U.S. GOVERNMENT PUBLISHING OFFICE

29–639 PDF WASHINGTON : 2019

S. HRG. 115–593 

OPPORTUNITIES IN GLOBAL AND 

LOCAL MARKETS, SPECIALTY CROPS, 

AND ORGANICS: PERSPECTIVES 

FOR THE 2018 FARM BILL 

HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

JULY 13, 2017 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

Available via the World Wide Web: http://www.govinfo.gov/ 
COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

PAT ROBERTS, Kansas, Chairman 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

JOHN BOOZMAN, Arkansas 

JOHN HOEVEN, North Dakota 

JONI ERNST, Iowa 

CHARLES GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

STEVE DAINES, Montana 

DAVID PERDUE, Georgia 

LUTHER STRANGE, Alabama 

DEBBIE STABENOW, Michigan 

PATRICK J. LEAHY, Vermont 

SHERROD BROWN, Ohio 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

JOE DONNELLY, Indiana 

HEIDI HEITKAMP, North Dakota 

ROBERT P. CASEY, JR., Pennsylvania 

CHRIS VAN HOLLEN, Maryland 

JAMES A. GLUECK, JR., MAJORITY STAFF DIRECTOR

JESSICA L. WILLIAMS, CHIEF CLERK

JOSEPH A. SHULTZ, MINORITY STAFF DIRECTOR

MARY BETH SCHULTZ, MINORITY CHIEF COUNSEL

(II) 
(III) 

C O N T E N T S 

Page 

HEARING(S): 

Opportunities in Global and Local Markets, Specialty Crops, and Organics: 

Perspectives for the 2018 Farm Bill Examining the Farm Economy: Perspectives on Rural America ................................................................................. 1 

Thursday, July 13, 2017 

STATEMENTS PRESENTED BY SENATORS 

Roberts, Hon. Pat, U.S. Senator from the State of Kansas, Chairman, Committee on Agriculture, Nutrition, and Forestry ................................................. 1 

Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan ..................... 3 

Witnesses 

Dallmier, Kenneth, President and Chief Operating Officer, Clarkson Grain 

Company, Inc., Cerro Gordo, Illinois .................................................................. 6 

Crisantes, Theojary Jr., Organic Specialty Crop Farmer and Vice President 

of Operations, Wholesum Harvest, Amado, Arizona ......................................... 8 

Johnston, Haile, Director, the Common Market, Philadelphia, Pennsylvania ... 9 

Halverson, Eric, Potato Farmer and Chief Executive Officer, Black Gold 

Farms, Grand Forks, North Dakota ................................................................... 11 

Meyer, Dean, Livestock and Crop Producer and Executive Committee Member, U.S. Meat Export Federation, Rock Rapids, IA ......................................... 13 

APPENDIX 

PREPARED STATEMENTS: 

Crisantes, Theojary Jr. ..................................................................................... 32 

Dallmier, Kenneth ............................................................................................ 37 

Halverson, Eric ................................................................................................. 44 

Johnston, Haile ................................................................................................. 49 

Meyer, Dean ...................................................................................................... 54 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Stabenow, Hon. Debbie: 

Ten Hens Farm, Bath, MI, prepared statement for the Record ................... 60 

Crisantes, Theojary Jr.: 

Attitudes Towards Container Growing ........................................................... 65 

Container Picture ............................................................................................. 99 

Farm Picture ..................................................................................................... 100 

QUESTION AND ANSWER: 

Crisantes, Theojary Jr.: 

Written response to questions from Hon. Debbie Stabenow ......................... 102 

Written response to questions from Hon. Patrick J. Leahy .......................... 103 

Written response to questions from Hon. Sherrod Brown ............................ 112 

Dallmier, Kenneth: 

Written response to questions from Hon. Pat Roberts .................................. 114 

Written response to questions from Hon. Debbie Stabenow ......................... 115 

Written response to questions from Hon. Steve Daines ................................ 117 

Written response to questions from Hon. Patrick J. Leahy .......................... 118 

Written response to questions from Hon. Sherrod Brown ............................ 126 
Page

IV 

Halverson, Eric: 

Written response to questions from Hon. Pat Roberts .................................. 129 

Written response to questions from Hon. Debbie Stabenow ......................... 129 

Written response to questions from Hon. Steve Daines ................................ 130 

Written response to questions from Hon. Patrick J. Leahy .......................... 131 

Johnston, Haile: 

Written response to questions from Hon. Pat Roberts .................................. 138 

Written response to questions from Hon. Debbie Stabenow ......................... 138 

Written response to questions from Hon. Patrick J. Leahy .......................... 142 

Written response to questions from Hon. Sherrod Brown ............................ 145 

Written response to questions from Hon. Michael Bennet ........................... 147 

Meyer, Dean: 

Written response to questions from Hon. Debbie Stabenow ......................... 151 

Written response to questions from Hon. John Boozman ............................. 152 

Written response to questions from Hon. Patrick J. Leahy .......................... 153 
(1) 

OPPORTUNITIES IN GLOBAL AND 

LOCAL MARKETS, SPECIALTY CROPS, 

AND ORGANICS: PERSPECTIVES 

FOR THE 2018 FARM BILL 

Thursday, July 13, 2017 

UNITED STATES SENATE, 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, 

Washington, DC 

The committee met, pursuant to notice, at 9:30 a.m., in room 

328, Russell Senate Office Building, Hon. Pat Roberts, Chairman 

of the committee, presiding. 

Present or submitting a statement: Senators Roberts, Boozman, 

Hoeven, Ernst, Grassley, Thune, Daines, Stabenow, Brown, Klobuchar, Bennet, Gillibrand, Donnelly, Heitkamp, Casey, and Van 

Hollen. 

STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE 

STATE OF KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman ROBERTS. I call this meeting of the Senate Committee 

on Agriculture, Nutrition, and Forestry to order. 

Over the last several months we have been laying the groundwork for a new farm bill, and as Chairman of this Committee I 

have repeatedly said we must listen to our farmers, ranchers, and 

growers first, and that is exactly what Senator Stabenow and I 

have been doing, and we will continue to do that. We are well into 

the process of collecting the advice and counsel of the farmers and 

ranchers and growers, those for whom this farm bill tolls and is 

meant to work. We will continue to conduct a thorough review of 

the farm bill programs that provide certainty to those across the 

country who are facing very tough economic times. We are in a 

rough patch. 

In these tight budgetary circumstances, unfortunately we have 

no choice but to find ways to do more with less, to make every dollar count. When seeking to provide assistance to our producers, and 

throughout this process, there is one word that I am hearing in 

nearly every farm bill hearing, summit, meeting, roundtable, whatever we attend, and that is ‘‘trade.’’ Trade, trade, trade. Well, first 

crop insurance but then trade, trade, trade. 

I have worked on six farm bills. I do not know anybody else that 

has asked for that task, but this is number seven. I can tell you 

that each one is unique, but one thing has not changed. Whether 

you are an apple grower in Washington or a dairy farmer in Wis-
2 

consin or a cattle rancher in Texas, you need a strong and reliable 

market to sell what you produce. That is absolutely essential. That 

is the benefit of farm bill trade programs. With an excellent return 

on investment, these public-private partnerships help the full 

range of our producers, from commodities to specialty crops. 

Programs like the Market Access Program, or MAP, allow producers to partner with the Department to market and promote 

their products to all corners of the globe. For example, in 2015, the 

California Walnut Commission used MAP funds to support efforts 

in India to promote the health benefits of walnuts. In that year, 

shipments to India increased tenfold. Just think of that. 

Another farm bill export program, the Foreign Market Development Program partners with the Foreign Agriculture Service and 

U.S. agriculture cooperators to promote our commodities overseas. 

For example, in Egypt, the U.S. Wheat Associates have utilized the 

Foreign Market Development Program to promote U.S. hard red 

spring wheat to be used as a pasta ingredient. As a result, an 

Egyptian food and beverage company imported 30,000 metric tons 

of hard red spring wheat in 2015 and ’16, and need to do it again 

this year. 

There are countless examples demonstrating the benefit U.S. agriculture receives through partnerships with farm bill export programs, and the variety of agriculture industries tapping into these 

programs has continued to grow. 

We are going to hear today from the beef and potato sectors, but 

there are many others such as cotton, dairy, poultry, rice, sunflower, citrus, lumber, sorghum, dry beans, and corn, just to name 

a few. 

As I have said in past hearings, we have our work really cut out 

for us with this next reauthorization. We will need to find ways to 

do more with less to reduce the burdens of overregulation, and ask 

the tough questions as we re-examine programs to determine their 

effectiveness and if they are serving their intended purpose. 

There are 39 programs from the 2014 Farm Bill that do not have 

a baseline after fiscal year 2018. The Foreign Market Development 

Program and the Technical Assistance for Specialty Crops Program 

fall under that category. 

More and more, we are facing barriers to trade from other countries. In addition to developing and growing new markets, these 

programs play an important role in helping U.S. producers compete 

on the proverbial level playing field. In addition, some changes 

need to be made to ensure that our organic producers are competing on that level playing field and that our own regulations and 

processes are not holding people back. 

A recent Washington Post article highlighted the issue of fraudulent organic imports, but my constituents in Kansas brought this 

issue to my attention a year ago. We pushed the Department of Agriculture at that time to do something, and it is clear that if it 

takes this long to get action, something needs to change. As I continue to repeat, with this tight budgetary environment, we need to 

ensure that overregulation and antiquated government processes 

are not preventing businesses from succeeding. 

Farmers from rural American can choose organics, not necessarily because they believe there is anything wrong with conven-
3 

tional production, but because they recognize organics as a valueadded opportunity. They are responding to a market signal and increasing their margins, and, boy, is that market segment working 

today. However, it seems that uncertainty and dysfunction have 

overtaken the National Organic Standards Board and the regulations associated with the National Organic Program. These problems create an unreliable regulatory environment and prevent 

farmers that choose organics from utilizing advancements in technology and operating their businesses in an efficient and effective 

manner. Simply put, this hurts our producers and our economies 

in rural America. 

