this use season. We are already in touch with our

colleagues and pesticide regulatory authorities around the world to

determine if EPA can utilize their assessments in making our safety determination.

In closing, I would like to say that EPA has worked hard over

the past few years to ensure that there are an adequate variety

and supply of pesticide products for growers to control soybean

rust. We are driven to provide these registrations in a timely manner because we understand it is important to have safe and effective pesticide products available. We look forward to continued collaboration with Congress, our Federal, State, and private sector

partners to ensure the impact of soybean rust is minimized for the

food supply, the economy, and human health in the environment.

Thank you.

[The prepared statement of Mr. Jones appears at the conclusion

of the hearing.]

Mr. LUCAS. Thank you, Mr. Jones.

Dr. Glauber, do you think that the soybean markets have enough

access to timely and reliable information to prevent unnecessary,

some might describe large speculative swings, whatever since this

information about rust outbreaks as they occur certainly will have

an affect on prices and how the markets will react?

Mr. GLAUBER. I do. I think that like any new thing, the market

is going to have to sort through the information that it is receiving.

The thing that is striking, most striking I think is how much information there is available right now on the Web site. One can go

up on a daily basis and get forecasts. North Carolina State, for example, puts out forecasts on potential movements of spores on a

daily basis. And I think as again as the market follows these sentinel plots and the reporting on those, the scouting reports, you will

see the market begin to try to synthesize that information just like

it does any weather market I might add.

And so I do think the information is actually quite good and the

market will be trying to assess this. But again, we are still very,

very early in this and so as this emerges, we will get a little better

feel for that.

Mr. LUCAS. Mr. Jones, I have asked this question primarily of

you and perhaps anyone else on the panel who would like to touch

on it. Are the fungicides used to control rust in other countries basically the same that U.S. producers have access to?

10

Mr. JONES. A number of the products that are available now in

the United States through our registration or section 18 Program

are products that have been available in Brazil in particular, however, there are a couple of products that were used in Brazil over

the last few years that have not been authorized in the United

States.

Mr. LUCAS. Because that has always been one of the classic comments from my constituents back home was of this issue or other

issues about how the battle to fight these kind of things differs

from around the world. You mentioned the application approval

process on the fungicides. Have the most recent applications for

soybean rust treatments been approved as far as you know, Mr.

Jones?

Mr. JONES. If you are referring to, there are a group of 5 active

ingredients that are currently not registered at all in the United

States that came to EPA on March 30, that group. They have not

been and as I mentioned in my testimony, we are actively working

with colleagues around the world to see if their safety assessments

can be used by the EPA in making our determinations here.

Mr. LUCAS. The Chair now turns to Mr. Pomeroy for any questions he might have.

Mr. POMEROY. I would like to ask a question of Dr. Jen.

Doctor, it is very nice to see you again and I appreciate your

leadership, ongoing leadership in ARS. You note in your testimony

that you were at the center really of the effort to proactively and

preemptively respond to this crisis including establishing a line of

first attention and that you will continue an aggressive and comprehensive soybean rust research and education strategy. That is

precisely within the strike zone of what we would hope you would

be doing within the ARS, yet I have been very alarmed at the

budget cuts the administration has recommended that would impact your capacity, to cite one place, Fargo, ND, a site you and I

visited summer before last, I think it is a $3 million hit to that one

center alone.

Now we don’t have a Soybean Rust Research Program under way

there, although we have a number of other important projects that

would be severely disrupted if Congress would go along with that

recommendation. I am wondering whether you anticipate the need

to reduce the resources you are applying to the soybean rust problem in light of the budget cuts advanced by the Office of Management and Budget in the administration.

Mr. JEN. It is nice to see you again as well, Congressman, too

in that.

As you know, the President’s budget in the big picture is trying

to reduce the Federal deficit. USDA is part of that big picture and

research is part of the USDA’s big pictures. As far as we are able

to, I think dealing with soybean rust, the mission area’s budget actually has requested increases in the 2006 budget. In fact, from

2004 to 2005, the research dealing with soybean rust has been doubled in the RS budget. In 2006, we have requested more. As to

overall research budget, there is a small leeway for us to switch

parties from year to year in doing some of that.

11

Fundamentally, I think our crops research programs will be affected by a very small cut in the research budget really. Actually

compared to the other agencies, we were much better off, sir.

Mr. POMEROY. I am pleased to hear that although I—and I understand, you do not have full freedom of speech might I say as a

scientist when it comes to opining on the wisdom of cutting agricultural research. To me, it looks like you are eating your seed core.

Not you but the USDA policy of eating your seed core if you whack

research and I think that the rust issue before us is a perfect example of why we cannot back down from trying to technologically

and scientifically maintain our edge in the world of what has become an extraordinarily competitive global market.

So I do appreciate very much the substance of work you are

doing with in ARS under your leadership, Dr. Jen and wish to help

you however I can relative to preserving the priority funding for

agricultural research. This is no place to impact, I think our efforts

to stay competitive in the global marketplace. And I thank you and

yield back.

Mr. LUCAS. The Chair thanks the gentleman.

The Chair now turns to the gentleman from Kansas, Mr. Moran.

Mr. MORAN. Mr. Chairman, thank you, very much.

Dr. Jen, just a bit of follow up to the gentleman from North Dakota’s question. Has there been a reassignment of any resources at

USDA for research directed at the issue of Asian rust? Have you

created a focus on Asian rust as a result of its discovery in Louisiana several months ago?

Mr. JEN. I think we have been anticipating more of an emphasis

into the soybean rust research and because of the fact that we did

get fundings in 2005, a budget to emphasize that yes, we have put

more emphasis on research, on this soybean rust research on ARS’s

part.

Mr. MORAN. Where is that research ongoing and what is its nature?

Mr. JEN. I would probably have to get back to you in terms of

all the research that is going on I think in this area. A lot of them

are in the midwest States, Illinois, Iowa, and possibly Kansas, as

well, sir.

Mr. MORAN. My question wasn’t that provincial, although I

would be please to see if it was occurring at Kansas State.

I am somewhat interested in knowing whether the focus of that

research, Doctor, is to eliminate the threat of Asian rust in the

United States or whether it is all directed toward how do we respond once it is discovered?

Mr. JEN. I think the long-term solution from a research point of

view of this type of, I think fungus disease is to develop genetically

resistant varieties on that.

And one of the research that we have done is really trying to

map, partly map the genomes of this pathogen so that we can understand and try to find markers that we are able to find genetic

resistant variety because the existing varieties at this time we

haven’t seen any with the preliminary screening that we have not

seen in that. But we are looking all over the world actually of potential resistant varieties in that and try to bring them in.

12

So we are tackling it both from the traditional genetic research

of finding the gene somewhere in, that type of breeding, as well as,

probably attaching it from a more modern way of doing it sort of

genetic research.

Mr. MORAN. Is there cooperation between USDA and EPA in research dealing with chemical fungicide application?

Mr. JEN. We have been working in testing the fungicide’s effectiveness efficacies, I think because of the fact we up until now we

don’t have any in this country so most of these testings that we

were doing is in foreign countries like in Brazil, Argentina, and I

think we have some done at South Africa, as well.

Mr. MORAN. I thank you, Doctor.

Dr. Glauber, when I was in Louisiana, my concern was in listening to USDA officials that we had the research, the extension folks

there and they were talking about the need to gain additional information to know what to recommend to a farmer. You had FSA

officials there saying that in the business plan and on the financing

side of agriculture, we are going to have build into the operation

plan of the farmer the cost of additional fungicide applications, additional costs associated with treating Asian rust. And then you

had RMA there to which we were talking about how do we make

certain that crop insurance is applicable that the farmer receives

an indemnity for loss. And the answer was as long as the farmer

is doing what is expected, what is reasonably required to respond

to the rival of Asian rust, then crop insurance will come into play.

And the scientist is saying, the extension folks saying, well we are

not sure what advice that should be and I was there early shortly

after discovery.

My impression is that USDA does have its act together. Is coordinating these kind of questions and issues among yourselves so that

when soybean rust is discovered someplace in Kansas, we are not

going to have a farmer calling us saying I did everything I thought

I was supposed to do and then crop insurance saying but they

didn’t do enough, therefore they are not covered. We worked our

way through that scenario?

Mr. GLAUBER. That is my impression. And I understand you are

having a hearing next week on crop insurance and I know Dr. Collins will be up and he and I have been talking about this a bit. I

know RMA has posted a number of notices on their Web site with

increasing detail in terms of what is going to be expected of the

producers.

I think on March 28 if I am not mistaken, they sent a letter out

to the insurance providers with specific information in terms of

what constitutes a good farming practice with attachments and instructions to get this out to the producers. They have also been

working with the extension service and others to train crop experts.

These would be the people farmers would be relying on to tell what

constitutes good farming practice.

