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IOWA AND NEBRASKA VIEWS ON

FEDERAL AGRICULTURE AND RURAL

POLICIES: THE 2007 FARM BILL

FIELD HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

APRIL 14, 2007

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry

(

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

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

TOM HARKIN, Iowa, Chairman 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

KEN SALAZAR, Colorado 

SHERROD BROWN, Ohio 

ROBERT P. CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

SAXBY CHAMBLISS, Georgia 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

LINDSEY GRAHAM, South Carolina 

NORM COLEMAN, Minnesota 

MICHEAL D. CRAPO, Idaho 

JOHN THUNE, South Dakota 

CHARLES E. GRASSLEY, Iowa

MARK HALVERSON, Majority Staff Director 

ROBERT E. STURM, Chief Clerk 

MARTHA SCOTT POINDEXTER, Minority Staff Director 

VERNIE HUBERT, Minority General Counsel 

(II) 

(III)

C O N T E N T S 

Page

FIELD HEARING(S):

Iowa and Nebraska Views on Federal Agriculture and Rural Policies: The 

2007 Farm Bill ..................................................................................................... 1

Saturday, April 14, 2007

STATEMENTS PRESENTED BY SENATORS 

Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee on 

Agriculture, Nutrition and Forestry ................................................................... 2

Nelson, Hon. E. Benjamin, a U.S. Senator from Nebraska .................................. 4

Panel I 

Bailey, Varel, American Farmland Trust, Anita, Iowa ........................................ 6

Houghtaling, Debra, Executive Director, Grow Iowa Foundation, Greenfield, 

Iowa ....................................................................................................................... 8

Killpack, Steve, Neola, Iowa ................................................................................... 10

Petersen, Chris, Clear Lake, Iowa, on behalf of the Iowa Farmers Union ......... 12

Schuitteman, Matt, Sioux Center, Iowa on behalf of the Iowa Farm Bureau 

Federation ............................................................................................................. 13

Panel II 

Crabtree, John, Center for Rural Affairs, Lyons, Nebraska ................................ 28

Sand, Duane, Iowa Natural Heritage Foundation, Des Moines, Iowa ................ 24

Schwarz, Tom, Bertrand, Nebraska ....................................................................... 26

Stroburg, Jeffrey, CEO and Chairman, Renewable Energy Group, Inc., Ralston, Iowa .............................................................................................................. 30

Wintersteen, Wendy, Dean, College of Agriculture, Director, Iowa Agriculture 

and Home Economics Experiment Station, Iowa State University, Ames 

Iowa ....................................................................................................................... 23

APPENDIX 

PREPARED STATEMENTS: 

Bailey, Varel ..................................................................................................... 44

Crabtree, John .................................................................................................. 49

Houghtaling, Debra .......................................................................................... 54

Killpack, Steve .................................................................................................. 58

Petersen, Chris ................................................................................................. 61

Sand, Duane ...................................................................................................... 65

Schuitteman, Matt ............................................................................................ 67

Schwarz, Tom .................................................................................................... 72

Stroburg, Jeffrey ............................................................................................... 75

Wintersteen, Wendy ......................................................................................... 79

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Nelson, Hon. Benjamin E.: 

‘‘Federal Crop Insurance—An Indispensable Program Executive Summary’’ .............................................................................................................. 84

American Wildlife Conservation Partners, prepared statement .......................... 90

Association of Fish and Wildlife Agencies, prepared statement .......................... 93

Page

IV

‘‘Iowa Department of Natural Resources 2007 Farm Bill Recommendations’’ ... 102

‘‘Background for Proposal to Simply CSP and Address Wildlife Resources 

Consistently Between States’’ ............................................................................. 109

(1)

IOWA AND NEBRASKA VIEWS ON 

FEDERAL AGRICULTURE AND RURAL 

POLICIES: THE 2007 FARM BILL 

Saturday, April 14, 2007

U.S. SENATE, 

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY, 

Council Bluffs, Iowa 

The Committee met, pursuant to notice, at 9:30 a.m., in the Art 

Center Auditorium, Iowa Western Community College, Hon. Tom 

Harkin, Chairman of the Committee, presiding. 

Present or submitting a statement: Senators Harkin and Nelson 

Chairman HARKIN. The Senate on Agriculture and Nutrition and 

Forestry Committee will come to order. And I just want to thank 

Mr. Dan Kinney, the president of Iowa Western Community College for having us here, and I will yield to him the floor. 

Mr. KINNEY. Welcome to our campus. Again, it is not the first 

time. We are proud to have you back here this morning. And we 

are pleased to have all of you here this morning, and we are 

pleased to hold this hearing in the art center. It has a lot of great 

capabilities for lighting and sound, and so it should really facilitate 

the hearing this morning. 

We are very proud of this building. This building was free. This 

building was built entirely by contributions from individuals, corporations and foundations. In fact, when you are out in the lobby, 

if you look at that stone wall, all of those names on the wall are 

donors that provided the funding to build this building. And certainly for an institution it is always a lot easier to acquire a building in that manner and certainly helpful to the institution. 

We are pleased to have you here on a great Saturday morning, 

and I am sure you will have a great hearing. And so thank you for 

coming. And, senator, thank you. 

Chairman HARKIN. Thank you very much for having us. I recognize a few people that are here in the audience, our mayor, Tom 

Hanifan. I did not say hi to Tom earlier. Our mayor, thank you 

very much, of Council Bluffs is here. Mel Housers is one of our 

Pottawattamie County supervisors, again, I did not get a chance to 

see anybody here. Mel is here. Sarah Brown of Senator Chuck 

Hagel’s office is here, Sarah Brown. And also Donna Barry in the 

Council Bluffs office of Senator Grassley is here. Any other elected 

officials that I missed? Anybody want to run for office that——

2

Thank you all for being here. We will get right into our hearing. 

I have a small opening statement, and I will yield to my friend and 

colleague, Senator Nelson, and then we will have our panels. 

STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM 

IOWA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman HARKIN. At the outset I just want to say to all of you 

that I have read every single one of the testimonies thoroughly. 

And I am going to ask that you kind of keep your comments to five 

or 7 minutes. Just highlight the points you want highlighted so we 

can get into a discussion on that. Your statements will be made a 

part of the record in their entirety. I am hopeful we can move this 

along well enough so that after our two panels, one of the things 

I always like to do before when I was chair and am chair again is 

to have an open mic session. So if any of you have things you want 

to say or questions you want to ask for the record, we will have 

an open mic after this so you can have your opportunity to do so 

within whatever time constraints we have coming up to the noon 

hour. 

With that, I just again say it is a real honor to be here to hold 

this field hearing of the Senate Committee. Again, I want to thank 

our good friend and neighbor and very valuable member of our 

committee, Senator Ben Nelson for being here with us today. 

Let me just say on this new Farm Bill—farm bills are broad, 

very broad because they encompass a lot of things. People think of 

a farm bill as only pertaining to farms. Obviously that is a big part 

of it. Now we are thinking about food, fiber, energy, rural development, conservation, trade, food assistance, nutrition programs. Covers—just covers the gamut of everything, and now with our new 

mission in agriculture, providing energy and renewable energy for 

America, this is a whole new era—new area for agriculture that 

started in the last farm bill in 2002. 

I would always like to say that our core mission is to promote 

profitability and income and economic opportunities in agriculture 

and rural communities. If we do not have profitability, if we do not 

have income, not much else matters very much. So we have to have 

that as sort of our core mission. But in doing that, we have to ask 

the question, is the best way to do this in the future to continue 

to do what we have done in the past, is that the best way or do 

we need to change? 

Agriculture is changing rapidly. 

Some of the testimonies that I have read of some of you emphasize how rapidly the face of agriculture is changing in America. 

That is why we have periodic farm bills, every 5 years, six or 

seven, usually five or 6–year farm bills. That is because agriculture 

changes, and we have to change our policies, programs and things 

to look ahead, not so much back, but to look ahead. 

Tom Schwarz who is on our panel, I do not know Mr. Schwarz, 

but he raised the issue in his testimony, I will hear from him, he 

wondered if it was time for a fundamental shift in farm programs. 

He asked the question, is it time not to have farm programs based 

on what you produce and how much you produce, but on how you 

produce it. Interesting concept. For example, take direct payments, 

3

direct payments have gotten a lot of notoriety of late based on base 

acres. Sometimes those base acres are not even being used to 

produce anything. They are to produce what was produced in the 

past, and yet the direct payments continue to go out. Is it wise to 

continue this policy of direct payments that you get a payment—

a government check no matter how much you make? No matter 

how much money you make, you still get a government check. Is 

that—can we still afford to do that, or should we take some, most 

or all of the $26 billion that we will be spending over the next 5 

years in direct payments and shift some, most, all, however much, 

to things like conservation or wild life habitat, rural development 

or incentives, incentives for farmers to start growing bioenergy 

crops and biomass crops and things like that for the future of biomass and energy production. So these are questions that we need 

to ask. 

We need to help younger, beginning farmers find and develop 

new marketing avenues, new income opportunities. We have twice 

as many farmers over the age of 60 as we have under the age of 

35. Well, something has got to happen here. With land prices and 

rentals what they are, it is pretty tough. So how do we provide 

these new economic opportunities for younger people? Maybe part 

of that is rural development, new economic growth and entrepreneurship and maybe off farm jobs to allow them to get started. So 

again, we need to start thinking ahead how we do that. 

And last, we need a sound safety net. We all recognize, all of us 

who are engaged in agriculture, I think even our urban cousins recognize that agriculture is not like any other business because the 

vagaries of wind, weather, pestilence and trade and all kinds of 

things, agriculture is just not like any other business. And there 

has always been, and there continues to be today, a strong national 

base of support for some form of a safety net for agriculture. It is 

the people want to have that safety net there, and it is strong. So 

we just have to think about how we do that safety net and how we 

fashion it. 

Last, I just want to say about conservation, again, tying into income base, but also think about conserving our water and our 

water resources in this country, cleaning up our streams and waterways, providing some benefits to the rest of society on how we—

on how we farm. Conservation Security Program and EQIP, I will 

be asking questions about how those operate, should they be combined for example. A green revolution, bio based crops, more and 

more are going to be asking our farmers to produce crops that can 

be used for bio based materials. Everything from hydraulic fluid to 

clothing as a matter of fact. Companies making socks out of cornstarch right now, different things like that. All these plastic bottles 

can be made now from biodegradable material now. So more and 

more we will be moving in that direction. 

Last, nutrition programs we cannot forget are the pride, I think, 

of America. And that is that we have provided our people with the 

most abundant, best, cheapest food anywhere in the world. We 

have school-based breakfast and lunch programs so no child should 

go hungry in America today. We have food stamp programs. I do 

not know what it is in Nebraska, but in Iowa every year the food 

stamp programs bring about $244 million a year into the State. So 

4

on the one hand, it helps make sure the people of low income get 

nutrition. On the other hand, it helps make sure our agribusiness 

entities also are able to get a part of that action. So the whole 

thing works together. We just got to keep focused on nutrition, how 

we provide better nutrition to our kids in school, how do we expand 

the food stamp program to get better nutrition to people who use 

food stamps, getting them into farmers markets, for example and 

beginning to buy fresh fruits and vegetables and meats and things 

like that that some of our farmers are using in our farmers markets. 

So again, we have tried some experiments in that, and they 

worked well. And we are going to be looking at perhaps expanding 

those kinds of things in the present farm bill. So that is just sort 

of an overview of all the different facets that we have to wrestle 

with in the next few months. And we need your input, we need 

your suggestions, your advice. That is why we are having these 

hearings. You are out here, you see what is happening, and we 

need the kind of input that you are giving us so we can try to do 

our best and fashion a Farm Bill that looks ahead five, 10 years 

down the pipe and makes whatever changes need to be done to do 

so. 

With that, I again will turn to my very good friend, and I mean 

that most sincerely, except that he is a better shot than I am. He 

gets better things than I do when we hunt together, but a great 

friend, a great Midwestern leader in rural and agriculture matters, 

former Governor of the State of Nebraska, and I am proud that he 

is a member of our senate agriculture committee, Senator Ben Nelson. 

STATEMENT OF HON. E. BENJAMIN NELSON, A U.S. SENATOR 

FROM NEBRASKA 

Senator NELSON. Thank you very much, Chairman Harkin. That 

introduction was the kind my father would have enjoyed, but my 

mother would believe. So I appreciate it a great deal. And thank 

you for holding this hearing here today so we can hear from Iowans 

and Nebraskans about their views about the Federal agricultural 

and rural policies that we will be meeting to understand as we 

craft the 2007 Farm Bill. 

Senator Harkin has heard me say this so many times, so many 

times he may be tired of hearing it, but I am going to say it one 

more time. I would like to rename the farm bill the Food and Fuel 

Security Act of 2007. 

What I am talking about is more than just a name change, it is 

one of those changes in thinking that you address. And that is that 

our agricultural economy is no longer just about food production, 

it is also about fuel security as well as we look at the opportunities 

that are there, particularly since the last farm bill was drafted. 

And most importantly, the title change reflects the need for policies 

that balance the two so that our efforts for one do not jeopardize 

our goals for the other. The livestock industry is more than slightly 

nervous about the use of—the amount of corn being used and potentially what it could be in terms of volume for biofuels. 

So I start with food security because it is long been the focus of 

our agriculture policy. We talk about it in terms of farm programs, 

5

but our goal has always been to be able to produce the food we 

need to eat because it is about being sure we are independent when 

it comes to our food needs. Being able to domestically produce the 

food Americans need is a vital national interest and it is a security 

interest as well, because if you love importing 65 percent of your 

oil, let me tell you, you will love importing 65 percent of your food. 

So that is why it is about being able to have food security and fuel 

security as well. And you mention other efforts, feed, fiber, that we 

need to keep in mind as well. And that is why we need to ensure 

that our food security is taken care of as we go into new areas. 

I agree with you on the need of a safety net. We need an effective 

safety net for our farmers and ranchers so that they can make a 

living from farming. So it is not just a good way of life, it is a way 

to earn a living as well. 