So I look forward to hearing about these issues and learning 

from those that have first-hand experience in the success of farm 

bill trade programs and the challenges associated with outdated 

processes. 

With that, it is my pleasure and privilege to recognize the Senator from Michigan, Senator Stabenow, for any remarks she may 

have. 

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR 

FROM THE STATE OF MICHIGAN 

Senator STABENOW. Thank you so much, Mr. Chairman, and 

thank you for holding this important hearing on two very critical 

titles of the farm bill. First let me say that while we do not want 

to export our jobs, we sure want to export our products, and agriculture needs markets, and so it is incredibly important that we 

have this title on trade in the farm bill and that we have the new 

position on trade in the USDA that we created in the last farm bill. 

As we well know, the farm bill supports and celebrates the diversity of American agriculture, and that is what we are talking about 

today. Whether you are from a multi-generation farm family, a 

young person learning about urban agriculture, or even a returning 

veteran looking to start a career in agriculture, the farm bill helps 

all farmers access new markets and new opportunities in their 

hometowns as well as throughout the world. 

The strength of the U.S. agriculture sector is, in part, due to its 

diversity. In Michigan, we grow over 300 varieties of crops, ranging 

from carrots, celery and asparagus to our world-famous cherries, 

apples, and blueberries. These specialty crops not only supply our 

communities with healthy fruits and vegetables, they are also an 

economic powerhouse supporting jobs and fueling our economy. Nationwide sales of specialty crops total nearly $65 billion a year. 

That is because consumers seek out American-grown products in 

local grocery stores, and all around the world as well. 

Programs in the 2014 Farm Bill, including specialty crop research, pest and disease management, and nutrition incentives 

have been critical in helping farmers increase productivity and 

drive demand for these crops here and abroad. Take the example 

of the small but mighty cherry, one of Michigan’s top crops. Our 

cherry capital, Traverse City, just held its annual festival, celebrating this special fruit. On average, Michigan grows over $90 

million worth of cherries each year. Our cherries can be found in 

farmers markets, school lunches in Michigan, and on grocery store 
4 

shelves, in Michigan as well as China, Germany, and the U.K., 

thanks to key programs in the farm bill. 

From marketing assistance to credit access, the farm bill creates 

export opportunities that connect our farmers to consumers around 

the world. As a result, our agricultural exports add over $8.4 billion to the U.S. economy each year, while supporting more than 1 

million American jobs, on and off the farm. 

We are also seeing incredible growth in organics, as the Chairman mentioned, in the local economy that connect our farmers to 

new opportunities. U.S. retail sales for organic products have skyrocketed in the last decade, growing from $13 billion in 2005 to 

more than $43 billion today. Local food sales have more than doubled from 2008 to 2014, and industry experts expect that value to 

reach $20 billion by 2019. 

Through targeted organic research, assistance for farmers 

transitioning into organic agriculture and enforcement of organic 

standards, the farm bill is a critical tool to ensure consumers have 

choices in the grocery aisle and confidence in the organic products 

they purchase. We are seeing more and more consumers who want 

to learn about their food and where it comes from, and that is a 

good thing. 

Farmers markets provide opportunities for new farmers to get 

started. Food hubs, value-added production grants, and supply 

chain support help these farmers to build stable businesses that 

can thrive while expanding access to healthy foods in areas that 

are, in many cases, food deserts. It is hard to believe that specialty 

crops, local food, and organics did not have a place in the farm bill 

until 2008. Although these areas make up a small percentage of 

the farm bill budget, compared to other titles, the impact of these 

investments has been enormous. 

I would like to submit testimony for the record, Mr. Chairman, 

from Dru Montri, who is the owner of Ten Hens Farm and Executive Director of the Michigan Farmers Market Association who 

knows first-hand how important these efforts have been to local 

farmers. 

Chairman ROBERTS. Without objection. 

Senator STABENOW. Thank you. 

[The following information can be found on page 60 in the appendix.] 

Senator STABENOW. As we will hear today, these programs have 

proven their effectiveness. It is critical that we continue to support 

the diversity of American agriculture as we write the next farm 

bill. The success of our agricultural economy will require continued 

investment in markets and opportunities for all of our farmers. 

Whether they are selling locally to their neighbors or exporting 

their products globally, and whether they are growing commodities, 

specialty crops, or organics. The farm bill should continue to help 

all of our producers do what they do best, put food on our tables 

here and around the world. 

Thank you, Mr. Chairman. 

Chairman ROBERTS. I would like to welcome our panel of witnesses. We have quite a few folks here so we will get right to it. 

Our first panelist is Mr. Ken Dallmier who joins us this morning 

from Cerro Gordo, Illinois. He is the President and Chief Operating 
5 

Officer of Clarkson Grain Company, an organic grain and oilseed 

supplier based in Illinois. Previously, Mr. Dallmier held management positions with his family business, Sturdy Grow Hybrids, as 

well as Syngenta Seeds and Agrible, Inc. He currently serves on 

the board of Illinois Foundation Seeds, Inc., and is a member of 

their Organic Trade Association’s Global Supply Chain Integrity 

Task Force. That is a mouthful. Welcome, and I look forward to 

your testimony, sir. 

Next we have Mr. Theo Crisantes, who is a farmer and owner 

of Wholesum Harvest, an organic specialty crop operation in Arizona. Mr. Crisantes is the Vice President of Growing Operations, 

and has worked in the family business since 2000. While working 

in operations management at Wholesum, he has employed various 

certified organic agriculture production methods, including hightech glass greenhouses and container growing. Welcome, and I look 

forward to your testimony, sir. 

I now turn to Senator Casey—that is quite an entrance, Bob. 

[Laughter.] 

Chairman ROBERTS. I now turn to Senator Casey to introduce 

our next witness—— 

Senator CASEY. Mr. Chairman, thank you very much. 

Chairman ROBERTS. —Mr. Haile Johnston. 

Senator CASEY. Do not worry. I have a fully written statement 

here. It will take a little while. You do not mind, right? No? 

Thanks very much and thanks for accommodating my schedule. 

I am here to introduce Mr. Johnston. He is a Philadelphia-based 

father of four young children who works to improve the vitality of 

rural and urban communities through food systems reform and policy change. Along with his wife Tatiana, he is the co-director and 

a founder of The Common Market, a nonprofit distribution enterprise that connects communities in the Mid-Atlantic region to sustainable, locally grown farm food. The two have also teamed up to 

found the East Park Revitalization Alliance in their community of 

Strawberry Mansion in Philadelphia, where they have resided for 

11 years. 

He is a graduate of the University of Pennsylvania’s Wharton 

School of Business, where he concentrated on entrepreneurial management, and is proud to have recently served as a food and community fellow with the Institute for Agriculture and Trade Policy, 

and to be a current Draper Richards Kaplan Foundation entrepreneur. He serves as a trustee of the Jessie Smith Noyes Foundation, and as an advisory board member of the National Farm to 

School Network. 

Mr. Johnston has extensive experience utilizing a number of important USDA programs, including Local Foods Promotion Program 

and the Farm to School Grant Program. These programs strengthen rural communities and increase access to healthy food, and I am 

grateful that he has offered to be here today to share his experience with us. 

Mr. Chairman, thank you for that time. 

Chairman ROBERTS. Thank you, Senator Casey. You have a great 

sense of timing. 
6 

Our next witness was to be introduced by Senator Hoeven. Senator Hoeven is busy rewriting the health care bill so cannot be with 

us this morning at this particular time. 

Mr. Eric Halverson is among the fourth generation of Halversons 

involved with Black Gold, and hails from Grand Forks, North Dakota. He is the Chief Executive Officer of Black Gold Farms, which 

began raising potatoes clear back in 1986, and now grows more 

than 20,000 across 10 states. Mr. Halverson also represents North 

Dakota on the Administrative Committee of the U.S. Potato Board. 

Welcome, and I look forward to your testimony. 

Now it is my distinct pleasure to turn to Senator Ernst to introduce our final witness. 

Senator ERNST. Yes, thank you, Mr. Chair. The Committee invited Mr. Dean Meyer to testify. Mr. Meyer has been farming in 

Lyon County, Iowa, for 33 years, where he owns swine and cattle 

finishing operations and raises corn, soybeans, and alfalfa. He is 

currently serving his third year on the U.S. Meat Export Federation Executive Committee and is also a director for the Iowa Corn 

Growers Association. 

Unfortunately, Mr. Meyer experienced travel complications and 

so will not be able to join us this morning. He is not rewriting the 

health care bill. He was just unable to join us. 

So on his behalf, we have Mr. Gregory Hanes, and Mr. Hanes 

will be reading Mr. Meyer’s testimony. Mr. Hanes is currently the 

Assistant Vice President of International Marketing at the U.S. 

Meat Export Federation, located in Denver, Colorado, and Mr. 

Hanes, thank you for filling in today on such short notice. We really do appreciate it. 

Thank you. 

Chairman ROBERTS. Welcome, Mr. Hanes. You can be the standin, or simply you can be Mr. Meyer, either one. Take your pick. 

Let us get to the first witness, Mr. Dallmier, please. 

STATEMENT OF KENNETH DALLMIER, PRESIDENT AND CHIEF 

OPERATING OFFICER, CLARKSON GRAIN COMPANY, INC., 

CERRO GORDO, ILLINOIS 

Mr. DALLMIER. Chairman Roberts, Ranking Member Stabenow, 

and members of the Committee, thank you for the opportunity to 

discuss the impact of imported organic grain into the U.S. food and 

feed supply chain. 

As Chairman Roberts so graciously introduced me, I am Ken 

Dallmier, the President and Chief Operating Officer of Clarkson 

Grain Company, of Cerro Gordo, Illinois. Clarkson Grain specializes in developing identity preserved supply chains for some of the 

most respected consumer brands, with the most exacting specifications of organic and non-GMO grain crops. Today I will briefly 

highlight the situation and offer some suggestions for concrete actions this committee can take to mitigate the risks highlighted in 

the recent Washington Post article. 