The other thing is they have been very clear with the producers

at least on the Web site with their outreach activities to document

as much as possible because you are right, I mean, for a producer

to be sitting, trying to decide what to do to know one, to control

the disease, and the other thing to make sure whatever he is doing

13

he qualifies for an indemnity payment I think is credible. And particularly with the costs involved, you are absolutely right.

My impression is—and again, you will have a better opportunity

to talk to RMA about this but just in the last month alone there

have been several posting on the Web site with detailed information. I think far more information is up on those Web sites back

in December and January. I know the FCIC Board of Directors

have been asking those questions but I think there is a lot more

information up there right now. And again, with instructions to the

insurance providers and to the producers themselves.

Mr. MORAN. Has there been any estimate of indemnity losses, of

losses of soybean production that would be subject to crop insurance indemnity? Is that known by you?

Mr. GLAUBER. Due to soybean rust?

Mr. MORAN. Yes.

Mr. GLAUBER. No, not right now. And I think that yes, again it

is so preliminary, we will have a better idea once we get into the

growing season and as the crop starts immerging in other areas we

will have some idea about what the incidents might be and again

the severity. The critical thing of course and as everyone has said

up here is getting it early, getting it at first instance, spotting it,

and then applying the fungicides and that is going to be the real

critical thing here.

Mr. MORAN. Thank you for your perspective and helping me prepare for next week’s hearing.

Mr. GLAUBER. OK.

Mr. LUCAS. The Chair turns to the gentleman from North Carolina.

Mr. BUTTERFIELD. Thank you, Mr. Chairman.

Mr. Chairman, I want to thank you very much for holding this

important hearing today and I particularly want to thank the witnesses for coming forth today with your testimonies.

I am from eastern North Carolina and am one of the newer members of this committee and so I am having to learn so much about

this issue but I thank you for your testimony and I thank you for

the information that you have provided.

It seems to me that these spores have now found in eight southern States, North Carolina not being one of those eight southern

States but I suspect that it is just a matter of time before they

come over to my region. And so I just want to thank you on behalf

of the people of eastern North Carolina and all of the State of

North Carolina for the work that you are doing and for the research that you are engaged in.

I just want you to know that we are deeply concerned about this

issue and we stand ready to help you in any way that we can. Certainly North Carolina State University has been very proactive in

this issue and they are on the cutting edge of research and I just

want to encourage you to continue to work with North Carolina

State University because they have a profound interest in this

issue. So thank you very much for your testimony. I yield back to

balancing my time.

Mr. MORAN [presiding]. I thank the gentleman.

The gentleman from Texas, Mr. Conaway is recognized for 5 minutes.

14

Mr. CONAWAY. Thank you, Mr. Chairman.

Gentlemen, thank you for coming today. Being one of the newest

members on the Agriculture Committee, I get to ask the ASR Asian

soybean rust one on one questions.

Mr. Jones, let me ask Mr. Lucas’s question a little bit differently.

Are there treatments in pesticides or fungicides that the industry

or growers want that you guys have turned down? Can you help

give a sense of the ratio of the ones that you approved versus not

approved on these questions?

Mr. JONES. We haven’t turned any down. As a matter of fact,

when we first heard of Asian soybean rust a few years back, it is

now almost 3 years, we took our lead from the growers, the USDA,

and the soybean growers, USDA, and the companies about what

they thought were the most important products. All of those products that were brought to us that 2 years ago have been approved.

Then in March 30 about a month ago, a couple of States came

to the EPA and said there are some additional active ingredients

we would like the agency to give consideration to. We have not

made decisions on those as they are what I refer to new active ingredients. They have never been reviewed before in the United

States. So we need to slog through all of the information to see if

we can make the appropriate safety findings.

Mr. CONAWAY. OK. We don’t have any cotton, I mean any soybeans growing in west Texas but we do have a lot of cotton. Are

there risks of transfer of this Asian rust menace to other cash crops

or other crops that are grown?

Does that make sense, Dr. Jen, or anybody? Is this just risk to

soybeans or can it transfer to other species?

Mr. JONES. Well I will pass this to our plant pathologist but I

know dry beans for example or some pea and lupines if I am not

mistaken are susceptible but I will let Matt.

Mr. ROYER. Let me try to summarize the information we have to

date. There are many different species that can be infected by the

organism. Perhaps a handful may be important in the field environment. I think time will tell what the true impacts will be in the

United States. I would like to point out that there is special concern with dry beans especially in four States this year. And we

have a pretty good program of sentinel plots that we have agreed

to with those four States.

Mr. CONAWAY. Would you flesh out the phrase sentinel plots for

me? I think I understand what it is but how do we keep those from

spreading the disease elsewhere?

Mr. ROYER. Sentinel plots are basically portions of fields or special plantings that are generally earlier than usual. They are designed to detect soybean rust. They have a second purpose which

is to observe spore production or disease intensity over time. So

what these plots will do is help us understand more about the epidemiology and about the impact of soybean rust and also to measure its progression perhaps from the southern States to those to

the north.

Mr. CONAWAY. It is windborne spores. How do we protect surrounding countryside from infection?

Mr. ROYER. Again, the protection is one of a web based delivery

system to report the observations of rust in the United States. It

15

is to provide guidance on fungicide usage but as much as anything,

it is an information delivery system so we can understand as much

as possible about rust to learn from it, especially this year and in

future years.

Mr. CONAWAY. Thank you, sir.

Mr. Chairman, I yield back my time.

Mr. MORAN. Thank you, Mr. Conaway.

The gentlelady from South Dakota is recognized.

Ms. HERSETH. Thank you, Mr. Chairman.

And I would like to echo the appreciation to those on the panel

today that are testifying and for the chairman and others for calling the hearing and investigating the challenges that lie ahead

with Asian soybean rust.

I have just a couple of follow up questions in wanting to reiterate

what Mr. Pomeroy and Mr. Moran have identified as the importance of how we allocate limited resources to research in this area

as it relates to different parts of the country that have been affected and those that are at risk. But we know that there are studies showed over winter in Florida. But so far it hasn’t been determined that it can over winter in a hearty climate like we have in

South Dakota and even more so in North Dakota so there are some

benefits to negative 20 degrees below temperatures, right?

But my question is have you found in the research either that

we have done in the southern States here or anywhere else in the

world that in addition to the spores being spread by the wind, does

then it manifest itself differently based on region, based on climate,

as well as been exacerbated by the types of winds that we experience in the Great Plains and just really what the state of the research is right now for the northern Corn and Soybean Belt?

Mr. JEN. As far as we know, that there is I think we have only

found that the spores of the fungus is going to be carried by wind

and transferred on that. And they have been fairly resistant in

terms of weathers in that. We do not know whether it will happen

here in the United States, however, in Brazil which does cover

quite a large area, when it was first discovered within 2 years it

was spread throughout the whole country.

Ms. HERSETH. Right. But I don’t know that there is any place—

and I guess Brazil isn’t going to help us out much because I am

not familiar with any climates in Brazil that would mirror those

in the northern Great Plains. But is there anywhere else where it

has been identified in other countries that would help us here?

Mr. JEN. I would probably have to get back to you on that answer because right off the top of my my head, I do not. Burleson

Smith, do you have any information?

Mr. SMITH. There are indications that in South America there

are areas of Argentina for instance that are more similar to areas

of the Midwestern United States. By in large, the observation has

been that the disease severity has not been as great in those areas

as in the humid and moist areas for instance in Brazil.

This disease is highly weather dependent and so we can expect

different conditions each year in terms of disease development and

that is why it is going to be so important for us to be able to monitor the progression of the disease and to provide information to

growers to allow them to make decisions as to whether or not they

16

do need to make applications or to decide whether or not they are

at a low risk of incurring the disease in their local area.

Ms. HERSETH. Thank you. And much of the testimony today focused and some of the questions on the treatment here in the

short-term, the chemicals that are available, the fungicides that

have been approved, let us talk a little bit about the long-term.

And there was some discussion about the disease resistant varieties and where we are in that research. If you could elaborate on

where we are in that research, how far away we might be, and of

course, I would like to see some of the varieties that are developed

to be in the public domain.

And Dr. Jen, in your written statement, as well as your addendum and some of what you have shared today, it does sound like

there is some research going on with the land grant universities

but I would like to know the mix of what is going on in the public

domain versus the research being done in private companies and

your thoughts from USDA’s perspective on how we can facilitate

more of this research with the land grant partners.

Mr. JEN. Thank you. National scope, therefore, it is essential, I

think the public research money be devoted to it as much as possible to try to come up with a resistant varieties in one form or another. I said earlier that we are taking it fairly aggressively

through most the traditional genetic resistant variety which is

screening a lot of the existing variety and see if some of them have

some resistance and you start to trying to transfer those through

breeding and crossing and trying to develop something that will be

totally resistant. And on the other hand we do try to through the

modern genomic research to see whether or not we able to find

markers and insert some resistance into existing varieties. I think

at this time, we are not at the stage where we have either one of

them being totally successful yet. It is a project in progress and we

are doing it very aggressively in a sense.