And conservation, we need smart and effective conservation policies, which I think you were so instrumental in creating in the last 

farm bill and working with others to see that it will be in this bill 

and we are going to have to continue to spend time on that. 

When it comes to natural disasters and drought, which are words 

that Midwestern farmers are all familiar with, not only do we need 

to protect and preserve the resources nature has provided, but we 

also need to make sure we help producers survive the problems 

and disasters that nature throws their way. 

In Nebraska this mostly means drought, Drought David, as I call 

it. I found if you give a drought a name, maybe it will have the 

same status as a hurricane. Because otherwise it is hard for people 

to focus on what a drought is. But unfortunately, the southwestern 

part of Nebraska and parts of the western part of the State as well, 

Drought David is celebrating an eighth birthday. That continued 

drought situation is not something the Federal Crop Insurance Program has been able to deal with effectively, and so we need to have 

some effective way of putting aside some money for the inevitable. 

It is not always going to be in Nebraska or Iowa, it can be in the 

southeastern part of our country as well. We are going to have 

drought. We are going to have these conditions. Actuarially you can 

determine what it should be. Even though we cannot necessarily 

predict where it will occur, we can predict what the needs are. 

When it comes to competition, the trend toward consolidation in 

agriculture today is unsettling, particularly in the livestock sector, 

and it raises concerns about competition and the impact on producers. Nebraskans in particular are very concerned because our 

corporate farming ban, I–300, has been ruled unconstitutional by 

the Supreme Court. And I support the Chairman’s efforts to include a competition title and want to work with him to get sound 

polices in there that will improve competition in a way that benefits everybody, producers, consumers and rural communities. 

Which leads me to the second component of the new farm bill, 

fuel security. There is a lot of interest these days, and this farm 

bill needs to include wise policies that continue to grow the industry so that we can substantially improve our energy security including: 

Diversification. Right now almost all of our ethanol comes from 

corn, which is great for corn growers in both Nebraska and Iowa, 

but it raises concerns for livestock producers as I mentioned, those 

6

that use corn to produce food products. In the long run diversification will include finding cellulosic ethanol produced from biomass, 

which every corner of the country can produce. But cellulosic is not 

here yet and may not be for a few years, so we need to encourage 

feedstock diversification now through crops like sorghum and sweet 

sorghums and others as well. 

The next generation of biofuels is upon us and we need to look 

at producing the next generation of biofuels from the ag perspective. In all the talk about cellulosic ethanol I am nervous that I do 

not hear anyone talking about how we produce the biomass we 

need for cellulosic. We need to figure out how to plant, grow, harvest, transport and store biomass, whether from field or forest 

wastes or dedicated energy crops. 

Finally, innovation. We also need to get creative about producing 

a wide range of biofuels. For example, I am working on a bill that 

will encourage the production of biogas, a natural gas substitute 

made from anaerobic digestion of animal wastes. I think there is 

great potential to turn wastes into energy sources, and we should 

creatively explore all of the possibilities. 

I want to mention rural development as well. There is great potential for rural development through biofuels, and we all know 

that food and feed production has long been a staple and a rural 

economic driver. We need to make sure we take advantage of the 

potential that biofuel production presents to many of our rural 

communities right now while ensuring that farmers, ranchers and 

rural businesses continue to benefit from our farm policies. 

I believe that our witnesses here today will provide great insight 

into the issues facing our producers and rural communities, and I 

hope we can incorporate their concerns and ideas as much as possible. 

So that is what we are here to discuss. And I am anxious to hear 

from our friends from Iowa and Nebraska. 

Once again, Chairman Harkin, I want to thank you for scheduling and chairing this hearing and for all your work on agriculture all the years you have been involved. 

Chairman HARKIN. Thank you very much, Senator Nelson. Now 

we will turn to our panels. And as I said if you keep—we have got 

a light system here. And then we will try to keep it within some 

limits here. But first I will just introduce Mr. Bailey, Varel Bailey, 

American Farmland Trust. Mr. Bailey and his son operate corn, 

soybean, grass, beef, cattle, hog and sheep operation in Anita, 

Iowa. He has been an agricultural policy consultant for American 

Farmland Trust. He has been involved in agricultural policymaking 

and Farm Bill debate since the 1970’s. I can vouch for that. This 

is my 32nd year on the ag committee. And since 1975 I have had 

the benefit of Varel’s input into all of our farm bills. So it is good 

to see you again, Varel. Please proceed, and I will just go on down 

the line. 

STATEMENT OF VAREL BAILEY, AMERICAN FARMLAND TRUST, 

ANITA, IOWA 

Mr. BAILEY. Senator Harkin, Senator Nelson, thank you for having me appear today. Let me just hit the high points. I actually appear today with four hats on. One is that of a farmer that you menVerDate 0ct 09 2002 11:47 Aug 24, 2007 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\DOCS\35049.TXT SAG2 PsN: SAG2
7

tioned. The second as an ag policy consultant for American Farmland Trust. The third is a policy work being involved in policy for 

almost 35 years. And fourth is a taxpayer. And from all of those 

points of view, when I look at the opportunities here, I maintain 

that this Farm Bill should create pivotal change. We only have this 

opportunity it seems once every 20, 25 years to actually make significant change in farm policy. And it seems to me the stars are 

lined up right now with the budget restrictions and the prices and 

everything else, it is time to make that change. 

Now I am only going to read a couple sentences out of my testimony, but there is a couple of them that I think are really important. In this dynamic environment, and I am talking about the 

changes you referred to, Senator Harkin, for Congress to set commodity loans, target prices in the Farm Bill really ignores reality. 

We have no idea what those prices are going to be in the next few 

years. Further, based on our experience to date on the suits filed 

against the U.S. cotton program, the corn program and others, government warehousing schemes, marketing loans, loan deficiency 

payments and cyclical payments are going to be eliminated. 

To perpetuate these programs under the guise of increasing bargaining leverage in the WTO instead holds these negotiations hostage and ignores the opportunities to significantly improve taxpayers’ investment in the food, fiber and fuel industry. 

To me those are really critical things and really strong drivers 

for change. The rest of my testimony has to do with conservation 

and the commodity title. 

I would put the conservation program part of the title first, not 

because it is necessarily more important, but I think that both of 

them need to be further integrated. Back in 1985, Senator, we 

started the integration with the CRP and conservation compliance 

and those kinds of things. It is time to take another look at how 

we integrate the conservation program with the rest of the Farm 

Bill. 

In my testimony I talk about how important this is on working 

lands because most of the lands that are sensitive to erosion and 

other degradation are actually working farm and ranch lands. We 

need to improve the effectiveness of these programs with cooperative efforts. 

We have something like this in Anita, Iowa. We have Lake Anita 

State Park, with pristine water. Why is it that way? Really it was 

not because we had a government program. We farmers banded together and decided we were going to protect that lake and protect 

that park. And so what we need to do is kind of take what we did 

there and integrate programs together with block grants and mechanisms where various agencies and various entities can work together to solve these conservation problems. 

We need to actually start a new program I think, and that is a 

loan guarantee program. This would be an interest rate buy down 

program. Three out of four farmers that have applied for conservation assistance in the last few years have been turned down because of insufficient money. In those cases we need to figure out 

a way for government to take a few dollars and leverage it into a 

lot of program. I think a loan guarantee program would go a long 

way to do this. 

8

The second change we need to do better targeting. Now, USDA 

in the CRP program has really worked on the environmental benefits index and those kinds of rating systems. We need to take another look at those mechanisms. Again, sharpen the money we are 

investing in conservation to solve really serious and critical problems. 

One of the things that really came out with the CSP program is 

that we need to improve technical assistance. NRCS is overworked. 

We really have not in the time that we have been working on this, 

been effective in fully implementing the technical service provided 

program. We need to take another look at that. 

The commodity program—I see my red light is on, and so I will 

just simply say we recommend as part of this, the hole in the safety net is that we need to move to a revenue assurance program. 

The one AFT is recommending was developed by Ohio State University. This is modeled right after crop insurance. It is transparent. Farmers understand it. It is easy. It would be easy to administer and implement. And it integrates with crop insurance as 

well. It does not pay twice if there is a loss. It just pays once. When 

I put on my taxpayer hat there is a savings since it provides an 

opportunity to lift systemic risk off the crop insurance industry. I 

do not know how many billion dollars would be saved, but we are 

thinking there is probably $2 billion or $3 billion there that could 

actually be brought into the Farm Bill budget by lifting that responsibility of systemic risk off crop insurance. 

With those things let me wrap up and simply say that we hear 

what you have mentioned about direct payments. My job as a—

working in Farmland Trust is to build coalitions between farm organizations and environmental organizations. When I start talking 

about direct payments and the environment, believe me, it is very 

sensitive. And so all I can say today is we would really like to continue to work with you and the committee on mechanisms that 

make sense in transitioning the direct payment mechanism into 

other mechanisms in the Farm Bill. Thank you. 

[The prepared statement of Mr. Bailey can be found on page 44 

in the appendix.] 

Chairman HARKIN. Thanks very much for a very precise and concise statement. Lot of things we will follow up in the question period. 

Next is Debra Houghtaling, executive director of the Grow Iowa 

Foundation. Grow Iowa was established by the Southwest Iowa Coalition, that covers about 185,000 rural people in Southwest Iowa. 

It operates a wide variety of loan approvals from various sources, 

including USDA. The Southwest Iowa Coalition is one of the first 

economic development groups that really started to work on a regional basis. My notes says it was started by Austin Turner; is that 

right? I knew Austin very well. Thank you very much. Debra, 

thanks for being here. And again, your statement is made part of 

the record, and, please, proceed. 

STATEMENT OF DEBRA HOUGHTALING, EXECUTIVE 

DIRECTOR, GROW IOWA FOUNDATION, GREENFIELD, IOWA 

Ms. HOUGHTALING. Thank you, Senator Harkin, Senator Nelson, 

for this opportunity to address ways in which the rural developVerDate 0ct 09 2002 11:47 Aug 24, 2007 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\35049.TXT SAG2 PsN: SAG2
9

ment portion of the farm bill can help create vibrant rural communities. 

As you said, I am the director of Grow Iowa Foundation, which over the past 11 years has invested over $5.4 million back into 

rural southwest Iowa. 

My comments today are going to focus really on three areas in 

which I believe will help create these vibrant rural communities. 

The first one is fostering regional collaboration, the second is promoting entrepreneurship, and then the last one is sparking private 

investment. 

Regarding fostering regional collaboration, as you mentioned, the 

Southwest Iowa Coalition really figured regional collaboration out 

before it was more of a buzz word, and that was out of necessity. 

Small isolated rural communities really individually do not have a 

lot of power and access to resources, but if they band together 

through an organization like Southwest Iowa Coalition a constituency of almost 200,000 has a much larger voice. 

I would like to talk about the proposed rural collaborative investment program for the new Farm Bill. I think it is an important 

step in fostering regional collaboration. A couple of the most important parts about that proposal is that it allows regions to define 

themselves, define the greatest needs that they have, and also help 

define their own solutions. It is not a cookie cutter, one-size-fits-all 

across the United States. I would like to recommend that—that it 

be—that the regional organizations be open and collaborative. I 

think that is one of the things that has allowed the Southwest Iowa 

Coalition to really succeed over the last 16 years is that everyone 

can have a voice. 

I think there is a danger in picking winners in a program like 

this that grant too much power to a single purpose entity. 

The second area I would like to talk about is promoting entrepreneurship. Rural people have always been entrepreneurial. But economic develop strategies have spent way too much focus on recruiting big industry and manufacturing into rural communities. And it 

is time to really focus on home-grown companies that have more 

of a commitment to the local community. 

The opportunities have never been better for rural entrepreneurship. Technological advances and e-commerce industry allows 

somebody who lives in Greenfield, Iowa to access global markets 

and employment opportunities that used to be only available to 

them in major urban markets. 

Because of the need for rural entrepreneurship, Grow Iowa has 

joined forces with the Southwest Iowa Coalition, the Wallace Foundation, Iowa State University Extension and Southwestern Community College to form the Rural Development Resource Center, 

which is going to provide entrepreneurial technical assistance and 

market avenues for people within a 22–county region in Southwest 

Iowa. 

Also speaking about entrepreneurship, it is important to talk 

about access to capital. Rural development has been a huge provider of access to capital through it is rural development programs. 

Grow Iowa has accessed over $2 million involving loan fund money 

through rural development. The area that is missing, however, is 

loans to very small businesses, which is why I would like to proVerDate 0ct 09 2002 11:47 Aug 24, 2007 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\35049.TXT SAG2 PsN: SAG2
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pose a micro-enterprise program. It focuses on small capital and it 

also has a component that allows for technical assistance and capacity building grants, which are critical to help small businesses 

succeed. 

The last area is sparking private investments. Government 

sources cannot be the only financial lifelines for rural communities, 

which is why we need to look at different ways of private investment. That could be rural philanthropy, equity venture capital, financial leverage. My two asks in the area are the first to really encourage through rural development programs the creation of community foundations and endowments that focus on entrepreneurial 

and economic development programs. My second ask is Grow Iowa 

is a certified community development financial institution. Across 

the United States they have an incredible record of leveraging $27 

for every dollar investment. So my ask is really to specifically add 

CDFIs as an eligible applicant for rural development programs. 

So I thank you for letting me talk about rural development. 

[The prepared statement of Ms. Houghtaling can be found on 

page 54 in the appendix.] 

Chairman HARKIN. Thank you very much, Debra. When you were 

talking about entrepreneurship and micro-enterprise, you are talking to this guy right here. So I am sure he will have more to say 

about that. He is our leader in that area. 

Next we will turn to Steve Killpack. Mr. Killpack farms 700 

acres of corn and soybeans with his father on their family farm 

near Neola, Iowa. Recent graduate of Western Iowa Community 

College. Thanks for being here. Please proceed. 