The USDA organic label is highly trusted, with over 82 percent 

of households across the United States purchasing some organic 

products. Leading U.S. organic demand has been organic poultry 

and dairy products, but supplies of domestic organic grains have 

fallen short. In 2016, over 50 percent of the organic corn and over 
7 

70 percent of the organic soybeans used in the United States were 

imported. This represents 1 million acres and over $410 million in 

incremental lost revenue. 

In our written statement we outline five recommendations to 

mitigate the risk of fraudulent organic shipments. For brevity, sir, 

I will concentrate upon three during this statement. 

Number one, utilize existing USDA programs to support the expansion of domestic organic grain supplies. Congress should instruct the USDA to finalize the USDA Certified Transitional seal 

with associated process verification programs, or PVPs. In 2015, 

Clarkson Grain designed and submitted to the USDA a PVP 

aligned with the requirements to transition land into organic production. Since then, innovative brands such as Kashi have developed private PVPs and have successfully introduced a certified 

transitional line of cereal. As a result, Kashi is one of the few growing brands in a mature cereal segment. 

Secondly, increased transparency through the supply chain using 

physical tracking mechanisms that are robust to withstand grain 

transport while being easily removed from the grain stream at the 

final destination. A start-up company through the University of Illinois, Amber Ag, has developed a radio frequency transmitting 

puck, similar in size to what I am holding here, about the size of 

a key fob, that can be inserted into a bag of grain at the field or 

a truck or container, which is readable throughout the supply 

chain, through to the end user. This will eliminate reliance upon 

paper documentation that are easily misrepresented. 

Finally, personal and corporate accountability and responsibility 

must be introduced throughout the import supply chain. The current NOP mandate is to monitor the process while it limits penalties to the revocation of USDA organic certificate. By imbedding 

NOP staff at specially designed ports, and making them accountable to U.S. law, the consumer has a final guard at the gate. Shipping lines must be accountable for the validity of the cargo that 

they carry, through maritime laws, and finally, end users of fraudulent grain should face product recall liability when product does 

not meet label requirements. In short, organic livestock must be fed 

organic feed. 

Again, thank you for allowing me to provide our perspectives on 

this topic. I appreciate the interest of the Committee and look forward to answering your questions. Thank you very much. 

[The prepared statement of Mr. Dallmier can be found on page 

37 in the appendix.] 

Chairman ROBERTS. You are very welcome. Thank you so much. 

Our next witness, Mr. Crisantes. 

I do not think my introductory remarks about you really fulfill 

an appropriate introduction. You started, or your agriculture roots 

started as a young man spent in the tomato fields of Mexico, right? 

Mr. CRISANTES. That is correct, sir. Yes, we started in Mexico 

and moved to the United States to grow tomatoes here as well. 

Chairman ROBERTS. You have got quite a trajectory of success. 

You are responsible for 600 acres of organic production, pioneering, 

and water conservation. 

Mr. CRISANTES. Correct, sir. 
8 

Chairman ROBERTS. I would like to talk to you personally about 

that, especially with drip irrigation. You have about 1,500 fair 

trade employees, and the one thing that I want to mention is that 

you have dedicated your time and effort to is the protection of organic standard in the farm bill through advocacy and commitment, 

ensuring that the USDA certified organics speak to the quality, the 

mission, and the availability of healthier organic produce. 

Mr. CRISANTES. Correct, sir. 

Chairman ROBERTS. So with that extra introduction, please proceed. 

STATEMENT OF THEOJARY CRISANTES JR., ORGANIC SPECIALTY CROP FARMER AND VICE PRESIDENT OF OPERATIONS, WHOLESUM HARVEST, AMADO, ARIZONA 

Mr. CRISANTES. Thank you, sir. Good morning, Chairman Roberts, Ranking Member Stabenow, members of the Committee. 

Thank you for the opportunity to provide testimony on the organic 

industry. My name is Theo Crisantes and I am the Vice President 

of Operations at Wholesum Harvest, an organically family farm 

with operations in Arizona and in Mexico. I am here today as an 

organic grower and a member of the Coalition for Sustainable 

Organics, which promotes the continued use of containers and hydroponics in the National Organic Program. I am also a member 

of OTA, Western Growers, and United Fresh. 

My farm, Wholesum Harvest, is a true success story. We have 

been selling fresh produce into the United States since 1940, and 

in 2012, we significantly expanded our operations in Arizona. We 

currently grow organic tomatoes, cucumbers, eggplant, peppers, 

and squash on 600 acres in the United States and in Mexico. We 

are the largest producer of organic tomatoes on the vine in the 

United States. 

We started using containers and greenhouses because we found 

that it was the best way to create a sustainable and thriving organic system. This picture of containers of my prized tomatoes are 

in your packets and right here, to the right. We have reduced 

water use by 80 percent and increased the efficiency of our beneficial insect program. 

Greenhouses and container production now account for 23 percent of organic retail sales of tomatoes, 44 percent of peppers, and 

37 percent of cucumbers. These methods are also supported by consumers. Ninety-one percent of consumers support policies that 

allow farmers to grow organic produce in containers. In short, consumers want our organic products, which is why we have been a 

proud participant in the USDA organic program since 1995. 

However, the future is unclear and my business is facing significant uncertainty, as a National Organic Standards Board, a federal 

advisory committee to USDA, considers a proposal to eliminate containers and hydroponics from organic certification. I am concerned 

that NOP’s structure is showing its weaknesses, and if not corrected could jeopardize the organic industry. 

I will identify three issues for consideration. 

First, with only 15 members, sourced from an extremely diverse 

industry, NOSB can only represent a small segment of that indus-
9 

try. For example, the four growers represented currently on the 

board have a combined total of only 120 farmable acres. 

Second, the board does not allow enough public input, especially 

when you consider their influence. I have invited NOSB members 

to visit our operations, but there have been no visits. Besides threeminute public comment slots at biannual board meetings, there are 

no other ways to interact with these decision-makers. 

Finally, the priorities of the organic industry are not reflected in 

the priorities of the board. While industry involvement in setting 

organic standards is of critical importance, USDA should be empowered to take more initiative over the direction of the NOSB and 

drive more communication on the front end of policy-making, to 

give businesses like ours the confidence necessary to grow. 

Demand for organic continues to increase. Therefore, we must 

ensure all growing methods that are organic remain organic. While 

containers and hydroponics may be in the hot seat now, other technologies may be next. 

As you prepare for the next farm bill, it is important to note that 

the organic industry no longer caters to a niche market. We are a 

$50 billion-and-growing industry with significant challenges such 

as research and crop insurance availability. Previous farm bills 

have made significant down payments in our industry, and CSO 

looks forward to working with the Committee to propel organics to 

the next level. 

Thank you for the opportunity to testify today. I will look forward to answering any questions that you may have. 

[The prepared statement of Mr. Crisantes can be found on page 

32 in the appendix.] 

Chairman ROBERTS. We thank you, sir, for your most pertinent 

testimony. Mr. Johnston. 

STATEMENT OF HAILE JOHNSTON, DIRECTOR, THE COMMON 

MARKET, PHILADELPHIA, PENNSYLVANIA 

Mr. JOHNSTON. Good morning, Chairman Roberts, Ranking Member Stabenow, and members of the Senate Agricultural Committee. 

Thank you for the opportunity to testify on behalf of the farmers 

and communities we serve in the Southeast and Mid-Atlantic regions. I am Haile Johnston, a co-founder and co-director of The 

Common Market, a nonprofit food distributor, and I hope to convey 

some of the many positive outcomes resulting from investing in 

stronger local agricultural markets. 

I believe our shared interest is to ensure the health and economic 

well-being of all Americans. At The Common Market, we build infrastructure to support regional food systems that facilities wholesale market access for small and mid-sized farms, while improving 

the accessibility of local food for all people. We are particularly focused on improving economic opportunity and health outcomes for 

the most vulnerable in rural and urban communities. We see our 

work and partnerships as vital to removing barriers to success for 

farmers and the barriers to better food access for all. Primary 

among our partners in this work has been the USDA, through its 

various agencies and programs. 

Since our first sale in the summer of 2008, we have delivered 

over $16 million of local fruits, vegetables, yogurt, eggs, meat, and 
10 

grocery items from over 150 small and mid-sized sustainable farms, 

to more than 500 schools, hospitals, eldercare communities, colleges 

and universities, grocery stores, community organizations, and restaurants. By facilitating local trade, we are able to return more of 

the food dollar to local farmers and rural economies. This work has 

translated to nearly $30 million of regional investment by The 

Common Market in the last nine years. 

The Common Market arose from urban agriculture and nutrition 

education programming during the emergence of the ‘‘farm to 

school’’ movement more than a decade ago. Retailers, schools, hospitals, and other institutions were beginning to express a strong 

desire to invest in local economies and better health through food 

purchasing, yet many local farmers and the regional supply chains 

lacked capacity to meet wholesale institutional demand and food 

safety requirements. 

Our model evolved to assist farmers in building capacity and infrastructure to meet these demands, while developing the relationships, logistics, and facility to connect their product to re-emerging 

market opportunities. We have helped all of our growers in the 

Mid-Atlantic achieve USDA Good Agricultural Practices, or GAP, 

certification, and this has happened alongside other model interventions in retail and community food access, which have demonstrated profound impact in supporting economic empowerment 

and health. 

After proving the viability and impact of our work in the MidAtlantic states, The Common Market launched a new chapter two 

years ago in Atlanta, partnering primarily with farmers from rural 

Georgia and Alabama, and while our model and approach is similar 

in the Southeast, the needs and historical challenges facing our 

growers there are markedly different. 

The Common Market is connecting our partners with resources 

to improve food safety, working toward GAP certification, invest in 

farm infrastructure to improve post-harvest handling, and assist in 

crop planting to better anticipate opportunities within wholesale 

markets. All of this translates to growth in income for farmers, increased acreage in agricultural production, job and wealth creation 

for rural economies, and the generational transfer of agricultural 

practices and land. I am happy to share that after successful replication in Georgia we are partnering with growers in Texas to offer 

a similar program. 