The other thing is we do not understand enough about this disease yet in the different conditions, weather conditions. I was just

told that more than likely the spore would not survive, I think the

winter in the northern Plains area where you are, however, if it

does happen during the summertime the wind carries from the

south to the north during the summertime, it will manifest itself

to the point that you will have economic loss in that.

I am not able to answer your question really to what the private

industry is doing in their research.

Mr. MORAN. Thank you.

We are honored to have the committee chairman, the gentleman

from Virginia is recognized for 5 minutes or longer, sir.

The CHAIRMAN. I will try not to abuse that. I thank the gentlemen, both chairmen for holding this hearing.

I think this is an important issue and it is one that is an impending crisis. So to get as much information out as possible, as quickly

as possible is a very good thing.

I don’t have the comfort of having many subzero temperature

days as North Dakota or South Dakota might have but I think for

the most part I am grateful for that. However, I have noted that

my farmers in Virginia have already cut back on soybean production.

17

The reports that I received just last week indicated that the expectations for planting this year were going to be many thousands

of acres less in soybean than have been the case in recent years.

And I am wondering if any of you could comment on that and tell

me whether you think that is a reasonable decision to making this

early.

Is it possible that it could arrive in Virginia in this current planting season or is this an overreaction to the news?

Mr. GLAUBER. Well, you are right. Virginia farmers, at least according the planting intentions report indicated they intend to

plant about 10,000 fewer soybean acres this year. That is about 2

percent less than what they did last year. I understand that we

had record yield or record acreage last year. Soybean prices a year

ago were quite high at planting time and so there were a lot of incentives to plant and they have been lower this year particularly

early, at least at planting time this year compared to where they

were a year ago so there is plenty of price factors that may be playing a role as well.

Generally, I think the survey indicates that about 86 percent of

the Virginia farmers had some awareness of soybean rust which is

fairly high, fairly close to the national average. And generally,

when NASS asked that question not surprising where you really

found those States were the major soybean producers producing

States, those producers knew all about soybean rust and those

States in the affected areas generally had very high awareness levels of soybean rust. Generally, the Southeast was one area just as

region as a whole where producers did say that soybean rust was

going to influence their planting decision. So it wouldn’t surprise

me that they have taken that into account.

Again, at the time you are making planting decision particularly

right now because we haven’t really had incidents of soybean rust,

you really are trying to factor in a lot of uncertainty in terms of

your decision, in terms of whether or not you are going to have to

apply fungicides, et cetera. And so I think that if I were looking

at the situation, I would say a lot is based probably on prices but

I think it is the incidents of this disease it grows that it will influence producer’s decisions.

Mr. JEN. If I may add, Mr. Chairman, just a little bit on the answer. Up to 89 percent of the soybean farmers that is aware of, soybean rust, only 11 percent of these producers consider soybean rust

a factor in determining their planting in that.

The CHAIRMAN. And what sample was that taken from?

Mr. JEN. It is the NASS survey.

The CHAIRMAN. But that is not the survey. What I am referring

to was a report about Virginia and it specifically cited soybean rust

as a factor. I am sure the economic circumstances also are a predominant factor but a factor in their decision to cut back on planting. Is there any indication that soybean rust is going to arrive in

Virginia this quickly?

Mr. JEN. It will mostly depend on the weather, sir.

The CHAIRMAN. What is the closest place now, Florida?

Mr. JEN. Right now I think it is. Burleson, do you have any latest information?

18

Mr. SMITH. I believe the information on the Web site is indicating that Florida is still the area where the disease is located on

wild host but to follow on Dr. Jen’s comments, it is very likely that

the eastern seaboard of the United States would be a possibility in

any given season because of Florida being a source of inoculants.

The CHAIRMAN. Thank you.

Let me ask Dr. Royer, I am very interested in the sentinel system and what you are doing there to detect it. What is APHIS’s

plan for eradication of it or control of it? A tougher question.

Mr. ROYER. Sure. The APHIS has no plan for eradication. We

have had lots of discussion with scientists both in the United

States and abroad in the past couple years. What we have learned

is that spores are carried long distances, transcontinental,

transportive spores, and any effort to eradicate it would be ineffective. It simply spreads too quickly. And our whole strategy has

been one of providing information for timely disease management.

The CHAIRMAN. If I may abuse my privilege, just one more question, a very basic one that everybody, I think would like to know.

Dr. Glauber, I know you touched on this in your testimony but

if a producer is going to make one call to a local USDA person to

discuss his or her options, who should they call? And I know that

the Web site is a great first step but some producers may not have

web access. What should farmers do to prepare themselves to deal

with rust?

Mr. GLAUBER. Well I think local extension agent would be a good

source because those are the people that will be telling you and advising on terms of what to do about the presence of rust and how

to scout. And there are also obviously crop consultants if those are

available in the area. You are right: Not everyone has access to the

web but I know APHIS and CSREES have spent a lot of time trying to train extension agents in terms of the best management

practices, good farming practices in regard to soybean rust.

The CHAIRMAN. Thank you, Mr. Chairman.

Mr. MORAN. Thank you, Mr. Chairman.

The gentleman from Minnesota, Mr. Peterson.

Mr. PETERSON. Thank you, Mr. Chairman.

I apologize for having to step out and if I am asking something

that has already been covered but I was reading somewhere in

here where the estimate is that it costs $25 an acre to treat this.

Is that correct?

When I was in Brazil, they had experienced this. It was a year

ago or whenever it was and the people that had sprayed, I thought

they told me the cost was like $4, $5, $6 an acre because I remember having the discussion that some people took a chance and

didn’t spray and they got wiped out and the guys that did spray

had a good crop. But it seemed me they told me that the cost was

between $4 and $6 an acre so why would it be so much higher in

the United States compared to what it is in Brazil?

Mr. GLAUBER. Well there are two things to point out. One is

there is variance in these prices for—depending on the chemical

that is applied. And so when we typically talk about the cost of soybean rust, we typically give a range in the order of $15 to $30 per

acre so a lot will depend on what is available at the time. The

other thing is the application cost itself. You have the chemical but

19

then you also have to apply it and I think that is probably where

our costs are higher than what they are in Brazil.

Mr. PETERSON. Why?

Mr. GLAUBER. I just presume labor and things like that, some of

those costs are slightly higher.

Mr. PETERSON. Well these guys were spraying with agricultural

caps that looked just like the ones in my district.

Mr. GLAUBER. Yes.

Mr. PETERSON. And I am a pilot. I was looking into airplanes and

they cost just as much in Brazil as they do in the United States

so I am not sure there would be much different.

Mr. GLAUBER. Well all I can say is I am using the cost estimates

that have been used by a lot of the land grants and the extension

service, people who have tried to put together those costs based on

machinery and chemical costs. I believe that is what ERS when

they did their report back in May of last year, they did a survey

and came up with roughly $25 per acre.

Mr. PETERSON. Are you working in any kind of relationship with

Brazil to try to use what they have learned or what their experience is to help us deal with it?

Mr. GLAUBER. Matt, do you want say anything?

Mr. ROYER. We have been talking to the researchers all along

trying to learn about their experiences with timing and what types

of products work best in which situations. We have been talking to

them about sentinel plots and how we can put in place a system

in the United States that borrows from their experiences. I think

I defer to Dr. Jen to maybe elaborate some more though.

Mr. JEN. Well I think we have been working with the Brazilian

scientists in terms of trying do field testing in Brazil on different

fungicides and all that. And we have learned for example from

them that the timing of the application is actually very, very short.

That is why we put a lot of emphasis and preparedness in this

country of early detection and the correct identification because of

the fact that it looks like a lot of other possible disease as well in

that sense.

So one of the things we did at ARS is a real time rapid test

which can very quickly decide what it is in that and hopefully you

can do, I think application within that 5 days window.

Mr. PETERSON. Yes. Well I have been to some meetings in my

district where they have talked about this. I think we are doing

what we can but I think it is going to be a problem because if it

does show up and in terms as I understand it, you have to get out

there right away and there is some question whether we can even

get in front of it. I think you are going to have a heck of a time

getting that stuff on because there just aren’t enough airplanes and

maybe not enough chemicals and whatever else so I know everybody is working on this but it makes me nervous. The thing that

we have got going for us that the wind doesn’t blow our direction

from Florida very often so hopefully we will be out of the path unless some kind of freak storm happens, so thank you.

Mr. MORAN. Thank you, Mr. Peterson.

The gentleman, the ranking member, Mr. Holden from Pennsylvania.

Mr. HOLDEN. Thank you, Mr. Chairman.

20

I apologize for being late. I had a mark up on another committee.

And I have an opening statement that I would like to submit for

the record.

I also have some questions about sentinel plots and research that

have been already been asked and answered. So I guess I would

just associate myself with the remarks from the gentleman from

North Carolina who expressed his desire to work the panelists as

we try to address this problem.