STATEMENT OF STEVE KILLPACK, NEOLA, IOWA 

Mr. KILLPACK. Thank you, Senator Harkin, Senator Nelson, for 

letting me speak today. Kind of as I go down here today I looked 

out across the landscape, and I kind of realized that our farming 

operations today, although they are economically viable, their sustainability is very limited. And kind of my hope and my goal is that 

through certain programs, such as the Conservation Security Program, that we will be able to protect our air, our soil and our 

water. I believe that farmers and ranchers who actively practice 

conservation should be supported to continue promoting conservation. And I think the CSP program was an important step in that 

direction to show that as a nation we care about our resources and 

that we want our farmers to care about them also. 

In my viewpoint it is always difficult to look and to see that as 

farmers we should be stewards of the land. And we have this great 

gift and this opportunity to farm and to make a living, but that we 

do not always strive to take care of our resources. The soil is really 

one of these resources that cannot be built up or, you know, it is 

been altered a lot over the last 100, 150 years that we have been 

farming. 

My hope is that through the CSP program we can divert funding 

to focus on sustainable farming practices to support clean air, clean 

water and profitable soil systems. 

I think that direct payments and counter cyclical payments as 

well as loan deficiency payments do not always promote the best 

conservation minded practices. Direct payments often support 

11

farming, you know, like you said in your opening, about as many 

base acres as possible. And I think that if we could divert some of 

that funding, all of that funding into the—a program similar to the 

CSP program that we could really promote the real idea of conservation and what that means. And I really truly believe that if 

you fund the CSP program and continue to support that that farmers are going to benefit from it. They are going to have added income, and the public is going to benefit from it from increased 

water quality, air quality and soil quality as well as increased wildlife habitat. 

One of the main problems I see with the CSP program right now 

is that there is very little information available to producers on 

what they need to do to be enrolled. And I would hope that the goal 

of the CSP program is that all producers potentially have the ability to enroll in that program. I do not feel right now at this time 

that there is enough education and enough information put forth 

into developing that programming. 

So that is kind of one of my hopes is that through the CSP program, the support of our government, we will be able to secure a 

future for many more generations of farmers. 

And I would also like to stress the importance of maintaining 

wildlife habitat, promoting habitat restoration programs. The CRP 

program has always been a beneficial one to the habitat. I do not 

always feel the way the CRP has been implemented it was more 

soil conservation as compared to habitat preservation. Not all of 

those systems are sustainable ecosystems. They are just there to 

fill the need of soil conservation. 

And my last point that I would like to make is that as a small 

family farm I look to see that we are going to have to change our 

operation drastically to maintain our economic viability. And I believe that is fine, that business is changed, and we are a business. 

And I would hope that in the new Farm Bill there potentially 

would be some support for small business niche agricultural markets, specialty crops, and not through direct subsidy payments, but 

through market assistance programs in developing local markets in 

the area. And I think there is opportunity to continue growing with 

organic and locally grown food type industries. And I feel that we 

should continue to improve our economy by supporting these 

changes. 

I think there is a lot of opportunity to make a difference right 

now. We do not have a—we do not always have the opportunity to 

make changes, but I think with this Farm Bill we can potentially 

make a big impact on the future of farmers. So thank you. 

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

58 in the appendix.] 

Chairman HARKIN. Thank you very much. I really appreciate 

your testimony, and we will have more questions for you I am sure. 

Next we will go to Chris Peterson, president of Iowa Farmers 

Union and a family farm operation from Clear Lake, Iowa. 

12

STATEMENT OF CHRIS PETERSEN, CLEAR LAKE, IOWA, ON 

BEHALF OF THE IOWA FARMERS UNION 

Mr. PETERSEN. Thank you, Senator Harkin and Senator Nelson. 

I hope I measure up to what the other participants have said so 

far. Lot of good testimony. 

I am a small independent family farmer and I am a firm believer 

in the independent localized family farm structure. I believe hands 

down we can raise a better, safer, higher quality product than anybody else in this country. And I think farm bills should be centered 

around that. 

And somebody mentioned I–300, I think it was you, Senator, and 

you know, the packer ban was struck down in Iowa, I–300, struck 

down in South Dakota. I think there is lots of bad things going on 

in agriculture and there is a bunch of things we need to do if we 

are serious about revitalizing rural America. One of the top things 

on my list is a full competition title. It is time, we need this. Farmers are being compromised, transparency in the market place. 

I was one of the guys that paid the price and lost hogs 3 years 

ago, 3,000 head failed to finish. I suffered severe financial consequences out of that deal. And there is a few thousand—a lot of 

thousands of our independent pork producers went through the 

same thing. And also because of that and the monopoly, even the 

contract growers now are, you know, their contracts are not the 

best in the world due to lack of oversight and reform. They have 

been marginalized. The guy wants to contract to rise livestock, fine, 

but I believe they should get a decent price and return for their 

labor. And mandatory price reporting is another very interesting 

thing that needs to be redone. 

Also I would hope that anti-trust and USDA and them start enforcing anti-trust laws and packer and stockyard laws. They are 

not working, revamp them and address the 21st century standards. 

Again, anti-trust and competition titles is one of my main things. 

We need to revitalize capitalism out here. It is not being done. 

And conservation, setting here looking at this water quality. 

Clean water is an amazing thing. We need a lot more of it on the 

countryside. And how you do that, number of ways. I believe the 

commodity title and the conservation title need to be tied together. 

Farmers are good stewards, stewards of the land. They needs 

credits and incentives to participate in conservation programs. I believe it is critical that conservation and tillage practices need to be 

tied into what commodity payments come out here. 

And moving right into the commodity program, I am a firm believer in price payments and price caps. It is about time that the 

taxpayers were—the issues of taxpayers were addressed. 

Also in the commodity title I look at three entity loopholes in the 

generic certificates. I look at that as a farmer as legitimate bank 

robbery. These loopholes need to be closed, and these certificates 

need to be done away with. 

Also we need a Farm Bill that will put a floor on the grain. It 

seemed like over the years the processors and the industrial livestock factories are getting lots of cheap grain. They were saying—

a Tufts University paper just released entitled ‘‘Industrial Livestock Factory Gains from Low Cost Feed Prices 1997 to 2005,’’ documents how commercialized hog operations have saved $8.5 billion 

13

in feed costs. The boiler industry saved $11.25 billion. Smithfield 

alone saved $2.6 billion in feed costs over this period of time. 

We need common sense in these farms bills. We need to quit—

and the intent is well, keeping the family farmers on the land, but 

we need to quit subsidizing agribusiness to the extreme of this example. And a lot of—with Smithfield and the other integrators, 

what this does is give them an edge to compete against the independent family farmers raising livestock or cattle or whatever. 

Energy, very important. And I emphasize throughout this Farm 

Bill, we got to get back to localized ownership in the energy and 

all that. 

Also rural economic development, we need—we need rural economic development out here that—which is managed localized 

foods, getting small businesses revitalized. This is all very, very important to the survival of family farms in rural America and the 

return of the benefit to the consumers and the taxpayers of this 

country. Thank you. 

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

61 in the appendix.] 

Chairman HARKIN. Thank you, Mr. Petersen. 

Next we will turn to Matt Schuitteman. I think I pronounced 

that right. Fifth generation farmer from Sioux Center, Iowa where 

he grows corn, soybeans and hogs with his father and grandfather. 

Mr. Schuitteman will provide some thoughts on the Farm Bill from 

the perspective of the Iowa Farm Bureau Federation; is that correct? 

Mr. SCHUITTEMAN. That is correct. 

Chairman HARKIN. Thank you very much, Mr. Schuitteman. 

STATEMENT OF MATT SCHUITTEMAN, SIOUX CENTER, IOWA 

ON BEHALF OF THE IOWA FARM BUREAU FEDERATION 

Mr. SCHUITTEMAN. Thank you, Senator Harkin and Senator Nelson, it is an honor to be here. And I am from Sioux County, Iowa. 

And as my grandpa is 81 years old we are living through the 

issue of farm succession and turning over a fairly large family business. So this discussion has always been pretty helpful for me during this time. There has been several good points made. 

I do want to touch a little bit to start with on safety net. I would 

say regardless of what you think about where the direct payments 

and the counter-cyclicals and the loan program fit in, they have 

done a good job at least in our situation of smoothing out our ebbs 

and flows of our farm income. 

What I would also say from the standpoint of a young farmer is 

for the young farmer, access to capital is, aside from access to land, 

is probably our biggest issue. What this program has done is provided a nice source of capital at the beginning of the year and cashflow for the young farmer so he can go out and build a viable operation. Because of that I would ask that the majority of 2002 commodity title be preserved and that those concepts be maintained 

that were set forth by that 2002 bill. 

There is also been quite a bit of discussion here about conservation programs. And Senator Harkin, you introduced the CSP program in 2002, and that was a program that those of us in Iowa 

were looking forward to utilizing. Unfortunately the funding, exVerDate 0ct 09 2002 11:47 Aug 24, 2007 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 C:\DOCS\35049.TXT SAG2 PsN: SAG2
14

cuse me, the funding fell a little short of what we were hoping for. 

I think it was Mr. Bailey that mentioned that demand for those 

conservation programs has exceeded the supply of funds every 

year. And so we would like for efficiencies to be obtained in those 

programs so that more people could have access to those dollars. 

I think a good example of that type of efficiency could be regarding CRP. We have seen in general that farm CRP signup, in particular in southern Iowa, has been damaging to rural economy. I 

think the debate here is not necessarily about the ability to grow 

row crops on those acres as much as it is the ability to generate 

economic activity from those acres. Whether that economic activity 

be a cow/calf grazing operation or whether it be a cellulosic ethanol 

from switch grass production, I think there is a tremendous 

amount of opportunity there, and it does not necessarily have to 

come from row crops. 

What we could really—we have seen how livestock dollars can 

turn over several times in a community. But receiving a government check does not necessarily turn over that much in the community. So it could have a major impact on our rural economics. 

Our farmers need those opportunities. Anytime we can increase 

the lands available for our young farmer, young farmers will position themselves to take over that opportunity. In particular we are 

talking about a cow/calf operation, very much a position for a 

young farmer to get a start. And by diverting some of those CRP 

dollars, maybe even taking some of the CRP dollars and diverting 

them toward say a buffer strip program, I have got some figures 

here that says if we took one-half of the funding from current general CRP signup we could install 33–foot buffer strips of Iowa’s 

creeks and streams. I think that would be a major environmental 

impact, and I think it would be a good thing. 

I talked a little bit about the energy title. Obviously ethanol, especially corn-based ethanol, has had a big impact. I myself am an 

investor in a local plant and have reaped the benefits of that investment and have appreciated the opportunity that it provided. 

Biofuels have had a major impact. And Senator Nelson, I was 

happy to hear your thoughts on biogas. Sioux County is the proposed home of a biogas facility. So we are looking forward to see 

if that can come along and look forward to your thoughts on that 

as well. 

The energy efficiency grant programs have been utilized well. I 

know of several farmers in Iowa who have gotten those grants to 

update vent systems, dryer systems and have saved significant energy while doing them. 

One thing I would ask with this Farm Bill is that any issues regarding animal husbandry be left out of this Farm Bill. I do not 

feel like it is an appropriate avenue to address those issues. Farmers are the best judge of a healthy happy animal and we would like 

those decisions to stay with the farmer. 

With that, I see the yellow light is on. I want to thank you again 

for the opportunity. I was thinking on the way down, the good book 

says to whom much has been given, much will be expected. I think 

in this part of the country we have been given much as far as natural resources. And I would hope that government can be a partner 

15

in helping us fulfill our potential and not a restrictor. So I thank 

you and look forward to your questions. 

[The prepared statement of Mr. Schuitteman can be found on 

page 67 in the appendix.] 

Chairman HARKIN. Thank you very, very much. We will start a 

round of questioning. I will try to just limit myself to 5 minutes 

or so, something like that. 

Mr. Schuitteman, I will start with you since you were last and 

work back. In your testimony, I read your testimony last evening, 

about—talked about taking funds from commodities. Heard you 

mention that now about weakening the safety net. 

I really think we need to follow-up on this because I think it is 

kind of fundamental to our Farm Bill discussion and how we do 

this. Is there maybe—again, because of WTO, we are going to have 

to reduce our counter-cyclical program. We know that. So maybe a 

smaller counter-cyclical program, but in conjunction with crop insurance and conservation payments and rural development initiatives and energy incentives for growing cellulosic crops that you 

mentioned, maybe if you put all of those in a package it could be 

a part of an overall safety net for farmers. In other words, shifting 

it out of just—out of the direct payment and the counter-cyclical, 

which is what we have now, but broadening it out and putting that 

in this kind of package of things that would be—would provide a 

safety net. 

So I guess my question is, if we were able, I want to make it very 

clear because I think some people misunderstood some of the 

things we said in the past, I am not saying that we are going to 

take $26 billion out of direct payments and give it to the Department of Justice or Commerce or something like that. I am just saying we are going to leave that in agriculture, but is there a better 

way of allocating that money. So if we were able to shift funds 

away from things like direct payments and into these other areas 

like counter-cyclical supports, which we have enough room for 

under WTO, conservation payments, again with all the things I 

have heard here, got to have better technical assistance. 

Mr. Bailey came with this new concept that I had not thought 

about before, some kind of loan guarantee-type programs, may leverage more than what he have. Again, renewable energy incentive 

payments to farmers to be growing cellulosic crops on some of this 

CRP ground that contracts are going to come up anyway. Again, 

would that be a more balanced kind of a farm policy, again, putting 

that money out there in that way? Just asking for your thoughts 

on that. 

Mr. SCHUITTEMAN. I think like you said there is a variety of 

ways to go about this. And a couple points I would bring up, I 

talked about the capital needs of the young farmer and how this 

Farm Bill, you know, was able to provide some cash up front. Your 

thoughts on the safety net are good. For instance, on our farm in 

1998 it cost us about $280 an acre to grow a crop of corn. This year 

it is going to cost us about $454. 

Chairman HARKIN. Energy price increases and stuff. 

