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THE AGRICULTURAL ACT OF 2014 

IMPLEMENTATION AFTER ONE YEAR 

AND FARM CREDIT ADMINISTRATION 

PENDING NOMINATIONS 

HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

FEBRUARY 24, 2015 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

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

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

PAT ROBERTS, Kansas, Chairman 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

JOHN BOOZMAN, Arkansas 

JOHN HOEVEN, North Dakota 

DAVID PERDUE, Georgia 

JONI ERNST, Iowa 

THOM TILLIS, North Carolina 

BEN SASSE, Nebraska 

CHARLES GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

DEBBIE STABENOW, Michigan 

PATRICK J. LEAHY, Vermont 

SHERROD BROWN, Ohio 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

JOE DONNELLY, Indiana 

HEIDI HEITKAMP, North Dakota 

ROBERT P. CASEY, Jr., Pennsylvania 

JOEL T. LEFTWICH, MAJORITY STAFF DIRECTOR

ANNE C. HAZLETT, MAJORITY CHIEF COUNSEL

JESSICA L. WILLIAMS, CHIEF CLERK

CHRISTOPHER J. ADAMO, MINORITY STAFF DIRECTOR

JONATHAN J. CORDONE, MINORITY CHIEF COUNSEL

(II) 

(III) 

C O N T E N T S 

Page 

HEARING(S): 

The Agricultural Act of 2014 Implementation After One Year and Farm 

Credit Administration Pending Nominations .................................................... 1 

Tuesday February 24, 2015 

STATEMENTS PRESENTED BY SENATORS 

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

Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan ..................... 4 

Panel I 

Felts, Rich, Wheat, Corn, Soybean, and Livestock Producer, Liberty, KS ......... 5 

Lee, Ronnie, Cotton, Peanut, Wheat, Corn, Soybean, Pecan, and Cattle Producer, Bronwood, GA ........................................................................................... 7 

Mitchell, Clay, Corn and Soybean Producer, Buckingham, IA ............................ 10 

DeRuiter, Michael, Cherry, Apple, and Peach Producer, Hart, MI ..................... 12 

Panel II 

Vilsack, Hon. Tom, Secretary, U.S. Department of Agriculture, Washington, 

DC .......................................................................................................................... 24

Panel III 

Hall, Jeffery S., of Kentucky, to be a Member of the Farm Credit Administration Board, Farm Credit Administration ........................................................... 49 

Tonsager, Dallas P., of South Dakota, to be a Member of the Farm Credit 

Administration Board, Farm Credit Administration ........................................ 51 

APPENDIX 

PREPARED STATEMENTS: 

Klobuchar, Hon. Amy ....................................................................................... 58 

DeRuiter, Michael ............................................................................................. 59 

Felts, Rich ......................................................................................................... 62 

Hall, Jeffery S. .................................................................................................. 68 

Lee, Ronnie ....................................................................................................... 71 

Mitchell, Clay .................................................................................................... 78 

Tonsager, Dallas P. .......................................................................................... 82 

Vilsack, Hon. Tom ............................................................................................ 84 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Public 5 day letter, Committee questionnaire and Office of Government 

Ethics Executive Branch Personnel Public Financial Disclosure Report 

filed by Jeffery S. Hall .................................................................................. 98 

Public 5 day letter, Committee questionnaire and Office of Government 

Ethics Executive Branch Personnel Public Financial Disclosure Report 

filed by Dallas P. Tonsager .......................................................................... 130 

Page

IV 

QUESTION AND ANSWER: 

Hall, Jeffery S.: 

Written response to questions from Hon. Pat Roberts .................................. 156 

Written response to questions from Hon. Debbie Stabenow ......................... 156 

Tonsager, Dallas P.: 

Written response to questions from Hon. Pat Roberts .................................. 159 

Written response to questions from Hon. Debbie Stabenow ......................... 160 

Vilsack, Hon. Tom: 

Written response to questions from Hon. Pat Roberts .................................. 162 

Written response to questions from Hon. Thad Cochran .............................. 166 

Written response to questions from Hon. John Boozman ............................. 166 

Written response to questions from Hon. Debbie Stabenow ......................... 167 

Written response to questions from Hon. Amy Klobuchar ........................... 191 

Written response to questions from Hon. Michael Bennet ........................... 193 

Written response to questions from Hon. Heidi Heitkamp ........................... 199 

(1) 

THE AGRICULTURAL ACT OF 2014 

IMPLEMENTATION AFTER ONE YEAR 

AND FARM CREDIT ADMINISTRATION 

PENDING NOMINATIONS 

Tuesday, February 24, 2015 

UNITED STATES SENATE, 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, 

Washington, DC 

The Committee met, pursuant to notice, at 9:35 a.m., in room 

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

of the Committee, presiding. 

Present: Senators Roberts, Cochran, McConnell, Boozman, 

Hoeven, Perdue, Ernst, Tillis, Sasse, Grassley, Thune, Stabenow, 

Bennet, Gillibrand, Donnelly, and Casey. 

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

STATE OF KANSAS, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman ROBERTS. Good morning, members of the Committee. 

I call this meeting of the Senate Committee on Agriculture, Nutrition, and Forestry to order. 

As our first order of business, it is only right that we recognize 

and appreciate and honor our chairwoman of the past four years 

and the tremendous amount of good work she accomplished during 

a very, very difficult time. Senator Stabenow is a dedicated, and 

sometimes even fierce, leader of agriculture policy, whose tenacity 

successfully carried a Farm Bill across the goal line when many believed it just simply could not be done. 

At times we may have disagreed on certain aspects of the policy; 

that is to be sure. But we always agreed—we always agreed—on 

the importance of providing the stability to America’s producers, 

and that only comes with a five-year bill. 

Madam Chairwoman Emeritus, as a sign of our appreciation of 

your service, we present to you the chairwoman’s gavel, the same 

gavel you used to keep us all in line. 

Senator STABENOW. Thank you very much. 

Chairman ROBERTS. There are several dents on the gavel. 

[Applause.] 

Senator STABENOW. Thank you. 

All right. That is wonderful. Thank you very much. 

Chairman ROBERTS. Please do not hit me with that again. 

Senator STABENOW. That is really terrific. Thank you. 

Chairman ROBERTS. While—— 

2 

Senator STABENOW. Senator Bennet just missed this. Mr. Chairman, I apologize. 

Chairman ROBERTS. Are you a member of this Committee, Michael? I seem to recall that. 

Senator BENNET. Did you let me back on? 

Chairman ROBERTS. Yes. 

Senator STABENOW. This is the gavel that we used to knock up 

the Farm Bill. So thank you. 

Chairman ROBERTS. We also have the sound up too far. 

We also want to present you with this picture. 

Senator STABENOW. Oh. 

Chairman ROBERTS. This is obviously you whispering advice to 

me at the appropriate time. I am awake in this picture. 

Senator STABENOW. You are awake. That is actually quite impressive. 

Chairman ROBERTS. It says ‘‘Madam Chairman—Chairwoman, 

pardon me, appreciate your always good advice. Cherry trees forever. Pat Roberts.’’ 

Senator STABENOW. Thank you. 

Chairman ROBERTS. We have another—— 

Senator STABENOW. Thank you very much. You are giving me too 

many things. 

Chairman ROBERTS. Just to show that there were times 

when—— 

Senator STABENOW. My goodness. 

Chairman ROBERTS. —it was not so serious and we did get along. 

‘‘Must have been funny. Best wishes. Pat Roberts.’’ 

You are absolutely—— 

Senator STABENOW. I am enthralled. 

Chairman ROBERTS. You are enthralled. 

Senator STABENOW. Yes, yes. That is great. 

Chairman ROBERTS. I would not have thought of that word. I appreciate that. 

[Laughter.] 

Senator STABENOW. You are putting these in your office, I suppose? 

Chairman ROBERTS. No. You can do—with all due respect and 

with some degree of hesitancy, you can do with them what you 

would like. 

[Laughter.] 

Senator STABENOW. Well, thank you. I have a place of honor. 

Chairman ROBERTS. We would also be deficient if we did not 

state a well-deserved thank you to our Appropriations Chairman 

and my friend, Chairman Cochran, for leading the loyal minority 

side of this Committee over the past two years. Agriculture is certainly fortunate to have an Appropriations Chairman with such experience and a knowledge of the challenges facing our producers, 

and so we want to thank Thad as well. 

I am both humbled and honored to serve as your Chairman, the 

first modern history, I am told, to have held the gavel for this illustrious Committee in both the House and the Senate. 

The Agriculture Committee has a long history of caring more 

about the issues than the ideology, more about the people than the 

3 

party. It is in this spirit of service that I will guide our Committee’s work with three principles in mind. 

The first is that this Committee will be the platform for America’s farmers, ranchers, small businesses and rural communities, 

school children and the hungry, to raise their concerns. Too often 

I have heard from my constituents that they feel ruled and not governed. We will work to ensure that the voices of our constituents 

are heard by their government. We will be their champion. 

Second, in this Committee we will conduct thorough and vigorous 

oversight of the activities of the departments and agency within 

our jurisdiction and those that impact our constituents. It is our responsibility to ensure that our government operates efficiently, effectively, and in a responsible manner to our taxpayers. 

Finally, this Committee will conduct its legislative business in an 

open and transparent way that provides our members opportunities 

to work across the aisle for the betterment of our constituents. 

As we look around this Committee, we see a wealth of experience 

in former and current chairs of not only our Committee but others 

in the Senate as well as a welcome infusion of new blood. I welcome Senator David Perdue of Georgia, Senator Joni Ernst of Iowa, 

who will be introducing a witness, as along with David, and Senator Ben Sasse from Nebraska to the Committee, and Thom Tillis 

also, from North Carolina. 

I have met with each of these members. We have gone over their 

priorities. I am excited about the fresh ideas and the enthusiasm 

that they will bring to our challenges. 

We have a great challenge ahead of us in this Congress, but I 

am confident, with all of your help, we will succeed. 

Now today’s hearing is a little unique and a little special. Not 

only are we beginning our work in this new Congress, but we are 

also going about things just a little differently. Today, we will conduct our first oversight hearing of the one-year-old Farm Bill by 

hearing from farmers, i.e., producers, first, then the administration. 

It is my hope that our witnesses will be able to bring forward 

testimony of their challenges and successes of the new Farm Bill 

and that then we and the Secretary will work to address the challenges raised by our four witnesses and by others who have 

reached out to our Committee members. 

We want to especially thank Secretary Vilsack for his willingness 

to try something new today. I believe this hearing will send a 

strong message to America’s farmers and ranchers that their government is listening to them and that we can, and will, work together on their behalf. 

Finally, today’s third panel includes two nominees to serve on 

the Board of the Farm Credit Administration. I will have more to 

say about them and the FCA later, but I welcome Mr. Hall and Mr. 

Tonsager and their families to this Committee. 

With that, I will recognize our Chairwoman Emeritus, Senator 

Stabenow, for any remarks that she might want to make. 

4 

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

FROM THE STATE OF MICHIGAN 

Senator STABENOW. Well, thank you very much, Chairman Roberts. First of all, thank you for your graciousness this morning and 

for the willingness to allow me to have the gavel from this last session where we worked together so closely in putting together the 

Farm Bill. 

Let me stress again that you really do deserve special congratulations for becoming the first person to chair both the Senate and 

the House Agriculture Committees. You are a champion for farmers and ranchers in your state. The people of your state, they are 

lucky to have you sitting in that seat. 

We actually began our partnership officially four years ago with 

your visiting East Lansing, the home of Michigan State University, 

my alma mater. 

Senator Roberts was willing to wear green and white at that 

time. I then reciprocated in Wichita, Kansas, and wore purple. 

I notice you are wearing purple this morning. 

I had an opportunity to see firsthand the great admiration— 

Chairman ROBERTS. Would you yield on that point? 

Senator STABENOW. Yes, I would be happy to. 

Chairman ROBERTS. Kansas State, 70. KU, 63. 

Senator STABENOW. Yes. 

[Laughter.] 

Senator STABENOW. I did learn the avid sports fan that you are 

in constantly giving me the standings as we went through. 

Chairman ROBERTS. Go Spartans! 

Senator STABENOW. Go Spartans! Yes, that is right. 

So we have a long history of working together for our farmer and 

ranchers and our school children and our families, and I look forward to continuing that. 

One of the things that has been very special about this Committee is that we have made it a bipartisan Committee, and I think 

that has served us well in getting things done. 

So I want to welcome our new members as well. We are glad to 

have you as part of the team. We have got a lot to do. 

In fact, the 2014 Farm Bill was a triumph of bipartisan collaboration, and we have an amazing coalition of folks that came together—farmers, ranchers, families, researchers, folks in the bioenergy sector. We had people from all over the country that came 

together, and I think that is why we got this done. 

It is really important that we keep that coalition together if we 

are going to move forward, supporting agriculture. 

I want to thank our witnesses for attending this important hearing and talk more about our Michigan witness a little bit later. 

I also want to thank Secretary Vilsack and his excellent staff at 

the USDA for implementing the Farm Bill. There has been some 

very, very important work—a lot of work as we know, it takes a 

lot of work to put together the implementation. 

I appreciate their willingness to work as hard and fast as they 

are. 

I would just underscore last week, Mr. Chairman, I was in Michigan with our farmers and conservationists, announcing the regional partnership program we put together on conservation. 

5 

I think one of the areas we should be very proud of is that we 

really streamlined conservation. You and I together, and others, 

cut down the number of programs, cut down the paperwork, cut 

down the duplication, and have rolled out something that is very 

grassroots, called the Regional Conservation Partnership Program. 

Rather than top-down, it is about communities making decisions 

and then us supporting them. 

Let me also just say again—we have said so many times, but— 

the agriculture bill, the Farm Bill, is food policy, conservation, energy policy, security, and it is all about jobs. I am proud of the fact 

that we did that while actually cutting $23 billion, eliminating duplication, consolidating more than 100 programs. 

I say that, Mr. Chairman, because we voluntarily cut our budget 

more than sequestration. As a member of the Budget Committee, 

I intend to remind our Budget Committee of that; we gave at the 

office. 

We have a five-year bill. We have really important long-term stability. I mean, it is amazing, but five years around here is long 

term. Our farmers and ranchers and families and communities 

need that. 

So I was really pleased to see there is a group of, I think, close 

to 400, is it? Just under 400 different groups that supported the 

Farm Bill that have just put out a letter saying to the Budget Committee, do not reopen the Farm Bill that we have already put in 

place and made tough decisions. We made tough decisions together. 

Let me finally just say I know we have important work ahead 

of us on child nutrition, on the Commodity Exchange Act, on looking at new markets including Cuba, which the Chairman knows 

that I am excited about. 

I look forward to working with you in the same bipartisan spirit 

that we always have in the Committee, and I really believe that 

we can set the example on this Committee, as we have, for how 

folks can work together and get things done. 

So, thank you. 

Chairman ROBERTS. Thank you, Senator. 

We will move to opening statements of our witnesses. Then members will have five minutes for comments and questions. Members 

may submit opening statements in writing for the record. 

Today, I am very happy to introduce to the Committee, Mr. Rich 

Felts from Montgomery County, Kansas. Rich and family farm in 

the southeastern part of the state, where they primarily grow 

wheat, corn, and soybeans, as well as raise hogs and cattle. 

As the president of the largest agricultural organization in Kansas, and a K–State graduate, I look forward to Rich’s testimony 

and insight. 

You may begin, sir. 

STATEMENT OF RICH FELTS, WHEAT, CORN, SOYBEAN, AND 

LIVESTOCK PRODUCER, LIBERTY, KANSAS 

Mr. FELTS. Thank you, Chairman Roberts, Ranking Member Stabenow, and members of this Committee. 

You know, I am here today also as first-term president of the 

largest ag organization in the State of Kansas, Kansas Farm Bureau, and I must say to our 40,000 members in our organization, 

6 

Chairman Roberts has been a steadfast advocate for the farmers in 

our area that have to endure much of the wrath of Mother Nature. 

Without question, crop insurance has been the cornerstone of the 

safety net for Kansas producers over the past decade. In a highrisk industry, the survivability revolves around droughts, floods, 

freezes, high winds, pests. Financial protection is a necessity. 

In the 2014 Farm Bill it amended back the life of the Livestock 

Forage Program, and with this latest sign-up we had 62,000 farmers and ranchers sign up for assistance under this program. 

If it were not for the Federal Crop Insurance and the Livestock 

Forage Program, it is possible that Kansas farmers, ranchers, and 

businesses could be in jeopardy today. 

But, as a farmer, we realize from year to year the risk we face 

and we recognize the losses we have had. In 2007, we endured a 

spring freeze that destroyed a wheat crop. In July, we had a flood 

that decimated our fall crops. Without crop insurance, we would 

have been in serious jeopardy. 

But I also know that we have great years from time to time that 

we recognize as well. 

But whether we have the lack of yield or the lack of revenue, 

crop insurance is of the utmost importance to us. 

I can assure you, from my farming experiences, I never enjoy 

calling a crop insurance agent because I know when I have called 

him I have suffered a loss that I do not appreciate. 

What I also know is by paying premiums it allows me to sleep 

at night, knowing if I have managed my business in a proper manner I can still get a good night’s sleep even if Mother Nature does 

share its wrath upon us. 

But let me turn my attention also to the other components of the 

Farm Bill. This is a very complex Farm Bill. We have had the fortune in Kansas to have FSA, K-State Extension and Farm Bureau 

putting together over 200 educational events to help us address the 

Title I programs within this Farm Bill. 