As was mentioned it has been isolated in Florida so far but it

was just stated a few minutes ago that the eastern seaboard should

be of concern depending on the weather and that is a concern of

Pennsylvania. Pennsylvania is in the soybean growing region of the

country. As a matter of fact, we had a pretty good yield last year

tying us for second place nationwide so I do want to work very

closely with the department and all others to see that we can address that.

So, Dr. Royer, with that, I guess my one question would be is

does the department feel that it has authority under current statutes such as the Plant Protection Act to ensure supplies of fungicide are widely available or do we need to do something else? Or

anyone else in the panel.

Mr. ROYER. We have looked at the fungicide availability question

and we have been in discussions with industry. Our understanding

is that the issue of fungicide quantity and availability is really not

an issue that we would address under the Plant Protection Act. Industry has told us that there is sufficient supply to control soybean

rust this season.

Mr. HOLDEN. OK. Anyone else?

Mr. SMITH. Allow me to say that the approach that we have

taken was since July 2002 was to work as Mr. Jones indicated with

industry, with growers, and with the States in order to assure that

the largest number of efficacious products would be available. In so

doing, being able to offer the greatest opportunity for growers to

have access to the tools that they need to control this or to manage

this disease.

Mr. HOLDEN. Thank you.

Mr. Chairman, I have some time left and the gentleman from

North Dakota has a follow up question.

Mr. MORAN. The gentleman from North Dakota is recognized.

Mr. POMEROY. I thank the chairman.

Congressman Peterson’s questions, Dr. Glauber made me think.

I am wondering if some of this price differential other countries

have with our costs in fighting this disease are related to differential in pricing of imports, pesticides, herbicides, I am going to have

to leave so I won’t get to pursue this with Mr. Vroom directly, although I know he is on the next panel that would probably want

to speak to this. Have you noticed the pricing patterns relative to

the fungicides, herbicides, whatever they are using to fight gorge

and seeing whether they are fairly consistent across countries or

are they doing as we have had evidence in the past in this committee doing market research to determine what the price bears and

then essentially surcharging North Dakota farmers among the

highest rates in the entire world for these pesticides?

21

Mr. GLAUBER. Well it is a good question. Frankly, I have not

compared prices. What I did do while I was at—right after both answering the last question, I went back to some of my notes and I

will note that at least in some of our anti-shay reports they have

been reporting similar cost estimates for Brazil on the order of $20

to $25 per acre so without seeing the data, I don’t know how different they actually are. And understand that there are scale

issues. Some of those large operations in Brazil where you are flying over several miles, the application cost may be somewhat less

than if you are doing a smaller plot. So trying to get directly comparable data is important but in regard to your specific question,

I don’t have the answer.

Mr. POMEROY. Would it be possible to undertake a survey not

necessarily an exhaustive one and not one that would be all that

involved but a survey of the primary elements used to fight this

disease and compare pricing in the countries that are engaged in

vigorous disease control programs?

Mr. GLAUBER. We certain could check with the attaches to see if

that is readily available to do some—again, nothing scientific obviously to design this sort of survey that you would want the confidence in but I think that certainly we could request the post to

provide information on that.

Mr. POMEROY. Your research, I mean, I could probably do it out

of my office. I mean, you call down to the store and say how much

are you charging for this.

Mr. GLAUBER. That is right.

Mr. POMEROY. And so if you could bring us some spot information that would give us evidence of whether there is no pricing discrimination or whether there may be pricing discrimination relative to what U.S. farmers are paying relative to world prices, that

would be very, very helpful.

Mr. GLAUBER. Yes, well I will get back to you on that.

Mr. POMEROY. Thank you very much.

I yield back, Mr. Chairman.

Mr. MORAN. Thank you.

The gentleman from Louisiana, Mr. Melancon.

Mr. MELANCON. If I could follow up on Mr. Pomeroy’s question.

I would like to know—and of course doing the NAFTA negotiations,

the agricultural community in Mexico are allowed to continue for

at least 15 more years using chemicals that our farmers have been

weaned off of 20, 25 years ago, chlordane and other stuff. Would

you also check not just for the pricing differential but would check

to see what chemicals are still allowed down there that are banned

in the United States because I think we have found and I may be

wrong, that those chemicals are a lot cheaper than the newer

chemicals that we are getting into in this country unless you have

some knowledge of that right now.

Mr. GLAUBER. No, we can check into that for you though.

Mr. MELANCON. Thank you, Mr. Chairman. I appreciate it.

Mr. MORAN. Thank you. With that, that concludes the testimony

and the questioning of our first panel. We thank you for your presence with us today and I would ask the second panel to come to

the table.

22

That second panel consists of Mr. Neal Bredehoeft, president of

the American Soybean Association from Alma, MO; Mr. Jay Vroom,

president and CEO of CropLife America; Mr. Steve Dlugosz, chairman, Certified Crop Advisor Program, Indianapolis, IN on behalf of

the Certified Crop Advisor Program and the American Society of

Agronomy; and Mr. James D. Thrift, vice president of Regulatory

Policy and Corporate Relations, Agricultural Retailers Association,

Washington, DC.

Gentlemen, welcome to the joint meeting of these subcommittees.

Mr. Bredehoeft, we will begin with your testimony. Thank you very

much.

STATEMENT OF NEAL BREDEHOEFT, PRESIDENT, AMERICAN

SOYBEAN ASSOCIATION, ALMA, MO

Mr. BREDEHOEFT. Good morning, Mr. Chairman and members of

the subcommittees.

I am Neal Bredehoeft, a soybean farmer from Alba, MO, currently serving as president of the American Soybean Association

which represents 26,000 soybean producers. Additionally, I had the

opportunity to visit Brazil recently to view soybean rust firsthand.

Mr. Chairman and members of the subcommittees, let me first

thank you for holding this hearing. Soybean rust is a top priority

of the American Soybean Association. During the first 2 years, ASA

has been the leader in soybean rust education and nearly 2,000

producers have participated in seminars we have hosted in cooperation with the USDA and industry partners. Through print,

radio, and Internet, ASA has reached more than quarter of million

U.S. producers over the last 2 years. ASA has worked cooperatively

with governments in all sectors of the soybean industry in preparing for the arrival of soybean rust.

I would like to express our appreciation to the many agencies of

the Federal Government that we have worked with including

USDA’s APHIS, Office of Pest Management Policy, Agricultural Research Service, Cooperative State Research Education Extension

Service, Risk Management Agency, and the Foreign Agricultural

Service. We appreciate that earlier this month, USDA provided

funding for soybean rust surveillance and monitoring.

The EPA deserves recognition for their work to register fungicides, especially for their attention to soybean rust before it was

confirmed in the United States. We appreciate that Congress had

provided just over $1 million on research on developing rust resistant varieties of soybeans in the fiscal year 2005 Consolidated Appropriations Act.

The contributions of soybean farmers in preparing for soybean

rust have been significant and played a critical role in getting U.S.

research off the ground. Through national and State checkoffs, soybean farmers have already contributed nearly $2.7 million of their

own money to rust research and monitoring.

The confirmation of rust last November gave farmers and industry the chance to focus on preparedness over the winter. I am

pleased to say that we are better prepared to manage soybean rust

as a result of these efforts.

Still there is much work ahead of us. ASA continues to have

great concerns that despite the time and effort putting into preparVerDate 11-SEP-98 11:34 Jun 02, 2005 Jkt 021219 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 F:\HEARINGS.109\109-6 HAGRI PsN: HAGRI
23

ing for soybean rust we may still see the following outcomes on

some farms or in some areas of the country. First, detection in

USDA confirmation will come too late for effective treatment to

prevent significant yield losses. Second, fungicide supplies will be

inadequate or improperly distributed. And finally, shortages of application equipment or custom applicators will occur. Another area

of serious concern is Federal crop insurance. Soybean farmers have

ruled out that despite our best efforts to protect ourselves through

the insurance program out losses will not be covered and disaster

assistance will be necessary.

I would like to focus on two issues of a paramount concern to

ASA: fungicide availability and soybean rust research. We make

great strides in making sure a variety of fungicides are registered

to treat rust. However, we still do not know if there will be enough

fungicides available or they will be in places where farmers need

them. Rumors abound in the countryside about shortages and

hoarding. Farmers in the South question whether the supply will

go the Midwest and vice versa.

Of course, private industry must make decisions about production and distribution based on their own projections and no company is in the charity business. Yet we fear that if rust is widespread this year, meaning 30 to 40 million acres out of the intended 75 million acres to be planted, we will be in an emergency

situation with fungicide availability. Some and perhaps many farmers will not be able to buy them in time.

ASA continues to believe that only the Federal Government in

this case, the Department of Agriculture can undertake the task of

coordinating with the private sector to ensure a sufficient supply

of fungicides. ASA strongly encourages USDA to coordinate with

manufacturers and distributors to determine what supplies are

available and make sure they are accessible to farmers across the

country.