We have had the good fortune to work in direct partnership with 

the USDA through the Local Food Promotion Program, the Food 

LINC value chain coordinators initiatives, the Outreach and Assistance for Socially disadvantaged Farmers and Ranchers and Veteran Farmers and Ranchers Program 2501, the Community Food 

Projects program, and Farm to School grant program. It is critically important that the next farm bill continue to support these 

and other local food programs to build on our efforts and to support 

new local and regional food systems across the country. 

According to our recent farmer survey, our growers are the stewards of nearly 21,000 acres and employ more than 1,050 rural 

workers. Again, this is translated to nearly $30 million in direct investment in the communities where we work and more than 1,000 

jobs. These are real jobs and real food with real impact. 
11 

I thank you for the honor of sharing our story and I implore you 

to sustain USDA programming supporting local food systems, and 

I look forward to answering your questions. 

[The prepared statement of Mr. Johnston can be found on page 

49 in the appendix.] 

Chairman ROBERTS. Thank you, Mr. Johnston. I appreciate your 

remarks, as do all members of the Committee. 

We how have Eric Halverson, who graduated from North Dakota 

State University, a school that no Division I team wants to play. 

[Laughter.] 

Chairman ROBERTS. I understand, Eric, that you have four 

daughters—Lucy, Stella, Ruby, and Lola. Do you carry a big stick 

to drive the young men off of your front porch? 

Mr. HALVERSON. They are not quite that old yet, but it is coming. 

Chairman ROBERTS. Yes. Stay ready. Please proceed. 

STATEMENT OF ERIC HALVERSON, POTATO FARMER AND 

CHIEF EXECUTIVE OFFICER, BLACK GOLD FARMS, GRAND 

FORKS, NORTH DAKOTA 

Mr. HALVERSON. Chairman Roberts and Ranking Member Stabenow, thank for the Committee’s work in preparation for the 2018 

Farm Bill. 

I am Eric Halverson of Black Gold Farms and am testifying 

today on behalf of the National Potato Council and the United 

Fresh Produce Association. 

Black Gold Farms is a fourth-generation, family-owned farming 

organization started in North Dakota’s Red River Valley more than 

80 years. We now have operations in Florida, Indiana, Louisiana, 

Maryland, Michigan, Minnesota, Missouri, North Carolina, North 

Dakota, and Texas. 

The potato industry is a long-time participant in USDA export 

programs that enhance our ability to compete in foreign markets. 

These activities are conducted through the National Potato Promotion Board under the trade name Potatoes USA. 

As a potato producer and marketer, my comments are largely focused on potatoes. However, I would like the Committee to understand that the benefits from these export programs are also utilized by many other commodities in the specialty crop family. 

Our industry joins our counterparts in the produce sector in 

strongly supporting enhancement of these vital programs in the 

next farm bill. The recent study by Texas A&M indicating a 28-to1 return on investment validates that increased resources in export 

promotion will immediately generate results for farmers and consumers. In general, one in every five rows of potatoes that are produced in the United States are destined for export markets. 

These foreign markets are vital for maintaining the economic 

health of my industry. Foreign competitors aggressively promote 

their specialty crops, often with government programs that have 

substantially larger resources. Additionally, various government 

programs lower the cost of production for foreign potatoes to levels 

that American producers cannot match. Coupled with favorable exchange rates, these foreign government policies make for an increasingly competitive marketplace for fresh and processed potatoes. 
12 

Despite these challenges, U.S. potato exports returned to positive 

growth last year, overcoming the obstacle of lost sales due to the 

West Coast port shutdown and the strong dollar, to reach their second-highest level on record. These results would not be as positive 

without the support of USDA’s export programs and MAP, in particular. It should be noted these programs are cost-sharing. The potato industry matches its MAP funding substantially greater than 

the 1-to-1, and that ratio may be larger for the other specialty 

crops. 

In terms of specific results, exports to potato industry targets 

markets in Asia, Mexico, and Central America outpaced export 

growth in the world, raising a collective 10 percent by value last 

year. 

The TASC program serves complementary but distinctly different 

function than MAP. One of the main ways the potato industry has 

utilized TASC is in providing resources for foreign plant health officials to inspect U.S. production as part of the process of opening 

their markets to American exports. 

Specifically, TASC resources led directly to the opening of the Vietnamese and Philippines markets to fresh potatoes, and the opening of Brazil and the Dominican Republic to seed potatoes. These 

valuable farm bill programs obviously work in concert with U.S. 

trade policies that reduce tariffs and non-tariff barriers in key export markets. Simply put, the U.S. cannot afford to fall behind in 

its pursuit of trade agreements that benefit American agriculture. 

We took note last week that the EU and Japan have completed 

a free trade agreement that intends to fill the void left by the 

stalled TPP. Japan is the single-largest export market for my industry and the tariff concessions that are EU competitors have just 

gained there will make for a more challenging market. 

Additionally, the potato industry has taken great interest in 

NAFTA renegotiation, as Canada and Mexico are the second-and 

third-largest potato export markets. We cannot afford to lose access 

to their markets in the review of the 25-year-old agreement. 

My comments today have been focused on USDA’s export programs but I do want to also mention how other important programs, such as the Specialty Crop Block Grant program, the Specialty Crop Research Initiative, and vital pest and disease funding 

work hand in hand in keeping our industry competitive. Though 

small in the overall scheme of the farm bill, they provide a vital 

resource to areas that continue to increase in importance. 

Chairman Roberts and Ranking Member Stabenow, we respect 

that the Committee is just beginning the process of considering all 

of the various programs of the 2018 Farm Bill. As that review continues, the National Potato Council and the United Fresh Produce 

Association would be pleased to provide additional information on 

the impact of these valuable programs. 

Thank you. 

[The prepared statement of Mr. Halverson can be found on page 

44 in the appendix.] 

Chairman ROBERTS. Thank you for your testimony. 

Mr. Hanes for Mr. Meyer. 
13 

STATEMENT OF GREG HANES, ASSISTANT VICE PRESIDENT OF 

INTERNATIONAL RELATIONS AND MARKETING, U.S. MEAT 

EXPORT FEDERATION 

Mr. HANES. Thank you. Good morning, Chairman Roberts, Ranking Member Stabenow, committee members. As you mentioned, my 

name is Greg Hanes. I am not Dean Meyer but you can call me 

that and I will do my best impersonation of him as I can. It probably will not be very well. 

But as you heard, Dean is a member of the USMEF, U.S. Meat 

Export Federation Executive Committee. He is a Director on the 

Iowa Corn Growers Association. I am actually very disappointed 

that he is not here because I think Dean really exemplifies what 

the U.S. Meat Export Federation is about. He feeds cattle. He finishes hogs. He grows corn. He grows soybeans. Those four industries, along with lamb, are all the key core stakeholders of USMEF 

that work together to increase the exports of red meat internationally. 

At USMEF I am responsible for working with our international 

offices as we implement the international marketing programs 

globally, but today I would like to really stress the vital role that 

funding from USDA’s Market Access Program and the Foreign 

Market Development program play in building the demand for U.S. 

red meat exports and to ask for the Committee’s continued support 

to fully fund these programs through the 2018 Farm Bill. 

As you know, it is a very competitive global market out there. 

USMEF’s long-standing presence in these leading export markets, 

really made possible through that sustained commitment from the 

MAP and FMD programs, has sent a clear message to our customers and buyers in the markets that the U.S. industry is committed to them in supplying the most wholesome, healthy products 

available. 

MAP and FMD funding have also been critical to our ability to 

attract and build financial support from our industry partners here 

in the U.S. USDA’s ongoing financial commitment and support 

serves as a vote of confidence in USMEF’s programs to investors 

in the U.S. production and marketing chain. 

So having worked at our headquarters in Denver and also as a 

director in our largest market, Japan, I fully understand the effectiveness and the impact these programs have on our exports. A 

good example of our approach is rebuilding confidence after the crisis that we had with the first case of BSE in December of 2003. 

With these support of these programs we were able to conduct 

carefully calibrated and integrated messaging campaigns to restore 

the buyer confidence in most of these markets, which had actually 

been closed completely to our products. 

Another example of our strategies is building demand for U.S. 

pork products among processing companies in markets around the 

world. So we are able to hold one-on-one, specific seminars with 

companies to educate them on the attributes of the products, but 

also to introduce new methods and new product ideas on how they 

can utilize our products as well. 

In all these cases, USMEF’s strategies are paying dividends in 

the form of increased exports and strong returns to the cattle and 

swine producers. More than 13 percent of the beef and beef variety 
14 

meats we produce in this country are now exported, and exports account for more than 25 percent of the pork produced. During the 

first half of this year, exports added an average of $270 per head 

for every steer and heifer slaughtered in this country, and $55 to 

the value of every hog. As a producer, that can be the difference 

between being in the red and the black. 

Beef and pork exports have also increased the returns on corn by 

an estimated 45 cents per bushel. So these well designed and executed market development programs, supported by MAP and FMD, 

really are a fundamental element of building the global demand for 

U.S. red meat products globally. 

This was concluded in the study that was completed by Informa 

Economics last year, which as, I think, Mr. Halverson mentioned, 

brings a return of over $28 for every dollar invested. They also figured that these investments produce an average annual increase in 

net farm income of $2.1 billion, while creating nearly 240,000 new 

full-and part-time jobs. 

So in closing, I would like to thank the Committee for this opportunity to be here today and testify about the benefits of the MAP 

and FMD programs, and how they support the America’s red meat 

industry and the producers throughout the country here. USDA, 

through the MAP and FMD programs, has been a reliable and invaluable partner to USMEF and our industry, so we ask for your 

continued strong support of these two vitally important programs 

through the 2018 Farm Bill. 

So thank you very much for your time. 

Chairman ROBERTS. Thank you, Mr. Haynes. We will turn to 

questions now. 

We are going to have about an hour and 10 minutes here. I do 

not know how many people are going to stay or leave, but at any 

rate, we are going to have to move in an expeditious manner. 

Mr. Crisantes, you mentioned your concerns with the status of 

the National Organic Standards Board, and my question to you is 

with regard to recommendations relating to organic regulations. 

What opportunities do you see for the Department of Agriculture 

to clarify the roles of both the National Organic Standards Board 

and the National Organic Program in determining appropriate organic regulations for the industry? 