This past Thursday I had my opportunity to go to my county 

FSA office, and I want to say that I am appreciative of the fact that 

we do have the opportunity to update our base acres and our 

yields. 

But also, in doing this, I did procrastinate a little bit, like many. 

I relallocated my acres. I updated my yields. But I still did not 

make my determination as to whether I wanted to participate in 

ARC or PLC. 

But I took the opportunity to ask the young lady that is our 

county director, what are people doing? 

She says, I have not seen very many landlords. Most of the participants that have been coming in are the tenants that are making 

the decision and having the landowner sign. 

Also, she said that time is going to be an issue, with the number 

of people that they have to come in and get registered, it was not 

going to happen within the time frame that they have had. 

We have run into glitches in Kansas, a couple minor issues basically dealing with cover crops. 

In those crops, we have had the ones where you had a cover crop 

but then you come back and plant a covered commodity crop, corn 

7 

particularly. That was not being recognized, and the administration is presently working on that. 

Another issue that we have had is vegetable crops that are planted as a cover crop that are not planted to be harvested. We have 

to have the FSA come to the field and certify that those crops— 

by paying a fee, certify that those crops were not harvested. 

But just as important not under the jurisdiction of this Committee, farmers and ranchers all across the country have to deal 

with a magnitude of weather events as well as burdensome intrusion from other government entities. 

I grew up believing that USDA was a people’s department, and 

I can truly say that has been the case. 

In closing, I would like to say that crop insurance is a critical 

tool for farmers. It is the only program that I have skin in the 

game. It protects us from catastrophic losses and precludes the 

need for unbudgeted ad hoc legislation that often takes Congress 

years to act upon and longer for USDA to pay out. Crop insurance 

is the cornerstone of our farm program from my perspective. 

We look to this Committee to provide some additional certainty 

as we go forward, and I appreciate the opportunity to be with you 

today. Thank you. 

[The prepared statement of Mr. Felts can be found on page 62 

in the appendix.] 

Chairman ROBERTS. Rich, thank you very much for your statement and thank you also for being on time. 

I would now like to ask Senator Perdue to introduce Mr. Ronnie 

Lee, a managing partner of Lee Farms family farming operation in 

Bronwood, Georgia. 

Senator PERDUE. Thank you, Mr. Chairman. 

I am delighted this morning to introduce a friend of mine, Mr. 

Ronnie Lee from Bronwood, Georgia. He is in South Georgia. 

Mr. Lee is a family farmer that currently raises cotton, corn, peanuts, small grains, hay, pecans—I will finish in a minute—cattle 

in Terrell, Lee, and Sumter Counties. He also owns and operates 

a cotton ginning and warehousing operation located in Bronwood 

and Albany. 

As I traveled across Georgia last year, I met with Mr. Lee and 

other Georgia farmers who are family farmers first, who lead our 

agriculture community. We need to draw on their wealth of knowledge and their experiences in the field. Their voice and concerns 

are critical as we discuss the importance of the Farm Bill and other 

agricultural issues that impact them directly. 

Ronnie, thank you for being here this morning and taking time 

to give us your insights. You are valuable to Georgia, and you are 

a valuable asset to our country. 

Thank you. 

STATEMENT OF RONNIE LEE, COTTON, PEANUT, WHEAT, 

CORN, SOYBEAN, PECAN, AND CATTLE PRODUCER, 

BRONWOOD, GEORGIA 

Mr. LEE. Chairman Roberts, Ranking Member Stabenow, members of the Committee, thank you for the opportunity to offer the 

views of the National Cotton Council and the Southern Peanut 

8 

Farmers Federation regarding implementation of the Agricultural 

Act of 2014. 

My family and I raise, as he said, cotton, peanuts, grains, pecans, 

hay and cattle in Bronwood, Georgia. 

We want to work with this Committee to ensure the Farm Bill 

and the Federal Crop Insurance Act are maintained. It is critical 

that the farm policy is designed and implemented to provide the 

sound foundation for production agriculture. 

While the goal of farm policy is not to completely remove the 

risks associated with farming, policy should strive to provide opportunities for effective risk management. 

The Stacked Income Protection Plan, or STAX, is designed to 

work in concert with other insurance products in order to provide 

an effective safety net for upland cotton producers. STAX establishes a level of protection based on coverage levels selected and 

purchased by producers and a commodity price determined by the 

future market. 

We strongly commend RMA for the tremendous work it has done 

to implement STAX in an efficient and timely manner, making the 

policy available for more than 99 percent of the cotton acres this 

year. 

For 2016, we intend to work with RMA in an effort to expand 

STAX to all counties with cotton production and provide additional 

flexibility by allowing STAX purchases to be completely independent for irrigated and non-irrigated practices. 

Congress has also included a new peanut revenue insurance program in the Farm Bill. We appreciate the great work by RMA to 

implement the policy for this year. 

We strongly support the crop insurance enhancements such as 

enterprise units and coverage levels by practice and the APH yield 

exclusion option that is especially needed in areas with multi-year 

drought conditions. So it was important that this provision was 

available this year. 

The marketing loan program remains a cornerstone of farm policy for the cotton industry. In the current low price situation for 

cotton, the marketing loan is an especially crucial tool for multiple 

segments of the industry to effectively market cotton and provide 

cash flow for producers. One of the hallmarks of the program is its 

function to ensure that cotton flows through marketing channels 

and encourages orderly marketing of the crop throughout the year. 

An impediment to the proper functioning of the marketing loan 

is the application of the payment limits of the 2014 Farm Bill. This 

has been one of the most challenging implementation issues. This 

is the first time a unified limit has applied to multiple programs, 

creating an extremely complex and challenging task for USDA to 

accurately and timely track marketing loan benefits to individual 

producers. 

Because producers market their crop and other crops through 

multiple marketing channels, such as co-ops, merchants, and direct 

marketing, the complexity of tracking these benefits is significant. 

For producers of multiple crops, the impact to payment limit will 

be harmful as a portion or all of a producer’s limit could be used 

for the marketing loan. 

9 

Peanut growers are pleased with the new PLC program, but with 

the expected ARC and PLC payments for the 2014 crops scheduled 

to be paid this fall, some producers could find themselves with either no limit left or only eligible to receive a portion of the payments. We are concerned about the long-term impact of marketing 

decisions as producers realize the impact of this unified payment 

limit. 

It is likely that some cotton will be placed in a marketing loan 

and forfeited to USDA rather than being forward contracted and 

actively marketed during the year. This could lead to cotton being 

locked in the loan, disrupting cotton flow to the market and to end 

users, leading to potentially greater government losses. 

We continue to urge USDA to utilize existing authorities to follow the intent of the marketing loan program, which is to minimize 

the forfeiture of commodities and encourage redemptions. We intend to continue working with USDA, and would urge the Committee to work with USDA as well, to find a workable solution to 

this issue. 

We appreciate the opportunity to provide these comments on the 

importance of maintaining the 2014 Farm Bill and the Federal 

Crop Insurance Act with no further budget reduction. It would be 

highly disruptive to make adverse policy changes and budget reductions at this time. 

Farm policy generally and cotton policy specifically, were substantially reformed and funding reduced in the 2014 Farm Bill. 

Changes will only undermine the foundation of risk management 

for production agriculture. 

Thank you, and I will be pleased to respond to questions. 

[The prepared statement of Mr. Lee can be found on page 71 in 

the appendix.] 

Chairman ROBERTS. Mr. Lee, thank you very much and especially for being on time. 

We are going to pause here just for a moment. Senator Ernst— 

and also speaking for Senator Grassley, which is always a tall 

order—will be introducing Mr. Mitchell, who has an outstanding 

record of service to agriculture. 

But, first, if there is a busy person in the room it has to be the 

distinguished Chairman of the Appropriations Committee. 

Senator Cochran, you were not here when I offered frankincense 

and myrrh and well-deserved comments. I wanted to thank you for 

not only being my friend, and colleague further, but for leading our 

loyal minority side of this Committee over the past two years. 

Agriculture has been certainly fortunate to have an appropriations chairman with such experience in, and knowledge of, the 

challenges facing our producers. In your home state, you have been 

a champion in that effort for many years. 

Thank you for your friendship and your leadership, sir. 

So I wanted that to be a part of the record when you were 

present. 

Our next witness will be introduced by Senator Ernst. 

Senator ERNST. Thank you, Mr. Chairman. 

First, I wanted to say how excited I am to be on this Committee. 

Thank you very much for that selection. 

10 

Having grown up on a farm in Iowa, I look forward to working 

with all of our colleagues on this Committee to improve critical agricultural programs for farmers and ranchers all across America. 

Today, we have begun that important process by having witnesses 

from a variety of regions testify regarding the implementation of 

last year’s Farm Bill. 

Today, I have the pleasure of introducing Mr. Clay Mitchell, who 

is a fifth-generation corn and soybean farmer from Tama County, 

which is just south of Waterloo, Iowa. His studies and techniques 

have driven innovation in many areas of farming, such as wireless 

farm networking, no-till farming, and grain storage automation. 

Mr. Mitchell is not only a farmer from Iowa, though. He has also 

participated in the World Economic Forum in Davos and is Managing Director of Fall Line Capital. 

On behalf of Senator Grassley and myself, I want to welcome you 

here today, Mr. Mitchell. It is always good to have an Iowan here 

in Washington, DC, and we look forward to your testimony. Thank 

you so much. 

STATEMENT OF CLAY MITCHELL, CORN AND SOYBEAN 

PRODUCER, BUCKINGHAM, IOWA 

Mr. MITCHELL. Thank you, Chairman Roberts, Ranking Member 

Stabenow, and members of the Committee. I appreciate that opportunity to share with you my experience on implementation of the 

Farm Bill. 

As I scramble to adjust to the crash in grain prices and titrate 

the costs on my farm, the implementation of the Farm Bill is providing critical stability to the policies that affect my operating and 

investment decisions. It also provides critical stability to conservation incentives that tip operations like mine into sustainable systems. 

I started farming full-time in 2000, when corn prices averaged 

below $2 per bushel and non-land farming costs were $200 per 

acre. 

During the subsequent commodity bubble, we had a 29-month 

run from 2011 to 2013 when corn prices averaged $6.50 a bushel 

and non-land farming costs were $500 to $600 per acre. 

Today, we have corn prices in the mid-$3 per bushel. We have 

2007 corn prices but 2013 costs. 

I concur with economists who predict that this year we will have 

the largest drop in farmer income since the Great Depression. 

I put great effort towards how I can reduce costs with these low 

grain prices. While we can, and we must, respond to changes in 

market demand, it is the sudden drops in revenue that hurt. 

In rural communities that depend on grain production, farmers 

are the shock absorbers of grain revenue volatility. Cash rents are 

extremely stable relative to commodity prices. We have seen in the 

past several years input prices that appear to have unhinged from 

grain prices. 

The Farm Bill gave us the opportunity to sign up for either the 

Price Loss Coverage or Agricultural Risk Coverage programs to 

help with revenue drops. To help with this program selection, extension agents, the Farm Service Agency, Farm Credit, and agriVerDate Nov 24 2008 10:13 Feb 11, 2016 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 C:\USERS\MW42035\DESKTOP\DOCS\96173.TXT MICAH
11 

cultural journalists put together many calculators, seminars, and 

articles. 

They helped me determine that the ARC program was better 

suited to my farm than PLC. When it came time to sign up, my 

local FSA office in Tama County was organized and courteous. 

I hear a lot of older farmers say they wish their Social Security 

office could operate as efficiently as the FSA office. 

Crop failures are less common on my farm than in most of the 

country. Even so, I spend 5 to 15 percent of my budget on crop insurance. While we have been farming in Iowa for 5 generations, we 

have been farming in the Americas for 13 generations. With a family like mine, with a long look, the once-in-a-lifetime crop loss is 

much too frequent to bet the farm. 

Because an entire crop investment can be lost, our downside case 

grows in direct proportion to the crop investment. In the absence 

of crop insurance, my cropping decisions would be so dominated by 

the chance of crop failure, however, rare, that I would be forced to 

trim my crop investment to suboptimal levels. 

The crop insurance that continues in the Farm Bill is more than 

a smoothing tool. It is an enabler for optimal cropping. 

The Risk Management Agency has been collecting big data on 

grain production before it became a fad in our industry. The RMA 

has a tremendous ability to study relationships between farming 

practices and yields. 

I am very excited that the RMA is beginning to recognize the importance of soil conservation on yields. As the RMA is newly seeking to study the relationship between sustainable practices and 

yield stability, I am hopeful that they will be able to underwrite 

actuarially sound advantages to practices like cover cropping. 

The Conservation Stewardship Program takes a complete conservation inventory of the farm and rewards the net aggregated 

conservation practices with a five-year contract with regular audits. 

I did my first five-year CSP contract in 2014 and have re-enrolled for 2015 to 2020. My farm has been in no-till for decades, 

but the CSP program was the enabler for me to adopt cover cropping. In Iowa, these two practices make the difference between losing several tons or more of soil per acre per year and holding and 

improving soil. 

Whereas most farmland in the world is in a constant state of decline, with these practices, a farm is like an oil well that never 

runs dry, productive in perpetuity. 

While we all value the many benefits of America’s wetlands, let 

us be clear that within farmed cropland an affirmative wetland determination and agricultural production value are at extreme crosspurposes. Not only do too wet soils cause grain yield to collapse, 

but they also impede timely operations in the whole field. Drainage 

is the improvement that has had, by far, the largest positive benefit on America’s farmland values. 

In drafting the Farm Bill, both houses of Congress considered the 

devastating effect that affirmative wetland determinations can 

have on farmland owners while at the same time considering the 

value the wetlands bring to our landscapes. By funding wetland 

banking and encouraging rules that allow a 1:1 wetland mitigation 

ratio, the Farm Bill is on track to a balanced solution. 

12 

As of today, we have fields pocked with small wetlands that are 

awaiting mitigation rules that are still being written. If the wishes 

of Congress are followed, we expect our grain yields and resource 

use efficiency to improve 30 percent, and at the same time, wetlands that are outside of cropping areas can flourish with diverse, 

native species. 

The social fabric of my community depends upon a polypoly of 

farmers that, in turn, requires beginning farmers to replace retiring farmers. In most of the programs we have discussed, the farm 

yield gives much needed preference to beginning farmers. 

Thank you for allowing me the opportunity to share my thoughts 

and for your commitment to farming families. 

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

78 in the appendix.] 

Chairman ROBERTS. Mr. Mitchell, thank you and thank you 

again for being on time. 

The distinguished Chairwoman Emeritus will now introduce the 

next witness. 

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

I appreciate hearing from all of you, and am very pleased to have 

Michael DeRuiter here, who is from Michigan. He is a third-generation farmer and co-owner of DeRuiter Farms, a cherry, apple, 

and peach farm in Hart, Michigan, where he lives with his wife, 

Amanda, and two-year-old son, Landon. 

He is currently an executive committee member of the Michigan 

Cherry Committee, a board member of the Cherry Marketing Institute and the Michigan Farm Bureau. 

We very much appreciate your being here and being part of the 

testimony today. Welcome. 

STATEMENT OF MICHAEL DERUITER, CHERRY, APPLE, AND 

PEACH PRODUCER, HART, MICHIGAN 

Mr. DERUITER. Thank you, Chairman Roberts and Ranking 

Member Stabenow for the kind introduction, and I thank the members of the Committee for the opportunity to testify here today. 

I am Michael DeRuiter, a fourth-generation fruit farmer from 

Hart, Michigan. My wife and I are raising what we hope to be the 

fourth generation on our farm. 

My brother, father, and I raise approximately 1,000 acres of tart 

cherries, apples, and peaches. In the summer, we also run a cherry 

processing facility. 

We also have neighbors who grow asparagus, squash, onions, 

pumpkins, and many other diverse specialty crops. 

I am pleased to be here today in support of the Committee’s work 

on the Farm Bill, which has made a big impact on my farm and 

farms across Michigan. There are many critical programs in the 

bill that help our industry, and I would like to focus on four—conservation, research, nutrition, and crop insurance. 

Farming in Western Michigan, with so much water all around 

us, conservation is an important consideration. For our farm to be 

economically viable for the next generation, we must think about 

sustainability, soil health, and integrated pest management programs on a daily basis. My family believes strongly that we need 

to leave our farm in better shape than when we started. To that 

13 

end, our farm is verified in the Michigan Agricultural Environmental Assurance Program, or MAEAP. 

MAEAP is an important voluntary program in Michigan that 

continues to grow, but it would not work without the NRCS programs that assist farmers with technical and financial assistance 

to build and pay for chemicals, containment storages, storage facilities, fueling pads, and other similar projects. 

NRCS today has a unique partnership today with state agencies 

and conservation districts to help farmers implement lasting conservation practices. 

Research is also vital to our farm and Michigan agriculture as 

a whole. New technology and programs to reduce pesticide use and 

enhance IMP are critical. Funding available through the Specialty 

Crop Research Initiative has helped us move all specialty crop research forward. 

I want to highlight one project, RosBREED 1, a $14 million program under the last Farm Bill that provided a research framework 

for apple, peach, cherry, blueberry, and strawberry industries to 

map the genome of Rosaceae. This project brought together breeders from all over the world to develop and identify genetic markers 

for fruit quality. 

That led to the RosBREED II project which was funded last year 

for another $10 million. RosBREED II will focus on cherry leaf spot 

and Armillaria, two key disease threat issues for the cherry industry. 