Second, ASA asks that Congress and administration increase

funding for research efforts on soybean rust. We have asked Congress for an additional $2.1 million in soybean rust research for fiscal year 2006. This funding will locate and determine the function

of genes involves in rust resistance. In the absence of development

of rust resistant varieties, the application of costs of fungicides is

the only management tool available to farmers today. We strongly

urge Congress to provide an additional $2.1 million in funding to

help us defeat soybean rust and maintain soybeans as a viable

cropping opportunity.

Mr. Chairman, on behalf of the ASA, thank you for convening

this hearing and allowing me to share what we see as accomplishments and concerns as we head into our first year of soybean production with an undetermined but certainly dangerous threat. We

appreciate your interest in our industry and look forward to a successful growing season.

Thank you.

[The prepared statement of Mr. Bredehoeft appears at the conclusion of the hearing.]

Mr. MORAN. Thank you.

Mr. Vroom, welcome back. We welcome your testimony.

24

STATEMENT OF JAMES VROOM, PRESIDENT AND CEO,

CROPLIFE AMERICA, WASHINGTON, DC

Mr. VROOM. Thank you, Mr. Chairman and members of the subcommittees.

I am pleased to be here today to represent the members of our

association and to also thank you for convening this forum to allow

for more information to be transferred.

While I appear today in my official capacity of CropLife America,

the Association represents nearly all the crop protection industry

in the United States.

I have another personal interest in the subject of Asian soybean

rust. My family is actively involved in farming back home in Illinois and as it happens, I was on the farm last weekend and as I

stood in our machine shed where literally tens of thousands of dollars of agricultural production inputs are arrayed, seed, herbicides,

insecticides, fertilizers, and even some soybean fungicides all carefully inventoried for the season of planting that is already under

way, my brother-in-laws took me aside and showed me the supply

of soybean fungicides that they have been able to purchase so far

which is about enough to treat about a quarter of the acres that

we plan to plant on our farm one time over this year. We talked

about the full range of issues associated with this new pest threat,

the detection methods, how quickly the disease may spread, the

spray equipment capacity, adjustments, and so on. So I really have

had firsthand within the last few days from my own personal focus

group about the issues as seen from the farm level.

Three weeks ago today I was standing in a soybean field in

northern Argentina near the city of Rosario. Three combines were

harvesting a crop of field as I conversed with the owner operator,

a family farm operation about the wide range of issues and challenges that his family faces, among them Asian soybean rust. I

learned that in this particular area of northern Argentina which

would be roughly equivalent in terms of latitude to Charlotte, NC,

that soybean rust was just beginning to be detected near the end

of their growing season this—their fall and that they are certainly

very concerned about it and anticipating the threat for their planting horizon.

From my industry’s perspective, there are three broad priorities

that need to be addressed at today’s hearing. Increase awareness,

increase support for rapid approval of product tolerances, and encourage expeditious decision making on the remaining product use

applications. To generally increase awareness of this new disease

threat and the huge number of variables that are ahead of us in

producing the 2005 soybean crop in the United States is absolutely

paramount. And your hearing today will contribute to that significantly, learning detection methods, patterns of disease movement

in our climate and cropping patterns, effectiveness of treatments,

and techniques of application, and the supply and effective distribution of affective ASR fungicide products.

The USDA farmer’s survey recently shows that some 11 percent

of soybean farmers that answered their survey, didn’t know anything about Asian soybean rust. That indicates that there is still

work for all us of to be done with regard to getting the word out

educating growers and those who support them in all walks of life

25

across rural America. The same survey, of course, show that about

89 percent of soybean farmers are aware and clearly have done

substantial homework already as evidenced by the fact that in

some small part they have adjusted but not gone away from soybean producing knowing that there are crop protection solutions

available to help manage this disease.

Once our 2005 crop is harvested this fall here in the United

States, American farmers will still expect to sell about half or more

of this crop in 2005 to foreign customers and earn hopefully $9,

maybe $10 or more billion in sales from those customers outside

the United States.

Legally established residue tolerances for these crop protection

products that farmers use to grow this year crop are absolutely essential. We are all pleased to hear EPA’s commitment in getting

this tolerance work done early and effectively according to Mr.

Jones’s testimony earlier on the panel. USDA has also got lots of

work to do in this arena ensuring that our foreign customers and

their governments have all the information that they need to know

about EPA tolerances for these products in order to guarantee that

we don’t have any trade issues with the export of the 2005 U.S.

crop.

Both USDA and EPA are to be commended for the great work

they have done individually and collectively alongside our industry

and the growers in getting new products to the market. EPA’s work

in getting those 18 new products approved is terrific as we have

already heard. There are still some section 18 products that are in

the queue and are waiting final EPA decisions. EPA work in this

area might yet result in additional products being made available

this growing season.

One of the things that are industry has learned along with farmers in Brazil is that quite often multiple treatments are required

of different products and sometimes it is very advantageous if different chemistries are used either in combination or in separate

treatments. Further, it is shown in Brazilian research that combination products are very effective. It is likely that some or all of

the products in this last or third wave of section 18 applications

could be valuable to the U.S. effort if they could receive rapid EPA

review, particularly if we have a severe ASR infection across the

U.S. soybean crop this year. These approvals could well add to both

the variety of products available and the total supply.

The Agriculture Committee has been very supportive of efforts to

harmonize pesticide registration work between U.S. EPA and other

pesticide and government authorities around the world and I was

pleased to hear Mr. Jones’s comment this morning that they are

looking at exchanging review data with the European Union that

have already looked at some of these last remaining products for

approval and consideration.

Finally, even if the ASR impact this year in the United States

is minimal, the opportunity for American farmers to use all the

available tools, including potentially these last remaining section

18’s that are pending in EPA, will give us the best possible indication of what works best in our climate and our growing conditions.

Once again, Mr. Chairman, I appreciate the opportunity to be

here to participate in this forum.

26

We know that we have products that can allow farmers to manage this disease but we do not know where and how the disease

may spread here. So our challenge is to prepare for the variables,

to be open and transparent with each other and work together.

If a picture is worth a thousand words, then perhaps just illustrating with the Soybean Association’s Rust Preparedness Guide

that they have put together over the winter is illustrative here. It

is 20 pages in length. Nine of the pages are full page advertising

support of the effort. Most of those ads are from the members of

CropLife America promoting their soybean fungicides, so I hope

that the common sense analysis would say that no salesman would

promote a product that they wouldn’t be prepared to be ready to

sell.

I think our industry is prepared for significant demand for these

products this year, prepared to work with our growers and Government to ensure that we get through this storm. We look forward

to answering your questions.

Thank you.

[The prepared statement of Mr. Vroom appears at the conclusion

of the hearing.]

Mr. MORAN. Thank you.

Mr. Dlugosz.

STATEMENT OF STEVE DLUGOSZ, CHAIRMAN, CERTIFIED

CROP ADVISOR PROGRAM, INDIANAPOLIS, IN, ON BEHALF

OF THE CERTIFIED CROP ADVISOR PROGRAM AND THE

AMERICAN SOCIETY OF AGRONOMY

Mr. DLUGOSZ. Thank you, Mr. Chairman.

My name is Steven Dlugosz. I am a CCA which is a certified crop

advisor from Indiana. I work in Indiana and Ohio. I work with

growers daily, as well as, different retailers that support those

growers.

I would like to share with you a little bit about what certified

crop advisor is. The question came up earlier from the chairman

about who can a farmer call. We think certified crop advisors are

going to be a big part of that. There are nearly 14,000 of us across

the United States. In your packet of information you see a map. We

match up pretty good with our intense soybean growing areas is

where we have a lot of certified crop advisors on the ground.

It is a voluntary organization, voluntary certification. We are actually part of the American Society of Agronomy. To get our credentials, we have to pass two comprehensive exams, a national,

and a State. We have to be proficient in four subject matter areas,

one of which is pest management. We subscribe to a code of ethics.

And then also every 2 years we have to attain 40 hours of a continuing education. Much of our past winter has been spent studying up and trying to become experts on soybean rust. That is one

of the opportunities we have with this education part of it.

We have been quite active in a number of USDA programs.

NRCS and us enjoy a good relationship, particularly in the area of

protecting those service providers, TSP’s. We have got that I think

working for us pretty well.

Most CCAs work directly with the farmers. I guess we look at

ourselves as being kind of a major conduit of information to the

27

farm. We will help with many, implementing many of the best

management practices that are good for agronomics and good for

economics.

CCAs are quite diverse. We are employed by a number of different people. People such as myself, we are employed by retailers,

agricultural retailers, those that sell crop production products,

seed, chemicals, and fertilizers. Many are independent consultants.

Others might be seed company representatives and still others

might work for extension or other parts or other agencies. But I

think bottom line, CCAs are a major part of the farmers partnership in helping solve problems.

