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S. HRG. 109–644

REGIONAL FARM BILL FIELD HEARING:

GREAT FALLS, MONTANA

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

AUGUST 17, 2006

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry

(

Available via the World Wide Web: http://www.agriculture.senate.gov 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY,

SAXBY CHAMBLISS, Georgia, Chairman 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

JAMES M. TALENT, Missouri 

CRAIG THOMAS, Wyoming 

RICK SANTORUM, Pennsylvania 

NORM COLEMAN, Minnesota 

MICHEAL D. CRAPO, Idaho 

CHARLES E. GRASSLEY, Iowa 

TOM HARKIN, Iowa 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

MARK DAYTON, Minnesota 

KEN SALAZAR, Colorado

MARTHA SCOTT POINDEXTER, Majority Staff Director 

DAVID L. JOHNSON, Majority Chief Counsel 

VERNIE HUBERT, Majority Deputy Chief Counsel 

ROBERT E. STURM, Chief Clerk 

MARK HALVERSON, Minority Staff Director 

(II) 

(III)

C O N T E N T S 

Page

HEARING(S):

Regional Farm Bill Field Hearing: Great Falls, Montana ................................... 1

Thursday, August 17, 2006

STATEMENTS PRESENTED BY SENATORS 

Chambliss, Hon. Saxby, a U.S. Senator from Georgia, Chairman, Committee 

on Agriculture, Nutrition, and Forestry ............................................................. 1

Baucus, Hon. Max, a U.S. Senator from Montana ................................................ 2

Burns, Hon. Conrad, a U.S. Senator from Montana ............................................. 4

Salazar, Hon. Ken, a U.S. Senator from Colorado ................................................ 3

Schweitzer, Hon. Brian, Governor of the State of Montana ................................ 5

Panel I 

Belcourt, Tony, Intertribal Agriculture Council, Box Elder, Montana ................ 10

Doheny, Eric, Montana Farmers Union, Dutton, Montana ................................. 9

Henderson, Dave, National Barley Growers Association, Cut Bank, Montana .. 11

McClure, Dave, Montana Farm Bureau, Bozeman, Montana .............................. 7

Schuler, Dale, President, National Association of Wheat Growers, Carter, 

Montana ................................................................................................................ 10

Tyler, Paul, U.S. Canola Association, Moore, Montana ........................................ 12

Panel II 

Beltz, Michael, U.S. Dry Bean Council, Hillsboro, North Dakota ....................... 23

Bonestroo, Gary, Dairy Producers of New Mexico, Clovis, New Mexico ............. 25

Evans, Jim, USA Dry Pea and Lentil Council, Genesee, Idaho .......................... 22

Schutter, Sid, National Potato Council, Manhattan, Montana ............................ 26

Panel III 

Donald, Bill, National Cattlemen’s Beef Association and Montana 

Stockgrowers Association, Mellville, Montana .................................................. 36

McDonnell, Leo, R-Calf USA, Columbus, Montana .............................................. 38

Sampsel, Betty, Montana Wool Growers Association, Stanford, Montana ......... 37

Wendland, Mike, National Association of Conservation Districts and Montana 

Conservation District, Rudyard, Montana ......................................................... 35

APPENDIX 

PREPARED STATEMENTS: 

Belcourt, Tony ................................................................................................... 46

Beltz, Michael ................................................................................................... 51

Bonestroo, Gary ................................................................................................ 58

Doheny, Eric ..................................................................................................... 62

Donald, Bill ....................................................................................................... 67

Evans, Jim ........................................................................................................ 72

Henderson, Dave .............................................................................................. 76

McClure, Dave .................................................................................................. 78

McDonnell, Leo ................................................................................................. 84

Page

IV

PREPARED STATEMENTS—Continued

Sampsel, Betty .................................................................................................. 94

Schuler, Dale ..................................................................................................... 96

Schutter, Sid ..................................................................................................... 99

Tyler, Paul ......................................................................................................... 103

Wendland, Mike ................................................................................................ 105

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

American Honey Producers Association, Inc. ................................................. 108

Cascade County Conservation District ........................................................... 113

Food Policy Council, Montana Food Bank Network ...................................... 115

Montana Action For Healthy Kids .................................................................. 118

Montana Dietetic Association .......................................................................... 121

Montana School Boards Association ............................................................... 124

Montana School Nutrition Association ........................................................... 127

Standley Brothers Partnership ....................................................................... 128

Statement from Henry L. Armstrong ............................................................. 129

Statement from Irma J. Tweedy ..................................................................... 130

(1)

REGIONAL FARM BILL FIELD HEARING:

GREAT FALLS, MONTANA 

THURSDAY, AUGUST 17, 2006

U.S. SENATE, COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY

Great Falls, MT 

The committee met, pursuant to notice, at 9:50 am at the University of Great Falls, Hon. Saxby Chambliss, chairman of the committee, presiding. 

Present: Senators Chambliss, Baucus and Salazar. Also present: 

Senator Burns. 

OPENING STATEMENT OF HON. SAXBY CHAMBLISS, A U.S.

SENATOR FROM GEORGIA, CHAIRMAN, COMMITTEE ON

AGRICULTURE, NUTRITION, AND FORESTRY 

The CHAIRMAN. This meeting will come to order and let me welcome all of our witnesses as well as all of our other guests here 

today. I can’t tell you how pleased I am, as Chairman of the Senate 

Ag Committee, to be back in Montana. You have a beautiful state 

out here. I’m somewhat familiar with the type of agricultural industry that you have in this state but I am excited as I can be to 

have the opportunity to dialog with farmers and ranchers from this 

part of the world as we prepare to write the next farm bill in 2007. 

I want to first of all say that I apologize significantly for a little 

problem that we have run into, from a time constraint standpoint. 

We travel back and forth for these hearings on a military aircraft 

and we thought we were all squared away so we wouldn’t be under 

as bad of a time constraint as it turns out that we are but unfortunately, the plane that was coming to get us broke down this morning in Washington. Thank goodness it broke down in Washington 

instead of in Montana. But in any event, we have another plane 

that is on the West Coast that is going to stop by and pick up the 

staff and myself to head back to Washington and because of the 

down time for the pilots, this plane has to be wheels up from here 

in Great Falls at 12:54. So it is going to curtail us a little bit but 

we’re going to do our best to speed things up on our end and make 

sure that we get into the record absolutely everything that Montana and western farmers and ranchers want to get into the record 

and you’ll have an opportunity to add anything that you want to 

into the record as I will explain in just a few minutes. You know, 

we have a significant drought going on in Georgia and I want you 

all to know the sacrifice I have made to bring rain to Montana instead of directing it to my home state but I sure hope I carry some 

of this home with me when I get back there tomorrow. I am indeed 

2

pleased to be here with my colleagues, Senator Burns and Senator 

Baucus and Senator Salazar. 

We are—you just don’t know in Montana here how important 

your senators are when it comes to agriculture. They are two great 

men and two folks who really make sure that the agricultural interests of Montana are well preserved and well taken care of. Ken 

Salazar is one of our freshmen members of the senate, and freshman members of the Committee, obviously, from the great State of 

Colorado, and we are particularly pleased that Ken was able to 

come over today and join us for this hearing. 

This is the seventh hearing that we have held thus far outside 

of Washington. We have held hearings in Georgia, Missouri, Pennsylvania, Iowa, Oregon and Nebraska, and our final field hearing 

will be in Texas on September the 8th. With the 2002 Farm Bill 

expiring in 2007, the Committee has the responsibility of writing 

the farm bill next year. A number of factors influence the development of a farm bill. And one of the most important of those is the 

input we receive from farmers and ranchers in these regional field 

hearings. This testimony will establish a record of the regional 

variations and the operations and use of farm programs which will 

greatly assist us in the development of a farm bill that will work 

for all of us in American agriculture. We appreciate the information received and testimony delivered in our hearings so far, and 

we look forward to hearing from our witnesses today. 

For those of you who are not witnesses, but are interested in submitting comments to the Committee related to the farm bill, our 

website has guidelines for providing written statements for the 

record and a web form for informal comments. Comments received 

during the re-authorization process will be considered as well. I appreciate the University of Great Falls and President Eugene 

McAllister for hosting us today, and what a beautiful campus 

you’ve got here, and this is a certainly a great facility in which to 

hold this hearing. His staff has been particularly helpful to us and 

I also want to thank my colleagues from Montana, Senator Burns, 

Senator Baucus and their staffs for providing great support for the 

Committee for this hearing. We have got a lot of ground to cover 

today in a relatively short amount of time. So I will now recognize 

my senate colleagues for brief opening remarks. I will turn to Senator Baucus first as a member of the Senate Ag Committee. Max? 

STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM 

MONTANA 

Senator BAUCUS. Thank you very much, Mr. Chairman On behalf 

of all of us in Montana, we very much appreciate your accepting 

my invitation for you to come to Montana for an Ag Committee 

field hearing. We did not do that in the last farm bill, we are now 

leading up to this farm bill, we deeply appreciate, Mr. Chairman, 

your holding a hearing here. This is an opportunity for everybody 

to kind of tell-it-like-it-is-for-Montana perspective. You know, don’t 

pull any punches, it’s a—this is real, this has got real bullets here, 

as we write a new farm bill. As the only member of the Montana 

congressional delegation on the Agricultural Committee in the Congress, it’s an opportunity for you to let me know what you think, 

and the Chairman to know what he thinks, and so we can get this 

3

thing written. So thank you very much, Mr. Chairman, for holding 

this hearing. 

I also want to thank my good friend from Colorado, Senator 

Salazar. He is a rancher, he is a farmer on the Committee, and 

also my good friend from—my colleague, Conrad, even though he 

is not a member of the Committee, he has taken the time out to 

be here, and work in a bipartisan way, which is really very helpful. 

I see the Governor here, and that’s great, too. A couple of just main 

points, to be very quick here. I have had a lot of listening sessions 

around the state in the last week, about a thousand miles traveling 

around our state and a couple things that have come up, one is 

keep a strong safety net. We got to have that strong safety net, and 

that, to a large degree, means a good countercyclical program. 

There is some concern that wheat doesn’t get quite as good a 

break, Mr. Chairman, as, say, corn or some other commodities, 

when it comes to countercyclical, that we in Montana need a strong 

countercyclical program, because of the vagaries of prices and production and so forth. And the second main point is there is a great 

opportunity here, because so much has changed in the last four or 

5 years. And the opportunity for change is energy. Energy prices 

are so high now, it’s making a huge problem for our producers, 

clearly, fertilizing costs, et cetera. 

But also it’s an opportunity for oil seed crops for energy crops, 

for camolina, for example, which is becoming very popular in Montana, as well as cellulosic ethanol. We just need to help wean ourselves away from OPEC as a country. A good way to do that is to 

give more impetus in the next farm program, to the crops—to alternative crops to help us accomplish that objective. And I think we 

will hear a lot from our producers about that as this hearing goes 

along. Again thanks for having this hearing here, it makes a big 

difference. 

The CHAIRMAN. Thanks, Max. Senator Salazar. 

STATEMENT OF HON. KEN SALAZAR, A U.S. SENATOR FROM 

COLORADO 

Senator SALAZAR. Thank you very much, Chairman Chambliss, 

for holding this hearing, and Senator Baucus, my good friend, 

thank you so much for inviting the Senate Agricultural Committee 

to come here to Montana to hold this hearing, and to my colleague 

Senator Burns, thank you for joining us. Governor Schweitzer, we 

appreciate your leadership especially on the whole arena of alternative fuels, and the whole set of energy issues that I know are 

going to be part of this farm bill as well. Let me make just two 

quick comments: First, the importance of this bill is cannot be understated for rural America. There are some that will criticize this 

farm bill for its expense, and yet when you look at what we have 

spent on the farm programs out of this—out of the farm bill, we 

spend less than 1 percent of the entire Federal budget. And it’s my 

view that those of us in Washington ought not to forget, but some 

people have forgotten, that is forgotten America, and what it is 

that rural America contributes to our national security. 

In my time as attorney general in Colorado, I had a sign, No 

Farms, No Food, and I have that same sign on my desk in WashVerDate 0ct 09 2002 12:44 Nov 13, 2006 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\30132.TXT SAG2 PsN: SAG2
4

ington DC. It’s something we need to continuously remind the Nation about. 

Second, there has been some positions already taken by some agricultural organizations that we simply ought to extend the farm 

bill. Maybe that will happen, as we wait until we see what the outcomes are of the WTO negotiations. 

But at the end of the day, I think it’s important for us to have 

these hearings, so that we can figure out what’s working, what 

could be working better, how we can fix the problems that we currently have. And when we talk, for example, about the CRP Program, I know that both here in Montana as well as in Colorado, 

I hear many concerns from rural communities about how we might 

be able to do this CRP Program differently. Well, if we can do it 

better, we ought to do it better. I think that’s one of the opportunities we have in this Committee, see how we can do things better. 

The energy title of this bill, which was put into the bill in 2002, 

I think creates great opportunities, we see more energy and more 

ideas on energy in Washington D.C. and in our capitols across this 

country than we ever have before. So I think alternative fuels is 

going to be one of the key components we can work on. We cannot 

wait to work two or 3 years to work on that particular title. So, 

Mr. Chairman, thank you again for coming here to this wonderful 

state, to Great Falls, and holding the hearing here. 

The CHAIRMAN. Thank you. Senator Burns. 

STATEMENT OF HON. CONRAD BURNS, A U.S. SENATOR FROM 

MONTANA 

Senator BURNS. Thank you very much. I want to thank the 

Chairman and members of the Committee for allowing me to join 

them. I am not a member of the Committee, but I appreciate your 

courtesy, and when you go on the Commerce Committee, I will return the favor, if you ever have to come over there. 

I just want to mention, or throw some questions out today. The 

improvement in the safety net, I think that’s very important, because that’s what I hear too as I drive across the State of Montana, 

how energy will play a role in our farms and our ranches, and how 

we can play a role in the energy crisis that we find ourselves in 

today. And are we willing to go through the pains of changing our 

transportation fuels. Young farmer programs, think about those, if 

we decide to rewrite the farm bill or extend, and at new approaches 

to how we regionalize some of the benefits that we—that the farm 

bill is supposed to provide for us farmers and ranchers. You know 

there are new—we know more about our planet earth now than 

ever before. When I was chairman of the Science Technology in 

Space on the Commerce Committee, we started the low orbit programs, looking at our earth. 