The Specialty Crop Research Initiative has been critical in promoting collaboration across state lines and around the world to address key researchable issues. There is no other funding source 

available right now to address these current issues. 

Michigan is also one of the eight states for a new school-food 

lunch pilot program exploring local sourcing. This is a very big deal 

for specialty crop growers. 

The pilot program will redefine how schools work with local 

farms, vendors, and shippers to decrease transportation costs. It 

will also allow government to streamline the buying process and 

get more locally grown fruits and vegetables into our schools. 

Our state is pleased to be a part of this pilot, providing flexibility 

while supporting local farmers and processors. 

I cannot leave this topic without talking about the bonus procurement from the USDA and how it helps farmers remove surplus 

product from the market and get in the hands of needy families. 

Specialty crop industries all over the nation have benefited tremendously from this project. 

Crop insurance for specialty crops is also vitally important. For 

several years in our area, you could buy crop insurance for apples 

and peaches but not cherries. In 2014, for the first time ever, a 

cherry insurance policy became available to all growers. While NAP 

is an important option for farmers, we need a broader risk management tool like crop insurance, which covers multiple perils beyond 

disasters. 

We purchased crop insurance last year, and while we had a nice 

crop, growers in Southwest Michigan suffered a wind storm on 

June 2nd that ruined most of their crops. Those growers are workVerDate Nov 24 2008 10:13 Feb 11, 2016 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 C:\USERS\MW42035\DESKTOP\DOCS\96173.TXT MICAH
14 

ing with their crop insurance adjusters to recuperate the damage 

from that storm. 

This is a good news story for cherry growers. As a young farmer, 

it is vital that there is support for programs like this. Specialty 

crops are high-value crops with high input expenses. We need programs to help mitigate the risks so young farmers do not go broke 

due to one adverse weather event. 

NAP is also important, and the new buy-up policy is a great tool 

for smaller farmers and noninsured crops. The policy implemented 

in the new Farm Bill provides better coverage for farmers and is 

a step in the right direction for those farms that do not have crop 

insurance today. 

The new Farm Bill has been an important tool for my farm and 

to the many diverse farms across Western Michigan. 

Thank you again for the opportunity to join you here today, and 

I would be happy to answer any questions you may have. 

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

59 in the appendix.] 

Chairman ROBERTS. Thank you very much and thank you for 

being on time. 

The order for members to understand will be I will have five 

minutes, Senator Stabenow, Senator Perdue, Senator Ernst, Senator Cochran, and Senator Tillis. 

Senator Bennet had a conflict and so did—let’s see. Ben, where 

are you? I think you have left. 

Then Senator Grassley, obviously, had a conflict. Senator Thune, 

as well. 

So I think we can proceed through this pretty quickly and then 

get the Secretary up here because I know his time is valuable. 

Thank you to all members of the panel for taking the time to 

share your personal experiences with the Farm Bill programs and 

the implementation so far. Your hands-on insight is extremely 

helpful as we work with the Department to make sure implementation is as smooth and predictable and farmer-friendly as possible. 

My first question is to our Kansan. 

Rich, given the complexity of the new programs and the decisions 

to update your base and yields, can you explain your decision-making process for working through the new programs and choices before you went into the local FSA office last week and how did your 

appointment go? 

Mr. FELTS. Thank you, Mr. Chairman. 

We appreciate the opportunity to be able to reallocate bases and 

update yields, to be a little more realistic to what we feel like are 

present-day production practices. In not all cases did we update 

those. There was an occasional crop on an occasional farm that we 

did not. 

But, because the technologies that we had, the way we farm, our 

cultural practices, there was a necessity to update some yields and 

bases. 

I think more complex, though, is when you look at trying to combine the Title I programs with the bases. Myself, I tried to separate 

that and looked at the reality of what we needed to do with our 

farm, not looking so much as to what the payment potentials were 

with the existing ARC and PLC program. 

15 

Chairman ROBERTS. I understand that you have not yet made a 

decision with regards to the PLC or the ARC program. Is that correct? 

Mr. FELTS. That is correct. I am unlike a lot of farmers; I think 

I am a procrastinator. 

We still have a little time, but also, I think there are some that 

are waiting to go as long as they can. I know you should not look 

at long term or in the short term but waiting to see if there might 

be some additional direction to these markets as we look at the 

first couple or three years into the program. 

Chairman ROBERTS. I was talking to an extension agent just this 

past week, who said to me that if he just had an hour and a half 

to talk to each individual farmer he thought he could talk them 

into the ARC program. The only problem is you have got hundreds 

of farmers to talk to. 

Do you think we need more time? 

Mr. FELTS. I do not know that we need time, but as I related in 

my testimony, the young lady in our county said they may have to 

have time because she just did not feel like they had a high enough 

percentage of producers stop in the office, to get everybody through 

in a timely manner. 

Chairman ROBERTS. Mr. Lee, as the Department works to continue implementing the Farm Bill in the second year of the fiveyear bill, how important is it for you to know the rules of the game, 

or the rules of the road, for the life of the Farm Bill? 

What advice would you give members of this Committee and all 

members of the Congress about making significant changes to the 

programs, in particular, crop insurance? 

The answer is to leave it alone. 

[Laughter.] 

Mr. LEE. Okay. It is very important. We need to know the rules, 

and for the life of the bill. We do not need rules changed along the 

way. 

This has been a different bill, as we all know, and a lot of times 

we do not know until we have gone through the first years to understand and know the impact and all. 

But the one thing that is different about this is we are making 

some changes for now, and we have got to make those decisions, 

and we do not know exactly what the outcome will be. 

But I think that, FSA has given us the tools to make some decisions, and it is a lot easier lately than I thought it would be to 

make those decisions. 

As far as crop insurance—and I do not know; I might have 

missed part of the question. Crop insurance is still a big, big issue 

for us, and this Farm Bill is all about crop insurance. 

So, in my area, we are very diverse as far as different crops. So 

we may have to choose one program for one crop and another program—PLC for peanuts, ARC for corn and grains. 

So we are still trying to figure it out. 

I do not know whether I answered, but that is where we are. 

Chairman ROBERTS. Well, I thank you, Mr. Lee. 

My time is almost up, and so I am going to yield to Senator Stabenow. 

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

16 

Let me just echo your sentiments in terms of again not opening 

up the Farm Bill. I cannot think of a riskier business than farming 

and ranching, where you have got to look at the weather and determine what is going on before you—as you are making decisions. 

The fact that we were able to do something that was more than 

six months or a year, that would at least give you five years of certainty, I think is really important, and it is important to keep that. 

I am anxious to see as we go forward with the ARC program and 

PLC, to see how that goes. We, in the Senate, had approached 

things differently originally in our bill with the ARC program in 

wanting to allow farmers, instead of making a choice, to be able to 

qualify for whatever you triggered in terms of losses and so on. But 

in the final bill, in negotiating with the House, we ended up yielding on that point to the House, where it is a choice. 

So that is the part of the Farm Bill that makes me the most 

nervous just in terms of the decision you have to make on a crystal 

ball five years down the road in that. So I am hopeful it is going 

to work out and anxious to hear more how it goes forward. 

I do want to talk a little bit more about crop insurance. 

Mr. DeRuiter talked about, for a moment, what we did in the 

Farm Bill as it relates to specialty crops because we did not have 

coverage for fruit and vegetable growers. Basically, about half the 

cash receipts to the country fall in this category of what we call 

specialty crops. 

Up until this last Farm Bill there was not an option of crop insurance in terms of managing your risk. The 2012 cherry crop was 

wiped out in Michigan because of an early thaw and then a freeze. 

I wonder if you might talk as a producer now a little bit more 

about how crop insurance has changed your ability to manage risk 

and for those around you the difference it has made because I 

know there is a lot more work to be done to get the policies out 

there. But I wonder if you might talk a little bit more about that. 

Mr. DERUITER. Sure. Absolutely. As the tart cherry just got a 

brand new insurance program, and it has been absolutely huge for 

our industry. 

The cherry industry is a relatively small industry, like many specialty crops. Crops like cherries have high levels of fixed expenses. 

In the past, when you had crop disasters, the options to cover 

your crops were extremely limited, to cover those routine farm 

maintenance issues such as mowing, pruning, fertilizing, disease 

and pest control, things of that nature, all of which need to happen 

even if you do not have a crop. This makes it especially difficult 

for young farmers who are already financially leveraged. 

This new crop insurance program for tart cherries has options for 

buy-up coverage so that growers can select the best appropriate 

level to their farm and the risk level that they can afford to take 

on their farm. 

Regardless—another point I would like to make is regardless of 

the business expertise or educational background or sound business 

decisions that you make, ultimately, it could be changed based on 

one adverse weather event. 

Also, this pilot program gives the cherry growers peace of mind. 

We are extremely fortunate to have this program 

Senator STABENOW. Thank you. 

17 

I wonder if you might talk a little more also from a market 

standpoint. You mentioned the school programs creating new opportunities for growers. I know it has created new opportunities for 

fruits and vegetables, for dairy, for others as well, beans, so on, 

and I wonder if you might talk a little bit more about the significance of that. 

Mr. DERUITER. Sure. Absolutely. You know, I think today’s youth 

are tomorrow’s consumers. If we can start them out young, I think 

they can carry it into their dietary program into adulthood, specifically, the cherries. Dried cherries is a great way for our industry 

to expose kids to a great product. 

The new pilot program allows many opportunities for our industries to deal directly with school lunch directors. I believe this program will open up opportunities for our kids to taste fresh fruits 

and vegetables. 

My family farm grows vegetables. My neighbors grow—or my 

family farm grows fruits. My neighbors grow vegetables. It is a 

great opportunity for us to work with you to truly expose our youth 

and our kids, our nation’s kids, to the healthy snacks and foods. 

I would like to point out lastly that I think this is a win-win program for everybody in that school lunch directors get more choices 

and can be more flexible in their purchasing program. The kids get 

exposed to fresh, locally grown produce. Ultimately, the taxpayers 

save money on transportation costs. So it is truly a win for everybody. 

Senator STABENOW. Thank you. 

Thanks, Mr. Chairman. 

Chairman ROBERTS. I am going to take the chairman’s prerogative in that the distinguished Senator has brought up the child nutrition program which we have to authorize. We are really looking 

at the implementation of the Farm Bill, but I want to let everybody 

know that we take this challenge very seriously. 

I am now eating a lot of school lunches in Kansas. I am very worried about small and very small schools having a lot of trouble with 

the regs, school nutritionists having a tough time keeping up, even 

losing the school lunch program, as well as the much larger districts that we have in Johnson County. 

Let me just say that I am not as enthusiastic perhaps about the 

servings. Maybe I need to be educated a little bit more. 

But we will do that, and we will take up that task. I appreciate 

the question. 

Senator STABENOW. Mr. Chairman, I would just say we would be 

happy to give you some great fresh fruits and vegetables from 

Michigan to help you feel better about yourself, in terms of your 

health. 

Chairman ROBERTS. Each and every day. 

Senator STABENOW. Yes. Exactly. 

[Laughter.] 

Chairman ROBERTS. For the entire panel, I would just like to ask 

this, and then we are going to recognize Senator Perdue. 

I apologize for taking his time. My time is my time. Your time 

is your time. 

I want to know from the panel, when you went into the FSA office to sign up for the livestock disaster assistance, if that was the 

18 

program you signed up for, base allocations, yield updates or the 

NAP program or PLC or ARC, what was the process like this year? 

Did you utilize any decision aids or attend any educational meetings to help with these decisions? 

Were you able to get appointments? 

Did the staff have enough knowledge and familiarity with the 

programs to actually help you? 

We will start in reverse order right over here. 

Mr. DERUITER. Sure. A lot of the programs that you mentioned 

we did not participate in. 

Traditionally, we have done NAP. I cannot comment on the new 

NAP because we purchase crop insurance on all of our crops. 

But that was a relatively easy process for us. We went through 

an external insurance officer or company, who offered us insurance, 

and the process went extremely smoothly for us, but I cannot comment specifically on some of the programs that you have mentioned. 

Chairman ROBERTS. I appreciate that. 

Mr. DERUITER. I am going to have to pass that on to the panel. 

Chairman ROBERTS. Mr. Mitchell, did you have any trouble at 

the FSA office? 

Mr. MITCHELL. Yeah, I updated most of my base acres and yields. 

The sign-up is done on a farm-number-by-farm-number basis. We 

have got a handful of farm numbers. On some of them we have 

signed up for the ARC program already. A few, we are still awaiting some landowner signatures on. 

But in our experience the FSA office had, at their fingertips, the 

information on the old base acres and the old yields and the new 

base acres to help that and make that really automated. I definitely got the sense that they were there to, help solve problems 

and answer questions. 

Chairman ROBERTS. I appreciate that. 

Mr. Lee. 

Mr. LEE. It was a lot easier than I thought it would be. The information that FSA and RMA, got together made it a lot easier to 

figure out which farms to update and which ones not to update because we have multiple farms. Some, we did not; we did not want 

to update. 

But I think it is going a lot better than I thought it would. I 

served on a FSA Committee for quite a while. So I am fairly 

pleased with what has been done. 

Chairman ROBERTS. I appreciate that. 

Mr. Felts. 

Mr. FELTS. I feel like this program here—there was more interest 

and more educational efforts than probably I have ever seen in trying to implement any major farm program. 

As far as the county goes, the personnel seemed like they were 

very much up to speed, very helpful, and had most of the basic information in front of them. 

Chairman ROBERTS. I know the Secretary will be very pleased to 

hear that. 

Senator Perdue. 

Senator PERDUE. Thank you, Mr. Chairman. 

19 

Mr. Lee, I know you are a diversified farmer, and I know that 

one of the hallmarks of the 2014 Farm Bill was to provide producers with greater flexibility in their farm policy and crop insurance options and determination. 

Elaborate just a little bit more on what additional flexibility in 

crop insurance would be beneficial to the cotton industry, specifically, since crop insurance has now become the centerpiece or risk 

management tool for the entire industry. 

Mr. LEE. Well, first of all, we need to maintain flexibility and especially in the STAX program with purchases by dryland and irrigated practices. 

I guess the crop insurance is all we have got in cotton. So, in this 

program, after having to deal with Brazil case and all, that is our 

delivery system. 

So we have got to work through this, and the STAX program, I 

think, will be a good program as long as we can maintain flexibility 

and all. 

Our biggest concern, with cotton is more the loan part of the— 

I know this is not your question, but the payment limit with a marketing loan gain is what is worrying us the most, obviously, because we have got to market the crop orderly. 

It is not just cotton. It is other commodities, too, such as peanuts. 

If we have low prices and marketing loan gains, we can be past our 

limit before we ever get to PLC and ARC and all the others. So we 

need to work really hard to try to correct that issue as best we can. 

Senator PERDUE. Thank you. 

Mr. Mitchell, we are going to have the Secretary here in a few 

minutes. 

How would you respond to him relative to your experience in this 

first pass through the system? 

What recommendations would you add right now as we are in 

this first year, in terms of how the USDA is approaching the new 

applicants, the questions you have, and the application process? 

Mr. MITCHELL. With regard to Title I, specifically? 

Senator PERDUE. Yes. 

Mr. MITCHELL. I think that process has been excellent. So, in 

terms of process, I would not have much for advice. 

In Iowa, we still have a lot of family farmers. By that, I mean 

farmers who own the crop that they are harvesting, farmers who 

own the cattle that they are feeding. Real family farmers really 

dominate the landscape of our state. 

As we look at rules and how we define the farmers and we look 

at payment limitations, it is, I think, very important for this program to recognize that it has the best effect when it recognizes, the 

advantages it gives to those farmers. 

Very large farmers have advantages that are given by the pri- vate sector, $50 to $100 advantage in pricing power that they have 

over the supply chain, that smaller farmers do not have. 

I think there are other ways that can be addressed in the future. 

I think presently in the Farm Bill and in Title I, and what it hopes 

to achieve, that is one opportunity to, in some way, level the playing field a little bit. 

Senator PERDUE. Mr. Chair, I yield my time. Thank you. 

Chairman ROBERTS. We have Senator Ernst. 

20 

Senator ERNST. Thank you, Mr. Chairman. 

A number of my colleagues have asked a lot of the questions that 

I had hoped to engage this morning about FSA and their efficiency—that sounds like it is going very well—about signing up for 

PLC and ARC, also about crop insurance. 

So I am going to jump ahead and direct my next question, or my 

first question really, to Clay, if he would please, and I am going 

to step outside of the Farm Bill a little bit. 

As required by law, the EPA, the Environmental Protection 

Agency, is required to release annual standards under the Renewable Fuels Standard. The EPA has failed to release the standards 

for 2014 and has already delayed the 2015 release. 

So, as you plan for the future, forming mid-term and long-term 

goals for your farming operation, how has the failure by the EPA 

to set these standards, how has that impacted your decision-making process with your farm operations and would you agree that 

this inaction has created some instability? 

Mr. MITCHELL. Yes, it has. It creates more uncertainty about the 

demand for corn. 

We sold our grain storage facility two years ago and have been 

considering building another facility. That is one of the major questions that we are facing on our farm that is heavily influenced by, 

will we be growing more corn, more soybeans, more seed crops. So 

getting some resolution that will be important for our planning. 

Senator ERNST. Fantastic. Thank you. 

Any other input maybe from Mr. Felts or Mr. Lee, with RFS, in 

regards to RFS? 