Mr. CRISANTES. Thank you, Mr. Chairman. I think the NOSB 

has served very well the interest of the industry so far, but I think 

moving forward the NOSB board needs to evolve. I think having 

better clarity of what the goals of the NOSB should be, having better communications with USDA and the National Organic Program 

is a must. I think so far the communication has been one-sided and 

I think there has not been a real exchange of information between 

the board and USDA. 

So I would ask you, the Congress, to create a new NOSB in 

which this board would be more diverse, have better transparency, 

and have better communications with USDA. 

Chairman ROBERTS. I appreciate that. 

Mr. Halverson and Mr. Hanes, you have already touched on this 

with regards of both of you indicating how your industries utilize 

export programs like the Market Access Program and the Foreign 
15 

Market Development program. We are going to have to make some 

very tough decisions in the farm bill as it relates to spending. 

Imagine, instead of sitting here before Senator Stabenow and 

myself and other members of the Committee that you were talking 

to Mick Mulvaney, the head of the OMB. Tell us what you would 

tell him, why these export programs are worth protecting as we 

move toward reauthorization. 

Mr. Halverson, why don’t you give it a shot? 

Mr. HALVERSON. Yes. I would start by the importance of trade, 

obviously, and the Market Access Program allow us, as producers, 

to really get our toehold, or get our toes, or get our foot in the door 

in some markets that maybe we would not be in without a little 

extra help. Trade is so important, and exporting is so important to 

the potato industry that, we really feel like investing in things that 

are working, which the Market Access Program is, is really some 

of the low-hanging fruit in terms of hard choices from an allocation 

standpoint. 

So we feel real good about how it has impacted the potato industry. 

Chairman ROBERTS. Mr. Hanes. 

Mr. HANES. I think there are two key words here. One of them 

is ‘‘customers’’ and the other is ‘‘jobs.’’ So as we know, we have 96 

percent of the world’s population outside of the United States. That 

is where our customers are. The middle class is growing at a phenomenal rate globally. If you look at where we will be in the end 

of the next decade, you will have probably about 70 percent of the 

middle class in Asia. They will have the money. They have the resources to purchase our products. We need to be able to go out 

there and reach them. 

So obviously it is a very, very competitive market. We are not the 

only ones playing here. So you have all our competitors that have 

similar programs that are trying to attack, and gain market share, 

and push us out. So we need to be very, very aggressive in that 

case, show the quality of the products that we have and the ability 

to supply them the reliable products that they are looking for. 

I think the other issue is jobs. So in our industry, the red meat 

industry, we have producers in every state, and most of these are 

rural jobs in rural areas. So these programs that export are not 

just supporting those producers. There is a whole network infrastructure at jobs supporting the powers in those rural areas as 

well. You have to have truck drivers that are moving the animals 

from the farms to the feed lots to the packing plants. You have the 

packing plants. You have storage, cold storage. You have the exporters. You have the packers, all this. All these add value to the 

products and are actually bringing value to the producers and the 

industry and creating these jobs in areas where there may not be 

a lot of other jobs available. 

Chairman ROBERTS. I appreciate that. I apologize to my fellow 

Senators for going over time but I want to get this in. 

Mr. Dallmier, it is obviously evident that fraudulently imported 

organic grain significantly undercuts our domestic producers. It 

seems that the organic demand has far outpaced the ability of the 

National Organic Program to adopt to this situation. 
16 

How has the system design of the National Organic Program 

been outpaced by the rapid growth of the organic industry, and 

what can we do about it? 

Mr. DALLMIER. So, Senator, I believe the design of the NOP did 

not include sufficient enforcement power to combat fraudulent—to 

combat in the event of fraud, whether it be domestic or foreign. The 

idea was to promote trade, with the premise that people are inherently good. 

However, as the world commodity prices declined, as the margins 

to be gained and the risk to be paid came out of balance, that 

premise did not necessarily hold. The NOP should have been more 

aggressive in developing a transition program that was designed to 

build the U.S. supply. 

So the organic production potential needs to be at scale, so that 

we are not reliant on those imports. By providing the same programs to organic and transitional producers that conventional producers have, with the recognition of the higher revenue potential 

that we have been discussing, that could have been accomplished 

much sooner, which I believe would have averted the temptation 

and the benefit of such fraudulent imports. 

Chairman ROBERTS. I want to emphasize to the witnesses that 

the Committee is going to continue to look into this, and we really 

appreciate your suggestions. 

Senator Stabenow. 

Senator STABENOW. Well, thank you, Mr. Chairman, and thank 

you to each of you for your testimony and input this morning. 

Mr. Johnston, I wanted to start with you because your local food 

work started at the community level and evolved to working with 

schools, farmers and community members to increase food access 

and build integrated regional food systems. I wondered if you 

might talk a little bit about how your work has improved connections between urban and rural communities. 

Mr. JOHNSTON. Sure. Thank you, Ranking Member Stabenow. I 

appreciate the question. 

Yes. Our work very much did begin doing urban agricultural 

work in communities, nutrition education programming, and helping to build a greater connection to food within communities that 

have been struggling to access for quite some time. I think the exciting part of that is that evolution of our work, recognizing that 

access to food really is a regional food system issue. It is not just 

about community-scale agriculture, although that is a tremendous 

opportunity, it is a tremendous way to introduce folks to regional 

food systems and to greater opportunities in agriculture. 

Most recently, work that we have done with the 2501 grant program, I think, is a great example of this, where we have been 

working with folks who have been working in urban ag, training 

to build skills there, and connecting them to incubator farms in 

rural areas, helping them scale their experience, get on to larger 

tracts of land, and create viable enterprises, actually bringing new 

farmers into agriculture in our region. 

So building those connections and bridging voids between urban 

and rural communities has been a big focus, and I think success, 

of our work. 

Senator STABENOW. Great. Thank you very much. 
17 

Mr. Halverson, we know how important the specialty crop industry is to our economy in this country, and certainly in Michigan 

specifically. We now have a farm bill title, which we did not have 

before 2008. But specialty crops do not receive more traditional 

support through commodity programs. 

They rely on programs like Specialty Crop Block Grants, Plant 

Pest and Disease Management programs and the research initiatives. Could you talk more about why these programs are so important as the way that we support this large part of our agricultural 

economy? 

Mr. HALVERSON. Sure. I would love to. You know, as we talked 

about how the trade is important and the market is so important, 

one of the things, just to stay competitive, is growers in the U.S. 

and in Michigan. So when we have issues, challenges like pest and 

diseases, it is really important we have got somewhere to turn to 

help solve those issues. 

I think of one thing in particular. In North Dakota we have—we 

are fighting this disease called Dickeya, and there was a grant that 

was approved, and there are a couple of professors at North Dakota 

State then are working on how to identify this disease—it is a 

seed-borne illness—so it does not get into our seed system. It is 

something that hit us in a couple areas of operation. 

So that is an example of these things so we can stay competitive 

and manage some of the production risk, from a specialty crop 

thing, where you do not have the investment like you do in typical 

corn and soybean type, big acreage crops. It really gives us a boost 

in the arm, in terms of fighting some of those issues that come our 

way. 

Senator STABENOW. It seems like we keep seeing new issues all 

the time, I find. I am sure that you are always wondering what is 

around the corner. 

Mr. HALVERSON. It seems—yeah, there is a new bug or something around the corner every day. 

Senator STABENOW. Yes. 

Mr. HALVERSON. It feels that way. Sure, it does. 

Senator STABENOW. Yes. So thank you. 

Mr. Crisantes, in your testimony you talked about some of the 

existing challenges and limitations of the current organic system in 

meeting the needs of a rapidly expanding organic sector, in part 

due to a historic deficit of organic research, which remains far behind marketplace trends and industry needs. So I wondered if you 

might explain why dedicated organic research funding is critical to 

the success of your business and to the organic industry. 

Mr. CRISANTES. Thank you very much for that question. Senator, 

for example, I will talk a little bit about variety development on the 

specialty crops, similar—like tomatoes. So in order for companies 

to develop varieties they do it using conventional production practices. So the traits that they choose are pretty much what is on the 

conventional production. 

When you use those varieties and seed them in an organic production practice, those traits might not show as is. For example, on 

tomatoes, powdery mildew is a big problem, and then it is easily 

controlled, or easier to control in conventional agriculture, but in 

organic agriculture it is not. So if a variety is very susceptible and 
18 

it was chosen during conventional screening, then it shows up in 

organic. So we planted an organic and it does not work. 

So I think a lot of dedicated research money is needed for organic 

production because we have different tools and the outlook is different between convention and organics. 

Senator STABENOW. Thank you. Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Heitkamp. 

Senator HEITKAMP. Thank you, Mr. Chairman, and thank you to 

the panel. What an interesting group of people. What is always remarkable for me is if you think that agriculture—the image of agriculture, I think, in this country is a 1950s image, and I wish everybody would sit and listen to what you do every day, that is some 

of the most innovative and really scientific work that is being done 

throughout the country. It makes me proud that I represent a 

state, like North Dakota, that has great people like Mr. Halverson, 

who is out innovating. 

I do not think some of the members got a chance to see your 

beautiful picture, but Senator Donnelly and I were talking about 

how amazing it is, what you have been able to do, and we look forward to reviewing the challenges that you have had, bringing your 

tomatoes to market under a label that I think you deserve and 

earned. So just know, even though we do not do that much, although they are starting to do it in Bottineau, and we see that as 

a real opportunity to look at providing fresh fruits and vegetables, 

things that Mr. Johnston is talking about, in a way that gives 

every state an opportunity to grow these crops. 

I want to turn to Mr. Halverson, of course. You guys, that does 

not surprise anyone. You know, one of the great stories of American agriculture has really been written in the land-grant colleges. 

We say first it was better farming practices but also research, and 

you mentioned the work that NDSU is doing. 

I want to acknowledge that but I want to turn to trade, because 

I think that right now we are in a period of transition on trade. 

We walked away from TPP. That, in my opinion, gave the EU an 

excellent opportunity to move into the Japanese market, affecting 

certainly pork, but I think you made an excellent point, Eric, about 

potatoes. 