And now—and with those came programs that we could tell a lot 

of things about where we farm and where we ranch, measured accuracy down to a meter. And that allowed us now, I think, and 

when we fashion this farm legislation, to regionalize more than we 

ever have before. The biggest problem in agriculture and food policy is that we write one, and one size is supposed to fit all. 

And it just does not serve agriculture very good, because we are 

regionalized. We are different than South Georgia, below the gnat 

5

line. And we have different challenges and different problems, different crops. But now with data bases, and new science, and new 

technologies, we can start to look at a regionally focused kind of 

farm policy that will serve our producers better. So I just want you 

to think about those, because I come today to listen, and I know 

that’s what the chairman has done, and it’s very, very important 

that we take all the information that we gather now, and it will 

be a part of how we’ll face the challenge of the future. 

Agriculture does have a bright future. There is new elements 

moving in every day, and the way we take advantage of those, it 

is very important that we hear some of that from you. And thank 

you, Mr. Chairman, for allowing me to join this Committee today. 

The CHAIRMAN. Thank you. And while Conrad is not a member 

of the Committee, he is what we call the sheriff of the posse, which 

is a group of senators that are non-Ag committee members that 

meet on a regular basis, and Senator Roberts suggested this idea, 

and Conrad has done a great job of chairing that group, and Roberts and I meet with them regularly to make sure that they understand what’s happening within the Committee and to get the ideas 

from folks from other parts of the country that are interested in agriculture that aren’t on the Committee. So thanks, Conrad. 

We, as is our practice, invite all of our Governors of the states 

that we go to, and I can’t tell you how pleased I am today to have 

a chance, first of all, to meet Governor Schweitzer, but most importantly to have him come be with us today, and share a few 

thoughts with us. So Governor Brian Schweitzer, welcome very 

much to the Ag Committee hearing, and we look forward to hearing 

some comments from you. 

STATEMENT OF HON. BRIAN SCHWEITZER, GOVERNOR OF 

THE STATE OF MONTANA 

Governor SCHWEITZER. Well, thank you and thank you for coming up here and thank you for taking the time, and, of course, Senator Salazar, my good friend, thanks for coming up from Colorado. 

We share a lot of concerns, we have a lot of the same crops, and 

our producers are facing many of the same challenges. 

And I want to thank Senator Baucus for being a leader for farmers and ranchers in Montana for 30 years. And Senator Burns, 

Senator Chambliss when he mentioned that you were the sheriff of 

the posse, he probably doesn’t know the story about the Plummer 

Gang and the Vigilantes here in Montana. Things didn’t end well 

in Montana for the sheriff. So we don’t want to bring up the posse 

in Montana, the Vigilantes actually won that one. 

Senator BURNS. Just be aware of it, though, just be aware of it. 

Governor SCHWEITZER. Well again, welcome to Montana, and, of 

course, in Montana we face a lot of challenges. And one of them 

that I would like to address is in the cattle industry, is that we are 

faced with the largest border in America with Alberta and the challenges that Alberta has had as a center of BSE, and this border 

that is open some days and partially open other days, and the concerns that our cattle industry has commingling that Alberta beef 

with our beef. 

So we are going to need a little help in managing disease. Of 

course, in northern Alberta, their buffalo have brucellosis, and in 

6

the Yellowstone Park area, there is brucellosis as well, and so we 

are trying to manage not one just one disease, brucellosis, but two, 

BSE. So please pay attention to our cattle industry in Montana. 

We in Montana recognize our opportunities. Our opportunities 

are that we are a long ways away from the ocean, but we are also 

a long ways away from imported oil. It’s kind of perverse, because 

Montana farmers work for 364 days a year, and they load their 

crop on a railroad on 1 day and they give 35 percent of the value 

of that crop to the railroad. 

Now that grain is shipped to the port, put on ships, and it’s sent 

over high seas, all the way over to some place in the Third World. 

At the same time, in the Third World, they are loading a boat full 

of oil, and out on the high seas, that big ship loaded with grain 

coming from Montana meets a big ship with oil that comes to our 

ports and then refines the product and ships that fuel inland where 

we use that diesel to produce the crop. And the farmers, by the 

way, pay the freight both ways. It is time that we take a proactive 

stand in producing our biofuels in this country. Just to give you a 

little example about mixed signals that we get out here in the 

country, the National Governors Association meetings over the last 

year, we have had folks come and speak to us from the major oil 

companies, and they showed us the charts, they say that 30 years 

from now, 1 percent of our fuel portfolio will be alternative fuels, 

all alternative fuels, 1 percent. At the last National Governors Association, a member of the Bush Administration came from the Department of Energy, and said, by the year 2030, 30 percent of our 

portfolio will be ethanol. 

So these are mixed signals that we are getting, we are getting 

industry saying it’s going to be one percent, and the administration 

says it’s going to be 30 percent. Let’s focus on what’s realistic. If 

we converted all 58 percent of the bushels of wheat that we export 

from this country, and all 34 percent of the soy beans and all 18 

percent of the corn to biofuels, we get to maybe 20 percent. So we 

have to be realistic on what we can do. And if we are going to do 

it, first off, we have to go out to farmers and say, you are growing 

wheat right now, we’d like you to produce a biofuel, then we’d better have an insurance program that makes sure that they are protected, so that when they go to their bank, and that’s what we do 

in the spring, we go to our bank and we say, now we want to borrow our production costs, and the bank says, we will loan to you 

what the Federal crop insurance is. 

Farmers are faced with that every day. The farmers say I would 

like to try some biofuels, and the banker says you better stick with 

wheat. So we need to have a safety net that sends direction to our 

farmers to produce biofuels. We need to say to our farmers that we 

are going go change our price stability system, not just for the crop 

that you grow, but the fuel that you produce. We have had a price 

stability system for our major crops in this country for 50 years. 

If we want these farmers to be partners in producing the fuel, and 

we need them to be partners, because that’s where the value of this 

crop is, in the fuel, not the crop itself, then we need to say to them, 

we will have loan guarantees for producing the plants, and we will 

have loan guarantees for you on the production end of that fuel. 

7

We have opportunities, we talked about camolina in Montana, 

this is just one of our crops, this is a biodiesel we produce in Montana. We need to be realistic, but we need to send signals to the 

market that we are serious about biofuels. Once again, thank you 

for coming to Montana. 

The CHAIRMAN. Thank you very much, Governor. At this time I 

am going to call our first panel up. We have Mr. Dave McClure 

from Bozeman, Montana representing the Montana Farm Bureau, 

Mr. Eric Doheny from Dutton, Montana, representing the National 

Farmers Union, Mr. Tony Belcourt from Box Elder, Montana, representing the Intertribal Agricultural Council, Mr. Dale Schuler 

from Carter, Montana, representing the National Association of 

Wheat Growers, Mr. Dave Henderson from Cut Bank, Montana, 

representing the National Barley Growers, Mr. Paul Tyler from 

Moore, Montana, representing the U.S. Canola Association. Gentlemen, thank you all very much for being here today. We have your 

prepared statements which will be submitted in full for the record. 

We are going to limit—we are going to be very strict in this—your 

opening comments to three minutes each, but we look forward to 

hearing your comments, and then to hearing your responses to the 

questions. 

So, Mr. McClure, we will start with you, and Mr. Doheny, we will 

go right down the line. Mr. McClure? 

STATEMENT OF DAVE McCLURE, MONTANA FARM BUREAU, 

BOZEMAN, MONTANA 

Mr. MCCLURE. Yes, thank you, Mr. Chairman, and also I would 

like to thank you for sharing your thoughts with the Council of 

Farm Bureau Presidents just last month in Washington, D.C., I appreciate you sharing that with us. 

I am Dave McClure, president of the Montana Farm Bureau Federation, and a farmer from Lewistown, Montana. Our state office 

is in Bozeman. Thank you for this opportunity to testify concerning 

the upcoming farm bill debate. On behalf of our members, board of 

directors and staff, the Montana Farm Bureau welcomes the Senate Ag Committee to the Big Sky State and is pleased to be able 

to make these comments. Two major factors influencing the farm 

bill discussions are the Federal budget deficit and the stalled WTO 

talks. These factors make it difficult to justify major changes in 

U.S. farm policy at this time. Farm Bureau supports an extension 

of the current farm bill until a new WTO agreement is reached or 

at least extending concepts of the Farm Security and Rural Investment Act of 2002 in the next farm bill. 

It’s vital that we do not reduce domestic farm support so that our 

trade negotiators have the leverage necessary to improve world 

trading rules, reduce foreign import tariffs that limit our ability to 

export, and stopping the unfair export subsidies by our competitors 

is a worthy cause. 

We applaud the aggressive efforts to create opportunities for our 

producers. Our present farm policies evolve from earlier efforts to 

set aside and limit production to set aside—and divert acres. It became apparent in the 80’s, as we cut back, our competitors worldwide increased their production and our price support programs 

8

gave them a safety net and the opportunity to take away our markets. 

As a member and chairman of the Montana ASC State Committee in the mid 70’s, I became acutely aware of the inefficiency 

of the supply management programs. It took at least 20 percent 

set-aside to achieve 11 percent reduction in production. We must 

not return to supply management programs or attempt to store our 

way to prosperity. I commend the Congress and the senate for their 

recognition of this fact, and that those programs of the past were 

not working and for crafting recent laws that increase producer reliance on the market place rather than fixed price supports. 

The producers of program crops generally liked the 2002 Farm 

Bill because it works and they have the flexibility to decide on 

their own what crops to grow. And certainly the discussion on ethanol and biodiesel, we need to have that opportunity to change 

grounds. 

It’s vitally important we maintain the safety net of deficiency 

payments and countercyclical compensation, although some tweaking may be needed. The increased cost of fuel and fertilizer is 

ample evidence that funding for commodity programs should not be 

reduced but should be increased. Those costs are eating our lunch 

and limiting our ability to pay debts and replace equipment. It’s in 

the national interest to keep our food production sector competitive 

and profitable. More importantly, a case can be made that farm bill 

benefits outweigh the costs. While spending on non-farm programs 

in the farm bill, about two-thirds of the funding, is costing what 

was projected, spending on the three farm program components, 

commodities, conservation and export programs is well below the 

estimates made in 2002; in fact, 19 billion less than projected over 

the first four years of the farm bill. 

How many farm programs stay below budget at that expense? So 

we think that the current farm bill has proven to be a good investment for America. Farm Bureau opposes any changes in the current farm bill payment limitations. One of the primary objectives 

of the 2000 Farm Bill was to improve the financial safety net available to farmers. 

If limitation and benefits are made more restrictive, a significant 

number of farmers would not benefit from the improved safety net. 

Simply stated, payment limitations bite hardest when commodity 

prices are lowest. Our Federal crop program is based on production. Time and time again, this has proven to be the best manner 

for distributing assistance to families most responsible for producing this nation’s food and fiber. Thank you for the opportunity. 

[The prepared statement of Mr. McClure can be found in the appendix on page 78.] 

The CHAIRMAN. Yes, sir. OK. Guys, here is our rule. This light 

right here means you have gone two minutes; this yellow light 

means you have got one minute left. When the red light goes off, 

that’s it. That’s the way we operate in the senate. Mr. Doheny——

Senator BAUCUS. Sometimes. 

The CHAIRMAN. We are pleased to have you with us, we look forward to your testimony. 

9

STATEMENT OF ERIC DOHENY, MONTANA FARMERS UNION, 

DUTTON, MONTANA 

Mr. DOHENY. Thank you. My name is Eric Doheny, and I am a 

fourth generation producer from Dutton, Montana. 

I am a member of the Montana Farmers Union, and believe that 

family farmers and ranchers at a critical juncture in our existence. 

State and Federal programs need to be structured to benefit and 

protect the family farm. 

That being said, I want to reiterate what Senator Baucus has 

said, and if we had a higher price for our wheat, a lot of this would 

be moot. We have got the tightest world stocks of wheat known to 

man, and we are at upper to middle three- dollar wheat, and now 

I will proceed on, but holding no punches, I wanted to put that out 

there. Farmers Union believes the 2007 Farm Bill should include 

a permanent weather-related disaster assistance program. 

A plausible funding solution for offering a permanent disaster 

program would be to replace decoupled payments to producers with 

permanent nationwide disaster assistance. In the current farm bill, 

the countercyclical safety net and direct payment works and should 

be continued. We support the full funding of CSP. Continuing CRP 

only on the most environmentally sensitive lands and offering 

shorter-term CRP contracts for specific conservation needs. Enrollment of whole farm CRP contracts should be prohibited due to the 

detrimental effects on rural communities. 

Free trade and fair trade are incongruent terms in today’s world. 

Trade negotiations must include labor and environmental standards as well as currency manipulation. Free trade establishes a 

race to the bottom. Fair trade ensures an adequate, high quality, 

safe and affordable food supply. We call for a thorough analysis of 

current agricultural trade agreements to determine their success at 

meeting their stated goals before any new bilateral or regional 

trade agreements are negotiated. The measure of the success of a 

trade agreement has to be its benefit to agriculture and producers’ 

net income. Mandatory COOL was to be enacted in 2004, but as 

yet to be implemented. We support and are working toward a new 

sustainable economy that would rely increasingly on renewable 

sources of energy, such as wind, solar, biomass, anaerobic digesters, ethanol and cellulosic ethanol and biodiesel. We need that renewable fuel standard. 

The measure of success of any farm bill has to be the level of net 

income for producers. Farm policy should not be developed for multinational corporations, processors, exporters, integrated livestock 

producers, and firms who profit from low commodity prices. Farm 

policy should not be developed for multinational corporations, processors, exporters, integrated livestock producers, and firms who 

profit from low commodity prices. We expect higher loan rates, better targeting and oversight of farm program payments to family 

farms, Federal agricultural policy with strong conservation and energy components that prioritizes the interests of independent family farmers and ranchers. It is not vital just to the people on the 

land, but to our country. 

It is our hope that the Committee will keep this mind as it works 

to prepare future policy. I wish to thank the Committee for this opportunity to testify. 

10

[The prepared statement of Mr. Doheny can be found in the appendix on page 62.] 

The CHAIRMAN. Thank you. Mr. Belcourt. 

STATEMENT OF TONY BELCOURT, INTERTRIBAL 

AGRICULTURE COUNCIL, BOX ELDER, MONTANA 

Mr. BELCOURT. Thank your, Mr. Chairman. I am here on behalf 

of the Intertribal Agricultural Council. We are an organization that 

represents Indian tribes across the country. And I guess with our 

unique government status as tribes across the country, it also creates unique disadvantages and advantages in relation to the farm 

bill. 