Mr. FELTS. I think my only comment would be is when we look 

at capping any demand I think that is a little disturbing, we would 

like to be able to capitalize on all the potential that there possibly 

is. 

Senator ERNST. Okay. I appreciate that. 

Mr. Lee, any thoughts? 

[No response.] 

Senator ERNST. Okay. I will go back to crop insurance then. 

In light of the administration’s proposal to reduce crop insurance 

premium subsidies by 10 percentage points for revenue coverage 

that provides protection for price movements at harvest time, do 

you have any thoughts on how this would impact your own operation in years to come? Any thoughts on that? 

Mr. LEE. It would impact our operation a lot. Subsidies are very 

important to us on crop insurance because it is an expensive part 

of our operation, to purchase crop insurance, and we do not need 

it to get so expensive we cannot afford it because it is all we have 

got. So I would hope that would not happen. 

I mean, we do not need any increases. 

Mr. MITCHELL. When I started farming, I remember the first 

land I rented was from my dad’s first cousin, Dennis, and he said 

to me, ‘‘Well, farming is a tough life, and you are not going to make 

a lot of money. Good luck.’’ And—which was an odd thing to hear 

from somebody renting farmland. 

I think when farming is done right, it is hard work. 

But this crop insurance is not a way to get rich. It is a matter 

of survival. Very small differences in the way that crop insurance 

21 

is supported make the difference for a lot of small family farmers, 

whether or not they survive. 

How many gravel roads do we look up and down where there 

used to be 20 farmers and now there are 2? 

Some of that is driven by technology up to a certain point, and 

then it is driven by other things after that. It is driven by pricing 

power that some people have or some aspects of the supply chain. 

It is driven by asymmetry between the upside and the downside in 

business size. 

Crop insurance is one of the key aspects of being able to help 

family farmers survive. 

Mr. LEE. Oh, can I make one comment? 

In our operation, we are about 80 percent irrigated. Some people 

say, ‘‘Why do you buy crop insurance?’’ 

Me and my sons talk about it, and we say ‘‘We have got to sleep 

at night, and we do not want to lose what we have built.’’ It is hard 

to write that check or have that expense, but we have got to do it. 

Mr. DERUITER. Mr. Chairman, if I may add a quick comment 

real briefly, I agree with the additional speakers. 

I would also like to throw in that in a day where our average 

farmer age is going up, we need a lot of new young farmers and 

beginner farmers. Just remember that they are financially 

strapped as far as cash flows. So just take that into consideration 

as well, please. 

Senator ERNST. Thank you, Mr. Chair. 

That is the number one comment that I have received from a 

number of small farmers out there—is that we keep this very, very 

important program. Thank you. 

Chairman ROBERTS. Well, thank you, Senator, and thank you to 

the panel for those comments. 

Senator Cochran. 

Senator COCHRAN. Mr. Chairman, I was just thinking back. 

Growing up in rural Mississippi, we had a lot of farmers, and many 

of them had interest in not just one crop like cotton or rice. Soybeans became popular, as I was growing up. 

But specialty crops were a big part of Mississippi’s agriculture. 

You think of Georgia as the peach state. We tried to grow peaches 

in Mississippi and with great success on many farms, and there are 

still a lot of producers there. 

When I go back home and somebody says, ‘‘What have you done 

for me lately,’’ what can I tell them that I have done for them? 

Specialty crop participants, are they getting a fair share of the 

investment risk-sharing that we are providing to other and much 

larger and much more abundant producers for other crops? 

Is there parity of some kind that we can point to? 

Mr. DERUITER. I do not know if you want me to get in too much 

detail as far as a fist-fighting match with the fellow panelists here, 

but I think in the last Farm Bill we have gained a lot of ground 

in regards to crop insurance and some programming. So, in that regards, we are very grateful. 

We do realize that a lot of the specialty crops are relatively small 

industries. So sometimes maybe the perception is we do not get a 

lot of attention, but I do look forward to the day where we get more 

specialty crops enrolled in crop insurance programs. 

22 

Senator COCHRAN. Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Tillis. 

Senator TILLIS. Thank you, Mr. Chairman, and on behalf of the 

farmers in North Carolina that produce about $80 billion in crops 

a year, I appreciate the opportunity to be on this Committee. 

Mr. Mitchell, you mentioned wetlands determinations made by 

the NRCS, and I am kind of curious. This would be for other panelists that may have the experience. 

I am kind of curious what your experience has been between the 

wetlands determinations coming out of the USDA through NRCS 

and your experience with the Army Corps of Engineers or EPA. 

I tend to have—I have farmers now who, oddly enough, seem to 

be having a positive experience with the Army Corps of Engineers, 

still trying to work through on the other side, and they have the 

joint determination. Can you give me some sense of how that is 

working or things we should look up or provide clarity or make 

that easier? 

Mr. MITCHELL. Yeah. The determinations are done on a countyby-county basis by NRCS, and so the experience is highly idiosyncratic to who the particular official is making the determination. 

Just to try to create some more neutrality in that process, now the 

NRCS official is supposed to be from a different county. 

There can be some very, very long waits to get a determination 

made. In some cases, we have had, three or four months to be able 

to get an official to take a look. 

Generally, our experience with the NRCS is that the folks have 

a good understanding of both the wetland value and the agricultural production issues. That is something that DNR or Army 

Corps of Engineers may not really understand—kind of the big picture and how that wetland fits into the farm. 

Some of the wetlands that we are discussing are the basically 

damp areas in the field that there is no more wildlife than any 

other part of the field. There is hardly a net benefit like we would 

expect out of wetlands that are in border areas. 

Senator TILLIS. Mr. Lee. 

Mr. LEE. I might take this opportunity to make this statement 

about NRCS. What has happened with NRCS in our part of the 

country is the field guys are having to spend so much of their time 

with administrative work; they do not have time to do what we 

need them to do. I mean, we have got 1 engineer in like 20 counties. 

I think that the FSA should be doing more, some of that administrative work, just like the CRP. For CRP, FSA did the administrative work. NRCS and the forestry did the work on the ground. 

So I am getting away maybe a little bit from what you are talking about, but we have to wait to get determinations because they 

do not have the time to be in the field. 

Senator TILLIS. Another question. I think I have inferred from 

the opening comments and some of the answers to other members’ 

questions that, generally speaking, you believe the 2014 Farm Bill 

needs to play itself out and the need to better understand it and 

not really look for Congress to add more uncertainty to it, maybe 

some tweaks or adjustments, but fundamentally run with this for 

23 

a couple of years so you can sort it out and run your operations 

under the new guidelines. Is that correct? 

Anybody here want to open it up and start over? 

Mr. DERUITER. Sure. I do not mind starting it. 

Chairman ROBERTS. Count me in on that one. 

[Laughter.] 

Mr. DERUITER. I think part of the concerns that the Chairman 

raised earlier in regards to the new food pilot program that we 

have with our school system; I think that is one that definitely 

needs to play out for a while so we can see the impacts that program has. So I share the same concerns that the Chairman has in 

regards to that program. 

Senator TILLIS. I was going to close with that. I also share the 

Chairman’s concerns and look forward to pursuing that. 

But thank you for your time and best of luck in what I think is 

one of the most courageous occupations somebody can take up. 

Thank you. 

Chairman ROBERTS. Well, thank you to our first panel and for 

bringing forward your thoughts and experiences on the new Farm 

Bill. 

The Committee appreciates your taking the time to travel here 

to Washington on one of our coldest days of the year. Hopefully, it 

will be warmer in your state. I have doubts about that, with the 

exception of Mr. Lee perhaps. 

But we will excuse the Panel 1 and welcome the distinguished 

Secretary of Agriculture, Tom Vilsack, as our next guest. 

Thank you, Panel. 

Mr. Secretary, are you all situated. 

Secretary VILSACK. Yes, sir. 

Chairman ROBERTS. It is my distinct pleasure to introduce our 

next guest, our 30th Agriculture Secretary, Secretary Tom Vilsack. 

Secretary Vilsack, from the great and especially popular, budding 

national center for politicians of all stripes and shapes and sizes, 

the State of Iowa, recently surpassed Kansas as native Agriculture 

Secretary and my good friend, Dan Glickman, in the length of his 

service as the nation’s top aggie. Not only is Secretary Vilsack now 

the second longest serving Ag Secretary, but he is also a former 

governor, state senator and mayor. 

Mr. Secretary, welcome back. I thank you for taking time out of 

your valuable schedule to come here and to testify and to visit with 

us. 

It was good to see you in Kansas last week. We were at the 

Intermodal Center at Edgerton, Kansas, which is rather an astounding center to witness, and we talked at long length about the 

dangers of the port strike and how it is costing us billions a day. 

Thank you for your untiring efforts to try to solve this problem. 

I think you whispered in the Secretary of Labor’s ear. He probably 

repeated your strong comments, and we were able to see that concluded. 

We would sure like to see that put together so it does not happen 

every five years, and I know you share that feeling. 

Thank you for your leadership. 

Thank you for joining us today, for letting us hear directly from 

producers first on the implementation of the Farm Bill. 

24 

From their testimony, they have indicated very strongly that you 

and your team at the USDA have been very busy over the past 

year, and I hope that their conversation so far has been helpful to 

the Department as it has been to the Committee. 

We look forward to our discussion today and recognize you for 

your opening statement, sir. 

STATEMENT OF THE HONORABLE TOM VILSACK, SECRETARY, 

U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, DC 

Secretary VILSACK. Mr. Chairman, thank you very much, and to 

the Committee members for this opportunity to speak to you about 

implementation of the Farm Bill, obviously, an extraordinary piece 

of legislation that was passed and signed last year. 

Let me say, Mr. Chairman, that oftentimes I hear in the countryside how Washington is broken and things are not getting done. 

Honestly, I am not sure those folks know that the work of the Agriculture Committees in both the House and the Senate certainly 

belie that notion. Certainly I think the hardworking people at 

USDA, in the implementation of this Farm Bill, also belie that notion. 

I am going to give you a really quick rundown of what we have 

been doing in the last year since the bill was signed and then look 

forward to your questions. 

It starts with disaster assistance. As it was extremely important 

for us to get this bill passed because for far too long livestock producers had to wait for the assistance they needed in the light of 

drought and floods and other natural disasters. 

To date, over 580,000 payments have been made to producers 

across the country under the disaster assistance programs. Nearly 

$4.9 billion of assistance and relief has been provided since the 

signing of the bill. 

We have conducted nearly 4,900 outreach efforts to producers. 

We have seen 176,000 uses of the computer models that we have 

established for producers to determine whether ARC or PLC is in 

their best interest. We recently sent out 2,984,789 postcards reminding folks of the sign-up dates that are coming very quickly, 

both in terms of reallocating base acres and yields as well as the 

ARC and PLC sign-up. 

We are pleased with the fact that 902,866 farms have exercised 

the right to amend their yields and to reallocate base acres, that 

over 430,000 producers have already made the election between 

ARC and PLC, and we fully expect over the course of the next 

month that those numbers will, obviously, significantly increase. 

Twenty-three thousand dairy producers signed up for the Dairy 

Margin Protection Program. That represents over 50 percent of all 

dairy producers. Fifty-five percent of that number signed up for extended coverage. As dairy prices are falling a bit, I think those who 

purchased the $8 coverage are probably going to be very happy at 

the end of the year that they have that coverage in place. 

Our crop insurance folks at RMA have been very busy. The supplemental crop insurance option has been extended to major commodity crops. The goal is to have 40 crops covered by the crop year 

2016. 

25 

The STAX program is in place. Over $500 million has been paid 

out under the Cotton Assistance Transition Program. Organic price 

selection has been made available to four crops, and it will be extended to 20 crops this year. We have changed the important 

changes to NAP and extended opportunities for coverage there. 

On the credit side, we increased the micro loan program, as in- structed by Congress, to $50,000. We have had over 10,000 micro 

loans. It is a very popular program. We have also extended new 

credit opportunities for beginning producers. 

Conservation, as you well know; 115 conservation projects were 

qualified under the Regional Conservation Partnership Program— 

a very successful implementation of that effort. Certainly appreciate the willingness of Congress to give us that option to encourage greater leverage of conservation dollars. 

On the forestry title, stewardship contracting is back in business. 

We have identified 45 million acres that will receive specialized attention based on pest and disease issues. The Good Neighbor Authority has been extended to all 50 states. 

We are excited about the opportunities in research with the new 

research foundation that has been funded and established. The 

board has met, a strategic plan has been developed, and we anticipate some research projects actually being funded sometime in calendar year 2015. 

On local and regional food systems, we have implemented the 

Farmers Market Promotion Extension as well as the Local Food 

Promotion Program. We have funded 374 projects as a result of 

those programs since the signing of the Farm Bill. 

In SNAP we are now evaluating 42 applications for our Supplemental Nutrition Assistance Program in terms of employment and 

training, some very innovative and creative ways to try to reduce 

the SNAP numbers by finding work for able-bodied individuals. 

The land-grant university in Ohio, the military liaison has been 

appointed, and we have already issued over 100,000 receipts for 

service as instructed by the Congress. 

Mr. Chairman, I believe that we have worked hard in this last 

year. There are still things to be done, but I am very proud of the 

work that has been done, and I look forward to the questions from 

the Committee. 

[The prepared statement of Secretary Vilsack can be found on 

page 84 in the appendix.] 

Chairman ROBERTS. We thank you, Mr. Secretary, and thank you 

for that brief but very comprehensive statement. 

Rich Felts from Kansas mentioned there has been a technical 

issue at FSA regarding base allocations and cover crops, and I understand it is a concern shared by farmers in other states as well. 

Do you have an update on when the software will be fixed? 

How is the FSA working with producers that have these types 

of issues? 

Secretary VILSACK. The software has been fixed, Mr. Chairman, 

and we are basically allowing folks to enter their name on the registry, which will ensure that they are in compliance with whatever 

deadline they need to meet. So there should not be any interruption or disruption of service as a result of that software glitch, in 

terms of reporting. But the software matter has been corrected. 

26 

Chairman ROBERTS. Well, let the record show that our witness 

has testified to a problem, we responded, and you responded and 

got the job done. 

In your eyes, our first panel probably should be a model. They 

did not wait until this Friday to go to the FSA office to make their 

base and yield decisions, but I know that most FSA offices are likely swamped right now with producers who are trying to make appointments right before the deadline. 

In the past year, the FSA has handled deadlines differently 

among programs. For example, while the sign-ups for the new 

dairy programs were extended three times, livestock producers trying to sign up for livestock disaster programs were put on a register. Obviously, Congress played a big role in that. 

Am I correct in understanding you are not planning on extending 

the deadlines? 

I know that the Department has already sent guidance to the 

states regarding the registry process. But can you explain to the 

Committee what this process will look for the base and yield updates as well as the programs election deadlines at the end of 

March? 

Secretary VILSACK. Mr. Chairman, I think it is incumbent upon 

us to continue to monitor the situation. I get initially weekly, and 

now I will be getting daily, updates on the percentage and number 

of folks who have signed up. We have a general sense of how far 

we have come and how far we have yet to go. 

Obviously, the intent here is not to make it more difficult for producers to comply. So we will be very attentive to the percentage of 

producers that have signed up. 

The registry is a vehicle that we can use to allow farmers to basically comply. If all the Ts and Is are not crossed and dotted before 

February 28th, if they are on the registry, which should be no problem. They could obviously then cross the Ts and dot the Is after 

February 28th. 

But we will monitor the situation, and as we have been flexible 

in the past we will be flexible in the future. 

Chairman ROBERTS. Mr. Secretary, as the producers on the first 

panel expressed over and over again crop insurance is the cornerstone of the farmers’ risk management tool kit. I emphasize that 

producers only receive a payment if they pay a premium and experience a certifiable loss. 

This Farm Bill contains a trend I view as positive. Crop insurance is an available tool for more producers in more regions and 

covering more crops. 

As the Risk Management Agency, RMA, works to implement the 

new programs, i.e., STAX and SCO, and add other policy changes, 

would you agree that expanded coverage to more producers, especially those that have no other risk management tools, is a positive 

trend? 

What is the administration doing to ensure that crop insurance 

continues to be a viable and available tool for farmers? 

Secretary VILSACK. Mr. Chairman, we certainly agree that the 

cornerstone of the safety net program is, in fact, crop insurance. I 

am proud of the efforts at RMA to extend significantly the number 

of policies that are written and the number of crops that are covVerDate Nov 24 2008 10:13 Feb 11, 2016 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 C:\USERS\MW42035\DESKTOP\DOCS\96173.TXT MICAH
27 

ered. The last time I checked it was well over 350 crops that actually now have crop insurance protection. 

As I indicated, we will continue to expand those protections, particularly in the specialty crop area, as we get sufficient and accurate data, to ensure that whatever we do is actuarially sound. But 

there is a real desire on the part of RMA to continue to find ways 

to make it happen, if you will. 

I am pleased with the fact that we have had a net increase in 

the number of companies writing crop insurance in the last 12 to 

24 months. We have lost a couple, but we have gained four so that 

the net is two. So I think it is an indication that this is still an 

industry that can continue to expand appropriately and financially. 

We expect and anticipate roughly $8 billion-plus to be invested 

by taxpayers in this system over the course of the next several 

years, and the payouts in the last time since I have been Secretary 

equal $55 billion. So it is obviously an important program. 

Chairman ROBERTS. Well, it is terribly important for Kansas in 

that we had a three-year drought. Hopefully, Mother Nature has 

changed her mind. 