Now with that kind of as a background, let us talk about soybean

rust in particular. Obviously, it is a concern. This is a very important hearing about a very important issue. I guess to put it in perspective, yield losses in Brazil where it is untreated can reach 80

percent. I can’t think of anything in soybean production that even

comes close to that type of threat. I have been doing this for about

20 years. I can’t think of any pest, any weed, any disease that has

ever approached that type of loss. So from that standpoint it is

somewhat unprecedented. I think not only the industry but growers as well have never faced this type of threat before and it is

good to know that there is a lot of people aware of it. I am not always sure that everyone is aware to the degree of what this actually could become.

CCAs will be on the front line with this whole problem. We will

be an active part of monitoring crops. We will be a major way of

disseminating this information. A lot of the good information that

is on some of the Web sites, particularly the USDA and some of

the industry Web sites, will be the ones that will help translate

that, some of that take that right to the farm.

We will be actively involved in making treatment decisions, product selection in all these different products that are out there, we

will be actively involved in helping the farmer decide what to do.

And then many of us will be involved in the actual logistics of applying it which I will address here in a minute.

In fact, that is what I would like to go to next to talk about some

of the challenges that I think we face. Some of them are already

echoed in our first comments from the American Soybean Association. Obviously, early detection is critical. The thing that kind of

complicates it a little bit is there is about 5 other common diseases

that look very similar to soybean rust. And the bad news is, none

of us have any experience with soybean rust. So who is going to

be the first one to say that is soybean rust or who is going to be

the first one to say no, that is not soybean rust because there are

ramifications either way. So that is quite a challenge.

Proper fungicide selection, one of the things that we don’t talk

about too much is there are two types of fungicides. There are

protectants and curatives. Protectants need to be put on ahead of

the soybean rust. Once soybean rust has come into an area in a

particular State, protectants can no longer be used because they

don’t work and then you need to use curatives. OK, which product

do you have, Mr. Farmer? Which product do you have, Mr. Retailer? Is it the right one at the right time? A good example of how

this can play out, if a farmer, for example, has been able to procure

28

a supply of a protectant. Let us say rust comes into the area unbeknownst to some people. It is on the field, it is on the field, it is

now actively growing. He sprays the protectant. He will not get

control. And not only that, but he has now spent that money which

he will find out that it doesn’t have a whole lot of guarantees behind it and that is a whole other area. But a lot of our farmers are

used to using a product seen in performance and moving on.

This is a first time for a lot of soybean growers using fungicides

that there is not necessarily a performance guaranteed based on

timing and timing is very, very important. Many of us are also concerned about product availability. The companies I worked for have

been very aggressively procuring and pursuing products since late

in December. At this point in time, we have only fraction of what

we need. And I guess it is safe to say if a major outbreak occurs,

we will be significantly short in being able to get over the acres

that we service. And this is only talking about one application.

Much of the management in Brazil is multiple applications. Multiple applications of multiple products. Different take mixes use a

different race depending on the infestation. Again, very little bit of

that has been talked about in detail and again becomes quite an

area of concern.

The other thing is too is just our overall awareness of the farmers. Just a kind of little quick anecdote, I have had one guy in a

farm I had, he just said, well it sounds to me like it is one of those

Y2K things again. And I had to laugh because I thought it was

kind of interesting. I said well I think it is somewhere between

Y2K and soybean Armageddon, where I am not quite sure. But we

do have quite a wide range of farmer’s awareness but also their

willingness to actually actively act on it.

The challenge we are going to have then also is just the logistics

of it, being able to get over a large number of acres in a short period of time. A quick story, Favorite Farmer A, Favorite Farmer B,

Favorite Farmer C, Favorite Farmer D, they all come in in the

morning and say they want their fields sprayed, rust is in the area.

So the question is who is first, who is last? How do you tell four

of your best customers that he has now got to get in line and by

the way, we have got a window of about 3 days to get this done

and oh, yes, there is a front coming. Then you can see what we are

getting into real rapidly.

The good news is we think these concerns are relatively shortterm issues. Some colleagues of mine that just returned from Brazil

were able to share some experiences that sound very similar to us.

The first 2 years it was kind of a real picnic so to speak. But after

that, things kind of settled out and product supply became quite

prevalent and people were able to make the right decisions at the

right time. But at this point in time, it appears that we have a long

ways to go as far as getting that system sorted out. As we gain understanding, I guess we are confident that our soybean production

system will be able to get the job done. That we will be able to effectively manage soybean rust but it could be a little bumpy in the

meantime.

So in summary, certified crop advisors are doing to play a major

role in managing soybean rust. They are a proven trusted partner

to the farmer. And we will be intimately involved in helping him

29

make the right decisions and keep us very productive in soybean

production in the United States.

Thank you.

[The prepared statement of Mr. Dlugosz appears at the conclusion of the hearing.]

Mr. MORAN. Thank you very much.

Mr. Thrift.

STATEMENT OF JAMES D. THRIFT, VICE PRESIDENT, REGULATORY POLICY AND CORPORATE RELATIONS, AGRICULTURAL RETAILERS ASSOCIATION, WASHINGTON, DC

Mr. THRIFT. Good afternoon, Mr. Chairman.

The Agricultural Retailers Association, ARA, which represents

the retail sector of the U.S. agricultural industry, thanks to House

of Agriculture Committee Chairman Jerry Moran and Frank Lucas

for holding this joint hearing and allowing ARA to provide our

views on the issue of Asian soybean rust in the United States.

ARA represents America’s retail dealers who own and operate

approximately 6,000 retail outlets, provide crop protection input information materials to America’s farmers.

I am the vice president of regulatory affairs & corporate relations

for the ARA in DC. Our association and member companies understand this disease threat to America’s soybean industry. We have

been both monitoring the progression of the disease, as well as,

being proactive in our communications with the agricultural retail

and distribution industry. I will divide my brief comments into

three key parts, pest awareness and identification including discovery, disease life cycle, fungicide selection, and application timing;

commercial issues to include equipment availability, product distribution; and industry involvement which include ongoing discussions with industry experts.

With the rapid spread and devastating impact of the Asian soybean rust problem in South America, the question was not really

if but when it would arrive at our Nation’s doorstep. The first signs

of the disease appearing in farmer’s fields occurred last year. As a

first step in being proactive on this issue, ARA invited Burleson

Smith, USDA Special Assistant for Pest Management Policy, to attend ARA’s annual convention and conference in December 2004.

Mr. Smith addressed the open session with comments directed at

creating more industry awareness on soybean rust.

Open dialog with USDA concerning soybean rust development

has and will continue. And enormous campaign of training and

awareness has occurred at the local level before the pest has even

impacted yields. Probably more training and information has actually occurred for this pest than has ever been done in U.S. agricultural history.

ARA has and continues to be supportive of advising our members

to work closely with local soybean producers including local experts

on rust such as Agriculture Extension Agents and university research experts. Many ARA members have their on agronomy staff

that are becoming proficient in disease discovery techniques, as

well as, the disease life cycle in order to spot disease symptom.

ARA has encouraged members be become well versed in all of the

current disease control products available and systems including

30

all current integrated test management programs applicable and

appropriate for the control of soybean rust. This knowledge will

greatly facilitate a rapid response when the initial disease is discovered. Included in this process is a selection of the best fungicide

materials for disease control and the appropriate product sourcing

routes from either manufacturers or distributors.

ARA asked the committee to review the option of using retailers

as first responders under the Technical Service Provider Program,

TSP, administered by USDA’s National Research Conservation

Service. The TSP was established by Congress as a public private

partnership in the 2002 farm bill to assist USDA officials with field

tasks at an efficiency rate equal to or better than any current systems. Over 90 percent of America’s farmers rely on their local agricultural retailer as their primary source of agronomic technical information.

ARA as an association and area members have written countless

articles and stories and held numerous meetings to educate our

farmer customers on the best management practices for disease

control. ARA has supported and encouraged retailers to participate

in online seminars with countries leading experts to provide front

line information to growers. ARA has also written in a question

and answer format several newsletter stories to assist our members

with key concepts that retailers will need to know to combat this

new threat. ARA has discussed agronomic application practices

with several national organizations to better understand the role of

cooperation that will be needed should a major outbreak occur.

For example, ARA has reviewed options and ideas on rush with

executives of the American Soybean Association and we are looking

forward to working together to ensure that any disease outbreak is

not only handled efficiently but also handled with the most economical control system possible. We fully realize that soybean rust

adds an entirely new cost in management dimension for soybean

producers.

We thank you very much for this opportunity to testify this afternoon and we look forward to answering your questions.

[The prepared statement of Mr. Thrift appears at the conclusion

of the hearing.]

Mr. MORAN. Thank you very much.

Best farming practices seems to be a phrase of importance. Has

that been adequately defined such that a farmer in Kansas or Illinois or Minnesota knows what that means? Maybe this is Mr.

Bredehoeft.

Mr. BREDEHOEFT. Well I believe there is probably some difference of opinion out there as farmers when you take a look at

what risk management has sent out. When you have to do the documentation when you visit your field, when you scout, when you

apply fungicides, then it becomes a question of who is going to be

the third party if there is a need of a third party to verify. So I

think there is some differences of opinion out there as far as a producer looking at what the best farming practices are.