There is a lot of mention of farm programs and safety nets and 

whatnot, but if you don’t have an Indian farmer or rancher, them 

are all fruitless. So, you know, we got to create some direction for 

the Bureau of Indian Affairs, they are a trustee of ours that signs 

off on all these things that we do on trust land. When is the last 

time we ever seen the Bureau of Indian Affairs sign off on a contract guaranteeing production in agriculture. I think the farm bill 

needs to be rewritten, but I think we need some help in rewriting 

that with the Intertribal Agricultural Council, we need to be given 

direction on things that work for Indian country, it ain’t working 

right now. 

I think the biggest factor we have is educating our producers. We 

have a 20 billion dollar Indian gaming industry, but if we can’t get 

that product to them, it is fruitless. We are still sitting here struggling trying to get our youth established, trying to get farmers to 

be farmers. 

As an affiliate member of R-CALF U.S.A, we appreciate pushing 

on for the country of original labeling. Indian casinos are demanding Indian products, but we can’t deliver. So with that, I thank 

you, and I’d be happy to answer any questions. 

[The prepared statement of Mr. Belcourt can be found in the appendix on page 46.] 

The CHAIRMAN. You are under the clock, so we appreciate you 

very much. Dale, it’s good to see you again. I look forward to your 

testimony. 

STATEMENT OF DALE SCHULER, PRESIDENT, NATIONAL 

ASSOCIATION OF WHEAT GROWERS, CARTER, MONTANA 

Mr. SCHULER. Thank you, Mr. Chairman, members of the Committee. My name is Dale Schuler. I am a wheat farmer from 

Carter, Montana, and I’m currently serving as president of the National Association of Wheat Growers. 

I thank you for this opportunity to discuss our members’ concerns about the current and future farm programs. Effective farm 

legislation is essential, not only for wheat growers, but also our 

rural economies, and also the American consumers. 

Farm programs were designed to cushion the boom and bust cycles that are inherent to agricultural production and to ensure a 

consistently safe, affordable and abundant food supply for the 

American people. The 2002 Farm Bill has strong points, and the 

wheat growers that I represent here today believe that the next 

farm bill should build on these strengths. But while wheat growers 

11

generally support the current policy, much of the safety net provided in the 2002 bill has not been effective for wheat producers. 

Since 2002, wheat growers have received little or no benefit from 

the two key components of the current bill. The countercyclical program and the loan deficiency payment program for two main reasons. The loan program and the LDP are useless when producers 

suffer crop failures, and second the target price on the countercyclical program was set too low. As a result, there has been very 

little support in the form of countercyclical payments or loan deficiency payments. The support level for wheat compared to some of 

the other commodities for the 2002 to 2005 crop years as a percentage of production cost is relatively low. We believe that wheat producers deserve to have a viable safety net also. 

There is no doubt that American farmers would rather depend on 

the market place than the government for their livelihoods, but the 

current economic and trade environments do not offer a level playing field in the global marketplace. Many of our trading partners 

support their farmers at a much higher level than we do here in 

the United States. At the same time, we face continually increasing 

production and transportation costs. Fuel and fertilizer prices are 

estimated to increase 24 to 27 percent for wheat growers just from 

last year, as estimated by a recent FAPRI report. These issues, 

along with potential changes in the WTO rules must dictate that 

we look at different options in the 2007 Farm Bill. 

Also our members would like to see conservation programs continue as presently authorized, but funding should allow all of our 

producers the opportunity to participate in these valuable programs. We also believe strongly in the pursuit of renewable energy 

from agricultural sources and support additional incentives for further research and development of renewable energy initiatives, specifically cellulosic ethanol. In closing, I must state that we firmly 

are committed to developing an effective 2007 Farm Bill, and welcome the opportunity to work with you to do so. Thank you for this 

opportunity. 

[The prepared statement of Mr. Schuler can be found in the appendix on page 96.] 

The CHAIRMAN. Thank you. Mr. Henderson. 

STATEMENT OF DAVE HENDERSON, NATIONAL BARLEY 

GROWERS ASSOCIATION, CUT BANK, MONTANA 

Mr. HENDERSON. Mr. Chairman, members of the Committee, 

thank you for the opportunity to appear before you today. My name 

is Dave Henderson and I farm near Cut Bank, Montana, where we 

grow irrigated barley, spring wheat, and alfalfa. I have been a director on the National Barley Growers Association board since 

2003. NBGA has serious concerns regarding the level of support 

barley receives, relative to other crops in the current farm program. 

We believe barley has lost significant competitiveness in its traditional growing regions, due in part to distortions and Federal 

farm support levels. Acreage trends certainly underscore our concerns. The NASS June 2006 acreage report barley seeded at 3.5 

million acres, a 10–percent decline from 2005, and the lowest 

planting since estimates began in 1926. I want to thank the ComVerDate 0ct 09 2002 12:44 Nov 13, 2006 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 C:\DOCS\30132.TXT SAG2 PsN: SAG2
12

mittee for its support in honoring our request for FAPRI analysis, 

to look into the root cause for our barley acreage decline, specifically if the farm bill might be contributing to it. 

According to preliminary findings, marketing loan benefits have 

clearly favored corn and soy beans over barley and wheat. In the 

northern plains, marketing loan benefits the last 5 years averaged 

$4 per acre for wheat, $8 for barley, $12 for soy beans and $21 for 

corn. At the national level, the combination of marketing loan benefits and market returns explained the increase in national corn 

and soy bean acreage and the decline of small grain production. 

However NBGA does support the continuation of the marketing 

loan program, at equitable levels amongst the program crops. If the 

marketing loan were diminished or eliminated due to WTO concerns, a similar provision, such as the Viable Revenue Assurance 

Program would need to be developed to take its place to continue 

providing a viable safety net for producers during downturns in 

prices or production. We also support continuation of the Direct 

Payment Program, which is the best means to get much needed 

operating money into the hands of producers. We also support continuation of the planting flexibility provisions that have been in 

place since 1996. NBGA believes better risk management programs 

are also needed that will adequately address multiyear losses, as 

well as provide a safety net for the high deductibles we face under 

current crop insurance policies. 

We currently have a barley risk management task force working 

hand in hand with RMA on innovative ways to address these challenges. With regards to the ongoing drought in much of the country, we support disaster assistance for the 2005–06 crop losses and 

encourage debate for a permanent disaster provision in the next 

farm bill. Thank you again for the opportunity to testify. 

NBGA fully understands the challenges you face as you write the 

next farm bill, however, farmers must continue to be offered a viable safety net if the United States is to maintain a safe, homegrown supply of food. We are ready and willing to work with the 

Committee in the coming years to develop provisions to address 

these needs. Thank you. 

[The prepared statement of Mr. Henderson can be found in the 

appendix on page 76.] 

The CHAIRMAN. Thank you. Mr. Tyler. 

STATEMENT OF PAUL TYLER, U.S. CANOLA ASSOCIATION, 

MOORE, MONTANA 

Mr. TYLER. Mr. Chairman, members of the 

Committee, my name is Paul Tyler, I’m a third generation plow 

horse from Moore, Montana. I raise wheat, barley, hay, kids, cows 

and canola, and sometimes beef if the antelope are in a good mood. 

I have been a producer board member on the U.S. Canola Association since 1999, and thank you for allowing me to speak on their 

behalf. I would also like to thank our representatives for a chance 

to host a meeting of this importance in our own state. 

Canola is the healthiest vegetable oil produced today. It’s got a 

saturated fat content of only seven percent, along with a total oil 

content of 43 percent, which in turn also qualifies it as an excellent 

feedstock for biodiesel and bio-oils. 

13

The U.S. grows about a million acres of canola today, which isn’t 

enough to supply our needs. We import twice as much as we 

produce. 

The USCA urges the Committee to work toward preserving the 

budgetary baseline for the farm bill. A viable safety net for producers will not be able to be provided by the next farm bill if further funding cuts take place. The USCA urges the Committee to 

construct the supports provided by the next farm bill in a manner 

that is equitable amongst the eligible crops to insure that farmers 

receive their planting signals from the marketplace, and not the 

FSA office. 

We also support continuing the full planting flexibility that was 

introduced in the 1996 Farm Bill. 

The 2002 Farm Bill supports canola and other oil seeds, primarily through the marketing loan program, which we strongly 

support and also the direct payments, of course, understanding the 

restraints of the WTO concerns, and the planting restrictions for 

fruits and vegetables, which will have to be dealt with. At this time 

the USCA does not have a formal position regarding the revenuebased program options that are being bandied about, but we are 

certainly willing to take a look at them. And as a producer, I am 

especially interested in the concept of that, because for the first 

time it brings an input cost to the equation. 

The USCA does support the development of a permanent disaster 

provision in the next farm bill, and to help the U.S. decrease its 

energy dependence on imported crude oil, the USCA also supports 

a stronger energy title in the next farm bill, maybe even a consideration of an energy incentive for planting a biofuel crop. 

In closing, I would like to say USCA understands with the WTO 

negotiations and budget deficits that we to have deal with, it’s 

going to be a tough, tough battle, but we are prepared to work with 

Congress and you as the Committee, and look forward to the challenge. Thank you. 

The CHAIRMAN. Thank you very much to all of you. 

We have a couple of questions that we have asked to each of our 

commodity panels, as we travel around the country, and I would 

like to start with you, Mr. McClure, and have you give us a very 

quick answer to a couple of questions. First of all, how would you 

prioritize the programs of the farm bill generally, and the commodity titles specifically; how would you rank the relative importance of the direct payment program, the marketing loan program 

and the countercyclical payment program. 

Mr. MCCLURE. These are important comments, but some statements have been made here, we may not be on an equal basis with 

some other crops. We think that tweaking on those adjustments 

within the program are necessary. It’s important to have the countercyclical program so that when prices are low, then the payments 

kick in. We have had a pretty good 4 years, as I mentioned, with 

less expenditures than what the Congress anticipated. 

[The prepared statement of Mr. Tyler can be found in the appendix on page 103.] 

The CHAIRMAN. So how would you rank those programs? 

Mr. MCCLURE. Well, I think direct payment and countercyclical 

are probably at the top of the list. But because of the 7 years or 

14

so of drought in Montana, our average yields are lowering and we 

are suffering because of that. So we need to work on that area, as 

well as the Federal crop insurance, so that we can insure for our 

total costs that we have put into the crop. 

The CHAIRMAN. Mr. Doheny? 

Mr. DOHENY. I would have to agree with Mr. McClure, I think 

the direct payment and the countercyclical are right up there at 

the top of the heap, we need to make sure we have assurance, if 

we have bad years and drought and low prices that we can sustain 

for those hopeful bust years. 

Mr. BELCOURT. I guess mine would probably be the conservation 

programs, I think they would probably be the top of our list. You 

know, getting back to direct and countercyclical payments, without 

those histories and basis and stuff, tribes are at a disadvantage, 

because we haven’t been participating in farm programs. So we 

don’t even have a basis, and that is what puts us at a disadvantage 

in getting into those payments and stuff he was talking about. So 

conservation programs is No. 1 priority. 

Mr. SCHULER. Mr. Chairman, all the programs under the farm 

bill, we think are very essential. Commodity, conservation, energy 

and also the nutrition programs we think serve a vital role to our 

society. But for our members, the commodity title is of course of 

most importance. And of the components of the commodity title, we 

would rank those as being the direct payment being most important, the countercyclical being second, and the marketing loan, 

LDP programs, as our third priority. 

The CHAIRMAN. Mr. Henderson. 

Mr. HENDERSON. A survey of barley growers, the direct payment 

is definitely the most important of the three. It’s reliable, it’s budgetable, you can take it to the bank, and it’s non-trade distorting. 

Second most important was our marketing loan program, and the 

third the countercyclical. 

Mr. TYLER. I guess I would basically echo what these folks have 

said. Commodity title is very important, we don’t want to lose that, 

and to rank them, it’s really hard to do, but probably direct payments, and similar to what these guys have said. 

The CHAIRMAN. We talked a lot about energy, and we are definitely going to expand the energy title in the next farm bill, we 

don’t know to what extent and just how we are going to do it yet, 

but should any expansion of the energy title or the conservation 

title come at the expense of the commodity title. Mr. McClure. 

Mr. MCCLURE. No, I don’t believe so. But times are changing, I 

think the fact that we are having production of ethanol and biodiesel is helping Montana, even though it’s not occurring here. The 

conversion of sugar cane in some South American countries, for instance, is taking some of that sugar off the market, and our sugar 

producers in Montana are enjoying an increase in cost. 

So as we convert some of these crops that are in surplus into energy production, that’s going to help all of us. I think the next farm 

bill should encourage that, but not take away from the present 

commodity programs. 

Mr. DOHENY. I would like to correct myself from that last statement, for those boom years, not those hopeful bust years, sorry. 

15

But, no, I don’t believe that we should cut commodity programs, 

in the effort of energy programs either. But I think the energy programs have the most—they are most optimistic for the State of 

Montana. I think the energy renewable resources has potentially 

the best economic benefit this state has ever seen, if we can get it 

up and running. We need help to get it up and running. 

We need those people, just as Schweitzer was saying, to allow 

farmers and ranchers to take a chance when their banker right 

now won’t allow them to. We need some incentives and some loan 

programs to help us to get our feet off the ground. Mr. Belcourt? 

Mr. BELCOURT. I agree. I think one of the ways we can do that 

is the value added component of the farm bill. You know, we grow 

these crops, if we can get another value out of them, such as ethanol or wheat gluten. I think that would just further enhance our 

productivity and give us another safety net to fall back onto. So—

I guess I go back to tribal governments, and how they utilize the 

farm bill, that language is not available at this present time to get 

into those markets. 

Mr. SCHULER. We don’t think that the commodity program 

should be compromised to fund energy or conservation programs, 

although we are very interested in the possibilities under an energy title of the farm bill that would help wheat growers contribute 

both grain products and biomass to meet our nation’s growing demands for renewable energy. These issues I think are of a national 

priority, and new funding should be provided to them, and not take 

funding away from the commodity programs. We encourage programs that help us produce more of our energy domestically, but 

we don’t feel that we should sacrifice food security for energy independence. 

Mr. HENDERSON. We encourage properly implementing the CSP 

program, and being an FSA committeeman, I am aware that there 

is a tremendous backlog of conservation programs that are sitting 

idle, they don’t have the money to begin them. So there is a tremendous amount of importance for conservation, and the demand 

that’s coming for ethanol, very important. But if these energy programs are successful, we believe that they will support the decoupled payments—the coupled payments. 