I am pleased to hear that over—we only have five seconds left, 

but I am going to try to get this in. I apologize to other members. 

Thirty states have submitted proposals for the SNAP work pilots, 

with only ten projects authorized. Will the Department work with 

states that are not awarded a pilot to find ways they can engage 

in innovative ways to help people get back to work? 

Secretary VILSACK. The answer is yes. 

I think the key here is understanding that many states do not 

take full advantage of the employment and training resources that 

they have. Many states do not take advantage of the 50–50 money 

that is available. There are literally millions of dollars on the table, 

Mr. Chairman, that states are not using. We will certainly encourage them to consider using that option if they are not successful 

in the pilot program. 

Chairman ROBERTS. I have a question on conservation compliance. I am going to submit that for the record, and I turn to Senator Stabenow. 

Senator STABENOW. Well, thank you very much, Mr. Chairman. 

Welcome, Mr. Secretary, and first, thank you for the speed and 

effectiveness on implementing the Farm Bill. We put a lot on your 

plate, and your team has been working very, very hard. 

We heard on the first panel about the importance of expanding 

crop insurance to new areas, specialty crops, and so on. I appreciate the fact that you are moving as quickly as you are and also 

with the Regional Conservation Partnerships and the new way we 

are looking at conservation. 

Let me talk about conservation for a moment because as we have 

reorganized and worked with the Department there have been very 

positive things happening. We have over 100 different partners in 

Michigan alone—local communities, businesses, farmers—as working together to preserve our water around our Great Lakes. 

I am very concerned about the budget this year and the fact that 

the administration requested over $400 million in mandatory funding cuts for conservation programs and particularly in light of evVerDate Nov 24 2008 10:13 Feb 11, 2016 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 C:\USERS\MW42035\DESKTOP\DOCS\96173.TXT MICAH
28 

erything that we are doing and the fact that we reorganized. We 

saved money in the programs on the front end. 

But the cut particularly for the Conservation Stewardship Program, really affects our baseline in conservation going forward and 

will make it more difficult to do the things we want to do as we 

write another Farm Bill, which I hate to even say. Write another 

Farm Bill; it makes my blood pressure go up. 

But I am very concerned about maintaining a strong baseline, 

and I am very, very concerned about what was proposed. So I wonder if you might talk about that. 

Secretary VILSACK. Well, first of all, Senator, let me indicate that 

with the President’s budget 20 million additional acres will be 

added to the record number of acres that are enrolled in conservation practices today. Well over 400 million acres are enrolled in 

conservation. We have over 600,000 producers and landowners involved in conservation. Those are record numbers. 

Part of the challenge, however, is making sure that we right-size 

the amount of work that NRCS can do with the resources that are 

available. 

I am troubled by the fact that during the course of my time as 

Secretary we have not been able to get a clean audit from NRCS, 

in large part, because the paperwork that needed to be done to 

verify the integrity work was not getting done in a proper way. We 

are making significant changes in how we do that so that we can 

assure taxpayers the resources are being spent properly. So it is 

important to right-size the amount of work with the number of 

workers. 

We have had tough budgets in the last couple of years. The operating budget that I am dealing with is less than it was when I 

came into office. 

Senator STABENOW. Right. 

Secretary VILSACK. The reality is that has reflected itself in staff 

reductions in a number of departments, including NRCS. 

Senator STABENOW. I understand that, and as I have been an advocate for your Department. 

I just want to go on record saying in the area of conservation I 

am very concerned about anything, or anything in the budget, that 

undermines baseline going forward. I think that is a real concern. 

I do want—you have already spoken about the work pilot programs. I think it is significant that we did focus on work and that 

you are implementing those pilots, and I think that is very, very 

important as we go forward with the SNAP program. 

Let me ask you also about research. We put together the new 

Foundation for Food and Agricultural Research. I am wondering 

what the USDA’s current focus is in terms of accepting applications, moving funding awards forward, and so on. Where are we on 

the new research foundation? 

Secretary VILSACK. The 15-member board has been set up. The 

foundation has been incorporated. The tax exempt status application has been filed. The board has had two full meetings; the last 

meeting of which was with the Boston Consulting Group that went 

through a strategic planning process. Two hundred million dollars 

has been invested, and the board is now in the process of a search 

for an executive director to operate the foundation. 

29 

I anticipate and expect, by virtue of the good work that we have 

done to date, that we will begin seeing decisions relative to research sometime during calendar year 2015. That is, I think, the 

goal for the board. 

They have been very active and very engaged, and I would anticipate and expect that they will do a terrific job of amplifying, of 

supplementing the good research that is being done at USDA and 

through NIFA. 

Senator STABENOW. Finally, Mr. Chairman, one of the things I 

am concerned about is that we are hearing that the USDA feels 

constrained when defining actively engaged on a farm. I know this 

is a very challenging issue going forward, but I just want to clarify 

that the lead negotiators, those of us in the House and the Senate, 

understood the existing authority and discretion of the Department 

and want to work with you on this. 

When we look at the fact that CBO is estimating that the PLC 

and marketing loan programs could pay out as much as $16 billion 

more than we anticipated, it is very important we have accountability and those go actually to those who are farming. So it is very 

important. 

I would just urge you that in our bill—nothing in the Farm Bill 

is preventing the USDA from exercising existing authorities or discretion to make the definition as clear and strong as possible. I 

think for the effectiveness and the integrity of the programs it is 

really important that the Department move forward on this, and 

I look forward to working with you on that. 

Secretary VILSACK. May I respond, Mr. Chairman? I know the 

time is up. 

[No response.] 

Secretary VILSACK. The way in which the Farm Bill was drafted 

strongly suggests that whatever we do does not specifically apply 

directly to family farming operations. 

Also, with reference to family farm corporations, the limitation of 

one management exemption applies. 

So what we are focusing are on the general partnerships and limited partnerships that have often been the source of concerns, and 

that is where our jurisdiction, I think, is relative to actively engaged, and that is what we are focused on. 

We will definitely come up with, hopefully, a more concrete and 

more specific definition so that folks understand precisely what applies and what does not apply. But I think it is important to point 

out that it is primarily focused on partnerships—limited and general partnerships. 

Senator STABENOW. Well, I just want to stress that you do have 

the authority, and I appreciate and hope that you are going to 

move forward to use the authority you have. 

So, thank you. 

Chairman ROBERTS. Tom, I think it is exceedingly important that 

you work with the Committee on this, and I know you will, and 

keep us posted. We do not want a situation that sounds pretty good 

and then the law of unintended effects happens and then we have 

to fix it and we get into a technical correction. 

30 

We do not need technical corrections as opposed to administrative fixes, and we have already talked about that before when you 

were in Kansas. So I thank you for your cooperation. 

Senator Casey. 

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

Mr. Secretary, we are honored you are here today. 

I wanted to start with some news, which might be news to a lot 

of folks here, but also information in your testimony that you were 

not able to get to because you were summarizing, and I wanted to 

highlight it. 

On page 5 of your testimony, and I am reading from the third 

full paragraph, you say, ‘‘In fiscal year 2013, SNAP,’’ the Supplemental Nutrition Assistance Program, ‘‘achieved a record level of 

payment accuracy of 96.8 percent. Payment errors in fiscal year 

2013 were almost 64 percent lower than they were in fiscal year 

2000, among the lowest in the Federal Government.’’ 

That information was validated most recently by a report by the 

Center on Budget and Policy Priorities. I will just read one sentence. ‘‘SNAP’’—this is page 25 of the report. 

‘‘SNAP has one of the most rigorous payment error measurement 

systems of any public benefit program. It also has one of the best 

records of accuracy in providing benefits only to eligible households.’’ 

I wanted to highlight and ask just for your comment on how you 

achieved that and how that compares to other Federal programs. 

Secretary VILSACK. Senator, we understand and appreciate that 

Congress is very interested, and so are the taxpayers that you all 

represent, in making sure that programs are managed with integrity and that folks who need help get the help. 

So we have put a concerted effort on reviewing, examining, inspecting, data-mining, using the tools that we have available to us, 

in concert with states, to make sure that they understand precisely 

how these programs are to work and operate. 

We are proud of the fact that we have reduced the error rate over 

time to a record level. We are also proud that the fraud rate is at 

1.3 percent, which is significantly below many other programs. 

There is still work to be done. So, in the budget that we have 

proposed, we have a series of additional integrity measures that we 

would like to take. 

I would say a couple of things in direct response. 

One is better training. 

Two is data-mining—basically, taking a look at information that 

comes into our Department from the states and looking for partners. 

Three is making sure that we focus our attention on where the 

problems exist. Eighty-two percent of SNAP benefits are redeemed 

at large-scale grocery store chains, where there is not as much of 

a problem as it is with the corner grocery store or the convenience 

store. 

So our focus is on the places where we know there are challenges 

and issues, and we are going to continue to work until we get, theoretically, to zero. 

Senator CASEY. I appreciate that. 

31 

I will just make one more note for the record. This same report, 

Center on Budget and Policy Priorities, page 17, says when it 

comes to extreme poverty, meaning families living on less than $2 

per person a day—hard to comprehend that. The report says, 

‘‘Counting SNAP benefits as income cuts the number of extremely 

poor children by more than half from 3.6 million to 1.2 million.’’ 

So I made the point, but let me move on to two issues that relate 

to—one more particularly relates to Pennsylvania, the other one 

more broadly. 

The Emergency Food Assistance Program, authorized in the 

Farm Bill at $100 million per year—the administration has a request for just 49 of the 100 million for this current budget year. 

I just wanted to ask you to comment on that because this is very 

important in terms of the transporting, storage, and distribution of 

these commodities and wanted to get your response as to why 49 

as opposed to not a number closer to 100. 

Secretary VILSACK. Senator, the 2016 budget request is $49 million, as you indicated, which is the enacted level for fiscal year 

2015 for TEFAP administration. 

States have the option to convert 10 percent of their TEFAP food 

funds into administrative funds if they believe that they do not 

have adequate resources, but we have found that this funding level 

is indeed adequate for the administrative costs. 

This is not necessarily the food purchasing costs. This is about 

administering the program. I think that is a significant distinction, 

and we have found that amount of 49 is sufficient to administer the 

program. 

Senator CASEY. We may want to engage more on that. I know I 

am almost out of time. I will just make one note for the record, and 

I will send you this. 

It is a letter from our Pennsylvania Agriculture Secretary, Russell Redding, regarding the Agricultural Conservation Easement 

Program, the so-called ACEP. He has some issues that he has put 

in the letter to me that I want to raise with you, and let me just 

ask for your commitment to spend some time with us and with 

Pennsylvania. 

Secretary VILSACK. I have a great deal of respect for Secretary 

Redding. He is—Commissioner Redding. He is a very sharp guy. So 

we will certainly take his concerns seriously. 

Senator CASEY. Thanks very much. 

Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Cochran. 

Senator COCHRAN. Mr. Chairman. 

Mr. Secretary, welcome. We appreciate very much your service in 

the implementation of the Farm Bill. 

One of the provisions of the bill relates to emergency watershed 

protection and programs to implement that. Under certain circumstances, the legislation gives the administration the authority 

to negotiate with Farm Bill beneficiaries to be sure that the authority to modify easements under the Emergency Watershed Protection Program is implemented. 

Now what is the status of the implementation of this section of 

the Farm Bill? 

32 

Secretary VILSACK. I am not quite sure if I refer to you as Senator or Mr. Chairman since you are in charge of all the appropriations. I want to make sure I am respectful. 

Senator GILLIBRAND. Once a Chairman, always a Chairman. 

Chairman ROBERTS. I think you might say, Your Honor. 

[Laughter.] 

Secretary VILSACK. That would work as well. 

Senator COCHRAN. I get no respect around here. 

[Laughter.] 

Secretary VILSACK. What I can tell you is that as it relates to implementation we are in the process of completing our implementation of that. We have put out resources. 

We still have somewhat of a backlog which we are working to reduce. I know that our fiscal year ’15 budget basically reduces the 

backlog a bit, but we still have work to be doing—still have work 

to do in that area. 

Senator COCHRAN. Well, we hope to see results from the provision so that it can be implemented and the benefits flow to the 

landowners and others who are affected by this authority. 

Another question relates to the implementation of the Unified 

Payment Limitation Proceeding and what the challenges being 

faced by USDA are encountering to develop a capability to track 

marketing loan benefits so that producers know their payment status relative to any new payment limitations. 

Secretary VILSACK. This is an issue involving primarily cotton 

producers who may sell by themselves or may sell in connection 

with a cooperative and making sure that we are fully tracking both 

the transactions to make sure that whatever exemptions or limitations apply are appropriately applied. 

We are working with the Cotton Council right now to create an 

interim effort to ensure, to the extent that we can, appropriate 

compliance. We are working on a long-term fix to this. We are not 

quite there yet. 

We are certainly aware of the problem, and we are working with 

the Cotton Council to make sure that we do as good a job as we 

possibly can until we get the permanent fix. I would hope that 

sometime by the end of this year we have this figured out. It is on 

marketing assistance and loan deficiency programs. 

Senator COCHRAN. Thank you for your personal attention to this 

issue. 

One other question that I have relates to the USDA’s Risk Management Agency. The question is: What can the Department do to 

provide producers with greater flexibility in trying to be sure that 

crop insurance purchases best fit their risk management needs 

based on a variety of production practices? 

Is this something that has been brought to the attention of the 

Secretary’s office and, if so, what progress is being made to deal 

with this challenge? 

Secretary VILSACK. Well, that is a complicated question, Senator, 

and let me see if I can answer it, and if I do not I would be more 

than happy to amplify. 

I mean, first and foremost, we work obviously with the insurance 

agents to make sure that they are fully aware of all the options 

33 

that are available and that they tailor whatever product lines are 

available to the particular producer’s activity. 

There are issues, and I know that the Chairman is very concerned about this. 

There are issues relative to irrigated and non-irrigated land. 

There are issues involving the application of the enterprise unit 

risk management process, which we are very, very fully aware of. 

We are doing our best to create the flexibility necessary to reflect 

what goes on in the countryside and balance it against the need for 

actuarial sounds of the program. 

The last thing we want to do is create any uncertainty about the 

financial soundness of this program, if you will. I think we are 

striking a good balance. 

Sometimes we also have to make sure that folks do not take advantage of a situation, and we are cognizant of that. 

So we are focused on these issues, and I am aware of them and 

keeping an eye on them. 

Senator COCHRAN. Well, we appreciate your personal attention to 

that issue. 

Let me ask you, finally; can you share with the Committee that 

the Department is strictly following the language and intent of the 

Farm Bill as it moves forward with the actively engaged rulemaking? 

Secretary VILSACK. Yes. 

[Laughter.] 

Senator COCHRAN. Thank you very much. 

Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Gillibrand. 

Senator GILLIBRAND. Thank you, Mr. Chairman and Madam 

Ranking Member. I am very grateful for this hearing. 

Thank you, Mr. Secretary, for your testimony today. 

Chairman ROBERTS. Senator, how was your orange this morning? 

[Laughter.] 

Senator GILLIBRAND. It was delicious. I was grateful the Committee provided it. 

Chairman ROBERTS. Well, thank you for making—— 

Senator GILLIBRAND. I am not sure which state provided it, but 

it was delicious. 

Chairman ROBERTS. Well, you set the example for eating fruit. 

Senator GILLIBRAND. Yes. Well, in fact, I was in Upstate New 

York yesterday. 

Chairman ROBERTS. Are you saving those peels for me or what? 

Senator GILLIBRAND. I will throw them away. I am a very responsible mother. 

Chairman ROBERTS. All right. 

Senator GILLIBRAND. So I was in Upstate New York yesterday, 

and I had this great opportunity to meet with kids about nutrition 

standards and what is in their school lunch, and I was surprised 

how much these young kids knew about the importance of fruits 

and vegetables. So I am going to turn my attention on that topic. 

I specifically want to talk a little bit about that New York was 

selected to be one of eight of the pilot states to participate in the 

Farm Bill Pilot for Procurement of Unprocessed Fruits and VegetaVerDate Nov 24 2008 10:13 Feb 11, 2016 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 C:\USERS\MW42035\DESKTOP\DOCS\96173.TXT MICAH
34 

bles. The pilot allows schools to use their USDA dollars to buy 

produce directly from the local farms. 

We have a lot of great farms in New York State that are participating—Reeves Farms, Torrey Farms, Beak & Skiff Apple Orchards, Old McMarley’s Apple Farm. They have already signed up 

and become vendors for the pilot. 

Now the pilot is particularly useful because it allows fresh vegetables to get into our schools, like fruits and vegetables—apples, 

squash, zucchini, cucumbers—that are locally grown, healthier 

economy. 

I went to two schools yesterday and saw how these locally produced foods are displayed, offered, and put into the menus that the 

kids eat, and it really does make a difference. 

So I wanted to know from you; how is the pilot going so far and 

what are other options that schools have to buy locally? 

Secretary VILSACK. Well, we are encouraged by the fact that we 

were able to find eight states willing to step up and participate in 

this pilot. 

We were not quite as successful on the canned and frozen side. 

We got four states that were interested and involved in that program. 

We have made a major commitment of resources, time, and energy in creating a local and regional food system. We have done 

13,000 investments in hoop houses to extend growing seasons in 

Upstate New York, a place I am very familiar with, having spent 

7 years of my life up there. Winters can be long, but the growing 

season can be extended. 

We have created new credit opportunities through the micro loan 

program. 

We have created crop insurance opportunities we talked about 

earlier. 