Mr. SCHUITTEMAN. Anything tied to energy and land are the two 

drivers and some other technology costs, so you know, our safety 

net of the 2002 bill has kind of fallen behind a little bit. There are 

16

ways to make that up, like you say, in crop insurance. But it is 

good to hear you say that we are not going to weaken that. Just 

so we do not weaken that safety net. And you know, from the 

young farmer perspective, as long as they have access to capital. 

Chairman HARKIN. I am just asking questions, is there a better 

way of doing it than what we have done in the past? I do not know. 

For example, Mr. Killpack here mentioned in his testimony, he did 

not quite say it, but I read it in your testimony, in that direct payments get allocated to land prices and get allocated to the land so 

rental rates reflect that so a young farmer wanting to rent that 

land pays higher rental rates, if that is put into other things, it 

might east the ever-increasing rental rates that young people have 

to pay to get a foothold. I do not know if you had any thoughts on 

that, Mr. Killpack, or not. You mentioned that in your testimony. 

Mr. KILLPACK. I think that at least from my perspective that the 

direct payment typically is a guarantee that you can put that much 

toward a rental rate of land. And I kind of felt that if you could 

divert some of those funds into a program that would be more of 

an incentive based, you are going to guarantee some type of income 

for doing or promoting your stewardship of the land that would 

benefit both the farmer and the public in terms of, you know, improving conservation, water quality, things like that. And I just 

think that the funds can just be channeled in different ways. Not 

to eliminate any of that funding, but to channel it down a different 

route to promote conservation as well as the farmers’ viability 

through that. 

Chairman HARKIN. Mr. Bailey, did you have something you 

wanted to—any of you just jump in, just raise your hand. 

Mr. BAILEY. My comment is this, and obviously you know I 

worked with wheat growers, barley growers, sorghum growers like 

that. And part of the sensitivity of messing around with the direct 

payments, and I will kind of represent Senator Nelson’s Western 

Nebraska wheat guys, with declining yields and droughts and everything, the direct payment is the only thing that these guys have 

seen. And so if you start out by saying we are going to start changing direct payments, I need to tell you the red flags go up all over 

the place in wheat country, parts of cotton country and those areas. 

So you are on the right track, Senator, that the direct payment 

thing long term is not politically sustainable. 

Ken Cook and the environmental working group and all these 

people are building a case that long term we are going to lose direct payments one way or the other, OK. So what needs to be done 

now is that a package you are talking about needs to be developed 

so that the wheat guys that are getting nailed all the time because 

of the environment and everything do not lose everything. The 

package is rebuilt in a way that plugs the hole in the safety net 

and the package basically becomes a better investment by the taxpayers and America. 

I cannot—I cannot lay out the package right now other than to 

assure you we are working on it. But if you lead off too early by 

saying we are going to mess around with direct payments, the lobbyists on K Street just come unglued that represent agricultural interest. So we need to really concentrate on that package. 

17

Chairman HARKIN. They have been hearing me say that for some 

time. So I know where—get a little unglued and stuff, but I still 

submit whatever benefits, and there have been benefits to direct 

payments in the past. I have no doubt about that. I look back, so 

I have seen it. But with what we are seeing now, what is happening now, something—we have got to change some of this stuff. 

With that—I thought I used up my time, but my green light does 

not seem to go off or something like that. 

I just wanted to say, Mr. Petersen, we will have a competition 

title again. As you know I put one in the last farm bill when I was 

chairman and it did not succeed. I think there is more support for 

it now. I think there is broader support for that. And we will have 

something in there akin to a bill that is got strong bipartisan support now, and that, of course, we will have to work on, but it is 

there. 

Debra Houghtaling, the one question I have about it is what—

just tell me what made it possible for the Southwest Iowa Coalition 

and the Grow Iowa Foundation to work to get a large number of 

communities together? This is—that is touchy work when you do 

that, you know, to get different communities, they all have their 

wants and things. How did you put them all together? 

Ms. HOUGHTALING. Well, the most important is self-interest, is 

that they understand that a community of 2,000 cannot accomplish 

nearly as much as bringing together a larger group. There is multiple examples, enterprise, zone legislation, a State prison in 

Clarinda where it might have only affected one of the communities, 

or might have only affected half of the communities within Southwest Iowa, but the larger group of counties and communities all 

supported, you know, the different—doing lobbying and what have 

you for different ideas that benefited someone else. And that is a 

completely—that kind of turns the normal economic paradigm on 

its head. Where you are six miles away and I am going to compete 

with you for absolutely everything, where you are 100 miles away 

from something bigger, let’s work together so we can access more 

for not just me but all of us. 

Chairman HARKIN. Thank you very much. And now my light is 

on. I will turn to my colleague, Senator Nelson. 

Senator NELSON. Thank you, Mr. Chairman, I hope I do not get 

a fast count. 

Ms. Houghtaling, it is Houghtaling where I am from in Nebraska, you made reference to the importance of rural entrepreneurship programs, and the program we have had in Nebraska has 

been very successful. I will just give a few of the numbers to provide a base. We began by providing micro-enterprise developments 

and were able to lend almost $7 million to provide training and 

technical assistance to 15,000 businesses. And this is over a 10–

year period. And in 2006, the last year that we have got, each dollar of State funding for this program leveraged over 12 from other 

sources, and it helped us create or save 7,500 jobs at a cost of 

$43.30 per job, which in terms of investment is a pretty small number comparatively speaking. 

You mentioned that the kind of assistance that you are looking 

for would come from two sources, one is from private sources, foundations and private groups, and the other from the government. Do 

18

you have any idea of what it might take in terms of dollars over, 

let’s say, a 5–year period of the Farm Bill to be able to have this 

kind of program be viable throughout the rural parts of our country? We think about it in terms of Nebraska and Iowa with the 

particular bills here, but if we are going to do it on a nationwide 

basis, do you have any thoughts about what it might take? 

Ms. HOUGHTALING. You know, any number I would throw out 

would just be a wild guess. I mean, I think the thing that is interesting is that Nebraska is one of the very few rural places that has 

really been able to do micro-enterprise well. I am on an Iowa statewide group that is looking at the Nebraska model and trying to figure out what can we import into Iowa to make that successful. I 

would probably start to—to get that number I would probably start 

to take a look at the money that is gone into Nebraska and aggregate from there, you know, because there is a lot of more populated 

rural states certainly than Nebraska or Iowa. But I think that 

needs to be a starting block to take a look at where it is been successful, and there are not a lot of places where it is been as successful as Nebraska. 

Senator NELSON. Mr. Chairman, since we are in a business 

where virtue cannot be its only reward, I have to point out that 

that was a program we put in place while I was Governor. I do not 

want to take full credit, I just want the record to reflect that happened. So I think the point is well made. 

If you can take a best practice approach and try to model that 

which is what we have done in our bill, then other States could 

begin to look at what they could do and try to replicate it as best 

they can or take the best pieces of it for their State and then expand it, because obviously, you are right, when you said earlier 

that one size does not fit all. And we have to be able to have a pattern, but to become creative as well. 

Mr. Killpack, you mentioned in your testimony that you think 

that CSP should be the focus—a focus of the farm bill. And, of 

course, we are facing some pretty tight budgetary issues. If you 

were going to make CSP a greater focus, maybe you could help me 

understand what you would—if it is going to be the major focus 

and we have a limited amount of money, can you be specific as to 

the kind of programs it might crowd out? You do not have to make 

winners and losers here. I just wonder what you think what program is less effective than CSP if we are going to make that a bigger focus. 

Mr. KILLPACK. Well, in terms of making farmers profitable I do 

not really know if you could cut out one program. But in terms of 

maintaining our natural resources, I think that should be the top 

priority, and funds can be allocated from, you know, direct payment, loan deficiency payments, counter-cyclical payments into the 

CSP program to make it a viable program. Because I think that—

when that came out I was really excited. The potential that was 

there to kind of allow the producers to be conservation minded because it is hard to—you know, me as a young farmer do you allocate this land to conservation practice, or do you farm it? And in 

my viewpoint I always think in terms of the spoiler first. That is 

just my belief. I would rather have the soil be here for the next 

19

generation for my kids to be able to farm, and I think that is where 

our focus needs to be. 

Where the funds come from I, you know, I have a few ideas, but 

I hope that that is something that you can figure out and know 

that the priority needs to be at sustaining our natural resources, 

because once they are gone, it does not really matter if we have got 

any other commodity programs or anything like that. I mean, 

hands down that is the one thing that should have priority is maintaining our natural resources. 

Senator NELSON. I certainly agree with you, Mr. Schuitteman. 

Do you have any further thoughts about what is less valuable as 

part of it, what is most valuable, more valuable, sort of a 

prioritization because that is what we are going to be faced with. 

Mr. SCHUITTEMAN. I would say generally CRP signup would be 

something to look at, and more targeted CRP rather than the 

whole farm. Just to give you an example, as Mr. Killpack was talking about how we might use some of those funds. On our farm we 

have begun using strip tillage for our row crops. It is a system that 

is more efficient in fertilizer use, and it is a system that is great 

for the soil. The equipment is specialized and can be expensive. So 

any funding we could get through a CSP or EQIP would help us 

get over the hump. And I think there is probably dollars better 

spent there versus some of our general CRP signups. 

Senator NELSON. The CRP program was the forerunner of where 

we may be heading and now we are more targeted in a more effective use of CRP, which means there may be fewer acres ultimately 

in CRP or more, but just make sure at the point of deciding if this 

will qualify that if there is a better higher use for switch grass or 

for other such strips as you are saying so that we do not—we do 

not put all of our resources into one program, it may be—give us 

the best return; is that fair to say? 

Mr. SCHUITTEMAN. When you look at conservation it is not just 

a terrace or buffer strip. You got to look at it as a production system. And any way we can produce our production systems is going 

to have a bigger impact than, like you said, the forerunners that 

we have had in place to date. 

Senator NELSON. Going to have to be careful because all CRP 

levels are going to be mad at me for even suggesting something 

like that. We are really not talking about necessarily shrinking it. 

What we are talking about is making sure we got the best use. And 

I would imagine those in production agriculture are interested in 

a better use as well, particularly if they can get a rate of return 

for switch grass or for other purposes. Perhaps they have not even 

thought of the aspect of grazing, I do not know. 

Mr. BAILEY. I think we need to approach the CSP issue from 

both sides. One side is maybe we ought to take a look at restructuring CSP and cutting it maybe into two pieces. CSP when it was 

outlined was to reward good stewardship at one level and also provide an incentive on the other level. When you write the regulations, write the rules, administer it and apply it out, it is difficult 

to put a program together that does both. So one way to think 

about that would be to take the CSP and split it into a stewardship 

program. Really talking about a green payments program here that 

is pretty universally available to everyone in production agriVerDate 0ct 09 2002 11:47 Aug 24, 2007 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 C:\DOCS\35049.TXT SAG2 PsN: SAG2
20

culture. The other piece, this is my word, so do not give it to anyone else, but the other one is to build a super EQIP where it is an 

application—program application thing where you can let multiple 

producers come in and everything, but take EQIP and retarget it 

and really apply money back effectively that way. 

Now the other side of the question, where are you going to get 

the money to do this. It is really kind of only three pots of money 

that I can see right now. Reduce payments might pick you up half 

a million dollars, whatever. The second one has to do with—by 

going to a revenue assurance there is probably $2 billion to $3 billion that can be pulled in from the crop insurance subsidy and no 

loss to the safety net when the thing is integrated properly. 

The other one is the one Senator Harkin is talking about is direct payments. Is there a way to make the sale to make the program such that people understand that any money coming out of 

direct payments going into the land stewardship program is a good 

deal for producers and a good deal for taxpayers? That is the part 

of the crafting that I think is going to be difficult, but those to me 

are kind of the three opportunities we have got. 

Chairman HARKIN. Thank you, Mr. Bailey. If I might just pick 

up on that, Varel. I think you may have a good suggestion there. 

And that is to somehow take—we have got to change CSP because—we have not had the funding and, of course, they took the 

money out for disaster payments. I just want to assure all of you 

that is not going to happen again. 

In 2003 the first time ever in the history of our agricultural legislation, first time ever, we took money out of agriculture to pay for 

disaster, never happened before. Well, I raised a fit about it, and 

then in early 2004 I got the money put back. Then in late 2004 

they took it back out again. So lost two, won one. We are still one 

behind. But I think we just got to have a understanding of those 

in Congress and in the White House, no matter who it is, that a 

disaster is a disaster. It is paid for by everyone. We did not go to 

the people in New Orleans who suffered from Katrina, and said, 

OK, we are going to put billions of dollars in it, but we are taking 

out of it your highway money, we are going to take it out of your 

education money and your foods stamps and all that. We do not say 

those kind of things, or when a tornado hits and wrecks a town, 

we do not say, now we are going to take it out of this. No, we treat 

disasters as such, and we provide for that out of general revenue. 

I think it was a terrible mistake to do in 2003 and 2004 and it 

has really put us somewhat behind. Whether we can get that 

money back or not, I do not know. I am still trying, $2.8 billion. 

$2.8 billion stretched out is a good sum of money. Anyway, that is 

just one thing. 

I am just saying that the CSP has been damaged, and then they 

put in all this—I will say this, Secretary Johanns ran around the 

country having these hearings all last year and came back, and we 

met with him on numerous occasions, and one of the things we 

heard all over the country, whether it is Idaho, Montana or Nebraska or Iowa or Missouri, he heard about CSP. Farmers got it. 

They understood it. As he said to me, he said they were both happy 

and mad. They liked the concept of the program and mad it is not 

working. 

21

So we are trying to—we are going to get off that watershed program. That watershed basis was never, ever intended in our legislation. We are going to make it a national program. In his proposal 

Secretary Johanns has asked for about five times more money than 

what we have been spending on it. So I think generally now we are 

going to make this thing work better. 

Now what you have proposed, Mr. Bailey, is something that I 

think deserves further elaboration and looking at. And that is to, 

as you say, two kinds of things, green payment, a super EQIP, 

maybe folding EQIP into this, making it sort of a seamless kind of 

a program where you could come for your one time thing on EQIP, 

which would be a waterway or whatever it might be, and then 

while you are there doing that you could just be forwarded right 

into an analyzed CSP-type payment. So I think that merits a lot 

of consideration. 