Mr. TYLER. We’re of course extremely interested in any energy 

incentives, but I think the main concern here is that if the commodity title was sent to another title, that it not get diluted 

amongst other appropriators, and just kind of get lost in the shuffle. So I think it’s pretty important that we maintain the commodity title. 

The CHAIRMAN. Senator Baucus. 

Senator BAUCUS. Thank you, Mr. Chairman. As we pursue ways 

to boost renewable energy crops, and so forth, this Committee, the 

farm bill this Committee writes has a lot to say about that. 

But there are also a lot of other provisions of the law which are 

not privy to this Committee, and one is tax incentives. Currently 

the law, the provisions in the last couple years, there is a fifty cent 

per gallon tax credit for the production of ethanol. 

There is also currently in law a one dollar tax credit per gallon 

for the production of biodiesel fuel. Now, I am asking the general 

question, in addition to that, or whatnot, what is the best way in 

16

your judgment here in this farm bill to give the real boost to alternative energy crops. You know, some don’t have the protection of 

insurance, crop insurance, some do have the protection, but just if 

you were to kind of sit back a little bit and say, OK, we in Montana, and as a nation, but right now we are in Montana, want to 

give a real boost to production of these biodiesel and ethanol, and 

all these crops, what changes would you make in the current farm 

bill to help that happen anybody? Let’s go the other way, we will 

go down this way this time. 

Mr. TYLER. I think that——

Senator BAUCUS. Well, let’s start the other way then. Anybody 

that wants to, raise his hand. 

Mr. DOHENY. I think that if we had a loan rate for these——

Senator BAUCUS. I am sorry? 

Mr. DOHENY. A loan rate, if we had a loan rate for your 

camolinas, and maybe a higher loan rate for your canola, to get biodiesel out of that, et cetera, et cetera, these crops that we have unforeseen, if we can get a loan rate and get assurance that I can go 

to my banker and say you know what, I don’t want to spend all 

my money on fertilizer, and the input cost that I’ve been putting 

in the last 30 years ago, and I don’t want to give $50 or this year, 

70, $80 an acre to BNSF to get it to the port. And to go to my 

banker and say I want to spend this money and try to help the 

whole nation, help our county, our state, I think if I can go to my 

banker and say, I am not going to put in wheat, I am going to put 

in camolina, and we have some assurance that I can cover my loan. 

Senator BAUCUS. It’s a loan rate you want. 

Mr. DOHENY. Yes, I am referring to my banker’s operating note 

as well. I think we need that to be able to go in and actually put 

it in and say I’m not going to. 

Senator BAUCUS. Any other? 

Mr. BELCOURT. New market tax credits, I know incentives out 

there right now, but when you get to tribal governments, they don’t 

apply to—we are doing an ethanol project right up here, and we 

are working with new market tax credits with a company out of 

Minneapolis, when there’s one that’s got some go-zone tax credits 

90 miles away. So expanding that a little bit and allowing tribal 

governments to participate would be a big help in our area. 

Mr. SCHULER. I think that tax credits are an excellent idea to 

help a developing ethanol industry get started, especially new technology, like cellulosic ethanol. There also needs to be some research 

dollars directed toward developing new technologies for processing 

biomass, whether it be wheat straw, barley straw or switch grass, 

other types of crops we can grow here in Montana, to get those to 

where they are profitable for these entities that might be developing these plants. 

Senator BAUCUS. Other thoughts? 

Mr. MCCLURE. Well, I agree with your other comments on tax incentives and research and probably demonstrating projects are essential, but it has to make economic sense. And if you can’t attract 

outside private investments, then might be questionable. I think 

we ought to do everything we can to produce our own energy in 

this country, and hopefully some of that will be in Montana. 

17

Mr. TYLER. I know some of the struggles we have, the U.S. 

Canola Association is a little bit unique, because it’s not just producers, every facet of the industry sits at the table. And one of the 

things we go around about is, of course, for the guys with producers hats on, it all starts right there, if the producers don’t make 

any money, nobody else can add value down the road. 

And so we struggle with how do we do that. And I think there 

has to be some kind of an incentive, a grower incentive or some 

such thing that entices growers to try it, and there is a lot of interest in the biofuels, and the bio-based crops, but it’s got to start at 

the producer level. 

Senator BAUCUS. I would like to ask a question about trade. As 

you know, we Americans our average import duty on agricultural 

products coming into the United States is quite low; I think it’s 

around 12 percent. In Japan, I think it’s 60 percent, something like 

that, and Korea, it’s like 50, in the European Union, the average 

is about 35 percent, India is about 112 percent. So as we look toward the future, and get better, you know, revenue for our crops, 

clearly we have got to sell more, and knock down those trade barriers, because the Doha Round, it’s all hung up now and nothing 

is happening, it kind of ties into the next question when we extend 

or rewrite the farm bill, I am curious, the thoughts you have on 

what we should do about the imbalance in trade, that is with other 

countries is so unfair, how aggressively should we do something 

about that interim. 

And the second is, looking down the road, should we write the 

farm bill, do we just pretend like coupled programs are just as good 

as decoupled programs, that is WTO, you know, inconsistent programs are just as good as consistent programs? Your thoughts, 

anybody on that one. 

Mr. MCCLURE. Thank you, Senator. And I think you’re pointing 

out something important here. The farm bill and farm policy is important, but just as important is trade agreements, energy policy 

and tax policy; we need to work on all those. But on the trade 

agreements, in my view, the only reason to oppose negotiations is 

if everything is perfect. And it’s not. So it’s a valuable exercise to 

pursue these agreements that will knock down some of these trade 

barriers and give us opportunities. 

We’d also request the senate to move quickly to reinstate the 

trade promotion authority which expires next year. At some point, 

WTO talks will resume, we are assuming, and for our negotiators 

to have credibility, they need to have that trade promotion. 

Mr. SCHULER. Trade is very important to us; 50 percent of the 

wheat that’s produced in this country is exported, and from Montana somewhere around 80 percent. And since the vast majority of 

the world’s population lives outside of this country, that offers the 

greatest growth potential for our market. Just because the Doha 

Round has stalled does not insulate us from litigation from trading 

partners, as you well know. So we need to design a farm program, 

even in the absence of the Doha agreement that takes into consideration some of these restrictions on trade-distorting program payments. 

18

So we think that going with a decoupled direct payment would 

be the best option for that, while still utilizing some of those amber 

box or minimally trade distorting subsidies. 

The CHAIRMAN. Senator Salazar. 

Senator SALAZAR. Thank you very much, Mr. Chairman Let me 

just put a major underscore on the question that Senator Baucus 

asked, and that is to start getting specific on what kinds of energy 

ideas we should include in this new energy title of the farm bill. 

It’s the talk of the town, it’s the talk of the nation, it’s a national 

imperative. But we need to get down to the conceptual ideas that 

we are talking about figuring out how we are going to make it 

work on the ground. 

I heard you talk about tax credits and incentives, research dollars for cellulosic ethanol and the like demonstration projects, 

grower own concepts, to make sure that it benefits the growers. 

But I think as we move forward, not only this Committee, but also 

the Energy Committee that I sit on and other committees, it’s 

going to be something that’s going to be very important to the 

country, so the more specific you can get on those kinds of ideas 

in response to Senator Baucus’s questions, it will be very important. 

Let me ask a question relating to the Conservation Reserve Program. I know there is a lot of acreage we have in CRP, right here 

in Colorado from some of our producers fear that they’re concerned 

that much of the money that is going into CRP is actually going 

to New York, Dallas, Fort Worth and other places, and that it is 

having a negative impact on rural communities, and part of what 

I think we are trying to do in this farm bill is making sure that 

we have the rural landscape rural communities on the radar 

screen. 

Mr. Doheny, you talked a little bit about the whole farm concept. 

Are there changes that we have to be looking at with respect to 

CRP so we don’t have a negative impact for that program on rural 

communities. 

Mr. DOHENY. I believe National Farmers Union has in their resolution that they would like to see 25 percent of a farm rather than 

25 percent of a county. If you could do that, then the rest of that 

75 percent of a farm or a farmer that wanted to retire and go to 

Fort Worth, that money stays, and the rest of that land be can be 

leased out, it can be sold to younger producers, it has opportunity 

to stay and generate money in the local community, I think that 

would be great. Twenty-five percent of the county can really devastate one small four or 500 population town within a county, if the 

location is correct. 

Senator SALAZAR. Do some of the rest of you have suggestions on 

how we might be able to revise the CRP Program to address that 

issue? 

Mr. SCHULER. I agree with Eric on his comments about limiting 

the participation per farm, but also I believe that CRP rental rates 

should never exceed what typical cash rental rates for farm ground 

are in a particular area. Farmers should not have to compete 

against the government to expand their operations, or for young 

producers to get in involving in farming should not have to compete 

against the government for payment. 

19

Senator SALAZAR. Mr. McClure does the Farm Bureau have a position on this issue? 

Mr. MCCLURE. Well, we do, but if I could back up a little, you 

know, we are talking about 25 percent limitation, but I think the 

major problem sometimes in Montana is that those counties, and 

their local FSC requested extensions to go beyond the 25 percent 

limit. 

And they were granted those, especially Daniels and Sheridan 

County, I think they are in the, you know, 40 or 50 or more percent. So we didn’t stick with the 25 percent limitation, it went beyond it when it was requested. So I think if we had stuck with 

that, it may well have—not be such a problem today. Now, there 

is a problem with taking 25 percent of a productive farm. You need 

to utilize all of your base to have an efficient operation. 

So there are farms, I guess, where if you’ve got some land that 

is highly erodible or subject—might be put in for a payment, but 

to take part of a productive unit out, you have a problem then in 

being an efficient operation. So I think there is going to be a lot 

of discussion on this, but I would like to emphasize that one of the 

big problems is we didn’t stick with the original intent of 25 percent per county, went beyond that it would cause problems. 

Senator SALAZAR. I appreciate those responses. For me, in Colorado, it will be a major issue, because I keep hearing about it so 

much from not only from farmers and ranchers that want to bring 

up the next generation, but also school boards and county commissioners are very concerned. 

Let me ask just another quick question. Some of you in your testimony referred to the need for having some kind of program within the new farm bill that deals with disaster emergency payments 

for the—a more permanent way than we have in the last several 

years. 

Many of us here around this table join in trying to get ag disaster emergency money made available to be the last emergency 

supplemental. We did not succeed. Many of us are going to fight 

back, to do the same thing when we get back in September. But 

what is your concept on how we ought to deal with this issue going 

forward with the new farm bill? 

Mr. BELCOURT. I guess on our behalf, I don’t think you need to 

have a disaster, I think it should be a continuous sign-up. I mean 

every time you go sign up for a disaster, it’s 2 years down the road. 

And like in our case, in tribal governments, we are not even eligible for disaster assistance, because we are a tribal entity. So I 

mean, you’re—it’s a fruitless effort to go sign up, because you are 

not eligible anyway. So that eliminates the thing. But I think you 

need to have it year around. Nobody knows when somebody is 

going to get a fire or disaster, or, you know, I think it should be 

a year-round sign-up, instead of as disaster strikes, because it 

takes a year to get their program running. 

Senator SALAZAR. A couple of other of quick thoughts before my 

time runs out. 

Mr. SCHULER. It’s a complicated issue, and some permanent 

mechanism would certainly be helpful. Crop insurance improvements have helped, but there still needs to be more to our crop insurance programs. If they were more effective, we would not need 

20

disaster assistance as frequently. Also if we could set up something 

like a farm revenue savings account, where agricultural producers 

could put away money when they did have good years to cover 

losses when they had bad years. 

If we could do that on a tax-deferred basis, that would be helpful, 

and if the government would participate in a program that would 

encourage that type of farm savings account, I think that would be 

helpful also. 

Senator SALAZAR. Thank you very much. Thank you, 

The CHAIRMAN. Senator Burns. 

Senator BURNS. With regard to crop insurance, 

Dale, you bring up a good point. Should crop insurance be mandatory in your operation? 

Mr. SCHULER. I think it should be, because many times we have 

seen disaster programs where producers who do not buy crop insurance come in and get equal or greater benefits from those disaster 

programs than producers who spent their own money to buy crop 

insurance to cover their risk. So I think for producers that participate in government programs, they should be required to buy crop 

insurance. 

Senator BURNS. Would you—would you also—and anybody else 

that wants to comment on this—support the idea that the government participation in that premium, that be increased in order to 

make that happen? 

Mr. SCHULER. For producers to afford the higher levels of coverage that are required to cover our increasing operating expenses, 

coverage levels typically above 70 percent right now are not affordable. The premiums just get too high. So increased participation of 

the government in those higher coverage levels would be useful. 

Senator BURNS. Anyone else have a comment on that? 

Mr. DOHENY. I agree with Dale. 

Mr. BELCOURT. Agreed. 

Senator BURNS. That’s the only question I have. 

Everybody else asked my questions awhile ago. But I think, you 

know, if we approach the new risk management sort of in three different directions as your cost of production, factoring in energy 

costs and everything else, I think we can come up—I think we can 

underwrite, and write our policies, and our—a little more refined 

now than we ever could before, because I think we’ve got a better 

handle on the cost of production now than we’ve ever had before. 

So—and I thank you for your comments on that. 

The CHAIRMAN. Well, I thought somebody else would ask this, 

but since they didn’t, I’ve got one other question. Should payment 

limits be changed? 

Mr. HENDERSON. Yes, sir, they should; they really should. They 

haven’t been changed in a number of years and with inflation and 

the cost of living the way it is, there is a room for a definite increase. They do have to be looked at. 

Mr. MCCLURE. Sir, I would have to disagree. I think that those 

larger operations also have larger expenses and larger risks, and 

Farm Bureau is opposed to raising those, or changing those payment limitations. 

The CHAIRMAN. Even increasing them? 

21

Senator BAUCUS. He’s wants to increase. You don’t want an increase? 

Mr. MCCLURE. Yes, we are against reductions. Then I don’t disagree. 

The CHAIRMAN. Anybody else want to respond? 

Senator BURNS. I hadn’t heard that before. 

The CHAIRMAN. I knew Montana was different, but 

I didn’t understand—I understand you didn’t hear him correctly, 

but Dale? 