We have invested 379 investments in local food promotion and/ 

or farmers market expansion through the programs that you all established in the Farm Bill in 2014. That number will continue to 

increase over time. 

We have looked at ways in which we can create food hubs and 

marketing assistance, and we have also provided better marketing 

data and pricing so that folks have a better understanding. 

Last, but certainly not least, we have expanded—while this is not 

to your point of schools, we have expanded the access of fruits and 

vegetables to SNAP families by providing EBT machines in over 

5,000 farmers markets so that folks can redeem their SNAP benefits. 

Senator GILLIBRAND. Now related to that, have you been able to 

start issuing the first round of grant awards under the Food and 

Security Nutrition Incentive Grant Program to help SNAP recipients. 

Secretary VILSACK. Yes, we have encouraged applications for the 

first $35 million of that program, and we expect and anticipate 

making those awards in 2015. 

Senator GILLIBRAND. Okay. I would love a report on that so I can 

understand how that is actually going. 

A related issue. When I was at these schools, we were focused 

a lot on the New York schools that are meeting the new nutrition 

35 

standards and how they are doing it. We now have about a 98 percent participation rate in New York State, which is really, really 

important. 

Around the country, we are beyond 90 percent participation. So 

we are really getting this done, which makes me happy as a mother. 

What kind of technical assistance and additional support is 

USDA providing to help schools be successful in making the new 

changes? 

Secretary VILSACK. We are at 93 percent. We have provided 

Smarter Lunchroom grants. We have provided school equipment 

grants. We have provided and created a program called ‘‘Team Up 

for Success!′′ 

For school districts that are struggling, we have teamed them up 

with a mentoring school in a couple of pilot areas, and we extend— 

we are going to extend this to a national effort this year. It was 

very successful. 

The University of Mississippi assisted us in the nutrition center. 

Cornell has also been engaged and involved. 

Senator GILLIBRAND. Yes, that Cornell program has been very 

successful. 

Secretary VILSACK. BEN program. 

Senator GILLIBRAND. Yes, the BEN Program, the BEN Center. 

Secretary VILSACK. We have also utilized their resources. 

There are a variety of other steps that we have taken, and we 

are pleased with the fact that 70 percent of elementary school kids 

and 63 percent of high school kids are enjoying the new standards. 

Senator GILLIBRAND. Thank you. 

Last issue with my 30 seconds. Obviously, I care a lot about 

dairy. We are the number three dairy producers in the whole country. 

In the last Farm Bill, we put into place the Dairy Margin Insurance Program, and what we have seen is that only 48 percent of 

New York farms have signed up. Other states, like Vermont, are 

far, far more ahead. 

Do you feel that USDA outreach and education efforts have been 

sufficient to enable producers to choose appropriately MPP coverage at a time of sharply falling milk prices? 

Secretary VILSACK. I do. I think the fact that over 50 percent of 

dairies participate and over 55 percent of that number bought coverage at increased levels reflects the fact that there was a decision 

to be made. 

We were not surprised at those numbers given the fact that dairy 

prices are still—while they have come down a bit, they are still in 

pretty good shape relative to the need for the margin protection. So 

I think we have done adequate outreach. 

I am sure people will be more sensitive as they look at 2016 and 

participating in the program. 

Senator GILLIBRAND. Thank you. Thank you, Mr. Secretary. 

Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Thune. 

Senator THUNE. Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Thune. 

Senator THUNE. Thank you. I never have a problem hearing you. 

36 

Mr. Chairman and Senator Stabenow, thanks for having this 

hearing and giving us an opportunity to catch up on a lot of these 

issues that are so important to those of us who represent states 

where production agriculture is a big industry; in the case of South 

Dakota, the number one industry. 

I want to thank you, Mr. Secretary, for the hard work that you 

and your staff put in, in getting livestock disaster programs out the 

door last year. That was a very big issue, critical to South Dakota’s 

livestock industry, and I appreciate your timely and effective response on that particular issue. 

I want to raise a couple of issue with you. I think you are probably familiar with them already. 

One of them has to do with mid-contract management of CRP 

acres. You know, South Dakota producers received letters last year, 

telling them that the residue they remove must be destroyed. Over 

the years, this has resulted in literally thousands of tons of feed 

that could have been put to use instead of being burned. 

I have requested in a letter that you either allow the residue to 

be donated with no reduction to CRP annual payments or, if used 

by the participant, that the annual payment reduction be assessed. 

You responded in a letter that this concern would be addressed 

in future CRP policy changes. 

The question I have is: Can you assure me that CRP participants 

will no longer receive letters requiring them to destroy residue removed during mid-contract management on any CRP practices? 

Secretary VILSACK. Senator, what I can assure you is that every 

farm actually has to be, in a sense, analyzed for its own circumstances and condition, which is why we have established and 

set up a system for an environmental assessment that would give 

us the range of options that will be available to each landowner. 

Obviously, each landowner can, and we would certainly encourage them to, consider donation. That is an option that is available 

to everyone. 

There is an option, obviously, for other utilization of the management, but of course, there carries with it a financial penalty, if you 

will. 

But if you think about it, if people use it for their own personal 

purposes, they are saving expense. We do not want to have a double-dipping situation. 

So there are options available. 

I think hindsight is always 20-20. It probably would have been 

better if we had been a bit more flexible with our language in the 

memo that was sent out to producers, but we wanted to make sure 

that people understood what the rules were. 

Senator THUNE. I totally get it. I mean, I understand the whole 

thing about double-dipping, which is why I think they would take 

a haircut on the payment if they were to use it themselves. But, 

if they were to donate. 

It just seems like—and I have heard this for many years now— 

that you have got all this usable feed that gets wasted and destroyed, and it makes no sense. 

The letter last year that went out did say—and it says that clipping bales must be destroyed. Please notify the office once the bales 

have been destroyed. 

37 

What I am suggesting, and I hope that you will agree with this, 

whether you do it case by case or whether you do it in some sort 

of standardized way, that there be a better approach to dealing 

with this, what I think is a very important issue. 

Secretary VILSACK. I do not disagree that we could be a bit more 

sensitive with the language we use there. 

Senator THUNE. Okay. All right. Well, hopefully, this next year 

you can and will be. 

One other issue that is really important in South Dakota right 

now we have had for several years now. Farmers in Eastern, especially Northeastern, South Dakota have been faced with flooding 

and drainage issues, and thousands of requests have been made to 

NRCS for wetland determinations so that they know how to manage their land and still meet the conservation compliance provisions. 

According to the most recent South Dakota NRCS report, we still 

have more than 2,000 undetermined wetlands in the state, which 

is just three times or more as many as in any other surrounding 

state. 

So farmers are concerned. Our state’s farm and commodities organizations are concerned. I believe that South Dakota NRCS office 

staff is making an effort to reduce this backlog, but so far, Mr. Secretary, the results just have not materialized. 

I requested last summer a meeting, and there were some personnel from NRCS headquarters that attended, in Aberdeen. We 

had more than 350 farmers there, which tells you kind of how important this issue is to them, and I know he came back to Washington having heard firsthand these frustrations from some of 

these farmers due to the backlog. 

But my question is: What more can you do at headquarters to 

help get this wetlands determination backlog under control? 

Secretary VILSACK. Senator, we are trying to reduce the backlog. 

We did 23,000 wetlands determinations last year. 

Two things we have done and will continue to do: 

One is to create a different system for the determination of the 

wetlands. Some of the problems, I think, were based on the fact 

that local folks were making these determinations and there was 

a concern about that. That has changed. 

Secondly, we are trying to right-size staffing levels to where the 

issues are. 

So these numbers have come down. They, obviously, are not 

down to a place where you are satisfied, and I am not satisfied either. 

However, it is important to note that we have had budget restrictions which have made it very difficult for us to have the staffing 

levels to do the work that you all want us to do. So, hopefully, 

when budgets are passed on, you all will be taking that into consideration as well. 

We are doing our level best with the personnel that we have. 

Senator THUNE. You know, in terms of resource, personnel, all 

that, I understand that. But when our state has three times more 

than any of the surrounding states, it strikes me at least that we 

need to—there has got to be more allocation of resource and personnel to this in South Dakota. So I would thank you for that. 

38 

Mr. Chairman, just a point of personal privilege, one of the next 

gentlemen to be up for a nomination to the FCA today is a South 

Dakotan, Dallas Tonsager. He has served South Dakota farmers 

and ranchers for a really long time as FSA/FHA Director in South 

Dakota, Under Secretary at the Department of Agriculture for 

Rural Development, and for five years, from 2004 to 2009, served 

on the FCA Board, a position for which he is currently up. 

I wanted to welcome him and thank him for his service, and we 

look forward to processing his nomination. 

Mr. Chairman, thank you. 

Thank you, Mr. Secretary. 

Chairman ROBERTS. Senator Bennet. 

Senator BENNET. Thank you, Mr. Chairman, and congratulations 

to you on your ascension to your chairmanship. I look forward to 

working with you. 

Chairman ROBERTS. I did not know I had ascended, but— 

Senator BENNET. I would say. Well, it is not—and our Ranking 

Member, of course, has not descended anywhere. So we are still 

here, but congratulations. 

Mr. Secretary, I want to say thank you to you for your service 

to the country and to our farmers and ranchers, particularly those 

who are in Colorado. You visited many, many more times than anybody would have had any right to expect, and I know that is true 

all across the country. 

But the measured way you have approached this job over the last 

six years, I think, has established a model for what public leadership should like in Washington. So I just want to say thank you 

for that. 

We have heard a fair amount of discussion this morning about 

the ARC and PLC election deadline at the end of March. In Colorado, I have heard a number of concerns that the FSA staff may 

not have enough time to process all the elections by the deadline 

given the constraints of state FSA offices. 

Do you believe that the Agency will be able to process the ARC/ 

PLC elections in time? 

If not, is there a contingency plan and is there anything Congress can do to ensure the Agency is set up for success in the field 

for these and other programs? 

Secretary VILSACK. Senator, I appreciate your kind words. 

This is an issue that I am now focused on, on a daily basis. I 

have been receiving weekly reports. Now it is going to be a daily 

report. 

I can tell you that as of last Friday 430,332 operators had made 

an election. That is probably, roughly, 26 to 27 percent of what we 

expect will occur. 

There are options for the use of the registry for folks to sign up 

to be able to meet, technically, the deadline without the Ts crossed 

and the Is being fully dotted. 

As we monitor this situation, both on the yields and base allocations and also on the sign-up, we will obviously be closely watching 

this and use the registry as an option. 

If there is the need for an extension—that is something we have 

done in the past—I do not want to commit to that today because 

39 

it is sort of like your kids, going to tell your kids that they have 

another week to do their homework. 

Senator BENNET. Right. 

Secretary VILSACK. We want folks to make the decision. 

We are encouraging producers who have made the decision, the 

folks who have gone to one of the almost 4,900 meetings that we 

have had or gone online and used the computer models, if they are 

ready to make the decision, they can make it now. If between now 

and March 31st, if they decide they have made a mistake, they can 

change it. So we are encouraging folks to get to their FSA offices 

today. 

I will tell you the reports I am getting are that folks are surprised how little time it takes to sign up. 

So we will continue to monitor it, and we will be as flexible as 

we can. 

Senator BENNET. Well, maybe sending that message out would 

help. I know you are doing what you can. 

We will keep an eye on it, too. If we start to run into real trouble, we will let you know. 

I also wanted to talk for a moment about conservation. I share 

Senator Stabenow’s concerns about what has happened with the 

budget there. 

Last time this Committee met, we spoke with Chief Weller about 

the implementation of programs in the Farm Bill’s conservation 

title. 

In Colorado, we have heard very specific concerns about the agricultural land easement program, and I think we have made 

progress, but our producers and land trusts are still waiting for a 

clear rule and a handbook to move forward on their easements. 

Can you give the Committee an update on the timing for publishing the rule and the handbook? 

Secretary VILSACK. I just wanted to double-check. This spring, 

that work will be completed. We did get the program, in a sense, 

rolled out to give states flexibility between the various options that 

they have, and we will complete our work this spring. 

Senator BENNET. Okay. I would only ask that you take a personal interest in this because I just want to make sure that it 

aligns with what the Committee was intending to do when we 

passed this to begin with. 

I think Chief Weller is there now, but we have had some issues. 

Secretary VILSACK. I would just simply say that we—that I get 

a report every week on every aspect of this Farm Bill. 

Senator BENNET. Okay. 

Secretary VILSACK. So you can be assured I am taking personal 

interest in it. 

Senator BENNET. Thank you. 

The last matter I wanted to raise with you is the application of 

the Endangered Species Act which, has become a huge issue for a 

lot of people in Colorado. I say that as a supporter of the Endangered Species Act. It is a statute that has protected a lot of wildlife, 

which makes the West a special place to live. 

We have appreciated NRCS’s efforts to facilitate habitat conservation for the greater sage-grouse through the Sage Grouse Initiative. 

40 

I wonder whether you could discuss the Agency’s ongoing work 

in this arena in light of the certainty brought about by a five-year 

Farm Bill and whether you could talk about whether this Agency, 

your Agency, might also consider dedicating some resources to the 

recovery of the already listed Gunnison sage-grouse which occupies 

a much smaller range in Colorado and Utah than does the greater. 

Secretary VILSACK. What can I tell you, Senator, is that we are 

committed to trying to help producers deal with the challenges of 

the Endangered Species Act as they perceive them. We have invested $424 million in the Sage Grouse Initiative over 

the last 5 years. We have worked with over 1,100 producers. We 

have impacted 4.4 million acres of land. We have converted roughly 

430,000 acres into permanent easement. So this is something we 

are committed to. 

We have worked with the Department of Interior to create what 

we call regulatory predictability. In exchange for producers adopting a suite of practices that we know work, they get a 30-year commitment, if you will, from the Department of Interior that if that 

species is listed they are already deemed in compliance. 

I will go back to the office and find out, specifically with reference to the Gunnison sage-grouse, what our plans are. 

But our plan is to continue this level of support, and we are also 

obviously focused on a number of other species, including lesser 

prairie chicken and a variety of other species in other areas of the 

country where we are faced with the same set of issues. 

Senator BENNET. Thank you very much for your testimony. 

Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Boozman, but let me say if I might, 

Senator, we have the same problem with the lesser prairie chicken. 

I thank you for your comments, and we want to work with you in 

doing some research on the Endangered Species Act. 

The original intent was to take a look at conservation—and you 

have talked about those easements and things of this nature—not 

to simply list every living creature that we can find and then have 

a problem when it does not rain in the habitat for a particular species, goes to where that habitat is, and then the listing occurs, and 

then we have a problem. 

You and I have talked about this, and we have already had a 

vote in this session on this specific species. 

We are talking with the Environmental and Public Works Committee to see if we could set the predicate of some of the challenges 

that we face here and what kind of legislation may—and I emphasize ‘‘may’’—be needed. I understand that is under their jurisdiction, but we are the folks getting hit. 

I have been trying to point out that when it rains and if it rains 

and when it rains, that the habitat will grow, the lesser prairie 

chicken will come back and, after that, will be the greater lesser 

prairie chicken. 

So I appreciate your work and the focus on this so that we do 

not get all wrapped around the axle on something that we may not 

need to do. 

I apologize to Senator Boozman. 

Senator Boozman. 

Senator BOOZMAN. Well, thank you, Mr. Chairman. 

41 

Thank you, Mr. Secretary, for being here, and I do want to thank 

you very much for your hard work in implementing the Farm Bill. 

I know this has been very difficult, but you and your staff are 

doing a good job. 

In particular, I want to thank you for working with our rice 

farmers in regards to the payment timing issues that w are dealing 

with. Rice farmers in Arkansas truly greatly appreciate your willingness to work with them on that issue. 

Very quickly, the Farm Bill required the USDA to propose a plan 

for reorganizing the Department’s trade functions and your report 

on the plan within 180 days. This included the establishment of an 

Under Secretary for Trade and Foreign Agricultural Affairs. 

After the plan was overdue, Congress appropriated funds this 

past December to ensure the completion of the plan in coordination 

with a third party, and the USDA’s Office of the Chief Economist 

was directed to begin the study within 60 days of the passage. 

I guess my question is: Has the Office of the Chief Economist 

begun the study and what is your timeline for establishing the 

Under Secretary for Trade and Foreign Agricultural Affairs, which 

you know better than anybody is so important to the industries? 

Secretary VILSACK. Well, I could not agree with you more, Senator, that trade is important. Thirty percent of all ag sales are export-related, and that is roughly equivalent to net farm income. So 

it is important. 

The Chief Economist Office. I asked about this issue yesterday, 

and they are in the process of completing the work to hire the consulting group that is required by the budget law, the ’15 budget 

law, and that we were supposed to spend $600,000, in a sense, restudying this issue. 

So they are hiring the consultant who will conduct that study, 

who will look at precisely how it could be done, how many various 

agencies and mission areas within USDA will be engaged in this— 

because it is not just the Foreign Ag Service. It is APHIS. It is a 

variety of other departments within the USDA—and then come up 

with a set of recommendations as to how we would best implement. 

I do not want to commit myself to a timeline until I see what 

the report is, but I can tell you that we are making progress in getting this thing through the process, and we understand the importance of it. 

Senator BOOZMAN. Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Donnelly. 

Senator DONNELLY. Thank you, Mr. Chairman, and congratulations. We are honored to have you as our Chairman. 

Chairman ROBERTS. Thank you, sir. 