But the second thing is then, getting back to the CRP thing. 

Again, I am going to ask you to comment on what I am about to 

say. Seems that CRP, you have got like three general pots. On one 

side you have got the gullies and the ravines and the really bad 

places that are CRP that should not be farmed, and we can bid 

those back in. 

Senator NELSON. Highly erodible. 

Chairman HARKIN. Highly erodible, and not productive at all 

really. So you could probably get those back in. Then on the other 

end of the spectrum some of the land that is as about as flat as 

this table, and that land is going to come out. As you know, some 

farmers wanted to get out early and Secretary Johanns recently 

announced he was not going to permit that because of the additional corn acreage coming in. But that land is going to come out. 

I mean, when the contracts are up there is no way we have enough 

money to bid that back in. So that—in between that, in between 

that you got the land that is erodible, it is hilly, it can be row 

cropped, it is not very productive, but if you have got $3.50, $4 corn 

you do not have to be really very productive to make money on 

that. But it is very erodible. 

So what do you do with those contracts when they come up in 

the next three, four, 5 years? Well, perhaps here is where we blend 

this kind of thing. Maybe you can say to a farmer, OK, you are 

coming out, I know because of crop prices you are thinking about 

taking it out of CRP and farming it. But what if we were to give 

you a 10–year contract and we reduce your CRP payment down a 

third of what it was, but then we will give you a CSP payment and 

EQIP, fold you into EQIP and CSP, and then you can grow certain 

specified crops that are conserving in nature, like switch grass, alfalfa for hay, or even do grazing or something like that in which 

you could get an economic benefit. You can go ahead and market 

this as long as do you it in a conserving manner, and that is what 

the CSP payment is for. Make sure you do conserve soil and water 

and you have wildlife habitat. Then it might induce them to come 

in because, you know, crop prices are variable. But if you can see 

ahead 10 years, I got the CRP, I get CSP, I get the EQIP payment, 

and I can grow something that I can market, that might then keep 

that CRP land in some kind of conservation use, but still an economic benefit so we are not hurting rural communities by just 

22

keeping it out of production. Any comments on that kind of thing? 

Chris? 

Mr. PETERSEN. Yeah, I think that idea would be very worth pursuing because we want to grow energy crops or a small independent family with some farmer with some cattle or a little bit of 

hay ground, whatever. I see lots of opportunities there. 

Chairman HARKIN. We know we can doing rotational grazing 

without destroying the land. We know that. Anything else, observations on that at all? 

Mr. BAILEY. Just a comment, Senator. I have been working with 

Congressman Cane over the last couple of years talking about CRP, 

like kind of a mechanism something like you are talking about 

here. I think the key point of all of these things is the details, and 

farmers are quick. You ticked off on your fingers the different 

things we are going to do. 

And a farmer in a matter of minutes will figure out which is the 

best option for him. So the key here is that as you make up the 

smorgasbord that, again it makes sense environmentally, it makes 

sense economically for the producer and makes sense for the taxpayers. So, yeah, I think we are on the right track here. Increased 

flexibility, and in a lot of ways empowers the producer to come to 

the agency and say, these are the things I want to do, and I have 

already done an environmental index on it, because I have got it 

on my PC or whatever, so this is the way it lays out. And at that 

point then it is kind of almost a bidding process the producer applies on that land rather than just going to the agency and the 

agency goes down through the checklist and says, well, this is now 

its source, you know. So I think you are on right track. 

Chairman HARKIN. If you have got any more thoughts, suggestions on this super EQIP, I would sure like to know them. I think 

that I would like to explore this some more. I do not know enough 

about it, but I would like to explore it some more. 

Senator NELSON. I think my questions are pretty well answered. 

Chairman HARKIN. I want to thank you all very much and we 

will have our second panel come up. We will take a short 5–minute 

break here before we have our second panel, and I also wanted to 

introduce Eric Steiner. I did not mention Eric. 

[Recess.] 

Chairman HARKIN. The meeting will resume its sitting and now 

we have our second panel. 

The same pertains here, that your statements will be made a 

part of the record in their entirety. I can assure you I read every 

one of them yesterday, last evening and this morning, and will be 

made a part of the record in their entirety, and ask if you just sum 

it up in five, 7 minutes, something like that so we can get into a 

discussion with you. 

First we want to welcome Dr. Wendy Wintersteen, the Dean of 

the College of Agriculture at my alma mater, Iowa State. Also 

serves as a director of Iowa Agriculture and Home Economics Experiment Station at Iowa State. An entomologist by training, and 

as a faculty member her research interest focuses on the development assessment of pest management strategies, and a great job 

of leading the best ag school anywhere in the nation. Dr. 

Wintersteen, welcome. Please proceed. 

23

STATEMENT OF WENDY WINTERSTEEN, DEAN, COLLEGE OF 

AGRICULTURE, DIRECTOR, IOWA AGRICULTURE AND HOME 

ECONOMICS EXPERIMENT STATION, IOWA STATE UNIVERSITY, AMES IOWA 

Ms. WINTERSTEEN. Thank you so much. I really appreciate those 

remarks, especially given that we are so close to Nebraska. We 

have a great partnership with all of the land grant universities in 

the Nation and it really is that partnership that has allowed agricultural research and extension to serve the Nation and all the 

needs that agriculture provides. 

Recently one of our distinguished professors, Dr. Wally Huffman, 

did a study with some of his colleagues at Yale University, not a 

land grant university, but nonetheless, a good university. I think 

back over the last 30 years the rate of return to agricultural research investment was a 50 percent annual return. I promise you 

there has been nothing else that has returned that kind of investment, except maybe the investment in some of our biofuel plants 

this past year. 

So I am here today to speak, to strongly urge Congress to increase its investment in research to support agriculture and to increase support for extension programs that go hand-in-hand with 

those research programs. 

The USDA is the primary spending agency for agricultural re- search. It spends about $2.6 billion a year in research and its extension. Unfortunately over the last 30 years that investment has 

been flat. At the same time the National Institute of Health has 

received a 882 percent increase in funding. And we have literally 

been flat lined, which becomes an issue of the health of agriculture 

in this nation. 

At the same time that our numbers have declined in terms of research dollars, our faculty has expanded their portfolio, and they 

are doing more and more to do the research on the relationship between food and disease in humans, to look at obesity, to use animals as models to solve critical issues in muscle and bone health 

in humans. 

So I would argue for an increased level of funding to support this 

important program and an increased amount of coordination between the USDA agencies that worked together with their land 

grant university partners and with the private sector in our commodity wars and various farmer organization to really serve agriculture. 

We would ask the question, is it possible to think differently 

about establishing some national research centers of excellence 

that would address our primary commodity issues and also address 

key issue facing agriculture or opportunities. Could we do something where we would have a center for excellence in soybean research and extension programs? Could we have a national center 

of research and extension excellence related to advanced renewable 

fuels and biobased products? Could we really finally establish an 

upper Mississippi basin nutrient management environment center 

that would coordinate research and extension information across 

the States that are truly faced with a critical issue on water quality? Can we take the enormous knowledge that we are gaining 

from genomics and put together translational and functional 

24

genomic centers to allow agriculture to take advantage of what we 

have learned both for livestock and crop production? 

There is a need for this increased partnership and a need to support it with increased funding. And at the same time it is critically 

important that our land grant university programs through Hatch 

and the Smith-Lever Acts retain their support for formula funds. 

It is the heart of how the system works. It is what brings our ability to address local problems and federally critical issues. And we 

do it because we have the infrastructure in place. Without those 

formula funds we would not be able to do it. And I would think it 

is that infrastructure through research and extension that allows 

us to address, again, local issues, rural issues, issues relating to 

economic and rural development. 

And I just want to mention one program today that is about communities, about extension, a little separate from ag research, but 

that is our New Horizons program that is working with community 

leaders in rural Iowa to really address problems related to poverty. 

That is what can be done with the infrastructure of formula funds 

and that is how we can leverage additional State dollars in that 

partnership. 

So clearly the opportunity is tremendous. Agriculture right now 

is faced with a—really a revolution of rapid change. And it is time 

that we begin to address that through this increased funding opportunity. Thank you. 

[The prepared statement of Ms. Wintersteen can be found on 

page 79 in the appendix.] 

Chairman HARKIN. Thank you very much, Dean Wintersteen. I 

will want to follow up on this idea of centers of excellence with you 

and see how many—what the university—how many we are thinking about, or are some existing now. 

Now we turn to Duane Sand with the Iowa Heritage Foundation, 

and the environmental consultant for Norwalk, Iowa, my neighborhood. Most of his work for the Iowa National Heritage Foundation 

coordinates work on the state appropriations Federal farm policy 

and model watershed projects. I can tell you Mr. Sand has many 

years of experience working with clean water and sustainable ag 

coalitions at both the State and national levels. Mr. Sand, welcome. 

STATEMENT OF DUANE SAND, IOWA NATURAL HERITAGE 

FOUNDATION, DES MOINES, IOWA 

Mr. SAND. Thank you, Senator. I am honored to be called your 

neighbor, thank you. Thank you for the chance to share our priorities and ideas that as you take on the very tough challenges of 

writing a Farm Bill with the budget constraints you have. 

I will start off by saying our top priority is with the Conservation 

Security Program. As the Nation rapidly moves forward implementing a renewable fuels policy we are seeing additional challenges to soil and water and wildlife conservation that come along 

with that, and we need a comprehensive program like CSP for 

working lands as the means to deal with these additional challenges. This year I think is the time to start looking at 

transitioning direct payments into green payments if for no other 

reason than the inflationary impact on land values that direct payments have in the currently economy. 

25

We also encourage the use of commodity payment limits as a 

means to come up with some additional money for conservation. 

And as you look to the future I think it is important to see the Conservation Security Program as a key infrastructure as the Nation 

takes on its challenges on climate change and global warming. 

Eventually I think the Nation will get to a point of using carbon 

taxes or trading of carbon credits. And it is that infrastructure 

Conservation Security Program that can make a billion acres of 

private lands the key to solving a good part of our climate change 

issues and mitigating those problems. 

A big concern of ours right now is the conservation reserve program and it being priced out of the land market in the corn belt. 

The tremendous success of the corn belt with ethanol is affecting 

land values and the baseline increase for CRP will not come close 

to keeping acres in the corn belt. Iowa is the No. 1 among the 

States in using CRP. Nebraska has been No. 10. And I see nothing 

but a migration of those acres in contract to other regions unless 

we make some changes. 

A few ideas we have, one is that since contracts are likely to be 

written at below market values would be good to have a uniform 

discount for all regions, so all farmers and all regions compete equitably on the general signups and the partial field enrollments. 

We believe that the conservation reserve enhancement program 

is a major asset on a highlighted CRP, and that piece should have 

100 percent reimbursement because that is the one piece that is 

highly targeted based on a professional natural resource plans’ priority of the States and so we urge more support for the enhancement program. 

Along that line we would hope that you could direct the Secretary of Agriculture to put additional emphasis on very flexible 

conservation enhancement programs into the corn belt states that 

are going to be missing out because we have been so successful at 

renewable fuels, to give us sort of a baseline based on the historic 

use so there is a flexible way to get more revenue back into the 

States to keep CRP active and not have that be an inadvertent victim of our renewable fuel successes. 

We also think there is a potential under the PAYGO approach 

that if USDA were to start targeting those economically marginal 

lands that were costing the taxpayers money to keep in production 

and to offer a transitional contract that converts them to an economic use, such as grazing, forestry, biofuels, biomass, that—and 

then takes the full credit for the savings, the savings on the disaster payments, crop insurance subsidies, commodity subsidies and 

that gets attributed as part of CRP under PAYGO, then we would 

have some for actually expanding the operation authorization for 

CRP. But that obviously takes a targeted effort in our agency at 

USDA. 

A final point is the shortfall in technical assistance and conservation incentives is going to be real problematic as cellulosic ethanol 

becomes commercially viable and spreads across the nation. We believe that there should be a conservation compliance requirement 

that if an ethanol plant is getting a subsidy that she should take 

on the responsibility of updating conservation plans and in creating 

a market incentive at their plant through price or procurement 

26

purposes so that the farmers that follow the conservation plans get 

a reward as these new biomass markets are created. An example, 

just in Iowa in Emmetsburg, with that first plant we need to be 

updating 300,000 to 500,000 acres of conservation plans to be ready 

when that market opens. That would take five additional staff at 

NRCS, and they are losing 45 staff this year. That is why we need 

a compliance requirement to shift that to the private sector. 

Thank you. 

[The prepared statement of Mr. Sand can be found on page 65 

in the appendix.] 

Chairman HARKIN. Thank you very much. I do not know that I 

understand that. I hope we get into that question. 

I will yield to my friend for purposes of introduction of our next 

witness. 

Senator NELSON. First, I want to thank Tom Schwarz from 

Bertrand, Nebraska for coming here. We have worked together on 

water issues over a lot of years. Tom is an alfalfa, corn, wheat and 

soybean farmer from Bertrand who has a lot of experience dealing 

with water issues in Nebraska. He will be talking about water 

issues and the conservation title from a producer’s perspective. 

Tom has a great perspective on both farming and water issues. He 

is a graduate of University of Nebraska-Lincoln with a degree in 

general agriculture. And he is also a graduate of University of Nebraska Lied Program. He has been on the Nebraska State Water 

Policy Task Force since its inception, and he is a former director 

of the Central Nebraska Public Power and Irrigation District. 

Additionally, Tom was one of the founders of Nebraska Water 

Users, a statewide organization that supports water users and advocates on their behalf. Finally, Tom is the author of ‘‘A Farmers’ 

Guide to Water Rights’’. So some great expertise in water and 

farming issues. I look forward to hearing his testimony here today. 

It is my understanding that Tom is joined by his wife Linda and 

his daughter Becky who is a student at the University of Nebraska 

in political science and that she worked with him to help shorten 

his comments so that we could get done in time to go see the Nebraska spring game in Lincoln. Tom, thank you and welcome. 