Mr. SCHULER. Yes, Mr. Chairman, I think they need to be modified, I think they need to be increased, because of the increase in 

cost of production, especially because of energy-related expenses, I 

think we need to increase or at least restructure the payment limitation. As they are now, we have seen the largest payment limitations under the loan programs, the next highest payment limitation 

is under countercyclical. The smallest payment limitation is for direct, and that’s the only program that wheat producers have been 

able to participate in. If we work toward a more direct paymentoriented farm program, we need to increase that payment limitation. 

Mr. DOHENY. I would have to agree with Dale 

Schuler on that, as well as let’s know who we’re giving the 

money to. There’s a lot of your Tysons, and those kind of people 

that aren’t your family farms that are getting the huge monies that 

are—I think we need to be more specific on who we are giving the 

money to. 

Mr. BELCOURT. I agree with that, because we need to get the future farmers. I mean I am a younger gentleman, I guess, and I’m 

probably the oldest one on the reservation that’s farming. And we 

need to get the kids farming, and the grandpas are setting this 

stuff in payment limitation, and their payment limitation out, so 

they just get another entity and they start another corporation, and 

so it just gets out of hand. They are farming the program too much, 

I think. 

Senator BAUCUS. So what about absentee owners, no limitation 

there either? 

Mr. SCHULER. You know—that’s a difficult question to answer. 

Senator BAUCUS. That’s why I asked it. 

Mr. SCHULER. Some absentee landowners offer crop share lease 

agreements where they get a percentage of the farm program, 

other absentee landowners work on cash leases. 

If they shift it to a cash lease, they typically just adjust the cash 

rent to account for the amount of government payments that are 

provided. So that’s difficult to try to exclude them from the program payments. That’s what makes that so difficult. But certainly, 

if the producer is taking the risk in producing that crop, then the 

program payments should go to that producer. 

The CHAIRMAN. Gentlemen, that is a difficult question to always 

answer in every farm bill, and what we have tried to do, and Max 

was a member of the Conference Committee like I was last year, 

this was a huge argument about how we develop a policy that limits government payments to those folks who are working on the 

farm. 

22

And you’re exactly right, if you’re going to crop share, you may 

have a landlord that lives in Chicago who has got risk, because of 

that crop share, and do you deny him the ability to participate. 

So it’s a difficult question to answer, and unfortunately it’s one 

of the areas where we get highly criticized as policymakers, because of the few, and I emphasize that, few high-profile limited 

number of individuals who might receive a payment, but they are 

at risk to some extent. Well, again, thank you very much for being 

here today. We appreciate very much the opportunity to dialog 

with you, and we look forward to staying in touch. And we will call 

our next panel to the front, Mr. Jim Evans, Genesee, Idaho, representing the U.S.A Dry Pea and Lentil Council, Mr. Michael Beltz 

of Hilsboro, North Dakota, representing the U.S. Dry Bean Council, 

Mr. Sid Schutter, Manhattan, Montana, representing the National 

Potato Council, and Mr. Gary Bonestroo of Clovis, New Mexico, 

representing the Dairy Producers of New Mexico. Gentlemen, good 

morning. And we welcome you to the panel, we look forward to 

your testimony, we will follow the same procedures. 

Mr. Evans, we will start with you, and I will remind you of the 

3 minutes, and if you would just keep an eye on the light, and try 

and stick by the time, we’d appreciate it. 

STATEMENT OF JIM EVANS, USA DRY PEA AND LENTIL 

COUNCIL, GENESEE, IDAHO 

Mr. EVANS. Thank you, Mr. Chairman. The first thing I would 

like to show you is one of our new products. This is an energy bar. 

This one is specifically our peanut butter pretzel bar, and I guarantee you it is used with Georgia peanuts also. 

The CHAIRMAN. There you go. This is one of the best pieces of 

edible product I’ve ever eaten, I promise you. 

Senator SALAZAR. Does it work on an airplane? 

Mr. EVANS. I know all you guys have eaten at fine restaurants 

back in Washington, so we would really encourage you to have a 

bite of these and we will take a poll of you guys after the hearing 

to see how good you think they are. My name is Jim Evans, I am 

chairman of the U.S.A Dry Pea & Lentils Council, farmer from 

Genesee, also in the audience joining me today is vice chair of the 

council, Greg Johnson, who owns a large pulse processing facility 

in Minot, North Dakota. 

If U.S. farmers are to compete against subsidized competition, 

high tariffs and phyto-sanitary barriers and government intervention, the following farm programs must be included in the next 

farm bill. Title I, commodity programs, marketing loan, LDP programs. The Marketing Loan Program is the single most important 

farm program tool used on farms. This program provides some protection when prices go in the tank and pays us nothing when prices 

are good. 

The program allows producers to take advantage of market opportunities and satisfies the banker’s need for some downside risk 

protection. We believe the marketing loan program should be made 

a key component in the 2007 Farm Bill. Direct and countercyclical 

payments. We totally support the continuation of the direct and 

countercyclical payments, and we would like to have in the 2000 

Farm Bill, peas and lentils, chickpeas included in the direct and 

23

countercyclical payment. Planting flexibility. Planting flexibility 

must be continued and expanded in the next farm bill. 

Chickpeas, for example, are currently considered a vegetable 

crop. They are not the eligible to be planted under farm program 

rules. We support including chickpeas as an eligible farm program 

crop in the 2007 Farm Bill. CRP, we support CRP, but it needs to 

have some changes. It hurts rural America, it hurts young farmers, 

it just needs to be changed. CSP needs to be fully funded and we 

support the program to be fully funded. WTO, we support the WTO 

program, but want an equal playing field for all commodities. We 

can’t have an unequal advantage from one country to another. 

We support the extension of the 2000 Farm Bill until a fair WTO 

agreement is reached. Cuba, Cuba imports over 200,000 metric 

tons of peas a year, mostly from Canada. A year ago our industry 

shipped over 50,000 metric tons of peas to Cuba, mostly from Montana and North Dakota. This year the administration modified the 

rules of payment and dry sales have plummeted. I would like, in 

closing, we support food aid, MAP and FMD, the phyto-sanitary 

barriers are one of the worst with India, we’re also having problems with selenium in China. 

These things need to be addressed on the WTO playing field, so 

we don’t have these other trade restrictions coming into play. We 

support research and our land grant colleges, we support an energy 

program, but we also think that peas and lentils, because they are 

a natural nitrogen fixing plant, they put nitrogen back into the soil, 

that we should get a benefit, a payment of some kind for growing 

those energy saving commodities, transportation, rail issues, port 

issues, barge issues are all to our things. I will answer any question now. I appreciate the opportunity to testify in front of you 

today. 

[The prepared statement of Mr. Evans can be found in the appendix on page 72.] 

The CHAIRMAN. Thank you. Mr. Beltz. 

STATEMENT OF MICHAEL BELTZ, U.S. DRY BEAN COUNCIL, 

HILLSBORO, NORTH DAKOTA 

Mr. BELTZ. Good morning, Mr. Chairman, members of the Committee. My name is Mike Beltz, I am a farmer from Hillsboro, 

North Dakota. I am here to testify in that capacity and on behalf 

of the United States Dry Bean Council. I currently serve as Chairman of the North Dakota Dry Bean Council and serve as the vice 

chairman of the U.S. Dry Bean Council’s Ag Issues/Government Affairs Committee. 

Mr. Chairman, I am pleased to have this opportunity to present 

views on the upcoming farm bill as it relates to our domestic dry 

bean industry, both from the perspective of a grower and on behalf 

of the domestic dry bean industry as represented by U.S.DBC. 

By way of background, U.S.DBC is a trade association representing farmers, processors, canners, dealers, distributors, and 

others involved in the U.S. dry bean industry. Nearly 20 different 

classes of dry beans are grown in the U.S., including pinto, navy, 

kidneys, blacks, great northern, small red, pink, lima, and other 

classes of dry beans. Dry beans are grown in about 20 states with 

24

major production areas being in North Dakota, Michigan, Nebraska, Minnesota, Colorado, Idaho, and California. 

In 2005, USDA NASS statistics indicate that harvested U.S. dry 

bean acreage was 1.57 million acres, and that production was about 

1.37 million metric short tons. Annually, about 30 percent of dry 

bean production is exported with major importing countries for 

U.S. dry beans being Mexico, the UK and Japan. In looking at the 

upcoming farm bill, the dry bean industry in general, and growers 

specifically, are primarily interested in maintaining equity and a 

level playing field among commodities as it relates to dry beans. 

We feel strongly that the farm bill should provide a foundation 

for maintaining the present stability for dry bean growers and the 

industry, and for achieving long-term growth and health for both 

growers and the industry. Above all, we believe it should do no 

harm to any commodity or producer group, and that it should provide fair and equitable treatment to all segments that comprise the 

commodities that make up U.S. ag. In this regard, it should be kept 

in mind that dry beans are not a program crop, and that dry bean 

growers are not presently receiving support payments from the 

government. 

In fact, dry bean growers have strongly opposed establishing a 

loan or other support program in previous farm bills. And we remain opposed to loans and LDPs. We strongly support the maintaining of status quo for dry bean growers, which includes retention of planting restrictions of non-program crops, non-program 

crop acres for producers, who receive program payments on those 

acres. 

Because of the unique situation of growing dry beans, any 

change in the present status quo will require establishing offsetting 

direct economic compensation to historical dry bean producers to 

maintain fairness and equity. We support the farm bill and believe 

it should provide adequate mandatory annual funding for existing 

programs that benefit fruit and vegetable producers, and should 

also establish and fund new programs that are devoted to dry bean 

research, nutrition information, consumer education, promotion, 

risk management, conservation practices and other related activities that sustain the vitality of ag generally and dry beans specifically. 

My time is out, so I am going to wrap this up real quick. The 

upshot of the deal is we want to maintain the planting restriction 

on fruits and vegetables, and if that’s not possible due to WTO or 

other pressures, we just think that something needs to be done on 

our behalf and for us if such case arises. We also support maintaining the market access program and FMD, food aid programs are 

also very important to us, the funding and establishing of Specialty 

Crop Competitiveness Act of 2004. 

In summary, Mr. Chairman, the dry bean industry and its growers believe the next farm bill should strive to provide equity among 

commodities while maintaining stability for growers, both now and 

in the future. Being a non-program crop, we are especially concerned that actions not be taken that are perceived to be solutions 

to problems facing program crops, but that will have serious unintended consequences and repercussions on non-program crops such 

as dry beans. 

25

Should that occur, equity will demand that offsetting actions 

must be taken to minimize the harm to growers of other commodities, such as dry beans that will be impacted. Thank you again for 

the opportunity to express these views on behalf of the U.S. dry 

bean industry and especially its growers. And I apologize for going 

over time. 

[The prepared statement of Mr. Beltz can be found in the appendix on page 51.] 

The CHAIRMAN. That’s all right. We will excuse you. Mr. 

Schutter—excuse me, Mr. Bonestroo. 

STATEMENT OF GARY BONESTROO, DAIRY PRODUCERS OF 

NEW MEXICO, CLOVIS, NEW MEXICO 

Mr. BONESTROO. Thank you, Chairman Chambliss, and members 

of the Committee. My name is Gary Bonestroo and I’m a dairyman 

from Portales, New Mexico. My wife and I own and operate the 

dairy. I am president of Dairy Producers of New Mexico. 

Dairy Producers of New Mexico is a voluntary organization of 

New Mexico and West Texas; we represent 80 percent of the region’s producers. Dairy Producers of New Mexico has been very active in the debate of national dairy policy, especially on the matters 

which impact prices via dairy farmers. 

If I could define two central realities our members want Congress to consider as they examine the dairy programs they are that 

we operate in a national, not regional, market. And the protection 

that the dairy farmers need from the government in 2006 is vastly 

different from the protection that dairy farmers needed in 1936. 

The role of Federal Government will have included providing government oversight through ensuring all producers receive a fair 

price for their milk. Audits and inspections to ensure that all pricing is done in accordance with contracts empowering the USDA to 

participate in quick, early and effective negotiations, mediations 

and binding reparations of producer’s disputes. Sorry, I scratched 

some out, so I got lost. 

Government policy should be used to encourage and support the 

development of cooperative agencies such as greater southwest 

milk marketing agency to allow negotiations—negotiate a price between that agency and its markets become the basis for any government role in the terms of enforcement, prices and fairness. We 

have demonstrated that producers and processors can bargain 

without intensive government intervention. 

What dairy farmers need are markets, not government payments. These markets are not just Class I markets that have driven our industry for nearly a century, but all markets of all kinds 

of dairy products, and products that use dairy—that use ingredients that come from milk. We need markets in both the United 

States and internationally. We need markets for traditional dairy 

products and markets for our ingredients. Some of these new products, are nutritional bars, power drinks and other products. Producers should have a greater role in establishing the way milk is 

marketed. The greater southwest market needs to use one such 

producer-driven practice that has been beneficial to the producers 

and processors. 

26

National Milk Producers Federation CWT program is another 

producer-funded and run program that reduced production and 

opened up international markets. Dairy producers have been a 

strong supporter of the Federal order system and has actively participated in the hearings regarding pricing issues and the order 

program, but because of the market conditions that existed during 

the Great Depression do not exist today, unless they are changed, 

the Federal order risks hamstringing future producer success. 

Currently there is a fight over the Class III and Class IV make 

allowance. The Secretary properly found that those wanting higher 

make allowances, which means lower producer price, failed to provide evidence in support of the program. All of the milk in the 

southwest is priced on that index of those prices. Every penny that 

the Class III or Class IV price drops, we would see a penny drop 

in our price. The proposed regulations, if adopted, would reduce 

producer income in our region alone by over five million dollars a 

month. With rising energy costs and low milk prices and other 

stress-related reductions in production, we are already in a tight 

economic situation. Our experience would have been shared the 

same way throughout the Nation by all producers. Thank you. 

[The prepared statement of Mr. Bonestroo can be found in the 

appendix on page 58.] 

The CHAIRMAN. Mr. Schutter? 

STATEMENT OF SID SCHUTTER, NATIONAL POTATO COUNCIL, 

MANHATTAN, MONTANA 

Mr. SCHUTTER. Mr. Chairman, welcome to Montana. 

I appreciate the opportunity to provide input to your Committee. 

My name is Sid Schutter. I am a potato grower from Manhattan, 

Montana. I also grow rotational crops, such as wheat, barley, edible 

peas and alfalfa. 

My family is committed to agriculture, and providing the opportunity for our sons to continue to farm and farm profitably. Today 

I am representing the National Potato Council which I am a member of the board of directors. 