We can also look at a crop and be to the point of maybe with soybean rust, if you don’t catch it early enough, you could have a point

of a loss of a crop and then my best farming practice is why should

I spend more money to try to save a crop that is already lost. But

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others might say you need to go out there and save it even though

it is saving a few bushels.

Mr. MORAN. That is not an unusual issue. That is one farmers

face in dealing with risk management agency and crop insurance

in other sectors. Is that true?

Mr. BREDEHOEFT. Well it is probably true to a point but I think

this is probably more critical. I don’t think any producer has ever

faced a disease in their crop like this that is so fast moving that

one day you can detect it and if you do not apply a fungicide within

a day or two, you could lose 80 percent of the crop. There is some

correlation there but I don’t think we as producers have never

faced a situation like this before.

Mr. MORAN. The circumstance I think of is at home in which

after 5 years of drought loss of a corner wheat crop, corn generally

and told you need to go turn on the irrigation pumps or you have

not done enough to save your crop despite the fact that the corn

is clearly dead, what percentage of—we are going to discuss the

crop insurance issues in more depth next week. And my understanding is the American Soybean Association is submitting written testimony. I would be happy to know from you in advance questions that you would like for us to ask the risk management agency

in regard to crop insurance. What is your sense of how many acres

are insured and what level of coverage? I can tell by your reaction,

you can answer that at your convenience.

Mr. BREDEHOEFT. Yes, I think we would have to get back with

you on that. I don’t have those figures with me today.

Mr. MORAN. Would crop insurance be normal? Would that be

something that most of your members would have when it comes

to soybean production?

Mr. BREDEHOEFT. That I really don’t know but we could look that

up, too.

Mr. MORAN. Mr. Dlugosz, this best farming practices, thoughts

about that? How do you satisfy your farmer client that he or she

have done everything necessary to feel comfortable that their crop

is fully insured?

Mr. DLUGOSZ. Yes, that is the problem is I think understanding

them or knowing those things and then being able to put them in

practice. That is the part I am concerned about. We are asking people to do things that they have really never done before. The concept of closely monitoring your crop within days and then making

a decision to do something, especially something as expensive as

the fungicide, just those logistics, who is going to make the first

call.

If I am in area and I say hey, there is soybean rust and oh, yes,

by the way, that was brown spot and if you told me later that was

brown spot and I just told 50 of my best farmers to spray $25 of

product, see that is the stuff that we are scared about.

The other thing is too, to be honest with you, is in the past, we

have seen that reaction to let us say soybean aphid in the past or

spider mites that become just a regional reaction and regardless to

what is going on, I need to spray. So I can see those dynamics kicking in quite rapidly especially in light of how sensitized everyone

is.

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Mr. MORAN. Who has the ability to definitively determine whether what you see on the leaf is soybean rust? What does that require?

Mr. DLUGOSZ. Yes, the system right now, that requires an accurate diagnosis. We are going to be relying on our local land grant

universities, that NPDN system that was referred to in earlier testimony. That is based primarily on the land grant system so for example we would run some leads up to West Lafayette, Indiana and

have someone verify it.

Now with that said, there is an alert system that is being developed such that there may be a proclamation that then comes out,

hey, it is in Hancock County, it is in Spencer County, whatever,

most of Indiana is now considered infected, start to spray. And

again, I am talking about a system that has yet to ever be tried

or worked.

Mr. MORAN. Is this a novel circumstance that farmers face either

in I assume in soybeans but other crops as well? Is it something

different than the magnitude and consequences than we have ever

faced?

Mr. DLUGOSZ. To be honest with you, there is some similarities

of the tobacco guys several years ago, it has probably been 20 years

ago, they had a thing called blue mold. That was windblown

spores. That all of a sudden came and decimated crops. That is

kind of a good example. They had a lot of trouble. Part of it is because it came and no one was ready for it. The thing that we have

going for us this time is we have a good head start. We have been

knowing about it since November so from that standpoint but with

that said, I humbly submit that again knowing what to do and

being able to do it is quite concerning.

Mr. MORAN. Let me go back to something you said earlier about

submitting the specimen to the land grant college. Does the county

extension agent, the agronomist know the answer to that question?

Mr. DLUGOSZ. At this point in time, none of us feel—and I am

speaking for some other people, but none of us probably feel that

qualified because again we are being asked to diagnose something

that we ourselves have never seen except on a slide. Now I can envision years from now some colleagues from Brazil just got back

that their technicians—they call them technicians, but they are

agronomists, RCCAs I think there will be a year coming that we

will have confidence in diagnosing it in our own hand with our

hand lens and say this is it, let us go. This early step, very few

of us are going to go out on a limb and make that call because we

just don’t have the qualifications.

Mr. MORAN. Mr. Vroom in part, Mr. Melancon and the gentleman

from North Dakota, Mr. Pomeroy’s questions, would you like to respond to the question about price differential?

Mr. VROOM. Thank you, Mr. Chairman.

Yes, first of all to the question that Congressman Melancon was

referring with regard to after NAFTA, are there still lots of pesticides used that have been cancelled in the United States for many

years. By and large, no, however NAFTA as a trade agreement established rules for the detection of pesticides on food and fee crops

that might move between these countries but the countries remain

their own sovereign entities with regard to deciding what may be

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used in their own production systems for agriculture and other pest

control considerations and for their own domestic consumption.

So there are certainly some instances where chlorinated hydrocarbon insecticides like chlordane or heptachlor that he mentioned

in his remarks have continued to be used in places like Mexico and

other places that are more tropical in terms of their climates and

science has shown that the half life of those chlorinated hydrocarbons is much less, they are much less persistent in the environment than they are in the tempered zones, like most of the United

States, and they are effective for mosquito control, for Malaria control and other disease vector controls. So countries like Mexico and

other tropical countries have chosen to use those products but primarily for disease control and not for agricultural production.

With regard to price and availability, the Congress has had in

place the Sherman Anti-Trust Act for a long time. And it is most

explicit with regard to Trade Associations being very careful not to

get into these areas but I could tell you that from my own personal

experience, the fungicides that my brother-in-law’s were showing

me in their shop on Saturday, they are in Central Illinois, the

value of the chemicals to treat the acres that they thought it would

cover for one pass was probably about $7 an acre and they would

be the preventative kinds of chemistries that Steve was referring

to. We probably will have $2.50 to $3 an acre cost to apply those

products and from what I could tell from the farmers I have talked

to in Argentina and industry folks from Brazil, the fungicide costs

are pretty much a world kind of a market today. This tends to be

a smaller part of the overall crop protection industry.

In my written testimony our estimate is that fungicides have

been about 10 percent of the U.S. crop protection marketplace in

recent years. There is a lot of competition but there isn’t so much

varied generic competition in this market as compared to herbicides which are much larger in the United States where you would

have widely varying prices. So I think that the prices will tend to

be seen and be relatively comparable across places, around the

world where soybeans are produced and soybean fungicides are

needed.

I hope I have addressed your question while still satisfying my

legal counsel’s constraints on anti-trust compliance.

Mr. MORAN. I would not practice law but you were sufficient answering my question, thank you.

In regard to the 18 applications that are pending at the EPA is

there something special about those 18 that create problems or are

you expecting to have the necessary approval in the near future?

Mr. VROOM. Actually, the 18 list are those that have already

been approved and there are eight or nine that are still pending

under section 18 State applications from Minnesota and South Dakota.

And I think number one, all of us in the industry and production

agriculture who are enthusiasts for EPA to work more efficiently

would like to see them make sure that the trains run on time.

However, we don’t want to see the trains run off the tract. If you

saw the news coverage of the train accident in Japan but it is a

good analogy that we want EPA number one to make sure that the

decisions that they make are grounded in sound science.

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But in this case, as I indicated in my remarks, we understand

that some of the safety data on these pending remaining fungicides

for consideration decision at EPA have already been reviewed by

their counterparts in the European Union.

And I heard Mr. Jones remark in his testimony from EPA this

morning that they are in contact with those authorities in the European Union in Brussels to see if they can go faster around making these decisions relying on the reviews that European authorities have already made. So we know that there are some data out

of Brazil that show that some of those products that are yet to be

decided on by EPA have been some of the most efficacious in certain applications.

And once again as I said in my oral remarks, the more of these

products we can get in the hands of the American farmer this year,

even if we have a relatively minimal soybean rust problem, the

more practical experience we have to use to employ in the planning

for 2006 when undoubtedly the threat of soybean rust in the

United States will be more severe.

Mr. MORAN. Mr. Thrift, I want to give you a chance to respond

to that same kind of question but also add this to the question. Is

there sufficient—and Mr. Vroom addressed this and it caught my

attention. Is there sufficient number of competitors providing the

chemicals necessary that there is competition within the industry

or will a farmer generally be advised that a certain area that this

is the only chemical that will work to meet your needs?

Mr. THRIFT. That is actually a very good question.