When you are working with your foreign buyers, when you are 

working within your association, what are you hearing from our 

trading partners across the globe about the challenges, and what 

can we take back to the trading professionals so that they better 

understand what our farmers and ranchers are hearing direct, one 

to one, with their markets? 

Mr. HALVERSON. Well, thank you for the question. What you hear 

is the U.S. provides—we grow a really great potato, in North Dakota and in other places in the U.S. Our potato has value that exceeds potatoes grown in other areas. But that can only—that only 

gets us so far, right, and people—so when we come to the market 

with products that are, for whatever reason, more costly to bring 

to the ultimate customer, it provides a challenge. 

I shared with the members, we have been able to gain back some 

of ground of export, and that is on the back of our good quality 

product, but we get resistance because of price. So that price can 

be impacted by tariffs or by other subsidies or things that people 
19 

are doing outside of the U.S. that help lower the cost to deliver the 

products to the market. So, I mean, the good old-fashioned cost is 

a pretty big lever that influences things. 

Senator STABENOW. Yes. One of the things that we know, if you 

look at bean farmers across North Dakota, people would be surprised to see how often North Dakota farmers and farm groups 

travel internationally. That is because a lot of this is about one-onone relationships, but a lot of this is supported by USDA and 

USDA programs. 

If we see those programs eliminated, programs like MAP, how 

will we ever get that introduction that will allow us to promote our 

much superior agricultural products into a market that would like 

to have much superior products? 

Mr. HALVERSON. Yes. It would be difficult. I personally have been 

to Vietnam and to Central America, representing the industry, trying to move potatoes, and it is just—there is not enough margin in 

agriculture to take some of those steps. It would be a lot more difficult. So those types of funds really help us get out and get into 

markets where we might not otherwise be, just to help us open 

those doors. 

Senator STABENOW. Yes. I just want to make the point that I 

know, personally, many farmers who have had, and still maintain 

great relationships with their buyers. It becomes almost like family. But that can only go so far, that relationship building. If the 

tariffs are reinstated, or uncompetitive, if we are not doing the 

work to promote the outreach, we will not be successful in agriculture. We cannot be successful in agriculture at the current margins without trade. 

So we are going to work on that. We are going to work on all 

of these issues. But thank you so much. What an interesting panel 

you have put together, Mr. Chairman. 

Chairman ROBERTS. Thank you, Senator. 

Senator Hoeven. 

Senator HOEVEN. Thank you, Mr. Chairman. I want to welcome 

all of our witnesses this morning, particularly, Mr. Halverson, I 

want to welcome you. I had hoped to be here sooner and give you 

a big introduction, but it is just great to have you, the CEO of 

Black Gold Farms, and, as you said, raising quality potatoes not 

only in North Dakota but in many other places as well. So, again, 

thanks to all of you. 

I am going to pick up on the trade issue. Talk about the MAP 

program a little bit, will you, Eric, and tell us what you think of 

it, and its importance. 

Mr. HALVERSON. Yes. The MAP program is really important to 

the potato industry. We, the potato industry, utilizes somewhere in 

the neighborhood of $5 million, I believe it is, of course, leveraging 

our own industry dollars. A lot of that is through the Potato Promotion Board, Potatoes USA. So we put on programs and do things 

to help obviously encourage other countries to buy our potatoes. 

One in five—as I said, one of five rows of potatoes are exported out 

of the country. 

So utilizing those programs, getting us into those foreign markets is vital to maintaining a healthy balance, healthy supply and 

demand balance of potato production in the U.S. 
20 

Senator HOEVEN. So as we work on the farm bill, that is an important program for you that needs to be included and funded. 

Mr. HALVERSON. Absolutely. Absolutely. 

Senator HOEVEN. Then I think you saw that Secretary Sonny 

Perdue has created a position, Under Secretary of Trade, which 

was something that we authorized in the last farm bill. Talk a little bit of how—any recommendations for that Under Secretary of 

Trade position in USDA? 

Mr. HALVERSON. No. I—looking at it from my position, to me it 

highlights the emphasis and focus on trade, and anything that we 

can do that does that, that highlights the emphasis and focus on 

trade, I think is a positive step. So I am really encouraged by that. 

Senator HOEVEN. Some other programs that we will look at in 

the farm bill that I would like you to comment on, the Specialty 

Crop Block Grant program, and also the Specialty Crop Research 

Initiative. Just kind of talk about those two, their importance, as 

we work on the new farm bill. 

Mr. HALVERSON. Yes. So I just mentioned the one project at 

North Dakota State, about Dickeya. They are doing other things 

there that are part of the Specialty Crop Block program. There is 

an app they are developing that helps forecast potato blight, which 

is a pretty bad disease. 

These things, research and development in specialty crops, are 

really important, and as I mentioned earlier, the specialty crops do 

not get the—they do not get the focus that our commodity crops 

friends so. So it is really vital to help us and to provide a little bit 

of extra support in protecting ourselves from the production risks 

out there. 

Senator HOEVEN. The research initiative, very important for you 

in terms of disease and productivity? 

Mr. HALVERSON. Yep. Yes. No, absolutely. 

Senator HOEVEN. What foreign markets are potato growers looking at? Are there certain markets you are looking at? 

Mr. HALVERSON. Well, so Japan is our number one market, followed by Canada and Mexico, but a lot of focus in the potato industry has been in Asia. 

Senator HOEVEN. Okay. Any renegotiation on NAFTA, we have 

to be careful to make sure it is good for agriculture when we are 

talking about Canada or Mexico. Correct? 

Mr. HALVERSON. Absolutely. 

Senator HOEVEN. Very important for the potato growers. 

Mr. HALVERSON. Absolutely. 

Senator HOEVEN. Any opinion, thoughts that you have in regard 

to the strong dollar? I mean, one of the challenges we find with not 

only exporting crops but livestock is the strong dollar. It makes it 

hard to compete. Have you had any dialog in the industry about 

ideas, thoughts, things we could do to help there? 

Mr. HALVERSON. Yes. I mean, that gets difficult, and so what we 

have to do as producers is back to focusing on the quality of the 

products we do and the productivity we have in growing those 

products. So if we can be more efficient and have a higher-quality 

product, that helps us, and that would circle back to some of that 

research discussion we had, and things we can do just to be better 
21 

farmers are going to help us compete, even with the strong dollar, 

because we are going to be better at it. 

Senator HOEVEN. Who are your strongest competitors in international export—in exports? 

Mr. HALVERSON. Canada, and there are some European countries—Holland, and Germany and those countries—that are competing. Certainly Canada. 

Senator HOEVEN. Any other priorities you have, particular for 

the next farm bill? 

Mr. HALVERSON. I feel like that trade is just the number one. So 

I just—it is kind of the 80–20 rule, and that is the more emphasis 

we can put on trade and helping us be efficient and productive 

farmers, from a research standpoint, the better off we will be. 

Senator HOEVEN. Again, thanks for being here and for what you 

do. 

Mr. HALVERSON. Thank you. 

Senator HOEVEN. Greet your family. 

Chairman ROBERTS. Thank you Senator and Mr. Halverson. Let 

me underscore that you have no need to worry with regards to this 

Committee in the recognition of the importance of specialty crops. 

You cannot serve with the distinguished Senator from Michigan 

without understanding the cherry trees, and then there are cherry 

trees, and then there are cherry trees. 

[Laughter.] 

Chairman ROBERTS. So do not worry. 

Senator Gillibrand. 

Senator GILLIBRAND. Mr. Chairman. 

Chairman ROBERTS. If you could hit your mic there, please. 

Senator GILLIBRAND. Can I please concede my minutes to Senator Van Hollen? 

Senator Van Hollen. I thank the Senator. Mr. Chairman, I just 

want to say unfortunately I am being called to the Appropriation’s 

Military Construction Appropriations Markup, but Maryland has a 

big interest in specialty crops, organics, and all the things that we 

are discussing. So with your indulgence I will submit my questions 

for the record. 

Thank you, Mr. Chairman, and thank the witnesses. 

Chairman ROBERTS. Well, thank you, Senator, and when you go 

and consider that military construction, if you can get the Marines 

out of Quonset huts into something better I would appreciate it. 

Senator Gillibrand. 

Senator GILLIBRAND. Thank you, Mr. Chairman. Thank you 

Madam Ranking Member. Mr. Johnston—no, I want to do this one 

first. Mr. Crisantes, all of us on the Committee have heard about 

the tremendous growth of the organic industry and about how 

growers struggle to meet consumer demand. This has created a 

great opportunity for many young farmers in New York to begin or 

transition to organic farming. 

I worry that the pace of research and extension services for organic growers may limit this potential growth. Do you think that 

USDA funding for organic research and extension is adequate and 

keeping pace with the industry? 

Mr. CRISANTES. Thank you very much for that question. I certainly think we should be able to strengthen those programs. Re-
22 

search is extremely important, as it is in all specialty crops. But 

in organics, the lack of tools for us to be able to produce and be 

more productive—it is a small handicap. So research, it is a very 

important tool that we have for us to be able to succeed and to become more and more productive. 

Senator GILLIBRAND. Have you struggled to find the right types 

of seeds adapted to your production system? 

Mr. CRISANTES. We certainly do, because, like I said before, a lot 

of these varieties are selected under conventional production, and 

if we were to have specified research for organics then a lot of that 

could be complemented and be able to produce and select seeds on 

organic production practices. 

Senator GILLIBRAND. Mr. Dallmier, in your testimony you talked 

about the need to increase the oversight of imported organic products to reduce fraud and preserve consumer confidence in the integrity of the organic seal. What can the Committee do to support 

more domestic organic production so that our market is less reliant 

on imports? 

Mr. DALLMIER. So thank you, Senator, for the question. I believe 

that we need to encourage more scalable farming operation to incorporate organic production into their business plans. We are at 

that transition period between where organic production was generally considered a small-scale enterprise. If we were to then make 

the leap into—so that we are not reliant upon those imports we 

need to get to scale. So how do we go about doing that? It is about 

the research that you were talking about, the extension that you 

were talking about. We also need to think about pushing that research not only to the land-grant universities but to the regional 

and the community colleges as well, because they have actually the 

face-to-face touch that many of the land-grant universities have 

lacked. 