I want to highlight the involvement of the NPC with fruit and 

vegetable and speciality crop growers from all areas of the country 

in a joint effort to develop a consensus of the needs of our varied 

industries. In developing our priorities for the 2007 Farm Bill, I 

will address these needs. I want to be perfectly clear on the type 

and nature of involvement of potato growers who will be looking to 

the Congress to provide. Potato growers do not want nor are we 

seeking direct payments on potato acreage. Currently the farm bill 

legislation contains language and creates balance, and applies a 

sense of fairness between those producers who receive direct program payments on acres that have a history of being planted to 

program crops. 

It is critical that your Committee understands clearly the importance of these provisions to potato growers. The demand for potatoes is very inelastic. Small changes in supply can result in dramatic reductions in price. We believe it is a fundamental issue of 

fairness to preserve the restrictions that prevent the planting of 

fruits and vegetables on acres that are the basis for direct, indirect 

or countercyclical payments to growers. 

27

We strongly support maintaining the planting flexibility provisions contained in the current farm bill. We are asking the Congress to provide indirect support to improve the combativeness of 

our industry by funding the following programs: Nutrition programs; we strongly support the new focus in the 2007 Farm Bill 

on increasing the access and availability of fruits and vegetables, 

particularly to children. State block grants; to wide diversity and 

localized needs and speciality crop production, state departments of 

agriculture are uniquely able to assist local growers. 

Invasive pest and diseases; new investments are needed in the 

prevention of the unintentional introduction of plant pests and diseases. Prevention is much more cost effective than mitigation. Research; we need more research in our diseases that affect our crops, 

and in the breeding programs. 

International trade; we need more access and more help in dealing with our trade partners, and try to get away from trade barriers based on phyto-sanitary issues. Conservation programs; we 

would like to see more programs such as the CSP program. Thank 

you for your time. 

[The prepared statement of Mr. Schutter can be found in the appendix on page 99.] 

The CHAIRMAN. Thank you very much. Mr. Evans, why do you 

believe the next farm bill should provide direct and countercyclical 

payments for pulse crops? I say why do you believe the next farm 

bill should provide direct and countercyclical payments for pulse 

crops? 

Mr. EVANS. Right now, we are the only crop that aren’t—that 

don’t have a countercyclical and direct payment, we just have a 

loan program. And with the rising fuel costs, energy costs, I think 

it would be beneficial if we were all on the same level playing field. 

The CHAIRMAN. To Mr. Beltz and Mr. Schutter, proposals have 

been made to provide more money to the speciality crop industry. 

What ideas would benefit the industry the most, and what ideas 

do you have for funding such proposals? 

Mr. BELTZ. Do you want to start first? 

Mr. SCHUTTER. Go ahead. 

Mr. BELTZ. It’s only fair. I threw it to him, he should throw it 

back. Our biggest thing right now is the nutrition side of it. The 

health benefits of consumers eating beans is a big deal. I mean, we 

have dietary guides mentioned—mentioned twice on the new food 

pyramid. Beans are a healthy food, and they do a lot for our producers that grow at a decent price and do a lot for consumers. 

So in that aspect, you know, there is importance in developing 

programs for the consumer education, promotion of risk management, conservation practices, and nutrition information like I mentioned. 

Sources of funding, that’s a good question. I’m not here—I have 

a chart back here that I couldn’t use because of time. But I am not 

here to gore anybody else’s ox. I mean, I am not looking to steal 

from somebody else’s pot. I guess it’s your guys’ job to weigh the 

benefits as opposed to the cost. If you feel it is a benefit that you 

can justify the cost of, you know, then it needs to be supported and 

funded. If you can’t, then it’s your job not to do that. I guess that’s 

my case. 

28

The CHAIRMAN. That’s the best answer you could give. Mr. 

Schutter. 

Mr. SCHUTTER. I would like to see more funding going to nutritional programs. It certainly benefits the potato grower, but it also 

benefits the general public, clearly the school children, go to the 

school, because potatoes are such a nutritious crop, vegetable. 

That’s where I would like to see a lot more funding go to. 

The CHAIRMAN. Do your schools—and I will ask this to anybody—do your local schools take advantage of the opportunity to 

buy local products to feed children? 

Mr. SCHUTTER. I am not aware either of that, because the school 

I am associated with is not a public school my kids go to. I am not 

certain. I think that they get so much money from the state, and 

they get kind of told where to buy their produce from. 

Mr. BELTZ. I am not aware of any funding for such—for dried 

beans to be procured for schools or whatnot. I shouldn’t—technically I shouldn’t answer that question, because I am not 100 percent sure, but my guess is they are not. 

The CHAIRMAN. We have a pilot program out there that we are 

going to expand this year that I hope ultimately will go nationwide, 

where we encourage our local school systems and provide some additional funding for their use in purchasing local products. And it’s 

working very well, but we have just got to continue down the road 

to get all 50 states included. 

Mr. Bonestroo, the 2002 Farm Bill includes MILC income loss 

contract program to dairy producers when prices were low. What’s 

your thought on the MILC program, and should we extend it? 

Mr. BONESTROO. I believe we should not extend it, because when 

the milk price goes down, obviously there is too much milk in the 

nation. So when you guys give these payments out, this enables the 

producers to buy more cows, and expands production. So it actually 

extends the low milk price for a longer period of time, which we 

are into right now, and that is how it was back 2 years ago when 

we had low milk prices for over 18 months. 

That’s the whole thing, and, you know, I milk 3,000 cows, so I’ve 

got limitations on payments, so it’s like a day and a half of money 

for me, where the hundred-cow dairyman, it’s a whole 13th check, 

a whole month. That’s a big difference. For me, I buy a couple 

loads of grain with it, you never know it came. I mean, yeah, it’s 

still like $30,000, but it doesn’t work. It’s not fair for us, and it’s 

not fair—it’s not a market-driven—it hurts the market, because it 

allows people to—you know, we have to be efficient in the western 

states. 

And, you know, it’s spreading all over. Indiana has got bigger 

dairies. You see it all across the nation, people are having bigger 

dairies, they are coming in. We have to have bigger dairies to be 

more efficient, because we are getting paid the same now——I am 

getting paid—netting under ten bucks a hundredweight. 

It was that way 30 years ago, when I was 10 years ago, ask my 

dad, you know. That’s the problem, that’s why we have to milk 

more cows, because the price of milk is the same—well, in the 

stores it’s a little more, but for us, it’s the same as it’s been for the 

last three decades. 

29

The CHAIRMAN. What about forward contracting, should that be 

available to individual farmers rather than having to go through a 

cooperative as is currently the law? 

Mr. BONESTROO. Well, it is available, but I am a producer of 

Dairy Farmers of America, so we have a thing called price differential, and producer paid price differential, and it’s always negative. 

It’s the cost—you have so much money, you know, you sell all your 

different products, butter, powdered cheese, bottled milk, so all 

that money gets put into a pool and distributed to the dairyman, 

right. 

And so not all the milk is sold on Class I or on cheese, of course, 

powdered milk is less, so that’s how you come up with the price differential, which is less. So you contract that for $13 on the future 

board. So you think, well, that’s pretty good, and then all of a sudden you get your check, they still take that $1.50 or $2 or $1 minus 

the differential off of there, and all of a sudden you are looking at 

11 bucks or 11.50, basically 11 bucks is break even. Right now I’m 

losing money every day. 

The CHAIRMAN. OK. Senator Baucus. 

Senator BAUCUS. Thank you, Chairman. Obviously, there are a 

couple, three basic components in profitability; one is your cost, 

and there is your revenues, your sales, and volume of sales, and 

another is productivity. 

And I frankly believe very strongly, not only in agriculture, but 

most every other arena, we in America don’t spend enough time on 

research and development compared with other countries. 

Other countries, China, India, spend much more on R and D, 

Canada, European countries do, I think the time has come, we 

have got to step up and spend a lot more on research to boost our 

productivity, and find new ways to add value to products generally. 

In agriculture, research has been—there’s been no increase in real 

terms since the 70’s. We keep up with inflation, that’s all, we don’t 

spend anymore on research. My question to you, if we were to raise 

more, spend more money on research, what—where would you advise we spend it, how, where? 

I know you talk about disease, I know if we spend a little bit 

more on—control our disease a little bit more we’d have more 

disease- resistant crops, there is value added, lots of other ways to 

increase the productivity. So I am just giving you an open-ended 

opportunity to indicate to us how much more could reasonably be 

spent on research and where might it be directed? 

Mr. BONESTROO. Well, we already have our 15–cent checkoff that 

goes to advertisement, you know, there is some money there already. And on our Greater Southwest Milk Marketing 

Agency, mainly Select milk producers cooperative, they have 

been doing research and development just on their own, and it’s 

really, you know, been beneficial. We are actually making products, 

and it’s in—you can read through the whole statement thing, and 

you will see it, but the old-fashioned way, as far as making the 

products, a lot of these processors were producing—manufacturing 

products that they can sell to CCC, but that’s just the wrong way 

to look at it. 

We want to look at products we can sell overseas, proteins and 

stuff like that. Like China is a big market, they are trying, you 

30

know, trying to—doing really good economically, and we think 

there is a good market here for our product. 

Senator BAUCUS. Other research opportunities, anybody? 

Mr. EVANS. Research I think is the key to agriculture. It’s the 

thing that’s got us on the grain revolution, the low hybrid wheats, 

the hybrid corns, the stuff like that. I think we need to go into—

we are involved in the pulse industry with the bean people, the potato people, and the genomics initiative. 

I think we need to go into a lot more stuff—that type stuff. We 

need to go more into applied research on the farms and in the universities. I think it’s a shame we have so many land grant universities across the country, and we are not fully using the facilities 

because we don’t have the money for the programs. The same way 

with keeping good key people on board, because each year we have 

to go back and secure money from you guys for positions that the 

administration cuts out. So you have this gray cloud hanging over 

researchers’ heads on whether they are going to be funded or not. 

Like the CSP program, we need to fully fund research. 

Senator BAUCUS. Where is the genomic research being conducted? You mentioned some genomic research, where is that being 

conducted? 

Mr. EVANS. It’s an individual grant—I don’t know if you are familiar with the Scarapini Initiative that we have. It’s a joint thing 

with alfalfa people and us, and it’s administered by a committee, 

and then each individual group competes for the money. We got 

five million dollars from the Science Foundation for that. 

Senator BAUCUS. You’re right about the land grant colleges. 

Mr. EVANS. I think one thing specifically for pulses, beans, peas, 

lentils, where they fix nitrogen into the soil, if we could ever find 

that key and put that into other crops, think of the amount of energy savings that we could do, and help the environment. 

Senator BAUCUS. Sid, where would you spend research dollars? 

Mr. SCHUTTER. Historically, most of the research dollars have 

been spent in a reactive manner to different diseases, and with a 

global economy now and global trading, it’s imperative that more 

monies get designated on the proactive side of things to prevent 

different diseases from coming in on that basis. In the potato industry, I think probably 90 percent of the research money is reacting to a current or a new disease. 

Senator BAUCUS. Rather than proactive—get ahead of the game. 

Mr. SCHUTTER. Yes. 

Senator BAUCUS. My last question, too, for alternative crops, for 

energy crops, clearly a lot more research dollars can be spent there. 

That’s clear to me. I think we have to figure out a way to do so. 

Mr. BONESTROO. Well, we are—with the dairy industry with the 

biomass, that’s really taken off. 

We actually have a cooperative in central New Mexico in the 

Roswell area. And so with the tax credits for that, it would be 

equal to—like we are at 30 percent compared to——

Senator BAUCUS. While we are on that subject, tax credits, this 

is the Ag Committee, we don’t have jurisdiction over taxes, however, tax credits are really important, can be very important, in 

various areas. 

31

I am the senior Democrat in the Finance Committee that has jurisdiction over taxes. So I encourage you, and all the other panel 

up here, to be thinking about tax policy that might help agriculture 

too. It’s not just important programs, it’s also the tax policy. Financially also jurisdiction over trade, we have got trade issues, think 

about that, too. We are all working together here, all the committees here, there are lots of different committees that are part of the 

agricultural components, and I encourage you to keep that in mind. 

Mr. BELTZ. If I could make a comment about the energy part of 

that. Dried beans really aren’t involved in that whole crop—whole 

scheme of things, because our highest and best use is as a food. 

Nutritionally we’re a good product and it’s good for people to eat 

our product. So we don’t fit into an energy scheme. 

What concerns us and concerns other people, I believe, at the 

same time, is that right now energy is the hot button issue, and 

there does need to be a lot of energy and time and money spent 

on that. 

But at the same time, we are scared that we don’t get overlooked, that we don’t spend so much time and resources on that. 

That some of the——

Senator BAUCUS. That’s absolutely clear, absolutely. 

Mr. BELTZ. It scares some of the people that are growing food, 

and it’s our only—you know, our biggest claim to fame is we are 

a good food. 

Senator BAUCUS. And I hear all over in the listening sessions 

that I had. It’s a very real concern. 

The CHAIRMAN. Senator Salazar. 

Senator SALAZAR. Let me ask you a question about value added 

initiatives with respect to the different crops you represent. 

Sid, for example, you know, my native valley, the southern part 

of Colorado, I think it’s the third or fourth largest potato producing 

region in the country. One of the things farmers there are always 

talking about how they can add value to a fresh product, potatoes 

they are shipping to the market. 

For all of you in the industry you are in, what would you advise 

the Committee to be looking at in terms of producing value added 

initiatives to the farm bill as we look ahead? 

Mr. EVANS. One of the things is, like our energy bar, I mean 

most small commodity organizations don’t have the money, we 

need quality labs, so we know what the qualities of peas and lentils 

are for a given year. So when companies ask us for the numbers 

we can have them. 

We need the tools for quality labs, we need some marketing experience, and some stuff, and some grant money so when we do come 

up with a good idea, like this particular bar, it has six grams of 

protein, four grams of fiber, it will go into the school lunch program. This will actually go into the school vending machines. But 

I mean, to get the money to get this out the door——

Senator SALAZAR. So you would say, Jim, grant programs for 

value added initiatives might be helpful to this. 

Mr. EVANS. Something similar to our Map funding oversees, so 

when you do programs there that you can get—make it competitive 

to a certain extent, but you can come up with a good you idea, you 

can get the funding to carry it through. 

32

Senator SALAZAR. Other ideas? 

Mr. BELTZ. There’s no doubt that product development is not a 

cheap process, I mean, it all comes back to funding. Lack of resources to do that kind of work, it is a very important path to the 

future, for any group to find new uses for their products that consumers use to benefit themselves, and our industry as well. 