STATEMENT OF TOM SCHWARZ, BERTRAND, NEBRASKA 

Mr. SCHWARZ. Thank you, Senator Nelson, and thank you, Senator Harkin, for the invitation to be here. As the Senator said, I 

have closely followed water issues in Nebraska over the last 27 

years. Senator Nelson and I worked together on the FERC re licensing of the Lake McConahagy projects of Nebraska Public 

Power District and Central Nebraska Public Power. That Nebraska 

plan that then Governor Nelson developed eventually became the 

three-state cooperative agreement which led to the settling of that 

re-licensing. 

Current programs in the farm bill have proven remarkably flexible in dealing with water quantity issues. CREP, EQIP and CSP 

all are proving to be valuable tools in helping develop water quality, water quantity and in habitat. In Nebraska, the USDA in partnership with farmers and the State are saving large volumes of 

water in the Platte, Blue and Republican basins. These have been 

really glowing examples of how to bring Federal, State and local 

27

money together to achieve a common goal. These programs continue to face new challenges, but they also provide a platform to 

achieve far more in the future. 

One of the biggest issues facing CREP, EQIP and CSP is payment limitation. I have personally favored lowering the payment 

limit, realizing that if we do this, large operations may have little 

incentive to participate. If large operations are to continue receiving large payments, perhaps we should develop a two-tier limit 

where there would be far lower production payments but much 

higher limit for conservations payments. 

Senator Harkin said, I feel it may be time to make a fundamental shift in our farm programs. We have a window of opportunity today with high cash grain prices to stop paying operators 

based on the volume of grain produced and start paying on production methods. If farmers’ payments were tied to their ability to reduce consumptive use of water, they would likely make that a goal. 

Breaking out highly erodible land could be discouraged and payments could be reduced or eliminated as a penalty for this practice. 

Both of those examples would at the same time save water and 

benefit the natural environment. An investment of this kind in 

farm programs might be widely supported by both rural and urban 

America. 

Conservation can also be a double-edge sword. One man’s conservation can take another’s water supply. When doing an analysis 

of a conservation project we need to quantify the impact of the conservation practice to stream flow and require an offset if the practice depletes the flow of the stream. If such an offset were too costly in a certain area, then perhaps this conservation measure should 

not be done in this particular location. At this time we do not have 

the capability to do this. Additional research to allow this type of 

analysis would be very helpful. 

Cropping patterns can also impact consumptive use in a river 

basin. We cannot tell farmers what to plant, but it might be appropriate to provide incentives to those who chose to plant crops that 

will lower the consumptive use of water. 

I would highly encourage you to support research into crops that 

save water and other potential conservation practices that may 

lower consumptive uses of water. 

Among conservations programs EQIP has proven to be the most 

useful in dealing with water quantity issues. One suggestion for 

this program would be to allow longer contracts similar to CREP. 

By lengthening contracts we could accomplish greater water savings and reduce the administrative workload on NRCS. 

The CREP program has also been used to reduce water use in 

Nebraska. One problem we encountered with CREP was the acreage cap for counties. I would suggest that we consider allowing 

NRCS to exceed the cap in counties where the hydrologic system 

is over appropriated. By definition we cannot sustain current levels 

of development in those areas, so a cap really serves no purpose. 

CSP has the potential to be the most powerful conservation program of all, but it lacks the funding necessary to make it successful 

and due to its complicated nature, farmers are reluctant to pursue 

it. 

28

Speaking as a farm operator, if it takes days off work for me to 

understand a program and to comply with its requirements, I am 

going to be reluctant to participate. It appears to me that the administrative requirements of this program are great enough that I 

am not going to be able to comply without doing some harm to 

other parts of my operation. 

If I look at CSP with regard to water quantity issues, I see a 

number of possibilities. Riparian management could be used to 

benefit water quality, water quantity and restoring habitat to a 

more natural State. Invasive vegetation is a nationwide problem in 

our rivers, and CSP could be used to assist in this area. Native 

vegetation can also cause water problems if it occurs in river beds 

and causes flooding. These kinds of issues could all be addressed 

in CSP. 

Thank you for the opportunity to be here and share my thoughts 

with you. 

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

72 in the appendix.] 

Chairman HARKIN. Now we turn to you John Crabtree, development and outreach officer for the center for Rural Affairs in Lyons, 

Nebraska. He is involved with his family’s corn and soybean farm 

near Dougherty, Iowa. Welcome. 

STATEMENT OF JOHN CRABTREE, CENTER FOR RURAL 

AFFAIRS, LYONS, NEBRASKA 

Mr. CRABTREE. Thank you, Chairman and Senator Nelson. I just 

wanted to say I really appreciate testifying in this part of the committee. I was born in Iowa, grew up in Iowa, lived there for 35 

years. The only thing that got me to leave was a job in Nebraska 

at the center for Rural Affairs. So this is really a great panel to 

speak to. I must confess particularly Dr. Wintersteen here, I was 

a University of Iowa grad, though, sorry. 

Chairman HARKIN. Cannot win them all. 

Mr. CRABTREE. The 2007 Farm Bill presents an opportunity, and 

certainly this is true of all farm bills. However, the continued consolidation and concentration in agriculture, both at the level of production and in processing, calls for a farm bill debate that closely 

examines and ultimately addresses fundamental structural issues 

and long-term investments in rural America. 

Today you heard and as we go forward in this debate you will 

hear a lot of stories about the chronic economic problems that we 

face in many rural communities. And it is important to consider 

chronic economic challenges in the drafting and debate of the Farm 

Bill. But we should, however, recognize there is hope and there are 

solutions to some of the challenges we face. 

Senator Nelson and others testifying mentioned small scale entrepreneurship as a proven strategy to revitalize rural communities. It can create genuine opportunities across rural American 

with the support of a modest investment by the Federal Government. 

The importance of small entrepreneurship is particularly profound in the most rural areas. The Center for Rural Affairs’ analysis of economic conditions in farm and ranch counties of Iowa, 

Kansas, Minnesota, Nebraska, North Dakota and South Dakota 

29

found that nearly 60 percent of job growth in the 1990’s in farm 

and ranch counties in those States came from people creating their 

own job by starting a small non-farm business. The small entrepreneurship is the one development strategy that consistently works 

in these communities. 

We strongly support Senator Nelson’s proposed rural entrepreneur and micro-enterprise assistance program because it would 

tap into the rural development potential of small entrepreneurship. 

The program was modeled after a provision in the Senate version 

of the 2002 Farm Bill, which was not in the conference report, and 

also a program initiated by Senator Nelson in his previous job as 

Governor of Nebraska. As the Senator pointed out, it works. Nearly 

$7 million lent. Nearly $7 millions lent over the last then years. 

15,000 businesses assisted in rural Nebraska, $12 leverage to each 

dollar spent. And at $330 per job I must point out that the center 

for Rural Affairs does not support micro-enterprise development 

and entrepreneurship because we are nostalgic for a mainstream of 

yesteryear. 

This is in truth the heaviest hitter in rural economic development. This is where jobs are created. And at that cost and at 50 

to 70 percent depending on where you go across the country, that 

level of job creation, this is where rubber meets the road in rural 

economic development. 

In talking about entrepreneurship I think we also must come to 

recognize that beginning farmers and ranchers are entrepreneurs 

as well. The future of agriculture, indeed much of the future of our 

rural communities, depends on the ability of new family farmers 

and ranchers to get started. And if beginning farmers cannot get 

started, if there is no future in farming, then the current policy is 

not working. The cost of land, either renting or purchasing land is 

the most significant barrier to entry for beginning farmers and 

ranchers. And land costs weigh heavily on the success of or failure 

of many established small and mid-sized operations as well. 

There was not the original intent of the Federal farm programs 

to become the driving force behind consolidation. Virtually unlimited farm program payments are used by mega-farms to drive their 

smaller neighbors out of business. 

Now although securing payment limits may be the most difficult 

thing we try to do in this farm bill, it is also the most important. 

In fact, without real limits farm programs work against us. 

Just a couple things quickly to point out that while it may be difficult, the solutions are elegant. It is simple. First and foremost, 

close the loopholes and make current paper limits real. Limits 

should be limits regardless of how farms are organized. With direct 

attribution of farm payments to a real person and a definition for 

actively engaged that involves dirt under the fingernails farm programs can work. 

We urge you to say no to any Farm Bill that lacks meaningful 

and effective payment limits because rural American cannot afford 

another Farm Bill that undermines family farming. 

Last, I just want to touch on livestock competition issues because 

in many rural areas the livestock that are raised there are only a 

few or even one packer or processor for a given livestock species 

that buys from the farmers and ranchers. At the same time there 

30

is been a dramatic increase in the use of production marketing contracts. Currently fully 89 percent of hogs are either owned outright 

or tightly controlled through various contracting devices. Many 

farmers and ranchers face price discrimination and severely limited 

market access as a result. Congress should not let another farm bill 

go by without making changes in the Packers and Stockyard Act 

and the Fair Practices Act that are necessary to breathe some life 

and competition back into livestock markets. 

Just a couple of things real quick. Prohibit packers from owning 

livestock, define undue preferences and establish that producers 

need not prove anti-competitive injury to an entire sector relating 

to packers and stockyard cases. 

I want to end with this: It really does come down to a question 

of—in a nation if packers and processors own the control over livestock, what need is there for farmers and ranchers? And I think 

if we are going to hold up the farm as being a solution to some of 

the challenges of rural America, then we need to do some of the 

things that you and Senator Harkin and others have tried to do in 

the Competitive Fair Agricultural Market Act, with S. 305, the prohibition of packers owning livestock. Need to make these things 

into a competition title in the Farm Bill and make it part of our 

future. Thank you. 

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

49 in the appendix.] 

Chairman HARKIN. Thank you very much, Mr. Crabtree. 

Now we will tour to Mr. Stroburg, CEO and president of the Renewable Energy Group in Ralston, Iowa. REG owns three biodisel 

refineries located in Ralston and Wall Lake, Iowa and Glenville, 

Minnesota with a total production capacity of 72 million gallons per 

year. Current biodisel production capacity in Iowa is about 140 million gallons per year. So Mr. Stroburg, welcome. Please proceed. 

STATEMENT OF JEFFREY STROBURG, CEO AND CHAIRMAN, 

RENEWABLE ENERGY GROUP, INC., RALSTON, IOWA 

Mr. STROBURG. Thank you, Senator Harkin, and thank you, Senator Nelson. Really appreciate the opportunity to come talk to you 

about biodiesel and the biodiesel industry. Renewable Energy 

Group is a roll up of all the biodiesel activities that West Central 

Cooperative have been involved in since 1996. And we build bodies 

of plants and build them for third parties as well as for ourselves. 

And we also market the biodiesel coming out of those plants. 

The number of people that have invested in REG biodiesel plants 

in Iowa exceeds 3,000. So there is more than 3,000 individual investors. Matt Schuitteman, who has talked about investing in an 

ethanol plant, there are 3,000 mostly rural farming investors who 

invested in these plants. 

The biodiesel industry provides opportunities for rural development. It also provides opportunities for jobs in rural communities. 

These are skilled jobs. These are skilled jobs that quite often require a 4–year degree or even an advanced degree, so it is—biodiesel is a great rural development opportunity. 

One of the threats that we have for the growth and development 

of biodiesel as an enhancement to our overall national energy complex is an item called renewable diesel, and this is a non-ester reVerDate 0ct 09 2002 11:47 Aug 24, 2007 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 C:\DOCS\35049.TXT SAG2 PsN: SAG2
31

newable fuel where an existing petroleum refinery can take animal 

fat or vegetable fat and run it through the existing refinery and 

call it renewable diesel. It is not biodiesel by definition. It is a nonester diesel, and yet the department treasury has determined that 

they can get all the benefits of that legislation has—provides for 

biodiesel. 

This is a real threat to the growth of the biodiesel industry. It 

is not what was intended by the legislators when they passed the 

incentives for biodiesel. It does nothing for rural communities. It 

does nothing for rural development. And maybe most important, it 

does nothing to expand our ability to produce more diesel fuel in 

the United States. 

When we build a biodiesel plant we expand the production capacity of diesel fuel in the United States. It is been decades since a 

petroleum refinery has been built. So when we run vegetable oil 

through the existing refinery we do nothing to expand our ability 

to produce more diesel fuel in the United States. 

Recently, I credit this first to Boston, they announced they believed their analysis—believe that there would be a diesel crunch 

about midsummer. And the reason is not because there is not 

enough crude oil. The reason is there is not going to be enough refining capacity. We need a policy that encourages the growth of refining capacity in the United States. 

So we do believe that we need to deal with this issue of renewable diesel, and we need to make sure the definition of biodiesel 

tracks with what was the intent of the legislation. 

We have had a lot discussion about ethanol today. And so I—a 

great honor to be able to talk about biodiesel. There are differences 

in ethanol and biodiesel. Biodiesel is a much younger industry. We 

have not had the opportunity to get this far along in the development curve as ethanol. Biodiesel is also not as well understood by 

its users as ethanol is now. And because of that we think we 

need—we need to make a distinction between the consumer awareness and the policy that is going to be required to promote biodiesel. We are in a different stage than ethanol. We do—we do believe that we need to increase the support for programs that target 

biodiesel and biodiesel awareness among consumers as well as handlers. 

The handling of biodiesel is an extremely important issue if we 

are going to maintain the quality of fuel in the overall fuel system. 

Renewable Energy Group also supports the research title outlined in Title VIII of the Farm Bill. This provides for $500 million 

of mandatory funding over the next 10 years. And we think this 

is going to be extremely important so that we have a collaboration 

between Federal and university scientific experts which will ultimately make bioenergy most cost effective. 

Feed stock supply is also an important issue for our industry. 

Senator Nelson talked about feed stock diversification. And we believe and experts believe that biodiesel can be made from many different feed stocks. 

Senator Nelson, just think about the drought area that Drought 

David is causing in Southwest Nebraska and think about maybe 

putting algae ponds in Southwest Nebraska. They need sunlight. 

They do not need high quality water. It can even be brackish water 

32

to grow algae. Algae in the future we believe will be a great source 

of oil for biodiesel. 