We also need to utilize and expand upon the existing USDA programs to encourage that transition period between convention and 

organic farming. Some examples that I would like to highlight are 

the Soil Health and Protection Initiative, or SHIP, the Conservation Stewardship Program; the Environmental Quality Initiatives 

Program, on the conservation side, as well as the financial backstops that are currently involved, such as crop insurance, revenue 

insurance, et cetera, so that those would take into account the 

higher revenue stream and the higher revenue potential of specialty crops and organics. So those risk mitigation tools can be utilized effectively as this becomes a large-scale business. 

Senator GILLIBRAND. Do you think that organic transition certification could help more commodity producers obtain full organic certification? 

Mr. DALLMIER. Absolutely, ma’am. As our markets are requesting 

more knowledge, more transparency within those marketplaces, the 

Certified Transition Program allows a level playing field and a 

level set of standards to build upon that market, going forward. 

Yes, ma’am. 

Senator GILLIBRAND. Thank you. Mr. Johnston, I recently toured 

Capital Roots, a great organization in Troy, New York, that helps 

farmers bring their goods from fields to city, a community garden 

program that spans four counties and makes fresh produce avail-
23 

able to elderly, low income, and disabled residents. They received 

the Local Food Promotion Program grant that helped them to develop their food hub and double the amount of locally grown 

produce they buy direct from farmers. 

I know that you have experience with LFPP programs, and because I am out of time perhaps you can comment, for the record, 

on how this program has worked to improve food systems in your 

region. He can submit it if you want to move on. Okay. Go ahead. 

Mr. JOHNSTON. Thank you for the question, and I also want to 

share that last week began our first deliveries into New York City 

and the beginning of our partnership with New York farmers, and 

it sounds like the project in Troy is very similar to the work that 

we are doing. 

LFPP program for us, effectively, what it allowed us to do is invest in cold storage and post-harvest handling practices with some 

of our rural Amish farmers, and help them improve the quality and 

shelf stability of the product they were bringing to market, and especially with brassicas. So it allowed them to expand the acreage 

that they were growing, focusing—actually, broccoli was one of the 

key products—and really help them grow their farm enterprise. 

So, in short, LFPP has created market opportunity for rural 

growers and helping them create jobs and economic vitality. 

Chairman ROBERTS. Senator Klobuchar. 

Senator KLOBUCHAR. Thanks very much to you, Mr. Chairman, 

and Senator Stabenow for holding this important hearing. As many 

of you have mentioned earlier, I have heard from our staff, export 

markets are essential to our ag sector. I certainly know that in my 

state. The importance of those markets is what makes trade disruptions so concerning. 

One example is the dairy industry which was hit hard by the recent creation of a new Class 7 pricing scheme, that hurt U.S. exports to Canada. This was something that came out of Canada. 

What tools are available to address foreign policies that threaten 

to derail exports, in a case like this? Anyone can answer it. 

Should I start calling on people, like law school? 

Mr. HALVERSON. Well, I think some of the tools are—in the potato industry, that we use our—they basically revolve around our 

production capabilities and then our working with our associations 

and so forth to help guard against that—understand what is going 

on and guard against it. I mean, that is the potato answer. 

Senator KLOBUCHAR. Okay. Anything else? Okay. Anyone? 

Mr. DALLMIER. Ma’am, I think, as merchants, and thinking about 

trade, we are much more interested in stability and continuity and 

predictability as we engage in our trading partners. I would encourage the policymakers to investigate and to think about how 

that stability has been affected as we renegotiate NAFTA, as we 

pull out of TPP, and some of the—— 

Senator KLOBUCHAR. How about Cuba and the recent move to go 

backwards on Cuba? I carried the bill to lift the embargo. 

Mr. DALLMIER. Yes. All—— 

Senator KLOBUCHAR. That would be inconsistent with the way 

we were headed. 

Mr. DALLMIER. —all trading partners are, I think, valid at that 

point. 
24 

Senator KLOBUCHAR. Mr. Halverson, do you want to comment on 

Cuba? As you know, we—the recent move was to not change the 

ag provisions, but, of course, when you limit a foreign visit from 

Americans you are going to hurt ag as well, and that is why the 

Chamber came out so strongly against the move. I am just curious 

about your view on that. 

Mr. HALVERSON. Well, again I would—all—we are looking for 

every opportunity to move our products, and I think we are—I 

know we are supportive of any of those efforts and Cuba would be 

one of those, as far as a place that we are not able to go now, so 

that is a new market for us to move our products. So anything that 

can be done to help open that up is good. 

Senator KLOBUCHAR. In your testimony you talked about seminars, technical support, training, promotion, all of this helps develop the U.S. brand. Can you elaborate on some of the specific efforts within the Market Access Program and how they support U.S. 

commodities in maybe newer markets? 

Mr. HALVERSON. Sure. One that comes to mind right away is 

that the U.S.—Potatoes USA has a program called Why Buy U.S. 

So they take a bag of U.S. French fries and they put it in a column, 

next to some of our competitors’ French fries, and it shows the better quality of U.S. potatoes, and in this case potato French fries. 

So that is just one quick example of how that—as they are doing 

that in some of these markets, how it is demonstrating the superior 

nature of our products. 

Senator KLOBUCHAR. Very good. You brought up NAFTA, Mr. 

Dallmier. Thank you. Do you want to just talk a little bit about 

how that fits into the ag export market? I know Secretary Ross has 

been working on some of the issues, including sugar, that we 

worked with him on, and we were pleased with the result, some of 

the things that he wants to get done before it gets to the renegotiation. Do you want to talk about the importance to ag? 

Mr. DALLMIER. Certainly. I think across all of the ag sectors our 

number one and number two exports markets are Mexico and Canada. Those markets, as they are—I can talk perhaps a bit to Mexico within the corn and soybean realm. One of our key clients directly imports our organic corn for chips into Mexico. As the discussions around NAFTA were coming to a head, we started getting a 

lot of phone calls. You know, what do you see? How do you see it? 

What is the impact? They were starting to look at South American 

supplies. 

So in the organic world, South American supplies, we get into 

very much the same questions as we do in current import supplies. 

So it could very well hurt the brand recognition of U.S. products 

in certified organic. 

Senator KLOBUCHAR. All right. Thank you very much. I appreciate all of your work. 

Mr. DALLMIER. Thank you, ma’am. 

Senator KLOBUCHAR. Thanks. 

Chairman ROBERTS. Senator Grassley. Senator Grassley, Dean 

Meyer from Rock Rapids, Iowa, in Lyon County, could not be here. 

Mr. Hanes gave his testimony. I do not know what happened with 

regards to Mr. Meyer not being able to make it. 

Senator GRASSLEY. Airplane problems. 
25 

Chairman ROBERTS. So that crop-duster that you fly from Iowa 

to here just did not fly, or what? 

Senator GRASSLEY. I think it was the airplane. Can I go ahead 

and ask my questions? 

Chairman ROBERTS. Yes, sir. Yes, sir. 

[Laughter.] 

Chairman ROBERTS. Certainly. 

Senator GRASSLEY. I am surprised you have been talking. 

[Laughter.] 

Senator GRASSLEY. I just have one question and it is for Mr. 

Dallmier. 

Mr. DALLMIER. Yes, sir. 

Senator GRASSLEY. It may—it is more for my own personal information, but if there is a public policy issue connected with my 

question that you think we ought to consider, you make that decision and tell me what you think it is. 

But it is my understanding, from USDA figures on the price of 

organic corn at $8, and $17 for soybeans, that then I presume some 

justification for that is the fact that certain period of time land has 

to lay fallow before you can start growing organic, and I do not 

know exactly how long that is. But is that price that I just quoted 

to you enough to encourage people to get into it? 

Then also you have got to consider the unpredictability of prices 

down the road, after they have let their lay idle so that they can 

put it into this crop. Then every farmer puts up with that, but I 

just wondered if—how that comes to incentivize people to get into 

it. 

Mr. DALLMIER. Thank you for the question. The prices that you 

are quoting are accurate, and several years ago the price of an organic bushel of corn was about three times the price of a conventional bushel of corn. The price of organic soybeans was about two 

and a half to three times that as well. So those are primarily quality and supply constraints, as well as the transition period from— 

and it happens to be three years—from conventional to organic. 

How do we incent people to come into that transitional period? 

That is where much of the uncertainty, both on a cropping strategy 

as well as financial strategies, come together. I think the Certified 

Transition Program that we have asked USDA to finalize, that program comes into play because that then builds markets for the 

crops that are a part of those three years, and it is more than just 

hay and different other crops. It can be such things as sunflowers, 

or small grains, unique places in those high-value areas. 

That is where the conventional risk comes. That is where the financial risk comes. Once you get through those transition periods 

into selling your certified organic grains, in our case, that is where 

the revenue stream comes to play. That is also where the increased 

number of jobs comes to play, because it takes more people per 

land area for an organic production than it does for conventional 

agriculture. Those are real jobs, and in many cases those jobs, as 

well as the increased revenue and increased profitability, are what 

are allowing people to remain on the farm, as well as the infrastructure that was talked about earlier today, as far as the logistics, the market, and so on, that infrastructure as well. 

I hope I have answered your question. 
26 

Senator GRASSLEY. Any policy considers for us as we go into the 

next farm bill, in regard to what you just said? 

Mr. DALLMIER. Certainly. I think we can build upon the crop 

risk—the crop insurance, revenue insurance. Those financial 

pieces, we start to bring scale into organic production. We also 

need to be mindful of the RMAs organic—the value of the organic 

production. These are very similar to—in the state of Iowa you 

have seed corn fields, seed soybean fields that have a different revenue structure, a different price structure than conventional row 

crops. 

So the structure and the framework around what could be done 

with insurance and other market programs are already there. They 

just need to be incorporated and transferred into an organic specialty crop. 

Senator GRASSLEY. Thank you. Thank you, Mr. Chairman. 

Chairman ROBERTS. Thank you, Senator. I understand that Senator Ernst is going to be back with us, on the Committee. Is that 

the case? 