Senator SALAZAR. Any other ideas? 

Mr. SCHUTTER. The potato industry, there has been a fair 

amount of work done on that, most of it being funded by the individual state check-off system. 

So some of it’s been done just on the fresh side of potatoes and 

then a lot has been done on the dehy, or the frozen, which is probably more beneficial to the industry, because of the storability. 

But quite often, the industry can do it, but the grocery stores and 

so forth are reluctant to deal with any of this, because of floor 

space. So it would be rather cumbersome to include them in the 

farm bill. But if we can get more of a national focus on it, from the 

industry, instead of a segmented, either your area or the Pacific 

northwest would be very beneficial. 

Senator SALAZAR. Just a general question to any of you with respect to this farm bill, and specialty crops, what are the specific 

kinds of initiatives we could take on as a committee that might be 

able to assist the speciality crops that aren’t the program crops 

that take up so much of our time and our resources. 

Mr. EVANS. One of the issues, I mean, which are a speciality 

crop, we are kind of a unique crop, it is planting flexibility. 

Right now, if you grow over your limit on chickpeas, you have to 

pay back your direct payment. That’s bad enough, but I can take 

that hit. But because of the legislation in the bill, the way it’s written, you actually have to pay—legally pay back the value of that 

crop that you planted. So in Whitman County in Washington, that 

figure is $240 an hour. So not only do you lose your direct payment, you lose another $240. I don’t think that’s the way the Committee designed that part of the program. 

Senator SALAZAR. Other thoughts? 

Mr. BELTZ. Our biggest issue on the farm bill being a non-program crop at the present time is the planting restrictions. You 

know, our stance is maintaining planting restrictions. If due to outside forces we lose that or it’s forced upon us that we have to give 

that up. 

There are things in the program crops and in the fruits and vegetables that have been brought forward that are interested in taking 

that place. But right now, for our producers, that is one of our key 

elements is that planting restriction. 

Senator SALAZAR. Sid, how about the potato world? 

Mr. SCHUTTER. The main thing would be to continue the same 

language that’s in the current bill and not provide direct payment 

to acres—not provide direct payment on acres and then have those 

people put in—plant potatoes if they don’t have a history of it, because it would distort our market so much. 

Senator SALAZAR. One final question, Mr. Evans, in your opening 

comments, you said that we ought to provide incentives for energy 

savings crops as part of our energy initiatives, as we look at that 

part of the farm bill. And I know you plant alfalfa or you plant 

33

peas, you don’t have to go out and buy the nitrogen as you do with 

other kinds of crops. 

But what kind of a program would you be suggesting to the Committee that would create those kind of incentives for energy savings 

for crops? 

Mr. EVANS. I think you should get some kind of credit or some 

kind of payment. I mean one of the things if you grow specifically 

in the midwest here, Montana, North Dakota, where people are 

moving to direct seeding and getting—saving fuel costs and environmental costs, putting peas and lentils in your rotation, you can 

extend not having to use fertilizer. 

You plant peas 1 year and then come back the next year, you can 

plant spring wheat or spring barley without having to put any fertilizer on, so you can get by 2 years without applying any fertilizer. 

And that’s very environmental friendly, and, cost-saving-wise because every time you put fertilizer on, you are burning natural gas, 

I mean it’s very expensive to make fertilizer. So cost wise, I think 

we figure in the $20 to $30 an acre range, depending on what your 

yield is, and what you are putting back in the soil. 

Senator SALAZAR. I agree with you with that reality. The question is, how do you in a farm bill encourage those kinds of energy 

savings measures to take place? 

Mr. EVANS. I am not——

Senator SALAZAR. If you have some ideas, we will appreciate your 

recommendations. 

Mr. EVANS. I will get back to you on that. 

Senator SALAZAR. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Burns. 

Senator BURNS. Two questions, then we’ll move along. Mr. 

Evans, if you took a look and wanted to get some kind of credit for 

your peas and lentils, as a legume, do you think all legume crops 

should be treated the same way, as far as replenishment of the nitrogen back in the soil? 

Mr. EVANS. Yes, because I think we are saving energy, I think 

it’s beneficial to the country. 

Senator BURNS. We’d probably treat that the same way as carbon 

sequestration, you know——

Mr. EVANS. Something similar to that. I think the Dry Bean Association, didn’t you have an initiative? 

Mr. BELTZ. Well, the same with the soil tests, it gets back to 

basic, when you soil test, you’ve got nitrogen credit for having legumes on crops the previous year. A legume is a legume, wether—

there are differences in amounts, but, you know, the same philosophy applies to all. 

Senator BURNS. Okay. Now, I think all of you are in specialties, 

you talk about China as a market for dairy products. What do 

they—do they want fresh milk, powdered milk, what’s the highest 

demand? 

Mr. BONESTROO. We don’t want to send fresh milk over there. We 

have already developed concentrated milk that we can reconstitute 

it, it’s amazing, they have done even taste tests in San Luis 

Obispo, California and actually the judges picked this milk that 

was reconstituted. 

34

And when he found out, he was—they were a little upset, because it wasn’t part of the program, but they just stuck it in there, 

this reconstituted, ultra-filtrated milk, but the technology is so 

much better. Powdered milk back in the days, you could tell right 

off the bat, it was awful. But now, it’s good. So those—but there 

are proteins in this concentrate, they are reconstituted, you can 

make cheese back out of it, it was just amazing. But, you know, 

the development is started, but it’s still on a small scale. But that’s 

where we need help, as far as R and D goes there. 

Senator BURNS. That wasn’t the case when I was in the Marine 

Corps in Okinawa. 

Mr. BONESTROO. You would be amazed how it tastes now, it’s 

just——

Senator BURNS. Now, do any of you, your association or your organization, maintain kitchens or do a lot of work in one central 

area on product development? Do you do—does a dairy—does the 

American Dairy Association or through any kind of a check-off program, do you maintain kitchens or do research on product development? 

Mr. BONESTROO. They do, we do in our industry. I don’t have all 

that information for you right now, but I can get that for you. 

Mr. BELTZ. In our case, it just doesn’t happen. 

We’re a small enough industry, the funding is the issue. There 

are efforts being made, but, you know, it’s——

Mr. EVANS. With this energy bar, we contracted with Turro and 

Strause Company to develop this, the energy bar. 

Senator BURNS. That was done through an outside contract. 

Mr. EVANS. Yeah, we still have the contract. As 

Mr. Beltz says, it’s very expensive. 

Senator BURNS. Mr. Schutter, about your potatoes? 

Mr. SCHUTTER. Yes, the United States Potato Promotion Board 

does do some work on that, but it’s pretty minimal. 

Senator BURNS. I thank you very much, and I thank you for your 

information. 

The CHAIRMAN. Yes. Thank you very much. We appreciate very 

much your input, and we look forward to continue to stay in touch 

as we prepare for the next farm bill. Our last panel that we would 

ask now to come forward is Mr. Mike Wendland of Rudyard, Montana, representing the National Association of Conservation Districts and Montana Association of Conservation Districts. Bill Donald of Melville, Montana, representing the National Cattlemen’s 

Beef Association and Montana Stockgrowers Association. 

Betty Sampsel from Stanford, Montana, representing the Montana Wool Growers Association, and Mr. Leo McDonnell of Columbus, Montana, representing R-CALF U.S.A. Miss Sampsel and gentlemen, welcome to the Committee. You have seen the process that 

we have been following, and Mr. Wendland, we are going to start 

with you, and go right down the line, and we look forward to your 

comments and your full statement will be inserted into the record. 

35

STATEMENT OF MIKE WENDLAND, NATIONAL ASSOCIATION 

OF CONSERVATION DISTRICTS AND MONTANA CONSERVATION DISTRICT, RUDYARD, MONTANA 

Mr. WENDLAND. Mr. Chairman, good morning. My name is Mike 

Wendland. Senator Salazar, Mr. Chairman, welcome to Montana. 

Senator Burns, thank you for putting this hearing together, Senator Conrad Burns, thank you. 

I thank you for the opportunity to speak before you today. I am 

a fourth generation farmer from Rudyard. I have farmed drylands 

and some livestock. My comments today are my own and do not 

necessarily reflect all conservation concerns. I have a CSP contract, 

I have land in CRP, but also some of my agriculture production is 

at my own expense as most Montana producers would be. I have 

planted field wind breaks in the past, and most recently I have incorporated minimum till and no till practices in my operation. 

Some of these decisions have come about because of the extended 

drought in the area, but they have shown great benefits, most in 

wind erosion savings and wild life habitat. Components of the conservation title of the farm bill have been very important to me. I 

am a conservation district supervisor at the local level. 

I am involved at the state level and at the national level. I’m 

part of the NACD Farm Bill Task Force, and we have some ideas 

that we have submitted. My submitted testimony today is too long 

to include here, but in the few minutes I have, I would like to highlight a couple things I believe that are important we consider in 

the next farm bill. Technical assistance, there is a strong demand 

and need for technical assistance. It’s vital if the NRCS and technical service providers are to continue to work at the local level 

with landowners, conservation districts and other partners. 

Limited staffing in local field offices is often a problem that leads 

to program delivery and implementation problems. Financial assistance—the financial assistance component of the working lands 

conservation program should be kept at the current level. It is 

often the incentive that brings producers into the NRCS and conservation district offices, and enables producers to make many 

changes on their own. 

Education and outreach are, to the land owners and general public, are important for successful delivery of the conservation title of 

the next farm bill. Education and outreach are areas where conservation districts have been able to assist in the delivery of the 

farm programs. Through workshops and tours, we are able to show 

farm producers and operators hands-on results of the farm program. 

In Montana youth education is also a very strong part of our education process. The Envirothon and the Montana Youth Range 

Camp are two of the examples that have been very successful in 

Montana. Local input, I feel local input is essential and, that local 

priorities be integrated into Federal conservation programs. Local 

work groups and state tech meetings are important in accomplishing this task. 

One final concern—I see the red light is on—is noxious weeds 

and invasive species that threaten the production agriculture, including my operation. It is important to control them, not only on 

36

our home places, but on public lands. I thank you for your the opportunity, and would answer any questions. 

[The prepared statement of Mr. Wendland can be found in the 

appendix on page 105.] 

The CHAIRMAN. Thank you. Mr. Donald. 

STATEMENT OF BILL DONALD, NATIONAL CATTLEMEN’S BEEF 

ASSOCIATION AND MONTANA STOCKGROWERS ASSOCIATION, MELLVILLE, MONTANA 

Mr. DONALD. Mr. Chairman, members of the Committee, thank 

you very much for the opportunity to speak to you today. My name 

is Bill Donald, I’m a third generation cattle rancher from Mellville, 

Montana. I currently serve as the president of the Montana 

Stockgrowers Association for which nearly 125 years has designed 

policy that minimized direct Federal involvement in our operations 

and our ranches, and preserved our right to independent ranchers 

to choose the best management practices for our land, water and 

livestock. 

The free market system is critical to the long- term sustainability 

of cattle ranching. Our 2007 Farm Bill testimony addresses seven 

areas, the next generation, marketing and competition, conservation programs, Yellowstone Park brucellosis, Montana State University Bioscience Complex, the Endangered Species Act, and noxious weeds. Today I will just touch on a couple of those issues. 

One of the major challenges facing the next generation in ranching in Montana is the price of land is far valued above the production value, it is valued on recreational and scenic get-away values. 

There is a couple things that could be included in the farm bill 

that might help alleviate this. One of them would be tax incentives 

to landowners or ranchers who would be willing to sell or lease to 

young producers, and also streamlining the process and cutting the 

red tape for the—required for young producers to obtain loans for 

the FSA would be helpful. Concerning marketing and competition, 

we contend that the role of the Federal Government is to provide 

effective oversight to ensure the true competitive market complex 

for cattle and beef. And this is done by strictly enforcing the Packers and Stockyards Act of 1921. 

It’s not the role of the Federal Government to prohibit or limit 

a cattleman’s right to pursue markets. Marketing opportunities are 

designed to capture a larger portion of the beef dollar. The government’s role is not to guarantee livestock producers a profit, but 

rather the opportunity to profit and succeed. 

The best mechanism to achieve conservation and environmental 

goals in our mind is working landscapes. The working lands support rural communities and economies, provide food and fiber and 

nature, and nurture abundant wildlife habitat. The programs that 

have been effective maintained, like EQIP and CSP. With respect 

to CRP, there is some damaging, unintended consequences with 

young agricultural people wanting to get into business, and also 

the detrimental impact it has on some of the rural economies and 

communities. 

Conservation objectives can be achieved in conjunction with economic activity of the land and should be encouraged. And we would 

like to see some of these lands coming out of CRP that are too fragVerDate 0ct 09 2002 12:44 Nov 13, 2006 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 C:\DOCS\30132.TXT SAG2 PsN: SAG2
37

ile to farm. They would not be too fragile to be grazed. And some 

of the conservation ideas could be used to help develop water and 

fences to utilize those lands. We look forward to working with you 

and appreciate the opportunity to be here. Thank you. 

[The prepared statement of Mr. Donald can be found in the appendix on page 67.] 

The CHAIRMAN. Thank you. Miss Sampsel. 

STATEMENT OF BETTY SAMPSEL, MONTANA WOOL GROWERS 

ASSOCIATION, STANFORD, MONTANA 

Ms. SAMPSEL. On behalf of the 1,200 sheep producers in Montana, I am very appreciative of this opportunity. I am Betty 

Sampsel, President of the Montana Wool Growers Association. And 

I can report to the Committee, as well as the Chairman, that the 

priorities are shared by a majority of the sheep producers in Montana and the American Sheep Industry Association. 

The American Wool Council launched a wool production information marketing program for the American wool in early 2001. Our 

national incentives have improved competition for American wool. 

International marketing programs have exposed U.S. wools to the 

world and exports have grown rapidly to over 60 percent of our annual production today. 

Total exports represented less than a third of production prior to 

our programs. We now sell into eight or more international markets each year. The Wool Loan Deficiency, the LDP program provides the only safety net for producers in our business. I encourage 

the Committee to reauthorize the wool LDP and at a base loan rate 

of $1.20 per pound in order to provide the benefit of the program 

as intended. 

While nine loan rates are available, essentially all wool LDP applications are in one non-graded rate category. The research and 

industry testimony provided in 2002 supported $1.20 per pound 

base loan rate and authorization of the wool LDP at this rate 

should provide opportunity for all producers to participate in the 

program as intended. I urge the Committee to support reauthorization of the National Sheep Industry Improvement Center. As established in the 1996 farm bill in the Rural Development Program of 

USDA, the National Sheep 

Industry Improvement Center provides loans and grants to business ventures for financing programs which normal commercial 

credit or funds were not available. 