There are other plants that we believe could grow in more areas 

where traditional feed oil plants cannot be grown. Colorado is looking at mustard, and we think there is many yet-to-be-discovered 

seeds that were not useful in the food chain but might be very useful in the biodiesel area. 

So we do appreciate the opportunity to talk about biodiesel. 

One other item I would like to touch on is just the support to increase the transport of biodiesel in pipelines. It is been done in Europe, and we need to have incentives that help us encourage the 

pipeline industry in the United States to move biodiesel through 

pipelines. 

Thank you. 

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

75 in the appendix.] 

Chairman HARKIN. Thank you very much, Jeff. Thought I would 

just switch it here since I went first, I will try to give my colleague, 

Senator Nelson, the opening line for questions. 

Senator NELSON. Mr. Stroburg, let me just begin with you. Clearly going to a crop that does not have any food value but does have 

value for alternative energy is, I think, probably consistent with 

what we have been saying, instead of taking land out of production 

where it could be used for other purposes, as Senator Harkin said, 

with perhaps a lower payment from the government but with the 

expectation that if you get into this business of producing this crop, 

algae, or moving from corn to sweet sorghum, making some change 

that will simply add to our fuel capacity is very important. I do not 

know about algae, but I suspect since we have—we can raise salmon in Nebraska, we might find a way to grow algae as well. 

But what are your thoughts about what you could do to create 

the incentive, encouragement and get reality of having these alternative crops develop to go to creating more biodiesel fuel. 

Mr. STROBURG. One of the first steps is to have the land grant 

universities of the United States, particularly the two greatest 

ones, Iowa State University and University of Nebraska, do basic 

research on that. There are—there are plant species out there that 

have not been commercialized that our farming community is not 

used to raising that move through the university system and eventually become commercialized. That will happen as long as we continue to support the research and support on the other hand, the 

biodiesel use, because there is nothing greater than consumer demand. And if we have consumer demand it will get pulled through 

clear from the university clear to the end users’ tank. 

Senator NELSON. I agree with that. 

Mr. Schwarz, because of your interest in water you have looked 

at a lot of different ways of conserving consumptive use. And I still 

get—we grew up in the same particular area. Bertrand is not that 

far from McCook where I grew up, probably what, about 65 miles. 

And with all the salt cedar and other kinds of weeds and growth 

that is coming up in the Republican River Valley right along the 

river bed, it is changed the whole structure, and there is a great 

water demand for those non-crop weeds and growth. 

33

I saw that there is—there was a pilot program of using goats. I 

cannot make this up, I am sure. But using goats down in certain 

areas that will eat those plants but would not touch the grass for 

grazing cattle and other livestock. I am not going to ask you how 

many goats it is going take to clear that, but I imagine Becky could 

figure it out pretty soon with her background. 

What are your thoughts about what we do in the Farm Bill to 

eliminate that kind of growth that, for water purposes, that would 

help increase water availability going down the Republican River, 

going into Kansas, to take some of the pressure off Southwest Nebraska where otherwise, if it isn’t Drought David that will so negatively impact the economy, then the lack of having—or having crop 

land taken out of production or turn to dry land will otherwise adversely affect it? Do you have any thoughts about that. 

Mr. SCHWARZ. We are working in the legislature right now to 

pass a bill that will begin to depress invasive species issues and 

over vegetation of our rivers. Nebraska has kind of a unique situation right now where a lot of the country is really concerned about 

maintaining and growing stands of trees. We have, because of an 

endangered species issue, a need to remove a lot of vegetation from 

our rivers to benefit those endangered species. Of course, salt cedar 

is a major water user and also is counter to our ability to protect 

those endangered species. So this bill, the idea is to eliminate these 

species to the greatest extent practical on these river beds. 

There are different ways to deal with these species, and of 

course, one is to use chemical application and then mechanical or 

non-traditional goats. Central Public Power did an experiment on 

Jeffrey Island near Lexington and that area as I recall is about 

1,000 acres, and I believe they brought in about 1,000 goats. And 

it was quite a sight to see. These goats will literally climb up the 

salt cedar bushes, they are really not a tree to look at them, and 

they will eat the vegetation off and they prefer eating weeds. They 

prefer eating salt cedar rather than the grass. They literally will 

leave the grass to the last to eat. But there is not that quite much 

demand for goats in the market. 

So if we are going to control the salt cedar problems we have in 

Nebraska, it is questionable if we could put enough goats out there 

to get the job done, so probably with some kind of a mix. 

So we are going to use traditional controls. We need, and it takes 

a lot of money no matter how you do this, and what we are trying 

to do is utilize the EQIP program to leverage State money to get 

the job done and the EQIP program right now works perfectly for 

this. So that is another case where we have got a product out there 

that is working and we can utilize it to do a better job. 

Senator NELSON. Congressman Osman and I at the end of the 

year get some more CREP money and EQIP money to be able to 

do that. 

And Dr. Wintersteen, as we get better with our conservation 

practices to—with strips and other grass growth might protect the 

erodible acres, the good news is we do that. The bad news is then 

there is less water necessarily flowing into rivers, streams and 

other sources to go into the State of Kansas, which puts us in—

the better we get on conservation sometimes the harder it is for us 

to make those compliance requirements. 

34

But I appreciate very much your comments, Tom, and continued 

to work. If there is something we can do, obviously let us know. 

Thank you. 

Chairman HARKIN. Goats, have you ever tried to buy goat cheese, 

it is expensive. Not kidding you. Went to the store, to Safeway in 

Virginia to buy some cheese. All the goat cheese from France, you 

have to look hard to find any from the United States. Maybe there 

is a market there. I do not know. I am just kidding you. 

I want to talk to Dr. Wintersteen about formula funds. Now formula funds I understand what they do. I understand how they operate. Questions have been raised that some of the formulas have 

been relayed down into 1800’s, and we continue to operate on that 

basis. Some have said that we should take a look at these formulas. Formulas were laid down at the time when a land grant college served a defined area. The land grant college in Iowa served 

the needs of the Iowa agriculture. The land grant college in Georgia served Georgia. The land grant college in Texas served—that 

is how they were developed. And there was good reason for it at 

the time. But it seems to me now, Iowa State is doing research on 

things that are applicable to Georgia or Texas and they are doing 

research that is applicable on us. I am just wondering, is there a 

need to re-examine how those formula funds are allocated? 

Ms. WINTERSTEEN. I like the formula funds. I like the way they 

are now. We benefit greatly. And I just—I think this is my opportunity. I think it is critically important to understand that if you 

look at the formula, the States that are big in agriculture, Senator 

Harkin, are the ones that benefit the most from those formula 

funds. And they are marked clearly in the infrastructure, in the 

budget of the College of Ag at Iowa State, at the University of Nebraska. If our formula funds would go away, if the Federal Government, which are about $5 million, the number of faculty that I 

would not have the salaries to pay them would be pretty significant. So we have it embedded in our budget, they are 

operationalized. It would be extraordinarily difficult to move away. 

Chairman HARKIN. I am talking—I am talking about the review 

process that goes into the application for formula funds. 

Ms. WINTERSTEEN. We would certainly be happy to participate in 

the review, but again, we like the number we have right now. 

Chairman HARKIN. I mean, I understand that, of course. It is the 

same thing about a lot of things, is it time to look at them and 

think about a different kind of review process. I just say, questions 

are being asked about it. I think they are legitimate questions. If 

something has been operating the same way since the 1800’s you 

have to ask the question, is it really meeting the needs of today or 

what we are looking at down the pipe or is it just a system there. 

Ms. WINTERSTEEN. And I would argue we can document for you 

the outcomes of these formula funds that we would be able to share 

that demonstrated impact, and again, Wally Huffman’s research 

that is shown that 50 percent annualized return on formula funds 

is an extraordinary response. 

Chairman HARKIN. Again, the essence of my question is should 

these funds, could these funds, these formula funds benefit from an 

additional review process to insure they go to areas of study where 

35

they are most needed, looking ahead at what we are trying to do 

in agriculture in the future. 

Ms. WINTERSTEEN. And I would state that within certainly the 

College of Agriculture at Iowa State University we work with our 

State holder groups. We ask them for their priority needs and we 

focus on those using the dollars to address the local needs. So to 

me, the review, if it is done, Senator Harkin, is a review that 

should be done at a local level because this again is a partnership 

between the State and the Federal Government. The formula funds 

and Iowa that come in at the $5 million level approximately 

leverages the States’ investment to the experiment station of $31 

million. 

Chairman HARKIN. I hate to interrupt, but maybe a change in 

the review process to think about more of this money ought to be 

going to biomass research or biodiesel research or to the kind of 

thing Senator Nelson just brought up, maybe Iowa State would do 

better under that kind of a review process. I do not know necessarily it would do worse. Might be it might do better. So I just 

ask that and I ask you because you are so involved in this because 

we do want to do more money in research. We do have to do more 

in research. It is a shame what is happened to ag research in this 

country. And—but we also have a reality to face, and that is we 

have a really limited budget. So the question then becomes—gets 

to be, well, is there a better reallocation or better way of reallocating the moneys that we have to look at the needs of agriculture 

in the future. That is really the essence. And we will be doing that. 

So I welcome, you know, your input into that as we move ahead. 

Of course, we will be hearing from land grant schools from around 

the country of course on that issue. 

Mr. Sand, I do not know if you heard what Mr. Bailey said, he 

raised an interesting point about a super EQIP and maybe—I am 

going to get more information from you on that, but how would you 

see transitioning the CSP into the role of being the primary working land program, which you talked about, and how would it work 

with the existing EQIP program? Is there some way of melding 

those two? 

Mr. SAND. I really appreciated your concept that you explained 

in terms of using EQIP as getting the primary practices on the 

land to make people eligible for CSP and to turn that into a seamless process from making land eligible and then actually moving 

people into the full one tier at a time kind of improvement. So we 

have a continuous improvement process. 

I think one of the weaknesses of EQIP is the you have been able 

to access it one practice by one practice, which has been more of 

a Band-Aid approach. CSP is—its advantage is hopefully engaging 

more people in the conservation process, which is critical. But it is 

engaging them in a continuous improvement process, which is 

where we really have to be for environmental protection. And obviously the big question is money because farmers have been readily 

available to signup for CSP and been favorable about participating. 

Chairman HARKIN. I think there is a lot of support if we get off 

this watershed basis we have been on and make it broader based. 

Also, as you know, most of the money in CSP has been going for 

tier three. Well, that was never our intention. Our intention was 

36

to reward the best obviously as an example, but to start getting 

other people in at tier one and then moving them up the ladder. 

And so we will be looking at that and how we modify that in the 

next Farm Bill also. So I am—Mr. Schwarz and others are interested in that area, any suggestions and advice you have on that, 

I am open for too. How do we get—focus more on tier one, getting 

more people into tier one? Tier one, obviously that is cheapest. And 

you get more people involved then you graduate them up to two or 

three, that type of thing. But the idea of using EQIP as the basis 

for getting them in and getting them the initial, you know, practice 

and then moving them on through CSP. Anything you have got on 

that I would sure appreciate that in the future. 

I need more information, and I think maybe I will have to lean 

on Senator Nelson for this, on what you said, Mr. Schwarz, about 

tying payments to reducing consumptive use of water. I am not certain how that would work. 

Mr. SCHWARZ. Well, there are practices we can use that will reduce the consumptive use of water. Anytime we can lower the 

evaporation losses that we take on a piece of ground or through approved crop genetics, we can lower the transpiration losses we take 

on that ground. You know, we have got high hopes today that with 

research that is also underway and nearing fruition that we are 

going to have corn varieties that will use maybe as much as a third 

less water in the process of growing it. You know, if we can make 

conversions to those kinds of crops I think it is going to benefit us 

all in the long run. 

Chairman HARKIN. Thank you very much. Last one I have, Mr. 

Stroburg, moving biodiesel through pipelines. By the way, Senator 

Nelson just showed me the ruling that came out of the IRS just the 

other day I guess, right, on this? So obviously this is something we 

are going to have to look at, this renewable diesel thing. But question, biodiesel through pipelines does not have the same problem 

as ethanol; is that right? 

Mr. STROBURG. That is right, they are moving biodiesel in pipelines in Europe and have for years. 

Chairman HARKIN. Just want to make that clear. 

I want to thank the panel very much, unless somebody has one 

last thing they wanted to add or point to me before I move on. 

Mr. SCHWARZ. I guess one comment I would like to make is it 

is important in our farm program, we have got to be able to develop a farm program obviously that is acceptable to farmers, but 

it is just as important that we have the ability to go to that cab 

driver in Chicago and explain why we are taking X dollars of his 

Federal tax money to go into these farm programs. We have to 

show him that we are benefiting the environment with that investment that he is making. We are helping to lower his energy costs 

through the development of these energy sources we have talked 

about here today, and that we are providing some security that his 

food supply is going to be there in the long term, it is going to be 

safe and he is not going be dependent on outside countries for that 

food supply. 

Chairman HARKIN. Very good summation. I want to thank the 

second panel. 

37

Now we have some time, I am going to open it up for an open 

mic. Panel, you do not have to sit there if you do not want. You 

can leave if you would like. But I would like to open it up for at 

last a few minutes here. We have some time for open mic. 

This is an official hearing of the Agriculture Committee, so I ask 

that you mention your name, where you are from and if your name 

is not Nelson or Smith, you might want to spell it out for the benefit of the recorder who is here. 

Mr. Sturm has the mic and if you will just come down there and 

make a concise statement, I would sure appreciate it. 

Mr. CAMPBELL. John Campbell, AGP, Omaha. Senator Nelson 

came all the way across the river, and I am going to be brief because as soon as I leave here I am going to be headed up to Valentine for spring turkey hunting. 

Senator Harkin, my written testimony, which I hope you will put 

in the record, is really aimed at trying to help you head the direction you are trying to go. And having my first Farm Bill in 1980 

I can tell you I never thought I would have said that, but there is 

a huge convergence of thinking out here in the country, which you 

are not going to hear from inside the beltway. But out here there 

is a lot of convergence. And the direction you are trying to take us 

involves changing the momentum. In order to do that, in order to 

keep from just doing the status quo, you have to burst some myths. 