Mr. Dallmier, you have been giving excellent testimony. I understand your company does not import much organic grain, but I understand you source from a great number of states, including from 

Leoti, Kansas. 

Mr. DALLMIER. Yes, sir. That is correct. 

Chairman ROBERTS. That is a little northwest of Garden City, 

way out there. It is not the end of the Earth but you can see it 

from there. 

Mr. DALLMIER. On a windy day you can throw a rock. 

Chairman ROBERTS. From what other states do you source? 

Mr. DALLMIER. So we source organic grain across the eastern 

United States, from the Rockies to the Southeast, from the Gulf to 

Canada. A brief list would be the Dakotas through Iowa, Minnesota, Nebraska, as you stated Kansas, Texas, Missouri, Illinois, 

Wisconsin, Indiana, Ohio, Kentucky, Tennessee, and throughout 

the Southeast. 

So the interesting part about the organic and specialty industry 

is the quality of the material and the revenue—or the quality of 

the material and the requirements of our clients allow those crops 

to travel much greater distances. So it is not uncommon, sir, for, 

say, an organic blue corn to travel from Nebraska to Illinois to be 

cleaned, then shipped again to an organic chip maker in a different 

state. Or we were talking about cross-country trade. It is also not 

uncommon for a corn crop from Kansas or Iowa to come to Illinois, 

then go to, say, British Columbia, going across to Canada, for organic products as well. 

Chairman ROBERTS. That is a rather incredible swath of territory. 

Mr. DALLMIER. It keeps our merchandisers quite busy. 

Chairman ROBERTS. You are like Hank Snow. You have been everywhere, man. 

[Laughter.] 

Chairman ROBERTS. You and I are the only, probably, two people 

who—— 

Mr. DALLMIER. Yes, I agree with you. 
27 

Chairman ROBERTS. —even know what I am talking about. But, 

at any rate, there was one other question, I think, that—and since 

I have the time and while we are waiting for Senator Ernst, Mr. 

Crisantes, some in the organic industry have a tendency to narrow 

their focus to overly specific issues, determined by parochial interests of activist groups. As a thriving organic business, what do you 

see as the most significant, overarching issue facing the organic industry? 

Mr. CRISANTES. Sir, for example, right now we are discussing our 

production practices and everybody here notes that the requirement to have a transition standard, and that is not being discussed 

right down at the NOSB. So I think there is a disconnect between 

the priorities of the industry and the priorities of the National 

Standards Board. 

I think that is a key role that NOP and the USDA can play, and 

leading the communication in the front end between USDA and the 

NOP to guide the NOSB to provide feedback on policy. 

Chairman ROBERTS. I appreciate that. Thank you very much. 

Senator Ernst, thank you for returning. 

Senator ERNST. Thank you, Mr. Chair, and thank you again for 

everybody for attending today. 

Mr. Hanes and Mr. Halverson, you both mentioned in your testimony the importance of MAP and FMD funding for promoting our 

agricultural bounty abroad, which is great. As you know, the President’s budget proposal zeroed out both of these programs, and, additionally, there is a bill on the House side that would double the 

annual funding for both MAP and FMD. 

What do you believe is the right funding level that will give us 

the biggest bang for our buck and still be aware of our current 

budget constraints? 

Mr. HANES. Obviously that is a tough question because I think 

these programs are incredibly important. The impact they have is 

huge. The leverage they have within the markets is incredible too. 

I mean, the funding we get from these programs actually is leveraged with funding we get in-market with customer companies that 

we are working with, so the market impact grows and grows. 

I would love to see a doubling of the program, because I think 

that it could be well utilized and would have a significant impact 

in the markets. I think the MAP and FMD programs are really 

key, because regardless of what is happening politically, they have 

been the bedrock of our international activities and show the U.S. 

industry commitment to our trade partners. We are currently facing different trade issues and are renegotiating trade deals which 

is causing concern among the international trade buyers. We need 

these programs in order to alleviate any concerns and demonstrate 

the consistent level of commitment of the U.S. industry. 

So without that commitment, you raise among our trade partners, which opens the door for our competitors to get in there and 

grab market shares. In this global market, the more active and 

more aggressive we can be, them more successful our programs will 

be for our industries. 

Senator ERNST. Great. Mr. Halverson? 

Mr. HALVERSON. Yes. I would add to that in that there is a 28- 

to-1 return from the study through Texas A&M of our investments 
28 

in Market Access Programs. So, to me, you want to invest money 

as much as you can into things that are working, and certainly for 

the potato industry the MAP funds, the MAP programs are working. I also believe that, as was mentioned, leveraging grower dollars, essentially—so there is skin in the game from a grower’s 

standpoint—really helps to make sure we are investing those dollars in places that are going to generate those higher returns. 

Senator ERNST. No, I would tend to agree. It is always good when 

we can leverage those dollars, and it is so much better for our producers. 

Your testimony had also touched on how the recently completed 

bilateral trade agreement between Japan and the European Union 

will put us at a competitive disadvantage on certain ag and food 

products, and in the wake of the Trump administration’s withdrawal from the TPP, the Trans-Pacific Partnership, can you speak 

to the importance of the U.S. negotiating our own bilateral deal 

with Japan, and what kind of lost market share in beef, pork, and 

potatoes are we talking about with the Europeans beating us to the 

punch in Japan? If you can address that as well. 

Mr. HALVERSON. Yes, just quickly, for Japan we export over $300 

million worth of potatoes. It is our number one export market. So 

there is a concern. I believe it is an 8 ° percent tariff. There is a 

concern if others do not have the same type of obstruction that we 

do then obviously they will be more competitive in that marketplace. So it is significant for potatoes. 

Senator ERNST. Very good. 

Mr. HANES. The same on the red meat side. So, obviously, Japan 

is our largest market for both beef and pork. If you look at beef, 

the TPP would have had a huge impact there. We pay a 38 ° percent duty in Japan right now. That would have gone down to 9 percent. With it already being our largest market at almost 39 percent 

duty, if you bring that down to 9 I think that would have really 

spurred consumption and growth there. 

You also look at Australia. They have a free trade agreement 

with Japan now, so their duty rates are already 11 to 12 percent 

lower than what we are paying and will continue to drop to 19. So 

we have got that hurdle that we have to really push. 

So the sooner we can do some type of trade agreement I think 

is critical. You know, the TPP framework, I think, was excellent for 

agriculture in the red meat industry. If we can do a bilateral with 

that, or maybe make some kind of changes to the existing TPP and 

re-enter that. You know, the TPP 11 is continuing. Japan has already ratified TPP, so they are looking at moving forward with 

those countries that are already engaged, and we cannot afford to 

be left out. So it is critical. It is our highest margin, highest value 

market. 

Senator ERNST. Absolutely. I am running out of time, but I am 

going to get on my soapbox. I firmly believed in TPP as far as our 

agricultural commodity products, and getting those into those countries that we believe could be very good trade partners for us. I just 

came from an Armed Services Committee meeting, and so not only 

do I see this as a great trade opportunity with those nations but 

I also see it as a national security issue, because if we are not participating in trade with these nations there certainly is another 
29 

country in that region that will step in, and that country is China, 

and we do not want to see any additional influence of China in 

some of those countries. At least that is what they have stated to 

me as well. I believe that good trade partners make great friends. 

So thank you very much. I appreciate it. Thank you. 

Chairman ROBERTS. Thank you, Senator. We do face a very 

unique challenge, a very difficult challenge with regards to trade 

policy, because it is more than just saying that we want a robust 

and predictable trade policy. 

I was privileged to meet with the President about 10 days ago 

with regards to crop insurance, and I think we will not have a 

problem with that. But trade also became the subject matter. I am 

very pleased that the President’s Cabinet weighed in, more especially Sonny Perdue, but also General McMaster with regards to 

national security, and our Secretary of Commerce, Secretary Ross, 

and Secretary Tillerson. That might have been quite a meeting. 

But we are not in the business of terminating—that is a bad 

word—with regards to NAFTA. That has shifted to renegotiate, 

modernize, improvement, whatever adjective you want to use. So 

we look forward to that with our trading partners that have been— 

we have been doing that for quite a while. 

With regards to those three letters that we do not say anymore— 

we just say Pacific Rim countries—that helps. It has been seven 

years we have been working with those countries. I think that also 

has national security impacts. I am pretty confident the President 

understands that, and so I am looking forward to working with the 

Administration to achieve that, and I again give a lot of credit to 

our new Secretary of Agriculture in making sure that this happens. 

I am also worried about the talk about the possibility of tariffs 

on imported steel. If you just look at the countries that are being 

talked about, those are the same countries that we have all talked 

about in terms of agriculture trade. So we do have some challenges 

out there. 

Thank you all for coming. This will conclude our hearing today. 

To each of the witnesses, a special thanks for taking time to share 

your views on trade programs, specialty crops, and organics. I want 

to assure you your testimony provided today has been invaluable 

for the Committee to hear. 

For those in the audience who want to provide additional 

thoughts on the farm bill, we have set up an e-mail address on the 

Senate Agriculture Committee’s website to collect your input. 

Please go to ag.Senate.gov and click on the Farm Bill hearing box 

on the left-hand side of the screen. That link will be open for five 

business days following today’s hearings. Keep your tweets at a 

reasonable level. 

To my fellow members, we would ask that any additional questions you may have for the record be submitted to the Committee 

Clerk five business days from today, or by 5:00 p.m. next Thursday, 

July 20th. 

The Committee stands adjourned. Thank you very much. 

[Whereupon, at 11:17 a.m., the committee was adjourned.] 

(31) 

A P P E N D I X 

JULY 13, 2017 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 

(59) 

DOCUMENTS SUBMITTED FOR THE RECORD 

JULY 13, 2017 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
(101) 

QUESTIONS AND ANSWERS 

JULY 13, 2017 
102 
103 
104 
105 
106 
107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120 
121 
122 
123 
124 
125 
126 
127 
128 
129 
130 
131 
132 
133 
134 
135 
136 
137 
138 
139 
140 
141 
142 
143 
144 
145 
146 
147 
148 
149 
150 
151 
152 
153 
154