The Secretary conducted a number of field hearings last year on 

the farm bill. There is strong support by producers in support of 

a retained ewe lamb program in the next farm bill. The growth of 

the U.S. sheep industry can in part be credited to the USDA retained ewe lamb program that was in effect for 2002–2004. 

The incentive payment to producers to keep ewe lambs in their 

breeding herd rather than sell them for slaughter encouraged producers to expand breeding herds which, in the longer term, will 

provide increased market lambs to help U.S. producers maintain 

and increase their share of the American meat case. Thank you, 

Senator Baucus, for extending the Wool Trust Fund. 

Senator BAUCUS. You bet. 

38

Ms. SAMPSEL. And thank you for the opportunity to provide the 

sheep industry priorities for the next farm bill. 

[The prepared statement of Ms. Sampsel can be found in the appendix on page 94.] 

The CHAIRMAN. Thank you. Mr. McDonnell. 

STATEMENT OF LEO McDONNELL, R-CALF USA, COLUMBUS, 

MONTANA 

Mr. MCDONNELL. Good morning, Chairman Chambliss, 

Senator Baucus and Senator Burns and Senator Salazar. 

My name is Leo McDonnell. I am a cow-calf producer, feed lot 

producer, and feed stock producer. And we sell bulls both domestically and into the international markets. I appreciate the opportunity to provide comments on the development on the 2007 Farm 

Bill. 

Chairman Chambliss, you have provided great leadership on the 

Senate Ag Committee, thank you. Senator Baucus and Senator 

Burns have been champions for U.S. agriculture and Montana agriculture. And 

Senator Salazar, it’s good to have a ranch family on the U.S. 

Senate. Historically, cattle producers have not asked for price assistance, and I hope we keep it that way. But today independent 

cattle producers are facing significant obstacles. Barriers to our exports and mismatched import standards have created a large U.S. 

trade deficit in cattle and beef. Meanwhile here at home, cattle producers must negotiate in a market that is terribly distorted at 

times, with increase in concentrations and poor marketing practices. 

And we are unable to differentiate our product even though we 

are in an increasing global market. It hardly makes sense. The 

2007 Farm Bill does give us an opportunity to address some of 

these problems. First, the farm bill should offer a competition chapter that addresses price- distorting practices, such as captive supplies, non-price negotiated forward contracts, exclusive marketing 

and purchasing agreements, and maybe even packer ownership. 

Concentration should be revisited and transparent market information should be a priority. You know, capitalism comes in many 

forms. A free and competitive enterprise is a founding value in this 

country, and that’s what’s made us the greatest country in the 

world, let’s not lose it. 

Second, address the impact of current U.S. trade policy. You 

know, we went from a 24 billion dollar trade surplus back in the 

90’s until last year, our trade deficit, according to the Department 

of Commerce, and the cattle and beef industry had over a three billion dollar trade deficit last year. USDA is involved in trade negotiations at times and they need clearer policy from the industry. 

For example, we had special rules for perishable and cyclical Ag 

products, passed through TPA and signed into law. Yet USDA held 

back on getting that information, and when we finally got to the 

Doha——

Senator Baucus, correct me if I am wrong—I believe the special 

rules were tabled for agriculture, but cattle and beef were left out. 

So we have some real problems there. Also you might want to look, 

with all the distortions we have in the global and beef cattle, it is 

39

the most distorted, maybe looking at tax offsets, maybe a capital 

gains or maybe running a special little deal on estate tax relief 

until these distortions are addressed. 

Third, you know, a couple years ago we put together one of the 

largest coalitions in the history of this country and passed county 

of origin labeling. It was signed into law and needs to be honored. 

We have three of our extended over in Iraq and Afghanistan, 

fighting for democracies over there. We need to honor the ones 

here. So we look forward to your help. Both Senator Baucus and 

Senator Burns have been champions for COOL, and stay in there 

for us. As we found out in the fish rules, it’s not all that bad. 

[The prepared statement of Mr. McDonnell can be found in the 

appendix on page 84.] 

The CHAIRMAN. Thank you very much. I will defer to my colleague, Senator Baucus. 

Senator BAUCUS. Thank you, Mr. Chairman. I guess, the first 

thing that comes to my mind is briefly, over the last couple, 3 

weeks, I have heard a lot of producers talk about the need for conversation—conservation programs, EQIP, but a lot about CSP. And 

I wonder if anybody could address the need for CSP, and how CSP 

is a good program, but needs a few more dollars to make it work 

a little bit better. If anybody wants to jump in there. 

Mr. WENDLAND. Mr. Chairman, Senator Baucus. The CSP Program is probably a good program, but it is not fully funded. 

Senator BAUCUS. I agree it’s nearly as funded as it should be. 

Mr. WENDLAND. It’s a very important program, but the sign-up 

process for the CSP program was very cumbersome. It was a real 

problem, a bottleneck in the CSP program. 

Mr. DONALD. I think while it has potential, there are some logistic problems, and then also the funding. I think the sign-up procedure can be streamlined, and of course if there is not funding, then 

it gets to the point of who qualifies and who doesn’t, then that 

could be detrimental. 

Senator BAUCUS. Do wool growers use it? Betty, do you use it? 

Ms. SAMPSEL. No. 

Senator BAUCUS. Not at all? 

Mr. MCDONNELL. We don’t use it personally. I am great believer 

that if you have a healthy economy, healthy market, that’s kind of 

our responsibility, but I appreciate what conservation programs 

bring to us. As you are talking about that, I would like to express 

the concern about the Grazing Reserve Program, which was put in 

the last farm bill. There is a clause in there which provides for permanent GRP, and I think it’s a great mistake for cattle producers 

to allow the government to come in and manage your business on 

a permanent basis. 

Senator BAUCUS. While you are here, Mr. Chairman I would like 

to put in a plug for something else in Montana, and that’s the Montana State Bioscience Complex that Bill McDonald raised. We are 

hoping Montana State University could be the place in the country, 

the center for genomic research of livestock, especially for the beef 

industry. For all the reasons that are apparent, and Nebraska has 

helped us out, the only competition we have is from Texas. So not 

only we here in Montana are enlisting your support in our efforts 

to get that passed, I think it’s about 34 million is what it is. 

40

The Senate Subcommittee—Senate Appropriations Committee I 

think passed 16 million, it got through the Senate floor, probably 

get back somewhere, somehow, there is nothing in the House side 

for it. But it’s clear to me, as we work a lot more research, genomic 

research is really the key and I just want you to know about that, 

and thank Bill and others that help put that together. 

Mr. DONALD. That has the potential to take the cattle industry 

in this country to the next level, and I think looking at the future 

my kids have, and my grandkids have, I think that’s something 

that really has some potential to help. 

The CHAIRMAN. Well, I have sampled some of your product as of 

last night, I think it was a whole half a cow they served me at Eddie’s Supper Club, whatever you induced into it, it was very, very 

good. 

Senator BAUCUS. So that’s where you were last night. I was 

thinking of going out there last night, too, I was thinking of going 

to Eddie’s. We should have gone there. 

The CHAIRMAN. You should have. 

Senator BAUCUS. We went someplace else. 

The CHAIRMAN. It was a great steak, I’ll say that. 

Senator BAUCUS. Or you could have gone to Black Eagle, 

Borrie’s. 

The CHAIRMAN. I think we could have thrown darts. 

Senator SALAZAR. We discovered they had pizza in Montana. We 

didn’t know. We thought it was going to be a beef steak. 

Mr. Donald, very quickly—I know the Chairman has a plane he 

has to catch—but on CRP and the impact that it’s having on ranchers, and especially young ranchers coming in with more and more 

of our land being put into CRP, what would you do, Mr. Donald, 

you were testifying to that point, I think you were as well, Mr. 

McDonnell, what would you do to change the CRP Program to address the concern that you have that it is becoming one of those 

barriers for ranchers to continue to ranch. 

Mr. DONALD. Well, one of the things that come to mind is ensuring that whole farms or ranches aren’t put into the CRP Program 

that can have detrimental impact on communities, and without the 

thriving rural communities, it’s that much harder to maintain and 

to have young people come into the program. Also that becomes the 

base level for leases, and it puts some of those leases out of the 

reach for the young producers. So I think there are two things 

there, limiting the number of acres is one thing, but limiting the 

number of acres in a community is something that maybe has been 

overlooked, and the whole farm process might be something to look 

at in that. 

Senator SALAZAR. Did you have anything to add to that, Mr. 

McDonnell? 

Mr. MCDONNELL. Well, I agree with Bill. And I would like to 

add, and possibly another thing to bring into it, maybe CRP payments should be made only to active producers. I mean we have 

people taking CRP payments that are retired and in some cases living in another country and living off these payments that are 

blocking our kids getting in here. You might also look at some kind 

of assistance for young farmers and ranchers when they have to 

41

purchase these units that definitely inflated in true value. There’s 

a couple shots. 

Senator SALAZAR. I appreciate the comments. I will tell you from 

my being in Colorado, when I’ve looked at some of the counties that 

have been most affected by CRP, also some of the counties that are 

most economically withering on the vine, and part of it the very life 

blood, economically those communities have been taken away to 

people who might happen to live in Dallas, Fort Worth, New York 

City, so it’s an issue. 

I am certain this Committee will have discussions about it. 

Where we go with it, I don’t know, but we certainly look forward 

to hearing your points of view on how we ought to change it. Thank 

you very much. 

The CHAIRMAN. Senator Burns. 

Senator BURNS. Thank you very much, Mr. Chairman and I 

would advise Mr. McDonnell over there, that we are finally making 

headway, finally got the USDA by letter to revise their estimates 

of cost based on the seafood experiment. 

Mr. MCDONNELL. Thank you. 

Senator BURNS. And country of origin labeling, we are making a 

little headway, be it slow, but we will continue to do that. Well—

I am sure this will be in the debate, whenever we go into the new 

farm bill, I’m sure it will be, but we’ve got to have better figures 

coming out of the USDA, and we’ve also got to have a USDA that’s 

willing to follow the law; it’s the law, we passed it, and to write 

the rules. So we are going to continue to do that. I was going to 

ask—I will tell you, I know there is a lot of us concerned about 

invasive weeds, and whenever—I will tell you whenever you go to 

1Washington, D.C. and want to talk about weeds, you’ll find out 

you’re standing on the street corner yourself. There’s not a lot of 

people in that 17 square miles of logic-free environment that are 

concerned about weeds. But I happen to think they are very important. And Miss Sampsel, you’re an industry that probably has a secret to our weed problem, and so I would urge you to—your new 

program that we’ve—come with your new labs for the sheep industry, I think is doing very well, and we appreciate working with 

those folks also. 

Do you have any—on conservation, and I am really glad to hear 

that we’re starting to talk about CRP, no matter if it’s range land 

or cropland, in probably a common sense kind of way. We have 

talked about this, the Chairman and I have talked about it many 

times, and that we should take a look at that program to make 

sure the government is not in competition with those young people 

who want to expand their operation, and also the remuneration, 

and also the limits that we have put on it. But in areas of conservation, we’re very supportive of conservation programs and how 

they are implemented. We can streamline the applications and who 

qualifies and who does not. I am very supportive of that, as we 

move this legislation forward. If we could do one thing in the livestock industry, if we had one part to reform, would you say that 

we take a look at P and S, the Packers and Stockyards Act, or 

where would it be? 

42

Mr. MCDONNELL. I would the say competition is probably No. 1, 

but long-term trade is going to have an impact on us, I think; it’s 

those two issues. 

Mr. DONALD. Well, I guess when I look at the generations coming 

down the road and I look at the amount of tax planning we go 

through on our operation, I have two sons that are on the ranch 

with us, and have some grandkids, that hopefully they’ll see the 

benefits of the ranching life-style, how we get that transferred over, 

we are spending a lot of money on tax accountants, insurance, and 

tax lawyers for planning, in order to be able to pass that ranch on 

to our kids. 

That’s money that comes out of production. We could be using 

that to enhance production and we’re spending it on insurance 

companies, lawyers and accountants. As much as I like my accountant, I just as soon not give him that money. I think that’s one 

of the things, the estate, and I really applaud Senators Baucus and 

Senator Burns for your work on trying to get that repeal made permanent, and I think that is something that’s going to be necessary. 

Senator BURNS. Miss Sampsel. 

Ms. SAMPSEL. I agree with Bill. We need help on transferring our 

land to the next generation, because we—they can’t go out and 

compete against investors that are coming here to buy land. 

Senator BURNS. Thank you. You got another question? 

Senator BAUCUS. No, I was going to say, I think we’ll finally get 

that resolved hopefully the rest of this year, I don’t know for sure, 

but soon. Members of the Senate and House know how important 

that is. They don’t know as much as they should, but they still 

know how important it is. Sometimes things take a little while, but 

I think we will get that very, very soon resolved, so you don’t have 

so much time on accountants and lawyers, and our places can be 

passed on to our kids. It’s slow in coming, but we will get there. 

Mr. WENDLAND. Mr. Chairman, one final comment on the CRP, 

if we were to get parity for our product, that issue would go away, 

I think. 

Senator BAUCUS. Parity, I haven’t heard that in a while. 

The CHAIRMAN. Well, to each of you, thank you very much for 

being here. Your input into this is very valuable, and we look forward to continuing the dialog with you, as with the other witnesses 

that preceded you here. And to all of our witnesses for the testimony today, we say thank you for your input, and for the taking 

of your time to be here today. I want to thank Senators Baucus and 

Burns for inviting us here today, and for the great hospitality on 

the part of this university for hosting us. It’s been our pleasure to 

be here. 

I also want to thank Senator Craig Thomas of Wyoming and Senator Mike Crapo of Idaho for their assistance in helping provide 

witnesses that have given us very valuable testimony today. I 

again would encourage anyone interested in submitting a written 

statement for the record or informal or comments to visit the Committee’s website, which is agriculture.senate.gov for details. We can 

accept written statements for up to five business days after this 

hearing. 

Thank you for your interest in agriculture policy, and gentleman, 

thank you for taking your time. 

43

Senator BAUCUS. Mr. Chairman, we appreciate it very much. 

The CHAIRMAN. We’re going to come back to Montana, I promise 

you. It’s a beautiful place. Thank you very much. This hearing is 

adjourned. 

[Whereupon, at 12:10 pm the hearing was adjourned.] 

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