First of all, the chemistry falls into two major classes that are

curative and preventative. So to take the total bundle and you

move those into separate areas of technology. And then besides, we

don’t know USDA and other sources have not been able to tell us

what would be the actual projection on the infestation acres. We

can’t tell exactly if the market is oversupplied or undersupplied

and we won’t be able to tell that unfortunately until the season is

over.

There is obvious significant reaction to the infestation with the

current data because no one knows and the economic losses could

be so devastating. We believe only anecdotically have we heard

supplies that are not adequate in all areas. We believe the supplies

in fact are adequate for what is appearing to be a pending infestation. On the other hand, you heard the experts in the first panel

not really being definitive on what the infestation could potentially

be. And I agree with what Mr. Vroom just said that for what we

know about it, we believe supplies are adequate with the various

products.

On the part on the competition and competitiveness in the marketplace, the competitiveness is not particularly, I would believe

between the companies or the products it will be for the supply

chain of who can get what product. There will be growers that fall

into various agronomic decision making mentalities. In other

words, there could be some that want to go with a preventative.

Some want to wait until they see something and then the CAAs

spot it and they go with a curative.

So it is very difficult to say at this time that there is any problem

with really product shortage or competitiveness among the prodVerDate 11-SEP-98 11:34 Jun 02, 2005 Jkt 021219 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 F:\HEARINGS.109\109-6 HAGRI PsN: HAGRI
35

ucts that are in fact available. And I think we have to wait for the

season to play out as several people have said and find out at a

later date how well we did in the training of this first year.

Mr. MORAN. Will there be recommendations to change farming

practices such as row spacing and will application of those chemicals be different aerial versus surface application?

And then I am also interested in this question again about best

farming practices when it comes to deciding whether you are using

something curative or something that is a treatment. Does that depend upon the location of your farm where you are growing soybeans and the discovery of the rust in your area if it is there but

you don’t have it on your plants then is best farming practices require the security of application and once it is discovered then it

is the treatment?

Mr. THRIFT. Those are at least three or four good questions. We

will try and break them down a little bit.

First of all, let us go back to BMP’s best management practices.

Those are not national practices. Those are practices that a professional in the field that advises practitioner advice would look into.

They would include such things as scouting, targeting the entire

area and not just finding the first plant with rust, ID and identifying the problem, getting experts, making sure that they have

checked to see the total extent, and then they will check to see

availability of the product. Is this a preventative application or a

curative? So there is a lot of different things that would go into not

just best management practices in a State or a county, they would

be best management practices that would be done by CCAs as Mr.

Dlugosz indicated that would be on a local farm.

Then after that, depending on the stage of the disease if it is already present, the size of the plant agronomically being able to put

ground application to the filed or not, then you would have to make

a determination probably with a CCA or other professional of

whether they should use ground equipment or air. In fact, in reality in South America, 70 to 80 percent of all fungicide applications go on by air. We believe that our member companies have

adequate equipment to put on materials by ground again depending on the extent of the infestation.

Mr. MORAN. That is a very circular circumstance you all face.

How big is the problem? Where is it going to arrive? What is the

extent of the disease?

Yes, sir, Mr. Melancon?

Mr. MELANCON. If I could weigh in?

Timing is everything. We talk about the most critical component

is timing. When do the products go on? Protectants? It is debatable

depending on the product but protectants if they are on are going

to last somewhere between 20 and 28 days. So the question is

when it coming so I can get my protectants on. Well see, that is

what we don’t know. It is a weather-driven phenomena. So then if

you are putting everything into protectants, if all of your inventory

is in protectants then you have introduced another level of risk

that someone who has puratives may not have to face. So it is quite

a dilemma.

Mr. MORAN. Mr. Thrift said something that caught my attention

that I hadn’t thought about because in my concern about RMA creVerDate 11-SEP-98 11:34 Jun 02, 2005 Jkt 021219 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 F:\HEARINGS.109\109-6 HAGRI PsN: HAGRI
36

ating a standard that farmers, I guess it is that my phone will be

ringing and that the farmers will say I did what I thought I was

supposed to do but the crop insurance just doesn’t provide coverage. And I guess what is important for me to remember is that

there is not this national standard of what best farming practices

are. That is going to be determined presumably farmer by farmer,

location by location which I suppose is no different. Every farmer

has to determine what their best farming practices is. The uncertainty is will they be agreed with.

Yes?

Mr. MELANCON. Again, just kind of a ground real life experiences

occur. Right now a lot of the farmers are coming to us and saying

are you going to help us make that determination? What is that?

And we are going well, and then so some of them will say well now

if I can’t spray because you don’t have the product does that let me

go with—or if you couldn’t get the field, if you have the product but

it rained and you couldn’t get over the field, I would love for you

all to be able to sort that out next week and have those questions

come out because we would love to hear the answers.

Mr. MORAN. Isn’t there a precedent for that circumstance though

in crops and crop insurance? Doesn’t a farmer face that on a continual basis of demonstrating that he or she has done what they

are supposed to do?

Mr. VROOM. Well I think that has very much been the case and

one of the concerns I have heard is that because of the way that

risk management agency is structured it drives decision making

down and standard making down into the regions of the States.

Certainly it is appropriate for someone here in Washington to

make sure that there is a degree of uniformity in the standards

particularly around that part of best management practices that

pertains to whether the farmer, adequately did scout and find the

detection and make the proper treatment.

Mr. Chairman, I think it is also appropriate to note that most

soybean farmers were already practicing a ton of best management

practices before Asian soybean rust ever arrived and a number of

farmers had been reporting doing some trials on preliminary application of fungicides to soybeans in the last couple of years and having detected some yield response and positive investment returns

on applying fungicides to soybeans before we had Asian soybean

rust.

And that goes to the point that there are lots of other disease

pathogens out there that have been holding back production capacity in some places in soybean production that we actually could

have been doing some good with fungicide applications more broadly in soybeans previously.

And it goes to the point that was referenced in one of the USDA

witness comments earlier in the panel first before you this morning

that, in fact, there may be a net benefit overall to the investment

of soybean fungicide applications in addition to suppressing and

containing Asian soybean rust.

Mr. MORAN. Is the application of the fungicide that is directed

at soybean rust provide the protection against other diseases?

Mr. VROOM. Yes.

Mr. MORAN. Maybe that is what you were just saying.

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Mr. VROOM. Right.

Mr. MORAN. OK. That there is a reason that this may be beneficial beyond soybean rust?

Mr. VROOM. Correct. And the other things that American farmers

have done for a long time is effective use of herbicides to keep that

weed infestation competition back so that the soybean plant can be

as healthy as possible. And good fertility support, inoculating the

seed, and on, and on, and on. And these are practices that the

American Soybean Association have established as the best management practices and have been advocates for four decades, so all

of that we take for granted but it is part of the overall equation.

Mr. MORAN. Do you all have any questions that you would like

for us to raise with the panel that preceded you? Was there something that was said this morning that caused you to wish that you

were a Member of Congress at least briefly so that you could ask

the question?

Mr. DLUGOSZ. I think you can all keep your jobs and we will

struggle with what we are doing.

Mr. MORAN. All right. Nothing that you heard that you would

like us to follow-up on?

Mr. Bredehoeft?

Mr. BREDEHOEFT. I guess there is one thing. Getting, probably

getting back to your previous question about best management

practices, like I stated it earlier that we are faced with that in

other crops, there is no doubt. But I don’t think we are faced with

the timeliness issue that we have to have here. If we wait a day

we could lose a substantial part of our crop here if we don’t get the

fungicide treated treatment on there on the crops so we have to

have that timeliness to get that leaf sample in to a land grant college and it has to be done on a very timely basis so there are some

concern there about if that time is going to be quick enough turnaround that we will find out if we do actually have rust and can

treat it. So I think the timeliness issue is probably more prevalent

here than any other crop.

Mr. MORAN. And the point I guess you would be making to me

as we have discussions with the Risk Management Agency in a

hearing next week that is something to remind them of about the

timeliness, the necessity of a timely application of a response?

Mr. BREDEHOEFT. Yes, I think that is one thing that needs

brought up because if we do have a major outbreak, there could be

substantial crop insurance payouts.

Mr. MORAN. I would also make the same offer to you that if any

of you have anything that you would like for us to raise in next

week’s hearing, we would be glad to hear from you between now

and then. Any other members would like to ask questions?

I appreciate the opportunity to have more than my normal 5

minutes and appreciate this panel and the discussion that we have

had on what I think is a very serious issue that deserves significant cooperation by private sector and Federal Government and

State government as well.

Without objection, the record of today’s hearing will remain open

for 10 days to receive additional material and supplementary written responses from witnesses to any question posed by a member

of the panel. This joint hearing on the Subcommittee on Credit,

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Conservation, Rural Development and Research and the Subcommittee on General Farm Commodities, Risk Management is adjourned.

[Whereupon, at 1:10 p.m., the subcommittees adjourned.]

[Material submitted for inclusion in the record follows:]

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