Senator DONNELLY. Mr. Secretary Vilsack, thank you for your 

work on the Farm Bill. 

I would just like to—before I ask any questions, I would like to 

mention that Jeff Hall is a nominee for the Federal Farm Credit 

Administration Board. He is the president and founding member of 

an association management and consulting firm. He has 30 years 

of experience in agricultural policy. 

He is from Kentucky, but Mr. Hall is also a partner in his family’s farm in Southern Indiana. He received his B.S. degree from 

Purdue University. 

42 

We are very strong in our support of him, and we look forward 

to his nomination. 

Mr. Secretary, in regards to our popcorn farmers in Indiana it is 

a big part of our ag heritage and what we do every year—our producers are facing a February 27th deadline in order to decide 

whether to update their yield history and reallocate base acres. 

In order to make those updates, our popcorn growers need a conversion yield factor to convert those yields when compared to field 

corn yields. USDA delivered that yield factor just last Wednesday. 

So our growers only have 10 days with all the available information to make a decision on yield updates. 

Given the short deadline, can you ensure the USDA will work 

with our popcorn producers if they need a little bit extra time to 

make that decision? 

Secretary VILSACK. Senator, what we are encouraging the producers in your state to do is to basically get themselves on the registry, which basically complies with the deadline requirement but 

would give them potentially additional time to make whatever decisions they have to make to cross the Ts and dot the Is. So there 

is a vehicle and a process by which they can buy themselves, if you 

will, some additional time. 

Senator DONNELLY. Okay. We also have some rural development 

issues in our state that are important. 

Number one I want to mention is—I have talked to you about it 

before—the Town of Waverly in Morgan County is looking to take 

advantage of the Rural Economic Development Loan and Grant 

Program in order to expand wastewater infrastructure in the area. 

The USDA has not yet completed rulemaking needed to allow them 

to take advantage of the program. 

Second is we have some counties looking to take advantage of the 

Community Facilities Program to facilitate the construction of airport hangars and promote rural development in those areas. There 

are some current administrative policies that are hanging that up 

a little bit. 

We just want to make sure that the Department of Agriculture 

and the agencies can work with our communities to figure out the 

best way forward in these development plans. 

Secretary VILSACK. Senator, we are aware of the concerns on 

both projects, and I would say two things. 

One, we will continue to work with your staff to try to figure out 

how to get around various prohibitions and restrictions that may 

be in a budget bill. 

I have also instructed my staff to begin understanding that they 

ought not just to limit their assistance and help to what exists 

within the boundaries of USDA. We ought to be a full-service operation. So, if a community does not comply with a certain requirement that we have, we ought to be talking to our sister agencies 

through the Rural Council to determine whether or not there is another agency of the government that could potentially provide help. 

I do not think we do enough of that, and I am encouraging our 

team to be a little bit more expansive in their thinking and more 

creative in their thinking in trying to solve these problems. 

Senator DONNELLY. Thank you because I know you understand 

that for a lot of our rural communities there are a lot of agencies, 

43 

but the Department of Agriculture is one that they look to for foremost guidance in a number of areas, and you become the lead representative to try to grow our rural economies and our rural areas. 

So we appreciate the effort to try to be an interface, in effect, for 

so many of our communities. 

Thank you. 

Thank you, Mr. Chairman. 

Chairman ROBERTS. Senator Ernst. 

Senator ERNST. Thank you, Mr. Chair. 

Secretary Vilsack, I want to thank you for your years of service 

to not only the Federal Government but also to the State of Iowa. 

So, thank you very much, sir. 

Veterans do experience unique challenges as they leave the military workforce and enter the civilian workforce. We have a program in Iowa now that is Home Base Iowa, where we are trying 

to bring back our men and women of the Armed Services and establish their home again in Iowa. 

Careers in agriculture are really a great fit for a number of these 

returning servicemen and women, and I know that in the 2014 

Farm Bill there were provisions included for veterans which encourage and promote them to enter this area. 

To what degree has the USDA been able to implement these specific programs that assist veterans transitioning into the ag community? 

Secretary VILSACK. Senator, I appreciate the question, and you 

are absolutely right. 

We are very sensitive to the opportunities that farming can provide to our returning veterans, particularly those who have been in 

combat. As you well know from your own personal experience, it is 

an issue that you have to deal with, and you have to provide help 

and assistance. 

We have done a couple of things. 

First of all, I will instruct my staff to make sure that Karis Gutter, who is the military veteran liaison, gets in touch with your 

staff to give you a more full briefing on all the steps that are being 

taken. 

But we established that liaison. He is a former Marine, served 

with distinction in the Marine Corps, very committed to this, and 

he is in our Farm Service Agency. 

Chairman ROBERTS. Excuse me, Mr. Secretary. There are no 

former Marines. He is a Marine. 

[Laughter.] 

Secretary VILSACK. Apologies, Mr. Chairman. I should know that. 

My nephew is a Marine. 

He serves with distinction and is very, very much committed to 

this effort. 

Also, the Deputy Secretary has been tasked with a beginning 

farmer and rancher program. We are trying to expand significantly 

our reach in veterans. She actually came, as you probably know, 

to Iowa and had a conversation with folks there. 

We recently announced $18 million of assistance under the beginning farmer and rancher program, with some emphasis on attracting veterans and women and people of color into the farming 

business. 

44 

We are working diligently with the Departments of Defense and 

Veterans Affairs. Part of our challenge is getting the information 

to folks before they make the decision, before they actually leave 

military service. 

We have a hard time physically getting on base during that period of time. As folks sort of transition out of the military, they are 

given opportunities on base for additional information. We are trying to encourage the Defense Department to allow us access to 

allow Karis and his team to make a presentation on these bases 

so that folks consider this as an option. 

Finally, we are working with a number of veterans groups that 

are committed to this, and we are providing resources to them to 

do outreach on our behalf. 

So there is an aggressive, comprehensive, and very, very personal 

effort in terms of our veterans. 

Senator ERNST. Thank you, Mr. Secretary. I do appreciate that 

and look forward to working with your staff on those issues. I think 

it is a great, great issue for many of our states out there. 

Engaging our military bases through their transition assistance 

programs, I am glad you brought that point up. So however we can 

assist in making that happen, we would love to do so. 

So, thank you very much, Mr. Secretary. 

Thank you, Mr. Chair. 

Chairman ROBERTS. Senator Hoeven. 

Senator HOEVEN. Thank you, Mr. Chairman. Greetings to you 

and to our Ranking Member. 

Certainly to you, Secretary Vilsack, thanks for being here today. 

Appreciate it. 

The first question is on conservation compliance. I have concerns 

under the new Farm Bill that conservation compliance is tied to 

crop insurance and have tried to find ways to make it more farmerfriendly. 

One of the concerns I have is that NRCS is now using the term 

‘‘obvious wetland.’’ So they are requiring, obviously, farmers to 

comply with the criteria that they call obvious wetlands as a measure of Farm Bill conservation compliance. 

Can you tell me what constitutes an obvious wetland and how 

that was determined and how it is applied by NRCS? 

Secretary VILSACK. Senator, I think they would probably—I 

would probably like to get you a more technical response to that. 

Let me just simply say that right now our focus, or my focus, has 

been making sure that producers understand their obligation to 

produce the—what is it? The AD–1026 form by June 1st. 

It is roughly around 6,000 producers that we are concerned do 

not know that they have to do that. Many, many, many producers 

understand that, but some producers do not. So we are encouraging 

that. 

But we will get you a more technical definition of this. 

Honestly, I was under the impression that this compliance issue 

is not a significant issue in terms of as fundamental changes in the 

way in which we have done this. We have had compliance before 

tied to direct payments. Prior to that, before, we had it tied to crop 

insurance. 

45 

Senator HOEVEN. Yes, it was tied to the commodity program before. So it is not like farmers have not been working with it in a 

lot of cases. 

Other than those that did not participate—— 

Secretary VILSACK. Right. 

Senator HOEVEN. —in the commodity programs and only participated in crop insurance; for them, it is new. 

The other issue is in my part of the country region, that is prairie pothole regions. So the concept of an obvious wetland, when you 

have drier years and wetter years, is tough, and that is where they 

are hitting some problems with NRCS. 

So your help there, taking a look at it, and then just as much 

flexibility as possible is helpful and important. 

Secretary VILSACK. We are working very closely with folks in 

your state making significant investments because of the unique 

challenges you all face up there. 

Senator HOEVEN. Right. Then a follow-up to that is one of the 

things that NRCS is doing is they are using some of the wildlife 

groups like Ducks Unlimited. I have an avid sportsman, and I love 

to hunt and fish, but I am also a big advocate for farmers, as are 

you, and there is concern on the part of our farmers that creates 

a potential conflict of interest or problem when NRCS is using a 

group like DU on this wetlands compliance issue. 

So can you address that for me? Because this is a concern that 

I have been hearing from my farm groups from about—in my state 

and others. 

Secretary VILSACK. I think that what we are attempting to do is 

to make sure that we are leveraging our resources effectively. 

There is a tremendously—there is a great interest in all of these 

conservation programs, and the response to the Regional Conservation Partnership Program is a good reflection of the interest of 

partnerships and collaboration. 

Yours is the first comment that I have received expressing concern about the collaboration, and it is—actually, to be honest with 

you, Senator, it is a little surprising because I have not found that 

conflict in other parts, but we will certainly look into it. 

Senator HOEVEN. Would you be willing to look into it? 

Secretary VILSACK. Sure. 

Senator HOEVEN. There are some cases where I think they are 

working with other groups and I think it has gone well, but there 

are some concerns here. Your willingness to look into it—— 

Secretary VILSACK. Sure. 

Senator HOEVEN. —I think would be very important. 

Secretary VILSACK. If you would give us specific producers, we 

would be happy to reach out to them or I will have, obviously, folks 

talk about this generally. 

Senator HOEVEN. Absolutely, I will give you some of the groups, 

the farm groups and associations that have contacted me, and if 

you are willing to follow up on that, that would be great. 

The third question I had really relates to implementation on the 

Farm Bill, where somebody has made a land acquisition. Typically, 

if the prior producer will not give them their historical yields and 

so forth for establishing base and enrolling in a program, you have 

gone to the county T-yields and so forth. 

46 

But there was also a proposal by some of the farm groups to use 

three fields that are contiguous or in the area because the county 

average may be a lot lower than what those acres have been producing. 

Is there any willingness, or are you willing, to take a look at 

something like that kind of proposal for establishing new base 

acres for a farm program? 

Secretary VILSACK. Senator, We are always trying to work with 

folks. I do not want to commit myself specifically to saying, yes, 

that we will do that, but we should always be willing to take a look 

at whatever suggestions producers are making to improve the programs. 

Senator HOEVEN. I think that is the biggest thing with implementation of this Farm Bill, particularly as they are trying to 

make a decision, between ARC and PLC. Just any flexibility you 

can give them is much appreciated. 

Secretary VILSACK. I would say that in relationship to the 

crafting of the legislation that there may be things folks would like 

us to do that the legislation simply does not allow us to do. We 

have run across that in a couple of circumstances, where the language is very specific in the Farm Bill, but we will do what we can 

to be willing to listen and do what we can to be as flexible as we 

can within the existing statutory directive. 

Senator HOEVEN. Thanks, Mr. Secretary. Appreciate it. 

Chairman ROBERTS. Let me say that the question I submitted for 

the record is a follow-on to Senator Hoeven’s concern. 

The Farm Bill reattached—so now I am not submitting it for the 

record—wetland compliance—and in my part of the world, our part 

of the world, highly erodible land; the acronym for that is HEL, by 

the way, H-E-L—conservation compliance requirements to crop insurance. 

Well, to implement and to administer and force this new requirement, I know that there will be three separate agencies within the 

Department, if you say Risk Management Agency, RMA, and the 

Natural Resources Conservation Service. 

So what you have said is encouraging to me with regards to a 

multi-agency process that will involve some complexity, both from 

an agency/administration perspective and also from the perspective 

of a new producer just learning how to come into compliance for 

the first time, because you have got three separate agencies to deal 

with. 

You have already made the commitment to have representatives 

from these agencies really try to communicate and provide information on a continual basis to us and to our individual producers, and 

I thank you for that. 

Well, thank you, Mr. Secretary. 

We have the distinguished Majority Leader here. Would the distinguished Senator have any questions of our most cooperative Secretary of Agriculture? 

Senator MCCONNELL. Thank you, Mr. Chairman. I do not. I am 

here, whenever you think the time is right, to introduce a nominee. 

Chairman ROBERTS. Your time is my time, and the time is right. 

47 

That will conclude the first portion of our hearing this morning, 

looking at Farm Bill implementation. Other issues were brought 

up, but that is the primary goal of this hearing. 

I want to thank each of our producer witnesses for taking time 

out of their busy schedules to come to Washington and share their 

perspective on how things are working out in farm country. 

I also thank Secretary Vilsack again for his time and ongoing efforts to make sure the critical investments we made in this Farm 

Bill are implemented in a way that works for farmers and ranchers 

all across the country. 

I very much appreciate your hard work and look forward to opportunities to work together, sir. 

To my fellow members, we would ask that any additional questions that any member might have for the record be submitted to 

the committee clerk five business days from today or by 5:00 p.m. 

next Tuesday, March 3rd. 

We now ask Mr. Hall and Mr. Tonsager to come to the table, 

please. 

Secretary VILSACK. Mr. Chairman, can I thank the Majority 

Leader for taking me off the hot seat? 

[Laughter] 

Senator MCCONNELL. Anything I can do for you, Mr. Secretary, 

let me know. 

Chairman ROBERTS. We now move to our third and final panel 

for today’s hearing. We welcome today’s two nominees to serve on 

the Board of the Farm Credit Administration—Jeffery Hall and 

Dallas Tonsager. 

The Farm Credit Administration is comprised of three board 

members and serves as the lead regulatory body overseeing the 

lending associations and banks which comprise the Farm Credit 

System. 

Our first nominee is Mr. Jeffery Hall. I yield to the distinguished 

Majority Leader. 

Senator MCCONNELL. Thank you very much, Mr. Chairman, Senator Stabenow. 

I wanted to welcome my constituent and friend, Jeff Hall, to the 

Committee as consider his nomination for the Farm Credit Administration Board. 

Inspired by his upbringing on a family farm in Southern Indiana, 

Jeff has devoted his 30-year career to serving farming across my 

state. Early in his career, he took a position with the Kentucky 

Farm Bureau, where he learned directly from the brightest in Kentucky agriculture. Thereafter, Jeff joined my staff as Legislative 

Assistance for Agriculture, where he worked on issues for this very 

Committee. 

Later, he served as Assistant to the Dean of our highly regarded 

College of Agriculture at the University of Kentucky from 1994 to 

2001. From 2001 to 2009, he was appointed State Executive Director to USDA’s Farm Service Agency in Kentucky, where he was responsible for administration of the Agency’s commodity, conservation, and lending programs. 

Finally, Jeff has dedicated his spare time to assisting those in 

agriculture as he has held leadership positions within the Louisville AG Club and the Kentucky Pork Producers Association. 

48 

Given Jeff’s wealth of experience serving the farming community, 

his tremendous work ethic, and can-do attitude, I do not have any 

doubt he will be a great member of the Farm Credit Board. I am 

personally very proud of his accomplishments and very happy to be 

here today to introduce him to the Committee. He is a fine fellow 

and would do an excellent job. 

Chairman ROBERTS. We thank the Majority Leader for taking 

time out of his busy schedule to introduce the nominee. 

Our second nominee, Mr. Dallas Tonsager, is familiar to this 

Committee. A farmer from South Dakota, Mr. Tonsager currently 

owns and operates Tonsager Consulting, a rural development consulting group based out of McLean, Virginia. 

Prior to this, he served as the Under Secretary for Rural Development at the Department for four years and previously served as 

a board member of the Farm Credit Administration, the same position he is being considered for now. 

Prior to his service on the Farm Credit Administration, he held 

a number of jobs in both the public and private sectors. He received 

a bachelor’s of science degree from South Dakota State University—Go Jackrabbits! 

Gentlemen, I look forward to hearing your testimony today and 

asking you both some questions in regards to the role you would 

play on the Farm Credit Administration should you be confirmed. 

Before we swear you in and we hear from you, I want to turn 

things back over to Senator Stabenow for any remarks that she 

would like to make. 

Senator STABENOW. Well, thank you very much, Mr. Chairman. 

Welcome to both of you. We are very pleased to have both of you 

willing to serve. I look forward to supporting your nomination on 

the floor as we move forward. 

This is a critical time for our country and for our rural economy. 

The Farm Credit System supports rural communities in every part 

of the country, and it is very, very important. 

American agriculture is experiencing significant changes right 

now, from price swings to adverse weather conditions, and that demands careful and dedicated attention, and I am confident that 

both of you will be able to provide that. 

Mr. Chairman, I apologize. I am going to be having to step away 

at this point, and I am going to have confidence that left to your 

own devices, we will be in good hands without my being here with 

you. 

But I do apologize, and it is not for lack of support or understanding of the significance but because of a prior commitment. 

So, welcome. 

Chairman ROBERTS. I thank the Senator. 

Gentlemen, there are two questions that I need to ask you under 

oath before you testimony, if you would stand and raise your right 

hand, please. 

Do you swear that the testimony you are about to present is the 

truth, the whole truth, and nothing but the truth; so help you, 

God? 

Mr. HALL. I do. 

Mr. TONSAGER. I do. 