There is a lot of myths out there where there is factual research 

that can help you along this path. 

What my comments focus on today are primarily the CRP, but 

all of these things weave together. So very briefly right now today 

there is this debate about food versus fuel. We are using about 15 

million acres for bioenergy. At the turn of the century we used 90 

million acres. That is a DOE figure. That is because we used hay 

and grain to power horses and mules and oxen and those life machines that did our work. Well, so there really is not much of a conflict here. But the real conflict is not between food and fuel, but it 

is wildlife. 

As you said, CRP is going to fall victim to the market place if 

we do not do something different. And the key is getting people inside the beltway to think about what we can do different. And in 

order to do that we have to explode some myths. 

One of the myths is that CRP has been really beneficial for erosion. It has not been. The facts are that most of the ground is western high plains ground that was enrolled because of wind erosion. 

That is not the most damaging erosion. Heat and real erosion from 

water is the most damaging. 

If you look at the facts, farmers through conservation compliance 

and farming practices have brought more acres into tolerance, the 

T level, on their own outside of the CRP than have ever been accomplished by CRP. And it is even more striking if you figure, as 

you know, out in western Nebraska one person’s soil erosion is another person’s top soil. It is totally different. We were trying to get 

the most ground in the CRP for the cheapest dollars so we enrolled 

as quickly as possible. So that has not been great. 

Chairman HARKIN. Can you sum up, please? We have got a lot 

of people and I have to move on. 

38

Mr. CAMPBELL. Two other things, pheasant hunting, which I 

know is dear to your heart, Senator Nelson, is on the decline, hunting is on the decline. Pheasant counts are down from the time 

when the CRP was established. The CRP has not been good for 

pheasant and it has not been good for hunting, and you know the 

reasons why. We need to redistribute that in the kind of programs 

that are more widespread and less concentrated. Duck populations, 

the same is true of duck populations, has not been helpful, actually 

we are back to 1955 levels. 

Chairman HARKIN. Mr. Campbell, thank you. I have got your 

thing, I am going to read it, believe me. 

Mr. ANDREWS. David Andrews from the National Conference in 

Des Moines. My question concerns the relationship between the 

WTO or international trade. There is a trade section in the Farm 

Bill and rural development. If—I think the WT0 is not frozen in 

stone, that there are openings in terms of the development agenda 

to special differential treatment developing the country’s products 

to geographic indicators, to special products, there is an opening to 

the potential for global agriculture that respects a greater diversity 

than the current WTO seems to do. 

And in the United States, the Farm Bill can assist in further diversifying and localizing by removing road blocks to local food procurement, to enabling meat inspection to go forward that will allow 

State inspection that goes across State borders. Why shouldn’t 

Council Bluffs have the opportunity to have meat produced here in 

Iowa go over to Omaha and satisfy those markets? And there is 

some question at the USDA level on food procurement rules. Why 

cannot we have the Department of Defense purchase local foods 

where this is a opportunity? Can we remove some of the obstacles 

to local and regional food systems and also move the WTO to appreciate that phenomenon too? Thank you. 

Senator NELSON. I sit on the Armed Services Committee, and we 

have from time to time inquired as to why the Department of Defense or Pentagon does not take domestic products for food, and we 

do not have a satisfactory answer yet. But we are going to persist 

at it. And I do not know the WTO implications, but obviously have 

to be considered once we are there, but you are absolutely right. 

There ought to be—we do put requirements on the Pentagon to 

have U.S. made products that they buy, creates big problem because some of the internal working parts come from other parts of 

the country, but it is the problem you have with food grown here 

and we ought to have a priority. We have not given up on it. It is 

just the Pentagon is a very difficult place to change the culture. 

Mr. SWANSON. Harold Swanson, professor of the College of Ag, 

started the ag department in 1970, ran it for 25 years, got about 

5,600 farmers out there that carry our brand and know how to 

farm. And that picks up on what was said, that we have got two 

times as many farmers over 60 than they have under 35. And the 

problem, if you are going to farm, get some training, that is what 

I always told my people. And we—our graduates are very, very successful. And if we are going to—the problem is there is no requirement, educational requirement to get into farming. And when you 

look at—I remember the statistics back then, only 10 percent of 

people who started farming back in the 1970’s and 1980’s had any 

39

training for their work. And I do not know that it is any better 

than now. So the thing that I would like to see directly for in the 

Farm Bill would maybe with FMHA loans or PCA or even the credit, private credit to offer those few years in farming some very substantial discounts on the interest rates being a way of helping. And 

another thing is any way that we can encourage people to get some 

training for farming, because if once you get into a community college program like ours here at the universities, it changes the 

whole attitude of what it takes to get started farming. And it requires just one tremendous amount of information and risk taking. 

And so any way that could be put in there to help that, that would 

be very appreciated. Thank you. 

Chairman HARKIN. Thank you. 

Mr. BARRY. Morning. My name is Tim Barry. I am from Council 

Bluffs. Thank you for coming here today and hearing issues about 

the Farm Bill. I was born and raised in a little town north of here, 

Pisgah, Iowa, and my brother still farms the family farm up there. 

I have been in the seed industry about 30 years. I am also on the 

Iowa Seed Association Board. And agriculture is not only my business, but it is also my passion. I also work with the Chamber here 

at our Ag Committee, and I am on the extension council here in 

Pott County. That is what I wanted to speak with you about today 

as far as support of extension. 

Dr. Wintersteen talked about from the Iowa State view, and I am 

talking about from the grass roots. Extension does so many things 

for communities. It brings youth 4–H and some of the youth programs, and this is so important to our communities. Also it is a 

network that is already set and up and is in practice as far as what 

they do. We have experts as far as regional experts that talk about 

and support some of the bases of agriculture around our States. 

And it is also a system that is across the Nation too, through the 

land grant colleges. So I guess from my standpoint as an extension 

council member, a grass roots type of person, I guess I hope when 

you go to the farm plan and you look at funds for extension and 

some of the issues in that regard, no matter how you do it, I think 

it is something that helps our whole rural community and should 

be part of the farm plan and do appreciate your time here today, 

gentlemen. Thank you. 

Chairman HARKIN. I can assure you that extension service is 

alive and will continue to be under this Farm Bill. I can assure you 

of that. 

Mr. LUCKEY. Bill Luckey from Columbus, Nebraska, Pork producer in Platte County. We have hogs, my son has a cow/calf operation. We have a small feed lot also. And we built a 2,000–head 

finisher to bring one of our sons back into the operation. So as far 

as entrepreneurship that is one of the things we did, we took advantage of an opportunity and brought one of our sons back. However, we have two more sons that might want to come back, so I 

do not know what we are going to go to in order to get them back. 

I am speaking today on behalf of pork producers. And we just 

want to emphasize how some of the structural changes are always 

occurring in agriculture. It is particularly in the hog industry. You 

know, we are not the same as what we were 20, 30, 50 years ago. 

40

There is definitely a change. As a Farm Bill goes, we are going to 

have to change also. 

But you stated that we are going to have a competitive title in 

the Farm Bill. We want you to be extremely careful in implementing that portion of the Farm Bill because it seems like in so 

many situations we try to legislate to certain issues, and we end 

up hurting some of the people that we want to protect in the long 

run. So we just want to make sure that you look at the consequences of all the legislature front to back so you make sure you 

are helping the ones you really want to help and not harming 

them. Thank you for having us. 

Chairman HARKIN. Thank you very much. Appreciate that. 

Mr. ZYLSTRA. Good morning. My name is Roger Zylstra, and I am 

a grain and livestock farmer from Lynnville, Iowa. I am also a director with the Iowa Corn Growers Association and I thank you for 

this opportunity. 

The Iowa Corn Growers has been working for a couple years to 

identify some of the challenges with the Farm Bill and there is four 

improvements that we would like to see. 

We would like to see a revenue based commodity title, an option 

for part of the direct payment targeted to farm and family investments, a stronger conservation title and rural trade organization 

friendly. 

And you might ask why change the Farm Bill? The Farm Bill is 

an investment in strengthening our economy. Congress must make 

investments in programs that will enable the U.S. to keep its edge 

in productivity, innovation, food security and renewable fuels. This 

investment will increase the value of farm programs, market orientation and tax dollar efficiency. Thank you. 

Chairman HARKIN. You said four things, revenue issue based, 

and then I got the stronger conservation. What was No. 2? 

Mr. ZYLSTRA. No. 2 is an option for part of the direct payment 

targeted to farm and family investments. 

Chairman HARKIN. OK. 

Mr. ZYLSTRA. Part of that money maybe could be used to invest 

in biodiesel, renewable fuels or conservation, just any of those 

things. 

Chairman HARKIN. What was No. 4? 

Mr. ZYLSTRA. No. 4, we think it needs to be World Trade Organization friendly. 

Chairman HARKIN. Well, we have to do that. People say to me, 

do not pay any attention to WTO. Sometimes I would like not to, 

but the fact is the Constitution of the United States explicitly says 

that all treaties are the supreme law of the land. So once we sign 

a treaty, it is the supreme law of the land. And we did it, for better 

or worse, sign the WTO, so we are part of that. So we have to be 

cognizant of it. It is the supreme law of the land, and we have to 

operate under its purview. So we have to be cognizant of it when 

we do develop our Farm Bill, absolutely. Thank you. 

Ms. BRAHMS. My name is Donna Brahms and I am representing 

the bee keepers of the United States. I am the president of Iowa 

Honey Producers, and I am also a member of the American Honey 

Producers and American Bee Federation. 

41

As you are no doubt aware there is a new and unexplained condition known as Colony Collapse Disorder and it is wreaking havoc 

in the nation’s bee colonies. We are losing alarming rates of bee 

colonies in the United States. Some bee keepers have lost upwards 

of 90 percent of their colonies. And America’s bee keepers and their 

bees are an indispensable pillar of the United States agriculture. 

Without honey bees we would lose one-third of the food that we are 

used to eating. Every third bite is attributable to a honey bee. If 

we do not have honey bees, we are not going to be able to continue 

with food as we have it now. 

I am—Iowa State does no research on honey bees. There is no 

school in the State of Iowa that is helping bee keepers. Not just—

I am here mainly to make sure that the research is continued for 

the ARS, honey bee research labs, there is four of them in the 

United States. We need to make sure that they continue getting 

their research, and we would also like to ask that implementation 

of the crop insurance program for bee keepers that Congress authorized in 2002 is put in place. And I would like to thank you for 

signing the letter that Senator Baucus from Montana formed to 

send to the Secretary of Agriculture. So, thank you. 

Chairman HARKIN. I am sure glad you are here. I am aware of 

this, so is Senator Nelson. I do not know if you wanted to respond 

at all, Senator Nelson. 

Senator NELSON. Obviously the honey bee industry is an important part of agriculture and the USDA needs to focus on this right 

away. I mean it is critical, the problem is more than imminent, it 

is upon us, and we have to react to it. And we would like to obviously get some research, private or public, to know what to do to 

stem the problem. 

Chairman HARKIN. I can assure you, we have—we are aware of 

this, and we are pushing USDA to find the solutions through the 

different centers that you mentioned, the four ARS stations—ARS 

stations that are doing research on this. And it is—it could be a 

devastating problem. I do not know if Dean Wintersteen, if you 

have anything to add to that. 

Ms. WINTERSTEEN. I would agree that it is a crisis in agriculture 

nationwide, and it is an unexplained issue, and clearly ARS leads 

the way in addressing this issue through their established program. 

Chairman HARKIN. I am really glad you brought that up. I am 

remiss in not mentioning it. Because it is a very important factor 

in agriculture. It is hit us hard just in the last few months. Thank 

you. 

Mr. BECKMAN. I am Doug Beckman from Mills County. I am an 

ex-teacher and farmer from that area for a long time. I am just 

glad to hear that there seems to be a lot of interest in rural development, maintaining a part in the ag program. And I think Iowa, 

the Midwest in general, is on the verge of a huge undertaking and 

it is coming up in the near future if policies and legislation allow 

it to happen with development of biomass and biofuels and bioproducts that could be developed. And I think they could get something 

done in our smaller rural communities. 

One of the things that is concerning me a little bit, I know you 

mentioned that you think ag research money should be increased 

42

and I would like to see our universities stay involved in that research, especially along these new technologies. If private business 

takes over that, I am sure they are going to end up owning a lot 

of intellectual properties that are not going to be available if the 

university had no part in developing it. So it is a way of keeping 

the public involved using our tax moneys I believe, that they can 

all benefit rather than a few private individuals maybe benefiting 

in the long run. Thank you. 

Chairman HARKIN. Very interesting concept I thought. Thank 

you. 

This is the time for us to move on. I have another hearing in 

Sioux City this afternoon. Again, I want to thank all of our panelists for your testimony, for coming a great distance, and thank all 

of those who just added their comments here at the end here. 

As you can see, ag policy is very complex, interwoven with so 

many aspects of our daily lives. We have a tremendous job ahead 

of us. We have a tight budget situation confronting us. I only wish 

I had—I wish we had the baseline money to operate on this year 

as we did in 2002, and we do not. We are fighting to get more. And 

I could not ask for a stronger ally and stronger friend for rural 

America and agriculture than we have got it Senator Ben Nelson, 

and I want to thank you for again being here today and being such 

a great member of our Ag Committee. 

Senator NELSON. Thank you, Mr. Chairman. It is been a pleasure 

and a very enlightening experience to be here today. And I appreciate your scheduling this and calling it here in Council Bluffs. 

Chairman HARKIN. Thank you very much, Ben. And we will keep 

the record open to receive statements, et cetera, 5 days. If anybody 

has statements and stuff, they can submit it to us, we will keep 

it open for 5 days. Again, we thank you all and have a safe travel 

home, and the Senate Agriculture Committee will stand adjourned. 

[Whereupon, at 12:17 p.m., the Committee was adjourned.] 

(43)

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APRIL 14, 2007

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