49 

Chairman ROBERTS. Second, do you agree that, if confirmed, you 

will appear before any duly constituted committee of Congress if 

asked to appear? 

Mr. HALL. I will. 

Mr. TONSAGER. I will. 

Chairman ROBERTS. Please be seated. 

Mr. Hall, why don’t you proceed? 

STATEMENT OF JEFFERY S. HALL, OF KENTUCKY, TO BE A 

MEMBER OF THE FARM CREDIT ADMINISTRATION BOARD, 

FARM CREDIT ADMINISTRATION 

Mr. HALL. Thank you, Chairman Roberts, Senator Stabenow, and 

members of the Committee. It is an honor to appear before you 

here today, and I am humbled to be nominated for the position of 

a board member of the Farm Credit Administration. 

I want to offer my special thanks to Senator McConnell, who 

came in and made his introduction. He has been a great supporter 

for many years and I of him. 

Probably the biggest thing that happened was 27 years ago, getting to come on his staff, sit in this very room and participate in 

the 1990 Farm Bill and work with him. 

It is especially an honor to be sitting at this end of the table and 

recognizing the importance of this. 

I also want to say I am proud to have my wife and my two children with me here today. I did not have a hard time talking my 

kids into missing school. So I am glad they are with me and get 

to experience this, this morning. 

As Senator McConnell and Senator Donnelly said, I was raised 

on a Southern Indiana farm where it really gave me a great understanding, not only for the hard work that farmers put in on a regular basis but the importance of agriculture in this country. That 

farm has been in our family since 1818, almost 200 years when it 

was homesteaded. 

What I learned growing up on that farm has shaped my life and 

my career. It gave me inspiration to go to Purdue University to 

study agriculture and become the first person in my family to graduate from college. It was that opportunity that allowed me to experience more and gain a much deeper appreciation of agriculture. 

In addition to my time working for the United States Senate, my 

professional career has included time at the Kentucky Farm Bureau, the University of Kentucky, and the U.S. Department of Agriculture’s Farm Service Agency. Each and every step of my career 

path has broadened my base of knowledge and increased my appreciation for the vital role that agriculture plays in our nation’s economy. 

The productivity of America’s farmers over the past century is 

unparalleled for thousands of businesses that provide inputs and 

the thousands more that process, market, and deliver finished 

goods. They are the very core of our nation’s wealth and abundance. 

The productivity of our farmers has fundamentally transformed 

our nation’s economy. The Farm Credit System has played a crucial role for nearly 100 years by providing a reliable source of credit 

50 

to farmers, ranchers, ag businesses, and families who live and work 

in rural America. 

As a former System borrower, I believe in the important mission 

of the Farm Credit System. As a farmer and former State Director 

of the Farm Service Agency, I know the very real consequences 

that regulations have on the daily lives of our farmers and ranchers. 

I do believe that regulations are important, but I also believe 

that over-regulation can become a burden to individuals and businesses and limit their productivity. 

I believe all regulatory agencies, especially those that have a focused mission like the Farm Credit Administration, need to balance the interests of the regulated community with clear, enforceable boundaries. It is vital to have a strong, independent regulator. 

If confirmed as a board member, I will make it my primary responsibility to support commonsense rules that protect the safety 

and soundness of the System. 

While the farm economy has been very good over the past couple 

of years and the overall economy is improving, there are some challenges that we will face very soon. With interest rates at historic 

lows, rising interest rates are inevitable. Loan repayments will become higher and will have an impact on our farmland prices. 

Commodity prices are always a concern. Increasing volatility in 

those prices will add pressure to marketing decisions by the borrowers and, ultimately, their profitability. With the current outlook 

for grain prices and the changing value of the dollar and the volatility in the global economy, the need for a system to provide good, 

stable credit is more important than ever. 

In my lifetime, one of the most dramatic changes in agriculture 

has involved the infrastructure that provides products and services 

to the farmers and the accessibility to markets that sell their products. Our rural communities were once a hub of rural commerce, 

with feed mills, equipment dealers, farm supply stores, and livestock markets. 

While it is a bit nostalgic to look back and think about those 

days, I think it is important to recognize the importance of infrastructure that supports our farmers. I am excited about the opportunity to be on the Farm Credit Administration Board and learn 

more about the partnership that the USDA has with the Rural Infrastructure Opportunity Fund. 

In conclusion, the business of farming has changed dramatically, 

but the mission of the Farm Credit System and the role of the 

Farm Credit Administration are just as important as ever. I believe 

that the farmer-owned cooperative Farm Credit System is essential 

to providing sound, adequate and constructive credit to America’s 

farmers and ranchers. 

I believe the Farm Credit System, commercial banks, community 

banks and USDA loan programs have an important role to play in 

our rural economy. Farmers and agriculturally related businesses 

benefit by having multiple competitive sources of credit. If rural 

America is going to continue to prosper, we must all work together. 

Mr. Chairman, members of this Committee, I am honored to be 

considered for a position on the Farm Credit Administration Board. 

If I am confirmed and appointed, I will pledge to fulfill my responVerDate Nov 24 2008 10:13 Feb 11, 2016 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 C:\USERS\MW42035\DESKTOP\DOCS\96173.TXT MICAH
51 

sibility to the best of my abilities. I will work with other board 

members to ensure the System remains safe, and I will promise to 

keep an open line of communication with your staff and you as 

Chairman of the Committee. 

I thank you for the opportunity to be present today. 

[The prepared statement of Mr. Hall can be found on page 68 in 

the appendix.] 

Chairman ROBERTS. Well, thank you very much. 

Mr. Hall, I neglected to—when you made reference to your family. I would like for your wife Elaine, your daughter Kathryn, your 

son William, who is doing a good job of holding up that wall underneath that light—— 

[Laughter] 

Chairman ROBERTS. —and your friend Steve Connelly, to please 

rise. 

At the same time, Mr. Tonsager, if you would have your wife 

Sharon and your son Joshua, please rise so the Committee can welcome them, please. 

Thank you very much. 

[Applause.] 

Chairman ROBERTS. Mr. Tonsager. 

STATEMENT OF DALLAS P. TONSAGER, OF SOUTH DAKOTA, TO 

BE A MEMBER OF THE FARM CREDIT ADMINISTRATION 

BOARD, FARM CREDIT ADMINISTRATION 

Mr. TONSAGER. Thank you, Mr. Chairman, and I would also like 

to thank Ranking Member Stabenow, for the invitation to appear 

before the Committee today. 

I am grateful to President Obama for nominating me for this position. 

I would like to thank former Senator Tim Johnson, Senator 

Heitkamp, and Senator Thune and other members of the Committee and their staff who have been supporting and helping me 

with this nomination process. 

I also appreciate the support I have received from many of the 

farm organizations. 

I would like to recognize my wife Sharon, and my son Josh, who 

are here today, as well as my son Keith, daughter-in-law Lindsey 

and granddaughter Ilia, who cannot be here today. 

I am excited to have this chance to work with the members of 

this Committee, the farmer members of the cooperatives of the 

Farm Credit System, and the other private financial institutions 

that serve rural America. 

If you choose to confirm my nomination, I plan to follow closely 

the guidance provided by the Farm Credit Act and to be transparent in my work. 

I have devoted my career to farming and to serving the needs of 

rural America. I believe that becoming a board member of the 

Farm Credit Administration allows me to continue that work. It is 

my hope to gain further insight into the dynamics of the capital 

markets and how they affect our rural citizens. I further hope that 

my experience will benefit the work of the Farm Credit System institutions. 

52 

I have had the good fortune to spend most of my life on a family 

farm, and to be part of a small community and its local institutions, to have lived through some very good times as well as some 

very bad ones. As you all know, agriculture is full of complexity 

and pitfalls. 

The work of the Senate Agriculture Committee, the House Agriculture Committee, and Congress as a whole has led to the creation 

of many institutions that have shaped rural America. 

I am proud to have lived on a farm that exists because of the 

Homestead Act, to have gone to a local—to a land-grant university, 

and to get electric power from a local rural electric cooperative. 

Another institution, the Farm Credit System, has consistently 

provided capital to rural America through good times and bad. The 

Farm Credit Administration is charged with ensuring the safety 

and soundness of the Farm Credit System and Farmer Mac. That 

charge means we must anticipate and prepare for the constantly 

changing risks farmers face, and we must help make sure the support they need is always there. Confidence in the strength of the 

Farm Credit System is critical to all the stakeholders in rural 

America. 

I would like to recognize the work of FCA Board Chairwoman 

and friend Jill Long Thompson and old friend and board member 

Lee Strom. 

I look forward to working with my future colleagues, Ken 

Spearman and Jeff Hall. 

Thank you for your consideration, and I look forward to any 

questions. 

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

82 in the appendix.] 

Chairman ROBERTS. Gentlemen, thank you for your patience. 

I have several questions here on behalf of myself and my colleagues. 

This is a question for you both. Of the criticism I have heard 

from our rural bankers back home is that the Farm Credit Administration is less of a regulator of the Farm Credit System and more 

of a rubberstamp. Pardon that pejorative. 

How will you ensure that there is robust oversight of the System 

and what ideas do you have going forward to make sure that confidence in the Farm Credit Administration is maintained? 

We will start with Mr. Tonsager. 

Mr. TONSAGER. I feel very confident in the capacity of the FCA 

to offer oversight of the Farm Credit System institutions. Having 

had the opportunity to work there previously, and having seen the 

back and forth that occurs and the competitive arguments that 

occur, having seen the number of responses to various regulations 

that have been put forward by all parties from rural America, I feel 

very comfortable in the capacity of the Farm Credit Administration, its employees, and the Board of Directors to carefully consider 

the arguments of all parties. 

Chairman ROBERTS. Mr. Hall. 

Mr. HALL. I think my previous experience sitting in this room 

and understanding the importance of the statutes as they are written and the rules that are set by this Committee give me the guidance to make sure that we are following those rules. 

53 

If there are occasions outside of those that we need brought to 

our attention, believe me, we will take care of those things. So we 

will follow those rules, Mr. Chairman. 

Chairman ROBERTS. I would just emphasize again, in my opening 

statement, too many farmers and ranchers and people in rural 

America believe they are being ruled, not governed. It is basically 

because of the tremendous over-regulation that we have seen in 

farm country and, for that matter, every sector of the Kansas economy, and I think that also represents every other state. 

I especially appreciate your commitment for strong oversight. 

Second question: Crop insurance is a critical tool to producers in 

Kansas and all throughout the country and many of the entities 

who finance them. What thoughts do you have about risk management and how should Farm Credit look at these tools as you consider the forecast for the ag economy? 

Mr. Hall, why don’t you go? We will go back and forth. 

Mr. HALL. Yes, sir. As the previous panels have stated the importance of crop insurance, I really do not need to go back and repeat 

that. We understand how important crop insurance is. I think the 

Farm Credit System, by offering that opportunity to producers to 

purchase crop insurance, is important. 

I think it is also a part of our responsibility to make sure that 

the producers, the borrowers, understand the best use of crop insurance. Maybe some educational programs that we can work together with educational institutions to provide more information 

might be of importance. 

Chairman ROBERTS. Mr. Tonsager. 

Mr. TONSAGER. Yes. I think—having been a farmer in the 1980s, 

I think there is much to be learned from the experiences we had 

at that time. 

How we handle risk personally on our individual farms and how 

we handle risk in the financing of farms is absolutely critical, and 

the crop insurance program is a critical part of that risk mitigation 

process that all farmers should consider. So I think it is a bottomline issue for those—all lenders in rural America, whether or not 

people carry that risk mitigation tool of crop insurance. 

Chairman ROBERTS. I thank you for that. 

As Chairman of the Committee, one of my top priorities again is 

making sure that the agencies under my jurisdiction, our jurisdiction here in the Committee, understand that our farmers often feel 

times that our government is more of an adversary than a partner. 

I hate to keep picking on that, but I hear that in town hall meeting after town hall meeting, farm group after farm group or any 

other commodity organization. 

By the way, I am going to go overtime with regards to the timer, 

and there is nobody else here that is waiting. 

[Laughter] 

Chairman ROBERTS. Except you, gentlemen, which I appreciate. 

What kind of outreach and engagement do you plan on undertaking to show that the Farm Credit Administration is looking to 

provide Kansas farmers or, for that matter, any farmer all across 

the country, that the appropriate regulatory balance is being met? 

Now you can play a certain role in this to really be of help to 

us. If confirmed, will you commit to traveling out to farm country, 

54 

more especially my State of Kansas, to meet with Farm Credit 

lenders and Kansas bankers? I think that would be a good thing 

to do as you travel around the country, to receive that kind of 

input. 

The answer is yes, by the way. 

[Laughter.] 

Mr. TONSAGER. Mr. Chairman, it is a great pleasure to get the 

chance to go out and visit producers everywhere. I was recalling 

my first term in the FCA. I think in my first 18 months I made 

26 trips to visit with boards and other parties. 

I think we have an obligation to be an arm’s-length regulator certainly, but we also have an obligation to communicate with the 

Farm Credit institutions, as well as other rural lenders, and have 

dialogues with them about the status of credit. 

Chairman ROBERTS. I appreciate that. 

Mr. Hall. 

Mr. HALL. I completely agree. I understand we are an arm’slength regulator. 

But I can tell you, as a state director of the Farm Service Agency 

traveling out to the county offices, I really learned what happens 

with producers. I learned the program technicians and the county 

executive directors are the ones that know more about the programs than the state directors sitting in the state office. So I intend to travel as much as possible. 

Chairman ROBERTS. Thank you for that. 

With the potential of continued decreases in commodity prices, 

which you both have mentioned, and a drop in the value of farmland, what concerns do you have about farmers’ ability to pay back 

the interest and principal on their loans in the near future and do 

you know if any System lenders are taking this forecast into consideration when issuing loans now? 

Mr. HALL. Just coming into this position, we have not been 

briefed on sort of the status of individual associations and where 

they are, but I promise you that once we get in there that is something that I intend to take a look at—how each association is handling, number one, land price changes, commodity price fluctuation. 

All those things are going to be an important part of how we move 

forward because there are challenges. 

I lived through the ’80s and the farm crisis, and I do not see that 

on the horizon, but I do think there are challenges that we need 

to be prepared for. 

Chairman ROBERTS. I appreciate that. 

Mr. Tonsager. 

Mr. TONSAGER. Yeah, I think we have a real obligation to work 

closely with the System and, as the regulator, with the staff, to 

look for all the early warning signs of any potential systemic problems that we can see. 

I know the System was looking hard at those when I was there 

the last time, looking for the amount of risk they could assume 

under very explosively expensive farmland price growth and concern about that effect in the long term. 

So, yes, I think we must be looking closely at the related issues. 

Chairman ROBERTS. Everybody on this Committee knows, when 

we hear from competitors that the System is expanding, according 

55 

to them, into areas of the economy that some argue Congress might 

not have envisioned when the System’s lending jurisdiction was expanded back in the early ’90s. I remember those days and when I 

was a member of the House Agriculture Committee. 

What limits are there to the lending authority of the Farm Credit System and does the Farm Credit Administration authorize System lending to any company engaged in business in the rural part 

of the country regardless of the availability of private financing? 

Mr. TONSAGER. Well, I think the number one question, having 

been an under secretary at USDA and been in the rural development mission area, is to make sure that there is adequate credit 

for all rural Americans and for agriculture to grow. 

We need to, I think, take a hard overall look at value-added agriculture, the things that add value to the processing of our products. 

I think we need to work closely with the private sector and the 

Farm Credit System to make sure that there is especially longterm credit available. 

So I think that is the overarching question as we go forward. Is 

the private sector meeting the needs of rural America? Is Farm 

Credit meeting the needs? 

If there is a lack of capacity for credit, then we need to answer 

the question, working together with both the System, the private 

sector, and addressing that. 

I think we do have a need to look closely at the statute and the 

guidance of the statute, but we need to look expansively in how we 

make sure capital—investment capital, credit capital—is available 

to accomplish what we need to have done to help rural America 

grow. 

Chairman ROBERTS. Mr. Hall. 

Mr. HALL. I believe that similar-entity legislation is maybe 20 

years old, and it was addressed at that point. 

I think there are some clear guidelines provided in statute that 

we need to follow. I guess as a regulator our responsibility is going 

to be make sure that we stay within those guidelines that are provided. 

Sometimes that line may get a little gray when it comes to different kinds of loans to be approved, and I think that is where communication with you and with the staff to make sure we are staying within our authority is vital. 

Chairman ROBERTS. I appreciate that. 

I have two more, three more, but I am going to submit those to 

you for the record because tempus is fugiting with regards to your 

commitments and that of the Chairman. 

Thank you to both of our witnesses for your time and willingness 

to be considered for service to agriculture and rural America as a 

member of the Farm Credit Administration Board. 

We will not be voting on your nomination today, but we are 

working to schedule a business meeting as soon as possible for a 

Committee vote that can actually be taken off the floor. So, hopefully, we can address this just as quickly as possible. 

To make that possible, I ask members to submit any additional 

questions that they may have—pay attention, staff—for the record 

by 5:00 tomorrow and Wednesday, February the 25th. 

Thank you, everyone, for your time today. 

56 

A special moment. We are adjourned. 

Mr. TONSAGER. Thank you. 

Mr. HALL. Thank you. 

[Whereupon, at 12:24 p.m., the Committee was adjourned.] 

(57) 

A P P E N D I X 

FEBRUARY 24, 2015 

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DOCUMENTS SUBMITTED FOR THE RECORD 

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